[House Report 110-619]
[From the U.S. Government Publishing Office]



110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     110-619

======================================================================
 
   FHA HOUSING STABILIZATION AND HOMEOWNERSHIP RETENTION ACT OF 2008

                                _______
                                

  May 5, 2008.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Frank of Massachusetts, from the Committee on Financial Services, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 5830]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Financial Services, to whom was referred the 
bill (H.R. 5830) to create a voluntary FHA program that 
provides mortgage refinancing assistance to allow families to 
stay in their homes, protect neighborhoods, and help stabilize 
the housing market, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................    19
Background and Need for Legislation..............................    20
Hearings.........................................................    21
Committee Consideration..........................................    23
Committee Votes..................................................    23
Committee Oversight Findings.....................................    38
Performance Goals and Objectives.................................    38
New Budget Authority, Entitlement Authority, and Tax Expenditures    38
Committee Cost Estimate..........................................    38
Congressional Budget Office Estimate.............................    38
Federal Mandates Statement.......................................    46
Advisory Committee Statement.....................................    46
Constitutional Authority Statement...............................    46
Applicability to Legislative Branch..............................    46
Earmark Identification...........................................    47
Section-by-Section Analysis of the Legislation...................    47
Changes in Existing Law Made by the Bill, as Reported............    58
Dissenting Views.................................................    83

                               Amendment

  The amendment is as follows:
  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 ``FHA Housing 
Stabilization and Homeownership Retention Act of 2008''.
  (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.

                    TITLE I--HOMEOWNERSHIP RETENTION

Sec. 101. Purposes.
Sec. 102. Insurance of homeownership retention mortgages.
Sec. 103. Study of Auction or Bulk Refinance Program.
Sec. 104. Temporary increase in maximum loan guaranty amount for 
certain housing loans guaranteed by Secretary of Veterans Affairs.
Sec. 105. Study of possible accounting revisions relating to property 
at risk of foreclosure and the availability of credit for refinancing 
home mortgages at risk of foreclosure.
Sec. 106. GAO study of the effect of tightening credit markets in 
communities affected by the subprime mortgage foreclosure crises and 
predatory lending on prospective first-time homebuyers seeking 
mortgages.

                 TITLE II--OFFICE OF HOUSING COUNSELING

Sec. 201. Short title.
Sec. 202. Establishment of Office of Housing Counseling.
Sec. 203. Counseling procedures.
Sec. 204. Grants for housing counseling assistance.
Sec. 205. Requirements to use HUD-certified counselors under HUD 
programs.
Sec. 206. Study of defaults and foreclosures.
Sec. 207. Definitions for counseling-related programs.
Sec. 208. Updating and simplification of mortgage information booklet.

                  TITLE III--COMBATING MORTGAGE FRAUD

Sec. 301. Authorization of appropriations to combat mortgage fraud.

                    TITLE I--HOMEOWNERSHIP RETENTION

SEC. 101. PURPOSES.

  The purposes of this title are--
          (1) to create an FHA program, which is voluntary on the part 
        of borrowers and existing mortgage loan holders, to insure 
        refinance loans for substantial numbers of borrowers at risk of 
        foreclosure, at levels which are reasonably likely to be 
        sustainable through enhanced affordability of debt service;
          (2) to provide flexible underwriting for FHA-insured loans 
        under such a program to provide refinancing opportunities under 
        fiscally responsible terms, including higher fees commensurate 
        with higher risk levels, a seasoning requirement for higher 
        debt to income loans, and additional program controls to limit 
        and control risk;
          (3) to bar speculators and second home owners from 
        participation in such program;
          (4) to require existing mortgage loan holders to take 
        substantial loan writedowns in exchange for having the Federal 
        Government and the borrower assume the ongoing risk of the 
        refinanced loan;
          (5) to set a loan-to-value limit on such loans that provides 
        the FHA with an equity buffer against potential loan losses, 
        provides protections against the risk of future home price 
        declines, and creates incentives for borrowers to maintain 
        payments on the loan;
          (6) to protect the FHA against losses which may exceed normal 
        FHA loss levels by establishing higher fee levels, including an 
        exit fee and profit sharing during the first five years of the 
        loan, with such higher fee levels effectively being funded 
        through the required lender writedown;
          (7) to provide a fair level of incentives for junior lien 
        holders to provide the necessary releases of their lien 
        interests, in order to meet program requirements that all 
        outstanding liens must be extinguished, and thereby permit the 
        refinancing to be completed;
          (8) to enhance the administrative capacity of the FHA to 
        carry out its expanded role under the program through 
        establishment of an Oversight Board which adds expertise from 
        the Federal Reserve and the Department of the Treasury, through 
        additional funding to contract out for the provision of any 
        needed expertise in designing program requirements and 
        oversight, and through additional funding to increase FHA 
        personnel resources as needed to handle the increased loan 
        volume resulting from the program;
          (9) to sunset the program when it is no longer needed; and
          (10) to study the need for and efficacy of an auction or bulk 
        refinancing mechanism to facilitate more expeditious 
        refinancing of larger volumes of existing mortgages that are at 
        risk for foreclosure into FHA-insured mortgages.

SEC. 102. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

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

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

  ``(a) Oversight Board.--
          ``(1) Establishment.--There is hereby established the 
        Refinance Program Oversight Board (in this section referred to 
        as the `Oversight Board').
          ``(2) Membership.--The Oversight Board shall consist of the 
        following members or their designees:
                  ``(A) The Secretary of the Treasury.
                  ``(B) The Secretary of Housing and Urban Development.
                  ``(C) The Chairman of the Board of Governors of the 
                Federal Reserve System.
          ``(3) No additional compensation.--Members of the Oversight 
        Board shall receive no additional pay by reason of service on 
        the Oversight Board.
          ``(4) Responsibilities.--The Oversight Board shall be 
        responsible for establishing program and oversight requirements 
        for the program under this section, which shall include--
                  ``(A) detailed program requirements under subsection 
                (c);
                  ``(B) flexible underwriting criteria under subsection 
                (d);
                  ``(C) a mortgage premium structure under subsection 
                (e);
                  ``(D) a reasonable fee and rate limitation under 
                subsection (f);
                  ``(E) enhancement of FHA capacity under subsection 
                (i), including oversight of such activities and 
                personnel as may be contracted for as provided therein;
                  ``(F) monitoring of underwriting risk under 
                subsection (j); and
                  ``(G) such additional requirements as may be 
                necessary and appropriate to oversee and implement the 
                program.
          ``(5) Use of resources.--In carrying out its functions under 
        this section, the Oversight Board may utilize, with their 
        consent and to the extent practical, the personnel, services, 
        and facilities of the Department of the Treasury, the 
        Department of Housing and Urban Development, the Board of 
        Governors of the Federal Reserve System, the Federal Reserve 
        Banks, and other Federal agencies, with or without 
        reimbursement therefore.
  ``(b) Authority.--
          ``(1) In general.--The Secretary shall, subject only to the 
        absence of qualified requests for insurance under this section 
        and to the limitations under subsection (h) of this section and 
        section 531(a), make commitments to insure and insure any 
        mortgage covering a 1- to 4-family residence that is made for 
        the purpose of paying or prepaying outstanding obligations 
        under an existing mortgage or mortgages on the residence if the 
        mortgage being insured under this section meets the 
        requirements of this section, as established by the Oversight 
        Board, and of section 203, except as modified by this section.
          ``(2) Establishment and implementation of program 
        requirements.--The Oversight Board shall establish program 
        requirements and standards under this section and the Secretary 
        shall implement such requirements and standards. The Oversight 
        Board and the Secretary may establish and implement any 
        requirements or standards through interim guidance and 
        mortgagee letters.
  ``(c) Requirements.--To be eligible for insurance under this section, 
a mortgage shall comply with all of the following requirements:
          ``(1) Owner-occupied principal residence requirement.--The 
        residence to be covered by the mortgage insured under this 
        section shall be occupied by the mortgagor as the principal 
        residence of the mortgagor and the mortgagor shall provide a 
        certification to the originator of the mortgage that such 
        residence to be covered by the mortgage insured under this 
        section is the only residence in which the mortgagor has any 
        present ownership interest.
          ``(2) Lack of capacity to pay existing mortgage or 
        mortgages.--
                  ``(A) Borrower certification.--
                          ``(i) The mortgagor shall provide a 
                        certification to the originator of the mortgage 
                        that the mortgagor--
                                  ``(I) has not intentionally defaulted 
                                on the existing mortgage or mortgages; 
                                and
                                  ``(II) has not knowingly, or 
                                willfully and with actual knowledge 
                                furnished material information known to 
                                be false for the purpose of obtaining 
                                the existing mortgage or mortgages.
                          ``(ii) The mortgagor shall agree in writing 
                        that the mortgagor shall be liable to repay the 
                        FHA any direct financial benefit achieved from 
                        the reduction of indebtedness on the existing 
                        mortgage or mortgages on the residence 
                        refinanced under this section derived from 
                        misrepresentations made in the certifications 
                        and documentation required under this 
                        subparagraph, subject to the discretion of the 
                        Oversight Board.
                  ``(B) Current borrower debt-to-income ratio.--As of 
                March 1, 2008, the mortgagor shall have had a ratio of 
                mortgage debt to income, taking into consideration all 
                existing mortgages at such time, greater than 35 
                percent.
                  ``(C) Loss mitigation responsibilities.--This section 
                may not be construed to alter or in any way affect the 
                responsibilities of any party (including the mortgage 
                servicer) to engage in any or all loan modification or 
                other loss mitigation strategies to maximize value to 
                investors as established by any applicable contract.
          ``(3) Eligibility of mortgages by date of origination.--The 
        existing senior mortgage shall have been originated on or 
        before December 31, 2007.
          ``(4) Maximum loan-to-value ratio for new loans.--The 
        mortgage being insured under this section shall involve a 
        principal obligation (including such initial service charges, 
        appraisal, inspection, and other fees as the Secretary shall 
        approve and including the mortgage insurance premium paid 
        pursuant to subsection (e)(1)) in an amount not to exceed 90 
        percent of the current appraised value of the property. Section 
        203(d) shall not apply to mortgages insured under this section.
          ``(5) Required waiver of prepayment penalties and fees.--All 
        penalties for prepayment of the existing mortgage or mortgages, 
        and all fees and penalties related to default or delinquency on 
        all existing mortgages or mortgages, shall be waived or 
        forgiven.
          ``(6) Required loan reduction.--
                  ``(A) Reduction of indebtedness under existing senior 
                mortgage.--The amount of indebtedness on the existing 
                mortgage or mortgages on the residence shall have been 
                substantially reduced by such percentage as the 
                Oversight Board or Secretary may require, and such 
                reduction shall be at least sufficient to--
                          ``(i) provide for the refinancing of such 
                        existing mortgage or mortgages in an amount not 
                        greater than 90 percent of the current 
                        appraised value of the property involved;
                          ``(ii) pay the full amount of the single 
                        premium to be collected pursuant to subsection 
                        (e)(1) (which shall be an amount equal to 3.0 
                        percent of the amount of the original insured 
                        principal obligation of the mortgage insured 
                        under this section and which shall serve as an 
                        additional reserve to cover possible loan 
                        losses); and
                          ``(iii) pay the full amount of the loan 
                        origination fee and any other closing costs, 
                        not to exceed 2.0 percent of the amount of the 
                        original insured principal obligation of the 
                        mortgage insured under this section.
                  ``(B) Extinguishment of debt by refinancing.--
                          ``(i) Required agreement.--All existing 
                        holders of mortgage liens on the property 
                        involved shall agree to accept the proceeds of 
                        the insured loan as payment in full of all 
                        indebtedness under all existing mortgages, and 
                        all encumbrances related to such mortgages 
                        shall be removed. The Oversight Board may take 
                        such actions as the Oversight Board considers 
                        necessary or appropriate to facilitate 
                        coordination and agreement between the holders 
                        of the existing senior mortgage and any 
                        existing subordinate mortgages, taking into 
                        consideration the subordinate lien status of 
                        such subordinate mortgages, to comply with the 
                        requirement under this subparagraph.
                          ``(ii) Treatment of multiple mortgage 
                        liens.--In addition to clause (i), the 
                        Oversight Board shall adopt one of the 
                        following approaches for all mortgages or such 
                        classes of mortgages as the Oversight Board may 
                        determine and may, from time to time, 
                        reconsider:
                                  ``(I) Fixed price.--As a requirement 
                                for participating in this program, all 
                                existing lien holders will agree to not 
                                provide any payment to subordinate lien 
                                holders other than such payment in 
                                accordance with a formula established 
                                by the Oversight Board as set forth in 
                                clause (iii); except that the Oversight 
                                Board may establish a short period 
                                within which first and subordinate lien 
                                holders may negotiate to extinguish all 
                                subordinate liens for compensation that 
                                may be different from the amount 
                                determined under such formula set forth 
                                in clause (iii).
                                  ``(II) Shared equity.--The Oversight 
                                Board may require the mortgagor under a 
                                mortgage insured under this section to 
                                agree to share a portion of any future 
                                equity in the mortgaged property with 
                                holders of existing subordinate 
                                mortgages, in accordance with a formula 
                                for such shared equity established by 
                                the Oversight Board as set forth in 
                                clause (iii), except that payments of 
                                such shared equity may be made only 
                                after the Secretary recovers all 
                                amounts owed to the Secretary with 
                                respect to such mortgage pursuant to 
                                the program under this section 
                                (including amounts owed pursuant to 
                                paragraph (8)).
                          ``(iii) Formula.--In determining a formula 
                        for determining any payments to subordinate 
                        lien holders pursuant to subclauses (I) and 
                        (II) of clause (ii), and in any reconsideration 
                        of such formula as the Oversight Board may from 
                        time to time undertake, the Oversight Board 
                        shall take into consideration the current 
                        market value of such liens. In no case may a 
                        formula provide for the payment of more than 1 
                        percent of the current appraised value of the 
                        mortgaged property to a subordinate lien holder 
                        if the outstanding balance owed to more senior 
                        lien holders is equal to or exceeds such 
                        current appraised value.
                          ``(iv) Voluntary program.--This subparagraph 
                        may not be construed to require any holder of 
                        any existing mortgage to participate in the 
                        program under this section generally, or with 
                        respect to any particular loan.
                          ``(v) Source of payments for subordinate 
                        loans.--Any amounts paid to holders of any 
                        existing subordinate mortgages in connection 
                        with the origination and insurance of a 
                        mortgage under this section shall derive only 
                        from--
                                  ``(I) the holder of the existing 
                                senior mortgage; or
                                  ``(II) in the case only of the shared 
                                equity approach under clause (ii)(II), 
                                the mortgagor under the mortgage 
                                insured under this section
          ``(7) Required reduction of debt service.--The debt service 
        payments due under the mortgage insured under this section 
        shall be in an amount that is substantially reduced from the 
        debt service payments due under the existing mortgage or 
        mortgages, which reduction may be achieved through a reduction 
        of indebtedness, a reduction in the interest rate being paid, 
        or an extension of the term of the mortgage, or any combination 
        thereof.
          ``(8) Financial recovery to federal government through exit 
        premium.--
                  ``(A) Subordinate lien.--The mortgage shall provide 
                that the Secretary shall retain a lien on the residence 
                involved, which shall be subordinate to the mortgage 
                insured under this section but senior to all other 
                mortgages on the residence that may exist at any time, 
                and which shall secure the repayment of the amount due 
                under subparagraph (D).
                  ``(B) No interest or payment during mortgage.--The 
                amount secured by the lien retained by the Secretary 
                pursuant to subparagraph (A) shall not bear interest 
                and shall not be repayable to the Secretary except as 
                provided in subparagraph (D) of this paragraph.
                  ``(C) Net proceeds available for exit premium.--Upon 
                the sale, refinancing, or other disposition of the 
                residence covered by a mortgage insured under this 
                section, any proceeds resulting from such disposition 
                that remain after deducting the remaining insured 
                principal balance of the mortgage insured under this 
                section shall be available to meet the obligation under 
                subparagraph (D).
                  ``(D) Exit premium.--Upon any refinancing of the 
                mortgage insured under this section or any sale or 
                disposition of the residence covered by the mortgage, 
                the Secretary shall, subject to the availability of 
                sufficient net proceeds described in subparagraph (C), 
                receive the greater of--
                          ``(i) 3 percent of the amount of the original 
                        insured principal obligation of the mortgage; 
                        or
                          ``(ii) a percentage of the portion of the net 
                        proceeds described in subparagraph (C), which 
                        shall be--
                                  ``(I) in the case of any refinancing, 
                                sale, or disposition occurring during 
                                the first year of the term of the 
                                mortgage, 100 percent of such net 
                                proceeds;
                                  ``(II) in the case of any 
                                refinancing, sale, or disposition 
                                occurring during the second year of the 
                                term of the mortgage, 80 percent;
                                  ``(III) in the case of any 
                                refinancing, sale, or disposition 
                                occurring during the third year of the 
                                term of the mortgage, 60 percent; and
                                  ``(IV) in the case of any 
                                refinancing, sale, or disposition 
                                occurring during the fourth year of the 
                                term of the mortgage or at any time 
                                thereafter, 50 percent;
                except that such percentage of proceeds shall be 
                reduced by all fees the Secretary has collected for the 
                mortgage prior to such refinancing, sale, or 
                disposition.
                  ``(E) Authority to prohibit new second liens.--The 
                Oversight Board shall prohibit borrowers from granting 
                a new second lien on the mortgaged property during the 
                first five years of the term of the mortgage insured 
                under this section, except as the Oversight Board 
                determines to be necessary to ensure the appropriate 
                maintenance of the mortgaged property.
          ``(9) Documentation and verification of income.--In complying 
        with the FHA underwriting requirements under the program under 
        this section, the mortgagee under the mortgage shall document 
        and verify the income of the mortgagor by procuring an Internal 
        Revenue Service transcript of the income tax returns of the 
        mortgagor for the two most recent years for which the filing 
        deadline for such years has passed and by any other method, in 
        accordance with procedures and standards that the Oversight 
        Board or the Secretary shall establish.
          ``(10) Fixed rate mortgage.--The mortgage insured under this 
        section shall bear interest at a single rate that is fixed for 
        the entire term of the mortgage.
          ``(11) Maximum loan amount.--Notwithstanding section 
        203(b)(2), the mortgage being insured under this section shall 
        involve a principal obligation in an amount that does not 
        exceed the limitation (for a property of the applicable size) 
        on the amount of the principal obligation that would be 
        allowable under the terms of section 202(a) of the Economic 
        Stimulus Act of 2008 if the mortgage were insured pursuant to 
        such section. The limitation on the amount of the principal 
        obligation allowable under such Act shall apply for the 
        purposes of this Act until the termination under subsection (n) 
        of the program under this subsection.
          ``(12) Ineligibility for fraud conviction.--The mortgagor 
        shall not have been convicted under Federal or State law for 
        mortgage fraud during the 7-year period ending upon the 
        insurance of the mortgage under this section.
          ``(13) Lender review.--The mortgagee under the mortgage shall 
        conduct an electronic database search of the mortgagor's 
        criminal history to determine if the mortgagor has had a 
        conviction described in paragraph (12). The mortgagee may 
        charge the mortgagor a reasonable fee for the actual cost of 
        the search not to exceed a maximum rate established by the 
        Oversight Board. The Oversight Board may provide clarification, 
        if needed, to help mortgagees identify any differences among 
        the States in how they report mortgage fraud convictions. The 
        Oversight Board shall establish procedures sufficient to allow 
        the mortgagor to challenge a mortgagee's determination with 
        respect to paragraph (12) (including to correct inaccuracies 
        resulting from theft of the mortgagor's identity or personally 
        identifiable information).
          ``(14) Appraisals.--Any appraisal conducted in connection 
        with a mortgage insured under this section shall--
                  ``(A) be based on the current value of the property;
                  ``(B) be conducted in accordance with title XI of the 
                Financial Institutions Reform, Recovery, and 
                Enforcement Act of 1989 (12 U.S.C. 3331 et seq.);
                  ``(C) be completed by an appraiser who meets the 
                competency requirements of the Uniform Standards of 
                Professional Appraisal Practice;
                  ``(D) be wholly consistent with the appraisal 
                standards, practices, and procedures under section 
                202(e) of this Act that apply to all loans insured 
                under this Act; and
                  ``(E) comply with the requirements of subsection (g) 
                of this section (relating to appraisal independence).
          ``(15) Statement of loan terms.--
                  ``(A) Requirement.--The mortgagor shall have been 
                provided by the mortgagee, not later than three days 
                after application for the mortgage, a form described in 
                subparagraph (B) appropriately and accurately completed 
                by the mortgagee.
                  ``(B) Form.--The form described in this subparagraph 
                shall be a single page, written disclosure regarding 
                the mortgage loan to be insured under this section 
                that, when completed by the mortgagee, sets forth, in 
                accordance with such requirements as the Secretary 
                shall by regulation establish a best possible estimate 
                of--
                          ``(i) the total loan amount under the 
                        mortgage;
                          ``(ii) the loan-to-value ratio for the 
                        mortgage;
                          ``(iii) the final maturity date for the 
                        mortgage;
                          ``(iv) the amount of any prepayment fee to be 
                        charged if the mortgage is paid in full before 
                        the final maturity date for the mortgage, 
                        including the percentages of any net proceeds 
                        to be received by the Secretary pursuant to 
                        paragraph (8)(D)(ii);
                          ``(v) the amount of the exit premium under 
                        the mortgage pursuant to subsection (e)(3);
                          ``(vi) the interest rate under the mortgage 
                        expressed as an annual percentage rate, and the 
                        amount of the monthly payment due under such 
                        rate;
                          ``(vii) the fully indexed rate of interest 
                        under the mortgage expressed as an annual 
                        percentage rate and the amount of the monthly 
                        payment due under such rate;
                          ``(viii) the monthly household income of the 
                        borrower upon which the mortgage is based;
                          ``(ix) the amount of the monthly payment due 
                        under the mortgage, and the amount of such 
                        initial monthly payment plus monthly amounts 
                        due for taxes and insurance on the property for 
                        which the mortgage is made, both expressed as a 
                        percentage of the monthly household income of 
                        the borrower; and
                          ``(x) the aggregate amount of settlement 
                        charges for all settlement services provided in 
                        connection with the mortgage, the amount of 
                        such charges that are included in the principal 
                        amount and the amount of such charges the 
                        borrower must pay at closing, the aggregate 
                        amount of mortgagee's fees connection with the 
                        mortgage, and the aggregate amount of other 
                        fees or required payments in connection with 
                        the mortgage.
  ``(d) Flexible Underwriting Criteria.--
          ``(1) In general.--The Oversight Board shall establish, and 
        the Secretary acting on behalf of the Oversight Board shall 
        implement, underwriting standards for mortgages insured under 
        this section that--
                  ``(A) ensure that each mortgagor under a mortgage 
                insured under this section has a reasonable expectation 
                of repaying the mortgage, taking into consideration the 
                mortgagor's income, assets, liabilities, payment 
                history, and other applicable criteria, but which shall 
                not result in a denial of insurance solely on the basis 
                of the mortgagor's current FICO or other credit scores, 
                or any delinquency or default by the mortgagor under 
                the existing mortgage or mortgages, or any case filed 
                under title 11, United States Code, by the mortgagor; 
                and
                  ``(B) subject to the provisions of subparagraph (A), 
                permit a total debt-to-income ratio of up to 43 
                percent.
          ``(2) Exception.--
                  ``(A) In general.--Subject to the underwriting 
                standards established under paragraph (1)(A) and any 
                additional requirements that the Oversight Board 
                considers appropriate, the Oversight Board shall permit 
                a total debt-to-income ratio of more than 43 percent, 
                but not more than 50 percent, if the mortgagor has 
                made, on a timely basis before the endorsement of the 
                mortgage insured under this section, not less than six 
                months of payments in an amount not less than the 
                amount of the monthly payment due under the mortgage to 
                be insured under this section. The holder of the 
                existing senior mortgage shall exercise forbearance 
                with respect to such mortgage during the period in 
                which such payments are made.
                  ``(B) Computation of debt-to-income ratio.-- In 
                computing the mortgagor's total debt-to-income ratio 
                for purposes of mortgage qualification under the 
                underwriting standards established pursuant to this 
                section--
                          ``(i) if the mortgagor is a debtor in a case 
                        under chapter 13 of title 11, United States 
                        Code, payments on recurring debts other than 
                        housing expenses shall be based on the amounts 
                        being paid on such debts under the mortgagor's 
                        confirmed plan under such chapter; and
                          ``(ii) if the mortgagor is a debtor in a case 
                        under chapter 7 of title 11, United States 
                        Code, recurring debts that are to be discharged 
                        in that case shall not be considered.
          ``(3) Authority.--The Oversight Board may alter the ratios 
        under this subsection for a particular class of borrowers 
        subject to such requirements as the Board determines is 
        necessary and appropriate to fulfill the purposes of this Act.
          ``(4) Representations and warranties.--The Oversight Board 
        shall require the underwriter of the insured loan to provide 
        such representations and warranties as the Oversight Board 
        considers necessary or appropriate for the Secretary to enforce 
        compliance with all underwriting and appraisal standards of the 
        program.
  ``(e) Premiums.--For each mortgage insured under this section, the 
Oversight Board shall establish and the Secretary shall collect--
          ``(1) at the time of insurance, a single premium payment in 
        an amount equal to 3.0 percent of the amount of the original 
        insured principal obligation of the mortgage, which shall be 
        paid from the proceeds of the mortgage being insured under this 
        section, through the reduction of the amount of indebtedness on 
        the existing senior mortgage required under subsection 
        (c)(6)(A);
          ``(2) in addition to the premium under paragraph (1), annual 
        premium payments in an amount equal to 1.50 percent of the 
        remaining insured principal balance of the mortgage; and
          ``(3) an exit premium in the amount determined under 
        subsection (c)(8), but which shall not be less than 3.0 percent 
        of the original insured principal obligation of the mortgage, 
        subject only to the availability of sufficient net proceeds 
        from sale, refinancing, or other disposition of the property, 
        as determined in subsection (c)(8).
  ``(f) Origination Fees and Mortgage Rate.--The Oversight Board shall 
establish and the Secretary shall implement a reasonable limitation on 
origination fees for mortgages insured under this section and shall 
establish procedures to ensure that interest rates on such mortgages 
shall be commensurate with market rate interest rates on such types of 
loans.
  ``(g) Appraisal Independence.--
          ``(1) Prohibitions on interested parties in a real estate 
        transaction.--No mortgage lender, mortgage broker, mortgage 
        banker, real estate broker, appraisal management company, 
        employee of an appraisal management company, nor any other 
        person with an interest in a real estate transaction involving 
        an appraisal in connection with a mortgage insured under this 
        section shall improperly influence, or attempt to improperly 
        influence, through coercion, extortion, collusion, 
        compensation, instruction, inducement, intimidation, non-
        payment for services rendered, or bribery, the development, 
        reporting, result, or review of a real estate appraisal sought 
        in connection with the mortgage.
          ``(2) Exceptions.--The requirements of paragraph (1) shall 
        not be construed as prohibiting a mortgage lender, mortgage 
        broker, mortgage banker, real estate broker, appraisal 
        management company, employee of an appraisal management 
        company, or any other person with an interest in a real estate 
        transaction from asking an appraiser to provide 1 or more of 
        the following services:
                  ``(A) Consider additional, appropriate property 
                information, including the consideration of additional 
                comparable properties to make or support an appraisal.
                  ``(B) Provide further detail, substantiation, or 
                explanation for the appraiser's value conclusion.
                  ``(C) Correct errors in the appraisal report.
          ``(3) Civil monetary penalties.--The Secretary may impose a 
        civil money penalty for any knowing and material violation of 
        paragraph (1) under the same terms and conditions as are 
        authorized in section 536(a) of this Act.
  ``(h) Limitation on Aggregate Insurance Authority.--The aggregate 
original principal obligation of all mortgages insured under this 
section may not exceed $300,000,000,000.
  ``(i) Enhancement of FHA Capacity.--Under the direction of the 
Oversight Board, the Secretary shall take such actions as may be 
necessary to--
          ``(1) contract for the establishment of underwriting 
        criteria, automated underwriting systems, pricing standards, 
        and other factors relating to eligibility for mortgages insured 
        under this section;
          ``(2) contract for independent quality reviews of 
        underwriting, including appraisal reviews and fraud detection, 
        of mortgages insured under this section or pools of such 
        mortgages; and
          ``(3) increase personnel of the Department as necessary to 
        process or monitor the processing of mortgages insured under 
        this section.
  ``(j) Monitoring of Underwriting Risk.--
          ``(1) Monitoring of designated underwriters.--The Oversight 
        Board and the Secretary shall monitor independent quality 
        reviews as established pursuant to subsection (i)(2) to--
                  ``(A) determine compliance of designated underwriters 
                with underwriting standards;
                  ``(B) determine rates of delinquency, claims rates, 
                and loss rates of designated underwriters; and
                  ``(C) terminate eligibility of designated 
                underwriters that do not meet minimum performance 
                standards as the Oversight Board may establish and the 
                Secretary implements.
          ``(2) Reports by oversight board.--The Oversight Board shall 
        submit monthly reports to the Congress identifying the progress 
        of the program for mortgage insurance under this section, which 
        shall contain the following information for each month:
                  ``(A) The number of new mortgages insured under this 
                section, including the location of the properties 
                subject to such mortgages by census tract.
                  ``(B) The aggregate principal obligation of new 
                mortgages insured under this section.
                  ``(C) The average amount by which the indebtedness on 
                existing mortgages is reduced in accordance with 
                subsection (c)(6).
                  ``(D) The average amount by which the debt service 
                payments on existing mortgages is reduced in accordance 
                with subsection (c)(7).
                  ``(E) The amount of premiums collected for insurance 
                of mortgages under this section.
                  ``(F) The claim and loss rates for mortgages insured 
                under this section.
                  ``(G) The race, ethnicity, gender, and income of the 
                mortgagors, aggregated by geographical areas at least 
                as specific as census tracts, except where necessary to 
                protect privacy of the borrower.
                  ``(H) Any other information that the Oversight Board 
                considers appropriate.
          ``(3) Report by inspector general.--The Inspector General of 
        the Department of Housing and Urban Development shall conduct 
        an annual audit of the program for mortgage insurance under 
        this section to determine compliance with this section and 
        program rules.
  ``(k) GNMA Commitment Authority.--
          ``(1) Guarantees.--The Secretary shall take such actions as 
        may be necessary to ensure that securities based on and backed 
        by a trust or pool composed of mortgages insured under this 
        section are available to be guaranteed by the Government 
        National Mortgage Association as to the timely payment of 
        principal and interest.
          ``(2) Guarantee authority.--To carry out the purposes of 
        section 306 of the National Housing Act (12 U.S.C. 1721), the 
        Government National Mortgage Association may enter into new 
        commitments to issue guarantees of securities based on or 
        backed by mortgages insured under this section, not exceeding 
        $300,000,000,000. The amount of authority provided under the 
        preceding sentence to enter into new commitments to issue 
        guarantees is in addition to any amount of authority to make 
        new commitments to issue guarantees that is provided to the 
        Association under any other provision of law.
  ``(l) Special Risk Insurance Fund.--The insurance of each mortgage 
under this section shall be the obligation of the Special Risk 
Insurance Fund established by section 238.
  ``(m) Definitions.--For purposes of this section, the following 
definitions shall apply:
          ``(1) Existing mortgage.--The term `existing mortgage' means, 
        with respect to a mortgage insured under this section, a 
        mortgage that is to be extinguished, and paid or prepaid, from 
        the proceeds of the mortgage insured under this section.
          ``(2) Existing senior mortgage.--The term `existing senior 
        mortgage' means, with respect to a mortgage insured under this 
        section, the existing mortgage that has superior priority.
          ``(3) Existing subordinate mortgage.--The term `existing 
        subordinate mortgage' means, with respect to a mortgage insured 
        under this section, an existing mortgage that has subordinate 
        priority to the existing senior mortgage.
  ``(n) Sunset.--
          ``(1) In general.--Except as provided in paragraph (2), the 
        authority of the Secretary to make any new commitment to insure 
        any mortgage under this section shall terminate upon the 
        expiration of the 2-year period beginning on the date of the 
        enactment of the FHA Housing Stabilization and Homeownership 
        Retention Act of 2008.
          ``(2) Extensions.--The Oversight Board may, not more than 
        four times, extend the authority to enter into new commitments 
        to insure mortgages under this section beyond the date 
        specified in paragraph (1), except that each such extension 
        shall--
                  ``(A) be effective only if, before the program 
                terminates pursuant to paragraph (1) or any previous 
                extension pursuant to this paragraph, the Oversight 
                Board--
                          ``(i) certifies the need for such extension 
                        in writing to the Congress; and
                          ``(ii) causes notice of such extension to be 
                        published in the Federal Register no later than 
                        the beginning of the 3-month period that ends 
                        upon the scheduled termination date of the 
                        program; and
                  ``(B) be for a period of not more than 6 months.
  ``(o) Authorizations of Appropriations.--There is authorized to be 
appropriated for each of fiscal years 2008 and 2009--
          ``(1) $210,000,000 for providing counseling regarding loss 
        mitigation for mortgagors with 1- to 4-family residences, 
        including determining eligibility for the program under this 
        section, with grants to be administered through the 
        Neighborhood Reinvestment Corporation, except that--
                  ``(A) not less than 15 percent of the funds made 
                available pursuant to this paragraph shall be provided 
                to counseling organizations that target counseling 
                services regarding loss mitigation to minority and low-
                income homeowners or provide such services in 
                neighborhoods with high concentrations of minority and 
                low-income homeowners;
                  ``(B) $35,000,000 of the funds made available 
                pursuant to this paragraph shall be used by the 
                Neighborhood Reinvestment Corporation (referred to in 
                this subparagraph as the `NRC') to make grants to State 
                and local legal organizations or attorneys that have 
                demonstrated legal experience in home foreclosure or 
                eviction law to provide legal assistance related to 
                home ownership preservation, home foreclosure 
                prevention, and tenancy associated with home 
                foreclosure or to counseling intermediaries that have 
                been approved by the Department of Housing and Urban 
                Development for the purpose of making such grants or 
                contracting for such legal assistance; of the amount 
                provided under this subparagraph, at least 60 percent 
                shall be allocated for legal assistance to low-income 
                homeowners or tenants; such attorneys shall be capable 
                of assisting homeowners in owner-occupied homes or 
                tenants who live in homes with mortgages in default, in 
                danger of default, or subject to or at risk of 
                foreclosure or eviction and who have legal issues that 
                cannot be handled by counselors employed by NRC 
                intermediaries; in using the amount made available 
                under this subparagraph, the NRC shall give priority 
                consideration to State and local legal organizations 
                and attorneys that (i) provide legal assistance in the 
                100 metropolitan statistical areas (as defined by the 
                Director of the Office of Management and Budget) with 
                the highest home foreclosure rates, and (ii) have the 
                capacity to begin using the financial assistance within 
                90 days after receipt of the assistance; as a condition 
                of the receipt of a grant under this subparagraph, the 
                grantee shall submit to NRC information relating to the 
                demographic characteristics of the assisted homeowners 
                or tenants, the dollar amount and terms of the relevant 
                mortgages and the outcome of legal proceedings related 
                to the foreclosure or eviction proceedings, including 
                the resolutions thereof;
                  ``(C) some such sums shall be used for such 
                counseling for veterans recently returning from active 
                duty in the Armed Forces;
                  ``(D) the NRC shall give priority consideration for 
                funding with amounts made available pursuant to this 
                paragraph, except for funds made available under 
                subparagraphs (A) and (B), to entities that have an 
                effective plan in place for making contact, including 
                personal contact, with defaulted mortgagors, and such a 
                plan may include use of third parties (including both 
                for-profit and not-for-profit entities) to make 
                personal contact with defaulted mortgagors, or visits 
                to such mortgagors, or both;
                  ``(E) except with respect to funds reserved under 
                subparagraphs (A) and (B), the NRC shall give priority 
                consideration for funding with amounts made available 
                pursuant to this paragraph to entities that have a 
                written plan that has been implemented for providing 
                in-person counseling and for making contact, including 
                personal contact, with defaulted mortgagors, for the 
                purpose of providing counseling or providing 
                information about available counseling, both (i) prior 
                to commencement of any foreclosure proceedings, and 
                (ii) in the event effective in person or phone contact 
                has not been made with such defaulted mortgagors prior 
                thereto, then prior to the conclusion of the 
                foreclosure process; and
                  ``(F) not less than 2 percent of the funds made 
                available pursuant to this paragraph shall be used only 
                for identifying and notifying borrowers under existing 
                mortgages who are eligible under this section for 
                insurance of refinancing mortgages, and in making funds 
                reserved under this subparagraph available for such 
                purpose, the Secretary shall give preference to 
                assistance for programs that have a proven history of 
                outreach within minority communities; and
          ``(2) $150,000,000 for costs of activities under subsection 
        (i).
  ``(p) Audit and Report by Inspector General.--
          ``(1) Audit.--The Inspector General of the Department of 
        Housing and Urban Development shall conduct an audit of the 
        program for loss mitigation counseling funded with amounts made 
        available under subsection (o)(1) to determine compliance with 
        such subsection.
          ``(2) Reports to congress.--Not later than March 30, 2009, 
        and every calendar quarter thereafter, the Inspector General 
        shall submit to the appropriate committees of the Congress a 
        report summarizing the activities of the Inspector General and 
        the Neighborhood Reinvestment Corporation during the 120-day 
        period ending on the date of such report. Each report shall 
        include, for the period covered by such report, a detailed 
        statement of all obligations, expenditures, and revenues 
        associated with paragraphs (1) and (2) of subsection (o), 
        including--
                  ``(A) obligations and expenditures of appropriated 
                funds;
                  ``(B) the number of homeowners eligible in such 
                program;
                  ``(C) the number of homeowners participating in such 
                program;
                  ``(D) the status of homeowners within such program;
                  ``(E) the number of homeowners who have rejected 
                assistance from the Neighborhood Reinvestment 
                Corporation; and
                  ``(F) information on participating counseling 
                services.''.
  (b) Special Risk Insurance Fund.--Section 238 of the National Housing 
Act (12 U.S.C. 1715z-3) is amended--
          (1) in subsection (a)(1), by striking ``or 243'' each place 
        such term appears and inserting ``243, or 257''; and
          (2) in subsection (b), by striking ``and 243'' each place 
        such term appears and inserting ``243, and 257''.

