[House Report 110-330]
[From the U.S. Government Publishing Office]
110th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 110-330
======================================================================
PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 1852) TO MODERNIZE AND
UPDATE THE NATIONAL HOUSING ACT AND ENABLE THE FEDERAL HOUSING
ADMINISTRATION TO USE RISK-BASED PRICING TO MORE EFFECTIVELY REACH
UNDERSERVED BORROWERS, AND FOR OTHER PURPOSES
_______
September 17, 2007.--Referred to the House Calendar and ordered to be
printed
_______
Ms. Matsui, from the Committee on Rules, submitted the following
R E P O R T
[To accompany H. Res. 650]
The Committee on Rules, having had under consideration
House Resolution 650, by a nonrecord vote, report the same to
the House with the recommendation that the resolution be
adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for consideration of H.R. 1852, the
Expanding American Homeownership Act of 2007, under a
structured rule. The rule provides one hour of general debate
equally divided and controlled by the chairman and ranking
minority member of the Committee on Financial Services. The
rule waives all points of order against consideration of the
bill except clauses 9 and 10 of rule XXI. The rule provides
that the amendment in the nature of a substitute recommended by
the Committee on Financial Services now printed in the bill,
modified by the amendment printed in Part A of this report,
shall be considered as adopted. The bill as amended shall be
considered as an original bill for the purpose of amendment and
shall be considered as read. The rule waives all points of
order against provisions in the bill as amended.
The rule makes in order only those further amendments
printed in Part B of this report. The further amendments made
in order may be offered only in the order printed in this
report, may be offered only by a Member designated in this
report, shall be considered as read, shall be debatable for the
time specified in this report equally divided and controlled by
the proponent and an opponent, shall not be subject to
amendment, and shall not be subject to a demand for a division
of the question in the House or in the Committee of the Whole.
All points of order against the amendments except for clauses 9
and 10 of rule XXI are waived. The rule provides one motion to
recommit with or without instructions. The rule provides that
the Chair may postpone further consideration of the bill to a
time designated by the Speaker.
EXPLANATION OF WAIVERS
The waiver of all points of order against consideration of
the bill (except for clauses 9 and 10 of rule XXI) includes a
waiver of clause 4(a) of rule XIII, requiring a three-day
layover of the committee report. The committee is not aware of
any points of order against provisions in the bill, as amended.
The waiver of all points of order against provisions in the
bill, as amended, is prophylactic in nature.
COMMITTEE VOTES
The results of each record vote on an amendment or motion
to report, together with the names of those voting for and
against, are printed below:
Rules Committee record vote No. 300
Date: September 17, 2007.
Measure: H.R. 1852.
Motion by: Mr. Dreier.
Summary of motion: To grant an open rule.
Results: Defeated 3-7.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay;
Dreier--Yea; Hastings (WA)--Yea; Sessions--Yea.
Rules Committee record vote No. 301
Date: September 17, 2007.
Measure: H.R. 1852.
Motion by: Mr. Hastings (WA).
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Biggert (IL), #9 to strike the
funding language for the affordable housing fund and insert
language requiring HUD to conduct an annual study on the FHA
single family housing mortgage insurance programs to determine
the appropriate reserve and premium levels. If HUD determines
that premiums can be reduced, it is directed to reduce them.
The amendment maintains the current provision in the bill that
directs any excess reserves to be used to maintain the solvency
of the FHA insurance fund, encourage counseling and modernize
FHA technology.
Results: Defeated 3-7.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay;
Dreier--Yea; Hastings (WA)--Yea; Sessions--Yea.
Rules Committee record vote No. 302
Date: September 17, 2007.
Measure: H.R. 1852.
Motion by: Mr. Sessions.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Price, Tom (GA), #4 to require
that any individual or household receiving money from the
affordable housing fund must present verification of legal
residency by a secure identification document.
Results: Defeated 3-7.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Welch--Nay; Castor--Nay; Arcuri--Nay; Sutton--Nay;
Dreier--Yea; Hastings (WA)--Yea; Sessions--Yea.
SUMMARY OF AMENDMENT CONSIDERED AS ADOPTED
The amendment includes provisions to facilitate FHA
refinancing loans to respond to recent mortgage market
developments, perfecting modifications to the bill's provision
establishing a surety bond requirement for mortgage broker and
loan correspondent participation in FHA, modification of the
loan originator fee cap for FHA reverse mortgages, a provision
authorizing civil money penalties for actions which improperly
influence FHA appraisals, and modifications to ensure
compliance with PAYGO.
SUMMARY OF AMENDMENTS MADE ORDER UNDER THE RULE
1. Tierney (MA): The amendment directs the Secretary of the
Department of Housing and Urban Development to provide mortgage
insurance premium refunds to eligible borrowers of FHA insured
loans, which were closed prior to December 8, 2004, but which
were not endorsed until December 8, 2004 or after that date,
and authorizes such sums as may be necessary for such refunds.
(10 minutes)
2. Frank (MA)/Miller, Gary (CA)/Cardoza (CA): The amendment
raises the FHA single family loan limit, by establishing such
limit in each area as the lower of (a) 125% of the local median
area home price or (b) 175% of the national GSE conforming loan
limit. Retains the FHA loan floor provision in the reported
bill of 65% of the GSE conforming loan limit. Also gives HUD
authority to raise these resulting loan limit amounts by up to
$100,000 by area and/or by unit size ``if market conditions
warrant.'' (10 minutes)
3. Miller, Gary (CA): The amendment will allow qualified
down payment assistance providers to participate in the FHA
Program if certain conditions are satisfied (i.e. no obligation
for mortgagor to repay and net worth requirement). The
Secretary shall consider as cash or its equivalent any amounts
gifted by a family member, the mortgagor's employer or labor
union, or a qualified homeownership assistance entity, but only
if there is no obligation on the part of the mortgagor to repay
the gift. (10 minutes)
4. Bishop, Tim (NY): The amendment would clarify
requirements on reverse mortgages for seniors who own permanent
foundation homes on leased land. (10 minutes)
5. Hensarling (TX): The amendment strikes the allowable use
of FHA savings for an affordable housing fund. (10 minutes)
6. Tiberi (OH): The amendment requires the Secretary to
ensure the mortgagor receives counseling at the time of
application. Under current language the Secretary may, but is
not required to, provide counseling. (10 minutes)
7. Biggert (IL): Amendment in the Nature of a Substitute.
The substitute amendment would reform for the Federal Housing
Administration's (FHA) single-family mortgage insurance
activities and would allow FHA to base each borrower's mortgage
insurance premiums on the risk that the borrower poses to the
FHA Mortgage Insurance Fund, with slight variations. Under this
proposal, mortgage insurance premiums will be based on the
borrower's credit history, loan-to-value ratio, debt-to-income
ratio, and on FHA's historical experience with similar
borrowers. This amendment maintains FHA reserves within the
insurance fund to preserve the future solvency of the FHA
program. (20 minutes)
PART A--TEXT OF AMENDMENT TO BE CONSIDERED AS ADOPTED
Page 8, line 5, before the semicolon insert the following:
``that will be occupied by the mortgagor as his or her
principal residence''.
