[Congressional Record (Bound Edition), Volume 155 (2009), Part 17]
[Senate]
[Pages 22956-22961]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. FRANKEN (for himself, Mr. Rockefeller, Mr. Whitehouse, and 
        Mr. Sanders):
  S. 1730. A bill to provide for minimum loss ratios for health 
insurance coverage; to the Committee on Health, Education, Labor, and 
Pensions.
  Mr. FRANKEN. Mr. President, I am pleased today to introduce the 
Fairness in Health Insurance Act. This bill will hold health insurance 
companies accountable by requiring that at least 90 percent of your 
premium dollars go toward health services, not profits or 
administrative waste. As we move forward in health reform, it is 
essential that health insurance companies know that their top priority 
must be serving beneficiaries, not taking care of shareholders or CEOs.
  This bill is inspired by the unique culture of health care in 
Minnesota, which includes the Mayo Clinic, cooperative models like 
HealthPartners,

[[Page 22957]]

and visionary public health leadership from State legislators. Heath 
care in our State is also distinguished by the fact that 90 percent of 
Minnesotans are served by a nonprofit health plan. These plans 
outperform their national peers and are able to put 91 cents of every 
premium dollar toward actual health care services.
  In other plans throughout the nation, though, you may find less than 
60 percent of your premium is put toward health care; the rest is for 
overhead, marketing and profits. By taking the profits out of the 
health insurance industry, Minnesota health plans do a better job 
helping our residents to live healthier, longer lives. The Fairness in 
Health Insurance Act will help us hold all health plans to the same 
standards we've set in Minnesota by requiring that 90 percent of 
premium dollars actually pay for health services.
  But while millions of Americans struggle to pay for health care, 
insurance executives continue to make obscene salaries. Last year, 
three top health insurance executives saw boosts in their total 
compensation--some of them making almost $10 million. I believe in fair 
competition but I do not support companies making obscene profits off 
of health care. The Fairness in Health Insurance Act will force 
insurance companies to prioritize health services for beneficiaries 
over bonus packages for CEOs.
  In fact, the current reality is that most of us don't know where our 
health insurance premiums go. It's challenging enough to understand a 
billing statement from your health insurance company, much less track 
where your money is being spent. The Fairness in Health Insurance Act 
also requires transparent reporting of how health insurance companies 
are spending your money. This transparency is especially important as 
we move to cover all Americans in health reform. Clear reporting will 
help us hold insurance companies accountable for every dollar we invest 
in health insurance.
  Now, although Minnesota outperforms most states in health care, I 
know we can continue to do better as well. When I talk with 
Minnesotans, I hear again and again that people are living in fear 
about health care. They are afraid of losing their health insurance, or 
worried about getting sick and going bankrupt. The reality is that 50 
percent of bankruptcies today are caused by health costs and 80 percent 
of these Americans actually have health insurance.
  Passing national health reform this year is my top priority because I 
have listened to Minnesotans across the State. They have told me, loud 
and clear, that the current health insurance system is not working for 
them. The Fairness in Health Insurance Act of 2009 is an important part 
of my health reform strategy that also includes cost containment, 
simplifying paperwork, focusing on prevention, pushing for a public 
option and making sure that all Americans have access to affordable, 
secure health insurance.
  I urge my colleagues to work with me to ensure that these commonsense 
strategies are included in our health reform bill when it comes to the 
floor. Taken together, these elements will bring our country into a new 
era in which high-quality--and affordable--health care is a reality for 
all Americans.
  Mr. President, I ask for unanimous consent that the text of the bill 
be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1730

       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 ``Fairness in Health Insurance 
     Act''.

     SEC. 2. REQUIREMENT OF MINIMUM LOSS RATIO OF 90 PERCENT FOR 
                   HEALTH INSURANCE COVERAGE.