SEC. 103. STUDY OF AUCTION OR BULK REFINANCE PROGRAM.

  (a) Study.--The Board of Governors of the Federal Reserve System (in 
this section referred to as the ``Board of Governors''), in 
consultation with other members of the Oversight Board established by 
section 257(a) of the National Housing Act (as added by the amendment 
made by section 102(a) of this Act), shall conduct a study of the need 
for and efficacy of an auction or bulk refinancing mechanism to 
facilitate refinancing of existing residential mortgages that are at 
risk for foreclosure into mortgages insured under the mortgage 
insurance program under title II of the National Housing Act. The study 
shall identify and examine various options for mechanisms under which 
lenders and servicers of such mortgages may make bids for forward 
commitments for such insurance in an expedited manner.
  (b) Content.--
          (1) Analysis.--The study required under subsection (a) shall 
        analyze--
                  (A) the feasibility of establishing a mechanism that 
                would facilitate the more rapid refinancing of 
                borrowers at risk of foreclosure into performing 
                mortgages insured under title II of the National 
                Housing Act;
                  (B) whether such a mechanism would provide an 
                effective and efficient mechanism to reduce 
                foreclosures on qualified existing mortgages;
                  (C) whether the use of an auction or bulk refinance 
                program is necessary to stabilize the housing market 
                and reduce the impact of turmoil in that market on the 
                economy of the United States;
                  (D) whether there are other mechanisms or authority 
                that would be useful to reduce foreclosure; and
                  (E) and any other factors that the Board of Governors 
                considers relevant.
          (2) Determinations.--To the extent that the Board of 
        Governors finds that a facility of the type described in 
        paragraph (1) is feasible and useful, the study shall--
                  (A) determine and identify any additional authority 
                or resources needed to establish and operate such a 
                mechanism;
                  (B) determine whether there is a need for additional 
                authority with respect to the loan underwriting 
                criteria included in the amendment made by section 
                102(a) of this Act or with respect to eligibility of 
                participating borrowers, lenders, or holders of liens;
                  (C) determine whether such underwriting criteria 
                should be established on the basis of individual loans, 
                in the aggregate, or otherwise to facilitate the goal 
                of refinancing borrowers at risk of foreclosure into 
                viable loans insured under the National Housing Act.
  (c) Report.--Not later than the expiration of the 60-day period 
beginning on the date of the enactment of this Act, the Board of 
Governors shall submit a report regarding the results of the study 
conducted under this section to the Committee on Financial Services of 
the House of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate. The report shall include a detailed 
description of the analysis required under subsection (b)(1) and of the 
determinations made pursuant to subsection (b)(2), and shall include 
any other findings and recommendations of the Board of Governors 
pursuant to the study, including identifying various options for 
mechanisms described in subsection (a).

SEC. 104. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT FOR 
                    CERTAIN HOUSING LOANS GUARANTEED BY SECRETARY OF 
                    VETERANS AFFAIRS.

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

SEC. 105. STUDY OF POSSIBLE ACCOUNTING REVISIONS RELATING TO PROPERTY 
                    AT RISK OF FORECLOSURE AND THE AVAILABILITY OF 
                    CREDIT FOR REFINANCING HOME MORTGAGES AT RISK OF 
                    FORECLOSURE.

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

SEC. 106. GAO STUDY OF THE EFFECT OF TIGHTENING CREDIT MARKETS IN 
                    COMMUNITIES AFFECTED BY THE SUBPRIME MORTGAGE 
                    FORECLOSURE CRISES AND PREDATORY LENDING ON 
                    PROSPECTIVE FIRST-TIME HOMEBUYERS SEEKING 
                    MORTGAGES.

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

                 TITLE II--OFFICE OF HOUSING COUNSELING

SEC. 201. SHORT TITLE.

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

SEC. 202. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING.

  Section 4 of the Department of Housing and Urban Development Act (42 
U.S.C. 3533) is amended by adding at the end the following new 
subsection:
  ``(g) Office of Housing Counseling.--
          ``(1) Establishment.--There is established, in the Office of 
        the Secretary, the Office of Housing Counseling.
          ``(2) Director.--There is established the position of 
        Director of Housing Counseling. The Director shall be the head 
        of the Office of Housing Counseling and shall be appointed by 
        the Secretary. Such position shall be a career-reserved 
        position in the Senior Executive Service.
          ``(3) Functions.--
                  ``(A) In general.--The Director shall have ultimate 
                responsibility within the Department, except for the 
                Secretary, for all activities and matters relating to 
                homeownership counseling and rental housing counseling, 
                including--
                          ``(i) research, grant administration, public 
                        outreach, and policy development relating to 
                        such counseling; and
                          ``(ii) establishment, coordination, and 
                        administration of all regulations, 
                        requirements, standards, and performance 
                        measures under programs and laws administered 
                        by the Department that relate to housing 
                        counseling, homeownership counseling (including 
                        maintenance of homes), mortgage-related 
                        counseling (including home equity conversion 
                        mortgages and credit protection options to 
                        avoid foreclosure), and rental housing 
                        counseling, including the requirements, 
                        standards, and performance measures relating to 
                        housing counseling.
                  ``(B) Specific functions.--The Director shall carry 
                out the functions assigned to the Director and the 
                Office under this section and any other provisions of 
                law. Such functions shall include establishing rules 
                necessary for--
                          ``(i) the counseling procedures under section 
                        106(g)(1) of the Housing and Urban Development 
                        Act of 1968 (12 U.S.C. 1701x(h)(1));
                          ``(ii) carrying out all other functions of 
                        the Secretary under section 106(g) of the 
                        Housing and Urban Development Act of 1968, 
                        including the establishment, operation, and 
                        publication of the availability of the toll-
                        free telephone number under paragraph (2) of 
                        such section;
                          ``(iii) carrying out section 5 of the Real 
                        Estate Settlement Procedures Act of 1974 (12 
                        U.S.C. 2604) for home buying information 
                        booklets prepared pursuant to such section;
                          ``(iv) carrying out the certification program 
                        under section 106(e) of the Housing and Urban 
                        Development Act of 1968 (12 U.S.C. 1701x(e));
                          ``(v) carrying out the assistance program 
                        under section 106(a)(4) of the Housing and 
                        Urban Development Act of 1968, including 
                        criteria for selection of applications to 
                        receive assistance;
                          ``(vi) carrying out any functions regarding 
                        abusive, deceptive, or unscrupulous lending 
                        practices relating to residential mortgage 
                        loans that the Secretary considers appropriate, 
                        which shall include conducting the study under 
                        section 206 of the Expand and Preserve Home 
                        Ownership Through Counseling Act;
                          ``(vii) providing for operation of the 
                        advisory committee established under paragraph 
                        (4) of this subsection;
                          ``(viii) collaborating with community-based 
                        organizations with expertise in the field of 
                        housing counseling; and
                          ``(ix) providing for the building of capacity 
                        to provide housing counseling services in areas 
                        that lack sufficient services.
          ``(4) Advisory committee.--
                  ``(A) In general.--The Secretary shall appoint an 
                advisory committee to provide advice regarding the 
                carrying out of the functions of the Director.
                  ``(B) Members.--Such advisory committee shall consist 
                of not more than 12 individuals, and the membership of 
                the committee shall equally represent all aspects of 
                the mortgage and real estate industry, including 
                consumers.
                  ``(C) Terms.--Except as provided in subparagraph (D), 
                each member of the advisory committee shall be 
                appointed for a term of 3 years. Members may be 
                reappointed at the discretion of the Secretary.
                  ``(D) Terms of initial appointees.--As designated by 
                the Secretary at the time of appointment, of the 
                members first appointed to the advisory committee, 4 
                shall be appointed for a term of 1 year and 4 shall be 
                appointed for a term of 2 years.
                  ``(E) Prohibition of pay; travel expenses.--Members 
                of the advisory committee shall serve without pay, but 
                shall receive travel expenses, including per diem in 
                lieu of subsistence, in accordance with applicable 
                provisions under subchapter I of chapter 57 of title 5, 
                United States Code.
                  ``(F) Advisory role only.--The advisory committee 
                shall have no role in reviewing or awarding housing 
                counseling grants.
          ``(5) Scope of homeownership counseling.--In carrying out the 
        responsibilities of the Director, the Director shall ensure 
        that homeownership counseling provided by, in connection with, 
        or pursuant to any function, activity, or program of the 
        Department addresses the entire process of homeownership, 
        including the decision to purchase a home, the selection and 
        purchase of a home, issues arising during or affecting the 
        period of ownership of a home (including refinancing, default 
        and foreclosure, and other financial decisions), and the sale 
        or other disposition of a home.''.

SEC. 203. COUNSELING PROCEDURES.

  (a) In General.--Section 106 of the Housing and Urban Development Act 
of 1968 (12 U.S.C. 1701x) is amended by adding at the end the following 
new subsection:
  ``(g) Procedures and Activities.--
          ``(1) Counseling procedures.--
                  ``(A) In general.--The Secretary shall establish, 
                coordinate, and monitor the administration by the 
                Department of Housing and Urban Development of the 
                counseling procedures for homeownership counseling and 
                rental housing counseling provided in connection with 
                any program of the Department, including all 
                requirements, standards, and performance measures that 
                relate to homeownership and rental housing counseling.
                  ``(B) Homeownership counseling.--For purposes of this 
                subsection and as used in the provisions referred to in 
                this subparagraph, the term `homeownership counseling' 
                means counseling related to homeownership and 
                residential mortgage loans. Such term includes 
                counseling related to homeownership and residential 
                mortgage loans that is provided pursuant to--
                          ``(i) section 105(a)(20) of the Housing and 
                        Community Development Act of 1974 (42 U.S.C. 
                        5305(a)(20));
                          ``(ii) in the United States Housing Act of 
                        1937--
                                  ``(I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                  ``(II) section 8(y)(1)(D) (42 U.S.C. 
                                1437f(y)(1)(D));
                                  ``(III) section 18(a)(4)(D) (42 
                                U.S.C. 1437p(a)(4)(D));
                                  ``(IV) section 23(c)(4) (42 U.S.C. 
                                1437u(c)(4));
                                  ``(V) section 32(e)(4) (42 U.S.C. 
                                1437z-4(e)(4));
                                  ``(VI) section 33(d)(2)(B) (42 U.S.C. 
                                1437z-5(d)(2)(B));
                                  ``(VII) sections 302(b)(6) and 
                                303(b)(7) (42 U.S.C. 1437aaa-1(b)(6), 
                                1437aaa-2(b)(7)); and
                                  ``(VIII) section 304(c)(4) (42 U.S.C. 
                                1437aaa-3(c)(4));
                          ``(iii) section 302(a)(4) of the American 
                        Homeownership and Economic Opportunity Act of 
                        2000 (42 U.S.C. 1437f note);
                          ``(iv) sections 233(b)(2) and 258(b) of the 
                        Cranston-Gonzalez National Affordable Housing 
                        Act (42 U.S.C. 12773(b)(2), 12808(b));
                          ``(v) this section and section 101(e) of the 
                        Housing and Urban Development Act of 1968 (12 
                        U.S.C. 1701x, 1701w(e));
                          ``(vi) section 220(d)(2)(G) of the Low-Income 
                        Housing Preservation and Resident Homeownership 
                        Act of 1990 (12 U.S.C. 4110(d)(2)(G));
                          ``(vii) sections 422(b)(6), 423(b)(7), 
                        424(c)(4), 442(b)(6), and 443(b)(6) of the 
                        Cranston-Gonzalez National Affordable Housing 
                        Act (42 U.S.C. 12872(b)(6), 12873(b)(7), 
                        12874(c)(4), 12892(b)(6), and 12893(b)(6));
                          ``(viii) section 491(b)(1)(F)(iii) of the 
                        McKinney-Vento Homeless Assistance Act (42 
                        U.S.C. 11408(b)(1)(F)(iii));
                          ``(ix) sections 202(3) and 810(b)(2)(A) of 
                        the Native American Housing and Self-
                        Determination Act of 1996 (25 U.S.C. 4132(3), 
                        4229(b)(2)(A));
                          ``(x) in the National Housing Act--
                                  ``(I) in section 203 (12 U.S.C. 
                                1709), the penultimate undesignated 
                                paragraph of paragraph (2) of 
                                subsection (b), subsection (c)(2)(A), 
                                and subsection (r)(4);
                                  ``(II) subsections (a) and (c)(3) of 
                                section 237 (12 U.S.C. 1715z-2); and
                                  ``(III) subsections (d)(2)(B) and 
                                (m)(1) of section 255 (12 U.S.C. 1715z-
                                20);
                          ``(xi) section 502(h)(4)(B) of the Housing 
                        Act of 1949 (42 U.S.C. 1472(h)(4)(B)); and
                          ``(xii) section 508 of the Housing and Urban 
                        Development Act of 1970 (12 U.S.C. 1701z-7).
                  ``(C) Rental housing counseling.--For purposes of 
                this subsection, the term `rental housing counseling' 
                means counseling related to rental of residential 
                property, which may include counseling regarding future 
                homeownership opportunities and providing referrals for 
                renters and prospective renters to entities providing 
                counseling and shall include counseling related to such 
                topics that is provided pursuant to--
                          ``(i) section 105(a)(20) of the Housing and 
                        Community Development Act of 1974 (42 U.S.C. 
                        5305(a)(20));
                          ``(ii) in the United States Housing Act of 
                        1937--
                                  ``(I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                  ``(II) section 18(a)(4)(D) (42 U.S.C. 
                                1437p(a)(4)(D));
                                  ``(III) section 23(c)(4) (42 U.S.C. 
                                1437u(c)(4));
                                  ``(IV) section 32(e)(4) (42 U.S.C. 
                                1437z-4(e)(4));
                                  ``(V) section 33(d)(2)(B) (42 U.S.C. 
                                1437z-5(d)(2)(B)); and
                                  ``(VI) section 302(b)(6) (42 U.S.C. 
                                1437aaa-1(b)(6));
                          ``(iii) section 233(b)(2) of the Cranston-
                        Gonzalez National Affordable Housing Act (42 
                        U.S.C. 12773(b)(2));
                          ``(iv) section 106 of the Housing and Urban 
                        Development Act of 1968 (12 U.S.C. 1701x);
                          ``(v) section 422(b)(6) of the Cranston-
                        Gonzalez National Affordable Housing Act (42 
                        U.S.C. 12872(b)(6));
                          ``(vi) section 491(b)(1)(F)(iii) of the 
                        McKinney-Vento Homeless Assistance Act (42 
                        U.S.C. 11408(b)(1)(F)(iii));
                          ``(vii) sections 202(3) and 810(b)(2)(A) of 
                        the Native American Housing and Self-
                        Determination Act of 1996 (25 U.S.C. 4132(3), 
                        4229(b)(2)(A)); and
                          ``(viii) the rental assistance program under 
                        section 8 of the United States Housing Act of 
                        1937 (42 U.S.C. 1437f).
          ``(2) Standards for materials.--The Secretary, in conjunction 
        with the advisory committee established under subsection (g)(4) 
        of the Department of Housing and Urban Development Act, shall 
        establish standards for materials and forms to be used, as 
        appropriate, by organizations providing homeownership 
        counseling services, including any recipients of assistance 
        pursuant to subsection (a)(4).
          ``(3) Mortgage software systems.--
                  ``(A) Certification.--The Secretary shall provide for 
                the certification of various computer software programs 
                for consumers to use in evaluating different 
                residential mortgage loan proposals. The Secretary 
                shall require, for such certification, that the 
                mortgage software systems take into account--
                          ``(i) the consumer's financial situation and 
                        the cost of maintaining a home, including 
                        insurance, taxes, and utilities;
                          ``(ii) the amount of time the consumer 
                        expects to remain in the home or expected time 
                        to maturity of the loan;
                          ``(iii) such other factors as the Secretary 
                        considers appropriate to assist the consumer in 
                        evaluating whether to pay points, to lock in an 
                        interest rate, to select an adjustable or fixed 
                        rate loan, to select a conventional or 
                        government-insured or guaranteed loan and to 
                        make other choices during the loan application 
                        process.
                If the Secretary determines that available existing 
                software is inadequate to assist consumers during the 
                residential mortgage loan application process, the 
                Secretary shall arrange for the development by private 
                sector software companies of new mortgage software 
                systems that meet the Secretary's specifications.
                  ``(B) Use and initial availability.--Such certified 
                computer software programs shall be used to supplement, 
                not replace, housing counseling. The Secretary shall 
                provide that such programs are initially used only in 
                connection with the assistance of housing counselors 
                certified pursuant to subsection (e).
                  ``(C) Availability.--After a period of initial 
                availability under subparagraph (B) as the Secretary 
                considers appropriate, the Secretary shall take 
                reasonable steps to make mortgage software systems 
                certified pursuant to this paragraph widely available 
                through the Internet and at public locations, including 
                public libraries, senior-citizen centers, public 
                housing sites, offices of public housing agencies that 
                administer rental housing assistance vouchers, and 
                housing counseling centers.
          ``(4) National public service multimedia campaigns to promote 
        housing counseling.--
                  ``(A) In general.--The Director of Housing Counseling 
                shall develop, implement, and conduct national public 
                service multimedia campaigns designed to make persons 
                facing mortgage foreclosure, persons considering a 
                subprime mortgage loan to purchase a home, elderly 
                persons, persons who face language barriers, low-income 
                persons, and other potentially vulnerable consumers 
                aware that it is advisable, before seeking or 
                maintaining a residential mortgage loan, to obtain 
                homeownership counseling from an unbiased and reliable 
                sources and that such homeownership counseling is 
                available, including through programs sponsored by the 
                Secretary of Housing and Urban Development.
                  ``(B) Contact information.--Each segment of the 
                multimedia campaign under subparagraph (A) shall 
                publicize the toll-free telephone number and web site 
                of the Department of Housing and Urban Development 
                through which persons seeking housing counseling can 
                locate a housing counseling agency in their State that 
                is certified by the Secretary of Housing and Urban 
                Development and can provide advice on buying a home, 
                renting, defaults, foreclosures, credit issues, and 
                reverse mortgages.
                  ``(C) Authorization of appropriations.--There are 
                authorized to be appropriated to the Secretary, not to 
                exceed $3,000,000 for fiscal years 2008, 2009, and 
                2010, for the develop, implement, and conduct of 
                national public service multimedia campaigns under this 
                paragraph.
          ``(5) Education programs.--The Secretary shall provide advice 
        and technical assistance to States, units of general local 
        government, and nonprofit organizations regarding the 
        establishment and operation of, including assistance with the 
        development of content and materials for, educational programs 
        to inform and educate consumers, particularly those most 
        vulnerable with respect to residential mortgage loans (such as 
        elderly persons, persons facing language barriers, low-income 
        persons, and other potentially vulnerable consumers), regarding 
        home mortgages, mortgage refinancing, home equity loans, and 
        home repair loans.''.
  (b) Conforming Amendments to Grant Program for Homeownership 
Counseling Organizations.--Section 106(c)(5)(A)(ii) of the Housing and 
Urban Development Act of 1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is 
amended--
          (1) in subclause (III), by striking ``and'' at the end;
          (2) in subclause (IV) by striking the period at the end and 
        inserting ``; and''; and
          (3) by inserting after subclause (IV) the following new 
        subclause:
                                  ``(V) notify the housing or mortgage 
                                applicant of the availability of 
                                mortgage software systems provided 
                                pursuant to subsection (g)(3).''.