Page 8, strike lines 12 and 13, and insert the following:
``(iii)(I) is executed by a mortgagor
who has not had any present ownership
interest in a principal residence, and
whose spouse has not had any such
interest, during 12-month period ending
upon purchase of the residence with the
mortgage to which this paragraph
applies, except that this subclause
shall be considered a program to assist
first-time homebuyers for purposes of
section 956 of the Cranston-Gonzalez
National Affordable Housing Act (42
U.S.C. 12713); or
``(II)(aa) is made to pay or prepay,
and fully extinguish, the outstanding
obligations under an existing mortgage
or mortgages on the same property; and
``(bb) involves a principal
obligation not exceeding the amount
necessary to fully pay or prepay such
outstanding obligations under the
existing mortgage or mortgages, plus
any charges and fees involved in such
transaction and any charges and fees in
connection with the payment or
prepayment of such outstanding
obligations.''
Page 24, after line 18, insert the following:
SEC. 11. REFINANCING MORTGAGES.
Section 203 of the National Housing Act (12 U.S.C. 1709) is
amended by inserting after subsection (k) the following new
subsection:
``(l) Refinancing Mortgages.--
``(1) Establishment of underwriting standards.--The
Secretary shall establish underwriting standards that
provide for insurance under this title of mortgage
loans, and take actions to facilitate the availability
of mortgage loans insured under this title, for
qualified borrowers that are made for the purpose of
paying or prepaying outstanding obligations under
existing mortgages for borrowers that--
``(A) have existing mortgages with adverse
terms or rates, or
``(B) do not have access to mortgages at
reasonable rates and terms for such
refinancings due to adverse market conditions.
``(2) Insurance of mortgages 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''.
Page 38, strike lines 3 and 4, and insert the following:
``(1) equal to 1.5 percent of the maximum claim
amount of the mortgage, except that the Secretary may
adjust the limitation under this paragraph on the basis
of an analysis of (A) costs to mortgagors, and (B) the
impact on the reverse mortgage market;''.
Page 38, line 7, strike ``and''.
Page 38, line 10, strike the first period and all that
follows and insert ``; and''.
Page 38, after line 10, insert the following:
``(5) apply beginning upon the date that the maximum
dollar amount limitation on the benefits of insurance
under this section is first increased pursuant to the
amendments made by section 19(a)(2) of the Expanding
American Homeownership Act of 2007.''.
Page 39, lines 21 and 22, strike ``, or mortgage broker, or
correspondent lender,''.
Page 39, strike lines 23 and 24, and insert the following:
``(i) closes a mortgage in its name
and underwrites the mortgage, services
the mortgage, or both underwrites and
services the mortgage;''.
Page 40, strike line 7, and insert the following:
``(iv) is licensed, under the laws of
the State in which the property that is
subject to the mortgage is located, to
act as a lender in such State; and''.
Page 40, line 8, strike ``(iv)'' and insert ``(v)''.
Page 40, line 14, insert a comma after ``name''.
Page 40, line 15, strike ``or'' and insert ``and does not''.
Page 40, after line 15, insert the following:
``(ii) is licensed, under the laws of
the State in which the property that is
subject to the mortgage is located, to
act as a correspondent lender in such
State;''.
Page 40, line 16, strike ``(ii)'' and insert ``(iii)''.
Page 40, line 19, strike ``in'' and insert ``that''.
Page 40, line 20, insert ``is in'' before ``a form''.
Page 40, line 21, strike ``and''
Page 40, line 22, strike ``an amount of $75,000'' and insert
``is in an aggregate amount, to be determined by the Secretary
based on the aggregate principal amount of single-family
mortgages insured under this title that are placed in a
calendar year, which shall not be less than $50,000 or more
than $100,000''.
Page 40, lines 24 and 25, strike ``under regulations of'' and
insert ``by''.
Page 41, line 5, strike ``and''.
Page 41, after line 5, insert the following:
``(III) guarantees payment of
any liability of the
correspondent lender arising
from its participation in the
program, up to the penal sum of
the surety bond; without regard
to the number of years the bond
remains in effect, the number
of claims or claimants, and the
number of premiums paid, in no
event shall the aggregate
liability of the surety exceed
the penal sum of the bond; and
``(IV) may be cancelled by
the surety as to future
liability by giving 30 days
notice in writing to the
Secretary, except that any such
cancellation shall not alter
the liability of the surety for
actions of the correspondent
lender prior to the effective
date of the cancellation;
and''.
Page 41, line 6, strike ``(iii)'' and insert ``(iv)''.
Page 41, line 7, before the period insert ``, except that the
Secretary shall not require any minimum net worth or certified
financial statements''.
Page 41, strike lines 11 through 13, and insert the
following:
``(i) closes the mortgage in the name
of the lender, and does not underwrite
and does not service the mortgage;''.
Page 41, line 22, before the period insert ``, except that
the Secretary shall not require any minimum net worth or
certified financial statements''.
Page 57, lines 10 and 11, strike ``two-year period beginning
on the date of the enactment of this Act'' and insert ``four-
year period beginning on the date that the Secretary of Housing
and Urban Development first insures any mortgage pursuant to
the automated process established under pilot program under
section 258 of the National Housing Act (as added by the
amendment made by subsection (a) of this section)''.
Page 57, strike ``the'' in line 13 and all that follows
through ``section)'' in line 16 and insert ``such automated
process''.
Page 61, strike lines 3 through 21, and insert the following:
SEC. 28. DISCOUNT SALES OF MULTIFAMILY PROPERTIES.
There is authorized to be appropriated, for discount sales of
multifamily real properties under section 207(l) or 246 of the
National Housing Act (12 U.S.C. 1713(l), 1715z-11), section 203
of the Housing and Community Development Amendments of 1978 (12
U.S.C. 1701z-11), or section 204 of the Departments of Veterans
Affairs and Housing and Urban Development, and Independent
Agencies Appropriations Act, 1997 (12 U.S.C. 1715z-11a), and
for discount loan sales under section 207(k) of the National
Housing Act (12 U.S.C. 1713(k)), section 203 of the Housing and
Community Development Amendments of 1978 (12 U.S.C. 1701z-
11(k)), or section 204(a) of the Departments of Veterans
Affairs and Housing and Urban Development, and Independent
Agencies Appropriations Act, 1997 (12 U.S.C. 1715z-11a(a)),
$5,000,000, for fiscal year 2008.
Page 62, after line 13, insert the following new section:
SEC. 30. NONCOMPETITIVE SALES BY HUD TO STATES AND LOCALITIES.
Subtitle A of title II of the Deficit Reduction Act of 2005
(Public Law 109-171; 120 Stat. 7) is amended by adding at the
end the following new section:
``SEC. 2004. NONCOMPETITIVE SALES IN FISCAL YEAR 2011.
