[Congressional Record (Bound Edition), Volume 155 (2009), Part 16]
[House]
[Pages 21652-21654]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  21ST CENTURY FHA HOUSING ACT OF 2009

  Mr. ADLER of New Jersey. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 3146) to make improvements to the FHA mortgage 
insurance programs of the Department of Housing and Urban Development, 
and for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3146

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``21st Century FHA Housing Act 
     of 2009''.

     SEC. 2. MORTGAGE INSURANCE FOR CONDOMINIUMS.

       Section 203 of the National Housing Act (12 U.S.C. 1709) is 
     amended by adding at the end the following new subsection:
       ``(y) Inapplicability of Environmental Review Provisions.--
     In insuring, under this section, any mortgage described in 
     section 201(a)(C), the Secretary shall not be subject to the 
     conditions of, or review under, the National Environmental 
     Policy Act of 1969 or any other provision of law that 
     furthers the purposes of such Act.''.

     SEC. 3. ENERGY EFFICIENT MORTGAGES.

       Section 106(a)(2)(C) of the Energy Policy Act of 1992 (42 
     U.S.C. 12712 note) is amended--
       (1) in clause (i), by inserting ``(i)'' after ``(A)'' each 
     place such term appears; and
       (2) in clause (ii), by striking ``203(b)(2)(B)'' and 
     inserting ``203(b)(2)(A)(ii)''.

     SEC. 4. MODERNIZATION OF WORKFORCE AND RESOURCES.

       Section 202 of the National Housing Act (12 U.S.C. 1708) is 
     amended by adding at the end the following new subsections:
       ``(g) Personnel.--
       ``(1) In general.--Notwithstanding section 502(a) of the 
     Housing Act of 1948 (12 U.S.C. 1701c(a)), the Secretary may 
     appoint and fix the compensation of such officers and 
     employees of the Department as the Secretary considers 
     necessary to carry out the functions of the Secretary under 
     this Act and any other functions of the Federal Housing 
     Administration. Such officers and employees may be paid 
     without regard to the provisions of chapter 51 and subchapter 
     III of chapter 53 of title 5, United States Code, relating to 
     classification and General Schedule pay rates.
       ``(2) Comparability of compensation with federal financial 
     regulatory agencies.--In fixing and directing compensation 
     under paragraph (1), the Secretary shall consult with, and 
     maintain comparability with compensation of officers and 
     employees of the Federal Housing Finance Agency, the Board of 
     Governors of the Federal Reserve System, and the Federal 
     Deposit Insurance Corporation.
       ``(3) Personnel of other federal agencies.--In carrying out 
     the functions referred to in paragraph (1), the Secretary may 
     use information, services, staff, and facilities of any 
     executive agency, independent agency, or department on a 
     reimbursable basis, with the consent of such agency or 
     department.
       ``(4) Outside experts and consultants.--The Secretary may 
     procure temporary and intermittent services under section 
     3109(b) of title 5, United States Code, to assist the work of 
     the Department in carrying out the functions referred to in 
     paragraph (1).
       ``(h) Information Technology.--
       ``(1) In general.--In carrying out any program under this 
     Act or any other program of the Federal Housing 
     Administration, the Secretary may utilize any amounts as may 
     be made available for such programs to ensure that an 
     appropriate level of investment in information technology is 
     maintained in order for the Secretary to upgrade the 
     technology systems of the Department used in carrying out the 
     functions referred to in subsection (g)(1).
       ``(2) Use of premium-generated income.--To the extent that 
     income derived in any fiscal year from premium fees charged 
     under section 203(c) is in excess of the level of income 
     estimated for that such year for such premium fees and 
     assumed in the baseline projection prepared by the Director 
     of the Office of Management and Budget for inclusion in the 
     President's annual budget request and subject to approval in 
     advance in an appropriation Act, not more than $72,000,000 of 
     such excess amounts may be used from such amounts for the 
     purpose of carrying out this subsection.
       ``(i) Training and Education Program.--
       ``(1) Establishment.--The Secretary of Housing and Urban 
     Development shall carry out a comprehensive training and 
     education program to improve the service provided by 
     personnel of the Department carrying out functions referred 
     to in subsection (g)(1) to users of the mortgage insurance 
     programs under this Act and any other FHA mortgage insurance 
     programs.
       ``(2) Topics.--The training and education program under 
     this subsection shall--
       ``(A) have as its primary goal improving the quality and 
     consistency of responses provided by such personnel of the 
     Department headquarters and other offices and centers of the 
     Department regarding regulations, handbooks, mortgagee 
     letters, and other guidance; and
       ``(B) be designed to--
       ``(i) ensure that lenders participating in the FHA programs 
     may rely on information provided by one office or center of 
     the Department when doing business with a different office or 
     center; and
       ``(ii) prevent such lenders from soliciting answers to the 
     same question from different offices or centers of the 
     Department in an attempt to obtain an answer that is 
     satisfactory to the lender, by ensuring consistent responses 
     from different offices and centers.''.

