[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.

                                  
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