``Notwithstanding any other provision of law, the Secretary
may not sell any multifamily real property through any discount
sale during fiscal year 2011 under the provisions of law
referred to in section 2002(a) or any multifamily loan through
any discount loan sale during such fiscal year under the
provisions referred to in section 2002(b), unless the property
or loan is sold for an amount that is equal to or greater than
60 percent of the property market value or loan market value,
respectively.''.
Page 66, after line 25, insert the following new section:
SEC. 33. 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.''.
PART B--TEXT OF AMENDMENTS MADE IN ORDER UNDER THE RULE
1. An Amendment To Be Offered by Representative Tierney of
Massachusetts, or His Designee, Debatable for 10 minutes
Page 66, after line 25, insert the following new section:
SEC. 31. MORTGAGE INSURANCE PREMIUM REFUNDS.
(a) Authority.--The Secretary of Housing and Urban
Development shall, to the extent that amounts are made
available pursuant to subsection (c), provide refunds of
unearned premium charges paid, at the time of insurance, for
mortgage insurance under title II of the National Housing Act
(12 U.S.C. 1707 et seq.) to or on behalf of mortgagors under
mortgages described in subsection (b).
(b) Eligible Mortgages.--A mortgage described in this section
is a mortgage on a one- to four-family dwelling that--
(1) was insured under title II of the National
Housing Act (12 U.S.C. 1707 et seq.);
(2) is otherwise eligible, under the last sentence of
subparagraph (A) of section 203(c)(2) of such Act (12
U.S.C. 1709(c)(2)(A)), for a refund of all unearned
premium charges paid on the mortgage pursuant to such
subparagraph, except that the mortgage--
(A) was closed before December 8, 2004; and
(B) was endorsed on or after such date.
(c) Authorization of Appropriations.--There is authorized to
be appropriated for each fiscal year such sums as may be
necessary to provide refunds of unearned mortgage insurance
premiums pursuant to this section.
----------
2. An Amendment To Be Offered by Representative Frank of Massachusetts,
or His Designee, Debatable for 10 minutes
Strike line 19 on page 4 and all that follows through page 5,
line 22, and insert the following:
SEC. 3. MAXIMUM PRINCIPAL LOAN OBLIGATION.
Section 203(b)(2) of the National Housing Act (12 U.S.C.
1709(b)(2)(A)) is amended by striking subparagraph (A) and
inserting the following new subparagraph:
``(A) not to exceed the lesser of--
``(i) in the case of a 1-family
residence, 125 percent of the median 1-
family house price in the area, as
determined by the Secretary; and in the
case of a 2-, 3-, or 4-family
residence, the percentage of such
median price that bears the same ratio
to such median price as the dollar
amount limitation in effect for 2007
under section 305(a)(2) of the Federal
Home Loan Mortgage Corporation Act (12
U.S.C. 1454(a)(2)) for a 2-, 3-, or 4-
family residence, respectively, bears
to the dollar amount limitation in
effect for 2007 under such section for
a 1-family residence; or
``(ii) 175 percent of the dollar
amount limitation in effect for 2007
under such section 305(a)(2) for a
residence of the applicable size
(without regard to any authority to
increase such limitations with respect
to properties located in Alaska, Guam,
Hawaii, or the Virgin Islands), except
that each such maximum dollar amount
shall be adjusted effective January 1
of each year beginning with 2008, by
adding to or subtracting from each such
amount (as it may have been previously
adjusted) a percentage thereof equal to
the percentage increase or decrease,
during the most recently completed 12-
month or 4-quarter period ending before
the time of determining such annual
adjustment, in an housing price index
developed or selected by the Secretary
for purposes of adjustments under this
clause;
except that the dollar amount limitation in
effect under this subparagraph for any size
residence for any area may not be less than the
greater of (I) the dollar amount limitation in
effect under this section for the area on
October 21, 1998, or (II) 65 percent of the
dollar amount limitation in effect for 2007
under such section 305(a)(2) for a residence of
the applicable size, as such limitation is
adjusted by any subsequent percentage
adjustments determined under clause (ii) of
this subparagraph; and except that, if the
Secretary determines that market conditions
warrant such an increase, the Secretary may,
for such period as the Secretary considers
appropriate, increase the maximum dollar amount
limitation determined pursuant to the preceding
provisions of this subparagraph with respect to
any particular size or sizes of residences, or
with respect to residences located in any
particular area or areas, to an amount that
does not exceed the maximum dollar amount then
otherwise in effect pursuant to the preceding
provisions of this subparagraph for such size
residence, or for such area (if applicable), by
not more than $100,000; and''.
----------
3. An Amendment To Be Offered by Representative Gary Miller of
California, or His Designee, Debatable for 10 minutes
Page 7, strike line 10 and insert the following:
(2) in paragraph (9)--
(A) by striking the paragraph
Page 7, line 19, strike the last period and insert ``; and''.
Page 7, after line 19, insert the following:
(B) by inserting after the period at the end
the following: ``For purposes of this
paragraph, the Secretary shall consider as cash
or its equivalent any amounts gifted by a
family member (as such term is defined in
section 201), the mortgagor's employer or labor
union, or a qualified homeownership assistance
entity, but only if there is no obligation on
the part of the mortgagor to repay the gift:
For purposes of the preceding sentence, the
term `qualified homeownership assistance
entity' means any governmental agency or
charity that has a program to provide
homeownership assistance to low- and moderate-
income families or first-time home buyers, or
any private nonprofit organization that has
such a program and evidences sufficient fiscal
soundness to protect the fiscal integrity of
the Mutual Mortgage Insurance Fund by
maintaining a minimum net worth of $4,000,000
of acceptable assets.''.
----------
4. An Amendment To Be Offered by Representative Bishop of New York, or
His Designee, Debatable for 10 minutes
Page 35, after line 24, insert the following:
(2) in subsection (b)(4), by striking subparagraph
(B) and inserting the following new subparagraph:
``(B) under a lease that has a term that ends
no earlier than the minimum number of years, as
specified by the Secretary, beyond the
actuarial life expectancy of the mortgagor or
comortgagor, whichever is the later date.''.
Page 35, line 25, strike ``(2)'' and insert ``(3)''.
Page 36, line 7, strike ``(3)'' and insert ``(4)''.
Page 36, line 9, strike ``(4)'' and insert ``(5)''.
----------
5. An Amendment To Be Offered by Representative Hensarling of Texas, or
His Designee, Debatable for 10 minutes
Page 64, strike lines 6 through 13.
----------
6. An Amendment To Be Offered by Representative Tiberi of Ohio, or His
Designee, Debatable for 10 minutes
Page 17, strike lines 3 through 16 and insert the following:
``(I) At application.--At the
time of application for the
loan involved in the mortgage,
a list of counseling agencies,
approved by the Secretary, in
the area of the applicant.''.
