[Congressional Record (Bound Edition), Volume 154 (2008), Part 6]
[House]
[Pages 8155-8269]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   FORECLOSURE PREVENTION ACT OF 2008

  Mr. FRANK of Massachusetts. Mr. Speaker, pursuant to House Resolution 
1175, I call up the bill (H.R. 3221) moving the United States toward 
greater energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, with the Senate amendments 
thereto, and ask for its immediate consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. The Clerk will designate the Senate 
amendments.
  The text of the Senate amendments is as follows:

       Senate amendments:
       Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Foreclosure Prevention Act of 2008''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                 TITLE I--FHA MODERNIZATION ACT OF 2008

Sec. 101. Short title.

              Subtitle A--Building American Homeownership

Sec. 111. Short title.
Sec. 112. Maximum principal loan obligation.
Sec. 113. Cash investment requirement and prohibition of seller-funded 
              downpayment assistance.
Sec. 114. Mortgage insurance premiums.
Sec. 115. Rehabilitation loans.
Sec. 116. Discretionary action.
Sec. 117. Insurance of condominiums.
Sec. 118. Mutual Mortgage Insurance Fund.
Sec. 119. Hawaiian home lands and Indian reservations.
Sec. 120. Conforming and technical amendments.
Sec. 121. Insurance of mortgages.
Sec. 122. Home equity conversion mortgages.
Sec. 123. Energy efficient mortgages program.
Sec. 124. Pilot program for automated process for borrowers without 
              sufficient credit history.
Sec. 125. Homeownership preservation.
Sec. 126. Use of FHA savings for improvements in FHA technologies, 
              procedures, processes, program performance, staffing, and 
              salaries.
Sec. 127. Post-purchase housing counseling eligibility improvements.
Sec. 128. Pre-purchase homeownership counseling demonstration.
Sec. 129. Fraud prevention.
Sec. 130. Limitation on mortgage insurance premium increases.
Sec. 131. Savings provision.
Sec. 132. Implementation.
Sec. 133. Moratorium on implementation of risk-based premiums.

          Subtitle B--Manufactured Housing Loan Modernization

Sec. 141. Short title.
Sec. 142. Purposes.
Sec. 143. Exception to limitation on financial institution portfolio.
Sec. 144. Insurance benefits.
Sec. 145. Maximum loan limits.
Sec. 146. Insurance premiums.
Sec. 147. Technical corrections.
Sec. 148. Revision of underwriting criteria.
Sec. 149. Prohibition against kickbacks and unearned fees.
Sec. 150. Leasehold requirements.

     TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

Sec. 201. Temporary increase in maximum loan guaranty amount for 
              certain housing loans guaranteed by the Secretary of 
              Veterans Affairs.
Sec. 202. Counseling on mortgage foreclosures for members of the Armed 
              Forces returning from service abroad.
Sec. 203. Enhancement of protections for servicemembers relating to 
              mortgages and mortgage foreclosures.

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

Sec. 301. Emergency assistance for the redevelopment of abandoned and 
              foreclosed homes.
Sec. 302. Nationwide distribution of resources.
Sec. 303. Limitation on use of funds with respect to eminent domain.
Sec. 304. Limitation on distribution of funds.
Sec. 305. Counseling intermediaries.

                 TITLE IV--HOUSING COUNSELING RESOURCES

Sec. 401. Housing counseling resources.
Sec. 402. Credit counseling.

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

Sec. 501. Short title.
Sec. 502. Enhanced mortgage loan disclosures.
Sec. 503. Community Development Investment Authority for depository 
              institutions.
Sec. 504. Federal Home loan bank refinancing authority for certain 
              residential mortgage loans.

                    TITLE VI--TAX-RELATED PROVISIONS

Sec. 601. Election for 4-year carryback of certain net operating losses 
              and temporary suspension of 90 percent AMT limit.
Sec. 602. Modifications on use of qualified mortgage bonds; temporary 
              increased volume cap for certain housing bonds.
Sec. 603. Credit for certain home purchases.
Sec. 604. Additional standard deduction for real property taxes for 
              nonitemizers.
Sec. 605. Election to accelerate AMT and R and D credits in lieu of 
              bonus depreciation.
Sec. 606. Use of amended income tax returns to take into account 
              receipt of certain hurricane-related casualty loss grants 
              by disallowing previously taken casualty loss deductions.
Sec. 607. Waiver of deadline on construction of GO Zone property 
              eligible for bonus depreciation.
Sec. 608. Temporary tax relief for Kiowa County, Kansas and surrounding 
              area.

                    TITLE VII--EMERGENCY DESIGNATION

Sec. 701. Emergency designation.

      TITLE VIII--REIT INVESTMENT DIVERSIFICATION AND EMPOWERMENT

Sec. 801. Short title; amendment of 1986 Code.

                 Subtitle A--Taxable REIT Subsidiaries

Sec. 811. Conforming taxable REIT subsidiary asset test.

                        Subtitle B--Dealer Sales

Sec. 821. Holding period under safe harbor.
Sec. 822. Determining value of sales under safe harbor.

[[Page 8156]]

                     Subtitle C--Health Care REITs

Sec. 831. Conformity for health care facilities.

                 Subtitle D--Effective Dates and Sunset

Sec. 841. Effective dates and sunset.

                   TITLE IX--VETERANS HOUSING MATTERS

Sec. 901. Home improvements and structural alterations for totally 
              disabled members of the Armed Forces before discharge or 
              release from the Armed Forces.
Sec. 902. Eligibility for specially adapted housing benefits and 
              assistance for members of the Armed Forces with service-
              connected disabilities and individuals residing outside 
              the United States.
Sec. 903. Specially adapted housing assistance for individuals with 
              severe burn injuries.
Sec. 904. Extension of assistance for individuals residing temporarily 
              in housing owned by a family member.
Sec. 905. Increase in specially adapted housing benefits for disabled 
              veterans.
Sec. 906. Report on specially adapted housing for disabled individuals.
Sec. 907. Report on specially adapted housing assistance for 
              individuals who reside in housing owned by a family 
              member on permanent basis.
Sec. 908. Definition of annual income for purposes of section 8 and 
              other public housing programs.
Sec. 909. Payment of transportation of baggage and household effects 
              for members of the Armed Forces who relocate due to 
              foreclosure of leased housing.

                   TITLE X--CLEAN ENERGY TAX STIMULUS

Sec. 1001. Short title; etc.

      Subtitle A--Extension of Clean Energy Production Incentives

Sec. 1011. Extension and modification of renewable energy production 
              tax credit.
Sec. 1012. Extension and modification of solar energy and fuel cell 
              investment tax credit.
Sec. 1013. Extension and modification of residential energy efficient 
              property credit.
Sec. 1014. Extension and modification of credit for clean renewable 
              energy bonds.
Sec. 1015. Extension of special rule to implement FERC restructuring 
              policy.

    Subtitle B--Extension of Incentives to Improve Energy Efficiency

Sec. 1021. Extension and modification of credit for energy efficiency 
              improvements to existing homes.
Sec. 1022. Extension and modification of tax credit for energy 
              efficient new homes.
Sec. 1023. Extension and modification of energy efficient commercial 
              buildings deduction.
Sec. 1024. Modification and extension of energy efficient appliance 
              credit for appliances produced after 2007.

                     TITLE XI--SENSE OF THE SENATE

Sec. 1101. Sense of the Senate.

                 TITLE I--FHA MODERNIZATION ACT OF 2008

     SEC. 101. SHORT TITLE.

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

              Subtitle A--Building American Homeownership

     SEC. 111. SHORT TITLE.

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

     SEC. 112. MAXIMUM PRINCIPAL LOAN OBLIGATION.

       (a) In General.--Paragraph (2) of section 203(b)(2) of the 
     National Housing Act (12 U.S.C. 1709(b)(2)) is amended--
       (1) by amending subparagraphs (A) and (B) to read as 
     follows:
       ``(A) not to exceed the lesser of--
       ``(i) in the case of a 1-family residence, 110 percent of 
     the median 1-family house price in the area, as determined by 
     the Secretary; and in the case of a 2-, 3-, or 4-family 
     residence, the percentage of such median price that bears the 
     same ratio to such median price as the dollar amount 
     limitation in effect for 2007 under section 305(a)(2) of the 
     Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1454(a)(2)) for a 2-, 3-, or 4-family residence, 
     respectively, bears to the dollar amount limitation in effect 
     for 2007 under such section for a 1-family residence; or
       ``(ii) 132 percent of the dollar amount limitation in 
     effect for 2007 under such section 305(a)(2) for a residence 
     of the applicable size (without regard to any authority to 
     increase such limitations with respect to properties located 
     in Alaska, Guam, Hawaii, or the Virgin Islands), except that 
     each such maximum dollar amount shall be adjusted effective 
     January 1 of each year beginning with 2009, by adding to or 
     subtracting from each such amount (as it may have been 
     previously adjusted) a percentage thereof equal to the 
     percentage increase or decrease, during the most recently 
     completed 12-month or 4-quarter period ending before the time 
     of determining such annual adjustment, in an housing price 
     index developed or selected by the Secretary for purposes of 
     adjustments under this clause;

     except that the dollar amount limitation in effect under this 
     subparagraph for any size residence for any area may not be 
     less than the greater of: (I) the dollar amount limitation in 
     effect under this section for the area on October 21, 1998; 
     or (II) 65 percent of the dollar amount limitation in effect 
     for 2007 under such section 305(a)(2) for a residence of the 
     applicable size, as such limitation is adjusted by any 
     subsequent percentage adjustments determined under clause 
     (ii) of this subparagraph; and
       ``(B) not to exceed 100 percent of the appraised value of 
     the property.''; and
       (2) in the matter following subparagraph (B), by striking 
     the second sentence (relating to a definition of ``average 
     closing cost'') and all that follows through ``section 
     3103A(d) of title 38, United States Code.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect upon the expiration of the date described 
     in section 202(a) of the Economic Stimulus Act of 2008 
     (Public Law 110-185).

     SEC. 113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF 
                   SELLER-FUNDED DOWNPAYMENT ASSISTANCE.

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

     SEC. 114. MORTGAGE INSURANCE PREMIUMS.

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

     SEC. 115. REHABILITATION LOANS.

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

     SEC. 116. DISCRETIONARY ACTION.

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

     SEC. 117. INSURANCE OF CONDOMINIUMS.

       (a) In General.--Section 234 of the National Housing Act 
     (12 U.S.C. 1715y) is amended--
       (1) in subsection (c), in the first sentence--
       (A) by striking ``and'' before ``(2)''; and
       (B) by inserting before the period at the end the 
     following: ``, and (3) the project has a blanket mortgage 
     insured by the Secretary under subsection (d)''; and
       (2) in subsection (g), by striking ``, except that'' and 
     all that follows and inserting a period.
       (b) Definition of Mortgage.--Section 201(a) of the National 
     Housing Act (12 U.S.C. 1707(a)) is amended--
       (1) before ``a first mortgage'' insert ``(A)'';
       (2) by striking ``or on a leasehold (1)'' and inserting 
     ``(B) a first mortgage on a leasehold on real estate (i)'';
       (3) by striking ``or (2)'' and inserting ``, or (ii)''; and
       (4) by inserting before the semicolon the following: ``, or 
     (C) a first mortgage given to secure the unpaid purchase 
     price of a fee interest in, or long-term leasehold interest 
     in, real estate consisting of a one-family unit in a 
     multifamily project, including a project in which the 
     dwelling units are attached, or are manufactured

[[Page 8157]]

     housing units, semi-detached, or detached, and an undivided 
     interest in the common areas and facilities which serve the 
     project''.
       (c) Definition of Real Estate.--Section 201 of the National 
     Housing Act (12 U.S.C. 1707) is amended by adding at the end 
     the following new subsection:
       ``(g) The term `real estate' means land and all natural 
     resources and structures permanently affixed to the land, 
     including residential buildings and stationary manufactured 
     housing. The Secretary may not require, for treatment of any 
     land or other property as real estate for purposes of this 
     title, that such land or property be treated as real estate 
     for purposes of State taxation.''.

     SEC. 118. MUTUAL MORTGAGE INSURANCE FUND.

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

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

     SEC. 119. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.

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

     SEC. 120. CONFORMING AND TECHNICAL AMENDMENTS.

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

     SEC. 121. INSURANCE OF MORTGAGES.

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

     SEC. 122. HOME EQUITY CONVERSION MORTGAGES.

       (a) In General.--Section 255 of the National Housing Act 
     (12 U.S.C. 1715z-20) is amended--
       (1) in subsection (b)(2), insert `` `real estate,' '' after 
     `` `mortgagor','';
       (2) by amending subsection (d)(1) to read as follows:
       ``(1) have been originated by a mortgagee approved by the 
     Secretary;'';
       (3) by amending subsection (d)(2)(B) to read as follows:
       ``(B) has received adequate counseling, as provided in 
     subsection (f), by an independent third party that is not, 
     either directly or indirectly, associated with or compensated 
     by a party involved in--
       ``(i) originating or servicing the mortgage;
       ``(ii) funding the loan underlying the mortgage; or
       ``(iii) the sale of annuities, investments, long-term care 
     insurance, or any other type of financial or insurance 
     product;'';
       (4) in subsection (f)--
       (A) by striking ``(f) Information Services for 
     Mortgagors.--'' and inserting ``(f) Counseling Services and 
     Information for Mortgagors.--''; and
       (B) by amending the matter preceding paragraph (1) to read 
     as follows: ``The Secretary shall provide or cause to be 
     provided adequate counseling for the mortgagor, as described 
     in subsection (d)(2)(B). Such counseling shall be provided by 
     counselors that meet qualification standards and follow 
     uniform counseling protocols. The qualification standards and 
     counseling protocols shall be established by the Secretary 
     within 12 months of the date of enactment of the Reverse 
     Mortgage Proceeds Protection Act. The protocols shall require 
     a qualified counselor to discuss with each mortgagor 
     information which shall include--''
       (5) in subsection (g), by striking ``established under 
     section 203(b)(2)'' and all that follows through ``located'' 
     and inserting ``limitation established under section 
     305(a)(2) of the Federal Home Loan Mortgage Corporation Act 
     for a 1-family residence'';
       (6) in subsection (i)(1)(C), by striking ``limitations'' 
     and inserting ``limitation'';
       (7) by striking subsection (l);
       (8) by redesignating subsection (m) as subsection (l);
       (9) by amending subsection (l), as so redesignated, to read 
     as follows:
       ``(l) Funding for Counseling.--The Secretary may use a 
     portion of the mortgage insurance premiums collected under 
     the program under this section to adequately fund the 
     counseling and disclosure activities required under 
     subsection (f), including counseling for those homeowners who 
     elect not to take out a home equity conversion mortgage, 
     provided that the

[[Page 8158]]

     use of such funds is based upon accepted actuarial 
     principles.''; and
       (10) by adding at the end the following new subsection:
       ``(m) Authority To Insure Home Purchase Mortgage.--
       ``(1) In general.--Notwithstanding any other provision of 
     this section, the Secretary may insure, upon application by a 
     mortgagee, a home equity conversion mortgage upon such terms 
     and conditions as the Secretary may prescribe, when the home 
     equity conversion mortgage will be used to purchase a 1- to 
     4-family dwelling unit, one unit of which the mortgagor will 
     occupy as a primary residence, and to provide for any future 
     payments to the mortgagor, based on available equity, as 
     authorized under subsection (d)(9).
       ``(2) Limitation on principal obligation.--A home equity 
     conversion mortgage insured pursuant to paragraph (1) shall 
     involve a principal obligation that does not exceed the 
     dollar amount limitation determined under section 305(a)(2) 
     of the Federal Home Loan Mortgage Corporation Act for a 1-
     family residence.
       ``(n) Requirements on Mortgage Originators.--
       ``(1) In general.--The mortgagee and any other party that 
     participates in the origination of a mortgage to be insured 
     under this section shall--
       ``(A) not participate in, be associated with, or employ any 
     party that participates in or is associated with any other 
     financial or insurance activity; or
       ``(B) demonstrate to the Secretary that the mortgagee or 
     other party maintains, or will maintain, firewalls and other 
     safeguards designed to ensure that--
       ``(i) individuals participating in the origination of the 
     mortgage shall have no involvement with, or incentive to 
     provide the mortgagor with, any other financial or insurance 
     product; and
       ``(ii) the mortgagor shall not be required, directly or 
     indirectly, as a condition of obtaining a mortgage under this 
     section, to purchase any other financial or insurance 
     product.
       ``(2) Approval of other parties.--All parties that 
     participate in the origination of a mortgage to be insured 
     under this section shall be approved by the Secretary.
       ``(o) Prohibition Against Requirements To Purchase 
     Additional Products.--The mortgagee or any other party shall 
     not be required by the mortgagor or any other party to 
     purchase an insurance, annuity, or other additional product 
     as a requirement or condition of eligibility for a mortgage 
     authorized under subsection (c).
       ``(p) Study To Determine Consumer Protections and 
     Underwriting Standards.--The Secretary shall conduct a study 
     to examine and determine appropriate consumer protections and 
     underwriting standards to ensure that the purchase of 
     products referred to in subsection (o) is appropriate for the 
     consumer. In conducting such study, the Secretary shall 
     consult with consumer advocates (including recognized experts 
     in consumer protection), industry representatives, 
     representatives of counseling organizations, and other 
     interested parties.''.
       (b) Mortgages for Cooperatives.--Subsection (b) of section 
     255 of the National Housing Act (12 U.S.C. 1715z-20(b)) is 
     amended--
       (1) in paragraph (4)--
       (A) by inserting ``a first or subordinate mortgage or 
     lien'' before ``on all stock'';
       (B) by inserting ``unit'' after ``dwelling''; and
       (C) by inserting ``a first mortgage or first lien'' before 
     ``on a leasehold''; and
       (2) in paragraph (5), by inserting ``a first or subordinate 
     lien on'' before ``all stock''.
       (c) Limitation on Origination Fees.--Section 255 of the 
     National Housing Act (12 U.S.C. 1715z-20), as amended by the 
     preceding provisions of this section, is further amended by 
     adding at the end the following new subsection:
       ``(r) Limitation on Origination Fees.--The Secretary shall 
     establish limits on the origination fee that may be charged 
     to a mortgagor under a mortgage insured under this section, 
     which limitations shall--
       ``(1) equal 1.5 percent of the maximum claim amount of the 
     mortgage unless adjusted thereafter on the basis of--
       ``(A) the costs to the mortgagor; and
       ``(B) the impact of such fees on the reverse mortgage 
     market;
       ``(2) be subject to a minimum allowable amount;
       ``(3) provide that the origination fee may be fully 
     financed with the mortgage;
       ``(4) include any fees paid to correspondent mortgagees 
     approved by the Secretary; and
       ``(5) have the same effective date as subsection (m)(2) 
     regarding the limitation on principal obligation.''.
       (d) Study Regarding Program Costs and Credit 
     Availability.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study regarding the costs and 
     availability of credit under the home equity conversion 
     mortgages for elderly homeowners program under section 255 of 
     the National Housing Act (12 U.S.C. 1715z-20) (in this 
     subsection referred to as the ``program'').
       (2) Purpose.--The purpose of the study required under 
     paragraph (1) is to help Congress analyze and determine the 
     effects of limiting the amounts of the costs or fees under 
     the program from the amounts charged under the program as of 
     the date of the enactment of this title.
       (3) Content of report.--The study required under paragraph 
     (1) should focus on--
       (A) the cost to mortgagors of participating in the program;
       (B) the financial soundness of the program;
       (C) the availability of credit under the program; and
       (D) the costs to elderly homeowners participating in the 
     program, including--
       (i) mortgage insurance premiums charged under the program;
       (ii) up-front fees charged under the program; and
       (iii) margin rates charged under the program.
       (4) Timing of report.--Not later than 12 months after the 
     date of the enactment of this title, the Comptroller General 
     shall submit a report to the Committee on Banking, Housing, 
     and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives setting 
     forth the results and conclusions of the study required under 
     paragraph (1).

     SEC. 123. ENERGY EFFICIENT MORTGAGES PROGRAM.

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

     SEC. 124. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS 
                   WITHOUT SUFFICIENT CREDIT HISTORY.

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

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

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

     SEC. 125. HOMEOWNERSHIP PRESERVATION.

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

     SEC. 126. USE OF FHA SAVINGS FOR IMPROVEMENTS IN FHA 
                   TECHNOLOGIES, PROCEDURES, PROCESSES, PROGRAM 
                   PERFORMANCE, STAFFING, AND SALARIES.

       (a) Authorization of Appropriations.--There is authorized 
     to be appropriated for each of fiscal years 2009 through 
     2013, $25,000,000, from negative credit subsidy for the 
     mortgage insurance programs under title II of the National 
     Housing Act, to the Secretary of Housing and Urban 
     Development for increasing funding for the purpose of 
     improving technology, processes, program performance, 
     eliminating fraud, and for providing appropriate staffing in 
     connection with the mortgage insurance programs under title 
     II of the National Housing Act.

[[Page 8159]]

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

     SEC. 127. POST-PURCHASE HOUSING COUNSELING ELIGIBILITY 
                   IMPROVEMENTS.

       Section 106(c)(4) of the Housing and Urban Development Act 
     of 1968 (12 U.S.C. 1701x(c)(4)) is amended:
       (1) in subparagraph (C)--
       (A) in clause (i), by striking ``; or'' and inserting a 
     semicolon;
       (B) in clause (ii), by striking the period at the end and 
     inserting a semicolon; and
       (C) by adding at the end the following:
       ``(iii) a significant reduction in the income of the 
     household due to divorce or death; or
       ``(iv) a significant increase in basic expenses of the 
     homeowner or an immediate family member of the homeowner 
     (including the spouse, child, or parent for whom the 
     homeowner provides substantial care or financial assistance) 
     due to--

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

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

     SEC. 128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING 
                   DEMONSTRATION.

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

     SEC. 129. FRAUD PREVENTION.

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

     SEC. 130. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.

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

     SEC. 131. SAVINGS PROVISION.

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

     SEC. 132. IMPLEMENTATION.

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

     SEC. 133. MORATORIUM ON IMPLEMENTATION OF RISK-BASED 
                   PREMIUMS.

       For the 12-month period beginning on the date of enactment 
     of this title, the Secretary of Housing and Urban Development 
     shall not enact, execute, or take any action to make 
     effective the planned implementation of risk-based premiums, 
     which are designed for mortgage lenders to offer borrowers an 
     FHA-insured product that provides a range of mortgage 
     insurance premium pricing, based on the risk the insurance 
     contract represents, as such planned implementation was set 
     forth in the Notice published in the Federal Register on 
     September 20, 2007 (Vol. 72, No. 182, Page 53872).

          Subtitle B--Manufactured Housing Loan Modernization

     SEC. 141. SHORT TITLE.

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

     SEC. 142. PURPOSES.

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

     SEC. 143. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION 
                   PORTFOLIO.

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

     SEC. 144. INSURANCE BENEFITS.

       (a) In General.--Subsection (b) of section 2 of the 
     National Housing Act (12 U.S.C. 1703(b)), is amended by 
     adding at the end the following new paragraph:
       ``(8) Insurance benefits for manufactured housing loans.--
     Any contract of insurance with respect to loans, advances of 
     credit, or purchases in connection with a manufactured home

[[Page 8160]]

     or a lot on which to place a manufactured home (or both) for 
     a financial institution that is executed under this title 
     after the date of the enactment of the FHA Manufactured 
     Housing Loan Modernization Act of 2008 by the Secretary shall 
     be conclusive evidence of the eligibility of such financial 
     institution for insurance, and the validity of any contract 
     of insurance so executed shall be incontestable in the hands 
     of the bearer from the date of the execution of such 
     contract, except for fraud or misrepresentation on the part 
     of such institution.''.
       (b) Applicability.--The amendment made by subsection (a) 
     shall only apply to loans that are registered or endorsed for 
     insurance after the date of the enactment of this title.

     SEC. 145. MAXIMUM LOAN LIMITS.

       (a) Dollar Amounts.--Paragraph (1) of section 2(b) of the 
     National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
       (1) in clause (ii) of subparagraph (A), by striking 
     ``$17,500'' and inserting ``$25,090'';
       (2) in subparagraph (C) by striking ``$48,600'' and 
     inserting ``$69,678'';
       (3) in subparagraph (D) by striking ``$64,800'' and 
     inserting ``$92,904'';
       (4) in subparagraph (E) by striking ``$16,200'' and 
     inserting ``$23,226''; and
       (5) by realigning subparagraphs (C), (D), and (E) 2 ems to 
     the left so that the left margins of such subparagraphs are 
     aligned with the margins of subparagraphs (A) and (B).
       (b) Annual Indexing.--Subsection (b) of section 2 of the 
     National Housing Act (12 U.S.C. 1703(b)), as amended by the 
     preceding provisions of this title, is further amended by 
     adding at the end the following new paragraph:
       ``(9) Annual indexing of manufactured housing loans.--The 
     Secretary shall develop a method of indexing in order to 
     annually adjust the loan limits established in subparagraphs 
     (A)(ii), (C), (D), and (E) of this subsection. Such index 
     shall be based on the manufactured housing price data 
     collected by the United States Census Bureau. The Secretary 
     shall establish such index no later than 1 year after the 
     date of the enactment of the FHA Manufactured Housing Loan 
     Modernization Act of 2008.''
       (c) Technical and Conforming Changes.--Paragraph (1) of 
     section 2(b) of the National Housing Act (12 U.S.C. 
     1703(b)(1)) is amended--
       (1) by striking ``No'' and inserting ``Except as provided 
     in the last sentence of this paragraph, no''; and
       (2) by adding after and below subparagraph (G) the 
     following:
       ``The Secretary shall, by regulation, annually increase the 
     dollar amount limitations in subparagraphs (A)(ii), (C), (D), 
     and (E) (as such limitations may have been previously 
     adjusted under this sentence) in accordance with the index 
     established pursuant to paragraph (9).''.

     SEC. 146. INSURANCE PREMIUMS.

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

     SEC. 147. TECHNICAL CORRECTIONS.

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

     SEC. 148. REVISION OF UNDERWRITING CRITERIA.

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

     SEC. 149. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.

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

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

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

     SEC. 150. LEASEHOLD REQUIREMENTS.

       Subsection (b) of section 2 of the National Housing Act (12 
     U.S.C. 1703(b)), as amended by the preceding provisions of 
     this title, is further amended by adding at the end the 
     following new paragraph:

[[Page 8161]]

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

     TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS

     SEC. 201. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT 
                   FOR CERTAIN HOUSING LOANS GUARANTEED BY THE 
                   SECRETARY OF VETERANS AFFAIRS.

       Notwithstanding subparagraph (C) of section 3703(a)(1) of 
     title 38, United States Code, for purposes of any loan 
     described in subparagraph (A)(i)(IV) of such section that is 
     originated during the period beginning on the date of the 
     enactment of this Act and ending on December 31, 2008, the 
     term ``maximum guaranty amount'' shall mean an amount equal 
     to 25 percent of the higher of--
       (1) the limitation determined under section 305(a)(2) of 
     the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1454(a)(2)) for the calendar year in which the loan is 
     originated for a single-family residence; or
       (2) 125 percent of the area median price for a single-
     family residence, but in no case to exceed 175 percent of the 
     limitation determined under such section 305(a)(2) for the 
     calendar year in which the loan is originated for a single-
     family residence.

     SEC. 202. COUNSELING ON MORTGAGE FORECLOSURES FOR MEMBERS OF 
                   THE ARMED FORCES RETURNING FROM SERVICE ABROAD.

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

     SEC. 203. ENHANCEMENT OF PROTECTIONS FOR SERVICEMEMBERS 
                   RELATING TO MORTGAGES AND MORTGAGE 
                   FORECLOSURES.

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

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

     SEC. 301. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF 
                   ABANDONED AND FORECLOSED HOMES.

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

       (I) Profits.--Upon the expiration of the 5-year period set 
     forth under clause (i), any revenue generated from the sale, 
     rental, redevelopment, rehabilitation, or any other eligible 
     use

[[Page 8162]]

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

       (B) Other revenues.--Any revenue generated under 
     subparagraphs (A), (C) or (D) of subsection (c)(3) shall be 
     provided to and used by the State or unit of general local 
     government in accordance with, and in furtherance of, the 
     intent and provisions of this section.
       (e) Rules of Construction.--
       (1) In general.--Except as otherwise provided by this 
     section, amounts appropriated, revenues generated, or amounts 
     otherwise made available to States and units of general local 
     government under this section shall be treated as though such 
     funds were community development block grant funds under 
     title I of the Housing and Community Development Act of 1974 
     (42 U.S.C. 5301 et seq.).
       (2) No match.--No matching funds shall be required in order 
     for a State or unit of general local government to receive 
     any amounts under this section.
       (f) Authority to Specify Alternative Requirements.--
       (1) In general.--In administering any amounts appropriated 
     or otherwise made available under this section, the Secretary 
     may specify alternative requirements to any provision under 
     title I of the Housing and Community Development Act of 1974 
     (except for those related to fair housing, nondiscrimination, 
     labor standards, and the environment) in accordance with the 
     terms of this section and for the sole purpose of expediting 
     the use of such funds.
       (2) Notice.--The Secretary shall provide written notice of 
     its intent to exercise the authority to specify alternative 
     requirements under paragraph (1) to the Committee on Banking, 
     Housing and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives not later 
     than 10 business days before such exercise of authority is to 
     occur.
       (3) Low and moderate income requirement.--
       (A) In general.--Notwithstanding the authority of the 
     Secretary under paragraph (1)--
       (i) all of the funds appropriated or otherwise made 
     available under this section shall be used with respect to 
     individuals and families whose income does not exceed 120 
     percent of area median income; and
       (ii) not less than 25 percent of the funds appropriated or 
     otherwise made available under this section shall be used for 
     the purchase and redevelopment of abandoned or foreclosed 
     upon homes or residential properties that will be used to 
     house individuals or families whose incomes do not exceed 50 
     percent of area median income.
       (B) Recurrent requirement.--The Secretary shall, by rule or 
     order, ensure, to the maximum extent practicable and for the 
     longest feasible term, that the sale, rental, or 
     redevelopment of abandoned and foreclosed upon homes and 
     residential properties under this section remain affordable 
     to individuals or families described in subparagraph (A).
       (g) Periodic Audits.--In consultation with the Secretary of 
     Housing and Urban Development, the Comptroller General of the 
     United States shall conduct periodic audits to ensure that 
     funds appropriated, made available, or otherwise distributed 
     under this section are being used in a manner consistent with 
     the criteria provided in this section.

     SEC. 302. NATIONWIDE DISTRIBUTION OF RESOURCES.

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

     SEC. 303. LIMITATION ON USE OF FUNDS WITH RESPECT TO EMINENT 
                   DOMAIN.

       No State or unit of general local government may use any 
     amounts received pursuant to section 301 to fund any project 
     that seeks to use the power of eminent domain, unless eminent 
     domain is employed only for a public use: Provided, That for 
     purposes of this section, public use shall not be construed 
     to include economic development that primarily benefits 
     private entities.

     SEC. 304. LIMITATION ON DISTRIBUTION OF FUNDS.

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

     SEC. 305. COUNSELING INTERMEDIARIES.

       Notwithstanding any other provision of this Act, the amount 
     appropriated under section 301(a) of this Act shall be 
     $3,920,000,000 and the amount appropriated under section 401 
     of this Act shall be $180,000,000: Provided, That of amounts 
     appropriated under such section 401 $30,000,000 shall be used 
     by the Neighborhood Reinvestment Corporation (referred to in 
     this section as the ``NRC'') to make grants to counseling 
     intermediaries approved by the Department of Housing and 
     Urban Development or the NRC to hire attorneys to assist 
     homeowners who have legal issues directly related to the 
     homeowner's foreclosure, delinquency or short sale. Such 
     attorneys shall be capable of assisting homeowners of owner-
     occupied homes with mortgages in default, in danger of 
     default, or subject to or at risk of foreclosure and who have 
     legal issues that cannot be handled by counselors already 
     employed by such intermediaries: Provided, That of the 
     amounts provided for in the prior provisos the NRC shall give 
     priority consideration to counseling intermediaries and legal 
     organizations that (1) provide legal assistance in the 100 
     metropolitan statistical areas (as defined by the Director of 
     the Office of Management and Budget) with the highest home 
     foreclosure rates, and (2) have the capacity to begin using 
     the financial assistance within 90 days after receipt of the 
     assistance: Provided further, That no funds provided under 
     this Act shall be used to provide, obtain, or arrange on 
     behalf of a homeowner, legal representation involving or for 
     the purposes of civil litigation.

                 TITLE IV--HOUSING COUNSELING RESOURCES

     SEC. 401. HOUSING COUNSELING RESOURCES.

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

     SEC. 402. CREDIT COUNSELING.

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

              TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT

     SEC. 501. SHORT TITLE.

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

     SEC. 502. ENHANCED MORTGAGE LOAN DISCLOSURES.

       (a) Truth in Lending Act Disclosures.--Section 128(b)(2) of 
     the Truth in Lending Act (15 U.S.C. 1638(b)(2)) is amended--
       (1) by inserting ``(A)'' before ``In the'';
       (2) by striking ``a residential mortgage transaction, as 
     defined in section 103(w)'' and inserting ``any extension of 
     credit that is secured by the dwelling of a consumer'';
       (3) by striking ``before the credit is extended, or'';
       (4) by inserting ``, which shall be at least 7 business 
     days before consummation of the transaction'' after ``written 
     application'';
       (5) by striking ``, whichever is earlier''; and
       (6) by striking ``If the'' and all that follows through the 
     end of the paragraph and inserting the following:
       ``(B) In the case of an extension of credit that is secured 
     by the dwelling of a consumer, the disclosures provided under 
     subparagraph (A), shall be in addition to the other 
     disclosures required by subsection (a), and shall--
       ``(i) state in conspicuous type size and format, the 
     following: `You are not required to complete this agreement 
     merely because you have received these disclosures or signed 
     a loan application.'; and
       ``(ii) be provided in the form of final disclosures at the 
     time of consummation of the transaction, in the form and 
     manner prescribed by this section.
       ``(C) In the case of an extension of credit that is secured 
     by the dwelling of a consumer, under which the annual rate of 
     interest is variable, or with respect to which the regular 
     payments may otherwise be variable, in addition to the other 
     disclosures required by subsection (a), the disclosures 
     provided under this subsection shall do the following:

[[Page 8163]]

       ``(i) Label the payment schedule as follows: `Payment 
     Schedule: Payments Will Vary Based on Interest Rate Changes'.
       ``(ii) State in conspicuous type size and format examples 
     of adjustments to the regular required payment on the 
     extension of credit based on the change in the interest rates 
     specified by the contract for such extension of credit. Among 
     the examples required to be provided under this clause is an 
     example that reflects the maximum payment amount of the 
     regular required payments on the extension of credit, based 
     on the maximum interest rate allowed under the contract, in 
     accordance with the rules of the Board. Prior to issuing any 
     rules pursuant to this clause, the Board shall conduct 
     consumer testing to determine the appropriate format for 
     providing the disclosures required under this subparagraph to 
     consumers so that such disclosures can be easily understood.
       ``(D) In any case in which the disclosure statement under 
     subparagraph (A) contains an annual percentage rate of 
     interest that is no longer accurate, as determined under 
     section 107(c), the creditor shall furnish an additional, 
     corrected statement to the borrower, not later than 3 
     business days before the date of consummation of the 
     transaction.
       ``(E) The consumer shall receive the disclosures required 
     under this paragraph before paying any fee to the creditor or 
     other person in connection with the consumer's application 
     for an extension of credit that is secured by the dwelling of 
     a consumer. If the disclosures are mailed to the consumer, 
     the consumer is considered to have received them 3 business 
     days after they are mailed. A creditor or other person may 
     impose a fee for obtaining the consumer's credit report 
     before the consumer has received the disclosures under this 
     paragraph, provided the fee is bona fide and reasonable in 
     amount.
       ``(F) Waiver of timeliness of disclosures.--To expedite 
     consummation of a transaction, if the consumer determines 
     that the extension of credit is needed to meet a bona fide 
     personal financial emergency, the consumer may waive or 
     modify the timing requirements for disclosures under 
     subparagraph (A), provided that--
       ``(i) the term `bona fide personal emergency' may be 
     further defined in regulations issued by the Board;
       ``(ii) the consumer provides to the creditor a dated, 
     written statement describing the emergency and specifically 
     waiving or modifying those timing requirements, which 
     statement shall bear the signature of all consumers entitled 
     to receive the disclosures required by this paragraph; and
       ``(iii) the creditor provides to the consumers at or before 
     the time of such waiver or modification, the final 
     disclosures required by paragraph (1).
       ``(G) The requirements of subparagraphs (B), (C), (D) and 
     (E) shall not apply to extensions of credit relating to plans 
     described in section 101(53D) of title 11, United States 
     Code.''.
       (b) Civil Liability.--Section 130(a) of the Truth in 
     Lending Act (15 U.S.C. 1640(a)) is amended--
       (1) in paragraph (2)(A)(iii), by striking ``not less than 
     $200 or greater than $2,000'' and inserting ``not less than 
     $400 or greater than $4,000''; and
       (2) in the penultimate sentence of the undesignated matter 
     following paragraph (4)--
       (A) by inserting ``or section 128(b)(2)(C)(ii),'' after 
     ``128(a),''; and
       (B) by inserting ``or section 128(b)(2)(C)(ii)'' before the 
     period.
       (c) Effective Dates.--
       (1) General disclosures.--Except as provided in paragraph 
     (2), the amendments made by subsection (a) shall become 
     effective 12 months after the date of enactment of this Act.
       (2) Variable interest rates.--Subparagraph (C) of section 
     128(b)(2) of the Truth in Lending Act (15 U.S.C. 
     1638(b)(2)(C)), as added by subsection (a) of this section, 
     shall become effective on the earlier of--
       (A) the compliance date established by the Board for such 
     purpose, by regulation; or
       (B) 30 months after the date of enactment of this Act.

     SEC. 503. COMMUNITY DEVELOPMENT INVESTMENT AUTHORITY FOR 
                   DEPOSITORY INSTITUTIONS.

       (a) Depository Institution Community Development 
     Investments.--
       (1) National banks.--The first sentence of the paragraph 
     designated as the ``Eleventh'' of section 5136 of the Revised 
     Statutes of the United States (12 U.S.C. 24) (as amended by 
     section 305(a) of the Financial Services Regulatory Relief 
     Act of 2006) is amended by striking ``promotes the public 
     welfare by benefitting primarily'' and inserting ``is 
     designed primarily to promote the public welfare, including 
     the welfare of''.
       (2) State member banks.--The first sentence of the 23rd 
     paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 
     338a) is amended by striking ``promotes the public welfare by 
     benefitting primarily'' and inserting ``is designed primarily 
     to promote the public welfare, including the welfare of''.

     SEC. 504. FEDERAL HOME LOAN BANK REFINANCING AUTHORITY FOR 
                   CERTAIN RESIDENTIAL MORTGAGE LOANS.

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

                    TITLE VI--TAX-RELATED PROVISIONS

     SEC. 601. ELECTION FOR 4-YEAR CARRYBACK OF CERTAIN NET 
                   OPERATING LOSSES AND TEMPORARY SUSPENSION OF 90 
                   PERCENT AMT LIMIT.

       (a) In General.--
       (1) 4-year carryback of certain losses.--Subparagraph (H) 
     of section 172(b)(1) of the Internal Revenue Code of 1986 
     (relating to years to which loss may be carried) is amended 
     to read as follows:
       ``(H) Additional carryback of certain losses.--
       ``(i) Taxable years ending during 2001 and 2002.--In the 
     case of a net operating loss for any taxable year ending 
     during 2001 or 2002, subparagraph (A)(i) shall be applied by 
     substituting `5' for `2' and subparagraph (F) shall not 
     apply.
       ``(ii) Taxable years ending during 2008 and 2009.--In the 
     case of a net operating loss with respect to any eligible 
     taxpayer (within the meaning of section 168(k)(4)) for any 
     taxable year ending during 2008 or 2009--

       ``(I) subparagraph (A)(i) shall be applied by substituting 
     `4' for `2',
       ``(II) subparagraph (E)(ii) shall be applied by 
     substituting `3' for `2', and
       ``(III) subparagraph (F) shall not apply.''.

       (2) Temporary suspension of 90 percent limit on certain nol 
     carrybacks and carryovers.--
       (A) In general.--Section 56(d) of the Internal Revenue Code 
     of 1986 (relating to definition of alternative tax net 
     operating loss deduction) is amended by adding at the end the 
     following new paragraph:
       ``(3) Additional adjustments.--For purposes of paragraph 
     (1)(A), in the case of an eligible taxpayer (within the 
     meaning of section 168(k)(4)), the amount described in 
     subclause (I) of paragraph (1)(A)(ii) shall be increased by 
     the amount of the net operating loss deduction allowable for 
     the taxable year under section 172 attributable to the sum 
     of--
       ``(A) carrybacks of net operating losses from taxable years 
     ending during 2008 and 2009, and
       ``(B) carryovers of net operating losses to taxable years 
     ending during 2008 or 2009.''.
       (B) Conforming amendment.--Subclause (I) of section 
     56(d)(1)(A)(i) of such Code is amended by inserting ``amount 
     of such'' before ``deduction described in clause (ii)(I)''.
       (3) Effective dates.--
       (A) Net operating losses.--The amendments made by paragraph 
     (1) shall apply to net operating losses arising in taxable 
     years ending in 2008 or 2009.
       (B) Suspension of amt limitation.--The amendments made by 
     paragraph (2) shall apply to taxable years ending after 
     December 31, 1997.
       (4) Anti-abuse rules.--The Secretary of Treasury or the 
     Secretary's designee shall prescribe such rules as are 
     necessary to prevent the abuse of the purposes of the 
     amendments made by this subsection, including anti-stuffing 
     rules, anti-churning rules (including rules relating to sale-
     leasebacks), and rules similar to the rules under section 
     1091 of the Internal Revenue Code of 1986 relating to losses 
     from wash sales.
       (b) Election Among Stimulus Incentives.--
       (1) In general.--
       (A) Bonus depreciation.--Section 168(k) of the Internal 
     Revenue Code of 1986 (relating to special allowance for 
     certain property acquired after December 31, 2007, and before 
     January 1, 2009), as amended by the Economic Stimulus Act of 
     2008, is amended--
       (i) in paragraph (1), by inserting ``placed in service by 
     an eligible taxpayer'' after ``any qualified property'', and
       (ii) by adding at the end the following new paragraph:
       ``(4) Eligible taxpayer.--
       ``(A) In general.--At such time and in such manner as the 
     Secretary shall prescribe, each taxpayer may elect to be an 
     eligible taxpayer with respect to 1 (and only 1) of the 
     following:
       ``(i) This subsection and section 179(b)(7).
       ``(ii) The application of section 56(d)(1)(A)(ii)(I) and 
     section 172(b)(1)(H)(ii) in connection with net operating 
     losses relating to taxable years ending during 2008 and 2009.
       ``(B) Eligible taxpayer.--For purposes of each of the 
     provisions described in subparagraph (A), a taxpayer shall 
     only be treated as an eligible taxpayer with respect to the 
     provision with respect to which the taxpayer made the 
     election under subparagraph (A).
       ``(C) Election irrevocable.--An election under subparagraph 
     (A) may not be revoked except with the consent of the 
     Secretary.''.
       (B) Effective date.--The amendments made by this paragraph 
     shall take effect as if included in section 103 of the 
     Economic Stimulus Act of 2008.
       (2) Election for increased expensing.--
       (A) In general.--Paragraph (7) of section 179(b) of the 
     Internal Revenue Code of 1986 (relating to limitations), as 
     added by the Economic Stimulus Act of 2008, is amended to 
     read as follows:
       ``(7) Special rule for eligible taxpayers in 2008.--In the 
     case of any taxable year of any eligible taxpayer (within the 
     meaning of section 168(k)(4)) beginning in 2008--
       ``(A) the dollar limitation under paragraph (1) shall be 
     $250,000,
       ``(B) the dollar limitation under paragraph (2) shall be 
     $800,000, and
       ``(C) the amounts described in subparagraphs (A) and (B) 
     shall not be adjusted under paragraph (5).''.

[[Page 8164]]

       (B) Effective date.--The amendment made by this paragraph 
     shall take effect as if included in section 102 of the 
     Economic Stimulus Act of 2008.

     SEC. 602. MODIFICATIONS ON USE OF QUALIFIED MORTGAGE BONDS; 
                   TEMPORARY INCREASED VOLUME CAP FOR CERTAIN 
                   HOUSING BONDS.

       (a) Use of Qualified Mortgage Bonds Proceeds for Subprime 
     Refinancing Loans.--Section 143(k) of the Internal Revenue 
     Code of 1986 (relating to other definitions and special 
     rules) is amended by adding at the end the following new 
     paragraph:
       ``(12) Special rules for subprime refinancings.--
       ``(A) In general.--Notwithstanding the requirements of 
     subsection (i)(1), the proceeds of a qualified mortgage issue 
     may be used to refinance a mortgage on a residence which was 
     originally financed by the mortgagor through a qualified 
     subprime loan.
       ``(B) Special rules.--In applying this paragraph to any 
     case in which the proceeds of a qualified mortgage issue are 
     used for any refinancing described in subparagraph (A)--
       ``(i) subsection (a)(2)(D)(i) (relating to proceeds must be 
     used within 42 months of date of issuance) shall be applied 
     by substituting `12-month period' for `42-month period' each 
     place it appears,
       ``(ii) subsection (d) (relating to 3-year requirement) 
     shall not apply, and
       ``(iii) subsection (e) (relating to purchase price 
     requirement) shall be applied by using the market value of 
     the residence at the time of refinancing in lieu of the 
     acquisition cost.
       ``(C) Qualified subprime loan.--The term `qualified 
     subprime loan' means an adjustable rate single-family 
     residential mortgage loan originated after December 31, 2001, 
     and before January 1, 2008, that the bond issuer determines 
     would be reasonably likely to cause financial hardship to the 
     borrower if not refinanced.
       ``(D) Termination.--This paragraph shall not apply to any 
     bonds issued after December 31, 2010.''.
       (b) Increased Volume Cap for Certain Bonds.--
       (1) In general.--Subsection (d) of section 146 of the 
     Internal Revenue Code of 1986 (relating to State ceiling) is 
     amended by adding at the end the following new paragraph:
       ``(5) Increase and set aside for housing bonds for 2008.--
       ``(A) Increase for 2008.--In the case of calendar year 
     2008, the State ceiling for each State shall be increased by 
     an amount equal to the greater of--
       ``(i) $10,000,000,000 multiplied by a fraction--

       ``(I) the numerator of which is the population of such 
     State, and
       ``(II) the denominator of which is the total population of 
     all States, or

       ``(ii) the amount determined under subparagraph (B).
       ``(B) Minimum amount.--The amount determined under this 
     subparagraph is--
       ``(i) in the case of a State (other than a possession), 
     $90,300,606, and
       ``(ii) in the case of a possession of the United States 
     with a population less than the least populous State (other 
     than a possession), the product of--

       ``(I) a fraction the numerator of which is $90,300,606 and 
     the denominator of which is population of the least populous 
     State (other than a possession), and
       ``(II) the population of such possession.

     In the case of any possession of the United States not 
     described in clause (ii), the amount determined under this 
     subparagraph shall be zero.
       ``(C) Set aside.--
       ``(i) In general.--Any amount of the State ceiling for any 
     State which is attributable to an increase under this 
     paragraph shall be allocated solely for one or more qualified 
     purposes.
       ``(ii) Qualified purpose.--For purposes of this paragraph, 
     the term `qualified purpose' means--

       ``(I) the issuance of exempt facility bonds used solely to 
     provide qualified residential rental projects, or
       ``(II) a qualified mortgage issue (determined by 
     substituting `12-month period' for `42-month period' each 
     place it appears in section 143(a)(2)(D)(i)).''.

       (2) Carryforward of unused limitations.--Subsection (f) of 
     section 146 of such Code (relating to elective carryforward 
     of unused limitation for specified purpose) is amended by 
     adding at the end the following new paragraph:
       ``(6) Special rules for increased volume cap under 
     subsection (d)(5).--
       ``(A) In general.--No amount which is attributable to the 
     increase under subsection (d)(5) may be used--
       ``(i) for a carryforward purpose other than a qualified 
     purpose (as defined in subsection (d)(5)), and
       ``(ii) to issue any bond after calendar year 2010.
       ``(B) Ordering rules.--For purposes of subparagraph (A), 
     any carryforward of an issuing authority's volume cap for 
     calendar year 2008 shall be treated as attributable to such 
     increase to the extent of such increase.''.
       (c) Alternative Minimum Tax Exemption for Qualified 
     Mortgage Bonds, Qualified Veterans' Mortgage Bonds, and Bonds 
     for Qualified Residential Rental Projects.--
       (1) In general.--Clause (ii) of section 57(a)(5)(C) of the 
     Internal Revenue Code of 1986 (relating to specified private 
     activity bonds) is amended by striking ``shall not include'' 
     and all that follows and inserting ``shall not include--

       ``(I) any qualified 501(c)(3) bond (as defined in section 
     145), or
       ``(II) any qualified mortgage bond (as defined in section 
     143(a)), any qualified veterans' mortgage bond (as defined in 
     section 143(b)), or any exempt facility bond (as defined in 
     section 142(a)) issued as part of an issue 95 percent or more 
     of the net proceeds of which are to be used to provide 
     qualified residential rental projects (as defined in section 
     142(d)), but only if such bond is issued after the date of 
     the enactment of this subclause and before January 1, 2011.

     Subclause (II) shall not apply to a refunding bond unless 
     such subclause applied to the refunded bond (or in the case 
     of a series of refundings, the original bond).''.
       (2) Conforming amendment.--The heading for section 
     57(a)(5)(C)(ii) of such Code is amended by striking 
     ``qualified 501(c)(3) bonds'' and inserting ``certain 
     bonds''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 603. CREDIT FOR CERTAIN HOME PURCHASES.

       (a) Allowance of Credit.--Subpart A of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 (relating to nonrefundable personal credits) is amended 
     by inserting after section 25D the following new section:

     ``SEC. 25E. CREDIT FOR CERTAIN HOME PURCHASES.

       ``(a) Allowance of Credit.--
       ``(1) In general.--In the case of an individual who is a 
     purchaser of a qualified principal residence during the 
     taxable year, there shall be allowed as a credit against the 
     tax imposed by this chapter an amount equal to so much of the 
     purchase price of the residence as does not exceed $7,000.
       ``(2) Allocation of credit amount.--The amount of the 
     credit allowed under paragraph (1) shall be equally divided 
     among the 2 taxable years beginning with the taxable year in 
     which the purchase of the qualified principal residence is 
     made.
       ``(b) Limitations.--
       ``(1) Date of purchase.--The credit allowed under 
     subsection (a) shall be allowed only with respect to 
     purchases made--
       ``(A) after the date of the enactment of this section, and
       ``(B) before the date that is 12 months after such date.
       ``(2) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for any taxable year 
     shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section and section 23) for the taxable 
     year.
       ``(3) One-time only.--
       ``(A) In general.--If a credit is allowed under this 
     section in the case of any individual (and such individual's 
     spouse, if married) with respect to the purchase of any 
     qualified principal residence, no credit shall be allowed 
     under this section in any taxable year with respect to the 
     purchase of any other qualified principal residence by such 
     individual or a spouse of such individual.
       ``(B) Joint purchase.--In the case of a purchase of a 
     qualified principal residence by 2 or more unmarried 
     individuals or by 2 married individuals filing separately, no 
     credit shall be allowed under this section if a credit under 
     this section has been allowed to any of such individuals in 
     any taxable year with respect to the purchase of any other 
     qualified principal residence.
       ``(c) Qualified Principal Residence.--For purposes of this 
     section--
       ``(1) In general.--The term `qualified principal residence' 
     means an eligible single-family residence that is purchased 
     to be the principal residence of the purchaser.
       ``(2) Eligible single-family residence.--
       ``(A) In general.--The term `eligible single-family 
     residence' means a single-family structure that is a 
     residence--
       ``(i) upon which foreclosure has been filed pursuant to the 
     laws of the State in which the residence is located, and
       ``(ii) which--

       ``(I) is a new previously unoccupied residence for which a 
     building permit was issued and construction began on or 
     before September 1, 2007, or
       ``(II) was occupied as a principal residence by the 
     mortgagor for at least 1 year prior to the foreclosure 
     filing.

       ``(B) Certification.--In the case of an eligible single-
     family residence described in subparagraph (A)(ii)(I), no 
     credit shall be allowed under this section unless the 
     purchaser submits a certification by the seller of such 
     residence that such residence meets the requirements of such 
     subparagraph.
       ``(3) Principal residence.--The term `principal residence' 
     has the same meaning as when used in section 121.
       ``(d) Denial of Double Benefit.--No credit shall be allowed 
     under this section for any purchase for which a credit is 
     allowed under section 1400C.
       ``(e) Recapture in the Case of Certain Dispositions.--In 
     the event that a taxpayer--
       ``(1) disposes of the qualified principal residence with 
     respect to which a credit is allowed under subsection (a), or
       ``(2) fails to occupy such residence as the taxpayer's 
     principal residence,


[[Page 8165]]


     at any time within 24 months after the date on which the 
     taxpayer purchased such residence, then the remaining portion 
     of the credit allowed under subsection (a) shall be 
     disallowed in the taxable year during which such disposition 
     occurred or in which the taxpayer failed to occupy the 
     residence as a principal residence, and in any subsequent 
     taxable year in which the remaining portion of the credit 
     would, but for this subsection, have been allowed.
       ``(f) Special Rules.--
       ``(1) Joint purchase.--
       ``(A) Married individuals filing separately.--In the case 
     of 2 married individuals filing separately, subsection (a) 
     shall be applied to each such individual by substituting 
     `$3,500' for `$7,000' in paragraph (1) thereof.
       ``(B) Unmarried individuals.--If 2 or more individuals who 
     are not married purchase a qualified principal residence, the 
     amount of the credit allowed under subsection (a) shall be 
     allocated among such individuals in such manner as the 
     Secretary may prescribe, except that the total amount of the 
     credits allowed to all such individuals shall not exceed 
     $7,000.
       ``(2) Purchase; purchase price.--Rules similar to the rules 
     of paragraphs (2) and (3) of section 1400C(e) (as in effect 
     on the date of the enactment of this section) shall apply for 
     purposes of this section.
       ``(3) Reporting requirement.--Rules similar to the rules of 
     section 1400C(f) (as so in effect) shall apply for purposes 
     of this section.
       ``(g) Basis Adjustment.--For purposes of this subtitle, if 
     a credit is allowed under this section with respect to the 
     purchase of any residence, the basis of such residence shall 
     be reduced by the amount of the credit so allowed.''.
       (b) Conforming Amendments.--
       (1) Section 24(b)(3)(B) of the Internal Revenue Code of 
     1986 is amended by striking ``and 25B'' and inserting ``, 
     25B, and 25E''.
       (2) Section 25(e)(1)(C)(ii) of such Code is amended by 
     inserting ``25E,'' after ``25D,''.
       (3) Section 25B(g)(2) of such Code is amended by striking 
     ``section 23'' and inserting ``sections 23 and 25E''.
       (4) Section 25D(c)(2) of such Code is amended by striking 
     ``and 25B'' and inserting ``25B, and 25E''.
       (5) Section 26(a)(1) of such Code is amended by striking 
     ``and 25B'' and inserting ``25B, and 25E''.
       (6) Section 904(i) of such Code is amended by striking 
     ``and 25B'' and inserting ``25B, and 25E''.
       (7) Subsection (a) of section 1016 of such Code is amended 
     by striking ``and'' at the end of paragraph (36), by striking 
     the period at the end of paragraph (37) and inserting ``, 
     and'', and by adding at the end the following new paragraph:
       ``(38) to the extent provided in section 25E(g).''.
       (8) Section 1400C(d)(2) of such Code is amended by striking 
     ``and 25D'' and inserting ``25D, and 25E''.
       (c) Clerical Amendment.--The table of sections for subpart 
     A of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by inserting after the item 
     relating to section 25D the following new item:

``Sec. 25E. Credit for certain home purchases.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to purchases in taxable years ending after the 
     date of the enactment of this Act.
       (e) Application of EGTRRA Sunset.--The amendment made by 
     subsection (b)(1) shall be subject to title IX of the 
     Economic Growth and Tax Relief Reconciliation Act of 2001 in 
     the same manner as the provisions of such Act to which such 
     amendment relates.

     SEC. 604. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY 
                   TAXES FOR NONITEMIZERS.

       (a) In General.--Section 63(c)(1) of the Internal Revenue 
     Code of 1986 (defining standard deduction) is amended by 
     striking ``and'' at the end of subparagraph (A), by striking 
     the period at the end of subparagraph (B) and inserting ``, 
     and'', and by adding at the end the following new 
     subparagraph:
       ``(C) in the case of any taxable year beginning in 2008, 
     the real property tax deduction.''.
       (b) Definition.--Section 63(c) of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     paragraph:
       ``(8) Real property tax deduction.--
       ``(A) In general.--For purposes of paragraph (1), the real 
     property tax deduction is so much of the amount of the 
     eligible State and local real property taxes paid or accrued 
     by the taxpayer during the taxable year which do not exceed 
     $500 ($1,000 in the case of a joint return).
       ``(B) Eligible state and local real property taxes.--For 
     purposes of subparagraph (A), the term `eligible State and 
     local real property taxes' means State and local real 
     property taxes (within the meaning of section 164), but only 
     if the rate of tax for all residential real property taxes in 
     the jurisdiction has not been increased at any time after 
     April 2, 2008, and before January 1, 2009.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. 605. ELECTION TO ACCELERATE AMT AND R AND D CREDITS IN 
                   LIEU OF BONUS DEPRECIATION.

       (a) In General.--Section 168(k), as amended by this Act, is 
     amended by adding at the end the following new paragraph:
       ``(5) Election to accelerate amt and r and d credits in 
     lieu of bonus depreciation.--
       ``(A) In general.--If a corporation which is an eligible 
     taxpayer (within the meaning of paragraph (4)) for purposes 
     of this subsection elects to have this paragraph apply--
       ``(i) no additional depreciation shall be allowed under 
     paragraph (1) for any qualified property placed in service 
     during any taxable year to which paragraph (1) would 
     otherwise apply, and
       ``(ii) the limitations described in subparagraph (B) for 
     such taxable year shall be increased by an aggregate amount 
     not in excess of the bonus depreciation amount for such 
     taxable year.

       ``(B) Limitations to be increased.--The limitations 
     described in this subparagraph are--
       ``(i) the limitation under section 38(c), and
       ``(ii) the limitation under section 53(c).
       ``(C) Bonus depreciation amount.--For purposes of this 
     paragraph--
       ``(i) In general.--The bonus depreciation amount for any 
     applicable taxable year is an amount equal to the product of 
     20 percent and the excess (if any) of--

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

     In the case of property which is a passenger aircraft, the 
     amount determined under subclause (I) shall be calculated 
     without regard to the written binding contract limitation 
     under paragraph (2)(A)(iii)(I).
       ``(ii) Eligible qualified property.--For purposes of clause 
     (i), the term `eligible qualified property' means qualified 
     property under paragraph (2), except that in applying 
     paragraph (2) for purposes of this clause--

       ``(I) `March 31, 2008' shall be substituted for `December 
     31, 2007' each place it appears in subparagraph (A) and 
     clauses (i) and (ii) of subparagraph (E) thereof,
       ``(II) only adjusted basis attributable to manufacture, 
     construction, or production after March 31, 2008, and before 
     January 1, 2009, shall be taken into account under 
     subparagraph (B)(ii) thereof, and
       ``(III) in the case of property which is a passenger 
     aircraft, the written binding contract limitation under 
     subparagraph (A)(iii)(I) thereof shall not apply.

       ``(iii) Maximum amount.--The bonus depreciation amount for 
     any applicable taxable year shall not exceed the applicable 
     limitation under clause (iv), reduced (but not below zero) by 
     the bonus depreciation amount for any preceding taxable year.
       ``(iv) Applicable limitation.--For purposes of clause 
     (iii), the term `applicable limitation' means, with respect 
     to any eligible taxpayer, the lesser of--

       ``(I) $40,000,000, or
       ``(II) 10 percent of the sum of the amounts determined with 
     respect to the eligible taxpayer under clauses (ii) and (iii) 
     of subparagraph (D).

       ``(v) Aggregation rule.--All corporations which are treated 
     as a single employer under section 52(a) shall be treated as 
     1 taxpayer for purposes of applying the limitation under this 
     subparagraph and determining the applicable limitation under 
     clause (iv).
       ``(D) Allocation of bonus depreciation amounts.--
       ``(i) In general.--Subject to clauses (ii) and (iii), the 
     taxpayer shall, at such time and in such manner as the 
     Secretary may prescribe, specify the portion (if any) of the 
     bonus depreciation amount which is to be allocated to each of 
     the limitations described in subparagraph (B).
       ``(ii) Business credit limitation.--The portion of the 
     bonus depreciation amount allocated to the limitation 
     described in subparagraph (B)(i) shall not exceed an amount 
     equal to the portion of the credit allowable under section 38 
     for the taxable year which is allocable to business credit 
     carryforwards to such taxable year which are--

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

       ``(iii) Alternative minimum tax credit limitation.--The 
     portion of the bonus depreciation amount allocated to the 
     limitation described in subparagraph (B)(ii) shall not exceed 
     an amount equal to the portion of the minimum tax credit 
     allowable under section 53 for the taxable year which is 
     allocable to the adjusted minimum tax imposed for taxable 
     years beginning before January 1, 2006.
       ``(E) Credit refundable.--Any aggregate increases in the 
     credits allowed under section 38 or 53 by reason of this 
     paragraph shall, for purposes of this title, be treated as a 
     credit allowed to the taxpayer under subpart C of part IV of 
     subchapter A.
       ``(F) Other rules.--
       ``(i) Election.--Any election under this paragraph 
     (including any allocation under subparagraph (D)) may be 
     revoked only with the consent of the Secretary.
       ``(ii) Deduction allowed in computing minimum tax.--
     Notwithstanding this paragraph, paragraph (2)(G) shall apply 
     with respect to the deduction computed under this section 
     (after application of this paragraph) with respect to 
     property placed in service during any applicable taxable 
     year.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2007, in taxable years ending after such date.

[[Page 8166]]



     SEC. 606. USE OF AMENDED INCOME TAX RETURNS TO TAKE INTO 
                   ACCOUNT RECEIPT OF CERTAIN HURRICANE-RELATED 
                   CASUALTY LOSS GRANTS BY DISALLOWING PREVIOUSLY 
                   TAKEN CASUALTY LOSS DEDUCTIONS.

       (a) In General.--Notwithstanding any other provision of the 
     Internal Revenue Code of 1986, if a taxpayer claims a 
     deduction for any taxable year with respect to a casualty 
     loss to a personal residence (within the meaning of section 
     121 of such Code) resulting from Hurricane Katrina, Hurricane 
     Rita, or Hurricane Wilma and in a subsequent taxable year 
     receives a grant under Public Law 109-148, 109-234, or 110-
     116 as reimbursement for such loss, such taxpayer may elect 
     to file an amended income tax return for the taxable year in 
     which such deduction was allowed and disallow such deduction. 
     If elected, such amended return must be filed not later than 
     the due date for filing the tax return for the taxable year 
     in which the taxpayer receives such reimbursement or the date 
     that is 4 months after the date of the enactment of this Act, 
     whichever is later. Any increase in Federal income tax 
     resulting from such disallowance if such amended return is 
     filed--
       (1) shall be subject to interest on the underpaid tax for 
     one year at the underpayment rate determined under section 
     6621(a)(2) of such Code; and
       (2) shall not be subject to any penalty under such Code.
       (b) Emergency Designation.--For purposes of Senate 
     enforcement, all provisions of this section are designated as 
     emergency requirements and necessary to meet emergency needs 
     pursuant to section 204 of S. Con. Res. 21 (110th Congress), 
     the concurrent resolution on the budget for fiscal year 2008.

     SEC. 607. WAIVER OF DEADLINE ON CONSTRUCTION OF GO ZONE 
                   PROPERTY ELIGIBLE FOR BONUS DEPRECIATION.

       (a) In General.--Subparagraph (B) of section 1400N(d)(3) of 
     the Internal Revenue Code of 1986 is amended to read as 
     follows:
       ``(B) without regard to `and before January 1, 2009' in 
     clause (i) thereof,''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.
       (c) Emergency Designation.--For purposes of Senate 
     enforcement, all provisions of this section are designated as 
     emergency requirements and necessary to meet emergency needs 
     pursuant to section 204 of S. Con. Res. 21 (110th Congress), 
     the concurrent resolution on the budget for fiscal year 2008.

     SEC. 608. TEMPORARY TAX RELIEF FOR KIOWA COUNTY, KANSAS AND 
                   SURROUNDING AREA.

       (a) In General.--The following provisions of or relating to 
     the Internal Revenue Code of 1986 shall apply, in addition to 
     the areas described in such provisions, to an area with 
     respect to which a major disaster has been declared by the 
     President under section 401 of the Robert T. Stafford 
     Disaster Relief and Emergency Assistance Act (FEMA-1699-DR, 
     as in effect on the date of the enactment of this Act) by 
     reason of severe storms and tornados beginning on May 4, 
     2007, and determined by the President to warrant individual 
     or individual and public assistance from the Federal 
     Government under such Act with respect to damages attributed 
     to such storms and tornados:
       (1) Suspension of certain limitations on personal casualty 
     losses.--Section 1400S(b)(1) of the Internal Revenue Code of 
     1986, by substituting ``May 4, 2007'' for ``August 25, 
     2005''.
       (2) Extension of replacement period for nonrecognition of 
     gain.--Section 405 of the Katrina Emergency Tax Relief Act of 
     2005, by substituting ``on or after May 4, 2007, by reason of 
     the May 4, 2007, storms and tornados'' for ``on or after 
     August 25, 2005, by reason of Hurricane Katrina''.
       (3) Employee retention credit for employers affected by may 
     4 storms and tornados.--Section 1400R(a) of the Internal 
     Revenue Code of 1986--
       (A) by substituting ``May 4, 2007'' for ``August 28, 2005'' 
     each place it appears,
       (B) by substituting ``January 1, 2008'' for ``January 1, 
     2006'' both places it appears, and
       (C) only with respect to eligible employers who employed an 
     average of not more than 200 employees on business days 
     during the taxable year before May 4, 2007.
       (4) Special allowance for certain property acquired on or 
     after may 5, 2007.--Section 1400N(d) of such Code--
       (A) by substituting ``qualified Recovery Assistance 
     property'' for ``qualified Gulf Opportunity Zone property'' 
     each place it appears,
       (B) by substituting ``May 5, 2007'' for ``August 28, 2005'' 
     each place it appears,
       (C) by substituting ``December 31, 2008'' for ``December 
     31, 2007'' in paragraph (2)(A)(v),
       (D) by substituting ``December 31, 2009'' for ``December 
     31, 2008'' in paragraph (2)(A)(v),
       (E) by substituting ``May 4, 2007'' for ``August 27, 2005'' 
     in paragraph (3)(A),
       (F) by substituting ``January 1, 2009'' for ``January 1, 
     2008'' in paragraph (3)(B), and
       (G) determined without regard to paragraph (6) thereof.
       (5) Increase in expensing under section 179.--Section 
     1400N(e) of such Code, by substituting ``qualified section 
     179 Recovery Assistance property'' for ``qualified section 
     179 Gulf Opportunity Zone property'' each place it appears.
       (6) Expensing for certain demolition and clean-up costs.--
     Section 1400N(f) of such Code--
       (A) by substituting ``qualified Recovery Assistance clean-
     up cost'' for ``qualified Gulf Opportunity Zone clean-up 
     cost'' each place it appears, and
       (B) by substituting ``beginning on May 4, 2007, and ending 
     on December 31, 2009'' for ``beginning on August 28, 2005, 
     and ending on December 31, 2007'' in paragraph (2) thereof.
       (7) Treatment of public utility property disaster losses.--
     Section 1400N(o) of such Code.
       (8) Treatment of net operating losses attributable to storm 
     losses.--Section 1400N(k) of such Code--
       (A) by substituting ``qualified Recovery Assistance loss'' 
     for ``qualified Gulf Opportunity Zone loss'' each place it 
     appears,
       (B) by substituting ``after May 3, 2007, and before on 
     January 1, 2010'' for ``after August 27, 2005, and before 
     January 1, 2008'' each place it appears,
       (C) by substituting ``May 4, 2007'' for ``August 28, 2005'' 
     in paragraph (2)(B)(ii)(I) thereof,
       (D) by substituting ``qualified Recovery Assistance 
     property'' for ``qualified Gulf Opportunity Zone property'' 
     in paragraph (2)(B)(iv) thereof, and
       (E) by substituting ``qualified Recovery Assistance 
     casualty loss'' for ``qualified Gulf Opportunity Zone 
     casualty loss'' each place it appears.
       (9) Treatment of representations regarding income 
     eligibility for purposes of qualified rental project 
     requirements.--Section 1400N(n) of such Code.
       (10) Special rules for use of retirement funds.--Section 
     1400Q of such Code--
       (A) by substituting ``qualified Recovery Assistance 
     distribution'' for ``qualified hurricane distribution'' each 
     place it appears,
       (B) by substituting ``on or after May 4, 2007, and before 
     January 1, 2009'' for ``on or after August 25, 2005, and 
     before January 1, 2007'' in subsection (a)(4)(A)(i),
       (C) by substituting ``qualified storm distribution'' for 
     ``qualified Katrina distribution'' each place it appears,
       (D) by substituting ``after November 4, 2006, and before 
     May 5, 2007'' for ``after February 28, 2005, and before 
     August 29, 2005'' in subsection (b)(2)(B)(ii),
       (E) by substituting ``beginning on May 4, 2007, and ending 
     on November 5, 2007'' for ``beginning on August 25, 2005, and 
     ending on February 28, 2006'' in subsection (b)(3)(A),
       (F) by substituting ``qualified storm individual'' for 
     ``qualified Hurricane Katrina individual'' each place it 
     appears,
       (G) by substituting ``December 31, 2007'' for ``December 
     31, 2006'' in subsection (c)(2)(A),
       (H) by substituting ``beginning on June 4, 2007, and ending 
     on December 31, 2007'' for ``beginning on September 24, 2005, 
     and ending on December 31, 2006'' in subsection (c)(4)(A)(i),
       (I) by substituting ``May 4, 2007'' for ``August 25, 2005'' 
     in subsection (c)(4)(A)(ii), and
       (J) by substituting ``January 1, 2008'' for ``January 1, 
     2007'' in subsection (d)(2)(A)(ii).
       (b) Emergency Designation.--For purposes of Senate 
     enforcement, all provisions of this section are designated as 
     emergency requirements and necessary to meet emergency needs 
     pursuant to section 204 of S. Con. Res. 21 (110th Congress), 
     the concurrent resolution on the budget for fiscal year 2008.

                    TITLE VII--EMERGENCY DESIGNATION

     SEC. 701. EMERGENCY DESIGNATION.

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

      TITLE VIII--REIT INVESTMENT DIVERSIFICATION AND EMPOWERMENT

     SEC. 801. SHORT TITLE; AMENDMENT OF 1986 CODE.

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

                 Subtitle A--Taxable REIT Subsidiaries

     SEC. 811. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.

       Section 856(c)(4)(B)(ii) is amended by striking ``20 
     percent'' and inserting ``25 percent''.

                        Subtitle B--Dealer Sales

     SEC. 821. HOLDING PERIOD UNDER SAFE HARBOR.

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

     SEC. 822. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.

       Section 857(b)(6) is amended--
       (1) by striking the semicolon at the end of subparagraph 
     (C)(iii) and inserting ``, or (III) the

[[Page 8167]]

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

                     Subtitle C--Health Care REITs

     SEC. 831. CONFORMITY FOR HEALTH CARE FACILITIES.

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

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

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

                 Subtitle D--Effective Dates and Sunset

     SEC. 841 EFFECTIVE DATES AND SUNSET.

       (a) In General.--Except as otherwise provided in this 
     section, the amendments made by this title shall apply to 
     taxable years beginning after the date of the enactment of 
     this Act.
       (b) REIT Income Tests.--
       (1) The amendment made by section 801(a) and (b) shall 
     apply to gains and items of income recognized after the date 
     of the enactment of this Act.
       (2) The amendment made by section 801(c) shall apply to 
     transactions entered into after the date of the enactment of 
     this Act.
       (3) The amendment made by section 801(d) shall apply after 
     the date of the enactment of this Act.
       (c) Conforming Foreign Currency Revisions.--
       (1) The amendment made by section 803(a) shall apply to 
     gains recognized after the date of the enactment of this Act.
       (2) The amendment made by section 803(b) shall apply to 
     gains and deductions recognized after the date of the 
     enactment of this Act.
       (d) Dealer Sales.--The amendments made by subtitle C shall 
     apply to sales made after the date of the enactment of this 
     Act.
       (e) Sunset.--All amendments made by this title shall not 
     apply to taxable years beginning after the date which is 5 
     years after the date of the enactment of this Act. The 
     Internal Revenue Code of 1986 shall be applied and 
     administered to taxable years described in the preceding 
     sentence as if the amendments so described had never been 
     enacted.

                   TITLE IX--VETERANS HOUSING MATTERS

     SEC. 901. HOME IMPROVEMENTS AND STRUCTURAL ALTERATIONS FOR 
                   TOTALLY DISABLED MEMBERS OF THE ARMED FORCES 
                   BEFORE DISCHARGE OR RELEASE FROM THE ARMED 
                   FORCES.

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

     SEC. 902. ELIGIBILITY FOR SPECIALLY ADAPTED HOUSING BENEFITS 
                   AND ASSISTANCE FOR MEMBERS OF THE ARMED FORCES 
                   WITH SERVICE-CONNECTED DISABILITIES AND 
                   INDIVIDUALS RESIDING OUTSIDE THE UNITED STATES.

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

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

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

[[Page 8168]]

       (B) in subsection (a), by striking ``veteran's'' each place 
     it appears and inserting ``individual's''; and
       (C) in subsection (b), by striking ``a veteran'' each place 
     it appears and inserting ``an individual''.
       (4) Furnishing of plans and specifications.--Section 2103 
     of such title is amended by striking ``veterans'' both places 
     it appears and inserting ``individuals''.
       (5) Construction of benefits.--Section 2104 of such title 
     is amended--
       (A) in subsection (a), by striking ``veteran'' each place 
     it appears and inserting ``individual''; and
       (B) in subsection (b)--
       (i) in the first sentence, by striking ``A veteran'' and 
     inserting ``An individual'';
       (ii) in the second sentence, by striking ``a veteran'' and 
     inserting ``an individual''; and
       (iii) by striking ``such veteran'' each place it appears 
     and inserting ``such individual''.
       (6) Veterans' mortgage life insurance.--Section 2106 of 
     such title is amended--
       (A) in subsection (a)--
       (i) by striking ``any eligible veteran'' and inserting 
     ``any eligible individual''; and
       (ii) by striking ``the veterans' '' and inserting ``the 
     individual's'';
       (B) in subsection (b), by striking ``an eligible veteran'' 
     and inserting ``an eligible individual'';
       (C) in subsection (e), by striking ``an eligible veteran'' 
     and inserting ``an individual'';
       (D) in subsection (h), by striking ``each veteran'' and 
     inserting ``each individual'';
       (E) in subsection (i), by striking ``the veteran's'' each 
     place it appears and inserting ``the individual's'';
       (F) by striking ``the veteran'' each place it appears and 
     inserting ``the individual''; and
       (G) by striking ``a veteran'' each place it appears and 
     inserting ``an individual''.
       (7) Heading amendments.--(A) The heading of section 2101 of 
     such title is amended to read as follows:

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

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

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

       (8) Clerical amendments.--The table of sections at the 
     beginning of chapter 21 of such title is amended--
       (A) by striking the item relating to section 2101 and 
     inserting the following new item:

``2101. Acquisition and adaptation of housing: eligible veterans.'';
       (B) by inserting after the item relating to section 2101, 
     as so amended, the following new item:

``2101A. Eligibility for benefits and assistance: members of the Armed 
              Forces with service-connected disabilities; individuals 
              residing outside the United States.'';
     and
       (C) by striking the item relating to section 2102A and 
     inserting the following new item:

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

     SEC. 903. SPECIALLY ADAPTED HOUSING ASSISTANCE FOR 
                   INDIVIDUALS WITH SEVERE BURN INJURIES.

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

     SEC. 904. EXTENSION OF ASSISTANCE FOR INDIVIDUALS RESIDING 
                   TEMPORARILY IN HOUSING OWNED BY A FAMILY 
                   MEMBER.

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

     SEC. 905. INCREASE IN SPECIALLY ADAPTED HOUSING BENEFITS FOR 
                   DISABLED VETERANS.

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

     SEC. 906. REPORT ON SPECIALLY ADAPTED HOUSING FOR DISABLED 
                   INDIVIDUALS.

       (a) In General.--Not later than December 31, 2008, the 
     Secretary of Veterans Affairs shall submit to the Committee 
     on Veterans' Affairs of the Senate and the Committee on 
     Veterans' Affairs of the House of Representatives a report 
     that contains an assessment of the adequacy of the 
     authorities available to the Secretary under law to assist 
     eligible disabled individuals in acquiring--
       (1) suitable housing units with special fixtures or movable 
     facilities required for their disabilities, and necessary 
     land therefor;
       (2) such adaptations to their residences as are reasonably 
     necessary because of their disabilities; and
       (3) residences already adapted with special features 
     determined by the Secretary to be reasonably necessary as a 
     result of their disabilities.
       (b) Focus on Particular Disabilities.--The report required 
     by subsection (a) shall set forth a specific assessment of 
     the needs of--
       (1) veterans who have disabilities that are not described 
     in subsections (a)(2) and (b)(2) of section 2101 of title 38, 
     United States Code; and
       (2) other disabled individuals eligible for specially 
     adapted housing under chapter 21 of such title by reason of 
     section 2101A of such title (as added by section 902(a) of 
     this Act) who have disabilities that are not described in 
     such subsections.

     SEC. 907. REPORT ON SPECIALLY ADAPTED HOUSING ASSISTANCE FOR 
                   INDIVIDUALS WHO RESIDE IN HOUSING OWNED BY A 
                   FAMILY MEMBER ON PERMANENT BASIS.

       Not later than December 31, 2008, the Secretary of Veterans 
     Affairs shall submit to the Committee on Veterans' Affairs of 
     the Senate and the Committee on Veterans' Affairs of the 
     House of Representatives a report on the advisability of 
     providing assistance under section 2102A of title 38, United 
     States Code, to veterans described in subsection (a) of such 
     section, and to members of the Armed Forces covered by such 
     section 2102A by reason of section 2101A of title 38, United 
     States Code (as added by section 902(a) of this Act), who 
     reside with family members on a permanent basis.

     SEC. 908. DEFINITION OF ANNUAL INCOME FOR PURPOSES OF SECTION 
                   8 AND OTHER PUBLIC HOUSING PROGRAMS.

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

     SEC. 909. PAYMENT OF TRANSPORTATION OF BAGGAGE AND HOUSEHOLD 
                   EFFECTS FOR MEMBERS OF THE ARMED FORCES WHO 
                   RELOCATE DUE TO FORECLOSURE OF LEASED HOUSING.

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

                   TITLE X--CLEAN ENERGY TAX STIMULUS

     SEC. 1001. SHORT TITLE; ETC.

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

      Subtitle A--Extension of Clean Energy Production Incentives

     SEC. 1011. EXTENSION AND MODIFICATION OF RENEWABLE ENERGY 
                   PRODUCTION TAX CREDIT.

       (a) Extension of Credit.--Each of the following provisions 
     of section 45(d) (relating to qualified facilities) is 
     amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2010'':
       (1) Paragraph (1).
       (2) Clauses (i) and (ii) of paragraph (2)(A).
       (3) Clauses (i)(I) and (ii) of paragraph (3)(A).
       (4) Paragraph (4).
       (5) Paragraph (5).
       (6) Paragraph (6).
       (7) Paragraph (7).
       (8) Paragraph (8).

[[Page 8169]]

       (9) Subparagraphs (A) and (B) of paragraph (9).
       (b) Production Credit for Electricity Produced From Marine 
     Renewables.--
       (1) In general.--Paragraph (1) of section 45(c) (relating 
     to resources) is amended by striking ``and'' at the end of 
     subparagraph (G), by striking the period at the end of 
     subparagraph (H) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(I) marine and hydrokinetic renewable energy.''.
       (2) Marine renewables.--Subsection (c) of section 45 is 
     amended by adding at the end the following new paragraph:
       ``(10) Marine and hydrokinetic renewable energy.--
       ``(A) In general.--The term `marine and hydrokinetic 
     renewable energy' means energy derived from--
       ``(i) waves, tides, and currents in oceans, estuaries, and 
     tidal areas,
       ``(ii) free flowing water in rivers, lakes, and streams,
       ``(iii) free flowing water in an irrigation system, canal, 
     or other man-made channel, including projects that utilize 
     nonmechanical structures to accelerate the flow of water for 
     electric power production purposes, or
       ``(iv) differentials in ocean temperature (ocean thermal 
     energy conversion).
       ``(B) Exceptions.--Such term shall not include any energy 
     which is derived from any source which utilizes a dam, 
     diversionary structure (except as provided in subparagraph 
     (A)(iii)), or impoundment for electric power production 
     purposes.''.
       (3) Definition of facility.--Subsection (d) of section 45 
     is amended by adding at the end the following new paragraph:
       ``(11) Marine and hydrokinetic renewable energy 
     facilities.--In the case of a facility producing electricity 
     from marine and hydrokinetic renewable energy, the term 
     `qualified facility' means any facility owned by the 
     taxpayer--
       ``(A) which has a nameplate capacity rating of at least 150 
     kilowatts, and
       ``(B) which is originally placed in service on or after the 
     date of the enactment of this paragraph and before January 1, 
     2010.''.
       (4) Credit rate.--Subparagraph (A) of section 45(b)(4) is 
     amended by striking ``or (9)'' and inserting ``(9), or 
     (11)''.
       (5) Coordination with small irrigation power.--Paragraph 
     (5) of section 45(d), as amended by subsection (a), is 
     amended by striking ``January 1, 2010'' and inserting ``the 
     date of the enactment of paragraph (11)''.
       (c) Sales of Electricity to Regulated Public Utilities 
     Treated as Sales to Unrelated Persons.--Section 45(e)(4) 
     (relating to related persons) is amended by adding at the end 
     the following new sentence: ``A taxpayer shall be treated as 
     selling electricity to an unrelated person if such 
     electricity is sold to a regulated public utility (as defined 
     in section 7701(a)(33).''.
       (d) Trash Facility Clarification.--Paragraph (7) of section 
     45(d) is amended--
       (1) by striking ``facility which burns'' and inserting 
     ``facility (other than a facility described in paragraph (6)) 
     which uses'', and
       (2) by striking ``combustion''.
       (e) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) shall 
     apply to property originally placed in service after December 
     31, 2008.
       (2) Modifications.--The amendments made by subsections (b) 
     and (c) shall apply to electricity produced and sold after 
     the date of the enactment of this Act, in taxable years 
     ending after such date.
       (3) Trash facility clarification.--The amendments made by 
     subsection (d) shall apply to electricity produced and sold 
     before, on, or after December 31, 2007.

     SEC. 1012. EXTENSION AND MODIFICATION OF SOLAR ENERGY AND 
                   FUEL CELL INVESTMENT TAX CREDIT.

       (a) Extension of Credit.--
       (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) (relating to energy credit) are 
     each amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2017''.
       (2) Fuel cell property.--Subparagraph (E) of section 
     48(c)(1) (relating to qualified fuel cell property) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2017''.
       (3) Qualified microturbine property.--Subparagraph (E) of 
     section 48(c)(2) (relating to qualified microturbine 
     property) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2017''.
       (b) Allowance of Energy Credit Against Alternative Minimum 
     Tax.--Subparagraph (B) of section 38(c)(4) (relating to 
     specified credits) is amended by striking ``and'' at the end 
     of clause (iii), by striking the period at the end of clause 
     (iv) and inserting ``, and'', and by adding at the end the 
     following new clause:
       ``(v) the credit determined under section 46 to the extent 
     that such credit is attributable to the energy credit 
     determined under section 48.''.
       (c) Repeal of Dollar Per Kilowatt Limitation for Fuel Cell 
     Property.--
       (1) In general.--Section 48(c)(1) (relating to qualified 
     fuel cell), as amended by subsection (a)(2), is amended by 
     striking subparagraph (B) and by redesignating subparagraphs 
     (C), (D), and (E) as subparagraphs (B), (C), and (D), 
     respectively.
       (2) Conforming amendment.--Section 48(a)(1) is amended by 
     striking ``paragraphs (1)(B) and (2)(B) of subsection (c)'' 
     and inserting ``subsection (c)(2)(B)''.
       (d) Public Electric Utility Property Taken Into Account.--
       (1) In general.--Paragraph (3) of section 48(a) is amended 
     by striking the second sentence thereof.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 48(c), as amended by this 
     section, is amended by striking subparagraph (C) and 
     redesignating subparagraph (D) as subparagraph (C).
       (B) Paragraph (2) of section 48(c), as amended by 
     subsection (a)(3), is amended by striking subparagraph (D) 
     and redesignating subparagraph (E) as subparagraph (D).
       (e) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) shall 
     take effect on the date of the enactment of this Act.
       (2) Allowance against alternative minimum tax.--The 
     amendments made by subsection (b) shall apply to credits 
     determined under section 46 of the Internal Revenue Code of 
     1986 in taxable years beginning after the date of the 
     enactment of this Act and to carrybacks of such credits.
       (3) Fuel cell property and public electric utility 
     property.--The amendments made by subsections (c) and (d) 
     shall apply to periods after the date of the enactment of 
     this Act, in taxable years ending after such date, under 
     rules similar to the rules of section 48(m) of the Internal 
     Revenue Code of 1986 (as in effect on the day before the date 
     of the enactment of the Revenue Reconciliation Act of 1990).

     SEC. 1013. EXTENSION AND MODIFICATION OF RESIDENTIAL ENERGY 
                   EFFICIENT PROPERTY CREDIT.

       (a) Extension.--Section 25D(g) (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) No Dollar Limitation for Credit for Solar Electric 
     Property.--
       (1) In general.--Section 25D(b)(1) (relating to maximum 
     credit) is amended by striking subparagraph (A) and by 
     redesignating subparagraphs (B) and (C) as subparagraphs (A) 
     and (B), respectively.
       (2) Conforming amendments.--Section 25D(e)(4) is amended--
       (A) by striking clause (i) in subparagraph (A),
       (B) by redesignating clauses (ii) and (iii) in subparagraph 
     (A) as clauses (i) and (ii), respectively, and
       (C) by striking ``, (2),'' in subparagraph (C).
       (c) Credit Allowed Against Alternative Minimum Tax.--
       (1) In general.--Subsection (c) of section 25D is amended 
     to read as follows:
       ``(c) Limitation Based on Amount of Tax; Carryforward of 
     Unused Credit.--
       ``(1) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for the taxable year 
     shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section) and section 27 for the taxable 
     year.
       ``(2) Carryforward of unused credit.--
       ``(A) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) exceeds the limitation 
     imposed by section 26(a)(2) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(B) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such succeeding 
     taxable year.''.
       (2) Conforming amendments.--
       (A) Section 23(b)(4)(B) is amended by inserting ``and 
     section 25D'' after ``this section''.
       (B) Section 24(b)(3)(B) is amended by striking ``and 25B'' 
     and inserting ``, 25B, and 25D''.
       (C) Section 25B(g)(2) is amended by striking ``section 23'' 
     and inserting ``sections 23 and 25D''.
       (D) Section 26(a)(1) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25D''.
       (d) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after December 31, 2007.
       (2) Application of egtrra sunset.--The amendments made by 
     subparagraphs (A) and (B) of subsection (c)(2) shall be 
     subject to title IX of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 in the same manner as the 
     provisions of such Act to which such amendments relate.

     SEC. 1014. EXTENSION AND MODIFICATION OF CREDIT FOR CLEAN 
                   RENEWABLE ENERGY BONDS.

       (a) Extension.--Section 54(m) (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Increase in National Limitation.--Section 54(f) 
     (relating to limitation on amount of bonds designated) is 
     amended--
       (1) by inserting ``, and for the period beginning after the 
     date of the enactment of the Clean Energy Tax Stimulus Act of 
     2008 and ending before January 1, 2010, $400,000,000'' after 
     ``$1,200,000,000'' in paragraph (1),

[[Page 8170]]

       (2) by striking ``$750,000,000 of the'' in paragraph (2) 
     and inserting ``$750,000,000 of the $1,200,000,000'', and
       (3) by striking ``bodies'' in paragraph (2) and inserting 
     ``bodies, and except that the Secretary may not allocate more 
     than \1/3\ of the $400,000,000 national clean renewable 
     energy bond limitation to finance qualified projects of 
     qualified borrowers which are public power providers nor more 
     than \1/3\ of such limitation to finance qualified projects 
     of qualified borrowers which are mutual or cooperative 
     electric companies described in section 501(c)(12) or section 
     1381(a)(2)(C)''.
       (c) Public Power Providers Defined.--Section 54(j) is 
     amended--
       (1) by adding at the end the following new paragraph:
       ``(6) Public power provider.--The term `public power 
     provider' means a State utility with a service obligation, as 
     such terms are defined in section 217 of the Federal Power 
     Act (as in effect on the date of the enactment of this 
     paragraph).'', and
       (2) by inserting ``; Public Power Provider'' before the 
     period at the end of the heading.
       (d) Technical Amendment.--The third sentence of section 
     54(e)(2) is amended by striking ``subsection (l)(6)'' and 
     inserting ``subsection (l)(5)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 1015. EXTENSION OF SPECIAL RULE TO IMPLEMENT FERC 
                   RESTRUCTURING POLICY.

       (a) Qualifying Electric Transmission Transaction.--
       (1) In general.--Section 451(i)(3) (defining qualifying 
     electric transmission transaction) is amended by striking 
     ``January 1, 2008'' and inserting ``January 1, 2010''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to transactions after December 31, 2007.
       (b) Independent Transmission Company.--
       (1) In general.--Section 451(i)(4)(B)(ii) (defining 
     independent transmission company) is amended by striking 
     ``December 31, 2007'' and inserting ``the date which is 2 
     years after the date of such transaction''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the amendments made by 
     section 909 of the American Jobs Creation Act of 2004.

    Subtitle B--Extension of Incentives to Improve Energy Efficiency

     SEC. 1021. EXTENSION AND MODIFICATION OF CREDIT FOR ENERGY 
                   EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

       (a) Extension of Credit.--Section 25C(g) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Qualified Biomass Fuel Property.--
       (1) In general.--Section 25C(d)(3) is amended--
       (A) by striking ``and'' at the end of subparagraph (D),
       (B) by striking the period at the end of subparagraph (E) 
     and inserting ``, and'', and
       (C) by adding at the end the following new subparagraph:
       ``(F) a stove which uses the burning of biomass fuel to 
     heat a dwelling unit located in the United States and used as 
     a residence by the taxpayer, or to heat water for use in such 
     a dwelling unit, and which has a thermal efficiency rating of 
     at least 75 percent.''.
       (2) Biomass fuel.--Section 25C(d) (relating to residential 
     energy property expenditures) is amended by adding at the end 
     the following new paragraph:
       ``(6) Biomass fuel.--The term `biomass fuel' means any 
     plant-derived fuel available on a renewable or recurring 
     basis, including agricultural crops and trees, wood and wood 
     waste and residues (including wood pellets), plants 
     (including aquatic plants), grasses, residues, and fibers.''.
       (c) Modifications of Standards for Energy-Efficient 
     Building Property.--
       (1) Electric heat pumps.--Subparagraph (B) of section 
     25C(d)(3) is amended to read as follows:
       ``(A) an electric heat pump which achieves the highest 
     efficiency tier established by the Consortium for Energy 
     Efficiency, as in effect on January 1, 2008.''.
       (2) Central air conditioners.--Section 25C(d)(3)(D) is 
     amended by striking ``2006'' and inserting ``2008''.
       (3) Water heaters.--Subparagraph (E) of section 25C(d) is 
     amended to read as follows:
       ``(E) a natural gas, propane, or oil water heater which has 
     either an energy factor of at least 0.80 or a thermal 
     efficiency of at least 90 percent.''.
       (4) Oil furnaces and hot water boilers.--Paragraph (4) of 
     section 25C(d) is amended to read as follows:
       ``(4) Qualified natural gas, propane, and oil furnaces and 
     hot water boilers.--
       ``(A) Qualified natural gas furnace.--The term `qualified 
     natural gas furnace' means any natural gas furnace which 
     achieves an annual fuel utilization efficiency rate of not 
     less than 95.
       ``(B) Qualified natural gas hot water boiler.--The term 
     `qualified natural gas hot water boiler' means any natural 
     gas hot water boiler which achieves an annual fuel 
     utilization efficiency rate of not less than 90.
       ``(C) Qualified propane furnace.--The term `qualified 
     propane furnace' means any propane furnace which achieves an 
     annual fuel utilization efficiency rate of not less than 95.
       ``(D) Qualified propane hot water boiler.--The term 
     `qualified propane hot water boiler' means any propane hot 
     water boiler which achieves an annual fuel utilization 
     efficiency rate of not less than 90.
       ``(E) Qualified oil furnaces.--The term `qualified oil 
     furnace' means any oil furnace which achieves an annual fuel 
     utilization efficiency rate of not less than 90.
       ``(F) Qualified oil hot water boiler.--The term `qualified 
     oil hot water boiler' means any oil hot water boiler which 
     achieves an annual fuel utilization efficiency rate of not 
     less than 90.''.
       (d) Effective Date.--The amendments made this section shall 
     apply to expenditures made after December 31, 2007.

     SEC. 1022. EXTENSION AND MODIFICATION OF TAX CREDIT FOR 
                   ENERGY EFFICIENT NEW HOMES.

       (a) Extension of Credit.--Subsection (g) of section 45L 
     (relating to termination) is amended by striking ``December 
     31, 2008'' and inserting ``December 31, 2010''.
       (b) Allowance for Contractor's Personal Residence.--
     Subparagraph (B) of section 45L(a)(1) is amended to read as 
     follows:
       ``(B)(i) acquired by a person from such eligible contractor 
     and used by any person as a residence during the taxable 
     year, or
       ``(ii) used by such eligible contractor as a residence 
     during the taxable year.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to homes acquired after December 31, 2008.

     SEC. 1023. EXTENSION AND MODIFICATION OF ENERGY EFFICIENT 
                   COMMERCIAL BUILDINGS DEDUCTION.

       (a) Extension.--Section 179D(h) (relating to termination) 
     is amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Adjustment of Maximum Deduction Amount.--
       (1) In general.--Subparagraph (A) of section 179D(b)(1) 
     (relating to maximum amount of deduction) is amended by 
     striking ``$1.80'' and inserting ``$2.25''.
       (2) Partial allowance.--Paragraph (1) of section 179D(d) is 
     amended--
       (A) by striking ``$.60'' and inserting ``$0.75'', and
       (B) by striking ``$1.80'' and inserting ``$2.25''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 1024. MODIFICATION AND EXTENSION OF ENERGY EFFICIENT 
                   APPLIANCE CREDIT FOR APPLIANCES PRODUCED AFTER 
                   2007.

       (a) In General.--Subsection (b) of section 45M (relating to 
     applicable amount) is amended to read as follows:
       ``(b) Applicable Amount.--For purposes of subsection (a)--
       ``(1) Dishwashers.--The applicable amount is--
       ``(A) $45 in the case of a dishwasher which is manufactured 
     in calendar year 2008 or 2009 and which uses no more than 324 
     kilowatt hours per year and 5.8 gallons per cycle, and
       ``(B) $75 in the case of a dishwasher which is manufactured 
     in calendar year 2008, 2009, or 2010 and which uses no more 
     than 307 kilowatt hours per year and 5.0 gallons per cycle 
     (5.5 gallons per cycle for dishwashers designed for greater 
     than 12 place settings).
       ``(2) Clothes washers.--The applicable amount is--
       ``(A) $75 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 which meets or 
     exceeds a 1.72 modified energy factor and does not exceed a 
     8.0 water consumption factor,
       ``(B) $125 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 or 2009 which meets 
     or exceeds a 1.8 modified energy factor and does not exceed a 
     7.5 water consumption factor,
       ``(C) $150 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.0 modified energy factor and 
     does not exceed a 6.0 water consumption factor, and
       ``(D) $250 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.2 modified energy factor and 
     does not exceed a 4.5 water consumption factor.
       ``(3) Refrigerators.--The applicable amount is--
       ``(A) $50 in the case of a refrigerator which is 
     manufactured in calendar year 2008, and consumes at least 20 
     percent but not more than 22.9 percent less kilowatt hours 
     per year than the 2001 energy conservation standards,
       ``(B) $75 in the case of a refrigerator which is 
     manufactured in calendar year 2008 or 2009, and consumes at 
     least 23 percent but no more than 24.9 percent less kilowatt 
     hours per year than the 2001 energy conservation standards,
       ``(C) $100 in the case of a refrigerator which is 
     manufactured in calendar year 2008, 2009, or 2010, and 
     consumes at least 25 percent but not more than 29.9 percent 
     less kilowatt hours per year than the 2001 energy 
     conservation standards, and
       ``(D) $200 in the case of a refrigerator manufactured in 
     calendar year 2008, 2009, or 2010 and which consumes at least 
     30 percent less energy than the 2001 energy conservation 
     standards.''.
       (b) Eligible Production.--
       (1) Similar treatment for all appliances.--Subsection (c) 
     of section 45M (relating to eligible production) is amended--
       (A) by striking paragraph (2),

[[Page 8171]]

       (B) by striking ``(1) In general'' and all that follows 
     through ``the eligible'' and inserting ``The eligible'', and
       (C) by moving the text of such subsection in line with the 
     subsection heading and redesignating subparagraphs (A) and 
     (B) as paragraphs (1) and (2), respectively.
       (2) Modification of base period.--Paragraph (2) of section 
     45M(c), as amended by paragraph (1) of this section, is 
     amended by striking ``3-calendar year'' and inserting ``2-
     calendar year''.
       (c) Types of Energy Efficient Appliances.--Subsection (d) 
     of section 45M (defining types of energy efficient 
     appliances) is amended to read as follows:
       ``(d) Types of Energy Efficient Appliance.--For purposes of 
     this section, the types of energy efficient appliances are--
       ``(1) dishwashers described in subsection (b)(1),
       ``(2) clothes washers described in subsection (b)(2), and
       ``(3) refrigerators described in subsection (b)(3).''.
       (d) Aggregate Credit Amount Allowed.--
       (1) Increase in limit.--Paragraph (1) of section 45M(e) 
     (relating to aggregate credit amount allowed) is amended to 
     read as follows:
       ``(1) Aggregate credit amount allowed.--The aggregate 
     amount of credit allowed under subsection (a) with respect to 
     a taxpayer for any taxable year shall not exceed $75,000,000 
     reduced by the amount of the credit allowed under subsection 
     (a) to the taxpayer (or any predecessor) for all prior 
     taxable years beginning after December 31, 2007.''.
       (2) Exception for certain refrigerator and clothes 
     washers.--Paragraph (2) of section 45M(e) is amended to read 
     as follows:
       ``(2) Amount allowed for certain refrigerators and clothes 
     washers.--Refrigerators described in subsection (b)(3)(D) and 
     clothes washers described in subsection (b)(2)(D) shall not 
     be taken into account under paragraph (1).''.
       (e) Qualified Energy Efficient Appliances.--
       (1) In general.--Paragraph (1) of section 45M(f) (defining 
     qualified energy efficient appliance) is amended to read as 
     follows:
       ``(1) Qualified energy efficient appliance.--The term 
     `qualified energy efficient appliance' means--
       ``(A) any dishwasher described in subsection (b)(1),
       ``(B) any clothes washer described in subsection (b)(2), 
     and
       ``(C) any refrigerator described in subsection (b)(3).''.
       (2) Clothes washer.--Section 45M(f)(3) (defining clothes 
     washer) is amended by inserting ``commercial'' before 
     ``residential'' the second place it appears.
       (3) Top-loading clothes washer.--Subsection (f) of section 
     45M (relating to definitions) is amended by redesignating 
     paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), 
     (7), and (8), respectively, and by inserting after paragraph 
     (3) the following new paragraph:
       ``(4) Top-loading clothes washer.--The term `top-loading 
     clothes washer' means a clothes washer which has the clothes 
     container compartment access located on the top of the 
     machine and which operates on a vertical axis.''.
       (4) Replacement of energy factor.--Section 45M(f)(6), as 
     redesignated by paragraph (3), is amended to read as follows:
       ``(6) Modified energy factor.--The term `modified energy 
     factor' means the modified energy factor established by the 
     Department of Energy for compliance with the Federal energy 
     conservation standard.''.
       (5) Gallons per cycle; water consumption factor.--Section 
     45M(f) (relating to definitions), as amended by paragraph 
     (3), is amended by adding at the end the following:
       ``(9) Gallons per cycle.--The term `gallons per cycle' 
     means, with respect to a dishwasher, the amount of water, 
     expressed in gallons, required to complete a normal cycle of 
     a dishwasher.
       ``(10) Water consumption factor.--The term `water 
     consumption factor' means, with respect to a clothes washer, 
     the quotient of the total weighted per-cycle water 
     consumption divided by the cubic foot (or liter) capacity of 
     the clothes washer.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2007.