SEC. 204. GRANTS FOR HOUSING COUNSELING ASSISTANCE.

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

SEC. 205. REQUIREMENTS TO USE HUD-CERTIFIED COUNSELORS UNDER HUD 
                    PROGRAMS.

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

SEC. 206. STUDY OF DEFAULTS AND FORECLOSURES.

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

SEC. 207. DEFINITIONS FOR COUNSELING-RELATED PROGRAMS.

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

SEC. 208. UPDATING AND SIMPLIFICATION OF MORTGAGE INFORMATION BOOKLET.

  Section 5 of the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2604) is amended--
          (1) in the section heading, by striking ``special'' and 
        inserting ``home buying'';
          (2) by striking subsections (a) and (b) and inserting the 
        following new subsections:
  ``(a) Preparation and Distribution.--The Secretary shall prepare, at 
least once every 5 years, a booklet to help consumers applying for 
federally related mortgage loans to understand the nature and costs of 
real estate settlement services. The Secretary shall prepare the 
booklet in various languages and cultural styles, as the Secretary 
determines to be appropriate, so that the booklet is understandable and 
accessible to homebuyers of different ethnic and cultural backgrounds. 
The Secretary shall distribute such booklets to all lenders that make 
federally related mortgage loans. The Secretary shall also distribute 
to such lenders lists, organized by location, of homeownership 
counselors certified under section 106(e) of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701x(e)) for use in complying with 
the requirement under subsection (c) of this section.
  ``(b) Contents.--Each booklet shall be in such form and detail as the 
Secretary shall prescribe and, in addition to such other information as 
the Secretary may provide, shall include in plain and understandable 
language the following information:
          ``(1) A description and explanation of the nature and purpose 
        of the costs incident to a real estate settlement or a 
        federally related mortgage loan. The description and 
        explanation shall provide general information about the 
        mortgage process as well as specific information concerning, at 
        a minimum--
                  ``(A) balloon payments;
                  ``(B) prepayment penalties; and
                  ``(C) the trade-off between closing costs and the 
                interest rate over the life of the loan.
          ``(2) An explanation and sample of the uniform settlement 
        statement required by section 4.
          ``(3) A list and explanation of lending practices, including 
        those prohibited by the Truth in Lending Act or other 
        applicable Federal law, and of other unfair practices and 
        unreasonable or unnecessary charges to be avoided by the 
        prospective buyer with respect to a real estate settlement.
          ``(4) A list and explanation of questions a consumer 
        obtaining a federally related mortgage loan should ask 
        regarding the loan, including whether the consumer will have 
        the ability to repay the loan, whether the consumer 
        sufficiently shopped for the loan, whether the loan terms 
        include prepayment penalties or balloon payments, and whether 
        the loan will benefit the borrower.
          ``(5) An explanation of the right of rescission as to certain 
        transactions provided by sections 125 and 129 of the Truth in 
        Lending Act.
          ``(6) A brief explanation of the nature of a variable rate 
        mortgage and a reference to the booklet entitled `Consumer 
        Handbook on Adjustable Rate Mortgages', published by the Board 
        of Governors of the Federal Reserve System pursuant to section 
        226.19(b)(1) of title 12, Code of Federal Regulations, or to 
        any suitable substitute of such booklet that such Board of 
        Governors may subsequently adopt pursuant to such section.
          ``(7) A brief explanation of the nature of a home equity line 
        of credit and a reference to the pamphlet required to be 
        provided under section 127A of the Truth in Lending Act.
          ``(8) Information about homeownership counseling services 
        made available pursuant to section 106(a)(4) of the Housing and 
        Urban Development Act of 1968 (12 U.S.C. 1701x(a)(4)), a 
        recommendation that the consumer use such services, and 
        notification that a list of certified providers of 
        homeownership counseling in the area, and their contact 
        information, is available.
          ``(9) An explanation of the nature and purpose of escrow 
        accounts when used in connection with loans secured by 
        residential real estate and the requirements under section 10 
        of this Act regarding such accounts.
          ``(10) An explanation of the choices available to buyers of 
        residential real estate in selecting persons to provide 
        necessary services incidental to a real estate settlement.
          ``(11) An explanation of a consumer's responsibilities, 
        liabilities, and obligations in a mortgage transaction.
          ``(12) An explanation of the nature and purpose of real 
        estate appraisals, including the difference between an 
        appraisal and a home inspection.
          ``(13) Notice that the Office of Housing of the Department of 
        Housing and Urban Development has made publicly available a 
        brochure regarding loan fraud and a World Wide Web address and 
        toll-free telephone number for obtaining the brochure.
The booklet prepared pursuant to this section shall take into 
consideration differences in real estate settlement procedures that may 
exist among the several States and territories of the United States and 
among separate political subdivisions within the same State and 
territory.'';
          (3) in subsection (c), by inserting at the end the following 
        new sentence: ``Each lender shall also include with the booklet 
        a reasonably complete or updated list of homeownership 
        counselors who are certified pursuant to section 106(e) of the 
        Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) 
        and located in the area of the lender.''; and
          (4) in subsection (d), by inserting after the period at the 
        end of the first sentence the following: ``The lender shall 
        provide the HUD-issued booklet in the version that is most 
        appropriate for the person receiving it.''.

                  TITLE III--COMBATING MORTGAGE FRAUD

SEC. 301. AUTHORIZATION OF APPROPRIATIONS TO COMBAT MORTGAGE FRAUD.

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

                          Purpose and Summary

    H.R. 5830, the FHA Housing Stabilization and Homeownership 
Retention Act of 2008, is intended to create a voluntary 
Federal Housing Administration (FHA) program that provides 
mortgage refinancing assistance to allow families to stay in 
their homes, protect neighborhoods, and help stabilize the 
housing market. H.R. 5830 seeks to stem the rise in mortgage 
foreclosures by allowing FHA to insure and guarantee refinanced 
mortgages that have been significantly written down by mortgage 
holders and lenders. H.R. 5830 would permit FHA to provide up 
to $300 billion in new guarantees to help refinance at-risk 
borrowers into viable mortgages. In exchange for the acceptance 
of a substantial write-down of principal, the existing lender 
or mortgage holder would receive a short payment from the 
proceeds of a new FHA loan if the restructured loan would 
result in terms that the borrower can reasonably be expected to 
pay. The existing lender or mortgage holder would have a cash 
payment and no further credit exposure to the borrower.
    Under the program created by H.R. 5830, a borrower or 
existing loan servicer of an eligible loan would contact an 
FHA-approved lender, who would determine the size of a loan 
that would be consistent with the requirements of the program 
and that the borrower could reasonably repay. If the current 
lender or mortgage holder agrees to a write-down that is 
sufficient to meet the requirements of the program and make the 
new loan affordable, the FHA-lender will pay off the discounted 
existing mortgage.
    In addition to a first lien, the program gives the 
government a soft second lien to help defray the government's 
costs and prevent unjust enrichment (e.g., borrower flipping). 
When the borrower sells the home or refinances the loan, the 
borrower will pay from any profits the higher of an ongoing 
exit fee equal to 3 percent of the original FHA loan balance or 
a declining percentage of any profits.
    H.R. 5830 also establishes within the Department of Housing 
and Urban Development (HUD) an Office of Housing Counseling 
that will conduct activities relating to homeownership and 
rental housing counseling, and authorizes appropriations to 
hire additional FBI agents and Department of Justice 
prosecutors to combat mortgage fraud.

                  Background and Need for Legislation

    A record number of American families are facing or are at 
risk of foreclosure. According to data from the Mortgage 
Bankers Association (MBA), the delinquency rate for mortgage 
loans on single-family properties stood at 5.82 percent of all 
loans outstanding in the fourth quarter of 2007, up almost 20 
percent from one year ago. This is the highest total 
delinquency rate in the MBA survey in over 20 years. And this 
delinquency data does not take into account loans in the 
foreclosure process. The percentage of loans in the foreclosure 
process has risen over 70 percent in the last year and stands 
at the highest level ever. In her testimony at the April 9, 
2008 hearing, Chairman Sheila Bair of the FDIC also cited data 
from the MBA and observed that over 20 percent of subprime 
adjustable rate mortgages (ARMs) were seriously delinquent in 
the fourth quarter of 2007, and over 14 percent of all subprime 
mortgages were seriously delinquent.
    The increase in foreclosures and delinquencies can be 
traced to the rise of securitization coupled with the 
proliferation of subprime and other exotic ARMs, which were 
given to many borrowers with the expectation that they could 
sell or refinance before the loans reset. The typical subprime 
hybrid ARM has a fixed interest rate during the initial two or 
three year period but then resets every six months. Many of 
these loans were extended under the assumption that housing 
prices would continue to appreciate. However, stagnant or 
negative home price appreciation has limited refinance options 
for many subprime--as well as Alt-A and prime--borrowers. 
According to Mark Zandi of Economy.com, 550,000 first mortgage 
loans were in default as of the end of January 2008. This pace 
would leave 2.2 million defaults this year and could go as high 
as 3 million. In addition, Mr. Zandi also notes nearly 8.8 
million homeowners, or 10 percent of all homeowners, are 
``underwater'' (i.e., their mortgage debt exceeds the value of 
their homes). Similarly, Governor Randall Kroszner of the 
Federal Reserve testified at the April 9, 2008 hearing that 
more than 1.5 million foreclosures were started during 2007, up 
53 percent from the previous year, and the consensus 
expectation is that the number of foreclosures in 2008 will 
likely exceed the number in 2007.
    Rising delinquency and foreclosure rates have reverberated 
in the secondary market, decreasing the value of mortgage 
backed securities and reducing the availability of credit. 
Accordingly, lenders have tightened credit standards, making it 
more difficult for delinquent borrowers to refinance. Chairman 
Bair noted the sharp contraction in credit availability in her 
April 9, 2008 testimony, stating that the total U.S. mortgage 
debt originated in the fourth quarter of 2007 was $450 billion, 
down 38 percent from the fourth quarter of 2006, and that the 
total issuance of subprime mortgage-backed securities fell by 
89 percent in the fourth quarter of 2007 compared to the prior 
year.
    At the same time, because of falling home prices in many 
parts of the country, many borrowers--even those current on 
their mortgages--find themselves unable to refinance into more 
affordable or fixed-rate products because their outstanding 
mortgage loan balances exceed their homes' values. These 
borrowers' inability to refinance before a rate reset may be 
creating a downward cycle with increasing foreclosure rates, 
which in turn further lowers local property values, further 
eroding credit availability. A February 2008 Center for 
Responsible Lending study notes that foreclosures have a 
significant impact on the neighborhoods and communities in 
which they occur, estimating that 40.6 million homes will 
experience devaluation due to foreclosures on neighboring 
properties that were financed with subprime loans.

                                Hearings

    During the 110th Congress, the Committee on Financial 
Services and its subcommittees held several hearings to examine 
the need for legislation and policy alternatives on this 
legislation.
    The Financial Services Committee held a hearing on April 
10, 2008, entitled ``Using FHA for Housing Stabilization and 
Homeownership Retention.'' The following witnesses testified: 
The Honorable Martin O'Malley, Governor, State of Maryland, The 
Honorable Adrian M. Fenty, Mayor, District of Columbia, The 
Honorable Thomas M. Menino, Mayor, City of Boston, The 
Honorable Oscar B. Goodman, Mayor, City of Las Vegas, Mr. Doug 
Garver, Executive Director, Ohio Housing Finance Agency, Mr. 
David C. Lizarraga, Chairman, US Hispanic Chamber of Commerce, 
Ms. Sheila Crowley, President, National Low Income Housing 
Coalition, Mr. Hilary O. Shelton, Director, NAACP Washington 
Bureau, Mr. Victor Burrola, Director, Homeownership Network, 
National Council of La Raza.
    The Financial Services Committee held a hearing on April 9, 
2008, entitled ``Using FHA for Housing Stabilization and 
Homeownership Retention.'' The following witnesses testified: 
The Honorable Sheila C. Bair, Chairman, Federal Deposit 
Insurance Corporation, The Honorable John C. Dugan, 
Comptroller, Office of the Comptroller of the Currency, The 
Honorable John M. Reich, Director, Office of Thrift 
Supervision, The Honorable Randall Kroszner, Board Member, 
Board of Governors of the Federal Reserve System, The Honorable 
Brian Montgomery, Assistant Secretary for Housing-Federal 
Housing Commissioner, United States Department of Housing and 
Urban Development, Mr. Brian Wesbury, Chief Economist, First 
Trust Advisors L.P., Dr. Alan S. Blinder, Ph.D., Gordon S. 
Rentschler Memorial Professor of Economics and Public Affairs, 
Princeton University, Dr. Allen Sinai, Chief Global Economist, 
Strategist and President, Decision Economics, Inc.
    The Financial Services Committee held a hearing on 
September 20, 2007, entitled ``Legislative and Regulatory 
Options for Minimizing and Mitigating Mortgage Foreclosures.'' 
The following witnesses testified: The Honorable Henry M. 
Paulson, Jr., Secretary of the Treasury, United States 
Department of the Treasury, The Honorable Alphonso Jackson, 
Secretary of Housing and Urban Development, United States 
Department of Housing and Urban Development, The Honorable Ben 
S. Bernanke, Chairman, Board of Governors of the Federal 
Reserve System, Mr. Daniel H. Mudd, President and Chief 
Executive Officer, Fannie Mae, Dr. Richard F. Syron, Chairman 
and Chief Executive Officer, Freddie Mac, Ms. Judith Liben, 
Massachusetts Law Reform Institute, Mr. John M. Robbins, 
Chairman, Mortgage Bankers Association, Mr. Harry H. Dinham, 
CMC, Past-President, National Association of Mortgage Brokers 
(NAMB), The Dinham Companies, Mr. Bruce Marks, Chief Executive 
Officer, Neighborhood Assistance Corporation of America, Mr. 
Alex J. Pollock, Resident Fellow, American Enterprise 
Institute.
    The Financial Services Committee held a field hearing in 
Minneapolis, Minnesota on August 9, 2007, entitled ``The Effect 
of Predatory Lending and the Foreclosure Crisis on Twin Cities' 
Communities and Neighborhoods.'' The following witnesses 
testified: The Honorable R. T. Rybak, Mayor, Minneapolis, 
Minnesota, The Honorable Chris Coleman, Mayor, St. Paul, 
Minnesota, The Honorable Lori Swanson, Attorney General, State 
of Minnesota, Mr. Richard M. Todd, Minneapolis Federal Reserve 
Chair Vice President, Federal Reserve Bank of Minneapolis, Ms. 
Sharon Glover, Golden Valley, Minnesota, Mr. Dante Rivera, St. 
Paul, Minnesota, Ms. Dorothy Bridges, President, Franklin 
Avenue Bank, Minneapolis, Minnesota, Mr. Paul Satriano, ACORN 
National Treasurer, MN ACORN State Board Director, St. Paul, 
Minnesota, Ms. Patricia Hanson, President, Community 
Development and Specialized Lending, Wells Fargo, Minneapolis, 
Minnesota, Ms. Sheri Pugh Sullivan, Executive Director, 
Northside Residents Resource Council, Minneapolis, Minnesota, 
Mr. Tim Marx, Commissioner, Minnesota Housing Finance Agency, 
St. Paul, Minnesota, Ms. Julie Gugin, Executive Director, 
Minnesota Home Ownership Center.
    The Subcommittee on Housing and Community Opportunity held 
a hearing on April 17, 2007, entitled ``Possible Responses to 
Rising Mortgage Foreclosures.'' The following witnesses 
testified: The Honorable Marcy Kaptur; The Honorable Michael R. 
Turner, The Honorable Sheila Bair, Chairman, Federal Deposit 
Insurance Corporation, The Honorable Brian Montgomery, 
Assistant Secretary for Housing, Department of Housing and 
Urban Development, Daniel Mudd, President and CEO, Fannie Mae, 
Richard F. Syron, Chairman & CEO, Freddie Mac, David Berenbaum, 
Executive Vice President, National Community Reinvestment 
Coalition, Janis Bowdler, Senior Policy Analyst, National 
Council of La Raza, The Honorable John H. Dalton, President, 
Housing Policy Council, The Financial Services Roundtable, Mr. 
George Miller, Executive Director, American Securitization 
Forum, also representing the Securities Industry and Financial 
Markets Association, Douglas A. Garver, Executive Director, 
Ohio Housing Finance Agency, Kenneth D. Wade, CEO, 
NeighborWorks America.
    The Subcommittee on Financial Institutions and Consumer 
Credit held a hearing on March 27, 2007, entitled ``Subprime 
and Predatory Mortgage Lending: New Regulatory Guidance, 
Current Market Conditions and Effects on Regulated Financial 
Institutions.'' The following witnesses testified: The 
Honorable Sheila Bair, Chairman, Federal Deposit Insurance 
Corporation, The Honorable John Reich, Director, Office of 
Thrift Supervision, The Honorable JoAnn Johnson, Chairman, 
National Credit Union Administration, Mr. E. Wayne Rushton, 
Senior Deputy Comptroller, Office of the Comptroller of the 
Currency, Ms. Sandra F. Braunstein, Director, Division of 
Consumer and Community Affairs, Federal Reserve Board, Mr. 
Steve Antonakes, Commissioner of Banks, Massachusetts Division 
of Banks, on behalf of Conference of State Banking Supervisors, 
Mr. Michael Calhoun, President, Center for Responsible Lending, 
Mr. John Taylor, President & CEO, National Community 
Reinvestment Coalition, Mr. Allen Fishbein, Director of Housing 
and Credit Policy, Consumer Federation of America, Mr. John 
Robbins, Chairman, Mortgage Bankers Association, Mr. Harry H. 
Dinham, CMC, President, National Association of Mortgage 
Brokers, Mr. Alex J. Pollock, Resident Fellow, American 
Enterprise Institute.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
April 24 and 30, 2008, and on May 1, 2008, ordered H.R. 5830, 
the ``FHA Housing Stabilization and Homeownership Retention Act 
of 2008'', as amended, favorably reported by a record vote of 
46 yeas and 21 nays.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Mr. Frank to report the bill, as amended, to the 
House with a favorable recommendation was agreed to by a record 
vote of 46 yeas and 21 nays (Record vote FC-110). The names of 
Members voting for and against follow:

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................        X   ........  .........  Mr. Bachus.......  ........        X   .........
Mr. Kanjorski..................        X   ........  .........  Ms. Pryce (OH)...        X   ........  .........
Ms. Waters.....................        X   ........  .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................        X   ........  .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................        X   ........  .........  Mr. Royce........  ........        X   .........
Ms. Velazquez..................        X   ........  .........  Mr. Lucas........  ........  ........  .........
Mr. Watt.......................        X   ........  .........  Mr. Paul.........  ........        X   .........
Mr. Ackerman...................        X   ........  .........  Mr. LaTourette...        X   ........  .........
Mr. Sherman....................        X   ........  .........  Mr. Manzullo.....  ........        X   .........
Mr. Meeks......................        X   ........  .........  Mr. Jones........  ........        X   .........
Mr. Moore (KS).................        X   ........  .........  Mrs. Biggert.....  ........  ........  .........
Mr. Capuano....................        X   ........  .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Miller (CA)..        X   ........  .........
Mr. Clay.......................        X   ........  .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................        X   ........  .........  Mr. Feeney.......  ........        X   .........
Mr. Baca.......................        X   ........  .........  Mr. Hensarling...  ........        X   .........
Mr. Lynch......................        X   ........  .........  Mr. Garrett (NJ).  ........        X   .........
Mr. Miller (NC)................        X   ........  .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................        X   ........  .........  Mr. Barrett (SC).  ........        X   .........
Mr. Green......................        X   ........  .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................        X   ........  .........  Mr. Pearce.......  ........        X   .........
Ms. Bean.......................        X   ........  .........  Mr. Neugebauer...  ........        X   .........
Ms. Moore (WI).................        X   ........  .........  Mr. Price (GA)...  ........        X   .........
Mr. Davis (TN).................        X   ........  .........  Mr. Davis (KY)...  ........        X   .........
Mr. Hodes......................        X   ........  .........  Mr. McHenry......  ........        X   .........
Mr. Ellison....................        X   ........  .........  Mr. Campbell.....  ........        X   .........
Mr. Klein......................        X   ........  .........  Mr. Putnam.......  ........        X   .........
Mr. Mahoney (FL)...............        X   ........  .........  Mrs. Bachmann....  ........        X   .........
Mr. Wilson.....................        X   ........  .........  Mr. Roskam.......  ........        X   .........
Mr. Perlmutter.................        X   ........  .........  Mr. Marchant.....  ........        X   .........
Mr. Murphy.....................        X   ........  .........  Mr. McCotter.....  ........        X   .........
Mr. Donnelly...................        X   ........  .........  Mr. McCarthy.....  ........        X   .........
Mr. Wexler.....................        X   ........  .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................        X   ........  .........
Mr. Boren......................        X   ........  .........
Mr. Foster.....................        X   ........  .........
Mr. Carson.....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    The following amendments were disposed of by record votes. 
The names of Members voting for and against follow:
    An amendment in the nature of a substitute by Mr. Bachus, 
Mrs. Biggert, and Mrs. Capito, no. 5, was NOT AGREED TO by a 
record vote of 23 yeas and 34 nays. (FC-91):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Ms. Pryce (OH)...  ........  ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........  ........  ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...  ........  ........  .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........  ........  ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Miller (CA)..  ........        X   .........
Mr. Clay.......................  ........  ........  .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......  ........  ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..  ........  ........  .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........  ........  .........  Mr. Davis (KY)...  ........  ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....  ........  ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....  ........  ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........        X   .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Putnam, no. 9, regarding borrower 
bankruptcy history, was NOT AGREED TO by a record vote of 27 
yeas and 32 nays (Record vote no. FC-92):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Ms. Pryce (OH)...  ........  ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...  ........  ........  .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........  ........  ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Miller (CA)..        X   ........  .........
Mr. Clay.......................  ........  ........  .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......  ........  ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..  ........  ........  .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........  ........  .........  Mr. Davis (KY)...  ........  ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....  ........  ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................        X   ........  .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........        X   .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........  ........  .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Watt and Ms. Velazquez, no. 10, 
regarding legal assistance, was NOT AGREED TO by a record vote 
of 28 yeas and 34 nays (Record vote no. FC-93):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......  ........        X   .........
Mr. Kanjorski..................        X   ........  .........  Ms. Pryce (OH)...  ........  ........  .........
Ms. Waters.....................        X   ........  .........  Mr. Castle.......  ........        X   .........
Mrs. Maloney...................        X   ........  .........  Mr. King (NY)....  ........        X   .........
Mr. Gutierrez..................        X   ........  .........  Mr. Royce........  ........        X   .........
Ms. Velazquez..................        X   ........  .........  Mr. Lucas........  ........        X   .........
Mr. Watt.......................        X   ........  .........  Mr. Paul.........  ........        X   .........
Mr. Ackerman...................        X   ........  .........  Mr. LaTourette...  ........  ........  .........
Mr. Sherman....................        X   ........  .........  Mr. Manzullo.....  ........        X   .........
Mr. Meeks......................        X   ........  .........  Mr. Jones........  ........  ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....  ........        X   .........
Mr. Capuano....................        X   ........  .........  Mr. Shays........  ........        X   .........
Mr. Hinojosa...................        X   ........  .........  Mr. Miller (CA)..  ........        X   .........
Mr. Clay.......................        X   ........  .........  Mrs. Capito......  ........        X   .........
Mrs. McCarthy..................        X   ........  .........  Mr. Feeney.......  ........  ........  .........
Mr. Baca.......................        X   ........  .........  Mr. Hensarling...  ........        X   .........
Mr. Lynch......................        X   ........  .........  Mr. Garrett (NJ).  ........        X   .........
Mr. Miller (NC)................        X   ........  .........  Ms. Brown-Waite..  ........  ........  .........
Mr. Scott......................        X   ........  .........  Mr. Barrett (SC).  ........        X   .........
Mr. Green......................        X   ........  .........  Mr. Gerlach......  ........        X   .........
Mr. Cleaver....................        X   ........  .........  Mr. Pearce.......  ........        X   .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...  ........        X   .........
Ms. Moore (WI).................        X   ........  .........  Mr. Price (GA)...  ........        X   .........
Mr. Davis (TN).................  ........  ........  .........  Mr. Davis (KY)...  ........  ........  .........
Mr. Hodes......................        X   ........  .........  Mr. McHenry......  ........        X   .........
Mr. Ellison....................        X   ........  .........  Mr. Campbell.....  ........  ........  .........
Mr. Klein......................        X   ........  .........  Mr. Putnam.......  ........        X   .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....  ........        X   .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......  ........        X   .........
Mr. Perlmutter.................        X   ........  .........  Mr. Marchant.....  ........        X   .........
Mr. Murphy.....................        X   ........  .........  Mr. McCotter.....  ........        X   .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....  ........        X   .........
Mr. Wexler.....................        X   ........  .........  Mr. Heller.......  ........        X   .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................        X   ........  .........
Mr. Carson.....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    A motion to reconsider the vote on the amendment by Mr. 
Watt no. 10 was AGREED TO by a record vote of 36 yeas and 23 
nays. (Record vote no. FC-94):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................        X   ........  .........  Mr. Bachus.......  ........        X   .........
Mr. Kanjorski..................        X   ........  .........  Ms. Pryce (OH)...  ........  ........  .........
Ms. Waters.....................        X   ........  .........  Mr. Castle.......  ........        X   .........
Mrs. Maloney...................        X   ........  .........  Mr. King (NY)....  ........  ........  .........
Mr. Gutierrez..................  ........  ........  .........  Mr. Royce........  ........  ........  .........
Ms. Velazquez..................        X   ........  .........  Mr. Lucas........  ........        X   .........
Mr. Watt.......................        X   ........  .........  Mr. Paul.........  ........  ........  .........
Mr. Ackerman...................        X   ........  .........  Mr. LaTourette...  ........        X   .........
Mr. Sherman....................        X   ........  .........  Mr. Manzullo.....  ........        X   .........
Mr. Meeks......................        X   ........  .........  Mr. Jones........  ........        X   .........
Mr. Moore (KS).................        X   ........  .........  Mrs. Biggert.....  ........        X   .........
Mr. Capuano....................        X   ........  .........  Mr. Shays........  ........  ........  .........
Mr. Hinojosa...................        X   ........  .........  Mr. Miller (CA)..  ........  ........  .........
Mr. Clay.......................        X   ........  .........  Mrs. Capito......  ........        X   .........
Mrs. McCarthy..................        X   ........  .........  Mr. Feeney.......  ........        X   .........
Mr. Baca.......................        X   ........  .........  Mr. Hensarling...  ........        X   .........
Mr. Lynch......................        X   ........  .........  Mr. Garrett (NJ).  ........  ........  .........
Mr. Miller (NC)................        X   ........  .........  Ms. Brown-Waite..  ........  ........  .........
Mr. Scott......................        X   ........  .........  Mr. Barrett (SC).  ........        X   .........
Mr. Green......................        X   ........  .........  Mr. Gerlach......  ........        X   .........
Mr. Cleaver....................        X   ........  .........  Mr. Pearce.......  ........        X   .........
Ms. Bean.......................        X   ........  .........  Mr. Neugebauer...  ........        X   .........
Ms. Moore (WI).................        X   ........  .........  Mr. Price (GA)...  ........        X   .........
Mr. Davis (TN).................        X   ........  .........  Mr. Davis (KY)...  ........  ........  .........
Mr. Hodes......................        X   ........  .........  Mr. McHenry......  ........        X   .........
Mr. Ellison....................        X   ........  .........  Mr. Campbell.....  ........        X   .........
Mr. Klein......................        X   ........  .........  Mr. Putnam.......  ........  ........  .........
Mr. Mahoney (FL)...............        X   ........  .........  Mrs. Bachmann....  ........        X   .........
Mr. Wilson.....................        X   ........  .........  Mr. Roskam.......  ........        X   .........
Mr. Perlmutter.................        X   ........  .........  Mr. Marchant.....  ........        X   .........
Mr. Murphy.....................        X   ........  .........  Mr. McCotter.....  ........        X   .........
Mr. Donnelly...................        X   ........  .........  Mr. McCarthy.....  ........        X   .........
Mr. Wexler.....................        X   ........  .........  Mr. Heller.......  ........        X   .........
Mr. Marshall...................        X   ........  .........
Mr. Boren......................        X   ........  .........
Mr. Foster.....................        X   ........  .........
Mr. Carson.....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Perlmutter, no. 10a, regarding counsel- 
ing intermediaries, to the amendment offered by Mr. Watt, no. 
10, was AGREED TO by a record vote of 45 yeas and 22 nays 
(Record vote no. FC-95):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................        X   ........  .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................        X   ........  .........  Ms. Pryce (OH)...  ........  ........  .........
Ms. Waters.....................        X   ........  .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................        X   ........  .........  Mr. King (NY)....  ........        X   .........
Mr. Gutierrez..................        X   ........  .........  Mr. Royce........  ........        X   .........
Ms. Velazquez..................        X   ........  .........  Mr. Lucas........  ........        X   .........
Mr. Watt.......................        X   ........  .........  Mr. Paul.........  ........        X   .........
Mr. Ackerman...................        X   ........  .........  Mr. LaTourette...  ........        X   .........
Mr. Sherman....................        X   ........  .........  Mr. Manzullo.....  ........        X   .........
Mr. Meeks......................        X   ........  .........  Mr. Jones........        X   ........  .........
Mr. Moore (KS).................        X   ........  .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................        X   ........  .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Miller (CA)..  ........        X   .........
Mr. Clay.......................        X   ........  .........  Mrs. Capito......  ........        X   .........
Mrs. McCarthy..................        X   ........  .........  Mr. Feeney.......  ........        X   .........
Mr. Baca.......................        X   ........  .........  Mr. Hensarling...  ........        X   .........
Mr. Lynch......................        X   ........  .........  Mr. Garrett (NJ).  ........        X   .........
Mr. Miller (NC)................        X   ........  .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................        X   ........  .........  Mr. Barrett (SC).  ........        X   .........
Mr. Green......................        X   ........  .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................        X   ........  .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................        X   ........  .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................        X   ........  .........  Mr. Price (GA)...  ........        X   .........
Mr. Davis (TN).................        X   ........  .........  Mr. Davis (KY)...  ........        X   .........
Mr. Hodes......................        X   ........  .........  Mr. McHenry......  ........        X   .........
Mr. Ellison....................        X   ........  .........  Mr. Campbell.....  ........        X   .........
Mr. Klein......................        X   ........  .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............        X   ........  .........  Mrs. Bachmann....  ........        X   .........
Mr. Wilson.....................        X   ........  .........  Mr. Roskam.......  ........        X   .........
Mr. Perlmutter.................        X   ........  .........  Mr. Marchant.....  ........        X   .........
Mr. Murphy.....................        X   ........  .........  Mr. McCotter.....  ........        X   .........
Mr. Donnelly...................        X   ........  .........  Mr. McCarthy.....  ........        X   .........
Mr. Wexler.....................  ........  ........  .........  Mr. Heller.......  ........        X   .........
Mr. Marshall...................        X   ........  .........
Mr. Boren......................        X   ........  .........
Mr. Foster.....................        X   ........  .........
Mr. Carson.....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Price, no. 10b, limiting funds for pur- 
poses of civil litigation, to the amendment offered by Mr. 
Watt, no. 10, was NOT AGREED TO by a record vote of 33 yeas and 
36 nays (Record vote no. FC-96):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Ms. Pryce (OH)...        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........  ........  .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Price (GA), no. 11a, regarding veterans 
counseling, to the amendment offered by Mr. Frank, no. 11, as a 
substitute for the amendment offered by Mr. Watt, no. 10, was 
NOT AGREED TO by a record vote of 33 yeas and 36 nays (Record 
vote no. FC-97):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Ms. Pryce (OH)...        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........        X   ........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........  ........  .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment offered by Mr. Frank, no. 11, regarding legal 
as- sistance and veterans counseling, as a substitute for the 
amend- ment offered by Mr. Watt, no. 10, was AGREED TO by a 
record vote of 69 yeas and 0 nays (Record vote no. FC-98):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................        X   ........  .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................        X   ........  .........  Ms. Pryce (OH)...        X   ........  .........
Ms. Waters.....................        X   ........  .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................        X   ........  .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................        X   ........  .........  Mr. Royce........        X   ........  .........
Ms. Velazquez..................        X   ........  .........  Mr. Lucas........        X   ........  .........
Mr. Watt.......................        X   ........  .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................        X   ........  .........  Mr. LaTourette...        X   ........  .........
Mr. Sherman....................        X   ........  .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................        X   ........  .........  Mr. Jones........        X   ........  .........
Mr. Moore (KS).................        X   ........  .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................        X   ........  .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................        X   ........  .........  Mr. Miller (CA)..        X   ........  .........
Mr. Clay.......................        X   ........  .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................        X   ........  .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................        X   ........  .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................        X   ........  .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................        X   ........  .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................        X   ........  .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................        X   ........  .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................        X   ........  .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................        X   ........  .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................        X   ........  .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................        X   ........  .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................        X   ........  .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................        X   ........  .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................        X   ........  .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............        X   ........  .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................        X   ........  .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................        X   ........  .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................        X   ........  .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................        X   ........  .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........  ........  .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................        X   ........  .........
Mr. Boren......................        X   ........  .........
Mr. Foster.....................        X   ........  .........
Mr. Carson.....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Manzullo, no. 18, striking the 
treatment of multiple mortgage liens was NOT AGREED TO by a 
record vote of 33 yeas and 36 nays (Record vote no. FC-99):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Ms. Pryce (OH)...        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........  ........  .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Marshall, no. 21, regarding flexible 
underwriting standards, was AGREED TO by a record vote of 36 
yeas and 32 nays (Record vote no. FC-100):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................        X   ........  .........  Mr. Bachus.......  ........        X   .........
Mr. Kanjorski..................        X   ........  .........  Ms. Pryce (OH)...  ........        X   .........
Ms. Waters.....................        X   ........  .........  Mr. Castle.......  ........        X   .........
Mrs. Maloney...................        X   ........  .........  Mr. King (NY)....  ........        X   .........
Mr. Gutierrez..................        X   ........  .........  Mr. Royce........  ........        X   .........
Ms. Velazquez..................        X   ........  .........  Mr. Lucas........  ........        X   .........
Mr. Watt.......................        X   ........  .........  Mr. Paul.........  ........        X   .........
Mr. Ackerman...................        X   ........  .........  Mr. LaTourette...  ........        X   .........
Mr. Sherman....................        X   ........  .........  Mr. Manzullo.....  ........        X   .........
Mr. Meeks......................        X   ........  .........  Mr. Jones........  ........        X   .........
Mr. Moore (KS).................        X   ........  .........  Mrs. Biggert.....  ........        X   .........
Mr. Capuano....................        X   ........  .........  Mr. Shays........  ........        X   .........
Mr. Hinojosa...................        X   ........  .........  Mr. Miller (CA)..  ........        X   .........
Mr. Clay.......................        X   ........  .........  Mrs. Capito......  ........        X   .........
Mrs. McCarthy..................        X   ........  .........  Mr. Feeney.......  ........        X   .........
Mr. Baca.......................        X   ........  .........  Mr. Hensarling...  ........        X   .........
Mr. Lynch......................        X   ........  .........  Mr. Garrett (NJ).  ........        X   .........
Mr. Miller (NC)................        X   ........  .........  Ms. Brown-Waite..  ........        X   .........
Mr. Scott......................        X   ........  .........  Mr. Barrett (SC).  ........        X   .........
Mr. Green......................        X   ........  .........  Mr. Gerlach......  ........        X   .........
Mr. Cleaver....................        X   ........  .........  Mr. Pearce.......  ........        X   .........
Ms. Bean.......................        X   ........  .........  Mr. Neugebauer...  ........        X   .........
Ms. Moore (WI).................        X   ........  .........  Mr. Price (GA)...  ........        X   .........
Mr. Davis (TN).................        X   ........  .........  Mr. Davis (KY)...  ........        X   .........
Mr. Hodes......................        X   ........  .........  Mr. McHenry......  ........        X   .........
Mr. Ellison....................        X   ........  .........  Mr. Campbell.....  ........        X   .........
Mr. Klein......................        X   ........  .........  Mr. Putnam.......  ........        X   .........
Mr. Mahoney (FL)...............        X   ........  .........  Mrs. Bachmann....  ........        X   .........
Mr. Wilson.....................        X   ........  .........  Mr. Roskam.......  ........        X   .........
Mr. Perlmutter.................        X   ........  .........  Mr. Marchant.....  ........        X   .........
Mr. Murphy.....................        X   ........  .........  Mr. McCotter.....  ........        X   .........
Mr. Donnelly...................        X   ........  .........  Mr. McCarthy.....  ........        X   .........
Mr. Wexler.....................  ........  ........  .........  Mr. Heller.......  ........        X   .........
Mr. Marshall...................        X   ........  .........
Mr. Boren......................        X   ........  .........
Mr. Foster.....................        X   ........  .........
Mr. Carson.....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mrs. Biggert, no. 23, regarding FHA Secure 
was NOT AGREED TO by a record vote of 31 yeas and 38 nays 
(Record vote no. FC-101):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Ms. Pryce (OH)...        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........  ........        X   .........
Mr. Hinojosa...................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..  ........        X   .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........  ........  .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Davis (KY), no. 24, regarding sunset, 
was NOT AGREED TO by a record vote of 33 yeas and 36 nays. 
(Record vote no. FC-102):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Ms. Pryce (OH)...        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........  ........  .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Garrett (NJ), no. 25, reducing the 
mort- gagor's equity stake, was NOT AGREED TO by a record vote 
of 30 yeas and 39 nays (Record vote no. FC-103):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Ms. Pryce (OH)...  ........        X   .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...  ........        X   .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........        X   ........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mrs. Capito......  ........        X   .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........  ........  .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Barrett (SC), no. 26, regarding denial 
of insurance based solely on credit scores or delinquency, was 
NOT AGREED TO by a record vote of 33 yeas and 36 nays (Record 
vote no. FC-104):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Ms. Pryce (OH)...        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Ms. Velzquez...................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........  ........  .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Neugebauer, no. 27, regarding 
subordination certificates, was NOT AGREED TO by a record vote 
of 22 yeas and 47 nays (Record vote no. FC-105):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Ms. Pryce (OH)...  ........        X   .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......  ........        X   .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....  ........        X   .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........  ........        X   .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...  ........        X   .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........  ........        X   .........
Mr. Hinojosa...................  ........        X   .........  Mr. Miller (CA)..  ........        X   .........
Mr. Clay.......................  ........        X   .........  Mrs. Capito......  ........        X   .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..  ........        X   .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......  ........        X   .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....  ........        X   .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........  ........  .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mrs. Bachmann and Mr. McHenry, no. 28, 
regarding Oversight Board underwriting standards, was NOT 
AGREED TO by a record vote of 33 yeas and 36 nays (Record vote 
no. FC-106):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........        X   .........  Ms. Pryce (OH)...        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........        X   ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....        X   ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........        X   .........  Mr. Miller (CA)..        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........  ........  .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Roskam, no. 14, regarding eligibility 
of mortgages by adequacy of underwriting, as amended, was NOT 
AGREED TO by a record vote of 28 yeas and 29 nays (Record vote 
no. FC-107):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........  ........  .........  Ms. Pryce (OH)...        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........  ........  ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........  ........  ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...        X   ........  .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....  ........  ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Miller (CA)..        X   ........  .........
Mr. Clay.......................  ........  ........  .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................  ........  ........  .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........  ........  .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........  ........  .........  Mr. Davis (KY)...  ........  ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........  ........  .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........  ........  .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........        X   .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Hensarling, no. 17, regarding maximum 
income, was NOT AGREED TO by a record vote of 28 yeas and 36 
nays (Record vote no. FC-108):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Pryce (OH)...        X   ........  .........
Ms. Waters.....................  ........        x   .........  Mr. Castle.......        X   ........  .........
Mrs. Maloney...................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........  ........        X   .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........  ........  ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...  ........        X   .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jones........        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....  ........  ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........        X   ........  .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Miller (CA)..  ........        X   .........
Mr. Clay.......................  ........  ........  .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................  ........  ........  .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Davis (KY)...        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putman.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mrs. Bachmann....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........        X   .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    An amendment by Mr. Price (GA), no. 27, requiring offsets, 
was NOT AGREED TO by a record vote of 29 yeas and 37 nays 
(Record vote no. FC-109):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank......................  ........        X   .........  Mr. Bachus.......        X   ........  .........
Mr. Kanjorski..................  ........  ........  .........  Mr. Pryce (OH)...        X   ........  .........
Ms. Waters.....................  ........        X   .........  Mr. Castle.......        X   ........  .........
Mr. Maloney....................  ........        X   .........  Mr. King (NY)....        X   ........  .........
Mr. Gutierrez..................  ........        X   .........  Mr. Royce........        X   ........  .........
Ms. Velazquez..................  ........        X   .........  Mr. Lucas........  ........  ........  .........
Mr. Watt.......................  ........        X   .........  Mr. Paul.........        X   ........  .........
Mr. Ackerman...................  ........        X   .........  Mr. LaTourette...  ........        X   .........
Mr. Sherman....................  ........        X   .........  Mr. Manzullo.....        X   ........  .........
Mr. Meeks......................  ........        X   .........  Mr. Jomes........        X   ........  .........
Mr. Moore (KS).................  ........        X   .........  Mrs. Biggert.....  ........  ........  .........
Mr. Capuano....................  ........        X   .........  Mr. Shays........  ........        X   .........
Mr. Hinojosa...................  ........  ........  .........  Mr. Miller.......        X   ........  .........
Mr. Clay.......................  ........        X   .........  Mrs. Capito......        X   ........  .........
Mrs. McCarthy..................  ........        X   .........  Mr. Feeney.......        X   ........  .........
Mr. Baca.......................  ........        X   .........  Mr. Hensarling...        X   ........  .........
Mr. Lynch......................  ........        X   .........  Mr. Garrett (NJ).        X   ........  .........
Mr. Miller (NC)................  ........        X   .........  Ms. Brown-Waite..        X   ........  .........
Mr. Scott......................  ........        X   .........  Mr. Barrett (SC).        X   ........  .........
Mr. Green......................  ........        X   .........  Mr. Gerlach......        X   ........  .........
Mr. Cleaver....................  ........        X   .........  Mr. Pearce.......        X   ........  .........
Ms. Bean.......................  ........        X   .........  Mr. Neugebauer...        X   ........  .........
Ms. Moore (WI).................  ........        X   .........  Mr. Price (GA)...        X   ........  .........
Mr. Davis (TN).................  ........        X   .........  Mr. Davis........        X   ........  .........
Mr. Hodes......................  ........        X   .........  Mr. McHenry......        X   ........  .........
Mr. Ellison....................  ........        X   .........  Mr. Campbell.....        X   ........  .........
Mr. Klein......................  ........        X   .........  Mr. Putnam.......        X   ........  .........
Mr. Mahoney (FL)...............  ........        X   .........  Mr. Bachmann.....        X   ........  .........
Mr. Wilson.....................  ........        X   .........  Mr. Roskam.......        X   ........  .........
Mr. Perlmutter.................  ........        X   .........  Mr. Marchant.....        X   ........  .........
Mr. Murphy.....................  ........        X   .........  Mr. McCotter.....        X   ........  .........
Mr. Donnelly...................  ........        X   .........  Mr. McCarthy.....        X   ........  .........
Mr. Wexler.....................  ........        X   .........  Mr. Heller.......        X   ........  .........
Mr. Marshall...................  ........        X   .........
Mr. Boren......................  ........        X   .........
Mr. Foster.....................  ........        X   .........
Mr. Carson.....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    During the consideration of the bill, the following 
amendments were also considered:
    An amendment by Mrs. Bean and Mr. McCarthy (CA), no. 1, 
regarding ineligibility for fraud conviction, was AGREED TO by 
voice vote.
    An amendment by Mr. Frank, no. 2, regarding flexible 
underwriting criteria, was AGREED TO by voice vote.
    An amendment by Ms. Bean, no. 3, regarding exit premium 
modifications, was AGREED TO by voice vote.
    An amendment by Mr. Moore (KS) and Mr. Shays, no. 4, 
regarding verification of income of mortgagor, was AGREED TO by 
voice vote.
    An amendment by Mrs. Biggert and Mr. LaTourette, no. 6, 
regarding housing counseling, was AGREED TO by voice vote.
    An amendment by Mrs. Capito, no. 7, regarding a temporary 
increase in maximum loan guaranty amount for certain housing 
loans, was AGREED TO by voice vote.
    An amendment by Mr. Mahoney, no. 8, regarding counseling 
priority, was AGREED TO by voice vote.
    An amendment by Mr. Watt, Ms. Velazquez and Mr. Green, no. 
10, regarding distribution of funds by the neighborhood 
Reinvestment Corporation, as amended by the substitute 
amendment offered by Mr. Frank, was AGREED TO by voice vote. An 
amendment offered by Mr. Price, no. 10c, to the amendment by 
Mr. Watt was AGREED TO agreed to by voice vote.
    An amendment by Mr. Miller (CA), no. 11, relating to a 
study of possible accounting revisions relating to property at 
risk of foreclosure, was AGREED TO by voice vote.
    An amendment by Mr. Carson, no. 12, regarding programs with 
history of outreach, was AGREED TO by voice vote.
    An amendment by Mr. Neugebauer, no. 13, regarding Inspector 
general audit of loss mitigation counseling, was AGREED TO by 
voice vote.
    An amendment by Mr. Hensarling, no. 14, regarding borrower 
certification, as amended by the amendment by Mr. Frank, no. 
14a, was AGREED TO by voice vote.
    A point of order that the amendment by Ms. Moore (WI), no. 
15, regarding funding for emergency food and shelter, was not 
germane was SUSTAINED.
    An amendment by Mr. Kanjorski and Mrs. Biggert, no. 16, 
regarding appraisal standards was AGREED TO by voice vote.
    An amendment by Mr. Meeks, no. 18, regarding a General 
Accountability Office study of credit markets, was AGREED TO by 
voice vote.
    An amendment by Mr. Miller (NC), no. 20, regarding mortgage 
servicer disclosure, was OFFERED AND WITHDRAWN.
    An amendment by Mr. Hensarling, no. 21, regarding 
demonstrated ability for responsible homeownership, was NOT 
AGREED TO by voice vote.
    An amendment by Mr. Baca and Mrs. McCarthy (NY), no. 23, 
regarding in person counseling outreach, was AGREED TO by voice 
vote.
    An amendment by Mr. Garrett (NJ), no. 31, regarding shared 
risk, was NOT AGREED TO by voice vote.
    An amendment by Mr. Neugebauer, no. 32, regarding debt to 
income ratio, was NOT AGREED TO by voice vote.
    An amendment by Mr. McHenry, no. 34, regarding 
certification of only residence, was AGREED TO by voice vote.
    An amendment by Mr. Price (GA), no. 35, striking legal 
counsel- ing assistance, was OFFERED and WITHDRAWN.
    An amendment by Mr. Price (GA), no. 36, regarding veterans 
counseling, was OFFERED and WITHDRAWN. An amendment by 
Mr.Frank, no. 37, to the amendment was thereby withdrawn.
    An amendment by Mr. McHenry, no. 38 regarding disclosure, 
was AGREED TO by voice vote, as modified.
    An amendment by Mr. Hensarling, no. 39 regarding the 
current borrower debt to income ratio, was AGREED TO by voice 
vote.
    An amendment by Mrs. Biggert and Mr. LaTourette, no. 40, 
authorizing appropriations to combat mortgage fraud, was AGREED 
TO by voice vote.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held hearings and 
made findings that are reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    H.R. 5830 is intended to create a voluntary Federal Housing 
Administration (FHA) program that provides mortgage refinancing 
assistance to allow families to stay in their homes, protect 
neighborhoods, and help stabilize the housing market. H.R. 5830 
seeks to stem the rise in mortgage foreclosures by allowing FHA 
to insure and guarantee refinanced mortgages that have been 
significantly written down by mortgage holders and lenders. 
H.R. 5830 would permit FHA to provide up to $300 billion in new 
guarantees to help refinance at-risk borrowers into viable 
mortgages. In exchange for the acceptance of a substantial 
write-down of principal, the existing lender or mortgage holder 
would receive a short payment from the proceeds of a new FHA 
loan if the restructured loan would result in terms that the 
borrower can reasonably be expected to pay. The existing lender 
or mortgage holder would have a cash payment and no further 
credit exposure to the borrower.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 2, 2008.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5830, the FHA 
Housing Stabilization and Homeownership Retention Act of 2008.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Chad Chirico.
            Sincerely,
                                         Robert A. Sunshine
                                   (For Peter R. Orszag, Director).
    Enclosure.

H.R. 5830--FHA Housing Stabilization and Homeownership Retention Act of 
        2008

    Summary: CBO estimates that implementing this legislation 
would cost about $2.7 billion over the 2008-2013 period, 
assuming future appropriation actions consistent with the bill. 
Of that amount, about $1.7 billion would be needed for the 
estimated subsidy cost of insuring mortgages with a value of 
about $85 billion in a proposed new Federal Housing 
Administration (FHA) mortgage guarantee program.
    H.R. 5830 would authorize--for up to four years--a new 
mortgage guarantee program under FHA that would allow certain 
at-risk borrowers to refinance their mortgages after the 
mortgage holder (lender or servicer) agrees to a write-down of 
the existing loan (that is, a reduction in the amount of loan 
principal). This new program would be established and overseen 
by the Refinance Program Oversight Board (Oversight Board), 
also established under this legislation. The bill would 
authorize the appropriation of $720 million over the 2008-2009 
period for administrative support associated with this 
newprogram and to provide financial counseling services for 
certain borrowers.
    In addition, the legislation would establish an Office of 
Housing Counseling within the Department of Housing and Urban 
Development (HUD) and authorize the appropriation of $183 
million over the 2008-2011 period for grants to states, local 
governments, and nonprofit organizations to support counseling 
services and a public service campaign to publicize financial 
counseling for home buyers, homeowners, and renters. H.R. 5830 
also would authorize the appropriation of $32 million over the 
2008-2012 period for the Department of Justice (DOJ) to support 
efforts to combat mortgage fraud.
    Finally, H.R. 5830 would increase by up to 75 percent the 
maximum guarantee that the Department of Veterans Affairs could 
provide to lenders who make loans to qualified veterans. 
Enacting that provision would reduce direct spending by $1 
million in 2008. (The bill would not affect revenues.)
    H.R. 5830 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 5830 is shown in the following table. 
The costs of this legislation fall within budget functions 370 
(mortgage and housing credit), 700 (veterans benefits and 
services), and 750 (administration of justice).

----------------------------------------------------------------------------------------------------------------
                                                                     By fiscal year, in millions of dollars--
                                                                 -----------------------------------------------
                                                                   2008    2009    2010    2011    2012    2013
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Homeownership Retention Loan Guarantee Program:
    Estimated Authorization Level...............................     174     599     447     292     190       0
    Estimated Outlays...........................................     157     556     462     307     201      19
FHA Administrative Support and Counseling Services:
    Authorization Level.........................................     360     360       0       0       0       0
    Estimated Outlays...........................................      53     216     235     108      72      36
HUD Administrative Support for Office of Housing Counseling,
 Grants, and Public Service Campaign:
    Estimated Authorization Level...............................      61      61      61      61      16      16
    Estimated Outlays...........................................      11      52      61      61      56      23
Funding for the Department of Justice:
    Authorization Level.........................................       4       7       7       7       7       0
    Estimated Outlays...........................................       3       7       7       7       7       1
    Total Changes:
        Estimated Authorization Level...........................     599   1,027     515     360     213      16
        Estimated Outlays.......................................     224     831     765     483     336      79

                                           CHANGES IN DIRECT SPENDING

Temporary Increase in Loan Guarantee Amount for Veterans Housing
 Loans:
    Estimated Authorization Level...............................      -1       *       0       0       0       0
    Estimated Outlays...........................................      -1       *       0       0       0      0
----------------------------------------------------------------------------------------------------------------
Note: * = between -$500,000 and 0.

    Basis of estimate: For this estimate, we assume that the 
bill will be enacted by June 1, 2008, that a supplemental 
appropriation will be provided during 2008 to operate the 
program, and that the new loan-guarantee program would operate 
for four years.
    The bill's cost would stem mostly from the new FHA program 
and the authorized administrative support and loan counseling 
activities, subject to appropriation of the necessary funds. 
CBO estimates that the new loan guarantee program would cost 
$1.7 billion over the 2008-2013 period, while the 
administrative support and counseling would cost $720 million 
over that period. Other discretionary costs for implementing 
the bill would total about $296 million over the 2008-2013 
period. The Congress could choose to provide a larger or 
smaller share of the program's multiyear cost in a 2008 
supplemental appropriation than CBO has displayed in this 
estimate.
    CBO estimates that under the new FHA loan-guarantee 
program, FHA would insure about 500,000 loans over the 2008-
2013 period with an estimated average subsidy cost of about 2 
percent of the loan principal. Assuming an average loan amount 
of $170,000 (after write-down of existing mortgages), we 
estimate that implementing H.R. 5830 would cost about $1.7 
billion over the 2008-2013 period to pay for the estimated 
subsidy cost of the new program.