Page 18, strike lines 20 through 22 and insert the following:
``(i) Requirement.--The Secretary
shall require that the mortgagor
shall''.
Page 19, strike lines 4 through 5 and insert the following:
``(I) prior to closing for
the loan involved in the
mortgage;''.
----------
7. An Amendment To Be Offered by Representative Biggert of Illinois, or
Her Designee, Debatable for 20 minutes
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Expanding
American Homeownership Act of 2007''.
(b) Table of Contents.--The table of contents for this Act is
as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Maximum principal loan obligation.
Sec. 4. Extension of mortgage term.
Sec. 5. Cash investment requirement.
Sec. 6. Temporary reinstatement of downpayment requirement in event
of increased defaults.
Sec. 7. Mortgage insurance premiums.
Sec. 8. Rehabilitation loans.
Sec. 9. Discretionary action.
Sec. 10. Insurance of condominiums.
Sec. 11. Mutual Mortgage Insurance Fund.
Sec. 12. Hawaiian home lands and Indian reservations.
Sec. 13. Conforming and technical amendments.
Sec. 14. Home equity conversion mortgages.
Sec. 15. Conforming loan limit in disaster areas.
Sec. 16. Participation of mortgage brokers and correspondent lenders.
Sec. 17. Sense of Congress regarding technology for financial systems.
Sec. 18. Savings provision.
Sec. 19. Implementation.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) one of the primary missions of the Federal
Housing Administration (FHA) single family mortgage
insurance program is to reach borrowers who are
underserved, or not served, by the existing
conventional mortgage marketplace;
(2) the FHA program has a long history of innovation,
which includes pioneering the 30-year self-amortizing
mortgage and a safe-to-seniors reverse mortgage
product, both of which were once thought too risky to
private lenders;
(3) the FHA single family mortgage insurance program
traditionally has been a major provider of mortgage
insurance for home purchases;
(4) the FHA mortgage insurance premium structure, as
well as FHA's product offerings, should be revised to
reflect FHA's enhanced ability to determine risk at the
loan level and to allow FHA to better respond to
changes in the mortgage market;
(5) during past recessions, including the oil-patch
downturns in the mid-1980s, FHA remained a viable
credit enhancer and was therefore instrumental in
preventing a more catastrophic collapse in housing
markets and a greater loss of homeowner equity; and
(6) as housing price appreciation slows and interest
rates rise, many homeowners and prospective homebuyers
will need the less-expensive, safer financing
alternative that FHA mortgage insurance provides.
(b) Purposes.--The purposes of this Act are--
(1) to provide flexibility to FHA to allow for the
insurance of housing loans for low- and moderate-income
homebuyers during all economic cycles in the mortgage
market;
(2) to modernize the FHA single family mortgage
insurance program by making it more reflective of
enhancements to loan-level risk assessments and changes
to the mortgage market; and
(3) to adjust the loan limits for the single family
mortgage insurance program to reflect rising house
prices and the increased costs associated with new
construction.
SEC. 3. MAXIMUM PRINCIPAL LOAN OBLIGATION.
Paragraph (2) of section 203(b) of the National Housing Act
(12 U.S.C. 1709(b)(2)) is amended--
(1) by striking subparagraphs (A) and (B) and
inserting the following new subparagraphs:
``(A) not to exceed the lesser of--
``(i) in the case of a 1-family
residence, the median 1-family house
price in the area, as determined by the
Secretary; and in the case of a 2-, 3-,
or 4-family residence, the percentage
of such median price that bears the
same ratio to such median price as the
dollar amount limitation in effect
under section 305(a)(2) of the Federal
Home Loan Mortgage Corporation Act (12
U.S.C. 1454(a)(2)) for a 2-, 3-, or 4-
family residence, respectively, bears
to the dollar amount limitation in
effect under such section for a 1-
family residence; or
``(ii) the dollar amount limitation
determined under such section 305(a)(2)
for a residence of the applicable size;
except that the dollar amount limitation in
effect for any area under this subparagraph may
not be less than the greater of (I) the dollar
amount limitation in effect under this section
for the area on October 21, 1998, or (II) 65
percent of the dollar limitation determined
under such section 305(a)(2) for a residence of
the applicable size; and
``(B) not to exceed the appraised value of
the property, plus any initial service charges,
appraisal, inspection and other fees in
connection with the mortgage as approved by the
Secretary.'';
(2) in the matter after and below subparagraph (B),
by striking the second sentence (relating to a
definition of ``average closing cost'') and all that
follows through ``title 38, United States Code''; and
(3) by striking the last undesignated paragraph
(relating to counseling with respect to the
responsibilities and financial management involved in
homeownership).
SEC. 4. EXTENSION OF MORTGAGE TERM.
Paragraph (3) of section 203(b) of the National Housing Act
(12 U.S.C. 1709(b)(3)) is amended--
(1) by striking ``thirty-five years'' and inserting
``forty years''; and
(2) by striking ``(or thirty years if such mortgage
is not approved for insurance prior to construction)''.
SEC. 5. CASH INVESTMENT REQUIREMENT.
Paragraph (9) of section 203(b) of the National Housing Act
(12 U.S.C. 1709(b)(9)) is amended by striking the paragraph
designation and all that follows through ``Provided further,
That for'' and inserting the following:
``(9) Be executed by a mortgagor who shall have paid
on account of the property, in cash or its equivalent,
an amount, if any, as the Secretary may determine based
on factors determined by the Secretary and commensurate
with the likelihood of default. For''.
SEC. 6. TEMPORARY REINSTATEMENT OF DOWNPAYMENT REQUIREMENT IN EVENT OF
INCREASED DEFAULTS.
Section 203(b) of the National Housing Act (12 U.S.C.
1709(b)) is amended by adding at the end the following new
paragraph:
``(10) Effect of increased defaults.--
``(A) Annual determination.--If, for any
calendar year described in subparagraph (B)(i),
the Secretary determines, pursuant such
subparagraph, that--
``(i) the ratio of the number of
mortgage insurance claims made during
such calendar year on mortgages insured
under this section to the total number
of mortgages having such insurance in
force during such calendar year
exceeds, by 25 percent or more, such
ratio for the 12-month period ending on
the effective date of this Act, or
``(ii) the ratio of the aggregate
remaining principal obligation under
mortgages insured under this section
for which an insurance claim is made
during such calendar year to the
average, for such calendar year, of the
aggregate outstanding principal
obligation under mortgages so insured
exceeds, by 25 percent or more, such
ratio for the 12-month period ending on
such effective date,
during the 90-day period beginning upon the
submission of the report for such calendar year
under subparagraph (B)(ii) containing such
determination, the Secretary may insure a
mortgage under this section only pursuant to
the requirement under subparagraph (C), and the
Secretary shall, not later than 60 days after
submission of the report containing such
determination, submit a report to the Congress
under subparagraph (D) regarding mortgage
insurance claims during such calendar year.
