[Congressional Record (Bound Edition), Volume 154 (2008), Part 11]
[House]
[Pages 15891-16060]
[From the U.S. Government Publishing Office, www.gpo.gov]




               HOUSING AND ECONOMIC RECOVERY ACT OF 2008

  Mr. FRANK of Massachusetts. Mr. Speaker, pursuant to House Resolution 
1363, I call up the bill (H.R. 3221) to provide needed housing reform, 
and for other purposes, with the Senate amendment to the House 
amendments to the Senate amendment with an amendment thereto, and ask 
for its immediate consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. The Clerk will designate the Senate 
amendment.
  The text of the Senate amendment is as follows:

       Senate amendment to House amendments to Senate amendment:
       In lieu of the matter proposed to be inserted, insert the 
     following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Housing 
     and Economic Recovery Act of 2008''.
       (b) Table of Content.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                   DIVISION A--HOUSING FINANCE REFORM

Sec. 1001. Short title.
Sec. 1002. Definitions.

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

      Subtitle A--Improvement of Safety and Soundness Supervision

Sec. 1101. Establishment of the Federal Housing Finance Agency.
Sec. 1102. Duties and authorities of the Director.
Sec. 1103. Federal Housing Finance Oversight Board.
Sec. 1104. Authority to require reports by regulated entities.
Sec. 1105. Examiners and accountants; authority to contract for reviews 
              of regulated entities; ombudsman.
Sec. 1106. Assessments.
Sec. 1107. Regulations and orders.
Sec. 1108. Prudential management and operations standards.

[[Page 15892]]

Sec. 1109. Review of and authority over enterprise assets and 
              liabilities.
Sec. 1110. Risk-based capital requirements.
Sec. 1111. Minimum capital levels.
Sec. 1112. Registration under the securities laws.
Sec. 1113. Prohibition and withholding of executive compensation.
Sec. 1114. Limit on golden parachutes.
Sec. 1115. Reporting of fraudulent loans.

             Subtitle B--Improvement of Mission Supervision

Sec. 1121. Transfer of program approval and housing goal oversight.
Sec. 1122. Assumption by the Director of certain other HUD 
              responsibilities.
Sec. 1123. Review of enterprise products.
Sec. 1124. Conforming loan limits.
Sec. 1125. Annual housing report.
Sec. 1126. Public use database.
Sec. 1127. Reporting of mortgage data.
Sec. 1128. Revision of housing goals.
Sec. 1129. Duty to serve underserved markets.
Sec. 1130. Monitoring and enforcing compliance with housing goals.
Sec. 1131. Affordable housing programs.
Sec. 1132. Financial education and counseling.
Sec. 1133. Transfer and rights of certain HUD employees.

                  Subtitle C--Prompt Corrective Action

Sec. 1141. Critical capital levels.
Sec. 1142. Capital classifications.
Sec. 1143. Supervisory actions applicable to undercapitalized regulated 
              entities.
Sec. 1144. Supervisory actions applicable to significantly 
              undercapitalized regulated entities.
Sec. 1145. Authority over critically undercapitalized regulated 
              entities.

                    Subtitle D--Enforcement Actions

Sec. 1151. Cease and desist proceedings.
Sec. 1152. Temporary cease and desist proceedings.
Sec. 1153. Removal and prohibition authority.
Sec. 1154. Enforcement and jurisdiction.
Sec. 1155. Civil money penalties.
Sec. 1156. Criminal penalty.
Sec. 1157. Notice after separation from service.
Sec. 1158. Subpoena authority.

                     Subtitle E--General Provisions

Sec. 1161. Conforming and technical amendments.
Sec. 1162. Presidentially-appointed directors of enterprises.
Sec. 1163. Effective date.

                   TITLE II--FEDERAL HOME LOAN BANKS

Sec. 1201. Recognition of distinctions between the enterprises and the 
              Federal Home Loan Banks.
Sec. 1202. Directors.
Sec. 1203. Definitions.
Sec. 1204. Agency oversight of Federal Home Loan Banks.
Sec. 1205. Housing goals.
Sec. 1206. Community development financial institutions.
Sec. 1207. Sharing of information among Federal Home Loan Banks.
Sec. 1208. Exclusion from certain requirements.
Sec. 1209. Voluntary mergers.
Sec. 1210. Authority to reduce districts.
Sec. 1211. Community financial institution members.
Sec. 1212. Public use database; reports to Congress.
Sec. 1213. Semiannual reports.
Sec. 1214. Liquidation or reorganization of a Federal Home Loan Bank.
Sec. 1215. Study and report to Congress on securitization of acquired 
              member assets.
Sec. 1216. Technical and conforming amendments.
Sec. 1217. Study on Federal Home Loan Bank advances.
Sec. 1218. Federal Home Loan Bank refinancing authority for certain 
              residential mortgage loans.

TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND 
                   THE FEDERAL HOUSING FINANCE BOARD

                           Subtitle A--OFHEO

Sec. 1301. Abolishment of OFHEO.
Sec. 1302. Continuation and coordination of certain actions.
Sec. 1303. Transfer and rights of employees of OFHEO.
Sec. 1304. Transfer of property and facilities.

               Subtitle B--Federal Housing Finance Board

Sec. 1311. Abolishment of the Federal Housing Finance Board.
Sec. 1312. Continuation and coordination of certain actions.
Sec. 1313. Transfer and rights of employees of the Federal Housing 
              Finance Board.
Sec. 1314. Transfer of property and facilities.

                     TITLE IV--HOPE FOR HOMEOWNERS

Sec. 1401. Short title.
Sec. 1402. Establishment of HOPE for Homeowners Program.
Sec. 1403. Fiduciary duty of servicers of pooled residential mortgage 
              loans.
Sec. 1404. Revised standards for FHA appraisers.

                TITLE V--S.A.F.E. MORTGAGE LICENSING ACT

Sec. 1501. Short title.
Sec. 1502. Purposes and methods for establishing a mortgage licensing 
              system and registry.
Sec. 1503. Definitions.
Sec. 1504. License or registration required.
Sec. 1505. State license and registration application and issuance.
Sec. 1506. Standards for State license renewal.
Sec. 1507. System of registration administration by Federal agencies.
Sec. 1508. Secretary of Housing and Urban Development backup authority 
              to establish a loan originator licensing system.
Sec. 1509. Backup authority to establish a nationwide mortgage 
              licensing and registry system.
Sec. 1510. Fees.
Sec. 1511. Background checks of loan originators.
Sec. 1512. Confidentiality of information.
Sec. 1513. Liability provisions.
Sec. 1514. Enforcement under HUD backup licensing system.
Sec. 1515. State examination authority.
Sec. 1516. Reports and recommendations to Congress.
Sec. 1517. Study and reports on defaults and foreclosures.

                        TITLE VI--MISCELLANEOUS

Sec. 1601. Study and reports on guarantee fees.
Sec. 1602. Study and report on default risk evaluation.
Sec. 1603. Conversion of HUD contracts.
Sec. 1604. Bridge depository institutions.
Sec. 1605. Sense of the Senate.

                   DIVISION B--FORECLOSURE PREVENTION

Sec. 2001. Short title.
Sec. 2002. Emergency designation.

                 TITLE I--FHA MODERNIZATION ACT OF 2008

Sec. 2101. Short title.

              Subtitle A--Building American Homeownership

Sec. 2111. Short title.
Sec. 2112. Maximum principal loan obligation.
Sec. 2113. Cash investment requirement and prohibition of seller-funded 
              down payment assistance.
Sec. 2114. Mortgage insurance premiums.
Sec. 2115. Rehabilitation loans.
Sec. 2116. Discretionary action.
Sec. 2117. Insurance of condominiums.
Sec. 2118. Mutual Mortgage Insurance Fund.
Sec. 2119. Hawaiian home lands and Indian reservations.
Sec. 2120. Conforming and technical amendments.
Sec. 2121. Insurance of mortgages.
Sec. 2122. Home equity conversion mortgages.
Sec. 2123. Energy efficient mortgages program.
Sec. 2124. Pilot program for automated process for borrowers without 
              sufficient credit history.
Sec. 2125. Homeownership preservation.
Sec. 2126. Use of FHA savings for improvements in FHA technologies, 
              procedures, processes, program performance, staffing, and 
              salaries.
Sec. 2127. Post-purchase housing counseling eligibility improvements.
Sec. 2128. Pre-purchase homeownership counseling demonstration.
Sec. 2129. Fraud prevention.
Sec. 2130. Limitation on mortgage insurance premium increases.
Sec. 2131. Savings provision.
Sec. 2132. Implementation.
Sec. 2133. Moratorium on implementation of risk-based premiums.

          Subtitle B--Manufactured Housing Loan Modernization

Sec. 2141. Short title.
Sec. 2142. Purposes.
Sec. 2143. Exception to limitation on financial institution portfolio.
Sec. 2144. Insurance benefits.
Sec. 2145. Maximum loan limits.
Sec. 2146. Insurance premiums.
Sec. 2147. Technical corrections.
Sec. 2148. Revision of underwriting criteria.
Sec. 2149. Prohibition against kickbacks and unearned fees.
Sec. 2150. Leasehold requirements.

     TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

Sec. 2201. Temporary increase in maximum loan guaranty amount for 
              certain housing loans guaranteed by the Secretary of 
              Veterans Affairs.
Sec. 2202. Counseling on mortgage foreclosures for members of the Armed 
              Forces returning from service abroad.
Sec. 2203. Enhancement of protections for servicemembers relating to 
              mortgages and mortgage foreclosures.

TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND 
                            FORECLOSED HOMES

Sec. 2301. Emergency assistance for the redevelopment of abandoned and 
              foreclosed homes.
Sec. 2302. Nationwide distribution of resources.
Sec. 2303. Limitation on use of funds with respect to eminent domain.
Sec. 2304. Limitation on distribution of funds.
Sec. 2305. Counseling intermediaries.

                 TITLE IV--HOUSING COUNSELING RESOURCES

Sec. 2401. Housing counseling resources.
Sec. 2402. Credit counseling.

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

Sec. 2501. Short title.
Sec. 2502. Enhanced mortgage loan disclosures.
Sec. 2503. Community development investment authority for depository 
              institutions.

[[Page 15893]]

                   TITLE VI--VETERANS HOUSING MATTERS

Sec. 2601. Home improvements and structural alterations for totally 
              disabled members of the Armed Forces before discharge or 
              release from the Armed Forces.
Sec. 2602. Eligibility for specially adapted housing benefits and 
              assistance for members of the Armed Forces with service-
              connected disabilities and individuals residing outside 
              the United States.
Sec. 2603. Specially adapted housing assistance for individuals with 
              severe burn injuries.
Sec. 2604. Extension of assistance for individuals residing temporarily 
              in housing owned by a family member.
Sec. 2605. Increase in specially adapted housing benefits for disabled 
              veterans.
Sec. 2606. Report on specially adapted housing for disabled 
              individuals.
Sec. 2607. Report on specially adapted housing assistance for 
              individuals who reside in housing owned by a family 
              member on permanent basis.
Sec. 2608. Definition of annual income for purposes of section 8 and 
              other public housing programs.
Sec. 2609. Payment of transportation of baggage and household effects 
              for members of the Armed Forces who relocate due to 
              foreclosure of leased housing.

  TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT

Sec. 2701. Short title.
Sec. 2702. Public housing agency plans for certain qualified public 
              housing agencies.

            TITLE VIII--FORECLOSURE RESCUE FRAUD PROTECTION

Sec. 2801. Short title.
Sec. 2802. Definitions.
Sec. 2803. Mortgage rescue fraud protection.
Sec. 2804. Warnings to homeowners of foreclosure rescue scams.
Sec. 2805. Civil liability.
Sec. 2806. Administrative enforcement.
Sec. 2807. Limitation.
Sec. 2808. Preemption.

                   DIVISION C--TAX-RELATED PROVISIONS

Sec. 3000. Short title; etc.

                    TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                 PART I--Low-Income Housing Tax Credit

Sec. 3001. Temporary increase in volume cap for low-income housing tax 
              credit.
Sec. 3002. Determination of credit rate.
Sec. 3003. Modifications to definition of eligible basis.
Sec. 3004. Other simplification and reform of low-income housing tax 
              incentives.
Sec. 3005. Treatment of military basic pay.

        PART II--Modifications to Tax-Exempt Housing Bond Rules

Sec. 3007. Recycling of tax-exempt debt for financing residential 
              rental projects.
Sec. 3008. Coordination of certain rules applicable to low-income 
              housing credit and qualified residential rental project 
              exempt facility bonds.

  PART III--Reforms Related to the Low-Income Housing Credit and Tax-
                          Exempt Housing Bonds

Sec. 3009. Hold harmless for reductions in area median gross income.
Sec. 3010. Exception to annual current income determination requirement 
              where determination not relevant.

                   Subtitle B--Single Family Housing

Sec. 3011. First-time homebuyer credit.
Sec. 3012. Additional standard deduction for real property taxes for 
              nonitemizers.

                     Subtitle C--General Provisions

Sec. 3021. Temporary liberalization of tax-exempt housing bond rules.
Sec. 3022. Repeal of alternative minimum tax limitations on tax-exempt 
              housing bonds, low-income housing tax credit, and 
              rehabilitation credit.
Sec. 3023. Bonds guaranteed by Federal home loan banks eligible for 
              treatment as tax-exempt bonds.
Sec. 3024. Modification of rules pertaining to FIRPTA nonforeign 
              affidavits.
Sec. 3025. Modification of definition of tax-exempt use property for 
              purposes of the rehabilitation credit.
Sec. 3026. Extension of special rule for mortgage revenue bonds for 
              residences located in disaster areas.

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

      Subtitle A--Foreign Currency and Other Qualified Activities

Sec. 3031. Revisions to REIT income tests.
Sec. 3032. Revisions to REIT asset tests.
Sec. 3033. Conforming foreign currency revisions.

                 Subtitle B--Taxable REIT Subsidiaries

Sec. 3041. Conforming taxable REIT subsidiary asset test.

                        Subtitle C--Dealer Sales

Sec. 3051. Holding period under safe harbor.
Sec. 3052. Determining value of sales under safe harbor.

                     Subtitle D--Health Care REITs

Sec. 3061. Conformity for health care facilities.

                      Subtitle E--Effective Dates

Sec. 3071. Effective dates.

                     TITLE III--REVENUE PROVISIONS

                     Subtitle A--General Provisions

Sec. 3081. Election to accelerate amt and r and d credits in lieu of 
              bonus depreciation.
Sec. 3082. Certain GO Zone incentives.

                      Subtitle B--Revenue Offsets

Sec. 3091. Returns relating to payments made in settlement of payment 
              card and third party network transactions.
Sec. 3092. Gain from sale of principal residence allocated to 
              nonqualified use not excluded from income.
Sec. 3093. Increase in information return penalties.
Sec. 3094. Increase in penalty for failure to file S corporation 
              returns.
Sec. 3095. Increase in penalty for failure to file partnership returns.
Sec. 3096. Increase in minimum penalty on failure to file a return of 
              tax.

                   DIVISION A--HOUSING FINANCE REFORM

     SEC. 1001. SHORT TITLE.

       This division may be cited as the ``Federal Housing Finance 
     Regulatory Reform Act of 2008''.

     SEC. 1002. DEFINITIONS.

       (a) Federal Safety and Soundness Act Definitions.--Section 
     1303 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4502) is amended--
       (1) in each of paragraphs (8), (9), (10), and (19), by 
     striking ``Secretary'' each place that term appears and 
     inserting ``Director'';
       (2) by redesignating paragraphs (16) through (19) as 
     paragraphs (21) through (24), respectively;
       (3) by striking paragraphs (13) through (15) and inserting 
     the following:
       ``(19) Office of finance.--The term `Office of Finance' 
     means the Office of Finance of the Federal Home Loan Bank 
     System (or any successor thereto).
       ``(20) Regulated entity.--The term `regulated entity' 
     means--
       ``(A) the Federal National Mortgage Association and any 
     affiliate thereof;
       ``(B) the Federal Home Loan Mortgage Corporation and any 
     affiliate thereof; and
       ``(C) any Federal Home Loan Bank.'';
       (4) by redesignating paragraphs (11) and (12) as paragraphs 
     (17) and (18), respectively;
       (5) by redesignating paragraph (7) as paragraph (12);
       (6) by redesignating paragraphs (8) through (10) as 
     paragraphs (14) through (16), respectively;
       (7) in paragraph (5)--
       (A) by striking ``(5)'' and inserting ``(9)''; and
       (B) by striking ``Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban 
     Development'' and inserting ``Federal Housing Finance 
     Agency'';
       (8) by redesignating paragraph (6) as paragraph (10);
       (9) by redesignating paragraphs (2) through (4) as 
     paragraphs (5) through (7), respectively;
       (10) by inserting after paragraph (7), as redesignated, the 
     following:
       ``(8) Default; in danger of default.--
       ``(A) Default.--The term `default' means, with respect to a 
     regulated entity, any adjudication or other official 
     determination by any court of competent jurisdiction, or the 
     Agency, pursuant to which a conservator, receiver, limited-
     life regulated entity, or legal custodian is appointed for a 
     regulated entity.
       ``(B) In danger of default.--The term `in danger of 
     default' means a regulated entity with respect to which, in 
     the opinion of the Agency--
       ``(i) the regulated entity is not likely to be able to pay 
     the obligations of the regulated entity in the normal course 
     of business; or
       ``(ii) the regulated entity--

       ``(I) has incurred or is likely to incur losses that will 
     deplete all or substantially all of its capital; and
       ``(II) there is no reasonable prospect that the capital of 
     the regulated entity will be replenished.'';

       (11) by inserting after paragraph (1) the following:
       ``(2) Agency.--The term `Agency' means the Federal Housing 
     Finance Agency established under section 1311.
       ``(3) Authorizing statutes.--The term `authorizing 
     statutes' means--
       ``(A) the Federal National Mortgage Association Charter 
     Act;
       ``(B) the Federal Home Loan Mortgage Corporation Act; and
       ``(C) the Federal Home Loan Bank Act.
       ``(4) Board.--The term `Board' means the Federal Housing 
     Finance Oversight Board established under section 1313A.'';
       (12) by inserting after paragraph (10), as redesignated by 
     this section, the following:
       ``(11) Entity-affiliated party.--The term `entity-
     affiliated party' means--
       ``(A) any director, officer, employee, or controlling 
     stockholder of, or agent for, a regulated entity;
       ``(B) any shareholder, affiliate, consultant, or joint 
     venture partner of a regulated entity, and any other person, 
     as determined by the Director (by regulation or on a case-by-
     case basis) that participates in the conduct of the affairs 
     of a regulated entity, provided that a member of a Federal 
     Home Loan Bank shall not be deemed to have participated in 
     the affairs of that Bank solely by virtue of being a 
     shareholder of, and obtaining advances from, that Bank;

[[Page 15894]]

       ``(C) any independent contractor for a regulated entity 
     (including any attorney, appraiser, or accountant), if--
       ``(i) the independent contractor knowingly or recklessly 
     participates in--

       ``(I) any violation of any law or regulation;
       ``(II) any breach of fiduciary duty; or
       ``(III) any unsafe or unsound practice; and

       ``(ii) such violation, breach, or practice caused, or is 
     likely to cause, more than a minimal financial loss to, or a 
     significant adverse effect on, the regulated entity;
       ``(D) any not-for-profit corporation that receives its 
     principal funding, on an ongoing basis, from any regulated 
     entity; and
       ``(E) the Office of Finance.'';
       (13) by inserting after paragraph (12), as redesignated by 
     this section, the following:
       ``(13) Limited-life regulated entity.--The term `limited-
     life regulated entity' means an entity established by the 
     Agency under section 1367(i) with respect to a Federal Home 
     Loan Bank in default or in danger of default or with respect 
     to an enterprise in default or in danger of default.''; and
       (14) by adding at the end the following:
       ``(25) Violation.--The term `violation' includes any action 
     (alone or in combination with another or others) for or 
     toward causing, bringing about, participating in, counseling, 
     or aiding or abetting a violation.''.
       (b) References in This Act.--As used in this Act, unless 
     otherwise specified--
       (1) the term ``Agency'' means the Federal Housing Finance 
     Agency;
       (2) the term ``Director'' means the Director of the Agency; 
     and
       (3) the terms ``enterprise'', ``regulated entity'', and 
     ``authorizing statutes'' have the same meanings as in section 
     1303 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992, as amended by this Act.

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

      Subtitle A--Improvement of Safety and Soundness Supervision

     SEC. 1101. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE 
                   AGENCY.

       The Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
     striking sections 1311 and 1312 and inserting the following:

     ``SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE 
                   AGENCY.

       ``(a) Establishment.--There is established the Federal 
     Housing Finance Agency, which shall be an independent agency 
     of the Federal Government.
       ``(b) General Supervisory and Regulatory Authority.--
       ``(1) In general.--Each regulated entity shall, to the 
     extent provided in this title, be subject to the supervision 
     and regulation of the Agency.
       ``(2) Authority over fannie mae, freddie mac, the federal 
     home loan banks, and the office of finance.--The Director 
     shall have general regulatory authority over each regulated 
     entity and the Office of Finance, and shall exercise such 
     general regulatory authority, including such duties and 
     authorities set forth under section 1313, to ensure that the 
     purposes of this Act, the authorizing statutes, and any other 
     applicable law are carried out.
       ``(c) Savings Provision.--The authority of the Director to 
     take actions under subtitles B and C shall not in any way 
     limit the general supervisory and regulatory authority 
     granted to the Director under subsection (b).

     ``SEC. 1312. DIRECTOR.

       ``(a) Establishment of Position.--There is established the 
     position of the Director of the Agency, who shall be the head 
     of the Agency.
       ``(b) Appointment; Term.--
       ``(1) Appointment.--The Director shall be appointed by the 
     President, by and with the advice and consent of the Senate, 
     from among individuals who are citizens of the United States, 
     have a demonstrated understanding of financial management or 
     oversight, and have a demonstrated understanding of capital 
     markets, including the mortgage securities markets and 
     housing finance.
       ``(2) Term.--The Director shall be appointed for a term of 
     5 years, unless removed before the end of such term for cause 
     by the President.
       ``(3) Vacancy.--A vacancy in the position of Director that 
     occurs before the expiration of the term for which a Director 
     was appointed shall be filled in the manner established under 
     paragraph (1), and the Director appointed to fill such 
     vacancy shall be appointed only for the remainder of such 
     term.
       ``(4) Service after end of term.--An individual may serve 
     as the Director after the expiration of the term for which 
     appointed until a successor has been appointed.
       ``(5) Transitional provision.--Notwithstanding paragraphs 
     (1) and (2), during the period beginning on the effective 
     date of the Federal Housing Finance Regulatory Reform Act of 
     2008, and ending on the date on which the Director is 
     appointed and confirmed, the person serving as the Director 
     of the Office of Federal Housing Enterprise Oversight of the 
     Department of Housing and Urban Development on that effective 
     date shall act for all purposes as, and with the full powers 
     of, the Director.
       ``(c) Deputy Director of the Division of Enterprise 
     Regulation.--
       ``(1) In general.--The Agency shall have a Deputy Director 
     of the Division of Enterprise Regulation, who shall be 
     designated by the Director from among individuals who are 
     citizens of the United States, have a demonstrated 
     understanding of financial management or oversight, and have 
     a demonstrated understanding of mortgage securities markets 
     and housing finance.
       ``(2) Functions.--The Deputy Director of the Division of 
     Enterprise Regulation shall have such functions, powers, and 
     duties with respect to the oversight of the enterprises as 
     the Director shall prescribe.
       ``(d) Deputy Director Of The Division Of Federal Home Loan 
     Bank Regulation.--
       ``(1) In general.--The Agency shall have a Deputy Director 
     of the Division of Federal Home Loan Bank Regulation, who 
     shall be designated by the Director from among individuals 
     who are citizens of the United States, have a demonstrated 
     understanding of financial management or oversight, and have 
     a demonstrated understanding of the Federal Home Loan Bank 
     System and housing finance.
       ``(2) Functions.--The Deputy Director of the Division of 
     Federal Home Loan Bank Regulation shall have such functions, 
     powers, and duties with respect to the oversight of the 
     Federal Home Loan Banks as the Director shall prescribe.
       ``(e) Deputy Director for Housing Mission and Goals.--
       ``(1) In general.--The Agency shall have a Deputy Director 
     for Housing Mission and Goals, who shall be designated by the 
     Director from among individuals who are citizens of the 
     United States, and have a demonstrated understanding of the 
     housing markets and housing finance.
       ``(2) Functions.--The Deputy Director for Housing Mission 
     and Goals shall have such functions, powers, and duties with 
     respect to the oversight of the housing mission and goals of 
     the enterprises, and with respect to oversight of the housing 
     finance and community and economic development mission of the 
     Federal Home Loan Banks, as the Director shall prescribe.
       ``(3) Considerations.--In exercising such functions, 
     powers, and duties, the Deputy Director for Housing Mission 
     and Goals shall consider the differences between the 
     enterprises and the Federal Home Loan Banks, including those 
     described in section 1313(f).
       ``(f) Acting Director.--In the event of the death, 
     resignation, sickness, or absence of the Director, the 
     President shall designate either the Deputy Director of the 
     Division of Enterprise Regulation, the Deputy Director of the 
     Division of Federal Home Loan Bank Regulation, or the Deputy 
     Director for Housing Mission and Goals, to serve as acting 
     Director until the return of the Director, or the appointment 
     of a successor pursuant to subsection (b).
       ``(g) Limitations.--The Director and each of the Deputy 
     Directors may not--
       ``(1) have any direct or indirect financial interest in any 
     regulated entity or entity-affiliated party;
       ``(2) hold any office, position, or employment in any 
     regulated entity or entity-affiliated party; or
       ``(3) have served as an executive officer or director of 
     any regulated entity or entity-affiliated party at any time 
     during the 3-year period preceding the date of appointment or 
     designation of such individual as Director or Deputy 
     Director, as applicable.''.

     SEC. 1102. DUTIES AND AUTHORITIES OF THE DIRECTOR.

       (a) In General.--Section 1313 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4513) is amended to read as follows:

     ``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.

       ``(a) Duties.--
       ``(1) Principal duties.--The principal duties of the 
     Director shall be--
       ``(A) to oversee the prudential operations of each 
     regulated entity; and
       ``(B) to ensure that--
       ``(i) each regulated entity operates in a safe and sound 
     manner, including maintenance of adequate capital and 
     internal controls;
       ``(ii) the operations and activities of each regulated 
     entity foster liquid, efficient, competitive, and resilient 
     national housing finance markets (including activities 
     relating to mortgages on housing for low- and moderate-income 
     families involving a reasonable economic return that may be 
     less than the return earned on other activities);
       ``(iii) each regulated entity complies with this title and 
     the rules, regulations, guidelines, and orders issued under 
     this title and the authorizing statutes;
       ``(iv) each regulated entity carries out its statutory 
     mission only through activities that are authorized under and 
     consistent with this title and the authorizing statutes; and
       ``(v) the activities of each regulated entity and the 
     manner in which such regulated entity is operated are 
     consistent with the public interest.
       ``(2) Scope of authority.--The authority of the Director 
     shall include the authority--
       ``(A) to review and, if warranted based on the principal 
     duties described in paragraph (1), reject any acquisition or 
     transfer of a controlling interest in a regulated entity; and
       ``(B) to exercise such incidental powers as may be 
     necessary or appropriate to fulfill the duties and 
     responsibilities of the Director in the supervision and 
     regulation of each regulated entity.
       ``(b) Delegation of Authority.--The Director may delegate 
     to officers and employees of the Agency any of the functions, 
     powers, or duties of the Director, as the Director considers 
     appropriate.
       ``(c) Litigation Authority.--
       ``(1) In general.--In enforcing any provision of this 
     title, any regulation or order prescribed

[[Page 15895]]

     under this title, or any other provision of law, rule, 
     regulation, or order, or in any other action, suit, or 
     proceeding to which the Director is a party or in which the 
     Director is interested, and in the administration of 
     conservatorships and receiverships, the Director may act in 
     the Director's own name and through the Director's own 
     attorneys.
       ``(2) Subject to suit.--Except as otherwise provided by 
     law, the Director shall be subject to suit (other than suits 
     on claims for money damages) by a regulated entity with 
     respect to any matter under this title or any other 
     applicable provision of law, rule, order, or regulation under 
     this title, in the United States district court for the 
     judicial district in which the regulated entity has its 
     principal place of business, or in the United States District 
     Court for the District of Columbia, and the Director may be 
     served with process in the manner prescribed by the Federal 
     Rules of Civil Procedure.''.
       (b) Independence in Congressional Testimony and 
     Recommendations.--Section 111 of Public Law 93-495 (12 U.S.C. 
     250) is amended by striking ``the Federal Housing Finance 
     Board'' and inserting ``the Director of the Federal Housing 
     Finance Agency''.

     SEC. 1103. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.

       (a) In General.--The Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
     amended by inserting after section 1313 the following:

     ``SEC. 1313A. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.

       ``(a) In General.--There is established the Federal Housing 
     Finance Oversight Board, which shall advise the Director with 
     respect to overall strategies and policies in carrying out 
     the duties of the Director under this title.
       ``(b) Limitations.--The Board may not exercise any 
     executive authority, and the Director may not delegate to the 
     Board any of the functions, powers, or duties of the 
     Director.
       ``(c) Composition.--The Board shall be comprised of 4 
     members, of whom--
       ``(1) 1 member shall be the Secretary of the Treasury;
       ``(2) 1 member shall be the Secretary of Housing and Urban 
     Development;
       ``(3) 1 member shall be the Chairman of the Securities and 
     Exchange Commission; and
       ``(4) 1 member shall be the Director, who shall serve as 
     the Chairperson of the Board.
       ``(d) Meetings.--
       ``(1) In general.--The Board shall meet upon notice by the 
     Director, but in no event shall the Board meet less 
     frequently than once every 3 months.
       ``(2) Special meetings.--Either the Secretary of the 
     Treasury, the Secretary of Housing and Urban Development, or 
     the Chairman of the Securities and Exchange Commission may, 
     upon giving written notice to the Director, require a special 
     meeting of the Board.
       ``(e) Testimony.--On an annual basis, the Board shall 
     testify before Congress regarding--
       ``(1) the safety and soundness of the regulated entities;
       ``(2) any material deficiencies in the conduct of the 
     operations of the regulated entities;
       ``(3) the overall operational status of the regulated 
     entities;
       ``(4) an evaluation of the performance of the regulated 
     entities in carrying out their respective missions;
       ``(5) operations, resources, and performance of the Agency; 
     and
       ``(6) such other matters relating to the Agency and its 
     fulfillment of its mission, as the Board determines 
     appropriate.''.
       (b) Annual Report of the Director.--Section 1319B(a) of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4521(a)) is amended--
       (1) by striking ``enterprise'' each place that term appears 
     and inserting ``regulated entity'';
       (2) by striking ``enterprises'' each place that term 
     appears and inserting ``regulated entities'';
       (3) in paragraph (3), by striking ``; and'' and inserting a 
     semicolon;
       (4) in paragraph (4), by striking ``1994.'' and inserting 
     ``1994; and''; and
       (5) by adding at the end the following:
       ``(5) the assessment of the Board or any of its members 
     with respect to--
       ``(A) the safety and soundness of the regulated entities;
       ``(B) any material deficiencies in the conduct of the 
     operations of the regulated entities;
       ``(C) the overall operational status of the regulated 
     entities; and
       ``(D) an evaluation of the performance of the regulated 
     entities in carrying out their respective missions;
       ``(6) operations, resources, and performance of the Agency; 
     and
       ``(7) such other matters relating to the Agency and the 
     fulfillment of its mission.''.

     SEC. 1104. AUTHORITY TO REQUIRE REPORTS BY REGULATED 
                   ENTITIES.

       (a) In General.--Section 1314 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4514) is amended--
       (1) in the section heading, by striking ``ENTERPRISES'' and 
     inserting ``REGULATED ENTITIES'';
       (2) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity'';
       (3) by striking ``the enterprise'' and inserting ``the 
     regulated entity'';
       (4) in subsection (a)--
       (A) by striking the subsection heading and all that follows 
     through ``and operations'' in paragraph (1) and inserting the 
     following:
       ``(a) Regular and Special Reports.--
       ``(1) Regular reports.--The Director may require, by 
     general or specific orders, a regulated entity to submit 
     regular reports, including financial statements determined on 
     a fair value basis, on the condition (including financial 
     condition), management, activities, or operations of the 
     regulated entity, as the Director considers appropriate''; 
     and
       (B) in paragraph (2)--
       (i) by inserting ``, by general or specific orders,'' after 
     ``may also require''; and
       (ii) by striking ``whenever'' and inserting ``on any of the 
     topics specified in paragraph (1) or any other relevant 
     topics, if''; and
       (5) by adding at the end the following:
       ``(c) Penalties for Failure To Make Reports.--
       ``(1) Violations.--It shall be a violation of this section 
     for any regulated entity--
       ``(A) to fail to make, transmit, or publish any report or 
     obtain any information required by the Director under this 
     section, section 309(k) of the Federal National Mortgage 
     Association Charter Act, section 307(c) of the Federal Home 
     Loan Mortgage Corporation Act, or section 20 of the Federal 
     Home Loan Bank Act, within the period of time specified in 
     such provision of law or otherwise by the Director; or
       ``(B) to submit or publish any false or misleading report 
     or information under this section.
       ``(2) Penalties.--
       ``(A) First tier.--
       ``(i) In general.--A violation described in paragraph (1) 
     shall be subject to a penalty of not more than $2,000 for 
     each day during which such violation continues, in any case 
     in which--

       ``(I) the subject regulated entity maintains procedures 
     reasonably adapted to avoid any inadvertent error and the 
     violation was unintentional and a result of such an error; or
       ``(II) the violation was an inadvertent transmittal or 
     publication of any report which was minimally late.

       ``(ii) Burden of proof.--For purposes of this subparagraph, 
     the regulated entity shall have the burden of proving that 
     the error was inadvertent or that a report was inadvertently 
     transmitted or published late.
       ``(B) Second tier.--A violation described in paragraph (1) 
     shall be subject to a penalty of not more than $20,000 for 
     each day during which such violation continues or such false 
     or misleading information is not corrected, in any case that 
     is not addressed in subparagraph (A) or (C).
       ``(C) Third tier.--A violation described in paragraph (1) 
     shall be subject to a penalty of not more than $1,000,000 per 
     day for each day during which such violation continues or 
     such false or misleading information is not corrected, in any 
     case in which the subject regulated entity committed such 
     violation knowingly or with reckless disregard for the 
     accuracy of any such information or report.
       ``(3) Assessments.--Any penalty imposed under this 
     subsection shall be in lieu of a penalty under section 1376, 
     but shall be assessed and collected by the Director in the 
     manner provided in section 1376 for penalties imposed under 
     that section, and any such assessment (including the 
     determination of the amount of the penalty) shall be 
     otherwise subject to the provisions of section 1376.
       ``(4) Hearing.--A regulated entity against which a penalty 
     is assessed under this section shall be afforded an agency 
     hearing if the regulated entity submits a request for a 
     hearing not later than 20 days after the date of the issuance 
     of the notice of assessment. Section 1374 shall apply to any 
     such proceedings.''.
       (b) Conforming Amendment.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et 
     seq.) is amended by striking sections 1327 and 1328.

     SEC. 1105. EXAMINERS AND ACCOUNTANTS; AUTHORITY TO CONTRACT 
                   FOR REVIEWS OF REGULATED ENTITIES; OMBUDSMAN.

       (a) In General.--Section 1317 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4517) is amended--
       (1) in subsection (a), by striking ``enterprise'' each 
     place that term appears and inserting ``regulated entity'';
       (2) in subsection (b)--
       (A) by inserting ``of a regulated entity'' after ``under 
     this section''; and
       (B) by striking ``to determine the condition of an 
     enterprise for the purpose of ensuring its financial safety 
     and soundness'' and inserting ``or appropriate'';
       (3) in subsection (c), in the second sentence, by inserting 
     before the period ``to conduct examinations under this 
     section'';
       (4) by redesignating subsections (d) through (f) as 
     subsections (e) through (g), respectively; and
       (5) by inserting after subsection (c) the following:
       ``(d) Inspector General.--There shall be within the Agency 
     an Inspector General, who shall be appointed in accordance 
     with section 3(a) of the Inspector General Act of 1978.''.
       (b) Direct Hire Authority To Hire Accountants, Economists, 
     and Examiners.--Section 1317 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4517) is amended by adding at the end the following:
       ``(h) Appointment of Accountants, Economists, and 
     Examiners.--
       ``(1) Applicability.--This section shall apply with respect 
     to any position of examiner, accountant, economist, and 
     specialist in financial markets and in technology at the 
     Agency, with respect to supervision and regulation of the 
     regulated entities, that is in the competitive service.

[[Page 15896]]

       ``(2) Appointment authority.--The Director may appoint 
     candidates to any position described in paragraph (1)--
       ``(A) in accordance with the statutes, rules, and 
     regulations governing appointments in the excepted service; 
     and
       ``(B) notwithstanding any statutes, rules, and regulations 
     governing appointments in the competitive service.''.
       (c) Amendments to Inspector General Act.--Section 11 of the 
     Inspector General Act of 1978 (5 U.S.C. App.) is amended--
       (1) in paragraph (1), by inserting ``; the Director of the 
     Federal Housing Finance Agency'' after ``Social Security 
     Administration''; and
       (2) in paragraph (2), by inserting ``, the Federal Housing 
     Finance Agency'' after ``Social Security Administration''.
       (d) Authority To Contract for Reviews of Regulated 
     Entities.--Section 1319 of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4519) 
     is amended--
       (1) in the section heading, by striking ``ENTERPRISES BY 
     RATING ORGANIZATION'' and inserting ``REGULATED ENTITIES''; 
     and
       (2) by striking ``enterprises'' and inserting ``regulated 
     entities''.
       (e) Office of the Ombudsman.--Section 1317 of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4517) is amended by adding at the end the 
     following:
       ``(i) Ombudsman.--The Director shall establish, by 
     regulation, an Office of the Ombudsman within the Agency, 
     which shall be responsible for considering complaints and 
     appeals, from any regulated entity and any person that has a 
     business relationship with a regulated entity, regarding any 
     matter relating to the regulation and supervision of such 
     regulated entity by the Agency. The regulation issued by the 
     Director under this subsection shall specify the authority 
     and duties of the Office of the Ombudsman.''.

     SEC. 1106. ASSESSMENTS.

       Section 1316 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4516) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Annual Assessments.--The Director shall establish and 
     collect from the regulated entities annual assessments in an 
     amount not exceeding the amount sufficient to provide for 
     reasonable costs (including administrative costs) and 
     expenses of the Agency, including--
       ``(1) the expenses of any examinations under section 1317 
     of this Act and under section 20 of the Federal Home Loan 
     Bank Act;
       ``(2) the expenses of obtaining any reviews and credit 
     assessments under section 1319;
       ``(3) such amounts in excess of actual expenses for any 
     given year as deemed necessary by the Director to maintain a 
     working capital fund in accordance with subsection (e); and
       ``(4) the windup of the affairs of the Office of Federal 
     Housing Enterprise Oversight and the Federal Housing Finance 
     Board under title III of the Federal Housing Finance 
     Regulatory Reform Act of 2008.'';
       (2) in subsection (b)--
       (A) by realigning the margins of paragraph (2) two ems from 
     the left, so as to align the left margin of such paragraph 
     with the left margins of paragraph (1);
       (B) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (4), respectively; and
       (C) by inserting after paragraph (1) the following:
       ``(2) Separate treatment of federal home loan bank and 
     enterprise assessments.--Assessments collected from the 
     enterprises shall not exceed the amounts sufficient to 
     provide for the costs and expenses described in subsection 
     (a) relating to the enterprises. Assessments collected from 
     the Federal Home Loan Banks shall not exceed the amounts 
     sufficient to provide for the costs and expenses described in 
     subsection (a) relating to the Federal Home Loan Banks.'';
       (3) by striking subsection (c) and inserting the following:
       ``(c) Increased Costs of Regulation.--
       ``(1) Increase for inadequate capitalization.--The 
     semiannual payments made pursuant to subsection (b) by any 
     regulated entity that is not classified (for purposes of 
     subtitle B) as adequately capitalized may be increased, as 
     necessary, in the discretion of the Director to pay 
     additional estimated costs of regulation of the regulated 
     entity.
       ``(2) Adjustment for enforcement activities.--The Director 
     may adjust the amounts of any semiannual payments for an 
     assessment under subsection (a) that are to be paid pursuant 
     to subsection (b) by a regulated entity, as necessary in the 
     discretion of the Director, to ensure that the costs of 
     enforcement activities under this Act for a regulated entity 
     are borne only by such regulated entity.
       ``(3) Additional assessment for deficiencies.--If at any 
     time, as a result of increased costs of regulation of a 
     regulated entity that is not classified (for purposes of 
     subtitle B) as adequately capitalized or as the result of 
     supervisory or enforcement activities under this Act for a 
     regulated entity, the amount available from any semiannual 
     payment made by such regulated entity pursuant to subsection 
     (b) is insufficient to cover the costs of the Agency with 
     respect to such entity, the Director may make and collect 
     from such regulated entity an immediate assessment to cover 
     the amount of such deficiency for the semiannual period. If, 
     at the end of any semiannual period during which such an 
     assessment is made, any amount remains from such assessment, 
     such remaining amount shall be deducted from the assessment 
     for such regulated entity for the following semiannual 
     period.'';
       (4) in subsection (d), by striking ``If'' and inserting 
     ``Except with respect to amounts collected pursuant to 
     subsection (a)(3), if''; and
       (5) by striking subsections (e) through (g) and inserting 
     the following:
       ``(e) Working Capital Fund.--At the end of each year for 
     which an assessment under this section is made, the Director 
     shall remit to each regulated entity any amount of assessment 
     collected from such regulated entity that is attributable to 
     subsection (a)(3) and is in excess of the amount the Director 
     deems necessary to maintain a working capital fund.
       ``(f) Treatment of Assessments.--
       ``(1) Deposit.--Amounts received by the Director from 
     assessments under this section may be deposited by the 
     Director in the manner provided in section 5234 of the 
     Revised Statutes of the United States (12 U.S.C. 192) for 
     monies deposited by the Comptroller of the Currency.
       ``(2) Not government funds.--The amounts received by the 
     Director from any assessment under this section shall not be 
     construed to be Government or public funds or appropriated 
     money.
       ``(3) No apportionment of funds.--Notwithstanding any other 
     provision of law, the amounts received by the Director from 
     any assessment under this section shall not be subject to 
     apportionment for the purpose of chapter 15 of title 31, 
     United States Code, or under any other authority.
       ``(4) Use of funds.--The Director may use any amounts 
     received by the Director from assessments under this section 
     for compensation of the Director and other employees of the 
     Agency and for all other expenses of the Director and the 
     Agency.
       ``(5) Availability of oversight fund amounts.--
     Notwithstanding any other provision of law, any amounts 
     remaining in the Federal Housing Enterprises Oversight Fund 
     established under this section (as in effect before the 
     effective date of the Federal Housing Finance Regulatory 
     Reform Act of 2008, and any amounts remaining from 
     assessments on the Federal Home Loan Banks pursuant to 
     section 18(b) of the Federal Home Loan Bank Act (12 U.S.C. 
     1438(b)), shall, upon such effective date, be treated for 
     purposes of this subsection as amounts received from 
     assessments under this section.
       ``(6) Treasury investments.--
       ``(A) Authority.--The Director may request the Secretary of 
     the Treasury to invest such portions of amounts received by 
     the Director from assessments paid under this section that, 
     in the Director's discretion, are not required to meet the 
     current working needs of the Agency.
       ``(B) Government obligations.--Pursuant to a request under 
     subparagraph (A), the Secretary of the Treasury shall invest 
     such amounts in Government obligations guaranteed as to 
     principal and interest by the United States with maturities 
     suitable to the needs of the Agency and bearing interest at a 
     rate determined by the Secretary of the Treasury taking into 
     consideration current market yields on outstanding marketable 
     obligations of the United States of comparable maturity.
       ``(g) Budget and Financial Management.--
       ``(1) Financial operating plans and forecasts.--The 
     Director shall provide to the Director of the Office of 
     Management and Budget copies of the Director's financial 
     operating plans and forecasts, as prepared by the Director in 
     the ordinary course of the Agency's operations, and copies of 
     the quarterly reports of the Agency's financial condition and 
     results of operations, as prepared by the Director in the 
     ordinary course of the Agency's operations.
       ``(2) Financial statements.--The Agency shall prepare 
     annually a statement of--
       ``(A) assets and liabilities and surplus or deficit;
       ``(B) income and expenses; and
       ``(C) sources and application of funds.
       ``(3) Financial management systems.--The Agency shall 
     implement and maintain financial management systems that--
       ``(A) comply substantially with Federal financial 
     management systems requirements and applicable Federal 
     accounting standards; and
       ``(B) use a general ledger system that accounts for 
     activity at the transaction level.
       ``(4) Assertion of internal controls.--The Director shall 
     provide to the Comptroller General of the United States an 
     assertion as to the effectiveness of the internal controls 
     that apply to financial reporting by the Agency, using the 
     standards established in section 3512(c) of title 31, United 
     States Code.
       ``(5) Rule of construction.--This subsection may not be 
     construed as implying any obligation on the part of the 
     Director to consult with or obtain the consent or approval of 
     the Director of the Office of Management and Budget with 
     respect to any report, plan, forecast, or other information 
     referred to in paragraph (1) or any jurisdiction or oversight 
     over the affairs or operations of the Agency.
       ``(h) Audit of Agency.--
       ``(1) In general.--The Comptroller General shall annually 
     audit the financial transactions of the Agency in accordance 
     with the United States generally accepted government auditing 
     standards as may be prescribed by the Comptroller General of 
     the United States. The audit shall be conducted at the place 
     or places where accounts of the Agency are normally kept. The 
     representatives of the Government Accountability Office shall 
     have access to the personnel and to all books, accounts, 
     documents, papers, records (including electronic records), 
     reports,

[[Page 15897]]

     files, and all other papers, automated data, things, or 
     property belonging to or under the control of or used or 
     employed by the Agency pertaining to its financial 
     transactions and necessary to facilitate the audit, and such 
     representatives shall be afforded full facilities for 
     verifying transactions with the balances or securities held 
     by depositories, fiscal agents, and custodians. All such 
     books, accounts, documents, records, reports, files, papers, 
     and property of the Agency shall remain in possession and 
     custody of the Agency. The Comptroller General may obtain and 
     duplicate any such books, accounts, documents, records, 
     working papers, automated data and files, or other 
     information relevant to such audit without cost to the 
     Comptroller General and the Comptroller General's right of 
     access to such information shall be enforceable pursuant to 
     section 716(c) of title 31, United States Code.
       ``(2) Report.--The Comptroller General shall submit to the 
     Congress a report of each annual audit conducted under this 
     subsection. The report to the Congress shall set forth the 
     scope of the audit and shall include the statement of assets 
     and liabilities and surplus or deficit, the statement of 
     income and expenses, the statement of sources and application 
     of funds, and such comments and information as may be deemed 
     necessary to inform Congress of the financial operations and 
     condition of the Agency, together with such recommendations 
     with respect thereto as the Comptroller General may deem 
     advisable. A copy of each report shall be furnished to the 
     President and to the Agency at the time submitted to the 
     Congress.
       ``(3) Assistance and costs.--For the purpose of conducting 
     an audit under this subsection, the Comptroller General may, 
     in the discretion of the Comptroller General, employ by 
     contract, without regard to section 3709 of the Revised 
     Statutes of the United States (41 U.S.C. 5), professional 
     services of firms and organizations of certified public 
     accountants for temporary periods or for special purposes. 
     Upon the request of the Comptroller General, the Director of 
     the Agency shall transfer to the Government Accountability 
     Office from funds available, the amount requested by the 
     Comptroller General to cover the full costs of any audit and 
     report conducted by the Comptroller General. The Comptroller 
     General shall credit funds transferred to the account 
     established for salaries and expenses of the Government 
     Accountability Office, and such amount shall be available 
     upon receipt and without fiscal year limitation to cover the 
     full costs of the audit and report.''.

     SEC. 1107. REGULATIONS AND ORDERS.

       Section 1319G of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4526) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Authority.--The Director shall issue any regulations, 
     guidelines, or orders necessary to carry out the duties of 
     the Director under this title or the authorizing statutes, 
     and to ensure that the purposes of this title and the 
     authorizing statutes are accomplished.''; and
       (2) by striking subsection (c).

     SEC. 1108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

       The Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
     inserting after section 1313A, as added by this Act, the 
     following new section:

     ``SEC. 1313B. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

       ``(a) Standards.--The Director shall establish standards, 
     by regulation or guideline, for each regulated entity 
     relating to--
       ``(1) adequacy of internal controls and information systems 
     taking into account the nature and scale of business 
     operations;
       ``(2) independence and adequacy of internal audit systems;
       ``(3) management of interest rate risk exposure;
       ``(4) management of market risk, including standards that 
     provide for systems that accurately measure, monitor, and 
     control market risks and, as warranted, that establish 
     limitations on market risk;
       ``(5) adequacy and maintenance of liquidity and reserves;
       ``(6) management of asset and investment portfolio growth;
       ``(7) investments and acquisitions of assets by a regulated 
     entity, to ensure that they are consistent with the purposes 
     of this title and the authorizing statutes;
       ``(8) overall risk management processes, including adequacy 
     of oversight by senior management and the board of directors 
     and of processes and policies to identify, measure, monitor, 
     and control material risks, including reputational risks, and 
     for adequate, well-tested business resumption plans for all 
     major systems with remote site facilities to protect against 
     disruptive events;
       ``(9) management of credit and counterparty risk, including 
     systems to identify concentrations of credit risk and 
     prudential limits to restrict exposure of the regulated 
     entity to a single counterparty or groups of related 
     counterparties;
       ``(10) maintenance of adequate records, in accordance with 
     consistent accounting policies and practices that enable the 
     Director to evaluate the financial condition of the regulated 
     entity; and
       ``(11) such other operational and management standards as 
     the Director determines to be appropriate.
       ``(b) Failure To Meet Standards.--
       ``(1) Plan requirement.--
       ``(A) In general.--If the Director determines that a 
     regulated entity fails to meet any standard established under 
     subsection (a)--
       ``(i) if such standard is established by regulation, the 
     Director shall require the regulated entity to submit an 
     acceptable plan to the Director within the time allowed under 
     subparagraph (C); and
       ``(ii) if such standard is established by guideline, the 
     Director may require the regulated entity to submit a plan 
     described in clause (i).
       ``(B) Contents.--Any plan required under subparagraph (A) 
     shall specify the actions that the regulated entity will take 
     to correct the deficiency. If the regulated entity is 
     undercapitalized, the plan may be a part of the capital 
     restoration plan for the regulated entity under section 
     1369C.
       ``(C) Deadlines for submission and review.--The Director 
     shall by regulation establish deadlines that--
       ``(i) provide the regulated entities with reasonable time 
     to submit plans required under subparagraph (A), and 
     generally require a regulated entity to submit a plan not 
     later than 30 days after the Director determines that the 
     entity fails to meet any standard established under 
     subsection (a); and
       ``(ii) require the Director to act on plans expeditiously, 
     and generally not later than 30 days after the plan is 
     submitted.
       ``(2) Required order upon failure to submit or implement 
     plan.--If a regulated entity fails to submit an acceptable 
     plan within the time allowed under paragraph (1)(C), or fails 
     in any material respect to implement a plan accepted by the 
     Director, the following shall apply:
       ``(A) Required correction of deficiency.--The Director 
     shall, by order, require the regulated entity to correct the 
     deficiency.
       ``(B) Other authority.--The Director may, by order, take 
     one or more of the following actions until the deficiency is 
     corrected:
       ``(i) Prohibit the regulated entity from permitting its 
     average total assets (as such term is defined in section 
     1316(b)) during any calendar quarter to exceed its average 
     total assets during the preceding calendar quarter, or 
     restrict the rate at which the average total assets of the 
     entity may increase from one calendar quarter to another.
       ``(ii) Require the regulated entity--

       ``(I) in the case of an enterprise, to increase its ratio 
     of core capital to assets.
       ``(II) in the case of a Federal Home Loan Bank, to increase 
     its ratio of total capital (as such term is defined in 
     section 6(a)(5) of the Federal Home Loan Bank Act (12 U.S.C. 
     1426(a)(5)) to assets.

       ``(iii) Require the regulated entity to take any other 
     action that the Director determines will better carry out the 
     purposes of this section than any of the actions described in 
     this subparagraph.
       ``(3) Mandatory restrictions.--In complying with paragraph 
     (2), the Director shall take one or more of the actions 
     described in clauses (i) through (iii) of paragraph (2)(B) 
     if--
       ``(A) the Director determines that the regulated entity 
     fails to meet any standard prescribed under subsection (a);
       ``(B) the regulated entity has not corrected the 
     deficiency; and
       ``(C) during the 18-month period before the date on which 
     the regulated entity first failed to meet the standard, the 
     entity underwent extraordinary growth, as defined by the 
     Director.
       ``(c) Other Enforcement Authority Not Affected.--The 
     authority of the Director under this section is in addition 
     to any other authority of the Director.''.

     SEC. 1109. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND 
                   LIABILITIES.

       (a) In General.--Subtitle B of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4611 et seq.) is amended--
       (1) by striking the subtitle designation and heading and 
     inserting the following:

 ``Subtitle B--Required Capital Levels for Regulated Entities, Special 
      Enforcement Powers, and Reviews of Assets and Liabilities'';

     and
       (2) by adding at the end the following new section:

     ``SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES.

       ``(a) In General.--The Director shall, by regulation, 
     establish criteria governing the portfolio holdings of the 
     enterprises, to ensure that the holdings are backed by 
     sufficient capital and consistent with the mission and the 
     safe and sound operations of the enterprises. In establishing 
     such criteria, the Director shall consider the ability of the 
     enterprises to provide a liquid secondary market through 
     securitization activities, the portfolio holdings in relation 
     to the overall mortgage market, and adherence to the 
     standards specified in section 1313B.
       ``(b) Temporary Adjustments.--The Director may, by order, 
     make temporary adjustments to the established standards for 
     an enterprise or both enterprises, such as during times of 
     economic distress or market disruption.
       ``(c) Authority To Require Disposition or Acquisition.--The 
     Director shall monitor the portfolio of each enterprise. 
     Pursuant to subsection (a) and notwithstanding the capital 
     classifications of the enterprises, the Director may, by 
     order, require an enterprise, under such terms and conditions 
     as the Director determines to be appropriate, to dispose of 
     or acquire any asset, if the Director determines that such 
     action is consistent with the purposes of this Act or any of 
     the authorizing statutes.''.
       (b) Regulations.--Not later than the expiration of the 180-
     day period beginning on the effective date of this Act, the 
     Director shall issue

[[Page 15898]]

     regulations pursuant to section 1369E(a) of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (as added by subsection (a) of this section) 
     establishing the portfolio holdings standards under such 
     section.

     SEC. 1110. RISK-BASED CAPITAL REQUIREMENTS.

       (a) In General.--Section 1361 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4611) is amended to read as follows:

     ``SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED 
                   ENTITIES.

       ``(a) In General.--
       ``(1) Enterprises.--The Director shall, by regulation, 
     establish risk-based capital requirements for the enterprises 
     to ensure that the enterprises operate in a safe and sound 
     manner, maintaining sufficient capital and reserves to 
     support the risks that arise in the operations and management 
     of the enterprises.
       ``(2) Federal home loan banks.--The Director shall 
     establish risk-based capital standards under section 6 of the 
     Federal Home Loan Bank Act for the Federal Home Loan Banks.
       ``(b) No Limitation.--Nothing in this section shall limit 
     the authority of the Director to require other reports or 
     undertakings, or take other action, in furtherance of the 
     responsibilities of the Director under this Act.''.
       (b) Federal Home Loan Banks Risk-Based Capital.--Section 
     6(a)(3) of the Federal Home Loan Bank Act (12 U.S.C. 
     1426(a)(3)) is amended--
       (1) by striking subparagraph (A) and inserting the 
     following:
       ``(A) Risk-based capital standards.--The Director shall, by 
     regulation, establish risk-based capital standards for the 
     Federal Home Loan Banks to ensure that the Federal Home Loan 
     Banks operate in a safe and sound manner, with sufficient 
     permanent capital and reserves to support the risks that 
     arise in the operations and management of the Federal Home 
     Loans Banks.''; and
       (2) in subparagraph (B), by striking ``(A)(ii)'' and 
     inserting ``(A)''.

     SEC. 1111. MINIMUM CAPITAL LEVELS.

       Section 1362 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4612) is 
     amended--
       (1) in subsection (a), by striking ``In General'' and 
     inserting ``Enterprises''; and
       (2) by striking subsection (b) and inserting the following:
       ``(b) Federal Home Loan Banks.--For purposes of this 
     subtitle, the minimum capital level for each Federal Home 
     Loan Bank shall be the minimum capital required to be 
     maintained to comply with the leverage requirement for the 
     bank established under section 6(a)(2) of the Federal Home 
     Loan Bank Act (12 U.S.C. 1426(a)(2)).
       ``(c) Establishment of Revised Minimum Capital Levels.--
     Notwithstanding subsections (a) and (b) and notwithstanding 
     the capital classifications of the regulated entities, the 
     Director may, by regulations issued under section 1319G, 
     establish a minimum capital level for the enterprises, for 
     the Federal Home Loan Banks, or for both the enterprises and 
     the banks, that is higher than the level specified in 
     subsection (a) for the enterprises or the level specified in 
     subsection (b) for the Federal Home Loan Banks, to the extent 
     needed to ensure that the regulated entities operate in a 
     safe and sound manner.
       ``(d) Authority To Require Temporary Increase.--
       ``(1) In general.--Notwithstanding subsections (a) and (b) 
     and any minimum capital level established pursuant to 
     subsection (c), the Director may, by order, increase the 
     minimum capital level for a regulated entity on a temporary 
     basis, when the Director determines that such an increase is 
     necessary and consistent with the prudential regulation and 
     the safe and sound operations of a regulated entity.
       ``(2) Rescission.--The Director shall rescind any temporary 
     minimum capital level established under paragraph (1) when 
     the Director determines that the circumstances or facts no 
     longer justify the temporary minimum capital level.
       ``(3) Regulations required.--The Director shall issue 
     regulations establishing--
       ``(A) standards for the imposition of a temporary increase 
     in minimum capital under paragraph (1);
       ``(B) the standards and procedures that the Director will 
     use to make the determination referred to in paragraph (2); 
     and
       ``(C) a reasonable time frame for periodic review of any 
     temporary increase in minimum capital for the purpose of 
     making the determination referred to in paragraph (2).
       ``(e) Authority To Establish Additional Capital and Reserve 
     Requirements for Particular Purposes.--The Director may, at 
     any time by order or regulation, establish such capital or 
     reserve requirements with respect to any product or activity 
     of a regulated entity, as the Director considers appropriate 
     to ensure that the regulated entity operates in a safe and 
     sound manner, with sufficient capital and reserves to support 
     the risks that arise in the operations and management of the 
     regulated entity.
       ``(f) Periodic Review.--The Director shall periodically 
     review the amount of core capital maintained by the 
     enterprises, the amount of capital retained by the Federal 
     Home Loan Banks, and the minimum capital levels established 
     for such regulated entities pursuant to this section.''.

     SEC. 1112. REGISTRATION UNDER THE SECURITIES LAWS.

       The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
     is amended by adding at the end the following:

     ``SEC. 38. FEDERAL NATIONAL MORTGAGE ASSOCIATION, FEDERAL 
                   HOME LOAN MORTGAGE CORPORATION, FEDERAL HOME 
                   LOAN BANKS.

       ``(a) Federal National Mortgage Association and Federal 
     Home Loan Mortgage Corporation.--No class of equity 
     securities of the Federal National Mortgage Association or 
     the Federal Home Loan Mortgage Corporation shall be treated 
     as an exempted security for purposes of section 12, 13, 14, 
     or 16.
       ``(b) Federal Home Loan Banks.--
       ``(1) Registration.--Each Federal Home Loan Bank shall 
     register a class of its common stock under section 12(g), not 
     later than 120 days after the date of enactment of the 
     Federal Housing Finance Regulatory Reform Act of 2008, and 
     shall thereafter maintain such registration and be treated 
     for purposes of this title as an `issuer', the securities of 
     which are required to be registered under section 12, 
     regardless of the number of members holding such stock at any 
     given time.
       ``(2) Standards relating to audit committees.--Each Federal 
     Home Loan Bank shall comply with the rules issued by the 
     Commission under section 10A(m).
       ``(c) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Federal home loan bank; member.--The terms `Federal 
     Home Loan Bank' and `member', have the same meanings as in 
     section 2 of the Federal Home Loan Bank Act.
       ``(2) Federal national mortgage association.--The term 
     `Federal National Mortgage Association' means the corporation 
     created by the Federal National Mortgage Association Charter 
     Act.
       ``(3) Federal home loan mortgage corporation.--The term 
     `Federal Home Loan Mortgage Corporation' means the 
     corporation created by the Federal Home Loan Mortgage 
     Corporation Act.''.

     SEC. 1113. PROHIBITION AND WITHHOLDING OF EXECUTIVE 
                   COMPENSATION.

       (a) In General.--Section 1318 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4518) is amended--
       (1) in the section heading, by striking ``OF EXCESSIVE'' 
     and inserting ``AND WITHHOLDING OF EXECUTIVE'';
       (2) by redesignating subsection (b) as subsection (d); and
       (3) by inserting after subsection (a) the following:
       ``(b) Factors.--In making any determination under 
     subsection (a), the Director may take into consideration any 
     factors the Director considers relevant, including any 
     wrongdoing on the part of the executive officer, and such 
     wrongdoing shall include any fraudulent act or omission, 
     breach of trust or fiduciary duty, violation of law, rule, 
     regulation, order, or written agreement, and insider abuse 
     with respect to the regulated entity. The approval of an 
     agreement or contract pursuant to section 309(d)(3)(B) of the 
     Federal National Mortgage Association Charter Act (12 U.S.C. 
     1723a(d)(3)(B)) or section 303(h)(2) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1452(h)(2)) shall not 
     preclude the Director from making any subsequent 
     determination under subsection (a).
       ``(c) Withholding of Compensation.--In carrying out 
     subsection (a), the Director may require a regulated entity 
     to withhold any payment, transfer, or disbursement of 
     compensation to an executive officer, or to place such 
     compensation in an escrow account, during the review of the 
     reasonableness and comparability of compensation.''.
       (b) Conforming Amendments.--
       (1) Fannie mae.--Section 309(d) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723a(d)) is 
     amended by adding at the end the following new paragraph:
       ``(4) Notwithstanding any other provision of this section, 
     the corporation shall not transfer, disburse, or pay 
     compensation to any executive officer, or enter into an 
     agreement with such executive officer, without the approval 
     of the Director, for matters being reviewed under section 
     1318 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4518).''.
       (2) Freddie mac.--Section 303(h) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1452(h)) is amended by 
     adding at the end the following new paragraph:
       ``(4) Notwithstanding any other provision of this section, 
     the Corporation shall not transfer, disburse, or pay 
     compensation to any executive officer, or enter into an 
     agreement with such executive officer, without the approval 
     of the Director, for matters being reviewed under section 
     1318 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4518).''.
       (3) Federal home loan banks.--Section 7 of the Federal Home 
     Loan Bank Act (12 U.S.C. 1427) is amended by adding at the 
     end the following new subsection:
       ``(l) Withholding of Compensation.--Notwithstanding any 
     other provision of this section, a Federal Home Loan Bank 
     shall not transfer, disburse, or pay compensation to any 
     executive officer, or enter into an agreement with such 
     executive officer, without the approval of the Director, for 
     matters being reviewed under section 1318 of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4518).''.

     SEC. 1114. LIMIT ON GOLDEN PARACHUTES.

       Section 1318 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of

[[Page 15899]]

     1992 (12 U.S.C. 4518) is amended by adding at the end the 
     following:
       ``(e) Authority To Regulate or Prohibit Certain Forms of 
     Benefits to Affiliated Parties.--
       ``(1) Golden parachutes and indemnification payments.--The 
     Director may prohibit or limit, by regulation or order, any 
     golden parachute payment or indemnification payment.
       ``(2) Factors to be taken into account.--The Director shall 
     prescribe, by regulation, the factors to be considered by the 
     Director in taking any action pursuant to paragraph (1), 
     which may include such factors as--
       ``(A) whether there is a reasonable basis to believe that 
     the affiliated party has committed any fraudulent act or 
     omission, breach of trust or fiduciary duty, or insider abuse 
     with regard to the regulated entity that has had a material 
     effect on the financial condition of the regulated entity;
       ``(B) whether there is a reasonable basis to believe that 
     the affiliated party is substantially responsible for the 
     insolvency of the regulated entity, the appointment of a 
     conservator or receiver for the regulated entity, or the 
     troubled condition of the regulated entity (as defined in 
     regulations prescribed by the Director);
       ``(C) whether there is a reasonable basis to believe that 
     the affiliated party has materially violated any applicable 
     provision of Federal or State law or regulation that has had 
     a material effect on the financial condition of the regulated 
     entity;
       ``(D) whether the affiliated party was in a position of 
     managerial or fiduciary responsibility; and
       ``(E) the length of time that the party was affiliated with 
     the regulated entity, and the degree to which--
       ``(i) the payment reasonably reflects compensation earned 
     over the period of employment; and
       ``(ii) the compensation involved represents a reasonable 
     payment for services rendered.
       ``(3) Certain payments prohibited.--No regulated entity may 
     prepay the salary or any liability or legal expense of any 
     affiliated party if such payment is made--
       ``(A) in contemplation of the insolvency of such regulated 
     entity, or after the commission of an act of insolvency; and
       ``(B) with a view to, or having the result of--
       ``(i) preventing the proper application of the assets of 
     the regulated entity to creditors; or
       ``(ii) preferring one creditor over another.
       ``(4) Golden parachute payment defined.--
       ``(A) In general.--For purposes of this subsection, the 
     term `golden parachute payment' means any payment (or any 
     agreement to make any payment) in the nature of compensation 
     by any regulated entity for the benefit of any affiliated 
     party pursuant to an obligation of such regulated entity 
     that--
       ``(i) is contingent on the termination of such party's 
     affiliation with the regulated entity; and
       ``(ii) is received on or after the date on which--

       ``(I) the regulated entity became insolvent;
       ``(II) any conservator or receiver is appointed for such 
     regulated entity; or
       ``(III) the Director determines that the regulated entity 
     is in a troubled condition (as defined in the regulations of 
     the Director).

       ``(B) Certain payments in contemplation of an event.--Any 
     payment which would be a golden parachute payment but for the 
     fact that such payment was made before the date referred to 
     in subparagraph (A)(ii) shall be treated as a golden 
     parachute payment if the payment was made in contemplation of 
     the occurrence of an event described in any subclause of such 
     subparagraph.
       ``(C) Certain payments not included.--For purposes of this 
     subsection, the term `golden parachute payment' shall not 
     include--
       ``(i) any payment made pursuant to a retirement plan which 
     is qualified (or is intended to be qualified) under section 
     401 of the Internal Revenue Code of 1986, or other 
     nondiscriminatory benefit plan;
       ``(ii) any payment made pursuant to a bona fide deferred 
     compensation plan or arrangement which the Director 
     determines, by regulation or order, to be permissible; or
       ``(iii) any payment made by reason of the death or 
     disability of an affiliated party.
       ``(5) Other definitions.--For purposes of this subsection, 
     the following definitions shall apply:
       ``(A) Indemnification payment.--Subject to paragraph (6), 
     the term `indemnification payment' means any payment (or any 
     agreement to make any payment) by any regulated entity for 
     the benefit of any person who is or was an affiliated party, 
     to pay or reimburse such person for any liability or legal 
     expense with regard to any administrative proceeding or civil 
     action instituted by the Agency which results in a final 
     order under which such person--
       ``(i) is assessed a civil money penalty;
       ``(ii) is removed or prohibited from participating in 
     conduct of the affairs of the regulated entity; or
       ``(iii) is required to take any affirmative action to 
     correct certain conditions resulting from violations or 
     practices, by order of the Director.
       ``(B) Liability or legal expense.--The term `liability or 
     legal expense' means--
       ``(i) any legal or other professional expense incurred in 
     connection with any claim, proceeding, or action;
       ``(ii) the amount of, and any cost incurred in connection 
     with, any settlement of any claim, proceeding, or action; and
       ``(iii) the amount of, and any cost incurred in connection 
     with, any judgment or penalty imposed with respect to any 
     claim, proceeding, or action.
       ``(C) Payment.--The term `payment' includes--
       ``(i) any direct or indirect transfer of any funds or any 
     asset; and
       ``(ii) any segregation of any funds or assets for the 
     purpose of making, or pursuant to an agreement to make, any 
     payment after the date on which such funds or assets are 
     segregated, without regard to whether the obligation to make 
     such payment is contingent on--

       ``(I) the determination, after such date, of the liability 
     for the payment of such amount; or
       ``(II) the liquidation, after such date, of the amount of 
     such payment.

       ``(6) Certain commercial insurance coverage not treated as 
     covered benefit payment.--No provision of this subsection 
     shall be construed as prohibiting any regulated entity from 
     purchasing any commercial insurance policy or fidelity bond, 
     except that, subject to any requirement described in 
     paragraph (5)(A)(iii), such insurance policy or bond shall 
     not cover any legal or liability expense of the regulated 
     entity which is described in paragraph (5)(A).''.

     SEC. 1115. REPORTING OF FRAUDULENT LOANS.

       Part 1 of subtitle C of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et 
     seq.), as amended by this Act, is amended by adding at the 
     end the following:

     ``SEC. 1379E. REPORTING OF FRAUDULENT LOANS.

       ``(a) Requirement to Report.--The Director shall require a 
     regulated entity to submit to the Director a timely report 
     upon discovery by the regulated entity that it has purchased 
     or sold a fraudulent loan or financial instrument, or 
     suspects a possible fraud relating to the purchase or sale of 
     any loan or financial instrument. The Director shall require 
     each regulated entity to establish and maintain procedures 
     designed to discover any such transactions.
       ``(b) Protection From Liability for Reports.--Any regulated 
     entity that, in good faith, makes a report pursuant to 
     subsection (a), and any entity-affiliated party, that, in 
     good faith, makes or requires another to make any such 
     report, shall not be liable to any person under any provision 
     of law or regulation, any constitution, law, or regulation of 
     any State or political subdivision of any State, or under any 
     contract or other legally enforceable agreement (including 
     any arbitration agreement) for such report or for any failure 
     to provide notice of such report to the person who is the 
     subject of such report or any other persons identified in the 
     report.''.

             Subtitle B--Improvement of Mission Supervision

     SEC. 1121. TRANSFER OF PROGRAM APPROVAL AND HOUSING GOAL 
                   OVERSIGHT.

       Part 2 of subtitle A of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et 
     seq.) is amended--
       (1) by striking the heading for the part and inserting the 
     following:

          ``PART 2--ADDITIONAL AUTHORITIES OF THE DIRECTOR'';

       and
       (2) by striking sections 1321 and 1322.

     SEC. 1122. ASSUMPTION BY THE DIRECTOR OF CERTAIN OTHER HUD 
                   RESPONSIBILITIES.

       (a) In General.--Part 2 of subtitle A of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4541 et seq.) is amended--
       (1) by striking ``Secretary'' each place that term appears 
     and inserting ``Director'' in each of sections 1323, 1326, 
     1327, 1328, and 1336; and
       (2) by striking sections 1338 and 1349 (12 U.S.C. 4562 note 
     and 4589).
       (b) Retention of Fair Housing Responsibilities.--Section 
     1325 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4545) is amended in the 
     matter preceding paragraph (1), by inserting ``of Housing and 
     Urban Development'' after ``The Secretary''.

     SEC. 1123. REVIEW OF ENTERPRISE PRODUCTS.

       Part 2 of subtitle A of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et 
     seq.) is amended by inserting before section 1323 the 
     following:

     ``SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS.

       ``(a) In General.--The Director shall require each 
     enterprise to obtain the approval of the Director for any 
     product of the enterprise before initially offering the 
     product.
       ``(b) Standard for Approval.--In considering any request 
     for approval of a product pursuant to subsection (a), the 
     Director shall make a determination that--
       ``(1) in the case of a product of the Federal National 
     Mortgage Association, the product is authorized under 
     paragraph (2), (3), (4), or (5) of section 302(b) or section 
     304 of the Federal National Mortgage Association Charter Act 
     (12 U.S.C. 1717(b), 1719);
       ``(2) in the case of a product of the Federal Home Loan 
     Mortgage Corporation, the product is authorized under 
     paragraph (1), (4), or (5) of section 305(a) of the Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a));
       ``(3) the product is in the public interest; and
       ``(4) the product is consistent with the safety and 
     soundness of the enterprise or the mortgage finance system.
       ``(c) Procedure for Approval.--
       ``(1) Submission of request.--An enterprise shall submit to 
     the Director a written request for approval of a product that 
     describes the product in such form as prescribed by order or 
     regulation of the Director.

[[Page 15900]]

       ``(2) Request for public comment.--Immediately upon receipt 
     of a request for approval of a product, as required under 
     paragraph (1), the Director shall publish notice of such 
     request and of the period for public comment pursuant to 
     paragraph (3) regarding the product, and a description of the 
     product proposed by the request. The Director shall give 
     interested parties the opportunity to respond in writing to 
     the proposed product.
       ``(3) Public comment period.--During the 30-day period 
     beginning on the date of publication pursuant to paragraph 
     (2) of a request for approval of a product, the Director 
     shall receive public comments regarding the proposed product.
       ``(4) Offering of product.--
       ``(A) In general.--Not later than 30 days after the close 
     of the public comment period described in paragraph (3), the 
     Director shall approve or deny the product, specifying the 
     grounds for such decision in writing.
       ``(B) Failure to act.--If the Director fails to act within 
     the 30-day period described in subparagraph (A), then the 
     enterprise may offer the product.
       ``(C) Temporary approval.--The Director may, subject to the 
     rules of the Director, provide for temporary approval of the 
     offering of a product without a public comment period, if the 
     Director finds that the existence of exigent circumstances 
     makes such delay contrary to the public interest.
       ``(d) Conditional Approval.--If the Director approves the 
     offering of any product by an enterprise, the Director may 
     establish terms, conditions, or limitations with respect to 
     such product with which the enterprise must comply in order 
     to offer such product.
       ``(e) Exclusions.--
       ``(1) In general.--The requirements of subsections (a) 
     through (d) do not apply with respect to--
       ``(A) the automated loan underwriting system of an 
     enterprise in existence as of the date of enactment of the 
     Federal Housing Finance Regulatory Reform Act of 2008, 
     including any upgrade to the technology, operating system, or 
     software to operate the underwriting system;
       ``(B) any modification to the mortgage terms and conditions 
     or mortgage underwriting criteria relating to the mortgages 
     that are purchased or guaranteed by an enterprise, provided 
     that such modifications do not alter the underlying 
     transaction so as to include services or financing, other 
     than residential mortgage financing; or
       ``(C) any other activity that is substantially similar, as 
     determined by rule of the Director to--
       ``(i) the activities described in subparagraphs (A) and 
     (B); and
       ``(ii) other activities that have been approved by the 
     Director in accordance with this section.
       ``(2) Expedited review.--
       ``(A) Enterprise notice.--For any new activity that an 
     enterprise considers not to be a product, the enterprise 
     shall provide written notice to the Director of such 
     activity, and may not commence such activity until the date 
     of receipt of a notice under subparagraph (B) or the 
     expiration of the period described in subparagraph (C). The 
     Director shall establish, by regulation, the form and content 
     of such written notice.
       ``(B) Director determination.--Not later than 15 days after 
     the date of receipt of a notice under subparagraph (A), the 
     Director shall determine whether such activity is a product 
     subject to approval under this section. The Director shall, 
     immediately upon so determining, notify the enterprise.
       ``(C) Failure to act.--If the Director fails to determine 
     whether such activity is a product within the 15-day period 
     described in subparagraph (B), the enterprise may commence 
     the new activity in accordance with subparagraph (A).
       ``(f) No Limitation.--Nothing in this section may be 
     construed to restrict--
       ``(1) the safety and soundness authority of the Director 
     over all new and existing products or activities; or
       ``(2) the authority of the Director to review all new and 
     existing products or activities to determine that such 
     products or activities are consistent with the statutory 
     mission of an enterprise.''.

     SEC. 1124. CONFORMING LOAN LIMITS.

       (a) Fannie Mae.--
       (1) General limit.--Section 302(b)(2) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 
     1717(b)(2)) is amended by striking the 7th and 8th sentences 
     and inserting the following new sentences: ``Such limitations 
     shall not exceed $417,000 for a mortgage secured by a single-
     family residence, $533,850 for a mortgage secured by a 2-
     family residence, $645,300 for a mortgage secured by a 3-
     family residence, and $801,950 for a mortgage secured by a 4-
     family residence, except that such maximum limitations shall 
     be adjusted effective January 1 of each year beginning after 
     the effective date of Federal Housing Finance Regulatory 
     Reform Act of 2008, subject to the limitations in this 
     paragraph. Each adjustment shall be made by adding to each 
     such amount (as it may have been previously adjusted) a 
     percentage thereof equal to the percentage increase, during 
     the most recent 12-month or 4th-quarter period ending before 
     the time of determining such annual adjustment, in the 
     housing price index maintained by the Director of the Federal 
     Housing Finance Agency (pursuant to section 1322 of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4541)). If the change in such house 
     price index during the most recent 12-month or 4th-quarter 
     period ending before the time of determining such annual 
     adjustment is a decrease, then no adjustment shall be made 
     for the next year, and the next adjustment shall take into 
     account prior declines in the house price index, so that any 
     adjustment shall reflect the net change in the house price 
     index since the last adjustment. Declines in the house price 
     index shall be accumulated and then reduce increases until 
     subsequent increases exceed prior declines.''.
       (2) High-cost area limit.--Section 302(b)(2) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 
     1717(b)(2)) is amended by adding after the period at the end 
     the following: ``Such foregoing limitations shall also be 
     increased with respect to properties of a particular size 
     located in any area for which the median price for such size 
     residence exceeds the foregoing limitation for such size 
     residence, to the lesser of 150 percent of such foregoing 
     limitation for such size residence or the amount that is 
     equal to the median price in such area for such size 
     residence.''.
       (3) Effective date.--The amendments made by paragraphs (1) 
     and (2) of this subsection shall take effect upon the 
     expiration of the date described in section 201(a) of the 
     Economic Stimulus Act of 2008 (Public Law 110-185).
       (b) Freddie Mac.--
       (1) General limit.--Section 305(a)(2) of the Federal Home 
     Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is 
     amended by striking the 6th and 7th sentences and inserting 
     the following new sentences: ``Such limitations shall not 
     exceed $417,000 for a mortgage secured by a single-family 
     residence, $533,850 for a mortgage secured by a 2-family 
     residence, $645,300 for a mortgage secured by a 3-family 
     residence, and $801,950 for a mortgage secured by a 4-family 
     residence, except that such maximum limitations shall be 
     adjusted effective January 1 of each year beginning after the 
     effective date of the Federal Housing Finance Regulatory 
     Reform Act of 2008, subject to the limitations in this 
     paragraph. Each adjustment shall be made by adding to each 
     such amount (as it may have been previously adjusted) a 
     percentage thereof equal to the percentage increase, during 
     the most recent 12-month or fourth-quarter period ending 
     before the time of determining such annual adjustment, in the 
     housing price index maintained by the Director of the Federal 
     Housing Finance Agency (pursuant to section 1322 of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4541)). If the change in such house 
     price index during the most recent 12-month or 4th-quarter 
     period ending before the time of determining such annual 
     adjustment is a decrease, then no adjustment shall be made 
     for the next year, and the next adjustment shall take into 
     account prior declines in the house price index, so that any 
     adjustment shall reflect the net change in the house price 
     index since the last adjustment. Declines in the house price 
     index shall be accumulated and then reduce increases until 
     subsequent increases exceed prior declines.''.
       (2) High-cost area limit.--Section 305(a)(2) of the Federal 
     Home Loan Mortgage Corporation Act is amended by adding after 
     the period at the end the following: ``Such foregoing 
     limitations shall also be increased with respect to 
     properties of a particular size located in any area for which 
     the median price for such size residence exceeds the 
     foregoing limitation for such size residence, to the lesser 
     of 150 percent of such foregoing limitation for such size 
     residence or the amount that is equal to the median price in 
     such area for such size residence.''.
       (3) Effective date.--The amendments made by paragraphs (1) 
     and (2) of this subsection shall take effect upon the 
     expiration of the date described in section 201(a) of the 
     Economic Stimulus Act of 2008 (Public Law 110-185).
       (c) Sense of Congress.--It is the sense of the Congress 
     that the securitization of mortgages by the Federal National 
     Mortgage Association and the Federal Home Loan Mortgage 
     Corporation plays an important role in providing liquidity to 
     the United States housing markets. Therefore, the Congress 
     encourages the Federal National Mortgage Association and the 
     Federal Home Loan Mortgage Corporation to securitize 
     mortgages acquired under the increased conforming loan limits 
     established under this Act.
       (d) Housing Price Index.--Part 2 of subtitle A of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4541 et seq.) is amended by inserting 
     after section 1321 (as added by section 1123 of this Act) the 
     following new section:

     ``SEC. 1322. HOUSING PRICE INDEX.

       ``The Director shall establish and maintain a method of 
     assessing the national average 1-family house price for use 
     for adjusting the conforming loan limitations of the 
     enterprises. In establishing such method, the Director shall 
     take into consideration the monthly survey of all major 
     lenders conducted by the Federal Housing Finance Agency to 
     determine the national average 1-family house price, the 
     House Price Index maintained by the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development before the effective date of the Federal Housing 
     Finance Regulatory Reform Act of 2008, any appropriate house 
     price indexes of the Bureau of the Census of the Department 
     of Commerce, and any other indexes or measures that the 
     Director considers appropriate.''.

     SEC. 1125. ANNUAL HOUSING REPORT.

       (a) Repeal.--Section 1324 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4544) is hereby repealed.

[[Page 15901]]

       (b) Annual Housing Report.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 is amended by 
     inserting after section 1323 the following:

     ``SEC. 1324. ANNUAL HOUSING REPORT.

       ``(a) In General.--After reviewing and analyzing the 
     reports submitted under section 309(n) of the Federal 
     National Mortgage Association Charter Act and section 307(f) 
     of the Federal Home Loan Mortgage Corporation Act, the 
     Director shall submit a report, not later than October 30 of 
     each year, to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives, on the activities of each 
     enterprise.
       ``(b) Contents.--The report required under subsection (a) 
     shall--
       ``(1) discuss--
       ``(A) the extent to and manner in which--
       ``(i) each enterprise is achieving the annual housing goals 
     established under subpart B;
       ``(ii) each enterprise is complying with its duty to serve 
     underserved markets, as established under section 1335;
       ``(iii) each enterprise is complying with section 1337;
       ``(iv) each enterprise received credit towards achieving 
     each of its goals resulting from a transaction or activity 
     pursuant to section 1331(b)(2); and
       ``(v) each enterprise is achieving the purposes of the 
     enterprise established by law; and
       ``(B) the actions that each enterprise could undertake to 
     promote and expand the purposes of the enterprise;
       ``(2) aggregate and analyze relevant data on income to 
     assess the compliance of each enterprise with the housing 
     goals established under subpart B;
       ``(3) aggregate and analyze data on income, race, and 
     gender by census tract and other relevant classifications, 
     and compare such data with larger demographic, housing, and 
     economic trends;
       ``(4) identify the extent to which each enterprise is 
     involved in mortgage purchases and secondary market 
     activities involving subprime and nontraditional loans;
       ``(5) compare the characteristics of subprime and 
     nontraditional loans both purchased and securitized by each 
     enterprise to other loans purchased and securitized by each 
     enterprise; and
       ``(6) compare the characteristics of high-cost loans 
     purchased and securitized, where such securities are not held 
     on portfolio to loans purchased and securitized, where such 
     securities are either retained on portfolio or repurchased by 
     the enterprise, including such characteristics as--
       ``(A) the purchase price of the property that secures the 
     mortgage;
       ``(B) the loan-to-value ratio of the mortgage, which shall 
     reflect any secondary liens on the relevant property;
       ``(C) the terms of the mortgage;
       ``(D) the creditworthiness of the borrower; and
       ``(E) any other relevant data, as determined by the 
     Director.
       ``(c) Data Collection and Reporting.--
       ``(1) In general.--To assist the Director in analyzing the 
     matters described in subsection (b), the Director shall 
     conduct, on a monthly basis, a survey of mortgage markets in 
     accordance with this subsection.
       ``(2) Data points.--Each monthly survey conducted by the 
     Director under paragraph (1) shall collect data on--
       ``(A) the characteristics of individual mortgages that are 
     eligible for purchase by the enterprises and the 
     characteristics of individual mortgages that are not eligible 
     for purchase by the enterprises including, in both cases, 
     information concerning--
       ``(i) the price of the house that secures the mortgage;
       ``(ii) the loan-to-value ratio of the mortgage, which shall 
     reflect any secondary liens on the relevant property;
       ``(iii) the terms of the mortgage;
       ``(iv) the creditworthiness of the borrower or borrowers; 
     and
       ``(v) whether the mortgage, in the case of a conforming 
     mortgage, was purchased by an enterprise;
       ``(B) the characteristics of individual subprime and 
     nontraditional mortgages that are eligible for purchase by 
     the enterprises and the characteristics of borrowers under 
     such mortgages, including the creditworthiness of such 
     borrowers and determination whether such borrowers would 
     qualify for prime lending; and
       ``(C) such other matters as the Director determines to be 
     appropriate.
       ``(3) Public availability.--The Director shall make any 
     data collected by the Director in connection with the conduct 
     of a monthly survey available to the public in a timely 
     manner, provided that the Director may modify the data 
     released to the public to ensure that the data--
       ``(A) is not released in an identifiable form; and
       ``(B) is not otherwise obtainable from other publicly 
     available data sets.
       ``(4) Definition.--For purposes of this subsection, the 
     term `identifiable form' means any representation of 
     information that permits the identity of a borrower to which 
     the information relates to be reasonably inferred by either 
     direct or indirect means.''.

     SEC. 1126. PUBLIC USE DATABASE.

       Section 1323 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (42 U.S.C. 4543) is 
     amended--
       (1) in subsection (a)--
       (A) by striking ``(a) In General.--The Secretary'' and 
     inserting the following:
       ``(a) Availability.--
       ``(1) In general.--The Director''; and
       (B) by adding at the end the following new paragraph:
       ``(2) Census tract level reporting.--Such data shall 
     include the data elements required to be reported under the 
     Home Mortgage Disclosure Act of 1975, at the census tract 
     level.'';
       (2) in subsection (b)(2), by inserting before the period at 
     the end the following: ``or with subsection (a)(2)''; and
       (3) by adding at the end the following new subsection:
       ``(d) Timing.--Data submitted under this section by an 
     enterprise in connection with a provision referred to in 
     subsection (a) shall be made publicly available in accordance 
     with this section not later than September 30 of the year 
     following the year to which the data relates.''.

     SEC. 1127. REPORTING OF MORTGAGE DATA.

       Section 1326 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4546) is 
     amended--
       (1) in subsection (a), by striking ``The Director'' and 
     inserting ``Subject to subsection (d), the Director''; and
       (2) by adding at the end the following:
       ``(d) Mortgage Information.--Subject to privacy 
     considerations, as described in section 304(j) of the Home 
     Mortgage Disclosure Act of 1975 (12 U.S.C. 2803(j)), the 
     Director shall, by regulation or order, provide that certain 
     information relating to single family mortgage data of the 
     enterprises shall be disclosed to the public, in order to 
     make available to the public--
       ``(1) the same data from the enterprises that is required 
     of insured depository institutions under the Home Mortgage 
     Disclosure Act of 1975; and
       ``(2) information collected by the Director under section 
     1324(b)(6).''.

     SEC. 1128. REVISION OF HOUSING GOALS.

       (a) Repeal.--Sections 1331 through 1334 of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4561 through 4564) are hereby repealed.
       (b) Housing Goal.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 is amended by 
     inserting before section 1335 the following:

     ``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

       ``(a) In General.--The Director shall, by regulation, 
     establish effective for the first calendar year that begins 
     after the date of enactment of the Federal Housing Finance 
     Regulatory Reform Act of 2008, and each year thereafter, 
     annual housing goals, as described under this subpart, with 
     respect to the mortgage purchases by the enterprises.
       ``(b) Special Counting Requirements.--
       ``(1) In general.--The Director shall determine whether an 
     enterprise shall receive full, partial, or no credit for a 
     transaction toward achievement of any of the housing goals 
     established pursuant to this section or sections 1332 through 
     1334.
       ``(2) Considerations.--In making any determination under 
     paragraph (1), the Director shall consider whether a 
     transaction or activity of an enterprise is substantially 
     equivalent to a mortgage purchase and either (A) creates a 
     new market, or (B) adds liquidity to an existing market, 
     provided however that the terms and conditions of such 
     mortgage purchase is neither determined to be unacceptable, 
     nor contrary to good lending practices, and otherwise 
     promotes sustainable homeownership and further, that such 
     mortgage purchase actually fulfills the purposes of the 
     enterprise and is in accordance with the chartering Act of 
     such enterprise.
       ``(c) Eliminating Interest Rate Disparities.--
       ``(1) In general.--In establishing and implementing the 
     housing goals under this subpart, the Director shall require 
     the enterprises to disclose appropriate information to allow 
     the Director to assess if there are any disparities in 
     interest rates charged on mortgages to borrowers who are 
     minorities, as compared with borrowers of similar 
     creditworthiness who are not minorities, as evidenced in 
     reports pursuant to the Home Mortgage Disclosure Act of 1975.
       ``(2) Report to congress on disparities.--Upon a finding by 
     the Director that a pattern of disparities in interest rates 
     exists pursuant to the information provided by an enterprise 
     under paragraph (1), the Director shall--
       ``(A) forward to the Committee on Banking, Housing, and 
     Urban Affairs of the Senate and the Committee on Financial 
     Services of the House of Representatives a report detailing 
     the disparities; and
       ``(B) forward the report prepared under subparagraph (A) to 
     any other appropriate regulatory or enforcement agency.
       ``(3) Identity of individuals not disclosed.--In carrying 
     out this subsection, the Director shall ensure that no 
     personally identifiable financial information that would 
     enable an individual borrower to be reasonably identified 
     shall be made public.
       ``(d) Timing.--The Director shall establish an annual 
     deadline for the establishment of housing goals described in 
     subsection (a), taking into consideration the need for the 
     enterprises to reasonably and sufficiently plan their 
     operations and activities in advance, including operations 
     and activities necessary to meet such goals.

     ``SEC. 1331A. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.

       ``(a) Authority.--
       ``(1) Review.--The Director shall review the 
     appropriateness of each goal established pursuant to this 
     subpart at least once during each year to assure that given 
     current market conditions that each such goal is feasible.

[[Page 15902]]

       ``(2) Petition to reduce.--An enterprise may petition the 
     Director in writing at any time during a year to reduce the 
     level of any goal for such year established pursuant to this 
     subpart.
       ``(b) Standard for Reduction.--The Director may reduce the 
     level for a goal pursuant to such a petition only if--
       ``(1) market and economic conditions or the financial 
     condition of the enterprise require such action; or
       ``(2) efforts to meet the goal would result in the 
     constraint of liquidity, over-investment in certain market 
     segments, or other consequences contrary to the intent of 
     this subpart, section 301(3) of the Federal National Mortgage 
     Association Charter Act (12 U.S.C. 1716(3)), or section 
     301(b)(3) of the Federal Home Loan Mortgage Corporation Act 
     (12 U.S.C. 1451 note), as applicable.
       ``(c) Determination.--
       ``(1) 30-day period.--If an enterprise submits a petition 
     for reduction to the Director under subsection (a)(2), the 
     Director shall make a determination regarding any proposed 
     reduction within 30 days of receipt of the petition.
       ``(2) Extension.--The Director may extend the period 
     described in paragraph (1) for a single additional 15-day 
     period, but only if the Director requests additional 
     information from the enterprise.

     ``SEC. 1332. SINGLE-FAMILY HOUSING GOALS.

       ``(a) Establishment of Goals.--
       ``(1) In general.--The Director shall establish annual 
     goals for the purchase by each enterprise of conventional, 
     conforming, single-family, owner-occupied, purchase money 
     mortgages financing housing for each of the following:
       ``(A) Low-income families.
       ``(B) Families that reside in low-income areas.
       ``(C) Very low-income families.
       ``(2) Goals as percentage of total purchase money mortgage 
     purchases.--The goals established under paragraph (1) shall 
     be established as a percentage of the total number of single-
     family dwelling units financed by single-family purchase 
     money mortgage purchases of the enterprise.
       ``(b) Determination of Compliance.--
       ``(1) In general.--The Director shall determine, for each 
     year that the housing goals under this section are in effect 
     pursuant to section 1331(a), whether each enterprise has 
     complied with the single-family housing goals established 
     under this section for such year.
       ``(2) Compliance requirements.--An enterprise shall be 
     considered to be in compliance with a goal described under 
     subsection (a) for a year, only if, for each of the types of 
     families described in subsection (a), the percentage of the 
     number of conventional, conforming, single-family, owner-
     occupied, purchase money mortgages purchased by the 
     enterprise in such year that serve such families, meets or 
     exceeds the target established under subsection (c) for the 
     year for such type of family.
       ``(c) Annual Targets.--
       ``(1) In general.--The Director shall establish annual 
     targets for each goal described in subsection (a).
       ``(2) Considerations.--In establishing annual targets under 
     paragraph (1), the Director shall consider--
       ``(A) national housing needs;
       ``(B) economic, housing, and demographic conditions;
       ``(C) the performance and effort of the enterprises toward 
     achieving the housing goals under this section in previous 
     years;
       ``(D) the ability of the enterprise to lead the industry in 
     making mortgage credit available;
       ``(E) recent information submitted in compliance with the 
     Home Mortgage Disclosure Act of 1975 and such other reliable 
     mortgage data as may be available;
       ``(F) the size of the purchase money conventional mortgage 
     market serving each of the types of families described in 
     subsection (a), relative to the size of the overall purchase 
     money mortgage market; and
       ``(G) the need to maintain the sound financial condition of 
     the enterprises.
       ``(3) High-cost loans and inappropriate lending 
     practices.--In establishing annual targets under paragraph 
     (1), the Director shall not consider segments of the market 
     determined to be unacceptable or contrary to good lending 
     practices pursuant to section 1331(b)(2).
       ``(d) Notice of Determination and Enterprise Comment.--
       ``(1) Notice.--Within 30 days of making a determination 
     under subsection (b) regarding compliance of an enterprise 
     for a year with the housing goals established under this 
     section and before any public disclosure thereof, the 
     Director shall provide notice of the determination to the 
     enterprise, which shall include an analysis and comparison, 
     by the Director, of the performance of the enterprise for the 
     year and the targets for the year under subsection (c).
       ``(2) Comment period.--The Director shall provide each 
     enterprise and the public an opportunity to comment on the 
     determination during the 30-day period beginning upon receipt 
     by the enterprise of the notice.
       ``(e) Use of Borrower Income.--In monitoring the 
     performance of each enterprise pursuant to the housing goals 
     under this section and evaluating such performance (for 
     purposes of section 1336), the Director shall consider a 
     mortgagor's income to be the income of the mortgagor at the 
     time of origination of the mortgage.
       ``(f) Consideration of Properties With Rental Units.--
     Mortgages financing 1-to-4 unit owner-occupied properties 
     shall count toward the achievement of the single-family 
     housing goal under this section, if such properties otherwise 
     meet the requirements under this section notwithstanding the 
     use of 1 or more units for rental purposes.

     ``SEC. 1333. SINGLE-FAMILY HOUSING REFINANCE GOALS.

       ``(a) Prepayment of Existing Loans.--
       ``(1) In general.--The Director shall establish annual 
     goals for the purchase by each enterprise of mortgages on 
     conventional, conforming, single-family, owner-occupied 
     housing given to pay off or prepay an existing loan served by 
     the same property for each of the following:
       ``(A) Low-income families.
       ``(B) Families that reside in low-income areas.
       ``(C) Very low-income families.
       ``(2) Goals as percentage of total refinancing mortgage 
     purchases.--The goals described under paragraph (1) shall be 
     established as a percentage of the total number of single-
     family dwelling units refinanced by mortgage purchases of 
     each enterprise.
       ``(b) Determination of Compliance.--
       ``(1) In general.--The Director shall determine, for each 
     year that the housing goals under this section are in effect 
     pursuant to section 1331(a), whether each enterprise has 
     complied with the single-family housing refinance goals 
     established under this section for such year.
       ``(2) Compliance.--An enterprise shall be considered to be 
     in compliance with the goals of this section for a year, only 
     if, for each of the types of families described in subsection 
     (a), the percentage of the number of conventional, 
     conforming, single-family, owner-occupied refinancing 
     mortgages purchased by each enterprise in such year that 
     serve such families, meets or exceeds the target for the year 
     for such type of family that is established under subsection 
     (c).
       ``(c) Annual Targets.--
       ``(1) In general.--The Director shall establish annual 
     targets for each goal described in subsection (a).
       ``(2) Considerations.--In establishing annual targets under 
     paragraph (1), the Director shall consider--
       ``(A) national housing needs;
       ``(B) economic, housing, and demographic conditions;
       ``(C) the performance and effort of the enterprises toward 
     achieving the housing goals under this section in previous 
     years;
       ``(D) the ability of the enterprise to lead the industry in 
     making mortgage credit available;
       ``(E) recent information submitted in compliance with the 
     Home Mortgage Disclosure Act of 1975 and such other reliable 
     mortgage data as may be available;
       ``(F) the size of the purchase money conventional mortgage 
     market serving each of the types of families described in 
     subsection (a), relative to the size of the overall purchase 
     money mortgage market; and
       ``(G) the need to maintain the sound financial condition of 
     the enterprises.
       ``(d) Notice of Determination and Enterprise Comment.--
       ``(1) Notice.--Within 30 days of making a determination 
     under subsection (b) regarding compliance of an enterprise 
     for a year with the housing goals established under this 
     section and before any public disclosure thereof, the 
     Director shall provide notice of the determination to the 
     enterprise, which shall include an analysis and comparison, 
     by the Director, of the performance of the enterprise for the 
     year and the targets for the year under subsection (c).
       ``(2) Comment period.--The Director shall provide each 
     enterprise and the public an opportunity to comment on the 
     determination during the 30-day period beginning upon receipt 
     by the enterprise of the notice.
       ``(e) Use of Borrower Income.--In monitoring the 
     performance of each enterprise pursuant to the housing goals 
     under this section and evaluating such performance (for 
     purposes of section 1336), the Director shall consider a 
     mortgagor's income to be the income of the mortgagor at the 
     time of origination of the mortgage.

     ``SEC. 1334. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.

       ``(a) Establishment.--
       ``(1) In general.--The Director shall establish, by 
     regulation, by unit, dollar volume, or percentage of 
     multifamily activity, as determined by the Director, an 
     annual goal for the purchase by each enterprise of--
       ``(A) mortgages that finance dwelling units affordable to 
     very low-income families; and
       ``(B) mortgages that finance dwelling units assisted by the 
     low-income housing tax credit under section 42 of the 
     Internal Revenue Code of 1986.
       ``(2) Additional requirements for smaller projects.--The 
     Director shall establish, within the housing goal established 
     under this section, additional requirements for the purchase 
     by each enterprise of mortgages described in paragraph (1) 
     for multifamily housing projects of a smaller or limited 
     size, which may be based on the number of dwelling units in 
     the project or the amount of the mortgage, or both, and shall 
     include multifamily housing projects of 5 to 50 units (as 
     adjusted by the Director), or with mortgages of up to 
     $5,000,000 (as adjusted by the Director).
       ``(3) Factors.--The Director shall establish the goal and 
     additional requirements under this section taking into 
     consideration--
       ``(A) national multifamily mortgage credit needs;
       ``(B) the performance and effort of the enterprise in 
     making mortgage credit available for multifamily housing in 
     previous years;
       ``(C) the size of the multifamily mortgage market, 
     including the size of the small multifamily mortgage market;

[[Page 15903]]

       ``(D) the most recent information available for the 
     Residential Survey published by the Census Bureau, and such 
     other reliable data as may be available regarding multifamily 
     mortgages;
       ``(E) the ability of the enterprise to lead the industry in 
     expanding mortgage credit availability at favorable terms, 
     especially for underserved markets, such as for--
       ``(i) small multifamily projects;
       ``(ii) multifamily properties in need of preservation and 
     rehabilitation; and
       ``(iii) multifamily properties located in rural areas; and
       ``(F) the need to maintain the sound financial condition of 
     the enterprise.
       ``(b) Units Financed by Housing Finance Agency Bonds.--The 
     Director may give credit toward the achievement of the 
     multifamily special affordable housing goal under this 
     section (for purposes of section 1336) to dwelling units in 
     multifamily housing projects that otherwise qualify under 
     such goal and that are financed by tax-exempt or taxable 
     bonds issued by a State or local housing finance agency, but 
     only if such bonds--
       ``(1) are secured by a guarantee of the enterprise; or
       ``(2) are not investment grade and are purchased by the 
     enterprise.
       ``(c) Use of Tenant Rent Level.--
       ``(1) In general.--The Director shall monitor the 
     performance of each enterprise in meeting the goal 
     established under this section and shall evaluate such 
     performance (for purposes of section 1336) based on whether 
     the rent levels are affordable to low-income and very low-
     income families.
       ``(2) Rent level.--A rent level shall be considered to be 
     affordable for purposes of this subsection for an income 
     category referred to in this subsection if it does not exceed 
     30 percent of the maximum income level of such income 
     category, with appropriate adjustments for unit size as 
     measured by the number of bedrooms.
       ``(d) Determination of Compliance.--
       ``(1) In general.--The Director shall, for each year that 
     the housing goal under this section is in effect pursuant to 
     section 1331(a), determine whether each enterprise has 
     complied with such goal and the additional requirements under 
     subsection (a)(2).
       ``(2) Compliance.--An enterprise shall be considered to be 
     in compliance with the goal described under subsection (a) 
     for a year only if the multifamily mortgage purchases of the 
     enterprise meet or exceed the goal for the year established 
     under subsection (a).
       ``(e) Consideration of Units in Single-Family Rental 
     Housing.--In establishing the goal under this section, the 
     Director may take into consideration the number of housing 
     units financed by any mortgage purchased by an enterprise on 
     single-family rental housing that is not owner-occupied.
       ``(f) Removing Credit.--The Director shall subtract from 
     the units or mortgages counted toward the goal established 
     under this section in a current year any units or mortgages 
     credited toward such goal in a prior year if an enterprise 
     requires a lender to repurchase, or reimburse for losses, or 
     indemnify the enterprise against potential losses on such 
     units or mortgages.
       ``(g) Notice of Determination and Enterprise Comment.--
       ``(1) Notice.--Within 30 days of making a determination 
     under subsection (d) regarding compliance of an enterprise 
     for a year with the housing goal established under this 
     section and before any public disclosure thereof, the 
     Director shall provide notice of the determination to the 
     enterprise, which shall include an analysis and comparison, 
     by the Director, of the performance of the enterprise for the 
     year and the goal for the year under subsection (a).
       ``(2) Comment period.--The Director shall provide each 
     enterprise and the public an opportunity to comment on the 
     determination during the 30-day period beginning upon receipt 
     by the enterprise of the notice.''.
       (c) Conforming Amendments.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 is amended--
       (1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter 
     preceding paragraph (1), by striking ``low- and moderate-
     income housing goal'' and all that follows through ``section 
     1334'' and inserting ``housing goals established under this 
     subpart''; and
       (2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by 
     striking ``sections 1332, 1333, and 1334,'' and inserting 
     ``this subpart''.
       (d) Definitions.--Section 1303 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4502) is amended--
       (1) by striking paragraph (24), as so designated by section 
     1002 of this Act, and inserting the following:
       ``(24) Very low-income.--
       ``(A) In general.--The term `very low-income' means--
       ``(i) in the case of owner-occupied units, families having 
     incomes not greater than 50 percent of the area median 
     income; and
       ``(ii) in the case of rental units, families having incomes 
     not greater than 50 percent of the area median income, with 
     adjustments for smaller and larger families, as determined by 
     the Director.
       ``(B) Rule of construction.--For purposes of section 1338 
     and 1339, the term `very low-income' means--
       ``(i) in the case of owner-occupied units, income in excess 
     of 30 percent but not greater than 50 percent of the area 
     median income; and
       ``(ii) in the case of rental units, income in excess of 30 
     percent but not greater than 50 percent of the area median 
     income, with adjustments for smaller and larger families, as 
     determined by the Director.''; and
       (2) by adding at the end the following:
       ``(26) Conforming mortgage.--The term `conforming mortgage' 
     means, with respect to an enterprise, a conventional mortgage 
     having an original principal obligation that does not exceed 
     the applicable dollar limitation, in effect at the time of 
     such origination, under--
       ``(A) section 302(b)(2) of the Federal National Mortgage 
     Association Charter Act; or
       ``(B) section 305(a)(2) of the Federal Home Loan Mortgage 
     Corporation Act.
       ``(27) Extremely low-income.--The term `extremely low-
     income' means--
       ``(A) in the case of owner-occupied units, income not in 
     excess of 30 percent of the area median income; and
       ``(B) in the case of rental units, income not in excess of 
     30 percent of the area median income, with adjustments for 
     smaller and larger families, as determined by the Director.
       ``(28) Low-income area.--The term `low-income area' means a 
     census tract or block numbering area in which the median 
     income does not exceed 80 percent of the median income for 
     the area in which such census tract or block numbering area 
     is located, and, for the purposes of section 1332(a)(2), 
     shall include families having incomes not greater than 100 
     percent of the area median income who reside in minority 
     census tracts.
       ``(29) Minority census tract.--The term `minority census 
     tract' means a census tract that has a minority population of 
     at least 30 percent and a median family income of less than 
     100 percent of the area family median income.
       ``(30) Shortage of standard rental units both affordable 
     and available to extremely low-income renter households.--
       ``(A) In general.--The term `shortage of standard rental 
     units both affordable and available to extremely low-income 
     renter households' means the gap between--
       ``(i) the number of units with complete plumbing and 
     kitchen facilities with a rent that is 30 percent or less of 
     30 percent of the adjusted area median income as determined 
     by the Director that are occupied by extremely low-income 
     renter households or are vacant for rent; and
       ``(ii) the number of extremely low-income renter 
     households.
       ``(B) Rule of construction.--If the number of units 
     described in subparagraph (A)(i) exceeds the number of 
     extremely low-income households as described in subparagraph 
     (A)(ii), there is no shortage.
       ``(31) Shortage of standard rental units both affordable 
     and available to very low-income renter households.--
       ``(A) In general.--The term `shortage of standard rental 
     units both affordable and available to very low-income renter 
     households' means the gap between--
       ``(i) the number of units with complete plumbing and 
     kitchen facilities with a rent that is 30 percent or less of 
     50 percent of the adjusted area median income as determined 
     by the Director that are occupied by either extremely low- or 
     very low-income renter households or are vacant for rent; and
       ``(ii) the number of extremely low- and very low-income 
     renter households.
       ``(B) Rule of construction.--If the number of units 
     described in subparagraph (A)(i) exceeds the number of 
     extremely low- and very low-income households as described in 
     subparagraph (A)(ii), there is no shortage.''.

     SEC. 1129. DUTY TO SERVE UNDERSERVED MARKETS.

       (a) Establishment and Evaluation of Performance.--Section 
     1335 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4565) is amended--
       (1) in the section heading, by inserting ``DUTY TO SERVE 
     UNDERSERVED MARKETS AND'' before ``OTHER'';
       (2) by striking subsection (b);
       (3) in subsection (a)--
       (A) in the matter preceding paragraph (1), by inserting 
     ``and to carry out the duty under subsection (a) of this 
     section'' before ``, each enterprise shall'';
       (B) in paragraph (3), by inserting ``and'' after the 
     semicolon at the end;
       (C) in paragraph (4), by striking ``; and'' and inserting a 
     period;
       (D) by striking paragraph (5); and
       (E) by redesignating such subsection as subsection (b);
       (4) by inserting before subsection (b) (as so redesignated 
     by paragraph (3)(E) of this subsection) the following new 
     subsection:
       ``(a) Duty to Serve Underserved Markets.--
       ``(1) Duty.--In accordance with the purpose of the 
     enterprises under section 301(3) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1716) and section 
     301(b)(3) of the Federal Home Loan Mortgage Corporation Act 
     (12 U.S.C. 1451 note) to undertake activities relating to 
     mortgages on housing for very low-, low-, and moderate-income 
     families involving a reasonable economic return that may be 
     less than the return earned on other activities, each 
     enterprise shall have the duty to increase the liquidity of 
     mortgage investments and improve the distribution of 
     investment capital available for mortgage financing for 
     underserved markets by purchasing or securitizing mortgage 
     investments.
       ``(2) Underserved markets.--To meet its duty under 
     paragraph (1), each enterprise shall comply with the 
     following requirements with respect to the following 
     underserved markets:

[[Page 15904]]

       ``(A) Manufactured housing.--The enterprise shall lead the 
     industry in developing loan products and flexible 
     underwriting guidelines to facilitate a secondary market for 
     mortgages on manufactured homes for very low-, low-, and 
     moderate-income families.
       ``(B) Affordable housing preservation.--The enterprise 
     shall lead the industry in developing loan products and 
     flexible underwriting guidelines to facilitate a secondary 
     market to preserve housing affordable to very 
     low-, low-, and moderate-income families, including housing 
     projects subsidized under--
       ``(i) the project-based and tenant-based rental assistance 
     programs under section 8 of the United States Housing Act of 
     1937;
       ``(ii) the program under section 236 of the National 
     Housing Act;
       ``(iii) the below-market interest rate mortgage program 
     under section 221(d)(4) of the National Housing Act;
       ``(iv) the supportive housing for the elderly program under 
     section 202 of the Housing Act of 1959;
       ``(v) the supportive housing program for persons with 
     disabilities under section 811 of the Cranston-Gonzalez 
     National Affordable Housing Act;
       ``(vi) the programs under title IV of the McKinney-Vento 
     Homeless Assistance Act (42 U.S.C. 11361 et seq.), but only 
     permanent supportive housing projects subsidized under such 
     programs; and
       ``(vii) the rural rental housing program under section 515 
     of the Housing Act of 1949.
       ``(C) Rural and other underserved markets.--The enterprise 
     shall lead the industry in developing loan products and 
     flexible underwriting guidelines to facilitate a secondary 
     market for mortgages on housing for very 
     low-, low-, and moderate-income families in rural areas, and 
     for mortgages for housing for any other underserved market 
     for very low-, low-, and moderate-income families that the 
     Director identifies as lacking adequate credit through 
     conventional lending sources. Such underserved markets may be 
     identified by borrower type, market segment, or geographic 
     area.''; and
       (5) by adding at the end the following new subsection:
       ``(c) Evaluation and Reporting of Compliance.--
       ``(1) In general.--Not later than 6 months after the 
     effective date of the Federal Housing Finance Regulatory 
     Reform Act of 2008, the Director shall establish a manner for 
     evaluating whether, and the extent to which, the enterprises 
     have complied with the duty under subsection (a) to serve 
     underserved markets and for rating the extent of such 
     compliance. Using such method, the Director shall, for each 
     year, evaluate such compliance and rate the performance of 
     each enterprise as to extent of compliance. The Director 
     shall include such evaluation and rating for each enterprise 
     for a year in the report for that year submitted pursuant to 
     section 1319B(a).
       ``(2) Separate evaluations.--In determining whether an 
     enterprise has complied with the duty referred to in 
     paragraph (1), the Director shall separately evaluate whether 
     the enterprise has complied with such duty with respect to 
     each of the underserved markets identified in subsection (a), 
     taking into consideration--
       ``(A) the development of loan products and more flexible 
     underwriting guidelines;
       ``(B) the extent of outreach to qualified loan sellers in 
     each of such underserved markets; and
       ``(C) the volume of loans purchased in each of such 
     underserved markets.
       ``(3) Manufactured housing market.--In determining whether 
     an enterprise has complied with the duty under subparagraph 
     (A) of subsection (a)(2), the Director may consider loans 
     secured by both real and personal property.''.
       (b) Enforcement.--Subsection (a) of section 1336 of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 
     4566(a)) is amended--
       (1) in paragraph (1), by inserting ``and with the duty 
     under section 1335(a) of each enterprise with respect to 
     underserved markets,'' before ``as provided in this 
     section''; and
       (2) by adding at the end of such subsection, as amended by 
     the preceding provisions of this subtitle, the following new 
     paragraph:
       ``(4) Enforcement of duty to provide mortgage credit to 
     underserved markets.--The duty under section 1335(a) of each 
     enterprise to serve underserved markets (as determined in 
     accordance with section 1335(c)) shall be enforceable under 
     this section to the same extent and under the same provisions 
     that the housing goals established under this subpart are 
     enforceable. Such duty shall not be enforceable under any 
     other provision of this title (including subpart C of this 
     part) other than this section or under any provision of the 
     Federal National Mortgage Association Charter Act or the 
     Federal Home Loan Mortgage Corporation Act.''.

     SEC. 1130. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING 
                   GOALS.

       (a) In General.--Section 1336 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4566) is amended by striking subsections (b) and (c) 
     and inserting the following:
       ``(b) Notice and Preliminary Determination of Failure To 
     Meet Goals.--
       ``(1) Notice.--If the Director preliminarily determines 
     that an enterprise has failed, or that there is a substantial 
     probability that an enterprise will fail, to meet any housing 
     goal under this subpart, the Director shall provide written 
     notice to the enterprise of such a preliminary determination, 
     the reasons for such determination, and the information on 
     which the Director based the determination.
       ``(2) Response period.--
       ``(A) In general.--During the 30-day period beginning on 
     the date on which an enterprise is provided notice under 
     paragraph (1), the enterprise may submit to the Director any 
     written information that the enterprise considers appropriate 
     for consideration by the Director in finally determining 
     whether such failure has occurred or whether the achievement 
     of such goal was or is feasible.
       ``(B) Extended period.--The Director may extend the period 
     under subparagraph (A) for good cause for not more than 30 
     additional days.
       ``(C) Shortened period.--The Director may shorten the 
     period under subparagraph (A) for good cause.
       ``(D) Failure to respond.--The failure of an enterprise to 
     provide information during the 30-day period under this 
     paragraph (as extended or shortened) shall waive any right of 
     the enterprise to comment on the proposed determination or 
     action of the Director.
       ``(3) Consideration of information and final 
     determination.--
       ``(A) In general.--After the expiration of the response 
     period under paragraph (2), or upon receipt of information 
     provided during such period by the enterprise, whichever 
     occurs earlier, the Director shall issue a final 
     determination on--
       ``(i) whether the enterprise has failed, or there is a 
     substantial probability that the enterprise will fail, to 
     meet the housing goal; and
       ``(ii) whether (taking into consideration market and 
     economic conditions and the financial condition of the 
     enterprise) the achievement of the housing goal was or is 
     feasible.
       ``(B) Considerations.--In making a final determination 
     under subparagraph (A), the Director shall take into 
     consideration any relevant information submitted by the 
     enterprise during the response period.
       ``(C) Notice.--The Director shall provide written notice, 
     including a response to any information submitted during the 
     response period, to the enterprise, the Committee on Banking, 
     Housing, and Urban Affairs of the Senate, and the Committee 
     on Financial Services of the House of Representatives, of--
       ``(i) each final determination under this paragraph that an 
     enterprise has failed, or that there is a substantial 
     probability that the enterprise will fail, to meet a housing 
     goal;
       ``(ii) each final determination that the achievement of a 
     housing goal was or is feasible; and
       ``(iii) the reasons for each such final determination.
       ``(c) Cease and Desist, Civil Money Penalties, and Remedies 
     Including Housing Plans.--
       ``(1) Requirement.--If the Director finds, pursuant to 
     subsection (b), that there is a substantial probability that 
     an enterprise will fail, or has actually failed, to meet any 
     housing goal under this subpart, and that the achievement of 
     the housing goal was or is feasible, the Director may require 
     that the enterprise submit a housing plan under this 
     subsection. If the Director makes such a finding and the 
     enterprise refuses to submit such a plan, submits an 
     unacceptable plan, fails to comply with the plan, or the 
     Director finds that the enterprise has failed to meet any 
     housing goal under this subpart, in addition to requiring an 
     enterprise to submit a housing plan, the Director may issue a 
     cease and desist order in accordance with section 1341, 
     impose civil money penalties in accordance with section 1345, 
     or order other remedies as set forth in paragraph (7).
       ``(2) Housing plan.--If the Director requires a housing 
     plan under this subsection, such a plan shall be--
       ``(A) a feasible plan describing the specific actions the 
     enterprise will take--
       ``(i) to achieve the goal for the next calendar year; and
       ``(ii) if the Director determines that there is a 
     substantial probability that the enterprise will fail to meet 
     a goal in the current year, to make such improvements and 
     changes in its operations as are reasonable in the remainder 
     of such year; and
       ``(B) sufficiently specific to enable the Director to 
     monitor compliance periodically.
       ``(3) Deadline for submission.--The Director shall 
     establish a deadline for an enterprise to comply with any 
     remedial action or submit a housing plan to the Director, 
     which may not be more than 45 days after the enterprise is 
     provided notice. The Director may extend the deadline to the 
     extent that the Director determines necessary. Any extension 
     of the deadline shall be in writing and for a time certain.
       ``(4) Approval.--The Director shall review each submission 
     by an enterprise, including a housing plan submitted under 
     this subsection, and, not later than 30 days after 
     submission, approve or disapprove the plan or other action. 
     The Director may extend the period for approval or 
     disapproval for a single additional 30-day period if the 
     Director determines it necessary. The Director shall approve 
     any plan that the Director determines is likely to succeed, 
     and conforms with the Federal National Mortgage Association 
     Charter Act or the Federal Home Loan Mortgage Corporation Act 
     (as applicable), this title, and any other applicable 
     provision of law.
       ``(5) Notice of approval and disapproval.--The Director 
     shall provide written notice to any enterprise submitting a 
     housing plan of the approval or disapproval of the plan 
     (which shall include the reasons for any disapproval of the

[[Page 15905]]

     plan) and of any extension of the period for approval or 
     disapproval.
       ``(6) Resubmission.--If the initial housing plan submitted 
     by an enterprise under this section is disapproved, the 
     enterprise shall submit an amended plan acceptable to the 
     Director not later than 15 days after such disapproval, or 
     such longer period that the Director determines is in the 
     public interest.
       ``(7) Additional remedies for failure to meet goals.--In 
     addition to ordering a housing plan under this section, 
     issuing cease and desist orders under section 1341, and 
     ordering civil money penalties under section 1345, the 
     Director may--
       ``(A) seek other actions when an enterprise fails to meet a 
     goal; and
       ``(B) exercise appropriate enforcement authority available 
     to the Director under this Act.''.
       (b) Conforming Amendment.--The heading for subpart C of 
     part 2 of subtitle A of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 is amended to read 
     as follows:

                      ``Subpart C--Enforcement''.

       (c) Cease and Desist Proceedings .--
       (1) Repeal.--Section 1341 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4581) is hereby repealed.
       (2) Cease and desist proceedings.--The Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 is 
     amended by inserting before section 1342 the following:

     ``SEC. 1341. CEASE AND DESIST PROCEEDINGS.

       ``(a) Grounds for Issuance.--The Director may issue and 
     serve a notice of charges under this section upon an 
     enterprise if the Director determines that--
       ``(1) the enterprise has failed to meet any housing goal 
     established under subpart B, following a written notice and 
     determination of such failure in accordance with section 
     1336;
       ``(2) the enterprise has failed to submit a report under 
     section 1327, following a notice of such failure, an 
     opportunity for comment by the enterprise, and a final 
     determination by the Director;
       ``(3) the enterprise has failed to submit the information 
     required under subsection (m) or (n) of section 309 of the 
     Federal National Mortgage Association Charter Act, subsection 
     (e) or (f) of section 307 of the Federal Home Loan Mortgage 
     Corporation Act, or section 1337 of this title;
       ``(4) the enterprise has violated any provision of part 2 
     of this title or any order, rule, or regulation under part 2;
       ``(5) the enterprise has failed to submit a housing plan or 
     perform its responsibilities under a remedial order that 
     substantially complies with section 1336(c) within the 
     applicable period; or
       ``(6) the enterprise has failed to comply with a housing 
     plan under section 1336(c).
       ``(b) Procedure.--
       ``(1) Notice of charges.--Each notice of charges issued 
     under this section shall contain a statement of the facts 
     constituting the alleged conduct and shall fix a time and 
     place at which a hearing will be held to determine on the 
     record whether an order to cease and desist from such conduct 
     should issue.
       ``(2) Issuance of order.--If the Director finds on the 
     record made at a hearing described in paragraph (1) that any 
     conduct specified in the notice of charges has been 
     established (or the enterprise consents pursuant to section 
     1342(a)(4)), the Director may issue and serve upon the 
     enterprise an order requiring the enterprise to--
       ``(A) comply with the goals;
       ``(B) submit a report under section 1327;
       ``(C) comply with any provision of part 2 of this title or 
     any order, rule, or regulation under part 2;
       ``(D) submit a housing plan in compliance with section 
     1336(c);
       ``(E) comply with the housing plan in compliance with 
     section 1336(c); or
       ``(F) provide the information required under subsection (m) 
     or (n) of section 309 of the Federal National Mortgage 
     Association Charter Act, or subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act.
       ``(c) Effective Date.--An order under this section shall 
     become effective upon the expiration of the 30-day period 
     beginning on the date of service of the order upon the 
     enterprise (except in the case of an order issued upon 
     consent, which shall become effective at the time specified 
     therein), and shall remain effective and enforceable as 
     provided in the order, except to the extent that the order is 
     stayed, modified, terminated, or set aside by action of the 
     Director or otherwise, as provided in this subpart.''.
       (d) Civil Money Penalties.--
       (1) Repeal.--Section 1345 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4585) is hereby repealed.
       (2) Civil money penalties.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 is amended by 
     inserting after section 1344 the following:

     ``SEC. 1345. CIVIL MONEY PENALTIES.

       ``(a) Authority.--The Director may impose a civil money 
     penalty, in accordance with the provisions of this section, 
     on any enterprise that has failed to--
       ``(1) meet any housing goal established under subpart B, 
     following a written notice and determination of such failure 
     in accordance with section 1336(b);
       ``(2) submit a report under section 1327, following a 
     notice of such failure, an opportunity for comment by the 
     enterprise, and a final determination by the Director;
       ``(3) submit the information required under subsection (m) 
     or (n) of section 309 of the Federal National Mortgage 
     Association Charter Act or subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act;
       ``(4) comply with any provision of part 2 of this title or 
     any order, rule, or regulation under part 2;
       ``(5) submit a housing plan or perform its responsibilities 
     under a remedial order issued pursuant to section 1336(c) 
     within the required period; or
       ``(6) comply with a housing plan for the enterprise under 
     section 1336(c).
       ``(b) Amount of Penalty.--The amount of a penalty under 
     this section, as determined by the Director, may not exceed--
       ``(1) for any failure described in paragraph (1), (5), or 
     (6) of subsection (a), $100,000 for each day that the failure 
     occurs; and
       ``(2) for any failure described in paragraph (2), (3), or 
     (4) of subsection (a), $50,000 for each day that the failure 
     occurs.
       ``(c) Procedures.--
       ``(1) Establishment.--The Director shall establish 
     standards and procedures governing the imposition of civil 
     money penalties under this section. Such standards and 
     procedures--
       ``(A) shall provide for the Director to notify the 
     enterprise in writing of the determination of the Director to 
     impose the penalty, which shall be made on the record;
       ``(B) shall provide for the imposition of a penalty only 
     after the enterprise has been given an opportunity for a 
     hearing on the record pursuant to section 1342; and
       ``(C) may provide for review by the Director of any 
     determination or order, or interlocutory ruling, arising from 
     a hearing.
       ``(2) Factors in determining amount of penalty.--In 
     determining the amount of a penalty under this section, the 
     Director shall give consideration to factors including--
       ``(A) the gravity of the offense;
       ``(B) any history of prior offenses;
       ``(C) ability to pay the penalty;
       ``(D) injury to the public;
       ``(E) benefits received;
       ``(F) deterrence of future violations;
       ``(G) the length of time that the enterprise should 
     reasonably take to achieve the goal; and
       ``(H) such other factors as the Director may determine, by 
     regulation, to be appropriate.
       ``(d) Action To Collect Penalty.--If an enterprise fails to 
     comply with an order by the Director imposing a civil money 
     penalty under this section, after the order is no longer 
     subject to review, as provided in sections 1342 and 1343, the 
     Director may bring an action in the United States District 
     Court for the District of Columbia to obtain a monetary 
     judgment against the enterprise, and such other relief as may 
     be available. The monetary judgment may, in the court's 
     discretion, include the attorneys' fees and other expenses 
     incurred by the United States in connection with the action. 
     In an action under this subsection, the validity and 
     appropriateness of the order imposing the penalty shall not 
     be subject to review.
       ``(e) Settlement by Director.--The Director may compromise, 
     modify, or remit any civil money penalty which may be, or has 
     been, imposed under this section.
       ``(f) Deposit of Penalties.--The Director shall use any 
     civil money penalties collected under this section to help 
     fund the Housing Trust Fund established under section 
     1338.''.
       (e) Director Authority.--
       (1) Authority to bring a civil action.--Section 1344(a) of 
     the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4584) is amended by striking 
     ``The Secretary may request the Attorney General of the 
     United States to bring a civil action'' and inserting ``The 
     Director may bring a civil action''.
       (2) Subpoena enforcement.--Section 1348(c) of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4588(c)) is amended by inserting ``may bring 
     an action or'' before ``may request''.
       (3) Conforming amendments.--Subpart C of part 2 of subtitle 
     A of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4581 et seq.) is amended by 
     striking ``Secretary'' each place that term appears and 
     inserting ``Director'' in each of--
       (A) section 1342 (12 U.S.C. 4582);
       (B) section 1343 (12 U.S.C. 4583);
       (C) section 1346 (12 U.S.C. 4586);
       (D) section 1347 (12 U.S.C. 4587); and
       (E) section 1348 (12 U.S.C. 4588).

     SEC. 1131. AFFORDABLE HOUSING PROGRAMS.

       (a) Repeal.--Section 1337 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4567) is hereby repealed.
       (b) Annual Housing Report.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 1301 et 
     seq.) is amended by inserting after section 1336 the 
     following:

     ``SEC. 1337. AFFORDABLE HOUSING ALLOCATIONS.

       ``(a) Set Aside and Allocation of Amounts by Enterprises.--
     Subject to subsection (b), in each fiscal year--
       ``(1) the Federal Home Loan Mortgage Corporation shall--
       ``(A) set aside an amount equal to 4.2 basis points for 
     each dollar of the unpaid principal balance of its total new 
     business purchases; and
       ``(B) allocate or otherwise transfer--
       ``(i) 65 percent of such amounts to the Secretary of 
     Housing and Urban Development to fund the Housing Trust Fund 
     established under section 1338; and
       ``(ii) 35 percent of such amounts to fund the Capital 
     Magnet Fund established pursuant to section 1339; and

[[Page 15906]]

       ``(2) the Federal National Mortgage Association shall--
       ``(A) set aside an amount equal to 4.2 basis points for 
     each dollar of unpaid principal balance of its total new 
     business purchases; and
       ``(B) allocate or otherwise transfer--
       ``(i) 65 percent of such amounts to the Secretary of 
     Housing and Urban Development to fund the Housing Trust Fund 
     established under section 1338; and
       ``(ii) 35 percent of such amounts to fund the Capital 
     Magnet Fund established pursuant to section 1339.
       ``(b) Suspension of Contributions.--The Director shall 
     temporarily suspend allocations under subsection (a) by an 
     enterprise upon a finding by the Director that such 
     allocations--
       ``(1) are contributing, or would contribute, to the 
     financial instability of the enterprise;
       ``(2) are causing, or would cause, the enterprise to be 
     classified as undercapitalized; or
       ``(3) are preventing, or would prevent, the enterprise from 
     successfully completing a capital restoration plan under 
     section 1369C.
       ``(c) Prohibition of Pass-Through of Cost of Allocations.--
     The Director shall, by regulation, prohibit each enterprise 
     from redirecting the costs of any allocation required under 
     this section, through increased charges or fees, or decreased 
     premiums, or in any other manner, to the originators of 
     mortgages purchased or securitized by the enterprise.
       ``(d) Enforcement of Requirements on Enterprise.--
     Compliance by the enterprises with the requirements under 
     this section shall be enforceable under subpart C. Any 
     reference in such subpart to this part or to an order, rule, 
     or regulation under this part specifically includes this 
     section and any order, rule, or regulation under this 
     section.
       ``(e) Required Amount for HOPE Reserve Fund.--Of the 
     aggregate amount allocated under subsection (a), 25 percent 
     shall be deposited into a fund established in the Treasury of 
     the United States by the Secretary of the Treasury for such 
     purpose.
       ``(f) Limitation.--No funds under this title may be used in 
     conjunction with property taken by eminent domain, unless 
     eminent domain is employed only for a public use, except 
     that, for purposes of this section, public use shall not be 
     construed to include economic development that primarily 
     benefits any private entity.

     ``SEC. 1338. HOUSING TRUST FUND.

       ``(a) Establishment and Purpose.--The Secretary of Housing 
     and Urban Development (in this section referred to as the 
     `Secretary') shall establish and manage a Housing Trust Fund, 
     which shall be funded with amounts allocated by the 
     enterprises under section 1337 and any amounts as are or may 
     be appropriated, transferred, or credited to such Housing 
     Trust Fund under any other provisions of law. The purpose of 
     the Housing Trust Fund under this section is to provide 
     grants to States for use--
       ``(1) to increase and preserve the supply of rental housing 
     for extremely low- and very low-income families, including 
     homeless families; and
       ``(2) to increase homeownership for extremely low- and very 
     low-income families.
       ``(b) Allocations for HOPE Bond Payments.--
       ``(1) In general.--Notwithstanding subsection (c), to help 
     address the mortgage crisis, of the amounts allocated 
     pursuant to clauses (i) and (ii) of section 1337(a)(1)(B) and 
     clauses (i) and (ii) of section 1337(a)(2)(B) in excess of 
     amounts described in section 1337(e)--
       ``(A) 100 percent of such excess shall be used to reimburse 
     the Treasury for payments made pursuant to section 
     257(w)(1)(C) of the National Housing Act in calendar year 
     2009;
       ``(B) 50 percent of such excess shall be used to reimburse 
     the Treasury for such payments in calendar year 2010; and
       ``(C) 25 percent of such excess shall be used to reimburse 
     the Treasury for such payments in calendar year 2011.
       ``(2) Excess funds.--At the termination of the HOPE for 
     Homeowners Program established under section 257 of the 
     National Housing Act, if amounts used to reimburse the 
     Treasury under paragraph (1) exceed the total net cost to the 
     Government of the HOPE for Homeowners Program, such amounts 
     shall be used for their original purpose, as described in 
     paragraphs (1)(B) and (2)(B) of section 1337(a).
       ``(3) Treasury fund.--The amounts referred to in 
     subparagraphs (A) through (C) of paragraph (1) shall be 
     deposited into a fund established in the Treasury of the 
     United States by the Secretary of the Treasury for such 
     purpose.
       ``(c) Allocation for Housing Trust Fund in Fiscal Year 2010 
     and Subsequent Years.--
       ``(1) In general.--Except as provided in subsection (b), 
     the Secretary shall distribute the amounts allocated for the 
     Housing Trust Fund under this section to provide affordable 
     housing as described in this subsection.
       ``(2) Permissible designees.--A State receiving grant 
     amounts under this subsection may designate a State housing 
     finance agency, housing and community development entity, 
     tribally designated housing entity (as such term is defined 
     in section 4 of the Native American Housing Assistance and 
     Self-Determination Act of 1997 (25 U.S.C. 4103)), or any 
     other qualified instrumentality of the State to receive such 
     grant amounts.
       ``(3) Distribution to states by needs-based formula.--
       ``(A) In general.--The Secretary shall, by regulation, 
     establish a formula within 12 months of the date of enactment 
     of the Federal Housing Finance Regulatory Reform Act of 2008, 
     to distribute amounts made available under this subsection to 
     each State to provide affordable housing to extremely low- 
     and very low-income households.
       ``(B) Basis for formula.--The formula required under 
     subparagraph (A) shall include the following:
       ``(i) The ratio of the shortage of standard rental units 
     both affordable and available to extremely low-income renter 
     households in the State to the aggregate shortage of standard 
     rental units both affordable and available to extremely low-
     income renter households in all the States.
       ``(ii) The ratio of the shortage of standard rental units 
     both affordable and available to very low-income renter 
     households in the State to the aggregate shortage of standard 
     rental units both affordable and available to very low-income 
     renter households in all the States.
       ``(iii) The ratio of extremely low-income renter households 
     in the State living with either (I) incomplete kitchen or 
     plumbing facilities, (II) more than 1 person per room, or 
     (III) paying more than 50 percent of income for housing 
     costs, to the aggregate number of extremely low-income renter 
     households living with either (IV) incomplete kitchen or 
     plumbing facilities, (V) more than 1 person per room, or (VI) 
     paying more than 50 percent of income for housing costs in 
     all the States.
       ``(iv) The ratio of very low-income renter households in 
     the State paying more than 50 percent of income on rent 
     relative to the aggregate number of very low-income renter 
     households paying more than 50 percent of income on rent in 
     all the States.
       ``(v) The resulting sum calculated from the factors 
     described in clauses (i) through (iv) shall be multiplied by 
     the relative cost of construction in the State. For purposes 
     of this subclause, the term `cost of construction'--

       ``(I) means the cost of construction or building 
     rehabilitation in the State relative to the national cost of 
     construction or building rehabilitation; and
       ``(II) shall be calculated such that values higher than 1.0 
     indicate that the State's construction costs are higher than 
     the national average, a value of 1.0 indicates that the 
     State's construction costs are exactly the same as the 
     national average, and values lower than 1.0 indicate that the 
     State's cost of construction are lower than the national 
     average.

       ``(C) Priority.--The formula required under subparagraph 
     (A) shall give priority emphasis and consideration to the 
     factor described in subparagraph (B)(i).
       ``(4) Allocation of grant amounts.--
       ``(A) Notice.--Not later than 60 days after the date that 
     the Secretary determines the formula amounts described in 
     paragraph (3), the Secretary shall caused to be published in 
     the Federal Register a notice that such amounts shall be so 
     available.
       ``(B) Grant amount.--In each fiscal year other than fiscal 
     year 2009, the Secretary shall make a grant to each State in 
     an amount that is equal to the formula amount determined 
     under paragraph (3) for that State.
       ``(C) Minimum state allocations.--If the formula amount 
     determined under paragraph (3) for a fiscal year would 
     allocate less than $3,000,000 to any State, the allocation 
     for such State shall be $3,000,000, and the increase shall be 
     deducted pro rata from the allocations made to all other 
     States.
       ``(5) Allocation plans required.--
       ``(A) In general.--For each year that a State or State 
     designated entity receives a grant under this subsection, the 
     State or State designated entity shall establish an 
     allocation plan. Such plan shall--
       ``(i) set forth a plan for the distribution of grant 
     amounts received by the State or State designated entity for 
     such year;
       ``(ii) be based on priority housing needs, as determined by 
     the State or State designated entity in accordance with the 
     regulations established under subsection (g)(2)(C);
       ``(iii) comply with paragraph (6); and
       ``(iv) include performance goals that comply with the 
     requirements established by the Secretary pursuant to 
     subsection (g)(2).
       ``(B) Establishment.--In establishing an allocation plan 
     under this paragraph, a State or State designated entity 
     shall--
       ``(i) notify the public of the establishment of the plan;
       ``(ii) provide an opportunity for public comments regarding 
     the plan;
       ``(iii) consider any public comments received regarding the 
     plan; and
       ``(iv) make the completed plan available to the public.
       ``(C) Contents.--An allocation plan of a State or State 
     designated entity under this paragraph shall set forth the 
     requirements for eligible recipients under paragraph (8) to 
     apply for such grant amounts, including a requirement that 
     each such application include--
       ``(i) a description of the eligible activities to be 
     conducted using such assistance; and
       ``(ii) a certification by the eligible recipient applying 
     for such assistance that any housing units assisted with such 
     assistance will comply with the requirements under this 
     section.
       ``(6) Selection of activities funded using housing trust 
     fund grant amounts.--Grant amounts received by a State or 
     State designated entity under this subsection may be used, or 
     committed for use, only for activities that--
       ``(A) are eligible under paragraph (7) for such use;
       ``(B) comply with the applicable allocation plan of the 
     State or State designated entity under paragraph (5); and
       ``(C) are selected for funding by the State or State 
     designated entity in accordance with the

[[Page 15907]]

     process and criteria for such selection established pursuant 
     to subsection (g)(2)(C).
       ``(7) Eligible activities.--Grant amounts allocated to a 
     State or State designated entity under this subsection shall 
     be eligible for use, or for commitment for use, only for 
     assistance for--
       ``(A) the production, preservation, and rehabilitation of 
     rental housing, including housing under the programs 
     identified in section 1335(a)(2)(B) and for operating costs, 
     except that not less than 75 percent of such grant amounts 
     shall be used for the benefit only of extremely low-income 
     families and not more than 25 percent for the benefit only of 
     very low-income families; and
       ``(B) the production, preservation, and rehabilitation of 
     housing for homeownership, including such forms as down 
     payment assistance, closing cost assistance, and assistance 
     for interest rate buy-downs, that--
       ``(i) is available for purchase only for use as a principal 
     residence by families that qualify both as--

       ``(I) extremely low- and very low-income families at the 
     times described in subparagraphs (A) through (C) of section 
     215(b)(2) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12745(b)(2)); and
       ``(II) first-time homebuyers, as such term is defined in 
     section 104 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12704), except that any reference in 
     such section to assistance under title II of such Act shall 
     for purposes of this subsection be considered to refer to 
     assistance from affordable housing fund grant amounts;

       ``(ii) has an initial purchase price that meets the 
     requirements of section 215(b)(1) of the Cranston-Gonzalez 
     National Affordable Housing Act;
       ``(iii) is subject to the same resale restrictions 
     established under section 215(b)(3) of the Cranston-Gonzalez 
     National Affordable Housing Act and applicable to the 
     participating jurisdiction that is the State in which such 
     housing is located; and
       ``(iv) is made available for purchase only by, or in the 
     case of assistance under this subsection, is made available 
     only to homebuyers who have, before purchase completed a 
     program of independent financial education and counseling 
     from an eligible organization that meets the requirements of 
     section 132 of the Federal Housing Finance Regulatory Reform 
     Act of 2008.
       ``(8) Eligible recipients.--Grant amounts allocated to a 
     State or State designated entity under this subsection may be 
     provided only to a recipient that is an organization, agency, 
     or other entity (including a for-profit entity or a nonprofit 
     entity) that--
       ``(A) has demonstrated experience and capacity to conduct 
     an eligible activity under paragraph (7), as evidenced by its 
     ability to--
       ``(i) own, construct or rehabilitate, manage, and operate 
     an affordable multifamily rental housing development;
       ``(ii) design, construct or rehabilitate, and market 
     affordable housing for homeownership; or
       ``(iii) provide forms of assistance, such as down payments, 
     closing costs, or interest rate buy-downs for purchasers;
       ``(B) demonstrates the ability and financial capacity to 
     undertake, comply, and manage the eligible activity;
       ``(C) demonstrates its familiarity with the requirements of 
     any other Federal, State, or local housing program that will 
     be used in conjunction with such grant amounts to ensure 
     compliance with all applicable requirements and regulations 
     of such programs; and
       ``(D) makes such assurances to the State or State 
     designated entity as the Secretary shall, by regulation, 
     require to ensure that the recipient will comply with the 
     requirements of this subsection during the entire period that 
     begins upon selection of the recipient to receive such grant 
     amounts and ending upon the conclusion of all activities 
     under paragraph (8) that are engaged in by the recipient and 
     funded with such grant amounts.
       ``(9) Limitations on use.--
       ``(A) Required amount for homeownership activities.--Of the 
     aggregate amount allocated to a State or State designated 
     entity under this subsection not more than 10 percent shall 
     be used for activities under subparagraph (B) of paragraph 
     (7).
       ``(B) Deadline for commitment or use.--Grant amounts 
     allocated to a State or State designated entity under this 
     subsection shall be used or committed for use within 2 years 
     of the date that such grant amounts are made available to the 
     State or State designated entity. The Secretary shall 
     recapture any such amounts not so used or committed for use 
     and reallocate such amounts under this subsection in the 
     first year after such recapture.
       ``(C) Use of returns.--The Secretary shall, by regulation, 
     provide that any return on a loan or other investment of any 
     grant amount used by a State or State designated entity to 
     provide a loan under this subsection shall be treated, for 
     purposes of availability to and use by the State or State 
     designated entity, as a grant amount authorized under this 
     subsection.
       ``(D) Prohibited uses.--The Secretary shall, by 
     regulation--
       ``(i) set forth prohibited uses of grant amounts allocated 
     under this subsection, which shall include use for--

       ``(I) political activities;
       ``(II) advocacy;
       ``(III) lobbying, whether directly or through other 
     parties;
       ``(IV) counseling services;
       ``(V) travel expenses; and
       ``(VI) preparing or providing advice on tax returns;

       ``(ii) provide that, except as provided in clause (iii), 
     grant amounts of a State or State designated entity may not 
     be used for administrative, outreach, or other costs of--

       ``(I) the State or State designated entity; or
       ``(II) any other recipient of such grant amounts; and

       ``(iii) limit the amount of any grant amounts for a year 
     that may be used by the State or State designated entity for 
     administrative costs of carrying out the program required 
     under this subsection, including home ownership counseling, 
     to a percentage of such grant amounts of the State or State 
     designated entity for such year, which may not exceed 10 
     percent.
       ``(E) Prohibition of consideration of use for meeting 
     housing goals or duty to serve.--In determining compliance 
     with the housing goals under this subpart and the duty to 
     serve underserved markets under section 1335, the Director 
     may not consider any grant amounts used under this section 
     for eligible activities under paragraph (7). The Director 
     shall give credit toward the achievement of such housing 
     goals and such duty to serve underserved markets to purchases 
     by the enterprises of mortgages for housing that receives 
     funding from such grant amounts, but only to the extent that 
     such purchases by the enterprises are funded other than with 
     such grant amounts.
       ``(d) Reduction for Failure To Obtain Return of Misused 
     Funds.--If in any year a State or State designated entity 
     fails to obtain reimbursement or return of the full amount 
     required under subsection (e)(1)(B) to be reimbursed or 
     returned to the State or State designated entity during such 
     year--
       ``(1) except as provided in paragraph (2)--
       ``(A) the amount of the grant for the State or State 
     designated entity for the succeeding year, as determined 
     pursuant to this section, shall be reduced by the amount by 
     which such amounts required to be reimbursed or returned 
     exceed the amount actually reimbursed or returned; and
       ``(B) the amount of the grant for the succeeding year for 
     each other State or State designated entity whose grant is 
     not reduced pursuant to subparagraph (A) shall be increased 
     by the amount determined by applying the formula established 
     pursuant to this section to the total amount of all 
     reductions for all State or State designated entities for 
     such year pursuant to subparagraph (A); or
       ``(2) in any case in which such failure to obtain 
     reimbursement or return occurs during a year immediately 
     preceding a year in which grants under this section will not 
     be made, the State or State designated entity shall pay to 
     the Secretary for reallocation among the other grantees an 
     amount equal to the amount of the reduction for the entity 
     that would otherwise apply under paragraph (1)(A).
       ``(e) Accountability of Recipients and Grantees.--
       ``(1) Recipients.--
       ``(A) Tracking of funds.--The Secretary shall--
       ``(i) require each State or State designated entity to 
     develop and maintain a system to ensure that each recipient 
     of assistance under this section uses such amounts in 
     accordance with this section, the regulations issued under 
     this section, and any requirements or conditions under which 
     such amounts were provided; and
       ``(ii) establish minimum requirements for agreements, 
     between the State or State designated entity and recipients, 
     regarding assistance under this section, which shall 
     include--

       ``(I) appropriate periodic financial and project reporting, 
     record retention, and audit requirements for the duration of 
     the assistance to the recipient to ensure compliance with the 
     limitations and requirements of this section and the 
     regulations under this section; and
       ``(II) any other requirements that the Secretary determines 
     are necessary to ensure appropriate administration and 
     compliance.

       ``(B) Misuse of funds.--
       ``(i) Reimbursement requirement.--If any recipient of 
     assistance under this section is determined, in accordance 
     with clause (ii), to have used any such amounts in a manner 
     that is materially in violation of this section, the 
     regulations issued under this section, or any requirements or 
     conditions under which such amounts were provided, the State 
     or State designated entity shall require that, within 12 
     months after the determination of such misuse, the recipient 
     shall reimburse the State or State designated entity for such 
     misused amounts and return to the State or State designated 
     entity any such amounts that remain unused or uncommitted for 
     use. The remedies under this clause are in addition to any 
     other remedies that may be available under law.
       ``(ii) Determination.--A determination is made in 
     accordance with this clause if the determination is made by 
     the Secretary or made by the State or State designated 
     entity, provided that--

       ``(I) the State or State designated entity provides 
     notification of the determination to the Secretary for 
     review, in the discretion of the Secretary, of the 
     determination; and
       ``(II) the Secretary does not subsequently reverse the 
     determination.

       ``(2) Grantees.--
       ``(A) Report.--
       ``(i) In general.--The Secretary shall require each State 
     or State designated entity receiving grant amounts in any 
     given year under this section to submit a report, for such 
     year, to the Secretary that--

[[Page 15908]]

       ``(I) describes the activities funded under this section 
     during such year with such grant amounts; and
       ``(II) the manner in which the State or State designated 
     entity complied during such year with any allocation plan 
     established pursuant to subsection (c).

       ``(ii) Public availability.--The Secretary shall make such 
     reports pursuant to this subparagraph publicly available.
       ``(B) Misuse of funds.--If the Secretary determines, after 
     reasonable notice and opportunity for hearing, that a State 
     or State designated entity has failed to comply substantially 
     with any provision of this section, and until the Secretary 
     is satisfied that there is no longer any such failure to 
     comply, the Secretary shall--
       ``(i) reduce the amount of assistance under this section to 
     the State or State designated entity by an amount equal to 
     the amount of grant amounts which were not used in accordance 
     with this section;
       ``(ii) require the State or State designated entity to 
     repay the Secretary any amount of the grant which was not 
     used in accordance with this section;
       ``(iii) limit the availability of assistance under this 
     section to the State or State designated entity to activities 
     or recipients not affected by such failure to comply; or
       ``(iv) terminate any assistance under this section to the 
     State or State designated entity.
       ``(f) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Extremely low-income renter household.--The term 
     `extremely low-income renter household' means a household 
     whose income is not in excess of 30 percent of the area 
     median income, with adjustments for smaller and larger 
     families, as determined by the Secretary.
       ``(2) Recipient.--The term `recipient' means an individual 
     or entity that receives assistance from a State or State 
     designated entity from amounts made available to the State or 
     State designated entity under this section.
       ``(3) Shortage of standard rental units both affordable and 
     available to extremely low-income renter households.--
       ``(A) In general.--The term `shortage of standard rental 
     units both affordable and available to extremely low-income 
     renter households' means for any State or other geographical 
     area the gap between--
       ``(i) the number of units with complete plumbing and 
     kitchen facilities with a rent that is 30 percent or less of 
     30 percent of the adjusted area median income as determined 
     by the Secretary that are occupied by extremely low-income 
     renter households or are vacant for rent; and
       ``(ii) the number of extremely low-income renter 
     households.
       ``(B) Rule of construction.--If the number of units 
     described in subparagraph (A)(i) exceeds the number of 
     extremely low-income households as described in subparagraph 
     (A)(ii), there is no shortage.
       ``(4) Shortage of standard rental units both affordable and 
     available to very low-income renter households.--
       ``(A) In general.--The term `shortage of standard rental 
     units both affordable and available to very low-income renter 
     households' means for any State or other geographical area 
     the gap between--
       ``(i) the number of units with complete plumbing and 
     kitchen facilities with a rent that is 30 percent or less of 
     50 percent of the adjusted area median income as determined 
     by the Secretary that are occupied by very low-income renter 
     households or are vacant for rent; and
       ``(ii) the number of very low-income renter households.
       ``(B) Rule of construction.--If the number of units 
     described in subparagraph (A)(i) exceeds the number of very 
     low-income households as described in subparagraph (A)(ii), 
     there is no shortage.
       ``(5) Very low-income family.--The term `very low-income 
     family' has the meaning given such term in section 1303, 
     except that such term includes any family that resides in a 
     rural area that has an income that does not exceed the 
     poverty line (as such term is defined in section 673(2) of 
     the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 
     9902(2)), including any revision required by such section) 
     applicable to a family of the size involved.
       ``(6) Very low-income renter households.--The term `very 
     low-income renter households' means a household whose income 
     is in excess of 30 percent but not greater than 50 percent of 
     the area median income, with adjustments for smaller and 
     larger families, as determined by the Secretary.
       ``(g) Regulations.--
       ``(1) In general.--The Secretary shall issue regulations to 
     carry out this section.
       ``(2) Required contents.--The regulations issued under this 
     subsection shall include--
       ``(A) a requirement that the Secretary ensure that the use 
     of grant amounts under this section by States or State 
     designated entities is audited not less than annually to 
     ensure compliance with this section;
       ``(B) authority for the Secretary to audit, provide for an 
     audit, or otherwise verify a State or State designated 
     entity's activities to ensure compliance with this section;
       ``(C) requirements for a process for application to, and 
     selection by, each State or State designated entity for 
     activities meeting the State or State designated entity's 
     priority housing needs to be funded with grant amounts under 
     this section, which shall provide for priority in funding to 
     be based upon--
       ``(i) geographic diversity;
       ``(ii) ability to obligate amounts and undertake activities 
     so funded in a timely manner;
       ``(iii) in the case of rental housing projects under 
     subsection (c)(7)(A), the extent to which rents for units in 
     the project funded are affordable, especially for extremely 
     low-income families;
       ``(iv) in the case of rental housing projects under 
     subsection (c)(7)(A), the extent of the duration for which 
     such rents will remain affordable;
       ``(v) the extent to which the application makes use of 
     other funding sources; and
       ``(vi) the merits of an applicant's proposed eligible 
     activity;
       ``(D) requirements to ensure that grant amounts provided to 
     a State or State designated entity under this section that 
     are used for rental housing under subsection (c)(7)(A) are 
     used only for the benefit of extremely low- and very low-
     income families; and
       ``(E) requirements and standards for establishment, by a 
     State or State designated entity, for use of grant amounts in 
     2009 and subsequent years of performance goals, benchmarks, 
     and timetables for the production, preservation, and 
     rehabilitation of affordable rental and homeownership housing 
     with such grant amounts.
       ``(h) Affordable Housing Trust Fund.--If, after the date of 
     enactment of the Federal Housing Finance Regulatory Reform 
     Act of 2008, in any year, there is enacted any provision of 
     Federal law establishing an affordable housing trust fund 
     other than under this title for use only for grants to 
     provide affordable rental housing and affordable 
     homeownership opportunities, and the subsequent year is a 
     year referred to in subsection (c), the Secretary shall in 
     such subsequent year and any remaining years referred to in 
     subsection (c) transfer to such affordable housing trust fund 
     the aggregate amount allocated pursuant to subsection (c) in 
     such year. Notwithstanding any other provision of law, 
     assistance provided using amounts transferred to such 
     affordable housing trust fund pursuant to this subsection may 
     not be used for any of the activities specified in clauses 
     (i) through (vi) of subsection (c)(9)(D).
       ``(i) Funding Accountability and Transparency.--Any grant 
     under this section to a grantee by a State or State 
     designated entity, any assistance provided to a recipient by 
     a State or State designated entity, and any grant, award, or 
     other assistance from an affordable housing trust fund 
     referred to in subsection (h) shall be considered a Federal 
     award for purposes of the Federal Funding Accountability and 
     Transparency Act of 2006 (31 U.S.C. 6101 note). Upon the 
     request of the Director of the Office of Management and 
     Budget, the Secretary shall obtain and provide such 
     information regarding any such grants, assistance, and awards 
     as the Director of the Office of Management and Budget 
     considers necessary to comply with the requirements of such 
     Act, as applicable, pursuant to the preceding sentence.

     ``SEC. 1339. CAPITAL MAGNET FUND.

       ``(a) Establishment.--There is established in the Treasury 
     of the United States a trust fund to be known as the Capital 
     Magnet Fund, which shall be a special account within the 
     Community Development Financial Institutions Fund.
       ``(b) Deposits to Trust Fund.--The Capital Magnet Fund 
     shall consist of--
       ``(1) any amounts transferred to the Fund pursuant to 
     section 1337; and
       ``(2) any amounts as are or may be appropriated, 
     transferred, or credited to such Fund under any other 
     provisions of law.
       ``(c) Expenditures From Trust Fund.--Amounts in the Capital 
     Magnet Fund shall be available to the Secretary of the 
     Treasury to carry out a competitive grant program to attract 
     private capital for and increase investment in--
       ``(1) the development, preservation, rehabilitation, or 
     purchase of affordable housing for primarily extremely low-, 
     very low-, and low-income families; and
       ``(2) economic development activities or community service 
     facilities, such as day care centers, workforce development 
     centers, and health care clinics, which in conjunction with 
     affordable housing activities implement a concerted strategy 
     to stabilize or revitalize a low-income area or underserved 
     rural area.
       ``(d) Federal Assistance.--All assistance provided using 
     amounts in the Capital Magnet Fund shall be considered to be 
     Federal financial assistance.
       ``(e) Eligible Grantees.--A grant under this section may be 
     made, pursuant to such requirements as the Secretary of the 
     Treasury shall establish for experience and success in 
     attracting private financing and carrying out the types of 
     activities proposed under the application of the grantee, 
     only to--
       ``(1) a Treasury certified community development financial 
     institution; or
       ``(2) a nonprofit organization having as 1 of its principal 
     purposes the development or management of affordable housing.
       ``(f) Eligible Uses.--Grant amounts awarded from the 
     Capital Magnet Fund pursuant to this section may be used for 
     the purposes described in paragraphs (1) and (2) of 
     subsection (c), including for the following uses:
       ``(1) To provide loan loss reserves.
       ``(2) To capitalize a revolving loan fund.
       ``(3) To capitalize an affordable housing fund.
       ``(4) To capitalize a fund to support activities described 
     in subsection (c)(2).
       ``(5) For risk-sharing loans.
       ``(g) Applications.--
       ``(1) In general.--The Secretary of the Treasury shall 
     provide, in a competitive application

[[Page 15909]]

     process established by regulation, for eligible grantees 
     under subsection (e) to submit applications for Capital 
     Magnet Fund grants to the Secretary at such time and in such 
     manner as the Secretary shall determine.
       ``(2) Content of application.--The application required 
     under paragraph (1) shall include a detailed description of--
       ``(A) the types of affordable housing, economic, and 
     community revitalization projects that support or sustain 
     residents of an affordable housing project funded by a grant 
     under this section for which such grant amounts would be 
     used, including the proposed use of eligible grants as 
     authorized under this section;
       ``(B) the types, sources, and amounts of other funding for 
     such projects; and
       ``(C) the expected time frame of any grant used for such 
     project.
       ``(h) Grant Limitation.--
       ``(1) In general.--Any 1 eligible grantee and its 
     subsidiaries and affiliates may not be awarded more than 15 
     percent of the aggregate funds available for grants during 
     any year from the Capital Magnet Fund.
       ``(2) Geographic diversity.--
       ``(A) Goal.--The Secretary of the Treasury shall seek to 
     fund activities in geographically diverse areas of economic 
     distress, including metropolitan and underserved rural areas 
     in every State.
       ``(B) Diversity defined.--For purposes of this paragraph, 
     geographic diversity includes those areas that meet objective 
     criteria of economic distress developed by the Secretary of 
     the Treasury, which may include--
       ``(i) the percentage of low-income families or the extent 
     of poverty;
       ``(ii) the rate of unemployment or underemployment;
       ``(iii) extent of blight and disinvestment;
       ``(iv) projects that target extremely low-, very low-, and 
     low-income families in or outside a designated economic 
     distress area; or
       ``(v) any other criteria designated by the Secretary of the 
     Treasury.
       ``(3) Leverage of funds.--Each grant from the Capital 
     Magnet Fund awarded under this section shall be reasonably 
     expected to result in eligible housing, or economic and 
     community development projects that support or sustain an 
     affordable housing project funded by a grant under this 
     section whose aggregate costs total at least 10 times the 
     grant amount.
       ``(4) Commitment for use deadline.--Amounts made available 
     for grants under this section shall be committed for use 
     within 2 years of the date of such allocation. The Secretary 
     of the Treasury shall recapture into the Capital Magnet Fund 
     any amounts not so used or committed for use and allocate 
     such amounts in the first year after such recapture.
       ``(5) Lobbying restrictions.--No assistance or amounts made 
     available under this section may be expended by an eligible 
     grantee to pay any person to influence or attempt to 
     influence any agency, elected official, officer or employee 
     of a State or local government in connection with the making, 
     award, extension, continuation, renewal, amendment, or 
     modification of any State or local government contract, 
     grant, loan, or cooperative agreement as such terms are 
     defined in section 1352 of title 31, United States Code.
       ``(6) Prohibition of consideration of use for meeting 
     housing goals or duty to serve.--In determining the 
     compliance of the enterprises with the housing goals under 
     this section and the duty to serve underserved markets under 
     section 1335, the Director of the Federal Housing Finance 
     Agency may not consider any Capital Magnet Fund amounts used 
     under this section for eligible activities under subsection 
     (f). The Director of the Federal Housing Finance Agency shall 
     give credit toward the achievement of such housing goals and 
     such duty to serve underserved markets to purchases by the 
     enterprises of mortgages for housing that receives funding 
     from Capital Magnet Fund grant amounts, but only to the 
     extent that such purchases by the enterprises are funded 
     other than with such grant amounts.
       ``(7) Accountability of recipients and grantees.--
       ``(A) Tracking of funds.--The Secretary of the Treasury 
     shall--
       ``(i) require each grantee to develop and maintain a system 
     to ensure that each recipient of assistance from the Capital 
     Magnet Fund uses such amounts in accordance with this 
     section, the regulations issued under this section, and any 
     requirements or conditions under which such amounts were 
     provided; and
       ``(ii) establish minimum requirements for agreements, 
     between the grantee and the Capital Magnet Fund, regarding 
     assistance from the Capital Magnet Fund, which shall 
     include--

       ``(I) appropriate periodic financial and project reporting, 
     record retention, and audit requirements for the duration of 
     the grant to the recipient to ensure compliance with the 
     limitations and requirements of this section and the 
     regulations under this section; and
       ``(II) any other requirements that the Secretary determines 
     are necessary to ensure appropriate grant administration and 
     compliance.

       ``(B) Misuse of funds.--If the Secretary of the Treasury 
     determines, after reasonable notice and opportunity for 
     hearing, that a grantee has failed to comply substantially 
     with any provision of this section and until the Secretary is 
     satisfied that there is no longer any such failure to comply, 
     the Secretary shall--
       ``(i) reduce the amount of assistance under this section to 
     the grantee by an amount equal to the amount of Capital 
     Magnet Fund grant amounts which were not used in accordance 
     with this section;
       ``(ii) require the grantee to repay the Secretary any 
     amount of the Capital Magnet Fund grant amounts which were 
     not used in accordance with this section;
       ``(iii) limit the availability of assistance under this 
     section to the grantee to activities or recipients not 
     affected by such failure to comply; or
       ``(iv) terminate any assistance under this section to the 
     grantee.
       ``(i) Periodic Reports.--
       ``(1) In general.--The Secretary of the Treasury shall 
     submit a report, on a periodic basis, to the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives describing the activities to be funded under 
     this section.
       ``(2) Reports available to public.--The Secretary of the 
     Treasury shall make the reports required under paragraph (1) 
     publicly available.
       ``(j) Regulations.--
       ``(1) In general.--The Secretary of the Treasury shall 
     issue regulations to carry out this section.
       ``(2) Required contents.--The regulations issued under this 
     subsection shall include--
       ``(A) authority for the Secretary to audit, provide for an 
     audit, or otherwise verify an enterprise's activities, to 
     ensure compliance with this section;
       ``(B) a requirement that the Secretary ensure that the 
     allocation of each enterprise is audited not less than 
     annually to ensure compliance with this section; and
       ``(C) requirements for a process for application to, and 
     selection by, the Secretary for activities to be funded with 
     amounts from the Capital Magnet Fund, which shall provide 
     that--
       ``(i) funds be fairly distributed to urban, suburban, and 
     rural areas; and
       ``(ii) selection shall be based upon specific criteria, 
     including a prioritization of funding based upon--

       ``(I) the ability to use such funds to generate additional 
     investments;
       ``(II) affordable housing need (taking into account the 
     distinct needs of different regions of the country); and
       ``(III) ability to obligate amounts and undertake 
     activities so funded in a timely manner.''.

     SEC. 1132. FINANCIAL EDUCATION AND COUNSELING.

       (a) Goals.--Financial education and counseling under this 
     section shall have the goal of--
       (1) increasing the financial knowledge and decision making 
     capabilities of prospective homebuyers;
       (2) assisting prospective homebuyers to develop monthly 
     budgets, build personal savings, finance or plan for major 
     purchases, reduce their debt, improve their financial 
     stability, and set and reach their financial goals;
       (3) helping prospective homebuyers to improve their credit 
     scores by understanding the relationship between their credit 
     histories and their credit scores; and
       (4) educating prospective homebuyers about the options 
     available to build savings for short- and long-term goals.
       (b) Grants.--
       (1) In general.--The Secretary of the Treasury (in this 
     section referred to as the ``Secretary'') shall make grants 
     to eligible organizations to enable such organizations to 
     provide a range of financial education and counseling 
     services to prospective homebuyers.
       (2) Selection.--The Secretary shall select eligible 
     organizations to receive assistance under this section based 
     on their experience and ability to provide financial 
     education and counseling services that result in documented 
     positive behavioral changes.
       (c) Eligible Organizations.--
       (1) In general.--For purposes of this section, the term 
     ``eligible organization'' means an organization that is--
       (A) certified in accordance with section 106(e)(1) of the 
     Housing and Urban Development Act of 1968 (12 U.S.C. 
     1701x(e)); or
       (B) certified by the Office of Financial Education of the 
     Department of the Treasury for purposes of this section, in 
     accordance with paragraph (2).
       (2) OFE certification.--To be certified by the Office of 
     Financial Education for purposes of this section, an eligible 
     organization shall be--
       (A) a housing counseling agency certified by the Secretary 
     of Housing and Urban Development under section 106(e) of the 
     Housing and Urban Development Act of 1968;
       (B) a State, local, or tribal government agency;
       (C) a community development financial institution (as 
     defined in section 103(5) of the Community Development 
     Banking and Financial Institutions Act of 1994 (12 U.S.C. 
     4702(5)) or a credit union; or
       (D) any collaborative effort of entities described in any 
     of subparagraphs (A) through (C).
       (d) Authority for Pilot Projects.--
       (1) In general.--The Secretary of the Treasury shall 
     authorize not more than 5 pilot project grants to eligible 
     organizations under subsection (c) in order to--
       (A) carry out the services under this section; and
       (B) provide such other services that will improve the 
     financial stability and economic condition of low- and 
     moderate-income and low-wealth individuals.
       (2) Goal.--The goal of the pilot project grants under this 
     subsection is to--

[[Page 15910]]

       (A) identify successful methods resulting in positive 
     behavioral change for financial empowerment; and
       (B) establish program models for organizations to carry out 
     effective counseling services.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary such sums as are 
     necessary to carry out this section and for the provision of 
     additional financial educational services.
       (f) Study and Report on Effectiveness and Impact.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study on the effectiveness and impact 
     of the grant program established under this section. Not 
     later than 3 years after the date of enactment of this Act, 
     the Comptroller General shall submit a report on the results 
     of such study to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives.
       (2) Content of study.--The study required under paragraph 
     (1) shall include an evaluation of the following:
       (A) The effectiveness of the grant program established 
     under this section in improving the financial situation of 
     homeowners and prospective homebuyers served by the grant 
     program.
       (B) The extent to which financial education and counseling 
     services have resulted in positive behavioral changes.
       (C) The effectiveness and quality of the eligible 
     organizations providing financial education and counseling 
     services under the grant program.
       (g) Regulations.--The Secretary is authorized to promulgate 
     such regulations as may be necessary to implement and 
     administer the grant program authorized by this section.

     SEC. 1133. TRANSFER AND RIGHTS OF CERTAIN HUD EMPLOYEES.

       (a) Transfer.--Each employee of the Department of Housing 
     and Urban Development whose position responsibilities 
     primarily involve the establishment and enforcement of the 
     housing goals under subpart B of part 2 of subtitle A of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4561 et seq.) shall be transferred to 
     the Federal Housing Finance Agency for employment, not later 
     than the effective date of the Federal Housing Finance 
     Regulatory Reform Act of 2008, and such transfer shall be 
     deemed a transfer of function for purposes of section 3503 of 
     title 5, United States Code.
       (b) Guaranteed Positions.--
       (1) In general.--Each employee transferred under subsection 
     (a) shall be guaranteed a position with the same status, 
     tenure, grade, and pay as that held on the day immediately 
     preceding the transfer.
       (2) No involuntary separation or reduction.--An employee 
     transferred under subsection (a) holding a permanent position 
     on the day immediately preceding the transfer may not be 
     involuntarily separated or reduced in grade or compensation 
     during the 12-month period beginning on the date of transfer, 
     except for cause, or, in the case of a temporary employee, 
     separated in accordance with the terms of the appointment of 
     the employee.
       (c) Appointment Authority for Excepted and Senior Executive 
     Service Employees.--
       (1) In general.--In the case of an employee occupying a 
     position in the excepted service or the Senior Executive 
     Service, any appointment authority established under law or 
     by regulations of the Office of Personnel Management for 
     filling such position shall be transferred, subject to 
     paragraph (2).
       (2) Decline of transfer.--The Director may decline a 
     transfer of authority under paragraph (1) to the extent that 
     such authority relates to--
       (A) a position excepted from the competitive service 
     because of its confidential, policymaking, policy-
     determining, or policy-advocating character; or
       (B) a noncareer position in the Senior Executive Service 
     (within the meaning of section 3132(a)(7) of title 5, United 
     States Code).
       (d) Reorganization.--If the Director determines, after the 
     end of the 1-year period beginning on the effective date of 
     the Federal Housing Finance Regulatory Reform Act of 2008, 
     that a reorganization of the combined workforce is required, 
     that reorganization shall be deemed a major reorganization 
     for purposes of affording affected employee retirement under 
     section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States 
     Code.
       (e) Employee Benefit Programs.--
       (1) In general.--Any employee described under subsection 
     (a) accepting employment with the Agency as a result of a 
     transfer under subsection (a) may retain, for 12 months after 
     the date on which such transfer occurs, membership in any 
     employee benefit program of the Agency or the Department of 
     Housing and Urban Development, as applicable, including 
     insurance, to which such employee belongs on such effective 
     date, if--
       (A) the employee does not elect to give up the benefit or 
     membership in the program; and
       (B) the benefit or program is continued by the Director of 
     the Federal Housing Finance Agency.
       (2) Cost differential.--
       (A) In general.--The difference in the costs between the 
     benefits which would have been provided by the Department of 
     Housing and Urban Development and those provided by this 
     section shall be paid by the Director.
       (B) Health insurance.--If any employee elects to give up 
     membership in a health insurance program or the health 
     insurance program is not continued by the Director, the 
     employee shall be permitted to select an alternate Federal 
     health insurance program not later than 30 days after the 
     date of such election or notice, without regard to any other 
     regularly scheduled open season.

                  Subtitle C--Prompt Corrective Action

     SEC. 1141. CRITICAL CAPITAL LEVELS.

       (a) In General.--Section 1363 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4613) is amended--
       (1) by striking ``For'' and inserting ``(a) Enterprises.--
     For''; and
       (2) by adding at the end the following new subsection:
       ``(b) Federal Home Loan Banks.--
       ``(1) In general.--For purposes of this subtitle, the 
     critical capital level for each Federal Home Loan Bank shall 
     be such amount of capital as the Director shall, by 
     regulation, require.
       ``(2) Consideration of other critical capital levels.--In 
     establishing the critical capital level under paragraph (1) 
     for the Federal Home Loan Banks, the Director shall take due 
     consideration of the critical capital level established under 
     subsection (a) for the enterprises, with such modifications 
     as the Director determines to be appropriate to reflect the 
     difference in operations between the banks and the 
     enterprises.''.
       (b) Regulations.--Not later than the expiration of the 180-
     day period beginning on the date of enactment of this Act, 
     the Director of the Federal Housing Finance Agency shall 
     issue regulations pursuant to section 1363(b) of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (as added by this section) establishing the critical 
     capital level under such section.

     SEC. 1142. CAPITAL CLASSIFICATIONS.

       (a) In General.--Section 1364 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4614) is amended--
       (1) in the heading for subsection (a) by striking ``In 
     General'' and inserting ``Enterprises'';
       (2) in subsection (c)--
       (A) by striking ``subsection (b)'' and inserting 
     ``subsection (c)'';
       (B) by striking ``enterprises'' and inserting ``regulated 
     entities''; and
       (C) by striking the last sentence;
       (3) by redesignating subsections (c) (as so amended by 
     paragraph (2) of this subsection) and (d) as subsections (d) 
     and (f), respectively;
       (4) by striking subsection (b) and inserting the following:
       ``(b) Federal Home Loan Banks.--
       ``(1) Establishment and criteria.--For purposes of this 
     subtitle, the Director shall, by regulation--
       ``(A) establish the capital classifications specified under 
     paragraph (2) for the Federal Home Loan Banks;
       ``(B) establish criteria for each such capital 
     classification based on the amount and types of capital held 
     by a bank and the risk-based, minimum, and critical capital 
     levels for the banks and taking due consideration of the 
     capital classifications established under subsection (a) for 
     the enterprises, with such modifications as the Director 
     determines to be appropriate to reflect the difference in 
     operations between the banks and the enterprises; and
       ``(C) shall classify the Federal Home Loan Banks according 
     to such capital classifications.
       ``(2) Classifications.--The capital classifications 
     specified under this paragraph are--
       ``(A) adequately capitalized;
       ``(B) undercapitalized;
       ``(C) significantly undercapitalized; and
       ``(D) critically undercapitalized.
       ``(c) Discretionary Classification.--
       ``(1) Grounds for reclassification.--The Director may 
     reclassify a regulated entity under paragraph (2) if--
       ``(A) at any time, the Director determines in writing that 
     the regulated entity is engaging in conduct that could result 
     in a rapid depletion of core or total capital or the value of 
     collateral pledged as security has decreased significantly or 
     that the value of the property subject to any mortgage held 
     by the regulated entity (or securitized in the case of an 
     enterprise) has decreased significantly;
       ``(B) after notice and an opportunity for hearing, the 
     Director determines that the regulated entity is in an unsafe 
     or unsound condition; or
       ``(C) pursuant to section 1371(b), the Director deems the 
     regulated entity to be engaging in an unsafe or unsound 
     practice.
       ``(2) Reclassification.--In addition to any other action 
     authorized under this title, including the reclassification 
     of a regulated entity for any reason not specified in this 
     subsection, if the Director takes any action described in 
     paragraph (1), the Director may classify a regulated entity--
       ``(A) as undercapitalized, if the regulated entity is 
     otherwise classified as adequately capitalized;
       ``(B) as significantly undercapitalized, if the regulated 
     entity is otherwise classified as undercapitalized; and
       ``(C) as critically undercapitalized, if the regulated 
     entity is otherwise classified as significantly 
     undercapitalized.''; and
       (5) by inserting after subsection (d) (as so redesignated 
     by paragraph (3) of this subsection), the following new 
     subsection:
       ``(e) Restriction on Capital Distributions.--
       ``(1) In general.--A regulated entity shall make no capital 
     distribution if, after making the distribution, the regulated 
     entity would be undercapitalized.

[[Page 15911]]

       ``(2) Exception.--Notwithstanding paragraph (1), the 
     Director may permit a regulated entity, to the extent 
     appropriate or applicable, to repurchase, redeem, retire, or 
     otherwise acquire shares or ownership interests if the 
     repurchase, redemption, retirement, or other acquisition--
       ``(A) is made in connection with the issuance of additional 
     shares or obligations of the regulated entity in at least an 
     equivalent amount; and
       ``(B) will reduce the financial obligations of the 
     regulated entity or otherwise improve the financial condition 
     of the entity.''.
       (b) Regulations.--Not later than the expiration of the 180-
     day period beginning on the date of enactment of this Act, 
     the Director of the Federal Housing Finance Agency shall 
     issue regulations to carry out section 1364(b) of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (as added by this section), relating to capital 
     classifications for the Federal Home Loan Banks.

     SEC. 1143. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED 
                   REGULATED ENTITIES.

       Section 1365 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4615) is 
     amended--
       (1) by striking ``the enterprise'' each place that term 
     appears and inserting ``the regulated entity'';
       (2) by striking ``An enterprise'' each place that term 
     appears and inserting ``A regulated entity'';
       (3) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity'';
       (4) in subsection (a)--
       (A) by redesignating paragraphs (1) and (2) as paragraphs 
     (2) and (3), respectively;
       (B) by inserting before paragraph (2), as redesignated, the 
     following:
       ``(1) Required monitoring.--The Director shall--
       ``(A) closely monitor the condition of any undercapitalized 
     regulated entity;
       ``(B) closely monitor compliance with the capital 
     restoration plan, restrictions, and requirements imposed on 
     an undercapitalized regulated entity under this section; and
       ``(C) periodically review the plan, restrictions, and 
     requirements applicable to an undercapitalized regulated 
     entity to determine whether the plan, restrictions, and 
     requirements are achieving the purpose of this section.''; 
     and
       (C) by adding at the end the following:
       ``(4) Restriction of asset growth.--An undercapitalized 
     regulated entity shall not permit its average total assets 
     during any calendar quarter to exceed its average total 
     assets during the preceding calendar quarter, unless--
       ``(A) the Director has accepted the capital restoration 
     plan of the regulated entity;
       ``(B) any increase in total assets is consistent with the 
     capital restoration plan; and
       ``(C) the ratio of tangible equity to assets of the 
     regulated entity increases during the calendar quarter at a 
     rate sufficient to enable the regulated entity to become 
     adequately capitalized within a reasonable time.
       ``(5) Prior approval of acquisitions and new activities.--
     An undercapitalized regulated entity shall not, directly or 
     indirectly, acquire any interest in any entity or engage in 
     any new activity, unless--
       ``(A) the Director has accepted the capital restoration 
     plan of the regulated entity, the regulated entity is 
     implementing the plan, and the Director determines that the 
     proposed action is consistent with and will further the 
     achievement of the plan; or
       ``(B) the Director determines that the proposed action will 
     further the purpose of this subtitle.'';
       (5) in subsection (b)--
       (A) in the subsection heading, by striking 
     ``Discretionary'';
       (B) in the matter preceding paragraph (1), by striking 
     ``may'' and inserting ``shall''; and
       (C) in paragraph (2)--
       (i) by striking ``make, in good faith, reasonable efforts 
     necessary to''; and
       (ii) by striking the period at the end and inserting ``in 
     any material respect.''; and
       (6) by striking subsection (c) and inserting the following:
       ``(c) Other Discretionary Safeguards.--The Director may 
     take, with respect to an undercapitalized regulated entity, 
     any of the actions authorized to be taken under section 1366 
     with respect to a significantly undercapitalized regulated 
     entity, if the Director determines that such actions are 
     necessary to carry out the purpose of this subtitle.''.