     SEC. 5. RISK MANAGEMENT IMPROVEMENTS.

       (a) Review of Delinquencies and Lender Monitoring.--Section 
     202 of the National Housing Act (12 U.S.C. 1708), as amended 
     by the preceding provisions of this Act, is further amended 
     by adding at the end the following new subsection:
       ``(j) Risk Management Improvement.--
       ``(1) Review of delinquencies among recent originations.--
       ``(A) In general.--The Secretary shall conduct an ongoing 
     review of mortgages on single family housing originated 
     during the preceding 12 months and insured pursuant to this 
     Act under which the mortgagor has become 60 or more days 
     delinquent with respect to payment under the mortgage during 
     the first 90 days of the term of the mortgage to determine 
     which mortgages should not have been originated or insured 
     and the characteristics of such mortgages, and which lenders 
     have relatively high incidences of such delinquent mortgages;
       ``(B) Reporting to congress.--Not later than 90 days after 
     the date of enactment of the 21st Century FHA Housing Act of 
     2009, the Secretary shall make available to the Committee on 
     Financial Services of the House of Representatives and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate any information and conclusions pursuant to the review 
     required under subparagraph (A).
       ``(C) Sufficient resources.--There is authorized to be 
     appropriated to the Secretary for each of fiscal years 2010 
     through 2014 the amount necessary to provide 90 additional 
     full-time equivalent positions for the Department, or for 
     entering into such contracts as are necessary, to conduct 
     reviews in accordance with the requirements of this section.
       ``(2) Lender monitoring.--In conducting monitoring and 
     analysis of the performance of lenders for mortgages on 
     single family housing insured under this Act, the Secretary 
     shall utilize a one-year period for such monitoring and 
     analysis, to promote earlier identification of problem 
     lenders and allow earlier intervention and sanctions.''.
       (b) Analysis of Mortgage Performance.--Section 203(g)(2) of 
     the Helping Families Save Their Homes Act of 2009 (12 U.S.C. 
     1708 note) is amended--

[[Page 21653]]

       (1) in paragraph (1), by striking ``and'' at the end;
       (2) in paragraph (2)(B), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(3) analyze the portion of mortgages randomly reviewed 
     pursuant to subparagraph (B) on the basis of performance.''.

     SEC. 6. SENSE OF CONGRESS REGARDING ADEQUATE CAPITAL FLOW FOR 
                   MORTGAGE LOANS.