                     TITLE XI--SENSE OF THE SENATE

     SEC. 1101. SENSE OF THE SENATE.

       It is the sense of the Senate that in implementing or 
     carrying out any provision of this Act, or any amendment made 
     by this Act, the Senate supports a policy of noninterference 
     regarding local government requirements that the holder of a 
     foreclosed property maintain that property.
       Amend the title so as to read: ``An Act to provide needed 
     housing reform and for other purposes.''.


              Motion Offered by Mr. Frank of Massachusetts

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

       Motion offered by Mr. Frank of Massachusetts:
       Mr. Frank of Massachusetts moves that the House concur in 
     the Senate amendment to the text of H.R. 3221 with each of 
     the three amendments printed in the report of the Committee 
     on Rules accompanying House Resolution 1175.

  The text of House amendment No. 1 to the Senate amendment is as 
follows:

       In the matter proposed to be inserted by the amendment of 
     the Senate to the text of the bill, strike section 1 and all 
     that follows through the end of title V and insert the 
     following:

     SEC. 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``American 
     Housing Rescue and Foreclosure Prevention Act of 2008''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.

     TITLE I--FHA HOUSING STABILIZATION AND HOMEOWNERSHIP RETENTION

Sec. 101. Short title.

                  Subtitle A--Homeownership Retention

Sec. 111. Purposes.
Sec. 112. Insurance of homeownership retention mortgages.
Sec. 113. Study of Auction or Bulk Refinance Program.
Sec. 114. Temporary increase in maximum loan guaranty amount for 
              certain housing loans guaranteed by Secretary of Veterans 
              Affairs.
Sec. 115. Study of possible accounting revisions relating to property 
              at risk of foreclosure and the availability of credit for 
              refinancing home mortgages at risk of foreclosure.
Sec. 116. GAO study of the effect of tightening credit markets in 
              communities affected by the subprime mortgage foreclosure 
              crises and predatory lending on prospective first-time 
              homebuyers seeking mortgages.

                Subtitle B--Office of Housing Counseling

Sec. 131. Short title.
Sec. 132. Establishment of Office of Housing Counseling.
Sec. 133. Counseling procedures.
Sec. 134. Grants for housing counseling assistance.
Sec. 135. Requirements to use HUD-certified counselors under HUD 
              programs.
Sec. 136. Study of defaults and foreclosures.
Sec. 137. Definitions for counseling-related programs.
Sec. 138. Updating and simplification of mortgage information booklet.

                  Subtitle C--Combating Mortgage Fraud

Sec. 151. Authorization of appropriations to combat mortgage fraud.

     TITLE II--FHA REFORM AND MANUFACTURED HOUSING LOAN INSURANCE 
                             MODERNIZATION

                         Subtitle A--FHA Reform

Sec. 201. Short title.
Sec. 202. Findings and purposes.
Sec. 203. Maximum principal loan obligation.
Sec. 204. Extension of mortgage term.
Sec. 205. Downpayment simplification.
Sec. 206. Mortgage insurance premiums for qualified homeownership 
              assistance entities and higher-risk borrowers.
Sec. 207. Risk-based mortgage insurance premiums.
Sec. 208. Payment incentives for higher-risk borrowers.
Sec. 209. Protections for higher-risk borrowers.
Sec. 210. Refinancing mortgages.
Sec. 211. Annual reports on new programs and loss mitigation.
Sec. 212. Insurance for single family homes with licensed child care 
              facilities.
Sec. 213. Rehabilitation loans.
Sec. 214. Discretionary action.
Sec. 215. Insurance of condominiums and manufactured housing.
Sec. 216. Mutual Mortgage Insurance Fund.
Sec. 217. Hawaiian home lands and Indian reservations.
Sec. 218. Conforming and technical amendments.
Sec. 219. Home equity conversion mortgages.
Sec. 220. Study on participation of mortgage brokers and correspondent 
              lenders.
Sec. 221. Conforming loan limit in disaster areas.
Sec. 222. Failure to pay amounts from escrow accounts for single family 
              mortgages.
Sec. 223. Acceptable identification for FHA mortgagors.
Sec. 224. Pilot program for automated process for borrowers without 
              sufficient credit history.
Sec. 225. Sense of Congress regarding technology for financial systems.
Sec. 226. Clarification of disposition of certain properties.
Sec. 227. Valuation of multifamily properties in noncompetitive sales 
              by HUD to states and localities.
Sec. 228. Limitation on mortgage insurance premium increases.

[[Page 8172]]

Sec. 229. Civil money penalties for improperly influencing appraisals.
Sec. 230. Mortgage insurance premium refunds.
Sec. 231. Savings provision.
Sec. 232. Implementation.

   Subtitle B--FHA Manufactured Housing Loan Insurance Modernization

Sec. 251. Short title.
Sec. 252. Findings and purposes.
Sec. 253. Exception to limitation on financial institution portfolio.
Sec. 254. Insurance benefits.
Sec. 255. Maximum loan limits.
Sec. 256. Insurance premiums.
Sec. 257. Technical corrections.
Sec. 258. Revision of underwriting criteria.
Sec. 259. Requirement of social security account number for assistance.
Sec. 260. GAO study of mitigation of tornado risks to manufactured 
              homes.

 TITLE III--REFORM OF GOVERNMENT-SPONSORED ENTITIES FOR HOUSING FINANCE

Sec. 301. Short title.
Sec. 302. Definitions.

 Subtitle A--Reform of Regulation of Enterprises and Federal Home Loan 
                                 Banks

             Chapter 1--Improvement of Safety and Soundness

Sec. 311. Establishment of the Federal Housing Finance Agency.
Sec. 312. Duties and authorities of Director.
Sec. 313. Federal Housing Enterprise Board.
Sec. 314. Authority to require reports by regulated entities.
Sec. 315. Disclosure of income and charitable contributions by 
              enterprises.
Sec. 316. Assessments.
Sec. 317. Examiners and accountants.
Sec. 318. Prohibition and withholding of executive compensation.
Sec. 319. Reviews of regulated entities.
Sec. 320. Inclusion of minorities and women; diversity in Agency 
              workforce.
Sec. 321. Regulations and orders.
Sec. 322. Non-waiver of privileges.
Sec. 323. Risk-based capital requirements.
Sec. 324. Minimum and critical capital levels.
Sec. 325. Review of and authority over enterprise assets and 
              liabilities.
Sec. 326. Corporate governance of enterprises.
Sec. 327. Required registration under Securities Exchange Act of 1934.
Sec. 328. Liaison with Financial Institutions Examination Council.
Sec. 329. Guarantee fee study.
Sec. 330. Conforming amendments.

             Chapter 2--Improvement of Mission Supervision

Sec. 331. Transfer of product approval and housing goal oversight.
Sec. 332. Review of enterprise products.
Sec. 333. Conforming loan limits.
Sec. 334. Annual housing report regarding regulated entities.
Sec. 335. Annual reports by regulated entities on affordable housing 
              stock.
Sec. 336. Mortgagor identification requirements for mortgages of 
              regulated entities.
Sec. 337. Revision of housing goals.
Sec. 338. Duty to serve underserved markets.
Sec. 339. Monitoring and enforcing compliance with housing goals.
Sec. 340. Affordable Housing Fund.
Sec. 341. Consistency with mission.
Sec. 342. Enforcement.
Sec. 343. Conforming amendments.

                  Chapter 3--Prompt Corrective Action

Sec. 345. Capital classifications.
Sec. 346. Supervisory actions applicable to undercapitalized regulated 
              entities.
Sec. 347. Supervisory actions applicable to significantly 
              undercapitalized regulated entities.
Sec. 348. Authority over critically undercapitalized regulated 
              entities.
Sec. 349. Conforming amendments.

                     Chapter 4--Enforcement Actions

Sec. 351. Cease-and-desist proceedings.
Sec. 352. Temporary cease-and-desist proceedings.
Sec. 353. Prejudgment attachment.
Sec. 354. Enforcement and jurisdiction.
Sec. 355. Civil money penalties.
Sec. 356. Removal and prohibition authority.
Sec. 357. Criminal penalty.
Sec. 358. Subpoena authority.
Sec. 359. Conforming amendments.

                     Chapter 5--General Provisions

Sec. 361. Boards of enterprises.
Sec. 362. Report on portfolio operations, safety and soundness, and 
              mission of enterprises.
Sec. 363. Conforming and technical amendments.
Sec. 364. Study of alternative secondary market systems.
Sec. 365. Effective date.

                  Subtitle B--Federal Home Loan Banks

Sec. 371. Definitions.
Sec. 372. Directors.
Sec. 373. Federal Housing Finance Agency oversight of Federal Home Loan 
              Banks.
Sec. 374. Joint activities of Banks.
Sec. 375. Sharing of information between Federal Home Loan Banks.
Sec. 376. Reorganization of Banks and voluntary merger.
Sec. 377. Securities and Exchange Commission disclosure.
Sec. 378. Community financial institution members.
Sec. 379. Technical and conforming amendments.
Sec. 380. Study of affordable housing program use for long-term care 
              facilities.
Sec. 381. Effective date.

Subtitle C--Transfer of Functions, Personnel, and Property of Office of 
 Federal Housing Enterprise Oversight, Federal Housing Finance Board, 
            and Department of Housing and Urban Development

       Chapter 1--Office of Federal Housing Enterprise Oversight

Sec. 385. Abolishment of OFHEO.
Sec. 386. Continuation and coordination of certain regulations.
Sec. 387. Transfer and rights of employees of OFHEO.
Sec. 388. Transfer of property and facilities.

                Chapter 2--Federal Housing Finance Board

Sec. 391. Abolishment of the Federal Housing Finance Board.
Sec. 392. Continuation and coordination of certain regulations.
Sec. 393. Transfer and rights of employees of the Federal Housing 
              Finance Board.
Sec. 394. Transfer of property and facilities.

         Chapter 3--Department of Housing and Urban Development

Sec. 395. Termination of enterprise-related functions.
Sec. 396. Continuation and coordination of certain regulations.
Sec. 397. Transfer and rights of employees of Department of Housing and 
              Urban Development.
Sec. 398. Transfer of appropriations, property, and facilities.

             TITLE IV--EMERGENCY MORTGAGE LOAN MODIFICATION

Sec. 401. Short title.
Sec. 402. Safe harbor for qualified loan modifications or workout plans 
              for certain residential mortgage loans.

                   TITLE V--OTHER HOUSING PROVISIONS

Sec. 501. Depository Institution Community Development Investments 
              Enhancement .
Sec. 502. Preservation of certain affordable housing dwelling units.
Sec. 503. Eligibility of certain projects for enhanced voucher 
              assistance.
Sec. 504. Transfer of certain rental assistance contracts.
Sec. 505. Protection against discriminatory treatment.

     TITLE I--FHA HOUSING STABILIZATION AND HOMEOWNERSHIP RETENTION

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``FHA Housing Stabilization 
     and Homeownership Retention Act of 2008''.

                  Subtitle A--Homeownership Retention

     SEC. 111. PURPOSES.

       The purposes of this subtitle are--
       (1) to create an FHA program, which is voluntary on the 
     part of borrowers and existing mortgage loan holders, 
     including both existing senior mortgage loan holders and 
     existing subordinate mortgage loan holders, to insure 
     refinance loans for substantial numbers of borrowers at risk 
     of foreclosure, at levels which are reasonably likely to be 
     sustainable through enhanced affordability of debt service;
       (2) to provide flexible underwriting for FHA-insured loans 
     under such a program to provide refinancing opportunities 
     under fiscally responsible terms, including higher fees 
     commensurate with higher risk levels, a seasoning requirement 
     for higher debt to income loans, and additional program 
     controls to limit and control risk;
       (3) to bar speculators and second home owners from 
     participation in such program;
       (4) to require existing mortgage loan holders to take 
     substantial loan writedowns in exchange for having the 
     Federal Government and the borrower assume the ongoing risk 
     of the refinanced loan;
       (5) to set a loan-to-value limit on such loans that 
     provides the FHA with an equity buffer against potential loan 
     losses, provides protections against the risk of future home 
     price declines, and creates incentives for borrowers to 
     maintain payments on the loan;
       (6) to protect the FHA against losses which may exceed 
     normal FHA loss levels by establishing higher fee levels, 
     including an exit fee and profit sharing during the first 
     five years of the loan, with such higher fee levels 
     effectively being funded through the required lender 
     writedown;
       (7) to provide a fair level of incentives for junior lien 
     holders to provide the necessary releases of their lien 
     interests, in order to meet program requirements that all 
     outstanding liens must be extinguished, and thereby permit 
     the refinancing to be completed;
       (8) to enhance the administrative capacity of the FHA to 
     carry out its expanded role under the program through 
     establishment of an Oversight Board which adds expertise

[[Page 8173]]

     from the Federal Reserve and the Department of the Treasury, 
     through additional funding to contract out for the provision 
     of any needed expertise in designing program requirements and 
     oversight, and through additional funding to increase FHA 
     personnel resources as needed to handle the increased loan 
     volume resulting from the program;
       (9) to sunset the program when it is no longer needed; and
       (10) to study the need for and efficacy of an auction or 
     bulk refinancing mechanism to facilitate more expeditious 
     refinancing of larger volumes of existing mortgages that are 
     at risk for foreclosure into FHA-insured mortgages.

     SEC. 112. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

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

     ``SEC. 257. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

       ``(a) Oversight Board.--
       ``(1) Establishment.--There is hereby established the 
     Refinance Program Oversight Board (in this section referred 
     to as the `Oversight Board').
       ``(2) Membership.--The Oversight Board shall consist of the 
     following members or their designees:
       ``(A) The Secretary of the Treasury.
       ``(B) The Secretary of Housing and Urban Development.
       ``(C) The Chairman of the Board of Governors of the Federal 
     Reserve System.
       ``(3) No additional compensation.--Members of the Oversight 
     Board shall receive no additional pay by reason of service on 
     the Oversight Board.
       ``(4) Responsibilities.--The Oversight Board shall be 
     responsible for establishing program and oversight 
     requirements for the program under this section, which shall 
     include--
       ``(A) detailed program requirements under subsection (c);
       ``(B) flexible underwriting criteria under subsection (d);
       ``(C) a mortgage premium structure under subsection (e);
       ``(D) a reasonable fee and rate limitation under subsection 
     (f);
       ``(E) enhancement of FHA capacity under subsection (i), 
     including oversight of such activities and personnel as may 
     be contracted for as provided therein;
       ``(F) monitoring of underwriting risk under subsection (j); 
     and
       ``(G) such additional requirements as may be necessary and 
     appropriate to oversee and implement the program.
       ``(5) Use of resources.--In carrying out its functions 
     under this section, the Oversight Board may utilize, with 
     their consent and to the extent practical, the personnel, 
     services, and facilities of the Department of the Treasury, 
     the Department of Housing and Urban Development, the Board of 
     Governors of the Federal Reserve System, the Federal Reserve 
     Banks, and other Federal agencies, with or without 
     reimbursement therefore.
       ``(b) Authority.--
       ``(1) In general.--The Secretary shall, subject only to the 
     absence of qualified requests for insurance under this 
     section and to the limitations under subsection (h) of this 
     section and section 531(a), make commitments to insure and 
     insure any mortgage covering a 1- to 4-family residence that 
     is made for the purpose of paying or prepaying outstanding 
     obligations under an existing mortgage or mortgages on the 
     residence if the mortgage being insured under this section 
     meets the requirements of this section, as established by the 
     Oversight Board, and of section 203, except as modified by 
     this section.
       ``(2) Establishment and implementation of program 
     requirements.--The Oversight Board shall establish program 
     requirements and standards under this section and the 
     Secretary shall implement such requirements and standards. 
     The Oversight Board and the Secretary may establish and 
     implement any requirements or standards through interim 
     guidance and mortgagee letters.
       ``(c) Requirements.--To be eligible for insurance under 
     this section, a mortgage shall comply with all of the 
     following requirements:
       ``(1) Owner-occupied principal residence requirement.--The 
     residence securing the mortgage insured under this section 
     shall be occupied by the mortgagor as the principal residence 
     of the mortgagor and the mortgagor shall provide a 
     certification to the originator of the mortgage that such 
     residence securing the mortgage insured under this section is 
     the only residence in which the mortgagor has any present 
     ownership interest. With regard to such certification, the 
     Oversight Board may create exceptions for mortgagors who have 
     only a partial ownership interest in a residence other than 
     the residence securing the mortgage insured under this 
     section.
       ``(2) Lack of capacity to pay existing mortgage or 
     mortgages.--
       ``(A) Borrower certification.--
       ``(i) The mortgagor shall provide a certification to the 
     originator of the mortgage that the mortgagor--

       ``(I) has not intentionally defaulted on the existing 
     mortgage or mortgages; and
       ``(II) has not knowingly, or willfully and with actual 
     knowledge furnished material information known to be false 
     for the purpose of obtaining the existing mortgage or 
     mortgages.

       ``(ii) The mortgagor shall agree in writing that the 
     mortgagor shall be liable to repay the FHA any direct 
     financial benefit achieved from the reduction of indebtedness 
     on the existing mortgage or mortgages on the residence 
     refinanced under this section derived from misrepresentations 
     made in the certifications and documentation required under 
     this subparagraph, subject to the discretion of the Oversight 
     Board.
       ``(B) Current borrower debt-to-income ratio.--As of March 
     1, 2008, the mortgagor shall have had a ratio of mortgage 
     debt to income, taking into consideration all existing 
     mortgages at such time, greater than 35 percent.
       ``(C) Loss mitigation responsibilities.--This section may 
     not be construed to alter or in any way affect the 
     responsibilities of any party (including the mortgage 
     servicer) to engage in any or all loan modification or other 
     loss mitigation strategies to maximize value to investors as 
     established by any applicable contract.
       ``(3) Eligibility of mortgages by date of origination.--The 
     existing senior mortgage shall have been originated on or 
     before December 31, 2007.
       ``(4) Maximum loan-to-value ratio for new loans.--The 
     mortgage being insured under this section shall involve a 
     principal obligation (including such initial service charges, 
     appraisal, inspection, and other fees as the Secretary shall 
     approve and including the mortgage insurance premium paid 
     pursuant to subsection (e)(1)) in an amount not to exceed 90 
     percent of the current appraised value of the property. 
     Section 203(d) shall not apply to mortgages insured under 
     this section.
       ``(5) Required waiver of prepayment penalties and fees.--
     All penalties for prepayment of the existing mortgage or 
     mortgages, and all fees and penalties related to default or 
     delinquency on all existing mortgages or mortgages, shall be 
     waived or forgiven.
       ``(6) Required loan reduction.--
       ``(A) Reduction of indebtedness under existing senior 
     mortgage.--The amount of indebtedness on the existing 
     mortgage or mortgages on the residence shall have been 
     substantially reduced by such percentage as the Oversight 
     Board may require, and such reduction shall be at least 
     sufficient to--
       ``(i) provide for the refinancing of such existing mortgage 
     or mortgages in an amount not greater than 90 percent of the 
     current appraised value of the property involved;
       ``(ii) pay the full amount of the single premium to be 
     collected pursuant to subsection (e)(1) (which shall be an 
     amount equal to 3.0 percent of the amount of the original 
     insured principal obligation of the mortgage insured under 
     this section and which shall serve as an additional reserve 
     to cover possible loan losses); and
       ``(iii) pay the full amount of the loan origination fee and 
     any other closing costs, not to exceed 2.0 percent of the 
     amount of the original insured principal obligation of the 
     mortgage insured under this section.
       ``(B) Extinguishment of debt by refinancing.--
       ``(i) Required agreement.--All existing holders of mortgage 
     liens on the property securing the mortgage to be insured 
     under this section shall agree to accept the proceeds of the 
     insured loan as payment in full of all indebtedness under all 
     existing mortgages, and all encumbrances related to such 
     mortgages shall be removed. The Oversight Board may take such 
     actions as the Oversight Board considers necessary or 
     appropriate to facilitate coordination and agreement between 
     the holders of the existing senior mortgage and any existing 
     subordinate mortgages, taking into consideration the 
     subordinate lien status of such subordinate mortgages, to 
     comply with the requirement under this subparagraph.
       ``(ii) Treatment of multiple mortgage liens.--In addition 
     to clause (i), the Oversight Board shall adopt one of the 
     following approaches for all mortgages or such classes of 
     mortgages as the Oversight Board may determine and may, from 
     time to time, reconsider:

       ``(I) Fixed price.--As a requirement for participating in 
     this program, all existing lien holders will agree to not 
     provide any payment to subordinate lien holders other than 
     such payment in accordance with a formula established by the 
     Oversight Board as set forth in clause (iii); except that the 
     Oversight Board may establish a short period within which 
     first and subordinate lien holders may negotiate to 
     extinguish all subordinate liens for compensation that may be 
     different from the amount determined under such formula set 
     forth in clause (iii).
       ``(II) Shared equity.--The Oversight Board may require the 
     mortgagor under a mortgage insured under this section to 
     agree to share a portion of any future equity in the 
     mortgaged property with holders of existing subordinate 
     mortgages, in accordance with a formula for such shared 
     equity established by the Oversight Board as set forth in 
     clause (iii), except that payments of such shared equity may 
     be made only after the Secretary recovers all amounts owed to 
     the Secretary with respect to such mortgage pursuant to

[[Page 8174]]

     the program under this section (including amounts owed 
     pursuant to paragraph (8)).

       ``(iii) Formula.--In determining a formula for determining 
     any payments to subordinate lien holders pursuant to 
     subclauses (I) and (II) of clause (ii), and in any 
     reconsideration of such formula as the Oversight Board may 
     from time to time undertake, the Oversight Board shall take 
     into consideration the current market value of such liens. In 
     no case may a formula provide for the payment of more than 1 
     percent of the current appraised value of the mortgaged 
     property to a subordinate lien holder if the outstanding 
     balance owed to more senior lien holders is equal to or 
     exceeds such current appraised value.
       ``(iv) Voluntary program.--This section may not be 
     construed to require any holder of any existing mortgage to 
     participate in the program under this section generally, or 
     with respect to any particular loan.
       ``(v) Source of payments for subordinate loans.--Any 
     amounts paid to holders of any existing subordinate mortgages 
     in connection with the origination and insurance of a 
     mortgage under this section shall derive only from--

       ``(I) the holder of the existing senior mortgage; or
       ``(II) in the case only of the shared equity approach under 
     clause (ii)(II), the mortgagor under the mortgage insured 
     under this section

       ``(7) Required reduction of debt service.--The debt service 
     payments due under the mortgage insured under this section 
     shall be in an amount that is substantially reduced from the 
     debt service payments due under the existing mortgage or 
     mortgages, which reduction may be achieved through a 
     reduction of indebtedness, a reduction in the interest rate 
     being paid, or an extension of the term of the mortgage, or 
     any combination thereof.
       ``(8) Financial recovery to federal government through exit 
     premium.--
       ``(A) Subordinate lien.--The mortgage shall provide that 
     the Secretary shall retain a lien on the residence involved, 
     which shall be subordinate to the mortgage insured under this 
     section but senior to all other mortgages on the residence 
     that may exist at any time, and which shall secure the 
     repayment of the amount due under subparagraph (D).
       ``(B) No interest or payment during mortgage.--The amount 
     secured by the lien retained by the Secretary pursuant to 
     subparagraph (A) shall not bear interest and shall not be 
     repayable to the Secretary except as provided in subparagraph 
     (D) of this paragraph.
       ``(C) Net proceeds available for exit premium.--Upon the 
     sale, refinancing, or other disposition of the residence 
     securing a mortgage insured under this section, any proceeds 
     resulting from such disposition that remain after deducting 
     the remaining insured principal balance of the mortgage 
     insured under this section shall be available to meet the 
     obligation under subparagraph (D). In the case of a 
     refinance, non-arms length transaction, or such other 
     transaction as the Oversight Board shall determine, the 
     proceeds shall be based on the current appraised value at the 
     time of the refinance or transaction.
       ``(D) Exit premium.--Upon any refinancing of the mortgage 
     insured under this section or any sale or disposition of the 
     residence securing the mortgage, the Secretary shall, subject 
     to the availability of sufficient net proceeds described in 
     subparagraph (C), receive the greater of--
       ``(i) 3 percent of the amount of the original insured 
     principal obligation of the mortgage (or the entire amount of 
     the net proceeds described in subparagraph (C) if such net 
     proceeds are less than 3 percent of the amount of the 
     original insured principal obligation of the mortgage); or
       ``(ii) a percentage of the portion of the net proceeds 
     available for profit-sharing, as described in subparagraph 
     (E), which shall be--

       ``(I) in the case of any refinancing, sale, or disposition 
     occurring during the first year of the term of the mortgage, 
     100 percent of such net proceeds;
       ``(II) in the case of any refinancing, sale, or disposition 
     occurring during the second year of the term of the mortgage, 
     80 percent;
       ``(III) in the case of any refinancing, sale, or 
     disposition occurring during the third year of the term of 
     the mortgage, 60 percent; and
       ``(IV) in the case of any refinancing, sale, or disposition 
     occurring during the fourth year of the term of the mortgage 
     or at any time thereafter, 50 percent;

     except that such percentage of proceeds shall be reduced by 
     all fees the Secretary has collected for the mortgage prior 
     to such refinancing, sale, or disposition.
       ``(E) Net proceeds available for profit-sharing.--With 
     respect to any mortgage insured under this section, the net 
     proceeds available for purposes of subparagraph (D)(ii) shall 
     be any proceeds resulting from the sale, refinancing, or 
     other disposition of the residence securing the mortgage that 
     remain after deducting the original insured principal 
     obligation of the mortgage. In the case of a refinance, non-
     arms length transaction, or such other transaction as the 
     Oversight Board shall determine, the proceeds shall be based 
     on the current appraised value at the time of the refinance 
     or transaction.
       ``(F) Authority to prohibit new second liens.--The 
     Oversight Board shall prohibit borrowers from granting a new 
     second lien on the mortgaged property during the first five 
     years of the term of the mortgage insured under this section, 
     except as the Oversight Board determines to be necessary to 
     ensure the appropriate maintenance of the mortgaged property.
       ``(9) Documentation and verification of income.--In 
     complying with the FHA underwriting requirements under the 
     program under this section, the mortgagee shall document and 
     verify the income of the mortgagor or non-filing status by 
     procuring (A) an income tax return transcript of the income 
     tax returns of the mortgagor, or (B) a copy of the income tax 
     returns for the Internal Revenue Service, for the two most 
     recent years for which the filing deadline for such years has 
     passed and by any other method, in accordance with procedures 
     and standards that the Oversight Board shall establish.
       ``(10) Fixed rate mortgage.--The mortgage insured under 
     this section shall bear interest at a single rate that is 
     fixed for the entire term of the mortgage.
       ``(11) Maximum loan amount.--Notwithstanding section 
     203(b)(2), the mortgage being insured under this section 
     shall involve a principal obligation in an amount that does 
     not exceed the limitation (for a property of the applicable 
     size) on the amount of the principal obligation that would be 
     allowable under the terms of section 202(a) of the Economic 
     Stimulus Act of 2008 if the mortgage were insured pursuant to 
     such section. The limitation on the amount of the principal 
     obligation allowable under such Act shall apply for the 
     purposes of this section until the termination under 
     subsection (n) of the program under this section.
       ``(12) Ineligibility for fraud conviction.--The mortgagor 
     shall not have been convicted under Federal or State law for 
     mortgage fraud during the 7-year period ending upon the 
     insurance of the mortgage under this section.
       ``(13) Lender review.--The mortgagee under the mortgage 
     shall conduct an electronic database search of the 
     mortgagor's criminal history to determine if the mortgagor 
     has had a conviction described in paragraph (12). The 
     mortgagee may charge the mortgagor a reasonable fee for the 
     actual cost of the search not to exceed a maximum rate 
     established by the Oversight Board. The Oversight Board may 
     provide clarification, if needed, to help mortgagees identify 
     any differences among the States in how they report mortgage 
     fraud convictions. The Oversight Board shall establish 
     procedures sufficient to allow the mortgagor to challenge a 
     mortgagee's determination with respect to paragraph (12) 
     (including to correct inaccuracies resulting from theft of 
     the mortgagor's identity or personally identifiable 
     information).
       ``(14) Appraisals.--Any appraisal conducted in connection 
     with a mortgage insured under this section shall--
       ``(A) be based on the current value of the property;
       ``(B) be conducted in accordance with title XI of the 
     Financial Institutions Reform, Recovery, and Enforcement Act 
     of 1989 (12 U.S.C. 3331 et seq.);
       ``(C) be completed by an appraiser who meets the competency 
     requirements of the Uniform Standards of Professional 
     Appraisal Practice;
       ``(D) be wholly consistent with the appraisal standards, 
     practices, and procedures under section 202(e) of this Act 
     that apply to all loans insured under this Act; and
       ``(E) comply with the requirements of subsection (g) of 
     this section (relating to appraisal independence).
       ``(15) Statement of loan terms.--
       ``(A) Requirement.--The mortgagor shall have been provided 
     by the mortgagee, not later than three days before closing 
     for the mortgage, a form described in subparagraph (B) 
     appropriately and accurately completed by the mortgagee.
       ``(B) Form.--The form described in this subparagraph shall 
     be a single page, written disclosure regarding the mortgage 
     loan to be insured under this section that, when completed by 
     the mortgagee, sets forth, in accordance with such 
     requirements as the Secretary shall by regulation establish a 
     best possible estimate of--
       ``(i) the total loan amount under the mortgage;
       ``(ii) the loan-to-value ratio for the mortgage;
       ``(iii) the final maturity date for the mortgage;
       ``(iv) the amount of any prepayment fee to be charged if 
     the mortgage is paid in full before the final maturity date 
     for the mortgage, including the percentages of any net 
     proceeds to be received by the Secretary pursuant to 
     paragraph (8)(D)(ii);
       ``(v) the amount of the exit premium under the mortgage 
     pursuant to subsection (e)(3);
       ``(vi) the interest rate under the mortgage expressed as an 
     annual percentage rate, and the amount of the monthly payment 
     due under such rate;
       ``(vii) the fully indexed rate of interest under the 
     mortgage expressed as an annual percentage rate and the 
     amount of the monthly payment due under such rate;

[[Page 8175]]

       ``(viii) the monthly household income of the borrower upon 
     which the mortgage is based;
       ``(ix) the amount of the monthly payment due under the 
     mortgage, and the amount of such initial monthly payment plus 
     monthly amounts due for taxes and insurance on the property 
     for which the mortgage is made, both expressed as a 
     percentage of the monthly household income of the borrower; 
     and
       ``(x) the aggregate amount of settlement charges for all 
     settlement services provided in connection with the mortgage, 
     the amount of such charges that are included in the principal 
     amount and the amount of such charges the borrower must pay 
     at closing, the aggregate amount of mortgagee's fees 
     connection with the mortgage, and the aggregate amount of 
     other fees or required payments in connection with the 
     mortgage.
       ``(d) Flexible Underwriting Criteria.--
       ``(1) In general.--The Oversight Board shall establish, and 
     the Secretary acting on behalf of the Oversight Board shall 
     implement, underwriting standards for mortgages insured under 
     this section that--
       ``(A) ensure that each mortgagor under a mortgage insured 
     under this section has a reasonable expectation of repaying 
     the mortgage, taking into consideration the mortgagor's 
     income, assets, liabilities, payment history, and other 
     applicable criteria, but which shall not result in a denial 
     of insurance solely on the basis of the mortgagor's current 
     FICO or other credit scores, or any delinquency or default by 
     the mortgagor under the existing mortgage or mortgages, or 
     any case filed under title 11, United States Code, by the 
     mortgagor; and
       ``(B) subject to the provisions of subparagraph (A), permit 
     a total debt-to-income ratio of up to 43 percent.
       ``(2) Exception.--
       ``(A) In general.--Subject to the underwriting standards 
     established under paragraph (1)(A) and any additional 
     requirements that the Oversight Board considers appropriate, 
     the Oversight Board shall permit a total debt-to-income ratio 
     of more than 43 percent, but not more than 50 percent, if the 
     mortgagor has made, on a timely basis before the endorsement 
     of the mortgage insured under this section, not less than six 
     months of payments in an amount not less than the amount of 
     the monthly payment due under the mortgage to be insured 
     under this section. The holder of the existing senior 
     mortgage shall exercise forbearance with respect to such 
     mortgage during the period in which such payments are made.
       ``(B) Computation of debt-to-income ratio.-- In computing 
     the mortgagor's total debt-to-income ratio for purposes of 
     mortgage qualification under the underwriting standards 
     established pursuant to this section--
       ``(i) if the mortgagor is a debtor in a case under chapter 
     13 of title 11, United States Code, payments on recurring 
     debts other than housing expenses shall be based on the 
     amounts being paid on such debts under the mortgagor's 
     confirmed plan under such chapter; and
       ``(ii) if the mortgagor is a debtor in a case under chapter 
     7 of title 11, United States Code, recurring debts that are 
     to be discharged in that case shall not be considered.
       ``(3) Authority.--The Oversight Board may alter the ratios 
     under this subsection for a particular class of borrowers 
     subject to such requirements as the Board determines is 
     necessary and appropriate to fulfill the purposes of this 
     Act.
       ``(4) Representations and warranties.--The Oversight Board 
     shall require the underwriter of the insured loan to provide 
     such representations and warranties as the Oversight Board 
     considers necessary or appropriate for the Secretary to 
     enforce compliance with all underwriting and appraisal 
     standards of the program.
       ``(e) Premiums.--For each mortgage insured under this 
     section, the Oversight Board shall establish and the 
     Secretary shall collect--
       ``(1) at the time of insurance, a single premium payment in 
     an amount equal to 3.0 percent of the amount of the original 
     insured principal obligation of the mortgage, which shall be 
     paid from the proceeds of the mortgage being insured under 
     this section, through the reduction of the amount of 
     indebtedness on the existing senior mortgage required under 
     subsection (c)(6)(A);
       ``(2) in addition to the premium under paragraph (1), 
     annual premium payments in an amount equal to 1.50 percent of 
     the remaining insured principal balance of the mortgage; and
       ``(3) an exit premium in the amount determined under 
     subsection (c)(8), but which shall not be less than 3.0 
     percent of the original insured principal obligation of the 
     mortgage, subject only to the availability of sufficient net 
     proceeds from sale, refinancing, or other disposition of the 
     property, as determined in subsection (c)(8).
       ``(f) Origination Fees and Mortgage Rate.--The Oversight 
     Board shall establish and the Secretary shall implement a 
     reasonable limitation on origination fees for mortgages 
     insured under this section and shall establish procedures to 
     ensure that interest rates on such mortgages shall be 
     commensurate with market rate interest rates on such types of 
     loans.
       ``(g) Appraisal Independence.--
       ``(1) Prohibitions on interested parties in a real estate 
     transaction.--No mortgage lender, mortgage broker, mortgage 
     banker, real estate broker, appraisal management company, 
     employee of an appraisal management company, nor any other 
     person with an interest in a real estate transaction 
     involving an appraisal in connection with a mortgage insured 
     under this section shall improperly influence, or attempt to 
     improperly influence, through coercion, extortion, collusion, 
     compensation, instruction, inducement, intimidation, non-
     payment for services rendered, or bribery, the development, 
     reporting, result, or review of a real estate appraisal 
     sought in connection with the mortgage.
       ``(2) Exceptions.--The requirements of paragraph (1) shall 
     not be construed as prohibiting a mortgage lender, mortgage 
     broker, mortgage banker, real estate broker, appraisal 
     management company, employee of an appraisal management 
     company, or any other person with an interest in a real 
     estate transaction from asking an appraiser to provide 1 or 
     more of the following services:
       ``(A) Consider additional, appropriate property 
     information, including the consideration of additional 
     comparable properties to make or support an appraisal.
       ``(B) Provide further detail, substantiation, or 
     explanation for the appraiser's value conclusion.
       ``(C) Correct errors in the appraisal report.
       ``(3) Civil monetary penalties.--The Secretary may impose a 
     civil money penalty for any knowing and material violation of 
     paragraph (1) under the same terms and conditions as are 
     authorized in section 536(a) of this Act.
       ``(h) Limitation on Aggregate Insurance Authority.--The 
     aggregate original principal obligation of all mortgages 
     insured under this section may not exceed $300,000,000,000.
       ``(i) Enhancement of FHA Capacity.--Under the direction of 
     the Oversight Board, the Secretary shall take such actions as 
     may be necessary to--
       ``(1) contract for the establishment of underwriting 
     criteria, automated underwriting systems, pricing standards, 
     and other factors relating to eligibility for mortgages 
     insured under this section;
       ``(2) contract for independent quality reviews of 
     underwriting, including appraisal reviews and fraud 
     detection, of mortgages insured under this section or pools 
     of such mortgages; and
       ``(3) increase personnel of the Department as necessary to 
     process or monitor the processing of mortgages insured under 
     this section.
       ``(j) Monitoring of Underwriting Risk.--
       ``(1) Monitoring of designated underwriters.--The Oversight 
     Board and the Secretary shall monitor independent quality 
     reviews as established pursuant to subsection (i)(2) to--
       ``(A) determine compliance of designated underwriters with 
     underwriting standards;
       ``(B) determine rates of delinquency, claims rates, and 
     loss rates of designated underwriters; and
       ``(C) terminate eligibility of designated underwriters that 
     do not meet minimum performance standards as the Oversight 
     Board may establish and the Secretary implements.
       ``(2) Reports by oversight board.--The Oversight Board 
     shall submit monthly reports to the Congress identifying the 
     progress of the program for mortgage insurance under this 
     section, which shall contain the following information for 
     each month:
       ``(A) The number of new mortgages insured under this 
     section, including the location of the properties subject to 
     such mortgages by census tract.
       ``(B) The aggregate principal obligation of new mortgages 
     insured under this section.
       ``(C) The average amount by which the indebtedness on 
     existing mortgages is reduced in accordance with subsection 
     (c)(6).
       ``(D) The average amount by which the debt service payments 
     on existing mortgages is reduced in accordance with 
     subsection (c)(7).
       ``(E) The amount of premiums collected for insurance of 
     mortgages under this section.
       ``(F) The claim and loss rates for mortgages insured under 
     this section.
       ``(G) The race, ethnicity, gender, and income of the 
     mortgagors, aggregated by geographical areas at least as 
     specific as census tracts, except where necessary to protect 
     privacy of the borrower.
       ``(H) Any other information that the Oversight Board 
     considers appropriate.
       ``(3) Report by inspector general.--The Inspector General 
     of the Department of Housing and Urban Development shall 
     conduct an annual audit of the program for mortgage insurance 
     under this section to determine compliance with this section 
     and program rules.
       ``(k) GNMA Commitment Authority.--
       ``(1) Guarantees.--The Secretary shall take such actions as 
     may be necessary to ensure that securities based on and 
     backed by a trust or pool composed of mortgages insured under 
     this section are available to be guaranteed by the Government 
     National Mortgage Association as to the timely payment of 
     principal and interest.
       ``(2) Guarantee authority.--To carry out the purposes of 
     section 306 of the National

[[Page 8176]]

     Housing Act (12 U.S.C. 1721), the Government National 
     Mortgage Association may enter into new commitments to issue 
     guarantees of securities based on or backed by mortgages 
     insured under this section, not exceeding $300,000,000,000. 
     The amount of authority provided under the preceding sentence 
     to enter into new commitments to issue guarantees is in 
     addition to any amount of authority to make new commitments 
     to issue guarantees that is provided to the Association under 
     any other provision of law.
       ``(l) Special Risk Insurance Fund.--The insurance of each 
     mortgage under this section shall be the obligation of the 
     Special Risk Insurance Fund established by section 238.
       ``(m) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Existing mortgage.--The term `existing mortgage' 
     means, with respect to a mortgage insured under this section, 
     a mortgage that is to be extinguished, and paid or prepaid, 
     from the proceeds of the mortgage insured under this section.
       ``(2) Existing senior mortgage.--The term `existing senior 
     mortgage' means, with respect to a mortgage insured under 
     this section, the existing mortgage that has superior 
     priority.
       ``(3) Existing subordinate mortgage.--The term `existing 
     subordinate mortgage' means, with respect to a mortgage 
     insured under this section, an existing mortgage that has 
     subordinate priority to the existing senior mortgage.
       ``(n) Sunset.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     authority of the Secretary to make any new commitment to 
     insure any mortgage under this section shall terminate upon 
     the expiration of the 2-year period beginning on the date of 
     the enactment of the FHA Housing Stabilization and 
     Homeownership Retention Act of 2008.
       ``(2) Extensions.--The Oversight Board may, not more than 
     four times, extend the authority to enter into new 
     commitments to insure mortgages under this section beyond the 
     date specified in paragraph (1), except that each such 
     extension shall--
       ``(A) be effective only if, before the program terminates 
     pursuant to paragraph (1) or any previous extension pursuant 
     to this paragraph, the Oversight Board--
       ``(i) certifies the need for such extension in writing to 
     the Congress; and
       ``(ii) causes notice of such extension to be published in 
     the Federal Register no later than the beginning of the 3-
     month period that ends upon the scheduled termination date of 
     the program; and
       ``(B) be for a period of not more than 6 months.
       ``(o) Authorizations of Appropriations.--There is 
     authorized to be appropriated for each of fiscal years 2008 
     and 2009--
       ``(1) $230,000,000 for providing counseling regarding loss 
     mitigation for mortgagors with 1- to 4-family residences, 
     including determining eligibility for the program under this 
     section, with grants to be administered through the 
     Neighborhood Reinvestment Corporation, except that--
       ``(A) funds shall be targeted to States and communities 
     based on their levels of foreclosures and delinquencies in 
     2007 and 2008;
       ``(B) not less than 15 percent of the funds made available 
     pursuant to this paragraph shall be provided to counseling 
     organizations that target counseling services regarding loss 
     mitigation to minority and low-income homeowners or provide 
     such services in neighborhoods with high concentrations of 
     minority and low-income homeowners;
       ``(C) $35,000,000 of the funds made available pursuant to 
     this paragraph shall be used by the Neighborhood Reinvestment 
     Corporation (referred to in this subparagraph as the `NRC') 
     to make grants to State and local legal organizations or 
     attorneys that have demonstrated legal experience in home 
     foreclosure or eviction law to provide legal assistance 
     related to home ownership preservation, home foreclosure 
     prevention, and tenancy associated with home foreclosure or 
     to counseling intermediaries that have been approved by the 
     Department of Housing and Urban Development for the purpose 
     of making such grants or contracting for such legal 
     assistance; of the amount provided under this subparagraph, 
     at least 60 percent shall be allocated for legal assistance 
     to low-income homeowners or tenants; such attorneys shall be 
     capable of assisting homeowners in owner-occupied homes or 
     tenants who live in homes with mortgages in default, in 
     danger of default, or subject to or at risk of foreclosure or 
     eviction and who have legal issues that cannot be handled by 
     counselors employed by NRC intermediaries; in using the 
     amount made available under this subparagraph, the NRC shall 
     give priority consideration to State and local legal 
     organizations and attorneys that (i) provide legal assistance 
     in the 100 metropolitan statistical areas (as defined by the 
     Director of the Office of Management and Budget) with the 
     highest home foreclosure rates, and (ii) have the capacity to 
     begin using the financial assistance within 90 days after 
     receipt of the assistance; as a condition of the receipt of a 
     grant under this subparagraph, the grantee shall submit to 
     NRC information relating to the demographic characteristics 
     of the assisted homeowners or tenants, the dollar amount and 
     terms of the relevant mortgages and the outcome of legal 
     proceedings related to the foreclosure or eviction 
     proceedings, including the resolutions thereof; except that 
     no funds under this subparagraph shall be used for class 
     action litigation;
       ``(D) $20,000,000 of the funds made available pursuant to 
     this paragraph shall be used for such counseling for veterans 
     recently returning from active duty in the Armed Forces;
       ``(E) the NRC shall give priority consideration for funding 
     with amounts made available pursuant to this paragraph, 
     except for funds made available under subparagraphs (B), (C), 
     and (D), to entities that have an effective plan in place for 
     making contact, including personal contact, with defaulted 
     mortgagors, and such a plan may include use of third parties 
     (including both for-profit and not-for-profit entities) to 
     make personal contact with defaulted mortgagors, or visits to 
     such mortgagors, or both;
       ``(F) except with respect to funds reserved under 
     subparagraphs (B), (C), and (D), the NRC shall give priority 
     consideration for funding with amounts made available 
     pursuant to this paragraph to entities that have a written 
     plan that has been implemented for providing in-person 
     counseling and for making contact, including personal 
     contact, with defaulted mortgagors, for the purpose of 
     providing counseling or providing information about available 
     counseling, both (i) prior to commencement of any foreclosure 
     proceedings, and (ii) in the event effective in person or 
     phone contact has not been made with such defaulted 
     mortgagors prior thereto, then prior to the conclusion of the 
     foreclosure process; and
       ``(G) not less than 2 percent of the funds made available 
     pursuant to this paragraph shall be used only for identifying 
     and notifying borrowers under existing mortgages who are 
     eligible under this section for insurance of refinancing 
     mortgages, and in making funds reserved under this 
     subparagraph available for such purpose, the Secretary shall 
     give preference to assistance for programs that have a proven 
     history of outreach within minority communities; and
       ``(2) $150,000,000 for costs of activities under subsection 
     (i).
       ``(p) Audit and Report by Inspector General.--
       ``(1) Audit.--The Inspector General of the Department of 
     Housing and Urban Development shall conduct an audit of the 
     program for loss mitigation counseling funded with amounts 
     made available under subsection (o)(1) to determine 
     compliance with such subsection.
       ``(2) Reports to congress.--Not later than March 30, 2009, 
     and every calendar quarter thereafter, the Inspector General 
     shall submit to the appropriate committees of the Congress a 
     report summarizing the activities of the Inspector General 
     and the Neighborhood Reinvestment Corporation during the 120-
     day period ending on the date of such report. Each report 
     shall include, for the period covered by such report, a 
     detailed statement of all obligations, expenditures, and 
     revenues associated with paragraphs (1) and (2) of subsection 
     (o), including--
       ``(A) obligations and expenditures of appropriated funds;
       ``(B) the number of homeowners eligible in such program;
       ``(C) the number of homeowners participating in such 
     program;
       ``(D) the status of homeowners within such program;
       ``(E) the number of homeowners who have rejected assistance 
     from the Neighborhood Reinvestment Corporation; and
       ``(F) information on participating counseling services.''.
       (b) Special Risk Insurance Fund.--Section 238 of the 
     National Housing Act (12 U.S.C. 1715z-3) is amended--
       (1) in subsection (a)(1), by striking ``or 243'' each place 
     such term appears and inserting ``243, or 257''; and
       (2) in subsection (b), by striking ``and 243'' each place 
     such term appears and inserting ``243, and 257''.
       (c) FHA Reverse Mortgage Program.--Section 255(g) of the 
     National Housing Act (12 U.S.C. 1715z-20(g)) is amended by 
     striking the first sentence.

     SEC. 113. STUDY OF AUCTION OR BULK REFINANCE PROGRAM.

       (a) Study.--The Board of Governors of the Federal Reserve 
     System (in this section referred to as the ``Board of 
     Governors''), in consultation with other members of the 
     Oversight Board established by section 257(a) of the National 
     Housing Act (as added by the amendment made by section 112(a) 
     of this title), shall conduct a study of the need for and 
     efficacy of an auction or bulk refinancing mechanism to 
     facilitate refinancing of existing residential mortgages that 
     are at risk for foreclosure into mortgages insured under the 
     mortgage insurance program under title II of the National 
     Housing Act. The study shall identify and examine various 
     options for mechanisms under which lenders and servicers of 
     such mortgages may make bids for forward commitments for such 
     insurance in an expedited manner.
       (b) Content.--
       (1) Analysis.--The study required under subsection (a) 
     shall analyze--
       (A) the feasibility of establishing a mechanism that would 
     facilitate the more rapid refinancing of borrowers at risk of 
     foreclosure

[[Page 8177]]

     into performing mortgages insured under title II of the 
     National Housing Act;
       (B) whether such a mechanism would provide an effective and 
     efficient mechanism to reduce foreclosures on qualified 
     existing mortgages;
       (C) whether the use of an auction or bulk refinance program 
     is necessary to stabilize the housing market and reduce the 
     impact of turmoil in that market on the economy of the United 
     States;
       (D) whether there are other mechanisms or authority that 
     would be useful to reduce foreclosure; and
       (E) and any other factors that the Board of Governors 
     considers relevant.
       (2) Determinations.--To the extent that the Board of 
     Governors finds that a facility of the type described in 
     paragraph (1) is feasible and useful, the study shall--
       (A) determine and identify any additional authority or 
     resources needed to establish and operate such a mechanism;
       (B) determine whether there is a need for additional 
     authority with respect to the loan underwriting criteria 
     included in the amendment made by section 112(a) of this 
     title or with respect to eligibility of participating 
     borrowers, lenders, or holders of liens;
       (C) determine whether such underwriting criteria should be 
     established on the basis of individual loans, in the 
     aggregate, or otherwise to facilitate the goal of refinancing 
     borrowers at risk of foreclosure into viable loans insured 
     under the National Housing Act.
       (c) Report.--Not later than the expiration of the 60-day 
     period beginning on the date of the enactment of this Act, 
     the Board of Governors shall submit a report regarding the 
     results of the study conducted under this section to the 
     Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate. The report shall include a 
     detailed description of the analysis required under 
     subsection (b)(1) and of the determinations made pursuant to 
     subsection (b)(2), and shall include any other findings and 
     recommendations of the Board of Governors pursuant to the 
     study, including identifying various options for mechanisms 
     described in subsection (a).

     SEC. 114. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT 
                   FOR CERTAIN HOUSING LOANS GUARANTEED BY 
                   SECRETARY OF VETERANS AFFAIRS.

       Notwithstanding subparagraph (C) of section 3703(a)(1) of 
     title 38, United States Code, for purposes of any loan 
     described in subparagraph (A)(i)(IV) of such section that is 
     originated during the period beginning on the date of the 
     enactment of this Act and ending on December 31, 2008, the 
     term ``maximum guaranty amount'' shall mean an amount equal 
     to 25 percent of the higher of--
       (1) the limitation determined under section 305(a)(2) of 
     the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1454(a)(2)) for the calendar year in which the loan is 
     originated for a single-family residence; or
       (2) 125 percent of the area median price for a single-
     family residence, but in no case to exceed 175 percent of the 
     limitation determined under such section 305(a)(2) for the 
     calendar year in which the loan is originated for a single-
     family residence.

     SEC. 115. STUDY OF POSSIBLE ACCOUNTING REVISIONS RELATING TO 
                   PROPERTY AT RISK OF FORECLOSURE AND THE 
                   AVAILABILITY OF CREDIT FOR REFINANCING HOME 
                   MORTGAGES AT RISK OF FORECLOSURE.

       (a) Study Required.--The Securities and Exchange 
     Commission, in consultation with the Board of Governors of 
     the Federal Reserve System, shall conduct a study on fair 
     value accounting standards applicable to financial 
     institutions, including depository institutions, with respect 
     to their residential mortgages that are at risk of 
     foreclosure and mortgage-backed securities involving such 
     mortgages, the effects of such accounting standards on a 
     financial institution's balance sheet and capacity to provide 
     refinancing to residential mortgagors that are at risk of 
     foreclosure and to residential mortgagors during periods of 
     market value declines and increased foreclosures, and the 
     advisability and feasibility of modifications of such 
     standards during periods of market fluctuation in order to 
     maintain the ability of the institution to continue to carry 
     mortgages on residential property at risk of foreclosure and 
     assure the availability of credit to refinance at-risk 
     residential mortgages.
       (b) Report Required.--The Securities and Exchange 
     Commission shall submit a report to the Congress before the 
     end of the 90-day period beginning on the date of the 
     enactment of this Act containing the findings and 
     determinations of the Commission with respect to the study 
     conducted under subsection (a) and such administrative and 
     legislative recommendations as the Commission may determine 
     to be appropriate.

     SEC. 116. GAO STUDY OF THE EFFECT OF TIGHTENING CREDIT 
                   MARKETS IN COMMUNITIES AFFECTED BY THE SUBPRIME 
                   MORTGAGE FORECLOSURE CRISES AND PREDATORY 
                   LENDING ON PROSPECTIVE FIRST-TIME HOMEBUYERS 
                   SEEKING MORTGAGES.

       The Comptroller General of the United States shall conduct 
     a study to analyze the effects of tightening credit markets 
     on prospective first-time home buyers who reside in selected 
     communities that have been most detrimentally affected by 
     both the current subprime mortgage foreclosure crisis and 
     predatory mortgage lending. Such study shall also analyze the 
     adequacy of financial literacy outreach efforts by agencies 
     of the Federal Government tasked with implementing financial 
     literacy education in such communities and shall assess 
     whether the current funding levels for such efforts are at 
     sufficient levels to reduce the levels of subprime mortgage 
     delinquencies and foreclosures and to increase the level of 
     financial literacy in the selected communities so as to 
     minimize the incidences of predatory mortgage lending. Not 
     later than the expiration of the 6-month period beginning on 
     the date of the enactment of this Act, the Comptroller 
     General shall submit a report to the Congress setting forth 
     the results of the study and including recommendations 
     regarding such funding levels.

                Subtitle B--Office of Housing Counseling

     SEC. 131. SHORT TITLE.

       This subtitle may be cited as the ``Expand and Preserve 
     Home Ownership Through Counseling Act''.

     SEC. 132. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING.

       Section 4 of the Department of Housing and Urban 
     Development Act (42 U.S.C. 3533) is amended by adding at the 
     end the following new subsection:
       ``(g) Office of Housing Counseling.--
       ``(1) Establishment.--There is established, in the Office 
     of the Secretary, the Office of Housing Counseling.
       ``(2) Director.--There is established the position of 
     Director of Housing Counseling. The Director shall be the 
     head of the Office of Housing Counseling and shall be 
     appointed by the Secretary. Such position shall be a career-
     reserved position in the Senior Executive Service.
       ``(3) Functions.--
       ``(A) In general.--The Director shall have ultimate 
     responsibility within the Department, except for the 
     Secretary, for all activities and matters relating to 
     homeownership counseling and rental housing counseling, 
     including--
       ``(i) research, grant administration, public outreach, and 
     policy development relating to such counseling; and
       ``(ii) establishment, coordination, and administration of 
     all regulations, requirements, standards, and performance 
     measures under programs and laws administered by the 
     Department that relate to housing counseling, homeownership 
     counseling (including maintenance of homes), mortgage-related 
     counseling (including home equity conversion mortgages and 
     credit protection options to avoid foreclosure), and rental 
     housing counseling, including the requirements, standards, 
     and performance measures relating to housing counseling.
       ``(B) Specific functions.--The Director shall carry out the 
     functions assigned to the Director and the Office under this 
     section and any other provisions of law. Such functions shall 
     include establishing rules necessary for--
       ``(i) the counseling procedures under section 106(g)(1) of 
     the Housing and Urban Development Act of 1968 (12 U.S.C. 
     1701x(h)(1));
       ``(ii) carrying out all other functions of the Secretary 
     under section 106(g) of the Housing and Urban Development Act 
     of 1968, including the establishment, operation, and 
     publication of the availability of the toll-free telephone 
     number under paragraph (2) of such section;
       ``(iii) carrying out section 5 of the Real Estate 
     Settlement Procedures Act of 1974 (12 U.S.C. 2604) for home 
     buying information booklets prepared pursuant to such 
     section;
       ``(iv) carrying out the certification program under section 
     106(e) of the Housing and Urban Development Act of 1968 (12 
     U.S.C. 1701x(e));
       ``(v) carrying out the assistance program under section 
     106(a)(4) of the Housing and Urban Development Act of 1968, 
     including criteria for selection of applications to receive 
     assistance;
       ``(vi) carrying out any functions regarding abusive, 
     deceptive, or unscrupulous lending practices relating to 
     residential mortgage loans that the Secretary considers 
     appropriate, which shall include conducting the study under 
     section 136 of the Expand and Preserve Home Ownership Through 
     Counseling Act;
       ``(vii) providing for operation of the advisory committee 
     established under paragraph (4) of this subsection;
       ``(viii) collaborating with community-based organizations 
     with expertise in the field of housing counseling; and
       ``(ix) providing for the building of capacity to provide 
     housing counseling services in areas that lack sufficient 
     services.
       ``(4) Advisory committee.--
       ``(A) In general.--The Secretary shall appoint an advisory 
     committee to provide advice regarding the carrying out of the 
     functions of the Director.
       ``(B) Members.--Such advisory committee shall consist of 
     not more than 12 individuals, and the membership of the 
     committee shall equally represent all aspects of the mortgage 
     and real estate industry, including consumers.
       ``(C) Terms.--Except as provided in subparagraph (D), each 
     member of the advisory

[[Page 8178]]

     committee shall be appointed for a term of 3 years. Members 
     may be reappointed at the discretion of the Secretary.
       ``(D) Terms of initial appointees.--As designated by the 
     Secretary at the time of appointment, of the members first 
     appointed to the advisory committee, 4 shall be appointed for 
     a term of 1 year and 4 shall be appointed for a term of 2 
     years.
       ``(E) Prohibition of pay; travel expenses.--Members of the 
     advisory committee shall serve without pay, but shall receive 
     travel expenses, including per diem in lieu of subsistence, 
     in accordance with applicable provisions under subchapter I 
     of chapter 57 of title 5, United States Code.
       ``(F) Advisory role only.--The advisory committee shall 
     have no role in reviewing or awarding housing counseling 
     grants.
       ``(5) Scope of homeownership counseling.--In carrying out 
     the responsibilities of the Director, the Director shall 
     ensure that homeownership counseling provided by, in 
     connection with, or pursuant to any function, activity, or 
     program of the Department addresses the entire process of 
     homeownership, including the decision to purchase a home, the 
     selection and purchase of a home, issues arising during or 
     affecting the period of ownership of a home (including 
     refinancing, default and foreclosure, and other financial 
     decisions), and the sale or other disposition of a home.''.

     SEC. 133. COUNSELING PROCEDURES.

       (a) In General.--Section 106 of the Housing and Urban 
     Development Act of 1968 (12 U.S.C. 1701x) is amended by 
     adding at the end the following new subsection:
       ``(g) Procedures and Activities.--
       ``(1) Counseling procedures.--
       ``(A) In general.--The Secretary shall establish, 
     coordinate, and monitor the administration by the Department 
     of Housing and Urban Development of the counseling procedures 
     for homeownership counseling and rental housing counseling 
     provided in connection with any program of the Department, 
     including all requirements, standards, and performance 
     measures that relate to homeownership and rental housing 
     counseling.
       ``(B) Homeownership counseling.--For purposes of this 
     subsection and as used in the provisions referred to in this 
     subparagraph, the term `homeownership counseling' means 
     counseling related to homeownership and residential mortgage 
     loans. Such term includes counseling related to homeownership 
     and residential mortgage loans that is provided pursuant to--
       ``(i) section 105(a)(20) of the Housing and Community 
     Development Act of 1974 (42 U.S.C. 5305(a)(20));
       ``(ii) in the United States Housing Act of 1937--

       ``(I) section 9(e) (42 U.S.C. 1437g(e));
       ``(II) section 8(y)(1)(D) (42 U.S.C. 1437f(y)(1)(D));
       ``(III) section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D));
       ``(IV) section 23(c)(4) (42 U.S.C. 1437u(c)(4));
       ``(V) section 32(e)(4) (42 U.S.C. 1437z-4(e)(4));
       ``(VI) section 33(d)(2)(B) (42 U.S.C. 1437z-5(d)(2)(B));
       ``(VII) sections 302(b)(6) and 303(b)(7) (42 U.S.C. 
     1437aaa-1(b)(6), 1437aaa-2(b)(7)); and
       ``(VIII) section 304(c)(4) (42 U.S.C. 1437aaa-3(c)(4));

       ``(iii) section 302(a)(4) of the American Homeownership and 
     Economic Opportunity Act of 2000 (42 U.S.C. 1437f note);
       ``(iv) sections 233(b)(2) and 258(b) of the Cranston-
     Gonzalez National Affordable Housing Act (42 U.S.C. 
     12773(b)(2), 12808(b));
       ``(v) this section and section 101(e) of the Housing and 
     Urban Development Act of 1968 (12 U.S.C. 1701x, 1701w(e));
       ``(vi) section 220(d)(2)(G) of the Low-Income Housing 
     Preservation and Resident Homeownership Act of 1990 (12 
     U.S.C. 4110(d)(2)(G));
       ``(vii) sections 422(b)(6), 423(b)(7), 424(c)(4), 
     442(b)(6), and 443(b)(6) of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 12872(b)(6), 12873(b)(7), 
     12874(c)(4), 12892(b)(6), and 12893(b)(6));
       ``(viii) section 491(b)(1)(F)(iii) of the McKinney-Vento 
     Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii));
       ``(ix) sections 202(3) and 810(b)(2)(A) of the Native 
     American Housing and Self-Determination Act of 1996 (25 
     U.S.C. 4132(3), 4229(b)(2)(A));
       ``(x) in the National Housing Act--

       ``(I) in section 203 (12 U.S.C. 1709), the penultimate 
     undesignated paragraph of paragraph (2) of subsection (b), 
     subsection (c)(2)(A), and subsection (r)(4);
       ``(II) subsections (a) and (c)(3) of section 237 (12 U.S.C. 
     1715z-2); and
       ``(III) subsections (d)(2)(B) and (m)(1) of section 255 (12 
     U.S.C. 1715z-20);

       ``(xi) section 502(h)(4)(B) of the Housing Act of 1949 (42 
     U.S.C. 1472(h)(4)(B)); and
       ``(xii) section 508 of the Housing and Urban Development 
     Act of 1970 (12 U.S.C. 1701z-7).
       ``(C) Rental housing counseling.--For purposes of this 
     subsection, the term `rental housing counseling' means 
     counseling related to rental of residential property, which 
     may include counseling regarding future homeownership 
     opportunities and providing referrals for renters and 
     prospective renters to entities providing counseling and 
     shall include counseling related to such topics that is 
     provided pursuant to--
       ``(i) section 105(a)(20) of the Housing and Community 
     Development Act of 1974 (42 U.S.C. 5305(a)(20));
       ``(ii) in the United States Housing Act of 1937--

       ``(I) section 9(e) (42 U.S.C. 1437g(e));
       ``(II) section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D));
       ``(III) section 23(c)(4) (42 U.S.C. 1437u(c)(4));
       ``(IV) section 32(e)(4) (42 U.S.C. 1437z-4(e)(4));
       ``(V) section 33(d)(2)(B) (42 U.S.C. 1437z-5(d)(2)(B)); and
       ``(VI) section 302(b)(6) (42 U.S.C. 1437aaa-1(b)(6));

       ``(iii) section 233(b)(2) of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 12773(b)(2));
       ``(iv) section 106 of the Housing and Urban Development Act 
     of 1968 (12 U.S.C. 1701x);
       ``(v) section 422(b)(6) of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 12872(b)(6));
       ``(vi) section 491(b)(1)(F)(iii) of the McKinney-Vento 
     Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii));
       ``(vii) sections 202(3) and 810(b)(2)(A) of the Native 
     American Housing and Self-Determination Act of 1996 (25 
     U.S.C. 4132(3), 4229(b)(2)(A)); and
       ``(viii) the rental assistance program under section 8 of 
     the United States Housing Act of 1937 (42 U.S.C. 1437f).
       ``(2) Standards for materials.--The Secretary, in 
     conjunction with the advisory committee established under 
     subsection (g)(4) of the Department of Housing and Urban 
     Development Act, shall establish standards for materials and 
     forms to be used, as appropriate, by organizations providing 
     homeownership counseling services, including any recipients 
     of assistance pursuant to subsection (a)(4).
       ``(3) Mortgage software systems.--
       ``(A) Certification.--The Secretary shall provide for the 
     certification of various computer software programs for 
     consumers to use in evaluating different residential mortgage 
     loan proposals. The Secretary shall require, for such 
     certification, that the mortgage software systems take into 
     account--
       ``(i) the consumer's financial situation and the cost of 
     maintaining a home, including insurance, taxes, and 
     utilities;
       ``(ii) the amount of time the consumer expects to remain in 
     the home or expected time to maturity of the loan;
       ``(iii) such other factors as the Secretary considers 
     appropriate to assist the consumer in evaluating whether to 
     pay points, to lock in an interest rate, to select an 
     adjustable or fixed rate loan, to select a conventional or 
     government-insured or guaranteed loan and to make other 
     choices during the loan application process.

     If the Secretary determines that available existing software 
     is inadequate to assist consumers during the residential 
     mortgage loan application process, the Secretary shall 
     arrange for the development by private sector software 
     companies of new mortgage software systems that meet the 
     Secretary's specifications.
       ``(B) Use and initial availability.--Such certified 
     computer software programs shall be used to supplement, not 
     replace, housing counseling. The Secretary shall provide that 
     such programs are initially used only in connection with the 
     assistance of housing counselors certified pursuant to 
     subsection (e).
       ``(C) Availability.--After a period of initial availability 
     under subparagraph (B) as the Secretary considers 
     appropriate, the Secretary shall take reasonable steps to 
     make mortgage software systems certified pursuant to this 
     paragraph widely available through the Internet and at public 
     locations, including public libraries, senior-citizen 
     centers, public housing sites, offices of public housing 
     agencies that administer rental housing assistance vouchers, 
     and housing counseling centers.
       ``(4) National public service multimedia campaigns to 
     promote housing counseling.--
       ``(A) In general.--The Director of Housing Counseling shall 
     develop, implement, and conduct national public service 
     multimedia campaigns designed to make persons facing mortgage 
     foreclosure, persons considering a subprime mortgage loan to 
     purchase a home, elderly persons, persons who face language 
     barriers, low-income persons, and other potentially 
     vulnerable consumers aware that it is advisable, before 
     seeking or maintaining a residential mortgage loan, to obtain 
     homeownership counseling from an unbiased and reliable 
     sources and that such homeownership counseling is available, 
     including through programs sponsored by the Secretary of 
     Housing and Urban Development.
       ``(B) Contact information.--Each segment of the multimedia 
     campaign under subparagraph (A) shall publicize the toll-free 
     telephone number and web site of the Department of Housing 
     and Urban Development through which persons seeking housing 
     counseling can locate a housing counseling agency in their 
     State that is certified by the Secretary of Housing and Urban 
     Development and can provide advice on buying a home, renting, 
     defaults, foreclosures, credit issues, and reverse mortgages.
       ``(C) Authorization of appropriations.--There are 
     authorized to be appropriated to the Secretary, not to exceed 
     $3,000,000 for fiscal years 2008, 2009, and 2010, for the 
     develop,

[[Page 8179]]

     implement, and conduct of national public service multimedia 
     campaigns under this paragraph.
       ``(5) Education programs.--The Secretary shall provide 
     advice and technical assistance to States, units of general 
     local government, and nonprofit organizations regarding the 
     establishment and operation of, including assistance with the 
     development of content and materials for, educational 
     programs to inform and educate consumers, particularly those 
     most vulnerable with respect to residential mortgage loans 
     (such as elderly persons, persons facing language barriers, 
     low-income persons, and other potentially vulnerable 
     consumers), regarding home mortgages, mortgage refinancing, 
     home equity loans, and home repair loans.''.
       (b) Conforming Amendments to Grant Program for 
     Homeownership Counseling Organizations.--Section 
     106(c)(5)(A)(ii) of the Housing and Urban Development Act of 
     1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is amended--
       (1) in subclause (III), by striking ``and'' at the end;
       (2) in subclause (IV) by striking the period at the end and 
     inserting ``; and''; and
       (3) by inserting after subclause (IV) the following new 
     subclause:

       ``(V) notify the housing or mortgage applicant of the 
     availability of mortgage software systems provided pursuant 
     to subsection (g)(3).''.

     SEC. 134. GRANTS FOR HOUSING COUNSELING ASSISTANCE.

       Section 106(a) of the Housing and Urban Development Act of 
     1968 (12 U.S.C. 1701x(a)(3)) is amended by adding at the end 
     the following new paragraph:
       ``(4) Homeownership and rental counseling assistance.--
       ``(A) In general.--The Secretary shall make financial 
     assistance available under this paragraph to States, units of 
     general local governments, and nonprofit organizations 
     providing homeownership or rental counseling (as such terms 
     are defined in subsection (g)(1)).
       ``(B) Qualified entities.--The Secretary shall establish 
     standards and guidelines for eligibility of organizations 
     (including governmental and nonprofit organizations) to 
     receive assistance under this paragraph.
       ``(C) Distribution.--Assistance made available under this 
     paragraph shall be distributed in a manner that encourages 
     efficient and successful counseling programs.
       ``(D) Authorization of appropriations.--There are 
     authorized to be appropriated $45,000,000 for each of fiscal 
     years 2008 through 2011 for--
       ``(i) the operations of the Office of Housing Counseling of 
     the Department of Housing and Urban Development;
       ``(ii) the responsibilities of the Secretary under 
     paragraphs (2) through (5) of subsection (g); and
       ``(iii) assistance pursuant to this paragraph for entities 
     providing homeownership and rental counseling.''.

     SEC. 135. REQUIREMENTS TO USE HUD-CERTIFIED COUNSELORS UNDER 
                   HUD PROGRAMS.

       Section 106(e) of the Housing and Urban Development Act of 
     1968 (12 U.S.C. 1701x(e)) is amended--
       (1) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) Requirement for assistance.--An organization may not 
     receive assistance for counseling activities under subsection 
     (a)(1)(iii), (a)(2), (a)(4), (c), or (d) of this section, or 
     under section 101(e), unless the organization, or the 
     individuals through which the organization provides such 
     counseling, has been certified by the Secretary under this 
     subsection as competent to provide such counseling.'';
       (2) in paragraph (2)--
       (A) by inserting ``and for certifying organizations'' 
     before the period at the end of the first sentence; and
       (B) in the second sentence by striking ``for 
     certification'' and inserting ``, for certification of an 
     organization, that each individual through which the 
     organization provides counseling shall demonstrate, and, for 
     certification of an individual,'';
       (3) in paragraph (3), by inserting ``organizations and'' 
     before ``individuals'';
       (4) by redesignating paragraph (3) as paragraph (5); and
       (5) by inserting after paragraph (2) the following new 
     paragraphs:
       ``(3) Requirement under hud programs.--Any homeownership 
     counseling or rental housing counseling (as such terms are 
     defined in subsection (g)(1)) required under, or provided in 
     connection with, any program administered by the Department 
     of Housing and Urban Development shall be provided only by 
     organizations or counselors certified by the Secretary under 
     this subsection as competent to provide such counseling.
       ``(4) Outreach.--The Secretary shall take such actions as 
     the Secretary considers appropriate to ensure that 
     individuals and organizations providing homeownership or 
     rental housing counseling are aware of the certification 
     requirements and standards of this subsection and of the 
     training and certification programs under subsection (f).''.

     SEC. 136. STUDY OF DEFAULTS AND FORECLOSURES.

       The Secretary of Housing and Urban Development shall 
     conduct an extensive study of the root causes of default and 
     foreclosure of home loans, using as much empirical data as 
     are available. The study shall also examine the role of 
     escrow accounts in helping prime and nonprime borrowers to 
     avoid defaults and foreclosures. Not later than 12 months 
     after the date of the enactment of this Act, the Secretary 
     shall submit to the Congress a preliminary report regarding 
     the study. Not later than 24 months after such date of 
     enactment, the Secretary shall submit a final report 
     regarding the results of the study, which shall include any 
     recommended legislation relating to the study, and 
     recommendations for best practices and for a process to 
     identify populations that need counseling the most.

     SEC. 137. DEFINITIONS FOR COUNSELING-RELATED PROGRAMS.

       Section 106 of the Housing and Urban Development Act of 
     1968 (12 U.S.C. 1701x), as amended by the preceding 
     provisions of this subtitle, is further amended by adding at 
     the end the following new subsection:
       ``(h) Definitions.--For purposes of this section:
       ``(1) Nonprofit organization.--The term `nonprofit 
     organization' has the meaning given such term in section 
     104(5) of the Cranston-Gonzalez National Affordable Housing 
     Act (42 U.S.C. 12704(5)), except that subparagraph (D) of 
     such section shall not apply for purposes of this section.
       ``(2) State.--The term `State' means each of the several 
     States, the Commonwealth of Puerto Rico, the District of 
     Columbia, the Commonwealth of the Northern Mariana Islands, 
     Guam, the Virgin Islands, American Samoa, the Trust 
     Territories of the Pacific, or any other possession of the 
     United States.
       ``(3) Unit of general local government.--The term `unit of 
     general local government' means any city, county, parish, 
     town, township, borough, village, or other general purpose 
     political subdivision of a State.''.

     SEC. 138. UPDATING AND SIMPLIFICATION OF MORTGAGE INFORMATION 
                   BOOKLET.

       Section 5 of the Real Estate Settlement Procedures Act of 
     1974 (12 U.S.C. 2604) is amended--
       (1) in the section heading, by striking ``special'' and 
     inserting ``home buying'';
       (2) by striking subsections (a) and (b) and inserting the 
     following new subsections:
       ``(a) Preparation and Distribution.--The Secretary shall 
     prepare, at least once every 5 years, a booklet to help 
     consumers applying for federally related mortgage loans to 
     understand the nature and costs of real estate settlement 
     services. The Secretary shall prepare the booklet in various 
     languages and cultural styles, as the Secretary determines to 
     be appropriate, so that the booklet is understandable and 
     accessible to homebuyers of different ethnic and cultural 
     backgrounds. The Secretary shall distribute such booklets to 
     all lenders that make federally related mortgage loans. The 
     Secretary shall also distribute to such lenders lists, 
     organized by location, of homeownership counselors certified 
     under section 106(e) of the Housing and Urban Development Act 
     of 1968 (12 U.S.C. 1701x(e)) for use in complying with the 
     requirement under subsection (c) of this section.
       ``(b) Contents.--Each booklet shall be in such form and 
     detail as the Secretary shall prescribe and, in addition to 
     such other information as the Secretary may provide, shall 
     include in plain and understandable language the following 
     information:
       ``(1) A description and explanation of the nature and 
     purpose of the costs incident to a real estate settlement or 
     a federally related mortgage loan. The description and 
     explanation shall provide general information about the 
     mortgage process as well as specific information concerning, 
     at a minimum--
       ``(A) balloon payments;
       ``(B) prepayment penalties; and
       ``(C) the trade-off between closing costs and the interest 
     rate over the life of the loan.
       ``(2) An explanation and sample of the uniform settlement 
     statement required by section 4.
       ``(3) A list and explanation of lending practices, 
     including those prohibited by the Truth in Lending Act or 
     other applicable Federal law, and of other unfair practices 
     and unreasonable or unnecessary charges to be avoided by the 
     prospective buyer with respect to a real estate settlement.
       ``(4) A list and explanation of questions a consumer 
     obtaining a federally related mortgage loan should ask 
     regarding the loan, including whether the consumer will have 
     the ability to repay the loan, whether the consumer 
     sufficiently shopped for the loan, whether the loan terms 
     include prepayment penalties or balloon payments, and whether 
     the loan will benefit the borrower.
       ``(5) An explanation of the right of rescission as to 
     certain transactions provided by sections 125 and 129 of the 
     Truth in Lending Act.
       ``(6) A brief explanation of the nature of a variable rate 
     mortgage and a reference to the booklet entitled `Consumer 
     Handbook on Adjustable Rate Mortgages', published by the 
     Board of Governors of the Federal Reserve System pursuant to 
     section 226.19(b)(1) of title 12, Code of Federal 
     Regulations, or to any suitable substitute of such booklet 
     that

[[Page 8180]]

     such Board of Governors may subsequently adopt pursuant to 
     such section.
       ``(7) A brief explanation of the nature of a home equity 
     line of credit and a reference to the pamphlet required to be 
     provided under section 127A of the Truth in Lending Act.
       ``(8) Information about homeownership counseling services 
     made available pursuant to section 106(a)(4) of the Housing 
     and Urban Development Act of 1968 (12 U.S.C. 1701x(a)(4)), a 
     recommendation that the consumer use such services, and 
     notification that a list of certified providers of 
     homeownership counseling in the area, and their contact 
     information, is available.
       ``(9) An explanation of the nature and purpose of escrow 
     accounts when used in connection with loans secured by 
     residential real estate and the requirements under section 10 
     of this Act regarding such accounts.
       ``(10) An explanation of the choices available to buyers of 
     residential real estate in selecting persons to provide 
     necessary services incidental to a real estate settlement.
       ``(11) An explanation of a consumer's responsibilities, 
     liabilities, and obligations in a mortgage transaction.
       ``(12) An explanation of the nature and purpose of real 
     estate appraisals, including the difference between an 
     appraisal and a home inspection.
       ``(13) Notice that the Office of Housing of the Department 
     of Housing and Urban Development has made publicly available 
     a brochure regarding loan fraud and a World Wide Web address 
     and toll-free telephone number for obtaining the brochure.

     The booklet prepared pursuant to this section shall take into 
     consideration differences in real estate settlement 
     procedures that may exist among the several States and 
     territories of the United States and among separate political 
     subdivisions within the same State and territory.'';
       (3) in subsection (c), by inserting at the end the 
     following new sentence: ``Each lender shall also include with 
     the booklet a reasonably complete or updated list of 
     homeownership counselors who are certified pursuant to 
     section 106(e) of the Housing and Urban Development Act of 
     1968 (12 U.S.C. 1701x(e)) and located in the area of the 
     lender.''; and
       (4) in subsection (d), by inserting after the period at the 
     end of the first sentence the following: ``The lender shall 
     provide the HUD-issued booklet in the version that is most 
     appropriate for the person receiving it.''.

                  Subtitle C--Combating Mortgage Fraud

     SEC. 151. AUTHORIZATION OF APPROPRIATIONS TO COMBAT MORTGAGE 
                   FRAUD.

       For fiscal years 2008, 2009, 2010, 2011, and 2012, there 
     are authorized to be appropriated to the Attorney General a 
     total of--
       (1) $31,250,000 to support the employment of 30 additional 
     agents of the Federal Bureau of Investigation and 2 
     additional dedicated prosecutors at the Department of Justice 
     to coordinate prosecution of mortgage fraud efforts with the 
     offices of the United States Attorneys; and
       (2) $750,000 to support the operations of interagency task 
     forces of the Federal Bureau of Investigation in the areas 
     with the 15 highest concentrations of mortgage fraud.

     TITLE II--FHA REFORM AND MANUFACTURED HOUSING LOAN INSURANCE 
                             MODERNIZATION

                         Subtitle A--FHA Reform

     SEC. 201. SHORT TITLE.

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

     SEC. 202. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) one of the primary missions of the Federal Housing 
     Administration (FHA) single family mortgage insurance program 
     is to reach borrowers who are underserved, or not served, by 
     the existing conventional mortgage marketplace;
       (2) the FHA program has a long history of innovation, which 
     includes pioneering the 30-year self-amortizing mortgage and 
     a safe-to-seniors reverse mortgage product, both of which 
     were once thought too risky to private lenders;
       (3) the FHA single family mortgage insurance program 
     traditionally has been a major provider of mortgage insurance 
     for home purchases;
       (4) the FHA mortgage insurance premium structure, as well 
     as FHA's product offerings, should be revised to reflect 
     FHA's enhanced ability to determine risk at the loan level 
     and to allow FHA to better respond to changes in the mortgage 
     market;
       (5) during past recessions, including the oil-patch 
     downturns in the mid-1980s, FHA remained a viable credit 
     enhancer and was therefore instrumental in preventing a more 
     catastrophic collapse in housing markets and a greater loss 
     of homeowner equity; and
       (6) as housing price appreciation slows and interest rates 
     rise, many homeowners and prospective homebuyers will need 
     the less-expensive, safer financing alternative that FHA 
     mortgage insurance provides.
       (b) Purposes.--The purposes of this subtitle are--
       (1) to provide flexibility to FHA to allow for the 
     insurance of housing loans for low- and moderate-income 
     homebuyers during all economic cycles in the mortgage market;
       (2) to modernize the FHA single family mortgage insurance 
     program by making it more reflective of enhancements to loan-
     level risk assessments and changes to the mortgage market; 
     and
       (3) to adjust the loan limits for the single family 
     mortgage insurance program to reflect rising house prices and 
     the increased costs associated with new construction.

     SEC. 203. MAXIMUM PRINCIPAL LOAN OBLIGATION.

       (a) In General.--Section 203(b)(2) of the National Housing 
     Act (12 U.S.C. 1709(b)(2)(A)) is amended by striking 
     subparagraph (A) and inserting the following new 
     subparagraph:
       ``(A) not to exceed the lesser of--
       ``(i) in the case of a 1-family residence, 125 percent of 
     the median 1-family house price in the area, as determined by 
     the Secretary; and in the case of a 2-, 3-, or 4-family 
     residence, the percentage of such median price that bears the 
     same ratio to such median price as the dollar amount 
     limitation determined under section 305(a)(2) of the Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for 
     a 2-, 3-, or 4-family residence, respectively, bears to the 
     dollar amount limitation determined under such section for a 
     1-family residence; or
       ``(ii) 175 percent of the dollar amount limitation 
     determined under such section 305(a)(2)(A) for a residence of 
     the applicable size (without regard to any authority to 
     increase such limitations with respect to properties located 
     in Alaska, Guam, Hawaii, or the Virgin Islands and without 
     regard to the high-cost area limitation under such section 
     305(a)(2)(B));

     except that the dollar amount limitation in effect under this 
     subparagraph for any size residence for any area may not be 
     less than the greater of: (I) the dollar amount limitation in 
     effect under this section for the area on October 21, 1998; 
     or (II) 65 percent of the dollar amount limitation determined 
     under such section 305(a)(2) for a residence of the 
     applicable size; and except that, if the Secretary determines 
     that market conditions warrant such an increase, the 
     Secretary may, for such period as the Secretary considers 
     appropriate, increase the maximum dollar amount limitation 
     determined pursuant to the preceding provisions of this 
     subparagraph with respect to any particular size or sizes of 
     residences, or with respect to residences located in any 
     particular area or areas, to an amount that does not exceed 
     the maximum dollar amount then otherwise in effect pursuant 
     to the preceding provisions of this subparagraph for such 
     size residence, or for such area (if applicable), by not more 
     than $100,000; and''.
       (b) Treatment of Temporary Loan Limit Increase.--Subsection 
     (a) and the amendment made by such subsection may not be 
     construed to in any way affect the effectiveness of section 
     202 of the Economic Stimulus Act of 2008 (Public Law 110-185; 
     122 Stat. 620).

     SEC. 204. EXTENSION OF MORTGAGE TERM.

       Paragraph (3) of section 203(b) of the National Housing Act 
     (12 U.S.C. 1709(b)(3)) is amended--
       (1) by striking ``thirty-five years'' and inserting ``forty 
     years''; and
       (2) by striking ``(or thirty years if such mortgage is not 
     approved for insurance prior to construction)''.

     SEC. 205. DOWNPAYMENT SIMPLIFICATION.

       Section 203(b) of the National Housing Act (12 U.S.C. 
     1709(b)) is amended--
       (1) in paragraph (2)--
       (A) by striking subparagraph (B) and inserting the 
     following new subparagraph:
       ``(B) not to exceed an amount equal to the sum of--
       ``(i) the amount of the mortgage premium paid at the time 
     the mortgage is insured; and
       ``(ii) 97.75 percent of the appraised value of the 
     property.'';
       (B) in the matter after and below subparagraph (B), by 
     striking the second sentence (relating to a definition of 
     ``average closing cost'') and all that follows through 
     ``title 38, United States Code.''; and
       (C) by striking the last undesignated paragraph (relating 
     to counseling with respect to the responsibilities and 
     financial management involved in homeownership); and
       (2) in paragraph (9)--
       (A) by striking the paragraph designation and all that 
     follows through ``Provided further, That for'' and inserting 
     the following:
       ``(9) Be executed by a mortgagor who shall have paid on 
     account of the property, in cash or its equivalent, at least 
     3 percent of the Secretary's estimate of the cost of 
     acquisition (excluding the mortgage insurance premium paid at 
     the time the mortgage is insured). For''; and
       (B) by inserting after the period at the end the following: 
     ``For purposes of this paragraph, the Secretary shall 
     consider as cash or its equivalent any amounts gifted by a 
     family member (as such term is defined in section 201), the 
     mortgagor's employer or labor union, or a qualified 
     homeownership assistance entity, but only if there is no 
     obligation on the part of the mortgagor to repay the gift: 
     For purposes of the preceding sentence, the term `qualified 
     homeownership assistance entity' means any governmental 
     agency or charity that has a program to provide homeownership 
     assistance to low- and moderate-income families or first-time 
     home buyers, or any private nonprofit organization that has 
     such a program and evidences

[[Page 8181]]

     sufficient fiscal soundness to protect the fiscal integrity 
     of the Mutual Mortgage Insurance Fund by maintaining a 
     minimum net worth of $4,000,000 of acceptable assets.''.

     SEC. 206. MORTGAGE INSURANCE PREMIUMS FOR QUALIFIED 
                   HOMEOWNERSHIP ASSISTANCE ENTITIES AND HIGHER-
                   RISK BORROWERS.

       Paragraph (2) of section 203(c) of the National Housing Act 
     (12 U.S.C. 1709(c)(2)) is amended--
       (1) in subparagraph (A), in the matter preceding 
     subparagraph (A), by striking the first comma after ``section 
     234(c)'';
       (2) in subparagraph (A), by inserting after the period at 
     the end of the second sentence the following: ``In the case 
     of a mortgage for which any amounts gifted by a qualified 
     homeownership assistance entity (as such term is defined in 
     paragraph (9) of subsection (b)) that is a private nonprofit 
     organization are treated as cash or its equivalent for 
     purposes of meeting the 3 percent requirement under such 
     paragraph, the premium payment under this subparagraph shall 
     not exceed 3.0 percent of the amount of the original insured 
     principal obligation of the mortgage.''; and
       (3) by adding at the end the following new subparagraph:
       ``(C) Higher-risk borrowers.--The Secretary shall establish 
     underwriting standards that provide for insurance under this 
     section of mortgages described in the matter in this 
     paragraph preceding subparagraph (A) for which the mortgagor 
     has a credit score equivalent to a FICO score of less than 
     560, and may insure, and make commitments to insure, such 
     mortgages. Such underwriting standards shall include 
     establishing and collecting premium payments that comply with 
     the requirements of this paragraph, except that 
     notwithstanding subparagraph (A), the single premium payment 
     collected at the time of insurance may be established in an 
     amount that does not exceed 3.0 percent of the amount of the 
     original insured principal obligation of the mortgage.''.

     SEC. 207. RISK-BASED MORTGAGE INSURANCE PREMIUMS.

       Section 203(c) of the National Housing Act (12 U.S.C. 
     1709(c)), as amended by the preceding provisions of this 
     subtitle, is further amended by adding at the end the 
     following new paragraphs:
       ``(4) Flexible risk-based premiums.--In the case of a 
     mortgage referred to in paragraph (2)(C) or a mortgage 
     described in the third sentence of subparagraph (A) of 
     paragraph (2) (relating to mortgages for which amounts are 
     gifted by a nonprofit qualified homeownership assistance 
     entity), for which the loan application is received by the 
     mortgagee on or after the date of the enactment of the 
     Expanding American Homeownership Act of 2008:
       ``(A) In general.--The Secretary may establish a mortgage 
     insurance premium structure involving a single premium 
     payment collected prior to the insurance of the mortgage or 
     annual payments (which may be collected on a periodic basis), 
     or both, subject to the requirements of subparagraph (B) and 
     paragraph (5). Under such structure, the rate of premiums for 
     such a mortgage may vary according to the credit risk 
     associated with the mortgage and the rate of any annual 
     premium for such a mortgage may vary during the mortgage term 
     as long as the basis for determining the variable rate is 
     established before the execution of the mortgage. The 
     Secretary may change a premium structure established under 
     this subclause but only to the extent that such change is not 
     applied to any mortgage already executed.
       ``(B) Establishment and alteration of premium structure.--A 
     premium structure shall be established or changed under 
     subparagraph (A) only by providing notice to mortgagees and 
     to the Congress, at least 30 days before the premium 
     structure is established or changed.
       ``(C) Annual report regarding premiums.--The Secretary 
     shall submit a report to the Congress annually setting forth 
     the rate structures and rates established and altered 
     pursuant to this paragraph during the preceding 12-month 
     period and describing how such rates were determined.
       ``(5) Considerations for premium structure.--When 
     establishing premiums for mortgages referred to in paragraph 
     (2)(C), establishing premiums pursuant to paragraph (3), 
     establishing a premium structure under paragraph (4), and 
     when changing such a premium structure, the Secretary shall 
     consider the following:
       ``(A) The effect of the proposed premiums or structure on 
     the Secretary's ability to meet the operational goals of the 
     Mutual Mortgage Insurance Fund as provided in section 202(a).
       ``(B) Underwriting variables.
       ``(C) The extent to which new pricing under the proposed 
     premiums or structure has potential for acceptance in the 
     private market.
       ``(D) The administrative capability of the Secretary to 
     administer the proposed premiums or structure.
       ``(E) The effect of the proposed premiums or structure on 
     the Secretary's ability to maintain the availability of 
     mortgage credit and provide stability to mortgage markets.
       ``(6) Authority to base premium prices on product risk.--
       ``(A) Authority.--In establishing premium rates under 
     paragraphs (2), (3), and (4), the Secretary may provide for 
     variations in such rates according to the credit risk 
     associated with the type of mortgage product that is being 
     insured under this title, which may include providing that 
     premium rates differ between fixed-rate mortgages and 
     adjustable-rate mortgages insured pursuant to section 251, 
     between mortgages insured pursuant to section 203(b) and 
     mortgages for condominiums insured pursuant to section 234, 
     and between such other products as the Secretary considers 
     appropriate.
       ``(B) Limitation.--Subparagraph (A) may not be construed to 
     authorize the Secretary to establish, for any mortgage 
     product, any mortgage insurance premium rate that does not 
     comply with the requirements and limitations under paragraphs 
     (2) through (5).''.

     SEC. 208. PAYMENT INCENTIVES FOR HIGHER-RISK BORROWERS.

       Section 203(c) of the National Housing Act (12 U.S.C. 
     1709(c)), as amended by the preceding provisions of this 
     subtitle, is further amended by adding at the end the 
     following new paragraph:
       ``(7) Payment incentives.--
       ``(A) Authority.--With respect to mortgages referred to in 
     paragraph (2)(C):
       ``(i) Discretionary 3-year payment incentive.--The 
     Secretary may provide, in the discretion of the Secretary, 
     that the payment incentive under subparagraph (B) shall apply 
     upon the expiration of the 3-year period beginning upon the 
     time of insurance of such a mortgage.
       ``(ii) Mandatory 5-year payment incentive.--The Secretary 
     shall provide that the payment incentive under subparagraph 
     (B) applies upon the expiration of the 5-year period 
     beginning upon the time of insurance of such a mortgage.
       ``(B) Payment incentive.--In the case of any mortgage to 
     which the payment incentive under this subparagraph applies, 
     if, during the period referred to in clause (i) or (ii) of 
     subparagraph (A), as applicable, all mortgage insurance 
     premiums for such mortgage have been paid on a timely basis, 
     upon the expiration of such period the Secretary shall--
       ``(i) reduce the amount of the annual premium payments 
     otherwise due thereafter under such mortgage to an amount 
     that does not exceed the amount of the annual premium payable 
     at the time of insurance of the mortgage on a mortgage of the 
     same product type having the same terms, but for which the 
     mortgagor has a credit score equivalent to a FICO score of 
     560 or more; and
       ``(ii) refund to the mortgagor, upon payment in full of the 
     obligation of the mortgage, any amount by which the single 
     premium payment for such mortgage collected at the time of 
     insurance exceeded the amount of the single premium payment 
     chargeable under paragraph (2)(A) at the time of insurance 
     for a mortgage of the same product type having the same 
     terms, but for which the mortgagor has a credit score 
     equivalent to a FICO score of 560 or more.''.

     SEC. 209. PROTECTIONS FOR HIGHER-RISK BORROWERS.

       Section 203(b) of the National Housing Act (12 U.S.C. 
     1709(b)) is amended by adding at the end the following new 
     paragraph:
       ``(10) Protections for higher-risk borrowers.--Except as 
     otherwise specifically provided in this paragraph, in the 
     case of any mortgage referred to in paragraph (2)(C) of 
     subsection (c), the following requirements shall apply:
       ``(A) Disclosures.--
       ``(i) Required disclosures.--In addition to any disclosures 
     that are otherwise required by law or by the Secretary for 
     single family mortgages, the mortgagee shall disclose to the 
     mortgagor the following information:

       ``(I) At application.--At the time of application for the 
     loan involved in the mortgage, a list of counseling agencies, 
     approved by the Secretary, in the area of the applicant.
       ``(II) At execution.--At the time of entering into the 
     mortgage--

       ``(aa) the terms of the mandatory 5-year payment incentive 
     required under subsection (c)(7)(A)(ii); and
       ``(bb) a statement that the mortgagor has a right under 
     contract to loss mitigation.

       ``(III) Other information.--Any other additional 
     information that the Secretary determines is appropriate to 
     ensure that the mortgagor has received timely and accurate 
     information about the program under paragraph (2)(C) of 
     subsection (c).

       ``(ii) Penalties for failure to provide required 
     disclosures.--The Secretary may establish and impose 
     appropriate penalties for failure of a mortgagee to provide 
     any disclosure required under clause (i).
       ``(iii) No private right of action.--This subparagraph 
     shall not create any private right of action on behalf of the 
     mortgagor.
       ``(B) Counseling.--
       ``(i) Requirement.--The Secretary shall require that the 
     mortgagor shall have received counseling that complies with 
     the requirements of this subparagraph.
       ``(ii) Terms of counseling.--Counseling under this 
     subparagraph shall be provided--

       ``(I) prior to closing for the loan involved in the 
     mortgage;
       ``(II) by a third party (other than the mortgagee) who is 
     approved by the Secretary, with respect to the 
     responsibilities and financial management involved in 
     homeownership;

[[Page 8182]]

       ``(III) on an individual basis to the mortgagor by a 
     representative of the approved third-party counseling entity; 
     and
       ``(IV) in person, to the maximum extent possible.

       ``(iii) 2- and 3-family residences.--In the case of a 
     mortgage involving a 2- or 3-family residence, counseling 
     under this subparagraph shall include (in addition to the 
     information required under clause (iii)) information 
     regarding real estate property management.
       ``(C) Notice of foreclosure prevention counseling 
     availability.--
       ``(i) Written agreement.--To be eligible for insurance 
     under this subsection, the mortgagee shall provide the 
     mortgagor, at the time of the execution of the mortgage, a 
     written agreement which shall be signed by the mortgagor and 
     under which the mortgagee shall provide notice described in 
     clause (ii) to a housing counseling entity that has agreed to 
     provide the notice and counseling required under clause (iii) 
     and is approved by the Secretary.
       ``(ii) Notice to counseling agency.--The notice described 
     in this clause, with respect to a mortgage, is notice, 
     provided at the earliest time practicable after the mortgagor 
     becomes 60 days delinquent with respect to any payment due 
     under the mortgage, that the mortgagor is so delinquent and 
     of how to contact the mortgagor. Such notice may only be 
     provided once with respect to each delinquency period for a 
     mortgage.
       ``(iii) Notice to mortgagor.--Upon notice from a mortgagee 
     that a mortgagor is 60 days delinquent with respect to 
     payments due under the mortgage, the housing counseling 
     entity shall at the earliest time practicable notify the 
     mortgagor of such delinquency, that the entity makes 
     available foreclosure prevention counseling that may assist 
     the mortgagor in resolving the delinquency, and of how to 
     contact the entity to arrange for such counseling.
       ``(iv) Ability to cure.--Failure to provide the written 
     agreement required under clause (i) may be corrected by 
     sending such agreement to the mortgagor not later than the 
     earliest time practicable after the mortgagor first becomes 
     60 days delinquent with respect to payments due under the 
     mortgage. Insurance provided under this subsection may not be 
     terminated and penalties for such failure may not be 
     prospectively or retroactively imposed if such failure is 
     corrected in accordance with this clause.
       ``(v) Penalties for failure to provide agreement.--The 
     Secretary may establish and impose appropriate penalties for 
     failure of a mortgagee to provide the written agreement 
     required under clause (i).
       ``(vi) Limitation on liability of mortgagee.--A mortgagee 
     shall not incur any liability or penalties for any failure of 
     a housing counseling entity to provide notice under clause 
     (iii).
       ``(vii) No private right of action.--This subparagraph 
     shall not create any private right of action on behalf of the 
     mortgagor.
       ``(viii) Delinquency period.--For purposes of this 
     subparagraph, the term `delinquency period' means, with 
     respect to a mortgage, a period that begins upon the 
     mortgagor becoming delinquent with respect to payments due 
     under the mortgage and ends upon the first subsequent 
     occurrence of such payments under the mortgage becoming 
     current or the property subject to the mortgage being 
     foreclosed or otherwise disposed of.''.

     SEC. 210. REFINANCING MORTGAGES.

       Section 203 of the National Housing Act (12 U.S.C. 1709) is 
     amended by inserting after subsection (k) the following new 
     subsection:
       ``(l) Refinancing Mortgages.--
       ``(1) Establishment of underwriting standards.--The 
     Secretary shall establish underwriting standards that provide 
     for insurance under this title of mortgage loans, and take 
     actions to facilitate the availability of mortgage loans 
     insured under this title, for qualified borrowers that are 
     made for the purpose of paying or prepaying outstanding 
     obligations under existing mortgages for borrowers that--
       ``(A) have existing mortgages with adverse terms or rates, 
     or
       ``(B) do not have access to mortgages at reasonable rates 
     and terms for such refinancings due to adverse market 
     conditions.
       ``(2) Insurance of mortgages to borrowers in default or at 
     risk of default.--In facilitating insurance for such 
     mortgages, the Secretary may insure mortgages to borrowers 
     who are, currently in default or at imminent risk of being in 
     default, but only if such loans meet reasonable underwriting 
     standards established by the Secretary.''.

     SEC. 211. ANNUAL REPORTS ON NEW PROGRAMS AND LOSS MITIGATION.

       Section 540(b)(2) of the National Housing Act (12 U.S.C. 
     1735f-18(b)(2)) is amended, by adding at the end the 
     following new subparagraphs:
       ``(C) The rates of default and foreclosure for the 
     applicable collection period for mortgages insured pursuant 
     to the program for mortgage insurance under paragraph (2)(C) 
     of section 203(c).
       ``(D) Actions taken by the Secretary during the applicable 
     collection period with respect to loss mitigation on 
     mortgages insured pursuant to section 203.''.

     SEC. 212. INSURANCE FOR SINGLE FAMILY HOMES WITH LICENSED 
                   CHILD CARE FACILITIES.