       (a) In General.--A health insurance issuer shall not offer 
     health insurance coverage unless the issuer demonstrates that 
     such coverage has a medical loss ratio of at least 90 
     percent.
       (b) Medical Loss Ratio.--
       (1) In general.--In this section, the term ``medical loss 
     ratio'' has the meaning given such term by the Secretary of 
     Health and Human Services. The Secretary shall establish a 
     uniform definition of medical loss ratio and methodology for 
     determining how to calculate the medical loss ratio. Such 
     methodology shall take into account the circumstances of 
     different plans and activities related to health services 
     such as chronic disease management and quality assurance.
       (2) Report.--Not later than December 31, 2010, the 
     Secretary of Health and Human Services shall publish a report 
     that describes the definition developed under paragraph (1) 
     and the elements with respect to such definition.
       (c) Transparency.--
       (1) Submission of data.--Beginning in plan year 2011, a 
     health insurance issuer shall provide the Secretary of Health 
     and Human Services with data to enable the Secretary to 
     determine whether the issuer is in compliance with subsection 
     (a) with respect to health insurance coverage offered by such 
     issuer.
       (2) Development of elements and definitions.--Not later 
     than December 31, 2010, the Secretary of Health and Human 
     Services shall develop, publish in a report, and implement 
     the standardized data elements and definitions to be used by 
     health insurance issuers in the reporting of data necessary 
     for the calculation of the medical loss ratio under paragraph 
     (1).
       (d) Rebates.--Each health insurance issuer that offers 
     health insurance coverage shall provide that for any plan 
     year in which the coverage has a medical loss ratio below 90 
     percent, the issuer shall provide, in a manner specified by 
     the Secretary, for rebates to enrollees of payments 
     sufficient with respect to such loss ratio.
       (e) Enforcement.--The Secretary shall promulgate 
     regulations for enforcing the provisions of this section and 
     may provide for appropriate penalties.
       (f) Definition.--In this section, the terms ``health 
     insurance coverage'' and ``health insurance issuer'' shall 
     have the meanings given such terms in section 2791 of the 
     Public Health Service Act (42 U.S.C. 300gg-91).
                                 ______
                                 
      By Mr. REED (for himself, Mr. Durbin, Mr. Whitehouse, and Mr. 
        Merkley):
  S. 1731. A bill to require certain mortgagees to make loan 
modifications, to establish a grant program for State and local 
government mediation programs, to create databases on foreclosures, and 
for other purposes; to the Committee on Banking, Housing, and Urban 
Affairs.
  Mr. REED. Mr. President, today I introduce the Preserving Homes and 
Communities Act of 2009. I thank Senators Durbin, Whitehouse, and 
Merkley for joining me as original cosponsors of this bill. In the last 
year the Federal Government has taken decisive action and devoted 
substantial financial resources to shoring up financial markets, 
averting a potential national and global financial meltdown. However, 
the current foreclosure crisis continues to pose a threat to the 
wellbeing of individual families, local communities, and the broader 
economy. We must take similarly aggressive actions to stabilize the 
housing markets.
  Despite efforts to forestall the current crisis, the number of 
foreclosures is alarming. A reported 1.5 million properties were in the 
foreclosure process during the first 6 months of 2009, on pace to 
surpass last year's foreclosure filings by more than a third. 
Meanwhile, economist Mark Zandi suggests that the number of mortgages 
in default could rise to 4 million this year.
  The situation in my own State of Rhode Island is particularly dire. 
Moody's Economy.com reports that 22 percent of Rhode Island mortgages 
are underwater, and the State has the highest rate of foreclosure 
starts in New England. More than one in eight mortgages are at least 
one payment past due, suggesting that the situation may be getting 
worse. Indeed, as foreclosures dipped nationally in August, they 
continued to rise in Rhode Island.
  These numbers are more than statistics. They represent children 
uprooted from schools, life savings evaporated, and families faced with 
the daunting prospect of starting over. For communities, these numbers 
can translate into cycles of blight, disinvestment, and crime that 
weaken neighborhoods and damage the property values of the families 
struggling to retain their homes.
  This did not happen overnight. As we all know, during the past 
several years, housing prices in cities and States around the country 
far outpaced any increase in wages. Some families stretched themselves 
financially to become homeowners, but many others

[[Page 22958]]