     SEC. 1144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
                   UNDERCAPITALIZED REGULATED ENTITIES.

       Section 1366 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4616) is 
     amended--
       (1) in subsection (a)(2), by striking ``undercapitalized 
     enterprise'' and inserting ``undercapitalized'';
       (2) by striking ``the enterprise'' each place that term 
     appears and inserting ``the regulated entity'';
       (3) by striking ``An enterprise'' each place that term 
     appears and inserting ``A regulated entity'';
       (4) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity'';
       (5) in subsection (b)--
       (A) in the subsection heading, by striking ``Discretionary 
     Supervisory'' and inserting ``Specific'';
       (B) in the matter preceding paragraph (1), by striking 
     ``may, at any time, take any'' and inserting ``shall carry 
     out this section by taking, at any time, 1 or more'';
       (C) by striking paragraph (6);
       (D) by redesignating paragraph (5) as paragraph (6);
       (E) by inserting after paragraph (4) the following:
       ``(5) Improvement of management.--Take 1 or more of the 
     following actions:
       ``(A) New election of board.--Order a new election for the 
     board of directors of the regulated entity.
       ``(B) Dismissal of directors or executive officers.--
     Require the regulated entity to dismiss from office any 
     director or executive officer who had held office for more 
     than 180 days immediately before the date on which the 
     regulated entity became undercapitalized. Dismissal under 
     this subparagraph shall not be construed to be a removal 
     pursuant to the enforcement powers of the Director under 
     section 1377.
       ``(C) Employ qualified executive officers.--Require the 
     regulated entity to employ qualified executive officers (who, 
     if the Director so specifies, shall be subject to approval by 
     the Director).''; and
       (F) by adding at the end the following:
       ``(7) Other action.--Require the regulated entity to take 
     any other action that the Director determines will better 
     carry out the purpose of this section than any of the other 
     actions specified in this subsection.''; and
       (6) by striking subsection (c) and inserting the following:
       ``(c) Restriction on Compensation of Executive Officers.--A 
     regulated entity that is classified as significantly 
     undercapitalized in accordance with section 1364 may not, 
     without prior written approval by the Director--
       ``(1) pay any bonus to any executive officer; or
       ``(2) provide compensation to any executive officer at a 
     rate exceeding the average rate of compensation of that 
     officer (excluding bonuses, stock options, and profit 
     sharing) during the 12 calendar months preceding the calendar 
     month in which the regulated entity became significantly 
     undercapitalized.''.

     SEC. 1145. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED 
                   REGULATED ENTITIES.

       (a) In General.--Section 1367 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4617) is amended to read as follows:

     ``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED 
                   REGULATED ENTITIES.

       ``(a) Appointment of the Agency as Conservator or 
     Receiver.--
       ``(1) In general.--Notwithstanding any other provision of 
     Federal or State law, the Director may appoint the Agency as 
     conservator or receiver for a regulated entity in the manner 
     provided under paragraph (2) or (4). All references to the 
     conservator or receiver under this section are references to 
     the Agency acting as conservator or receiver.
       ``(2) Discretionary appointment.--The Agency may, at the 
     discretion of the Director, be appointed conservator or 
     receiver for the purpose of reorganizing, rehabilitating, or 
     winding up the affairs of a regulated entity.
       ``(3) Grounds for discretionary appointment of conservator 
     or receiver.--The grounds for appointing conservator or 
     receiver for any regulated entity under paragraph (2) are as 
     follows:
       ``(A) Substantial dissipation.--Substantial dissipation of 
     assets or earnings due to--
       ``(i) any violation of any provision of Federal or State 
     law; or
       ``(ii) any unsafe or unsound practice.
       ``(B) Unsafe or unsound condition.--An unsafe or unsound 
     condition to transact business.
       ``(C) Cease and desist orders.--Any willful violation of a 
     cease and desist order that has become final.
       ``(D) Concealment.--Any concealment of the books, papers, 
     records, or assets of the regulated entity, or any refusal to 
     submit the books, papers, records, or affairs of the 
     regulated entity, for inspection to any examiner or to any 
     lawful agent of the Director.
       ``(E) Inability to meet obligations.--The regulated entity 
     is likely to be unable to pay its obligations or meet the 
     demands of its creditors in the normal course of business.
       ``(F) Losses.--The regulated entity has incurred or is 
     likely to incur losses that will deplete all or substantially 
     all of its capital, and there is no reasonable prospect for 
     the regulated entity to become adequately capitalized (as 
     defined in section 1364(a)(1)).
       ``(G) Violations of law.--Any violation of any law or 
     regulation, or any unsafe or unsound practice or condition 
     that is likely to--
       ``(i) cause insolvency or substantial dissipation of assets 
     or earnings; or
       ``(ii) weaken the condition of the regulated entity.
       ``(H) Consent.--The regulated entity, by resolution of its 
     board of directors or its shareholders or members, consents 
     to the appointment.
       ``(I) Undercapitalization.--The regulated entity is 
     undercapitalized or significantly undercapitalized (as 
     defined in section 1364(a)(3)), and--
       ``(i) has no reasonable prospect of becoming adequately 
     capitalized;
       ``(ii) fails to become adequately capitalized, as required 
     by--

       ``(I) section 1365(a)(1) with respect to a regulated 
     entity; or
       ``(II) section 1366(a)(1) with respect to a significantly 
     undercapitalized regulated entity;

[[Page 15912]]

       ``(iii) fails to submit a capital restoration plan 
     acceptable to the Agency within the time prescribed under 
     section 1369C; or
       ``(iv) materially fails to implement a capital restoration 
     plan submitted and accepted under section 1369C.
       ``(J) Critical undercapitalization.--The regulated entity 
     is critically undercapitalized, as defined in section 
     1364(a)(4).
       ``(K) Money laundering.--The Attorney General notifies the 
     Director in writing that the regulated entity has been found 
     guilty of a criminal offense under section 1956 or 1957 of 
     title 18, United States Code, or section 5322 or 5324 of 
     title 31, United States Code.
       ``(4) Mandatory receivership.--
       ``(A) In general.--The Director shall appoint the Agency as 
     receiver for a regulated entity if the Director determines, 
     in writing, that--
       ``(i) the assets of the regulated entity are, and during 
     the preceding 60 calendar days have been, less than the 
     obligations of the regulated entity to its creditors and 
     others; or
       ``(ii) the regulated entity is not, and during the 
     preceding 60 calendar days has not been, generally paying the 
     debts of the regulated entity (other than debts that are the 
     subject of a bona fide dispute) as such debts become due.
       ``(B) Periodic determination required for critically 
     undercapitalized regulated entity.--If a regulated entity is 
     critically undercapitalized, the Director shall make a 
     determination, in writing, as to whether the regulated entity 
     meets the criteria specified in clause (i) or (ii) of 
     subparagraph (A)--
       ``(i) not later than 30 calendar days after the regulated 
     entity initially becomes critically undercapitalized; and
       ``(ii) at least once during each succeeding 30-calendar day 
     period.
       ``(C) Determination not required if receivership already in 
     place.--Subparagraph (B) does not apply with respect to a 
     regulated entity in any period during which the Agency serves 
     as receiver for the regulated entity.
       ``(D) Receivership terminates conservatorship.--The 
     appointment of the Agency as receiver of a regulated entity 
     under this section shall immediately terminate any 
     conservatorship established for the regulated entity under 
     this title.
       ``(5) Judicial review.--
       ``(A) In general.--If the Agency is appointed conservator 
     or receiver under this section, the regulated entity may, 
     within 30 days of such appointment, bring an action in the 
     United States district court for the judicial district in 
     which the home office of such regulated entity is located, or 
     in the United States District Court for the District of 
     Columbia, for an order requiring the Agency to remove itself 
     as conservator or receiver.
       ``(B) Review.--Upon the filing of an action under 
     subparagraph (A), the court shall, upon the merits, dismiss 
     such action or direct the Agency to remove itself as such 
     conservator or receiver.
       ``(6) Directors not liable for acquiescing in appointment 
     of conservator or receiver.--The members of the board of 
     directors of a regulated entity shall not be liable to the 
     shareholders or creditors of the regulated entity for 
     acquiescing in or consenting in good faith to the appointment 
     of the Agency as conservator or receiver for that regulated 
     entity.
       ``(7) Agency not subject to any other federal agency.--When 
     acting as conservator or receiver, the Agency shall not be 
     subject to the direction or supervision of any other agency 
     of the United States or any State in the exercise of the 
     rights, powers, and privileges of the Agency.
       ``(b) Powers and Duties of the Agency as Conservator or 
     Receiver.--
       ``(1) Rulemaking authority of the agency.--The Agency may 
     prescribe such regulations as the Agency determines to be 
     appropriate regarding the conduct of conservatorships or 
     receiverships.
       ``(2) General powers.--
       ``(A) Successor to regulated entity.--The Agency shall, as 
     conservator or receiver, and by operation of law, immediately 
     succeed to--
       ``(i) all rights, titles, powers, and privileges of the 
     regulated entity, and of any stockholder, officer, or 
     director of such regulated entity with respect to the 
     regulated entity and the assets of the regulated entity; and
       ``(ii) title to the books, records, and assets of any other 
     legal custodian of such regulated entity.
       ``(B) Operate the regulated entity.--The Agency may, as 
     conservator or receiver--
       ``(i) take over the assets of and operate the regulated 
     entity with all the powers of the shareholders, the 
     directors, and the officers of the regulated entity and 
     conduct all business of the regulated entity;
       ``(ii) collect all obligations and money due the regulated 
     entity;
       ``(iii) perform all functions of the regulated entity in 
     the name of the regulated entity which are consistent with 
     the appointment as conservator or receiver;
       ``(iv) preserve and conserve the assets and property of the 
     regulated entity; and
       ``(v) provide by contract for assistance in fulfilling any 
     function, activity, action, or duty of the Agency as 
     conservator or receiver.
       ``(C) Functions of officers, directors, and shareholders of 
     a regulated entity.--The Agency may, by regulation or order, 
     provide for the exercise of any function by any stockholder, 
     director, or officer of any regulated entity for which the 
     Agency has been named conservator or receiver.
       ``(D) Powers as conservator.--The Agency may, as 
     conservator, take such action as may be--
       ``(i) necessary to put the regulated entity in a sound and 
     solvent condition; and
       ``(ii) appropriate to carry on the business of the 
     regulated entity and preserve and conserve the assets and 
     property of the regulated entity.
       ``(E) Additional powers as receiver.--In any case in which 
     the Agency is acting as receiver, the Agency shall place the 
     regulated entity in liquidation and proceed to realize upon 
     the assets of the regulated entity in such manner as the 
     Agency deems appropriate, including through the sale of 
     assets, the transfer of assets to a limited-life regulated 
     entity established under subsection (i), or the exercise of 
     any other rights or privileges granted to the Agency under 
     this paragraph.
       ``(F) Organization of new enterprise.--The Agency shall, as 
     receiver for an enterprise, organize a successor enterprise 
     that will operate pursuant to subsection (i).
       ``(G) Transfer or sale of assets and liabilities.--The 
     Agency may, as conservator or receiver, transfer or sell any 
     asset or liability of the regulated entity in default, and 
     may do so without any approval, assignment, or consent with 
     respect to such transfer or sale.
       ``(H) Payment of valid obligations.--The Agency, as 
     conservator or receiver, shall, to the extent of proceeds 
     realized from the performance of contracts or sale of the 
     assets of a regulated entity, pay all valid obligations of 
     the regulated entity that are due and payable at the time of 
     the appointment of the Agency as conservator or receiver, in 
     accordance with the prescriptions and limitations of this 
     section.
       ``(I) Subpoena authority.--
       ``(i) In general.--

       ``(I) Agency authority.--The Agency may, as conservator or 
     receiver, and for purposes of carrying out any power, 
     authority, or duty with respect to a regulated entity 
     (including determining any claim against the regulated entity 
     and determining and realizing upon any asset of any person in 
     the course of collecting money due the regulated entity), 
     exercise any power established under section 1348.
       ``(II) Applicability of law.--The provisions of section 
     1348 shall apply with respect to the exercise of any power 
     under this subparagraph, in the same manner as such 
     provisions apply under that section.

       ``(ii) Subpoena.--A subpoena or subpoena duces tecum may be 
     issued under clause (i) only by, or with the written approval 
     of, the Director, or the designee of the Director.
       ``(iii) Rule of construction.--This subsection shall not be 
     construed to limit any rights that the Agency, in any 
     capacity, might otherwise have under section 1317 or 1379B.
       ``(J) Incidental powers.--The Agency may, as conservator or 
     receiver--
       ``(i) exercise all powers and authorities specifically 
     granted to conservators or receivers, respectively, under 
     this section, and such incidental powers as shall be 
     necessary to carry out such powers; and
       ``(ii) take any action authorized by this section, which 
     the Agency determines is in the best interests of the 
     regulated entity or the Agency.
       ``(K) Other provisions.--
       ``(i) Shareholders and creditors of failed regulated 
     entity.--Notwithstanding any other provision of law, the 
     appointment of the Agency as receiver for a regulated entity 
     pursuant to paragraph (2) or (4) of subsection (a) and its 
     succession, by operation of law, to the rights, titles, 
     powers, and privileges described in subsection (b)(2)(A) 
     shall terminate all rights and claims that the stockholders 
     and creditors of the regulated entity may have against the 
     assets or charter of the regulated entity or the Agency 
     arising as a result of their status as stockholders or 
     creditors, except for their right to payment, resolution, or 
     other satisfaction of their claims, as permitted under 
     subsections (b)(9), (c), and (e).
       ``(ii) Assets of regulated entity.--Notwithstanding any 
     other provision of law, for purposes of this section, the 
     charter of a regulated entity shall not be considered an 
     asset of the regulated entity.
       ``(3) Authority of receiver to determine claims.--
       ``(A) In general.--The Agency may, as receiver, determine 
     claims in accordance with the requirements of this subsection 
     and any regulations prescribed under paragraph (4).
       ``(B) Notice requirements.--The receiver, in any case 
     involving the liquidation or winding up of the affairs of a 
     closed regulated entity, shall--
       ``(i) promptly publish a notice to the creditors of the 
     regulated entity to present their claims, together with 
     proof, to the receiver by a date specified in the notice 
     which shall be not less than 90 days after the date of 
     publication of such notice; and
       ``(ii) republish such notice approximately 1 month and 2 
     months, respectively, after the date of publication under 
     clause (i).
       ``(C) Mailing required.--The receiver shall mail a notice 
     similar to the notice published under subparagraph (B)(i) at 
     the time of such publication to any creditor shown on the 
     books of the regulated entity--
       ``(i) at the last address of the creditor appearing in such 
     books; or
       ``(ii) upon discovery of the name and address of a claimant 
     not appearing on the books of the regulated entity, within 30 
     days after the discovery of such name and address.
       ``(4) Rulemaking authority relating to determination of 
     claims.--Subject to subsection (c), the Director may 
     prescribe regulations regarding the allowance or disallowance 
     of claims

[[Page 15913]]

     by the receiver and providing for administrative 
     determination of claims and review of such determination.
       ``(5) Procedures for determination of claims.--
       ``(A) Determination period.--
       ``(i) In general.--Before the end of the 180-day period 
     beginning on the date on which any claim against a regulated 
     entity is filed with the Agency as receiver, the Agency shall 
     determine whether to allow or disallow the claim and shall 
     notify the claimant of any determination with respect to such 
     claim.
       ``(ii) Extension of time.--The period described in clause 
     (i) may be extended by a written agreement between the 
     claimant and the Agency.
       ``(iii) Mailing of notice sufficient.--The requirements of 
     clause (i) shall be deemed to be satisfied if the notice of 
     any determination with respect to any claim is mailed to the 
     last address of the claimant which appears--

       ``(I) on the books of the regulated entity;
       ``(II) in the claim filed by the claimant; or
       ``(III) in documents submitted in proof of the claim.

       ``(iv) Contents of notice of disallowance.--If any claim 
     filed under clause (i) is disallowed, the notice to the 
     claimant shall contain--

       ``(I) a statement of each reason for the disallowance; and
       ``(II) the procedures available for obtaining agency review 
     of the determination to disallow the claim or judicial 
     determination of the claim.

       ``(B) Allowance of proven claim.--The receiver shall allow 
     any claim received on or before the date specified in the 
     notice published under paragraph (3)(B)(i) by the receiver 
     from any claimant which is proved to the satisfaction of the 
     receiver.
       ``(C) Disallowance of claims filed after filing period.--
     Claims filed after the date specified in the notice published 
     under paragraph (3)(B)(i), or the date specified under 
     paragraph (3)(C), shall be disallowed and such disallowance 
     shall be final.
       ``(D) Authority to disallow claims.--
       ``(i) In general.--The receiver may disallow any portion of 
     any claim by a creditor or claim of security, preference, or 
     priority which is not proved to the satisfaction of the 
     receiver.
       ``(ii) Payments to less than fully secured creditors.--In 
     the case of a claim of a creditor against a regulated entity 
     which is secured by any property or other asset of such 
     regulated entity, the receiver--

       ``(I) may treat the portion of such claim which exceeds an 
     amount equal to the fair market value of such property or 
     other asset as an unsecured claim against the regulated 
     entity; and
       ``(II) may not make any payment with respect to such 
     unsecured portion of the claim, other than in connection with 
     the disposition of all claims of unsecured creditors of the 
     regulated entity.

       ``(iii) Exceptions.--No provision of this paragraph shall 
     apply with respect to--

       ``(I) any extension of credit from any Federal Reserve 
     Bank, Federal Home Loan Bank, or the United States Treasury; 
     or
       ``(II) any security interest in the assets of the regulated 
     entity securing any such extension of credit.

       ``(E) No judicial review of determination pursuant to 
     subparagraph (d).--No court may review the determination of 
     the Agency under subparagraph (D) to disallow a claim.
       ``(F) Legal effect of filing.--
       ``(i) Statute of limitation tolled.--For purposes of any 
     applicable statute of limitations, the filing of a claim with 
     the receiver shall constitute a commencement of an action.
       ``(ii) No prejudice to other actions.--Subject to paragraph 
     (10), the filing of a claim with the receiver shall not 
     prejudice any right of the claimant to continue any action 
     which was filed before the date of the appointment of the 
     receiver, subject to the determination of claims by the 
     receiver.
       ``(6) Provision for judicial determination of claims.--
       ``(A) In general.--The claimant may file suit on a claim 
     (or continue an action commenced before the appointment of 
     the receiver) in the district or territorial court of the 
     United States for the district within which the principal 
     place of business of the regulated entity is located or the 
     United States District Court for the District of Columbia 
     (and such court shall have jurisdiction to hear such claim), 
     before the end of the 60-day period beginning on the earlier 
     of--
       ``(i) the end of the period described in paragraph 
     (5)(A)(i) with respect to any claim against a regulated 
     entity for which the Agency is receiver; or
       ``(ii) the date of any notice of disallowance of such claim 
     pursuant to paragraph (5)(A)(i).
       ``(B) Statute of limitations.--A claim shall be deemed to 
     be disallowed (other than any portion of such claim which was 
     allowed by the receiver), and such disallowance shall be 
     final, and the claimant shall have no further rights or 
     remedies with respect to such claim, if the claimant fails, 
     before the end of the 60-day period described under 
     subparagraph (A), to file suit on such claim (or continue an 
     action commenced before the appointment of the receiver).
       ``(7) Review of claims.--
       ``(A) Other review procedures.--
       ``(i) In general.--The Agency shall establish such 
     alternative dispute resolution processes as may be 
     appropriate for the resolution of claims filed under 
     paragraph (5)(A)(i).
       ``(ii) Criteria.--In establishing alternative dispute 
     resolution processes, the Agency shall strive for procedures 
     which are expeditious, fair, independent, and low cost.
       ``(iii) Voluntary binding or nonbinding procedures.--The 
     Agency may establish both binding and nonbinding processes 
     under this subparagraph, which may be conducted by any 
     government or private party. All parties, including the 
     claimant and the Agency, must agree to the use of the process 
     in a particular case.
       ``(B) Consideration of incentives.--The Agency shall seek 
     to develop incentives for claimants to participate in the 
     alternative dispute resolution process.
       ``(8) Expedited determination of claims.--
       ``(A) Establishment required.--The Agency shall establish a 
     procedure for expedited relief outside of the routine claims 
     process established under paragraph (5) for claimants who--
       ``(i) allege the existence of legally valid and enforceable 
     or perfected security interests in assets of any regulated 
     entity for which the Agency has been appointed receiver; and
       ``(ii) allege that irreparable injury will occur if the 
     routine claims procedure is followed.
       ``(B) Determination period.--Before the end of the 90-day 
     period beginning on the date on which any claim is filed in 
     accordance with the procedures established under subparagraph 
     (A), the Director shall--
       ``(i) determine--

       ``(I) whether to allow or disallow such claim; or
       ``(II) whether such claim should be determined pursuant to 
     the procedures established under paragraph (5); and

       ``(ii) notify the claimant of the determination, and if the 
     claim is disallowed, provide a statement of each reason for 
     the disallowance and the procedure for obtaining agency 
     review or judicial determination.
       ``(C) Period for filing or renewing suit.--Any claimant who 
     files a request for expedited relief shall be permitted to 
     file a suit, or to continue a suit filed before the date of 
     appointment of the receiver, seeking a determination of the 
     rights of the claimant with respect to such security interest 
     after the earlier of--
       ``(i) the end of the 90-day period beginning on the date of 
     the filing of a request for expedited relief; or
       ``(ii) the date on which the Agency denies the claim.
       ``(D) Statute of limitations.--If an action described under 
     subparagraph (C) is not filed, or the motion to renew a 
     previously filed suit is not made, before the end of the 30-
     day period beginning on the date on which such action or 
     motion may be filed under subparagraph (B), the claim shall 
     be deemed to be disallowed as of the end of such period 
     (other than any portion of such claim which was allowed by 
     the receiver), such disallowance shall be final, and the 
     claimant shall have no further rights or remedies with 
     respect to such claim.
       ``(E) Legal effect of filing.--
       ``(i) Statute of limitation tolled.--For purposes of any 
     applicable statute of limitations, the filing of a claim with 
     the receiver shall constitute a commencement of an action.
       ``(ii) No prejudice to other actions.--Subject to paragraph 
     (10), the filing of a claim with the receiver shall not 
     prejudice any right of the claimant to continue any action 
     that was filed before the appointment of the receiver, 
     subject to the determination of claims by the receiver.
       ``(9) Payment of claims.--
       ``(A) In general.--The receiver may, in the discretion of 
     the receiver, and to the extent that funds are available from 
     the assets of the regulated entity, pay creditor claims, in 
     such manner and amounts as are authorized under this section, 
     which are--
       ``(i) allowed by the receiver;
       ``(ii) approved by the Agency pursuant to a final 
     determination pursuant to paragraph (7) or (8); or
       ``(iii) determined by the final judgment of any court of 
     competent jurisdiction.
       ``(B) Agreements against the interest of the agency.--No 
     agreement that tends to diminish or defeat the interest of 
     the Agency in any asset acquired by the Agency as receiver 
     under this section shall be valid against the Agency unless 
     such agreement is in writing and executed by an authorized 
     officer or representative of the regulated entity.
       ``(C) Payment of dividends on claims.--The receiver may, in 
     the sole discretion of the receiver, pay from the assets of 
     the regulated entity dividends on proved claims at any time, 
     and no liability shall attach to the Agency by reason of any 
     such payment, for failure to pay dividends to a claimant 
     whose claim is not proved at the time of any such payment.
       ``(D) Rulemaking authority of the director.--The Director 
     may prescribe such rules, including definitions of terms, as 
     the Director deems appropriate to establish a single uniform 
     interest rate for, or to make payments of post-insolvency 
     interest to creditors holding proven claims against the 
     receivership estates of the regulated entity, following 
     satisfaction by the receiver of the principal amount of all 
     creditor claims.
       ``(10) Suspension of legal actions.--
       ``(A) In general.--After the appointment of a conservator 
     or receiver for a regulated entity, the conservator or 
     receiver may, in any judicial action or proceeding to which 
     such regulated entity is or becomes a party, request a stay 
     for a period not to exceed--
       ``(i) 45 days, in the case of any conservator; and
       ``(ii) 90 days, in the case of any receiver.
       ``(B) Grant of stay by all courts required.--Upon receipt 
     of a request by the conservator or receiver under 
     subparagraph (A) for

[[Page 15914]]

     a stay of any judicial action or proceeding in any court with 
     jurisdiction of such action or proceeding, the court shall 
     grant such stay as to all parties.
       ``(11) Additional rights and duties.--
       ``(A) Prior final adjudication.--The Agency shall abide by 
     any final unappealable judgment of any court of competent 
     jurisdiction which was rendered before the appointment of the 
     Agency as conservator or receiver.
       ``(B) Rights and remedies of conservator or receiver.--In 
     the event of any appealable judgment, the Agency as 
     conservator or receiver--
       ``(i) shall have all of the rights and remedies available 
     to the regulated entity (before the appointment of such 
     conservator or receiver) and the Agency, including removal to 
     Federal court and all appellate rights; and
       ``(ii) shall not be required to post any bond in order to 
     pursue such remedies.
       ``(C) No attachment or execution.--No attachment or 
     execution may issue by any court upon assets in the 
     possession of the receiver, or upon the charter, of a 
     regulated entity for which the Agency has been appointed 
     receiver.
       ``(D) Limitation on judicial review.--Except as otherwise 
     provided in this subsection, no court shall have jurisdiction 
     over--
       ``(i) any claim or action for payment from, or any action 
     seeking a determination of rights with respect to, the assets 
     or charter of any regulated entity for which the Agency has 
     been appointed receiver; or
       ``(ii) any claim relating to any act or omission of such 
     regulated entity or the Agency as receiver.
       ``(E) Disposition of assets.--In exercising any right, 
     power, privilege, or authority as conservator or receiver in 
     connection with any sale or disposition of assets of a 
     regulated entity for which the Agency has been appointed 
     conservator or receiver, the Agency shall conduct its 
     operations in a manner which--
       ``(i) maximizes the net present value return from the sale 
     or disposition of such assets;
       ``(ii) minimizes the amount of any loss realized in the 
     resolution of cases; and
       ``(iii) ensures adequate competition and fair and 
     consistent treatment of offerors.
       ``(12) Statute of limitations for actions brought by 
     conservator or receiver.--
       ``(A) In general.--Notwithstanding any provision of any 
     contract, the applicable statute of limitations with regard 
     to any action brought by the Agency as conservator or 
     receiver shall be--
       ``(i) in the case of any contract claim, the longer of--

       ``(I) the 6-year period beginning on the date on which the 
     claim accrues; or
       ``(II) the period applicable under State law; and

       ``(ii) in the case of any tort claim, the longer of--

       ``(I) the 3-year period beginning on the date on which the 
     claim accrues; or
       ``(II) the period applicable under State law.

       ``(B) Determination of the date on which a claim accrues.--
     For purposes of subparagraph (A), the date on which the 
     statute of limitations begins to run on any claim described 
     in such subparagraph shall be the later of--
       ``(i) the date of the appointment of the Agency as 
     conservator or receiver; or
       ``(ii) the date on which the cause of action accrues.
       ``(13) Revival of expired state causes of action.--
       ``(A) In general.--In the case of any tort claim described 
     under clause (ii) for which the statute of limitations 
     applicable under State law with respect to such claim has 
     expired not more than 5 years before the appointment of the 
     Agency as conservator or receiver, the Agency may bring an 
     action as conservator or receiver on such claim without 
     regard to the expiration of the statute of limitations 
     applicable under State law.
       ``(B) Claims described.--A tort claim referred to under 
     clause (i) is a claim arising from fraud, intentional 
     misconduct resulting in unjust enrichment, or intentional 
     misconduct resulting in substantial loss to the regulated 
     entity.
       ``(14) Accounting and recordkeeping requirements.--
       ``(A) In general.--The Agency as conservator or receiver 
     shall, consistent with the accounting and reporting practices 
     and procedures established by the Agency, maintain a full 
     accounting of each conservatorship and receivership or other 
     disposition of a regulated entity in default.
       ``(B) Annual accounting or report.--With respect to each 
     conservatorship or receivership, the Agency shall make an 
     annual accounting or report available to the Board, the 
     Comptroller General of the United States, the Committee on 
     Banking, Housing, and Urban Affairs of the Senate, and the 
     Committee on Financial Services of the House of 
     Representatives.
       ``(C) Availability of reports.--Any report prepared under 
     subparagraph (B) shall be made available by the Agency upon 
     request to any shareholder of a regulated entity or any 
     member of the public.
       ``(D) Recordkeeping requirement.--After the end of the 6-
     year period beginning on the date on which the 
     conservatorship or receivership is terminated by the 
     Director, the Agency may destroy any records of such 
     regulated entity which the Agency, in the discretion of the 
     Agency, determines to be unnecessary, unless directed not to 
     do so by a court of competent jurisdiction or governmental 
     agency, or prohibited by law.
       ``(15) Fraudulent transfers.--
       ``(A) In general.--The Agency, as conservator or receiver, 
     may avoid a transfer of any interest of an entity-affiliated 
     party, or any person determined by the conservator or 
     receiver to be a debtor of the regulated entity, in property, 
     or any obligation incurred by such party or person, that was 
     made within 5 years of the date on which the Agency was 
     appointed conservator or receiver, if such party or person 
     voluntarily or involuntarily made such transfer or incurred 
     such liability with the intent to hinder, delay, or defraud 
     the regulated entity, the Agency, the conservator, or 
     receiver.
       ``(B) Right of recovery.--To the extent a transfer is 
     avoided under subparagraph (A), the conservator or receiver 
     may recover, for the benefit of the regulated entity, the 
     property transferred, or, if a court so orders, the value of 
     such property (at the time of such transfer) from--
       ``(i) the initial transferee of such transfer or the 
     entity-affiliated party or person for whose benefit such 
     transfer was made; or
       ``(ii) any immediate or mediate transferee of any such 
     initial transferee.
       ``(C) Rights of transferee or obligee.--The conservator or 
     receiver may not recover under subparagraph (B) from--
       ``(i) any transferee that takes for value, including 
     satisfaction or securing of a present or antecedent debt, in 
     good faith; or
       ``(ii) any immediate or mediate good faith transferee of 
     such transferee.
       ``(D) Rights under this paragraph.--The rights under this 
     paragraph of the conservator or receiver described under 
     subparagraph (A) shall be superior to any rights of a trustee 
     or any other party (other than any party which is a Federal 
     agency) under title 11, United States Code.
       ``(16) Attachment of assets and other injunctive relief.--
     Subject to paragraph (17), any court of competent 
     jurisdiction may, at the request of the conservator or 
     receiver, issue an order in accordance with rule 65 of the 
     Federal Rules of Civil Procedure, including an order placing 
     the assets of any person designated by the conservator or 
     receiver under the control of the court, and appointing a 
     trustee to hold such assets.
       ``(17) Standards of proof.--Rule 65 of the Federal Rules of 
     Civil Procedure shall apply with respect to any proceeding 
     under paragraph (16) without regard to the requirement of 
     such rule that the applicant show that the injury, loss, or 
     damage is irreparable and immediate.
       ``(18) Treatment of claims arising from breach of contracts 
     executed by the conservator or receiver.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, any final and unappealable judgment for 
     monetary damages entered against the conservator or receiver 
     for the breach of an agreement executed or approved in 
     writing by the conservator or receiver after the date of its 
     appointment, shall be paid as an administrative expense of 
     the conservator or receiver.
       ``(B) No limitation of power.--Nothing in this paragraph 
     shall be construed to limit the power of the conservator or 
     receiver to exercise any rights under contract or law, 
     including to terminate, breach, cancel, or otherwise 
     discontinue such agreement.
       ``(19) General exceptions.--
       ``(A) Limitations.--The rights of the conservator or 
     receiver appointed under this section shall be subject to the 
     limitations on the powers of a receiver under sections 402 
     through 407 of the Federal Deposit Insurance Corporation 
     Improvement Act of 1991 (12 U.S.C. 4402 through 4407).
       ``(B) Mortgages held in trust.--
       ``(i) In general.--Any mortgage, pool of mortgages, or 
     interest in a pool of mortgages held in trust, custodial, or 
     agency capacity by a regulated entity for the benefit of any 
     person other than the regulated entity shall not be available 
     to satisfy the claims of creditors generally, except that 
     nothing in this clause shall be construed to expand or 
     otherwise affect the authority of any regulated entity.
       ``(ii) Holding of mortgages.--Any mortgage, pool of 
     mortgages, or interest in a pool of mortgages described in 
     clause (i) shall be held by the conservator or receiver 
     appointed under this section for the beneficial owners of 
     such mortgage, pool of mortgages, or interest in accordance 
     with the terms of the agreement creating such trust, 
     custodial, or other agency arrangement.
       ``(iii) Liability of conservator or receiver.--The 
     liability of the conservator or receiver appointed under this 
     section for damages shall, in the case of any contingent or 
     unliquidated claim relating to the mortgages held in trust, 
     be estimated in accordance with the regulations of the 
     Director.
       ``(c) Priority of Expenses and Unsecured Claims.--
       ``(1) In general.--Unsecured claims against a regulated 
     entity, or the receiver therefor, that are proven to the 
     satisfaction of the receiver shall have priority in the 
     following order:
       ``(A) Administrative expenses of the receiver.
       ``(B) Any other general or senior liability of the 
     regulated entity (which is not a liability described under 
     subparagraph (C) or (D).
       ``(C) Any obligation subordinated to general creditors 
     (which is not an obligation described under subparagraph 
     (D)).
       ``(D) Any obligation to shareholders or members arising as 
     a result of their status as shareholder or members.
       ``(2) Creditors similarly situated.--All creditors that are 
     similarly situated under paragraph (1) shall be treated in a 
     similar manner,

[[Page 15915]]

     except that the receiver may take any action (including 
     making payments) that does not comply with this subsection, 
     if--
       ``(A) the Director determines that such action is necessary 
     to maximize the value of the assets of the regulated entity, 
     to maximize the present value return from the sale or other 
     disposition of the assets of the regulated entity, or to 
     minimize the amount of any loss realized upon the sale or 
     other disposition of the assets of the regulated entity; and
       ``(B) all creditors that are similarly situated under 
     paragraph (1) receive not less than the amount provided in 
     subsection (e)(2).
       ``(3) Definition.--As used in this subsection, the term 
     `administrative expenses of the receiver' includes--
       ``(A) the actual, necessary costs and expenses incurred by 
     the receiver in preserving the assets of a failed regulated 
     entity or liquidating or otherwise resolving the affairs of a 
     failed regulated entity; and
       ``(B) any obligations that the receiver determines are 
     necessary and appropriate to facilitate the smooth and 
     orderly liquidation or other resolution of the regulated 
     entity.
       ``(d) Provisions Relating to Contracts Entered Into Before 
     Appointment of Conservator or Receiver.--
       ``(1) Authority to repudiate contracts.--In addition to any 
     other rights a conservator or receiver may have, the 
     conservator or receiver for any regulated entity may 
     disaffirm or repudiate any contract or lease--
       ``(A) to which such regulated entity is a party;
       ``(B) the performance of which the conservator or receiver, 
     in its sole discretion, determines to be burdensome; and
       ``(C) the disaffirmance or repudiation of which the 
     conservator or receiver determines, in its sole discretion, 
     will promote the orderly administration of the affairs of the 
     regulated entity.
       ``(2) Timing of repudiation.--The conservator or receiver 
     shall determine whether or not to exercise the rights of 
     repudiation under this subsection within a reasonable period 
     following such appointment.
       ``(3) Claims for damages for repudiation.--
       ``(A) In general.--Except as otherwise provided under 
     subparagraph (C) and paragraphs (4), (5), and (6), the 
     liability of the conservator or receiver for the 
     disaffirmance or repudiation of any contract pursuant to 
     paragraph (1) shall be--
       ``(i) limited to actual direct compensatory damages; and
       ``(ii) determined as of--

       ``(I) the date of the appointment of the conservator or 
     receiver; or
       ``(II) in the case of any contract or agreement referred to 
     in paragraph (8), the date of the disaffirmance or 
     repudiation of such contract or agreement.

       ``(B) No liability for other damages.--For purposes of 
     subparagraph (A), the term `actual direct compensatory 
     damages' shall not include--
       ``(i) punitive or exemplary damages;
       ``(ii) damages for lost profits or opportunity; or
       ``(iii) damages for pain and suffering.
       ``(C) Measure of damages for repudiation of financial 
     contracts.--In the case of any qualified financial contract 
     or agreement to which paragraph (8) applies, compensatory 
     damages shall be--
       ``(i) deemed to include normal and reasonable costs of 
     cover or other reasonable measures of damages utilized in the 
     industries for such contract and agreement claims; and
       ``(ii) paid in accordance with this subsection and 
     subsection (e), except as otherwise specifically provided in 
     this section.
       ``(4) Leases under which the regulated entity is the 
     lessee.--
       ``(A) In general.--If the conservator or receiver 
     disaffirms or repudiates a lease under which the regulated 
     entity was the lessee, the conservator or receiver shall not 
     be liable for any damages (other than damages determined 
     under subparagraph (B)) for the disaffirmance or repudiation 
     of such lease.
       ``(B) Payments of rent.--Notwithstanding subparagraph (A), 
     the lessor under a lease to which that subparagraph applies 
     shall--
       ``(i) be entitled to the contractual rent accruing before 
     the later of the date on which--

       ``(I) the notice of disaffirmance or repudiation is mailed; 
     or
       ``(II) the disaffirmance or repudiation becomes effective, 
     unless the lessor is in default or breach of the terms of the 
     lease;

       ``(ii) have no claim for damages under any acceleration 
     clause or other penalty provision in the lease; and
       ``(iii) have a claim for any unpaid rent, subject to all 
     appropriate offsets and defenses, due as of the date of the 
     appointment, which shall be paid in accordance with this 
     subsection and subsection (e).
       ``(5) Leases under which the regulated entity is the 
     lessor.--
       ``(A) In general.--If the conservator or receiver 
     repudiates an unexpired written lease of real property of the 
     regulated entity under which the regulated entity is the 
     lessor and the lessee is not, as of the date of such 
     repudiation, in default, the lessee under such lease may 
     either--
       ``(i) treat the lease as terminated by such repudiation; or
       ``(ii) remain in possession of the leasehold interest for 
     the balance of the term of the lease, unless the lessee 
     defaults under the terms of the lease after the date of such 
     repudiation.
       ``(B) Provisions applicable to lessee remaining in 
     possession.--If any lessee under a lease described under 
     subparagraph (A) remains in possession of a leasehold 
     interest under clause (ii) of subparagraph (A)--
       ``(i) the lessee--

       ``(I) shall continue to pay the contractual rent pursuant 
     to the terms of the lease after the date of the repudiation 
     of such lease; and
       ``(II) may offset against any rent payment which accrues 
     after the date of the repudiation of the lease, and any 
     damages which accrue after such date due to the 
     nonperformance of any obligation of the regulated entity 
     under the lease after such date; and

       ``(ii) the conservator or receiver shall not be liable to 
     the lessee for any damages arising after such date as a 
     result of the repudiation, other than the amount of any 
     offset allowed under clause (i)(II).
       ``(6) Contracts for the sale of real property.--
       ``(A) In general.--If the conservator or receiver 
     repudiates any contract for the sale of real property and the 
     purchaser of such real property under such contract is in 
     possession, and is not, as of the date of such repudiation, 
     in default, such purchaser may either--
       ``(i) treat the contract as terminated by such repudiation; 
     or
       ``(ii) remain in possession of such real property.
       ``(B) Provisions applicable to purchaser remaining in 
     possession.--If any purchaser of real property under any 
     contract described under subparagraph (A) remains in 
     possession of such property under clause (ii) of subparagraph 
     (A)--
       ``(i) the purchaser--

       ``(I) shall continue to make all payments due under the 
     contract after the date of the repudiation of the contract; 
     and
       ``(II) may offset against any such payments any damages 
     which accrue after such date due to the nonperformance (after 
     such date) of any obligation of the regulated entity under 
     the contract; and

       ``(ii) the conservator or receiver shall--

       ``(I) not be liable to the purchaser for any damages 
     arising after such date as a result of the repudiation, other 
     than the amount of any offset allowed under clause (i)(II);
       ``(II) deliver title to the purchaser in accordance with 
     the provisions of the contract; and
       ``(III) have no obligation under the contract other than 
     the performance required under subclause (II).

       ``(C) Assignment and sale allowed.--
       ``(i) In general.--No provision of this paragraph shall be 
     construed as limiting the right of the conservator or 
     receiver to assign the contract described under subparagraph 
     (A), and sell the property subject to the contract and the 
     provisions of this paragraph.
       ``(ii) No liability after assignment and sale.--If an 
     assignment and sale described under clause (i) is 
     consummated, the conservator or receiver shall have no 
     further liability under the contract described under 
     subparagraph (A), or with respect to the real property which 
     was the subject of such contract.
       ``(7) Service contracts.--
       ``(A) Services performed before appointment.--In the case 
     of any contract for services between any person and any 
     regulated entity for which the Agency has been appointed 
     conservator or receiver, any claim of such person for 
     services performed before the appointment of the conservator 
     or receiver shall be--
       ``(i) a claim to be paid in accordance with subsections (b) 
     and (e); and
       ``(ii) deemed to have arisen as of the date on which the 
     conservator or receiver was appointed.
       ``(B) Services performed after appointment and prior to 
     repudiation.--If, in the case of any contract for services 
     described under subparagraph (A), the conservator or receiver 
     accepts performance by the other person before the 
     conservator or receiver makes any determination to exercise 
     the right of repudiation of such contract under this 
     section--
       ``(i) the other party shall be paid under the terms of the 
     contract for the services performed; and
       ``(ii) the amount of such payment shall be treated as an 
     administrative expense of the conservatorship or 
     receivership.
       ``(C) Acceptance of performance no bar to subsequent 
     repudiation.--The acceptance by the conservator or receiver 
     of services referred to under subparagraph (B) in connection 
     with a contract described in such subparagraph shall not 
     affect the right of the conservator or receiver to repudiate 
     such contract under this section at any time after such 
     performance.
       ``(8) Certain qualified financial contracts.--
       ``(A) Rights of parties to contracts.--Subject to 
     paragraphs (9) and (10), and notwithstanding any other 
     provision of this title (other than subsection (b)(9)(B) of 
     this section), any other Federal law, or the law of any 
     State, no person shall be stayed or prohibited from 
     exercising--
       ``(i) any right of that person to cause the termination, 
     liquidation, or acceleration of any qualified financial 
     contract with a regulated entity that arises upon the 
     appointment of the Agency as receiver for such regulated 
     entity at any time after such appointment;
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement relating to one or 
     more qualified financial contracts; or
       ``(iii) any right to offset or net out any termination 
     value, payment amount, or other transfer obligation arising 
     under or in connection

[[Page 15916]]

     with 1 or more contracts and agreements described in clause 
     (i), including any master agreement for such contracts or 
     agreements.
       ``(B) Applicability of other provisions.--Subsection 
     (b)(10) shall apply in the case of any judicial action or 
     proceeding brought against any receiver referred to under 
     subparagraph (A), or the regulated entity for which such 
     receiver was appointed, by any party to a contract or 
     agreement described under subparagraph (A)(i) with such 
     regulated entity.
       ``(C) Certain transfers not avoidable.--
       ``(i) In general.--Notwithstanding paragraph (11), or any 
     other provision of Federal or State law relating to the 
     avoidance of preferential or fraudulent transfers, the 
     Agency, whether acting as such or as conservator or receiver 
     of a regulated entity, may not avoid any transfer of money or 
     other property in connection with any qualified financial 
     contract with a regulated entity.
       ``(ii) Exception for certain transfers.--Clause (i) shall 
     not apply to any transfer of money or other property in 
     connection with any qualified financial contract with a 
     regulated entity if the Agency determines that the transferee 
     had actual intent to hinder, delay, or defraud such regulated 
     entity, the creditors of such regulated entity, or any 
     conservator or receiver appointed for such regulated entity.
       ``(D) Certain contracts and agreements defined.--In this 
     subsection the following definitions shall apply:
       ``(i) Qualified financial contract.--The term `qualified 
     financial contract' means any securities contract, commodity 
     contract, forward contract, repurchase agreement, swap 
     agreement, and any similar agreement that the Agency 
     determines by regulation, resolution, or order to be a 
     qualified financial contract for purposes of this paragraph.
       ``(ii) Securities contract.--The term `securities 
     contract'--

       ``(I) means a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan, or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit, or mortgage loans or interests 
     therein (including any interest therein or based on the value 
     thereof) or any option on any of the foregoing, including any 
     option to purchase or sell any such security, certificate of 
     deposit, mortgage loan, interest, group or index, or option, 
     and including any repurchase or reverse repurchase 
     transaction on any such security, certificate of deposit, 
     mortgage loan, interest, group or index, or option;
       ``(II) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan, unless the Agency determines by regulation, resolution, 
     or order to include any such agreement within the meaning of 
     such term;
       ``(III) means any option entered into on a national 
     securities exchange relating to foreign currencies;
       ``(IV) means the guarantee by or to any securities clearing 
     agency of any settlement of cash, securities, certificates of 
     deposit, mortgage loans or interests therein, group or index 
     of securities, certificates of deposit, or mortgage loans or 
     interests therein (including any interest therein or based on 
     the value thereof) or option on any of the foregoing, 
     including any option to purchase or sell any such security, 
     certificate of deposit, mortgage loan, interest, group or 
     index, or option;
       ``(V) means any margin loan;
       ``(VI) means any other agreement or transaction that is 
     similar to any agreement or transaction referred to in this 
     clause;
       ``(VII) means any combination of the agreements or 
     transactions referred to in this clause;
       ``(VIII) means any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     (IV), (V), (VI), (VII), or (VIII), together with all 
     supplements to any such master agreement, without regard to 
     whether the master agreement provides for an agreement or 
     transaction that is not a securities contract under this 
     clause, except that the master agreement shall be considered 
     to be a securities contract under this clause only with 
     respect to each agreement or transaction under the master 
     agreement that is referred to in subclause (I), (III), (IV), 
     (V), (VI), (VII), or (VIII); and
       ``(X) means any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in this clause, including any guarantee or 
     reimbursement obligation in connection with any agreement or 
     transaction referred to in this clause.

       ``(iii) Commodity contract.--The term `commodity contract' 
     means--

       ``(I) with respect to a futures commission merchant, a 
     contract for the purchase or sale of a commodity for future 
     delivery on, or subject to the rules of, a contract market or 
     board of trade;
       ``(II) with respect to a foreign futures commission 
     merchant, a foreign future;
       ``(III) with respect to a leverage transaction merchant, a 
     leverage transaction;
       ``(IV) with respect to a clearing organization, a contract 
     for the purchase or sale of a commodity for future delivery 
     on, or subject to the rules of, a contract market or board of 
     trade that is cleared by such clearing organization, or 
     commodity option traded on, or subject to the rules of, a 
     contract market or board of trade that is cleared by such 
     clearing organization;
       ``(V) with respect to a commodity options dealer, a 
     commodity option;
       ``(VI) any other agreement or transaction that is similar 
     to any agreement or transaction referred to in this clause;
       ``(VII) any combination of the agreements or transactions 
     referred to in this clause;
       ``(VIII) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), (IV), 
     (V), (VI), (VII), or (VIII), together with all supplements to 
     any such master agreement, without regard to whether the 
     master agreement provides for an agreement or transaction 
     that is not a commodity contract under this clause, except 
     that the master agreement shall be considered to be a 
     commodity contract under this clause only with respect to 
     each agreement or transaction under the master agreement that 
     is referred to in subclause (I), (II), (III), (IV), (V), 
     (VI), (VII), or (VIII); or
       ``(X) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in this clause, including any guarantee or reimbursement 
     obligation in connection with any agreement or transaction 
     referred to in this clause.

       ``(iv) Forward contract.--The term `forward contract' 
     means--

       ``(I) a contract (other than a commodity contract) for the 
     purchase, sale, or transfer of a commodity or any similar 
     good, article, service, right, or interest which is presently 
     or in the future becomes the subject of dealing in the 
     forward contract trade, or product or byproduct thereof, with 
     a maturity date more than 2 days after the date on which the 
     contract is entered into, including a repurchase transaction, 
     reverse repurchase transaction, consignment, lease, swap, 
     hedge transaction, deposit, loan, option, allocated 
     transaction, unallocated transaction, or any other similar 
     agreement;
       ``(II) any combination of agreements or transactions 
     referred to in subclauses (I) and (III);
       ``(III) any option to enter into any agreement or 
     transaction referred to in subclause (I) or (II);
       ``(IV) a master agreement that provides for an agreement or 
     transaction referred to in subclauses (I), (II), or (III), 
     together with all supplements to any such master agreement, 
     without regard to whether the master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this clause, except that the master agreement shall be 
     considered to be a forward contract under this clause only 
     with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     or (III); or
       ``(V) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in subclause (I), (II), (III), or (IV), including any 
     guarantee or reimbursement obligation in connection with any 
     agreement or transaction referred to in any such subclause.

       ``(v) Repurchase agreement.--The term `repurchase 
     agreement' (including a reverse repurchase agreement)--

       ``(I) means an agreement, including related terms, which 
     provides for the transfer of one or more certificates of 
     deposit, mortgage-related securities (as such term is defined 
     in section 3 of the Securities Exchange Act of 1934), 
     mortgage loans, interests in mortgage-related securities or 
     mortgage loans, eligible bankers' acceptances, qualified 
     foreign government securities (defined for purposes of this 
     clause as a security that is a direct obligation of, or that 
     is fully guaranteed by, the central government of a member of 
     the Organization for Economic Cooperation and Development, as 
     determined by regulation or order adopted by the appropriate 
     Federal banking authority), or securities that are direct 
     obligations of, or that are fully guaranteed by, the United 
     States or any agency of the United States against the 
     transfer of funds by the transferee of such certificates of 
     deposit, eligible bankers' acceptances, securities, mortgage 
     loans, or interests with a simultaneous agreement by such 
     transferee to transfer to the transferor thereof certificates 
     of deposit, eligible bankers' acceptances, securities, 
     mortgage loans, or interests as described above, at a date 
     certain not later than 1 year after such transfers or on 
     demand, against the transfer of funds, or any other similar 
     agreement;
       ``(II) does not include any repurchase obligation under a 
     participation in a commercial mortgage loan, unless the 
     Agency determines by regulation, resolution, or order to 
     include any such participation within the meaning of such 
     term;
       ``(III) means any combination of agreements or transactions 
     referred to in subclauses (I) and (IV);
       ``(IV) means any option to enter into any agreement or 
     transaction referred to in subclause (I) or (III);
       ``(V) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     or (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     provides for an agreement or transaction that is not a 
     repurchase agreement under this clause, except that the 
     master agreement shall be considered to be a repurchase 
     agreement under this subclause only with respect to each 
     agreement or transaction under the master agreement that is 
     referred to in subclause (I), (III), or (IV); and
       ``(VI) means any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in subclause (I), (III), (IV), or (V), including 
     any guarantee or reimbursement obligation in connection with 
     any agreement or transaction referred to in any such 
     subclause.

       ``(vi) Swap agreement.--The term `swap agreement' means--

[[Page 15917]]

       ``(I) any agreement, including the terms and conditions 
     incorporated by reference in any such agreement, which is an 
     interest rate swap, option, future, or forward agreement, 
     including a rate floor, rate cap, rate collar, cross-currency 
     rate swap, and basis swap; a spot, same day-tomorrow, 
     tomorrow-next, forward, or other foreign exchange or precious 
     metals agreement; a currency swap, option, future, or forward 
     agreement; an equity index or equity swap, option, future, or 
     forward agreement; a debt index or debt swap, option, future, 
     or forward agreement; a total return, credit spread or credit 
     swap, option, future, or forward agreement; a commodity index 
     or commodity swap, option, future, or forward agreement; or a 
     weather swap, weather derivative, or weather option;
       ``(II) any agreement or transaction that is similar to any 
     other agreement or transaction referred to in this clause and 
     that is of a type that has been, is presently, or in the 
     future becomes, the subject of recurrent dealings in the swap 
     markets (including terms and conditions incorporated by 
     reference in such agreement) and that is a forward, swap, 
     future, or option on one or more rates, currencies, 
     commodities, equity securities or other equity instruments, 
     debt securities or other debt instruments, quantitative 
     measures associated with an occurrence, extent of an 
     occurrence, or contingency associated with a financial, 
     commercial, or economic consequence, or economic or financial 
     indices or measures of economic or financial risk or value;
       ``(III) any combination of agreements or transactions 
     referred to in this clause;
       ``(IV) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(V) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), or 
     (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     contains an agreement or transaction that is not a swap 
     agreement under this clause, except that the master agreement 
     shall be considered to be a swap agreement under this clause 
     only with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     (III), or (IV); and
       ``(VI) any security agreement or arrangement or other 
     credit enhancement related to any agreements or transactions 
     referred to in subclause (I), (II), (III), (IV), or (V), 
     including any guarantee or reimbursement obligation in 
     connection with any agreement or transaction referred to in 
     any such subclause.

       ``(vii) Treatment of master agreement as one agreement.--
     Any master agreement for any contract or agreement described 
     in any preceding clause of this subparagraph (or any master 
     agreement for such master agreement or agreements), together 
     with all supplements to such master agreement, shall be 
     treated as a single agreement and a single qualified 
     financial contract. If a master agreement contains provisions 
     relating to agreements or transactions that are not 
     themselves qualified financial contracts, the master 
     agreement shall be deemed to be a qualified financial 
     contract only with respect to those transactions that are 
     themselves qualified financial contracts.
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property or with 
     an interest in property, including retention of title as a 
     security interest and foreclosure of the equity of redemption 
     of the regulated entity.
       ``(E) Certain protections in event of appointment of 
     conservator.--Notwithstanding any other provision of this 
     section, any other Federal law, or the law of any State 
     (other than paragraph (10) of this subsection and subsection 
     (b)(9)(B)), no person shall be stayed or prohibited from 
     exercising--
       ``(i) any right such person has to cause the termination, 
     liquidation, or acceleration of any qualified financial 
     contract with a regulated entity in a conservatorship based 
     upon a default under such financial contract which is 
     enforceable under applicable noninsolvency law;
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement relating to 1 or more 
     such qualified financial contracts; or
       ``(iii) any right to offset or net out any termination 
     values, payment amounts, or other transfer obligations 
     arising under or in connection with such qualified financial 
     contracts.
       ``(F) Clarification.--No provision of law shall be 
     construed as limiting the right or power of the Agency, or 
     authorizing any court or agency to limit or delay in any 
     manner, the right or power of the Agency to transfer any 
     qualified financial contract in accordance with paragraphs 
     (9) and (10), or to disaffirm or repudiate any such contract 
     in accordance with subsection (d)(1).
       ``(G) Walkaway clauses not effective.--
       ``(i) In general.--Notwithstanding the provisions of 
     subparagraphs (A) and (E), and sections 403 and 404 of the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991, no walkaway clause shall be enforceable in a qualified 
     financial contract of a regulated entity in default.
       ``(ii) Walkaway clause defined.--For purposes of this 
     subparagraph, the term `walkaway clause' means a provision in 
     a qualified financial contract that, after calculation of a 
     value of a party's position or an amount due to or from 1 of 
     the parties in accordance with its terms upon termination, 
     liquidation, or acceleration of the qualified financial 
     contract, either does not create a payment obligation of a 
     party or extinguishes a payment obligation of a party in 
     whole or in part solely because of the status of such party 
     as a nondefaulting party.
       ``(9) Transfer of qualified financial contracts.--In making 
     any transfer of assets or liabilities of a regulated entity 
     in default which includes any qualified financial contract, 
     the conservator or receiver for such regulated entity shall 
     either--
       ``(A) transfer to 1 person--
       ``(i) all qualified financial contracts between any person 
     (or any affiliate of such person) and the regulated entity in 
     default;
       ``(ii) all claims of such person (or any affiliate of such 
     person) against such regulated entity under any such contract 
     (other than any claim which, under the terms of any such 
     contract, is subordinated to the claims of general unsecured 
     creditors of such regulated entity);
       ``(iii) all claims of such regulated entity against such 
     person (or any affiliate of such person) under any such 
     contract; and
       ``(iv) all property securing, or any other credit 
     enhancement for any contract described in clause (i), or any 
     claim described in clause (ii) or (iii) under any such 
     contract; or
       ``(B) transfer none of the financial contracts, claims, or 
     property referred to under subparagraph (A) (with respect to 
     such person and any affiliate of such person).
       ``(10) Notification of transfer.--
       ``(A) In general.--The conservator or receiver shall notify 
     any person that is a party to a contract or transfer by 5:00 
     p.m. (Eastern Standard Time) on the business day following 
     the date of the appointment of the receiver in the case of a 
     receivership, or the business day following such transfer in 
     the case of a conservatorship, if--
       ``(i) the conservator or receiver for a regulated entity in 
     default makes any transfer of the assets and liabilities of 
     such regulated entity; and
       ``(ii) such transfer includes any qualified financial 
     contract.
       ``(B) Certain rights not enforceable.--
       ``(i) Receivership.--A person who is a party to a qualified 
     financial contract with a regulated entity may not exercise 
     any right that such person has to terminate, liquidate, or 
     net such contract under paragraph (8)(A) of this subsection 
     or under section 403 or 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991, solely by reason of or 
     incidental to the appointment of a receiver for the regulated 
     entity (or the insolvency or financial condition of the 
     regulated entity for which the receiver has been appointed)--

       ``(I) until 5:00 p.m. (Eastern Standard Time) on the 
     business day following the date of the appointment of the 
     receiver; or
       ``(II) after the person has received notice that the 
     contract has been transferred pursuant to paragraph (9)(A).

       ``(ii) Conservatorship.--A person who is a party to a 
     qualified financial contract with a regulated entity may not 
     exercise any right that such person has to terminate, 
     liquidate, or net such contract under paragraph (8)(E) of 
     this subsection or under section 403 or 404 of the Federal 
     Deposit Insurance Corporation Improvement Act of 1991, solely 
     by reason of or incidental to the appointment of a 
     conservator for the regulated entity (or the insolvency or 
     financial condition of the regulated entity for which the 
     conservator has been appointed).
       ``(iii) Notice.--For purposes of this paragraph, the 
     conservator or receiver of a regulated entity shall be deemed 
     to have notified a person who is a party to a qualified 
     financial contract with such regulated entity, if the 
     conservator or receiver has taken steps reasonably calculated 
     to provide notice to such person by the time specified in 
     subparagraph (A).
       ``(C) Business day defined.--For purposes of this 
     paragraph, the term `business day' means any day other than 
     any Saturday, Sunday, or any day on which either the New York 
     Stock Exchange or the Federal Reserve Bank of New York is 
     closed.
       ``(11) Disaffirmance or repudiation of qualified financial 
     contracts.--In exercising the rights of disaffirmance or 
     repudiation of a conservator or receiver with respect to any 
     qualified financial contract to which a regulated entity is a 
     party, the conservator or receiver for such institution shall 
     either--
       ``(A) disaffirm or repudiate all qualified financial 
     contracts between--
       ``(i) any person or any affiliate of such person; and
       ``(ii) the regulated entity in default; or
       ``(B) disaffirm or repudiate none of the qualified 
     financial contracts referred to in subparagraph (A) (with 
     respect to such person or any affiliate of such person).
       ``(12) Certain security interests not avoidable.--No 
     provision of this subsection shall be construed as permitting 
     the avoidance of any legally enforceable or perfected 
     security interest in any of the assets of any regulated 
     entity, except where such an interest is taken in 
     contemplation of the insolvency of the regulated entity, or 
     with the intent to hinder, delay, or defraud the regulated 
     entity or the creditors of such regulated entity.
       ``(13) Authority to enforce contracts.--
       ``(A) In general.--Notwithstanding any provision of a 
     contract providing for termination, default, acceleration, or 
     exercise of rights upon, or solely by reason of, insolvency 
     or the appointment of, or the exercise of rights or powers 
     by, a conservator or receiver, the conservator or receiver 
     may enforce any contract, other than a contract for liability 
     insurance for a director or officer, or a contract or a 
     regulated entity bond, entered into by the regulated entity.
       ``(B) Certain rights not affected.--No provision of this 
     paragraph may be construed as

[[Page 15918]]

      impairing or affecting any right of the conservator or 
     receiver to enforce or recover under a liability insurance 
     contract for an officer or director, or regulated entity bond 
     under other applicable law.
       ``(C) Consent requirement.--
       ``(i) In general.--Except as otherwise provided under this 
     section, no person may exercise any right or power to 
     terminate, accelerate, or declare a default under any 
     contract to which a regulated entity is a party, or to obtain 
     possession of or exercise control over any property of the 
     regulated entity, or affect any contractual rights of the 
     regulated entity, without the consent of the conservator or 
     receiver, as appropriate, for a period of--

       ``(I) 45 days after the date of appointment of a 
     conservator; or
       ``(II) 90 days after the date of appointment of a receiver.

       ``(ii) Exceptions.--This subparagraph shall not--

       ``(I) apply to a contract for liability insurance for an 
     officer or director;
       ``(II) apply to the rights of parties to certain qualified 
     financial contracts under subsection (d)(8); and
       ``(III) be construed as permitting the conservator or 
     receiver to fail to comply with otherwise enforceable 
     provisions of such contracts.

       ``(14) Savings clause.--The meanings of terms used in this 
     subsection are applicable for purposes of this subsection 
     only, and shall not be construed or applied so as to 
     challenge or affect the characterization, definition, or 
     treatment of any similar terms under any other statute, 
     regulation, or rule, including the Gramm-Leach-Bliley Act, 
     the Legal Certainty for Bank Products Act of 2000, the 
     securities laws (as that term is defined in section 3(a)(47) 
     of the Securities Exchange Act of 1934), and the Commodity 
     Exchange Act.
       ``(15) Exception for federal reserve and federal home loan 
     banks.--No provision of this subsection shall apply with 
     respect to--
       ``(A) any extension of credit from any Federal Home Loan 
     Bank or Federal Reserve Bank to any regulated entity; or
       ``(B) any security interest in the assets of the regulated 
     entity securing any such extension of credit.
       ``(e) Valuation of Claims in Default.--
       ``(1) In general.--Notwithstanding any other provision of 
     Federal law or the law of any State, and regardless of the 
     method which the Agency determines to utilize with respect to 
     a regulated entity in default or in danger of default, 
     including transactions authorized under subsection (i), this 
     subsection shall govern the rights of the creditors of such 
     regulated entity.
       ``(2) Maximum liability.--The maximum liability of the 
     Agency, acting as receiver or in any other capacity, to any 
     person having a claim against the receiver or the regulated 
     entity for which such receiver is appointed shall be not more 
     than the amount that such claimant would have received if the 
     Agency had liquidated the assets and liabilities of the 
     regulated entity without exercising the authority of the 
     Agency under subsection (i).
       ``(f) Limitation on Court Action.--Except as provided in 
     this section or at the request of the Director, no court may 
     take any action to restrain or affect the exercise of powers 
     or functions of the Agency as a conservator or a receiver.
       ``(g) Liability of Directors and Officers.--
       ``(1) In general.--A director or officer of a regulated 
     entity may be held personally liable for monetary damages in 
     any civil action described in paragraph (2) brought by, on 
     behalf of, or at the request or direction of the Agency, and 
     prosecuted wholly or partially for the benefit of the 
     Agency--
       ``(A) acting as conservator or receiver of such regulated 
     entity; or
       ``(B) acting based upon a suit, claim, or cause of action 
     purchased from, assigned by, or otherwise conveyed by such 
     receiver or conservator.
       ``(2) Actions addressed.--Paragraph (1) applies in any 
     civil action for gross negligence, including any similar 
     conduct or conduct that demonstrates a greater disregard of a 
     duty of care than gross negligence, including intentional 
     tortious conduct, as such terms are defined and determined 
     under applicable State law.
       ``(3) No limitation.--Nothing in this subsection shall 
     impair or affect any right of the Agency under other 
     applicable law.
       ``(h) Damages.--In any proceeding related to any claim 
     against a director, officer, employee, agent, attorney, 
     accountant, appraiser, or any other party employed by or 
     providing services to a regulated entity, recoverable damages 
     determined to result from the improvident or otherwise 
     improper use or investment of any assets of the regulated 
     entity shall include principal losses and appropriate 
     interest.
       ``(i) Limited-Life Regulated Entities.--
       ``(1) Organization.--
       ``(A) Purpose.--The Agency, as receiver appointed pursuant 
     to subsection (a)--
       ``(i) may, in the case of a Federal Home Loan Bank, 
     organize a limited-life regulated entity with those powers 
     and attributes of the Federal Home Loan Bank in default or in 
     danger of default as the Director determines necessary, 
     subject to the provisions of this subsection, and the 
     Director shall grant a temporary charter to that limited-life 
     regulated entity, and that limited-life regulated entity 
     shall operate subject to that charter; and
       ``(ii) shall, in the case of an enterprise, organize a 
     limited-life regulated entity with respect to that enterprise 
     in accordance with this subsection.
       ``(B) Authorities.--Upon the creation of a limited-life 
     regulated entity under subparagraph (A), the limited-life 
     regulated entity may--
       ``(i) assume such liabilities of the regulated entity that 
     is in default or in danger of default as the Agency may, in 
     its discretion, determine to be appropriate, except that the 
     liabilities assumed shall not exceed the amount of assets 
     purchased or transferred from the regulated entity to the 
     limited-life regulated entity;
       ``(ii) purchase such assets of the regulated entity that is 
     in default, or in danger of default as the Agency may, in its 
     discretion, determine to be appropriate; and
       ``(iii) perform any other temporary function which the 
     Agency may, in its discretion, prescribe in accordance with 
     this section.
       ``(2) Charter and establishment.--
       ``(A) Transfer of charter.--
       ``(i) Fannie mae.--If the Agency is appointed as receiver 
     for the Federal National Mortgage Association, the limited-
     life regulated entity established under this subsection with 
     respect to such enterprise shall, by operation of law and 
     immediately upon its organization--

       ``(I) succeed to the charter of the Federal National 
     Mortgage Association, as set forth in the Federal National 
     Mortgage Association Charter Act; and
       ``(II) thereafter operate in accordance with, and subject 
     to, such charter, this Act, and any other provision of law to 
     which the Federal National Mortgage Association is subject, 
     except as otherwise provided in this subsection.

       ``(ii) Freddie mac.--If the Agency is appointed as receiver 
     for the Federal Home Loan Mortgage Corporation, the limited-
     life regulated entity established under this subsection with 
     respect to such enterprise shall, by operation of law and 
     immediately upon its organization--

       ``(I) succeed to the charter of the Federal Home Loan 
     Mortgage Corporation, as set forth in the Federal Home Loan 
     Mortgage Corporation Charter Act; and
       ``(II) thereafter operate in accordance with, and subject 
     to, such charter, this Act, and any other provision of law to 
     which the Federal Home Loan Mortgage Corporation is subject, 
     except as otherwise provided in this subsection.

       ``(B) Interests in and assets and obligations of regulated 
     entity in default.--Notwithstanding subparagraph (A) or any 
     other provision of law--
       ``(i) a limited-life regulated entity shall assume, 
     acquire, or succeed to the assets or liabilities of a 
     regulated entity only to the extent that such assets or 
     liabilities are transferred by the Agency to the limited-life 
     regulated entity in accordance with, and subject to the 
     restrictions set forth in, paragraph (1)(B);
       ``(ii) a limited-life regulated entity shall not assume, 
     acquire, or succeed to any obligation that a regulated entity 
     for which a receiver has been appointed may have to any 
     shareholder of the regulated entity that arises as a result 
     of the status of that person as a shareholder of the 
     regulated entity; and
       ``(iii) no shareholder or creditor of a regulated entity 
     shall have any right or claim against the charter of the 
     regulated entity once the Agency has been appointed receiver 
     for the regulated entity and a limited-life regulated entity 
     succeeds to the charter pursuant to subparagraph (A).
       ``(C) Limited-life regulated entity treated as being in 
     default for certain purposes.--A limited-life regulated 
     entity shall be treated as a regulated entity in default at 
     such times and for such purposes as the Agency may, in its 
     discretion, determine.
       ``(D) Management.--Upon its establishment, a limited-life 
     regulated entity shall be under the management of a board of 
     directors consisting of not fewer than 5 nor more than 10 
     members appointed by the Agency.
       ``(E) Bylaws.--The board of directors of a limited-life 
     regulated entity shall adopt such bylaws as may be approved 
     by the Agency.
       ``(3) Capital stock.--
       ``(A) No agency requirement.--The Agency is not required to 
     pay capital stock into a limited-life regulated entity or to 
     issue any capital stock on behalf of a limited-life regulated 
     entity established under this subsection.
       ``(B) Authority.--If the Director determines that such 
     action is advisable, the Agency may cause capital stock or 
     other securities of a limited-life regulated entity 
     established with respect to an enterprise to be issued and 
     offered for sale, in such amounts and on such terms and 
     conditions as the Director may determine, in the discretion 
     of the Director.
       ``(4) Investments.--Funds of a limited-life regulated 
     entity shall be kept on hand in cash, invested in obligations 
     of the United States or obligations guaranteed as to 
     principal and interest by the United States, or deposited 
     with the Agency, or any Federal reserve bank.
       ``(5) Exempt tax status.--Notwithstanding any other 
     provision of Federal or State law, a limited-life regulated 
     entity, its franchise, property, and income shall be exempt 
     from all taxation now or hereafter imposed by the United 
     States, by any territory, dependency, or possession thereof, 
     or by any State, county, municipality, or local taxing 
     authority.
       ``(6) Winding up.--
       ``(A) In general.--Subject to subparagraphs (B) and (C), 
     not later than 2 years after the date of its organization, 
     the Agency shall wind up the affairs of a limited-life 
     regulated entity.
       ``(B) Extension.--The Director may, in the discretion of 
     the Director, extend the status of a limited-life regulated 
     entity for 3 additional 1-year periods.
       ``(C) Termination of status as limited-life regulated 
     entity.--

[[Page 15919]]

       ``(i) In general.--Upon the sale by the Agency of 80 
     percent or more of the capital stock of a limited-life 
     regulated entity, as defined in clause (iv), to 1 or more 
     persons (other than the Agency)--

       ``(I) the status of the limited-life regulated entity as 
     such shall terminate; and
       ``(II) the entity shall cease to be a limited-life 
     regulated entity for purposes of this subsection.

       ``(ii) Divestiture of remaining stock, if any.--

       ``(I) In general.--Not later than 1 year after the date on 
     which the status of a limited-life regulated entity is 
     terminated pursuant to clause (i), the Agency shall sell to 1 
     or more persons (other than the Agency) any remaining capital 
     stock of the former limited-life regulated entity.
       ``(II) Extension authorized.--The Director may extend the 
     period referred to in subclause (I) for not longer than an 
     additional 2 years, if the Director determines that such 
     action would be in the public interest.

       ``(iii) Savings clause.--Notwithstanding any provision of 
     law, other than clause (ii), the Agency shall not be required 
     to sell the capital stock of an enterprise or a limited-life 
     regulated entity established with respect to an enterprise.
       ``(iv) Applicability.--This subparagraph applies only with 
     respect to a limited-life regulated entity that is 
     established with respect to an enterprise.
       ``(7) Transfer of assets and liabilities.--
       ``(A) In general.--
       ``(i) Transfer of assets and liabilities.--The Agency, as 
     receiver, may transfer any assets and liabilities of a 
     regulated entity in default, or in danger of default, to the 
     limited-life regulated entity in accordance with and subject 
     to the restrictions of paragraph (1).
       ``(ii) Subsequent transfers.--At any time after the 
     establishment of a limited-life regulated entity, the Agency, 
     as receiver, may transfer any assets and liabilities of the 
     regulated entity in default, or in danger of default, as the 
     Agency may, in its discretion, determine to be appropriate in 
     accordance with and subject to the restrictions of paragraph 
     (1).
       ``(iii) Effective without approval.--The transfer of any 
     assets or liabilities of a regulated entity in default or in 
     danger of default to a limited-life regulated entity shall be 
     effective without any further approval under Federal or State 
     law, assignment, or consent with respect thereto.
       ``(iv) Equitable treatment of similarly situated 
     creditors.--The Agency shall treat all creditors of a 
     regulated entity in default or in danger of default that are 
     similarly situated under subsection (c)(1) in a similar 
     manner in exercising the authority of the Agency under this 
     subsection to transfer any assets or liabilities of the 
     regulated entity to the limited-life regulated entity 
     established with respect to such regulated entity, except 
     that the Agency may take actions (including making payments) 
     that do not comply with this clause, if--

       ``(I) the Director determines that such actions are 
     necessary to maximize the value of the assets of the 
     regulated entity, to maximize the present value return from 
     the sale or other disposition of the assets of the regulated 
     entity, or to minimize the amount of any loss realized upon 
     the sale or other disposition of the assets of the regulated 
     entity; and
       ``(II) all creditors that are similarly situated under 
     subsection (c)(1) receive not less than the amount provided 
     in subsection (e)(2).

       ``(v) Limitation on transfer of liabilities.--
     Notwithstanding any other provision of law, the aggregate 
     amount of liabilities of a regulated entity that are 
     transferred to, or assumed by, a limited-life regulated 
     entity may not exceed the aggregate amount of assets of the 
     regulated entity that are transferred to, or purchased by, 
     the limited-life regulated entity.
       ``(8) Regulations.--The Agency may promulgate such 
     regulations as the Agency determines to be necessary or 
     appropriate to implement this subsection.
       ``(9) Powers of limited-life regulated entities.--
       ``(A) In general.--Each limited-life regulated entity 
     created under this subsection shall have all corporate powers 
     of, and be subject to the same provisions of law as, the 
     regulated entity in default or in danger of default to which 
     it relates, except that--
       ``(i) the Agency may--

       ``(I) remove the directors of a limited-life regulated 
     entity;
       ``(II) fix the compensation of members of the board of 
     directors and senior management, as determined by the Agency 
     in its discretion, of a limited-life regulated entity; and
       ``(III) indemnify the representatives for purposes of 
     paragraph (1)(B), and the directors, officers, employees, and 
     agents of a limited-life regulated entity on such terms as 
     the Agency determines to be appropriate; and

       ``(ii) the board of directors of a limited-life regulated 
     entity--

       ``(I) shall elect a chairperson who may also serve in the 
     position of chief executive officer, except that such person 
     shall not serve either as chairperson or as chief executive 
     officer without the prior approval of the Agency; and
       ``(II) may appoint a chief executive officer who is not 
     also the chairperson, except that such person shall not serve 
     as chief executive officer without the prior approval of the 
     Agency.

       ``(B) Stay of judicial action.--Any judicial action to 
     which a limited-life regulated entity becomes a party by 
     virtue of its acquisition of any assets or assumption of any 
     liabilities of a regulated entity in default shall be stayed 
     from further proceedings for a period of not longer than 45 
     days, at the request of the limited-life regulated entity. 
     Such period may be modified upon the consent of all parties.
       ``(10) No federal status.--
       ``(A) Agency status.--A limited-life regulated entity is 
     not an agency, establishment, or instrumentality of the 
     United States.
       ``(B) Employee status.--Representatives for purposes of 
     paragraph (1)(B), interim directors, directors, officers, 
     employees, or agents of a limited-life regulated entity are 
     not, solely by virtue of service in any such capacity, 
     officers or employees of the United States. Any employee of 
     the Agency or of any Federal instrumentality who serves at 
     the request of the Agency as a representative for purposes of 
     paragraph (1)(B), interim director, director, officer, 
     employee, or agent of a limited-life regulated entity shall 
     not--
       ``(i) solely by virtue of service in any such capacity lose 
     any existing status as an officer or employee of the United 
     States for purposes of title 5, United States Code, or any 
     other provision of law; or
       ``(ii) receive any salary or benefits for service in any 
     such capacity with respect to a limited-life regulated entity 
     in addition to such salary or benefits as are obtained 
     through employment with the Agency or such Federal 
     instrumentality.
       ``(11) Authority to obtain credit.--
       ``(A) In general.--A limited-life regulated entity may 
     obtain unsecured credit and issue unsecured debt.
       ``(B) Inability to obtain credit.--If a limited-life 
     regulated entity is unable to obtain unsecured credit or 
     issue unsecured debt, the Director may authorize the 
     obtaining of credit or the issuance of debt by the limited-
     life regulated entity--
       ``(i) with priority over any or all of the obligations of 
     the limited-life regulated entity;
       ``(ii) secured by a lien on property of the limited-life 
     regulated entity that is not otherwise subject to a lien; or
       ``(iii) secured by a junior lien on property of the 
     limited-life regulated entity that is subject to a lien.
       ``(C) Limitations.--
       ``(i) In general.--The Director, after notice and a 
     hearing, may authorize the obtaining of credit or the 
     issuance of debt by a limited-life regulated entity that is 
     secured by a senior or equal lien on property of the limited-
     life regulated entity that is subject to a lien (other than 
     mortgages that collateralize the mortgage-backed securities 
     issued or guaranteed by an enterprise) only if--

       ``(I) the limited-life regulated entity is unable to 
     otherwise obtain such credit or issue such debt; and
       ``(II) there is adequate protection of the interest of the 
     holder of the lien on the property with respect to which such 
     senior or equal lien is proposed to be granted.

       ``(D) Burden of proof.--In any hearing under this 
     subsection, the Director has the burden of proof on the issue 
     of adequate protection.
       ``(12) Affect on debts and liens.--The reversal or 
     modification on appeal of an authorization under this 
     subsection to obtain credit or issue debt, or of a grant 
     under this section of a priority or a lien, does not affect 
     the validity of any debt so issued, or any priority or lien 
     so granted, to an entity that extended such credit in good 
     faith, whether or not such entity knew of the pendency of the 
     appeal, unless such authorization and the issuance of such 
     debt, or the granting of such priority or lien, were stayed 
     pending appeal.
       ``(j) Other Agency Exemptions.--
       ``(1) Applicability.--The provisions of this subsection 
     shall apply with respect to the Agency in any case in which 
     the Agency is acting as a conservator or a receiver.
       ``(2) Taxation.--The Agency, including its franchise, its 
     capital, reserves, and surplus, and its income, shall be 
     exempt from all taxation imposed by any State, county, 
     municipality, or local taxing authority, except that any real 
     property of the Agency shall be subject to State, 
     territorial, county, municipal, or local taxation to the same 
     extent according to its value as other real property is 
     taxed, except that, notwithstanding the failure of any person 
     to challenge an assessment under State law of the value of 
     such property, and the tax thereon, shall be determined as of 
     the period for which such tax is imposed.
       ``(3) Property protection.--No property of the Agency shall 
     be subject to levy, attachment, garnishment, foreclosure, or 
     sale without the consent of the Agency, nor shall any 
     involuntary lien attach to the property of the Agency.
       ``(4) Penalties and fines.--The Agency shall not be liable 
     for any amounts in the nature of penalties or fines, 
     including those arising from the failure of any person to pay 
     any real property, personal property, probate, or recording 
     tax or any recording or filing fees when due.
       ``(k) Prohibition of Charter Revocation.--In no case may 
     the receiver appointed pursuant to this section revoke, 
     annul, or terminate the charter of an enterprise.''.
       (b) Technical and Conforming Amendments.--The Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4501 et seq.) is amended--
       (1) in section 1368 (12 U.S.C. 4618)--
       (A) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity''; and
       (B) by striking ``the enterprise'' each place that term 
     appears and inserting ``the regulated entity'';
       (2) in section 1369C (12 U.S.C. 4622), by striking 
     ``enterprise'' each place that term appears and inserting 
     ``regulated entity'';

[[Page 15920]]

       (3) in section 1369D (12 U.S.C. 4623)--
       (A) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity''; and
       (B) in subsection (a)(1), by striking ``An enterprise'' and 
     inserting ``A regulated entity''; and
       (4) by striking sections 1369, 1369A, and 1369B (12 U.S.C. 
     4619, 4620, and 4621).

                    Subtitle D--Enforcement Actions

     SEC. 1151. CEASE AND DESIST PROCEEDINGS.

       Section 1371 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4631) is 
     amended--
       (1) by striking subsections (a) and (b) and inserting the 
     following:
       ``(a) Issuance for Unsafe or Unsound Practices and 
     Violations.--
       ``(1) Authority of director.--If, in the opinion of the 
     Director, a regulated entity or any entity-affiliated party 
     is engaging or has engaged, or the Director has reasonable 
     cause to believe that the regulated entity or any entity- 
     affiliated party is about to engage, in an unsafe or unsound 
     practice in conducting the business of the regulated entity 
     or the Office of Finance, or is violating or has violated, or 
     the Director has reasonable cause to believe is about to 
     violate, a law, rule, regulation, or order, or any condition 
     imposed in writing by the Director in connection with the 
     granting of any application or other request by the regulated 
     entity or the Office of Finance or any written agreement 
     entered into with the Director, the Director may issue and 
     serve upon the regulated entity or entity-affiliated party a 
     notice of charges in respect thereof.
       ``(2) Limitation.--The Director may not, pursuant to this 
     section, enforce compliance with any housing goal established 
     under subpart B of part 2 of subtitle A of this title, with 
     section 1336 or 1337 of this title, with subsection (m) or 
     (n) of section 309 of the Federal National Mortgage 
     Association Charter Act (12 U.S.C. 1723a(m), (n)), with 
     subsection (e) or (f) of section 307 of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1456(e), (f)), or with 
     paragraph (5) of section 10(j) of the Federal Home Loan Bank 
     Act (12 U.S.C. 1430(j)).
       ``(b) Issuance for Unsatisfactory Rating.--If a regulated 
     entity receives, in its most recent report of examination, a 
     less-than-satisfactory rating for asset quality, management, 
     earnings, or liquidity, the Director may (if the deficiency 
     is not corrected) deem the regulated entity to be engaging in 
     an unsafe or unsound practice for purposes of subsection 
     (a).'';
       (2) in subsection (c)--
       (A) in paragraph (1), by inserting before the period at the 
     end the following: ``, unless the party served with a notice 
     of charges shall appear at the hearing personally or by a 
     duly authorized representative, the party shall be deemed to 
     have consented to the issuance of the cease and desist 
     order''; and
       (B) in paragraph (2)--
       (i) by striking ``or director'' and inserting ``director, 
     or entity-affiliated party''; and
       (ii) by inserting ``or entity-affiliated party'' before 
     ``consents'';
       (3) in each of subsections (c), (d), and (e)--
       (A) by striking ``the enterprise'' each place that term 
     appears and inserting ``the regulated entity'';
       (B) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity''; and
       (C) by striking ``conduct'' each place that term appears 
     and inserting ``practice'';
       (4) in subsection (d)--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``or director'' and inserting ``director, 
     or entity-affiliated party''; and
       (ii) by inserting ``to require a regulated entity or 
     entity-affiliated party'' after ``includes the authority'';
       (B) in paragraph (1)--
       (i) by striking ``to require an executive officer or a 
     director to''; and
       (ii) by striking ``loss'' and all that follows through 
     ``person'' and inserting ``loss, if'';
       (iii) in subparagraph (A), by inserting ``such entity or 
     party or finance facility'' before ``was''; and
       (iv) by striking subparagraph (B) and inserting the 
     following:
       ``(B) the violation or practice involved a reckless 
     disregard for the law or any applicable regulations or prior 
     order of the Director;''; and
       (C) in paragraph (4), by inserting ``loan or'' before 
     ``asset'';
       (5) in subsection (e), by inserting ``or entity-affiliated 
     party''--
       (A) before ``or any executive''; and
       (B) before the period at the end; and
       (6) in subsection (f)--
       (A) by striking ``enterprise'' and inserting ``regulated 
     entity, finance facility,''; and
       (B) by striking ``or director'' and inserting ``director, 
     or entity-affiliated party''.

     SEC. 1152. TEMPORARY CEASE AND DESIST PROCEEDINGS.

       Section 1372 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4632) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Grounds for Issuance.--
       ``(1) In general.--If the Director determines that the 
     actions specified in the notice of charges served upon a 
     regulated entity or any entity-affiliated party pursuant to 
     section 1371(a), or the continuation thereof, is likely to 
     cause insolvency or significant dissipation of assets or 
     earnings of that entity, or is likely to weaken the condition 
     of that entity prior to the completion of the proceedings 
     conducted pursuant to sections 1371 and 1373, the Director 
     may--
       ``(A) issue a temporary order requiring that regulated 
     entity or entity-affiliated party to cease and desist from 
     any such violation or practice; and
       ``(B) require that regulated entity or entity-affiliated 
     party to take affirmative action to prevent or remedy such 
     insolvency, dissipation, condition, or prejudice pending 
     completion of such proceedings.
       ``(2) Additional requirements.--An order issued under 
     paragraph (1) may include any requirement authorized under 
     subsection 1371(d).'';
       (2) in subsection (b)--
       (A) by striking ``or director'' and inserting ``director, 
     or entity-affiliated party''; and
       (B) by striking ``enterprise'' each place that term appears 
     and inserting ``regulated entity'';
       (3) in subsection (c), by striking ``enterprise'' each 
     place that term appears and inserting ``regulated entity'';
       (4) in subsection (d)--
       (A) by striking ``or director'' each place that term 
     appears and inserting ``director, or entity-affiliated 
     party''; and
       (B) by striking ``An enterprise'' and inserting ``A 
     regulated entity''; and
       (5) in subsection (e)--
       (A) by striking ``request the Attorney General of the 
     United States to''; and
       (B) by striking ``or may, under the direction and control 
     of the Attorney General, bring such action''.

     SEC. 1153. REMOVAL AND PROHIBITION AUTHORITY.

       (a) In General.--Part 1 of subtitle C of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4631 et seq.) is amended--
       (1) by redesignating sections 1377 through 1379B (12 U.S.C. 
     4637-4641) as sections 1379 through 1379D, respectively; and
       (2) by inserting after section 1376 (12 U.S.C. 4636) the 
     following:

     ``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

       ``(a) Authority To Issue Order.--
       ``(1) In general.--The Director may serve upon a party 
     described in paragraph (2), or any officer, director, or 
     management of the Office of Finance a written notice of the 
     intention of the Director to suspend or remove such party 
     from office, or prohibit any further participation by such 
     party, in any manner, in the conduct of the affairs of the 
     regulated entity.
       ``(2) Applicability.--A party described in this paragraph 
     is an entity-affiliated party or any officer, director, or 
     management of the Office of Finance, if the Director 
     determines that--
       ``(A) that party, officer, or director has, directly or 
     indirectly--
       ``(i) violated--

       ``(I) any law or regulation;
       ``(II) any cease and desist order which has become final;
       ``(III) any condition imposed in writing by the Director in 
     connection with the grant of any application or other request 
     by such regulated entity; or
       ``(IV) any written agreement between such regulated entity 
     and the Director;

       ``(ii) engaged or participated in any unsafe or unsound 
     practice in connection with any regulated entity or business 
     institution; or
       ``(iii) committed or engaged in any act, omission, or 
     practice which constitutes a breach of such party's fiduciary 
     duty;
       ``(B) by reason of the violation, practice, or breach 
     described in subparagraph (A)--
       ``(i) such regulated entity or business institution has 
     suffered or will probably suffer financial loss or other 
     damage; or
       ``(ii) such party has received financial gain or other 
     benefit; and
       ``(C) the violation, practice, or breach described in 
     subparagraph (A)--
       ``(i) involves personal dishonesty on the part of such 
     party; or
       ``(ii) demonstrates willful or continuing disregard by such 
     party for the safety or soundness of such regulated entity or 
     business institution.
       ``(b) Suspension Order.--
       ``(1) Suspension or prohibition authority.--If the Director 
     serves written notice under subsection (a) upon a party 
     subject to that subsection (a), the Director may, by order, 
     suspend or remove such party from office, or prohibit such 
     party from further participation in any manner in the conduct 
     of the affairs of the regulated entity, if the Director--
       ``(A) determines that such action is necessary for the 
     protection of the regulated entity; and
       ``(B) serves such party with written notice of the order.
       ``(2) Effective period.--Any order issued under this 
     subsection--
       ``(A) shall become effective upon service; and
       ``(B) unless a court issues a stay of such order under 
     subsection (g), shall remain in effect and enforceable 
     until--
       ``(i) the date on which the Director dismisses the charges 
     contained in the notice served under subsection (a) with 
     respect to such party; or
       ``(ii) the effective date of an order issued under 
     subsection (b).
       ``(3) Copy of order.--If the Director issues an order under 
     subsection (b) to any party, the Director shall serve a copy 
     of such order on any regulated entity with which such party 
     is affiliated at the time such order is issued.
       ``(c) Notice, Hearing, and Order.--
       ``(1) Notice.--A notice under subsection (a) of the 
     intention of the Director to issue an order under this 
     section shall contain a statement of the facts constituting 
     grounds for such action, and shall fix a time and place at 
     which a hearing will be held on such action.

[[Page 15921]]

       ``(2) Timing of hearing.--A hearing shall be fixed for a 
     date not earlier than 30 days, nor later than 60 days, after 
     the date of service of notice under subsection (a), unless an 
     earlier or a later date is set by the Director at the request 
     of--
       ``(A) the party receiving such notice, and good cause is 
     shown; or
       ``(B) the Attorney General of the United States.
       ``(3) Consent.--Unless the party that is the subject of a 
     notice delivered under subsection (a) appears at the hearing 
     in person or by a duly authorized representative, such party 
     shall be deemed to have consented to the issuance of an order 
     under this section.
       ``(4) Issuance of order of suspension.--The Director may 
     issue an order under this section, as the Director may deem 
     appropriate, if--
       ``(A) a party is deemed to have consented to the issuance 
     of an order under paragraph (3); or
       ``(B) upon the record made at the hearing, the Director 
     finds that any of the grounds specified in the notice have 
     been established.
       ``(5) Effectiveness of order.--Any order issued under 
     paragraph (4) shall become effective at the expiration of 30 
     days after the date of service upon the relevant regulated 
     entity and party (except in the case of an order issued upon 
     consent under paragraph (3), which shall become effective at 
     the time specified therein). Such order shall remain 
     effective and enforceable except to such extent as it is 
     stayed, modified, terminated, or set aside by action of the 
     Director or a reviewing court.
       ``(d) Prohibition of Certain Specific Activities.--Any 
     person subject to an order issued under this section shall 
     not--
       ``(1) participate in any manner in the conduct of the 
     affairs of any regulated entity or the Office of Finance;
       ``(2) solicit, procure, transfer, attempt to transfer, 
     vote, or attempt to vote any proxy, consent, or authorization 
     with respect to any voting rights in any regulated entity;
       ``(3) violate any voting agreement previously approved by 
     the Director; or
       ``(4) vote for a director, or serve or act as an entity-
     affiliated party of a regulated entity or as an officer or 
     director of the Office of Finance.
       ``(e) Industry-Wide Prohibition.--
       ``(1) In general.--Except as provided in paragraph (2), any 
     person who, pursuant to an order issued under this section, 
     has been removed or suspended from office in a regulated 
     entity or the Office of Finance, or prohibited from 
     participating in the conduct of the affairs of a regulated 
     entity or the Office of Finance, may not, while such order is 
     in effect, continue or commence to hold any office in, or 
     participate in any manner in the conduct of the affairs of, 
     any regulated entity or the Office of Finance.
       ``(2) Exception if director provides written consent.--If, 
     on or after the date on which an order is issued under this 
     section which removes or suspends from office any party, or 
     prohibits such party from participating in the conduct of the 
     affairs of a regulated entity or the Office of Finance, such 
     party receives the written consent of the Director, the order 
     shall, to the extent of such consent, cease to apply to such 
     party with respect to the regulated entity or such Office of 
     Finance described in the written consent. Any such consent 
     shall be publicly disclosed.
       ``(3) Violation of paragraph (1) treated as violation of 
     order.--Any violation of paragraph (1) by any person who is 
     subject to an order issued under subsection (h) shall be 
     treated as a violation of the order.
       ``(f) Applicability.--This section shall only apply to a 
     person who is an individual, unless the Director specifically 
     finds that it should apply to a corporation, firm, or other 
     business entity.
       ``(g) Stay of Suspension and Prohibition of Entity-
     Affiliated Party.--Not later than 10 days after the date on 
     which any entity-affiliated party has been suspended from 
     office or prohibited from participation in the conduct of the 
     affairs of a regulated entity under this section, such party 
     may apply to the United States District Court for the 
     District of Columbia, or the United States district court for 
     the judicial district in which the headquarters of the 
     regulated entity is located, for a stay of such suspension or 
     prohibition pending the completion of the administrative 
     proceedings pursuant to subsection (c). The court shall have 
     jurisdiction to stay such suspension or prohibition.
       ``(h) Suspension or Removal of Entity-Affiliated Party 
     Charged With Felony.--
       ``(1) Suspension or prohibition.--
       ``(A) In general.--Whenever any entity-affiliated party is 
     charged in any information, indictment, or complaint, with 
     the commission of or participation in a crime involving 
     dishonesty or breach of trust which is punishable by 
     imprisonment for a term exceeding 1 year under Federal or 
     State law, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     regulated entity or impair public confidence in the regulated 
     entity, by written notice served upon such party, suspend 
     such party from office or prohibit such party from further 
     participation in any manner in the conduct of the affairs of 
     any regulated entity.
       ``(B) Provisions applicable to notice.--
       ``(i) Copy.--A copy of any notice under subparagraph (A) 
     shall be served upon the relevant regulated entity.
       ``(ii) Effective period.--A suspension or prohibition under 
     subparagraph (A) shall remain in effect until the 
     information, indictment, or complaint referred to in 
     subparagraph (A) is finally disposed of, or until terminated 
     by the Director.
       ``(2) Removal or prohibition.--
       ``(A) In general.--If a judgment of conviction or an 
     agreement to enter a pretrial diversion or other similar 
     program is entered against an entity-affiliated party in 
     connection with a crime described in paragraph (1)(A), at 
     such time as such judgment is not subject to further 
     appellate review, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     regulated entity or impair public confidence in the regulated 
     entity, issue and serve upon such party an order removing 
     such party from office or prohibiting such party from further 
     participation in any manner in the conduct of the affairs of 
     the regulated entity without the prior written consent of the 
     Director.
       ``(B) Provisions applicable to order.--
       ``(i) Copy.--A copy of any order under subparagraph (A) 
     shall be served upon the relevant regulated entity, at which 
     time the entity-affiliated party who is subject to the order 
     (if a director or an officer) shall cease to be a director or 
     officer of such regulated entity.
       ``(ii) Effect of acquittal.--A finding of not guilty or 
     other disposition of the charge shall not preclude the 
     Director from instituting proceedings after such finding or 
     disposition to remove a party from office or to prohibit 
     further participation in the affairs of a regulated entity 
     pursuant to subsection (a) or (b).
       ``(iii) Effective period.--Unless terminated by the 
     Director, any notice of suspension or order of removal issued 
     under this subsection shall remain effective and outstanding 
     until the completion of any hearing or appeal authorized 
     under paragraph (4).
       ``(3) Authority of remaining board members.--
       ``(A) In general.--If at any time, because of the 
     suspension of 1 or more directors pursuant to this section, 
     there shall be on the board of directors of a regulated 
     entity less than a quorum of directors not so suspended, all 
     powers and functions vested in or exercisable by such board 
     shall vest in and be exercisable by the director or directors 
     on the board not so suspended, until such time as there shall 
     be a quorum of the board of directors.
       ``(B) Appointment of temporary directors.--If all of the 
     directors of a regulated entity are suspended pursuant to 
     this section, the Director shall appoint persons to serve 
     temporarily as directors pending the termination of such 
     suspensions, or until such time as those who have been 
     suspended cease to be directors of the regulated entity and 
     their respective successors take office.
       ``(4) Hearing regarding continued participation.--
       ``(A) In general.--Not later than 30 days after the date of 
     service of any notice of suspension or order of removal 
     issued pursuant to paragraph (1) or (2), the entity-
     affiliated party may request in writing an opportunity to 
     appear before the Director to show that the continued service 
     or participation in the conduct of the affairs of the 
     regulated entity by such party does not, or is not likely to, 
     pose a threat to the interests of the regulated entity, or 
     threaten to impair public confidence in the regulated entity.
       ``(B) Timing and form of hearing.--Upon receipt of a 
     request for a hearing under subparagraph (A), the Director 
     shall fix a time (not later than 30 days after the date of 
     receipt of such request, unless extended at the request of 
     such party) and place at which the entity-affiliated party 
     may appear, personally or through counsel, before the 
     Director or 1 or more designated employees of the Director to 
     submit written materials (or, at the discretion of the 
     Director, oral testimony) and oral argument.
       ``(C) Determination.--Not later than 60 days after the date 
     of a hearing under subparagraph (B), the Director shall 
     notify the entity-affiliated party whether the suspension or 
     prohibition from participation in any manner in the conduct 
     of the affairs of the regulated entity will be continued, 
     terminated, or otherwise modified, or whether the order 
     removing such party from office or prohibiting such party 
     from further participation in any manner in the conduct of 
     the affairs of the regulated entity will be rescinded or 
     otherwise modified. Such notification shall contain a 
     statement of the basis for any adverse decision of the 
     Director.
       ``(5) Rules.--The Director is authorized to prescribe such 
     rules as may be necessary to carry out this subsection.''.
       (b) Conforming Amendments.--
       (1) Safety and soundness act.--Subtitle C of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4501 et seq.) is amended--
       (A) in section 1317(f), by striking ``section 1379B'' and 
     inserting ``section 1379D'';
       (B) in section 1373(a)--
       (i) in paragraph (1), by striking ``or 1376(c)'' and 
     inserting ``, 1376(c), or 1377'';
       (ii) in paragraph (2), by inserting ``or 1377'' after'' 
     1371''; and
       (iii) in paragraph (4), by inserting ``or removal or 
     prohibition'' after ``cease and desist''; and
       (C) in section 1374(a)--
       (i) by striking ``or 1376'' and inserting ``1313B, 1376, or 
     1377''; and
       (ii) by striking ``such section'' and inserting ``this 
     title''.
       (2) Fannie mae charter act.--Section 308(b) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1723(b)) 
     is amended in the second sentence, by striking ``The'' and 
     inserting ``Except to the extent that action under section 
     1377 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 temporarily results in a lesser number, 
     the''.

[[Page 15922]]

       (3) Freddie mac charter act.--Section 303(a)(2)(A) of the 
     Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1452(a)(2)(A)) is amended, in the second sentence, by 
     striking ``The'' and inserting ``Except to the extent action 
     under section 1377 of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 temporarily 
     results in a lesser number, the''.

     SEC. 1154. ENFORCEMENT AND JURISDICTION.

       Section 1375 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4635) is 
     amended--
       (1) by striking subsection (a) and inserting the following 
     new subsection:
       ``(a) Enforcement.--The Director may, in the discretion of 
     the Director, apply to the United States District Court for 
     the District of Columbia, or the United States district court 
     within the jurisdiction of which the headquarters of the 
     regulated entity is located, for the enforcement of any 
     effective and outstanding notice or order issued under this 
     subtitle or subtitle B, or request that the Attorney General 
     of the United States bring such an action. Such court shall 
     have jurisdiction and power to order and require compliance 
     with such notice or order.''; and
       (2) in subsection (b), by striking ``or 1376'' and 
     inserting ``1313B, 1376, or 1377''.

     SEC. 1155. CIVIL MONEY PENALTIES.

       Section 1376 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4636) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) In General.--The Director may impose a civil money 
     penalty in accordance with this section on any regulated 
     entity or any entity-affiliated party. The Director shall not 
     impose a civil penalty in accordance with this section on any 
     regulated entity or any entity-affiliated party for any 
     violation that is addressed under section 1345(a).'';
       (2) by striking subsection (b) and inserting the following:
       ``(b) Amount of Penalty.--
       ``(1) First tier.--A regulated entity or entity-affiliated 
     party shall forfeit and pay a civil penalty of not more than 
     $10,000 for each day during which a violation continues, if 
     such regulated entity or party--
       ``(A) violates any provision of this title, the authorizing 
     statutes, or any order, condition, rule, or regulation under 
     this title or any authorizing statute;
       ``(B) violates any final or temporary order or notice 
     issued pursuant to this title;
       ``(C) violates any condition imposed in writing by the 
     Director in connection with the grant of any application or 
     other request by such regulated entity; or
       ``(D) violates any written agreement between the regulated 
     entity and the Director.
       ``(2) Second tier.--Notwithstanding paragraph (1), a 
     regulated entity or entity-affiliated party shall forfeit and 
     pay a civil penalty of not more than $50,000 for each day 
     during which a violation, practice, or breach continues, if--
       ``(A) the regulated entity or entity-affiliated party, 
     respectively--
       ``(i) commits any violation described in any subparagraph 
     of paragraph (1);
       ``(ii) recklessly engages in an unsafe or unsound practice 
     in conducting the affairs of the regulated entity; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) the violation, practice, or breach--
       ``(i) is part of a pattern of misconduct;
       ``(ii) causes or is likely to cause more than a minimal 
     loss to the regulated entity; or
       ``(iii) results in pecuniary gain or other benefit to such 
     party.
       ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
     any regulated entity or entity-affiliated party shall forfeit 
     and pay a civil penalty in an amount not to exceed the 
     applicable maximum amount determined under paragraph (4) for 
     each day during which such violation, practice, or breach 
     continues, if such regulated entity or entity-affiliated 
     party--
       ``(A) knowingly--
       ``(i) commits any violation described in any subparagraph 
     of paragraph (1);
       ``(ii) engages in any unsafe or unsound practice in 
     conducting the affairs of the regulated entity; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) knowingly or recklessly causes a substantial loss to 
     the regulated entity or a substantial pecuniary gain or other 
     benefit to such party by reason of such violation, practice, 
     or breach.
       ``(4) Maximum amounts of penalties for any violation 
     described in paragraph (3).--The maximum daily amount of any 
     civil penalty which may be assessed pursuant to paragraph (3) 
     for any violation, practice, or breach described in paragraph 
     (3) is--
       ``(A) in the case of any entity-affiliated party, an amount 
     not to exceed $2,000,000; and
       ``(B) in the case of any regulated entity, $2,000,000.'';
       (3) in subsection (c)--
       (A) by striking ``enterprise'' each place that term appears 
     and inserting ``regulated entity'';
       (B) by inserting ``or entity-affiliated party'' before ``in 
     writing''; and
       (C) by inserting ``or entity-affiliated party'' before 
     ``has been given'';
       (4) in subsection (d)--
       (A) by striking ``or director'' each place such term 
     appears and inserting ``director, or entity-affiliated 
     party'';
       (B) by striking ``an enterprise'' and inserting ``a 
     regulated entity'';
       (C) by striking ``the enterprise'' and inserting ``the 
     regulated entity'';
       (D) by striking ``request the Attorney General of the 
     United States to'';
       (E) by inserting ``, or the United States district court 
     within the jurisdiction of which the headquarters of the 
     regulated entity is located,'' after ``District of 
     Columbia'';
       (F) by striking ``, or may, under the direction and control 
     of the Attorney General of the United States, bring such an 
     action''; and
       (G) by striking ``and section 1374''; and
       (5) in subsection (g), by striking ``An enterprise'' and 
     inserting ``A regulated entity''.

     SEC. 1156. CRIMINAL PENALTY.

       (a) In General.--Subtitle C of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4631 et seq.) is amended by inserting after section 
     1377, as added by this Act, the following:

     ``SEC. 1378. CRIMINAL PENALTY.

       ``Whoever, being subject to an order in effect under 
     section 1377, without the prior written approval of the 
     Director, knowingly participates, directly or indirectly, in 
     any manner (including by engaging in an activity specifically 
     prohibited in such an order) in the conduct of the affairs of 
     any regulated entity shall, notwithstanding section 3571 of 
     title 18, be fined not more than $1,000,000, imprisoned for 
     not more than 5 years, or both.''.
       (b) Technical and Conforming Amendments.--The Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4501 et seq.) is amended--
       (1) in section 1379 (as so designated by this Act)--
       (A) by striking ``an enterprise'' and inserting ``a 
     regulated entity''; and
       (B) by striking ``the enterprise'' and inserting ``the 
     regulated entity'';
       (2) in section 1379A (as so designated by this Act), by 
     striking ``an enterprise'' and inserting ``a regulated 
     entity'';
       (3) in section 1379B(c) (as so designated by this Act), by 
     striking ``enterprise'' and inserting ``regulated entity''; 
     and
       (4) in section 1379D (as so designated by this Act), by 
     striking ``enterprise'' and inserting ``regulated entity''.

     SEC. 1157. NOTICE AFTER SEPARATION FROM SERVICE.

       Section 1379 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4637), as so 
     designated by this Act, is amended--
       (1) by striking ``2-year'' and inserting ``6-year'';
       (2) by striking ``a director or executive officer of an 
     enterprise'' and inserting ``an entity-affiliated party'';
       (3) by striking ``director or officer'' each place that 
     term appears and inserting ``entity-affiliated party''; and
       (4) by striking ``enterprise.'' and inserting ``regulated 
     entity.''.

     SEC. 1158. SUBPOENA AUTHORITY.

       (a) In General.--Section 1379B of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4641) is amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``administrative'';
       (ii) by inserting ``, examination, or investigation'' after 
     ``proceeding'';
       (iii) by striking ``subtitle'' and inserting ``title''; and
       (iv) by inserting ``or any designated representative 
     thereof, including any person designated to conduct any 
     hearing under this subtitle'' after ``Director''; and
       (B) in paragraph (4), by striking ``issued by the 
     Director'';
       (2) in subsection (b), by inserting ``or in any territory 
     or other place subject to the jurisdiction of the United 
     States'' after ``State'';
       (3) by striking subsection (c) and inserting the following:
       ``(c) Enforcement.--
       ``(1) In general.--The Director, or any party to 
     proceedings under this subtitle, may apply to the United 
     States District Court for the District of Columbia, or the 
     United States district court for the judicial district of the 
     United States in any territory in which such proceeding is 
     being conducted, or where the witness resides or carries on 
     business, for enforcement of any subpoena or subpoena duces 
     tecum issued pursuant to this section.
       ``(2) Power of court.--The courts described under paragraph 
     (1) shall have the jurisdiction and power to order and 
     require compliance with any subpoena issued under paragraph 
     (1).'';
       (4) in subsection (d), by inserting ``enterprise-affiliated 
     party'' before ``may allow''; and
       (5) by adding at the end the following:
       ``(e) Penalties.--A person shall be guilty of a 
     misdemeanor, and upon conviction, shall be subject to a fine 
     of not more than $1,000 or to imprisonment for a term of not 
     more than 1 year, or both, if that person willfully fails or 
     refuses, in disobedience of a subpoena issued under 
     subsection (c), to--
       ``(1) attend court;
       ``(2) testify in court;
       ``(3) answer any lawful inquiry; or
       ``(4) produce books, papers, correspondence, contracts, 
     agreements, or such other records as requested in the 
     subpoena.''.

                     Subtitle E--General Provisions

     SEC. 1161. CONFORMING AND TECHNICAL AMENDMENTS.

       (a) Amendments to 1992 Act.--The Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4501 et seq.), as amended by this Act, is amended--
       (1) in section 1315 (12 U.S.C. 4515)--

[[Page 15923]]

       (A) in subsection (a)--
       (i) by striking ``(a) Office Personnel.--The'' and 
     inserting ``(a) In General.--Subject to title III of the 
     Federal Housing Finance Regulatory Reform Act of 2008, the''; 
     and
       (ii) by striking ``the Office'' each place that term 
     appears and inserting ``the Agency'';
       (B) in subsection (c), by striking ``the Office'' and 
     inserting ``the Agency'';
       (C) in subsection (e), by striking ``the Office'' and 
     inserting ``the Agency'';
       (D) by striking subsection (d) and redesignating subsection 
     (e) as subsection (d); and
       (E) by striking subsection (f);
       (2) in section 1319A (12 U.S.C. 4520)--
       (A) by striking ``(a) In General.--''; and
       (B) by striking subsection (b);
       (3) in section 1364(c) (12 U.S.C. 4614(c)), by striking the 
     last sentence;
       (4) by striking section 1383 (12 U.S.C. 1451 note);
       (5) in each of sections 1319D, 1319E, and 1319F (12 U.S.C. 
     4523, 4524, 4525) by striking ``the Office'' each place that 
     term appears and inserting ``the Agency''; and
       (6) in each of sections 1319B and 1369(a)(3) (12 U.S.C. 
     4521, 4619(a)(3)), by striking ``Committee on Banking, 
     Finance and Urban Affairs'' each place such term appears and 
     inserting ``Committee on Financial Services''.
       (b) Amendments to Fannie Mae Charter Act.--The Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1716 et 
     seq.) is amended--
       (1) in each of sections 303(c)(2) (12 U.S.C. 1718(c)(2)), 
     309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)), and 309(k)(1) (12 
     U.S.C. 1723a(k)(1)), by striking ``Director of the Office of 
     Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development'' each place that term appears, 
     and inserting ``Director of the Federal Housing Finance 
     Agency''; and
       (2) in section 309--
       (A) in subsection (m) (12 U.S.C. 1723a(m))--
       (i) in paragraph (1), by striking ``to the Secretary, in a 
     form determined by the Secretary'' and inserting ``to the 
     Director of the Federal Housing Finance Agency, in a form 
     determined by the Director''; and
       (ii) in paragraph (2), by striking ``to the Secretary, in a 
     form determined by the Secretary'' and inserting ``to the 
     Director of the Federal Housing Finance Agency, in a form 
     determined by the Director'';
       (B) in subsection (n) (12 U.S.C. 1723a(n))--
       (i) in paragraph (1), by striking ``and the Secretary'' and 
     inserting ``and the Director of the Federal Housing Finance 
     Agency''; and
       (ii) in paragraph (2), by striking ``Secretary'' each place 
     that term appears and inserting ``Director of the Federal 
     Housing Finance Agency''; and
       (C) in paragraph (3)(B), by striking ``Secretary'' and 
     inserting ``Director of the Federal Housing Finance Agency''.
       (c) Amendments to Freddie Mac Charter Act.--The Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.) 
     is amended--
       (1) in each of sections 303(b)(2) (12 U.S.C. 1452(b)(2)), 
     303(h)(2) (12 U.S.C. 1452(h)(2)), and section 307(c)(1) (12 
     U.S.C. 1456(c)(1)), by striking ``Director of the Office of 
     Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development'' each place that term appears, 
     and inserting ``Director of the Federal Housing Finance 
     Agency'';
       (2) in section 306 (12 U.S.C. 1455)--
       (A) in subsection (c)(2), by inserting ``the'' after 
     ``Secretary of'';
       (B) in subsection (i)--
       (i) by striking ``section 1316(c)'' and inserting ``section 
     306(c)''; and
       (ii) by striking ``section 106'' and inserting ``section 
     1316''; and
       (C) in subsection (j)(2), by striking ``of substantially'' 
     and inserting ``or substantially''; and
       (3) in section 307 (12 U.S.C. 1456)--
       (A) in subsection (e)--
       (i) in paragraph (1), by striking ``to the Secretary, in a 
     form determined by the Secretary'' and inserting ``to the 
     Director of the Federal Housing Finance Agency, in a form 
     determined by the Director''; and
       (ii) in paragraph (2), by striking ``to the Secretary, in a 
     form determined by the Secretary'' and inserting ``to the 
     Director of the Federal Housing Finance Agency, in a form 
     determined by the Director''; and
       (B) in subsection (f)--
       (i) in paragraph (1), by striking ``and the Secretary'' and 
     inserting ``and the Director of the Federal Housing Finance 
     Agency'';
       (ii) in paragraph (2), by striking ``the Secretary'' each 
     place that term appears and inserting ``the Director of the 
     Federal Housing Finance Agency''; and
       (iii) in paragraph (3)(B), by striking ``Secretary'' and 
     inserting ``Director of the Federal Housing Finance Agency''.
       (d) Amendment to Title 18, United States Code.--Section 
     1905 of title 18, United States Code, is amended by striking 
     ``Office of Federal Housing Enterprise Oversight'' and 
     inserting ``Federal Housing Finance Agency''.
       (e) Amendments to Flood Disaster Protection Act of 1973.--
     Section 102(f)(3)(A) of the Flood Disaster Protection Act of 
     1973 (42 U.S.C. 4012a(f)(3)(A)) is amended by striking 
     ``Director of the Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban 
     Development'' and inserting ``Director of the Federal Housing 
     Finance Agency''.
       (f) Amendment to Department of Housing and Urban 
     Development Act.--Section 5 of the Department of Housing and 
     Urban Development Act (42 U.S.C. 3534) is amended by striking 
     subsection (d).
       (g) Amendments to Title 5, United States Code.--Title 5, 
     United States Code, is amended--
       (1) in section 5313, by striking the item relating to the 
     Director of the Office of Federal Housing Enterprise 
     Oversight, Department of Housing and Urban Development and 
     inserting the following new item:
       ``Director of the Federal Housing Finance Agency.''; and
       (2) in section 3132(a)(1)--
       (A) in subparagraph (B), by striking ``,, and'' and 
     inserting ``, and'';
       (B) in subparagraph (D)--
       (i) by striking ``the Federal Housing Finance Board'';
       (ii) by striking ``the Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban 
     Development'' and inserting ``the Federal Housing Finance 
     Agency''; and
       (iii) by striking ``or or'' at the end;
       (C) in subparagraph (E), as added by section 
     8(d)(1)(B)(iii) of Public Law 107-123, by adding ``or'' at 
     the end; and
       (D) by redesignating subparagraph (E), as added by section 
     10702(c)(1)(C) of Public Law 107-171, as subparagraph (F).
       (h) Amendment to Sarbanes-Oxley Act.--Section 
     105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 2002 (15 
     U.S.C. 7215(b)(5)(B)(ii)(II)) is amended by inserting ``and 
     the Director of the Federal Housing Finance Agency,'' after 
     ``Commission,''.
       (i) Amendment to Federal Deposit Insurance Act.--Section 
     11(t)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(t)(2)(A)) is amended by adding at the end the following:
       ``(vii) Federal Housing Finance Agency.''.

     SEC. 1162. PRESIDENTIALLY-APPOINTED DIRECTORS OF ENTERPRISES.

       (a) Fannie Mae.--
       (1) In general.--Section 308(b) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 
     amended--
       (A) in the first sentence, by striking ``eighteen persons, 
     five of whom shall be appointed annually by the President of 
     the United States, and the remainder of whom'' and inserting 
     ``13 persons, or such other number that the Director 
     determines appropriate, who'';
       (B) in the second sentence, by striking ``appointed by the 
     President'';
       (C) in the third sentence--
       (i) by striking ``appointed or''; and
       (ii) by striking ``, except that any such appointed member 
     may be removed from office by the President for good cause'';
       (D) in the fourth sentence, by striking ``elective''; and
       (E) by striking the fifth sentence.
       (2) Transitional provision.--The amendments made by 
     paragraph (1) shall not apply to any appointed position of 
     the board of directors of the Federal National Mortgage 
     Association until the expiration of the annual term for such 
     position during which the effective date under section 1163 
     occurs.
       (b) Freddie Mac.--
       (1) In general.--Section 303(a)(2) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1452(a)(2)) is amended--
       (A) in subparagraph (A)--
       (i) in the first sentence, by striking ``18 persons, 5 of 
     whom shall be appointed annually by the President of the 
     United States and the remainder of whom'' and inserting ``13 
     persons, or such other number as the Director determines 
     appropriate, who''; and
       (ii) in the second sentence, by striking ``appointed by the 
     President of the United States'';
       (B) in subparagraph (B)--
       (i) by striking ``such or''; and
       (ii) by striking ``, except that any appointed member may 
     be removed from office by the President for good cause''; and
       (C) in subparagraph (C)--
       (i) by striking the first sentence; and
       (ii) by striking ``elective''.
       (2) Transitional provision.--The amendments made by 
     paragraph (1) shall not apply to any appointed position of 
     the board of directors of the Federal Home Loan Mortgage 
     Corporation until the expiration of the annual term for such 
     position during which the effective date under section 1163 
     occurs.

     SEC. 1163. EFFECTIVE DATE.

       Except as otherwise specifically provided in this title, 
     this title and the amendments made by this title shall take 
     effect on, and shall apply beginning on, the date of 
     enactment of this Act.

                   TITLE II--FEDERAL HOME LOAN BANKS

     SEC. 1201. RECOGNITION OF DISTINCTIONS BETWEEN THE 
                   ENTERPRISES AND THE FEDERAL HOME LOAN BANKS.

       Section 1313 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4513) is amended 
     by adding at the end the following:
       ``(f) Recognition of Distinctions Between the Enterprises 
     and the Federal Home Loan Banks.--Prior to promulgating any 
     regulation or taking any other formal or informal agency 
     action of general applicability relating to the Federal Home 
     Loan Banks, including the issuance of an advisory document or 
     examination guidance, the Director shall consider the 
     differences between the Federal Home Loan Banks and the 
     enterprises with respect to--
       ``(1) the Banks'--
       ``(A) cooperative ownership structure;
       ``(B) the mission of providing liquidity to members;

[[Page 15924]]

       ``(C) affordable housing and community development mission;
       ``(D) capital structure; and
       ``(E) joint and several liability; and
       ``(2) any other differences that the Director considers 
     appropriate.''.

     SEC. 1202. DIRECTORS.

       Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 
     1427) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Number; Election; Qualifications; Conflicts of 
     Interest.--
       ``(1) In general.--Subject to paragraphs (2) through (4), 
     the management of each Federal Home Loan Bank shall be vested 
     in a board of 13 directors, or such other number as the 
     Director determines appropriate.
       ``(2) Board makeup.--The board of directors of each Bank 
     shall be comprised of--
       ``(A) member directors, who shall comprise at least the 
     majority of the members of the board of directors; and
       ``(B) independent directors, who shall comprise not fewer 
     than \2/5\ of the members of the board of directors.
       ``(3) Selection criteria.--
       ``(A) In general.--Each member of the board of directors 
     shall be--
       ``(i) elected by plurality vote of the members, in 
     accordance with procedures established under this section; 
     and
       ``(ii) a citizen of the United States.
       ``(B) Independent director criteria.--
       ``(i) In general.--Each independent director that is not a 
     public interest director under clause (ii) shall have 
     demonstrated knowledge of, or experience in, financial 
     management, auditing and accounting, risk management 
     practices, derivatives, project development, or 
     organizational management, or such other knowledge or 
     expertise as the Director may provide by regulation.
       ``(ii) Public interest.--Not fewer than 2 of the 
     independent directors shall have more than 4 years of 
     experience in representing consumer or community interests on 
     banking services, credit needs, housing, or financial 
     consumer protections.
       ``(iii) Conflicts of interest.--No independent director 
     may, during the term of service on the board of directors, 
     serve as an officer of any Federal Home Loan Bank or as a 
     director, officer, or employee of any member of a Bank, or of 
     any person that receives advances from a Bank.
       ``(4) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(A) Independent director.--The terms `independent 
     director' and `independent directorship' mean a member of the 
     board of directors of a Federal Home Loan Bank who is a bona 
     fide resident of the district in which the Federal Home Loan 
     Bank is located, or the directorship held by such a person, 
     respectively.
       ``(B) Member director.--The terms `member director' and 
     `member directorship' mean a member of the board of directors 
     of a Federal Home Loan Bank who is an officer or director of 
     a member institution that is located in the district in which 
     the Federal Home Loan Bank is located, or the directorship 
     held by such a person, respectively.'';
       (2) by striking ``elective'' each place that term appears, 
     other than in subsections (d), (e), and (f), and inserting 
     ``member'';
       (3) in subsection (b)--
       (A) by striking the subsection heading and all that follows 
     through ``Each elective directorship'' and inserting the 
     following:
       ``(b) Directorships.--
       ``(1) Member directorships.--Each member directorship''; 
     and
       (B) by adding at the end the following:
       ``(2) Independent directorships.--
       ``(A) Elections.--Each independent director--
       ``(i) shall be elected by the members entitled to vote, 
     from among eligible persons nominated, after consultation 
     with the Advisory Council of the Bank, by the board of 
     directors of the Bank; and
       ``(ii) shall be elected by a plurality of the votes of the 
     members of the Bank at large, with each member having the 
     number of votes for each such directorship as it has under 
     paragraph (1) in an election to fill member directorships.
       ``(B) Criteria.--Nominees shall meet all applicable 
     requirements prescribed in this section.
       ``(C) Nomination and election procedures.--Procedures for 
     nomination and election of independent directors shall be 
     prescribed by the bylaws of each Federal Home Loan Bank, in a 
     manner consistent with the rules and regulations of the 
     Agency.'';
       (4) in subsection (c)--
       (A) by striking ``elective'' each place that term appears 
     and inserting ``member'', except--
       (i) in the second sentence, the second place that term 
     appears; and
       (ii) each place that term appears in the fifth sentence; 
     and
       (B) in the second sentence--
       (i) by inserting ``(A) except as provided in clause (B) of 
     this sentence,'' before ``if at any time''; and
       (ii) by inserting before the period at the end the 
     following: ``, and (B) clause (A) of this sentence shall not 
     apply to the directorships of any Federal Home Loan Bank 
     resulting from the merger of any 2 or more such Banks'';
       (5) in subsection (d)--
       (A) in the first sentence--
       (i) by striking ``, whether elected or appointed,''; and
       (ii) by striking ``3 years'' and inserting ``4 years'';
       (B) in the second sentence--
       (i) by striking ``Federal Home Loan Bank System 
     Modernization Act of 1999'' and inserting ``Federal Housing 
     Finance Regulatory Reform Act of 2008'';
       (ii) by striking ``\1/3\'' and inserting ``\1/4\''; and
       (iii) by striking ``or appointed''; and
       (C) in the third sentence--
       (i) by striking ``an elective'' each place that term 
     appears and inserting ``a''; and
       (ii) by striking ``in any elective directorship or elective 
     directorships'';
       (6) in subsection (f)--
       (A) by striking paragraph (2);
       (B) by striking ``appointed or'' each place that term 
     appears; and
       (C) in paragraph (3)--
       (i) by striking ``(3) Elected bank directors.--'' and 
     inserting ``(2) Election process.--''; and
       (ii) by striking ``elective'' each place that term appears;
       (7) in subsection (i)--
       (A) in paragraph (1), by striking ``Subject to paragraph 
     (2), each'' and inserting ``Each''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2) Annual report.--The Director shall include, in the 
     annual report submitted to the Congress pursuant to section 
     1319B of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992, information regarding the compensation 
     and expenses paid by the Federal Home Loan Banks to the 
     directors on the boards of directors of the Banks.''; and
       (8) by adding at the end the following:
       ``(l) Transition Rule.--Any member of the board of 
     directors of a Bank elected or appointed in accordance with 
     this section prior to the date of enactment of this 
     subsection may continue to serve as a member of that board of 
     directors for the remainder of the existing term of 
     service.''.

     SEC. 1203. DEFINITIONS.

       Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 
     1422) is amended--
       (1) by striking paragraphs (1), (10), and (11);
       (2) by redesignating paragraphs (2) through (9) as 
     paragraphs (1) through (8), respectively;
       (3) by redesignating paragraphs (12) and (13) as paragraphs 
     (9) and (10), respectively; and
       (4) by adding at the end the following:
       ``(11) Director.--The term `Director' means the Director of 
     the Federal Housing Finance Agency.
       ``(12) Agency.--The term `Agency' means the Federal Housing 
     Finance Agency, established under section 1311 of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992.''.

     SEC. 1204. AGENCY OVERSIGHT OF FEDERAL HOME LOAN BANKS.

       The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), 
     other than in provisions of that Act added or amended 
     otherwise by this Act, is amended--
       (1) by striking sections 2A and 2B (12 U.S.C. 1422a, 
     1422b);
       (2) by striking section 18 (12 U.S.C. 1438) and inserting 
     the following:

     ``SEC. 18. ADMINISTRATIVE PROVISIONS.

       ``(a) Acquisition Authority.--The Director of the Office of 
     Thrift Supervision, utilizing the services of the 
     Administrator of General Services (hereinafter referred to as 
     the `Administrator'), and subject to any limitation hereon 
     which may hereafter be imposed in appropriation Acts, is 
     hereby authorized--
       ``(1) to acquire, in the name of the United States, real 
     property in the District of Columbia, for the purposes set 
     forth in this section;
       ``(2) to construct, develop, furnish, and equip such 
     buildings thereon and such facilities as in its judgment may 
     be appropriate to provide, to such extent as the Director of 
     the Office of Thrift Supervision may deem advisable, suitable 
     and adequate quarters and facilities for the Director of the 
     Office of Thrift Supervision and the agencies under its 
     administration or supervision;
       ``(3) to enlarge, remodel, or reconstruct any of the same; 
     and
       ``(4) to make or enter into contracts for any of the 
     foregoing.
       ``(b) Advances.--The Director of the Office of Thrift 
     Supervision may require of the respective banks, and they 
     shall make to the Director of the Office of Thrift 
     Supervision, such advances of funds for the purposes set out 
     in subsection (a) as in the sole judgment of the Director of 
     the Office of Thrift Supervision may from time to time be 
     advisable. Such advances shall be apportioned by the Director 
     of the Office of Thrift Supervision among the banks in 
     proportion to the total assets of the respective banks, 
     determined in such manner and as of such times as the 
     Director of the Office of Thrift Supervision may prescribe. 
     Each such advance shall bear interest at the rate of 4\1/2\ 
     per centum per annum from the date of the advance and shall 
     be repaid by the Director of the Office of Thrift Supervision 
     in such installments and over such period, not longer than 
     twenty-five years from the making of the advance, as the 
     Director of the Office of Thrift Supervision may determine. 
     Payments of interest and principal upon such advances shall 
     be made from receipts of the Director of the Office of Thrift 
     Supervision or from other sources which may from time to time 
     be available to the Director of the Office of Thrift 
     Supervision. The obligation of the Director of the Office of 
     Thrift Supervision to make any such payment shall not be 
     regarded as an obligation of the United States. To such 
     extent as

[[Page 15925]]

     the Director of the Office of Thrift Supervision may 
     prescribe any such obligation shall be regarded as a legal 
     investment for the purposes of subsections (g) and (h) of 
     section 11 and for the purposes of section 16.
       ``(c) Plans and Designs.--The plans and designs for such 
     buildings and facilities and for any such enlargement, 
     remodeling, or reconstruction shall, to such extent as the 
     chairperson of the Director of the Office of Thrift 
     Supervision may request, be subject to the approval of the 
     Director.
       ``(d) Custody, Management and Control.--Upon the making of 
     arrangements mutually agreeable to the Director of the Office 
     of Thrift Supervision and the Administrator, which 
     arrangements may be modified from time to time by mutual 
     agreement between them and may include but shall not be 
     limited to the making of payments by the Director of the 
     Office of Thrift Supervision and such agencies to the 
     Administrator and by the Administrator to the Director of the 
     Office of Thrift Supervision, the custody, management, and 
     control of such buildings and facilities and of such real 
     property shall be vested in the Administrator in accordance 
     therewith. Until the making of such arrangements, such 
     custody, management, and control, including the assignment 
     and allotment and the reassignment and reallotment of 
     building and other space, shall be vested in the Director of 
     the Office of Thrift Supervision.
       ``(e) Proceeds.--Any proceeds (including advances) received 
     by the Director of the Office of Thrift Supervision in 
     connection with this subsection, and any proceeds from the 
     sale or other disposition of real or other property acquired 
     by the Director of the Office of Thrift Supervision under 
     this section, shall be considered as receipts of the Director 
     of the Office of Thrift Supervision, and obligations and 
     expenditures of the Director of the Office of Thrift 
     Supervision and such agencies in connection with this section 
     shall not be considered as administrative expenses. As used 
     in this section, the term `property' shall include interests 
     in property.
       ``(f) Budget Program.--
       ``(1) In general.--With respect to its functions under this 
     section, the Director of the Office of Thrift Supervision 
     shall--
       ``(A) annually prepare and submit a budget program as 
     provided in title I of the Government Corporation Control Act 
     with regard to wholly owned Government corporations, and for 
     purposes of this paragraph, the terms `wholly owned 
     Government corporations' and `Government corporations', 
     wherever used in such title, shall include the Director of 
     the Office of Thrift Supervision; and
       ``(B) maintain an integral set of accounts which shall be 
     audited by the General Accounting Office in accordance with 
     the principles and procedures applicable to commercial 
     corporate transactions, as provided in such title, and no 
     other settlement or adjustment shall be required with respect 
     to transactions under this section or with respect to claims, 
     demands, or accounts by or against any person arising 
     thereunder.
       ``(2) Miscellaneous provisions.--The first budget program 
     shall be for the first full fiscal year beginning on or after 
     the date of enactment of this subsection. Except as otherwise 
     provided in this section or by the Director of the Office of 
     Thrift Supervision, the provisions of this section and the 
     functions thereby or thereunder subsisting shall be 
     applicable and exercisable notwithstanding and without regard 
     to the Act of June 20, 1938 (D.C. Code, secs. 5-413--5-428), 
     except that the proviso of section 16 thereof shall apply to 
     any building constructed under this section, and section 306 
     of the Act of July 30, 1947 (61 Stat. 584), or any other 
     provision of law relating to the construction, alteration, 
     repair, or furnishing of public or other buildings or 
     structures or the obtaining of sites therefor, but any person 
     or body in whom any such function is vested may provide for 
     delegation or redelegation of the exercise of such function.
       ``(g) Limitation.--No obligation shall be incurred and no 
     expenditure, except in liquidation of obligation, shall be 
     made pursuant to paragraphs (1) and (2) of subsection (a), if 
     the total amount of all obligations incurred pursuant thereto 
     would thereupon exceed $13,200,000, or such greater amount as 
     may be provided in an appropriations Act or other law.''.
       (3) in section 11 (12 U.S.C. 1431)--
       (A) in subsection (b)--
       (i) in the first sentence--

       (I) by striking ``The Board'' and inserting ``The Office of 
     Finance, as agent for the Banks,''; and
       (II) by striking ``the Board'' and inserting ``such 
     Office''; and

       (ii) in the second and fourth sentences, by striking ``the 
     Board'' each place such term appears and inserting ``the 
     Office of Finance'';
       (B) in subsection (c)--
       (i) by striking ``the Board'' the first place such term 
     appears and inserting ``the Office of Finance, as agent for 
     the Banks,''; and
       (ii) by striking ``the Board'' the second place such term 
     appears and inserting ``such Office''; and
       (C) in subsection (f)--
       (i) by striking the 2 commas after ``permit'' and inserting 
     ``or''; and
       (ii) by striking the comma after ``require'';
       (4) in section 6 (12 U.S.C. 1426)--
       (A) in subsection (b)(1), in the matter preceding 
     subparagraph (A), by striking ``Finance Board approval'' and 
     inserting ``approval by the Director''; and
       (B) in each of subsections (c)(4)(B) and (d)(2), by 
     striking ``Finance Board regulations'' each place that term 
     appears and inserting ``regulations of the Director'';
       (5) in section 10(b) (12 U.S.C. 1430(b))--
       (A) in the subsection heading, by striking ``Formal Board 
     Resolution'' and inserting ``Approval of Director''; and
       (B) by striking ``by formal resolution'';
       (6) in section 21(b)(5) (12 U.S.C. 1441(b)(5)), by striking 
     ``Chairperson of the Federal Housing Finance Board'' and 
     inserting ``Director'';
       (7) in section 15 (12 U.S.C. 1435), by inserting ``or the 
     Director'' after ``the Board'';
       (8) by striking ``the Board'' each place that term appears 
     and inserting ``the Director'';
       (9) by striking ``The Board'' each place that term appears 
     and inserting ``The Director'';
       (10) by striking ``the Finance Board'' each place that term 
     appears and inserting ``the Director'';
       (11) by striking ``The Finance Board'' each place that term 
     appears and inserting ``The Director''; and
       (12) by striking ``Federal Housing Finance Board'' each 
     place that term appears and inserting ``Director''.

     SEC. 1205. HOUSING GOALS.

       The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is 
     amended by inserting after section 10b the following new 
     section:

     ``SEC. 10C. HOUSING GOALS.

       ``(a) In General.--The Director shall establish housing 
     goals with respect to the purchase of mortgages, if any, by 
     the Federal Home Loan Banks. Such goals shall be consistent 
     with the goals established under sections 1331 through 1334 
     of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992.
       ``(b) Considerations.--In establishing the goals required 
     by subsection (a), the Director shall consider the unique 
     mission and ownership structure of the Federal Home Loan 
     Banks.
       ``(c) Transition Period.--To facilitate an orderly 
     transition, the Director shall establish interim target goals 
     for purposes of this section for each of the 2 calendar years 
     following the date of enactment of this section.
       ``(d) Monitoring and Enforcement of Goals.--The 
     requirements of section 1336 of the Federal Housing 
     Enterprises Safety and Soundness Act of 1992, shall apply to 
     this section, in the same manner and to the same extent as 
     that section applies to the Federal housing enterprises.
       ``(e) Annual Report.--The Director shall annually report to 
     Congress on the performance of the Banks in meeting the goals 
     established under this section.''.

     SEC. 1206. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS.

       Section 4(a)(1) of the Federal Home Loan Bank Act (12 
     U.S.C. 1424(a)(1)) is amended--
       (1) by inserting after ``savings bank,'' the following: 
     ``community development financial institution,''; and
       (2) in subparagraph (B), by inserting after ``United 
     States,'' the following: ``or, in the case of a community 
     development financial institution, is certified as a 
     community development financial institution under the 
     Community Development Banking and Financial Institutions Act 
     of 1994.''.

     SEC. 1207. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN 
                   BANKS.

       The Federal Home Loan Bank Act is amended by inserting 
     after section 20 (12 U.S.C. 1440) the following new section:

     ``SEC. 20A. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN 
                   BANKS.

       ``(a) Information on Financial Condition.--In order to 
     enable each Federal Home Loan Bank to evaluate the financial 
     condition of one or more of the other Federal Home Loan Banks 
     individually and the Federal Home Loan Bank System (including 
     any risks associated with the issuance or repayment of 
     consolidated Federal Home Loan Bank bonds and debentures or 
     other borrowings and the joint and several liabilities of the 
     Banks incurred due to such borrowings), as well as to comply 
     with any of its obligations under the Securities Exchange Act 
     of 1934 (15 U.S.C. 78a et seq.), the Director shall make 
     available to the Banks such reports, records, or other 
     information as may be available, relating to the condition of 
     any Federal Home Loan Bank.
       ``(b) Sharing of Information.--
       ``(1) In general.--The Director shall promulgate 
     regulations to facilitate the sharing of information made 
     available under subsection (a) directly among the Federal 
     Home Loan Banks.
       ``(2) Limitation.--Notwithstanding paragraph (1), a Federal 
     Home Loan Bank responding to a request from another Bank or 
     from the Director for information pursuant to this section 
     may request that the Director determine that such information 
     is proprietary and that the public interest requires that 
     such information not be shared.
       ``(c) Limitation.--Nothing in this section shall affect the 
     obligations of any Federal Home Loan Bank under the 
     Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) or 
     the regulations issued by the Securities and Exchange 
     Commission thereunder.''.

     SEC. 1208. EXCLUSION FROM CERTAIN REQUIREMENTS.

       (a) In General.--The Federal Home Loan Banks shall be 
     exempt from compliance with--
       (1) sections 13(e), 14(a), and 14(c) of the Securities 
     Exchange Act of 1934, and related Commission regulations;
       (2) section 15 of the Securities Exchange Act of 1934, and 
     related Commission regulations, with respect to transactions 
     in the capital stock of a Federal Home Loan Bank;
       (3) section 17A of the Securities Exchange Act of 1934, and 
     related Commission regulations,

[[Page 15926]]

     with respect to the transfer of the securities of a Federal 
     Home Loan Bank; and
       (4) the Trust Indenture Act of 1939.
       (b) Member Exemption.--The members of the Federal Home Loan 
     Bank System shall be exempt from compliance with sections 
     13(d), 13(f), 13(g), 14(d), and 16 of the Securities Exchange 
     Act of 1934, and related Commission regulations, with respect 
     to ownership of or transactions in the capital stock of the 
     Federal Home Loan Banks by such members.
       (c) Exempted and Government Securities.--
       (1) Capital stock.--The capital stock issued by each of the 
     Federal Home Loan Banks under section 6 of the Federal Home 
     Loan Bank Act are--
       (A) exempted securities, within the meaning of section 
     3(a)(2) of the Securities Act of 1933; and
       (B) exempted securities, within the meaning of section 
     3(a)(12)(A) of the Securities Exchange Act of 1934, except to 
     the extent provided in section 38 of that Act.
       (2) Other obligations.--The debentures, bonds, and other 
     obligations issued under section 11 of the Federal Home Loan 
     Bank Act (12 U.S.C. 1431) are--
       (A) exempted securities, within the meaning of section 
     3(a)(2) of the Securities Act of 1933;
       (B) government securities, within the meaning of section 
     3(a)(42) of the Securities Exchange Act of 1934; and
       (C) government securities, within the meaning of section 
     2(a)(16) of the Investment Company Act of 1940.
       (3) Brokers and dealers.--A person (other than a Federal 
     Home Loan Bank effecting transactions for members of the 
     Federal Home Loan Bank System) that effects transactions in 
     the capital stock or other obligations of a Federal Home Loan 
     Bank, for the account of others or for that person's own 
     account, as applicable, is a broker or dealer, as those terms 
     are defined in paragraphs (4) and (5), respectively, of 
     section 3(a) of the Securities Exchange Act of 1934, but is 
     excluded from the definition of--
       (A) the term ``government securities broker'' under section 
     3(a)(43) of the Securities Exchange Act of 1934; and
       (B) the term ``government securities dealer'' under section 
     3(a)(44) of the Securities Exchange Act of 1934.
       (d) Exemption From Reporting Requirements.--The Federal 
     Home Loan Banks shall be exempt from periodic reporting 
     requirements under the securities laws pertaining to the 
     disclosure of--
       (1) related party transactions that occur in the ordinary 
     course of the business of the Banks with members; and
       (2) the unregistered sales of equity securities.
       (e) Tender Offers.--Commission rules relating to tender 
     offers shall not apply in connection with transactions in the 
     capital stock of the Federal Home Loan Banks.
       (f) Regulations.--
       (1) In general.--The Commission shall promulgate such rules 
     and regulations as may be necessary or appropriate in the 
     public interest or in furtherance of this section and the 
     exemptions provided in this section.
       (2) Considerations.--In issuing regulations under this 
     section, the Commission shall consider the distinctive 
     characteristics of the Federal Home Loan Banks when 
     evaluating--
       (A) the accounting treatment with respect to the payment to 
     the Resolution Funding Corporation;
       (B) the role of the combined financial statements of the 
     Federal Home Loan Banks;
       (C) the accounting classification of redeemable capital 
     stock; and
       (D) the accounting treatment related to the joint and 
     several nature of the obligations of the Banks.
       (g) Definitions.--As used in this section--
       (1) the terms ``Bank'', ``Federal Home Loan Bank'', 
     ``member'', and ``Federal Home Loan Bank System'' have the 
     same meanings as in section 2 of the Federal Home Loan Bank 
     Act (12 U.S.C. 1422);
       (2) the term ``Commission'' means the Securities and 
     Exchange Commission; and
       (3) the term ``securities laws'' has the same meaning as in 
     section 3(a)(47) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78c(a)(47)).

     SEC. 1209. VOLUNTARY MERGERS.

       Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 
     1446) is amended--
       (1) by striking ``Whenever'' and inserting ``(a) In 
     General.--Whenever''; and
       (2) by adding at the end the following:
       ``(b) Voluntary Mergers Authorized.--
       ``(1) In general.--Any Federal Home Loan Bank may, with the 
     approval of the Director and of the boards of directors of 
     the Banks involved, merge with another Bank.
       ``(2) Regulations required.--The Director shall promulgate 
     regulations establishing the conditions and procedures for 
     the consideration and approval of any voluntary merger 
     described in paragraph (1), including the procedures for Bank 
     member approval.''.

     SEC. 1210. AUTHORITY TO REDUCE DISTRICTS.

       Section 3 of the Federal Home Loan Bank Act (12 U.S.C. 
     1423) is amended--
       (1) by striking ``As soon'' and inserting ``(a) In 
     General.--As soon''; and
       (2) by adding at the end the following:
       ``(b) Authority To Reduce Districts.--Notwithstanding 
     subsection (a), the number of districts may be reduced to a 
     number less than 8--
       ``(1) pursuant to a voluntary merger between Banks, as 
     approved pursuant to section 26(b); or
       ``(2) pursuant to a decision by the Director to liquidate a 
     Bank pursuant to section 1367 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992.''.

     SEC. 1211. COMMUNITY FINANCIAL INSTITUTION MEMBERS.

       (a) Total Asset Requirement.--Paragraph (10) of section 2 
     of the Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so 
     redesignated by section 201(3) of this Act, is amended by 
     striking ``$500,000,000'' each place such term appears and 
     inserting ``$1,000,000,000''.
       (b) Use of Advances for Community Development Activities.--
     Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C. 
     1430(a)) is amended--
       (1) in paragraph (2)(B)--
       (A) by striking ``and''; and
       (B) by inserting ``, and community development activities'' 
     before the period at the end;
       (2) in paragraph (3)(E), by inserting ``or community 
     development activities'' after ``agriculture,''; and
       (3) in paragraph (6)--
       (A) by striking ``and''; and
       (B) by inserting ``, and `community development activities' 
     '' before ``shall''.

     SEC. 1212. PUBLIC USE DATABASE; REPORTS TO CONGRESS.

       Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 
     1430) is amended--
       (1) in subsection (j)(12)--
       (A) by striking subparagraph (C) and inserting the 
     following:
       ``(C) Reports.--The Director shall annually report to the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on Financial Services of the House 
     of Representatives on the collateral pledged to the Banks, 
     including an analysis of collateral by type and by Bank 
     district.''; and
       (B) by adding at the end the following:
       ``(D) Submission to congress.--The Director shall submit 
     the reports under subparagraphs (A) and (C) to the Committee 
     on Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives, not later than 180 days after the date of 
     enactment of the Federal Housing Finance Regulatory Reform 
     Act of 2008.''; and
       (2) by adding at the end the following:
       ``(k) Public Use Database.--
       ``(1) Data.--Each Federal Home Loan Bank shall provide to 
     the Director, in a form determined by the Director, census 
     tract level data relating to mortgages purchased, if any, 
     including--
       ``(A) data consistent with that reported under section 1323 
     of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992;
       ``(B) data elements required to be reported under the Home 
     Mortgage Disclosure Act of 1975; and
       ``(C) any other data elements that the Director considers 
     appropriate.
       ``(2) Public use database.--
       ``(A) In general.--The Director shall make available to the 
     public, in a form that is useful to the public (including 
     forms accessible electronically), and to the extent 
     practicable, the data provided to the Director under 
     paragraph (1).
       ``(B) Proprietary information.--Not withstanding 
     subparagraph (A), the Director may not provide public access 
     to, or disclose to the public, any information required to be 
     submitted under this subsection that the Director determines 
     is proprietary or that would provide personally identifiable 
     information and that is not otherwise publicly accessible 
     through other forms, unless the Director determines that it 
     is in the public interest to provide such information.''.

     SEC. 1213. SEMIANNUAL REPORTS.

       Section 21B of the Federal Home Loan Bank Act is amended in 
     subsection (f)(2)(C), by adding at the end the following:
       ``(v) Semiannual reports.--The Director shall report 
     semiannually to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives on the projected date for the 
     completion of contributions required by this section.''.

     SEC. 1214. LIQUIDATION OR REORGANIZATION OF A FEDERAL HOME 
                   LOAN BANK.

       Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 
     1446) is amended by adding at the end the following: ``At 
     least 30 days prior to liquidating or reorganizing any Bank 
     under this section, the Director shall notify the Bank of its 
     determination and the facts and circumstances upon which such 
     determination is based. The Bank may contest that 
     determination in a hearing before the Director, in which all 
     issues shall be determined on the record pursuant to section 
     554 of title 5, United States Code.''.

     SEC. 1215. STUDY AND REPORT TO CONGRESS ON SECURITIZATION OF 
                   ACQUIRED MEMBER ASSETS.

       (a) Study.--The Director shall conduct a study on 
     securitization of home mortgage loans purchased or to be 
     purchased from member financial institutions under the 
     Acquired Member Assets programs. In conducting the study, the 
     Director shall establish a process for the formal submission 
     of comments.
       (b) Elements.--The study shall encompass--
       (1) the benefits and risks associated with securitization 
     of Acquired Member Assets;
       (2) the potential impact of securitization upon liquidity 
     in the mortgage and broader credit markets;
       (3) the ability of the Federal Home Loan Bank or Banks in 
     question to manage the risks associated with such a program;
       (4) the impact of such a program on the existing activities 
     of the Banks, including their mortgage portfolios and 
     advances; and

[[Page 15927]]

       (5) the joint and several liability of the Banks and the 
     cooperative structure of the Federal Home Loan Bank System.
       (c) Consultations.--In conducting the study under this 
     section, the Director shall consult with the Federal Home 
     Loan Banks, the Banks' fiscal agent, representatives of the 
     mortgage lending industry, practitioners in the structured 
     finance field, and other experts as needed.
       (d) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Director shall submit a report to 
     Congress on the results of the study conducted under 
     subsection (a), including policy recommendations based on the 
     analysis of the Director of the feasibility of mortgage-
     backed securities issuance by a Federal Home Loan Bank or 
     Banks and the risks and benefits associated with such program 
     or programs.
       (e) Definitions.--As used in this section, the terms 
     ``member'', ``Bank'', and ``Federal Home Loan Bank'' have the 
     same meanings as in section 2 of the Federal Home Loan Bank 
     Act (12 U.S.C. 1422).

     SEC. 1216. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Right to Financial Privacy Act of 1978.--Section 
     1113(o) of the Right to Financial Privacy Act of 1978 (12 
     U.S.C. 3413(o)) is amended--
       (1) by striking ``Federal Housing Finance Board'' and 
     inserting ``Federal Housing Finance Agency''; and
       (2) by striking ``Federal Housing Finance Board's'' and 
     inserting ``Federal Housing Finance Agency's''.
       (b) Riegle Community Development and Regulatory Improvement 
     Act of 1994.--Section 117(e) of the Riegle Community 
     Development and Regulatory Improvement Act of 1994 (12 U.S.C. 
     4716(e)) is amended by striking ``Federal Housing Finance 
     Board'' and inserting ``Federal Housing Finance Agency''.
       (c) Title 18, United States Code.--Title 18, United States 
     Code, is amended by striking ``Federal Housing Finance 
     Board'' each place such term appears in each of sections 212, 
     657, 1006, and 1014, and inserting ``Federal Housing Finance 
     Agency''.
       (d) MAHRA Act of 1997.--Section 517(b)(4) of the 
     Multifamily Assisted Housing Reform and Affordability Act of 
     1997 (42 U.S.C. 1437f note) is amended by striking ``Federal 
     Housing Finance Board'' and inserting ``Federal Housing 
     Finance Agency''.
       (e) Title 44, United States Code.--Section 3502(5) of title 
     44, United States Code, is amended by striking ``Federal 
     Housing Finance Board'' and inserting ``Federal Housing 
     Finance Agency''.
       (f) Access to Local TV Act of 2000.--Section 
     1004(d)(2)(D)(iii) of the Launching Our Communities' Access 
     to Local Television Act of 2000 (47 U.S.C. 
     1103(d)(2)(D)(iii)) is amended by striking ``Office of 
     Federal Housing Enterprise Oversight, the Federal Housing 
     Finance Board'' and inserting ``Federal Housing Finance 
     Agency''.
       (g) FIRREA.--Section 1216 of the Financial Institutions 
     Reform, Recovery, and Enhancement Act of 1989 (12 U.S.C. 
     1833e) is amended--
       (1) in subsection (a), by striking paragraph (3) and 
     inserting the following:
       ``(3) the Federal Housing Finance Agency;'';
       (2) in subsection (b), by striking ``Federal National 
     Mortgage Association'' and inserting ``Federal Home Loan 
     Banks, the Federal National Mortgage Association,''; and
       (3) in subsection (c), by striking ``Finance Board'' and 
     inserting ``Finance Agency''.

     SEC. 1217. STUDY ON FEDERAL HOME LOAN BANK ADVANCES.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Director shall conduct a study and 
     submit a report to the Committee on Banking, Housing, and 
     Urban Affairs of the Senate and the Committee on Financial 
     Services of the House or Representatives on the extent to 
     which loans and securities used as collateral to support 
     Federal Home Loan Bank advances are consistent with the 
     interagency guidance on nontraditional mortgage products.
       (b) Required Content.--The study required under subsection 
     (a) shall--
       (1) consider and recommend any additional regulations, 
     guidance, advisory bulletins, or other administrative actions 
     necessary to ensure that the Federal Home Loan Banks are not 
     supporting loans with predatory characteristics; and
       (2) include an opportunity for the public to comment on any 
     recommendations made under paragraph (1).

     SEC. 1218. FEDERAL HOME LOAN BANK REFINANCING AUTHORITY FOR 
                   CERTAIN RESIDENTIAL MORTGAGE LOANS.

       Section 10(j)(2) of the Federal Home Loan Bank Act (12 
     U.S.C. 1430(j)(2)) is amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) during the 2-year period beginning on the date of 
     enactment of this subparagraph, refinance loans that are 
     secured by a first mortgage on a primary residence of any 
     family having an income at or below 80 percent of the median 
     income for the area.''.

TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND 
                   THE FEDERAL HOUSING FINANCE BOARD

                           Subtitle A--OFHEO

     SEC. 1301. ABOLISHMENT OF OFHEO.

       (a) In General.--Effective at the end of the 1-year period 
     beginning on the date of enactment of this Act, the Office of 
     Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development and the positions of the 
     Director and Deputy Director of such Office are abolished.
       (b) Disposition of Affairs.--During the 1-year period 
     beginning on the date of enactment of this Act, the Director 
     of the Office of Federal Housing Enterprise Oversight, solely 
     for the purpose of winding up the affairs of the Office of 
     Federal Housing Enterprise Oversight--
       (1) shall manage the employees of such Office and provide 
     for the payment of the compensation and benefits of any such 
     employee which accrue before the effective date of the 
     transfer of such employee under section 1303; and
       (2) may take any other action necessary for the purpose of 
     winding up the affairs of the Office.
       (c) Status of Employees Before Transfer.--The amendments 
     made by title I and the abolishment of the Office of Federal 
     Housing Enterprise Oversight under subsection (a) of this 
     section may not be construed to affect the status of any 
     employee of such Office as an employee of an agency of the 
     United States for purposes of any other provision of law 
     before the effective date of the transfer of any such 
     employee under section 1303.
       (d) Use of Property and Services.--
       (1) Property.--The Director may use the property of the 
     Office of Federal Housing Enterprise Oversight to perform 
     functions which have been transferred to the Director for 
     such time as is reasonable to facilitate the orderly transfer 
     of functions transferred under any other provision of this 
     Act or any amendment made by this Act to any other provision 
     of law.
       (2) Agency services.--Any agency, department, or other 
     instrumentality of the United States, and any successor to 
     any such agency, department, or instrumentality, which was 
     providing supporting services to the Office of Federal 
     Housing Enterprise Oversight before the expiration of the 
     period under subsection (a) in connection with functions that 
     are transferred to the Director shall--
       (A) continue to provide such services, on a reimbursable 
     basis, until the transfer of such functions is complete; and
       (B) consult with any such agency to coordinate and 
     facilitate a prompt and reasonable transition.
       (e) Continuation of Services.--The Director may use the 
     services of employees and other personnel of the Office of 
     Federal Housing Enterprise Oversight, on a reimbursable 
     basis, to perform functions which have been transferred to 
     the Director for such time as is reasonable to facilitate the 
     orderly transfer of functions pursuant to any other provision 
     of this Act or any amendment made by this Act to any other 
     provision of law.
       (f) Savings Provisions.--
       (1) Existing rights, duties, and obligations not 
     affected.--Subsection (a) shall not affect the validity of 
     any right, duty, or obligation of the United States, the 
     Director of the Office of Federal Housing Enterprise 
     Oversight, or any other person, which--
       (A) arises under--
       (i) the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992;
       (ii) the Federal National Mortgage Association Charter Act;
       (iii) the Federal Home Loan Mortgage Corporation Act; or
       (iv) any other provision of law applicable with respect to 
     such Office; and
       (B) existed on the day before the date of abolishment under 
     subsection (a).
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Director of the Office of Federal 
     Housing Enterprise Oversight in connection with functions 
     that are transferred to the Director of the Federal Housing 
     Finance Agency shall abate by reason of the enactment of this 
     Act, except that the Director of the Federal Housing Finance 
     Agency shall be substituted for the Director of the Office of 
     Federal Housing Enterprise Oversight as a party to any such 
     action or proceeding.

     SEC. 1302. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.

       (a) In General.--All regulations, orders, and 
     determinations described in subsection (b) shall remain in 
     effect according to the terms of such regulations, orders, 
     and determinations, and shall be enforceable by or against 
     the Director or the Secretary of Housing and Urban 
     Development, as the case may be, until modified, terminated, 
     set aside, or superseded in accordance with applicable law by 
     the Director or the Secretary, as the case may be, any court 
     of competent jurisdiction, or operation of law.
       (b) Applicability.--A regulation, order, or determination 
     is described in this subsection if it--
       (1) was issued, made, prescribed, or allowed to become 
     effective by--
       (A) the Office of Federal Housing Enterprise Oversight;
       (B) the Secretary of Housing and Urban Development, and 
     relates to the authority of the Secretary under--
       (i) the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992;
       (ii) the Federal National Mortgage Association Charter Act, 
     with respect to the Federal National Mortgage Association; or
       (iii) the Federal Home Loan Mortgage Corporation Act, with 
     respect to the Federal Home Loan Mortgage Corporation; or
       (C) a court of competent jurisdiction, and relates to 
     functions transferred by this Act; and

[[Page 15928]]

       (2) is in effect on the effective date of the abolishment 
     under section 1301(a).

     SEC. 1303. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

       (a) Transfer.--Each employee of the Office of Federal 
     Housing Enterprise Oversight shall be transferred to the 
     Agency for employment, not later than the effective date of 
     the abolishment under section 1301(a), and such transfer 
     shall be deemed a transfer of function for purposes of 
     section 3503 of title 5, United States Code.
       (b) Guaranteed Positions.--
       (1) In general.--Each employee transferred under subsection 
     (a) shall be guaranteed a position with the same status, 
     tenure, grade, and pay as that held on the day immediately 
     preceding the transfer.
       (2) No involuntary separation or reduction.--An employee 
     transferred under subsection (a) holding a permanent position 
     on the day immediately preceding the transfer may not be 
     involuntarily separated or reduced in grade or compensation 
     during the 12-month period beginning on the date of transfer, 
     except for cause, or, in the case of a temporary employee, 
     separated in accordance with the terms of the appointment of 
     the employee.
       (c) Appointment Authority for Excepted and Senior Executive 
     Service Employees.--
       (1) In general.--In the case of an employee occupying a 
     position in the excepted service or the Senior Executive 
     Service, any appointment authority established under law or 
     by regulations of the Office of Personnel Management for 
     filling such position shall be transferred, subject to 
     paragraph (2).
       (2) Decline of transfer.--The Director may decline a 
     transfer of authority under paragraph (1) to the extent that 
     such authority relates to--
       (A) a position excepted from the competitive service 
     because of its confidential, policymaking, policy-
     determining, or policy-advocating character; or
       (B) a noncareer position in the Senior Executive Service 
     (within the meaning of section 3132(a)(7) of title 5, United 
     States Code).
       (d) Reorganization.--If the Director determines, after the 
     end of the 1-year period beginning on the effective date of 
     the abolishment under section 1301(a), that a reorganization 
     of the combined workforce is required, that reorganization 
     shall be deemed a major reorganization for purposes of 
     affording affected employee retirement under section 
     8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code.
       (e) Employee Benefit Programs.--
       (1) In general.--Any employee of the Office of Federal 
     Housing Enterprise Oversight accepting employment with the 
     Agency as a result of a transfer under subsection (a) may 
     retain, for 12 months after the date on which such transfer 
     occurs, membership in any employee benefit program of the 
     Agency or the Office of Federal Housing Enterprise Oversight 
     of the Department of Housing and Urban Development, as 
     applicable, including insurance, to which such employee 
     belongs on the date of the abolishment under section 1301(a), 
     if--
       (A) the employee does not elect to give up the benefit or 
     membership in the program; and
       (B) the benefit or program is continued by the Director of 
     the Federal Housing Finance Agency.
       (2) Cost differential.--
       (A) In general.--The difference in the costs between the 
     benefits which would have been provided by the Office of 
     Federal Housing Enterprise Oversight and those provided by 
     this section shall be paid by the Director.
       (B) Health insurance.--If any employee elects to give up 
     membership in a health insurance program or the health 
     insurance program is not continued by the Director, the 
     employee shall be permitted to select an alternate Federal 
     health insurance program not later than 30 days after the 
     date of such election or notice, without regard to any other 
     regularly scheduled open season.

     SEC. 1304. TRANSFER OF PROPERTY AND FACILITIES.

       Upon the effective date of its abolishment under section 
     1301(a), all property of the Office of Federal Housing 
     Enterprise Oversight shall transfer to the Agency.

               Subtitle B--Federal Housing Finance Board

     SEC. 1311. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.

       (a) In General.--Effective at the end of the 1-year period 
     beginning on the date of enactment of this Act, the Federal 
     Housing Finance Board (in this subtitle referred to as the 
     ``Board'') is abolished.
       (b) Disposition of Affairs.--During the 1-year period 
     beginning on the date of enactment of this Act, the Board, 
     solely for the purpose of winding up the affairs of the 
     Board--
       (1) shall manage the employees of the Board and provide for 
     the payment of the compensation and benefits of any such 
     employee which accrue before the effective date of the 
     transfer of such employee under section 1313; and
       (2) may take any other action necessary for the purpose of 
     winding up the affairs of the Board.
       (c) Status of Employees Before Transfer.--The amendments 
     made by titles I and II and the abolishment of the Board 
     under subsection (a) may not be construed to affect the 
     status of any employee of the Board as an employee of an 
     agency of the United States for purposes of any other 
     provision of law before the effective date of the transfer of 
     any such employee under section 1313.
       (d) Use of Property and Services.--
       (1) Property.--The Director may use the property of the 
     Board to perform functions which have been transferred to the 
     Director, for such time as is reasonable to facilitate the 
     orderly transfer of functions transferred under any other 
     provision of this Act or any amendment made by this Act to 
     any other provision of law.
       (2) Agency services.--Any agency, department, or other 
     instrumentality of the United States, and any successor to 
     any such agency, department, or instrumentality, which was 
     providing supporting services to the Board before the 
     expiration of the 1-year period under subsection (a) in 
     connection with functions that are transferred to the 
     Director shall--
       (A) continue to provide such services, on a reimbursable 
     basis, until the transfer of such functions is complete; and
       (B) consult with any such agency to coordinate and 
     facilitate a prompt and reasonable transition.
       (e) Continuation of Services.--The Director may use the 
     services of employees and other personnel of the Board, on a 
     reimbursable basis, to perform functions which have been 
     transferred to the Director for such time as is reasonable to 
     facilitate the orderly transfer of functions pursuant to any 
     other provision of this Act or any amendment made by this Act 
     to any other provision of law.
       (f) Savings Provisions.--
       (1) Existing rights, duties, and obligations not 
     affected.--Subsection (a) shall not affect the validity of 
     any right, duty, or obligation of the United States, a member 
     of the Board, or any other person, which--
       (A) arises under the Federal Home Loan Bank Act, or any 
     other provision of law applicable with respect to the Board; 
     and
       (B) existed on the day before the effective date of the 
     abolishment under subsection (a).
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Board in connection with 
     functions that are transferred under this Act to the Director 
     shall abate by reason of the enactment of this Act, except 
     that the Director shall be substituted for the Board or any 
     member thereof as a party to any such action or proceeding.

     SEC. 1312. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.

       (a) In General.--All regulations, orders, determinations, 
     and resolutions described under subsection (b) shall remain 
     in effect according to the terms of such regulations, orders, 
     determinations, and resolutions, and shall be enforceable by 
     or against the Director until modified, terminated, set 
     aside, or superseded in accordance with applicable law by the 
     Director, any court of competent jurisdiction, or operation 
     of law.
       (b) Applicability.--A regulation, order, determination, or 
     resolution is described under this subsection if it--
       (1) was issued, made, prescribed, or allowed to become 
     effective by--
       (A) the Board; or
       (B) a court of competent jurisdiction, and relates to 
     functions transferred by this Act; and
       (2) is in effect on the effective date of the abolishment 
     under section 1311(a).

     SEC. 1313. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL 
                   HOUSING FINANCE BOARD.

       (a) Transfer.--Each employee of the Board shall be 
     transferred to the Agency for employment, not later than the 
     effective date of the abolishment under section 1311(a), and 
     such transfer shall be deemed a transfer of function for 
     purposes of section 3503 of title 5, United States Code.
       (b) Guaranteed Positions.--
       (1) In general.--Each employee transferred under subsection 
     (a) shall be guaranteed a position with the same status, 
     tenure, grade, and pay as that held on the day immediately 
     preceding the transfer.
       (2) No involuntary separation or reduction.--An employee 
     holding a permanent position on the day immediately preceding 
     the transfer may not be involuntarily separated or reduced in 
     grade or compensation during the 12-month period beginning on 
     the date of transfer, except for cause, or, if the employee 
     is a temporary employee, separated in accordance with the 
     terms of the appointment of the employee.
       (c) Appointment Authority for Excepted Employees.--
       (1) In general.--In the case of an employee occupying a 
     position in the excepted service, any appointment authority 
     established under law or by regulations of the Office of 
     Personnel Management for filling such position shall be 
     transferred, subject to paragraph (2).
       (2) Decline of transfer.--The Director may decline a 
     transfer of authority under paragraph (1), to the extent that 
     such authority relates to a position excepted from the 
     competitive service because of its confidential, 
     policymaking, policy-determining, or policy-advocating 
     character.
       (d) Reorganization.--If the Director determines, after the 
     end of the 1-year period beginning on the effective date of 
     the abolishment under section 1311(a), that a reorganization 
     of the combined workforce is required, that reorganization 
     shall be deemed a major reorganization for purposes of 
     affording affected employee retirement under section 
     8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code.
       (e) Employee Benefit Programs.--
       (1) In general.--Any employee of the Board accepting 
     employment with the Agency as a result of a transfer under 
     subsection (a) may retain, for 12 months after the date on 
     which such transfer occurs, membership in any employee 
     benefit program of the Agency or the Board, as applicable, 
     including insurance, to which such employee belongs on the 
     effective date of the abolishment under section 1311(a) if--

[[Page 15929]]

       (A) the employee does not elect to give up the benefit or 
     membership in the program; and
       (B) the benefit or program is continued by the Director.
       (2) Cost differential.--
       (A) In general.--The difference in the costs between the 
     benefits which would have been provided by the Board and 
     those provided by this section shall be paid by the Director.
       (B) Health insurance.--If any employee elects to give up 
     membership in a health insurance program or the health 
     insurance program is not continued by the Director, the 
     employee shall be permitted to select an alternate Federal 
     health insurance program not later than 30 days after the 
     date of such election or notice, without regard to any other 
     regularly scheduled open season.

     SEC. 1314. TRANSFER OF PROPERTY AND FACILITIES.

       Upon the effective date of the abolishment under section 
     1311(a), all property of the Board shall transfer to the 
     Agency.

                     TITLE IV--HOPE FOR HOMEOWNERS

     SEC. 1401. SHORT TITLE.

       This title may be cited as the ``HOPE for Homeowners Act of 
     2008''.

     SEC. 1402. ESTABLISHMENT OF HOPE FOR HOMEOWNERS PROGRAM.

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

     ``SEC. 257. HOPE FOR HOMEOWNERS PROGRAM.

       ``(a) Establishment.--There is established in the Federal 
     Housing Administration a HOPE for Homeowners Program.
       ``(b) Purpose.--The purpose of the HOPE for Homeowners 
     Program is--
       ``(1) to create an FHA program, participation in which is 
     voluntary on the part of homeowners and existing loan holders 
     to insure refinanced loans for distressed borrowers to 
     support long-term, sustainable homeownership;
       ``(2) to allow homeowners to avoid foreclosure by reducing 
     the principle balance outstanding, and interest rate charged, 
     on their mortgages;
       ``(3) to help stabilize and provide confidence in mortgage 
     markets by bringing transparency to the value of assets based 
     on mortgage assets;
       ``(4) to target mortgage assistance under this section to 
     homeowners for their principal residence;
       ``(5) to enhance the administrative capacity of the FHA to 
     carry out its expanded role under the HOPE for Homeowners 
     Program;
       ``(6) to ensure the HOPE for Homeowners Program remains in 
     effect only for as long as is necessary to provide stability 
     to the housing market; and
       ``(7) to provide servicers of delinquent mortgages with 
     additional methods and approaches to avoid foreclosure.
       ``(c) Establishment and Implementation of Program 
     Requirements.--
       ``(1) Duties of the board.--In order to carry out the 
     purposes of the HOPE for Homeowners Program, the Board 
     shall--
       ``(A) establish requirements and standards for the program; 
     and
       ``(B) prescribe such regulations and provide such guidance 
     as may be necessary or appropriate to implement such 
     requirements and standards.
       ``(2) Duties of the secretary.--In carrying out any of the 
     program requirements or standards established under paragraph 
     (1), the Secretary may issue such interim guidance and 
     mortgagee letters as the Secretary determines necessary or 
     appropriate.
       ``(d) Insurance of Mortgages.--The Secretary is authorized 
     upon application of a mortgagee to make commitments to insure 
     or to insure any eligible mortgage that has been refinanced 
     in a manner meeting the requirements under subsection (e).
       ``(e) Requirements of Insured Mortgages.--To be eligible 
     for insurance under this section, a refinanced eligible 
     mortgage shall comply with all of the following requirements:
       ``(1) Lack of capacity to pay existing mortgage.--
       ``(A) Borrower certification.--
       ``(i) In general.--The mortgagor shall provide 
     certification to the Secretary that the mortgagor has not 
     intentionally defaulted on the mortgage or any other debt, 
     and has not knowingly, or willfully and with actual 
     knowledge, furnished material information known to be false 
     for the purpose of obtaining any eligible mortgage.
       ``(ii) Penalties.--

       ``(I) False statement.--Any certification filed pursuant to 
     clause (i) shall contain an acknowledgment that any willful 
     false statement made in such certification is punishable 
     under section 1001, of title 18, United States Code, by fine 
     or imprisonment of not more than 5 years, or both.
       ``(II) Liability for repayment.--The mortgagor shall agree 
     in writing that the mortgagor shall be liable to repay to the 
     Federal Housing Administration any direct financial benefit 
     achieved from the reduction of indebtedness on the existing 
     mortgage or mortgages on the residence refinanced under this 
     section derived from misrepresentations made in the 
     certifications and documentation required under this 
     subparagraph, subject to the discretion of the Secretary.

       ``(B) Current borrower debt-to-income ratio.--As of March 
     1, 2008, the mortgagor shall have had a ratio of mortgage 
     debt to income, taking into consideration all existing 
     mortgages of that mortgagor at such time, greater than 31 
     percent (or such higher amount as the Board determines 
     appropriate).
       ``(2) Determination of principal obligation amount.--The 
     principal obligation amount of the refinanced eligible 
     mortgage to be insured shall--
       ``(A) be determined by the reasonable ability of the 
     mortgagor to make his or her mortgage payments, as such 
     ability is determined by the Secretary pursuant to section 
     203(b)(4) or by any other underwriting standards established 
     by the Board; and
       ``(B) not exceed 90 percent of the appraised value of the 
     property to which such mortgage relates.
       ``(3) Required waiver of prepayment penalties and fees.--
     All penalties for prepayment or refinancing of the eligible 
     mortgage, and all fees and penalties related to default or 
     delinquency on the eligible mortgage, shall be waived or 
     forgiven.
       ``(4) Extinguishment of subordinate liens.--
       ``(A) Required agreement.--All holders of outstanding 
     mortgage liens on the property to which the eligible mortgage 
     relates shall agree to accept the proceeds of the insured 
     loan as payment in full of all indebtedness under the 
     eligible mortgage, and all encumbrances related to such 
     eligible mortgage shall be removed. The Secretary may take 
     such actions, subject to standards established by the Board 
     under subparagraph (B), as may be necessary and appropriate 
     to facilitate coordination and agreement between the holders 
     of the existing senior mortgage and any existing subordinate 
     mortgages, taking into consideration the subordinate lien 
     status of such subordinate mortgages.
       ``(B) Shared appreciation.--
       ``(i) In general.--The Board shall establish standards and 
     policies that will allow for the payment to the holder of any 
     existing subordinate mortgage of a portion of any future 
     appreciation in the property secured by such eligible 
     mortgage that is owed to the Secretary pursuant to subsection 
     (k).
       ``(ii) Factors.--In establishing the standards and policies 
     required under clause (i), the Board shall take into 
     consideration--

       ``(I) the status of any subordinate mortgage;
       ``(II) the outstanding principal balance of and accrued 
     interest on the existing senior mortgage and any outstanding 
     subordinate mortgages;
       ``(III) the extent to which the current appraised value of 
     the property securing a subordinate mortgage is less than the 
     outstanding principal balance and accrued interest on any 
     other liens that are senior to such subordinate mortgage; and
       ``(IV) such other factors as the Board determines to be 
     appropriate.