       (a) Definition of Child Care Facility.--Section 201 of the 
     National Housing Act (12 U.S.C. 1707) is amended by adding at 
     the end the following new subsection:
       ``(g) The term `child care facility' means a facility 
     that--
       ``(A) has as its purpose the care of children who are less 
     than 12 years of age; and
       ``(B) is licensed or regulated by the State in which it is 
     located (or, if there is no State law providing for such 
     licensing and regulation by the State, by the municipality or 
     other political subdivision in which the facility is 
     located).
     Such term does not include facilities for school-age children 
     primarily for use during normal school hours.''.
       (b) Increase in Maximum Mortgage Amount Limitation.--
     Paragraph (2) of section 203(b) of the National Housing Act 
     (12 U.S.C. 1709(b)(2)), as amended by the preceding 
     provisions of this subtitle, is further amended by adding at 
     end the following new undesignated paragraph:
       ``Notwithstanding any other provision of this paragraph, 
     the amount that may be insured under this section may be 
     increased by up to 25 percent if such increase is necessary 
     to account for the increased cost of the residence due to an 
     increased need of space in the residence for locating and 
     operating a child care facility (as such term is defined in 
     section 201) within the residence, but only if a valid 
     license or certificate of compliance with regulations 
     described in section 201(g)(2) has been issued for such 
     facility as of the date of the execution of the mortgage, and 
     only if such increase in the amount insured is proportional 
     to the amount of space of such residence that will be used 
     for such facility.''.

     SEC. 213. REHABILITATION LOANS.

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

     SEC. 214. DISCRETIONARY ACTION.

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

     SEC. 215. INSURANCE OF CONDOMINIUMS AND MANUFACTURED HOUSING.

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

[[Page 8183]]



     SEC. 216. MUTUAL MORTGAGE INSURANCE FUND.

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

     The first quarterly report under this paragraph shall be 
     submitted on the last day of the first quarter of fiscal year 
     2008, or upon the expiration of the 90-day period beginning 
     on the date of the enactment of the Expanding American 
     Homeownership Act of 2008, whichever is later.
       ``(6) Adjustment of premiums.--If, pursuant to the 
     independent actuarial study of the Fund required under 
     paragraph (5), the Secretary determines that the Fund is not 
     meeting the operational goals established under paragraph (8) 
     or there is a substantial probability that the Fund will not 
     maintain its established target subsidy rate, the Secretary 
     may either make programmatic adjustments under section 203 as 
     necessary to reduce the risk to the Fund, or make appropriate 
     premium adjustments.
       ``(7) Operational goals.--The operational goals for the 
     Fund are--
       ``(A) to charge borrowers under loans that are obligations 
     of the Fund an appropriate premium for the risk that such 
     loans pose to the Fund;
       ``(B) to minimize the default risk to the Fund and to 
     homeowners;
       ``(C) to curtail the impact of adverse selection on the 
     Fund; and
       ``(D) to meet the housing needs of the borrowers that the 
     single family mortgage insurance program under this title is 
     designed to serve.''.
       (b) Obligations of Fund.--The National Housing Act is 
     amended as follows:
       (1) Homeownership voucher program mortgages.--In section 
     203(v) (12 U.S.C. 1709(v))--
       (A) by striking ``Notwithstanding section 202 of this 
     title, the'' and inserting ``The''; and
       (B) by striking ``General Insurance Fund'' the first place 
     such term appears and all that follows and inserting ``Mutual 
     Mortgage Insurance Fund.''.
       (2) Home equity conversion mortgages.--Section 255(i)(2)(A) 
     of the National Housing Act (12 U.S.C. 1715z-20(i)(2)(A)) is 
     amended by striking ``General Insurance Fund'' and inserting 
     ``Mutual Mortgage Insurance Fund''.
       (c) Conforming Amendments.--The National Housing Act is 
     amended--
       (1) in section 205 (12 U.S.C. 1711), by striking 
     subsections (g) and (h); and
       (2) in section 519(e) (12 U.S.C. 1735c(e)), by striking 
     ``203(b)'' and all that follows through ``203(i)'' and 
     inserting ``203, except as determined by the Secretary''.

     SEC. 217. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.

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

     SEC. 218. CONFORMING AND TECHNICAL AMENDMENTS.

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

     SEC. 219. HOME EQUITY CONVERSION MORTGAGES.

       (a) In General.--Section 255 of the National Housing Act 
     (12 U.S.C. 1715z-20) is amended--
       (1) in subsection (b)(2), insert `` `real estate,' '' after 
     `` `mortgagor','';
       (2) in subsection (b)(4), by striking subparagraph (B) and 
     inserting the following new subparagraph:
       ``(B) under a lease that has a term that ends no earlier 
     than the minimum number of years, as specified by the 
     Secretary, beyond the actuarial life expectancy of the 
     mortgagor or comortgagor, whichever is the later date.''.
       (3) in the second sentence of subsection (g), by striking 
     ``the maximum dollar amount established under section 
     203(b)(2)'' and all that follows through ``located'' and 
     inserting ``132 percent of the dollar amount limitation 
     determined under section 305(a)(2)(A) of the Federal Home 
     Loan Mortgage Corporation Act for a 1-family residence 
     (without regard to any authority to increase such limitations 
     with respect to properties located in Alaska, Guam, Hawaii, 
     or the Virgin Islands and without regard to the high-cost 
     area limitation under such section 305(a)(2)(B))'';
       (4) in subsection (i)(1)(C), by striking ``limitations'' 
     and inserting ``limitation''; and
       (5) by adding at the end the following new subsection:
       ``(o) Authority To Insure Home Purchase Mortgages.--
       ``(1) In general.--Notwithstanding any other provision in 
     this section, the Secretary may insure, upon application by a 
     mortgagee, a home equity conversion mortgage upon such terms 
     and conditions as the Secretary may prescribe, when the 
     primary purpose of the home equity conversion mortgage is to 
     enable an elderly mortgagor to purchase a 1- to 4-family 
     dwelling in which the mortgagor will occupy or occupies one 
     of the units.
       ``(2) Limitation on principal obligation.--A home equity 
     conversion mortgage insured pursuant to paragraph (1) shall 
     involve a principal obligation that does not exceed the 
     limitation under subsection (g) of this section on the 
     maximum amount of the benefits of insurance under this 
     section.''.
       (b) Mortgages for Cooperatives.--Subsection (b) of section 
     255 of the National Housing Act (12 U.S.C. 1715z-20(b)) is 
     amended--
       (1) in paragraph (4)--
       (A) by inserting ``a first or subordinate mortgage or 
     lien'' before ``on all stock'';
       (B) by inserting ``unit'' after ``dwelling''; and
       (C) by inserting ``a first mortgage or first lien'' before 
     ``on a leasehold''; and
       (2) in paragraph (5), by inserting ``a first or subordinate 
     lien on'' before ``all stock''.
       (c) Prohibition on Required Purchase of an Annuity.--
     Section 255 of the National Housing Act of 1937 (12 U.S.C. 
     1715z-20) is amended--
       (1) by striking subparagraph (B) of subsection (d)(2) and 
     inserting the following new subparagraph:
       ``(B) has received adequate counseling by a third party 
     (other than a reverse mortgage lender, servicer or investor, 
     or an entity engaged in the sale of annuities, investments, 
     long-term care insurance, or any other type of financial or 
     insurance product) as provided in subsection (f);'';
       (2) by striking the first sentence of subsection (f) and 
     inserting the following new

[[Page 8184]]

     sentence: ``The Secretary shall provide or cause to be 
     provided and paid for by entities other than a reverse 
     mortgage lender, servicer or investor, or an entity engaged 
     in the sale of annuities, investments, long-term care 
     insurance, or any other type of financial or insurance 
     product the information required in subsection (d)(2)(B).''; 
     and
       (3) by striking subsections (l) and (m) and inserting the 
     following new subsection:
       ``(l) Regulations to Protect Elderly Homeowners.--
       ``(1) In general.--Not later than 6 months after the date 
     of the enactment of the Expanding American Homeownership Act 
     of 2008, the Secretary shall, in consultation with other 
     relevant Federal departments and agencies, prescribe 
     regulations to help protect elderly homeowners from the 
     marketing of financial and insurance products not in the 
     interest of such homeowners, including the marketing or sale 
     of an annuity as a condition of obtaining any home equity 
     conversion mortgage.
       ``(2) Consultation.--In developing the regulations required 
     under paragraph (1), the Secretary shall consult with 
     consumer advocates (including recognized experts in consumer 
     protection), industry representatives, representatives of 
     counseling organizations, and other interested parties.''.
       (d) Limitation on Origination Fees.--Section 255 of the 
     National Housing Act (12 U.S.C. 1715z-20), as amended by the 
     preceding provisions of this section, is further amended--
       (1) by redesignating subsections (k), (l), and (m) as 
     subsections (l), (m), and (n), respectively; and
       (2) by inserting after subsection (j) the following new 
     subsection:
       ``(k) Limitation on Origination Fees.--The Secretary shall 
     establish limits on the origination fee that may be charged 
     to a mortgagor under a mortgage insured under this section, 
     which limitations shall--
       ``(1) be equal to 2.0 percent of the maximum claim amount 
     of the mortgage up to a maximum claim amount of $200,000 plus 
     1 percent of any portion of the maximum claim amount that is 
     greater than $200,000, unless adjusted thereafter on the 
     basis of an analysis of (A) costs to mortgagors, and (B) the 
     impact on the reverse mortgage market;
       ``(2) be subject to a minimum allowable amount;
       ``(3) provide that the origination fee may be fully 
     financed with the mortgage;
       ``(4) include any fees paid to correspondent mortgagees 
     approved by the Secretary or to mortgage brokers;
       ``(5) apply beginning upon the date that the maximum dollar 
     amount limitation on the benefits of insurance under this 
     section is first increased pursuant to the amendments made by 
     section 219(a)(3) of the Expanding American Homeownership Act 
     of 2008; and
       ``(6) be subject to a maximum origination fee of $6,000, 
     except that such maximum limit shall be adjusted in 
     accordance with the annual percentage increase in the 
     Consumer Price Index of the Bureau of Labor Statistics of the 
     Department of Labor in increments of $500 only when the 
     percentage increase in such index, when applied to the 
     maximum origination fee, produce dollar increases that exceed 
     $500.''.
       (e) Study Regarding Mortgage Insurance Premiums.--The 
     Secretary of Housing and Urban Development shall conduct a 
     study regarding mortgage insurance premiums charged under the 
     program under section 255 of the National Housing Act (12 
     U.S.C. 1715z-20) for insurance of home equity conversion 
     mortgages to analyze and determine the effects of reducing 
     the amounts of such premiums from the amounts charged as of 
     the date of the enactment of this Act on: (1) costs to 
     mortgagors; and (2) the financial soundness of the program. 
     Not later than the expiration of the 12-month period 
     beginning on the date of the enactment of this Act, the 
     Secretary shall submit a report to the Congress setting forth 
     the results and conclusions of the study.
       (f) Purchase Authority of Fannie Mae and Freddie Mac.--
       (1) Fannie mae.--Section 302(b) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1717(b)) is 
     amended by adding at the end the following:
       ``(7) The corporation is authorized to purchase, service, 
     sell, lend on the security of, and otherwise deal in any 
     mortgage insured under section 255 of the National Housing 
     Act (12 U.S.C. 1715z-20), notwithstanding the limitations 
     under paragraph (2) on the maximum original principal 
     obligations of mortgages.''.
       (2) Freddie mac.--Section 305(a) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1454(a)) is amended by 
     adding at the end the following:
       ``(6) The Corporation is authorized to purchase, service, 
     sell, lend on the security of, and otherwise deal in any 
     mortgage insured under section 255 of the National Housing 
     Act (12 U.S.C. 1715z-20), notwithstanding the limitations 
     under paragraph (2) on the maximum original principal 
     obligations of mortgages.''.

     SEC. 220. STUDY ON PARTICIPATION OF MORTGAGE BROKERS AND 
                   CORRESPONDENT LENDERS.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study, which shall be completed not later 
     than the expiration of the 12-month period beginning on the 
     date of the enactment of this Act, which shall analyze and 
     determine--
       (1) the extent to which the financial audit and net worth 
     requirements impede participation by mortgage brokers and 
     correspondent lenders in the mortgage insurance programs 
     under the National Housing Act, as measured by the number and 
     value of such insured mortgages, disaggregated by the States 
     in which the properties subject to such mortgages are 
     located;
       (2) the extent and effectiveness of the financial audit and 
     net worth requirements in protecting the Mutual Mortgage 
     Insurance Fund;
       (3) the extent and effectiveness of the supervision and 
     quality control enforcement, by the Secretary, of mortgagees 
     in the FHA program, separate from the financial audit and net 
     worth requirements for participation, in protecting the 
     Mutual Mortgage Insurance Fund;
       (4) the extent to which allowing a mortgage broker to 
     secure a surety bond in lieu of the financial audit and net 
     worth requirements would increase participation by mortgage 
     brokers and correspondent lenders in the mortgage insurance 
     programs under the National Housing Act;
       (5) the extent to which allowing a mortgage broker to 
     secure a surety bond in lieu of the financial audit and net 
     worth requirements would protect the Mutual Mortgage 
     Insurance Fund; and
       (6) the potential impact of such changes on the costs 
     incurred by the Secretary of Housing and Urban Development in 
     administering the mortgage insurance programs under such Act.
       (b) GAO Report.--Not later than the expiration of the 12-
     month period beginning on the date of the enactment of this 
     Act, the Comptroller General shall submit a report to the 
     Congress and the Secretary of Housing and Urban Development 
     setting forth the results and conclusions of the study 
     conducted pursuant to subsection (a).
       (c) HUD Report.--Not later than the expiration of the 18-
     month period beginning upon the date of the enactment of this 
     Act, the Secretary of Housing and Urban Development may 
     submit a report to the Congress making recommendations 
     regarding any changes in requirements for participation of 
     mortgage brokers and correspondent lenders in the mortgage 
     insurance programs under the National Housing Act arising 
     from a review of the study conducted pursuant to subsection 
     (a).

     SEC. 221. CONFORMING LOAN LIMIT IN DISASTER AREAS.

       Section 203(h) of the National Housing Act (12 U.S.C. 1709) 
     is amended--
       (1) by inserting after ``property'' the following: ``plus 
     any initial service charges, appraisal, inspection and other 
     fees in connection with the mortgage as approved by the 
     Secretary,'';
       (2) by striking the second sentence (as added by chapter 7 
     of the Emergency Supplemental Appropriations Act of 1994 
     (Public Law 103-211; 108 Stat. 12)); and
       (3) by adding at the end the following new sentence: ``In 
     any case in which the single family residence to be insured 
     under this subsection is within a jurisdiction in which the 
     President has declared a major disaster to have occurred, the 
     Secretary is authorized, for a temporary period not to exceed 
     36 months from the date of such Presidential declaration, to 
     enter into agreements to insure a mortgage which involves a 
     principal obligation of up to 100 percent of the dollar 
     limitation determined under section 305(a)(2) of the Federal 
     Home Loan Mortgage Corporation Act for a single family 
     residence, and not in excess of 100 percent of the appraised 
     value of the property plus any initial service charges, 
     appraisal, inspection and other fees in connection with the 
     mortgage as approved by the Secretary.''.

     SEC. 222. FAILURE TO PAY AMOUNTS FROM ESCROW ACCOUNTS FOR 
                   SINGLE FAMILY MORTGAGES.

       (a) Penalties.--Section 536 of the National Housing Act (12 
     U.S.C. 1735f-14) is amended--
       (1) in subsection (a)(1), by inserting ``servicers 
     (including escrow account servicers),'' after 
     ``appraisers,'';
       (2) in subsection (b)(1)--
       (A) in the matter preceding subparagraph (A), by inserting 
     ``or other participant referred to in subsection (a),'' after 
     ``lender,''; and
       (B) by inserting at the end the following new 
     subparagraphs:
       ``(K) In the case of a mortgage for a 1- to 4-family 
     residence insured under title II that requires the mortgagor 
     to make payments to the mortgagee or other servicer of the 
     mortgage for deposit into an escrow account for the purpose 
     of assuring payment of taxes, insurance premiums, and other 
     charges with respect to the property, failure on the part of 
     the servicer to make any such payment from the escrow account 
     by the deadline to avoid a penalty with respect to such 
     payment provided for in the mortgage, unless the servicer was 
     not provided notice of such deadline.
       ``(L) In the case of any failure to make any payment as 
     described in subparagraph (K), submitting any information to 
     a consumer reporting agency (as such term is defined in 
     section 603(f) of the Fair Credit Reporting

[[Page 8185]]

     Act (15 U.S.C. 1681a(f))) regarding such failure that is 
     adverse to the credit rating or interest of the mortgagor.''; 
     and
       (3) in subsection (c)(3), by adding at the end the 
     following: ``In the case of any failure to make a payment 
     described in subsection (b)(1)(K) for which the servicer 
     fails to reimburse the mortgagor (A) before the expiration of 
     the 60-day period beginning on the deadline to avoid a 
     penalty with respect to such payment, in the sum of the 
     amount not paid from the escrow account by such deadline and 
     the amount of any penalties accruing to the mortgagor that 
     are attributable to such failure, or (B) in the amount of any 
     attorneys fees incurred by the mortgagor and attributable to 
     such failure, the Secretary shall increase the amount of the 
     penalty under subsection (a) for any such failure to 
     reimburse, unless the Secretary determines there are 
     mitigating circumstances.''.
       (b) Prohibition on Submission of Information by HUD.--Title 
     II of the National Housing Act (12 U.S.C. 1707 et seq.) is 
     amended by adding at the end the following new section:

     ``SEC. 257. PROHIBITION REGARDING FAILURE ON PART OF SERVICER 
                   TO MAKE ESCROW PAYMENTS.

       ``In the case of any failure to make any payment as 
     described in section 536(b)(1)(K), the Secretary may not 
     submit any information to a consumer reporting agency (as 
     such term is defined in section 603(f) of the Fair Credit 
     Reporting Act (15 U.S.C. 1681a(f))) regarding such failure 
     that is adverse to the credit rating or interest of the 
     mortgagor.''.

     SEC. 223. ACCEPTABLE IDENTIFICATION FOR FHA MORTGAGORS.

       (a) In General.--Title II of the National Housing Act is 
     amended by inserting after section 209 (12 U.S.C. 1715) the 
     following new section:

     ``SEC. 210. FORMS OF ACCEPTABLE IDENTIFICATION.

       ``The Secretary may not insure a mortgage under any 
     provision of this title unless the mortgagor under the 
     mortgage provides personal identification in one of the 
     following forms:
       ``(1) A valid social security number verified in accordance 
     with paragraph 3-1 C of chapter 3 of HUD Handbook 4155.1 REV-
     5.
       ``(2) A driver's license or identification card issued by a 
     State in the case of a State that is in compliance with title 
     II of the REAL ID Act of 2005 (title II of division B of 
     Public Law 109-13; 49 U.S.C. 30301 note).
       ``(3) A passport issued by the United States or a foreign 
     government.
       ``(4) A photo identification card issued by the Secretary 
     of Homeland Security (acting through the Director of the 
     United States Citizenship and Immigration Services).''.
       (b) Effective Date.--The requirements of section 210 of the 
     National Housing Act (as added by subsection (a) of this 
     section) shall take effect 6 months after the date of the 
     enactment of this Act.

     SEC. 224. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS 
                   WITHOUT SUFFICIENT CREDIT HISTORY.

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

     ``SEC. 258. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS 
                   WITHOUT SUFFICIENT CREDIT HISTORY.

       ``(a) Establishment.--The Secretary shall carry out a pilot 
     program to establish, and make available to mortgagees, an 
     automated process for providing alternative credit rating 
     information for mortgagors and prospective mortgagors under 
     mortgages on 1- to 4-family residences to be insured under 
     this title who have insufficient credit histories for 
     determining their creditworthiness. Such alternative credit 
     rating information may include rent, utilities, and insurance 
     payment histories, and such other information as the 
     Secretary considers appropriate.
       ``(b) Scope.--The Secretary may carry out the pilot program 
     under this section on a limited basis or scope, and may 
     consider limiting the program--
       ``(1) to first-time homebuyers; or
       ``(2) metropolitan statistical areas significantly impacted 
     by subprime lending.
       ``(c) Limitation.--In any fiscal year, the aggregate number 
     of mortgages insured pursuant to the automated process 
     established under this section may not exceed 5 percent of 
     the aggregate number of mortgages for 1- to 4-family 
     residences insured by the Secretary under this title during 
     the preceding fiscal year.
       ``(d) Sunset.--After the expiration of the 5-year period 
     beginning on the date of the enactment of the Expanding 
     American Homeownership Act of 2008, the Secretary may not 
     enter into any new commitment to insure any mortgage, or 
     newly insure any mortgage, pursuant to the automated process 
     established under this section.''.
       (b) GAO Report.--Not later than the expiration of the 4-
     year period beginning on the date that the Secretary of 
     Housing and Urban Development first insures any mortgage 
     pursuant to the automated process established under pilot 
     program under section 258 of the National Housing Act (as 
     added by the amendment made by subsection (a) of this 
     section), the Comptroller General of the United States shall 
     submit to the Congress a report identifying the number of 
     additional mortgagors served using such automated process and 
     the impact of such process and the insurance of mortgages 
     pursuant to such process on the safety and soundness of the 
     insurance funds under the National Housing Act of which such 
     mortgages are obligations.

     SEC. 225. SENSE OF CONGRESS REGARDING TECHNOLOGY FOR 
                   FINANCIAL SYSTEMS.

       (a) Congressional Findings.--The Congress finds the 
     following:
       (1) The Government Accountability Office has cited the FHA 
     single family housing mortgage insurance program as a ``high-
     risk'' program, with a primary reason being non-integrated 
     and out-dated financial management systems.
       (2) The ``Audit of the Federal Housing Administration's 
     Financial Statements for Fiscal Years 2004 and 2003'', 
     conducted by the Inspector General of the Department of 
     Housing and Urban Development reported as a material weakness 
     that ``HUD/FHA's automated data processing [ADP] system 
     environment must be enhanced to more effectively support 
     FHA's business and budget processes''.
       (3) Existing technology systems for the FHA program have 
     not been updated to meet the latest standards of the Mortgage 
     Industry Standards Maintenance Organization and have numerous 
     deficiencies that lenders have outlined.
       (4) Improvements to technology used in the FHA program 
     will--
       (A) allow the FHA program to improve the management of the 
     FHA portfolio, garner greater efficiencies in its operations, 
     and lower costs across the program;
       (B) result in efficiencies and lower costs for lenders 
     participating in the program, allowing them to better use the 
     FHA products in extending homeownership opportunities to 
     higher credit risk or lower-income families, in a sound 
     manner.
       (5) The Mutual Mortgage Insurance Fund operates without 
     cost to the taxpayers and generates revenues for the Federal 
     Government.
       (b) Sense of Congress.--It is the sense of the Congress 
     that--
       (1) the Secretary of Housing and Urban Development should 
     use a portion of the funds received from premiums paid for 
     FHA single family housing mortgage insurance that are in 
     excess of the amounts paid out in claims to substantially 
     increase the funding for technology used in such FHA program;
       (2) the goal of this investment should be to bring the 
     technology used in such FHA program to the level and 
     sophistication of the technology used in the conventional 
     mortgage lending market, or to exceed such level; and
       (3) the Secretary of Housing and Urban Development should 
     report to the Congress not later than 180 days after the date 
     of the enactment of this Act regarding the progress the 
     Department is making toward such goal and if progress is not 
     sufficient, the resources needed to make greater progress.

     SEC. 226. CLARIFICATION OF DISPOSITION OF CERTAIN PROPERTIES.

       Notwithstanding any other provision of law, subtitle A of 
     title II of the Deficit Reduction Act of 2005 (12 U.S.C. 
     1701z-11 note) and the amendments made by such title shall 
     not apply to any transaction regarding a multifamily real 
     property for which--
       (1) the Secretary of Housing and Urban Development has 
     received, before the date of the enactment of such Act, 
     written expressions of interest in purchasing the property 
     from both a city government and the housing commission of 
     such city;
       (2) after such receipt, the Secretary acquires title to the 
     property at a foreclosure sale; and
       (3) such city government and housing commission have 
     resolved a previous disagreement with respect to the 
     disposition of the property.

     SEC. 227. VALUATION OF MULTIFAMILY PROPERTIES IN 
                   NONCOMPETITIVE SALES BY HUD TO STATES AND 
                   LOCALITIES.

       Subtitle A of title II of the Deficit Reduction Act of 2005 
     (Public Law 109-171; 120 Stat. 7) is amended by adding at the 
     end the following new section:

     ``SEC. 2004. VALUATION OF MULTIFAMILY PROPERTIES IN 
                   NONCOMPETITIVE SALES BY HUD TO STATES AND 
                   LOCALITIES.

       `` `Notwithstanding any other provision of law, in 
     determining the market value of any multifamily real property 
     or multifamily loan for any noncompetitive sale to a State or 
     local government entity occurring during fiscal year 2008, 
     the Secretary shall consider, but not be limited to, industry 
     standard appraisal practices, including the cost of repairs 
     needed to bring the property at least to minimum State and 
     local code standards and of maintaining the existing 
     affordability restrictions imposed by the Secretary on the 
     multifamily real property or multifamily loan.'.''.

     SEC. 228. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.

       Notwithstanding any other provision of law, including any 
     provision of this subtitle and any amendment made by this 
     subtitle--
       (1) the premiums charged for mortgage insurance under any 
     program under the National Housing Act may not be increased

[[Page 8186]]

     above the premium amounts in effect under such program on 
     October 1, 2006, unless the Secretary of Housing and Urban 
     Development determines that, absent such increase, insurance 
     of additional mortgages under such program would, under the 
     Federal Credit Reform Act of 1990, require the appropriation 
     of new budget authority to cover the costs (as such term is 
     defined in section 502 of the Federal Credit Reform Act of 
     1990 (2 U.S.C. 661a) of such insurance; and
       (2) a premium increase pursuant to paragraph (1) may be 
     made only by rule making in accordance with the procedures 
     under section 553 of title 5, United States Code 
     (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of 
     such section).

     SEC. 229. CIVIL MONEY PENALTIES FOR IMPROPERLY INFLUENCING 
                   APPRAISALS.

       Paragraph (2) of section 536(b) of the National Housing Act 
     (12 U.S.C. 1735f-14(b)(2)) is amended--
       (1) in subparagraph (B), by striking ``or'' at the end;
       (2) in subparagraph (C), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following new subparagraph:
       ``(D) in the case of an insured mortgage under title II for 
     a 1- to 4-family residence, compensating, instructing, 
     inducing, coercing, or intimidating any person who conducts 
     an appraisal of the property in connection with such 
     mortgage, or attempting to compensate, instruct, induce, 
     coerce, or intimidate such a person, for the purpose of 
     causing the appraised value assigned to the property under 
     the appraisal to be based on any other factor other than the 
     independent judgment of such person exercised in accordance 
     with applicable professional standards.''.

     SEC. 230. MORTGAGE INSURANCE PREMIUM REFUNDS.

       (a) Authority.--The Secretary of Housing and Urban 
     Development shall, to the extent that amounts are made 
     available pursuant to subsection (c), provide refunds of 
     unearned premium charges paid, at the time of insurance, for 
     mortgage insurance under title II of the National Housing Act 
     (12 U.S.C. 1707 et seq.) to or on behalf of mortgagors under 
     mortgages described in subsection (b).
       (b) Eligible Mortgages.--A mortgage described in this 
     section is a mortgage on a one- to four-family dwelling 
     that--
       (1) was insured under title II of the National Housing Act 
     (12 U.S.C. 1707 et seq.);
       (2) is otherwise eligible, under the last sentence of 
     subparagraph (A) of section 203(c)(2) of such Act (12 U.S.C. 
     1709(c)(2)(A)), for a refund of all unearned premium charges 
     paid on the mortgage pursuant to such subparagraph, except 
     that the mortgage--
       (A) was closed before December 8, 2004; and
       (B) was endorsed on or after such date.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated for each fiscal year such sums as may be 
     necessary to provide refunds of unearned mortgage insurance 
     premiums pursuant to this section.

     SEC. 231. SAVINGS PROVISION.

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

     SEC. 232. IMPLEMENTATION.

       Except as provided in section 223(b), the Secretary of 
     Housing and Urban Development shall by notice establish any 
     additional requirements that may be necessary to immediately 
     carry out the provisions of this subtitle. The notice shall 
     take effect upon issuance.

   Subtitle B--FHA Manufactured Housing Loan Insurance Modernization

     SECTION 251. SHORT TITLE.

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

     SEC. 252. FINDINGS AND PURPOSES.

       (a) Findings.--The Congress finds that--
       (1) manufactured housing plays a vital role in providing 
     housing for low- and moderate-income families in the United 
     States;
       (2) the FHA title I insurance program for manufactured home 
     loans traditionally has been a major provider of mortgage 
     insurance for home-only transactions;
       (3) the manufactured housing market is in the midst of a 
     prolonged downturn which has resulted in a severe contraction 
     of traditional sources of private lending for manufactured 
     home purchases;
       (4) during past downturns the FHA title I insurance program 
     for manufactured homes has filled the lending void by 
     providing stability until the private markets could recover;
       (5) in 1992, during the manufactured housing industry's 
     last major recession, over 30,000 manufactured home loans 
     were insured under title I;
       (6) in 2006, fewer than 1,500 manufactured housing loans 
     were insured under title I;
       (7) the loan limits for title I manufactured housing loans 
     have not been adjusted for inflation since 1992; and
       (8) these problems with the title I program have resulted 
     in an atrophied market for manufactured housing loans, 
     leaving American families who have the most difficulty 
     achieving homeownership without adequate financing options 
     for home-only manufactured home purchases.
       (b) Purposes.--The purposes of this subtitle are--
       (1) to provide adequate funding for FHA-insured 
     manufactured housing loans for low- and moderate-income 
     homebuyers during all economic cycles in the manufactured 
     housing industry;
       (2) to modernize the FHA title I insurance program for 
     manufactured housing loans to enhance participation by Ginnie 
     Mae and the private lending markets; and
       (3) to adjust the low loan limits for title I manufactured 
     home loan insurance to reflect the increase in costs since 
     such limits were last increased in 1992 and to index the 
     limits to inflation.

     SEC. 253. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION 
                   PORTFOLIO.

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

     SEC. 254. INSURANCE BENEFITS.

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

     SEC. 255. MAXIMUM LOAN LIMITS.

       (a) Dollar Amounts.--Paragraph (1) of section 2(b) of the 
     National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
       (1) in clause (ii) of subparagraph (A), by striking 
     ``$17,500'' and inserting ``$25,090'';
       (2) in subparagraph (C) by striking ``$48,600'' and 
     inserting ``$69,678'';
       (3) in subparagraph (D) by striking ``$64,800'' and 
     inserting ``$92,904'';
       (4) in subparagraph (E) by striking ``$16,200'' and 
     inserting ``$23,226''; and
       (5) by realigning subparagraphs (C), (D), and (E) 2 ems to 
     the left so that the left margins of such subparagraphs are 
     aligned with the margins of subparagraphs (A) and (B).
       (b) Annual Indexing.--Subsection (b) of section 2 of the 
     National Housing Act (12 U.S.C. 1703(b)), as amended by the 
     preceding provisions of this subtitle, is further amended by 
     adding at the end the following new paragraph:
       ``(9) Annual indexing of manufactured housing loans.--The 
     Secretary shall develop a method of indexing in order to 
     annually adjust the loan limits established in subparagraphs 
     (A)(ii), (C), (D), and (E) of this subsection. Such index 
     shall be based on the manufactured housing price data 
     collected by the United States Census Bureau. The Secretary 
     shall establish such index no later than one year after the 
     date of the enactment of the FHA Manufactured Housing Loan 
     Modernization Act of 2008.''.
       (c) Technical and Conforming Changes.--Paragraph (1) of 
     section 2(b) of the National Housing Act (12 U.S.C. 
     1703(b)(1)) is amended--
       (1) by striking ``No'' and inserting ``Except as provided 
     in the last sentence of this paragraph, no''; and
       (2) by adding after and below subparagraph (G) the 
     following:

     ``The Secretary shall, by regulation, annually increase the 
     dollar amount limitations in subparagraphs (A)(ii), (C), (D), 
     and (E) (as such limitations may have been previously 
     adjusted under this sentence) in accordance with the index 
     established pursuant to paragraph (9).''.

     SEC. 256. INSURANCE PREMIUMS.

       Subsection (f) of section 2 of the National Housing Act (12 
     U.S.C. 1703(f)) is amended--
       (1) by inserting ``(1) Premium Charges.--'' after ``(f)''; 
     and
       (2) by adding at the end the following new paragraph:
       ``(2) Manufactured Home Loans.--Notwithstanding paragraph 
     (1), in the case of a loan, advance of credit, or purchase in 
     connection with a manufactured home or a lot on which to 
     place such a home (or both), the premium charge for the 
     insurance granted under this section shall be paid by the 
     borrower under the loan or advance of credit, as follows:
       ``(A) At the time of the making of the loan, advance of 
     credit, or purchase, a single premium payment in an amount 
     not to exceed 2.25 percent of the amount of the original 
     insured principal obligation.

[[Page 8187]]

       ``(B) In addition to the premium under subparagraph (A), 
     annual premium payments during the term of the loan, advance, 
     or obligation purchased in an amount not exceeding 1.0 
     percent of the remaining insured principal balance (excluding 
     the portion of the remaining balance attributable to the 
     premium collected under subparagraph (A) and without taking 
     into account delinquent payments or prepayments).
       ``(C) Premium charges under this paragraph shall be 
     established in amounts that are sufficient, but do not exceed 
     the minimum amounts necessary, to maintain a negative credit 
     subsidy for the program under this section for insurance of 
     loans, advances of credit, or purchases in connection with a 
     manufactured home or a lot on which to place such a home (or 
     both), as determined based upon risk to the Federal 
     Government under existing underwriting requirements.
       ``(D) The Secretary may increase the limitations on premium 
     payments to percentages above those set forth in 
     subparagraphs (A) and (B), but only if necessary, and not in 
     excess of the minimum increase necessary, to maintain a 
     negative credit subsidy as described in subparagraph (C).''.

     SEC. 257. TECHNICAL CORRECTIONS.

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

     SEC. 258. REVISION OF UNDERWRITING CRITERIA.

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

     SEC. 259. REQUIREMENT OF SOCIAL SECURITY ACCOUNT NUMBER FOR 
                   ASSISTANCE.

       Section 2 of the National Housing Act (12 U.S.C. 1703) is 
     amended by adding at the end the following new subsection:
       ``(j) Requirement of Social Security Account Number for 
     Financing.--No insurance shall be granted under this section 
     with respect to any obligation representing any loan, advance 
     of credit, or purchase by a financial institution unless the 
     borrower to which the loan or advance of credit was made has 
     a valid social security number.''.

     SEC. 260. GAO STUDY OF MITIGATION OF TORNADO RISKS TO 
                   MANUFACTURED HOMES.

       The Comptroller General of the United States shall assess 
     how the Secretary of Housing and Urban Development utilizes 
     the FHA manufactured housing loan insurance program under 
     title I of the National Housing Act, the community 
     development block grant program under title I of the Housing 
     and Community Development Act of 1974, and other programs and 
     resources available to the Secretary to mitigate the risks to 
     manufactured housing residents and communities resulting from 
     tornados. The Comptroller General shall submit to the 
     Congress a report on the conclusions and recommendations of 
     the assessment conducted pursuant to this section not later 
     than the expiration of the 12-month period beginning on the 
     date of the enactment of this Act.

 TITLE III--REFORM OF GOVERNMENT-SPONSORED ENTITIES FOR HOUSING FINANCE

     SEC. 301. SHORT TITLE.

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

     SEC. 302. DEFINITIONS.

       Section 1303 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4502) is amended--
       (1) in paragraph (7), by striking ``an enterprise'' and 
     inserting ``a regulated entity'';
       (2) by striking ``the enterprise'' each place such term 
     appears (except in paragraphs (4) and (18)) and inserting 
     ``the regulated entity'';
       (3) in paragraph (5), by striking ``Office of Federal 
     Housing Enterprise Oversight of the Department of Housing and 
     Urban Development'' and inserting ``Federal Housing Finance 
     Agency'';
       (4) in each of paragraphs (8), (9), (10), and (19), by 
     striking ``Secretary'' each place that term appears and 
     inserting ``Director'';
       (5) in paragraph (13), by inserting ``, with respect to an 
     enterprise,'' after ``means'';
       (6) by redesignating paragraphs (16) through (19) as 
     paragraphs (20) through (23), respectively;
       (7) by striking paragraphs (14) and (15) and inserting the 
     following new paragraphs:
       ``(18) Regulated entity.--The term `regulated entity' 
     means--
       ``(A) the Federal National Mortgage Association and any 
     affiliate thereof;
       ``(B) the Federal Home Loan Mortgage Corporation and any 
     affiliate thereof; and
       ``(C) each Federal home loan bank.
       ``(19) Regulated entity-affiliated party.--The term 
     `regulated entity-affiliated party' means--
       ``(A) any director, officer, employee, or agent for, a 
     regulated entity, or controlling shareholder of an 
     enterprise;
       ``(B) any shareholder, affiliate, consultant, or joint 
     venture partner of a regulated entity, and any other person, 
     as determined by the Director (by regulation or on a case-by-
     case basis) that participates in the conduct of the affairs 
     of a regulated entity, except that a shareholder of a 
     regulated entity shall not be considered to have participated 
     in the affairs of that regulated entity solely by reason of 
     being a member or customer of the regulated entity;
       ``(C) any independent contractor for a regulated entity 
     (including any attorney, appraiser, or accountant), if--
       ``(i) the independent contractor knowingly or recklessly 
     participates in--

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

       ``(ii) such violation, breach, or practice caused, or is 
     likely to cause, more than a minimal financial loss to, or a 
     significant adverse effect on, the regulated entity; and
       ``(D) any not-for-profit corporation that receives its 
     principal funding, on an ongoing basis, from any regulated 
     entity.''.
       (8) by redesignating paragraphs (8) through (13) as 
     paragraphs (12) through (17), respectively; and
       (9) by inserting after paragraph (7) the following new 
     paragraph:
       ``(11) Federal home loan bank.--The term `Federal home loan 
     bank' means a bank established under the authority of the 
     Federal Home Loan Bank Act.'';
       (10) by redesignating paragraphs (2) through (7) as 
     paragraphs (5) through (10), respectively; and
       (11) by inserting after paragraph (1) the following new 
     paragraphs:
       ``(2) Agency.--The term `Agency' means the Federal Housing 
     Finance Agency.
       ``(3) Authorizing statutes.--The term `authorizing 
     statutes' means--
       ``(A) the Federal National Mortgage Association Charter 
     Act;
       ``(B) the Federal Home Loan Mortgage Corporation Act; and
       ``(C) the Federal Home Loan Bank Act.

[[Page 8188]]

       ``(4) Board.--The term `Board' means the Federal Housing 
     Enterprise Board established under section 1313B.''.

 Subtitle A--Reform of Regulation of Enterprises and Federal Home Loan 
                                 Banks

             CHAPTER 1--IMPROVEMENT OF SAFETY AND SOUNDNESS

     SEC. 311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE 
                   AGENCY.

       (a) In General.--The Housing and Community Development Act 
     of 1992 (12 U.S.C. 4501 et seq.) is amended by striking 
     sections 1311 and 1312 and inserting the following:

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

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

     ``SEC. 1312. DIRECTOR.

       ``(a) Establishment of Position.--There is established the 
     position of the Director of the Federal Housing Finance 
     Agency, who shall be the head of the Agency.
       ``(b) Appointment; Term.--
       ``(1) Appointment.--The Director shall be appointed by the 
     President, by and with the advice and consent of the Senate, 
     from among individuals who are citizens of the United States, 
     have a demonstrated understanding of financial management or 
     oversight, and have a demonstrated understanding of capital 
     markets, including the mortgage securities markets and 
     housing finance.
       ``(2) Term and removal.--The Director shall be appointed 
     for a term of 5 years and may be removed by the President 
     only for cause.
       ``(3) Vacancy.--A vacancy in the position of Director that 
     occurs before the expiration of the term for which a Director 
     was appointed shall be filled in the manner established under 
     paragraph (1), and the Director appointed to fill such 
     vacancy shall be appointed only for the remainder of such 
     term.
       ``(4) Service after end of term.--An individual may serve 
     as the Director after the expiration of the term for which 
     appointed until a successor has been appointed.
       ``(5) Transitional provision.--Notwithstanding paragraphs 
     (1) and (2), the Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development shall serve as the Director until a successor has 
     been appointed under paragraph (1).
       ``(c) Deputy Director of the Division of Enterprise 
     Regulation.--
       ``(1) In general.--The Agency shall have a Deputy Director 
     of the Division of Enterprise Regulation, who shall be 
     appointed by the Director from among individuals who are 
     citizens of the United States, and have a demonstrated 
     understanding of financial management or oversight and of 
     mortgage securities markets and housing finance.
       ``(2) Functions.--The Deputy Director of the Division of 
     Enterprise Regulation shall have such functions, powers, and 
     duties with respect to the oversight of the enterprises as 
     the Director shall prescribe.
       ``(d) Deputy Director of the Division of Federal Home Loan 
     Bank Regulation.--
       ``(1) In general.--The Agency shall have a Deputy Director 
     of the Division of Federal Home Loan Bank Regulation, who 
     shall be appointed by the Director from among individuals who 
     are citizens of the United States, have a demonstrated 
     understanding of financial management or oversight and of the 
     Federal Home Loan Bank System and housing finance.
       ``(2) Functions.--The Deputy Director of the Division of 
     Federal Home Loan Bank Regulation shall have such functions, 
     powers, and duties with respect to the oversight of the 
     Federal home loan banks as the Director shall prescribe.
       ``(e) Deputy Director for Housing.--
       ``(1) In general.--The Agency shall have a Deputy Director 
     for Housing, who shall be appointed by the Director from 
     among individuals who are citizens of the United States, and 
     have a demonstrated understanding of the housing markets and 
     housing finance and of community and economic development.
       ``(2) Functions.--The Deputy Director for Housing shall 
     have such functions, powers, and duties with respect to the 
     oversight of the housing mission and goals of the 
     enterprises, and with respect to oversight of the housing 
     finance and community and economic development mission of the 
     Federal home loan banks, as the Director shall prescribe.
       ``(f) Limitations.--The Director and each of the Deputy 
     Directors may not--
       ``(1) have any direct or indirect financial interest in any 
     regulated entity or regulated entity-affiliated party;
       ``(2) hold any office, position, or employment in any 
     regulated entity or regulated entity-affiliated party; or
       ``(3) have served as an executive officer or director of 
     any regulated entity, or regulated entity-affiliated party, 
     at any time during the 3-year period ending on the date of 
     appointment of such individual as Director or Deputy 
     Director.
       ``(g) Ombudsman.--The Director shall establish the position 
     of the Ombudsman in the Agency. The Director shall provide 
     that the Ombudsman will consider complaints and appeals from 
     any regulated entity and any person that has a business 
     relationship with a regulated entity and shall specify the 
     duties and authority of the Ombudsman.''.
       (b) Appointment of Director.--Notwithstanding any other 
     provision of law or of this title, the President may, any 
     time after the date of the enactment of this Act, appoint an 
     individual to serve as the Director of the Federal Housing 
     Finance Agency, as such office is established by the 
     amendment made by subsection (a). This subsection shall take 
     effect on the date of the enactment of this Act.

     SEC. 312. DUTIES AND AUTHORITIES OF DIRECTOR.

       (a) In General.--The Housing and Community Development Act 
     of 1992 (12 U.S.C. 4513) is amended by striking section 1313 
     and inserting the following new sections:

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

       ``(a) Duties.--
       ``(1) Principal duties.--The principal duties of the 
     Director shall be--
       ``(A) to oversee the operations of each regulated entity 
     and any joint office of the Federal Home Loan Banks; and
       ``(B) to ensure that--
       ``(i) each regulated entity operates in a safe and sound 
     manner, including maintenance of adequate capital and 
     internal controls;
       ``(ii) the operations and activities of each regulated 
     entity foster liquid, efficient, competitive, and resilient 
     national housing finance markets that minimize the cost of 
     housing finance (including activities relating to mortgages 
     on housing for low- and moderate- income families involving a 
     reasonable economic return that may be less than the return 
     earned on other activities);
       ``(iii) each regulated entity complies with this title and 
     the rules, regulations, guidelines, and orders issued under 
     this title and the authorizing statutes; and
       ``(iv) each regulated entity carries out its statutory 
     mission only through activities that are consistent with this 
     title and the authorizing statutes.
       ``(2) Scope of authority.--The authority of the Director 
     shall include the authority--
       ``(A) to review and, if warranted based on the principal 
     duties described in paragraph (1), reject any acquisition or 
     transfer of a controlling interest in an enterprise; and
       ``(B) to exercise such incidental powers as may be 
     necessary or appropriate to fulfill the duties and 
     responsibilities of the Director in the supervision and 
     regulation of each regulated entity.
       ``(b) Delegation of Authority.--The Director may delegate 
     to officers or employees of the Agency, including each of the 
     Deputy Directors, any of the functions, powers, or duties of 
     the Director, as the Director considers appropriate.
       ``(c) Litigation Authority.--
       ``(1) In general.--In enforcing any provision of this 
     title, any regulation or order prescribed under this title, 
     or any other provision of law, rule, regulation, or order, or 
     in any other action, suit, or proceeding to which the 
     Director is a party or in which the Director is interested, 
     and in the administration of conservatorships and 
     receiverships, the Director may act in the Director's own 
     name and through the Director's own attorneys, or request 
     that the Attorney General of the United States act on behalf 
     of the Director.
       ``(2) Consultation with attorney general.--The Director 
     shall provide notice to, and consult with, the Attorney 
     General of the United States before taking an action under 
     paragraph (1) of this subsection or under section 1344(a), 
     1345(d), 1348(c), 1372(e), 1375(a), 1376(d), or 1379D(c), 
     except that, if the Director determines that any delay caused 
     by such prior notice and consultation may adversely affect 
     the safety and soundness responsibilities of the Director 
     under this title, the Director shall notify the Attorney 
     General as soon as reasonably possible after taking such 
     action.
       ``(3) Subject to suit.--Except as otherwise provided by 
     law, the Director shall be subject to suit (other than suits 
     on claims for

[[Page 8189]]

     money damages) by a regulated entity or director or officer 
     thereof with respect to any matter under this title or any 
     other applicable provision of law, rule, order, or regulation 
     under this title, in the United States district court for the 
     judicial district in which the regulated entity has its 
     principal place of business, or in the United States District 
     Court for the District of Columbia, and the Director may be 
     served with process in the manner prescribed by the Federal 
     Rules of Civil Procedure.

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

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

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

       ``(iii) Require the regulated entity to take any other 
     action that the Director determines will better carry out the 
     purposes of this section than any of the actions described in 
     this subparagraph.
       ``(3) Mandatory restrictions.--In complying with paragraph 
     (2), the Director shall take one or more of the actions 
     described in clauses (i) through (iii) of paragraph (2)(B) 
     if--
       ``(A) the Director determines that the regulated entity 
     fails to meet any standard prescribed under subsection (a);
       ``(B) the regulated entity has not corrected the 
     deficiency; and
       ``(C) during the 18-month period before the date on which 
     the regulated entity first failed to meet the standard, the 
     entity underwent extraordinary growth, as defined by the 
     Director.
       ``(c) Other Enforcement Authority Not Affected.--The 
     authority of the Director under this section is in addition 
     to any other authority of the Director.''.
       (b) Independence in Congressional Testimony and 
     Recommendations.--Section 111 of Public Law 93-495 (12 U.S.C. 
     250) is amended by striking ``the Federal Housing Finance 
     Board'' and inserting ``the Director of the Federal Housing 
     Finance Agency''.

     SEC. 313. FEDERAL HOUSING ENTERPRISE BOARD.

       (a) In General.--Title XIII of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4501 et seq.) is amended 
     by inserting after section 1313A, as added by the preceding 
     provisions of this title, the following new section:

     ``SEC. 1313B. FEDERAL HOUSING ENTERPRISE BOARD.

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

     SEC. 314. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.

       Section 1314 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4514) is amended--

[[Page 8190]]

       (1) in the section heading, by striking ``ENTERPRISES'' and 
     inserting ``REGULATED ENTITIES'';
       (2) in subsection (a)--
       (A) in the subsection heading, by striking ``Special 
     Reports and Reports of Financial Condition'' and inserting 
     ``Regular and Special Reports'';
       (B) in paragraph (1)--
       (i) in the paragraph heading, by striking ``Financial 
     condition'' and inserting ``Regular reports''; and
       (ii) by striking ``reports of financial condition and 
     operations'' and inserting ``regular reports on the condition 
     (including financial condition), management, activities, or 
     operations of the regulated entity, as the Director considers 
     appropriate''; and
       (C) in paragraph (2), after ``submit special reports'' 
     insert ``on any of the topics specified in paragraph (1) or 
     such other topics''; and
       (3) by adding at the end the following new subsection:
       ``(c) Reports of Fraudulent Financial Transactions.--
       ``(1) Requirement to report.--The Director shall require a 
     regulated entity to submit to the Director a timely report 
     upon discovery by the regulated entity that it has purchased 
     or sold a fraudulent loan or financial instrument or suspects 
     a possible fraud relating to a purchase or sale of any loan 
     or financial instrument. The Director shall require the 
     regulated entities to establish and maintain procedures 
     designed to discover any such transactions.
       ``(2) Protection from liability for reports.--
       ``(A) In general.--If a regulated entity makes a report 
     pursuant to paragraph (1), or a regulated entity-affiliated 
     party makes, or requires another to make, such a report, and 
     such report is made in a good faith effort to comply with the 
     requirements of paragraph (1), such regulated entity or 
     regulated entity-affiliated party shall not be liable to any 
     person under any law or regulation of the United States, any 
     constitution, law, or regulation of any State or political 
     subdivision of any State, or under any contract or other 
     legally enforceable agreement (including any arbitration 
     agreement), for such report or for any failure to provide 
     notice of such report to the person who is the subject of 
     such report or any other person identified in the report.
       ``(B) Rule of construction.--Subparagraph (A) shall not be 
     construed as creating--
       ``(i) any inference that the term `person', as used in such 
     subparagraph, may be construed more broadly than its ordinary 
     usage so as to include any government or agency of 
     government; or
       ``(ii) any immunity against, or otherwise affecting, any 
     civil or criminal action brought by any government or agency 
     of government to enforce any constitution, law, or regulation 
     of such government or agency.''.

     SEC. 315. DISCLOSURE OF INCOME AND CHARITABLE CONTRIBUTIONS 
                   BY ENTERPRISES.

       Section 1314 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4514), as amended by the preceding 
     provisions of this title, is further amended by adding at the 
     end the following new subsections:
       ``(d) Disclosure of Charitable Contributions by 
     Enterprises.--
       ``(1) Required disclosure.--The Director shall, by 
     regulation, require each enterprise to submit a report 
     annually, in a format designated by the Director, containing 
     the following information:
       ``(A) Total value.--The total value of contributions made 
     by the enterprise to nonprofit organizations during its 
     previous fiscal year.
       ``(B) Substantial contributions.--If the value of 
     contributions made by the enterprise to any nonprofit 
     organization during its previous fiscal year exceeds the 
     designated amount, the name of that organization and the 
     value of contributions.
       ``(C) Substantial contributions to insider-affiliated 
     charities.--Identification of each contribution whose value 
     exceeds the designated amount that were made by the 
     enterprise during the enterprise's previous fiscal year to 
     any nonprofit organization of which a director, officer, or 
     controlling person of the enterprise, or a spouse thereof, 
     was a director or trustee, the name of such nonprofit 
     organization, and the value of the contribution.
       ``(2) Definitions.--For purposes of this subsection--
       ``(A) the term `designated amount' means such amount as may 
     be designated by the Director by regulation, consistent with 
     the public interest and the protection of investors for 
     purposes of this subsection; and
       ``(B) the Director may, by such regulations as the Director 
     deems necessary or appropriate in the public interest, define 
     the terms officer and controlling person.
       ``(3) Public availability.--The Director shall make the 
     information submitted pursuant to this subsection publicly 
     available.
       ``(e) Disclosure of Income.--Each enterprise shall include, 
     in each annual report filed under section 13 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78m), the income 
     reported by the issuer to the Internal Revenue Service for 
     the most recent taxable year. Such income shall--
       ``(1) be presented in a prominent location in each such 
     report and in a manner that permits a ready comparison of 
     such income to income otherwise required to be included in 
     such reports under regulations issued under such section; and
       ``(2) be submitted to the Securities and Exchange 
     Commission in a form and manner suitable for entry into the 
     EDGAR system of such Commission for public availability under 
     such system.''.

     SEC. 316. ASSESSMENTS.

       Section 1316 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4516) is amended--
       (1) by striking subsection (a) and inserting the following 
     new subsection:
       ``(a) Annual Assessments.--The Director shall establish and 
     collect from the regulated entities annual assessments in an 
     amount not exceeding the amount sufficient to provide for 
     reasonable costs and expenses of the Agency, including--
       ``(1) the expenses of any examinations under section 1317 
     of this Act and under section 20 of the Federal Home Loan 
     Bank Act;
       ``(2) the expenses of obtaining any reviews and credit 
     assessments under section 1319;
       ``(3) such amounts in excess of actual expenses for any 
     given year as deemed necessary by the Director to maintain a 
     working capital fund in accordance with subsection (e); and
       ``(4) the wind up of the affairs of the Office of Federal 
     Housing Enterprise Oversight and the Federal Housing Finance 
     Board under subtitle C of the Federal Housing Finance Reform 
     Act of 2008.'';
       (2) in subsection (b)--
       (A) in the subsection heading, by striking ``Enterprises'' 
     and inserting ``Regulated Entities'';
       (B) by realigning paragraph (2) two ems from the left 
     margin, so as to align the left margin of such paragraph with 
     the left margins of paragraph (1);
       (C) in paragraph (1)--
       (i) by striking ``Each enterprise'' and inserting ``Each 
     regulated entity'';
       (ii) by striking ``each enterprise'' and inserting ``each 
     regulated entity''; and
       (iii) by striking ``both enterprises'' and inserting ``all 
     of the regulated entities''; and
       (D) in paragraph (3)--
       (i) in subparagraph (B), by striking ``subparagraph (A)'' 
     and inserting ``clause (i)'';
       (ii) by redesignating subparagraphs (A), (B), and (C) as 
     clauses (i), (ii) and (ii), respectively, and realigning such 
     clauses, as so redesignated, so as to be indented 6 ems from 
     the left margin;
       (iii) by striking the matter that precedes clause (i), as 
     so redesignated, and inserting the following:
       ``(3) Definition of total assets.--For purposes of this 
     section, the term `total assets' means as follows:
       ``(A) Enterprises.--With respect to an enterprise, the sum 
     of--''; and
       (iv) by adding at the end the following new subparagraph:
       ``(B) Federal home loan banks.--With respect to a Federal 
     home loan bank, the total assets of the Bank, as determined 
     by the Director in accordance with generally accepted 
     accounting principles.'';
       (3) by striking subsection (c) and inserting the following 
     new subsection:
       ``(c) Increased Costs of Regulation.--
       ``(1) Increase for inadequate capitalization.--The 
     semiannual payments made pursuant to subsection (b) by any 
     regulated entity that is not classified (for purposes of 
     subtitle B) as adequately capitalized may be increased, as 
     necessary, in the discretion of the Director to pay 
     additional estimated costs of regulation of the regulated 
     entity.
       ``(2) Adjustment for enforcement activities.--The Director 
     may adjust the amounts of any semiannual payments for an 
     assessment under subsection (a) that are to be paid pursuant 
     to subsection (b) by a regulated entity, as necessary in the 
     discretion of the Director, to ensure that the costs of 
     enforcement activities under this Act for a regulated entity 
     are borne only by such regulated entity.
       ``(3) Additional assessment for deficiencies.--If at any 
     time, as a result of increased costs of regulation of a 
     regulated entity that is not classified (for purposes of 
     subtitle B) as adequately capitalized or as the result of 
     supervisory or enforcement activities under this Act for a 
     regulated entity, the amount available from any semiannual 
     payment made by such regulated entity pursuant to subsection 
     (b) is insufficient to cover the costs of the Agency with 
     respect to such entity, the Director may make and collect 
     from such regulated entity an immediate assessment to cover 
     the amount of such deficiency for the semiannual period. If, 
     at the end of any semiannual period during which such an 
     assessment is made, any amount remains from such assessment, 
     such remaining amount shall be deducted from the assessment 
     for such regulated entity for the following semiannual 
     period.'';
       (4) in subsection (d), by striking ``If'' and inserting 
     ``Except with respect to amounts collected pursuant to 
     subsection (a)(3), if''; and
       (5) by striking subsections (e) through (g) and inserting 
     the following new subsections:

[[Page 8191]]

       ``(e) Working Capital Fund.--At the end of each year for 
     which an assessment under this section is made, the Director 
     shall remit to each regulated entity any amount of assessment 
     collected from such regulated entity that is attributable to 
     subsection (a)(3) and is in excess of the amount the Director 
     deems necessary to maintain a working capital fund.
       ``(f) Treatment of Assessments.--
       ``(1) Deposit.--Amounts received by the Director from 
     assessments under this section may be deposited by the 
     Director in the manner provided in section 5234 of the 
     Revised Statutes (12 U.S.C. 192) for monies deposited by the 
     Comptroller of the Currency.
       ``(2) Not government funds.--The amounts received by the 
     Director from any assessment under this section shall not be 
     construed to be Government or public funds or appropriated 
     money.
       ``(3) No apportionment of funds.--Notwithstanding any other 
     provision of law, the amounts received by the Director from 
     any assessment under this section shall not be subject to 
     apportionment for the purpose of chapter 15 of title 31, 
     United States Code, or under any other authority.
       ``(4) Use of funds.--The Director may use any amounts 
     received by the Director from assessments under this section 
     for compensation of the Director and other employees of the 
     Agency and for all other expenses of the Director and the 
     Agency.
       ``(5) Availability of oversight fund amounts.--
     Notwithstanding any other provision of law, any amounts 
     remaining in the Federal Housing Enterprises Oversight Fund 
     established under this section (as in effect before the 
     effective date under section 365 of the Federal Housing 
     Finance Reform Act of 2008), and any amounts remaining from 
     assessments on the Federal Home Loan banks pursuant to 
     section 18(b) of the Federal Home Loan Bank Act (12 U.S.C. 
     1438(b)), shall, upon such effective date, be treated for 
     purposes of this subsection as amounts received from 
     assessments under this section.
       ``(6) Treasury investments.--
       ``(A) Authority.--The Director may request the Secretary of 
     the Treasury to invest such portions of amount received by 
     the Director from assessments paid under this section that, 
     in the Director's discretion, are not required to meet the 
     current working needs of the Agency.
       ``(B) Government obligations.--Pursuant to a request under 
     subparagraph (A), the Secretary of the Treasury shall invest 
     such amounts in government obligations guaranteed as to 
     principal and interest by the United States with maturities 
     suitable to the needs of Agency and bearing interest at a 
     rate determined by the Secretary of the Treasury taking into 
     consideration current market yields on outstanding marketable 
     obligations of the United States of comparable maturity.
       ``(g) Budget and Financial Management.--
       ``(1) Financial operating plans and forecasts.--The 
     Director shall provide to the Director of the Office of 
     Management and Budget copies of the Director's financial 
     operating plans and forecasts as prepared by the Director in 
     the ordinary course of the Agency's operations, and copies of 
     the quarterly reports of the Agency's financial condition and 
     results of operations as prepared by the Director in the 
     ordinary course of the Agency's operations.
       ``(2) Financial statements.--The Agency shall prepare 
     annually a statement of assets and liabilities and surplus or 
     deficit; a statement of income and expenses; and a statement 
     of sources and application of funds.
       ``(3) Financial management systems.--The Agency shall 
     implement and maintain financial management systems that 
     comply substantially with Federal financial management 
     systems requirements, applicable Federal accounting 
     standards, and that uses a general ledger system that 
     accounts for activity at the transaction level.
       ``(4) Assertion of internal controls.--The Director shall 
     provide to the Comptroller General an assertion as to the 
     effectiveness of the internal controls that apply to 
     financial reporting by the Agency, using the standards 
     established in section 3512(c) of title 31, United States 
     Code.
       ``(5) Rule of construction.--This subsection may not be 
     construed as implying any obligation on the part of the 
     Director to consult with or obtain the consent or approval of 
     the Director of the Office of Management and Budget with 
     respect to any reports, plans, forecasts, or other 
     information referred to in paragraph (1) or any jurisdiction 
     or oversight over the affairs or operations of the Agency.
       ``(h) Audit of Agency.--
       ``(1) In general.--The Comptroller General shall annually 
     audit the financial transactions of the Agency in accordance 
     with the U.S. generally accepted government auditing 
     standards as may be prescribed by the Comptroller General of 
     the United States. The audit shall be conducted at the place 
     or places where accounts of the Agency are normally kept. The 
     representatives of the Government Accountability Office shall 
     have access to the personnel and to all books, accounts, 
     documents, papers, records (including electronic records), 
     reports, files, and all other papers, automated data, things, 
     or property belonging to or under the control of or used or 
     employed by the Agency pertaining to its financial 
     transactions and necessary to facilitate the audit, and such 
     representatives shall be afforded full facilities for 
     verifying transactions with the balances or securities held 
     by depositories, fiscal agents, and custodians. All such 
     books, accounts, documents, records, reports, files, papers, 
     and property of the Agency shall remain in possession and 
     custody of the Agency. The Comptroller General may obtain and 
     duplicate any such books, accounts, documents, records, 
     working papers, automated data and files, or other 
     information relevant to such audit without cost to the 
     Comptroller General and the Comptroller General's right of 
     access to such information shall be enforceable pursuant to 
     section 716(c) of title 31, United States Code.
       ``(2) Report.--The Comptroller General shall submit to the 
     Congress a report of each annual audit conducted under this 
     subsection. The report to the Congress shall set forth the 
     scope of the audit and shall include the statement of assets 
     and liabilities and surplus or deficit, the statement of 
     income and expenses, the statement of sources and application 
     of funds, and such comments and information as may be deemed 
     necessary to inform Congress of the financial operations and 
     condition of the Agency, together with such recommendations 
     with respect thereto as the Comptroller General may deem 
     advisable. A copy of each report shall be furnished to the 
     President and to the Agency at the time submitted to the 
     Congress.
       ``(3) Assistance and costs.--For the purpose of conducting 
     an audit under this subsection, the Comptroller General may, 
     in the discretion of the Comptroller General, employ by 
     contract, without regard to section 5 of title 41, United 
     States Code, professional services of firms and organizations 
     of certified public accountants for temporary periods or for 
     special purposes. Upon the request of the Comptroller 
     General, the Director of the Agency shall transfer to the 
     Government Accountability Office from funds available, the 
     amount requested by the Comptroller General to cover the full 
     costs of any audit and report conducted by the Comptroller 
     General. The Comptroller General shall credit funds 
     transferred to the account established for salaries and 
     expenses of the Government Accountability Office, and such 
     amount shall be available upon receipt and without fiscal 
     year limitation to cover the full costs of the audit and 
     report.''.

     SEC. 317. EXAMINERS AND ACCOUNTANTS.

       (a) Examinations.--Section 1317 of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4517) is 
     amended--
       (1) in subsection (a), by adding after the period at the 
     end the following: ``Each examination under this subsection 
     of a regulated entity shall include a review of the 
     procedures required to be established and maintained by the 
     regulated entity pursuant to section 1314(c) (relating to 
     fraudulent financial transactions) and the report regarding 
     each such examination shall describe any problems with such 
     procedures maintained by the regulated entity.'';
       (2) in subsection (b)--
       (A) by inserting ``of a regulated entity'' after ``under 
     this section''; and
       (B) by striking ``to determine the condition of an 
     enterprise for the purpose of ensuring its financial safety 
     and soundness'' and inserting ``or appropriate''; and
       (3) in subsection (c)--
       (A) in the second sentence, by inserting ``to conduct 
     examinations under this section'' before the period; and
       (B) in the third sentence, by striking ``from amounts 
     available in the Federal Housing Enterprises Oversight 
     Fund''.
       (b) Enhanced Authority To Hire Examiners and Accountants.--
     Section 1317 of the Housing and Community Development Act of 
     1992 (12 U.S.C. 4517) is amended by adding at the end the 
     following new subsection:
       ``(g) Appointment of Accountants, Economists, Specialists, 
     and Examiners.--
       ``(1) Applicability.--This section applies with respect to 
     any position of examiner, accountant, specialist in financial 
     markets, specialist in information technology, and economist 
     at the Agency, with respect to supervision and regulation of 
     the regulated entities, that is in the competitive service.
       ``(2) Appointment authority.--The Director may appoint 
     candidates to any position described in paragraph (1)--
       ``(A) in accordance with the statutes, rules, and 
     regulations governing appointments in the excepted service; 
     and
       ``(B) notwithstanding any statutes, rules, and regulations 
     governing appointments in the competitive service.
       ``(3) Rule of construction.--The appointment of a candidate 
     to a position under the authority of this subsection shall 
     not be considered to cause such position to be converted from 
     the competitive service to the excepted service.''.
       (c) Repeal.--Section 20 of the Federal Home Loan Bank Act 
     (12 U.S.C. 1440) is amended--
       (1) by striking the section heading and inserting the 
     following: ``examinations and gao audits'';
       (2) in the third sentence, by striking ``the Board and'' 
     each place such term appears; and

[[Page 8192]]

       (3) by striking the first two sentences and inserting the 
     following: ``The Federal home loan banks shall be subject to 
     examinations by the Director to the extent provided in 
     section 1317 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4517).''.

     SEC. 318. PROHIBITION AND WITHHOLDING OF EXECUTIVE 
                   COMPENSATION.

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

     SEC. 319. REVIEWS OF REGULATED ENTITIES.

       Section 1319 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4519) is amended--
       (1) by striking the section designation and heading and 
     inserting the following:

     ``SEC. 1319. REVIEWS OF REGULATED ENTITIES.'';

     and
       (2) by striking ``is a nationally recognized'' and all that 
     follows through ``1934'' and inserting the following: ``the 
     Director considers appropriate, including an entity that is 
     registered under section 15 of the Securities Exchange Act of 
     1934 (15 U.S.C. 78a) as a nationally registered statistical 
     rating organization''.

     SEC. 320. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN 
                   AGENCY WORKFORCE.

       Section 1319A of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4520) is amended--
       (1) in the section heading, by striking ``EQUAL OPPORTUNITY 
     IN SOLICITATION OF CONTRACTS'' and inserting ``MINORITY AND 
     WOMEN INCLUSION; DIVERSITY REQUIREMENTS'';
       (2) in subsection (a), by striking ``(a) In General.--Each 
     enterprise'' and inserting ``(e) Outreach.--Each regulated 
     entity''; and
       (3) by striking subsection (b);
       (4) by inserting before subsection (e), as so redesignated 
     by paragraph (2) of this section, the following new 
     subsections:
       ``(a) Office of Minority and Women Inclusion.--Each 
     regulated entity shall establish an Office of Minority and 
     Women Inclusion, or designate an office of the entity, that 
     shall be responsible for carrying out this section and all 
     matters of the entity relating to diversity in management, 
     employment, and business activities in accordance with such 
     standards and requirements as the Director shall establish.
       ``(b) Inclusion in All Levels of Business Activities.--Each 
     regulated entity shall develop and implement standards and 
     procedures to ensure, to the maximum extent possible, the 
     inclusion and utilization of minorities (as such term is 
     defined in section 1204(c) of the Financial Institutions 
     Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811 
     note)) and women, and minority- and women-owned businesses 
     (as such terms are defined in section 21A(r)(4) of the 
     Federal Home Loan Bank Act (12 U.S.C. 1441a(r)(4)) (including 
     financial institutions, investment banking firms, mortgage 
     banking firms, asset management firms, broker-dealers, 
     financial services firms, underwriters, accountants, brokers, 
     investment consultants, and providers of legal services) in 
     all business and activities of the regulated entity at all 
     levels, including in procurement, insurance, and all types of 
     contracts (including contracts for the issuance or guarantee 
     of any debt, equity, or mortgage-related securities, the 
     management of its mortgage and securities portfolios, the 
     making of its equity investments, the purchase, sale and 
     servicing of single- and multi-family mortgage loans, and the 
     implementation of its affordable housing program and 
     initiatives). The processes established by each regulated 
     entity for review and evaluation for contract proposals and 
     to hire service providers shall include a component that 
     gives consideration to the diversity of the applicant.
       ``(c) Applicability.--This section shall apply to all 
     contracts of a regulated entity for services of any kind, 
     including services that require the services of investment 
     banking, asset management entities, broker-dealers, financial 
     services entities, underwriters, accountants, investment 
     consultants, and providers of legal services.
       ``(d) Inclusion in Annual Reports.--Each regulated entity 
     shall include, in the annual report submitted by the entity 
     to the Director pursuant to section 309(k) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 
     1723a(k)), section 307(c) of the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1456(c)), and section 20 of the 
     Federal Home Loan Bank Act (12 U.S.C. 1440), as applicable, 
     detailed information describing the actions taken by the 
     entity pursuant to this section, which shall include a 
     statement of the total amounts paid by the entity to third 
     party contractors since the last such report and the 
     percentage of such amounts paid to businesses described in 
     subsection (b) of this section.''; and
       (5) by adding at the end the following new subsection:
       ``(f) Diversity in Agency Workforce.--The Agency shall take 
     affirmative steps to seek diversity in its workforce at all 
     levels of the agency consistent with the demographic 
     diversity of the United States, which shall include--
       ``(1) heavily recruiting at historically Black colleges and 
     universities, Hispanic-serving institutions, women's 
     colleges, and colleges that typically serve majority minority 
     populations;
       ``(2) sponsoring and recruiting at job fairs in urban 
     communities, and placing employment advertisements in 
     newspapers and magazines oriented toward women and people of 
     color;
       ``(3) partnering with organizations that are focused on 
     developing opportunities for minorities and women to place 
     talented young minorities and women in industry internships, 
     summer employment, and full-time positions; and
       ``(4) where feasible, partnering with inner-city high 
     schools, girls' high schools, and high schools with majority 
     minority populations to establish or enhance financial 
     literacy programs and provide mentoring.''.

     SEC. 321. REGULATIONS AND ORDERS.

       Section 1319G of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4526) is amended--
       (1) by striking subsection (a) and inserting the following 
     new subsection:
       ``(a) Authority.--The Director shall issue any regulations, 
     guidelines, and orders necessary to carry out the duties of 
     the Director under this title and each of the authorizing 
     statutes to ensure that the purposes of this title and such 
     statutes are accomplished.'';
       (2) in subsection (b), by inserting ``, this title, or any 
     of the authorizing statutes'' after ``under this section''; 
     and
       (3) by striking subsection (c).

     SEC. 322. NON-WAIVER OF PRIVILEGES.

       Part 1 of subtitle A of title XIII of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4511) is amended 
     by adding at the end the following new section:

     ``SEC. 1319H. PRIVILEGES NOT AFFECTED BY DISCLOSURE.

       ``(a) In General.--The submission by any person of any 
     information to the Agency for any purpose in the course of 
     any supervisory or regulatory process of the Agency shall not 
     be construed as waiving, destroying, or otherwise affecting 
     any privilege such person may claim with respect to such 
     information under Federal or State law as to any person or 
     entity other than the Agency.

[[Page 8193]]

       ``(b) Rule of Construction.--No provision of subsection (a) 
     may be construed as implying or establishing that--
       ``(1) any person waives any privilege applicable to 
     information that is submitted or transferred under any 
     circumstance to which subsection (a) does not apply; or
       ``(2) any person would waive any privilege applicable to 
     any information by submitting the information to the Agency, 
     but for this subsection.''.

     SEC. 323. RISK-BASED CAPITAL REQUIREMENTS.

       (a) In General.--Section 1361 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4611) is amended to read 
     as follows:

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

       ``(a) In General.--
       ``(1) Enterprises.--The Director shall, by regulation, 
     establish risk-based capital requirements for the enterprises 
     to ensure that the enterprises operate in a safe and sound 
     manner, maintaining sufficient capital and reserves to 
     support the risks that arise in the operations and management 
     of the enterprises.
       ``(2) Federal home loan banks.--The Director shall 
     establish risk-based capital standards under section 6 of the 
     Federal Home Loan Bank Act for the Federal home loan banks.
       ``(b) Confidentiality of Information.--Any person that 
     receives any book, record, or information from the Director 
     or a regulated entity to enable the risk-based capital 
     requirements established under this section to be applied 
     shall--
       ``(1) maintain the confidentiality of the book, record, or 
     information in a manner that is generally consistent with the 
     level of confidentiality established for the material by the 
     Director or the regulated entity; and
       ``(2) be exempt from section 552 of title 5, United States 
     Code, with respect to the book, record, or information.
       ``(c) No Limitation.--Nothing in this section shall limit 
     the authority of the Director to require other reports or 
     undertakings, or take other action, in furtherance of the 
     responsibilities of the Director under this Act.''.
       (b) Federal Home Loan Banks Risk-Based Capital.--Section 
     6(a)(3) of the Federal Home Loan Bank Act (12 U.S.C. 
     1426(a)(3)) is amended--
       (1) by striking subparagraph (A) and inserting the 
     following new subparagraph:
       ``(A) Risk-based capital standards.--The Director shall, by 
     regulation, establish risk-based capital standards for the 
     Federal home loan banks to ensure that the Federal home loan 
     banks operate in a safe and sound manner, with sufficient 
     permanent capital and reserves to support the risks that 
     arise in the operations and management of the Federal home 
     loans banks.''; and
       (2) in subparagraph (B), by striking ``(A)(ii)'' and 
     inserting ``(A)''.

     SEC. 324. MINIMUM AND CRITICAL CAPITAL LEVELS.

       (a) Minimum Capital Level.--Section 1362 of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4612) is 
     amended--
       (1) in subsection (a), by striking ``In General'' and 
     inserting ``Enterprises''; and
       (2) by striking subsection (b) and inserting the following 
     new subsections:
       ``(b) Federal Home Loan Banks.--For purposes of this 
     subtitle, the minimum capital level for each Federal home 
     loan bank shall be the minimum capital required to be 
     maintained to comply with the leverage requirement for the 
     bank established under section 6(a)(2) of the Federal Home 
     Loan Bank Act (12 U.S.C. 1426(a)(2)).
       ``(c) Establishment of Revised Minimum Capital Levels.--
     Notwithstanding subsections (a) and (b) and notwithstanding 
     the capital classifications of the regulated entities, the 
     Director may, by regulations issued under section 1319G, 
     establish a minimum capital level for the enterprises, for 
     the Federal home loan banks, or for both the enterprises and 
     the banks, that is higher than the level specified in 
     subsection (a) for the enterprises or the level specified in 
     subsection (b) for the Federal home loan banks, to the extent 
     needed to ensure that the regulated entities operate in a 
     safe and sound manner.
       ``(d) Authority To Require Temporary Increase.--
     Notwithstanding subsections (a) and (b) and any minimum 
     capital level established pursuant to subsection (c), the 
     Director may, by order, increase the minimum capital level 
     for a regulated entity on a temporary basis for such period 
     as the Director may provide if the Director--
       ``(1) makes any determination specified in subparagraphs 
     (A) through (C) of section 1364(c)(1);
       ``(2) determines that the regulated entity has violated any 
     of the prudential standards established pursuant to section 
     1313A and, as a result of such violation, determines that an 
     unsafe and unsound condition exists; or
       ``(3) determines that an unsafe and unsound condition 
     exists, except that a temporary increase in minimum capital 
     imposed on a regulated entity pursuant to this paragraph 
     shall not remain in place for a period of more than 6 months 
     unless the Director makes a renewed determination of the 
     existence of an unsafe and unsound condition.
       ``(e) Authority To Establish Additional Capital and Reserve 
     Requirements for Particular Programs.--The Director may, at 
     any time by order or regulation, establish such capital or 
     reserve requirements with respect to any program or activity 
     of a regulated entity as the Director considers appropriate 
     to ensure that the regulated entity operates in a safe and 
     sound manner, with sufficient capital and reserves to support 
     the risks that arise in the operations and management of the 
     regulated entity.
       ``(f) Periodic Review.--The Director shall periodically 
     review the amount of core capital maintained by the 
     enterprises, the amount of capital retained by the Federal 
     home loan banks, and the minimum capital levels established 
     for such regulated entities pursuant to this section. The 
     Director shall rescind any temporary minimum capital level 
     increase if the Director determines that the circumstances or 
     facts justifying the temporary increase are no longer 
     present.''.
       (b) Critical Capital Levels.--
       (1) In general.--Section 1363 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4613) is amended--
       (A) by striking ``For'' and inserting ``(a) Enterprises.--
     For''; and
       (B) by adding at the end the following new subsection:
       ``(b) Federal Home Loan Banks.--
       ``(1) In general.--For purposes of this subtitle, the 
     critical capital level for each Federal home loan bank shall 
     be such amount of capital as the Director shall, by 
     regulation require.
       ``(2) Consideration of other critical capital levels.--In 
     establishing the critical capital level under paragraph (1) 
     for the Federal home loan banks, the Director shall take due 
     consideration of the critical capital level established under 
     subsection (a) for the enterprises, with such modifications 
     as the Director determines to be appropriate to reflect the 
     difference in operations between the banks and the 
     enterprises.''.
       (2) Regulations.--Not later than the expiration of the 180-
     day period beginning on the effective date under section 365, 
     the Director of the Federal Housing Finance Agency shall 
     issue regulations pursuant to section 1363(b) of the Housing 
     and Community Development Act of 1992 (as added by paragraph 
     (1) of this subsection) establishing the critical capital 
     level under such section.

     SEC. 325. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND 
                   LIABILITIES.

       (a) In General.--Subtitle B of title XIII of the Housing 
     and Community Development Act of 1992 (12 U.S.C. 4611 et 
     seq.) is amended--
       (1) by striking the subtitle designation and heading and 
     inserting the following:

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

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

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

       ``(a) In General.--The Director shall, by regulation, 
     establish standards by which the portfolio holdings, or rate 
     of growth of the portfolio holdings, of the enterprises will 
     be deemed to be consistent with the mission and the safe and 
     sound operations of the enterprises. In developing such 
     standards, the Director shall consider--
       ``(1) the size or growth of the mortgage market;
       ``(2) the need for the portfolio in maintaining liquidity 
     or stability of the secondary mortgage market (including the 
     market for the mortgage-backed securities the enterprises 
     issue);
       ``(3) the need for an inventory of mortgages in connection 
     with securitizations;
       ``(4) the need for the portfolio to directly support the 
     affordable housing mission of the enterprises;
       ``(5) the liquidity needs of the enterprises;
       ``(6) any potential risks posed to the enterprises by the 
     nature of the portfolio holdings; and
       ``(7) any additional factors that the Director determines 
     to be necessary to carry out the purpose under the first 
     sentence of this subsection to establish standards for 
     assessing whether the portfolio holdings are consistent with 
     the mission and safe and sound operations of the enterprises.
       ``(b) Temporary Adjustments.--The Director may, by order, 
     make temporary adjustments to the established standards for 
     an enterprise or both enterprises, such as during times of 
     economic distress or market disruption.
       ``(c) Authority To Require Disposition or Acquisition.--The 
     Director shall monitor the portfolio of each enterprise. 
     Pursuant to subsection (a) and notwithstanding the capital 
     classifications of the enterprises, the Director may, by 
     order, require an enterprise, under such terms and conditions 
     as the Director determines to be appropriate, to dispose of 
     or acquire any asset, if the Director determines that such 
     action is consistent with the purposes of this Act or any of 
     the authorizing statutes.''.
       (b) Regulations.--Not later than the expiration of the 180-
     day period beginning on the effective date under section 365, 
     the Director of the Federal Housing Finance Agency shall 
     issue regulations pursuant to section 1369E(a) of the Housing 
     and Community Development Act of 1992 (as added by subsection 
     (a) of this section) establishing the

[[Page 8194]]

     portfolio holdings standards under such section.

     SEC. 326. CORPORATE GOVERNANCE OF ENTERPRISES.

       The Housing and Community Development Act of 1992 is 
     amended by inserting before section 1323 (12 U.S.C. 4543) the 
     following new section:

     ``SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES.

       ``(a) Board of Directors.--
       ``(1) Independence.--A majority of seated members of the 
     board of directors of each enterprise shall be independent 
     board members, as defined under rules set forth by the New 
     York Stock Exchange, as such rules may be amended from time 
     to time.
       ``(2) Frequency of meetings.--To carry out its obligations 
     and duties under applicable laws, rules, regulations, and 
     guidelines, the board of directors of an enterprise shall 
     meet at least eight times a year and not less than once a 
     calendar quarter.
       ``(3) Non-management board member meetings.--The non-
     management directors of an enterprise shall meet at regularly 
     scheduled executive sessions without management 
     participation.
       ``(4) Quorum; prohibition on proxies.--For the transaction 
     of business, a quorum of the board of directors of an 
     enterprise shall be at least a majority of the seated board 
     of directors and a board member may not vote by proxy.
       ``(5) Information.--The management of an enterprise shall 
     provide a board member of the enterprise with such adequate 
     and appropriate information that a reasonable board member 
     would find important to the fulfillment of his or her 
     fiduciary duties and obligations.
       ``(6) Annual review.--At least annually, the board of 
     directors of each enterprise shall review, with appropriate 
     professional assistance, the requirements of laws, rules, 
     regulations, and guidelines that are applicable to its 
     activities and duties.
       ``(b) Committees of Boards of Directors.--
       ``(1) Frequency of meetings.--Any committee of the board of 
     directors of an enterprise shall meet with sufficient 
     frequency to carry out its obligations and duties under 
     applicable laws, rules, regulations, and guidelines.
       ``(2) Required committees.--Each enterprise shall provide 
     for the establishment, however styled, of the following 
     committees of the board of directors:
       ``(A) Audit committee.
       ``(B) Compensation committee.
       ``(C) Nominating/corporate governance committee.
     Such committees shall be in compliance with the charter, 
     independence, composition, expertise, duties, 
     responsibilities, and other requirements set forth under 
     section 10A(m) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78j-1(m)), with respect to the audit committee, and 
     under rules issued by the New York Stock Exchange, as such 
     rules may be amended from time to time.
       ``(c) Compensation.--
       ``(1) In general.--The compensation of board members, 
     executive officers, and employees of an enterprise--
       ``(A) shall not be in excess of that which is reasonable 
     and appropriate;
       ``(B) shall be commensurate with the duties and 
     responsibilities of such persons;
       ``(C) shall be consistent with the long-term goals of the 
     enterprise;
       ``(D) shall not focus solely on earnings performance, but 
     shall take into account risk management, operational 
     stability and legal and regulatory compliance as well; and
       ``(E) shall be undertaken in a manner that complies with 
     applicable laws, rules, and regulations.
       ``(2) Reimbursement.--If an enterprise is required to 
     prepare an accounting restatement due to the material 
     noncompliance of the enterprise, as a result of misconduct, 
     with any financial reporting requirement under the securities 
     laws, the chief executive officer and chief financial officer 
     of the enterprise shall reimburse the enterprise as provided 
     under section 304 of the Sarbanes-Oxley Act of 2002 (15 
     U.S.C. 7243). This provision does not otherwise limit the 
     authority of the Agency to employ remedies available to it 
     under its enforcement authorities.
       ``(d) Code of Conduct and Ethics.--
       ``(1) In general.--An enterprise shall establish and 
     administer a written code of conduct and ethics that is 
     reasonably designed to assure the ability of board members, 
     executive officers, and employees of the enterprise to 
     discharge their duties and responsibilities, on behalf of the 
     enterprise, in an objective and impartial manner, and that 
     includes standards required under section 406 of the 
     Sarbanes-Oxley Act of 2002 (15 U.S.C. 7264) and other 
     applicable laws, rules, and regulations.
       ``(2) Review.--Not less than once every three years, an 
     enterprise shall review the adequacy of its code of conduct 
     and ethics for consistency with practices appropriate to the 
     enterprise and make any appropriate revisions to such code.
       ``(e) Conduct and Responsibilities of Board of Directors.--
     The board of directors of an enterprise shall be responsible 
     for directing the conduct and affairs of the enterprise in 
     furtherance of the safe and sound operation of the enterprise 
     and shall remain reasonably informed of the condition, 
     activities, and operations of the enterprise. The 
     responsibilities of the board of directors shall include 
     having in place adequate policies and procedures to assure 
     its oversight of, among other matters, the following:
       ``(1) Corporate strategy, major plans of action, risk 
     policy, programs for legal and regulatory compliance and 
     corporate performance, including prudent plans for growth and 
     allocation of adequate resources to manage operations risk.
       ``(2) Hiring and retention of qualified executive officers 
     and succession planning for such executive officers.
       ``(3) Compensation programs of the enterprise.
       ``(4) Integrity of accounting and financial reporting 
     systems of the enterprise, including independent audits and 
     systems of internal control.
       ``(5) Process and adequacy of reporting, disclosures, and 
     communications to shareholders, investors, and potential 
     investors.
       ``(6) Extensions of credit to board members and executive 
     officers.
       ``(7) Responsiveness of executive officers in providing 
     accurate and timely reports to Federal regulators and in 
     addressing the supervisory concerns of Federal regulators in 
     a timely and appropriate manner.
       ``(f) Prohibition of Extensions of Credit.--An enterprise 
     may not directly or indirectly, including through any 
     subsidiary, extend or maintain credit, arrange for the 
     extension of credit, or renew an extension of credit, in the 
     form of a personal loan to or for any board member or 
     executive officer of the enterprise, as provided by section 
     13(k) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78m(k)).
       ``(g) Certification of Disclosures.--The chief executive 
     officer and the chief financial officer of an enterprise 
     shall review each quarterly report and annual report issued 
     by the enterprise and such reports shall include 
     certifications by such officers as required by section 302 of 
     the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7241).
       ``(h) Change of Audit Partner.--An enterprise may not 
     accept audit services from an external auditing firm if the 
     lead or coordinating audit partner who has primary 
     responsibility for the external audit of the enterprise, or 
     the external audit partner who has responsibility for 
     reviewing the external audit has performed audit services for 
     the enterprise in each of the five previous fiscal years.
       ``(i) Compliance Program.--
       ``(1) Requirement.--Each enterprise shall establish and 
     maintain a compliance program that is reasonably designed to 
     assure that the enterprise complies with applicable laws, 
     rules, regulations, and internal controls.
       ``(2) Compliance officer.--The compliance program of an 
     enterprise shall be headed by a compliance officer, however 
     styled, who reports directly to the chief executive officer 
     of the enterprise. The compliance officer shall report 
     regularly to the board of directors or an appropriate 
     committee of the board of directors on compliance with and 
     the adequacy of current compliance policies and procedures of 
     the enterprise, and shall recommend any adjustments to such 
     policies and procedures that the compliance officer considers 
     necessary and appropriate.
       ``(j) Risk Management Program.--
       ``(1) Requirement.--Each enterprise shall establish and 
     maintain a risk management program that is reasonably 
     designed to manage the risks of the operations of the 
     enterprise.
       ``(2) Risk management officer.--The risk management program 
     of an enterprise shall be headed by a risk management 
     officer, however styled, who reports directly to the chief 
     executive officer of the enterprise. The risk management 
     officer shall report regularly to the board of directors or 
     an appropriate committee of the board of directors on 
     compliance with and the adequacy of current risk management 
     policies and procedures of the enterprise, and shall 
     recommend any adjustments to such policies and procedures 
     that the risk management officer considers necessary and 
     appropriate.
       ``(k) Compliance With Other Laws.--
       ``(1) Deregistered or unregistered common stock.--If an 
     enterprise deregisters or has not registered its common stock 
     with the Securities and Exchange Commission under the 
     Securities Exchange Act of 1934, the enterprise shall comply 
     or continue to comply with sections 10A(m) and 13(k) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78j-1(m), 78m(k)) 
     and sections 302, 304, and 406 of the Sarbanes-Oxley Act of 
     2002 (15 U.S.C. 7241, 7243, 7264), subject to such 
     requirements as provided by subsection (l) of this section.
       ``(2) Registered common stock.--An enterprise that has its 
     common stock registered with the Securities and Exchange 
     Commission shall maintain such registered status, unless it 
     provides 60 days prior written notice to the Director stating 
     its intent to deregister and its understanding that it will 
     remain subject to the requirements of the sections of the 
     Securities Exchange Act of 1934 and the Sarbanes-Oxley Act of 
     2002, subject to such requirements as provided by subsection 
     (l) of this section.

[[Page 8195]]

       ``(l) Other Matters.--The Director may from time to time 
     establish standards, by regulation, order, or guideline, 
     regarding such other corporate governance matters of the 
     enterprises as the Director considers appropriate.
       ``(m) Modification of Standards.--In connection with 
     standards of Federal or State law (including the Revised 
     Model Corporation Act) or New York Stock Exchange rules that 
     are made applicable to an enterprise by section 1710.10 of 
     the Director's rules (12 CFR 1710.10) and by subsections (a), 
     (b), (g), (i), (j), and (k) of this section, the Director, in 
     the Director's sole discretion, may modify the standards 
     contained in this section or in part 1710 of the Director's 
     rules (12 CFR Part 1710) in accordance with section 553 of 
     title 5, United States Code, and upon written notice to the 
     enterprise.''.

     SEC. 327. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT 
                   OF 1934.

       The Housing and Community Development Act of 1992 is 
     amended by adding after section 1322A, as added by the 
     preceding provisions of this title, the following new 
     section:

     ``SEC. 1322B. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE 
                   ACT OF 1934.

       ``(a) In General.--Each regulated entity shall register at 
     least one class of the capital stock of such regulated 
     entity, and maintain such registration with the Securities 
     and Exchange Commission, under the Securities Exchange Act of 
     1934.
       ``(b) Enterprises.--Each enterprise shall comply with 
     sections 14 and 16 of the Securities Exchange Act of 1934.''.

     SEC. 328. LIAISON WITH FINANCIAL INSTITUTIONS EXAMINATION 
                   COUNCIL.

       Section 1007 of the Federal Financial Institutions 
     Examination Council Act of 1978 (12 U.S.C. 3306) is amended--
       (1) in the section heading, by inserting after ``state'' 
     the following: ``and federal housing finance agency''; and
       (2) by inserting after ``financial institutions'' the 
     following: ``, and one representative of the Federal Housing 
     Finance Agency,''.

     SEC. 329. GUARANTEE FEE STUDY.

       (a) In General.--The Director of the Federal Housing 
     Finance Agency, in consultation with the heads of the federal 
     banking agencies, shall, not later than 18 months after the 
     date of the enactment of this Act, submit to the Congress a 
     study concerning the pricing, transparency and reporting of 
     the Federal National Mortgage Association, the Federal Home 
     Loan Mortgage Corporation, and the Federal home loan banks 
     with regard to guarantee fees and concerning analogous 
     practices, transparency and reporting requirements (including 
     advances pricing practices by the Federal Home Loan Banks) of 
     other participants in the business of mortgage purchases and 
     securitization.
       (b) Factors.--The study required by this section shall 
     examine various factors such as credit risk, counterparty 
     risk considerations, economic value considerations, and 
     volume considerations used by the regulated entities (as such 
     term is defined in section 1303 of the Housing and Community 
     Development Act of 1992) included in the study in setting the 
     amount of fees they charge.
       (c) Contents of Report.--The report required under 
     subsection (a) shall identify and analyze--
       (1) the factors used by each enterprise (as such term is 
     defined in section 1303 of the Housing and Community 
     Development Act of 1992) in determining the amount of the 
     guarantee fees it charges;
       (2) the total revenue the enterprises earn from guarantee 
     fees;
       (3) the total costs incurred by the enterprises for 
     providing guarantees;
       (4) the average guarantee fee charged by the enterprises;
       (5) an analysis of how and why the guarantee fees charged 
     differ from such fees charged during the previous year;
       (6) a breakdown of the revenue and costs associated with 
     providing guarantees, based on product type and risk 
     classifications; and
       (7) other relevant information on guarantee fees with other 
     participants in the mortgage and securitization business.
       (d) Protection of Information.--Nothing in this section may 
     be construed to require or authorize the Director of the 
     Federal Housing Finance Agency, in connection with the study 
     mandated by this section, to disclose information of the 
     enterprises or other organization that is confidential or 
     proprietary.
       (e) Effective Date.--This section shall take effect on the 
     date of the enactment of this Act.

     SEC. 330. CONFORMING AMENDMENTS.

       (a) 1992 Act.--Part 1 of subtitle A of title XIII of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 4511 
     et seq.), as amended by the preceding provisions of this 
     title, is further amended--
       (1) by striking ``an enterprise'' each place such term 
     appears in such part (except in sections 1313(a)(2)(A), 
     1313A(b)(2)(B)(ii)(I), and 1316(b)(3)) and inserting ``a 
     regulated entity'';
       (2) by striking ``the enterprise'' each place such term 
     appears in such part (except in section 1316(b)(3)) and 
     inserting ``the regulated entity'';
       (3) by striking ``the enterprises'' each place such term 
     appears in such part (except in sections 1312(c)(2), and 
     1312(e)(2)) and inserting ``the regulated entities'';
       (4) by striking ``each enterprise'' each place such term 
     appears in such part and inserting ``each regulated entity'';
       (5) by striking ``Office'' each place such term appears in 
     such part (except in sections 1311(b)(2), 1312(b)(5), 
     1315(b), and 1316(a)(4), (g), and (h), 1317(c), and 1319A(a)) 
     and inserting ``Agency'';
       (6) in section 1315 (12 U.S.C. 4515)--
       (A) in subsection (a)--
       (i) in the subsection heading, by striking ``Office 
     Personnel'' and inserting ``In General''; and
       (ii) by striking ``The'' and inserting ``Subject to 
     subtitle C of the Federal Housing Finance Reform Act of 2008, 
     the'';
       (B) by striking subsections (d) and (f); and
       (C) by redesignating subsection (e) as subsection (d);
       (7) in section 1319B (12 U.S.C. 4521), by striking 
     ``Committee on Banking, Finance and Urban Affairs'' each 
     place such term appears and inserting ``Committee on 
     Financial Services''; and
       (8) in section 1319F (12 U.S.C. 4525), striking all that 
     follows ``United States Code'' and inserting ``, the Agency 
     shall be considered an agency responsible for the regulation 
     or supervision of financial institutions.''.
       (b) Amendments to Fannie Mae Charter Act.--The Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1716 et 
     seq.) is amended--
       (1) by striking ``Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development'' each place such term appears, and inserting 
     ``Director of the Federal Housing Finance Agency'', in--
       (A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
       (B) section 309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)); and
       (C) section 309(k)(1); and
       (2) in section 309--
       (A) in subsections (d)(3)(A) and (n)(1), by striking 
     ``Banking, Finance and Urban Affairs'' each place such term 
     appears and inserting ``Financial Services''; and
       (B) in subsection (m)--
       (i) in paragraph (1), by striking ``Secretary'' the second 
     place such term appears and inserting ``Director'';
       (ii) in paragraph (2), by striking ``Secretary'' the second 
     place such term appears and inserting ``Director''; and
       (iii) by striking ``Secretary'' each other place such term 
     appears and inserting ``Director of the Federal Housing 
     Finance Agency''; and
       (C) in subsection (n), by striking ``Secretary'' each place 
     such term appears and inserting ``Director of the Federal 
     Housing Finance Agency''.
       (c) Amendments to Freddie Mac Act.--The Federal Home Loan 
     Mortgage Corporation Act is amended--
       (1) by striking ``Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development'' each place such term appears, and inserting 
     ``Director of the Federal Housing Finance Agency'', in--
       (A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
       (B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); and
       (C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
       (2) in sections 303(h)(1) and 307(f)(1) (12 U.S.C. 
     1452(h)(1), 1456(f)(1)), by striking ``Banking, Finance and 
     Urban Affairs'' each place such term appears and inserting 
     ``Financial Services'';
       (3) in section 306(i) (12 U.S.C. 1455(i))--
       (A) by striking ``1316(c)'' and inserting ``306(c)''; and
       (B) by striking ``section 106'' and inserting ``section 
     1316''; and
       (4) in section 307 (12 U.S.C. 1456))--
       (A) in subsection (e)--
       (i) in paragraph (1), by striking ``Secretary'' the second 
     place such term appears and inserting ``Director'';
       (ii) in paragraph (2), by striking ``Secretary'' the second 
     place such term appears and inserting ``Director''; and
       (iii) by striking ``Secretary'' each other place such term 
     appears and inserting ``Director of the Federal Housing 
     Finance Agency''; and
       (B) in subsection (f), by striking ``Secretary'' each place 
     such term appears and inserting ``Director of the Federal 
     Housing Finance Agency''.

             CHAPTER 2--IMPROVEMENT OF MISSION SUPERVISION

     SEC. 331. TRANSFER OF PRODUCT APPROVAL AND HOUSING GOAL 
                   OVERSIGHT.

       Part 2 of subtitle A of title XIII of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4541 et seq.) is 
     amended--
       (1) by striking the designation and heading for the part 
     and inserting the following:

   ``PART 2--PRODUCT APPROVAL BY DIRECTOR, CORPORATE GOVERNANCE, AND 
                   ESTABLISHMENT OF HOUSING GOALS'';

     and
       (2) by striking sections 1321 and 1322.

     SEC. 332. REVIEW OF ENTERPRISE PRODUCTS.

       (a) In General.--Part 2 of subtitle A of title XIII of the 
     Housing and Community Development Act of 1992 is amended by 
     inserting before section 1323 (12 U.S.C. 4543) the following 
     new section:

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

       ``(a) In General.--The Director shall require each 
     enterprise to obtain the approval

[[Page 8196]]

     of the Director for any product of the enterprise before 
     initially offering the product.
       ``(b) Standard for Approval.--In considering any request 
     for approval of a product pursuant to subsection (a), the 
     Director shall make a determination that--
       ``(1) in the case of a product of the Federal National 
     Mortgage Association, the Director determines that the 
     product is authorized under paragraph (2), (3), (4), or (5) 
     of section 302(b) or section 304 of the Federal National 
     Mortgage Association Charter Act, (12 U.S.C. 1717(b), 1719);
       ``(2) in the case of a product of the Federal Home Loan 
     Mortgage Corporation, the Director determines that the 
     product is authorized under paragraph (1), (4), or (5) of 
     section 305(a) of the Federal Home Loan Mortgage Corporation 
     Act (12 U.S.C. 1454(a));
       ``(3) the product is in the public interest;
       ``(4) the product is consistent with the safety and 
     soundness of the enterprise or the mortgage finance system; 
     and
       ``(5) the product does not materially impair the efficiency 
     of the mortgage finance system.
       ``(c) Procedure for Approval.--
       ``(1) Submission of request.--An enterprise shall submit to 
     the Director a written request for approval of a product that 
     describes the product in such form as prescribed by order or 
     regulation of the Director.
       ``(2) Request for public comment.--Immediately upon receipt 
     of a request for approval of a product, as required under 
     paragraph (1), the Director shall publish notice of such 
     request and of the period for public comment pursuant to 
     paragraph (3) regarding the product, and a description of the 
     product proposed by the request. The Director shall give 
     interested parties the opportunity to respond in writing to 
     the proposed product.
       ``(3) Public comment period.--During the 30-day period 
     beginning on the date of publication pursuant to paragraph 
     (2) of a request for approval of a product, the Director 
     shall receive public comments regarding the proposed product.
       ``(4) Offering of product.--
       ``(A) In general.--Not later than 30 days after the close 
     of the public comment period described in paragraph (3), the 
     Director shall approve or deny the product, specifying the 
     grounds for such decision in writing.
       ``(B) Failure to act.--If the Director fails to act within 
     the 30-day period described in subparagraph (A), the 
     enterprise may offer the product.
       ``(d) Expedited Review.--
       ``(1) Determination and notice.--If an enterprise 
     determines that any new activity, service, undertaking, or 
     offering is not a product, as defined in subsection (f), the 
     enterprise shall provide written notice to the Director prior 
     to the commencement of such activity, service, undertaking, 
     or offering.
       ``(2) Director determination of applicable procedure.--
     Immediately upon receipt of any notice pursuant to paragraph 
     (1), the Director shall make a determination under paragraph 
     (3).
       ``(3) Determination and treatment as product.--If the 
     Director determines that any new activity, service, 
     undertaking, or offering consists of, relates to, or involves 
     a product--
       ``(A) the Director shall notify the enterprise of the 
     determination;
       ``(B) the new activity, service, undertaking, or offering 
     described in the notice under paragraph (1) shall be 
     considered a product for purposes of this section; and
       ``(C) the enterprise shall withdraw its request or submit a 
     written request for approval of the product pursuant to 
     subsection (c).
       ``(e) Conditional Approval.--The Director may conditionally 
     approve the offering of any product by an enterprise, and may 
     establish terms, conditions, or limitations with respect to 
     such product with which the enterprise must comply in order 
     to offer such product.
       ``(f) Definition of Product.--For purposes of this section, 
     the term `product' does not include--
       ``(1) the automated loan underwriting system of an 
     enterprise in existence as of the date of the enactment of 
     the Federal Housing Finance Reform Act of 2008, including any 
     upgrade to the technology, operating system, or software to 
     operate the underwriting system; or
       ``(2) any modification to the mortgage terms and conditions 
     or mortgage underwriting criteria relating to the mortgages 
     that are purchased or guaranteed by an enterprise: Provided, 
     That such modifications do not alter the underlying 
     transaction so as to include services or financing, other 
     than residential mortgage financing, or create significant 
     new exposure to risk for the enterprise or the holder of the 
     mortgage.
       ``(g) No Limitation.--Nothing in this section shall be 
     deemed to restrict--
       ``(1) the safety and soundness authority of the Director 
     over all new and existing products or activities; or
       ``(2) the authority of the Director to review all new and 
     existing products or activities to determine that such 
     products or activities are consistent with the statutory 
     mission of the enterprise.''.
       (b) Conforming Amendments.--
       (1) Fannie mae.--Section 302(b)(6) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1717(b)(6)) is 
     amended--
       (A) by striking ``implement any new program'' and inserting 
     ``initially offer any product'';
       (B) by striking ``section 1303'' and inserting ``section 
     1321(f)''; and
       (C) by striking ``before obtaining the approval of the 
     Secretary under section 1322'' and inserting ``except in 
     accordance with section 1321''.
       (2) Freddie mac.--Section 305(c) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1454(c)) is amended--
       (A) by striking ``implement any new program'' and inserting 
     ``initially offer any product'';
       (B) by striking ``section 1303'' and inserting ``section 
     1321(f)''; and
       (C) by striking ``before obtaining the approval of the 
     Secretary under section 1322'' and inserting ``except in 
     accordance with section 1321''.
       (3) 1992 act.--Section 1303 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4502), as amended by the 
     preceding provisions of this title, is further amended--
       (A) by striking paragraph (17) (relating to the definition 
     of ``new program''); and
       (B) by redesignating paragraphs (18) through (23) as 
     paragraphs (17) through (22), respectively.