were steered towards alternative or exotic mortgage loan products to 
purchase their homes. However, as home prices have declined, many 
people who took out these and other exotic loans are now finding they 
owe more than the value of their property and that they cannot sustain 
the sharp monthly payment increases their alternative mortgages 
require.
  However, as unemployment has risen, so has the number of foreclosures 
among homeowners with more traditional mortgages. According to the 
Mortgage Bankers Association, more than a third of the overall increase 
in the start of foreclosures in the second quarter was attributable to 
prime, fixed rate loans. More and more households are finding that even 
with a fixed rate mortgage that they could afford in normal times, they 
are just one pink slip away from losing their biggest investment.
  I am introducing the Preserving Homes and Communities Act to address 
this crisis. First, it establishes a new mortgage payment assistance 
program to help homeowners who, with temporary financial assistance, 
would be able to hold onto their homes. Specifically, it authorizes 
$6.375 billion in formula funding to enable states to offer grants or 
subsidized loan funds to qualified families who have suffered 
significant decreases in income. My bill outlines requirements to 
ensure that states will carefully steward Federal dollars by evaluating 
applicants' prospects for future employment, targeting middle class 
homeowners, prohibiting payments that reward predatory lenders, and 
capping maximum loan or grant amounts. Yet the criteria are flexible 
enough that states can design programs that will most effectively meet 
local needs.
  My bill also takes aim at the slow progress that servicers and 
lenders have made in implementing the administration's foreclosure 
prevention programs. A September report on the Home Affordable 
Modification Program indicated that just 12 percent of eligible 
homeowners with delinquent mortgages had been granted trial 
modifications. Too many homeowners are waiting too long--weeks, months, 
or longer--to get answers to their loan modification applications. In 
the meantime, they are still subject to costly foreclosure proceedings 
that can make it more difficult for them to eventually qualify for 
assistance.
  The Preserving Homes and Communities Act creates an incentive for 
lenders to more quickly evaluate whether homeowners qualify for 
modifications by requiring that homeowners be evaluated for a loan 
modification that conforms with the Administration's programs before a 
bank can initiate foreclosure. It also states that homeowners who 
qualify must be offered a modification. My bill prevents costly fees 
from piling up while qualified homeowners wait to be granted more 
affordable mortgages, and no longer will homeowners be left out in the 
cold if their particular loan servicer chooses not to participate in 
the government program. And if lenders fail to follow the rules, this 
bill will allow homeowners to use servicers' noncompliance as a defense 
to foreclosure. The bill also places prudent limits on the fees that 
homeowners can be charged--particularly foreclosure-related fees.
  My legislation provides $80 million as an incentive for more States 
and local governments to create strong mediation programs, an 
additional tool to help homeowners facing foreclosure. Mediation 
programs allow homeowners and servicers to meet, face to face, to try 
to find an alternative to foreclosure. These programs have shown 
promise in several state and local settings for helping homeowners 
avoid foreclosure, and this legislation will provide matching funds to 
help establish new mediation initiatives. This bill also sets aside $5 
million for the creation of a Federal database on defaults and 
foreclosures to improve oversight of public and private efforts to 
sustain homeownership.
  Finally, we know that these tough economic times are impacting 
renters as well. Competition for already-scarce affordable housing has 
increased. With the poverty rate at its highest level in 11 years, more 
individuals and families with limited incomes are at risk of 
homelessness. For this reason, the Preserving Homes and Communities Act 
uses proceeds from the warrant provisions I crafted for the financial 
rescue package to capitalize the National Housing Trust Fund. These 
warrant provisions are allowing taxpayers to benefit from the upside of 
our investments in faltering financial institutions. My view is that 
some of these returns from providing a firmer foundation for our 
financial institutions would be put to good use by providing a firmer 
foundation for affordable housing in our country. The National Housing 
Trust Fund, which I worked to establish in the Housing and Economic 
Recovery Act, will enable the building, preservation, and 
rehabilitation of affordable housing.
  I am introducing the Preserving Homes and Communities Act because 
when homes get foreclosed on, it does not just affect individual 
borrowers and lenders. Whole neighborhoods pay the price. Housing 
industry experts estimate that for every foreclosure within an eighth 
of a mile of a house, two and a half city blocks in every direction, 
the property value of surrounding homes drops by about 1 percent.
  I believe that the Federal Government has a role to play in ensuring 
that millions of Americans, including neighbors who avoided risky loans 
and have sacrificed and saved to pay their bills on time, are protected 
from further declines in property values and the blight of abandoned 
homes.
  This legislation is targeted relief that will help more families keep 
their homes and protect communities from even greater losses. The 
Preserving Homes and Communities Act will set us on the path to 
stabilizing the housing sector as a foundation of lasting economic 
recovery. I hope my colleagues will join me and Senators Durbin, 
Whitehouse, and Merkley in supporting this bill and other foreclosure 
prevention efforts.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1731

       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 ``Preserving Homes and 
     Communities Act of 2009''.

     SEC. 2. LOAN MODIFICATION REQUIREMENTS.

       (a) Definitions.--In ths section--
     (1) the term ``covered mortgagee'' means--
       (A) a mortgagee under a federally related mortgage loan; 
     and
       (B) the agent of a mortgagee under a federally related 
     mortgage loan;
       (2) the term ``covered mortgagor'' means an individual who 
     is a mortgagor under a federally related mortgage loan--
       (A) made by a covered mortgagee;
       (B) secured by the principal residence of the mortgagor; 
     and
       (C) on which the mortgagor cannot make payments due to 
     financial hardship, as determined by the Secretary;
       (3) the term ``federally related mortgage loan'' has the 
     same meaning as in section 3 of the Real Estate Settlement 
     Procedures Act of 1974 (12 U.S.C. 2602);
       (4) the term ``home loan modification protocol'' means a 
     home loan modification protocol that is developed under a 
     home loan modification program put into effect by the 
     Secretary of the Treasury or the Secretary;
       (5) the term ``qualified loan modification'' means a 
     modification to the terms of a mortgage agreement between a 
     covered mortgagee and a covered mortgagor that is made 
     pursuant to a determination by the covered mortgagee using a 
     home loan modification protocol that a modification would 
     produce a greater net present value than foreclosure to--
       (A) the covered mortgagee; or
       (B) in the aggregate, all persons that hold an interest in 
     the mortgage agreement; and
       (6) the term ``Secretary'' means the Secretary of Housing 
     and Urban Development.
       (b) Loan Modification Required.--
       (1) In general.--A covered mortgagee may not initiate or 
     continue a foreclosure proceeding against a covered mortgagor 
     that is otherwise authorized under State law unless--
       (A) the covered mortgagee has determined whether the 
     covered mortgagor is eligible for a qualified loan 
     modification;
       (B) in the case of a covered mortgagor who the covered 
     mortgagee determines is eligible for a qualified loan 
     modification, the covered mortgagee has offered a qualified 
     loan modification to the covered mortgagor; and