       (a) Congressional Findings.--The Congress finds that--
       (1) warehouse lending, which provides short-term lines of 
     credit to non-depository lenders for mortgage loans that are 
     eventually sold into the secondary market to Fannie Mae, 
     Freddie Mac and Ginnie Mae, is a critical link in the housing 
     finance chain;
       (2) according to data obtained pursuant to the Home 
     Mortgage Disclosure Act of 1975, nondepository lenders that 
     utilize warehouse lines of credit account for as much as 40 
     percent of all residential mortgage loans in the United 
     States, and nearly 55 percent of FHA loans, which are 
     increasingly popular;
       (3) it is estimated that since 2006 warehouse lending 
     capacity available to the mortgage lending industry has 
     declined by nearly 90 percent to the current level of 
     approximately $20 billion to $25 billion;
       (4) based upon projected 2009 lending volume, there could 
     be a shortfall of hundreds of billions of dollars in home 
     mortgage availability caused by a lack of warehouse lending 
     capacity; and
       (5) unless Federal regulators promptly address the issue, 
     borrowers seeking to take advantage of today's low interest 
     rates will face rising costs and reduced credit access, which 
     could undermine the housing market recovery.
       (b) Sense of the Congress.--It is the sense of the Congress 
     that--
       (1) the Secretary of the Treasury, the Secretary of Housing 
     and Urban Development, and the Director of the Federal 
     Housing Finance Agency should use their existing authorities 
     under the Emergency Economic Stabilization Act of 2008, the 
     Housing and Economic Recovery Act of 2008, and other 
     statutory and regulatory authorities to provide financial 
     support and assistance to facilitate increased warehouse 
     credit capacity by qualified warehouse lenders;
       (2) such financial support and assistance should--
       (A) be used only to expand the amount of credit or lending 
     capacity made available to qualified mortgage lenders by 
     qualified warehouse lenders for the purpose of funding 
     residential mortgage loans;
       (B) be provided in such form and manner as such Secretaries 
     or the Director, as applicable, consider appropriate, which 
     might include direct loans, guarantees, credit enhancement, 
     and other incentives; and
       (C) comply with other requirements established by such 
     Secretaries or the Director, as applicable.
       (c) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       (1) Qualified mortgage lender.--The term ``qualified 
     mortgage lender'' means an entity that--
       (A) is engaged in the business of making mortgage loans for 
     one- to four-family residences that are--
       (i) insured under title II of the National Housing Act (12 
     U.S.C. 1707 et seq.);
       (ii) guaranteed, insured, or made under chapter 37 of title 
     38, United States Code;
       (iii) made, guaranteed, or insured under title V of the 
     Housing Act of 1949 (42 U.S.C. 1471 et seq.); or
       (iv) eligible for purchase by the Federal National Mortgage 
     Association or the Federal Home Loan Mortgage Corporation; 
     and
       (B) is not a depository institution.
       (2) Qualified warehouse lender.--The term ``qualified 
     warehouse lender'' means an entity that extends credit to 
     qualified mortgage lenders for the purpose of originating 
     mortgage loans described in paragraph (1)(A), or that 
     otherwise facilitates the origination of such loans by a 
     qualified mortgage lender.

     SEC. 7. FORECLOSURE AVOIDANCE INITIATIVES.

       Section 230 of the National Housing Act (12 U.S.C. 1715u) 
     is amended by inserting after subsection (d) the following 
     new subsection:
       ``(e) Foreclosure Avoidance Demonstration Programs.--The 
     Secretary may carry out such demonstration programs as the 
     Secretary from time to time determines are appropriate to 
     demonstrate the effectiveness of alternative methods of 
     avoiding foreclosure on mortgages insured under this title, 
     including methods involving short sales and deeds in lieu of 
     foreclosure, and such methods may involve partial or full 
     payment of insurance benefits to the mortgagee.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
Jersey (Mr. Adler) and the gentleman from New York (Mr. Lee) each will 
control 20 minutes.
  The Chair recognizes the gentleman from New Jersey.