     SEC. 333. CONFORMING LOAN LIMITS.

       (a) Fannie Mae.--Section 302(b)(2) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is 
     amended--
       (1) in the second sentence, by redesignating clause (A) 
     through (C) as clauses (i) through (iii), respectively;
       (2) in the third sentence, by striking ``clause (A)'' and 
     inserting ``clause (i)'';
       (3) in the 4th sentence, by striking ``the Resolution Trust 
     Corporation,'';
       (4) by striking the 7th and 8th sentences and inserting the 
     following new sentences: ``For 2008, such limitations shall 
     not exceed $417,000 for a mortgage secured by a single-family 
     residence, $533,850 for a mortgage secured by a 2-family 
     residence, $645,300 for a mortgage secured by a 3-family 
     residence, and $801,950 for a mortgage secured by a 4-family 
     residence, except that such maximum limitations shall be 
     adjusted effective January 1 of each year beginning with 
     2009, subject to the limitations in this paragraph. Each 
     adjustment shall be made by adding to or subtracting from 
     each such amount (as it may have been previously adjusted) a 
     percentage thereof equal to the percentage increase or 
     decrease, during the most recent 12-month or four-quarter 
     period ending before the time of determining such annual 
     adjustment, in the housing price index maintained by the 
     Director of the Federal Housing Finance Agency (pursuant to 
     section 1322 of the Housing and Community Development Act of 
     1992 (12 U.S.C. 4541)).''.
       (5) by inserting ``(A)'' after ``(2)''; and
       (6) by adding at the end the following new subparagraph:
       ``(B)(i) Notwithstanding subparagraph (A), for mortgages 
     originated on or after January 1, 2009, the limitation on the 
     maximum original principal obligation of a mortgage that may 
     be purchased by the corporation shall be the higher of--
       ``(I) the limitation determined under subparagraph (A) for 
     a residence of the applicable size; or
       ``(II) 125 percent of the area median price for a residence 
     of the applicable size, but in no case to exceed 175 percent 
     of the limitation determined under subparagraph (A) for a 
     residence of the applicable size.
       ``(ii) The areas and area median prices used for purposes 
     of the determination under this subparagraph shall be the 
     areas and area median prices used by the Secretary of Housing 
     and Urban Development in determining the applicable limits 
     under section 203(b)(2) of the National Housing Act (12 
     U.S.C. 1709(b)(2)). A mortgage that is eligible for purchase 
     by the corporation at the time the mortgage is originated 
     under this subparagraph shall be eligible for such purchase 
     for the duration of the term of the mortgage.''.
       (b) Freddie Mac.--Section 305(a)(2) of the Federal Home 
     Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is 
     amended--
       (1) in the first sentence, by redesignating clause (A) 
     through (C) as clauses (i) through (iii), respectively;
       (2) in the second sentence, by striking ``clause (A)'' and 
     inserting ``clause (i)'';
       (3) in the third sentence by striking ``the Resolution 
     Trust Corporation'';
       (4) by striking the 6th and 7th sentence and inserting the 
     following new sentences: ``For 2008, such limitations shall 
     not exceed $417,000 for a mortgage secured by a single-family 
     residence, $533,850 for a mortgage secured by a 2-family 
     residence, $645,300 for a mortgage secured by a 3-family 
     residence, and $801,950 for a mortgage secured by a 4-family 
     residence, except that such maximum limitations shall be 
     adjusted effective January 1 of each year beginning with 
     2009, subject to the limitations in this paragraph. Each 
     adjustment shall be made by adding to or subtracting from 
     each such amount (as it may have been previously adjusted) a 
     percentage thereof equal to the percentage increase or 
     decrease, during the most recent

[[Page 8197]]

     12-month or four-quarter period ending before the time of 
     determining such annual adjustment, in the housing price 
     index maintained by the Director of the Federal Housing 
     Finance Agency (pursuant to section 1322 of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4541)).'';
       (5) by inserting ``(A)'' after ``(2)''; and
       (6) by adding at the end the following new subparagraph:
       ``(B)(i) Notwithstanding subparagraph (A), for mortgages 
     originated on or after January 1, 2009, the limitation on the 
     maximum original principal obligation of a mortgage that may 
     be purchased by the Corporation shall be the higher of--
       ``(I) the limitation determined under subparagraph (A) for 
     a residence of the applicable size; or
       ``(II) 125 percent of the area median price for a residence 
     of the applicable size, but in no case to exceed 175 percent 
     of the limitation determined under subparagraph (A) for a 
     residence of the applicable size.
       ``(ii) The areas and area median prices used for purposes 
     of the determination under this subparagraph shall be the 
     areas and area median prices used by the Secretary of Housing 
     and Urban Development in determining the applicable limits 
     under section 203(b)(2) of the National Housing Act (12 
     U.S.C. 1709(b)(2)). A mortgage that is eligible for purchase 
     by the Corporation at the time the mortgage is originated 
     under this subparagraph shall be eligible for such purchase 
     for the duration of the term of the mortgage.''.
       (c) Housing Price Index.--Subpart A of part 2 of subtitle A 
     of title XIII of the Housing and Community Development Act of 
     1992 (as amended by the preceding provisions of this title) 
     is amended by inserting after section 1321 (as added by the 
     preceding provisions of this title) the following new 
     section:

     ``SEC. 1322. HOUSING PRICE INDEX.

       ``(a) In General.--The Director shall establish and 
     maintain a method of assessing the national average 1-family 
     house price for use for adjusting the conforming loan 
     limitations of the enterprises. In establishing such method, 
     the Director shall take into consideration the monthly survey 
     of all major lenders conducted by the Federal Housing Finance 
     Agency to determine the national average 1-family house 
     price, the House Price Index maintained by the Office of 
     Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development before the effective date under 
     section 365 of the Federal Housing Finance Reform Act of 
     2008, any appropriate house price indexes of the Bureau of 
     the Census of the Department of Commerce, and any other 
     indexes or measures that the Director considers appropriate.
       ``(b) GAO Audit.--
       ``(1) In general.--At such times as are required under 
     paragraph (2), the Comptroller General of the United States 
     shall conduct an audit of the methodology established by the 
     Director under subsection (a) to determine whether the 
     methodology established is an accurate and appropriate means 
     of measuring changes to the national average 1-family house 
     price.
       ``(2) Timing.--An audit referred to in paragraph (1) shall 
     be conducted and completed not later than the expiration of 
     the 180-day period that begins upon each of the following 
     dates:
       ``(A) Establishment.--The date upon which such methodology 
     is initially established under subsection (a) in final form 
     by the Director.
       ``(B) Modification or amendment.--Each date upon which any 
     modification or amendment to such methodology is adopted in 
     final form by the Director.
       ``(3) Report.--Within 30 days of the completion of any 
     audit conducted under this subsection, the Comptroller 
     General shall submit a report detailing the results and 
     conclusions of the audit to the Director, the Committee on 
     Financial Services of the House of Representatives, and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate.''.
       (d) Sense of Congress.--It is the sense of the Congress 
     that the securitization of mortgages by the Federal National 
     Mortgage Association and the Federal Home Loan Mortgage 
     Corporation plays an important role in providing liquidity to 
     the United States housing markets. Therefore, the Congress 
     encourages the Federal National Mortgage Association and the 
     Federal Home Loan Mortgage Corporation to securitize 
     mortgages acquired under the increased conforming loan limits 
     established by the amendments made by this section, to the 
     extent that such securitizations can be effected in a timely 
     and efficient manner that does not impose additional costs 
     for mortgages originated, purchased, or securitized under the 
     existing limits or interfere with the goal of adding 
     liquidity to the market.
       (e) Effective Date.--The amendments made by this section 
     shall take effect on, and shall apply beginning on, January 
     1, 2009.

     SEC. 334. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.

       (a) In General.--The Housing and Community Development Act 
     of 1992 is amended by striking section 1324 (12 U.S.C. 4544) 
     and inserting the following new section:

     ``SEC. 1324. ANNUAL HOUSING REPORT REGARDING REGULATED 
                   ENTITIES.

       ``(a) In General.--After reviewing and analyzing the 
     reports submitted under section 309(n) of the Federal 
     National Mortgage Association Charter Act, section 307(f) of 
     the Federal Home Loan Mortgage Corporation Act, and section 
     10(j)(11) of the Federal Home Loan Bank Act (12 U.S.C. 
     1430(j)(11)), the Director shall submit a report, not later 
     than October 30 of each year, to the Committee on Financial 
     Services of the House of Representatives and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate, on the 
     activities of each regulated entity.
       ``(b) Contents.--The report shall--
       ``(1) discuss the extent to which--
       ``(A) each enterprise is achieving the annual housing goals 
     established under subpart B of this part;
       ``(B) each enterprise is complying with section 1337;
       ``(C) each Federal home loan bank is complying with section 
     10(j) of the Federal Home Loan Bank Act; and
       ``(D) each regulated entity is achieving the purposes of 
     the regulated entity established by law;
       ``(2) aggregate and analyze relevant data on income to 
     assess the compliance by each enterprise with the housing 
     goals established under subpart B;
       ``(3) aggregate and analyze data on income, race, and 
     gender by census tract and other relevant classifications, 
     and compare such data with larger demographic, housing, and 
     economic trends;
       ``(4) examine actions that--
       ``(A) each enterprise has undertaken or could undertake to 
     promote and expand the annual goals established under subpart 
     B and the purposes of the enterprise established by law; and
       ``(B) each Federal home loan bank has taken or could 
     undertake to promote and expand the community investment 
     program and affordable housing program of the bank 
     established under subsections (i) and (j) of section 10 of 
     the Federal Home Loan Bank Act;
       ``(5) examine the primary and secondary multifamily housing 
     mortgage markets and describe--
       ``(A) the availability and liquidity of mortgage credit;
       ``(B) the status of efforts to provide standard credit 
     terms and underwriting guidelines for multifamily housing and 
     to securitize such mortgage products; and
       ``(C) any factors inhibiting such standardization and 
     securitization;
       ``(6) examine actions each regulated entity has undertaken 
     and could undertake to promote and expand opportunities for 
     first-time homebuyers, including the use of alternative 
     credit scoring;
       ``(7) describe any actions taken under section 1325(5) with 
     respect to originators found to violate fair lending 
     procedures;
       ``(8) discuss and analyze existing conditions and trends, 
     including conditions and trends relating to pricing, in the 
     housing markets and mortgage markets; and
       ``(9) identify the extent to which each enterprise is 
     involved in mortgage purchases and secondary market 
     activities involving subprime loans (as identified in 
     accordance with the regulations issued pursuant to section 
     334(b) of the Federal Housing Finance Reform Act of 2008) and 
     compare the characteristics of subprime loans purchased and 
     securitized by the enterprises to other loans purchased and 
     securitized by the enterprises.
       ``(c) Data Collection and Reporting.--
       ``(1) In general.--To assist the Director in analyzing the 
     matters described in subsection (b) and establishing the 
     methodology described in section 1322, the Director shall 
     conduct, on a monthly basis, a survey of mortgage markets in 
     accordance with this subsection.
       ``(2) Data points.--Each monthly survey conducted by the 
     Director under paragraph (1) shall collect data on--
       ``(A) the characteristics of individual mortgages that are 
     eligible for purchase by the enterprises and the 
     characteristics of individual mortgages that are not eligible 
     for purchase by the enterprises including, in both cases, 
     information concerning--
       ``(i) the price of the house that secures the mortgage;
       ``(ii) the loan-to-value ratio of the mortgage, which shall 
     reflect any secondary liens on the relevant property;
       ``(iii) the terms of the mortgage;
       ``(iv) the creditworthiness of the borrower or borrowers; 
     and
       ``(v) whether the mortgage, in the case of a conforming 
     mortgage, was purchased by an enterprise; and
       ``(B) such other matters as the Director determines to be 
     appropriate.
       ``(3) Public availability.--The Director shall make any 
     data collected by the Director in connection with the conduct 
     of a monthly survey available to the public in a timely 
     manner, provided that the Director may modify the data 
     released to the public to ensure that the data is not 
     released in an identifiable form.
       ``(4) Definition.--For purposes of this subsection, the 
     term `identifiable form' means any representation of 
     information that permits the identity of a borrower to which 
     the information relates to be reasonably inferred by either 
     direct or indirect means.''.
       (b) Standards for Subprime Loans.--The Director shall, not 
     later than one year after

[[Page 8198]]

     the effective date under section 365, by regulations issued 
     under section 1316G of the Housing and Community Development 
     Act of 1992, establish standards by which mortgages purchased 
     and mortgages purchased and securitized shall be 
     characterized as subprime for the purpose of, and only for 
     the purpose of, complying with the reporting requirement 
     under section 1324(b)(9) of such Act.

     SEC. 335. ANNUAL REPORTS BY REGULATED ENTITIES ON AFFORDABLE 
                   HOUSING STOCK.

       The Housing and Community Development Act of 1992 is 
     amended by inserting after section 1328 (12 U.S.C. 4548) the 
     following new section:

     ``SEC. 1329. ANNUAL REPORTS ON AFFORDABLE HOUSING STOCK.

       ``(a) In General.--To obtain information helpful in 
     applying the formula under section 1337(c)(2) for the 
     affordable housing program under such section and for other 
     appropriate uses, the regulated entities shall conduct, or 
     provide for the conducting of, a study on an annual basis to 
     determine the levels of affordable housing inventory, and the 
     changes in such levels, in communities throughout the United 
     States.
       ``(b) Contents.--The annual study under this section shall 
     determine, for the United States, each State, and each 
     community within each State--
       ``(1) the level of affordable housing inventory, including 
     affordable rental dwelling units and affordable homeownership 
     dwelling units;
       ``(2) any changes to the level of such inventory during the 
     12-month period of the study under this section, including--
       ``(A) any additions to such inventory, disaggregated by the 
     category of such additions (including new construction or 
     housing conversion);
       ``(B) any subtractions from such inventory, disaggregated 
     by the category of such subtractions (including abandonment, 
     demolition, or upgrade to market-rate housing);
       ``(C) the number of new affordable dwelling units placed in 
     service; and
       ``(D) the number of affordable housing dwelling units 
     withdrawn from service;
       ``(3) the types of financing used to build any dwelling 
     units added to such inventory level and the period during 
     which such units are required to remain affordable;
       ``(4) any excess demand for affordable housing, including 
     the number of households on rental housing waiting lists and 
     the tenure of the wait on such lists; and
       ``(5) such other information as the Director may require.
       ``(c) Report.--For each annual study conducted pursuant to 
     this section, the regulated entities shall submit to the 
     Congress, and make publicly available, a report setting forth 
     the findings of the study.
       ``(d) Regulations and Timing.--The Director shall, by 
     regulation, establish requirements for the studies and 
     reports under this section, including deadlines for the 
     submission of such annual reports and standards for 
     determining affordable housing.''.

     SEC. 336. MORTGAGOR IDENTIFICATION REQUIREMENTS FOR MORTGAGES 
                   OF REGULATED ENTITIES.

       (a) In General.--Subpart A of part 2 of subtitle A of title 
     XIII of the Housing and Community Development Act of 1992 (12 
     U.S.C. 4541 et seq.), as amended by the preceding provisions 
     of this title, is further amended by adding at the end the 
     following new section:

     ``SEC. 1330. MORTGAGOR IDENTIFICATION REQUIREMENTS FOR 
                   MORTGAGES OF REGULATED ENTITIES.

       ``(a) Limitation.--The Director shall by regulation 
     establish standards, and shall enforce compliance with such 
     standards, that--
       ``(1) prohibit the enterprises from the purchase, service, 
     holding, selling, lending on the security of, or otherwise 
     dealing with any mortgage on a one- to four-family residence 
     that will be used as the principal residence of the mortgagor 
     that does not meet the requirements under subsection (b); and
       ``(2) prohibit the Federal home loan banks from providing 
     any advances to a member for use in financing, and from 
     accepting as collateral for any advance to a member, any 
     mortgage on a one- to four-family residence that will be used 
     as the principal residence of the mortgagor that does not 
     meet the requirements under subsection (b).
       ``(b) Identification Requirements.--The requirements under 
     this subsection with respect to a mortgage are that the 
     mortgagor have, at the time of settlement on the mortgage, a 
     Social Security account number.''.
       (b) Fannie Mae.--Section 304 of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1719) is amended 
     by adding at the end the following new subsection:
       ``(g) Prohibition Regarding Mortgagor Identification 
     Requirement.--Nothing in this Act may be construed to 
     authorize the corporation to purchase, service, hold, sell, 
     lend on the security of, or otherwise deal with any mortgage 
     that the corporation is prohibited from so dealing with under 
     the standards issued under section 1330 of the Housing and 
     Community Development Act of 1992 by the Director of the 
     Federal Housing Finance Agency.''.
       (c) Freddie Mac.--Section 305 of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1454) is amended by 
     adding at the end the following new subsection:
       ``(d) Prohibition Regarding Mortgagor Identification 
     Requirements.--Nothing in this Act may be construed to 
     authorize the Corporation to purchase, service, hold, sell, 
     lend on the security of, or otherwise deal with any mortgage 
     that the Corporation is prohibited from so dealing with under 
     the standards issued under section 1330 of the Housing and 
     Community Development Act of 1992 by the Director of the 
     Federal Housing Finance Agency.''.
       (d) Federal Home Loan Banks.--Section 10(a) of the Federal 
     Home Loan Bank Act (12 U.S.C. 1430(a)) is amended--
       (1) by redesignating paragraph (6) as paragraph (7); and
       (2) by inserting after paragraph (5) the following new 
     paragraph:
       ``(6) Prohibition regarding mortgagor identification 
     requirements.--Nothing in this Act may be construed to 
     authorize a Federal Home Loan Bank to provide any advance to 
     a member for use in financing, or accept as collateral for an 
     advance under this section, any mortgage that a Bank is 
     prohibited from so accepting under the standards issued under 
     section 1330 of the Housing and Community Development Act of 
     1992 by the Director of the Federal Housing Finance 
     Agency.''.

     SEC. 337. REVISION OF HOUSING GOALS.

       (a) Housing Goals.--The Housing and Community Development 
     Act of 1992 is amended by striking sections 1331 through 1334 
     (12 U.S.C. 4561-4) and inserting the following new sections:

     ``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

       ``(a) In General.--The Director shall establish, effective 
     for the first year that begins after the effective date under 
     section 365 of the Federal Housing Finance Reform Act of 2008 
     and each year thereafter, annual housing goals, with respect 
     to the mortgage purchases by the enterprises, as follows:
       ``(1) Single family housing goals.--Three single-family 
     housing goals under section 1332.
       ``(2) Multifamily special affordable housing goals.--A 
     multifamily special affordable housing goal under section 
     1333.
       ``(b) Eliminating Interest Rate Disparities.--
       ``(1) In general.--Upon request by the Director, an 
     enterprise shall provide to the Director, in a form 
     determined by the Director, data the Director may review to 
     determine whether there exist disparities in interest rates 
     charged on mortgages to borrowers who are minorities as 
     compared with comparable mortgages to borrowers of similar 
     creditworthiness who are not minorities.
       ``(2) Remedial actions upon preliminary finding.--Upon a 
     preliminary finding by the Director that a pattern of 
     disparities in interest rates with respect to any lender or 
     lenders exists pursuant to the data provided by an enterprise 
     in paragraph (1), the Director shall--
       ``(A) refer the preliminary finding to the appropriate 
     regulatory or enforcement agency for further review;
       ``(B) require the enterprise to submit additional data with 
     respect to any lender or lenders, as appropriate and to the 
     extent practicable, to the Director who shall submit any such 
     additional data to the regulatory or enforcement agency for 
     appropriate action; and
       ``(C) require the enterprise to undertake remedial actions, 
     as appropriate, pursuant to section 1325(5) (12 U.S.C. 
     4545(5)).
       ``(3) Annual report to congress.--The Director shall submit 
     to the Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate a report describing the actions 
     taken, and being taken, by the Director to carry out this 
     subsection. No such report shall identify any lender or 
     lenders who have not been found to have engaged in 
     discriminatory lending practices pursuant to a final 
     adjudication on the record, and after opportunity for an 
     administrative hearing, in accordance with subchapter II of 
     chapter 5 of title 5, United States Code.
       ``(4) Protection of identity of individuals.--In carrying 
     out this subsection, the Director shall ensure that no 
     property-related or financial information that would enable a 
     borrower to be identified shall be made public.
       ``(c) Timing.--The Director shall establish an annual 
     deadline by which the Director shall establish the annual 
     housing goals under this subpart for each year, taking into 
     consideration the need for the enterprises to reasonably and 
     sufficiently plan their operations and activities in advance, 
     including operations and activities necessary to meet such 
     annual goals.

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

       ``(a) In General.--The Director shall establish annual 
     goals for the purchase by each enterprise of conventional, 
     conforming, single-family, purchase money mortgages financing 
     owner-occupied and rental housing for each of the following 
     categories of families:
       ``(1) Low-income families.
       ``(2) Families that reside in low-income areas.
       ``(3) Very low-income families.

[[Page 8199]]

       ``(b) Refinance Subgoal.--
       ``(1) In general.--The Director shall establish a separate 
     subgoal within each goal under subsection (a)(1) for the 
     purchase by each enterprise of mortgages for low-income 
     families on single family housing given to pay off or prepay 
     an existing loan secured by the same property. The Director 
     shall, for each year, determine whether each enterprise has 
     complied with the subgoal under this subsection in the same 
     manner provided under this section for determining compliance 
     with the housing goals.
       ``(2) Enforcement.--For purposes of section 1336, the 
     subgoal established under paragraph (1) of this subsection 
     shall be considered to be a housing goal established under 
     this section. Such subgoal shall not be enforceable under any 
     other provision of this title (including subpart C of this 
     part) other than section 1336 or under any provision of the 
     Federal National Mortgage Association Charter Act or the 
     Federal Home Loan Mortgage Corporation Act.
       ``(c) Determination of Compliance.--The Director shall 
     determine, for each year that the housing goals under this 
     section are in effect pursuant to section 1331(a), whether 
     each enterprise has complied with the single-family housing 
     goals established under this section for such year. An 
     enterprise shall be considered to be in compliance with such 
     a goal for a year only if, for each of the types of families 
     described in subsection (a), the percentage of the number of 
     conventional, conforming, single-family, owner-occupied or 
     rental, as applicable, purchase money mortgages purchased by 
     each enterprise in such year that serve such families, meets 
     or exceeds the target for the year for such type of family 
     that is established under subsection (d).
       ``(d) Annual Targets.--
       ``(1) In general.--Except as provided in paragraph (2), for 
     each of the types of families described in subsection (a), 
     the target under this subsection for a year shall be the 
     average percentage, for the three years that most recently 
     precede such year and for which information under the Home 
     Mortgage Disclosure Act of 1975 is publicly available, of the 
     number of conventional, conforming, single-family, owner-
     occupied or rental, as applicable, purchase money mortgages 
     originated in such year that serves such type of family, as 
     determined by the Director using the information obtained and 
     determined pursuant to paragraphs (3) and (4).
       ``(2) Authority to increase targets.--
       ``(A) In general.--The Director may, for any year, 
     establish by regulation, for any or all of the types of 
     families described in subsection (a), percentage targets that 
     are higher than the percentages for such year determined 
     pursuant to paragraph (1), to reflect expected changes in 
     market performance related to such information under the Home 
     Mortgage Disclosure Act of 1975.
       ``(B) Factors.--In establishing any targets pursuant to 
     subparagraph (A), the Director shall consider the following 
     factors:
       ``(i) National housing needs.
       ``(ii) Economic, housing, and demographic conditions.
       ``(iii) The performance and effort of the enterprises 
     toward achieving the housing goals under this section in 
     previous years.
       ``(iv) The size of the conventional mortgage market serving 
     each of the types of families described in subsection (a) 
     relative to the size of the overall conventional mortgage 
     market.
       ``(v) The ability of the enterprise to lead the industry in 
     making mortgage credit available.
       ``(vi) The need to maintain the sound financial condition 
     of the enterprises.
       ``(3) HMDA information.--The Director shall annually obtain 
     information submitted in compliance with the Home Mortgage 
     Disclosure Act of 1975 regarding conventional, conforming, 
     single-family, owner-occupied or rental, as applicable, 
     purchase money mortgages originated and purchased for the 
     previous year.
       ``(4) Conforming mortgages.--In determining whether a 
     mortgage is a conforming mortgage for purposes of this 
     paragraph, the Director shall consider the original principal 
     balance of the mortgage loan to be the principal balance as 
     reported in the information referred to in paragraph (3), as 
     rounded to the nearest thousand dollars.
       ``(e) Notice of Determination and Enterprise Comment.--
       ``(1) Notice.--Within 30 days of making a determination 
     under subsection (c) regarding a compliance of an enterprise 
     for a year with a housing goal established under this section 
     and before any public disclosure thereof, the Director shall 
     provide notice of the determination to the enterprise, which 
     shall include an analysis and comparison, by the Director, of 
     the performance of the enterprise for the year and the 
     targets for the year under subsection (d).
       ``(2) Comment period.--The Director shall provide each 
     enterprise an opportunity to comment on the determination 
     during the 30-day period beginning upon receipt by the 
     enterprise of the notice.
       ``(f) Use of Borrower Income.--In monitoring the 
     performance of each enterprise pursuant to the housing goals 
     under this section and evaluating such performance (for 
     purposes of section 1336), the Director shall consider a 
     mortgagor's income to be such income at the time of 
     origination of the mortgage.
       ``(g) Consideration of Units in Single-Family Rental 
     Housing.--In establishing any goal under this subpart, the 
     Director may take into consideration the number of housing 
     units financed by any mortgage on single-family rental 
     housing purchased by an enterprise.

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

       ``(a) Establishment.--
       ``(1) In general.--The Director shall establish, by 
     regulation, an annual goal for the purchase by each 
     enterprise of each of the following types of mortgages on 
     multifamily housing:
       ``(A) Mortgages that finance dwelling units for low-income 
     families.
       ``(B) Mortgages that finance dwelling units for very low-
     income families.
       ``(C) Mortgages that finance dwelling units assisted by the 
     low-income housing tax credit under section 42 of the 
     Internal Revenue Code of 1986.
       ``(2) Additional requirements for smaller projects.--The 
     Director shall establish, within the goal under this section, 
     additional requirements for the purchase by each enterprise 
     of mortgages described in paragraph (1) for multifamily 
     housing projects of a smaller or limited size, which may be 
     based on the number of dwelling units in the project or the 
     amount of the mortgage, or both, and shall include 
     multifamily housing projects of such smaller sizes as are 
     typical among such projects that serve rural areas.
       ``(3) Factors.--In establishing the goal under this section 
     relating to mortgages on multifamily housing for an 
     enterprise for a year, the Director shall consider--
       ``(A) national multifamily mortgage credit needs;
       ``(B) the performance and effort of the enterprise in 
     making mortgage credit available for multifamily housing in 
     previous years;
       ``(C) the size of the multifamily mortgage market;
       ``(D) the ability of the enterprise to lead the industry in 
     making mortgage credit available, especially for underserved 
     markets, such as for small multifamily projects of 5 to 50 
     units, multifamily properties in need of rehabilitation, and 
     multifamily properties located in rural areas; and
       ``(E) the need to maintain the sound financial condition of 
     the enterprise.
       ``(b) Units Financed by Housing Finance Agency Bonds.--The 
     Director shall give credit toward the achievement of the 
     multifamily special affordable housing goal under this 
     section (for purposes of section 1336) to dwelling units in 
     multifamily housing that otherwise qualifies under such goal 
     and that is financed by tax-exempt or taxable bonds issued by 
     a State or local housing finance agency, but only if such 
     bonds--
       ``(1) are secured by a guarantee of the enterprise; or
       ``(2) are not investment grade and are purchased by the 
     enterprise.
       ``(c) Use of Tenant Income or Rent.--The Director shall 
     monitor the performance of each enterprise in meeting the 
     goals established under this section and shall evaluate such 
     performance (for purposes of section 1336) based on--
       ``(1) the income of the prospective or actual tenants of 
     the property, where such data are available; or
       ``(2) where the data referred to in paragraph (1) are not 
     available, rent levels affordable to low-income and very low-
     income families.

     A rent level shall be considered to be affordable for 
     purposes of this subsection for an income category referred 
     to in this subsection if it does not exceed 30 percent of the 
     maximum income level of such income category, with 
     appropriate adjustments for unit size as measured by the 
     number of bedrooms.
       ``(d) Determination of Compliance.--The Director shall, for 
     each year that the housing goal under this section is in 
     effect pursuant to section 1331(a), determine whether each 
     enterprise has complied with such goal and the additional 
     requirements under subsection (a)(2).

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

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

[[Page 8200]]

     the enterprise. A denial by the Director to reduce the level 
     of any goal under this section may be appealed to the United 
     States District Court for the District of Columbia or the 
     United States district court in the jurisdiction in which the 
     headquarters of an enterprise is located.''.
       (b) Conforming Amendments.--The Housing and Community 
     Development Act of 1992 is amended--
       (1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter 
     preceding paragraph (1), by striking ``low- and moderate-
     income housing goal'' and all that follows through ``section 
     1334'' and inserting ``housing goals established under this 
     subpart''; and
       (2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by 
     striking ``sections 1332, 1333, and 1334,'' and inserting 
     ``this subpart''.
       (c) Definitions.--Section 1303 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4502), as amended by the 
     preceding provisions of this title, is further amended--
       (1) in paragraph (22) (relating to the definition of ``very 
     low-income''), by striking ``60 percent'' each place such 
     term appears and inserting ``50 percent'';
       (2) by redesignating paragraphs (19) through (22) as 
     paragraphs (23) through (26), respectively;
       (3) by inserting after paragraph (18) the following new 
     paragraph:
       ``(22) Rural area.--The term `rural area' has the meaning 
     given such term in section 520 of the Housing Act of 1949 (42 
     U.S.C. 1490), except that such term includes micropolitan 
     areas and tribal trust lands.''.
       (4) by redesignating paragraphs (13) through (18) as 
     paragraphs (16) through (21), respectively;
       (5) by inserting after paragraph (12) the following new 
     paragraph:
       ``(15) Low-income area.--The term `low income area' means a 
     census tract or block numbering area in which the median 
     income does not exceed 80 percent of the median income for 
     the area in which such census tract or block numbering area 
     is located, and, for the purposes of section 1332(a)(2), 
     shall include families having incomes not greater than 100 
     percent of the area median income who reside in minority 
     census tracts.'';
       (6) by redesignating paragraphs (11) and (12) as paragraphs 
     (13) and (14), respectively;
       (7) by inserting after paragraph (10) the following new 
     paragraph:
       ``(12) Extremely low-income.--The term `extremely low-
     income' means--
       ``(A) in the case of owner-occupied units, income not in 
     excess of 30 percent of the area median income; and
       ``(B) in the case of rental units, income not in excess of 
     30 percent of the area median income, with adjustments for 
     smaller and larger families, as determined by the 
     Secretary.'';
       (8) by redesignating paragraphs (7) through (10) as 
     paragraphs (8) through (11), respectively; and
       (9) by inserting after paragraph (6) the following new 
     paragraph:
       ``(7) Conforming mortgage.--The term `conforming mortgage' 
     means, with respect to an enterprise, a conventional mortgage 
     having an original principal obligation that does not exceed 
     the dollar limitation, in effect at the time of such 
     origination, under, as applicable--
       ``(A) section 302(b)(2) of the Federal National Mortgage 
     Association Charter Act; or
       ``(B) section 305(a)(2) of the Federal Home Loan Mortgage 
     Corporation Act.''.

     SEC. 338. DUTY TO SERVE UNDERSERVED MARKETS.

       (a) Establishment and Evaluation of Performance.--Section 
     1335 of the Housing and Community Development Act of 1992 (12 
     U.S.C. 4565) is amended--
       (1) in the section heading, by inserting ``DUTY TO SERVE 
     UNDERSERVED MARKETS AND'' before ``OTHER'';
       (2) by striking subsection (b);
       (3) in subsection (a)--
       (A) in the matter preceding paragraph (1), by inserting 
     ``and to carry out the duty under subsection (a) of this 
     section'' before ``, each enterprise shall'';
       (B) in paragraph (3), by inserting ``and'' after the 
     semicolon at the end;
       (C) in paragraph (4), by striking ``; and'' and inserting a 
     period;
       (D) by striking paragraph (5); and
       (E) by redesignating such subsection as subsection (b);
       (4) by inserting before subsection (b) (as so redesignated 
     by paragraph (3)(E) of this subsection) the following new 
     subsection:
       ``(a) Duty To Serve Underserved Markets.--
       ``(1) Duty.--In accordance with the purpose of the 
     enterprises under section 301(3) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1716) and section 
     301(b)(3) of the Federal Home Loan Mortgage Corporation Act 
     (12 U.S.C. 1451 note) to undertake activities relating to 
     mortgages on housing for very low-, low-, and moderate-income 
     families involving a reasonable economic return that may be 
     less than the return earned on other activities, each 
     enterprise shall have the duty to increase the liquidity of 
     mortgage investments and improve the distribution of 
     investment capital available for mortgage financing for 
     underserved markets.
       ``(2) Underserved markets.--To meet its duty under 
     paragraph (1), each enterprise shall comply with the 
     following requirements with respect to the following 
     underserved markets:
       ``(A) Manufactured housing.--The enterprise shall lead the 
     industry in developing loan products and flexible 
     underwriting guidelines to facilitate a secondary market for 
     mortgages on manufactured homes for very low-, low-, and 
     moderate-income families.
       ``(B) Affordable housing preservation.--The enterprise 
     shall lead the industry in developing loan products and 
     flexible underwriting guidelines to facilitate a secondary 
     market to preserve housing affordable to very low-, low-, and 
     moderate-income families, including housing projects 
     subsidized under--
       ``(i) the project-based and tenant-based rental assistance 
     programs under section 8 of the United States Housing Act of 
     1937;
       ``(ii) the program under section 236 of the National 
     Housing Act;
       ``(iii) the below-market interest rate mortgage program 
     under section 221(d)(4) of the National Housing Act;
       ``(iv) the supportive housing for the elderly program under 
     section 202 of the Housing Act of 1959;
       ``(v) the supportive housing program for persons with 
     disabilities under section 811 of the Cranston-Gonzalez 
     National Affordable Housing Act;
       ``(vi) the programs under title IV of the McKinney-Vento 
     Homeless Assistance Act (42 U.S.C. 11361 et seq.), but only 
     permanent supportive housing projects subsidized under such 
     programs; and
       ``(vii) the rural rental housing program under section 515 
     of the Housing Act of 1949.
       ``(C) Rural and other underserved markets.--The enterprise 
     shall lead the industry in developing loan products and 
     flexible underwriting guidelines to facilitate a secondary 
     market for mortgages on housing for very low-, low-, and 
     moderate-income families in rural areas, and for mortgages 
     for housing for any other underserved market for very low-, 
     low-, and moderate-income families that the Secretary 
     identifies as lacking adequate credit through conventional 
     lending sources. Such underserved markets may be identified 
     by borrower type, market segment, or geographic area.''; and
       (5) by adding at the end the following new subsection:
       ``(c) Evaluation and Reporting of Compliance.--
       ``(1) In general.--Not later than 6 months after the 
     effective date under section 365 of the Federal Housing 
     Finance Reform Act of 2008, the Director shall establish a 
     manner for evaluating whether, and the extent to which, the 
     enterprises have complied with the duty under subsection (a) 
     to serve underserved markets and for rating the extent of 
     such compliance. Using such method, the Director shall, for 
     each year, evaluate such compliance and rate the performance 
     of each enterprise as to extent of compliance. The Director 
     shall include such evaluation and rating for each enterprise 
     for a year in the report for that year submitted pursuant to 
     section 1319B(a).
       ``(2) Separate evaluations.--In determining whether an 
     enterprise has complied with the duty referred to in 
     paragraph (1), the Director shall separately evaluate whether 
     the enterprise has complied with such duty with respect to 
     each of the underserved markets identified in subsection (a), 
     taking into consideration--
       ``(A) the development of loan products and more flexible 
     underwriting guidelines;
       ``(B) the extent of outreach to qualified loan sellers in 
     each of such underserved markets; and
       ``(C) the volume of loans purchased in each of such 
     underserved markets.
       ``(3) Manufactured housing market.--In determining whether 
     an enterprise has complied with the duty under subparagraph 
     (A) of subsection (a)(2), the Director may consider loans 
     secured by both real and personal property.''.
       (b) Enforcement.--Subsection (a) of section 1336 of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 
     4566(a)) is amended--
       (1) in paragraph (1), by inserting ``and with the duty 
     under section 1335(a) of each enterprise with respect to 
     underserved markets,'' before ``as provided in this 
     section''; and
       (2) by adding at the end of such subsection, as amended by 
     the preceding provisions of this subtitle, the following new 
     paragraph:
       ``(4) Enforcement of duty to provide mortgage credit to 
     underserved markets.--The duty under section 1335(a) of each 
     enterprise to serve underserved markets (as determined in 
     accordance with section 1335(c)) shall be enforceable under 
     this section to the same extent and under the same provisions 
     that the housing goals established under this subpart are 
     enforceable. Such duty shall not be enforceable under any 
     other provision of this title (including subpart C of this 
     part) other than this section or under any provision of the 
     Federal National Mortgage Association Charter Act or the 
     Federal Home Loan Mortgage Corporation Act.''.

[[Page 8201]]



     SEC. 339. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING 
                   GOALS.

       (a) Additional Credit for Certain Mortgages.--Section 
     1336(a) of the Housing and Community Development Act of 1992 
     (12 U.S.C. 4566(a)) is amended--
       (1) in paragraph (2), by inserting ``, except as provided 
     in paragraph (4),'' after ``which''; and
       (2) by adding at the end the following new paragraph:
       ``(5) Additional credit.--The Director shall assign more 
     than 125 percent credit toward achievement, under this 
     section, of the housing goals for mortgage purchase 
     activities of the enterprises that comply with the 
     requirements of such goals and support--
       ``(A) housing that meets energy efficiency or other 
     environmental standards that are established by a Federal, 
     State, or local governmental authority with respect to the 
     geographic area where the housing is located or are otherwise 
     widely recognized; or
       ``(B) housing that includes a licensed childcare center.
     The availability of additional credit under this paragraph 
     shall not be used to increase any housing goal, subgoal, or 
     target established under this subpart.''.
       (b) Monitoring and Enforcement.--Section 1336 of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 
     4566) is amended--
       (1) in subsection (b)--
       (A) in the subsection heading, by inserting ``Preliminary'' 
     before ``Determination'';
       (B) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) Notice.--If the Director preliminarily determines 
     that an enterprise has failed, or that there is a substantial 
     probability that an enterprise will fail, to meet any housing 
     goal established under this subpart, the Director shall 
     provide written notice to the enterprise of such a 
     preliminary determination, the reasons for such 
     determination, and the information on which the Director 
     based the determination.'';
       (C) in paragraph (2)--
       (i) in subparagraph (A), by inserting ``finally'' before 
     ``determining'';
       (ii) by striking subparagraphs (B) and (C) and inserting 
     the following new subparagraph:
       ``(B) Extension or shortening of period.--The Director 
     may--
       ``(i) extend the period under subparagraph (A) for good 
     cause for not more than 30 additional days; and
       ``(ii) shorten the period under subparagraph (A) for good 
     cause.''; and
       (iii) by redesignating subparagraph (D) as subparagraph 
     (C); and
       (D) in paragraph (3)--
       (i) in subparagraph (A), by striking ``determine'' and 
     inserting ``issue a final determination of'';
       (ii) in subparagraph (B), by inserting ``final'' before 
     ``determinations''; and
       (iii) in subparagraph (C)--

       (I) by striking ``Committee on Banking, Finance and Urban 
     Affairs'' and inserting ``Committee on Financial Services''; 
     and
       (II) by inserting ``final'' before ``determination'' each 
     place such term appears; and

       (2) in subsection (c)--
       (A) by striking the subsection designation and heading and 
     all that follows through the end of paragraph (1) and 
     inserting the following:
       ``(c) Cease and Desist Orders, Civil Money Penalties, and 
     Remedies Including Housing Plans.--
       ``(1) Requirement.--If the Director finds, pursuant to 
     subsection (b), that there is a substantial probability that 
     an enterprise will fail, or has actually failed, to meet any 
     housing goal under this subpart and that the achievement of 
     the housing goal was or is feasible, the Director may require 
     that the enterprise submit a housing plan under this 
     subsection. If the Director makes such a finding and the 
     enterprise refuses to submit such a plan, submits an 
     unacceptable plan, fails to comply with the plan or the 
     Director finds that the enterprise has failed to meet any 
     housing goal under this subpart, in addition to requiring an 
     enterprise to submit a housing plan, the Director may issue a 
     cease and desist order in accordance with section 1341, 
     impose civil money penalties in accordance with section 1345, 
     or order other remedies as set forth in paragraph (7) of this 
     subsection.'';
       (B) in paragraph (2)--
       (i) by striking ``Contents.--Each housing plan'' and 
     inserting ``Housing plan.--If the Director requires a housing 
     plan under this section, such a plan''; and
       (ii) in subparagraph (B), by inserting ``and changes in its 
     operations'' after ``improvements'';
       (C) in paragraph (3)--
       (i) by inserting ``comply with any remedial action or'' 
     before ``submit a housing plan''; and
       (ii) by striking ``under subsection (b)(3) that a housing 
     plan is required'';
       (D) in paragraph (4), by striking the first two sentences 
     and inserting the following: ``The Director shall review each 
     submission by an enterprise, including a housing plan 
     submitted under this subsection, and not later than 30 days 
     after submission, approve or disapprove the plan or other 
     action. The Director may extend the period for approval or 
     disapproval for a single additional 30-day period if the 
     Director determines such extension necessary.''; and
       (E) by adding at the end the following new paragraph:
       ``(7) Additional remedies for failure to meet goals.--In 
     addition to ordering a housing plan under this section, 
     issuing cease and desist orders under section 1341, and 
     ordering civil money penalties under section 1345, the 
     Director may seek other actions when an enterprise fails to 
     meet a goal, and exercise appropriate enforcement authority 
     available to the Director under this Act to prohibit the 
     enterprise from initially offering any product (as such term 
     is defined in section 1321(f)) or engaging in any new 
     activities, services, undertakings, and offerings and to 
     order the enterprise to suspend products and activities, 
     services, undertakings, and offerings pending its achievement 
     of the goal.''.

     SEC. 340. AFFORDABLE HOUSING FUND.

       (a) In General.--The Housing and Community Development Act 
     of 1992 is amended by striking sections 1337 and 1338 (12 
     U.S.C. 4562 note) and inserting the following new section:

     ``SEC. 1337. AFFORDABLE HOUSING FUND.

       ``(a) Establishment and Purpose.--The Director, in 
     consultation with the Secretary of Housing and Urban 
     Development, shall establish and manage an affordable housing 
     fund in accordance with this section, which shall be funded 
     with amounts allocated by the enterprises under subsection 
     (b). The purpose of the affordable housing fund shall be to 
     provide formula grants to grantees for use--
       ``(1) to increase homeownership for extremely low-and very 
     low-income families;
       ``(2) to increase investment in housing in low-income 
     areas, and areas designated as qualified census tracts or an 
     area of chronic economic distress pursuant to section 143(j) 
     of the Internal Revenue Code of 1986 (26 U.S.C. 143(j));
       ``(3) to increase and preserve the supply of rental and 
     owner-occupied housing for extremely low- and very low-income 
     families;
       ``(4) to increase investment in public infrastructure 
     development in connection with housing assisted under this 
     section; and
       ``(5) to leverage investments from other sources in 
     affordable housing and in public infrastructure development 
     in connection with housing assisted under this section.
       ``(b) Allocation of Amounts by Enterprises.--
       ``(1) In general.--In accordance with regulations issued by 
     the Director under subsection (m) and subject to paragraph 
     (2) of this subsection and subsection (i)(5), each enterprise 
     shall allocate to the affordable housing fund established 
     under subsection (a), in each of the years 2008 through 2012, 
     an amount equal to 1.2 basis points for each dollar of the 
     average total mortgage portfolio of the enterprise during the 
     preceding year.
       ``(2) Suspension of contributions.--The Director shall 
     temporarily suspend the allocation under paragraph (1) by an 
     enterprise to the affordable housing fund upon a finding by 
     the Director that such allocations--
       ``(A) are contributing, or would contribute, to the 
     financial instability of the enterprise;
       ``(B) are causing, or would cause, the enterprise to be 
     classified as undercapitalized; or
       ``(C) are preventing, or would prevent, the enterprise from 
     successfully completing a capital restoration plan under 
     section 1369C.
       ``(3) 5-year sunset and report.--
       ``(A) Sunset.--The enterprises shall not be required to 
     make allocations to the affordable housing fund in 2012 or in 
     any year thereafter.
       ``(B) Report on program continuance.--Not later than June 
     30, 2011, the Director shall submit to the Committee on 
     Financial Services of the House of Representatives and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate a report making recommendations on whether the program 
     under this section, including the requirement for the 
     enterprises to make allocations to the affordable housing 
     fund, should be extended and on any modifications for the 
     program.
       ``(4) Prohibition of pass-through of cost of allocations.--
     The Director shall, by regulation, prohibit each enterprise 
     from redirecting such costs, through increased charges or 
     fees, or decreased premiums, or in any other manner, to the 
     originators of mortgages purchased or securitized by the 
     enterprise.
       ``(c) Affordable Housing Needs Formulas.--
       ``(1) Allocation for 2008.--
       ``(A) Allocation percentages for louisiana and 
     mississippi.--For purposes of subsection (d)(1)(A), the 
     allocation percentages for 2008 for the grantees under this 
     section for such year shall be as follows:
       ``(i) The allocation percentage for the Louisiana Housing 
     Finance Agency shall be 75 percent.
       ``(ii) The allocation percentage for the Mississippi 
     Development Authority shall be 25 percent.
       ``(B) Use in disaster areas.--Affordable housing grant 
     amounts for 2008 shall be used only as provided in subsection 
     (g) only for such eligible activities in areas that were 
     subject to a declaration by the President of a major disaster 
     or emergency under the Robert T. Stafford Disaster Relief and 
     Emergency Assistance Act (42 U.S.C. 5121 et seq.)

[[Page 8202]]

     in connection with Hurricane Katrina or Rita of 2005.
       ``(2) Allocation formula for other years.--The Secretary of 
     Housing and Urban Development shall, by regulation, establish 
     a formula to allocate, among the States (as such term is 
     defined in section 1303) and federally recognized Indian 
     tribes, the amounts provided by the enterprises in each year 
     referred to subsection (b)(1), other than 2008, to the 
     affordable housing fund established under this section. The 
     formula shall be based on the following factors, with respect 
     to each State and tribe:
       ``(A) The ratio of the population of the State or federally 
     recognized Indian tribe to the aggregate population of all 
     the States and tribes.
       ``(B) The percentage of families in the State or federally 
     recognized Indian tribe that pay more than 50 percent of 
     their annual income for housing costs.
       ``(C) The percentage of persons in the State or federally 
     recognized Indian tribe that are members of extremely low- or 
     very low-income families.
       ``(D) The cost of developing or carrying out rehabilitation 
     of housing in the State or for the federally recognized 
     Indian tribe.
       ``(E) The percentage of families in the State or federally 
     recognized Indian tribe that live in substandard housing.
       ``(F) The percentage of housing stock in the State or for 
     the federally recognized Indian tribe that is extremely old 
     housing.
       ``(G) Any other factors that the Secretary determines to be 
     appropriate.
       ``(3) Failure to establish.--If, in any year referred to in 
     subsection (b)(1), other than 2008, the regulations 
     establishing the formula required under paragraph (2) of this 
     subsection have not been issued by the date that the Director 
     determines the amounts described in subsection (d)(1) to be 
     available for affordable housing fund grants in such year, 
     for purposes of such year any amounts for a State (as such 
     term is defined in section 1303 of this Act) that would 
     otherwise be determined under subsection (d) by applying the 
     formula established pursuant to paragraph (2) of this 
     subsection shall be determined instead by applying, for such 
     State, the percentage that is equal to the percentage of the 
     total amounts made available for such year for allocation 
     under subtitle A of title II of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 12741 et seq.) 
     that are allocated in such year, pursuant to such subtitle, 
     to such State (including any insular area or unit of general 
     local government, as such terms are defined in section 104 of 
     such Act (42 U.S.C. 12704), that is treated as a State under 
     section 1303 of this Act) and to participating jurisdictions 
     and other eligible entities within such State.
       ``(d) Allocation of Formula Amount; Grants.--
       ``(1) Formula amount.--For each year referred to in 
     subsection (b)(1), the Director shall determine the formula 
     amount under this section for each grantee, which shall be 
     the amount determined for such grantee--
       ``(A) for 2008, by applying the allocation percentages 
     under subparagraph (A) of subsection (c)(1) to the sum of the 
     total amounts allocated by the enterprises to the affordable 
     housing fund for such year, less any amounts used pursuant to 
     subsection (i)(1); and
       ``(B) for any other year referred to in subsection (b)(1) 
     (other than 2008), by applying the formula established 
     pursuant to paragraph (2) of subsection (c) to the sum of the 
     total amounts allocated by the enterprises to the affordable 
     housing fund for such year and any recaptured amounts 
     available pursuant to subsection (i)(4), less any amounts 
     used pursuant to subsection (i)(1).
       ``(2) Notice.--In each year referred to in subsection 
     (b)(1), not later than 60 days after the date that the 
     Director determines the amounts described in paragraph (1) to 
     be available for affordable housing fund grants to grantees 
     in such year, the Director shall cause to be published in the 
     Federal Register a notice that such amounts shall be so 
     available.
       ``(3) Grant amount.--
       ``(A) In general.--For each year referred to in subsection 
     (b)(1), the Director shall make a grant from amounts in the 
     affordable housing fund to each grantee in an amount that is, 
     except as provided in subparagraph (B), equal to the formula 
     amount under this section for the grantee. A grantee may 
     designate a State housing finance agency, housing and 
     community development entity, tribally designated housing 
     entity (as such term is defined in section 4 of the Native 
     American Housing Assistance and Self-Determination Act of 
     1997 (25 U.S.C. 4103)) or other qualified instrumentality of 
     the grantee to receive such grant amounts.
       ``(B) Reduction for failure to obtain return of misused 
     funds.--If in any year a grantee fails to obtain 
     reimbursement or return of the full amount required under 
     subsection (j)(1)(B) to be reimbursed or returned to the 
     grantee during such year--
       ``(i) except as provided in clause (ii)--

       ``(I) the amount of the grant for the grantee for the 
     succeeding year, as determined pursuant to subparagraph (A), 
     shall be reduced by the amount by which such amounts required 
     to be reimbursed or returned exceed the amount actually 
     reimbursed or returned; and
       ``(II) the amount of the grant for the succeeding year for 
     each other grantee whose grant is not reduced pursuant to 
     subclause (I) shall be increased by the amount determined by 
     applying the formula established pursuant to subsection 
     (c)(2) to the total amount of all reductions for all grantees 
     for such year pursuant to subclause (I); or

       ``(ii) in any case in which such failure to obtain 
     reimbursement or return occurs during a year immediately 
     preceding a year in which grants under this subsection will 
     not be made, the grantee shall pay to the Director for 
     reallocation among the other grantees an amount equal to the 
     amount of the reduction for the grantee that would otherwise 
     apply under clause (i)(I).
       ``(e) Grantee Allocation Plans.--
       ``(1) In general.--For each year that a grantee receives 
     affordable housing fund grant amounts, the grantee shall 
     establish an allocation plan in accordance with this 
     subsection, which shall be a plan for the distribution of 
     such grant amounts of the grantee for such year that--
       ``(A) is based on priority housing needs, as determined by 
     the grantee in accordance with the regulations established 
     under subsection (m)(2)(C);
       ``(B) complies with subsection (f); and
       ``(C) includes performance goals, benchmarks, and 
     timetables for the grantee for the production, preservation, 
     and rehabilitation of affordable rental and homeownership 
     housing with such grant amounts that comply with the 
     requirements established by the Director pursuant to 
     subsection (m)(2)(F).
       ``(2) Establishment.--In establishing an allocation plan, a 
     grantee shall notify the public of the establishment of the 
     plan, provide an opportunity for public comments regarding 
     the plan, consider any public comments received, and make the 
     completed plan available to the public.
       ``(3) Contents.--An allocation plan of a grantee shall set 
     forth the requirements for eligible recipients under 
     subsection (h) to apply to the grantee to receive assistance 
     from affordable housing fund grant amounts, including a 
     requirement that each such application include--
       ``(A) a description of the eligible activities to be 
     conducted using such assistance; and
       ``(B) a certification by the eligible recipient applying 
     for such assistance that any housing units assisted with such 
     assistance will comply with the requirements under this 
     section.
       ``(f) Selection of Activities Funded Using Affordable 
     Housing Fund Grant Amounts.--Affordable housing fund grant 
     amounts of a grantee may be used, or committed for use, only 
     for activities that--
       ``(1) are eligible under subsection (g) for such use;
       ``(2) comply with the applicable allocation plan under 
     subsection (e) of the grantee; and
       ``(3) are selected for funding by the grantee in accordance 
     with the process and criteria for such selection established 
     pursuant to subsection (m)(2)(C).
       ``(g) Eligible Activities.--Affordable housing fund grant 
     amounts of a grantee shall be eligible for use, or for 
     commitment for use, only for assistance for--
       ``(1) the production, preservation, and rehabilitation of 
     rental housing, including housing under the programs 
     identified in section 1335(a)(2)(B), except that such grant 
     amounts may be used for the benefit only of extremely low- 
     and very low-income families;
       ``(2) the production, preservation, and rehabilitation of 
     housing for homeownership, including such forms as 
     downpayment assistance, closing cost assistance, and 
     assistance for interest-rate buy-downs, that--
       ``(A) is available for purchase only for use as a principal 
     residence by families that qualify both as--
       ``(i) extremely low- and very-low income families at the 
     times described in subparagraphs (A) through (C) of section 
     215(b)(2) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12745(b)(2)); and
       ``(ii) first-time homebuyers, as such term is defined in 
     section 104 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12704), except that any reference in 
     such section to assistance under title II of such Act shall 
     for purposes of this section be considered to refer to 
     assistance from affordable housing fund grant amounts;
       ``(B) has an initial purchase price that meets the 
     requirements of section 215(b)(1) of the Cranston-Gonzalez 
     National Affordable Housing Act;
       ``(C) is subject to the same resale restrictions 
     established under section 215(b)(3) of the Cranston-Gonzalez 
     National Affordable Housing Act and applicable to the 
     participating jurisdiction that is the State in which such 
     housing is located; and
       ``(D) is made available for purchase only by, or in the 
     case of assistance under this paragraph, is made available 
     only to, homebuyers who have, before purchase--
       ``(i) completed a program of counseling with respect to the 
     responsibilities and financial management involved in 
     homeownership that is approved by the Director; except that 
     the Director may, at the request of a State, waive the 
     requirements of this subparagraph with respect to a 
     geographic area or areas within the State if: (I) the travel

[[Page 8203]]

     time or distance involved in providing counseling with 
     respect to such area or areas, as otherwise required under 
     this subparagraph, on an in-person basis is excessive or the 
     cost of such travel is prohibitive; and (II) the State 
     provides alternative forms of counseling for such area or 
     areas, which may include interactive telephone counseling, 
     on-line counseling, interactive video counseling, and 
     interactive home study counseling and a program of financial 
     literacy and education to promote an understanding of 
     consumer, economic, and personal finance issues and concepts, 
     including saving for retirement, managing credit, long-term 
     care, and estate planning and education on predatory lending, 
     identity theft, and financial abuse schemes relating to 
     homeownership that is approved by the Director, except that 
     entities providing such counseling shall not discriminate 
     against any particular form of housing; and
       ``(ii) demonstrated, in accordance with regulations as the 
     Director shall issue setting forth requirements for 
     sufficient evidence, that they are lawfully present in the 
     United States; and
       ``(3) public infrastructure development activities in 
     connection with housing activities funded under paragraph (1) 
     or (2).
       ``(h) Eligible Recipients.--Affordable housing fund grant 
     amounts of a grantee may be provided only to a recipient that 
     is an organization, agency, or other entity (including a for-
     profit entity, a nonprofit entity, and a faith-based 
     organization) that--
       ``(1) has demonstrated experience and capacity to conduct 
     an eligible activity under (g), as evidenced by its ability 
     to--
       ``(A) own, construct or rehabilitate, manage, and operate 
     an affordable multifamily rental housing development;
       ``(B) design, construct or rehabilitate, and market 
     affordable housing for homeownership;
       ``(C) provide forms of assistance, such as downpayments, 
     closing costs, or interest-rate buy-downs, for purchasers; or
       ``(D) construct related public infrastructure development 
     activities in connection with such housing activities;
       ``(2) demonstrates the ability and financial capacity to 
     undertake, comply, and manage the eligible activity;
       ``(3) demonstrates its familiarly with the requirements of 
     any other Federal, State or local housing program that will 
     be used in conjunction with such grant amounts to ensure 
     compliance with all applicable requirements and regulations 
     of such programs; and
       ``(4) makes such assurances to the grantee as the Director 
     shall, by regulation, require to ensure that the recipient 
     will comply with the requirements of this section during the 
     entire period that begins upon selection of the recipient to 
     receive such grant amounts and ending upon the conclusion of 
     all activities under subsection (g) that are engaged in by 
     the recipient and funded with such grant amounts.
       ``(i) Limitations on Use.--
       ``(1) Required amount for refcorp.--Of the aggregate amount 
     allocated pursuant to subsection (b) in each year to the 
     affordable housing fund, 25 percent shall be used as provided 
     in section 21B(f)(2)(E) of the Federal Home Loan Bank Act (12 
     U.S.C. 1441b(f)(2)(E)).
       ``(2) Required amount for homeownership activities.--Of the 
     aggregate amount of affordable housing fund grant amounts 
     provided in each year to a grantee, not less than 10 percent 
     shall be used for activities under paragraph (2) of 
     subsection (g).
       ``(3) Maximum amount for public infrastructure development 
     activities in connection with affordable housing 
     activities.--Of the aggregate amount of affordable housing 
     fund grant amounts provided in each year to a grantee, not 
     more than 12.5 percent may be used for activities under 
     paragraph (3) of subsection (g).
       ``(4) Deadline for commitment or use.--Any affordable 
     housing fund grant amounts of a grantee shall be used or 
     committed for use within two years of the date of that such 
     grant amounts are made available to the grantee. The Director 
     shall recapture into the affordable housing fund any such 
     amounts not so used or committed for use and allocate such 
     amounts under subsection (d)(1) in the first year after such 
     recapture.
       ``(5) Use of returns.--The Director shall, by regulation 
     provide that any return on a loan or other investment of any 
     affordable housing fund grant amounts of a grantee shall be 
     treated, for purposes of availability to and use by the 
     grantee, as affordable housing fund grant amounts.
       ``(6) Prohibited uses.--The Director shall--
       ``(A) by regulation, set forth prohibited uses of 
     affordable housing fund grant amounts, which shall include 
     use for--
       ``(i) political activities;
       ``(ii) advocacy;
       ``(iii) lobbying, whether directly or through other 
     parties;
       ``(iv) counseling services;
       ``(v) travel expenses; and
       ``(vi) preparing or providing advice on tax returns;
       ``(B) by regulation, provide that, except as provided in 
     subparagraph (C), affordable housing fund grant amounts of a 
     grantee may not be used for administrative, outreach, or 
     other costs of--
       ``(i) the grantee; or
       ``(ii) any recipient of such grant amounts; and
       ``(C) by regulation, limit the amount of any affordable 
     housing fund grant amounts of the grantee for a year that may 
     be used for administrative costs of the grantee of carrying 
     out the program required under this section to a percentage 
     of such grant amounts of the grantee for such year, which may 
     not exceed 10 percent.
       ``(7) Prohibition of consideration of use for meeting 
     housing goals or duty to serve.--In determining compliance 
     with the housing goals under this subpart and the duty to 
     serve underserved markets under section 1335, the Director 
     may not consider any affordable housing fund grant amounts 
     used under this section for eligible activities under 
     subsection (g). The Director shall give credit toward the 
     achievement of such housing goals and such duty to serve 
     underserved markets to purchases by the enterprises of 
     mortgages for housing that receives funding from affordable 
     housing fund grant amounts, but only to the extent that such 
     purchases by the enterprises are funded other than with such 
     grant amounts.
       ``(8) Acceptable identification requirement for occupancy 
     or assistance.--
       ``(A) In general.--Any assistance provided with any 
     affordable housing grant amounts may not be made available 
     to, or on behalf of, any individual or household unless the 
     individual provides, or, in the case of a household, all 
     adult members of the household provide, personal 
     identification in one of the following forms:
       ``(i) Social security card with photo identification card 
     or real id act identification.--

       ``(I) A social security card accompanied by a photo 
     identification card issued by the Federal Government or a 
     State Government; or
       ``(II) A driver's license or identification card issued by 
     a State in the case of a State that is in compliance with 
     title II of the REAL ID Act of 2005 (title II of division B 
     of Public Law 109-13; 49 U.S.C. 30301 note).

       ``(ii) Passport.--A passport issued by the United States or 
     a foreign government.
       ``(iii) USCIS photo identification card.--A photo 
     identification card issued by the Secretary of Homeland 
     Security (acting through the Director of the United States 
     Citizenship and Immigration Services).
       ``(B) Regulations.--The Director shall, by regulation, 
     require that each grantee and recipient take such actions as 
     the Director considers necessary to ensure compliance with 
     the requirements of subparagraph (A).
       ``(j) Accountability of Recipients and Grantees.--
       ``(1) Recipients.--
       ``(A) Tracking of funds.--The Director shall--
       ``(i) require each grantee to develop and maintain a system 
     to ensure that each recipient of assistance from affordable 
     housing fund grant amounts of the grantee uses such amounts 
     in accordance with this section, the regulations issued under 
     this section, and any requirements or conditions under which 
     such amounts were provided; and
       ``(ii) establish minimum requirements for agreements, 
     between the grantee and recipients, regarding assistance from 
     the affordable housing fund grant amounts of the grantee, 
     which shall include--

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

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

       ``(I) made by the Director; or
       ``(II)(aa) made by the grantee;
       ``(bb) the grantee provides notification of the 
     determination to the Director for review, in the discretion 
     of the Director, of the determination; and
       ``(cc) the Director does not subsequently reverse the 
     determination.

       ``(2) Grantees.--
       ``(A) Report.--

[[Page 8204]]

       ``(i) In general.--The Director shall require each grantee 
     receiving affordable housing fund grant amounts for a year to 
     submit a report, for such year, to the Director that--

       ``(I) describes the activities funded under this section 
     during such year with the affordable housing fund grant 
     amounts of the grantee; and
       ``(II) the manner in which the grantee complied during such 
     year with the allocation plan established pursuant to 
     subsection (e) for the grantee.

       ``(ii) Public availability.--The Director shall make such 
     reports pursuant to this subparagraph publicly available.
       ``(B) Misuse of funds.--If the Director determines, after 
     reasonable notice and opportunity for hearing, that a grantee 
     has failed to comply substantially with any provision of this 
     section and until the Director is satisfied that there is no 
     longer any such failure to comply, the Director shall--
       ``(i) reduce the amount of assistance under this section to 
     the grantee by an amount equal to the amount affordable 
     housing fund grant amounts which were not used in accordance 
     with this section;
       ``(ii) require the grantee to repay the Director an amount 
     equal to the amount of the amount affordable housing fund 
     grant amounts which were not used in accordance with this 
     section;
       ``(iii) limit the availability of assistance under this 
     section to the grantee to activities or recipients not 
     affected by such failure to comply; or
       ``(iv) terminate any assistance under this section to the 
     grantee.
       ``(k) Capital Requirements.--The utilization or commitment 
     of amounts from the affordable housing fund shall not be 
     subject to the risk-based capital requirements established 
     pursuant to section 1361(a).
       ``(l) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Affordable housing fund grant amounts.--The term 
     `affordable housing fund grant amounts' means amounts from 
     the affordable housing fund established under subsection (a) 
     that are provided to a grantee pursuant to subsection (d)(3).
       ``(2) Grantee.--The term `grantee' means--
       ``(A) with respect to 2008, the Louisiana Housing Finance 
     Agency and the Mississippi Development Authority; and
       ``(B) with respect to the years referred to in subsection 
     (b)(1), other than 2008, each State (as such term is defined 
     in section 1303) and each federally recognized Indian tribe.
       ``(3) Recipient.--The term `recipient' means an entity 
     meeting the requirements under subsection (h) that receives 
     assistance from a grantee from affordable housing fund grant 
     amounts of the grantee.
       ``(4) Total mortgage portfolio.--The term `total mortgage 
     portfolio' means, with respect to a year, the sum, for all 
     mortgages outstanding during that year in any form, including 
     whole loans, mortgage-backed securities, participation 
     certificates, or other structured securities backed by 
     mortgages, of the dollar amount of the unpaid outstanding 
     principal balances under such mortgages. Such term includes 
     all such mortgages or securitized obligations, whether 
     retained in portfolio, or sold in any form. The Director is 
     authorized to promulgate rules further defining such term as 
     necessary to implement this section and to address market 
     developments.
       ``(5) Very-low income family.--The term `very low-income 
     family' has the meaning given such term in section 1303, 
     except that such term includes any family that resides in a 
     rural area that has an income that does not exceed the 
     poverty line (as such term is defined in section 673(2) of 
     the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 
     9902(2)), including any revision required by such section) 
     applicable to a family of the size involved.
       ``(m) Regulations.--
       ``(1) In general.--The Director, in consultation with the 
     Secretary of Housing and Urban Development, shall issue 
     regulations to carry out this section.
       ``(2) Required contents.--The regulations issued under this 
     subsection shall include--
       ``(A) a requirement that the Director ensure that the 
     program of each grantee for use of affordable housing fund 
     grant amounts of the grantee is audited not less than 
     annually to ensure compliance with this section;
       ``(B) authority for the Director to audit, provide for an 
     audit, or otherwise verify a grantee's activities, to ensure 
     compliance with this section;
       ``(C) requirements for a process for application to, and 
     selection by, each grantee for activities meeting the 
     grantee's priority housing needs to be funded with affordable 
     housing fund grant amounts of the grantee, which shall 
     provide for priority in funding to be based upon--
       ``(i) greatest impact;
       ``(ii) geographic diversity;
       ``(iii) ability to obligate amounts and undertake 
     activities so funded in a timely manner;
       ``(iv) in the case of rental housing projects under 
     subsection (g)(1), the extent to which rents for units in the 
     project funded are affordable, especially for extremely low-
     income families;
       ``(v) in the case of rental housing projects under 
     subsection (g)(1), the extent of the duration for which such 
     rents will remain affordable;
       ``(vi) the extent to which the application makes use of 
     other funding sources; and
       ``(vii) the merits of an applicant's proposed eligible 
     activity;
       ``(D) requirements to ensure that amounts provided to a 
     grantee from the affordable housing fund that are used for 
     rental housing under subsection (g)(1) are used only for the 
     benefit of extremely low- and very-low income families;
       ``(E) limitations on public infrastructure development 
     activities that are eligible pursuant to subsection (g)(3) 
     for funding with affordable housing fund grant amounts and 
     requirements for the connection between such activities and 
     housing activities funded under paragraph (1) or (2) of 
     subsection (g); and
       ``(F) requirements and standards for establishment, by 
     grantees (including the grantees for 2008 pursuant to 
     subsection (l)(2)(A)), of performance goals, benchmarks, and 
     timetables for the production, preservation, and 
     rehabilitation of affordable rental and homeownership housing 
     with affordable housing fund grant amounts.
       ``(n) Enforcement of Requirements on Enterprise.--
     Compliance by the enterprises with the requirements under 
     this section shall be enforceable under subpart C. Any 
     reference in such subpart to this part or to an order, rule, 
     or regulation under this part specifically includes this 
     section and any order, rule, or regulation under this 
     section.
       ``(o) Affordable Housing Trust Fund.--If, after the 
     enactment of the Federal Housing Finance Reform Act of 2008, 
     in any year, there is enacted any provision of Federal law 
     establishing an affordable housing trust fund other than 
     under this title for use only for grants to provide 
     affordable rental housing and affordable homeownership 
     opportunities, and the subsequent year is a year referred to 
     in subsection (b)(1), the Director shall in such subsequent 
     year and any remaining years referred to in subsection (b)(1) 
     transfer to such affordable housing trust fund the aggregate 
     amount allocated pursuant to subsection (b) in such year to 
     the affordable housing fund under this section, less any 
     amounts used pursuant to subsection (i)(1). For such 
     subsequent and remaining years, the provisions of subsections 
     (c) and (d) shall not apply. Notwithstanding any other 
     provision of law, assistance provided using amounts 
     transferred to such affordable housing trust fund pursuant to 
     this subsection may not be used for any of the activities 
     specified in clauses (i) through (vi) of subsection (i)(6). 
     Nothing in this subsection shall be construed to alter the 
     terms and conditions of the affordable housing fund under 
     this section or to extend the life of such fund.
       ``(p) Funding Accountability and Transparency.--Any grant 
     under this section to a grantee from the affordable housing 
     fund established under subsection (a), any assistance 
     provided to a recipient by a grantee from affordable housing 
     fund grant amounts, and any grant, award, or other assistance 
     from an affordable housing trust fund referred to in 
     subsection (o) shall be considered a Federal award for 
     purposes of the Federal Funding Accountability and 
     Transparency Act of 2006 (31 U.S.C. 6101 note). Upon the 
     request of the Director of the Office of Management and 
     Budget, the Director of the Federal Housing Finance Agency 
     shall obtain and provide such information regarding any such 
     grants, assistance, and awards as the Director of the Office 
     of Management and Budget considers necessary to comply with 
     the requirements of such Act, as applicable pursuant to the 
     preceding sentence.''.
       (b) Timely Establishment of Affordable Housing Needs 
     Formula.--
       (1) In general.--The Secretary of Housing and Urban 
     Development shall, not later than the effective date under 
     section 365 of this title, issue the regulations establishing 
     the affordable housing needs formulas in accordance with the 
     provisions of section 1337(c)(2) of the Housing and Community 
     Development Act of 1992, as such section is amended by 
     subsection (a) of this section.
       (2) Effective date.--This subsection shall take effect on 
     the date of the enactment of this Act.
       (c) REFCORP Payments.--Section 21B(f)(2) of the Federal 
     Home Loan Bank Act (12 U.S.C. 1441b(f)(2)) is amended--
       (1) in subparagraph (E), by striking ``and (D)'' and 
     inserting ``(D), and (E)'';
       (2) by redesignating subparagraph (E) as subparagraph (F); 
     and
       (3) by inserting after subparagraph (D) the following new 
     subparagraph:
       ``(E) Payments by fannie mae and freddie mac.--To the 
     extent that the amounts available pursuant to subparagraphs 
     (A), (B), (C), and (D) are insufficient to cover the amount 
     of interest payments, each enterprise (as such term is 
     defined in section 1303 of the Housing and Community 
     Development Act of 1992 (42 U.S.C. 4502)) shall transfer to 
     the Funding Corporation in each calendar year the amounts 
     allocated for use under this subparagraph pursuant to section 
     1337(i)(1) of such Act.''.
       (d) GAO Report.--The Comptroller General shall conduct a 
     study to determine the effects that the affordable housing 
     fund established under section 1337 of the Housing

[[Page 8205]]

     and Community Development Act of 1992, as added by the 
     amendment made by subsection (a) of this section, will have 
     on the availability and affordability of credit for 
     homebuyers, including the effects on such credit of the 
     requirement under such section 1337(b) that the Federal 
     National Mortgage Association and Federal Home Loan Mortgage 
     Corporation make allocations of amounts to such fund based on 
     the average total mortgage portfolios, and the extent to 
     which the costs of such allocation requirement will be borne 
     by such entities or will be passed on to homebuyers. Not 
     later than the expiration of the 12-month period beginning on 
     the date of the enactment of this Act, the Comptroller 
     General shall submit a report to the Congress setting forth 
     the results and conclusions of such study. This subsection 
     shall take effect on the date of the enactment of this Act.

     SEC. 341. CONSISTENCY WITH MISSION.

       Subpart B of part 2 of subtitle A of title XIII of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 4561 
     et seq.) is amended by adding after section 1337, as added by 
     the preceding provisions of this title, the following new 
     section:

     ``SEC. 1338. CONSISTENCY WITH MISSION.

       ``This subpart may not be construed to authorize an 
     enterprise to engage in any program or activity that 
     contravenes or is inconsistent with the Federal National 
     Mortgage Association Charter Act or the Federal Home Loan 
     Mortgage Corporation Act.''.

     SEC. 342. ENFORCEMENT.

       (a) Cease-and-Desist Proceedings.--Section 1341 of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 
     4581) is amended--
       (1) by striking subsection (a) and inserting the following 
     new subsection:
       ``(a) Grounds for Issuance.--The Director may issue and 
     serve a notice of charges under this section upon an 
     enterprise if the Director determines--
       ``(1) the enterprise has failed to meet any housing goal 
     established under subpart B, following a written notice and 
     determination of such failure in accordance with section 
     1336;
       ``(2) the enterprise has failed to submit a report under 
     section 1314, following a notice of such failure, an 
     opportunity for comment by the enterprise, and a final 
     determination by the Director;
       ``(3) the enterprise has failed to submit the information 
     required under subsection (m) or (n) of section 309 of the 
     Federal National Mortgage Association Charter Act, or 
     subsection (e) or (f) of section 307 of the Federal Home Loan 
     Mortgage Corporation Act;
       ``(4) the enterprise has violated any provision of this 
     part or any order, rule or regulation under this part;
       ``(5) the enterprise has failed to submit a housing plan 
     that complies with section 1336(c) within the applicable 
     period; or
       ``(6) the enterprise has failed to comply with a housing 
     plan under section 1336(c).'';
       (2) in subsection (b)(2), by striking ``requiring the 
     enterprise to'' and all that follows through the end of the 
     paragraph and inserting the following: ``requiring the 
     enterprise to--
       ``(A) comply with the goal or goals;
       ``(B) submit a report under section 1314;
       ``(C) comply with any provision this part or any order, 
     rule or regulation under such part;
       ``(D) submit a housing plan in compliance with section 
     1336(c);
       ``(E) comply with a housing plan submitted under section 
     1336(c); or
       ``(F) provide the information required under subsection (m) 
     or (n) of section 309 of the Federal National Mortgage 
     Association Charter Act or subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act, as 
     applicable.'';
       (3) in subsection (c), by inserting ``date of the'' before 
     ``service of the order''; and
       (4) by striking subsection (d).
       (b) Authority of Director To Enforce Notices and Orders.--
     Section 1344 of the Housing and Community Development Act of 
     1992 (12 U.S.C. 4584) is amended by striking subsection (a) 
     and inserting the following new subsection:
       ``(a) Enforcement.--The Director may, in the discretion of 
     the Director, apply to the United States District Court for 
     the District of Columbia, or the United States district court 
     within the jurisdiction of which the headquarters of the 
     enterprise is located, for the enforcement of any effective 
     and outstanding notice or order issued under section 1341 or 
     1345, or request that the Attorney General of the United 
     States bring such an action. Such court shall have 
     jurisdiction and power to order and require compliance with 
     such notice or order.''.
       (c) Civil Money Penalties.--Section 1345 of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4585) is 
     amended--
       (1) by striking subsections (a) and (b) and inserting the 
     following new subsections:
       ``(a) Authority.--The Director may impose a civil money 
     penalty, in accordance with the provisions of this section, 
     on any enterprise that has failed to--
       ``(1) meet any housing goal established under subpart B, 
     following a written notice and determination of such failure 
     in accordance with section 1336(b);
       ``(2) submit a report under section 1314, following a 
     notice of such failure, an opportunity for comment by the 
     enterprise, and a final determination by the Director;
       ``(3) submit the information required under subsection (m) 
     or (n) of section 309 of the Federal National Mortgage 
     Association Charter Act, or subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act;
       ``(4) comply with any provision of this part or any order, 
     rule or regulation under this part;
       ``(5) submit a housing plan pursuant to section 1336(c) 
     within the required period; or
       ``(6) comply with a housing plan for the enterprise under 
     section 1336(c).
       ``(b) Amount of Penalty.--The amount of the penalty, as 
     determined by the Director, may not exceed--
       ``(1) for any failure described in paragraph (1), (5), or 
     (6) of subsection (a), $50,000 for each day that the failure 
     occurs; and
       ``(2) for any failure described in paragraph (2), (3), or 
     (4) of subsection (a), $20,000 for each day that the failure 
     occurs.'';
       (2) in subsection (c)--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by inserting ``and'' after the 
     semicolon at the end;
       (ii) in subparagraph (B), by striking ``; and'' and 
     inserting a period; and
       (iii) by striking subparagraph (C); and
       (B) in paragraph (2), by inserting after the period at the 
     end the following: ``In determining the penalty under 
     subsection (a)(1), the Director shall give consideration to 
     the length of time the enterprise should reasonably take to 
     achieve the goal.'';
       (3) in the first sentence of subsection (d)--
       (A) by striking ``request the Attorney General of the 
     United States to'' and inserting ``, in the discretion of the 
     Director,''; and
       (B) by inserting ``, or request that the Attorney General 
     of the United States bring such an action'' before the period 
     at the end;
       (4) by striking subsection (f); and
       (5) by redesignating subsection (g) as subsection (f).
       (d) Enforcement of Subpoenas.--Section 1348(c) of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 
     4588(c)) is amended--
       (1) by striking ``request the Attorney General of the 
     United States to'' and inserting ``, in the discretion of the 
     Director,''; and
       (2) by inserting ``or request that the Attorney General of 
     the United States bring such an action,'' after ``District of 
     Columbia,''.
       (e) Conforming Amendment.--The heading for subpart C of 
     part 2 of subtitle A of title XIII of the Housing and 
     Community Development Act of 1992 is amended to read as 
     follows:

                      ``Subpart C--Enforcement''.

     SEC. 343. CONFORMING AMENDMENTS.

       Part 2 of subtitle A of title XIII of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4541 et seq.) is 
     amended--
       (1) by striking ``Secretary'' each place such term appears 
     in such part and inserting ``Director'';
       (2) in the section heading for section 1323 (12 U.S.C. 
     4543), by inserting ``of enterprises'' before the period at 
     the end;
       (3) by striking section 1327 (12 U.S.C. 4547);
       (4) by striking section 1328 (12 U.S.C. 4548);
       (5) by redesignating section 1329 (as amended by section 
     335) as section 1327;
       (6) in sections 1345(c)(1)(A), 1346(a), and 1346(b) (12 
     U.S.C. 4585(c)(1)(A), 4586(a), and 4586(b)), by striking 
     ``Secretary's'' each place such term appears and inserting 
     ``Director's''; and
       (7) by striking section 1349 (12 U.S.C. 4589).

                  CHAPTER 3--PROMPT CORRECTIVE ACTION

     SEC. 345. CAPITAL CLASSIFICATIONS.

       (a) In General.--Section 1364 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4614) is amended--
       (1) in the heading for subsection (a), by striking ``In 
     General'' and inserting ``Enterprises''.
       (2) in subsection (c)--
       (A) by striking ``subsection (b)'' and inserting 
     ``subsection (c)'';
       (B) by striking ``enterprises'' and inserting ``regulated 
     entities''; and
       (C) by striking the last sentence;
       (3) by redesignating subsections (c) (as so amended by 
     paragraph (2) of this subsection) and (d) as subsections (d) 
     and (f), respectively;
       (4) by striking subsection (b) and inserting the following 
     new subsections:
       ``(b) Federal Home Loan Banks.--
       ``(1) Establishment and criteria.--For purposes of this 
     subtitle, the Director shall, by regulation--
       ``(A) establish the capital classifications specified under 
     paragraph (2) for the Federal home loan banks;
       ``(B) establish criteria for each such capital 
     classification based on the amount and types of capital held 
     by a bank and the risk-based, minimum, and critical capital 
     levels for the banks and taking due consideration of the 
     capital classifications established under subsection (a) for 
     the enterprises, with such modifications as the Director 
     determines to be appropriate to reflect the difference in 
     operations between the banks and the enterprises; and
       ``(C) shall classify the Federal home loan banks according 
     to such capital classifications.

[[Page 8206]]

       ``(2) Classifications.--The capital classifications 
     specified under this paragraph are--
       ``(A) adequately capitalized;
       ``(B) undercapitalized;
       ``(C) significantly undercapitalized; and
       ``(D) critically undercapitalized.
       ``(c) Discretionary Classification.--
       ``(1) Grounds for reclassification.--The Director may 
     reclassify a regulated entity under paragraph (2) if--
       ``(A) at any time, the Director determines in writing that 
     the regulated entity is engaging in conduct that could result 
     in a rapid depletion of core or total capital or, in the case 
     of an enterprise, that the value of the property subject to 
     mortgages held or securitized by the enterprise has decreased 
     significantly;
       ``(B) after notice and an opportunity for hearing, the 
     Director determines that the regulated entity is in an unsafe 
     or unsound condition; or
       ``(C) pursuant to section 1371(b), the Director deems the 
     regulated entity to be engaging in an unsafe or unsound 
     practice.
       ``(2) Reclassification.--In addition to any other action 
     authorized under this title, including the reclassification 
     of a regulated entity for any reason not specified in this 
     subsection, if the Director takes any action described in 
     paragraph (1) the Director may classify a regulated entity--
       ``(A) as undercapitalized, if the regulated entity is 
     otherwise classified as adequately capitalized;
       ``(B) as significantly undercapitalized, if the regulated 
     entity is otherwise classified as undercapitalized; and
       ``(C) as critically undercapitalized, if the regulated 
     entity is otherwise classified as significantly 
     undercapitalized.''; and
       (5) by inserting after subsection (d) (as so redesignated 
     by paragraph (3) of this subsection), the following new 
     subsection:
       ``(e) Restriction on Capital Distributions.--
       ``(1) In general.--A regulated entity shall make no capital 
     distribution if, after making the distribution, the regulated 
     entity would be undercapitalized.
       ``(2) Exception.--Notwithstanding paragraph (1), the 
     Director may permit a regulated entity, to the extent 
     appropriate or applicable, to repurchase, redeem, retire, or 
     otherwise acquire shares or ownership interests if the 
     repurchase, redemption, retirement, or other acquisition--
       ``(A) is made in connection with the issuance of additional 
     shares or obligations of the regulated entity in at least an 
     equivalent amount; and
       ``(B) will reduce the financial obligations of the 
     regulated entity or otherwise improve the financial condition 
     of the entity.''.
       (b) Regulations.--Not later than the expiration of the 180-
     day period beginning on the effective date under section 365, 
     the Director of the Federal Housing Finance Agency shall 
     issue regulations to carry out section 1364(b) of the Housing 
     and Community Development Act of 1992 (as added by paragraph 
     (4) of this subsection), relating to capital classifications 
     for the Federal home loan banks.

     SEC. 346. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED 
                   REGULATED ENTITIES.

       Section 1365 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4615) is amended--
       (1) in the section heading, by striking ``enterprises'' and 
     inserting ``regulated entities'';
       (2) in subsection (a)--
       (A) by redesignating paragraphs (1) and (2) as paragraphs 
     (2) and (3), respectively;
       (B) by inserting before paragraph (2), as so redesignated 
     by subparagraph (A) of this paragraph, the following 
     paragraph:
       ``(1) Required monitoring.--The Director shall--
       ``(A) closely monitor the condition of any regulated entity 
     that is classified as undercapitalized;
       ``(B) closely monitor compliance with the capital 
     restoration plan, restrictions, and requirements imposed 
     under this section; and
       ``(C) periodically review the plan, restrictions, and 
     requirements applicable to the undercapitalized regulated 
     entity to determine whether the plan, restrictions, and 
     requirements are achieving the purpose of this section.''; 
     and
       (C) by inserting at the end the following new paragraphs:
       ``(4) Restriction of asset growth.--A regulated entity that 
     is classified as undercapitalized shall not permit its 
     average total assets (as such term is defined in section 
     1316(b) during any calendar quarter to exceed its average 
     total assets during the preceding calendar quarter unless--
       ``(A) the Director has accepted the capital restoration 
     plan of the regulated entity;
       ``(B) any increase in total assets is consistent with the 
     plan; and
       ``(C) the ratio of total capital to assets for the 
     regulated entity increases during the calendar quarter at a 
     rate sufficient to enable the entity to become adequately 
     capitalized within a reasonable time.
       ``(5) Prior approval of acquisitions, new products, and new 
     activities.--A regulated entity that is classified as 
     undercapitalized shall not, directly or indirectly, acquire 
     any interest in any entity or initially offer any new product 
     (as such term is defined in section 1321(f)) or engage in any 
     new activity, service, undertaking, or offering unless--
       ``(A) the Director has accepted the capital restoration 
     plan of the regulated entity, the entity is implementing the 
     plan, and the Director determines that the proposed action is 
     consistent with and will further the achievement of the plan; 
     or
       ``(B) the Director determines that the proposed action will 
     further the purpose of this section.'';
       (3) in the subsection heading for subsection (b), by 
     striking ``From Undercapitalized to Significantly 
     Undercapitalized''; and
       (4) by striking subsection (c) and inserting the following 
     new subsection:
       ``(c) Other Discretionary Safeguards.--The Director may 
     take, with respect to a regulated entity that is classified 
     as undercapitalized, any of the actions authorized to be 
     taken under section 1366 with respect to a regulated entity 
     that is classified as significantly undercapitalized, if the 
     Director determines that such actions are necessary to carry 
     out the purpose of this subtitle.''.

     SEC. 347. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
                   UNDERCAPITALIZED REGULATED ENTITIES.

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

     SEC. 348. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED 
                   REGULATED ENTITIES.

       (a) In General.--Section 1367 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4617) is amended to read 
     as follows:

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

       ``(a) Appointment of Agency as Conservator or Receiver.--
       ``(1) In general.--Notwithstanding any other provision of 
     Federal or State law, if any of the grounds under paragraph 
     (3) exist, at the discretion of the Director, the Director 
     may establish a conservatorship or receivership, as 
     appropriate, for the purpose of reorganizing, rehabilitating, 
     or winding up the affairs of a regulated entity.
       ``(2) Appointment.--In any conservatorship or receivership 
     established under this section, the Director shall appoint 
     the Agency as conservator or receiver.
       ``(3) Grounds for appointment.--The grounds for appointing 
     a conservator or receiver for a regulated entity are as 
     follows:
       ``(A) Assets insufficient for obligations.--The assets of 
     the regulated entity are less than the obligations of the 
     regulated entity to its creditors and others.
       ``(B) Substantial dissipation.--Substantial dissipation of 
     assets or earnings due to--
       ``(i) any violation of any provision of Federal or State 
     law; or
       ``(ii) any unsafe or unsound practice.
       ``(C) Unsafe or unsound condition.--An unsafe or unsound 
     condition to transact business.

[[Page 8207]]

       ``(D) Cease-and-desist orders.--Any willful violation of a 
     cease-and-desist order that has become final.
       ``(E) Concealment.--Any concealment of the books, papers, 
     records, or assets of the regulated entity, or any refusal to 
     submit the books, papers, records, or affairs of the 
     regulated entity, for inspection to any examiner or to any 
     lawful agent of the Director.
       ``(F) Inability to meet obligations.--The regulated entity 
     is likely to be unable to pay its obligations or meet the 
     demands of its creditors in the normal course of business.
       ``(G) Losses.--The regulated entity has incurred or is 
     likely to incur losses that will deplete all or substantially 
     all of its capital, and there is no reasonable prospect for 
     the regulated entity to become adequately capitalized (as 
     defined in section 1364(a)(1)).
       ``(H) Violations of law.--Any violation of any law or 
     regulation, or any unsafe or unsound practice or condition 
     that is likely to--
       ``(i) cause insolvency or substantial dissipation of assets 
     or earnings; or
       ``(ii) weaken the condition of the regulated entity.
       ``(I) Consent.--The regulated entity, by resolution of its 
     board of directors or its shareholders or members, consents 
     to the appointment.
       ``(J) Undercapitalization.--The regulated entity is 
     undercapitalized or significantly undercapitalized (as 
     defined in section 1364(a)(3) or in regulations issued 
     pursuant to section 1364(b), as applicable), and--
       ``(i) has no reasonable prospect of becoming adequately 
     capitalized;
       ``(ii) fails to become adequately capitalized, as required 
     by--

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

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

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

       ``(ii) Authority of director.--A subpoena or subpoena duces 
     tecum may be issued under clause (i) only by, or with the 
     written approval of, the Director, or the designee of the 
     Director.
       ``(iii) Rule of construction.--This subsection shall not be 
     construed to limit any rights that the Agency, in any 
     capacity, might otherwise have under section 1317 or 1379D.
       ``(J) Contracting for services.--The Agency may, as 
     conservator or receiver, provide by contract for the carrying 
     out of any of its functions, activities, actions, or duties 
     as conservator or receiver.
       ``(K) Incidental powers.--The Agency may, as conservator or 
     receiver--
       ``(i) exercise all powers and authorities specifically 
     granted to conservators or receivers, respectively, under 
     this section, and

[[Page 8208]]

     such incidental powers as shall be necessary to carry out 
     such powers; and
       ``(ii) take any action authorized by this section, which 
     the Agency determines is in the best interests of the 
     regulated entity or the Agency.
       ``(3) Authority of receiver to determine claims.--
       ``(A) In general.--The Agency may, as receiver, determine 
     claims in accordance with the requirements of this subsection 
     and any regulations prescribed under paragraph (4).
       ``(B) Notice requirements.--The receiver, in any case 
     involving the liquidation or winding up of the affairs of a 
     closed regulated entity, shall--
       ``(i) promptly publish a notice to the creditors of the 
     regulated entity to present their claims, together with 
     proof, to the receiver by a date specified in the notice 
     which shall be not less than 90 days after the publication of 
     such notice; and
       ``(ii) republish such notice approximately 1 month and 2 
     months, respectively, after the publication under clause (i).
       ``(C) Mailing required.--The receiver shall mail a notice 
     similar to the notice published under subparagraph (B)(i) at 
     the time of such publication to any creditor shown on the 
     books of the regulated entity--
       ``(i) at the last address of the creditor appearing in such 
     books; or
       ``(ii) upon discovery of the name and address of a claimant 
     not appearing on the books of the regulated entity within 30 
     days after the discovery of such name and address.
       ``(4) Rulemaking authority relating to determination of 
     claims.--Subject to subsection (c), the Director may 
     prescribe regulations regarding the allowance or disallowance 
     of claims by the receiver and providing for administrative 
     determination of claims and review of such determination.
       ``(5) Procedures for determination of claims.--
       ``(A) Determination period.--
       ``(i) In general.--Before the end of the 180-day period 
     beginning on the date on which any claim against a regulated 
     entity is filed with the Agency as receiver, the Agency shall 
     determine whether to allow or disallow the claim and shall 
     notify the claimant of any determination with respect to such 
     claim.
       ``(ii) Extension of time.--The period described in clause 
     (i) may be extended by a written agreement between the 
     claimant and the Agency.
       ``(iii) Mailing of notice sufficient.--The notification 
     requirements of clause (i) shall be deemed to be satisfied if 
     the notice of any determination with respect to any claim is 
     mailed to the last address of the claimant which appears--

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

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

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

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

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

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

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

       ``(ii) notify the claimant of the determination, and if the 
     claim is disallowed, provide a statement of each reason for 
     the disallowance and the procedure for obtaining agency 
     review or judicial determination.
       ``(C) Period for filing or renewing suit.--Any claimant who 
     files a request for expedited relief shall be permitted to 
     file a suit, or to continue a suit filed before the 
     appointment of the receiver, seeking a determination of the 
     rights of the claimant with respect to such security interest 
     after the earlier of--
       ``(i) the end of the 90-day period beginning on the date of 
     the filing of a request for expedited relief; or
       ``(ii) the date the Agency denies the claim.
       ``(D) Statute of limitations.--If an action described under 
     subparagraph (C) is not filed, or the motion to renew a 
     previously filed suit is not made, before the end of the 30-
     day period beginning on the date on which such action or 
     motion may be filed under subparagraph (B), the claim shall 
     be deemed to be disallowed as of the end of such period 
     (other than any portion of such claim which was allowed by 
     the receiver), such disallowance shall be final, and the 
     claimant shall have no further rights or remedies with 
     respect to such claim.
       ``(E) Legal effect of filing.--
       ``(i) Statute of limitation tolled.--For purposes of any 
     applicable statute of limitations, the filing of a claim with 
     the receiver shall constitute a commencement of an action.