[[Page 22959]]

       (C) in the case of a covered mortgagor who the covered 
     mortgagee determines is not eligible for a qualified loan 
     modification, the covered mortgagee has made available to the 
     covered mortgagor the note, deed of trust, or any other 
     document necessary to establish the right of the mortgagee to 
     foreclose on the mortgage.
       (2) No waiver of rights.--A covered mortgagee may not 
     require a covered mortgagor to waive any right of the covered 
     mortgagor as a condition of making a qualified loan 
     modification.
       (3) Sale of real property securing mortgage.--
       (A) Sale.--A covered mortgagee may not sell the real 
     property securing the mortgage of a covered mortgagor unless 
     the covered mortgagee submits to the appropriate State entity 
     in the State in which the real property is located, a 
     certification that the covered mortgagee has made a 
     determination under paragraph (1)(A).
       (B) Action by purchaser.--A person that purchases from a 
     covered mortgagee the real property securing the mortgage of 
     a covered mortgagor may not recover possession of the real 
     property unless the covered mortgagee submits to the 
     appropriate State entity in the State in which the real 
     property is located, a certification that the covered 
     mortgagee has made a determination under paragraph (1)(A).
       (C) Certification standards.--The Secretary shall establish 
     minimum standards for the certification required under this 
     paragraph.
       (4) Defense to foreclosure.--Failure to comply with this 
     subsection shall be a defense to foreclosure.
       (5) Rule of construction.--Nothing in this subsection may 
     be construed to prevent a covered mortgagee from offering or 
     making a loan modification with a lower payment, lower 
     interest rate, or principal reduction beyond that required by 
     a modification made using a home loan modification protocol 
     with respect to a covered mortgagor.
       (c) Fees Prohibited.--
       (1) Loan modification fees prohibited.--A covered mortgagee 
     may not charge a fee to a covered mortgagor for carrying out 
     the requirements under subsection (b).
       (2) Foreclosure-related fees.--
       (A) In general.--Except as provided in subparagraph (B), a 
     mortgagee may not charge a foreclosure-related fee to a 
     mortgagor before--
       (i) the mortgagee has made a determination under subsection 
     (b)(1); and
       (ii) the mortgage has entered the foreclosure process.
       (B) Delinquency fees.--A mortgagee may charge a delinquency 
     fee for late payment by the mortgagor.
       (3) Fees not in contract.--A mortgagee may charge to a 
     mortgagor only such fees as have been specified in advance by 
     the mortgage agreement.
       (4) Fees for expenses incurred.--A mortgagee may charge a 
     fee to a mortgagor only for services actually performed by 
     the mortgagee or a third party in relation to the mortgage 
     agreement. For purposes of this paragraph, the term ``third 
     party'' does not include an affiliate or subsidiary of the 
     mortgagee.
       (5) Penalty.--The Secretary shall collect from any 
     mortgagee that charges a fee in violation of this subsection 
     an amount equal to $6,000 for each such fee.
       (d) Regulations.--Not later than 3 months after the date of 
     enactment of this Act, the Secretary shall issue by notice 
     any requirements to carry out this section. The Secretary 
     shall subsequently issue, after notice and comment, final 
     regulations to carry out this section.

     SEC. 3. GRANTS TO STATES TO ASSIST HOMEOWNERS IN DEFAULT.