       ``(C) Voluntary program.--This paragraph may not be 
     construed to require any holder of any existing mortgage to 
     participate in the program under this section generally, or 
     with respect to any particular loan.
       ``(5) Term of mortgage.--The refinanced eligible mortgage 
     to be insured shall--
       ``(A) bear interest at a single rate that is fixed for the 
     entire term of the mortgage; and
       ``(B) have a maturity of not less than 30 years from the 
     date of the beginning of amortization of such refinanced 
     eligible mortgage.
       ``(6) Maximum loan amount.--The principal obligation amount 
     of the eligible mortgage to be insured shall not exceed 132 
     percent of 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 property of the 
     applicable size.
       ``(7) Prohibition on second liens.--A mortgagor may not 
     grant a new second lien on the mortgaged property during the 
     first 5 years of the term of the mortgage insured under this 
     section.
       ``(8) Appraisals.--Any appraisal conducted in connection 
     with a mortgage insured under this section shall--
       ``(A) be based on the current value of the property;
       ``(B) be conducted in accordance with title XI of the 
     Financial Institutions Reform, Recovery, and Enforcement Act 
     of 1989 (12 U.S.C. 3331 et seq.);
       ``(C) be completed by an appraiser who meets the competency 
     requirements of the Uniform Standards of Professional 
     Appraisal Practice;
       ``(D) be wholly consistent with the appraisal standards, 
     practices, and procedures under section 202(e) of this Act 
     that apply to all loans insured under this Act; and
       ``(E) comply with the requirements of subsection (g) of 
     this section (relating to appraisal independence).
       ``(9) Documentation and verification of income.--In 
     complying with the FHA underwriting requirements under the 
     HOPE for Homeowners Program under this section, the mortgagee 
     under the mortgage shall document and verify the income of 
     the mortgagor by procuring an Internal Revenue Service 
     transcript of the income tax returns of the mortgagor for the 
     2 most recent years for which the filing deadline for such 
     years has passed and by any other method, in accordance with 
     procedures and standards that the Board or the Secretary 
     shall establish.
       ``(10) Mortgage fraud.--The mortgagor shall not have been 
     convicted under any provision of Federal or State law for 
     fraud, including mortgage fraud.
       ``(11) Primary residence.--The mortgagor shall provide 
     documentation satisfactory in the determination of the 
     Secretary to prove that the residence covered by the mortgage 
     to be insured under this section is occupied by the mortgagor 
     as the primary residence of the mortgagor, and that such 
     residence is the only residence in

[[Page 15930]]

     which the mortgagor has any present ownership interest.
       ``(f) Study of Auction or Bulk Refinance Program.--
       ``(1) Study.--The Board shall conduct a study of the need 
     for and efficacy of an auction or bulk refinancing mechanism 
     to facilitate refinancing of existing residential mortgages 
     that are at risk for foreclosure into mortgages insured under 
     this section. The study shall identify and examine various 
     options for mechanisms under which lenders and servicers of 
     such mortgages may make bids for forward commitments for such 
     insurance in an expedited manner.
       ``(2) Content.--
       ``(A) Analysis.--The study required under paragraph (1) 
     shall analyze--
       ``(i) the feasibility of establishing a mechanism that 
     would facilitate the more rapid refinancing of borrowers at 
     risk of foreclosure into performing mortgages insured under 
     this section;
       ``(ii) whether such a mechanism would provide an effective 
     and efficient mechanism to reduce foreclosures on qualified 
     existing mortgages;
       ``(iii) whether the use of an auction or bulk refinance 
     program is necessary to stabilize the housing market and 
     reduce the impact of turmoil in that market on the economy of 
     the United States;
       ``(iv) whether there are other mechanisms or authority that 
     would be useful to reduce foreclosure; and
       ``(v) and any other factors that the Board considers 
     relevant.
       ``(B) Determinations.--To the extent that the Board finds 
     that a facility of the type described in subparagraph (A) is 
     feasible and useful, the study shall--
       ``(i) determine and identify any additional authority or 
     resources needed to establish and operate such a mechanism;
       ``(ii) determine whether there is a need for additional 
     authority with respect to the loan underwriting criteria 
     established in this section or with respect to eligibility of 
     participating borrowers, lenders, or holders of liens;
       ``(iii) determine whether such underwriting criteria should 
     be established on the basis of individual loans, in the 
     aggregate, or otherwise to facilitate the goal of refinancing 
     borrowers at risk of foreclosure into viable loans insured 
     under this section.
       ``(3) Report.--Not later than the expiration of the 60-day 
     period beginning on the date of the enactment of this 
     section, the Board shall submit a report regarding the 
     results of the study conducted under this subsection to the 
     Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate. The report shall include a 
     detailed description of the analysis required under paragraph 
     (2)(A) and of the determinations made pursuant to paragraph 
     (2)(B), and shall include any other findings and 
     recommendations of the Board pursuant to the study, including 
     identifying various options for mechanisms described in 
     paragraph (1).
       ``(g) Appraisal Independence.--
       ``(1) Prohibitions on interested parties in a real estate 
     transaction.--No mortgage lender, mortgage broker, mortgage 
     banker, real estate broker, appraisal management company, 
     employee of an appraisal management company, nor any other 
     person with an interest in a real estate transaction 
     involving an appraisal in connection with a mortgage insured 
     under this section shall improperly influence, or attempt to 
     improperly influence, through coercion, extortion, collusion, 
     compensation, instruction, inducement, intimidation, 
     nonpayment for services rendered, or bribery, the 
     development, reporting, result, or review of a real estate 
     appraisal sought in connection with the mortgage.
       ``(2) Civil monetary penalties.--The Secretary may impose a 
     civil money penalty for any knowing and material violation of 
     paragraph (1) under the same terms and conditions as are 
     authorized in section 536(a) of this Act.
       ``(h) Standards To Protect Against Adverse Selection.--
       ``(1) In general.--The Board shall, by rule or order, 
     establish standards and policies to require the underwriter 
     of the insured loan to provide such representations and 
     warranties as the Board considers necessary or appropriate to 
     enforce compliance with all underwriting and appraisal 
     standards of the HOPE for Homeowners Program.
       ``(2) Exclusion for violations.--The Board shall prohibit 
     the Secretary from paying insurance benefits to a mortgagee 
     who violates the representations and warranties, as 
     established under paragraph (1), or in any case in which a 
     mortgagor fails to make the first payment on a refinanced 
     eligible mortgage.
       ``(3) Other authority.--The Board may establish such other 
     standards or policies as necessary to protect against adverse 
     selection, including requiring loans identified by the 
     Secretary as higher risk loans to demonstrate payment 
     performance for a reasonable period of time prior to being 
     insured under the program.
       ``(i) Premiums.--For each refinanced eligible mortgage 
     insured under this section, the Secretary shall establish and 
     collect--
       ``(1) at the time of insurance, a single premium payment in 
     an amount equal to 3 percent of the amount of the original 
     insured principal obligation of the refinanced eligible 
     mortgage, which shall be paid from the proceeds of the 
     mortgage being insured under this section, through the 
     reduction of the amount of indebtedness that existed on the 
     eligible mortgage prior to refinancing; and
       ``(2) in addition to the premium required under paragraph 
     (1), an annual premium in an amount equal to 1.5 percent of 
     the amount of the remaining insured principal balance of the 
     mortgage.
       ``(j) Origination Fees and Interest Rate.--The Board shall 
     establish--
       ``(1) a reasonable limitation on origination fees for 
     refinanced eligible mortgages insured under this section; and
       ``(2) procedures to ensure that interest rates on such 
     mortgages shall be commensurate with market rate interest 
     rates on such types of loans.
       ``(k) Equity and Appreciation.--
       ``(1) Five-year phase-in for equity as a result of sale or 
     refinancing.--For each eligible mortgage insured under this 
     section, the Secretary and the mortgagor of such mortgage 
     shall, upon any sale or disposition of the property to which 
     such mortgage relates, or upon the subsequent refinancing of 
     such mortgage, be entitled to the following with respect to 
     any equity created as a direct result of such sale or 
     refinancing:
       ``(A) If such sale or refinancing occurs during the period 
     that begins on the date that such mortgage is insured and 
     ends 1 year after such date of insurance, the Secretary shall 
     be entitled to 100 percent of such equity.
       ``(B) If such sale or refinancing occurs during the period 
     that begins 1 year after such date of insurance and ends 2 
     years after such date of insurance, the Secretary shall be 
     entitled to 90 percent of such equity and the mortgagor shall 
     be entitled to 10 percent of such equity.
       ``(C) If such sale or refinancing occurs during the period 
     that begins 2 years after such date of insurance and ends 3 
     years after such date of insurance, the Secretary shall be 
     entitled to 80 percent of such equity and the mortgagor shall 
     be entitled to 20 percent of such equity.
       ``(D) If such sale or refinancing occurs during the period 
     that begins 3 years after such date of insurance and ends 4 
     years after such date of insurance, the Secretary shall be 
     entitled to 70 percent of such equity and the mortgagor shall 
     be entitled to 30 percent of such equity.
       ``(E) If such sale or refinancing occurs during the period 
     that begins 4 years after such date of insurance and ends 5 
     years after such date of insurance, the Secretary shall be 
     entitled to 60 percent of such equity and the mortgagor shall 
     be entitled to 40 percent of such equity.
       ``(F) If such sale or refinancing occurs during any period 
     that begins 5 years after such date of insurance, the 
     Secretary shall be entitled to 50 percent of such equity and 
     the mortgagor shall be entitled to 50 percent of such equity.
       ``(2) Appreciation in value.--For each eligible mortgage 
     insured under this section, the Secretary and the mortgagor 
     of such mortgage shall, upon any sale or disposition of the 
     property to which such mortgage relates, each be entitled to 
     50 percent of any appreciation in value of the appraised 
     value of such property that has occurred since the date that 
     such mortgage was insured under this section.
       ``(l) Establishment of HOPE Fund.--
       ``(1) In general.--There is established in the Federal 
     Housing Administration a revolving fund to be known as the 
     Home Ownership Preservation Entity Fund, which shall be used 
     by the Board for carrying out the mortgage insurance 
     obligations under this section.
       ``(2) Management of fund.--The HOPE Fund shall be 
     administered and managed by the Secretary, who shall 
     establish reasonable and prudent criteria for the management 
     and operation of any amounts in the HOPE Fund.
       ``(m) Limitation on Aggregate Insurance Authority.--The 
     aggregate original principal obligation of all mortgages 
     insured under this section may not exceed $300,000,000,000.
       ``(n) Reports by the Board.--The Board shall submit monthly 
     reports to the Congress identifying the progress of the HOPE 
     for Homeowners Program, which shall contain the following 
     information for each month:
       ``(1) The number of new mortgages insured under this 
     section, including the location of the properties subject to 
     such mortgages by census tract.
       ``(2) The aggregate principal obligation of new mortgages 
     insured under this section.
       ``(3) The average amount by which the principle balance 
     outstanding on mortgages insured this section was reduced.
       ``(4) The amount of premiums collected for insurance of 
     mortgages under this section.
       ``(5) The claim and loss rates for mortgages insured under 
     this section.
       ``(6) Any other information that the Board considers 
     appropriate.
       ``(o) Required Outreach Efforts.--The Secretary shall carry 
     out outreach efforts to ensure that homeowners, lenders, and 
     the general public are aware of the opportunities for 
     assistance available under this section.
       ``(p) Enhancement of FHA Capacity.--Under the direction of 
     the Board, the Secretary shall take such actions as may be 
     necessary to--
       ``(1) contract for the establishment of underwriting 
     criteria, automated underwriting systems, pricing standards, 
     and other factors relating to eligibility for mortgages 
     insured under this section;
       ``(2) contract for independent quality reviews of 
     underwriting, including appraisal reviews and fraud 
     detection, of mortgages insured under this section or pools 
     of such mortgages; and
       ``(3) increase personnel of the Department as necessary to 
     process or monitor the processing of mortgages insured under 
     this section.
       ``(q) GNMA Commitment Authority.--
       ``(1) Guarantees.--The Secretary shall take such actions as 
     may be necessary to ensure that

[[Page 15931]]

     securities based on and backed by a trust or pool composed of 
     mortgages insured under this section are available to be 
     guaranteed by the Government National Mortgage Association as 
     to the timely payment of principal and interest.
       ``(2) Guarantee authority.--To carry out the purposes of 
     section 306 of the National Housing Act (12 U.S.C. 1721), the 
     Government National Mortgage Association may enter into new 
     commitments to issue guarantees of securities based on or 
     backed by mortgages insured under this section, not exceeding 
     $300,000,000,000. The amount of authority provided under the 
     preceding sentence to enter into new commitments to issue 
     guarantees is in addition to any amount of authority to make 
     new commitments to issue guarantees that is provided to the 
     Association under any other provision of law.
       ``(r) Sunset.--The Secretary may not enter into any new 
     commitment to insure any refinanced eligible mortgage, or 
     newly insure any refinanced eligible mortgage pursuant to 
     this section before October 1, 2008 or after September 30, 
     2011.
       ``(s) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Approved financial institution or mortgagee.--The 
     term `approved financial institution or mortgagee' means a 
     financial institution or mortgagee approved by the Secretary 
     under section 203 as responsible and able to service 
     mortgages responsibly.
       ``(2) Board.--The term `Board' means the Board of Directors 
     of the HOPE for Homeowners Program. The Board shall be 
     composed of the Secretary, the Secretary of the Treasury, the 
     Chairperson of the Board of Governors of the Federal Reserve 
     System, and the Chairperson of the Board of Directors of the 
     Federal Deposit Insurance Corporation.
       ``(3) Eligible mortgage.--The term `eligible mortgage' 
     means a mortgage--
       ``(A) the mortgagor of which--
       ``(i) occupies such property as his or her principal 
     residence; and
       ``(ii) cannot, subject to subsection (e)(1)(B) and such 
     other standards established by the Board, afford his or her 
     mortgage payments; and
       ``(B) originated on or before January 1, 2008.
       ``(4) Existing senior mortgage.--The term `existing senior 
     mortgage' means, with respect to a mortgage insured under 
     this section, the existing mortgage that has superior 
     priority.
       ``(5) Existing subordinate mortgage.--The term `existing 
     subordinate mortgage' means, with respect to a mortgage 
     insured under this section, an existing mortgage that has 
     subordinate priority to the existing senior mortgage.
       ``(6) HOPE for homeowners program.--The term `HOPE for 
     Homeowners Program' means the program established under this 
     section.
       ``(7) Secretary.--The term `Secretary' means the Secretary 
     of Housing and Urban Development, except where specifically 
     provided otherwise.
       ``(t) Requirements Related to the Board.--
       ``(1) Compensation, actual, necessary, and transportation 
     expenses.--
       ``(A) Federal employees.--A member of the Board who is an 
     officer or employee of the Federal Government shall serve 
     without additional pay (or benefits in the nature of 
     compensation) for service as a member of the Board.
       ``(B) Travel expenses.--Members of the Board shall be 
     entitled to receive travel expenses, including per diem in 
     lieu of subsistence, equivalent to those set forth in 
     subchapter I of chapter 57 of title 5, United States Code.
       ``(2) Bylaws.--The Board may prescribe, amend, and repeal 
     such bylaws as may be necessary for carrying out the 
     functions of the Board.
       ``(3) Quorum.--A majority of the Board shall constitute a 
     quorum.
       ``(4) Staff; experts and consultants.--
       ``(A) Detail of government employees.--Upon request of the 
     Board, any Federal Government employee may be detailed to the 
     Board without reimbursement, and such detail shall be without 
     interruption or loss of civil service status or privilege.
       ``(B) Experts and consultants.--The Board shall procure the 
     services of experts and consultants as the Board considers 
     appropriate.
       ``(u) Rule of Construction Related to Voluntary Nature of 
     the Program.--This section shall not be construed to require 
     that any approved financial institution or mortgagee 
     participate in any activity authorized under this section, 
     including any activity related to the refinancing of an 
     eligible mortgage.
       ``(v) Rule of Construction Related to Insurance of 
     Mortgages.--Except as otherwise provided for in this section 
     or by action of the Board, the provisions and requirements of 
     section 203(b) shall apply with respect to the insurance of 
     any eligible mortgage under this section.
       ``(w) HOPE Bonds.--
       ``(1) Issuance and repayment of bonds.--Notwithstanding 
     section 504(b) of the Federal Credit Reform Act of 1990 (2 
     U.S.C. 661d(b)), the Secretary of the Treasury shall--
       ``(A) subject to such terms and conditions as the Secretary 
     of the Treasury deems necessary, issue Federal credit 
     instruments, to be known as `HOPE Bonds', that are callable 
     at the discretion of the Secretary of the Treasury and do 
     not, in the aggregate, exceed the amount specified in 
     subsection (m);
       ``(B) provide the subsidy amounts necessary for loan 
     guarantees under the HOPE for Homeowners Program, not to 
     exceed the amount specified in subsection (m), in accordance 
     with the provisions of the Federal Credit Reform Act of 1990 
     (2 U.S.C. 661 et seq.), except as provided in this paragraph; 
     and
       ``(C) use the proceeds from HOPE Bonds only to pay for the 
     net costs to the Federal Government of the HOPE for 
     Homeowners Program, including administrative costs.
       ``(2) Reimbursements to treasury.--Funds received pursuant 
     to section 1338(b) of the Federal Housing Enterprises 
     Regulatory Reform Act of 1992 shall be used to reimburse the 
     Secretary of the Treasury for amounts borrowed under 
     paragraph (1).
       ``(3) Use of reserve fund.--If the net cost to the Federal 
     Government for the HOPE for Homeowners Program exceeds the 
     amount of funds received under paragraph (2), remaining debts 
     of the HOPE for Homeowners Program shall be paid from amounts 
     deposited into the fund established by the Secretary under 
     section 1337(e) of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992, remaining amounts in such 
     fund to be used to reduce the National debt.
       ``(4) Reduction of national debt.--Amounts collected under 
     the HOPE for Homeowners Program in accordance with 
     subsections (i) and (k) in excess of the net cost to the 
     Federal Government for such Program shall be used to reduce 
     the National debt.''.

     SEC. 1403. FIDUCIARY DUTY OF SERVICERS OF POOLED RESIDENTIAL 
                   MORTGAGE LOANS.

       The Truth in Lending Act (15 U.S.C. 1601 et seq.) is 
     amended by inserting after section 129 the following new 
     section:

     ``SEC. 129A. FIDUCIARY DUTY OF SERVICERS OF POOLED 
                   RESIDENTIAL MORTGAGES.

       ``(a) In General.--Except as may be established in any 
     investment contract between a servicer of pooled residential 
     mortgages and an investor, a servicer of pooled residential 
     mortgages--
       ``(1) owes any duty to maximize the net present value of 
     the pooled mortgages in an investment to all investors and 
     parties having a direct or indirect interest in such 
     investment, not to any individual party or group of parties; 
     and
       ``(2) shall be deemed to act in the best interests of all 
     such investors and parties if the servicer agrees to or 
     implements a modification or workout plan, including any 
     modification or refinancing undertaken pursuant to the HOPE 
     for Homeowners Act of 2008, for a residential mortgage or a 
     class of residential mortgages that constitute a part or all 
     of the pooled mortgages in such investment, provided that any 
     mortgage so modified meets the following criteria:
       ``(A) Default on the payment of such mortgage has occurred 
     or is reasonably foreseeable.
       ``(B) The property securing such mortgage is occupied by 
     the mortgagor of such mortgage.
       ``(C) The anticipated recovery on the principal outstanding 
     obligation of the mortgage under the modification or workout 
     plan exceeds, on a net present value basis, the anticipated 
     recovery on the principal outstanding obligation of the 
     mortgage through foreclosure.
       ``(b) Definition.--As used in this section, the term 
     `servicer' has the same meaning as in section 6(i)(2) of the 
     Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 
     2605(i)(2)).''.

     SEC. 1404. REVISED STANDARDS FOR FHA APPRAISERS.

       Section 202(e) of the National Housing Act (12 U.S.C. 
     1708(e)) is amended by adding at the end the following:
       ``(5) Additional appraiser standards.--Beginning on the 
     date of enactment of the Federal Housing Finance Regulatory 
     Reform Act of 2008, any appraiser chosen or approved to 
     conduct appraisals for mortgages under this title shall--
       ``(A) be certified--
       ``(i) by the State in which the property to be appraised is 
     located; or
       ``(ii) by a nationally recognized professional appraisal 
     organization; and
       ``(B) have demonstrated verifiable education in the 
     appraisal requirements established by the Federal Housing 
     Administration under this subsection.''.

                TITLE V--S.A.F.E. MORTGAGE LICENSING ACT

     SEC. 1501. SHORT TITLE.

       This title may be cited as the ``Secure and Fair 
     Enforcement for Mortgage Licensing Act of 2008'' or 
     ``S.A.F.E. Mortgage Licensing Act of 2008''.

     SEC. 1502. PURPOSES AND METHODS FOR ESTABLISHING A MORTGAGE 
                   LICENSING SYSTEM AND REGISTRY.

       In order to increase uniformity, reduce regulatory burden, 
     enhance consumer protection, and reduce fraud, the States, 
     through the Conference of State Bank Supervisors and the 
     American Association of Residential Mortgage Regulators, are 
     hereby encouraged to establish a Nationwide Mortgage 
     Licensing System and Registry for the residential mortgage 
     industry that accomplishes all of the following objectives:
       (1) Provides uniform license applications and reporting 
     requirements for State-licensed loan originators.
       (2) Provides a comprehensive licensing and supervisory 
     database.
       (3) Aggregates and improves the flow of information to and 
     between regulators.
       (4) Provides increased accountability and tracking of loan 
     originators.
       (5) Streamlines the licensing process and reduces the 
     regulatory burden.
       (6) Enhances consumer protections and supports anti-fraud 
     measures.
       (7) Provides consumers with easily accessible information, 
     offered at no charge, utilizing electronic media, including 
     the Internet, regarding

[[Page 15932]]

     the employment history of, and publicly adjudicated 
     disciplinary and enforcement actions against, loan 
     originators.
       (8) Establishes a means by which residential mortgage loan 
     originators would, to the greatest extent possible, be 
     required to act in the best interests of the consumer.
       (9) Facilitates responsible behavior in the subprime 
     mortgage market place and provides comprehensive training and 
     examination requirements related to subprime mortgage 
     lending.
       (10) Facilitates the collection and disbursement of 
     consumer complaints on behalf of State and Federal mortgage 
     regulators.

     SEC. 1503. DEFINITIONS.

       For purposes of this title, the following definitions shall 
     apply:
       (1) Federal banking agencies.--The term ``Federal banking 
     agencies'' means the Board of Governors of the Federal 
     Reserve System, the Comptroller of the Currency, the Director 
     of the Office of Thrift Supervision, the National Credit 
     Union Administration, and the Federal Deposit Insurance 
     Corporation.
       (2) Depository institution.--The term ``depository 
     institution'' has the same meaning as in section 3 of the 
     Federal Deposit Insurance Act, and includes any credit union.
       (3) Loan originator.--
       (A) In general.--The term ``loan originator''--
       (i) means an individual who--

       (I) takes a residential mortgage loan application; and
       (II) offers or negotiates terms of a residential mortgage 
     loan for compensation or gain;

       (ii) does not include any individual who is not otherwise 
     described in clause (i) and who performs purely 
     administrative or clerical tasks on behalf of a person who is 
     described in any such clause;
       (iii) does not include a person or entity that only 
     performs real estate brokerage activities and is licensed or 
     registered in accordance with applicable State law, unless 
     the person or entity is compensated by a lender, a mortgage 
     broker, or other loan originator or by any agent of such 
     lender, mortgage broker, or other loan originator; and
       (iv) does not include a person or entity solely involved in 
     extensions of credit relating to timeshare plans, as that 
     term is defined in section 101(53D) of title 11, United 
     States Code.
       (B) Other definitions relating to loan originator.--For 
     purposes of this subsection, an individual ``assists a 
     consumer in obtaining or applying to obtain a residential 
     mortgage loan'' by, among other things, advising on loan 
     terms (including rates, fees, other costs), preparing loan 
     packages, or collecting information on behalf of the consumer 
     with regard to a residential mortgage loan.
       (C) Administrative or clerical tasks.--The term 
     ``administrative or clerical tasks'' means the receipt, 
     collection, and distribution of information common for the 
     processing or underwriting of a loan in the mortgage industry 
     and communication with a consumer to obtain information 
     necessary for the processing or underwriting of a residential 
     mortgage loan.
       (D) Real estate brokerage activity defined.--The term 
     ``real estate brokerage activity'' means any activity that 
     involves offering or providing real estate brokerage services 
     to the public, including--
       (i) acting as a real estate agent or real estate broker for 
     a buyer, seller, lessor, or lessee of real property;
       (ii) bringing together parties interested in the sale, 
     purchase, lease, rental, or exchange of real property;
       (iii) negotiating, on behalf of any party, any portion of a 
     contract relating to the sale, purchase, lease, rental, or 
     exchange of real property (other than in connection with 
     providing financing with respect to any such transaction);
       (iv) engaging in any activity for which a person engaged in 
     the activity is required to be registered or licensed as a 
     real estate agent or real estate broker under any applicable 
     law; and
       (v) offering to engage in any activity, or act in any 
     capacity, described in clause (i), (ii), (iii), or (iv).
       (4) Loan processor or underwriter.--
       (A) In general.--The term ``loan processor or underwriter'' 
     means an individual who performs clerical or support duties 
     at the direction of and subject to the supervision and 
     instruction of--
       (i) a State-licensed loan originator; or
       (ii) a registered loan originator.
       (B) Clerical or support duties.--For purposes of 
     subparagraph (A), the term ``clerical or support duties'' may 
     include--
       (i) the receipt, collection, distribution, and analysis of 
     information common for the processing or underwriting of a 
     residential mortgage loan; and
       (ii) communicating with a consumer to obtain the 
     information necessary for the processing or underwriting of a 
     loan, to the extent that such communication does not include 
     offering or negotiating loan rates or terms, or counseling 
     consumers about residential mortgage loan rates or terms.
       (5) Nationwide mortgage licensing system and registry.--The 
     term ``Nationwide Mortgage Licensing System and Registry'' 
     means a mortgage licensing system developed and maintained by 
     the Conference of State Bank Supervisors and the American 
     Association of Residential Mortgage Regulators for the State 
     licensing and registration of State-licensed loan originators 
     and the registration of registered loan originators or any 
     system established by the Secretary under section 1509.
       (6) Nontraditional mortgage product.--The term 
     ``nontraditional mortgage product'' means any mortgage 
     product other than a 30-year fixed rate mortgage.
       (7) Registered loan originator.--The term ``registered loan 
     originator'' means any individual who--
       (A) meets the definition of loan originator and is an 
     employee of--
       (i) a depository institution;
       (ii) a subsidiary that is--

       (I) owned and controlled by a depository institution; and
       (II) regulated by a Federal banking agency; or

       (iii) an institution regulated by the Farm Credit 
     Administration; and
       (B) is registered with, and maintains a unique identifier 
     through, the Nationwide Mortgage Licensing System and 
     Registry.
       (8) Residential mortgage loan.--The term ``residential 
     mortgage loan'' means any loan primarily for personal, 
     family, or household use that is secured by a mortgage, deed 
     of trust, or other equivalent consensual security interest on 
     a dwelling (as defined in section 103(v) of the Truth in 
     Lending Act) or residential real estate upon which is 
     constructed or intended to be constructed a dwelling (as so 
     defined).
       (9) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.
       (10) State-licensed loan originator.--The term ``State-
     licensed loan originator'' means any individual who--
       (A) is a loan originator;
       (B) is not an employee of--
       (i) a depository institution;
       (ii) a subsidiary that is--

       (I) owned and controlled by a depository institution; and
       (II) regulated by a Federal banking agency; or

       (iii) an institution regulated by the Farm Credit 
     Administration; and
       (C) is licensed by a State or by the Secretary under 
     section 1508 and registered as a loan originator with, and 
     maintains a unique identifier through, the Nationwide 
     Mortgage Licensing System and Registry.
       (11) Unique identifier.--
       (A) In general.--The term ``unique identifier'' means a 
     number or other identifier that--
       (i) permanently identifies a loan originator;
       (ii) is assigned by protocols established by the Nationwide 
     Mortgage Licensing System and Registry and the Federal 
     banking agencies to facilitate electronic tracking of loan 
     originators and uniform identification of, and public access 
     to, the employment history of and the publicly adjudicated 
     disciplinary and enforcement actions against loan 
     originators; and
       (iii) shall not be used for purposes other than those set 
     forth under this title.
       (B) Responsibility of states.--To the greatest extent 
     possible and to accomplish the purpose of this title, States 
     shall use unique identifiers in lieu of social security 
     numbers.

     SEC. 1504. LICENSE OR REGISTRATION REQUIRED.

       (a) In General.--An individual may not engage in the 
     business of a loan originator without first--
       (1) obtaining, and maintaining annually--
       (A) a registration as a registered loan originator; or
       (B) a license and registration as a State-licensed loan 
     originator; and
       (2) obtaining a unique identifier.
       (b) Loan Processors and Underwriters.--
       (1) Supervised loan processors and underwriters.--A loan 
     processor or underwriter who does not represent to the 
     public, through advertising or other means of communicating 
     or providing information (including the use of business 
     cards, stationery, brochures, signs, rate lists, or other 
     promotional items), that such individual can or will perform 
     any of the activities of a loan originator shall not be 
     required to be a State-licensed loan originator.
       (2) Independent contractors.--An independent contractor may 
     not engage in residential mortgage loan origination 
     activities as a loan processor or underwriter unless such 
     independent contractor is a State-licensed loan originator.

     SEC. 1505. STATE LICENSE AND REGISTRATION APPLICATION AND 
                   ISSUANCE.

       (a) Background Checks.--In connection with an application 
     to any State for licensing and registration as a State-
     licensed loan originator, the applicant shall, at a minimum, 
     furnish to the Nationwide Mortgage Licensing System and 
     Registry information concerning the applicant's identity, 
     including--
       (1) fingerprints for submission to the Federal Bureau of 
     Investigation, and any governmental agency or entity 
     authorized to receive such information for a State and 
     national criminal history background check; and
       (2) personal history and experience, including 
     authorization for the System to obtain--
       (A) an independent credit report obtained from a consumer 
     reporting agency described in section 603(p) of the Fair 
     Credit Reporting Act; and
       (B) information related to any administrative, civil or 
     criminal findings by any governmental jurisdiction.
       (b) Issuance of License.--The minimum standards for 
     licensing and registration as a State-licensed loan 
     originator shall include the following:
       (1) The applicant has never had a loan originator license 
     revoked in any governmental jurisdiction.
       (2) The applicant has not been convicted of, or pled guilty 
     or nolo contendere to, a felony in a domestic, foreign, or 
     military court--

[[Page 15933]]

       (A) during the 7-year period preceding the date of the 
     application for licensing and registration; or
       (B) at any time preceding such date of application, if such 
     felony involved an act of fraud, dishonesty, or a breach of 
     trust, or money laundering.
       (3) The applicant has demonstrated financial 
     responsibility, character, and general fitness such as to 
     command the confidence of the community and to warrant a 
     determination that the loan originator will operate honestly, 
     fairly, and efficiently within the purposes of this title.
       (4) The applicant has completed the pre-licensing education 
     requirement described in subsection (c).
       (5) The applicant has passed a written test that meets the 
     test requirement described in subsection (d).
       (6) The applicant has met either a net worth or surety bond 
     requirement, as required by the State pursuant to section 
     1508(d)(6).
       (c) Pre-Licensing Education of Loan Originators.--
       (1) Minimum educational requirements.--In order to meet the 
     pre-licensing education requirement referred to in subsection 
     (b)(4), a person shall complete at least 20 hours of 
     education approved in accordance with paragraph (2), which 
     shall include at least--
       (A) 3 hours of Federal law and regulations;
       (B) 3 hours of ethics, which shall include instruction on 
     fraud, consumer protection, and fair lending issues; and
       (C) 2 hours of training related to lending standards for 
     the nontraditional mortgage product marketplace.
       (2) Approved educational courses.--For purposes of 
     paragraph (1), pre-licensing education courses shall be 
     reviewed, and approved by the Nationwide Mortgage Licensing 
     System and Registry.
       (3) Limitation and standards.--
       (A) Limitation.--To maintain the independence of the 
     approval process, the Nationwide Mortgage Licensing System 
     and Registry shall not directly or indirectly offer pre-
     licensure educational courses for loan originators.
       (B) Standards.--In approving courses under this section, 
     the Nationwide Mortgage Licensing System and Registry shall 
     apply reasonable standards in the review and approval of 
     courses.
       (d) Testing of Loan Originators.--
       (1) In general.--In order to meet the written test 
     requirement referred to in subsection (b)(5), an individual 
     shall pass, in accordance with the standards established 
     under this subsection, a qualified written test developed by 
     the Nationwide Mortgage Licensing System and Registry and 
     administered by an approved test provider.
       (2) Qualified test.--A written test shall not be treated as 
     a qualified written test for purposes of paragraph (1) unless 
     the test adequately measures the applicant's knowledge and 
     comprehension in appropriate subject areas, including--
       (A) ethics;
       (B) Federal law and regulation pertaining to mortgage 
     origination;
       (C) State law and regulation pertaining to mortgage 
     origination;
       (D) Federal and State law and regulation, including 
     instruction on fraud, consumer protection, the nontraditional 
     mortgage marketplace, and fair lending issues.
       (3) Minimum competence.--
       (A) Passing score.--An individual shall not be considered 
     to have passed a qualified written test unless the individual 
     achieves a test score of not less than 75 percent correct 
     answers to questions.
       (B) Initial retests.--An individual may retake a test 3 
     consecutive times with each consecutive taking occurring at 
     least 30 days after the preceding test.
       (C) Subsequent retests.--After failing 3 consecutive tests, 
     an individual shall wait at least 6 months before taking the 
     test again.
       (D) Retest after lapse of license.--A State-licensed loan 
     originator who fails to maintain a valid license for a period 
     of 5 years or longer shall retake the test, not taking into 
     account any time during which such individual is a registered 
     loan originator.
       (e) Mortgage Call Reports.--Each mortgage licensee shall 
     submit to the Nationwide Mortgage Licensing System and 
     Registry reports of condition, which shall be in such form 
     and shall contain such information as the Nationwide Mortgage 
     Licensing System and Registry may require.

     SEC. 1506. STANDARDS FOR STATE LICENSE RENEWAL.

       (a) In General.--The minimum standards for license renewal 
     for State-licensed loan originators shall include the 
     following:
       (1) The loan originator continues to meet the minimum 
     standards for license issuance.
       (2) The loan originator has satisfied the annual continuing 
     education requirements described in subsection (b).
       (b) Continuing Education for State-Licensed Loan 
     Originators.--
       (1) In general.--In order to meet the annual continuing 
     education requirements referred to in subsection (a)(2), a 
     State-licensed loan originator shall complete at least 8 
     hours of education approved in accordance with paragraph (2), 
     which shall include at least--
       (A) 3 hours of Federal law and regulations;
       (B) 2 hours of ethics, which shall include instruction on 
     fraud, consumer protection, and fair lending issues; and
       (C) 2 hours of training related to lending standards for 
     the nontraditional mortgage product marketplace.
       (2) Approved educational courses.--For purposes of 
     paragraph (1), continuing education courses shall be 
     reviewed, and approved by the Nationwide Mortgage Licensing 
     System and Registry.
       (3) Calculation of continuing education credits.--A State-
     licensed loan originator--
       (A) may only receive credit for a continuing education 
     course in the year in which the course is taken; and
       (B) may not take the same approved course in the same or 
     successive years to meet the annual requirements for 
     continuing education.
       (4) Instructor credit.--A State-licensed loan originator 
     who is approved as an instructor of an approved continuing 
     education course may receive credit for the originator's own 
     annual continuing education requirement at the rate of 2 
     hours credit for every 1 hour taught.
       (5) Limitation and standards.--
       (A) Limitation.--To maintain the independence of the 
     approval process, the Nationwide Mortgage Licensing System 
     and Registry shall not directly or indirectly offer any 
     continuing education courses for loan originators.
       (B) Standards.--In approving courses under this section, 
     the Nationwide Mortgage Licensing System and Registry shall 
     apply reasonable standards in the review and approval of 
     courses.

     SEC. 1507. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL 
                   AGENCIES.

       (a) Development.--
       (1) In general.--The Federal banking agencies shall 
     jointly, through the Federal Financial Institutions 
     Examination Council, and together with the Farm Credit 
     Administration, develop and maintain a system for registering 
     employees of a depository institution, employees of a 
     subsidiary that is owned and controlled by a depository 
     institution and regulated by a Federal banking agency, or 
     employees of an institution regulated by the Farm Credit 
     Administration, as registered loan originators with the 
     Nationwide Mortgage Licensing System and Registry. The system 
     shall be implemented before the end of the 1-year period 
     beginning on the date of enactment of this title.
       (2) Registration requirements.--In connection with the 
     registration of any loan originator under this subsection, 
     the appropriate Federal banking agency and the Farm Credit 
     Administration shall, at a minimum, furnish or cause to be 
     furnished to the Nationwide Mortgage Licensing System and 
     Registry information concerning the employees's identity, 
     including--
       (A) fingerprints for submission to the Federal Bureau of 
     Investigation, and any governmental agency or entity 
     authorized to receive such information for a State and 
     national criminal history background check; and
       (B) personal history and experience, including 
     authorization for the Nationwide Mortgage Licensing System 
     and Registry to obtain information related to any 
     administrative, civil or criminal findings by any 
     governmental jurisdiction.
       (b) Coordination.--
       (1) Unique identifier.--The Federal banking agencies, 
     through the Financial Institutions Examination Council, and 
     the Farm Credit Administration shall coordinate with the 
     Nationwide Mortgage Licensing System and Registry to 
     establish protocols for assigning a unique identifier to each 
     registered loan originator that will facilitate electronic 
     tracking and uniform identification of, and public access to, 
     the employment history of and publicly adjudicated 
     disciplinary and enforcement actions against loan 
     originators.
       (2) Nationwide mortgage licensing system and registry 
     development.--To facilitate the transfer of information 
     required by subsection (a)(2), the Nationwide Mortgage 
     Licensing System and Registry shall coordinate with the 
     Federal banking agencies, through the Financial Institutions 
     Examination Council, and the Farm Credit Administration 
     concerning the development and operation, by such System and 
     Registry, of the registration functionality and data 
     requirements for loan originators.
       (c) Consideration of Factors and Procedures.--In 
     establishing the registration procedures under subsection (a) 
     and the protocols for assigning a unique identifier to a 
     registered loan originator, the Federal banking agencies 
     shall make such de minimis exceptions as may be appropriate 
     to paragraphs (1)(A) and (2) of section 1504(a), shall make 
     reasonable efforts to utilize existing information to 
     minimize the burden of registering loan originators, and 
     shall consider methods for automating the process to the 
     greatest extent practicable consistent with the purposes of 
     this title.

     SEC. 1508. SECRETARY OF HOUSING AND URBAN DEVELOPMENT BACKUP 
                   AUTHORITY TO ESTABLISH A LOAN ORIGINATOR 
                   LICENSING SYSTEM.

       (a) Backup Licensing System.--If, by the end of the 1-year 
     period, or the 2-year period in the case of a State whose 
     legislature meets only biennially, beginning on the date of 
     the enactment of this title or at any time thereafter, the 
     Secretary determines that a State does not have in place by 
     law or regulation a system for licensing and registering loan 
     originators that meets the requirements of sections 1505 and 
     1506 and subsection (d) of this section, or does not 
     participate in the Nationwide Mortgage Licensing System and 
     Registry, the Secretary shall provide for the establishment 
     and maintenance of a system for the licensing and 
     registration by the Secretary of loan originators operating 
     in such State as State-licensed loan originators.
       (b) Licensing and Registration Requirements.--The system 
     established by the Secretary under subsection (a) for any 
     State shall meet

[[Page 15934]]

     the requirements of sections 1505 and 1506 for State-licensed 
     loan originators.
       (c) Unique Identifier.--The Secretary shall coordinate with 
     the Nationwide Mortgage Licensing System and Registry to 
     establish protocols for assigning a unique identifier to each 
     loan originator licensed by the Secretary as a State-licensed 
     loan originator that will facilitate electronic tracking and 
     uniform identification of, and public access to, the 
     employment history of and the publicly adjudicated 
     disciplinary and enforcement actions against loan 
     originators.
       (d) State Licensing Law Requirements.--For purposes of this 
     section, the law in effect in a State meets the requirements 
     of this subsection if the Secretary determines the law 
     satisfies the following minimum requirements:
       (1) A State loan originator supervisory authority is 
     maintained to provide effective supervision and enforcement 
     of such law, including the suspension, termination, or 
     nonrenewal of a license for a violation of State or Federal 
     law.
       (2) The State loan originator supervisory authority ensures 
     that all State-licensed loan originators operating in the 
     State are registered with Nationwide Mortgage Licensing 
     System and Registry.
       (3) The State loan originator supervisory authority is 
     required to regularly report violations of such law, as well 
     as enforcement actions and other relevant information, to the 
     Nationwide Mortgage Licensing System and Registry.
       (4) The State loan originator supervisory authority has a 
     process in place for challenging information contained in the 
     Nationwide Mortgage Licensing System and Registry.
       (5) The State loan originator supervisory authority has 
     established a mechanism to assess civil money penalties for 
     individuals acting as mortgage originators in their State 
     without a valid license or registration.
       (6) The State loan originator supervisory authority has 
     established minimum net worth or surety bonding requirements 
     that reflect the dollar amount of loans originated by a 
     residential mortgage loan originator.
       (e) Temporary Extension of Period.--The Secretary may 
     extend, by not more than 24 months, the 1-year or 2-year 
     period, as the case may be, referred to in subsection (a) for 
     the licensing of loan originators in any State under a State 
     licensing law that meets the requirements of sections 1505 
     and 1506 and subsection (d) if the Secretary determines that 
     such State is making a good faith effort to establish a State 
     licensing law that meets such requirements, license mortgage 
     originators under such law, and register such originators 
     with the Nationwide Mortgage Licensing System and Registry.
       (f) Contracting Authority.--The Secretary may enter into 
     contracts with qualified independent parties, as necessary to 
     efficiently fulfill the obligations of the Secretary under 
     this section.

     SEC. 1509. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE 
                   MORTGAGE LICENSING AND REGISTRY SYSTEM.

       If at any time the Secretary determines that the Nationwide 
     Mortgage Licensing System and Registry is failing to meet the 
     requirements and purposes of this title for a comprehensive 
     licensing, supervisory, and tracking system for loan 
     originators, the Secretary shall establish and maintain such 
     a system to carry out the purposes of this title and the 
     effective registration and regulation of loan originators.

     SEC. 1510. FEES.

       The Federal banking agencies, the Farm Credit 
     Administration, the Secretary, and the Nationwide Mortgage 
     Licensing System and Registry may charge reasonable fees to 
     cover the costs of maintaining and providing access to 
     information from the Nationwide Mortgage Licensing System and 
     Registry, to the extent that such fees are not charged to 
     consumers for access to such system and registry.

     SEC. 1511. BACKGROUND CHECKS OF LOAN ORIGINATORS.

       (a) Access to Records.--Notwithstanding any other provision 
     of law, in providing identification and processing functions, 
     the Attorney General shall provide access to all criminal 
     history information to the appropriate State officials 
     responsible for regulating State-licensed loan originators to 
     the extent criminal history background checks are required 
     under the laws of the State for the licensing of such loan 
     originators.
       (b) Agent.--For the purposes of this section and in order 
     to reduce the points of contact which the Federal Bureau of 
     Investigation may have to maintain for purposes of subsection 
     (a), the Conference of State Bank Supervisors or a wholly 
     owned subsidiary may be used as a channeling agent of the 
     States for requesting and distributing information between 
     the Department of Justice and the appropriate State agencies.

     SEC. 1512. CONFIDENTIALITY OF INFORMATION.

       (a) System Confidentiality.--Except as otherwise provided 
     in this section, any requirement under Federal or State law 
     regarding the privacy or confidentiality of any information 
     or material provided to the Nationwide Mortgage Licensing 
     System and Registry or a system established by the Secretary 
     under section 1509, and any privilege arising under Federal 
     or State law (including the rules of any Federal or State 
     court) with respect to such information or material, shall 
     continue to apply to such information or material after the 
     information or material has been disclosed to the system. 
     Such information and material may be shared with all State 
     and Federal regulatory officials with mortgage industry 
     oversight authority without the loss of privilege or the loss 
     of confidentiality protections provided by Federal and State 
     laws.
       (b) Nonapplicability of Certain Requirements.--Information 
     or material that is subject to a privilege or confidentiality 
     under subsection (a) shall not be subject to--
       (1) disclosure under any Federal or State law governing the 
     disclosure to the public of information held by an officer or 
     an agency of the Federal Government or the respective State; 
     or
       (2) subpoena or discovery, or admission into evidence, in 
     any private civil action or administrative process, unless 
     with respect to any privilege held by the Nationwide Mortgage 
     Licensing System and Registry or the Secretary with respect 
     to such information or material, the person to whom such 
     information or material pertains waives, in whole or in part, 
     in the discretion of such person, that privilege.
       (c) Coordination With Other Law.--Any State law, including 
     any State open record law, relating to the disclosure of 
     confidential supervisory information or any information or 
     material described in subsection (a) that is inconsistent 
     with subsection (a) shall be superseded by the requirements 
     of such provision to the extent State law provides less 
     confidentiality or a weaker privilege.
       (d) Public Access to Information.--This section shall not 
     apply with respect to the information or material relating to 
     the employment history of, and publicly adjudicated 
     disciplinary and enforcement actions against, loan 
     originators that is included in Nationwide Mortgage Licensing 
     System and Registry for access by the public.

     SEC. 1513. LIABILITY PROVISIONS.

       The Secretary, any State official or agency, any Federal 
     banking agency, or any organization serving as the 
     administrator of the Nationwide Mortgage Licensing System and 
     Registry or a system established by the Secretary under 
     section 1509, or any officer or employee of any such entity, 
     shall not be subject to any civil action or proceeding for 
     monetary damages by reason of the good faith action or 
     omission of any officer or employee of any such entity, while 
     acting within the scope of office or employment, relating to 
     the collection, furnishing, or dissemination of information 
     concerning persons who are loan originators or are applying 
     for licensing or registration as loan originators.

     SEC. 1514. ENFORCEMENT UNDER HUD BACKUP LICENSING SYSTEM.

       (a) Summons Authority.--The Secretary may--
       (1) examine any books, papers, records, or other data of 
     any loan originator operating in any State which is subject 
     to a licensing system established by the Secretary under 
     section 1508; and
       (2) summon any loan originator referred to in paragraph (1) 
     or any person having possession, custody, or care of the 
     reports and records relating to such loan originator, to 
     appear before the Secretary or any delegate of the Secretary 
     at a time and place named in the summons and to produce such 
     books, papers, records, or other data, and to give testimony, 
     under oath, as may be relevant or material to an 
     investigation of such loan originator for compliance with the 
     requirements of this title.
       (b) Examination Authority.--
       (1) In general.--If the Secretary establishes a licensing 
     system under section 1508 for any State, the Secretary shall 
     appoint examiners for the purposes of administering such 
     section.
       (2) Power to examine.--Any examiner appointed under 
     paragraph (1) shall have power, on behalf of the Secretary, 
     to make any examination of any loan originator operating in 
     any State which is subject to a licensing system established 
     by the Secretary under section 1508 whenever the Secretary 
     determines an examination of any loan originator is necessary 
     to determine the compliance by the originator with this 
     title.
       (3) Report of examination.--Each examiner appointed under 
     paragraph (1) shall make a full and detailed report of 
     examination of any loan originator examined to the Secretary.
       (4) Administration of oaths and affirmations; evidence.--In 
     connection with examinations of loan originators operating in 
     any State which is subject to a licensing system established 
     by the Secretary under section 1508, or with other types of 
     investigations to determine compliance with applicable law 
     and regulations, the Secretary and examiners appointed by the 
     Secretary may administer oaths and affirmations and examine 
     and take and preserve testimony under oath as to any matter 
     in respect to the affairs of any such loan originator.
       (5) Assessments.--The cost of conducting any examination of 
     any loan originator operating in any State which is subject 
     to a licensing system established by the Secretary under 
     section 1508 shall be assessed by the Secretary against the 
     loan originator to meet the Secretary's expenses in carrying 
     out such examination.
       (c) Cease and Desist Proceeding.--
       (1) Authority of secretary.--If the Secretary finds, after 
     notice and opportunity for hearing, that any person is 
     violating, has violated, or is about to violate any provision 
     of this title, or any regulation thereunder, with respect to 
     a State which is subject to a licensing system established by 
     the Secretary under section 1508, the Secretary may publish 
     such findings and enter an order requiring such person, and 
     any other person that is, was, or would be a cause of the 
     violation, due to an act or omission the person knew or 
     should have known would contribute to such violation, to 
     cease and desist from committing or causing such violation 
     and any future violation of the same provision, rule,

[[Page 15935]]

     or regulation. Such order may, in addition to requiring a 
     person to cease and desist from committing or causing a 
     violation, require such person to comply, or to take steps to 
     effect compliance, with such provision or regulation, upon 
     such terms and conditions and within such time as the 
     Secretary may specify in such order. Any such order may, as 
     the Secretary deems appropriate, require future compliance or 
     steps to effect future compliance, either permanently or for 
     such period of time as the Secretary may specify, with such 
     provision or regulation with respect to any loan originator.
       (2) Hearing.--The notice instituting proceedings pursuant 
     to paragraph (1) shall fix a hearing date not earlier than 30 
     days nor later than 60 days after service of the notice 
     unless an earlier or a later date is set by the Secretary 
     with the consent of any respondent so served.
       (3) Temporary order.--Whenever the Secretary determines 
     that the alleged violation or threatened violation specified 
     in the notice instituting proceedings pursuant to paragraph 
     (1), or the continuation thereof, is likely to result in 
     significant dissipation or conversion of assets, significant 
     harm to consumers, or substantial harm to the public interest 
     prior to the completion of the proceedings, the Secretary may 
     enter a temporary order requiring the respondent to cease and 
     desist from the violation or threatened violation and to take 
     such action to prevent the violation or threatened violation 
     and to prevent dissipation or conversion of assets, 
     significant harm to consumers, or substantial harm to the 
     public interest as the Secretary deems appropriate pending 
     completion of such proceedings. Such an order shall be 
     entered only after notice and opportunity for a hearing, 
     unless the Secretary determines that notice and hearing prior 
     to entry would be impracticable or contrary to the public 
     interest. A temporary order shall become effective upon 
     service upon the respondent and, unless set aside, limited, 
     or suspended by the Secretary or a court of competent 
     jurisdiction, shall remain effective and enforceable pending 
     the completion of the proceedings.
       (4) Review of temporary orders.--
       (A) Review by secretary.--At any time after the respondent 
     has been served with a temporary cease and desist order 
     pursuant to paragraph (3), the respondent may apply to the 
     Secretary to have the order set aside, limited, or suspended. 
     If the respondent has been served with a temporary cease and 
     desist order entered without a prior hearing before the 
     Secretary, the respondent may, within 10 days after the date 
     on which the order was served, request a hearing on such 
     application and the Secretary shall hold a hearing and render 
     a decision on such application at the earliest possible time.
       (B) Judicial review.--Within--
       (i) 10 days after the date the respondent was served with a 
     temporary cease and desist order entered with a prior hearing 
     before the Secretary; or
       (ii) 10 days after the Secretary renders a decision on an 
     application and hearing under paragraph (1), with respect to 
     any temporary cease and desist order entered without a prior 
     hearing before the Secretary,
     the respondent may apply to the United States district court 
     for the district in which the respondent resides or has its 
     principal place of business, or for the District of Columbia, 
     for an order setting aside, limiting, or suspending the 
     effectiveness or enforcement of the order, and the court 
     shall have jurisdiction to enter such an order. A respondent 
     served with a temporary cease and desist order entered 
     without a prior hearing before the Secretary may not apply to 
     the court except after hearing and decision by the Secretary 
     on the respondent's application under subparagraph (A).
       (C) No automatic stay of temporary order.--The commencement 
     of proceedings under subparagraph (B) shall not, unless 
     specifically ordered by the court, operate as a stay of the 
     Secretary's order.
       (5) Authority of the secretary to prohibit persons from 
     serving as loan originators.--In any cease and desist 
     proceeding under paragraph (1), the Secretary may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as the Secretary shall 
     determine, any person who has violated this title or 
     regulations thereunder, from acting as a loan originator if 
     the conduct of that person demonstrates unfitness to serve as 
     a loan originator.
       (d) Authority of the Secretary To Assess Money Penalties.--
       (1) In general.--The Secretary may impose a civil penalty 
     on a loan originator operating in any State which is subject 
     to a licensing system established by the Secretary under 
     section 1508, if the Secretary finds, on the record after 
     notice and opportunity for hearing, that such loan originator 
     has violated or failed to comply with any requirement of this 
     title or any regulation prescribed by the Secretary under 
     this title or order issued under subsection (c).
       (2) Maximum amount of penalty.--The maximum amount of 
     penalty for each act or omission described in paragraph (1) 
     shall be $25,000.

     SEC. 1515. STATE EXAMINATION AUTHORITY.

       In addition to any authority allowed under State law a 
     State licensing agency shall have the authority to conduct 
     investigations and examinations as follows:
       (1) For the purposes of investigating violations or 
     complaints arising under this title, or for the purposes of 
     examination, the State licensing agency may review, 
     investigate, or examine any loan originator licensed or 
     required to be licensed under this title, as often as 
     necessary in order to carry out the purposes of this title.
       (2) Each such loan originator shall make available upon 
     request to the State licensing agency the books and records 
     relating to the operations of such originator. The State 
     licensing agency may have access to such books and records 
     and interview the officers, principals, loan originators, 
     employees, independent contractors, agents, and customers of 
     the licensee concerning their business.
       (3) The authority of this section shall remain in effect, 
     whether such a loan originator acts or claims to act under 
     any licensing or registration law of such State, or claims to 
     act without such authority.
       (4) No person subject to investigation or examination under 
     this section may knowingly withhold, abstract, remove, 
     mutilate, destroy, or secrete any books, records, computer 
     records, or other information.

     SEC. 1516. REPORTS AND RECOMMENDATIONS TO CONGRESS.

       (a) Annual Reports.--Not later than 1 year after the date 
     of enactment of this title, and annually thereafter, the 
     Secretary shall submit a report to Congress on the 
     effectiveness of the provisions of this title, including 
     legislative recommendations, if any, for strengthening 
     consumer protections, enhancing examination standards, 
     streamlining communication between all stakeholders involved 
     in residential mortgage loan origination and processing, and 
     establishing performance based bonding requirements for 
     mortgage originators or institutions that employ such 
     brokers.
       (b) Legislative Recommendations.--Not later than 6 months 
     after the date of enactment of this title, the Secretary 
     shall make recommendations to Congress on legislative reforms 
     to the Real Estate Settlement Procedures Act of 1974, that 
     the Secretary deems appropriate to promote more transparent 
     disclosures, allowing consumers to better shop and compare 
     mortgage loan terms and settlement costs.

     SEC. 1517. STUDY AND REPORTS ON DEFAULTS AND FORECLOSURES.

       (a) Study Required.--The Secretary shall conduct an 
     extensive study of the root causes of default and foreclosure 
     of home loans, using as much empirical data as is available.
       (b) Preliminary Report to Congress.--Not later than 6 
     months after the date of enactment of this title, the 
     Secretary shall submit to Congress a preliminary report 
     regarding the study required by this section.
       (c) Final Report to Congress.--Not later than 12 months 
     after the date of enactment of this title, the Secretary 
     shall submit to Congress a final report regarding the results 
     of the study required by this section, which shall include 
     any recommended legislation relating to the study, and 
     recommendations for best practices and for a process to 
     provide targeted assistance to populations with the highest 
     risk of potential default or foreclosure.

                        TITLE VI--MISCELLANEOUS

     SEC. 1601. STUDY AND REPORTS ON GUARANTEE FEES.

       (a) Ongoing Study of Fees.--The Director shall conduct an 
     ongoing study of fees charged by enterprises for guaranteeing 
     a mortgage.
       (b) Collection of Data.--The Director shall, by regulation 
     or order, establish procedures for the collection of data 
     from enterprises for purposes of this subsection, including 
     the format and the process for collection of such data.
       (c) Reports to Congress.--The Director shall annually 
     submit a report to Congress on the results of the study 
     conducted under subsection (a), based on the aggregated data 
     collected under subsection (a) for the subject year, 
     regarding the amount of such fees and the criteria used by 
     the enterprises to determine such fees.
       (d) Contents of Reports.--The reports required under 
     subsection (c) shall identify and analyze--
       (1) the factors considered in determining the amount of the 
     guarantee fees charged;
       (2) the total revenue earned by the enterprises from 
     guarantee fees;
       (3) the total costs incurred by the enterprises for 
     providing guarantees;
       (4) the average guarantee fee charged by the enterprises;
       (5) an analysis of any increase or decrease in guarantee 
     fees from the preceding year;
       (6) a breakdown of the revenue and costs associated with 
     providing guarantees, based on product type and risk 
     classifications; and
       (7) a breakdown of guarantee fees charged based on asset 
     size of the originator and the number of loans sold or 
     transferred to an enterprise.
       (e) Protection of Information.--Nothing in this section may 
     be construed to require or authorize the Director to publicly 
     disclose information that is confidential or proprietary.

     SEC. 1602. STUDY AND REPORT ON DEFAULT RISK EVALUATION.

       (a) Study.--The Director shall conduct a study of ways to 
     improve the overall default risk evaluation used with respect 
     to residential mortgage loans. Particular attention shall be 
     paid to the development and utilization of processes and 
     technologies that provide a means to standardize the 
     measurement of risk.
       (b) Report.--The Director shall submit a report on the 
     study conducted under this section to the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives, not later than 1 year after the date of 
     enactment of this Act.

     SEC. 1603. CONVERSION OF HUD CONTRACTS.

       (a) In General.--Notwithstanding any other provision of 
     law, the Secretary may, at the request of an owner of a 
     multifamily housing project that exceeds 5,000 units to which 
     a contract for project-based rental assistance under

[[Page 15936]]

     section 8 of the United States Housing Act of 1937 (``Act'') 
     (42 U.S.C. 1437f) and a Rental Assistance Payment contract is 
     subject, convert such contracts to a contract for project-
     based rental assistance under section 8 of the Act.
       (b) Initial Renewal.--
       (1) At the request of an owner under subsection (a) made no 
     later than 90 days prior to a conversion, the Secretary may, 
     to the extent sufficient amounts are made available in 
     appropriation Acts and notwithstanding any other law, treat 
     the contemplated resulting contract as if such contract were 
     eligible for initial renewal under section 524(a) of the 
     MultiFamily Assisted Housing Reform and Affordability Act of 
     1997 (42 U.S.C. 1437f note) (``MAHRA'') (42 U.S.C. 1437f 
     note).
       (2) A request by an owner pursuant to paragraph (1) shall 
     be upon such terms and conditions as the Secretary may 
     require.
       (c) Resulting Contract.--The resulting contract shall--
       (1) be subject to section 524(a) of MAHRA (42 U.S.C. 1437f 
     note);
       (2) be considered for all purposes a contract that has been 
     renewed under section 524(a) of MAHRA (42 U.S.C. 1437f note) 
     for a term not to exceed 20 years;
       (3) be subsequently renewable at the request of an owner, 
     under any renewal option for which the project is eligible 
     under MAHRA (42 U.S.C. 1437f note);
       (4) contain provisions limiting distributions, as the 
     Secretary determines appropriate, not to exceed 10 percent of 
     the initial investment of the owner;
       (5) be subject to the availability of sufficient amounts in 
     appropriation Acts; and
       (6) be subject to such other terms and conditions as the 
     Secretary considers appropriate.
       (d) Income Targeting.--To the extent that assisted dwelling 
     units, subject to the resulting contract under subsection 
     (a), serve low-income families, as defined in section 3(b)(2) 
     of the Act (42 U.S.C. 1437a(b)(2)) the units shall be 
     considered to be in compliance with all income targeting 
     requirements under the Act (42 U.S.C. 1437 et seq).
       (e) Tenant Eligibility.--Notwithstanding any other 
     provision of law, each family residing in an assisted 
     dwelling unit on the date of conversion of a contract under 
     this section, subject to the resulting contract under 
     subsection (a), shall be considered to meet the applicable 
     requirements for income eligibility and occupancy.
       (f) Definitions.--As used in this section--
       (1) the term ``Secretary'' means the Secretary of Housing 
     and Urban Development;
       (2) the term ``conversion'' means the action under which a 
     contract for project-based rental assistance under section 8 
     of the Act and a Rental Assistance Payment contract become a 
     contract for project-based rental assistance under section 8 
     of the Act (42 U.S.C. 1437f) pursuant to subsection (a);
       (3) the term ``resulting contract'' means the new contract 
     after a conversion pursuant to subsection (a); and
       (4) the term ``assisted dwelling unit'' means a dwelling 
     unit in a multifamily housing project that exceeds 5,000 
     units that, on the date of conversion of a contract under 
     this section, is subject to a contract for project-based 
     rental assistance under section 8 of the Act (42 U.S.C. 
     1437f) or a Rental Assistance Payment contract.

     SEC. 1604. BRIDGE DEPOSITORY INSTITUTIONS.

       (a) In General.--Section 11 of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821) is amended--
       (1) in subsection (d)(2)--
       (A) in subsection (F), by striking ``as receiver'' and all 
     that follows through clause (ii) and inserting the following: 
     ``as receiver, with respect to any insured depository 
     institution, organize a new depository institution under 
     subsection (m) or a bridge depository institution under 
     subsection (n).'';
       (B) in subparagraph (G), by striking ``new bank or a bridge 
     bank'' and inserting ``new depository institution or a bridge 
     depository institution'';
       (2) in subsection (e)(10)(C), by striking ``bridge bank'' 
     each place that term appears and inserting ``bridge 
     depository institution'';
       (3) in subsection (m)--
       (A) in the subsection heading, by striking ``Banks'' and 
     inserting ``Depository Institutions'';
       (B) by striking ``new bank'' each place that term appears 
     and inserting ``new depository institution'';
       (C) by striking ``such bank'' each place that term appears 
     and inserting ``such depository institution'';
       (D) in paragraph (1), by inserting ``or Federal savings 
     association'' after ``national bank'';
       (E) in paragraph (6), by striking ``only bank'' and 
     inserting ``only depository institution'';
       (F) in paragraph (9), by inserting ``or the Director of the 
     Office of Thrift Supervision, as appropriate'' after 
     ``Comptroller of the Currency'';
       (G) in paragraph (15), by striking ``, but in no event'' 
     and all that follows through ``located'';
       (H) in paragraph (16)--
       (i) by inserting ``or the Director of the Office of Thrift 
     Supervision, as appropriate,'' after ``Comptroller of the 
     Currency'' each place that term appears;
       (ii) by striking ``the bank'' each place that term appears 
     and inserting ``the depository institution'';
       (iii) by inserting ``or Federal savings association'' after 
     ``national bank'' each place that term appears;
       (iv) by inserting ``or Federal savings associations'' after 
     ``national banks''; and
       (v) by striking ``Such bank'' and inserting ``Such 
     depository institution''; and
       (I) in paragraph (18), by inserting ``or the Director of 
     the Office of Thrift Supervision, as appropriate,'' after 
     ``Comptroller of the Currency'' each place that term appears;
       (4) in subsection (n)--
       (A) in the subsection heading, by striking ``Banks'' and 
     inserting ``Depository Institutions'';
       (B) by striking ``bridge bank'' each place that term 
     appears and inserting ``bridge depository institution'';
       (C) by striking ``bridge banks'' each place that term 
     appears (other than in paragraph (1)(A) and inserting 
     ``bridge depository institutions'';
       (D) by striking ``bridge bank's'' each place that term 
     appears and inserting ``bridge depository institutions'';
       (E) by striking ``insured bank'' each place that term 
     appears and inserting ``insured depository institution'';
       (F) by striking ``insured banks'' each place that term 
     appears and inserting ``insured depository institutions'';
       (G) by striking ``such bank'' each place that term appears 
     (other than in paragraph (4)(J)) and inserting ``such 
     depository institution'';
       (H) by striking ``the bank'' each place that term appears 
     and inserting ``the depository institution'';
       (I) in paragraph (1)(A)--
       (i) by inserting ``, with respect to 1 or more insured 
     banks, or the Director of the Office of Thrift Supervision, 
     with respect to 1 or more insured savings associations,'' 
     after ``Comptroller of the Currency'';
       (ii) by inserting ``or Federal savings associations, as 
     appropriate,'' after ``national banks'';
       (iii) by inserting ``or Federal savings associations, as 
     applicable,'' after ``banking associations''; and
       (iv) by striking ``as bridge banks'' and inserting ``as 
     `bridge depository institutions' '';
       (J) in paragraph (1)(B)--
       (i) by striking ``bank or banks'' each place that term 
     appears and inserting ``depository institution or 
     institutions'';
       (ii) by striking ``of a bank''; and
       (iii) by striking ``of that bank'';
       (K) in paragraph (1)(E), by inserting before the period ``, 
     in the case of 1 or more insured banks, and as a Federal 
     savings association, in the case of 1 or more insured savings 
     associations'';
       (L) in paragraph (2)--
       (i) in subparagraph by inserting ``or Federal savings 
     association'' after ``national bank'' each place that term 
     appears; and
       (ii) by inserting ``or the Director of the Office of Thrift 
     Supervision'' after ``Comptroller of the Currency'';
       (M) in paragraph (4)--
       (i) in subparagraph (C), by striking ``under section 5138 
     of the Revised Statutes or any other'' and inserting ``under 
     any'';
       (ii) by inserting ``and the Director of the Office of 
     Thrift Supervision, as appropriate,'' after ``Comptroller of 
     the Currency'' each place that term appears;
       (iii) in subparagraph (D), by striking ``bank's'' and 
     inserting ``depository institution's''; and
       (iv) in subparagraph (F), by inserting before the period 
     ``or Federal home loan bank'';
       (N) in paragraph (8)--
       (i) in subparagraph (A), by striking ``the banks'' and 
     inserting ``the depository institutions'';
       (ii) in subparagraph (B), by striking ``bank's'' and 
     inserting ``depository institution's'';
       (O) in paragraph (11), by inserting ``or a Federal savings 
     association, as the case may be,'' after ``national bank'' 
     each place that term appears;
       (P) in paragraph (12)--
       (i) by inserting ``or the Director of the Office of Thrift 
     Supervision, as appropriate,'' after ``Comptroller of the 
     Currency'' each place that term appears; and
       (ii) by inserting ``or Federal savings associations, as 
     appropriate'' after ``national banks''; and
       (Q) in paragraph (13), by striking ``single bank'' and 
     inserting ``single depository institution''.
       (b) Other Conforming Amendments.--
       (1) Federal deposit insurance act.--The Federal Deposit 
     Insurance Act (12 U.S.C. 1811 et seq.) is amended--
       (A) in section 3 (12 U.S.C. 1813), by striking subsection 
     (i) and inserting the following:
       ``(i) New Depository Institution and Bridge Depository 
     Institution Defined.--
       ``(1) New depository institution.--The term `new depository 
     institution' means a new national bank or Federal savings 
     association, other than a bridge depository institution, 
     organized by the Corporation in accordance with section 
     11(m).
       ``(2) Bridge depository institution.--The term `bridge 
     depository institution' means a new national bank or Federal 
     savings association organized by the Corporation in 
     accordance with section 11(n).'';
       (B) in section 10(d)(5)(B) (12 U.S.C. 1820(d)(5)(B)), by 
     striking ``bridge bank'' and inserting ``bridge depository 
     institution'';
       (C) in section 12 (12 U.S.C. 1822), by striking ``new 
     bank'' each place that term appears and inserting ``new 
     depository institution'';and
       (D) in section 38(j)(2) (12 U.S.C. 1831o(j)(2)), by 
     striking ``bridge bank'' and inserting ``bridge depository 
     institution''.
       (2) Federal credit union act.--Section 207(c)(10)(C)(i) of 
     the Federal Credit Union Act

[[Page 15937]]

     (12 U.S.C. 1787(c)(10)(C)(i)) is amended by striking ``bridge 
     bank'' and inserting ``bridge depository institution''.
       (3) Title 11.--Section 783 of title 11, United States Code, 
     is amended by striking ``bridge bank'' and inserting ``bridge 
     depository institution''.
       (4) Title 26.--Section 414(l)(2)(G) of the Internal Revenue 
     Code of 1986, is amended by striking ``bridge bank'' and 
     inserting ``bridge depository institution''.

     SEC. 1605. SENSE OF THE SENATE.

       It is the sense of the Senate that in implementing or 
     carrying out any provision of this Act, or any amendment made 
     by this Act, the Senate supports a policy of noninterference 
     regarding local government requirements that the holder of a 
     foreclosed property maintain that property.

                   DIVISION B--FORECLOSURE PREVENTION

     SECTION 2001. SHORT TITLE.

       This division may be cited as the ``Foreclosure Prevention 
     Act of 2008''.

     SEC. 2002. EMERGENCY DESIGNATION.

       For purposes of Senate enforcement, all provisions of this 
     division are designated as emergency requirements and 
     necessary to meet emergency needs pursuant to section 204 of 
     S. Con. Res. 21 (110th Congress), the concurrent resolution 
     on the budget for fiscal year 2008.

                 TITLE I--FHA MODERNIZATION ACT OF 2008

     SEC. 2101. SHORT TITLE.

       This title may be cited as the ``FHA Modernization Act of 
     2008''.

              Subtitle A--Building American Homeownership

     SEC. 2111. SHORT TITLE.

       This subtitle may be cited as the ``Building American 
     Homeownership Act of 2008''.

     SEC. 2112. MAXIMUM PRINCIPAL LOAN OBLIGATION.

       (a) In General.--Paragraph (2) of section 203(b)(2) of the 
     National Housing Act (12 U.S.C. 1709(b)(2)) is amended--
       (1) by amending subparagraphs (A) and (B) to read as 
     follows:
       ``(A) not to exceed the lesser of--
       ``(i) in the case of a 1-family residence, 110 percent of 
     the median 1-family house price in the area, as determined by 
     the Secretary; and in the case of a 2-, 3-, or 4-family 
     residence, the percentage of such median price that bears the 
     same ratio to such median price as the dollar amount 
     limitation determined under section 305(a)(2) of the Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for 
     a 2-, 3-, or 4-family residence, respectively, bears to the 
     dollar amount limitation determined under such section for a 
     1-family residence; or
       ``(ii) 150 percent of the dollar amount limitation 
     determined under section 305(a)(2) of the Federal Home Loan 
     Mortgage Corporation Act for a residence of applicable size,
     except that the dollar amount limitation in effect under this 
     subparagraph for any size residence for any area may not be 
     less than the greater of: (I) the dollar amount limitation in 
     effect under this section for the area on October 21, 1998; 
     or (II) 65 percent of the dollar amount limitation determined 
     under such section 305(a)(2) for a residence of the 
     applicable size; and
       ``(B) not to exceed 100 percent of the appraised value of 
     the property.''; and
       (2) in the matter following subparagraph (B), by striking 
     the second sentence (relating to a definition of ``average 
     closing cost'') and all that follows through ``section 
     3103A(d) of title 38, United States Code.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect upon the expiration of the date described 
     in section 202(a) of the Economic Stimulus Act of 2008 
     (Public Law 110-185).

     SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF 
                   SELLER-FUNDED DOWN PAYMENT ASSISTANCE.

       Paragraph (9) of section 203(b) of the National Housing Act 
     (12 U.S.C. 1709(b)(9)) is amended to read as follows:
       ``(9) Cash investment requirement.--
       ``(A) In general.--A mortgage insured under this section 
     shall be executed by a mortgagor who shall have paid, in 
     cash, on account of the property an amount equal to not less 
     than 3.5 percent of the appraised value of the property or 
     such larger amount as the Secretary may determine.
       ``(B) Family members.--For purposes of this paragraph, the 
     Secretary shall consider as cash or its equivalent any 
     amounts borrowed from a family member (as such term is 
     defined in section 201), subject only to the requirements 
     that, in any case in which the repayment of such borrowed 
     amounts is secured by a lien against the property, that--
       ``(i) such lien shall be subordinate to the mortgage; and
       ``(ii) the sum of the principal obligation of the mortgage 
     and the obligation secured by such lien may not exceed 100 
     percent of the appraised value of the property.
       ``(C) Prohibited sources.--In no case shall the funds 
     required by subparagraph (A) consist, in whole or in part, of 
     funds provided by any of the following parties before, 
     during, or after closing of the property sale:
       ``(i) The seller or any other person or entity that 
     financially benefits from the transaction.
       ``(ii) Any third party or entity that is reimbursed, 
     directly or indirectly, by any of the parties described in 
     clause (i).''.

     SEC. 2114. MORTGAGE INSURANCE PREMIUMS.

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

     SEC. 2115. 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. 2116. 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. 2117. INSURANCE OF CONDOMINIUMS.

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

     SEC. 2118. MUTUAL MORTGAGE INSURANCE FUND.

       (a) In General.--Subsection (a) of section 202 of the 
     National Housing Act (12 U.S.C. 1708(a)) is amended to read 
     as follows:
       ``(a) Mutual Mortgage Insurance Fund.--
       ``(1) Establishment.--Subject to the provisions of the 
     Federal Credit Reform Act of 1990, there is hereby created a 
     Mutual Mortgage Insurance Fund (in this title referred to as 
     the `Fund'), which shall be used by the Secretary to carry 
     out the provisions of this title with respect to mortgages 
     insured under section 203. The Secretary may enter into 
     commitments to guarantee, and may guarantee, such insured 
     mortgages.
       ``(2) Limit on loan guarantees.--The authority of the 
     Secretary to enter into commitments to guarantee such insured 
     mortgages shall be effective for any fiscal year only to the 
     extent that the aggregate original principal loan amount 
     under such mortgages, any part of which is guaranteed, does 
     not exceed the amount specified in appropriations Acts for 
     such fiscal year.
       ``(3) Fiduciary responsibility.--The Secretary has a 
     responsibility to ensure that the Mutual Mortgage Insurance 
     Fund remains financially sound.
       ``(4) Annual independent actuarial study.--The Secretary 
     shall provide for an independent actuarial study of the Fund 
     to be conducted annually, which shall analyze the financial 
     position of the Fund. The Secretary shall submit a report 
     annually to the Congress describing the results of such study 
     and assessing the financial status of the Fund. The report 
     shall recommend adjustments to underwriting standards, 
     program participation, or premiums, if necessary, to ensure 
     that the Fund remains financially sound. The report shall 
     also include an evaluation of the quality control procedures 
     and accuracy of information utilized in the

[[Page 15938]]

     process of underwriting loans guaranteed by the Fund. Such 
     evaluation shall include a review of the risk characteristics 
     of loans based not only on borrower information and 
     performance, but on risks associated with loans originated or 
     funded by various entities or financial institutions.
       ``(5) Quarterly reports.--During each fiscal year, the 
     Secretary shall submit a report to the Congress for each 
     calendar quarter, which shall specify for mortgages that are 
     obligations of the Fund--
       ``(A) the cumulative volume of loan guarantee commitments 
     that have been made during such fiscal year through the end 
     of the quarter for which the report is submitted;
       ``(B) the types of loans insured, categorized by risk;
       ``(C) any significant changes between actual and projected 
     claim and prepayment activity;
       ``(D) projected versus actual loss rates; and
       ``(E) updated projections of the annual subsidy rates to 
     ensure that increases in risk to the Fund are identified and 
     mitigated by adjustments to underwriting standards, program 
     participation, or premiums, and the financial soundness of 
     the Fund is maintained.
     The first quarterly report under this paragraph shall be 
     submitted on the last day of the first quarter of fiscal year 
     2008, or on the last day of the first full calendar quarter 
     following the enactment of the Building American 
     Homeownership Act of 2008, whichever is later.
       ``(6) Adjustment of premiums.--If, pursuant to the 
     independent actuarial study of the Fund required under 
     paragraph (4), the Secretary determines that the Fund is not 
     meeting the operational goals established under paragraph (7) 
     or there is a substantial probability that the Fund will not 
     maintain its established target subsidy rate, the Secretary 
     may either make programmatic adjustments under this title as 
     necessary to reduce the risk to the Fund, or make appropriate 
     premium adjustments.
       ``(7) Operational goals.--The operational goals for the 
     Fund are--
       ``(A) to minimize the default risk to the Fund and to 
     homeowners by among other actions instituting fraud 
     prevention quality control screening not later than 18 months 
     after the date of enactment of the Building American 
     Homeownership Act of 2008; and
       ``(B) to meet the housing needs of the borrowers that the 
     single family mortgage insurance program under this title is 
     designed to serve.''.
       (b) Obligations of Fund.--The National Housing Act is 
     amended as follows:
       (1) Homeownership voucher program mortgages.--In section 
     203(v) (12 U.S.C. 1709(v))--
       (A) by striking ``Notwithstanding section 202 of this 
     title, the'' and inserting ``The''; and
       (B) by striking ``General Insurance Fund'' the first place 
     such term appears and all that follows through the end of the 
     subsection and inserting ``Mutual Mortgage Insurance Fund.''.
       (2) Home equity conversion mortgages.--Section 255(i)(2)(A) 
     of the National Housing Act (12 U.S.C. 1715z-20(i)(2)(A)) is 
     amended by striking ``General Insurance Fund'' and inserting 
     ``Mutual Mortgage Insurance Fund''.
       (c) Conforming Amendments.--The National Housing Act is 
     amended--
       (1) in section 205 (12 U.S.C. 1711), by striking 
     subsections (g) and (h); and
       (2) in section 519(e) (12 U.S.C. 1735c(e)), by striking 
     ``203(b)'' and all that follows through ``203(i)'' and 
     inserting ``203, except as determined by the Secretary''.

     SEC. 2119. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.

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

     SEC. 2120. 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. 2121. INSURANCE OF MORTGAGES.

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

     SEC. 2122. HOME EQUITY CONVERSION MORTGAGES.

       (a) In General.--Section 255 of the National Housing Act 
     (12 U.S.C. 1715z-20) is amended--
       (1) in subsection (b)(2), insert `` `real estate,' '' after 
     `` `mortgagor','';
       (2) by amending subsection (d)(1) to read as follows:
       ``(1) have been originated by a mortgagee approved by the 
     Secretary;'';
       (3) by amending subsection (d)(2)(B) to read as follows:
       ``(B) has received adequate counseling, as provided in 
     subsection (f), by an independent third party that is not, 
     either directly or indirectly, associated with or compensated 
     by a party involved in--
       ``(i) originating or servicing the mortgage;
       ``(ii) funding the loan underlying the mortgage; or
       ``(iii) the sale of annuities, investments, long-term care 
     insurance, or any other type of financial or insurance 
     product;'';
       (4) in subsection (f)--
       (A) by striking ``(f) Information Services for 
     Mortgagors.--'' and inserting ``(f) Counseling Services and 
     Information for Mortgagors.--''; and
       (B) by amending the matter preceding paragraph (1) to read 
     as follows: ``The Secretary shall provide or cause to be 
     provided adequate counseling for the mortgagor, as described 
     in subsection (d)(2)(B). Such counseling shall be provided by 
     counselors that meet qualification standards and follow 
     uniform counseling protocols. The qualification standards and 
     counseling protocols shall be established by the Secretary 
     within 12 months of the date of enactment of the Building 
     American Homeownership Act of 2008. The protocols shall 
     require a qualified counselor to discuss with each mortgagor 
     information which shall include--''
       (5) in subsection (g), by striking ``established under 
     section 203(b)(2)'' and all that follows through ``located'' 
     and inserting ``limitation established under section 
     305(a)(2) of the Federal Home Loan Mortgage Corporation Act 
     for a 1-family residence'';
       (6) by striking subsection (l);
       (7) by redesignating subsection (m) as subsection (l);
       (8) by amending subsection (l), as so redesignated, to read 
     as follows:
       ``(l) Funding for Counseling.--The Secretary may use a 
     portion of the mortgage insurance premiums collected under 
     the program under this section to adequately fund the 
     counseling and disclosure activities required under 
     subsection (f), including counseling for those homeowners who 
     elect not to take out a home equity conversion mortgage, 
     provided that the use of such funds is based upon accepted 
     actuarial principles.''; and
       (9) by adding at the end the following new subsection:
       ``(m) Authority To Insure Home Purchase Mortgage.--
       ``(1) In general.--Notwithstanding any other provision of 
     this section, the Secretary may insure, upon application by a 
     mortgagee, a home equity conversion mortgage upon such terms 
     and conditions as the Secretary may prescribe, when the home 
     equity conversion mortgage will be used to purchase a 1- to 
     4-family dwelling unit, one unit of which the mortgagor will 
     occupy as a primary residence, and to provide for any future 
     payments to the mortgagor, based on available equity, as 
     authorized under subsection (d)(9).
       ``(2) Limitation on principal obligation.--A home equity 
     conversion mortgage insured pursuant to paragraph (1) shall 
     involve a principal obligation that does not exceed the 
     dollar amount limitation determined under section 305(a)(2) 
     of the Federal Home Loan Mortgage Corporation Act for a 1-
     family residence.
       ``(n) Requirements on Mortgage Originators.--
       ``(1) In general.--The mortgagee and any other party that 
     participates in the origination of a mortgage to be insured 
     under this section shall--
       ``(A) not participate in, be associated with, or employ any 
     party that participates in or is associated with any other 
     financial or insurance activity; or
       ``(B) demonstrate to the Secretary that the mortgagee or 
     other party maintains, or will maintain, firewalls and other 
     safeguards designed to ensure that--
       ``(i) individuals participating in the origination of the 
     mortgage shall have no involvement with, or incentive to 
     provide the mortgagor with, any other financial or insurance 
     product; and
       ``(ii) the mortgagor shall not be required, directly or 
     indirectly, as a condition of obtaining a mortgage under this 
     section, to purchase any other financial or insurance 
     product.
       ``(2) Approval of other parties.--All parties that 
     participate in the origination of a mortgage to be insured 
     under this section shall be approved by the Secretary.
       ``(o) Prohibition Against Requirements To Purchase 
     Additional Products.--The mortgagee or any other party shall 
     not be required by the mortgagor or any other party to 
     purchase an insurance, annuity, or other additional product 
     as a requirement or condition of eligibility for insurance 
     under subsection (c).

[[Page 15939]]

       ``(p) Study To Determine Consumer Protections and 
     Underwriting Standards.--The Secretary shall conduct a study 
     to examine and determine appropriate consumer protections and 
     underwriting standards to ensure that the purchase of 
     products referred to in subsection (o) is appropriate for the 
     consumer. In conducting such study, the Secretary shall 
     consult with consumer advocates (including recognized experts 
     in consumer protection), industry representatives, 
     representatives of counseling organizations, and other 
     interested parties.''.
       (b) Mortgages for Cooperatives.--Subsection (b) of section 
     255 of the National Housing Act (12 U.S.C. 1715z-20(b)) is 
     amended--
       (1) in paragraph (4)--
       (A) by inserting ``a first or subordinate mortgage or 
     lien'' before ``on all stock'';
       (B) by inserting ``unit'' after ``dwelling''; and
       (C) by inserting ``a first mortgage or first lien'' before 
     ``on a leasehold''; and
       (2) in paragraph (5), by inserting ``a first or subordinate 
     lien on'' before ``all stock''.
       (c) Limitation on Origination Fees.--Section 255 of the 
     National Housing Act (12 U.S.C. 1715z-20), as amended by the 
     preceding provisions of this section, is further amended by 
     adding at the end the following new subsection:
       ``(r) Limitation on Origination Fees.--The Secretary shall 
     establish limits on the origination fee that may be charged 
     to a mortgagor under a mortgage insured under this section, 
     which limitations shall--
       ``(1) equal 1.5 percent of the maximum claim amount of the 
     mortgage unless adjusted thereafter on the basis of--
       ``(A) the costs to the mortgagor; and
       ``(B) the impact of such fees on the reverse mortgage 
     market;
       ``(2) be subject to a minimum allowable amount;
       ``(3) provide that the origination fee may be fully 
     financed with the mortgage;
       ``(4) include any fees paid to correspondent mortgagees 
     approved by the Secretary; and
       ``(5) have the same effective date as subsection (m)(2) 
     regarding the limitation on principal obligation.''.
       (d) Study Regarding Program Costs and Credit 
     Availability.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study regarding the costs and 
     availability of credit under the home equity conversion 
     mortgages for elderly homeowners program under section 255 of 
     the National Housing Act (12 U.S.C. 1715z-20) (in this 
     subsection referred to as the ``program'').
       (2) Purpose.--The purpose of the study required under 
     paragraph (1) is to help Congress analyze and determine the 
     effects of limiting the amounts of the costs or fees under 
     the program from the amounts charged under the program as of 
     the date of the enactment of this title.
       (3) Content of report.--The study required under paragraph 
     (1) should focus on--
       (A) the cost to mortgagors of participating in the program;
       (B) the financial soundness of the program;
       (C) the availability of credit under the program; and
       (D) the costs to elderly homeowners participating in the 
     program, including--
       (i) mortgage insurance premiums charged under the program;
       (ii) up-front fees charged under the program; and
       (iii) margin rates charged under the program.
       (4) Timing of report.--Not later than 12 months after the 
     date of the enactment of this title, the Comptroller General 
     shall submit a report to the Committee on Banking, Housing, 
     and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives setting 
     forth the results and conclusions of the study required under 
     paragraph (1).

     SEC. 2123. ENERGY EFFICIENT MORTGAGES PROGRAM.

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

     SEC. 2124. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS 
                   WITHOUT SUFFICIENT CREDIT HISTORY.

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

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

       ``(a) Establishment.--The Secretary shall carry out a pilot 
     program to establish, and make available to mortgagees, an 
     automated process for providing alternative credit rating 
     information for mortgagors and prospective mortgagors under 
     mortgages on 1- to 4-family residences to be insured under 
     this title who have insufficient credit histories for 
     determining their creditworthiness. Such alternative credit 
     rating information may include rent, utilities, and insurance 
     payment histories, and such other information as the 
     Secretary considers appropriate.
       ``(b) Scope.--The Secretary may carry out the pilot program 
     under this section on a limited basis or scope, and may 
     consider limiting the program to first-time homebuyers.
       ``(c) Limitation.--In any fiscal year, the aggregate number 
     of mortgages insured pursuant to the automated process 
     established under this section may not exceed 5 percent of 
     the aggregate number of mortgages for 1- to 4-family 
     residences insured by the Secretary under this title during 
     the preceding fiscal year.
       ``(d) Sunset.--After the expiration of the 5-year period 
     beginning on the date of the enactment of the Building 
     American Homeownership Act of 2008, the Secretary may not 
     enter into any new commitment to insure any mortgage, or 
     newly insure any mortgage, pursuant to the automated process 
     established under this section.''.
       (b) GAO Report.--Not later than the expiration of the two-
     year period beginning on the date of the enactment of this 
     subtitle, the Comptroller General of the United States shall 
     submit to the Congress a report identifying the number of 
     additional mortgagors served using the automated process 
     established pursuant to section 257 of the National Housing 
     Act (as added by the amendment made by subsection (a) of this 
     section) and the impact of such process and the insurance of 
     mortgages pursuant to such process on the safety and 
     soundness of the insurance funds under the National Housing 
     Act of which such mortgages are obligations.

     SEC. 2125. HOMEOWNERSHIP PRESERVATION.

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

     SEC. 2126. USE OF FHA SAVINGS FOR IMPROVEMENTS IN FHA 
                   TECHNOLOGIES, PROCEDURES, PROCESSES, PROGRAM 
                   PERFORMANCE, STAFFING, AND SALARIES.

       (a) Authorization of Appropriations.--There is authorized 
     to be appropriated for each of fiscal years 2009 through 
     2013, $25,000,000, from negative credit subsidy for the 
     mortgage insurance programs under title II of the National 
     Housing Act, to the Secretary of Housing and Urban 
     Development for increasing funding for the purpose of 
     improving technology, processes, program performance, 
     eliminating fraud, and for providing appropriate staffing in 
     connection with the mortgage insurance programs under title 
     II of the National Housing Act.
       (b) Certification.--The authorization under subsection (a) 
     shall not be effective for a fiscal year unless the Secretary 
     of Housing and Urban Development has, by rulemaking in 
     accordance with section 553 of title 5, United States Code 
     (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of 
     such section), made a determination that--
       (1) premiums being, or to be, charged during such fiscal 
     year for mortgage insurance under title II of the National 
     Housing Act are established at the minimum amount sufficient 
     to--
       (A) comply with the requirements of section 205(f) of such 
     Act (relating to required capital ratio for the Mutual 
     Mortgage Insurance Fund); and
       (B) ensure the safety and soundness of the other mortgage 
     insurance funds under such Act; and
       (2) any negative credit subsidy for such fiscal year 
     resulting from such mortgage insurance programs adequately 
     ensures the efficient delivery and availability of such 
     programs.
       (c) Study and Report.--The Secretary of Housing and Urban 
     Development shall conduct a study to obtain recommendations 
     from participants in the private residential (both single 
     family and multifamily) mortgage lending business and the 
     secondary market for such mortgages on how best to update and 
     upgrade processes and technologies for the mortgage insurance 
     programs under title II of the National Housing Act so that 
     the procedures for originating, insuring, and servicing of 
     such mortgages conform with those customarily used by 
     secondary market purchasers of residential mortgage loans. 
     Not later than the expiration of the 12-month period 
     beginning on the date of the enactment of this title, the 
     Secretary shall submit a report to the Congress describing 
     the progress made and to be made toward updating and 
     upgrading such processes and technology, and providing 
     appropriate staffing for such mortgage insurance programs.

     SEC. 2127. POST-PURCHASE HOUSING COUNSELING ELIGIBILITY 
                   IMPROVEMENTS.

       Section 106(c)(4) of the Housing and Urban Development Act 
     of 1968 (12 U.S.C. 1701x(c)(4)) is amended:
       (1) in subparagraph (C)--
       (A) in clause (i), by striking ``; or'' and inserting a 
     semicolon;
       (B) in clause (ii), by striking the period at the end and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(iii) a significant reduction in the income of the 
     household due to divorce or death; or

[[Page 15940]]

       ``(iv) a significant increase in basic expenses of the 
     homeowner or an immediate family member of the homeowner 
     (including the spouse, child, or parent for whom the 
     homeowner provides substantial care or financial assistance) 
     due to--

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

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

     SEC. 2128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING 
                   DEMONSTRATION.

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

     SEC. 2129. FRAUD PREVENTION.

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

     SEC. 2130. LIMITATION ON MORTGAGE INSURANCE PREMIUM 
                   INCREASES.

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

     SEC. 2131. SAVINGS PROVISION.

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

     SEC. 2132. IMPLEMENTATION.

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

     SEC. 2133. MORATORIUM ON IMPLEMENTATION OF RISK-BASED 
                   PREMIUMS.

       (a) In General.--During the 12-month period beginning on 
     the date of enactment of this Act, the Secretary of Housing 
     and Urban Development shall not enact, execute, or take any 
     action to make effective the planned implementation of risk-
     based premiums, which are designed for mortgage lenders to 
     offer borrowers an FHA-insured product that provides a range 
     of mortgage insurance premium pricing, based on the risk that 
     the insurance contract represents, as such planned 
     implementation was set forth in the Notice published in the 
     Federal Register on May 13, 2008 (Vol. 73, No. 93, Pages 
     27703 through 27711)(effective July 14, 2008).
       (b) Insurance of Mortgages Under the National Housing 
     Act.--During the 12-month period beginning on the date of 
     enactment of this Act, the Secretary of Housing and Urban 
     Development shall not enact, execute, or take any action to 
     make effective the implementation of any other new risk-based 
     premium product related to the insurance of any mortgage on a 
     single family residence under title II of the National 
     Housing Act, where the premium price for such new product is 
     based in whole or in part on a borrower's Decision Credit 
     Score, as that term is defined in the Notice described under 
     subsection (a), or any successor thereto.

          Subtitle B--Manufactured Housing Loan Modernization

     SEC. 2141. SHORT TITLE.

       This subtitle may be cited as the ``FHA Manufactured 
     Housing Loan Modernization Act of 2008''.

     SEC. 2142. PURPOSES.

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

     SEC. 2143. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION 
                   PORTFOLIO.

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

     SEC. 2144. INSURANCE BENEFITS.

       (a) In General.--Subsection (b) of section 2 of the 
     National Housing Act (12 U.S.C. 1703(b)), is amended by 
     adding at the end the following new paragraph:
       ``(8) Insurance benefits for manufactured housing loans.--
     Any contract of insurance with respect to loans, advances of 
     credit, or purchases in connection with a manufactured home 
     or a lot on which to place a manufactured home (or both) for 
     a financial institution that is executed under this title 
     after the date of the enactment of the FHA Manufactured 
     Housing Loan Modernization Act of 2008 by the Secretary shall 
     be conclusive evidence of the eligibility of such financial 
     institution for insurance, and the validity of any contract 
     of insurance so executed shall be incontestable in the hands 
     of the bearer from the date of the execution of such 
     contract, except for fraud or misrepresentation on the part 
     of such institution.''.
       (b) Applicability.--The amendment made by subsection (a) 
     shall only apply to loans that are registered or endorsed for 
     insurance after the date of the enactment of this title.

     SEC. 2145. MAXIMUM LOAN LIMITS.

       (a) Dollar Amounts.--Paragraph (1) of section 2(b) of the 
     National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
       (1) in clause (ii) of subparagraph (A), by striking 
     ``$17,500'' and inserting ``$25,090'';
       (2) in subparagraph (C) by striking ``$48,600'' and 
     inserting ``$69,678'';
       (3) in subparagraph (D) by striking ``$64,800'' and 
     inserting ``$92,904'';
       (4) in subparagraph (E) by striking ``$16,200'' and 
     inserting ``$23,226''; and
       (5) by realigning subparagraphs (C), (D), and (E) 2 ems to 
     the left so that the left margins of such subparagraphs are 
     aligned with the margins of subparagraphs (A) and (B).
       (b) Annual Indexing.--Subsection (b) of section 2 of the 
     National Housing Act (12 U.S.C. 1703(b)), as amended by the 
     preceding provisions of this title, is further amended by 
     adding at the end the following new paragraph:
       ``(9) Annual indexing of manufactured housing loans.--The 
     Secretary shall develop a method of indexing in order to 
     annually adjust the loan limits established in subparagraphs

[[Page 15941]]

     (A)(ii), (C), (D), and (E) of this subsection. Such index 
     shall be based on the manufactured housing price data 
     collected by the United States Census Bureau. The Secretary 
     shall establish such index no later than 1 year after the 
     date of the enactment of the FHA Manufactured Housing Loan 
     Modernization Act of 2008.''
       (c) Technical and Conforming Changes.--Paragraph (1) of 
     section 2(b) of the National Housing Act (12 U.S.C. 
     1703(b)(1)) is amended--
       (1) by striking ``No'' and inserting ``Except as provided 
     in the last sentence of this paragraph, no''; and
       (2) by adding after and below subparagraph (G) the 
     following:
       ``The Secretary shall, by regulation, annually increase the 
     dollar amount limitations in subparagraphs (A)(ii), (C), (D), 
     and (E) (as such limitations may have been previously 
     adjusted under this sentence) in accordance with the index 
     established pursuant to paragraph (9).''.

     SEC. 2146. INSURANCE PREMIUMS.

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

     SEC. 2147. TECHNICAL CORRECTIONS.

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

     SEC. 2148. REVISION OF UNDERWRITING CRITERIA.

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

     SEC. 2149. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

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

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

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

     SEC. 2150. LEASEHOLD REQUIREMENTS.

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

     TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

     SEC. 2201. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT 
                   FOR CERTAIN HOUSING LOANS GUARANTEED BY THE 
                   SECRETARY OF VETERANS AFFAIRS.

       Notwithstanding subparagraph (C) of section 3703(a)(1) of 
     title 38, United States Code, for purposes of any loan 
     described in subparagraph (A)(i)(IV) of such section that is 
     originated during the period beginning on the date of the 
     enactment of this Act and ending on December 31, 2008, the 
     term ``maximum guaranty amount'' shall mean an amount equal 
     to 25 percent of the higher of--

[[Page 15942]]

       (1) the limitation determined under section 305(a)(2) of 
     the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1454(a)(2)) for the calendar year in which the loan is 
     originated for a single-family residence; or
       (2) 125 percent of the area median price for a single-
     family residence, but in no case to exceed 175 percent of the 
     limitation determined under such section 305(a)(2) for the 
     calendar year in which the loan is originated for a single-
     family residence.

     SEC. 2202. COUNSELING ON MORTGAGE FORECLOSURES FOR MEMBERS OF 
                   THE ARMED FORCES RETURNING FROM SERVICE ABROAD.

       (a) In General.--The Secretary of Defense shall develop and 
     implement a program to advise members of the Armed Forces 
     (including members of the National Guard and Reserve) who are 
     returning from service on active duty abroad (including 
     service in Operation Iraqi Freedom and Operation Enduring 
     Freedom) on actions to be taken by such members to prevent or 
     forestall mortgage foreclosures.
       (b) Elements.--The program required by subsection (a) shall 
     include the following:
       (1) Credit counseling.
       (2) Home mortgage counseling.
       (3) Such other counseling and information as the Secretary 
     considers appropriate for purposes of the program.
       (c) Timing of Provision of Counseling.--Counseling and 
     other information under the program required by subsection 
     (a) shall be provided to a member of the Armed Forces covered 
     by the program as soon as practicable after the return of the 
     member from service as described in subsection (a).

     SEC. 2203. ENHANCEMENT OF PROTECTIONS FOR SERVICEMEMBERS 
                   RELATING TO MORTGAGES AND MORTGAGE 
                   FORECLOSURES.

       (a) Extension of Period of Protections Against Mortgage 
     Foreclosures.--
       (1) Extension of protection period.--Subsection (c) of 
     section 303 of the Servicemembers Civil Relief Act (50 U.S.C. 
     App. 533) is amended by striking ``90 days'' and inserting 
     ``9 months''.
       (2) Extension of stay of proceedings period.--Subsection 
     (b) of such section is amended by striking ``90 days'' and 
     inserting ``9 months''.
       (b) Treatment of Mortgages as Obligations Subject to 
     Interest Rate Limitation.--Section 207 of the Servicemembers 
     Civil Relief Act (50 U.S.C. App. 527) is amended--
       (1) in subsection (a)(1), by striking ``in excess of 6 
     percent'' the second place it appears and all that follows 
     and inserting ``in excess of 6 percent--
       ``(A) during the period of military service and one year 
     thereafter, in the case of an obligation or liability 
     consisting of a mortgage, trust deed, or other security in 
     the nature of a mortgage; or
       ``(B) during the period of military service, in the case of 
     any other obligation or liability.''; and
       (2) by striking subsection (d) and inserting the following 
     new subsection:
       ``(d) Definitions.--In this section:
       ``(1) Interest.--The term `interest' includes service 
     charges, renewal charges, fees, or any other charges (except 
     bona fide insurance) with respect to an obligation or 
     liability.
       ``(2) Obligation or liability.--The term `obligation or 
     liability' includes an obligation or liability consisting of 
     a mortgage, trust deed, or other security in the nature of a 
     mortgage.''.
       (c) Effective Date; Sunset.--
       (1) Effective date.--The amendment made by subsection (a) 
     shall take effect on the date of enactment of this Act.
       (2) Sunset.--The amendments made by subsection (a) shall 
     expire on December 31, 2010. Effective January 1, 2011, the 
     provisions of subsections (b) and (c) of section 303 of the 
     Servicemembers Civil Relief Act, as in effect on the day 
     before the date of the enactment of this Act, are hereby 
     revived.

TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND 
                            FORECLOSED HOMES

     SEC. 2301. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF 
                   ABANDONED AND FORECLOSED HOMES.

       (a) Direct Appropriations.--There are appropriated out of 
     any money in the Treasury not otherwise appropriated for the 
     fiscal year 2008, $4,000,000,000, to remain available until 
     expended, for assistance to States and units of general local 
     government (as such terms are defined in section 102 of the 
     Housing and Community Development Act of 1974 (42 U.S.C. 
     5302)) for the redevelopment of abandoned and foreclosed upon 
     homes and residential properties.
       (b) Allocation of Appropriated Amounts.--
       (1) In general.--The amounts appropriated or otherwise made 
     available to States and units of general local government 
     under this section shall be allocated based on a funding 
     formula established by the Secretary of Housing and Urban 
     Development (in this title referred to as the ``Secretary'').
       (2) Formula to be devised swiftly.--The funding formula 
     required under paragraph (1) shall be established not later 
     than 60 days after the date of enactment of this section.
       (3) Criteria.--The funding formula required under paragraph 
     (1) shall ensure that any amounts appropriated or otherwise 
     made available under this section are allocated to States and 
     units of general local government with the greatest need, as 
     such need is determined in the discretion of the Secretary 
     based on--
       (A) the number and percentage of home foreclosures in each 
     State or unit of general local government;
       (B) the number and percentage of homes financed by a 
     subprime mortgage related loan in each State or unit of 
     general local government; and
       (C) the number and percentage of homes in default or 
     delinquency in each State or unit of general local 
     government.
       (4) Distribution.--Amounts appropriated or otherwise made 
     available under this section shall be distributed according 
     to the funding formula established by the Secretary under 
     paragraph (1) not later than 30 days after the establishment 
     of such formula.
       (c) Use of Funds.--
       (1) In general.--Any State or unit of general local 
     government that receives amounts pursuant to this section 
     shall, not later than 18 months after the receipt of such 
     amounts, use such amounts to purchase and redevelop abandoned 
     and foreclosed homes and residential properties.
       (2) Priority.--Any State or unit of general local 
     government that receives amounts pursuant to this section 
     shall in distributing such amounts give priority emphasis and 
     consideration to those metropolitan areas, metropolitan 
     cities, urban areas, rural areas, low- and moderate-income 
     areas, and other areas with the greatest need, including 
     those--
       (A) with the greatest percentage of home foreclosures;
       (B) with the highest percentage of homes financed by a 
     subprime mortgage related loan; and
       (C) identified by the State or unit of general local 
     government as likely to face a significant rise in the rate 
     of home foreclosures.
       (3) Eligible uses.--Amounts made available under this 
     section may be used to--
       (A) establish financing mechanisms for purchase and 
     redevelopment of foreclosed upon homes and residential 
     properties, including such mechanisms as soft-seconds, loan 
     loss reserves, and shared-equity loans for low- and moderate-
     income homebuyers;
       (B) purchase and rehabilitate homes and residential 
     properties that have been abandoned or foreclosed upon, in 
     order to sell, rent, or redevelop such homes and properties;
       (C) establish land banks for homes that have been 
     foreclosed upon;
       (D) demolish blighted structures; and
       (E) redevelop demolished or vacant properties.
       (d) Limitations.--
       (1) On purchases.--Any purchase of a foreclosed upon home 
     or residential property under this section shall be at a 
     discount from the current market appraised value of the home 
     or property, taking into account its current condition, and 
     such discount shall ensure that purchasers are paying below-
     market value for the home or property.
       (2) Sale of homes.--If an abandoned or foreclosed upon home 
     or residential property is purchased, redeveloped, or 
     otherwise sold to an individual as a primary residence, then 
     such sale shall be in an amount equal to or less than the 
     cost to acquire and redevelop or rehabilitate such home or 
     property up to a decent, safe, and habitable condition.
       (3) Reinvestment of profits.--
       (A) Profits from sales, rentals, and redevelopment.--
       (i) 5-year reinvestment period.--During the 5-year period 
     following the date of enactment of this Act, any revenue 
     generated from the sale, rental, redevelopment, 
     rehabilitation, or any other eligible use that is in excess 
     of the cost to acquire and redevelop (including reasonable 
     development fees) or rehabilitate an abandoned or foreclosed 
     upon home or residential property shall be provided to and 
     used by the State or unit of general local government in 
     accordance with, and in furtherance of, the intent and 
     provisions of this section.
       (ii) Deposits in the treasury.--

       (I) Profits.--Upon the expiration of the 5-year period set 
     forth under clause (i), any revenue generated from the sale, 
     rental, redevelopment, rehabilitation, or any other eligible 
     use that is in excess of the cost to acquire and redevelop 
     (including reasonable development fees) or rehabilitate an 
     abandoned or foreclosed upon home or residential property 
     shall be deposited in the Treasury of the United States as 
     miscellaneous receipts, unless the Secretary approves a 
     request to use the funds for purposes under this Act.
       (II) Other amounts.--Upon the expiration of the 5-year 
     period set forth under clause (i), any other revenue not 
     described under subclause (I) generated from the sale, 
     rental, redevelopment, rehabilitation, or any other eligible 
     use of an abandoned or foreclosed upon home or residential 
     property shall be deposited in the Treasury of the United 
     States as miscellaneous receipts.

       (B) Other revenues.--Any revenue generated under 
     subparagraphs (A), (C) or (D) of subsection (c)(3) shall be 
     provided to and used by the State or unit of general local 
     government in accordance with, and in furtherance of, the 
     intent and provisions of this section.
       (e) Rules of Construction.--
       (1) In general.--Except as otherwise provided by this 
     section, amounts appropriated, revenues generated, or amounts 
     otherwise made available to States and units of general local 
     government under this section shall be treated as though such 
     funds were community development block grant funds under 
     title I of the Housing and Community Development Act of 1974 
     (42 U.S.C. 5301 et seq.).
       (2) No match.--No matching funds shall be required in order 
     for a State or unit of general local government to receive 
     any amounts under this section.

[[Page 15943]]

       (f) Authority To Specify Alternative Requirements.--
       (1) In general.--In administering any amounts appropriated 
     or otherwise made available under this section, the Secretary 
     may specify alternative requirements to any provision under 
     title I of the Housing and Community Development Act of 1974 
     (except for those related to fair housing, nondiscrimination, 
     labor standards, and the environment) in accordance with the 
     terms of this section and for the sole purpose of expediting 
     the use of such funds.
       (2) Notice.--The Secretary shall provide written notice of 
     its intent to exercise the authority to specify alternative 
     requirements under paragraph (1) to the Committee on Banking, 
     Housing and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives not later 
     than 10 business days before such exercise of authority is to 
     occur.
       (3) Low and moderate income requirement.--
       (A) In general.--Notwithstanding the authority of the 
     Secretary under paragraph (1)--
       (i) all of the funds appropriated or otherwise made 
     available under this section shall be used with respect to 
     individuals and families whose income does not exceed 120 
     percent of area median income; and
       (ii) not less than 25 percent of the funds appropriated or 
     otherwise made available under this section shall be used for 
     the purchase and redevelopment of abandoned or foreclosed 
     upon homes or residential properties that will be used to 
     house individuals or families whose incomes do not exceed 50 
     percent of area median income.
       (B) Recurrent requirement.--The Secretary shall, by rule or 
     order, ensure, to the maximum extent practicable and for the 
     longest feasible term, that the sale, rental, or 
     redevelopment of abandoned and foreclosed upon homes and 
     residential properties under this section remain affordable 
     to individuals or families described in subparagraph (A).
       (g) Periodic Audits.--In consultation with the Secretary of 
     Housing and Urban Development, the Comptroller General of the 
     United States shall conduct periodic audits to ensure that 
     funds appropriated, made available, or otherwise distributed 
     under this section are being used in a manner consistent with 
     the criteria provided in this section.

     SEC. 2302. NATIONWIDE DISTRIBUTION OF RESOURCES.

       Notwithstanding any other provision of this Act or the 
     amendments made by this Act, each State shall receive not 
     less than 0.5 percent of funds made available under section 
     2301 (relating to emergency assistance for the redevelopment 
     of abandoned and foreclosed homes).

     SEC. 2303. LIMITATION ON USE OF FUNDS WITH RESPECT TO EMINENT 
                   DOMAIN.

       No State or unit of general local government may use any 
     amounts received pursuant to section 2301 to fund any project 
     that seeks to use the power of eminent domain, unless eminent 
     domain is employed only for a public use: Provided, That for 
     purposes of this section, public use shall not be construed 
     to include economic development that primarily benefits 
     private entities.

     SEC. 2304. LIMITATION ON DISTRIBUTION OF FUNDS.

       (a) In General.--None of the funds made available under 
     this title or title IV shall be distributed to--
       (1) an organization which has been indicted for a violation 
     under Federal law relating to an election for Federal office; 
     or
       (2) an organization which employs applicable individuals.
       (b) Applicable Individuals Defined.--In this section, the 
     term ``applicable individual'' means an individual who--
       (1) is--
       (A) employed by the organization in a permanent or 
     temporary capacity;
       (B) contracted or retained by the organization; or
       (C) acting on behalf of, or with the express or apparent 
     authority of, the organization; and
       (2) has been indicted for a violation under Federal law 
     relating to an election for Federal office.

     SEC. 2305. COUNSELING INTERMEDIARIES.

       Notwithstanding any other provision of this Act, the amount 
     appropriated under section 2301(a) of this Act shall be 
     $3,920,000,000 and the amount appropriated under section 2401 
     of this Act shall be $180,000,000: Provided, That of amounts 
     appropriated under such section 2401 $30,000,000 shall be 
     used by the Neighborhood Reinvestment Corporation (referred 
     to in this section as the ``NRC'') to make grants to 
     counseling intermediaries approved by the Department of 
     Housing and Urban Development or the NRC to hire attorneys to 
     assist homeowners who have legal issues directly related to 
     the homeowner's foreclosure, delinquency or short sale. Such 
     attorneys shall be capable of assisting homeowners of owner-
     occupied homes with mortgages in default, in danger of 
     default, or subject to or at risk of foreclosure and who have 
     legal issues that cannot be handled by counselors already 
     employed by such intermediaries: Provided, That of the 
     amounts provided for in the prior provisos the NRC shall give 
     priority consideration to counseling intermediaries and legal 
     organizations that (1) provide legal assistance in the 100 
     metropolitan statistical areas (as defined by the Director of 
     the Office of Management and Budget) with the highest home 
     foreclosure rates, and (2) have the capacity to begin using 
     the financial assistance within 90 days after receipt of the 
     assistance: Provided further, That no funds provided under 
     this Act shall be used to provide, obtain, or arrange on 
     behalf of a homeowner, legal representation involving or for 
     the purposes of civil litigation.

                 TITLE IV--HOUSING COUNSELING RESOURCES

     SEC. 2401. HOUSING COUNSELING RESOURCES.

       There are appropriated out of any money in the Treasury not 
     otherwise appropriated for the fiscal year 2008, for an 
     additional amount for the ``Neighborhood Reinvestment 
     Corporation--Payment to the Neighborhood Reinvestment 
     Corporation'' $100,000,000, to remain available until 
     September 30, 2008, for foreclosure mitigation activities 
     under the terms and conditions contained in the second 
     undesignated paragraph (beginning with the phrase ``For an 
     additional amount'') under the heading ``Neighborhood 
     Reinvestment Corporation--Payment to the Neighborhood 
     Reinvestment Corporation'' of Public Law 110-161.

     SEC. 2402. CREDIT COUNSELING.

       (a) In General.--Entities approved by the Neighborhood 
     Reinvestment Corporation or the Secretary and State housing 
     finance entities receiving funds under this title shall work 
     to identify and coordinate with non-profit organizations 
     operating national or statewide toll-free foreclosure 
     prevention hotlines, including those that--
       (1) serve as a consumer referral source and data repository 
     for borrowers experiencing some form of delinquency or 
     foreclosure;
       (2) connect callers with local housing counseling agencies 
     approved by the Neighborhood Reinvestment Corporation or the 
     Secretary to assist with working out a positive resolution to 
     their mortgage delinquency or foreclosure; or
       (3) facilitate or offer free assistance to help homeowners 
     to understand their options, negotiate solutions, and find 
     the best resolution for their particular circumstances.

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

     SEC. 2501. SHORT TITLE.

       This title may be cited as the ``Mortgage Disclosure 
     Improvement Act of 2008''.

     SEC. 2502. ENHANCED MORTGAGE LOAN DISCLOSURES.

       (a) Truth in Lending Act Disclosures.--Section 128(b)(2) of 
     the Truth in Lending Act (15 U.S.C. 1638(b)(2)) is amended--
       (1) by inserting ``(A)'' before ``In the'';
       (2) by striking ``a residential mortgage transaction, as 
     defined in section 103(w)'' and inserting ``any extension of 
     credit that is secured by the dwelling of a consumer'';
       (3) by striking ``before the credit is extended, or'';
       (4) by inserting ``, which shall be at least 7 business 
     days before consummation of the transaction'' after ``written 
     application'';
       (5) by striking ``, whichever is earlier''; and
       (6) by striking ``If the'' and all that follows through the 
     end of the paragraph and inserting the following:
       ``(B) In the case of an extension of credit that is secured 
     by the dwelling of a consumer, the disclosures provided under 
     subparagraph (A), shall be in addition to the other 
     disclosures required by subsection (a), and shall--
       ``(i) state in conspicuous type size and format, the 
     following: `You are not required to complete this agreement 
     merely because you have received these disclosures or signed 
     a loan application.'; and
       ``(ii) be provided in the form of final disclosures at the 
     time of consummation of the transaction, in the form and 
     manner prescribed by this section.
       ``(C) In the case of an extension of credit that is secured 
     by the dwelling of a consumer, under which the annual rate of 
     interest is variable, or with respect to which the regular 
     payments may otherwise be variable, in addition to the other 
     disclosures required by subsection (a), the disclosures 
     provided under this subsection shall do the following:
       ``(i) Label the payment schedule as follows: `Payment 
     Schedule: Payments Will Vary Based on Interest Rate Changes'.
       ``(ii) State in conspicuous type size and format examples 
     of adjustments to the regular required payment on the 
     extension of credit based on the change in the interest rates 
     specified by the contract for such extension of credit. Among 
     the examples required to be provided under this clause is an 
     example that reflects the maximum payment amount of the 
     regular required payments on the extension of credit, based 
     on the maximum interest rate allowed under the contract, in 
     accordance with the rules of the Board. Prior to issuing any 
     rules pursuant to this clause, the Board shall conduct 
     consumer testing to determine the appropriate format for 
     providing the disclosures required under this subparagraph to 
     consumers so that such disclosures can be easily understood, 
     including the fact that the initial regular payments are for 
     a specific time period that will end on a certain date, that 
     payments will adjust afterwards potentially to a higher 
     amount, and that there is no guarantee that the borrower will 
     be able to refinance to a lower amount.
       ``(D) In any case in which the disclosure statement under 
     subparagraph (A) contains an annual percentage rate of 
     interest that is no longer accurate, as determined under 
     section 107(c), the creditor shall furnish an additional, 
     corrected statement to the borrower, not later than 3 
     business days before the date of consummation of the 
     transaction.
       ``(E) The consumer shall receive the disclosures required 
     under this paragraph before paying any fee to the creditor or 
     other person in connection with the consumer's application 
     for

[[Page 15944]]

     an extension of credit that is secured by the dwelling of a 
     consumer. If the disclosures are mailed to the consumer, the 
     consumer is considered to have received them 3 business days 
     after they are mailed. A creditor or other person may impose 
     a fee for obtaining the consumer's credit report before the 
     consumer has received the disclosures under this paragraph, 
     provided the fee is bona fide and reasonable in amount.
       ``(F) Waiver of timeliness of disclosures.--To expedite 
     consummation of a transaction, if the consumer determines 
     that the extension of credit is needed to meet a bona fide 
     personal financial emergency, the consumer may waive or 
     modify the timing requirements for disclosures under 
     subparagraph (A), provided that--
       ``(i) the term `bona fide personal emergency' may be 
     further defined in regulations issued by the Board;
       ``(ii) the consumer provides to the creditor a dated, 
     written statement describing the emergency and specifically 
     waiving or modifying those timing requirements, which 
     statement shall bear the signature of all consumers entitled 
     to receive the disclosures required by this paragraph; and
       ``(iii) the creditor provides to the consumers at or before 
     the time of such waiver or modification, the final 
     disclosures required by paragraph (1).
       ``(G) The requirements of subparagraphs (B), (C), (D) and 
     (E) shall not apply to extensions of credit relating to plans 
     described in section 101(53D) of title 11, United States 
     Code.''.
       (b) Civil Liability.--Section 130(a) of the Truth in 
     Lending Act (15 U.S.C. 1640(a)) is amended--
       (1) in paragraph (2)(A)(iii), by striking ``not less than 
     $200 or greater than $2,000'' and inserting ``not less than 
     $400 or greater than $4,000''; and
       (2) in the penultimate sentence of the undesignated matter 
     following paragraph (4)--
       (A) by inserting ``or section 128(b)(2)(C)(ii),'' after 
     ``128(a),''; and
       (B) by inserting ``or section 128(b)(2)(C)(ii)'' before the 
     period.
       (c) Effective Dates.--
       (1) General disclosures.--Except as provided in paragraph 
     (2), the amendments made by subsection (a) shall become 
     effective 12 months after the date of enactment of this Act.
       (2) Variable interest rates.--Subparagraph (C) of section 
     128(b)(2) of the Truth in Lending Act (15 U.S.C. 
     1638(b)(2)(C)), as added by subsection (a) of this section, 
     shall become effective on the earlier of--
       (A) the compliance date established by the Board for such 
     purpose, by regulation; or
       (B) 30 months after the date of enactment of this Act.

     SEC. 2503. COMMUNITY DEVELOPMENT INVESTMENT AUTHORITY FOR 
                   DEPOSITORY INSTITUTIONS.

       (a) National Banks.--The first sentence of the paragraph 
     designated as the ``Eleventh'' of section 5136 of the Revised 
     Statutes of the United States (12 U.S.C. 24) is amended by 
     striking ``promotes the public welfare by benefitting 
     primarily'' and inserting ``is designed primarily to promote 
     the public welfare, including the welfare of''.
       (b) State Member Banks.--The first sentence of the 23rd 
     paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 
     338a) is amended by striking ``promotes the public welfare by 
     benefitting primarily'' and inserting ``is designed primarily 
     to promote the public welfare, including the welfare of''.

                   TITLE VI--VETERANS HOUSING MATTERS

     SEC. 2601. HOME IMPROVEMENTS AND STRUCTURAL ALTERATIONS FOR 
                   TOTALLY DISABLED MEMBERS OF THE ARMED FORCES 
                   BEFORE DISCHARGE OR RELEASE FROM THE ARMED 
                   FORCES.

       Section 1717 of title 38, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(d)(1) In the case of a member of the Armed Forces who, 
     as determined by the Secretary, has a disability permanent in 
     nature incurred or aggravated in the line of duty in the 
     active military, naval, or air service, the Secretary may 
     furnish improvements and structural alterations for such 
     member for such disability or as otherwise described in 
     subsection (a)(2) while such member is hospitalized or 
     receiving outpatient medical care, services, or treatment for 
     such disability if the Secretary determines that such member 
     is likely to be discharged or released from the Armed Forces 
     for such disability.
       ``(2) The furnishing of improvements and alterations under 
     paragraph (1) in connection with the furnishing of medical 
     services described in subparagraph (A) or (B) of subsection 
     (a)(2) shall be subject to the limitation specified in the 
     applicable subparagraph.''.

     SEC. 2602. ELIGIBILITY FOR SPECIALLY ADAPTED HOUSING BENEFITS 
                   AND ASSISTANCE FOR MEMBERS OF THE ARMED FORCES 
                   WITH SERVICE-CONNECTED DISABILITIES AND 
                   INDIVIDUALS RESIDING OUTSIDE THE UNITED STATES.

       (a) Eligibility.--Chapter 21 of title 38, United States 
     Code, is amended by inserting after section 2101 the 
     following new section:

     ``Sec. 2101A. Eligibility for benefits and assistance: 
       members of the Armed Forces with service-connected 
       disabilities; individuals residing outside the United 
       States

       ``(a) Members With Service-Connected Disabilities.--(1) The 
     Secretary may provide assistance under this chapter to a 
     member of the Armed Forces serving on active duty who is 
     suffering from a disability that meets applicable criteria 
     for benefits under this chapter if the disability is incurred 
     or aggravated in line of duty in the active military, naval, 
     or air service. Such assistance shall be provided to the same 
     extent as assistance is provided under this chapter to 
     veterans eligible for assistance under this chapter and 
     subject to the same requirements as veterans under this 
     chapter.
       ``(2) For purposes of this chapter, any reference to a 
     veteran or eligible individual shall be treated as a 
     reference to a member of the Armed Forces described in 
     subsection (a) who is similarly situated to the veteran or 
     other eligible individual so referred to.
       ``(b) Benefits and Assistance for Individuals Residing 
     Outside the United States.--(1) Subject to paragraph (2), the 
     Secretary may, at the Secretary's discretion, provide 
     benefits and assistance under this chapter (other than 
     benefits under section 2106 of this title) to any individual 
     otherwise eligible for such benefits and assistance who 
     resides outside the United States.
       ``(2) The Secretary may provide benefits and assistance to 
     an individual under paragraph (1) only if--
       ``(A) the country or political subdivision in which the 
     housing or residence involved is or will be located permits 
     the individual to have or acquire a beneficial property 
     interest (as determined by the Secretary) in such housing or 
     residence; and
       ``(B) the individual has or will acquire a beneficial 
     property interest (as so determined) in such housing or 
     residence.
       ``(c) Regulations.--Benefits and assistance under this 
     chapter by reason of this section shall be provided in 
     accordance with such regulations as the Secretary may 
     prescribe.''.
       (b) Conforming Amendments.--
       (1) Repeal of superseded authority.--Section 2101 of title 
     38, United States Code, is amended--
       (A) by striking subsection (c); and
       (B) by redesignating subsection (d) as subsection (c).
       (2) Limitations on assistance.--Section 2102 of title 38, 
     United States Code, is amended--
       (A) in subsection (a)--
       (i) by striking ``veteran'' each place it appears and 
     inserting ``individual''; and
       (ii) in paragraph (3), by striking ``veteran's'' and 
     inserting ``individual's'';
       (B) in subsection (b)(1), by striking ``a veteran'' and 
     inserting ``an individual'';
       (C) in subsection (c)--
       (i) by striking ``a veteran'' and inserting ``an 
     individual''; and
       (ii) by striking ``the veteran'' each place it appears and 
     inserting ``the individual''; and
       (D) in subsection (d), by striking ``a veteran'' each place 
     it appears and inserting ``an individual''.
       (3) Assistance for individuals temporarily residing in 
     housing of family member.--Section 2102A of title 38, United 
     States Code, is amended--
       (A) by striking ``veteran'' each place it appears (other 
     than in subsection (b)) and inserting ``individual'';
       (B) in subsection (a), by striking ``veteran's'' each place 
     it appears and inserting ``individual's''; and
       (C) in subsection (b), by striking ``a veteran'' each place 
     it appears and inserting ``an individual''.
       (4) Furnishing of plans and specifications.--Section 2103 
     of title 38, United States Code, is amended by striking 
     ``veterans'' both places it appears and inserting 
     ``individuals''.
       (5) Construction of benefits.--Section 2104 of title 38, 
     United States Code, is amended--
       (A) in subsection (a), by striking ``veteran'' each place 
     it appears and inserting ``individual''; and
       (B) in subsection (b)--
       (i) in the first sentence, by striking ``A veteran'' and 
     inserting ``An individual'';
       (ii) in the second sentence, by striking ``a veteran'' and 
     inserting ``an individual''; and
       (iii) by striking ``such veteran'' each place it appears 
     and inserting ``such individual''.
       (6) Veterans' mortgage life insurance.--Section 2106 of 
     title 38, United States Code, is amended--
       (A) in subsection (a)--
       (i) by striking ``any eligible veteran'' and inserting 
     ``any eligible individual''; and
       (ii) by striking ``the veterans' '' and inserting ``the 
     individual's'';
       (B) in subsection (b), by striking ``an eligible veteran'' 
     and inserting ``an eligible individual'';
       (C) in subsection (e), by striking ``an eligible veteran'' 
     and inserting ``an individual'';
       (D) in subsection (h), by striking ``each veteran'' and 
     inserting ``each individual'';
       (E) in subsection (i), by striking ``the veteran's'' each 
     place it appears and inserting ``the individual's'';
       (F) by striking ``the veteran'' each place it appears and 
     inserting ``the individual''; and
       (G) by striking ``a veteran'' each place it appears and 
     inserting ``an individual''.
       (7) Heading amendments.--(A) The heading of section 2101 of 
     title 38, United States Code, is amended to read as follows:

     ``Sec. 2101. Acquisition and adaptation of housing: eligible 
       veterans''.

       (B) The heading of section 2102A of such title is amended 
     to read as follows:

     ``Sec. 2102A. Assistance for individuals residing temporarily 
       in housing owned by a family member''.

       (8) Clerical amendments.--The table of sections at the 
     beginning of chapter 21 of title 38, United States Code, is 
     amended--

[[Page 15945]]

       (A) by striking the item relating to section 2101 and 
     inserting the following new item:

``2101. Acquisition and adaptation of housing: eligible veterans.'';

       (B) by inserting after the item relating to section 2101, 
     as so amended, the following new item:

``2101A. Eligibility for benefits and assistance: members of the Armed 
              Forces with service-connected disabilities; individuals 
              residing outside the United States.'';

     and
       (C) by striking the item relating to section 2102A and 
     inserting the following new item:

``2102A. Assistance for individuals residing temporarily in housing 
              owned by a family member.''.

     SEC. 2603. SPECIALLY ADAPTED HOUSING ASSISTANCE FOR 
                   INDIVIDUALS WITH SEVERE BURN INJURIES.

       Section 2101 of title 38, United States Code, is amended--
       (1) in subsection (a)(2), by adding at the end the 
     following new subparagraph:
       ``(E) The disability is due to a severe burn injury (as 
     determined pursuant to regulations prescribed by the 
     Secretary).''; and
       (2) in subsection (b)(2)--
       (A) by striking ``either'' and inserting ``any''; and
       (B) by adding at the end the following new subparagraph:
       ``(C) The disability is due to a severe burn injury (as so 
     determined).''.

     SEC. 2604. EXTENSION OF ASSISTANCE FOR INDIVIDUALS RESIDING 
                   TEMPORARILY IN HOUSING OWNED BY A FAMILY 
                   MEMBER.

       Section 2102A(e) of title 38, United States Code, is 
     amended by striking ``after the end of the five-year period 
     that begins on the date of the enactment of the Veterans' 
     Housing Opportunity and Benefits Improvement Act of 2006'' 
     and inserting ``after December 31, 2011''.

     SEC. 2605. INCREASE IN SPECIALLY ADAPTED HOUSING BENEFITS FOR 
                   DISABLED VETERANS.

       (a) In General.--Section 2102 of title 38, United States 
     Code, is amended--
       (1) in subsection (b)(2), by striking ``$10,000'' and 
     inserting ``$12,000'';
       (2) in subsection (d)--
       (A) in paragraph (1), by striking ``$50,000'' and inserting 
     ``$60,000''; and
       (B) in paragraph (2), by striking ``$10,000'' and inserting 
     ``$12,000''; and
       (3) by adding at the end the following new subsection:
       ``(e)(1) Effective on October 1 of each year (beginning in 
     2009), the Secretary shall increase the amounts described in 
     subsection (b)(2) and paragraphs (1) and (2) of subsection 
     (d) in accordance with this subsection.
       ``(2) The increase in amounts under paragraph (1) to take 
     effect on October 1 of a year shall be by an amount of such 
     amounts equal to the percentage by which--
       ``(A) the residential home cost-of-construction index for 
     the preceding calendar year, exceeds
       ``(B) the residential home cost-of-construction index for 
     the year preceding the year described in subparagraph (A).
       ``(3) The Secretary shall establish a residential home 
     cost-of-construction index for the purposes of this 
     subsection. The index shall reflect a uniform, national 
     average change in the cost of residential home construction, 
     determined on a calendar year basis. The Secretary may use an 
     index developed in the private sector that the Secretary 
     determines is appropriate for purposes of this subsection.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on July 1, 2008, and shall apply with 
     respect to payments made in accordance with section 2102 of 
     title 38, United States Code, on or after that date.

     SEC. 2606. REPORT ON SPECIALLY ADAPTED HOUSING FOR DISABLED 
                   INDIVIDUALS.

       (a) In General.--Not later than December 31, 2008, the 
     Secretary of Veterans Affairs shall submit to the Committee 
     on Veterans' Affairs of the Senate and the Committee on 
     Veterans' Affairs of the House of Representatives a report 
     that contains an assessment of the adequacy of the 
     authorities available to the Secretary under law to assist 
     eligible disabled individuals in acquiring--
       (1) suitable housing units with special fixtures or movable 
     facilities required for their disabilities, and necessary 
     land therefor;
       (2) such adaptations to their residences as are reasonably 
     necessary because of their disabilities; and
       (3) residences already adapted with special features 
     determined by the Secretary to be reasonably necessary as a 
     result of their disabilities.
       (b) Focus on Particular Disabilities.--The report required 
     by subsection (a) shall set forth a specific assessment of 
     the needs of--
       (1) veterans who have disabilities that are not described 
     in subsections (a)(2) and (b)(2) of section 2101 of title 38, 
     United States Code; and
       (2) other disabled individuals eligible for specially 
     adapted housing under chapter 21 of such title by reason of 
     section 2101A of such title (as added by section 2602(a) of 
     this Act) who have disabilities that are not described in 
     such subsections.

     SEC. 2607. REPORT ON SPECIALLY ADAPTED HOUSING ASSISTANCE FOR 
                   INDIVIDUALS WHO RESIDE IN HOUSING OWNED BY A 
                   FAMILY MEMBER ON PERMANENT BASIS.

       Not later than December 31, 2008, the Secretary of Veterans 
     Affairs shall submit to the Committee on Veterans' Affairs of 
     the Senate and the Committee on Veterans' Affairs of the 
     House of Representatives a report on the advisability of 
     providing assistance under section 2102A of title 38, United 
     States Code, to veterans described in subsection (a) of such 
     section, and to members of the Armed Forces covered by such 
     section 2102A by reason of section 2101A of title 38, United 
     States Code (as added by section 2602(a) of this Act), who 
     reside with family members on a permanent basis.

     SEC. 2608. DEFINITION OF ANNUAL INCOME FOR PURPOSES OF 
                   SECTION 8 AND OTHER PUBLIC HOUSING PROGRAMS.

       Section 3(b)(4) of the United States Housing Act of 1937 
     (42 U.S.C. 1437a(3)(b)(4)) is amended by inserting ``or any 
     deferred Department of Veterans Affairs disability benefits 
     that are received in a lump sum amount or in prospective 
     monthly amounts'' before ``may not be considered''.

     SEC. 2609. PAYMENT OF TRANSPORTATION OF BAGGAGE AND HOUSEHOLD 
                   EFFECTS FOR MEMBERS OF THE ARMED FORCES WHO 
                   RELOCATE DUE TO FORECLOSURE OF LEASED HOUSING.

       Section 406 of title 37, United States Code, is amended--
       (1) by redesignating subsections (k) and (l) as subsections 
     (l) and (m), respectively; and
       (2) by inserting after subsection (j) the following new 
     subsection (k):
       ``(k) A member of the armed forces who relocates from 
     leased or rental housing by reason of the foreclosure of such 
     housing is entitled to transportation of baggage and 
     household effects under subsection (b)(1) in the same manner, 
     and subject to the same conditions and limitations, as 
     similarly circumstanced members entitled to transportation of 
     baggage and household effects under that subsection.''.

  TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT

     SEC. 2701. SHORT TITLE.

       This title may be cited as the ``Small Public Housing 
     Authorities Paperwork Reduction Act''.

     SEC. 2702. PUBLIC HOUSING AGENCY PLANS FOR CERTAIN QUALIFIED 
                   PUBLIC HOUSING AGENCIES.

       (a) In General.--Section 5A(b) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437c-1(b)) is amended by adding at 
     the end the following:
       ``(3) Exemption of certain phas from filing requirement.--
       ``(A) In general.--Notwithstanding paragraph (1) or any 
     other provision of this Act--
       ``(i) the requirement under paragraph (1) shall not apply 
     to any qualified public housing agency; and
       ``(ii) except as provided in subsection (e)(4)(B), any 
     reference in this section or any other provision of law to a 
     `public housing agency' shall not be considered to refer to 
     any qualified public housing agency, to the extent such 
     reference applies to the requirement to submit an annual 
     public housing agency plan under this subsection.
       ``(B) Civil rights certification.--Notwithstanding that 
     qualified public housing agencies are exempt under 
     subparagraph (A) from the requirement under this section to 
     prepare and submit an annual public housing plan, each 
     qualified public housing agency shall, on an annual basis, 
     make the certification described in paragraph (16) of 
     subsection (d), except that for purposes of such qualified 
     public housing agencies, such paragraph shall be applied by 
     substituting `the public housing program of the agency' for 
     `the public housing agency plan'.
       ``(C) Definition.--For purposes of this section, the term 
     `qualified public housing agency' means a public housing 
     agency that meets the following requirements:
       ``(i) The sum of (I) the number of public housing dwelling 
     units administered by the agency, and (II) the number of 
     vouchers under section 8(o) of the United States Housing Act 
     of 1937 (42 U.S.C. 1437f(o)) administered by the agency, is 
     550 or fewer.
       ``(ii) The agency is not designated under section 6(j)(2) 
     as a troubled public housing agency, and does not have a 
     failing score under the section 8 Management Assessment 
     Program during the prior 12 months.''.
       (b) Resident Participation.--Section 5A of the United 
     States Housing Act of 1937 (42 U.S.C. 1437c-1) is amended--
       (1) in subsection (e), by inserting after paragraph (3) the 
     following:
       ``(4) Qualified public housing agencies.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     nothing in this section may be construed to exempt a 
     qualified public housing agency from the requirement under 
     paragraph (1) to establish 1 or more resident advisory 
     boards. Notwithstanding that qualified public housing 
     agencies are exempt under subsection (b)(3)(A) from the 
     requirement under this section to prepare and submit an 
     annual public housing plan, each qualified public housing 
     agency shall consult with, and consider the recommendations 
     of the resident advisory boards for the agency, at the annual 
     public hearing required under subsection (f)(5), regarding 
     any changes to the goals, objectives, and policies of that 
     agency.
       ``(B) Applicability of waiver authority.--Paragraph (3) 
     shall apply to qualified public housing agencies, except that 
     for purposes of such qualified public housing agencies, 
     subparagraph (B) of such paragraph shall be applied by 
     substituting `the functions described in the second sentence 
     of paragraph (4)(A)' for `the functions described in 
     paragraph (2)'.

[[Page 15946]]

       ``(f) Public Hearings.--''; and
       (2) in subsection (f) (as so designated by the amendment 
     made by paragraph (1)), by adding at the end the following:
       ``(5) Qualified public housing agencies.--
       ``(A) Requirement.--Notwithstanding that qualified public 
     housing agencies are exempt under subsection (b)(3)(A) from 
     the requirement under this section to conduct a public 
     hearing regarding the annual public housing plan of the 
     agency, each qualified public housing agency shall annually 
     conduct a public hearing--
       ``(i) to discuss any changes to the goals, objectives, and 
     policies of the agency; and
       ``(ii) to invite public comment regarding such changes.
       ``(B) Availability of information and notice.--Not later 
     than 45 days before the date of any hearing described in 
     subparagraph (A), a qualified public housing agency shall--
       ``(i) make all information relevant to the hearing and any 
     determinations of the agency regarding changes to the goals, 
     objectives, and policies of the agency to be considered at 
     the hearing available for inspection by the public at the 
     principal office of the public housing agency during normal 
     business hours; and
       ``(ii) publish a notice informing the public that--

       ``(I) the information is available as required under clause 
     (i); and
       ``(II) a public hearing under subparagraph (A) will be 
     conducted.''.

            TITLE VIII--FORECLOSURE RESCUE FRAUD PROTECTION

     SEC. 2801. SHORT TITLE.

       This title may be cited as the ``Foreclosure Rescue Fraud 
     Act of 2008''.

     SEC. 2802. DEFINITIONS.

       In this title:
       (1) Commission.--The term ``Commission'' means the Federal 
     Trade Commission.
       (2) Foreclosure consultant.--The term ``foreclosure 
     consultant''--
       (A) means a person who makes any solicitation, 
     representation, or offer to a homeowner facing foreclosure on 
     residential real property to perform, for gain, or who 
     performs, for gain, any service that such person represents 
     will prevent, postpone, or reverse the effect of such 
     foreclosure; and
       (B) does not include--
       (i) an attorney licensed to practice law in the State in 
     which the property is located who has established an 
     attorney-client relationship with the homeowner;
       (ii) a person licensed as a real estate broker or 
     salesperson in the State where the property is located, and 
     such person engages in acts permitted under the licensure 
     laws of such State;
       (iii) a housing counseling agency approved by the 
     Secretary;
       (iv) a depository institution (as defined in section 3 of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813));
       (v) a Federal credit union or a State credit union (as 
     defined in section 101 of the Federal Credit Union Act (12 
     U.S.C. 1752)); or
       (vi) an insurance company organized under the laws of any 
     State.
       (3) Homeowner.--The term ``homeowner'', with respect to 
     residential real property for which an action to foreclose on 
     the mortgage or deed of trust on such real property is filed, 
     means the person holding record title to such property as of 
     the date on which such action is filed.
       (4) Loan servicer.--The term ``loan servicer'' has the same 
     meaning as the term ``servicer'' in section 6(i)(2) of the 
     Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 
     2605(i)(2)).
       (5) Residential mortgage loan.--The term ``residential 
     mortgage loan'' means any loan primarily for personal, 
     family, or household use that is secured by a mortgage, deed 
     of trust, or other equivalent consensual security interest on 
     a dwelling (as defined in section 103(v) of the Truth in 
     Lending Act (15 U.S.C. 1602)(v)) or residential real estate 
     upon which is constructed or intended to be constructed a 
     dwelling (as so defined).
       (6) Residential real property.--The term ``residential real 
     property'' has the meaning given the term ``dwelling'' in 
     section 103 of the Consumer Credit Protection Act (15 U.S.C. 
     1602).
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.

     SEC. 2803. MORTGAGE RESCUE FRAUD PROTECTION.

       (a) Limits on Foreclosure Consultants.--A foreclosure 
     consultant may not--
       (1) claim, demand, charge, collect, or receive any 
     compensation from a homeowner for services performed by such 
     foreclosure consultant with respect to residential real 
     property until such foreclosure consultant has fully 
     performed each service that such foreclosure consultant 
     contracted to perform or represented would be performed with 
     respect to such residential real property;
       (2) hold any power of attorney from any homeowner, except 
     to inspect documents, as provided by applicable law;
       (3) receive any consideration from a third party in 
     connection with services rendered to a homeowner by such 
     third party with respect to the foreclosure of residential 
     real property, unless such consideration is fully disclosed, 
     in a clear and conspicuous manner, to such homeowner in 
     writing before such services are rendered;
       (4) accept any wage assignment, any lien of any type on 
     real or personal property, or other security to secure the 
     payment of compensation with respect to services provided by 
     such foreclosure consultant in connection with the 
     foreclosure of residential real property; or
       (5) acquire any interest, directly or indirectly, in the 
     residence of a homeowner with whom the foreclosure consultant 
     has contracted.
       (b) Contract Requirements.--
       (1) Written contract required.--Notwithstanding any other 
     provision of law, a foreclosure consultant may not provide to 
     a homeowner a service related to the foreclosure of 
     residential real property--
       (A) unless--
       (i) a written contract for the purchase of such service has 
     been signed and dated by the homeowner; and
       (ii) such contract complies with the requirements described 
     in paragraph (2); and
       (B) before the end of the 3-business-day period beginning 
     on the date on which the contract is signed.
       (2) Terms and conditions of contract.--The requirements 
     described in this paragraph, with respect to a contract, are 
     as follows:
       (A) The contract includes, in writing--
       (i) a full and detailed description of the exact nature of 
     the contract and the total amount and terms of compensation;
       (ii) the name, physical address, phone number, email 
     address, and facsimile number, if any, of the foreclosure 
     consultant to whom a notice of cancellation can be mailed or 
     sent under subsection (d); and
       (iii) a conspicuous statement in at least 12 point bold 
     face type in immediate proximity to the space reserved for 
     the homeowner's signature on the contract that reads as 
     follows: ``You may cancel this contract without penalty or 
     obligation at any time before midnight of the 3rd business 
     day after the date on which you sign the contract. See the 
     attached notice of cancellation form for an explanation of 
     this right.''.
       (B) The contract is written in the principal language used 
     to solicit or market the services to the homeowner.
       (C) The contract is accompanied by the form required by 
     subsection (c)(2).
       (c) Right To Cancel Contract.--
       (1) In general.--With respect to a contract between a 
     homeowner and a foreclosure consultant regarding the 
     foreclosure on the residential real property of such 
     homeowner, such homeowner may cancel such contract without 
     penalty or obligation by mailing a notice of cancellation not 
     later than midnight of the 3rd business day after the date on 
     which such contract is executed or would become enforceable 
     against the parties to such contract.
       (2) Cancellation form and other information.--Each contract 
     described in paragraph (1) shall be accompanied by a form, in 
     duplicate, that--
       (A) has the heading ``Notice of Cancellation'' in boldface 
     type; and
       (B) contains in boldface type the following statement:
       ``You may cancel this contract, without any penalty or 
     obligation, at any time before midnight of the 3rd day after 
     the date on which the contract is signed by you.
       ``To cancel this contract, mail or deliver a signed and 
     dated copy of this cancellation notice or any other 
     equivalent written notice to [insert name of foreclosure 
     consultant] at [insert address of foreclosure consultant] 
     before midnight on [insert date].
       ``I hereby cancel this transaction on [insert date] [insert 
     homeowner signature].''.
       (d) Waiver of Rights and Protections Prohibited.--
       (1) In general.--A waiver by a homeowner of any protection 
     provided by this section or any right of a homeowner under 
     this section--
       (A) shall be treated as void; and
       (B) may not be enforced by any Federal or State court or by 
     any person.
       (2) Attempt to obtain a waiver.--Any attempt by any person 
     to obtain a waiver from any homeowner of any protection 
     provided by this section or any right of the homeowner under 
     this section shall be treated as a violation of this section.
       (3) Contracts not in compliance.--Any contract that does 
     not comply with the applicable provisions of this title shall 
     be void and may not be enforceable by any party.

     SEC. 2804. WARNINGS TO HOMEOWNERS OF FORECLOSURE RESCUE 
                   SCAMS.

       (a) In General.--If a loan servicer finds that a homeowner 
     has failed to make 2 consecutive payments on a residential 
     mortgage loan and such loan is at risk of being foreclosed 
     upon, the loan servicer shall notify such homeowner of the 
     dangers of fraudulent activities associated with foreclosure.
       (b) Notice Requirements.--Each notice provided under 
     subsection (a) shall--
       (1) be in writing;
       (2) be included with a mailing of account information;
       (3) have the heading ``Notice Required by Federal Law'' in 
     a 14-point boldface type in English and Spanish at the top of 
     such notice; and
       (4) contain the following statement in English and Spanish: 
     ``Mortgage foreclosure is a complex process. Some people may 
     approach you about saving your home. You should be careful 
     about any such promises. There are government and nonprofit 
     agencies you may contact for helpful information about the 
     foreclosure process. Contact your lender immediately at 
     [____], call the Department of Housing and Urban Development 
     Housing Counseling Line at (800) 569-4287 to find a housing 
     counseling agency certified by the Department to assist you 
     in avoiding foreclosure, or visit the Department's Tips for 
     Avoiding Foreclosure website at http://www.hud.gov/
 foreclosure for additional

[[Page 15947]]

     assistance.'' (the blank space to be filled in by the loan 
     servicer and successor telephone numbers and Uniform Resource 
     Locators (URLs) for the Department of Housing and Urban 
     Development Housing Counseling Line and Tips for Avoiding 
     Foreclosure website, respectively).

     SEC. 2805. CIVIL LIABILITY.

       (a) In General.--Any foreclosure consultant who fails to 
     comply with any provision of section 2803 or 2804 with 
     respect to any other person shall be liable to such person in 
     an amount equal to the greater of--
       (1) the amount of any actual damage sustained by such 
     person as a result of such failure; or
       (2) any amount paid by the person to the foreclosure 
     consultant.
       (b) Class Actions Prohibited.--No Federal court may certify 
     a civil action under subsection (a) as a class action under 
     rule 23 of the Federal Rules of Civil Procedure.

     SEC. 2806. ADMINISTRATIVE ENFORCEMENT.

       (a) Enforcement by Federal Trade Commission.--
       (1) Unfair or deceptive act or practice.--A violation of a 
     prohibition described in section 2803 or a failure to comply 
     with any provision of section 2803 or 2804 shall be treated 
     as a violation of a rule defining an unfair or deceptive act 
     or practice described under section 18(a)(1)(B) of the 
     Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
       (2) Actions by the federal trade commission.--The Federal 
     Trade Commission shall enforce the provisions of sections 
     2803 and 2804 in the same manner, by the same means, and with 
     the same jurisdiction, powers, and duties as though all 
     applicable terms and provisions of the Federal Trade 
     Commission Act (15 U.S.C. 41 et seq.) were incorporated into 
     and made part of this title.
       (b) State Action for Violations.--
       (1) Authority of states.--In addition to such other 
     remedies as are provided under State law, whenever the chief 
     law enforcement officer of a State, or an official or agency 
     designated by a State, has reason to believe that any person 
     has violated or is violating the provisions of section 2803 
     or 2804, the State--
       (A) may bring an action to enjoin such violation;
       (B) may bring an action on behalf of its residents to 
     recover damages for which the person is liable to such 
     residents under section 2805 as a result of the violation; 
     and
       (C) in the case of any successful action under subparagraph 
     (A) or (B), shall be awarded the costs of the action.
       (2) Rights of federal trade commission.--
       (A) Notice to commission.--The State shall serve prior 
     written notice of any civil action under paragraph (1) upon 
     the Commission and provide the Commission with a copy of its 
     complaint, except in any case in which such prior notice is 
     not feasible, in which case the State shall serve such notice 
     immediately upon instituting such action.
       (B) Intervention.--The Commission shall have the right--
       (i) to intervene in any action referred to in subparagraph 
     (A);
       (ii) upon so intervening, to be heard on all matters 
     arising in the action; and
       (iii) to file petitions for appeal in such actions.
       (3) Investigatory powers.--For purposes of bringing any 
     action under this subsection, nothing in this subsection 
     shall prevent the chief law enforcement officer, or an 
     official or agency designated by a State, from exercising the 
     powers conferred on the chief law enforcement officer or such 
     official by the laws of such State to conduct investigations 
     or to administer oaths or affirmations, or to compel the 
     attendance of witnesses or the production of documentary and 
     other evidence.
       (4) Limitation.--Whenever the Federal Trade Commission has 
     instituted a civil action for a violation of section 2803 or 
     2804, no State may, during the pendency of such action, bring 
     an action under this section against any defendant named in 
     the complaint of the Commission for any violation of section 
     2803 or 2804 that is alleged in that complaint.

     SEC. 2807. LIMITATION.

       No violation of a prohibition described in section 2803 or 
     a failure to comply with any provision of section 2803 or 
     2804 shall provide grounds for the halt, delay, or 
     modification of a foreclosure process or proceeding.

     SEC. 2808. PREEMPTION.

       Nothing in this title affects any provision of State or 
     local law respecting any foreclosure consultant, residential 
     mortgage loan, or residential real property that provides 
     equal or greater protection to homeowners than what is 
     provided under this title.

                   DIVISION C--TAX-RELATED PROVISIONS

     SECTION 3000. SHORT TITLE; ETC.

       (a) Short Title.--This division may be cited as the 
     ``Housing Assistance Tax Act of 2008''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this division an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.

                    TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                 PART I--LOW-INCOME HOUSING TAX CREDIT

     SEC. 3001. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME 
                   HOUSING TAX CREDIT.

       Paragraph (3) of section 42(h) is amended by adding at the 
     end the following new subparagraph:
       ``(I) Increase in state housing credit ceiling for 2008 and 
     2009.--In the case of calendar years 2008 and 2009--
       ``(i) the dollar amount in effect under subparagraph 
     (C)(ii)(I) for such calendar year (after any increase under 
     subparagraph (H)) shall be increased by $0.20, and
       ``(ii) the dollar amount in effect under subparagraph 
     (C)(ii)(II) for such calendar year (after any increase under 
     subparagraph (H)) shall be increased by an amount equal to 10 
     percent of such dollar amount (rounded to the next lowest 
     multiple of $5,000).''.

     SEC. 3002. DETERMINATION OF CREDIT RATE.

       (a) Temporary Minimum Credit Rate for Non-Federally 
     Subsidized New Buildings.--Subsection (b) of section 42 is 
     amended by redesignating paragraph (3) as paragraph (4) and 
     by inserting after paragraph (2) the following new paragraph:
       ``(3) Temporary minimum credit rate for non-federally 
     subsidized new buildings.--In the case of any new building--
       ``(A) which is placed in service by the taxpayer after the 
     date of the enactment of this paragraph and before December 
     31, 2013, and
       ``(B) which is not federally subsidized for the taxable 
     year,
     the applicable percentage shall not be less than 9 
     percent.''.
       (b) Modifications to Definition of Federally Subsidized 
     Building.--
       (1) In general.--Subparagraph (A) of section 42(i)(2) is 
     amended by striking ``, or any below market Federal loan,''.
       (2) Conforming amendments.--
       (A) Subparagraph (B) of section 42(i)(2) is amended--
       (i) by striking ``balance of loan or'' in the heading 
     thereof,
       (ii) by striking ``loan or'' in the matter preceding clause 
     (i), and
       (iii) by striking ``subsection (d)--'' and all that follows 
     and inserting ``subsection (d) the proceeds of such 
     obligation.''.
       (B) Subparagraph (C) of section 42(i)(2) is amended--
       (i) by striking ``or below market Federal loan'' in the 
     matter preceding clause (i),
       (ii) in clause (i)--

       (I) by striking ``or loan (when issued or made)'' and 
     inserting ``(when issued)'', and
       (II) by striking ``the proceeds of such obligation or 
     loan'' and inserting ``the proceeds of such obligation'', and

       (iii) by striking ``, and such loan is repaid,'' in clause 
     (ii).
       (C) Paragraph (2) of section 42(i) is amended by striking 
     subparagraphs (D) and (E).
       (c) Effective Date.--The amendments made by this subsection 
     shall apply to buildings placed in service after the date of 
     the enactment of this Act.

     SEC. 3003. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.

       (a) Increase in Credit for Certain State Designated 
     Buildings.--Subparagraph (C) of section 42(d)(5) (relating to 
     increase in credit for buildings in high cost areas), before 
     redesignation under subsection (g), is amended by adding at 
     the end the following new clause:
       ``(v) Buildings designated by state housing credit 
     agency.--Any building which is designated by the State 
     housing credit agency as requiring the increase in credit 
     under this subparagraph in order for such building to be 
     financially feasible as part of a qualified low-income 
     housing project shall be treated for purposes of this 
     subparagraph as located in a difficult development area which 
     is designated for purposes of this subparagraph. The 
     preceding sentence shall not apply to any building if 
     paragraph (1) of subsection (h) does not apply to any portion 
     of the eligible basis of such building by reason of paragraph 
     (4) of such subsection.''.
       (b) Modification to Rehabilitation Requirements.--
       (1) In general.--Clause (ii) of section 42(e)(3)(A) is 
     amended--
       (A) by striking ``10 percent'' in subclause (I) and 
     inserting ``20 percent'', and
       (B) by striking ``$3,000'' in subclause (II) and inserting 
     ``$6,000''.
       (2) Inflation adjustment.--Paragraph (3) of section 42(e) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(D) Inflation adjustment.--In the case of any 
     expenditures which are treated under paragraph (4) as placed 
     in service during any calendar year after 2009, the $6,000 
     amount in subparagraph (A)(ii)(II) shall be increased by an 
     amount equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year by substituting 
     `calendar year 2008' for `calendar year 1992' in subparagraph 
     (B) thereof.
     Any increase under the preceding sentence which is not a 
     multiple of $100 shall be rounded to the nearest multiple of 
     $100.''.
       (3) Conforming amendment.--Subclause (II) of section 
     42(f)(5)(B)(ii) is amended by striking ``if subsection 
     (e)(3)(A)(ii)(II)'' and all that follows and inserting ``if 
     the dollar amount in effect under subsection 
     (e)(3)(A)(ii)(II) were two-thirds of such amount.''.
       (c) Increase in Allowable Community Service Facility Space 
     for Small Projects.--Clause (ii) of section 42(d)(4)(C) 
     (relating to limitation) is amended by striking ``10 percent 
     of the eligible basis of the qualified low-income housing 
     project of which it is a part. For purposes of'' and 
     inserting ``the sum of--

[[Page 15948]]

       ``(I) 25 percent of so much of the eligible basis of the 
     qualified low-income housing project of which it is a part as 
     does not exceed $15,000,000, plus
       ``(II) 10 percent of so much of the eligible basis of such 
     project as is not taken into account under subclause (I).

     For purposes of''.
       (d) Clarification of Treatment of Federal Grants.--
     Subparagraph (A) of section 42(d)(5) is amended to read as 
     follows:
       ``(A) Federal grants not taken into account in determining 
     eligible basis.--The eligible basis of a building shall not 
     include any costs financed with the proceeds of a Federally 
     funded grant.''.
       (e) Simplification of Related Party Rules.--Clause (iii) of 
     section 42(d)(2)(D), before redesignation under subsection 
     (g)(2), is amended--
       (1) by striking all that precedes subclause (II),
       (2) by redesignating subclause (II) as clause (iii) and 
     moving such clause two ems to the left, and
       (3) by striking the last sentence thereof.
       (f) Exception to 10-Year Nonacquisition Period for Existing 
     Buildings Applicable to Federally- or State-Assisted 
     Buildings.--Paragraph (6) of section 42(d) is amended to read 
     as follows:
       ``(6) Credit allowable for certain buildings acquired 
     during 10-year period described in paragraph (2)(B)(ii).--
       ``(A) In general.--Paragraph (2)(B)(ii) shall not apply to 
     any Federally- or State-assisted building.
       ``(B) Buildings acquired from insured depository 
     institutions in default.--On application by the taxpayer, the 
     Secretary may waive paragraph (2)(B)(ii) with respect to any 
     building acquired from an insured depository institution in 
     default (as defined in section 3 of the Federal Deposit 
     Insurance Act) or from a receiver or conservator of such an 
     institution.
       ``(C) Federally- or state-assisted building.--For purposes 
     of this paragraph--
       ``(i) Federally-assisted building.--The term `Federally-
     assisted building' means any building which is substantially 
     assisted, financed, or operated under section 8 of the United 
     States Housing Act of 1937, section 221(d)(3), 221(d)(4), or 
     236 of the National Housing Act, or section 515 of the 
     Housing Act of 1949 (as such Acts are in effect on the date 
     of the enactment of the Tax Reform Act of 1986).
       ``(ii) State-assisted building.--The term `State-assisted 
     building' means any building which is substantially assisted, 
     financed, or operated under any State law similar in purposes 
     to any of the laws referred to in clause (i).''.
       (g) Repeal of Deadwood.--
       (1) Clause (ii) of section 42(d)(2)(B) is amended by 
     striking ``the later of--'' and all that follows and 
     inserting ``the date the building was last placed in 
     service,''.
       (2) Subparagraph (D) of section 42(d)(2) is amended by 
     striking clause (i) and by redesignating clauses (ii) and 
     (iii) as clauses (i) and (ii), respectively.
       (3) Paragraph (5) of section 42(d) is amended by striking 
     subparagraph (B) and by redesignating subparagraph (C) as 
     subparagraph (B).
       (h) Effective Date.--
       (1) In general.--Except as otherwise provided in paragraph 
     (2), the amendments made by this subsection shall apply to 
     buildings placed in service after the date of the enactment 
     of this Act.
       (2) Rehabilitation requirements.--
       (A) In general.--The amendments made by subsection (b) 
     shall apply with respect to housing credit dollar amounts 
     allocated after the date of the enactment of this Act.
       (B) Buildings not subject to allocation limits.--To the 
     extent paragraph (1) of section 42(h) of the Internal Revenue 
     Code of 1986 does not apply to any building by reason of 
     paragraph (4) thereof, the amendments made by subsection (b) 
     shall apply to buildings placed in service after the date of 
     the enactment of this Act.

     SEC. 3004. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME 
                   HOUSING TAX INCENTIVES.

       (a) Repeal Prohibition on Moderate Rehabilitation 
     Assistance.--Paragraph (2) of section 42(c) (defining 
     qualified low-income building) is amended by striking the 
     flush sentence at the end.
       (b) Modification of Time Limit for Incurring 10 Percent of 
     Project's Cost.--Clause (ii) of section 42(h)(1)(E) is 
     amended by striking ``(as of the later of the date which is 6 
     months after the date that the allocation was made or the 
     close of the calendar year in which the allocation is made)'' 
     and inserting ``(as of the date which is 1 year after the 
     date that the allocation was made)''.
       (c) Repeal of Bonding Requirement on Disposition of 
     Building.--Paragraph (6) of section 42(j) (relating to no 
     recapture on disposition of building (or interest therein) 
     where bond posted) is amended to read as follows:
       ``(6) No recapture on disposition of building which 
     continues in qualified use.--
       ``(A) In general.--The increase in tax under this 
     subsection shall not apply solely by reason of the 
     disposition of a building (or an interest therein) if it is 
     reasonably expected that such building will continue to be 
     operated as a qualified low-income building for the remaining 
     compliance period with respect to such building.
       ``(B) Statute of limitations.--If a building (or an 
     interest therein) is disposed of during any taxable year and 
     there is any reduction in the qualified basis of such 
     building which results in an increase in tax under this 
     subsection for such taxable or any subsequent taxable year, 
     then--
       ``(i) the statutory period for the assessment of any 
     deficiency with respect to such increase in tax shall not 
     expire before the expiration of 3 years from the date the 
     Secretary is notified by the taxpayer (in such manner as the 
     Secretary may prescribe) of such reduction in qualified 
     basis, and
       ``(ii) such deficiency may be assessed before the 
     expiration of such 3-year period notwithstanding the 
     provisions of any other law or rule of law which would 
     otherwise prevent such assessment.''.
       (d) Energy Efficiency and Historic Nature Taken Into 
     Account in Making Allocations.--Subparagraph (C) of section 
     42(m)(1) (relating to plans for allocation of credit among 
     projects) is amended by striking ``and'' at the end of clause 
     (vii), by striking the period at the end of clause (viii) and 
     inserting a comma, and by adding at the end the following new 
     clauses:
       ``(ix) the energy efficiency of the project, and
       ``(x) the historic nature of the project.''.
       (e) Continued Eligibility for Students Who Received Foster 
     Care Assistance.--Clause (i) of section 42(i)(3)(D) is 
     amended by striking ``or'' at the end of subclause (I), by 
     redesignating subclause (II) as subclause (III), and by 
     inserting after subclause (I) the following new subclause:

       ``(II) a student who was previously under the care and 
     placement responsibility of the State agency responsible for 
     administering a plan under part B or part E of title IV of 
     the Social Security Act, or''.

       (f) Treatment of Rural Projects.--Section 42(i) (relating 
     to definitions and special rules) is amended by adding at the 
     end the following new paragraph:
       ``(8) Treatment of rural projects.--For purposes of this 
     section, in the case of any project for residential rental 
     property located in a rural area (as defined in section 520 
     of the Housing Act of 1949), any income limitation measured 
     by reference to area median gross income shall be measured by 
     reference to the greater of area median gross income or 
     national non-metropolitan median income. The preceding 
     sentence shall not apply with respect to any building if 
     paragraph (1) of section 42(h) does not apply by reason of 
     paragraph (4) thereof to any portion of the credit determined 
     under this section with respect to such building.''.
       (g) Clarification of General Public Use Requirement.--
     Subsection (c) of section 42 is amended by adding at the end 
     the following new paragraph:
       ``(3) Clarification of general public use requirement.--
       ``(A) In general.--A building which meets the requirements 
     of subparagraph (B) shall not fail to be treated as a 
     qualified low-income building solely because occupancy in 
     such building is restricted to individuals who have special 
     needs, share a common occupation or common interests, or are 
     members of a specified group based on Federal, State, or 
     local programs or requirements.
       ``(B) Basic public use requirements.--A building meets the 
     requirements of this subparagraph if--
       ``(i) such building is used consistent with housing policy 
     governing non-discrimination as evidenced by rules and 
     regulations of the Department of Housing and Urban 
     Development,
       ``(ii) occupancy in such building is not restricted on the 
     basis of membership in a social organization or on the basis 
     of employment by specific employers, and
       ``(iii) such building is not part of a hospital, nursing 
     home, sanitarium, lifecare facility, trailer park, or 
     intermediate care facility for the mentally or physically 
     handicapped.''.
       (h) GAO Study Regarding Modifications to Low-Income Housing 
     Tax Credit.--Not later than December 31, 2012, the 
     Comptroller General of the United States shall submit to 
     Congress a report which analyzes the implementation of the 
     modifications made by this subtitle to the low-income housing 
     tax credit under section 42 of the Internal Revenue Code of 
     1986. Such report shall include an analysis of the 
     distribution of credit allocations before and after the 
     effective date of such modifications.
       (i) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to buildings placed in service after the date of the 
     enactment of this Act.
       (2) Repeal of bonding requirement on disposition of 
     building.--The amendment made by subsection (c) shall apply 
     to--
       (A) interests in buildings disposed after the date of the 
     enactment of this Act, and
       (B) interests in buildings disposed of on or before such 
     date if--
       (i) it is reasonably expected that such building will 
     continue to be operated as a qualified low-income building 
     (within the meaning of section 42 of the Internal Revenue 
     Code of 1986) for the remaining compliance period (within the 
     meaning of such section) with respect to such building, and
       (ii) the taxpayer elects the application of this 
     subparagraph with respect to such disposition.
       (3) Energy efficiency and historic nature taken into 
     account in making allocations.--The amendments made by 
     subsection (d) shall apply to allocations made after December 
     31, 2008.
       (4) Continued eligibility for students who received foster 
     care assistance.--The amendments made by subsection (e) shall 
     apply to determinations made after the date of the enactment 
     of this Act.
       (5) Treatment of rural projects.--The amendment made by 
     subsection (f) shall apply

[[Page 15949]]

     to determinations made after the date of the enactment of 
     this Act.
       (6) Clarification of general public use requirement.--The 
     amendment made by subsection (g) shall apply to buildings 
     placed in service before, on, or after the date of the 
     enactment of this Act.

     SEC. 3005. TREATMENT OF MILITARY BASIC PAY.

       (a) In General.--Subparagraph (B) of section 142(d)(2) 
     (relating to income of individuals; area median gross income) 
     is amended--
       (1) by striking ``The income'' and inserting the following:
       ``(i) In general.--The income'', and
       (2) by adding at the end the following:
       ``(ii) Special rule relating to basic housing allowances.--
     For purposes of determining income under this subparagraph, 
     payments under section 403 of title 37, United States Code, 
     as a basic pay allowance for housing shall be disregarded 
     with respect to any qualified building.
       ``(iii) Qualified building.--For purposes of clause (ii), 
     the term `qualified building' means any building located--

       ``(I) in any county in which is located a qualified 
     military installation to which the number of members of the 
     Armed Forces of the United States assigned to units based out 
     of such qualified military installation, as of June 1, 2008, 
     has increased by not less than 20 percent, as compared to 
     such number on December 31, 2005, or
       ``(II) in any county adjacent to a county described in 
     subclause (I).

       ``(iv) Qualified military installation.--For purposes of 
     clause (iii), the term `qualified military installation' 
     means any military installation or facility the number of 
     members of the Armed Forces of the United States assigned to 
     which, as of June 1, 2008, is not less than 1,000.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to--
       (1) determinations made after the date of the enactment of 
     this Act and before January 1, 2012, in the case of any 
     qualified building (as defined in section 142(d)(2)(B)(iii) 
     of the Internal Revenue Code of 1986)--
       (A) with respect to which housing credit dollar amounts 
     have been allocated before the date of the enactment of this 
     Act, or
       (B) with respect to buildings placed in service before such 
     date of enactment, to the extent paragraph (1) of section 
     42(h) of such Code does not apply to such building by reason 
     of paragraph (4) thereof, but only with respect to bonds 
     issued before such date of enactment, and
       (2) determinations made after the date of enactment of this 
     Act, in the case of qualified buildings (as so defined)--
       (A) with respect to which housing credit dollar amounts are 
     allocated after the date of the enactment of this Act and 
     before January 1, 2012, or
       (B) with respect to which buildings placed in service after 
     the date of enactment of this Act and before January 1, 2012, 
     to the extent paragraph (1) of section 42(h) of such Code 
     does not apply to such building by reason of paragraph (4) 
     thereof, but only with respect to bonds issued after such 
     date of enactment and before January 1, 2012.

        PART II--MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES

     SEC. 3007. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING 
                   RESIDENTIAL RENTAL PROJECTS.

       (a) In General.--Subsection (i) of section 146 (relating to 
     treatment of refunding issues) is amended by adding at the 
     end the following new paragraph:
       ``(6) Treatment of certain residential rental project bonds 
     as refunding bonds irrespective of obligor.--
       ``(A) In general.--If, during the 6-month period beginning 
     on the date of a repayment of a loan financed by an issue 95 
     percent or more of the net proceeds of which are used to 
     provide projects described in section 142(d), such repayment 
     is used to provide a new loan for any project so described, 
     any bond which is issued to refinance such issue shall be 
     treated as a refunding issue to the extent the principal 
     amount of such refunding issue does not exceed the principal 
     amount of the bonds refunded.
       ``(B) Limitations.--Subparagraph (A) shall apply to only 
     one refunding of the original issue and only if--
       ``(i) the refunding issue is issued not later than 4 years 
     after the date on which the original issue was issued,
       ``(ii) the latest maturity date of any bond of the 
     refunding issue is not later than 34 years after the date on 
     which the refunded bond was issued, and
       ``(iii) the refunding issue is approved in accordance with 
     section 147(f) before the issuance of the refunding issue.''.
       (b) Low-Income Housing Credit.--Clause (ii) of section 
     42(h)(4)(A) is amended by inserting ``or such financing is 
     refunded as described in section 146(i)(6)'' before the 
     period at the end.
       (c) Effective Date.--The amendments made by this section 
     shall apply to repayments of loans received after the date of 
     the enactment of this Act.

     SEC. 3008. COORDINATION OF CERTAIN RULES APPLICABLE TO LOW-
                   INCOME HOUSING CREDIT AND QUALIFIED RESIDENTIAL 
                   RENTAL PROJECT EXEMPT FACILITY BONDS.

       (a) Determination of Next Available Unit.--Paragraph (3) of 
     section 142(d) (relating to current income determinations) is 
     amended by adding at the end the following new subparagraph:
       ``(C) Exception for projects with respect to which 
     affordable housing credit is allowed.--In the case of a 
     project with respect to which credit is allowed under section 
     42, the second sentence of subparagraph (B) shall be applied 
     by substituting `building (within the meaning of section 42)' 
     for `project'.''.
       (b) Students.--Paragraph (2) of section 142(d) (relating to 
     definitions and special rules) is amended by adding at the 
     end the following new subparagraph:
       ``(C) Students.--Rules similar to the rules of 42(i)(3)(D) 
     shall apply for purposes of this subsection.''.
       (c) Single-Room Occupancy Units.--Paragraph (2) of section 
     142(d) (relating to definitions and special rules), as 
     amended by subsection (b), is amended by adding at the end 
     the following new subparagraph:
       ``(D) Single-room occupancy units.--A unit shall not fail 
     to be treated as a residential unit merely because such unit 
     is a single-room occupancy unit (within the meaning of 
     section 42).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to determinations of the status of qualified 
     residential rental projects for periods beginning after the 
     date of the enactment of this Act, with respect to bonds 
     issued before, on, or after such date.

  PART III--REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND TAX-
                          EXEMPT HOUSING BONDS

     SEC. 3009. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS 
                   INCOME.

       (a) In General.--Paragraph (2) of section 142(d), as 
     amended by section 3008, is amended by adding at the end the 
     following new subparagraph:
       ``(E) Hold harmless for reductions in area median gross 
     income.--
       ``(i) In general.--Any determination of area median gross 
     income under subparagraph (B) with respect to any project for 
     any calendar year after 2008 shall not be less than the area 
     median gross income determined under such subparagraph with 
     respect to such project for the calendar year preceding the 
     calendar year for which such determination is made.
       ``(ii) Special rule for certain census changes.--In the 
     case of a HUD hold harmless impacted project, the area median 
     gross income with respect to such project for any calendar 
     year after 2008 (hereafter in this clause referred to as the 
     current calendar year) shall be the greater of the amount 
     determined without regard to this clause or the sum of--

       ``(I) the area median gross income determined under the HUD 
     hold harmless policy with respect to such project for 
     calendar year 2008, plus
       ``(II) any increase in the area median gross income 
     determined under subparagraph (B) (determined without regard 
     to the HUD hold harmless policy and this subparagraph) with 
     respect to such project for the current calendar year over 
     the area median gross income (as so determined) with respect 
     to such project for calendar year 2008.

       ``(iii) HUD hold harmless policy.--The term `HUD hold 
     harmless policy' means the regulations under which a policy 
     similar to the rules of clause (i) applied to prevent a 
     change in the method of determining area median gross income 
     from resulting in a reduction in the area median gross income 
     determined with respect to certain projects in calendar years 
     2007 and 2008.
       ``(iv) HUD hold harmless impacted project.--The term `HUD 
     hold harmless impacted project' means any project with 
     respect to which area median gross income was determined 
     under subparagraph (B) for calendar year 2007 or 2008 if such 
     determination would have been less but for the HUD hold 
     harmless policy.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to determinations of area median gross income for 
     calendar years after 2008.

     SEC. 3010. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINATION 
                   REQUIREMENT WHERE DETERMINATION NOT RELEVANT.

       (a) In General.--Subparagraph (A) of section 142(d)(3) is 
     amended by adding at the end the following new sentence: 
     ``The preceding sentence shall not apply with respect to any 
     project for any year if during such year no residential unit 
     in the project is occupied by a new resident whose income 
     exceeds the applicable income limit.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to years ending after the date of the enactment 
     of this Act.

                   Subtitle B--Single Family Housing

     SEC. 3011. FIRST-TIME HOMEBUYER CREDIT.

       (a) In General.--Subpart C of part IV of subchapter A of 
     chapter 1 is amended by redesignating section 36 as section 
     37 and by inserting after section 35 the following new 
     section:

     ``SEC. 36. FIRST-TIME HOMEBUYER CREDIT.

       ``(a) Allowance of Credit.--In the case of an individual 
     who is a first-time homebuyer of a principal residence in the 
     United States during a taxable year, there shall be allowed 
     as a credit against the tax imposed by this subtitle for such 
     taxable year an amount equal to 10 percent of the purchase 
     price of the residence.
       ``(b) Limitations.--
       ``(1) Dollar limitation.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the credit allowed under subsection (a) shall not 
     exceed $8,000.
       ``(B) Married individuals filing separately.--In the case 
     of a married individual filing a separate return, 
     subparagraph (A) shall be applied by substituting `$4,000' 
     for `$8,000'.

[[Page 15950]]

       ``(C) Other individuals.--If two or more individuals who 
     are not married purchase a principal residence, the amount of 
     the credit allowed under subsection (a) shall be allocated 
     among such individuals in such manner as the Secretary may 
     prescribe, except that the total amount of the credits 
     allowed to all such individuals shall not exceed $8,000.
       ``(2) Limitation based on modified adjusted gross income.--
       ``(A) In general.--The amount allowable as a credit under 
     subsection (a) (determined without regard to this paragraph) 
     for the taxable year shall be reduced (but not below zero) by 
     the amount which bears the same ratio to the amount which is 
     so allowable as--
       ``(i) the excess (if any) of--

       ``(I) the taxpayer's modified adjusted gross income for 
     such taxable year, over
       ``(II) $75,000 ($150,000 in the case of a joint return), 
     bears to

       ``(ii) $20,000.
       ``(B) Modified adjusted gross income.--For purposes of 
     subparagraph (A), the term `modified adjusted gross income' 
     means the adjusted gross income of the taxpayer for the 
     taxable year increased by any amount excluded from gross 
     income under section 911, 931, or 933.
       ``(c) Definitions.--For purposes of this section--
       ``(1) First-time homebuyer.--The term `first-time 
     homebuyer' means any individual if such individual (and if 
     married, such individual's spouse) had no present ownership 
     interest in a principal residence during the 3-year period 
     ending on the date of the purchase of the principal residence 
     to which this section applies.
       ``(2) Principal residence.--The term `principal residence' 
     has the same meaning as when used in section 121.
       ``(3) Purchase.--
       ``(A) In general.--The term `purchase' means any 
     acquisition, but only if--
       ``(i) the property is not acquired from a person related to 
     the person acquiring it, and
       ``(ii) the basis of the property in the hands of the person 
     acquiring it is not determined--

       ``(I) in whole or in part by reference to the adjusted 
     basis of such property in the hands of the person from whom 
     acquired, or
       ``(II) under section 1014(a) (relating to property acquired 
     from a decedent).

       ``(B) Construction.--A residence which is constructed by 
     the taxpayer shall be treated as purchased by the taxpayer on 
     the date the taxpayer first occupies such residence.
       ``(4) Purchase price.--The term `purchase price' means the 
     adjusted basis of the principal residence on the date such 
     residence is purchased.
       ``(5) Related persons.--A person shall be treated as 
     related to another person if the relationship between such 
     persons would result in the disallowance of losses under 
     section 267 or 707(b) (but, in applying section 267(b) and 
     (c) for purposes of this section, paragraph (4) of section 
     267(c) shall be treated as providing that the family of an 
     individual shall include only his spouse, ancestors, and 
     lineal descendants).
       ``(d) Exceptions.--No credit under subsection (a) shall be 
     allowed to any taxpayer for any taxable year with respect to 
     the purchase of a residence if--
       ``(1) a credit under section 1400C (relating to first-time 
     homebuyer in the District of Columbia) is allowable to the 
     taxpayer (or the taxpayer's spouse) for such taxable year or 
     any prior taxable year,
       ``(2) the residence is financed by the proceeds of a 
     qualified mortgage issue the interest on which is exempt from 
     tax under section 103,
       ``(3) the taxpayer is a nonresident alien, or
       ``(4) the taxpayer disposes of such residence (or such 
     residence ceases to be the principal residence of the 
     taxpayer (and, if married, the taxpayer's spouse)) before the 
     close of such taxable year.
       ``(e) Reporting.--If the Secretary requires information 
     reporting under section 6045 by a person described in 
     subsection (e)(2) thereof to verify the eligibility of 
     taxpayers for the credit allowable by this section, the 
     exception provided by section 6045(e) shall not apply.
       ``(f) Recapture of Credit.--
       ``(1) In general.--Except as otherwise provided in this 
     subsection, if a credit under subsection (a) is allowed to a 
     taxpayer, the tax imposed by this chapter shall be increased 
     by 6\2/3\ percent of the amount of such credit for each 
     taxable year in the recapture period.
       ``(2) Acceleration of recapture.--If a taxpayer disposes of 
     the principal residence with respect to which a credit was 
     allowed under subsection (a) (or such residence ceases to be 
     the principal residence of the taxpayer (and, if married, the 
     taxpayer's spouse)) before the end of the recapture period--
       ``(A) the tax imposed by this chapter for the taxable year 
     of such disposition or cessation, shall be increased by the 
     excess of the amount of the credit allowed over the amounts 
     of tax imposed by paragraph (1) for preceding taxable years, 
     and
       ``(B) paragraph (1) shall not apply with respect to such 
     credit for such taxable year or any subsequent taxable year.
       ``(3) Limitation based on gain.--In the case of the sale of 
     the principal residence to a person who is not related to the 
     taxpayer, the increase in tax determined under paragraph (2) 
     shall not exceed the amount of gain (if any) on such sale. 
     Solely for purposes of the preceding sentence, the adjusted 
     basis of such residence shall be reduced by the amount of the 
     credit allowed under subsection (a) to the extent not 
     previously recaptured under paragraph (1).
       ``(4) Exceptions.--
       ``(A) Death of taxpayer.--Paragraphs (1) and (2) shall not 
     apply to any taxable year ending after the date of the 
     taxpayer's death.
       ``(B) Involuntary conversion.--Paragraph (2) shall not 
     apply in the case of a residence which is compulsorily or 
     involuntarily converted (within the meaning of section 
     1033(a)) if the taxpayer acquires a new principal residence 
     during the 2-year period beginning on the date of the 
     disposition or cessation referred to in paragraph (2). 
     Paragraph (2) shall apply to such new principal residence 
     during the recapture period in the same manner as if such new 
     principal residence were the converted residence.
       ``(C) Transfers between spouses or incident to divorce.--In 
     the case of a transfer of a residence to which section 
     1041(a) applies--
       ``(i) paragraph (2) shall not apply to such transfer, and
       ``(ii) in the case of taxable years ending after such 
     transfer, paragraphs (1) and (2) shall apply to the 
     transferee in the same manner as if such transferee were the 
     transferor (and shall not apply to the transferor).
       ``(5) Joint returns.--In the case of a credit allowed under 
     subsection (a) with respect to a joint return, half of such 
     credit shall be treated as having been allowed to each 
     individual filing such return for purposes of this 
     subsection.
       ``(6) Recapture period.--For purposes of this subsection, 
     the term `recapture period' means the 15 taxable years 
     beginning with the second taxable year following the taxable 
     year in which the purchase of the principal residence for 
     which a credit is allowed under subsection (a) was made.
       ``(g) Application of Section.--This section shall only 
     apply to a principal residence purchased by the taxpayer on 
     or after April 9, 2008, and before April 1, 2009.''.
       (b) Conforming Amendments.--
       (1) Section 26(b)(2) is amended by striking ``and'' at the 
     end of subparagraph (U), by striking the period and inserting 
     ``, and'' and the end of subparagraph (V), and by inserting 
     after subparagraph (V) the following new subparagraph:
       ``(W) section 36(f) (relating to recapture of homebuyer 
     credit).''.
       (2) Section 6211(b)(4)(A) is amended by striking ``34,'' 
     and all that follows through ``6428'' and inserting ``34, 35, 
     36, 53(e), and 6428''.
       (3) Section 1324(b)(2) of title 31, United States Code, is 
     amended by inserting ``, 36,'' after ``section 35''.
       (4) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 is amended by redesignating the 
     item relating to section 36 as an item relating to section 37 
     and by inserting before such item the following new item:

``Sec. 36. First-time homebuyer credit.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to residences purchased on or after April 9, 
     2008, in taxable years ending on or after such date.

     SEC. 3012. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY 
                   TAXES FOR NONITEMIZERS.

       (a) In General.--Section 63(c)(1) (defining standard 
     deduction) is amended by striking ``and'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) in the case of any taxable year beginning in 2008, 
     the real property tax deduction.''.
       (b) Definition.--Section 63(c) is amended by adding at the 
     end the following new paragraph:
       ``(8) Real property tax deduction.--
       ``(A) In general.--For purposes of paragraph (1), the real 
     property tax deduction is the lesser of--
       ``(i) the amount allowable as a deduction under this 
     chapter for State and local taxes described in section 
     164(a)(1), or
       ``(ii) $500 ($1,000 in the case of a joint return).
     Any taxes taken into account under section 62(a) shall not be 
     taken into account under this paragraph.
       ``(B) Exception.--The real property tax deduction shall not 
     be allowed in the case of a taxpayer living in a jurisdiction 
     in which the rate of tax for all residential real property 
     taxes is increased, net of any tax rebates, through rate 
     increases or the repeal or reduction of otherwise applicable 
     deductions, credits, or offsets, at any time after the date 
     of the enactment of this paragraph and before December 31, 
     2008. This subparagraph shall not apply in the case of a 
     jurisdiction in which the rate of tax for all residential 
     real property taxes is increased pursuant to an equalization 
     policy in effect before the date of the enactment of this 
     paragraph or as a result of any votes of the residents of 
     such jurisdiction to increase funding for pre-school, 
     primary, secondary, or higher education.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

                     Subtitle C--General Provisions

     SEC. 3021. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING 
                   BOND RULES.

       (a) Temporary Increase in Volume Cap.--
       (1) In general.--Subsection (d) of section 146 is amended 
     by adding at the end the following new paragraph:
       ``(5) Increase and set aside for housing bonds for 2008.--
       ``(A) Increase for 2008.--In the case of calendar year 
     2008, the State ceiling for each State shall be increased by 
     an amount equal to $11,000,000,000 multiplied by a fraction--
       ``(i) the numerator of which is the State ceiling 
     applicable to the State for calendar year

[[Page 15951]]

     2008, determined without regard to this paragraph, and
       ``(ii) the denominator of which is the sum of the State 
     ceilings determined under clause (i) for all States.
       ``(B) Set aside.--
       ``(i) In general.--Any amount of the State ceiling for any 
     State which is attributable to an increase under this 
     paragraph shall be allocated solely for one or more qualified 
     housing issues.
       ``(ii) Qualified housing issue.--For purposes of this 
     paragraph, the term `qualified housing issue' means--

       ``(I) an issue described in section 142(a)(7) (relating to 
     qualified residential rental projects), or
       ``(II) a qualified mortgage issue (determined by 
     substituting `12-month period' for `42-month period' each 
     place it appears in section 143(a)(2)(D)(i)).''.

       (2) Carryforward of unused limitations.--Subsection (f) of 
     section 146 is amended by adding at the end the following new 
     paragraph:
       ``(6) Special rules for increased volume cap under 
     subsection (d)(5).--No amount which is attributable to the 
     increase under subsection (d)(5) may be used--
       ``(A) for any issue other than a qualified housing issue 
     (as defined in subsection (d)(5)), or
       ``(B) to issue any bond after calendar year 2010.''.
       (b) Temporary Rule for Use of Qualified Mortgage Bonds 
     Proceeds for Subprime Refinancing Loans.--
       (1) In general.--Section 143(k) (relating to other 
     definitions and special rules) is amended by adding at the 
     end the following new paragraph:
       ``(12) Special rules for subprime refinancings.--
       ``(A) In general.--Notwithstanding the requirements of 
     subsection (i)(1), the proceeds of a qualified mortgage issue 
     may be used to refinance a mortgage on a residence which was 
     originally financed by the mortgagor through a qualified 
     subprime loan.
       ``(B) Special rules.--In applying subparagraph (A) to any 
     refinancing--
       ``(i) subsection (a)(2)(D)(i) shall be applied by 
     substituting `12-month period' for `42-month period' each 
     place it appears,
       ``(ii) subsection (d) (relating to 3-year requirement) 
     shall not apply, and
       ``(iii) subsection (e) (relating to purchase price 
     requirement) shall be applied by using the market value of 
     the residence at the time of refinancing in lieu of the 
     acquisition cost.
       ``(C) Qualified subprime loan.--The term `qualified 
     subprime loan' means an adjustable rate single-family 
     residential mortgage loan made after December 31, 2001, and 
     before January 1, 2008, that the bond issuer determines would 
     be reasonably likely to cause financial hardship to the 
     borrower if not refinanced.
       ``(D) Termination.--This paragraph shall not apply to any 
     bonds issued after December 31, 2010.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 3022. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON 
                   TAX-EXEMPT HOUSING BONDS, LOW-INCOME HOUSING 
                   TAX CREDIT, AND REHABILITATION CREDIT.