``(B) 5 years of annual determinations.--
``(i) In general.--The Secretary
shall, for each of the 5 calendar years
commencing after the date of the
enactment of this Act, compare the
ratios referred to in subparagraph (A)
and make a determination under such
subparagraph.
``(ii) Annual report on defaults.--
Not later than 90 days after the
conclusion of each of the calendar
years described in clause (i), the
Secretary shall submit a report to the
Congress containing the determination
of the Secretary under such clause with
respect to such calendar year and
setting forth the ratios referred to in
such clause for such calendar year.
``(C) Reinstatement of downpayment
requirement.--The requirement under this
subparagraph is that paragraph (9) of this
subsection shall apply as such paragraph was in
effect on the day before the effective date of
the Expanding American Homeownership Act of
2007.
``(D) Reports regarding increased default
rate.--A report under this subparagraph, as
required under subparagraph (A), shall
contain--
``(i) an analysis of mortgage
insurance claims, made during the
calendar year for which the report is
submitted, on mortgages insured under
this section;
``(ii) an analysis of the reasons for
the increase during such calendar year
in the applicable ratio or ratios under
subparagraph (A), including an analysis
of the extent to which such increase is
attributable to the amendments made by
the Expanding American Homeownership
Act of 2007;
``(iii) the effect of such increase
on the Mutual Mortgage Insurance Fund;
``(iv) recommendations regarding--
``(I) whether the Congress
should, to respond to such
increase, take legislative
action (aa) to apply paragraph
(9) of this subsection as such
paragraph was in effect on the
day before the effective date
of Expanding American
Homeownership Act of 2007, (bb)
to apply paragraph (2)(A)(ii)
by substituting `87 percent of
the dollar amount limitation'
for `the dollar amount
limitation', or (cc) both; and
``(II) whether such
provisions should be temporary
or permanent, and, if
temporary, the period during
which such provisions should
apply; and
``(v) recommendations regarding any
other administrative, regulatory,
legislative, or other actions that
should be taken to respond to such
increase.
``(E) Defaults in disaster areas not counted
for 24 months.--In determining the number of
mortgage insurance claims made and the
aggregate remaining principal obligation under
mortgages for which an insurance claim is made
for purposes of subparagraph (A) for any
calendar year, the Secretary shall not take
into consideration any claim made during such
period on a mortgage on any property that is
located in an area for which a major disaster
was declared pursuant to the Robert T. Stafford
Disaster Relief and Emergency Assistance Act if
such claim was made during the 24-month period
beginning upon such declaration.''.
SEC. 7. MORTGAGE INSURANCE PREMIUMS.
Section 203(c) of the National Housing Act (12 U.S.C.
1709(c)) is amended--
(1) in paragraph (2), in the matter preceding
subparagraph (A), by striking ``Notwithstanding'' and
inserting ``Except as provided in paragraph (3) and
notwithstanding''; and
(2) by adding at the end the following new paragraph:
``(3) Flexible Risk-Based Premiums.--
``(A) In general.--For any mortgage insured by the
Secretary under this title that is secured by a 1- to
4-family dwelling and for which the loan application is
received by the mortgagee on or after October 1, 2007,
the Secretary may establish a mortgage insurance
premium structure involving a single premium payment
collected prior to the insurance of the mortgage or
annual payments (which may be collected on a periodic
basis), or both, subject to the limitations in
subparagraphs (B) and (C). The rate of premium for such
a mortgage may vary during the mortgage term as long as
the basis for determining the variable rate is
established before the execution of the mortgage. The
Secretary may change a premium structure established
under this subparagraph but only to the extent that
such change is not applied to any mortgage already
executed.
``(B) Maximum up-front premium amounts.--For any
mortgage insured under a premium structure established
pursuant to this paragraph, the amount of any single
premium payment authorized by subparagraph (A), if
established and collected prior to the insurance of the
mortgage, may not exceed the following amount:
``(i) Except as provided in clauses (ii) and
(iii), 3.0 percent of the amount of the
original insured principal obligation of the
mortgage.
``(ii) If the mortgagor has a credit score
equivalent to a FICO score of 560 or more and
has paid on account of the property, in cash or
its equivalent, at least 3 percent of the
Secretary's estimate of the cost of acquisition
(excluding the mortgage insurance premium paid
at the time the mortgage is insured), 2.25
percent of the original insured principal
obligation of the mortgage.
``(iii) If the annual premium payment is
equal to the maximum amount allowable under
clause (i) of subparagraph (C), 1.5 percent of
the amount of the original insured principal
obligation of the mortgage.
``(C) Maximum annual premium amounts.--For any
mortgage insured under a premium structure established
pursuant to this paragraph, the amount of any annual
premium payment collected may not exceed the following
amount:
``(i) Except as provided in clauses (ii) and
(iii), 2.0 percent of the remaining insured
principal obligation of the mortgage.
``(ii) If the mortgagor is a mortgagor
described in clause (ii) of subparagraph (B),
0.55 percent of the remaining insured principal
obligation of the mortgage.
``(iii) If the single premium payment
collected at the time of insurance is equal to
maximum amount allowable under clause (i) of
subparagraph (B), 1.0 percent of the remaining
insured principal obligation of the mortgage.
``(D) Payment incentive.--Notwithstanding
subparagraph (C), for any mortgage insured under a
premium structure established pursuant to this
paragraph and for which the annual premium payment
exceeds the amount set forth in subparagraph (C)(ii),
if during the 5-year period beginning upon the time of
insurance all mortgage insurance premiums for such
mortgage have been paid on a timely basis, upon the
expiration of such period the Secretary shall reduce
the amount of the annual premium payments due
thereafter under such mortgage to an amount equal to
the amount set forth in subparagraph (C)(ii).
``(E) Establishment and alteration of premium
structure.--A premium structure shall be established or
changed under subparagraph (A) only by providing notice
to mortgagees and to the Congress, at least 30 days
before the premium structure is established or changed.
``(F) Considerations for premium structure.--When
establishing a premium structure under subparagraph (A)
or when changing such a premium structure, the
Secretary shall consider the following:
``(i) The effect of the proposed premium
structure on the Secretary's ability to meet
the operational goals of the Mutual Mortgage
Insurance Fund as provided in section 202(a).
``(ii) Underwriting variables.
``(iii) The extent to which new pricing under
the proposed premium structure has potential
for acceptance in the private market.
``(iv) The administrative capability of the
Secretary to administer the proposed premium
structure.
``(v) The effect of the proposed premium
structure on the Secretary's ability to
maintain the availability of mortgage credit
and provide stability to mortgage markets.''.
SEC. 8. REHABILITATION LOANS.
Subsection (k) of section 203 of the National Housing Act (12
U.S.C. 1709(k)) is amended--
(1) in paragraph (1), by striking ``on'' and all that
follows through ``1978''; and
(2) in paragraph (5)--
(A) by striking ``General Insurance Fund''
the first place it appears and inserting
``Mutual Mortgage Insurance Fund''; and
(B) in the second sentence, by striking the
comma and all that follows through ``General
Insurance Fund''.