       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:
       ``(g) Grants to States to Assist Homeowners in Default.--
       ``(1) Definitions.--In this subsection--
       ``(A) the term `eligible agency' means a State housing 
     finance agency or an agency designated by the State as an 
     eligible agency;
       ``(B) the term `eligible homeowner' means a mortgagor who--
       ``(i) is a permanent resident of the State in which the 
     principal residence of the mortgagor is located;
       ``(ii) agrees to seek counseling from a counseling agency 
     approved by the Secretary if the eligible homeowner receives 
     a loan or grant made using funds under this subsection;
       ``(iii) is suffering from financial hardship which is 
     unexpected or due to circumstances beyond the control of the 
     mortgagor;
       ``(iv) is unable to correct any delinquency on any amounts 
     past due on the home loan of such mortgagor within a 
     reasonable time without financial assistance;
       ``(v) has requested a loan modification from the mortgagee;
       ``(vi) is unable to make full payment on any home loan 
     payment due for all liens within the 30-day period following 
     the date of the application by the mortgagor for a loan or 
     grant using funds under this subsection;
       ``(vii) the eligible agency determines has a reasonable 
     probability of resuming full payments due for all liens on 
     the mortgage of such mortgagor not later than 15 months after 
     the date on which the mortgagor receives a loan or grant 
     using funds under this subsection; and
       ``(viii) has not previously received a loan or grant using 
     funds under this subsection; and
       ``(C) the term `mortgagor' means a mortgagor under a 
     mortgage--
       ``(i) secured by a 1- to 4-family owner-occupied residence 
     (including a 1-family unit in a condominium project and a 
     membership interest and occupancy agreement in a cooperative 
     housing project) that is used as the principal residence of 
     the mortgagor;
       ``(ii) with an interest rate that does not exceed the prime 
     rate of interest at the time of loan origination, as such 
     prime rate is determined by not less than 75 percent of the 
     30 largest depository institutions in the United States; and
       ``(iii) for an amount that does not exceed the conforming 
     loan limit for conventional mortgages, as determined under 
     section 302(b)(2) of the Federal National Mortgage 
     Association Charter Act (12 U.S.C. 1717(b)(2)).
       ``(2) Grant program established.--The Secretary shall award 
     grants to eligible agencies, to enable eligible agencies to 
     provide--
       ``(A) 1-time emergency grants or subsidized loans to 
     eligible homeowners to assist such eligible homeowners in 
     satisfying any amounts past due on their home loans;
       ``(B) grants or subsidized loans to eligible homeowners for 
     a specified number of future mortgage payments by the 
     eligible homeowners; and
       ``(C) stipends of not more than $1,500 to assist with 
     relocation expenses for homeowners not eligible for the 
     program.
       ``(3) Additional services provided by eligible agency.--An 
     eligible agency that receives a grant under this subsection 
     shall provide--
       ``(A) a readily accessible source for information on, and 
     referral to, public services available to assist a homeowner 
     who is in default on their home loan;
       ``(B) a homeowner with referrals to counseling agencies 
     approved by the Department of Housing and Urban Development 
     that may be able to assist that homeowner, if that homeowner 
     is in default on their home loan;
       ``(C) information to homeowners on available community 
     resources relating to homeownership, including--
       ``(i) public assistance or benefits programs;
       ``(ii) mortgage assistance programs, including programs 
     that help homeowners prepare documents for loan modification 
     applications;
       ``(iii) home repair assistance programs;
       ``(iv) legal assistance programs;
       ``(v) utility assistance programs;
       ``(vi) food assistance programs; and
       ``(vii) other Federal, State, or local government funded 
     social services; and
       ``(D) staff who--
       ``(i) are able to conduct a brief assessment of the 
     situation of a homeowner; and
       ``(ii) based on such assessment, make appropriate referrals 
     to, and provide application information regarding, programs 
     that can provide assistance to such homeowner.
       ``(4) Formula.--Not later than 3 months after the date of 
     enactment of the Preserving Homes and Communities Act of 
     2009, the Secretary shall develop a formula for the award of 
     funds under this subsection that includes the following 
     factors:
       ``(A) The population of the State, as determined by the 
     Bureau of the Census in most recent estimate of the resident 
     population of the State.
       ``(B) The rate of mortgages in the State that are 
     delinquent more than 90 days.
       ``(C) The ratio of foreclosures to owner-occupied 
     households in the State.
       ``(D) The change, if any, in the rate of unemployment in 
     the State between 2007 and 2008.
       ``(5) Program requirements.--
       ``(A) Selection criteria.--
       ``(i) In general.--Each eligible entity that receives a 
     grant under this subsection shall develop selection criteria 
     for eligible homeowners seeking a grant or subsidized loan 
     under this subsection.
       ``(ii) Income reporting.--A mortgagor that receives a grant 
     or subsidized loan under this subsection shall be required, 
     in accordance with criteria prescribed by the eligible 
     agency, to report any increase in income.
       ``(B) Loan requirements.--
       ``(i) Interest rate.--Any loan made using a grant under 
     this subsection shall carry a simple annual percentage rate 
     of interest which shall not exceed the prime rate of 
     interest, as such prime rate is determined from time to time 
     by not less than 75 percent of the 30 largest depository 
     institutions in the United States.
       ``(ii) Compound interest prohibited.--Interest on the 
     outstanding principal balance of any loan under this 
     subsection shall not compound.
       ``(iii) Balance due.--

       ``(I) In general.--The principal of any loan made under 
     this paragraph, including any interest accrued on such 
     principal, shall not be due and payable unless the real 
     property securing such loan is sold or transferred.
       ``(II) Deposit of balance due.--If an event described in 
     subclause (I) occurs, the principal of any loan made under 
     this subsection,

[[Page 22960]]

     including any interest accrued on such principal, shall 
     immediately become due and payable to the eligible agency 
     from which the loan originated.