       (a) Tax-Exempt Interest on Certain Housing Bonds Exempted 
     From Alternative Minimum Tax.--
       (1) In general.--Subparagraph (C) of section 57(a)(5) 
     (relating to specified private activity bonds) is amended by 
     redesignating clauses (iii) and (iv) as clauses (iv) and (v), 
     respectively, and by inserting after clause (ii) the 
     following new clause:
       ``(iii) Exception for certain housing bonds.--For purposes 
     of clause (i), the term `private activity bond' shall not 
     include any bond issued after the date of the enactment of 
     this clause if such bond is--

       ``(I) an exempt facility bond issued as part of an issue 95 
     percent or more of the net proceeds of which are to be used 
     to provide qualified residential rental projects (as defined 
     in section 142(d)),
       ``(II) a qualified mortgage bond (as defined in section 
     143(a)), or
       ``(III) a qualified veterans' mortgage bond (as defined in 
     section 143(b)).

     The preceding sentence shall not apply to any refunding bond 
     unless such preceding sentence applied to the refunded bond 
     (or in the case of a series of refundings, the original 
     bond).''.
       (2) No adjustment to adjusted current earnings.--
     Subparagraph (B) of section 56(g)(4) is amended by adding at 
     the end the following new clause:
       ``(iii) Tax exempt interest on certain housing bonds.--
     Clause (i) shall not apply in the case of any interest on a 
     bond to which section 57(a)(5)(C)(iii) applies.''.
       (b) Allowance of Low-Income Housing Credit Against 
     Alternative Minimum Tax.--Subparagraph (B) of section 
     38(c)(4) (relating to specified credits) is amended by 
     redesignating clauses (ii) through (iv) as clauses (iii) 
     through (v) and inserting after clause (i) the following new 
     clause:
       ``(ii) the credit determined under section 42 to the extent 
     attributable to buildings placed in service after December 
     31, 2007,''.
       (c) Allowance of Rehabilitation Credit Against Alternative 
     Minimum Tax.--Subparagraph (B) of section 38(c)(4), as 
     amended by subsection (b), is amended by striking ``and'' at 
     the end of clause (iv), by redesignating clause (v) as clause 
     (vi), and by inserting after clause (iv) the following new 
     clause:
       ``(v) the credit determined under section 47 to the extent 
     attributable to qualified rehabilitation expenditures 
     properly taken into account for periods after December 31, 
     2007, and''.
       (d) Effective Date.--
       (1) Housing bonds.--The amendments made by subsection (a) 
     shall apply to bonds issued after the date of the enactment 
     of this Act.
       (2) Low income housing credit.--The amendments made by 
     subsection (b) shall apply to credits determined under 
     section 42 of the Internal Revenue Code of 1986 to the extent 
     attributable to buildings placed in service after December 
     31, 2007.
       (3) Rehabilitation credit.--The amendments made by 
     subsection (c) shall apply to credits determined under 
     section 47 of the Internal Revenue Code of 1986 to the extent 
     attributable to qualified rehabilitation expenditures 
     properly taken into account for periods after December 31, 
     2007.

     SEC. 3023. BONDS GUARANTEED BY FEDERAL HOME LOAN BANKS 
                   ELIGIBLE FOR TREATMENT AS TAX-EXEMPT BONDS.

       (a) In General.--Subparagraph (A) of section 149(b)(3) 
     (relating to exceptions for certain insurance programs) is 
     amended by striking ``or'' at the end of clause (ii), by 
     striking the period at the end of clause (iii) and inserting 
     ``, or'' and by adding at the end the following new clause:
       ``(iv) subject to subparagraph (E), any guarantee by a 
     Federal home loan bank made in connection with the original 
     issuance of a bond during the period beginning on the date of 
     the enactment of this clause and ending on December 31, 2010 
     (or a renewal or extension of a guarantee so made).''.
       (b) Safety and Soundness Requirements.--Paragraph (3) of 
     section 149(b) is amended by adding at the end the following 
     new subparagraph:
       ``(E) Safety and soundness requirements for federal home 
     loan banks.--Clause (iv) of subparagraph (A) shall not apply 
     to any guarantee by a Federal home loan bank unless such bank 
     meets safety and soundness collateral requirements for such 
     guarantees which are at least as stringent as such 
     requirements which apply under regulations applicable to such 
     guarantees by Federal home loan banks as in effect on April 
     9, 2008.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to guarantees made after the date of the 
     enactment of this Act.

     SEC. 3024. MODIFICATION OF RULES PERTAINING TO FIRPTA 
                   NONFOREIGN AFFIDAVITS.

       (a) In General.--Subsection (b) of section 1445 (relating 
     to exemptions) is amended by adding at the end the following:
       ``(9) Alternative procedure for furnishing nonforeign 
     affidavit.--For purposes of paragraphs (2) and (7)--
       ``(A) In general.--Paragraph (2) shall be treated as 
     applying to a transaction if, in connection with a 
     disposition of a United States real property interest--
       ``(i) the affidavit specified in paragraph (2) is furnished 
     to a qualified substitute, and
       ``(ii) the qualified substitute furnishes a statement to 
     the transferee stating, under penalty of perjury, that the 
     qualified substitute has such affidavit in his possession.
       ``(B) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this paragraph.''.
       (b) Qualified Substitute.--Subsection (f) of section 1445 
     (relating to definitions) is amended by adding at the end the 
     following new paragraph:
       ``(6) Qualified substitute.--The term `qualified 
     substitute' means, with respect to a disposition of a United 
     States real property interest--
       ``(A) the person (including any attorney or title company) 
     responsible for closing the transaction, other than the 
     transferor's agent, and
       ``(B) the transferee's agent.''.
       (c) Exemption Not To Apply if Knowledge or Notice That 
     Affidavit or Statement Is False.--
       (1) In general.--Paragraph (7) of section 1445(b) (relating 
     to special rules for paragraphs (2) and (3)) is amended to 
     read as follows:
       ``(7) Special rules for paragraphs (2), (3), and (9).--
     Paragraph (2), (3), or (9) (as the case may be) shall not 
     apply to any disposition--
       ``(A) if--
       ``(i) the transferee or qualified substitute has actual 
     knowledge that the affidavit referred to in such paragraph, 
     or the statement referred to in paragraph (9)(A)(ii), is 
     false, or
       ``(ii) the transferee or qualified substitute receives a 
     notice (as described in subsection (d)) from a transferor's 
     agent, transferee's agent, or qualified substitute that such 
     affidavit or statement is false, or
       ``(B) if the Secretary by regulations requires the 
     transferee or qualified substitute to furnish a copy of such 
     affidavit or statement to the Secretary and the transferee or 
     qualified substitute fails to furnish a copy of such 
     affidavit or statement to the Secretary at such time and in 
     such manner as required by such regulations.''.
       (2) Liability.--
       (A) Notice.--Paragraph (1) of section 1445(d) (relating to 
     notice of false affidavit; foreign corporations) is amended 
     to read as follows:
       ``(1) Notice of false affidavit; foreign corporations.--
     If--
       ``(A) the transferor furnishes the transferee or qualified 
     substitute an affidavit described in paragraph (2) of 
     subsection (b) or a domestic corporation furnishes the 
     transferee an affidavit described in paragraph (3) of 
     subsection (b), and
       ``(B) in the case of--
       ``(i) any transferor's agent--

       ``(I) such agent has actual knowledge that such affidavit 
     is false, or

[[Page 15952]]

       ``(II) in the case of an affidavit described in subsection 
     (b)(2) furnished by a corporation, such corporation is a 
     foreign corporation, or

       ``(ii) any transferee's agent or qualified substitute, such 
     agent or substitute has actual knowledge that such affidavit 
     is false,

     such agent or qualified substitute shall so notify the 
     transferee at such time and in such manner as the Secretary 
     shall require by regulations.''.
       (B) Failure to furnish notice.--Paragraph (2) of section 
     1445(d) (relating to failure to furnish notice) is amended to 
     read as follows:
       ``(2) Failure to furnish notice.--
       ``(A) In general.--If any transferor's agent, transferee's 
     agent, or qualified substitute is required by paragraph (1) 
     to furnish notice, but fails to furnish such notice at such 
     time or times and in such manner as may be required by 
     regulations, such agent or substitute shall have the same 
     duty to deduct and withhold that the transferee would have 
     had if such agent or substitute had complied with paragraph 
     (1).
       ``(B) Liability limited to amount of compensation.--An 
     agent's or substitute's liability under subparagraph (A) 
     shall be limited to the amount of compensation the agent or 
     substitute derives from the transaction.''.
       (C) Conforming amendment.--The heading for section 1445(d) 
     is amended by striking ``or Transferee's Agents'' and 
     inserting ``, Transferee's Agents, or Qualified 
     Substitutes''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to dispositions of United States real property 
     interests after the date of the enactment of this Act.

     SEC. 3025. MODIFICATION OF DEFINITION OF TAX-EXEMPT USE 
                   PROPERTY FOR PURPOSES OF THE REHABILITATION 
                   CREDIT.

       (a) In General.--Subclause (I) of section 47(c)(2)(B)(v) is 
     amended by striking ``section 168(h)'' and inserting 
     ``section 168(h), except that `50 percent' shall be 
     substituted for `35 percent' in paragraph (1)(B)(iii) 
     thereof''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to expenditures properly taken into account for 
     periods after December 31, 2007.

     SEC. 3026. EXTENSION OF SPECIAL RULE FOR MORTGAGE REVENUE 
                   BONDS FOR RESIDENCES LOCATED IN DISASTER AREAS.

       (a) In General.--Paragraph (11) of section 143(k) is 
     amended--
       (1) by striking ``December 31, 1996'' and inserting ``May 
     1, 2008'', and
       (2) by striking ``January 1, 1999'' and inserting ``January 
     1, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after May 1, 2008.

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

      Subtitle A--Foreign Currency and Other Qualified Activities

     SEC. 3031. REVISIONS TO REIT INCOME TESTS.

       (a) Foreign Currency Gains Not Gross Income in Applying 
     REIT Income Tests.--Section 856 (defining real estate 
     investment trust) is amended by adding at the end the 
     following new subsection:
       ``(n) Rules Regarding Foreign Currency Transactions.--
       ``(1) In general.--For purposes of this part--
       ``(A) passive foreign exchange gain for any taxable year 
     shall not constitute gross income for purposes of subsection 
     (c)(2), and
       ``(B) real estate foreign exchange gain for any taxable 
     year shall not constitute gross income for purposes of 
     subsection (c)(3).
       ``(2) Real estate foreign exchange gain.--For purposes of 
     this subsection, the term `real estate foreign exchange gain' 
     means--
       ``(A) foreign currency gain (as defined in section 
     988(b)(1)) which is attributable to--
       ``(i) any item of income or gain described in subsection 
     (c)(3),
       ``(ii) the acquisition or ownership of obligations secured 
     by mortgages on real property or on interests in real 
     property (other than foreign currency gain attributable to 
     any item of income or gain described in clause (i)), or
       ``(iii) becoming or being the obligor under obligations 
     secured by mortgages on real property or on interests in real 
     property (other than foreign currency gain attributable to 
     any item of income or gain described in clause (i)),
       ``(B) section 987 gain attributable to a qualified business 
     unit (as defined by section 989) of the real estate 
     investment trust, but only if such qualified business unit 
     meets the requirements under--
       ``(i) subsection (c)(3) for the taxable year, and
       ``(ii) subsection (c)(4)(A) at the close of each quarter 
     that the real estate investment trust has directly or 
     indirectly held the qualified business unit, and
       ``(C) any other foreign currency gain as determined by the 
     Secretary.
       ``(3) Passive foreign exchange gain.--For purposes of this 
     subsection, the term `passive foreign exchange gain' means--
       ``(A) real estate foreign exchange gain,
       ``(B) foreign currency gain (as defined in section 
     988(b)(1)) which is not described in subparagraph (A) and 
     which is attributable to--
       ``(i) any item of income or gain described in subsection 
     (c)(2),
       ``(ii) the acquisition or ownership of obligations (other 
     than foreign currency gain attributable to any item of income 
     or gain described in clause (i)), or
       ``(iii) becoming or being the obligor under obligations 
     (other than foreign currency gain attributable to any item of 
     income or gain described in clause (i)), and
       ``(C) any other foreign currency gain as determined by the 
     Secretary.
       ``(4) Exception for income from substantial and regular 
     trading.--Notwithstanding this subsection or any other 
     provision of this part, any section 988 gain derived by a 
     corporation, trust, or association from engaging in 
     substantial and regular trading or dealing in securities (as 
     defined in section 475(c)(2)) shall constitute gross income 
     which does not qualify under paragraph (2) or (3) of 
     subsection (c). This paragraph shall not apply to income 
     which does not constitute gross income by reason of 
     subsection (c)(5)(G).''.
       (b) Addition to REIT Hedging Rule.--Subparagraph (G) of 
     section 856(c)(5) is amended to read as follows:
       ``(G) Treatment of certain hedging instruments.--Except to 
     the extent as determined by the Secretary--
       ``(i) any income of a real estate investment trust from a 
     hedging transaction (as defined in clause (ii) or (iii) of 
     section 1221(b)(2)(A)) which is clearly identified pursuant 
     to section 1221(a)(7), including gain from the sale or 
     disposition of such a transaction, shall not constitute gross 
     income under paragraphs (2) and (3) to the extent that the 
     transaction hedges any indebtedness incurred or to be 
     incurred by the trust to acquire or carry real estate assets, 
     and
       ``(ii) any income of a real estate investment trust from a 
     transaction entered into by the trust primarily to manage 
     risk of currency fluctuations with respect to any item of 
     income or gain described in paragraph (2) or (3) (or any 
     property which generates such income or gain), including gain 
     from the termination of such a transaction, shall not 
     constitute gross income under paragraphs (2) and (3), but 
     only if such transaction is clearly identified as such before 
     the close of the day on which it was acquired, originated, or 
     entered into (or such other time as the Secretary may 
     prescribe).''.
       (c) Authority To Exclude Items of Income From REIT Income 
     Tests.--Section 856(c)(5), as amended by the Heartland, 
     Habitat, Harvest, and Horticulture Act of 2008, is amended by 
     adding at the end the following new subparagraph:
       ``(J) Secretarial authority to exclude other items of 
     income.--To the extent necessary to carry out the purposes of 
     this part, the Secretary is authorized to determine, solely 
     for purposes of this part, whether any item of income or gain 
     which--
       ``(i) does not otherwise qualify under paragraph (2) or (3) 
     may be considered as not constituting gross income, or
       ``(ii) otherwise constitutes gross income not qualifying 
     under paragraph (2) or (3) may be considered as gross income 
     which qualifies under paragraph (2) or (3).''.

     SEC. 3032. REVISIONS TO REIT ASSET TESTS.

       (a) Clarification of Valuation Test.--The first sentence in 
     the matter following section 856(c)(4)(B)(iii)(III) is 
     amended by inserting ``(including a discrepancy caused solely 
     by the change in the foreign currency exchange rate used to 
     value a foreign asset)'' after ``such requirements''.
       (b) Clarification of Permissible Asset Category.--Section 
     856(c)(5), as amended by section 3031(c), is amended by 
     adding at the end the following new subparagraph:
       ``(K) Cash.--If the real estate investment trust or its 
     qualified business unit (as defined in section 989) uses any 
     foreign currency as its functional currency (as defined in 
     section 985(b)), the term `cash' includes such foreign 
     currency but only to the extent such foreign currency--
       ``(i) is held for use in the normal course of the 
     activities of the trust or qualified business unit which give 
     rise to items of income or gain described in paragraph (2) or 
     (3) of subsection (c) or are directly related to acquiring or 
     holding assets described in subsection (c)(4), and
       ``(ii) is not held in connection with an activity described 
     in subsection (n)(4).''.

     SEC. 3033. CONFORMING FOREIGN CURRENCY REVISIONS.

       (a) Net Income From Foreclosure Property.--Clause (i) of 
     section 857(b)(4)(B) is amended to read as follows:
       ``(i) gain (including any foreign currency gain, as defined 
     in section 988(b)(1)) from the sale or other disposition of 
     foreclosure property described in section 1221(a)(1) and the 
     gross income for the taxable year derived from foreclosure 
     property (as defined in section 856(e)), but only to the 
     extent such gross income is not described in (or, in the case 
     of foreign currency gain, not attributable to gross income 
     described in) section 856(c)(3) other than subparagraph (F) 
     thereof, over''.
       (b) Net Income From Prohibited Transactions.--Clause (i) of 
     section 857(b)(6)(B) is amended to read as follows:
       ``(i) the term `net income derived from prohibited 
     transactions' means the excess of the gain (including any 
     foreign currency gain, as defined in section 988(b)(1)) from 
     prohibited transactions over the deductions (including any 
     foreign currency loss, as defined in section 988(b)(2)) 
     allowed by this chapter which are directly connected with 
     prohibited transactions;''.

                 Subtitle B--Taxable REIT Subsidiaries

     SEC. 3041. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.

       Section 856(c)(4)(B)(ii) is amended--
       (1) by striking ``20 percent'' and inserting ``25 
     percent'', and
       (2) by striking ``REIT subsidiaries'' and all that follows, 
     and inserting ``REIT subsidiaries,''.

[[Page 15953]]



                        Subtitle C--Dealer Sales

     SEC. 3051. HOLDING PERIOD UNDER SAFE HARBOR.

       Section 857(b)(6) (relating to income from prohibited 
     transactions) is amended--
       (1) by striking ``4 years'' in subparagraphs (C)(i), 
     (C)(iv), and (D)(i) and inserting ``2 years'',
       (2) by striking ``4-year period'' in subparagraphs (C)(ii), 
     (D)(ii), and (D)(iii) and inserting ``2-year period'', and
       (3) by striking ``real estate asset''and all that follows 
     through ``if'' in the matter preceding clause (i) of 
     subparagraphs (C) and (D), respectively, and inserting ``real 
     estate asset (as defined in section 856(c)(5)(B)) and which 
     is described in section 1221(a)(1) if''.

     SEC. 3052. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.

       Section 857(b)(6) is amended--
       (1) by striking the semicolon at the end of subparagraph 
     (C)(iii) and inserting ``, or (III) the fair market value of 
     property (other than sales of foreclosure property or sales 
     to which section 1033 applies) sold during the taxable year 
     does not exceed 10 percent of the fair market value of all of 
     the assets of the trust as of the beginning of the taxable 
     year;'', and
       (2) by adding ``or'' at the end of subclause (II) of 
     subparagraph (D)(iv) and by adding at the end of such 
     subparagraph the following new subclause:
       ``(III) the fair market value of property (other than sales 
     of foreclosure property or sales to which section 1033 
     applies) sold during the taxable year does not exceed 10 
     percent of the fair market value of all of the assets of the 
     trust as of the beginning of the taxable year,''.

                     Subtitle D--Health Care REITs

     SEC. 3061. CONFORMITY FOR HEALTH CARE FACILITIES.

       (a) Related Party Rentals.--Subparagraph (B) of section 
     856(d)(8) (relating to special rule for taxable REIT 
     subsidiaries) is amended to read as follows:
       ``(B) Exception for certain lodging facilities and health 
     care property.--The requirements of this subparagraph are met 
     with respect to an interest in real property which is a 
     qualified lodging facility (as defined in paragraph (9)(D)) 
     or a qualified health care property (as defined in subsection 
     (e)(6)(D)(i)) leased by the trust to a taxable REIT 
     subsidiary of the trust if the property is operated on behalf 
     of such subsidiary by a person who is an eligible independent 
     contractor. For purposes of this section, a taxable REIT 
     subsidiary is not considered to be operating or managing a 
     qualified health care property or qualified lodging facility 
     solely because it--
       ``(i) directly or indirectly possesses a license, permit, 
     or similar instrument enabling it to do so, or
       ``(ii) employs individuals working at such facility or 
     property located outside the United States, but only if an 
     eligible independent contractor is responsible for the daily 
     supervision and direction of such individuals on behalf of 
     the taxable REIT subsidiary pursuant to a management 
     agreement or similar service contract.''.
       (b) Eligible Independent Contractor.--Subparagraphs (A) and 
     (B) of section 856(d)(9) (relating to eligible independent 
     contractor) are amended to read as follows:
       ``(A) In general.--The term `eligible independent 
     contractor' means, with respect to any qualified lodging 
     facility or qualified health care property (as defined in 
     subsection (e)(6)(D)(i)), any independent contractor if, at 
     the time such contractor enters into a management agreement 
     or other similar service contract with the taxable REIT 
     subsidiary to operate such qualified lodging facility or 
     qualified health care property, such contractor (or any 
     related person) is actively engaged in the trade or business 
     of operating qualified lodging facilities or qualified health 
     care properties, respectively, for any person who is not a 
     related person with respect to the real estate investment 
     trust or the taxable REIT subsidiary.
       ``(B) Special rules.--Solely for purposes of this paragraph 
     and paragraph (8)(B), a person shall not fail to be treated 
     as an independent contractor with respect to any qualified 
     lodging facility or qualified health care property (as so 
     defined) by reason of the following:
       ``(i) The taxable REIT subsidiary bears the expenses for 
     the operation of such qualified lodging facility or qualified 
     health care property pursuant to the management agreement or 
     other similar service contract.
       ``(ii) The taxable REIT subsidiary receives the revenues 
     from the operation of such qualified lodging facility or 
     qualified health care property, net of expenses for such 
     operation and fees payable to the operator pursuant to such 
     agreement or contract.
       ``(iii) The real estate investment trust receives income 
     from such person with respect to another property that is 
     attributable to a lease of such other property to such person 
     that was in effect as of the later of--

       ``(I) January 1, 1999, or
       ``(II) the earliest date that any taxable REIT subsidiary 
     of such trust entered into a management agreement or other 
     similar service contract with such person with respect to 
     such qualified lodging facility or qualified health care 
     property.''.

       (c) Taxable Reit Subsidiaries.--The last sentence of 
     section 856(l)(3) is amended--
       (1) by inserting ``or a health care facility'' after ``a 
     lodging facility'', and
       (2) by inserting ``or health care facility'' after ``such 
     lodging facility''.

                      Subtitle E--Effective Dates

     SEC. 3071. EFFECTIVE DATES.

       (a) In General.--Except as otherwise provided in this 
     section, the amendments made by this title shall apply to 
     taxable years beginning after the date of the enactment of 
     this Act.
       (b) REIT Income Tests.--
       (1) The amendments made by section 3031(a) and (c) shall 
     apply to gains and items of income recognized after the date 
     of the enactment of this Act.
       (2) The amendment made by section 3031(b) shall apply to 
     transactions entered into after the date of the enactment of 
     this Act.
       (c) Conforming Foreign Currency Revisions.--
       (1) The amendment made by section 3033(a) shall apply to 
     gains recognized after the date of the enactment of this Act.
       (2) The amendment made by section 3033(b) shall apply to 
     gains and deductions recognized after the date of the 
     enactment of this Act.
       (d) Dealer Sales.--The amendments made by subtitle C shall 
     apply to sales made after the date of the enactment of this 
     Act.

                     TITLE III--REVENUE PROVISIONS

                     Subtitle A--General Provisions

     SEC. 3081. ELECTION TO ACCELERATE AMT AND R AND D CREDITS IN 
                   LIEU OF BONUS DEPRECIATION.

       (a) In General.--Section 168(k) is amended by adding at the 
     end the following new paragraph:
       ``(4) Election to accelerate amt and r and d credits in 
     lieu of bonus depreciation.--
       ``(A) In general.--If a corporation elects to have this 
     paragraph apply--
       ``(i) no additional depreciation shall be allowed under 
     paragraph (1) for any eligible qualified property placed in 
     service during any taxable year to which paragraph (1) would 
     otherwise apply,
       ``(ii) the applicable depreciation method used under this 
     section with respect to such eligible qualified property 
     shall be the straight line method rather than the method that 
     would otherwise be used, and
       ``(iii) the limitations described in subparagraph (B) for 
     such taxable year shall be increased by an aggregate amount 
     not in excess of the bonus depreciation amount for such 
     taxable year.
       ``(B) Limitations to be increased.--The limitations 
     described in this subparagraph are--
       ``(i) the limitation under section 38(c), and
       ``(ii) the limitation under section 53(c).
       ``(C) Bonus depreciation amount.--For purposes of this 
     paragraph--
       ``(i) In general.--The bonus depreciation amount for any 
     applicable taxable year is an amount equal to the product of 
     20 percent and the excess (if any) of--

       ``(I) the aggregate amount of depreciation which would be 
     determined under this section for property placed in service 
     during the taxable year if no election under this paragraph 
     were made, over
       ``(II) the aggregate amount of depreciation allowable under 
     this section for property placed in service during the 
     taxable year.

     In the case of property which is a passenger aircraft, the 
     amount determined under subclause (I) shall be calculated 
     without regard to the written binding contract limitation 
     under paragraph (2)(A)(iii)(I).
       ``(ii) Maximum amount.--The bonus depreciation amount for 
     any applicable taxable year shall not exceed the applicable 
     limitation under clause (iii), reduced (but not below zero) 
     by the bonus depreciation amount for any preceding taxable 
     year.
       ``(iii) Applicable limitation.--For purposes of clause 
     (ii), the term `applicable limitation' means, with respect to 
     any eligible taxpayer, the lesser of--

       ``(I) $30,000,000, or
       ``(II) 6 percent of the sum of the amounts determined with 
     respect to the taxpayer under clauses (ii) and (iii) of 
     subparagraph (E).

       ``(iv) Aggregation rule.--All corporations which are 
     treated as a single employer under section 52(a) shall be 
     treated as 1 taxpayer for purposes of applying the limitation 
     under this subparagraph and determining the applicable 
     limitation under clause (iii).
       ``(D) Eligible qualified property.--For purposes of this 
     paragraph, the term `eligible qualified property' means 
     qualified property under paragraph (2), except that in 
     applying paragraph (2) for purposes of this clause--
       ``(i) `March 31, 2008' shall be substituted for `December 
     31, 2007' each place it appears in subparagraph (A) and 
     clauses (i) and (ii) of subparagraph (E) thereof,
       ``(ii) only adjusted basis attributable to manufacture, 
     construction, or production after March 31, 2008, and before 
     January 1, 2009, shall be taken into account under 
     subparagraph (B)(ii) thereof, and
       ``(iii) in the case of property which is a passenger 
     aircraft, the written binding contract limitation under 
     subparagraph (A)(iii)(I) thereof shall not apply.
       ``(E) Allocation of bonus depreciation amounts.--
       ``(i) In general.--Subject to clauses (ii) and (iii), the 
     taxpayer shall, at such time and in such manner as the 
     Secretary may prescribe, specify the portion (if any) of the 
     bonus depreciation amount which is to be allocated to each of 
     the limitations described in subparagraph (B).
       ``(ii) Business credit limitation.--The portion of the 
     bonus depreciation amount allocated to the limitation 
     described in subparagraph (B)(i) shall not exceed an amount 
     equal to the portion of the credit allowable under section 38 
     for the taxable year which is allocable to business credit 
     carryforwards to such taxable year which are--

[[Page 15954]]

       ``(I) from taxable years beginning before January 1, 2006, 
     and
       ``(II) properly allocable (determined under the rules of 
     section 38(d)) to the research credit determined under 
     section 41(a).

       ``(iii) Alternative minimum tax credit limitation.--The 
     portion of the bonus depreciation amount allocated to the 
     limitation described in subparagraph (B)(ii) shall not exceed 
     an amount equal to the portion of the minimum tax credit 
     allowable under section 53 for the taxable year which is 
     allocable to the adjusted minimum tax imposed for taxable 
     years beginning before January 1, 2006. For purposes of the 
     preceding sentence, credits shall be treated as allowed on a 
     first-in, first-out basis.
       ``(F) Credit refundable.--Any aggregate increases in the 
     credits allowed under section 38 or 53 by reason of this 
     paragraph shall, for purposes of this title, be treated as a 
     credit allowed to the taxpayer under subpart C of part IV of 
     subchapter A.
       ``(G) Other rules.--
       ``(i) Election.--Any election under this paragraph 
     (including any allocation under subparagraph (E)) may be 
     revoked only with the consent of the Secretary.
       ``(ii) Deduction allowed in computing minimum tax.--
     Notwithstanding this paragraph, paragraph (2)(G) shall apply 
     with respect to the deduction computed under this section 
     (after application of this paragraph) with respect to 
     property placed in service during any applicable taxable 
     year.''.
       (b) Application to Certain Automotive Partnerships.--
       (1) In general.--If an applicable partnership elects the 
     application of this subsection--
       (A) the partnership shall be treated as having made a 
     payment against the tax imposed by chapter 1 of the Internal 
     Revenue Code of 1986 for any applicable taxable year of the 
     partnership in the amount determined under paragraph (3),
       (B) in the case of any eligible qualified property placed 
     in service by the partnership during any applicable taxable 
     year--
       (i) section 168(k) of such Code shall not apply in 
     determining the amount of the deduction allowable to the 
     partnership or any partner with respect to such property 
     under section 168 of such Code,
       (ii) the applicable depreciation method used by the 
     partnership or any partner under such section with respect to 
     such property shall be the straight line method rather than 
     the method that would otherwise be used,
       (C) no election may be made under section 168(k)(4) of such 
     Code with respect to the partnership, and
       (D) the amount of the credit determined under section 41 of 
     such Code for any applicable taxable year with respect to the 
     partnership shall be reduced by the amount of the deemed 
     payment under subparagraph (A) for the taxable year.
       (2) Treatment of deemed payment.--
       (A) In general.--Notwithstanding any other provision of the 
     Internal Revenue Code of 1986, the Secretary of the Treasury 
     or his delegate shall not use the payment of tax described in 
     paragraph (1) as an offset or credit against any tax 
     liability of the applicable partnership or any partner but 
     shall refund such payment to the applicable partnership.
       (B) No interest.--The payment described in paragraph (1) 
     shall not be taken into account in determining any amount of 
     interest under such Code.
       (3) Amount of deemed payment.--The amount determined under 
     this paragraph for any applicable taxable year shall be the 
     least of the following:
       (A) The amount which would be determined for the taxable 
     year under section 168(k)(4)(C)(i) of the Internal Revenue 
     Code of 1986 (as added by the amendments made by this 
     section) if an election under such section were in effect 
     with respect to the partnership.
       (B) The amount of the credit determined under section 41 of 
     such Code for the taxable year with respect to the 
     partnership.
       (C) $30,000,000, reduced by the amount of any payment under 
     this subsection for any preceding taxable year.
       (4) Definitions.--For purposes of this subsection--
       (A) Applicable partnership.--The term ``applicable 
     partnership'' means a domestic partnership that--
       (i) was formed effective on August 3, 2007, and
       (ii) will produce in excess of 675,000 automobiles during 
     the period beginning on January 1, 2008, and ending on June 
     30, 2008.
       (B) Applicable taxable year.--The term ``applicable taxable 
     year'' means any taxable year during which eligible qualified 
     property is placed in service.
       (C) Eligible qualified property.--The term ``eligible 
     qualified property'' has the meaning given such term by 
     section 168(k)(4)(D) of the Internal Revenue Code of 1986 (as 
     added by the amendments made by this section).
       (c) Conforming Amendment.--Section 1324(b)(2) of title 31, 
     United States Code, as amended by this Act, is amended--
       (1) by inserting ``168(k)(4)(F),'' after ``36,'', and
       (2) by inserting ``, or due under section 3081(b)(2) of the 
     Housing Assistance Tax Act of 2008'' before the period at the 
     end.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after March 31, 2008.

     SEC. 3082. CERTAIN GO ZONE INCENTIVES.

       (a) Use of Amended Income Tax Returns To Take Into Account 
     Receipt of Certain Hurricane-Related Casualty Loss Grants by 
     Disallowing Previously Taken Casualty Loss Deductions.--
       (1) In general.--Notwithstanding any other provision of the 
     Internal Revenue Code of 1986, if a taxpayer claims a 
     deduction for any taxable year with respect to a casualty 
     loss to a principal residence (within the meaning of section 
     121 of such Code) resulting from Hurricane Katrina, Hurricane 
     Rita, or Hurricane Wilma and in a subsequent taxable year 
     receives a grant under Public Law 109-148, 109-234, or 110-
     116 as reimbursement for such loss, such taxpayer may elect 
     to file an amended income tax return for the taxable year in 
     which such deduction was allowed (and for any taxable year to 
     which such deduction is carried) and reduce (but not below 
     zero) the amount of such deduction by the amount of such 
     reimbursement.
       (2) Time of filing amended return.--Paragraph (1) shall 
     apply with respect to any grant only if any amended income 
     tax returns with respect to such grant are filed not later 
     than the later of--
       (A) the due date for filing the tax return for the taxable 
     year in which the taxpayer receives such grant, or
       (B) the date which is 1 year after the date of the 
     enactment of this Act.
       (3) Waiver of penalties and interest.--Any underpayment of 
     tax resulting from the reduction under paragraph (1) of the 
     amount otherwise allowable as a deduction shall not be 
     subject to any penalty or interest under such Code if such 
     tax is paid not later than 1 year after the filing of the 
     amended return to which such reduction relates.
       (b) Waiver of Deadline on Construction of GO Zone Property 
     Eligible for Bonus Depreciation.--
       (1) In general.--Subparagraph (B) of section 1400N(d)(3) is 
     amended to read as follows:
       ``(B) without regard to `and before January 1, 2009' in 
     clause (i) thereof, and''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property placed in service after December 31, 
     2007.
       (c) Inclusion of Certain Counties in Gulf Opportunity Zone 
     for Purposes of Tax-Exempt Bond Financing.--
       (1) In general.--Subsection (a) of section 1400N is amended 
     by adding at the end the following new paragraph:
       ``(8) Inclusion of certain counties.--For purposes of this 
     subsection, the Gulf Opportunity Zone includes Colbert 
     County, Alabama and Dallas County, Alabama.''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the provisions of the 
     Gulf Opportunity Zone Act of 2005 to which it relates.

                      Subtitle B--Revenue Offsets

     SEC. 3091. RETURNS RELATING TO PAYMENTS MADE IN SETTLEMENT OF 
                   PAYMENT CARD AND THIRD PARTY NETWORK 
                   TRANSACTIONS.

       (a) In General.--Subpart B of part III of subchapter A of 
     chapter 61 is amended by adding at the end the following new 
     section:

     ``SEC. 6050W. RETURNS RELATING TO PAYMENTS MADE IN SETTLEMENT 
                   OF PAYMENT CARD AND THIRD PARTY NETWORK 
                   TRANSACTIONS.

       ``(a) In General.--Each payment settlement entity shall 
     make a return for each calendar year setting forth--
       ``(1) the name, address, and TIN of each participating 
     payee to whom one or more payments in settlement of 
     reportable transactions are made, and
       ``(2) the gross amount of the reportable transactions with 
     respect to each such participating payee.
     Such return shall be made at such time and in such form and 
     manner as the Secretary may require by regulations.
       ``(b) Payment Settlement Entity.--For purposes of this 
     section--
       ``(1) In general.--The term `payment settlement entity' 
     means--
       ``(A) in the case of a payment card transaction, the 
     merchant acquiring bank, and
       ``(B) in the case of a third party network transaction, the 
     third party settlement organization.
       ``(2) Merchant acquiring bank.--The term `merchant 
     acquiring bank' means the bank or other organization which 
     has the contractual obligation to make payment to 
     participating payees in settlement of payment card 
     transactions.
       ``(3) Third party settlement organization.--The term `third 
     party settlement organization' means the central organization 
     which has the contractual obligation to make payment to 
     participating payees of third party network transactions.
       ``(4) Special rules related to intermediaries.--For 
     purposes of this section--
       ``(A) Aggregated payees.--In any case where reportable 
     transactions of more than one participating payee are settled 
     through an intermediary--
       ``(i) such intermediary shall be treated as the 
     participating payee for purposes of determining the reporting 
     obligations of the payment settlement entity with respect to 
     such transactions, and
       ``(ii) such intermediary shall be treated as the payment 
     settlement entity with respect to the settlement of such 
     transactions with the participating payees.
       ``(B) Electronic payment facilitators.--In any case where 
     an electronic payment facilitator or other third party makes 
     payments in settlement of reportable transactions on behalf 
     of the payment settlement entity, the return

[[Page 15955]]

     under subsection (a) shall be made by such electronic payment 
     facilitator or other third party in lieu of the payment 
     settlement entity.
       ``(c) Reportable Transaction.--For purposes of this 
     section--
       ``(1) In general.--The term `reportable transaction' means 
     any payment card transaction and any third party network 
     transaction.
       ``(2) Payment card transaction.--The term `payment card 
     transaction' means any transaction in which a payment card is 
     accepted as payment.
       ``(3) Third party network transaction.--The term `third 
     party network transaction' means any transaction which is 
     settled through a third party payment network.
       ``(d) Other Definitions.--For purposes of this section--
       ``(1) Participating payee.--
       ``(A) In general.--The term `participating payee' means--
       ``(i) in the case of a payment card transaction, any person 
     who accepts a payment card as payment, and
       ``(ii) in the case of a third party network transaction, 
     any person who accepts payment from a third party settlement 
     organization in settlement of such transaction.
       ``(B) Exclusion of foreign persons.--To the extent provided 
     by the Secretary in regulations or other guidance, such term 
     shall not include any foreign person.
       ``(C) Inclusion of governmental units.--The term `person' 
     includes any governmental unit (and any agency or 
     instrumentality thereof).
       ``(2) Payment card.--The term `payment card' means any card 
     which is issued pursuant to an agreement or arrangement which 
     provides for--
       ``(A) one or more issuers of such cards,
       ``(B) a network of persons unrelated to each other, and to 
     the issuer, who agree to accept such cards as payment, and
       ``(C) standards and mechanisms for settling the 
     transactions between the merchant acquiring banks and the 
     persons who agree to accept such cards as payment.
     The acceptance as payment of any account number or other 
     indicia associated with a payment card shall be treated for 
     purposes of this section in the same manner as accepting such 
     payment card as payment.
       ``(3) Third party payment network.--The term `third party 
     payment network' means any agreement or arrangement--
       ``(A) which involves the establishment of accounts with a 
     central organization for the purpose of settling transactions 
     between persons who establish such accounts,
       ``(B) which provides for standards and mechanisms for 
     settling such transactions,
       ``(C) which involves a substantial number of persons 
     unrelated to such central organization who provide goods or 
     services and who have agreed to settle transactions for the 
     provision of such goods or services pursuant to such 
     agreement or arrangement, and
       ``(D) which guarantees persons providing goods or services 
     pursuant to such agreement or arrangement that such persons 
     will be paid for providing such goods or services.
     Such term shall not include any agreement or arrangement 
     which provides for the issuance of payment cards.
       ``(e) Exception for De Minimis Payments by Third Party 
     Settlement Organizations.--A third party settlement 
     organization shall not be required to report any information 
     under subsection (a) with respect to third party network 
     transactions of any participating payee if the amount which 
     would otherwise be reported under subsection (a)(2) with 
     respect to such transactions does not exceed $10,000 and the 
     aggregate number of such transactions does not exceed 200.
       ``(f) Statements To Be Furnished to Persons With Respect to 
     Whom Information Is Required.--Every person required to make 
     a return under subsection (a) shall furnish to each person 
     with respect to whom such a return is required a written 
     statement showing--
       ``(1) the name, address, and phone number of the 
     information contact of the person required to make such 
     return, and
       ``(2) the gross amount of payments made to the person 
     required to be shown on the return.
     The written statement required under the preceding sentence 
     shall be furnished to the person on or before January 31 of 
     the year following the calendar year for which the return 
     under subsection (a) was required to be made.
       ``(g) Regulations.--The Secretary may prescribe such 
     regulations or other guidance as may be necessary or 
     appropriate to carry out this section, including rules to 
     prevent the reporting of the same transaction more than 
     once.''.
       (b) Penalty for Failure To File.--
       (1) Return.--Subparagraph (B) of section 6724(d)(1) is 
     amended--
       (A) by striking ``or'' at the end of clause (xx),
       (B) by redesignating the clause (xix) that follows clause 
     (xx) as clause (xxi),
       (C) by striking ``and'' at the end of clause (xxi), as 
     redesignated by subparagraph (B) and inserting ``or'', and
       (D) by adding at the end the following:
       ``(xxii) section 6050W (relating to returns to payments 
     made in settlement of payment card transactions), and''.
       (2) Statement.--Paragraph (2) of section 6724(d) is amended 
     by striking ``or'' at the end of subparagraph (BB), by 
     striking the period at the end of the subparagraph (CC) and 
     inserting ``, or'', and by inserting after subparagraph (CC) 
     the following:
       ``(DD) section 6050W(c) (relating to returns relating to 
     payments made in settlement of payment card transactions).''.
       (c) Application of Backup Withholding.--Paragraph (3) of 
     section 3406(b) is amended by striking ``or'' at the end of 
     subparagraph (D), by striking the period at the end of 
     subparagraph (E) and inserting ``, or'', and by adding at the 
     end the following new subparagraph:
       ``(F) section 6050W (relating to returns relating to 
     payments made in settlement of payment card transactions).''.
       (d) Clerical Amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61 is amended by 
     inserting after the item relating to section 6050V the 
     following:

``Sec. 6050W. Returns relating to payments made in settlement of 
              payment card transactions.''.
       (e) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to returns for calendar years beginning after December 31, 
     2010.
       (2) Application of backup withholding.--The amendment made 
     by subsection (c) shall apply to amounts paid after December 
     31, 2011.

     SEC. 3092. GAIN FROM SALE OF PRINCIPAL RESIDENCE ALLOCATED TO 
                   NONQUALIFIED USE NOT EXCLUDED FROM INCOME.

       (a) In General.--Subsection (b) of section 121 of the 
     Internal Revenue Code of 1986 (relating to limitations) is 
     amended by adding at the end the following new paragraph:
       ``(4) Exclusion of gain allocated to nonqualified use.--
       ``(A) In general.--Subsection (a) shall not apply to so 
     much of the gain from the sale or exchange of property as is 
     allocated to periods of nonqualified use.
       ``(B) Gain allocated to periods of nonqualified use.--For 
     purposes of subparagraph (A), gain shall be allocated to 
     periods of nonqualified use based on the ratio which--
       ``(i) the aggregate periods of nonqualified use during the 
     period such property was owned by the taxpayer, bears to
       ``(ii) the period such property was owned by the taxpayer.
       ``(C) Period of nonqualified use.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `period of nonqualified use' 
     means any period (other than the portion of any period 
     preceding January 1, 2009) during which the property is not 
     used as the principal residence of the taxpayer or the 
     taxpayer's spouse or former spouse.
       ``(ii) Exceptions.--The term `period of nonqualified use' 
     does not include--

       ``(I) any portion of the 5-year period described in 
     subsection (a) which is after the last date that such 
     property is used as the principal residence of the taxpayer 
     or the taxpayer's spouse,
       ``(II) any period (not to exceed an aggregate period of 10 
     years) during which the taxpayer or the taxpayer's spouse is 
     serving on qualified official extended duty (as defined in 
     subsection (d)(9)(C)) described in clause (i), (ii), or (iii) 
     of subsection (d)(9)(A), and
       ``(III) any other period of temporary absence (not to 
     exceed an aggregate period of 2 years) due to change of 
     employment, health conditions, or such other unforeseen 
     circumstances as may be specified by the Secretary.

       ``(D) Coordination with recognition of gain attributable to 
     depreciation.--For purposes of this paragraph--
       ``(i) subparagraph (A) shall be applied after the 
     application of subsection (d)(6), and
       ``(ii) subparagraph (B) shall be applied without regard to 
     any gain to which subsection (d)(6) applies.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales and exchanges after December 31, 2008.

     SEC. 3093. INCREASE IN INFORMATION RETURN PENALTIES.

       (a) Failure To File Correct Information Returns.--
       (1) In general.--Subsections (a)(1), (b)(1)(A), and 
     (b)(2)(A) of section 6721 are each amended by striking 
     ``$50'' and inserting ``$100''.
       (2) Aggregate annual limitation.--Subsections (a)(1), 
     (d)(1)(A), and (e)(3)(A) of section 6721 are each amended by 
     striking ``$250,000'' and inserting ``$1,500,000''.
       (b) Reduction Where Correction Within 30 Days.--
       (1) In general.--Subparagraph (A) of section 6721(b)(1) is 
     amended by striking ``$15'' and inserting ``$50''.
       (2) Aggregate annual limitation.--Subsections (b)(1)(B) and 
     (d)(1)(B) of section 6721 are each amended by striking 
     ``$75,000'' and inserting ``$500,000''.
       (c) Reduction Where Correction on or Before August 1.--
       (1) In general.--Subparagraph (A) of section 6721(b)(2) is 
     amended by striking ``$30'' and inserting ``$75''.
       (2) Aggregate annual limitation.--Subsections (b)(2)(B) and 
     (d)(1)(C) of section 6721are each amended by striking 
     ``$150,000'' and inserting ``$1,000,000''.
       (d) Aggregate Annual Limitations for Persons With Gross 
     Receipts of Not More Than $5,000,000.--Paragraph (1) of 
     section 6721(d) is amended--
       (1) by striking ``$100,000'' in subparagraph (A) and 
     inserting ``$500,000'',
       (2) by striking ``$25,000'' in subparagraph (B) and 
     inserting ``$100,000'', and
       (3) by striking ``$50,000'' in subparagraph (C) and 
     inserting ``$250,000''.

[[Page 15956]]

       (e) Penalty in Case of Intentional Disregard.--Paragraph 
     (2) of section 6721(e) is amended by striking ``$100'' and 
     inserting ``$250''.
       (f) Failure To Furnish Correct Payee Statements.--
       (1) In general.--Subsection (a) of section 6722 is amended 
     by striking ``$50'' and inserting ``$100''.
       (2) Aggregate annual limitation.--Subsections (a) and 
     (c)(2)(A) of section 6722 are each amended by striking 
     ``$100,000'' and inserting ``$500,000''.
       (3) Penalty in case of intentional disregard.--Paragraph 
     (1) of section 6722(c) is amended by striking ``$100'' and 
     inserting ``$250''.
       (g) Failure To Comply With Other Information Reporting 
     Requirements.--Section 6723 is amended--
       (1) by striking ``$50'' and inserting ``$100'', and
       (2) by striking ``$100,000'' and inserting ``$500,000''.
       (h) Effective Date.--The amendments made by this section 
     shall apply with respect to information returns required to 
     be filed on or after January 1, 2009.

     SEC. 3094. INCREASE IN PENALTY FOR FAILURE TO FILE S 
                   CORPORATION RETURNS.

       (a) In General.--Paragraph (1) of section 6699(b) (relating 
     to amount per month) is amended by striking ``$85'' and 
     inserting ``$100''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to returns the due date for the filing of which 
     (including extensions) is after the date of the enactment of 
     this Act.

     SEC. 3095. INCREASE IN PENALTY FOR FAILURE TO FILE 
                   PARTNERSHIP RETURNS.

       (a) Increase in Penalty Amount.--Paragraph (1) of section 
     6698(b) (relating to amount per month) is amended by striking 
     ``$85'' and inserting ``$100''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to returns the due date for the filing of which 
     (including extensions) is after the date of the enactment of 
     this Act.

     SEC. 3096. INCREASE IN MINIMUM PENALTY ON FAILURE TO FILE A 
                   RETURN OF TAX.

       (a) In General.--Subsection (a) of section 6651, as amended 
     by section 303(a) of the Heroes Earnings Assistance and 
     Relief Tax Act of 2008, is amended by striking ``$135'' in 
     the last sentence and inserting ``$225''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to returns the due date for the filing of which 
     (including extensions) is after the date of the enactment of 
     this Act.
       Resolved further, That on July 8, 2008, the Senate concurs 
     in the House amendments, striking titles VI through XI, to 
     the Senate amendment to the aforesaid bill;
       Resolved further, That on July 11, 2008, the Senate 
     disagrees to the amendments of the House, adding a new title 
     and inserting a new section to the amendment of the Senate to 
     the aforesaid bill.

              Motion offered by Mr. Frank of Massachusetts

  Mr. FRANK of Massachusetts. Mr. Speaker, I offer the motion at the 
desk.
  The SPEAKER pro tempore. The Clerk will designate the motion.
  The text of the motion is as follows:

       Motion offered by Mr. Frank of Massachusetts:
       Mr. Frank of Massachusetts moves that the House concur in 
     the Senate amendment to the House amendments to the Senate 
     amendment with a House amendment.

  The text of the House amendment is as follows:
       In lieu of the matter proposed to be inserted by the 
     amendment of the Senate, insert the following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Housing 
     and Economic Recovery Act of 2008''.
       (b) Table of Content.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                   DIVISION A--HOUSING FINANCE REFORM

Sec. 1001. Short title.
Sec. 1002. Definitions.

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

      Subtitle A--Improvement of Safety and Soundness Supervision

Sec. 1101. Establishment of the Federal Housing Finance Agency.
Sec. 1102. Duties and authorities of the Director.
Sec. 1103. Federal Housing Finance Oversight Board.
Sec. 1104. Authority to require reports by regulated entities.
Sec. 1105. Examiners and accountants; authority to contract for reviews 
              of regulated entities; ombudsman.
Sec. 1106. Assessments.
Sec. 1107. Regulations and orders.
Sec. 1108. Prudential management and operations standards.
Sec. 1109. Review of and authority over enterprise assets and 
              liabilities.
Sec. 1110. Risk-based capital requirements.
Sec. 1111. Minimum capital levels.
Sec. 1112. Registration under the securities laws.
Sec. 1113. Prohibition and withholding of executive compensation.
Sec. 1114. Limit on golden parachutes.
Sec. 1115. Reporting of fraudulent loans.
Sec. 1116. Inclusion of minorities and women; diversity in Agency 
              workforce.
Sec. 1117. Temporary authority for purchase of obligations of regulated 
              entities by Secretary of Treasury.
Sec. 1118. Consultation between the Director of the Federal Housing 
              Finance Agency and the Board of Governors of the Federal 
              Reserve System to ensure financial market stability .

             Subtitle B--Improvement of Mission Supervision

Sec. 1121. Transfer of program approval and housing goal oversight.
Sec. 1122. Assumption by the Director of certain other HUD 
              responsibilities.
Sec. 1123. Review of enterprise products.
Sec. 1124. Conforming loan limits.
Sec. 1125. Annual housing report.
Sec. 1126. Public use database.
Sec. 1127. Reporting of mortgage data.
Sec. 1128. Revision of housing goals.
Sec. 1129. Duty to serve underserved markets.
Sec. 1130. Monitoring and enforcing compliance with housing goals.
Sec. 1131. Affordable housing programs.
Sec. 1132. Financial education and counseling.
Sec. 1133. Transfer and rights of certain HUD employees.

                  Subtitle C--Prompt Corrective Action

Sec. 1141. Critical capital levels.
Sec. 1142. Capital classifications.
Sec. 1143. Supervisory actions applicable to undercapitalized regulated 
              entities.
Sec. 1144. Supervisory actions applicable to significantly 
              undercapitalized regulated entities.
Sec. 1145. Authority over critically undercapitalized regulated 
              entities.

                    Subtitle D--Enforcement Actions

Sec. 1151. Cease and desist proceedings.
Sec. 1152. Temporary cease and desist proceedings.
Sec. 1153. Removal and prohibition authority.
Sec. 1154. Enforcement and jurisdiction.
Sec. 1155. Civil money penalties.
Sec. 1156. Criminal penalty.
Sec. 1157. Notice after separation from service.
Sec. 1158. Subpoena authority.

                     Subtitle E--General Provisions

Sec. 1161. Conforming and technical amendments.
Sec. 1162. Presidentially-appointed directors of enterprises.
Sec. 1163. Effective date.

                   TITLE II--FEDERAL HOME LOAN BANKS

Sec. 1201. Recognition of distinctions between the enterprises and the 
              Federal Home Loan Banks.
Sec. 1202. Directors.
Sec. 1203. Definitions.
Sec. 1204. Agency oversight of Federal Home Loan Banks.
Sec. 1205. Housing goals.
Sec. 1206. Community development financial institutions.
Sec. 1207. Sharing of information among Federal Home Loan Banks.
Sec. 1208. Exclusion from certain requirements.
Sec. 1209. Voluntary mergers.
Sec. 1210. Authority to reduce districts.
Sec. 1211. Community financial institution members.
Sec. 1212. Public use database; reports to Congress.
Sec. 1213. Semiannual reports.
Sec. 1214. Liquidation or reorganization of a Federal Home Loan Bank.
Sec. 1215. Study and report to Congress on securitization of acquired 
              member assets.
Sec. 1216. Technical and conforming amendments.
Sec. 1217. Study on Federal Home Loan Bank advances.
Sec. 1218. Federal Home Loan Bank refinancing authority for certain 
              residential mortgage loans.

TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND 
                   THE FEDERAL HOUSING FINANCE BOARD

                           Subtitle A--OFHEO

Sec. 1301. Abolishment of OFHEO.
Sec. 1302. Continuation and coordination of certain actions.
Sec. 1303. Transfer and rights of employees of OFHEO.
Sec. 1304. Transfer of property and facilities.

               Subtitle B--Federal Housing Finance Board

Sec. 1311. Abolishment of the Federal Housing Finance Board.
Sec. 1312. Continuation and coordination of certain actions.
Sec. 1313. Transfer and rights of employees of the Federal Housing 
              Finance Board.
Sec. 1314. Transfer of property and facilities.

                     TITLE IV--HOPE FOR HOMEOWNERS

Sec. 1401. Short title.

[[Page 15957]]

Sec. 1402. Establishment of HOPE for Homeowners Program.
Sec. 1403. Fiduciary duty of servicers of pooled residential mortgage 
              loans.
Sec. 1404. Revised standards for FHA appraisers.

                TITLE V--S.A.F.E. MORTGAGE LICENSING ACT

Sec. 1501. Short title.
Sec. 1502. Purposes and methods for establishing a mortgage licensing 
              system and registry.
Sec. 1503. Definitions.
Sec. 1504. License or registration required.
Sec. 1505. State license and registration application and issuance.
Sec. 1506. Standards for State license renewal.
Sec. 1507. System of registration administration by Federal agencies.
Sec. 1508. Secretary of Housing and Urban Development backup authority 
              to establish a loan originator licensing system.
Sec. 1509. Backup authority to establish a nationwide mortgage 
              licensing and registry system.
Sec. 1510. Fees.
Sec. 1511. Background checks of loan originators.
Sec. 1512. Confidentiality of information.
Sec. 1513. Liability provisions.
Sec. 1514. Enforcement under HUD backup licensing system.
Sec. 1515. State examination authority.
Sec. 1516. Reports and recommendations to Congress.
Sec. 1517. Study and reports on defaults and foreclosures.

                        TITLE VI--MISCELLANEOUS

Sec. 1601. Study and reports on guarantee fees.
Sec. 1602. Study and report on default risk evaluation.
Sec. 1603. Conversion of HUD contracts.
Sec. 1604. Bridge depository institutions.
Sec. 1605. Sense of the Senate.

                   DIVISION B--FORECLOSURE PREVENTION

Sec. 2001. Short title.
Sec. 2002. Emergency designation.

                 TITLE I--FHA MODERNIZATION ACT OF 2008

Sec. 2101. Short title.

              Subtitle A--Building American Homeownership

Sec. 2111. Short title.
Sec. 2112. Maximum principal loan obligation.
Sec. 2113. Cash investment requirement and prohibition of seller-funded 
              down payment assistance.
Sec. 2114. Mortgage insurance premiums.
Sec. 2115. Rehabilitation loans.
Sec. 2116. Discretionary action.
Sec. 2117. Insurance of condominiums.
Sec. 2118. Mutual Mortgage Insurance Fund.
Sec. 2119. Hawaiian home lands and Indian reservations.
Sec. 2120. Conforming and technical amendments.
Sec. 2121. Insurance of mortgages.
Sec. 2122. Home equity conversion mortgages.
Sec. 2123. Energy efficient mortgages program.
Sec. 2124. Pilot program for automated process for borrowers without 
              sufficient credit history.
Sec. 2125. Homeownership preservation.
Sec. 2126. Use of FHA savings for improvements in FHA technologies, 
              procedures, processes, program performance, staffing, and 
              salaries.
Sec. 2127. Post-purchase housing counseling eligibility improvements.
Sec. 2128. Pre-purchase homeownership counseling demonstration.
Sec. 2129. Fraud prevention.
Sec. 2130. Limitation on mortgage insurance premium increases.
Sec. 2131. Savings provision.
Sec. 2132. Implementation.
Sec. 2133. Moratorium on implementation of risk-based premiums.

          Subtitle B--Manufactured Housing Loan Modernization

Sec. 2141. Short title.
Sec. 2142. Purposes.
Sec. 2143. Exception to limitation on financial institution portfolio.
Sec. 2144. Insurance benefits.
Sec. 2145. Maximum loan limits.
Sec. 2146. Insurance premiums.
Sec. 2147. Technical corrections.
Sec. 2148. Revision of underwriting criteria.
Sec. 2149. Prohibition against kickbacks and unearned fees.
Sec. 2150. Leasehold requirements.

     TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

Sec. 2201. Temporary increase in maximum loan guaranty amount for 
              certain housing loans guaranteed by the Secretary of 
              Veterans Affairs.
Sec. 2202. Counseling on mortgage foreclosures for members of the Armed 
              Forces returning from service abroad.
Sec. 2203. Enhancement of protections for servicemembers relating to 
              mortgages and mortgage foreclosures.

TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND 
                            FORECLOSED HOMES

Sec. 2301. Emergency assistance for the redevelopment of abandoned and 
              foreclosed homes.
Sec. 2302. Nationwide distribution of resources.
Sec. 2303. Limitation on use of funds with respect to eminent domain.
Sec. 2304. Limitation on distribution of funds.
Sec. 2305. Counseling intermediaries.

                 TITLE IV--HOUSING COUNSELING RESOURCES

Sec. 2401. Housing counseling resources.
Sec. 2402. Credit counseling.

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

Sec. 2501. Short title.
Sec. 2502. Enhanced mortgage loan disclosures.
Sec. 2503. Community Development Investment Authority for depository 
              institutions.

                   TITLE VI--VETERANS HOUSING MATTERS

Sec. 2601. Home improvements and structural alterations for totally 
              disabled members of the Armed Forces before discharge or 
              release from the Armed Forces.
Sec. 2602. Eligibility for specially adapted housing benefits and 
              assistance for members of the Armed Forces with service-
              connected disabilities and individuals residing outside 
              the United States.
Sec. 2603. Specially adapted housing assistance for individuals with 
              severe burn injuries.
Sec. 2604. Extension of assistance for individuals residing temporarily 
              in housing owned by a family member.
Sec. 2605. Increase in specially adapted housing benefits for disabled 
              veterans.
Sec. 2606. Report on specially adapted housing for disabled 
              individuals.
Sec. 2607. Report on specially adapted housing assistance for 
              individuals who reside in housing owned by a family 
              member on permanent basis.
Sec. 2608. Definition of annual income for purposes of section 8 and 
              other public housing programs.
Sec. 2609. Payment of transportation of baggage and household effects 
              for members of the Armed Forces who relocate due to 
              foreclosure of leased housing.

  TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT

Sec. 2701. Short title.
Sec. 2702. Public housing agency plans for certain qualified public 
              housing agencies.

                    TITLE VIII--HOUSING PRESERVATION

        Subtitle A--Preservation Under Federal Housing Programs

Sec. 2801. Clarification of disposition of certain properties.
Sec. 2802. Eligibility of certain projects for enhanced voucher 
              assistance.
Sec. 2803. Transfer of certain rental assistance contracts.
Sec. 2804. Public housing disaster relief.
Sec. 2805. Preservation of certain affordable housing.

Subtitle B--Coordination of Federal Housing Programs and Tax Incentives 
                              for Housing

Sec. 2831. Short title.
Sec. 2832. Approvals by Department of Housing and Urban Development.
Sec. 2833. Project approvals by rural housing service.
Sec. 2834. Use of FHA loans with housing tax credits.
Sec. 2835. Other HUD programs.

                        TITLE IX--MISCELLANEOUS

Sec. 2901. Homeless assistance.
Sec. 2902. Increasing access and understanding of energy efficient 
              mortgages.

                   DIVISION C--TAX-RELATED PROVISIONS

Sec. 3000. Short title; etc.

                    TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                 Part I--Low-Income Housing Tax Credit

Sec. 3001. Temporary increase in volume cap for low-income housing tax 
              credit.
Sec. 3002. Determination of credit rate.
Sec. 3003. Modifications to definition of eligible basis.
Sec. 3004. Other simplification and reform of low-income housing tax 
              incentives.
Sec. 3005. Treatment of military basic pay.

        Part II--Modifications to Tax-Exempt Housing Bond Rules

Sec. 3007. Recycling of tax-exempt debt for financing residential 
              rental projects.
Sec. 3008. Coordination of certain rules applicable to low-income 
              housing credit and qualified residential rental project 
              exempt facility bonds.

[[Page 15958]]

  Part III--Reforms Related to the Low-Income Housing Credit and Tax-
                          Exempt Housing Bonds

Sec. 3009. Hold harmless for reductions in area median gross income.
Sec. 3010. Exception to annual current income determination requirement 
              where determination not relevant.

                   Subtitle B--Single Family Housing

Sec. 3011. First-time homebuyer credit.
Sec. 3012. Additional standard deduction for real property taxes for 
              nonitemizers.

                     Subtitle C--General Provisions

Sec. 3021. Temporary liberalization of tax-exempt housing bond rules.
Sec. 3022. Repeal of alternative minimum tax limitations on tax-exempt 
              housing bonds, low-income housing tax credit, and 
              rehabilitation credit.
Sec. 3023. Bonds guaranteed by Federal home loan banks eligible for 
              treatment as tax-exempt bonds.
Sec. 3024. Modification of rules pertaining to FIRPTA nonforeign 
              affidavits.
Sec. 3025. Modification of definition of tax-exempt use property for 
              purposes of the rehabilitation credit.
Sec. 3026. Extension of special rule for mortgage revenue bonds for 
              residences located in disaster areas.
Sec. 3027. Transfer of funds appropriated to carry out 2008 recovery 
              rebates for individuals.

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

      Subtitle A--Foreign Currency and Other Qualified Activities

Sec. 3031. Revisions to REIT income tests.
Sec. 3032. Revisions to REIT asset tests.
Sec. 3033. Conforming foreign currency revisions.

                 Subtitle B--Taxable REIT Subsidiaries

Sec. 3041. Conforming taxable REIT subsidiary asset test.

                        Subtitle C--Dealer Sales

Sec. 3051. Holding period under safe harbor.
Sec. 3052. Determining value of sales under safe harbor.

                     Subtitle D--Health Care REITs

Sec. 3061. Conformity for health care facilities.

                      Subtitle E--Effective Dates

Sec. 3071. Effective dates.

                     TITLE III--REVENUE PROVISIONS

                     Subtitle A--General Provisions

Sec. 3081. Election to accelerate the AMT and research credits in lieu 
              of bonus depreciation.
Sec. 3082. Certain GO Zone incentives.
Sec. 3083. Increase in statutory limit on the public debt.

                      Subtitle B--Revenue Offsets

Sec. 3091. Returns relating to payments made in settlement of payment 
              card and third party network transactions.
Sec. 3092. Gain from sale of principal residence allocated to 
              nonqualified use not excluded from income.
Sec. 3093. Delay in application of worldwide allocation of interest.
Sec. 3094. Time for payment of corporate estimated taxes.

                   DIVISION A--HOUSING FINANCE REFORM

     SEC. 1001. SHORT TITLE.

       This division may be cited as the ``Federal Housing Finance 
     Regulatory Reform Act of 2008''.

     SEC. 1002. DEFINITIONS.

       (a) Federal Safety and Soundness Act Definitions.--Section 
     1303 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4502) is amended--
       (1) in each of paragraphs (8), (9), (10), and (19), by 
     striking ``Secretary'' each place that term appears and 
     inserting ``Director'';
       (2) by redesignating paragraphs (16) through (19) as 
     paragraphs (21) through (24), respectively;
       (3) by striking paragraphs (13) through (15) and inserting 
     the following:
       ``(19) Office of finance.--The term `Office of Finance' 
     means the Office of Finance of the Federal Home Loan Bank 
     System (or any successor thereto).
       ``(20) Regulated entity.--The term `regulated entity' 
     means--
       ``(A) the Federal National Mortgage Association and any 
     affiliate thereof;
       ``(B) the Federal Home Loan Mortgage Corporation and any 
     affiliate thereof; and
       ``(C) any Federal Home Loan Bank.'';
       (4) by redesignating paragraphs (11) and (12) as paragraphs 
     (17) and (18), respectively;
       (5) by redesignating paragraph (7) as paragraph (12);
       (6) by redesignating paragraphs (8) through (10) as 
     paragraphs (14) through (16), respectively;
       (7) in paragraph (5)--
       (A) by striking ``(5)'' and inserting ``(9)''; and
       (B) by striking ``Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban 
     Development'' and inserting ``Federal Housing Finance 
     Agency'';
       (8) by redesignating paragraph (6) as paragraph (10);
       (9) by redesignating paragraphs (2) through (4) as 
     paragraphs (5) through (7), respectively;
       (10) by inserting after paragraph (7), as redesignated, the 
     following:
       ``(8) Default; in danger of default.--
       ``(A) Default.--The term `default' means, with respect to a 
     regulated entity, any adjudication or other official 
     determination by any court of competent jurisdiction, or the 
     Agency, pursuant to which a conservator, receiver, limited-
     life regulated entity, or legal custodian is appointed for a 
     regulated entity.
       ``(B) In danger of default.--The term `in danger of 
     default' means a regulated entity with respect to which, in 
     the opinion of the Agency--
       ``(i) the regulated entity is not likely to be able to pay 
     the obligations of the regulated entity in the normal course 
     of business; or
       ``(ii) the regulated entity--

       ``(I) has incurred or is likely to incur losses that will 
     deplete all or substantially all of its capital; and
       ``(II) there is no reasonable prospect that the capital of 
     the regulated entity will be replenished.'';

       (11) by inserting after paragraph (1) the following:
       ``(2) Agency.--The term `Agency' means the Federal Housing 
     Finance Agency established under section 1311.
       ``(3) Authorizing statutes.--The term `authorizing 
     statutes' means--
       ``(A) the Federal National Mortgage Association Charter 
     Act;
       ``(B) the Federal Home Loan Mortgage Corporation Act; and
       ``(C) the Federal Home Loan Bank Act.
       ``(4) Board.--The term `Board' means the Federal Housing 
     Finance Oversight Board established under section 1313A.'';
       (12) by inserting after paragraph (10), as redesignated by 
     this section, the following:
       ``(11) Entity-affiliated party.--The term `entity-
     affiliated party' means--
       ``(A) any director, officer, employee, or controlling 
     stockholder of, or agent for, a regulated entity;
       ``(B) any shareholder, affiliate, consultant, or joint 
     venture partner of a regulated entity, and any other person, 
     as determined by the Director (by regulation or on a case-by-
     case basis) that participates in the conduct of the affairs 
     of a regulated entity, provided that a member of a Federal 
     Home Loan Bank shall not be deemed to have participated in 
     the affairs of that Bank solely by virtue of being a 
     shareholder of, and obtaining advances from, that Bank;
       ``(C) any independent contractor for a regulated entity 
     (including any attorney, appraiser, or accountant), if--
       ``(i) the independent contractor knowingly or recklessly 
     participates in--

       ``(I) any violation of any law or regulation;
       ``(II) any breach of fiduciary duty; or
       ``(III) any unsafe or unsound practice; and

       ``(ii) such violation, breach, or practice caused, or is 
     likely to cause, more than a minimal financial loss to, or a 
     significant adverse effect on, the regulated entity;
       ``(D) any not-for-profit corporation that receives its 
     principal funding, on an ongoing basis, from any regulated 
     entity; and
       ``(E) the Office of Finance.'';
       (13) by inserting after paragraph (12), as redesignated by 
     this section, the following:
       ``(13) Limited-life regulated entity.--The term `limited-
     life regulated entity' means an entity established by the 
     Agency under section 1367(i) with respect to a Federal Home 
     Loan Bank in default or in danger of default or with respect 
     to an enterprise in default or in danger of default.''; and
       (14) by adding at the end the following:
       ``(25) Violation.--The term `violation' includes any action 
     (alone or in combination with another or others) for or 
     toward causing, bringing about, participating in, counseling, 
     or aiding or abetting a violation.''.
       (b) References in This Act.--As used in this Act, unless 
     otherwise specified--
       (1) the term ``Agency'' means the Federal Housing Finance 
     Agency;
       (2) the term ``Director'' means the Director of the Agency; 
     and
       (3) the terms ``enterprise'', ``regulated entity'', and 
     ``authorizing statutes'' have the same meanings as in section 
     1303 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992, as amended by this Act.

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

      Subtitle A--Improvement of Safety and Soundness Supervision

     SEC. 1101. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE 
                   AGENCY.

       The Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
     striking sections 1311 and 1312 and inserting the following:

     ``SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE 
                   AGENCY.

       ``(a) Establishment.--There is established the Federal 
     Housing Finance Agency, which shall be an independent agency 
     of the Federal Government.
       ``(b) General Supervisory and Regulatory Authority.--

[[Page 15959]]

       ``(1) In general.--Each regulated entity shall, to the 
     extent provided in this title, be subject to the supervision 
     and regulation of the Agency.
       ``(2) Authority over fannie mae, freddie mac, the federal 
     home loan banks, and the office of finance.--The Director 
     shall have general regulatory authority over each regulated 
     entity and the Office of Finance, and shall exercise such 
     general regulatory authority, including such duties and 
     authorities set forth under section 1313, to ensure that the 
     purposes of this Act, the authorizing statutes, and any other 
     applicable law are carried out.
       ``(c) Savings Provision.--The authority of the Director to 
     take actions under subtitles B and C shall not in any way 
     limit the general supervisory and regulatory authority 
     granted to the Director under subsection (b).

     ``SEC. 1312. DIRECTOR.

       ``(a) Establishment of Position.--There is established the 
     position of the Director of the Agency, who shall be the head 
     of the Agency.
       ``(b) Appointment; Term.--
       ``(1) Appointment.--The Director shall be appointed by the 
     President, by and with the advice and consent of the Senate, 
     from among individuals who are citizens of the United States, 
     have a demonstrated understanding of financial management or 
     oversight, and have a demonstrated understanding of capital 
     markets, including the mortgage securities markets and 
     housing finance.
       ``(2) Term.--The Director shall be appointed for a term of 
     5 years, unless removed before the end of such term for cause 
     by the President.
       ``(3) Vacancy.--A vacancy in the position of Director that 
     occurs before the expiration of the term for which a Director 
     was appointed shall be filled in the manner established under 
     paragraph (1), and the Director appointed to fill such 
     vacancy shall be appointed only for the remainder of such 
     term.
       ``(4) Service after end of term.--An individual may serve 
     as the Director after the expiration of the term for which 
     appointed until a successor has been appointed.
       ``(5) Transitional provision.--Notwithstanding paragraphs 
     (1) and (2), during the period beginning on the effective 
     date of the Federal Housing Finance Regulatory Reform Act of 
     2008, and ending on the date on which the Director is 
     appointed and confirmed, the person serving as the Director 
     of the Office of Federal Housing Enterprise Oversight of the 
     Department of Housing and Urban Development on that effective 
     date shall act for all purposes as, and with the full powers 
     of, the Director.
       ``(c) Deputy Director of the Division of Enterprise 
     Regulation.--
       ``(1) In general.--The Agency shall have a Deputy Director 
     of the Division of Enterprise Regulation, who shall be 
     designated by the Director from among individuals who are 
     citizens of the United States, have a demonstrated 
     understanding of financial management or oversight, and have 
     a demonstrated understanding of mortgage securities markets 
     and housing finance.
       ``(2) Functions.--The Deputy Director of the Division of 
     Enterprise Regulation shall have such functions, powers, and 
     duties with respect to the oversight of the enterprises as 
     the Director shall prescribe.
       ``(d) Deputy Director Of The Division Of Federal Home Loan 
     Bank Regulation.--
       ``(1) In general.--The Agency shall have a Deputy Director 
     of the Division of Federal Home Loan Bank Regulation, who 
     shall be designated by the Director from among individuals 
     who are citizens of the United States, have a demonstrated 
     understanding of financial management or oversight, and have 
     a demonstrated understanding of the Federal Home Loan Bank 
     System and housing finance.
       ``(2) Functions.--The Deputy Director of the Division of 
     Federal Home Loan Bank Regulation shall have such functions, 
     powers, and duties with respect to the oversight of the 
     Federal Home Loan Banks as the Director shall prescribe.
       ``(e) Deputy Director for Housing Mission and Goals.--
       ``(1) In general.--The Agency shall have a Deputy Director 
     for Housing Mission and Goals, who shall be designated by the 
     Director from among individuals who are citizens of the 
     United States, and have a demonstrated understanding of the 
     housing markets and housing finance.
       ``(2) Functions.--The Deputy Director for Housing Mission 
     and Goals shall have such functions, powers, and duties with 
     respect to the oversight of the housing mission and goals of 
     the enterprises, and with respect to oversight of the housing 
     finance and community and economic development mission of the 
     Federal Home Loan Banks, as the Director shall prescribe.
       ``(3) Considerations.--In exercising such functions, 
     powers, and duties, the Deputy Director for Housing Mission 
     and Goals shall consider the differences between the 
     enterprises and the Federal Home Loan Banks, including those 
     described in section 1313(d).
       ``(f) Acting Director.--In the event of the death, 
     resignation, sickness, or absence of the Director, the 
     President shall designate either the Deputy Director of the 
     Division of Enterprise Regulation, the Deputy Director of the 
     Division of Federal Home Loan Bank Regulation, or the Deputy 
     Director for Housing Mission and Goals, to serve as acting 
     Director until the return of the Director, or the appointment 
     of a successor pursuant to subsection (b).
       ``(g) Limitations.--The Director and each of the Deputy 
     Directors may not--
       ``(1) have any direct or indirect financial interest in any 
     regulated entity or entity-affiliated party;
       ``(2) hold any office, position, or employment in any 
     regulated entity or entity-affiliated party; or
       ``(3) have served as an executive officer or director of 
     any regulated entity or entity-affiliated party at any time 
     during the 3-year period preceding the date of appointment or 
     designation of such individual as Director or Deputy 
     Director, as applicable.''.

     SEC. 1102. DUTIES AND AUTHORITIES OF THE DIRECTOR.

       (a) In General.--Section 1313 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4513) is amended to read as follows:

     ``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.

       ``(a) Duties.--
       ``(1) Principal duties.--The principal duties of the 
     Director shall be--
       ``(A) to oversee the prudential operations of each 
     regulated entity; and
       ``(B) to ensure that--
       ``(i) each regulated entity operates in a safe and sound 
     manner, including maintenance of adequate capital and 
     internal controls;
       ``(ii) the operations and activities of each regulated 
     entity foster liquid, efficient, competitive, and resilient 
     national housing finance markets (including activities 
     relating to mortgages on housing for low- and moderate-income 
     families involving a reasonable economic return that may be 
     less than the return earned on other activities);
       ``(iii) each regulated entity complies with this title and 
     the rules, regulations, guidelines, and orders issued under 
     this title and the authorizing statutes;
       ``(iv) each regulated entity carries out its statutory 
     mission only through activities that are authorized under and 
     consistent with this title and the authorizing statutes; and
       ``(v) the activities of each regulated entity and the 
     manner in which such regulated entity is operated are 
     consistent with the public interest.
       ``(2) Scope of authority.--The authority of the Director 
     shall include the authority--
       ``(A) to review and, if warranted based on the principal 
     duties described in paragraph (1), reject any acquisition or 
     transfer of a controlling interest in a regulated entity; and
       ``(B) to exercise such incidental powers as may be 
     necessary or appropriate to fulfill the duties and 
     responsibilities of the Director in the supervision and 
     regulation of each regulated entity.
       ``(b) Delegation of Authority.--The Director may delegate 
     to officers and employees of the Agency any of the functions, 
     powers, or duties of the Director, as the Director considers 
     appropriate.
       ``(c) Litigation Authority.--
       ``(1) In general.--In enforcing any provision of this 
     title, any regulation or order prescribed under this title, 
     or any other provision of law, rule, regulation, or order, or 
     in any other action, suit, or proceeding to which the 
     Director is a party or in which the Director is interested, 
     and in the administration of conservatorships and 
     receiverships, the Director may act in the Director's own 
     name and through the Director's own attorneys.
       ``(2) Subject to suit.--Except as otherwise provided by 
     law, the Director shall be subject to suit (other than suits 
     on claims for money damages) by a regulated entity with 
     respect to any matter under this title or any other 
     applicable provision of law, rule, order, or regulation under 
     this title, in the United States district court for the 
     judicial district in which the regulated entity has its 
     principal place of business, or in the United States District 
     Court for the District of Columbia, and the Director may be 
     served with process in the manner prescribed by the Federal 
     Rules of Civil Procedure.''.
       (b) Independence in Congressional Testimony and 
     Recommendations.--Section 111 of Public Law 93-495 (12 U.S.C. 
     250) is amended by striking ``the Federal Housing Finance 
     Board'' and inserting ``the Director of the Federal Housing 
     Finance Agency''.

     SEC. 1103. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.

       (a) In General.--The Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
     amended by inserting after section 1313 the following:

     ``SEC. 1313A. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.

       ``(a) In General.--There is established the Federal Housing 
     Finance Oversight Board, which shall advise the Director with 
     respect to overall strategies and policies in carrying out 
     the duties of the Director under this title.
       ``(b) Limitations.--The Board may not exercise any 
     executive authority, and the Director may not delegate to the 
     Board any of the functions, powers, or duties of the 
     Director.

[[Page 15960]]

       ``(c) Composition.--The Board shall be comprised of 4 
     members, of whom--
       ``(1) 1 member shall be the Secretary of the Treasury;
       ``(2) 1 member shall be the Secretary of Housing and Urban 
     Development;
       ``(3) 1 member shall be the Chairman of the Securities and 
     Exchange Commission; and
       ``(4) 1 member shall be the Director, who shall serve as 
     the Chairperson of the Board.
       ``(d) Meetings.--
       ``(1) In general.--The Board shall meet upon notice by the 
     Director, but in no event shall the Board meet less 
     frequently than once every 3 months.
       ``(2) Special meetings.--Either the Secretary of the 
     Treasury, the Secretary of Housing and Urban Development, or 
     the Chairman of the Securities and Exchange Commission may, 
     upon giving written notice to the Director, require a special 
     meeting of the Board.
       ``(e) Testimony.--On an annual basis, the Board shall 
     testify before Congress regarding--
       ``(1) the safety and soundness of the regulated entities;
       ``(2) any material deficiencies in the conduct of the 
     operations of the regulated entities;
       ``(3) the overall operational status of the regulated 
     entities;
       ``(4) an evaluation of the performance of the regulated 
     entities in carrying out their respective missions;
       ``(5) operations, resources, and performance of the Agency; 
     and
       ``(6) such other matters relating to the Agency and its 
     fulfillment of its mission, as the Board determines 
     appropriate.''.
       (b) Annual Report of the Director.--Section 1319B(a) of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4521(a)) is amended--
       (1) by striking ``enterprise'' each place that term appears 
     and inserting ``regulated entity'';
       (2) by striking ``enterprises'' each place that term 
     appears and inserting ``regulated entities'';
       (3) in paragraph (3), by striking ``; and'' and inserting a 
     semicolon;
       (4) in paragraph (4), by striking ``1994.'' and inserting 
     ``1994; and''; and
       (5) by adding at the end the following:
       ``(5) the assessment of the Board or any of its members 
     with respect to--
       ``(A) the safety and soundness of the regulated entities;
       ``(B) any material deficiencies in the conduct of the 
     operations of the regulated entities;
       ``(C) the overall operational status of the regulated 
     entities; and
       ``(D) an evaluation of the performance of the regulated 
     entities in carrying out their respective missions;
       ``(6) operations, resources, and performance of the Agency; 
     and
       ``(7) such other matters relating to the Agency and the 
     fulfillment of its mission.''.

     SEC. 1104. AUTHORITY TO REQUIRE REPORTS BY REGULATED 
                   ENTITIES.

       (a) In General.--Section 1314 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4514) is amended--
       (1) in the section heading, by striking ``ENTERPRISES'' and 
     inserting ``REGULATED ENTITIES'';
       (2) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity'';
       (3) by striking ``the enterprise'' and inserting ``the 
     regulated entity'';
       (4) in subsection (a)--
       (A) by striking the subsection heading and all that follows 
     through ``and operations'' in paragraph (1) and inserting the 
     following:
       ``(a) Regular and Special Reports.--
       ``(1) Regular reports.--The Director may require, by 
     general or specific orders, a regulated entity to submit 
     regular reports, including financial statements determined on 
     a fair value basis, on the condition (including financial 
     condition), management, activities, or operations of the 
     regulated entity, as the Director considers appropriate''; 
     and
       (B) in paragraph (2)--
       (i) by inserting ``, by general or specific orders,'' after 
     ``may also require''; and
       (ii) by striking ``whenever'' and inserting ``on any of the 
     topics specified in paragraph (1) or any other relevant 
     topics, if''; and
       (5) by adding at the end the following:
       ``(c) Penalties for Failure To Make Reports.--
       ``(1) Violations.--It shall be a violation of this section 
     for any regulated entity--
       ``(A) to fail to make, transmit, or publish any report or 
     obtain any information required by the Director under this 
     section, section 309(k) of the Federal National Mortgage 
     Association Charter Act, section 307(c) of the Federal Home 
     Loan Mortgage Corporation Act, or section 20 of the Federal 
     Home Loan Bank Act, within the period of time specified in 
     such provision of law or otherwise by the Director; or
       ``(B) to submit or publish any false or misleading report 
     or information under this section.
       ``(2) Penalties.--
       ``(A) First tier.--
       ``(i) In general.--A violation described in paragraph (1) 
     shall be subject to a penalty of not more than $2,000 for 
     each day during which such violation continues, in any case 
     in which--

       ``(I) the subject regulated entity maintains procedures 
     reasonably adapted to avoid any inadvertent error and the 
     violation was unintentional and a result of such an error; or
       ``(II) the violation was an inadvertent transmittal or 
     publication of any report which was minimally late.

       ``(ii) Burden of proof.--For purposes of this subparagraph, 
     the regulated entity shall have the burden of proving that 
     the error was inadvertent or that a report was inadvertently 
     transmitted or published late.
       ``(B) Second tier.--A violation described in paragraph (1) 
     shall be subject to a penalty of not more than $20,000 for 
     each day during which such violation continues or such false 
     or misleading information is not corrected, in any case that 
     is not addressed in subparagraph (A) or (C).
       ``(C) Third tier.--A violation described in paragraph (1) 
     shall be subject to a penalty of not more than $1,000,000 per 
     day for each day during which such violation continues or 
     such false or misleading information is not corrected, in any 
     case in which the subject regulated entity committed such 
     violation knowingly or with reckless disregard for the 
     accuracy of any such information or report.
       ``(3) Assessments.--Any penalty imposed under this 
     subsection shall be in lieu of a penalty under section 1376, 
     but shall be assessed and collected by the Director in the 
     manner provided in section 1376 for penalties imposed under 
     that section, and any such assessment (including the 
     determination of the amount of the penalty) shall be 
     otherwise subject to the provisions of section 1376.
       ``(4) Hearing.--A regulated entity against which a penalty 
     is assessed under this section shall be afforded an agency 
     hearing if the regulated entity submits a request for a 
     hearing not later than 20 days after the date of the issuance 
     of the notice of assessment. Section 1374 shall apply to any 
     such proceedings.''.
       (b) Conforming Amendment.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et 
     seq.) is amended by striking sections 1327 and 1328.

     SEC. 1105. EXAMINERS AND ACCOUNTANTS; AUTHORITY TO CONTRACT 
                   FOR REVIEWS OF REGULATED ENTITIES; OMBUDSMAN.

       (a) In General.--Section 1317 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4517) is amended--
       (1) in subsection (a), by striking ``enterprise'' each 
     place that term appears and inserting ``regulated entity'';
       (2) in subsection (b)--
       (A) by inserting ``of a regulated entity'' after ``under 
     this section''; and
       (B) by striking ``to determine the condition of an 
     enterprise for the purpose of ensuring its financial safety 
     and soundness'' and inserting ``or appropriate'';
       (3) in subsection (c), in the second sentence, by inserting 
     before the period ``to conduct examinations under this 
     section'';
       (4) by redesignating subsections (d) through (f) as 
     subsections (e) through (g), respectively; and
       (5) by inserting after subsection (c) the following:
       ``(d) Inspector General.--There shall be within the Agency 
     an Inspector General, who shall be appointed in accordance 
     with section 3(a) of the Inspector General Act of 1978.''.
       (b) Direct Hire Authority To Hire Accountants, Economists, 
     and Examiners.--Section 1317 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4517) is amended by adding at the end the following:
       ``(h) Appointment of Accountants, Economists, and 
     Examiners.--
       ``(1) Applicability.--This section shall apply with respect 
     to any position of examiner, accountant, economist, and 
     specialist in financial markets and in technology at the 
     Agency, with respect to supervision and regulation of the 
     regulated entities, that is in the competitive service.
       ``(2) Appointment authority.--The Director may appoint 
     candidates to any position described in paragraph (1)--
       ``(A) in accordance with the statutes, rules, and 
     regulations governing appointments in the excepted service; 
     and
       ``(B) notwithstanding any statutes, rules, and regulations 
     governing appointments in the competitive service.''.
       (c) Amendments to Inspector General Act.--Section 11 of the 
     Inspector General Act of 1978 (5 U.S.C. App.) is amended--
       (1) in paragraph (1), by inserting ``; the Director of the 
     Federal Housing Finance Agency'' after ``Social Security 
     Administration''; and
       (2) in paragraph (2), by inserting ``, the Federal Housing 
     Finance Agency'' after ``Social Security Administration''.
       (d) Authority To Contract for Reviews of Regulated 
     Entities.--Section 1319 of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4519) 
     is amended--
       (1) in the section heading, by striking ``ENTERPRISES BY 
     RATING ORGANIZATION'' and inserting ``REGULATED ENTITIES''; 
     and
       (2) by striking ``enterprises'' and inserting ``regulated 
     entities''.

[[Page 15961]]

       (e) Office of the Ombudsman.--Section 1317 of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4517) is amended by adding at the end the 
     following:
       ``(i) Ombudsman.--The Director shall establish, by 
     regulation, an Office of the Ombudsman within the Agency, 
     which shall be responsible for considering complaints and 
     appeals, from any regulated entity and any person that has a 
     business relationship with a regulated entity, regarding any 
     matter relating to the regulation and supervision of such 
     regulated entity by the Agency. The regulation issued by the 
     Director under this subsection shall specify the authority 
     and duties of the Office of the Ombudsman.''.

     SEC. 1106. ASSESSMENTS.

       Section 1316 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4516) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Annual Assessments.--The Director shall establish and 
     collect from the regulated entities annual assessments in an 
     amount not exceeding the amount sufficient to provide for 
     reasonable costs (including administrative costs) and 
     expenses of the Agency, including--
       ``(1) the expenses of any examinations under section 1317 
     of this Act and under section 20 of the Federal Home Loan 
     Bank Act;
       ``(2) the expenses of obtaining any reviews and credit 
     assessments under section 1319;
       ``(3) such amounts in excess of actual expenses for any 
     given year as deemed necessary by the Director to maintain a 
     working capital fund in accordance with subsection (e); and
       ``(4) the windup of the affairs of the Office of Federal 
     Housing Enterprise Oversight and the Federal Housing Finance 
     Board under title III of the Federal Housing Finance 
     Regulatory Reform Act of 2008.'';
       (2) in subsection (b)--
       (A) by realigning the margins of paragraph (2) two ems from 
     the left, so as to align the left margin of such paragraph 
     with the left margins of paragraph (1);
       (B) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (4), respectively; and
       (C) by inserting after paragraph (1) the following:
       ``(2) Separate treatment of federal home loan bank and 
     enterprise assessments.--Assessments collected from the 
     enterprises shall not exceed the amounts sufficient to 
     provide for the costs and expenses described in subsection 
     (a) relating to the enterprises. Assessments collected from 
     the Federal Home Loan Banks shall not exceed the amounts 
     sufficient to provide for the costs and expenses described in 
     subsection (a) relating to the Federal Home Loan Banks.'';
       (3) by striking subsection (c) and inserting the following:
       ``(c) Increased Costs of Regulation.--
       ``(1) Increase for inadequate capitalization.--The 
     semiannual payments made pursuant to subsection (b) by any 
     regulated entity that is not classified (for purposes of 
     subtitle B) as adequately capitalized may be increased, as 
     necessary, in the discretion of the Director to pay 
     additional estimated costs of regulation of the regulated 
     entity.
       ``(2) Adjustment for enforcement activities.--The Director 
     may adjust the amounts of any semiannual payments for an 
     assessment under subsection (a) that are to be paid pursuant 
     to subsection (b) by a regulated entity, as necessary in the 
     discretion of the Director, to ensure that the costs of 
     enforcement activities under this Act for a regulated entity 
     are borne only by such regulated entity.
       ``(3) Additional assessment for deficiencies.--If at any 
     time, as a result of increased costs of regulation of a 
     regulated entity that is not classified (for purposes of 
     subtitle B) as adequately capitalized or as the result of 
     supervisory or enforcement activities under this Act for a 
     regulated entity, the amount available from any semiannual 
     payment made by such regulated entity pursuant to subsection 
     (b) is insufficient to cover the costs of the Agency with 
     respect to such entity, the Director may make and collect 
     from such regulated entity an immediate assessment to cover 
     the amount of such deficiency for the semiannual period. If, 
     at the end of any semiannual period during which such an 
     assessment is made, any amount remains from such assessment, 
     such remaining amount shall be deducted from the assessment 
     for such regulated entity for the following semiannual 
     period.'';
       (4) in subsection (d), by striking ``If'' and inserting 
     ``Except with respect to amounts collected pursuant to 
     subsection (a)(3), if''; and
       (5) by striking subsections (e) through (g) and inserting 
     the following:
       ``(e) Working Capital Fund.--At the end of each year for 
     which an assessment under this section is made, the Director 
     shall remit to each regulated entity any amount of assessment 
     collected from such regulated entity that is attributable to 
     subsection (a)(3) and is in excess of the amount the Director 
     deems necessary to maintain a working capital fund.
       ``(f) Treatment of Assessments.--
       ``(1) Deposit.--Amounts received by the Director from 
     assessments under this section may be deposited by the 
     Director in the manner provided in section 5234 of the 
     Revised Statutes of the United States (12 U.S.C. 192) for 
     monies deposited by the Comptroller of the Currency.
       ``(2) Not government funds.--The amounts received by the 
     Director from any assessment under this section shall not be 
     construed to be Government or public funds or appropriated 
     money.
       ``(3) No apportionment of funds.--Notwithstanding any other 
     provision of law, the amounts received by the Director from 
     any assessment under this section shall not be subject to 
     apportionment for the purpose of chapter 15 of title 31, 
     United States Code, or under any other authority.
       ``(4) Use of funds.--The Director may use any amounts 
     received by the Director from assessments under this section 
     for compensation of the Director and other employees of the 
     Agency and for all other expenses of the Director and the 
     Agency.
       ``(5) Availability of oversight fund amounts.--
     Notwithstanding any other provision of law, any amounts 
     remaining in the Federal Housing Enterprises Oversight Fund 
     established under this section (as in effect before the 
     effective date of the Federal Housing Finance Regulatory 
     Reform Act of 2008, and any amounts remaining from 
     assessments on the Federal Home Loan Banks pursuant to 
     section 18(b) of the Federal Home Loan Bank Act (12 U.S.C. 
     1438(b)), shall, upon such effective date, be treated for 
     purposes of this subsection as amounts received from 
     assessments under this section.
       ``(6) Treasury investments.--
       ``(A) Authority.--The Director may request the Secretary of 
     the Treasury to invest such portions of amounts received by 
     the Director from assessments paid under this section that, 
     in the Director's discretion, are not required to meet the 
     current working needs of the Agency.
       ``(B) Government obligations.--Pursuant to a request under 
     subparagraph (A), the Secretary of the Treasury shall invest 
     such amounts in Government obligations guaranteed as to 
     principal and interest by the United States with maturities 
     suitable to the needs of the Agency and bearing interest at a 
     rate determined by the Secretary of the Treasury taking into 
     consideration current market yields on outstanding marketable 
     obligations of the United States of comparable maturity.
       ``(g) Budget and Financial Management.--
       ``(1) Financial operating plans and forecasts.--The 
     Director shall provide to the Director of the Office of 
     Management and Budget copies of the Director's financial 
     operating plans and forecasts, as prepared by the Director in 
     the ordinary course of the Agency's operations, and copies of 
     the quarterly reports of the Agency's financial condition and 
     results of operations, as prepared by the Director in the 
     ordinary course of the Agency's operations.
       ``(2) Financial statements.--The Agency shall prepare 
     annually a statement of--
       ``(A) assets and liabilities and surplus or deficit;
       ``(B) income and expenses; and
       ``(C) sources and application of funds.
       ``(3) Financial management systems.--The Agency shall 
     implement and maintain financial management systems that--
       ``(A) comply substantially with Federal financial 
     management systems requirements and applicable Federal 
     accounting standards; and
       ``(B) use a general ledger system that accounts for 
     activity at the transaction level.
       ``(4) Assertion of internal controls.--The Director shall 
     provide to the Comptroller General of the United States an 
     assertion as to the effectiveness of the internal controls 
     that apply to financial reporting by the Agency, using the 
     standards established in section 3512(c) of title 31, United 
     States Code.
       ``(5) Rule of construction.--This subsection may not be 
     construed as implying any obligation on the part of the 
     Director to consult with or obtain the consent or approval of 
     the Director of the Office of Management and Budget with 
     respect to any report, plan, forecast, or other information 
     referred to in paragraph (1) or any jurisdiction or oversight 
     over the affairs or operations of the Agency.
       ``(h) Audit of Agency.--
       ``(1) In general.--The Comptroller General shall annually 
     audit the financial transactions of the Agency in accordance 
     with the United States generally accepted government auditing 
     standards as may be prescribed by the Comptroller General of 
     the United States. The audit shall be conducted at the place 
     or places where accounts of the Agency are normally kept. The 
     representatives of the Government Accountability Office shall 
     have access to the personnel and to all books, accounts, 
     documents, papers, records (including electronic records), 
     reports, files, and all other papers, automated data, things, 
     or property belonging to or under the control of or used or 
     employed by the Agency pertaining to its financial 
     transactions and necessary to facilitate the audit, and such 
     representatives shall be afforded full facilities for 
     verifying transactions with the balances or securities held 
     by depositories, fiscal agents, and custodians. All such

[[Page 15962]]

     books, accounts, documents, records, reports, files, papers, 
     and property of the Agency shall remain in possession and 
     custody of the Agency. The Comptroller General may obtain and 
     duplicate any such books, accounts, documents, records, 
     working papers, automated data and files, or other 
     information relevant to such audit without cost to the 
     Comptroller General and the Comptroller General's right of 
     access to such information shall be enforceable pursuant to 
     section 716(c) of title 31, United States Code.
       ``(2) Report.--The Comptroller General shall submit to the 
     Congress a report of each annual audit conducted under this 
     subsection. The report to the Congress shall set forth the 
     scope of the audit and shall include the statement of assets 
     and liabilities and surplus or deficit, the statement of 
     income and expenses, the statement of sources and application 
     of funds, and such comments and information as may be deemed 
     necessary to inform Congress of the financial operations and 
     condition of the Agency, together with such recommendations 
     with respect thereto as the Comptroller General may deem 
     advisable. A copy of each report shall be furnished to the 
     President and to the Agency at the time submitted to the 
     Congress.
       ``(3) Assistance and costs.--For the purpose of conducting 
     an audit under this subsection, the Comptroller General may, 
     in the discretion of the Comptroller General, employ by 
     contract, without regard to section 3709 of the Revised 
     Statutes of the United States (41 U.S.C. 5), professional 
     services of firms and organizations of certified public 
     accountants for temporary periods or for special purposes. 
     Upon the request of the Comptroller General, the Director of 
     the Agency shall transfer to the Government Accountability 
     Office from funds available, the amount requested by the 
     Comptroller General to cover the full costs of any audit and 
     report conducted by the Comptroller General. The Comptroller 
     General shall credit funds transferred to the account 
     established for salaries and expenses of the Government 
     Accountability Office, and such amount shall be available 
     upon receipt and without fiscal year limitation to cover the 
     full costs of the audit and report.''.

     SEC. 1107. REGULATIONS AND ORDERS.

       Section 1319G of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4526) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Authority.--The Director shall issue any regulations, 
     guidelines, or orders necessary to carry out the duties of 
     the Director under this title or the authorizing statutes, 
     and to ensure that the purposes of this title and the 
     authorizing statutes are accomplished.''; and
       (2) by striking subsection (c).

     SEC. 1108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

       The Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
     inserting after section 1313A, as added by this Act, the 
     following new section:

     ``SEC. 1313B. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

       ``(a) Standards.--The Director shall establish standards, 
     by regulation or guideline, for each regulated entity 
     relating to--
       ``(1) adequacy of internal controls and information systems 
     taking into account the nature and scale of business 
     operations;
       ``(2) independence and adequacy of internal audit systems;
       ``(3) management of interest rate risk exposure;
       ``(4) management of market risk, including standards that 
     provide for systems that accurately measure, monitor, and 
     control market risks and, as warranted, that establish 
     limitations on market risk;
       ``(5) adequacy and maintenance of liquidity and reserves;
       ``(6) management of asset and investment portfolio growth;
       ``(7) investments and acquisitions of assets by a regulated 
     entity, to ensure that they are consistent with the purposes 
     of this title and the authorizing statutes;
       ``(8) overall risk management processes, including adequacy 
     of oversight by senior management and the board of directors 
     and of processes and policies to identify, measure, monitor, 
     and control material risks, including reputational risks, and 
     for adequate, well-tested business resumption plans for all 
     major systems with remote site facilities to protect against 
     disruptive events;
       ``(9) management of credit and counterparty risk, including 
     systems to identify concentrations of credit risk and 
     prudential limits to restrict exposure of the regulated 
     entity to a single counterparty or groups of related 
     counterparties;
       ``(10) maintenance of adequate records, in accordance with 
     consistent accounting policies and practices that enable the 
     Director to evaluate the financial condition of the regulated 
     entity; and
       ``(11) such other operational and management standards as 
     the Director determines to be appropriate.
       ``(b) Failure To Meet Standards.--
       ``(1) Plan requirement.--
       ``(A) In general.--If the Director determines that a 
     regulated entity fails to meet any standard established under 
     subsection (a)--
       ``(i) if such standard is established by regulation, the 
     Director shall require the regulated entity to submit an 
     acceptable plan to the Director within the time allowed under 
     subparagraph (C); and
       ``(ii) if such standard is established by guideline, the 
     Director may require the regulated entity to submit a plan 
     described in clause (i).
       ``(B) Contents.--Any plan required under subparagraph (A) 
     shall specify the actions that the regulated entity will take 
     to correct the deficiency. If the regulated entity is 
     undercapitalized, the plan may be a part of the capital 
     restoration plan for the regulated entity under section 
     1369C.
       ``(C) Deadlines for submission and review.--The Director 
     shall by regulation establish deadlines that--
       ``(i) provide the regulated entities with reasonable time 
     to submit plans required under subparagraph (A), and 
     generally require a regulated entity to submit a plan not 
     later than 30 days after the Director determines that the 
     entity fails to meet any standard established under 
     subsection (a); and
       ``(ii) require the Director to act on plans expeditiously, 
     and generally not later than 30 days after the plan is 
     submitted.
       ``(2) Required order upon failure to submit or implement 
     plan.--If a regulated entity fails to submit an acceptable 
     plan within the time allowed under paragraph (1)(C), or fails 
     in any material respect to implement a plan accepted by the 
     Director, the following shall apply:
       ``(A) Required correction of deficiency.--The Director 
     shall, by order, require the regulated entity to correct the 
     deficiency.
       ``(B) Other authority.--The Director may, by order, take 
     one or more of the following actions until the deficiency is 
     corrected:
       ``(i) Prohibit the regulated entity from permitting its 
     average total assets (as such term is defined in section 
     1316(b)) during any calendar quarter to exceed its average 
     total assets during the preceding calendar quarter, or 
     restrict the rate at which the average total assets of the 
     entity may increase from one calendar quarter to another.
       ``(ii) Require the regulated entity--

       ``(I) in the case of an enterprise, to increase its ratio 
     of core capital to assets.
       ``(II) in the case of a Federal Home Loan Bank, to increase 
     its ratio of total capital (as such term is defined in 
     section 6(a)(5) of the Federal Home Loan Bank Act (12 U.S.C. 
     1426(a)(5)) to assets.

       ``(iii) Require the regulated entity to take any other 
     action that the Director determines will better carry out the 
     purposes of this section than any of the actions described in 
     this subparagraph.
       ``(3) Mandatory restrictions.--In complying with paragraph 
     (2), the Director shall take one or more of the actions 
     described in clauses (i) through (iii) of paragraph (2)(B) 
     if--
       ``(A) the Director determines that the regulated entity 
     fails to meet any standard prescribed under subsection (a);
       ``(B) the regulated entity has not corrected the 
     deficiency; and
       ``(C) during the 18-month period before the date on which 
     the regulated entity first failed to meet the standard, the 
     entity underwent extraordinary growth, as defined by the 
     Director.
       ``(c) Other Enforcement Authority Not Affected.--The 
     authority of the Director under this section is in addition 
     to any other authority of the Director.''.

     SEC. 1109. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND 
                   LIABILITIES.

       (a) In General.--Subtitle B of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4611 et seq.) is amended--
       (1) by striking the subtitle designation and heading and 
     inserting the following:

 ``Subtitle B--Required Capital Levels for Regulated Entities, Special 
      Enforcement Powers, and Reviews of Assets and Liabilities'';

     and
       (2) by adding at the end the following new section:

     ``SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES.

       ``(a) In General.--The Director shall, by regulation, 
     establish criteria governing the portfolio holdings of the 
     enterprises, to ensure that the holdings are backed by 
     sufficient capital and consistent with the mission and the 
     safe and sound operations of the enterprises. In establishing 
     such criteria, the Director shall consider the ability of the 
     enterprises to provide a liquid secondary market through 
     securitization activities, the portfolio holdings in relation 
     to the overall mortgage market, and adherence to the 
     standards specified in section 1313B.
       ``(b) Temporary Adjustments.--The Director may, by order, 
     make temporary adjustments to the established standards for 
     an enterprise or both enterprises, such as during times of 
     economic distress or market disruption.
       ``(c) Authority To Require Disposition or Acquisition.--The 
     Director shall monitor the portfolio of each enterprise. 
     Pursuant to subsection (a) and notwithstanding the capital 
     classifications of the enterprises, the Director may, by 
     order, require an enterprise,

[[Page 15963]]

     under such terms and conditions as the Director determines to 
     be appropriate, to dispose of or acquire any asset, if the 
     Director determines that such action is consistent with the 
     purposes of this Act or any of the authorizing statutes.''.
       (b) Regulations.--Not later than the expiration of the 180-
     day period beginning on the effective date of this Act, the 
     Director shall issue regulations pursuant to section 1369E(a) 
     of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (as added by subsection (a) of this 
     section) establishing the portfolio holdings standards under 
     such section.

     SEC. 1110. RISK-BASED CAPITAL REQUIREMENTS.

       (a) In General.--Section 1361 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4611) is amended to read as follows:

     ``SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED 
                   ENTITIES.

       ``(a) In General.--
       ``(1) Enterprises.--The Director shall, by regulation, 
     establish risk-based capital requirements for the enterprises 
     to ensure that the enterprises operate in a safe and sound 
     manner, maintaining sufficient capital and reserves to 
     support the risks that arise in the operations and management 
     of the enterprises.
       ``(2) Federal home loan banks.--The Director shall 
     establish risk-based capital standards under section 6 of the 
     Federal Home Loan Bank Act for the Federal Home Loan Banks.
       ``(b) No Limitation.--Nothing in this section shall limit 
     the authority of the Director to require other reports or 
     undertakings, or take other action, in furtherance of the 
     responsibilities of the Director under this Act.''.
       (b) Federal Home Loan Banks Risk-Based Capital.--Section 
     6(a)(3) of the Federal Home Loan Bank Act (12 U.S.C. 
     1426(a)(3)) is amended--
       (1) by striking subparagraph (A) and inserting the 
     following:
       ``(A) Risk-based capital standards.--The Director shall, by 
     regulation, establish risk-based capital standards for the 
     Federal Home Loan Banks to ensure that the Federal Home Loan 
     Banks operate in a safe and sound manner, with sufficient 
     permanent capital and reserves to support the risks that 
     arise in the operations and management of the Federal Home 
     Loans Banks.''; and
       (2) in subparagraph (B), by striking ``(A)(ii)'' and 
     inserting ``(A)''.

     SEC. 1111. MINIMUM CAPITAL LEVELS.

       Section 1362 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4612) is 
     amended--
       (1) in subsection (a), by striking ``In General'' and 
     inserting ``Enterprises''; and
       (2) by striking subsection (b) and inserting the following:
       ``(b) Federal Home Loan Banks.--For purposes of this 
     subtitle, the minimum capital level for each Federal Home 
     Loan Bank shall be the minimum capital required to be 
     maintained to comply with the leverage requirement for the 
     bank established under section 6(a)(2) of the Federal Home 
     Loan Bank Act (12 U.S.C. 1426(a)(2)).
       ``(c) Establishment of Revised Minimum Capital Levels.--
     Notwithstanding subsections (a) and (b) and notwithstanding 
     the capital classifications of the regulated entities, the 
     Director may, by regulations issued under section 1319G, 
     establish a minimum capital level for the enterprises, for 
     the Federal Home Loan Banks, or for both the enterprises and 
     the banks, that is higher than the level specified in 
     subsection (a) for the enterprises or the level specified in 
     subsection (b) for the Federal Home Loan Banks, to the extent 
     needed to ensure that the regulated entities operate in a 
     safe and sound manner.
       ``(d) Authority To Require Temporary Increase.--
       ``(1) In general.--Notwithstanding subsections (a) and (b) 
     and any minimum capital level established pursuant to 
     subsection (c), the Director may, by order, increase the 
     minimum capital level for a regulated entity on a temporary 
     basis, when the Director determines that such an increase is 
     necessary and consistent with the prudential regulation and 
     the safe and sound operations of a regulated entity.
       ``(2) Rescission.--The Director shall rescind any temporary 
     minimum capital level established under paragraph (1) when 
     the Director determines that the circumstances or facts no 
     longer justify the temporary minimum capital level.
       ``(3) Regulations required.--The Director shall issue 
     regulations establishing--
       ``(A) standards for the imposition of a temporary increase 
     in minimum capital under paragraph (1);
       ``(B) the standards and procedures that the Director will 
     use to make the determination referred to in paragraph (2); 
     and
       ``(C) a reasonable time frame for periodic review of any 
     temporary increase in minimum capital for the purpose of 
     making the determination referred to in paragraph (2).
       ``(e) Authority To Establish Additional Capital and Reserve 
     Requirements for Particular Purposes.--The Director may, at 
     any time by order or regulation, establish such capital or 
     reserve requirements with respect to any product or activity 
     of a regulated entity, as the Director considers appropriate 
     to ensure that the regulated entity operates in a safe and 
     sound manner, with sufficient capital and reserves to support 
     the risks that arise in the operations and management of the 
     regulated entity.
       ``(f) Periodic Review.--The Director shall periodically 
     review the amount of core capital maintained by the 
     enterprises, the amount of capital retained by the Federal 
     Home Loan Banks, and the minimum capital levels established 
     for such regulated entities pursuant to this section.''.

     SEC. 1112. REGISTRATION UNDER THE SECURITIES LAWS.

       The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
     is amended by adding at the end the following:

     ``SEC. 38. FEDERAL NATIONAL MORTGAGE ASSOCIATION, FEDERAL 
                   HOME LOAN MORTGAGE CORPORATION, FEDERAL HOME 
                   LOAN BANKS.

       ``(a) Federal National Mortgage Association and Federal 
     Home Loan Mortgage Corporation.--No class of equity 
     securities of the Federal National Mortgage Association or 
     the Federal Home Loan Mortgage Corporation shall be treated 
     as an exempted security for purposes of section 12, 13, 14, 
     or 16.
       ``(b) Federal Home Loan Banks.--
       ``(1) Registration.--Each Federal Home Loan Bank shall 
     register a class of its common stock under section 12(g), not 
     later than 120 days after the date of enactment of the 
     Federal Housing Finance Regulatory Reform Act of 2008, and 
     shall thereafter maintain such registration and be treated 
     for purposes of this title as an `issuer', the securities of 
     which are required to be registered under section 12, 
     regardless of the number of members holding such stock at any 
     given time.
       ``(2) Standards relating to audit committees.--Each Federal 
     Home Loan Bank shall comply with the rules issued by the 
     Commission under section 10A(m).
       ``(c) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Federal home loan bank; member.--The terms `Federal 
     Home Loan Bank' and `member', have the same meanings as in 
     section 2 of the Federal Home Loan Bank Act.
       ``(2) Federal national mortgage association.--The term 
     `Federal National Mortgage Association' means the corporation 
     created by the Federal National Mortgage Association Charter 
     Act.
       ``(3) Federal home loan mortgage corporation.--The term 
     `Federal Home Loan Mortgage Corporation' means the 
     corporation created by the Federal Home Loan Mortgage 
     Corporation Act.''.

     SEC. 1113. PROHIBITION AND WITHHOLDING OF EXECUTIVE 
                   COMPENSATION.

       (a) In General.--Section 1318 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4518) is amended--
       (1) in the section heading, by striking ``OF EXCESSIVE'' 
     and inserting ``AND WITHHOLDING OF EXECUTIVE'';
       (2) in subsection (a)--
       (A) by striking ``enterprise'' and inserting ``regulated 
     entity''; and
       (B) by striking ``enterprises'' and inserting ``regulated 
     entities'';
       (3) by redesignating subsection (b) as subsection (d); and
       (4) by inserting after subsection (a) the following:
       ``(b) Factors.--In making any determination under 
     subsection (a), the Director may take into consideration any 
     factors the Director considers relevant, including any 
     wrongdoing on the part of the executive officer, and such 
     wrongdoing shall include any fraudulent act or omission, 
     breach of trust or fiduciary duty, violation of law, rule, 
     regulation, order, or written agreement, and insider abuse 
     with respect to the regulated entity. The approval of an 
     agreement or contract pursuant to section 309(d)(3)(B) of the 
     Federal National Mortgage Association Charter Act (12 U.S.C. 
     1723a(d)(3)(B)) or section 303(h)(2) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1452(h)(2)) shall not 
     preclude the Director from making any subsequent 
     determination under subsection (a).
       ``(c) Withholding of Compensation.--In carrying out 
     subsection (a), the Director may require a regulated entity 
     to withhold any payment, transfer, or disbursement of 
     compensation to an executive officer, or to place such 
     compensation in an escrow account, during the review of the 
     reasonableness and comparability of compensation.''.
       (b) Conforming Amendments.--
       (1) Fannie mae.--Section 309(d) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723a(d)) is 
     amended by adding at the end the following new paragraph:
       ``(4) Notwithstanding any other provision of this section, 
     the corporation shall not transfer, disburse, or pay 
     compensation to any executive officer, or enter into an 
     agreement with such executive officer, without the approval 
     of the Director, for matters being reviewed under section 
     1318 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4518).''.
       (2) Freddie mac.--Section 303(h) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1452(h)) is amended by 
     adding at the end the following new paragraph:
       ``(4) Notwithstanding any other provision of this section, 
     the Corporation shall not transfer, disburse, or pay 
     compensation to

[[Page 15964]]

     any executive officer, or enter into an agreement with such 
     executive officer, without the approval of the Director, for 
     matters being reviewed under section 1318 of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4518).''.
       (3) Federal home loan banks.--Section 7 of the Federal Home 
     Loan Bank Act (12 U.S.C. 1427) is amended by adding at the 
     end the following new subsection:
       ``(l) Withholding of Compensation.--Notwithstanding any 
     other provision of this section, a Federal Home Loan Bank 
     shall not transfer, disburse, or pay compensation to any 
     executive officer, or enter into an agreement with such 
     executive officer, without the approval of the Director, for 
     matters being reviewed under section 1318 of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4518).''.

     SEC. 1114. LIMIT ON GOLDEN PARACHUTES.

       Section 1318 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4518) is amended 
     by adding at the end the following:
       ``(e) Authority To Regulate or Prohibit Certain Forms of 
     Benefits to Affiliated Parties.--
       ``(1) Golden parachutes and indemnification payments.--The 
     Director may prohibit or limit, by regulation or order, any 
     golden parachute payment or indemnification payment.
       ``(2) Factors to be taken into account.--The Director shall 
     prescribe, by regulation, the factors to be considered by the 
     Director in taking any action pursuant to paragraph (1), 
     which may include such factors as--
       ``(A) whether there is a reasonable basis to believe that 
     the affiliated party has committed any fraudulent act or 
     omission, breach of trust or fiduciary duty, or insider abuse 
     with regard to the regulated entity that has had a material 
     effect on the financial condition of the regulated entity;
       ``(B) whether there is a reasonable basis to believe that 
     the affiliated party is substantially responsible for the 
     insolvency of the regulated entity, the appointment of a 
     conservator or receiver for the regulated entity, or the 
     troubled condition of the regulated entity (as defined in 
     regulations prescribed by the Director);
       ``(C) whether there is a reasonable basis to believe that 
     the affiliated party has materially violated any applicable 
     provision of Federal or State law or regulation that has had 
     a material effect on the financial condition of the regulated 
     entity;
       ``(D) whether the affiliated party was in a position of 
     managerial or fiduciary responsibility; and
       ``(E) the length of time that the party was affiliated with 
     the regulated entity, and the degree to which--
       ``(i) the payment reasonably reflects compensation earned 
     over the period of employment; and
       ``(ii) the compensation involved represents a reasonable 
     payment for services rendered.
       ``(3) Certain payments prohibited.--No regulated entity may 
     prepay the salary or any liability or legal expense of any 
     affiliated party if such payment is made--
       ``(A) in contemplation of the insolvency of such regulated 
     entity, or after the commission of an act of insolvency; and
       ``(B) with a view to, or having the result of--
       ``(i) preventing the proper application of the assets of 
     the regulated entity to creditors; or
       ``(ii) preferring one creditor over another.
       ``(4) Golden parachute payment defined.--
       ``(A) In general.--For purposes of this subsection, the 
     term `golden parachute payment' means any payment (or any 
     agreement to make any payment) in the nature of compensation 
     by any regulated entity for the benefit of any affiliated 
     party pursuant to an obligation of such regulated entity 
     that--
       ``(i) is contingent on the termination of such party's 
     affiliation with the regulated entity; and
       ``(ii) is received on or after the date on which--

       ``(I) the regulated entity became insolvent;
       ``(II) any conservator or receiver is appointed for such 
     regulated entity; or
       ``(III) the Director determines that the regulated entity 
     is in a troubled condition (as defined in the regulations of 
     the Director).

       ``(B) Certain payments in contemplation of an event.--Any 
     payment which would be a golden parachute payment but for the 
     fact that such payment was made before the date referred to 
     in subparagraph (A)(ii) shall be treated as a golden 
     parachute payment if the payment was made in contemplation of 
     the occurrence of an event described in any subclause of such 
     subparagraph.
       ``(C) Certain payments not included.--For purposes of this 
     subsection, the term `golden parachute payment' shall not 
     include--
       ``(i) any payment made pursuant to a retirement plan which 
     is qualified (or is intended to be qualified) under section 
     401 of the Internal Revenue Code of 1986, or other 
     nondiscriminatory benefit plan;
       ``(ii) any payment made pursuant to a bona fide deferred 
     compensation plan or arrangement which the Director 
     determines, by regulation or order, to be permissible; or
       ``(iii) any payment made by reason of the death or 
     disability of an affiliated party.
       ``(5) Other definitions.--For purposes of this subsection, 
     the following definitions shall apply:
       ``(A) Indemnification payment.--Subject to paragraph (6), 
     the term `indemnification payment' means any payment (or any 
     agreement to make any payment) by any regulated entity for 
     the benefit of any person who is or was an affiliated party, 
     to pay or reimburse such person for any liability or legal 
     expense with regard to any administrative proceeding or civil 
     action instituted by the Agency which results in a final 
     order under which such person--
       ``(i) is assessed a civil money penalty;
       ``(ii) is removed or prohibited from participating in 
     conduct of the affairs of the regulated entity; or
       ``(iii) is required to take any affirmative action to 
     correct certain conditions resulting from violations or 
     practices, by order of the Director.
       ``(B) Liability or legal expense.--The term `liability or 
     legal expense' means--
       ``(i) any legal or other professional expense incurred in 
     connection with any claim, proceeding, or action;
       ``(ii) the amount of, and any cost incurred in connection 
     with, any settlement of any claim, proceeding, or action; and
       ``(iii) the amount of, and any cost incurred in connection 
     with, any judgment or penalty imposed with respect to any 
     claim, proceeding, or action.
       ``(C) Payment.--The term `payment' includes--
       ``(i) any direct or indirect transfer of any funds or any 
     asset; and
       ``(ii) any segregation of any funds or assets for the 
     purpose of making, or pursuant to an agreement to make, any 
     payment after the date on which such funds or assets are 
     segregated, without regard to whether the obligation to make 
     such payment is contingent on--

       ``(I) the determination, after such date, of the liability 
     for the payment of such amount; or
       ``(II) the liquidation, after such date, of the amount of 
     such payment.

       ``(6) Certain commercial insurance coverage not treated as 
     covered benefit payment.--No provision of this subsection 
     shall be construed as prohibiting any regulated entity from 
     purchasing any commercial insurance policy or fidelity bond, 
     except that, subject to any requirement described in 
     paragraph (5)(A)(iii), such insurance policy or bond shall 
     not cover any legal or liability expense of the regulated 
     entity which is described in paragraph (5)(A).''.

     SEC. 1115. REPORTING OF FRAUDULENT LOANS.

       Part 1 of subtitle C of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et 
     seq.), as amended by this Act, is amended by adding at the 
     end the following:

     ``SEC. 1379E. REPORTING OF FRAUDULENT LOANS.

       ``(a) Requirement to Report.--The Director shall require a 
     regulated entity to submit to the Director a timely report 
     upon discovery by the regulated entity that it has purchased 
     or sold a fraudulent loan or financial instrument, or 
     suspects a possible fraud relating to the purchase or sale of 
     any loan or financial instrument. The Director shall require 
     each regulated entity to establish and maintain procedures 
     designed to discover any such transactions.
       ``(b) Protection From Liability for Reports.--Any regulated 
     entity that, in good faith, makes a report pursuant to 
     subsection (a), and any entity-affiliated party, that, in 
     good faith, makes or requires another to make any such 
     report, shall not be liable to any person under any provision 
     of law or regulation, any constitution, law, or regulation of 
     any State or political subdivision of any State, or under any 
     contract or other legally enforceable agreement (including 
     any arbitration agreement) for such report or for any failure 
     to provide notice of such report to the person who is the 
     subject of such report or any other persons identified in the 
     report.''.

     SEC. 1116. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN 
                   AGENCY WORKFORCE.

       Section 1319A of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4520) is amended--
       (1) in the section heading, by striking ``EQUAL OPPORTUNITY 
     IN SOLICITATION OF CONTRACTS'' and inserting ``MINORITY AND 
     WOMEN INCLUSION; DIVERSITY REQUIREMENTS'';
       (2) in subsection (a), by striking ``(a) In General.--Each 
     enterprise'' and inserting ``(e) Outreach.--Each regulated 
     entity''; and
       (3) by striking subsection (b);
       (4) by inserting before subsection (e), as so redesignated 
     by paragraph (2) of this section, the following new 
     subsections:
       ``(a) Office of Minority and Women Inclusion.--Each 
     regulated entity shall establish an Office of Minority and 
     Women Inclusion, or designate an office of the entity, that 
     shall be responsible for carrying out this section and all 
     matters of the entity relating to diversity in management, 
     employment, and business activities in accordance with such 
     standards and requirements as the Director shall establish.

[[Page 15965]]

       ``(b) Inclusion in All Levels of Business Activities.--Each 
     regulated entity shall develop and implement standards and 
     procedures to ensure, to the maximum extent possible, the 
     inclusion and utilization of minorities (as such term is 
     defined in section 1204(c) of the Financial Institutions 
     Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 
     note)) and women, and minority- and women-owned businesses 
     (as such terms are defined in section 21A(r)(4) of the 
     Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)) (including 
     financial institutions, investment banking firms, mortgage 
     banking firms, asset management firms, broker-dealers, 
     financial services firms, underwriters, accountants, brokers, 
     investment consultants, and providers of legal services) in 
     all business and activities of the regulated entity at all 
     levels, including in procurement, insurance, and all types of 
     contracts (including contracts for the issuance or guarantee 
     of any debt, equity, or mortgage-related securities, the 
     management of its mortgage and securities portfolios, the 
     making of its equity investments, the purchase, sale and 
     servicing of single- and multi-family mortgage loans, and the 
     implementation of its affordable housing program and 
     initiatives). The processes established by each regulated 
     entity for review and evaluation for contract proposals and 
     to hire service providers shall include a component that 
     gives consideration to the diversity of the applicant.
       ``(c) Applicability.--This section shall apply to all 
     contracts of a regulated entity for services of any kind, 
     including services that require the services of investment 
     banking, asset management entities, broker-dealers, financial 
     services entities, underwriters, accountants, investment 
     consultants, and providers of legal services.
       ``(d) Inclusion in Annual Reports.--Each regulated entity 
     shall include, in the annual report submitted by the entity 
     to the Director pursuant to section 309(k) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 
     1723a(k)), section 307(c) of the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1456(c)), and section 20 of the 
     Federal Home Loan Bank Act (12 U.S.C. 1440), as applicable, 
     detailed information describing the actions taken by the 
     entity pursuant to this section, which shall include a 
     statement of the total amounts paid by the entity to third 
     party contractors since the last such report and the 
     percentage of such amounts paid to businesses described in 
     subsection (b) of this section.''; and
       (5) by adding at the end the following new subsection:
       ``(f) Diversity in Agency Workforce.--The Agency shall take 
     affirmative steps to seek diversity in its workforce at all 
     levels of the agency consistent with the demographic 
     diversity of the United States, which shall include--
       ``(1) heavily recruiting at historically Black colleges and 
     universities, Hispanic-serving institutions, women's 
     colleges, and colleges that typically serve majority minority 
     populations;
       ``(2) sponsoring and recruiting at job fairs in urban 
     communities, and placing employment advertisements in 
     newspapers and magazines oriented toward women and people of 
     color;
       ``(3) partnering with organizations that are focused on 
     developing opportunities for minorities and women to place 
     talented young minorities and women in industry internships, 
     summer employment, and full-time positions; and
       ``(4) where feasible, partnering with inner-city high 
     schools, girls' high schools, and high schools with majority 
     minority populations to establish or enhance financial 
     literacy programs and provide mentoring.''.

     SEC. 1117. TEMPORARY AUTHORITY FOR PURCHASE OF OBLIGATIONS OF 
                   REGULATED ENTITIES BY SECRETARY OF TREASURY.

       (a) Fannie Mae.--Section 304 of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1719) is amended 
     by adding at the end the following new subsection:
       ``(g) Temporary Authority of Treasury to Purchase 
     Obligations and Securities; Conditions.--
       ``(1) Authority to purchase.--
       ``(A) General authority.--In addition to the authority 
     under subsection (c) of this section, the Secretary of the 
     Treasury is authorized to purchase any obligations and other 
     securities issued by the corporation under any section of 
     this Act, on such terms and conditions as the Secretary may 
     determine and in such amounts as the Secretary may determine. 
     Nothing in this subsection requires the corporation to issue 
     obligations or securities to the Secretary without mutual 
     agreement between the Secretary and the corporation. Nothing 
     in this subsection permits or authorizes the Secretary, 
     without the agreement of the corporation, to engage in open 
     market purchases of the common securities of the corporation.
       ``(B) Emergency determination required.--In connection with 
     any use of this authority, the Secretary must determine that 
     such actions are necessary to--
       ``(i) provide stability to the financial markets;
       ``(ii) prevent disruptions in the availability of mortgage 
     finance; and
       ``(iii) protect the taxpayer.
       ``(C) Considerations.--To protect the taxpayers, the 
     Secretary of the Treasury shall take into consideration the 
     following in connection with exercising the authority 
     contained in this paragraph:
       ``(i) The need for preferences or priorities regarding 
     payments to the Government.
       ``(ii) Limits on maturity or disposition of obligations or 
     securities to be purchased.
       ``(iii) The corporation's plan for the orderly resumption 
     of private market funding or capital market access.
       ``(iv) The probability of the corporation fulfilling the 
     terms of any such obligation or other security, including 
     repayment.
       ``(v) The need to maintain the corporation's status as a 
     private shareholder-owned company.
       ``(vi) Restrictions on the use of corporation resources, 
     including limitations on the payment of dividends and 
     executive compensation and any such other terms and 
     conditions as appropriate for those purposes.
       ``(D) Reports to congress.--Upon exercise of this 
     authority, the Secretary shall report to the Committees on 
     the Budget, Financial Services, and Ways and Means of the 
     House of Representatives and the Committees on the Budget, 
     Finance, and Banking, Housing, and Urban Affairs of the 
     Senate as to the necessity for the purchase and the 
     determinations made by the Secretary under subparagraph (B) 
     and with respect to the considerations required under 
     subparagraph (C), and the size, terms, and probability of 
     repayment or fulfillment of other terms of such purchase.
       ``(2) Rights; sale of obligations and securities.--
       ``(A) Exercise of rights.--The Secretary of the Treasury 
     may, at any time, exercise any rights received in connection 
     with such purchases.
       ``(B) Sale of obligation and securities.--The Secretary of 
     the Treasury may, at any time, subject to the terms of the 
     security or otherwise upon terms and conditions and at prices 
     determined by the Secretary, sell any obligation or security 
     acquired by the Secretary under this subsection.
       ``(C) Application of sunset to purchased obligations or 
     securities.--The authority of the Secretary of the Treasury 
     to hold, exercise any rights received in connection with, or 
     sell, any obligations or securities purchased is not subject 
     to the provisions of paragraph (4).
       ``(3) Funding.--For the purpose of the authorities granted 
     in this subsection, the Secretary of the Treasury may use the 
     proceeds of the sale of any securities issued under chapter 
     31 of Title 31, and the purposes for which securities may be 
     issued under chapter 31 of Title 31 are extended to include 
     such purchases and the exercise of any rights in connection 
     with such purchases. Any funds expended for the purchase of, 
     or modifications to, obligations and securities, or the 
     exercise of any rights received in connection with such 
     purchases under this subsection shall be deemed appropriated 
     at the time of such purchase, modification, or exercise.
       ``(4) Termination of authority.--The authority under this 
     subsection (g), with the exception of paragraphs (2) and (3) 
     of this subsection, shall expire December 31, 2009.
       ``(5) Authority of the director with respect to executive 
     compensation.--The Director shall have the power to approve, 
     disapprove, or modify the executive compensation of the 
     corporation, as defined under Regulation S-K, 17 C.F.R. 
     229.''.
       (b) Freddie Mac.--Section 306 of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1455) is amended by 
     adding at the end the following new subsection:
       ``(l) Temporary Authority of Treasury to Purchase 
     Obligations and Securities; Conditions.--
       ``(1) Authority to purchase.--
       ``(A) General authority.--In addition to the authority 
     under subsection (c) of this section, the Secretary of the 
     Treasury is authorized to purchase any obligations and other 
     securities issued by the Corporation under any section of 
     this Act, on such terms and conditions as the Secretary may 
     determine and in such amounts as the Secretary may determine. 
     Nothing in this subsection requires the Corporation to issue 
     obligations or securities to the Secretary without mutual 
     agreement between the Secretary and the Corporation. Nothing 
     in this subsection permits or authorizes the Secretary, 
     without the agreement of the Corporation, to engage in open 
     market purchases of the common securities of the Corporation.
       ``(B) Emergency determination required.--In connection with 
     any use of this authority, the Secretary must determine that 
     such actions are necessary to--
       ``(i) provide stability to the financial markets;
       ``(ii) prevent disruptions in the availability of mortgage 
     finance; and
       ``(iii) protect the taxpayer.
       ``(C) Considerations.--To protect the taxpayers, the 
     Secretary of the Treasury shall take into consideration the 
     following in connection with exercising the authority 
     contained in this paragraph:
       ``(i) The need for preferences or priorities regarding 
     payments to the Government.
       ``(ii) Limits on maturity or disposition of obligations or 
     securities to be purchased.
       ``(iii) The Corporation's plan for the orderly resumption 
     of private market funding or capital market access.

[[Page 15966]]

       ``(iv) The probability of the Corporation fulfilling the 
     terms of any such obligation or other security, including 
     repayment.
       ``(v) The need to maintain the Corporation's status as a 
     private shareholder-owned company.
       ``(vi) Restrictions on the use of Corporation resources, 
     including limitations on the payment of dividends and 
     executive compensation and any such other terms and 
     conditions as appropriate for those purposes.
       ``(D) Reports to congress.--Upon exercise of this 
     authority, the Secretary shall report to the Committees on 
     the Budget, Financial Services, and Ways and Means of the 
     House of Representatives and the Committees on the Budget, 
     Finance, and Banking, Housing, and Urban Affairs of the 
     Senate as to the necessity for the purchase and the 
     determinations made by the Secretary under subparagraph (B) 
     and with respect to the considerations required under 
     subparagraph (C), and the size, terms, and probability of 
     repayment or fulfillment of other terms of such purchase.
       ``(2) Rights; sale of obligations and securities.--
       ``(A) Exercise of rights.--The Secretary of the Treasury 
     may, at any time, exercise any rights received in connection 
     with such purchases.
       ``(B) Sale of obligation and securities.--The Secretary of 
     the Treasury may, at any time, subject to the terms of the 
     security or otherwise upon terms and conditions and at prices 
     determined by the Secretary, sell any obligation or security 
     acquired by the Secretary under this subsection.
       ``(C) Application of sunset to purchased obligations or 
     securities.--The authority of the Secretary of the Treasury 
     to hold, exercise any rights received in connection with, or 
     sell, any obligations or securities purchased is not subject 
     to the provisions of paragraph (4).
       ``(3) Funding.--For the purpose of the authorities granted 
     in this subsection, the Secretary of the Treasury may use the 
     proceeds of the sale of any securities issued under chapter 
     31 of Title 31, and the purposes for which securities may be 
     issued under chapter 31 of Title 31 are extended to include 
     such purchases and the exercise of any rights in connection 
     with such purchases. Any funds expended for the purchase of, 
     or modifications to, obligations and securities, or the 
     exercise of any rights received in connection with such 
     purchases under this subsection shall be deemed appropriated 
     at the time of such purchase, modification, or exercise.
       ``(4) Termination of authority.--The authority under this 
     subsection (l), with the exception of paragraphs (2) and (3) 
     of this subsection, shall expire December 31, 2009.
       ``(5) Authority of the director with respect to executive 
     compensation.--The Director shall have the power to approve, 
     disapprove, or modify the executive compensation of the 
     Corporation, as defined under Regulation S-K, 17 C.F.R. 
     229.''.
       (c) Federal Home Loan Banks.--Section 11 of the Federal 
     Home Loan Bank Act (12 U.S.C. 1431) is amended by adding at 
     the end the following new subsection:
       ``(l) Temporary Authority of Treasury to Purchase 
     Obligations; Conditions.--
       ``(1) Authority to purchase.--
       ``(A) General authority.--In addition to the authority 
     under subsection (i) of this section, the Secretary of the 
     Treasury is authorized to purchase any obligations issued by 
     any Federal Home Loan Bank under any section of this Act, on 
     such terms and conditions as the Secretary may determine and 
     in such amounts as the Secretary may determine. Nothing in 
     this subsection requires a Federal Home Loan Bank to issue 
     obligations or securities to the Secretary without mutual 
     agreement between the Secretary and the Federal Home Loan 
     Bank. Nothing in this subsection permits or authorizes the 
     Secretary, without the agreement of the Federal Home Loan 
     Bank, to engage in open market purchases of the common 
     securities of any Federal Home Loan Bank.
       ``(B) Emergency determination required.--In connection with 
     any use of this authority, the Secretary must determine that 
     such actions are necessary to--
       ``(i) provide stability to the financial markets;
       ``(ii) prevent disruptions in the availability of mortgage 
     finance; and
       ``(iii) protect the taxpayer.
       ``(C) Considerations.--To protect the taxpayers, the 
     Secretary of the Treasury shall take into consideration the 
     following in connection with exercising the authority 
     contained in this paragraph:
       ``(i) The need for preferences or priorities regarding 
     payments to the Government.
       ``(ii) Limits on maturity or disposition of obligations or 
     securities to be purchased.
       ``(iii) The Federal Home Loan Bank's plan for the orderly 
     resumption of private market funding or capital market 
     access.
       ``(iv) The probability of the Federal Home Loan Bank 
     fulfilling the terms of any such obligation or other 
     security, including repayment.
       ``(v) The need to maintain the Federal Home Loan Bank's 
     status as a private shareholder-owned company.
       ``(vi) Restrictions on the use of Federal Home Loan Bank 
     resources, including limitations on the payment of dividends 
     and executive compensation and any such other terms and 
     conditions as appropriate for those purposes.
       ``(D) Reports to congress.--Upon exercise of this 
     authority, the Secretary shall report to the Committees on 
     the Budget, Financial Services, and Ways and Means of the 
     House of Representatives and the Committees on the Budget, 
     Finance, and Banking, Housing, and Urban Affairs of the 
     Senate as to the necessity for the purchase and the 
     determinations made by the Secretary under subparagraph (B) 
     and with respect to the considerations required under 
     subparagraph (C), and the size, terms, and probability of 
     repayment or fulfillment of other terms of such purchase.
       ``(2) Rights; sale of obligations and securities.--
       ``(A) Exercise of rights.--The Secretary of the Treasury 
     may, at any time, exercise any rights received in connection 
     with such purchases.
       ``(B) Sale of obligations.--The Secretary of the Treasury 
     may, at any time, subject to the terms of the security or 
     otherwise upon terms and conditions and at prices determined 
     by the Secretary, sell any obligation acquired by the 
     Secretary under this subsection.
       ``(C) Application of sunset to purchased obligations.--The 
     authority of the Secretary of the Treasury to hold, exercise 
     any rights received in connection with, or sell, any 
     obligations purchased is not subject to the provisions of 
     paragraph (4).
       ``(3) Funding.--For the purpose of the authorities granted 
     in this subsection, the Secretary of the Treasury may use the 
     proceeds of the sale of any securities issued under chapter 
     31 of Title 31, and the purposes for which securities may be 
     issued under chapter 31 of Title 31 are extended to include 
     such purchases and the exercise of any rights in connection 
     with such purchases. Any funds expended for the purchase of, 
     or modifications to, obligations and securities, or the 
     exercise of any rights received in connection with such 
     purchases under this subsection shall be deemed appropriated 
     at the time of such purchase, modification, or exercise.
       ``(4) Termination of authority.--The authority under this 
     subsection (l), with the exception of paragraphs (2) and (3) 
     of this subsection, shall expire December 31, 2009.
       ``(5) Authority of the director with respect to executive 
     compensation.--The Director shall have the power to approve, 
     disapprove, or modify the executive compensation of the 
     Federal Home Loan Bank, as defined under Regulation S-K, 17 
     C.F.R. 229.''.

     SEC. 1118. CONSULTATION BETWEEN THE DIRECTOR OF THE FEDERAL 
                   HOUSING FINANCE AGENCY AND THE BOARD OF 
                   GOVERNORS OF THE FEDERAL RESERVE SYSTEM TO 
                   ENSURE FINANCIAL MARKET STABILITY .

       Subsection (a) of section 1313 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4513), as amended by the preceding provisions of this 
     Act, is further amended by adding at the end the following 
     new paragraph:
       ``(3) Coordination with the chairman of the board of 
     governors of the federal reserve system.--
       ``(A) Consultation.-- The Director shall consult with, and 
     consider the views of, the Chairman of the Board of Governors 
     of the Federal Reserve System, with respect to the risks 
     posed by the regulated entities to the financial system, 
     prior to issuing any proposed or final regulations, orders, 
     and guidelines with respect to the exercise of the additional 
     authority provided in this Act regarding prudential 
     management and operations standards, safe and sound 
     operations of, and capital requirements and portfolio 
     standards applicable to the regulated entities (as such term 
     is defined in section 1303). The Director also shall consult 
     with the Chairman regarding any decision to place a regulated 
     entity into conservatorship or receivership.
       ``(B) Information sharing.--To facilitate the consultative 
     process, the Director shall share information with the Board 
     of Governors of the Federal Reserve System on a regular, 
     periodic basis as determined by the Director and the Board 
     regarding the capital, asset and liabilities, financial 
     condition, and risk management practices of the regulated 
     entities as well as any information related to financial 
     market stability.
       ``(C) Termination of consultation requirement.--The 
     requirement of the Director to consult with the Board of 
     Governors of the Federal Reserve System under this paragraph 
     shall expire at the conclusion of December 31, 2009.''.

             Subtitle B--Improvement of Mission Supervision

     SEC. 1121. TRANSFER OF PROGRAM APPROVAL AND HOUSING GOAL 
                   OVERSIGHT.

       Part 2 of subtitle A of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et 
     seq.) is amended--
       (1) by striking the heading for the part and inserting the 
     following:

          ``PART 2--ADDITIONAL AUTHORITIES OF THE DIRECTOR'';

       and
       (2) by striking sections 1321 and 1322.

[[Page 15967]]



     SEC. 1122. ASSUMPTION BY THE DIRECTOR OF CERTAIN OTHER HUD 
                   RESPONSIBILITIES.

       (a) In General.--Part 2 of subtitle A of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4541 et seq.) is amended--
       (1) by striking ``Secretary'' each place that term appears 
     and inserting ``Director'' in each of sections 1323, 1326, 
     1327, 1328, and 1336; and
       (2) by striking sections 1338 and 1349 (12 U.S.C. 4562 note 
     and 4589).
       (b) Retention of Fair Housing Responsibilities.--Section 
     1325 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4545) is amended in the 
     matter preceding paragraph (1), by inserting ``of Housing and 
     Urban Development'' after ``The Secretary''.

     SEC. 1123. REVIEW OF ENTERPRISE PRODUCTS.

       Part 2 of subtitle A of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et 
     seq.) is amended by inserting before section 1323 the 
     following:

     ``SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS.

       ``(a) In General.--The Director shall require each 
     enterprise to obtain the approval of the Director for any 
     product of the enterprise before initially offering the 
     product.
       ``(b) Standard for Approval.--In considering any request 
     for approval of a product pursuant to subsection (a), the 
     Director shall make a determination that--
       ``(1) in the case of a product of the Federal National 
     Mortgage Association, the product is authorized under 
     paragraph (2), (3), (4), or (5) of section 302(b) or section 
     304 of the Federal National Mortgage Association Charter Act 
     (12 U.S.C. 1717(b), 1719);
       ``(2) in the case of a product of the Federal Home Loan 
     Mortgage Corporation, the product is authorized under 
     paragraph (1), (4), or (5) of section 305(a) of the Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a));
       ``(3) the product is in the public interest; and
       ``(4) the product is consistent with the safety and 
     soundness of the enterprise or the mortgage finance system.
       ``(c) Procedure for Approval.--
       ``(1) Submission of request.--An enterprise shall submit to 
     the Director a written request for approval of a product that 
     describes the product in such form as prescribed by order or 
     regulation of the Director.
       ``(2) Request for public comment.--Immediately upon receipt 
     of a request for approval of a product, as required under 
     paragraph (1), the Director shall publish notice of such 
     request and of the period for public comment pursuant to 
     paragraph (3) regarding the product, and a description of the 
     product proposed by the request. The Director shall give 
     interested parties the opportunity to respond in writing to 
     the proposed product.
       ``(3) Public comment period.--During the 30-day period 
     beginning on the date of publication pursuant to paragraph 
     (2) of a request for approval of a product, the Director 
     shall receive public comments regarding the proposed product.
       ``(4) Offering of product.--
       ``(A) In general.--Not later than 30 days after the close 
     of the public comment period described in paragraph (3), the 
     Director shall approve or deny the product, specifying the 
     grounds for such decision in writing.
       ``(B) Failure to act.--If the Director fails to act within 
     the 30-day period described in subparagraph (A), then the 
     enterprise may offer the product.
       ``(C) Temporary approval.--The Director may, subject to the 
     rules of the Director, provide for temporary approval of the 
     offering of a product without a public comment period, if the 
     Director finds that the existence of exigent circumstances 
     makes such delay contrary to the public interest.
       ``(d) Conditional Approval.--If the Director approves the 
     offering of any product by an enterprise, the Director may 
     establish terms, conditions, or limitations with respect to 
     such product with which the enterprise must comply in order 
     to offer such product.
       ``(e) Exclusions.--
       ``(1) In general.--The requirements of subsections (a) 
     through (d) do not apply with respect to--
       ``(A) the automated loan underwriting system of an 
     enterprise in existence as of the date of enactment of the 
     Federal Housing Finance Regulatory Reform Act of 2008, 
     including any upgrade to the technology, operating system, or 
     software to operate the underwriting system;
       ``(B) any modification to the mortgage terms and conditions 
     or mortgage underwriting criteria relating to the mortgages 
     that are purchased or guaranteed by an enterprise, provided 
     that such modifications do not alter the underlying 
     transaction so as to include services or financing, other 
     than residential mortgage financing; or
       ``(C) any other activity that is substantially similar, as 
     determined by rule of the Director to--
       ``(i) the activities described in subparagraphs (A) and 
     (B); and
       ``(ii) other activities that have been approved by the 
     Director in accordance with this section.
       ``(2) Expedited review.--
       ``(A) Enterprise notice.--For any new activity that an 
     enterprise considers not to be a product, the enterprise 
     shall provide written notice to the Director of such 
     activity, and may not commence such activity until the date 
     of receipt of a notice under subparagraph (B) or the 
     expiration of the period described in subparagraph (C). The 
     Director shall establish, by regulation, the form and content 
     of such written notice.
       ``(B) Director determination.--Not later than 15 days after 
     the date of receipt of a notice under subparagraph (A), the 
     Director shall determine whether such activity is a product 
     subject to approval under this section. The Director shall, 
     immediately upon so determining, notify the enterprise.
       ``(C) Failure to act.--If the Director fails to determine 
     whether such activity is a product within the 15-day period 
     described in subparagraph (B), the enterprise may commence 
     the new activity in accordance with subparagraph (A).
       ``(f) No Limitation.--Nothing in this section may be 
     construed to restrict--
       ``(1) the safety and soundness authority of the Director 
     over all new and existing products or activities; or
       ``(2) the authority of the Director to review all new and 
     existing products or activities to determine that such 
     products or activities are consistent with the statutory 
     mission of an enterprise.''.

     SEC. 1124. CONFORMING LOAN LIMITS.

       (a) Fannie Mae.--
       (1) General limit.--Section 302(b)(2) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 
     1717(b)(2)) is amended by striking the 7th and 8th sentences 
     and inserting the following new sentences: ``Such limitations 
     shall not exceed $417,000 for a mortgage secured by a single-
     family residence, $533,850 for a mortgage secured by a 2-
     family residence, $645,300 for a mortgage secured by a 3-
     family residence, and $801,950 for a mortgage secured by a 4-
     family residence, except that such maximum limitations shall 
     be adjusted effective January 1 of each year beginning after 
     the effective date of the Federal Housing Finance Regulatory 
     Reform Act of 2008, subject to the limitations in this 
     paragraph. Each adjustment shall be made by adding to each 
     such amount (as it may have been previously adjusted) a 
     percentage thereof equal to the percentage increase, during 
     the most recent 12-month or 4-quarter period ending before 
     the time of determining such annual adjustment, in the 
     housing price index maintained by the Director of the Federal 
     Housing Finance Agency (pursuant to section 1322 of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4541)). If the change in such house 
     price index during the most recent 12-month or 4-quarter 
     period ending before the time of determining such annual 
     adjustment is a decrease, then no adjustment shall be made 
     for the next year, and the next adjustment shall take into 
     account prior declines in the house price index, so that any 
     adjustment shall reflect the net change in the house price 
     index since the last adjustment. Declines in the house price 
     index shall be accumulated and then reduce increases until 
     subsequent increases exceed prior declines.''.
       (2) High-cost area limit.--Section 302(b)(2) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 
     1717(b)(2)) is amended by adding after the period at the end 
     the following: ``Such foregoing limitations shall also be 
     increased, with respect to properties of a particular size 
     located in any area for which 115 percent of the median house 
     price for such size residence exceeds the foregoing 
     limitation for such size residence, to the lesser of 150 
     percent of such limitation for such size residence or the 
     amount that is equal to 115 percent of the median house price 
     in such area for such size residence.''.
       (3) Effective date.--The amendments made by paragraphs (1) 
     and (2) of this subsection shall take effect upon the 
     expiration of the date described in section 201(a) of the 
     Economic Stimulus Act of 2008 (Public Law 110-185).
       (b) Freddie Mac.--
       (1) General limit.--Section 305(a)(2) of the Federal Home 
     Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is 
     amended by striking the 6th and 7th sentences and inserting 
     the following new sentences: ``Such limitations shall not 
     exceed $417,000 for a mortgage secured by a single-family 
     residence, $533,850 for a mortgage secured by a 2-family 
     residence, $645,300 for a mortgage secured by a 3-family 
     residence, and $801,950 for a mortgage secured by a 4-family 
     residence, except that such maximum limitations shall be 
     adjusted effective January 1 of each year beginning after the 
     effective date of the Federal Housing Finance Regulatory 
     Reform Act of 2008, subject to the limitations in this 
     paragraph. Each adjustment shall be made by adding to each 
     such amount (as it may have been previously adjusted) a 
     percentage thereof equal to the percentage increase, during 
     the most recent 12-month or 4-quarter period ending before 
     the time of determining such annual adjustment, in the 
     housing price index maintained by the Director of the Federal 
     Housing Finance Agency (pursuant to section 1322 of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C.

[[Page 15968]]

     4541)). If the change in such house price index during the 
     most recent 12-month or 4-quarter period ending before the 
     time of determining such annual adjustment is a decrease, 
     then no adjustment shall be made for the next year, and the 
     next adjustment shall take into account prior declines in the 
     house price index, so that any adjustment shall reflect the 
     net change in the house price index since the last 
     adjustment. Declines in the house price index shall be 
     accumulated and then reduce increases until subsequent 
     increases exceed prior declines.''.
       (2) High-cost area limit.--Section 305(a)(2) of the Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is 
     amended by adding after the period at the end the following: 
     ``Such foregoing limitations shall also be increased, with 
     respect to properties of a particular size located in any 
     area for which 115 percent of the median house price for such 
     size residence exceeds the foregoing limitation for such size 
     residence, to the lesser of 150 percent of such limitation 
     for such size residence or the amount that is equal to 115 
     percent of the median house price in such area for such size 
     residence.''.
       (3) Effective date.--The amendments made by paragraphs (1) 
     and (2) of this subsection shall take effect upon the 
     expiration of the date described in section 201(a) of the 
     Economic Stimulus Act of 2008 (Public Law 110-185).
       (c) Sense of Congress.--It is the sense of the Congress 
     that the securitization of mortgages by the Federal National 
     Mortgage Association and the Federal Home Loan Mortgage 
     Corporation plays an important role in providing liquidity to 
     the United States housing markets. Therefore, the Congress 
     encourages the Federal National Mortgage Association and the 
     Federal Home Loan Mortgage Corporation to securitize 
     mortgages acquired under the increased conforming loan limits 
     established under this Act.
       (d) Housing Price Index.--Part 2 of subtitle A of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4541 et seq.) is amended by inserting 
     after section 1321 (as added by section 1123 of this Act) the 
     following new section:

     ``SEC. 1322. HOUSING PRICE INDEX.

       ``The Director shall establish and maintain a method of 
     assessing the national average 1-family house price for use 
     for adjusting the conforming loan limitations of the 
     enterprises. In establishing such method, the Director shall 
     take into consideration the monthly survey of all major 
     lenders conducted by the Federal Housing Finance Agency to 
     determine the national average 1-family house price, the 
     House Price Index maintained by the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development before the effective date of the Federal Housing 
     Finance Regulatory Reform Act of 2008, any appropriate house 
     price indexes of the Bureau of the Census of the Department 
     of Commerce, and any other indexes or measures that the 
     Director considers appropriate.''.

     SEC. 1125. ANNUAL HOUSING REPORT.

       (a) Repeal.--Section 1324 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4544) is hereby repealed.
       (b) Annual Housing Report.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 is amended by 
     inserting after section 1323 the following:

     ``SEC. 1324. ANNUAL HOUSING REPORT.

       ``(a) In General.--After reviewing and analyzing the 
     reports submitted under section 309(n) of the Federal 
     National Mortgage Association Charter Act and section 307(f) 
     of the Federal Home Loan Mortgage Corporation Act, the 
     Director shall submit a report, not later than October 30 of 
     each year, to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives, on the activities of each 
     enterprise.
       ``(b) Contents.--The report required under subsection (a) 
     shall--
       ``(1) discuss--
       ``(A) the extent to and manner in which--
       ``(i) each enterprise is achieving the annual housing goals 
     established under subpart B;
       ``(ii) each enterprise is complying with its duty to serve 
     underserved markets, as established under section 1335;
       ``(iii) each enterprise is complying with section 1337;
       ``(iv) each enterprise received credit towards achieving 
     each of its goals resulting from a transaction or activity 
     pursuant to section 1331(b)(2); and
       ``(v) each enterprise is achieving the purposes of the 
     enterprise established by law; and
       ``(B) the actions that each enterprise could undertake to 
     promote and expand the purposes of the enterprise;
       ``(2) aggregate and analyze relevant data on income to 
     assess the compliance of each enterprise with the housing 
     goals established under subpart B;
       ``(3) aggregate and analyze data on income, race, and 
     gender by census tract and other relevant classifications, 
     and compare such data with larger demographic, housing, and 
     economic trends;
       ``(4) identify the extent to which each enterprise is 
     involved in mortgage purchases and secondary market 
     activities involving subprime and nontraditional loans;
       ``(5) compare the characteristics of subprime and 
     nontraditional loans both purchased and securitized by each 
     enterprise to other loans purchased and securitized by each 
     enterprise; and
       ``(6) compare the characteristics of high-cost loans 
     purchased and securitized, where such securities are not held 
     on portfolio to loans purchased and securitized, where such 
     securities are either retained on portfolio or repurchased by 
     the enterprise, including such characteristics as--
       ``(A) the purchase price of the property that secures the 
     mortgage;
       ``(B) the loan-to-value ratio of the mortgage, which shall 
     reflect any secondary liens on the relevant property;
       ``(C) the terms of the mortgage;
       ``(D) the creditworthiness of the borrower; and
       ``(E) any other relevant data, as determined by the 
     Director.
       ``(c) Data Collection and Reporting.--
       ``(1) In general.--To assist the Director in analyzing the 
     matters described in subsection (b), the Director shall 
     conduct, on a monthly basis, a survey of mortgage markets in 
     accordance with this subsection.
       ``(2) Data points.--Each monthly survey conducted by the 
     Director under paragraph (1) shall collect data on--
       ``(A) the characteristics of individual mortgages that are 
     eligible for purchase by the enterprises and the 
     characteristics of individual mortgages that are not eligible 
     for purchase by the enterprises including, in both cases, 
     information concerning--
       ``(i) the price of the house that secures the mortgage;
       ``(ii) the loan-to-value ratio of the mortgage, which shall 
     reflect any secondary liens on the relevant property;
       ``(iii) the terms of the mortgage;
       ``(iv) the creditworthiness of the borrower or borrowers; 
     and
       ``(v) whether the mortgage, in the case of a conforming 
     mortgage, was purchased by an enterprise;
       ``(B) the characteristics of individual subprime and 
     nontraditional mortgages that are eligible for purchase by 
     the enterprises and the characteristics of borrowers under 
     such mortgages, including the creditworthiness of such 
     borrowers and determination whether such borrowers would 
     qualify for prime lending; and
       ``(C) such other matters as the Director determines to be 
     appropriate.
       ``(3) Public availability.--The Director shall make any 
     data collected by the Director in connection with the conduct 
     of a monthly survey available to the public in a timely 
     manner, provided that the Director may modify the data 
     released to the public to ensure that the data--
       ``(A) is not released in an identifiable form; and
       ``(B) is not otherwise obtainable from other publicly 
     available data sets.
       ``(4) Definition.--For purposes of this subsection, the 
     term `identifiable form' means any representation of 
     information that permits the identity of a borrower to which 
     the information relates to be reasonably inferred by either 
     direct or indirect means.''.

     SEC. 1126. PUBLIC USE DATABASE.

       Section 1323 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (42 U.S.C. 4543) is 
     amended--
       (1) in subsection (a)--
       (A) by striking ``(a) In General.--The Secretary'' and 
     inserting the following:
       ``(a) Availability.--
       ``(1) In general.--The Director''; and
       (B) by adding at the end the following new paragraph:
       ``(2) Census tract level reporting.--Such data shall 
     include the data elements required to be reported under the 
     Home Mortgage Disclosure Act of 1975, at the census tract 
     level.'';
       (2) in subsection (b)(2), by inserting before the period at 
     the end the following: ``or with subsection (a)(2)''; and
       (3) by adding at the end the following new subsection:
       ``(d) Timing.--Data submitted under this section by an 
     enterprise in connection with a provision referred to in 
     subsection (a) shall be made publicly available in accordance 
     with this section not later than September 30 of the year 
     following the year to which the data relates.''.

     SEC. 1127. REPORTING OF MORTGAGE DATA.

       Section 1326 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4546) is 
     amended--
       (1) in subsection (a), by striking ``The Director'' and 
     inserting ``Subject to subsection (d), the Director''; and
       (2) by adding at the end the following:
       ``(d) Mortgage Information.--Subject to privacy 
     considerations, as described in section 304(j) of the Home 
     Mortgage Disclosure Act of 1975 (12 U.S.C. 2803(j)), the 
     Director shall, by regulation or order, provide that certain 
     information relating to single family mortgage data of the 
     enterprises shall be disclosed to the public, in order to 
     make available to the public--
       ``(1) the same data from the enterprises that is required 
     of insured depository institutions under the Home Mortgage 
     Disclosure Act of 1975; and

[[Page 15969]]

       ``(2) information collected by the Director under section 
     1324(b)(6).''.

     SEC. 1128. REVISION OF HOUSING GOALS.

       (a) Repeal.--Sections 1331 through 1334 of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4561 through 4564) are hereby repealed.
       (b) Housing Goals.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 is amended by 
     inserting before section 1335 the following:

     ``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

       ``(a) In General.--The Director shall, by regulation, 
     establish effective for 2010 and each year thereafter, annual 
     housing goals, with respect to the mortgage purchases by the 
     enterprises, as follows:
       ``(1) Single-family housing goals.--Four single-family 
     housing goals under section 1332.
       ``(2) Multifamily special affordable housing goal.--One 
     multifamily special affordable housing goal under section 
     1333.
       ``(b) Timing.--The Director shall, by regulation, establish 
     an annual deadline by which the Director shall establish the 
     annual housing goals under this subpart for each year, taking 
     into consideration the need for the enterprises to reasonably 
     and sufficiently plan their operations and activities in 
     advance, including operations and activities necessary to 
     meet such annual goals.
       ``(c) Transition.--The annual housing goals effective for 
     2008 pursuant to this subpart, as in effect before the 
     enactment of the Federal Housing Finance Regulatory Reform 
     Act of 2008, shall remain in effect for 2009, except that not 
     later than the expiration of the 270-day period beginning on 
     the date of the enactment of such Act, the Director shall 
     review such goals applicable for 2009 to determine the 
     feasibility of such goals given the market conditions current 
     at such time and, after seeking public comment for a period 
     not to exceed 30 days, may make appropriate adjustments 
     consistent with such market conditions.
       ``(d) Eliminating Interest Rate Disparities.--
       ``(1) In general.--Upon request by the Director, an 
     enterprise shall provide to the Director, in a form 
     determined by the Director, data the Director may review to 
     determine whether there exist disparities in interest rates 
     charged on mortgages to borrowers who are minorities as 
     compared with comparable mortgages to borrowers of similar 
     creditworthiness who are not minorities.
       ``(2) Remedial actions upon preliminary finding.--Upon a 
     preliminary finding by the Director that a pattern of 
     disparities in interest rates with respect to any lender or 
     lenders exists pursuant to the data provided by an enterprise 
     in paragraph (1), the Director shall--
       ``(A) refer the preliminary finding to the appropriate 
     regulatory or enforcement agency for further review; and
       ``(B) require the enterprise to submit additional data with 
     respect to any lender or lenders, as appropriate and to the 
     extent practicable, to the Director who shall submit any such 
     additional data to the regulatory or enforcement agency for 
     appropriate action.
       ``(3) Annual report to congress.--The Director shall submit 
     to the Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate a report describing the actions 
     taken, and being taken, by the Director to carry out this 
     subsection. No such report shall identify any lender or 
     lenders who have not been found to have engaged in 
     discriminatory lending practices pursuant to a final 
     adjudication on the record, and after opportunity for an 
     administrative hearing, in accordance with subchapter II of 
     chapter 5 of title 5, United States Code.
       ``(4) Protection of identity of individuals.--In carrying 
     out this subsection, the Director shall ensure that no 
     property-related or financial information that would enable a 
     borrower to be identified shall be made public.

     ``SEC. 1332. SINGLE-FAMILY HOUSING GOALS.

       ``(a) In General.--The Director shall, by regulation, 
     establish annual goals for the purchase by each enterprise of 
     the following types of mortgages for the following categories 
     of families:
       ``(1) Purchase-money mortgages.--A goal for purchase of 
     conventional, conforming, single-family, purchase money 
     mortgages financing owner-occupied housing for each of the 
     following categories of families:
       ``(A) Low-income families.
       ``(B) Families that reside in low-income areas.
       ``(C) Very low-income families.
       ``(2) Refinancing mortgages.--A goal for purchase of 
     conventional, conforming mortgages on owner-occupied, single-
     family housing for low-income families that are given to pay 
     off or prepay an existing loan secured by the same property.
       ``(b) Goals as a Percentage of Total Mortgage Purchases.--
     The goals established under paragraphs (1) and (2) of 
     subsection (a) shall be established as a percentage of the 
     total number of conventional, conforming, single-family, 
     owner-occupied, purchase money mortgages purchased by the 
     enterprise, or as percentage of the total number of 
     conventional, single-family, owner-occupied refinance 
     mortgages purchased by the enterprise, as applicable, that 
     are mortgages for the types of families specified in 
     paragraphs (1) and (2) of subsection (a).
       ``(c) Single-Family, Owner-Occupied Rental Housing Units.--
     The Director shall require each enterprise to report the 
     number of rental housing units affordable to low-income 
     families each year which are contained in mortgages purchased 
     by the enterprise financing 2- to 4-unit single-family, 
     owner-occupied properties and may, by regulation, establish 
     additional requirements relating to such units.
       ``(d) Determination of Compliance.--
       ``(1) In general.--The Director shall determine, for each 
     year that the housing goals under this section are in effect 
     pursuant to section 1331(a), whether each enterprise has 
     complied with each such goal established under subsection (a) 
     of this section and any additional requirements which may be 
     established under subsection (c) of this section.
       ``(2) Purchase-money mortgage goals.--An enterprise shall 
     be considered to be in compliance with a housing goal under 
     subparagraph (A), (B), or (C) of subsection (a)(1) for a year 
     only if, for the type of family described in such 
     subparagraph, the percentage of the number of conventional, 
     conforming, single-family, owner-occupied, purchase money 
     mortgages purchased by the enterprise in such year that serve 
     such families, meets or exceeds the target for the year for 
     such type of family that is established under subsection (e).
       ``(3) Refinance goal.--An enterprise shall be considered to 
     be in compliance with the refinance goal under subsection 
     (a)(2) for a year only if the percentage of the number of 
     conventional, conforming, single-family, owner-occupied 
     refinance mortgages purchased by the enterprise in such year 
     that serve low-income families meets or exceeds the target 
     for the year that is established under subsection (e).
       ``(e) Annual Targets.--
       ``(1) In general.--The Director shall, by regulation, 
     establish annual targets for each goal and subgoal under this 
     section, provided that the Director shall not set prospective 
     targets longer than three years. In establishing such 
     targets, the Director shall not consider segments of the 
     market determined to be unacceptable or contrary to good 
     lending practices, inconsistent with safety and soundness, or 
     unauthorized for purchase by the enterprises.
       ``(2) Goals targets.--
       ``(A) Calculation.--The Director shall calculate, for each 
     of the types of families described in subsection (a), the 
     percentage, for each of the three years that most recently 
     precede such year and for which information under the Home 
     Mortgage Disclosure Act of 1975 is publicly available--
       ``(i) of the number of conventional, conforming, single-
     family, owner-occupied purchase money mortgages originated in 
     such year that serve such type of family, or
       ``(ii) the number of conventional, conforming, single-
     family, owner-occupied refinance mortgages originated in such 
     year that serve low-income families,

     as applicable, as determined by the Director using the 
     information obtained and determined pursuant to paragraphs 
     (4) and (5).
       ``(B) Establishment of goal targets.--The Director shall, 
     by regulation, establish targets for each of the goal 
     categories, taking into consideration the calculations under 
     subparagraph (A) and the following factors:
       ``(i) National housing needs.
       ``(ii) Economic, housing, and demographic conditions, 
     including expected market developments.
       ``(iii) The performance and effort of the enterprises 
     toward achieving the housing goals under this section in 
     previous years.
       ``(iv) The ability of the enterprise to lead the industry 
     in making mortgage credit available.
       ``(v) Such other reliable mortgage data as may be 
     available.
       ``(vi) The size of the purchase money conventional mortgage 
     market, or refinance conventional mortgage market, as 
     applicable, serving each of the types of families described 
     in subsection (a), relative to the size of the overall 
     purchase money mortgage market or the overall refinance 
     mortgage market, respectively.
       ``(vii) The need to maintain the sound financial condition 
     of the enterprises.
       ``(3) Authority to adjust targets.--The Director may, by 
     regulation, adjust the percentage targets previously 
     established by regulation pursuant to paragraph (2)(B) for 
     any year, to reflect subsequent available data and market 
     developments.
       ``(4) HMDA information.--The Director shall annually obtain 
     information submitted in compliance with the Home Mortgage 
     Disclosure Act of 1975 regarding conventional, conforming, 
     single-family, owner-occupied, purchase money and refinance 
     mortgages originated and purchased for the previous year.
       ``(5) Conforming mortgages.--In determining whether a 
     mortgage is a conforming mortgage for purposes of this 
     paragraph, the Director shall consider the original principal 
     balance of the mortgage loan to be the principal balance as 
     reported in the information referred to in paragraph (4), as 
     rounded to the nearest thousand dollars.

[[Page 15970]]

       ``(f) Notice of Determination and Enterprise Comment.--
       ``(1) Notice.--Within 30 days of making a determination 
     under subsection (d) regarding compliance of an enterprise 
     for a year with a housing goal established under this section 
     and before any public disclosure thereof, the Director shall 
     provide notice of the determination to the enterprise, which 
     shall include an analysis and comparison, by the Director, of 
     the performance of the enterprise for the year and the 
     targets for the year under subsection (e).
       ``(2) Comment period.--The Director shall provide each 
     enterprise an opportunity to comment on the determination 
     during the 30-day period beginning upon receipt by the 
     enterprise of the notice.
       ``(g) Use of Borrower Income.--In monitoring the 
     performance of each enterprise pursuant to the housing goals 
     under this section and evaluating such performance (for 
     purposes of section 1336), the Director shall consider a 
     mortgagor's income to be such income at the time of 
     origination of the mortgage.
       ``(h) Consideration of Properties With Rental Units.--
     Mortgages financing two- to four-unit owner-occupied 
     properties shall count toward the achievement of the single-
     family housing goals under this section, if such properties 
     otherwise meet the requirements under this section, 
     notwithstanding the use of one or more units for rental 
     purposes.
       ``(i) Goals Credit.--The Director shall determine whether 
     an enterprise shall receive full, partial, or no credit for a 
     transaction toward achievement of any of the housing goals 
     established pursuant to section 1332 and 1333. In making any 
     such determination, the Director shall consider whether a 
     transaction or activity of an enterprise is substantially 
     equivalent to a mortgage purchase and either (1) creates a 
     new market, or (2) adds liquidity to an existing market. No 
     credit toward the achievement of the housing goals and 
     subgoals established under this section may be given to the 
     purchase of mortgages, including any transaction or activity 
     of an enterprise determined to be substantially equivalent to 
     a mortgage purchase, that is determined to be unacceptable or 
     contrary to good lending practices, inconsistent with safety 
     and soundness, or unauthorized for purchase by the 
     enterprises, pursuant to regulations issued by the Director.

     ``SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.

       ``(a) Establishment of Goal.--
       ``(1) In general.--The Director shall, by regulation, 
     establish a single annual goal, by either unit or dollar 
     volume, of purchases by each enterprise of mortgages on 
     multifamily housing that finance dwelling units affordable to 
     low-income families.
       ``(2) Additional requirements for units affordable to very 
     low-income families.--When establishing the goal under this 
     section, the Director shall establish additional requirements 
     for the purchase by each enterprise of mortgages on 
     multifamily housing that finance dwelling units affordable to 
     very low-income families.
       ``(3) Reporting on smaller properties.--The Director shall 
     require each enterprise to report on the purchase by each 
     enterprise of multifamily housing of a smaller or limited 
     size that is affordable to low-income families, which may be 
     based on multifamily projects of 5 to 50 units (as such 
     numbers may be adjusted by the Director) or on mortgages of 
     up to $5,000,000 (as such amount may be adjusted by the 
     Director), and may, by regulation, establish such aditional 
     requirements related to such units.
       ``(4) Factors.--In establishing the goal and additional 
     requirements under this section, the Director shall not 
     consider segments of the market determined to be inconsistent 
     with safety and soundness or unauthorized for purchase by the 
     enterprises, and shall take into consideration--
       ``(A) national multifamily mortgage credit needs and the 
     ability of the enterprise to provide additional liquidity and 
     stability for the multifamily mortgage market;
       ``(B) the performance and effort of the enterprise in 
     making mortgage credit available for multifamily housing in 
     previous years;
       ``(C) the size of the multifamily mortgage market for 
     housing affordable to low-income and very low-income 
     families, including the size of the multifamily markets for 
     housing of a smaller or limited size;
       ``(D) the ability of the enterprise to lead the market in 
     making multifamily mortgage credit available, especially for 
     multifamily housing described in paragraphs (1) and (2);
       ``(E) the availability of public subsidies; and
       ``(F) the need to maintain the sound financial condition of 
     the enterprise.
       ``(b) Units Financed by Housing Finance Agency Bonds.--The 
     Director shall give full credit toward the achievement of the 
     multifamily special affordable housing goal under this 
     section (for purposes of section 1336) to dwelling units in 
     multifamily housing that otherwise qualifies under such goal 
     and that is financed by tax-exempt or taxable bonds issued by 
     a State or local housing finance agency, if such bonds, in 
     whole or in part--
       ``(1) are secured by a guarantee of the enterprise; or
       ``(2) are purchased by the enterprise, except that the 
     Director may give less than full credit for purchases of 
     investment grade bonds, to the extent that such purchases do 
     not provide a new market or add liquidity to an existing 
     market.
       ``(c) Measurement of Performance.--The Director shall 
     monitor the performance of each enterprise in meeting the 
     goals established under this section and shall evaluate such 
     performance (for purposes of section 1336) based on whether 
     the rent levels are affordable. A rent level shall be 
     considered to be affordable for purposes of this subsection 
     for low-income families if it does not exceed 30 percent of 
     the maximum income level of such income category, with 
     appropriate adjustments for unit size as measured by the 
     number of bedrooms.
       ``(d) Determination of Compliance.--The Director shall 
     determine, for each year that the housing goal under this 
     section is in effect pursuant to section 1331(a), whether 
     each enterprise has complied with such goal and the 
     additional requirements under subsection (a)(2).

     ``SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.

       ``(a) Authority.--An enterprise may petition the Director 
     in writing at any time during a year to reduce the level of 
     any goal or subgoal for such year established pursuant to 
     this subpart.
       ``(b) Standard for Reduction.--The Director may reduce the 
     level for a goal or subgoal pursuant to such a petition only 
     if--
       ``(1) market and economic conditions or the financial 
     condition of the enterprise require such action; or
       ``(2) efforts to meet the goal or subgoal would result in 
     the constraint of liquidity, over-investment in certain 
     market segments, or other consequences contrary to the intent 
     of this subpart, or section 301(3) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1716(3)) or 
     section 301(b)(3) of the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1451 note), as applicable.
       ``(c) Determination.--The Director shall, promptly upon 
     receipt of a petition regarding a reduction, seek public 
     comment on the reduction for a period of 30 days. The 
     Director shall make a determination regarding any proposed 
     reduction within 30 days after the expiration of such public 
     comment period. The Director may extend such determination 
     period for a single additional 15-day period, but only if the 
     Director requests additional information from the 
     enterprise.''.
       (c) Conforming Amendments.--The Housing and Community 
     Development Act of 1992 is amended--
       (1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter 
     preceding paragraph (1), by striking ``low- and moderate-
     income housing goal'' and all that follows through ``section 
     1334'' and inserting ``housing goals established under this 
     subpart''; and
       (2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by 
     striking ``sections 1332, 1333, and 1334,'' and inserting 
     ``this subpart''.
       (d) Definitions.--Section 1303 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4502) is amended--
       (1) by striking paragraph (24), as so designated by section 
     1002 of this Act, and inserting the following:
       ``(24) Very low-income.--
       ``(A) In general.--The term `very low-income' means--
       ``(i) in the case of owner-occupied units, families having 
     incomes not greater than 50 percent of the area median 
     income; and
       ``(ii) in the case of rental units, families having incomes 
     not greater than 50 percent of the area median income, with 
     adjustments for smaller and larger families, as determined by 
     the Director.
       ``(B) Rule of construction.--For purposes of section 1338 
     and 1339, the term `very low-income' means--
       ``(i) in the case of owner-occupied units, income in excess 
     of 30 percent but not greater than 50 percent of the area 
     median income; and
       ``(ii) in the case of rental units, income in excess of 30 
     percent but not greater than 50 percent of the area median 
     income, with adjustments for smaller and larger families, as 
     determined by the Director.''; and
       (2) by adding at the end the following:
       ``(26) Conforming mortgage.--The term `conforming mortgage' 
     means, with respect to an enterprise, a conventional mortgage 
     having an original principal obligation that does not exceed 
     the dollar amount limitation in effect at the time of such 
     origination and applicable to such mortgage, under, as 
     applicable--
       ``(A) section 302(b)(2) of the Federal National Mortgage 
     Association Charter Act; or
       ``(B) section 305(a)(2) of the Federal Home Loan Mortgage 
     Corporation Act.
       ``(27) Extremely low-income.--The term `extremely low-
     income' means--
       ``(A) in the case of owner-occupied units, income not in 
     excess of 30 percent of the area median income; and
       ``(B) in the case of rental units, income not in excess of 
     30 percent of the area median income, with adjustments for 
     smaller and larger families, as determined by the Director.
       ``(28) Low-income area.--The term `low-income area' means a 
     census tract or block

[[Page 15971]]

     numbering area in which the median income does not exceed 80 
     percent of the median income for the area in which such 
     census tract or block numbering area is located, and, for the 
     purposes of section 1332(a)(1)(B), shall include families 
     having incomes not greater than 100 percent of the area 
     median income who reside in minority census tracts and shall 
     include families having incomes not greater than 100 percent 
     of the area median income who reside in designated disaster 
     areas.
       ``(29) Minority census tract.--The term `minority census 
     tract' means a census tract that has a minority population of 
     at least 30 percent and a median family income of less than 
     100 percent of the area family median income.
       ``(30) Shortage of standard rental units both affordable 
     and available to extremely low-income renter households.--
       ``(A) In general.--The term `shortage of standard rental 
     units both affordable and available to extremely low-income 
     renter households' means the gap between--
       ``(i) the number of units with complete plumbing and 
     kitchen facilities with a rent that is 30 percent or less of 
     30 percent of the adjusted area median income as determined 
     by the Director that are occupied by extremely low-income 
     renter households or are vacant for rent; and
       ``(ii) the number of extremely low-income renter 
     households.
       ``(B) Rule of construction.--If the number of units 
     described in subparagraph (A)(i) exceeds the number of 
     extremely low-income households as described in subparagraph 
     (A)(ii), there is no shortage.
       ``(31) Shortage of standard rental units both affordable 
     and available to very low-income renter households.--
       ``(A) In general.--The term `shortage of standard rental 
     units both affordable and available to very low-income renter 
     households' means the gap between--
       ``(i) the number of units with complete plumbing and 
     kitchen facilities with a rent that is 30 percent or less of 
     50 percent of the adjusted area median income as determined 
     by the Director that are occupied by either extremely low- or 
     very low-income renter households or are vacant for rent; and
       ``(ii) the number of extremely low- and very low-income 
     renter households.
       ``(B) Rule of construction.--If the number of units 
     described in subparagraph (A)(i) exceeds the number of 
     extremely low- and very low-income households as described in 
     subparagraph (A)(ii), there is no shortage.''.

     SEC. 1129. DUTY TO SERVE UNDERSERVED MARKETS.