[[Page 8209]]

       ``(ii) No prejudice to other actions.--Subject to paragraph 
     (10), the filing of a claim with the receiver shall not 
     prejudice any right of the claimant to continue any action 
     that was filed before the appointment of the receiver, 
     subject to the determination of claims by the receiver.
       ``(9) Payment of claims.--
       ``(A) In general.--The receiver may, in the discretion of 
     the receiver, and to the extent funds are available from the 
     assets of the regulated entity, pay creditor claims, in such 
     manner and amounts as are authorized under this section, 
     which are--
       ``(i) allowed by the receiver;
       ``(ii) approved by the Agency pursuant to a final 
     determination pursuant to paragraph (7) or (8); or
       ``(iii) determined by the final judgment of any court of 
     competent jurisdiction.
       ``(B) Agreements against the interest of the agency.--No 
     agreement that tends to diminish or defeat the interest of 
     the Agency in any asset acquired by the Agency as receiver 
     under this section shall be valid against the Agency unless 
     such agreement is in writing, and executed by an authorized 
     official of the regulated entity, except that such 
     requirements for qualified financial contracts shall be 
     applied in a manner consistent with reasonable business 
     trading practices in the financial contracts market.
       ``(C) Payment of dividends on claims.--The receiver may, in 
     the sole discretion of the receiver, pay from the assets of 
     the regulated entity dividends on proved claims at any time, 
     and no liability shall attach to the Agency, by reason of any 
     such payment, for failure to pay dividends to a claimant 
     whose claim is not proved at the time of any such payment.
       ``(D) Rulemaking authority of the director.--The Director 
     may prescribe such rules, including definitions of terms, as 
     the Director deems appropriate to establish a single uniform 
     interest rate for, or to make payments of post-insolvency 
     interest to creditors holding proven claims against the 
     receivership estates of regulated entities following 
     satisfaction by the receiver of the principal amount of all 
     creditor claims.
       ``(10) Suspension of legal actions.--
       ``(A) In general.--After the appointment of a conservator 
     or receiver for a regulated entity, the conservator or 
     receiver may, in any judicial action or proceeding to which 
     such regulated entity is or becomes a party, request a stay 
     for a period not to exceed--
       ``(i) 45 days, in the case of any conservator; and
       ``(ii) 90 days, in the case of any receiver.
       ``(B) Grant of stay by all courts required.--Upon receipt 
     of a request by any conservator or receiver under 
     subparagraph (A) for a stay of any judicial action or 
     proceeding in any court with jurisdiction of such action or 
     proceeding, the court shall grant such stay as to all 
     parties.
       ``(11) Additional rights and duties.--
       ``(A) Prior final adjudication.--The Agency shall abide by 
     any final unappealable judgment of any court of competent 
     jurisdiction which was rendered before the appointment of the 
     Agency as conservator or receiver.
       ``(B) Rights and remedies of conservator or receiver.--In 
     the event of any appealable judgment, the Agency as 
     conservator or receiver shall--
       ``(i) have all the rights and remedies available to the 
     regulated entity (before the appointment of such conservator 
     or receiver) and the Agency, including removal to Federal 
     court and all appellate rights; and
       ``(ii) not be required to post any bond in order to pursue 
     such remedies.
       ``(C) No attachment or execution.--No attachment or 
     execution may issue by any court upon assets in the 
     possession of the receiver.
       ``(D) Limitation on judicial review.--Except as otherwise 
     provided in this subsection, no court shall have jurisdiction 
     over--
       ``(i) any claim or action for payment from, or any action 
     seeking a determination of rights with respect to, the assets 
     of any regulated entity for which the Agency has been 
     appointed receiver; or
       ``(ii) any claim relating to any act or omission of such 
     regulated entity or the Agency as receiver.
       ``(E) Disposition of assets.--In exercising any right, 
     power, privilege, or authority as conservator or receiver in 
     connection with any sale or disposition of assets of a 
     regulated entity for which the Agency has been appointed 
     conservator or receiver, the Agency shall conduct its 
     operations in a manner which maintains stability in the 
     housing finance markets and, to the extent consistent with 
     that goal--
       ``(i) maximizes the net present value return from the sale 
     or disposition of such assets;
       ``(ii) minimizes the amount of any loss realized in the 
     resolution of cases; and
       ``(iii) ensures adequate competition and fair and 
     consistent treatment of offerors.
       ``(12) Statute of limitations for actions brought by 
     conservator or receiver.--
       ``(A) In general.--Notwithstanding any provision of any 
     contract, the applicable statute of limitations with regard 
     to any action brought by the Agency as conservator or 
     receiver shall be--
       ``(i) in the case of any contract claim, the longer of--

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

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

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

       ``(B) Determination of the date on which a claim accrues.--
     For purposes of subparagraph (A), the date on which the 
     statute of limitations begins to run on any claim described 
     in such subparagraph shall be the later of--
       ``(i) the date of the appointment of the Agency as 
     conservator or receiver; or
       ``(ii) the date on which the cause of action accrues.
       ``(13) Revival of expired state causes of action.--
       ``(A) In general.--In the case of any tort claim described 
     under subparagraph (B) for which the statute of limitations 
     applicable under State law with respect to such claim has 
     expired not more than 5 years before the appointment of the 
     Agency as conservator or receiver, the Agency may bring an 
     action as conservator or receiver on such claim without 
     regard to the expiration of the statute of limitation 
     applicable under State law.
       ``(B) Claims described.--A tort claim referred to under 
     subparagraph (A) is a claim arising from fraud, intentional 
     misconduct resulting in unjust enrichment, or intentional 
     misconduct resulting in substantial loss to the regulated 
     entity.
       ``(14) Accounting and recordkeeping requirements.--
       ``(A) In general.--The Agency as conservator or receiver 
     shall, consistent with the accounting and reporting practices 
     and procedures established by the Agency, maintain a full 
     accounting of each conservatorship and receivership or other 
     disposition of a regulated entity in default.
       ``(B) Annual accounting or report.--With respect to each 
     conservatorship or receivership, the Agency shall make an 
     annual accounting or report available to the Board, the 
     Comptroller General of the United States, the Committee on 
     Banking, Housing, and Urban Affairs of the Senate, and the 
     Committee on Financial Services of the House of 
     Representatives.
       ``(C) Availability of reports.--Any report prepared under 
     subparagraph (B) shall be made available by the Agency upon 
     request to any shareholder of a regulated entity or any 
     member of the public.
       ``(D) Recordkeeping requirement.--After the end of the 6-
     year period beginning on the date that the conservatorship or 
     receivership is terminated by the Director, the Agency may 
     destroy any records of such regulated entity which the 
     Agency, in the discretion of the Agency, determines to be 
     unnecessary unless directed not to do so by a court of 
     competent jurisdiction or governmental agency, or prohibited 
     by law.
       ``(15) Fraudulent transfers.--
       ``(A) In general.--The Agency, as conservator or receiver, 
     may avoid a transfer of any interest of a regulated entity-
     affiliated party, or any person who the conservator or 
     receiver determines is a debtor of the regulated entity, in 
     property, or any obligation incurred by such party or person, 
     that was made within 5 years of the date on which the Agency 
     was appointed conservator or receiver, if such party or 
     person voluntarily or involuntarily made such transfer or 
     incurred such liability with the intent to hinder, delay, or 
     defraud the regulated entity, the Agency, the conservator, or 
     receiver.
       ``(B) Right of recovery.--To the extent a transfer is 
     avoided under subparagraph (A), the conservator or receiver 
     may recover, for the benefit of the regulated entity, the 
     property transferred, or, if a court so orders, the value of 
     such property (at the time of such transfer) from--
       ``(i) the initial transferee of such transfer or the 
     regulated entity-affiliated party or person for whose benefit 
     such transfer was made; or
       ``(ii) any immediate or mediate transferee of any such 
     initial transferee.
       ``(C) Rights of transferee or obligee.--The conservator or 
     receiver may not recover under subparagraph (B) from--
       ``(i) any transferee that takes for value, including 
     satisfaction or securing of a present or antecedent debt, in 
     good faith; or
       ``(ii) any immediate or mediate good faith transferee of 
     such transferee.
       ``(D) Rights under this paragraph.--The rights under this 
     paragraph of the conservator or receiver described under 
     subparagraph (A) shall be superior to any rights of a trustee 
     or any other party (other than any party which is a Federal 
     agency) under title 11, United States Code.
       ``(16) Attachment of assets and other injunctive relief.--
     Subject to paragraph (17), any court of competent 
     jurisdiction may, at the request of the conservator or 
     receiver, issue an order in accordance with Rule 65 of the 
     Federal Rules of Civil Procedure, including an order placing 
     the assets of any person designated by the Agency or such 
     conservator under the control of the court, and appointing a 
     trustee to hold such assets.
       ``(17) Standards of proof.--Rule 65 of the Federal Rules of 
     Civil Procedure shall apply

[[Page 8210]]

     with respect to any proceeding under paragraph (16) without 
     regard to the requirement of such rule that the applicant 
     show that the injury, loss, or damage is irreparable and 
     immediate.
       ``(18) Treatment of claims arising from breach of contracts 
     executed by the receiver or conservator.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, any final and unappealable judgment for 
     monetary damages entered against a receiver or conservator 
     for the breach of an agreement executed or approved in 
     writing by such receiver or conservator after the date of its 
     appointment, shall be paid as an administrative expense of 
     the receiver or conservator.
       ``(B) No limitation of power.--Nothing in this paragraph 
     shall be construed to limit the power of a receiver or 
     conservator to exercise any rights under contract or law, 
     including to terminate, breach, cancel, or otherwise 
     discontinue such agreement.
       ``(19) General exceptions.--
       ``(A) Limitations.--The rights of a conservator or receiver 
     appointed under this section shall be subject to the 
     limitations on the powers of a receiver under sections 402 
     through 407 of the Federal Deposit Insurance Corporation 
     Improvement Act of 1991 (12 U.S.C. 4402 through 4407).
       ``(B) Mortgages held in trust.--
       ``(i) In general.--Any mortgage, pool of mortgages, or 
     interest in a pool of mortgages, held in trust, custodial, or 
     agency capacity by a regulated entity for the benefit of 
     persons other than the regulated entity shall not be 
     available to satisfy the claims of creditors generally.
       ``(ii) Holding of mortgages.--Any mortgage, pool of 
     mortgages, or interest in a pool of mortgages, described 
     under clause (i) shall be held by the conservator or receiver 
     appointed under this section for the beneficial owners of 
     such mortgage, pool of mortgages, or interest in a pool of 
     mortgages in accordance with the terms of the agreement 
     creating such trust, custodial, or other agency arrangement.
       ``(iii) Liability of receiver.--The liability of a receiver 
     appointed under this section for damages shall, in the case 
     of any contingent or unliquidated claim relating to the 
     mortgages held in trust, be estimated in accordance set forth 
     in the regulations of the Director.
       ``(c) Priority of Expenses and Unsecured Claims.--
       ``(1) In general.--Unsecured claims against a regulated 
     entity, or a receiver, that are proven to the satisfaction of 
     the receiver shall have priority in the following order:
       ``(A) Administrative expenses of the receiver.
       ``(B) Any other general or senior liability of the 
     regulated entity and claims of other Federal home loan banks 
     arising from their payment obligations (including joint and 
     several payment obligations).
       ``(C) Any obligation subordinated to general creditors.
       ``(D) Any obligation to shareholders or members arising as 
     a result of their status as shareholder or members.
       ``(2) Creditors similarly situated.--All creditors that are 
     similarly situated under paragraph (1) shall be treated in a 
     similar manner, except that the Agency may make such other 
     payments to creditors necessary to maximize the present value 
     return from the sale or disposition or such regulated 
     entity's assets or to minimize the amount of any loss 
     realized in the resolution of cases so long as all creditors 
     similarly situated receive not less than the amount provided 
     under subsection (e)(2).
       ``(3) Definition.--The term `administrative expenses of the 
     receiver' shall include the actual, necessary costs and 
     expenses incurred by the receiver in preserving the assets of 
     the regulated entity or liquidating or otherwise resolving 
     the affairs of the regulated entity. Such expenses shall 
     include obligations that are incurred by the receiver after 
     appointment as receiver that the Director determines are 
     necessary and appropriate to facilitate the smooth and 
     orderly liquidation or other resolution of the regulated 
     entity.
       ``(d) Provisions Relating to Contracts Entered Into Before 
     Appointment of Conservator or Receiver.--
       ``(1) Authority to repudiate contracts.--In addition to any 
     other rights a conservator or receiver may have, the 
     conservator or receiver for any regulated entity may 
     disaffirm or repudiate any contract or lease--
       ``(A) to which such regulated entity is a party;
       ``(B) the performance of which the conservator or receiver, 
     in its sole discretion, determines to be burdensome; and
       ``(C) the disaffirmance or repudiation of which the 
     conservator or receiver determines, in its sole discretion, 
     will promote the orderly administration of the affairs of the 
     regulated entity.
       ``(2) Timing of repudiation.--The conservator or receiver 
     shall determine whether or not to exercise the rights of 
     repudiation under this subsection within a reasonable period 
     following such appointment.
       ``(3) Claims for damages for repudiation.--
       ``(A) In general.--Except as otherwise provided under 
     subparagraph (C) and paragraphs (4), (5), and (6), the 
     liability of the conservator or receiver for the 
     disaffirmance or repudiation of any contract pursuant to 
     paragraph (1) shall be--
       ``(i) limited to actual direct compensatory damages; and
       ``(ii) determined as of--

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

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

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

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

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

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

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

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

[[Page 8211]]

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

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

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

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

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

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

[[Page 8212]]

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

       ``(v) Repurchase agreement.--The term `repurchase 
     agreement' (which definition also applies to a reverse 
     repurchase agreement)--

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

     For purposes of this clause, the term `qualified foreign 
     government security' means a security that is a direct 
     obligation of, or that is fully guaranteed by, the central 
     government of a member of the Organization for Economic 
     Cooperation and Development (as determined by regulation or 
     order adopted by the appropriate Federal banking authority).
       ``(vi) Swap agreement.--The term `swap agreement' means--

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

     Such term is applicable for purposes of this subsection only 
     and shall not be construed or applied so as to challenge or 
     affect the characterization, definition, or treatment of any 
     swap agreement under any other statute, regulation, or rule, 
     including the Securities Act of 1933, the Securities Exchange 
     Act of 1934, the Public Utility Holding Company Act of 1935, 
     the Trust Indenture Act of 1939, the Investment Company Act 
     of 1940, the Investment Advisers Act of 1940, the Securities 
     Investor Protection Act of 1970, the Commodity Exchange Act, 
     the Gramm-Leach-Bliley Act, and the Legal Certainty for Bank 
     Products Act of 2000.
       ``(vii) Treatment of master agreement as one agreement.--
     Any master agreement for any contract or agreement described 
     in any preceding clause of this subparagraph (or any master 
     agreement for such master agreement or agreements), together 
     with all supplements to such master agreement, shall be 
     treated as a single agreement and a single qualified 
     financial contract. If a master agreement contains provisions 
     relating to agreements or transactions that are not 
     themselves qualified financial contracts, the master 
     agreement shall be deemed to be a qualified financial 
     contract only with respect to those transactions that are 
     themselves qualified financial contracts.
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property or with 
     an interest in property, including retention of title as a 
     security interest and foreclosure of the regulated entity's 
     equity of redemption.
       ``(E) Certain protections in event of appointment of 
     conservator.--Notwithstanding any other provision of this Act 
     (other than paragraph (13) of this subsection), any other 
     Federal law, or the law of any State, no person shall be 
     stayed or prohibited from exercising--
       ``(i) any right such person has to cause the termination, 
     liquidation, or acceleration of any qualified financial 
     contract with a regulated entity in a conservatorship based 
     upon a default under such financial contract which is 
     enforceable under applicable noninsolvency law;
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement relating to one or 
     more such qualified financial contracts; or
       ``(iii) any right to offset or net out any termination 
     values, payment amounts, or other transfer obligations 
     arising under or in connection with such qualified financial 
     contracts.
       ``(F) Clarification.--No provision of law shall be 
     construed as limiting the right or power of the Agency, or 
     authorizing any court or agency to limit or delay, in any 
     manner, the right or power of the Agency to transfer any 
     qualified financial contract in accordance with paragraphs 
     (9) and (10) of this subsection or to disaffirm or repudiate 
     any such contract in accordance with subsection (d)(1) of 
     this section.
       ``(G) Walkaway clauses not effective.--
       ``(i) In general.--Notwithstanding the provisions of 
     subparagraphs (A) and (E), and sections 403 and 404 of the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991, no walkaway clause shall be enforceable

[[Page 8213]]

     in a qualified financial contract of a regulated entity in 
     default.
       ``(ii) Walkaway clause defined.--For purposes of this 
     subparagraph, the term `walkaway clause' means a provision in 
     a qualified financial contract that, after calculation of a 
     value of a party's position or an amount due to or from 1 of 
     the parties in accordance with its terms upon termination, 
     liquidation, or acceleration of the qualified financial 
     contract, either does not create a payment obligation of a 
     party or extinguishes a payment obligation of a party in 
     whole or in part solely because of such party's status as a 
     nondefaulting party.
       ``(9) Transfer of qualified financial contracts.--In making 
     any transfer of assets or liabilities of a regulated entity 
     in default which includes any qualified financial contract, 
     the conservator or receiver for such regulated entity shall 
     either--
       ``(A) transfer to 1 person--
       ``(i) all qualified financial contracts between any person 
     (or any affiliate of such person) and the regulated entity in 
     default;
       ``(ii) all claims of such person (or any affiliate of such 
     person) against such regulated entity under any such contract 
     (other than any claim which, under the terms of any such 
     contract, is subordinated to the claims of general unsecured 
     creditors of such regulated entity);
       ``(iii) all claims of such regulated entity against such 
     person (or any affiliate of such person) under any such 
     contract; and
       ``(iv) all property securing or any other credit 
     enhancement for any contract described in clause (i) or any 
     claim described in clause (ii) or (iii) under any such 
     contract; or
       ``(B) transfer none of the financial contracts, claims, or 
     property referred to under subparagraph (A) (with respect to 
     such person and any affiliate of such person).
       ``(10) Notification of transfer.--
       ``(A) In general.--If--
       ``(i) the conservator or receiver for a regulated entity in 
     default makes any transfer of the assets and liabilities of 
     such regulated entity, and
       ``(ii) the transfer includes any qualified financial 
     contract,

     the conservator or receiver shall notify any person who is a 
     party to any such contract of such transfer by 5:00 p.m. 
     (eastern time) on the business day following the date of the 
     appointment of the receiver in the case of a receivership, or 
     the business day following such transfer in the case of a 
     conservatorship.
       ``(B) Certain rights not enforceable.--
       ``(i) Receivership.--A person who is a party to a qualified 
     financial contract with a regulated entity may not exercise 
     any right that such person has to terminate, liquidate, or 
     net such contract under paragraph (8)(A) of this subsection 
     or section 403 or 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991, solely by reason of or 
     incidental to the appointment of a receiver for the regulated 
     entity (or the insolvency or financial condition of the 
     regulated entity for which the receiver has been appointed)--

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

       ``(ii) Conservatorship.--A person who is a party to a 
     qualified financial contract with a regulated entity may not 
     exercise any right that such person has to terminate, 
     liquidate, or net such contract under paragraph (8)(E) of 
     this subsection or section 403 or 404 of the Federal Deposit 
     Insurance Corporation Improvement Act of 1991, solely by 
     reason of or incidental to the appointment of a conservator 
     for the regulated entity (or the insolvency or financial 
     condition of the regulated entity for which the conservator 
     has been appointed).
       ``(iii) Notice.--For purposes of this paragraph, the Agency 
     as receiver or conservator of a regulated entity shall be 
     deemed to have notified a person who is a party to a 
     qualified financial contract with such regulated entity if 
     the Agency has taken steps reasonably calculated to provide 
     notice to such person by the time specified in subparagraph 
     (A).
       ``(C) Business day defined.--For purposes of this 
     paragraph, the term `business day' means any day other than 
     any Saturday, Sunday, or any day on which either the New York 
     Stock Exchange or the Federal Reserve Bank of New York is 
     closed.
       ``(11) Disaffirmance or repudiation of qualified financial 
     contracts.--In exercising the rights of disaffirmance or 
     repudiation of a conservator or receiver with respect to any 
     qualified financial contract to which a regulated entity is a 
     party, the conservator or receiver for such institution shall 
     either--
       ``(A) disaffirm or repudiate all qualified financial 
     contracts between--
       ``(i) any person or any affiliate of such person; and
       ``(ii) the regulated entity in default; or
       ``(B) disaffirm or repudiate none of the qualified 
     financial contracts referred to in subparagraph (A) (with 
     respect to such person or any affiliate of such person).
       ``(12) Certain security interests not avoidable.--No 
     provision of this subsection shall be construed as permitting 
     the avoidance of any legally enforceable or perfected 
     security interest in any of the assets of any regulated 
     entity, except where such an interest is taken in 
     contemplation of the insolvency of the regulated entity, or 
     with the intent to hinder, delay, or defraud the regulated 
     entity or the creditors of such regulated entity.
       ``(13) Authority to enforce contracts.--
       ``(A) In general.--Notwithstanding any provision of a 
     contract providing for termination, default, acceleration, or 
     exercise of rights upon, or solely by reason of, insolvency 
     or the appointment of a conservator or receiver, the 
     conservator or receiver may enforce any contract or regulated 
     entity bond entered into by the regulated entity.
       ``(B) Certain rights not affected.--No provision of this 
     paragraph may be construed as impairing or affecting any 
     right of the conservator or receiver to enforce or recover 
     under a director's or officer's liability insurance contract 
     or surety bond under other applicable law.
       ``(C) Consent requirement.--
       ``(i) In general.--Except as otherwise provided under this 
     section, no person may exercise any right or power to 
     terminate, accelerate, or declare a default under any 
     contract to which a regulated entity is a party, or to obtain 
     possession of or exercise control over any property of the 
     regulated entity, or affect any contractual rights of the 
     regulated entity, without the consent of the conservator or 
     receiver, as appropriate, for a period of--

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

       ``(ii) Exceptions.--This paragraph shall--

       ``(I) not apply to a director's or officer's liability 
     insurance contract;
       ``(II) not apply to the rights of parties to any qualified 
     financial contracts under subsection (d)(8); and
       ``(III) not be construed as permitting the conservator or 
     receiver to fail to comply with otherwise enforceable 
     provisions of such contracts.

       ``(14) Savings clause.--The meanings of terms used in this 
     subsection are applicable for purposes of this subsection 
     only, and shall not be construed or applied so as to 
     challenge or affect the characterization, definition, or 
     treatment of any similar terms under any other statute, 
     regulation, or rule, including the Gramm-Leach-Bliley Act, 
     the Legal Certainty for Bank Products Act of 2000, the 
     securities laws (as that term is defined in section 3(a)(47) 
     of the Securities Exchange Act of 1934), and the Commodity 
     Exchange Act.
       ``(15) Exception for federal reserve and federal home loan 
     banks.--No provision of this subsection shall apply with 
     respect to--
       ``(A) any extension of credit from any Federal home loan 
     bank or Federal Reserve Bank to any regulated entity; or
       ``(B) any security interest in the assets of the regulated 
     entity securing any such extension of credit.
       ``(e) Valuation of Claims in Default.--
       ``(1) In general.--Notwithstanding any other provision of 
     Federal law or the law of any State, and regardless of the 
     method which the Agency determines to utilize with respect to 
     a regulated entity in default or in danger of default, 
     including transactions authorized under subsection (i), this 
     subsection shall govern the rights of the creditors of such 
     regulated entity.
       ``(2) Maximum liability.--The maximum liability of the 
     Agency, acting as receiver or in any other capacity, to any 
     person having a claim against the receiver or the regulated 
     entity for which such receiver is appointed shall equal the 
     lesser of--
       ``(A) the amount such claimant would have received if the 
     Agency had liquidated the assets and liabilities of such 
     regulated entity without exercising the authority of the 
     Agency under subsection (i) of this section; or
       ``(B) the amount of proceeds realized from the performance 
     of contracts or sale of the assets of the regulated entity.
       ``(f) Limitation on Court Action.--Except as provided in 
     this section or at the request of the Director, no court may 
     take any action to restrain or affect the exercise of powers 
     or functions of the Agency as a conservator or a receiver.
       ``(g) Liability of Directors and Officers.--
       ``(1) In general.--A director or officer of a regulated 
     entity may be held personally liable for monetary damages in 
     any civil action by, on behalf of, or at the request or 
     direction of the Agency, which action is prosecuted wholly or 
     partially for the benefit of the Agency--
       ``(A) acting as conservator or receiver of such regulated 
     entity, or
       ``(B) acting based upon a suit, claim, or cause of action 
     purchased from, assigned by, or otherwise conveyed by such 
     receiver or conservator,

     for gross negligence, including any similar conduct or 
     conduct that demonstrates a greater disregard of a duty of 
     care (than gross negligence) including intentional tortious 
     conduct, as such terms are defined and determined under 
     applicable State law.
       ``(2) No limitation.--Nothing in this paragraph shall 
     impair or affect any right of the Agency under other 
     applicable law.

[[Page 8214]]

       ``(h) Damages.--In any proceeding related to any claim 
     against a director, officer, employee, agent, attorney, 
     accountant, appraiser, or any other party employed by or 
     providing services to a regulated entity, recoverable damages 
     determined to result from the improvident or otherwise 
     improper use or investment of any assets of the regulated 
     entity shall include principal losses and appropriate 
     interest.
       ``(i) Limited-Life Regulated Entities.--
       ``(1) Organization.--
       ``(A) Purpose.--If a regulated entity is in default, or if 
     the Agency anticipates that a regulated entity will default, 
     the Agency may organize a limited-life regulated entity with 
     those powers and attributes of the regulated entity in 
     default or in danger of default that the Director determines 
     necessary, subject to the provisions of this subsection. The 
     Director shall grant a temporary charter to the limited-life 
     regulated entity, and the limited-life regulated entity shall 
     operate subject to that charter.
       ``(B) Authorities.--Upon the creation of a limited-life 
     regulated entity under subparagraph (A), the limited-life 
     regulated entity may--
       ``(i) assume such liabilities of the regulated entity that 
     is in default or in danger of default as the Agency may, in 
     its discretion, determine to be appropriate, provided that 
     the liabilities assumed shall not exceed the amount of assets 
     of the limited-life regulated entity;
       ``(ii) purchase such assets of the regulated entity that is 
     in default, or in danger of default, as the Agency may, in 
     its discretion, determine to be appropriate; and
       ``(iii) perform any other temporary function which the 
     Agency may, in its discretion, prescribe in accordance with 
     this section.
       ``(2) Charter.--
       ``(A) Conditions.--The Agency may grant a temporary charter 
     if the Agency determines that the continued operation of the 
     regulated entity in default or in danger of default is in the 
     best interest of the national economy and the housing 
     markets.
       ``(B) Treatment as being in default for certain purposes.--
     A limited-life regulated entity shall be treated as a 
     regulated entity in default at such times and for such 
     purposes as the Agency may, in its discretion, determine.
       ``(C) Management.--A limited-life regulated entity, upon 
     the granting of its charter, shall be under the management of 
     a board of directors consisting of not fewer than 5 nor more 
     than 10 members appointed by the Agency.
       ``(D) Bylaws.--The board of directors of a limited-life 
     regulated entity shall adopt such bylaws as may be approved 
     by the Agency.
       ``(3) Capital stock.--No capital stock need be paid into a 
     limited-life regulated entity by the Agency.
       ``(4) Investments.--Funds of a limited-life regulated 
     entity shall be kept on hand in cash, invested in obligations 
     of the United States or obligations guaranteed as to 
     principal and interest by the United States, or deposited 
     with the Agency, or any Federal Reserve bank.
       ``(5) Exempt status.--Notwithstanding any other provision 
     of Federal or State law, the limited-life regulated entity, 
     its franchise, property, and income shall be exempt from all 
     taxation now or hereafter imposed by the United States, by 
     any territory, dependency, or possession thereof, or by any 
     State, county, municipality, or local taxing authority.
       ``(6) Winding up.--
       ``(A) In general.--Subject to subparagraph (B), unless 
     Congress authorizes the sale of the capital stock of the 
     limited-life regulated entity, not later than 2 years after 
     the date of its organization, the Agency shall wind up the 
     affairs of the limited-life regulated entity.
       ``(B) Extension.--The Director may, in the discretion of 
     the Director, extend the status of the limited-life regulated 
     entity for 3 additional 1-year periods.
       ``(7) Transfer of assets and liabilities.--
       ``(A) In general.--
       ``(i) Transfer of assets and liabilities.--The Agency, as 
     receiver, may transfer any assets and liabilities of a 
     regulated entity in default, or in danger of default, to the 
     limited-life regulated entity in accordance with paragraph 
     (1).
       ``(ii) Subsequent transfers.--At any time after a charter 
     is transferred to a limited-life regulated entity, the 
     Agency, as receiver, may transfer any assets and liabilities 
     of such regulated entity in default, or in danger in default, 
     as the Agency may, in its discretion, determine to be 
     appropriate in accordance with paragraph (1).
       ``(iii) Effective without approval.--The transfer of any 
     assets or liabilities of a regulated entity in default, or in 
     danger of default, transferred to a limited-life regulated 
     entity shall be effective without any further approval under 
     Federal or State law, assignment, or consent with respect 
     thereto.
       ``(8) Proceeds.--To the extent that available proceeds from 
     the limited-life regulated entity exceed amounts required to 
     pay obligations, such proceeds may be paid to the regulated 
     entity in default, or in danger of default.
       ``(9) Powers.--
       ``(A) In general.--Each limited-life regulated entity 
     created under this subsection shall have all corporate powers 
     of, and be subject to the same provisions of law as, the 
     regulated entity in default or in danger of default to which 
     it relates, except that--
       ``(i) the Agency may--

       ``(I) remove the directors of a limited-life regulated 
     entity; and
       ``(II) fix the compensation of members of the board of 
     directors and senior management, as determined by the Agency 
     in its discretion, of a limited-life regulated entity;

       ``(ii) the Agency may indemnify the representatives for 
     purposes of paragraph (1)(B), and the directors, officers, 
     employees, and agents of a limited-life regulated entity on 
     such terms as the Agency determines to be appropriate; and
       ``(iii) the board of directors of a limited-life regulated 
     entity--

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

       ``(B) Stay of judicial action.--Any judicial action to 
     which a limited-life regulated entity becomes a party by 
     virtue of its acquisition of any assets or assumption of any 
     liabilities of a regulated entity in default shall be stayed 
     from further proceedings for a period of up to 45 days at the 
     request of the limited-life regulated entity. Such period may 
     be modified upon the consent of all parties.
       ``(10) Obtaining of credit and incurring of debt.--
       ``(A) In general.--The limited-life regulated entity may 
     obtain unsecured credit and incur unsecured debt in the 
     ordinary course of business.
       ``(B) Inability to obtain credit.--If the limited-life 
     regulated entity is unable to obtain unsecured credit the 
     Director may authorize the obtaining of credit or the 
     incurring of debt--
       ``(i) with priority over any or all administrative 
     expenses;
       ``(ii) secured by a lien on property that is not otherwise 
     subject to a lien; or
       ``(iii) secured by a junior lien on property that is 
     subject to a lien.
       ``(C) Limitations.--
       ``(i) In general.--The Director, after notice and a 
     hearing, may authorize the obtaining of credit or the 
     incurring of debt secured by a senior or equal lien on 
     property that is subject to a lien (other than mortgages that 
     collateralize the mortgage-backed securities issued or 
     guaranteed by the regulated entity) only if--

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

       ``(ii) Burden of proof.--In any hearing under this 
     subsection, the Director has the burden of proof on the issue 
     of adequate protection.
       ``(D) Effect on debts and liens.--The reversal or 
     modification on appeal of an authorization under this 
     paragraph to obtain credit or incur debt, or of a grant under 
     this section of a priority or a lien, does not affect the 
     validity of any debt so incurred, or any priority or lien so 
     granted, to an entity that extended such credit in good 
     faith, whether or not such entity knew of the pendency of the 
     appeal, unless such authorization and the incurring of such 
     debt, or the granting of such priority or lien, were stayed 
     pending appeal.
       ``(11) Issuance of preferred debt.--A limited-life 
     regulated entity may, subject to the approval of the Director 
     and subject to such terms and conditions as the Director may 
     prescribe, issue notes, bonds, or other debt obligations of a 
     class to which all other debt obligations of the limited-life 
     regulated entity shall be subordinate in right and payment.
       ``(12) No federal status.--
       ``(A) Agency status.--A limited-life regulated entity is 
     not an agency, establishment, or instrumentality of the 
     United States.
       ``(B) Employee status.--Representatives for purposes of 
     paragraph (1)(B), interim directors, directors, officers, 
     employees, or agents of a limited-life regulated entity are 
     not, solely by virtue of service in any such capacity, 
     officers or employees of the United States. Any employee of 
     the Agency or of any Federal instrumentality who serves at 
     the request of the Agency as a representative for purposes of 
     paragraph (1)(B), interim director, director, officer, 
     employee, or agent of a limited-life regulated entity shall 
     not--
       ``(i) solely by virtue of service in any such capacity lose 
     any existing status as an officer or employee of the United 
     States for purposes of title 5, United States Code, or any 
     other provision of law; or
       ``(ii) receive any salary or benefits for service in any 
     such capacity with respect to a limited-life regulated entity 
     in addition to such salary or benefits as are obtained 
     through employment with the Agency or such Federal 
     instrumentality.

[[Page 8215]]

       ``(13) Additional powers.--In addition to any other powers 
     granted under this subsection, a limited-life regulated 
     entity may--
       ``(A) extend a maturity date or change in an interest rate 
     or other term of outstanding securities;
       ``(B) issue securities of the limited-life regulated 
     entity, for cash, for property, for existing securities, or 
     in exchange for claims or interests, or for any other 
     appropriate purposes; and
       ``(C) take any other action not inconsistent with this 
     section.
       ``(j) Other Exemptions.--When acting as a receiver, the 
     following provisions shall apply with respect to the Agency:
       ``(1) Exemption from taxation.--The Agency, including its 
     franchise, its capital, reserves, and surplus, and its 
     income, shall be exempt from all taxation imposed by any 
     State, country, municipality, or local taxing authority, 
     except that any real property of the Agency shall be subject 
     to State, territorial, county, municipal, or local taxation 
     to the same extent according to its value as other real 
     property is taxed, except that, notwithstanding the failure 
     of any person to challenge an assessment under State law of 
     the value of such property, and the tax thereon, shall be 
     determined as of the period for which such tax is imposed.
       ``(2) Exemption from attachment and liens.--No property of 
     the Agency shall be subject to levy, attachment, garnishment, 
     foreclosure, or sale without the consent of the Agency, nor 
     shall any involuntary lien attach to the property of the 
     Agency.
       ``(3) Exemption from penalties and fines.--The Agency shall 
     not be liable for any amounts in the nature of penalties or 
     fines, including those arising from the failure of any person 
     to pay any real property, personal property, probate, or 
     recording tax or any recording or filing fees when due.
       ``(k) Prohibition of Charter Revocation.--In no case may a 
     receiver appointed pursuant to this section revoke, annul, or 
     terminate the charter of a regulated entity.
       ``(l) Preservation of Bankruptcy Law .--Nothing in this Act 
     shall be construed to modify, impair, or supersede the 
     operation of any provision of title 11 of the United States 
     Code, or the operation of any provision of title 28 of such 
     Code that relates to cases under such title 11, except as 
     otherwise provided in section 1367(b) of this Act and except 
     that a regulated entity may not be a debtor under such title 
     11.''.
       (b) Conforming Amendments.--
       (1) Housing and community development act of 1992.--
     Subtitle B of title XIII of the Housing and Community 
     Development Act of 1992 is amended by striking sections 1369 
     (12 U.S.C. 4619), 1369A (12 U.S.C. 4620), and 1369B (12 
     U.S.C. 4621).
       (2) Federal home loan banks.--Section 25 of the Federal 
     Home Loan Bank Act (12 U.S.C. 1445) is amended to read as 
     follows:

     ``SEC. 25. SUCCESSION OF FEDERAL HOME LOAN BANKS.

       ``Each Federal Home Loan Bank shall have succession until 
     it is voluntarily merged with another Bank under this Act, or 
     until it is merged, reorganized, rehabilitated, liquidated, 
     or otherwise wound up by the Director in accordance with the 
     provisions of section 1367 of the Housing and Community 
     Development Act of 1992, or by further Act of Congress.''.

     SEC. 349. CONFORMING AMENDMENTS.

       Title XIII of the Housing and Community Development Act of 
     1992, as amended by the preceding provisions of this title, 
     is further amended--
       (1) in sections 1365 (12 U.S.C. 4615) through 1369D (12 
     U.S.C. 4623), but not including section 1367 (12 U.S.C. 4617) 
     as amended by section 349 of this title--
       (A) by striking ``An enterprise'' each place such term 
     appears and inserting ``A regulated entity'';
       (B) by striking ``an enterprise'' each place such term 
     appears and inserting ``a regulated entity''; and
       (C) by striking ``the enterprise'' each place such term 
     appears and inserting ``the regulated entity'';
       (2) in section 1366 (12 U.S.C. 4616)--
       (A) in subsection (b)(7), by striking ``section 1369 
     (excluding subsection (a)(1) and (2))'' and inserting 
     ``section 1367''; and
       (B) in subsection (d), by striking ``the enterprises'' and 
     inserting ``the regulated entities'';
       (3) in section 1368(d) (12 U.S.C. 4618(d)), by striking 
     ``Committee on Banking, Finance and Urban Affairs'' and 
     inserting ``Committee on Financial Services'';
       (4) in section 1369C (12 U.S.C. 4622)--
       (A) in subsection (a)(4), by striking ``activities 
     (including existing and new programs)'' and inserting 
     ``activities, services, undertakings, and offerings 
     (including existing and new products (as such term is defined 
     in section 1321(f))''; and
       (B) in subsection (c), by striking ``any enterprise'' and 
     inserting ``any regulated entity''; and
       (5) in subsections (a) and (d) of section 1369D, by 
     striking ``section 1366 or 1367 or action under section 
     1369)'' each place such phrase appears and inserting 
     ``section 1367)''.

                     CHAPTER 4--ENFORCEMENT ACTIONS

     SEC. 351. CEASE-AND-DESIST PROCEEDINGS.

       Section 1371 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4631) is amended--
       (1) by striking subsections (a) and (b) and inserting the 
     following new subsections:
       ``(a) Issuance for Unsafe or Unsound Practices and 
     Violations of Rules or Laws.--If, in the opinion of the 
     Director, a regulated entity or any regulated entity-
     affiliated party is engaging or has engaged, or the Director 
     has reasonable cause to believe that the regulated entity or 
     any regulated entity-affiliated party is about to engage, in 
     an unsafe or unsound practice in conducting the business of 
     the regulated entity or is violating or has violated, or the 
     Director has reasonable cause to believe that the regulated 
     entity or any regulated entity-affiliated party is about to 
     violate, a law, rule, or regulation, or any condition imposed 
     in writing by the Director in connection with the granting of 
     any application or other request by the regulated entity or 
     any written agreement entered into with the Director, the 
     Director may issue and serve upon the regulated entity or 
     such party a notice of charges in respect thereof. The 
     Director may not, pursuant to this section, enforce 
     compliance with any housing goal established under subpart B 
     of part 2 of subtitle A of this title, with section 1336 or 
     1337 of this title, with subsection (m) or (n) of section 309 
     of the Federal National Mortgage Association Charter Act (12 
     U.S.C. 1723a(m), (n)), with subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act (12 
     U.S.C. 1456(e), (f)), or with paragraph (5) of section 10(j) 
     of the Federal Home Loan Bank Act (12 U.S.C. 1430(j)).
       ``(b) Issuance for Unsatisfactory Rating.--If a regulated 
     entity receives, in its most recent report of examination, a 
     less-than-satisfactory rating for asset quality, management, 
     earnings, or liquidity, the Director may (if the deficiency 
     is not corrected) deem the regulated entity to be engaging in 
     an unsafe or unsound practice for purposes of this 
     subsection.'';
       (2) in subsection (c)(2), by striking ``enterprise, 
     executive officer, or director'' and inserting ``regulated 
     entity or regulated entity-affiliated party''; and
       (3) in subsection (d)--
       (A) in the matter preceding paragraph (1), by striking 
     ``enterprise, executive officer, or director'' and inserting 
     ``regulated entity or regulated entity-affiliated party'';
       (B) in paragraph (1)--
       (i) by striking ``an executive officer or a director'' and 
     inserting ``a regulated entity affiliated party''; and
       (ii) by inserting ``(including reimbursement of 
     compensation under section 1318)'' after ``reimbursement'';
       (C) in paragraph (6), by striking ``and'' at the end;
       (D) by redesignating paragraph (7) as paragraph (8); and
       (E) by inserting after paragraph (6) the following new 
     paragraph:
       ``(7) to effect an attachment on a regulated entity or 
     regulated entity-affiliated party subject to an order under 
     this section or section 1372; and''.

     SEC. 352. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.

       Section 1372 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4632) is amended--
       (1) by striking subsection (a) and inserting the following 
     new subsection:
       ``(a) Grounds for Issuance.--Whenever the Director 
     determines that the violation or threatened violation or the 
     unsafe or unsound practice or practices specified in the 
     notice of charges served upon the regulated entity or any 
     regulated entity-affiliated party pursuant to section 
     1371(a), or the continuation thereof, is likely to cause 
     insolvency or significant dissipation of assets or earnings 
     of the regulated entity, or is likely to weaken the condition 
     of the regulated entity prior to the completion of the 
     proceedings conducted pursuant to sections 1371 and 1373, the 
     Director may issue a temporary order requiring the regulated 
     entity or such party to cease and desist from any such 
     violation or practice and to take affirmative action to 
     prevent or remedy such insolvency, dissipation, condition, or 
     prejudice pending completion of such proceedings. Such order 
     may include any requirement authorized under section 
     1371(d).'';
       (2) in subsection (b), by striking ``enterprise, executive 
     officer, or director'' and inserting ``regulated entity or 
     regulated entity-affiliated party'';
       (3) in subsection (d)--
       (A) by striking ``An enterprise, executive officer, or 
     director'' and inserting ``A regulated entity or regulated 
     entity-affiliated party''; and
       (B) by striking ``the enterprise, executive officer, or 
     director'' and inserting ``the regulated entity or regulated 
     entity-affiliated party''; and
       (4) by striking subsection (e) and in inserting the 
     following new subsection:
       ``(e) Enforcement.--In the case of violation or threatened 
     violation of, or failure to obey, a temporary cease-and-
     desist order issued pursuant to this section, the Director 
     may apply to the United States District Court for the 
     District of Columbia or the United States district court 
     within the jurisdiction of which the headquarters of the 
     regulated entity is located, for an injunction to enforce 
     such order, and, if the court determines that there has been 
     such violation or

[[Page 8216]]

     threatened violation or failure to obey, it shall be the duty 
     of the court to issue such injunction.''.

     SEC. 353. PREJUDGMENT ATTACHMENT.

       The Housing and Community Development Act of 1992 is 
     amended by inserting after section 1375 (12 U.S.C. 4635) the 
     following new section:

     ``SEC. 1375A. PREJUDGMENT ATTACHMENT.

       ``(a) In General.--In any action brought pursuant to this 
     title, or in actions brought in aid of, or to enforce an 
     order in, any administrative or other civil action for money 
     damages, restitution, or civil money penalties brought 
     pursuant to this title, the court may, upon application of 
     the Director or Attorney General, as applicable, issue a 
     restraining order that--
       ``(1) prohibits any person subject to the proceeding from 
     withdrawing, transferring, removing, dissipating, or 
     disposing of any funds, assets or other property; and
       ``(2) appoints a person on a temporary basis to administer 
     the restraining order.
       ``(b) Standard.--
       ``(1) Showing.--Rule 65 of the Federal Rules of Civil 
     Procedure shall apply with respect to any proceeding under 
     subsection (a) without regard to the requirement of such rule 
     that the applicant show that the injury, loss, or damage is 
     irreparable and immediate.
       ``(2) State proceeding.--If, in the case of any proceeding 
     in a State court, the court determines that rules of civil 
     procedure available under the laws of such State provide 
     substantially similar protections to a party's right to due 
     process as Rule 65 (as modified with respect to such 
     proceeding by paragraph (1)), the relief sought under 
     subsection (a) may be requested under the laws of such 
     State.''.

     SEC. 354. ENFORCEMENT AND JURISDICTION.

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

     SEC. 355. CIVIL MONEY PENALTIES.

       Section 1376 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4636) is amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1), by striking ``, 
     or any executive officer or director'' and inserting ``or any 
     regulated-entity affiliated party''; and
       (B) in paragraph (1)--
       (i) by striking ``the Federal National Mortgage Association 
     Charter Act, the Federal Home Loan Mortgage Corporation Act'' 
     and inserting ``any provision of any of the authorizing 
     statutes'';
       (ii) by striking ``or Act'' and inserting ``or statute'';
       (iii) by striking ``or subsection'' and inserting ``, 
     subsection''; and
       (iv) by inserting ``, or paragraph (5) or (12) of section 
     10(j) of the Federal Home Loan Bank Act'' before the 
     semicolon at the end;
       (2) by striking subsection (b) and inserting the following 
     new subsection:
       ``(b) Amount of Penalty.--
       ``(1) First tier.--Any regulated entity which, or any 
     regulated entity-affiliated party who--
       ``(A) violates any provision of this title, any provision 
     of any of the authorizing statutes, or any order, condition, 
     rule, or regulation under any such title or statute, except 
     that the Director may not, pursuant to this section, enforce 
     compliance with any housing goal established under subpart B 
     of part 2 of subtitle A of this title, with section 1336 or 
     1337 of this title, with subsection (m) or (n) of section 309 
     of the Federal National Mortgage Association Charter Act (12 
     U.S.C. 1723a(m), (n)), with subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act (12 
     U.S.C. 1456(e), (f)), or with paragraph (5) or (12) of 
     section 10(j) of the Federal Home Loan Bank Act;
       ``(B) violates any final or temporary order or notice 
     issued pursuant to this title;
       ``(C) violates any condition imposed in writing by the 
     Director in connection with the grant of any application or 
     other request by such regulated entity; or
       ``(D) violates any written agreement between the regulated 
     entity and the Director,
     shall forfeit and pay a civil money penalty of not more than 
     $10,000 for each day during which such violation continues.
       ``(2) Second tier.--Notwithstanding paragraph (1)--
       ``(A) if a regulated entity, or a regulated entity-
     affiliated party--
       ``(i) commits any violation described in any subparagraph 
     of paragraph (1);
       ``(ii) recklessly engages in an unsafe or unsound practice 
     in conducting the affairs of such regulated entity; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) the violation, practice, or breach--
       ``(i) is part of a pattern of misconduct;
       ``(ii) causes or is likely to cause more than a minimal 
     loss to such regulated entity; or
       ``(iii) results in pecuniary gain or other benefit to such 
     party,
     the regulated entity or regulated entity-affiliated party 
     shall forfeit and pay a civil penalty of not more than 
     $50,000 for each day during which such violation, practice, 
     or breach continues.
       ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
     any regulated entity which, or any regulated entity-
     affiliated party who--
       ``(A) knowingly--
       ``(i) commits any violation or engages in any conduct 
     described in any subparagraph of paragraph (1);
       ``(ii) engages in any unsafe or unsound practice in 
     conducting the affairs of such regulated entity; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) knowingly or recklessly causes a substantial loss to 
     such regulated entity or a substantial pecuniary gain or 
     other benefit to such party by reason of such violation, 
     practice, or breach,

     shall forfeit and pay a civil penalty in an amount not to 
     exceed the applicable maximum amount determined under 
     paragraph (4) for each day during which such violation, 
     practice, or breach continues.
       ``(4) Maximum amounts of penalties for any violation 
     described in paragraph (3).-- The maximum daily amount of any 
     civil penalty which may be assessed pursuant to paragraph (3) 
     for any violation, practice, or breach described in such 
     paragraph is--
       ``(A) in the case of any person other than a regulated 
     entity, an amount not to exceed $2,000,000; and
       ``(B) in the case of any regulated entity, $2,000,000.'';
       (3) in subsection (c)(1)(B), by striking ``enterprise, 
     executive officer, or director'' and inserting ``regulated 
     entity or regulated entity-affiliated party'';
       (4) in subsection (d), by striking the first sentence and 
     inserting the following: ``If a regulated entity or regulated 
     entity-affiliated party fails to comply with an order of the 
     Director imposing a civil money penalty under this section, 
     after the order is no longer subject to review as provided 
     under subsection (c)(1) and section 1374, the Director may, 
     in the discretion of the Director, bring an action in the 
     United States District Court for the District of Columbia, or 
     the United States district court within the jurisdiction of 
     which the headquarters of the regulated entity is located, to 
     obtain a monetary judgment against the regulated entity or 
     regulated entity affiliated party and such other relief as 
     may be available, or request that the Attorney General of the 
     United States bring such an action.''; and
       (5) in subsection (g), by striking ``subsection (b)(3)'' 
     and inserting ``this section, unless authorized by the 
     Director by rule, regulation, or order''.

     SEC. 356. REMOVAL AND PROHIBITION AUTHORITY.

       (a) In General.--Subtitle C of title XIII of the Housing 
     and Community Development Act of 1992 is amended--
       (1) by redesignating sections 1377, 1378, 1379, 1379A, and 
     1379B (12 U.S.C. 4637-41) as sections 1379, 1379A, 1379B, 
     1379C, and 1379D, respectively; and
       (2) by inserting after section 1376 (12 U.S.C. 4636) the 
     following new section:

     ``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

       ``(a) Authority To Issue Order.--Whenever the Director 
     determines that--
       ``(1) any regulated entity-affiliated party has, directly 
     or indirectly--
       ``(A) violated--
       ``(i) any law or regulation;
       ``(ii) any cease-and-desist order which has become final;
       ``(iii) any condition imposed in writing by the Director in 
     connection with the grant of any application or other request 
     by such regulated entity; or
       ``(iv) any written agreement between such regulated entity 
     and the Director;
       ``(B) engaged or participated in any unsafe or unsound 
     practice in connection with any regulated entity; or
       ``(C) committed or engaged in any act, omission, or 
     practice which constitutes a breach of such party's fiduciary 
     duty;
       ``(2) by reason of the violation, practice, or breach 
     described in any subparagraph of paragraph (1)--
       ``(A) such regulated entity has suffered or will probably 
     suffer financial loss or other damage; or
       ``(B) such party has received financial gain or other 
     benefit by reason of such violation, practice, or breach; and
       ``(3) such violation, practice, or breach--
       ``(A) involves personal dishonesty on the part of such 
     party; or
       ``(B) demonstrates willful or continuing disregard by such 
     party for the safety or soundness of such regulated entity, 
     the Director may serve upon such party a written notice of 
     the Director's intention to remove such party from office or 
     to prohibit any further participation by such party, in any

[[Page 8217]]

     manner, in the conduct of the affairs of any regulated 
     entity.
       ``(b) Suspension Order.--
       ``(1) Suspension or prohibition authority.--If the Director 
     serves written notice under subsection (a) to any regulated 
     entity-affiliated party of the Director's intention to issue 
     an order under such subsection, the Director may--
       ``(A) suspend such party from office or prohibit such party 
     from further participation in any manner in the conduct of 
     the affairs of the regulated entity, if the Director--
       ``(i) determines that such action is necessary for the 
     protection of the regulated entity; and
       ``(ii) serves such party with written notice of the 
     suspension order; and
       ``(B) prohibit the regulated entity from releasing to or on 
     behalf of the regulated entity-affiliated party any 
     compensation or other payment of money or other thing of 
     current or potential value in connection with any 
     resignation, removal, retirement, or other termination of 
     employment or office of the party.
       ``(2) Effective period.--Any suspension order issued under 
     this subsection--
       ``(A) shall become effective upon service; and
       ``(B) unless a court issues a stay of such order under 
     subsection (g) of this section, shall remain in effect and 
     enforceable until--
       ``(i) the date the Director dismisses the charges contained 
     in the notice served under subsection (a) with respect to 
     such party; or
       ``(ii) the effective date of an order issued by the 
     Director to such party under subsection (a).
       ``(3) Copy of order.--If the Director issues a suspension 
     order under this subsection to any regulated entity-
     affiliated party, the Director shall serve a copy of such 
     order on any regulated entity with which such party is 
     affiliated at the time such order is issued.
       ``(c) Notice, Hearing, and Order.--A notice of intention to 
     remove a regulated entity-affiliated party from office or to 
     prohibit such party from participating in the conduct of the 
     affairs of a regulated entity shall contain a statement of 
     the facts constituting grounds for such action, and shall fix 
     a time and place at which a hearing will be held on such 
     action. Such hearing shall be fixed for a date not earlier 
     than 30 days nor later than 60 days after the date of service 
     of such notice, unless an earlier or a later date is set by 
     the Director at the request of (1) such party, and for good 
     cause shown, or (2) the Attorney General of the United 
     States. Unless such party shall appear at the hearing in 
     person or by a duly authorized representative, such party 
     shall be deemed to have consented to the issuance of an order 
     of such removal or prohibition. In the event of such consent, 
     or if upon the record made at any such hearing the Director 
     shall find that any of the grounds specified in such notice 
     have been established, the Director may issue such orders of 
     suspension or removal from office, or prohibition from 
     participation in the conduct of the affairs of the regulated 
     entity, as it may deem appropriate, together with an order 
     prohibiting compensation described in subsection (b)(1)(B). 
     Any such order shall become effective at the expiration of 30 
     days after service upon such regulated entity and such party 
     (except in the case of an order issued upon consent, which 
     shall become effective at the time specified therein). Such 
     order shall remain effective and enforceable except to such 
     extent as it is stayed, modified, terminated, or set aside by 
     action of the Director or a reviewing court.
       ``(d) Prohibition of Certain Specific Activities.--Any 
     person subject to an order issued under this section shall 
     not--
       ``(1) participate in any manner in the conduct of the 
     affairs of any regulated entity;
       ``(2) solicit, procure, transfer, attempt to transfer, 
     vote, or attempt to vote any proxy, consent, or authorization 
     with respect to any voting rights in any regulated entity;
       ``(3) violate any voting agreement previously approved by 
     the Director; or
       ``(4) vote for a director, or serve or act as a regulated 
     entity-affiliated party.
       ``(e) Industry-Wide Prohibition.--
       ``(1) In general.--Except as provided in paragraph (2), any 
     person who, pursuant to an order issued under this section, 
     has been removed or suspended from office in a regulated 
     entity or prohibited from participating in the conduct of the 
     affairs of a regulated entity may not, while such order is in 
     effect, continue or commence to hold any office in, or 
     participate in any manner in the conduct of the affairs of, 
     any regulated entity.
       ``(2) Exception if director provides written consent.--If, 
     on or after the date an order is issued under this section 
     which removes or suspends from office any regulated entity-
     affiliated party or prohibits such party from participating 
     in the conduct of the affairs of a regulated entity, such 
     party receives the written consent of the Director, the order 
     shall, to the extent of such consent, cease to apply to such 
     party with respect to the regulated entity described in the 
     written consent. If the Director grants such a written 
     consent, it shall publicly disclose such consent.
       ``(3) Violation of paragraph (1) treated as violation of 
     order.--Any violation of paragraph (1) by any person who is 
     subject to an order described in such subsection shall be 
     treated as a violation of the order.
       ``(f) Applicability.--This section shall only apply to a 
     person who is an individual, unless the Director specifically 
     finds that it should apply to a corporation, firm, or other 
     business enterprise.
       ``(g) Stay of Suspension and Prohibition of Regulated 
     Entity-Affiliated Party.--Within 10 days after any regulated 
     entity-affiliated party has been suspended from office and/or 
     prohibited from participation in the conduct of the affairs 
     of a regulated entity under this section, such party may 
     apply to the United States District Court for the District of 
     Columbia, or the United States district court for the 
     judicial district in which the headquarters of the regulated 
     entity is located, for a stay of such suspension and/or 
     prohibition and any prohibition under subsection (b)(1)(B) 
     pending the completion of the administrative proceedings 
     pursuant to the notice served upon such party under this 
     section, and such court shall have jurisdiction to stay such 
     suspension and/or prohibition.
       ``(h) Suspension or Removal of Regulated Entity-Affiliated 
     Party Charged With Felony.--
       ``(1) Suspension or prohibition.--
       ``(A) In general.--Whenever any regulated entity-affiliated 
     party is charged in any information, indictment, or 
     complaint, with the commission of or participation in a crime 
     involving dishonesty or breach of trust which is punishable 
     by imprisonment for a term exceeding one year under State or 
     Federal law, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     regulated entity or impair public confidence in the regulated 
     entity, by written notice served upon such party--
       ``(i) suspend such party from office or prohibit such party 
     from further participation in any manner in the conduct of 
     the affairs of any regulated entity; and
       ``(ii) prohibit the regulated entity from releasing to or 
     on behalf of the regulated entity-affiliated party any 
     compensation or other payment of money or other thing of 
     current or potential value in connection with the period of 
     any such suspension or with any resignation, removal, 
     retirement, or other termination of employment or office of 
     the party.
       ``(B) Provisions applicable to notice.--
       ``(i) Copy.--A copy of any notice under paragraph (1)(A) 
     shall also be served upon the regulated entity.
       ``(ii) Effective period.--A suspension or prohibition under 
     subparagraph (A) shall remain in effect until the 
     information, indictment, or complaint referred to in such 
     subparagraph is finally disposed of or until terminated by 
     the Director.
       ``(2) Removal or prohibition.--
       ``(A) In general.--If a judgment of conviction or an 
     agreement to enter a pretrial diversion or other similar 
     program is entered against a regulated entity-affiliated 
     party in connection with a crime described in paragraph 
     (1)(A), at such time as such judgment is not subject to 
     further appellate review, the Director may, if continued 
     service or participation by such party may pose a threat to 
     the regulated entity or impair public confidence in the 
     regulated entity, issue and serve upon such party an order 
     that--
       ``(i) removes such party from office or prohibits such 
     party from further participation in any manner in the conduct 
     of the affairs of the regulated entity without the prior 
     written consent of the Director; and
       ``(ii) prohibits the regulated entity from releasing to or 
     on behalf of the regulated entity-affiliated party any 
     compensation or other payment of money or other thing of 
     current or potential value in connection with the termination 
     of employment or office of the party.
       ``(B) Provisions applicable to order.--
       ``(i) Copy.--A copy of any order under paragraph (2)(A) 
     shall also be served upon the regulated entity, whereupon the 
     regulated entity-affiliated party who is subject to the order 
     (if a director or an officer) shall cease to be a director or 
     officer of such regulated entity.
       ``(ii) Effect of acquittal.--A finding of not guilty or 
     other disposition of the charge shall not preclude the 
     Director from instituting proceedings after such finding or 
     disposition to remove such party from office or to prohibit 
     further participation in regulated entity affairs, and to 
     prohibit compensation or other payment of money or other 
     thing of current or potential value in connection with any 
     resignation, removal, retirement, or other termination of 
     employment or office of the party, pursuant to subsections 
     (a), (d), or (e) of this section.
       ``(iii) Effective period.--Any notice of suspension or 
     order of removal issued under this subsection shall remain 
     effective and outstanding until the completion of any hearing 
     or appeal authorized under paragraph (4) unless terminated by 
     the Director.
       ``(3) Authority of remaining board members.--If at any 
     time, because of the suspension of one or more directors 
     pursuant to this section, there shall be on the board of 
     directors of a regulated entity less than a quorum of 
     directors not so suspended, all powers and functions vested 
     in or exercisable by such board shall vest in and be 
     exercisable by the director or directors on the board not so 
     suspended, until such time as there shall be a quorum of the 
     board of directors. In the event all of the directors of a

[[Page 8218]]

     regulated entity are suspended pursuant to this section, the 
     Director shall appoint persons to serve temporarily as 
     directors in their place and stead pending the termination of 
     such suspensions, or until such time as those who have been 
     suspended cease to be directors of the regulated entity and 
     their respective successors take office.
       ``(4) Hearing regarding continued participation.--Within 30 
     days from service of any notice of suspension or order of 
     removal issued pursuant to paragraph (1) or (2) of this 
     subsection, the regulated entity-affiliated party concerned 
     may request in writing an opportunity to appear before the 
     Director to show that the continued service to or 
     participation in the conduct of the affairs of the regulated 
     entity by such party does not, or is not likely to, pose a 
     threat to the interests of the regulated entity or threaten 
     to impair public confidence in the regulated entity. Upon 
     receipt of any such request, the Director shall fix a time 
     (not more than 30 days after receipt of such request, unless 
     extended at the request of such party) and place at which 
     such party may appear, personally or through counsel, before 
     one or more members of the Director or designated employees 
     of the Director to submit written materials (or, at the 
     discretion of the Director, oral testimony) and oral 
     argument. Within 60 days of such hearing, the Director shall 
     notify such party whether the suspension or prohibition from 
     participation in any manner in the conduct of the affairs of 
     the regulated entity will be continued, terminated, or 
     otherwise modified, or whether the order removing such party 
     from office or prohibiting such party from further 
     participation in any manner in the conduct of the affairs of 
     the regulated entity, and prohibiting compensation in 
     connection with termination will be rescinded or otherwise 
     modified. Such notification shall contain a statement of the 
     basis for the Director's decision, if adverse to such party. 
     The Director is authorized to prescribe such rules as may be 
     necessary to effectuate the purposes of this subsection.
       ``(i) Hearings and Judicial Review.--
       ``(1) Venue and procedure.--Any hearing provided for in 
     this section shall be held in the District of Columbia or in 
     the Federal judicial district in which the headquarters of 
     the regulated entity is located, unless the party afforded 
     the hearing consents to another place, and shall be conducted 
     in accordance with the provisions of chapter 5 of title 5, 
     United States Code. After such hearing, and within 90 days 
     after the Director has notified the parties that the case has 
     been submitted to it for final decision, it shall render its 
     decision (which shall include findings of fact upon which its 
     decision is predicated) and shall issue and serve upon each 
     party to the proceeding an order or orders consistent with 
     the provisions of this section. Judicial review of any such 
     order shall be exclusively as provided in this subsection. 
     Unless a petition for review is timely filed in a court of 
     appeals of the United States, as provided in paragraph (2), 
     and thereafter until the record in the proceeding has been 
     filed as so provided, the Director may at any time, upon such 
     notice and in such manner as it shall deem proper, modify, 
     terminate, or set aside any such order. Upon such filing of 
     the record, the Director may modify, terminate, or set aside 
     any such order with permission of the court.
       ``(2) Review of order.--Any party to any proceeding under 
     paragraph (1) may obtain a review of any order served 
     pursuant to paragraph (1) (other than an order issued with 
     the consent of the regulated entity or the regulated entity-
     affiliated party concerned, or an order issued under 
     subsection (h) of this section) by the filing in the United 
     States Court of Appeals for the District of Columbia Circuit 
     or court of appeals of the United States for the circuit in 
     which the headquarters of the regulated entity is located, 
     within 30 days after the date of service of such order, a 
     written petition praying that the order of the Director be 
     modified, terminated, or set aside. A copy of such petition 
     shall be forthwith transmitted by the clerk of the court to 
     the Director, and thereupon the Director shall file in the 
     court the record in the proceeding, as provided in section 
     2112 of title 28, United States Code. Upon the filing of such 
     petition, such court shall have jurisdiction, which upon the 
     filing of the record shall (except as provided in the last 
     sentence of paragraph (1)) be exclusive, to affirm, modify, 
     terminate, or set aside, in whole or in part, the order of 
     the Director. Review of such proceedings shall be had as 
     provided in chapter 7 of title 5, United States Code. The 
     judgment and decree of the court shall be final, except that 
     the same shall be subject to review by the Supreme Court upon 
     certiorari, as provided in section 1254 of title 28, United 
     States Code.
       ``(3) Proceedings not treated as stay.--The commencement of 
     proceedings for judicial review under paragraph (2) shall 
     not, unless specifically ordered by the court, operate as a 
     stay of any order issued by the Director.''.
       (b) Conforming Amendments.--
       (1) 1992 act.--Section 1317(f) of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4517(f)) is amended by 
     striking ``section 1379B'' and inserting ``section 1379D''.
       (2) Fannie mae charter act.--The second sentence of 
     subsection (b) of section 308 of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 
     amended by striking ``The'' and inserting ``Except to the 
     extent that action under section 1377 of the Housing and 
     Community Development Act of 1992 temporarily results in a 
     lesser number, the''.
       (3) Freddie mac act.--The second sentence of subparagraph 
     (A) of section 303(a)(2) of the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended by 
     striking ``The'' and inserting ``Except to the extent that 
     action under section 1377 of the Housing and Community 
     Development Act of 1992 temporarily results in a lesser 
     number, the''.

     SEC. 357. CRIMINAL PENALTY.

       Subtitle C of title XIII of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4631 et seq.) is amended 
     by inserting after section 1377 (as added by the preceding 
     provisions of this title) the following new section:

     ``SEC. 1378. CRIMINAL PENALTY.

       ``Whoever, being subject to an order in effect under 
     section 1377, without the prior written approval of the 
     Director, knowingly participates, directly or indirectly, in 
     any manner (including by engaging in an activity specifically 
     prohibited in such an order) in the conduct of the affairs of 
     any regulated entity shall be fined not more than $1,000,000, 
     imprisoned for not more than 5 years, or both.''.

     SEC. 358. SUBPOENA AUTHORITY.

       Section 1379D(c) of the Housing and Community Development 
     Act of 1992 (12 U.S.C. 4641(c)), as so redesignated by 
     section 356(a)(1) of this title, is further amended--
       (1) by striking ``request the Attorney General of the 
     United States to'' and inserting ``, in the discretion of the 
     Director,'';
       (2) by inserting ``or request that the Attorney General of 
     the United States bring such an action,'' after ``District of 
     Columbia,''; and
       (3) by striking ``or may, under the direction and control 
     of the Attorney General, bring such an action''.

     SEC. 359. CONFORMING AMENDMENTS.

       Subtitle C of title XIII of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4631 et seq.), as amended 
     by the preceding provisions of this title, is amended--
       (1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by striking 
     ``that enterprise'' and inserting ``that regulated entity'';
       (2) in section 1379 (12 U.S.C. 4637), as so redesignated by 
     section 356(a)(1) of this title--
       (A) by inserting ``, or of a regulated entity-affiliated 
     party,'' before ``shall not affect''; and
       (B) by striking ``such director or executive officer'' each 
     place such term appears and inserting ``such director, 
     executive officer, or regulated entity-affiliated party'';
       (3) in section 1379A (12 U.S.C. 4638), as so redesignated 
     by section 356(a)(1) of this title, by inserting ``or against 
     a regulated entity-affiliated party,'' before ``or impair'';
       (4) by striking ``An enterprise'' each place such term 
     appears in such subtitle and inserting ``A regulated 
     entity'';
       (5) by striking ``an enterprise'' each place such term 
     appears in such subtitle and inserting ``a regulated 
     entity'';
       (6) by striking ``the enterprise'' each place such term 
     appears in such subtitle and inserting ``the regulated 
     entity''; and
       (7) by striking ``any enterprise'' each place such term 
     appears in such subtitle and inserting ``any regulated 
     entity''.

                     CHAPTER 5--GENERAL PROVISIONS

     SEC. 361. BOARDS OF ENTERPRISES.

       (a) Fannie Mae.--
       (1) In general.--Section 308(b) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 
     amended--
       (A) in the first sentence, by striking ``eighteen persons, 
     five of whom shall be appointed annually by the President of 
     the United States, and the remainder of whom'' and inserting 
     ``13 persons, or such other number that the Director 
     determines appropriate, who'';
       (B) in the second sentence, by striking ``appointed by the 
     President'';
       (C) in the third sentence--
       (i) by striking ``appointed or''; and
       (ii) by striking ``, except that any such appointed member 
     may be removed from office by the President for good cause'';
       (D) in the fourth sentence, by striking ``elective''; and
       (E) by striking the fifth sentence.
       (2) Transitional provision.--The amendments made by 
     paragraph (1) shall not apply to any appointed position of 
     the board of directors of the Federal National Mortgage 
     Association until the expiration of the annual term for such 
     position during which the effective date under section 365 
     occurs.
       (b) Freddie Mac.--
       (1) In general.--Section 303(a)(2) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1452(a)(2)) is amended--
       (A) in subparagraph (A)--
       (i) in the first sentence, by striking ``18 persons, 5 of 
     whom shall be appointed annually by the President of the 
     United States and the remainder of whom'' and inserting ``13 
     persons, or such other number as the Director determines 
     appropriate, who''; and
       (ii) in the second sentence, by striking ``appointed by the 
     President of the United States'';

[[Page 8219]]

       (B) in subparagraph (B)--
       (i) by striking ``such or''; and
       (ii) by striking ``, except that any appointed member may 
     be removed from office by the President for good cause''; and
       (C) in subparagraph (C)--
       (i) by striking the first sentence; and
       (ii) by striking ``elective''.
       (2) Transitional provision.--The amendments made by 
     paragraph (1) shall not apply to any appointed position of 
     the board of directors of the Federal Home Loan Mortgage 
     Corporation until the expiration of the annual term for such 
     position during which the effective date under section 365 
     occurs.

     SEC. 362. REPORT ON PORTFOLIO OPERATIONS, SAFETY AND 
                   SOUNDNESS, AND MISSION OF ENTERPRISES.

       Not later than the expiration of the 12-month period 
     beginning on the effective date under section 365, the 
     Director of the Federal Housing Finance Agency shall submit a 
     report to the Congress which shall include--
       (1) a description of the portfolio holdings of the 
     enterprises (as such term is defined in section 1303 of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 
     4502) in mortgages (including whole loans and mortgage-backed 
     securities), non-mortgages, and other assets;
       (2) a description of the risk implications for the 
     enterprises of such holdings and the consequent risk 
     management undertaken by the enterprises (including the use 
     of derivatives for hedging purposes), compared with off-
     balance sheet liabilities of the enterprises (including 
     mortgage-backed securities guaranteed by the enterprises);
       (3) an analysis of portfolio holdings for safety and 
     soundness purposes;
       (4) an assessment of whether portfolio holdings fulfill the 
     mission purposes of the enterprises under the Federal 
     National Mortgage Association Charter Act and the Federal 
     Home Loan Mortgage Corporation Act; and
       (5) an analysis of the potential systemic risk implications 
     for the enterprises, the housing and capital markets, and the 
     financial system of portfolio holdings, and whether such 
     holdings should be limited or reduced over time.

     SEC. 363. CONFORMING AND TECHNICAL AMENDMENTS.

       (a) 1992 Act.--Title XIII of the Housing and Community 
     Development Act of 1992 is amended by striking section 1383 
     (12 U.S.C. 1451 note).
       (b) Title 18, United States Code.--Section 1905 of title 
     18, United States Code, is amended by striking ``Office of 
     Federal Housing Enterprise Oversight'' and inserting 
     ``Federal Housing Finance Agency''.
       (c) Flood Disaster Protection Act of 1973.--Section 
     102(f)(3)(A) of the Flood Disaster Protection Act of 1973 (42 
     U.S.C. 4012a(f)(3)(A)) is amended by striking ``Director of 
     the Office of Federal Housing Enterprise Oversight of the 
     Department of Housing and Urban Development'' and inserting 
     ``Director of the Federal Housing Finance Agency''.
       (d) Department of Housing and Urban Development Act.--
     Section 5 of the Department of Housing and Urban Development 
     Act (42 U.S.C. 3534) is amended by striking subsection (d).
       (e) Title 5, United States Code.--
       (1) Director's pay rate.--Section 5313 of title 5, United 
     States Code, is amended by striking the item relating to the 
     Director of the Office of Federal Housing Enterprise 
     Oversight, Department of Housing and Urban Development and 
     inserting the following new item:
       ``Director of the Federal Housing Finance Agency.''.
       (2) Exclusion from senior executive service.--Section 
     3132(a)(1)(D) of title 5, United States Code, is amended--
       (A) by striking ``the Federal Housing Finance Board,''; and
       (B) by striking ``the Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban 
     Development'' and inserting ``the Federal Housing Finance 
     Agency''.
       (f) Inspector General Act of 1978.--Section 8G(a)(2) of the 
     Inspector General Act of 1978 (5 U.S.C. App.) is amended by 
     striking ``Federal Housing Finance Board'' and inserting 
     ``Federal Housing Finance Agency''.
       (g) Federal Deposit Insurance Act.--Section 11(t)(2)(A) of 
     the Federal Deposit Insurance Act (12 U.S.C.1821(t)(2)(A)) is 
     amended by adding at the end the following new clause:
       ``(vii) The Federal Housing Finance Agency.''.
       (h) 1997 Emergency Supplemental Appropriations Act.--
     Section 10001 of the 1997 Emergency Supplemental 
     Appropriations Act for Recovery From Natural Disasters, and 
     for Overseas Peacekeeping Efforts, Including Those In Bosnia 
     (42 U.S.C. 3548) is amended--
       (1) by striking ``the Government National Mortgage 
     Association, and the Office of Federal Housing Enterprise 
     Oversight'' and inserting ``and the Government National 
     Mortgage Association''; and
       (2) by striking ``, the Government National Mortgage 
     Association, or the Office of Federal Housing Enterprise 
     Oversight'' and inserting ``or the Government National 
     Mortgage Association''.
       (i) National Homeownership Trust Act.--Section 302(b)(4) of 
     the Cranston-Gonzalez National Affordable Housing Act (42 
     U.S.C. 12851(b)(4)) is amended by striking ``the chairperson 
     of the Federal Housing Finance Board'' and inserting ``the 
     Director of the Federal Housing Finance Agency''.

     SEC. 364. STUDY OF ALTERNATIVE SECONDARY MARKET SYSTEMS.

       (a) In General.--The Director of the Federal Housing 
     Finance Agency, in consultation with the Board of Governors 
     of the Federal Reserve System, the Secretary of the Treasury, 
     and the Secretary of Housing and Urban Development, shall 
     conduct a comprehensive study of the effects on financial and 
     housing finance markets of alternatives to the current 
     secondary market system for housing finance, taking into 
     consideration changes in the structure of financial and 
     housing finance markets and institutions since the creation 
     of the Federal National Mortgage Association and the Federal 
     Home Loan Mortgage Corporation.
       (b) Contents.--The study under this section shall--
       (1) include, among the alternatives to the current 
     secondary market system analyzed--
       (A) repeal of the chartering Acts for the Federal National 
     Mortgage Association and the Federal Home Loan Mortgage 
     Corporation;
       (B) establishing bank-like mechanisms for granting new 
     charters for limited purposed mortgage securitization 
     entities;
       (C) permitting the Director of the Federal Housing Finance 
     Agency to grant new charters for limited purpose mortgage 
     securitization entities, which shall include analyzing the 
     terms on which such charters should be granted, including 
     whether such charters should be sold, or whether such 
     charters and the charters for the Federal National Mortgage 
     Association and the Federal Home Loan Mortgage Corporation 
     should be taxed or otherwise assessed a monetary price; and
       (D) such other alternatives as the Director considers 
     appropriate;
       (2) examine all of the issues involved in making the 
     transition to a completely private secondary mortgage market 
     system;
       (3) examine the technological advancements the private 
     sector has made in providing liquidity in the secondary 
     mortgage market and how such advancements have affected 
     liquidity in the secondary mortgage market; and
       (4) examine how taxpayers would be impacted by each 
     alternative system, including the complete privatization of 
     the Federal National Mortgage Association and the Federal 
     Home Loan Mortgage Corporation.
       (c) Report.--The Director of the Federal Housing Finance 
     Agency shall submit a report to the Congress on the study not 
     later than the expiration of the 24-month period beginning on 
     the effective date under section 365.

     SEC. 365. EFFECTIVE DATE.

       Except as specifically provided otherwise in this subtitle, 
     this subtitle shall take effect on and the amendments made by 
     this subtitle shall take effect on, and shall apply beginning 
     on, the expiration of the 6-month period beginning on the 
     date of the enactment of this Act.

                  Subtitle B--Federal Home Loan Banks

     SEC. 371. DEFINITIONS.

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

     SEC. 372. DIRECTORS.

       (a) Election.--Section 7 of the Federal Home Loan Bank Act 
     (12 U.S.C. 1427) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Number; Election; Qualifications; Conflicts of 
     Interest.--
       ``(1) In general.--The management of each Federal Home Loan 
     Bank shall be vested in a board of 13 directors, or such 
     other number as the Director determines appropriate, each of 
     whom shall be a citizen of the United States. All directors 
     of a Bank who are not independent directors pursuant to 
     paragraph (3) shall be elected by the members.
       ``(2) Member directors.--A majority of the directors of 
     each Bank shall be officers or directors of a member of such 
     Bank that is located in the district in which such Bank is 
     located.
       ``(3) Independent directors.--At least two-fifths of the 
     directors of each Bank shall be independent directors, who 
     shall be appointed by the Director of the Federal Housing 
     Finance Agency from a list of individuals recommended by the 
     Federal Housing Enterprise Board. The Federal Housing 
     Enterprise Board may recommend individuals who are identified 
     by the Board's own independent process or included on a list 
     of individuals recommended by the board of directors of

[[Page 8220]]

     the Bank involved, which shall be submitted to the Federal 
     Housing Enterprise Board by such board of directors. The 
     number of individuals on any such list submitted by a Bank's 
     board of directors shall be equal to at least two times the 
     number of independent directorships to be filled. All 
     independent directors appointed shall meet the following 
     criteria:
       ``(A) In general.--Each independent director shall be a 
     bona fide resident of the district in which such Bank is 
     located.
       ``(B) Public interest directors.--At least 2 of the 
     independent directors under this paragraph of each Bank shall 
     be representatives chosen from organizations with more than a 
     2-year history of representing consumer or community 
     interests on banking services, credit needs, housing, 
     community development, economic development, or financial 
     consumer protections.
       ``(C) Other directors.--
       ``(i) Qualifications.--Each independent director that is 
     not a public interest director under subparagraph (B) shall 
     have demonstrated knowledge of, or experience in, financial 
     management, auditing and accounting, risk management 
     practices, derivatives, project development, or 
     organizational management, or such other knowledge or 
     expertise as the Director may provide by regulation.
       ``(ii) Consultation with banks.--In appointing other 
     directors to serve on the board of a Federal home loan bank, 
     the Director of the Federal Housing Finance Agency may 
     consult with each Federal home loan bank about the knowledge, 
     skills, and expertise needed to assist the board in better 
     fulfilling its responsibilities.
       ``(D) Conflicts of interest.--Notwithstanding subsection 
     (f)(2), an independent director under this paragraph of a 
     Bank may not, during such director's term of office, serve as 
     an officer of any Federal Home Loan Bank or as a director or 
     officer of any member of a Bank.
       ``(E) Community demographics.--In appointing independent 
     directors of a Bank pursuant to this paragraph, the Director 
     shall take into consideration the demographic makeup of the 
     community most served by the Affordable Housing Program of 
     the Bank pursuant to section 10(j).'';
       (2) in the first sentence of subsection (b), by striking 
     ``elective directorship'' and inserting ``member directorship 
     established pursuant to subsection (a)(2)'';
       (3) in subsection (c)--
       (A) by striking ``elective'' each place such term appears 
     and inserting ``member'', except--
       (i) in the second sentence, the second place such term 
     appears; and
       (ii) each place such term appears in the fifth sentence;
       (B) in the first sentence, by inserting after ``less than 
     one'' the following: ``or two, as determined by the board of 
     directors of the appropriate Federal home loan bank,''; and
       (C) in the second sentence--
       (i) by inserting ``(A) except as provided in clause (B) of 
     this sentence,'' before ``if at any time''; and
       (ii) by inserting before the period at the end the 
     following: ``, and (B) clause (A) of this sentence shall not 
     apply to the directorships of any Federal home loan bank 
     resulting from the merger of any two or more such banks''; 
     and
       (4) by striking ``elective'' each place such term appears 
     (except in subsections (c), (e), and (f)).
       (b) Terms.--
       (1) In general.--Section 7(d) of the Federal Home Loan Bank 
     Act (12 U.S.C. 1427(d)) is amended--
       (A) in the first sentence, by striking ``3 years'' and 
     inserting ``4 years''; and
       (B) in the second sentence--
       (i) by striking ``Federal Home Loan Bank System 
     Modernization Act of 1999'' and inserting ``Federal Housing 
     Finance Reform Act of 2008''; and
       (ii) by striking ``1/3'' and inserting ``1/4''.
       (2) Savings provision.--The amendments made by paragraph 
     (1) shall not apply to the term of office of any director of 
     a Federal home loan bank who is serving as of the effective 
     date of this subtitle under section 381, including any 
     director elected to fill a vacancy in any such office.
       (c) Continued Service of Independent Directors After 
     Expiration of Term.--Section 7(f)(2) of the Federal Home Loan 
     Bank Act (12 U.S.C. 1427(f)(2)) is amended--
       (1) in the second sentence, by striking ``or the term of 
     such office expires, whichever occurs first'';
       (2) by adding at the end the following new sentence: ``An 
     independent Bank director may continue to serve as a director 
     after the expiration of the term of such director until a 
     successor is appointed.'';
       (3) in the paragraph heading, by striking ``Appointed'' and 
     inserting ``Independent''; and
       (4) by striking ``appointive'' each place such term appears 
     and inserting ``independent''.
       (d) Conforming Amendments.--Section 7(f)(3) of the Federal 
     Home Loan Bank Act (12 U.S.C. 1427(f)(3)) is amended--
       (1) in the paragraph heading, by striking ``Elected'' and 
     inserting ``Member''; and
       (2) by striking ``elective'' each place such term appears 
     in the first and third sentences and inserting ``member''.
       (e) Compensation.--Subsection (i) of section 7 of the 
     Federal Home Loan Bank Act (12 U.S.C. 1427(i)) is amended to 
     read as follows:
       ``(i) Directors' Compensation.--
       ``(1) In general.--Each Federal home loan bank may pay the 
     directors on the board of directors for the bank reasonable 
     and appropriate compensation for the time required of such 
     directors, and reasonable and appropriate expenses incurred 
     by such directors, in connection with service on the board of 
     directors, in accordance with resolutions adopted by the 
     board of directors and subject to the approval of the 
     Director.
       ``(2) Annual report by the board.--The Director shall 
     include, in the annual report submitted to the Congress 
     pursuant to section 1319B of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992, information 
     regarding the compensation and expenses paid by the Federal 
     home loan banks to the directors on the boards of directors 
     of the banks.''.
       (f) Transition Rule.--Any member of the board of directors 
     of a Federal Home Loan Bank serving as of the effective date 
     under section 381 may continue to serve as a member of such 
     board of directors for the remainder of the term of such 
     office as provided in section 7 of the Federal Home Loan Bank 
     Act, as in effect before such effective date.

     SEC. 373. FEDERAL HOUSING FINANCE AGENCY OVERSIGHT OF FEDERAL 
                   HOME LOAN BANKS.

       The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), 
     other than in provisions of that Act added or amended 
     otherwise by this title, is amended--
       (1) by striking sections 2A and 2B (12 U.S.C. 1422a, 
     1422b);
       (2) in section 6 (12 U.S.C. 1426(b)(1))--
       (A) in subsection (b)(1), in the matter preceding 
     subparagraph (A), by striking ``Finance Board approval'' and 
     inserting ``approval by the Director''; and
       (B) in each of subsections (c)(4)(B) and (d)(2), by 
     striking ``Finance Board regulations'' each place that term 
     appears and inserting ``regulations of the Director'';
       (3) in section 8 (12 U.S.C. 1428), in the section heading, 
     by striking ``by the board'';
       (4) in section 10(b) (12 U.S.C. 1430(b)), by striking ``by 
     formal resolution'';
       (5) in section 10 (12 U.S.C. 1430), by adding at the end 
     the following new subsection:
       ``(k) Monitoring and Enforcing Compliance With Affordable 
     Housing and Community Investment Program Requirements.--The 
     requirements under subsection (i) and (j) that the Banks 
     establish Community Investment and Affordable Housing 
     Programs, respectively, and contribute to the Affordable 
     Housing Program, shall be enforceable by the Director with 
     respect to the Banks in the same manner and to the same 
     extent as the housing goals under subpart B of part 2 of 
     subtitle A of title XIII of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4561 et seq.) are 
     enforceable under section 1336 of such Act with respect to 
     the Federal National Mortgage Association and the Federal 
     Home Loan Mortgage Corporation.'';
       (6) in section 11 (12 U.S.C. 1431)--
       (A) in subsection (b)--
       (i) in the first sentence--

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

       (ii) in the second and fourth sentences, by striking ``the 
     Board'' each place such term appears and inserting ``the 
     Office of Finance'';
       (B) in subsection (c)--
       (i) by striking ``the Board'' the first place such term 
     appears and inserting ``the Office of Finance, as agent for 
     the Banks,''; and
       (ii) by striking ``the Board'' the second place such term 
     appears and inserting ``such Office''; and
       (C) in subsection (f)--
       (i) by striking the two commas after ``permit'' and 
     inserting ``or''; and
       (ii) by striking the comma after ``require'';
       (7) in section 15 (12 U.S.C. 1435), by inserting ``or the 
     Director'' after ``the Board'';
       (8) in section 18 (12 U.S.C. 1438), by striking subsection 
     (b);
       (9) in section 21 (12 U.S.C. 1441)--
       (A) in subsection (b)--
       (i) in paragraph (5), by striking ``Chairperson of the 
     Federal Housing Finance Board'' and inserting ``Director''; 
     and
       (ii) in the heading for paragraph (8), by striking 
     ``federal housing finance board'' and inserting ``director''; 
     and
       (B) in subsection (i), in the heading for paragraph (2), by 
     striking ``Federal housing finance board'' and inserting 
     ``Director'';
       (10) in section 23 (12 U.S.C. 1443), by striking ``Board of 
     Directors of the Federal Housing Finance Board'' and 
     inserting ``Director'';
       (11) by striking ``the Board'' each place such term appears 
     in such Act (except in section 15 (12 U.S.C. 1435), section 
     21(f)(2) (12 U.S.C. 1441(f)(2)), subsections (a), 
     (k)(2)(B)(i), and (n)(6)(C)(ii) of section 21A (12 U.S.C. 
     1441a), subsections (f)(2)(C), and (k)(7)(B)(ii) of section 
     21B (12 U.S.C. 1441b), and the first two places such term 
     appears in section 22 (12 U.S.C. 1442)) and inserting ``the 
     Director'';

[[Page 8221]]

       (12) by striking ``The Board'' each place such term appears 
     in such Act (except in sections 7(e) (12 U.S.C. 1427(e)), and 
     11(b) (12 U.S.C. 1431(b)) and inserting ``The Director'';
       (13) by striking ``the Board's'' each place such term 
     appears in such Act and inserting ``the Director's'';
       (14) by striking ``The Board's'' each place such term 
     appears in such Act and inserting ``The Director's'';
       (15) by striking ``the Finance Board'' each place such term 
     appears in such Act and inserting ``the Director'';
       (16) by striking ``Federal Housing Finance Board'' each 
     place such term appears and inserting ``Director'';
       (17) in section 11(i) (12 U.S.C. 1431(i), by striking ``the 
     Chairperson of''; and
       (18) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), by 
     striking ``Chairperson of the''.

     SEC. 374. JOINT ACTIVITIES OF BANKS.

       Section 11 of the Federal Home Loan Bank Act (12 U.S.C. 
     1431) is amended by adding at the end the following new 
     subsection:
       ``(l) Joint Activities.--Subject to the regulation of the 
     Director, any two or more Federal Home Loan Banks may 
     establish a joint office for the purpose of performing 
     functions for, or providing services to, the Banks on a 
     common or collective basis, or may require that the Office of 
     Finance perform such functions or services, but only if the 
     Banks are otherwise authorized to perform such functions or 
     services individually.''.

     SEC. 375. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN 
                   BANKS.

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

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

       ``(a) Regulatory Authority.--The Director shall prescribe 
     such regulations as may be necessary to ensure that each 
     Federal Home Loan Bank has access to information that the 
     Bank needs to determine the nature and extent of its joint 
     and several liability.
       ``(b) No Waiver of Privilege.--The Director shall not be 
     deemed to have waived any privilege applicable to any 
     information concerning a Federal Home Loan Bank by 
     transferring, or permitting the transfer of, that information 
     to any other Federal Home Loan Bank for the purpose of 
     enabling the recipient to evaluate the nature and extent of 
     its joint and several liability.''.
       (b) Regulations.--The regulations required under the 
     amendment made by subsection (a) shall be issued in final 
     form not later than 6 months after the effective date under 
     section 381 of this title.

     SEC. 376. REORGANIZATION OF BANKS AND VOLUNTARY MERGER.

       Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 
     1446) is amended--
       (1) by inserting ``(a) Reorganization.--'' before 
     ``Whenever''; and
       (2) by striking ``liquidated or'' each place such phrase 
     appears;
       (3) by striking ``liquidation or''; and
       (4) by adding at the end the following new subsection:
       ``(b) Voluntary Mergers.--Any two or more Banks may, with 
     the approval of the Director, and the approval of the boards 
     of directors of the Banks involved, merge. The Director shall 
     promulgate regulations establishing the conditions and 
     procedures for the consideration and approval of any such 
     voluntary merger, including the procedures for Bank member 
     approval.''.

     SEC. 377. SECURITIES AND EXCHANGE COMMISSION DISCLOSURE.

       (a) In General.--The Federal Home Loan Banks shall be 
     exempt from compliance with--
       (1) sections 13(e), 14(a), 14(c), and 17A of the Securities 
     Exchange Act of 1934 and related Commission regulations; and
       (2) section 15 of that Act and related Securities and 
     Exchange Commission regulations with respect to transactions 
     in capital stock of the Banks.
       (b) Member Exemption.--The members of the Federal Home Loan 
     Banks shall be exempt from compliance with sections 13(d), 
     13(f), 13(g), 14(d), and 16 of the Securities Exchange Act of 
     1934 and related Securities and Exchange Commission 
     regulations with respect to their ownership of, or 
     transactions in, capital stock of the Federal Home Loan 
     Banks.
       (c) Exempted and Government Securities.--
       (1) Capital stock.--The capital stock issued by each of the 
     Federal Home Loan Banks under section 6 of the Federal Home 
     Loan Bank Act are--
       (A) exempted securities within the meaning of section 
     3(a)(2) of the Securities Act of 1933; and
       (B) ``exempted securities'' within the meaning of section 
     3(a)(12)(A) of the Securities Exchange Act of 1934.
       (2) Other obligations.--The debentures, bonds, and other 
     obligations issued under section 11 of the Federal Home Loan 
     Bank Act are--
       (A) exempted securities within the meaning of section 
     3(a)(2) of the Securities Act of 1933;
       (B) ``government securities'' within the meaning of section 
     3(a)(42) of the Securities Exchange Act of 1934;
       (C) excluded from the definition of ``government securities 
     broker'' within section 3(a)(43) of the Securities Exchange 
     Act of 1934;
       (D) excluded from the definition of ``government securities 
     dealer'' within section 3(a)(44) of the Securities Exchange 
     Act of 1934; and
       (E) ``government securities'' within the meaning of section 
     2(a)(16) of the Investment Company Act of 1940.
       (d) Exemption From Reporting Requirements.--The Federal 
     Home Loan Banks shall be exempt from periodic reporting 
     requirements pertaining to--
       (1) the disclosure of related party transactions that occur 
     in the ordinary course of business of the Banks with their 
     members; and
       (2) the disclosure of unregistered sales of equity 
     securities.
       (e) Tender Offers.--The Securities and Exchange 
     Commission's rules relating to tender offers shall not apply 
     in connection with transactions in capital stock of the 
     Federal Home Loan Banks.
       (f) Regulations.--In issuing any final regulations to 
     implement provisions of this section, the Securities and 
     Exchange Commission shall consider the distinctive 
     characteristics of the Federal Home Loan Banks when 
     evaluating the accounting treatment with respect to the 
     payment to Resolution Funding Corporation, the role of the 
     combined financial statements of the twelve Banks, the 
     accounting classification of redeemable capital stock, and 
     the accounting treatment related to the joint and several 
     nature of the obligations of the Banks.

     SEC. 378. COMMUNITY FINANCIAL INSTITUTION MEMBERS.

       (a) Total Asset Requirement.--Paragraph (10) of section 2 
     of the Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so 
     redesignated by section 371(3) of this title, is amended by 
     striking ``$500,000,000'' each place such term appears and 
     inserting ``$1,000,000,000''.
       (b) Use of Advances for Community Development Activities.--
     Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C. 
     1430(a)) is amended--
       (1) in paragraph (2)(B)--
       (A) by striking ``and''; and
       (B) by inserting ``, and community development activities'' 
     before the period at the end;
       (2) in paragraph (3)(E), by inserting ``or community 
     development activities'' after ``agriculture,''; and
       (3) in paragraph (6)--
       (A) by striking ``and''; and
       (B) by inserting ``, and `community development activities' 
     '' before ``shall''.

     SEC. 379. TECHNICAL AND CONFORMING AMENDMENTS.

       (a) Right to Financial Privacy Act of 1978.--Section 
     1113(o) of the Right to Financial Privacy Act of 1978 (12 
     U.S.C. 3413(o)) is amended--
       (1) by striking ``Federal Housing Finance Board'' and 
     inserting ``Federal Housing Finance Agency''; and
       (2) by striking ``Federal Housing Finance Board's'' and 
     inserting ``Federal Housing Finance Agency's''.
       (b) Riegle Community Development and Regulatory Improvement 
     Act of 1994.--Section 117(e) of the Riegle Community 
     Development and Regulatory Improvement Act of 1994 (12 U.S.C. 
     4716(e)) is amended by striking ``Federal Housing Finance 
     Board'' and inserting ``Federal Housing Finance Agency''.
       (c) Title 18, United States Code.--Title 18, United States 
     Code, is amended by striking ``Federal Housing Finance 
     Board'' each place such term appears in each of sections 212, 
     657, 1006, 1014, and inserting ``Federal Housing Finance 
     Agency''.
       (d) MAHRA Act of 1997.--Section 517(b)(4) of the 
     Multifamily Assisted Housing Reform and Affordability Act of 
     1997 (42 U.S.C. 1437f note) is amended by striking ``Federal 
     Housing Finance Board'' and inserting ``Federal Housing 
     Finance Agency''.
       (e) Title 44, United States Code.--Section 3502(5) of title 
     44, United States Code, is amended by striking ``Federal 
     Housing Finance Board'' and inserting ``Federal Housing 
     Finance Agency''.
       (f) Access to Local TV Act of 2000.--Section 
     1004(d)(2)(D)(iii) of the Launching Our Communities' Access 
     to Local Television Act of 2000 (47 U.S.C. 
     1103(d)(2)(D)(iii)) is amended by striking ``Office of 
     Federal Housing Enterprise Oversight, the Federal Housing 
     Finance Board'' and inserting ``Federal Housing Finance 
     Agency''.
       (g) Sarbanes-Oxley Act of 2002.--Section 
     105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 2002 (15 
     U.S.C. 7215(B)(5)(b)(ii)(II)) is amended by inserting ``and 
     the Director of the Federal Housing Finance Agency'' after 
     ``Commission,''.

     SEC. 380. STUDY OF AFFORDABLE HOUSING PROGRAM USE FOR LONG-
                   TERM CARE FACILITIES.

       The Comptroller General shall conduct a study of the use of 
     affordable housing programs of the Federal home loan banks 
     under section 10(j) of the Federal Home Loan Bank Act to 
     determine how and the extent to which such programs are used 
     to assist long-term care facilities for low- and moderate-
     income individuals, and the effectiveness and adequacy of 
     such assistance in meeting the needs of affected communities. 
     The study

[[Page 8222]]

     shall examine the applicability of such use to the affordable 
     housing fund required to be established by the Director of 
     the Federal Housing Finance Agency pursuant to the amendment 
     made by section 340 of this title. The Comptroller General 
     shall submit a report to the Director of the Federal Housing 
     Finance Agency and the Congress regarding the results of the 
     study not later than the expiration of the 1-year period 
     beginning on the date of the enactment of this Act. This 
     section shall take effect on the date of the enactment of 
     this Act.

     SEC. 381. EFFECTIVE DATE.

       Except as specifically provided otherwise in this subtitle, 
     this subtitle shall take effect on and the amendments made by 
     this subtitle shall take effect on, and shall apply beginning 
     on, the expiration of the 6-month period beginning on the 
     date of the enactment of this Act.

Subtitle C--Transfer of Functions, Personnel, and Property of Office of 
 Federal Housing Enterprise Oversight, Federal Housing Finance Board, 
            and Department of Housing and Urban Development

       CHAPTER 1--OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT

     SEC. 385. ABOLISHMENT OF OFHEO.

       (a) In General.--Effective at the end of the 6-month period 
     beginning on the date of the enactment of this Act, the 
     Office of Federal Housing Enterprise Oversight of the 
     Department of Housing and Urban Development and the positions 
     of the Director and Deputy Director of such Office are 
     abolished.
       (b) Disposition of Affairs.--During the 6-month period 
     beginning on the date of the enactment of this Act, the 
     Director of the Office of Federal Housing Enterprise 
     Oversight shall, for the purpose of winding up the affairs of 
     the Office of Federal Housing Enterprise Oversight and in 
     addition to carrying out its other responsibilities under 
     law--
       (1) manage the employees of such Office and provide for the 
     payment of the compensation and benefits of any such employee 
     which accrue before the effective date of the transfer of 
     such employee pursuant to section 387; and
       (2) may take any other action necessary for the purpose of 
     winding up the affairs of the Office.
       (c) Status of Employees Before Transfer.--The amendments 
     made by subtitle A and the abolishment of the Office of 
     Federal Housing Enterprise Oversight under subsection (a) of 
     this section may not be construed to affect the status of any 
     employee of such Office as employees of an agency of the 
     United States for purposes of any other provision of law 
     before the effective date of the transfer of any such 
     employee pursuant to section 387.
       (d) Use of Property and Services.--
       (1) Property.--The Director of the Federal Housing Finance 
     Agency may use the property of the Office of Federal Housing 
     Enterprise Oversight to perform functions which have been 
     transferred to the Director of the Federal Housing Finance 
     Agency for such time as is reasonable to facilitate the 
     orderly transfer of functions transferred pursuant to any 
     other provision of this title or any amendment made by this 
     title to any other provision of law.
       (2) Agency services.--Any agency, department, or other 
     instrumentality of the United States, and any successor to 
     any such agency, department, or instrumentality, which was 
     providing supporting services to the Office of Federal 
     Housing Enterprise Oversight before the expiration of the 
     period under subsection (a) in connection with functions that 
     are transferred to the Director of the Federal Housing 
     Finance Agency shall--
       (A) continue to provide such services, on a reimbursable 
     basis, until the transfer of such functions is complete; and
       (B) consult with any such agency to coordinate and 
     facilitate a prompt and reasonable transition.
       (e) Savings Provisions.--
       (1) Existing rights, duties, and obligations not 
     affected.--Subsection (a) shall not affect the validity of 
     any right, duty, or obligation of the United States, the 
     Director of the Office of Federal Housing Enterprise 
     Oversight, or any other person, which--
       (A) arises under or pursuant to the title XIII of the 
     Housing and Community Development Act of 1992, the Federal 
     National Mortgage Association Charter Act, the Federal Home 
     Loan Mortgage Corporation Act, or any other provision of law 
     applicable with respect to such Office; and
       (B) existed on the day before the abolishment under 
     subsection (a) of this section.
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Director of the Office of Federal 
     Housing Enterprise Oversight in connection with functions 
     that are transferred to the Director of the Federal Housing 
     Finance Agency shall abate by reason of the enactment of this 
     title, except that the Director of the Federal Housing 
     Finance Agency shall be substituted for the Director of the 
     Office of Federal Housing Enterprise Oversight as a party to 
     any such action or proceeding.

     SEC. 386. CONTINUATION AND COORDINATION OF CERTAIN 
                   REGULATIONS.

       All regulations, orders, determinations, and resolutions 
     that--
       (1) were issued, made, prescribed, or allowed to become 
     effective by--
       (A) the Office of Federal Housing Enterprise Oversight; or
       (B) a court of competent jurisdiction and that relate to 
     functions transferred by this chapter; and
       (2) are in effect on the date of the abolishment under 
     section 385(a) of this title, shall remain in effect 
     according to the terms of such regulations, orders, 
     determinations, and resolutions, and shall be enforceable by 
     or against the Director of the Federal Housing Finance Agency 
     until modified, terminated, set aside, or superseded in 
     accordance with applicable law by such Director, as the case 
     may be, any court of competent jurisdiction, or operation of 
     law.

     SEC. 387. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

       (a) Transfer.--Each employee of the Office of Federal 
     Housing Enterprise Oversight shall be transferred to the 
     Federal Housing Finance Agency for employment no later than 
     the date of the abolishment under section 385(a) of this 
     title and such transfer shall be deemed a transfer of 
     function for purposes of section 3503 of title 5, United 
     States Code.
       (b) Guaranteed Positions.--Each employee transferred under 
     subsection (a) shall be guaranteed a position with the same 
     status, tenure, grade, and pay as that held on the day 
     immediately preceding the transfer. Each such employee 
     holding a permanent position shall not be involuntarily 
     separated or reduced in grade or compensation for 12 months 
     after the date of transfer, except for cause or, if the 
     employee is a temporary employee, separated in accordance 
     with the terms of the appointment.
       (c) Appointment Authority for Excepted Service Employees.--
       (1) In general.--In the case of employees occupying 
     positions in the excepted service, any appointment authority 
     established pursuant to law or regulations of the Office of 
     Personnel Management for filling such positions shall be 
     transferred, subject to paragraph (2).
       (2) Decline of transfer.--The Director of the Federal 
     Housing Finance Agency may decline a transfer of authority 
     under paragraph (1) (and the employees appointed pursuant 
     thereto) to the extent that such authority relates to 
     positions excepted from the competitive service because of 
     their confidential, policy-making, policy-determining, or 
     policy-advocating character.
       (d) Reorganization.--If the Director of the Federal Housing 
     Finance Agency determines, after the end of the 1-year period 
     beginning on the date of the abolishment under section 
     385(a), that a reorganization of the combined work force is 
     required, that reorganization shall be deemed a major 
     reorganization for purposes of affording affected employees 
     retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 
     5, United States Code.
       (e) Employee Benefit Programs.--Any employee of the Office 
     of Federal Housing Enterprise Oversight accepting employment 
     with the Director of the Federal Housing Finance Agency as a 
     result of a transfer under subsection (a) may retain for 12 
     months after the date such transfer occurs membership in any 
     employee benefit program of the Federal Housing Finance 
     Agency or the Office of Federal Housing Enterprise Oversight, 
     as applicable, including insurance, to which such employee 
     belongs on the date of the abolishment under section 385(a) 
     if--
       (1) the employee does not elect to give up the benefit or 
     membership in the program; and
       (2) the benefit or program is continued by the Director of 
     the Federal Housing Finance Agency,
     The difference in the costs between the benefits which would 
     have been provided by such agency and those provided by this 
     section shall be paid by the Director of the Federal Housing 
     Finance Agency. If any employee elects to give up membership 
     in a health insurance program or the health insurance program 
     is not continued by such Director, the employee shall be 
     permitted to select an alternate Federal health insurance 
     program within 30 days of such election or notice, without 
     regard to any other regularly scheduled open season.

     SEC. 388. TRANSFER OF PROPERTY AND FACILITIES.

       Upon the abolishment under section 385(a), all property of 
     the Office of Federal Housing Enterprise Oversight shall 
     transfer to the Director of the Federal Housing Finance 
     Agency.

                CHAPTER 2--FEDERAL HOUSING FINANCE BOARD

     SEC. 391. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.

       (a) In General.--Effective at the end of the 6-month period 
     beginning on the date of enactment of this Act, the Federal 
     Housing Finance Board (in this subtitle referred to as the 
     ``Board'') is abolished.
       (b) Disposition of Affairs.--During the 6-month period 
     beginning on the date of enactment of this Act, the Board, 
     for the purpose of winding up the affairs of the Board and in 
     addition to carrying out its other responsibilities under 
     law--
       (1) shall manage the employees of such Board and provide 
     for the payment of the compensation and benefits of any such 
     employee which accrue before the effective date

[[Page 8223]]

     of the transfer of such employee under section 393; and
       (2) may take any other action necessary for the purpose of 
     winding up the affairs of the Board.
       (c) Status of Employees Before Transfer.--The amendments 
     made by subtitles A and B and the abolishment of the Board 
     under subsection (a) may not be construed to affect the 
     status of any employee of such Board as employees of an 
     agency of the United States for purposes of any other 
     provision of law before the effective date of the transfer of 
     any such employee under section 393.
       (d) Use of Property and Services.--
       (1) Property.--The Director of the Federal Housing Finance 
     Agency may use the property of the Board to perform functions 
     which have been transferred to the Director of the Federal 
     Housing Finance Agency for such time as is reasonable to 
     facilitate the orderly transfer of functions transferred 
     under any other provision of this title or any amendment made 
     by this title to any other provision of law.
       (2) Agency services.--Any agency, department, or other 
     instrumentality of the United States, and any successor to 
     any such agency, department, or instrumentality, which was 
     providing supporting services to the Board before the 
     expiration of the period under subsection (a) in connection 
     with functions that are transferred to the Director of the 
     Federal Housing Finance Agency shall--
       (A) continue to provide such services, on a reimbursable 
     basis, until the transfer of such functions is complete; and
       (B) consult with any such agency to coordinate and 
     facilitate a prompt and reasonable transition.
       (e) Savings Provisions.--
       (1) Existing rights, duties, and obligations not 
     affected.--Subsection (a) shall not affect the validity of 
     any right, duty, or obligation of the United States, a member 
     of the Board, or any other person, which--
       (A) arises under the Federal Home Loan Bank Act or any 
     other provision of law applicable with respect to such Board; 
     and
       (B) existed on the day before the effective date of the 
     abolishment under subsection (a).
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Board in connection with 
     functions that are transferred to the Director of the Federal 
     Housing Finance Agency shall abate by reason of the enactment 
     of this title, except that the Director of the Federal 
     Housing Finance Agency shall be substituted for the Board or 
     any member thereof as a party to any such action or 
     proceeding.