SEC. 9. DISCRETIONARY ACTION.
The National Housing Act is amended--
(1) in subsection (e) of section 202 (12 U.S.C.
1708(e))--
(A) in paragraph (3)(B), by striking
``section 202(e) of the National Housing Act''
and inserting ``this subsection''; and
(B) by redesignating such subsection as
subsection (f);
(2) by striking paragraph (4) of section 203(s) (12
U.S.C. 1709(s)(4)) and inserting the following new
paragraph:
``(4) the Secretary of Agriculture;''; and
(3) by transferring subsection (s) of section 203 (as
amended by paragraph (2) of this section) to section
202, inserting such subsection after subsection (d) of
section 202, and redesignating such subsection as
subsection (e).
SEC. 10. INSURANCE OF CONDOMINIUMS.
(a) In General.--Section 234 of the National Housing Act (12
U.S.C. 1715y) is amended--
(1) in subsection (c)--
(A) in the first sentence--
(i) by striking ``and'' before
``(2)''; and
(ii) by inserting before the period
at the end the following: ``, and (3)
the project has a blanket mortgage
insured by the Secretary under
subsection (d)''; and
(B) in clause (B) of the third sentence, by
striking ``thirty-five years'' and inserting
``forty years''; and
(2) in subsection (g), by striking ``, except that''
and all that follows and inserting a period.
(b) Definition of Mortgage.--Section 201(a) of the National
Housing Act (12 U.S.C. 1707(a)) is amended--
(1) in clause (1), by striking ``or'' and inserting a
comma; and
(2) by inserting before the semicolon the following:
``, or (c) a first mortgage given to secure the unpaid
purchase price of a fee interest in, or long-term
leasehold interest in, a one-family unit in a
multifamily project, including a project in which the
dwelling units are attached, semi-detached, or
detached, and an undivided interest in the common areas
and facilities which serve the project''.
SEC. 11. MUTUAL MORTGAGE INSURANCE FUND.
(a) In General.--Subsection (a) of section 202 of the
National Housing Act (12 U.S.C. 1708(a)) is amended to read as
follows:
``(a) Mutual Mortgage Insurance Fund.--
``(1) Establishment.--Subject to the provisions of
the Federal Credit Reform Act of 1990, there is hereby
created a Mutual Mortgage Insurance Fund (in this title
referred to as the `Fund'), which shall be used by the
Secretary to carry out the provisions of this title
with respect to mortgages insured under section 203.
The Secretary may enter into commitments to guarantee,
and may guarantee, such insured mortgages.
``(2) Limit on loan guarantees.--The authority of the
Secretary to enter into commitments to guarantee such
insured mortgages shall be effective for any fiscal
year only to the extent that the aggregate original
principal loan amount under such mortgages, any part of
which is guaranteed, does not exceed the amount
specified in appropriations Acts for such fiscal year.
``(3) Fiduciary responsibility.--The Secretary has a
responsibility to ensure that the Mutual Mortgage
Insurance Fund remains financially sound.
``(4) Annual independent actuarial study.--The
Secretary shall provide for an independent actuarial
study of the Fund to be conducted annually, which shall
analyze the financial position of the Fund. The
Secretary shall submit a report annually to the
Congress describing the results of such study and
assessing the financial status of the Fund. The report
shall recommend adjustments to underwriting standards,
program participation, or premiums, if necessary, to
ensure that the Fund remains financially sound.
``(5) Quarterly reports.--During each fiscal year,
the Secretary shall submit a report to the Congress for
each quarter, which shall specify for mortgages that
are obligations of the Fund--
``(A) the cumulative volume of loan guarantee
commitments that have been made during such
fiscal year through the end of the quarter for
which the report is submitted;
``(B) the types of loans insured, categorized
by risk;
``(C) any significant changes between actual
and projected claim and prepayment activity;
``(D) projected versus actual loss rates; and
``(E) updated projections of the annual
subsidy rates to ensure that increases in risk
to the Fund are identified and mitigated by
adjustments to underwriting standards, program
participation, or premiums, and the financial
soundness of the Fund is maintained.
The first quarterly report under this paragraph shall
be submitted on the last day of the first quarter of
fiscal year 2008, or upon the expiration of the 90-day
period beginning on the date of the enactment of the
Expanding American Homeownership Act of 2007, whichever
is later.
``(6) Adjustment of premiums.--If, pursuant to the
independent actuarial study of the Fund required under
paragraph (5), the Secretary determines that the Fund
is not meeting the operational goals established under
paragraph (8) or there is a substantial probability
that the Fund will not maintain its established target
subsidy rate, the Secretary may either make
programmatic adjustments under section 203 as necessary
to reduce the risk to the Fund, or make appropriate
premium adjustments.
``(7) Operational goals.--The operational goals for
the Fund are--
``(A) to charge borrowers under loans that
are obligations of the Fund an appropriate
premium for the risk that such loans pose to
the Fund;
``(B) to minimize the default risk to the
Fund and to homeowners;
``(C) to curtail the impact of adverse
selection on the Fund; and
``(D) to meet the housing needs of the
borrowers that the single family mortgage
insurance program under this title is designed
to serve.''.
(b) Obligations of Fund.--The National Housing Act is amended
as follows:
(1) Homeownership voucher program mortgages.--In
section 203(v) (12 U.S.C. 1709(v))--
(A) by striking ``Notwithstanding section 202
of this title, the'' and inserting ``The''; and
(B) by striking ``General Insurance Fund''
the first place such term appears and all that
follows and inserting ``Mutual Mortgage
Insurance Fund.''.
(2) Home equity conversion mortgages.--Section
255(i)(2)(A) of the National Housing Act (12 U.S.C.
1715z-20(i)(2)(A)) is amended by striking ``General
Insurance Fund'' and inserting ``Mutual Mortgage
Insurance Fund''.
(c) Conforming Amendments.--The National Housing Act is
amended--
(1) in section 205 (12 U.S.C. 1711), by striking
subsections (g) and (h); and
(2) in section 519(e) (12 U.S.C. 1735c(e)), by
striking ``203(b)'' and all that follows through
``203(i)'' and inserting ``203, except as determined by
the Secretary''.
SEC. 12. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.
(a) Hawaiian Home Lands.--Section 247(c) of the National
Housing Act (12 U.S.C. 1715z-12) is amended--
(1) by striking ``General Insurance Fund established
in section 519'' and inserting ``Mutual Mortgage
Insurance Fund''; and
(2) in the second sentence, by striking ``(1) all
references'' and all that follows through ``and (2)''.
(b) Indian Reservations.--Section 248(f) of the National
Housing Act (12 U.S.C. 1715z-13) is amended--
(1) by striking ``General Insurance Fund'' the first
place it appears through ``519'' and inserting ``Mutual
Mortgage Insurance Fund''; and
(2) in the second sentence, by striking ``(1) all
references'' and all that follows through ``and (2)''.