       (a) Establishment and Evaluation of Performance.--Section 
     1335 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4565) is amended--
       (1) in the section heading, by inserting ``DUTY TO SERVE 
     UNDERSERVED MARKETS AND'' before ``OTHER'';
       (2) by striking subsection (b);
       (3) in subsection (a)--
       (A) in the matter preceding paragraph (1), by inserting 
     ``and to carry out the duty under subsection (a) of this 
     section'' before ``, each enterprise shall'';
       (B) in paragraph (3), by inserting ``and'' after the 
     semicolon at the end;
       (C) in paragraph (4), by striking ``; and'' and inserting a 
     period;
       (D) by striking paragraph (5); and
       (E) by redesignating such subsection as subsection (b);
       (4) by inserting before subsection (b) (as so redesignated 
     by paragraph (3)(E) of this subsection) the following new 
     subsection:
       ``(a) Duty to Serve Underserved Markets.--
       ``(1) Duty.--To increase the liquidity of mortgage 
     investments and improve the distribution of investment 
     capital available for mortgage financing for underserved 
     markets, each enterprise shall provide leadership to the 
     market in developing loan products and flexible underwriting 
     guidelines to facilitate a secondary market for mortgages for 
     very low-, low-, and moderate-income families with respect to 
     the following underserved markets:
       ``(A) Manufactured housing.--The enterprise shall develop 
     loan products and flexible underwriting guidelines to 
     facilitate a secondary market for mortgages on manufactured 
     homes for very low-, low-, and moderate-income families.
       ``(B) Affordable housing preservation.--The enterprise 
     shall develop loan products and flexible underwriting 
     guidelines to facilitate a secondary market to preserve 
     housing affordable to very low-, low-, and moderate-income 
     families, including housing projects subsidized under--
       ``(i) the project-based and tenant-based rental assistance 
     programs under section 8 of the United States Housing Act of 
     1937;
       ``(ii) the program under section 236 of the National 
     Housing Act;
       ``(iii) the below-market interest rate mortgage program 
     under section 221(d)(4) of the National Housing Act;
       ``(iv) the supportive housing for the elderly program under 
     section 202 of the Housing Act of 1959;
       ``(v) the supportive housing program for persons with 
     disabilities under section 811 of the Cranston-Gonzalez 
     National Affordable Housing Act;
       ``(vi) the programs under title IV of the McKinney-Vento 
     Homeless Assistance Act (42 U.S.C. 11361 et seq.), but only 
     permanent supportive housing projects subsidized under such 
     programs;
       ``(vii) the rural rental housing program under section 515 
     of the Housing Act of 1949;
       ``(viii) the low-income housing tax credit under section 42 
     of the Internal Revenue Code of 1986; and
       ``(ix) comparable state and local affordable housing 
     programs.
       ``(C) Rural markets.--The enterprise shall develop loan 
     products and flexible underwriting guidelines to facilitate a 
     secondary market for mortgages on housing for very low-, and 
     low-, and moderate-income families in rural areas.''; and
       (5) by adding at the end the following new subsections:
       ``(c) Additional Categories.--The Director may submit 
     recommendations to the Committee on Financial Services of the 
     House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs of the Senate for the 
     establishment of additional categories under subsection (a), 
     provided that the Director makes a preliminary determination 
     that any such category is important to the mission of the 
     enterprises, that the category is an underserved market, and 
     that the establishment of such category is warranted.
       ``(d) Evaluation and Reporting of Compliance.--
       ``(1) In general.--The Director shall, by regulation, 
     establish effective for 2010 and thereafter a manner for 
     evaluating whether, and the extent to which, the enterprises 
     have complied with the duty under subsection (a) to serve 
     underserved markets and for rating the extent of such 
     compliance. Using such method, the Director shall, for 2010 
     and each year thereafter, evaluate such compliance and rate 
     the performance of each enterprise as to extent of 
     compliance. The Director shall include such evaluation and 
     rating for each enterprise for a year in the report for that 
     year submitted pursuant to section 1319B(a).
       ``(2) Separate evaluations.--In determining whether an 
     enterprise has complied with the duty referred to in 
     paragraph (1), the Director shall separately evaluate whether 
     the enterprise has complied with such duty with respect to 
     each of the underserved markets identified in subsection (a), 
     taking into consideration--
       ``(A) the development of loan products, more flexible 
     underwriting guidelines, and other innovative approaches to 
     providing financing to each of such underserved markets;
       ``(B) the extent of outreach to qualified loan sellers and 
     other market participants in each of such underserved 
     markets;
       ``(C) the volume of loans purchased in each of such 
     underserved markets relative to the market opportunities 
     available to the enterprise, except that the Director shall 
     not establish specific quantitative targets nor evaluate the 
     enterprises based solely on the volume of loans purchased; 
     and
       ``(D) the amount of investments and grants in projects 
     which assist in meeting the needs of such underserved 
     markets.
       ``(3) Manufactured housing market.--In determining whether 
     an enterprise has complied with the duty under subparagraph 
     (A) of subsection (a)(1), the Director may consider loans 
     secured by both real and personal property.
       ``(4) Prohibition of consideration of affordable housing 
     fund grants for meeting duty to serve.-- In determining 
     whether an enterprise has complied with the duty referred to 
     in paragraph (1), the Director may not consider any 
     affordable housing fund grant amounts used under section 1337 
     for eligible activities under subsection (g) of such 
     section.''.
       (b) Enforcement.--Subsection (a) of section 1336 of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 
     4566(a)) is amended--
       (1) in paragraph (1), by inserting ``and with the duty 
     under section 1335(a) of each enterprise with respect to 
     underserved markets,'' before ``as provided in this 
     section''; and
       (2) by adding at the end of such subsection, as amended by 
     the preceding provisions of this title, the following new 
     paragraph:
       ``(4) Enforcement of duty to provide mortgage credit to 
     underserved markets.--The duty under section 1335(a) of each 
     enterprise to serve underserved markets (as determined in 
     accordance with section 1335(c)) shall be enforceable under 
     this section to the same extent and under the same provisions 
     that the housing goals established under this subpart are 
     enforceable. Such duty shall be enforceable only under this 
     section, except that such duty shall not be subject to 
     subsection (c)(7) of this section and shall not be 
     enforceable under any other provision of this title 
     (including subpart C of this part) or under any provision of 
     the Federal National Mortgage Association Charter Act or the 
     Federal Home Loan Mortgage Corporation Act.''.
       (c) Additional Credit for Certain Mortgages.--Section 
     1336(a) of the Housing and Community Development Act of 1992 
     (12 U.S.C. 4566(a)) is amended--

[[Page 15972]]

       (1) in paragraph (2), by inserting ``, except as provided 
     in paragraph (5),'' after ``which''; and
       (2) by adding at the end the following new paragraph:
       ``(5) Additional credit.--The Director may assign 
     additional credit toward achievement, under this section, of 
     the housing goals for mortgage purchase activities of the 
     enterprises that comply with the requirements of such goals 
     and support housing that includes a licensed childcare 
     center. The availability of additional credit under this 
     paragraph shall not be used to increase any housing goal, 
     subgoal, or target established under this subpart.''.

     SEC. 1130. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING 
                   GOALS.

       (a) In General.--Section 1336 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4566) is amended by striking subsections (b) and (c) 
     and inserting the following:
       ``(b) Notice and Preliminary Determination of Failure To 
     Meet Goals.--
       ``(1) Notice.--If the Director preliminarily determines 
     that an enterprise has failed, or that there is a substantial 
     probability that an enterprise will fail, to meet any housing 
     goal under this subpart, the Director shall provide written 
     notice to the enterprise of such a preliminary determination, 
     the reasons for such determination, and the information on 
     which the Director based the determination.
       ``(2) Response period.--
       ``(A) In general.--During the 30-day period beginning on 
     the date on which an enterprise is provided notice under 
     paragraph (1), the enterprise may submit to the Director any 
     written information that the enterprise considers appropriate 
     for consideration by the Director in finally determining 
     whether such failure has occurred or whether the achievement 
     of such goal was or is feasible.
       ``(B) Extended period.--The Director may extend the period 
     under subparagraph (A) for good cause for not more than 30 
     additional days.
       ``(C) Shortened period.--The Director may shorten the 
     period under subparagraph (A) for good cause.
       ``(D) Failure to respond.--The failure of an enterprise to 
     provide information during the 30-day period under this 
     paragraph (as extended or shortened) shall waive any right of 
     the enterprise to comment on the proposed determination or 
     action of the Director.
       ``(3) Consideration of information and final 
     determination.--
       ``(A) In general.--After the expiration of the response 
     period under paragraph (2), or upon receipt of information 
     provided during such period by the enterprise, whichever 
     occurs earlier, the Director shall issue a final 
     determination on--
       ``(i) whether the enterprise has failed, or there is a 
     substantial probability that the enterprise will fail, to 
     meet the housing goal; and
       ``(ii) whether (taking into consideration market and 
     economic conditions and the financial condition of the 
     enterprise) the achievement of the housing goal was or is 
     feasible.
       ``(B) Considerations.--In making a final determination 
     under subparagraph (A), the Director shall take into 
     consideration any relevant information submitted by the 
     enterprise during the response period.
       ``(C) Notice.--The Director shall provide written notice, 
     including a response to any information submitted during the 
     response period, to the enterprise, the Committee on Banking, 
     Housing, and Urban Affairs of the Senate, and the Committee 
     on Financial Services of the House of Representatives, of--
       ``(i) each final determination under this paragraph that an 
     enterprise has failed, or that there is a substantial 
     probability that the enterprise will fail, to meet a housing 
     goal;
       ``(ii) each final determination that the achievement of a 
     housing goal was or is feasible; and
       ``(iii) the reasons for each such final determination.
       ``(c) Cease and Desist, Civil Money Penalties, and Remedies 
     Including Housing Plans.--
       ``(1) Requirement.--If the Director finds, pursuant to 
     subsection (b), that there is a substantial probability that 
     an enterprise will fail, or has actually failed, to meet any 
     housing goal under this subpart, and that the achievement of 
     the housing goal was or is feasible, the Director may require 
     that the enterprise submit a housing plan under this 
     subsection. If the Director makes such a finding and the 
     enterprise refuses to submit such a plan, submits an 
     unacceptable plan, or fails to comply with the plan, the 
     Director may issue a cease and desist order in accordance 
     with section 1341 and impose civil money penalties in 
     accordance with section 1345.
       ``(2) Housing plan.--If the Director requires a housing 
     plan under this subsection, such a plan shall be--
       ``(A) a feasible plan describing the specific actions the 
     enterprise will take--
       ``(i) to achieve the goal for the next calendar year; and
       ``(ii) if the Director determines that there is a 
     substantial probability that the enterprise will fail to meet 
     a goal in the current year, to make such improvements and 
     changes in its operations as are reasonable in the remainder 
     of such year; and
       ``(B) sufficiently specific to enable the Director to 
     monitor compliance periodically.
       ``(3) Deadline for submission.--The Director shall 
     establish a deadline for an enterprise to submit a housing 
     plan to the Director, which may not be more than 45 days 
     after the enterprise is provided notice. The Director may 
     extend the deadline to the extent that the Director 
     determines necessary. Any extension of the deadline shall be 
     in writing and for a time certain.
       ``(4) Approval.--The Director shall review each submission 
     by an enterprise, including a housing plan submitted under 
     this subsection, and, not later than 30 days after 
     submission, approve or disapprove the plan or other action. 
     The Director may extend the period for approval or 
     disapproval for a single additional 30-day period if the 
     Director determines it necessary. The Director shall approve 
     any plan that the Director determines is likely to succeed, 
     and conforms with the Federal National Mortgage Association 
     Charter Act or the Federal Home Loan Mortgage Corporation Act 
     (as applicable), this title, and any other applicable 
     provision of law.
       ``(5) Notice of approval and disapproval.--The Director 
     shall provide written notice to any enterprise submitting a 
     housing plan of the approval or disapproval of the plan 
     (which shall include the reasons for any disapproval of the 
     plan) and of any extension of the period for approval or 
     disapproval.
       ``(6) Resubmission.--If the initial housing plan submitted 
     by an enterprise under this section is disapproved, the 
     enterprise shall submit an amended plan acceptable to the 
     Director not later than 15 days after such disapproval, or 
     such longer period that the Director determines is in the 
     public interest.
       ``(7) Cease and desist orders; civil money penalties.--
     Solely with respect to the housing goals established under 
     sections 1332(a) and 1333(a)(1), if the Director requires an 
     enterprise to submit a housing plan under this subsection and 
     the enterprise refuses to submit such a plan, submits an 
     unacceptable plan, or fails to comply with the plan, the 
     Director may issue a cease and desist order in accordance 
     with section 1341, impose civil money penalties in accordance 
     with section 1345, exercise other appropriate enforcement 
     authority or seek other appropriate actions.''.
       (b) Conforming Amendment.--The heading for subpart C of 
     part 2 of subtitle A of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 is amended to read 
     as follows:

                      ``Subpart C--Enforcement''.

       (c) Cease and Desist Proceedings.--
       (1) Repeal.--Section 1341 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4581) is hereby repealed.
       (2) Cease and desist proceedings.--The Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 is 
     amended by inserting before section 1342 the following:

     ``SEC. 1341. CEASE AND DESIST PROCEEDINGS.

       ``(a) Grounds for Issuance.--The Director may issue and 
     serve a notice of charges under this section upon an 
     enterprise if the Director determines that--
       ``(1) the enterprise has failed to submit a report under 
     section 1327, following a notice of such failure, an 
     opportunity for comment by the enterprise, and a final 
     determination by the Director;
       ``(2) the enterprise has failed to submit the information 
     required under subsection (m) or (n) of section 309 of the 
     Federal National Mortgage Association Charter Act, or 
     subsection (e) or (f) of section 307 of the Federal Home Loan 
     Mortgage Corporation Act;
       ``(3) solely with respect to the housing goals established 
     under sections 1332(a) and 1333(a)(1), the enterprise has 
     failed to submit a housing plan that complies with section 
     1336(c) within the applicable period; or
       ``(4) solely with respect to the housing goals established 
     under sections 1332(a) and 1333(a)(1), the enterprise has 
     failed to comply with a housing plan under section 1336(c).
       ``(b) Procedure.--
       ``(1) Notice of charges.--Each notice of charges issued 
     under this section shall contain a statement of the facts 
     constituting the alleged conduct and shall fix a time and 
     place at which a hearing will be held to determine on the 
     record whether an order to cease and desist from such conduct 
     should issue.
       ``(2) Issuance of order.--If the Director finds on the 
     record made at a hearing described in paragraph (1) that any 
     conduct specified in the notice of charges has been 
     established (or the enterprise consents pursuant to section 
     1342(a)(4)), the Director may issue and serve upon the 
     enterprise an order requiring the enterprise to--
       ``(A) submit a report under section 1327;
       ``(B) solely with respect to the housing goals established 
     under sections 1332(a) and 1333(a)(1), submit a housing plan 
     in compliance with section 1336(c);
       ``(C) solely with respect to the housing goals established 
     under sections 1332(a) and

[[Page 15973]]

     1333(a)(1), comply with the housing plan in compliance with 
     section 1336(c); or
       ``(D) provide the information required under subsection (m) 
     or (n) of section 309 of the Federal National Mortgage 
     Association Charter Act, or subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act.
       ``(c) Effective Date.--An order under this section shall 
     become effective upon the expiration of the 30-day period 
     beginning on the date of service of the order upon the 
     enterprise (except in the case of an order issued upon 
     consent, which shall become effective at the time specified 
     therein), and shall remain effective and enforceable as 
     provided in the order, except to the extent that the order is 
     stayed, modified, terminated, or set aside by action of the 
     Director or otherwise, as provided in this subpart.''.
       (d) Civil Money Penalties.--
       (1) Repeal.--Section 1345 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4585) is hereby repealed.
       (2) Civil money penalties.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 is amended by 
     inserting after section 1344 the following:

     ``SEC. 1345. CIVIL MONEY PENALTIES.

       ``(a) Authority.--The Director may impose a civil money 
     penalty, in accordance with the provisions of this section, 
     on any enterprise that has failed to--
       ``(1) submit a report under section 1327, following a 
     notice of such failure, an opportunity for comment by the 
     enterprise, and a final determination by the Director;
       ``(2) submit the information required under subsection (m) 
     or (n) of section 309 of the Federal National Mortgage 
     Association Charter Act or subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act;
       ``(3) solely with respect to the housing goals established 
     under sections 1332(a) and 1333(a)(1), submit a housing plan 
     or perform its responsibilities under a remedial order issued 
     pursuant to section 1336(c) within the required period; or
       ``(4) solely with respect to the housing goals established 
     under sections 1332(a) and 1333(a)(1), comply with a housing 
     plan for the enterprise under section 1336(c).
       ``(b) Amount of Penalty.--The amount of a penalty under 
     this section, as determined by the Director, may not exceed--
       ``(1) for any failure described in paragraph (1), (5), or 
     (6) of subsection (a), $100,000 for each day that the failure 
     occurs; and
       ``(2) for any failure described in paragraph (2), (3), or 
     (4) of subsection (a), $50,000 for each day that the failure 
     occurs.
       ``(c) Procedures.--
       ``(1) Establishment.--The Director shall establish 
     standards and procedures governing the imposition of civil 
     money penalties under this section. Such standards and 
     procedures--
       ``(A) shall provide for the Director to notify the 
     enterprise in writing of the determination of the Director to 
     impose the penalty, which shall be made on the record;
       ``(B) shall provide for the imposition of a penalty only 
     after the enterprise has been given an opportunity for a 
     hearing on the record pursuant to section 1342; and
       ``(C) may provide for review by the Director of any 
     determination or order, or interlocutory ruling, arising from 
     a hearing.
       ``(2) Factors in determining amount of penalty.--In 
     determining the amount of a penalty under this section, the 
     Director shall give consideration to factors including--
       ``(A) the gravity of the offense;
       ``(B) any history of prior offenses;
       ``(C) ability to pay the penalty;
       ``(D) injury to the public;
       ``(E) benefits received;
       ``(F) deterrence of future violations;
       ``(G) the length of time that the enterprise should 
     reasonably take to achieve the goal; and
       ``(H) such other factors as the Director may determine, by 
     regulation, to be appropriate.
       ``(d) Action to Collect Penalty.--If an enterprise fails to 
     comply with an order by the Director imposing a civil money 
     penalty under this section, after the order is no longer 
     subject to review, as provided in sections 1342 and 1343, the 
     Director may bring an action in the United States District 
     Court for the District of Columbia to obtain a monetary 
     judgment against the enterprise, and such other relief as may 
     be available. The monetary judgment may, in the court's 
     discretion, include the attorneys' fees and other expenses 
     incurred by the United States in connection with the action. 
     In an action under this subsection, the validity and 
     appropriateness of the order imposing the penalty shall not 
     be subject to review.
       ``(e) Settlement by Director.--The Director may compromise, 
     modify, or remit any civil money penalty which may be, or has 
     been, imposed under this section.
       ``(f) Deposit of Penalties.--The Director shall use any 
     civil money penalties collected under this section to help 
     fund the Housing Trust Fund established under section 
     1338.''.
       (e) Director Authority.--
       (1) Authority to bring a civil action.--Section 1344(a) of 
     the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4584) is amended by striking 
     ``The Secretary may request the Attorney General of the 
     United States to bring a civil action'' and inserting ``The 
     Director may bring a civil action''.
       (2) Subpoena enforcement.--Section 1348(c) of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4588(c)) is amended by inserting ``may bring 
     an action or'' before ``may request''.
       (3) Conforming amendments.--Subpart C of part 2 of subtitle 
     A of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4581 et seq.) is amended by 
     striking ``Secretary'' each place that term appears and 
     inserting ``Director'' in each of--
       (A) section 1342 (12 U.S.C. 4582);
       (B) section 1343 (12 U.S.C. 4583);
       (C) section 1346 (12 U.S.C. 4586);
       (D) section 1347 (12 U.S.C. 4587); and
       (E) section 1348 (12 U.S.C. 4588).

     SEC. 1131. AFFORDABLE HOUSING PROGRAMS.

       (a) Repeal.--Section 1337 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4567) is hereby repealed.
       (b) Annual Housing Report.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 1301 et 
     seq.) is amended by inserting after section 1336 the 
     following:

     ``SEC. 1337. AFFORDABLE HOUSING ALLOCATIONS.

       ``(a) Set Aside and Allocation of Amounts by Enterprises.--
     Subject to subsection (b), in each fiscal year--
       ``(1) the Federal Home Loan Mortgage Corporation shall--
       ``(A) set aside an amount equal to 4.2 basis points for 
     each dollar of the unpaid principal balance of its total new 
     business purchases; and
       ``(B) allocate or otherwise transfer--
       ``(i) 65 percent of such amounts to the Secretary of 
     Housing and Urban Development to fund the Housing Trust Fund 
     established under section 1338; and
       ``(ii) 35 percent of such amounts to fund the Capital 
     Magnet Fund established pursuant to section 1339; and
       ``(2) the Federal National Mortgage Association shall--
       ``(A) set aside an amount equal to 4.2 basis points for 
     each dollar of unpaid principal balance of its total new 
     business purchases; and
       ``(B) allocate or otherwise transfer--
       ``(i) 65 percent of such amounts to the Secretary of 
     Housing and Urban Development to fund the Housing Trust Fund 
     established under section 1338; and
       ``(ii) 35 percent of such amounts to fund the Capital 
     Magnet Fund established pursuant to section 1339.
       ``(b) Suspension of Contributions.--The Director shall 
     temporarily suspend allocations under subsection (a) by an 
     enterprise upon a finding by the Director that such 
     allocations--
       ``(1) are contributing, or would contribute, to the 
     financial instability of the enterprise;
       ``(2) are causing, or would cause, the enterprise to be 
     classified as undercapitalized; or
       ``(3) are preventing, or would prevent, the enterprise from 
     successfully completing a capital restoration plan under 
     section 1369C.
       ``(c) Prohibition of Pass-Through of Cost of Allocations.--
     The Director shall, by regulation, prohibit each enterprise 
     from redirecting the costs of any allocation required under 
     this section, through increased charges or fees, or decreased 
     premiums, or in any other manner, to the originators of 
     mortgages purchased or securitized by the enterprise.
       ``(d) Enforcement of Requirements on Enterprise.--
     Compliance by the enterprises with the requirements under 
     this section shall be enforceable under subpart C. Any 
     reference in such subpart to this part or to an order, rule, 
     or regulation under this part specifically includes this 
     section and any order, rule, or regulation under this 
     section.
       ``(e) Required Amount for HOPE Reserve Fund.--Of the 
     aggregate amount allocated under subsection (a), 25 percent 
     shall be deposited into a fund established in the Treasury of 
     the United States by the Secretary of the Treasury for such 
     purpose.
       ``(f) Limitation.--No funds under this title may be used in 
     conjunction with property taken by eminent domain, unless 
     eminent domain is employed only for a public use, except 
     that, for purposes of this section, public use shall not be 
     construed to include economic development that primarily 
     benefits any private entity.

     ``SEC. 1338. HOUSING TRUST FUND.

       ``(a) Establishment and Purpose.--
       ``(1) In general.--The Secretary of Housing and Urban 
     Development (in this section referred to as the `Secretary') 
     shall establish and manage a Housing Trust Fund, which shall 
     be funded with amounts allocated by the enterprises under 
     section 1337 and any amounts as are or may be appropriated, 
     transferred, or credited to such Housing Trust Fund under any 
     other provisions of law. The purpose of the Housing Trust 
     Fund under this section is to provide grants to States (as 
     such term is defined in section 1303) for use--
       ``(A) to increase and preserve the supply of rental housing 
     for extremely low- and very low-income families, including 
     homeless families; and

[[Page 15974]]

       ``(B) to increase homeownership for extremely low- and very 
     low-income families.
       ``(2) Federal assistance.--For purposes of the application 
     of Federal civil rights laws, all assistance provided from 
     the Housing Trust Fund shall be considered Federal financial 
     assistance.
       ``(b) Allocations for HOPE Bond Payments.--
       ``(1) In general.--Notwithstanding subsection (c), to help 
     address the mortgage crisis, of the amounts allocated 
     pursuant to clauses (i) and (ii) of section 1337(a)(1)(B) and 
     clauses (i) and (ii) of section 1337(a)(2)(B) in excess of 
     amounts described in section 1337(e)--
       ``(A) 100 percent of such excess shall be used to reimburse 
     the Treasury for payments made pursuant to section 
     257(w)(1)(C) of the National Housing Act in calendar year 
     2009;
       ``(B) 50 percent of such excess shall be used to reimburse 
     the Treasury for such payments in calendar year 2010; and
       ``(C) 25 percent of such excess shall be used to reimburse 
     the Treasury for such payments in calendar year 2011.
       ``(2) Excess funds.--At the termination of the HOPE for 
     Homeowners Program established under section 257 of the 
     National Housing Act, if amounts used to reimburse the 
     Treasury under paragraph (1) exceed the total net cost to the 
     Government of the HOPE for Homeowners Program, such amounts 
     shall be used for their original purpose, as described in 
     paragraphs (1)(B) and (2)(B) of section 1337(a).
       ``(3) Treasury fund.--The amounts referred to in 
     subparagraphs (A) through (C) of paragraph (1) shall be 
     deposited into a fund established in the Treasury of the 
     United States by the Secretary of the Treasury for such 
     purpose.
       ``(c) Allocation for Housing Trust Fund in Fiscal Year 2010 
     and Subsequent Years.--
       ``(1) In general.--Except as provided in subsection (b), 
     the Secretary shall distribute the amounts allocated for the 
     Housing Trust Fund under this section to provide affordable 
     housing as described in this subsection.
       ``(2) Permissible designees.--A State receiving grant 
     amounts under this subsection may designate a State housing 
     finance agency, housing and community development entity, 
     tribally designated housing entity (as such term is defined 
     in section 4 of the Native American Housing Assistance and 
     Self-Determination Act of 1997 (25 U.S.C. 4103)), or any 
     other qualified instrumentality of the State to receive such 
     grant amounts.
       ``(3) Distribution to states by needs-based formula.--
       ``(A) In general.--The Secretary shall, by regulation, 
     establish a formula within 12 months of the date of enactment 
     of the Federal Housing Finance Regulatory Reform Act of 2008, 
     to distribute amounts made available under this subsection to 
     each State to provide affordable housing to extremely low- 
     and very low-income households.
       ``(B) Basis for formula.--The formula required under 
     subparagraph (A) shall include the following:
       ``(i) The ratio of the shortage of standard rental units 
     both affordable and available to extremely low-income renter 
     households in the State to the aggregate shortage of standard 
     rental units both affordable and available to extremely low-
     income renter households in all the States.
       ``(ii) The ratio of the shortage of standard rental units 
     both affordable and available to very low-income renter 
     households in the State to the aggregate shortage of standard 
     rental units both affordable and available to very low-income 
     renter households in all the States.
       ``(iii) The ratio of extremely low-income renter households 
     in the State living with either (I) incomplete kitchen or 
     plumbing facilities, (II) more than 1 person per room, or 
     (III) paying more than 50 percent of income for housing 
     costs, to the aggregate number of extremely low-income renter 
     households living with either (IV) incomplete kitchen or 
     plumbing facilities, (V) more than 1 person per room, or (VI) 
     paying more than 50 percent of income for housing costs in 
     all the States.
       ``(iv) The ratio of very low-income renter households in 
     the State paying more than 50 percent of income on rent 
     relative to the aggregate number of very low-income renter 
     households paying more than 50 percent of income on rent in 
     all the States.
       ``(v) The resulting sum calculated from the factors 
     described in clauses (i) through (iv) shall be multiplied by 
     the relative cost of construction in the State. For purposes 
     of this subclause, the term `cost of construction'--

       ``(I) means the cost of construction or building 
     rehabilitation in the State relative to the national cost of 
     construction or building rehabilitation; and
       ``(II) shall be calculated such that values higher than 1.0 
     indicate that the State's construction costs are higher than 
     the national average, a value of 1.0 indicates that the 
     State's construction costs are exactly the same as the 
     national average, and values lower than 1.0 indicate that the 
     State's cost of construction are lower than the national 
     average.

       ``(C) Priority.--The formula required under subparagraph 
     (A) shall give priority emphasis and consideration to the 
     factor described in subparagraph (B)(i).
       ``(4) Allocation of grant amounts.--
       ``(A) Notice.--Not later than 60 days after the date that 
     the Secretary determines the formula amounts described in 
     paragraph (3), the Secretary shall caused to be published in 
     the Federal Register a notice that such amounts shall be so 
     available.
       ``(B) Grant amount.--In each fiscal year other than fiscal 
     year 2009, the Secretary shall make a grant to each State in 
     an amount that is equal to the formula amount determined 
     under paragraph (3) for that State.
       ``(C) Minimum state allocations.--If the formula amount 
     determined under paragraph (3) for a fiscal year would 
     allocate less than $3,000,000 to any of the 50 States of the 
     United States or the District of Columbia, the allocation for 
     such State of the United States or the District of Columbia 
     shall be $3,000,000, and the increase shall be deducted pro 
     rata from the allocations made to all other of the States (as 
     such term is defined in section 1303).
       ``(5) Allocation plans required.--
       ``(A) In general.--For each year that a State or State 
     designated entity receives a grant under this subsection, the 
     State or State designated entity shall establish an 
     allocation plan. Such plan shall--
       ``(i) set forth a plan for the distribution of grant 
     amounts received by the State or State designated entity for 
     such year;
       ``(ii) be based on priority housing needs, as determined by 
     the State or State designated entity in accordance with the 
     regulations established under subsection (g)(2)(D);
       ``(iii) comply with paragraph (6); and
       ``(iv) include performance goals that comply with the 
     requirements established by the Secretary pursuant to 
     subsection (g)(2).
       ``(B) Establishment.--In establishing an allocation plan 
     under this paragraph, a State or State designated entity 
     shall--
       ``(i) notify the public of the establishment of the plan;
       ``(ii) provide an opportunity for public comments regarding 
     the plan;
       ``(iii) consider any public comments received regarding the 
     plan; and
       ``(iv) make the completed plan available to the public.
       ``(C) Contents.--An allocation plan of a State or State 
     designated entity under this paragraph shall set forth the 
     requirements for eligible recipients under paragraph (8) to 
     apply for such grant amounts, including a requirement that 
     each such application include--
       ``(i) a description of the eligible activities to be 
     conducted using such assistance; and
       ``(ii) a certification by the eligible recipient applying 
     for such assistance that any housing units assisted with such 
     assistance will comply with the requirements under this 
     section.
       ``(6) Selection of activities funded using housing trust 
     fund grant amounts.--Grant amounts received by a State or 
     State designated entity under this subsection may be used, or 
     committed for use, only for activities that--
       ``(A) are eligible under paragraph (7) for such use;
       ``(B) comply with the applicable allocation plan of the 
     State or State designated entity under paragraph (5); and
       ``(C) are selected for funding by the State or State 
     designated entity in accordance with the process and criteria 
     for such selection established pursuant to subsection 
     (g)(2)(D).
       ``(7) Eligible activities.--Grant amounts allocated to a 
     State or State designated entity under this subsection shall 
     be eligible for use, or for commitment for use, only for 
     assistance for--
       ``(A) the production, preservation, and rehabilitation of 
     rental housing, including housing under the programs 
     identified in section 1335(a)(2)(B) and for operating costs, 
     except that not less than 75 percent of such grant amounts 
     shall be used for the benefit only of extremely low-income 
     families or families with incomes at or below the poverty 
     line (as such term is defined in section 673 of the Omnibus 
     Budget Reconciliation Act of 1981 (42 U.S.C. 9902), including 
     any revision required by such section) applicable to a family 
     of the size involved, and not more than 25 percent for the 
     benefit only of very low-income families; and
       ``(B) the production, preservation, and rehabilitation of 
     housing for homeownership, including such forms as down 
     payment assistance, closing cost assistance, and assistance 
     for interest rate buy-downs, that--
       ``(i) is available for purchase only for use as a principal 
     residence by families that qualify both as--

       ``(I) extremely low- and very low-income families at the 
     times described in subparagraphs (A) through (C) of section 
     215(b)(2) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12745(b)(2)); and
       ``(II) first-time homebuyers, as such term is defined in 
     section 104 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12704), except that any reference in 
     such section to assistance under title II of such Act shall 
     for purposes of this subsection be considered to refer to 
     assistance from affordable housing fund grant amounts;

       ``(ii) has an initial purchase price that meets the 
     requirements of section 215(b)(1) of

[[Page 15975]]

     the Cranston-Gonzalez National Affordable Housing Act;
       ``(iii) is subject to the same resale restrictions 
     established under section 215(b)(3) of the Cranston-Gonzalez 
     National Affordable Housing Act and applicable to the 
     participating jurisdiction that is the State in which such 
     housing is located; and
       ``(iv) is made available for purchase only by, or in the 
     case of assistance under this subsection, is made available 
     only to homebuyers who have, before purchase completed a 
     program of independent financial education and counseling 
     from an eligible organization that meets the requirements of 
     section 132 of the Federal Housing Finance Regulatory Reform 
     Act of 2008.
       ``(8) Tenant protections and public participation.--All 
     amounts from the Trust Fund shall be allocated in accordance 
     with, and any eligible activities carried out in whole or in 
     part with grant amounts under this subtitle (including 
     housing provided with such grant amounts) shall comply with 
     and be operated in compliance with--
       ``(A) laws relating to tenant protections and tenant rights 
     to participate in decision making regarding their residences;
       ``(B) laws requiring public participation, including laws 
     relating to Consolidated Plans, Qualified Allocation Plans, 
     and Public Housing Agency Plans; and
       ``(C) fair housing laws and laws regarding accessibility in 
     federally assisted housing, including section 504 of the 
     Rehabilitation Act of 1973.
       ``(9) Eligible recipients.--Grant amounts allocated to a 
     State or State designated entity under this subsection may be 
     provided only to a recipient that is an organization, agency, 
     or other entity (including a for-profit entity or a nonprofit 
     entity) that--
       ``(A) has demonstrated experience and capacity to conduct 
     an eligible activity under paragraph (7), as evidenced by its 
     ability to--
       ``(i) own, construct or rehabilitate, manage, and operate 
     an affordable multifamily rental housing development;
       ``(ii) design, construct or rehabilitate, and market 
     affordable housing for homeownership; or
       ``(iii) provide forms of assistance, such as down payments, 
     closing costs, or interest rate buy-downs for purchasers;
       ``(B) demonstrates the ability and financial capacity to 
     undertake, comply, and manage the eligible activity;
       ``(C) demonstrates its familiarity with the requirements of 
     any other Federal, State, or local housing program that will 
     be used in conjunction with such grant amounts to ensure 
     compliance with all applicable requirements and regulations 
     of such programs; and
       ``(D) makes such assurances to the State or State 
     designated entity as the Secretary shall, by regulation, 
     require to ensure that the recipient will comply with the 
     requirements of this subsection during the entire period that 
     begins upon selection of the recipient to receive such grant 
     amounts and ending upon the conclusion of all activities 
     under paragraph (8) that are engaged in by the recipient and 
     funded with such grant amounts.
       ``(10) Limitations on use.--
       ``(A) Required amount for homeownership activities.--Of the 
     aggregate amount allocated to a State or State designated 
     entity under this subsection not more than 10 percent shall 
     be used for activities under subparagraph (B) of paragraph 
     (7).
       ``(B) Deadline for commitment or use.--Grant amounts 
     allocated to a State or State designated entity under this 
     subsection shall be used or committed for use within 2 years 
     of the date that such grant amounts are made available to the 
     State or State designated entity. The Secretary shall 
     recapture any such amounts not so used or committed for use 
     and reallocate such amounts under this subsection in the 
     first year after such recapture.
       ``(C) Use of returns.--The Secretary shall, by regulation, 
     provide that any return on a loan or other investment of any 
     grant amount used by a State or State designated entity to 
     provide a loan under this subsection shall be treated, for 
     purposes of availability to and use by the State or State 
     designated entity, as a grant amount authorized under this 
     subsection.
       ``(D) Prohibited uses.--The Secretary shall, by 
     regulation--
       ``(i) set forth prohibited uses of grant amounts allocated 
     under this subsection, which shall include use for--

       ``(I) political activities;
       ``(II) advocacy;
       ``(III) lobbying, whether directly or through other 
     parties;
       ``(IV) counseling services;
       ``(V) travel expenses; and
       ``(VI) preparing or providing advice on tax returns;

     and for the purposes of this subparagraph, the prohibited use 
     of funds for political activities includes influencing the 
     selection, nomination, election, or appointment of one or 
     more candidates to any Federal, State or local office as 
     codified in section 501 of the Internal Revenue Code of 1986 
     (26 U.S.C. 501);
       ``(ii) provide that, except as provided in clause (iii), 
     grant amounts of a State or State designated entity may not 
     be used for administrative, outreach, or other costs of--

       ``(I) the State or State designated entity; or
       ``(II) any other recipient of such grant amounts; and

       ``(iii) limit the amount of any grant amounts for a year 
     that may be used by the State or State designated entity for 
     administrative costs of carrying out the program required 
     under this subsection, including home ownership counseling, 
     to a percentage of such grant amounts of the State or State 
     designated entity for such year, which may not exceed 10 
     percent.
       ``(E) Prohibition of consideration of use for meeting 
     housing goals or duty to serve.--In determining compliance 
     with the housing goals under this subpart and the duty to 
     serve underserved markets under section 1335, the Director 
     may not consider any grant amounts used under this section 
     for eligible activities under paragraph (7). The Director 
     shall give credit toward the achievement of such housing 
     goals and such duty to serve underserved markets to purchases 
     by the enterprises of mortgages for housing that receives 
     funding from such grant amounts, but only to the extent that 
     such purchases by the enterprises are funded other than with 
     such grant amounts.
       ``(d) Reduction for Failure to Obtain Return of Misused 
     Funds.--If in any year a State or State designated entity 
     fails to obtain reimbursement or return of the full amount 
     required under subsection (e)(1)(B) to be reimbursed or 
     returned to the State or State designated entity during such 
     year--
       ``(1) except as provided in paragraph (2)--
       ``(A) the amount of the grant for the State or State 
     designated entity for the succeeding year, as determined 
     pursuant to this section, shall be reduced by the amount by 
     which such amounts required to be reimbursed or returned 
     exceed the amount actually reimbursed or returned; and
       ``(B) the amount of the grant for the succeeding year for 
     each other State or State designated entity whose grant is 
     not reduced pursuant to subparagraph (A) shall be increased 
     by the amount determined by applying the formula established 
     pursuant to this section to the total amount of all 
     reductions for all State or State designated entities for 
     such year pursuant to subparagraph (A); or
       ``(2) in any case in which such failure to obtain 
     reimbursement or return occurs during a year immediately 
     preceding a year in which grants under this section will not 
     be made, the State or State designated entity shall pay to 
     the Secretary for reallocation among the other grantees an 
     amount equal to the amount of the reduction for the entity 
     that would otherwise apply under paragraph (1)(A).
       ``(e) Accountability of Recipients and Grantees.--
       ``(1) Recipients.--
       ``(A) Tracking of funds.--The Secretary shall--
       ``(i) require each State or State designated entity to 
     develop and maintain a system to ensure that each recipient 
     of assistance under this section uses such amounts in 
     accordance with this section, the regulations issued under 
     this section, and any requirements or conditions under which 
     such amounts were provided; and
       ``(ii) establish minimum requirements for agreements, 
     between the State or State designated entity and recipients, 
     regarding assistance under this section, which shall 
     include--

       ``(I) appropriate periodic financial and project reporting, 
     record retention, and audit requirements for the duration of 
     the assistance to the recipient to ensure compliance with the 
     limitations and requirements of this section and the 
     regulations under this section; and
       ``(II) any other requirements that the Secretary determines 
     are necessary to ensure appropriate administration and 
     compliance.

       ``(B) Misuse of funds.--
       ``(i) Reimbursement requirement.--If any recipient of 
     assistance under this section is determined, in accordance 
     with clause (ii), to have used any such amounts in a manner 
     that is materially in violation of this section, the 
     regulations issued under this section, or any requirements or 
     conditions under which such amounts were provided, the State 
     or State designated entity shall require that, within 12 
     months after the determination of such misuse, the recipient 
     shall reimburse the State or State designated entity for such 
     misused amounts and return to the State or State designated 
     entity any such amounts that remain unused or uncommitted for 
     use. The remedies under this clause are in addition to any 
     other remedies that may be available under law.
       ``(ii) Determination.--A determination is made in 
     accordance with this clause if the determination is made by 
     the Secretary or made by the State or State designated 
     entity, provided that--

       ``(I) the State or State designated entity provides 
     notification of the determination to the Secretary for 
     review, in the discretion of the Secretary, of the 
     determination; and
       ``(II) the Secretary does not subsequently reverse the 
     determination.

       ``(2) Grantees.--
       ``(A) Report.--
       ``(i) In general.--The Secretary shall require each State 
     or State designated entity receiving grant amounts in any 
     given year under this section to submit a report, for such 
     year, to the Secretary that--

[[Page 15976]]

       ``(I) describes the activities funded under this section 
     during such year with such grant amounts; and
       ``(II) the manner in which the State or State designated 
     entity complied during such year with any allocation plan 
     established pursuant to subsection (c).

       ``(ii) Public availability.--The Secretary shall make such 
     reports pursuant to this subparagraph publicly available.
       ``(B) Misuse of funds.--If the Secretary determines, after 
     reasonable notice and opportunity for hearing, that a State 
     or State designated entity has failed to comply substantially 
     with any provision of this section, and until the Secretary 
     is satisfied that there is no longer any such failure to 
     comply, the Secretary shall--
       ``(i) reduce the amount of assistance under this section to 
     the State or State designated entity by an amount equal to 
     the amount of grant amounts which were not used in accordance 
     with this section;
       ``(ii) require the State or State designated entity to 
     repay the Secretary any amount of the grant which was not 
     used in accordance with this section;
       ``(iii) limit the availability of assistance under this 
     section to the State or State designated entity to activities 
     or recipients not affected by such failure to comply; or
       ``(iv) terminate any assistance under this section to the 
     State or State designated entity.
       ``(f) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Extremely low-income renter household.--The term 
     `extremely low-income renter household' means a household 
     whose income is not in excess of 30 percent of the area 
     median income, with adjustments for smaller and larger 
     families, as determined by the Secretary.
       ``(2) Recipient.--The term `recipient' means an individual 
     or entity that receives assistance from a State or State 
     designated entity from amounts made available to the State or 
     State designated entity under this section.
       ``(3) Shortage of standard rental units both affordable and 
     available to extremely low-income renter households.--
       ``(A) In general.--The term `shortage of standard rental 
     units both affordable and available to extremely low-income 
     renter households' means for any State or other geographical 
     area the gap between--
       ``(i) the number of units with complete plumbing and 
     kitchen facilities with a rent that is 30 percent or less of 
     30 percent of the adjusted area median income as determined 
     by the Secretary that are occupied by extremely low-income 
     renter households or are vacant for rent; and
       ``(ii) the number of extremely low-income renter 
     households.
       ``(B) Rule of construction.--If the number of units 
     described in subparagraph (A)(i) exceeds the number of 
     extremely low-income households as described in subparagraph 
     (A)(ii), there is no shortage.
       ``(4) Shortage of standard rental units both affordable and 
     available to very low-income renter households.--
       ``(A) In general.--The term `shortage of standard rental 
     units both affordable and available to very low-income renter 
     households' means for any State or other geographical area 
     the gap between--
       ``(i) the number of units with complete plumbing and 
     kitchen facilities with a rent that is 30 percent or less of 
     50 percent of the adjusted area median income as determined 
     by the Secretary that are occupied by very low-income renter 
     households or are vacant for rent; and
       ``(ii) the number of very low-income renter households.
       ``(B) Rule of construction.--If the number of units 
     described in subparagraph (A)(i) exceeds the number of very 
     low-income households as described in subparagraph (A)(ii), 
     there is no shortage.
       ``(5) Very low-income family.--The term `very low-income 
     family' has the meaning given such term in section 1303, 
     except that such term includes any family that resides in a 
     rural area that has an income that does not exceed the 
     poverty line (as such term is defined in section 673(2) of 
     the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 
     9902(2)), including any revision required by such section) 
     applicable to a family of the size involved.
       ``(6) Very low-income renter households.--The term `very 
     low-income renter households' means a household whose income 
     is in excess of 30 percent but not greater than 50 percent of 
     the area median income, with adjustments for smaller and 
     larger families, as determined by the Secretary.
       ``(g) Regulations.--
       ``(1) In general.--The Secretary shall issue regulations to 
     carry out this section.
       ``(2) Required contents.--The regulations issued under this 
     subsection shall include--
       ``(A) a requirement that the Secretary ensure that the use 
     of grant amounts under this section by States or State 
     designated entities is audited not less than annually to 
     ensure compliance with this section;
       ``(B) authority for the Secretary to audit, provide for an 
     audit, or otherwise verify a State or State designated 
     entity's activities to ensure compliance with this section;
       ``(C) a requirement that, for the purposes of subparagraphs 
     (A) and (B), any financial statement submitted by a grantee 
     or recipient to the Secretary shall be reviewed by an 
     independent certified public accountant in accordance with 
     Statements on Standards for Accounting and Review Services, 
     issued by the American Institute of Certified Public 
     Accountants;
       ``(D) requirements for a process for application to, and 
     selection by, each State or State designated entity for 
     activities meeting the State or State designated entity's 
     priority housing needs to be funded with grant amounts under 
     this section, which shall provide for priority in funding to 
     be based upon--
       ``(i) geographic diversity;
       ``(ii) ability to obligate amounts and undertake activities 
     so funded in a timely manner;
       ``(iii) in the case of rental housing projects under 
     subsection (c)(7)(A), the extent to which rents for units in 
     the project funded are affordable, especially for extremely 
     low-income families;
       ``(iv) in the case of rental housing projects under 
     subsection (c)(7)(A), the extent of the duration for which 
     such rents will remain affordable;
       ``(v) the extent to which the application makes use of 
     other funding sources; and
       ``(vi) the merits of an applicant's proposed eligible 
     activity;
       ``(E) requirements to ensure that grant amounts provided to 
     a State or State designated entity under this section that 
     are used for rental housing under subsection (c)(7)(A) are 
     used only for the benefit of extremely low- and very low-
     income families; and
       ``(F) requirements and standards for establishment, by a 
     State or State designated entity, for use of grant amounts in 
     2009 and subsequent years of performance goals, benchmarks, 
     and timetables for the production, preservation, and 
     rehabilitation of affordable rental and homeownership housing 
     with such grant amounts.
       ``(h) Affordable Housing Trust Fund.--If, after the date of 
     enactment of the Federal Housing Finance Regulatory Reform 
     Act of 2008, in any year, there is enacted any provision of 
     Federal law establishing an affordable housing trust fund 
     other than under this title for use only for grants to 
     provide affordable rental housing and affordable 
     homeownership opportunities, and the subsequent year is a 
     year referred to in subsection (c), the Secretary shall in 
     such subsequent year and any remaining years referred to in 
     subsection (c) transfer to such affordable housing trust fund 
     the aggregate amount allocated pursuant to subsection (c) in 
     such year. Notwithstanding any other provision of law, 
     assistance provided using amounts transferred to such 
     affordable housing trust fund pursuant to this subsection may 
     not be used for any of the activities specified in clauses 
     (i) through (vi) of subsection (c)(9)(D).
       ``(i) Funding Accountability and Transparency.--Any grant 
     under this section to a grantee by a State or State 
     designated entity, any assistance provided to a recipient by 
     a State or State designated entity, and any grant, award, or 
     other assistance from an affordable housing trust fund 
     referred to in subsection (h) shall be considered a Federal 
     award for purposes of the Federal Funding Accountability and 
     Transparency Act of 2006 (31 U.S.C. 6101 note). Upon the 
     request of the Director of the Office of Management and 
     Budget, the Secretary shall obtain and provide such 
     information regarding any such grants, assistance, and awards 
     as the Director of the Office of Management and Budget 
     considers necessary to comply with the requirements of such 
     Act, as applicable, pursuant to the preceding sentence.

     ``SEC. 1339. CAPITAL MAGNET FUND.

       ``(a) Establishment.--There is established in the Treasury 
     of the United States a trust fund to be known as the Capital 
     Magnet Fund, which shall be a special account within the 
     Community Development Financial Institutions Fund.
       ``(b) Deposits to Trust Fund.--The Capital Magnet Fund 
     shall consist of--
       ``(1) any amounts transferred to the Fund pursuant to 
     section 1337; and
       ``(2) any amounts as are or may be appropriated, 
     transferred, or credited to such Fund under any other 
     provisions of law.
       ``(c) Expenditures From Trust Fund.--Amounts in the Capital 
     Magnet Fund shall be available to the Secretary of the 
     Treasury to carry out a competitive grant program to attract 
     private capital for and increase investment in--
       ``(1) the development, preservation, rehabilitation, or 
     purchase of affordable housing for primarily extremely low-, 
     very low-, and low-income families; and
       ``(2) economic development activities or community service 
     facilities, such as day care centers, workforce development 
     centers, and health care clinics, which in conjunction with 
     affordable housing activities implement a concerted strategy 
     to stabilize or revitalize a low-income area or underserved 
     rural area.
       ``(d) Federal Assistance.--For purposes of the application 
     of Federal civil rights laws, all assistance provided using 
     amounts in the Capital Magnet Fund shall be considered 
     Federal financial assistance.
       ``(e) Eligible Grantees.--A grant under this section may be 
     made, pursuant to such

[[Page 15977]]

     requirements as the Secretary of the Treasury shall establish 
     for experience and success in attracting private financing 
     and carrying out the types of activities proposed under the 
     application of the grantee, only to--
       ``(1) a Treasury certified community development financial 
     institution; or
       ``(2) a nonprofit organization having as 1 of its principal 
     purposes the development or management of affordable housing.
       ``(f) Eligible Uses.--Grant amounts awarded from the 
     Capital Magnet Fund pursuant to this section may be used for 
     the purposes described in paragraphs (1) and (2) of 
     subsection (c), including for the following uses:
       ``(1) To provide loan loss reserves.
       ``(2) To capitalize a revolving loan fund.
       ``(3) To capitalize an affordable housing fund.
       ``(4) To capitalize a fund to support activities described 
     in subsection (c)(2).
       ``(5) For risk-sharing loans.
       ``(g) Applications.--
       ``(1) In general.--The Secretary of the Treasury shall 
     provide, in a competitive application process established by 
     regulation, for eligible grantees under subsection (e) to 
     submit applications for Capital Magnet Fund grants to the 
     Secretary at such time and in such manner as the Secretary 
     shall determine.
       ``(2) Content of application.--The application required 
     under paragraph (1) shall include a detailed description of--
       ``(A) the types of affordable housing, economic, and 
     community revitalization projects that support or sustain 
     residents of an affordable housing project funded by a grant 
     under this section for which such grant amounts would be 
     used, including the proposed use of eligible grants as 
     authorized under this section;
       ``(B) the types, sources, and amounts of other funding for 
     such projects; and
       ``(C) the expected time frame of any grant used for such 
     project.
       ``(h) Grant Limitation.--
       ``(1) In general.--Any 1 eligible grantee and its 
     subsidiaries and affiliates may not be awarded more than 15 
     percent of the aggregate funds available for grants during 
     any year from the Capital Magnet Fund.
       ``(2) Geographic diversity.--
       ``(A) Goal.--The Secretary of the Treasury shall seek to 
     fund activities in geographically diverse areas of economic 
     distress, including metropolitan and underserved rural areas 
     in every State.
       ``(B) Diversity defined.--For purposes of this paragraph, 
     geographic diversity includes those areas that meet objective 
     criteria of economic distress developed by the Secretary of 
     the Treasury, which may include--
       ``(i) the percentage of low-income families or the extent 
     of poverty;
       ``(ii) the rate of unemployment or underemployment;
       ``(iii) extent of blight and disinvestment;
       ``(iv) projects that target extremely low-, very low-, and 
     low-income families in or outside a designated economic 
     distress area; or
       ``(v) any other criteria designated by the Secretary of the 
     Treasury.
       ``(3) Leverage of funds.--Each grant from the Capital 
     Magnet Fund awarded under this section shall be reasonably 
     expected to result in eligible housing, or economic and 
     community development projects that support or sustain an 
     affordable housing project funded by a grant under this 
     section whose aggregate costs total at least 10 times the 
     grant amount.
       ``(4) Commitment for use deadline.--Amounts made available 
     for grants under this section shall be committed for use 
     within 2 years of the date of such allocation. The Secretary 
     of the Treasury shall recapture into the Capital Magnet Fund 
     any amounts not so used or committed for use and allocate 
     such amounts in the first year after such recapture.
       ``(5) Prohibited uses.--The Secretary shall, by regulation, 
     set forth prohibited uses of grant amounts awarded under this 
     section, which shall include use for--
       ``(A) political activities;
       ``(B) advocacy;
       ``(C) lobbying, whether directly or through other parties;
       ``(D) counseling services;
       ``(E) travel expenses; and
       ``(F) preparing or providing advice on tax returns;
     and for the purposes of this paragraph, the prohibited use of 
     funds for political activities includes influencing the 
     selection, nomination, election, or appointment of one or 
     more candidates to any Federal, State or local office as 
     codified in section Sec. 501 of the Internal Revenue Code of 
     1986 (26 U.S.C. 501).
       ``(6) Additional lobbying restrictions.--No assistance or 
     amounts made available under this section may be expended by 
     an eligible grantee to pay any person to influence or attempt 
     to influence any agency, elected official, officer or 
     employee of a State or local government in connection with 
     the making, award, extension, continuation, renewal, 
     amendment, or modification of any State or local government 
     contract, grant, loan, or cooperative agreement as such terms 
     are defined in section 1352 of title 31, United States Code.
       ``(7) Prohibition of consideration of use for meeting 
     housing goals or duty to serve.--In determining the 
     compliance of the enterprises with the housing goals under 
     this section and the duty to serve underserved markets under 
     section 1335, the Director of the Federal Housing Finance 
     Agency may not consider any Capital Magnet Fund amounts used 
     under this section for eligible activities under subsection 
     (f). The Director of the Federal Housing Finance Agency shall 
     give credit toward the achievement of such housing goals and 
     such duty to serve underserved markets to purchases by the 
     enterprises of mortgages for housing that receives funding 
     from Capital Magnet Fund grant amounts, but only to the 
     extent that such purchases by the enterprises are funded 
     other than with such grant amounts.
       ``(8) Accountability of recipients and grantees.--
       ``(A) Tracking of funds.--The Secretary of the Treasury 
     shall--
       ``(i) require each grantee to develop and maintain a system 
     to ensure that each recipient of assistance from the Capital 
     Magnet Fund uses such amounts in accordance with this 
     section, the regulations issued under this section, and any 
     requirements or conditions under which such amounts were 
     provided; and
       ``(ii) establish minimum requirements for agreements, 
     between the grantee and the Capital Magnet Fund, regarding 
     assistance from the Capital Magnet Fund, which shall 
     include--

       ``(I) appropriate periodic financial and project reporting, 
     record retention, and audit requirements for the duration of 
     the grant to the recipient to ensure compliance with the 
     limitations and requirements of this section and the 
     regulations under this section; and
       ``(II) any other requirements that the Secretary determines 
     are necessary to ensure appropriate grant administration and 
     compliance.

       ``(B) Misuse of funds.--If the Secretary of the Treasury 
     determines, after reasonable notice and opportunity for 
     hearing, that a grantee has failed to comply substantially 
     with any provision of this section and until the Secretary is 
     satisfied that there is no longer any such failure to comply, 
     the Secretary shall--
       ``(i) reduce the amount of assistance under this section to 
     the grantee by an amount equal to the amount of Capital 
     Magnet Fund grant amounts which were not used in accordance 
     with this section;
       ``(ii) require the grantee to repay the Secretary any 
     amount of the Capital Magnet Fund grant amounts which were 
     not used in accordance with this section;
       ``(iii) limit the availability of assistance under this 
     section to the grantee to activities or recipients not 
     affected by such failure to comply; or
       ``(iv) terminate any assistance under this section to the 
     grantee.
       ``(i) Periodic Reports.--
       ``(1) In general.--The Secretary of the Treasury shall 
     submit a report, on a periodic basis, to the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives describing the activities to be funded under 
     this section.
       ``(2) Reports available to public.--The Secretary of the 
     Treasury shall make the reports required under paragraph (1) 
     publicly available.
       ``(j) Regulations.--
       ``(1) In general.--The Secretary of the Treasury shall 
     issue regulations to carry out this section.
       ``(2) Required contents.--The regulations issued under this 
     subsection shall include--
       ``(A) authority for the Secretary to audit, provide for an 
     audit, or otherwise verify an enterprise's activities, to 
     ensure compliance with this section;
       ``(B) a requirement that the Secretary ensure that the 
     allocation of each enterprise is audited not less than 
     annually to ensure compliance with this section;
       ``(C) a requirement that, for the purposes of subparagraphs 
     (A) and (B), any financial statement submitted by a grantee 
     to the Secretary shall be reviewed by an independent 
     certified public accountant in accordance with Statements on 
     Standards for Accounting and Review Services, issued by the 
     American Institute of Certified Public Accountants; and
       ``(D) requirements for a process for application to, and 
     selection by, the Secretary for activities to be funded with 
     amounts from the Capital Magnet Fund, which shall provide 
     that--
       ``(i) funds be fairly distributed to urban, suburban, and 
     rural areas; and
       ``(ii) selection shall be based upon specific criteria, 
     including a prioritization of funding based upon--

       ``(I) the ability to use such funds to generate additional 
     investments;
       ``(II) affordable housing need (taking into account the 
     distinct needs of different regions of the country); and
       ``(III) ability to obligate amounts and undertake 
     activities so funded in a timely manner.''.

     SEC. 1132. FINANCIAL EDUCATION AND COUNSELING.

       (a) Goals.--Financial education and counseling under this 
     section shall have the goal of--

[[Page 15978]]

       (1) increasing the financial knowledge and decision making 
     capabilities of prospective homebuyers;
       (2) assisting prospective homebuyers to develop monthly 
     budgets, build personal savings, finance or plan for major 
     purchases, reduce their debt, improve their financial 
     stability, and set and reach their financial goals;
       (3) helping prospective homebuyers to improve their credit 
     scores by understanding the relationship between their credit 
     histories and their credit scores; and
       (4) educating prospective homebuyers about the options 
     available to build savings for short- and long-term goals.
       (b) Grants.--
       (1) In general.--The Secretary of the Treasury (in this 
     section referred to as the ``Secretary'') shall make grants 
     to eligible organizations to enable such organizations to 
     provide a range of financial education and counseling 
     services to prospective homebuyers.
       (2) Selection.--The Secretary shall select eligible 
     organizations to receive assistance under this section based 
     on their experience and ability to provide financial 
     education and counseling services that result in documented 
     positive behavioral changes.
       (c) Eligible Organizations.--
       (1) In general.--For purposes of this section, the term 
     ``eligible organization'' means an organization that is--
       (A) certified in accordance with section 106(e)(1) of the 
     Housing and Urban Development Act of 1968 (12 U.S.C. 
     1701x(e)); or
       (B) certified by the Office of Financial Education of the 
     Department of the Treasury for purposes of this section, in 
     accordance with paragraph (2).
       (2) OFE certification.--To be certified by the Office of 
     Financial Education for purposes of this section, an eligible 
     organization shall be--
       (A) a housing counseling agency certified by the Secretary 
     of Housing and Urban Development under section 106(e) of the 
     Housing and Urban Development Act of 1968;
       (B) a State, local, or tribal government agency;
       (C) a community development financial institution (as 
     defined in section 103(5) of the Community Development 
     Banking and Financial Institutions Act of 1994 (12 U.S.C. 
     4702(5)) or a credit union; or
       (D) any collaborative effort of entities described in any 
     of subparagraphs (A) through (C).
       (d) Authority for Pilot Projects.--
       (1) In general.--The Secretary of the Treasury shall 
     authorize not more than 5 pilot project grants to eligible 
     organizations under subsection (c) in order to--
       (A) carry out the services under this section; and
       (B) provide such other services that will improve the 
     financial stability and economic condition of low- and 
     moderate-income and low-wealth individuals.
       (2) Goal.--The goal of the pilot project grants under this 
     subsection is to--
       (A) identify successful methods resulting in positive 
     behavioral change for financial empowerment; and
       (B) establish program models for organizations to carry out 
     effective counseling services.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated to the Secretary such sums as are 
     necessary to carry out this section and for the provision of 
     additional financial educational services.
       (f) Study and Report on Effectiveness and Impact.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study on the effectiveness and impact 
     of the grant program established under this section. Not 
     later than 3 years after the date of enactment of this Act, 
     the Comptroller General shall submit a report on the results 
     of such study to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives.
       (2) Content of study.--The study required under paragraph 
     (1) shall include an evaluation of the following:
       (A) The effectiveness of the grant program established 
     under this section in improving the financial situation of 
     homeowners and prospective homebuyers served by the grant 
     program.
       (B) The extent to which financial education and counseling 
     services have resulted in positive behavioral changes.
       (C) The effectiveness and quality of the eligible 
     organizations providing financial education and counseling 
     services under the grant program.
       (g) Regulations.--The Secretary is authorized to promulgate 
     such regulations as may be necessary to implement and 
     administer the grant program authorized by this section.

     SEC. 1133. TRANSFER AND RIGHTS OF CERTAIN HUD EMPLOYEES.

       (a) Transfer.--Each employee of the Department of Housing 
     and Urban Development whose position responsibilities 
     primarily involve the establishment and enforcement of the 
     housing goals under subpart B of part 2 of subtitle A of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4561 et seq.) shall be transferred to 
     the Federal Housing Finance Agency for employment, not later 
     than the effective date of the Federal Housing Finance 
     Regulatory Reform Act of 2008, and such transfer shall be 
     deemed a transfer of function for purposes of section 3503 of 
     title 5, United States Code.
       (b) Guaranteed Positions.--
       (1) In general.--Each employee transferred under subsection 
     (a) shall be guaranteed a position with the same status, 
     tenure, grade, and pay as that held on the day immediately 
     preceding the transfer.
       (2) No involuntary separation or reduction.--An employee 
     transferred under subsection (a) holding a permanent position 
     on the day immediately preceding the transfer may not be 
     involuntarily separated or reduced in grade or compensation 
     during the 12-month period beginning on the date of transfer, 
     except for cause, or, in the case of a temporary employee, 
     separated in accordance with the terms of the appointment of 
     the employee.
       (c) Appointment Authority for Excepted and Senior Executive 
     Service Employees.--
       (1) In general.--In the case of an employee occupying a 
     position in the excepted service or the Senior Executive 
     Service, any appointment authority established under law or 
     by regulations of the Office of Personnel Management for 
     filling such position shall be transferred, subject to 
     paragraph (2).
       (2) Decline of transfer.--The Director may decline a 
     transfer of authority under paragraph (1) to the extent that 
     such authority relates to--
       (A) a position excepted from the competitive service 
     because of its confidential, policymaking, policy-
     determining, or policy-advocating character; or
       (B) a noncareer position in the Senior Executive Service 
     (within the meaning of section 3132(a)(7) of title 5, United 
     States Code).
       (d) Reorganization.--If the Director determines, after the 
     end of the 1-year period beginning on the effective date of 
     the Federal Housing Finance Regulatory Reform Act of 2008, 
     that a reorganization of the combined workforce is required, 
     that reorganization shall be deemed a major reorganization 
     for purposes of affording affected employee retirement under 
     section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States 
     Code.
       (e) Employee Benefit Programs.--
       (1) In general.--Any employee described under subsection 
     (a) accepting employment with the Agency as a result of a 
     transfer under subsection (a) may retain, for 12 months after 
     the date on which such transfer occurs, membership in any 
     employee benefit program of the Agency or the Department of 
     Housing and Urban Development, as applicable, including 
     insurance, to which such employee belongs on such effective 
     date, if--
       (A) the employee does not elect to give up the benefit or 
     membership in the program; and
       (B) the benefit or program is continued by the Director of 
     the Federal Housing Finance Agency.
       (2) Cost differential.--
       (A) In general.--The difference in the costs between the 
     benefits which would have been provided by the Department of 
     Housing and Urban Development and those provided by this 
     section shall be paid by the Director.
       (B) Health insurance.--If any employee elects to give up 
     membership in a health insurance program or the health 
     insurance program is not continued by the Director, the 
     employee shall be permitted to select an alternate Federal 
     health insurance program not later than 30 days after the 
     date of such election or notice, without regard to any other 
     regularly scheduled open season.

                  Subtitle C--Prompt Corrective Action

     SEC. 1141. CRITICAL CAPITAL LEVELS.

       (a) In General.--Section 1363 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4613) is amended--
       (1) by striking ``For'' and inserting ``(a) Enterprises.--
     For''; and
       (2) by adding at the end the following new subsection:
       ``(b) Federal Home Loan Banks.--
       ``(1) In general.--For purposes of this subtitle, the 
     critical capital level for each Federal Home Loan Bank shall 
     be such amount of capital as the Director shall, by 
     regulation, require.
       ``(2) Consideration of other critical capital levels.--In 
     establishing the critical capital level under paragraph (1) 
     for the Federal Home Loan Banks, the Director shall take due 
     consideration of the critical capital level established under 
     subsection (a) for the enterprises, with such modifications 
     as the Director determines to be appropriate to reflect the 
     difference in operations between the banks and the 
     enterprises.''.
       (b) Regulations.--Not later than the expiration of the 180-
     day period beginning on the date of enactment of this Act, 
     the Director of the Federal Housing Finance Agency shall 
     issue regulations pursuant to section 1363(b) of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (as added by this section) establishing the critical 
     capital level under such section.

     SEC. 1142. CAPITAL CLASSIFICATIONS.

       (a) In General.--Section 1364 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4614) is amended--

[[Page 15979]]

       (1) in the heading for subsection (a) by striking ``In 
     General'' and inserting ``Enterprises'';
       (2) in subsection (c)--
       (A) by striking ``subsection (b)'' and inserting 
     ``subsection (c)'';
       (B) by striking ``enterprises'' and inserting ``regulated 
     entities''; and
       (C) by striking the last sentence;
       (3) by redesignating subsections (c) (as so amended by 
     paragraph (2) of this subsection) and (d) as subsections (d) 
     and (f), respectively;
       (4) by striking subsection (b) and inserting the following:
       ``(b) Federal Home Loan Banks.--
       ``(1) Establishment and criteria.--For purposes of this 
     subtitle, the Director shall, by regulation--
       ``(A) establish the capital classifications specified under 
     paragraph (2) for the Federal Home Loan Banks;
       ``(B) establish criteria for each such capital 
     classification based on the amount and types of capital held 
     by a bank and the risk-based, minimum, and critical capital 
     levels for the banks and taking due consideration of the 
     capital classifications established under subsection (a) for 
     the enterprises, with such modifications as the Director 
     determines to be appropriate to reflect the difference in 
     operations between the banks and the enterprises; and
       ``(C) shall classify the Federal Home Loan Banks according 
     to such capital classifications.
       ``(2) Classifications.--The capital classifications 
     specified under this paragraph are--
       ``(A) adequately capitalized;
       ``(B) undercapitalized;
       ``(C) significantly undercapitalized; and
       ``(D) critically undercapitalized.
       ``(c) Discretionary Classification.--
       ``(1) Grounds for reclassification.--The Director may 
     reclassify a regulated entity under paragraph (2) if--
       ``(A) at any time, the Director determines in writing that 
     the regulated entity is engaging in conduct that could result 
     in a rapid depletion of core or total capital or the value of 
     collateral pledged as security has decreased significantly or 
     that the value of the property subject to mortgages held by 
     the regulated entity (or securitized in the case of an 
     enterprise) has decreased significantly;
       ``(B) after notice and an opportunity for hearing, the 
     Director determines that the regulated entity is in an unsafe 
     or unsound condition; or
       ``(C) pursuant to section 1371(b), the Director deems the 
     regulated entity to be engaging in an unsafe or unsound 
     practice.
       ``(2) Reclassification.--In addition to any other action 
     authorized under this title, including the reclassification 
     of a regulated entity for any reason not specified in this 
     subsection, if the Director takes any action described in 
     paragraph (1), the Director may classify a regulated entity--
       ``(A) as undercapitalized, if the regulated entity is 
     otherwise classified as adequately capitalized;
       ``(B) as significantly undercapitalized, if the regulated 
     entity is otherwise classified as undercapitalized; and
       ``(C) as critically undercapitalized, if the regulated 
     entity is otherwise classified as significantly 
     undercapitalized.''; and
       (5) by inserting after subsection (d) (as so redesignated 
     by paragraph (3) of this subsection), the following new 
     subsection:
       ``(e) Restriction on Capital Distributions.--
       ``(1) In general.--A regulated entity shall make no capital 
     distribution if, after making the distribution, the regulated 
     entity would be undercapitalized.
       ``(2) Exception.--Notwithstanding paragraph (1), the 
     Director may permit a regulated entity, to the extent 
     appropriate or applicable, to repurchase, redeem, retire, or 
     otherwise acquire shares or ownership interests if the 
     repurchase, redemption, retirement, or other acquisition--
       ``(A) is made in connection with the issuance of additional 
     shares or obligations of the regulated entity in at least an 
     equivalent amount; and
       ``(B) will reduce the financial obligations of the 
     regulated entity or otherwise improve the financial condition 
     of the entity.''.
       (b) Regulations.--Not later than the expiration of the 180-
     day period beginning on the date of enactment of this Act, 
     the Director of the Federal Housing Finance Agency shall 
     issue regulations to carry out section 1364(b) of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (as added by this section), relating to capital 
     classifications for the Federal Home Loan Banks.

     SEC. 1143. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED 
                   REGULATED ENTITIES.

       Section 1365 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4615) is 
     amended--
       (1) by striking ``the enterprise'' each place that term 
     appears and inserting ``the regulated entity'';
       (2) by striking ``An enterprise'' each place that term 
     appears and inserting ``A regulated entity'';
       (3) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity'';
       (4) in subsection (a)--
       (A) by redesignating paragraphs (1) and (2) as paragraphs 
     (2) and (3), respectively;
       (B) by inserting before paragraph (2), as redesignated, the 
     following:
       ``(1) Required monitoring.--The Director shall--
       ``(A) closely monitor the condition of any undercapitalized 
     regulated entity;
       ``(B) closely monitor compliance with the capital 
     restoration plan, restrictions, and requirements imposed on 
     an undercapitalized regulated entity under this section; and
       ``(C) periodically review the plan, restrictions, and 
     requirements applicable to an undercapitalized regulated 
     entity to determine whether the plan, restrictions, and 
     requirements are achieving the purpose of this section.''; 
     and
       (C) by adding at the end the following:
       ``(4) Restriction of asset growth.--An undercapitalized 
     regulated entity shall not permit its average total assets 
     during any calendar quarter to exceed its average total 
     assets during the preceding calendar quarter, unless--
       ``(A) the Director has accepted the capital restoration 
     plan of the regulated entity;
       ``(B) any increase in total assets is consistent with the 
     capital restoration plan; and
       ``(C) the ratio of tangible equity to assets of the 
     regulated entity increases during the calendar quarter at a 
     rate sufficient to enable the regulated entity to become 
     adequately capitalized within a reasonable time.
       ``(5) Prior approval of acquisitions and new activities.--
     An undercapitalized regulated entity shall not, directly or 
     indirectly, acquire any interest in any entity or engage in 
     any new activity, unless--
       ``(A) the Director has accepted the capital restoration 
     plan of the regulated entity, the regulated entity is 
     implementing the plan, and the Director determines that the 
     proposed action is consistent with and will further the 
     achievement of the plan; or
       ``(B) the Director determines that the proposed action will 
     further the purpose of this subtitle.'';
       (5) in subsection (b)--
       (A) in the subsection heading, by striking 
     ``Discretionary'';
       (B) in the matter preceding paragraph (1), by striking 
     ``may'' and inserting ``shall''; and
       (C) in paragraph (2)--
       (i) by striking ``make, in good faith, reasonable efforts 
     necessary to''; and
       (ii) by striking the period at the end and inserting ``in 
     any material respect.''; and
       (6) by striking subsection (c) and inserting the following:
       ``(c) Other Discretionary Safeguards.--The Director may 
     take, with respect to an undercapitalized regulated entity, 
     any of the actions authorized to be taken under section 1366 
     with respect to a significantly undercapitalized regulated 
     entity, if the Director determines that such actions are 
     necessary to carry out the purpose of this subtitle.''.

     SEC. 1144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
                   UNDERCAPITALIZED REGULATED ENTITIES.

       Section 1366 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4616) is 
     amended--
       (1) in subsection (a)(2), by striking ``undercapitalized 
     enterprise'' and inserting ``undercapitalized'';
       (2) by striking ``the enterprise'' each place that term 
     appears and inserting ``the regulated entity'';
       (3) by striking ``An enterprise'' each place that term 
     appears and inserting ``A regulated entity'';
       (4) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity'';
       (5) in subsection (b)--
       (A) in the subsection heading, by striking ``Discretionary 
     Supervisory'' and inserting ``Specific'';
       (B) in the matter preceding paragraph (1), by striking 
     ``may, at any time, take any'' and inserting ``shall carry 
     out this section by taking, at any time, 1 or more'';
       (C) by striking paragraph (6);
       (D) by redesignating paragraph (5) as paragraph (6);
       (E) by inserting after paragraph (4) the following:
       ``(5) Improvement of management.--Take 1 or more of the 
     following actions:
       ``(A) New election of board.--Order a new election for the 
     board of directors of the regulated entity.
       ``(B) Dismissal of directors or executive officers.--
     Require the regulated entity to dismiss from office any 
     director or executive officer who had held office for more 
     than 180 days immediately before the date on which the 
     regulated entity became undercapitalized. Dismissal under 
     this subparagraph shall not be construed to be a removal 
     pursuant to the enforcement powers of the Director under 
     section 1377.
       ``(C) Employ qualified executive officers.--Require the 
     regulated entity to employ qualified executive officers (who, 
     if the Director so specifies, shall be subject to approval by 
     the Director).''; and
       (F) by adding at the end the following:
       ``(7) Other action.--Require the regulated entity to take 
     any other action that the Director determines will better 
     carry out the purpose of this section than any of the other 
     actions specified in this subsection.''; and
       (6) by striking subsection (c) and inserting the following:

[[Page 15980]]

       ``(c) Restriction on Compensation of Executive Officers.--A 
     regulated entity that is classified as significantly 
     undercapitalized in accordance with section 1364 may not, 
     without prior written approval by the Director--
       ``(1) pay any bonus to any executive officer; or
       ``(2) provide compensation to any executive officer at a 
     rate exceeding the average rate of compensation of that 
     officer (excluding bonuses, stock options, and profit 
     sharing) during the 12 calendar months preceding the calendar 
     month in which the regulated entity became significantly 
     undercapitalized.''.

     SEC. 1145. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED 
                   REGULATED ENTITIES.

       (a) In General.--Section 1367 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4617) is amended to read as follows:

     ``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED 
                   REGULATED ENTITIES.

       ``(a) Appointment of the Agency as Conservator or 
     Receiver.--
       ``(1) In general.--Notwithstanding any other provision of 
     Federal or State law, the Director may appoint the Agency as 
     conservator or receiver for a regulated entity in the manner 
     provided under paragraph (2) or (4). All references to the 
     conservator or receiver under this section are references to 
     the Agency acting as conservator or receiver.
       ``(2) Discretionary appointment.--The Agency may, at the 
     discretion of the Director, be appointed conservator or 
     receiver for the purpose of reorganizing, rehabilitating, or 
     winding up the affairs of a regulated entity.
       ``(3) Grounds for discretionary appointment of conservator 
     or receiver.--The grounds for appointing conservator or 
     receiver for any regulated entity under paragraph (2) are as 
     follows:
       ``(A) Assets insufficient for obligations.--The assets of 
     the regulated entity are less than the obligations of the 
     regulated entity to its creditors and others.
       ``(B) Substantial dissipation.--Substantial dissipation of 
     assets or earnings due to--
       ``(i) any violation of any provision of Federal or State 
     law; or
       ``(ii) any unsafe or unsound practice.
       ``(C) Unsafe or unsound condition.--An unsafe or unsound 
     condition to transact business.
       ``(D) Cease and desist orders.--Any willful violation of a 
     cease and desist order that has become final.
       ``(E) Concealment.--Any concealment of the books, papers, 
     records, or assets of the regulated entity, or any refusal to 
     submit the books, papers, records, or affairs of the 
     regulated entity, for inspection to any examiner or to any 
     lawful agent of the Director.
       ``(F) Inability to meet obligations.--The regulated entity 
     is likely to be unable to pay its obligations or meet the 
     demands of its creditors in the normal course of business.
       ``(G) Losses.--The regulated entity has incurred or is 
     likely to incur losses that will deplete all or substantially 
     all of its capital, and there is no reasonable prospect for 
     the regulated entity to become adequately capitalized (as 
     defined in section 1364(a)(1)).
       ``(H) Violations of law.--Any violation of any law or 
     regulation, or any unsafe or unsound practice or condition 
     that is likely to--
       ``(i) cause insolvency or substantial dissipation of assets 
     or earnings; or
       ``(ii) weaken the condition of the regulated entity.
       ``(I) Consent.--The regulated entity, by resolution of its 
     board of directors or its shareholders or members, consents 
     to the appointment.
       ``(J) Undercapitalization.--The regulated entity is 
     undercapitalized or significantly undercapitalized (as 
     defined in section 1364(a)(3)), and--
       ``(i) has no reasonable prospect of becoming adequately 
     capitalized;
       ``(ii) fails to become adequately capitalized, as required 
     by--

       ``(I) section 1365(a)(1) with respect to a regulated 
     entity; or
       ``(II) section 1366(a)(1) with respect to a significantly 
     undercapitalized regulated entity;

       ``(iii) fails to submit a capital restoration plan 
     acceptable to the Agency within the time prescribed under 
     section 1369C; or
       ``(iv) materially fails to implement a capital restoration 
     plan submitted and accepted under section 1369C.
       ``(K) Critical undercapitalization.--The regulated entity 
     is critically undercapitalized, as defined in section 
     1364(a)(4).
       ``(L) Money laundering.--The Attorney General notifies the 
     Director in writing that the regulated entity has been found 
     guilty of a criminal offense under section 1956 or 1957 of 
     title 18, United States Code, or section 5322 or 5324 of 
     title 31, United States Code.
       ``(4) Mandatory receivership.--
       ``(A) In general.--The Director shall appoint the Agency as 
     receiver for a regulated entity if the Director determines, 
     in writing, that--
       ``(i) the assets of the regulated entity are, and during 
     the preceding 60 calendar days have been, less than the 
     obligations of the regulated entity to its creditors and 
     others; or
       ``(ii) the regulated entity is not, and during the 
     preceding 60 calendar days has not been, generally paying the 
     debts of the regulated entity (other than debts that are the 
     subject of a bona fide dispute) as such debts become due.
       ``(B) Periodic determination required for critically 
     undercapitalized regulated entity.--If a regulated entity is 
     critically undercapitalized, the Director shall make a 
     determination, in writing, as to whether the regulated entity 
     meets the criteria specified in clause (i) or (ii) of 
     subparagraph (A)--
       ``(i) not later than 30 calendar days after the regulated 
     entity initially becomes critically undercapitalized; and
       ``(ii) at least once during each succeeding 30-calendar day 
     period.
       ``(C) Determination not required if receivership already in 
     place.--Subparagraph (B) does not apply with respect to a 
     regulated entity in any period during which the Agency serves 
     as receiver for the regulated entity.
       ``(D) Receivership terminates conservatorship.--The 
     appointment of the Agency as receiver of a regulated entity 
     under this section shall immediately terminate any 
     conservatorship established for the regulated entity under 
     this title.
       ``(5) Judicial review.--
       ``(A) In general.--If the Agency is appointed conservator 
     or receiver under this section, the regulated entity may, 
     within 30 days of such appointment, bring an action in the 
     United States district court for the judicial district in 
     which the home office of such regulated entity is located, or 
     in the United States District Court for the District of 
     Columbia, for an order requiring the Agency to remove itself 
     as conservator or receiver.
       ``(B) Review.--Upon the filing of an action under 
     subparagraph (A), the court shall, upon the merits, dismiss 
     such action or direct the Agency to remove itself as such 
     conservator or receiver.
       ``(6) Directors not liable for acquiescing in appointment 
     of conservator or receiver.--The members of the board of 
     directors of a regulated entity shall not be liable to the 
     shareholders or creditors of the regulated entity for 
     acquiescing in or consenting in good faith to the appointment 
     of the Agency as conservator or receiver for that regulated 
     entity.
       ``(7) Agency not subject to any other federal agency.--When 
     acting as conservator or receiver, the Agency shall not be 
     subject to the direction or supervision of any other agency 
     of the United States or any State in the exercise of the 
     rights, powers, and privileges of the Agency.
       ``(b) Powers and Duties of the Agency as Conservator or 
     Receiver.--
       ``(1) Rulemaking authority of the agency.--The Agency may 
     prescribe such regulations as the Agency determines to be 
     appropriate regarding the conduct of conservatorships or 
     receiverships.
       ``(2) General powers.--
       ``(A) Successor to regulated entity.--The Agency shall, as 
     conservator or receiver, and by operation of law, immediately 
     succeed to--
       ``(i) all rights, titles, powers, and privileges of the 
     regulated entity, and of any stockholder, officer, or 
     director of such regulated entity with respect to the 
     regulated entity and the assets of the regulated entity; and
       ``(ii) title to the books, records, and assets of any other 
     legal custodian of such regulated entity.
       ``(B) Operate the regulated entity.--The Agency may, as 
     conservator or receiver--
       ``(i) take over the assets of and operate the regulated 
     entity with all the powers of the shareholders, the 
     directors, and the officers of the regulated entity and 
     conduct all business of the regulated entity;
       ``(ii) collect all obligations and money due the regulated 
     entity;
       ``(iii) perform all functions of the regulated entity in 
     the name of the regulated entity which are consistent with 
     the appointment as conservator or receiver;
       ``(iv) preserve and conserve the assets and property of the 
     regulated entity; and
       ``(v) provide by contract for assistance in fulfilling any 
     function, activity, action, or duty of the Agency as 
     conservator or receiver.
       ``(C) Functions of officers, directors, and shareholders of 
     a regulated entity.--The Agency may, by regulation or order, 
     provide for the exercise of any function by any stockholder, 
     director, or officer of any regulated entity for which the 
     Agency has been named conservator or receiver.
       ``(D) Powers as conservator.--The Agency may, as 
     conservator, take such action as may be--
       ``(i) necessary to put the regulated entity in a sound and 
     solvent condition; and
       ``(ii) appropriate to carry on the business of the 
     regulated entity and preserve and conserve the assets and 
     property of the regulated entity.
       ``(E) Additional powers as receiver.--In any case in which 
     the Agency is acting as receiver, the Agency shall place the 
     regulated entity in liquidation and proceed to realize upon 
     the assets of the regulated entity in such manner as the 
     Agency deems appropriate, including through the sale of 
     assets, the transfer of assets to a limited-life regulated 
     entity established under subsection (i),

[[Page 15981]]

     or the exercise of any other rights or privileges granted to 
     the Agency under this paragraph.
       ``(F) Organization of new enterprise.--The Agency may, as 
     receiver for an enterprise, organize a successor enterprise 
     that will operate pursuant to subsection (i).
       ``(G) Transfer or sale of assets and liabilities.--The 
     Agency may, as conservator or receiver, transfer or sell any 
     asset or liability of the regulated entity in default, and 
     may do so without any approval, assignment, or consent with 
     respect to such transfer or sale.
       ``(H) Payment of valid obligations.--The Agency, as 
     conservator or receiver, shall, to the extent of proceeds 
     realized from the performance of contracts or sale of the 
     assets of a regulated entity, pay all valid obligations of 
     the regulated entity that are due and payable at the time of 
     the appointment of the Agency as conservator or receiver, in 
     accordance with the prescriptions and limitations of this 
     section.
       ``(I) Subpoena authority.--
       ``(i) In general.--

       ``(I) Agency authority.--The Agency may, as conservator or 
     receiver, and for purposes of carrying out any power, 
     authority, or duty with respect to a regulated entity 
     (including determining any claim against the regulated entity 
     and determining and realizing upon any asset of any person in 
     the course of collecting money due the regulated entity), 
     exercise any power established under section 1348.
       ``(II) Applicability of law.--The provisions of section 
     1348 shall apply with respect to the exercise of any power 
     under this subparagraph, in the same manner as such 
     provisions apply under that section.

       ``(ii) Subpoena.--A subpoena or subpoena duces tecum may be 
     issued under clause (i) only by, or with the written approval 
     of, the Director, or the designee of the Director.
       ``(iii) Rule of construction.--This subsection shall not be 
     construed to limit any rights that the Agency, in any 
     capacity, might otherwise have under section 1317 or 1379B.
       ``(J) Incidental powers.--The Agency may, as conservator or 
     receiver--
       ``(i) exercise all powers and authorities specifically 
     granted to conservators or receivers, respectively, under 
     this section, and such incidental powers as shall be 
     necessary to carry out such powers; and
       ``(ii) take any action authorized by this section, which 
     the Agency determines is in the best interests of the 
     regulated entity or the Agency.
       ``(K) Other provisions.--
       ``(i) Shareholders and creditors of failed regulated 
     entity.--Notwithstanding any other provision of law, the 
     appointment of the Agency as receiver for a regulated entity 
     pursuant to paragraph (2) or (4) of subsection (a) and its 
     succession, by operation of law, to the rights, titles, 
     powers, and privileges described in subsection (b)(2)(A) 
     shall terminate all rights and claims that the stockholders 
     and creditors of the regulated entity may have against the 
     assets or charter of the regulated entity or the Agency 
     arising as a result of their status as stockholders or 
     creditors, except for their right to payment, resolution, or 
     other satisfaction of their claims, as permitted under 
     subsections (b)(9), (c), and (e).
       ``(ii) Assets of regulated entity.--Notwithstanding any 
     other provision of law, for purposes of this section, the 
     charter of a regulated entity shall not be considered an 
     asset of the regulated entity.
       ``(3) Authority of receiver to determine claims.--
       ``(A) In general.--The Agency may, as receiver, determine 
     claims in accordance with the requirements of this subsection 
     and any regulations prescribed under paragraph (4).
       ``(B) Notice requirements.--The receiver, in any case 
     involving the liquidation or winding up of the affairs of a 
     closed regulated entity, shall--
       ``(i) promptly publish a notice to the creditors of the 
     regulated entity to present their claims, together with 
     proof, to the receiver by a date specified in the notice 
     which shall be not less than 90 days after the date of 
     publication of such notice; and
       ``(ii) republish such notice approximately 1 month and 2 
     months, respectively, after the date of publication under 
     clause (i).
       ``(C) Mailing required.--The receiver shall mail a notice 
     similar to the notice published under subparagraph (B)(i) at 
     the time of such publication to any creditor shown on the 
     books of the regulated entity--
       ``(i) at the last address of the creditor appearing in such 
     books; or
       ``(ii) upon discovery of the name and address of a claimant 
     not appearing on the books of the regulated entity, within 30 
     days after the discovery of such name and address.
       ``(4) Rulemaking authority relating to determination of 
     claims.--Subject to subsection (c), the Director may 
     prescribe regulations regarding the allowance or disallowance 
     of claims by the receiver and providing for administrative 
     determination of claims and review of such determination.
       ``(5) Procedures for determination of claims.--
       ``(A) Determination period.--
       ``(i) In general.--Before the end of the 180-day period 
     beginning on the date on which any claim against a regulated 
     entity is filed with the Agency as receiver, the Agency shall 
     determine whether to allow or disallow the claim and shall 
     notify the claimant of any determination with respect to such 
     claim.
       ``(ii) Extension of time.--The period described in clause 
     (i) may be extended by a written agreement between the 
     claimant and the Agency.
       ``(iii) Mailing of notice sufficient.--The requirements of 
     clause (i) shall be deemed to be satisfied if the notice of 
     any determination with respect to any claim is mailed to the 
     last address of the claimant which appears--

       ``(I) on the books of the regulated entity;
       ``(II) in the claim filed by the claimant; or
       ``(III) in documents submitted in proof of the claim.

       ``(iv) Contents of notice of disallowance.--If any claim 
     filed under clause (i) is disallowed, the notice to the 
     claimant shall contain--

       ``(I) a statement of each reason for the disallowance; and
       ``(II) the procedures available for obtaining agency review 
     of the determination to disallow the claim or judicial 
     determination of the claim.

       ``(B) Allowance of proven claim.--The receiver shall allow 
     any claim received on or before the date specified in the 
     notice published under paragraph (3)(B)(i) by the receiver 
     from any claimant which is proved to the satisfaction of the 
     receiver.
       ``(C) Disallowance of claims filed after filing period.--
     Claims filed after the date specified in the notice published 
     under paragraph (3)(B)(i), or the date specified under 
     paragraph (3)(C), shall be disallowed and such disallowance 
     shall be final.
       ``(D) Authority to disallow claims.--
       ``(i) In general.--The receiver may disallow any portion of 
     any claim by a creditor or claim of security, preference, or 
     priority which is not proved to the satisfaction of the 
     receiver.
       ``(ii) Payments to less than fully secured creditors.--In 
     the case of a claim of a creditor against a regulated entity 
     which is secured by any property or other asset of such 
     regulated entity, the receiver--

       ``(I) may treat the portion of such claim which exceeds an 
     amount equal to the fair market value of such property or 
     other asset as an unsecured claim against the regulated 
     entity; and
       ``(II) may not make any payment with respect to such 
     unsecured portion of the claim, other than in connection with 
     the disposition of all claims of unsecured creditors of the 
     regulated entity.

       ``(iii) Exceptions.--No provision of this paragraph shall 
     apply with respect to--

       ``(I) any extension of credit from any Federal Reserve 
     Bank, Federal Home Loan Bank, or the United States Treasury; 
     or
       ``(II) any security interest in the assets of the regulated 
     entity securing any such extension of credit.

       ``(E) No judicial review of determination pursuant to 
     subparagraph (d).--No court may review the determination of 
     the Agency under subparagraph (D) to disallow a claim.
       ``(F) Legal effect of filing.--
       ``(i) Statute of limitation tolled.--For purposes of any 
     applicable statute of limitations, the filing of a claim with 
     the receiver shall constitute a commencement of an action.
       ``(ii) No prejudice to other actions.--Subject to paragraph 
     (10), the filing of a claim with the receiver shall not 
     prejudice any right of the claimant to continue any action 
     which was filed before the date of the appointment of the 
     receiver, subject to the determination of claims by the 
     receiver.
       ``(6) Provision for judicial determination of claims.--
       ``(A) In general.--The claimant may file suit on a claim 
     (or continue an action commenced before the appointment of 
     the receiver) in the district or territorial court of the 
     United States for the district within which the principal 
     place of business of the regulated entity is located or the 
     United States District Court for the District of Columbia 
     (and such court shall have jurisdiction to hear such claim), 
     before the end of the 60-day period beginning on the earlier 
     of--
       ``(i) the end of the period described in paragraph 
     (5)(A)(i) with respect to any claim against a regulated 
     entity for which the Agency is receiver; or
       ``(ii) the date of any notice of disallowance of such claim 
     pursuant to paragraph (5)(A)(i).
       ``(B) Statute of limitations.--A claim shall be deemed to 
     be disallowed (other than any portion of such claim which was 
     allowed by the receiver), and such disallowance shall be 
     final, and the claimant shall have no further rights or 
     remedies with respect to such claim, if the claimant fails, 
     before the end of the 60-day period described under 
     subparagraph (A), to file suit on such claim (or continue an 
     action commenced before the appointment of the receiver).
       ``(7) Review of claims.--
       ``(A) Other review procedures.--
       ``(i) In general.--The Agency shall establish such 
     alternative dispute resolution processes as may be 
     appropriate for the resolution of claims filed under 
     paragraph (5)(A)(i).
       ``(ii) Criteria.--In establishing alternative dispute 
     resolution processes, the Agency

[[Page 15982]]

     shall strive for procedures which are expeditious, fair, 
     independent, and low cost.
       ``(iii) Voluntary binding or nonbinding procedures.--The 
     Agency may establish both binding and nonbinding processes 
     under this subparagraph, which may be conducted by any 
     government or private party. All parties, including the 
     claimant and the Agency, must agree to the use of the process 
     in a particular case.
       ``(B) Consideration of incentives.--The Agency shall seek 
     to develop incentives for claimants to participate in the 
     alternative dispute resolution process.
       ``(8) Expedited determination of claims.--
       ``(A) Establishment required.--The Agency shall establish a 
     procedure for expedited relief outside of the routine claims 
     process established under paragraph (5) for claimants who--
       ``(i) allege the existence of legally valid and enforceable 
     or perfected security interests in assets of any regulated 
     entity for which the Agency has been appointed receiver; and
       ``(ii) allege that irreparable injury will occur if the 
     routine claims procedure is followed.
       ``(B) Determination period.--Before the end of the 90-day 
     period beginning on the date on which any claim is filed in 
     accordance with the procedures established under subparagraph 
     (A), the Director shall--
       ``(i) determine--

       ``(I) whether to allow or disallow such claim; or
       ``(II) whether such claim should be determined pursuant to 
     the procedures established under paragraph (5); and

       ``(ii) notify the claimant of the determination, and if the 
     claim is disallowed, provide a statement of each reason for 
     the disallowance and the procedure for obtaining agency 
     review or judicial determination.
       ``(C) Period for filing or renewing suit.--Any claimant who 
     files a request for expedited relief shall be permitted to 
     file a suit, or to continue a suit filed before the date of 
     appointment of the receiver, seeking a determination of the 
     rights of the claimant with respect to such security interest 
     after the earlier of--
       ``(i) the end of the 90-day period beginning on the date of 
     the filing of a request for expedited relief; or
       ``(ii) the date on which the Agency denies the claim.
       ``(D) Statute of limitations.--If an action described under 
     subparagraph (C) is not filed, or the motion to renew a 
     previously filed suit is not made, before the end of the 30-
     day period beginning on the date on which such action or 
     motion may be filed under subparagraph (B), the claim shall 
     be deemed to be disallowed as of the end of such period 
     (other than any portion of such claim which was allowed by 
     the receiver), such disallowance shall be final, and the 
     claimant shall have no further rights or remedies with 
     respect to such claim.
       ``(E) Legal effect of filing.--
       ``(i) Statute of limitation tolled.--For purposes of any 
     applicable statute of limitations, the filing of a claim with 
     the receiver shall constitute a commencement of an action.
       ``(ii) No prejudice to other actions.--Subject to paragraph 
     (10), the filing of a claim with the receiver shall not 
     prejudice any right of the claimant to continue any action 
     that was filed before the appointment of the receiver, 
     subject to the determination of claims by the receiver.
       ``(9) Payment of claims.--
       ``(A) In general.--The receiver may, in the discretion of 
     the receiver, and to the extent that funds are available from 
     the assets of the regulated entity, pay creditor claims, in 
     such manner and amounts as are authorized under this section, 
     which are--
       ``(i) allowed by the receiver;
       ``(ii) approved by the Agency pursuant to a final 
     determination pursuant to paragraph (7) or (8); or
       ``(iii) determined by the final judgment of any court of 
     competent jurisdiction.
       ``(B) Agreements against the interest of the agency.--No 
     agreement that tends to diminish or defeat the interest of 
     the Agency in any asset acquired by the Agency as receiver 
     under this section shall be valid against the Agency unless 
     such agreement is in writing and executed by an authorized 
     officer or representative of the regulated entity.
       ``(C) Payment of dividends on claims.--The receiver may, in 
     the sole discretion of the receiver, pay from the assets of 
     the regulated entity dividends on proved claims at any time, 
     and no liability shall attach to the Agency by reason of any 
     such payment, for failure to pay dividends to a claimant 
     whose claim is not proved at the time of any such payment.
       ``(D) Rulemaking authority of the director.--The Director 
     may prescribe such rules, including definitions of terms, as 
     the Director deems appropriate to establish a single uniform 
     interest rate for, or to make payments of post-insolvency 
     interest to creditors holding proven claims against the 
     receivership estates of the regulated entity, following 
     satisfaction by the receiver of the principal amount of all 
     creditor claims.
       ``(10) Suspension of legal actions.--
       ``(A) In general.--After the appointment of a conservator 
     or receiver for a regulated entity, the conservator or 
     receiver may, in any judicial action or proceeding to which 
     such regulated entity is or becomes a party, request a stay 
     for a period not to exceed--
       ``(i) 45 days, in the case of any conservator; and
       ``(ii) 90 days, in the case of any receiver.
       ``(B) Grant of stay by all courts required.--Upon receipt 
     of a request by the conservator or receiver under 
     subparagraph (A) for a stay of any judicial action or 
     proceeding in any court with jurisdiction of such action or 
     proceeding, the court shall grant such stay as to all 
     parties.
       ``(11) Additional rights and duties.--
       ``(A) Prior final adjudication.--The Agency shall abide by 
     any final unappealable judgment of any court of competent 
     jurisdiction which was rendered before the appointment of the 
     Agency as conservator or receiver.
       ``(B) Rights and remedies of conservator or receiver.--In 
     the event of any appealable judgment, the Agency as 
     conservator or receiver--
       ``(i) shall have all of the rights and remedies available 
     to the regulated entity (before the appointment of such 
     conservator or receiver) and the Agency, including removal to 
     Federal court and all appellate rights; and
       ``(ii) shall not be required to post any bond in order to 
     pursue such remedies.
       ``(C) No attachment or execution.--No attachment or 
     execution may issue by any court upon assets in the 
     possession of the receiver, or upon the charter, of a 
     regulated entity for which the Agency has been appointed 
     receiver.
       ``(D) Limitation on judicial review.--Except as otherwise 
     provided in this subsection, no court shall have jurisdiction 
     over--
       ``(i) any claim or action for payment from, or any action 
     seeking a determination of rights with respect to, the assets 
     or charter of any regulated entity for which the Agency has 
     been appointed receiver; or
       ``(ii) any claim relating to any act or omission of such 
     regulated entity or the Agency as receiver.
       ``(E) Disposition of assets.--In exercising any right, 
     power, privilege, or authority as conservator or receiver in 
     connection with any sale or disposition of assets of a 
     regulated entity for which the Agency has been appointed 
     conservator or receiver, the Agency shall conduct its 
     operations in a manner which--
       ``(i) maximizes the net present value return from the sale 
     or disposition of such assets;
       ``(ii) minimizes the amount of any loss realized in the 
     resolution of cases; and
       ``(iii) ensures adequate competition and fair and 
     consistent treatment of offerors.
       ``(12) Statute of limitations for actions brought by 
     conservator or receiver.--
       ``(A) In general.--Notwithstanding any provision of any 
     contract, the applicable statute of limitations with regard 
     to any action brought by the Agency as conservator or 
     receiver shall be--
       ``(i) in the case of any contract claim, the longer of--

       ``(I) the 6-year period beginning on the date on which the 
     claim accrues; or
       ``(II) the period applicable under State law; and

       ``(ii) in the case of any tort claim, the longer of--

       ``(I) the 3-year period beginning on the date on which the 
     claim accrues; or
       ``(II) the period applicable under State law.

       ``(B) Determination of the date on which a claim accrues.--
     For purposes of subparagraph (A), the date on which the 
     statute of limitations begins to run on any claim described 
     in such subparagraph shall be the later of--
       ``(i) the date of the appointment of the Agency as 
     conservator or receiver; or
       ``(ii) the date on which the cause of action accrues.
       ``(13) Revival of expired state causes of action.--
       ``(A) In general.--In the case of any tort claim described 
     under clause (ii) for which the statute of limitations 
     applicable under State law with respect to such claim has 
     expired not more than 5 years before the appointment of the 
     Agency as conservator or receiver, the Agency may bring an 
     action as conservator or receiver on such claim without 
     regard to the expiration of the statute of limitations 
     applicable under State law.
       ``(B) Claims described.--A tort claim referred to under 
     clause (i) is a claim arising from fraud, intentional 
     misconduct resulting in unjust enrichment, or intentional 
     misconduct resulting in substantial loss to the regulated 
     entity.
       ``(14) Accounting and recordkeeping requirements.--
       ``(A) In general.--The Agency as conservator or receiver 
     shall, consistent with the accounting and reporting practices 
     and procedures established by the Agency, maintain a full 
     accounting of each conservatorship and receivership or other 
     disposition of a regulated entity in default.
       ``(B) Annual accounting or report.--With respect to each 
     conservatorship or receivership, the Agency shall make an 
     annual accounting or report available to the Board,

[[Page 15983]]

     the Comptroller General of the United States, the Committee 
     on Banking, Housing, and Urban Affairs of the Senate, and the 
     Committee on Financial Services of the House of 
     Representatives.
       ``(C) Availability of reports.--Any report prepared under 
     subparagraph (B) shall be made available by the Agency upon 
     request to any shareholder of a regulated entity or any 
     member of the public.
       ``(D) Recordkeeping requirement.--After the end of the 6-
     year period beginning on the date on which the 
     conservatorship or receivership is terminated by the 
     Director, the Agency may destroy any records of such 
     regulated entity which the Agency, in the discretion of the 
     Agency, determines to be unnecessary, unless directed not to 
     do so by a court of competent jurisdiction or governmental 
     agency, or prohibited by law.
       ``(15) Fraudulent transfers.--
       ``(A) In general.--The Agency, as conservator or receiver, 
     may avoid a transfer of any interest of an entity-affiliated 
     party, or any person determined by the conservator or 
     receiver to be a debtor of the regulated entity, in property, 
     or any obligation incurred by such party or person, that was 
     made within 5 years of the date on which the Agency was 
     appointed conservator or receiver, if such party or person 
     voluntarily or involuntarily made such transfer or incurred 
     such liability with the intent to hinder, delay, or defraud 
     the regulated entity, the Agency, the conservator, or 
     receiver.
       ``(B) Right of recovery.--To the extent a transfer is 
     avoided under subparagraph (A), the conservator or receiver 
     may recover, for the benefit of the regulated entity, the 
     property transferred, or, if a court so orders, the value of 
     such property (at the time of such transfer) from--
       ``(i) the initial transferee of such transfer or the 
     entity-affiliated party or person for whose benefit such 
     transfer was made; or
       ``(ii) any immediate or mediate transferee of any such 
     initial transferee.
       ``(C) Rights of transferee or obligee.--The conservator or 
     receiver may not recover under subparagraph (B) from--
       ``(i) any transferee that takes for value, including 
     satisfaction or securing of a present or antecedent debt, in 
     good faith; or
       ``(ii) any immediate or mediate good faith transferee of 
     such transferee.
       ``(D) Rights under this paragraph.--The rights under this 
     paragraph of the conservator or receiver described under 
     subparagraph (A) shall be superior to any rights of a trustee 
     or any other party (other than any party which is a Federal 
     agency) under title 11, United States Code.
       ``(16) Attachment of assets and other injunctive relief.--
     Subject to paragraph (17), any court of competent 
     jurisdiction may, at the request of the conservator or 
     receiver, issue an order in accordance with rule 65 of the 
     Federal Rules of Civil Procedure, including an order placing 
     the assets of any person designated by the conservator or 
     receiver under the control of the court, and appointing a 
     trustee to hold such assets.
       ``(17) Standards of proof.--Rule 65 of the Federal Rules of 
     Civil Procedure shall apply with respect to any proceeding 
     under paragraph (16) without regard to the requirement of 
     such rule that the applicant show that the injury, loss, or 
     damage is irreparable and immediate.
       ``(18) Treatment of claims arising from breach of contracts 
     executed by the conservator or receiver.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, any final and unappealable judgment for 
     monetary damages entered against the conservator or receiver 
     for the breach of an agreement executed or approved in 
     writing by the conservator or receiver after the date of its 
     appointment, shall be paid as an administrative expense of 
     the conservator or receiver.
       ``(B) No limitation of power.--Nothing in this paragraph 
     shall be construed to limit the power of the conservator or 
     receiver to exercise any rights under contract or law, 
     including to terminate, breach, cancel, or otherwise 
     discontinue such agreement.
       ``(19) General exceptions.--
       ``(A) Limitations.--The rights of the conservator or 
     receiver appointed under this section shall be subject to the 
     limitations on the powers of a receiver under sections 402 
     through 407 of the Federal Deposit Insurance Corporation 
     Improvement Act of 1991 (12 U.S.C. 4402 through 4407).
       ``(B) Mortgages held in trust.--
       ``(i) In general.--Any mortgage, pool of mortgages, or 
     interest in a pool of mortgages held in trust, custodial, or 
     agency capacity by a regulated entity for the benefit of any 
     person other than the regulated entity shall not be available 
     to satisfy the claims of creditors generally, except that 
     nothing in this clause shall be construed to expand or 
     otherwise affect the authority of any regulated entity.
       ``(ii) Holding of mortgages.--Any mortgage, pool of 
     mortgages, or interest in a pool of mortgages described in 
     clause (i) shall be held by the conservator or receiver 
     appointed under this section for the beneficial owners of 
     such mortgage, pool of mortgages, or interest in accordance 
     with the terms of the agreement creating such trust, 
     custodial, or other agency arrangement.
       ``(iii) Liability of conservator or receiver.--The 
     liability of the conservator or receiver appointed under this 
     section for damages shall, in the case of any contingent or 
     unliquidated claim relating to the mortgages held in trust, 
     be estimated in accordance with the regulations of the 
     Director.
       ``(c) Priority of Expenses and Unsecured Claims.--
       ``(1) In general.--Unsecured claims against a regulated 
     entity, or the receiver therefor, that are proven to the 
     satisfaction of the receiver shall have priority in the 
     following order:
       ``(A) Administrative expenses of the receiver.
       ``(B) Any other general or senior liability of the 
     regulated entity (which is not a liability described under 
     subparagraph (C) or (D).
       ``(C) Any obligation subordinated to general creditors 
     (which is not an obligation described under subparagraph 
     (D)).
       ``(D) Any obligation to shareholders or members arising as 
     a result of their status as shareholder or members.
       ``(2) Creditors similarly situated.--All creditors that are 
     similarly situated under paragraph (1) shall be treated in a 
     similar manner, except that the receiver may take any action 
     (including making payments) that does not comply with this 
     subsection, if--
       ``(A) the Director determines that such action is necessary 
     to maximize the value of the assets of the regulated entity, 
     to maximize the present value return from the sale or other 
     disposition of the assets of the regulated entity, or to 
     minimize the amount of any loss realized upon the sale or 
     other disposition of the assets of the regulated entity; and
       ``(B) all creditors that are similarly situated under 
     paragraph (1) receive not less than the amount provided in 
     subsection (e)(2).
       ``(3) Definition.--As used in this subsection, the term 
     `administrative expenses of the receiver' includes--
       ``(A) the actual, necessary costs and expenses incurred by 
     the receiver in preserving the assets of a failed regulated 
     entity or liquidating or otherwise resolving the affairs of a 
     failed regulated entity; and
       ``(B) any obligations that the receiver determines are 
     necessary and appropriate to facilitate the smooth and 
     orderly liquidation or other resolution of the regulated 
     entity.
       ``(d) Provisions Relating to Contracts Entered Into Before 
     Appointment of Conservator or Receiver.--
       ``(1) Authority to repudiate contracts.--In addition to any 
     other rights a conservator or receiver may have, the 
     conservator or receiver for any regulated entity may 
     disaffirm or repudiate any contract or lease--
       ``(A) to which such regulated entity is a party;
       ``(B) the performance of which the conservator or receiver, 
     in its sole discretion, determines to be burdensome; and
       ``(C) the disaffirmance or repudiation of which the 
     conservator or receiver determines, in its sole discretion, 
     will promote the orderly administration of the affairs of the 
     regulated entity.
       ``(2) Timing of repudiation.--The conservator or receiver 
     shall determine whether or not to exercise the rights of 
     repudiation under this subsection within a reasonable period 
     following such appointment.
       ``(3) Claims for damages for repudiation.--
       ``(A) In general.--Except as otherwise provided under 
     subparagraph (C) and paragraphs (4), (5), and (6), the 
     liability of the conservator or receiver for the 
     disaffirmance or repudiation of any contract pursuant to 
     paragraph (1) shall be--
       ``(i) limited to actual direct compensatory damages; and
       ``(ii) determined as of--

       ``(I) the date of the appointment of the conservator or 
     receiver; or
       ``(II) in the case of any contract or agreement referred to 
     in paragraph (8), the date of the disaffirmance or 
     repudiation of such contract or agreement.

       ``(B) No liability for other damages.--For purposes of 
     subparagraph (A), the term `actual direct compensatory 
     damages' shall not include--
       ``(i) punitive or exemplary damages;
       ``(ii) damages for lost profits or opportunity; or
       ``(iii) damages for pain and suffering.
       ``(C) Measure of damages for repudiation of financial 
     contracts.--In the case of any qualified financial contract 
     or agreement to which paragraph (8) applies, compensatory 
     damages shall be--
       ``(i) deemed to include normal and reasonable costs of 
     cover or other reasonable measures of damages utilized in the 
     industries for such contract and agreement claims; and
       ``(ii) paid in accordance with this subsection and 
     subsection (e), except as otherwise specifically provided in 
     this section.
       ``(4) Leases under which the regulated entity is the 
     lessee.--
       ``(A) In general.--If the conservator or receiver 
     disaffirms or repudiates a lease under which the regulated 
     entity was the lessee, the conservator or receiver shall not 
     be liable for any damages (other than damages determined 
     under subparagraph (B)) for the disaffirmance or repudiation 
     of such lease.

[[Page 15984]]

       ``(B) Payments of rent.--Notwithstanding subparagraph (A), 
     the lessor under a lease to which that subparagraph applies 
     shall--
       ``(i) be entitled to the contractual rent accruing before 
     the later of the date on which--

       ``(I) the notice of disaffirmance or repudiation is mailed; 
     or
       ``(II) the disaffirmance or repudiation becomes effective, 
     unless the lessor is in default or breach of the terms of the 
     lease;

       ``(ii) have no claim for damages under any acceleration 
     clause or other penalty provision in the lease; and
       ``(iii) have a claim for any unpaid rent, subject to all 
     appropriate offsets and defenses, due as of the date of the 
     appointment, which shall be paid in accordance with this 
     subsection and subsection (e).
       ``(5) Leases under which the regulated entity is the 
     lessor.--
       ``(A) In general.--If the conservator or receiver 
     repudiates an unexpired written lease of real property of the 
     regulated entity under which the regulated entity is the 
     lessor and the lessee is not, as of the date of such 
     repudiation, in default, the lessee under such lease may 
     either--
       ``(i) treat the lease as terminated by such repudiation; or
       ``(ii) remain in possession of the leasehold interest for 
     the balance of the term of the lease, unless the lessee 
     defaults under the terms of the lease after the date of such 
     repudiation.
       ``(B) Provisions applicable to lessee remaining in 
     possession.--If any lessee under a lease described under 
     subparagraph (A) remains in possession of a leasehold 
     interest under clause (ii) of subparagraph (A)--
       ``(i) the lessee--

       ``(I) shall continue to pay the contractual rent pursuant 
     to the terms of the lease after the date of the repudiation 
     of such lease; and
       ``(II) may offset against any rent payment which accrues 
     after the date of the repudiation of the lease, and any 
     damages which accrue after such date due to the 
     nonperformance of any obligation of the regulated entity 
     under the lease after such date; and

       ``(ii) the conservator or receiver shall not be liable to 
     the lessee for any damages arising after such date as a 
     result of the repudiation, other than the amount of any 
     offset allowed under clause (i)(II).
       ``(6) Contracts for the sale of real property.--
       ``(A) In general.--If the conservator or receiver 
     repudiates any contract for the sale of real property and the 
     purchaser of such real property under such contract is in 
     possession, and is not, as of the date of such repudiation, 
     in default, such purchaser may either--
       ``(i) treat the contract as terminated by such repudiation; 
     or
       ``(ii) remain in possession of such real property.
       ``(B) Provisions applicable to purchaser remaining in 
     possession.--If any purchaser of real property under any 
     contract described under subparagraph (A) remains in 
     possession of such property under clause (ii) of subparagraph 
     (A)--
       ``(i) the purchaser--

       ``(I) shall continue to make all payments due under the 
     contract after the date of the repudiation of the contract; 
     and
       ``(II) may offset against any such payments any damages 
     which accrue after such date due to the nonperformance (after 
     such date) of any obligation of the regulated entity under 
     the contract; and

       ``(ii) the conservator or receiver shall--

       ``(I) not be liable to the purchaser for any damages 
     arising after such date as a result of the repudiation, other 
     than the amount of any offset allowed under clause (i)(II);
       ``(II) deliver title to the purchaser in accordance with 
     the provisions of the contract; and
       ``(III) have no obligation under the contract other than 
     the performance required under subclause (II).

       ``(C) Assignment and sale allowed.--
       ``(i) In general.--No provision of this paragraph shall be 
     construed as limiting the right of the conservator or 
     receiver to assign the contract described under subparagraph 
     (A), and sell the property subject to the contract and the 
     provisions of this paragraph.
       ``(ii) No liability after assignment and sale.--If an 
     assignment and sale described under clause (i) is 
     consummated, the conservator or receiver shall have no 
     further liability under the contract described under 
     subparagraph (A), or with respect to the real property which 
     was the subject of such contract.
       ``(7) Service contracts.--
       ``(A) Services performed before appointment.--In the case 
     of any contract for services between any person and any 
     regulated entity for which the Agency has been appointed 
     conservator or receiver, any claim of such person for 
     services performed before the appointment of the conservator 
     or receiver shall be--
       ``(i) a claim to be paid in accordance with subsections (b) 
     and (e); and
       ``(ii) deemed to have arisen as of the date on which the 
     conservator or receiver was appointed.
       ``(B) Services performed after appointment and prior to 
     repudiation.--If, in the case of any contract for services 
     described under subparagraph (A), the conservator or receiver 
     accepts performance by the other person before the 
     conservator or receiver makes any determination to exercise 
     the right of repudiation of such contract under this 
     section--
       ``(i) the other party shall be paid under the terms of the 
     contract for the services performed; and
       ``(ii) the amount of such payment shall be treated as an 
     administrative expense of the conservatorship or 
     receivership.
       ``(C) Acceptance of performance no bar to subsequent 
     repudiation.--The acceptance by the conservator or receiver 
     of services referred to under subparagraph (B) in connection 
     with a contract described in such subparagraph shall not 
     affect the right of the conservator or receiver to repudiate 
     such contract under this section at any time after such 
     performance.
       ``(8) Certain qualified financial contracts.--
       ``(A) Rights of parties to contracts.--Subject to 
     paragraphs (9) and (10), and notwithstanding any other 
     provision of this title (other than subsection (b)(9)(B) of 
     this section), any other Federal law, or the law of any 
     State, no person shall be stayed or prohibited from 
     exercising--
       ``(i) any right of that person to cause the termination, 
     liquidation, or acceleration of any qualified financial 
     contract with a regulated entity that arises upon the 
     appointment of the Agency as receiver for such regulated 
     entity at any time after such appointment;
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement relating to one or 
     more qualified financial contracts; or
       ``(iii) any right to offset or net out any termination 
     value, payment amount, or other transfer obligation arising 
     under or in connection with 1 or more contracts and 
     agreements described in clause (i), including any master 
     agreement for such contracts or agreements.
       ``(B) Applicability of other provisions.--Subsection 
     (b)(10) shall apply in the case of any judicial action or 
     proceeding brought against any receiver referred to under 
     subparagraph (A), or the regulated entity for which such 
     receiver was appointed, by any party to a contract or 
     agreement described under subparagraph (A)(i) with such 
     regulated entity.
       ``(C) Certain transfers not avoidable.--
       ``(i) In general.--Notwithstanding paragraph (11), or any 
     other provision of Federal or State law relating to the 
     avoidance of preferential or fraudulent transfers, the 
     Agency, whether acting as such or as conservator or receiver 
     of a regulated entity, may not avoid any transfer of money or 
     other property in connection with any qualified financial 
     contract with a regulated entity.
       ``(ii) Exception for certain transfers.--Clause (i) shall 
     not apply to any transfer of money or other property in 
     connection with any qualified financial contract with a 
     regulated entity if the Agency determines that the transferee 
     had actual intent to hinder, delay, or defraud such regulated 
     entity, the creditors of such regulated entity, or any 
     conservator or receiver appointed for such regulated entity.
       ``(D) Certain contracts and agreements defined.--In this 
     subsection the following definitions shall apply:
       ``(i) Qualified financial contract.--The term `qualified 
     financial contract' means any securities contract, commodity 
     contract, forward contract, repurchase agreement, swap 
     agreement, and any similar agreement that the Agency 
     determines by regulation, resolution, or order to be a 
     qualified financial contract for purposes of this paragraph.
       ``(ii) Securities contract.--The term `securities 
     contract'--

       ``(I) means a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan, or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit, or mortgage loans or interests 
     therein (including any interest therein or based on the value 
     thereof) or any option on any of the foregoing, including any 
     option to purchase or sell any such security, certificate of 
     deposit, mortgage loan, interest, group or index, or option, 
     and including any repurchase or reverse repurchase 
     transaction on any such security, certificate of deposit, 
     mortgage loan, interest, group or index, or option;
       ``(II) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan, unless the Agency determines by regulation, resolution, 
     or order to include any such agreement within the meaning of 
     such term;
       ``(III) means any option entered into on a national 
     securities exchange relating to foreign currencies;
       ``(IV) means the guarantee by or to any securities clearing 
     agency of any settlement of cash, securities, certificates of 
     deposit, mortgage loans or interests therein, group or index 
     of securities, certificates of deposit, or mortgage loans or 
     interests therein (including any interest therein or based on 
     the value thereof) or option on any of the foregoing, 
     including any option to purchase or sell any such security, 
     certificate of deposit,

[[Page 15985]]

     mortgage loan, interest, group or index, or option;
       ``(V) means any margin loan;
       ``(VI) means any other agreement or transaction that is 
     similar to any agreement or transaction referred to in this 
     clause;
       ``(VII) means any combination of the agreements or 
     transactions referred to in this clause;
       ``(VIII) means any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     (IV), (V), (VI), (VII), or (VIII), together with all 
     supplements to any such master agreement, without regard to 
     whether the master agreement provides for an agreement or 
     transaction that is not a securities contract under this 
     clause, except that the master agreement shall be considered 
     to be a securities contract under this clause only with 
     respect to each agreement or transaction under the master 
     agreement that is referred to in subclause (I), (III), (IV), 
     (V), (VI), (VII), or (VIII); and
       ``(X) means any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in this clause, including any guarantee or 
     reimbursement obligation in connection with any agreement or 
     transaction referred to in this clause.

       ``(iii) Commodity contract.--The term `commodity contract' 
     means--

       ``(I) with respect to a futures commission merchant, a 
     contract for the purchase or sale of a commodity for future 
     delivery on, or subject to the rules of, a contract market or 
     board of trade;
       ``(II) with respect to a foreign futures commission 
     merchant, a foreign future;
       ``(III) with respect to a leverage transaction merchant, a 
     leverage transaction;
       ``(IV) with respect to a clearing organization, a contract 
     for the purchase or sale of a commodity for future delivery 
     on, or subject to the rules of, a contract market or board of 
     trade that is cleared by such clearing organization, or 
     commodity option traded on, or subject to the rules of, a 
     contract market or board of trade that is cleared by such 
     clearing organization;
       ``(V) with respect to a commodity options dealer, a 
     commodity option;
       ``(VI) any other agreement or transaction that is similar 
     to any agreement or transaction referred to in this clause;
       ``(VII) any combination of the agreements or transactions 
     referred to in this clause;
       ``(VIII) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), (IV), 
     (V), (VI), (VII), or (VIII), together with all supplements to 
     any such master agreement, without regard to whether the 
     master agreement provides for an agreement or transaction 
     that is not a commodity contract under this clause, except 
     that the master agreement shall be considered to be a 
     commodity contract under this clause only with respect to 
     each agreement or transaction under the master agreement that 
     is referred to in subclause (I), (II), (III), (IV), (V), 
     (VI), (VII), or (VIII); or
       ``(X) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in this clause, including any guarantee or reimbursement 
     obligation in connection with any agreement or transaction 
     referred to in this clause.

       ``(iv) Forward contract.--The term `forward contract' 
     means--

       ``(I) a contract (other than a commodity contract) for the 
     purchase, sale, or transfer of a commodity or any similar 
     good, article, service, right, or interest which is presently 
     or in the future becomes the subject of dealing in the 
     forward contract trade, or product or byproduct thereof, with 
     a maturity date more than 2 days after the date on which the 
     contract is entered into, including a repurchase transaction, 
     reverse repurchase transaction, consignment, lease, swap, 
     hedge transaction, deposit, loan, option, allocated 
     transaction, unallocated transaction, or any other similar 
     agreement;
       ``(II) any combination of agreements or transactions 
     referred to in subclauses (I) and (III);
       ``(III) any option to enter into any agreement or 
     transaction referred to in subclause (I) or (II);
       ``(IV) a master agreement that provides for an agreement or 
     transaction referred to in subclauses (I), (II), or (III), 
     together with all supplements to any such master agreement, 
     without regard to whether the master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this clause, except that the master agreement shall be 
     considered to be a forward contract under this clause only 
     with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     or (III); or
       ``(V) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in subclause (I), (II), (III), or (IV), including any 
     guarantee or reimbursement obligation in connection with any 
     agreement or transaction referred to in any such subclause.

       ``(v) Repurchase agreement.--The term `repurchase 
     agreement' (including a reverse repurchase agreement)--

       ``(I) means an agreement, including related terms, which 
     provides for the transfer of one or more certificates of 
     deposit, mortgage-related securities (as such term is defined 
     in section 3 of the Securities Exchange Act of 1934), 
     mortgage loans, interests in mortgage-related securities or 
     mortgage loans, eligible bankers' acceptances, qualified 
     foreign government securities (defined for purposes of this 
     clause as a security that is a direct obligation of, or that 
     is fully guaranteed by, the central government of a member of 
     the Organization for Economic Cooperation and Development, as 
     determined by regulation or order adopted by the appropriate 
     Federal banking authority), or securities that are direct 
     obligations of, or that are fully guaranteed by, the United 
     States or any agency of the United States against the 
     transfer of funds by the transferee of such certificates of 
     deposit, eligible bankers' acceptances, securities, mortgage 
     loans, or interests with a simultaneous agreement by such 
     transferee to transfer to the transferor thereof certificates 
     of deposit, eligible bankers' acceptances, securities, 
     mortgage loans, or interests as described above, at a date 
     certain not later than 1 year after such transfers or on 
     demand, against the transfer of funds, or any other similar 
     agreement;
       ``(II) does not include any repurchase obligation under a 
     participation in a commercial mortgage loan, unless the 
     Agency determines by regulation, resolution, or order to 
     include any such participation within the meaning of such 
     term;
       ``(III) means any combination of agreements or transactions 
     referred to in subclauses (I) and (IV);
       ``(IV) means any option to enter into any agreement or 
     transaction referred to in subclause (I) or (III);
       ``(V) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     or (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     provides for an agreement or transaction that is not a 
     repurchase agreement under this clause, except that the 
     master agreement shall be considered to be a repurchase 
     agreement under this subclause only with respect to each 
     agreement or transaction under the master agreement that is 
     referred to in subclause (I), (III), or (IV); and
       ``(VI) means any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in subclause (I), (III), (IV), or (V), including 
     any guarantee or reimbursement obligation in connection with 
     any agreement or transaction referred to in any such 
     subclause.

       ``(vi) Swap agreement.--The term `swap agreement' means--

       ``(I) any agreement, including the terms and conditions 
     incorporated by reference in any such agreement, which is an 
     interest rate swap, option, future, or forward agreement, 
     including a rate floor, rate cap, rate collar, cross-currency 
     rate swap, and basis swap; a spot, same day-tomorrow, 
     tomorrow-next, forward, or other foreign exchange or precious 
     metals agreement; a currency swap, option, future, or forward 
     agreement; an equity index or equity swap, option, future, or 
     forward agreement; a debt index or debt swap, option, future, 
     or forward agreement; a total return, credit spread or credit 
     swap, option, future, or forward agreement; a commodity index 
     or commodity swap, option, future, or forward agreement; or a 
     weather swap, weather derivative, or weather option;
       ``(II) any agreement or transaction that is similar to any 
     other agreement or transaction referred to in this clause and 
     that is of a type that has been, is presently, or in the 
     future becomes, the subject of recurrent dealings in the swap 
     markets (including terms and conditions incorporated by 
     reference in such agreement) and that is a forward, swap, 
     future, or option on one or more rates, currencies, 
     commodities, equity securities or other equity instruments, 
     debt securities or other debt instruments, quantitative 
     measures associated with an occurrence, extent of an 
     occurrence, or contingency associated with a financial, 
     commercial, or economic consequence, or economic or financial 
     indices or measures of economic or financial risk or value;
       ``(III) any combination of agreements or transactions 
     referred to in this clause;
       ``(IV) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(V) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), or 
     (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     contains an agreement or transaction that is not a swap 
     agreement under this clause, except that the master agreement 
     shall be considered to be a swap agreement under this clause 
     only with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     (III), or (IV); and
       ``(VI) any security agreement or arrangement or other 
     credit enhancement related to any agreements or transactions 
     referred to

[[Page 15986]]

     in subclause (I), (II), (III), (IV), or (V), including any 
     guarantee or reimbursement obligation in connection with any 
     agreement or transaction referred to in any such subclause.

       ``(vii) Treatment of master agreement as one agreement.--
     Any master agreement for any contract or agreement described 
     in any preceding clause of this subparagraph (or any master 
     agreement for such master agreement or agreements), together 
     with all supplements to such master agreement, shall be 
     treated as a single agreement and a single qualified 
     financial contract. If a master agreement contains provisions 
     relating to agreements or transactions that are not 
     themselves qualified financial contracts, the master 
     agreement shall be deemed to be a qualified financial 
     contract only with respect to those transactions that are 
     themselves qualified financial contracts.
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property or with 
     an interest in property, including retention of title as a 
     security interest and foreclosure of the equity of redemption 
     of the regulated entity.
       ``(E) Certain protections in event of appointment of 
     conservator.--Notwithstanding any other provision of this 
     section, any other Federal law, or the law of any State 
     (other than paragraph (10) of this subsection and subsection 
     (b)(9)(B)), no person shall be stayed or prohibited from 
     exercising--
       ``(i) any right such person has to cause the termination, 
     liquidation, or acceleration of any qualified financial 
     contract with a regulated entity in a conservatorship based 
     upon a default under such financial contract which is 
     enforceable under applicable noninsolvency law;
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement relating to 1 or more 
     such qualified financial contracts; or
       ``(iii) any right to offset or net out any termination 
     values, payment amounts, or other transfer obligations 
     arising under or in connection with such qualified financial 
     contracts.
       ``(F) Clarification.--No provision of law shall be 
     construed as limiting the right or power of the Agency, or 
     authorizing any court or agency to limit or delay in any 
     manner, the right or power of the Agency to transfer any 
     qualified financial contract in accordance with paragraphs 
     (9) and (10), or to disaffirm or repudiate any such contract 
     in accordance with subsection (d)(1).
       ``(G) Walkaway clauses not effective.--
       ``(i) In general.--Notwithstanding the provisions of 
     subparagraphs (A) and (E), and sections 403 and 404 of the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991, no walkaway clause shall be enforceable in a qualified 
     financial contract of a regulated entity in default.
       ``(ii) Walkaway clause defined.--For purposes of this 
     subparagraph, the term `walkaway clause' means a provision in 
     a qualified financial contract that, after calculation of a 
     value of a party's position or an amount due to or from 1 of 
     the parties in accordance with its terms upon termination, 
     liquidation, or acceleration of the qualified financial 
     contract, either does not create a payment obligation of a 
     party or extinguishes a payment obligation of a party in 
     whole or in part solely because of the status of such party 
     as a nondefaulting party.
       ``(9) Transfer of qualified financial contracts.--In making 
     any transfer of assets or liabilities of a regulated entity 
     in default which includes any qualified financial contract, 
     the conservator or receiver for such regulated entity shall 
     either--
       ``(A) transfer to 1 person--
       ``(i) all qualified financial contracts between any person 
     (or any affiliate of such person) and the regulated entity in 
     default;
       ``(ii) all claims of such person (or any affiliate of such 
     person) against such regulated entity under any such contract 
     (other than any claim which, under the terms of any such 
     contract, is subordinated to the claims of general unsecured 
     creditors of such regulated entity);
       ``(iii) all claims of such regulated entity against such 
     person (or any affiliate of such person) under any such 
     contract; and
       ``(iv) all property securing, or any other credit 
     enhancement for any contract described in clause (i), or any 
     claim described in clause (ii) or (iii) under any such 
     contract; or
       ``(B) transfer none of the financial contracts, claims, or 
     property referred to under subparagraph (A) (with respect to 
     such person and any affiliate of such person).
       ``(10) Notification of transfer.--
       ``(A) In general.--The conservator or receiver shall notify 
     any person that is a party to a contract or transfer by 5:00 
     p.m. (Eastern Standard Time) on the business day following 
     the date of the appointment of the receiver in the case of a 
     receivership, or the business day following such transfer in 
     the case of a conservatorship, if--
       ``(i) the conservator or receiver for a regulated entity in 
     default makes any transfer of the assets and liabilities of 
     such regulated entity; and
       ``(ii) such transfer includes any qualified financial 
     contract.
       ``(B) Certain rights not enforceable.--
       ``(i) Receivership.--A person who is a party to a qualified 
     financial contract with a regulated entity may not exercise 
     any right that such person has to terminate, liquidate, or 
     net such contract under paragraph (8)(A) of this subsection 
     or under section 403 or 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991, solely by reason of or 
     incidental to the appointment of a receiver for the regulated 
     entity (or the insolvency or financial condition of the 
     regulated entity for which the receiver has been appointed)--

       ``(I) until 5:00 p.m. (Eastern Standard Time) on the 
     business day following the date of the appointment of the 
     receiver; or
       ``(II) after the person has received notice that the 
     contract has been transferred pursuant to paragraph (9)(A).

       ``(ii) Conservatorship.--A person who is a party to a 
     qualified financial contract with a regulated entity may not 
     exercise any right that such person has to terminate, 
     liquidate, or net such contract under paragraph (8)(E) of 
     this subsection or under section 403 or 404 of the Federal 
     Deposit Insurance Corporation Improvement Act of 1991, solely 
     by reason of or incidental to the appointment of a 
     conservator for the regulated entity (or the insolvency or 
     financial condition of the regulated entity for which the 
     conservator has been appointed).
       ``(iii) Notice.--For purposes of this paragraph, the 
     conservator or receiver of a regulated entity shall be deemed 
     to have notified a person who is a party to a qualified 
     financial contract with such regulated entity, if the 
     conservator or receiver has taken steps reasonably calculated 
     to provide notice to such person by the time specified in 
     subparagraph (A).
       ``(C) Business day defined.--For purposes of this 
     paragraph, the term `business day' means any day other than 
     any Saturday, Sunday, or any day on which either the New York 
     Stock Exchange or the Federal Reserve Bank of New York is 
     closed.
       ``(11) Disaffirmance or repudiation of qualified financial 
     contracts.--In exercising the rights of disaffirmance or 
     repudiation of a conservator or receiver with respect to any 
     qualified financial contract to which a regulated entity is a 
     party, the conservator or receiver for such institution shall 
     either--
       ``(A) disaffirm or repudiate all qualified financial 
     contracts between--
       ``(i) any person or any affiliate of such person; and
       ``(ii) the regulated entity in default; or
       ``(B) disaffirm or repudiate none of the qualified 
     financial contracts referred to in subparagraph (A) (with 
     respect to such person or any affiliate of such person).
       ``(12) Certain security interests not avoidable.--No 
     provision of this subsection shall be construed as permitting 
     the avoidance of any legally enforceable or perfected 
     security interest in any of the assets of any regulated 
     entity, except where such an interest is taken in 
     contemplation of the insolvency of the regulated entity, or 
     with the intent to hinder, delay, or defraud the regulated 
     entity or the creditors of such regulated entity.
       ``(13) Authority to enforce contracts.--
       ``(A) In general.--Notwithstanding any provision of a 
     contract providing for termination, default, acceleration, or 
     exercise of rights upon, or solely by reason of, insolvency 
     or the appointment of, or the exercise of rights or powers 
     by, a conservator or receiver, the conservator or receiver 
     may enforce any contract, other than a contract for liability 
     insurance for a director or officer, or a contract or a 
     regulated entity bond, entered into by the regulated entity.
       ``(B) Certain rights not affected.--No provision of this 
     paragraph may be construed as impairing or affecting any 
     right of the conservator or receiver to enforce or recover 
     under a liability insurance contract for an officer or 
     director, or regulated entity bond under other applicable 
     law.
       ``(C) Consent requirement.--
       ``(i) In general.--Except as otherwise provided under this 
     section, no person may exercise any right or power to 
     terminate, accelerate, or declare a default under any 
     contract to which a regulated entity is a party, or to obtain 
     possession of or exercise control over any property of the 
     regulated entity, or affect any contractual rights of the 
     regulated entity, without the consent of the conservator or 
     receiver, as appropriate, for a period of--

       ``(I) 45 days after the date of appointment of a 
     conservator; or
       ``(II) 90 days after the date of appointment of a receiver.

       ``(ii) Exceptions.--This subparagraph shall not--

       ``(I) apply to a contract for liability insurance for an 
     officer or director;
       ``(II) apply to the rights of parties to certain qualified 
     financial contracts under subsection (d)(8); and
       ``(III) be construed as permitting the conservator or 
     receiver to fail to comply with otherwise enforceable 
     provisions of such contracts.

       ``(14) Savings clause.--The meanings of terms used in this 
     subsection are applicable for purposes of this subsection 
     only, and shall not be construed or applied so as to

[[Page 15987]]

     challenge or affect the characterization, definition, or 
     treatment of any similar terms under any other statute, 
     regulation, or rule, including the Gramm-Leach-Bliley Act, 
     the Legal Certainty for Bank Products Act of 2000, the 
     securities laws (as that term is defined in section 3(a)(47) 
     of the Securities Exchange Act of 1934), and the Commodity 
     Exchange Act.
       ``(15) Exception for federal reserve and federal home loan 
     banks.--No provision of this subsection shall apply with 
     respect to--
       ``(A) any extension of credit from any Federal Home Loan 
     Bank or Federal Reserve Bank to any regulated entity; or
       ``(B) any security interest in the assets of the regulated 
     entity securing any such extension of credit.
       ``(e) Valuation of Claims in Default.--
       ``(1) In general.--Notwithstanding any other provision of 
     Federal law or the law of any State, and regardless of the 
     method which the Agency determines to utilize with respect to 
     a regulated entity in default or in danger of default, 
     including transactions authorized under subsection (i), this 
     subsection shall govern the rights of the creditors of such 
     regulated entity.
       ``(2) Maximum liability.--The maximum liability of the 
     Agency, acting as receiver or in any other capacity, to any 
     person having a claim against the receiver or the regulated 
     entity for which such receiver is appointed shall be not more 
     than the amount that such claimant would have received if the 
     Agency had liquidated the assets and liabilities of the 
     regulated entity without exercising the authority of the 
     Agency under subsection (i).
       ``(f) Limitation on Court Action.--Except as provided in 
     this section or at the request of the Director, no court may 
     take any action to restrain or affect the exercise of powers 
     or functions of the Agency as a conservator or a receiver.
       ``(g) Liability of Directors and Officers.--
       ``(1) In general.--A director or officer of a regulated 
     entity may be held personally liable for monetary damages in 
     any civil action described in paragraph (2) brought by, on 
     behalf of, or at the request or direction of the Agency, and 
     prosecuted wholly or partially for the benefit of the 
     Agency--
       ``(A) acting as conservator or receiver of such regulated 
     entity; or
       ``(B) acting based upon a suit, claim, or cause of action 
     purchased from, assigned by, or otherwise conveyed by such 
     receiver or conservator.
       ``(2) Actions addressed.--Paragraph (1) applies in any 
     civil action for gross negligence, including any similar 
     conduct or conduct that demonstrates a greater disregard of a 
     duty of care than gross negligence, including intentional 
     tortious conduct, as such terms are defined and determined 
     under applicable State law.
       ``(3) No limitation.--Nothing in this subsection shall 
     impair or affect any right of the Agency under other 
     applicable law.
       ``(h) Damages.--In any proceeding related to any claim 
     against a director, officer, employee, agent, attorney, 
     accountant, appraiser, or any other party employed by or 
     providing services to a regulated entity, recoverable damages 
     determined to result from the improvident or otherwise 
     improper use or investment of any assets of the regulated 
     entity shall include principal losses and appropriate 
     interest.
       ``(i) Limited-Life Regulated Entities.--
       ``(1) Organization.--
       ``(A) Purpose.--The Agency, as receiver appointed pursuant 
     to subsection (a)--
       ``(i) may, in the case of a Federal Home Loan Bank, 
     organize a limited-life regulated entity with those powers 
     and attributes of the Federal Home Loan Bank in default or in 
     danger of default as the Director determines necessary, 
     subject to the provisions of this subsection, and the 
     Director shall grant a temporary charter to that limited-life 
     regulated entity, and that limited-life regulated entity may 
     operate subject to that charter; and
       ``(ii) shall, in the case of an enterprise, organize a 
     limited-life regulated entity with respect to that enterprise 
     in accordance with this subsection.
       ``(B) Authorities.--Upon the creation of a limited-life 
     regulated entity under subparagraph (A), the limited-life 
     regulated entity may--
       ``(i) assume such liabilities of the regulated entity that 
     is in default or in danger of default as the Agency may, in 
     its discretion, determine to be appropriate, except that the 
     liabilities assumed shall not exceed the amount of assets 
     purchased or transferred from the regulated entity to the 
     limited-life regulated entity;
       ``(ii) purchase such assets of the regulated entity that is 
     in default, or in danger of default as the Agency may, in its 
     discretion, determine to be appropriate; and
       ``(iii) perform any other temporary function which the 
     Agency may, in its discretion, prescribe in accordance with 
     this section.
       ``(2) Charter and establishment.--
       ``(A) Transfer of charter.--
       ``(i) Fannie mae.--If the Agency is appointed as receiver 
     for the Federal National Mortgage Association, the limited-
     life regulated entity established under this subsection with 
     respect to such enterprise shall, by operation of law and 
     immediately upon its organization--

       ``(I) succeed to the charter of the Federal National 
     Mortgage Association, as set forth in the Federal National 
     Mortgage Association Charter Act; and
       ``(II) thereafter operate in accordance with, and subject 
     to, such charter, this Act, and any other provision of law to 
     which the Federal National Mortgage Association is subject, 
     except as otherwise provided in this subsection.

       ``(ii) Freddie mac.--If the Agency is appointed as receiver 
     for the Federal Home Loan Mortgage Corporation, the limited-
     life regulated entity established under this subsection with 
     respect to such enterprise shall, by operation of law and 
     immediately upon its organization--

       ``(I) succeed to the charter of the Federal Home Loan 
     Mortgage Corporation, as set forth in the Federal Home Loan 
     Mortgage Corporation Charter Act; and
       ``(II) thereafter operate in accordance with, and subject 
     to, such charter, this Act, and any other provision of law to 
     which the Federal Home Loan Mortgage Corporation is subject, 
     except as otherwise provided in this subsection.

       ``(B) Interests in and assets and obligations of regulated 
     entity in default.--Notwithstanding subparagraph (A) or any 
     other provision of law--
       ``(i) a limited-life regulated entity shall assume, 
     acquire, or succeed to the assets or liabilities of a 
     regulated entity only to the extent that such assets or 
     liabilities are transferred by the Agency to the limited-life 
     regulated entity in accordance with, and subject to the 
     restrictions set forth in, paragraph (1)(B);
       ``(ii) a limited-life regulated entity shall not assume, 
     acquire, or succeed to any obligation that a regulated entity 
     for which a receiver has been appointed may have to any 
     shareholder of the regulated entity that arises as a result 
     of the status of that person as a shareholder of the 
     regulated entity; and
       ``(iii) no shareholder or creditor of a regulated entity 
     shall have any right or claim against the charter of the 
     regulated entity once the Agency has been appointed receiver 
     for the regulated entity and a limited-life regulated entity 
     succeeds to the charter pursuant to subparagraph (A).
       ``(C) Limited-life regulated entity treated as being in 
     default for certain purposes.--A limited-life regulated 
     entity shall be treated as a regulated entity in default at 
     such times and for such purposes as the Agency may, in its 
     discretion, determine.
       ``(D) Management.--Upon its establishment, a limited-life 
     regulated entity shall be under the management of a board of 
     directors consisting of not fewer than 5 nor more than 10 
     members appointed by the Agency.
       ``(E) Bylaws.--The board of directors of a limited-life 
     regulated entity shall adopt such bylaws as may be approved 
     by the Agency.
       ``(3) Capital stock.--
       ``(A) No agency requirement.--The Agency is not required to 
     pay capital stock into a limited-life regulated entity or to 
     issue any capital stock on behalf of a limited-life regulated 
     entity established under this subsection.
       ``(B) Authority.--If the Director determines that such 
     action is advisable, the Agency may cause capital stock or 
     other securities of a limited-life regulated entity 
     established with respect to an enterprise to be issued and 
     offered for sale, in such amounts and on such terms and 
     conditions as the Director may determine, in the discretion 
     of the Director.
       ``(4) Investments.--Funds of a limited-life regulated 
     entity shall be kept on hand in cash, invested in obligations 
     of the United States or obligations guaranteed as to 
     principal and interest by the United States, or deposited 
     with the Agency, or any Federal reserve bank.
       ``(5) Exempt tax status.--Notwithstanding any other 
     provision of Federal or State law, a limited-life regulated 
     entity, its franchise, property, and income shall be exempt 
     from all taxation now or hereafter imposed by the United 
     States, by any territory, dependency, or possession thereof, 
     or by any State, county, municipality, or local taxing 
     authority.
       ``(6) Winding up.--
       ``(A) In general.--Subject to subparagraphs (B) and (C), 
     not later than 2 years after the date of its organization, 
     the Agency shall wind up the affairs of a limited-life 
     regulated entity.
       ``(B) Extension.--The Director may, in the discretion of 
     the Director, extend the status of a limited-life regulated 
     entity for 3 additional 1-year periods.
       ``(C) Termination of status as limited-life regulated 
     entity.--
       ``(i) In general.--Upon the sale by the Agency of 80 
     percent or more of the capital stock of a limited-life 
     regulated entity, as defined in clause (iv), to 1 or more 
     persons (other than the Agency)--

       ``(I) the status of the limited-life regulated entity as 
     such shall terminate; and
       ``(II) the entity shall cease to be a limited-life 
     regulated entity for purposes of this subsection.

       ``(ii) Divestiture of remaining stock, if any.--

[[Page 15988]]

       ``(I) In general.--Not later than 1 year after the date on 
     which the status of a limited-life regulated entity is 
     terminated pursuant to clause (i), the Agency shall sell to 1 
     or more persons (other than the Agency) any remaining capital 
     stock of the former limited-life regulated entity.
       ``(II) Extension authorized.--The Director may extend the 
     period referred to in subclause (I) for not longer than an 
     additional 2 years, if the Director determines that such 
     action would be in the public interest.

       ``(iii) Savings clause.--Notwithstanding any provision of 
     law, other than clause (ii), the Agency shall not be required 
     to sell the capital stock of an enterprise or a limited-life 
     regulated entity established with respect to an enterprise.
       ``(iv) Applicability.--This subparagraph applies only with 
     respect to a limited-life regulated entity that is 
     established with respect to an enterprise.
       ``(7) Transfer of assets and liabilities.--
       ``(A) In general.--
       ``(i) Transfer of assets and liabilities.--The Agency, as 
     receiver, may transfer any assets and liabilities of a 
     regulated entity in default, or in danger of default, to the 
     limited-life regulated entity in accordance with and subject 
     to the restrictions of paragraph (1).
       ``(ii) Subsequent transfers.--At any time after the 
     establishment of a limited-life regulated entity, the Agency, 
     as receiver, may transfer any assets and liabilities of the 
     regulated entity in default, or in danger of default, as the 
     Agency may, in its discretion, determine to be appropriate in 
     accordance with and subject to the restrictions of paragraph 
     (1).
       ``(iii) Effective without approval.--The transfer of any 
     assets or liabilities of a regulated entity in default or in 
     danger of default to a limited-life regulated entity shall be 
     effective without any further approval under Federal or State 
     law, assignment, or consent with respect thereto.
       ``(iv) Equitable treatment of similarly situated 
     creditors.--The Agency shall treat all creditors of a 
     regulated entity in default or in danger of default that are 
     similarly situated under subsection (c)(1) in a similar 
     manner in exercising the authority of the Agency under this 
     subsection to transfer any assets or liabilities of the 
     regulated entity to the limited-life regulated entity 
     established with respect to such regulated entity, except 
     that the Agency may take actions (including making payments) 
     that do not comply with this clause, if--

       ``(I) the Director determines that such actions are 
     necessary to maximize the value of the assets of the 
     regulated entity, to maximize the present value return from 
     the sale or other disposition of the assets of the regulated 
     entity, or to minimize the amount of any loss realized upon 
     the sale or other disposition of the assets of the regulated 
     entity; and
       ``(II) all creditors that are similarly situated under 
     subsection (c)(1) receive not less than the amount provided 
     in subsection (e)(2).

       ``(v) Limitation on transfer of liabilities.--
     Notwithstanding any other provision of law, the aggregate 
     amount of liabilities of a regulated entity that are 
     transferred to, or assumed by, a limited-life regulated 
     entity may not exceed the aggregate amount of assets of the 
     regulated entity that are transferred to, or purchased by, 
     the limited-life regulated entity.
       ``(8) Regulations.--The Agency may promulgate such 
     regulations as the Agency determines to be necessary or 
     appropriate to implement this subsection.
       ``(9) Powers of limited-life regulated entities.--
       ``(A) In general.--Each limited-life regulated entity 
     created under this subsection shall have all corporate powers 
     of, and be subject to the same provisions of law as, the 
     regulated entity in default or in danger of default to which 
     it relates, except that--
       ``(i) the Agency may--

       ``(I) remove the directors of a limited-life regulated 
     entity;
       ``(II) fix the compensation of members of the board of 
     directors and senior management, as determined by the Agency 
     in its discretion, of a limited-life regulated entity; and
       ``(III) indemnify the representatives for purposes of 
     paragraph (1)(B), and the directors, officers, employees, and 
     agents of a limited-life regulated entity on such terms as 
     the Agency determines to be appropriate; and

       ``(ii) the board of directors of a limited-life regulated 
     entity--

       ``(I) shall elect a chairperson who may also serve in the 
     position of chief executive officer, except that such person 
     shall not serve either as chairperson or as chief executive 
     officer without the prior approval of the Agency; and
       ``(II) may appoint a chief executive officer who is not 
     also the chairperson, except that such person shall not serve 
     as chief executive officer without the prior approval of the 
     Agency.

       ``(B) Stay of judicial action.--Any judicial action to 
     which a limited-life regulated entity becomes a party by 
     virtue of its acquisition of any assets or assumption of any 
     liabilities of a regulated entity in default shall be stayed 
     from further proceedings for a period of not longer than 45 
     days, at the request of the limited-life regulated entity. 
     Such period may be modified upon the consent of all parties.
       ``(10) No federal status.--
       ``(A) Agency status.--A limited-life regulated entity is 
     not an agency, establishment, or instrumentality of the 
     United States.
       ``(B) Employee status.--Representatives for purposes of 
     paragraph (1)(B), interim directors, directors, officers, 
     employees, or agents of a limited-life regulated entity are 
     not, solely by virtue of service in any such capacity, 
     officers or employees of the United States. Any employee of 
     the Agency or of any Federal instrumentality who serves at 
     the request of the Agency as a representative for purposes of 
     paragraph (1)(B), interim director, director, officer, 
     employee, or agent of a limited-life regulated entity shall 
     not--
       ``(i) solely by virtue of service in any such capacity lose 
     any existing status as an officer or employee of the United 
     States for purposes of title 5, United States Code, or any 
     other provision of law; or
       ``(ii) receive any salary or benefits for service in any 
     such capacity with respect to a limited-life regulated entity 
     in addition to such salary or benefits as are obtained 
     through employment with the Agency or such Federal 
     instrumentality.
       ``(11) Authority to obtain credit.--
       ``(A) In general.--A limited-life regulated entity may 
     obtain unsecured credit and issue unsecured debt.
       ``(B) Inability to obtain credit.--If a limited-life 
     regulated entity is unable to obtain unsecured credit or 
     issue unsecured debt, the Director may authorize the 
     obtaining of credit or the issuance of debt by the limited-
     life regulated entity--
       ``(i) with priority over any or all of the obligations of 
     the limited-life regulated entity;
       ``(ii) secured by a lien on property of the limited-life 
     regulated entity that is not otherwise subject to a lien; or
       ``(iii) secured by a junior lien on property of the 
     limited-life regulated entity that is subject to a lien.
       ``(C) Limitations.--
       ``(i) In general.--The Director, after notice and a 
     hearing, may authorize the obtaining of credit or the 
     issuance of debt by a limited-life regulated entity that is 
     secured by a senior or equal lien on property of the limited-
     life regulated entity that is subject to a lien (other than 
     mortgages that collateralize the mortgage-backed securities 
     issued or guaranteed by an enterprise) only if--

       ``(I) the limited-life regulated entity is unable to 
     otherwise obtain such credit or issue such debt; and
       ``(II) there is adequate protection of the interest of the 
     holder of the lien on the property with respect to which such 
     senior or equal lien is proposed to be granted.

       ``(D) Burden of proof.--In any hearing under this 
     subsection, the Director has the burden of proof on the issue 
     of adequate protection.
       ``(12) Effect on debts and liens.--The reversal or 
     modification on appeal of an authorization under this 
     subsection to obtain credit or issue debt, or of a grant 
     under this section of a priority or a lien, does not affect 
     the validity of any debt so issued, or any priority or lien 
     so granted, to an entity that extended such credit in good 
     faith, whether or not such entity knew of the pendency of the 
     appeal, unless such authorization and the issuance of such 
     debt, or the granting of such priority or lien, were stayed 
     pending appeal.
       ``(j) Other Agency Exemptions.--
       ``(1) Applicability.--The provisions of this subsection 
     shall apply with respect to the Agency in any case in which 
     the Agency is acting as a conservator or a receiver.
       ``(2) Taxation.--The Agency, including its franchise, its 
     capital, reserves, and surplus, and its income, shall be 
     exempt from all taxation imposed by any State, county, 
     municipality, or local taxing authority, except that any real 
     property of the Agency shall be subject to State, 
     territorial, county, municipal, or local taxation to the same 
     extent according to its value as other real property is 
     taxed, except that, notwithstanding the failure of any person 
     to challenge an assessment under State law of the value of 
     such property, and the tax thereon, shall be determined as of 
     the period for which such tax is imposed.
       ``(3) Property protection.--No property of the Agency shall 
     be subject to levy, attachment, garnishment, foreclosure, or 
     sale without the consent of the Agency, nor shall any 
     involuntary lien attach to the property of the Agency.
       ``(4) Penalties and fines.--The Agency shall not be liable 
     for any amounts in the nature of penalties or fines, 
     including those arising from the failure of any person to pay 
     any real property, personal property, probate, or recording 
     tax or any recording or filing fees when due.
       ``(k) Prohibition of Charter Revocation.--In no case may 
     the receiver appointed pursuant to this section revoke, 
     annul, or terminate the charter of an enterprise.''.
       (b) Technical and Conforming Amendments.--The Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4501 et seq.) is amended--
       (1) in section 1368 (12 U.S.C. 4618)--

[[Page 15989]]

       (A) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity''; and
       (B) by striking ``the enterprise'' each place that term 
     appears and inserting ``the regulated entity'';
       (2) in section 1369C (12 U.S.C. 4622), by striking 
     ``enterprise'' each place that term appears and inserting 
     ``regulated entity'';
       (3) in section 1369D (12 U.S.C. 4623)--
       (A) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity''; and
       (B) in subsection (a)(1), by striking ``An enterprise'' and 
     inserting ``A regulated entity''; and
       (4) by striking sections 1369, 1369A, and 1369B (12 U.S.C. 
     4619, 4620, and 4621).

                    Subtitle D--Enforcement Actions

     SEC. 1151. CEASE AND DESIST PROCEEDINGS.

       Section 1371 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4631) is 
     amended--
       (1) by striking subsections (a) and (b) and inserting the 
     following:
       ``(a) Issuance for Unsafe or Unsound Practices and 
     Violations.--
       ``(1) Authority of director.--If, in the opinion of the 
     Director, a regulated entity or any entity-affiliated party 
     is engaging or has engaged, or the Director has reasonable 
     cause to believe that the regulated entity or any entity-
     affiliated party is about to engage, in an unsafe or unsound 
     practice in conducting the business of the regulated entity 
     or the Office of Finance, or is violating or has violated, or 
     the Director has reasonable cause to believe is about to 
     violate, a law, rule, regulation, or order, or any condition 
     imposed in writing by the Director in connection with the 
     granting of any application or other request by the regulated 
     entity or the Office of Finance or any written agreement 
     entered into with the Director, the Director may issue and 
     serve upon the regulated entity or entity-affiliated party a 
     notice of charges in respect thereof.
       ``(2) Limitation.--The Director may not, pursuant to this 
     section, enforce compliance with any housing goal established 
     under subpart B of part 2 of subtitle A of this title, with 
     section 1336 or 1337 of this title, with subsection (m) or 
     (n) of section 309 of the Federal National Mortgage 
     Association Charter Act (12 U.S.C. 1723a(m), (n)), with 
     subsection (e) or (f) of section 307 of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1456(e), (f)), or with 
     paragraph (5) of section 10(j) of the Federal Home Loan Bank 
     Act (12 U.S.C. 1430(j)).
       ``(b) Issuance for Unsatisfactory Rating.--If a regulated 
     entity receives, in its most recent report of examination, a 
     less-than-satisfactory rating for asset quality, management, 
     earnings, or liquidity, the Director may (if the deficiency 
     is not corrected) deem the regulated entity to be engaging in 
     an unsafe or unsound practice for purposes of subsection 
     (a).'';
       (2) in subsection (c)--
       (A) in paragraph (1), by inserting before the period at the 
     end the following: ``, unless the party served with a notice 
     of charges shall appear at the hearing personally or by a 
     duly authorized representative, the party shall be deemed to 
     have consented to the issuance of the cease and desist 
     order''; and
       (B) in paragraph (2)--
       (i) by striking ``or director'' and inserting ``director, 
     or entity-affiliated party''; and
       (ii) by inserting ``or entity-affiliated party'' before 
     ``consents'';
       (3) in each of subsections (c), (d), and (e)--
       (A) by striking ``the enterprise'' each place that term 
     appears and inserting ``the regulated entity'';
       (B) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity''; and
       (C) by striking ``conduct'' each place that term appears 
     and inserting ``practice'';
       (4) in subsection (d)--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``or director'' and inserting ``director, 
     or entity-affiliated party''; and
       (ii) by inserting ``to require a regulated entity or 
     entity-affiliated party'' after ``includes the authority'';
       (B) in paragraph (1)--
       (i) by striking ``to require an executive officer or a 
     director to''; and
       (ii) by striking ``loss'' and all that follows through 
     ``person'' and inserting ``loss, if'';
       (iii) in subparagraph (A), by inserting ``such entity or 
     party or finance facility'' before ``was''; and
       (iv) by striking subparagraph (B) and inserting the 
     following:
       ``(B) the violation or practice involved a reckless 
     disregard for the law or any applicable regulations or prior 
     order of the Director;''; and
       (C) in paragraph (4), by inserting ``loan or'' before 
     ``asset'';
       (5) in subsection (e), by inserting ``or entity-affiliated 
     party''--
       (A) before ``or any executive''; and
       (B) before the period at the end; and
       (6) in subsection (f)--
       (A) by striking ``enterprise'' and inserting ``regulated 
     entity, finance facility,''; and
       (B) by striking ``or director'' and inserting ``director, 
     or entity-affiliated party''.

     SEC. 1152. TEMPORARY CEASE AND DESIST PROCEEDINGS.

       Section 1372 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4632) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Grounds for Issuance.--
       ``(1) In general.--If the Director determines that the 
     actions specified in the notice of charges served upon a 
     regulated entity or any entity-affiliated party pursuant to 
     section 1371(a), or the continuation thereof, is likely to 
     cause insolvency or significant dissipation of assets or 
     earnings of that entity, or is likely to weaken the condition 
     of that entity prior to the completion of the proceedings 
     conducted pursuant to sections 1371 and 1373, the Director 
     may--
       ``(A) issue a temporary order requiring that regulated 
     entity or entity-affiliated party to cease and desist from 
     any such violation or practice; and
       ``(B) require that regulated entity or entity-affiliated 
     party to take affirmative action to prevent or remedy such 
     insolvency, dissipation, condition, or prejudice pending 
     completion of such proceedings.
       ``(2) Additional requirements.--An order issued under 
     paragraph (1) may include any requirement authorized under 
     subsection 1371(d).'';
       (2) in subsection (b)--
       (A) by striking ``or director'' and inserting ``director, 
     or entity-affiliated party''; and
       (B) by striking ``enterprise'' each place that term appears 
     and inserting ``regulated entity'';
       (3) in subsection (c), by striking ``enterprise'' each 
     place that term appears and inserting ``regulated entity'';
       (4) in subsection (d)--
       (A) by striking ``or director'' each place that term 
     appears and inserting ``director, or entity-affiliated 
     party''; and
       (B) by striking ``An enterprise'' and inserting ``A 
     regulated entity''; and
       (5) in subsection (e)--
       (A) by striking ``request the Attorney General of the 
     United States to''; and
       (B) by striking ``or may, under the direction and control 
     of the Attorney General, bring such action''.

     SEC. 1153. REMOVAL AND PROHIBITION AUTHORITY.

       (a) In General.--Part 1 of subtitle C of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4631 et seq.) is amended--
       (1) by redesignating sections 1377 through 1379B (12 U.S.C. 
     4637-4641) as sections 1379 through 1379D, respectively; and
       (2) by inserting after section 1376 (12 U.S.C. 4636) the 
     following:

     ``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

       ``(a) Authority To Issue Order.--
       ``(1) In general.--The Director may serve upon a party 
     described in paragraph (2), or any officer, director, or 
     management of the Office of Finance a written notice of the 
     intention of the Director to suspend or remove such party 
     from office, or prohibit any further participation by such 
     party, in any manner, in the conduct of the affairs of the 
     regulated entity.
       ``(2) Applicability.--A party described in this paragraph 
     is an entity-affiliated party or any officer, director, or 
     management of the Office of Finance, if the Director 
     determines that--
       ``(A) that party, officer, or director has, directly or 
     indirectly--
       ``(i) violated--

       ``(I) any law or regulation;
       ``(II) any cease and desist order which has become final;
       ``(III) any condition imposed in writing by the Director in 
     connection with the grant of any application or other request 
     by such regulated entity; or
       ``(IV) any written agreement between such regulated entity 
     and the Director;

       ``(ii) engaged or participated in any unsafe or unsound 
     practice in connection with any regulated entity or business 
     institution; or
       ``(iii) committed or engaged in any act, omission, or 
     practice which constitutes a breach of such party's fiduciary 
     duty;
       ``(B) by reason of the violation, practice, or breach 
     described in subparagraph (A)--
       ``(i) such regulated entity or business institution has 
     suffered or will probably suffer financial loss or other 
     damage; or
       ``(ii) such party has received financial gain or other 
     benefit; and
       ``(C) the violation, practice, or breach described in 
     subparagraph (A)--
       ``(i) involves personal dishonesty on the part of such 
     party; or
       ``(ii) demonstrates willful or continuing disregard by such 
     party for the safety or soundness of such regulated entity or 
     business institution.
       ``(b) Suspension Order.--
       ``(1) Suspension or prohibition authority.--If the Director 
     serves written notice under subsection (a) upon a party 
     subject to that subsection (a), the Director may, by order, 
     suspend or remove such party from office, or prohibit such 
     party from further participation in any manner in the conduct 
     of the affairs of the regulated entity, if the Director--
       ``(A) determines that such action is necessary for the 
     protection of the regulated entity; and
       ``(B) serves such party with written notice of the order.

[[Page 15990]]

       ``(2) Effective period.--Any order issued under this 
     subsection--
       ``(A) shall become effective upon service; and
       ``(B) unless a court issues a stay of such order under 
     subsection (g), shall remain in effect and enforceable 
     until--
       ``(i) the date on which the Director dismisses the charges 
     contained in the notice served under subsection (a) with 
     respect to such party; or
       ``(ii) the effective date of an order issued under 
     subsection (b).
       ``(3) Copy of order.--If the Director issues an order under 
     subsection (b) to any party, the Director shall serve a copy 
     of such order on any regulated entity with which such party 
     is affiliated at the time such order is issued.
       ``(c) Notice, Hearing, and Order.--
       ``(1) Notice.--A notice under subsection (a) of the 
     intention of the Director to issue an order under this 
     section shall contain a statement of the facts constituting 
     grounds for such action, and shall fix a time and place at 
     which a hearing will be held on such action.
       ``(2) Timing of hearing.--A hearing shall be fixed for a 
     date not earlier than 30 days, nor later than 60 days, after 
     the date of service of notice under subsection (a), unless an 
     earlier or a later date is set by the Director at the request 
     of--
       ``(A) the party receiving such notice, and good cause is 
     shown; or
       ``(B) the Attorney General of the United States.
       ``(3) Consent.--Unless the party that is the subject of a 
     notice delivered under subsection (a) appears at the hearing 
     in person or by a duly authorized representative, such party 
     shall be deemed to have consented to the issuance of an order 
     under this section.
       ``(4) Issuance of order of suspension.--The Director may 
     issue an order under this section, as the Director may deem 
     appropriate, if--
       ``(A) a party is deemed to have consented to the issuance 
     of an order under paragraph (3); or
       ``(B) upon the record made at the hearing, the Director 
     finds that any of the grounds specified in the notice have 
     been established.
       ``(5) Effectiveness of order.--Any order issued under 
     paragraph (4) shall become effective at the expiration of 30 
     days after the date of service upon the relevant regulated 
     entity and party (except in the case of an order issued upon 
     consent under paragraph (3), which shall become effective at 
     the time specified therein). Such order shall remain 
     effective and enforceable except to such extent as it is 
     stayed, modified, terminated, or set aside by action of the 
     Director or a reviewing court.
       ``(d) Prohibition of Certain Specific Activities.--Any 
     person subject to an order issued under this section shall 
     not--
       ``(1) participate in any manner in the conduct of the 
     affairs of any regulated entity or the Office of Finance;
       ``(2) solicit, procure, transfer, attempt to transfer, 
     vote, or attempt to vote any proxy, consent, or authorization 
     with respect to any voting rights in any regulated entity;
       ``(3) violate any voting agreement previously approved by 
     the Director; or
       ``(4) vote for a director, or serve or act as an entity-
     affiliated party of a regulated entity or as an officer or 
     director of the Office of Finance.
       ``(e) Industry-Wide Prohibition.--
       ``(1) In general.--Except as provided in paragraph (2), any 
     person who, pursuant to an order issued under this section, 
     has been removed or suspended from office in a regulated 
     entity or the Office of Finance, or prohibited from 
     participating in the conduct of the affairs of a regulated 
     entity or the Office of Finance, may not, while such order is 
     in effect, continue or commence to hold any office in, or 
     participate in any manner in the conduct of the affairs of, 
     any regulated entity or the Office of Finance.
       ``(2) Exception if director provides written consent.--If, 
     on or after the date on which an order is issued under this 
     section which removes or suspends from office any party, or 
     prohibits such party from participating in the conduct of the 
     affairs of a regulated entity or the Office of Finance, such 
     party receives the written consent of the Director, the order 
     shall, to the extent of such consent, cease to apply to such 
     party with respect to the regulated entity or such Office of 
     Finance described in the written consent. Any such consent 
     shall be publicly disclosed.
       ``(3) Violation of paragraph (1) treated as violation of 
     order.--Any violation of paragraph (1) by any person who is 
     subject to an order issued under subsection (h) shall be 
     treated as a violation of the order.
       ``(f) Applicability.--This section shall only apply to a 
     person who is an individual, unless the Director specifically 
     finds that it should apply to a corporation, firm, or other 
     business entity.
       ``(g) Stay of Suspension and Prohibition of Entity-
     Affiliated Party.--Not later than 10 days after the date on 
     which any entity-affiliated party has been suspended from 
     office or prohibited from participation in the conduct of the 
     affairs of a regulated entity under this section, such party 
     may apply to the United States District Court for the 
     District of Columbia, or the United States district court for 
     the judicial district in which the headquarters of the 
     regulated entity is located, for a stay of such suspension or 
     prohibition pending the completion of the administrative 
     proceedings pursuant to subsection (c). The court shall have 
     jurisdiction to stay such suspension or prohibition.
       ``(h) Suspension or Removal of Entity-Affiliated Party 
     Charged With Felony.--
       ``(1) Suspension or prohibition.--
       ``(A) In general.--Whenever any entity-affiliated party is 
     charged in any information, indictment, or complaint, with 
     the commission of or participation in a crime involving 
     dishonesty or breach of trust which is punishable by 
     imprisonment for a term exceeding 1 year under Federal or 
     State law, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     regulated entity or impair public confidence in the regulated 
     entity, by written notice served upon such party, suspend 
     such party from office or prohibit such party from further 
     participation in any manner in the conduct of the affairs of 
     any regulated entity.
       ``(B) Provisions applicable to notice.--
       ``(i) Copy.--A copy of any notice under subparagraph (A) 
     shall be served upon the relevant regulated entity.
       ``(ii) Effective period.--A suspension or prohibition under 
     subparagraph (A) shall remain in effect until the 
     information, indictment, or complaint referred to in 
     subparagraph (A) is finally disposed of, or until terminated 
     by the Director.
       ``(2) Removal or prohibition.--
       ``(A) In general.--If a judgment of conviction or an 
     agreement to enter a pretrial diversion or other similar 
     program is entered against an entity-affiliated party in 
     connection with a crime described in paragraph (1)(A), at 
     such time as such judgment is not subject to further 
     appellate review, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     regulated entity or impair public confidence in the regulated 
     entity, issue and serve upon such party an order removing 
     such party from office or prohibiting such party from further 
     participation in any manner in the conduct of the affairs of 
     the regulated entity without the prior written consent of the 
     Director.
       ``(B) Provisions applicable to order.--
       ``(i) Copy.--A copy of any order under subparagraph (A) 
     shall be served upon the relevant regulated entity, at which 
     time the entity-affiliated party who is subject to the order 
     (if a director or an officer) shall cease to be a director or 
     officer of such regulated entity.
       ``(ii) Effect of acquittal.--A finding of not guilty or 
     other disposition of the charge shall not preclude the 
     Director from instituting proceedings after such finding or 
     disposition to remove a party from office or to prohibit 
     further participation in the affairs of a regulated entity 
     pursuant to subsection (a) or (b).
       ``(iii) Effective period.--Unless terminated by the 
     Director, any notice of suspension or order of removal issued 
     under this subsection shall remain effective and outstanding 
     until the completion of any hearing or appeal authorized 
     under paragraph (4).
       ``(3) Authority of remaining board members.--
       ``(A) In general.--If at any time, because of the 
     suspension of 1 or more directors pursuant to this section, 
     there shall be on the board of directors of a regulated 
     entity less than a quorum of directors not so suspended, all 
     powers and functions vested in or exercisable by such board 
     shall vest in and be exercisable by the director or directors 
     on the board not so suspended, until such time as there shall 
     be a quorum of the board of directors.
       ``(B) Appointment of temporary directors.--If all of the 
     directors of a regulated entity are suspended pursuant to 
     this section, the Director shall appoint persons to serve 
     temporarily as directors pending the termination of such 
     suspensions, or until such time as those who have been 
     suspended cease to be directors of the regulated entity and 
     their respective successors take office.
       ``(4) Hearing regarding continued participation.--
       ``(A) In general.--Not later than 30 days after the date of 
     service of any notice of suspension or order of removal 
     issued pursuant to paragraph (1) or (2), the entity-
     affiliated party may request in writing an opportunity to 
     appear before the Director to show that the continued service 
     or participation in the conduct of the affairs of the 
     regulated entity by such party does not, or is not likely to, 
     pose a threat to the interests of the regulated entity, or 
     threaten to impair public confidence in the regulated entity.
       ``(B) Timing and form of hearing.--Upon receipt of a 
     request for a hearing under subparagraph (A), the Director 
     shall fix a time (not later than 30 days after the date of 
     receipt of such request, unless extended at the request of 
     such party) and place at which the entity-affiliated party 
     may appear, personally or through counsel, before the 
     Director or 1 or more designated employees of the Director to 
     submit written materials (or, at the discretion of the 
     Director, oral testimony) and oral argument.
       ``(C) Determination.--Not later than 60 days after the date 
     of a hearing under subparagraph (B), the Director shall 
     notify the

[[Page 15991]]

     entity-affiliated party whether the suspension or prohibition 
     from participation in any manner in the conduct of the 
     affairs of the regulated entity will be continued, 
     terminated, or otherwise modified, or whether the order 
     removing such party from office or prohibiting such party 
     from further participation in any manner in the conduct of 
     the affairs of the regulated entity will be rescinded or 
     otherwise modified. Such notification shall contain a 
     statement of the basis for any adverse decision of the 
     Director.
       ``(5) Rules.--The Director is authorized to prescribe such 
     rules as may be necessary to carry out this subsection.''.
       (b) Conforming Amendments.--
       (1) Safety and soundness act.--Subtitle C of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4501 et seq.) is amended--
       (A) in section 1317(f), by striking ``section 1379B'' and 
     inserting ``section 1379D'';
       (B) in section 1373(a)--
       (i) in paragraph (1), by striking ``or 1376(c)'' and 
     inserting ``, 1376(c), or 1377'';
       (ii) in paragraph (2), by inserting ``or 1377'' after'' 
     1371''; and
       (iii) in paragraph (4), by inserting ``or removal or 
     prohibition'' after ``cease and desist''; and
       (C) in section 1374(a)--
       (i) by striking ``or 1376'' and inserting ``1313B, 1376, or 
     1377''; and
       (ii) by striking ``such section'' and inserting ``this 
     title''.
       (2) Fannie mae charter act.--Section 308(b) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1723(b)) 
     is amended in the second sentence, by striking ``The'' and 
     inserting ``Except to the extent that action under section 
     1377 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 temporarily results in a lesser number, 
     the''.
       (3) Freddie mac charter act.--Section 303(a)(2)(A) of the 
     Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1452(a)(2)(A)) is amended, in the second sentence, by 
     striking ``The'' and inserting ``Except to the extent action 
     under section 1377 of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 temporarily 
     results in a lesser number, the''.

     SEC. 1154. ENFORCEMENT AND JURISDICTION.

       Section 1375 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4635) is 
     amended--
       (1) by striking subsection (a) and inserting the following 
     new subsection:
       ``(a) Enforcement.--The Director may, in the discretion of 
     the Director, apply to the United States District Court for 
     the District of Columbia, or the United States district court 
     within the jurisdiction of which the headquarters of the 
     regulated entity is located, for the enforcement of any 
     effective and outstanding notice or order issued under this 
     subtitle or subtitle B, or request that the Attorney General 
     of the United States bring such an action. Such court shall 
     have jurisdiction and power to order and require compliance 
     with such notice or order.''; and
       (2) in subsection (b), by striking ``or 1376'' and 
     inserting ``1313B, 1376, or 1377''.

     SEC. 1155. CIVIL MONEY PENALTIES.

       Section 1376 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4636) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) In General.--The Director may impose a civil money 
     penalty in accordance with this section on any regulated 
     entity or any entity-affiliated party. The Director shall not 
     impose a civil penalty in accordance with this section on any 
     regulated entity or any entity-affiliated party for any 
     violation that is addressed under section 1345(a).'';
       (2) by striking subsection (b) and inserting the following:
       ``(b) Amount of Penalty.--
       ``(1) First tier.--A regulated entity or entity-affiliated 
     party shall forfeit and pay a civil penalty of not more than 
     $10,000 for each day during which a violation continues, if 
     such regulated entity or party--
       ``(A) violates any provision of this title, the authorizing 
     statutes, or any order, condition, rule, or regulation under 
     this title or any authorizing statute;
       ``(B) violates any final or temporary order or notice 
     issued pursuant to this title;
       ``(C) violates any condition imposed in writing by the 
     Director in connection with the grant of any application or 
     other request by such regulated entity; or
       ``(D) violates any written agreement between the regulated 
     entity and the Director.
       ``(2) Second tier.--Notwithstanding paragraph (1), a 
     regulated entity or entity-affiliated party shall forfeit and 
     pay a civil penalty of not more than $50,000 for each day 
     during which a violation, practice, or breach continues, if--
       ``(A) the regulated entity or entity-affiliated party, 
     respectively--
       ``(i) commits any violation described in any subparagraph 
     of paragraph (1);
       ``(ii) recklessly engages in an unsafe or unsound practice 
     in conducting the affairs of the regulated entity; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) the violation, practice, or breach--
       ``(i) is part of a pattern of misconduct;
       ``(ii) causes or is likely to cause more than a minimal 
     loss to the regulated entity; or
       ``(iii) results in pecuniary gain or other benefit to such 
     party.
       ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
     any regulated entity or entity-affiliated party shall forfeit 
     and pay a civil penalty in an amount not to exceed the 
     applicable maximum amount determined under paragraph (4) for 
     each day during which such violation, practice, or breach 
     continues, if such regulated entity or entity-affiliated 
     party--
       ``(A) knowingly--
       ``(i) commits any violation described in any subparagraph 
     of paragraph (1);
       ``(ii) engages in any unsafe or unsound practice in 
     conducting the affairs of the regulated entity; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) knowingly or recklessly causes a substantial loss to 
     the regulated entity or a substantial pecuniary gain or other 
     benefit to such party by reason of such violation, practice, 
     or breach.
       ``(4) Maximum amounts of penalties for any violation 
     described in paragraph (3).--The maximum daily amount of any 
     civil penalty which may be assessed pursuant to paragraph (3) 
     for any violation, practice, or breach described in paragraph 
     (3) is--
       ``(A) in the case of any entity-affiliated party, an amount 
     not to exceed $2,000,000; and
       ``(B) in the case of any regulated entity, $2,000,000.'';
       (3) in subsection (c)--
       (A) by striking ``enterprise'' each place that term appears 
     and inserting ``regulated entity'';
       (B) by inserting ``or entity-affiliated party'' before ``in 
     writing''; and
       (C) by inserting ``or entity-affiliated party'' before 
     ``has been given'';
       (4) in subsection (d)--
       (A) by striking ``or director'' each place such term 
     appears and inserting ``director, or entity-affiliated 
     party'';
       (B) by striking ``an enterprise'' and inserting ``a 
     regulated entity'';
       (C) by striking ``the enterprise'' and inserting ``the 
     regulated entity'';
       (D) by striking ``request the Attorney General of the 
     United States to'';
       (E) by inserting ``, or the United States district court 
     within the jurisdiction of which the headquarters of the 
     regulated entity is located,'' after ``District of 
     Columbia'';
       (F) by striking ``, or may, under the direction and control 
     of the Attorney General of the United States, bring such an 
     action''; and
       (G) by striking ``and section 1374''; and
       (5) in subsection (g), by striking ``An enterprise'' and 
     inserting ``A regulated entity''.

     SEC. 1156. CRIMINAL PENALTY.

       (a) In General.--Subtitle C of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4631 et seq.) is amended by inserting after section 
     1377, as added by this Act, the following:

     ``SEC. 1378. CRIMINAL PENALTY.

       ``Whoever, being subject to an order in effect under 
     section 1377, without the prior written approval of the 
     Director, knowingly participates, directly or indirectly, in 
     any manner (including by engaging in an activity specifically 
     prohibited in such an order) in the conduct of the affairs of 
     any regulated entity shall, notwithstanding section 3571 of 
     title 18, be fined not more than $1,000,000, imprisoned for 
     not more than 5 years, or both.''.
       (b) Technical and Conforming Amendments.--The Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4501 et seq.) is amended--
       (1) in section 1379 (as so designated by this Act)--
       (A) by striking ``an enterprise'' and inserting ``a 
     regulated entity''; and
       (B) by striking ``the enterprise'' and inserting ``the 
     regulated entity'';
       (2) in section 1379A (as so designated by this Act), by 
     striking ``an enterprise'' and inserting ``a regulated 
     entity'';
       (3) in section 1379B(c) (as so designated by this Act), by 
     striking ``enterprise'' and inserting ``regulated entity''; 
     and
       (4) in section 1379D (as so designated by this Act), by 
     striking ``enterprise'' and inserting ``regulated entity''.

     SEC. 1157. NOTICE AFTER SEPARATION FROM SERVICE.

       Section 1379 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4637), as so 
     designated by this Act, is amended--
       (1) by striking ``2-year'' and inserting ``6-year'';
       (2) by striking ``a director or executive officer of an 
     enterprise'' and inserting ``an entity-affiliated party'';
       (3) by striking ``director or officer'' each place that 
     term appears and inserting ``entity-affiliated party''; and
       (4) by striking ``enterprise.'' and inserting ``regulated 
     entity.''.

     SEC. 1158. SUBPOENA AUTHORITY.