     SEC. 392. CONTINUATION AND COORDINATION OF CERTAIN 
                   REGULATIONS.

       (a) In General.--All regulations, orders, determinations, 
     and resolutions described under subsection (b) shall remain 
     in effect according to the terms of such regulations, orders, 
     determinations, and resolutions, and shall be enforceable by 
     or against the Director of the Federal Housing Finance Agency 
     until modified, terminated, set aside, or superseded in 
     accordance with applicable law by such Director, any court of 
     competent jurisdiction, or operation of law.
       (b) Applicability.--A regulation, order, determination, or 
     resolution is described under this subsection if it--
       (1) was issued, made, prescribed, or allowed to become 
     effective by--
       (A) the Board; or
       (B) a court of competent jurisdiction and relates to 
     functions transferred by this chapter; and
       (2) is in effect on the effective date of the abolishment 
     under section 391(a).

     SEC. 393. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL 
                   HOUSING FINANCE BOARD.

       (a) Transfer.--Each employee of the Board shall be 
     transferred to the Federal Housing Finance Agency for 
     employment not later than the effective date of the 
     abolishment under section 391(a), and such transfer shall be 
     deemed a transfer of function for purposes of section 3503 of 
     title 5, United States Code.
       (b) Guaranteed Positions.--Each employee transferred under 
     subsection (a) shall be guaranteed a position with the same 
     status, tenure, grade, and pay as that held on the day 
     immediately preceding the transfer. Each such employee 
     holding a permanent position shall not be involuntarily 
     separated or reduced in grade or compensation for 12 months 
     after the date of transfer, except for cause or, if the 
     employee is a temporary employee, separated in accordance 
     with the terms of the appointment.
       (c) Appointment Authority for Excepted and Senior Executive 
     Service Employees.--
       (1) In general.--In the case of employees occupying 
     positions in the excepted service or the Senior Executive 
     Service, any appointment authority established under law or 
     by regulations of the Office of Personnel Management for 
     filling such positions shall be transferred, subject to 
     paragraph (2).
       (2) Decline of transfer.--The Director of the Federal 
     Housing Finance Agency may decline a transfer of authority 
     under paragraph (1) to the extent that such authority relates 
     to positions excepted from the competitive service because of 
     their confidential, policymaking, policy-determining, or 
     policy-advocating character, and noncareer positions in the 
     Senior Executive Service (within the meaning of section 
     3132(a)(7) of title 5, United States Code).
       (d) Reorganization.--If the Director of the Federal Housing 
     Finance Agency determines, after the end of the 1-year period 
     beginning on the effective date of the abolishment under 
     section 391(a), that a reorganization of the combined 
     workforce is required, that reorganization shall be deemed a 
     major reorganization for purposes of affording affected 
     employees retirement under section 8336(d)(2) or 
     8414(b)(1)(B) of title 5, United States Code.
       (e) Employee Benefit Programs.--
       (1) In general.--Any employee of the Board accepting 
     employment with the Federal Housing Finance Agency as a 
     result of a transfer under subsection (a) may retain for 12 
     months after the date on which such transfer occurs 
     membership in any employee benefit program of the Federal 
     Housing Finance Agency or the Board, as applicable, including 
     insurance, to which such employee belongs on the effective 
     date of the abolishment under section 391(a) if--
       (A) the employee does not elect to give up the benefit or 
     membership in the program; and
       (B) the benefit or program is continued by the Director of 
     the Federal Housing Finance Agency.
       (2) Cost differential.--The difference in the costs between 
     the benefits which would have been provided by the Board and 
     those provided by this section shall be paid by the Director 
     of the Federal Housing Finance Agency. If any employee elects 
     to give up membership in a health insurance program or the 
     health insurance program is not continued by such Director, 
     the employee shall be permitted to select an alternate 
     Federal health insurance program within 30 days after such 
     election or notice, without regard to any other regularly 
     scheduled open season.

     SEC. 394. TRANSFER OF PROPERTY AND FACILITIES.

       Upon the effective date of the abolishment under section 
     391(a), all property of the Board shall transfer to the 
     Director of the Federal Housing Finance Agency.

         CHAPTER 3--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

     SEC. 395. TERMINATION OF ENTERPRISE-RELATED FUNCTIONS.

       (a) Termination Date.--For purposes of this chapter, the 
     term ``termination date'' means the date that occurs 6 months 
     after the date of the enactment of this Act.
       (b) Determination of Transferred Functions and Employees.--
       (1) In general.--Not later than the expiration of the 3-
     month period beginning on the date of the enactment of this 
     Act, the Secretary, in consultation with the Director of the 
     Office of Federal Housing Enterprise Oversight, shall 
     determine--
       (A) the functions, duties, and activities of the Secretary 
     of Housing and Urban Development regarding oversight or 
     regulation of the enterprises under or pursuant to the 
     authorizing statutes, title XIII of the Housing and Community 
     Development Act of 1992, and any other provisions of law, as 
     in effect before the date of the enactment of this Act, but 
     not including any such functions, duties, and activities of 
     the Director of the Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban Development 
     and such Office; and
       (B) the employees of the Department of Housing and Urban 
     Development necessary to perform such functions, duties, and 
     activities.
       (2) Enterprise-related functions.--For purposes of this 
     chapter, the term ``enterprise-related functions of the 
     Department'' means the functions, duties, and activities of 
     the Department of Housing and Urban Development determined 
     under paragraph (1)(A).
       (3) Enterprise-related employees.--For purposes of this 
     chapter, the term ``enterprise-related employees of the 
     Department'' means the employees of the Department of Housing 
     and Urban Development determined under paragraph (1)(B).
       (c) Disposition of Affairs.--During the 6-month period 
     beginning on the date of enactment of this Act, the Secretary 
     of Housing and Urban Development (in this subtitle referred 
     to as the ``Secretary''), for the purpose of winding up the 
     affairs of the Secretary regarding the enterprise-related 
     functions of the Department of Housing and Urban Development 
     (in this subtitle referred to as the ``Department'') and in 
     addition to carrying out the Secretary's other 
     responsibilities under law regarding such functions--
       (1) shall manage the enterprise-related employees of the 
     Department and provide for the payment of the compensation 
     and benefits of any such employee which accrue before the 
     effective date of the transfer of any such employee under 
     section 397; and
       (2) may take any other action necessary for the purpose of 
     winding up the enterprise-related functions of the 
     Department.
       (d) Status of Employees Before Transfer.--The amendments 
     made by subtitles A and B and the termination of the 
     enterprise-related functions of the Department under 
     subsection (b) may not be construed to affect the status of 
     any employee of the Department as employees of an agency of 
     the

[[Page 8224]]

     United States for purposes of any other provision of law 
     before the effective date of the transfer of any such 
     employee under section 397.
       (e) Use of Property and Services.--
       (1) Property.--The Director of the Federal Housing Finance 
     Agency may use the property of the Secretary to perform 
     functions which have been transferred to the Director of the 
     Federal Housing Finance Agency for such time as is reasonable 
     to facilitate the orderly transfer of functions transferred 
     under any other provision of this title or any amendment made 
     by this title to any other provision of law.
       (2) Agency services.--Any agency, department, or other 
     instrumentality of the United States, and any successor to 
     any such agency, department, or instrumentality, which was 
     providing supporting services to the Secretary regarding 
     enterprise-related functions of the Department before the 
     termination date under subsection (a) in connection with such 
     functions that are transferred to the Director of the Federal 
     Housing Finance Agency shall--
       (A) continue to provide such services, on a reimbursable 
     basis, until the transfer of such functions is complete; and
       (B) consult with any such agency to coordinate and 
     facilitate a prompt and reasonable transition.
       (f) Savings Provisions.--
       (1) Existing rights, duties, and obligations not 
     affected.--Subsection (a) shall not affect the validity of 
     any right, duty, or obligation of the United States, the 
     Secretary, or any other person, which--
       (A) arises under the authorizing statutes, title XIII of 
     the Housing and Community Development Act of 1992, or any 
     other provision of law applicable with respect to the 
     Secretary, in connection with the enterprise-related 
     functions of the Department; and
       (B) existed on the day before the termination date under 
     subsection (a).
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Secretary in connection with the 
     enterprise-related functions of the Department shall abate by 
     reason of the enactment of this title, except that the 
     Director of the Federal Housing Finance Agency shall be 
     substituted for the Secretary or any member thereof as a 
     party to any such action or proceeding.

     SEC. 396. CONTINUATION AND COORDINATION OF CERTAIN 
                   REGULATIONS.

       (a) In General.--All regulations, orders, and 
     determinations described in subsection (b) shall remain in 
     effect according to the terms of such regulations, orders, 
     determinations, and resolutions, and shall be enforceable by 
     or against the Director of the Federal Housing Finance Agency 
     until modified, terminated, set aside, or superseded in 
     accordance with applicable law by such Director, any court of 
     competent jurisdiction, or operation of law.
       (b) Applicability.--A regulation, order, or determination 
     is described under this subsection if it--
       (1) was issued, made, prescribed, or allowed to become 
     effective by--
       (A) the Secretary; or
       (B) a court of competent jurisdiction and that relate to 
     the enterprise-related functions of the Department; and
       (2) is in effect on the termination date under section 
     395(a).

     SEC. 397. TRANSFER AND RIGHTS OF EMPLOYEES OF DEPARTMENT OF 
                   HOUSING AND URBAN DEVELOPMENT.

       (a) Transfer.--
       (1) In general.--Except as provided in paragraph (2), each 
     enterprise-related employee of the Department shall be 
     transferred to the Federal Housing Finance Agency for 
     employment not later than the termination date under section 
     395(a) and such transfer shall be deemed a transfer of 
     function for purposes of section 3503 of title 5, United 
     States Code.
       (2) Authority to decline.--An enterprise-related employee 
     of the Department may, in the discretion of the employee, 
     decline transfer under paragraph (1) to a position in the 
     Federal Housing Finance Agency and shall be guaranteed a 
     position in the Department with the same status, tenure, 
     grade, and pay as that held on the day immediately preceding 
     the date that such declination was made. Each such employee 
     holding a permanent position shall not be involuntarily 
     separated or reduced in grade or compensation for 12 months 
     after the date that the transfer would otherwise have 
     occurred, except for cause or, if the employee is a temporary 
     employee, separated in accordance with the terms of the 
     appointment.
       (b) Guaranteed Positions.--Each enterprise-related employee 
     of the Department transferred under subsection (a) shall be 
     guaranteed a position with the same status, tenure, grade, 
     and pay as that held on the day immediately preceding the 
     transfer. Each such employee holding a permanent position 
     shall not be involuntarily separated or reduced in grade or 
     compensation for 12 months after the date of transfer, except 
     for cause or, if the employee is a temporary employee, 
     separated in accordance with the terms of the appointment.
       (c) Appointment Authority for Excepted and Senior Executive 
     Service Employees.--
       (1) In general.--In the case of employees occupying 
     positions in the excepted service or the Senior Executive 
     Service, any appointment authority established under law or 
     by regulations of the Office of Personnel Management for 
     filling such positions shall be transferred, subject to 
     paragraph (2).
       (2) Decline of transfer.--The Director of the Federal 
     Housing Finance Agency may decline a transfer of authority 
     under paragraph (1) (and the employees appointed pursuant 
     thereto) to the extent that such authority relates to 
     positions excepted from the competitive service because of 
     their confidential, policymaking, policy-determining, or 
     policy-advocating character, and noncareer positions in the 
     Senior Executive Service (within the meaning of section 
     3132(a)(7) of title 5, United States Code).
       (d) Reorganization.--If the Director of the Federal Housing 
     Finance Agency determines, after the end of the 1-year period 
     beginning on the termination date under section 395(a), that 
     a reorganization of the combined workforce is required, that 
     reorganization shall be deemed a major reorganization for 
     purposes of affording affected employees retirement under 
     section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States 
     Code.
       (e) Employee Benefit Programs.--
       (1) In general.--Any enterprise-related employee of the 
     Department accepting employment with the Federal Housing 
     Finance Agency as a result of a transfer under subsection (a) 
     may retain for 12 months after the date on which such 
     transfer occurs membership in any employee benefit program of 
     the Federal Housing Finance Agency or the Department, as 
     applicable, including insurance, to which such employee 
     belongs on the termination date under section 395(a) if--
       (A) the employee does not elect to give up the benefit or 
     membership in the program; and
       (B) the benefit or program is continued by the Director of 
     the Federal Housing Finance Agency.
       (2) Cost differential.--The difference in the costs between 
     the benefits which would have been provided by the Department 
     and those provided by this section shall be paid by the 
     Director of the Federal Housing Finance Agency. If any 
     employee elects to give up membership in a health insurance 
     program or the health insurance program is not continued by 
     such Director, the employee shall be permitted to select an 
     alternate Federal health insurance program within 30 days 
     after such election or notice, without regard to any other 
     regularly scheduled open season.

     SEC. 398. TRANSFER OF APPROPRIATIONS, PROPERTY, AND 
                   FACILITIES.

       Upon the termination date under section 395(a), all assets, 
     liabilities, contracts, property, records, and unexpended 
     balances of appropriations, authorizations, allocations, and 
     other funds employed, held, used, arising from, available to, 
     or to be made available to the Department in connection with 
     enterprise-related functions of the Department shall transfer 
     to the Director of the Federal Housing Finance Agency. 
     Unexpended funds transferred by this section shall be used 
     only for the purposes for which the funds were originally 
     authorized and appropriated.

             TITLE IV--EMERGENCY MORTGAGE LOAN MODIFICATION

     SEC. 401. SHORT TITLE.

       This title may be cited as the ``Emergency Mortgage Loan 
     Modification Act of 2008''.

     SEC. 402. SAFE HARBOR FOR QUALIFIED LOAN MODIFICATIONS OR 
                   WORKOUT PLANS FOR CERTAIN RESIDENTIAL MORTGAGE 
                   LOANS.

       (a) Standard for Loan Modifications or Workout Plans.--
     Absent contractual provisions to the contrary--
       (1) the duty to maximize, or to not adversely affect, the 
     recovery of total proceeds from pooled residential mortgage 
     loans is owed by a servicer of such pooled loans to the 
     securitization vehicle for the benefit of all investors and 
     holders of beneficial interests in the pooled loans, in the 
     aggregate, and not to any individual party or group of 
     parties; and
       (2) a servicer of pooled residential mortgage loans shall 
     be deemed to be acting on behalf of the securitization 
     vehicle in the best interest of all investors and holders of 
     beneficial interests in the pooled loans, in the aggregate, 
     if for a loan that is in payment default under the loan 
     agreement or for which payment default is imminent or 
     reasonably foreseeable, the loan servicer makes or causes to 
     be made reasonable and documented efforts to implement a 
     modification or workout plan or, if such efforts are 
     unsuccessful or such plan would be infeasible, engages or 
     causes to engage in other loss mitigation, including 
     accepting a short payment or partial discharge of principal, 
     or agreeing to a short sale of the property, to the extent 
     that the servicer reasonably believes the modification or 
     workout plan or other mitigation actions will maximize the 
     net present value to be realized on the loan over that which 
     would be realized through foreclosure.
       (b) Safe Harbor.--Absent contractual provisions to the 
     contrary, a servicer of a residential mortgage loan that acts 
     or causes to act in a manner consistent with the duty set 
     forth in subsection (a), shall not be liable for

[[Page 8225]]

     entering into a qualified loan modification or workout plan, 
     to--
       (1) any person, based on that person's ownership of a 
     residential mortgage loan or any interest in a pool of 
     residential mortgage loans or in securities that distribute 
     payments out of the principal, interest and other payments in 
     loans on the pool;
       (2) any person who is obligated to make payments pursuant 
     to a derivatives instrument determined in reference to any 
     interest referred to in paragraph (1); or
       (3) any person that insures any loan or any interest 
     referred to in paragraph (1) under any law or regulation of 
     the United States or any law or regulation of any State or 
     political subdivision of any State.
       (c) Rule of Construction.--No provision of this section 
     shall be construed as limiting the ability of a servicer to 
     enter into loan modifications or workout plans other than 
     qualified loan modification or workout plans.
       (d) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) Qualified loan modification or workout plan.--The term 
     ``qualified loan modification or workout plan'' means a 
     modification or plan that--
       (A) is scheduled to remain in place until the borrower 
     sells or refinances the property, or for at least 5 years 
     from the date of adoption of the plan, whichever is sooner;
       (B) does not provide for a repayment schedule that results 
     in an increase in the outstanding principal balance of the 
     loan, including by deferred or unpaid interest, fees, or 
     other charges; and
       (C) does not require the borrower to pay additional points 
     and fees.
       (2) Residential mortgage loan defined.--The term 
     ``residential mortgage loan'' means a loan that is secured by 
     a lien on an owner-occupied residential dwelling.
       (3) Securitization vehicle.--The term ``securitization 
     vehicle'' means a trust, corporation, partnership, limited 
     liability entity, special purpose entity, or other structure 
     that--
       (A) is the issuer, or is created by the issuer, of mortgage 
     pass-through certificates, participation certificates, 
     mortgage-backed securities, or other similar securities 
     backed by a pool of assets that includes residential mortgage 
     loans; and
       (B) holds such loans.
       (e) Effective Period.--This section shall apply only with 
     respect to qualified loan modification or workout plans 
     initiated prior to January 1, 2011.

                   TITLE V--OTHER HOUSING PROVISIONS

     SEC. 501. DEPOSITORY INSTITUTION COMMUNITY DEVELOPMENT 
                   INVESTMENTS ENHANCEMENT .

       (a) Technical Corrections.--
       (1) National banks.--The first sentence of the paragraph 
     designated as the ``Eleventh'' of section 5136 of the Revised 
     Statutes of the United States (12 U.S.C. 24) (as amended by 
     section 305(a) of the Financial Services Regulatory Relief 
     Act of 2006) is amended by striking ``promotes the public 
     welfare by benefitting primarily'' and inserting ``is 
     designed primarily to promote the public welfare, including 
     the welfare of''.
       (2) State member banks.--The first sentence of the 23rd 
     undesignated paragraph of section 9 of the Federal Reserve 
     Act (12 U.S.C. 338a) (as amended by section 305(b) of the 
     Financial Services Regulatory Relief Act of 2006) is amended 
     by striking ``promotes the public welfare by benefitting 
     primarily'' and inserting ``is designed primarily to promote 
     the public welfare, including the welfare of''.
       (b) Investments by Federal Savings Associations Authorized 
     to Promote the Public Welfare.--
       (1) In general.--Section 5(c)(3) of the Home Owners' Loan 
     Act (12 U.S.C. 1464(c)) is amended by adding at the end the 
     following new subparagraph:
       ``(D) Direct investments to promote the public welfare.--
       ``(i) In general.--A Federal savings association may make 
     investments, directly or indirectly, each of which is 
     designed primarily to promote the public welfare, including 
     the welfare of low- and moderate-income communities or 
     families through the provision of housing, services, and 
     jobs.
       ``(ii) Direct investments or acquisition of interest in 
     other companies.--Investments under clause (i) may be made 
     directly or by purchasing interests in an entity primarily 
     engaged in making such investments.
       ``(iii) Prohibition on unlimited liability.--No investment 
     may be made under this subparagraph which would subject a 
     Federal savings association to unlimited liability to any 
     person.
       ``(iv) Single investment limitation to be established by 
     director.--Subject to clauses (v) and (vi), the Director 
     shall establish, by order or regulation, limits on--

       ``(I) the amount any savings association may invest in any 
     1 project; and
       ``(II) the aggregate amount of investment of any savings 
     association under this subparagraph.

       ``(v) Flexible aggregate investment limitation.--The 
     aggregate amount of investments of any savings association 
     under this subparagraph may not exceed an amount equal to the 
     sum of 5 percent of the savings association's capital stock 
     actually paid in and unimpaired and 5 percent of the savings 
     association's unimpaired surplus, unless--

       ``(I) the Director determines that the savings association 
     is adequately capitalized; and
       ``(II) the Director determines, by order, that the 
     aggregate amount of investments in a higher amount than the 
     limit under this clause will pose no significant risk to the 
     affected deposit insurance fund.

       ``(vi) Maximum aggregate investment limitation.--
     Notwithstanding clause (v), the aggregate amount of 
     investments of any savings association under this 
     subparagraph may not exceed an amount equal to the sum of 15 
     percent of the savings association's capital stock actually 
     paid in and unimpaired and 15 percent of the savings 
     association's unimpaired surplus.
       ``(vii) Investments not subject to other limitation on 
     quality of investments.--No obligation a Federal savings 
     association acquires or retains under this subparagraph shall 
     be taken into account for purposes of the limitation 
     contained in section 28(d) of the Federal Deposit Insurance 
     Act on the acquisition and retention of any corporate debt 
     security not of investment grade.
       ``(viii) Applicability of standards to each investment.--
     The standards and limitations of this subparagraph shall 
     apply to each investment under this subparagraph made by a 
     savings association directly and by its subsidiaries.''.
       (2) Technical and conforming amendments.--Section 
     5(c)(3)(A) of the Home Owners' Loan Act (12 U.S.C. 
     1464(c)(3)(A)) is amended to read as follows:
       ``(A) [Repealed]''.

     SEC. 502. PRESERVATION OF CERTAIN AFFORDABLE HOUSING DWELLING 
                   UNITS.

       (a) Conversion of HUD Contracts.--Notwithstanding any other 
     provision of law, the Secretary of Housing and Urban 
     Development may, at the request of the owner of the 
     multifamily housing project to which Section 8 Project Number 
     NY 913 VO 0018 and RAP Contract Number 012035NIRAP are 
     subject, convert such contracts to a contract for project-
     based rental assistance under section 8 of the United States 
     Housing Act of 1937 (42 U.S.C. 1437f).
       (b) Initial Renewal.--
       (1) Eligibility.--At the request of the owner made no later 
     than 90 days prior to a conversion, the Secretary may, to the 
     extent sufficient amounts are made available in appropriation 
     Acts and notwithstanding any other law, treat the 
     contemplated resulting contract as if such contract were 
     eligible for initial renewal under section 524(a) of the 
     Multifamily Assisted Housing Reform and Affordability Act of 
     1997 (42 U.S.C. 1437f note).
       (2) Request.--A request by the owner pursuant to paragraph 
     (1) shall be upon such terms and conditions as the Secretary 
     may require.
       (c) Resulting Contract.--The resulting contract shall--
       (1) be subject to section 524(a) of MAHRA (42 U.S.C. 1437f 
     note);
       (2) be considered for all purposes a contract that has been 
     renewed under section 524(a) of MAHRA (42 U.S.C. 1437f note) 
     for a term not to exceed 20 years;
       (3) be subsequently renewable at the request of the owner, 
     under any renewal option for which the project is eligible 
     under MAHRA (42 U.S.C. 1437f note);
       (4) contain provisions limiting distributions, as the 
     Secretary determines appropriate, not to exceed 10 percent of 
     the initial investment of the owner;
       (5) be subject to the availability of sufficient amounts in 
     appropriation Acts; and
       (6) be subject to such other terms and conditions as the 
     Secretary considers appropriate.
       (d) Income Targeting.--The owner shall be deemed to be in 
     compliance with all income-targeting requirements under the 
     United States Housing Act of 1937 by serving low-income 
     families, as such term is defined in the section 3(b)(2) of 
     such Act (42 U.S.C. 1437a(b)(2)).
       (e) Tenant Eligibility.--Notwithstanding any other 
     provision of law, each family residing in an assisted 
     dwelling unit on the date of the conversion under this 
     section, subject to the resulting contract under subsection 
     (a), shall be considered to meet the applicable requirements 
     for income eligibility and occupancy.
       (f) Definitions.--As used in this section--
       (1) the term ``assisted dwelling unit'' means the dwelling 
     units that, on the date of the conversion under this section, 
     were subject to Section 8 Project Number NY 913 VO 0018 or 
     RAP Contract Number 012035NIRAP;
       (2) the term ``conversion'' means the action under which 
     Section 8 Project Number NY 913 VO 0018 and RAP Contract 
     Number 012035NIRAP become a contract for project-based rental 
     assistance under section 8 of the United States Housing Act 
     of 1937 (42 U.S.C. 1437f) pursuant to subsection (a);
       (3) the term ``MAHRA'' means the Multifamily Assisted 
     Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f 
     note);
       (4) the term ``owner'' means Starrett City Associates or 
     any successor owner of the multifamily housing project to 
     which Section 8 Project Number NY 913 VO 0018 and RAP 
     Contract Number 012035NIRAP are subject;

[[Page 8226]]

       (5) the term ``resulting contract'' means the new contract 
     after a conversion of Section 8 Project Number NY 913 VO 0018 
     and RAP Contract Number 012035NIRAP to a contract for 
     project-based rental assistance under section 8 of the United 
     States Housing Act of 1937 (42 U.S.C. 1437f) pursuant to 
     subsection (a); and
       (6) the term ``Secretary'' means the Secretary of Housing 
     and Urban Development.

     SEC. 503. ELIGIBILITY OF CERTAIN PROJECTS FOR ENHANCED 
                   VOUCHER ASSISTANCE.

       Notwithstanding any other provision of law--
       (1) the property known as The Heritage Apartments (FHA No. 
     023-44804), in Malden, Massachusetts, shall be considered 
     eligible low-income housing for purposes of the eligibility 
     of residents of the property for enhanced voucher assistance 
     under section 8(t) of the United States Housing Act of 1937 
     (42 U.S.C. 1437f(t)), pursuant to paragraph (2)(A) of section 
     223(f) of the Low-Income Housing Preservation and Resident 
     Homeownership Act of 1990 (12 U.S.C. 4113(f)(2)(A));
       (2) such residents shall receive enhanced rental housing 
     vouchers upon the prepayment of the mortgage loan for the 
     property under section 236 of the National Housing Act (12 
     U.S.C. 1715z-1); and
       (3) the Secretary shall approve such prepayment and 
     subsequent transfer of the property without any further 
     condition, except that the property shall be restricted for 
     occupancy, until the original maturity date of the prepaid 
     mortgage loan, only by families with incomes not exceeding 80 
     percent of the adjusted median income for the area in which 
     the property is located, as published by the Secretary.
     Amounts for the enhanced vouchers pursuant to this section 
     shall be provided under amounts appropriated for tenant-based 
     rental assistance otherwise authorized under section 8(t) of 
     the United States Housing Act of 1937.

     SEC. 504. TRANSFER OF CERTAIN RENTAL ASSISTANCE CONTRACTS.

       (a) Transfer.--Subject to subsection (c) and 
     notwithstanding any other provision of law, the Secretary of 
     Housing and Urban Development shall, at the request of the 
     owner, transfer or authorize the transfer, of the contracts, 
     restrictions, and debt described in subsection (b)--
       (1) on the housing that is owned or managed by Community 
     Properties of Ohio Management Services LLC or an affiliate of 
     Ohio Capital Corporation for Housing and located in Franklin 
     County, Ohio, to other properties located in Franklin County, 
     Ohio; and
       (2) on the housing that is owned or managed by The Model 
     Group, Inc., and located in Hamilton County, Ohio, to other 
     properties located in Hamilton County, Ohio.
       (b) Contracts, Restrictions, and Debt Covered.--The 
     contracts, restrictions, and debt described in this 
     subsection are as follows:
       (1) All or a portion of a project-based rental assistance 
     housing assistance payments contract under section 8 of the 
     United States Housing Act of 1937 (42 U.S.C. 1437f).
       (2) Existing Federal use restrictions, including without 
     limitation use agreements, regulatory agreements, and 
     accommodation agreements.
       (3) Any subordinate debt held by the Secretary or assigned 
     and any mortgages securing such debt, all related loan and 
     security documentation and obligations, and reserve and 
     escrow balances.
       (c) Retention of Same Number of Units and Amount of 
     Assistance.--Any transfer pursuant to subsection (a) shall 
     result in--
       (1) a total number of dwelling units (including units 
     retained by the owners and units transferred) covered by 
     assistance described in subsection (b)(1) after the transfer 
     remaining the same as such number assisted before the 
     transfer, with such increases or decreases in unit sizes as 
     may be contained in a plan approved by a local planning or 
     development commission or department; and
       (2) no reduction in the total amount of the housing 
     assistance payments under contracts described in subsection 
     (b)(1).

     SEC. 505. PROTECTION AGAINST DISCRIMINATORY TREATMENT.

       Section 525 of title 11, the United States Code, is amended 
     by adding at the end the following:
       ``(d) A governmental unit that operates a mortgage loan 
     program, including a loan guarantee or subsidy program, may 
     not deny the benefits of such program to a disabled veteran 
     (as defined in section 3741(1) of title 38) because he or she 
     is or has been a debtor under this title, has been insolvent 
     before the commencement of a case under this title or during 
     the pendency of the case but before being granted or denied a 
     discharge, or has not paid a debt that is dischargeable in 
     the case under this title.''.
       In the matter proposed to be inserted by the amendment of 
     the Senate to the text of the bill, strike titles VII, IX, 
     and XI.

  The text of House amendment No. 2 to the Senate amendment is as 
follows:

       In the matter proposed to be inserted by the Senate 
     amendment to H.R. 3221, strike titles VI (relating to tax-
     related provisions), VIII (relating to REIT investment 
     diversification and empowerment), and X (relating to clean 
     energy tax stimulus) and add at the end the following new 
     title (and conform the table of contents accordingly):

                TITLE VII--REVENUE AND OTHER PROVISIONS

     SEC. 700. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

                   Subtitle A--Housing Tax Incentives

                      PART 1--MULTI-FAMILY HOUSING

                Subpart A--Low-Income Housing Tax Credit

     SEC. 701. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME 
                   HOUSING TAX CREDIT.

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

     SEC. 702. DETERMINATION OF CREDIT RATE.

       (a) Elimination of Distinction Between New and Existing 
     Buildings; Minimum Credit Rate for Non-Federally Subsidized 
     Buildings.--
       (1) In general.--Subsection (b) section 42 is amended to 
     read as follows:
       ``(b) Applicable Percentage.--For purposes of this 
     section--
       ``(1) In general.--The term `applicable percentage' means, 
     with respect to any building, the appropriate percentage 
     prescribed by the Secretary for the earlier of--
       ``(A) the month in which such building is placed in 
     service, or
       ``(B) at the election of the taxpayer--
       ``(i) the month in which the taxpayer and the housing 
     credit agency enter into an agreement with respect to such 
     building (which is binding on such agency, the taxpayer, and 
     all successors in interest) as to the housing credit dollar 
     amount to be allocated to such building, or
       ``(ii) in the case of any building to which subsection 
     (h)(4)(B) applies, the month in which the tax-exempt 
     obligations are issued.

     A month may be elected under clause (ii) only if the election 
     is made not later than the 5th day after the close of such 
     month. Such an election, once made, shall be irrevocable.
       ``(2) Method of prescribing percentages.--
       ``(A) In general.--For purposes of paragraph (1), the 
     percentages prescribed by the Secretary for any month shall 
     be--
       ``(i) in the case of any building which is not federally 
     subsidized for the taxable year, the greater of--

       ``(I) the average percentage determined under subclause 
     (II) for months in the preceding calendar year, or
       ``(II) the percentage which will yield over a 10-year 
     period amounts of credit under subsection (a) which have a 
     present value equal to 70 percent of the qualified basis of 
     such building, and

       ``(ii) in the case of any other building, the percentage 
     which will yield over a 10-year period amounts of credit 
     under subsection (a) which have a present value equal to 30 
     percent of the qualified basis of such building.
       ``(B) Method of discounting.--The present value under 
     subparagraph (A) shall be determined--
       ``(i) as of the last day of the 1st year of the 10-year 
     period referred to in subparagraph (A),
       ``(ii) by using a discount rate equal to 72 percent of the 
     average of the annual Federal mid-term rate and the annual 
     Federal long-term rate applicable under section 1274(d)(1) to 
     the month applicable under subparagraph (A) and compounded 
     annually, and
       ``(iii) by assuming that the credit allowable under this 
     section for any year is received on the last day of such 
     year.
       ``(3) Cross references.--
       ``(A) For treatment of certain rehabilitation expenditures 
     as separate buildings, see subsection (e).
       ``(B) For determination of applicable percentage for 
     increases in qualified basis after the 1st year of the credit 
     period, see subsection (f)(3).
       ``(C) For authority of housing credit agency to limit 
     applicable percentage and qualified basis which may be taken 
     into account under this section with respect to any building, 
     see subsection (h)(7).''.
       (2) Conforming amendments.--
       (A) Subparagraph (B) of section 42(e)(3) is amended by 
     striking ``subsection (b)(2)(B)(ii)'' and inserting 
     ``subsection (b)(2)(A)(ii)''.
       (B) Subparagraph (A) of section 42(i)(2) is amended by 
     striking ``new building'' and inserting ``building''.
       (b) Modifications to Definition of Federally Subsidized 
     Building.--
       (1) In general.--Subparagraph (A) of section 42(i)(2) is 
     amended by striking ``, or any below market Federal loan,''.
       (2) Conforming amendments.--

[[Page 8227]]

       (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. 703. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.

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

     Any increase under the preceding sentence which is not a 
     multiple of $100 shall be rounded to the nearest multiple of 
     $100.''.
       (3) Conforming amendment.--Subclause (II) of section 
     42(f)(5)(B)(ii) is amended by striking ``if subsection 
     (e)(3)(A)(ii)(II)'' and all that follows and inserting ``if 
     the dollar amount in effect under subsection 
     (e)(3)(A)(ii)(II) were two-thirds of such amount.''.
       (c) Increase in Allowable Community Service Facility Space 
     for Small Projects.--Clause (ii) of section 42(d)(4)(C) 
     (relating to limitation) is amended by striking ``10 percent 
     of the eligible basis of the qualified low-income housing 
     project of which it is a part. For purposes of'' and 
     inserting ``the sum of--

       ``(I) 15 percent of so much of the eligible basis of the 
     qualified low-income housing project of which it is a part as 
     does not exceed $5,000,000, plus
       ``(II) 10 percent of so much of the eligible basis of such 
     project as is not taken into account under subclause (I).

     For purposes of''.
       (d) Clarification of Treatment of Federal Grants.--
     Subparagraph (A) of section 42(d)(5) is amended to read as 
     follows:
       ``(A) Federal grants not taken into account in determining 
     eligible basis.--The eligible basis of a building shall not 
     include any costs financed with the proceeds of a Federally 
     funded grant.''.
       (e) Simplification of Related Party Rules.--Clause (iii) of 
     section 42(d)(2)(D), before redesignation under subsection 
     (f)(2), is amended--
       (1) by striking all that precedes subclause (II),
       (2) by redesignating subclause (II) as clause (iii) and 
     moving such clause two ems to the left, and
       (3) by striking the last sentence thereof.
       (f) Repeal of Deadwood.--
       (1) Clause (ii) of section 42(d)(2)(B) is amended by 
     striking ``the later of--'' and all that follows and 
     inserting ``the date the building was last placed in 
     service,''.
       (2) Subparagraph (D) of section 42(d)(2) is amended by 
     striking clause (i) and by redesignating clauses (ii) and 
     (iii) as clauses (i) and (ii), respectively.
       (3) Paragraph (5) of section 42(d) is amended by striking 
     subparagraph (B) and by redesignating subparagraph (C) as 
     subparagraph (B).
       (g) Effective Date.--The amendments made by this subsection 
     shall apply to buildings placed in service after the date of 
     the enactment of this Act.

     SEC. 704. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME 
                   HOUSING TAX INCENTIVES.

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

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

       (f) Treatment of Rural Projects.--Section 42(i) (relating 
     to definitions and special rules) is amended by adding at the 
     end the following new paragraph:
       ``(8) Treatment of rural projects.--For purposes of this 
     section, in the case of any project for residential rental 
     property located in a rural area (as defined in section 520 
     of the Housing Act of 1949), any income limitation measured 
     by reference to area median gross income shall be measured by 
     reference to the greater of area median gross income or 
     national non-metropolitan median income. The preceding 
     sentence shall not apply with respect to any building if 
     paragraph (1) of section 42(h) does not apply by reason of 
     paragraph (4) thereof to any portion of the credit determined 
     under this section with respect to such building.''.
       (g) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall apply 
     to buildings placed in service after the date of the 
     enactment of this Act.
       (2) Repeal of bonding requirement on disposition of 
     building.--The amendment made by subsection (c) shall apply 
     to--
       (A) interests in buildings disposed after the date of the 
     enactment of this Act, and
       (B) interests in buildings disposed of on or before such 
     date if--
       (i) it is reasonably expected that such building will 
     continue to be operated as a qualified low-income building 
     (within the meaning of section 42 of the Internal Revenue 
     Code of 1986) for the remaining compliance period (within the 
     meaning of such section) with respect to such building, and
       (ii) the taxpayer elects the application of this 
     subparagraph with respect to such disposition.

[[Page 8228]]

     Notwithstanding the preceding sentence, the amendments made 
     by subsection (c) shall not apply to any disposition after 
     the date 5 years after the date of the enactment of this Act.
       (3) Energy efficiency and historic nature taken into 
     account in making allocations.--The amendments made by 
     subsection (d) shall apply to allocations made after December 
     31, 2008.
       (4) Continued eligibility for students who received foster 
     care assistance.--The amendments made by subsection (e) shall 
     apply to determinations made after the date of the enactment 
     of this Act.
       (5) Treatment of rural projects.--The amendment made by 
     subsection (f) shall apply to determinations made after the 
     date of the enactment of this Act.

       Subpart B--Modifications to Tax-Exempt Housing Bond Rules

     SEC. 706. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING 
                   RESIDENTIAL RENTAL PROJECTS.

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

     SEC. 707. COORDINATION OF CERTAIN RULES APPLICABLE TO LOW-
                   INCOME HOUSING CREDIT AND QUALIFIED RESIDENTIAL 
                   RENTAL PROJECT EXEMPT FACILITY BONDS.

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

  Subpart C--Reforms Related to the Low-Income Housing Credit and Tax-
                          Exempt Housing Bonds

     SEC. 709. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS 
                   INCOME.

       (a) In General.--Paragraph (2) of section 142(d), as 
     amended by section 707, is further amended by adding at the 
     end the following new subparagraph:
       ``(E) Hold harmless for reductions in area median gross 
     income.--
       ``(i) In general.--Any determination of area median gross 
     income under subparagraph (B) with respect to any project for 
     any calendar year after 2008 shall not be less than the area 
     median gross income determined under such subparagraph with 
     respect to such project for the calendar year preceding the 
     calendar year for which such determination is made.
       ``(ii) Special rule for certain census changes.--In the 
     case of a HUD hold harmless impacted project, the area median 
     gross income with respect to such project for any calendar 
     year after 2008 (hereafter in this clause referred to as the 
     current calendar year) shall be the greater of the amount 
     determined without regard to this clause or the sum of--

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

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

     SEC. 710. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINATION 
                   REQUIREMENT WHERE DETERMINATION NOT RELEVANT.

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

                     PART 2--SINGLE FAMILY HOUSING

     SEC. 712. FIRST-TIME HOMEBUYER CREDIT.

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

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

       ``(a) Allowance of Credit.--In the case of an individual 
     who is a first-time homebuyer of a principal residence in the 
     United States during a taxable year, there shall be allowed 
     as a credit against the tax imposed by this subtitle for such 
     taxable year an amount equal to 10 percent of the purchase 
     price of the residence.
       ``(b) Limitations.--
       ``(1) Dollar limitation.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the credit allowed under subsection (a) shall not 
     exceed $7,500.
       ``(B) Married individuals filing separately.--In the case 
     of a married individual filing a separate return, 
     subparagraph (A) shall be applied by substituting `$3,750' 
     for `$7,500'.
       ``(C) Other individuals.--If two or more individuals who 
     are not married purchase a principal residence, the amount of 
     the credit allowed under subsection (a) shall be allocated 
     among such individuals in such manner as the Secretary may 
     prescribe, except that the total amount of the credits 
     allowed to all such individuals shall not exceed $7,500.
       ``(2) Limitation based on modified adjusted gross income.--
       ``(A) In general.--The amount allowable as a credit under 
     subsection (a) (determined without regard to this paragraph) 
     for the taxable year shall be reduced (but not below zero) by 
     the amount which bears the same ratio to the amount which is 
     so allowable as--
       ``(i) the excess (if any) of--

       ``(I) the taxpayer's modified adjusted gross income for 
     such taxable year, over
       ``(II) $70,000 ($140,000 in the case of a joint return), 
     bears to

       ``(ii) $20,000.
       ``(B) Modified adjusted gross income.--For purposes of 
     subparagraph (A), the term `modified adjusted gross income' 
     means the adjusted gross income of the taxpayer for the 
     taxable year increased by any amount excluded from gross 
     income under section 911, 931, or 933.
       ``(c) Definitions.--For purposes of this section--
       ``(1) First-time homebuyer.--The term `first-time 
     homebuyer' means any individual if such individual (and if 
     married, such individual's spouse) had no present ownership 
     interest in a principal residence during the 3-year period 
     ending on the date of the purchase of the principal residence 
     to which this section applies.

[[Page 8229]]

       ``(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. 713. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY 
                   TAXES FOR NONITEMIZERS.

       (a) In General.--Section 63(c)(1) (defining standard 
     deduction) is amended by striking ``and'' at the end of 
     subparagraph (A), by striking the period at the end of 
     subparagraph (B) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(C) in the case of any taxable year beginning in 2008, 
     the real property tax deduction.''.
       (b) Definition.--Section 63(c) is amended by adding at the 
     end the following new paragraph:
       ``(7) Real property tax deduction.--For purposes of 
     paragraph (1), the real property tax deduction is the lesser 
     of--
       ``(A) the amount allowable as a deduction under this 
     chapter for State and local taxes described in section 
     164(a)(1), or
       ``(B) $350 ($700 in the case of a joint return).

     Any taxes taken into account under section 62(a) shall not be 
     taken into account under this paragraph.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

                       PART 3--GENERAL PROVISIONS

     SEC. 715. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING BOND 
                   RULES.

       (a) Temporary Increase in Volume Cap.--
       (1) In general.--Subsection (d) of section 146 is amended 
     by adding at the end the following new paragraph:
       ``(5) Increase and set aside for housing bonds for 2008.--
       ``(A) Increase for 2008.--In the case of calendar year 
     2008, the State ceiling for each State shall be increased by 
     an amount equal to $10,000,000,000 multiplied by a fraction--
       ``(i) the numerator of which is the population of such 
     State, and
       ``(ii) the denominator of which is the total population of 
     all States.
       ``(B) Set aside.--
       ``(i) In general.--Any amount of the State ceiling for any 
     State which is attributable to an increase under this 
     paragraph shall be allocated solely for one or more qualified 
     housing issues.
       ``(ii) Qualified housing issue.--For purposes of this 
     paragraph, the term `qualified housing issue' means--

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

       (2) Carryforward of unused limitations.--Subsection (f) of 
     section 146 is amended by adding at the end the following new 
     paragraph:
       ``(6) Special rules for increased volume cap under 
     subsection (d)(5).--No amount which is attributable to the 
     increase under subsection (d)(5) may be used--
       ``(A) for any issue other than a qualified housing issue 
     (as defined in subsection (d)(5)), or
       ``(B) to issue any bond after calendar year 2010.''.
       (b) Temporary Rule for Use of Qualified Mortgage Bonds 
     Proceeds for Subprime Refinancing Loans.--
       (1) In general.--Section 143(k) (relating to other 
     definitions and special rules) is amended by adding at the 
     end the following new paragraph:
       ``(12) Special rules for subprime refinancings.--

[[Page 8230]]

       ``(A) In general.--Notwithstanding the requirements of 
     subsection (i)(1), the proceeds of a qualified mortgage issue 
     may be used to refinance a mortgage on a residence which was 
     originally financed by the mortgagor through a qualified 
     subprime loan.
       ``(B) Special rules.--In applying subparagraph (A) to any 
     refinancing--
       ``(i) subsection (a)(2)(D)(i) shall be applied by 
     substituting `12-month period' for `42-month period' each 
     place it appears,
       ``(ii) subsection (d) (relating to 3-year requirement) 
     shall not apply, and
       ``(iii) subsection (e) (relating to purchase price 
     requirement) shall be applied by using the market value of 
     the residence at the time of refinancing in lieu of the 
     acquisition cost.
       ``(C) Qualified subprime loan.--The term `qualified 
     subprime loan' means an adjustable rate single-family 
     residential mortgage loan made after December 31, 2001, and 
     before January 1, 2008, that the bond issuer determines would 
     be reasonably likely to cause financial hardship to the 
     borrower if not refinanced.
       ``(D) Termination.--This paragraph shall not apply to any 
     bonds issued after December 31, 2010.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 716. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON 
                   TAX-EXEMPT HOUSING BONDS, LOW-INCOME HOUSING 
                   TAX CREDIT, AND REHABILITATION CREDIT.

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

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

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

     SEC. 717. BONDS GUARANTEED BY FEDERAL HOME LOAN BANKS 
                   ELIGIBLE FOR TREATMENT AS TAX-EXEMPT BONDS.

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

     SEC. 718. MODIFICATION OF RULES PERTAINING TO FIRPTA 
                   NONFOREIGN AFFIDAVITS.

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

       ``(I) such agent has actual knowledge that such affidavit 
     is false, or
       ``(II) in the case of an affidavit described in subsection 
     (b)(2) furnished by a corporation, such corporation is a 
     foreign corporation, or

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

     such agent or qualified substitute shall so notify the 
     transferee at such time and in such manner as the Secretary 
     shall require by regulations.''.
       (B) Failure to furnish notice.--Paragraph (2) of section 
     1445(d) (relating to failure to furnish notice) is amended to 
     read as follows:
       ``(2) Failure to furnish notice.--
       ``(A) In general.--If any transferor's agent, transferee's 
     agent, or qualified substitute is required by paragraph (1) 
     to furnish notice, but fails to furnish such notice at such 
     time or times and in such manner as

[[Page 8231]]

     may be required by regulations, such agent or substitute 
     shall have the same duty to deduct and withhold that the 
     transferee would have had if such agent or substitute had 
     complied with paragraph (1).
       ``(B) Liability limited to amount of compensation.--An 
     agent's or substitute's liability under subparagraph (A) 
     shall be limited to the amount of compensation the agent or 
     substitute derives from the transaction.''.
       (C) Conforming amendment.--The heading for section 1445(d) 
     is amended by striking ``or Transferee's Agents'' and 
     inserting ``, Transferee's Agents, or Qualified 
     Substitutes''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to dispositions of United States real property 
     interests after the date of the enactment of this Act.

     SEC. 719. MODIFICATION OF DEFINITION OF TAX-EXEMPT USE 
                   PROPERTY FOR PURPOSES OF THE REHABILITATION 
                   CREDIT.

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

      Subtitle B--Reforms Related to Real Estate Investment Trusts

        PART 1--FOREIGN CURRENCY AND OTHER QUALIFIED ACTIVITIES

     SEC. 721. REVISIONS TO REIT INCOME TESTS.

       (a) Addition of Permissible Income Categories.--Section 
     856(c) (relating to limitations) is amended--
       (1) by striking ``and'' at the end of paragraph (2)(G) and 
     by inserting after paragraph (2)(H) the following new 
     subparagraphs:
       ``(I) passive foreign exchange gains; and
       ``(J) any other item of income or gain as determined by the 
     Secretary;'', and
       (2) by striking ``and'' at the end of paragraphs (3)(H) and 
     (3)(I) and by inserting after paragraph (3)(I) the following 
     new subparagraphs:
       ``(J) real estate foreign exchange gains; and
       ``(K) any other item of income or gain as determined by the 
     Secretary; and''.
       (b) Rules Regarding Foreign Currency Transactions.--Section 
     856 (defining real estate investment trust) is amended by 
     adding at the end the following new subsection:
       ``(n) Rules Regarding Foreign Currency Transactions.--With 
     respect to any taxable year--
       ``(1) Real estate foreign exchange gains.--For purposes of 
     subsection (c)(3)(J), the term `real estate foreign exchange 
     gains' means--
       ``(A) foreign currency gains (as defined in section 
     988(b)(1)) which are attributable to--
       ``(i) any item described in subsection (c)(3) (other than 
     in subparagraph (J) thereof),
       ``(ii) the acquisition or ownership of obligations secured 
     by mortgages on real property or on interests in real 
     property (other than foreign currency gains attributable to 
     any item described in clause (i)), or
       ``(iii) becoming or being the obligor under obligations 
     secured by mortgages on real property or on interests in real 
     property (other than foreign currency gains attributable to 
     any item described in clause (i)),
       ``(B) gains described in section 987 attributable to a 
     qualified business unit (as defined by section 989) of the 
     real estate investment trust, but only if such qualified 
     business unit meets the requirements under--
       ``(i) subsection (c)(3) (without regard to subparagraph (J) 
     thereof) for the taxable year, and
       ``(ii) subsection (c)(4)(A) at the close of each quarter 
     that the real estate investment trust has directly or 
     indirectly held the qualified business unit, and
       ``(C) any other foreign currency gains as determined by the 
     Secretary.
       ``(2) Passive foreign exchange gains.--For purposes of 
     subsection (c)(2)(I), the term `passive foreign exchange 
     gains' means--
       ``(A) real estate foreign exchange gains,
       ``(B) foreign currency gains (as defined in section 
     988(b)(1)) which are not described in subparagraph (A) and 
     which are attributable to any item described in subsection 
     (c)(2) (other than in subparagraph (I) thereof), and
       ``(C) any other foreign currency gains as determined by the 
     Secretary.''.
       (c) Addition to REIT Hedging Rule.--Subparagraph (G) of 
     section 856(c)(5) is amended to read as follows:
       ``(G) Treatment of certain hedging instruments.--Except to 
     the extent as determined by the Secretary--
       ``(i) any income of a real estate investment trust from a 
     hedging transaction (as defined in clause (ii) or (iii) of 
     section 1221(b)(2)(A)) which is clearly identified pursuant 
     to section 1221(a)(7), including gain from the sale or 
     disposition of such a transaction, shall not constitute gross 
     income under paragraphs (2) and (3) to the extent that the 
     transaction hedges any indebtedness incurred or to be 
     incurred by the trust to acquire or carry real estate assets, 
     and
       ``(ii) any income of a real estate investment trust from a 
     transaction entered into by the trust primarily to manage 
     risk of currency fluctuations with respect to any item 
     described in paragraph (2) or (3), including gain from the 
     termination of such a transaction, shall not constitute gross 
     income under paragraphs (2) and (3), but only if such 
     transaction is clearly identified as such before the close of 
     the day on which it was acquired, originated, or entered into 
     (or such other time as the Secretary may prescribe).''.
       (d) Authority to Exclude Items of Income From REIT Income 
     Tests.--Section 856(c)(5) is amended by adding at the end the 
     following new subparagraph:
       ``(H) Secretarial authority to exclude other items of 
     income.--The Secretary is authorized to determine whether any 
     item of income or gain which does not otherwise qualify under 
     paragraph (2) or (3) may be considered as not constituting 
     gross income solely for purposes of this part.''.

     SEC. 722. REVISIONS TO REIT ASSET TESTS.

       (a) Clarification of Valuation Test.--The first sentence in 
     the matter following section 856(c)(4)(B)(iii)(III) is 
     amended by inserting ``(including a discrepancy caused solely 
     by the change in the foreign currency exchange rate used to 
     value a foreign asset)'' after ``such requirements''.
       (b) Clarification of Permissible Asset Category.--Section 
     856(c)(5), as amended by section 721(d), is amended by adding 
     at the end the following new subparagraph:
       ``(I) Cash.--The term `cash' includes foreign currency if 
     the real estate investment trust or its qualified business 
     unit (as defined in section 989) uses such foreign currency 
     as its functional currency (as defined in section 985(b)).''.

     SEC. 723. CONFORMING FOREIGN CURRENCY REVISIONS.

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

                   PART 2--TAXABLE REIT SUBSIDIARIES

     SEC. 725. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.

       Section 856(c)(4)(B)(ii) is amended by striking ``20 
     percent'' and inserting ``25 percent''.

                          PART 3--DEALER SALES

     SEC. 727. HOLDING PERIOD UNDER SAFE HARBOR.

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

     SEC. 728. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.

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

                       PART 4--HEALTH CARE REITS

     SEC. 730. CONFORMITY FOR HEALTH CARE FACILITIES.

       (a) Related Party Rentals.--Subparagraph (B) of section 
     856(d)(8) (relating to special rule for taxable REIT 
     subsidiaries) is amended to read as follows:
       ``(B) Exception for certain lodging facilities and health 
     care property.--The requirements of this subparagraph are met 
     with respect to an interest in real property which is a 
     qualified lodging facility or a qualified health care 
     property (as defined in subsection (e)(6)(D)(i)) leased by 
     the trust to a taxable REIT subsidiary of the trust if the

[[Page 8232]]

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

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

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

                        PART 5--EFFECTIVE DATES

     SEC. 732. EFFECTIVE DATES.

       (a) In General.--Except as otherwise provided in this 
     section, the amendments made by this subtitle shall apply to 
     taxable years beginning after the date of the enactment of 
     this Act.
       (b) REIT Income Tests.--
       (1) The amendment made by section 721(a) and (b) shall 
     apply to gains and items of income recognized after the date 
     of the enactment of this Act.
       (2) The amendment made by section 721(c) shall apply to 
     transactions entered into after the date of the enactment of 
     this Act.
       (3) The amendment made by section 721(d) shall apply after 
     the date of the enactment of this Act.
       (c) Conforming Foreign Currency Revisions.--
       (1) The amendment made by section 723(a) shall apply to 
     gains recognized after the date of the enactment of this Act.
       (2) The amendment made by section 723(b) shall apply to 
     gains and deductions recognized after the date of the 
     enactment of this Act.
       (d) Dealer Sales.--The amendments made by part 3 shall 
     apply to sales made after the date of the enactment of this 
     Act.

                     Subtitle C--Revenue Provisions

     SEC. 741. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES 
                   TRANSACTIONS.

       (a) In General.--
       (1) Broker reporting for securities transactions.--Section 
     6045 (relating to returns of brokers) is amended by adding at 
     the end the following new subsection:
       ``(g) Additional Information Required in the Case of 
     Securities Transactions, etc.--
       ``(1) In general.--If a broker is otherwise required to 
     make a return under subsection (a) with respect to the gross 
     proceeds of the sale of a covered security, the broker shall 
     include in such return the information described in paragraph 
     (2).
       ``(2) Additional information required.--
       ``(A) In general.--The information required under paragraph 
     (1) to be shown on a return with respect to a covered 
     security of a customer shall include the customer's adjusted 
     basis in such security and whether any gain or loss with 
     respect to such security is long-term or short-term (within 
     the meaning of section 1222).
       ``(B) Determination of adjusted basis.--For purposes of 
     subparagraph (A)--
       ``(i) In general.--The customer's adjusted basis shall be 
     determined--

       ``(I) in the case of any security (other than any stock for 
     which an average basis method is permissible under section 
     1012), in accordance with the first-in first-out method 
     unless the customer notifies the broker by means of making an 
     adequate identification of the stock sold or transferred, and
       ``(II) in the case of any stock for which an average basis 
     method is permissible under section 1012, in accordance with 
     the broker's default method unless the customer notifies the 
     broker that he elects another acceptable method under section 
     1012 with respect to the account in which such stock is held.

       ``(ii) Exception for wash sales.--Except as otherwise 
     provided by the Secretary, the customer's adjusted basis 
     shall be determined without regard to section 1091 (relating 
     to loss from wash sales of stock or securities) unless the 
     transactions occur in the same account with respect to 
     identical securities.
       ``(3) Covered security.--For purposes of this subsection--
       ``(A) In general.--The term `covered security' means any 
     specified security acquired on or after the applicable date 
     if such security--
       ``(i) was acquired through a transaction in the account in 
     which such security is held, or
       ``(ii) was transferred to such account from an account in 
     which such security was a covered security, but only if the 
     broker received a statement under section 6045A with respect 
     to the transfer.
       ``(B) Specified security.--The term `specified security' 
     means--
       ``(i) any share of stock in a corporation,
       ``(ii) any note, bond, debenture, or other evidence of 
     indebtedness,
       ``(iii) any commodity, or contract or derivative with 
     respect to such commodity, if the Secretary determines that 
     adjusted basis reporting is appropriate for purposes of this 
     subsection, and
       ``(iv) any other financial instrument with respect to which 
     the Secretary determines that adjusted basis reporting is 
     appropriate for purposes of this subsection.
       ``(C) Applicable date.--The term `applicable date' means--
       ``(i) January 1, 2010, in the case of any specified 
     security which is stock in a corporation (other than any 
     stock described in clause (ii)),
       ``(ii) January 1, 2011, in the case of any stock for which 
     an average basis method is permissible under section 1012, 
     and
       ``(iii) January 1, 2012, or such later date determined by 
     the Secretary in the case of any other specified security.
       ``(4) Treatment of s corporations.--In the case of the sale 
     of a covered security acquired by an S corporation (other 
     than a financial institution) after December 31, 2011, such S 
     corporation shall be treated in the same manner as a 
     partnership for purposes of this section.
       ``(5) Special rules for short sales.--In the case of a 
     short sale, reporting under this section shall be made for 
     the year in which such sale is closed.''.
       (2) Broker information required with respect to options.--
     Section 6045, as amended by subsection (a), is amended by 
     adding at the end the following new subsection:
       ``(h) Application to Options on Securities.--
       ``(1) Exercise of option.--For purposes of this section, if 
     a covered security is acquired or disposed of pursuant to the 
     exercise of an option that was granted or acquired in the 
     same account as the covered security, the amount received 
     with respect to the grant or paid with respect to the 
     acquisition of such option shall be treated as an adjustment 
     to gross proceeds or as an adjustment to basis, as the case 
     may be.
       ``(2) Lapse or closing transaction.--In the case of the 
     lapse (or closing transaction (as defined in section 
     1234(b)(2)(A))) of an option on a specified security or the 
     exercise of a cash-settled option on a specified security, 
     reporting under subsections (a) and (g) with respect to such 
     option shall be made for the calendar year which includes the 
     date of such lapse, closing transaction, or exercise.
       ``(3) Prospective application.--Paragraphs (1) and (2) 
     shall not apply to any option which is granted or acquired 
     before January 1, 2012.
       ``(4) Definitions.--For purposes of this subsection, the 
     terms `covered security' and `specified security' shall have 
     the meanings given such terms in subsection (g)(3).''.
       (3) Extension of period for statements sent to customers.--
       (A) In general.--Subsection (b) of section 6045 is amended 
     by striking ``January 31'' and inserting ``February 15''.
       (B) Statements related to substitute payments.--Subsection 
     (d) of section 6045 is amended--
       (i) by striking ``at such time and'', and
       (ii) by inserting after ``other item.'' the following new 
     sentence: ``The written statement required under the 
     preceding sentence shall be furnished on or before February 
     15 of the year following the calendar year in which the 
     payment was made.''.
       (C) Other statements.--Subsection (b) of section 6045 is 
     amended by adding at the end the following: ``In the case of 
     a consolidated reporting statement (as defined in 
     regulations) with respect to any account, any

[[Page 8233]]

     statement which would otherwise be required to be furnished 
     on or before January 31 of a calendar year with respect to 
     any item reportable to the taxpayer shall instead be required 
     to be furnished on or before February 15 of such calendar 
     year if furnished with such consolidated reporting 
     statement.''.
       (b) Determination of Basis of Certain Securities on Account 
     by Account or Average Basis Method.--Section 1012 (relating 
     to basis of property-cost) is amended--
       (1) by striking ``The basis of property'' and inserting the 
     following:
       ``(a) In General.--The basis of property'',
       (2) by striking ``The cost of real property'' and inserting 
     the following:
       ``(b) Special Rule for Apportioned Real Estate Taxes.--The 
     cost of real property'', and
       (3) by adding at the end the following new subsections:
       ``(c) Determinations by Account.--
       ``(1) In general.--In the case of the sale, exchange, or 
     other disposition of a specified security on or after the 
     applicable date, the conventions prescribed by regulations 
     under this section shall be applied on an account by account 
     basis.
       ``(2) Application to open-end funds.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     any stock in an open-end fund acquired before January 1, 
     2011, shall be treated as a separate account from any such 
     stock acquired on or after such date.
       ``(B) Election by open-end fund for treatment as single 
     account.--If an open-end fund elects to have this 
     subparagraph apply with respect to one or more of its 
     stockholders--
       ``(i) subparagraph (A) shall not apply with respect to any 
     stock in such fund held by such stockholders, and
       ``(ii) all stock in such fund which is held by such 
     stockholders shall be treated as covered securities described 
     in section 6045(g)(3) without regard to the date of the 
     acquisition of such stock.

     A rule similar to the rule of the preceding sentence shall 
     apply with respect to a broker holding stock in an open-end 
     fund as a nominee.
       ``(3) Definitions.--For purposes of this section--
       ``(A) Open-end fund.--The term `open-end fund' means a 
     regulated investment company (as defined in section 851) 
     which is offering for sale or has outstanding any redeemable 
     security of which it is the issuer. Any stock which is traded 
     on an established securities exchange shall not be treated as 
     stock in an open-end fund.
       ``(B) Specified security; applicable date.--The terms 
     `specified security' and `applicable date' shall have the 
     meaning given such terms in section 6045(g).
       ``(d) Average Basis for Stock Acquired Pursuant to a 
     Dividend Reinvestment Plan.--
       ``(1) In general.--In the case of any stock acquired after 
     December 31, 2010, in connection with a dividend reinvestment 
     plan, the basis of such stock while held as part of such plan 
     shall be determined using one of the methods which may be 
     used for determining the basis of stock in an open-end fund.
       ``(2) Treatment after transfer.--In the case of the 
     transfer to another account of stock to which paragraph (1) 
     applies, such stock shall have a cost basis in such other 
     account equal to its basis in the dividend reinvestment plan 
     immediately before such transfer (properly adjusted for any 
     fees or other charges taken into account in connection with 
     such transfer).
       ``(3) Separate accounts; election for treatment as single 
     account.--Rules similar to the rules of subsection (c)(2) 
     shall apply for purposes of this subsection.
       ``(4) Dividend reinvestment plan.--For purposes of this 
     subsection--
       ``(A) In general.--The term `dividend reinvestment plan' 
     means any arrangement under which dividends on any stock are 
     reinvested in stock identical to the stock with respect to 
     which the dividends are paid.
       ``(B) Initial stock acquisition treated as acquired in 
     connection with plan.--Stock shall be treated as acquired in 
     connection with a dividend reinvestment plan if such stock is 
     acquired pursuant to such plan or if the dividends paid on 
     such stock are subject to such plan.''.
       (c) Information by Transferors To Aid Brokers.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61 is amended by inserting after section 6045 the 
     following new section:

     ``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH 
                   TRANSFERS OF COVERED SECURITIES TO BROKERS.

       ``(a) Furnishing of Information.--Every applicable person 
     which transfers to a broker (as defined in section 
     6045(c)(1)) a security which is a covered security (as 
     defined in section 6045(g)(3)) in the hands of such 
     applicable person shall furnish to such broker a written 
     statement in such manner and setting forth such information 
     as the Secretary may by regulations prescribe for purposes of 
     enabling such broker to meet the requirements of section 
     6045(g).
       ``(b) Applicable Person.--For purposes of subsection (a), 
     the term `applicable person' means--
       ``(1) any broker (as defined in section 6045(c)(1)), and
       ``(2) any other person as provided by the Secretary in 
     regulations.
       ``(c) Time for Furnishing Statement.--Except as otherwise 
     provided by the Secretary, any statement required by 
     subsection (a) shall be furnished not later than 15 days 
     after the date of the transfer described in such 
     subsection.''.
       (2) Assessable penalties.--Paragraph (2) of section 6724(d) 
     (defining payee statement) is amended by redesignating 
     subparagraphs (I) through (CC) as subparagraphs (J) through 
     (DD), respectively, and by inserting after subparagraph (H) 
     the following new subparagraph:
       ``(I) section 6045A (relating to information required in 
     connection with transfers of covered securities to 
     brokers),''.
       (3) Clerical amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61 is amended by 
     inserting after the item relating to section 6045 the 
     following new item:

``Sec. 6045A. Information required in connection with transfers of 
              covered securities to brokers.''.
       (d) Additional Issuer Information To Aid Brokers.--
       (1) In general.--Subpart B of part III of subchapter A of 
     chapter 61, as amended by subsection (b), is amended by 
     inserting after section 6045A the following new section:

     ``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF 
                   SPECIFIED SECURITIES.

       ``(a) In General.--According to the forms or regulations 
     prescribed by the Secretary, any issuer of a specified 
     security shall make a return setting forth--
       ``(1) a description of any organizational action which 
     affects the basis of such specified security of such issuer,
       ``(2) the quantitative effect on the basis of such 
     specified security resulting from such action, and
       ``(3) such other information as the Secretary may 
     prescribe.
       ``(b) Time for Filing Return.--Any return required by 
     subsection (a) shall be filed not later than the earlier of--
       ``(1) 45 days after the date of the action described in 
     subsection (a), or
       ``(2) January 15 of the year following the calendar year 
     during which such action occurred.
       ``(c) Statements To Be Furnished to Holders of Specified 
     Securities or Their Nominees.--According to the forms or 
     regulations prescribed by the Secretary, every person 
     required to make a return under subsection (a) with respect 
     to a specified security shall furnish to the nominee with 
     respect to the specified security (or certificate holder if 
     there is no nominee) a written statement showing--
       ``(1) the name, address, and phone number of the 
     information contact of the person required to make such 
     return,
       ``(2) the information required to be shown on such return 
     with respect to such security, and
       ``(3) such other information as the Secretary may 
     prescribe.

     The written statement required under the preceding sentence 
     shall be furnished to the holder on or before January 15 of 
     the year following the calendar year during which the action 
     described in subsection (a) occurred.
       ``(d) Specified Security.--For purposes of this section, 
     the term `specified security' has the meaning given such term 
     by section 6045(g)(3)(B). No return shall be required under 
     this section with respect to actions described in subsection 
     (a) with respect to a specified security which occur before 
     the applicable date (as defined in section 6045(g)(3)(C)) 
     with respect to such security.
       ``(e) Public Reporting in Lieu of Return.--The Secretary 
     may waive the requirements under subsections (a) and (c) with 
     respect to a specified security, if the person required to 
     make the return under subsection (a) makes publicly 
     available, in such form and manner as the Secretary 
     determines necessary to carry out the purposes of this 
     section--
       ``(1) the name, address, phone number, and email address of 
     the information contact of such person, and
       ``(2) the information described in paragraphs (1), (2), and 
     (3) of subsection (a).''.
       (2) Assessable penalties.--
       (A) Subparagraph (B) of section 6724(d)(1) of such Code 
     (defining information return) is amended by redesignating 
     clause (iv) and each of the clauses which follow as clauses 
     (v) through (xxii), respectively, and by inserting after 
     clause (iii) the following new clause:
       ``(iv) section 6045B(a) (relating to returns relating to 
     actions affecting basis of specified securities),''.
       (B) Paragraph (2) of section 6724(d) of such Code (defining 
     payee statement), as amended by subsection (c)(2), is amended 
     by redesignating subparagraphs (J) through (DD) as 
     subparagraphs (K) through (EE), respectively, and by 
     inserting after subparagraph (I) the following new 
     subparagraph:
       ``(J) subsections (c) and (e) of section 6045B (relating to 
     returns relating to actions affecting basis of specified 
     securities),''.
       (3) Clerical amendment.--The table of sections for subpart 
     B of part III of subchapter A of chapter 61 of such Code, as 
     amended by subsection (b)(3), is amended by

[[Page 8234]]

     inserting after the item relating to section 6045A the 
     following new item:

``Sec. 6045B. Returns relating to actions affecting basis of specified 
              securities.''.
       (e) Effective Date.--
       (1) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall take 
     effect on January 1, 2010.
       (2) Extension of period for statements sent to customers.--
     The amendments made by subsection (a)(3) shall apply to 
     statements required to be furnished after December 31, 2008.

     SEC. 742. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF 
                   INTEREST.

       (a) In General.--Paragraphs (5)(D) and (6) of section 
     864(f) are each amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2009''.
       (b) Transitional Rule.--Subsection (f) of section 864 is 
     amended by adding at the end the following new paragraph:
       ``(7) Transition.--In the case of the first taxable year to 
     which this subsection applies, the increase (if any) in the 
     amount of the interest expense allocable to sources within 
     the United States by reason of the application of this 
     subsection shall be 78 percent of the amount of such increase 
     determined without regard to this paragraph.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2008.

     SEC. 743. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       (a) Repeal of Adjustment for 2012.--Subparagraph (B) of 
     section 401(1) of the Tax Increase Prevention and 
     Reconciliation Act of 2005 is amended by striking the 
     percentage contained therein and inserting ``100 percent''.
       (b) Modification of Adjustment for 2013.--The percentage 
     under subparagraph (C) of section 401(1) of the Tax Increase 
     Prevention and Reconciliation Act of 2005 in effect on the 
     date of the enactment of this Act is increased by 13 
     percentage points.

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

     SEC. 751. SHORT TITLE.

       This subtitle may be cited as the ``Housing Tax Credit 
     Coordination Act of 2008''.

     SEC. 752. APPROVALS BY DEPARTMENT OF HOUSING AND URBAN 
                   DEVELOPMENT.

       (a) Administrative and Procedural Changes.--
       (1) In general.--The Secretary of Housing and Urban 
     Development (in this section referred to as the 
     ``Secretary'') shall, not later than the expiration of the 6-
     month period beginning upon after the date of the enactment 
     of this Act, implement administrative and procedural changes 
     to expedite approval of multifamily housing projects under 
     the jurisdiction of the Department of Housing and Urban 
     Development that meet the requirements of the Secretary for 
     such approvals.
       (2) Projects.--The multifamily housing projects referred to 
     in paragraph (1) shall include--
       (A) projects for which assistance is provided by such 
     Department in conjunction with any low-income housing tax 
     credits under section 42 of the Internal Revenue Code of 1986 
     or tax-exempt housing bonds; and
       (B) existing public housing projects and assisted housing 
     projects, for which approval of the Secretary is necessary 
     for transactions, in conjunction with any such low-income 
     housing tax credits or tax-exempt housing bonds, involving 
     the preservation or rehabilitation of the project.
       (3) Changes.--The administrative and procedural changes 
     referred to in paragraph (1) shall include all actions 
     necessary to carry out paragraph (1), which may include--
       (A) improving the efficiency of approval procedures;
       (B) simplifying approval requirements,
       (C) establishing time deadlines or target deadlines for 
     required approvals;
       (D) modifying division of approval authority between field 
     and national offices;
       (E) improving outreach to project sponsors regarding 
     information that is required to be submitted for such 
     approvals;
       (F) requesting additional funding for increasing staff, if 
     necessary; and
       (G) any other actions which would expedite approvals.

     Any such changes shall be made in a manner that provides for 
     full compliance with any existing requirements under law or 
     regulation that are designed to protect families receiving 
     public and assisted housing assistance, including income 
     targeting, rent, and fair housing provisions, and shall also 
     comply with requirements regarding environmental review and 
     protection and wages paid to laborers.
       (b) Consultation.--The Secretary shall consult with the 
     Commissioner of the Internal Revenue Service and take such 
     actions as are appropriate in conjunction with such 
     consultation to simplify the coordination of rules, 
     regulations, forms, and approval requirements for multifamily 
     housing projects projects for which assistance is provided by 
     such Department in conjunction with any low-income housing 
     tax credits under section 42 of the Internal Revenue Code of 
     1986 or tax-exempt housing bonds.
       (c) Recommendations.--In implementing the changes required 
     under this section, the Secretary shall solicit 
     recommendations regarding such changes from project owners 
     and sponsors, investors and stakeholders in housing tax 
     credits, State and local housing finance agencies, public 
     housing agencies, tenant advocates, and other stakeholders in 
     such projects.
       (d) Report.--Not later than the expiration of the 9-month 
     period beginning on the date of the enactment of this Act, 
     the Secretary shall submit a report to the Committee on 
     Financial Services of the House of Representatives and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate that--
       (1) identifies the actions taken by the Secretary to comply 
     with this section;
       (2) includes information regarding any resulting 
     improvements in the expedited approval for multifamily 
     housing projects;
       (3) identifies recommendations made pursuant to subsection 
     (c);
       (4) identifies actions taken by the Secretary to implement 
     the provisions in the amendments made by sections 4 and 5 of 
     this Act; and
       (5) makes recommendations for any legislative changes that 
     are needed to facilitate prompt approval of assistance for 
     such projects.

     SEC. 753. PROJECT APPROVALS BY RURAL HOUSING SERVICE.

       Section 515(h) of the Housing Act of 1949 (42 U.S.C. 1485) 
     is amended--
       (1) by inserting ``(1) Condition.--'' after ``(h)''; and
       (2) by adding at the end the following new paragraphs:
       ``(2) Actions to Expedite Project Approvals.--
       ``(A) In general.--The Secretary shall take actions to 
     facilitate timely approval of requests to transfer ownership 
     or control, for the purpose of rehabilitation or 
     preservation, of multifamily housing projects for which 
     assistance is provided by the Secretary of Agriculture in 
     conjunction with any low-income housing tax credits under 
     section 42 of the Internal Revenue Code of 1986 or tax-exempt 
     housing bonds.
       ``(B) Consultation.--The Secretary of Agriculture shall 
     consult with the Commissioner of the Internal Revenue Service 
     and take such actions as are appropriate in conjunction with 
     such consultation to simplify the coordination of rules, 
     regulations, forms (including applications forms for project 
     transfers), and approval requirements multifamily housing 
     projects for which assistance is provided by the Secretary of 
     Agriculture in conjunction with any low-income housing tax 
     credits under section 42 of the Internal Revenue Code of 1986 
     or tax-exempt housing bonds.
       ``(C) Existing requirements.--Any actions taken pursuant to 
     this paragraph shall be taken in a manner that provides for 
     full compliance with any existing requirements under law or 
     regulation that are designed to protect families receiving 
     Federal housing assistance, including income targeting, rent, 
     and fair housing provisions, and shall also comply with 
     requirements regarding environmental review and protection 
     and wages paid to laborers.
       ``(D) Recommendations.--In implementing the changes 
     required under this paragraph, the Secretary shall solicit 
     recommendations regarding such changes from project owners 
     and sponsors, investors and stakeholders in housing tax 
     credits, State and local housing finance agencies, tenant 
     advocates, and other stakeholders in such projects.''.

     SEC. 754. USE OF FHA LOANS WITH HOUSING TAX CREDITS.

       (a) Subsidy Layering Requirements.--Subsection (d) of 
     section 102 of the Department of Housing and Urban 
     Development Reform Act of 1989 (42 U.S.C. 3545(d)) is 
     amended--
       (1) in the first sentence, by inserting after ``assistance 
     within the jurisdiction of the Department'' the following: 
     ``, as such term is defined in subsection (m), except that 
     for purposes of this subsection such term shall not include 
     any mortgage insurance provided pursuant to title II of the 
     National Housing Act (12 U.S.C. 1707 et seq.)''; and
       (2) in the second sentence, by inserting ``such'' before 
     ``assistance''.
       (b) Cost Certification.--Section 227 of National Housing 
     Act (12 U.S.C. 1715r) is amended--
       (1) in the matter preceding paragraph (a) (relating to a 
     definition of ``new or rehabilitated multifamily housing'')--
       (A) in the first sentence--
       (i) by striking ``Notwithstanding'' and inserting ``Except 
     as provided in subsection (b) and notwithstanding''; and
       (ii) by redesignating clauses (a) and (b) as clauses (A) 
     and (B), respectively; and
       (B) by striking ``As used in this section--'';
       (2) in paragraph (c) (relating to a definition of ``actual 
     cost'')--
       (A) in clause (i), by redesignating clauses (1) and (2) as 
     clauses (I) and (II), respectively; and
       (B) in clause (ii), by redesignating clauses (1) and (2) as 
     clauses (I) and (II), respectively;
       (3) by redesignating paragraphs (a), (b), and (c) as 
     paragraphs (1), (2), and (3), respectively;

[[Page 8235]]

       (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. 755. OTHER HUD PROGRAMS.

       (a) Section 8 Assistance.--
       (1) PHA project-based assistance.--Section 8(o)(13) of the 
     United States Housing Act of 1937 (42 U.S.C. 1437f(o)(13)) is 
     amended--
       (A) in subparagraph (D)(i)--
       (i) by striking ``building'' and inserting ``project''; and
       (ii) by adding at the end the following: ``For purposes of 
     this subparagraph, the term `project' means a single 
     building, multiple contiguous buildings, or multiple 
     buildings on contiguous parcels of land.'';
       (B) in the first sentence of subparagraph (F), by striking 
     ``10 years'' and inserting ``15 years'';
       (C) In subparagraph (G)--
       (i) by inserting after the period at the end of the first 
     sentence the following: ``Such contract may, at the election 
     of the public housing agency and the owner of the structure, 
     specify that such contract shall be extended for renewal 
     terms of up to 15 years each, if the agency makes the 
     determination required by this subparagraph and the owner is 
     in compliance with the terms of the contract.''; and
       (ii) by adding at the end the following: ``A public housing 
     agency may agree to enter into such a contract at the time it 
     enters into the initial agreement for a housing assistance 
     payment contract or at any time thereafter that is before the 
     expiration of the housing assistance payment contract.'';
       (D) in subparagraph (H), by inserting before the period at 
     the end of the first sentence the following: ``, except that 
     in the case of a contract unit that has been allocated low-
     income housing tax credits and for which the rent limitation 
     pursuant to such section 42 is less than the amount that 
     would otherwise be permitted under this subparagraph, the 
     rent for such unit may, in the sole discretion of a public 
     housing agency, be established at the higher section 8 rent, 
     subject only to paragraph (10)(A)'';
       (E) in subparagraph (I)(i), by inserting before the 
     semicolon the following: ``, except that the contract may 
     provide that the maximum rent permitted for a dwelling unit 
     shall not be less than the initial rent for the dwelling unit 
     under the initial housing assistance payments contract 
     covering the unit''; and
       (F) by adding at the end the following new subparagraphs:
       ``(L) Use in cooperative housing and elevator buildings.--A 
     public housing agency may enter into a housing assistance 
     payments contract under this paragraph with respect to--
       ``(i) dwelling units in cooperative housing; and
       ``(ii) notwithstanding subsection (c), dwelling units in a 
     high-rise elevator project, including such a project that is 
     occupied by families with children, without review and 
     approval of the contract by the Secretary.
       ``(M) Reviews.--
       ``(i) Subsidy layering.--A subsidy layering review in 
     accordance with section 102(d) of the Department of Housing 
     and Urban Development Reform Act of 1989 (42 U.S.C. 3545(d)) 
     shall not be required for assistance under this paragraph in 
     the case of a housing assistance payments contract for an 
     existing structure, or if a subsidy layering review has been 
     conducted by the applicable State or local agency.
       ``(ii) Environmental review.--A public housing agency shall 
     not be required to undertake any environmental review before 
     entering into a housing assistance payments contract under 
     this paragraph for an existing structure, except to the 
     extent such a review is otherwise required by law or 
     regulation.''.
       (2) Voucher program rent reasonableness.--Section 8(o)(10) 
     of the United States Housing Act of 1937 (42 U.S.C. 
     1437f(o)(10)) is amended by adding at the end the following 
     new subparagraph;
       ``(F) Tax credit projects.--In the case of a dwelling unit 
     receiving tax credits pursuant to section 42 of the Internal 
     Revenue Code of 1986 or for which assistance is provided 
     under subtitle A of title II of the Cranston Gonzalez 
     National Affordable Housing Act of 1990, for which a housing 
     assistance contract not subject to paragraph (13) of this 
     subsection is established, rent reasonableness shall be 
     determined as otherwise provided by this paragraph, except 
     that--
       ``(i) comparison with rent for units in the private, 
     unassisted local market shall not be required if the rent is 
     equal to or less than the rent for other comparable units 
     receiving such tax credits or assistance in the project that 
     are not occupied by families assisted with tenant-based 
     assistance under this subsection; and
       ``(ii) the rent shall not be considered reasonable for 
     purposes of this paragraph if it exceeds the greater of--

       ``(I) the rents charged for other comparable units 
     receiving such tax credits or assistance in the project that 
     are not occupied by families assisted with tenant-based 
     assistance under this subsection; and
       ``(II) the payment standard established by the public 
     housing agency for a unit of the size involved.''.

       (b) Section 202 Housing for Elderly Persons.--Subsection 
     (f) of section 202 of the Housing Act of 1959 (12 U.S.C. 
     1701q(f)) is amended--
       (1) by striking ``Selection Criteria.--'' and inserting 
     ``Initial Selection Criteria and Processing.--(1) Selection 
     criteria.--'';
       (2) by redesignating paragraphs (1) through (7) as 
     subparagraphs (A) through (G), respectively; and
       (3) by adding at the end the following new paragraph:
       ``(2) Delegated Processing.--

[[Page 8236]]

       ``(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.''.

  Subtitle E--Limitation on Sale, Foreclosure, or Seizure of Property 
                        Owned by Servicemembers

     SEC. 761. LIMITATION ON SALE, FORECLOSURE, OR SEIZURE OF 
                   PROPERTY OWNED BY SERVICEMEMBERS DURING ONE-
                   YEAR PERIOD FOLLOWING PERIOD OF MILITARY 
                   SERVICE.

       (a) Limitation.--Section 303(c) of the Servicemembers Civil 
     Relief Act is amended by striking ``90 days'' and inserting 
     ``one year''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply with respect to any sale, foreclosure, or seizure 
     of property on or after the date of the enactment of this 
     Act.

     SEC. 762. PROVISION OF FINANCIAL DISCLOSURE TO SERVICEMEMBERS 
                   WHO DEFAULT ON CERTAIN OBLIGATIONS.

       (a) Provision of Disclosure Required.--Section 303 of the 
     Servicemembers Civil Relief Act (50 U.S.C. App. 533) is 
     amended by adding at the end the following new subsection:
       ``(e) Provision of Financial Disclosure.--In the case of a 
     servicemember who defaults on an obligation described in 
     subsection (a) for two consecutive months, the mortgagor or 
     loan servicer of the obligation shall provide to the 
     servicemember a written financial disclosure describing the 
     servicemember's liability with respect to the obligation for 
     the period during which a sale, foreclosure, or seizure of 
     the property is not valid under subsection (c).''.
       (b) Effective Date.--Subsection (e) of section 303 of the 
     Servicemembers Civil Relief Act (50 U.S.C. App. 533), as 
     added by subsection (a), shall apply with respect to a 
     servicemember who defaults on an obligation on or after the 
     date of the enactment of this Act.

  The text of House amendment No. 3 to the Senate amendment is as 
follows:

       At the end of the matter proposed to be inserted by the 
     amendment of the Senate to the text of the bill, add the 
     following new section:

     SEC. __. RULE OF CONSTRUCTION.

       (a) In General.--No provision of this Act, the Home Owners' 
     Loan Act, or title LXII of the Revised Statutes of the United 
     States (commonly referred to as the ``National Bank Act'') 
     may be construed as preempting the application, to any 
     entity, of any State law regulating the foreclosure of 
     residential real property in that State or the treatment of 
     foreclosed property.
       (b) No Negative Implication.--This section shall not be 
     construed as affecting in any way the applicability of any 
     other type of State law to any Federal depository institution 
     (as defined in section 3(c)(4) of the Federal Deposit 
     Insurance Act) or to any agent or subsidiary of any such 
     depository institution.

  The SPEAKER pro tempore. Pursuant to House Resolution 1175, debate 
shall not exceed 3 hours, with 2 hours equally divided and controlled 
by the chairman and ranking minority member of the Committee on 
Financial Services, and 1 hour equally divided and controlled by the 
chairman and ranking minority member of the Committee on Ways and 
Means.
  The gentleman from Massachusetts (Mr. Frank) and the gentleman from 
Alabama (Mr. Bachus) each will control 1 hour; and the gentleman from

[[Page 8237]]

Massachusetts (Mr. Neal) and the gentleman from Louisiana (Mr. McCrery) 
each will control 30 minutes.
  The Chair recognizes the gentleman from Massachusetts (Mr. Neal).
  Mr. NEAL of Massachusetts. Mr. Speaker, I yield myself such time as I 
might consume.
  Mr. Speaker, I want to begin by thanking Mr. Frank. In the 30 years 
that I've known him, I've yet to meet anybody who has done a better job 
of mastering the most arcane detail of complicated housing policy. In 
fact, in some measure, we're here today because of the energy that he's 
brought to the task at hand.
  Mr. Speaker, I also rise today in support of this housing assistance 
tax package which has been reported by the Ways and Means Committee. I 
want to thank Chairman Rangel for his leadership on this very important 
national issue.
  There is little doubt that the sagging housing industry, now at 
historic lows, has been a drag on our national economy. This 
legislation would stimulate that industry and help families who have 
been caught up in this struggling economy.
  This legislation provides tax credits for first-time homebuyers, and 
it boosts credits for construction of affordable housing. It allows 
families to deduct property taxes who couldn't do so before.

                              {time}  1230

  It increases mortgage revenue bonds and it allows the States to 
refinance troubled subprime loans.
  This assistance is targeted to those who need it most. It will also 
help bring economic stability to our communities. And these provisions 
are revenue neutral, I emphasize ``revenue neutral,'' using a provision 
from the President's own budget to pay for much of the cost.
  Mr. Speaker, this bill has been endorsed by the Home Builders, the 
Realtors and State Housing Administrators. It passed with the support 
of 12 Republican members of the Ways and Means Committee, including my 
friend and the distinguished ranking member, Mr. McCrery. It is broadly 
supported, it's bipartisan in nature, and I am proud to bring it to 
this House today.
  There are but two changes to our amendment. One is a package of 
technical improvements from the Financial Services Committee to better 
coordinate the various housing tax and HUD programs. The other is--and 
I hope that everybody will listen to this suggestion--a provision 
approved by the Veterans Affairs Committee to extend from 90 days to 1 
year the protection against foreclosure for servicemembers returning 
from active duty. I can't imagine that there is a voice in this body 
who would not be supportive of that initiative, the idea that in 
Afghanistan and/or in Iraq, that a servicemember who is doing all 
that's asked of him or her every day would find themselves facing 
mortgage foreclosure because of their military service.
  As chairman of the Select Revenue Measures Subcommittee, again I 
stand in strong support of the legislation that's before us today. It 
includes a number of improvements to the affordable housing program.
  Our subcommittee considered these provisions last summer. And at the 
urging of housing officials, developers, and advocates for low-income 
families, they have all been included in the Ways and Means amendment 
that we consider today. I urge its adoption.
  Mr. Speaker, I reserve the balance of my time.
  Mr. McCRERY. Mr. Speaker, I yield myself so much time as I may 
consume.
  Mr. Speaker, it is with regret that I rise to urge my colleagues to 
vote against the tax amendment to this bill. Let me be clear, however, 
in stating that my opposition to this section is not the result of a 
disagreement with my friend, Mr. Neal, or with the chairman of the 
committee, Mr. Rangel. We were able to work together so that the 
housing bill reported by the Ways and Means Committee enjoyed 
bipartisan support.
  And while that package contains many provisions that do make sense, I 
think the House should have had the opportunity to consider at least 
one alternative. Unfortunately, the procedural straitjacket imposed by 
the majority for consideration of the housing bill today is something 
that I simply cannot ignore. For that reason, I will be voting against 
this amendment.
  We all understand the severity of the housing crisis. Housing starts 
declined to 680,000 in March of 2008, the lowest level since January of 
1991. Since hitting a peak in early 2006, housing starts have dropped 
by 62 percent. There is currently a 9\1/2\ month supply of unsold 
homes, more than double the 10-year average. With those facts in mind, 
it is not surprising that home prices are falling, and the contraction 
in the residential real estate market is an anchor around our economy.
  The Tax Code didn't get us into this mess, and there is only so much 
the Tax Code can do to get us out. The package approved by the 
Committee on Ways and Means contains many well-designed improvements, 
including improvements to make the low-income housing tax credit more 
efficient. I also think allowing those credits to be claimed against 
both the regular tax and the AMT is a step in the right direction.
  The language expanding the Mortgage Revenue Bond program and allowing 
proceeds of the bonds to be used to refinance existing home mortgages, 
as suggested by the President, is certainly worth doing. And although I 
have some reservations about the design of the first-time homebuyer's 
tax credit, the recapture provision, if we include it, makes it more 
like a no-interest loan and not really a tax credit.
  Still, I share the hope of the sponsors that this provision will help 
induce some home purchases this year and stabilize the market. We 
desire that because we recognize that potential homebuyers right now 
are reading the headlines every day, they're waiting on the sidelines 
to get to the bottom of the market. Well, as prices keep falling, more 
people who might think about buying a home decide to keep waiting, and 
so that creates a self-perpetuating cycle of declining home prices. 
Maybe, just maybe, this tax credit could induce some of those waiting 
on the sidelines to go ahead, jump in and buy a home. That's our 
desire. I think it could have been better, as I say, designed as a pure 
tax credit with no recapture provision, but still, I think it's better 
than nothing.
  I understand the concern raised by some that an artificial temporary 
floor, so to speak, will not restore long-term stability to the housing 
market and could even result in further price declines when the 
temporary benefit lapses. But on balance, I think this provision holds 
some hope of helping us to reverse this slide in housing prices, or at 
least stop it for a while and give it a chance to recover.
  At the same time, there are elements of this package that, frankly, I 
would prefer not be in here. Given the nature of the housing crisis, I 
think the House should follow the Senate's lead and waive PAYGO, for 
example. I think this is an emergency. We shouldn't be responding to 
this emergency situation with tax increases.
  And there are specific items in here that if it were up to me might 
not have made the cut. But democracy is about compromise, and the bill 
produced by the Ways and Means Committee was something that I supported 
and would like to vote for again here on the House floor today. But the 
decision made by the majority leadership to debate this legislation as 
an amendment to a Senate-passed bill deprives the House of the chance 
to consider ways to improve it, even to the extent of denying the 
minority a motion to recommit.
  Now, I recognize that tax bills traditionally come to the floor under 
restrictive rules, and I support that. But as I documented in a letter 
last year to the distinguished chairwoman of the Rules Committee, in 
years when Republicans were in the majority, on one tax bill after 
another the Republican majority offered the Democratic minority not 
only a motion to recommit, but a substitute.
  Mr. Speaker, at this time, I would like to insert the text of that 
letter to

[[Page 8238]]

the chairwoman of the Rules Committee into the Congressional Record.

                                         House of Representatives,


                                  Committee on Ways and Means,

                                   Washington, DC, August 1, 2007.
     Chairwoman Louise McIntosh Slaughter,
     Committee on Rules, House of Representatives, The Capitol, 
         Washington, DC.
     Ranking Member David Dreier,
     Committee on Rules, House of Representatives, Longworth 
         Building, Washington, DC.
       Dear Chairwoman Slaughter and Ranking Member Dreier: This 
     week the House is expected to consider H.R. 2776, the 
     ``Renewable Energy and Energy Conservation Act of 2007.'' 
     This will be the first tax bill, reported by the Ways and 
     Means Committee, to be considered under a rule in the 110th 
     Congress. As you are aware, the House has a long history of 
     supporting rules for tax bills which make in order an 
     amendment in the nature of a substitute. Numerous examples, 
     dating back to the 104th Congress, include:
       1. Death Tax Repeal Permanency Act of 2005;
       2. Tax Increase Prevention and Reconciliation Act of 2005;
       3. Charitable Giving Act of 2003;
       4. Death Tax Repeal Permanency Act of 2003;
       5. Social Security Protection Act of 2003;
       6. Pension Security Act of 2003;
       7. Tax Administration Good Government Act;
       8. A bill to extend permanently the marriage penalty relief 
     provided under the Economic Growth and Tax Relief 
     Reconciliation Act of 2001;
       9. Middle-Class Alternative Minimum Tax Relief Act of 2004:
       10. A bill to permanently extend the ten percent individual 
     income tax bracket;
       11. Child Credit Preservation and Expansion Act of 2004;
       12. Economic Growth and Tax Relief Act of 2001;
       13. Marriage Penalty and Family Tax Relief Act of 2001;
       14. Care Act of 2002;
       15. Death Tax Elimination Act of 2001;
       16. Economic Growth and Tax Relief Reconciliation Act of 
     2001;
       17. Permanent Death Tax Repeal Act of 2002;
       18. Job Creation and Worker Assistance Act of 2002;
       19. Pension Security Act of 2002;
       20. The WORK Act of 2002;
       21. Retirement Savings Security Act of 2002;
       22. Marriage Tax Penalty Relief Act of 2000;
       23. Death Tax Elimination Act of 2000;
       24. Retirement Security and Savings Act of 2000;
       25. Foster Care Independence Act of 1999;
       26. Financial Freedom Act of 1999;
       27. Fathers Count Act of 1999;
       28. Marriage Tax Relief Reconciliation Act of 2000;
       29. Social Security Benefits Tax Relief Act of 2000;
       30. Education Savings and School Excellence Act of 1998;
       31. Taxpayer Relief Act of 1998;
       32. Job Creation and Wage Enhancement Act of 1995;
       33. A bill to permanently extend the deduction for the 
     health insurance costs of self-employed individuals, and for 
     other purposes;
       34. Tax Fairness and Deficit Reduction Act of 1995; and,
       35. Health Insurance Portability and Accountability Act of 
     1996.
       While the usual practice has been to provide for the 
     consideration of an amendment in the nature of a substitute, 
     I recognize that there have been instances where such 
     consideration was not allowed under the rule. In many of 
     these cases, the amendment was either non-germane to the 
     underlying bill, was not an actual substitute amendment, or 
     was not compliant with the Budget Act.
       I have submitted an amendment in the nature of a substitute 
     to H. R. 2776. According to the Joint Committee on Taxation, 
     the amendment complies with Clause 10 of House Rule 21, 
     otherwise known as the ``paygo rule.'' In addition, through 
     consultations with the Office of the Parliamentarian, I am 
     assured that the amendment is germane to H.R. 2776. To my 
     knowledge, it would violate no rules of the House.
       I hope that the Committee will make in order my amendment 
     as part of the consideration of H.R. 2776. Please do not 
     hesitate to contact me if you have any questions.
       With kindest regards, I am
           Sincerely yours,
                                                      Jim McCrery,
                                                   Ranking Member.

  At the same time, I recognize that it is not uncommon to resolve 
differences between the House and the Senate by sending amendments back 
and forth across the Capitol. That's what's being done today. But what 
makes today's procedure so unusual, and to some of us so frustrating, 
is that this House never had a chance to work its will on housing 
legislation. This is not a housing bill that went to the Senate, was 
amended, and then sent back to us. This was an energy bill for heaven's 
sake. It was gutted in the Senate, replaced with housing provisions, 
sent back to us, and that is what has created this unusual opportunity 
for the majority to deny the minority even a motion to recommit, and 
it's wrong.
  So Mr. Speaker, I think that action reflects poorly on this House. 
It's a trampling of the rights of all of our Members, not just the 
minority. And I, therefore, plan to vote against all of these 
amendments and urge my colleagues to do the same until we can get a 
fair hearing, a fair rule governing the debate of these very important 
matters.
  With that, Mr. Speaker, I reserve the balance of my time.
  Mr. Speaker, I ask unanimous consent at this time to allow the 
gentleman from New York (Mr. Reynolds), a member of the Ways and Means 
Committee, to control the remainder of time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Louisiana?
  There was no objection.
  Mr. NEAL of Massachusetts. Mr. Speaker, I do offer some 
acknowledgement of the constraints that we find ourselves within today 
on the House floor, and I think there's some accuracy as to what Mr. 
McCrery had to say. However, there is another very important point, and 
that is, that the issues were vetted at the committee level and there 
was ample opportunity and a full and vigorous debate ensued in the Ways 
and Means Committee in which every opinion was welcomed.
  With that, I would like to yield 2 minutes to the gentleman from 
Michigan (Mr. Levin).
  Mr. LEVIN. I rise in strong support.
  There has been some bipartisanship that has motored this legislation, 
and I hope it won't break down today.
  The crisis in housing needs the attention and the support of 
everybody. It needs much more than tea and sympathy, it needs 
legislation. Recently I met with mayors and managers from the 12th 
District, in Macomb County and southeast Oakland. And they all talked 
about the plight of the homeowner, the plight of the communities when 
houses are shut down. We have to act. And I pay tribute, all of us 
should, to the Committee on Financial Services.
  And let me say just a word about the tax provisions. They would 
provide credit to first-time homebuyers. Essential. It would improve 
access to low-income housing. Essential. It would allow families to 
deduct property taxes through the standard deduction. It's a good 
experiment. It should have been done earlier. And it also would allow 
Federal home loan banks to help relieve pressure on credit markets.
  I read the Statement of Administrative Policy that said it was risky 
and it was an expansion of the purpose of the banks, and I think it's 
incorrect in both respects. So I just want to close with the sense of 
urgency that I think all of us feel. Mr. Bernanke said that if markets 
were simply allowed to follow their own course, it could ``destabilize 
communities, reduce the property values of nearby homes and lower 
municipal tax revenues.''
  What more do we need to impel us to act than the flight of families, 
the plight of communities, and the plight of municipalities? Let's vote 
on a bipartisan bill. Let's vote for this bill.
  Mr. REYNOLDS. Mr. Speaker, it is now my pleasure to yield 3 minutes 
to the distinguished senior member of the Republican side of Ways and 
Means, Wally Herger of California.
  Mr. HERGER. Mr. Speaker, I'm troubled by the housing catch-all bill 
before the House of Representatives today from a commonsense, pro-
American taxpayer position.
  The bill would enable the already troubled FHA to take on an 
additional $300 million in distressed mortgage liabilities, loans that 
have a good chance of going into default. This effectively transfers 
risk from those holding bad loans to those taxpayers who made prudent 
decisions in the first place.
  More than nine out of 10 mortgage holders make payments on time. They 
would now be on the hook for the bad mortgage debt, as will renters 
saving

[[Page 8239]]

for a first-time home and those who own their own homes outright. This 
bill sends the signal that there are no real consequences for poor 
lending or borrowing practices, and encourages more of the same 
behavior that led us here in the first place.
  Further, to offset some of the tax giveaways in the bill, the 
Democrat majority proposes billions of dollars in what amounts to a 
retroactive tax increase on American employers with operations in 
foreign markets. What our economy really needs is tax policies that 
foster greater, not less, competitiveness for the U.S. employers.
  Finally, it is truly disappointing that the Democrat majority has 
chosen to bring this bill up in a lock down, unamendable manner. I urge 
my colleagues to reject this measure.
  Mr. NEAL of Massachusetts. Mr. Speaker, I would remind the audience, 
including the Members that are on the floor, that this procedure was 
fully vetted in the Ways and Means Committee. It passed 35-5. That 
means we picked up 12 members of the minority who supported this 
legislation.
  With that, I would like to yield 2 minutes to my friend, the 
distinguished gentleman from New Jersey (Mr. Pascrell).
  Mr. PASCRELL. Mr. Speaker, you can't have it both ways. You can't say 
that this is an emergency and we've got to get something done, and then 
in the other breath say let's go through the technical procedures. 
They're contradictory.
  This bill was vetted. And housing inventories in our communities 
continue to increase and home prices continue to decline. We need to 
incentivize Americans to reenter the housing market. It affects so much 
of our economy. I think this amendment, this bill takes giant leaps 
towards accomplishing this goal. I applaud Mr. Rangel for his efforts 
and the 12 Members from the distinguished opposition who joined.
  There is an array of good work here, but in particular I'm heartened 
that included within is a tax benefit for most first-time homebuyers. 
This is a truly meaningful incentive, and one that will pull out a 
large swath of people from the sidelines and back into the market, 
having a ripple effect throughout the rest of the economy. After all, 
without bold action to spur housing market activity, inventories across 
the country may continue to grow, placing downward pressure on home 
prices and wiping out equity that so many Americans have worked so hard 
to build.