                             General Leave

  Mr. ADLER of New Jersey. Mr. Speaker, I ask unanimous consent that 
all Members may have 5 legislative days within which to revise and 
extend their remarks on this legislation and to insert extraneous 
material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Jersey?
  There was no objection.
  Mr. ADLER of New Jersey. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, I want to start by thanking the Republican lead on this 
bill, the gentleman from New York (Mr. Lee) for his hard work on this 
important issue. This is the sort of example of bipartisanship that I 
think the American people expect from us, and I am happy that in this 
case Mr. Lee and I could work together to try to bring some good relief 
to the American people.
  I introduced H.R. 3146, the 21 Century FHA Housing Act earlier this 
year with bipartisan support to provide the Federal Housing 
Administration with the necessary tools to serve taxpayers during these 
challenging economic times.
  FHA is currently one of the primary sources for safe, affordable 
mortgage financing for American families. During recent years, as 
private lenders have fled the market, the demand for FHA markets have 
grown exponentially. Its market share has ballooned from less than 3 
percent of the market in 2006 to 23 percent of all mortgages today. We 
need to ensure that the FHA is able to meet this need efficiently and 
honestly.
  Like most Americans, I am tired of hearing about more waste, fraud, 
and abuse in Washington or around the country. That is why the 21 
Century FHA Housing Act is so very important. The bill will take steps 
to fix these problems and protect American taxpayers. It gives the FHA 
the authority to attract personnel with the skills and experience 
necessary to manage the increase in business. In addition, the FHA must 
be given sufficient resources to maintain the ability to enforce high 
underwriting and oversight standards and operate safely and 
effectively.
  Enforcing high underwriting standards will yield safer products and 
protect the American taxpayer. We need to ensure that government 
programs are efficient and working on behalf of hardworking middle 
class families. With this increase in market share, comes an increase 
in risk. That is why this bill directs the Housing and Urban 
Development secretary to conduct an ongoing review of at-risk mortgages 
and provide a report to Congress on ways to improve at-risk management. 
This report will also make it easier to identify rogue predatory 
lenders and eliminate waste, fraud, and abuse in the FHA system.
  Mr. Speaker, the FHA is helping to provide credit to eligible 
homeowners within a marketplace where many credit lines are frozen. But 
it is imperative that these loans are good for families, our economy, 
and taxpayers. Failure to pass this bill may open the door for more of 
the mortgage fraud and abuse that helped cause the recent economic 
recession from which America is still suffering.
  I reserve the balance of my time.
  Mr. LEE of New York. Mr. Speaker, I yield myself such time as I may 
consume.
  I rise today in support of H.R. 3146, the 21 Century FHA Housing Act 
of 2009. I want to thank my colleague from New Jersey (Mr. Adler) for 
helping to drive this legislation. It will get the job done, and it is 
about time we start doing what the American people want. I think this 
is a wonderful piece of bipartisan legislation that will take important 
steps towards restoring the stability of our housing market and helping 
our overall economic recovery.
  While western New Yorkers never had a housing boom to bust, I still 
often hear from my constituents who have been responsible homeowners 
and who are increasingly frustrated by the level of fraud and abuse in 
our mortgage system. Western New Yorkers understand you cannot take 
risks without accepting the consequences. We have all seen the 
aftereffects of irresponsible lenders, and Congress has rightfully 
looked at outdated mortgage structures to ensure responsible homeowners 
have access to safe and affordable mortgages without burdening

[[Page 21654]]