Features of the proposed Homeownership Retention Loan Guarantee Program

    The Oversight Board established by H.R. 5830 would include 
the Secretary of the Treasury, the Secretary of HUD, and the 
Chairman of the Board of Governors of the Federal Reserve 
System (Federal Reserve). It would establish operational 
procedures, including underwriting standards for mortgages, and 
it would oversee the new loan-guarantee program.
    The proposed program would allow certain borrowers, who are 
at risk of defaulting on their mortgages, to refinance their 
home loans through a private lender with an FHA loan guarantee. 
To qualify for the program, the existing loans must be for an 
owner-occupied principal residence, have been originated on or 
before December 31, 2007, and meet other conditions specified 
in the bill.
    Under the new program, the participating mortgage holder 
must agree to a loan refinancing arrangement that brings the 
loan-to-value (LTV) ratio on the new FHA-insured loan to no 
greater than 90 percent of the property's current appraised 
value. That change would result in a substantial reduction in 
the payment owed by the borrower each month. (The LTV ratio 
indicates how much equity a borrower initially has in the 
home--in this case, no less than 10 percent.) In addition to 
forgiving a portion on the debt of the existing loan, the 
mortgage holder would have to pay two fees: 3 percent of the 
original insured loan amount would be paid to FHA and not more 
than 2 percent of the original insured loan amount would be 
paid to cover origination costs and other closing costs for the 
new loan. In effect, the existing mortgage holder would take at 
least a 15 percent write-down on the value of the existing 
mortgage, and thus receive no more than 85 percent of the 
property's current value, after fees are taken into account.
    In addition, the new loan would carry a fixed interest rate 
and be subject to the loan limits in place for FHA's single-
family program at the time of the bill's enactment. This 
legislation also would require FHA to charge the borrower an 
annual fee of 1.5 percent of the remaining insured principal 
balance each year. Furthermore, the program would provide that, 
upon sale, refinancing, or other disposition of the residence, 
the borrower would pay to FHA the greater of a fee equal to 3 
percent of the original insured loan amount or a declining 
percentage of any net proceeds realized, including any 
appreciation in the home's value. The percentage would start at 
100 percent and reach 50 percent in the fourth year of the term 
of the new loan, and it would remain at that level for the 
duration of the loan.
    The budgetary impact of the new loan program depends on how 
many loans would be refinanced under this voluntary program and 
the likelihood that borrowers would default on their refinanced 
mortgages.

Demand for the Homeownership Retention Loan Guarantee Program

    Since the end of the unusual boom in homeownership and 
housing prices from 2003 to early 2006, delinquencies and 
foreclosures on mortgages have risen, particularly on subprime 
loans and alt-A loans. (Subprime loans are made to borrowers 
with low credit scores or other impairments to their credit 
histories. Alt-A loans are loans often made on the basis of 
little or no documentation of the borrower's income and may 
include low-downpayment loans, loans that are not for owner's 
principal residence, interest-only loans, and loans whose 
balances rise over time.) Because economic activity has slowed 
and house prices continue to decline in many areas of the 
United States, CBO expects that delinquencies and foreclosures 
on mortgage loans will continue to rise in the near term; in 
places where house prices have declined a great deal, some 
borrowers whose loan amount exceeds the value of their home may 
have little incentive to remain current on their loans.\1\
---------------------------------------------------------------------------
    \1\ For additional details on the state of the nation's housing 
market, see: Congressional Budget Office, Policy Options for the 
Housing and Financial Markets, CBO Paper (April 2008).
---------------------------------------------------------------------------
    Because use of the program is contingent on the voluntary 
participation of both lenders and borrowers, demand for this 
program to refinance qualifying mortgages under this 
legislation is uncertain. Furthermore, several factors would 
influence whether lenders and borrowers would perceive the new 
program as their best option.
    Over the next four years, CBO estimates that about 500,000 
borrowers would refinance troubled loans worth about $85 
billion under this new program. The basis for this estimate of 
program volume is described below.
    Number of Foreclosure Proceedings. Based on information 
from the Federal Reserve and mortgage industry data, CBO 
estimates that there are about 11 million subprime and alt-A 
mortgages outstanding, with a face value of over $2 trillion. 
Of those 11 million loans, we estimate that about 9 million are 
for owner-occupied houses.
    CBO estimates that about 2.8 million borrowers with those 
loans will have foreclosure proceedings initiated against them 
at some point over the next four years. That estimate is tied 
to the historic performance of alt-A and sub-prime mortgage 
loans but adjusted for current macroeconomic conditions. 
Roughly 10-15 percent of those loans would enter foreclosure 
proceedings under more favorable conditions. However, given 
CBO's projections of house prices, interest rates, employment, 
and other factors, this rate was increased to about 30 percent.
    While many of those 2.8 million loans that are estimated to 
enter the foreclosure process could be eligible for an FHA 
guarantee of a refinanced loan under this legislation, most 
would not be refinanced under the proposed program for several 
reasons.
    Second Lien Holders. According to most mortgage industry 
participants that CBO consulted, the biggest impediment to the 
use of the proposed program is that participation is 
conditioned on the release of all existing liens on the loan. 
Second liens are very common for subprime and alt-A financing; 
based on information from loan servicers, CBO estimates that 40 
percent of such loans carry second liens. Because first and 
second lien holders may have conflicting financial incentives, 
the opportunities for joint consent can be limited. That is, 
second lien holders may prefer to retain their existing loans 
with the expectation that borrowers' repayments will be greater 
in the future. In those instances, modifying the first mortgage 
outside of the proposed program may be more consistent with the 
second lien holder's interests. The intersection of willing 
first lien holders and willing second lien holders is more 
likely to occur when foreclosure is perceived by all parties to 
be truly imminent. Currently, about 40 percent of borrowers 
entering the foreclosure process actually lose their homes 
through a foreclosure sale.
    This legislation would give the Oversight Board the 
authority to implement certain program features aimed at 
enticing second lien holders to voluntarily release their 
liens. One option would require the first lien holder to 
provide some amount of compensation to the second lien holder, 
based on a formula developed by the Oversight Board. What 
approach the Oversight Board would choose and ultimately how 
successful any approach would be is uncertain. Based on 
information from industry representatives, CBO estimates that 
about 25 percent of the loans with second liens could be 
refinanced under this new program. As home prices recover, 
however, second lien holders' incentive to retain their current 
position with the loans will increase. Accordingly, CBO 
estimates that in later years, about 20 percent of loans with 
second liens could be refinanced under the new program. 
Reducing the pool of potential participants because second 
liens would remain an impediment to program participation 
results in about 1.9 million loans that might be affected by 
the new program.
    Adjustment for Other Factors. Many borrowers who would 
otherwise be eligible for this program would not participate 
because servicers will not be able to contact some borrowers 
and some borrowers will not be able to avoid foreclosure 
because they have experienced a significant event, such as job 
loss, illness, divorce, or death. Reducing the pool of 
potential participants for those factors leaves about 1.4 
million borrowers that could seek the new loan guarantees.
    Participation by Mortgage Holders and Borrowers. CBO 
adjusted this eligible population of about 1.4 million 
borrowers to reflect expected levels of participation by 
mortgage holders and borrowers. Typically, much less than 100 
percent of those eligible actually participate in federal 
benefit programs. Moreover, many factors would influence 
participation in the new program, though ultimately, the 
intersection of interests of both the mortgage holders and 
borrowers would determine the amount of participation.
    Mortgage holders will evaluate loans that are eligible for 
the new FHA program and determine if the program would provide 
a better return than modifying the loans on their own, despite 
the risk of default. They will also evaluate whether the 
present value of the proceeds stemming from a modified loan 
under the new program is greater than or less than the value of 
proceeds from a foreclosure sale. Expectations regarding trends 
in house prices will greatly affect such calculations. Because 
mortgage holders may use different models to project future 
house prices, CBO expects that the behavioral responses by 
mortgage holders to the new program will vary considerably.
    Borrowers also would have to decide whether participating 
in the program is a favorable option. In particular, borrowers 
would have to evaluate the profit-sharing provisions under the 
program and determine if forgoing some future profits on their 
homes is an acceptable arrangement even if foreclosure on their 
existing loans is the only alternative. Furthermore, some of 
the riskier borrowers with higher ratios of debt-to-income 
would be required to make six timely payments on the loan 
before being guaranteed by FHA; invariably, some of those 
borrowers would be disqualified from participating in the new 
program.
    CBO estimates that fewer than 40 percent of the 1.4 million 
eligible loans would be refinanced under the new program. 
Following a reduction in the principal amount of those loans to 
make them affordable, CBO estimates that approximately 500,000 
loans would be guaranteed under this legislation with an 
average loan amount of $170,000 each. Thus, CBO estimates that 
FHA would require about $85 billion in loan commitment 
authority over the next four years to implement the program. 
The legislation would authorize FHA to provide up to $300 
billion in loan guarantees under the new program.

Subsidy cost of the new FHA Loan Guarantee Program

    Budgeting procedures for federal credit programs require 
that funds must be appropriated in advance to cover the 
estimated subsidy cost of loan guarantees on a present-value 
basis. CBO estimates that the new program would have a subsidy 
rate of about 2 percent of the loan value. This estimated 
subsidy rate assumes that the cumulative claims rate (default) 
for the program would be about 35 percent and that recoveries 
on defaulted mortgages would be about 60 percent of the 
outstanding loan amount. Those rates reflect CBO's view that 
mortgage holders would have an incentive to direct their 
highest-risk loans to the program, and are based on the 
expectation that the underwriting standards established for the 
new program would be less restrictive than those currently in 
place for FHA's single-family loan-guarantee program, thereby 
allowing FHA to insure loans with a greater risk of default. 
More-restrictive underwriting standards would lower the subsidy 
cost of the program but at the expense of lowering the number 
of borrowers able to participate.
    Using an estimated subsidy rate of 2 percent and our 
estimate that demand for loan guarantees would equal $85 
billion over the next four years, CBO estimates that 
implementing the new loan-guarantee program would cost $1.7 
billion over the 2008-2013 period, subject to appropriation of 
the necessary amounts.
    The Government National Mortgage Association (GNMA) is 
responsible for guaranteeing securities backed by pools of 
mortgages insured by the federal government. In exchange for a 
fee charged to lenders or issuers of the securities, GNMA 
guarantees the timely payments of scheduled principal and 
interest due on the pooled mortgages that back those 
securities. Enacting this legislation would require GNMA to 
guarantee securities backed by pools of the homeownership 
retention loans in an amount not to exceed $300 billion. CBO 
estimates that most of new federal loan guarantees made under 
this legislation would be included in GNMA's Mortgage-Backed 
Securities (MBS) program. CBO estimates that the subsidy rate 
for those securities would be close to zero. Thus, we estimate 
that implementing the MBS program under this legislation would 
result in a cost or savings of less than $500,000 a year over 
the 2008-2013 period, assuming enactment of appropriation laws 
necessary to implement the program.

Administrative support for the Homeownership Retention Program and 
        funding for counseling activities

    H.R. 5830 would specifically authorize the appropriation of 
$720 million over the 2008-2009 period to pay FHA's 
administrative expenses associated with implementing the new 
loan-guarantee program and to support counseling and legal aid 
for certain borrowers. CBO estimates that outlays would total 
$720 million over the 2008-2013 period.

Public Service Campaign, grants for Housing Counseling, and 
        administrative support for the Office of Counseling

    This legislation would establish the Office of Housing 
Counseling within HUD to support various activities relating to 
homeownership and rental housing counseling. Section 203 would 
authorize the appropriation of $3 million over the 2008-2010 
period to support a national campaign to publicize the 
existence of counseling services for home buyers, homeowners, 
and renters. In addition, section 204 would authorize the 
appropriation of $45 million annually over the 2008-2011 period 
to provide grants to states, local governments, and nonprofit 
organizations to support counseling services. Based on 
information from HUD, CBO expects that funds for additional 
personnel, contractors, and information technology would be 
required to run the Office of Housing Counseling. CBO estimates 
that such support would cost $81 million over the 2008-2013 
period. In total, CBO estimates that implementing those 
provisions would cost $264 million over the 2008-2013 period, 
assuming appropriation of the necessary amounts.

Funding for the Department of Justice

    This legislation would specifically authorize the 
appropriation of $32 million over the 2008-2012 period for DOJ 
to support efforts to combat mortgage fraud. Most of this 
funding would be used to hire additional agents of the Federal 
Bureau of Investigation and additional prosecutors within the 
Offices of the United States Attorneys. Assuming that 
appropriations would be almost spread evenly over fiscal years 
2008 through 2012, CBO estimates that enacting those provisions 
would cost $32 million over the 2008-2013 period.

Temporary Increase in Loan Guarantee Amount for Veterans Housing Loans

    Section 104 would increase by up to 75 percent the maximum 
guarantee that VA could provide to lenders who make housing 
loans to qualified veterans. CBO estimates that the authority, 
which expires on December 31, 2008, would result in a small 
increase in the number of loans guaranteed by VA. Receipts from 
fees that the department charges for most of the loans it 
guarantees exceed its outlays for guarantee payments on 
defaulting loans. Therefore, the estimated subsidy cost is 
negative (-0.37 percent) and the additional loans that would be 
guaranteed under this authority would increase net receipts--by 
about $1 million in 2008 and less than $500,000 in 2009--CBO 
estimates.

Revenues

    Section 102 of the bill would establish civil penalties 
(which are recorded in the budget as revenues) for certain 
violations related to real estate appraisals by interested 
parties in connection to the new loan guarantee program. CBO 
estimates that any increase in revenues resulting from those 
civil penalties would not be significant.
    Sections 103 and 105 of the bill would require the Federal 
Reserve to conduct a study on the need for an auction or bulk 
refinancing mechanism to facilitate the refinancing of existing 
residential mortgages that are at risk of foreclosure and a 
study on the accounting standards applicable to depository 
institutions with respect to their residential mortgages that 
are at risk of foreclosure. Based on information from the 
Federal Reserve, CBO expects those studies would have no 
significant effect on the agency's workload or budget.
    Intergovernmental and private-sector impact: H.R. 5830 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would benefit state, local, and 
tribal governments by authorizing grants to support housing 
programs.
    Estimate prepared by: Federal costs: Chad Chirico, Susanne 
S. Mehlman, Mark Hadley, Damien Moore, and David Newman; Impact 
on state, local, and tribal governments: Elizabeth Cove; Impact 
on the private sector: Jacob Kuipers.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
general welfare of the United States) and clause 3 (relating to 
the power to regulate interstate commerce).

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 5830 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

             Section-by-Section Analysis of the Legislation


Section 1. Short title and table of contents

    This section establishes the short title of the bill, the 
``FHA Housing Stabilization and Homeownership Retention Act of 
2008'' (Act) and sets forth the table of contents.

                    TITLE I--HOMEOWNERSHIP RETENTION

Section 101. Purposes

    This section provides the purposes of this title.

Section 102. Insurance of Homeownership Retention Mortgages

    (a) Mortgage Insurance Program. This subsection amends 
Title II of the National Housing Act (NHA) by adding a new 
section 257. A specific description of section 257 is set forth 
below.
            NHA Section 257(a). Oversight Board
    This subsection establishes the Refinance Program Oversight 
Board (Oversight Board), which will consist of the Secretary of 
the Treasury, the Secretary of HUD (Secretary), and the 
Chairman of the Board of Governors of the Federal Reserve 
System, and be responsible for establishing program and 
oversight requirements for the program. The Oversight Board may 
utilize the personnel, services, and facilities of Federal 
agencies with their consent and with or without reimbursing 
such agencies.
            NHA Section 257(b). Authority
    The Secretary will, subject to certain specified 
limitations, make commitments to insure and insure mortgages 
for the purpose of paying or prepaying outstanding obligations 
under existing mortgage(s) if the mortgage being insured meets 
the requirements set forth in this section, as established by 
the Oversight Board, and the requirements of section 203, 
except as modified by this section. The Oversight Board will 
establish program requirements and standards and the Secretary 
will implement such requirements and standards, which may be 
established or implemented through interim guidance and 
mortgage letters.
            NHA Section 257(c). Requirements
    To be eligible for insurance under this section, a mortgage 
must meet all of the following requirements:
    (1) Owner-Occupied Principal Residence Requirement. The 
residence securing the mortgage under this section will be 
occupied by the borrower as the principal residence, and the 
borrower will provide a certification to the originator of the 
mortgage that such residence is the only residence in which the 
borrower has any present ownership interest.
    (2) Lack of Capacity to Pay Existing Mortgage or Mortgages. 
Borrowers must certify that they did not intentionally default 
on existing mortgage(s) and did not knowingly or willfully and 
with actual knowledge furnished false information for obtaining 
the exiting mortgage(s). Borrowers must agree in writing to 
repay the FHA any direct financial benefit achieved from 
reduction of indebtedness on the existing mortgage(s) on the 
residence refinanced under the program derived from 
misrepresentations made in the required certification and 
documentation, subject to the discretion of the Oversight 
Board. Borrowers must have had a mortgage debt to income ratio 
greater than 35 percent as of March 1, 2008. This section may 
not be construed as affecting the responsibilities of any party 
to engage in any loan modification or other loss mitigation 
strategies to maximize value to investors as established by 
applicable contract. For example, the duty of a servicer to 
conduct a loan level review and make a determination that a 
borrower was eligible to be considered for refinancing before 
accepting a short sale remains unaffected by this Act.
    (3) Eligibility of Mortgages by Date of Origination. The 
existing senior mortgage must have been originated on or before 
December 31, 2007.
    (4) Maximum Loan-to-Value Ratio for New Loans. The mortgage 
being insured must have a principal obligation (including 
initial service charges, appraisal, inspection, and other fees 
approved by the Secretary and the premium set forth in 
subsection (e)(1)) not exceeding 90 percent of the current 
appraised value of the property.
    (5) Required Waiver of Prepayment Penalties and Fees. All 
prepayment penalties and all fees and penalties related to 
default or delinquency on all existing mortgage(s) will be 
waived or forgiven.
    (6) Required Loan Reduction.
    (A) Reduction of Indebtedness under Existing Senior 
Mortgage. The amount of indebtedness on the existing 
mortgage(s) will have been substantially reduced by such 
percentage as the Oversight Board or Secretary may require. 
Such reduction will be at least sufficient to (i) provide for 
refinancing of existing mortgage(s) in an amount not greater 
than 90 percent of the current appraised value of the property, 
(ii) pay the full amount of the single premium to be collected 
pursuant to subsection (e)(1) (which will be equal to 3 percent 
of the amount of the original insured principal obligation of 
the mortgage insured under this section), and (iii) pay the 
full amount of the loan origination fee and any other closing 
costs, not to exceed 2 percent of the amount of the original 
insured principal obligation of the mortgage insured under this 
section.
    (B) Extinguishment of Debt by Refinancing.
    (i) Required Agreement. All existing holders of mortgage 
liens on the property involved will agree to accept the 
proceeds of the insured loan as payment in full of all 
indebtedness under all existing mortgage(s) and all 
encumbrances related to such mortgage(s) will be removed. The 
Oversight Board may take actions necessary or appropriate to 
facilitate coordination and agreement between the holders of 
existing senior mortgage and any existing subordinate 
mortgages.
    (ii) Treatment of Multiple Mortgage Liens. In addition, the 
Oversight Board will adopt one of the following approaches for 
all mortgages or classes of mortgages as the Oversight Board 
may determine and may, from time to time, reconsider: (I) As a 
requirement for participating in the program, all existing lien 
holders will agree to not provide any payment to subordinate 
lien holders other than such payment according to a formula 
established by the Oversight Board, except the Oversight Board 
may establish a short period within which first and subordinate 
lien holders may negotiate to extinguish all subordinate liens 
for an amount different from that established by such formula; 
(II) The Oversight Board may require the borrower to agree to 
share a portion of any future equity in the mortgaged property 
with holders of existing subordinate mortgages in accordance 
with a formula for such shared equity established by the 
Oversight Board, except payments of such shared equity may be 
made only after the Secretary recovers all amounts owed to the 
Secretary with respect to such mortgage under the program.
    (iii) Formula. In determining and in any reconsideration of 
a formula for any payments to subordinate lien holders pursuant 
to clause (ii) above, the Oversight Board will take into 
consideration the current market value of such liens. In no 
case may a formula provide for the payment of more than 1 
percent of the current appraised value of the mortgaged 
property to a subordinate lien holder if the outstanding 
balance owed to more senior lien holders is equal to or exceeds 
such current appraised value.
    (iv) Voluntary Program. This clause clarifies that 
participation in the program is voluntary.
    (v) Source of Payments for Subordinate Loans. Any amounts 
paid to holders of any existing subordinate mortgages in 
connection with the origination and insurance of a mortgage 
under this section will derive only from the holder of the 
existing senior mortgage or, in case only of the shared equity 
approach under clause (ii)(II) above, the borrower.
    (7) Required Reduction of Debt Service. The debt service 
payments under the new mortgage will be in an amount 
substantially reduced from those under the existing 
mortgage(s).
    (8) Financial Recovery to Federal Government Through Exit 
Premium.
    (A) Subordinate Lien. The mortgage will provide that the 
Secretary will retain a second lien on the property to secure 
the repayment of the amount due under subparagraph (D) below.
    (B) No Interest or Payment during Mortgage. Such second 
lien will not bear interest and will not be repayable to the 
Secretary except as provided in subparagraph (D) below.
    (C) Net Proceeds Available for Exit Premium. Upon the sale, 
refinancing, or other disposition of the residence covered by a 
mortgage insured under this section, any proceeds that remain 
after deducting the remaining insured principal balance of the 
mortgage will be available to meet the obligation under 
subparagraph (D) below.
    (D) Exit Premium. Upon any refinancing of the mortgage in- 
sured under this section or any sale or disposition of the 
residence covered by the mortgage, the Secretary will, subject 
to availability of sufficient net proceeds, receive the greater 
of (i) 3 percent of the amount of the original insured 
principal obligation of the mortgage, or (ii) a declining 
percentage of the net proceeds described in subparagraph (C) 
above, from 100 percent in year one to 50 percent in year four 
and thereafter, except that such percentage of proceeds will be 
reduced by all fees the Secretary has collected prior to such 
refinancing, sale or disposition.
    (E) Authority to Prohibit New Second Liens. The Oversight 
Board will prohibit borrowers from granting a new second lien 
on the mortgaged property during the first five years of the 
term of the new mortgage except as the Oversight Board 
determines necessary to ensure the appropriate maintenance of 
the mortgaged property.
    (9) Documentation and Verification of Income. In complying 
with the FHA underwriting requirements under the program, the 
FHA lender will document and verify the income of the borrower 
by procuring the two most recent IRS tax returns of the 
borrower in accordance with procedures and standards 
established by the Oversight Board or the Secretary.
    (10) Fixed Rate Mortgage. The mortgage insured under this 
section will bear interest at a single fixed rate for the 
entire term of the mortgage.
    (11) Maximum Loan Amount. The mortgage being insured under 
this section will involve a principal obligation in an amount 
that does not exceed the limitation that would be allowable 
under the terms of the Economic Stimulus Act of 2008. Such 
limitation will apply for the purposes of this Act until the 
termination of the program under subsection (n).
    (12) Ineligibility for Fraud Conviction. The borrower 
cannot have been convicted under Federal or State law for 
mortgage fraud during the 7 years prior to obtaining the new 
FHA loan.
    (13) Lender Review. The lender will conduct an electronic 
database search of the borrower's criminal history to determine 
if the borrower has had a conviction for fraud under paragraph 
(12), and may charge the borrower a reasonable fee not to 
exceed a maximum established by the Oversight Board. The 
Oversight Board will establish a procedure for the borrower to 
challenge the lender's determination.
    (14) Appraisals. Any appraisal conducted in connection with 
a mortgage insured under the program will be based on the 
current value of the property, conducted in accordance with 
specified title of the Financial Institutions Reform, Recovery, 
and Enforcement Act, completed by an appraiser who meets the 
competency requirements of the Uniform Standards of 
Professional Appraisal Practice, wholly consistent with FHA 
appraisal standards, practices, and procedures, and will comply 
with the appraisal independence requirements of subsection (g).
    (15) Statement of Loan Terms. The borrower will have been 
pro- vided a one-page disclosure form regarding the new FHA 
loan by the lender no later than three days after application 
for the mortgage. When completed by the lender, the form will 
set forth, in accordance with requirements that the Secretary 
will establish, a best possible estimate of the enumerated loan 
terms as specified in this paragraph.
            NHA Section 257(d). Flexible underwriting criteria
    The Oversight Board will establish, and the Secretary 
acting on behalf of the Oversight Board will implement, 
underwriting stan- dards for mortgages insured under this 
section that ensure that borrowers have a reasonable 
expectation of repaying the mortgage, taking into consideration 
the borrower's income, assets, liabilities, payment history, 
and other applicable criteria but not resulting in a denial 
solely on the basis of the borrower's current FICO or other 
credit scores, any delinquency or default under the existing 
mortgage(s), or any case filed under title 11 of the U.S. Code 
by the borrower. Subject to such underwriting criteria, the 
Oversight Board will permit a total debt-to-income ratio of up 
to 43 percent. As an exception, subject to such underwriting 
criteria and any additional requirements the Oversight Board 
consider appropriate, the Oversight Board will permit a total 
debt-to-income ratio of more than 43 percent but not more than 
50 percent if the borrower has made not less than six months of 
payments in an amount not less than the amount of the monthly 
payment due under the mortgage to be insured under this 
section. The holder of the existing senior mortgage will 
exercise forbearance with respect to such mortgage during the 
period in which such payments are made. In computing the 
borrower's total debt-to-income ratio for purposes of mortgage 
qualification under the underwriting standards established 
pursuant to this section, if the borrower is a debtor under 
chapter 13 of title 11, U.S. Code, payments on recurring debts 
other than housing expenses will be based on the amounts being 
paid on such debts under the borrower's confirmed plan under 
such chapter, and if the borrower is a debtor under chapter 7 
of such title, recurring debts that are to be discharged will 
not be considered. The Oversight Board may alter the ratios for 
a particular class of borrowers subject to such requirements as 
the Oversight Board determines is necessary and appropriate to 
fulfill the purposes of this Act. The Oversight Board will 
require the underwriter of the insured loan to provide such 
representations and warranties as the Oversight Board considers 
necessary or appropriate for the Secretary to enforce 
compliance with all underwriting and appraisal standards of the 
program.
            NHA Section 257(e). Premiums
    The Oversight Board will establish and the Secretary will 
collect the following premiums: (1) a single premium payment at 
the time of insurance equal to 3 percent of the amount of the 
original insured principal obligation of the mortgage, which 
will be paid from the proceeds of the mortgage being insured 
under this section through the reduction of the amount of 
indebtedness on the existing senior mortgage required under 
subsection (c)(6)(A), (2) annual premium payments equal to 1.5 
percent of the remaining insured principal balance of the 
mortgage, and (3) an exit premium determined under subsection 
(c)(8), but no less than 3 percent of the original insured 
principal obligation of the mortgage subject only to the 
availability of sufficient net proceeds.
            NHA Section 257(f). Origination fees and mortgage rate
    The Oversight Board will establish and the Secretary will 
implement a reasonable limitation on origination fees for 
mortgages insured under this section and will establish 
procedures to ensure interest rates commensurate with market 
rates.
            NHA Section 257(g). Appraisal independence
    No mortgage lender, mortgage broker, mortgage banker, real 
estate broker, appraisal management company, employee of an 
appraisal management company, or any other person with an 
interest in a real estate transaction involving an appraisal in 
connection with a mortgage insured under the program will 
improperly influence or attempt to improperly influence a real 
estate appraisal sought in connection with the mortgage. This 
will not be construed to prohibit such person from asking an 
appraiser to consider additional, appropriate property 
information, provide further detail for the appraiser's value 
conclusion, or correct errors in the appraisal report. The 
Secretary may impose a civil money penalty for any knowing and 
material violation.
            NHA Section 257(h). Limitation on aggregate insurance 
                    authority
    The aggregate original principal obligation of all 
mortgages in- sured under this section may not exceed $300 
billion.
            NHA Section 257(i). Enhancement of FHA capacity
    Under the direction of the Oversight Board, the Secretary 
will take actions as may be necessary to (1) contract for 
establishment of underwriting criteria and other factors 
relating to eligibility for mortgages insured under this 
section, (2) contract for independent quality reviews of 
underwriting, including appraisal reviews and fraud detection, 
of mortgages insured under this section or pools of such 
mortgages, and (3) increase personnel of HUD as necessary to 
process or monitor the processing of mortgages insured under 
this section.
            NHA Section 257(j). Monitoring of underwriting risk
    (1) Monitoring of Designated Underwriters. The Oversight 
Board and the Secretary will monitor independent quality 
reviews as established under subsection (i)(2) to:
    (A) determine compliance of designated underwriters with 
underwriting standards;
    (B) determine rates of delinquency, claims rates, and loss 
rates of designated underwriters; and
    (C) terminate eligibility of designated underwriters that 
do not meet minimum performance standards as the Oversight 
Board may establish and the Secretary implements.
    (2) Reports by Oversight Board. The Oversight Board will 
submit monthly reports to the Congress identifying the progress 
of the program, which will contain the following:
    (A) The number of new mortgages insured under this section, 
including the location of the properties subject to such 
mortgages by census tract.
    (B) The aggregate principal obligation of new mortgages 
insured under this section.
    (C) The average amount by which the indebtedness on 
existing mortgages is reduced in accordance with subsection 
(c)(6).
    (D) The average amount by which the debt service payments 
on existing mortgages is reduced in accordance with subsection 
(c)(7).
    (E) The amount of premiums collected for insurance of mort- 
gages under this section.
    (F) The claim and loss rates for mortgages insured under 
this section.
    (G) The race, ethnicity, gender, and income of the 
mortgagors, aggregated by geographical areas at least as 
specific as census tracts, except where necessary to protect 
privacy of the borrower.
    (H) Any other information that the Oversight Board 
considers appropriate.
    (3) Report by Inspector General. The Inspector General of 
HUD will conduct an annual audit of the program to determine 
compliance with this section and program rules.
            NHA Section 257(k). GNMA commitment authority
    The Secretary will take actions as may be necessary to 
ensure that securities based on and backed by a trust or pool 
composed of mortgages insured under this section are available 
to be guaranteed by the Government National Mortgage 
Association (GNMA) as to the timely payment of principal and 
interest. The GNMA may enter into new commitments to issue 
guarantees of securities based on or backed by mortgages 
insured under this section, not exceeding $300 billion. This 
amount is in addition to any amount of authority to make new 
commitments to issue guarantees provided under any other 
provision of law.
            NHA Section 257(l). Special risk insurance fund
    The insurance of each mortgage under this section will be 
the obligation of the Special Risk Insurance Fund.
            NHA Section 257(m). Definitions
    This subsection establishes the definition of ``existing 
mortgage,'' ``existing senior mortgage,'' and ``existing 
subordinate mortgage.''
            NHA Section 257(n). Sunset
    The authority of the Secretary to make any new commitment 
to insure any mortgage under this section will terminate 2 
years after the date of the enactment of this Act. The 
Oversight Board may extend such authority not more than four 
times, except that each extension will be no more than six 
months and be effective only if the Oversight Board certifies 
the need for such extension in writing to the Congress and 
causes notice of such extension to be published in the Federal 
Register at least three months before the termination of the 
program.
            NHA Section 257(o). Authorization of appropriations
    (1) For fiscal years 2008 and 2009, this subsection 
provides $210 million for loss mitigation counseling for 
homeowners with grants to be administered through the 
Neighborhood Reinvestment Corporation (NRC), and requires NRC 
to give priority consideration for this funding to counseling 
entities that have a plan in place for making contact with or 
providing in-person counseling to defaulted borrowers. In 
addition, not less than 2 percent of the funds are to be used 
for identifying and notifying borrowers who are eligible for 
the counseling program. Preference will also be given to 
counseling programs with proven history of outreach within 
minority communities. Given the diversity of persons needing 
loss mitigation counseling, the Committee recognizes the 
importance in certain communities of providing such counseling 
in relevant languages.
    In addition, this subsection provides that not less than 15 
percent of the $210 million made available for loss mitigation 
counseling will be provided to counseling organizations that 
target minority and low-income homeowners or provide services 
in neighborhoods with high concentrations of such homeowners. 
This subsection also provides that some amount of the $210 
million made available for loss mitigation counseling be used 
for such counseling for veterans recently returning from active 
duty in the armed forces.
    The subsection further provides that $35 million of the 
$210 million of funds made available for loss mitigation 
counseling are to be used by the NRC to make grants to State 
and local legal organizations or attorneys with experience in 
home foreclosure or eviction law to provide legal assistance 
related to home ownership and foreclosure prevention; or to 
HUD-approved counseling intermediaries for the purpose of 
making such grants or contracting for such legal assistance. Of 
the $35 million, at least 60 percent will be allocated for 
legal assistance to low-income homeowners or tenants. The 
subsection provides that attorneys who receive these grants 
shall be capable of assisting homeowners in owner-occupied 
homes or tenants who live in homes with mortgages in default or 
subject to or at risk of foreclosure or eviction and who have 
legal issues that cannot be handled by counselors employed by 
NRC intermediaries. The NRC will give priority to State and 
local legal organizations and attorneys that provide legal 
assistance in the 100 metropolitan statistical areas with the 
highest foreclosure rates and that have the capacity to begin 
using the financial assistance within 90 days of receipt. The 
subsection also requires grantees to submit certain information 
to the NRC.
    (2) $150 million for FHA enhancement under subsection (i).
            NHA Section 257(p). Audit and report by Inspector General
    The Inspector General of HUD will conduct an audit of the 
program for loss mitigation counseling funded with amounts made 
available under subsection (o)(1) to determine compliance with 
such subsection. Not later than March 30, 2009, and every 
calendar quarter thereafter, the Inspector General will submit 
a report to the appropriate committees of Congress summarizing 
the activities of the Inspector General and the NRC and 
including such details as specified.
    (b) Special Risk Insurance Fund. This subsection amends 
section 238 of the NHA to include cross-references to the new 
section 257 created by this Act.