       (a) In General.--Section 1379B of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4641) is amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``administrative'';
       (ii) by inserting ``, examination, or investigation'' after 
     ``proceeding'';

[[Page 15992]]

       (iii) by striking ``subtitle'' and inserting ``title''; and
       (iv) by inserting ``or any designated representative 
     thereof, including any person designated to conduct any 
     hearing under this subtitle'' after ``Director''; and
       (B) in paragraph (4), by striking ``issued by the 
     Director'';
       (2) in subsection (b), by inserting ``or in any territory 
     or other place subject to the jurisdiction of the United 
     States'' after ``State'';
       (3) by striking subsection (c) and inserting the following:
       ``(c) Enforcement.--
       ``(1) In general.--The Director, or any party to 
     proceedings under this subtitle, may apply to the United 
     States District Court for the District of Columbia, or the 
     United States district court for the judicial district of the 
     United States in any territory in which such proceeding is 
     being conducted, or where the witness resides or carries on 
     business, for enforcement of any subpoena or subpoena duces 
     tecum issued pursuant to this section.
       ``(2) Power of court.--The courts described under paragraph 
     (1) shall have the jurisdiction and power to order and 
     require compliance with any subpoena issued under paragraph 
     (1).'';
       (4) in subsection (d), by inserting ``enterprise-affiliated 
     party'' before ``may allow''; and
       (5) by adding at the end the following:
       ``(e) Penalties.--A person shall be guilty of a 
     misdemeanor, and upon conviction, shall be subject to a fine 
     of not more than $1,000 or to imprisonment for a term of not 
     more than 1 year, or both, if that person willfully fails or 
     refuses, in disobedience of a subpoena issued under 
     subsection (c), to--
       ``(1) attend court;
       ``(2) testify in court;
       ``(3) answer any lawful inquiry; or
       ``(4) produce books, papers, correspondence, contracts, 
     agreements, or such other records as requested in the 
     subpoena.''.

                     Subtitle E--General Provisions

     SEC. 1161. CONFORMING AND TECHNICAL AMENDMENTS.

       (a) Amendments to 1992 Act.--The Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4501 et seq.), as amended by this Act, is amended--
       (1) in section 1315 (12 U.S.C. 4515)--
       (A) in subsection (a)--
       (i) by striking ``(a) Office Personnel.--The'' and 
     inserting ``(a) In General.--Subject to title III of the 
     Federal Housing Finance Regulatory Reform Act of 2008, the''; 
     and
       (ii) by striking ``the Office'' each place that term 
     appears and inserting ``the Agency'';
       (B) in subsection (c), by striking ``the Office'' and 
     inserting ``the Agency'';
       (C) in subsection (e), by striking ``the Office'' and 
     inserting ``the Agency'';
       (D) by striking subsection (d) and redesignating subsection 
     (e) as subsection (d); and
       (E) by striking subsection (f);
       (2) in section 1319A (12 U.S.C. 4520)--
       (A) by striking ``(a) In General.--''; and
       (B) by striking subsection (b);
       (3) in section 1364(c) (12 U.S.C. 4614(c)), by striking the 
     last sentence;
       (4) by striking section 1383 (12 U.S.C. 1451 note);
       (5) in each of sections 1319D, 1319E, and 1319F (12 U.S.C. 
     4523, 4524, 4525) by striking ``the Office'' each place that 
     term appears and inserting ``the Agency''; and
       (6) in each of sections 1319B and 1369(a)(3) (12 U.S.C. 
     4521, 4619(a)(3)), by striking ``Committee on Banking, 
     Finance and Urban Affairs'' each place such term appears and 
     inserting ``Committee on Financial Services''.
       (b) Amendments to Fannie Mae Charter Act.--The Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1716 et 
     seq.) is amended--
       (1) in each of sections 303(c)(2) (12 U.S.C. 1718(c)(2)), 
     309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)), and 309(k)(1) (12 
     U.S.C. 1723a(k)(1)), by striking ``Director of the Office of 
     Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development'' each place that term appears, 
     and inserting ``Director of the Federal Housing Finance 
     Agency''; and
       (2) in section 309--
       (A) in subsection (m) (12 U.S.C. 1723a(m))--
       (i) in paragraph (1), by striking ``to the Secretary, in a 
     form determined by the Secretary'' and inserting ``to the 
     Director of the Federal Housing Finance Agency, in a form 
     determined by the Director''; and
       (ii) in paragraph (2), by striking ``to the Secretary, in a 
     form determined by the Secretary'' and inserting ``to the 
     Director of the Federal Housing Finance Agency, in a form 
     determined by the Director'';
       (B) in subsection (n) (12 U.S.C. 1723a(n))--
       (i) in paragraph (1), by striking ``and the Secretary'' and 
     inserting ``and the Director of the Federal Housing Finance 
     Agency''; and
       (ii) in paragraph (2), by striking ``Secretary'' each place 
     that term appears and inserting ``Director of the Federal 
     Housing Finance Agency''; and
       (C) in paragraph (3)(B), by striking ``Secretary'' and 
     inserting ``Director of the Federal Housing Finance Agency''.
       (c) Amendments to Freddie Mac Charter Act.--The Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.) 
     is amended--
       (1) in each of sections 303(b)(2) (12 U.S.C. 1452(b)(2)), 
     303(h)(2) (12 U.S.C. 1452(h)(2)), and section 307(c)(1) (12 
     U.S.C. 1456(c)(1)), by striking ``Director of the Office of 
     Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development'' each place that term appears, 
     and inserting ``Director of the Federal Housing Finance 
     Agency'';
       (2) in section 306 (12 U.S.C. 1455)--
       (A) in subsection (c)(2), by inserting ``the'' after 
     ``Secretary of'';
       (B) in subsection (i)--
       (i) by striking ``section 1316(c)'' and inserting ``section 
     306(c)''; and
       (ii) by striking ``section 106'' and inserting ``section 
     1316''; and
       (C) in subsection (j)(2), by striking ``of substantially'' 
     and inserting ``or substantially''; and
       (3) in section 307 (12 U.S.C. 1456)--
       (A) in subsection (e)--
       (i) in paragraph (1), by striking ``to the Secretary, in a 
     form determined by the Secretary'' and inserting ``to the 
     Director of the Federal Housing Finance Agency, in a form 
     determined by the Director''; and
       (ii) in paragraph (2), by striking ``to the Secretary, in a 
     form determined by the Secretary'' and inserting ``to the 
     Director of the Federal Housing Finance Agency, in a form 
     determined by the Director''; and
       (B) in subsection (f)--
       (i) in paragraph (1), by striking ``and the Secretary'' and 
     inserting ``and the Director of the Federal Housing Finance 
     Agency'';
       (ii) in paragraph (2), by striking ``the Secretary'' each 
     place that term appears and inserting ``the Director of the 
     Federal Housing Finance Agency''; and
       (iii) in paragraph (3)(B), by striking ``Secretary'' and 
     inserting ``Director of the Federal Housing Finance Agency''.
       (d) Amendment to Title 18, United States Code.--Section 
     1905 of title 18, United States Code, is amended by striking 
     ``Office of Federal Housing Enterprise Oversight'' and 
     inserting ``Federal Housing Finance Agency''.
       (e) Amendments to Flood Disaster Protection Act of 1973.--
     Section 102(f)(3)(A) of the Flood Disaster Protection Act of 
     1973 (42 U.S.C. 4012a(f)(3)(A)) is amended by striking 
     ``Director of the Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban 
     Development'' and inserting ``Director of the Federal Housing 
     Finance Agency''.
       (f) Amendment to Department of Housing and Urban 
     Development Act.--Section 5 of the Department of Housing and 
     Urban Development Act (42 U.S.C. 3534) is amended by striking 
     subsection (d).
       (g) Amendments to Title 5, United States Code.--Title 5, 
     United States Code, is amended--
       (1) in section 5313, by striking the item relating to the 
     Director of the Office of Federal Housing Enterprise 
     Oversight, Department of Housing and Urban Development and 
     inserting the following new item:
       ``Director of the Federal Housing Finance Agency.''; and
       (2) in section 3132(a)(1)--
       (A) in subparagraph (B), by striking ``,, and'' and 
     inserting ``, and'';
       (B) in subparagraph (D)--
       (i) by striking ``the Federal Housing Finance Board'';
       (ii) by striking ``the Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban 
     Development'' and inserting ``the Federal Housing Finance 
     Agency''; and
       (iii) by striking ``or or'' at the end;
       (C) in subparagraph (E), as added by section 
     8(d)(1)(B)(iii) of Public Law 107-123, by adding ``or'' at 
     the end; and
       (D) by redesignating subparagraph (E), as added by section 
     10702(c)(1)(C) of Public Law 107-171, as subparagraph (F).
       (h) Amendment to Sarbanes-Oxley Act.--Section 
     105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 2002 (15 
     U.S.C. 7215(b)(5)(B)(ii)(II)) is amended by inserting ``and 
     the Director of the Federal Housing Finance Agency,'' after 
     ``Commission,''.
       (i) Amendment to Federal Deposit Insurance Act.--Section 
     11(t)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(t)(2)(A)) is amended by adding at the end the following:
       ``(vii) Federal Housing Finance Agency.''.

     SEC. 1162. PRESIDENTIALLY-APPOINTED DIRECTORS OF ENTERPRISES.

       (a) Fannie Mae.--
       (1) In general.--Section 308(b) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 
     amended--
       (A) in the first sentence, by striking ``eighteen persons, 
     five of whom shall be appointed annually by the President of 
     the United States, and the remainder of whom'' and inserting 
     ``13 persons, or such other number that the Director 
     determines appropriate, who'';
       (B) in the second sentence, by striking ``appointed by the 
     President'';
       (C) in the third sentence--
       (i) by striking ``appointed or''; and
       (ii) by striking ``, except that any such appointed member 
     may be removed from office by the President for good cause'';
       (D) in the fourth sentence, by striking ``elective''; and

[[Page 15993]]

       (E) by striking the fifth sentence.
       (2) Transitional provision.--The amendments made by 
     paragraph (1) shall not apply to any appointed position of 
     the board of directors of the Federal National Mortgage 
     Association until the expiration of the annual term for such 
     position during which the effective date under section 1163 
     occurs.
       (b) Freddie Mac.--
       (1) In general.--Section 303(a)(2) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1452(a)(2)) is amended--
       (A) in subparagraph (A)--
       (i) in the first sentence, by striking ``18 persons, 5 of 
     whom shall be appointed annually by the President of the 
     United States and the remainder of whom'' and inserting ``13 
     persons, or such other number as the Director determines 
     appropriate, who''; and
       (ii) in the second sentence, by striking ``appointed by the 
     President of the United States'';
       (B) in subparagraph (B)--
       (i) by striking ``such or''; and
       (ii) by striking ``, except that any appointed member may 
     be removed from office by the President for good cause''; and
       (C) in subparagraph (C)--
       (i) by striking the first sentence; and
       (ii) by striking ``elective''.
       (2) Transitional provision.--The amendments made by 
     paragraph (1) shall not apply to any appointed position of 
     the board of directors of the Federal Home Loan Mortgage 
     Corporation until the expiration of the annual term for such 
     position during which the effective date under section 1163 
     occurs.

     SEC. 1163. EFFECTIVE DATE.

       Except as otherwise specifically provided in this title, 
     this title and the amendments made by this title shall take 
     effect on, and shall apply beginning on, the date of 
     enactment of this Act.

                   TITLE II--FEDERAL HOME LOAN BANKS

     SEC. 1201. RECOGNITION OF DISTINCTIONS BETWEEN THE 
                   ENTERPRISES AND THE FEDERAL HOME LOAN BANKS.

       Section 1313 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4513) is amended 
     by adding at the end the following:
       ``(f) Recognition of Distinctions Between the Enterprises 
     and the Federal Home Loan Banks.--Prior to promulgating any 
     regulation or taking any other formal or informal agency 
     action of general applicability and future effect relating to 
     the Federal Home Loan Banks (other than any regulation, 
     advisory document, or examination guidance of the Federal 
     Housing Finance Board that the Director reissues after the 
     authority of the Director over the Federal Home Loan Banks 
     takes effect), including the issuance of an advisory document 
     or examination guidance, the Director shall consider the 
     differences between the Federal Home Loan Banks and the 
     enterprises with respect to--
       ``(1) the Banks'--
       ``(A) cooperative ownership structure;
       ``(B) the mission of providing liquidity to members;
       ``(C) affordable housing and community development mission;
       ``(D) capital structure; and
       ``(E) joint and several liability; and
       ``(2) any other differences that the Director considers 
     appropriate.''.

     SEC. 1202. DIRECTORS.

       Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 
     1427) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Number; Election; Qualifications; Conflicts of 
     Interest.--
       ``(1) In general.--Subject to paragraphs (2) through (4), 
     the management of each Federal Home Loan Bank shall be vested 
     in a board of 13 directors, or such other number as the 
     Director determines appropriate.
       ``(2) Board makeup.--The board of directors of each Bank 
     shall be comprised of--
       ``(A) member directors, who shall comprise at least the 
     majority of the members of the board of directors; and
       ``(B) independent directors, who shall comprise not fewer 
     than \2/5\ of the members of the board of directors.
       ``(3) Selection criteria.--
       ``(A) In general.--Each member of the board of directors 
     shall be--
       ``(i) elected by plurality vote of the members, in 
     accordance with procedures established under this section; 
     and
       ``(ii) a citizen of the United States.
       ``(B) Independent director criteria.--
       ``(i) In general.--Each independent director that is not a 
     public interest director under clause (ii) shall have 
     demonstrated knowledge of, or experience in, financial 
     management, auditing and accounting, risk management 
     practices, derivatives, project development, or 
     organizational management, or such other knowledge or 
     expertise as the Director may provide by regulation.
       ``(ii) Public interest.--Not fewer than 2 of the 
     independent directors shall have more than 4 years of 
     experience in representing consumer or community interests on 
     banking services, credit needs, housing, or financial 
     consumer protections.
       ``(iii) Conflicts of interest.--No independent director 
     may, during the term of service on the board of directors, 
     serve as an officer of any Federal Home Loan Bank or as a 
     director, officer, or employee of any member of a Bank, or of 
     any person that receives advances from a Bank.
       ``(4) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(A) Independent director.--The terms `independent 
     director' and `independent directorship' mean a member of the 
     board of directors of a Federal Home Loan Bank who is a bona 
     fide resident of the district in which the Federal Home Loan 
     Bank is located, or the directorship held by such a person, 
     respectively.
       ``(B) Member director.--The terms `member director' and 
     `member directorship' mean a member of the board of directors 
     of a Federal Home Loan Bank who is an officer or director of 
     a member institution that is located in the district in which 
     the Federal Home Loan Bank is located, or the directorship 
     held by such a person, respectively.'';
       (2) by striking ``elective'' each place that term appears, 
     other than in subsections (d), (e), and (f), and inserting 
     ``member'';
       (3) in subsection (b)--
       (A) by striking the subsection heading and all that follows 
     through ``Each elective directorship'' and inserting the 
     following:
       ``(b) Directorships.--
       ``(1) Member directorships.--Each member directorship''; 
     and
       (B) by adding at the end the following:
       ``(2) Independent directorships.--
       ``(A) Elections.--Each independent director--
       ``(i) shall be elected by the members entitled to vote, 
     from among eligible persons nominated, after consultation 
     with the Advisory Council of the Bank, by the board of 
     directors of the Bank; and
       ``(ii) shall be elected by a plurality of the votes of the 
     members of the Bank at large, with each member having the 
     number of votes for each such directorship as it has under 
     paragraph (1) in an election to fill member directorships.
       ``(B) Criteria.--Nominees shall meet all applicable 
     requirements prescribed in this section.
       ``(C) Nomination and election procedures.--Procedures for 
     nomination and election of independent directors shall be 
     prescribed by the bylaws of each Federal Home Loan Bank, in a 
     manner consistent with the rules and regulations of the 
     Agency.'';
       (4) in subsection (c)--
       (A) by striking ``elective'' each place that term appears 
     and inserting ``member'', except--
       (i) in the second sentence, the second place that term 
     appears; and
       (ii) each place that term appears in the fifth sentence; 
     and
       (B) in the second sentence--
       (i) by inserting ``(A) except as provided in clause (B) of 
     this sentence,'' before ``if at any time''; and
       (ii) by inserting before the period at the end the 
     following: ``, and (B) clause (A) of this sentence shall not 
     apply to the directorships of any Federal Home Loan Bank 
     resulting from the merger of any 2 or more such Banks'';
       (5) in subsection (d)--
       (A) in the first sentence--
       (i) by striking ``, whether elected or appointed,''; and
       (ii) by striking ``3 years'' and inserting ``4 years'';
       (B) in the second sentence--
       (i) by striking ``Federal Home Loan Bank System 
     Modernization Act of 1999'' and inserting ``Federal Housing 
     Finance Regulatory Reform Act of 2008'';
       (ii) by striking ``\1/3\'' and inserting ``\1/4\''; and
       (iii) by striking ``or appointed''; and
       (C) in the third sentence--
       (i) by striking ``an elective'' each place that term 
     appears and inserting ``a''; and
       (ii) by striking ``in any elective directorship or elective 
     directorships'';
       (6) in subsection (f)--
       (A) by striking paragraph (2);
       (B) by striking ``appointed or'' each place that term 
     appears; and
       (C) in paragraph (3)--
       (i) by striking ``(3) Elected bank directors.--'' and 
     inserting ``(2) Election process.--''; and
       (ii) by striking ``elective'' each place that term appears;
       (7) in subsection (i)--
       (A) in paragraph (1), by striking ``Subject to paragraph 
     (2), each'' and inserting ``Each''; and
       (B) by striking paragraph (2) and inserting the following:
       ``(2) Annual report.--The Director shall include, in the 
     annual report submitted to the Congress pursuant to section 
     1319B of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992, information regarding the compensation 
     and expenses paid by the Federal Home Loan Banks to the 
     directors on the boards of directors of the Banks.''; and
       (8) by adding at the end the following:
       ``(l) Transition Rule.--Any member of the board of 
     directors of a Bank elected or appointed in accordance with 
     this section prior to the date of enactment of this 
     subsection may continue to serve as a member of that board of 
     directors for the remainder of the existing term of 
     service.''.

     SEC. 1203. DEFINITIONS.

       Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 
     1422) is amended--
       (1) by striking paragraphs (1), (10), and (11);

[[Page 15994]]

       (2) by redesignating paragraphs (2) through (9) as 
     paragraphs (1) through (8), respectively;
       (3) by redesignating paragraphs (12) and (13) as paragraphs 
     (9) and (10), respectively; and
       (4) by adding at the end the following:
       ``(11) Director.--The term `Director' means the Director of 
     the Federal Housing Finance Agency.
       ``(12) Agency.--The term `Agency' means the Federal Housing 
     Finance Agency, established under section 1311 of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992.''.

     SEC. 1204. AGENCY OVERSIGHT OF FEDERAL HOME LOAN BANKS.

       The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), 
     other than in provisions of that Act added or amended 
     otherwise by this Act, is amended--
       (1) by striking sections 2A and 2B (12 U.S.C. 1422a, 
     1422b);
       (2) in section 18 (12 U.S.C. 1438), by striking subsection 
     (b);
       (3) in section 11 (12 U.S.C. 1431)--
       (A) in subsection (b)--
       (i) in the first sentence--

       (I) by striking ``The Board'' and inserting ``The Office of 
     Finance, as agent for the Banks,''; and
       (II) by striking ``the Board'' and inserting ``such 
     Office''; and

       (ii) in the second and fourth sentences, by striking ``the 
     Board'' each place such term appears and inserting ``the 
     Office of Finance'';
       (B) in subsection (c)--
       (i) by striking ``the Board'' the first place such term 
     appears and inserting ``the Office of Finance, as agent for 
     the Banks,''; and
       (ii) by striking ``the Board'' the second place such term 
     appears and inserting ``such Office''; and
       (C) in subsection (f)--
       (i) by striking the 2 commas after ``permit'' and inserting 
     ``or''; and
       (ii) by striking the comma after ``require'';
       (4) in section 6 (12 U.S.C. 1426)--
       (A) in subsection (b)(1), in the matter preceding 
     subparagraph (A), by striking ``Finance Board approval'' and 
     inserting ``approval by the Director''; and
       (B) in each of subsections (c)(4)(B) and (d)(2), by 
     striking ``Finance Board regulations'' each place that term 
     appears and inserting ``regulations of the Director'';
       (5) in section 10(b) (12 U.S.C. 1430(b))--
       (A) in the subsection heading, by striking ``Formal Board 
     Resolution'' and inserting ``Approval of Director''; and
       (B) by striking ``by formal resolution'';
       (6) in section 21(b)(5) (12 U.S.C. 1441(b)(5)), by striking 
     ``Chairperson of the Federal Housing Finance Board'' and 
     inserting ``Director'';
       (7) in section 15 (12 U.S.C. 1435), by inserting ``or the 
     Director'' after ``the Board'';
       (8) by striking ``the Board'' each place that term appears 
     and inserting ``the Director'';
       (9) by striking ``The Board'' each place that term appears 
     and inserting ``The Director'';
       (10) by striking ``the Finance Board'' each place that term 
     appears and inserting ``the Director'';
       (11) by striking ``The Finance Board'' each place that term 
     appears and inserting ``The Director''; and
       (12) by striking ``Federal Housing Finance Board'' each 
     place that term appears and inserting ``Director''.

     SEC. 1205. HOUSING GOALS.

       The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is 
     amended by inserting after section 10b the following new 
     section:

     ``SEC. 10C. HOUSING GOALS.

       ``(a) In General.--The Director shall establish housing 
     goals with respect to the purchase of mortgages, if any, by 
     the Federal Home Loan Banks. Such goals shall be consistent 
     with the goals established under sections 1331 through 1334 
     of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992.
       ``(b) Considerations.--In establishing the goals required 
     by subsection (a), the Director shall consider the unique 
     mission and ownership structure of the Federal Home Loan 
     Banks.
       ``(c) Transition Period.--To facilitate an orderly 
     transition, the Director shall establish interim target goals 
     for purposes of this section for each of the 2 calendar years 
     following the date of enactment of this section.
       ``(d) Monitoring and Enforcement of Goals.--The 
     requirements of section 1336 of the Federal Housing 
     Enterprises Safety and Soundness Act of 1992, shall apply to 
     this section, in the same manner and to the same extent as 
     that section applies to the Federal housing enterprises.
       ``(e) Annual Report.--The Director shall annually report to 
     Congress on the performance of the Banks in meeting the goals 
     established under this section.''.

     SEC. 1206. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS.

       Section 4(a)(1) of the Federal Home Loan Bank Act (12 
     U.S.C. 1424(a)(1)) is amended--
       (1) by inserting after ``savings bank,'' the following: 
     ``community development financial institution,''; and
       (2) in subparagraph (B), by inserting after ``United 
     States,'' the following: ``or, in the case of a community 
     development financial institution, is certified as a 
     community development financial institution under the 
     Community Development Banking and Financial Institutions Act 
     of 1994.''.

     SEC. 1207. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN 
                   BANKS.

       The Federal Home Loan Bank Act is amended by inserting 
     after section 20 (12 U.S.C. 1440) the following new section:

     ``SEC. 20A. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN 
                   BANKS.

       ``(a) Information on Financial Condition.--In order to 
     enable each Federal Home Loan Bank to evaluate the financial 
     condition of one or more of the other Federal Home Loan Banks 
     individually and the Federal Home Loan Bank System (including 
     any risks associated with the issuance or repayment of 
     consolidated Federal Home Loan Bank bonds and debentures or 
     other borrowings and the joint and several liabilities of the 
     Banks incurred due to such borrowings), as well as to comply 
     with any of its obligations under the Securities Exchange Act 
     of 1934 (15 U.S.C. 78a et seq.), the Director shall make 
     available to the Banks such reports, records, or other 
     information as may be available, relating to the condition of 
     any Federal Home Loan Bank.
       ``(b) Sharing of Information.--
       ``(1) In general.--The Director shall promulgate 
     regulations to facilitate the sharing of information made 
     available under subsection (a) directly among the Federal 
     Home Loan Banks.
       ``(2) Limitation.--Notwithstanding paragraph (1), a Federal 
     Home Loan Bank responding to a request from another Bank or 
     from the Director for information pursuant to this section 
     may request that the Director determine that such information 
     is proprietary and that the public interest requires that 
     such information not be shared.
       ``(c) Limitation.--Nothing in this section shall affect the 
     obligations of any Federal Home Loan Bank under the 
     Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) or 
     the regulations issued by the Securities and Exchange 
     Commission thereunder.
       ``(d) No Waiver of Privilege.--The Director shall not be 
     deemed to have waived any privilege applicable to any 
     information concerning a Federal Home Loan Bank by 
     transferring, or permitting the transfer of, that information 
     to any other Federal Home Loan Bank for the purposes set out 
     in subsection (a).''.

     SEC. 1208. EXCLUSION FROM CERTAIN REQUIREMENTS.

       (a) In General.--The Federal Home Loan Banks shall be 
     exempt from compliance with--
       (1) sections 13(e), 14(a), and 14(c) of the Securities 
     Exchange Act of 1934, and related Commission regulations;
       (2) section 15 of the Securities Exchange Act of 1934, and 
     related Commission regulations, with respect to transactions 
     in the capital stock of a Federal Home Loan Bank;
       (3) section 17A of the Securities Exchange Act of 1934, and 
     related Commission regulations, with respect to the transfer 
     of the securities of a Federal Home Loan Bank; and
       (4) the Trust Indenture Act of 1939.
       (b) Member Exemption.--The members of the Federal Home Loan 
     Bank System shall be exempt from compliance with sections 
     13(d), 13(f), 13(g), 14(d), and 16 of the Securities Exchange 
     Act of 1934, and related Commission regulations, with respect 
     to ownership of or transactions in the capital stock of the 
     Federal Home Loan Banks by such members.
       (c) Exempted and Government Securities.--
       (1) Capital stock.--The capital stock issued by each of the 
     Federal Home Loan Banks under section 6 of the Federal Home 
     Loan Bank Act are--
       (A) exempted securities, within the meaning of section 
     3(a)(2) of the Securities Act of 1933; and
       (B) exempted securities, within the meaning of section 
     3(a)(12)(A) of the Securities Exchange Act of 1934, except to 
     the extent provided in section 38 of that Act.
       (2) Other obligations.--The debentures, bonds, and other 
     obligations issued under section 11 of the Federal Home Loan 
     Bank Act (12 U.S.C. 1431) are--
       (A) exempted securities, within the meaning of section 
     3(a)(2) of the Securities Act of 1933;
       (B) government securities, within the meaning of section 
     3(a)(42) of the Securities Exchange Act of 1934; and
       (C) government securities, within the meaning of section 
     2(a)(16) of the Investment Company Act of 1940.
       (3) Brokers and dealers.--A person (other than a Federal 
     Home Loan Bank effecting transactions for members of the 
     Federal Home Loan Bank System) that effects transactions in 
     the capital stock or other obligations of a Federal Home Loan 
     Bank, for the account of others or for that person's own 
     account, as applicable, is a broker or dealer, as those terms 
     are defined in paragraphs (4) and (5), respectively, of 
     section 3(a) of the Securities Exchange Act of 1934, but is 
     excluded from the definition of--
       (A) the term ``government securities broker'' under section 
     3(a)(43) of the Securities Exchange Act of 1934; and

[[Page 15995]]

       (B) the term ``government securities dealer'' under section 
     3(a)(44) of the Securities Exchange Act of 1934.
       (d) Exemption From Reporting Requirements.--The Federal 
     Home Loan Banks shall be exempt from periodic reporting 
     requirements under the securities laws pertaining to the 
     disclosure of--
       (1) related party transactions that occur in the ordinary 
     course of the business of the Banks with members; and
       (2) the unregistered sales of equity securities.
       (e) Tender Offers.--Commission rules relating to tender 
     offers shall not apply in connection with transactions in the 
     capital stock of the Federal Home Loan Banks.
       (f) Regulations.--
       (1) In general.--The Commission shall promulgate such rules 
     and regulations as may be necessary or appropriate in the 
     public interest or in furtherance of this section and the 
     exemptions provided in this section.
       (2) Considerations.--In issuing regulations under this 
     section, the Commission shall consider the distinctive 
     characteristics of the Federal Home Loan Banks when 
     evaluating--
       (A) the accounting treatment with respect to the payment to 
     the Resolution Funding Corporation;
       (B) the role of the combined financial statements of the 
     Federal Home Loan Banks;
       (C) the accounting classification of redeemable capital 
     stock; and
       (D) the accounting treatment related to the joint and 
     several nature of the obligations of the Banks.
       (g) Definitions.--As used in this section--
       (1) the terms ``Bank'', ``Federal Home Loan Bank'', 
     ``member'', and ``Federal Home Loan Bank System'' have the 
     same meanings as in section 2 of the Federal Home Loan Bank 
     Act (12 U.S.C. 1422);
       (2) the term ``Commission'' means the Securities and 
     Exchange Commission; and
       (3) the term ``securities laws'' has the same meaning as in 
     section 3(a)(47) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78c(a)(47)).

     SEC. 1209. VOLUNTARY MERGERS.

       Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 
     1446) is amended--
       (1) by striking ``Whenever'' and inserting ``(a) In 
     General.--Whenever''; and
       (2) by adding at the end the following:
       ``(b) Voluntary Mergers Authorized.--
       ``(1) In general.--Any Federal Home Loan Bank may, with the 
     approval of the Director and of the boards of directors of 
     the Banks involved, merge with another Bank.
       ``(2) Regulations required.--The Director shall promulgate 
     regulations establishing the conditions and procedures for 
     the consideration and approval of any voluntary merger 
     described in paragraph (1), including the procedures for Bank 
     member approval.''.

     SEC. 1210. AUTHORITY TO REDUCE DISTRICTS.

       Section 3 of the Federal Home Loan Bank Act (12 U.S.C. 
     1423) is amended--
       (1) by striking ``As soon'' and inserting ``(a) In 
     General.--As soon''; and
       (2) by adding at the end the following:
       ``(b) Authority To Reduce Districts.--Notwithstanding 
     subsection (a), the number of districts may be reduced to a 
     number less than 8--
       ``(1) pursuant to a voluntary merger between Banks, as 
     approved pursuant to section 26(b); or
       ``(2) pursuant to a decision by the Director to liquidate a 
     Bank pursuant to section 1367 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992.''.

     SEC. 1211. COMMUNITY FINANCIAL INSTITUTION MEMBERS.

       (a) Total Asset Requirement.--Paragraph (10) of section 2 
     of the Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so 
     redesignated by section 201(3) of this Act, is amended by 
     striking ``$500,000,000'' each place such term appears and 
     inserting ``$1,000,000,000''.
       (b) Use of Advances for Community Development Activities.--
     Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C. 
     1430(a)) is amended--
       (1) in paragraph (2)(B)--
       (A) by striking ``and''; and
       (B) by inserting ``, and community development activities'' 
     before the period at the end;
       (2) in paragraph (3)(E), by inserting ``or community 
     development activities'' after ``agriculture,''; and
       (3) in paragraph (6)--
       (A) by striking ``and''; and
       (B) by inserting ``, and `community development activities' 
     '' before ``shall''.

     SEC. 1212. PUBLIC USE DATABASE; REPORTS TO CONGRESS.

       Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 
     1430) is amended--
       (1) in subsection (j)(12)--
       (A) by striking subparagraph (C) and inserting the 
     following:
       ``(C) Reports.--The Director shall annually report to the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate and the Committee on Financial Services of the House 
     of Representatives on the collateral pledged to the Banks, 
     including an analysis of collateral by type and by Bank 
     district.''; and
       (B) by adding at the end the following:
       ``(D) Submission to congress.--The Director shall submit 
     the reports under subparagraphs (A) and (C) to the Committee 
     on Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives, not later than 180 days after the date of 
     enactment of the Federal Housing Finance Regulatory Reform 
     Act of 2008.''; and
       (2) by adding at the end the following:
       ``(k) Public Use Database.--
       ``(1) Data.--Each Federal Home Loan Bank shall provide to 
     the Director, in a form determined by the Director, census 
     tract level data relating to mortgages purchased, if any, 
     including--
       ``(A) data consistent with that reported under section 1323 
     of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992;
       ``(B) data elements required to be reported under the Home 
     Mortgage Disclosure Act of 1975; and
       ``(C) any other data elements that the Director considers 
     appropriate.
       ``(2) Public use database.--
       ``(A) In general.--The Director shall make available to the 
     public, in a form that is useful to the public (including 
     forms accessible electronically), and to the extent 
     practicable, the data provided to the Director under 
     paragraph (1).
       ``(B) Proprietary information.--Not withstanding 
     subparagraph (A), the Director may not provide public access 
     to, or disclose to the public, any information required to be 
     submitted under this subsection that the Director determines 
     is proprietary or that would provide personally identifiable 
     information and that is not otherwise publicly accessible 
     through other forms, unless the Director determines that it 
     is in the public interest to provide such information.''.

     SEC. 1213. SEMIANNUAL REPORTS.

       Section 21B of the Federal Home Loan Bank Act is amended in 
     subsection (f)(2)(C), by adding at the end the following:
       ``(v) Semiannual reports.--The Director shall report 
     semiannually to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives on the projected date for the 
     completion of contributions required by this section.''.

     SEC. 1214. LIQUIDATION OR REORGANIZATION OF A FEDERAL HOME 
                   LOAN BANK.

       Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 
     1446) is amended by adding at the end the following: ``At 
     least 30 days prior to liquidating or reorganizing any Bank 
     under this section, the Director shall notify the Bank of its 
     determination and the facts and circumstances upon which such 
     determination is based. The Bank may contest that 
     determination in a hearing before the Director, in which all 
     issues shall be determined on the record pursuant to section 
     554 of title 5, United States Code.''.

     SEC. 1215. STUDY AND REPORT TO CONGRESS ON SECURITIZATION OF 
                   ACQUIRED MEMBER ASSETS.

       (a) Study.--The Director shall conduct a study on 
     securitization of home mortgage loans purchased or to be 
     purchased from member financial institutions under the 
     Acquired Member Assets programs. In conducting the study, the 
     Director shall establish a process for the formal submission 
     of comments.
       (b) Elements.--The study shall encompass--
       (1) the benefits and risks associated with securitization 
     of Acquired Member Assets;
       (2) the potential impact of securitization upon liquidity 
     in the mortgage and broader credit markets;
       (3) the ability of the Federal Home Loan Bank or Banks in 
     question to manage the risks associated with such a program;
       (4) the impact of such a program on the existing activities 
     of the Banks, including their mortgage portfolios and 
     advances; and
       (5) the joint and several liability of the Banks and the 
     cooperative structure of the Federal Home Loan Bank System.
       (c) Consultations.--In conducting the study under this 
     section, the Director shall consult with the Federal Home 
     Loan Banks, the Banks' fiscal agent, representatives of the 
     mortgage lending industry, practitioners in the structured 
     finance field, and other experts as needed.
       (d) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Director shall submit a report to 
     Congress on the results of the study conducted under 
     subsection (a), including policy recommendations based on the 
     analysis of the Director of the feasibility of mortgage-
     backed securities issuance by a Federal Home Loan Bank or 
     Banks and the risks and benefits associated with such program 
     or programs.
       (e) Definitions.--As used in this section, the terms 
     ``member'', ``Bank'', and ``Federal Home Loan Bank'' have the 
     same meanings as in section 2 of the Federal Home Loan Bank 
     Act (12 U.S.C. 1422).

     SEC. 1216. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Right to Financial Privacy Act of 1978.--Section 
     1113(o) of the Right to Financial Privacy Act of 1978 (12 
     U.S.C. 3413(o)) is amended--
       (1) by striking ``Federal Housing Finance Board'' and 
     inserting ``Federal Housing Finance Agency''; and
       (2) by striking ``Federal Housing Finance Board's'' and 
     inserting ``Federal Housing Finance Agency's''.

[[Page 15996]]

       (b) Riegle Community Development and Regulatory Improvement 
     Act of 1994.--Section 117(e) of the Riegle Community 
     Development and Regulatory Improvement Act of 1994 (12 U.S.C. 
     4716(e)) is amended by striking ``Federal Housing Finance 
     Board'' and inserting ``Federal Housing Finance Agency''.
       (c) Title 18, United States Code.--Title 18, United States 
     Code, is amended by striking ``Federal Housing Finance 
     Board'' each place such term appears in each of sections 212, 
     657, 1006, and 1014, and inserting ``Federal Housing Finance 
     Agency''.
       (d) MAHRA Act of 1997.--Section 517(b)(4) of the 
     Multifamily Assisted Housing Reform and Affordability Act of 
     1997 (42 U.S.C. 1437f note) is amended by striking ``Federal 
     Housing Finance Board'' and inserting ``Federal Housing 
     Finance Agency''.
       (e) Title 44, United States Code.--Section 3502(5) of title 
     44, United States Code, is amended by striking ``Federal 
     Housing Finance Board'' and inserting ``Federal Housing 
     Finance Agency''.
       (f) Access to Local TV Act of 2000.--Section 
     1004(d)(2)(D)(iii) of the Launching Our Communities' Access 
     to Local Television Act of 2000 (47 U.S.C. 
     1103(d)(2)(D)(iii)) is amended by striking ``Office of 
     Federal Housing Enterprise Oversight, the Federal Housing 
     Finance Board'' and inserting ``Federal Housing Finance 
     Agency''.
       (g) FIRREA.--Section 1216 of the Financial Institutions 
     Reform, Recovery, and Enhancement Act of 1989 (12 U.S.C. 
     1833e) is amended--
       (1) in subsection (a), by striking paragraph (3) and 
     inserting the following:
       ``(3) the Federal Housing Finance Agency;'';
       (2) in subsection (b), by striking ``Federal National 
     Mortgage Association'' and inserting ``Federal Home Loan 
     Banks, the Federal National Mortgage Association,''; and
       (3) in subsection (c), by striking ``Finance Board'' and 
     inserting ``Finance Agency''.

     SEC. 1217. STUDY ON FEDERAL HOME LOAN BANK ADVANCES.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Director shall conduct a study and 
     submit a report to the Committee on Banking, Housing, and 
     Urban Affairs of the Senate and the Committee on Financial 
     Services of the House or Representatives on the extent to 
     which loans and securities used as collateral to support 
     Federal Home Loan Bank advances are consistent with the 
     interagency guidance on nontraditional mortgage products.
       (b) Required Content.--The study required under subsection 
     (a) shall--
       (1) consider and recommend any additional regulations, 
     guidance, advisory bulletins, or other administrative actions 
     necessary to ensure that the Federal Home Loan Banks are not 
     supporting loans with predatory characteristics; and
       (2) include an opportunity for the public to comment on any 
     recommendations made under paragraph (1).

     SEC. 1218. FEDERAL HOME LOAN BANK REFINANCING AUTHORITY FOR 
                   CERTAIN RESIDENTIAL MORTGAGE LOANS.

       Section 10(j)(2) of the Federal Home Loan Bank Act (12 
     U.S.C. 1430(j)(2)) is amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) during the 2-year period beginning on the date of 
     enactment of this subparagraph, use such percentage as the 
     Director may by regulation establish of any subsidized 
     advances set aside to finance homeownership under 
     subparagraph (A) to refinance loans that are secured by a 
     first mortgage on a primary residence of any family having an 
     income at or below 80 percent of the median income for the 
     area.''.

TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND 
                   THE FEDERAL HOUSING FINANCE BOARD

                           Subtitle A--OFHEO

     SEC. 1301. ABOLISHMENT OF OFHEO.

       (a) In General.--Effective at the end of the 1-year period 
     beginning on the date of enactment of this Act, the Office of 
     Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development and the positions of the 
     Director and Deputy Director of such Office are abolished.
       (b) Disposition of Affairs.--During the 1-year period 
     beginning on the date of enactment of this Act, the Director 
     of the Office of Federal Housing Enterprise Oversight, solely 
     for the purpose of winding up the affairs of the Office of 
     Federal Housing Enterprise Oversight--
       (1) shall manage the employees of such Office and provide 
     for the payment of the compensation and benefits of any such 
     employee which accrue before the effective date of the 
     transfer of such employee under section 1303; and
       (2) may take any other action necessary for the purpose of 
     winding up the affairs of the Office.
       (c) Status of Employees Before Transfer.--The amendments 
     made by title I and the abolishment of the Office of Federal 
     Housing Enterprise Oversight under subsection (a) of this 
     section may not be construed to affect the status of any 
     employee of such Office as an employee of an agency of the 
     United States for purposes of any other provision of law 
     before the effective date of the transfer of any such 
     employee under section 1303.
       (d) Use of Property and Services.--
       (1) Property.--The Director may use the property of the 
     Office of Federal Housing Enterprise Oversight to perform 
     functions which have been transferred to the Director for 
     such time as is reasonable to facilitate the orderly transfer 
     of functions transferred under any other provision of this 
     Act or any amendment made by this Act to any other provision 
     of law.
       (2) Agency services.--Any agency, department, or other 
     instrumentality of the United States, and any successor to 
     any such agency, department, or instrumentality, which was 
     providing supporting services to the Office of Federal 
     Housing Enterprise Oversight before the expiration of the 
     period under subsection (a) in connection with functions that 
     are transferred to the Director shall--
       (A) continue to provide such services, on a reimbursable 
     basis, until the transfer of such functions is complete; and
       (B) consult with any such agency to coordinate and 
     facilitate a prompt and reasonable transition.
       (e) Continuation of Services.--The Director may use the 
     services of employees and other personnel of the Office of 
     Federal Housing Enterprise Oversight, on a reimbursable 
     basis, to perform functions which have been transferred to 
     the Director for such time as is reasonable to facilitate the 
     orderly transfer of functions pursuant to any other provision 
     of this Act or any amendment made by this Act to any other 
     provision of law.
       (f) Savings Provisions.--
       (1) Existing rights, duties, and obligations not 
     affected.--Subsection (a) shall not affect the validity of 
     any right, duty, or obligation of the United States, the 
     Director of the Office of Federal Housing Enterprise 
     Oversight, or any other person, which--
       (A) arises under--
       (i) the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992;
       (ii) the Federal National Mortgage Association Charter Act;
       (iii) the Federal Home Loan Mortgage Corporation Act; or
       (iv) any other provision of law applicable with respect to 
     such Office; and
       (B) existed on the day before the date of abolishment under 
     subsection (a).
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Director of the Office of Federal 
     Housing Enterprise Oversight in connection with functions 
     that are transferred to the Director of the Federal Housing 
     Finance Agency shall abate by reason of the enactment of this 
     Act, except that the Director of the Federal Housing Finance 
     Agency shall be substituted for the Director of the Office of 
     Federal Housing Enterprise Oversight as a party to any such 
     action or proceeding.

     SEC. 1302. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.

       (a) In General.--All regulations, orders, and 
     determinations described in subsection (b) shall remain in 
     effect according to the terms of such regulations, orders, 
     and determinations, and shall be enforceable by or against 
     the Director or the Secretary of Housing and Urban 
     Development, as the case may be, until modified, terminated, 
     set aside, or superseded in accordance with applicable law by 
     the Director or the Secretary, as the case may be, any court 
     of competent jurisdiction, or operation of law.
       (b) Applicability.--A regulation, order, or determination 
     is described in this subsection if it--
       (1) was issued, made, prescribed, or allowed to become 
     effective by--
       (A) the Office of Federal Housing Enterprise Oversight;
       (B) the Secretary of Housing and Urban Development, and 
     relates to the authority of the Secretary under--
       (i) the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992;
       (ii) the Federal National Mortgage Association Charter Act, 
     with respect to the Federal National Mortgage Association; or
       (iii) the Federal Home Loan Mortgage Corporation Act, with 
     respect to the Federal Home Loan Mortgage Corporation; or
       (C) a court of competent jurisdiction, and relates to 
     functions transferred by this Act; and
       (2) is in effect on the effective date of the abolishment 
     under section 1301(a).

     SEC. 1303. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

       (a) Transfer.--Each employee of the Office of Federal 
     Housing Enterprise Oversight shall be transferred to the 
     Agency for employment, not later than the effective date of 
     the abolishment under section 1301(a), and such transfer 
     shall be deemed a transfer of function for purposes of 
     section 3503 of title 5, United States Code.
       (b) Guaranteed Positions.--
       (1) In general.--Each employee transferred under subsection 
     (a) shall be guaranteed a position with the same status, 
     tenure, grade, and pay as that held on the day immediately 
     preceding the transfer.

[[Page 15997]]

       (2) No involuntary separation or reduction.--An employee 
     transferred under subsection (a) holding a permanent position 
     on the day immediately preceding the transfer may not be 
     involuntarily separated or reduced in grade or compensation 
     during the 12-month period beginning on the date of transfer, 
     except for cause, or, in the case of a temporary employee, 
     separated in accordance with the terms of the appointment of 
     the employee.
       (c) Appointment Authority for Excepted and Senior Executive 
     Service Employees.--
       (1) In general.--In the case of an employee occupying a 
     position in the excepted service or the Senior Executive 
     Service, any appointment authority established under law or 
     by regulations of the Office of Personnel Management for 
     filling such position shall be transferred, subject to 
     paragraph (2).
       (2) Decline of transfer.--The Director may decline a 
     transfer of authority under paragraph (1) to the extent that 
     such authority relates to--
       (A) a position excepted from the competitive service 
     because of its confidential, policymaking, policy-
     determining, or policy-advocating character; or
       (B) a noncareer position in the Senior Executive Service 
     (within the meaning of section 3132(a)(7) of title 5, United 
     States Code).
       (d) Reorganization.--If the Director determines, after the 
     end of the 1-year period beginning on the effective date of 
     the abolishment under section 1301(a), that a reorganization 
     of the combined workforce is required, that reorganization 
     shall be deemed a major reorganization for purposes of 
     affording affected employee retirement under section 
     8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code.
       (e) Employee Benefit Programs.--
       (1) In general.--Any employee of the Office of Federal 
     Housing Enterprise Oversight accepting employment with the 
     Agency as a result of a transfer under subsection (a) may 
     retain, for 12 months after the date on which such transfer 
     occurs, membership in any employee benefit program of the 
     Agency or the Office of Federal Housing Enterprise Oversight 
     of the Department of Housing and Urban Development, as 
     applicable, including insurance, to which such employee 
     belongs on the date of the abolishment under section 1301(a), 
     if--
       (A) the employee does not elect to give up the benefit or 
     membership in the program; and
       (B) the benefit or program is continued by the Director of 
     the Federal Housing Finance Agency.
       (2) Cost differential.--
       (A) In general.--The difference in the costs between the 
     benefits which would have been provided by the Office of 
     Federal Housing Enterprise Oversight and those provided by 
     this section shall be paid by the Director.
       (B) Health insurance.--If any employee elects to give up 
     membership in a health insurance program or the health 
     insurance program is not continued by the Director, the 
     employee shall be permitted to select an alternate Federal 
     health insurance program not later than 30 days after the 
     date of such election or notice, without regard to any other 
     regularly scheduled open season.

     SEC. 1304. TRANSFER OF PROPERTY AND FACILITIES.

       Upon the effective date of its abolishment under section 
     1301(a), all property of the Office of Federal Housing 
     Enterprise Oversight shall transfer to the Agency.

               Subtitle B--Federal Housing Finance Board

     SEC. 1311. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.

       (a) In General.--Effective at the end of the 1-year period 
     beginning on the date of enactment of this Act, the Federal 
     Housing Finance Board (in this subtitle referred to as the 
     ``Board'') is abolished.
       (b) Disposition of Affairs.--During the 1-year period 
     beginning on the date of enactment of this Act, the Board, 
     solely for the purpose of winding up the affairs of the 
     Board--
       (1) shall manage the employees of the Board and provide for 
     the payment of the compensation and benefits of any such 
     employee which accrue before the effective date of the 
     transfer of such employee under section 1313; and
       (2) may take any other action necessary for the purpose of 
     winding up the affairs of the Board.
       (c) Status of Employees Before Transfer.--The amendments 
     made by titles I and II and the abolishment of the Board 
     under subsection (a) may not be construed to affect the 
     status of any employee of the Board as an employee of an 
     agency of the United States for purposes of any other 
     provision of law before the effective date of the transfer of 
     any such employee under section 1313.
       (d) Use of Property and Services.--
       (1) Property.--The Director may use the property of the 
     Board to perform functions which have been transferred to the 
     Director, for such time as is reasonable to facilitate the 
     orderly transfer of functions transferred under any other 
     provision of this Act or any amendment made by this Act to 
     any other provision of law.
       (2) Agency services.--Any agency, department, or other 
     instrumentality of the United States, and any successor to 
     any such agency, department, or instrumentality, which was 
     providing supporting services to the Board before the 
     expiration of the 1-year period under subsection (a) in 
     connection with functions that are transferred to the 
     Director shall--
       (A) continue to provide such services, on a reimbursable 
     basis, until the transfer of such functions is complete; and
       (B) consult with any such agency to coordinate and 
     facilitate a prompt and reasonable transition.
       (e) Continuation of Services.--The Director may use the 
     services of employees and other personnel of the Board, on a 
     reimbursable basis, to perform functions which have been 
     transferred to the Director for such time as is reasonable to 
     facilitate the orderly transfer of functions pursuant to any 
     other provision of this Act or any amendment made by this Act 
     to any other provision of law.
       (f) Savings Provisions.--
       (1) Existing rights, duties, and obligations not 
     affected.--Subsection (a) shall not affect the validity of 
     any right, duty, or obligation of the United States, a member 
     of the Board, or any other person, which--
       (A) arises under the Federal Home Loan Bank Act, or any 
     other provision of law applicable with respect to the Board; 
     and
       (B) existed on the day before the effective date of the 
     abolishment under subsection (a).
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Board in connection with 
     functions that are transferred under this Act to the Director 
     shall abate by reason of the enactment of this Act, except 
     that the Director shall be substituted for the Board or any 
     member thereof as a party to any such action or proceeding.

     SEC. 1312. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.

       (a) In General.--All regulations, orders, determinations, 
     and resolutions described under subsection (b) shall remain 
     in effect according to the terms of such regulations, orders, 
     determinations, and resolutions, and shall be enforceable by 
     or against the Director until modified, terminated, set 
     aside, or superseded in accordance with applicable law by the 
     Director, any court of competent jurisdiction, or operation 
     of law.
       (b) Applicability.--A regulation, order, determination, or 
     resolution is described under this subsection if it--
       (1) was issued, made, prescribed, or allowed to become 
     effective by--
       (A) the Board; or
       (B) a court of competent jurisdiction, and relates to 
     functions transferred by this Act; and
       (2) is in effect on the effective date of the abolishment 
     under section 1311(a).

     SEC. 1313. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL 
                   HOUSING FINANCE BOARD.

       (a) Transfer.--Each employee of the Board shall be 
     transferred to the Agency for employment, not later than the 
     effective date of the abolishment under section 1311(a), and 
     such transfer shall be deemed a transfer of function for 
     purposes of section 3503 of title 5, United States Code.
       (b) Guaranteed Positions.--
       (1) In general.--Each employee transferred under subsection 
     (a) shall be guaranteed a position with the same status, 
     tenure, grade, and pay as that held on the day immediately 
     preceding the transfer.
       (2) No involuntary separation or reduction.--An employee 
     holding a permanent position on the day immediately preceding 
     the transfer may not be involuntarily separated or reduced in 
     grade or compensation during the 12-month period beginning on 
     the date of transfer, except for cause, or, if the employee 
     is a temporary employee, separated in accordance with the 
     terms of the appointment of the employee.
       (c) Appointment Authority for Excepted Employees.--
       (1) In general.--In the case of an employee occupying a 
     position in the excepted service, any appointment authority 
     established under law or by regulations of the Office of 
     Personnel Management for filling such position shall be 
     transferred, subject to paragraph (2).
       (2) Decline of transfer.--The Director may decline a 
     transfer of authority under paragraph (1), to the extent that 
     such authority relates to a position excepted from the 
     competitive service because of its confidential, 
     policymaking, policy-determining, or policy-advocating 
     character.
       (d) Reorganization.--If the Director determines, after the 
     end of the 1-year period beginning on the effective date of 
     the abolishment under section 1311(a), that a reorganization 
     of the combined workforce is required, that reorganization 
     shall be deemed a major reorganization for purposes of 
     affording affected employee retirement under section 
     8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code.
       (e) Employee Benefit Programs.--
       (1) In general.--Any employee of the Board accepting 
     employment with the Agency as a result of a transfer under 
     subsection (a) may retain, for 12 months after the date on 
     which such transfer occurs, membership in any employee 
     benefit program of the Agency or the Board, as applicable, 
     including insurance, to which such employee belongs on the 
     effective date of the abolishment under section 1311(a) if--

[[Page 15998]]

       (A) the employee does not elect to give up the benefit or 
     membership in the program; and
       (B) the benefit or program is continued by the Director.
       (2) Cost differential.--
       (A) In general.--The difference in the costs between the 
     benefits which would have been provided by the Board and 
     those provided by this section shall be paid by the Director.
       (B) Health insurance.--If any employee elects to give up 
     membership in a health insurance program or the health 
     insurance program is not continued by the Director, the 
     employee shall be permitted to select an alternate Federal 
     health insurance program not later than 30 days after the 
     date of such election or notice, without regard to any other 
     regularly scheduled open season.

     SEC. 1314. TRANSFER OF PROPERTY AND FACILITIES.

       Upon the effective date of the abolishment under section 
     1311(a), all property of the Board shall transfer to the 
     Agency.

                     TITLE IV--HOPE FOR HOMEOWNERS

     SEC. 1401. SHORT TITLE.

       This title may be cited as the ``HOPE for Homeowners Act of 
     2008''.

     SEC. 1402. ESTABLISHMENT OF HOPE FOR HOMEOWNERS PROGRAM.

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

     ``SEC. 257. HOPE FOR HOMEOWNERS PROGRAM.

       ``(a) Establishment.--There is established in the Federal 
     Housing Administration a HOPE for Homeowners Program.
       ``(b) Purpose.--The purpose of the HOPE for Homeowners 
     Program is--
       ``(1) to create an FHA program, participation in which is 
     voluntary on the part of homeowners and existing loan holders 
     to insure refinanced loans for distressed borrowers to 
     support long-term, sustainable homeownership;
       ``(2) to allow homeowners to avoid foreclosure by reducing 
     the principle balance outstanding, and interest rate charged, 
     on their mortgages;
       ``(3) to help stabilize and provide confidence in mortgage 
     markets by bringing transparency to the value of assets based 
     on mortgage assets;
       ``(4) to target mortgage assistance under this section to 
     homeowners for their principal residence;
       ``(5) to enhance the administrative capacity of the FHA to 
     carry out its expanded role under the HOPE for Homeowners 
     Program;
       ``(6) to ensure the HOPE for Homeowners Program remains in 
     effect only for as long as is necessary to provide stability 
     to the housing market; and
       ``(7) to provide servicers of delinquent mortgages with 
     additional methods and approaches to avoid foreclosure.
       ``(c) Establishment and Implementation of Program 
     Requirements.--
       ``(1) Duties of the board.--In order to carry out the 
     purposes of the HOPE for Homeowners Program, the Board 
     shall--
       ``(A) establish requirements and standards for the program; 
     and
       ``(B) prescribe such regulations and provide such guidance 
     as may be necessary or appropriate to implement such 
     requirements and standards.
       ``(2) Duties of the secretary.--In carrying out any of the 
     program requirements or standards established under paragraph 
     (1), the Secretary may issue such interim guidance and 
     mortgagee letters as the Secretary determines necessary or 
     appropriate.
       ``(d) Insurance of Mortgages.--The Secretary is authorized 
     upon application of a mortgagee to make commitments to insure 
     or to insure any eligible mortgage that has been refinanced 
     in a manner meeting the requirements under subsection (e).
       ``(e) Requirements of Insured Mortgages.--To be eligible 
     for insurance under this section, a refinanced eligible 
     mortgage shall comply with all of the following requirements:
       ``(1) Lack of capacity to pay existing mortgage.--
       ``(A) Borrower certification.--
       ``(i) In general.--The mortgagor shall provide 
     certification to the Secretary that the mortgagor has not 
     intentionally defaulted on the mortgage or any other debt, 
     and has not knowingly, or willfully and with actual 
     knowledge, furnished material information known to be false 
     for the purpose of obtaining any eligible mortgage.
       ``(ii) Penalties.--

       ``(I) False statement.--Any certification filed pursuant to 
     clause (i) shall contain an acknowledgment that any willful 
     false statement made in such certification is punishable 
     under section 1001, of title 18, United States Code, by fine 
     or imprisonment of not more than 5 years, or both.
       ``(II) Liability for repayment.--The mortgagor shall agree 
     in writing that the mortgagor shall be liable to repay to the 
     Federal Housing Administration any direct financial benefit 
     achieved from the reduction of indebtedness on the existing 
     mortgage or mortgages on the residence refinanced under this 
     section derived from misrepresentations made in the 
     certifications and documentation required under this 
     subparagraph, subject to the discretion of the Secretary.

       ``(B) Current borrower debt-to-income ratio.--As of March 
     1, 2008, the mortgagor shall have had a ratio of mortgage 
     debt to income, taking into consideration all existing 
     mortgages of that mortgagor at such time, greater than 31 
     percent (or such higher amount as the Board determines 
     appropriate).
       ``(2) Determination of principal obligation amount.--The 
     principal obligation amount of the refinanced eligible 
     mortgage to be insured shall--
       ``(A) be determined by the reasonable ability of the 
     mortgagor to make his or her mortgage payments, as such 
     ability is determined by the Secretary pursuant to section 
     203(b)(4) or by any other underwriting standards established 
     by the Board; and
       ``(B) not exceed 90 percent of the appraised value of the 
     property to which such mortgage relates.
       ``(3) Required waiver of prepayment penalties and fees.--
     All penalties for prepayment or refinancing of the eligible 
     mortgage, and all fees and penalties related to default or 
     delinquency on the eligible mortgage, shall be waived or 
     forgiven.
       ``(4) Extinguishment of subordinate liens.--
       ``(A) Required agreement.--All holders of outstanding 
     mortgage liens on the property to which the eligible mortgage 
     relates shall agree to accept the proceeds of the insured 
     loan as payment in full of all indebtedness under the 
     eligible mortgage, and all encumbrances related to such 
     eligible mortgage shall be removed. The Secretary may take 
     such actions, subject to standards established by the Board 
     under subparagraph (B), as may be necessary and appropriate 
     to facilitate coordination and agreement between the holders 
     of the existing senior mortgage and any existing subordinate 
     mortgages, taking into consideration the subordinate lien 
     status of such subordinate mortgages.
       ``(B) Shared appreciation.--
       ``(i) In general.--The Board shall establish standards and 
     policies that will allow for the payment to the holder of any 
     existing subordinate mortgage of a portion of any future 
     appreciation in the property secured by such eligible 
     mortgage that is owed to the Secretary pursuant to subsection 
     (k).
       ``(ii) Factors.--In establishing the standards and policies 
     required under clause (i), the Board shall take into 
     consideration--

       ``(I) the status of any subordinate mortgage;
       ``(II) the outstanding principal balance of and accrued 
     interest on the existing senior mortgage and any outstanding 
     subordinate mortgages;
       ``(III) the extent to which the current appraised value of 
     the property securing a subordinate mortgage is less than the 
     outstanding principal balance and accrued interest on any 
     other liens that are senior to such subordinate mortgage; and
       ``(IV) such other factors as the Board determines to be 
     appropriate.

       ``(C) Voluntary program.--This paragraph may not be 
     construed to require any holder of any existing mortgage to 
     participate in the program under this section generally, or 
     with respect to any particular loan.
       ``(5) Term of mortgage.--The refinanced eligible mortgage 
     to be insured shall--
       ``(A) bear interest at a single rate that is fixed for the 
     entire term of the mortgage; and
       ``(B) have a maturity of not less than 30 years from the 
     date of the beginning of amortization of such refinanced 
     eligible mortgage.
       ``(6) Maximum loan amount.--The principal obligation amount 
     of the eligible mortgage to be insured shall not exceed 132 
     percent of 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 property of the 
     applicable size.
       ``(7) Prohibition on second liens.--A mortgagor may not 
     grant a new second lien on the mortgaged property during the 
     first 5 years of the term of the mortgage insured under this 
     section, except as the Board determines to be necessary to 
     ensure the maintenance of property standards; and provided 
     that such new outstanding liens (A) do not reduce the value 
     of the Government's equity in the borrower's home; and (B) 
     when combined with the mortgagor's existing mortgage 
     indebtedness, do not exceed 95 percent of the home's 
     appraised value at the time of the new second lien.
       ``(8) Appraisals.--Any appraisal conducted in connection 
     with a mortgage insured under this section shall--
       ``(A) be based on the current value of the property;
       ``(B) be conducted in accordance with title XI of the 
     Financial Institutions Reform, Recovery, and Enforcement Act 
     of 1989 (12 U.S.C. 3331 et seq.);
       ``(C) be completed by an appraiser who meets the competency 
     requirements of the Uniform Standards of Professional 
     Appraisal Practice;
       ``(D) be wholly consistent with the appraisal standards, 
     practices, and procedures under section 202(e) of this Act 
     that apply to all loans insured under this Act; and
       ``(E) comply with the requirements of subsection (g) of 
     this section (relating to appraisal independence).

[[Page 15999]]

       ``(9) Documentation and verification of income.--In 
     complying with the FHA underwriting requirements under the 
     HOPE for Homeowners Program under this section, the mortgagee 
     shall document and verify the income of the mortgagor or non-
     filing status by procuring (A) an income tax return 
     transcript of the income tax returns of the mortgagor, or(B) 
     a copy of the income tax returns from the Internal Revenue 
     Service, for the two most recent years for which the filing 
     deadline for such years has passed and by any other method, 
     in accordance with procedures and standards that the Board 
     shall establish.
       ``(10) Mortgage fraud.--The mortgagor shall not have been 
     convicted under Federal or State law for fraud during the 10-
     year period ending upon the insurance of the mortgage under 
     this section.
       ``(11) Primary residence.--The mortgagor shall provide 
     documentation satisfactory in the determination of the 
     Secretary to prove that the residence covered by the mortgage 
     to be insured under this section is occupied by the mortgagor 
     as the primary residence of the mortgagor, and that such 
     residence is the only residence in which the mortgagor has 
     any present ownership interest.
       ``(f) Study of Auction or Bulk Refinance Program.--
       ``(1) Study.--The Board shall conduct a study of the need 
     for and efficacy of an auction or bulk refinancing mechanism 
     to facilitate refinancing of existing residential mortgages 
     that are at risk for foreclosure into mortgages insured under 
     this section. The study shall identify and examine various 
     options for mechanisms under which lenders and servicers of 
     such mortgages may make bids for forward commitments for such 
     insurance in an expedited manner.
       ``(2) Content.--
       ``(A) Analysis.--The study required under paragraph (1) 
     shall analyze--
       ``(i) the feasibility of establishing a mechanism that 
     would facilitate the more rapid refinancing of borrowers at 
     risk of foreclosure into performing mortgages insured under 
     this section;
       ``(ii) whether such a mechanism would provide an effective 
     and efficient mechanism to reduce foreclosures on qualified 
     existing mortgages;
       ``(iii) whether the use of an auction or bulk refinance 
     program is necessary to stabilize the housing market and 
     reduce the impact of turmoil in that market on the economy of 
     the United States;
       ``(iv) whether there are other mechanisms or authority that 
     would be useful to reduce foreclosure; and
       ``(v) and any other factors that the Board considers 
     relevant.
       ``(B) Determinations.--To the extent that the Board finds 
     that a facility of the type described in subparagraph (A) is 
     feasible and useful, the study shall--
       ``(i) determine and identify any additional authority or 
     resources needed to establish and operate such a mechanism;
       ``(ii) determine whether there is a need for additional 
     authority with respect to the loan underwriting criteria 
     established in this section or with respect to eligibility of 
     participating borrowers, lenders, or holders of liens;
       ``(iii) determine whether such underwriting criteria should 
     be established on the basis of individual loans, in the 
     aggregate, or otherwise to facilitate the goal of refinancing 
     borrowers at risk of foreclosure into viable loans insured 
     under this section.
       ``(3) Report.--Not later than the expiration of the 60-day 
     period beginning on the date of the enactment of this 
     section, the Board shall submit a report regarding the 
     results of the study conducted under this subsection to the 
     Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate. The report shall include a 
     detailed description of the analysis required under paragraph 
     (2)(A) and of the determinations made pursuant to paragraph 
     (2)(B), and shall include any other findings and 
     recommendations of the Board pursuant to the study, including 
     identifying various options for mechanisms described in 
     paragraph (1).
       ``(g) Appraisal Independence.--
       ``(1) Prohibitions on interested parties in a real estate 
     transaction.--No mortgage lender, mortgage broker, mortgage 
     banker, real estate broker, appraisal management company, 
     employee of an appraisal management company, nor any other 
     person with an interest in a real estate transaction 
     involving an appraisal in connection with a mortgage insured 
     under this section shall improperly influence, or attempt to 
     improperly influence, through coercion, extortion, collusion, 
     compensation, instruction, inducement, intimidation, 
     nonpayment for services rendered, or bribery, the 
     development, reporting, result, or review of a real estate 
     appraisal sought in connection with the mortgage.
       ``(2) Civil monetary penalties.--The Secretary may impose a 
     civil money penalty for any knowing and material violation of 
     paragraph (1) under the same terms and conditions as are 
     authorized in section 536(a) of this Act.
       ``(h) Standards To Protect Against Adverse Selection.--
       ``(1) In general.--The Board shall, by rule or order, 
     establish standards and policies to require the underwriter 
     of the insured loan to provide such representations and 
     warranties as the Board considers necessary or appropriate to 
     enforce compliance with all underwriting and appraisal 
     standards of the HOPE for Homeowners Program.
       ``(2) Exclusion for violations.--The Board shall prohibit 
     the Secretary from paying insurance benefits to a mortgagee 
     who violates the representations and warranties, as 
     established under paragraph (1), or in any case in which a 
     mortgagor fails to make the first payment on a refinanced 
     eligible mortgage.
       ``(3) Other authority.--The Board may establish such other 
     standards or policies as necessary to protect against adverse 
     selection, including requiring loans identified by the 
     Secretary as higher risk loans to demonstrate payment 
     performance for a reasonable period of time prior to being 
     insured under the program.
       ``(i) Premiums.--For each refinanced eligible mortgage 
     insured under this section, the Secretary shall establish and 
     collect--
       ``(1) at the time of insurance, a single premium payment in 
     an amount equal to 3 percent of the amount of the original 
     insured principal obligation of the refinanced eligible 
     mortgage, which shall be paid from the proceeds of the 
     mortgage being insured under this section, through the 
     reduction of the amount of indebtedness that existed on the 
     eligible mortgage prior to refinancing; and
       ``(2) in addition to the premium required under paragraph 
     (1), an annual premium in an amount equal to 1.5 percent of 
     the amount of the remaining insured principal balance of the 
     mortgage.
       ``(j) Origination Fees and Interest Rate.--The Board shall 
     establish--
       ``(1) a reasonable limitation on origination fees for 
     refinanced eligible mortgages insured under this section; and
       ``(2) procedures to ensure that interest rates on such 
     mortgages shall be commensurate with market rate interest 
     rates on such types of loans.
       ``(k) Equity and Appreciation.--
       ``(1) Five-year phase-in for equity as a result of sale or 
     refinancing.--For each eligible mortgage insured under this 
     section, the Secretary and the mortgagor of such mortgage 
     shall, upon any sale or disposition of the property to which 
     such mortgage relates, or upon the subsequent refinancing of 
     such mortgage, be entitled to the following with respect to 
     any equity created as a direct result of such sale or 
     refinancing:
       ``(A) If such sale or refinancing occurs during the period 
     that begins on the date that such mortgage is insured and 
     ends 1 year after such date of insurance, the Secretary shall 
     be entitled to 100 percent of such equity.
       ``(B) If such sale or refinancing occurs during the period 
     that begins 1 year after such date of insurance and ends 2 
     years after such date of insurance, the Secretary shall be 
     entitled to 90 percent of such equity and the mortgagor shall 
     be entitled to 10 percent of such equity.
       ``(C) If such sale or refinancing occurs during the period 
     that begins 2 years after such date of insurance and ends 3 
     years after such date of insurance, the Secretary shall be 
     entitled to 80 percent of such equity and the mortgagor shall 
     be entitled to 20 percent of such equity.
       ``(D) If such sale or refinancing occurs during the period 
     that begins 3 years after such date of insurance and ends 4 
     years after such date of insurance, the Secretary shall be 
     entitled to 70 percent of such equity and the mortgagor shall 
     be entitled to 30 percent of such equity.
       ``(E) If such sale or refinancing occurs during the period 
     that begins 4 years after such date of insurance and ends 5 
     years after such date of insurance, the Secretary shall be 
     entitled to 60 percent of such equity and the mortgagor shall 
     be entitled to 40 percent of such equity.
       ``(F) If such sale or refinancing occurs during any period 
     that begins 5 years after such date of insurance, the 
     Secretary shall be entitled to 50 percent of such equity and 
     the mortgagor shall be entitled to 50 percent of such equity.
       ``(2) Appreciation in value.--For each eligible mortgage 
     insured under this section, the Secretary and the mortgagor 
     of such mortgage shall, upon any sale or disposition of the 
     property to which such mortgage relates, each be entitled to 
     50 percent of any appreciation in value of the appraised 
     value of such property that has occurred since the date that 
     such mortgage was insured under this section.
       ``(l) Establishment of HOPE Fund.--
       ``(1) In general.--There is established in the Federal 
     Housing Administration a revolving fund to be known as the 
     Home Ownership Preservation Entity Fund, which shall be used 
     by the Board for carrying out the mortgage insurance 
     obligations under this section.
       ``(2) Management of fund.--The HOPE Fund shall be 
     administered and managed by the Secretary, who shall 
     establish reasonable and prudent criteria for the management 
     and operation of any amounts in the HOPE Fund.
       ``(m) Limitation on Aggregate Insurance Authority.--The 
     aggregate original principal obligation of all mortgages 
     insured

[[Page 16000]]

     under this section may not exceed $300,000,000,000.
       ``(n) Reports by the Board.--The Board shall submit monthly 
     reports to the Congress identifying the progress of the HOPE 
     for Homeowners Program, which shall contain the following 
     information for each month:
       ``(1) The number of new mortgages insured under this 
     section, including the location of the properties subject to 
     such mortgages by census tract.
       ``(2) The aggregate principal obligation of new mortgages 
     insured under this section.
       ``(3) The average amount by which the principle balance 
     outstanding on mortgages insured this section was reduced.
       ``(4) The amount of premiums collected for insurance of 
     mortgages under this section.
       ``(5) The claim and loss rates for mortgages insured under 
     this section.
       ``(6) Any other information that the Board considers 
     appropriate.
       ``(o) Required Outreach Efforts.--The Secretary shall carry 
     out outreach efforts to ensure that homeowners, lenders, and 
     the general public are aware of the opportunities for 
     assistance available under this section.
       ``(p) Enhancement of FHA Capacity.--Under the direction of 
     the Board, the Secretary shall take such actions as may be 
     necessary to--
       ``(1) contract for the establishment of underwriting 
     criteria, automated underwriting systems, pricing standards, 
     and other factors relating to eligibility for mortgages 
     insured under this section;
       ``(2) contract for independent quality reviews of 
     underwriting, including appraisal reviews and fraud 
     detection, of mortgages insured under this section or pools 
     of such mortgages; and
       ``(3) increase personnel of the Department as necessary to 
     process or monitor the processing of mortgages insured under 
     this section.
       ``(q) GNMA Commitment Authority.--
       ``(1) Guarantees.--The Secretary shall take such actions as 
     may be necessary to ensure that securities based on and 
     backed by a trust or pool composed of mortgages insured under 
     this section are available to be guaranteed by the Government 
     National Mortgage Association as to the timely payment of 
     principal and interest.
       ``(2) Guarantee authority.--To carry out the purposes of 
     section 306 of the National Housing Act (12 U.S.C. 1721), the 
     Government National Mortgage Association may enter into new 
     commitments to issue guarantees of securities based on or 
     backed by mortgages insured under this section, not exceeding 
     $300,000,000,000. The amount of authority provided under the 
     preceding sentence to enter into new commitments to issue 
     guarantees is in addition to any amount of authority to make 
     new commitments to issue guarantees that is provided to the 
     Association under any other provision of law.
       ``(r) Sunset.--The Secretary may not enter into any new 
     commitment to insure any refinanced eligible mortgage, or 
     newly insure any refinanced eligible mortgage pursuant to 
     this section before October 1, 2008 or after September 30, 
     2011.
       ``(s) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Approved financial institution or mortgagee.--The 
     term `approved financial institution or mortgagee' means a 
     financial institution or mortgagee approved by the Secretary 
     under section 203 as responsible and able to service 
     mortgages responsibly.
       ``(2) Board.--The term `Board' means the Board of Directors 
     of the HOPE for Homeowners Program. The Board shall be 
     composed of the Secretary, the Secretary of the Treasury, the 
     Chairperson of the Board of Governors of the Federal Reserve 
     System, and the Chairperson of the Board of Directors of the 
     Federal Deposit Insurance Corporation, or their designees.
       ``(3) Eligible mortgage.--The term `eligible mortgage' 
     means a mortgage--
       ``(A) the mortgagor of which--
       ``(i) occupies such property as his or her principal 
     residence; and
       ``(ii) cannot, subject to subsection (e)(1)(B) and such 
     other standards established by the Board, afford his or her 
     mortgage payments; and
       ``(B) originated on or before January 1, 2008.
       ``(4) Existing senior mortgage.--The term `existing senior 
     mortgage' means, with respect to a mortgage insured under 
     this section, the existing mortgage that has superior 
     priority.
       ``(5) Existing subordinate mortgage.--The term `existing 
     subordinate mortgage' means, with respect to a mortgage 
     insured under this section, an existing mortgage that has 
     subordinate priority to the existing senior mortgage.
       ``(6) HOPE for homeowners program.--The term `HOPE for 
     Homeowners Program' means the program established under this 
     section.
       ``(7) Secretary.--The term `Secretary' means the Secretary 
     of Housing and Urban Development, except where specifically 
     provided otherwise.
       ``(t) Requirements Related to the Board.--
       ``(1) Compensation, actual, necessary, and transportation 
     expenses.--
       ``(A) Federal employees.--A member of the Board who is an 
     officer or employee of the Federal Government shall serve 
     without additional pay (or benefits in the nature of 
     compensation) for service as a member of the Board.
       ``(B) Travel expenses.--Members of the Board shall be 
     entitled to receive travel expenses, including per diem in 
     lieu of subsistence, equivalent to those set forth in 
     subchapter I of chapter 57 of title 5, United States Code.
       ``(2) Bylaws.--The Board may prescribe, amend, and repeal 
     such bylaws as may be necessary for carrying out the 
     functions of the Board.
       ``(3) Quorum.--A majority of the Board shall constitute a 
     quorum.
       ``(4) Staff; experts and consultants.--
       ``(A) Detail of government employees.--Upon request of the 
     Board, any Federal Government employee may be detailed to the 
     Board without reimbursement, and such detail shall be without 
     interruption or loss of civil service status or privilege.
       ``(B) Experts and consultants.--The Board shall procure the 
     services of experts and consultants as the Board considers 
     appropriate.
       ``(u) Rule of Construction Related to Voluntary Nature of 
     the Program.--This section shall not be construed to require 
     that any approved financial institution or mortgagee 
     participate in any activity authorized under this section, 
     including any activity related to the refinancing of an 
     eligible mortgage.
       ``(v) Rule of Construction Related to Insurance of 
     Mortgages.--Except as otherwise provided for in this section 
     or by action of the Board, the provisions and requirements of 
     section 203(b) shall apply with respect to the insurance of 
     any eligible mortgage under this section.
       ``(w) HOPE Bonds.--
       ``(1) Issuance and repayment of bonds.--Notwithstanding 
     section 504(b) of the Federal Credit Reform Act of 1990 (2 
     U.S.C. 661d(b)), the Secretary of the Treasury shall--
       ``(A) subject to such terms and conditions as the Secretary 
     of the Treasury deems necessary, issue Federal credit 
     instruments, to be known as `HOPE Bonds', that are callable 
     at the discretion of the Secretary of the Treasury and do 
     not, in the aggregate, exceed the amount specified in 
     subsection (m);
       ``(B) provide the subsidy amounts necessary for loan 
     guarantees under the HOPE for Homeowners Program, not to 
     exceed the amount specified in subsection (m), in accordance 
     with the provisions of the Federal Credit Reform Act of 1990 
     (2 U.S.C. 661 et seq.), except as provided in this paragraph; 
     and
       ``(C) use the proceeds from HOPE Bonds only to pay for the 
     net costs to the Federal Government of the HOPE for 
     Homeowners Program, including administrative costs.
       ``(2) Reimbursements to treasury.--Funds received pursuant 
     to section 1338(b) of the Federal Housing Enterprises 
     Regulatory Reform Act of 1992 shall be used to reimburse the 
     Secretary of the Treasury for amounts borrowed under 
     paragraph (1).
       ``(3) Use of reserve fund.--If the net cost to the Federal 
     Government for the HOPE for Homeowners Program exceeds the 
     amount of funds received under paragraph (2), remaining debts 
     of the HOPE for Homeowners Program shall be paid from amounts 
     deposited into the fund established by the Secretary under 
     section 1337(e) of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992, remaining amounts in such 
     fund to be used to reduce the National debt.
       ``(4) Reduction of national debt.--Amounts collected under 
     the HOPE for Homeowners Program in accordance with 
     subsections (i) and (k) in excess of the net cost to the 
     Federal Government for such Program shall be used to reduce 
     the National debt.''.

     SEC. 1403. FIDUCIARY DUTY OF SERVICERS OF POOLED RESIDENTIAL 
                   MORTGAGE LOANS.

       The Truth in Lending Act (15 U.S.C. 1601 et seq.) is 
     amended by inserting after section 129 the following new 
     section:

     ``SEC. 129A. FIDUCIARY DUTY OF SERVICERS OF POOLED 
                   RESIDENTIAL MORTGAGES.

       ``(a) In General.--Except as may be established in any 
     investment contract between a servicer of pooled residential 
     mortgages and an investor, a servicer of pooled residential 
     mortgages--
       ``(1) owes any duty to maximize the net present value of 
     the pooled mortgages in an investment to all investors and 
     parties having a direct or indirect interest in such 
     investment, not to any individual party or group of parties; 
     and
       ``(2) shall be deemed to act in the best interests of all 
     such investors and parties if the servicer agrees to or 
     implements a modification or workout plan, including any 
     modification or refinancing undertaken pursuant to the HOPE 
     for Homeowners Act of 2008, for a residential mortgage or a 
     class of residential mortgages that constitute a part or all 
     of the pooled mortgages in such investment, provided that any 
     mortgage so modified meets the following criteria:
       ``(A) Default on the payment of such mortgage has occurred 
     or is reasonably foreseeable.
       ``(B) The property securing such mortgage is occupied by 
     the mortgagor of such mortgage.

[[Page 16001]]

       ``(C) The anticipated recovery on the principal outstanding 
     obligation of the mortgage under the modification or workout 
     plan exceeds, on a net present value basis, the anticipated 
     recovery on the principal outstanding obligation of the 
     mortgage through foreclosure.
       ``(b) Definition.--As used in this section, the term 
     `servicer' means the person responsible for servicing of a 
     loan (including the person who makes or holds a loan if such 
     person also services the loan).''.

     SEC. 1404. REVISED STANDARDS FOR FHA APPRAISERS.

       Section 202(e) of the National Housing Act (12 U.S.C. 
     1708(e)) is amended by adding at the end the following:
       ``(5) Additional appraiser standards.--Beginning on the 
     date of enactment of the Federal Housing Finance Regulatory 
     Reform Act of 2008, any appraiser chosen or approved to 
     conduct appraisals for mortgages under this title shall--
       ``(A) be certified--
       ``(i) by the State in which the property to be appraised is 
     located; or
       ``(ii) by a nationally recognized professional appraisal 
     organization; and
       ``(B) have demonstrated verifiable education in the 
     appraisal requirements established by the Federal Housing 
     Administration under this subsection.''.

                TITLE V--S.A.F.E. MORTGAGE LICENSING ACT

     SEC. 1501. SHORT TITLE.

       This title may be cited as the ``Secure and Fair 
     Enforcement for Mortgage Licensing Act of 2008'' or 
     ``S.A.F.E. Mortgage Licensing Act of 2008''.

     SEC. 1502. PURPOSES AND METHODS FOR ESTABLISHING A MORTGAGE 
                   LICENSING SYSTEM AND REGISTRY.

       In order to increase uniformity, reduce regulatory burden, 
     enhance consumer protection, and reduce fraud, the States, 
     through the Conference of State Bank Supervisors and the 
     American Association of Residential Mortgage Regulators, are 
     hereby encouraged to establish a Nationwide Mortgage 
     Licensing System and Registry for the residential mortgage 
     industry that accomplishes all of the following objectives:
       (1) Provides uniform license applications and reporting 
     requirements for State-licensed loan originators.
       (2) Provides a comprehensive licensing and supervisory 
     database.
       (3) Aggregates and improves the flow of information to and 
     between regulators.
       (4) Provides increased accountability and tracking of loan 
     originators.
       (5) Streamlines the licensing process and reduces the 
     regulatory burden.
       (6) Enhances consumer protections and supports anti-fraud 
     measures.
       (7) Provides consumers with easily accessible information, 
     offered at no charge, utilizing electronic media, including 
     the Internet, regarding the employment history of, and 
     publicly adjudicated disciplinary and enforcement actions 
     against, loan originators.
       (8) Establishes a means by which residential mortgage loan 
     originators would, to the greatest extent possible, be 
     required to act in the best interests of the consumer.
       (9) Facilitates responsible behavior in the subprime 
     mortgage market place and provides comprehensive training and 
     examination requirements related to subprime mortgage 
     lending.
       (10) Facilitates the collection and disbursement of 
     consumer complaints on behalf of State and Federal mortgage 
     regulators.

     SEC. 1503. DEFINITIONS.

       For purposes of this title, the following definitions shall 
     apply:
       (1) Federal banking agencies.--The term ``Federal banking 
     agencies'' means the Board of Governors of the Federal 
     Reserve System, the Comptroller of the Currency, the Director 
     of the Office of Thrift Supervision, the National Credit 
     Union Administration, and the Federal Deposit Insurance 
     Corporation.
       (2) Depository institution.--The term ``depository 
     institution'' has the same meaning as in section 3 of the 
     Federal Deposit Insurance Act, and includes any credit union.
       (3) Loan originator.--
       (A) In general.--The term ``loan originator''--
       (i) means an individual who--

       (I) takes a residential mortgage loan application; and
       (II) offers or negotiates terms of a residential mortgage 
     loan for compensation or gain;

       (ii) does not include any individual who is not otherwise 
     described in clause (i) and who performs purely 
     administrative or clerical tasks on behalf of a person who is 
     described in any such clause;
       (iii) does not include a person or entity that only 
     performs real estate brokerage activities and is licensed or 
     registered in accordance with applicable State law, unless 
     the person or entity is compensated by a lender, a mortgage 
     broker, or other loan originator or by any agent of such 
     lender, mortgage broker, or other loan originator; and
       (iv) does not include a person or entity solely involved in 
     extensions of credit relating to timeshare plans, as that 
     term is defined in section 101(53D) of title 11, United 
     States Code.
       (B) Other definitions relating to loan originator.--For 
     purposes of this subsection, an individual ``assists a 
     consumer in obtaining or applying to obtain a residential 
     mortgage loan'' by, among other things, advising on loan 
     terms (including rates, fees, other costs), preparing loan 
     packages, or collecting information on behalf of the consumer 
     with regard to a residential mortgage loan.
       (C) Administrative or clerical tasks.--The term 
     ``administrative or clerical tasks'' means the receipt, 
     collection, and distribution of information common for the 
     processing or underwriting of a loan in the mortgage industry 
     and communication with a consumer to obtain information 
     necessary for the processing or underwriting of a residential 
     mortgage loan.
       (D) Real estate brokerage activity defined.--The term 
     ``real estate brokerage activity'' means any activity that 
     involves offering or providing real estate brokerage services 
     to the public, including--
       (i) acting as a real estate agent or real estate broker for 
     a buyer, seller, lessor, or lessee of real property;
       (ii) bringing together parties interested in the sale, 
     purchase, lease, rental, or exchange of real property;
       (iii) negotiating, on behalf of any party, any portion of a 
     contract relating to the sale, purchase, lease, rental, or 
     exchange of real property (other than in connection with 
     providing financing with respect to any such transaction);
       (iv) engaging in any activity for which a person engaged in 
     the activity is required to be registered or licensed as a 
     real estate agent or real estate broker under any applicable 
     law; and
       (v) offering to engage in any activity, or act in any 
     capacity, described in clause (i), (ii), (iii), or (iv).
       (4) Loan processor or underwriter.--
       (A) In general.--The term ``loan processor or underwriter'' 
     means an individual who performs clerical or support duties 
     at the direction of and subject to the supervision and 
     instruction of--
       (i) a State-licensed loan originator; or
       (ii) a registered loan originator.
       (B) Clerical or support duties.--For purposes of 
     subparagraph (A), the term ``clerical or support duties'' may 
     include--
       (i) the receipt, collection, distribution, and analysis of 
     information common for the processing or underwriting of a 
     residential mortgage loan; and
       (ii) communicating with a consumer to obtain the 
     information necessary for the processing or underwriting of a 
     loan, to the extent that such communication does not include 
     offering or negotiating loan rates or terms, or counseling 
     consumers about residential mortgage loan rates or terms.
       (5) Nationwide mortgage licensing system and registry.--The 
     term ``Nationwide Mortgage Licensing System and Registry'' 
     means a mortgage licensing system developed and maintained by 
     the Conference of State Bank Supervisors and the American 
     Association of Residential Mortgage Regulators for the State 
     licensing and registration of State-licensed loan originators 
     and the registration of registered loan originators or any 
     system established by the Secretary under section 1509.
       (6) Nontraditional mortgage product.--The term 
     ``nontraditional mortgage product'' means any mortgage 
     product other than a 30-year fixed rate mortgage.
       (7) Registered loan originator.--The term ``registered loan 
     originator'' means any individual who--
       (A) meets the definition of loan originator and is an 
     employee of--
       (i) a depository institution;
       (ii) a subsidiary that is--

       (I) owned and controlled by a depository institution; and
       (II) regulated by a Federal banking agency; or

       (iii) an institution regulated by the Farm Credit 
     Administration; and
       (B) is registered with, and maintains a unique identifier 
     through, the Nationwide Mortgage Licensing System and 
     Registry.
       (8) Residential mortgage loan.--The term ``residential 
     mortgage loan'' means any loan primarily for personal, 
     family, or household use that is secured by a mortgage, deed 
     of trust, or other equivalent consensual security interest on 
     a dwelling (as defined in section 103(v) of the Truth in 
     Lending Act) or residential real estate upon which is 
     constructed or intended to be constructed a dwelling (as so 
     defined).
       (9) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.
       (10) State.--The term ``State'' means any State of the 
     United States, the District of Columbia, any territory of the 
     United States, Puerto Rico, Guam, American Samoa, the Trust 
     Territory of the Pacific Islands, the Virgin Islands, and the 
     Northern Mariana Islands.
       (11) State-licensed loan originator.--The term ``State-
     licensed loan originator'' means any individual who--
       (A) is a loan originator;
       (B) is not an employee of--
       (i) a depository institution;
       (ii) a subsidiary that is--

       (I) owned and controlled by a depository institution; and
       (II) regulated by a Federal banking agency; or

[[Page 16002]]

       (iii) an institution regulated by the Farm Credit 
     Administration; and
       (C) is licensed by a State or by the Secretary under 
     section 1508 and registered as a loan originator with, and 
     maintains a unique identifier through, the Nationwide 
     Mortgage Licensing System and Registry.
       (12) Unique identifier.--
       (A) In general.--The term ``unique identifier'' means a 
     number or other identifier that--
       (i) permanently identifies a loan originator;
       (ii) is assigned by protocols established by the Nationwide 
     Mortgage Licensing System and Registry and the Federal 
     banking agencies to facilitate electronic tracking of loan 
     originators and uniform identification of, and public access 
     to, the employment history of and the publicly adjudicated 
     disciplinary and enforcement actions against loan 
     originators; and
       (iii) shall not be used for purposes other than those set 
     forth under this title.
       (B) Responsibility of states.--To the greatest extent 
     possible and to accomplish the purpose of this title, States 
     shall use unique identifiers in lieu of social security 
     numbers.

     SEC. 1504. LICENSE OR REGISTRATION REQUIRED.

       (a) In General.--Subject to the existence of a licensing or 
     registration regime, as the case may be, an individual may 
     not engage in the business of a loan originator without 
     first--
       (1) obtaining, and maintaining annually--
       (A) a registration as a registered loan originator; or
       (B) a license and registration as a State-licensed loan 
     originator; and
       (2) obtaining a unique identifier.
       (b) Loan Processors and Underwriters.--
       (1) Supervised loan processors and underwriters.--A loan 
     processor or underwriter who does not represent to the 
     public, through advertising or other means of communicating 
     or providing information (including the use of business 
     cards, stationery, brochures, signs, rate lists, or other 
     promotional items), that such individual can or will perform 
     any of the activities of a loan originator shall not be 
     required to be a State-licensed loan originator.
       (2) Independent contractors.--An independent contractor may 
     not engage in residential mortgage loan origination 
     activities as a loan processor or underwriter unless such 
     independent contractor is a State-licensed loan originator.

     SEC. 1505. STATE LICENSE AND REGISTRATION APPLICATION AND 
                   ISSUANCE.

       (a) Background Checks.--In connection with an application 
     to any State for licensing and registration as a State-
     licensed loan originator, the applicant shall, at a minimum, 
     furnish to the Nationwide Mortgage Licensing System and 
     Registry information concerning the applicant's identity, 
     including--
       (1) fingerprints for submission to the Federal Bureau of 
     Investigation, and any governmental agency or entity 
     authorized to receive such information for a State and 
     national criminal history background check; and
       (2) personal history and experience, including 
     authorization for the System to obtain--
       (A) an independent credit report obtained from a consumer 
     reporting agency described in section 603(p) of the Fair 
     Credit Reporting Act; and
       (B) information related to any administrative, civil or 
     criminal findings by any governmental jurisdiction.
       (b) Issuance of License.--The minimum standards for 
     licensing and registration as a State-licensed loan 
     originator shall include the following:
       (1) The applicant has never had a loan originator license 
     revoked in any governmental jurisdiction.
       (2) The applicant has not been convicted of, or pled guilty 
     or nolo contendere to, a felony in a domestic, foreign, or 
     military court--
       (A) during the 7-year period preceding the date of the 
     application for licensing and registration; or
       (B) at any time preceding such date of application, if such 
     felony involved an act of fraud, dishonesty, or a breach of 
     trust, or money laundering.
       (3) The applicant has demonstrated financial 
     responsibility, character, and general fitness such as to 
     command the confidence of the community and to warrant a 
     determination that the loan originator will operate honestly, 
     fairly, and efficiently within the purposes of this title.
       (4) The applicant has completed the pre-licensing education 
     requirement described in subsection (c).
       (5) The applicant has passed a written test that meets the 
     test requirement described in subsection (d).
       (6) The applicant has met either a net worth or surety bond 
     requirement, or paid into a State fund, as required by the 
     State pursuant to section 1508(d)(6).
       (c) Pre-Licensing Education of Loan Originators.--
       (1) Minimum educational requirements.--In order to meet the 
     pre-licensing education requirement referred to in subsection 
     (b)(4), a person shall complete at least 20 hours of 
     education approved in accordance with paragraph (2), which 
     shall include at least--
       (A) 3 hours of Federal law and regulations;
       (B) 3 hours of ethics, which shall include instruction on 
     fraud, consumer protection, and fair lending issues; and
       (C) 2 hours of training related to lending standards for 
     the nontraditional mortgage product marketplace.
       (2) Approved educational courses.--For purposes of 
     paragraph (1), pre-licensing education courses shall be 
     reviewed, and approved by the Nationwide Mortgage Licensing 
     System and Registry.
       (3) Limitation and standards.--
       (A) Limitation.--To maintain the independence of the 
     approval process, the Nationwide Mortgage Licensing System 
     and Registry shall not directly or indirectly offer pre-
     licensure educational courses for loan originators.
       (B) Standards.--In approving courses under this section, 
     the Nationwide Mortgage Licensing System and Registry shall 
     apply reasonable standards in the review and approval of 
     courses.
       (d) Testing of Loan Originators.--
       (1) In general.--In order to meet the written test 
     requirement referred to in subsection (b)(5), an individual 
     shall pass, in accordance with the standards established 
     under this subsection, a qualified written test developed by 
     the Nationwide Mortgage Licensing System and Registry and 
     administered by an approved test provider.
       (2) Qualified test.--A written test shall not be treated as 
     a qualified written test for purposes of paragraph (1) unless 
     the test adequately measures the applicant's knowledge and 
     comprehension in appropriate subject areas, including--
       (A) ethics;
       (B) Federal law and regulation pertaining to mortgage 
     origination;
       (C) State law and regulation pertaining to mortgage 
     origination;
       (D) Federal and State law and regulation, including 
     instruction on fraud, consumer protection, the nontraditional 
     mortgage marketplace, and fair lending issues.
       (3) Minimum competence.--
       (A) Passing score.--An individual shall not be considered 
     to have passed a qualified written test unless the individual 
     achieves a test score of not less than 75 percent correct 
     answers to questions.
       (B) Initial retests.--An individual may retake a test 3 
     consecutive times with each consecutive taking occurring at 
     least 30 days after the preceding test.
       (C) Subsequent retests.--After failing 3 consecutive tests, 
     an individual shall wait at least 6 months before taking the 
     test again.
       (D) Retest after lapse of license.--A State-licensed loan 
     originator who fails to maintain a valid license for a period 
     of 5 years or longer shall retake the test, not taking into 
     account any time during which such individual is a registered 
     loan originator.
       (e) Mortgage Call Reports.--Each mortgage licensee shall 
     submit to the Nationwide Mortgage Licensing System and 
     Registry reports of condition, which shall be in such form 
     and shall contain such information as the Nationwide Mortgage 
     Licensing System and Registry may require.

     SEC. 1506. STANDARDS FOR STATE LICENSE RENEWAL.

       (a) In General.--The minimum standards for license renewal 
     for State-licensed loan originators shall include the 
     following:
       (1) The loan originator continues to meet the minimum 
     standards for license issuance.
       (2) The loan originator has satisfied the annual continuing 
     education requirements described in subsection (b).
       (b) Continuing Education for State-Licensed Loan 
     Originators.--
       (1) In general.--In order to meet the annual continuing 
     education requirements referred to in subsection (a)(2), a 
     State-licensed loan originator shall complete at least 8 
     hours of education approved in accordance with paragraph (2), 
     which shall include at least--
       (A) 3 hours of Federal law and regulations;
       (B) 2 hours of ethics, which shall include instruction on 
     fraud, consumer protection, and fair lending issues; and
       (C) 2 hours of training related to lending standards for 
     the nontraditional mortgage product marketplace.
       (2) Approved educational courses.--For purposes of 
     paragraph (1), continuing education courses shall be 
     reviewed, and approved by the Nationwide Mortgage Licensing 
     System and Registry.
       (3) Calculation of continuing education credits.--A State-
     licensed loan originator--
       (A) may only receive credit for a continuing education 
     course in the year in which the course is taken; and
       (B) may not take the same approved course in the same or 
     successive years to meet the annual requirements for 
     continuing education.
       (4) Instructor credit.--A State-licensed loan originator 
     who is approved as an instructor of an approved continuing 
     education course may receive credit for the originator's own 
     annual continuing education requirement at the rate of 2 
     hours credit for every 1 hour taught.
       (5) Limitation and standards.--
       (A) Limitation.--To maintain the independence of the 
     approval process, the Nationwide Mortgage Licensing System 
     and

[[Page 16003]]

     Registry shall not directly or indirectly offer any 
     continuing education courses for loan originators.
       (B) Standards.--In approving courses under this section, 
     the Nationwide Mortgage Licensing System and Registry shall 
     apply reasonable standards in the review and approval of 
     courses.

     SEC. 1507. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL 
                   AGENCIES.

       (a) Development.--
       (1) In general.--The Federal banking agencies shall 
     jointly, through the Federal Financial Institutions 
     Examination Council, and together with the Farm Credit 
     Administration, develop and maintain a system for registering 
     employees of a depository institution, employees of a 
     subsidiary that is owned and controlled by a depository 
     institution and regulated by a Federal banking agency, or 
     employees of an institution regulated by the Farm Credit 
     Administration, as registered loan originators with the 
     Nationwide Mortgage Licensing System and Registry. The system 
     shall be implemented before the end of the 1-year period 
     beginning on the date of enactment of this title.
       (2) Registration requirements.--In connection with the 
     registration of any loan originator under this subsection, 
     the appropriate Federal banking agency and the Farm Credit 
     Administration shall, at a minimum, furnish or cause to be 
     furnished to the Nationwide Mortgage Licensing System and 
     Registry information concerning the employees's identity, 
     including--
       (A) fingerprints for submission to the Federal Bureau of 
     Investigation, and any governmental agency or entity 
     authorized to receive such information for a State and 
     national criminal history background check; and
       (B) personal history and experience, including 
     authorization for the Nationwide Mortgage Licensing System 
     and Registry to obtain information related to any 
     administrative, civil or criminal findings by any 
     governmental jurisdiction.
       (b) Coordination.--
       (1) Unique identifier.--The Federal banking agencies, 
     through the Financial Institutions Examination Council, and 
     the Farm Credit Administration shall coordinate with the 
     Nationwide Mortgage Licensing System and Registry to 
     establish protocols for assigning a unique identifier to each 
     registered loan originator that will facilitate electronic 
     tracking and uniform identification of, and public access to, 
     the employment history of and publicly adjudicated 
     disciplinary and enforcement actions against loan 
     originators.
       (2) Nationwide mortgage licensing system and registry 
     development.--To facilitate the transfer of information 
     required by subsection (a)(2), the Nationwide Mortgage 
     Licensing System and Registry shall coordinate with the 
     Federal banking agencies, through the Financial Institutions 
     Examination Council, and the Farm Credit Administration 
     concerning the development and operation, by such System and 
     Registry, of the registration functionality and data 
     requirements for loan originators.
       (c) Consideration of Factors and Procedures.--In 
     establishing the registration procedures under subsection (a) 
     and the protocols for assigning a unique identifier to a 
     registered loan originator, the Federal banking agencies 
     shall make such de minimis exceptions as may be appropriate 
     to paragraphs (1)(A) and (2) of section 1504(a), shall make 
     reasonable efforts to utilize existing information to 
     minimize the burden of registering loan originators, and 
     shall consider methods for automating the process to the 
     greatest extent practicable consistent with the purposes of 
     this title.

     SEC. 1508. SECRETARY OF HOUSING AND URBAN DEVELOPMENT BACKUP 
                   AUTHORITY TO ESTABLISH A LOAN ORIGINATOR 
                   LICENSING SYSTEM.

       (a) Backup Licensing System.--If, by the end of the 1-year 
     period, or the 2-year period in the case of a State whose 
     legislature meets only biennially, beginning on the date of 
     the enactment of this title or at any time thereafter, the 
     Secretary determines that a State does not have in place by 
     law or regulation a system for licensing and registering loan 
     originators that meets the requirements of sections 1505 and 
     1506 and subsection (d) of this section, or does not 
     participate in the Nationwide Mortgage Licensing System and 
     Registry, the Secretary shall provide for the establishment 
     and maintenance of a system for the licensing and 
     registration by the Secretary of loan originators operating 
     in such State as State-licensed loan originators.
       (b) Licensing and Registration Requirements.--The system 
     established by the Secretary under subsection (a) for any 
     State shall meet the requirements of sections 1505 and 1506 
     for State-licensed loan originators.
       (c) Unique Identifier.--The Secretary shall coordinate with 
     the Nationwide Mortgage Licensing System and Registry to 
     establish protocols for assigning a unique identifier to each 
     loan originator licensed by the Secretary as a State-licensed 
     loan originator that will facilitate electronic tracking and 
     uniform identification of, and public access to, the 
     employment history of and the publicly adjudicated 
     disciplinary and enforcement actions against loan 
     originators.
       (d) State Licensing Law Requirements.--For purposes of this 
     section, the law in effect in a State meets the requirements 
     of this subsection if the Secretary determines the law 
     satisfies the following minimum requirements:
       (1) A State loan originator supervisory authority is 
     maintained to provide effective supervision and enforcement 
     of such law, including the suspension, termination, or 
     nonrenewal of a license for a violation of State or Federal 
     law.
       (2) The State loan originator supervisory authority ensures 
     that all State-licensed loan originators operating in the 
     State are registered with Nationwide Mortgage Licensing 
     System and Registry.
       (3) The State loan originator supervisory authority is 
     required to regularly report violations of such law, as well 
     as enforcement actions and other relevant information, to the 
     Nationwide Mortgage Licensing System and Registry.
       (4) The State loan originator supervisory authority has a 
     process in place for challenging information contained in the 
     Nationwide Mortgage Licensing System and Registry.
       (5) The State loan originator supervisory authority has 
     established a mechanism to assess civil money penalties for 
     individuals acting as mortgage originators in their State 
     without a valid license or registration.
       (6) The State loan originator supervisory authority has 
     established minimum net worth or surety bonding requirements 
     that reflect the dollar amount of loans originated by a 
     residential mortgage loan originator, or has established a 
     recovery fund paid into by the loan originators.
       (e) Temporary Extension of Period.--The Secretary may 
     extend, by not more than 24 months, the 1-year or 2-year 
     period, as the case may be, referred to in subsection (a) for 
     the licensing of loan originators in any State under a State 
     licensing law that meets the requirements of sections 1505 
     and 1506 and subsection (d) if the Secretary determines that 
     such State is making a good faith effort to establish a State 
     licensing law that meets such requirements, license mortgage 
     originators under such law, and register such originators 
     with the Nationwide Mortgage Licensing System and Registry.

     SEC. 1509. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE 
                   MORTGAGE LICENSING AND REGISTRY SYSTEM.

       If at any time the Secretary determines that the Nationwide 
     Mortgage Licensing System and Registry is failing to meet the 
     requirements and purposes of this title for a comprehensive 
     licensing, supervisory, and tracking system for loan 
     originators, the Secretary shall establish and maintain such 
     a system to carry out the purposes of this title and the 
     effective registration and regulation of loan originators.

     SEC. 1510. FEES.

       The Federal banking agencies, the Farm Credit 
     Administration, the Secretary, and the Nationwide Mortgage 
     Licensing System and Registry may charge reasonable fees to 
     cover the costs of maintaining and providing access to 
     information from the Nationwide Mortgage Licensing System and 
     Registry, to the extent that such fees are not charged to 
     consumers for access to such system and registry.

     SEC. 1511. BACKGROUND CHECKS OF LOAN ORIGINATORS.

       (a) Access to Records.--Notwithstanding any other provision 
     of law, in providing identification and processing functions, 
     the Attorney General shall provide access to all criminal 
     history information to the appropriate State officials 
     responsible for regulating State-licensed loan originators to 
     the extent criminal history background checks are required 
     under the laws of the State for the licensing of such loan 
     originators.
       (b) Agent.--For the purposes of this section and in order 
     to reduce the points of contact which the Federal Bureau of 
     Investigation may have to maintain for purposes of subsection 
     (a), the Conference of State Bank Supervisors or a wholly 
     owned subsidiary may be used as a channeling agent of the 
     States for requesting and distributing information between 
     the Department of Justice and the appropriate State agencies.

     SEC. 1512. CONFIDENTIALITY OF INFORMATION.

       (a) System Confidentiality.--Except as otherwise provided 
     in this section, any requirement under Federal or State law 
     regarding the privacy or confidentiality of any information 
     or material provided to the Nationwide Mortgage Licensing 
     System and Registry or a system established by the Secretary 
     under section 1509, and any privilege arising under Federal 
     or State law (including the rules of any Federal or State 
     court) with respect to such information or material, shall 
     continue to apply to such information or material after the 
     information or material has been disclosed to the system. 
     Such information and material may be shared with all State 
     and Federal regulatory officials with mortgage industry 
     oversight authority without the loss of privilege or the loss 
     of confidentiality protections provided by Federal and State 
     laws.
       (b) Nonapplicability of Certain Requirements.--Information 
     or material that is subject to a privilege or confidentiality 
     under subsection (a) shall not be subject to--
       (1) disclosure under any Federal or State law governing the 
     disclosure to the public of information held by an officer or 
     an agency

[[Page 16004]]

     of the Federal Government or the respective State; or
       (2) subpoena or discovery, or admission into evidence, in 
     any private civil action or administrative process, unless 
     with respect to any privilege held by the Nationwide Mortgage 
     Licensing System and Registry or the Secretary with respect 
     to such information or material, the person to whom such 
     information or material pertains waives, in whole or in part, 
     in the discretion of such person, that privilege.
       (c) Coordination With Other Law.--Any State law, including 
     any State open record law, relating to the disclosure of 
     confidential supervisory information or any information or 
     material described in subsection (a) that is inconsistent 
     with subsection (a) shall be superseded by the requirements 
     of such provision to the extent State law provides less 
     confidentiality or a weaker privilege.
       (d) Public Access to Information.--This section shall not 
     apply with respect to the information or material relating to 
     the employment history of, and publicly adjudicated 
     disciplinary and enforcement actions against, loan 
     originators that is included in Nationwide Mortgage Licensing 
     System and Registry for access by the public.

     SEC. 1513. LIABILITY PROVISIONS.

       The Secretary, any State official or agency, any Federal 
     banking agency, or any organization serving as the 
     administrator of the Nationwide Mortgage Licensing System and 
     Registry or a system established by the Secretary under 
     section 1509, or any officer or employee of any such entity, 
     shall not be subject to any civil action or proceeding for 
     monetary damages by reason of the good faith action or 
     omission of any officer or employee of any such entity, while 
     acting within the scope of office or employment, relating to 
     the collection, furnishing, or dissemination of information 
     concerning persons who are loan originators or are applying 
     for licensing or registration as loan originators.

     SEC. 1514. ENFORCEMENT UNDER HUD BACKUP LICENSING SYSTEM.

       (a) Summons Authority.--The Secretary may--
       (1) examine any books, papers, records, or other data of 
     any loan originator operating in any State which is subject 
     to a licensing system established by the Secretary under 
     section 1508; and
       (2) summon any loan originator referred to in paragraph (1) 
     or any person having possession, custody, or care of the 
     reports and records relating to such loan originator, to 
     appear before the Secretary or any delegate of the Secretary 
     at a time and place named in the summons and to produce such 
     books, papers, records, or other data, and to give testimony, 
     under oath, as may be relevant or material to an 
     investigation of such loan originator for compliance with the 
     requirements of this title.
       (b) Examination Authority.--
       (1) In general.--If the Secretary establishes a licensing 
     system under section 1508 for any State, the Secretary shall 
     appoint examiners for the purposes of administering such 
     section.
       (2) Power to examine.--Any examiner appointed under 
     paragraph (1) shall have power, on behalf of the Secretary, 
     to make any examination of any loan originator operating in 
     any State which is subject to a licensing system established 
     by the Secretary under section 1508 whenever the Secretary 
     determines an examination of any loan originator is necessary 
     to determine the compliance by the originator with this 
     title.
       (3) Report of examination.--Each examiner appointed under 
     paragraph (1) shall make a full and detailed report of 
     examination of any loan originator examined to the Secretary.
       (4) Administration of oaths and affirmations; evidence.--In 
     connection with examinations of loan originators operating in 
     any State which is subject to a licensing system established 
     by the Secretary under section 1508, or with other types of 
     investigations to determine compliance with applicable law 
     and regulations, the Secretary and examiners appointed by the 
     Secretary may administer oaths and affirmations and examine 
     and take and preserve testimony under oath as to any matter 
     in respect to the affairs of any such loan originator.
       (5) Assessments.--The cost of conducting any examination of 
     any loan originator operating in any State which is subject 
     to a licensing system established by the Secretary under 
     section 1508 shall be assessed by the Secretary against the 
     loan originator to meet the Secretary's expenses in carrying 
     out such examination.
       (c) Cease and Desist Proceeding.--
       (1) Authority of secretary.--If the Secretary finds, after 
     notice and opportunity for hearing, that any person is 
     violating, has violated, or is about to violate any provision 
     of this title, or any regulation thereunder, with respect to 
     a State which is subject to a licensing system established by 
     the Secretary under section 1508, the Secretary may publish 
     such findings and enter an order requiring such person, and 
     any other person that is, was, or would be a cause of the 
     violation, due to an act or omission the person knew or 
     should have known would contribute to such violation, to 
     cease and desist from committing or causing such violation 
     and any future violation of the same provision, rule, or 
     regulation. Such order may, in addition to requiring a person 
     to cease and desist from committing or causing a violation, 
     require such person to comply, or to take steps to effect 
     compliance, with such provision or regulation, upon such 
     terms and conditions and within such time as the Secretary 
     may specify in such order. Any such order may, as the 
     Secretary deems appropriate, require future compliance or 
     steps to effect future compliance, either permanently or for 
     such period of time as the Secretary may specify, with such 
     provision or regulation with respect to any loan originator.
       (2) Hearing.--The notice instituting proceedings pursuant 
     to paragraph (1) shall fix a hearing date not earlier than 30 
     days nor later than 60 days after service of the notice 
     unless an earlier or a later date is set by the Secretary 
     with the consent of any respondent so served.
       (3) Temporary order.--Whenever the Secretary determines 
     that the alleged violation or threatened violation specified 
     in the notice instituting proceedings pursuant to paragraph 
     (1), or the continuation thereof, is likely to result in 
     significant dissipation or conversion of assets, significant 
     harm to consumers, or substantial harm to the public interest 
     prior to the completion of the proceedings, the Secretary may 
     enter a temporary order requiring the respondent to cease and 
     desist from the violation or threatened violation and to take 
     such action to prevent the violation or threatened violation 
     and to prevent dissipation or conversion of assets, 
     significant harm to consumers, or substantial harm to the 
     public interest as the Secretary deems appropriate pending 
     completion of such proceedings. Such an order shall be 
     entered only after notice and opportunity for a hearing, 
     unless the Secretary determines that notice and hearing prior 
     to entry would be impracticable or contrary to the public 
     interest. A temporary order shall become effective upon 
     service upon the respondent and, unless set aside, limited, 
     or suspended by the Secretary or a court of competent 
     jurisdiction, shall remain effective and enforceable pending 
     the completion of the proceedings.
       (4) Review of temporary orders.--
       (A) Review by secretary.--At any time after the respondent 
     has been served with a temporary cease and desist order 
     pursuant to paragraph (3), the respondent may apply to the 
     Secretary to have the order set aside, limited, or suspended. 
     If the respondent has been served with a temporary cease and 
     desist order entered without a prior hearing before the 
     Secretary, the respondent may, within 10 days after the date 
     on which the order was served, request a hearing on such 
     application and the Secretary shall hold a hearing and render 
     a decision on such application at the earliest possible time.
       (B) Judicial review.--Within--
       (i) 10 days after the date the respondent was served with a 
     temporary cease and desist order entered with a prior hearing 
     before the Secretary; or
       (ii) 10 days after the Secretary renders a decision on an 
     application and hearing under paragraph (1), with respect to 
     any temporary cease and desist order entered without a prior 
     hearing before the Secretary,

     the respondent may apply to the United States district court 
     for the district in which the respondent resides or has its 
     principal place of business, or for the District of Columbia, 
     for an order setting aside, limiting, or suspending the 
     effectiveness or enforcement of the order, and the court 
     shall have jurisdiction to enter such an order. A respondent 
     served with a temporary cease and desist order entered 
     without a prior hearing before the Secretary may not apply to 
     the court except after hearing and decision by the Secretary 
     on the respondent's application under subparagraph (A).
       (C) No automatic stay of temporary order.--The commencement 
     of proceedings under subparagraph (B) shall not, unless 
     specifically ordered by the court, operate as a stay of the 
     Secretary's order.
       (5) Authority of the secretary to prohibit persons from 
     serving as loan originators.--In any cease and desist 
     proceeding under paragraph (1), the Secretary may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as the Secretary shall 
     determine, any person who has violated this title or 
     regulations thereunder, from acting as a loan originator if 
     the conduct of that person demonstrates unfitness to serve as 
     a loan originator.
       (d) Authority of the Secretary To Assess Money Penalties.--
       (1) In general.--The Secretary may impose a civil penalty 
     on a loan originator operating in any State which is subject 
     to a licensing system established by the Secretary under 
     section 1508, if the Secretary finds, on the record after 
     notice and opportunity for hearing, that such loan originator 
     has violated or failed to comply with any requirement of this 
     title or any regulation prescribed by the Secretary under 
     this title or order issued under subsection (c).
       (2) Maximum amount of penalty.--The maximum amount of 
     penalty for each act or omission described in paragraph (1) 
     shall be $25,000.

     SEC. 1515. STATE EXAMINATION AUTHORITY.

       In addition to any authority allowed under State law a 
     State licensing agency shall

[[Page 16005]]

     have the authority to conduct investigations and examinations 
     as follows:
       (1) For the purposes of investigating violations or 
     complaints arising under this title, or for the purposes of 
     examination, the State licensing agency may review, 
     investigate, or examine any loan originator licensed or 
     required to be licensed under this title, as often as 
     necessary in order to carry out the purposes of this title.
       (2) Each such loan originator shall make available upon 
     request to the State licensing agency the books and records 
     relating to the operations of such originator. The State 
     licensing agency may have access to such books and records 
     and interview the officers, principals, loan originators, 
     employees, independent contractors, agents, and customers of 
     the licensee concerning their business.
       (3) The authority of this section shall remain in effect, 
     whether such a loan originator acts or claims to act under 
     any licensing or registration law of such State, or claims to 
     act without such authority.
       (4) No person subject to investigation or examination under 
     this section may knowingly withhold, abstract, remove, 
     mutilate, destroy, or secrete any books, records, computer 
     records, or other information.

     SEC. 1516. REPORTS AND RECOMMENDATIONS TO CONGRESS.

       (a) Annual Reports.--Not later than 1 year after the date 
     of enactment of this title, and annually thereafter, the 
     Secretary shall submit a report to Congress on the 
     effectiveness of the provisions of this title, including 
     legislative recommendations, if any, for strengthening 
     consumer protections, enhancing examination standards, 
     streamlining communication between all stakeholders involved 
     in residential mortgage loan origination and processing, and 
     establishing performance based bonding requirements for 
     mortgage originators or institutions that employ such 
     brokers.
       (b) Legislative Recommendations.--Not later than 6 months 
     after the date of enactment of this title, the Secretary 
     shall make recommendations to Congress on legislative reforms 
     to the Real Estate Settlement Procedures Act of 1974, that 
     the Secretary deems appropriate to promote more transparent 
     disclosures, allowing consumers to better shop and compare 
     mortgage loan terms and settlement costs.

     SEC. 1517. STUDY AND REPORTS ON DEFAULTS AND FORECLOSURES.

       (a) Study Required.--The Secretary shall conduct an 
     extensive study of the root causes of default and foreclosure 
     of home loans, using as much empirical data as is available.
       (b) Preliminary Report to Congress.--Not later than 6 
     months after the date of enactment of this title, the 
     Secretary shall submit to Congress a preliminary report 
     regarding the study required by this section.
       (c) Final Report to Congress.--Not later than 12 months 
     after the date of enactment of this title, the Secretary 
     shall submit to Congress a final report regarding the results 
     of the study required by this section, which shall include 
     any recommended legislation relating to the study, and 
     recommendations for best practices and for a process to 
     provide targeted assistance to populations with the highest 
     risk of potential default or foreclosure.

                        TITLE VI--MISCELLANEOUS

     SEC. 1601. STUDY AND REPORTS ON GUARANTEE FEES.

       (a) Ongoing Study of Fees.--The Director shall conduct an 
     ongoing study of fees charged by enterprises for guaranteeing 
     a mortgage.
       (b) Collection of Data.--The Director shall, by regulation 
     or order, establish procedures for the collection of data 
     from enterprises for purposes of this subsection, including 
     the format and the process for collection of such data.
       (c) Reports to Congress.--The Director shall annually 
     submit a report to Congress on the results of the study 
     conducted under subsection (a), based on the aggregated data 
     collected under subsection (a) for the subject year, 
     regarding the amount of such fees and the criteria used by 
     the enterprises to determine such fees.
       (d) Contents of Reports.--The reports required under 
     subsection (c) shall identify and analyze--
       (1) the factors considered in determining the amount of the 
     guarantee fees charged;
       (2) the total revenue earned by the enterprises from 
     guarantee fees;
       (3) the total costs incurred by the enterprises for 
     providing guarantees;
       (4) the average guarantee fee charged by the enterprises;
       (5) an analysis of any increase or decrease in guarantee 
     fees from the preceding year;
       (6) a breakdown of the revenue and costs associated with 
     providing guarantees, based on product type and risk 
     classifications; and
       (7) a breakdown of guarantee fees charged based on asset 
     size of the originator and the number of loans sold or 
     transferred to an enterprise.
       (e) Protection of Information.--Nothing in this section may 
     be construed to require or authorize the Director to publicly 
     disclose information that is confidential or proprietary.

     SEC. 1602. STUDY AND REPORT ON DEFAULT RISK EVALUATION.

       (a) Study.--The Director shall conduct a study of ways to 
     improve the overall default risk evaluation used with respect 
     to residential mortgage loans. Particular attention shall be 
     paid to the development and utilization of processes and 
     technologies that provide a means to standardize the 
     measurement of risk.
       (b) Report.--The Director shall submit a report on the 
     study conducted under this section to the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives, not later than 1 year after the date of 
     enactment of this Act.

     SEC. 1603. CONVERSION OF HUD CONTRACTS.

       (a) In General.--Notwithstanding any other provision of 
     law, the Secretary may, at the request of an owner of a 
     multifamily housing project that exceeds 5,000 units to which 
     a contract for project-based rental assistance under section 
     8 of the United States Housing Act of 1937 (``Act'') (42 
     U.S.C. 1437f) and a Rental Assistance Payment contract is 
     subject, convert such contracts to a contract for project-
     based rental assistance under section 8 of the Act.
       (b) Initial Renewal.--
       (1) At the request of an owner under subsection (a) made no 
     later than 90 days prior to a conversion, the Secretary may, 
     to the extent sufficient amounts are made available in 
     appropriation Acts and notwithstanding any other law, treat 
     the contemplated resulting contract as if such contract were 
     eligible for initial renewal under section 524(a) of the 
     MultiFamily Assisted Housing Reform and Affordability Act of 
     1997 (42 U.S.C. 1437f note) (``MAHRA'') (42 U.S.C. 1437f 
     note).
       (2) A request by an owner pursuant to paragraph (1) shall 
     be upon such terms and conditions as the Secretary may 
     require.
       (c) Resulting Contract.--The resulting contract shall--
       (1) be subject to section 524(a) of MAHRA (42 U.S.C. 1437f 
     note);
       (2) be considered for all purposes a contract that has been 
     renewed under section 524(a) of MAHRA (42 U.S.C. 1437f note) 
     for a term not to exceed 20 years;
       (3) be subsequently renewable at the request of an owner, 
     under any renewal option for which the project is eligible 
     under MAHRA (42 U.S.C. 1437f note);
       (4) contain provisions limiting distributions, as the 
     Secretary determines appropriate, not to exceed 10 percent of 
     the initial investment of the owner;
       (5) be subject to the availability of sufficient amounts in 
     appropriation Acts; and
       (6) be subject to such other terms and conditions as the 
     Secretary considers appropriate.
       (d) Income Targeting.--To the extent that assisted dwelling 
     units, subject to the resulting contract under subsection 
     (a), serve low-income families, as defined in section 3(b)(2) 
     of the Act (42 U.S.C. 1437a(b)(2)) the units shall be 
     considered to be in compliance with all income targeting 
     requirements under the Act (42 U.S.C. 1437 et seq).
       (e) Tenant Eligibility.--Notwithstanding any other 
     provision of law, each family residing in an assisted 
     dwelling unit on the date of conversion of a contract under 
     this section, subject to the resulting contract under 
     subsection (a), shall be considered to meet the applicable 
     requirements for income eligibility and occupancy.
       (f) Definitions.--As used in this section--
       (1) the term ``Secretary'' means the Secretary of Housing 
     and Urban Development;
       (2) the term ``conversion'' means the action under which a 
     contract for project-based rental assistance under section 8 
     of the Act and a Rental Assistance Payment contract become a 
     contract for project-based rental assistance under section 8 
     of the Act (42 U.S.C. 1437f) pursuant to subsection (a);
       (3) the term ``resulting contract'' means the new contract 
     after a conversion pursuant to subsection (a); and
       (4) the term ``assisted dwelling unit'' means a dwelling 
     unit in a multifamily housing project that exceeds 5,000 
     units that, on the date of conversion of a contract under 
     this section, is subject to a contract for project-based 
     rental assistance under section 8 of the Act (42 U.S.C. 
     1437f) or a Rental Assistance Payment contract.

     SEC. 1604. BRIDGE DEPOSITORY INSTITUTIONS.

       (a) In General.--Section 11 of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821) is amended--
       (1) in subsection (d)(2)--
       (A) in subparagraph (F), by striking ``as receiver'' and 
     all that follows through clause (ii) and inserting the 
     following: ``as receiver, with respect to any insured 
     depository institution, organize a new depository institution 
     under subsection (m) or a bridge depository institution under 
     subsection (n).'';
       (B) in subparagraph (G), by striking ``new bank or a bridge 
     bank'' and inserting ``new depository institution or a bridge 
     depository institution'';
       (2) in the heading for subsection (e)(10)(C), by striking 
     ``Bridge Banks'' and inserting ``Bridge Depository 
     Institutions'';
       (3) in subsection (e)(10)(C)(i), by striking ``bridge 
     bank'' and inserting ``bridge depository institution'';
       (4) in subsection (m)--
       (A) in the subsection heading, by striking ``Banks'' and 
     inserting ``Depository Institutions'';
       (B) by striking ``insured bank'' each place such term 
     appears and inserting ``insured depository institution'';

[[Page 16006]]

       (C) by striking ``new bank'' each place such term appears 
     and inserting ``new depository institution'';
       (D) by striking ``such bank'' each place such term appears 
     and inserting ``such depository institution'';
       (E) by striking ``the bank'' each place such term appears 
     and inserting ``the insured depository institution'';
       (F) in paragraph (1), by inserting ``or Federal savings 
     association'' after ``national bank'';
       (G) in paragraph (6), by striking ``only bank'' and 
     inserting ``only depository institution'';
       (H) in paragraph (9), by inserting ``or the Director of the 
     Office of Thrift Supervision, as appropriate'' after 
     ``Comptroller of the Currency'';
       (I) in paragraph (15), by striking ``, but in no event'' 
     and all that follows through ``located'';
       (J) in paragraph (16)--
       (i) by inserting ``or the Director of the Office of Thrift 
     Supervision, as appropriate,'' after ``Comptroller of the 
     Currency'' each place such term appears;
       (ii) by striking ``the bank'' each place such term appears 
     and inserting ``the depository institution'';
       (iii) by inserting ``or Federal savings association'' after 
     ``national bank'' each place such term appears;
       (iv) by inserting ``or Federal savings associations'' after 
     ``national banks''; and
       (v) by striking ``Such bank'' and inserting ``Such 
     depository institution''; and
       (K) in paragraph (18), by inserting ``or the Director of 
     the Office of Thrift Supervision, as appropriate,'' after 
     ``Comptroller of the Currency'' each place such term appears;
       (5) in subsection (n)--
       (A) in the subsection heading, by striking ``Banks'' and 
     inserting ``Depository Institutions'';
       (B) by striking ``bridge bank'' each place such term 
     appears and inserting ``bridge depository institution'';
       (C) by striking ``bridge banks'' each place such term 
     appears (other than in paragraph (1)(A))and inserting 
     ``bridge depository institutions'';
       (D) by striking ``bridge bank's'' each place such term 
     appears and inserting ``bridge depository institution's'';
       (E) by striking ``insured bank'' each place such term 
     appears and inserting ``insured depository institution'';
       (F) by striking ``insured banks'' each place such term 
     appears and inserting ``insured depository institutions'';
       (G) by striking ``such bank'' each place such term appears 
     (other than in paragraph (4)(J)) and inserting ``such 
     depository institution'';
       (H) by striking ``the bank'' each place such term appears 
     and inserting ``the depository institution'';
       (I) by striking ``bank or banks'' each place such term 
     appears and inserting ``depository institution or 
     institutions'';
       (J) in paragraph (1)(A)--
       (i) by inserting ``, with respect to 1 or more insured 
     banks, or the Director of the Office of Thrift Supervision, 
     with respect to 1 or more insured savings associations,'' 
     after ``Comptroller of the Currency'';
       (ii) by inserting ``or Federal savings associations, as 
     appropriate,'' after ``national banks'';
       (iii) by inserting ``or Federal savings associations, as 
     applicable,'' after ``banking associations''; and
       (iv) by striking ``as bridge banks'' and inserting ``as 
     `bridge depository institutions' '';
       (K) in paragraph (1)(B)--
       (i) by striking ``of a bank''; and
       (ii) by striking ``of that bank'';
       (L) in the heading for paragraph (1)(E), by inserting ``or 
     federal savings association'' before the period;
       (M) in paragraph (1)(E), by inserting before the period ``, 
     in the case of 1 or more insured banks, and as a Federal 
     savings association, in the case of 1 or more insured savings 
     associations'';
       (N) in paragraph (2)--
       (i) by inserting ``or Federal savings association'' after 
     ``national bank'' each place such term appears;
       (ii) in subparagraph (A), by inserting ``or the Director of 
     the Office of Thrift Supervision'' after ``Comptroller of the 
     Currency''; and
       (iii) in the heading for subparagraph (B), by inserting 
     ``or federal savings association'' before the period;
       (O) in paragraph (4)--
       (i) in the matter preceding subparagraph (A), by inserting 
     ``or Federal savings association, as appropriate'' after 
     ``national bank'';
       (ii) in subparagraph (C), by striking ``under section 5138 
     of the Revised Statutes or any other'' and inserting ``under 
     any'';
       (iii) by inserting ``and the Director of the Office of 
     Thrift Supervision, as appropriate,'' after ``Comptroller of 
     the Currency'' each place such term appears;
       (iv) in subparagraph (D), by striking ``bank's'' and 
     inserting ``depository institution's''; and
       (v) in subparagraph (H), by striking ``a bank in default'' 
     and inserting ``a depository institution in default'';
       (P) in paragraph (8)--
       (i) in subparagraph (A), by striking ``the banks'' and 
     inserting ``the depository institutions'';
       (ii) in subparagraph (B), by striking ``bank's'' and 
     inserting ``depository institution's'';
       (Q) by striking ``bridge bank'' or ``bridge banks'' as the 
     case may be in the headings for paragraphs (9), (10), (12), 
     and (13) and inserting ``bridge depository institution'' or 
     ``bridge depository institutions'' as appropriate;
       (R) in paragraph (11), by inserting ``or a Federal savings 
     association, as the case may be,'' after ``national bank'' 
     each place such term appears;
       (S) in paragraph (12)--
       (i) by inserting ``or the Director of the Office of Thrift 
     Supervision, as appropriate,'' after ``Comptroller of the 
     Currency'' each place such term appears; and
       (ii) by inserting ``or Federal savings associations, as 
     appropriate'' after ``national banks''; and
       (T) in paragraph (13), by striking ``single bank'' and 
     inserting ``single depository institution''.
       (b) Other Conforming Amendments.--
       (1) Federal deposit insurance act.--The Federal Deposit 
     Insurance Act (12 U.S.C. 1811 et seq.) is amended--
       (A) in section 3 (12 U.S.C. 1813), by striking subsection 
     (i) and inserting the following:
       ``(i) New Depository Institution and Bridge Depository 
     Institution Defined.--
       ``(1) New depository institution.--The term `new depository 
     institution' means a new national bank or Federal savings 
     association, other than a bridge depository institution, 
     organized by the Corporation in accordance with section 
     11(m).
       ``(2) Bridge depository institution.--The term `bridge 
     depository institution' means a new national bank or Federal 
     savings association organized by the Corporation in 
     accordance with section 11(n).'';
       (B) in section 10(d)(5)(B) (12 U.S.C. 1820(d)(5)(B)), by 
     striking ``bridge bank'' and inserting ``bridge depository 
     institution'';
       (C) in section 12 (12 U.S.C. 1822), by striking ``new 
     bank'' each place such term appears and inserting ``new 
     depository institution'';and
       (D) in section 38(j)(2) (12 U.S.C. 1831o(j)(2)), by 
     striking ``bridge bank'' and inserting ``bridge depository 
     institution''.
       (2) Federal credit union act.--Section 207(c)(10)(C)(i) of 
     the Federal Credit Union Act (12 U.S.C. 1787(c)(10)(C)(i)) is 
     amended by striking ``bridge bank'' and inserting ``bridge 
     depository institution''.
       (3) Title 11, united states code.--Section 783 of title 11, 
     United States Code, is amended by striking ``bridge bank'' 
     and inserting ``bridge depository institution''.
       (4) Title 26, united states code.--Section 414(l)(2)(G) of 
     the Internal Revenue Code of 1986, is amended by striking 
     ``bridge bank'' and inserting ``bridge depository 
     institution''.
       (c) Repeal of Deposit Limitation.--Section 11(n)(1)(B)(i) 
     of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(n)(1)(B)(i)) is amended by striking ``, except that'' 
     and all that follows through ``another insured depository 
     institution''.
       (d) Federal Reserve Bank Lending to Bridge Depository 
     Institutions.--Section 11(n)(5) of the Federal Deposit 
     Insurance Act (12 U.S.C. 1821(n)(5)) is amended by adding at 
     the end the following new subparagraph:
       ``(D) Capital levels.--A bridge depository institution 
     shall not be considered an undercapitalized depository 
     institution or a critically undercapitalized depository 
     institution for purposes of section 10B(b) of the Federal 
     Reserve Act.''.

     SEC. 1605. SENSE OF THE SENATE.

       It is the sense of the Senate that in implementing or 
     carrying out any provision of this Act, or any amendment made 
     by this Act, the Senate supports a policy of noninterference 
     regarding local government requirements that the holder of a 
     foreclosed property maintain that property.

                   DIVISION B--FORECLOSURE PREVENTION

     SECTION 2001. SHORT TITLE.

       This division may be cited as the ``Foreclosure Prevention 
     Act of 2008''.

     SEC. 2002. EMERGENCY DESIGNATION.

       For purposes of Senate enforcement, all provisions of this 
     division are designated as emergency requirements and 
     necessary to meet emergency needs pursuant to section 204 of 
     S. Con. Res. 21 (110th Congress), the concurrent resolution 
     on the budget for fiscal year 2008.

                 TITLE I--FHA MODERNIZATION ACT OF 2008

     SEC. 2101. SHORT TITLE.

       This title may be cited as the ``FHA Modernization Act of 
     2008''.

              Subtitle A--Building American Homeownership

     SEC. 2111. SHORT TITLE.

       This subtitle may be cited as the ``Building American 
     Homeownership Act of 2008''.

     SEC. 2112. MAXIMUM PRINCIPAL LOAN OBLIGATION.

       (a) In General.--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:
       ``(A) not to exceed the lesser of--
       ``(i) in the case of a 1-family residence, 115 percent of 
     the median 1-family house price in

[[Page 16007]]

     the area, as determined by the Secretary; and in the case of 
     a 2-, 3-, or 4-family residence, the percentage of such 
     median price that bears the same ratio to such median price 
     as the dollar amount limitation determined under the sixth 
     sentence of section 305(a)(2) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for a 
     2-, 3-, or 4-family residence, respectively, bears to the 
     dollar amount limitation determined under such section for a 
     1-family residence; or
       ``(ii) 150 percent of the dollar amount limitation 
     determined under the sixth sentence of such section 305(a)(2) 
     for a residence of applicable size;

     except that the dollar amount limitation in effect under this 
     subparagraph for any size residence for any area may not be 
     less than the greater of: (I) the dollar amount limitation in 
     effect under this section for the area on October 21, 1998; 
     or (II) 65 percent of the dollar amount limitation determined 
     under the sixth sentence of such section 305(a)(2) for a 
     residence of the applicable size; and
       ``(B) not to exceed 100 percent of the appraised value of 
     the property.''; and
       (2) in the matter following subparagraph (B), by striking 
     the second sentence (relating to a definition of ``average 
     closing cost'') and all that follows through ``section 
     3103A(d) of title 38, United States Code.''.
       (b) Treatment of Up-Front Premiums.--Section 203(d) of the 
     National Housing Act (12 U.S.C. 1709(d)) is amended--
       (1) by striking ``Notwithstanding any'' and inserting the 
     following: ``Except as provided in paragraph (2) of this 
     subsection, notwithstanding'';
       (2) by inserting ``(1)'' after ``(d)''; and
       (3) by adding at the end the following new paragraph:
       ``(2) The maximum amount of a mortgage determined under 
     subsection (b)(2)(B) of this section may not be increased as 
     provided in paragraph (1).''.
       (c) Effective Date.-- The amendments made by subsection (a) 
     shall take effect upon the expiration of the date described 
     in section 202(a) of the Economic Stimulus Act of 2008 
     (Public Law 110-185; 122 Stat. 620).

     SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF 
                   SELLER-FUNDED DOWN PAYMENT ASSISTANCE.

       Paragraph (9) of section 203(b) of the National Housing Act 
     (12 U.S.C. 1709(b)(9)) is amended to read as follows:
       ``(9) Cash investment requirement.--
       ``(A) In general.--A mortgage insured under this section 
     shall be executed by a mortgagor who shall have paid, in cash 
     or its equivalent, on account of the property an amount equal 
     to not less than 3.5 percent of the appraised value of the 
     property or such larger amount as the Secretary may 
     determine.
       ``(B) Family members.--For purposes of this paragraph, the 
     Secretary shall consider as cash or its equivalent any 
     amounts borrowed from a family member (as such term is 
     defined in section 201), subject only to the requirements 
     that, in any case in which the repayment of such borrowed 
     amounts is secured by a lien against the property, that--
       ``(i) such lien shall be subordinate to the mortgage; and
       ``(ii) the sum of the principal obligation of the mortgage 
     and the obligation secured by such lien may not exceed 100 
     percent of the appraised value of the property plus any 
     initial service charges, appraisal, inspection, and other 
     fees in connection with the mortgage.
       ``(C) Prohibited sources.--In no case shall the funds 
     required by subparagraph (A) consist, in whole or in part, of 
     funds provided by any of the following parties before, 
     during, or after closing of the property sale:
       ``(i) The seller or any other person or entity that 
     financially benefits from the transaction.
       ``(ii) Any third party or entity that is reimbursed, 
     directly or indirectly, by any of the parties described in 
     clause (i).
     This subparagraph shall apply only to mortgages for which the 
     mortgagee has issued credit approval for the borrower on or 
     after October 1, 2008.''.

     SEC. 2114. MORTGAGE INSURANCE PREMIUMS.

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

     SEC. 2115. 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. 2116. 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. 2117. INSURANCE OF CONDOMINIUMS.

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

     SEC. 2118. MUTUAL MORTGAGE INSURANCE FUND.

       (a) In General.--Subsection (a) of section 202 of the 
     National Housing Act (12 U.S.C. 1708(a)) is amended to read 
     as follows:
       ``(a) Mutual Mortgage Insurance Fund.--
       ``(1) Establishment.--Subject to the provisions of the 
     Federal Credit Reform Act of 1990, there is hereby created a 
     Mutual Mortgage Insurance Fund (in this title referred to as 
     the `Fund'), which shall be used by the Secretary to carry 
     out the provisions of this title with respect to mortgages 
     insured under section 203. The Secretary may enter into 
     commitments to guarantee, and may guarantee, such insured 
     mortgages.
       ``(2) Limit on loan guarantees.--The authority of the 
     Secretary to enter into commitments to guarantee such insured 
     mortgages shall be effective for any fiscal year only to the 
     extent that the aggregate original principal loan amount 
     under such mortgages, any part of which is guaranteed, does 
     not exceed the amount specified in appropriations Acts for 
     such fiscal year.
       ``(3) Fiduciary responsibility.--The Secretary has a 
     responsibility to ensure that the Mutual Mortgage Insurance 
     Fund remains financially sound.
       ``(4) Annual independent actuarial study.--The Secretary 
     shall provide for an independent actuarial study of the Fund 
     to be conducted annually, which shall analyze the financial 
     position of the Fund. The Secretary shall submit a report 
     annually to the Congress describing the results of such study 
     and assessing the financial status of the Fund. The report 
     shall recommend adjustments to underwriting standards, 
     program participation, or premiums, if necessary, to ensure 
     that the Fund remains financially sound. The report shall 
     also include an evaluation of the quality control procedures 
     and accuracy of information utilized in the process of 
     underwriting loans guaranteed by the Fund. Such evaluation 
     shall include a review of the risk characteristics of loans 
     based not only on borrower information and performance, but 
     on risks associated with loans originated or funded by 
     various entities or financial institutions.
       ``(5) Quarterly reports.--During each fiscal year, the 
     Secretary shall submit a report to the Congress for each 
     calendar quarter, which shall specify for mortgages that are 
     obligations of the Fund--
       ``(A) the cumulative volume of loan guarantee commitments 
     that have been made during such fiscal year through the end 
     of the quarter for which the report is submitted;
       ``(B) the types of loans insured, categorized by risk;

[[Page 16008]]

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

     SEC. 2119. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.

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

     SEC. 2120. 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. 2121. INSURANCE OF MORTGAGES.

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

     SEC. 2122. HOME EQUITY CONVERSION MORTGAGES.

       (a) In General.--Section 255 of the National Housing Act 
     (12 U.S.C. 1715z-20) is amended--
       (1) in subsection (b)(2), insert `` `real estate,' '' after 
     `` `mortgagor','';
       (2) by amending subsection (d)(1) to read as follows:
       ``(1) have been originated by a mortgagee approved by the 
     Secretary;'';
       (3) by amending subsection (d)(2)(B) to read as follows:
       ``(B) has received adequate counseling, as provided in 
     subsection (f), by an independent third party that is not, 
     either directly or indirectly, associated with or compensated 
     by a party involved in--
       ``(i) originating or servicing the mortgage;
       ``(ii) funding the loan underlying the mortgage; or
       ``(iii) the sale of annuities, investments, long-term care 
     insurance, or any other type of financial or insurance 
     product;'';
       (4) in subsection (f)--
       (A) by striking ``(f) Information Services for 
     Mortgagors.--'' and inserting ``(f) Counseling Services and 
     Information for Mortgagors.--''; and
       (B) by amending the matter preceding paragraph (1) to read 
     as follows: ``The Secretary shall provide or cause to be 
     provided adequate counseling for the mortgagor, as described 
     in subsection (d)(2)(B). Such counseling shall be provided by 
     counselors that meet qualification standards and follow 
     uniform counseling protocols. The qualification standards and 
     counseling protocols shall be established by the Secretary 
     within 12 months of the date of enactment of the Building 
     American Homeownership Act of 2008. The protocols shall 
     require a qualified counselor to discuss with each mortgagor 
     information which shall include--''
       (5) in subsection (g), by striking ``established under 
     section 203(b)(2)'' and all that follows through ``located'' 
     and inserting ``limitation established under section 
     305(a)(2) of the Federal Home Loan Mortgage Corporation Act 
     for a 1-family residence'';
       (6) by striking subsection (l);
       (7) by redesignating subsection (m) as subsection (l);
       (8) by amending subsection (l), as so redesignated, to read 
     as follows:
       ``(l) Funding for Counseling.--The Secretary may use a 
     portion of the mortgage insurance premiums collected under 
     the program under this section to adequately fund the 
     counseling and disclosure activities required under 
     subsection (f), including counseling for those homeowners who 
     elect not to take out a home equity conversion mortgage, 
     provided that the use of such funds is based upon accepted 
     actuarial principles.''; and
       (9) by adding at the end the following new subsection:
       ``(m) Authority To Insure Home Purchase Mortgage.--
       ``(1) In general.--Notwithstanding any other provision of 
     this section, the Secretary may insure, upon application by a 
     mortgagee, a home equity conversion mortgage upon such terms 
     and conditions as the Secretary may prescribe, when the home 
     equity conversion mortgage will be used to purchase a 1- to 
     4-family dwelling unit, one unit of which the mortgagor will 
     occupy as a primary residence, and to provide for any future 
     payments to the mortgagor, based on available equity, as 
     authorized under subsection (d)(9).
       ``(2) Limitation on principal obligation.--A home equity 
     conversion mortgage insured pursuant to paragraph (1) shall 
     involve a principal obligation that does not exceed the 
     dollar amount limitation determined under section 305(a)(2) 
     of the Federal Home Loan Mortgage Corporation Act for a 1-
     family residence.
       ``(n) Requirements on Mortgage Originators.--
       ``(1) In general.--The mortgagee and any other party that 
     participates in the origination of a mortgage to be insured 
     under this section shall--
       ``(A) not participate in, be associated with, or employ any 
     party that participates in or is associated with any other 
     financial or insurance activity; or
       ``(B) demonstrate to the Secretary that the mortgagee or 
     other party maintains, or will maintain, firewalls and other 
     safeguards designed to ensure that--
       ``(i) individuals participating in the origination of the 
     mortgage shall have no involvement with, or incentive to 
     provide the mortgagor with, any other financial or insurance 
     product; and
       ``(ii) the mortgagor shall not be required, directly or 
     indirectly, as a condition of obtaining a mortgage under this 
     section, to purchase any other financial or insurance 
     product.
       ``(2) Approval of other parties.--All parties that 
     participate in the origination of a mortgage to be insured 
     under this section shall be approved by the Secretary.
       ``(o) Prohibition Against Requirements To Purchase 
     Additional Products.--The mortgagor or any other party shall 
     not be required by the mortgagee or any other party to 
     purchase an insurance, annuity, or other similar product as a 
     requirement or condition of eligibility for insurance under 
     subsection (c), except for title insurance, hazard, flood, or 
     other peril insurance, or other

[[Page 16009]]

     such products that are customary and normal under subsection 
     (c), as determined by the Secretary.
       ``(p) Study to Determine Consumer Protections and 
     Underwriting Standards.--The Secretary shall conduct a study 
     to examine and determine appropriate consumer protections and 
     underwriting standards to ensure that the purchase of 
     products referred to in subsection (o) is appropriate for the 
     consumer. In conducting such study, the Secretary shall 
     consult with consumer advocates (including recognized experts 
     in consumer protection), industry representatives, 
     representatives of counseling organizations, and other 
     interested parties.''.
       (b) Mortgages for Cooperatives.--Subsection (b) of section 
     255 of the National Housing Act (12 U.S.C. 1715z-20(b)) is 
     amended--
       (1) in paragraph (4)--
       (A) by inserting ``a first or subordinate mortgage or 
     lien'' before ``on all stock'';
       (B) by inserting ``unit'' after ``dwelling''; and
       (C) by inserting ``a first mortgage or first lien'' before 
     ``on a leasehold''; and
       (2) in paragraph (5), by inserting ``a first or subordinate 
     lien on'' before ``all stock''.
       (c) Limitation on Origination Fees.--Section 255 of the 
     National Housing Act (12 U.S.C. 1715z-20), as amended by the 
     preceding provisions of this section, is further amended by 
     adding at the end the following new subsection:
       ``(r) Limitation on Origination Fees.--The Secretary shall 
     establish limits on the origination fee that may be charged 
     to a mortgagor under a mortgage insured under this section, 
     which limitations shall--
       ``(1) be equal to 2.0 percent of the maximum claim amount 
     of the mortgage, up to a maximum claim amount of $200,000 
     plus 1 percent of any portion of the maximum claim amount 
     that is greater than $200,000, unless adjusted thereafter on 
     the basis of an analysis of--
       ``(A) the costs to mortgagors; and
       ``(B) the impact on the reverse mortgage market;
       ``(2) be subject to a minimum allowable amount;
       ``(3) provide that the origination fee may be fully 
     financed with the mortgage;
       ``(4) include any fees paid to correspondent mortgagees 
     approved by the Secretary;
       ``(5) have the same effective date as subsection (m)(2) 
     regarding the limitation on principal obligation; and
       ``(6) be subject to a maximum origination fee of $6,000, 
     except that such maximum limit shall be adjusted in 
     accordance with the annual percentage increase in the 
     Consumer Price Index of the Bureau of Labor Statistics of the 
     Department of Labor in increments of $500 only when the 
     percentage increase in such index, when applied to the 
     maximum origination fee, produces dollar increases that 
     exceed $500.''.
       (d) Study Regarding Program Costs and Credit 
     Availability.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study regarding the costs and 
     availability of credit under the home equity conversion 
     mortgages for elderly homeowners program under section 255 of 
     the National Housing Act (12 U.S.C. 1715z-20) (in this 
     subsection referred to as the ``program'').
       (2) Purpose.--The purpose of the study required under 
     paragraph (1) is to help Congress analyze and determine the 
     effects of limiting the amounts of the costs or fees under 
     the program from the amounts charged under the program as of 
     the date of the enactment of this title.
       (3) Content of report.--The study required under paragraph 
     (1) should focus on--
       (A) the cost to mortgagors of participating in the program;
       (B) the financial soundness of the program;
       (C) the availability of credit under the program; and
       (D) the costs to elderly homeowners participating in the 
     program, including--
       (i) mortgage insurance premiums charged under the program;
       (ii) up-front fees charged under the program; and
       (iii) margin rates charged under the program.
       (4) Timing of report.--Not later than 12 months after the 
     date of the enactment of this title, the Comptroller General 
     shall submit a report to the Committee on Banking, Housing, 
     and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives setting 
     forth the results and conclusions of the study required under 
     paragraph (1).

     SEC. 2123. ENERGY EFFICIENT MORTGAGES PROGRAM.

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

     SEC. 2124. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS 
                   WITHOUT SUFFICIENT CREDIT HISTORY.

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

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

       ``(a) Establishment.--The Secretary shall carry out a pilot 
     program to establish, and make available to mortgagees, an 
     automated process for providing alternative credit rating 
     information for mortgagors and prospective mortgagors under 
     mortgages on 1- to 4-family residences to be insured under 
     this title who have insufficient credit histories for 
     determining their creditworthiness. Such alternative credit 
     rating information may include rent, utilities, and insurance 
     payment histories, and such other information as the 
     Secretary considers appropriate.
       ``(b) Scope.--The Secretary may carry out the pilot program 
     under this section on a limited basis or scope, and may 
     consider limiting the program to first-time homebuyers.
       ``(c) Limitation.--In any fiscal year, the aggregate number 
     of mortgages insured pursuant to the automated process 
     established under this section may not exceed 5 percent of 
     the aggregate number of mortgages for 1- to 4-family 
     residences insured by the Secretary under this title during 
     the preceding fiscal year.
       ``(d) Sunset.--After the expiration of the 5-year period 
     beginning on the date of the enactment of the Building 
     American Homeownership Act of 2008, the Secretary may not 
     enter into any new commitment to insure any mortgage, or 
     newly insure any mortgage, pursuant to the automated process 
     established under this section.''.
       (b) GAO Report.--Not later than the expiration of the two-
     year period beginning on the date of the enactment of this 
     subtitle, the Comptroller General of the United States shall 
     submit to the Congress a report identifying the number of 
     additional mortgagors served using the automated process 
     established pursuant to section 257 of the National Housing 
     Act (as added by the amendment made by subsection (a) of this 
     section) and the impact of such process and the insurance of 
     mortgages pursuant to such process on the safety and 
     soundness of the insurance funds under the National Housing 
     Act of which such mortgages are obligations.

     SEC. 2125. HOMEOWNERSHIP PRESERVATION.

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

     SEC. 2126. USE OF FHA SAVINGS FOR IMPROVEMENTS IN FHA 
                   TECHNOLOGIES, PROCEDURES, PROCESSES, PROGRAM 
                   PERFORMANCE, STAFFING, AND SALARIES.

       (a) Authorization of Appropriations.--There is authorized 
     to be appropriated for each of fiscal years 2009 through 
     2013, $25,000,000, from negative credit subsidy for the 
     mortgage insurance programs under title II of the National 
     Housing Act, to the Secretary of Housing and Urban 
     Development for increasing funding for the purpose of 
     improving technology, processes, program performance, 
     eliminating fraud, and for providing appropriate staffing in 
     connection with the mortgage insurance programs under title 
     II of the National Housing Act.
       (b) Certification.--The authorization under subsection (a) 
     shall not be effective for a fiscal year unless the Secretary 
     of Housing and Urban Development has, by rulemaking in 
     accordance with section 553 of title 5, United States Code 
     (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of 
     such section), made a determination that--
       (1) premiums being, or to be, charged during such fiscal 
     year for mortgage insurance under title II of the National 
     Housing Act are established at the minimum amount sufficient 
     to--
       (A) comply with the requirements of section 205(f) of such 
     Act (relating to required capital ratio for the Mutual 
     Mortgage Insurance Fund); and
       (B) ensure the safety and soundness of the other mortgage 
     insurance funds under such Act; and
       (2) any negative credit subsidy for such fiscal year 
     resulting from such mortgage insurance programs adequately 
     ensures the efficient delivery and availability of such 
     programs.
       (c) Study and Report.--The Secretary of Housing and Urban 
     Development shall conduct a study to obtain recommendations

[[Page 16010]]

     from participants in the private residential (both single 
     family and multifamily) mortgage lending business and the 
     secondary market for such mortgages on how best to update and 
     upgrade processes and technologies for the mortgage insurance 
     programs under title II of the National Housing Act so that 
     the procedures for originating, insuring, and servicing of 
     such mortgages conform with those customarily used by 
     secondary market purchasers of residential mortgage loans. 
     Not later than the expiration of the 12-month period 
     beginning on the date of the enactment of this title, the 
     Secretary shall submit a report to the Congress describing 
     the progress made and to be made toward updating and 
     upgrading such processes and technology, and providing 
     appropriate staffing for such mortgage insurance programs.

     SEC. 2127. POST-PURCHASE HOUSING COUNSELING ELIGIBILITY 
                   IMPROVEMENTS.

       Section 106(c)(4) of the Housing and Urban Development Act 
     of 1968 (12 U.S.C. 1701x(c)(4)) is amended:
       (1) in subparagraph (C)--
       (A) in clause (i), by striking ``; or'' and inserting a 
     semicolon;
       (B) in clause (ii), by striking the period at the end and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(iii) a significant reduction in the income of the 
     household due to divorce or death; or
       ``(iv) a significant increase in basic expenses of the 
     homeowner or an immediate family member of the homeowner 
     (including the spouse, child, or parent for whom the 
     homeowner provides substantial care or financial assistance) 
     due to--

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

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

     SEC. 2128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING 
                   DEMONSTRATION.

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

     SEC. 2129. FRAUD PREVENTION.

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

     SEC. 2130. LIMITATION ON MORTGAGE INSURANCE PREMIUM 
                   INCREASES.

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

     SEC. 2131. SAVINGS PROVISION.

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

     SEC. 2132. IMPLEMENTATION.

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

     SEC. 2133. MORATORIUM ON IMPLEMENTATION OF RISK-BASED 
                   PREMIUMS.

       (a) In General.--During the 12-month period beginning on 
     October 1, 2008, the Secretary of Housing and Urban 
     Development shall not take any action to implement or carry 
     out risk-based premiums, which are designed for mortgage 
     lenders to offer borrowers an FHA-insured product that 
     provides a range of mortgage insurance premium pricing, based 
     on the risk that the insurance contract represents, as such 
     planned implementation was set forth in the Notice published 
     in the Federal Register on May 13, 2008 (Vol. 73, No. 93, 
     Pages 27703 through 27711) (effective July 14, 2008).
       (b) Insurance of Mortgages Under the National Housing 
     Act.--During the 12-month period beginning on October 1, 
     2008, the Secretary of Housing and Urban Development shall 
     not take any action to implement or carry out any other risk-
     based premium product related to the insurance of any 
     mortgage on a single family residence under title II of the 
     National Housing Act, where the premium price for such new 
     product is based in whole or in part on a borrower's Decision 
     Credit Score, as that term is defined in the Notice described 
     under subsection (a), or any successor thereto.

          Subtitle B--Manufactured Housing Loan Modernization

     SEC. 2141. SHORT TITLE.

       This subtitle may be cited as the ``FHA Manufactured 
     Housing Loan Modernization Act of 2008''.

     SEC. 2142. PURPOSES.

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

     SEC. 2143. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION 
                   PORTFOLIO.

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

     SEC. 2144. INSURANCE BENEFITS.

       (a) In General.--Subsection (b) of section 2 of the 
     National Housing Act (12 U.S.C. 1703(b)), is amended by 
     adding at the end the following new paragraph:
       ``(8) Insurance benefits for manufactured housing loans.--
     Any contract of insurance with respect to loans, advances of

[[Page 16011]]

     credit, or purchases in connection with a manufactured home 
     or a lot on which to place a manufactured home (or both) for 
     a financial institution that is executed under this title 
     after the date of the enactment of the FHA Manufactured 
     Housing Loan Modernization Act of 2008 by the Secretary shall 
     be conclusive evidence of the eligibility of such financial 
     institution for insurance, and the validity of any contract 
     of insurance so executed shall be incontestable in the hands 
     of the bearer from the date of the execution of such 
     contract, except for fraud or misrepresentation on the part 
     of such institution.''.
       (b) Applicability.--The amendment made by subsection (a) 
     shall only apply to loans that are registered or endorsed for 
     insurance after the date of the enactment of this title.

     SEC. 2145. MAXIMUM LOAN LIMITS.

       (a) Dollar Amounts.--Paragraph (1) of section 2(b) of the 
     National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
       (1) in clause (ii) of subparagraph (A), by striking 
     ``$17,500'' and inserting ``$25,090'';
       (2) in subparagraph (C) by striking ``$48,600'' and 
     inserting ``$69,678'';
       (3) in subparagraph (D) by striking ``$64,800'' and 
     inserting ``$92,904'';
       (4) in subparagraph (E) by striking ``$16,200'' and 
     inserting ``$23,226''; and
       (5) by realigning subparagraphs (C), (D), and (E) 2 ems to 
     the left so that the left margins of such subparagraphs are 
     aligned with the margins of subparagraphs (A) and (B).
       (b) Annual Indexing.--Subsection (b) of section 2 of the 
     National Housing Act (12 U.S.C. 1703(b)), as amended by the 
     preceding provisions of this title, is further amended by 
     adding at the end the following new paragraph:
       ``(9) Annual indexing of manufactured housing loans.--The 
     Secretary shall develop a method of indexing in order to 
     annually adjust the loan limits established in subparagraphs 
     (A)(ii), (C), (D), and (E) of this subsection. Such index 
     shall be based on the manufactured housing price data 
     collected by the United States Census Bureau. The Secretary 
     shall establish such index no later than 1 year after the 
     date of the enactment of the FHA Manufactured Housing Loan 
     Modernization Act of 2008.''
       (c) Technical and Conforming Changes.--Paragraph (1) of 
     section 2(b) of the National Housing Act (12 U.S.C. 
     1703(b)(1)) is amended--
       (1) by striking ``No'' and inserting ``Except as provided 
     in the last sentence of this paragraph, no''; and
       (2) by adding after and below subparagraph (G) the 
     following:
       ``The Secretary shall, by regulation, annually increase the 
     dollar amount limitations in subparagraphs (A)(ii), (C), (D), 
     and (E) (as such limitations may have been previously 
     adjusted under this sentence) in accordance with the index 
     established pursuant to paragraph (9).''.

     SEC. 2146. INSURANCE PREMIUMS.

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

     SEC. 2147. TECHNICAL CORRECTIONS.

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

     SEC. 2148. REVISION OF UNDERWRITING CRITERIA.

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

     SEC. 2149. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

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

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

       ``(a) In General.--Except as provided in subsection (b), 
     the provisions of sections 3, 8, 16, 17, 18, and 19 of the 
     Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 
     et seq.) shall apply to each sale of a manufactured home 
     financed with an FHA-insured loan or extension of credit, as 
     well as to services rendered in connection with such 
     transactions.
       ``(b) Authority of the Secretary.--The Secretary is 
     authorized to determine the manner and extent to which the 
     provisions of sections 3, 8, 16, 17, 18, and 19 of the Real 
     Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et 
     seq.) may reasonably be applied to the transactions described 
     in subsection (a), and to grant such exemptions as may be 
     necessary to achieve the purposes of this section.
       ``(c) Definitions.--For purposes of this section--
       ``(1) the term `federally related mortgage loan' as used in 
     sections 3, 8, 16, 17, 18, and 19 of the Real Estate 
     Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) 
     shall include an FHA-insured loan or extension of credit made 
     to a borrower for the purpose of purchasing a manufactured 
     home that the borrower intends to occupy as a personal 
     residence; and
       ``(2) the term `real estate settlement service' as used in 
     sections 3, 8, 16, 17, 18, and 19 of the Real Estate 
     Settlement Procedures

[[Page 16012]]

     Act of 1974 (12 U.S.C. 2601 et seq.) shall include any 
     service rendered in connection with a loan or extension of 
     credit insured by the Federal Housing Administration for the 
     purchase of a manufactured home.
       ``(d) Unfair and Deceptive Practices.--In connection with 
     the purchase of a manufactured home financed with a loan or 
     extension of credit insured by the Federal Housing 
     Administration under this title, the Secretary shall prohibit 
     acts or practices in connection with loans or extensions of 
     credit that the Secretary finds to be unfair, deceptive, or 
     otherwise not in the interests of the borrower.''.

     SEC. 2150. LEASEHOLD REQUIREMENTS.

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

     TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

     SEC. 2201. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT 
                   FOR CERTAIN HOUSING LOANS GUARANTEED BY THE 
                   SECRETARY OF VETERANS AFFAIRS.

       Notwithstanding subparagraph (C) of section 3703(a)(1) of 
     title 38, United States Code, for purposes of any loan 
     described in subparagraph (A)(i)(IV) of such section that is 
     originated during the period beginning on the date of the 
     enactment of this Act and ending on December 31, 2008, the 
     term ``maximum guaranty amount'' shall mean an amount equal 
     to 25 percent of the higher of--
       (1) the limitation determined under section 305(a)(2) of 
     the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1454(a)(2)) for the calendar year in which the loan is 
     originated for a single-family residence; or
       (2) 125 percent of the area median price for a single-
     family residence, but in no case to exceed 175 percent of the 
     limitation determined under such section 305(a)(2) for the 
     calendar year in which the loan is originated for a single-
     family residence.

     SEC. 2202. COUNSELING ON MORTGAGE FORECLOSURES FOR MEMBERS OF 
                   THE ARMED FORCES RETURNING FROM SERVICE ABROAD.

       (a) In General.--The Secretary of Defense shall develop and 
     implement a program to advise members of the Armed Forces 
     (including members of the National Guard and Reserve) who are 
     returning from service on active duty abroad (including 
     service in Operation Iraqi Freedom and Operation Enduring 
     Freedom) on actions to be taken by such members to prevent or 
     forestall mortgage foreclosures.
       (b) Elements.--The program required by subsection (a) shall 
     include the following:
       (1) Credit counseling.
       (2) Home mortgage counseling.
       (3) Such other counseling and information as the Secretary 
     considers appropriate for purposes of the program.
       (c) Timing of Provision of Counseling.--Counseling and 
     other information under the program required by subsection 
     (a) shall be provided to a member of the Armed Forces covered 
     by the program as soon as practicable after the return of the 
     member from service as described in subsection (a).

     SEC. 2203. ENHANCEMENT OF PROTECTIONS FOR SERVICEMEMBERS 
                   RELATING TO MORTGAGES AND MORTGAGE 
                   FORECLOSURES.

       (a) Extension of Period of Protections Against Mortgage 
     Foreclosures.--
       (1) Extension of protection period.--Subsection (c) of 
     section 303 of the Servicemembers Civil Relief Act (50 U.S.C. 
     App. 533) is amended by striking ``90 days'' and inserting 
     ``9 months''.
       (2) Extension of stay of proceedings period.--Subsection 
     (b) of such section is amended by striking ``90 days'' and 
     inserting ``9 months''.
       (b) Treatment of Mortgages as Obligations Subject to 
     Interest Rate Limitation.--Section 207 of the Servicemembers 
     Civil Relief Act (50 U.S.C. App. 527) is amended--
       (1) in subsection (a)(1), by striking ``in excess of 6 
     percent'' the second place it appears and all that follows 
     and inserting ``in excess of 6 percent--
       ``(A) during the period of military service and one year 
     thereafter, in the case of an obligation or liability 
     consisting of a mortgage, trust deed, or other security in 
     the nature of a mortgage; or
       ``(B) during the period of military service, in the case of 
     any other obligation or liability.''; and
       (2) by striking subsection (d) and inserting the following 
     new subsection:
       ``(d) Definitions.--In this section:
       ``(1) Interest.--The term `interest' includes service 
     charges, renewal charges, fees, or any other charges (except 
     bona fide insurance) with respect to an obligation or 
     liability.
       ``(2) Obligation or liability.--The term `obligation or 
     liability' includes an obligation or liability consisting of 
     a mortgage, trust deed, or other security in the nature of a 
     mortgage.''.
       (c) Effective Date; Sunset.--
       (1) Effective date.--The amendment made by subsection (a) 
     shall take effect on the date of enactment of this Act.
       (2) Sunset.--The amendments made by subsection (a) shall 
     expire on December 31, 2010. Effective January 1, 2011, the 
     provisions of subsections (b) and (c) of section 303 of the 
     Servicemembers Civil Relief Act, as in effect on the day 
     before the date of the enactment of this Act, are hereby 
     revived.

TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND 
                            FORECLOSED HOMES

     SEC. 2301. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF 
                   ABANDONED AND FORECLOSED HOMES.

       (a) Direct Appropriations.--There are appropriated out of 
     any money in the Treasury not otherwise appropriated for the 
     fiscal year 2008, $4,000,000,000, to remain available until 
     expended, for assistance to States and units of general local 
     government (as such terms are defined in section 102 of the 
     Housing and Community Development Act of 1974 (42 U.S.C. 
     5302)) for the redevelopment of abandoned and foreclosed upon 
     homes and residential properties.
       (b) Allocation of Appropriated Amounts.--
       (1) In general.--The amounts appropriated or otherwise made 
     available to States and units of general local government 
     under this section shall be allocated based on a funding 
     formula established by the Secretary of Housing and Urban 
     Development (in this title referred to as the ``Secretary'').
       (2) Formula to be devised swiftly.--The funding formula 
     required under paragraph (1) shall be established not later 
     than 60 days after the date of enactment of this section.
       (3) Criteria.--The funding formula required under paragraph 
     (1) shall ensure that any amounts appropriated or otherwise 
     made available under this section are allocated to States and 
     units of general local government with the greatest need, as 
     such need is determined in the discretion of the Secretary 
     based on--
       (A) the number and percentage of home foreclosures in each 
     State or unit of general local government;
       (B) the number and percentage of homes financed by a 
     subprime mortgage related loan in each State or unit of 
     general local government; and
       (C) the number and percentage of homes in default or 
     delinquency in each State or unit of general local 
     government.
       (4) Distribution.--Amounts appropriated or otherwise made 
     available under this section shall be distributed according 
     to the funding formula established by the Secretary under 
     paragraph (1) not later than 30 days after the establishment 
     of such formula.
       (c) Use of Funds.--
       (1) In general.--Any State or unit of general local 
     government that receives amounts pursuant to this section 
     shall, not later than 18 months after the receipt of such 
     amounts, use such amounts to purchase and redevelop abandoned 
     and foreclosed homes and residential properties.
       (2) Priority.--Any State or unit of general local 
     government that receives amounts pursuant to this section 
     shall in distributing such amounts give priority emphasis and 
     consideration to those metropolitan areas, metropolitan 
     cities, urban areas, rural areas, low- and moderate-income 
     areas, and other areas with the greatest need, including 
     those--
       (A) with the greatest percentage of home foreclosures;
       (B) with the highest percentage of homes financed by a 
     subprime mortgage related loan; and
       (C) identified by the State or unit of general local 
     government as likely to face a significant rise in the rate 
     of home foreclosures.
       (3) Eligible uses.--Amounts made available under this 
     section may be used to--
       (A) establish financing mechanisms for purchase and 
     redevelopment of foreclosed upon homes and residential 
     properties, including such mechanisms as soft-seconds, loan 
     loss reserves, and shared-equity loans for low- and moderate-
     income homebuyers;
       (B) purchase and rehabilitate homes and residential 
     properties that have been abandoned or foreclosed upon, in 
     order to sell, rent, or redevelop such homes and properties;
       (C) establish land banks for homes that have been 
     foreclosed upon;
       (D) demolish blighted structures; and

[[Page 16013]]

       (E) redevelop demolished or vacant properties.
       (d) Limitations.--
       (1) On purchases.--Any purchase of a foreclosed upon home 
     or residential property under this section shall be at a 
     discount from the current market appraised value of the home 
     or property, taking into account its current condition, and 
     such discount shall ensure that purchasers are paying below-
     market value for the home or property.
       (2) Rehabilitation.--Any rehabilitation of a foreclosed-
     upon home or residential property under this section shall be 
     to the extent necessary to comply with applicable laws, 
     codes, and other requirements relating to housing safety, 
     quality, and habitability, in order to sell, rent, or 
     redevelop such homes and properties. Rehabilitation may 
     include improvements to increase the energy efficiency or 
     conservation of such homes and properties or provide a 
     renewable energy source or sources for such homes and 
     properties.
       (3) Sale of homes.--If an abandoned or foreclosed upon home 
     or residential property is purchased, redeveloped, or 
     otherwise sold to an individual as a primary residence, then 
     such sale shall be in an amount equal to or less than the 
     cost to acquire and redevelop or rehabilitate such home or 
     property up to a decent, safe, and habitable condition.
       (4) Reinvestment of profits.--
       (A) Profits from sales, rentals, and redevelopment.--
       (i) 5-year reinvestment period.--During the 5-year period 
     following the date of enactment of this Act, any revenue 
     generated from the sale, rental, redevelopment, 
     rehabilitation, or any other eligible use that is in excess 
     of the cost to acquire and redevelop (including reasonable 
     development fees) or rehabilitate an abandoned or foreclosed 
     upon home or residential property shall be provided to and 
     used by the State or unit of general local government in 
     accordance with, and in furtherance of, the intent and 
     provisions of this section.
       (ii) Deposits in the treasury.--

       (I) Profits.--Upon the expiration of the 5-year period set 
     forth under clause (i), any revenue generated from the sale, 
     rental, redevelopment, rehabilitation, or any other eligible 
     use that is in excess of the cost to acquire and redevelop 
     (including reasonable development fees) or rehabilitate an 
     abandoned or foreclosed upon home or residential property 
     shall be deposited in the Treasury of the United States as 
     miscellaneous receipts, unless the Secretary approves a 
     request to use the funds for purposes under this Act.
       (II) Other amounts.--Upon the expiration of the 5-year 
     period set forth under clause (i), any other revenue not 
     described under subclause (I) generated from the sale, 
     rental, redevelopment, rehabilitation, or any other eligible 
     use of an abandoned or foreclosed upon home or residential 
     property shall be deposited in the Treasury of the United 
     States as miscellaneous receipts.

       (B) Other revenues.--Any revenue generated under 
     subparagraphs (A), (C) or (D) of subsection (c)(3) shall be 
     provided to and used by the State or unit of general local 
     government in accordance with, and in furtherance of, the 
     intent and provisions of this section.
       (e) Rules of Construction.--
       (1) In general.--Except as otherwise provided by this 
     section, amounts appropriated, revenues generated, or amounts 
     otherwise made available to States and units of general local 
     government under this section shall be treated as though such 
     funds were community development block grant funds under 
     title I of the Housing and Community Development Act of 1974 
     (42 U.S.C. 5301 et seq.).
       (2) No match.--No matching funds shall be required in order 
     for a State or unit of general local government to receive 
     any amounts under this section.
       (f) Authority to Specify Alternative Requirements.--
       (1) In general.--In administering any amounts appropriated 
     or otherwise made available under this section, the Secretary 
     may specify alternative requirements to any provision under 
     title I of the Housing and Community Development Act of 1974 
     (except for those related to fair housing, nondiscrimination, 
     labor standards, and the environment) in accordance with the 
     terms of this section and for the sole purpose of expediting 
     the use of such funds.
       (2) Notice.--The Secretary shall provide written notice of 
     its intent to exercise the authority to specify alternative 
     requirements under paragraph (1) to the Committee on Banking, 
     Housing and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives not later 
     than 10 business days before such exercise of authority is to 
     occur.
       (3) Low and moderate income requirement.--
       (A) In general.--Notwithstanding the authority of the 
     Secretary under paragraph (1)--
       (i) all of the funds appropriated or otherwise made 
     available under this section shall be used with respect to 
     individuals and families whose income does not exceed 120 
     percent of area median income; and
       (ii) not less than 25 percent of the funds appropriated or 
     otherwise made available under this section shall be used for 
     the purchase and redevelopment of abandoned or foreclosed 
     upon homes or residential properties that will be used to 
     house individuals or families whose incomes do not exceed 50 
     percent of area median income.
       (B) Recurrent requirement.--The Secretary shall, by rule or 
     order, ensure, to the maximum extent practicable and for the 
     longest feasible term, that the sale, rental, or 
     redevelopment of abandoned and foreclosed upon homes and 
     residential properties under this section remain affordable 
     to individuals or families described in subparagraph (A).
       (g) Periodic Audits.--In consultation with the Secretary of 
     Housing and Urban Development, the Comptroller General of the 
     United States shall conduct periodic audits to ensure that 
     funds appropriated, made available, or otherwise distributed 
     under this section are being used in a manner consistent with 
     the criteria provided in this section.

     SEC. 2302. NATIONWIDE DISTRIBUTION OF RESOURCES.

       Notwithstanding any other provision of this Act or the 
     amendments made by this Act, each State shall receive not 
     less than 0.5 percent of funds made available under section 
     2301 (relating to emergency assistance for the redevelopment 
     of abandoned and foreclosed homes).

     SEC. 2303. LIMITATION ON USE OF FUNDS WITH RESPECT TO EMINENT 
                   DOMAIN.

       No State or unit of general local government may use any 
     amounts received pursuant to section 2301 to fund any project 
     that seeks to use the power of eminent domain, unless eminent 
     domain is employed only for a public use: Provided, That for 
     purposes of this section, public use shall not be construed 
     to include economic development that primarily benefits 
     private entities.

     SEC. 2304. LIMITATION ON DISTRIBUTION OF FUNDS.

       (a) In General.--None of the funds made available under 
     this title or title IV shall be distributed to--
       (1) an organization which has been indicted for a violation 
     under Federal law relating to an election for Federal office; 
     or
       (2) an organization which employs applicable individuals.
       (b) Applicable Individuals Defined.--In this section, the 
     term ``applicable individual'' means an individual who--
       (1) is--
       (A) employed by the organization in a permanent or 
     temporary capacity;
       (B) contracted or retained by the organization; or
       (C) acting on behalf of, or with the express or apparent 
     authority of, the organization; and
       (2) has been indicted for a violation under Federal law 
     relating to an election for Federal office.

     SECTION 2305. COUNSELING INTERMEDIARIES.

       Notwithstanding any other provision of this Act, the amount 
     appropriated under section 2301(a) of this Act shall be 
     $3,920,000,000 and the amount appropriated under section 2401 
     of this Act shall be $180,000,000: Provided, That of the 
     amount appropriated under section 2401 of this Act pursuant 
     to this section, not less than 15 percent shall be provided 
     to counseling organizations that target counseling services 
     regarding loss mitigation to minority and low-income 
     homeowners or provide such services in neighborhoods with 
     high concentrations of minority and low-income homeowners: 
     Provided further, That of amounts appropriated under such 
     section 2401 $30,000,000 shall be used by the Neighborhood 
     Reinvestment Corporation (referred to in this section as the 
     ``NRC'') to make grants to counseling intermediaries approved 
     by the Department of Housing and Urban Development or the NRC 
     to hire attorneys to assist homeowners who have legal issues 
     directly related to the homeowner's foreclosure, delinquency 
     or short sale. Such attorneys shall be capable of assisting 
     homeowners of owner-occupied homes with mortgages in default, 
     in danger of default, or subject to or at risk of foreclosure 
     and who have legal issues that cannot be handled by 
     counselors already employed by such intermediaries: Provided 
     further, That of the amounts provided for in the prior 
     provisos the NRC shall give priority consideration to 
     counseling intermediaries and legal organizations that (1) 
     provide legal assistance in the 100 metropolitan statistical 
     areas (as defined by the Director of the Office of Management 
     and Budget) with the highest home foreclosure rates, and (2) 
     have the capacity to begin using the financial assistance 
     within 90 days after receipt of the assistance: Provided 
     further, That no funds provided under this Act shall be used 
     to provide, obtain, or arrange on behalf of a homeowner, 
     legal representation involving or for the purposes of civil 
     litigation: Provided further, That the NRC, in awarding 
     counseling grants under section 2401 of this Act, may 
     consider, where appropriate, whether the entity has 
     implemented a written plan for providing in-person counseling 
     and for making contact, including personal contact, with 
     defaulted mortgagors, for the purpose of providing counseling 
     or providing information about available counseling.

                 TITLE IV--HOUSING COUNSELING RESOURCES

     SEC. 2401. HOUSING COUNSELING RESOURCES.

       There are appropriated out of any money in the Treasury not 
     otherwise appropriated

[[Page 16014]]

     for the fiscal year 2008, for an additional amount for the 
     ``Neighborhood Reinvestment Corporation--Payment to the 
     Neighborhood Reinvestment Corporation'' $100,000,000, to 
     remain available until December 31, 2008, for foreclosure 
     mitigation activities under the terms and conditions 
     contained in the second undesignated paragraph (beginning 
     with the phrase ``For an additional amount'') under the 
     heading ``Neighborhood Reinvestment Corporation--Payment to 
     the Neighborhood Reinvestment Corporation'' of Public Law 
     110-161.

     SEC. 2402. CREDIT COUNSELING.

       (a) In General.--Entities approved by the Neighborhood 
     Reinvestment Corporation or the Secretary and State housing 
     finance entities receiving funds under this title shall work 
     to identify and coordinate with non-profit organizations 
     operating national or statewide toll-free foreclosure 
     prevention hotlines, including those that--
       (1) serve as a consumer referral source and data repository 
     for borrowers experiencing some form of delinquency or 
     foreclosure;
       (2) connect callers with local housing counseling agencies 
     approved by the Neighborhood Reinvestment Corporation or the 
     Secretary to assist with working out a positive resolution to 
     their mortgage delinquency or foreclosure; or
       (3) facilitate or offer free assistance to help homeowners 
     to understand their options, negotiate solutions, and find 
     the best resolution for their particular circumstances.

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

     SEC. 2501. SHORT TITLE.

       This title may be cited as the ``Mortgage Disclosure 
     Improvement Act of 2008''.

     SEC. 2502. ENHANCED MORTGAGE LOAN DISCLOSURES.