them with the mistakes of others. That's why we have crafted 
legislation to address this pressing need in the current mortgage 
market.
  In order to ensure a stable housing market and help first-time home 
buyers, we need to modernize the Federal Housing Administration, which 
is now one of the primary sources of mortgage financing. It is 
imperative that the FHA has the resources it needs to effectively 
oversee mortgages and ensure that no bad actors are allowed to function 
in this marketplace.
  During recent years, as private lenders have fled the market, the 
demand for FHA mortgages grew exponentially. FHA mortgages tripled in 
2008, and in 2009 the amounts are expected to exceed $290 billion.
  In order to effectively meet the new influx of work, several 
legislative changes are needed to modernize the system. H.R. 3146 will 
address concerns about proper review and oversight of FHA lenders and 
loans by improving target reviews of loan performances.
  In addition, this legislation ensures that FHA has the staff, the 
technology, and risk management processes in place to protect American 
taxpayers from unacceptable losses.
  Finally, the measure provides the HUD Secretary with the authority to 
implement new and innovative ideas to minimize foreclosures going 
forward. We cannot keep this dream of homeownership alive and within 
reach of working families unless we have an FHA that works better.
  Again, I want to express my appreciation to my friend and colleague 
from New Jersey for his cooperation in crafting this measure. It is 
important for the American people to see that both parties are working 
together on this vital issue. I urge immediate passage of H.R. 3146.
  I reserve the balance of my time.
  Mr. ADLER of New Jersey. Does the gentleman yield back?
  Mr. LEE of New York. I have no more speakers, but I yield myself the 
balance of my time to close.
  When I looked at this piece of legislation going back several months 
ago, it was very important that we found a solution for this. I talked 
to constituents in my district, and they are so hard-pressed dealing 
with other forms of lending and getting FHA stable, it was incredibly 
important, as was the idea of making sure that we use taxpayer dollars 
wisely.
  We were fortunate enough from the hearings to understand some of the 
challenges that FHA has had in terms of technology, and the fact that 
we really haven't funded this program to its fullest extent by not 
having enough staff in support of FHA, thereby the potential for fraud 
or waste or abuse has risen, and that's why, again, taking a piece of 
legislation like this and moving it forward is incredibly important.
  As I look forward to trying to move this along, I know people in our 
district will be pleased, not only in my district but throughout the 
country, that we are pushing this type of bipartisan legislation.
  Mr. Adler has taken a very firsthand approach in trying to ensure 
that this happens.
  At this time, I yield back the balance of my time.
  Mr. ADLER of New Jersey. Mr. Speaker, I want to echo the comments of 
my friend, Mr. Lee from New York. We really did work in a bipartisan 
way to address a problem to save taxpayers from the waste, fraud, and 
abuse that I think frustrates so many Americans.
  Many of America's economic problems are due to problems experienced 
within the housing market. The 21 Century FHA Housing Act of 2009 will 
make significant enhancements to FHA and will enable the administration 
to better manage the portfolio of loans and eliminate some of that 
waste, fraud, and abuse that frustrates us so very, very much.
  As FHA steps into the void created by the predatory lenders, these 
improvements will be increasingly important. I urge all of my 
colleagues to support this important bill.
                                               September 14, 2009.
     Hon. John Adler,
     House of Representatives,
     Washington, DC.
       Dear Congressman Adler: The undersigned organizations, 
     representing the real estate industry, urge your support of 
     H.R. 3146, the ``21st Century FHA Housing Act of 2009.'' This 
     bill will modernize the Federal Housing Administration (FHA), 
     allowing it to continue to offer safe, affordable mortgages 
     to American families, at no cost to taxpayers.
       Despite FHA's growing role in the market, FHA's technology 
     and infrastructure are far behind the times. To better serve 
     American consumers and protect taxpayer interest, immediate 
     changes need to be made. Computer systems must be upgraded, 
     and sufficient staff be hired to handle all the 
     responsibilities of an agency that is meeting the needs of so 
     many American homebuyers.
       Additionally, we support efforts to strengthen warehouse 
     lending in ways that would allow the marketplace to continue 
     to meet the demand for single-family and multifamily mortgage 
     products. Consumers benefit the most when there is 
     competition in the market and full access to credit.
       H.R 3146 will allow FHA to continue its modernization, 
     utilize all of its mortgage programs, and assure that 
     homeowners have affordable safe options for homeownership. We 
     urge you to quickly pass this important legislation to update 
     FHA's programs to address the pressing needs of the current 
     mortgage market.
           Sincerely,
       Mortgage Bankers Association, National Association of 
     Homebuilders, National Association of REALTORS'.

  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New Jersey (Mr. Adler) that the House suspend the rules 
and pass the bill, H.R. 3146, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________