Section 103. Study of auction or bulk refinance program

    The Board of Governors of the Federal Reserve System (Board 
of Governors), in consultation with other members of the 
Oversight Board, will conduct a study of the need for and 
efficacy of an auction or bulk refinancing mechanism to 
facilitate refinancing of existing residential mortgages that 
are at risk for foreclosure into FHA-insured mortgages. The 
study will analyze certain factors as set forth in this 
section. The Board of Governors will submit a report regarding 
the results of the study to the Congress no later than 60 days 
after the date of the enactment of this Act.

Section 104. Temporary increase in maximum loan guaranty amount for 
        certain housing loans guaranteed by Secretary of Veterans 
        Affairs

    Certain housing loans guaranteed by Secretary of Veterans 
Affairs that are originated between the date of enactment of 
this Act and December 31, 2008 will have a maximum guaranty 
amount that is equal to 25 percent of the higher of (1) the 
limitation determined under section 305(a)(2) of the Federal 
Home Loan Mortgage Corporation Act for the calendar year in 
which the loan is originated for a single-family residence or 
(2) 125 percent of the area median price for a single-family 
residence, but in no case to exceed 175 percent of such 
limitation set forth in (1).

Section 105. Study of possible accounting revisions relating to 
        property at risk of foreclosure and the availability of credit 
        for refinancing home mortgages at risk of foreclosure

    The Board of Governors will conduct a study on mark-to-
market accounting standards applicable to depository 
institutions with respect to their residential mortgages that 
are at risk of foreclosure, the effects of such accounting 
standards and capital requirements on capacity to provide 
refinancing to at-risk borrowers during periods of market value 
declines and increased foreclosures, and the feasibility of 
modifications of such standards during periods of market 
fluctuation. The Board of Governors will submit a report with 
respect to the study to Congress no later than 90 days after 
the enactment of this Act.

Section 106. GAO study of the effect of tightening credit markets in 
        communities affected by the subprime mortgage foreclosure 
        crises and predatory lending on prospective first-time 
        homebuyers seeking mortgages

    The GAO will conduct a study to analyze the effects of 
tightening credit markets on prospective first-time home buyers 
in communities most detrimentally affected by subprime mortgage 
foreclosure crisis and predatory mortgage lending. The study 
will also analyze the adequacy of financial literacy outreach 
efforts by Federal agencies and whether funding levels are 
sufficient. A report of the study will be submitted to Congress 
no later than six months after the enactment of this Act.

                 TITLE II--OFFICE OF HOUSING COUNSELING

    This title amends the Department of Housing and Urban 
Development Act to establish within HUD an Office of Housing 
Counseling that will conduct activities relating to 
homeownership and rental housing counseling.

Section 201. Short title

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

Section 202. Establishment of Office of Housing Counseling

    This section establishes the Office of Housing Counseling 
under the Office of the Secretary, headed by a Director of 
Housing Counseling (Director) appointed by the Secretary. The 
Director will be responsible for all homeownership and rental 
housing counseling programs for HUD, and will establish, 
coordinate and administer all regulations, requirements, 
standards, and performance measures under the pro- grams that 
relate to housing counseling, homeownership counseling, 
mortgage-related counseling, and rental housing counseling. The 
Director will establish rules for (1) counseling procedures, 
(2) carrying out all other related functions, including 
establishing a toll-free number, (3) information booklets, (4) 
carrying out the certification of counseling service providers, 
(5) providing assistance in the provision of counseling 
services, (6) carrying out functions the Secretary deems 
appropriate with regard to unscrupulous lending practices in 
the home mortgage business, (7) support the advisory committee 
created under this section, (8) collaborate with community-
based organizations, and (9) provide for building capacity to 
provide housing counseling services in areas that lack 
sufficient services. The Secretary will appoint an advisory 
committee composed of no more than 12 individuals representing 
all aspects of the mortgage and real estate industry, including 
consumers. Advisory committee members appointed by the 
Secretary will serve 3-year terms, except that initially, four 
will be appointed for 1-year terms and four will be appointed 
for 2-year terms. The Secretary may reappoint members at his 
discretion. Members will not be paid, but may receive travel 
expenses. The advisory committee has no role in reviewing or 
awarding housing counseling grants. Counseling services will 
cover the entire process of homeownership, including 
refinancing and foreclosure.

Section 203. Counseling procedures

    This section directs the Secretary to establish, 
coordinate, and monitor all HUD counseling procedures, 
including requirements, standards, and performance measures 
that relate to homeownership and rental housing. 
``Homeownership counseling'' is defined as counseling related 
to homeownership and residential mortgage loans. ``Rental 
housing counseling'' is defined as counseling related to rental 
of residential property, which may include counseling regarding 
future homeownership opportunities and providing referral for 
renters and prospective renters to entities providing 
counseling. The Secretary, in conjunction with the advisory 
committee, will establish standards for materials and forms 
used by counseling service providers. The Secretary will 
provide for the certification of various computer software 
programs for consumers to use in evaluating different 
residential mortgage loan proposals. The mortgage software 
system will take into account (1) the consumer's financial 
situation and the cost of maintaining a home, including 
insurance, taxes, and utilities, (2) the amount of time the 
consumer expects to remain in the home or expected time to 
maturity of the loan, and (3) any other factors to assist the 
consumer in making choices during the loan application process. 
The certified software programs will be used to supplement, not 
replace, housing counseling, and the software programs 
initially will be used only in connection with the assistance 
of certified housing counselors. The Director will develop, 
implement, and conduct national public service multimedia 
campaigns to make potentially vulnerable consumers aware of the 
existence of homeownership counseling. Appropriations not to 
exceed $3 million are authorized for national public service 
multimedia campaigns for fiscal years 2008, 2009, and 2010. The 
Secretary will provide advice and technical assistance to 
States, units of local government, and non-profit organizations 
regarding provisions of counseling services.

Section 204. Grants for housing counseling assistance

    This section directs the Secretary to make financial 
assistance available to States, units of local government, and 
non-profit organizations providing homeownership or rental 
counseling. The Secretary will establish standards and 
guidelines for assistance eligibility. Appropriations of $45 
million are authorized for each of fiscal years 2008 through 
2011 for the operations of the Office of Housing Counseling; 
homeownership and rental counseling assistance grants; and the 
establishment of materials and forms standards, computer 
software certification, and the national public service 
multimedia campaigns created by this title.

Section 205. Requirements to use HUD-certified counselors under HUD 
        programs

    This section requires any homeownership counseling or 
rental housing counseling administered by HUD to be provided 
solely by organizations or counselors certified by the 
Secretary. The Secretary will take appropriate actions to 
ensure that individuals and organizations providing 
homeownership or rental housing counseling are aware of the 
certification requirements and standards.

Section 206. Study of defaults and foreclosures

    This section directs the Secretary to submit to Congress 
not later than 12 months after the enactment of this Act a 
preliminary report on the root causes of default and 
foreclosure of home loans and the role of escrow accounts in 
helping prime and nonprime borrowers to avoid defaults and 
foreclosures. No later than 24 months after the enactment of 
this Act, the Secretary will submit a final report regarding 
the results of the study, which will include any recommended 
legislation relating to the study and recommendations for best 
practices and for a process to identify populations that need 
counseling the most.

Section 207. Definitions for counseling-related programs

    This section provides definitions of ``nonprofit 
organization,'' ``State,'' and ``unit of general local 
government.''

Section 208. Updating and simplification of mortgage information 
        booklet

    This section directs the Secretary to prepare a booklet at 
least once every 5 years to help consumers applying for 
Federally related mortgage loans to understand the nature and 
costs of real estate settlement services. The Secretary must 
include specific topics in the information booklet in plain and 
understandable language, including explanation of (1) costs 
incident to real estate settlement or Federally related 
mortgage loan (including at a minimum balloon payments, 
prepayment penalties, and trade-off between closing costs and 
the interest rate over the life of the loan); (2) the uniform 
settlement statement; (3) unfair lending practices and 
unreasonable or unnecessary charges to be avoided by the 
prospective buyer with respect to a real estate settlement; (4) 
questions that the consumer should ask about a loan; (5) the 
right of rescission; (6) variable rate mortgages; (7) home 
equity line of credit; (8) the availability and the value of 
homeownership counseling services; (9) escrow accounts; (10) 
available choices for providers of incidental services; (11) 
the buyer's responsibilities, liabilities, and obligations; 
(12) appraisals; and (13) HUD brochure regarding loan fraud.

                  TITLE III--COMBATING MORTGAGE FRAUD

Section 301. Authorization of appropriations to combat mortgage fraud

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

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

NATIONAL HOUSING ACT

           *       *       *       *       *       *       *



TITLE II--MORTGAGE INSURANCE

           *       *       *       *       *       *       *



           payment of insurance--special risk insurance fund

      Sec. 238. (a)(1) Any mortgagee under a mortgage insured 
under section 235(i), 235(j)(4), 237, [or 243] 243, or 257 
shall be entitled to receive the benefits of the insurance as 
provided in section 204(a) with respect to mortgages insured 
under section 203. The provisions of subsections (b), (c), (d), 
(g), (j), and (k) of section 204 shall be applicable to 
mortgages insured under section 235(i), 235(j)(4), 237, [or 
243] 243, or 257, except that all references therein to the 
``Mutual Mortgage Insurance Fund'' shall be construed to refer 
to the ``Special Risk Insurance Fund'', and all references 
therein to section 203 shall be construed to refer to section 
235(i), 235(j)(4), 237, [or 243] 243, or 257, as may be 
appropriate.

           *       *       *       *       *       *       *

      (b) There is hereby created a Special Risk Insurance Fund 
(hereinafter referred to as the ``fund'') which shall be used 
by the Secretary as a revolving fund for carrying out the 
mortgage insurance obligations of sections 223(e), 233(a)(2), 
235, 236, 237, [and 243] 243, and 257, and the Secretary is 
hereby authorized to advance to the fund, at such times and in 
such amounts as he may determine to be necessary, a total sum 
of $20,000,000 from the General Insurance Fund established 
pursuant to the provisions of section 519. Such advance shall 
be repayable at such times and at such rates of interest as the 
Secretary deems appropriate. Premium charges, adjusted premium 
charges, inspection and other fees, service charges, and any 
other income received by the Secretary under sections 223(e), 
233(a)(2), 235, 236, and 237, together with all earnings on the 
assets of the fund, shall be credited to the fund. All payments 
made pursuant to claims of mortgagees with respect to mortgages 
insured under sections 233(a)(2), 235, 236, 237, [and 243] 243, 
and 257 or pursuant to section 223(e), cash adjustments, the 
principal of and interest paid on debentures which are the 
obligation of the fund, expenses incurred in connection with or 
as a consequence of the acquisition and disposal of property 
acquired under such sections, and all administrative expenses 
in connection with the mortgage insurance operations under such 
sections shall be paid out of the fund. Moneys in the fund not 
needed for current operations of the fund shall be deposited 
with the Treasurer of the United States to the credit of the 
fund or invested in bonds or obligations of, or in bonds or 
other obligations guaranteed by, the United States or any 
agency of the United States: Provided, That such moneys shall 
to the maximum extent feasible be invested in such bonds or 
other obligations the proceeds of which will be used to 
directly support the residential mortgage market. The 
Secretary, with the approval of the Secretary of the Treasury, 
may purchase in the open market debentures which are the 
obligation of the fund. Such purchases shall be made at a price 
which will provide an investment yield of not less than the 
yield obtained from other investments authorized by this 
section. Debentures so purchased shall be canceled and not 
reissued.