       ``(iv) Prepayment.--Any eligible homeowner who receives a 
     loan using a grant made under this subsection may repay the 
     loan in full, without penalty, by lump sum or by installment 
     payments, at any time prior to the loan becoming due and 
     payable.
       ``(v) Maximum amount.--The amount of any loan to any 1 
     eligible homeowner under this subsection may not exceed 20 
     percent of the original mortgage amount borrowed by the 
     eligible homeowner.
       ``(vi) Subordination.--Any loan made using a grant under 
     this subsection will be subordinated to any refinancing of 
     the first mortgage, any preexisting subordinate financing, 
     any purchase money mortgage, or subordinated for any other 
     reason, as determined by the eligible agency.
       ``(6) Separate account.--
       ``(A) Separate account.--An eligible agency that receives a 
     grant under this subsection shall establish a separate 
     account in which to hold amounts received under this 
     subsection.
       ``(B) Repayment of loans.--Any amounts repaid on a 
     subsidized loan made under this subsection shall be deposited 
     in the account established under subparagraph (A).
       ``(C) Other funding.--Amounts donated or otherwise directed 
     to be used for purposes of this subsection may be deposited 
     in the account established under subparagraph (A) to help 
     capitalize such account.
       ``(7) Use of grant funds.--
       ``(A) In general.--Subject to subparagraph (B), any amounts 
     made available for purposes of this subsection may be used 
     only for the purposes described in paragraph (2).
       ``(B) Exception for administrative costs.--An eligible 
     agency may use not more than 5 percent of any funds received 
     under this subsection for administrative costs relating to 
     activities carried out under paragraph (2).
       ``(8) Existing loan funds.--Any eligible agency with a 
     previously existing fund established to make loans to assist 
     homeowners in satisfying any amounts past due on their home 
     loan or for future payments may use funds appropriated for 
     purposes of this subsection for that existing loan fund, even 
     if the eligibility, application, program, or use requirements 
     for that loan program differ from the eligibility, 
     application, program, and use requirements of this 
     subsection, unless such use is expressly determined by the 
     Secretary to be inappropriate.
       ``(9) Authorization of appropriations.--There are 
     authorized to be appropriated to carry out this section--
       ``(A) $6,375,000,000 for fiscal year 2010; and
       ``(B) such sums as may be necessary for each of fiscal 
     years 2011 through 2013.''.

     SEC. 4. MEDIATION INITIATIVES.

       (a) Definitions.--In this section--
       (1) the term ``mortgagee'' includes the agent of a 
     mortgagee; and
       (2) the term ``Secretary'' means the Secretary of Housing 
     and Urban Development.
       (b) Grant Program Established.--The Secretary shall 
     establish a grant program to make competitive grants to State 
     and local governments to establish mediation programs that 
     assist mortgagors facing foreclosure.
       (c) Mediation Programs.--A mediation program established 
     using a grant under this section shall--
       (1) require participation in the program by--
       (A) any mortgagee that initiates a foreclosure proceeding; 
     and
       (B) any mortgagor who is subject to a foreclosure 
     proceeding;
       (2) require any mortgagee or mortgagor required to 
     participate in the program to make a good faith effort to 
     resolve issues relating to foreclosure proceedings through 
     mediation;
       (3) if mediation is not made available to the mortgagor 
     before a foreclosure proceeding is initiated, allow the 
     mortgagor to request mediation at any time before a 
     foreclosure sale;
       (4) provide for--
       (A) supervision by a State court (or a State court in 
     conjunction with an agency or department of a State or local 
     government) of the mediation program;
       (B) selection and training of neutral, third-party 
     mediators by a State court (or an agency or department of the 
     State or local government);
       (C) penalties to be imposed by a State court, or an agency 
     or department of a State or local government, if a mortgagee 
     fails to comply with an order to participate in mediation; 
     and
       (D) consideration by a State court (or an agency or 
     department of a State or local government) of recommendations 
     by a mediator relating to penalties for failure to fulfill 
     the requirements of the mediation program;
       (5) require that each mortgagee that participates in the 
     mediation program make available to the mortgagor, before and 
     during participation in the mediation program, documentation 
     of--
       (A) a loan modification calculation or net present value 
     calculation made by the mortgagee in relation to the mortgage 
     using a home loan modification protocol--
       (i) developed under a home loan modification program put 
     into effect by the Secretary of the Treasury or the 
     Secretary; or
       (ii) approved by the Secretary;
       (B) the loan origination, including any note, deed of 
     trust, or other document necessary to establish the right of 
     the mortgagee to foreclose on the mortgage;
       (C) any pooling and servicing agreement that the mortgagee 
     believes prohibits a loan modification;
       (D) the payment history of the mortgagor and a detailed 
     accounting of any costs or fees associated with the account 
     of the mortgagor; and
       (E) the specific alternatives to foreclosure considered by 
     the mortgagee, including loan modifications, workout 
     agreements, and short sales;
       (6) prohibit a mortgagee from shifting the costs of 
     participation in the mediation program, including the 
     attorney's fees of the mortgagee, to a mortgagor;
       (7) provide that--
       (A) any holder of a junior lien against the property that 
     secures a mortgage that is the subject of a mediation--
       (i) be notified of the mediation; and
       (ii) be permitted to participate in the mediation; and
       (B) any proceeding initiated by a holder of a junior lien 
     against the property that secures a mortgage that is the 
     subject of a mediation be stayed pending the mediation;
       (8) provide information to mortgagors about housing 
     counselors approved by the Secretary; and
       (9) be free of charge to the mortgagor and mortgagee.
       (d) Record Keeping.--A State or local government that 
     receives a grant under this section shall keep a record of 
     the outcome of each mediation carried out under the mediation 
     program, including the nature of any loan modification made 
     as a result of participation in the mediation program.
       (e) Targeting.--A State that receives a grant under this 
     section may establish--
       (1) a State-wide mediation program; or
       (2) a mediation program in a specific locality that the 
     State determines has a high need for such program due to--
       (A) the number of foreclosures in the locality; or
       (B) other characteristics of the locality that contribute 
     to the number of foreclosures in the locality.
       (f) Federal Share.--The Federal share of the cost of a 
     mediation program established using a grant under this 
     section may not exceed 50 percent.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section--
       (1) $80,000,000 for fiscal year 2010; and
       (2) such sums as may be necessary for each of fiscal years 
     2011 through 2013.