SEC. 13. CONFORMING AND TECHNICAL AMENDMENTS.
(a) Repeals.--The following provisions of the National
Housing Act are repealed:
(1) Subsection (i) of section 203 (12 U.S.C.
1709(i)).
(2) Subsection (o) of section 203 (12 U.S.C.
1709(o)).
(3) Subsection (p) of section 203 (12 U.S.C.
1709(p)).
(4) Subsection (q) of section 203 (12 U.S.C.
1709(q)).
(5) Section 222 (12 U.S.C. 1715m).
(6) Section 237 (12 U.S.C. 1715z-2).
(7) Section 245 (12 U.S.C. 1715z-10).
(b) Definition of Area.--Section 203(u)(2)(A) of the National
Housing Act (12 U.S.C. 1709(u)(2)(A)) is amended by striking
``shall'' and all that follows and inserting ``means a
metropolitan statistical area as established by the Office of
Management and Budget;''.
(c) Definition of State.--Section 201(d) of the National
Housing Act (12 U.S.C. 1707(d)) is amended by striking ``the
Trust Territory of the Pacific Islands'' and inserting ``the
Commonwealth of the Northern Mariana Islands''.
SEC. 14. HOME EQUITY CONVERSION MORTGAGES.
(a) In General.--Section 255 of the National Housing Act (12
U.S.C. 1715z-20) is amended--
(1) in subsection (g)--
(A) by striking the first sentence; and
(B) by striking ``established under section
203(b)(2)'' and all that follows through
``located'' and inserting ``limitation
established under section 305(a)(2) of the
Federal Home Loan Mortgage Corporation Act for
a 1-family residence'';
(2) in subsection (i)(1)(C), by striking
``limitations'' and inserting ``limitation''; and
(3) by adding at the end the following new
subsection:
``(n) Authority To Insure Home Purchase Mortgage.--
``(1) In general.--Notwithstanding any other
provision in this section, the Secretary may insure,
upon application by a mortgagee, a home equity
conversion mortgage upon such terms and conditions as
the Secretary may prescribe, when the primary purpose
of the home equity conversion mortgage is to enable an
elderly mortgagor to purchase a 1- to 4-family dwelling
in which the mortgagor will occupy or occupies one of
the units.
``(2) Limitation on principal obligation.--A home
equity conversion mortgage insured pursuant to
paragraph (1) shall involve a principal obligation that
does not exceed the dollar amount limitation determined
under section 305(a)(2) of the Federal Home Loan
Mortgage Corporation Act for a residence of the
applicable size.''.
(b) Mortgages for Cooperatives.--Subsection (b) of section
255 of the National Housing Act (12 U.S.C. 1715z-20(b)) is
amended--
(1) in paragraph (4)--
(A) by inserting ``a first or subordinate
mortgage or lien'' before ``on all stock'';
(B) by inserting ``unit'' after ``dwelling'';
and
(C) by inserting ``a first mortgage or first
lien'' before ``on a leasehold''; and
(2) in paragraph (5), by inserting ``a first or
subordinate lien on'' before ``all stock''.
(c) Study Regarding Mortgage Insurance Premiums.--The
Secretary of Housing and Urban Development shall conduct a
study regarding mortgage insurance premiums charged under the
program under section 255 of the National Housing Act (12
U.S.C. 1715z-20) for insurance of home equity conversion
mortgages to analyze and determine--
(1) the effects of reducing the amounts of such
premiums from the amounts charged as of the date of the
enactment of this Act on--
(A) costs to mortgagors; and
(B) the financial soundness of the program;
and
(2) the feasibility and effectiveness of exempting,
from all the requirements under the program regarding
payment of mortgage insurance premiums (including both
up-front or annual mortgage insurance premiums under
section 203(c)(2) of such Act), any mortgage insured
under the program under which part or all of the amount
of future payments made to the homeowner are used for
costs of a long-term care insurance contract covering
the mortgagor or members of the household residing in
the mortgaged property.
Not later than the expiration of the 12-month period beginning
on the date of the enactment of this Act, the Secretary shall
submit a report to the Congress setting forth the results and
conclusions of the study.
SEC. 15. CONFORMING LOAN LIMIT IN DISASTER AREAS.
Section 203(h) of the National Housing Act (12 U.S.C. 1709)
is amended--
(1) by inserting after ``property'' the following:
``plus any initial service charges, appraisal,
inspection and other fees in connection with the
mortgage as approved by the Secretary,'';
(2) by striking the second sentence (as added by
chapter 7 of the Emergency Supplemental Appropriations
Act of 1994 (Public Law 103-211; 108 Stat. 12)); and
(3) by adding at the end the following new sentence:
``In any case in which the single family residence to
be insured under this subsection is within a
jurisdiction in which the President has declared a
major disaster to have occurred, the Secretary is
authorized, for a temporary period not to exceed 36
months from the date of such Presidential declaration,
to enter into agreements to insure a mortgage which
involves a principal obligation of up to 100 percent of
the dollar limitation determined under section
305(a)(2) of the Federal Home Loan Mortgage Corporation
Act for a single family residence, and not in excess of
100 percent of the appraised value of the property plus
any initial service charges, appraisal, inspection and
other fees in connection with the mortgage as approved
by the Secretary.''.
SEC. 16. PARTICIPATION OF MORTGAGE BROKERS AND CORRESPONDENT LENDERS.
(a) Definitions.--
(1) In general.--Section 201 of the National Housing
Act (12 U.S.C. 1707) is amended--
(A) by striking ``As used in section 203 of
this title--'' and inserting ``As used in this
title and for purposes of participation in
insurance programs under this title, except as
specifically provided otherwise, the following
definitions shall apply:'';
(B) by striking subsection (b) and inserting
the following:
``(2) The term `mortgagee' means any of the following
entities, and its successors and assigns, to the extent
such entity is approved by the Secretary:
``(A) A lender or correspondent lender, who--
``(i) makes, underwrites, and
services mortgages;
``(ii) submits to the Secretary such
financial audits performed in
accordance with the standards for
financial audits of the Government
Auditing Standards issued by the
Comptroller of the United States;
``(iii) meet the minimum net worth
requirement that the Secretary shall
establish; and
``(iv) complies with such other
requirements as the Secretary may
establish.
``(B) A correspondent lender who--
``(i) closes a mortgage in its name
but does not underwrite or service the
mortgage;
``(ii) posts a surety bond, in lieu
of any requirement to provide audited
financial statements or meet a minimum
net worth requirement, in--
``(I) a form satisfactory to
the Secretary; and
``(II) an amount of $75,000,
as such amount is adjusted
annually by the Secretary (as
determined under regulations of
the Secretary) by the change
for such year in the Consumer
Price Index for All Urban
Consumers published monthly by
the Bureau of Labor Statistics
of the Department of Labor; and
``(iii) complies with such other
requirements as the Secretary may
establish.