                              {time}  1245

  We don't want more homes to be in that situation. We prove nothing. 
There is a place for the Federal Government, therefore, in this 
terrible situation that has occurred and developed over the last year.
  This bill, when passed, will allow middle class families to receive a 
tax benefit that is equivalent to an interest-free loan of $7,000 
towards the purchase of their first home. It will also allow existing 
homeowners who claim the standard deduction to an additional standard 
deduction for property taxes, up to $700 for a married couple filing 
jointly.
  When we first addressed this issue in the Ways and Means Committee, 
the National Association of Realtors found that our legislation would 
generate about 1 million sales----
  The SPEAKER pro tempore. The gentleman's time has expired.
  Mr. NEAL of Massachusetts. Mr. Speaker, I yield the gentleman an 
additional 30 seconds.
  Mr. PASCRELL. The National Association of Realtors found that our 
legislation would generate about 1 million sales to first-time 
homebuyers and stimulate nearly $130 billion in increased economic 
activity. You tell me that that's not worth it in this economy.
  Studies have shown that this will help reduce housing inventory by 
900,000 homes, which will, in turn, stabilize prices.
  This is a wise and necessary course to take. Because of this we also 
salute Chairman Rangel's leadership. I hope all my colleagues will 
enthusiastically support this proposal. It's good for America.
  Mr. REYNOLDS. Mr. Speaker, I reserve the balance of my time.
  Mr. NEAL of Massachusetts. Mr. Speaker, at this time I would like to 
yield to the gentlewoman from Pennsylvania (Ms. Schwartz) for 2 
minutes.
  Ms. SCHWARTZ. Mr. Speaker, I want to thank Chairman Rangel and 
Chairman Frank for acting so swiftly and wisely to stem the tide of 
foreclosures and address the sagging home values that are hurting 
families and communities across our Nation.
  By addressing a whole range of issues, from the continuing 
foreclosure crisis to the new and existing homes that are sitting 
vacant and further depressing the housing market, this package 
represents a significant step toward stabilizing the economy and 
restoring consumer confidence.
  I am very proud of the portion of this package that came through the 
Committee on Ways and Means, particularly a timely, targeted, and well-
designed first-time homebuyers credit; a new Federal tax deduction to 
help families meet rising State property taxes; and expansion of the 
ability of cities and States to raise capital for infrastructure 
improvements by partnering with the Federal Home Loan Banks.
  In particular, I am pleased that the package includes a provision 
that I championed, along with my Republican colleague Jon Porter, which 
would enable State housing finance agencies to raise capital through 
tax-exempt mortgage revenue bonds and use these additional funds to 
help at-risk borrowers refinance their subprime loans, access mortgages 
at fair rates, and enable families to meet their financial obligations 
and stay in their homes. This provision will work hand in hand with the 
Federal Housing Agency reforms that have come out of Chairman Frank's 
committee and will allow States to play a role in addressing the needs 
of their local communities.
  As Federal Reserve Chairman Ben Bernanke put it, `` . . . doing what 
we can to avoid preventable foreclosures is not just in the interest of 
lenders and borrowers, it is in everyone's interest.''
  It is in everyone's interest that we overcome this crisis in the 
housing market, that we work to stabilize the economy, and we work to 
maintain and build our competitive edge in the global economy. The 
proposal before us is a comprehensive approach to this challenge, and I 
hope that it will be supported by all.
  Mr. REYNOLDS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, as the debate continues from the Ways and Means portion 
of the housing bill, I believe the ranking member has set very clear 
remarks on where many of us find ourselves with this debate today.
  Chairman Rangel and Ranking Member McCrery have a superb working 
relationship, and they have set the tenor of what has been hard work on 
both sides of the aisle and bipartisan compromise and consensus to 
craft some good legislation that has passed this body and has become 
law. And as I manage this portion for the minority and look across to 
my colleague from Massachusetts, he and I also share in commonsense 
solutions to strengthen America and to resolve some of the problems and 
challenges that are there. And this bill is not an exception to that. 
We worked at the spirit of request of both the Chair and ranking member 
to reach compromise and consensus to improve the Ways and Means 
jurisdiction on housing.
  And I look at it with sadness in two parts. One, as a realtor who 
looks at the industry, knowing across the country that we face 
challenges, and the statistics that Ranking Member McCrery outlined, 
680,000 fewer starts, a reduction in high percentages of what the 
industry is about, seeing what the drag has been on our country's 
growth. And we need to work through good, solid solutions that need a 
hearing process that involve the Congress, particularly this body, in a 
debate of solution.
  And when we look at the entire complexity of this bill, not only as a 
Ways and Means member, not only as someone who understands the housing 
world, but also as a former member of the Rules Committee, I know that 
the Members of this body were trampled on

[[Page 8240]]

based on the decision of taking an energy bill and making the housing 
provisions, one of the challenges of the country today, short-circuited 
as an amendment to circumvent debate, amendments, recommittals, and 
substitutes that would be afforded the minority in any other instance.
  And as I look at this and the frustration I heard in the ranking 
member's message of what is being trampled on on rights of the minority 
to make presentations, quite frankly, maybe some majority Members on 
amendments, recommittal, and substitute, I find it disturbing that this 
is the beginning of strong trends of kind of a less than reasonable 
approach to advance legislation through this body.
  And in the final thoughts, as we look at the predicament we're in on 
procedural processes here and maybe the fact that we could have made 
this bill even better, I must share with my colleagues that there is a 
clear veto message on this legislation as it leaves the House and it 
will unlikely be the solution of the land.
  So with that, Mr. Speaker, I reserve the balance of my time.
  Mr. NEAL of Massachusetts. Mr. Speaker, just briefly in reference to 
my friend Mr. Reynolds' comments, the constraints that we are operating 
on today, as he criticizes them, are entirely legitimate; but they are 
institutional problems, as opposed to just the will of the majority.
  I was asking a Member of the minority last evening, ``Is it possible 
to be an aggrieved Member of the majority?'' In these instances I think 
you can be an aggrieved Member of the majority.
  But I want to emphasize a very important point: This legislation 
received overwhelming support from the minority in the committee, and I 
think based upon news accounts this morning that there was some 
conflict in two major dailies as to whether or not the administration 
would, in fact, veto this legislation, but I can't overstate enough 
this simple point: There was ample opportunity for the minority to 
participate in the debate at the Ways and Means Committee; and, in 
fact, they succeeded in amending the legislation that has come to the 
floor today, and every voice was heard.
  Mr. Speaker, with that I would like to yield 3 minutes to the 
distinguished gentlewoman from Nevada (Ms. Berkley).
  Ms. BERKLEY. I thank the gentleman from Massachusetts for yielding. 
And I would like to particularly thank Chairman Rangel and Chairman 
Frank for their extraordinary efforts on behalf of the American people.
  Mr. Speaker, this amendment and the overall housing package we are 
considering today will help millions of Americans and significantly 
improve the economic situation in my State of Nevada. In recent years 
the vibrant economy and rapid growth in my district of Las Vegas 
combined to make the city appear immune to economic downturn. This 
foreclosure crisis has shown that this is no longer the case.
  Nevada has had the highest statewide foreclosure rate for well over a 
year. The surge in foreclosures has led to huge inventories of unsold 
homes. This, in turn, has led to massive layoffs of the construction 
industry and other housing-related fields. Nevada, which has been a 
land of economic opportunity, the fastest-growing State in the Nation, 
now has an unemployment rate of 5.8 percent, which is, I'm sorry to 
say, well above the national average.
  This amendment takes several steps that will help both current and 
prospective homeowners as well as increase affordable housing 
opportunities. Current homeowners will be helped by the creation of a 
standard deduction for property taxes, which will lower Federal taxes 
for taxpayers who don't itemize and by freeing up funds to refinance 
certain subprime loans. The tax credit for first-time homebuyers 
creates a great incentive to get families into properties that are 
currently sitting vacant due to foreclosure or that have been sitting 
on the market for long periods of time due to excess unsold inventory. 
The bill also takes steps to increase affordable rental housing, 
another critical need in Las Vegas.
  I'm hopeful that the combined efforts of this amendment and other 
provisions of the package will be to alleviate the current housing 
crisis and help turn our Nation's economy around. I proudly support the 
intent and the substance of this legislation. I urge adoption.
  And I must say I think it's insulting to the American people when 
they hear that there are Members on the other side of the aisle that 
support the bill, support the intent, but are voting against it because 
they didn't get a procedural motion to vote on.
  Let's do what's best for the American people and stop this ridiculous 
infighting that nobody out there cares about. They care about staying 
in their homes. They care about protecting their families. And, quite 
frankly, they don't give a hoot whether somebody has a motion to 
recommit to vote on.
  Mr. REYNOLDS. Mr. Speaker, I would like to yield 5 minutes to the 
gentleman from Texas (Mr. Brady), a distinguished member of the Ways 
and Means Committee and a leading expert on this issue.
  Mr. BRADY of Texas. Thank you, Mr. Reynolds, for your leadership on 
our economic issues here in Congress.
  Mr. Speaker, a principle that is before us today is that Congress 
should not be bailing out speculators, lenders, or investors who have 
behaved irresponsibly.
  If you bought a home that is too big for you, that you couldn't 
afford from the get-go, or you were betting that property values would 
go up in your region, that's tough.
  If you lent money without income or means of those who were borrowing 
it, or you preyed, you preyed on people who didn't know better and then 
churned their loan repeatedly, that's tough. If you purchased 
securities without determining if the loans underlying them were sound, 
that is your problem. That is not the taxpayers', that is not your 
next-door neighbor's problem.
  We do have a role in Congress and it is this, to address this issue: 
One, we should make sure that there is available, affordable credit for 
creditworthy borrowers. We need to make sure that we prevent this from 
occurring again. And we need to punish, aggressively punish, the bad 
actors who have infected our entire American economy.
  The proposal we have before us today is well intentioned, clearly. I 
think Republicans and Democrats agree on the need to help where we can. 
It is well intentioned. It is not particularly effective. I have my 
doubts that it will help much at all. It is too little, too slow, too 
unfocused. It is, as you would imagine, a typical Washington reaction.
  For example, a provision to allow States to have more authority for 
low income housing. Nothing wrong with that. In fact, we need more of 
that. That housing likely, knowing the process that works here, in the 
State of Texas and others, it will probably be 3 years before anyone 
moves into housing of that caliber. Way too late for this problem.
  The property tax deduction for seniors who don't itemize, you always 
want to help people with their property taxes. But is a retired person 
really going to take $350 and buy a new home or buy a foreclosed home 
in their neighborhood? Not likely.
  Even the tax credit for first-time homebuyers, a part that, I think, 
the philosophy of which I really like. But this no-interest loan is 
structured so low, $7,500, it won't allow them to buy a home. There are 
not many $75,000 homes on the market. If it's only a 5 percent down 
payment, there are, truthfully, not very many $150,000 homes that are 
in the areas of America that actually have massive foreclosures. Those 
tend to be either in the depressed areas or in the high-value States 
where a lot of people did bet on rising property values.

                              {time}  1300

  So I like the philosophy of it. I don't think it will help much. 
Thankfully it won't hurt. It won't hurt. There are good things in this 
bill. The FHA modernization and the reform of Fannie Mae and Freddie 
Mac I think are exactly appropriate.

[[Page 8241]]

  But if our goal is to make sure we have available credit for 
creditworthy borrowers, I think this bill is a poor alternative to the 
Hope Alliance, which is moving faster and more effectively today and 
covering more than 90 percent of those who have mortgages and could 
have problems, or has already worked with 1.4 million families who need 
help moving them into new loans or moderating the loan they have today. 
And they are doing that without taxpayers underwriting any potential 
loss. That is, I think, the approach that works best and is already 
proven to work.
  I will finish with this. I have said that there is nothing patently 
offensive in the amendment from Ways and Means. In fact, again, I think 
it is well intentioned. But in the underlying bill by Chairman Frank, 
there is something that is especially offensive.
  I come from Texas. Our region was destroyed in Hurricane Rita, a 
hurricane that was stronger than Hurricane Katrina. We lost 70,000 
homes that were damaged or destroyed. We lost more than $1 billion of 
our timber industry, our main crop. We still have 10 percent of our 
families who haven't moved back to southeast Texas because they don't 
have housing. Yet in Chairman Frank's underlying bill, he creates an 
affordable housing fund and dedicates $500 million to Louisiana and 
Mississippi to help rebuild housing in those areas. And yet for the 
same hurricane, and Hurricane Rita, in the communities that actually 
took in the Katrina families as they fled that hurricane, and then 
those same families have their own roofs torn off in southeast Texas, 
this bill says, ``Drop dead. Forget it. We are going to help those who 
are on this side of the hurricane.''
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. REYNOLDS. I yield the gentleman an additional 30 seconds.
  Mr. BRADY of Texas. But to those who not only took in those of 
Katrina, to those communities that opened their hearts, their churches 
and their homes and have their own community destroyed, this government 
and this Congress is saying, ``Forget it. We are going to divide this 
hurricane along State lines. You can drop dead. No help for you in 
housing. No help for you in apartments. No help for you, period. None. 
Zero for the victims of Hurricane Rita in Texas.''
  This Congress ought to be ashamed of itself.
  Mr. NEAL of Massachusetts. Mr. Speaker, I would like at this time to 
yield to the gentleman from Vermont via Springfield, Massachusetts, one 
of the most distinguished families in Springfield, my friend, Mr. 
Welch, for 2 minutes.
  Mr. WELCH of Vermont. Thank you, Mr. Chairman.
  Mr. Speaker, I rise in strong support of this legislation. The 
legislation does two things that are good and one thing that is very 
good in its absence. The two things that are good are one, it addresses 
very specifically, in a practical way, the housing crisis that has been 
brought on by the subprime foreclosure debacle.
  What it does is it shares the opportunity of relief and it shares the 
pain of getting the relief so that we can end up at the end of the day 
with several hundred thousand American families still in their homes, 
lenders having been able to mitigate their loss, homeowners being able 
to keep a roof over their head, and the American taxpayer not being 
left on the hook.
  It does it by recognizing we have to use existing institutions to 
accomplish that. It does it by acknowledging that it has to be 
voluntary. A lender will be in this program only when they make the 
practical business decision that it is a better route than foreclosure. 
A borrower is going to be able to make that same change and has to be 
able to demonstrate an ability to pay at the new current appraisal 
value of that property. And in the process of doing that, it means that 
we use the guaranty of the taxpayer, but in all likelihood, according 
to the CBO score, not the money of the taxpayer.
  So it is a practical solution to a very severe problem that could 
only have been brought to this House for consideration with the 
extraordinary cooperation of both sides in the Ways and Means 
Committee, the Financial Services Committee, and the help of high 
administration officials who had significant input along the way.
  And it would be very unfortunate if the procedural debates that we 
are having about process, made at the leadership level, derail what is 
a practical approach to solving a very serious problem. What this bill 
isn't, and I congratulate the Members on both sides as well, it is not 
a blame game about who caused this. That is for another day.
  Mr. REYNOLDS. Mr. Speaker, it is now my privilege to yield 2 minutes 
to the gentleman from Nebraska (Mr. Terry).
  Mr. TERRY. Mr. Speaker, I appreciate the opportunity to come down and 
speak.
  Certainly in every one of our districts, the housing crunch or crisis 
affects everyday people. And we have to look at the best way to resolve 
this.
  And I think what we have today is kind of a best-intentions type of 
bill. But I don't think it's really getting to the heart of the matter. 
When I have talked to several economists that specialize in the real 
estate markets, all have told me that when you're looking back and 
trying to remedy or bail out what has occurred, that you are really not 
going to fix the problems or stimulate the housing industry.
  So I have developed, with several of my colleagues, a bill that is 
forward looking. It is straightforward. It is an up to $10,000 tax 
credit for a purchaser of a home, not a foreclosed home only or a new 
build only or anything like that. Just if they want to buy a new home 
or a home they would be eligible.
  I realize that there was at least a weak attempt to something like 
that in the amendment that is before us now. We have got a $7,500 tax 
credit. But when you look at the eligibility and the fact that, yes, it 
is a refundable tax credit that you have to pay back, it turns out to 
be rather useless in trying to stimulate the housing market. This is 
really a faux or phantom tax credit. So I don't think that can be used 
to help stimulate our economy or the housing market to get us out of 
the housing depression here.
  And one of the issues that we're talking about here today is the 
devaluation of our homes because of the housing depression and that 
what we're going to do is make up the difference of a home that has 
been devalued that goes into--
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. REYNOLDS. I yield 1 additional minute to the gentleman from 
Nebraska.
  Mr. TERRY. What we are going to do is spend $300 billion to try and 
get us to right size that by bailing these folks out. That's just going 
to prolong the problem according to the economists.
  Two points there: If that is all that we are really going to do here, 
we are not going to turn the tide of the devaluation of our homes. The 
only way to do that is to increase demand overall, which increasing 
your tax credit will do, not the phantom one that is here.
  The other way is when you look at the market and the availability of 
credit, especially for lower income people, I think we are doing the 
right thing here by increasing the cap or the limit on credits for low-
income housing. But there is also market-available tools that are out 
there. I have had people come to my office and present these market, 
nongovernment bailout programs, not programs but options, where they 
use a 501(c)(3) entity where you can put the life insurance in and 
cover the costs, reduce the house, and I thank you for the opportunity.
  Mr. NEAL of Massachusetts. Mr. Speaker, I must tell you I swore to 
myself I was going to resist what I'm about to say until I heard the 
term ``bailout.'' The minute I heard the term ``bailout,'' I thought to 
myself the speed with which the Federal Reserve Board and the Treasury 
came to the aid of Bear Stearns in a 48-hour period. And to use that 
same example of making it an analogy here is striking.
  With that, I would like to reserve the balance of my time.
  Mr. REYNOLDS. Mr. Speaker, first, I guess I will ask the gentleman if 
he has any other speakers. I am prepared to

[[Page 8242]]

close and yield back the balance of my time.
  With that, Mr. Speaker, I think, again, for our colleagues it is 
important to understand some of what has happened that the minority 
feels that their rights have been trampled in what has been a very 
unusual decision on a major piece of legislation, housing. It is 
certainly a significant piece of legislation because the Rules 
Committee granted 3 hours of debate by various jurisdictions. So it 
certainly sends a signal to all observers that this is serious. It 
warrants debate. And it is now before the House.
  But I want to remind my colleagues that this is not a bill that has 
gone regular order. There is a Senate bill that is energy that has come 
over to the House. And we have now amended it entirely with a housing 
amendment. And so this is an amendment to an existing Senate bill to 
circumvent all of the regular order process that the House enjoys and 
has had speakers of both parties affirm this should be the action of 
how we debate great issues of the day.
  This body is really infamous for acronyms. So today I call this the 
SSAD Amendment, or the Sorry Sick Amendment Decision. It is sad because 
the bipartisan work that was done in the Ways and Means Committee 
outlined by many from the Ways and Means Committee is not being worked 
through a process so that bipartisanship and the ability to have the 
entire body debate its work that came from committee.
  It is sad that the bipartisan work was trampled in the Rules 
Committee by this decision to slickly move around the mechanism of 
regular order in our House. It is sad that there is no substitute. It 
is sad that there is no recommittal. It is sad that what makes it a 
procedure so unusual and so frustrating is the House never had a chance 
to work its will on housing legislation. In fact, as I said, the 
housing bill sent back to the House by the Senate was an energy bill. 
When it first passed the House, it had nothing to do with housing. And 
it is sad that a procedural straitjacket has been used in order to 
garner the type of votes that the majority wants to put before the 
House today.
  Finally, it is just plain sad that the bipartisan work of the Ways 
and Means Committee is joined up by the Rules Committee with the Frank 
housing bill, because it has been clear that senior advisers to the 
White House will recommend the President veto the work of the Ways and 
Means Committee.
  So as we debate one of the significant issues that many feel should 
be debated in the House, it is a sad day how we have approached to do 
it.
  I yield back the balance of my time.
  Mr. NEAL of Massachusetts. Mr. Speaker, let me see what I can do to 
lift the spirits of the gentleman from New York, my friend, Mr. 
Reynolds.
  In fact, I think what is sad is that you are leaving us, that you're 
retiring. And I was searching hard to figure out the meaning of that 
acronym, based upon the fact that the Ways and Means Committee took 
this legislation up, and I want to reiterate, for the fourth time 
today, 12 of the 17 Republicans on the committee voted for the very 
bill that they are now all saying they are going to oppose. Forgive me. 
That is sad. How can you come to the floor and argue against the 
proposal that you voted for in the committee when you agree with just 
about every part of the bill?

                              {time}  1315

  That's what's before us here. We have heard these arguments, and they 
have all said, we support most of what's in the bill, but they are 
prepared because of an institutional constraint with the Senate to vote 
against the legislation that they favor.
  In my home State of Massachusetts, it's sixth in the Nation in 
foreclosure activity. In Springfield, the largest community in my 
district, 300 homes have been foreclosed this year and over 2,000 
mortgages will reset to higher interest rates by the end of next year.
  In response to the worsening housing crisis, Massachusetts this month 
initiated a new law that extends the foreclosure moratorium from 30 to 
90 days. Other States are taking similar action, but, like 
Massachusetts, they need help from Congress.
  Reports seem to suggest that the housing slide won't turn around 
until 2010. These tax provisions we are considering today for families 
and communities will help turn it around, I hope, much sooner. It 
certainly will help our economy and markets in general.
  The President's housing proposals really haven't worked. It's time 
for the Congress to act. We are often accused of having a short memory, 
but I think all Members in this chamber remember the recent government-
backed bailout of Bear Stearns, yes, the bailout of that mom-and-pop 
operation called Bear Stearns. If we can, with great urgency and 
enthusiasm, come to the aid of Wall Street, we have no excuse not to 
help the people who reside on Main Street.
  I hope that my colleagues will support this legislation, and I ask 
unanimous consent to yield the remainder of my time to the gentleman 
from Massachusetts (Mr. Frank).
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?
  There was no objection.
  Mr. FRANK of Massachusetts. Mr. Speaker, I will claim the remaining 
time on behalf of the Financial Services Committee.
  Mr. Speaker, this is a composite package. The President some time 
ago, a couple of weeks ago, urgently asked the Congress to send him 
several pieces of legislation, three in particular. One is embodied in 
the part of the bill that came out of the Ways and Means Committee.
  Two, in fact, had previously passed the House from our committee, the 
bill reforming the government sponsored enterprises--and that came out 
of our committee and on the floor in a form that the administration 
mostly liked--and the bill to modernize the FHA.
  In fact, the Senate then acted on the bill to modernize the FHA. We 
went into conference, we ran into some difficulty. Not a formal 
conference, but a conversation. What we have done because, as we know, 
the Senate is in a situation where procedurally it's often harder for 
them to act, so we are acting on the basis of a Senate bill.
  We are readopting today two of the pieces we already adopted, reforms 
of Fannie Mae and Freddie Mac and the FHA modernization. I think it 
ought to be noted that in both cases they are a recognition by the 
President that the private sector needs to be able to cooperate with 
public or quasi-public entities to get the job done. Those who take the 
philosophy that the market alone is sufficient unto itself, and that 
public sector intervention will do more harm than good clearly have 
been repudiated.
  The FHA is a government agency. Fannie Mae and Freddie Mac are 
government creations with both public and private aspects. It is clear 
that we need both of them if we are to get out of this current crisis 
in mortgage lending and be able to go forward in a healthy way.
  There is one new element today. That is a bill that our committee 
voted on last week and the week before. We had a markup. It was 
suggested to us in many ways by some of the regulators. In its 
essential form it was endorsed last Monday by the Chairman of the 
Federal Reserve, and we worked closely with his staff. The 
administration had an objection to one major piece of an auction 
mechanism. That's the longer part of the bill. What it says is that 
holders of loans, not the lenders, because the lenders have 
unfortunately long since been able to sell off their loans in many 
cases--and that's part of the problem--if the holders of loans will 
write down the amount due them in the principal, and if they get to a 
point below the current value of the home, in many cases these homes 
have lost value from when they were first mortgaged, and the borrower 
can be reasonably expected to repay it, we will broaden the right of 
the FHA to make a case-by-case determination, provide a guarantee so 
that can then be financed and resold to the secondary market.
  It's entirely voluntary on the part of the lender. The lender will 
retain the

[[Page 8243]]

right to foreclose. In many cases we believe that it will pay the 
lender not to foreclose.
  In fact, we have legislation in this package sponsored by the 
gentleman from Delaware (Mr. Castle) and the gentleman from 
Pennsylvania (Mr. Kanjorski) that will ensure servicers who are willing 
to write down the amounts, that they will not be sued if they write 
down those amounts to a reasonable level. We think that is very 
helpful. Again, it's voluntary.
  We do believe that knowing if you write this down to a reasonable 
level, accepting your loss, you will be able then to at least get some 
guarantee of that to help stabilize the situation. But people should 
understand, there is not $1 of taxpayer money going to writing down 
that loan. The holders of the loans have to write it down.
  Secondly, the borrower can then go to the FHA if the borrower can pay 
the new loan, but there is no taxpayer money that will go to help pay 
off that loan. The taxpayer exposure comes in the fact that there are 
FHA guarantees. If someone gets an FHA guarantee and subsequently fails 
to make the payments, his or her house is forfeited to the FHA.
  We will lose some money on this, we believe. The Congressional Budget 
Office estimates that half a million foreclosures will be averted by 
this program, that would otherwise have taken place, at a cost to the 
taxpayers of $2.4 billion. That means $4,800 for every foreclosure 
averted.
  We are told, well, this is a bailout, and I want to follow on what my 
colleague from Massachusetts said. We have seen one bailout this year 
over investors and speculators. It came when the Federal Reserve, 
actively urged on by the Treasury, bailed out for $30 billion 
potentially--we don't know what the losses will be--but $30 billion is 
at risk of what will ultimately be public money, to lenders, to 
speculators and investors, people who were partners at Bear Stearns.
  Now there may have been some confusion yesterday. I tried to avoid 
it. I am not critical that we are doing that. I am critical of the lack 
of sensible regulation that led them to be in that position. I think we 
do have to examine it, and I want to examine it from the standpoint of 
what we can do that will make it less likely that we will be confronted 
with that kind of choice, either provide those funds or see serious 
further economic debilitation.
  But for the administration that engineered $30 billion of bailout for 
the investors and others who did business with Bear Stearns to say that 
this $2.4 billion cost according to CBO that will avert 500,000 
foreclosures is unacceptable as a bailout is as intellectually and 
morally and economically inconsistent a policy as we have ever seen. It 
is true, and some of the Republicans have said in a letter to me in the 
House, that they wanted to question this.
  I would note, by the way, we talked about this, I have looked at the 
letter that was sent to me. I looked again at the letter, and in no 
case does it say they were opposed to it. People raised questions. 
Maybe that's an easy way to kind of cover your bases, but my point is 
not so much those who wrote the letter, it's the administration.
  The administration says they're going to veto this bill, that it's a 
bailout. It is $2.4 billion versus $30 billion at Bear Stearns.
  Now, I believe that Secretary Paulson and Chairman Bernanke have been 
doing the best they can in this situation. I am not critical of what 
they have done. Chairman Bernanke has been consistent and thinks this 
is also a reasonable thing to do.
  The President, of course, appointed Secretary Paulson and Chairman 
Bernanke, and for the administration that supported and facilitated the 
$30 billion for Bear Stearns which went to lenders, went to investors 
and some of them were speculators--to then object when it's homeowners 
seems to me to be entirely the reverse of the reality of the situation.
  Again, I want to stress, I was asked by 17 Republicans if the 
committee would have a hearing. My answer was yes, the committee will 
have a hearing after we have dealt with the current subprime crisis--
and that will be soon, that was our priority--and a hearing not simply 
to say what did you do, because we cannot compel them to undo it--to 
look at what they did in the Bear Stearns thing in the context of 
figuring out how we are best able to diminish the likelihood that it 
will recur.
  But we are in a recession, and a major cause of that recession is the 
subprime crisis. We do not see any alternatives to this bill to trying 
to work on that.
  Yes, we had Hope Now, and then we had FHA Secure. The administration 
had several policies. They have been closer, in many ways, to us. The 
differences are not as great as they once were.
  But the fundamental here is this, foreclosures are causing, have 
caused and are causing serious economic problems. Diminishing the 
number of foreclosures is in the interest--not simply of those who will 
avert foreclosure--but of people in the neighborhood of the cities in 
which they are located and the whole economy. That's why we are going 
forward with this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. NEUGEBAUER. Mr. Speaker, I claim time in opposition.
  The SPEAKER pro tempore. The gentleman from Texas is recognized.
  Mr. NEUGEBAUER. Mr. Speaker, I yield so much time as he may consume 
to the distinguished ranking member of the House Financial Services 
Committee, Mr. Bachus.
  Mr. BACHUS. Mr. Speaker, I rise in strong opposition to this 
Democratic omnibus housing bill, and also I rise in strong opposition 
to the procedure under which it comes to the floor today under a 
contorted rule, which is designed to do one thing and one thing only, 
and that's allow no Republican amendments, allow no input, allow no 
open debate of different provisions with any ability to modify those 
provisions.
  Mr. Speaker, I submit for the Record page 24 of a promise that the 
Democratic majority made to the American people. It's a statement of 
the Speaker of the House in their document ``A New Direction for 
America.''

                     Regular Order for Legislation

       Bills should be developed following full hearings and open 
     subcommittee and committee markups, with appropriate 
     referrals to other committees. Members should have at least 
     24 hours to examine a bill prior to consideration at the 
     subcommittee level.
       Bills should generally come to the floor under a procedure 
     that allows open, full, and fair debate consisting of a full 
     amendment process that grants the Minority the right to offer 
     its alternatives, including a substitute.
       Members should have at least 24 hours to examine bill and 
     conference report text prior to floor consideration. Rules 
     governing floor debate must be reported before 10 p.m. for a 
     bill to be considered the following day.
       Floor votes should be completed within 15 minutes, with the 
     customary 2-minute extension to accommodate Members' ability 
     to reach the House Chamber to cast their votes. No vote shall 
     be held open in order to manipulate the outcome.
       House-Senate conference committees should hold regular 
     meetings (at least weekly) of all conference committee 
     Members. All duly-appointed conferees should be informed of 
     the schedule of conference committee activities in a timely 
     manner and given ample opportunity for input and debate as 
     decisions are made toward final bill language.
       The Suspension Calendar should be restricted to non-
     controversial legislation, with minority-authored legislation 
     scheduled in relation to the party ratio in the House.

  In this document, the Democratic majority promised to the American 
people in what was called a Congress working for all America, they made 
this promise: ``Bills should generally come to the floor under a 
procedure that allows open, full, and fair debate consisting of a full 
amendment process that grants the Minority a right to offer its 
alternatives, including a substitute.''
  Well, that's not what we have here today. Instead, we have what we 
are calling the American Housing Rescue and Foreclosure Prevention Act 
of 2008, but, in fact, it started out as a bill here in the House and 
passed the House as a bill to move the United States towards greater 
energy independence and security. Absolutely none of that bill remains, 
it's a total sham.
  Through some, I suppose, back room, front room, side room, smoke-
filled

[[Page 8244]]

room, who knows, but the Democratic leadership, we, the American people 
really don't know--but at some point they decided to take every bit of 
that bill out. The only thing that remains of that bill, actually, is 
the resolution that brings this bill to the floor.
  It refers to this bill and the resolution that brings it to the 
floor. The resolution says, upon adoption of this resolution it shall 
be in order to take from the Speaker's table the bill (H.R. 3221) 
moving the United States towards greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, increasing clean, renewable energy 
production. That's all gone. But that's still in the Record. That's 
still the resolution.

                              {time}  1330

  Mr. Speaker, the procedure outlined here indeed stifles the 
democratic process. It corrupts the democratic process. Despite ``A New 
Direction for America,'' despite a specific promise not to do this, we 
have a process that not only allows no Republican amendments, no 
substitutes, it does not allow even a vote on final passage of this 
entire bill. There will be no vote on final passage. There will be a 
vote on each of the three amendments that go to make up this package, 
but as the resolution clearly says, it is sort of self-executing, a 
motion that the House concur in the Senate amendment to the title, the 
so-called renewable energy bill, shall be considered as adopted. There 
won't even be a vote on that. Now that is pretty innovative. That is 
pretty unusual.
  But above all, as strange and as contorted and convoluted as this is, 
it is a corruption of the democratic process. It is a corruption of our 
democratic system, and it is a sad day for this House.
  It is not the Members of this House who are being denied the full 
amendment process, it is Americans, those Americans we on this side of 
the aisle represent. They, as are we, are being shut out of the 
process.
  Now, Mr. Speaker, if we had been allowed, and we were not allowed to 
offer a substitute, if we had been allowed to offer an amendment, one 
of our first substitutes would have contained some of the things that 
the Democratic alternative has. It is a Democrat alternative, but there 
is no alternative, nor was one allowed, so I am not sure that we ought 
to use the word ``alternative.'' Alternative without an alternative is 
maybe what we should call it.
  But it has FHA reform in it. When we said we would have liked to have 
offered a stand-alone amendment or offered legislation to do that, the 
chairman says that has already passed the House. Certainly it has; so 
did the renewable energy bill. But it didn't pass the Senate. We would 
like, because there is agreement in this House, and we could have 
agreed today and almost unanimously passed a FHA reform bill which all 
Members of this body say will go a long ways toward solving the 
problems of Americans stressed by lowering housing prices and their 
mortgage obligations. We could have done that. But in the Senate there 
has been no movement. We won't do that today because if we start taking 
those concrete steps, it will diminish the majority's opportunity to 
take what is a bad situation and adopt and create a tremendously 
expensive new omnibus housing bill.
  GSE reform, we would have liked to have seen that joined with FHA. It 
is in this bill, and it is offered kind of as a candy or a carrot: take 
the GSE reform which you want, take the FHA reform which you want and 
we have all passed, and in doing that, you will have to take a new $300 
billion housing program. At a time when we are running a deficit, that 
makes no sense to most Americans, most of us on this side of the aisle. 
Most of all what I do oppose is our inability to strike from the 
overall package this new $300 billion government subsidy that I believe 
is fundamentally unfair and likely to do more harm than good.
  Mr. Speaker, let me explain, and in doing so I do not want to 
minimize the seriousness of the distress many of our citizens are 
experiencing. When we talk about distress, we sometimes focus on those 
who are behind on their mortgage payments. But, Mr. Speaker, let me 
assure you there are millions of other Americans who are making their 
mortgage payments; but, nonetheless, they are under an equal stress or 
a great stress themselves.
  Last night the gentleman from Vermont said what we want to do with 
this bill is we want to spread the pain from those million or 2 million 
Americans who are behind on their mortgage, we want to spread that pain 
to all Americans. We want to spread that pain to those 34 million 
Americans who are renting their homes. We want them to take part of 
that yoke upon them. We want those who are making their mortgage 
payments on time, we want them to adopt some of this liability and 
assume some of this liability. We want those 25 million American 
families who have paid off their mortgages, many of them elderly 
citizens, we want them to assume some of this pain. We want them as 
taxpayers to assume some of these liabilities.
  In other words, 110 million American families who are making their 
mortgage payments on time, who are renting or who have paid off their 
mortgages, they are being drug into this process and are being made 
liable and are on the hook now for these bad loans. They have been 
reading about it, and now they are going to be responsible for them. 
Now they are going to have to start paying. And the vast majority of 
Americans who find themselves struggling with mortgage payments, 
struggling with high gas prices, struggling with high food prices, are 
now going to assume responsibility for ill-advised financial decisions 
and misjudgments of other people. Good and decent people who have 
absolutely done nothing wrong, don't have a bad mortgage, don't have a 
problem with their mortgage, are going to be trapped in this dragnet.
  Now is it necessary to involve the 110 million American families that 
aren't behind on their mortgages? I say, no. No. In fact, the Federal 
Government has already extended almost a trillion dollars in guarantees 
of liquidity. They have brought onto their books, the Federal Reserve, 
almost a half a trillion dollars worth of these questionable loans and 
questionable securities backing these loans. And the American people 
could be on a hook for that.
  That is why my companion on the Financial Services Committee and 17 
of us on the Republican side wrote the chairman and said we need to 
take a close look. We need to urgently look at the Federal Government 
extending its guarantees and assuming securities and investments that 
maybe have no market value, just to pump liquidity into the market.
  Now what we have agreed to in the past and we continue to agree with 
and we would have liked to have said let's go further with this, is the 
Hope Now program. The 1.4 million Americans, those who come closest to 
making their mortgage payments, they are behind or in default but they 
were close, and they had an ability to, with adjustments to their 
mortgage agreements, could make those payments, 1.4 million American 
families have been helped by Hope Now. And we think that more will be 
helped.
  The FHA Secure program, almost 180,000 families have been helped by 
that program, at some Federal expense.
  Before we create a massive new government program and put billions of 
additional taxpayer dollars at risk, we need to think long and hard 
about asking other Americans to assume this burden.
  Lenders and securitizers wanted no part of government regulation or 
interference when house prices were soaring, and they made 
extraordinary profits. Speculators made millions of dollars. Lenders 
made millions of dollars. Investors on Wall Street bought high-risk 
SIVs, securitized investment vehicles, and they made millions of 
dollars. Sometimes we read where the heads of those hedge funds, 
private equity funds, and investment banks were paid a billion dollars 
in profits. They all made a lot of money. But now that the loans that 
they eagerly made are going bad, this bill offers a mechanism to off-
load their problem loans onto the

[[Page 8245]]

American taxpayers. That is unfair. It is wrong.
  Because participation in the plan is voluntary, no investor will part 
with a mortgage if they think it has a reasonable chance of performing. 
The incentives are designed to ensure that the taxpayer loses. 
Investors will place the worst mortgages they have into the program. In 
fact, that is exactly what they are going to do. They are going to off-
load the worst of their loans. If there is any chance of people paying, 
they won't put these loans into this pool. They will take those loans 
where people are way behind or have no ability to pay and they will put 
them into a program that will be financed by FHA-guaranteed loans. We 
all know when those loans go bad, who pays. It is not the lenders, it 
is not the borrowers, it is not the investors, it is not the 
speculators, it is the people we all represent.
  Given the substantial risk these loans present, no lender would 
refinance them without the FHA guarantee. That is what was said on the 
floor. They are not going to refinance these with a Federal Government 
guarantee. There is a reason for that. They anticipate a default.
  The result is the taxpayers of this country, 110 million American 
families that acted responsibly during the run-up in housing prices 
will be left to bear the cost of cleaning up after irresponsible 
lenders, investors and speculators. That's just not fair.
  For all of those reasons, Mr. Speaker, I oppose this housing package 
and I express my disappointment that the Republican Party, the 
minority, that many representatives here were shut out of the process, 
denied any opportunity to address the bill's many deficiencies through 
the amendment process or through the motion to recommit.
  Mr. FRANK of Massachusetts. Mr. Speaker, before I yield to the 
gentlewoman from Florida for 3 minutes, I would like to note the use of 
the figure $300 billion is not a hopeful sign about a rational debate. 
Three hundred billion is the total value of the mortgages that could be 
insured. It would cost $300 billion only if nobody made any payments 
ever, and when the property was taken by the Federal Government, none 
of it had any value. CBO gave us a score of $2.4 billion. So we can 
debate this, but I would hope we can debate it with real numbers. The 
CBO score for the mortgage part is $2.4 billion. Everybody knows that 
$300 billion is not remotely what is at risk.
  I yield now 3 minutes to the gentlewoman from Florida (Ms. Ginny 
Brown-Waite).
  Ms. GINNY BROWN-WAITE of Florida. I thank the gentleman for yielding, 
and I thank him for clarifying the true potential cost of this bill.
  Mr. Speaker, today we have to face the fact that many Americans are 
in a very tough financial position. If I have learned anything over the 
past year, it is how intricate our financial and economic markets are 
woven.
  As members of the Financial Services Committee, we have been 
presented and have debated dozens of proposals and ideas to combat this 
housing crisis before us. Many of them were sound, good ideas worth 
pursuing.
  In the months leading up to today, going around my district I came to 
several conclusions, but one is that Congress cannot accept the status 
quo. I have been patient. I believe in the market working itself out, 
but that just doesn't seem to be happening. At a time when our dollar 
is devalued, not only is the price of petroleum products, the gas 
everyone fills up with over $1.70 more than it was a year ago, we also 
have very high food prices. People are finding it hard to make those 
payments.
  And the beauty of this, it has to be a homeowner who is being helped 
out, not a speculator, not a flipper.
  While Chairman Frank's proposal isn't perfect, I do think it is one 
that Members should take a very close look at and compare it to what is 
happening in their districts. It is a voluntary, participatory program. 
No one is forced to play.

                              {time}  1345

  This is not the silver bullet, by any means. Homeowners, lenders and 
investors will make sacrifices under this.
  But I'm also concerned about hearing from constituents who try to 
work with their lenders, but their lenders won't call them back. I'm 
tired of driving through the Fifth Congressional District and seeing 
many houses vacant because of foreclosure. No one wins when a house in 
the neighborhood is foreclosed, absolutely no one, because it brings 
down the value of those properties.
  No, Mr. Chairman, we cannot stick with the status quo. That's 
sticking our policy-making heads in the sand. By providing lenders an 
incentive to write down mortgages, modernizing FHA, improving GSE 
oversight and including tax incentives, I believe we can help Americans 
get back into the market and help the housing market to survive.
  The bill isn't perfect, and certainly, neither was the process that 
this bill comes to the floor. And I'm sure that Chairman Frank agrees 
that the process is murky, at best. But I do believe that what we have 
before us will provide relief to Americans, and I urge Members to 
support it.
  Mr. NEUGEBAUER. Mr. Speaker, the distinguished ranking member of the 
Financial Services Committee mentioned that this is a shell. Maybe it's 
a shell game. I'm not sure. But for energy bill being the underlying 
bill, I think the American people wish we were on the floor today 
discussing an energy future for America.
  It's now my distinct pleasure to yield 5 minutes to the distinguished 
ranking member of the Housing Subcommittee, Mrs. Biggert from Illinois.
  Mrs. BIGGERT. I would say that all I can find in the Congressional 
Budget Office cost estimate is that it's $2.7 billion and not $2.4 
billion over 2008 to 2013, as far as the CBO estimate that Chairman 
Frank was talking about.
  You know, Congress has yet to submit a single bill to the President 
that might begin to address this crisis in the housing market, and here 
we are again debating controversial new housing legislation, instead of 
passing common-sense housing reform that could start helping 
homeowners.
  And I feel like I woke up one morning, we just had a markup on the 
Housing bill, and suddenly, I couldn't even find the number of it, H.R. 
3221, and it suddenly was a different bill with a lot of different 
provisions in it. Some were the same and some weren't. I have to say 
this reminds me of the SCHIP bill that we debated, which kind of came 
over here the same way from the Senate. I don't think it's going to be 
the same result, but I just can't understand that process.
  And I do appreciate Chairman Frank's inclusion of FHA and GSE reform, 
as well as the funding for housing counseling and mortgage fraud in the 
bill that we're considering today. But these are much needed reforms 
that could increase the liquidity in the housing market and provide 
consumers with an alternative to the bad subprime loans, and help to 
restore consumer confidence, which is so important.
  But attaching these things to a taxpayer-funded bailout will not get 
them any closer to the President's desk. And make no mistake. This is a 
bailout. It would place U.S. taxpayers on the hook for the $300 billion 
guarantee, but that includes the riskiest mortgage debt on the market. 
And it does this by allowing speculators, borrowers who have overstated 
assets, who have cheated and knew that they couldn't make the payments, 
and those who invested irresponsibly, to pawn off their financial 
liabilities on U.S. taxpayers. This is a liability.
  And instead of serving distressed homeowners, the bill requires that 
the lenders, not the homeowners, to make the decision to place the 
mortgage in the program. Since the lenders are the ones that would like 
to get rid of their bad loans and put those on the, be guaranteed by 
the Federal Government, the taxpayers, the taxpayers will be bailing 
out the banks, the investors on their most unwise lending decisions.
  Even more disturbing is that the bailout is partially funded on the 
backs of seniors through changes to FHA reverse mortgage program.

[[Page 8246]]

  Mr. Speaker, we shouldn't be asking American taxpayers to pay for the 
mistakes of those who over estimated their income on mortgage 
applications, or scam artists that inflated appraisals and flipped 
properties. Nor should they pay for homeowners who chose to live beyond 
their means, using inflated home equity loans to buy a new plasma TV, a 
swimming pool or a fancy car. It is not fair to those who saved and 
invested responsibly.
  The majority of Americans are working hard to make ends meet. Ninety-
three percent of our mortgage holders are making their payments on 
time. Fifty-one out of 55 million Americans with a mortgage are making 
their mortgage payments on time.
  Twenty-five million Americans own their own homes and have no 
mortgage. Thirty-four million Americans are prudently renting because 
they aren't ready to own a home. These hardworking Americans should not 
be forced to foot the bill for the bad decisions of a few who gambled 
that their home values would never stop rising. They don't think that's 
fair, and I don't think so either.
  I understand that many of my colleagues are looking at the economic 
effects of the housing bubble and saying to themselves, ``We must act, 
we must do something. ``But we shouldn't do something if it's not 
right. Congress can help struggling borrowers and promote economic 
growth without burdening the taxpayers with inappropriate spending.
  And that's why I join with Financial Services Ranking Member Bachus 
to offer an alternative plan that helps homeowners in a responsible 
way. It does include the FHA reform. This could solve this problem 
right away. Our substitute funds housing for counseling, other reforms 
to GSEs that's so important, without a so-called trust fund or slush 
fund.
  And there's nothing in the Democrat alternative that would prevent a 
similar housing crisis like this in the future. Though improved, 
disclosure lender registration higher price is standard.
  The SPEAKER pro tempore. The time of the gentlewoman from Illinois 
has expired.
  Mr. NEUGEBAUER. I yield the gentlewoman an additional minute.
  Mrs. BIGGERT. Our Republican alternative would do more than put an 
expensive Band-Aid on the housing market. It begins to address the 
underlying causes of the subprime mess. It will ensure that borrowers 
have access to legitimate loans; that they understand the terms of 
their loan, and that they are taking a loan that they can afford based 
on the actual value of the house.
  We need to bring transparency and integrity to the homebuying 
process, and we need to expand access to credit for worthy borrowers 
who genuinely want to pay off their loans, but we need to do it without 
wasting taxpayers' dollars.
  I think we have an alternative bill that would solve these problems. 
And many were supported by both Republicans and Democrats. It's a 
commonsense plan that doesn't spend money and, in fact, has been scored 
by CBO to actually reduce the deficit by $25 million. Coupled with Mr. 
Terry's tax credit for owner-occupied homebuyers, it will jump-start 
the flailing housing market and get our economy back on track.
  That's why I urge my colleagues to vote against the bill before us 
today and consider the alternative, if we had the opportunity to have 
an alternative.
  Mr. FRANK of Massachusetts. I yield myself first 45 seconds to say 
that on the scoring, $2.4 billion was the CBO score for the mortgage 
part. They did say a total of $2.7 billion. The other $300 million is 
attributable to an amendment offered by the gentlewoman from Illinois 
on mortgage. So the gentlewoman from Illinois is correct. It is $2.7 
billion. That includes the $300 million she added to the bill with her 
amendment, and the $2.4 million in mortgages.
  Mrs. BIGGERT. Will the gentleman yield? I thank you for putting that 
$300 million.
  Mr. FRANK of Massachusetts. Yes, the gentlewoman is correct.
  Now I would yield to the gentleman from Ohio for a unanimous consent 
request.


            Request for Permission to Modify Amendment No. 3

  Mr. LaTOURETTE. Mr. Speaker, I ask unanimous consent that the 
amendment that I have offered with Mr. Miller of North Carolina be 
modified and amended, and I will describe that--but then I know the 
Clerk has to report it--just by adding 2 words, on line 7, after the 
word ``foreclosure'' adding the word ``process,'' and on the next line, 
after the words ``foreclosed property,'' add the word ``maintenance.''
  The SPEAKER pro tempore. The Clerk will report the modification.
  The Clerk read as follows:

       Modification of amendment No. 3 printed in House Report 
     110-622:
       Insert ``process'' after ``foreclosure'' and strike 
     ``treatment'' and insert ``maintenance''.

  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Ohio?
  Mr. PRICE of Georgia. Mr. Speaker, reserving the right to object, I 
appreciate my colleague on the committee for attempting to clarify an 
issue which is, I think, significantly problematic.
  The issue of defining foreclosure time, and length, the particulars 
have always been the purview of the States. And I know that this 
amendment is an attempt to try to clarify that. In fact, I think it 
confounds it, and my concern about the unanimous consent request is 
that it doesn't make it clear still. So I have significant concerns 
about the amendment.
  I'm happy to yield to my friend from Ohio for any clarification that 
he might offer.
  Mr. LaTOURETTE. If the gentleman would yield to me on his 
reservation, I would make this observation to the gentleman and to the 
House. This amendment that Mr. Miller and I crafted, obviously, one of 
the things that vexes, and it doesn't matter whether it's financial 
services or anything else, one of the things that continues to vex and 
cause tension between the Federal Government and the States is this 
whole issue of preemption.
  So when Mr. Miller came to me with the original amendment, we began 
to hear some concerns. And quite frankly, the concerns were are you 
opening the door to a Maryland-type situation, where they can pass a 
State law that says that nobody can foreclose on property for 5 years, 
10 years, 15 years. And clearly, although I happen to think that that 
kind of abrogation of property rights is an unconstitutional exercise 
of legislative authority, I understood the concerns.
  And so I will tell the gentleman on his reservation that we sought 
the advice of the OCC and the OTS and received a list of things that 
are already preempted. And as I think the gentleman has accurately 
stated, the manner, the process in which foreclosures have happened 
have always been the purview of the States. And then the boarding up of 
properties or the maintenance of properties that are foreclosed.
  And so it is my attempt through this unanimous consent request, I 
think, from all Members, and I think Members on both sides of the aisle 
have some concerns about this. This wasn't limited to Republican 
Members. There were some Democratic members that had concerns as well. 
The OCC has indicated to us that this answers that concern. It doesn't 
deprive them of their authority under the National Bank Act. Some of 
the banking institutions that were originally concerned about the 
amendment have indicated the that this is language that they can live 
with.
  And just as a Republican Member of the House, I would say to the 
gentleman from Georgia, under his reservation, that this is typically 
the point in our debates where our distinguished chairman of the 
Financial Services Committee skewers us as Republicans for being for 
States' rights on some days and being against States' rights on other 
days. It was my goal to

[[Page 8247]]

make sure that States' rights were preserved on those things that 
they've always had the opportunity to regulate, and not impinge upon 
those, but also recognizing that not all the best ideas in terms of how 
to proceed on process or maintenance necessarily emanate from this 
Chamber.
  I thank the gentleman for yielding on his reservation.
  Mr. PRICE of Georgia. Reclaiming my time, I appreciate those comments 
and I would agree. I think that all of us, many of us in the House, 
many certainly on this side of the aisle, want to retain the States' 
prerogative in the area of foreclosure. And I would suggest to the 
gentleman that his comment about that, and the discussion that's gone 
on on the unanimous consent request and the language therein, is 
something that ``they can live with.''
  And I would suggest, Mr. Speaker, that this probably should have been 
dealt with in committee, and it might have been able to be clarified to 
a much greater degree. My concern remains.
  Mr. FRANK of Massachusetts. Mr. Speaker, I don't know what the 
parliamentary status is. Has the gentleman objected or not?
  The SPEAKER pro tempore. Does the gentleman from Georgia continue to 
object?
  Mr. PRICE of Georgia. Yes, unless anybody else would like time on my 
reservation, I will object.
  The SPEAKER pro tempore. Objection is heard.

                              {time}  1400

  Mr. FRANK of Massachusetts. Mr. Speaker, I regret that, but sometimes 
people would rather see things not improved so they can then complain 
that they weren't improved. Fortunately in this case, we are not 
constrained.
  The gentleman from North Carolina and the gentleman from Ohio said it 
had not come to our attention fully until after the committee markup. 
What happened was that they came forward with this amendment, and we 
heard some concerns from the Comptroller of the Currency, as the 
gentleman from Ohio has said, and from bankers.
  We then talked to the gentleman from Ohio and the gentleman from 
North Carolina (Mr. Miller), talked to the American Bankers 
Association, the Community Bankers Association, the Mortgage Bankers, 
the OCC, various of the advocacy groups, the State Attorneys General, 
the National Council of State Legislators, and they came to an 
agreement that adding these words would make this something that would 
work.
  Now, the obvious thing in a constructive way would have been with the 
agreement of all of the stakeholders and the conversations among 
Members on both sides to be incorporated into the bill. But 
constructive isn't always the order of the day.
  So let me make this announcement which I have also, in anticipation 
that there might be such an objection, although I had spoken to the 
ranking member and he told me he thought we should go forward. It was 
my understanding the gentleman from Ohio had talked to the leadership 
on the Republican side. They thought it should go forward. So here is 
where we are. We will vote on the Miller-LaTourette amendment. I will 
guarantee to the Members that when this goes forward in any discussions 
we have with the Senate, we will accept this language, the Miller-
LaTourette language, or if someone comes up with a better idea, any 
other language that would be mutually agreed upon by the gentleman from 
Ohio and the gentleman from North Carolina, the two bipartisan 
sponsors.
  So while we don't get the unanimous consent agreement, because some 
people would rather there not be a resolution over an objection, let me 
announce what may be a first, and I'm not always the most 
technologically updated person; I don't have a lot of the devices, but 
I do want to maybe be the pioneer of the virtual unanimous consent 
agreement. In good faith the gentleman from North Carolina and the 
gentleman from Ohio want to amend this, they were denied unanimous 
consent, but I am prepared to act as if the body, and I have no 
question that it would have been adopted had we had a chance to vote on 
it, that it be incorporated. And as we go forward, we can guarantee 
Members that this language, if this bill is included, this will be 
included; and I can report that all of the stakeholders, the community 
advocacy groups, the banks, and the public officials at the State and 
local level believe that with the language that was worked out by the 
gentleman from Ohio and the gentleman from North Carolina with the 
Comptroller of the Currency, it will be fine.
  So I wish we had got unanimous consent, but I want to assure Members 
that in this process going forward, our failure to get real unanimous 
consent, as opposed to virtual unanimous consent, will make no 
difference whatsoever.
  On this point, let me yield 3 minutes to the gentleman from North 
Carolina to complete this conversation.
  Mr. MILLER of North Carolina. Mr. Speaker, I want to add my assurance 
to that of Mr. Frank, as if anyone would need that, but I think that 
this clarification really does not change the intent of the statute. On 
its face, going from foreclosure to foreclosure process is redundant. 
Foreclosure is a process. It is a legal procedure. It is a legal 
procedure by which real property given as security for the payment of a 
debt is seized and sold to pay the debt. It is a legal procedure. It is 
all process. So saying ``foreclosure process'' appears, on its face, to 
be redundant.
  However, the concern has been that States would add to the same 
section of their State ordinances, their State statutes, other 
provisions that have nothing to do with foreclosure procedures, that 
have to do something to make other provisions; and yet there would be 
the argument that all of those now are exempt, immune from any argument 
of preemption. That is certainly not what we intend, and I lend my 
assurance to that of Mr. Frank that I will work to make sure that the 
language that Mr. LaTourette just presented be the language in the 
final bill.
  Mr. NEUGEBAUER. Mr. Speaker, at this time it is my pleasure to yield 
3 minutes to the gentleman from Florida (Mr. Feeney).
  Mr. FEENEY. Mr. Speaker, I thank my friend from Texas, and I would 
say that people in my district, there are some people who are hurting 
right about now as there are around the country. There are some people, 
indeed, who are homeowners in very bad shape. Some, for example, were 
duped or lied to by people that loaned them money. Some, a few, have 
lost their jobs. Some bought homes at the high of the housing market, 
say $150,000, now to find that their house is more like $120,000 or 
$100,000. And we all feel very sympathetic for those people.
  But I don't feel too terribly bad for speculators that went in search 
of ways to get higher returns and take higher risks as an exchange, and 
that's who is getting bailed out today. I also don't have complete 
sympathy when it comes to using taxpayer money to reimburse people 
that, for example, put zero money down. They didn't buy that home. They 
bought an option to buy the home. People that bought into a 3-percent 
teaser rate knowing that if the interest rate went to 7 percent, they 
would never be able to stay in that home. People that used no 
documentation to demonstrate that they ever had the chance to repay. 
They moved into a home with an option to continue buying it. They 
didn't make the type of commitment that most homeowners do to put 10 or 
20 or 30 percent down and to make sure that they have a mortgage and a 
loan that they can pay under virtually any circumstance except for a 
disaster.
  Who does this bill help? Well, The Wall Street Journal made it very 
clear who this bill helps. This bill is a bailout from American 
taxpayers of speculators and imprudent borrowers. Less than 1 percent 
of borrowers whose homes, under this bill, would be eligible when all 
is said and done to be helped.
  I come today to speak on behalf of the forgotten man. And that 
includes some 50 percent of Americans that either own their home or are 
renting.

[[Page 8248]]

Every one of them watching today needs to know that they are bailing 
out irresponsible speculators and lenders and they will pay the price 
of this bill. I come here to speak for the 90-plus, 95 percent of 
homeowners that are making their payments on time, that took out 
responsible loans. They need to know that they are bailing out 
irresponsible speculators and people that went in search of higher 
profits.
  Investors who take advantage of this program are basically getting a 
guaranteed gift from the government: 85 percent of a loan that they 
know is not likely to perform. We are bailing out people that will 
cherry-pick the very worst loans in their portfolio.
  Who is here speaking on behalf of the forgotten man? Who is here 
speaking on behalf of 99 percent of Americans that did not behave 
irresponsibly, that did not behave foolishly, that ultimately will pay 
the price for this bill? Well, some of us in the minority are here 
speaking on behalf of the forgotten man, which is 99 percent of 
America.
  And I would leave you with this: Chairman Frank and the CBO and 
others can estimate how much this bill will cost these forgotten men 
and women, 99 percent of Americans who were not irresponsible who will 
pay the price. The answer is we don't know. We don't have a crystal 
ball. If property prices around the country take off by another 50 
percent and go up, there will be no cost. If they go down by 30 
percent, the cost will be closer to $3 billion.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to Mr. 
Kagen of Wisconsin.
  Mr. KAGEN. Mr. Speaker, I rise in strong support of the Foreclosure 
Prevention Act on which would address today's crisis in the housing 
market and help many American families work out their financing to 
avoid foreclosure, although it comes a little bit too late for the 
gentleman I talked to in Green Bay an hour ago who will be losing his 
home.
  As we are all aware, foreclosure rates have risen, Housing prices are 
declining, and too many families nationwide, including many veterans 
who served us with bravery, honor, and courage in Iraq and Afghanistan 
are overwhelmed with their monthly mortgage payments, many having 
fallen into the trap, the adjustable-rate mortgage trap.
  For these reasons, I commend Chairman Frank for graciously including 
a provision I offered that would provide funding in fiscal years 2008 
and 2009 for grants to be administered to the Neighborhood Reinvestment 
Corporation for mortgage foreclosure and credit counseling for veterans 
recently returning from active duty. The mounting mortgage 
delinquencies and defaults pose a serious economic threat to our 
economy, to say nothing of what it does to affected families and their 
communities.
  Preventing foreclosures for our veterans will benefit all 
communities, and more importantly, by providing additional counseling, 
resources to veterans, it will enhance their ability to make sound 
financial decisions during these challenging times. Our soldiers need 
our help now, and toward that end, I'm pleased that the Foreclosure 
Prevention Act would also assist returning soldiers to avoid 
foreclosure by lengthening the time a lender must wait before starting 
the foreclosure process from 3 months to 1 year following a soldier's 
return from military service.
  This act is not a handout. It is a hand up. And I urge my colleagues 
to support passage of this very important legislation.
  Mr. NEUGEBAUER. Mr. Speaker, at this time it is my pleasure to yield 
5 minutes to my colleague and friend from the great State of Texas (Mr. 
Hensarling).
  Mr. HENSARLING. I thank the gentleman for yielding.
  I first come here somewhat amused at the lecture that some of us 
received from the majority leader last evening on abuse of process. I 
hear many of my colleagues on the other side of the aisle say that we 
have a housing crisis and that this is one of the single most important 
bills to come to this floor in this Congress. And yet here we are, as 
the minority, not being allowed any amendments, not being allowed a 
substitute, not being allowed a motion to recommit, not even being 
allowed to have an up-or-down vote on the bill. And we're accused of an 
abusive process?
  But enough of that.
  Let's look at the substance of this. There is a great challenge in 
our housing markets. There is no doubt about it. And there are innocent 
people who have suffered, and they deserve to be helped. But this is 
the wrong plan.
  What we need to do, Mr. Speaker, is, number one, we have to have 
better disclosure so that people understand the economic obligations 
they're undertaking. We need to enforce the laws that we have on the 
books. Mortgage fraud has been rampant on both the borrowers' side and 
on the lenders' side.
  We need to prevent the automatic tax increase that has been included 
in the majority's budget that's going to impose a $3,000-a-year on the 
average American family tax increase phased in over the next 3 years. 
We need to do something about the skyrocketing cost of gasoline and 
food that has occurred on the watch of the majority. They've been in 
charge of the economic policies of this country for almost 18 months.
  The shrinking American paycheck is our challenge. A huge bailout of 
Wall Street and borrowers, some who may be innocent victims and some 
who may be guilty, is not the answer, and using taxpayers' money to do 
it is simply an insult.
  Number one, we ought to have the facts before we actually take on a 
major piece of legislation. The American people need to know. Over half 
of America rents their homes or owns their home outright. Of those who 
have an active mortgage, 95 percent are making their mortgage payments 
on time. You have roughly 2 percent who are in foreclosure. So now 
we're being asked essentially for 98 percent of America to bail out 2 
percent of America.
  Now listen. On the investors' side, these are a big bunch of boys and 
girls on Wall Street who made decisions about what they should invest 
in. We know from the Financial Crimes Enforcement Network that mortgage 
fraud has been rampant: 1,400 percent increase over the last 6 years; 
42 percent increase last year alone, with the majority of the fraud 
being borrowers who lied about their income, about their assets, about 
their occupancy; and yet we have a bill to help them out.
  Let's hear from some of the people who are being called upon to do 
the bailout. I often ask people who reside in the Fifth Congressional 
District of Texas that I have the honor of representing what they think 
about legislation coming to the House floor. And I hear from people 
like the Sadler family in Mesquite, Texas, and they write:
  ``Congressman, 3 years ago my husband and I faced the loss of our 
home due to a decrease in the sales income. We cut our expenses as much 
as possible, but it was simply no longer affordable. We made the 
decision to put the home on the market before we faced foreclosure.
  ``I am adamantly opposed to my tax dollars going toward bailing 
anyone out of a mortgage crisis. If we didn't have to give up so much 
of our income to the government for taxes, we could have continued to 
afford our home.''
  And what is the answer of the Democrat majority? Well, to the Sadler 
family in Mesquite, we're going to increase your taxes an extra $3,000 
a year.
  Mr. Speaker, I heard from Sergeant First Class Kenneth Adams of 
Frankston, Texas. He writes:
  ``Congressman, the mortgage crisis Congress is trying to fix is an 
insult. My house went unpainted until I could return from serving in 
Iraq. I'm a Sergeant First Class in the United States Army with over 20 
years active and reserve service. Some day I would like to use my VA 
house-buying benefits, but what a fool I was to earn those type of 
benefits when all I had to do was be irresponsible, overspend, and have 
the government bail me out.''

[[Page 8249]]



                              {time}  1415

  That's the answer that the Democrat majority brings to the floor, and 
it is an insult to 98 percent of Americans who did it right.
  Mr. Speaker, we should reject this legislation.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the 
gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, in 2007, Texas ranked fourth 
behind California, Florida and Illinois in pre-foreclosures. We're 
reminded of Franklin Delano Roosevelt who said we have nothing to fear 
but fear itself. We certainly have to face fear and to be able to 
respond to this collapse in mortgages and our economic markets, by 
resolve and not fear.
  And so this is not a bailout. It's a helping hand. It's what Franklin 
Delano Roosevelt did to restore this country, and it worked. We 
survived.
  And so this tells us that we can survive, providing $10 billion in 
low-income tax credits for low-income homeowners and to also build 
rental properties. We also give a $7,500 tax credit for first time home 
buyers and a $700 tax credit for those who are paying property taxes.
  And it does fix the GSEs. It does provide an opportunity to get us 
out of this mortgage foreclosure hold, but it does it in the right way. 
It's not scandalous. It's not illegal. It allows us to be able to have 
the mortgage owner sell it back to FHA at a lower price; the lower 
mortgage is then backed by FHA, and it isn't a gimmick. It's not a 
flipover. Any profit made by the homeowner comes back to the government 
if the property is later sold.
  And we protect our disabled veterans, those who have fallen upon hard 
times. They can still be in the program even if they are in bankruptcy.
  Mr. Speaker, this bill responds to the homeless and the helpless. 
What it does say is those who are living from hand-to-hand, who are 
living in their parents' homes, who have been thrown out of their home, 
who have been thrown out because they're in rental property, this is a 
fix and the life and the spirit of what America is all about.
  We don't believe in giving a fish. We believe in giving a fishing 
rod. This is an even-handed, balanced way between the House and the 
Senate to provide tax relief but also to be able to provide the 
construct and the infrastructure to get our houses back together, along 
with our stabilization bill that says we're going to buy back 
foreclosed homes and give them to people who need them.
  Is there anything wrong with America rising to be higher angels and 
helping our fellow brothers and sisters?
  Mr. Speaker, I rise in support of H.R. 3221, the ``American Housing 
Rescue and Foreclosure Prevention Act of 2008''. This momentous 
legislation would jump-start the market for mortgages by establishing a 
true market value for the securities backed by these loans.
  H.R. 3221 responds directly to the current housing crisis facing this 
country, while providing the tools to prevent a repeat of these 
problems.
  This is preeminently the time to speak the truth, the whole truth, 
frankly and boldly. Nor need we shrink from honestly facing conditions 
in our country today. This great Nation will endure as it has endured, 
will revive and will prosper. As President Franklin Delano Roosevelt 
stated in 1933, ``the only thing we have to fear is fear itself--
nameless, unreasoning, unjustified terror which paralyzes needed 
efforts to convert retreat into advance.'' We must do just that. We 
must move forward and that is exactly what H.R. 3221 seeks to do.
  This legislation will begin to repair, not bail out the economy, 
restoring confidence in the markets, limiting the damage to families 
and neighborhoods, and rejuvenating the communities with new affordable 
housing. Ironically, we celebrate the bailouts of yesteryear, when we 
believed that the power of the federal government was needed to get the 
country out of the Depression.
  Were the banking reform laws, emergency relief programs, work relief 
programs, and agricultural programs, the Social Security Act, and 
programs to aid tenant farmers and migrant workers--were these 
bailouts? Many of the New Deal programs under President Roosevelt were 
considered bailouts at that time. And yet, these programs brought our 
country out of the Depression, rejuvenated our economy, and gave hope 
as we sought to deal with the War overseas.


                                 Texas

  In 2007, Texas ranked fourth behind California, Florida, and Illinois 
in pre-foreclosures. Last year, Texas held the top seat for active 
foreclosures.
  H.R. 3221 helps homeowners and only homeowners, not speculators or 
lenders. We cannot continue to stand by as things get worse. Texas 
reported 13,829 properties entering some stage of foreclosure in April, 
a 16% increase from the previous month and the most foreclosure filings 
reported by any state. The state documented the Nation's third highest 
state combined foreclosure rate--one foreclosure filing for every 582 
households.
  Many homeowners in my district are worried about missing their next 
house payment or their next home equity mortgage, or their interest 
rate going up. These families are under stress and in constant fear of 
losing their homes.
  While this bill should not be the last word in housing legislation, 
it is a great beginning. This bill coupled with H.R. 5818, the 
Neighborhood Stabilization Act, provides a good starting point in 
providing Americans with relief.


                      Texas and what HUD is Doing

  In March, the Department of Housing and Urban Development (HUD), 
announced the Texas State Program and the cities of Houston and New 
Braunfels will receive a total of $234,868,077 to support community 
development and produce more affordable housing. HUD's annual funding 
will also provide down-payment assistance to first-time home buyers; 
assist individuals and families who might otherwise be living on the 
streets; and offer real housing solutions for individuals with HIV/
AIDS.
  While HUD is working to help Americans, we must all do our part.
  We need to pass H.R. 3221, and we need to continue to push in a 
bipartisan manner, legislation that will ease gas and energy costs, the 
rising costs of food, and the ever-rising cost of health care.
  We are spending billions of dollars on the war in Iraq. I support our 
troops but I am dismayed at how our support for a war that needs to 
become less military and more diplomatic in nature, has disrupted our 
ability to take care of things at home.


                               Conclusion

   Thank you Mr. Speaker for your leadership in this area, I urge my 
colleagues to support American families by supporting, H.R. 3221.
  Mr. FEENEY. Mr. Speaker, I move I be able to claim Mr. Neugebauer's 
time in his temporary absence.
  The SPEAKER pro tempore (Mr. Ross). The gentleman is recognized.
  Mr. FEENEY. Mr. Speaker, I yield 6 minutes to a champion of the 
working family, Mr. Garrett from New Jersey.
  Mr. GARRETT of New Jersey. I thank the gentleman.
  I rise today to voice my opposition to the underlying bill, as well 
as the underlying unfairness that's contained in it. But before I speak 
about Title I, which does contain the opportunity to use taxpayers' 
dollars to insure up to $300 billion worth of new mortgages to bail out 
the Nation's banking industry and homeowners, those who made 
irresponsible decisions, I want to briefly discuss other parts of the 
bill.
  The chairman has been routinely criticizing the administration for 
failing to do anything, he says, to address the current housing 
problems facing the Nation, but you know, this administration has been 
calling for the last couple of years for FHA reform and new regulations 
for the GSEs. However, the new Democrat majority in the House and the 
Senate has been unable to pass these important measures.
  You know, when you think about it, who knows how many people we could 
have already helped to stay in their homes and keep out of foreclosure 
if the Democrat leadership would have only forged an agreement already 
and passed those previous bills.
  It is unfortunate that due to the refusal of the distinguished 
chairman and others in the majority to temporarily forego some of their 
pet projects, such as the housing slush fund for ACORN and La Raza and 
others, that these two important reforms have been held up now for the 
last year-and-a-half.
  And now, with this new housing omnibus bill before us, the chairman 
has once again refused to compromise, I say, in good faith with the 
administration or the minority side and has included such pet projects 
once again. And as an indication of the majority's

[[Page 8250]]

unwillingness to substantively compromise, the administration has 
issued a veto threat to this bill.
  Over the last 6 months, the administration and HUD have been working 
on a program, the FHA Secure. It's to try to help American families who 
are in the right house but maybe not in the right mortgage to stay in 
the house. And this program has recently been expanded upon and has to 
date helped thousands of Americans to be able to stay in their homes.
  But now our distinguished chairman and Democrat leadership are 
proposing a plan that is really financially risky. It rewards 
irresponsible behavior and it mandates a loosing of FHA underwriting 
standards, and this is important, that would put taxpayers on the hook.
  So, when the chairman put together what I say is an ill-conceived 
plan, he noted originally that it would help up to 2 million 
homeowners. Well, unfortunately when CBO scored the bill, they 
determined it would only help 500,000, and that's the same amount they 
have oft criticized the administration plan is projected to help. So 
you'll excuse me if I find it a little hypocritical here that those who 
believe that the administration's plan isn't going to provide adequate 
help to struggling homeowners but that this new plan, which is 
forecasted to help the exact same number of people, is somehow the 
perfect cure-all.
  Now, the bill before us for consideration goes much further than 
this. This bill actually pays people to stay in their houses. It would 
give every homeowner who was in trouble and participates in this 
program a 10 percent equity stake in their home. Normally, depending on 
the specifics of your loan, it could take you or I 3 or 4 years for a 
homeowner to make enough payments for you to get a 10 percent equity 
stake. Now under this bill, we're just going to give those people who 
are having trouble making their payments. You know, I know things are 
bad in the mortgage markets right now, but are things so bad that we 
actually have to pay people to stay in the houses?
  Where is the fairness in that proposal? The distinguished chairman 
acknowledged during the committee consideration that maybe this bill 
isn't fair in that sense. What about the person who has been patiently 
sitting on the sidelines over the last several years, saving up, 
waiting for these unsustainable high housing prices to come down to 
reality, come down to earth? They've been paying their rent every 
month, building up no equity whatsoever. What about those people? We're 
now rewarding someone else who has undertaken an irresponsible loan and 
bought something, frankly, they just couldn't afford.
  What about the person who took out a loan 3 years ago and he's been 
scraping by, struggling just to get enough money from every paycheck to 
paycheck to afford their mortgage and, I say, attain their 10 percent 
equity over 3 years? Now, again, with this bill, we're just giving that 
equity away to people who didn't save, didn't decide they would live 
within their means.
  Some say the reason this provision is needed is that it will 
encourage people to stay in the houses. I believe, quite frankly, the 
possibility of being kicked out of your house is incentive enough to 
try to stay in your house. I don't have a problem with trying to help 
people, and this side of the aisle is trying to do it as well, to stay 
in their homes, but I do have a problem with facilitating arrangements 
in which they are given a 10 percent equity in their home with a 
mortgage that is insured by the Federal Government, and that means the 
American taxpayer.
  Our distinguished chairman was quoted in the paper the other day, 
``We have done as much as possible to respond responsibly with the 
public policy.''
  However, the legislation before us completely disregards borrowers' 
payment histories and credit scores when considering eligibility for 
this program. Borrowers could have missed the majority of their monthly 
payments over the life of the loan, yet these borrowers would still be 
eligible for a government-backed mortgage--and taxpayers would be on 
the hook. An amendment was offered during the committee process to 
rectify this and it was soundly defeated by the Democrat majority 
party.
  I have also heard a number of members on the other side of the aisle 
mention today their concerns about the Federal Reserve bailing out Bear 
Stearns to the tune of $29 billion. However, none of the members 
complaining or any democrats for that matter choose to sign onto any of 
three letters I and a number of my Republican colleagues sent to 
Chairman Frank, Secretary Paulson, and Chairman Bernanke noting our 
strong concern.
  For the last 17 months that the Democrat majority has been in charge, 
the Administration has been asking for a number of housing reforms from 
Congress, none of which have been delivered. Now, they want to say the 
Administration has idly sat by and watched as the housing turmoil has 
continued to increase, while it is actually the Democrat congress that 
has yet to pass significant housing reforms that could have provided 
the Administration with the much needed tools to begin easing us out of 
this housing downturn.
  The Chairman states that this a grand compromise between the 
different groups involved in the discussion, but the only compromise I 
can see is the one between he and his party, the big banks who made 
unsound loans, and the special interests and trial lawyers that stand 
to benefit.
  Mr. FRANK of Massachusetts. Mr. Speaker, first I wondered how I'd 
fill 2 hours, but I could do that just responding to the inaccuracies 
we've just heard. Let me pick a couple.
  The gentleman from New Jersey said that the administration wanted FHA 
reform and GSE reform and this Congress wouldn't get it. Well, he 
misread the newspaper. Bryan Montgomery, the head of the FHA, was 
quoted yesterday as saying, if Congress had done what I wanted in 2006, 
this wouldn't have happened. It was the Republicans who were in power 
in 2006. It was under the Republicans that GSE reform and FHA reform 
were frustrated.
  When we took power as the Democratic majority, last year this 
Financial Services Committee and this House passed both of those in 
forms very close to what the administration wanted. In fact, the holdup 
on the GSE, and I know the gentleman thinks the notion of building 
affordable rental housing with public help is, as he calls it, a slush 
fund, and I think it's that lack of sympathy for affordable housing 
that was one of the contributing factors to getting people into homes 
they couldn't have owned.
  But the fact is that we sent the GSE bill over to the Senate last 
year with a very large majority in favor, and the Senate hasn't acted, 
partly because the ranking Republican on the Senate committee hasn't 
wanted to act. I know the administration has been trying to persuade 
him to act.
  So the notion that the affordable housing trust fund, that's slush 
fund for the gentleman from New Jersey, housing for lower income 
people, for elderly people, for disabled people, that's slush fund, 
well, it was not that that held it up. It was the refusal apparently of 
the ranking member to act on it.
  So this is an example of the inaccurate descriptions you're getting.
  Mr. GARRETT of New Jersey. Would the gentleman yield?
  Mr. FRANK of Massachusetts. I yield.
  Mr. GARRETT of New Jersey. Just for one question. With regard to your 
initial comment with regard to the FHA reform and the GSE reform, my 
comment saying that it hasn't been done, isn't it true that we're 17 
months into the year under Democrat leadership? Have those bills passed 
this House and have those bills made it to the President's desk?
  Mr. FRANK of Massachusetts. No, but the gentleman very inaccurately 
blamed the Democrats. He forgot, Bryan Montgomery said in 2006, the 
Republicans did it.
  I think one ought to be more accurate and less partisan in a 
description of reality. The fact is that those were defeated under the 
Republicans when he was on the committee. Then, the Democrats did pass 
them.
  And as to the GSE bill, he said it was the slush fund. I really like 
that phrase, ``slush fund.'' That's affordable housing for people, for 
lower income people. He said that's what's holding up the GSE bill. 
That is not remotely true. The GSE bill was sent by us to

[[Page 8251]]

the Senate. They haven't taken it up. By the way, the affordable 
housing trust fund was in the Senate committee version when the 
Republicans were in power under the current ranking member when he was 
chairman. So that is just inaccurate.
  It is true they have been held up in the Senate as they were held up 
under the Republican leadership as well. We are closer to passing them. 
I am confident that they are going to get passed fairly soon. We did 
finally get to some conversation on the FHA.
  My objection was that the gentleman acted as if the world was created 
in January of 2007 and the Democrats refused to pass the bill, 
neglecting to note that the head of the FHA himself put the blame much 
earlier when the Republicans were in power.
  I now yield 3 minutes to the gentleman from North Carolina (Mr. 
Miller).
  Mr. MILLER of North Carolina. Mr. Speaker, I wish to address 
specifically the amendment that Mr. LaTourette and I have offered.
  Mr. Speaker, the worst of the foreclosure crisis is yet to come. Mr. 
Frank just corrected incorrect factual assertions. Let me correct one 
as well.
  Mr. Feeney said a few minutes ago or gave the example of a 3 percent 
teaser rate. Mr. Speaker, the typical initial rate for the mortgages 
that are causing this problem was 8\1/2\ percent, which is already well 
above the conventional prime rate.
  According to The Wall Street Journal, 55 percent of the people who 
got those loans qualified for prime loans. Their trust was betrayed. 
And the typical adjustment after just 2 or 3 years was a 30 to 50 
percent higher monthly mortgage payment. Seventy percent had prepayment 
penalties so people couldn't get out and would have to pay when they 
got out, when they refinanced out of a loan they could not possibly 
afford and the lender never intended they would afford because they 
required they come back and refinance again.
  It's not surprising that 3 million homeowners with subprime loans are 
expected to enter foreclosure proceedings in the next couple of years 
and 2 million of them will likely lose their homes. Another 40 million 
homeowners will see the value of their homes decline when other homes 
in their neighborhood are foreclosed, and they will lose $200 billion 
in their home property values.
  Credit Suisse now estimates that there is another wave of 
foreclosures coming after this one as even more exotic, innovative 
mortgages go into default. Credit Suisse estimates that in the next 5 
years 12.7 percent of homeowners with mortgages are expected to lose 
their homes to foreclosure.
  Mr. Speaker, when those families lose their home to foreclosure most 
will fall out of the middle class and into poverty.
  The policy failures that caused this problem, that led to this 
crisis, were in Washington, but State and local government are having 
to deal with the consequences.
  Property rights, contracts and foreclosure proceedings are all 
matters of State law, not Federal law. The laws vary from State to 
State, but every State's foreclosure law includes protections for the 
borrowers whose homes are being seized and sold to pay the mortgage.

                              {time}  1430

  State laws have notice requirements. They provide reasonable time for 
the families who are losing their homes to find someplace else to live 
and to move; they limit the costs that they be charged to homeowners; 
they allow homeowners to cure defaults in some circumstances. Many 
States limit or prohibit deficiency judgments if the sale of the home 
is not enough to pay off the debt, and on and on. And several States, 
not surprisingly, are now considering additional laws to protect 
borrowers who are losing their homes to foreclosure.
  Recently, there has been some suggestion, some hint in the press and 
elsewhere that if State and local governments start getting underfoot, 
if they start making a nuisance of themselves, the lending industry 
will argue that some of the especially annoying State laws, State 
foreclosure proceedings cannot be applied to mortgage holders or 
mortgage services that are affiliated with national banks or trusts.
  There is no Federal foreclosure law, but they argue that State 
foreclosure proceedings could be preempted by Federal laws that govern 
national banks and trusts. This amendment clarifies that State laws and 
local ordinances on foreclosure and foreclosed properties are not 
preempted by Federal law.
  Mr. NEUGEBAUER. Mr. Speaker, I yield myself 3 minutes.
  Mr. Speaker, I've spent nearly three decades in the housing business. 
And over those three decades the housing market has gone up and the 
housing market has had its soft moments, and one of the soft moments 
we're experiencing today. I liken it to the fact that the housing 
market has a cold. And when you go to the doctor and you talk to the 
doctor about a cold, what does he usually tell you? He says, you know, 
you're going to have to let it run its course. And quite honestly, over 
the years as these housing downturns have happened, that exactly what 
we've had to do is let these markets run their course. And what we do 
know is that when they run their course, that they come back a lot 
stronger.
  We have just come off an unprecedented run in housing where the rise 
in home ownership has risen to record levels. And how did we do that? 
Well, we did it with the marketplace.
  One of the things about this bill that bothers me is that we leave 
people with the understanding that if their house goes down, the 
government will come in and make up the difference. We can't do that. 
People buy stocks, people buy bonds, people buy other assets. They go 
up, they go down. But it's not the role of the Federal Government to 
create a profit opportunity for people.
  One of the things that we know is that, as the ranking member, I 
think, pointed out, is that we have 110 million people that are already 
meeting their own housing needs. Some of them are having problems, yes, 
they are, and we're sorry about that. We know about 51 million people 
in America have mortgages. And a lot of those folks are taking second 
jobs and doing things to make sure that they meet their rental payments 
and meet their housing payments. And you look at the fact that 94, 95 
percent of those people are making those payments, not only are they 
making them in full, but they're making them on time.
  What we can't let the Federal Government be is the piggy bank when 
things don't go exactly the way we planned. I would like to go back 
over my 30 years in the real estate business and wish the Federal 
Government could have been my piggy bank when I bought property that 
didn't go in the right direction. Some of it went down, some of it went 
up. But what I do know is that it is important that the Federal 
Government not get into the business of trying to manipulate markets.
  Markets are very efficient. In fact, they're a lot more powerful than 
the Federal Government. I know everybody here feels like they may be a 
powerful person and part of a powerful government, but quite honestly, 
these free markets are much more powerful than the Federal Government 
and they're much more efficient and they're much better able to deliver 
a housing market that the American people can sustain and count on.
  And so that's one of the reasons that I rise in opposition to this 
bill today is, as I look across America--and I wish you could have been 
at a town hall meeting with me the other day where people weren't 
asking about mortgages, Mr. Speaker, they were asking when is this 
Congress going to finally do something about getting a comprehensive 
energy strategy for America? When are we going to open up the ability 
to drill in these other areas? And when are we going to be able to come 
up with more nuclear power plants?
  Mr. Speaker, the American people don't want to make their neighbor's 
payment when they're having a hard time making their own.

[[Page 8252]]


  Mr. FRANK of Massachusetts. I yield 3 minutes to a very hardworking 
member of the committee, the gentleman from Georgia (Mr. Scott).
  Mr. SCOTT of Georgia. You know, I'm wondering whether the Republicans 
are looking at the same America I'm looking at, and that the American 
people are feeling. Between 7,000 and 8,000 American families file for 
foreclosure every day. While we were up here debating this bill the 
last day and today over 15,000 American families have filed for 
foreclosure. We have a crisis.
  Now, I want to deal with three points here right quick in my 3 
minutes. The first one is this: I think it is wrong as wrong can be for 
the other side to continually blame this crisis on the backs of the 
American family.
  Let me read here for a moment from this morning's Hill newspaper, and 
I hope that you all will read this as well, this article by J. Morton 
Davis of the Harvard Business School, an economist. He tells you what 
the cause of this is and who is to blame.
  Because mortgage originators themselves were not taking any of the 
risk of holding this paper and were being well paid by providing 
mortgages to Wall Street banks that were packaging them, they became 
more aggressive, less demanding of the conditions traditionally 
required upon them. The mortgage brokers and bankers introduced a whole 
series of new criteria that made it easier to obtain a mortgage, they 
introduced nothing down, no equity mortgage, interest-only mortgage, no 
income, no job requirement as sufficient basis to receive the mortgage. 
That's why we're in the condition that we're in, not on the backs of 
the poor American family.
  He goes on to say that ``the changes in lending practices actually 
transformed what were solid, safe, secure mortgage loans into 
instruments that were inferior even to the subprime mortgages. The 
cause of this can be traced to the simple fact that the providers of 
these mortgages did not end up holding the paper and thus were far less 
concerned about the quality of the loan.'' Because nobody bothered to 
look at or take issue with the enormously changed quality of these 
underlying mortgages, not the Federal Reserve, they didn't look at it, 
not the Securities and Exchange Commission, not the rating agencies, 
not even we here in Congress, who surely should have been more 
responsible and accountable, and not the many Wall Street banks that 
were coining the money, just as they did. The whole world is now 
suffering the pain, the outsized losses and the damage to its banking 
systems and economies.
  Ladies and gentlemen of this Congress, it is not the American 
homeowner who is the cause of this, he is the victim, and it's our 
responsibility to provide the response for it.
  Now, the other point I wanted to make is I have a copy in my hands 
here of the Congressional Budget Office co-assessment. Let's put to bed 
once and for all, this is not $300 billion of the taxpayers' money. The 
taxpayers' money that's going to this, as clearly as put out in this 
estimate, is $1.7 billion just to run the program, another $300 million 
for administrative support, and the counseling of $400,000. And then 
Mrs. Biggert's own program for counseling of $300 million. That's $2.7 
million of the taxpayers' money.
  Let's do facts right. That's why we need to pass this bill, Mr. 
Speaker. Let us stop fooling around and give the American people some 
relief.
  Mr. NEUGEBAUER. Mr. Speaker, I yield 3 minutes to the distinguished 
gentleman from South Carolina, a member of the House Financial Services 
Committee, Mr. Barrett.
  Mr. BARRETT of South Carolina. Mr. Speaker, I rise to oppose this 
bill, which I think is unhelpful for the housing market and unfair to 
the American taxpayer.
  Like many of my colleagues, I'm concerned that this program will only 
distort housing prices, causing problems in the future by forcing the 
taxpayer to foot the bill.
  I have no doubt that some of the lending practices in the beginning 
of the decade, Mr. Speaker, were irresponsible, and that the government 
should take certain steps to help the market right itself and to 
prevent these problems from recurring in the future. At the same time, 
I'm a firm believer in the power of the free market, and I believe that 
the housing market fundamentally reflects the laws of supply and 
demand.
  I'm always wary of government intervention in the markets and 
concerned about unintended consequences. I fear that in our rush to 
help, we are overlooking the basic realities about today's housing 
market and about the cost of government spending.
  I think we can all agree that government programs cost money, and 
this program has the potential to cost a tremendous amount of money. 
And that money comes from the taxpayer, Mr. Speaker. Because, in 
reality, like the laws of supply and demand, decisions have 
consequences, and money has to come from somewhere. It's not fair to 
ask my constituents from South Carolina, who work hard and spend wisely 
and pay, in my opinion, too much tax money, to carry the burden for 
others' financial mistakes.
  While I believe that people in need deserve our understanding and our 
help, I trust in the ability of the free market to correct itself. And 
I think Americans know how best to spend their money and should be 
trusted to make their own financial decisions. I also think that 
lenders have a responsibility to live with the consequences of 
investments that did not quite turn out as planned.
  Mr. Speaker, I offered an amendment in the Financial Services 
Committee that is representative of my concerns. The amendment was not 
adopted, and it was very simple. It was to strike the section of the 
bill that prohibits FHA from denying borrowers entry into the new FHA 
program solely on the basis of the mortgagor's current FICO or other 
credit scores, or any delinquency or default by the mortgagor. In South 
Carolina talk, Mr. Speaker, this amendment would have given the FHA the 
opportunity to use individual pieces of information on their own that 
reveal the risk of borrowers defaulting. In offering the amendment, I 
wanted to allow the FHA to protect the American taxpayer by giving them 
every tool available.
  I understand the motivations of this section of the bill to try to 
include as many people as possible in the program meant to help them. 
And I understand it would be nice if we could help all of these 
borrowers, but some may have very bad credit scores that reflect 
irresponsible borrowing behavior. It's not fair to the American 
taxpayer to insure the loans of the riskiest borrowers who may not be 
able to pay their mortgages no matter what the terms of the loan.
  Without a doubt, it's never easy to hear the stories of hardworking 
individuals and families losing their homes, but I do not believe that 
more government intervention is the solution to our problems. And we 
should not allow the American taxpayers to become the insurance policy 
for the financial decisions that did not turn out as planned or for 
temporary market downturns. We should not punish those hardworking and 
responsible American taxpayers for the mistakes of a few. For these 
reasons, and others, I oppose this legislation and ask my colleagues to 
do the same.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 4 minutes to the 
gentleman from California (Mr. Gary G. Miller).
  Mr. GARY G. MILLER of California. Mr. Speaker, I rise in support of 
this bill.
  A lot of people are losing their home in this country. In fact, in 
California, 500 families or more lose their home every day. And that 
not only hurts them, but the neighbors around them. Because of 
foreclosure, their home value drops weekly.
  I don't support government bailouts. I consider this bill we're 
dealing with here far from a government bailout. If you look at the 
situation people are in today, people are suffering from shrinking 
paychecks, other things go wrong in their life. But this loan is the 
most expensive FHA loan you will get.
  Normally, a person can go to get an FHA loan, put 3 percent down, and 
the government will basically be guaranteeing 97 percent financing. 
Under this

[[Page 8253]]

loan, the lender has to be willing to take 85 percent of current market 
value. Let me explain that so it makes it understandable to most 
people.
  Let's say you bought a house for $580,000. The first trustee gets 
$5,000, but current market value is $400,000 for that house. The people 
are upside down, they can't make the payment, it is going into 
foreclosure. The lender has an opportunity to allow another lender to 
buy them out with an FHA loan guarantee, and they're willing to take 
$340,000 for a loan they have that the market today is $400,000, and 
the new loan against that house will be $360,000. Now, that sounds 
really good. And we say the person is going to make a lot of money, 
it's a bailout. But this is really more like a joint venture. And I 
don't think CBO even scores this portion. If you sell the home the 
first year, we either get 3 percent of the loan amount or 100 percent 
of the profit on the home, whichever is greater. If they sell the 
second year, we either get 3 percent, or 80 percent of the profit, 
whichever is greater. The third year, 60 percent. And if you hold it 
for 30 years and you sell that home, FHA gets 50 percent of the profit 
on that home.
  Now, I don't know how most people look at it, but that's the worst 
FHA loan you can get. It's not a bailout, but it's enabling a person 
who's losing their home and a lender who says, well, if I foreclose it 
on $400,000, I might get $380,000, $390,000. And what does that do to a 
neighborhood? That home that originally sold for $580,000, now the 
market value for that home in that neighborhood is now $380,000, 
$390,000 or $400,000.
  This is more like a refi. It doesn't impact the value of the homes in 
the community. It basically helps a person get in position where they 
can retain ownership of their hone. And they're not going to make a 
windfall profit for it.
  I would like to thank the chairman for introducing language in this 
bill that I worked on for 5 years, and that's raising conforming home 
limits in high-cost areas. Basically, Freddie and Fannie and FHA, in 
high-cost areas, you can borrow a maximum of a $730,000 loan from them 
today. The biggest problem we've had in the marketplace in recent years 
is people have been forced into jumbo loans. If you look at a GSE loan, 
that's Freddie and Fannie, compared to a jumbo loan today, you can 
generally save about 100 basis points in interest rates. That's a huge 
amount of payment a person can save each year, enable a person to be 
able to put away money in the future for house payments if times get 
tough and basically own their own home.
  Some people have said they don't trust the Refinance Program 
Oversight Board because they don't have any idea what the Board is 
going to implement as far as criteria to qualify for this loan. I have 
a problem believing that we can't trust the Secretary of Treasury, the 
Secretary of HUD and the Chairman of the Federal Reserve Board to come 
up with criteria based on income, assets, liability, payment history, 
other criteria, debt-to-income ratio. If we can't trust those three 
individuals to come up with a reasonable criteria under which this loan 
is made, I think we're in trouble in this country.
  The problem some people have is FHA exists. FHA loans are made today, 
and FHA is guaranteeing, through insurance premiums, these loans. Now, 
a normal FHA insured premium costs a borrower .55 percent per year, 
about half a percent. Under this new program, they have to pay 1.5 
percent per year to FHA to underwrite this guarantee. That's far from a 
giveaway. I can't see anything in this FHA loan that's a giveaway.
  I rise in strong support of this bill.

                              {time}  1445

  Mr. NEUGEBAUER. Mr. Speaker, now it is my honor to recognize for 3 
minutes the distinguished gentleman from Georgia (Mr. Price), who is 
also a member of the Financial Services Committee.
  Mr. PRICE of Georgia. I thank the gentleman for yielding.
  There's a general sense, Mr. Speaker, that it's this bill or nothing, 
and that certainly isn't true. In fact, much has been done. As has been 
talked about, the FHA Secure program has created greater flexibility, 
helping hundreds of thousands stay in their homes. The Hope Now program 
has already helped 1.4 million individuals stay in their home, getting 
borrowers and lenders together. Loan limits have been increased, FHA, 
Fannie Mae, Freddie Mac. The Federal Reserve has lowered interest 
rates. So the notion that the Federal Government has been unresponsive 
or slow to move is disingenuous and is repeated as fact solely as an 
excuse for the Democrats to continue outbidding each other on how much 
taxpayer funding they can spend or bail out imprudent borrowers who 
either bought too much house or lenders who were gladly willing to give 
them the money. So much has been done to date.
  We have also heard the chairman and others say that it's unlikely 
that this will cost $300 billion, that it will only be $2.4 or $2.7 
billion. Well, then why doesn't the bill say that? It doesn't, Mr. 
Speaker, because the taxpayer will be on the hook for risky loans and 
the number may significantly rise, and that's because this bailout plan 
irresponsibly disregards borrowers' payment history and credit scores. 
Borrowers could have missed the majority of their monthly payments over 
the life of the loan; yet those borrowers would still be eligible for a 
government-backed mortgage, and taxpayers would be on the hook. 
Americans don't believe that's fair.
  There has also been discussion about the voluntary nature of this 
program. However, Federal Reserve Board Governor Randall Krozner said 
in our committee, ``If Congress decides to move down this road, then it 
should carefully consider the steps that should be taken to mitigate 
moral hazard, avoid adverse selection, and ensure that the financial 
interests of the taxpayer are adequately safeguarded.''
  But if you listen to the chairman, this program isn't so voluntary. 
At that same hearing, the chairman said, ``If we were to get this 
approach adopted but we don't get much of a voluntary buy into this, 
then I have to say the response will probably be more regulation than 
people might like to see.''
  He went on in an article quoted yesterday here in Washington to say, 
``Meanwhile Chairman Frank has warned the mortgage industry that if it 
doesn't support something like this plan this year, it could be in for 
far more regulation next year.'' And that article went on: ``If after 
this we continue to get very little participation by servicers, I can 
guarantee you that the servicer industry will look very different . . . 
If after everything we do in this cooperative way falls short, then you 
are going to see legislation that puts some very real restrictions on 
the role of servicers.''
  All of a sudden, Mr. Speaker, this program doesn't sound so 
voluntary. It seems to me that the chairman's comments will exacerbate 
the moral hazard that the Federal Reserve Governor warned us against.
  In addition to the incentives, the chairman provides in his 
legislation for holders of mortgages, and they are real and enticing. 
We have actual threats of harmful regulation if they don't sign up 
dutifully for this program. That's not voluntary.
  The SPEAKER pro tempore. The gentleman's time has expired.
  Mr. NEUGEBAUER. Mr. Speaker, I yield the gentleman an additional 15 
seconds.
  Mr. PRICE of Georgia. I thank the gentleman.
  I would suggest, Mr. Speaker, that these threats do no favors to the 
American taxpayers across our country. The chairman is ensuring that we 
will get full and active participation in this program, populated by 
the riskiest of loans with enormous redefault rates and cost to the 
American taxpayer of up to $300 billion. Mr. Speaker, that's 
irresponsible and it's unwise.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 3 minutes to the 
gentleman from North Carolina (Mr. Watt), member of our full committee.
  Mr. WATT. Mr. Speaker, I was listening to this debate, and the only 
thing I could be reminded of was a few years ago when I had a very, 
very serious political campaign mounted against me

[[Page 8254]]

and that had about $800,000 spent on television ads telling people how 
terrible I was, and at the end of the campaign, my mother finally 
called me and said, ``Are you really that bad?''
  I don't recognize the bill that's being described here on the floor. 
Title II and title III we have overwhelmingly passed previously. Title 
V was overwhelmingly passed out of the Financial Services Committee. 
And all of the representations that are made about title I seem to me 
to be just outrageously overstated.
  Like FHA is going to assume all of this responsibility. This is a 
bailout.
  This is a voluntary program. FHA is not out soliciting any of these 
loans. They will evaluate the credit worthiness of everyone who comes 
to them.
  Like this will cost $300 billion.
  There's no way this program will cost $300 billion unless every 
single person who gets involved in it defaults and we get nothing out 
of a foreclosure or reclaiming of the property.
  Like this is going to benefit speculators.
  The bill explicitly says that this is limited to homeowners, not 
people who have been speculators. I don't know what else we could say 
on that. The language is absolutely explicit that only homeowners 
qualify for this program.
  Or maybe like the most outrageous one that I've heard today: Well, 
the market will take care of this.
  Well, the market is how we got here in the first place. If the market 
had been taking care of this, we wouldn't be in this crisis. We 
wouldn't be having the problem that we are trying to solve. And so this 
notion that the market is somehow going to overnight correct itself and 
we will solve this problem solely through market forces just doesn't 
make a lot of sense to me. But, again, my mother started to question 
after a while, after people said it over and over and over again. Maybe 
my colleagues think if they say it enough, that this is terrible, they 
will convince somebody.
  Mr. NEUGEBAUER. Mr. Speaker, it is now my honor to introduce another 
member of the Financial Services Committee, the gentleman from North 
Carolina (Mr. McHenry), for 3 minutes.
  Mr. McHENRY. Mr. Speaker, there are many good and decent people who 
are in financial distress right now across this country. Some with 
mortgages they can't afford. Some made poor financial decisions. Some 
were victims of fraud. Some were simply speculators acting on their 
instincts.
  But the reality is that most borrowers are paying on time. They are 
making their mortgages; 92 percent of borrowers are paying on time 
across this country; 6 percent are late but not yet in foreclosure, and 
2 percent are actually in foreclosure. This bill is directed to the 2 
percent on the backs of the 98 percent. That means that 110 million 
households are meeting their obligations. This legislation under 
consideration today would require that those 110 million families bail 
out the lenders on Wall Street. And I will tell you it's simply a case 
of robbing Peter to pay Paul.
  We are sending the message to financial institutions and Wall Street 
investors that when those investors make poor choices and take ill-
advised risks that the Federal Government will step in and bail them 
out. That's a bad decision. In fact, this is a $300 billion taxpayer 
bailout that will cost the American taxpayer $5,000 for every 
foreclosed loan that is dumped into the program. And make no mistake 
about it. They will be dumped into the program. And it's not the 
homeowners who will control this. It will be the lenders and servicers 
who will decide to take advantage of this for their own personal 
advantage, the servicers and the lenders.
  The one thing that we know for sure is that those lenders and 
servicers are only going to submit those loans that they don't believe 
will pay. The American taxpayer will instead be punished. Ultimately, 
the real losers are the American taxpayers who are left to guarantee 
the loans that nobody else wants.
  Mr. Speaker, in the past couple of months, I received several calls, 
letters, conversations I have had with my constituents, talking about 
the struggles that they are making in order to pay their mortgage. They 
don't want to have to pay somebody else's mortgage. They are struggling 
enough to make their ends meet with high gas prices, the rising cost of 
health care. And I'm not advocating that we do nothing. In fact, I have 
been working very hard in my district with foreclosure prevention 
seminars, working with the Hope Now alliance, which has helped 1.4 
million homeowners stay out of foreclosure, keep their homes.
  These are the things that Congress should be doing, is helping 
individuals get through this crisis. We shouldn't have a massive 
bailout of lenders on Wall Street. We shouldn't bail out the servicers. 
They took ill-advised risks, and as such, the losses should be carried 
by them, not by my constituents who are paying on time.
  Let's oppose this legislation and do what's reasonable and right for 
the taxpayer.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to a very 
hardworking member of the committee who contributed to this bill, the 
gentleman from Florida (Mr. Mahoney).
  Mr. MAHONEY of Florida. Mr. Speaker, I rise today in strong support 
of the American Housing Rescue and Foreclosure Prevention Act.
  I must say that I'm extremely disappointed that the President and 
many of my friends on the other side of the aisle have expressed 
opposition to this legislation. I think it's telling that Federal 
Reserve Chairman Bernanke has expressed his support for the bill.
  Mr. Speaker, the President and some of my Republican colleagues have 
called this plan a bailout. Clearly, the party that claims to represent 
big business doesn't understand business.
  This plan requires current mortgage holders who choose to 
participate, not taxpayers, to realize the loss of at least 15 percent. 
And by putting homeowners in mortgages with rates and payments that we 
know they can afford, we are minimizing the risk of future defaults. 
And by doing so, we are injecting confidence and liquidity back into 
credit markets, thereby taking an important step to ensure the economy 
has the capital to begin digging ourselves out of this recession.
  For anyone who calls this a bailout of risky investors, I would 
invite them to come to my district and meet some of the thousands of 
families who are in foreclosure. These are families with dreams and 
hopes. They, like everyone in this room, were trying as best they could 
to live the American Dream of homeownership. These are not frauds and 
cheats. They are firefighters and teachers who were forced into the 
subprime mortgage market in order to realize their dream.
  The only moral hazard before us today would be our failure to act. If 
we are to protect our economy, our families, and the American Dream of 
homeownership, pass this amendment today.
  Mr. NEUGEBAUER. Mr. Speaker, it is my honor to introduce another 
distinguished member of the Financial Services Committee, the gentleman 
from Illinois (Mr. Roskam), and I yield to him 3 minutes.
  Mr. ROSKAM. I thank the gentleman for yielding.
  Mr. Speaker, have I ever told you about my dog, Max? I don't think I 
have. Let me just take a minute and tell you about Max.
  Like a lot of us who are fathers of younger children, I have four 
children, who approached me, Mr. Speaker, and begged me and begged me 
and begged me to get them a dog. And for years I was able to avoid eye 
contact and was able to keep an animal out of my house. But, finally, 
in a moment of weakness, I said yes.
  And a friend of mine, Mr. Speaker, realized what was happening, and 
he pulled me aside and he said, ``Look, if you're going to get a dog, 
realize this: You get what you pet.'' You get what you pet. So if a dog 
comes in and it's disobedient and you pet that dog and give it all 
kinds of affirmation, then guess what. It's going to keep being 
disobedient. And not being very wise, we started to do that, and so now 
we've got a slightly out-of-control dog.
  Now, why do I mention Max? We're on the verge of doing that same type 
of

[[Page 8255]]

conduct exactly to people who have fundamentally made some bad 
decisions. Let's take the borrowers aside, and I realize the chairman 
has worked hard, but let's take the borrowers aside and just put them 
in a different category because what we're going to be doing today, in 
addition to helping borrowers, is really bailing out lenders. And I 
don't think that's an overcharacterization. I don't think that's an 
unfair way of looking at this. We are being told that lenders who were 
in this, who are great advocates of the free market when they're making 
money, they love the free market when they're making money, and now all 
of a sudden, they are coming to the Federal taxpayer and saying this 
has gotten a little bit more complicated than we thought, and now we 
want the taxpayers to come in and take care of this from here out. It's 
voluntary on the part of the lenders, and think about how voluntary 
that would be. What a great invitation. These lenders go and they say 
here's our pile of bad debt. Let's take a haircut, 85 percent of the 
value, shove that off to the FHA, which is pretty ill equipped, I might 
add, to take on this obligation--let's shove that off to the taxpayer, 
and instead of getting our heads chopped off as lenders, we're just 
going to get a haircut.
  I think we can do a lot better, I think, over a period of time.