     SEC. 5. OVERSIGHT OF PUBLIC AND PRIVATE EFFORTS TO REDUCE 
                   MORTGAGE DEFAULTS AND FORECLOSURES.

       (a) Definitions.--In this section--
       (1) the term ``heads of appropriate agencies'' means the 
     Comptroller of the Currency, the Board of Governors of the 
     Federal Reserve System, the Federal Deposit Insurance 
     Corporation, the National Credit Union Administration, the 
     Director of the Office of Thrift Supervision, and a 
     representative of State banking regulators selected by the 
     Secretary of Housing and Urban Development;
       (2) the term ``mortgagee'' means--
       (A) an original lender under a mortgage;
       (B) any servicers, affiliates, agents, subsidiaries, 
     successors, or assignees of an original lender; and
       (C) any subsequent purchaser, trustee, or transferee of any 
     mortgage or credit instrument issued by an original lender;
       (3) the term ``Secretary'' means the Secretary of Housing 
     and Urban Development; and
       (4) the term ``servicer'' means any person who collects on 
     a home loan, whether such person is the owner, the holder, 
     the assignee, the nominee for the loan, or the beneficiary of 
     a trust, or any person acting on behalf of such person.
       (b) Monitoring of Home Loans.--
       (1) In general.--The Secretary, in consultation with the 
     heads of appropriate agencies, shall develop and implement a 
     plan to monitor--
       (A) conditions and trends in homeownership and the mortgage 
     industry, in order to predict trends in foreclosures to 
     better understand other critical aspects of the mortgage 
     market; and
       (B) the effectiveness of public efforts to reduce mortgage 
     defaults and foreclosures.
       (2) Report to congress.--Not later than 1 year after the 
     development of the plan under paragraph (1), and each year 
     thereafter, the Secretary shall submit a report to Congress 
     that--
       (A) summarizes and describes the findings of the monitoring 
     required under paragraph (1); and
       (B) includes recommendations or proposals for legislative 
     or administrative action necessary--
       (i) to increase the authority of the Secretary to levy 
     penalties against any mortgagee, or other person or entity, 
     who fails to comply with the requirements described in this 
     section;

[[Page 22961]]