           *       *       *       *       *       *       *


SEC. 257. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

  (a) Oversight Board.--
          (1) Establishment.--There is hereby established the 
        Refinance Program Oversight Board (in this section 
        referred to as the ``Oversight Board'').
          (2) Membership.--The Oversight Board shall consist of 
        the following members or their designees:
                  (A) The Secretary of the Treasury.
                  (B) The Secretary of Housing and Urban 
                Development.
                  (C) The Chairman of the Board of Governors of 
                the Federal Reserve System.
          (3) No additional compensation.--Members of the 
        Oversight Board shall receive no additional pay by 
        reason of service on the Oversight Board.
          (4) Responsibilities.--The Oversight Board shall be 
        responsible for establishing program and oversight 
        requirements for the program under this section, which 
        shall include--
                  (A) detailed program requirements under 
                subsection (c);
                  (B) flexible underwriting criteria under 
                subsection (d);
                  (C) a mortgage premium structure under 
                subsection (e);
                  (D) a reasonable fee and rate limitation 
                under subsection (f);
                  (E) enhancement of FHA capacity under 
                subsection (i), including oversight of such 
                activities and personnel as may be contracted 
                for as provided therein;
                  (F) monitoring of underwriting risk under 
                subsection (j); and
                  (G) such additional requirements as may be 
                necessary and appropriate to oversee and 
                implement the program.
          (5) Use of resources.--In carrying out its functions 
        under this section, the Oversight Board may utilize, 
        with their consent and to the extent practical, the 
        personnel, services, and facilities of the Department 
        of the Treasury, the Department of Housing and Urban 
        Development, the Board of Governors of the Federal 
        Reserve System, the Federal Reserve Banks, and other 
        Federal agencies, with or without reimbursement 
        therefore.
  (b) Authority.--
          (1) In general.--The Secretary shall, subject only to 
        the absence of qualified requests for insurance under 
        this section and to the limitations under subsection 
        (h) of this section and section 531(a), make 
        commitments to insure and insure any mortgage covering 
        a 1- to 4-family residence that is made for the purpose 
        of paying or prepaying outstanding obligations under an 
        existing mortgage or mortgages on the residence if the 
        mortgage being insured under this section meets the 
        requirements of this section, as established by the 
        Oversight Board, and of section 203, except as modified 
        by this section.
          (2) Establishment and implementation of program 
        requirements.--The Oversight Board shall establish 
        program requirements and standards under this section 
        and the Secretary shall implement such requirements and 
        standards. The Oversight Board and the Secretary may 
        establish and implement any requirements or standards 
        through interim guidance and mortgagee letters.
  (c) Requirements.--To be eligible for insurance under this 
section, a mortgage shall comply with all of the following 
requirements:
          (1) Owner-occupied principal residence requirement.--
        The residence to be covered by the mortgage insured 
        under this section shall be occupied by the mortgagor 
        as the principal residence of the mortgagor and the 
        mortgagor shall provide a certification to the 
        originator of the mortgage that such residence to be 
        covered by the mortgage insured under this section is 
        the only residence in which the mortgagor has any 
        present ownership interest.
          (2) Lack of capacity to pay existing mortgage or 
        mortgages.--
                  (A) Borrower certification.--
                          (i) The mortgagor shall provide a 
                        certification to the originator of the 
                        mortgage that the mortgagor--
                                  (I) has not intentionally 
                                defaulted on the existing 
                                mortgage or mortgages; and
                                  (II) has not knowingly, or 
                                willfully and with actual 
                                knowledge furnished material 
                                information known to be false 
                                for the purpose of obtaining 
                                the existing mortgage or 
                                mortgages.
                          (ii) The mortgagor shall agree in 
                        writing that the mortgagor shall be 
                        liable to repay the FHA any direct 
                        financial benefit achieved from the 
                        reduction of indebtedness on the 
                        existing mortgage or mortgages on the 
                        residence refinanced under this section 
                        derived from misrepresentations made in 
                        the certifications and documentation 
                        required under this subparagraph, 
                        subject to the discretion of the 
                        Oversight Board.
                  (B) Current borrower debt-to-income ratio.--
                As of March 1, 2008, the mortgagor shall have 
                had a ratio of mortgage debt to income, taking 
                into consideration all existing mortgages at 
                such time, greater than 35 percent.
                  (C) Loss mitigation responsibilities.--This 
                section may not be construed to alter or in any 
                way affect the responsibilities of any party 
                (including the mortgage servicer) to engage in 
                any or all loan modification or other loss 
                mitigation strategies to maximize value to 
                investors as established by any applicable 
                contract.
          (3) Eligibility of mortgages by date of 
        origination.--The existing senior mortgage shall have 
        been originated on or before December 31, 2007.
          (4) Maximum loan-to-value ratio for new loans.--The 
        mortgage being insured under this section shall involve 
        a principal obligation (including such initial service 
        charges, appraisal, inspection, and other fees as the 
        Secretary shall approve and including the mortgage 
        insurance premium paid pursuant to subsection (e)(1)) 
        in an amount not to exceed 90 percent of the current 
        appraised value of the property. Section 203(d) shall 
        not apply to mortgages insured under this section.
          (5) Required waiver of prepayment penalties and 
        fees.--All penalties for prepayment of the existing 
        mortgage or mortgages, and all fees and penalties 
        related to default or delinquency on all existing 
        mortgages or mortgages, shall be waived or forgiven.
          (6) Required loan reduction.--
                  (A) Reduction of indebtedness under existing 
                senior mortgage.--The amount of indebtedness on 
                the existing mortgage or mortgages on the 
                residence shall have been substantially reduced 
                by such percentage as the Oversight Board or 
                Secretary may require, and such reduction shall 
                be at least sufficient to--
                          (i) provide for the refinancing of 
                        such existing mortgage or mortgages in 
                        an amount not greater than 90 percent 
                        of the current appraised value of the 
                        property involved;
                          (ii) pay the full amount of the 
                        single premium to be collected pursuant 
                        to subsection (e)(1) (which shall be an 
                        amount equal to 3.0 percent of the 
                        amount of the original insured 
                        principal obligation of the mortgage 
                        insured under this section and which 
                        shall serve as an additional reserve to 
                        cover possible loan losses); and
                          (iii) pay the full amount of the loan 
                        origination fee and any other closing 
                        costs, not to exceed 2.0 percent of the 
                        amount of the original insured 
                        principal obligation of the mortgage 
                        insured under this section.
                  (B) Extinguishment of debt by refinancing.--
                          (i) Required agreement.--All existing 
                        holders of mortgage liens on the 
                        property involved shall agree to accept 
                        the proceeds of the insured loan as 
                        payment in full of all indebtedness 
                        under all existing mortgages, and all 
                        encumbrances related to such mortgages 
                        shall be removed. The Oversight Board 
                        may take such actions as the Oversight 
                        Board considers necessary or 
                        appropriate to facilitate coordination 
                        and agreement between the holders of 
                        the existing senior mortgage and any 
                        existing subordinate mortgages, taking 
                        into consideration the subordinate lien 
                        status of such subordinate mortgages, 
                        to comply with the requirement under 
                        this subparagraph.
                          (ii) Treatment of multiple mortgage 
                        liens.--In addition to clause (i), the 
                        Oversight Board shall adopt one of the 
                        following approaches for all mortgages 
                        or such classes of mortgages as the 
                        Oversight Board may determine and may, 
                        from time to time, reconsider:
                                  (I) Fixed price.--As a 
                                requirement for participating 
                                in this program, all existing 
                                lien holders will agree to not 
                                provide any payment to 
                                subordinate lien holders other 
                                than such payment in accordance 
                                with a formula established by 
                                the Oversight Board as set 
                                forth in clause (iii); except 
                                that the Oversight Board may 
                                establish a short period within 
                                which first and subordinate 
                                lien holders may negotiate to 
                                extinguish all subordinate 
                                liens for compensation that may 
                                be different from the amount 
                                determined under such formula 
                                set forth in clause (iii).
                                  (II) Shared equity.--The 
                                Oversight Board may require the 
                                mortgagor under a mortgage 
                                insured under this section to 
                                agree to share a portion of any 
                                future equity in the mortgaged 
                                property with holders of 
                                existing subordinate mortgages, 
                                in accordance with a formula 
                                for such shared equity 
                                established by the Oversight 
                                Board as set forth in clause 
                                (iii), except that payments of 
                                such shared equity may be made 
                                only after the Secretary 
                                recovers all amounts owed to 
                                the Secretary with respect to 
                                such mortgage pursuant to the 
                                program under this section 
                                (including amounts owed 
                                pursuant to paragraph (8)).
                          (iii) Formula.--In determining a 
                        formula for determining any payments to 
                        subordinate lien holders pursuant to 
                        subclauses (I) and (II) of clause (ii), 
                        and in any reconsideration of such 
                        formula as the Oversight Board may from 
                        time to time undertake, the Oversight 
                        Board shall take into consideration the 
                        current market value of such liens. In 
                        no case may a formula provide for the 
                        payment of more than 1 percent of the 
                        current appraised value of the 
                        mortgaged property to a subordinate 
                        lien holder if the outstanding balance 
                        owed to more senior lien holders is 
                        equal to or exceeds such current 
                        appraised value.
                          (iv) Voluntary program.--This 
                        subparagraph may not be construed to 
                        require any holder of any existing 
                        mortgage to participate in the program 
                        under this section generally, or with 
                        respect to any particular loan.
                          (v) Source of payments for 
                        subordinate loans.--Any amounts paid to 
                        holders of any existing subordinate 
                        mortgages in connection with the 
                        origination and insurance of a mortgage 
                        under this section shall derive only 
                        from--
                                  (I) the holder of the 
                                existing senior mortgage; or
                                  (II) in the case only of the 
                                shared equity approach under 
                                clause (ii)(II), the mortgagor 
                                under the mortgage insured 
                                under this section
          (7) Required reduction of debt service.--The debt 
        service payments due under the mortgage insured under 
        this section shall be in an amount that is 
        substantially reduced from the debt service payments 
        due under the existing mortgage or mortgages, which 
        reduction may be achieved through a reduction of 
        indebtedness, a reduction in the interest rate being 
        paid, or an extension of the term of the mortgage, or 
        any combination thereof.
          (8) Financial recovery to federal government through 
        exit premium.--
                  (A) Subordinate lien.--The mortgage shall 
                provide that the Secretary shall retain a lien 
                on the residence involved, which shall be 
                subordinate to the mortgage insured under this 
                section but senior to all other mortgages on 
                the residence that may exist at any time, and 
                which shall secure the repayment of the amount 
                due under subparagraph (D).
                  (B) No interest or payment during mortgage.--
                The amount secured by the lien retained by the 
                Secretary pursuant to subparagraph (A) shall 
                not bear interest and shall not be repayable to 
                the Secretary except as provided in 
                subparagraph (D) of this paragraph.
                  (C) Net proceeds available for exit 
                premium.--Upon the sale, refinancing, or other 
                disposition of the residence covered by a 
                mortgage insured under this section, any 
                proceeds resulting from such disposition that 
                remain after deducting the remaining insured 
                principal balance of the mortgage insured under 
                this section shall be available to meet the 
                obligation under subparagraph (D).
                  (D) Exit premium.--Upon any refinancing of 
                the mortgage insured under this section or any 
                sale or disposition of the residence covered by 
                the mortgage, the Secretary shall, subject to 
                the availability of sufficient net proceeds 
                described in subparagraph (C), receive the 
                greater of--
                          (i) 3 percent of the amount of the 
                        original insured principal obligation 
                        of the mortgage; or
                          (ii) a percentage of the portion of 
                        the net proceeds described in 
                        subparagraph (C), which shall be--
                                  (I) in the case of any 
                                refinancing, sale, or 
                                disposition occurring during 
                                the first year of the term of 
                                the mortgage, 100 percent of 
                                such net proceeds;
                                  (II) in the case of any 
                                refinancing, sale, or 
                                disposition occurring during 
                                the second year of the term of 
                                the mortgage, 80 percent;
                                  (III) in the case of any 
                                refinancing, sale, or 
                                disposition occurring during 
                                the third year of the term of 
                                the mortgage, 60 percent; and
                                  (IV) in the case of any 
                                refinancing, sale, or 
                                disposition occurring during 
                                the fourth year of the term of 
                                the mortgage or at any time 
                                thereafter, 50 percent;
                except that such percentage of proceeds shall 
                be reduced by all fees the Secretary has 
                collected for the mortgage prior to such 
                refinancing, sale, or disposition.
                  (E) Authority to prohibit new second liens.--
                The Oversight Board shall prohibit borrowers 
                from granting a new second lien on the 
                mortgaged property during the first five years 
                of the term of the mortgage insured under this 
                section, except as the Oversight Board 
                determines to be necessary to ensure the 
                appropriate maintenance of the mortgaged 
                property.
          (9) Documentation and verification of income.--In 
        complying with the FHA underwriting requirements under 
        the program under this section, the mortgagee under the 
        mortgage shall document and verify the income of the 
        mortgagor by procuring an Internal Revenue Service 
        transcript of the income tax returns of the mortgagor 
        for the two most recent years for which the filing 
        deadline for such years has passed and by any other 
        method, in accordance with procedures and standards 
        that the Oversight Board or the Secretary shall 
        establish.
          (10) Fixed rate mortgage.--The mortgage insured under 
        this section shall bear interest at a single rate that 
        is fixed for the entire term of the mortgage.
          (11) Maximum loan amount.--Notwithstanding section 
        203(b)(2), the mortgage being insured under this 
        section shall involve a principal obligation in an 
        amount that does not exceed the limitation (for a 
        property of the applicable size) on the amount of the 
        principal obligation that would be allowable under the 
        terms of section 202(a) of the Economic Stimulus Act of 
        2008 if the mortgage were insured pursuant to such 
        section. The limitation on the amount of the principal 
        obligation allowable under such Act shall apply for the 
        purposes of this Act until the termination under 
        subsection (n) of the program under this subsection.
          (12) Ineligibility for fraud conviction.--The 
        mortgagor shall not have been convicted under Federal 
        or State law for mortgage fraud during the 7-year 
        period ending upon the insurance of the mortgage under 
        this section.
          (13) Lender review.--The mortgagee under the mortgage 
        shall conduct an electronic database search of the 
        mortgagor's criminal history to determine if the 
        mortgagor has had a conviction described in paragraph 
        (12). The mortgagee may charge the mortgagor a 
        reasonable fee for the actual cost of the search not to 
        exceed a maximum rate established by the Oversight 
        Board. The Oversight Board may provide clarification, 
        if needed, to help mortgagees identify any differences 
        among the States in how they report mortgage fraud 
        convictions. The Oversight Board shall establish 
        procedures sufficient to allow the mortgagor to 
        challenge a mortgagee's determination with respect to 
        paragraph (12) (including to correct inaccuracies 
        resulting from theft of the mortgagor's identity or 
        personally identifiable information).
          (14) Appraisals.--Any appraisal conducted in 
        connection with a mortgage insured under this section 
        shall--
                  (A) be based on the current value of the 
                property;
                  (B) be conducted in accordance with title XI 
                of the Financial Institutions Reform, Recovery, 
                and Enforcement Act of 1989 (12 U.S.C. 3331 et 
                seq.);
                  (C) be completed by an appraiser who meets 
                the competency requirements of the Uniform 
                Standards of Professional Appraisal Practice;
                  (D) be wholly consistent with the appraisal 
                standards, practices, and procedures under 
                section 202(e) of this Act that apply to all 
                loans insured under this Act; and
                  (E) comply with the requirements of 
                subsection (g) of this section (relating to 
                appraisal independence).
          (15) Statement of loan terms.--
                  (A) Requirement.--The mortgagor shall have 
                been provided by the mortgagee, not later than 
                three days after application for the mortgage, 
                a form described in subparagraph (B) 
                appropriately and accurately completed by the 
                mortgagee.
                  (B) Form.--The form described in this 
                subparagraph shall be a single page, written 
                disclosure regarding the mortgage loan to be 
                insured under this section that, when completed 
                by the mortgagee, sets forth, in accordance 
                with such requirements as the Secretary shall 
                by regulation establish a best possible 
                estimate of--
                          (i) the total loan amount under the 
                        mortgage;
                          (ii) the loan-to-value ratio for the 
                        mortgage;
                          (iii) the final maturity date for the 
                        mortgage;
                          (iv) the amount of any prepayment fee 
                        to be charged if the mortgage is paid 
                        in full before the final maturity date 
                        for the mortgage, including the 
                        percentages of any net proceeds to be 
                        received by the Secretary pursuant to 
                        paragraph (8)(D)(ii);
                          (v) the amount of the exit premium 
                        under the mortgage pursuant to 
                        subsection (e)(3);
                          (vi) the interest rate under the 
                        mortgage expressed as an annual 
                        percentage rate, and the amount of the 
                        monthly payment due under such rate;
                          (vii) the fully indexed rate of 
                        interest under the mortgage expressed 
                        as an annual percentage rate and the 
                        amount of the monthly payment due under 
                        such rate;
                          (viii) the monthly household income 
                        of the borrower upon which the mortgage 
                        is based;
                          (ix) the amount of the monthly 
                        payment due under the mortgage, and the 
                        amount of such initial monthly payment 
                        plus monthly amounts due for taxes and 
                        insurance on the property for which the 
                        mortgage is made, both expressed as a 
                        percentage of the monthly household 
                        income of the borrower; and
                          (x) the aggregate amount of 
                        settlement charges for all settlement 
                        services provided in connection with 
                        the mortgage, the amount of such 
                        charges that are included in the 
                        principal amount and the amount of such 
                        charges the borrower must pay at 
                        closing, the aggregate amount of 
                        mortgagee's fees connection with the 
                        mortgage, and the aggregate amount of 
                        other fees or required payments in 
                        connection with the mortgage.
  (d) Flexible Underwriting Criteria.--
          (1) In general.--The Oversight Board shall establish, 
        and the Secretary acting on behalf of the Oversight 
        Board shall implement, underwriting standards for 
        mortgages insured under this section that--
                  (A) ensure that each mortgagor under a 
                mortgage insured under this section has a 
                reasonable expectation of repaying the 
                mortgage, taking into consideration the 
                mortgagor's income, assets, liabilities, 
                payment history, and other applicable criteria, 
                but which shall not result in a denial of 
                insurance solely on the basis of the 
                mortgagor's current FICO or other credit 
                scores, or any delinquency or default by the 
                mortgagor under the existing mortgage or 
                mortgages, or any case filed under title 11, 
                United States Code, by the mortgagor; and
                  (B) subject to the provisions of subparagraph 
                (A), permit a total debt-to-income ratio of up 
                to 43 percent.
          (2) Exception.--
                  (A) In general.--Subject to the underwriting 
                standards established under paragraph (1)(A) 
                and any additional requirements that the 
                Oversight Board considers appropriate, the 
                Oversight Board shall permit a total debt-to-
                income ratio of more than 43 percent, but not 
                more than 50 percent, if the mortgagor has 
                made, on a timely basis before the endorsement 
                of the mortgage insured under this section, not 
                less than six months of payments in an amount 
                not less than the amount of the monthly payment 
                due under the mortgage to be insured under this 
                section. The holder of the existing senior 
                mortgage shall exercise forbearance with 
                respect to such mortgage during the period in 
                which such payments are made.
                  (B) Computation of debt-to-income ratio.-- In 
                computing the mortgagor's total debt-to-income 
                ratio for purposes of mortgage qualification 
                under the underwriting standards established 
                pursuant to this section--
                          (i) if the mortgagor is a debtor in a 
                        case under chapter 13 of title 11, 
                        United States Code, payments on 
                        recurring debts other than housing 
                        expenses shall be based on the amounts 
                        being paid on such debts under the 
                        mortgagor's confirmed plan under such 
                        chapter; and
                          (ii) if the mortgagor is a debtor in 
                        a case under chapter 7 of title 11, 
                        United States Code, recurring debts 
                        that are to be discharged in that case 
                        shall not be considered.
          (3) Authority.--The Oversight Board may alter the 
        ratios under this subsection for a particular class of 
        borrowers subject to such requirements as the Board 
        determines is necessary and appropriate to fulfill the 
        purposes of this Act.
          (4) Representations and warranties.--The Oversight 
        Board shall require the underwriter of the insured loan 
        to provide such representations and warranties as the 
        Oversight Board considers necessary or appropriate for 
        the Secretary to enforce compliance with all 
        underwriting and appraisal standards of the program.
  (e) Premiums.--For each mortgage insured under this section, 
the Oversight Board shall establish and the Secretary shall 
collect--
          (1) at the time of insurance, a single premium 
        payment in an amount equal to 3.0 percent of the amount 
        of the original insured principal obligation of the 
        mortgage, which shall be paid from the proceeds of the 
        mortgage being insured under this section, through the 
        reduction of the amount of indebtedness on the existing 
        senior mortgage required under subsection (c)(6)(A);
          (2) in addition to the premium under paragraph (1), 
        annual premium payments in an amount equal to 1.50 
        percent of the remaining insured principal balance of 
        the mortgage; and
          (3) an exit premium in the amount determined under 
        subsection (c)(8), but which shall not be less than 3.0 
        percent of the original insured principal obligation of 
        the mortgage, subject only to the availability of 
        sufficient net proceeds from sale, refinancing, or 
        other disposition of the property, as determined in 
        subsection (c)(8).
  (f) Origination Fees and Mortgage Rate.--The Oversight Board 
shall establish and the Secretary shall implement a reasonable 
limitation on origination fees for mortgages insured under this 
section and shall establish procedures to ensure that interest 
rates on such mortgages shall be commensurate with market rate 
interest rates on such types of loans.
  (g) Appraisal Independence.--
          (1) Prohibitions on interested parties in a real 
        estate transaction.--No mortgage lender, mortgage 
        broker, mortgage banker, real estate broker, appraisal 
        management company, employee of an appraisal management 
        company, nor any other person with an interest in a 
        real estate transaction involving an appraisal in 
        connection with a mortgage insured under this section 
        shall improperly influence, or attempt to improperly 
        influence, through coercion, extortion, collusion, 
        compensation, instruction, inducement, intimidation, 
        non-payment for services rendered, or bribery, the 
        development, reporting, result, or review of a real 
        estate appraisal sought in connection with the 
        mortgage.
          (2) Exceptions.--The requirements of paragraph (1) 
        shall not be construed as prohibiting a mortgage 
        lender, mortgage broker, mortgage banker, real estate 
        broker, appraisal management company, employee of an 
        appraisal management company, or any other person with 
        an interest in a real estate transaction from asking an 
        appraiser to provide 1 or more of the following 
        services:
                  (A) Consider additional, appropriate property 
                information, including the consideration of 
                additional comparable properties to make or 
                support an appraisal.
                  (B) Provide further detail, substantiation, 
                or explanation for the appraiser's value 
                conclusion.
                  (C) Correct errors in the appraisal report.
          (3) Civil monetary penalties.--The Secretary may 
        impose a civil money penalty for any knowing and 
        material violation of paragraph (1) under the same 
        terms and conditions as are authorized in section 
        536(a) of this Act.
  (h) Limitation on Aggregate Insurance Authority.--The 
aggregate original principal obligation of all mortgages 
insured under this section may not exceed $300,000,000,000.
  (i) Enhancement of FHA Capacity.--Under the direction of the 
Oversight Board, the Secretary shall take such actions as may 
be necessary to--
          (1) contract for the establishment of underwriting 
        criteria, automated underwriting systems, pricing 
        standards, and other factors relating to eligibility 
        for mortgages insured under this section;
          (2) contract for independent quality reviews of 
        underwriting, including appraisal reviews and fraud 
        detection, of mortgages insured under this section or 
        pools of such mortgages; and
          (3) increase personnel of the Department as necessary 
        to process or monitor the processing of mortgages 
        insured under this section.
  (j) Monitoring of Underwriting Risk.--
          (1) Monitoring of designated underwriters.--The 
        Oversight Board and the Secretary shall monitor 
        independent quality reviews as established pursuant to 
        subsection (i)(2) to--
                  (A) determine compliance of designated 
                underwriters with underwriting standards;
                  (B) determine rates of delinquency, claims 
                rates, and loss rates of designated 
                underwriters; and
                  (C) terminate eligibility of designated 
                underwriters that do not meet minimum 
                performance standards as the Oversight Board 
                may establish and the Secretary implements.
          (2) Reports by oversight board.--The Oversight Board 
        shall submit monthly reports to the Congress 
        identifying the progress of the program for mortgage 
        insurance under this section, which shall contain the 
        following information for each month:
                  (A) The number of new mortgages insured under 
                this section, including the location of the 
                properties subject to such mortgages by census 
                tract.
                  (B) The aggregate principal obligation of new 
                mortgages insured under this section.
                  (C) The average amount by which the 
                indebtedness on existing mortgages is reduced 
                in accordance with subsection (c)(6).
                  (D) The average amount by which the debt 
                service payments on existing mortgages is 
                reduced in accordance with subsection (c)(7).
                  (E) The amount of premiums collected for 
                insurance of mortgages under this section.
                  (F) The claim and loss rates for mortgages 
                insured under this section.
                  (G) The race, ethnicity, gender, and income 
                of the mortgagors, aggregated by geographical 
                areas at least as specific as census tracts, 
                except where necessary to protect privacy of 
                the borrower.
                  (H) Any other information that the Oversight 
                Board considers appropriate.
          (3) Report by inspector general.--The Inspector 
        General of the Department of Housing and Urban 
        Development shall conduct an annual audit of the 
        program for mortgage insurance under this section to 
        determine compliance with this section and program 
        rules.
  (k) GNMA Commitment Authority.--
          (1) Guarantees.--The Secretary shall take such 
        actions as may be necessary to ensure that securities 
        based on and backed by a trust or pool composed of 
        mortgages insured under this section are available to 
        be guaranteed by the Government National Mortgage 
        Association as to the timely payment of principal and 
        interest.
          (2) Guarantee authority.--To carry out the purposes 
        of section 306 of the National Housing Act (12 U.S.C. 
        1721), the Government National Mortgage Association may 
        enter into new commitments to issue guarantees of 
        securities based on or backed by mortgages insured 
        under this section, not exceeding $300,000,000,000. The 
        amount of authority provided under the preceding 
        sentence to enter into new commitments to issue 
        guarantees is in addition to any amount of authority to 
        make new commitments to issue guarantees that is 
        provided to the Association under any other provision 
        of law.
  (l) Special Risk Insurance Fund.--The insurance of each 
mortgage under this section shall be the obligation of the 
Special Risk Insurance Fund established by section 238.
  (m) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Existing mortgage.--The term ``existing 
        mortgage'' means, with respect to a mortgage insured 
        under this section, a mortgage that is to be 
        extinguished, and paid or prepaid, from the proceeds of 
        the mortgage insured under this section.
          (2) Existing senior mortgage.--The term ``existing 
        senior mortgage'' means, with respect to a mortgage 
        insured under this section, the existing mortgage that 
        has superior priority.
          (3) Existing subordinate mortgage.--The term 
        ``existing subordinate mortgage'' means, with respect 
        to a mortgage insured under this section, an existing 
        mortgage that has subordinate priority to the existing 
        senior mortgage.
  (n) Sunset.--
          (1) In general.--Except as provided in paragraph (2), 
        the authority of the Secretary to make any new 
        commitment to insure any mortgage under this section 
        shall terminate upon the expiration of the 2-year 
        period beginning on the date of the enactment of the 
        FHA Housing Stabilization and Homeownership Retention 
        Act of 2008.
          (2) Extensions.--The Oversight Board may, not more 
        than four times, extend the authority to enter into new 
        commitments to insure mortgages under this section 
        beyond the date specified in paragraph (1), except that 
        each such extension shall--
                  (A) be effective only if, before the program 
                terminates pursuant to paragraph (1) or any 
                previous extension pursuant to this paragraph, 
                the Oversight Board--
                          (i) certifies the need for such 
                        extension in writing to the Congress; 
                        and
                          (ii) causes notice of such extension 
                        to be published in the Federal Register 
                        no later than the beginning of the 3-
                        month period that ends upon the 
                        scheduled termination date of the 
                        program; and
                  (B) be for a period of not more than 6 
                months.
  (o) Authorizations of Appropriations.--There is authorized to 
be appropriated for each of fiscal years 2008 and 2009--
          (1) $210,000,000 for providing counseling regarding 
        loss mitigation for mortgagors with 1- to 4-family 
        residences, including determining eligibility for the 
        program under this section, with grants to be 
        administered through the Neighborhood Reinvestment 
        Corporation, except that--
                  (A) not less than 15 percent of the funds 
                made available pursuant to this paragraph shall 
                be provided to counseling organizations that 
                target counseling services regarding loss 
                mitigation to minority and low-income 
                homeowners or provide such services in 
                neighborhoods with high concentrations of 
                minority and low-income homeowners;
                  (B) $35,000,000 of the funds made available 
                pursuant to this paragraph shall be used by the 
                Neighborhood Reinvestment Corporation (referred 
                to in this subparagraph as the ``NRC'') to make 
                grants to State and local legal organizations 
                or attorneys that have demonstrated legal 
                experience in home foreclosure or eviction law 
                to provide legal assistance related to home 
                ownership preservation, home foreclosure 
                prevention, and tenancy associated with home 
                foreclosure or to counseling intermediaries 
                that have been approved by the Department of 
                Housing and Urban Development for the purpose 
                of making such grants or contracting for such 
                legal assistance; of the amount provided under 
                this subparagraph, at least 60 percent shall be 
                allocated for legal assistance to low-income 
                homeowners or tenants; such attorneys shall be 
                capable of assisting homeowners in owner-
                occupied homes or tenants who live in homes 
                with mortgages in default, in danger of 
                default, or subject to or at risk of 
                foreclosure or eviction and who have legal 
                issues that cannot be handled by counselors 
                employed by NRC intermediaries; in using the 
                amount made available under this subparagraph, 
                the NRC shall give priority consideration to 
                State and local legal organizations and 
                attorneys that (i) provide legal assistance in 
                the 100 metropolitan statistical areas (as 
                defined by the Director of the Office of 
                Management and Budget) with the highest home 
                foreclosure rates, and (ii) have the capacity 
                to begin using the financial assistance within 
                90 days after receipt of the assistance; as a 
                condition of the receipt of a grant under this 
                subparagraph, the grantee shall submit to NRC 
                information relating to the demographic 
                characteristics of the assisted homeowners or 
                tenants, the dollar amount and terms of the 
                relevant mortgages and the outcome of legal 
                proceedings related to the foreclosure or 
                eviction proceedings, including the resolutions 
                thereof;
                  (C) some such sums shall be used for such 
                counseling for veterans recently returning from 
                active duty in the Armed Forces;
                  (D) the NRC shall give priority consideration 
                for funding with amounts made available 
                pursuant to this paragraph, except for funds 
                made available under subparagraphs (A) and (B), 
                to entities that have an effective plan in 
                place for making contact, including personal 
                contact, with defaulted mortgagors, and such a 
                plan may include use of third parties 
                (including both for-profit and not-for-profit 
                entities) to make personal contact with 
                defaulted mortgagors, or visits to such 
                mortgagors, or both;
                  (E) except with respect to funds reserved 
                under subparagraphs (A) and (B), the NRC shall 
                give priority consideration for funding with 
                amounts made available pursuant to this 
                paragraph to entities that have a written plan 
                that has been implemented for providing in-
                person counseling and for making contact, 
                including personal contact, with defaulted 
                mortgagors, for the purpose of providing 
                counseling or providing information about 
                available counseling, both (i) prior to 
                commencement of any foreclosure proceedings, 
                and (ii) in the event effective in person or 
                phone contact has not been made with such 
                defaulted mortgagors prior thereto, then prior 
                to the conclusion of the foreclosure process; 
                and
                  (F) not less than 2 percent of the funds made 
                available pursuant to this paragraph shall be 
                used only for identifying and notifying 
                borrowers under existing mortgages who are 
                eligible under this section for insurance of 
                refinancing mortgages, and in making funds 
                reserved under this subparagraph available for 
                such purpose, the Secretary shall give 
                preference to assistance for programs that have 
                a proven history of outreach within minority 
                communities; and
          (2) $150,000,000 for costs of activities under 
        subsection (i).
  (p) Audit and Report by Inspector General.--
          (1) Audit.--The Inspector General of the Department 
        of Housing and Urban Development shall conduct an audit 
        of the program for loss mitigation counseling funded 
        with amounts made available under subsection (o)(1) to 
        determine compliance with such subsection.
          (2) Reports to congress.--Not later than March 30, 
        2009, and every calendar quarter thereafter, the 
        Inspector General shall submit to the appropriate 
        committees of the Congress a report summarizing the 
        activities of the Inspector General and the 
        Neighborhood Reinvestment Corporation during the 120-
        day period ending on the date of such report. Each 
        report shall include, for the period covered by such 
        report, a detailed statement of all obligations, 
        expenditures, and revenues associated with paragraphs 
        (1) and (2) of subsection (o), including--
                  (A) obligations and expenditures of 
                appropriated funds;
                  (B) the number of homeowners eligible in such 
                program;
                  (C) the number of homeowners participating in 
                such program;
                  (D) the status of homeowners within such 
                program;
                  (E) the number of homeowners who have 
                rejected assistance from the Neighborhood 
                Reinvestment Corporation; and
                  (F) information on participating counseling 
                services.

           *       *       *       *       *       *       *

                              ----------                              


DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ACT

           *       *       *       *       *       *       *


             UNDER SECRETARY AND OTHER OFFICERS AND OFFICES

  Sec. 4. (a) * * *

           *       *       *       *       *       *       *

  (g) Office of Housing Counseling.--
          (1) Establishment.--There is established, in the 
        Office of the Secretary, the Office of Housing 
        Counseling.
          (2) Director.--There is established the position of 
        Director of Housing Counseling. The Director shall be 
        the head of the Office of Housing Counseling and shall 
        be appointed by the Secretary. Such position shall be a 
        career-reserved position in the Senior Executive 
        Service.
          (3) Functions.--
                  (A) In general.--The Director shall have 
                ultimate responsibility within the Department, 
                except for the Secretary, for all activities 
                and matters relating to homeownership 
                counseling and rental housing counseling, 
                including--
                          (i) research, grant administration, 
                        public outreach, and policy development 
                        relating to such counseling; and
                          (ii) establishment, coordination, and 
                        administration of all regulations, 
                        requirements, standards, and 
                        performance measures under programs and 
                        laws administered by the Department 
                        that relate to housing counseling, 
                        homeownership counseling (including 
                        maintenance of homes), mortgage-related 
                        counseling (including home equity 
                        conversion mortgages and credit 
                        protection options to avoid 
                        foreclosure), and rental housing 
                        counseling, including the requirements, 
                        standards, and performance measures 
                        relating to housing counseling.
                  (B) Specific functions.--The Director shall 
                carry out the functions assigned to the 
                Director and the Office under this section and 
                any other provisions of law. Such functions 
                shall include establishing rules necessary 
                for--
                          (i) the counseling procedures under 
                        section 106(g)(1) of the Housing and 
                        Urban Development Act of 1968 (12 
                        U.S.C. 1701x(h)(1));
                          (ii) carrying out all other functions 
                        of the Secretary under section 106(g) 
                        of the Housing and Urban Development 
                        Act of 1968, including the 
                        establishment, operation, and 
                        publication of the availability of the 
                        toll-free telephone number under 
                        paragraph (2) of such section;
                          (iii) carrying out section 5 of the 
                        Real Estate Settlement Procedures Act 
                        of 1974 (12 U.S.C. 2604) for home 
                        buying information booklets prepared 
                        pursuant to such section;
                          (iv) carrying out the certification 
                        program under section 106(e) of the 
                        Housing and Urban Development Act of 
                        1968 (12 U.S.C. 1701x(e));
                          (v) carrying out the assistance 
                        program under section 106(a)(4) of the 
                        Housing and Urban Development Act of 
                        1968, including criteria for selection 
                        of applications to receive assistance;
                          (vi) carrying out any functions 
                        regarding abusive, deceptive, or 
                        unscrupulous lending practices relating 
                        to residential mortgage loans that the 
                        Secretary considers appropriate, which 
                        shall include conducting the study 
                        under section 6 of the Expand and 
                        Preserve Home Ownership Through 
                        Counseling Act;
                          (vii) providing for operation of the 
                        advisory committee established under 
                        paragraph (4) of this subsection;
                          (viii) collaborating with community-
                        based organizations with expertise in 
                        the field of housing counseling; and
                          (ix) providing for the building of 
                        capacity to provide housing counseling 
                        services in areas that lack sufficient 
                        services.
          (4) Advisory committee.--
                  (A) In general.--The Secretary shall appoint 
                an advisory committee to provide advice 
                regarding the carrying out of the functions of 
                the Director.
                  (B) Members.--Such advisory committee shall 
                consist of not more than 12 individuals, and 
                the membership of the committee shall equally 
                represent all aspects of the mortgage and real 
                estate industry, including consumers.
                  (C) Terms.--Except as provided in 
                subparagraph (D), each member of the advisory 
                committee shall be appointed for a term of 3 
                years. Members may be reappointed at the 
                discretion of the Secretary.
                  (D) Terms of initial appointees.--As 
                designated by the Secretary at the time of 
                appointment, of the members first appointed to 
                the advisory committee, 4 shall be appointed 
                for a term of 1 year and 4 shall be appointed 
                for a term of 2 years.
                  (E) Prohibition of pay; travel expenses.--
                Members of the advisory committee shall serve 
                without pay, but shall receive travel expenses, 
                including per diem in lieu of subsistence, in 
                accordance with applicable provisions under 
                subchapter I of chapter 57 of title 5, United 
                States Code.
                  (F) Advisory role only.--The advisory 
                committee shall have no role in reviewing or 
                awarding housing counseling grants.
          (5) Scope of homeownership counseling.--In carrying 
        out the responsibilities of the Director, the Director 
        shall ensure that homeownership counseling provided by, 
        in connection with, or pursuant to any function, 
        activity, or program of the Department addresses the 
        entire process of homeownership, including the decision 
        to purchase a home, the selection and purchase of a 
        home, issues arising during or affecting the period of 
        ownership of a home (including refinancing, default and 
        foreclosure, and other financial decisions), and the 
        sale or other disposition of a home.