``(C) A mortgage broker who--
``(i) closes the mortgage in the name
of the lender and does not make,
underwrite, or service the mortgage;
``(ii) is licensed, under the laws of
the State in which the property that is
subject to the mortgage is located, to
act as a mortgage broker in such State;
``(iii) posts a surety bond in
accordance with the requirements of
subparagraph (B)(ii); and
``(iv) complies with such other
requirements as the Secretary may
establish.
``(3) The term `mortgagor' includes the original
borrower under a mortgage and the successors and
assigns of the original borrower.'';
(C) in subsection (a), by redesignating
clauses (1) and (2) as clauses (A) and (B)
respectively; and
(D) by redesignating subsections (a), (c),
(d), (e), and (f) as paragraphs (1), (4), (5),
(6), and (7), respectively, and realigning such
paragraphs two ems from the left margin.
(2) Mortgagee review.--Section 202(c)(7) of the
National Housing Act (12 U.S.C. 1708(c)(7)) is
amended--
(A) in subparagraph (A), by inserting ``, as
defined in section 201,'' after ``mortgagee'';
(B) by striking subparagraph (B); and
(C) by redesignating subparagraphs (C) and
(D) as subparagraphs (B) and (C), respectively.
(3) Multifamily rental housing insurance.--Section
207(a)(2) of the National Housing Act (12 U.S.C.
1713(a)(2)) is amended by striking ``means the original
lender under a mortgage, and its successors and
assigns, and'' and inserting ``has the meaning given
such term in section 201, except that such term also''.
(4) War housing insurance.--Section 601(b) of the
National Housing Act (12 U.S.C. 1736(b)) is amended by
striking ``includes the original lender under a
mortgage, and his successors and assigns approved by
the Secretary'' and inserting ``has the meaning given
such term in section 201''.
(5) Armed services housing mortgage insurance.--
Section 801(b) of the National Housing Act (12 U.S.C.
1748(b)) is amended by striking ``includes the original
lender under a mortgage, and his successors and assigns
approved by the Secretary'' and inserting ``has the
meaning given such term in section 201''.
(6) Group practice facilities mortgage insurance.--
Section 1106(8) of the National Housing Act (12 U.S.C.
1749aaa-5(8)) is amended by striking ``means the
original lender under a mortgage, and his or its
successors and assigns, and'' and inserting ``has the
meaning given such term in section 201, except that
such term also''.
(b) Eligibility for Insurance.--
(1) Title i.--Paragraph (1) of section 8(b) of the
National Housing Act (12 U.S.C. 1706c(b)(1)) is
amended--
(A) by striking ``, and be held by,''; and
(B) by striking ``as responsible and able to
service the mortgage properly''.
(2) Single family housing mortgage insurance.--
Paragraph (1) of section 203(b) of the National Housing
Act (12 U.S.C. 1709(b)(1)) is amended--
(A) by striking ``, and be held by,''; and
(B) by striking ``as responsible and able to
service the mortgage properly''.
(3) Section 221 mortgage insurance.--Paragraph (1) of
section 221(d) of the National Housing Act (12 U.S.C.
1715l(d)(1)) is amended--
(A) by striking `` and be held by''; and
(B) by striking ``as responsible and able to
service the mortgage properly''.
(4) Home equity conversion mortgage insurance.--
Paragraph (1) of section 255(d) of the National Housing
Act (12 U.S.C. 1715z-20(d)(1)) is amended by striking
``as responsible and able to service the mortgage
properly''.
(5) War housing mortgage insurance.--Paragraph (1) of
section 603(b) of the National Housing Act (12 U.S.C.
1738(b)(1)) is amended--
(A) by striking ``, and be held by,''; and
(B) by striking ``as responsible and able to
service the mortgage properly''.
(6) War housing mortgage insurance for large-scale
housing projects.--Paragraph (1) of section 611(b) of
the National Housing Act (12 U.S.C. 1746(b)(1)) is
amended--
(A) by striking `` and be held by''; and
(B) by striking ``as responsible and able to
service the mortgage properly''.
(7) Group practice facility mortgage insurance.--
Section 1101(b)(2) of the National Housing Act (12
U.S.C. 1749aaa(b)(2)) is amended--
(A) by striking `` and held by''; and
(B) by striking ``as responsible and able to
service the mortgage properly''.
(8) National defense housing insurance.--Paragraph
(1) of section 903(b) of the National Housing Act (12
U.S.C. 1750b(b)(1)) is amended--
(A) by striking ``, and be held by,''; and
(B) by striking ``as responsible and able to
service the mortgage properly''.
SEC. 17. SENSE OF CONGRESS REGARDING TECHNOLOGY FOR FINANCIAL SYSTEMS.
(a) Congressional Findings.--The Congress finds the
following:
(1) The Government Accountability Office has cited
the FHA single family housing mortgage insurance
program as a ``high-risk'' program, with a primary
reason being non-integrated and out-dated financial
management systems.
(2) The ``Audit of the Federal Housing
Administration's Financial Statements for Fiscal Years
2004 and 2003'', conducted by the Inspector General of
the Department of Housing and Urban Development
reported as a material weakness that ``HUD/FHA's
automated data processing [ADP] system environment must
be enhanced to more effectively support FHA's business
and budget processes''.
(3) Existing technology systems for the FHA program
have not been updated to meet the latest standards of
the Mortgage Industry Standards Maintenance
Organization and have numerous deficiencies that
lenders have outlined.
(4) Improvements to technology used in the FHA
program will--
(A) allow the FHA program to improve the
management of the FHA portfolio, garner greater
efficiencies in its operations, and lower costs
across the program;
(B) result in efficiencies and lower costs
for lenders participating in the program,
allowing them to better use the FHA products in
extending homeownership opportunities to higher
credit risk or lower-income families, in a
sound manner.
(5) The Mutual Mortgage Insurance Fund operates
without cost to the taxpayers and generates revenues
for the Federal Government.
(b) Sense of Congress.--It is the sense of the Congress
that--
(1) the Secretary of Housing and Urban Development
should use a portion of the funds received from
premiums paid for FHA single family housing mortgage
insurance that are in excess of the amounts paid out in
claims to substantially increase the funding for
technology used in such FHA program;
(2) the goal of this investment should be to bring
the technology used in such FHA program to the level
and sophistication of the technology used in the
conventional mortgage lending market, or to exceed such
level; and
(3) the Secretary of Housing and Urban Development
should report to the Congress not later than 180 days
after the date of the enactment of this Act regarding
the progress the Department is making toward such goal
and if progress is not sufficient, the resources needed
to make greater progress.
SEC. 18. SAVINGS PROVISION.
Any mortgage insured under title II of the National Housing
Act before the date of enactment of this Act shall continue to
be governed by the laws, regulations, orders, and terms and
conditions to which it was subject on the day before the date
of the enactment of this Act.
SEC. 19. IMPLEMENTATION.
The Secretary of Housing and Urban Development shall by
notice establish any additional requirements that may be
necessary to immediately carry out the provisions of this Act.
The notice shall take effect upon issuance.