       (a) Truth in Lending Act Disclosures.--Section 128(b)(2) of 
     the Truth in Lending Act (15 U.S.C. 1638(b)(2)) is amended--
       (1) by inserting ``(A)'' before ``In the'';
       (2) by striking ``a residential mortgage transaction, as 
     defined in section 103(w)'' and inserting ``any extension of 
     credit that is secured by the dwelling of a consumer'';
       (3) by striking ``before the credit is extended, or'' and 
     inserting ``and'';
       (4) by inserting ``, which shall be at least 7 business 
     days before consummation of the transaction'' after ``written 
     application'';
       (5) by striking ``, whichever is earlier''; and
       (6) by striking ``If the'' and all that follows through the 
     end of the paragraph and inserting the following:
       ``(B) In the case of an extension of credit that is secured 
     by the dwelling of a consumer, the disclosures provided under 
     subparagraph (A), shall be in addition to the other 
     disclosures required by subsection (a), and shall--
       ``(i) state in conspicuous type size and format, the 
     following: `You are not required to complete this agreement 
     merely because you have received these disclosures or signed 
     a loan application.'; and
       ``(ii) be provided in the form of final disclosures at the 
     time of consummation of the transaction, in the form and 
     manner prescribed by this section.
       ``(C) In the case of an extension of credit that is secured 
     by the dwelling of a consumer, under which the annual rate of 
     interest is variable, or with respect to which the regular 
     payments may otherwise be variable, in addition to the other 
     disclosures required by subsection (a), the disclosures 
     provided under this subsection shall do the following:
       ``(i) Label the payment schedule as follows: `Payment 
     Schedule: Payments Will Vary Based on Interest Rate Changes'.
       ``(ii) State in conspicuous type size and format examples 
     of adjustments to the regular required payment on the 
     extension of credit based on the change in the interest rates 
     specified by the contract for such extension of credit. Among 
     the examples required to be provided under this clause is an 
     example that reflects the maximum payment amount of the 
     regular required payments on the extension of credit, based 
     on the maximum interest rate allowed under the contract, in 
     accordance with the rules of the Board. Prior to issuing any 
     rules pursuant to this clause, the Board shall conduct 
     consumer testing to determine the appropriate format for 
     providing the disclosures required under this subparagraph to 
     consumers so that such disclosures can be easily understood, 
     including the fact that the initial regular payments are for 
     a specific time period that will end on a certain date, that 
     payments will adjust afterwards potentially to a higher 
     amount, and that there is no guarantee that the borrower will 
     be able to refinance to a lower amount.
       ``(D) In any case in which the disclosure statement under 
     subparagraph (A) contains an annual percentage rate of 
     interest that is no longer accurate, as determined under 
     section 107(c), the creditor shall furnish an additional, 
     corrected statement to the borrower, not later than 3 
     business days before the date of consummation of the 
     transaction.
       ``(E) The consumer shall receive the disclosures required 
     under this paragraph before paying any fee to the creditor or 
     other person in connection with the consumer's application 
     for an extension of credit that is secured by the dwelling of 
     a consumer. If the disclosures are mailed to the consumer, 
     the consumer is considered to have received them 3 business 
     days after they are mailed. A creditor or other person may 
     impose a fee for obtaining the consumer's credit report 
     before the consumer has received the disclosures under this 
     paragraph, provided the fee is bona fide and reasonable in 
     amount.
       ``(F) Waiver of timeliness of disclosures.--To expedite 
     consummation of a transaction, if the consumer determines 
     that the extension of credit is needed to meet a bona fide 
     personal financial emergency, the consumer may waive or 
     modify the timing requirements for disclosures under 
     subparagraph (A), provided that--
       ``(i) the term `bona fide personal emergency' may be 
     further defined in regulations issued by the Board;
       ``(ii) the consumer provides to the creditor a dated, 
     written statement describing the emergency and specifically 
     waiving or modifying those timing requirements, which 
     statement shall bear the signature of all consumers entitled 
     to receive the disclosures required by this paragraph; and
       ``(iii) the creditor provides to the consumers at or before 
     the time of such waiver or modification, the final 
     disclosures required by paragraph (1).
       ``(G) The requirements of subparagraphs (B), (C), (D) and 
     (E) shall not apply to extensions of credit relating to plans 
     described in section 101(53D) of title 11, United States 
     Code.''.
       (b) Civil Liability.--Section 130(a) of the Truth in 
     Lending Act (15 U.S.C. 1640(a)) is amended--
       (1) in paragraph (2)(A)(iii), by striking ``not less than 
     $200 or greater than $2,000'' and inserting ``not less than 
     $400 or greater than $4,000''; and
       (2) in the penultimate sentence of the undesignated matter 
     following paragraph (4)--
       (A) by inserting ``or section 128(b)(2)(C)(ii),'' after 
     ``128(a),''; and
       (B) by inserting ``or section 128(b)(2)(C)(ii)'' before the 
     period.
       (c) Effective Dates.--
       (1) General disclosures.--Except as provided in paragraph 
     (2), the amendments made by subsection (a) shall become 
     effective 12 months after the date of enactment of this Act.
       (2) Variable interest rates.--Subparagraph (C) of section 
     128(b)(2) of the Truth in Lending Act (15 U.S.C. 
     1638(b)(2)(C)), as added by subsection (a) of this section, 
     shall become effective on the earlier of--
       (A) the compliance date established by the Board for such 
     purpose, by regulation; or
       (B) 30 months after the date of enactment of this Act.

     SEC. 2503. COMMUNITY DEVELOPMENT INVESTMENT AUTHORITY FOR 
                   DEPOSITORY INSTITUTIONS.

       (a) National Banks.--The first sentence of the paragraph 
     designated as the ``Eleventh'' of section 5136 of the Revised 
     Statutes of the United States (12 U.S.C. 24) is amended by 
     striking ``promotes the public welfare by benefitting 
     primarily'' and inserting ``is designed primarily to promote 
     the public welfare, including the welfare of''.
       (b) State Member Banks.--The first sentence of the 23rd 
     paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 
     338a) is amended by striking ``promotes the public welfare by 
     benefitting primarily'' and inserting ``is designed primarily 
     to promote the public welfare, including the welfare of''.

                   TITLE VI--VETERANS HOUSING MATTERS

     SEC. 2601. HOME IMPROVEMENTS AND STRUCTURAL ALTERATIONS FOR 
                   TOTALLY DISABLED MEMBERS OF THE ARMED FORCES 
                   BEFORE DISCHARGE OR RELEASE FROM THE ARMED 
                   FORCES.

       Section 1717 of title 38, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(d)(1) In the case of a member of the Armed Forces who, 
     as determined by the Secretary, has a disability permanent in 
     nature incurred or aggravated in the line of duty in the 
     active military, naval, or air service, the Secretary may 
     furnish improvements and structural alterations for such 
     member for such disability or as otherwise described in 
     subsection (a)(2) while such member is hospitalized or 
     receiving outpatient medical care, services, or treatment for 
     such disability if the Secretary determines that such member 
     is likely to be discharged or released from the Armed Forces 
     for such disability.
       ``(2) The furnishing of improvements and alterations under 
     paragraph (1) in connection with the furnishing of medical 
     services described in subparagraph (A) or (B) of subsection 
     (a)(2) shall be subject to the limitation specified in the 
     applicable subparagraph.''.

     SEC. 2602. ELIGIBILITY FOR SPECIALLY ADAPTED HOUSING BENEFITS 
                   AND ASSISTANCE FOR MEMBERS OF THE ARMED FORCES 
                   WITH SERVICE-CONNECTED DISABILITIES AND 
                   INDIVIDUALS RESIDING OUTSIDE THE UNITED STATES.

       (a) Eligibility.--Chapter 21 of title 38, United States 
     Code, is amended by inserting after section 2101 the 
     following new section:

     ``Sec. 2101A. Eligibility for benefits and assistance: 
       members of the Armed Forces with service-connected 
       disabilities; individuals residing outside the United 
       States

       ``(a) Members With Service-Connected Disabilities.--(1) The 
     Secretary may provide

[[Page 16015]]

     assistance under this chapter to a member of the Armed Forces 
     serving on active duty who is suffering from a disability 
     that meets applicable criteria for benefits under this 
     chapter if the disability is incurred or aggravated in line 
     of duty in the active military, naval, or air service. Such 
     assistance shall be provided to the same extent as assistance 
     is provided under this chapter to veterans eligible for 
     assistance under this chapter and subject to the same 
     requirements as veterans under this chapter.
       ``(2) For purposes of this chapter, any reference to a 
     veteran or eligible individual shall be treated as a 
     reference to a member of the Armed Forces described in 
     subsection (a) who is similarly situated to the veteran or 
     other eligible individual so referred to.
       ``(b) Benefits and Assistance for Individuals Residing 
     Outside the United States.--(1) Subject to paragraph (2), the 
     Secretary may, at the Secretary's discretion, provide 
     benefits and assistance under this chapter (other than 
     benefits under section 2106 of this title) to any individual 
     otherwise eligible for such benefits and assistance who 
     resides outside the United States.
       ``(2) The Secretary may provide benefits and assistance to 
     an individual under paragraph (1) only if--
       ``(A) the country or political subdivision in which the 
     housing or residence involved is or will be located permits 
     the individual to have or acquire a beneficial property 
     interest (as determined by the Secretary) in such housing or 
     residence; and
       ``(B) the individual has or will acquire a beneficial 
     property interest (as so determined) in such housing or 
     residence.
       ``(c) Regulations.--Benefits and assistance under this 
     chapter by reason of this section shall be provided in 
     accordance with such regulations as the Secretary may 
     prescribe.''.
       (b) Conforming Amendments.--
       (1) Repeal of superseded authority.--Section 2101 of title 
     38, United States Code, is amended--
       (A) by striking subsection (c); and
       (B) by redesignating subsection (d) as subsection (c).
       (2) Limitations on assistance.--Section 2102 of title 38, 
     United States Code, is amended--
       (A) in subsection (a)--
       (i) by striking ``veteran'' each place it appears and 
     inserting ``individual''; and
       (ii) in paragraph (3), by striking ``veteran's'' and 
     inserting ``individual's'';
       (B) in subsection (b)(1), by striking ``a veteran'' and 
     inserting ``an individual'';
       (C) in subsection (c)--
       (i) by striking ``a veteran'' and inserting ``an 
     individual''; and
       (ii) by striking ``the veteran'' each place it appears and 
     inserting ``the individual''; and
       (D) in subsection (d), by striking ``a veteran'' each place 
     it appears and inserting ``an individual''.
       (3) Assistance for individuals temporarily residing in 
     housing of family member.--Section 2102A of title 38, United 
     States Code, is amended--
       (A) by striking ``veteran'' each place it appears (other 
     than in subsection (b)) and inserting ``individual'';
       (B) in subsection (a), by striking ``veteran's'' each place 
     it appears and inserting ``individual's''; and
       (C) in subsection (b), by striking ``a veteran'' each place 
     it appears and inserting ``an individual''.
       (4) Furnishing of plans and specifications.--Section 2103 
     of title 38, United States Code, is amended by striking 
     ``veterans'' both places it appears and inserting 
     ``individuals''.
       (5) Construction of benefits.--Section 2104 of title 38, 
     United States Code, is amended--
       (A) in subsection (a), by striking ``veteran'' each place 
     it appears and inserting ``individual''; and
       (B) in subsection (b)--
       (i) in the first sentence, by striking ``A veteran'' and 
     inserting ``An individual'';
       (ii) in the second sentence, by striking ``a veteran'' and 
     inserting ``an individual''; and
       (iii) by striking ``such veteran'' each place it appears 
     and inserting ``such individual''.
       (6) Veterans' mortgage life insurance.--Section 2106 of 
     title 38, United States Code, is amended--
       (A) in subsection (a)--
       (i) by striking ``any eligible veteran'' and inserting 
     ``any eligible individual''; and
       (ii) by striking ``the veterans' '' and inserting ``the 
     individual's'';
       (B) in subsection (b), by striking ``an eligible veteran'' 
     and inserting ``an eligible individual'';
       (C) in subsection (e), by striking ``an eligible veteran'' 
     and inserting ``an individual'';
       (D) in subsection (h), by striking ``each veteran'' and 
     inserting ``each individual'';
       (E) in subsection (i), by striking ``the veteran's'' each 
     place it appears and inserting ``the individual's'';
       (F) by striking ``the veteran'' each place it appears and 
     inserting ``the individual''; and
       (G) by striking ``a veteran'' each place it appears and 
     inserting ``an individual''.
       (7) Heading amendments.--(A) The heading of section 2101 of 
     title 38, United States Code, is amended to read as follows:

     ``Sec. 2101. Acquisition and adaptation of housing: eligible 
       veterans''.

       (B) The heading of section 2102A of such title is amended 
     to read as follows:

     ``Sec. 2102A. Assistance for individuals residing temporarily 
       in housing owned by a family member''.

       (8) Clerical amendments.--The table of sections at the 
     beginning of chapter 21 of title 38, United States Code, is 
     amended--
       (A) by striking the item relating to section 2101 and 
     inserting the following new item:

``2101. Acquisition and adaptation of housing: eligible veterans.'';
       (B) by inserting after the item relating to section 2101, 
     as so amended, the following new item:

``2101A. Eligibility for benefits and assistance: members of the Armed 
              Forces with service-connected disabilities; individuals 
              residing outside the United States.'';

     and
       (C) by striking the item relating to section 2102A and 
     inserting the following new item:

``2102A. Assistance for individuals residing temporarily in housing 
              owned by a family member.''.

     SEC. 2603. SPECIALLY ADAPTED HOUSING ASSISTANCE FOR 
                   INDIVIDUALS WITH SEVERE BURN INJURIES.

       Section 2101 of title 38, United States Code, is amended--
       (1) in subsection (a)(2), by adding at the end the 
     following new subparagraph:
       ``(E) The disability is due to a severe burn injury (as 
     determined pursuant to regulations prescribed by the 
     Secretary).''; and
       (2) in subsection (b)(2)--
       (A) by striking ``either'' and inserting ``any''; and
       (B) by adding at the end the following new subparagraph:
       ``(C) The disability is due to a severe burn injury (as so 
     determined).''.

     SEC. 2604. EXTENSION OF ASSISTANCE FOR INDIVIDUALS RESIDING 
                   TEMPORARILY IN HOUSING OWNED BY A FAMILY 
                   MEMBER.

       Section 2102A(e) of title 38, United States Code, is 
     amended by striking ``after the end of the five-year period 
     that begins on the date of the enactment of the Veterans' 
     Housing Opportunity and Benefits Improvement Act of 2006'' 
     and inserting ``after December 31, 2011''.

     SEC. 2605. INCREASE IN SPECIALLY ADAPTED HOUSING BENEFITS FOR 
                   DISABLED VETERANS.

       (a) In General.--Section 2102 of title 38, United States 
     Code, is amended--
       (1) in subsection (b)(2), by striking ``$10,000'' and 
     inserting ``$12,000'';
       (2) in subsection (d)--
       (A) in paragraph (1), by striking ``$50,000'' and inserting 
     ``$60,000''; and
       (B) in paragraph (2), by striking ``$10,000'' and inserting 
     ``$12,000''; and
       (3) by adding at the end the following new subsection:
       ``(e)(1) Effective on October 1 of each year (beginning in 
     2009), the Secretary shall increase the amounts described in 
     subsection (b)(2) and paragraphs (1) and (2) of subsection 
     (d) in accordance with this subsection.
       ``(2) The increase in amounts under paragraph (1) to take 
     effect on October 1 of a year shall be by an amount of such 
     amounts equal to the percentage by which--
       ``(A) the residential home cost-of-construction index for 
     the preceding calendar year, exceeds
       ``(B) the residential home cost-of-construction index for 
     the year preceding the year described in subparagraph (A).
       ``(3) The Secretary shall establish a residential home 
     cost-of-construction index for the purposes of this 
     subsection. The index shall reflect a uniform, national 
     average change in the cost of residential home construction, 
     determined on a calendar year basis. The Secretary may use an 
     index developed in the private sector that the Secretary 
     determines is appropriate for purposes of this subsection.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on July 1, 2008, and shall apply with 
     respect to payments made in accordance with section 2102 of 
     title 38, United States Code, on or after that date.

     SEC. 2606. REPORT ON SPECIALLY ADAPTED HOUSING FOR DISABLED 
                   INDIVIDUALS.

       (a) In General.--Not later than December 31, 2008, the 
     Secretary of Veterans Affairs shall submit to the Committee 
     on Veterans' Affairs of the Senate and the Committee on 
     Veterans' Affairs of the House of Representatives a report 
     that contains an assessment of the adequacy of the 
     authorities available to the Secretary under law to assist 
     eligible disabled individuals in acquiring--
       (1) suitable housing units with special fixtures or movable 
     facilities required for their disabilities, and necessary 
     land therefor;
       (2) such adaptations to their residences as are reasonably 
     necessary because of their disabilities; and
       (3) residences already adapted with special features 
     determined by the Secretary to be reasonably necessary as a 
     result of their disabilities.
       (b) Focus on Particular Disabilities.--The report required 
     by subsection (a) shall set forth a specific assessment of 
     the needs of--

[[Page 16016]]

       (1) veterans who have disabilities that are not described 
     in subsections (a)(2) and (b)(2) of section 2101 of title 38, 
     United States Code; and
       (2) other disabled individuals eligible for specially 
     adapted housing under chapter 21 of such title by reason of 
     section 2101A of such title (as added by section 2602(a) of 
     this Act) who have disabilities that are not described in 
     such subsections.

     SEC. 2607. REPORT ON SPECIALLY ADAPTED HOUSING ASSISTANCE FOR 
                   INDIVIDUALS WHO RESIDE IN HOUSING OWNED BY A 
                   FAMILY MEMBER ON PERMANENT BASIS.

       Not later than December 31, 2008, the Secretary of Veterans 
     Affairs shall submit to the Committee on Veterans' Affairs of 
     the Senate and the Committee on Veterans' Affairs of the 
     House of Representatives a report on the advisability of 
     providing assistance under section 2102A of title 38, United 
     States Code, to veterans described in subsection (a) of such 
     section, and to members of the Armed Forces covered by such 
     section 2102A by reason of section 2101A of title 38, United 
     States Code (as added by section 2602(a) of this Act), who 
     reside with family members on a permanent basis.

     SEC. 2608. DEFINITION OF ANNUAL INCOME FOR PURPOSES OF 
                   SECTION 8 AND OTHER PUBLIC HOUSING PROGRAMS.

       Section 3(b)(4) of the United States Housing Act of 1937 
     (42 U.S.C. 1437a(3)(b)(4)) is amended by inserting ``or any 
     deferred Department of Veterans Affairs disability benefits 
     that are received in a lump sum amount or in prospective 
     monthly amounts'' before ``may not be considered''.

     SEC. 2609. PAYMENT OF TRANSPORTATION OF BAGGAGE AND HOUSEHOLD 
                   EFFECTS FOR MEMBERS OF THE ARMED FORCES WHO 
                   RELOCATE DUE TO FORECLOSURE OF LEASED HOUSING.

       Section 406 of title 37, United States Code, is amended--
       (1) by redesignating subsections (k) and (l) as subsections 
     (l) and (m), respectively; and
       (2) by inserting after subsection (j) the following new 
     subsection (k):
       ``(k) A member of the armed forces who relocates from 
     leased or rental housing by reason of the foreclosure of such 
     housing is entitled to transportation of baggage and 
     household effects under subsection (b)(1) in the same manner, 
     and subject to the same conditions and limitations, as 
     similarly circumstanced members entitled to transportation of 
     baggage and household effects under that subsection.''.

  TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT

     SEC. 2701. SHORT TITLE.

       This title may be cited as the ``Small Public Housing 
     Authorities Paperwork Reduction Act''.

     SEC. 2702. PUBLIC HOUSING AGENCY PLANS FOR CERTAIN QUALIFIED 
                   PUBLIC HOUSING AGENCIES.

       (a) In General.--Section 5A(b) of the United States Housing 
     Act of 1937 (42 U.S.C. 1437c-1(b)) is amended by adding at 
     the end the following:
       ``(3) Exemption of certain phas from filing requirement.--
       ``(A) In general.--Notwithstanding paragraph (1) or any 
     other provision of this Act--
       ``(i) the requirement under paragraph (1) shall not apply 
     to any qualified public housing agency; and
       ``(ii) except as provided in subsection (e)(4)(B), any 
     reference in this section or any other provision of law to a 
     `public housing agency' shall not be considered to refer to 
     any qualified public housing agency, to the extent such 
     reference applies to the requirement to submit an annual 
     public housing agency plan under this subsection.
       ``(B) Civil rights certification.--Notwithstanding that 
     qualified public housing agencies are exempt under 
     subparagraph (A) from the requirement under this section to 
     prepare and submit an annual public housing plan, each 
     qualified public housing agency shall, on an annual basis, 
     make the certification described in paragraph (16) of 
     subsection (d), except that for purposes of such qualified 
     public housing agencies, such paragraph shall be applied by 
     substituting `the public housing program of the agency' for 
     `the public housing agency plan'.
       ``(C) Definition.--For purposes of this section, the term 
     `qualified public housing agency' means a public housing 
     agency that meets the following requirements:
       ``(i) The sum of (I) the number of public housing dwelling 
     units administered by the agency, and (II) the number of 
     vouchers under section 8(o) of the United States Housing Act 
     of 1937 (42 U.S.C. 1437f(o)) administered by the agency, is 
     550 or fewer.
       ``(ii) The agency is not designated under section 6(j)(2) 
     as a troubled public housing agency, and does not have a 
     failing score under the section 8 Management Assessment 
     Program during the prior 12 months.''.
       (b) Resident Participation.--Section 5A of the United 
     States Housing Act of 1937 (42 U.S.C. 1437c-1) is amended--
       (1) in subsection (e), by inserting after paragraph (3) the 
     following:
       ``(4) Qualified public housing agencies.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     nothing in this section may be construed to exempt a 
     qualified public housing agency from the requirement under 
     paragraph (1) to establish 1 or more resident advisory 
     boards. Notwithstanding that qualified public housing 
     agencies are exempt under subsection (b)(3)(A) from the 
     requirement under this section to prepare and submit an 
     annual public housing plan, each qualified public housing 
     agency shall consult with, and consider the recommendations 
     of the resident advisory boards for the agency, at the annual 
     public hearing required under subsection (f)(5), regarding 
     any changes to the goals, objectives, and policies of that 
     agency.
       ``(B) Applicability of waiver authority.--Paragraph (3) 
     shall apply to qualified public housing agencies, except that 
     for purposes of such qualified public housing agencies, 
     subparagraph (B) of such paragraph shall be applied by 
     substituting `the functions described in the second sentence 
     of paragraph (4)(A)' for `the functions described in 
     paragraph (2)'.
       ``(f) Public Hearings.--''; and
       (2) in subsection (f) (as so designated by the amendment 
     made by paragraph (1)), by adding at the end the following:
       ``(5) Qualified public housing agencies.--
       ``(A) Requirement.--Notwithstanding that qualified public 
     housing agencies are exempt under subsection (b)(3)(A) from 
     the requirement under this section to conduct a public 
     hearing regarding the annual public housing plan of the 
     agency, each qualified public housing agency shall annually 
     conduct a public hearing--
       ``(i) to discuss any changes to the goals, objectives, and 
     policies of the agency; and
       ``(ii) to invite public comment regarding such changes.
       ``(B) Availability of information and notice.--Not later 
     than 45 days before the date of any hearing described in 
     subparagraph (A), a qualified public housing agency shall--
       ``(i) make all information relevant to the hearing and any 
     determinations of the agency regarding changes to the goals, 
     objectives, and policies of the agency to be considered at 
     the hearing available for inspection by the public at the 
     principal office of the public housing agency during normal 
     business hours; and
       ``(ii) publish a notice informing the public that--

       ``(I) the information is available as required under clause 
     (i); and
       ``(II) a public hearing under subparagraph (A) will be 
     conducted.''.

                    TITLE VIII--HOUSING PRESERVATION

        Subtitle A--Preservation Under Federal Housing Programs

     SEC. 2801. 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. 2802. ELIGIBILITY OF CERTAIN PROJECTS FOR ENHANCED 
                   VOUCHER ASSISTANCE.

       Notwithstanding any other provision of law--
       (1) the property known as The Heritage Apartments (FHA No. 
     023-44804), in Malden, Massachusetts, shall be considered 
     eligible low-income housing for purposes of the eligibility 
     of residents of the property for enhanced voucher assistance 
     under section 8(t) of the United States Housing Act of 1937 
     (42 U.S.C. 1437f(t)), pursuant to paragraph (2)(A) of section 
     223(f) of the Low-Income Housing Preservation and Resident 
     Homeownership Act of 1990 (12 U.S.C. 4113(f)(2)(A));
       (2) such residents shall receive enhanced rental housing 
     vouchers upon the prepayment of the mortgage loan for the 
     property under section 236 of the National Housing Act (12 
     U.S.C. 1715z-1); and
       (3) the Secretary shall approve such prepayment and 
     subsequent transfer of the property without any further 
     condition, except that the property shall be restricted for 
     occupancy, until the original maturity date of the prepaid 
     mortgage loan, only by families with incomes not exceeding 80 
     percent of the adjusted median income for the area in which 
     the property is located, as published by the Secretary.

     Amounts for the enhanced vouchers pursuant to this section 
     shall be provided under amounts appropriated for tenant-based 
     rental assistance otherwise authorized under section 8(t) of 
     the United States Housing Act of 1937.

     SEC. 2803. TRANSFER OF CERTAIN RENTAL ASSISTANCE CONTRACTS.

       (a) Transfer.--Subject to subsection (c) and 
     notwithstanding any other provision of law, the Secretary of 
     Housing and Urban Development shall, at the request of the 
     owner,

[[Page 16017]]

     transfer or authorize the transfer, of the contracts, 
     restrictions, and debt described in subsection (b)--
       (1) on the housing that is owned or managed by Community 
     Properties of Ohio Management Services LLC or an affiliate of 
     Ohio Capital Corporation for Housing and located in Franklin 
     County, Ohio, to other properties located in Franklin County, 
     Ohio; and
       (2) on the housing that is owned or managed by The Model 
     Group, Inc., and located in Hamilton County, Ohio, to other 
     properties located in Hamilton County, Ohio.
       (b) Contracts, Restrictions, and Debt Covered.--The 
     contracts, restrictions, and debt described in this 
     subsection are as follows:
       (1) All or a portion of a project-based rental assistance 
     housing assistance payments contract under section 8 of the 
     United States Housing Act of 1937 (42 U.S.C. 1437f).
       (2) Existing Federal use restrictions, including without 
     limitation use agreements, regulatory agreements, and 
     accommodation agreements.
       (3) Any subordinate debt held by the Secretary or assigned 
     and any mortgages securing such debt, all related loan and 
     security documentation and obligations, and reserve and 
     escrow balances.
       (c) Retention of Same Number of Units and Amount of 
     Assistance.--Any transfer pursuant to subsection (a) shall 
     result in--
       (1) a total number of dwelling units (including units 
     retained by the owners and units transferred) covered by 
     assistance described in subsection (b)(1) after the transfer 
     remaining the same as such number assisted before the 
     transfer, with such increases or decreases in unit sizes as 
     may be contained in a plan approved by a local planning or 
     development commission or department; and
       (2) no reduction in the total amount of the housing 
     assistance payments under contracts described in subsection 
     (b)(1).

     SEC. 2804. PUBLIC HOUSING DISASTER RELIEF.

       Section 9 of the United States Housing Act of 1937 (42 
     U.S.C. 1437g) is amended--
       (1) by striking subsection (k); and
       (2) by redesignating subsections (l), (m), and (n) as 
     subsections (k), (l), and (m), respectively.

     SEC. 2805. PRESERVATION OF CERTAIN AFFORDABLE HOUSING.

       Notwithstanding any other provision of law--
       (1) for the property known as Nihonmachi Terrace (FHA No. 
     121-44284), in San Francisco, California, upon the 
     refinancing of the existing federally insured mortgage 
     pursuant to section 236(b) of the National Housing Act (12 
     U.S.C. 1715z-1(b)), unassisted low and moderate-income 
     residents of the property shall be deemed eligible for and 
     shall receive voucher assistance under section 8(o) of the 
     United States Housing Act of 1937 (42 U.S.C. 1437f(o)); and
       (2) to preserve the affordability of the property, the 
     housing authority shall utilize such additional voucher 
     assistance pursuant to subsection 8(o)(13) of the United 
     States Housing Act of 1937, without regard to the limitations 
     of subparagraphs (B) and (D) of that subsection.

     Amounts for the vouchers pursuant to this section shall be 
     provided under amounts appropriated for tenant-based rental 
     assistance otherwise authorized.

Subtitle B--Coordination of Federal Housing Programs and Tax Incentives 
                              for Housing

     SEC. 2831. SHORT TITLE.

       This subtitle may be cited as the ``Housing Tax Credit 
     Coordination Act of 2008''.

     SEC. 2832. APPROVALS BY DEPARTMENT OF HOUSING AND URBAN 
                   DEVELOPMENT.

       (a) Administrative and Procedural Changes.--
       (1) In general.--The Secretary of Housing and Urban 
     Development (in this section referred to as the 
     ``Secretary'') shall, not later than the expiration of the 6-
     month period beginning upon after the date of the enactment 
     of this Act, implement administrative and procedural changes 
     to expedite approval of multifamily housing projects under 
     the jurisdiction of the Department of Housing and Urban 
     Development that meet the requirements of the Secretary for 
     such approvals.
       (2) Projects.--The multifamily housing projects referred to 
     in paragraph (1) shall include--
       (A) projects for which assistance is provided by such 
     Department in conjunction with any low-income housing tax 
     credits under section 42 of the Internal Revenue Code of 1986 
     or tax-exempt housing bonds; and
       (B) existing public housing projects and assisted housing 
     projects, for which approval of the Secretary is necessary 
     for transactions, in conjunction with any such low-income 
     housing tax credits or tax-exempt housing bonds, involving 
     the preservation or rehabilitation of the project.
       (3) Changes.--The administrative and procedural changes 
     referred to in paragraph (1) shall include all actions 
     necessary to carry out paragraph (1), which may include--
       (A) improving the efficiency of approval procedures;
       (B) simplifying approval requirements,
       (C) establishing time deadlines or target deadlines for 
     required approvals;
       (D) modifying division of approval authority between field 
     and national offices;
       (E) improving outreach to project sponsors regarding 
     information that is required to be submitted for such 
     approvals;
       (F) requesting additional funding for increasing staff, if 
     necessary; and
       (G) any other actions which would expedite approvals.

     Any such changes shall be made in a manner that provides for 
     full compliance with any existing requirements under law or 
     regulation that are designed to protect families receiving 
     public and assisted housing assistance, including income 
     targeting, rent, and fair housing provisions, and shall also 
     comply with requirements regarding environmental review and 
     protection and wages paid to laborers.
       (b) Consultation.--The Secretary shall consult with the 
     Commissioner of the Internal Revenue Service and take such 
     actions as are appropriate in conjunction with such 
     consultation to simplify the coordination of rules, 
     regulations, forms, and approval requirements for multifamily 
     housing projects projects for which assistance is provided by 
     such Department in conjunction with any low-income housing 
     tax credits under section 42 of the Internal Revenue Code of 
     1986 or tax-exempt housing bonds.
       (c) Recommendations.--In implementing the changes required 
     under this section, the Secretary shall solicit 
     recommendations regarding such changes from project owners 
     and sponsors, investors and stakeholders in housing tax 
     credits, State and local housing finance agencies, public 
     housing agencies, tenant advocates, and other stakeholders in 
     such projects.
       (d) Report.--Not later than the expiration of the 9-month 
     period beginning on the date of the enactment of this Act, 
     the Secretary shall submit a report to the Committee on 
     Financial Services of the House of Representatives and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate that--
       (1) identifies the actions taken by the Secretary to comply 
     with this section;
       (2) includes information regarding any resulting 
     improvements in the expedited approval for multifamily 
     housing projects;
       (3) identifies recommendations made pursuant to subsection 
     (c);
       (4) identifies actions taken by the Secretary to implement 
     the provisions in the amendments made by sections 2834 and 
     2835 of this Act; and
       (5) makes recommendations for any legislative changes that 
     are needed to facilitate prompt approval of assistance for 
     such projects.

     SEC. 2833. PROJECT APPROVALS BY RURAL HOUSING SERVICE.

       Section 515(h) of the Housing Act of 1949 (42 U.S.C. 1485) 
     is amended--
       (1) by inserting ``(1) Condition.--'' after ``(h)''; and
       (2) by adding at the end the following new paragraphs:
       ``(2) Actions to expedite project approvals.--
       ``(A) In general.--The Secretary shall take actions to 
     facilitate timely approval of requests to transfer ownership 
     or control, for the purpose of rehabilitation or 
     preservation, of multifamily housing projects for which 
     assistance is provided by the Secretary of Agriculture in 
     conjunction with any low-income housing tax credits under 
     section 42 of the Internal Revenue Code of 1986 or tax-exempt 
     housing bonds.
       ``(B) Consultation.--The Secretary of Agriculture shall 
     consult with the Commissioner of the Internal Revenue Service 
     and take such actions as are appropriate in conjunction with 
     such consultation to simplify the coordination of rules, 
     regulations, forms (including applications forms for project 
     transfers), and approval requirements multifamily housing 
     projects for which assistance is provided by the Secretary of 
     Agriculture in conjunction with any low-income housing tax 
     credits under section 42 of the Internal Revenue Code of 1986 
     or tax-exempt housing bonds.
       ``(C) Existing requirements.--Any actions taken pursuant to 
     this paragraph shall be taken in a manner that provides for 
     full compliance with any existing requirements under law or 
     regulation that are designed to protect families receiving 
     Federal housing assistance, including income targeting, rent, 
     and fair housing provisions, and shall also comply with 
     requirements regarding environmental review and protection 
     and wages paid to laborers.
       ``(D) Recommendations.--In implementing the changes 
     required under this paragraph, the Secretary shall solicit 
     recommendations regarding such changes from project owners 
     and sponsors, investors and stakeholders in housing tax 
     credits, State and local housing finance agencies, tenant 
     advocates, and other stakeholders in such projects.''.

     SEC. 2834. USE OF FHA LOANS WITH HOUSING TAX CREDITS.

       (a) Subsidy Layering Requirements.--Subsection (d) of 
     section 102 of the Department of Housing and Urban 
     Development Reform Act of 1989 (42 U.S.C. 3545(d)) is 
     amended--
       (1) in the first sentence, by inserting after ``assistance 
     within the jurisdiction of the Department'' the following: 
     ``, as such term is defined in subsection (m), except that 
     for

[[Page 16018]]

     purposes of this subsection such term shall not include any 
     mortgage insurance provided pursuant to title II of the 
     National Housing Act (12 U.S.C. 1707 et seq.)''; and
       (2) in the second sentence, by inserting ``such'' before 
     ``assistance''.
       (b) Cost Certification.--Section 227 of National Housing 
     Act (12 U.S.C. 1715r) is amended--
       (1) in the matter preceding paragraph (a) (relating to a 
     definition of ``new or rehabilitated multifamily housing'')--
       (A) in the first sentence--
       (i) by striking ``Notwithstanding'' and inserting ``Except 
     as provided in subsection (b) and notwithstanding''; and
       (ii) by redesignating clauses (a) and (b) as clauses (A) 
     and (B), respectively; and
       (B) by striking ``As used in this section--'';
       (2) in paragraph (c) (relating to a definition of ``actual 
     cost'')--
       (A) in clause (i), by redesignating clauses (1) and (2) as 
     clauses (I) and (II), respectively; and
       (B) in clause (ii), by redesignating clauses (1) and (2) as 
     clauses (I) and (II), respectively;
       (3) by redesignating paragraphs (a), (b), and (c) as 
     paragraphs (1), (2), and (3), respectively;
       (4) by inserting before paragraph (1) (as so redesignated 
     by paragraph (3) of this subsection) the following:
       ``(b) Exemption for Certain Projects Assisted With Low-
     Income Housing Tax Credit.--In the case of any mortgage 
     insured under any provision of this title that is executed in 
     connection with the construction, rehabilitation, purchase, 
     or refinancing of a multifamily housing project for which 
     equity provided through any low-income housing tax credit 
     pursuant to section 42 of the Internal Revenue Code of 1986 
     (26 U.S.C. 42), if the Secretary determines at the time of 
     issuance of the firm commitment for insurance that the ratio 
     of the loan proceeds to the actual cost of the project is 
     less than 80 percent, subsection (a) of this section shall 
     not apply.
       ``(c) Definitions.--For purposes of this section, the 
     following definitions shall apply:''; and
       (5) by inserting ``(a) Requirement.--'' after ``227.''.
       (c) Other Provisions Regarding Treatment of Mortgages 
     Covering Tax Credit Projects.--Title II of the National 
     Housing Act is amended by inserting after section 227 (12 
     U.S.C. 1715r) the following new section:

     ``SEC. 228. TREATMENT OF MORTGAGES COVERING TAX CREDIT 
                   PROJECTS.

       ``(a) Definition.--For purposes of this section, the term 
     `insured mortgage covering a tax credit project' means a 
     mortgage insured under any provision of this title that is 
     executed in connection with the construction, rehabilitation, 
     purchase, or refinancing of a multifamily housing project for 
     which equity provided through any low-income housing tax 
     credit pursuant to section 42 of the Internal Revenue Code of 
     1986 (26 U.S.C. 42).
       ``(b) Acceptance of Letters of Credit.--In the case of an 
     insured mortgage covering a tax credit project, the Secretary 
     may not require the escrowing of equity provided by the sale 
     of any low-income housing tax credits for the project 
     pursuant to section 42 of the Internal Revenue Code of 1986, 
     or any other form of security, such as a letter of credit.
       ``(c) Asset Management Requirements.--In the case of an 
     insured mortgage covering a tax credit project for which 
     project the applicable tax credit allocating agency is 
     causing to be performed periodic inspections in compliance 
     with the requirements of section 42 of the Internal Revenue 
     Code of 1986, such project shall be exempt from requirements 
     imposed by the Secretary regarding periodic inspections of 
     the property by the mortgagee. To the extent that other 
     compliance monitoring is being performed with respect to such 
     a project by such an allocating agency pursuant to such 
     section 42, the Secretary shall, to the extent that the 
     Secretary determines such monitoring is sufficient to ensure 
     compliance with any requirements established by the 
     Secretary, accept such agency's evidence of compliance for 
     purposes of determining compliance with the Secretary's 
     requirements.
       ``(d) Streamlined Processing Pilot Program.--
       ``(1) In general.--The Secretary shall establish a pilot 
     program to demonstrate the effectiveness of streamlining the 
     review process, which shall include all applications for 
     mortgage insurance under any provision of this title for 
     mortgages executed in connection with the construction, 
     rehabilitation, purchase, or refinancing of a multifamily 
     housing project for which equity provided through any low-
     income housing tax credit pursuant to section 42 of the 
     Internal Revenue Code of 1986. The Secretary shall issue 
     instructions for implementing the pilot program under this 
     subsection not later than the expiration of the 180-day 
     period beginning upon the date of the enactment of the 
     Housing Tax Credit Coordination Act of 2008.
       ``(2) Requirements.--Such pilot program shall provide for--
       ``(A) the Secretary to appoint designated underwriters, who 
     shall be responsible for reviewing such mortgage insurance 
     applications and making determinations regarding the 
     eligibility of such applications for such mortgage insurance 
     in lieu of the processing functions regarding such 
     applications that are otherwise performed by other employees 
     of the Department of Housing and Urban Development;
       ``(B) submission of applications for such mortgage 
     insurance by mortgagees who have previously been expressly 
     approved by the Secretary; and
       ``(C) determinations regarding the eligibility of such 
     applications for such mortgage insurance to be made by the 
     chief underwriter pursuant to requirements prescribed by the 
     Secretary, which shall include requiring submission of 
     reports regarding applications of proposed mortgagees by 
     third-party entities expressly approved by the chief 
     underwriter.''.

     SEC. 2835. OTHER HUD PROGRAMS.

       (a) Section 8 Assistance.--
       (1) PHA project-based assistance.--Section 8(o)(13) of the 
     United States Housing Act of 1937 (42 U.S.C. 1437f(o)(13)) is 
     amended--
       (A) in subparagraph (D)(i)--
       (i) by striking ``building'' and inserting ``project''; and
       (ii) by adding at the end the following: ``For purposes of 
     this subparagraph, the term `project' means a single 
     building, multiple contiguous buildings, or multiple 
     buildings on contiguous parcels of land.'';
       (B) in the first sentence of subparagraph (F), by striking 
     ``10 years'' and inserting ``15 years'';
       (C) in subparagraph (G)--
       (i) by inserting after the period at the end of the first 
     sentence the following: ``Such contract may, at the election 
     of the public housing agency and the owner of the structure, 
     specify that such contract shall be extended for renewal 
     terms of up to 15 years each, if the agency makes the 
     determination required by this subparagraph and the owner is 
     in compliance with the terms of the contract.''; and
       (ii) by adding at the end the following: ``A public housing 
     agency may agree to enter into such a contract at the time it 
     enters into the initial agreement for a housing assistance 
     payment contract or at any time thereafter that is before the 
     expiration of the housing assistance payment contract.'';
       (D) in subparagraph (H), by inserting before the period at 
     the end of the first sentence the following: ``, except that 
     in the case of a contract unit that has been allocated low-
     income housing tax credits and for which the rent limitation 
     pursuant to such section 42 is less than the amount that 
     would otherwise be permitted under this subparagraph, the 
     rent for such unit may, in the sole discretion of a public 
     housing agency, be established at the higher section 8 rent, 
     subject only to paragraph (10)(A)'';
       (E) in subparagraph (I)(i), by inserting before the 
     semicolon the following: ``, except that the contract may 
     provide that the maximum rent permitted for a dwelling unit 
     shall not be less than the initial rent for the dwelling unit 
     under the initial housing assistance payments contract 
     covering the unit''; and
       (F) by adding at the end the following new subparagraphs:
       ``(L) Use in cooperative housing and elevator buildings.--A 
     public housing agency may enter into a housing assistance 
     payments contract under this paragraph with respect to--
       ``(i) dwelling units in cooperative housing; and
       ``(ii) notwithstanding subsection (c), dwelling units in a 
     high-rise elevator project, including such a project that is 
     occupied by families with children, without review and 
     approval of the contract by the Secretary.
       ``(M) Reviews.--
       ``(i) Subsidy layering.--A subsidy layering review in 
     accordance with section 102(d) of the Department of Housing 
     and Urban Development Reform Act of 1989 (42 U.S.C. 3545(d)) 
     shall not be required for assistance under this paragraph in 
     the case of a housing assistance payments contract for an 
     existing structure, or if a subsidy layering review has been 
     conducted by the applicable State or local agency.
       ``(ii) Environmental review.--A public housing agency shall 
     not be required to undertake any environmental review before 
     entering into a housing assistance payments contract under 
     this paragraph for an existing structure, except to the 
     extent such a review is otherwise required by law or 
     regulation.''.
       (2) Voucher program rent reasonableness.--Section 8(o)(10) 
     of the United States Housing Act of 1937 (42 U.S.C. 
     1437f(o)(10)) is amended by adding at the end the following 
     new subparagraph;
       ``(F) Tax credit projects.--In the case of a dwelling unit 
     receiving tax credits pursuant to section 42 of the Internal 
     Revenue Code of 1986 or for which assistance is provided 
     under subtitle A of title II of the Cranston Gonzalez 
     National Affordable Housing Act of 1990, for which a housing 
     assistance contract not subject to paragraph (13) of this 
     subsection is established, rent reasonableness shall be 
     determined as otherwise provided by this paragraph, except 
     that--
       ``(i) comparison with rent for units in the private, 
     unassisted local market shall not be required if the rent is 
     equal to or less than the rent for other comparable units 
     receiving such tax credits or assistance in the project

[[Page 16019]]

     that are not occupied by families assisted with tenant-based 
     assistance under this subsection; and
       ``(ii) the rent shall not be considered reasonable for 
     purposes of this paragraph if it exceeds the greater of--

       ``(I) the rents charged for other comparable units 
     receiving such tax credits or assistance in the project that 
     are not occupied by families assisted with tenant-based 
     assistance under this subsection; and
       ``(II) the payment standard established by the public 
     housing agency for a unit of the size involved.''.

       (b) Section 202 Housing for Elderly Persons.--Subsection 
     (f) of section 202 of the Housing Act of 1959 (12 U.S.C. 
     1701q(f)) is amended--
       (1) by striking ``Selection Criteria.--'' and inserting 
     ``Initial Selection Criteria and Processing.-- (1) Selection 
     criteria.--'';
       (2) by redesignating paragraphs (1) through (7) as 
     subparagraphs (A) through (G), respectively; and
       (3) by adding at the end the following new paragraph:
       ``(2) Delegated processing.--
       ``(A) In issuing a capital advance under this subsection 
     for any project for which financing for the purposes 
     described in the last two sentences of subsection (b) is 
     provided by a combination of a capital advance under 
     subsection (c)(1) and sources other than this section, within 
     30 days of award of the capital advance, the Secretary shall 
     delegate review and processing of such projects to a State or 
     local housing agency that--
       ``(i) is in geographic proximity to the property;
       ``(ii) has demonstrated experience in and capacity for 
     underwriting multifamily housing loans that provide housing 
     and supportive services;
       ``(iii) may or may not be providing low-income housing tax 
     credits in combination with the capital advance under this 
     section, and
       ``(iv) agrees to issue a firm commitment within 12 months 
     of delegation.
       ``(B) The Secretary shall retain the authority to process 
     capital advances in cases in which no State or local housing 
     agency has applied to provide delegated processing pursuant 
     to this paragraph or no such agency has entered into an 
     agreement with the Secretary to serve as a delegated 
     processing agency.
       ``(C) An agency to which review and processing is delegated 
     pursuant to subparagraph (A) may assess a reasonable fee 
     which shall be included in the capital advance amounts and 
     may recommend project rental assistance amounts in excess of 
     those initially awarded by the Secretary. The Secretary shall 
     develop a schedule for reasonable fees under this 
     subparagraph to be paid to delegated processing agencies, 
     which shall take into consideration any other fees to be paid 
     to the agency for other funding provided to the project by 
     the agency, including bonds, tax credits, and other gap 
     funding.
       ``(D) Under such delegated system, the Secretary shall 
     retain the authority to approve rents and development costs 
     and to execute a capital advance within 60 days of receipt of 
     the commitment from the State or local agency. The Secretary 
     shall provide to such agency and the project sponsor, in 
     writing, the reasons for any reduction in capital advance 
     amounts or project rental assistance and such reductions 
     shall be subject to appeal.''.
       (c) McKinney-Vento Act Homeless Assistance Under Shelter 
     Plus Care Program.--
       (1) Term of contracts with owner or lessor.--Part I of 
     subtitle F of the McKinney-Vento Homeless Assistance Act is 
     amended--
       (A) by redesignating sections 462 and 463 (42 U.S.C. 
     11403g, 11403h) as sections 463 and 464, respectively;
       (B) by striking ``section 463'' each place such term 
     appears in sections 471, 476, 481, 486, and 488 (42 U.S.C. 
     11404, 11405, 11406, 11407, and 11407b) and inserting 
     ``section 464''; and
       (C) by inserting after section 461 (42 U.S.C. 11403f) the 
     following new section:

     ``SEC. 462. TERM OF CONTRACT WITH OWNER OR LESSOR.

       ``An applicant under this subtitle may enter into a 
     contract with the owner or lessor of a property that receives 
     rental assistance under this subtitle having a term of not 
     more than 15 years, subject to the availability of sufficient 
     funds provided in appropriation Acts for the purpose of 
     renewing expiring contracts for assistance payments. Such 
     contract may, at the election of the applicant and owner or 
     lessor, specify that such contract shall be extended for 
     renewal terms of not more than 15 years each, subject to the 
     availability of sufficient such appropriated funds.''.
       (2) Project-based rental assistance contracts.--Section 
     478(a) of the McKinney-Vento Homeless Assistance Act (42 
     U.S.C. 11405a(a)) is amended by inserting before the period 
     at the end the following: ``; except that, in the case of any 
     project for which equity is provided through any low-income 
     housing tax credit pursuant to section 42 of the Internal 
     Revenue Code of 1986 (26 U.S.C. 42), if an expenditure of 
     such amount for each unit (including the prorated share of 
     such work) is required to make the structure decent, safe, 
     and sanitary, and the owner agrees to reach initial closing 
     on permanent financing from such other sources within two 
     years and agrees to carry out the rehabilitation with 
     resources other than assistance under this subtitle within 60 
     months of notification of grant approval, the contract shall 
     be for a term of 10 years (except that such period may be 
     extended by up to 1 year by the Secretary, which extension 
     shall be granted unless the Secretary determines that the 
     sponsor is primarily responsible for the failure to meet such 
     deadline)''.
       (d) Data Collection on Tenants of Housing Tax Credit 
     Projects.--Title I of the United States Housing Act of 1937 
     (42 U.S.C. 1437 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 36. COLLECTION OF INFORMATION ON TENANTS IN TAX CREDIT 
                   PROJECTS.

       ``(a) In General.--Each State agency administering tax 
     credits under section 42 of the Internal Revenue Code of 1986 
     (26 U.S.C. 42) shall furnish to the Secretary of Housing and 
     Urban Development, not less than annually, information 
     concerning the race, ethnicity, family composition, age, 
     income, use of rental assistance under section 8(o) of the 
     United States Housing Act of 1937 or other similar 
     assistance, disability status, and monthly rental payments of 
     households residing in each property receiving such credits 
     through such agency. Such State agencies shall, to the extent 
     feasible, collect such information through existing reporting 
     processes and in a manner that minimizes burdens on property 
     owners. In the case of any household that continues to reside 
     in the same dwelling unit, information provided by the 
     household in a previous year may be used if the information 
     is of a category that is not subject to change or if 
     information for the current year is not readily available to 
     the owner of the property.
       ``(b) Standards.--The Secretary shall establish standards 
     and definitions for the information collected under 
     subsection (a), provide States with technical assistance in 
     establishing systems to compile and submit such information, 
     and, in coordination with other Federal agencies 
     administering housing programs, establish procedures to 
     minimize duplicative reporting requirements for properties 
     assisted under multiple housing programs.
       ``(c) Public Availability.--The Secretary shall, not less 
     than annually, compile and make publicly available the 
     information submitted to the Secretary pursuant to subsection 
     (a).
       ``(d) Authorization of Appropriations.--There is authorized 
     to be appropriated for the cost of activities required under 
     subsections (b) and (c) $2,500,000 for fiscal year 2009 and 
     $900,000 for each of fiscal years 2010 through 2013.''.

                        TITLE IX--MISCELLANEOUS

     SEC. 2901. HOMELESS ASSISTANCE.

       (a) Appropriations.--Section 726 of the McKinney-Vento 
     Homeless Assistance Act (42 U.S.C. 11435) is amended by 
     striking ``$70,000,000'' and all that follows and inserting 
     ``$100,000,000 for fiscal year 2009 and such sums as may be 
     necessary for each subsequent fiscal year.''.
       (b) Emergency Assistance.--Section 722 of the McKinney-
     Vento Homeless Assistance Act (42 U.S.C. 11432) is amended by 
     adding at the end the following:
       ``(h) Special Rule for Emergency Assistance.--
       ``(1) Emergency assistance.--
       ``(A) Reservation of amounts.--Subject to paragraph (4) and 
     notwithstanding any other provision of this title, the 
     Secretary shall use funds appropriated under section 726 for 
     fiscal year 2009, but not to exceed $30,000,000, for the 
     purposes of providing emergency assistance through grants.
       ``(B) General authority.--The Secretary shall use the funds 
     to make grants to State educational agencies under paragraph 
     (2), to enable the agencies to make subgrants to local 
     educational agencies under paragraph (3), to provide 
     activities described in section 723(d) for individuals 
     referred to in subparagraph (C).
       ``(C) Eligible individuals.--Funds made available under 
     this subsection shall be used to provide such activities for 
     eligible individuals, consisting of homeless children and 
     youths, and their families, who have become homeless due to 
     home foreclosure, including children and youths, and their 
     families, who became homeless when lenders foreclosed on 
     properties rented by the families.
       ``(2) Grants to state educational agencies.--
       ``(A) Disbursement.--The Secretary shall make grants with 
     funds provided under paragraph (1)(A) to State educational 
     agencies based on need, consistent with the number of 
     eligible individuals described in paragraph (1)(C) in the 
     States involved, as determined by the Secretary.
       ``(B) Assurance.--To be eligible to receive a grant under 
     this paragraph, a State educational agency shall provide an 
     assurance to the Secretary that the State educational agency, 
     and each local educational agency receiving a subgrant from 
     the State educational agency under this subsection shall 
     ensure that the activities carried out under this subsection 
     are consistent with the activities described in section 
     723(d).

[[Page 16020]]

       ``(3) Subgrants to local educational agencies.--A State 
     educational agency that receives a grant under paragraph (2) 
     shall use the funds made available through the grant to make 
     subgrants to local educational agencies. The State 
     educational agency shall make the subgrants to local 
     educational agencies based on need, consistent with the 
     number of eligible individuals described in paragraph (1)(C) 
     in the areas served by the local educational agencies, as 
     determined by the State educational agency.
       ``(4) Restriction.--The Secretary--
       ``(A) shall determine the amount (if any) by which the 
     funds appropriated under section 726 for fiscal year 2009 
     exceed $70,000,000; and
       ``(B) may only use funds from that amount to carry out this 
     subsection.''.

     SEC. 2902. INCREASING ACCESS AND UNDERSTANDING OF ENERGY 
                   EFFICIENT MORTGAGES.

       (a) Definition.--As used in this section, the term ``energy 
     efficient mortgage'' has the same meaning as given that term 
     in paragraph (24) of section 104 of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 12704(24)).
       (b) Recommendations to Eliminate Barriers to Use of Energy 
     Efficient Mortgages.--
       (1) In general.--Not later than 180 days after the date of 
     enactment of this section, the Secretary of Housing and Urban 
     Development, in conjunction with the Secretary of Energy and 
     the Administrator of the Environmental Protection Agency, 
     shall consult with the residential mortgage industry and 
     States to develop recommendations to eliminate the barriers 
     that exist to increasing the availability, use, and purchase 
     of energy efficient mortgages, including such barriers as--
       (A) the lack of reliable and accessible information on such 
     mortgages, including estimated energy savings and other 
     benefits of energy efficient housing;
       (B) the confusion regarding underwriting requirements and 
     differences among various energy efficient mortgage programs;
       (C) the complex and time consuming process of securing such 
     mortgages;
       (D) the lack of publicly available research on the default 
     risk of such mortgages; and
       (E) the availability of certified or accredited home energy 
     rating services.
       (2) Report to congress.--The Secretary of Housing and Urban 
     Development shall submit a report to Congress that--
       (A) summarizes the recommendations developed under 
     paragraph (1); and
       (B) includes any recommendations for statutory, regulatory, 
     or administrative changes that the Secretary deems necessary 
     to institute such recommendations.
       (c) Energy Efficient Mortgages Outreach Campaign.--
       (1) In general.--The Secretary of Housing and Urban 
     Development, in consultation and coordination with the 
     Secretary of Energy, the Administrator of the Environmental 
     Protection Agency, and State Energy and Housing Finance 
     Directors, shall carry out an education and outreach campaign 
     to inform and educate consumers, home builders, residential 
     lenders, and other real estate professionals on the 
     availability, benefits, and advantages of--
       (A) improved energy efficiency in housing; and
       (B) energy efficient mortgages.
       (2) Authorization of appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     the education and outreach campaign described under paragraph 
     (1).

                   DIVISION C--TAX-RELATED PROVISIONS

     SECTION 3000. SHORT TITLE; ETC.

       (a) Short Title.--This division may be cited as the 
     ``Housing Assistance Tax Act of 2008''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this division an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents for this 
     division is as follows:

Sec. 3000. Short title; etc.

                    TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                 Part I--Low-Income Housing Tax Credit

Sec. 3001. Temporary increase in volume cap for low-income housing tax 
              credit.
Sec. 3002. Determination of credit rate.
Sec. 3003. Modifications to definition of eligible basis.
Sec. 3004. Other simplification and reform of low-income housing tax 
              incentives.
Sec. 3005. Treatment of military basic pay.

        Part II--Modifications to Tax-Exempt Housing Bond Rules

Sec. 3007. Recycling of tax-exempt debt for financing residential 
              rental projects.
Sec. 3008. Coordination of certain rules applicable to low-income 
              housing credit and qualified residential rental project 
              exempt facility bonds.

  Part III--Reforms Related to the Low-Income Housing Credit and Tax-
                          Exempt Housing Bonds

Sec. 3009. Hold harmless for reductions in area median gross income.
Sec. 3010. Exception to annual current income determination requirement 
              where determination not relevant.

                   Subtitle B--Single Family Housing

Sec. 3011. First-time homebuyer credit.
Sec. 3012. Additional standard deduction for real property taxes for 
              nonitemizers.

                     Subtitle C--General Provisions

Sec. 3021. Temporary liberalization of tax-exempt housing bond rules.
Sec. 3022. Repeal of alternative minimum tax limitations on tax-exempt 
              housing bonds, low-income housing tax credit, and 
              rehabilitation credit.
Sec. 3023. Bonds guaranteed by Federal home loan banks eligible for 
              treatment as tax-exempt bonds.
Sec. 3024. Modification of rules pertaining to FIRPTA nonforeign 
              affidavits.
Sec. 3025. Modification of definition of tax-exempt use property for 
              purposes of the rehabilitation credit.
Sec. 3026. Extension of special rule for mortgage revenue bonds for 
              residences located in disaster areas.
Sec. 3027. Transfer of funds appropriated to carry out 2008 recovery 
              rebates for individuals.

       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

      Subtitle A--Foreign Currency and Other Qualified Activities

Sec. 3031. Revisions to REIT income tests.
Sec. 3032. Revisions to REIT asset tests.
Sec. 3033. Conforming foreign currency revisions.

                 Subtitle B--Taxable REIT Subsidiaries

Sec. 3041. Conforming taxable REIT subsidiary asset test.

                        Subtitle C--Dealer Sales

Sec. 3051. Holding period under safe harbor.
Sec. 3052. Determining value of sales under safe harbor.

                     Subtitle D--Health Care REITs

Sec. 3061. Conformity for health care facilities.

                      Subtitle E--Effective Dates

Sec. 3071. Effective dates.

                     TITLE III--REVENUE PROVISIONS

                     Subtitle A--General Provisions

Sec. 3081. Election to accelerate the AMT and research credits in lieu 
              of bonus depreciation.
Sec. 3082. Certain GO Zone incentives.
Sec. 3083. Increase in statutory limit on the public debt.

                      Subtitle B--Revenue Offsets

Sec. 3091. Returns relating to payments made in settlement of payment 
              card and third party network transactions.
Sec. 3092. Gain from sale of principal residence allocated to 
              nonqualified use not excluded from income.
Sec. 3093. Delay in application of worldwide allocation of interest.
Sec. 3094. Time for payment of corporate estimated taxes.

                    TITLE I--HOUSING TAX INCENTIVES

                    Subtitle A--Multi-Family Housing

                 PART I--LOW-INCOME HOUSING TAX CREDIT

     SEC. 3001. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME 
                   HOUSING TAX CREDIT.

       Paragraph (3) of section 42(h) is amended by adding at the 
     end the following new subparagraph:
       ``(I) Increase in state housing credit ceiling for 2008 and 
     2009.--In the case of calendar years 2008 and 2009--
       ``(i) the dollar amount in effect under subparagraph 
     (C)(ii)(I) for such calendar year (after any increase under 
     subparagraph (H)) shall be increased by $0.20, and
       ``(ii) the dollar amount in effect under subparagraph 
     (C)(ii)(II) for such calendar year (after any increase under 
     subparagraph (H)) shall be increased by an amount equal to 10 
     percent of such dollar amount (rounded to the next lowest 
     multiple of $5,000).''.

     SEC. 3002. DETERMINATION OF CREDIT RATE.

       (a) Temporary Minimum Credit Rate for Non-Federally 
     Subsidized New Buildings.--
       (1) In general.--Subsection (b) of section 42 is amended by 
     striking paragraph (1), by redesignating paragraph (2) as 
     paragraph (1), and by inserting after paragraph (1), as so 
     redesignated, the following new paragraph:
       ``(2) Temporary minimum credit rate for non-federally 
     subsidized new buildings.--In the case of any new building--
       ``(A) which is placed in service by the taxpayer after the 
     date of the enactment of this paragraph and before December 
     31, 2013, and
       ``(B) which is not federally subsidized for the taxable 
     year,
     the applicable percentage shall not be less than 9 
     percent.''.
       (2) Conforming amendments.--
       (A) Subsection (b) of section 42, as amended by paragraph 
     (1), is amended by striking

[[Page 16021]]

     ``For purposes of this section--'' and all that follows 
     through ``means the appropriate'' and inserting the 
     following:
       ``(1) Determination of applicable percentage.--For purposes 
     of this section, the term `applicable percentage' means, with 
     respect to any building, the appropriate''.
       (B) Clause (i) of section 42(b)(1)(B), as redesignated by 
     paragraph (1), is amended by striking ``a building described 
     in paragraph (1)(A)'' and inserting ``a new building which is 
     not federally subsidized for the taxable year''.
       (C) Clause (ii) of section 42(b)(1)(B), as redesignated by 
     paragraph (1), is amended by striking ``a building described 
     in paragraph (1)(B)'' and inserting ``a building not 
     described in clause (i)''.
       (b) Modifications to Definition of Federally Subsidized 
     Building.--
       (1) In general.--Subparagraph (A) of section 42(i)(2) is 
     amended by striking ``, or any below market Federal loan,''.
       (2) Conforming amendments.--
       (A) Subparagraph (B) of section 42(i)(2) is amended--
       (i) by striking ``balance of loan or'' in the heading 
     thereof,
       (ii) by striking ``loan or'' in the matter preceding clause 
     (i), and
       (iii) by striking ``subsection (d)--'' and all that follows 
     and inserting ``subsection (d) the proceeds of such 
     obligation.''.
       (B) Subparagraph (C) of section 42(i)(2) is amended--
       (i) by striking ``or below market Federal loan'' in the 
     matter preceding clause (i),
       (ii) in clause (i)--

       (I) by striking ``or loan (when issued or made)'' and 
     inserting ``(when issued)'', and
       (II) by striking ``the proceeds of such obligation or 
     loan'' and inserting ``the proceeds of such obligation'', and

       (iii) by striking ``, and such loan is repaid,'' in clause 
     (ii).
       (C) Paragraph (2) of section 42(i) is amended by striking 
     subparagraphs (D) and (E).
       (c) Effective Date.--The amendments made by this subsection 
     shall apply to buildings placed in service after the date of 
     the enactment of this Act.

     SEC. 3003. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.

       (a) Increase in Credit for Certain State Designated 
     Buildings.--Subparagraph (C) of section 42(d)(5) (relating to 
     increase in credit for buildings in high cost areas), before 
     redesignation under subsection (g), is amended by adding at 
     the end the following new clause:
       ``(v) Buildings designated by state housing credit 
     agency.--Any building which is designated by the State 
     housing credit agency as requiring the increase in credit 
     under this subparagraph in order for such building to be 
     financially feasible as part of a qualified low-income 
     housing project shall be treated for purposes of this 
     subparagraph as located in a difficult development area which 
     is designated for purposes of this subparagraph. The 
     preceding sentence shall not apply to any building if 
     paragraph (1) of subsection (h) does not apply to any portion 
     of the eligible basis of such building by reason of paragraph 
     (4) of such subsection.''.
       (b) Modification to Rehabilitation Requirements.--
       (1) In general.--Clause (ii) of section 42(e)(3)(A) is 
     amended--
       (A) by striking ``10 percent'' in subclause (I) and 
     inserting ``20 percent'', and
       (B) by striking ``$3,000'' in subclause (II) and inserting 
     ``$6,000''.
       (2) Inflation adjustment.--Paragraph (3) of section 42(e) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(D) Inflation adjustment.--In the case of any 
     expenditures which are treated under paragraph (4) as placed 
     in service during any calendar year after 2009, the $6,000 
     amount in subparagraph (A)(ii)(II) shall be increased by an 
     amount equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year by substituting 
     `calendar year 2008' for `calendar year 1992' in subparagraph 
     (B) thereof.
     Any increase under the preceding sentence which is not a 
     multiple of $100 shall be rounded to the nearest multiple of 
     $100.''.
       (3) Conforming amendment.--Subclause (II) of section 
     42(f)(5)(B)(ii) is amended by striking ``if subsection 
     (e)(3)(A)(ii)(II)'' and all that follows and inserting ``if 
     the dollar amount in effect under subsection 
     (e)(3)(A)(ii)(II) were two-thirds of such amount.''.
       (c) Increase in Allowable Community Service Facility Space 
     for Small Projects.--Clause (ii) of section 42(d)(4)(C) 
     (relating to limitation) is amended by striking ``10 percent 
     of the eligible basis of the qualified low-income housing 
     project of which it is a part. For purposes of'' and 
     inserting ``the sum of--

       ``(I) 25 percent of so much of the eligible basis of the 
     qualified low-income housing project of which it is a part as 
     does not exceed $15,000,000, plus
       ``(II) 10 percent of so much of the eligible basis of such 
     project as is not taken into account under subclause (I).

     For purposes of''.
       (d) Clarification of Treatment of Federal Grants.--
     Subparagraph (A) of section 42(d)(5) is amended to read as 
     follows:
       ``(A) Federal grants not taken into account in determining 
     eligible basis.--The eligible basis of a building shall not 
     include any costs financed with the proceeds of a federally 
     funded grant.''.
       (e) Simplification of Related Party Rules.--Clause (iii) of 
     section 42(d)(2)(D), before redesignation under subsection 
     (g)(2), is amended--
       (1) by striking all that precedes subclause (II),
       (2) by redesignating subclause (II) as clause (iii) and 
     moving such clause two ems to the left, and
       (3) by striking the last sentence thereof.
       (f) Exception to 10-Year Nonacquisition Period for Existing 
     Buildings Applicable to Federally- or State-Assisted 
     Buildings.--Paragraph (6) of section 42(d) is amended to read 
     as follows:
       ``(6) Credit allowable for certain buildings acquired 
     during 10-year period described in paragraph (2)(B)(ii).--
       ``(A) In general.--Paragraph (2)(B)(ii) shall not apply to 
     any federally- or State-assisted building.
       ``(B) Buildings acquired from insured depository 
     institutions in default.--On application by the taxpayer, the 
     Secretary may waive paragraph (2)(B)(ii) with respect to any 
     building acquired from an insured depository institution in 
     default (as defined in section 3 of the Federal Deposit 
     Insurance Act) or from a receiver or conservator of such an 
     institution.
       ``(C) Federally- or state-assisted building.--For purposes 
     of this paragraph--
       ``(i) Federally-assisted building.--The term `federally-
     assisted building' means any building which is substantially 
     assisted, financed, or operated under section 8 of the United 
     States Housing Act of 1937, section 221(d)(3), 221(d)(4), or 
     236 of the National Housing Act, section 515 of the Housing 
     Act of 1949, or any other housing program administered by the 
     Department of Housing and Urban Development or by the Rural 
     Housing Service of the Department of Agriculture.
       ``(ii) State-assisted building.--The term `State-assisted 
     building' means any building which is substantially assisted, 
     financed, or operated under any State law similar in purposes 
     to any of the laws referred to in clause (i).''.
       (g) Repeal of Deadwood.--
       (1) Clause (ii) of section 42(d)(2)(B) is amended by 
     striking ``the later of--'' and all that follows and 
     inserting ``the date the building was last placed in 
     service,''.
       (2) Subparagraph (D) of section 42(d)(2) is amended by 
     striking clause (i) and by redesignating clauses (ii) and 
     (iii) as clauses (i) and (ii), respectively.
       (3) Paragraph (5) of section 42(d) is amended by striking 
     subparagraph (B) and by redesignating subparagraph (C) as 
     subparagraph (B).
       (h) Effective Date.--
       (1) In general.--Except as otherwise provided in paragraph 
     (2), the amendments made by this subsection shall apply to 
     buildings placed in service after the date of the enactment 
     of this Act.
       (2) Rehabilitation requirements.--
       (A) In general.--The amendments made by subsection (b) 
     shall apply to buildings with respect to which housing credit 
     dollar amounts are allocated after the date of the enactment 
     of this Act.
       (B) Buildings not subject to allocation limits.--To the 
     extent paragraph (1) of section 42(h) of the Internal Revenue 
     Code of 1986 does not apply to any building by reason of 
     paragraph (4) thereof, the amendments made by subsection (b) 
     shall apply buildings financed with bonds issued pursuant to 
     allocations made after the date of the enactment of this Act.

     SEC. 3004. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME 
                   HOUSING TAX INCENTIVES.

       (a) Repeal Prohibition on Moderate Rehabilitation 
     Assistance.--Paragraph (2) of section 42(c) (defining 
     qualified low-income building) is amended by striking the 
     flush sentence at the end.
       (b) Modification of Time Limit for Incurring 10 Percent of 
     Project's Cost.--Clause (ii) of section 42(h)(1)(E) is 
     amended by striking ``(as of the later of the date which is 6 
     months after the date that the allocation was made or the 
     close of the calendar year in which the allocation is made)'' 
     and inserting ``(as of the date which is 1 year after the 
     date that the allocation was made)''.
       (c) Repeal of Bonding Requirement on Disposition of 
     Building.--Paragraph (6) of section 42(j) (relating to no 
     recapture on disposition of building (or interest therein) 
     where bond posted) is amended to read as follows:
       ``(6) No recapture on disposition of building which 
     continues in qualified use.--
       ``(A) In general.--The increase in tax under this 
     subsection shall not apply solely by reason of the 
     disposition of a building (or an interest therein) if it is 
     reasonably expected that such building will continue to be 
     operated as a qualified low-income building for the remaining 
     compliance period with respect to such building.
       ``(B) Statute of limitations.--If a building (or an 
     interest therein) is disposed of

[[Page 16022]]

     during any taxable year and there is any reduction in the 
     qualified basis of such building which results in an increase 
     in tax under this subsection for such taxable or any 
     subsequent taxable year, then--
       ``(i) the statutory period for the assessment of any 
     deficiency with respect to such increase in tax shall not 
     expire before the expiration of 3 years from the date the 
     Secretary is notified by the taxpayer (in such manner as the 
     Secretary may prescribe) of such reduction in qualified 
     basis, and
       ``(ii) such deficiency may be assessed before the 
     expiration of such 3-year period notwithstanding the 
     provisions of any other law or rule of law which would 
     otherwise prevent such assessment.''.
       (d) Energy Efficiency and Historic Nature Taken Into 
     Account in Making Allocations.--Subparagraph (C) of section 
     42(m)(1) (relating to plans for allocation of credit among 
     projects) is amended by striking ``and'' at the end of clause 
     (vii), by striking the period at the end of clause (viii) and 
     inserting a comma, and by adding at the end the following new 
     clauses:
       ``(ix) the energy efficiency of the project, and
       ``(x) the historic nature of the project.''.
       (e) Continued Eligibility for Students Who Received Foster 
     Care Assistance.--Clause (i) of section 42(i)(3)(D) is 
     amended by striking ``or'' at the end of subclause (I), by 
     redesignating subclause (II) as subclause (III), and by 
     inserting after subclause (I) the following new subclause:

       ``(II) a student who was previously under the care and 
     placement responsibility of the State agency responsible for 
     administering a plan under part B or part E of title IV of 
     the Social Security Act, or''.

       (f) Treatment of Rural Projects.--Section 42(i) (relating 
     to definitions and special rules) is amended by adding at the 
     end the following new paragraph:
       ``(8) Treatment of rural projects.--For purposes of this 
     section, in the case of any project for residential rental 
     property located in a rural area (as defined in section 520 
     of the Housing Act of 1949), any income limitation measured 
     by reference to area median gross income shall be measured by 
     reference to the greater of area median gross income or 
     national non-metropolitan median income. The preceding 
     sentence shall not apply with respect to any building if 
     paragraph (1) of section 42(h) does not apply by reason of 
     paragraph (4) thereof to any portion of the credit determined 
     under this section with respect to such building.''.
       (g) Clarification of General Public Use Requirement.--
     Subsection (g) of section 42 is amended by adding at the end 
     the following new paragraph:
       ``(9) Clarification of general public use requirement.--A 
     project does not fail to meet the general public use 
     requirement solely because of occupancy restrictions or 
     preferences that favor tenants--
       ``(A) with special needs,
       ``(B) who are members of a specified group under a Federal 
     program or State program or policy that supports housing for 
     such a specified group, or
       ``(C) who are involved in artistic or literary 
     activities.''.
       (h) GAO Study Regarding Modifications to Low-Income Housing 
     Tax Credit.--Not later than December 31, 2012, the 
     Comptroller General of the United States shall submit to 
     Congress a report which analyzes the implementation of the 
     modifications made by this subtitle to the low-income housing 
     tax credit under section 42 of the Internal Revenue Code of 
     1986. Such report shall include an analysis of the 
     distribution of credit allocations before and after the 
     effective date of such modifications.
       (i) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to buildings placed in service after the date of the 
     enactment of this Act.
       (2) Repeal of bonding requirement on disposition of 
     building.--The amendment made by subsection (c) shall apply 
     to--
       (A) interests in buildings disposed after the date of the 
     enactment of this Act, and
       (B) interests in buildings disposed of on or before such 
     date if--
       (i) it is reasonably expected that such building will 
     continue to be operated as a qualified low-income building 
     (within the meaning of section 42 of the Internal Revenue 
     Code of 1986) for the remaining compliance period (within the 
     meaning of such section) with respect to such building, and
       (ii) the taxpayer elects the application of this 
     subparagraph with respect to such disposition.
       (3) Energy efficiency and historic nature taken into 
     account in making allocations.--The amendments made by 
     subsection (d) shall apply to allocations made after December 
     31, 2008.
       (4) Continued eligibility for students who received foster 
     care assistance.--The amendments made by subsection (e) shall 
     apply to determinations made after the date of the enactment 
     of this Act.
       (5) Treatment of rural projects.--The amendment made by 
     subsection (f) shall apply to determinations made after the 
     date of the enactment of this Act.
       (6) Clarification of general public use requirement.--The 
     amendment made by subsection (g) shall apply to buildings 
     placed in service before, on, or after the date of the 
     enactment of this Act.

     SEC. 3005. TREATMENT OF MILITARY BASIC PAY.

       (a) In General.--Subparagraph (B) of section 142(d)(2) 
     (relating to income of individuals; area median gross income) 
     is amended--
       (1) by striking ``The income'' and inserting the following:
       ``(i) In general.--The income'', and
       (2) by adding at the end the following:
       ``(ii) Special rule relating to basic housing allowances.--
     For purposes of determining income under this subparagraph, 
     payments under section 403 of title 37, United States Code, 
     as a basic pay allowance for housing shall be disregarded 
     with respect to any qualified building.
       ``(iii) Qualified building.--For purposes of clause (ii), 
     the term `qualified building' means any building located--

       ``(I) in any county in which is located a qualified 
     military installation to which the number of members of the 
     Armed Forces of the United States assigned to units based out 
     of such qualified military installation, as of June 1, 2008, 
     has increased by not less than 20 percent, as compared to 
     such number on December 31, 2005, or
       ``(II) in any county adjacent to a county described in 
     subclause (I).

       ``(iv) Qualified military installation.--For purposes of 
     clause (iii), the term `qualified military installation' 
     means any military installation or facility the number of 
     members of the Armed Forces of the United States assigned to 
     which, as of June 1, 2008, is not less than 1,000.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to--
       (1) determinations made after the date of the enactment of 
     this Act and before January 1, 2012, in the case of any 
     qualified building (as defined in section 142(d)(2)(B)(iii) 
     of the Internal Revenue Code of 1986)--
       (A) with respect to which housing credit dollar amounts 
     have been allocated on or before the date of the enactment of 
     this Act, or
       (B) with respect to buildings placed in service before such 
     date of enactment, to the extent paragraph (1) of section 
     42(h) of such Code does not apply to such building by reason 
     of paragraph (4) thereof, but only with respect to bonds 
     issued before such date of enactment, and
       (2) determinations made after the date of enactment of this 
     Act, in the case of qualified buildings (as so defined)--
       (A) with respect to which housing credit dollar amounts are 
     allocated after the date of the enactment of this Act and 
     before January 1, 2012, or
       (B) with respect to which buildings placed in service after 
     the date of enactment of this Act and before January 1, 2012, 
     to the extent paragraph (1) of section 42(h) of such Code 
     does not apply to such building by reason of paragraph (4) 
     thereof, but only with respect to bonds issued after such 
     date of enactment and before January 1, 2012.

        PART II--MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES

     SEC. 3007. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING 
                   RESIDENTIAL RENTAL PROJECTS.

       (a) In General.--Subsection (i) of section 146 (relating to 
     treatment of refunding issues) is amended by adding at the 
     end the following new paragraph:
       ``(6) Treatment of certain residential rental project bonds 
     as refunding bonds irrespective of obligor.--
       ``(A) In general.--If, during the 6-month period beginning 
     on the date of a repayment of a loan financed by an issue 95 
     percent or more of the net proceeds of which are used to 
     provide projects described in section 142(d), such repayment 
     is used to provide a new loan for any project so described, 
     any bond which is issued to refinance such issue shall be 
     treated as a refunding issue to the extent the principal 
     amount of such refunding issue does not exceed the principal 
     amount of the bonds refunded.
       ``(B) Limitations.--Subparagraph (A) shall apply to only 
     one refunding of the original issue and only if--
       ``(i) the refunding issue is issued not later than 4 years 
     after the date on which the original issue was issued,
       ``(ii) the latest maturity date of any bond of the 
     refunding issue is not later than 34 years after the date on 
     which the refunded bond was issued, and
       ``(iii) the refunding issue is approved in accordance with 
     section 147(f) before the issuance of the refunding issue.''.
       (b) Low-Income Housing Credit.--Clause (ii) of section 
     42(h)(4)(A) is amended by inserting ``or such financing is 
     refunded as described in section 146(i)(6)'' before the 
     period at the end.
       (c) Effective Date.--The amendments made by this section 
     shall apply to repayments of loans received after the date of 
     the enactment of this Act.

     SEC. 3008. COORDINATION OF CERTAIN RULES APPLICABLE TO LOW-
                   INCOME HOUSING CREDIT AND QUALIFIED RESIDENTIAL 
                   RENTAL PROJECT EXEMPT FACILITY BONDS.

       (a) Determination of Next Available Unit.--Paragraph (3) of 
     section 142(d) (relating to current income determinations) is

[[Page 16023]]

     amended by adding at the end the following new subparagraph:
       ``(C) Exception for projects with respect to which 
     affordable housing credit is allowed.--In the case of a 
     project with respect to which credit is allowed under section 
     42, the second sentence of subparagraph (B) shall be applied 
     by substituting `building (within the meaning of section 42)' 
     for `project'.''.
       (b) Students.--Paragraph (2) of section 142(d) (relating to 
     definitions and special rules) is amended by adding at the 
     end the following new subparagraph:
       ``(C) Students.--Rules similar to the rules of 42(i)(3)(D) 
     shall apply for purposes of this subsection.''.
       (c) Single-Room Occupancy Units.--Paragraph (2) of section 
     142(d) (relating to definitions and special rules), as 
     amended by subsection (b), is amended by adding at the end 
     the following new subparagraph:
       ``(D) Single-room occupancy units.--A unit shall not fail 
     to be treated as a residential unit merely because such unit 
     is a single-room occupancy unit (within the meaning of 
     section 42).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to determinations of the status of qualified 
     residential rental projects for periods beginning after the 
     date of the enactment of this Act, with respect to bonds 
     issued before, on, or after such date.

  PART III--REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND TAX-
                          EXEMPT HOUSING BONDS

     SEC. 3009. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS 
                   INCOME.

       (a) In General.--Paragraph (2) of section 142(d), as 
     amended by section 3008, is amended by adding at the end the 
     following new subparagraph:
       ``(E) Hold harmless for reductions in area median gross 
     income.--
       ``(i) In general.--Any determination of area median gross 
     income under subparagraph (B) with respect to any project for 
     any calendar year after 2008 shall not be less than the area 
     median gross income determined under such subparagraph with 
     respect to such project for the calendar year preceding the 
     calendar year for which such determination is made.
       ``(ii) Special rule for certain census changes.--In the 
     case of a HUD hold harmless impacted project, the area median 
     gross income with respect to such project for any calendar 
     year after 2008 (hereafter in this clause referred to as the 
     current calendar year) shall be the greater of the amount 
     determined without regard to this clause or the sum of--

       ``(I) the area median gross income determined under the HUD 
     hold harmless policy with respect to such project for 
     calendar year 2008, plus
       ``(II) any increase in the area median gross income 
     determined under subparagraph (B) (determined without regard 
     to the HUD hold harmless policy and this subparagraph) with 
     respect to such project for the current calendar year over 
     the area median gross income (as so determined) with respect 
     to such project for calendar year 2008.

       ``(iii) HUD hold harmless policy.--The term `HUD hold 
     harmless policy' means the regulations under which a policy 
     similar to the rules of clause (i) applied to prevent a 
     change in the method of determining area median gross income 
     from resulting in a reduction in the area median gross income 
     determined with respect to certain projects in calendar years 
     2007 and 2008.
       ``(iv) HUD hold harmless impacted project.--The term `HUD 
     hold harmless impacted project' means any project with 
     respect to which area median gross income was determined 
     under subparagraph (B) for calendar year 2007 or 2008 if such 
     determination would have been less but for the HUD hold 
     harmless policy.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to determinations of area median gross income for 
     calendar years after 2008.

     SEC. 3010. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINATION 
                   REQUIREMENT WHERE DETERMINATION NOT RELEVANT.

       (a) In General.--Subparagraph (A) of section 142(d)(3) is 
     amended by adding at the end the following new sentence: 
     ``The preceding sentence shall not apply with respect to any 
     project for any year if during such year no residential unit 
     in the project is occupied by a new resident whose income 
     exceeds the applicable income limit.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to years ending after the date of the enactment 
     of this Act.

                   Subtitle B--Single Family Housing

     SEC. 3011. FIRST-TIME HOMEBUYER CREDIT.

       (a) In General.--Subpart C of part IV of subchapter A of 
     chapter 1 is amended by redesignating section 36 as section 
     37 and by inserting after section 35 the following new 
     section:

     ``SEC. 36. FIRST-TIME HOMEBUYER CREDIT.

       ``(a) Allowance of Credit.--In the case of an individual 
     who is a first-time homebuyer of a principal residence in the 
     United States during a taxable year, there shall be allowed 
     as a credit against the tax imposed by this subtitle for such 
     taxable year an amount equal to 10 percent of the purchase 
     price of the residence.
       ``(b) Limitations.--
       ``(1) Dollar limitation.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the credit allowed under subsection (a) shall not 
     exceed $7,500.
       ``(B) Married individuals filing separately.--In the case 
     of a married individual filing a separate return, 
     subparagraph (A) shall be applied by substituting `$3,750' 
     for `$7,500'.
       ``(C) Other individuals.--If two or more individuals who 
     are not married purchase a principal residence, the amount of 
     the credit allowed under subsection (a) shall be allocated 
     among such individuals in such manner as the Secretary may 
     prescribe, except that the total amount of the credits 
     allowed to all such individuals shall not exceed $7,500.
       ``(2) Limitation based on modified adjusted gross income.--
       ``(A) In general.--The amount allowable as a credit under 
     subsection (a) (determined without regard to this paragraph) 
     for the taxable year shall be reduced (but not below zero) by 
     the amount which bears the same ratio to the amount which is 
     so allowable as--
       ``(i) the excess (if any) of--

       ``(I) the taxpayer's modified adjusted gross income for 
     such taxable year, over
       ``(II) $75,000 ($150,000 in the case of a joint return), 
     bears to

       ``(ii) $20,000.
       ``(B) Modified adjusted gross income.--For purposes of 
     subparagraph (A), the term `modified adjusted gross income' 
     means the adjusted gross income of the taxpayer for the 
     taxable year increased by any amount excluded from gross 
     income under section 911, 931, or 933.
       ``(c) Definitions.--For purposes of this section--
       ``(1) First-time homebuyer.--The term `first-time 
     homebuyer' means any individual if such individual (and if 
     married, such individual's spouse) had no present ownership 
     interest in a principal residence during the 3-year period 
     ending on the date of the purchase of the principal residence 
     to which this section applies.
       ``(2) Principal residence.--The term `principal residence' 
     has the same meaning as when used in section 121.
       ``(3) Purchase.--
       ``(A) In general.--The term `purchase' means any 
     acquisition, but only if--
       ``(i) the property is not acquired from a person related to 
     the person acquiring such property, and
       ``(ii) the basis of the property in the hands of the person 
     acquiring such property is not determined--

       ``(I) in whole or in part by reference to the adjusted 
     basis of such property in the hands of the person from whom 
     acquired, or
       ``(II) under section 1014(a) (relating to property acquired 
     from a decedent).

       ``(B) Construction.--A residence which is constructed by 
     the taxpayer shall be treated as purchased by the taxpayer on 
     the date the taxpayer first occupies such residence.
       ``(4) Purchase price.--The term `purchase price' means the 
     adjusted basis of the principal residence on the date such 
     residence is purchased.
       ``(5) Related persons.--A person shall be treated as 
     related to another person if the relationship between such 
     persons would result in the disallowance of losses under 
     section 267 or 707(b) (but, in applying section 267(b) and 
     (c) for purposes of this section, paragraph (4) of section 
     267(c) shall be treated as providing that the family of an 
     individual shall include only his spouse, ancestors, and 
     lineal descendants).
       ``(d) Exceptions.--No credit under subsection (a) shall be 
     allowed to any taxpayer for any taxable year with respect to 
     the purchase of a residence if--
       ``(1) a credit under section 1400C (relating to first-time 
     homebuyer in the District of Columbia) is allowable to the 
     taxpayer (or the taxpayer's spouse) for such taxable year or 
     any prior taxable year,
       ``(2) the residence is financed by the proceeds of a 
     qualified mortgage issue the interest on which is exempt from 
     tax under section 103,
       ``(3) the taxpayer is a nonresident alien, or
       ``(4) the taxpayer disposes of such residence (or such 
     residence ceases to be the principal residence of the 
     taxpayer (and, if married, the taxpayer's spouse)) before the 
     close of such taxable year.
       ``(e) Reporting.--If the Secretary requires information 
     reporting under section 6045 by a person described in 
     subsection (e)(2) thereof to verify the eligibility of 
     taxpayers for the credit allowable by this section, the 
     exception provided by section 6045(e) shall not apply.
       ``(f) Recapture of Credit.--
       ``(1) In general.--Except as otherwise provided in this 
     subsection, if a credit under subsection (a) is allowed to a 
     taxpayer, the tax imposed by this chapter shall be increased 
     by 6\2/3\ percent of the amount of such credit for each 
     taxable year in the recapture period.
       ``(2) Acceleration of recapture.--If a taxpayer disposes of 
     the principal residence with respect to which a credit was 
     allowed under subsection (a) (or such residence ceases to be 
     the principal residence of the

[[Page 16024]]

     taxpayer (and, if married, the taxpayer's spouse)) before the 
     end of the recapture period--
       ``(A) the tax imposed by this chapter for the taxable year 
     of such disposition or cessation shall be increased by the 
     excess of the amount of the credit allowed over the amounts 
     of tax imposed by paragraph (1) for preceding taxable years, 
     and
       ``(B) paragraph (1) shall not apply with respect to such 
     credit for such taxable year or any subsequent taxable year.
       ``(3) Limitation based on gain.--In the case of the sale of 
     the principal residence to a person who is not related to the 
     taxpayer, the increase in tax determined under paragraph (2) 
     shall not exceed the amount of gain (if any) on such sale. 
     Solely for purposes of the preceding sentence, the adjusted 
     basis of such residence shall be reduced by the amount of the 
     credit allowed under subsection (a) to the extent not 
     previously recaptured under paragraph (1).
       ``(4) Exceptions.--
       ``(A) Death of taxpayer.--Paragraphs (1) and (2) shall not 
     apply to any taxable year ending after the date of the 
     taxpayer's death.
       ``(B) Involuntary conversion.--Paragraph (2) shall not 
     apply in the case of a residence which is compulsorily or 
     involuntarily converted (within the meaning of section 
     1033(a)) if the taxpayer acquires a new principal residence 
     during the 2-year period beginning on the date of the 
     disposition or cessation referred to in paragraph (2). 
     Paragraph (2) shall apply to such new principal residence 
     during the recapture period in the same manner as if such new 
     principal residence were the converted residence.
       ``(C) Transfers between spouses or incident to divorce.--In 
     the case of a transfer of a residence to which section 
     1041(a) applies--
       ``(i) paragraph (2) shall not apply to such transfer, and
       ``(ii) in the case of taxable years ending after such 
     transfer, paragraphs (1) and (2) shall apply to the 
     transferee in the same manner as if such transferee were the 
     transferor (and shall not apply to the transferor).
       ``(5) Joint returns.--In the case of a credit allowed under 
     subsection (a) with respect to a joint return, half of such 
     credit shall be treated as having been allowed to each 
     individual filing such return for purposes of this 
     subsection.
       ``(6) Return requirement.--If the tax imposed by this 
     chapter for the taxable year is increased under this 
     subsection, the taxpayer shall, notwithstanding section 6012, 
     be required to file a return with respect to the taxes 
     imposed under this subtitle.
       ``(7) Recapture period.--For purposes of this subsection, 
     the term `recapture period' means the 15 taxable years 
     beginning with the second taxable year following the taxable 
     year in which the purchase of the principal residence for 
     which a credit is allowed under subsection (a) was made.
       ``(g) Election to Treat Purchase in Prior Year.--In the 
     case of a purchase of a principal residence after December 
     31, 2008, and before July 1, 2009, a taxpayer may elect to 
     treat such purchase as made on December 31, 2008, for 
     purposes of this section (other than subsection (c)).
       ``(h) Application of Section.--This section shall only 
     apply to a principal residence purchased by the taxpayer on 
     or after April 9, 2008, and before July 1, 2009.''.
       (b) Conforming Amendments.--
       (1) Section 26(b)(2) is amended by striking ``and'' at the 
     end of subparagraph (U), by striking the period and inserting 
     ``, and'' and the end of subparagraph (V), and by inserting 
     after subparagraph (V) the following new subparagraph:
       ``(W) section 36(f) (relating to recapture of homebuyer 
     credit).''.
       (2) Section 6211(b)(4)(A) is amended by striking ``34,'' 
     and all that follows through ``6428'' and inserting ``34, 35, 
     36, 53(e), and 6428''.
       (3) Section 1324(b)(2) of title 31, United States Code, is 
     amended by inserting ``36,'' after ``35,''.
       (4) The table of sections for subpart C of part IV of 
     subchapter A of chapter 1 is amended by redesignating the 
     item relating to section 36 as an item relating to section 37 
     and by inserting before such item the following new item:

``Sec. 36. First-time homebuyer credit.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to residences purchased on or after April 9, 
     2008, in taxable years ending on or after such date.

     SEC. 3012. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY 
                   TAXES FOR NONITEMIZERS.

       (a) In General.--Section 63(c)(1) (defining standard 
     deduction) is amended by striking ``and'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) in the case of any taxable year beginning in 2008, 
     the real property tax deduction.''.
       (b) Definition.--Section 63(c) is amended by adding at the 
     end the following new paragraph:
       ``(7) Real property tax deduction.--For purposes of 
     paragraph (1), the real property tax deduction is the lesser 
     of--
       ``(A) the amount allowable as a deduction under this 
     chapter for State and local taxes described in section 
     164(a)(1), or
       ``(B) $500 ($1,000 in the case of a joint return).
     Any taxes taken into account under section 62(a) shall not be 
     taken into account under this paragraph.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

                     Subtitle C--General Provisions

     SEC. 3021. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING 
                   BOND RULES.

       (a) Temporary Increase in Volume Cap.--
       (1) In general.--Subsection (d) of section 146 is amended 
     by adding at the end the following new paragraph:
       ``(5) Increase and set aside for housing bonds for 2008.--
       ``(A) Increase for 2008.--In the case of calendar year 
     2008, the State ceiling for each State shall be increased by 
     an amount equal to $11,000,000,000 multiplied by a fraction--
       ``(i) the numerator of which is the State ceiling 
     applicable to the State for calendar year 2008, determined 
     without regard to this paragraph, and
       ``(ii) the denominator of which is the sum of the State 
     ceilings determined under clause (i) for all States.
       ``(B) Set aside.--
       ``(i) In general.--Any amount of the State ceiling for any 
     State which is attributable to an increase under this 
     paragraph shall be allocated solely for one or more qualified 
     housing issues.
       ``(ii) Qualified housing issue.--For purposes of this 
     paragraph, the term `qualified housing issue' means--

       ``(I) an issue described in section 142(a)(7) (relating to 
     qualified residential rental projects), or
       ``(II) a qualified mortgage issue (determined by 
     substituting `12-month period' for `42-month period' each 
     place it appears in section 143(a)(2)(D)(i)).''.

       (2) Carryforward of unused limitations.--Subsection (f) of 
     section 146 is amended by adding at the end the following new 
     paragraph:
       ``(6) Special rules for increased volume cap under 
     subsection (d)(5).--No amount which is attributable to the 
     increase under subsection (d)(5) may be used--
       ``(A) for any issue other than a qualified housing issue 
     (as defined in subsection (d)(5)), or
       ``(B) to issue any bond after calendar year 2010.''.
       (b) Temporary Rule for Use of Qualified Mortgage Bonds 
     Proceeds for Subprime Refinancing Loans.--
       (1) In general.--Section 143(k) (relating to other 
     definitions and special rules) is amended by adding at the 
     end the following new paragraph:
       ``(12) Special rules for subprime refinancings.--
       ``(A) In general.--Notwithstanding the requirements of 
     subsection (i)(1), the proceeds of a qualified mortgage issue 
     may be used to refinance a mortgage on a residence which was 
     originally financed by the mortgagor through a qualified 
     subprime loan.
       ``(B) Special rules.--In applying subparagraph (A) to any 
     refinancing--
       ``(i) subsection (a)(2)(D)(i) shall be applied by 
     substituting `12-month period' for `42-month period' each 
     place it appears,
       ``(ii) subsection (d) (relating to 3-year requirement) 
     shall not apply, and
       ``(iii) subsection (e) (relating to purchase price 
     requirement) shall be applied by using the market value of 
     the residence at the time of refinancing in lieu of the 
     acquisition cost.
       ``(C) Qualified subprime loan.--The term `qualified 
     subprime loan' means an adjustable rate single-family 
     residential mortgage loan made after December 31, 2001, and 
     before January 1, 2008, that the bond issuer determines would 
     be reasonably likely to cause financial hardship to the 
     borrower if not refinanced.
       ``(D) Termination.--This paragraph shall not apply to any 
     bonds issued after December 31, 2010.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 3022. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON 
                   TAX-EXEMPT HOUSING BONDS, LOW-INCOME HOUSING 
                   TAX CREDIT, AND REHABILITATION CREDIT.

       (a) Tax-Exempt Interest on Certain Housing Bonds Exempted 
     From Alternative Minimum Tax.--
       (1) In general.--Subparagraph (C) of section 57(a)(5) 
     (relating to specified private activity bonds) is amended by 
     redesignating clauses (iii) and (iv) as clauses (iv) and (v), 
     respectively, and by inserting after clause (ii) the 
     following new clause:
       ``(iii) Exception for certain housing bonds.--For purposes 
     of clause (i), the term `private activity bond' shall not 
     include any bond issued after the date of the enactment of 
     this clause if such bond is--

       ``(I) an exempt facility bond issued as part of an issue 95 
     percent or more of the net proceeds of which are to be used 
     to provide qualified residential rental projects (as defined 
     in section 142(d)),
       ``(II) a qualified mortgage bond (as defined in section 
     143(a)), or

[[Page 16025]]

       ``(III) a qualified veterans' mortgage bond (as defined in 
     section 143(b)).

     The preceding sentence shall not apply to any refunding bond 
     unless such preceding sentence applied to the refunded bond 
     (or in the case of a series of refundings, the original 
     bond).''.
       (2) No adjustment to adjusted current earnings.--
     Subparagraph (B) of section 56(g)(4) is amended by adding at 
     the end the following new clause:
       ``(iii) Tax exempt interest on certain housing bonds.--
     Clause (i) shall not apply in the case of any interest on a 
     bond to which section 57(a)(5)(C)(iii) applies.''.
       (b) Allowance of Low-Income Housing Credit Against 
     Alternative Minimum Tax.--Subparagraph (B) of section 
     38(c)(4) (relating to specified credits) is amended by 
     redesignating clauses (ii) through (iv) as clauses (iii) 
     through (v) and inserting after clause (i) the following new 
     clause:
       ``(ii) the credit determined under section 42 to the extent 
     attributable to buildings placed in service after December 
     31, 2007,''.
       (c) Allowance of Rehabilitation Credit Against Alternative 
     Minimum Tax.--Subparagraph (B) of section 38(c)(4), as 
     amended by subsection (b), is amended by striking ``and'' at 
     the end of clause (iv), by redesignating clause (v) as clause 
     (vi), and by inserting after clause (iv) the following new 
     clause:
       ``(v) the credit determined under section 47 to the extent 
     attributable to qualified rehabilitation expenditures 
     properly taken into account for periods after December 31, 
     2007, and''.
       (d) Effective Date.--
       (1) Housing bonds.--The amendments made by subsection (a) 
     shall apply to bonds issued after the date of the enactment 
     of this Act.
       (2) Low income housing credit.--The amendments made by 
     subsection (b) shall apply to credits determined under 
     section 42 of the Internal Revenue Code of 1986 to the extent 
     attributable to buildings placed in service after December 
     31, 2007.
       (3) Rehabilitation credit.--The amendments made by 
     subsection (c) shall apply to credits determined under 
     section 47 of the Internal Revenue Code of 1986 to the extent 
     attributable to qualified rehabilitation expenditures 
     properly taken into account for periods after December 31, 
     2007.

     SEC. 3023. BONDS GUARANTEED BY FEDERAL HOME LOAN BANKS 
                   ELIGIBLE FOR TREATMENT AS TAX-EXEMPT BONDS.

       (a) In General.--Subparagraph (A) of section 149(b)(3) 
     (relating to exceptions for certain insurance programs) is 
     amended by striking ``or'' at the end of clause (ii), by 
     striking the period at the end of clause (iii) and inserting 
     ``, or'' and by adding at the end the following new clause:
       ``(iv) subject to subparagraph (E), any guarantee by a 
     Federal home loan bank made in connection with the original 
     issuance of a bond during the period beginning on the date of 
     the enactment of this clause and ending on December 31, 2010 
     (or a renewal or extension of a guarantee so made).''.
       (b) Safety and Soundness Requirements.--Paragraph (3) of 
     section 149(b) is amended by adding at the end the following 
     new subparagraph:
       ``(E) Safety and soundness requirements for federal home 
     loan banks.--Clause (iv) of subparagraph (A) shall not apply 
     to any guarantee by a Federal home loan bank unless such bank 
     meets safety and soundness collateral requirements for such 
     guarantees which are at least as stringent as such 
     requirements which apply under regulations applicable to such 
     guarantees by Federal home loan banks as in effect on April 
     9, 2008.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to guarantees made after the date of the 
     enactment of this Act.

     SEC. 3024. MODIFICATION OF RULES PERTAINING TO FIRPTA 
                   NONFOREIGN AFFIDAVITS.

       (a) In General.--Subsection (b) of section 1445 (relating 
     to exemptions) is amended by adding at the end the following:
       ``(9) Alternative procedure for furnishing nonforeign 
     affidavit.--For purposes of paragraphs (2) and (7)--
       ``(A) In general.--Paragraph (2) shall be treated as 
     applying to a transaction if, in connection with a 
     disposition of a United States real property interest--
       ``(i) the affidavit specified in paragraph (2) is furnished 
     to a qualified substitute, and
       ``(ii) the qualified substitute furnishes a statement to 
     the transferee stating, under penalty of perjury, that the 
     qualified substitute has such affidavit in his possession.
       ``(B) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this paragraph.''.
       (b) Qualified Substitute.--Subsection (f) of section 1445 
     (relating to definitions) is amended by adding at the end the 
     following new paragraph:
       ``(6) Qualified substitute.--The term `qualified 
     substitute' means, with respect to a disposition of a United 
     States real property interest--
       ``(A) the person (including any attorney or title company) 
     responsible for closing the transaction, other than the 
     transferor's agent, and
       ``(B) the transferee's agent.''.
       (c) Exemption Not To Apply if Knowledge or Notice That 
     Affidavit or Statement Is False.--
       (1) In general.--Paragraph (7) of section 1445(b) (relating 
     to special rules for paragraphs (2) and (3)) is amended to 
     read as follows:
       ``(7) Special rules for paragraphs (2), (3), and (9).--
     Paragraph (2), (3), or (9) (as the case may be) shall not 
     apply to any disposition--
       ``(A) if--
       ``(i) the transferee or qualified substitute has actual 
     knowledge that the affidavit referred to in such paragraph, 
     or the statement referred to in paragraph (9)(A)(ii), is 
     false, or
       ``(ii) the transferee or qualified substitute receives a 
     notice (as described in subsection (d)) from a transferor's 
     agent, transferee's agent, or qualified substitute that such 
     affidavit or statement is false, or
       ``(B) if the Secretary by regulations requires the 
     transferee or qualified substitute to furnish a copy of such 
     affidavit or statement to the Secretary and the transferee or 
     qualified substitute fails to furnish a copy of such 
     affidavit or statement to the Secretary at such time and in 
     such manner as required by such regulations.''.
       (2) Liability.--
       (A) Notice.--Paragraph (1) of section 1445(d) (relating to 
     notice of false affidavit; foreign corporations) is amended 
     to read as follows:
       ``(1) Notice of false affidavit; foreign corporations.--
     If--
       ``(A) the transferor furnishes the transferee or qualified 
     substitute an affidavit described in paragraph (2) of 
     subsection (b) or a domestic corporation furnishes the 
     transferee an affidavit described in paragraph (3) of 
     subsection (b), and
       ``(B) in the case of--
       ``(i) any transferor's agent--

       ``(I) such agent has actual knowledge that such affidavit 
     is false, or
       ``(II) in the case of an affidavit described in subsection 
     (b)(2) furnished by a corporation, such corporation is a 
     foreign corporation, or

       ``(ii) any transferee's agent or qualified substitute, such 
     agent or substitute has actual knowledge that such affidavit 
     is false,
     such agent or qualified substitute shall so notify the 
     transferee at such time and in such manner as the Secretary 
     shall require by regulations.''.
       (B) Failure to furnish notice.--Paragraph (2) of section 
     1445(d) (relating to failure to furnish notice) is amended to 
     read as follows:
       ``(2) Failure to furnish notice.--
       ``(A) In general.--If any transferor's agent, transferee's 
     agent, or qualified substitute is required by paragraph (1) 
     to furnish notice, but fails to furnish such notice at such 
     time or times and in such manner as may be required by 
     regulations, such agent or substitute shall have the same 
     duty to deduct and withhold that the transferee would have 
     had if such agent or substitute had complied with paragraph 
     (1).
       ``(B) Liability limited to amount of compensation.--An 
     agent's or substitute's liability under subparagraph (A) 
     shall be limited to the amount of compensation the agent or 
     substitute derives from the transaction.''.
       (C) Conforming amendment.--The heading for section 1445(d) 
     is amended by striking ``or Transferee's Agents'' and 
     inserting ``, Transferee's Agents, or Qualified 
     Substitutes''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to dispositions of United States real property 
     interests after the date of the enactment of this Act.

     SEC. 3025. MODIFICATION OF DEFINITION OF TAX-EXEMPT USE 
                   PROPERTY FOR PURPOSES OF THE REHABILITATION 
                   CREDIT.

       (a) In General.--Subclause (I) of section 47(c)(2)(B)(v) is 
     amended by striking ``section 168(h)'' and inserting 
     ``section 168(h), except that `50 percent' shall be 
     substituted for `35 percent' in paragraph (1)(B)(iii) 
     thereof''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to expenditures properly taken into account for 
     periods after December 31, 2007.

     SEC. 3026. EXTENSION OF SPECIAL RULE FOR MORTGAGE REVENUE 
                   BONDS FOR RESIDENCES LOCATED IN DISASTER AREAS.

       (a) In General.--Paragraph (11) of section 143(k) is 
     amended--
       (1) by striking ``December 31, 1996'' and inserting ``May 
     1, 2008'', and
       (2) by striking ``January 1, 1999'' and inserting ``January 
     1, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after May 1, 2008.

     SEC. 3027. TRANSFER OF FUNDS APPROPRIATED TO CARRY OUT 2008 
                   RECOVERY REBATES FOR INDIVIDUALS.

       Of the funds made available by section 101(e)(1)(A) of the 
     Economic Stimulus Act of 2008 (Public Law 110-185), the 
     Secretary of the Treasury may transfer funds among the 
     accounts specified in such section to carry out section 6428 
     of the Internal Revenue Code of 1986. The Secretary shall 
     provide advance notification of any such transfer to the 
     Committees on Appropriations of the House of Representatives 
     and the Senate, and any transfer greater than $5,000,000 
     shall be subject to the approval of such Committees.

[[Page 16026]]



       TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS

      Subtitle A--Foreign Currency and Other Qualified Activities

     SEC. 3031. REVISIONS TO REIT INCOME TESTS.

       (a) Foreign Currency Gains Not Gross Income in Applying 
     REIT Income Tests.--Section 856 (defining real estate 
     investment trust) is amended by adding at the end the 
     following new subsection:
       ``(n) Rules Regarding Foreign Currency Transactions.--
       ``(1) In general.--For purposes of this part--
       ``(A) passive foreign exchange gain for any taxable year 
     shall not constitute gross income for purposes of subsection 
     (c)(2), and
       ``(B) real estate foreign exchange gain for any taxable 
     year shall not constitute gross income for purposes of 
     subsection (c)(3).
       ``(2) Real estate foreign exchange gain.--For purposes of 
     this subsection, the term `real estate foreign exchange gain' 
     means--
       ``(A) foreign currency gain (as defined in section 
     988(b)(1)) which is attributable to--
       ``(i) any item of income or gain described in subsection 
     (c)(3),
       ``(ii) the acquisition or ownership of obligations secured 
     by mortgages on real property or on interests in real 
     property (other than foreign currency gain attributable to 
     any item of income or gain described in clause (i)), or
       ``(iii) becoming or being the obligor under obligations 
     secured by mortgages on real property or on interests in real 
     property (other than foreign currency gain attributable to 
     any item of income or gain described in clause (i)),
       ``(B) section 987 gain attributable to a qualified business 
     unit (as defined by section 989) of the real estate 
     investment trust, but only if such qualified business unit 
     meets the requirements under--
       ``(i) subsection (c)(3) for the taxable year, and
       ``(ii) subsection (c)(4)(A) at the close of each quarter 
     that the real estate investment trust has directly or 
     indirectly held the qualified business unit, and
       ``(C) any other foreign currency gain as determined by the 
     Secretary.
       ``(3) Passive foreign exchange gain.--For purposes of this 
     subsection, the term `passive foreign exchange gain' means--
       ``(A) real estate foreign exchange gain,
       ``(B) foreign currency gain (as defined in section 
     988(b)(1)) which is not described in subparagraph (A) and 
     which is attributable to--
       ``(i) any item of income or gain described in subsection 
     (c)(2),
       ``(ii) the acquisition or ownership of obligations (other 
     than foreign currency gain attributable to any item of income 
     or gain described in clause (i)), or
       ``(iii) becoming or being the obligor under obligations 
     (other than foreign currency gain attributable to any item of 
     income or gain described in clause (i)), and
       ``(C) any other foreign currency gain as determined by the 
     Secretary.
       ``(4) Exception for income from substantial and regular 
     trading.--Notwithstanding this subsection or any other 
     provision of this part, any section 988 gain derived by a 
     corporation, trust, or association from dealing, or engaging 
     in substantial and regular trading, in securities (as defined 
     in section 475(c)(2)) shall constitute gross income which 
     does not qualify under paragraph (2) or (3) of subsection 
     (c). This paragraph shall not apply to income which does not 
     constitute gross income by reason of subsection (c)(5)(G).''.
       (b) Addition to REIT Hedging Rule.--Subparagraph (G) of 
     section 856(c)(5) is amended to read as follows:
       ``(G) Treatment of certain hedging instruments.--Except to 
     the extent as determined by the Secretary--
       ``(i) any income of a real estate investment trust from a 
     hedging transaction (as defined in clause (ii) or (iii) of 
     section 1221(b)(2)(A)) which is clearly identified pursuant 
     to section 1221(a)(7), including gain from the sale or 
     disposition of such a transaction, shall not constitute gross 
     income under paragraphs (2) and (3) to the extent that the 
     transaction hedges any indebtedness incurred or to be 
     incurred by the trust to acquire or carry real estate assets, 
     and
       ``(ii) any income of a real estate investment trust from a 
     transaction entered into by the trust primarily to manage 
     risk of currency fluctuations with respect to any item of 
     income or gain described in paragraph (2) or (3) (or any 
     property which generates such income or gain), including gain 
     from the termination of such a transaction, shall not 
     constitute gross income under paragraphs (2) and (3), but 
     only if such transaction is clearly identified as such before 
     the close of the day on which it was acquired, originated, or 
     entered into (or such other time as the Secretary may 
     prescribe).''.
       (c) Authority to Exclude Items of Income From REIT Income 
     Tests.--Section 856(c)(5) is amended by adding at the end the 
     following new subparagraph:
       ``(J) Secretarial authority to exclude other items of 
     income.--To the extent necessary to carry out the purposes of 
     this part, the Secretary is authorized to determine, solely 
     for purposes of this part, whether any item of income or gain 
     which--
       ``(i) does not otherwise qualify under paragraph (2) or (3) 
     may be considered as not constituting gross income for 
     purposes of paragraphs (2) or (3), or
       ``(ii) otherwise constitutes gross income not qualifying 
     under paragraph (2) or (3) may be considered as gross income 
     which qualifies under paragraph (2) or (3).''.

     SEC. 3032. REVISIONS TO REIT ASSET TESTS.

       (a) Clarification of Valuation Test.--The first sentence in 
     the matter following section 856(c)(4)(B)(iii)(III) is 
     amended by inserting ``(including a discrepancy caused solely 
     by the change in the foreign currency exchange rate used to 
     value a foreign asset)'' after ``such requirements''.
       (b) Clarification of Permissible Asset Category.--Section 
     856(c)(5), as amended by section 3031(c), is amended by 
     adding at the end the following new subparagraph:
       ``(K) Cash.--If the real estate investment trust or its 
     qualified business unit (as defined in section 989) uses any 
     foreign currency as its functional currency (as defined in 
     section 985(b)), the term `cash' includes such foreign 
     currency but only to the extent such foreign currency--
       ``(i) is held for use in the normal course of the 
     activities of the trust or qualified business unit which give 
     rise to items of income or gain described in paragraph (2) or 
     (3) of subsection (c) or are directly related to acquiring or 
     holding assets described in subsection (c)(4), and
       ``(ii) is not held in connection with an activity described 
     in subsection (n)(4).''.

     SEC. 3033. CONFORMING FOREIGN CURRENCY REVISIONS.

       (a) Net Income From Foreclosure Property.--Clause (i) of 
     section 857(b)(4)(B) is amended to read as follows:
       ``(i) gain (including any foreign currency gain, as defined 
     in section 988(b)(1)) from the sale or other disposition of 
     foreclosure property described in section 1221(a)(1) and the 
     gross income for the taxable year derived from foreclosure 
     property (as defined in section 856(e)), but only to the 
     extent such gross income is not described in (or, in the case 
     of foreign currency gain, not attributable to gross income 
     described in) section 856(c)(3) other than subparagraph (F) 
     thereof, over''.
       (b) Net Income From Prohibited Transactions.--Clause (i) of 
     section 857(b)(6)(B) is amended to read as follows:
       ``(i) the term `net income derived from prohibited 
     transactions' means the excess of the gain (including any 
     foreign currency gain, as defined in section 988(b)(1)) from 
     prohibited transactions over the deductions (including any 
     foreign currency loss, as defined in section 988(b)(2)) 
     allowed by this chapter which are directly connected with 
     prohibited transactions;''.

                 Subtitle B--Taxable REIT Subsidiaries

     SEC. 3041. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.

       Section 856(c)(4)(B)(ii) is amended--
       (1) by striking ``20 percent'' and inserting ``25 
     percent'', and
       (2) by striking ``REIT subsidiaries'' and all that follows, 
     and inserting ``REIT subsidiaries,''.

                        Subtitle C--Dealer Sales

     SEC. 3051. HOLDING PERIOD UNDER SAFE HARBOR.

       (a) In General.--Section 857(b)(6) (relating to income from 
     prohibited transactions) is amended--
       (1) by striking ``4 years'' in subparagraphs (C)(i), 
     (C)(iv), and (D)(i) and inserting ``2 years'',
       (2) by striking ``4-year period'' in subparagraphs (C)(ii), 
     (D)(ii), and (D)(iii) and inserting ``2-year period'', and
       (3) by striking ``real estate asset''and all that follows 
     through ``if'' in the matter preceding clause (i) of 
     subparagraphs (C) and (D), respectively, and inserting ``real 
     estate asset (as defined in section 856(c)(5)(B)) and which 
     is described in section 1221(a)(1) if''.
       (b) Retention of Existing Law.--Section 857(b)(6) is 
     amended--
       (1) by striking subparagraph (G) and redesignating 
     subparagraphs (H) and (I) as subparagraphs (G) and (H), 
     respectively, and
       (2) in subparagraph (G), as so redesignated, by adding at 
     the end the following: ``For purposes of the preceding 
     sentence, the reference to subparagraph (D) shall be a 
     reference to such subparagraph as in effect on the day before 
     the enactment of the Housing Assistance Tax Act of 2008, as 
     modified by subparagraph (G) as so in effect.''.

     SEC. 3052. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.

       Section 857(b)(6) is amended--
       (1) by striking the semicolon at the end of subparagraph 
     (C)(iii) and inserting ``, or (III) the fair market value of 
     property (other than sales of foreclosure property or sales 
     to which section 1033 applies) sold during the taxable year 
     does not exceed 10 percent of the fair market value of all of 
     the assets of the trust as of the beginning of the taxable 
     year;'', and
       (2) by adding ``or'' at the end of subclause (II) of 
     subparagraph (D)(iv) and by adding at the end of such 
     subparagraph the following new subclause:
       ``(III) the fair market value of property (other than sales 
     of foreclosure property or

[[Page 16027]]

     sales to which section 1033 applies) sold during the taxable 
     year does not exceed 10 percent of the fair market value of 
     all of the assets of the trust as of the beginning of the 
     taxable year,''.

                     Subtitle D--Health Care REITs

     SEC. 3061. CONFORMITY FOR HEALTH CARE FACILITIES.

       (a) Related Party Rentals.--Subparagraph (B) of section 
     856(d)(8) (relating to special rule for taxable REIT 
     subsidiaries) is amended to read as follows:
       ``(B) Exception for certain lodging facilities and health 
     care property.--The requirements of this subparagraph are met 
     with respect to an interest in real property which is a 
     qualified lodging facility (as defined in paragraph (9)(D)) 
     or a qualified health care property (as defined in subsection 
     (e)(6)(D)(i)) leased by the trust to a taxable REIT 
     subsidiary of the trust if the property is operated on behalf 
     of such subsidiary by a person who is an eligible independent 
     contractor. For purposes of this section, a taxable REIT 
     subsidiary is not considered to be operating or managing a 
     qualified health care property or qualified lodging facility 
     solely because it--
       ``(i) directly or indirectly possesses a license, permit, 
     or similar instrument enabling it to do so, or
       ``(ii) employs individuals working at such facility or 
     property located outside the United States, but only if an 
     eligible independent contractor is responsible for the daily 
     supervision and direction of such individuals on behalf of 
     the taxable REIT subsidiary pursuant to a management 
     agreement or similar service contract.''.
       (b) Eligible Independent Contractor.--Subparagraphs (A) and 
     (B) of section 856(d)(9) (relating to eligible independent 
     contractor) are amended to read as follows:
       ``(A) In general.--The term `eligible independent 
     contractor' means, with respect to any qualified lodging 
     facility or qualified health care property (as defined in 
     subsection (e)(6)(D)(i)), any independent contractor if, at 
     the time such contractor enters into a management agreement 
     or other similar service contract with the taxable REIT 
     subsidiary to operate such qualified lodging facility or 
     qualified health care property, such contractor (or any 
     related person) is actively engaged in the trade or business 
     of operating qualified lodging facilities or qualified health 
     care properties, respectively, for any person who is not a 
     related person with respect to the real estate investment 
     trust or the taxable REIT subsidiary.
       ``(B) Special rules.--Solely for purposes of this paragraph 
     and paragraph (8)(B), a person shall not fail to be treated 
     as an independent contractor with respect to any qualified 
     lodging facility or qualified health care property (as so 
     defined) by reason of the following:
       ``(i) The taxable REIT subsidiary bears the expenses for 
     the operation of such qualified lodging facility or qualified 
     health care property pursuant to the management agreement or 
     other similar service contract.
       ``(ii) The taxable REIT subsidiary receives the revenues 
     from the operation of such qualified lodging facility or 
     qualified health care property, net of expenses for such 
     operation and fees payable to the operator pursuant to such 
     agreement or contract.
       ``(iii) The real estate investment trust receives income 
     from such person with respect to another property that is 
     attributable to a lease of such other property to such person 
     that was in effect as of the later of--

       ``(I) January 1, 1999, or
       ``(II) the earliest date that any taxable REIT subsidiary 
     of such trust entered into a management agreement or other 
     similar service contract with such person with respect to 
     such qualified lodging facility or qualified health care 
     property.''.

       (c) Taxable Reit Subsidiaries.--The last sentence of 
     section 856(l)(3) is amended--
       (1) by inserting ``or a health care facility'' after ``a 
     lodging facility'', and
       (2) by inserting ``or health care facility'' after ``such 
     lodging facility''.

                      Subtitle E--Effective Dates

     SEC. 3071. EFFECTIVE DATES.

       (a) In General.--Except as otherwise provided in this 
     section, the amendments made by this title shall apply to 
     taxable years beginning after the date of the enactment of 
     this Act.
       (b) REIT Income Tests.--
       (1) The amendments made by section 3031(a) and (c) shall 
     apply to gains and items of income recognized after the date 
     of the enactment of this Act.
       (2) The amendment made by section 3031(b) shall apply to 
     transactions entered into after the date of the enactment of 
     this Act.
       (c) Conforming Foreign Currency Revisions.--
       (1) The amendment made by section 3033(a) shall apply to 
     gains recognized after the date of the enactment of this Act.
       (2) The amendment made by section 3033(b) shall apply to 
     gains and deductions recognized after the date of the 
     enactment of this Act.
       (d) Dealer Sales.--The amendments made by subtitle C shall 
     apply to sales made after the date of the enactment of this 
     Act.

                     TITLE III--REVENUE PROVISIONS

                     Subtitle A--General Provisions

     SEC. 3081. ELECTION TO ACCELERATE THE AMT AND RESEARCH 
                   CREDITS IN LIEU OF BONUS DEPRECIATION.

       (a) In General.--Section 168(k) is amended by adding at the 
     end the following new paragraph:
       ``(4) Election to accelerate the amt and research credits 
     in lieu of bonus depreciation.--
       ``(A) In general.--If a corporation elects to have this 
     paragraph apply for the first taxable year of the taxpayer 
     ending after March 31, 2008, in the case of such taxable year 
     and each subsequent taxable year--
       ``(i) paragraph (1) shall not apply to any eligible 
     qualified property placed in service by the taxpayer,
       ``(ii) the applicable depreciation method used under this 
     section with respect to such property shall be the straight 
     line method, and
       ``(iii) each of the limitations described in subparagraph 
     (B) for any such taxable year shall be increased by the bonus 
     depreciation amount which is--

       ``(I) determined for such taxable year under subparagraph 
     (C), and
       ``(II) allocated to such limitation under subparagraph (E).

       ``(B) Limitations to be increased.--The limitations 
     described in this subparagraph are--
       ``(i) the limitation imposed by section 38(c), and
       ``(ii) the limitation imposed by section 53(c).
       ``(C) Bonus depreciation amount.--For purposes of this 
     paragraph--
       ``(i) In general.--The bonus depreciation amount for any 
     taxable year is an amount equal to 20 percent of the excess 
     (if any) of--

       ``(I) the aggregate amount of depreciation which would be 
     allowed under this section for eligible qualified property 
     placed in service by the taxpayer during such taxable year if 
     paragraph (1) applied to all such property, over
       ``(II) the aggregate amount of depreciation which would be 
     allowed under this section for eligible qualified property 
     placed in service by the taxpayer during such taxable year if 
     paragraph (1) did not apply to any such property.

     The aggregate amounts determined under subclauses (I) and 
     (II) shall be determined without regard to any election made 
     under subsection (b)(2)(C), (b)(3)(D), or (g)(7) and without 
     regard to subparagraph (A)(ii).
       ``(ii) Maximum amount.--The bonus depreciation amount for 
     any taxable year shall not exceed the maximum increase amount 
     under clause (iii), reduced (but not below zero) by the sum 
     of the bonus depreciation amounts for all preceding taxable 
     years.
       ``(iii) Maximum increase amount.--For purposes of clause 
     (ii), the term `maximum increase amount' means, with respect 
     to any corporation, the lesser of--

       ``(I) $30,000,000, or
       ``(II) 6 percent of the sum of the business credit increase 
     amount, and the AMT credit increase amount, determined with 
     respect to such corporation under subparagraph (E).

       ``(iv) Aggregation rule.--All corporations which are 
     treated as a single employer under section 52(a) shall be 
     treated--

       ``(I) as 1 taxpayer for purposes of this paragraph, and
       ``(II) as having elected the application of this paragraph 
     if any such corporation so elects.

       ``(D) Eligible qualified property.--For purposes of this 
     paragraph, the term `eligible qualified property' means 
     qualified property under paragraph (2), except that in 
     applying paragraph (2) for purposes of this paragraph--
       ``(i) `March 31, 2008' shall be substituted for `December 
     31, 2007' each place it appears in subparagraph (A) and 
     clauses (i) and (ii) of subparagraph (E) thereof, and
       ``(ii) only adjusted basis attributable to manufacture, 
     construction, or production after March 31, 2008, and before 
     January 1, 2009, shall be taken into account under 
     subparagraph (B)(ii) thereof.
       ``(E) Allocation of bonus depreciation amounts.--
       ``(i) In general.--Subject to clauses (ii) and (iii), the 
     taxpayer shall, at such time and in such manner as the 
     Secretary may prescribe, specify the portion (if any) of the 
     bonus depreciation amount for the taxable year which is to be 
     allocated to each of the limitations described in 
     subparagraph (B) for such taxable year.
       ``(ii) Limitation on allocations.--The portion of the bonus 
     depreciation amount which may be allocated under clause (i) 
     to the limitations described in subparagraph (B) for any 
     taxable year shall not exceed--

       ``(I) in the case of the limitation described in 
     subparagraph (B)(i), the excess of the business credit 
     increase amount over the bonus depreciation amount allocated 
     to such limitation for all preceding taxable years, and
       ``(II) in the case of the limitation described in 
     subparagraph (B)(ii), the excess of the AMT credit increase 
     amount over the bonus depreciation amount allocated to such 
     limitation for all preceding taxable years.

       ``(iii) Business credit increase amount.--For purposes of 
     this paragraph, the term `business credit increase amount' 
     means the amount equal to the portion of the credit allowable 
     under section 38 (determined without regard to subsection (c) 
     thereof) for the

[[Page 16028]]

     first taxable year ending after March 31, 2008, which is 
     allocable to business credit carryforwards to such taxable 
     year which are--

       ``(I) from taxable years beginning before January 1, 2006, 
     and
       ``(II) properly allocable (determined under the rules of 
     section 38(d)) to the research credit determined under 
     section 41(a).

       ``(iv) AMT credit increase amount.--For purposes of this 
     paragraph, the term `AMT credit increase amount' means the 
     amount equal to the portion of the minimum tax credit under 
     section 53(b) for the first taxable year ending after March 
     31, 2008, determined by taking into account only the adjusted 
     minimum tax for taxable years beginning before January 1, 
     2006. For purposes of the preceding sentence, credits shall 
     be treated as allowed on a first-in, first-out basis.
       ``(F) Credit refundable.--For purposes of section 6401(b), 
     the aggregate increase in the credits allowable under part IV 
     of subchapter A for any taxable year resulting from the 
     application of this paragraph shall be treated as allowed 
     under subpart C of such part (and not any other subpart).
       ``(G) Other rules.--
       ``(i) Election.--Any election under this paragraph 
     (including any allocation under subparagraph (E)) may be 
     revoked only with the consent of the Secretary.
       ``(ii) Partnerships with electing partners.--In the case of 
     a corporation making an election under subparagraph (A) and 
     which is a partner in a partnership, for purposes of 
     determining such corporation's distributive share of 
     partnership items under section 702--

       ``(I) paragraph (1) shall not apply to any eligible 
     qualified property, and
       ``(II) the applicable depreciation method used under this 
     section with respect to such property shall be the straight 
     line method.

       ``(iii) Special rule for passenger aircraft.--In the case 
     of any passenger aircraft, the written binding contract 
     limitation under paragraph (2)(A)(iii)(I) shall not apply for 
     purposes of subparagraphs (C)(i)(I) and (D).''.
       (b) Application to Certain Automotive Partnerships.--
       (1) In general.--If an applicable partnership elects the 
     application of this subsection--
       (A) the partnership shall be treated as having made a 
     payment against the tax imposed by chapter 1 of the Internal 
     Revenue Code of 1986 for any applicable taxable year of the 
     partnership in the amount determined under paragraph (3),
       (B) in the case of any eligible qualified property placed 
     in service by the partnership during any applicable taxable 
     year--
       (i) section 168(k) of such Code shall not apply in 
     determining the amount of the deduction allowable with 
     respect to such property under section 168 of such Code,
       (ii) the applicable depreciation method used with respect 
     to such property shall be the straight line method, and
       (C) the amount of the credit determined under section 41 of 
     such Code for any applicable taxable year with respect to the 
     partnership shall be reduced by the amount of the deemed 
     payment under subparagraph (A) for the taxable year.
       (2) Treatment of deemed payment.--
       (A) In general.--Notwithstanding any other provision of the 
     Internal Revenue Code of 1986, the Secretary of the Treasury 
     or his delegate shall not use the payment of tax described in 
     paragraph (1) as an offset or credit against any tax 
     liability of the applicable partnership or any partner but 
     shall refund such payment to the applicable partnership.
       (B) No interest.--The payment described in paragraph (1) 
     shall not be taken into account in determining any amount of 
     interest under such Code.
       (3) Amount of deemed payment.--The amount determined under 
     this paragraph for any applicable taxable year shall be the 
     least of the following:
       (A) The amount which would be determined for the taxable 
     year under section 168(k)(4)(C)(i) of the Internal Revenue 
     Code of 1986 (as added by the amendments made by this 
     section) if an election under section 168(k)(4) of such Code 
     were in effect with respect to the partnership.
       (B) The amount of the credit determined under section 41 of 
     such Code for the taxable year with respect to the 
     partnership.
       (C) $30,000,000, reduced by the amount of any payment under 
     this subsection for any preceding taxable year.
       (4) Definitions.--For purposes of this subsection--
       (A) Applicable partnership.--The term ``applicable 
     partnership'' means a domestic partnership that--
       (i) was formed effective on August 3, 2007, and
       (ii) will produce in excess of 675,000 automobiles during 
     the period beginning on January 1, 2008, and ending on June 
     30, 2008.
       (B) Applicable taxable year.--The term ``applicable taxable 
     year'' means any taxable year during which eligible qualified 
     property is placed in service.
       (C) Eligible qualified property.--The term ``eligible 
     qualified property'' has the meaning given such term by 
     section 168(k)(4)(D) of the Internal Revenue Code of 1986 (as 
     added by the amendments made by this section).
       (c) Conforming Amendment.--Section 1324(b)(2) of title 31, 
     United States Code, as amended by this Act, is amended--
       (1) by inserting ``168(k)(4)(F),'' after ``36,'', and
       (2) by inserting ``, or due under section 3081(b)(2) of the 
     Housing Assistance Tax Act of 2008'' before the period at the 
     end.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after March 31, 2008.

     SEC. 3082. CERTAIN GO ZONE INCENTIVES.

       (a) Use of Amended Income Tax Returns to Take Into Account 
     Receipt of Certain Hurricane-Related Casualty Loss Grants by 
     Disallowing Previously Taken Casualty Loss Deductions.--
       (1) In general.--Notwithstanding any other provision of the 
     Internal Revenue Code of 1986, if a taxpayer claims a 
     deduction for any taxable year with respect to a casualty 
     loss to a principal residence (within the meaning of section 
     121 of such Code) resulting from Hurricane Katrina, Hurricane 
     Rita, or Hurricane Wilma and in a subsequent taxable year 
     receives a grant under Public Law 109-148, 109-234, or 110-
     116 as reimbursement for such loss, such taxpayer may elect 
     to file an amended income tax return for the taxable year in 
     which such deduction was allowed (and for any taxable year to 
     which such deduction is carried) and reduce (but not below 
     zero) the amount of such deduction by the amount of such 
     reimbursement.
       (2) Time of filing amended return.--Paragraph (1) shall 
     apply with respect to any grant only if any amended income 
     tax returns with respect to such grant are filed not later 
     than the later of--
       (A) the due date for filing the tax return for the taxable 
     year in which the taxpayer receives such grant, or
       (B) the date which is 1 year after the date of the 
     enactment of this Act.
       (3) Waiver of penalties and interest.--Any underpayment of 
     tax resulting from the reduction under paragraph (1) of the 
     amount otherwise allowable as a deduction shall not be 
     subject to any penalty or interest under such Code if such 
     tax is paid not later than 1 year after the filing of the 
     amended return to which such reduction relates.
       (b) Waiver of Deadline on Construction of GO Zone Property 
     Eligible for Bonus Depreciation.--
       (1) In general.--Subparagraph (B) of section 1400N(d)(3) is 
     amended to read as follows:
       ``(B) without regard to `and before January 1, 2009' in 
     clause (i) thereof, and''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to property placed in service after December 31, 
     2007.
       (c) Inclusion of Certain Counties in Gulf Opportunity Zone 
     for Purposes of Tax-Exempt Bond Financing.--
       (1) In general.--Subsection (a) of section 1400N is amended 
     by adding at the end the following new paragraph:
       ``(8) Inclusion of certain counties.--For purposes of this 
     subsection, the Gulf Opportunity Zone includes Colbert 
     County, Alabama and Dallas County, Alabama.''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the provisions of the 
     Gulf Opportunity Zone Act of 2005 to which it relates.

     SEC. 3083. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT.

       Subsection (b) of section 3101 of title 31, United States 
     Code, is amended by striking out the dollar limitation 
     contained in such subsection and inserting in lieu thereof 
     $10,615,000,000,000.

                      Subtitle B--Revenue Offsets

     SEC. 3091. RETURNS RELATING TO PAYMENTS MADE IN SETTLEMENT OF 
                   PAYMENT CARD AND THIRD PARTY NETWORK 
                   TRANSACTIONS.

       (a) In General.--Subpart B of part III of subchapter A of 
     chapter 61 is amended by adding at the end the following new 
     section:

     ``SEC. 6050W. RETURNS RELATING TO PAYMENTS MADE IN SETTLEMENT 
                   OF PAYMENT CARD AND THIRD PARTY NETWORK 
                   TRANSACTIONS.

       ``(a) In General.--Each payment settlement entity shall 
     make a return for each calendar year setting forth--
       ``(1) the name, address, and TIN of each participating 
     payee to whom one or more payments in settlement of 
     reportable payment transactions are made, and
       ``(2) the gross amount of the reportable payment 
     transactions with respect to each such participating payee.
     Such return shall be made at such time and in such form and 
     manner as the Secretary may require by regulations.
       ``(b) Payment Settlement Entity.--For purposes of this 
     section--
       ``(1) In general.--The term `payment settlement entity' 
     means--
       ``(A) in the case of a payment card transaction, the 
     merchant acquiring entity, and
       ``(B) in the case of a third party network transaction, the 
     third party settlement organization.
       ``(2) Merchant acquiring entity.--The term `merchant 
     acquiring entity' means the bank or other organization which 
     has the

[[Page 16029]]

     contractual obligation to make payment to participating 
     payees in settlement of payment card transactions.
       ``(3) Third party settlement organization.--The term `third 
     party settlement organization' means the central organization 
     which has the contractual obligation to make payment to 
     participating payees of third party network transactions.
       ``(4) Special rules related to intermediaries.--For 
     purposes of this section--
       ``(A) Aggregated payees.--In any case where reportable 
     payment transactions of more than one participating payee are 
     settled through an intermediary--
       ``(i) such intermediary shall be treated as the 
     participating payee for purposes of determining the reporting 
     obligations of the payment settlement entity with respect to 
     such transactions, and
       ``(ii) such intermediary shall be treated as the payment 
     settlement entity with respect to the settlement of such 
     transactions with the participating payees.
       ``(B) Electronic payment facilitators.--In any case where 
     an electronic payment facilitator or other third party makes 
     payments in settlement of reportable payment transactions on 
     behalf of the payment settlement entity, the return under 
     subsection (a) shall be made by such electronic payment 
     facilitator or other third party in lieu of the payment 
     settlement entity.
       ``(c) Reportable Payment Transaction.--For purposes of this 
     section--
       ``(1) In general.--The term `reportable payment 
     transaction' means any payment card transaction and any third 
     party network transaction.
       ``(2) Payment card transaction.--The term `payment card 
     transaction' means any transaction in which a payment card is 
     accepted as payment.
       ``(3) Third party network transaction.--The term `third 
     party network transaction' means any transaction which is 
     settled through a third party payment network.
       ``(d) Other Definitions.--For purposes of this section--
       ``(1) Participating payee.--
       ``(A) In general.--The term `participating payee' means--
       ``(i) in the case of a payment card transaction, any person 
     who accepts a payment card as payment, and
       ``(ii) in the case of a third party network transaction, 
     any person who accepts payment from a third party settlement 
     organization in settlement of such transaction.
       ``(B) Exclusion of foreign persons.--Except as provided by 
     the Secretary in regulations or other guidance, such term 
     shall not include any person with a foreign address.
       ``(C) Inclusion of governmental units.--The term `person' 
     includes any governmental unit (and any agency or 
     instrumentality thereof).
       ``(2) Payment card.--The term `payment card' means any card 
     which is issued pursuant to an agreement or arrangement which 
     provides for--
       ``(A) one or more issuers of such cards,
       ``(B) a network of persons unrelated to each other, and to 
     the issuer, who agree to accept such cards as payment, and
       ``(C) standards and mechanisms for settling the 
     transactions between the merchant acquiring entities and the 
     persons who agree to accept such cards as payment.
     The acceptance as payment of any account number or other 
     indicia associated with a payment card shall be treated for 
     purposes of this section in the same manner as accepting such 
     payment card as payment.
       ``(3) Third party payment network.--The term `third party 
     payment network' means any agreement or arrangement--
       ``(A) which involves the establishment of accounts with a 
     central organization by a substantial number of persons who--
       ``(i) are unrelated to such organization,
       ``(ii) provide goods or services, and
       ``(iii) have agreed to settle transactions for the 
     provision of such goods or services pursuant to such 
     agreement or arrangement,
       ``(B) which provides for standards and mechanisms for 
     settling such transactions, and
       ``(C) which guarantees persons providing goods or services 
     pursuant to such agreement or arrangement that such persons 
     will be paid for providing such goods or services.
     Such term shall not include any agreement or arrangement 
     which provides for the issuance of payment cards.
       ``(e) Exception for De Minimis Payments by Third Party 
     Settlement Organizations.--A third party settlement 
     organization shall be required to report any information 
     under subsection (a) with respect to third party network 
     transactions of any participating payee only if--
       ``(1) the amount which would otherwise be reported under 
     subsection (a)(2) with respect to such transactions exceeds 
     $20,000, and
       ``(2) the aggregate number of such transactions exceeds 
     200.
       ``(f) Statements to Be Furnished to Persons With Respect to 
     Whom Information Is Required.--Every person required to make 
     a return under subsection (a) shall furnish to each person 
     with respect to whom such a return is required a written 
     statement showing--
       ``(1) the name, address, and phone number of the 
     information contact of the person required to make such 
     return, and
       ``(2) the gross amount of the reportable payment 
     transactions with respect to the person required to be shown 
     on the return.
     The written statement required under the preceding sentence 
     shall be furnished to the person on or before January 31 of 
     the year following the calendar year for which the return 
     under subsection (a) was required to be made. Such statement 
     may be furnished electronically, and if so, the email address 
     of the person required to make such return may be shown in 
     lieu of the phone number.
       ``(g) Regulations.--The Secretary may prescribe such 
     regulations or other guidance as may be necessary or 
     appropriate to carry out this section, including rules to 
     prevent the reporting of the same transaction more than 
     once.''.
       (b) Penalty for Failure to File.--
       (1) Return.--Subparagraph (B) of section 6724(d)(1) is 
     amended--
       (A) by striking ``or'' at the end of clause (xx),
       (B) by redesignating the clause (xix) that follows clause 
     (xx) as clause (xxi),
       (C) by striking ``and'' at the end of clause (xxi), as 
     redesignated by subparagraph (B) and inserting ``or'', and
       (D) by adding at the end the following:
       ``(xxii) section 6050W (relating to returns to payments 
     made in settlement of payment card transactions), and''.
       (2) Statement.--Paragraph (2) of section 6724(d) is amended 
     by striking ``or'' at the end of subparagraph (BB), by 
     striking the period at the end of the subparagraph (CC) and 
     inserting ``, or'', and by inserting after subparagraph (CC) 
     the following:
       ``(DD) section 6050W(c) (relating to returns relating to 
     payments made in settlement of payment card transactions).''.
       (c) Application of Backup Withholding.--Paragraph (3) of 
     section 3406(b) is amended by striking ``or'' at the end of 
     subparagraph (D), by striking the period at the end of 
     subparagraph (E) and inserting ``, or'', and by adding at the 
     end the following new subparagraph:
       ``(F) section 6050W (relating to returns relating to 
     payments made in settlement of payment card transactions).''.
       (d) Clerical Amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61 is amended by 
     inserting after the item relating to section 6050V the 
     following:

``Sec. 6050W. Returns relating to payments made in settlement of 
              payment card transactions.''.
       (e) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to returns for calendar years beginning after December 31, 
     2010.
       (2) Application of backup withholding.--
       (A) In general.--The amendment made by subsection (c) shall 
     apply to amounts paid after December 31, 2011.
       (B) Eligibility for tin matching program.--Solely for 
     purposes of carrying out any TIN matching program established 
     by the Secretary under section 3406(i) of the Internal 
     Revenue Code of 1986--
       (i) the amendments made this section shall be treated as 
     taking effect on the date of the enactment of this Act, and
       (ii) each person responsible for setting the standards and 
     mechanisms referred to in section 6050W(d)(2)(C) of such 
     Code, as added by this section, for settling transactions 
     involving payment cards shall be treated in the same manner 
     as a payment settlement entity.

     SEC. 3092. GAIN FROM SALE OF PRINCIPAL RESIDENCE ALLOCATED TO 
                   NONQUALIFIED USE NOT EXCLUDED FROM INCOME.

       (a) In General.--Subsection (b) of section 121 of the 
     Internal Revenue Code of 1986 (relating to limitations) is 
     amended by adding at the end the following new paragraph:
       ``(4) Exclusion of gain allocated to nonqualified use.--
       ``(A) In general.--Subsection (a) shall not apply to so 
     much of the gain from the sale or exchange of property as is 
     allocated to periods of nonqualified use.
       ``(B) Gain allocated to periods of nonqualified use.--For 
     purposes of subparagraph (A), gain shall be allocated to 
     periods of nonqualified use based on the ratio which--
       ``(i) the aggregate periods of nonqualified use during the 
     period such property was owned by the taxpayer, bears to
       ``(ii) the period such property was owned by the taxpayer.
       ``(C) Period of nonqualified use.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `period of nonqualified use' 
     means any period (other than the portion of any period 
     preceding January 1, 2009) during which the property is not 
     used as the principal residence of the taxpayer or the 
     taxpayer's spouse or former spouse.
       ``(ii) Exceptions.--The term `period of nonqualified use' 
     does not include--

       ``(I) any portion of the 5-year period described in 
     subsection (a) which is after the last date that such 
     property is used as the principal residence of the taxpayer 
     or the taxpayer's spouse,
       ``(II) any period (not to exceed an aggregate period of 10 
     years) during which the taxpayer or the taxpayer's spouse is 
     serving on

[[Page 16030]]

     qualified official extended duty (as defined in subsection 
     (d)(9)(C)) described in clause (i), (ii), or (iii) of 
     subsection (d)(9)(A), and
       ``(III) any other period of temporary absence (not to 
     exceed an aggregate period of 2 years) due to change of 
     employment, health conditions, or such other unforeseen 
     circumstances as may be specified by the Secretary.

       ``(D) Coordination with recognition of gain attributable to 
     depreciation.--For purposes of this paragraph--
       ``(i) subparagraph (A) shall be applied after the 
     application of subsection (d)(6), and
       ``(ii) subparagraph (B) shall be applied without regard to 
     any gain to which subsection (d)(6) applies.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales and exchanges after December 31, 2008.

     SEC. 3093. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF 
                   INTEREST.

       (a) In General.--Paragraphs (5)(D) and (6) of section 
     864(f) are each amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2010''.
       (b) Transitional Rule.--Subsection (f) of section 864 is 
     amended by adding at the end the following new paragraph:
       ``(7) Transition.--In the case of the first taxable year to 
     which this subsection applies, the increase (if any) in the 
     amount of the interest expense allocable to sources within 
     the United States by reason of the application of this 
     subsection shall be 30 percent of the amount of such increase 
     determined without regard to this paragraph.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 3094. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       (a) Repeal of Adjustment for 2012.--Subparagraph (B) of 
     section 401(1) of the Tax Increase Prevention and 
     Reconciliation Act of 2005 is amended by striking the 
     percentage contained therein and inserting ``100 percent''. 
     No other provision of law which would change such percentage 
     shall have any force and effect.
       (b) Modification of Adjustment for 2013.--The percentage 
     under subparagraph (C) of section 401(1) of the Tax Increase 
     Prevention and Reconciliation Act of 2005 in effect on the 
     date of the enactment of this Act is increased by 16.75 
     percentage points.

  The SPEAKER pro tempore. Pursuant to House Resolution 1363, the 
motion shall be debatable for 2 hours, with 80 minutes equally divided 
and controlled by the chairman and ranking minority member of the 
Committee on Financial Services and 40 minutes equally divided and 
controlled by the chairman and ranking minority member of the Committee 
on Ways and Means.
  The gentleman from Massachusetts (Mr. Frank) and the gentleman from 
Alabama (Mr. Bachus) each will control 40 minutes, and the gentleman 
from Massachusetts (Mr. Neal) and the gentleman from Louisiana (Mr. 
McCrery) each will control 20 minutes.
  The Chair recognizes the gentleman from Massachusetts (Mr. Neal).


                             General Leave

  Mr. NEAL of Massachusetts. Mr. Speaker, I ask unanimous consent that 
all Members have 5 legislative days within which to revise and extend 
their remarks and include extraneous material on H.R. 3221.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?
  There was no objection.
  Mr. NEAL of Massachusetts. Mr. Speaker, I yield myself so much time 
as I might consume.
  Mr. Speaker, Finance Committee Chairman Frank and Ways and Means 
Committee Chairman Rangel have asked the nonpartisan Joint Committee on 
Taxation to make available to the public a technical explanation of 
this legislation. The technical explanation, JCX-63-08, expresses the 
committee's understanding and legislative intent behind this important 
legislation. It is available on the Joint Committee on Taxation Web 
site, at www.jct.gov.
  Mr. Speaker, I stand today in support of H.R. 3221, the American 
Housing Rescue and Foreclosure Prevention Act of 2008.
  I want to begin by commending Mr. Rangel, the chairman of the Ways 
and Means Committee, and Mr. Frank, the chairman of the Financial 
Services Committee, for their tireless efforts on behalf of this bill. 
It has certainly not been an easy task.
  With bank failures and foreclosures continuing to headline the news, 
the pressure to respond has been most remarkable. I have seen it in my 
back yard. Massachusetts is the sixth in the Nation community for 
foreclosure activity. In Springfield, the heart of my district, 300 
homes have been foreclosed this year, and over 2,000 mortgages will 
reset to higher interest rates through 2009. In response today, we have 
a tax title with broad bipartisan support.
  The tax provisions in this bill are an appropriate mix of incentives 
for home purchasers, owners, renters, for builders, developers and 
lenders. Quite simply, they help the housing and real estate industry 
regain their footing; and they offer struggling home owners a lifeline. 
How critical that provision.
  This bill offers hope that if we can get this industry up and moving 
again, and provide security for distressed home owners, maybe the 
economy will respond and get back on track as well. We all know how 
important the housing industry is, not only to American economic 
security, but to overall economic gain.

                              {time}  1400

  The provisions in the tax title include:
  A $7,500 refundable tax credit for first-time home buyers which is 
available for purchases through next July.
  An additional standard deduction for property taxes for those who do 
not itemize. I can't emphasize how important that provision is and how 
well received it will be. It will be a huge benefit, especially for 
seniors who have paid off their mortgages but still face property tax 
bills.
  A temporary increase in the low-income housing tax credit, which 
provides affordable housing for working families in all 50 states.
  A temporary increase in State-issued mortgage revenue bonds and a 
provision allowing the proceeds to be used to refinance certain 
subprime loans.
  The tax title of this bill is fully paid for with three previously 
approved offsets. I want to just point something out. We have had 
significant Republican support in the past for these offsets, meaning 
simply that Republicans have supported the pay-for provisions that 
we've used.
  First, the bill uses the Bush administration's credit card reporting 
proposal which obligates third-party financial institutions that 
process credit card payments to report to the IRS on annual credit card 
receipts to a business.
  Second, the bill delays for 2 years the worldwide interest allocation 
rule. This tax benefit was enacted in 2004 but delayed until 2009. We 
simply push off for 2 years a benefit these companies haven't used yet 
to claim more foreign tax credits and lower their U.S. tax bill.
  Finally, the bill limits the exclusion of gains on vacation homes. 
This provision will limit the exclusion of gains to the amount of time 
a vacation home was a principal residence over the total time owned 
after January 1, 2009.
  Mr. Speaker, these tax provisions, along with the provisions brokered 
by Mr. Frank, are urgently needed.
  With that, I reserve the balance of my time.
  Mr. McCRERY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, challenging times make for difficult choices, and these 
are certainly challenging times. We all understand the severity of the 
housing crisis. Single-family housing starts to decline to 647,000 in 
June of 2008, down nearly two-thirds since early 2006 and are now near 
their lowest level in a generation. There is currently a 10\1/2\-month 
supply of unsold homes, double the 10-year average. Home prices have 
been falling, defaults on foreclosures have been on the rise, and this 
contraction in the residential real estate market has become an anchor 
on our economy.
  In the most critical recent development, the financial health of 
Fannie Mae and Freddie Mac has deteriorated markedly over the past 2 
weeks, raising the prospect that these two companies, which own or 
guarantee nearly half of all United States mortgages, could fail. We 
must not let that happen. The stakes are simply too high and the risk 
of an even broader, more expensive financial bailout down the road is 
too great. And for that reason, I will, with great reluctance, support 
the legislation before us today--notwithstanding its numerous flaws--as 
it

[[Page 16031]]

includes the plan developed by Secretary Paulson to provide a temporary 
Federal backstop in order to protect taxpayers from potentially 
enormous future exposure and our economy from perhaps unprecedented 
harm.
  Having said that, I deeply regret that the majority has viewed 
Secretary Paulson's urgent request for legislation on Fannie and 
Freddie as an opportunity to push through a number of unrelated, highly 
controversial provisions as part of the broader package before us 
today.
  While there are several tax proposals in this package that I do find 
worthwhile--such as the increase in the mortgage revenue bond allowance 
and a provision allowing low-income housing tax credits to be used 
against the AMT--the bill's tax title contains several objectionable 
provisions.
  For example, the bill would provide an additional standard deduction 
for property taxes, which will effectively serve as a new form of 
revenue sharing for the States encouraging higher taxes on the State 
level. The bill would also restrict the capital gains exclusion on the 
sale of certain homes at a particularly precarious or sensitive time 
for our housing markets and the economy at large. I don't think that's 
well advised.
  It also recycles a proposal to delay for 2 years the implementation 
of more favorable worldwide interest allocation rules that are designed 
to enhance the competitiveness of United States companies. And finally, 
it provides an extremely short time line for credit card companies to 
come into compliance with new and complex reporting rules.
  Today's bill also contains a number of non-tax provisions beyond the 
jurisdiction of the Ways and Means Committee that I oppose, including 
the affordable housing trust fund and a proposed $4 billion spending 
increase on Community Development Block Grants.
  With respect to the latter provision, I would note that yet again the 
Ways and Means Committee is being used as the piggy bank to fund 
another committee's spending request. Curiously, while the majority is 
insisting on higher taxes to cover the cost of this increased CDBG 
spending, the majority has once again waived its own PAYGO rules on the 
overall bill itself, including with respect to the estimated $25 
billion cost of Secretary Paulson's proposal on Fannie Mae and Freddie 
Mac. While it is certainly not surprising to see the majority abandon 
its PAYGO principles yet again, it is worth noting that our friends on 
the other side of the aisle seem to cling to their increasingly empty 
PAYGO rhetoric only when it comes to extending expired tax provisions.
  Finally, Mr. Speaker, I want to express my disappointment with the 
procedural straitjacket imposed upon the minority in today's bill. Not 
only has the majority packaged Secretary Paulson's proposal on Fannie 
and Freddie together with a laundry list of objectionable provisions in 
a single take-it-or-leave-it bill with very little time for review, the 
minority has not been permitted to offer a single amendment, not a 
substitute, not even a motion to recommit. I don't think that this 
House is well served by the rules governing today's debate.
  With all of that being said, Mr. Speaker, I will reluctantly support 
this package because of the urgent need to prevent Fannie Mae and 
Freddie Mac, and potentially our broader economy, from collapsing under 
the current strains in the housing market.
  I reserve the balance of my time.
  Mr. NEAL of Massachusetts. Mr. Speaker, I would like to yield at this 
time 2 minutes to the gentleman from Michigan (Mr. Levin), a member of 
the Ways and Means Committee.
  Mr. LEVIN. I enthusiastically support this bill. The housing crisis 
has hit home, hundreds of thousands of homes throughout the country. 
There is a provision that's going to allow local governments to act.
  I met a couple of months ago with mayors and city managers in the 
district I represent in MaComb and Oakland counties. They talk about 
the impact of foreclosures on the family in the house, on the 
neighbors, and on the city. And now we're going to provide some 
assistance for local governments to respond.
  I trust them to act wisely. I trust them to act wisely.
  There's another provision in this bill that is important for 
industrial America. In the stimulus bill, we provided some money for 
incentives for growth in industry but not for companies that are 
currently not profitable. We correct that problem in this bill so that 
those companies that are not currently profitable but are trying to 
grow, as is so critical in the manufacturing sector, have some help.
  This bill is a tribute to Mr. Frank and the committee, to Mr. Rangel 
and our committee that has worked, the minority included on many 
provisions, and I think is a tribute to the leadership of this Congress 
that is determined to act when the crisis opens up.
  I hope there will be a bipartisan vote for this. American families 
deserve it.
  Mr. McCRERY. Mr. Speaker, I yield 3 minutes to the distinguished 
ranking member of the Social Security Subcommittee of the Committee on 
Ways and Means, the gentleman from Texas (Mr. Sam Johnson).
  Mr. SAM JOHNSON of Texas. I thank the gentleman from Louisiana.
  Mr. Speaker, Congress is trying to keep the housing market afloat and 
is working on an unbridled government expansion of the Federal Housing 
Administration to do it.
  I'm all for finding commonsense housing relief for those in trouble, 
but we need to hold hearings and take a closer look at this proposal 
and the ramifications. Just because the housing market has tumbled 
doesn't mean we should capriciously finance a big fat government 
bailout. Some in Congress want the FHA to ensure about $300 billion 
worth of risky mortgages, and they want the taxpayers to be held 
responsible when homeowners default on their loan. That makes no sense.
  The Senate sent us a proposal to pay for the FHA expansion using a 
tax on mortgage finance companies Fannie Mae and Freddie Mac. 
Unfortunately, Fannie and Freddie are in trouble and now looking for 
their own bailout. Why should taxpayers foot the bill to prop up those 
former giants when the company CEOs rake in a bundle and continue to do 
so? As one person said, It's privatized profits and socialized risk.
  Apparently, Daniel Mudd, the CEO of Fannie Mae, received $11.6 
million in salary, stock, and other compensation for 2007. Richard 
Syron, CEO of Freddie Mac, took home about $18.3 million last year. On 
top of his salary, stock options, and a $3.5 million bonus, Freddie Mac 
paid for a number of other perks for Syron such as a car and driver, a 
home security system, travel costs for his wife, even $100,000 to pay 
his lawyer to negotiate his employment contract with the bank. Now 
everyone knows I'm a strong supporter of freedom and free enterprise, 
but this is ridiculous, and I think even you all would agree.
  The lack of accountability and responsibility is astounding. I will 
not support a bailout for speculators and a package that provides 
little help to real homeowners struggling to pay their mortgages on 
time. I do not believe we should ask people who rent homes or 
apartments and all of the people who reasonably and responsibly saved 
for a home to foot the bill for all of the people who are in 
foreclosure. That's just not right.
  We should have empathy, but we should not write a blank check.
  Mr. NEAL of Massachusetts. Mr. Speaker, just a quick response.
  The FHA, which supports this legislation, is a part of the Department 
of HUD which is appointed by President Bush. In addition, Secretary 
Paulson, I believe, supports this legislation, and the White House has 
withdrawn their veto threat.
  With that, I would like to yield 1 minute to the gentleman from 
Connecticut (Mr. Larson), also a member of the Ways and Means 
Committee.
  Mr. LARSON of Connecticut. Thank you, Mr. Neal. I commend you for 
your hard work on this bill and enthusiastically support it, commending 
Mr. Rangel and, of course, Mr. Frank who, as we all know from New 
England, has labored tirelessly along with Senator

[[Page 16032]]

Dodd from my home State of Connecticut to bring this legislation to 
fruition.
  I want to commend our dear friend Mr. McCrery for his remarks, and I 
have some sympathy with regard to his concerns about procedure. But 
they pale in comparison to the relief that people in the State of 
Connecticut, the State of Louisiana, and all across this nation are 
desiring. I can't emphasize enough the work that Charlie Rangel and 
Barney Frank have done on this legislation to bring relief where it's 
greatly needed, as Mr. Levin pointed out, especially in our urban and 
city areas where the block grants will provide an opportunity and great 
flexibility for them to do the kind of things and provide the 
incentives needed to both preserve people in their ability to stay in 
their homes and expand that opportunity across the State.
  Mr. McCRERY. Mr. Speaker, I reserve the balance of my time.
  Mr. NEAL of Massachusetts. Mr. Speaker, at this time I would like to 
yield 2 minutes to the gentleman from Oregon (Mr. Blumenauer), another 
member of the Ways and Means Committee.
  Mr. BLUMENAUER. Thank you, Mr. Neal, for your leadership and your 
courtesy.
  Mr. Speaker, I am pleased to support this package as it brings much-
needed reforms to the industry, supports homeowners around the country 
and is much needed. I think it represents a lot of good, hard work. But 
I must make one point, because buried in the provisions of this bill in 
section 3082 on page 680 is an expansion of the Gulf Opportunity Zone 
to two counties in Alabama.

                              {time}  1415

  One of those counties is 300 miles from the coast and doesn't have 
much to do with housing and has nothing to do with damage for Katrina.
  The reason I'm speaking to it is because it is an expansion designed 
to provide a subsidy for National Steel Car, a Canadian rail 
manufacturer. A subsidy unnecessary for two reasons: because the plant 
in question is already under construction, and that Alabama was already 
under a contractual obligation to provide this subsidy if Congress did 
not.
  The United States has a domestic railcar industry, with plants and 
facilities around the country. I put in the Record a list of the 18 
factories around the United States and the four American corporate 
headquarters.

                        U.S. Rail Car Facilities


      American Railcar Industries (2095 Employees as of 12/31/07)

       Corporate Headquarters, 10 Clark Street, St. Charles, MO 
     63301, 636-940-6000.
       Marmaduke Plant, 7755 Highway 34 E, Marmaduke, AR, 870-597-
     2224.
       Milton Plant, 417 North Arch St., Milton, PA.
       Paragould Plant, 901 Jones Rd., Paragould, AR, 870-236-
     6600.


     Trinity Industries (Rail Group: 7470 employees as of 12/31/07)

       Corporate Headquarters, 2525 Stemmons Freeway, Dallas, TX 
     75702, 800-631-4420.
       Longview Plant, 607 Fisher Rd., Longview, TX.
       Oklahoma City Plant, 2033 SW 22nd St., Oklahoma City, OK, 
     405-632-6631.
       Saginaw Plant #1, 104 E Bailey Boswell Rd., Saginaw, TX 
     817-232-3650.
       Saginaw Plant #2, 2850 Peden Rd., Saginaw, TX, 817-236-
     7141.
       Ft. Worth Plant #1, 2548 NE 28th St., Fort Worth, TX, 817-
     665-1400.
       Ft. Worth Plant #2, 1901 Brennan Ave., Fort Worth, TX, 817-
     625-6225.
       Springfield Plant, 1849 North Park Avenue, Springfield, MO 
     65803-1985, 417-831-6797.
       Cartersville Plant, 190 Old Grassdale Road Northwest, 
     Cartersville, GA 30121-5097, 770-382-9400.
       Winder Plant, 880 Airport Road, Winder, GA 30680.


           Freightcar America (576 employees as of 12/31/07)

       Corporate Headquarters, Two North Riverside Plaza, Suite 
     1250, Chicago, IL 60606, 312-928-0850.
       Danville, IL Plant, 2313 Cannon Street, Danville, Illinois 
     61832, 217-443-4106, Fax: 217-443-0750.
       Roanoke Plant, 830 Campbell Avenue SE, Roanoke, VA 24013, 
     540-853-3221, Fax: 540-853-3254.
       Johnstown, PA Facilities--JUST CLOSED, 17 Johns Street, 
     Johnstown, PA 15901, 800-458-2235, Fax: 814-533-5010.


 The Greenbrier Companies, Inc. (Gunderson: 1036 employees as of 7/21/
                                  08)

       Corporate Headquarters, One Centerpointe Drive, Suite 200, 
     Lake Oswego, OR 97035, 503-684-7000.
       Portland, OR Plant (Gunderson), 4350 NW Front Avenue, 
     Portland, OR 97210, 503-224-1973.


                             Progress Rail

       Corporate Headquarters, 1600 Progress Drive, Albertville, 
     AL 35950, 800-476-8769.
       Raceland Shop, Old US Hwy. 23 Coal Hump Rip Rd., Raceland, 
     KY 41169, 606-836-6314.
  One of them, I represent, just laid off 100 workers because of the 
soft market, and now we're going to have the Federal Government provide 
subsidy for a foreign company to hurt American industry.
  We're not talking about picking winners and losers here. We've 
already picked a winner. We held a secret bidding process, and I 
appreciate there was real pressure from some of our friends in the 
Senate, but a Canadian company won, despite the fact that they would 
have made this investment anyway.
  I'm going to support this package, but I'm going to introduce this 
week a piece of legislation to make the benefit here prospective, so it 
doesn't cut the legs out from underneath the American railcar industry. 
I would urge all of my colleagues to join me in cosponsoring this 
legislation.
  Mr. McCRERY. I continue to reserve, Mr. Speaker.
  Mr. NEAL of Massachusetts. Mr. Speaker, I would like to yield 2 
minutes to the gentleman from Illinois (Mr. Emanuel), who's had a 
longstanding interest from the executive branch of government to the 
legislative branch of government in housing matters, my friend.
  Mr. EMANUEL. Mr. Speaker, this is, as the tax rebate earlier this 
year, a bipartisan effort to help stabilize the mortgage industry and 
homeownership. What started as a small crisis in the sub-prime market 
has now spread to other credit markets and other areas.
  This is the right thing to do, and literally, the whole world is 
watching whether we will get this done and stand up for our 
obligations. This is essential for the mortgage industry, as I said, 
and also for homeownership in America.
  In addition to those efforts, this legislation provides up to a 
$1,000 tax deduction for those who have a standard deduction for 
property taxes, something we've never done before, and is a landmark as 
it relates to property tax relief for homeowners, mainly senior 
citizens.
  And finally, why I think this legislation is so important, as 
somebody who worked in affordable housing, in the area of affordable 
housing, both in Chicago and in prior times in the executive branch, 
this extends the low-income affordable housing tax credit for States, 
as well as makes it a wealthier tax credit, which is so important for 
first time homeowners.
  This legislation, which could have been done earlier but others 
didn't want to do it earlier, comes at a critical time to sending 
messages around the world literally about America's willingness to step 
forward and meet its obligations to important institutions like Freddie 
Mac and Fannie Mae and make sure that America's mortgage industry but, 
most importantly, its homeownership continues on a steady course and a 
steady footing.
  I think this is the right legislation and at an essential time, and I 
compliment those on a bipartisan effort for accomplishing what is 
essential for America's economy, at this time, I think a critical 
juncture as those around the world in the credit markets are watching 
to see if we will stand by our obligation, and in addition to that, 
achieves other objectives, property tax relief, as well as affordable 
housing relief, and make sure that we continue to grow and making 
accessible affordable housing initiatives.
  Mr. McCRERY. Mr. Speaker, I yield 4 minutes to the distinguished 
gentleman from California (Mr. Royce).
  Mr. ROYCE. Mr. Speaker, today I've got to say, after spending a 
decade advocating for strong GSE reform, I am shocked to see this 
attempt to increase moral hazard and socialized risk that we're seeing 
on the floor today. We're going to reward some of the same institutions 
which have undermined sound

[[Page 16033]]

economic principles, which have resisted the reforms that we've tried 
to push.
  I believe good governance and protecting the American taxpayer has 
got to trump rewarding radical organizations and imprudent lenders and 
rewarding speculators. And unfortunately, that is what is done in this 
bill.
  And for too long, Fannie Mae and Freddie Mac have reaped the rewards 
of the private sector, while enjoying the type of security known only 
to branches of the Federal Government. Their quasi-governmental status 
has created a level of moral hazard unseen anywhere else in our capital 
markets.
  You know, in an effort to create a regulator with enough authority to 
restrain these institutions, in 2003 I introduced the first legislation 
which sought to put Fannie and Freddie and the Federal home loan bank 
system under one strong regulator within the Federal Government.
  Additionally, in 2005, I offered an amendment on this floor to give 
the new regulator the authority to review and adjust the GSEs' 
portfolios to mitigate against a potential systemic shock. And the same 
groups and organizations that right now stand to benefit from this bill 
opposed those reforms at the time.
  As the systemic risk posed by the GSEs grew, the need for a strong 
regulator, able to control their risk exposure and ensure they were 
adequately capitalized, became more and more critical, especially as 
the mortgage industry began to deteriorate over the last 18 months.
  The failure of Congress to pass such critical legislation over the 
years could end up being one of Washington's greatest oversight 
mistakes in recent history, and worst yet, we're here today asking, as 
we do so often, the American taxpayer frankly to pay for the failure 
here.
  Now, I'm angered that today's legislation has been loaded with 
handouts and improperly funded liabilities, the most obvious of which 
bails out speculators and investors that incorrectly gambled on the 
housing industry and the institutions that provided their loans.
  The $300 billion plan would allow banks to dump their least appealing 
loans onto the Federal Housing Administration, and by taking on these 
mortgages, we are shifting the default risk. That default risk is 
currently held by institutions and investors around the world, and 
we're shifting it instead onto the backs of the American taxpayers.
  The Congressional Budget Office estimated that a stunning 35 percent 
of all of the loans refinanced through mortgage bailouts may eventually 
default on the Federal Government.
  And then we have the affordable housing fund, which would funnel as 
much as $600 million every year to activist organizations with a long 
history, frankly, of both voter fraud and anti-free market advocacy 
throughout the country.
  And what is the funding mechanism to prevent taxpayers from footing 
the bill for these misguided programs? Well, it is a 4.2 basis points 
tax levied on the same struggling GSEs that this legislation is meant 
to strengthen. And whether this tax will be enough to cover the 10s of 
billions of potential losses remains to be seen.
  In closing, Mr. Speaker, I encourage my colleagues to join me in 
opposing this legislation because of the unprecedented amount of 
taxpayer liabilities included in this package. This is an affront to 
good governance. It should be avoided at all costs.
  Mr. NEAL of Massachusetts. Mr. Speaker, I recognize myself for 30 
seconds.
  The role of the speculator will be enhanced if we allow this virus to 
continue to spread. As the homes fall into foreclosure, the speculator 
and the reach of the speculator will drive prices down in communities 
across the country.
  I acknowledge, as the gentleman defined the problem, the challenge, 
but at the same time, not to act today would be irresponsible.
  And with that, I would like to yield 2 minutes to the gentleman from 
New Jersey, a former mayor, Mr. Pascrell.
  Mr. PASCRELL. Thank you for yielding.
  This legislation could not come at a better time. In the State of New 
Jersey, foreclosure filings increased 5 percent in June compared to a 
year ago, but even that paled in comparison to the 53 percent increase 
that occurred throughout the United States of America.
  I am particularly pleased that H.R. 3221 contains a tax benefit for 
first-time home buyers. This is a truly meaningful incentive and one 
that will pull out a large swath of people from the sidelines and into 
the market. This is what we need.
  Studies have shown that this will help reduce housing inventory by 
some 900,000 homes, which will, in turn, stabilize prices. This is wise 
and necessary at this time.
  It is in this climate we need bipartisanship. When it comes to 
helping families keep their homes, working to solve the housing market 
crisis, there are no Democrats or Republicans, only Americans. We want 
to reassure the private market.
  It is in this spirit that I applaud Secretary Paulson for working 
with congressional leadership to include financial support and 
regulatory measures for Fannie Mae, Freddie Mac, and the Federal home 
loan bank system in this bill so that they can provide our Nation's 
families with affordable housing, and for his work in encouraging the 
President to drop his veto threat of this worthy piece of legislation. 
Frankly, this is the kind of cooperation from the other end of 
Pennsylvania Avenue which has been long overdue.
  Congressional changes to help Freddie Mac and Fannie Mae operate are 
critical to reining in these institutions. Regulation is in order to 
primarily protect our citizens.
  I also want to thank the chairmen, Chairman Frank and Chairman 
Rangel, and all the others and all the other authors of this 
legislation which will offer real relief to families facing foreclosure 
and will help other families avoid foreclosure in the future.
  Mr. McCRERY. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Texas, a member of the Ways and Means Committee, Mr. 
Brady.
  Mr. BRADY of Texas. Mr. Speaker, I rise today in opposition to this 
bill.
  There's no question that if Freddie Mac and Fannie Mae were to 
collapse, it would deal a serious blow to our economy, and nearly every 
community would feel the negative effects. But this bill fails to give 
taxpayers enough confidence that the two mortgage giants won't be back 
again for another dip in the trough.
  I'm concerned that we're unduly putting a massive burden on taxpayers 
for Wall Street's bad decisions and those of speculators who took on 
risky mortgages.
  I believe that before we use taxpayer dollars to potentially increase 
the national debt, provide an unlimited line of credit, and allow the 
government to buy a little less than $1 trillion in stock in private 
companies, then Congress needs to insist on these three conditions.
  First, unlike today, Freddie and Fannie must be required to have the 
capital standards necessary to ensure their fiscal stability.
  Secondly, that over a set period of time they are gradually reduced 
in size so that America's housing eggs are not all in one basket.
  And finally, that the leadership of Freddie and Fannie be replaced. 
The millionaire captains who grounded this ship have proven they are 
not capable to steer us to calmer waters.
  I am also hopeful that should this plan work, I unfortunately believe 
the underlying bill on housing misses the mark. Rather than a $300 
billion bailout for the housing areas, what we've seen as an 
alternative is that the HOPE NOW Alliance, the private sector, has 
stepped forward to help 1.7 million homeowners transfer from those high 
ARM rates, adjustable rate mortgages, to fixed rate mortgages so they 
can keep their home.
  And I fear, too, that the way we pay for this bill, which would hurt 
American companies creating jobs here in

[[Page 16034]]

America, and raises taxes on those with second homes, vacation homes, 
investment homes, retirement homes, will further hurt our housing 
economy at a time we simply can't afford it.
  Reluctantly, I oppose this bill.
  Mr. NEAL of Massachusetts. Mr. Speaker, might I inquire as to how 
much time I have remaining?
  The SPEAKER pro tempore (Mr. Ross). The gentleman from Massachusetts 
has 5\1/2\ minutes remaining. The gentleman from Louisiana has 7 
minutes remaining.
  Mr. NEAL of Massachusetts. With that, Mr. Speaker, I would like to 
recognize the gentleman from Georgia (Mr. Scott) for 3 minutes.
  Mr. SCOTT of Georgia. Mr. Speaker, I thank very much the gentleman 
from Massachusetts.
  First of all, some of my colleagues may not realize this but our 
economy is ill. It is sick. It's in a desperate situation, and more 
than that, millions of American citizens are just barely hanging on by 
their fingernails. At the core of this problem is housing.
  Now, it's important for us to realize that this is not a Democratic 
plan. It's not a Republican plan. This is a plan that has been put 
together by both Democrats and Republicans and the White House and the 
Financial Services Committee in the House and the Banking Committee in 
the Senate.

                              {time}  1430

  The American people are crying out for help. They are watching us 
intently to see if we are going to respond.
  Everything in this bill has been worked out, and everything in this 
bill has been applied with safety and soundness. We hope, Mr. Speaker, 
that especially what we are offering in support of the GSEs, Fannie and 
Freddie, and to an extent the home loan banks, is a piece of medicine 
that will be taken lightly, simply from the mere fact of us putting 
this forward. Hopefully we will send a loud message to all the 
financial markets and to the investors and give them the confidence to 
move in without us even having to go the extra step.
  In the process of this, as Secretary Paulson has indicated, it is 
important that we give this strong medicine an opportunity to get a 
vote of confidence from Wall Street and the investors. Fannie Mae and 
Freddie Mac control half of the outstanding mortgage loans in this 
country. That's an extraordinary amount. That's nearly $6 trillion. If 
that goes by the wind, our economy sinks. It will be a dereliction of 
our duty as the Congress of the United States for us not to put the 
full weight of the Treasury Department with the consultation of the 
Federal Reserve Chairman in place to make sure there is stability. 
Before the Secretary even moves, he must send a declaration to document 
that this is necessary to protect the stability of the market.
  Now, Mr. Speaker, on the other point, we can't just deal with Fannie, 
we have got to protect that. But we have also got to protect our 
States, our local communities, right at the grassroots level. There are 
communities that are being devastated due to foreclosures, where we are 
averaging over 1,000 foreclosures each day, to give the local 
communities the help they need to buy up these loans.
  Mr. McCRERY. Mr. Speaker, I yield 3 minutes to the distinguished 
member from Wisconsin, a member of the Ways and Means Committee and the 
ranking member of the Budget Committee, Mr. Ryan.
  Mr. RYAN of Wisconsin. I thank the gentleman for yielding.
  Mr. Speaker, we do have a crisis. Action does need to take place. 
This isn't the solution. This does not address the root cause of why we 
are in this problem. These companies, which are for-profit companies, 
have abused their trust of the American taxpayer, and we are not 
adjusting this.
  If we're going to do this, then let's make darn sure we're not 
putting taxpayers at risk in the future. This makes it worse. This bill 
says you can continue to go on and make your profits and we'll still 
bail you out down the road. This bill says you can continue having 
these big multimillion-dollar bonuses for your executives and go make 
all of this money, and if you fail, we'll get you.
  What this bill says, what Congress is saying today, is if you're big 
enough, if you're politically corrected enough, then we will privatize 
your profits and we will socialize your risk. The taxpayer will bail 
you out.
  Mr. Speaker, as a representative of taxpayers, not shareholders, we 
should reform these institutions so we do have a liquid mortgage 
market, so we do securitize the secondary mortgage market, so people 
can get affordable homes. But let's do it so we don't have costly 
taxpayer bailouts.
  This whole issue is about to put more than a trillion dollars of debt 
on to our books. And yet we're going to let them continue to leverage 
themselves and kick this can down the road. We should be more 
responsible with taxpayer dollars. We should address this crisis, 
reform these institutions, so that we're not down this path 5 years 
from now.
  When I first came to Congress 10 years ago, I criticized these 
organizations. And everybody told me, you're wrong, they pose no risk. 
Well, here we are today. I just wonder where are we going to be in 4 
years, in 5 years, with the passage of this bill? We're saying, let 
them continue doing what they're doing. We're going to give them 
explicit lines of credit from the Treasury. We're going to even buy 
their stock, and maybe hopefully, maybe just sort of, we'll have a 
regulator that will contain these institutions.
  That is not responsible. We should reform these institutions now, 
either privatize them or publicize them, bring them into the government 
and make them government agencies, because, after all, the taxpayer is 
going to be left holding the books on this bailout. Mark my words.
  We've got to fix this. This is irresponsible. This is not the right 
way to do it. What we ought to do is go back to the drawing board and 
make sure that this costly bailout isn't magnified down the road.
  Mr. NEAL of Massachusetts. Mr. Speaker, a reminder that the Bush 
administration and the Secretary of the Treasury, one might argue the 
most important appointment the President of the United States makes, 
they have been party to this proposal, they have been involved from day 
one, they support what we are doing here today.
  With that, I would like to yield 2 minutes to the gentlelady from New 
York (Mrs. Maloney).
  Mrs. MALONEY of New York. Mr. Speaker, I rise in strong support of 
this bill which will restore some order to our Nation's housing market 
and will provide greater certainty to our economy. It was developed in 
a bipartisan way with the support of the administration.
  Important aspects of this legislation include the FHA Housing 
Stabilization and Homeownership Retention Act, which provides mortgage 
refinancing assistance to keep at least 400,000 families from losing 
their homes and to help stabilize our housing market at no cost to the 
American taxpayer. This bill strengthens regulations of the GSEs by 
creating a strong independent regulator with real teeth, responsibility 
and power.
  Very important for my district in New York and other high-cost areas, 
it raises the GSE loan limits. This bill creates a new permanent, 
affordable housing trust fund, a very creative effort led by our 
chairman, Barney Frank, financed by the GSEs and not by taxpayers, to 
fund the construction and maintenance of affordable rental housing for 
low and very low-income individuals and families nationwide in both 
rural and urban areas.
  This bill includes important provisions that will provide for a 
backstop of Fannie Mae and Freddie Mac to shore up the housing market, 
a critical piece of restoring confidence in our economy. This is done 
by giving the Secretary of the Treasury the authority to increase the 
already existing line of credit to Freddie and Fannie for the next 18 
months, as well as giving the Treasury Department stand-by authority to 
buy stock in these companies, to provide confidence in the GSEs and 
stabilize housing finance markets.