       (ii) to improve coordination between public and private 
     initiatives to reduce the overall rate of mortgage defaults 
     and foreclosures; and
       (iii) to improve coordination between initiatives 
     undertaken by Federal, State, and local governments.
       (c) National Database on Defaults and Foreclosures.--
       (1) In general.--The Secretary, in consultation with the 
     heads of appropriate agencies, shall develop recommendations 
     for a national database on mortgage defaults and foreclosures 
     that--
       (A) provides information to Federal regulatory agencies 
     on--
       (i) mortgagees that generate home loans that go into 
     default or foreclosure at a rate significantly higher than 
     the national average for such mortgagees;
       (ii) the factors associated with such higher rates; and
       (iii) other factors and indicators that the Secretary 
     determines are critical to monitoring the mortgage markets; 
     and
       (B) provides information to Federal, State, and local 
     governments on loans, defaults, foreclosure initiations, 
     foreclosure completions, and sheriff sales that--
       (i) is not otherwise readily available;
       (ii) would allow for a better understanding of local, 
     regional, and national trends in delinquencies, defaults, and 
     foreclosures; and
       (iii) helps improve public policies that reduce defaults 
     and foreclosures.
       (2) Considerations.--In developing the recommendations 
     under paragraph (1), the Secretary shall take into 
     consideration privacy concerns and legal issues relating to 
     such concerns, including the advisability of establishing 
     rules relating to access to information obtained under 
     subsection (d).
       (3) Report to congress on national database.--Not later 
     than 12 months after the date of enactment of this Act, the 
     Secretary shall submit a report to Congress that contains--
       (A) the recommendations developed under paragraph (1); and
       (B) an estimate of the cost of maintaining the database 
     described in paragraph (1).
       (d) Provision of Data.--
       (1) Data report required.--Not later than 18 months after 
     the date of enactment of this Act, the Secretary, in 
     consultation with the heads of appropriate agencies, shall 
     issue final rules that require each mortgagee or servicer 
     that originates or services not fewer than 100 loans in a 
     calendar year (or any other person that the Secretary 
     determines can effectively provide the data described in 
     paragraph (2)) to submit a report to the Secretary not less 
     frequently than once each quarter that contains data the 
     Secretary determines are necessary to carry out this section.
       (2) Contents of report.--Each report submitted under 
     paragraph (1) shall contain data that--
       (A) for each loan, use the identification requirements that 
     are established under the Home Mortgage Disclosure Act (12 
     U.S.C. 2801 et seq.) for data reporting, including--
       (i) the year of origination;
       (ii) the agency code of the originator;
       (iii) the respondent identification number of the 
     originator; and
       (iv) the identifying number for the loan;
       (B) describe the characteristics of each home loan 
     originated in the preceding 12 months by the mortgagee or 
     servicer (or, in the case of the first report required to be 
     submitted under this subsection, all active loans originated 
     by the mortgagee or servicer), including--
       (i) the loan-to-value ratio at the time of origination for 
     each mortgage on the property;
       (ii) the type of mortgage, such as a fixed-rate or 
     adjustable-rate mortgage; and
       (iii) any other loan or loan underwriting characteristics 
     determined by the Secretary to be necessary in order to meet 
     the requirements of paragraph (1) and that are not already 
     available to the Secretary through a national mortgage 
     database;
       (C) include the performance outcome of each home loan 
     originated in the preceding 12 months by the mortgagee or 
     servicer (or, in the case of the first report required to be 
     submitted under this subsection, all active loans originated 
     by the mortgagee or servicer), including--
       (i) whether such home loan was in delinquency at any point 
     in such 12-month period; and
       (ii) whether any foreclosure proceeding was initiated on 
     such home loan during such 12-month period;
       (D) are sufficient to establish for each home loan that at 
     any point during the preceding 12 months had become 60 or 
     more days delinquent with respect to a payment on any amount 
     due under the home loan, or for which a foreclosure 
     proceeding was initiated, the interest rate on such home loan 
     at the time of such delinquency or foreclosure;
       (E) include information relating to foreclosures, 
     including--
       (i) the date of all foreclosures initiated by the mortgagee 
     or servicer; and
       (ii) the combined loan-to-value ratio of all mortgages on a 
     home at the time foreclosure proceedings were initiated;
       (F) for a home loan that is in foreclosure, include 
     information on all actions, including loan modifications, 
     taken to resolve the problem that led to the initiation of 
     foreclosure proceedings and all actions undertaken prior to 
     initiation of a foreclosure proceeding to resolve a 
     delinquency or default;
       (G) identify each home loan for which a foreclosure 
     proceeding was completed in the preceding 12 months, 
     including--
       (i) foreclosure proceedings initiated in such 12-month 
     period; and
       (ii) the date of the foreclosure completion; and
       (H) include any other information that the Secretary 
     determines is necessary to carry out this section.
       (3) Compliance plan and report.--The Secretary, in 
     consultation with the heads of appropriate agencies, shall--
       (A) develop a plan to monitor the compliance with the 
     requirements established in this subsection by mortgagees and 
     servicers; and
       (B) submit to Congress a report on such plan.
       (e) Consolidated Database.--The Federal Financial 
     Institutions Examination Council shall create a consolidated 
     database that establishes a connection between the data 
     provided under the Home Mortgage Disclosure Act (12 U.S.C. 
     2801 et seq.) and the data provided under this subsection.
       (f) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section--
       (1) $5,000,000 for fiscal year 2010; and
       (2) such sums as may be necessary for each of fiscal years 
     2011 through 2013.

     SEC. 6. HOUSING TRUST FUND.

       From funds received by the Secretary of the Treasury from 
     the sale of warrants under title I of the Emergency Economic 
     Stabilization Act of 2008 (12 U.S.C. 5211 et seq.), the 
     Secretary of the Treasury shall transfer and credit 
     $1,000,000,000 to the Housing Trust Fund established under 
     section 1338 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4568) for use in 
     accordance with such section.

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