                              {time}  1500

  There is a great willingness, Mr. Speaker, on this side of the aisle 
to try and work creatively and to try and work substantively on 
solutions. But I think as we reflect back on this, in the chairman's 
own words, it is going to cost $5,000 for every defaulted mortgage that 
is assumed by the FHA, times a half million. That gets us to the $2.5 
billion figure that makes many of us cringe.
  And I don't think that those types of numbers should be allocated to 
lenders and bailing out lenders who made bad decisions.
  Mr. FRANK of Massachusetts. I yield 1 minute to the majority leader, 
the gentleman from Maryland.
  Mr. HOYER. I thank the gentleman for yielding.
  This is not about petting dogs. This is about people who are hurting. 
This is trying to reach out to people who have been savaged in many 
ways by this economy and the policies that have led to an economy where 
average working incomes are down $1,000 and where gasoline prices have 
exploded over 200 percent from $1.46 to $3.56. I would remind you that 
under the Clinton administration they went from $1.06 to $1.46, 5 cents 
a year during the 8 years of the Clinton administration. They are going 
up 5 cents a week during this administration.
  People are stretched.
  I didn't hear people come to this floor and say $30 billion for Bear 
Stearns. It was outrageous, putting the taxpayers' money--Mr. Flake 
says he did. Thirty billion dollars. We just talked about $2.5 billion 
for literally tens of thousands, hundreds of thousands, perhaps as many 
as 1 million people. There is a crisis, and they have asked us to 
respond.
  I want to congratulate the chairman of our committee. I want to thank 
the ranking member of the committee. I want to thank all the members of 
the committee for giving this their attention and trying to come up 
with a solution that works. Was this a partisan, divisive solution? 
Absolutely not. The Secretary of the Treasury has said that this is a 
product that merits serious consideration.
  For a time, I thought he was for it. I am not sure now. There seems 
to be some internal division within the administration. Mr. Bernanke, 
the head of the Federal Reserve, former chairman of the Council of 
Economic Advisers, said that this is a good thing to do.
  So, Mr. Speaker, today through this comprehensive landmark 
legislation, the American Housing Rescue and Foreclosure Prevention 
Act, this House is going to act not to pet dogs but to help people. 
This House will take decisive action to keep hundreds of thousands of 
families at risk of foreclosure in their homes and will help stabilize 
the housing markets across the Nation that have been wracked by an 
unprecedented drop in home values over the last 2 years.
  Make no mistake: The slumping housing market has had negative, 
rippling effects throughout our economy. It is not just people in 
houses that are having problems, but the subprime crisis has affected 
our entire country and the availability of credit. And thus it is 
imperative that we take responsible, reasonable steps such as this to 
strengthen our weak economy and ultimately benefit not just those who 
are at risk of losing their homes, but every American.
  As Federal Reserve Chairman Ben Bernanke pointed out in a speech on 
Monday, Monday, just a few days ago, at Columbia University, ``High 
rates of delinquency and foreclosure can have substantial spillover 
effects on the housing market, the financial markets, and the broader 
economy.''
  And the answer is, don't pet your dog. It was bad behavior. Leave him 
alone. Or punish him. What we want to do is help people do the right 
thing.
  He continued: ``Therefore, doing what we can to avoid preventable 
foreclosures is not just in the interests of lenders and borrowers, 
it's in everybody's interest.'' Those are Bernanke's words. Not 
Chairman Frank's. Not mine.
  Mr. Speaker, that is precisely what this legislation, the product of 
hard work by Chairman Barney Frank and so many others, is designed to 
do: Avoid preventable foreclosures.
  There is little question that after an historic housing boom in the 
first half of this decade we now are faced with a housing crisis. 
Foreclosures soared to an all-time high in the last quarter of 2007. 
According to Mortgage Bankers Association, more than 1.2 million 
properties received foreclosure notices in 2007, up 75 percent from 
2006. And 1 in 33 homeowners is projected to be in foreclosure over the 
next 2 years. So much for a great economy.
  This legislation, in short, will expand the FHA program so that 
borrowers in danger of losing their homes can refinance into lower-
cost, government-insured mortgages that they can afford to repay.
  I've heard so much talk about a family-friendly Congress. Family 
values. Caring about children. What can be more family friendly than 
keeping families in their homes? I think not too many things.
  But to be clear, this bill will minimize taxpayer exposure. In fact, 
the Congressional Budget Office estimates that the cost of putting 
homeowners into affordable loans under the bill would be not $30 
billion, not $20 billion, not $10 billion, but a total of $2.7 billion. 
A few days in Iraq. A few days in Iraq. Not a month. A few days in 
Iraq.
  Contrary to the rhetoric coming from some, this bill is not a bailout 
for irresponsible lenders or borrowers. Only primary residences are 
eligible. Investors and lenders must take significant losses, as they 
should. The owner of the old mortgage can only receive 85 percent of 
the current value of the home.
  And in return for an FHA guarantee on the mortgage, borrowers must 
share with the government any profit from the resale of a refinanced 
home. The government will only have liability if the borrower defaults 
and the amount recovered in foreclosure is below the outstanding debt 
still owed.
  Furthermore, this legislation includes tax provisions to expand 
refinancing opportunities and to spur home buying.
  It increases the VA home loan limit for high-cost housing areas, 
which we passed before, enabling veterans to have more homeownership 
opportunities. We are having people come home from Iraq. We are going 
to be talking about that. They may have lost their home because they 
went to Iraq and they couldn't keep their home. This helps them get 
back in a home.
  And it includes FHA modernization provisions that have already passed 
this House, as well as GSE reforms such as strengthening the regulation 
of Fannie Mae and Freddie Mac and raising their loan limits to increase 
liquidity in the mortgage market.
  Chairman Frank has talked to Secretary Paulson about that. I have 
talked to Secretary Paulson about that. I am sure many of you on your

[[Page 8256]]

side of the aisle have talked to Secretary Paulson about that. He 
thinks this is absolutely essential.
  I urge my colleagues on both sides of the aisle, let's mitigate the 
effects of the bursting of the housing bubble. Let's prevent hundreds 
of thousands, and perhaps up to 1 million people, from foreclosure and 
allow American families to stay in their homes through this responsible 
legislation.
  Let's stabilize our housing market and help millions and millions of 
homeowners who are not at risk of foreclosure, but whose neighbors are 
at risk for foreclosure, and if they are foreclosed upon, will see 
their home values deteriorate. So the assistance is not just to those 
at risk of foreclosure, but to all those who are in communities where 
homes are at risk.
  Let's pass this comprehensive, bipartisan legislation today and work 
to get it to the President's desk without delay. I am hopeful that the 
President will see fit to sign it. Vote ``yes.'' Vote ``yes'' on the 
American Housing Rescue and Foreclosure Prevention Act of 2008. Vote 
``yes'' for the families of America.
  Mr. HENSARLING. I yield myself 30 seconds.
  As the distinguished majority leader said, this is about people 
hurting. He should know. Since his Democrat majority came into office 
almost 18 months ago, we know that we have a $3,000 per family tax 
increase that has been approved, gasoline at almost $4 a gallon, milk 
over $4 a gallon. Yes. This is about people hurting, particularly the 
98 percent that rent, that have paid off their mortgages and whose 
mortgages are current.
  And if this bill is only going to cost the taxpayers $2.7 billion, 
why do we see $300 billion written in the bill?
  With that, I am happy to yield 2 minutes to the gentleman from 
Arizona, Jeff Flake.
  Mr. FLAKE. I thank the gentleman for yielding.
  The gentleman from Massachusetts knows the respect I have for his 
knowledge of free market economics. He often scolds us on this side of 
the aisle when our rhetoric doesn't match our actions. And he is often 
justified in doing so. I have heard him quote Adam Smith and Milton 
Friedman with the best of them.
  That is why I was baffled to see this bill come to the floor from his 
committee, a bill that violates the same principles that he has 
chastened us for not recognizing. He was right then. And he is 
inconsistent and wrong today.
  This bill has ``moral hazard'' written all over it. We know that a 
party insulated from risk behaves differently than a party that is 
fully exposed to risk. The truth is here we are insulating home buyers 
and home owners from risk. And we will simply prolong the housing 
crisis by doing so.
  Let's be real here. The purpose of this legislation is to insulate 
political parties from risk. That is what we are doing here. If we felt 
such a need to intervene here, we ought to remember what we did last 
September when I believe, if I remember right, we encouraged FHA to 
give no-money-down loans. Why is it that we think that we are so 
prescient here about what is going to happen?
  We can't outguess the market. We shouldn't try to. We simply will 
delay the bottom and delay and increase the dislocations that will 
occur when its politicians decide to allocate resources and capital 
rather than the markets.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield myself 30 seconds to 
respond to the gentleman from Texas.
  He says, why isn't the $2.7 written into the bill? It is, in effect, 
because it is subject to appropriation, and no money will be spent 
until that is provided. The $300 billion is the number of mortgages 
that could be insured, up to that. We needed to put that number there 
before CBO could tell us how much it would cost. And written into this 
bill before it becomes law and becomes operational will be that $2.7 
billion figure. That is the way the process works. You get a CBO score, 
and then you pay for it.
  I now yield 2 minutes to the gentlewoman from Illinois, a very 
diligent member of our committee.
  Ms. BEAN. Mr. Speaker, I rise to engage in a colloquy with the 
chairman of the Committee on Financial Services.
  Mr. Chairman, section 505 of title V of this legislation contains 
language pertaining to the treatment of disabled veterans in the 
bankruptcy code.
  Every Member of the House supports ensuring that no disabled veteran 
is discriminated against for obtaining federally supported housing 
loans or subsidies.
  Mr. Chairman, can you clarify for me why this provision was included 
in the bill, and why we need to protect disabled veterans from 
discrimination in this legislation?
  Mr. FRANK of Massachusetts. If the gentlewoman will yield, I know 
sometimes conspiracy theories rattle around this place. The reason we 
put in the legislation to protect disabled veterans who had bankruptcy 
from being excluded from this program is to protect veterans, disabled 
veterans who have been in bankruptcy from being in this program. There 
were people who suggested that the sensitivity people would have in 
bankruptcy could be a problem. Now I will point out, by the way, that 
thanks to some very good amendments by the gentleman from Georgia (Mr. 
Marshall) who has dealt with this problem in a more general way, and he 
is a bankruptcy expert--from the law side not the subject side. But we 
thought with disabled veterans, we know this engenders prejudice when 
people see in some cases people are disabled. So it was there for that 
reason, to protect people, to make sure that we, the Federal 
Government, would not, in any way, be discriminating against them and 
maybe therefore set a good example for everybody else.
  Ms. BEAN. Mr. Chairman, there have been reports suggesting that this 
provision could be used as a placeholder for a broader expansion of the 
Federal bankruptcy laws. Can you clarify that this language will not be 
expanded in conference to include a broader re-write of the Nation's 
bankruptcy laws or to be used in conference for any other redrafting of 
language encompassed under title 11 of the U.S. Code other than this 
specific provision?
  Mr. FRANK of Massachusetts. If the gentlewoman will yield, absolutely 
I can guaranty that. I should be clear. I am cosponsor of the bill that 
would have provided a bankruptcy avenue for primary residences. That is 
a separate issue as far as I am concerned. No, this particular 
provision will not be a vehicle for that.
  The SPEAKER pro tempore. The time of the gentlewoman from Illinois 
has expired.
  Mr. FRANK of Massachusetts. I yield the gentlewoman 30 additional 
seconds.

                              {time}  1515

  I guarantee this provision will only be what it is. If anybody wants 
to move elsewhere, I might support that. But entirely separate from 
this, this will not be a vehicle.
  In fact, I think it would be dishonorable for anyone. We have had too 
many examples of people trying to use veterans, and particularly 
disabled veterans, as a political stick to achieve other objectives. I 
would find that to be an absolutely outrageous procedure, and I can 
guarantee you it will not happen.
  Ms. BEAN. I thank the chairman for the clarification. I would also 
like to commend your leadership on producing a balanced bipartisan bill 
and allowing me to work with you during the committee markup.
  The SPEAKER pro tempore. The time of the gentlewoman from Illinois 
has again expired.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield the gentlelady from 
Illinois an additional 30 seconds.
  Ms. BEAN. Contrary to the earlier comments from our colleague in 
Texas, I want to specifically acknowledge the inclusion of my amendment 
to disallow participation in this program to anyone who had misstated 
their incomes on their original loan or been convicted of mortgage 
fraud.
  On the whole, this legislation will help stabilize the housing market 
and economy while not creating any uncertainty in legal contracts by 
reducing risks to lenders who keep qualified borrowers in their homes 
instead of foreclosing.

[[Page 8257]]


  Mr. HENSARLING. Mr. Speaker, may I inquire how much time is remaining 
on each side.
  The SPEAKER pro tempore. The gentleman from Texas has 6\1/2\ minutes 
remaining. The gentleman from Massachusetts has 26\1/2\ minutes 
remaining.
  Mr. HENSARLING. Mr. Speaker, I wish to reserve the balance of my 
time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the 
gentleman from Georgia (Mr. Marshall).
  Mr. MARSHALL. Thank you, Mr. Chairman.
  Mr. Speaker, I had originally planned to talk about something else 
altogether, but it's the nature of the debate that causes me to simply 
say I do view this as a bailout of sorts, but it's not a bailout for 
the borrowers, it's not a bailout for the lenders.
  If you understand the bill, you understand that actually the deals 
that the borrowers get are not particularly good. The deals that the 
lenders get are not particularly good.
  This is intended, if it works, as a bailout generally for all those 
innocent homeowners and taxpayers who have been dragged into this mess 
in part, because of our failure to regulate previously, in part because 
of the incompetence, virtually, the pitiful performance the of the 
rating agencies.
  As a result, an awful lot of people, and our economy, are being hurt. 
I view, this personally, as a bailout for the economy, with an 
incidental effect of avoiding foreclosures in individual cases--and 
that's nice. It's nice to help people out--but I am not voting for this 
thing because it's helping individuals out and happens to help a few 
lenders out. It's not a bailout for those folks. In my view it's a 
bailout for the entire economy and all of these people that have been 
dragged into it.
  Mr. HENSARLING. Mr. Speaker, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. I yield 3 minutes to the gentleman from 
Texas (Mr. Al Green), a very active member of our committee.
  Mr. AL GREEN of Texas. I thank the chairman for the time, and I thank 
the chairman for his tireless efforts to bring this to the floor. I 
question this moral hazard argument.
  I question it because I have to ask myself, where was the moral 
hazard when we bailed out Penn Central? Penn Central got more than 
laissez faire. Penn Central got more than market forces. Penn Central 
got $7 billion in a bailout.
  Where was the moral hazard when we bailed out Lockheed Martin, $250 
million? Franklin National Bank, $1.7 billion bailout. For the good of 
the country, we bailed out Chrysler at the tune of $1.5 billion; 
Continental Illinois, $4.5 billion; Farm Credit System, $4.5 billion; 
First Republic Bank, $1 billion. Major airlines got $5 billion, the 
steel companies got $7 billion.
  Where was the argument about Bear Stearns that was never brought to 
the floor? I have heard about a letter that has been circulated. Why 
didn't you bring the argument to the floor? Let's talk about the Bear 
facts, the Bear Stearns facts. Bear Stearns got $29 billion in a 
bailout and a $13 billion loan.
  So if you really talk about the Bear facts, the Bear Stearns facts, 
you are talking about $42 billion. We live in a world where it is not 
enough for things to be right, they must look right.
  It doesn't look right for this country to continually bail out major 
corporations. When the American people, little people as we sometimes 
call them here--they are big in my heart--but the little person needs 
some help, we don't find it within our hearts and our power to help 
them.
  We have the ability to make a difference in the lives of people 
today. This is why I am encouraging my colleagues to vote for this 
bill.
  Mr. HENSARLING. Mr. Speaker, I continue to reserve.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the 
gentleman who helped put this bill together, the gentleman from 
California (Mr. McNerney).
  Mr. McNERNEY. Mr. Speaker, I represent Stockton, California, which 
unfortunately has the highest foreclosure rates in the country. Many 
families in northern California have lost their homes and the 
foreclosures have lead to personal hardships, community instability and 
national economic risk.
  When my constituents asked me what Congress was doing to fix the 
economy, I told them we are pushing to create family-wage jobs and put 
money back in people's pockets. Today we are building on these efforts 
by considering legislation that will provide fiscally responsible 
options for families struggling to stay in their homes.
  Last December I hosted a workshop for foreclosures in Stockton with 
my colleague, Dennis Cardoza, to provide housing counseling to local 
families. While we expected the turnout to be high, participants 
started lining up 2 hours early and, ultimately, more than 500 people 
showed up.
  I heard heart-breaking stories from my constituents, and this is just 
one single illustration of why today's legislation is so important. One 
of the biggest challenges facing the housing market is in the high-cost 
States, like California, that housing programs have not kept pace with 
the times. Unrealistically low limits for Fannie Mae, Freddie Mac and 
FHA mean people living in the high-cost States have not fully benefited 
from these programs.
  The economic stimulus package, temporary loan limit increase to 
$730,000, raising the loan limit, injects liquidity into the mortgage 
market to provide access to credit and opens new opportunities for 
refinancing.
  However, since these increases are only temporary, it is clear that 
making them permanent will have beneficial effects for the housing 
market. I introduced the Homeowner Opportunity Act to permanently raise 
the loan limits, and I am pleased that today's legislation includes my 
bill.
  I want to thank Chairman Frank for all of his support and assistance. 
This change will benefit my constituents and the entire country.
  Mr. NEUGEBAUER. Mr. Speaker, I continue to reserve.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to a very 
active member of the committee, the gentleman from Colorado (Mr. 
Perlmutter).
  Mr. PERLMUTTER. I just want to thank you and the committee for 
bringing a very focused piece of legislation to the House floor.
  Mr. Speaker, to my friends from Texas, who have heard stories that 
this is a bailout, this is no bailout. This is about Strasbourg, 
Colorado, where there have been foreclosures around a neighborhood, and 
one person trying to sell their property can no longer do that because 
the value of their house is less than their mortgage. They are 
innocent. They didn't deserve this.
  Secondly in Edgewater, Colorado, where the lender, the appraiser and 
the building owner got into cahoots, and a young couple buys a 
condominium, and now the properties around them are foreclosed. They 
are going to lose this property. They need assistance. They are 
innocent. They deserve some help from this government.
  Same thing in Commerce City, Colorado. I heard all of these stories 
last night on a telephone town hall meeting while we were debating the 
Neighborhood Stabilization Act. That's what this bill is about. It's 
about the community as a whole.
  Mr. Marshall from Georgia understands what this bill is about. It's 
about looking after our neighborhoods and protecting our neighborhoods 
and averting 500,000 foreclosures across this country.
  Our neighborhoods, our cities, our towns are going to pay for this if 
the Federal Government doesn't assist in some fashion. This is a 
nationwide problem. The Nation has to stand up. We have to deal with 
this. This bill does it in so many ways, and I just appreciated coming 
to the floor.
  Vote ``yes'' on this bill.
  Mr. NEUGEBAUER. Mr. Speaker, I continue to reserve my time.
  Mr. FRANK of Massachusetts. Mr. Speaker, I now yield 2 minutes to the 
chairwoman of the Housing Subcommittee, who makes her second appearance 
today, having carried through passage of a very important bill earlier 
today, the gentlewoman from California (Ms. Waters).
  Ms. WATERS. I would first like to thank our chairman, Barney Frank,

[[Page 8258]]

for the leadership that he has provided on dealing with a serious 
problem in America. I would like to thank the Members once more for the 
support that they gave me on the Neighborhood Stabilization Act that we 
passed today. That, coupled with what is being done now, will go a long 
way to providing real assistance to our cities, to our counties, to our 
States and to our citizens.
  I know that it has been said over and over again today that people 
are suffering, that there are people who got into these loans that did 
not understand what a no-doc loan, a no interest rate loan was, an ARM 
that was going to reset within 6 months, 1 year or 2 years, and that 
the mortgage would double, triple or quadruple.
  They are innocent, hardworking Americans out there every day who 
simply want to live the American Dream. Many of them were steered into 
these loans because there was this big, big housing bubble.
  We had these local initiators of loans through our banks and our 
mortgage brokers who discovered that they could package them, they 
could securitize them, they would be invested in Wall Street, and the 
Wall Street people invested mightily in them, and now the services have 
them all. The only thing that the services can do is foreclose on these 
properties.
  Well, we can do something about it. I don't know why we have to argue 
and fight about whether or not we can help the American people. They 
sent us here to look after their best interests.
  I don't understand why anybody can call this a bailout when, in fact, 
nobody has said anything about the bailout of the almost $30 billion 
for Bear Stearns. If we can help Wall Street, we certainly can help the 
people who vote for us every day and who sent us here.
  We help people all over this Nation in different ways. Some people 
are confronted with a hurricane, or a flood or an earthquake. American 
citizens expect us to be there for the citizens when we are needed in 
different ways. This is a different way.
  I ask everyone to support the bill.
  Mr. NEUGEBAUER. Mr. Speaker, it's my honor now to yield 2 minutes to 
the gentlewoman from Virginia (Mrs. Drake), who has an extensive amount 
of experience in the housing industry and brings great expertise to 
this process.
  Mrs. DRAKE. Mr. Speaker, housing is a very complex issue. We are 
talking about a person's home, real people with a real problem. Prior 
to Congress I was a realtor for over 20 years.
  I have worked with many families to help them realize their dream of 
homeownership. I have served as chairman of the Virginia Housing Study 
Commission. I have seen good markets and bad and many changes to the 
mortgage industry. I have struggled with how to define and protect 
against predatory lending practices. I have seen interest rates and 
loan products that seem too good to be true.
  Unfortunately, we have seen they were too good to be true. There are 
many components of this bill, which I think are excellent. Enacting 
those reforms now would have a huge impact on the housing market and be 
helpful to American families.
  My concerns with today's package include the establishment of a new, 
affordable housing fund and a $300 billion Federal loan guarantee 
program. A lender with troubled loans could contact those homeowners, 
offer a federally backed loan and refinance at a loss.
  But now he has moved that loan from a complete loss to 85 percent 
current value that will be guaranteed by the Federal Government. He now 
has no reason to work with that borrower. Neighbor A bought at the 
height of the market. He struggles but pays. Neighbor B negotiates 85 
percent of current value, a huge impact on the value of surrounding 
properties.
  This is a voluntary program. Can't we develop incentives for the 
private sector and not obligate the American taxpayers with $300 
billion in loan guarantees? There are several things that are currently 
making a difference. The FHA Secure loan program, HOPE NOW, an alliance 
to prevent foreclosure through outreach to delinquent borrowers. Fannie 
Mae is currently working on a streamlined short-sale program to allow 
the sale of properties that are overmortgaged.

                              {time}  1530

  The fact is, one out of two people never contact their lender for 
help. Both the administration and the private sector need to explain 
what is available. Neither has done a good job.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the 
gentleman from Pennsylvania (Mr. Sestak).
  Mr. SESTAK. Mr. Speaker, much has been said about how we got into 
this situation, although someone said it best, I thought: too little 
oversight, too much greed, too little understanding.
  But there are several things we do understand. There is no single 
cause for why we got into this housing crisis, so there is no single 
solution.
  But second, we must act now. This March, there was a 57 percent 
increase in the number of defaults than the previous March a year ago. 
And of all of the adjustable rate mortgages that will be reset this 
year to a higher interest rate, 80 percent are the subprime category. 
Those subprime categories are at a delinquency twice that of a fixed 
rate. In short, even before the interest rates go up, we have so many 
people who are already in trouble with their loans.
  Third, and most importantly, this is not just about the homeowner or 
the mortgage lender, this is about all of us. What we have seen is not 
just harming the housing and manufacturing industries, it has seeped 
over into the bond market for municipal bonds and even for education to 
where, because of the exposure of bond insurers, we cannot have bonds 
that are being given in these categories. So, therefore, I think very 
highly of this bill.
  I think this bill is done in the right way. It is providing relief to 
actual, real people, those living in homes, not speculators. Second, it 
steps over and it doesn't give any bailout to lenders. It says you must 
write down your loans and you must pay into a reserve fund and do 
closing costs.
  Most importantly, it has the government reaping the rewards when the 
houses inevitably go back up in value. I think this is great for the 
economy.
  Mr. Speaker, I would ask one thing to consider as we go forward. I am 
taken by incentivizing people to come forward. And as someone on the 
other side said, incentivizing them even by being exposed to more risk. 
The CBO said that out of the 2.8 million foreclosures expected to occur 
if nothing happens between now and 2013, about 500,000 loans will be 
refinanced.
  CBO believes that many original and secondary lenders will be 
reluctant to participate.
  This is a problem that must be addressed. To be most effective, I 
believe that there must be greater incentives for the original lien 
holders--who take the haircut up front--to have the option to share in 
some portion of potential profits on resale.
  For those lenders willing to take a bigger piece of the risk upfront 
(beyond the 85 percent of current market value limit in the bill), 
there should be added incentive to participate in the upside potential.
  Overall, I support this bill because it addresses many of the issues 
that need to be solved quickly. But I believe that more needs to be 
done to provide proper incentives to ensure that lenders, who will play 
a critical role in the economic and housing recovery, will fully 
participate, and I am prepared to work with the Chairman and House 
leadership for an appropriate resolution.
  Mr. NEUGEBAUER. Mr. Speaker, I continue to reserve.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the 
gentleman from Texas (Mr. Hinojosa).
  Mr. HINOJOSA. Mr. Speaker, I rise today in strong support of the 
underlying bill, H.R. 3221, the American Housing Rescue and Foreclosure 
Prevention Act of 2008, and in particular H.R. 5830, the FHA Housing 
Stabilization and Homeownership Retention Act of 2008, which is part of 
this housing rescue package.
  I am proud to be a cosponsor of H.R. 5830. I believe that it is a 
well-balanced measure that will go a long way towards turning around 
the housing crisis and address the issues that have resulted in a 
nationwide economic crisis.

[[Page 8259]]

  Mr. Speaker, I am especially pleased with title II of the bill which 
establishes a long-needed Office of Housing Counseling within the 
Department of Housing and Urban Development. I commend Chairman Frank 
and Ranking Member Waters for including it in their bill.
  I sincerely appreciate the fact that community-based organizations 
with expertise in the field of housing counseling will be given a voice 
in the development of such policies. I am pleased that the bill 
provides for the building of capacity to provide housing counseling 
services in areas that lack sufficient services such as large parts of 
my district in the Rio Grande Valley and in rural America in general.
  Moreover, I applaud Chairman Frank and Congresswoman Waters for 
including in the bill the authorization of $3 million for public 
service announcements as part of the act's national public service 
multimedia campaign. This campaign will help persons facing mortgage 
foreclosure, elderly persons, persons who face language barriers, and 
low-income persons.
  I want to take this opportunity to thank them for increasing the 
availability, affordability, and quality of housing in rural America. 
And I believe this bill will do more of the same.
  Mr. Speaker, I believe the product Chairman Frank and Congresswoman 
Waters have brought to the floor will result in more homeowners 
remaining in their homes and help stabilize the housing market. I 
strongly urge my colleagues to vote in favor of this bill.
  Mr. NEUGEBAUER. Mr. Speaker, may I inquire as to the time remaining.
  The SPEAKER pro tempore. The gentleman from Texas has 4\1/2\ minutes 
remaining. The gentleman from Massachusetts has 13\1/2\ minutes.
  Mr. NEUGEBAUER. Mr. Speaker, I continue to reserve.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 2 minutes to the 
gentleman from Oregon (Mr. Wu).
  Mr. WU. Mr. Speaker, last year 1.5 million American households 
entered foreclosure, and this year the number of American families in 
danger of losing their homes could be as high as 2 million. These 
foreclosures could reduce overall economic activity by $166 billion 
this year as the effects of the mortgage crisis spill over into other 
sectors of the economy.
  In my State of Oregon, the foreclosure rate among subprime borrowers 
increased by 28 percent in the fourth quarter of 2007. Over 5,000 
Oregon families are currently in foreclosure, more than half of whom 
hold subprime mortgages.
  But this debate is not about facts and statistics. If it were, it 
would be over by now. By requiring that the holders of debt take a 
haircut down to 85 percent of current market value, we are sharing the 
pain. By requiring that people who are working in order to be eligible 
for this program are paying at least 35 percent of their income in 
order to be eligible, we are exercising responsibility.
  What this debate is really about is a matter of values. The values 
being expounded on the other side of this debate are absolutely 
astounding, and nothing illustrates it better than a movie I love, 
``It's a Wonderful Life.'' George Bailey was the hero of that movie, 
and he was dealing with a hard-hearted old man named Mr. Potter. Mr. 
Potter said to George Bailey as he was trying to save American 
households, ``Have you put any real pressure on these people to pay 
their mortgages?''
  And George Bailey relied, ``Times are bad, Mr. Potter. A lot of these 
people are out of work.''
  ``Then foreclose.''
  George Bailey answers, ``I can't do that. These families have 
children.''
  ``Not my children,'' said Mr. Potter.
  Well, what we hear from the other side is: not my children, these 
folks are irresponsible, throw them out.
  We clearly have the upper hand in this debate.
  Mr. NEUGEBAUER. Mr. Speaker, I continue to reserve.
  Mr. FRANK of Massachusetts. Mr. Speaker, I yield 1 minute to the 
gentlewoman from California (Ms. Lee).
  Ms. LEE. Mr. Speaker, let me thank Chairman Frank and Chairwoman 
Waters for bringing this badly needed legislation to the floor today. 
Millions of families in America are seeing their dream of homeownership 
turning into a nightmare. Foreclosure rates have reached crisis levels. 
In California and in many parts of my district, too many families are 
facing devastation, and entire neighborhoods are on the brink of 
collapse.
  Homeownership has been the primary means that most Americans have to 
accumulate any kind of wealth, to send their kids to college, to start 
a small business, or to do whatever they want to do to be part of the 
American dream.
  I want to thank Chairman Frank for including language in this 
legislation which I introduced with Senator McCaskill to address the 
Reverse Mortgage Proceeds Protection Act which protects seniors from 
losing their homes.
  We are beginning to see some of the same abuses in the advertising 
and high-pressure sales of reverse mortgages as we saw in the subprime 
mortgage crisis. These provisions will ensure that vulnerable seniors 
are fully informed of hidden costs and pitfalls of reverse mortgages 
before they sign.
  Mr. NEUGEBAUER. Mr. Speaker, it is my honor to introduce the 
gentlewoman from Tennessee (Mrs. Blackburn) who is also on the 
Committee on Financial Services, and I yield 2 minutes to her.
  Mrs. BLACKBURN. Mr. Speaker, I heard from one of my constituents who 
said they felt like this bill was not really about rescuing homeowners, 
they felt like it was another attempt at wealth redistribution. They 
felt that the risk and the costs that are borne and should be borne by 
irresponsible lenders, investors, and borrowers are going to end up 
being transferred to the Federal Government and thereby to the American 
taxpayer once again. And this time, it is to the tune of $300 billion.
  What the bill does is the good actors, the 92 percent of all mortgage 
holders who are paying their mortgage on time, they are going to end up 
being liable for the irresponsible actions of lenders and speculators. 
The way my constituencies see it, this is a risky business. This 
Congress should not send a message that it is acceptable to give up on 
an obligation because you're going to have a government buyout or a 
bailout and you are going to be able to cut your personal losses.
  Last week I did a seminar in my district. I worked with some 
government and private sector initiatives such as Hope Now, working to 
help homeowners weather the storm, to get the information to them that 
they needed.
  Mr. Speaker, that is what we should be doing, educating homeowners on 
the options at their disposal, as opposed to passing measures that 
reward recklessness and provide a safety net for irresponsibility. 
Congress does not need to bail out the housing market, it needs to 
encourage a kick start. I hope that my colleagues will join me and that 
together we will vote this bill down.
  Mr. FRANK of Massachusetts. I yield 2 minutes to another very active 
member of our committee who has been very active on the loan issue, the 
gentleman from California (Mr. Sherman).
  Mr. SHERMAN. Mr. Speaker, the facts are these: Homeowners have signed 
mortgages where they can't afford to make the payments, especially as 
they are adjusted upwards. We need to write-down the principal amount 
to something that these good homeowners can afford. But we are told 
``don't bail out the lenders.''
  There are two ways to write-down the principal amount of a loan: an 
involuntary way through the bankruptcy court, and we had a bill before 
this House which authorized the bankruptcy court in very limited 
circumstances, very tailored, to write-down the balance of the loan. 
Don't bail out the lender, just tell the lender they have to take less. 
That bill is not going to pass. It is opposed by Republicans in the 
Senate.
  The second way is a voluntary way. You make a fair offer to the 
lender that, if they will write-down the principal amount, then they 
will get a guarantee of that lesser amount from the government--so at 
least they will

[[Page 8260]]

get paid something. Now we are told to vote against this bill because 
it bails out lenders.
  Some are giving hypocrisy a bad name.
  If you are going to help homeowners, you have to write-down the 
balance of the loan. And people come to this floor and they say well, 
we can't do it the voluntary way, and we can't do it the involuntary 
way; but just as soon as we find some other way, they will be happy to 
bail out homeowners.
   The fact is they have voted against using the bankruptcy court to 
write- down the principal amount and not give the lenders anything. And 
now they are saying when we make a fair offer to the lenders to do the 
same thing, we are bailing out the lenders.
  I have a lot of ``respect'' for anybody who can come to this floor 
and just say they don't want to help these homeowners at all. That's an 
honest position. But to say you are against the voluntary and 
involuntary, that's wrong.
  Mr. FRANK of Massachusetts. I have one request for a unanimous 
consent, and then I'm going to close, so I would yield to the 
gentlewoman from New York for a UC.
  Mrs. MALONEY of New York. I thank the gentleman for yielding to me 
and for his extraordinary leadership on this extremely important 
housing stimulus package. It is good for the country and good for my 
constituents in New York City. I strongly support it.
  Mr. Speaker, I rise in strong support for this Housing Stimulus 
Package.
  It is good for our country and it is good for my constituents in New 
York.
  We all know we are facing a housing crisis.
  Foreclosures are at record highs, wages are stagnant and the markets 
continue to be volatile.
  This housing package will help restore order and provide the roadmap 
forward.
  In addition to the $300 billion voluntary program that would permit 
FHA to provide up to $300 billion in new guarantees to help refinance 
at-risk borrowers into viable mortgages, we are doing a number of 
things to help the mortgage market.
  We are making permanent the current FHA and GSE loan limits we passed 
as part of our first stimulus package.
  Without this limit, the FHA limit in New York City would drop from 
$729,750 to $362,000 and the Fannie Mae/Freddie Mac limit would drop 
from $729,000 to $417,000.
  This bill modernizes the reverse mortgage provision administered by 
FHA, allowing co-ops to be included for the first time.
  We are preserving affordable FHA-insured foreclosed multifamily 
projects. Including language important to New York City.
  This bill includes an amendment I offered that will provide for 
higher loan limits on homes that include a licensed child care 
facility.
  This bill is needed. It helps our communities and I urge its 
adoption.
  Mr. FRANK of Massachusetts. I intend to close with our remaining time 
as our last speaker.
  Mr. NEUGEBAUER. Mr. Speaker, I rise in strong opposition to this 
bill. I think we have had a good discussion here today. Unfortunately, 
it was a discussion only and there was not opportunity for our side, or 
really any other Members to participate in this process of offering 
amendments that could have most likely made this a better piece of 
legislation.
  There are several reasons I oppose this bill. Number one is the 
flawed process. In my tenure in Congress, I have never had a major 
piece of legislation like this where I am not even going to get an 
opportunity to cast my vote. I know people who are watching this 
process are wondering, you mean we have been talking all day about this 
important piece of legislation that the other side says is very 
important to the American people, yet their Member of Congress is not 
going to get a vote on this process. It is a flawed process.
  We brought an energy bill over, stripped all of the energy provisions 
out of it, and we are putting housing into an energy bill. I still 
don't understand the mechanics of that, and maybe someone later on can 
explain that to me.
  This is also about not saddling the American people who are already 
struggling to make their own house payments, to make their own rental 
payments, to pay the highest gasoline prices in the history of this 
country, and the highest electricity costs and natural gas costs, it is 
about saddling them now with the payments for their neighbor.
  What the 110 million people who are doing the best they can and want 
the United States Congress to do is to leave them alone and really 
start addressing the major issues that are important to the American 
people.

                              {time}  1545

  It's about not rewarding bad behavior. We have some lenders, and we 
have some borrowers that went out and bet that the housing market was 
going to go up. It didn't go up, and, in fact, unfortunately, in some 
places, it went down. And now people are faced with a negative equity 
or a smaller equity in their home. And we are sympathetic to that.
  As I said earlier, I've been in the real estate business for a very 
long time. I've seen the markets go up. I've seen the markets go down. 
And sometimes it causes a situation where people don't have as much 
equity.
  But what you have to understand is a lot of people went into this 
process with no equity. And now this bill says, you know what? We've 
got a deal for you, because now we're going to help create equity in 
your house by putting your neighbors at risk.
  This is a bad bill. I encourage Members to vote against this bill. 
I'm sorry. We can't vote against it. Vote against the amendments.
  Mr. FRANK of Massachusetts. How much time is there remaining, Mr. 
Speaker?
  The SPEAKER pro tempore (Mr. Jackson of Illinois). The gentleman from 
Massachusetts has 8\1/2\ minutes remaining.
  Mr. FRANK of Massachusetts. Mr. Speaker, I understand the complaints 
about the process. Remember, though, that several of the bills being 
reenacted today have already been fully debated and amended on the 
floor. There is one that was not subject to the normal--and I'm a 
general defender of the normal--process. It's the FHA rescue bill.
  And I will say, in this case, I think it is fair to ask Members to 
vote for it up or down. It is a very interrelated piece of legislation. 
It tries to balance cost and incentive. It would be easy to put it out 
of whack. And in this one case I think it is fair to say you can vote 
it up or you can vote it down. Members will have a chance to vote on 
it. While it's in the form of an amendment, if that amendment is 
defeated, it dies.
  I also want to address the issue of the amendment offered by the 
gentleman from North Carolina and the gentleman from Ohio regarding 
preemption, because there may be some confusion.
  I personally spoke, today, with representatives of the banking 
organizations, the American Bankers Association, the Independent 
Community Bankers, and the Mortgage Bankers. They took the position 
that if we were able to adopt the language offered by the gentleman 
from Ohio, they would find this a bill that they would accept and would 
not seek to defeat.
  Because of an objection, we weren't able to do this, so technically, 
yes, they had previously said they were opposed to it in that form. 
They have also said, after we outlined the procedure that was followed 
by the gentleman from Ohio (Mr. LaTourette), the gentleman from North 
Carolina (Mr. Miller) and myself, that it is now acceptable; that is, 
while we were blocked by an objection from adopting the actual 
language, the language that was agreed to by them, by the Attorneys 
General, by the State bank supervisors, by advocacy groups, will be the 
language that's in the bill. So let there be no doubt about that. There 
is no substantive objection to what will happen.
  Now, let me talk about the bill. I guess I want to, not damn my bill 
today with faint praise, but support it. It comes from the economists.
  Now, the gentleman from Arizona (Mr. Flake), for whom I have a great

[[Page 8261]]

deal of respect, a man of very high intellectual integrity, he chided 
me because I have taken a free market position, but not here. And I'll 
respond this way.
  I have opposed systemic interventions in the market. I think it is 
generally unwise for us to enact legislation which, in an ongoing way, 
displaces the market. But that's not what we do here. There is a part 
of the reality of the market that is called market failure. People have 
won Nobel Prizes, Joe Stiglitz, for work about market failure. Clearly 
there has been market failure with regard to mortgages. The market 
failure was the breaking of the lender-borrower relationship and the 
substitution of securitization without appropriate countervailing 
incentives.
  This bill today is no ongoing intervention in the market. It is time 
limited, and limited in specifics to a subset of mortgages. It seeks to 
undo, to some extent, to mitigate a market failure. It will leave the 
market, I believe, stronger going forward.
  So I accept the gentleman from Arizona's reminding me that I should 
stay true to free market principles. This bill is true to free market 
principles.
  And let me quote one of the leading advocates of free market 
principles in the English-speaking world, the Economist, called to my 
attention by the staff of the Financial Services Committee, which has 
done enormously good work in substantively putting this bill together, 
and in listening to me talk about it in various ways. And I appreciate 
both aspects of that.
  Here's what the Economist said: ``The plan is hardly a bailout,'' 
talking about this bill. This is a current Economist. ``Lenders would 
have to write down their loans to 85 percent of the current value of a 
house.'' By the way, under FHA Security Administration's plan, they can 
get a 100 percent loan put in. They can get somebody who's defaulted 
and get them a 100 percent loan. We require an 85 percent writedown to 
the value.
  ``Borrowers would pay a fee for the insurance and give up a share of 
any later price rise to the government.'' By the way, they would also 
be barred for 5 years from taking out a second mortgage. So the 
borrowers under this, if there was an increase in equity, would have to 
share much of it with the Government, and the earlier in the process in 
which they sold out, the more the Government would get. That's not the 
bailout that people have described.
  People worry about moral hazard. I would assure people, no borrower 
who goes through this process will say at the end of it, ``Boy, that 
was fun. Where do I buy a ticket to get back on Space Mountain?'' They 
will be deterred.
  But we're not relying solely on this. Two-thirds plus of this House, 
many of my Republican colleagues didn't do it, but many of my 
Republican colleagues did. We voted for a bill to regulate subprime 
mortgages going forward. We're not simply relying on people's bad 
experience. We have put some restrictions on that.
  I believe this is pro-market. The markets now are in trouble because 
a lot of people who were very smart bought things they shouldn't have 
bought, including subprime mortgages. And having bought things they 
shouldn't have bought, they now don't want to buy things they should 
buy.
  We all know the little story about the child who touches the hot 
stove, and having touched a hot stove and being burned, won't go near 
the stove. We have investors today who, having touched the hot stove, 
are staying away from the refrigerator, the sink and the shower because 
they have been so badly burned.
  If we do not adopt appropriate responses to this market failure, we 
will not cure it, and the lag in investments will continue.
  We are working through the market here. It is voluntary that a lender 
says we're going to cut it down. People say, well, they'll dump all 
their bad loans. Have the Republicans who say that, because many 
Republicans are with us, so little confidence in the FHA?
  Nothing in this bill coerces the FHA to accept a single loan that it 
finds unlikely to be repaid. And CBO accepts that, because they say of 
500,000 loans that they expect to be accepted, the failure rate will 
be, average out to $4,800 per loan. Do you really think if the loan 
failed it would only cost us $4,800?
  That figure, that $2.4 billion is CBO saying that there won't be many 
failures because of the criteria that are in this bill.
  And people have said, what about the people who paid their mortgages? 
Well, if they live in a neighborhood where there is foreclosure, 
they're getting hurt. If they live in a city where the property tax 
revenues are going down, they're getting hurt. And if they live in 
America, they are in the midst of a recession in which we are losing 
jobs when we should be gaining them, in which real wages have been 
pulled down, and the single biggest cause of this recession is the 
subprime crisis and its reverberations.
  This is a rare case of a microeconomic factor causing a macroeconomic 
problem. And the market got us into this. And we don't say junk the 
market. And I know people who have said, oh, the market's way too 
smart. And people have said to me, you know, some smart people don't 
agree with this proposal. Well, I agree with that.
  But I also have to note that no dumb people got America into this 
problem. You had to be really smart to understand collateralized debt 
obligation derivatives. And the problem is that we need to restrain 
some of their instincts and let the market function again. And it 
simply will not happen if you simply let it go.
  Here's what we say. And, by the way, I supported Hope Now when it 
came out. But Hope Now had a flaw. It was based on the notion--Members 
don't even pay attention to this--it was based on the notion that the 
problem was when the mortgage reset to a higher rate under adjustable 
rate mortgages, that would be the problem. That hasn't been the 
problem.
  The problem has been people who owe more than the loan is worth. Some 
of them were irresponsible in the first place. Some of them made the 
mistake that almost everybody else made of not foreseeing the depth of 
the drop in house prices. So Hope Now has been overtaken by events.
  We here are responding to reality in a way that is pro-market and 
minimizes the outlay. I hope the bill is passed.
  Mr. VAN HOLLEN. Mr. Speaker, I rise in support of the second 
amendment to the American Housing Rescue and Foreclosure Prevention Act 
of 2008.
  Today, one quarter of subprime adjustable-rate mortgages are 
delinquent by 90 days or more. As a consequence, during 2007, 
foreclosure proceedings were initiated on about 1.5 million U.S. homes. 
The Federal Reserve has projected that the rate of foreclosures will 
grow even higher in 2008.
  We know that many of these foreclosures are unavoidable. There are 
cases where investors choose foreclosure because a property's value has 
depreciated significantly, or a borrower's personal circumstances have 
changed. And, many times, as has recently become alarmingly prevalent, 
a borrower was put into a loan inappropriate for their circumstances. 
But, if a foreclosure is preventable, and the borrower wants to stay in 
the home, the economic argument for trying to avolid foreclosure is 
strong.
  Foreclosures impose high legal and administrative costs. Foreclosures 
can destabilize communities, reduce area property values and lower 
municipal tax revenues. And, at the national level, foreclosures add to 
the stock of homes for sale, increasing downward pressure on home 
prices, which affects the broader economy.
  In the past, mortgage defaults were usually triggered by a borrower's 
life event, such as the loss of a job, serious illness or injury, or 
divorce. But the widespread decline in home prices we are witnessing 
today is a relatively new phenomenon and lenders, servicers and 
policymakers will have to develop new strategies to meet this new 
challenge.
  To be effective, our approach must closely target the borrowers at 
the highest risk of foreclosure while avoiding programs that give 
borrowers, who can make their payments, an incentive to default.
  The American Housing Rescue and Foreclosure Prevention Act will 
address these

[[Page 8262]]

problems. The bill's second amendment contains several housing-related 
tax provisions recently reported by the Ways and Means Committee as 
part of the Housing Assistance Tax Act.
  The amendment creates a refundable tax credit of up to $7,500 for 
first-time homebuyers that would serve as an interest-free loan, and 
provides an additional standard deduction in 2008 of up to $350 for 
individuals and $700 for couples for state and local property taxes. It 
authorizes an additional $10 billion in taxexempt bonds that would be 
used to refinance subprime loans, finance the construction of low-
income rental housing, and support loans to first-time homebuyers.
  To assist our men and women in uniform, many of whom have put 
themselves in harms way in service to their country, the amendment adds 
provisions from a measure approved by the Veterans Affairs Committee 
that extends to one year, from 90 days, the period following active 
duty service during which service members are protected from 
foreclosures.
  This amendment will fully offset the cost of its tax provisions in 
two ways. First, by raising $8 billion through FY 2018 by requiring 
brokers to report their customer's basis in securities transactions, 
and second, by raising $3.2 billion through FY 2018 by delaying, until 
2010, new rules allocating interest expenses between foreign and 
domestic sources.
  Mr. Speaker, I am proud to stand today in support of the second 
amendment to The American Housing Rescue and Foreclosure Prevention Act 
of 2008 and I urge my colleagues to join me.
  Mr. DINGELL. Mr. Speaker, this legislation represents a fair, common 
sense solution that will allow homeowners to stay in their homes and 
help stabilize the housing market. I would like to extend my gratitude 
to Chairman Frank for his hard work on this legislation, which will be 
of critical importance in Michigan, where there are thousands of 
homeowners in danger of foreclosure. I am especially pleased that this 
bill includes legislation which I cosponsored that would provide up to 
$300 billion in new loan guarantees to help refinance at-risk borrowers 
into viable mortgages. In addition, this legislation includes important 
provisions that expand homeownership opportunities for veterans, 
seniors, and first-time homebuyers.
  This legislation will help both homeowners and lenders, but this is 
no bailout. Lenders who participate will have to take a loss, but their 
losses under this program will be far less than if these properties go 
into foreclosure. Borrowers who realize a profit when they sell their 
home must return some of that profit to the government. The United 
States provided similar leadership during the New Deal using a program 
run by the Home Owners' Loan Corporation, HOLC. Much like the HOLC, 
this program stands to save millions of homes from foreclosure at a 
minimum cost to the taxpayers.
  I would especially like to thank Chairman Frank for his assistance in 
securing passage of a provision important to the residents of Parkview 
Apartments in Ypsilanti, Michigan. I have been working for four years 
now to try to facilitate the transfer of this property to Ypsilanti 
Housing Authority. Chairman Frank and the staff of the Financial 
Services Committee have been instrumental in these efforts, which are 
designed to clarify Congressional intent regarding certain properties 
that entered the Department of Housing and Urban Development, HUD, 
property disposition process prior to the enactment of the Deficit 
Reduction Act, DRA, but where the initial proposed disposition was 
delayed.
  While I believe that Parkview is already subject to the 
grandfathering provision of the DRA, this provision 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 provision is one of many that was included in 
legislation that passed the House last year, and is now being included 
in this bill as part of a comprehensive housing package. This 
legislation is of the utmost importance to the Congress, and it is my 
hope and expectation that it will soon be enacted into law.
  Mr. DONNELLY. Mr. Speaker, I rise in strong support of H.R. 3221, The 
Foreclosure Prevention Act of 2008 and the package on the floor today 
that will provide much-needed relief to homeowners at risk of 
foreclosure across the country.
  The collapse of the mortgage market that has unraveled over the last 
year has not only impacted homebuyers who entered into non-traditional 
mortgage products that they now find they are unable to repay, but has 
also reverberated throughout the economy. We must act with necessary 
urgency and pass the package before us today.
  My home State of Indiana has been significantly impacted by this 
foreclosure crisis, which is contributing to an ongoing economic 
downturn. Our State has lost 27,000 jobs in the manufacturing industry 
since 2000. Additionally, in 2007, 53,000 Indiana homes received 
foreclosure notices. This number is up 74 percent from the number of 
notices in 2005. That means that 53,000 families in my State+ may be 
forced to move out of their homes, pull their children out of school 
and find another place to live. Mr. Speaker, many of these people are 
not reckless speculators, but rather hard-working families struggling 
to make ends meet.
  This package allows lenders, investors and homeowners to voluntarily 
sit down at a table and work out a plan to rescue mortgages that may be 
on the verge of foreclosure. It takes a responsible approach to provide 
rescue assistance to those who most need it without encouraging 
irresponsible behavior.
  Mr. Speaker, I am also glad to see that this legislation includes a 
bill I introduced to raise loan limits on FHA Title I-insured 
manufactured home loans which have not been adjusted since 1992, 
allowing more people to enter into a mortgage that they can afford on a 
high-quality affordable home.
  Also, this comprehensive package includes a number of tax incentives 
to help prospective and current homeowners. It provides a $7,500 tax 
credit to eligible families to put towards their downpayment on their 
first home. Existing homeowners who do not itemize their tax returns 
for 2008 would be eligible to deduct up to $700 for property tax relief 
at a time they need it most.
  Mr. Speaker, I want to thank Chairman Frank for his continued 
leadership in responding to the housing and economic crisis and I urge 
all my colleagues to pass the Housing Rescue Package today.
  Mr. ETHERIDGE. Mr. Speaker, I rise in support of H.R. 3221, American 
Housing Rescue and Foreclosure Prevention Act of 2008, and amendments 
to the bill. This bill is a critical step towards stabilizing our 
housing market, and providing assistance to thousands of Americans 
facing foreclosure.
  There are grave problems facing our current housing market and 
economy. Decreasing home values and lack of available credit are 
damaging the market, and skyrocketing mortgages have led thousands of 
families to face the frightening prospect of foreclosure. 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 unfortunately 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 is a comprehensive package that can provide relief 
to these families and our communities in a variety of ways. Provisions 
in this bill reform and modernize the Federal Housing Administration 
(FHA) as well as government sponsored entities Fannie Mae and Freddie 
Mac. These programs allow for stability in the housing market and by 
strengthening their loan limits and regulations, they can serve as a 
safer alternative to the riskier subprime loans we have recently seen. 
The American Housing Rescue and Foreclosure Prevention Act of 2008 also 
includes a tax benefit for first-time homebuyers as well as an 
additional credit on property taxes for existing homeowners who claim 
the standard deduction. These measures will help revive the housing 
market and get our sluggish economy moving in the right direction.
  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 write-down 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.
  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. UDALL of Colorado. Mr. Speaker, I rise in support of this 
legislation.
  In most circumstances, I consider it counterproductive and not in the 
best interest of the American people for the Federal Government to 
intervene in the free market process. However, in certain exceptional 
times, I believe it

[[Page 8263]]

is the duty of the Federal Government to act for the greater good of 
our Nation. And I think we are experiencing such an exceptional moment 
in American history.
  The provisions of this legislative package will help stabilize the 
downward trend in the housing industry and overall economy, and prevent 
that trend from spiraling out of control.
  The danger is real. Just last month, the Pew Charitable Trusts 
released a study that forecast one in 25 homeowners in my home state of 
Colorado will be in foreclosure within the next two years if Congress 
does not act now to curb this impending disaster. The national forecast 
of homeowners in foreclosure within the next two years--one in 33--is 
only slightly less discouraging. If we stand by and do nothing, as some 
have suggested, the damage to the overall American economy could be 
devastating.
  First and foremost, this bill will help American families at risk of 
foreclosure to stay in their homes by allowing the Federal Housing 
Administration (FHA) to guarantee qualified refinanced loans. To do so, 
however, homeowners and their lenders must agree to sacrifice. Lenders 
could recover no more than 85 percent of a property's current value, 
but could avoid the potentially greater losses associated with 
unloading a foreclosed property. Meanwhile, participating homeowners 
could remain in their home, but must repay the Federal Government a 
percentage of the value of the home if they sell or refinance again.
  The bill provides much needed measures to modernize the FHA, allowing 
expanded opportunities for families to secure affordable loans without 
having to turn to subprime lenders. The legislation also increases the 
Veterans Administration home loan guarantee limit, allowing our 
veterans to receive the dignified homeownership opportunities they 
deserve for honoring us with their service; reforms Government 
Sponsored Enterprises through strengthened regulation, while raising 
GSE loan limits for homes in high-cost areas; and encourages mortgage 
servicers to readjust at-risk mortgages by removing the threat of 
lawsuit.
  This legislation would help remove some of the excess housing 
inventory by offering a refundable tax credit for first-time 
homebuyers. It would also provide additional mortgage revenue bonds for 
states to refinance subprime loans, and help prevent soldiers from 
being unfairly penalized for their service by providing more time to 
get their finances in order when they return from service before a 
lender could start foreclosure.
  A final important piece of this legislation would simply protect the 
right of States and cities to regulate their own foreclosure process. 
Some have argued that national banks and financial institutions should 
be exempt from these rules. I, however, believe it is the right of 
States and cities to have their own requirements and enforce their own 
rules throughout the foreclosure process.
  Mr. Speaker, I was very disappointed to learn of the Bush 
Administration's threat to veto this legislation, because I believe 
that it is important for us to act now to provide relief to America's 
stressed homeowners. It is my understanding that Federal Reserve 
Chairman Bernanke and Treasury Secretary Paulson, as well as other 
Administration officials, had worked with Chairman Frank to shape 
provisions of this legislation, so this change of heart is doubly 
regrettable. I hope that the President will change his mind and sign 
this needed legislation when it reaches his desk.
  This legislation has been carefully crafted to safeguard against 
fraud, corporate giveaways and speculator abuse. And as concerned as I 
was that the Federal Reserve had to devote $29 billion to prevent the 
collapse of investment bank Bear Stearns, I am equally concerned about 
the Federal Government taking action to rescue the housing market. 
However, without the stability that the Fed provided the investment 
banking industry, experts tell us that the bottom may well have fallen 
out of our economy. And it appears the same is true for our housing 
market--without the stability this legislation will help provide, it 
may not have the chance to correct itself and, eventually, rebound. 
Main Street deserves the same attention as Wall Street.
  For these reasons, Mr. Speaker, I urge my colleagues to join me in 
supporting all three components of this legislation.
  Mr. LANGEVIN. Mr. Speaker, I rise in strong support of the American 
Housing Rescue and Foreclosure Prevention Act, which will help cities 
and towns, but most importantly, individuals and families that have 
been adversely impacted by the foreclosure crisis.
  In my home state of Rhode Island, this problem is particularly acute. 
Foreclosures have increased by 20 percent in the last few months, and 
it is our most vulnerable communities that have been disproportionately 
affected.
  Last weekend I teamed with Rhode Island Housing--a nonprofit 
organization dedicated to keeping housing affordable--to hold a 
workshop for those facing foreclosure. While we helped many local 
families, it is time for the Federal Government to do its part on a 
national scale.
  I commend Chairman Frank and Chairman Rangel for their leadership in 
bringing this critical measure to the floor. I urge my colleagues to 
support this bill.
  Mr. CARSON of Indiana. Mr. Speaker, I rise today in strong support of 
H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act 
of 2008. This package is a comprehensive response to the current 
housing crisis that has left many honest, hardworking Americans in 
financial distress.
  H.R. 3221 is especially important to Hoosiers who have struggled as 
our state consistently ranks among the top ten for foreclosures 
nationally. The district I represent, which includes most of the City 
of Indianapolis, currently has around 17,000 foreclosed properties and 
around 7,200 in the preforeclosure phase. My constituents need the 
assistance available in this bill urgently.
  This package includes key legislation such as Government Sponsored 
Enterprise reform, Federal Housing Administration modernization, the 
Housing Assistance Tax Act and H.R. 5830, a critical bill reported out 
of the Financial Services Committee last week that will help borrowers 
at risk of foreclosure refinance into more stable loans. These bills 
will not only help borrowers now, but strengthen the mortgage lending 
market moving forward.
  In order to ensure borrowers would be aware of the important FHA 
refinancing opportunity under Chairman Frank's bill, H.R. 5830, I 
introduced an amendment in the Financial Services Committee which 
stated that no less than 2 percent of funds available for counseling in 
the bill would be targeted towards notification to individuals who are 
eligible to refinance their mortgage under the bill's provisions.
  Further, we know that African American mortgage consumers were 3.7 
times more likely than white borrowers to receive subprime loans and 
Latinos were 2.3 times more likely. In order to help those 
disproportionately affected by these high-cost loans, my amendment 
further instructed the Secretary to give preference to organizations 
that have a proven track record for outreach within minority 
communities in allocating these notification resources. I am pleased 
the amendment received bipartisan support and was incorporated into 
this crucial piece of legislation.
  I believe H.R. 3221 is the right approach to this complex housing 
crisis. I thank Chairman Frank and Chairman Rangel for their hard and 
thoughtful work on this bill and I look forward to seeing this 
legislation move forward.
  Mr. BACA. Mr. Speaker, I rise to support this bipartisan housing 
stimulus package.
  The foreclosure crisis is hurting communities all across the Nation, 
and my district has been especially impacted: 4,523 families in my 
district have already lost their homes this year. Over 11,000 families 
in San Bernardino County are currently in default. And the San 
Bernardino-Riverside area in the Inland Empire, ranked #2 nationwide in 
foreclosure filings this year.
  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.
  H.R. 5818, the Neighborhood Stabilization Act which passed today, 
will help stabilize communities harmed by empty homes closed by 
foreclosure. It will provide loans and grants to States to buy and 
rehabilitate these properties and restore home values in neighborhoods.
  The broader housing package is also important for many reasons: FHA 
Stabilization will allow lenders to refinance mortgages with FHA-
insured loans to keep families in their homes. FHA Modernization 
increases FHA loan limits permanently to help high cost housing areas 
like the Inland Empire. The $7,500 Tax Credit for Homebuyers will help 
first-time homebuyers purchasing their first home. Low-income Housing 
Credit Reform modernizes the credit to increase affordable housing in 
underserved neighborhoods. The increase in Mortgage Revenue Bonds will 
allow states to issue more bonds for housing and use the proceeds to 
refinance subprime mortgages.
  Finally, my amendment to the financial services committee bill, H.R. 
5830, will promote in-person housing counseling to reach homeowners in 
default. This is more effective than sending a letter in the mail and 
will help prevent many foreclosures.
  I urge my colleagues to support this housing stimulus package. This 
is the right thing to do and will keep people in their homes.

[[Page 8264]]


  Mr. GEORGE MILLER of California. Mr. Speaker, I rise in strong 
support of this legislation to help homeowners and families affected by 
the housing crisis.
  This past year has been one of the most difficult ever for middle 
class and low-income homeowners because of the collapse of the credit 
markets, the weak economy, and high energy prices. It is clear to all 
that what began as a housing crisis has become a crisis for the entire 
economy and the entire country.
  The housing crisis put a strain on our banking system, and that has 
sent shock waves throughout the credit markets, for cars, for student 
loans, and for all consumers. American families in all walks of life 
are feeling the economic strain.
  Millions of families across the Nation have lost or are at risk of 
losing their homes. Foreclosures in my congressional district, Solano 
County and Contra Costa County, are among the highest in the country. 
People are looking to Congress for help.
  It is critical that we stabilize the housing market and reduce the 
number of homes going into foreclosure.
  The bill we are considering today is urgently needed. It is designed 
to responsibly rescue those who are facing foreclosure. It responds 
directly to the current crisis, but it also establishes a system to try 
to prevent a similar crisis in the future.
  This bill will provide mortgage refinancing assistance to keep 
families from losing their homes, protect neighboring home values, and 
help stabilize the housing market. The federal government will step in 
to insure $300 billion in new mortgages.
  This legislation will allow FHA to insure more affordable fixed rate 
loans for borrowers who are facing financial troubles. It will 
modernize the FHA and reform the GSEs while providing crucial liquidity 
to our mortgage markets now, and will also strengthen regulation and 
oversight for the future.
  The mortgage collapse has sent shockwaves through our entire economy 
and it is clear that stabilizing the housing market is a critical step 
in strengthening our economy.
  I am appalled that President Bush refuses to help American homeowners 
despite being perfectly willing to rescue Bear Stearns just a few 
months ago. It is reckless for the White House to threaten to veto this 
housing package that will make it easier for those in trouble to keep 
their homes and will help stabilize our economy.
  I urge the President to support this bill.
  With this legislation, we can begin to repair the economy, restore 
confidence in the markets, limit the damage to families and 
neighborhoods, and help build new affordable housing. This bill is good 
for hard working American families. We owe it to them to get it done.
  Mr. McDERMOTT. Mr. Speaker, we're here today to take a stand on 
behalf of low-income and vulnerable Americans who have been left out, 
shut out, dropped out or forced out of any chance at decent, affordable 
housing because of the predatory economic policies of this 
Administration.
  Under the leadership of Ways and Means Chairman Charles Rangel, we 
have bipartisan legislation before us today that finally responds to 
the needs of the American people.
  For too long, too many disadvantaged and vulnerable Americans have 
been forgotten, ignored or under-served when it came time to provide 
economic assistance.
  For the first time in a long time we have legislation that recognizes 
and addresses the unique housing needs and circumstances of the working 
poor, and other vulnerable Americans.
  We provide States and cities with incentives to ensure that low-
income housing options remain available to those who need it most.
  We increase the allocation of Federal low-income housing tax credits 
and expand the authority of States to issue tax-exempt bonds to help 
finance affordable housing.
  Section 103 includes language to ensure that Federal assistance that 
helps vulnerable populations, like the elderly, the sick, and veterans, 
does not reduce the value of the Federal low-income housing tax credits 
used to finance affordable rental housing.
  Section 104 allows for consideration of whether an affordable housing 
development employs technology and practices to improve its energy 
efficiency, when Federal low-income housing tax credits are allocated 
to affordable housing developments.
  Section 104 also clarifies that students who were formerly in foster 
care are not precluded from renting affordable housing financed by 
Federal low-income housing tax credits.
  This legislation touches the lives of real Americans who have been 
left behind or outright forgotten for too long.
  I urge my colleagues to support the legislation.
  If we fail to meet the needs of vulnerable Americans, then we will 
fail to live up to our responsibility of governing on behalf of all 
people.
  Mrs. CAPPS. Mr. Speaker, I rise today in strong support of H.R. 5818, 
the Neighborhood Stabilization Act, and H.R. 3221, the American Housing 
Rescue and Foreclosure Prevention Act.
  These bills come at a critical time for America--and especially for 
my constituents on the Central and South Coasts of California. That is 
why I am extremely disappointed that the President has threatened to 
veto them both.
  They include much-needed reforms of the Federal Housing 
Administration, Fannie Mae, and Freddie Mac, and usher these agencies 
into the 21st century.
  But they also accomplish three tasks that are vital to the housing 
market and economy of the Central and South Coasts.
  First, the American Housing Rescue and Foreclosure Prevention Act 
makes permanent the temporary loan limit increases contained in the 
Economic Stimulus Act of 2008.
  Mr. Speaker, I cannot stress enough how vital this provision is for 
my district.
  Median home prices in Ventura, Santa Barbara, and San Luis Obispo 
Counties are well above the national average, and our families are 
truly struggling to obtain affordable housing.
  Second, 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 has the 
authority to refinance up to $300 billion in imperiled mortgages.
  With median home prices in Santa Barbara County alone declining 
almost 30 percent in the past year alone, it is undoubtedly in the best 
interests of lenders to participate in this program.
  Lastly, the Neighborhood Stabilization Act establishes a loan and 
grant program for the purchase and rehabilitation of foreclosed homes.
  Just this week one of my hometown newspapers, the Ventura County 
Star, reported on the negative impact that foreclosed homes have on 
communities.
  Lower home values, increased crime, and safety hazards are just a few 
of the consequences that can result from foreclosure.
  This bill prevents neighborhood decline by providing targeted 
assistance to state and local governments.
  Mr. Speaker, American families need help, and that is exactly what is 
provided by the housing bills on the floor today.
  I urge my colleagues to support these bills, and I urge the President 
to work together with Congress in addressing the needs of the hard-
working families in America who want to keep their homes.
  Mr. MARKEY. Mr. Speaker, I rise today in support of H.R. 3221, the 
American Housing Rescue and Foreclosure Prevention Act of 2008.
  This vital legislation comes at a time of record-breaking gas prices, 
double digit increases in food prices and a weakening economy. On top 
of all these struggles, Americans now face a crisis at home and in 
their communities in the form of rising property foreclosures. In some 
parts of the country, neighborhoods are littered with ``for sale'' 
signs, and many families are struggling to keep up with their mortgage 
payments. The legislation we are debating on this floor today will 
empower communities to respond to the current home mortgage crisis, 
prevent further lending abuses and increase federal oversight of the 
mortgage industry.
  H.R. 3221 expands the Federal Housing Administration's role in 
preventing foreclosures by expanding refinancing loan guarantees for 
at-risk homeowners. Today, families are facing variable interest rates, 
hidden fees, early payment penalties, but with enactment of the 
Foreclosure Prevent Act, the government will be there to provide relief 
and counseling. It also increases oversight to ensure regulators have 
the tools to prevent the next crisis. It expands housing counseling and 
consumer protections. The bill also establishes an affordable housing 
trust fund to provide assistance for low income households. The bill 
even makes it harder to foreclose on the homes of our returning troops 
from Iraq and Afghanistan.
  This bill also contains important language to my district and my 
hometown of Malden, Massachusetts. The tenants of the Heritage 
Apartments face an uncertain future, with an HUD affordability contract 
expiring soon. The tenants are facing possible displacement once an 
outstanding HUD mortgage is fully paid in a few years. The development 
is also in need of major renovations and upgrades that simply cannot be 
delayed. Unfortunately HUD is failing to ensure that the development 
remains affordable and livable by placing burdensome

[[Page 8265]]

restrictions on prepayment of the outstanding mortgage and subsequent 
transfer to a new owner who is willing to finance the renovations.
  Language in this bill would allow 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. I want to thank the Chairman of the Financial Services 
Committee (Mr. Frank) for his assistance in ensuring that this 
important provision is included in this housing bill.
  Today, with this legislation, we are taking steps to revitalize our 
communities for a better tomorrow. I strongly urge this House to vote 
to approve this bill.
  Mr. SKELTON. Mr. Speaker, over the past months, economic conditions 
in our country have soured. Particularly troublesome to our Nation's 
economic engine are skyrocketing home foreclosures and loan delinquency 
rates, which have risen over 85 percent in the past year.
  Foreclosures and delinquencies are harmful to borrowers and lenders, 
but they also stifle economic growth, shake consumer confidence, and 
lower home values for those who live near foreclosed properties.
  While borrowers in our country must certainly bear a great deal of 
responsibility when it comes to financial planning, the government can 
and must carefully examine the impact of soaring mortgage foreclosures 
on the whole U.S. economy and also thoroughly review regulatory 
oversight with respect to the mortgage business.
  I have been pleased that the House has been active in addressing the 
mortgage crisis, voting last year to strengthen consumer protections 
against risky loans and to overhaul the Federal Housing Administration 
(FHA), Freddie Mac, and Fannie Mae, among other things. Under the 
leadership of Financial Services Committee Chairman Barney Frank, the 
House is again poised to pass critical, market-driven housing 
legislation designed to reduce foreclosures, to help families avoid 
foreclosure in the future, and to alleviate the negative impacts of 
foreclosures on property values and the national economy.
  I am pleased to support this legislation, which would create a new 
voluntary program within FHA that would offer lenders an alternative to 
foreclosure. This approach, which is driven by the lenders' desire to 
save costs associated with foreclosing on property, forces the lender, 
the borrower, and the government to all make sacrifices to ensure 
families have the ability to stay in their homes. While some have 
criticized this initiative as a government bailout of those who have 
made poor financial choices, in my view, it represents an innovative, 
market-driven way to shore up the housing market and the overall 
economy.
  The measure would also create a $7,500 tax incentive for first time 
home buyers and other important tax incentives while simultaneously 
modernizing the FHA, Freddie Mac, and Fannie Mae and increasing the 
loan limit for FHA and Veterans' Administration loans.
  I am hopeful that the Senate will act quickly on this well written 
bill and that it will be signed into law by the President.
  Mr. HOLT. Mr. Speaker, I rise today in support of H.R. 3221, the 
Foreclosure Prevention Act.
  At the end of last year, home foreclosure rates rose to the highest 
level in 20 years. Every day more than 7,000 people file for 
foreclosure, and it is predicted that predatory lending practices and 
sub prime mortgages will cause one in every thirty-three homeowners to 
foreclose on their mortgages in the next 2 years.
  This is not an issue that is merely affecting those who have 
defaulted on their mortgages and their lenders; it is having a ripple 
effect throughout the economy. It has resulted in a nationwide decrease 
in housing prices of 12.4 percent, and 10 percent of Americans now owe 
more money on their mortgages than their homes are worth. It has caused 
a decrease in consumer confidence and corresponding decrease in 
consumer spending. It has contributed to a steep increase in job losses 
in housing related industries such as manufacturing, construction and 
related industries. These job losses combined with the loss of consumer 
confidence could reduce economic activity by over 150 billion dollars 
in 2008.
  This is a crisis, and it is time, it is past time, that the Federal 
Government step in and help those that are suffering. H.R. 3221 would 
provide mortgage refinancing assistance to keep families in their 
homes, protect neighboring home values, and help stabilize the housing 
market. It would expand the Federal Housing Administration to help 
borrowers who are at risk of losing their homes to refinance into 
lower-cost government-insured mortgages that they can afford to repay. 
H.R. 3221 ensures that this will be done responsibly, by requiring 
lenders and mortgage investors to take significant losses in order to 
participate in this program and by requiring borrowers to share a 
portion of any resale of a refinanced home with the government.
  H.R. 3221 also provides 11 billion dollars in tax incentives to help 
Americans purchase a first home or hold onto the ones that they already 
have. This includes tax credits to first-time homebuyers, an additional 
10 billion dollars in mortgage revenue bonds for states, and improves 
access to low-income housing. It also includes a provision that I wrote 
to allow homeowners who currently do not itemize their Federal tax 
returns to take an additional standard deduction for the state and 
local property taxes that they pay. The Temporary Tax Relief Act 
creates an additional standard deduction of $350 for single filers and 
$700 for joint filers for state and local real property taxes paid or 
accrued. This legislation will complement efforts that have already 
been implemented on the state and federal level to help address the 
housing crisis.
  I am proud that several organizations in my home state of New Jersey 
have stepped in to provide services and assistance to New Jerseyans who 
are at risk of losing their homes. One of the shining examples of this 
is Legal Services of New Jersey. LSNJ created the Anti-Predatory 
Lending Project 5 years ago to provide legal services to borrowers 
victimized by predatory lenders. LSNJ's hardworking lawyers have helped 
almost 500 families who were facing foreclosure receive legal 
assistance. I would like to commend LSNJ for the work that they have 
done on behalf of the residents of my central New Jersey district and 
for all New Jerseyans who have been at risk of losing their homes.
  H.R. 3221 and the companion bill that the House of Representatives 
will be considering, H.R. 5818, the Neighborhood Stabilization Act are 
a bold step towards addressing the mortgage crisis and the resulting 
economic downturn, and I urge my colleagues to support them.
  Mr. KANJORSKI. Mr. Speaker, I rise in support of the amendments to 
H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act 
of 2008, which the House is considering today. This urgently needed 
legislation makes a number of surgical reforms to help address the 
problems we are currently facing in our Nation's housing markets.
  In particular, I am pleased that one of the amendments that we will 
consider today contains H.R. 5579, the Emergency Mortgage Loan 
Modification Act of 2008. I have worked with the gentleman from 
Delaware (Mr. Castle) to refine his original proposal and introduce a 
new bill. We also held a productive hearing on H.R. 5579 before the 
House Financial Services Capital Markets Subcommittee and made a number 
of revisions to the bill before bringing it to the floor today.
  During the hearings on H.R. 5579 and throughout its legislative 
development, I have been clear about the intended goals of this 
legislation: to provide servicers a safe harbor from investor lawsuits. 
Servicers, in turn, would have to meet prescribed duties and enter into 
a ``qualified loan modification'' or ``workout plan'' which the 
legislation defines. It is my firm belief that with such an arrangement 
in place, servicers will more readily assist troubled homeowners and 
will have more tools at their disposal to prevent defaults and 
foreclosures.
  Moreover, I would like to be clear about what the bill does not 
intend. H.R. 5579 does not intend to create a statutory preference for 
loss mitigation activities generally, nor does it limit the ability of 
servicers to pursue the full scope of available options. In drafting 
this legislation we sought to create a bill that honors the terms of 
existing contracts while at the same time recognizing that foreclosure 
is not in the best interests of the investor or borrower.
  In closing, Mr. Speaker, Americans have been hit hard both by the 
current housing crisis and by the broader credit crunch. We can delay 
action no longer. I therefore urge my colleagues to support H.R. 3221, 
and especially the incorporated language from H.R. 5579.
  Mrs. DRAKE. Mr. Speaker, first, I would like to thank Chairman Frank, 
Ranking Member Bachus and the Committee for their hard work. They have 
presented a thoughtful and creative proposal.
  Housing is a very complex issue--it is also a very emotional one. We 
aren't just talking about abstract concepts, we are talking about a 
person's home. We're talking about real people with a real problem.
  Prior to Congress I was a Realtor for over 20 years. I have worked 
with many families to help them realize their dream of home ownership. 
I have also served as chairman of the Virginia Housing Study 
Commission. Housing is an important issue for me and something I feel 
very strongly about.

[[Page 8266]]

  I have seen good markets and bad. I have witnessed many changes to 
the mortgage market. I have struggled with how to define and protect 
against predatory lending practices. I have seen interest rates and 
loan products that seemed too good to be true--unfortunately, we have 
seen that in fact, many were too good to be true. I rise today to share 
my observations and concerns about the bill before us.
  There are many components of this bill which I think are excellent 
and fully support. First Federal Housing Administration modernization 
is long overdue. FHA must be streamlined and made more efficient. 
Government Sponsored Enterprise regulatory reform would also help 
stabilize the housing market. I support an amendment to be offered 
today that will create a first time home buyer tax credit for low- to 
mid-income buyers. This would increase the number of buyers in the 
market--increasing demand now for an oversupply of homes. The bill also 
increases funding for foreclosure counselors and financial education. I 
also appreciate the additional funding for law enforcement to prevent 
mortgage fraud, and that Department of Veterans' Affairs loan limits 
are raised, and the enhanced appraisal standards and appraisal 
independence.
  These are all well thought out, very important reforms that will help 
American families and the marketplace.
  However, my concerns with today's package include the establishment 
of a new affordable housing fund to create new grants that can be 
directed to organizations that work specifically on housing issues. The 
bill does contain a provision that will prohibit the use of these grant 
funds for political activities, the fact is that many of the possible 
recipients engage in partisan political activities and therefore should 
not receive funding to offset their costs. It is important to remember 
that money is fungible, so that if a group cannot use these grants 
specifically for political activities, it could certainly have more 
money freed up for political activities because of the injection of new 
grants funding.
  I am also concerned about a $300 billion federal loan guarantee. 
There are two important issues with this provision that I foresee. One, 
a lender with troubled loans could contact those homeowners and offer a 
federally backed loan--and refinance at a loss but now he has moved 
that loan from a potential total loss to 85 percent current value--and 
will be guaranteed by federal government should it foreclose. He now 
has no reason to work with that borrower should the borrower still face 
foreclosure. Two, this program has a huge impact on neighborhoods. 
Consider neighbor A who bought at the height of the market. This person 
struggles month to month but manages to pay his mortgage on time. 
Neighbor 8 and their lender agree to take advantage of the new program 
and negotiates their mortgage to 85 percent current value. Not only is 
fairness between the two neighbors and issue, but the new reduction in 
value can have a huge impact on the value of surrounding properties.
  While I understand this is a voluntary program. My question is why 
can we not develop incentives for the private sector to do this and not 
obligate the American taxpayers with $300B in loan guarantees?
  Furthermore, there are several things already in the works. FHA 
secure is a new FHA product allowing homeowners to refinance their 
resetting Adjustable Rate Mortgages. So far, there are 3 times the 
refinances this year as in previous years. HOPE NOW is an alliance 
between counselors, services, investors that is working to prevent 
foreclosure through outreach to delinquent borrowers. The program 
provides counseling and loan work outs based on buyers' ability to pay. 
From July 07 through March 08 1.4m avoided foreclosures through these 
efforts. Also, Fannie Mae is currently working on a streamlined short 
sale program to allow the sale of property that is over-mortgaged.
  Both the administration and the private sector need to do a much 
better job at explaining what is currently available. Neither has done 
a good job of explaining to the public these available options. As 
such, I can understand Chairman Frank's frustration and desire to take 
action.
  Again I thank the committee for their work and I would encourage us 
to institute the reforms in this package that I highlighted. However, I 
firmly believe we should take caution and allow ongoing efforts to work 
before we decide to go down the path of obligating American taxpayers 
for $300B in loan guarantees.
  Mr. DINGELL. Mr. Speaker, this legislation represents a fair, common 
sense solution that will allow homeowners to stay in their homes, and 
help stabilize the housing market. I would like to extend my gratitude 
to Chairman Frank for his hard work on this legislation, which will be 
of critical importance in Michigan, where are there are thousands of 
homeowners in danger of foreclosure. I am especially pleased that this 
bill includes legislation which I cosponsored that would provide up to 
$300 billion in new loan guarantees to help refinance at-risk borrowers 
into viable mortgages. In addition, this legislation includes important 
provisions that expand homeownership opportunities for veterans, 
seniors, and first-time homebuyers.
  This legislation will help both homeowners and lenders, but this is 
no bailout. Lenders who participate will have to take a loss, but their 
losses under this program will be far less than if these properties go 
into foreclosure. Borrowers who realize a profit when they sell their 
home must return some of that profit to the government. The United 
States provided similar leadership during the New Deal using a program 
run by the Home Owners' Loan Corporation (HOLC). Much like the HOLC, 
this program stands to save millions of homes from foreclosure at a 
minimum cost to the taxpayers.
  I would especially like to thank Chairman Frank for his assistance in 
securing passage of a provision important to the residents of Parkview 
Apartments in Ypsilanti, Michigan. I have been working for 4 years now 
to try to facilitate the transfer of this property to Ypsilanti Housing 
Authority. Chairman Frank and the staff of the Financial Services 
Committee have been instrumental in these efforts, which are designed 
to clarify Congressional intent regarding certain properties that 
entered the Department of Housing and Urban Development (HUD) property 
disposition process prior to the enactment of the Deficit Reduction Act 
(DRA) but where the initial proposed disposition was delayed.
  While I believe that Parkview is already subject to the 
grandfathering provision of the DRA, this provision 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 provision is one of many that was included in 
legislation that passed the House last year, and is now being included 
in this bill as part of a comprehensive housing package. This 
legislation is of the utmost importance to the Congress, and it is my 
hope and expectation that it will soon be enacted into law.
  Ms. ROYBAL-ALLARD. Mr. Speaker, I rise in strong support of the 
American Housing Rescue and Foreclosure Prevention Act, and I thank 
Chairman Frank and Chairwoman Waters for bringing this important 
legislation to the House floor.
  Mr. Speaker, we are all painfully aware of the fact that communities 
across the Nation are being devastated by the current housing crisis. 
The reforms in this legislation will help many homeowners stay in their 
homes and prevent a similar situation from happening again.
  The problems caused by subprime and adjustable-rate mortgages are 
particularly acute in California, which has the second highest 
foreclosure rate in the Nation. One in every 78 families is now facing 
foreclosure in my State. This legislation makes many important reforms 
to address the current crisis, and I would like to highlight two 
provisions which I believe are particularly critical for Californians.
  First, the measure will expand the FHA program so that homeowners at 
risk of facing foreclosure can refinance into viable mortgages that are 
government-backed. Many of my constituents are facing ballooning 
payments on their mortgages which now far exceed the actual value of 
their homes. This measure will give them the opportunity to get their 
finances back on track and keep their homes.
  Second, and perhaps most helpful to addressing the crisis in my home 
State, the legislation makes permanent the FHA loan limit and GSE 
conforming loan limits temporarily increased by the Economic Stimulus 
Act. The previous GSE conforming loan limit of $417,000 and the FHA-
insurable loan limit of $362,000 simply were not high enough to be 
effective for high cost regions such as California, where the average 
cost of a home greatly exceeds the national average.
  GSE and FHA backing of mortgages are key to ensuring access to 
affordable mortgages for many home buyers and homeowners. Permanently 
increasing loan limits is perhaps the single most important thing we 
can do to ensure that Californians can benefit from congressional 
efforts to address the mortgage crisis and have access to affordable, 
fixed-rate mortgages.
  I urge my colleagues to do the right thing and vote in support of 
this legislation so that we can help our neighbors keep their homes and 
begin to revitalize our communities.
  Ms. VELAZQUEZ. Mr. Speaker, let me first commend Chairman Frank and 
Chairman Rangel for their leadership in moving the

[[Page 8267]]

American Housing Rescue and Foreclosure Prevention Act of 2008 forward. 
This is an intelligent and measured piece that addresses the 
devastating effects of the mortgage crisis. For years, Washington was 
asleep at the switch. But now, this Congress is addressing and 
preventing foreclosures.
  Nearly 650,000 foreclosure filings were issued in the first quarter 
of 2008, which represents 1 of every 194 households. Every day that 
goes by without action means more families are at risk of losing their 
homes.
  This crisis--like so many other components of the current recession--
hit low-income and minority neighborhoods the hardest. Each home lost 
to foreclosure affects entire neighborhoods. Chairwoman Waters' bill 
H.R. 5818--of which I am an original cosponsor--allows homeowners to 
fight back.
  I want to particularly highlight a provision I pushed to get added to 
this fine legislation. Many homeowners ended up in foreclosure because 
they didn't get sound mortgage advice. They need someone on their 
side--we all know the bank will be well represented. I am proud to have 
worked with Chairman Frank and several of my Financial Services 
Committee colleagues to ensure that low-income homeowners and veterans 
in high foreclosure areas have access to professional counseling. Many 
distressed homeowners need sound advice now more than at any other time 
in their lives. Our legislation provides the help they need.
  When a family loses a home to foreclosure, they lose more than four 
walls and a roof--they lose their economic stability. The housing 
package we are debating not only addresses immediate needs but is a 
solid strategy for preventing a future housing downturn.
  I urge a ``yes'' vote on the American Housing Rescue and Foreclosure 
Prevention Act.
  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 Chairman Frank and Speaker Pelosi for their quick 
action to help American families.
  The United States is facing a housing crisis. 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 
I recently visited the East Side neighborhoods in St. Paul who are hit 
hard by this crisis. Foreclosures result in reduced property values for 
neighbors and lost tax revenue for states and local governments, as 
well as contribute to criminal activity. The high rate of foreclosure 
also has a substantial spillover effect on financial markets and the 
broader economy through the loss of jobs.
  Congress has a role in protecting families and neighborhoods from an 
expansion of this crisis, which is why I support the Foreclosure 
Prevention Act (H.R. 3221). H.R. 3221 is Congress' most comprehensive 
response yet to address housing affordability and the rising numbers of 
foreclosures. This legislation will help troubled borrowers avoid 
foreclosure while minimizing taxpayer exposure. It expands the FHA 
program so that borrowers in danger of losing their home can refinance 
into lower-cost government-insured mortgages they can afford to repay. 
This voluntary program is not a bailout as mortgage investors must take 
significant losses by reducing the loan principal. This bill also 
strengthens regulation of Fannie Mae and Freddie Mac, raises the GSE 
loan limit, and increases homeownership opportunities for our veterans. 
To increase investment and confidence in the real estate market, this 
bill also includes tax provisions to aid potential homebuyers. I am 
pleased to be able to cast a vote for this legislation to help play a 
part to keep families in their homes.
  The U.S. House has also taken action to help our communities deal 
with the cost of foreclosure. The Neighborhood Stabilization Act (H.R. 
5818), of which I am a cosponsor, focuses on the communities that have 
been hit hardest by foreclosures as many foreclosed homes are currently 
vacant creating neighborhood blight and bringing down property values. 
This bill will establish a $15 billion HUD grant providing state and 
localities with the funds to purchase, rent, or rehabilitate of vacant 
foreclosed homes with the goal of occupying them as soon as possible.
  These housing measures are an important step to 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. The dream of homeownership has become a nightmare 
for too many people in our community. We need this legislation will 
help rebuild our neighborhoods and our economy.
  H.R. 3221 is an important step in addressing the crisis in the 
housing market to help families, communities and our economy. I urge my 
colleagues to support this legislation and move our housing policy in a 
new direction.
  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 1175, the previous question is ordered.
  The question of adoption of the motion is divided among the three 
House amendments.
  The first portion of the divided question is: Will the House concur 
in the amendment of the Senate with House amendment No. 1 printed in 
House Report 110-622?
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. NEUGEBAUER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule 
XX, this 15-minute vote on concurring in the Senate amendment with 
amendment No. 1 will be followed by 5-minute votes on concurring in the 
Senate amendment with amendment No. 2, concurring in the Senate 
amendment with amendment No. 3, adopting the motion to instruct offered 
by Mr. Flake, and adopting the motion to instruct offered by Mr. 
Cantor.
  The vote was taken by electronic device, and there were--yeas 266, 
nays 154, not voting 13, as follows:

                             [Roll No. 301]

                               YEAS--266

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boren
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Brown-Waite, Ginny
     Buchanan
     Butterfield
     Capito
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson
     Castle
     Castor
     Cazayoux
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Donnelly
     Doyle
     Edwards
     Ehlers
     Ellison
     Ellsworth
     Emanuel
     Engel
     English (PA)
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Foster
     Frank (MA)
     Gerlach
     Giffords
     Gilchrest
     Gillibrand
     Gonzalez
     Gordon
     Graves
     Green, Al
     Green, Gene
     Grijalva
     Hall (NY)
     Hall (TX)
     Hare
     Harman
     Hastings (FL)
     Hayes
     Heller
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson, E. B.
     Jones (NC)
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Keller
     Kennedy
     Kildee
     Kilpatrick
     Kind
     King (NY)
     Kirk
     Klein (FL)
     Knollenberg
     Kucinich
     LaHood
     Lampson
     Langevin
     Larson (CT)
     LaTourette
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McCotter
     McDermott
     McGovern
     McHugh
     McIntyre
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (NC)
     Miller, Gary
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murphy, Tim
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Perlmutter
     Peterson (MN)
     Pomeroy
     Porter
     Price (NC)
     Pryce (OH)
     Rahall
     Ramstad
     Rangel
     Reichert
     Rodriguez
     Rogers (MI)
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shays
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Solis
     Souder
     Space
     Speier
     Spratt
     Stark
     Stupak
     Sutton
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Tsongas
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Walsh (NY)
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Wilson (OH)
     Woolsey
     Wu
     Wynn
     Yarmuth
     Young (FL)

[[Page 8268]]



                               NAYS--154

     Akin
     Alexander
     Bachmann
     Bachus
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono Mack
     Boozman
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Cannon
     Cantor
     Carter
     Chabot
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Cubin
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     Doolittle
     Drake
     Dreier
     Duncan
     Emerson
     Everett
     Fallin
     Feeney
     Ferguson
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Hastings (WA)
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hulshof
     Hunter
     Inglis (SC)
     Issa
     Johnson (IL)
     Johnson, Sam
     Jordan
     King (IA)
     Kingston
     Kline (MN)
     Kuhl (NY)
     Lamborn
     Latham
     Latta
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCaul (TX)
     McCrery
     McHenry
     McKeon
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller (MI)
     Moran (KS)
     Myrick
     Neugebauer
     Nunes
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Price (GA)
     Putnam
     Radanovich
     Regula
     Rehberg
     Rogers (AL)
     Rogers (KY)
     Rohrabacher
     Roskam
     Royce
     Ryan (WI)
     Sali
     Saxton
     Scalise
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (TX)
     Stearns
     Sullivan
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Walberg
     Walden (OR)
     Wamp
     Weldon (FL)
     Weller
     Westmoreland
     Whitfield (KY)
     Wilson (NM)
     Wilson (SC)
     Wittman (VA)
     Wolf
     Young (AK)

                             NOT VOTING--13

     Aderholt
     Campbell (CA)
     Cohen
     Gutierrez
     Larsen (WA)
     Musgrave
     Renzi
     Reyes
     Reynolds
     Richardson
     Rush
     Tancredo
     Tanner


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Let me advise Members that 
there are approximately 2 minutes remaining in this vote.

                              {time}  1619

  Messrs. TURNER, WALSH of New York and HALL of Texas changed their 
vote from ``nay'' to ``yea.''
  So the first portion of the divided question was adopted.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore. The Chair will now put the question on the 
second portion of the divided question.
  The question is: Will the House concur in the amendment of the Senate 
with House amendment No. 2 printed in House Report 110-622?
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. RANGEL. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 322, 
noes 94, not voting 17, as follows:

                             [Roll No. 302]

                               AYES--322

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

                                NOES--94

     Akin
     Alexander
     Bachmann
     Bachus
     Barrett (SC)
     Bartlett (MD)
     Biggert
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Buyer
     Calvert
     Cantor
     Carter
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Cubin
     Culberson
     Davis (KY)
     Doolittle
     Everett
     Fallin
     Feeney
     Ferguson
     Flake
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gingrey
     Gohmert
     Granger
     Hastings (WA)
     Hensarling
     Herger
     Hobson
     Inglis (SC)
     Issa
     Johnson (IL)
     Jordan
     King (IA)
     Kirk
     Kline (MN)
     Kuhl (NY)
     Lamborn
     Latta
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCaul (TX)
     McCrery
     McHenry
     Mica
     Miller (FL)
     Myrick
     Neugebauer
     Paul
     Pearce
     Pence
     Pitts
     Poe
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Rogers (AL)
     Rogers (KY)
     Rohrabacher
     Royce
     Ryan (WI)
     Sali
     Saxton
     Scalise
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Smith (NE)
     Smith (TX)
     Stearns
     Sullivan
     Thornberry
     Tiberi

                             NOT VOTING--17

     Aderholt
     Campbell (CA)
     Cannon
     Cohen
     Gutierrez
     Larsen (WA)
     McMorris Rodgers
     Moore (WI)
     Musgrave
     Nunes
     Renzi
     Reynolds
     Richardson
     Rush
     Tancredo
     Tanner
     Walden (OR)


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). There are 2 minutes 
remaining in this vote.

                              {time}  1627

  Mr. SHAYS changed his vote from ``no'' to ``aye.''
  So the second portion of the divided question was adopted.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore. The Chair will now put the question on the 
third portion of the divided question.
  The question is: Will the House concur in the amendment of the Senate 
with House amendment No. 3 printed in House Report 110-622?

[[Page 8269]]

  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. PRICE of Georgia. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 256, 
noes 160, not voting 17, as follows:

                             [Roll No. 303]

                               AYES--256

     Abercrombie
     Ackerman
     Allen
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bartlett (MD)
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)
     Blumenauer
     Boren
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Brown-Waite, Ginny
     Butterfield
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson
     Castle
     Castor
     Cazayoux
     Chandler
     Clarke
     Clay
     Cleaver
     Cole (OK)
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dent
     Dicks
     Dingell
     Doggett
     Donnelly
     Doolittle
     Doyle
     Edwards
     Ehlers
     Ellison
     Ellsworth
     Emanuel
     Engel
     Eshoo
     Etheridge
     Fallin
     Farr
     Fattah
     Filner
     Fortenberry
     Foster
     Frank (MA)
     Gerlach
     Giffords
     Gilchrest
     Gillibrand
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Hayes
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson (IL)
     Johnson, E. B.
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind
     King (NY)
     Klein (FL)
     Kucinich
     Lampson
     Langevin
     Larson (CT)
     LaTourette
     Lee
     Levin
     Lewis (GA)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lucas
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McHugh
     McIntyre
     McNerney
     McNulty
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (MI)
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murphy, Tim
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Perlmutter
     Peterson (MN)
     Peterson (PA)
     Platts
     Pomeroy
     Porter
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shays
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Solis
     Space
     Speier
     Spratt
     Stark
     Stupak
     Sutton
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Tsongas
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Walsh (NY)
     Walz (MN)
     Wasserman Schultz
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Wilson (OH)
     Woolsey
     Wu
     Wynn
     Yarmuth

                               NOES--160

     Akin
     Alexander
     Altmire
     Bachmann
     Bachus
     Barrett (SC)
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono Mack
     Boozman
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Cantor
     Capito
     Carter
     Chabot
     Coble
     Conaway
     Crenshaw
     Cubin
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     Diaz-Balart, L.
     Diaz-Balart, M.
     Drake
     Dreier
     Duncan
     Emerson
     English (PA)
     Everett
     Feeney
     Ferguson
     Flake
     Forbes
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Hall (TX)
     Hastings (WA)
     Heller
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hulshof
     Hunter
     Inglis (SC)
     Issa
     Johnson, Sam
     Jones (NC)
     Jordan
     Keller
     King (IA)
     Kingston
     Kirk
     Kline (MN)
     Knollenberg
     Kuhl (NY)
     LaHood
     Lamborn
     Latham
     Latta
     Lewis (CA)
     Lewis (KY)
     Linder
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McKeon
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Myrick
     Neugebauer
     Pearce
     Pence
     Petri
     Pickering
     Pitts
     Poe
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Roskam
     Royce
     Ryan (WI)
     Sali
     Saxton
     Scalise
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Walberg
     Wamp
     Weldon (FL)
     Weller
     Westmoreland
     Whitfield (KY)
     Wilson (NM)
     Wilson (SC)
     Wittman (VA)
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--17

     Aderholt
     Campbell (CA)
     Cannon
     Clyburn
     Cohen
     Gutierrez
     Larsen (WA)
     Musgrave
     Nunes
     Renzi
     Reynolds
     Richardson
     Rush
     Tancredo
     Tanner
     Walden (OR)
     Waters


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised there 
is 1 minute remaining in this vote.

                              {time}  1633

  So the third portion of the divided question was adopted.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  The SPEAKER pro tempore. Pursuant to section 2 of House Resolution 
1175, the motion that the House concur in the Senate amendment to the 
title is adopted.

                          ____________________