[[Page 16035]]

  Not only are we addressing the current crisis but we are working to 
prevent future abuses and crises by establishing a nationwide loan 
originator licensing and registration system that will set minimum 
standards for loan originator licensing, substantially improving the 
oversight of the mortgage brokers and the whole industry.
  It is a much-needed reform. I urge my colleagues to support it.
  Mr. McCRERY. Mr. Speaker, I understand that the majority is ready to 
close on their side.
  I would ask unanimous consent that any time that I don't use in my 
closing be reallocated to the minority on the Financial Services 
Committee. It shouldn't be much, but whatever is left, I would like for 
them to have it.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Louisiana?
  There was no objection.
  Mr. McCRERY. With that, Mr. Speaker, let me just say I have heard 
some of my colleagues on my side of the aisle talk about the problems 
in this bill.
  I certainly agree with many of their assessments of some provisions 
in this bill. One conclusion, though, that I disagree with is that a 
vote for this bill is irresponsible. I think, in fact, just the 
opposite. I think the responsible vote is to vote for this bill.
  I think it is important that this bill pass today, not next week or 
in a special session in August, but today. I think timeliness is 
important, and the responsible vote, unfortunately, because there is a 
lot of things I disagree with in this bill, but the responsible vote, 
Mr. Speaker, is an ``aye'' vote today for this bill.
  With that, Mr. Speaker, I yield back the remainder of my time to the 
gentleman from Alabama (Mr. Bachus).
  Mr. NEAL of Massachusetts. Mr. Speaker, as usual, we appreciate the 
judicious approach to legislation that Mr. McCrery has offered today.
  As is always the case with legislation that comes to this floor, 
there are parts of it that some of us don't care for. But he addressed 
the issue of urgency. The Secretary of the Treasury spoke to the issue 
of urgency. President Bush dropped his veto threat. And a reminder, the 
people that are responsible for the tax title portion of this 
legislation voted for it 35-5 in the Ways and Means Committee.
  This is complex legislation. There is a virus that is moving through 
the housing market across America. The result is everywhere for us to 
see.
  The softening of markets everywhere are directly related to what's 
happened in the housing market. We have a chance today to stem the tide 
of those effects. We should take advantage of it.
  The SPEAKER pro tempore. All time for debate for the Committee on 
Ways and Means has expired.
  The gentleman from Massachusetts (Mr. Frank) will control 40 minutes 
and the gentleman from Alabama (Mr. Bachus) will control 43 minutes.
  The Chair recognizes the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Speaker, I recognize myself for such 
time as I may consume.
  Let me concur with the remarks of the gentleman from Louisiana. I 
don't like everything in this bill either. It is inconceivable to me 
that anybody would like everything in this bill, because it is the 
product of a very significant set of compromises. To some extent, 
frankly, the challenges the Congress faced and the administration faced 
in dealing with the housing crisis--remember, we are here in 
substantial part because of a terrible housing crisis that has affected 
the economy of the U.S. and the world. We are dealing with the 
consequences of bad decisions and inaction and malfeasance from years 
before.
  Obviously it requires a joint effort. To some extent, this is a test 
of our ability as a self-governing people to govern. Because if 
everybody held off and said I am only going to support a bill with 
which I am in complete agreement, we would not be able effectively to 
respond to this crisis.
  So I appreciate the President's policy statement saying I don't like 
everything in this bill, but I'm going to sign it and you should pass 
it quickly. I think that's true of all of us who have looked at this.
  Now I do want to refute some of the myths. One, we heard reference to 
a $300 billion program. My colleague, the ranking member, sent out a 
Dear Colleague letter that said the part of the bill that tries to 
avoid mortgage foreclosure is a $300 billion program. In fact, it's a 
$1.7 billion program, according to CBO.
  Yes, it's $300 billion, $300 billion is the total amount of mortgages 
that could be insured. It would cost $300 billion only if no one who 
had one of those mortgages ever made a payment of a penny and the 
houses were worth nothing. Obviously it's not a $300 billion program. 
That's why CBO said our version was $1.7 billion.
  We also heard from some of the Republicans that it is a $5 trillion 
program. What they call a $5 trillion program, the stand-by authority 
that the President has asked us to give the Secretary of the Treasury, 
the Congressional Budget Office says is a $25 billion program but 
probably won't be spent.
  So I think we need to understand conservative Republican arithmetic. 
It is the most inflationary arithmetic I ever heard. $1.7 billion of 
CBO becomes $300 billion. $25 billion from CBO becomes $5 trillion. I 
hope it will be very clear to people that these numbers that are being 
thrown around are simply inaccurate and misleading.
  I also want to talk now to some of my friends on the left and others 
who have, I think, been misrepresenting what we are doing with regard 
to Fannie Mae and Freddie Mac giving stand-by authority, saying this is 
bailing out the corporations, that this is welfare for the rich.
  Let me read the list of people, organizations, who have specifically 
endorsed what this bill does with regard to stand-by authority to keep 
Fannie Mae and Freddie Mac from collapsing:
  The Consumer Federation of America, the Lawyers' Committee for Civil 
Rights Under Law, the Leadership Conference on Legal Rights, the League 
of United Latin American Citizens, the Mexican American Legal Defense 
Fund, the National Association of Consumer Advocates, the National 
Council of La Raza, the National Urban League, the National Fair 
Housing Alliance, the National Low Income Housing Coalition.
  Mr. Speaker, apparently there has been some infiltration. Apparently 
the corporate welfare advocates have taken over all the liberal 
organizations in America. We will probably have to investigate that, 
because all of the organizations with which I have worked for 28 years, 
who are the effective advocates for low-income housing, say pass this 
bill, please, and please specifically help Fannie Mae and Freddie Mac.

                              {time}  1445

  So the amount of misinformation here is enormous.
  Finally, I want to address the question of procedure. Everything in 
this bill, with the exception of the emergency request from the 
President for stand-by authority for Fannie Mae and Freddie Mac, has 
been fully debated in the Financial Services Committee and voted on and 
debated on the floor of this House.
  We are repackaging a number of things. Sometimes it takes our friends 
in the Senate two, three and four tries to get something done, so we 
keep serving the ball to them. Everything in this bill, with the 
exception of the emergency stand-by authority, has been thoroughly 
debated and voted on the floor of the House, and no part of it got less 
than 260 votes. So we're hardly rushing through things for the first 
time.

                                                    July 17, 2008.

   Statement on Recent Federal Action To Provide Stand-by Support to 
                       Fannie Mae and Freddie Mac

       The undersigned consumer, civil rights and fair housing 
     organizations commend U.S. Treasury Secretary Paulson, 
     Federal Reserve Board Chairman Bernanke and leaders of the 
     Senate Banking and House Financial Services Committees, for 
     acting quickly to provide for stand-by support to Fannie Mae 
     and Freddie Mac, the two government sponsored housing 
     enterprises (or GSEs). This support reaffirms the importance 
     of the two companies in providing liquidity and stability to 
     the housing market during this tumultuous period.

[[Page 16036]]

       The U.S. economy has a deep stake in the success of Fannie 
     Mae and Freddie Mac as companies with an essential public 
     mission. As history has shown, both GSEs are vital to the 
     long-term health and success of our nation's housing finance 
     system. Furthermore, their public mission activities have 
     been and must continue to be instrumental in expanding 
     opportunities for homeownership and affordable rental housing 
     for consumers.
       The establishment of a strong independent regulator, as 
     provided for by the housing measure pending before Congress, 
     will serve to maintain public confidence that Fannie Mae and 
     Freddie Mac remain safe and sound and thus able to continue 
     to carry-out their vital public mission. Immediate action on 
     GSE regulatory reform signals that Fannie Mae and Freddie Mac 
     functions are essential to the housing market and to 
     consumers.
       Center for Responsible Lending
       Consumer Action
       Consumer Federation of America
       Consumers Union
       Lawyers' Committee for Civil Rights Under Law
       Leadership Conference on Civil Rights
       League of United Latin American Citizens (LULAC)
       Mexican American Legal Defense Fund (MALDEF)
       National Association of Consumer Advocates
       National Association of Neighborhoods
       National Community Reinvestment Coalition
       National Consumer Law Center (on behalf of its low-income 
     clients)
       National Council of La Raza
       National Fair Housing Alliance
       National Low Income Housing Coalition
       National Urban League
       Opportunity Finance Network

  Mr. Speaker, I reserve the balance of my time.
  Mr. BACHUS. Mr. Speaker, I rise in opposition to this legislation and 
recognize myself for such time as I may consume.
  Mr. Speaker, I do rise in opposition and I do so reluctantly because 
I acknowledge that we are faced with a crisis, and because there are 
provisions in this bill that I strongly support.
  The bill strengthens GSE capital requirements, it enhances the 
government's receivership authority if they get in trouble. These are 
significant improvements over the current regime. Even more 
importantly, the legislation contains a measure I introduced over a 
year ago to create a comprehensive system for licensing and 
registration of mortgage originators. This provision will do more to 
protect consumers and prevent many of the abuses that caused the 
subprime crisis in the first place than just about any other reform we 
can make.
  The problem, Mr. Speaker, is that, rather than bringing up a clean 
bill to the floor to improve GSE regulation, to modernize the FHA and 
to crack down on rogue elements in the mortgage industry, the majority 
has brought us something else entirely, and they prohibited any 
amendments, it's a ``take it or leave it.''
  The bill before us today includes provisions that actually would 
undermine GSE safety and soundness and fiscal discipline by diverting 
billions of dollars from Fannie Mae and Freddie Mac and from homeowners 
and taxpayers to pay for three big new government programs. It does so 
at a time when we should instead be doing everything within our power 
to stabilize the GSEs and our housing markets and avoid the need for an 
even bigger taxpayer bailout down the road.
  Mr. Speaker, the most troubling aspect of this legislation remains 
the affordable housing fund, which would siphon $9 million from the 
GSEs over a 10-year period to fund State and local initiatives. One of 
the primary beneficiaries of these funds will be political advocacy 
groups across the country that claim as some part of their mission the 
promotion of affordable housing.
  When the affordable housing fund was first introduced in GSE reform 
legislation that the House considered in May of last year, I cautioned 
that this would be an additional cost on the GSEs; I said that on the 
floor of this House. At that time, their combined capitalization was 
roughly $106 billion. Today, their market capitalization is roughly $20 
billion. One year and $86 billion in lost market capitalization later, 
a plan now to divert billions of dollars from the GSEs to fund another 
expensive government housing program is not only just bad policy, it's 
irresponsible.
  Also, I believe unwise are provisions of this bill authorizing--and 
let me say this: The chairman of the full committee said that I have 
referred to this as a ``$300 billion program.'' I do that again today 
without apology. Mr. Speaker, this bill authorizes $300 billion in new 
FHA loan guarantees. Now, the chairman said that I said it would cost 
that in my letter to the Members. But, in fact, I said the $300 billion 
program would do little to help struggling homeowners. I said a $300 
billion program. I didn't say that would be the ultimate cost. In fact, 
it authorizes $300 billion in guarantee. If anybody doubts that, 412 of 
the bill, line 19, it says, ``The aggregate original principal 
obligation of all mortgages insured under this section may not exceed 
$300 billion.'' At no time have I said that the ultimate cost would be 
$300 billion.
  In fact, in another letter to the Members I quoted the Washington 
Post and what they said about the cost. And that cost will be in excess 
of $1 billion in all likelihood. So they are three new programs, all of 
them costing more than $1 billion.
  And as I said, this new FHA loan guarantee program would have the 
effect of bailing out lenders and investors seeking to offload their 
riskiest loans on an FHA already close to being overwhelmed by the 
larger role that it's being asked to play in the mortgage market.
  Many of us on this side of the aisle have questioned the fairness of 
asking 110 million Americans who are paying their mortgages on time, 
renting or owning their homes outright to subsidize those who make 
different choices.
  The version of this legislation that the House approved last May at 
least had the virtue of being upfront. It required taxpayers to foot 
the bill directly for this ill-conceived Federal program. The version 
we are considering today purports to protect taxpayers by changing and 
shifting those costs over on the GSEs--the same GSEs are asked to pick 
up this cost, but at the same time we authorize the taxpayer to lend 
them money--by imposing these costs of the bailout on the GSEs through 
the affordable housing fund. But as we found in the last couple of 
days, as I said, that's the same thing as asking the taxpayers to foot 
the bill no matter how circuitous you do it.
  On this point you don't take my word for it. Look at the editorial of 
the Washington Post, not a conservative newspaper. Here's what they 
said: ``The bill would fund the bailout through a fee on Fannie and 
Freddie, possibly $531 million in 2009. This is rather circuitous, 
given that government backing subsidizes Fannie and Freddie indirectly 
(and that they may soon be borrowing directly from the Treasury)''--and 
they will when this bill passes, or could. ``And it contradicts the 
purposes of the mortgage bailout, which is to shore up housing prices: 
Fannie and Freddie will pass the fees along to their customers, thus 
decreasing housing liquidity and depressing the residential real estate 
market.'' Despite that, despite liberal newspapers agreeing with 
conservatives, it's in the bill, and we won't have an opportunity to 
get it out.
  The editorial concludes by asking the question, and I asked the same 
question: ``Wouldn't it be simpler and safer to let a new regulator 
address the GSEs' capital needs before plunging them even deeper into 
the housing quagmire?'' Mr. Speaker, I couldn't agree more.
  In addition to asking taxpayers to bail out the GSEs and lenders and 
investors seeking to rid their portfolios of their most toxic 
mortgages, this bill goes a step further. It establishes yet a third 
government program, this one a $4 billion grant program--paid for by 
the taxpayers--to fund the purchase of foreclosed properties by States 
and local governments. This is nothing more than a bailout of investors 
and real estate speculators who made risky investments but who will now 
be able to dump their foreclosed properties on State and local 
governments.
  This approach invites more, not fewer, foreclosures by providing 
incentives to lenders to foreclose on properties rather than attempt to 
work

[[Page 16037]]

with struggling homeowners to keep their houses or property. Besides, 
setting the government up as a landlord is not my idea of a wise use of 
taxpayer dollars or an answer to the housing crisis. What in the world 
it is doing in a bill purportedly designed to avert foreclosures and 
assist troubled homeowners is anyone's guess.
  This legislation unfortunately contains yet another--despite all 
that--irresponsible, in my opinion, provision from the Senate-passed 
bill, one that establishes a moratorium on the FHA's authority to 
engage in risk-based pricing. At a time when we're asking the FHA to 
play a greater role in assisting troubled homeowners seeking to 
refinance, barring the agency from pricing its product according to 
risk is a serious mistake. Not only will this moratorium prevent the 
FHA from serving more homeowners, it will lead to higher mortgage costs 
for everyone as the FHA is forced to raise its upfront and annual 
premiums to compensate for its inability to charge premiums based on 
risk.
  If we've learned anything in the last 2 or 3 years it's that there's 
risk out there, and we ought to price for that risk. We don't do that 
in this bill; in fact, we establish a moratorium to stop that.
  This legislation--the entire legislation--presents us with extremely 
tough choices. It includes long-needed reforms, as I said, but it also 
adds costly and unnecessary programs that make it impossible for many 
of us to support. It takes money from the GSEs when they're already in 
trouble. It creates two big new government housing programs even though 
there's an abundance of housing programs already existing. If they are 
not doing the job, let's reform the ones we have. And it places a 
moratorium on risk-based pricing.
  If that weren't enough, the bill now includes a proposal to support 
the GSEs by direct government investment of taxpayer dollars in the 
common stock of these privately held companies.
  When the Treasury proposals were announced last week, we were told it 
was essential to avoid a catastrophic failure of Fannie and Freddie and 
the turmoil in global capital markets. We were told we needed to pass 
it within 48 hours. Confusingly, at the same time we were told that the 
Treasury needed blank check authority, we were assured that it would 
never be used. We were told it must be voted on immediately, even 
though we were told at the same time the Federal Reserve had agreed to 
provide liquidity in the event of an emergency if there was one.
  Those assurances notwithstanding, giving unlimited authority to a 
government agency for unprecedented action is a serious matter in a 
system that's based on checks and balances. Deciding this issue without 
hearings and within a 1-week span with virtually no deliberation and no 
opportunity to amend is a surrender of congressional responsibility. 
Congress did not do that with Chrysler, Lockheed or Conrail, which all 
were extensively studied and debated before action taken.
  It is likely that the concept of ``If you build it, they will come'' 
applies here; if we give them this authority, it will be used, and I 
believe not only to provide liquidity, but to purchase an equity stake 
in these private, stockholder-owned companies.
  Even a small government investment in Fannie and Freddie is 
incremental nationalization, let's be honest, a path our government 
should not go down without serious consideration of the consequences. 
One is crowding out the private mortgage market as we give them ever 
larger sources of cheap money. How do private lenders compete? They 
don't. Not fairly.
  We should hesitate to saddle taxpayers with losses in tough times 
that should be absorbed by those who took the risks and reaped the 
billions in profits when times were good.
  By raising concerns, those of us who questioned a rush to judgment on 
a blank check request were able to delay the consideration last week 
and to make some beneficial changes in the bill. As a result, even 
Senators Dodd and Shelby have now acknowledged--and I think Senator 
Shelby has thought all along--that the blank check needs to be examined 
very carefully.
  Mr. Speaker, we can do better than this bill. Given the high stakes, 
we must do better. We should reject this legislation and immediately 
substitute it with a clean bill that reforms the GSEs, modernizes FHA, 
and increases the Treasury lending authority by a set amount.
  Mr. Speaker, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself 1 minute.
  I welcome the evolution in the gentleman's thinking. A week ago he 
sent me a letter saying we should not do the FHA modernization, so he 
has apparently expanded that, and I appreciate that.
  There is one other myth, though, that I forgot to refute that he 
trotted out, namely, that this is going to force the FHA to take bad 
loans. That could not be further from the truth. This bill explicitly 
leaves the FHA in complete control of the decision to guarantee a loan 
or not. Nothing in this bill coerces the FHA. The lenders, to be 
eligible, would have to write down the loan by a significant 
percentage. An independent decision is then made by the FHA as to 
whether or not they want to guarantee it.
  I now yield 3 minutes to the gentlewoman from California, a major 
author of important parts of this bill.

                              {time}  1500

  Ms. WATERS. Mr. Speaker and Members, I rise in strong support of this 
legislation.
  I want to thank Barney Frank for the wonderful work that he has done 
negotiating some very difficult parts of this bill. This bill is 
urgently needed to help our Nation address the current foreclosure 
crisis and its impact on world financial markets. I want to thank a 
number of people, the members of the Subcommittee on Housing and 
Community Opportunity and the bipartisan members who voted for many 
aspects of this bill when that legislation came before our committee. I 
want to thank the Black Caucus for standing strong and insisting that 
we have money to help those communities that were targeted by the 
lenders for this subprime mess that they put us in.
  Do I like everything in this bill? No, I don't. I'm frankly 
disappointed that we were unable to strike the language that was placed 
in this bill on the Senate side that effectively killed one of the most 
successful programs to help poor and low-income would-be homeowners, 
the down payment assistance program. But this is not the end of that. 
We shall be back so that we can continue that program.
  Do I support some of the more controversial aspects of this bill? I 
do. I stand here today in support of the GSEs. I think it is very, very 
important that we maintain support for the GSEs so that we can 
stabilize this economy. It's absolutely unthinkable that we would allow 
these GSEs to go down in any shape, form or fashion when they hold 50 
percent of all of the mortgages in this country and about $6 trillion 
in debt.
  And so, I must commend the President--I have never thanked him for 
anything--for understanding the best interests of this country and 
removing his veto threat because of the $4 billion that we have in CDBG 
money. They say politics makes strange bedfellows from time to time and 
this bill may be the finest example of that.
  I was most active on the modernization of the Federal Housing 
Administration and the $4 billion in the CDBG funding for States and 
localities to purchase, rehabilitate and resell or rent out abandoned 
and foreclosed homes. The modernization of FHA has long been a priority 
of mine because in recent years FHA had become obsolete in many parts 
of the country due to its low loan limits, outdated rules and slow 
bureaucracy. I saw too many low-income home buyers in California with 
little choice but to turn to the subprime mortgage market for 
assistance.
  This Congress, I introduced H.R. 1852, the Expanding American Home 
Ownership Act of 2007, to give FHA the tools and resources to allow it 
to assist more low-income homebuyers. H.R. 1852

[[Page 16038]]

passed the House on September 18, 2007, on a bipartisan vote of 348-72, 
and again on May 8 of this year, as part of the H.R. 3221, the first 
go-round on this housing rescue package.
  I want to thank all of the coalition of groups, the mayors and the 
organizations that supported this bill.
  Mr. BACHUS. Mr. Speaker, at this time, I would like to introduce my 
letter of July 14 and let the Members themselves determine whether the 
correct characterization would be made on my statement.

                                         House of Representatives,


                              Committee on Financial Services,

                                    Washington, DC, July 14, 2008.
     Hon. Barney Frank,
     Committee on Financial Services, House of Representatives, 
         Washington, DC.
       Dear Mr. Chairman: It is unquestionably true that the 
     financial stability of Fannie Mae and Freddie Mac is 
     critically important to the housing market and in turn to the 
     overall economy. It is also quite apparent that as a result 
     of a weak economy, short seller activities and a declining 
     housing market, Fannie and Freddie are facing substantial 
     financial challenges. Having said that, the sweeping changes 
     contemplated in the proposal made by the Treasury Department 
     over the weekend represent a far-reaching overhaul of the 
     financial regulatory structure of our housing market. Making 
     such broad changes in a precipitous manner without adequate 
     study and analysis is unprecedented and, perhaps, 
     unnecessary.
       The problem immediately at hand seems to have been 
     addressed yesterday by the decision of the Federal Reserve to 
     open the discount window to Fannie and Freddie. It also 
     appears this intervention by the Federal Reserve will be 
     sufficient to provide adequate liquidity for these 
     enterprises to meet any obligations for the near future.
       With this Federal Reserve liquidity facility in place, a 
     more long-term structure can be given the careful analysis 
     that is necessary to avoid the all too common problem of 
     unintended consequences when the regular legislative order is 
     bypassed. Please consider a process which will allow all 
     sides of this issue to be given the careful consideration 
     they so clearly deserve.
       I do believe there is need for expedited legislation and 
     that action is a basic GSE reform bill. This legislation 
     could be drafted and taken to the floor with minimal 
     preparation since its provisions were carefully vetted in 
     hearings and markup.
           Sincerely,
                                                   Spencer Bachus,
                                                   Ranking Member.

  At this time, I will recognize the gentlelady from Illinois, the 
subcommittee Chair, Mrs. Biggert, for 5 minutes.
  Mrs. BIGGERT. I thank the gentleman for yielding.
  Mr. Speaker, Americans across the country and in my congressional 
district are feeling the pain as a result of the instability in the 
housing market, and they're feeling the pinch at the pump because of 
high energy prices. Congress should act responsibly to address both 
issues. We need a serious energy debate now. The American people cannot 
wait any longer. At the same time, it is clear that we need to restore 
investor confidence in the housing market. And that is why we're here 
today.
  For starters, we need to pass critical housing reform bills, an 
effort that could have been a slam-dunk last year. We could have given 
the regulators some teeth to shore up our financial institutions and 
prevent similar turbulence in the housing market in the future. But we 
did not. Instead, critical housing bills were littered with 
controversial provisions, and the process was drawn out.
  So here we are today, at a ``take-it-or-leave-it'' moment, 
considering a number of items that should not be on the table but are, 
unfortunately, fused to the three most important parts of the housing 
stimulus legislation.
  I feel like we're in a catch-22 here, for in order to enact the good, 
we have to swallow the bad. What is the good? It's restoring investor 
confidence in the market, plain and simple. It's also GSE reform, FHA 
reform and increased funding for housing counseling, all of which are 
badly needed and long overdue.
  Counselors can help prevent foreclosures by guiding homeowners into a 
loan that best meets their budget needs. My colleague, Ruben Hinojosa, 
and I have been two of the leading advocates in Congress for financial 
literacy, which includes housing counseling. I cannot emphasize enough 
the importance of housing counseling for homeowners in trouble or those 
seeking to purchase a home for the first time. Counselors are working 
hard in my congressional district helping people save their homes. I 
would like to thank them and all of the counselors across the country. 
And I'm hopeful that this bill gives them more tools to accomplish 
their mission.
  The FHA and GSE reforms in this bill will add much-needed liquidity 
to the market while providing consumers with an alternative to bad, 
subprime loans.
  I'm also pleased that the FHA reform bill increases the loan limits 
so that the low- and middle-income Americans living in the high-cost 
areas like Chicagoland also can secure their piece of the American 
Dream through FHA-backed mortgages. The GSE reform bill will rein in 
Fannie and Freddie so that these housing giants will more safely and 
soundly adhere to their missions to foster affordable housing 
opportunities for Americans. Are these two reform bills enough? No. But 
they're a good start.
  It's too bad that Congress waited so long before agreeing to the 
significant changes for the GSEs, Fannie Mae and Freddie Mac. The House 
began the process 3 years ago when it passed a bill, with my support, 
that would have improved regulation of these companies and may have 
averted some of the financial turmoil that they're now experiencing.
  But now we have to move forward, and we have to move forward in this 
Congress on a bipartisan basis. I think that the House and Senate have 
wasted time outbidding each other on how much taxpayer funding to spend 
on bailing out some of the irresponsible lenders and those who 
speculated that the market would go up forever. Now they have run out 
the clock and Congress is being forced to risk taxpayer dollars in 
order to avert the economic crisis that could occur if the two 
companies failed. That kind of leadership is not acceptable.
  The final version of the bill also includes some measures that I 
fought against in committee in what amounts to a tax on middle class 
homeowners. It siphons money from Fannie and Freddie to pay for a new 
congressional fund for housing programs. The bill also puts into place 
an FHA refinancing scheme that will benefit lenders and borrowers who 
acted irresponsibly. The block grant provision has no safeguards and 
could be ripe for fraud. And the list goes on.
  Do I think the excess provisions in this bill are necessary to 
stabilize the housing market? No. Is this Congress mandating that the 
taxpayers foot the bill for these excesses in order to bring stability 
to our economy and the housing market? Sadly, yes.
  However, because of the urgent need to stabilize the marketplace and 
restore investor confidence, I support the bill, and I congratulate the 
chairman of the committee for his work on this.
  Mr. FRANK of Massachusetts. I now recognize the Chair of the 
Financial Institutions Subcommittee, the gentleman from Pennsylvania, 
for 1\1/2\ minutes.
  Mr. KANJORSKI. Mr. Speaker, I rise today with a heavy heart, like my 
compatriot on the other side, who is my ranking member on the 
subcommittee that I chair.
  This is not a perfect bill. And I have heard the ranking member of 
the full committee unfortunately take the position that he is opposed 
to the bill. That sort of hurts my feelings and my best judgment that 
we're not here to pick the best bill or to argue on the particulars or 
even at this time to find fault.
  But let me make a salient point, because I have heard a lot of 
discussion on the other side of the aisle about responsibility. Let me 
point out that what we're doing here is increasing the Federal debt 
limit by $800 billion. That is more money than the entire debt of the 
United States from the beginning of the United States in 1776 until the 
beginning of the Ronald Reagan administration, when we only had a debt 
of $800 billion. In the succeeding 28 years, since the first day of the 
Reagan administration, we've run up more than $8 trillion in debt. And 
now we're jumping $800 billion more. That is what we

[[Page 16039]]

ought to really be talking about. That is what we should have reserved 
time on. That is what we should be discussing.
  But I ask you a very simple question, and I'm going to leave it as a 
question: Who occupied the White House and led this country in that 28-
year period?
  Mr. Speaker, I rise today to express support--albeit with some 
reluctance--for this latest version of H.R. 3221, now known as the 
Housing and Economic Recovery Act. While we must act quickly to 
stabilize our economy and mortgage markets by passing this bill, the 
package before us is somewhat imperfect. That being said, I will vote 
for this legislation in order to help working Americans to purchase or 
remain in their homes, protect the assets of senior citizens, and 
assist veterans with their housing needs.
  H.R. 3221 contains many desirable policy reforms. It will put in 
place a strong, independent regulator with robust bank-like powers to 
ensure the safety and soundness of Fannie Mae and Freddie Mac. I have 
worked for more than 8 years as a leader on the Capital Markets 
Subcommittee to reach a consensus on world-class regulatory reform for 
these sizable financial institutions.
  The bill sensibly modernizes the existing operations of the Federal 
Housing Administration, too. Further, H.R. 3221 improves the ability of 
the FHA to help many homeowners now facing the prospect of a 
foreclosure to remain in their homes, but only at a significant cost to 
the financial institutions currently holding the loans and the promise 
that the government can share in the gains in the values of the homes 
that it helps to save.
  In addition to altering the regulation of the Federal Home Loan 
Banks, the bill will permit these institutions to provide credit 
enhancements for tax-exempt municipal bonds, as first proposed in my 
bill, H.R. 2091. The ongoing problems in the bond insurance markets 
have affected the ability of municipalities to issue affordable bonds 
to construct roads, build schools, and expand hospitals. This important 
reform helps to fix that problem in the short term.
  H.R. 3221 further includes several important provisions that will 
enable the Federal Home Loan Bank System to accomplish more in the 
broad area of economic development, community development, public 
finance, and public infrastructure. The System is uniquely positioned 
to promote such activities, and these reforms build on the 1999 law I 
worked to enact.
  Specifically, we have added explicit economic and community 
development language to the System's mission in guiding the new Deputy 
Director. Our intention is that the regulator should apply this 
direction on mission to all approved activities, including advance 
programs, new business activities, letters of credit, acquired member 
asset programs, and the full use of their investment powers.
  This bill also includes a number of promising reforms to help the 
manufactured housing industry. To provide more affordable housing, the 
bill will require Fannie Mae and Freddie Mac to serve this market 
sector. The bill also updates FHA loan requirements for these homes.
  Moreover, this bill contains two significant reforms on which I have 
worked for some time. More than 3 years ago, I proposed legislation to 
require the licensing and registration of those individuals who 
originate mortgages. The new registry and broker licensing conditions 
in this bill closely adhere to the proposal I first made. The 
legislation also contains my amendments to protect the independence of 
appraisers and allow them to serve as honest referees of a home's 
value.
  While there is much to like in this bill, we could have employed a 
better process in bringing up several matters now found in this 
extensive package. In this regard, I would like to focus on the GSE 
backstop and the increase in the debt limit.
  Less than 2 weeks ago, the Bush administration put forward an 
expansive GSE liquidity backstop proposal. Because this initial plan 
caused significant concerns for many, we modified this standby 
authority before inserting it into this package.
  As a result, the backstop now includes several taxpayer protections 
like limiting dividends, capping executive pay, and ensuring the 
government receives preferences and priorities in repayment by the 
GSEs. We could have, however, gone even further in these safeguards by 
capping the government's total exposure. We also should have allowed 
for more public scrutiny of these matters than time allowed us.
  Ironically, the Administration's last-minute request on the backstop 
alters the balance we previously sought to achieve on GSE structural 
reforms. In particular, the package before us will remove presidential 
appointees from the boards of Fannie Mae and Freddie Mac. It also 
eliminates governmental appointees to the boards of the Federal Home 
Loan Banks.
  If the government now has a greater potential to provide more capital 
to the GSEs, it should have maintained a seat at the table in their 
daily governance. I very strongly believe that these public appointees 
have helped to focus the GSEs on their public missions and protect 
taxpayers. I will therefore very closely monitor the implementation of 
these changes to safeguard the government's interests.
  The decision to use this package as the ultimate vehicle for 
increasing the national debt ceiling by $800 billion to $10.6 trillion 
is also very concerning. When Ronald Reagan first took office, we had 
only $800 billion in national debt. Because this increase in the public 
debt limit requested by the Bush administration equals the amount the 
country ran up in its first 204 years, we should have considered the 
matter separately rather than pursuing this expedient path.
  On the whole, however, the somewhat imperfect compromise before us is 
necessary and important. We cannot allow the proverbial perfect to be 
the enemy of the good. We need to take strong, swift action in order to 
end the negative feedback loop that continues to occur in our capital 
markets and the housing sector. Because this consensus product is 
designed to achieve that goal, I will vote for H.R. 3221.
  Mr. BACHUS. Mr. Speaker, I recognize the minority leader, the 
gentleman from Ohio (Mr. Boehner), for 1 minute.
  Mr. BOEHNER. Let me thank my colleague from Alabama for yielding, and 
let me say to my colleagues that I'm disappointed in the bill that we 
have before us. And I'm disappointed in the fact that the White House 
has indicated that they will sign the bill that we have before us. 
Everybody in this Chamber knows that we need to take responsible steps 
to restore the financial condition of our credit markets and our 
institutions.
  Clearly, the housing market needs some stability. But the bill, I 
believe, that is before us falls well short of that goal by placing 
taxpayers on the hook for billions and billions of dollars. And how do 
we do this? We do this by creating a new tax--of course they will call 
it a fee--on Fannie Mae and Freddie Mac, a new tax on them of about $1 
billion a year, so that we can use that money to give to the FHA to 
bail out scam artists, speculators and banks who made bad loans.
  Listen. There is nobody in this Chamber that isn't there to help 
innocent victims of this housing crisis. But as the gentleman knows, 
and I think everybody in this Chamber knows, there is no way to help 
the innocent victims without, at the same time, helping the scam 
artists and speculators and the financial institutions who provided the 
loans to them. And what will happen is that the worst loans held by 
these financial institutions are going to be taken in by FHA. And who 
is going to pay the bill? The American taxpayers. I don't think they 
can afford it.
  Secondly, as I said, we're going to charge Fannie Mae and Freddie Mac 
some 800, 900, almost $1 billion a year in new taxes that are going to 
be used to help fund all of this over the next 3 years. After that, 
what is going to happen to that money? It's going to go to local 
housing groups. Now, I can tell you that there has been more money 
wasted in these groups than about any kind of money that we have ever 
spent. But the idea of charging two institutions that we are trying to 
save, we are going to charge them a tax of about $800, $900 million a 
year on one end, and then on the other end, we're going to provide a 
possible taxpayer bailout. It makes no sense to me.
  And then we get to the issue of GSE reform. The GSE reform, the new 
regulator in this bill I think is of good prospect, and is a good piece 
of work. I think the FHA modernization in this bill is good work. But 
when you look at the GSE part of this, we're going to have a new 
regulator. They're going to require more capital. They're going to hold 
Fannie's and Freddie's and the others' feet to the fire for a while. 
But to what end? What do we do 4 or 5 years from now when these 
institutions are supposedly healthy? We're in the same box that we're 
in today. We have a private company with a product with a Federal 
guarantee. It used to be that this was an implicit guarantee that the

[[Page 16040]]

Federal government would back up these loans. But now it's clearly an 
explicit guarantee because the Treasury Secretary has made it clear 
that we're going to stand behind these two institutions.
  So we have a private company that has a product with a Federal 
guarantee. I just have to ask my colleagues, we have an opportunity 
here to make real reform and to make real decisions about the future of 
these institutions.

                              {time}  1515

  We leave the question hanging. I am not quite sure what the answer 
really is. But to have this public-private quasi-partnership, and it is 
a private company with a board of directors, they make decisions and 
pay themselves salaries, and have a product, though with an explicit 
guarantee by the Federal Government, is a recipe for disaster, as we 
have found.
  There are other problems with this bill. We have $4 billion in here 
for cities and States to buy up foreclosed properties, which I think 
will only increase the number of foreclosures in those jurisdictions 
that get the money.
  It is a bill that I wish I could support. It is a bill where clearly 
the market needs support, but this is not a bill that I can support. I 
am disappointed that we couldn't do better. I am even more disappointed 
that the White House will sign this product. I urge my colleagues to 
vote ``no.''
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself 45 seconds to 
say that the gentleman from Alabama suggested that I was 
misrepresenting his letter. Here is the last paragraph: There is need 
for expedited legislation, and that action is a basic GSE reform bill 
that can be drafted, and taken to the floor with minimal preparation, 
since we have had hearings, not FHA modernization and not a tap standby 
authority. That's what he asked for a week ago, only GSE reform and not 
anything else.
  Secondly, the minority leader has understated the administration's 
position. I'm sure that he wants to be accurate. They are not simply 
saying the President would sign the bill, the statement of 
administration policy urges the House to pass it expeditiously. So they 
are not simply going to sign it, they want us to pass it expeditiously. 
I know the minority leader wouldn't want to understate the position of 
the administration.
  I now yield 2 minutes to the gentleman from Georgia (Mr. Marshall).
  Mr. MARSHALL. Mr. Speaker, I want to seek a point of clarification 
from the managers of this bill regarding the intent and effect of the 
requirements in title V with respect to the licensing of certain loan 
originators. I want to confirm that these provisions do not interfere 
with or limit the Office of Thrift Supervision's or Office of 
Comptroller of the Currency's authority, including their regulation and 
oversight of a depository institution's products and services marketing 
and distribution system, and that, of course, as the principal 
regulators of federally chartered thrift institutions and national 
banks, they have the authority to make an appropriate definition of the 
term ``employee'' of a depository institution within the meaning of 
title V.
  Mr. FRANK of Massachusetts. Would the gentleman yield?
  Mr. MARSHALL. I yield to the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. The gentleman from Georgia has been a 
diligent advocate for a sensible public policy, and I admire both his 
diligence and his grasp of the issue. He is correct. Nothing in this 
title changes existing Federal law with respect to the authority of the 
Office of Thrift Supervision and the Office of the Comptroller of the 
Currency's preemptive authority, and their right to regulate and 
oversee a depository institution's products and services marketing and 
distribution system, and they do obviously have definitional authority 
under this legislation.
  Mr. BACHUS. Mr. Speaker, at this time I yield 2 minutes to the 
gentleman from Texas (Mr. Paul).
  Mr. PAUL. Mr. Speaker, if I had had a chance to name this bill, I 
might have suggested that we could call it the mother of all bailouts. 
But on second thought I decided that wouldn't be appropriate because it 
isn't nearly as big as the bailout that the Federal Reserve has been 
engaged in in this very industry.
  The Federal Reserve has already invested hundreds of billions of 
dollars, probably close to $300 billion to bail out this industry. And 
of course the Fed has no money. But when we open the doors in an 
unlimited amount, and no restraint on what the Treasury might do in 
buying up these securities, we have to talk about the budget. And, of 
course, that is why this bill increases the national debt by $800 
billion, so I guess they are expecting to buy a whole lot of mortgage 
securities. But that won't solve the problem. We have to find out why 
this problem has existed.
  In 2001, I introduced legislation that would have removed the line of 
credit, which was only $2.5 billion, but the principle of a line of 
credit and this supposed guarantee to Fannie Mae and Freddie Mac, I saw 
as a great danger. Of course, $2.5 billion is nothing, and the 
prediction it would be much more when the time came is absolutely 
correct because now we are talking about hundreds of billions of 
dollars.
  But today we have a bill before us that does a lot more than just 
bail out the mortgage company. I think there are some impositions in 
this bill that we ought to be concerned about. There is a Federal 
registry in here to register anybody in the broker industry. And if you 
work in the industry, you will be fingerprinted. Now, let me guarantee 
you one thing: we didn't get into this crisis because the people who 
work in the mortgage industries weren't fingerprinted. We got into this 
crisis because of a monetary system and a system of laws that encourage 
the very bubble that we are dealing with today.
  If we don't deal with the creation of bubbles, you can't solve the 
problem by more of the same thing. We created this problem with 
inflation; you can't solve it with more inflation.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1 minute to a very 
diligent member of the committee, the gentleman from New Hampshire (Mr. 
Hodes).
  Mr. HODES. Mr. Speaker, I thank the distinguished chairman of the 
committee for yielding time and for his leadership on this important, 
innovative and historic legislation. We are fortunate to have him at 
the helm of the committee at this time.
  Mr. Speaker, there is no doubt that the housing crisis is getting 
worse. In my home State of New Hampshire, foreclosures have increased 
nearly 100 percent this year. Across the country, credit is a hard to 
come by. The markets are unstable, and in my judgment we haven't heard 
all of the bad news yet.
  There are many important specific reasons to support this bill today. 
Fundamentally, however, the housing markets and the institutions which 
deal with mortgages are the cornerstone of our economy. There is some 
risk in change, and the provisions for Fannie and Freddie are not 
without some risk, which through the excellent work of the chairman, in 
consultation with our colleagues in the Senate, have been minimized to 
taxpayers. But the far greater risk we face is inaction. I urge 
bipartisan support for this bill. It must be passed.
  Mr. BACHUS. Mr. Speaker, I yield 2 minutes to the gentleman from 
Illinois (Mr. Manzullo).
  Mr. MANZULLO. Mr. Speaker, we have all heard the adage that one reaps 
what he sows. As we seek to bail out Fannie Mae and Freddie Mac today, 
Congress is reaping what it has sown for so many years.
  These organizations were supposed to help Americans buy their homes 
by making the mortgage market work better. But in pursuit of this goal, 
Congress and the regulators allowed these two organizations to shun 
good governance in pursuit of high profits. What was supposed to be a 
boost to the taxpayers, has turned into a raw deal characterized by 
privatized profits for socialized risk.
  And now, Congress is in a bind: allow Fannie and Freddie to realize 
the results of their risky behavior and deal a

[[Page 16041]]

catastrophic blow to an already troubled economy; or fulfill the 
implicit promise made to shareholders and bail out these two 
organizations. Congress created its own trap by allowing Fannie and 
Freddie to become too big to fail, and given their huge market 
exposure, it has become obvious that a bailout of some sort is 
necessary.
  But this is a bailout of the worst kind, one that does not even seek 
to mimic the actions of the private market in punishing those who take 
too many risks. Unlike other bills we have passed that required 
government intervention into the private market, there is no mandate 
that the taxpayer be repaid. Fannie's and Freddie's CEOs don't get paid 
any less; the board of directors remains the same; and Fannie and 
Freddie are specifically allowed to continue the risky practices that 
got us into this mess in the first place.
  Mr. Speaker, this is absurd. If we are going to put billions of 
dollars of taxpayers' money on the line, we need to make sure that 
something like this never, ever happens again. We need the reforms that 
are necessary in order to make sure that these two government-sponsored 
enterprises act more like an enterprise than they do like somebody that 
is putting the tab on the taxpayers' pocketbook.
  Mr. FRANK of Massachusetts. Mr. Speaker, another one of the most 
active members of our committee, the gentleman from Texas (Mr. Al 
Green) is recognized for 1 minute.
  Mr. AL GREEN of Texas. Mr. Speaker, we have record declines in home 
prices, 4.8 percent in May, $400 billion in losses and write-downs by 
banks. One of every 500 homes are in the foreclosure process, and 2.8 
million homes are at risk of foreclosure.
  If this is a bailout, it is a bailout of the United States of 
America.
  Yes, Fannie and Freddie are too big to fail, and we should not fail 
them. But this bill is balanced. It also helps Aunt Fannie and Uncle 
Freddie. It helps the everyday citizen to keep his or her home.
  At some point, we have to realize that this helps not only 
institutions, it helps people. I support the bill. It is balanced and 
it is fair.
  Mr. BACHUS. Mr. Speaker, at this time I yield 3 minutes to the 
gentleman from South Carolina (Mr. Barrett).
  Mr. BARRETT of South Carolina. Mr. Speaker, I thank the gentleman for 
yielding.
  Mr. Speaker, sometimes, like many of my colleagues, I get frustrated 
about the pace of Congress. For the last several weeks, I have come to 
the floor almost every day to talk about energy problems and why 
Congress doesn't seem to want to do anything to fix the problem. That 
is why I am amazed all of a sudden that Congress seems to be moving at 
warp speed to pass an ill-advised bill that could cost taxpayers 
billions of dollars and change the very nature of our financial system.
  First, let me say that I appreciate the intentions of this bill, Mr. 
Speaker. I believe the government should take targeted steps to help 
those facing foreclosure in those neighborhoods that have had problems 
with the negative effects of multiple foreclosures. But we should not 
legislate in a rush, and we should not use a potential crisis as an 
excuse to expand the size of government in an unprecedented manner.
  Please understand that I agree we cannot allow Fannie and Freddie to 
fail, and we must closely monitor the health of the banking system. 
Still, decisions of this magnitude should be considered calmly, 
rationally, and independently. Let's not mortgage the future of our 
country without fully understanding all the implications.
  Timing is not the only problem with this legislation. As I said 
before, I fear we will be feeling the lingering effects of this 
legislation for many years. In one part of this bill, we are creating a 
new FHA program that will distort housing prices by neglecting the 
realities of supply and demand in the housing market, all while putting 
taxpayers on the hook for this expensive, and I think dangerous, 
experiment. Like many of my colleagues, I don't think we should allow 
the American taxpayers to become the insurance policy for financial 
decisions that did not quite turn out as planned.
  There are other parts of the bill that do not make much sense at 
first glance. For example, the new affordable housing trust fund is 
funded by the income of Fannie and Freddie. At the same time that we 
are trying to stabilize them elsewhere in the bill, we are adding new 
burdens and raising their costs. While I appreciate the importance of 
affordable housing, I don't think this makes much financial sense.
  Like much of what Congress has been doing this year, this affordable 
housing trust fund is taxing what we are trying to help. We are trying 
to help people buy and keep their homes, yet we are discussing raising 
taxes. Rather than increasing the size of government, perhaps we should 
be putting more money into the pockets of hardworking Americans so they 
can afford to keep their homes.
  While we certainly should be ensuring that the GSEs are stable, I am 
concerned about the long-term effects that this bill will have on the 
health of the housing market, the Federal balance sheet, and the 
American economy. Because I do not think this legislation will provide 
helpful solutions to our housing market, I oppose this bill and ask my 
colleagues to do the same.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield to the gentleman 
from California (Mr. Baca), and there is language in the bill dealing 
with in-person counseling of which he is the main author, and I yield 
to him now for a unanimous consent request.
  Mr. BACA. Mr. Speaker, first of all, I would like to thank the 
chairman of the committee for his leadership on this, and for including 
the provision that deals with counseling that I support, and I submit 
my statement for the Record.
  First let me thank the gentleman for his hard work on this 
legislation and his dedication to helping homeowners in need.
  Mr. Speaker, I come to the floor today to talk about the importance 
of housing counseling and how to make these dollars more effective. 
Statistics show that 8,500 homeowners are foreclosing each day and 2.5 
million are expected to lose their homes by the end of this year. Some 
States require that homeowners be notified in person if they are about 
to foreclosure. But many States such as California and Texas do not. 
These States just send letters in the mail.
  The bill before us today includes an important provision that 
requires the Neighborhood Reinvestment Corporation to give 
consideration to counseling agencies that provide in- person contact 
and in-person housing counseling to borrowers in need when awarding 
their grants. Statistics show that when homeowners are notified in 
person that counseling is available, a large percentage can save their 
homes.
  For those States that just send default and foreclosure notices 
through the mail, we hope that federally chartered and regulated 
institutions doing business in those States will use every effort to 
notify homeowners in person that counseling is available. This is 
important because when borrowers go 30 or 60 days late on paying their 
mortgages, they often stop answering the telephone or opening mail from 
their lender. They give into despair, and believe there is no hope.
  Fifty percent of homeowners in default never contact their lenders. 
What I find most troubling is that according to a Freddie Mac study, 56 
percent don't know counseling is available. The money is there, but the 
counseling is not getting to the people that need it. This will promote 
partnerships between counseling agencies and lenders to improve 
outreach to borrowers, whether in person or through other means, to 
advise them that help is available. And second, it encourages in person 
counseling so that counselors can advise homeowners individually to 
help them work through their options and prevent foreclosure.
  I also want to thank Mrs. McCarthy of New York and Mr. Mahoney of 
Florida who co-sponsored this language. As you know, our amendments 
passed the Committee on Financial Services under unanimous consent and 
with bipartisan support. And I thank the Republicans on our committee 
for their support and especially thank Chairman Frank for his 
leadership.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1 minute to the 
majority leader.
  Mr. HOYER. Mr. Speaker, I thank the chairman.
  Frequently I rise in support of a bill and congratulate the chairman. 
It is

[[Page 16042]]

always warranted to do that; but in this case, it is particularly 
warranted. No Member has worked harder or longer in a more complex 
context than has Chairman Frank, working with Secretary Paulson of the 
administration, with Mr. Dodd, Mr. Bachus, and Mr. Shelby. While I know 
there may not be full agreement, I know there has been the opportunity 
to work together. I want to congratulate Mr. Frank who has been 
lionized in the press, properly so, for his expertise on the subject 
matter and for his political skill in bringing this matter to the floor 
today in a fashion that will see its passage.

                              {time}  1530

  Mr. Speaker, when it comes to economics, none of us, none of us is an 
island. Our prosperity is always, and always will be, bound up with the 
prosperity of our neighbors. And nothing has proved that more than the 
mortgage crisis that is rocking our economy today.
  Yes, it has reached to the heights of Wall Street to threaten huge 
banks and the government-sponsored enterprises Fannie Mae and Freddie 
Mac.
  But the crisis began close to home. It began with millions of 
families who have seen their subprime mortgage rates jump out of reach, 
sometimes because they didn't understand the repercussions but often 
because they were misled by unscrupulous, unregulated lenders. The 
consequences will be felt close to home.
  Home prices are set to decline for the second year running, the first 
time that has happened since the Great Depression. And communities are 
facing a vicious cycle of foreclosures, falling property values, 
declining property tax collections, cutbacks in city services, rising 
crime, and more foreclosures. The American public rightfully expects us 
to act. So the bill that we debate today isn't simply about helping 
hundreds of thousands of Americans keep their homes, as vital as that 
objective is. It's about stabilizing an entire economy.
  We have talked about a stimulus bill. This is a very important 
component of the stimulus of our economy. As Fed Chairman Bernanke put 
it: ``Doing what we can to avoid preventable foreclosures is not just 
in the interest of lenders and borrowers. It's in everybody's 
interest.'' It's in our economy's interest.
  I couldn't agree with him more. And that's why I'm proud to stand in 
support of this Housing Rescue and Foreclosure Prevention Act.
  This legislation will enable at least 400,000 homeowners, that's 
400,000 families, to refinance their homes, switching from risky 
subprime mortgages to safer loans backed by the Federal Housing 
Administration.
  Now, it's not about a bailout. Lenders will have to take losses, and 
borrowers must agree to share with the government any profit from the 
resale of a refinanced home. That's right, it's appropriate, and this 
bill contains it.
  The bill also helps stabilize communities that are reeling from 
foreclosures and declining property values by helping States and cities 
buy up foreclosed properties. Not just will the homes in question be 
bought up. Entire neighborhoods will be protected.
  Furthermore, this bill creates a strong, independent regulator for 
Fannie Mae and Freddie Mac. I have observed often that one of the 
problems in our economy has been that over the last 7\1/2\ years, we 
have taken the referee off the field. This bill reinstates a vigorous 
referee.
  It also gives the Treasury Department temporary authority to extend 
credit to the GSEs, should they require it. The Congressional Budget 
Office has concluded that there is ``probably better than a 50 percent 
chance,'' and I quoted that, that this authority will not be used. But 
even if it is not, this bill will go a long way toward shoring up 
confidence in our financial markets.
  Mr. Speaker, there is barely a Member in this body whose constituents 
have not felt the pain of the housing crisis, whether the personal 
crisis of losing a home or the ripple effect set off by each 
foreclosure. The needs of our constituents outweigh the demands of 
ideology. That's always true, of course, but at moments like this, we 
feel that truth more acutely than usual.
  So I hope that my colleagues will put partisanship aside and do the 
right thing for our economy, for our neighbors, and for our country.
  Mr. Speaker, in closing, let me read the Statement of Administration 
Policy. One of the things I want to congratulate Mr. Frank and 
Secretary Paulson on is the bipartisan way in which they have worked on 
a daily basis. I know they have talked daily. I have talked to 
Secretary Paulson, I think, weekly. But on a daily basis to make sure 
that we had a bipartisan administration-Congress response to the crisis 
that confronts us. I read from the Statement of Administration Policy, 
which is dated July 23, at 12:25, just a few hours ago. I know all my 
colleagues will want to listen intently to what the administration says 
we ought to be doing:
  `` . . . the temporary Treasury authorities and GSE reform provisions 
are too important to the stability of our Nation's housing market, 
financial system, and the broader economy not to be enacted 
immediately. For these reasons the administration supports passage of 
H.R. 3221, as amended.''
  America will be pleased when, in a bipartisan way, the administration 
and Congress act together to face a crisis confronting our citizens and 
our country. I urge my colleagues to vote for this critically important 
piece of legislation.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield for the purpose of 
making a unanimous consent request to the gentleman from Connecticut 
(Mr. Shays).
  Mr. SHAYS. Mr. Speaker, I support this important legislation.
  Mr. Speaker, American families are struggling to fill their gas 
tanks, feed their families, heat their homes and stay current on their 
mortgages.
  I am hopeful today's passage of this legislation will bring some 
stability to the volatile subprime mortgage market by providing 
liquidity and credit for Fannie Mae and Freddie Mac, restoring investor 
confidence in the housing markets, and keeping American families in 
their homes.
  Our economic strength is dependent upon the resiliency of our housing 
market. Today, Congress will send a message of hope to families and a 
message of confidence to the market place.
  Regulatory overhaul of the GSEs is long overdue and frankly could 
have helped prevent the uncertainty we are experiencing now. I have 
long fought for the proper regulation of Fannie Mae and Freddie Mac. 
Back in 2003, I introduced the No Securities Left Behind Act to bring 
these two companies under the 1933 and 1934 Securities laws. It is time 
we shed sunlight on all securities trading and demand accountability.
  What is concerning to me is the inclusion of the Affordable Housing 
Trust Fund in urgent legislation attempting to shore up the financial 
stability of the GSEs. It doesn't seem to make sense to siphon off 
capital from Fannie Mae and Freddie Mac in the same month shares of the 
companies have fallen 45 percent and 58 percent, respectively.
  While I support the creation of an Affordable Housing Trust Fund, and 
believe our Nation faces a significant shortage of affordable housing, 
we need to reevaluate if the establishment of this fund is logical in 
the current market climate.
  Despite my concern, I intend to support this bill today because we 
must open up credit availability to Fannie Mae and Freddie Mac. The 
failure of these entities far outweighs the concern I have about some 
aspects of this legislation. While I hope this credit window will never 
need to be accessed, this backstop will reassure Wall Street of the 
health and liquidity of these two companies.
  Additionally, I have heard all too often of homeowners prevented from 
modifying the terms of their mortgage until they default. Expanding the 
FHA-secure program to allow families the opportunity to refinance into 
safe and affordable mortgages backed by the Federal Housing 
Administration will provide additional relief from foreclosures.
  There is no doubt in my mind we are facing a serious challenge. 
Families, investors, lending institutions and communities all risk 
significant losses.
  Given the 71,000 outstanding subprime loans in Connecticut alone, 
this legislation is long overdue to bring relief to struggling 
homeowners, greater oversight to the industry, and to ensure the 
continued viability of the mortgage market.

[[Page 16043]]


  Mr. BACHUS. Mr. Speaker, I have a parliamentary inquiry as to how 
much time is remaining.
  The SPEAKER pro tempore. The gentleman from Alabama has 16 minutes 
remaining. The gentleman from Massachusetts has 24 minutes remaining.
  Mr. BACHUS. Mr. Speaker, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1 minute to the 
gentleman from Texas (Mr. Hinojosa), a very active member of the 
committee.
  Mr. HINOJOSA. Mr. Speaker, I rise in strong support of H.R. 3221. The 
assistance provided to homeowners in this housing package is 
desperately needed by troubled borrowers, nationwide and in my 
district.
  This housing rescue package is a win-win for the homeowners and the 
community in which they live, which will not deteriorate because of 
boarded-up homes left empty because of foreclosures. It's also a win 
for the investors, who will get paid because the homeowners will be 
making payments they can afford.
  Mr. Speaker, I am particularly pleased that this legislation includes 
a provision for rural areas. I want to thank Chairman Rangel and 
Chairman Frank for working with me and the rural housing groups to 
include this language in the bill.
  I strongly urge my colleagues to support this much-needed bill.
  The assistance provided to homeowners in this housing package is 
desperately needed by troubled borrowers nationwide and in my district, 
particularly Hidalgo County, which is one of the poorest counties in 
the United States.
  Where there are large concentrations of foreclosures, both families 
who have lost homes and their neighbors who remain behind, are 
suffering. Renters too may be in danger of losing their homes if their 
landlords go into foreclosure.
  This housing rescue package is a win-win for the homeowner--who may 
be able to stay in their home, and the community in which they live--
which will not deteriorate because of boarded-up homes left empty 
because of foreclosures.
  It is also a win for the investors--who might not get paid what was 
originally expected, but who will get paid because the homeowner, with 
a restructured mortgage, will be making payments they can afford.
  Mr. Speaker, I am particularly pleased that this legislation includes 
a provision for rural areas, which will clarify that the low-income 
housing-tax-credit may be used with the USDA's rental housing program 
for farm workers. I want to thank Chairman Rangel and Chairman Frank 
for working with me and the rural housing groups to include this 
language in the bill.
  The bill also includes the reform of governance of Fannie Mae, 
Freddie Mac, and the Federal Home Loan Banks. These reforms and the new 
regulatory powers will help ensure that the GSEs continue to play a 
vital role in the overall mortgage market.
  I encourage my colleagues to support this much-needed bill.
  Mr. BACHUS. Mr. Speaker, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I am glad now to yield to my 
neighbor, the gentleman from Rhode Island (Mr. Langevin), 1 minute.
  Mr. LANGEVIN. I thank the gentleman for yielding.
  Mr. Speaker, right now there are thousands of families in my home 
State of Rhode Island and across America who are struggling to keep 
their homes due to the fallout from the subprime mortgage crisis.
  I rise in strong support of the American Housing Rescue and 
Foreclosure Prevention Act to lend a helping hand for those reeling 
from the mortgage crisis. Just as importantly, it will restore 
confidence in our largest mortgage backers, Fannie Mae and Freddie Mac.
  I am pleased that this package includes also a key House-passed 
measure from an overhaul of the Federal Housing Administration to an 
affordable housing trust fund to construct, rehabilitate, and preserve 
1.5 million housing units. This will address an issue that's 
particularly acute in Rhode Island, where affordable housing is so 
scarce that someone needs to earn more than two or three times the 
minimum wage just to afford an average two-bedroom apartment.
  H.R. 3221 will also create an independent agency to regulate Fannie 
Mae and Freddie Mac and the Federal Home Loan Bank System to help 
ensure that these critical institutions remain strong.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. BACHUS. I would ask unanimous consent to give the gentleman from 
Rhode Island another 1 minute.
  The SPEAKER pro tempore. The gentleman from Massachusetts controls 
the time.
  Mr. FRANK of Massachusetts. That's very generous of my friend. If he 
wishes to give another minute, I certainly would want to facilitate 
that.
  Mr. BACHUS. I would ask unanimous consent, Mr. Speaker, that the 
total time be extended 1 minute.
  Mr. FRANK of Massachusetts. I believe you can get unanimous consent, 
but if the gentleman's time has expired it would then be within the 
prerogative of the gentleman from Alabama to yield him another minute.
  Mr. BACHUS. I would ask unanimous consent that the total time be 
extended 1 minute and the gentleman from Rhode Island be given that 
time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Alabama?
  There was no objection.
  The SPEAKER pro tempore. The gentleman from Rhode Island is 
recognized for 1 minute.
  Mr. LANGEVIN. I thank the gentleman for the unanimous consent request 
and for the granting of it.
  Mr. Speaker, H.R. 3221 will also create an independent agency to 
regulate Fannie Mae and Freddie Mac and the Federal Home Loan Bank 
System to help ensure that these critical institutions remain strong, 
and it's about time.
  Four years ago I shared Alan Greenspan's concerns that GSEs were 
involved in risky investments. At that time I said it appears as though 
the increased risk the GSEs have been taking on is not related to their 
primary operation of purchasing affordable housing loans in the 
secondary market. Rather, much of their risk comes from derivative 
investments in an effort to maximize profits for shareholders. As we 
learned from Enron, complex derivative schemes may boost profits in the 
short term, but their long-run risk can be too difficult to manage, and 
this is where we are today. I'm glad that we fixed this problem by 
passing this legislation.
  I commend the gentleman from Massachusetts for his hard work on this 
bill. I'm also glad that the President has finally lifted his veto 
threat and will not stand in the way of assistance to local governments 
to purchase abandoned and foreclosed properties.
  This legislation is an important commonsense response to the housing 
crises and will help stabilize families in our economy.
  I thank Chairman Frank for his leadership and all of my colleagues 
for their support for this bill.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1 minute to my 
colleague from Massachusetts (Mr. Lynch), a valued member of our 
committee.
  Mr. LYNCH. I thank the chairman for yielding the time.
  I also want to thank the chairman, Mr. Frank, for his work on this 
bill, along with the ranking member. I do have to say that I think much 
of the fairness that we find in this bill has come at the insistence of 
the chairman.
  Mr. Speaker, I would like to also note that while this bill 
accomplishes quite a bit, the package that the chairman has brought 
before us today includes not only the overhaul of FHA and the GSEs but 
also has grants and tax provisions for cities and homeowners alike, but 
also I would add that it gets at the root of our problem.
  The root of our problem today is really the origination process for 
these subprime mortgages. And what this bill does is it includes a 
tool, a new tool, that will allow us to combat these abuses by creating 
a nationwide mortgage lending system and registry to license and 
register individual mortgage brokers. I want to just point out that 
it's estimated that about $514 billion worth of the loans resetting in 
2008, 70 percent are subprime loans.

[[Page 16044]]

  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. BACHUS. Mr. Speaker, at this time I yield 2 minutes to the 
capable gentleman from Indiana (Mr. Pence).
  Mr. PENCE. I thank the gentleman for yielding.
  Mr. Speaker, the American housing market is in turmoil and homeowners 
are anxious. And let me say from the heart I believe Congress is right 
to act decisively to cure what ails our housing markets. But with the 
American Housing Rescue and Foreclosure Prevention Act, the cure may be 
worse than the disease.
  H.R. 3221 increases the national debt by $800 billion, and it raises 
taxes on the very entities that we say we are trying to help, putting 
the money in the pockets of special interests and politically motivated 
groups. In a time of crushing national debt and rising deficits, we're 
considering a package that would give a blank check to the 
administration for bailing out Fannie Mae and Freddie Mac at a time 
when the Chairman of the Federal Reserve and regulators of those 
entities insist they're solvent and fiscally sound.
  The most troubling part to me is that whatever we do for Fannie Mae 
and Freddie Mac, we shouldn't be raising taxes on them. This 
legislation includes a 4.2 percent tax of basis points for each dollar 
of unpaid principal balance of total new business purchases. In plain 
language, CBO estimates that 4.2 basis points could equal a slush fund 
of $710 million for 2009, $9 billion over 10 years that could go to 
organizations like ACORN and the National Council of La Raza, which, in 
addition to being involved in legitimate pro-housing programs, are also 
unquestionably involved in political mobilization, voter turnout, 
registration, and the like.
  Congress can do better than H.R. 3221 to quell the anxious housing 
markets that beset our Nation today.

                              {time}  1545

  The American people deserve a housing bill without corporate 
bailouts, without tax increases, without slush funds for politically 
motivated organizations. The American people deserve better than the 
American Housing Rescue and Foreclosure Prevention Act, and I urge my 
colleagues to join me in opposition to this legislation.
  Mr. FRANK of Massachusetts. I now yield to an alumnus of our 
committee, the gentleman from New Jersey (Mr. Sires), 1 minute.
  Mr. SIRES. Thank you, Mr. Chairman, and thank you for all your hard 
work on this bill.
  I rise today in support of H.R. 3221, the American Housing Rescue and 
Foreclosure Prevention Act of 2008. This amendment is very important 
for a number of reasons.
  First, this amendment aims to stimulate and increase consumer 
spending in the mortgage market by creating a new standard deduction 
for State and local real estate taxes paid for those who do not 
itemize, and it provides a refundable tax credit for first time home 
buyers.
  Second, this amendment provides assistance to all who are looking for 
a place to call home. It does not forget those who are less fortunate, 
those who can not afford to buy a home. The permanent affordable 
housing trust fund will ensure that all Americans have access to a safe 
and stable place to call home, even those who rent. This amendment also 
helps those who are looking to buy a home by bolstering the ability of 
FHA to guarantee more mortgages.
  Finally, by strengthening and consolidating existing regulatory 
authorities and giving the Treasury Department new authority, the 
American taxpayer can have faith that they will not have to bear the 
weight of future housing financing problems. I urge everyone to support 
this bill.
  Mr. BACHUS. Mr. Speaker, at this time I recognize the deputy ranking 
member of the full committee, Mr. Neugebauer from Texas, for 3 minutes.
  Mr. NEUGEBAUER. I thank the ranking member.
  Mr. Speaker, I rise in strong opposition to H.R. 3221. Every Member 
of this House cares about our Nation's economy and the difficult 
financial situations that many Americans face.
  What the majority has done in response is to load up a housing 
package under the guise of attempting to stabilize the housing and 
financial markets. This bill will only make matters worse, particularly 
for the taxpayers.
  The majority has combined reforms that we all agree are long overdue, 
such as a stronger regulator for Fannie Mae and Freddie Mac, 
modernization of FHA. But these, some of these other provisions propose 
a significant risk to the taxpayers and our economy.
  At a time when the housing market is relying on GSEs to fulfill their 
mission in ensuring a continued mortgage liquidity, Congress should not 
divert $5.8 billion to a housing trust fund.
  At a time when taxpayers are being asked to loan more money to GSEs 
to provide some kind of a backstop, Congress should not be siphoning 
income out of this company and out of the capital of these entities.
  At a time when many Americans are working hard to pay for their 
mortgages, they are struggling with high energy costs, high food costs, 
they shouldn't have to struggle making their own mortgage payment and 
their neighbors as well. And that is what this bill would do.
  Those on the other side say that the CBO estimates the chances of the 
probability of 50 percent that no authority for Treasury to support the 
GSEs would be needed.
  Well, let's go to the doctor, and the doctor says to you, well, there 
is a 50 percent chance that you are healthy, and there is a 50 percent 
chance that you are not. That would not be very reassuring to the 
patient, and it certainly should not be very reassuring to the American 
taxpayers, particularly when CBO also says it is not clear what 
criteria Treasury would use to provide this assistance to GSEs.
  As Congress is wrestling to address our current economic situation, 
we must remember that markets are not always kind, but they are very 
efficient. The sooner the Federal Government really indicates that the 
market is the best place to settle a lot of these issues, the sooner 
the capital will start to return to these markets.
  Quite honestly, Mr. Speaker, right now the markets are sitting on the 
sideline to wait to see what other goodies that the Congress is going 
to do to sweeten the pie.
  Mr. Speaker, we need to defeat this bill. We need to come back and do 
the reforms that make sense for the American people. But we do not need 
to load up this bill with extraneous stuff that is bad and not in the 
best interest of the American taxpayers.
  Mr. FRANK of Massachusetts. I yield 1 minute to a member of the Ways 
and Means Committee, the gentlewoman from Nevada (Ms. Berkley).
  Ms. BERKLEY. Mr. Speaker, I want to especially thank Chairman Frank 
for doing an extraordinary job on behalf of the people of the United 
States of America through this piece of legislation.
  I have a statement that I would like to submit for the Record. But I 
want to make a few additional comments.
  This legislation may be the single most important piece of 
legislation that I will vote on for the people that I represent. One 
out of every 122 homes in my congressional district is in foreclosure. 
The home builders aren't building; the Realtors aren't selling; the 
construction workers aren't working. That is contributing to a higher 
than the national average unemployment rate in my congressional 
district.
  Now, I have heard my colleagues on the other side of this bill 
talking about this is a boon to speculators, and how sharks are going 
to be taking undue advantage of the provisions of this bill. This is 
not what I am seeing in my district.
  I am seeing desperate Americans, people, our neighbors and our 
friends, losing their home. They are worried. They are looking to their 
government to get some relief. This legislation provides that relief. I 
support it without qualification.
  The American Housing Rescue & Foreclosure Prevention Act will 
strengthen the Nation's mortgage and housing situation in a number of 
important ways.
  The bill takes steps that will both improve the current housing 
situation and strengthen

[[Page 16045]]

oversight to prevent similar problems in the future. This is especially 
important for Nevada, which has experienced the highest rate of 
foreclosures in the country for well over a year.
  This bill modernizes and improves the FHA and the GSEs to better 
measure risk and provide stricter oversight and includes proposals to 
shore up Fannie Mae and Freddie Mac.
  The bill will help a significant number of families in danger of 
losing their homes by allowing the FHA to insure up to $300 billion in 
refinanced mortgages.
  The bill also includes important tax provisions such as the $7,500 
first-time homebuyer refundable tax credit and a new standard deduction 
for property taxes in 2008.
  I am hopeful the combined effect of the provisions of this package 
will be to alleviate the current housing crisis and help put our 
Nation's economy on stronger footing.
  I urge my colleagues to support this legislation.
  Mr. BACHUS. Mr. Speaker, I reserve the balance of our time.
  Mr. FRANK of Massachusetts. I yield 1 minute to another member of the 
committee, the gentleman from Indiana (Mr. Carson).
  Mr. CARSON of Indiana. Mr. Speaker, I rise in strong support of the 
Foreclosure Prevention Act. This comprehensive reform package will help 
working families keep their homes and avert foreclosure.
  H.R. 3221 is especially important to the people in my home State of 
Indiana. Hoosiers have had to endure many hardships throughout this 
housing crisis. Indiana, at one point, led the Nation in foreclosures, 
and currently ranks ninth.
  I am particularly pleased that this bill provides assistance to 
cities to rehabilitate vacant, foreclosed homes. In my neighborhood 
alone, there are over 60 vacant and boarded homes.
  As a former law enforcement officer, I know these vacancies can lead 
to violence and theft in our neighborhoods. We need the resources 
provided in this housing measure so that our communities can be 
revitalized and our neighborhoods stabilized. I want to thank Chairman 
Frank for his work on this bill.
  Mr. BACHUS. Mr. Speaker, at this time I yield to the gentleman from 
North Carolina, a member of the committee, Mr. McHenry, 2 minutes.
  Mr. McHENRY. Mr. Speaker, today we are considering the most 
significant extension of the Federal Government into the financial 
markets in over a generation. With the dramatic impact that this piece 
of legislation will have on the housing markets, as well as the 
financial markets, I think we have to give it due consideration.
  And in that vein, Mr. Speaker, I have got a number of questions. Will 
taxpayers be forced to subsidize shareholders, shareholder returns if 
the GSEs borrowed from either the Fed or from the Treasury lines of 
credit without a requirement that they first reduce their dividends?
  Will the bill create the possibility of future shareholder suits 
against the GSEs, and will the Government be on the hook for any of the 
settlement costs and damages?
  Will the bill create the potential of GSEs going into receivership, 
and how could this affect the United States Government's bond rating if 
we engage in this type of activity?
  And finally, why are we giving home owners with negative equity, who 
take advantage of the FHA refinancing proposal within this legislation, 
they have to give up 50 percent of their appreciation in homes. But, at 
the same time, we don't have that same requirement for the financial 
institutions we are giving a massive amount of money to in Federal 
assistance.
  But finally, there is a large section of this bill called the Housing 
Trust Fund; and does this Housing Trust Fund work against the goal of 
this bill, which is to prop up Fannie Mae and Freddie Mac?
  The Housing Trust Fund would tax Fannie Mae and Freddie Mac, and take 
that money, put it into a slush fund for Congress to hand out for other 
housing ideas. And will this hurt, in the long term, the housing 
markets?
  And for these questions, I think there are answers; and the answers 
are that it will harm our U.S. Government taxpayers now and in the 
future, and at the same time, not truly help the financial markets in a 
way substantive enough for us to do this.
  So therefore, I am going to vote against this legislation. I urge my 
colleagues to do the same.
  Mr. FRANK of Massachusetts. I yield 1 minute to a very active member 
of the committee, the gentleman from Florida, Mr. Klein.
  Mr. KLEIN of Florida. Mr. Speaker, the economic challenges that are 
affecting America are having a real impact on my constituents in South 
Florida. The Associated Press recently reported that Fort Lauderdale 
has among the highest foreclosure rates in the country. Market 
stability is of the utmost importance in returning Florida's economy to 
a position of strength and restoring consumer confidence.
  The American Housing Rescue and Foreclosure Prevention Act provides 
mortgage refinancing assistance to keep families from losing their 
homes, protect neighboring home values, and help stabilize the housing 
market. It also helps borrowers avoid foreclosure, while minimizing 
taxpayer exposure and, at the same time, requires lenders and home 
owners to take responsibility. It also provides a $7,500 tax credit to 
first time home buyers to jump start the residential real estate 
market.
  This is an excellent, well-thought-out response to the housing market 
crisis that we are dealing with.
  I would like to thank Chairman Frank and Chairwoman Waters and the 
minority members who worked on this commonsense economic compromise 
legislation. I urge my colleagues to support this bill.
  Mr. BACHUS. Mr. Speaker, I continue to reserve my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, yet another very active and 
important member of our committee, the gentleman from New York (Mr. 
Meeks). I yield him 1 minute.
  Mr. MEEKS of New York. Mr. Speaker, I want to thank Chairman Frank 
for this great work. This is probably one of the most important bills 
that we are going to pass in this 110th Congressional Session.
  When you look at what is taking place and you look at the fruits of 
what is going on in our economy, you see that the housing crisis is the 
catalyst for our Nation's current economic crisis. And what this bill 
does, it really is, it makes this House stand up for the true meaning 
of its creed, the people's House, because there are a lot of things in 
here that go to the people of the United States of America, the 
taxpayers who we entrust and know that they are the heartbeat of this 
economy.
  When you talk about creating equality in wealth, it is with 
homeownership. And what this bill does, it makes sure that individuals 
continue that homeownership. It makes sure the individual receives 
financial literacy. It makes sure that the unscrupulous lenders, you 
know, those people who were victimized by the unscrupulous lenders, 
that they are wiped out of the map and that people get counseling that 
is desperately needed in this place. And also it talks about 
organizations who have been integrally involved in creating 
opportunities to folks. This is a very good bill. I vote ``aye.''
  Mr. Speaker, I would like to applaud my colleagues in the House, 
Members of the United States Senate, the Secretary of the Treasury, 
Financial Industry and Housing Sector advocates and, in particular, my 
friend and colleague, House Financial Services Committee Chairman 
Barney Frank for providing the leadership and resources in crafting 
this landmark legislation, H.R. 3221, the Housing and Economic Recovery 
Act of 2008.
  My district, New York's 6th Congressional District has among the 
highest rates of foreclosure in the Nation. This legislation will 
address the severe housing crisis that has been the catalyst for our 
Nation's current economic crisis and has disproportionately impacted 
the African-American community. There is ample evidence that this 
crisis is having a devastating and disproportionate impact on the 
African-American and Latino communities. This Congress has insured that 
the Housing and Economic Recovery Act of 2008 not only addresses the 
larger problems of industry giants like Fannie Mae and Freddie Mac, but 
it also specifically targets urban, low income and minority communities 
and homeowners who

[[Page 16046]]

have been affected by unscrupulous sub-prime and predatory loans. These 
loans have led to record rates of foreclosures that are having 
disastrous results in the African-American and Latino community.
  I am particularly heartened that the measure provides nearly $200 
million in Federal funding for housing counseling services. These 
counseling services will provide funds for nonprofit groups that serve 
low income, minority and urban communities to provide desperately 
needed financial literacy outreach and education.
  Organizations such as the National Urban League, which has provided 
housing counseling services to our Nation for over 40 years and offers 
a wide variety of housing counseling services to homeowners, as well as 
low-to-moderate income renters. Housing counseling plays a key role in 
increasing financial awareness and Closing the wealth gap between 
minority and nonminority households.
  Throughout my tenure in the Congress, I have fought for an expansion 
of housing counseling and financial literacy services in an effort to 
improve the financial situation for minorities with respect to securing 
homeownership, maintaining. good credit and attaining monetary savings.
  I am pleased to hear that President Bush is no longer threatening to 
veto this much needed legislation. I would urge the Congress to move 
quickly to enact this historic legislation and to get it to the 
President's desk as soon as possible.
  Mr. BACHUS. Mr. Speaker, I would like to inquire as to the time 
remaining on both sides.
  The SPEAKER pro tempore. The gentleman from Alabama has 9 minutes 
remaining. The gentleman from Massachusetts has 16 minutes remaining.
  Mr. BACHUS. I continue to reserve my time, Mr. Speaker.
  Mr. FRANK of Massachusetts. I now yield 1\1/2\ minutes to the Chair 
of the Small Business Committee and a member of our committee, the 
gentlewoman from New York (Ms. Velazquez).
  Ms. VELAZQUEZ. Mr. Speaker, I want to thank Chairman Frank, Ms. 
Waters and the members of the minority who have worked in this 
important bipartisan bill.
  Mr. Speaker, right now, this country needs swift effective action, 
and this legislation will do just that. Neighborhoods across the Nation 
are feeling the effects the growing number of abandoned and foreclosed 
properties. In my district alone, there are almost 700 homes in 
foreclosure. Home owners, even in strong housing markets, are watching 
their financial security disappear. What was once a robust growing 
market is now at the core of the current economic downturn.
  H.R. 3221 will help reverse this, stabilize neighborhoods, and 
convert foreclosed properties into stable rental and home ownership 
opportunities for working families.
  Most importantly, Mr. Speaker, it protects a basic need for millions 
of Americans, affordable housing. With the magnitude of the housing 
crisis and number of people struggling to keep their homes, the time to 
act is now.
  When a family goes into foreclosure, they lose their economic 
stability and strain our already struggling economy. H.R. 3221 will 
restore investor confidence in the housing finance market while 
securing the American dream for working families. It not only addresses 
the immediate needs but installs safeguards so we can prevent a future 
housing downturn.

                              {time}  1600

  While access is essential, equally critical to the housing recovery 
is the ability of sound mortgages.
  Mr. BACHUS. Mr. Speaker, at this time I would like to recognize the 
gentleman from Illinois (Mr. Roskam), a very capable, bright member of 
our committee for 2 minutes.
  Mr. ROSKAM. I thank the gentleman for yielding.
  Mr. Speaker, listening to the debate, I appreciate the tone and even 
the urgency with which Congress is wrestling with this, and there is no 
question as you look into this bill there are some good elements to it. 
But there are some substantive reforms to GSEs that I think we can all 
come around. There are some elements that are very distasteful, from my 
point of view, and they have been articulated well. And as the chairman 
has said, there is even a time to put aside some of that and to all 
come together.
  But there is, in my opinion, Mr. Speaker, an element to this bill 
that isn't just slightly distasteful but it's a deal breaker. And 
that's the blank check within this bill. When the Secretary of the 
Treasury came in and briefed a number of us, he said that they wanted 
this authority to move forward, an unprecedented amount of authority, 
and then almost in the next breath--I don't want to overly characterize 
what he said--but almost in the next breath he said, ``But don't worry. 
We'll never use it.''
  Well, I think that should give us all a reason to pause. The notion 
of giving a blank check to anyone for any circumstance is an idea that 
I think is a deal breaker, and we will rue the day that we gave that 
kind of authority away. I find it ironic that the other side of the 
aisle that has pounded on this President for the past 7 years as being 
an almost imperial President is willing to yield this type of authority 
to him and literally give him or anyone a blank check.
  My predecessor, Henry Hyde, urged a great deal of caution at what he 
characterized as the greased chute of government. And this is the 
greased chute of government moving very, very quickly.
  I urge us to pause. I urge us not to give a blank check to anyone. We 
can do much better than this.
  Mr. FRANK of Massachusetts. Mr. Speaker, I am about to yield to the 
Speaker, but I yield myself 30 seconds to say to my friend from 
Illinois who wonders about this newfound confidence in the President. 
My confidence in giving him power is growing as his time in office 
diminishes.
  I now recognize the Speaker of the House for 1 minute. Her leadership 
has been very important on this.
  Ms. PELOSI. I thank the gentleman for yielding and I thank him for 
the great intelligence, brilliance, and eloquence that he has brought 
to this very important debate for the American people. I want to thank 
him, as Chair of the Financial Services Committee, for his tremendous 
leadership. I also want to commend Congresswoman Maxine Waters as Chair 
of the Subcommittee on Housing, and acknowledge the excellent work of 
Chairman Charlie Rangel on the Ways and Means Committee, without whose 
leadership we would not be here today, and also subcommittee Chair 
Richie Neal for his extraordinary leadership.
  Mr. Speaker, I had hoped that this legislation would have been the 
product of much more bipartisanship, and it seems that it has been 
between the White House and the Democrats in the Congress. As a fan of 
Congressman Spencer Bachus, I also want to acknowledge him. We have 
some areas of disagreement here, but I'm pleased that we are able to 
move forward.
  Mr. Rangel, Mr. Frank, Mr. Neal, and Chairwoman Waters have brought 
us a comprehensive package on housing policy reforms that will lift 
families facing foreclosure and stem the continuing drop in home values 
across the country.
  I also wish to acknowledge the contributions of Secretary Paulson. 
Treasury Secretary Paulson played a constructive role and helped the 
President reach this agreement after opposing many parts of this 
legislation. I'm so pleased that the White House issued a statement 
that the President would not veto this bill.
  Under Chairman Frank's leadership, the House last year, just 3 months 
after Democrats took the majority, in the spring of last year, this 
House of Representatives passed a bill very similar to the one the 
House is voting on today, and the administration said that it will not 
oppose. But at the time, we had trouble getting from the passage of the 
bill. Mr. Frank and members of the committee, Chairwoman Waters, 
foresaw, they knew there was a need for legislation. They passed 
legislation similar to this 15 months ago only 3 months after Democrats 
took power.
  Again in May of this year, the House passed virtually an identical 
GSE reform bill as part of a broader comprehensive package to address 
the crisis in our housing market. Also in January, in discussion over 
the economic

[[Page 16047]]

stimulus package, we proposed inclusion of both the GSE reform bill and 
the FHA reform bill that are now in this package. Unfortunately, we 
could not get agreement on that.
  The bill that the House takes up today, if enacted, will represent 
the most far-reaching reform of our nation's Federal housing finance 
system in a generation. Chairman Frank had the foresight to build a 
bipartisan consensus around the bill that addresses the difficult 
challenges in our housing markets and communities across America. To 
help American families avoid foreclosure and jump-start the housing 
market, this legislation first steers middle class families away from 
predatory subprime loans and provides them with affordable mortgages; 
shields middle class borrowers from predatory lending practices and 
provides foreclosure avoidance counseling opportunities; protects 
taxpayers, not speculators, by requiring lenders and homeowners to take 
responsibility; and it offers tax breaks to first-time home buyers.
  In this bill we are also ensuring that legislation increases the 
stock of affordable housing by preserving affordable rental housing for 
seniors and other populations in communities across America; provides 
tax incentives for the production of rental housing for low-income 
populations.
  So while all of the attention is on the GSEs, Fannie Mae and Freddie 
Mac and the rest, I wanted to be sure that people understood what was 
happening to help working families in America.
  I would have liked to have seen a seller-financed down payment 
provision that would help low- and moderate-income families achieve 
homeownership, and I hope that that issue will be revisited in future 
legislation. I would also hope that we can review carefully what the 
most appropriate government structure is to oversee the GSE, including 
the Federal home loan banks. The Federal home loan banks were not part 
of the problem, and I know they have some concern about whether a 
single individual, an executive director or a governing board would 
provide better governed insight. I think it would be important for us 
to review this.
  On the subject of our veterans, this legislation, and thanking Mr. 
Frank, is also helping returning veterans achieve the dream of 
homeownership by increasing the VA home loan limit for veterans in 
high-cost areas. I'm so proud of that. It is extending the length of 
time veterans are protected from foreclosure upon their return from 
service from 3 months to 1 year.
  The bill does many, many other things, too numerous to mention here, 
but suffice it to say that we are addressing a crisis of historic 
proportions, and the bill protects the futures of our families and 
their housing.
  Having just returned from the gulf coast region, I would also like to 
note the significant contributions to this bill of two of our newest 
Members of the House, both of whom hail from the gulf area, Don 
Cazayoux from Louisiana and Travis Childers from Mississippi. 
Congressman Cazayoux and Congressman Childers sponsored legislation 
cutting red tape at HUD so that public housing facilities can receive 
swift assistance from FEMA after a natural disaster. Their legislation 
also authorizes funds to combat violent crime on or near the premises 
of public or federally assisted housing facilities. Their achievement 
is a testament to their diligence and dedication in representing their 
districts.
  As this bill was going forward, I just might say about 2 weeks ago 
around this time we thought we had a mortgage foreclosure housing bill 
that we would bring to the floor. It was then that we heard that 
following weekend, a week-and-a-half ago, from Secretary Paulson that 
the GSE language provisions needed to be in this bill. That made a 
drastic change in the legislation making it a much bigger package.
  While we all understand that the last thing our economy needs is for 
Fannie Mae and Freddie Mac not to be able to make loans and we go 
forward giving confidence to the markets that Congress will act and the 
system should be trusted for what Congress is saying about this, I 
think down the road a bit we should review the hybrid nature of Fannie 
and Freddie. I know that this bill gives authority to review the 
compensation of the executives of those institutions, and I think 
that's very important.
  Owning a home is an essential part of the American dream. It's not 
only about what it means to individuals, it is what it means to the 
community, putting down roots. It's what it means to the economy as we 
take an interest in our homes and make them habitable. By expanding 
homeownership opportunities and protecting families against 
foreclosure, we are helping to keep the American dream of homeownership 
alive by restoring confidence in the housing market. Our economy can 
begin to grow and create jobs for the American people again.
  For this reason, I don't think we could have been better served than 
by the tremendous leadership and knowledge and perception of the 
distinguished chairman of the committee, Barney Frank. I thank you for 
your leadership once again, Mr. Frank, and by the relentless 
persistence of Congresswoman Maxine Waters on behalf of low-income 
people and homeowners and renters in our country. Thank you for your 
leadership.
  Thanks to Mr. Rangel as well. It seems like every bill we're thanking 
Mr. Rangel because he has such an important part of it. He has so much 
knowledge of the process, stamina, and working on legislation day in 
and day out, we're deeply in his debt, and in this case, he was well 
and ably served by Congressman Richie Neal.
  Again, this is a major accomplishment for the Congress. I'm glad it's 
being done in a bipartisan way with the Congress and the administration 
and hope that it will be signed into law this week.
  Thank you again, Mr. Frank.
  Mr. BACHUS. Mr. Speaker, at this time I would like to yield 2 minutes 
to the secretary of the Republican Conference, the gentleman from Texas 
(Mr. Carter).
  Mr. CARTER. I thank the gentleman for yielding.
  Last week, the so-called experts came to town and they told us that 
we need to shore up Fannie Mae and Freddie Mac to provide stability to 
the housing markets and to shore up and give stability to our financial 
institutions.
  I listened very calmly to that and decided it made sense to me, and I 
think it makes sense to most everybody in this conference. I didn't 
hear anything about blank checks, but I did hear about shoring up the 
system. I certainly didn't hear anything about a housing trust fund or 
community block grants for buying foreclosures, but that's in this bill 
and that concerns me.
  If we just take a look at the housing trust fund, we see a $9 billion 
permanent tax against Fannie Mae and Freddie Mac. Now wait a minute. I 
thought we were shoring up Fannie Mae and Freddie Mac. Now we're taxing 
them.
  But besides that, over the next 3 years this will be used for the FHA 
bailout, and that makes some sense. Sixty-five percent of these funds 
will go to States that spend it on rental housing activities and low-
income homeownership. That sounds like it makes sense, although it 
really wasn't what we were talking about but it makes sense. And then 
35 percent will be distributed by the Secretary of Treasury to groups, 
groups that work in housing, I suppose, like ACORN and La Raza.
  But there's a problem here that I see that there doesn't seem to be 
any permanent oversight that would prevent this kind of money that 
could potentially go into something that would be very abusive or 
fraudulent. It concerns me. The community block grants were not part of 
what we were asked to do either. Both these items have come before this 
House before unsuccessfully. But now when we have one of these must-
pass golden opportunities that the Democrat majority sees, then they 
put the things on there that otherwise they didn't feel confident they 
could get done, and then they ask us to do this to save the financial 
institutions

[[Page 16048]]

of Fannie Mae and Freddie Mac and others.
  This doesn't sound like what the American people sent us here to do. 
They sent us here to work on the problems that are before this Nation 
and are important.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1 minute to the 
gentlewoman from Ohio (Mrs. Jones) who has been very concerned with 
this crisis given the impact that it has in her home district.
  Mrs. JONES of Ohio. Thank you, Mr. Chairman, and Subcommittee Chair 
Maxine Waters for your leadership in hosting a hearing in my 
congressional district.
  Very quickly, I want to talk about the opportunity to simplify the 
Federal Historic Rehabilitation Tax Credit which is included in this 
bill, and I want to thank you because I have been working on that for 
years.
  But I'm really having a problem here today because years ago, we were 
talking about expanding homeownership opportunity and we did it. But we 
didn't protect the people. So the predatory lenders got in there and 
they stole people's property. They stripped the equity from our 
neighborhoods so that there are senior women who own their homes 
outright that are now on the streets somewhere. They don't have a home. 
There are families who will not be able to pass that wealth from one 
generation to the next. Not only have we robbed this generation, we've 
robbed grandbabies and great-grandbabies.

                              {time}  1615

  So what I'm saying to you is we have an opportunity to fix it. We 
have an opportunity to take care of these folks that have been robbed.
  The SPEAKER pro tempore (Mr. Weiner). The time of the gentlewoman has 
expired.
  Mr. FRANK of Massachusetts. I yield the gentlewoman an additional 30 
seconds.
  Mrs. JONES of Ohio. I say we need to take advantage of the 
opportunity. Let's save some communities. Let's save public education, 
that understands that if we don't have a tax base, there's no money to 
go to a school; that understands if we don't have a tax base, cities 
can't collect garbage. They can't do what they need to do.
  Come on. You understand what happened here. People got robbed, they 
got tripped, and it's now time for us to help them, just like we helped 
Bear Stearns and everybody else. Let's help the people.
  Mr. BACHUS. Mr. Speaker, I'd like to inquire into the time remaining 
on each side.
  The SPEAKER pro tempore. The gentleman from Alabama has 5 minutes. 
The gentleman from Massachusetts has 11\1/2\ minutes.
  Mr. BACHUS. Mr. Speaker, due to the imbalance, I'd reserve the 
balance.
  Mr. FRANK of Massachusetts. I accept that we should. The imbalance is 
not intentionally done, just we're better at time management.
  I now yield 3 minutes to one of the leading members of our committee 
in the preparation of this bill, the gentleman from North Carolina (Mr. 
Watt).
  Mr. WATT. Mr. Speaker, I thank the chairman for yielding time.
  This is a big, big deal when it comes to housing, when it comes to 
responsible credit, when it comes to economic recovery in our Nation. 
This could perhaps be the most important bill that we have considered 
during the 16 years certainly that I've been a Member of Congress.
  And to the extent that a lot of these reforms were already in the 
pipeline and well-thought-out and are now being implemented in response 
to a crisis, the fact that the crisis has occurred has forced us to do 
it.
  And then there are some things in the bill that are being done solely 
in response to the crisis, and some of those things have been 
questioned by our colleagues on the other side as perhaps extending 
more responsibility to Fannie and Freddie, while at the same time 
increasing their risk, and there are concerns about that.
  One of the most important things I think in this bill is a lot of 
these bad loans are having to be unwound, and borrowers need counseling 
to get them unwound. And we've given some funds in this bill to fund 
ongoing counseling, and we've added to it the ability to get some legal 
advice.
  On the Senate side, they put in a provision. We had already said you 
can't use any of that money for class action litigation. On the Senate 
side, they put in a provision that said no civil litigation, and I 
think I'm satisfied that civil litigation is not broad enough to cover 
advice about foreclosures, that I've asked the Chair just to give me 
his opinion about whether the language in the bill is broad enough to 
foreclose any legal assistance with foreclosures.
  Mr. FRANK of Massachusetts. Would the gentleman yield to me at this 
time?
  Mr. WATT. I'd be happy to yield.
  Mr. FRANK of Massachusetts. All the debates I've heard about civil 
litigation have been concerned that plaintiffs' lawyers would initiate 
lawsuits. We're talking here, as the gentleman well knows, about 
citizens who are finding themselves as defendants in foreclosures, and 
I can't imagine that people meant to exclude the ability of lawyers to 
defend people when we've got a record of some of these foreclosure 
packages being abusive.
  So I would agree with the gentleman, and if necessary, I would hope 
we could make that very clear that defending someone who's being 
foreclosed upon, when there have been inappropriate practices isn't 
what has generally been meant here by a stopping the initiation of 
civil litigation.
  Mr. WATT. I thank the chairman for making that clarification. I think 
this is a good bill. When you legislate in a crisis situation, you 
always get some concerns, but overall, this is a wonderful bill, and we 
need to pass it.
  Mr. BACHUS. Mr. Speaker, at this time, I yield 3 minutes to the 
gentleman from Texas (Mr. Hensarling).
  Mr. HENSARLING. I thank the gentleman for yielding.
  Mr. Speaker, Fannie and Freddie have become financial Frankensteins 
that now threaten to gobble their creators. They're private companies 
that receive special congressional benefits granted no other companies 
in America, and with these special benefits, they have learned how to 
privatize their profits and socialize their losses.
  They've taken these special privileges, and their executives have 
received millions and millions of dollars in bonuses, some of whom 
received those bonuses through manipulating earnings, cooking the 
books, by privatizing their profits.
  And now we have a bill before us that, taken to its logical 
conclusion, could cost the taxpayer $5 trillion, increase the national 
debt 50 percent overnight. They have learned how to socialize their 
losses.
  Mr. Speaker, I will admit that contingency is unlikely, but it is 
likely enough that we have this package before us, because I will 
admit, Mr. Speaker, that unfortunately, today, Fannie and Freddie are 
too big to fail. But shame on us if we allow them to be too big to fail 
tomorrow, or the next year, and send yet again the taxpayer the bill.
  This legislation before us, Mr. Speaker, not only doesn't prevent a 
future multibillion dollar bailout, it actually increases its risk.
  Mr. Speaker, item number one: this bill puts on a mortgage tax on 
Fannie and Freddie. Now, let's think about that for a second. These are 
companies that apparently are so poor that we have to bail them out, 
but apparently, they're so rich that we can impose a new tax on them. 
It's insanity, Mr. Speaker.
  Conforming loan limits. Under this legislation, their conforming loan 
limits can rise, meaning they can engage in even more risky behavior 
that has nothing to do with low-income housing.
  Their portfolio cap has already been lifted. Under this legislation 
their portfolio holdings can increase, who two Federal chairmen have 
cited as a great source of systemic risk throughout our economy.
  Their capital standards, already low, they can be lowered even still. 
I mean,

[[Page 16049]]

they're a third of what a well-capitalized bank should be. We go from 
an implicit government backing to explicit government backing.
  And, Mr. Speaker, think about the precedent. If you're big enough, if 
you're interconnected enough, if you spend $170 million on lobbying, 
you become too big to fail. If you're small, independent, and you don't 
have a lobbyist, well, guess what, you're too small to help but you can 
still pay the tab for Fannie and Freddie.
  It's time to take away their special privileges. It's time to 
introduce legislation over a reasonable period of time that privatizes 
these institutions. Mr. Speaker, I will do just that tomorrow.
  We should reject this bill and not send anymore bills to the 
taxpayer.
  Mr. FRANK of Massachusetts. I want to now yield to the chairman of 
the Budget Committee who has been a very important factor in our being 
able to pull this together, the gentleman from South Carolina (Mr. 
Spratt), 2\1/2\ minutes.
  Mr. SPRATT. I thank the gentleman for yielding.
  We are in the midst of a recession, which is not your garden variety 
business down-cycle. This recession started with the collapse of sub-
prime mortgages, which has taken a toll on investment banks, like 
Lehman Brothers and Bear Sterns, and even the biggest of the commercial 
banks, like Citibank.
  At the outset, it seemed that the effects of the recession would be 
felt mostly by those institutions that were long in sub-prime 
mortgages. Since Fannie Mae and Freddie Mac deal mainly in prime 
mortgages, typically with equity of 20 percent, and not sub-prime 
mortgages, it was felt at first that these institutions, with their 
government-sponsored status, and their implicit guarantee, would be 
part of the solution as opposed to part of the problem. It was felt 
that maybe they could even take up some of the defaulted sub-prime 
paper. But as foreclosures increased, and housing values decreased, and 
net interest rate spreads worsened, Fannie Mae and Freddie Mac began to 
feel the effects, and the financial markets began to question their 
financial statements, which, I will emphasize, state positive net worth 
and positive cash flow.
  Secretary Paulson was able to slow down the steep fall in value by 
stating explicitly and emphatically what has been implicit since these 
entities were first created, namely, that the credit of the United 
States stands behind them. The most important purpose of this bill is 
for the Congress to affirm in law what the Secretary has declared, or 
to be more specific, to confer on Treasury the power to extend to these 
two entities, Fannie Mae and Freddie Mac, an open-ended line of credit.
  It's fair to ask why no ceiling on the line of credit. The answer may 
seem paradoxical, but the Secretary of Treasury has assured us that the 
larger and less restricted the credit is, the less likely the lines 
will ever be drawn down. Creditors will not need to worry if they 
forbear, if they don't cash in, they may not be paid because come hell 
or high water the Federal Government's credit stands behind these 
entities.
  For that pledge also to be taken seriously by the market as credible, 
it's necessary to increase the debt ceiling of the United States. We 
did that in the last budget resolution we adopted here in the House. 
This bill, once again, would confirm and raise the debt ceiling of the 
United States, giving the Secretary headroom and credibility when he 
says the standby lines of credit that we're extending will be adequate 
to accomplish the effect it's intended.
  This debate is about housing and two entities, GSEs, but it's also 
about our credit globally. If these two entities were to default and 
not have the United States government back up its guaranty, the 
consequences could be truly calamitous.
  This is also good policy, counter-cyclical policy for the recession 
itself. It's a good bill, good policy, and I urge everyone to support 
it.
  I thank the gentleman.
  Mr. FRANK of Massachusetts. Let me inquire of my colleague, I 
understand he only had one more speaker?
  Mr. BACHUS. Yes, that is correct.
  Mr. FRANK of Massachusetts. Well, we have two. So I will now yield to 
the gentlewoman from California (Ms. Waters) for 2 minutes and then 
I'll be closing on our side.
  Ms. WATERS. As we wind down this debate, I again want to thank Barney 
Frank for his tremendous leadership. I want to thank Nancy Pelosi for 
listening to Barney Frank and coming together to take a very strong 
stand to help us to realize this very comprehensive and relevant piece 
of legislation.
  This legislation does a lot of good things: first-time home buyers 
assistance, tax credits, low-income housing tax credits, counseling 
funds that are targeted to the most needy neighborhoods, the 
strengthening of FHA, the refinancing of troubled mortgages by FHA, $4 
billion to the cities, standby authority for the GSEs help to create 
more confidence in the markets.
  The sub-prime meltdown created a crisis. This is a comprehensive, 
realistic response, and I'm proud of the work not only of Chairman 
Frank but of Charlie Rangel and Senator Dodd who left the $4 billion in 
from the Senate side, the Financial Services Committee, my Subcommittee 
on Housing and Community Opportunity.
  We did not get the seller funded downpayment assistance program, but 
my subcommittee will start immediately to work on this legislation so 
that we can come back in a few months with a stand-alone piece of 
legislation to do what needs to be done.
  This is an important program. This program that's helped over 730,000 
homeowners between the year 2000 and 2007 is extremely important to 
helping those who can't afford to pay the mortgage every month. They 
cannot afford that downpayment to get into the home. It works. It works 
well. It needs to be understood. We need to put it in law and do it 
correctly.
  Mr. FRANK of Massachusetts. Would the gentlewoman yield?
  Ms. WATERS. I yield to the gentleman from Massachusetts.

                              {time}  1630

  Mr. FRANK of Massachusetts. We were able to postpone the deadline 
there of October 1. There is also an issue on risk-based pricing. I 
believe we will have both of those resolved in a more flexible way 
before October 1 so that seller financing and risk-based financing, 
appropriately done, will not go out of existence.
  Mr. BACHUS. Mr. Speaker, I yield the balance of my time to the 
gentleman from New Jersey (Mr. Garrett).
  The SPEAKER pro tempore. The gentleman from New Jersey is recognized 
for 2 minutes.
  Mr. GARRETT of New Jersey. Mr. Speaker, the American taxpayer today 
should be alarmed. No, he should be outraged. The taxpayer is being 
asked to be put on the hook for $5 trillion, the largest increase ever 
in U.S. history.
  A blank check is being given to be written by this administration. 
$800 billion is being asked for an increase in our debt limit. The CBO 
even says $25 billion potentially on the hook just to the year 2009.
  Experts have pointed out what this all means to you and I, the 
taxpayer, higher costs, higher inflation, and, of course, the prospects 
of ever higher taxes as well. We here today are crossing the Rubicon. 
Just as Caesar crossed into Rome, so too are Secretary Paulson and 
Chairman Frank, locked arms together, to cross the Rubicon and into 
that uncharted morass of socializing the loss and privatizing the 
profits. As the people yelled back then in those days, there is no 
turning back. So here we are today.
  Are we to stand here today and listen to those same people who 
brought us to this precipice and now ask us to join with them as we 
jump off? Yes, that's what we are being asked to do.
  I would note today in the Wall Street Journal, Paul Gigot writes that 
back in 2003 that the head of Countrywide was yelling at him and others 
as well, saying that we don't understand the markets and mortgages and 
whatnot, and there is no systemic risk with the GSEs.

[[Page 16050]]

  Well, Chairman Frank and others said the same thing, that we just 
don't understand and not to worry. There are only a few people in those 
years that stood up, people like former Congressman Richard Baker who 
said that there would be a problem down the road.
  I joined Richard Baker and others saying we must be doing something 
back then, sever the link to the Federal Government, end the $2.5 
billion credit line, end the influence of buying, $200 million by 
lobbyists, by these entities, using their influence to make sure that 
no reform could get done. We tried to pass legislation that would give 
us just basic reform, but all those initiatives were stopped at the 
very brink.
  Also during that time, Chairman Frank told us that this would not 
happen.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. GARRETT of New Jersey. He said, ``I'm not going to bail them 
out.''
  Mr. FRANK of Massachusetts. Regular order.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself the balance 
of my time.
  The SPEAKER pro tempore. The gentleman is recognized for 4 minutes.
  Mr. FRANK of Massachusetts. The resemblance between reality and the 
rhetoric from New Jersey is even thinner at this point than it usually 
is. In fact, in 2003 and earlier, many of us were trying to do some 
reforms.
  In 2005, I supported Michael Oxley, the former chairman of the 
committee and others, in enacting reform. The fact is very clear--
Republican rule for 12 years, no Fannie Mae/Freddie Mac reform. We took 
office, and 3 months after the Democrats became the majority, the 
Financial Services Committee, under the Democrats, and this House, 
passed a bill that increased regulation of Fannie Mae and Freddie Mac 
to the satisfaction of this administration. Twelve years of inaction 
under the Republicans, in 3 months----
  Mr. GARRETT of New Jersey. Will the gentleman yield on that point?
  Mr. FRANK of Massachusetts. No.
  In 3 months we did it in the House, and it took the Senate, and there 
was, unfortunately, obstruction from Senate Republicans, but it finally 
got done.
  Secondly, we have the myth of the $5 trillion, the silliest single 
misleading statistic I have ever heard. $5 trillion is the total value 
of mortgages held by people insured by Fannie Mae and Freddie Mac. The 
gentleman from Texas said this could reach $5 trillion. It will reach 
the sky on a broomstick before that.
  Mr. GARRETT of New Jersey. Will the gentleman yield on that point?
  Mr. FRANK of Massachusetts. No. I ask the gentleman to stop harassing 
me. He had his time. I would like to conclude. We had equal time here.
  The $5 trillion means that--in the first place, nothing in this bill 
assumes any responsibility for any of those mortgages. Zero. It is 
stand-by authority to the Secretary of the Treasury to make the loans.
  As the gentleman from New Jersey acknowledged, the CBO said this 
might cost $25 billion. It will probably cost nothing. It might cost 
$25 billion. How did $25 billion become $5 trillion? By fantasy. In 
fact, what you have is if every single mortgage held by Fannie Mae and 
Freddie Mac were to pay zero, then you would have a $5 trillion 
problem, but it wouldn't be ours.
  Mr. Speaker, this bill is not to the liking of any single individual 
in all of its aspects, but it shows our ability to govern, because 
every single organization that has been advocating for low-income 
housing, all of the organizations that are in the business of building 
and selling housing, the organizations concerned with the financial 
health of this country, and the mayors and the Governors all support 
the bill, the Financial Services Roundtable, the American Bankers 
Association, the Mortgage Bankers Association, the National Association 
of Realtors, the National Association of Home Builders, the United 
States Conference of Mayors, the National Governors Association, and 
all the advocacy groups, the National Association of Consumer 
Advocates, National Community Reinvestment Coalition, National Consumer 
Law Center, National Fair Housing Alliance, National Low Income Housing 
Coalition.
  The point is this. If we had a bill that was perfect for any one of 
these groups, you wouldn't have this coalition. These are people who, 
unlike my conservative colleagues who think that their administration 
has suddenly lost all of its moorings and they think that the Realtors 
and the home builders and the Financial Services Roundtable and the Low 
Income Housing Coalition and the home builders, all of these people 
don't understand. That's because they know the difference between a $5 
trillion fantasy and a $25 billion stand-by authority to prevent 
terrible economic damage.
  Here is the final point. No solution to a problem could be more 
elegant than the problem. We are in this problem because of excessive 
deregulation that led to the subprime explosion. The gentleman from 
Alabama and I and other members of the committee, my two colleagues 
from North Carolina, tried several years ago to prevent it. I 
acknowledge that we worked together. We were overruled by higher 
political authority at the time under the Republican-controlled 
Congress.
  We are suffering from the results of the subprime. As to Fannie and 
Freddie, yes. That's a hybrid form that none of us here created that we 
should look at, and we will look at. But to deny a emergency response 
until we do that would be inviting disaster.
  Mr. MURPHY of Connecticut. Mr. Speaker, I rise today in support of 
the American Rescue and Foreclosure Prevention Act of 2008. This 
legislation, debated over many weeks and months, and evolving over that 
time, is extraordinarily important to the financial health of not only 
the housing market but the Nation's economy.
  As we create a new world-class GSE regulator, provide refinancing 
assistance to hundreds of thousands of families, provide for an 
affordable housing trust fund and provide the Treasury Department with 
the tools it needs to ensure the solvency of Fannie Mae and Freddie 
Mac, we should also continue to consider measures that could further 
increase the stability and transparency of the housing market.
  Congress should continue to look into the role that appraisals have 
had in skewing the housing market and thus encouraging the 
proliferation of overvalued mortgages. I hope that we could take a 
serious look at requiring the GSEs to incorporate the Cost Approach for 
appraisals in the method they currently rely on to appraise properties.
  For more than 60 years before the standard was changed in 1996, the 
GSEs required the use of the Cost Approach on home property appraisals. 
The Cost Approach is a method used as a way to benchmark the actual 
monetary value of the structure being appraised which in the least 
provides a floor for an accurate appraisal. With only a reliance on 
market values, appraised values of properties have had less and less to 
do with the actual demonstrative value of the structure and more and 
more to do with a housing market that we are now finding out was over 
inflated.
  By continuing to take a hard look at issues like the Cost Approach, 
this body can ensure that we will not rest on the passage of today's 
legislation but will continue to aggressively act to ensure that the 
housing markets operate in a manner based more strongly on true 
economic fundamentals.
  Mr. STARK. Mr. Speaker, I rise today to reluctantly support this 
broad housing legislation (H.R. 3221). This bill provides real help to 
hundreds of thousands of struggling families and institute long overdue 
regulatory reforms for the Government Sponsored Entities (GSE). My 
support, however, for the many important provisions in this legislation 
is tempered by the fact that taxpayers are potentially on the hook for 
a bailout of wealthy GSE investors.
  In the first 6 months of 2008, over 230,000 default notices have gone 
out to homeowners in California. It is imperative that Congress act to 
assist these families and help keep as many of them in their homes as 
possible. By authorizing the Federal Housing Administration (FHA) to 
provide refinancing opportunities for at-risk borrowers, this bill will 
help an estimated 400,000 families keep their homes. This legislation 
also helps to ensure that future borrowers are not steered into risky 
sub-prime loans by increasing the conforming loan limit for FHA backed 
loans. In addition, the bill helps to stabilize neighborhoods 
devastated by foreclosures by providing $4 billion in

[[Page 16051]]

grants for local communities to purchase foreclosed homes and convert 
them into affordable housing. Finally, the bill begins to answer the 
long-term shortage of affordable housing by creating a robust trust 
fund that will be used to create and maintain housing for low-income 
families.
  After years of lax regulatory oversight driven by the discredited 
free market dogma of the Bush administration, today we are reversing 
the tide by creating a new, independent regulator for the GSEs. This 
regulator will have the power to rein in the worst excesses of the 
GSEs, including egregious executive compensation. If such a regulator 
had been in place during the housing boom, perhaps we would not be in 
the perilous position we find ourselves in today.
  Despite the many positive and necessary aspects of this bill I am 
deeply troubled that we are potentially bailing out the very investors 
whose greed drove the housing bubble and mortgaged the future of 
countless families. In effect, by providing an uncapped line of credit 
to the GSEs we are saying that we will socialize their risks, but for 
individuals struggling to pay their bills we leave them to the private 
market. We should be doing just the opposite.
  Despite my misgivings, Congress needs to act and the perfect should 
not be the enemy of the good. The positive aspects of this bill that 
will provide relief to communities afflicted by the recession outweigh 
the negatives. For that reason, I urge all my colleagues to support 
this bill.
  Mr. MITCHELL. Mr. Speaker, I rise today to express concerns about 
H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act 
of 2008.
  Arizona has been hit hard by the current banking and housing crisis 
and currently ranks third in the nation in foreclosures. Coupled with 
rising energy and food costs, my constituents are painfully aware of 
the tough economic times we are in.
  I proudly voted for H.R. 3221 when it was originally considered by 
the House on May 8, 2008. This comprehensive housing legislation would 
provide critical reform to the regulatory agencies to which the 
government sponsored enterprises, like Fannie Mae and Freddie Mac, 
report. That bill would also provide relief to homeowners by 
permanently allowing Fannie Mae and Freddie Mac to purchase larger 
loans, which would provide mortgage market liquidity for refinancing 
and the purchasing of homes in foreclosure.
  A strong, independent regulator is important to ensuring that Fannie 
Mae and Freddie Mac remain accountable for excessive risk or 
undercapitalization. The current regulatory structure is terribly 
inadequate and I feel it is important that this new regulator be 
empowered as soon as possible.
  I am pleased to see that the legislation we are considering today 
includes assistance for first-time homebuyers and property tax relief 
for current homeowners. The $7,500 credit for first-time homebuyers is 
like an interest-free 15-year loan that will ensure that homebuyers 
without the traditional down payment capital are able to purchase their 
first home, expanding homeownership in the United States.
  The standard deduction for property taxes, included in this bill, of 
$500 for single filers and $1,000 for joint filers is important to make 
sure that homeowners suffering from rising inflation get relief in 
paying their property taxes, which have gone up in Maricopa County and 
across the Nation.
  This bill would also allow the Federal Housing Administration (FHA) 
to insure larger mortgages. By insuring mortgages, this agency serves 
an important function by lowering interest rates, thus making buying a 
home more affordable. The bill also allows FHA to lower monthly 
payments for borrowers that pay their loan payments on-time for the 
loan's first 5 years.
  These provisions, and many more in the bill, will all provide 
important relief to homeowners, bolster the struggling housing market, 
and re-establish confidence in the banking industry that the U.S. 
Government is acting quickly to address the most immediate concerns.
  However, I am troubled by the inclusion of an unlimited U.S. Treasury 
credit line for Fannie Mae and Freddie Mac, and including the authority 
for the U.S. Treasury to purchase stock in these private companies. I 
am concerned that this new authority will set a dangerous precedent and 
provide impetus for other private financial institutions to ignore risk 
in the future.
  This may also have serious implications for the Federal budget 
deficit and the growing national debt, which will increase the 
statutory limit to $10.6 trillion from $9.8 trillion and $1.2 trillion 
above the current national debt.
  Although, I think it is important to restore confidence in Fannie Mae 
and Freddie Mac, who guarantee roughly half of the mortgage debt in 
this country, I strongly believe that the Treasury Department must 
carefully consider the implications of using the authority provided in 
this bill.
  I voted against the rule providing for consideration of this bill 
because it does not afford us an opportunity for a separate debate and 
vote on this new authority. Given that opportunity, I would have 
encouraged my colleagues to take a closer look at the need for this 
authority at the present time. As I am now faced with an imperfect 
package, I cannot, in good conscience, oppose a measure that would 
provide so much urgently needed relief to my constituents, homeowners, 
and soon-to-be homeowners across Arizona.
  Mr. VAN HOLLEN. Mr. Speaker, today we consider the Senate Amendments 
to the American Housing Rescue and Foreclosure Prevention Act to assist 
struggling homeowners, help stabilize the housing market and to help 
those homeowners who are being financially hurt by rising foreclosures 
in their neighborhoods.
  Originally passed by this body in August of last year, this bill 
represents a compromise between the administration and Democratic and 
Republican congressional leaders, and retains most of its original 
provisions while incorporating the Administration's plan to provide 
explicit government backing for Fannie Mae and Freddie Mac. The bill 
also provides emergency assistance for the redevelopment of abandoned 
and foreclosed homes to help stabilize the housing market and our 
neighborhoods.
  To address one of the root causes of the mortgage crisis, the bill 
specifically targets the Federal Housing Administration and Fannie Mae 
and Freddie Mac.
  The bill overhauls the FHA to increase the market share of mortgages 
they insure, 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, and modifies disclosure 
requirements to provide more information concerning mortgage choices. 
The bill also creates a new independent agency to regulate Fannie Mae 
and Freddie Mac to place these entities into conservatorship or 
receivership in the event of a financial crisis.
  In addition to providing assistance to home buyers and homeowners in 
the form of tax credits, and a reduction for real property taxes, the 
bill also provides assistance for low-income rental housing, and four 
billion dollars in additional Community Development Block Grant 
resources to help states and localities rehabilitate neighborhoods 
harmed by rising foreclosures.
  Despite much evidence to the contrary, there are still many who think 
this bill is about bailing out Fannie Mae. As we all know, as mortgage 
defaults have risen and home prices have fallen, Fannie Mae and Freddie 
Mac have reported billions of dollars in realized and unrealized 
losses. Freddie Mac, for example, reported at the beginning of this 
month that if it had been forced to liquidate its holdings at the end 
of the quarter, it would have been left with a deficit of $5.2 billion.
  It is crucial to American economic health that we work to keep these 
two important institutions on sound financial footing. According to the 
Center for Economic and Policy Research, due to the collapse of the 
housing bubble and the subsequent collapse in housing values, the vast 
majority of Americans are accumulating little or no wealth and are in 
danger of becoming completely reliant on Social Security and Medicare 
to support them in their retirement years. Since homeownership is the 
way most Americans accumulate wealth, and since Fannie Mae and Freddie 
Mac own or guarantee more than 40 percent of U.S. home mortgages, they 
cannot be allowed to fail.
  This bill will help keep them from failing by increasing their 
available credit lines, allowing the Treasury Department to purchase 
their equity and allowing the Federal Reserve to reset their capital 
requirements. The funds provided by this bill will only be made 
available if the home loans these institutions guarantee default. By 
making additional financial support available to these institutions, 
Congress sends a clear message to investors that we stand by Fannie Mae 
and Freddie Mac and will not allow them to fail. If investors are 
reassured, Fannie Mae and Freddie Mac may not need to draw upon this 
funding.
  Our economy is in crisis mode. The American Housing Rescue and 
Foreclosure Prevention Act is a necessary response to stabilize the 
housing market and to come to the aid of those Americans who are 
threatened by the rising number of foreclosures in their neighborhoods.
  This is not a perfect bill--but it provides an urgent response to an 
urgent problem. I urge my colleagues to join me in supporting it.
  Mr. UDALL of Colorado. Mr. Speaker, I rise today in support of this 
bill.

[[Page 16052]]

  In the time Congress has taken to debate what steps to take to 
address the housing crisis and its related economic impact, hundreds of 
thousands of Americans have lost their homes to foreclosure and the 
U.S. economy has continued to weaken.
  Since last year, the House has been responding, and most of the 
provisions of this legislation are identical or similar to measures 
that we have passed previously. However, only now has the Senate acted, 
by passing the revised version of H.R. 3221 that is now before us. As a 
result, much precious time has passed--and the time to act is now.
  Adding to the urgency is the need to respond to the perceived 
problems affecting Fannie Mae and Freddie Mac--and the Bush 
administration's request that Congress act to validate the steps by the 
Treasury Department and the Federal Reserve to restore confidence in 
the soundness of those companies that are so critical, not just to the 
mortgage market, but the national economy and the international 
standing of the U.S. dollar.
  The provisions to implement this administration proposal have drawn 
serious criticism from well-informed people concerned that they do not 
strike the right balance between the value of supporting those entities 
and the value of subjecting them to the same market forces that affect 
other private concerns.
  I have carefully considered those criticisms, especially because, as 
a son of the West, I prefer the Federal Government's influence to be 
limited, in particular when it involves the free market process. Our 
Nation's history has shown, however, that in certain times it is the 
duty of the federal government to take action to help people 
responsibly address problems they face--particularly if, as in this 
case, government may have contributed to the problems.
  The value of Fannie Mae and Freddie Mac stock has plummeted in the 
last year, down about 80 percent. The most dramatic slide occurred just 
weeks ago, and it was the promise that Congress would pass--and the 
President would sign into law--this legislation that halted the 
Government Sponsored Enterprises' (GSEs) freefall. With Fannie Mae and 
Freddie Mac responsible for $5 trillion worth of residential 
mortgages--nearly half of the value in home loans nationwide--our 
economy could be crippled for years. With the backing of the U.S. 
Treasury Department, as outlined in this bill, we can avoid such a 
catastrophe.
  This bill also places a strong regulator in position to oversee 
Fannie Mae, Freddie Mac and the Federal Home Loan Banks, and protect 
against any similar pitfalls in the future.
  On the ground in neighborhoods throughout America, the importance of 
this legislation is much more concrete. Simply put, this legislation 
will help American families at risk of foreclosure work responsibly 
with their lenders to stay in their homes. The number of foreclosed 
properties soared through the first six months of this year, with more 
than 340,000 American families losing their homes.
  This bill will help hundreds of thousands of American families remain 
in their homes by allowing the Federal Housing Administration (FHA) to 
guarantee qualified loans. However, both lenders and homeowners must 
agree to sacrifice in order to receive the FHA's backing, with lenders 
having to voluntarily take significant losses by reducing the loan 
principal, and homeowners having to repay the government a percentage 
of the value of the home if they sell or refinance again.
  This legislation also provides States with funding to purchase, 
rehabilitate and sell foreclosed properties, and in the process improve 
the value and quality of neighborhoods hardest hit by the housing 
crunch. This package will help remove some of the housing industry's 
excess inventory by providing a refundable tax credit for first-time 
homebuyers, and by increasing the Veterans Administration home loan 
guarantee limit, so that our veterans can receive the expanded home 
ownership opportunities they deserve for serving our nation.
  This legislation also creates an affordable housing trust fund, paid 
for with a percentage of future GSE profits, to provide acceptable 
affordable housing for low- and extremely low-income families--those 
who were too often the victims of deceitful and predatory subprime 
lending practices.
  Mr. Speaker, my home State of Colorado was one of the first to 
realize the devastation of this housing crisis. Foreclosed homes can be 
found in far too many neighborhoods, especially in Adams County just 
outside of Denver--serving as a sober reminder of the need for housing 
reform. I was encouraged today to learn that the Bush administration 
removed its opposition to this bill. This legislation has been 
carefully crafted to safeguard against fraud, corporate giveaways and 
speculator abuse, and to provide a foothold for our nation's housing 
market to begin to rebound. This bill is a major step toward a more 
stable housing market, a more stable economy, and more stable 
households throughout the Nation.
  For these reasons, Mr. Speaker, I urge my colleagues to join me in 
supporting this bill.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise in support of H.R. 
3221, the ``American Housing Rescue and Foreclosure Prevention Act of 
2008''. This momentous legislation will jump-start the market for 
mortgages by establishing a true market value for the securities backed 
by these loans. H.R. 3221 responds directly to the current housing 
crisis facing this country, while providing the tools to prevent a 
repeat of these problems. This will help families facing foreclosure 
keep their homes, help other families avoid foreclosures in the future, 
and help the recovery of communities harmed by empty homes caught in 
the foreclosure process.
  This legislation provides mortgage refinancing assistance to keep at 
least 400,000 families from losing their homes, to protect neighboring 
home values, and to help stabilize the housing market at no cost to 
American taxpayers. This legislation also protects taxpayers by 
requiring lenders and homeowners to take responsibility. This is not a 
bailout; in order to participate, lenders and mortgage investors must 
take significant losses by reducing the loan principal.
  This legislation contains critical protections for taxpayers' 
dollars, including higher refinancing fees that establish a new FHA 
reserve to cover possible losses from defaults on these government-
backed mortgages. I support this legislation because only primary 
residences are eligible: NO speculators, investment properties, second 
or third homes will be refinanced and it provides $180 million for 
financial counseling and legal assistance to help families stay in 
their homes.
  H.R. 3221 gives the Secretary of the Treasury the authority to 
increase the already existing line of credit to Freddie and Fannie for 
the next 18 months, as well as giving the Treasury Department standby 
authority to buy stock in those companies to provide confidence in the 
GSEs and stabilize housing finance markets.
  While Fannie Mae and Freddie Mac both now meet the capital and 
liquidity requirements set by their regulator, given the severe turmoil 
in the markets, the standby authority is needed to increase market 
confidence and enable both enterprises to continue to raise capital and 
maintain the availability of mortgage credit. This bill requires the 
Treasury Secretary to make an emergency designation before using the 
authority--certifying that he is acting to provide stability to 
financial markets, prevent disruptions in the availability of mortgage 
finance, protect the taxpayers, and facilitate an orderly restoration 
of private markets. No spending would occur unless the Secretary 
certifies that there is an emergency that requires immediate action. 
However, if those conditions are not met, there would not be any 
increase in the deficit as a result of this legislation.
  I support that this legislation provides $4 billion in emergency 
assistance (CDBG Funds) to communities hardest hit by the foreclosure 
and subprime crisis to purchase foreclosed homes, at a discount, and 
rehabilitate or redevelop the homes to stabilize neighborhoods and stem 
the significant losses in home values of neighboring homes. This 
legislation establishes a nationwide loan originator licensing and 
registration system that will set minimum standards for loan originator 
licensing substantially improving the oversight of mortgage brokers and 
bank loan officers. It also establishes improved mortgage disclosure 
requirements that will help ensure that mortgage borrowers understand 
their mortgage loan terms.
  This legislation preserves the American Dream for Our Nation's 
Veterans. It increases the VA Home Loan limit, helping returning 
soldiers avoid foreclosure and stay in their homes. This legislation 
requires the Department of Defense to establish a counseling program 
for veterans and active service members facing financial difficulties 
and provides a moving benefit to servicemen and women who are forced to 
move out because their rental housing was foreclosed on. It also 
increases benefits paid to veterans with disabilities, such as 
blindness, to adapt their housing and allows the Veterans 
Administration to provide for improvements to homes of veterans with 
service-connected disabilities.
  This is preeminently the time to speak the truth, the whole truth, 
frankly and boldly. Nor need we shrink from honestly facing conditions 
in our country today. This great Nation will endure as it has endured, 
will revive and will prosper. As President Franklin Delano Roosevelt 
stated in 1933, ``the only thing we have to fear is fear itself--
nameless, unreasoning, unjustified terror which paralyzes needed 
efforts to convert retreat into advance.'' We must do just that. We 
must move

[[Page 16053]]

forward and that is exactly what H.R. 3221 seeks to do.
  This legislation will begin to repair, not bailout, the economy, by 
restoring confidence in the markets, limiting the damage to families 
and neighborhoods, and rejuvenating the communities with new affordable 
housing. Ironically, we celebrate the bailouts of yesteryear, when we 
believed that the power of the Federal Government was needed to get the 
country out of the Depression.
  Were the banking reform laws, emergency relief programs, work relief 
programs, and agricultural programs, the Social Security Act, and 
programs to aid tenant farmers and migrant workers--were these 
bailouts? Many of the New Deal programs under President Roosevelt were 
considered bailouts at that time. And yet, these programs brought our 
country out of the Depression, rejuvenated out economy, and gave hope 
as we sought to deal with the War overseas.


                                 Texas

  Texas ranked fourth behind California, Florida, and Illinois in pre-
foreclosures. Last year, Texas held the top seat for active 
foreclosures.
  H.R. 3221 helps homeowners and only homeowners, not speculators or 
lenders. We cannot continue to stand by as things get worse. Texas 
reported 13,829 properties entering some stage of foreclosure in April, 
a 16 percent increase from the previous month and the most foreclosure 
filings reported by any state. The state documented the Nation's third 
highest state combined foreclosure rate--one foreclosure filing for 
every 582 households.
  Many homeowners in my district are worried about missing their next 
house payment or their next home equity mortgage, or their interest 
rate going up. These families are under stress and in constant fear of 
losing their homes.
  While this bill should not be the last word in housing legislation, 
it is a great beginning. This bill coupled with Congresswoman Maxine 
Waters's bill, H.R. 5818, the Neighborhood Stabilization Act, provides 
a good starting point in providing Americans with relief.


                      Texas and what HUD is Doing

  In March, the Department of Housing and Urban Development (HUD), 
announced the Texas State Program and the cities of Houston and New 
Braunfels will receive a total of $234,868,077 to support community 
development and produce more affordable housing. HUD's annual funding 
will also provide down-payment assistance to first-time homebuyers; 
assist individuals and families who might otherwise be living on the 
streets; and offer real housing solutions for individuals with HIV/
AIDS.
  While HUD is working to help Americans, we must all do our part. We 
need to pass H.R. 3221, and we need to continue to push in a bipartisan 
manner, legislation that will ease gas and energy costs, the rising 
costs of food, and the ever-rising cost of healthcare.
  We are spending billions of dollars on the war in Iraq. I support our 
troops but I am dismayed at how our support for a war that needs to 
become less military and more diplomatic in nature, has disrupted our 
ability to take care of things at home.
  Mr. MARKEY. Mr. Speaker, I rise today in support of H.R. 3221, the 
American Housing Rescue and Foreclosure Prevention Act of 2008. I 
commend Chairman Frank and Ranking Member Bachus for their tireless 
work on this comprehensive and timely legislation.
  I am particularly pleased that the bill we are voting on today 
includes language I originally submitted as an amendment to H.R. 1851. 
This language seeks to make some technical corrections that will ensure 
that affordable housing is preserved in certain housing developments, 
including one located in Malden, Massachusetts.
  Low-income tenants of the Heritage Apartments, from my district in 
Malden, Massachusetts, have been facing possible displacement once an 
outstanding HUD mortgage is fully paid in a few years. The apartment is 
also in need of major renovations and upgrades that simply cannot be 
delayed. Unfortunately, HUD is failing to ensure that the apartment 
remains affordable and livable by placing burdensome restrictions on 
prepayment of the outstanding mortgage and subsequent transfer to a new 
owner who is willing to finance renovations. The language included in 
Section 2802, allows income-eligible residents to qualify for enhanced 
housing vouchers following the prepayment of the HUD mortgage and the 
property transfer and directs HUD to approve such actions.
  The Congressional Budget Office has determined that adoption of this 
language would result in 1 million dollars in net savings to the 
current mandatory spending over the next five years because HUD is 
currently paying mortgage interest reduction payments for the 
development, which would be nullified upon adoption of the language in 
Sections 2802 and 2803 of H.R. 3221.
  This is a good provision, and it is part of a broader piece of 
housing reform legislation that is desperately needed in response to 
the tidal wave of foreclosures that have affected families across the 
country. Again, I commend Chairman Frank and Ranking Member Bachus for 
their tireless work on this comprehensive and timely legislation. I 
urge adoption of the bill.
  Mr. MELANCON. Mr. Speaker, I rise today in support of H.R. 3221. 
Since Hurricane Katrina devastated the Gulf Coast, many families in 
south Louisiana have been working hard to rebuild their homes and piece 
back together their lives. Yet, as if this challenge wasn't tough 
enough, our complicated tax code burdened them with an additional 
financial difficulty. Today, we'll remove this road block to recovery 
for tens of thousands of families in my State.
  Unsure if the state of Louisiana would be issuing grants to rebuild 
homes after Hurricanes Katrina and Rita, many individuals claimed a 
casualty loss deduction on their income taxes. However, nearly a year 
later, when the Louisiana Road Home program began issuing rebuilding 
grants--grants which have historically been tax-free--many recipients 
were also told that they would have to pay taxes on these grants, as a 
result of an unintended consequence of our tax code.
  This bill will fix that section, making sure hurricane survivors 
don't have to pay taxes on their rebuilding grants. It allows 
recipients who have previously deducted losses on their Federal income 
taxes to simply amend their returns. Individuals who have already paid 
taxes on their recovery grants will also be allowed to amend their 
current tax returns to reflect the new law. This change will save 
homeowners thousands of dollars--dollars that are essential for the 
ongoing recovery of our State.
  I commend the Chairman and ranking member on this important and 
timely bill, and I thank them for including this vital fix. Our people 
are not asking for a windfall. They are simply asking that they pay 
their fair share and be allowed to use their grants to rebuild their 
lives. I urge my colleagues to support this bill.
  Mr. DINGELL. Mr. Speaker, I rise today in strong support of the 
Foreclosure Prevention Act of 2008, which will give much needed 
assistance to homeowners, provide increased funding for affordable 
housing, make important reforms to FHA, and restore confidence in the 
credit markets. This is the most important housing legislation to pass 
through the Congress in decades, and it will have an effect on millions 
of Americans. However, there is one specific provision included in this 
legislation that will have a particularly important effect in 
Michigan's 15th Congressional District.
  Section 2801 of H.R. 3221 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 2801 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.
  I would like to thank Chairman Frank and his staff for all of the 
hard work they have put into this legislation. In particular I would 
like to extend my sincere gratitude for the work they have done on 
Section 2801, which will help to ensure that Parkview Apartments is 
retained as an affordable housing resource in Washtenaw County.
  Mr. BRADY of Texas. Mr. Speaker, there's no question that if these 
two mortgage giant were to collapse, it would deal a serious blow to 
our economy and nearly every community would feel the negative effects. 
If the White House and this Congress are convinced the plan will calm 
the waters, then I am certainly hopeful it works. But this bailout 
fails in one important aspect: it doesn't fully solve the problems that 
brought Freddie Mac and Fannie Mae to this crisis point, so taxpayers 
have no guarantee that these two companies won't be back again for 
another handout.
  Before we use taxpayer dollars to potentially increase the national 
debt, provide an unlimited line of credit and allow the government to 
buy nearly a trillion dollars of stock in private companies, then 
Congress needs to insist on three conditions. First, unlike today, 
Freddie and Fannie must be required to have the capital standards 
necessary to ensure their fiscal

[[Page 16054]]

stability. Second, that over a set period of time they are gradually 
reduced in size so that America's housing eggs are not all in one 
basket. And third, that the leadership of Freddie Mac and Fannie Mae be 
replaced immediately. The millionaire captains who grounded this ship 
have proven they are not the ones to steer us to calmer seas.
  I am skeptical that the proposed new Federal regulator is strong 
enough to take these necessary steps so it is essential that Congress 
insist on adding these safeguards in law before we put the taxpayers on 
the hook for the bailout.
  Ms. SCHWARTZ. Mr. Speaker, I want to thank Chairman Rangel and 
Chairman Frank for working with the Senate and the Administration to 
modernize the Federal Housing Administration, provide tax incentives to 
stimulate the private housing market, and to provide greater oversight 
of Fannie Mae and Freddie Mac.
   By addressing a whole range of issues--from the foreclosure crisis 
and market concerns about Fannie and Freddie to the new and existing 
homes that are sitting vacant and further depressing the market--this 
package represents a significant step toward stabilizing the economy 
and restoring consumer confidence.
   I am proud of the portion of this package that came through the 
Committee on Ways and Means, which includes a timely, targeted, and 
well-designed first-time homebuyers credit, a new Federal tax deduction 
to help families meet rising state property taxes, and an expanded 
ability of cities and states to raise capital for infrastructure 
improvements by partnering with the Federal Home Loan Banks.
   I am particularly pleased that the package includes a bill that I 
introduced, which would enable state housing finance agencies to raise 
capital through tax-exempt mortgage revenue bonds and use these 
additional funds to help at-risk borrowers to refinance their subprime 
loans, access mortgages at a fair rate, and enable them to meet their 
financial obligations and stay in their homes.
   Specifically, this legislative language allows state housing finance 
agencies to--for the first time--use funding raised by mortgage bonds 
to refinance qualified subprime mortgages. It also increases the 
current cap on these bonds by $11 billion to ensure that the housing 
finance agencies have sufficient capital to fully take advantage of 
this new abilty to help at-risk borrowers in their states.
   This provision will work hand in hand with the Federal Housing 
Administration reforms that have come out of Chairman Frank's 
Committee--and it will allow states to play a role in addressing the 
needs of their local communities.
   It is in everybody's interest that we overcome this crisis in the 
housing market, prevent a deepening of current economic troubles, and 
maintain our competitive edge in the global economy.
   The proposal before us takes a comprehensive, reasonable and 
balanced approach to this challenge--and it is one that deserves 
bipartisan support.
  Ms. ESHOO. Mr. Speaker, I rise today to express my strong support for 
H.R. 3221, the American Housing Rescue and Foreclosure Act of 2008. I 
salute Chairman Frank, Chairman Rangel and Senator Dodd for their 
leadership and their efforts to pass this crucial legislation at a time 
when American families desperately need our help.
  Families across the country are hurting. They're being squeezed by 
the price of oil, rising food costs, higher education costs and now the 
struggle to hold onto their homes. For most Americans their main asset 
is their home. That's why it is critical to end the foreclosure crisis 
which is fundamental to the recovery of our economy.
  My home State of California has been affected as badly as any State 
in our country. Foreclosures in the Bay area are at a 20-year high, and 
in Santa Clara County foreclosures are up 512 percent from a year ago. 
These troubling figures must change and that's why I support this 
legislation.
  H.R. 3221 aims to bolster American homeownership by helping families 
across the country facing foreclosure keep their homes. It also takes 
steps to ensure that homeowners do not face foreclosures in the future. 
Affordable mortgage loan opportunities for families and seniors are 
expanded through the modernization of the Federal Housing 
Administration, with FHA loan limits raised to create affordable 
mortgage loans for moderately priced homes. A permanent Affordable 
Housing Trust Fund is also created in this bill which will fund 
building projects throughout the Nation to increase the stock of 
affordable housing in both urban and rural areas. Tax credits for first 
time homebuyers and low income homeowners are also included in this 
legislation and all of these items are accomplished without creating 
any new burdens to the taxpayer.
  The bill provides a new and substantially strengthened regulator to 
oversee Fannie Mae, Freddie Mac and the Federal Home Loan Banks. It 
gives stand-in authority to the Treasury Department in case the 
Government Sponsored Entities, such as Fannie Mae, require temporary 
federal financial intervention without placing any new risk on the 
American taxpayer. This is not a bailout. Taxpayers will be the first 
in line to be paid back before any shareholders are. Restrictions have 
been placed on the stock gains for shareholders and on compensation for 
the executives of the Government Sponsored Entities until taxpayers are 
fully reimbursed.
  I'm proud to support this bill and I urge a ``yes'' vote on the 
underlying legislation.
  Mrs. CAPPS. Mr. Speaker, I rise today in strong support of H.R. 3221, 
the American Housing Rescue and Foreclosure Prevention Act.
  This bill is a powerful response to the foreclosure crisis that has 
spread across the Nation. The recent troubles at Fannie Mae and Freddie 
Mac have shaken the economy and the bill seeks to stabilize them by 
extending them limited credit and other financial support from the U.S. 
Treasury. These institutions are the central nervous system of mortgage 
liquidity in the United States, and ensuring their continued operations 
is vital to avoiding even more calamity in our housing markets. To help 
avert future mortgage crises, the bill creates a new, strong regulator 
for Fannie Mae and Freddie Mac.
  The bill also includes much-needed reforms of the Federal Housing 
Administration. The changes will help protect lower income borrowers 
from unscrupulous lending practices that have plagued the subprime 
market. And the bill provides more funding for housing counseling to 
help consumers avoid costly mistakes and learn more about the housing 
market.
  Mr. Speaker, this calamity isn't confined to financial institutions; 
it has also spread through our towns and neighborhoods and affected 
millions of our neighbors. In California foreclosures have risen to a 
20-year high and we are feeling this pain on the central and south 
coast. That's why I'm glad the American Housing Rescue and Foreclosure 
Prevention Act provides several key provisions to help homeowners.
  For example, this bill permanently increases the conforming loan 
limits to $625,000. Median home prices in Ventura, Santa Barbara, and 
San Luis Obispo Counties are well above the national average, and our 
families continue struggling to obtain affordable housing. This 
provision will allow them to obtain financing at lower interest rates, 
while at the same time providing much needed liquidity to our local 
housing market. While I believe the limit should have been raised to 
$729,750, as was temporarily done earlier this year, this permanent 
increase to $625,000 is absolutely crucial for my district. I am 
hopeful that in the future we will continue our efforts to raise this 
limit so that it reflects the housing needs of my constituents.
  In addition, this bill will stem foreclosures by creating a voluntary 
mortgage refinancing program that allows families to stay in their 
homes. Under this program, the Federal Housing Administration will have 
the authority to refinance up to $300 billion in imperiled mortgages. 
For borrowers facing escalating mortgage payments or even foreclosure, 
this provision allows them to refinance their homes into more 
affordable, fixed-rate mortgages. To protect taxpayers, borrowers will 
have to agree to certain conditions regarding future sale of the home 
in order to participate in the program. And to ensure against the risk 
of taxpayers being saddled with overvalued loans, lenders holding these 
troubled mortgages will have to write down the loans significantly.
  Too many hard working families have found themselves the victim of 
unscrupulous lenders and watched helplessly as their piece of the 
American Dream has been snatched away from them. Even more tragically, 
many homeowners who have had no problem keeping up with their mortgages 
have seen their home values and quality of life harmed by the 
appearance of abandoned foreclosed properties in their neighborhoods. 
That is why the House went against the wishes of the President and 
included $3.9 billion for cities and towns to purchase and rehabilitate 
foreclosed homes. Abandoned properties can hurt entire communities and 
this money will prove vital in protecting against neighborhood decline 
during this crisis.
  The bill also creates a $500 million affordable housing trust fund to 
expand the housing options available for low-income working families 
and creates a first-time homebuyer tax credit worth up to $7,500. These 
two provisions will undoubtedly help young families in my district 
better afford the costs of buying a new home.

[[Page 16055]]

  Mr. Speaker, the hardworking families in our country need help. The 
House passed a very similar bill in May, which the President threatened 
to veto. Now that the housing and finance situation has continued to 
deteriorate, he has agreed to work with us in helping the American 
people. I say it's about time, and I hope that we have his continued 
cooperation as the many provisions of this legislation are carried out 
in our hometowns.
  I urge my colleagues to support this bill.
  Mr. ETHERIDGE. Mr. Speaker, I rise in support of H.R. 3221, American 
Housing Rescue and Foreclosure Prevention Act of 2008. This bill is a 
critical step towards stabilizing our housing market and providing 
assistance to thousands of Americans facing foreclosure.
  The problems that persist in our housing market are serious and 
affect millions of Americans. Thousands of families are in danger of 
losing their homes. In my state of North Carolina alone, PEW Charity 
Trusts and the Center for Responsible Lending estimate there will be 
53,254 foreclosures in 2008 and 2009. Not only does foreclosure strike 
at the heart of these families' financial stability, but the damage 
spreads across all of our communities. The same study shows that over 
330,000 homes in North Carolina will be devalued by the spillover 
impact of the foreclosures, and North Carolina stands to lose over $860 
million in property values.
  However, H.R. 3221 takes strong steps to help families facing 
foreclosure while also bolstering our housing market and economy. This 
bill also creates a voluntary FHA initiative that provides mortgage 
refinancing assistance to allow families to stay in their homes while 
also strengthening the housing market. This voluntary plan would 
require lenders to reduce some of the existing mortgage in order to 
qualify for FHA backing, and would require borrowers to return portions 
of any future profits on the house to the government in order to 
prevent foreclosure. It is important to note that under H.R. 3221, only 
owner-occupied homes facing foreclosure can qualify for this mortgage 
assistance, and speculators, investors, and second-homeowners are not 
eligible. This provision represents a compromise by all participating 
parties and can keep people in their homes and improve surrounding 
communities.
  Provisions in this bill reform and modernize the Federal Housing 
Administration (FHA) as well as government sponsored entities, GSEs, 
Fannie Mae and Freddie Mac. These changes will strengthen the FHA and 
make it a bigger force in the market to provide a better alternative to 
some of the riskier, more exotic loans that have spurred much of this 
crisis. The recent reports of major losses at Fannie Mae and Freddie 
Mac are troubling. The GSEs are crucial engines that are necessary to 
drive the slumping mortgage market that provides housing for millions 
across the country. H.R. 3221 includes a plan to give the Treasury 
Department increased authority to loan and buy credit in these GSEs. 
This backing will boost confidence in the GSEs in the marketplace, and 
may make further action unnecessary. Along with this expanded credit, 
H.R. 3221 includes a stronger and more independent regulator to oversee 
Fannie Mae and Freddie Mac and set their capital standards.
  Finally, the American Housing Rescue and Foreclosure Prevention Act 
of 2008 also includes a tax benefit of up to $7,500 for first-time 
homebuyers as well as an additional credit on property taxes for 
existing homeowners who claim the standard deduction. I am proud of the 
strong military presence in North Carolina's Second Congressional 
District, and I applaud the provisions that specifically help returning 
soldiers stay in their home and the housing counseling and benefit 
initiatives that target veterans. These measures will help revive the 
housing market and get our sluggish economy moving in the right 
direction.
  I support the passage of H.R. 3221, American Housing Rescue and 
Foreclosure Prevention Act of 2008, and I urge my colleagues to join 
me.
  Mr. LANGEVIN. Mr. Speaker, I rise in strong support of the American 
Housing Rescue and Foreclosure Prevention Act of 2008 (H.R. 3221). This 
measure will provide a helping hand for those reeling from the mortgage 
crisis. Just as importantly, it will restore confidence in our largest 
mortgage backers, Fannie Mae and Freddie Mac.
  We have all seen how unscrupulous lending practices and skyrocketing 
interest rates associated with nontraditional mortgages have devastated 
families nationwide. Sadly, these families are often left with few 
options other than to see their homes foreclosed upon. In Rhode Island, 
foreclosures have increased by 20 percent in the last six months, and 
it is our most vulnerable communities that have been disproportionately 
affected.
  Fortunately, today we are considering a package that will stem the 
tide of foreclosures by authorizing $300 billion in loan guarantees to 
establish HOPE for homeowners, a voluntary program administered by the 
Federal Housing Administration (FHA) to help at-risk borrowers 
refinance into viable mortgages. I want to emphasize that this 
assistance is not a bail-out. On the contrary, the program will require 
lenders and mortgage investors to take significant losses in the form 
of a reduced loan principal, and borrowers must agree to share any 
profit from the resale of a refinanced home with the federal 
government. Furthermore, only primary residences will be eligible, not 
investment properties, vacation homes or speculators' purchases.
  In addition, this package will provide $3.92 billion in Community 
Development Block Grants for local governments to purchase abandoned 
and foreclosed properties--a provision that is fully paid for. I am 
glad the President has finally lifted his misguided veto threat over 
this provision and will not stand in the way of local governments 
attempting to reduce the number of vacant properties in their 
communities and invest in affordable housing.
  This legislation will also revitalize the FHA, which was established 
to provide a reliable source of affordable mortgage loans for first-
time homebuyers. 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. 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. This legislation 
will also allow the FHA to raise loan limits in high cost areas and to 
offer zero- and low-down-payment loan options for borrowers that can 
afford mortgage payments, but lack the resources required for a down 
payment. I also strongly support this bill's creation of a National 
Affordable Housing Trust Fund, which will construct, rehabilitate and 
preserve 1.5 million housing units over the next ten years.
  Above all, this measure will help safeguard the interests of the 
American taxpayer and ensure that our nation's largest mortgage-
backers, Fannie Mae and Freddie Mac, remain strong. I'm pleased that 
H.R. 3221 will create a new independent agency--the Federal Housing 
Finance Agency, FHFA--to regulate Fannie Mae, Freddie Mac and the 
Federal Home Loan Bank System. Fannie Mae and Freddie Mac currently 
back nearly half of our nation's mortgages, and the FHFA will ensure 
both entities remain financially strong. The creation of a strong 
independent regulator for our Government Sponsored Enterprises is long 
overdue. Four years ago I shared Alan Greenspan's concerns that the 
GSE's were involved in risky investments, saying on the House Floor: 
``It appears as though the increased risk that GSE's have been taking 
on is not related to their primary operation of purchasing affordable 
housing loans in the secondary market. Rather, much of their risk comes 
from derivative investments in an effort to maximize profits for 
shareholders. As we learned from Enron, complex derivative schemes may 
boost profits in the short-term, but the long-run risks can be too 
difficult to manage.'' While I regret that it took far too long for 
this problem to be taken seriously, I believe we are taking the proper 
action today.
  This measure will also provide temporary, emergency authority through 
the end of 2009 to the Treasury Department to purchase stock in Fannie 
Mae and Freddie Mac to provide stability to our financial markets, 
prevent disruptions in the availability of mortgage finances, and 
protect taxpayers. While many, including the Congressional Budget 
Office, CBO, predict this authority may never be used, it is necessary 
to ensure a last-resort federal guarantee for our largest mortgage 
backers.
  The American Rescue and Foreclosure Prevention Act also includes 
several key tax incentives designed to spur home buying and put money 
back in the hands of home owners. This legislation creates a $7,500 
credit for first-time homebuyers, designed to serve as an interest-free 
loan to be paid back after fifteen years. H.R. 3221 will also provide 
taxpayers that claim the standard deduction with an additional property 
tax deduction of up to $500 for single filers and $1,000 for joint 
filers.
  Finally, the bill before us will combat unscrupulous lending 
practices and increase transparency by establishing a nationwide loan 
originator licensing and registration system that will set minimum 
standards for licensing and substantially improve oversight of mortgage 
brokers and loan officers. Additionally, it improves disclosure 
requirements to help ensure that borrowers fully understand their 
mortgage loan terms.
  This legislation is an important and common-sense response to the 
housing crisis and will help stabilize families and our economy. I 
thank Chairman Frank for his leadership, and I urge my colleagues to 
support this bill.

[[Page 16056]]

  Mr. PAUL. Mr. Speaker, for several years, followers of the Austrian 
school of economics have warned that unless Congress moved to end the 
implicit Government guarantee of Fannie Mae and Freddie Mac, and took 
other steps to disengage the U.S. Government from the housing market, 
America would face a crisis in housing. This crisis would force 
Congress to chose between authorizing a taxpayer bailout of Fannie and 
Freddie, and other measures increasing Government's involvement in 
housing, or restoring a free market in housing by ending Government 
support for Fannie and Freddie and repealing all laws that interfere in 
housing. The bursting of the housing bubble, and the recent near-
collapse in investor support for Fannie and Freddie has proven my 
fellow Austrians correct. Unfortunately, but not surprisingly, instead 
of ending the prior interventions in the housing market that are 
responsible for the current crisis, Congress is increasing the level of 
Government intervention in the housing market. This is the equivalent 
of giving a drug addict another fix, which will only make the necessary 
withdrawal more painful.
  The provision giving the Treasury Secretary a blank check to purchase 
Fannie and Freddie stock not only makes the implicit Government 
guarantee of Fannie and Freddie explicit, it represents another 
unconstitutional delegation of Congress' constitutional authority to 
control the allocation of taxpayer dollars. While the Treasury 
Secretary has to file a report with Congress, the lack of any effective 
standards for the expenditure of funds makes it impossible for Congress 
to perform effective oversight on Treasury's expenditures.
  H.R. 3221 also takes another troubling step toward the creation of 
surveillance state by creating a Nationwide Mortgage Licensing System 
and Registry. This Federal database will contain personal information 
about anyone wishing to work as a ``loan originator.'' ``Loan 
originator'' is defined broadly as anyone who ``takes a residential 
loan application; and offers or negotiates terms of a residential 
mortgage loan for compensation or gain.'' According to some analysts, 
this definition is so broad as to cover part-time clerks and real 
estate agents who receive even minimal compensation from 
``originators.'' Additionally, this database forced on industry will be 
funded by fees paid to the Federal banking agencies, yet another costly 
burden to the American taxpayers.
  Among the information that will be collected from loan originators 
for inclusion in the Federal database are fingerprints. Madam Speaker, 
giving the Federal Government the power to force Americans who wish to 
work in real estate to submit their fingerprints to a Federal database 
opens the door to numerous abuses of privacy and civil liberties and 
establishes a dangerous precedent. Fingerprint databases and background 
checks have been no deterrent to espionage and fraud among governmental 
agencies, and will likewise fail to prevent fraud in the real estate 
market. I am amazed to see some members who are usually outspoken 
advocates of civil liberties and defenders of the fourth amendment 
support this new threat to privacy.
  Finally, H.R. 3221 increases the Federal debt limit by $800 billion. 
We are told that CBO has scored this bill at a cost of $25 billion, but 
this debt limit increase belies that. The Federal Reserve has already 
propped up the housing and financial markets to the tune of over $300 
billion, and this raise of the debt limit indicates that the cost of 
this newest bailout will likely be even more costly. I am dismayed that 
my colleagues have not learned the lessons of the PATRIOT Act and 
Sarbanes-Oxley. Massive bills passed in knee-jerk reaction to crisis 
events will always be poorly written, burdensome and expensive to 
taxpayers, and destructive of liberty.
  Ms. McCOLLUM of Minnesota. Mr. Speaker, I rise today in strong 
support of the American Housing Rescue and Foreclosure Prevention Act, 
H.R. 3221, and to congratulate Chairman Frank and Speaker Pelosi for 
their quick action to help American families.
  The dream of homeownership has become a nightmare for too many people 
in our country. Nationally, between 7,000 and 8,000 people a day are 
filing for foreclosure, and estimates show that over 28,000 Minnesotans 
will lose their homes to foreclosure in 2008. Foreclosures hurt our 
families, neighborhoods, and communities. I saw the impact of the 
foreclosure crisis firsthand when visiting the east side neighborhoods 
in St. Paul who are hit hardest by this crisis. Foreclosures result in 
lost tax revenue for local governments, reduced property values for 
neighbors, and can often contribute to criminal activity.
  Congress must act to protect families and neighborhoods from a 
further expansion of this crisis, which is why I strongly support H.R. 
3221. This legislation is a comprehensive response that will help 
families facing foreclosure keep their homes, help other families avoid 
foreclosures in the future, and help communities harmed by empty homes 
in the foreclosure process.
  Specifically, H.R. 3221 expands a Federal Housing Administration 
program to allow borrowers in danger of losing their home to refinance 
into lower-cost Government-insured mortgages they can afford to repay. 
This voluntary program is not a bailout. Mortgage investors must take 
significant losses by reducing the loan principal, borrowers must share 
any profit from the resale of the home, and only primary residences are 
eligible. In addition, this bill provides $4 billion in emergency 
assistance, CDBG Funds, to communities hit hardest by the foreclosure 
and sub prime crisis to purchase, rent, or rehabilitate vacant 
foreclosed homes with the goal of occupying them as soon as possible
  This bill provides new tax incentives to increase home buying, which 
will not only help families build wealth, but could also create jobs in 
our communities. For those who cannot buy a home, H.R. 3221 creates a 
new Housing Trust Fund to increase the Nation's stock of affordable 
rental housing at no cost to the taxpayer. The legislation protects 
veterans and returning soldiers from foreclosure by increasing the VA 
loan limit, lengthening the time a lender must wait before starting 
foreclosure when a soldier returns, and increasing benefits to adapt 
the homes of veterans with service-related disabilities.
  H.R. 3221 also responds to the financial crisis facing Government 
Sponsored Enterprises or GSEs by giving the Secretary of the Treasury 
the authority to buy stock in those companies to restore confidence in 
the financial and housing market and ensure the safe and sound 
operation of these enterprises. These GSEs are central to the housing 
market and the economy as a whole, as they are the largest sources of 
mortgage finance in the United States--buying more than two-thirds of 
new mortgages in the first three months of 2008. While recognizing this 
necessity, this legislation will also protect taxpayers by requiring 
that taxpayers are paid back before shareholders, adding restrictions 
on executive compensation, and strengthening oversight by putting an 
independent new regulator in charge. These measures will help safeguard 
the interests of the American taxpayer and ensure the availability of 
affordable home loans, while also strengthening the regulation of 
Fannie Mae and Freddie Mac and raising the GSE loan limit.
  Our priority as a community must be to get the economy moving, 
provide opportunities to succeed, and to restore the United States as a 
global leader. H.R. 3221 is a comprehensive response and will make a 
real difference for families and communities. And ending the 
foreclosure crisis--ensuring that families have access to safe and 
stable housing--is vital to the recovery of the American economy.
  We need this legislation to get this country back on the right track. 
I urge my colleagues to support this legislation and move our housing 
policy in a new direction.
  Mr. ORTIZ. Mr. Speaker, I rise in support of H.R. 3221, the American 
Housing Rescue and Foreclosure Prevention Act.
  This bill provides a long-awaited helping hand to many of our hard-
working citizens, and I commend Chairman Barney Frank and my House 
colleagues for diligently working with the Senate and the 
administration to craft a bill that helps individuals and neighborhoods 
struggling with foreclosure, in addition to ensuring that Fannie Mae 
and Freddie Mac remain on solid footing.
  Owning one's own home is the epitome of the American Dream. 
Unfortunately, too many people have found themselves struggling after 
becoming trapped in complicated, poorly-explained mortgages with 
exploding interest rates. Already, I have received a call from a 
homeowner hoping this bill will help him refinance into a mortgage that 
won't eat up the bulk of his income. With gas prices rising, food 
prices rising, and wages stagnant, most homeowners just don't have the 
money to cover a mortgage payment that jumps by 30 or 50 percent.
  According to the Center for Responsible Lending, one in 35 Texas 
homeowners could face foreclosure in the next 2 years--almost 1,400 of 
them in my district. While this bill won't help all those homeowners, 
it will help many. By providing an avenue for people to remain in their 
homes, paying an affordable mortgage, we help not only those 
individuals, but the neighborhoods that would otherwise be left to deal 
with abandoned and vacant homes.
  As too many neighborhoods and cities are discovering, this housing 
crisis affects more people than just those who lose their homes. It 
affects their neighbors, whose property values are in decline as their 
neighborhoods

[[Page 16057]]

empty out. It affects cities that must provide services yet are losing 
property tax revenues. Cities and towns are on the frontlines of this 
crisis, and this bill gives them an important tool to help 
neighborhoods recover, by allowing them to purchase and rehabilitate 
foreclosed homes and resell them at cost. I applaud all my colleagues 
in the House for passing this important legislation.
  Mr. BACA. Mr. Speaker, the foreclosure crisis is hurting communities 
all across the Nation and my district has been especially impacted: In 
San Bernardino County, 11,817 notices of default were recorded in the 
first quarter, 130 percent more than a year earlier.
  Everyone pays when there are foreclosures. Crime increases, home 
values decline, schools are affected, and cities run deficits which 
impacts revenues for local police, fire, and social services.
  Last Wednesday, I came to the floor in support of a legislative 
package that would stimulate our Nation's struggling economy and help 
prevent foreclosures. The House passed the American Housing Rescue and 
Foreclosure Prevention Act of 2008 with bipartisan support on that same 
day and the Senate approved it last Saturday, sending the bill straight 
to the President for his signature.
  I am particularly pleased that the final package included an 
important housing counseling provision which I offered with support 
from Reps. Mahoney from Florida and McCarthy from New York. This 
provision directs the Neighborhood Reinvestment Corporation to give 
greater consideration to counseling agencies that have a demonstrated 
track record in working with servicers and that provide in-person 
contact and in-person [face-to-face] housing counseling to borrowers in 
trouble when awarding their grants. It evolved out of the growing 
concern that despite all of the media attention given to the 
foreclosure crisis, as well as the creation of the HOPE Now Alliance, 
many homeowners were still not receiving assistance they needed to 
avoid entering foreclosure. According to a Freddie Mac study, 56 
percent of homeowners don't even know free counseling exists. Also, 
counselors across the country have reported delays and challenges 
connecting with telephone counseling. Counselors that receive referrals 
from hotlines often have to start fresh with the client, and language 
minorities report having difficulty reaching a live counselor.
  Whenever possible, in-person foreclosure counseling is preferable 
over telephone counseling alone. In fact, one-on-one counseling is 
shown preference in the HUD Housing Counseling Program--one that has 
demonstrated enormous success.
  Of course, the intention of this provision is not to exclude any 
struggling family. If telephone counseling is the only means of support 
available, the family should absolutely have access to it. The 
intention is to promote first the most effective and efficient services 
to families, then ensure a back up is in place. Telephone counseling 
should augment and supplement in-person counseling when it is 
unavailable or work is overflowing. Not the other way around.
  The intent of the effort which I have described is to make housing 
counseling dollars as effective as possible and to reach as many 
borrowers in trouble as possible. Providing in-person outreach to 
homeowners in trouble and in-person housing counseling is more 
effective than just sending a default notification in the mail. Having 
someone individually reach out to these borrowers to work through their 
options to avoid foreclosure by analyzing their specific situation, 
including their loan document, is a necessary line of prevention and 
defense.
  My amendment simply directs some of the counseling funding in the 
American Housing Rescue and Foreclosure Prevention Act (H.R. 3221) to 
organizations that already promote this proven method.
  It is our hope that the lenders, servicers, and federally regulated 
and federally chartered institutions like the GSEs and HUD would also 
do everything possible to include in-person outreach and in-person 
counseling in their efforts, including working with organizations that 
have the demonstrated capacity to reach out to homeowners needing 
assistance. Increasing this type of outreach and assistance is 
especially critical in non-judicial foreclosure states where notice of 
default and foreclosure is limited.
  We also hope the language in this bill will help level the playing 
field to ensure organizations with established servicer partnerships 
and the demonstrated experience and capacity to offer more in-depth 
service through in-person counseling and outreach can receive grant 
funding so that they have the resources they need to assist those hard-
to-reach borrowers.
  This is good public policy and good business because it will increase 
loan modifications and decrease foreclosures and thereby minimize the 
adverse impact on local communities. It will also strengthen 
relationships between counseling agencies, servicers, and lenders to 
enhance outreach out to borrowers who are behind in their payments. 
More importantly, it will help keep struggling families in their homes.
  Mr. Speaker, I am also pleased that the American Housing Rescue and 
Foreclosure Prevention Act contains another provision I authored in my 
bill, H.R. 4019, the Mortgage Disclosure Improvement Act and I want to 
thank Senator Reed (RI) the author of the companion bill, for his 
leadership in shepherding this provision in the Senate. This provision 
will ensure that consumers are provided with timely and meaningful 
disclosures in connection with not just home purchases but also for 
loans that refinance a home or provide a home equity line of credit. It 
requires that mortgage disclosures be provided within 3 days of 
application and no later than 7 days before closing. This should allow 
borrowers to shop for another mortgage if they are not satisfied with 
the terms. If the terms of the loan change, the consumer must be 
notified 3 days before closing of the changed terms.
  If consumers apply for adjustable rate or variable rate payment 
loans, there will now be an explicit warning on the 1-page Truth in 
Lending Act form that the payments will change depending on the 
interest rate and an estimate of how those payments will change under 
the terms of the contract based on the current interest rate. The bill 
also provides a new disclosure that informs borrowers of the maximum 
monthly payments possible under their loan.
  The bill provides the right to waive the early disclosure 
requirements if the consumer has a bona fide financial emergency that 
requires they close the loan quickly and increases the range of 
statutory damages for TILA violations from the current $200 to $2,000 
to a range of $400 to $4,000.
  Finally, it requires lenders to include a statement that the consumer 
is not obligated to purchase the mortgage loan just because they 
received the disclosures. This will give consumers the opportunity to 
truly shop around for the best mortgage terms for the first time ever. 
They will be able to compare the payments and costs associated with a 
certain loan product and decide not to sign on the dotted line if they 
do not like the basic terms of the loan.
  This will help prevent foreclosures in the future especially given 
the fact that many consumers facing foreclosure on their homes who have 
adjustable rate mortgages never understood how their loan products 
worked or how high their payments would be once their loans reset.
  Mrs. McCARTHY of New York. Mr. Speaker, I would like to thank 
Chairman Frank for his hard work on this housing package.
  What began with a housing bubble, predatory and subprime lending, and 
loose regulatory enforcement has resulted in a record number of 
foreclosures across the country, the failure of financial institutions, 
a reduction in tax revenue for states and local government, a credit 
crunch, and a lack of confidence in our market that is affecting 
millions of individuals and families both directly and indirectly.
  Families reliant on the continuously increasing housing market 
entered into loans they could never afford or adjustable-rate mortgages 
with the assumption they could refinance at a later date.
  Loose regulatory enforcement allowed mortgage lenders and originators 
to engage in predatory lending practices and the housing bubble 
provided an incentive for lenders to reduce underwriting standards to 
encourage the creation of new loans.
  Furthermore, the failure on the part of the regulators allowed 
financial institutions to package and sell these risky new loans on the 
secondary market with the highest ratings from the rating agencies.
  All these events contributed to what we are now facing: increased 
foreclosure rates, large write-downs by financial institutions that 
hold a large number of mortgage-backed securities, vacant, foreclosed 
homes across the country, reduced tax revenue for states and local 
governments, and a lack of confidence in our financial and housing 
markets.
  This bill, H.R. 3221, the American Housing Rescue and Foreclosure 
Prevention Act, will address the causes of our current crisis through 
reform and attempt to assist communities dealing with the current 
crisis.
  Although there are many provisions in this package that are worth 
noting, I would like to highlight several provisions that are 
absolutely necessary to ensure the success of this package.
  This bill increases the high-cost loan limits for the Federal Housing 
Administration, FHA, and conforming loan limits for Fannie Mae and 
Freddie Mac. These increases will allow those

[[Page 16058]]

in high-cost areas such as my district, the Fourth Congressional 
District of New York, to take advantage of the FHA home loans program. 
Although many of us would prefer a larger increase in these limits, I 
believe the limits in this bill reflect a compromise that will make 
eligible middle-income families in high-cost areas who are currently 
precluded from taking advantage of the FHA home loan program. I thank 
Chairman Frank and would like to recognize him for working with those 
of us who represent high-cost areas to ensure that our constituents are 
not left out.
  This bill also allows Fannie Mae and Freddie Mac the flexibility to 
hold or sell jumbo loans on the secondary market. This flexibility will 
ensure Fannie and Freddie are not unnecessarily restricted in how they 
choose to deal with jumbo loans, and will ensure that loans will 
continue to be available to moderate-income families in high-cost 
areas.
  Although reform is necessary to prevent another subprime crisis, we 
must also act to limit the effect that this crisis is having on our 
communities. Over half of the people who lose their homes stop 
communicating with their lenders within 30-60 days of missing a 
payment. This may happen for a number of reasons, including the fact 
that many homeowners are embarrassed or do not know their rights when 
they are unable to make their mortgage payments.
  For these reasons, it is so important that organizations willing to 
reach out to borrowers at risk of foreclosure utilize in-person 
counseling and outreach. This is the only way to guarantee that 
families who need assistance are aware that assistance is available. 
Consequently, it only makes sense to provide organizations engaging in 
practices, such as in-person counseling, that are proven to be 
effective the resources they need to continue to provide these 
services.
  I thank Mr. Baca and Mr. Mahoney for working with me to ensure that 
language to this effect is included in this bill.
  I also strongly support the almost $4 billion in this bill for state 
and local governments for the purchase and re-development of vacant, 
foreclosed homes.
  It has been estimated that a home decreases in value by almost one 
percent if a home within one city block has been foreclosed. This 
figure is even higher when more than one home in the area has been 
foreclosed. In my home district, a home price would result in more than 
a $4,000 decrease in value if one home is foreclosed.
  Additionally, tax revenue is severely affected when homes are left 
vacant or there is a decrease in their assessed value. The vacancy or 
home value decrease results in a decrease in tax revenue which burdens 
the budgets of state and local governments. In many cases, this 
shortfall then results in cuts in services to those most in need, 
including our children and seniors.
  Again, I would like to thank the Chairman of the Financial Services 
Committee and the many individuals who have worked to ensure that this 
bill reforms FHA and the GSEs, and tackles the increase in the rate of 
foreclosures and the devastating effects that vacant, foreclosed homes 
have on our communities.
  Ms. ROYBAL-ALLARD. Mr. Speaker, I rise in support of H.R. 3221, the 
American Housing Rescue and Foreclosure Prevention Act of 2008. I thank 
Chairman Frank and Chairwoman Waters for bringing this important 
legislation to the House floor today.
  I am certain that all of my colleagues have heard from constituents 
about the devastating effect the foreclosure crisis has had on their 
families and communities. The problem is particularly acute in my home 
state of California, which has the second-highest foreclosure rate in 
the Nation. Recent data has shown that the problem is getting worse. In 
the last three months, foreclosures in California have jumped 33.5 
percent from the previous period.
  To help my constituents confront this crisis, I recently held a 
foreclosure prevention workshop in my district. The turnout was 
enormous--nearly 500 members of our community attended the workshop, 
where national banks, HUD, and other intermediaries provided one-on-one 
housing counseling, and information on viable options for preventing 
foreclosure.
  We know that the overwhelming turnout at the event was not an 
anomaly--I have heard from many of my colleagues that they too have 
experienced record turnouts at events they have hosted to help their 
own constituents.
  At the workshop I heard from numerous participants who were concerned 
that Congress was not doing enough to address the crisis.
  I am gratified that today we can go back to our constituents and 
assure them that Congress has taken action to help address this crisis 
by passing the American Housing Rescue and Foreclosure Prevention Act. 
H.R. 3221 represents a solid step forward in our efforts to confront 
the mortgage crisis.
  The measure will expand the FHA program so that many homeowners at 
risk of facing foreclosure can refinance into viable mortgages that are 
government-insured. This will help many families facing ballooning 
mortgage payments to get their finances back on track and keep their 
homes.
  I am particularly pleased that this legislation will increase the 
conforming loan limit for Fannie Mae and Freddie Mac backed loans to 
$625,000 in high-cost areas such as California. The current limit is 
far too low to make a meaningful impact in the Los Angeles area, where 
the average cost of a home is far above the national average.
  The $4 billion in Community Development Block Grant funds made 
available to states and localities to purchase foreclosed properties is 
also a critical component of the package. Vacant, foreclosed properties 
exacerbate the crisis by lowering the values of surrounding homes and 
neighborhoods.
  I urge my colleagues to vote in support of this legislation to help 
families keep their homes and protect their communities.
  Ms. WATERS. Mr. Speaker. I rise in strong support of this 
legislation. Simply put, this package is urgently needed to help our 
nation address the current foreclosure crisis and its impacts on the 
world financial markets.
  I will limit my remarks to two parts of the current package that I 
was most active on: modernization of the Federal Housing Administration 
(FHA) and $4 billion in CDBG funding for states and localities to 
purchase, rehabilitate, and resell or rent out abandoned and foreclosed 
homes.
  The modernization of the FHA has long been a priority of mine because 
in recent years FHA had become obsolete in many parts of the country, 
due to its low loan limits ($362,790), outdated rules, and slow 
bureaucracy. I saw too many low-income homebuyers in California with 
little choice but to turn to the subprime mortgage market for 
assistance.
  This Congress, I introduced H.R. 1852, ``the Expanding American 
Homeownership Act of 2007'' to give FHA the tools and resources to 
allow it to assist more low-income homebuyers. H.R. 1852 passed the 
House on September 18, 2007 on a bipartisan vote of 348-72, and again 
on May 8th of this year as part of H.R. 3221, the first go-round on 
this housing rescue package.
  Including FHA modernization in the amendment before the House today 
is essential because FHA is the only national agency with the capacity 
and expertise to assist the nation's homeowners on a large scale.
  Another part of the package that deserves support is funding for 
states, counties, and cities to stabilize neighborhoods devastated by 
foreclosures. According to Realty Trac, banks repossessed over 71,000 
properties in June, an astounding 171 percent more than one year ago. 
This means that 770,000 properties nationwide are now in ``real estate 
owned'' or REO status, an increase of 330,000 since the end of 2007.
  These abandoned and foreclosed properties drag down the value of 
homes still occupied by working families, and contribute to a cascade 
effect whereby plummeting home prices erode the tax base that state and 
local governments have to work with, while straining their police, 
fire, code enforcement, and other resources.
  States and most local governments must balance their budgets each 
year, and as a result, at least 20 states have already made budget cuts 
due largely to revenue losses resulting from the subprime crisis. Even 
so, many hard-pressed states and cities are dedicating their own 
limited resources to purchasing foreclosed properties to stabilize 
neighborhoods.
  But they are overwhelmed by the scale of the problem. For this 
reason, the National Governors Association, the Conference of Mayors, 
the National Association of Counties, and nearly every other local 
government trade association support Federal neighborhood stabilization 
assistance.
  This is why I introduced H.R. 5818, ``the Neighborhood Stabilization 
Act of 2008,'' which passed the House on May 8th of this year. Although 
the amendment before us provides less funding than H.R. 5818--$4 
billion as compared to $15 billion and distributes funds differently, I 
believe that the Senate's language, which we are considering today, is 
basically a sound approach. With time being of the essence, finalizing 
this bill is more important than playing more ping-pong with the 
Senate.
  I am compelled to respond to criticisms raised by the Administration 
about the CDBG funding in H.R. 3221: (1) that it is a bailout for 
lenders and investors, and (2) that it incentivizes foreclosures over 
loan workouts for distressed borrowers. This is simply not so.
  First, the many local officials and community-based nonprofits my 
Subcommittee has

[[Page 16059]]

heard from are in no mood to give sweetheart deals to the financial 
institutions who own these properties--many of whom they are actually 
suing over their subprime and predatory lending practices during the 
boom years.
  Second, the facts of the current housing market just don't bear out 
the Administration's claims. Lenders spend $50,000 to $60,000 up front 
in a foreclosure, or on average, 25 percent or more of the value of the 
loan. It is unlikely that a lender would refuse to work out a loan with 
a borrower--thereby saving a substantial amount in foreclosure related 
costs--and instead rush to foreclosure on the chance that a community-
based buyer might be willing to purchase the property at 30 to 50 cents 
on the dollar, which is what foreclosed properties are going for upon 
resale these days.
  In closing, I would like to thank Chairman Frank and Speaker Pelosi 
for ensuring that 15 percent of housing counseling funds authorized by 
H.R. 3221 are directed to organizations--like the National Urban 
League--that target counseling services to low-income and minority 
homeowners and neighborhoods.
  African-American and minority neighborhoods were disproportionately 
targeted for subprime loans. It is only appropriate that some of 
portion of the housing counseling funds are targeted to these 
communities, lest minority communities and homeowners once again fall 
through the cracks.
  I urge my colleagues to vote for this legislation.
  Mr. BLUMENAUER. Mr. Speaker, I strongly supported H.R., 3221, the 
American Housing Rescue and Foreclosure Prevention Act of 2008. Buried 
in the provisions of this bill, however, in section 3082, on page 680, 
is an expansion of the Gulf Opportunity Zone to two additional counties 
in Alabama. One of these counties is nearly 300 miles from the coast. 
This section doesn't have much to do with housing.
  This expansion is designed to provide a subsidy for National Steel 
Car, a Canadian rail car manufacturer. This subsidy is unnecessary for 
two reasons. First, the plant is already under construction and will be 
operational by this time next year. Second, Alabama was under a 
contractual obligation to provide the subsidy itself if Congress did 
not.
  The United States has a domestic rail car industry, with plants and 
facilities around the country. In fact, one borders my district, and it 
recently laid off over 100 employees because of the economic pressures 
on the industry. That company also has a facility in Alabama, but it 
won't benefit from this tax provision.
  In Congress, we often talk about not picking winners, of letting the 
market make these decisions rather than the Congress, of leveling 
playing fields rather than tilting them. But here we picked a winner. 
We held a secret bidding process and a Canadian company won, despite 
the fact that they would have made this investment anyway. The longer 
we pursue this method of doling out tax breaks, the harder real reform 
will be.
  The legislation I introduce today will ensure that these Alabama 
counties are able to benefit from the expanded GO Zone. The legislation 
also ensures, however, that taxes paid by the domestic rail car 
industry do not go to subsidizing their competitors and that we remove 
this rifleshot from the tax code.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 1363, the previous question is ordered.
  The question is on the motion by the gentleman from Massachusetts.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. BACHUS. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  Pursuant to clause 8 of rule XX, this 15-minute vote on the motion to 
concur in the Senate amendment with an amendment will be followed by a 
5-minute vote on the motion to suspend the rules and pass H.R. 6545.
  The vote was taken by electronic device, and there were--yeas 272, 
nays 152, not voting 11, as follows:

                             [Roll No. 519]

                               YEAS--272

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Biggert
     Bishop (NY)
     Blumenauer
     Bono Mack
     Boren
     Boucher
     Boustany
     Boyd (FL)
     Brady (PA)
     Braley (IA)
     Brown (SC)
     Brown, Corrine
     Buchanan
     Butterfield
     Calvert
     Campbell (CA)
     Capito
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson
     Castle
     Castor
     Cazayoux
     Chandler
     Childers
     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
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Donnelly
     Doyle
     Dreier
     Edwards (MD)
     Edwards (TX)
     Ellison
     Ellsworth
     Emanuel
     Engel
     English (PA)
     Eshoo
     Etheridge
     Farr
     Fattah
     Ferguson
     Filner
     Foster
     Frank (MA)
     Gallegly
     Giffords
     Gilchrest
     Gillibrand
     Gonzalez
     Gordon
     Green, Al
     Grijalva
     Gutierrez
     Hall (NY)
     Harman
     Hastings (FL)
     Hayes
     Heller
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hobson
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Hunter
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson, E. B.
     Jones (OH)
     Kagen
     Kanjorski
     Keller
     Kennedy
     Kildee
     Kilpatrick
     Kind
     King (NY)
     Klein (FL)
     Knollenberg
     Kucinich
     LaHood
     Lampson
     Langevin
     Larsen (WA)
     Larson (CT)
     LaTourette
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lungren, Daniel E.
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McCrery
     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
     Murphy, Tim
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Perlmutter
     Peterson (MN)
     Pickering
     Pomeroy
     Porter
     Price (NC)
     Pryce (OH)
     Putnam
     Rahall
     Rangel
     Reyes
     Reynolds
     Richardson
     Rodriguez
     Rogers (AL)
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shays
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Solis
     Space
     Speier
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tiberi
     Tierney
     Towns
     Tsongas
     Turner
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walsh (NY)
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Weller
     Wexler
     Wilson (OH)
     Woolsey
     Wu
     Yarmuth

                               NAYS--152

     Aderholt
     Akin
     Alexander
     Bachmann
     Bachus
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bilbray
     Bilirakis
     Blackburn
     Blunt
     Boehner
     Bonner
     Boozman
     Boyda (KS)
     Brady (TX)
     Broun (GA)
     Burgess
     Burton (IN)
     Buyer
     Camp (MI)
     Cannon
     Cantor
     Carter
     Chabot
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Cubin
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     DeFazio
     Dent
     Doolittle
     Drake
     Duncan
     Ehlers
     Emerson
     Everett
     Fallin
     Feeney
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Garrett (NJ)
     Gerlach
     Gingrey
     Goode
     Goodlatte
     Granger
     Graves
     Hall (TX)
     Hastings (WA)
     Hensarling
     Herger
     Hoekstra
     Inglis (SC)
     Issa
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Jordan
     Kaptur
     King (IA)
     Kingston
     Kirk
     Kline (MN)
     Kuhl (NY)
     Lamborn
     Latham
     Latta
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McHenry
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller (MI)
     Moran (KS)
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Paul
     Pearce
     Pence
     Petri
     Pitts
     Platts
     Poe
     Price (GA)
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Roskam
     Royce
     Ryan (WI)
     Sali
     Saxton
     Scalise
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Tancredo
     Terry
     Thornberry
     Tiahrt
     Upton
     Walberg
     Walden (OR)
     Wamp
     Weldon (FL)
     Westmoreland
     Whitfield (KY)
     Wilson (NM)
     Wilson (SC)
     Wittman (VA)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--11

     Bishop (GA)
     Bishop (UT)
     Boswell
     Brown-Waite, Ginny
     Gohmert
     Green, Gene
     Hare
     Hulshof
     Ortiz
     Peterson (PA)
     Rush

[[Page 16060]]



                              {time}  1701

  Mrs. BOYDA of Kansas changed her vote from ``yea'' to ``nay.''
  So the motion was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore. Pursuant to section 2 of House Resolution 
1363, the House has receded from any remaining amendments or 
disagreements on H.R. 3221.

                          ____________________