           *       *       *       *       *       *       *

                              ----------                              


HOUSING AND URBAN DEVELOPMENT ACT OF 1968

           *       *       *       *       *       *       *


 TECHNICAL ASSISTANCE, COUNSELING TO TENANTS AND HOMEOWNERS, AND LOANS 
            TO SPONSORS OF LOW- AND MODERATE-INCOME HOUSING

  Sec. 106. (a)(1) * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

  (c) Grants for Homeownership Counseling Organizations.--
          (1) * * *

           *       *       *       *       *       *       *

          (5) Notification of availability of homeownership 
        counseling.--
                  (A) Notification of availability of 
                homeownership counseling.--
                          (i) * * *
                          (ii) Content.--Notification under 
                        this subparagraph shall--
                                  (I) * * *

           *       *       *       *       *       *       *

                                  (III) notify the homeowner or 
                                mortgage applicant of the 
                                availability of homeownership 
                                counseling provided by 
                                nonprofit organizations 
                                approved by the Secretary and 
                                experienced in the provision of 
                                homeownership counseling, or 
                                provide the toll-free telephone 
                                number described in 
                                subparagraph (D)(i); [and]
                                  (IV) notify the homeowner by 
                                a statement or notice, written 
                                in plain English by the 
                                Secretary of Housing and Urban 
                                Development, in consultation 
                                with the Secretary of Defense 
                                and the Secretary of the 
                                Treasury, explaining the 
                                mortgage and foreclosure rights 
                                of servicemembers, and the 
                                dependents of such 
                                servicemembers, under the 
                                Servicemembers Civil Relief Act 
                                (50 U.S.C. App. 501 et seq.), 
                                including the toll-free 
                                military one source number to 
                                call if servicemembers, or the 
                                dependents of such 
                                servicemembers, require further 
                                assistance[.]; and
                                  (V) notify the housing or 
                                mortgage applicant of the 
                                availability of mortgage 
                                software systems provided 
                                pursuant to subsection (g)(3).

           *       *       *       *       *       *       *

  (e) Certification.--
          [(1) Requirement for assistance.--An organization may 
        not receive assistance for counseling activities under 
        subsection (a)(1)(iii), (a)(2), (c), or (d), unless the 
        organization provides such counseling, to the extent 
        practicable, by individuals who have been certified by 
        the Secretary under this subsection as competent to 
        provide such counseling.]
          (1) Requirement for assistance.--An organization may 
        not receive assistance for counseling activities under 
        subsection (a)(1)(iii), (a)(2), (a)(4), (c), or (d) of 
        this section, or under section 101(e), unless the 
        organization, or the individuals through which the 
        organization provides such counseling, has been 
        certified by the Secretary under this subsection as 
        competent to provide such counseling.
          (2) Standards and examination.--The Secretary shall, 
        by regulation, establish standards and procedures for 
        testing and certifying counselors and for certifying 
        organizations. Such standards and procedures shall 
        require [for certification], for certification of an 
        organization, that each individual through which the 
        organization provides counseling shall demonstrate, 
        and, for certification of an individual, that the 
        individual shall demonstrate, by written examination 
        (as provided under subsection (f)(4)), competence to 
        provide counseling in each of the following areas:
                  (A) * * *

           *       *       *       *       *       *       *

          (3) Requirement under hud programs.--Any 
        homeownership counseling or rental housing counseling 
        (as such terms are defined in subsection (g)(1)) 
        required under, or provided in connection with, any 
        program administered by the Department of Housing and 
        Urban Development shall be provided only by 
        organizations or counselors certified by the Secretary 
        under this subsection as competent to provide such 
        counseling.
          (4) Outreach.--The Secretary shall take such actions 
        as the Secretary considers appropriate to ensure that 
        individuals and organizations providing homeownership 
        or rental housing counseling are aware of the 
        certification requirements and standards of this 
        subsection and of the training and certification 
        programs under subsection (f).
          [(3)] (5) Encouragement.--The Secretary shall 
        encourage organizations engaged in providing 
        homeownership and rental counseling that do not receive 
        assistance under this section to employ organizations 
        and individuals to provide such counseling who are 
        certified under this subsection or meet the 
        certification standards established under this 
        subsection.

           *       *       *       *       *       *       *

  (g) Procedures and Activities.--
          (1) Counseling procedures.--
                  (A) In general.--The Secretary shall 
                establish, coordinate, and monitor the 
                administration by the Department of Housing and 
                Urban Development of the counseling procedures 
                for homeownership counseling and rental housing 
                counseling provided in connection with any 
                program of the Department, including all 
                requirements, standards, and performance 
                measures that relate to homeownership and 
                rental housing counseling.
                  (B) Homeownership counseling.--For purposes 
                of this subsection and as used in the 
                provisions referred to in this subparagraph, 
                the term ``homeownership counseling'' means 
                counseling related to homeownership and 
                residential mortgage loans. Such term includes 
                counseling related to homeownership and 
                residential mortgage loans that is provided 
                pursuant to--
                          (i) section 105(a)(20) of the Housing 
                        and Community Development Act of 1974 
                        (42 U.S.C. 5305(a)(20));
                          (ii) in the United States Housing Act 
                        of 1937--
                                  (I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                  (II) section 8(y)(1)(D) (42 
                                U.S.C. 1437f(y)(1)(D));
                                  (III) section 18(a)(4)(D) (42 
                                U.S.C. 1437p(a)(4)(D));
                                  (IV) section 23(c)(4) (42 
                                U.S.C. 1437u(c)(4));
                                  (V) section 32(e)(4) (42 
                                U.S.C. 1437z-4(e)(4));
                                  (VI) section 33(d)(2)(B) (42 
                                U.S.C. 1437z-5(d)(2)(B));
                                  (VII) sections 302(b)(6) and 
                                303(b)(7) (42 U.S.C. 1437aaa-
                                1(b)(6), 1437aaa-2(b)(7)); and
                                  (VIII) section 304(c)(4) (42 
                                U.S.C. 1437aaa-3(c)(4));
                          (iii) section 302(a)(4) of the 
                        American Homeownership and Economic 
                        Opportunity Act of 2000 (42 U.S.C. 
                        1437f note);
                          (iv) sections 233(b)(2) and 258(b) of 
                        the Cranston-Gonzalez National 
                        Affordable Housing Act (42 U.S.C. 
                        12773(b)(2), 12808(b));
                          (v) this section and section 101(e) 
                        of the Housing and Urban Development 
                        Act of 1968 (12 U.S.C. 1701x, 
                        1701w(e));
                          (vi) section 220(d)(2)(G) of the Low-
                        Income Housing Preservation and 
                        Resident Homeownership Act of 1990 (12 
                        U.S.C. 4110(d)(2)(G));
                          (vii) sections 422(b)(6), 423(b)(7), 
                        424(c)(4), 442(b)(6), and 443(b)(6) of 
                        the Cranston-Gonzalez National 
                        Affordable Housing Act (42 U.S.C. 
                        12872(b)(6), 12873(b)(7), 12874(c)(4), 
                        12892(b)(6), and 12893(b)(6));
                          (viii) section 491(b)(1)(F)(iii) of 
                        the McKinney-Vento Homeless Assistance 
                        Act (42 U.S.C. 11408(b)(1)(F)(iii));
                          (ix) sections 202(3) and 810(b)(2)(A) 
                        of the Native American Housing and 
                        Self-Determination Act of 1996 (25 
                        U.S.C. 4132(3), 4229(b)(2)(A));
                          (x) in the National Housing Act--
                                  (I) in section 203 (12 U.S.C. 
                                1709), the penultimate 
                                undesignated paragraph of 
                                paragraph (2) of subsection 
                                (b), subsection (c)(2)(A), and 
                                subsection (r)(4);
                                  (II) subsections (a) and 
                                (c)(3) of section 237 (12 
                                U.S.C. 1715z-2); and
                                  (III) subsections (d)(2)(B) 
                                and (m)(1) of section 255 (12 
                                U.S.C. 1715z-20);
                          (xi) section 502(h)(4)(B) of the 
                        Housing Act of 1949 (42 U.S.C. 
                        1472(h)(4)(B)); and
                          (xii) section 508 of the Housing and 
                        Urban Development Act of 1970 (12 
                        U.S.C. 1701z-7).
                  (C) Rental housing counseling.--For purposes 
                of this subsection, the term ``rental housing 
                counseling'' means counseling related to rental 
                of residential property, which may include 
                counseling regarding future homeownership 
                opportunities and providing referrals for 
                renters and prospective renters to entities 
                providing counseling and shall include 
                counseling related to such topics that is 
                provided pursuant to--
                          (i) section 105(a)(20) of the Housing 
                        and Community Development Act of 1974 
                        (42 U.S.C. 5305(a)(20));
                          (ii) in the United States Housing Act 
                        of 1937--
                                  (I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                  (II) section 18(a)(4)(D) (42 
                                U.S.C. 1437p(a)(4)(D));
                                  (III) section 23(c)(4) (42 
                                U.S.C. 1437u(c)(4));
                                  (IV) section 32(e)(4) (42 
                                U.S.C. 1437z-4(e)(4));
                                  (V) section 33(d)(2)(B) (42 
                                U.S.C. 1437z-5(d)(2)(B)); and
                                  (VI) section 302(b)(6) (42 
                                U.S.C. 1437aaa-1(b)(6));
                          (iii) section 233(b)(2) of the 
                        Cranston-Gonzalez National Affordable 
                        Housing Act (42 U.S.C. 12773(b)(2));
                          (iv) section 106 of the Housing and 
                        Urban Development Act of 1968 (12 
                        U.S.C. 1701x);
                          (v) section 422(b)(6) of the 
                        Cranston-Gonzalez National Affordable 
                        Housing Act (42 U.S.C. 12872(b)(6));
                          (vi) section 491(b)(1)(F)(iii) of the 
                        McKinney-Vento Homeless Assistance Act 
                        (42 U.S.C. 11408(b)(1)(F)(iii));
                          (vii) sections 202(3) and 
                        810(b)(2)(A) of the Native American 
                        Housing and Self-Determination Act of 
                        1996 (25 U.S.C. 4132(3), 
                        4229(b)(2)(A)); and
                          (viii) the rental assistance program 
                        under section 8 of the United States 
                        Housing Act of 1937 (42 U.S.C. 1437f).
          (2) Standards for materials.--The Secretary, in 
        conjunction with the advisory committee established 
        under subsection (g)(4) of the Department of Housing 
        and Urban Development Act, shall establish standards 
        for materials and forms to be used, as appropriate, by 
        organizations providing homeownership counseling 
        services, including any recipients of assistance 
        pursuant to subsection (a)(4).
          (3) Mortgage software systems.--
                  (A) Certification.--The Secretary shall 
                provide for the certification of various 
                computer software programs for consumers to use 
                in evaluating different residential mortgage 
                loan proposals. The Secretary shall require, 
                for such certification, that the mortgage 
                software systems take into account--
                          (i) the consumer's financial 
                        situation and the cost of maintaining a 
                        home, including insurance, taxes, and 
                        utilities;
                          (ii) the amount of time the consumer 
                        expects to remain in the home or 
                        expected time to maturity of the loan;
                          (iii) such other factors as the 
                        Secretary considers appropriate to 
                        assist the consumer in evaluating 
                        whether to pay points, to lock in an 
                        interest rate, to select an adjustable 
                        or fixed rate loan, to select a 
                        conventional or government-insured or 
                        guaranteed loan and to make other 
                        choices during the loan application 
                        process.
                If the Secretary determines that available 
                existing software is inadequate to assist 
                consumers during the residential mortgage loan 
                application process, the Secretary shall 
                arrange for the development by private sector 
                software companies of new mortgage software 
                systems that meet the Secretary's 
                specifications.
                  (B) Use and initial availability.--Such 
                certified computer software programs shall be 
                used to supplement, not replace, housing 
                counseling. The Secretary shall provide that 
                such programs are initially used only in 
                connection with the assistance of housing 
                counselors certified pursuant to subsection 
                (e).
                  (C) Availability.--After a period of initial 
                availability under subparagraph (B) as the 
                Secretary considers appropriate, the Secretary 
                shall take reasonable steps to make mortgage 
                software systems certified pursuant to this 
                paragraph widely available through the Internet 
                and at public locations, including public 
                libraries, senior-citizen centers, public 
                housing sites, offices of public housing 
                agencies that administer rental housing 
                assistance vouchers, and housing counseling 
                centers.
          (4) National public service multimedia campaigns to 
        promote housing counseling.--
                  (A) In general.--The Director of Housing 
                Counseling shall develop, implement, and 
                conduct national public service multimedia 
                campaigns designed to make persons facing 
                mortgage foreclosure, persons considering a 
                subprime mortgage loan to purchase a home, 
                elderly persons, persons who face language 
                barriers, low-income persons, and other 
                potentially vulnerable consumers aware that it 
                is advisable, before seeking or maintaining a 
                residential mortgage loan, to obtain 
                homeownership counseling from an unbiased and 
                reliable sources and that such homeownership 
                counseling is available, including through 
                programs sponsored by the Secretary of Housing 
                and Urban Development.
                  (B) Contact information.--Each segment of the 
                multimedia campaign under subparagraph (A) 
                shall publicize the toll-free telephone number 
                and web site of the Department of Housing and 
                Urban Development through which persons seeking 
                housing counseling can locate a housing 
                counseling agency in their State that is 
                certified by the Secretary of Housing and Urban 
                Development and can provide advice on buying a 
                home, renting, defaults, foreclosures, credit 
                issues, and reverse mortgages.
                  (C) Authorization of appropriations.--There 
                are authorized to be appropriated to the 
                Secretary, not to exceed $3,000,000 for fiscal 
                years 2008, 2009, and 2010, for the develop, 
                implement, and conduct of national public 
                service multimedia campaigns under this 
                paragraph.
          (5) Education programs.--The Secretary shall provide 
        advice and technical assistance to States, units of 
        general local government, and nonprofit organizations 
        regarding the establishment and operation of, including 
        assistance with the development of content and 
        materials for, educational programs to inform and 
        educate consumers, particularly those most vulnerable 
        with respect to residential mortgage loans (such as 
        elderly persons, persons facing language barriers, low-
        income persons, and other potentially vulnerable 
        consumers), regarding home mortgages, mortgage 
        refinancing, home equity loans, and home repair loans.
  (h) Definitions.--For purposes of this section:
          (1) Nonprofit organization.--The term ``nonprofit 
        organization'' has the meaning given such term in 
        section 104(5) of the Cranston-Gonzalez National 
        Affordable Housing Act (42 U.S.C. 12704(5)), except 
        that subparagraph (D) of such section shall not apply 
        for purposes of this section.
          (2) State.--The term ``State'' means each of the 
        several States, the Commonwealth of Puerto Rico, the 
        District of Columbia, the Commonwealth of the Northern 
        Mariana Islands, Guam, the Virgin Islands, American 
        Samoa, the Trust Territories of the Pacific, or any 
        other possession of the United States.
          (3) Unit of general local government.--The term 
        ``unit of general local government'' means any city, 
        county, parish, town, township, borough, village, or 
        other general purpose political subdivision of a State.

           *       *       *       *       *       *       *

                              ----------                              


REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974

           *       *       *       *       *       *       *


               [SPECIAL] HOME BUYING INFORMATION BOOKLETS

  Sec. 5. [(a) The Secretary shall prepare and distribute 
booklets to help persons borrowing money to finance the 
purchase of residential real estate better to understand the 
nature and costs of real estate settlement services. The 
Secretary shall distribute such booklets to all lenders which 
make federally related mortgage loans.
  [(b) Each booklet shall be in such form and detail as the 
Secretary shall prescribe and, in addition to such other 
information as the Secretary may provide, shall include in 
clear and concise language--
          [(1) a description and explanation of the nature and 
        purpose of each cost incident to a real estate 
        settlement;
          [(2) an explanation and sample of the standard real 
        estate settlement form developed and prescribed under 
        section 4;
          [(3) a description and explanation of the nature and 
        purpose of escrow accounts when used in connection with 
        loans secured by residential real estate;
          [(4) an explanation of the choices available to 
        buyers of residential real estate in selecting persons 
        to provide necessary services incident to a real estate 
        settlement; and
          [(5) an explanation of the unfair practices and 
        unreasonable or unnecessary charges to be avoided by 
        the prospective buyer with respect to a real estate 
        settlement.
Such booklets shall take into consideration differences in real 
estate settlement procedures which may exist among the several 
States and territories of the United States and among separate 
political subdivisions within the same State and territory.]
  (a) Preparation and Distribution.--The Secretary shall 
prepare, at least once every 5 years, a booklet to help 
consumers applying for federally related mortgage loans to 
understand the nature and costs of real estate settlement 
services. The Secretary shall prepare the booklet in various 
languages and cultural styles, as the Secretary determines to 
be appropriate, so that the booklet is understandable and 
accessible to homebuyers of different ethnic and cultural 
backgrounds. The Secretary shall distribute such booklets to 
all lenders that make federally related mortgage loans. The 
Secretary shall also distribute to such lenders lists, 
organized by location, of homeownership counselors certified 
under section 106(e) of the Housing and Urban Development Act 
of 1968 (12 U.S.C. 1701x(e)) for use in complying with the 
requirement under subsection (c) of this section.
  (b) Contents.--Each booklet shall be in such form and detail 
as the Secretary shall prescribe and, in addition to such other 
information as the Secretary may provide, shall include in 
plain and understandable language the following information:
          (1) A description and explanation of the nature and 
        purpose of the costs incident to a real estate 
        settlement or a federally related mortgage loan. The 
        description and explanation shall provide general 
        information about the mortgage process as well as 
        specific information concerning, at a minimum--
                  (A) balloon payments;
                  (B) prepayment penalties; and
                  (C) the trade-off between closing costs and 
                the interest rate over the life of the loan.
          (2) An explanation and sample of the uniform 
        settlement statement required by section 4.
          (3) A list and explanation of lending practices, 
        including those prohibited by the Truth in Lending Act 
        or other applicable Federal law, and of other unfair 
        practices and unreasonable or unnecessary charges to be 
        avoided by the prospective buyer with respect to a real 
        estate settlement.
          (4) A list and explanation of questions a consumer 
        obtaining a federally related mortgage loan should ask 
        regarding the loan, including whether the consumer will 
        have the ability to repay the loan, whether the 
        consumer sufficiently shopped for the loan, whether the 
        loan terms include prepayment penalties or balloon 
        payments, and whether the loan will benefit the 
        borrower.
          (5) An explanation of the right of rescission as to 
        certain transactions provided by sections 125 and 129 
        of the Truth in Lending Act.
          (6) A brief explanation of the nature of a variable 
        rate mortgage and a reference to the booklet entitled 
        ``Consumer Handbook on Adjustable Rate Mortgages'', 
        published by the Board of Governors of the Federal 
        Reserve System pursuant to section 226.19(b)(1) of 
        title 12, Code of Federal Regulations, or to any 
        suitable substitute of such booklet that such Board of 
        Governors may subsequently adopt pursuant to such 
        section.
          (7) A brief explanation of the nature of a home 
        equity line of credit and a reference to the pamphlet 
        required to be provided under section 127A of the Truth 
        in Lending Act.
          (8) Information about homeownership counseling 
        services made available pursuant to section 106(a)(4) 
        of the Housing and Urban Development Act of 1968 (12 
        U.S.C. 1701x(a)(4)), a recommendation that the consumer 
        use such services, and notification that a list of 
        certified providers of homeownership counseling in the 
        area, and their contact information, is available.
          (9) An explanation of the nature and purpose of 
        escrow accounts when used in connection with loans 
        secured by residential real estate and the requirements 
        under section 10 of this Act regarding such accounts.
          (10) An explanation of the choices available to 
        buyers of residential real estate in selecting persons 
        to provide necessary services incidental to a real 
        estate settlement.
          (11) An explanation of a consumer's responsibilities, 
        liabilities, and obligations in a mortgage transaction.
          (12) An explanation of the nature and purpose of real 
        estate appraisals, including the difference between an 
        appraisal and a home inspection.
          (13) Notice that the Office of Housing of the 
        Department of Housing and Urban Development has made 
        publicly available a brochure regarding loan fraud and 
        a World Wide Web address and toll-free telephone number 
        for obtaining the brochure.
The booklet prepared pursuant to this section shall take into 
consideration differences in real estate settlement procedures 
that may exist among the several States and territories of the 
United States and among separate political subdivisions within 
the same State and territory.
  (c) Each lender shall include with the booklet a good faith 
estimate of the amount or range of charges for specific 
settlement services the borrower is likely to incur in 
connection with the settlement as prescribed by the Secretary. 
Each lender shall also include with the booklet a reasonably 
complete or updated list of homeownership counselors who are 
certified pursuant to section 106(e) of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701x(e)) and located in the 
area of the lender.
  (d) Each lender referred to in subsection (a) shall provide 
the booklet described in such subsection to each person from 
whom it receives or for whom it prepares a written application 
to borrow money to finance the purchase of residential real 
estate. The lender shall provide the HUD-issued booklet in the 
version that is most appropriate for the person receiving it. 
Such booklet shall be provided by delivering it or placing it 
in the mail not later than 3 business days after the lender 
receives the application, but no booklet need be provided if 
the lender denies the application for credit before the end of 
the 3-day period.

           *       *       *       *       *       *       *


                            DISSENTING VIEWS

    Current conditions in the housing market--declining prices, 
increasing numbers of defaults and foreclosures, and 
illiquidity in the secondary market--have resulted in calls for 
the government to attempt to stabilize the market by offering 
Federal assistance to borrowers who owe more on their mortgages 
than their houses are worth. H.R. 5830 seeks to achieve this 
objective by making available $300 billion in Federal 
guarantees to transition borrowers in ``underwater'' mortgages 
into more affordable loans, by significantly reducing the 
principal on their existing mortgages and offering them new 
loans insured by the Federal Housing Administration (FHA). In 
doing so, the bill would transfer the downside risks currently 
being borne by the borrowers, lenders and investors in such 
mortgages to the American taxpayer. Because we believe that 
H.R. 5830 is both profoundly unfair and unlikely to achieve its 
stated objectives, we oppose this legislation and voted against 
reporting it favorably to the House.

                     ROOTS OF THE SUBPRIME PROBLEM

    Economists agree that the roots of the current problems in 
the mortgage market can be traced to earlier this decade, when 
falling interest rates encouraged lenders to significantly 
relax--and in some cases abandon--sound underwriting criteria 
when qualifying borrowers for mortgages. Borrowers who at one 
time might have been denied credit or granted limited credit 
found themselves able to borrow larger sums, and they took 
advantage of this opportunity to buy larger, more expensive 
houses than they otherwise would have been able to afford.
    As a consequence of low interest rates and weak 
underwriting standards, the availability of mortgage credit 
exploded from the late 1990s through 2006. Homeownership rates 
rose from the 64 percent range in the 35 years prior to 1995 to 
an all-time high of 69 percent in 2004. The growing demand for 
houses, fueled by cheap and easily available credit, caused 
home prices to skyrocket: according to the National Association 
of Realtors, the national median home price went from $110,500 
in 1995 to $190,000 ten years later. Economists have pointed 
out that these inflated prices reflected the euphoria of a 
market fueled by easy credit. Compared to other economic 
fundamentals, such as rental prices or incomes, these soaring 
housing prices were simply unsustainable, and the market is now 
in the process of correcting these excesses.
    Despite the higher risk associated with mortgages to 
borrowers with checkered credit histories, the opportunities to 
earn higher rates of return from subprime mortgages induced 
many lenders to further loosen their underwriting standards 
during the period 2005 to 2007, introducing even more risk into 
the system. Instead of protecting themselves against this 
increased risk by requiring borrowers to make higher down 
payments, lenders engineered new loans that permitted borrowers 
to buy with little or no money down, and compensated for this 
increased risk by charging these borrowers higher interest 
rates and fees. Lenders further eroded the integrity of the 
underwriting process by permitting borrowers to sign up for so-
called ``low documentation'' or ``no documentation'' loans, 
which became known in the mortgage industry as ``liar loans,'' 
so named because they often featured loan applications 
characterized by misstated or falsified income.
    As long as housing prices continued to rise, the risks 
inherent in such shoddy underwriting practices remained hidden. 
Borrowers who had stretched to purchase homes that they 
otherwise could not afford either refinanced their mortgages 
against home price appreciation or sold to other buyers and 
paid off their mortgages. Investors in mortgage-backed 
securities believed their risk was limited: even if risky 
borrowers defaulted, home price appreciation all but guaranteed 
that the houses that secured the underlying mortgages could 
either be resold to other buyers through voluntary sales or, if 
necessary, foreclosed upon and resold at auction with only 
minimal impairment of the collateral securing the loan.
    As the subprime market began to collapse in late 2006, the 
assumption that home prices would rise forever was exposed as 
fundamentally flawed. The Wall Street Journal recently reported 
that home prices in 20 major U.S. metropolitan areas have 
plunged 10.7 percent, a record. As a result of declining 
property values, many borrowers now owe more on their homes 
than those homes are worth. One economist has estimated that 
8.8 million mortgages are now ``underwater,'' and expects that 
figure to rise as housing prices further decline. Some analysts 
believe that even if some significant percentage of these 
borrowers can afford to make their mortgage payments, the 
difference between what they owe on their houses and the home's 
market value--a difference that has come to be known as 
``negative equity''--may encourage these borrowers to walk away 
from their homes. Some commentators have even gone so far as to 
say that in these circumstances, it is economically rational 
for borrowers to purposefully default on these mortgages.
    The so-called ``negative equity'' problem has shifted the 
terms of the discussion of the ``foreclosure crisis.'' Last 
year, the discussion focused on foreclosures that some believed 
would be brought on by steep interest rate resets on adjustable 
rate subprime mortgages that borrowers would not be able to 
afford. But due largely to aggressive reductions in the federal 
funds rate by the Federal Reserve beginning in mid-2007, the 
impact of mortgage rate resets has not been nearly as dire as 
many had predicted. Indeed, in some cases the Fed rate cuts 
have actually resulted in lowering borrowers' monthly payments 
when their rates reset.
    The Boston Federal Reserve examined 1.5 million 
homeownerships over twenty years and found that the 
overwhelming reason for subprime foreclosures was not that 
homeowners lacked the ability to make their mortgage payments, 
but rather that borrowers chose to walk away from their 
mortgages when the value of their homes had declined. Thus, 
rather than focusing assistance on those homeowners unable to 
afford their monthly mortgage payments, H.R. 5830 tries to keep 
these homeowners from walking away from mortgages for which 
they may be able to afford to make the payments but choose not 
to. As Representative Mel Watt said during Committee 
consideration of H.R. 5830, ``one of our intentions was to try 
to capture those people whose loans were under water . . . who 
are intentionally walking away because the mortgage is 
substantially greater than the value.'' But as Treasury 
Secretary Henry Paulson has noted, ``[--A]ny homeowner who can 
afford his mortgage payment but chooses to walk away from an 
underwater property is simply a speculator. Washington cannot 
create any new mortgage program to induce these speculators to 
continue to own these homes, unless someone else foots the 
bill.'' Under H.R. 5830, that ``someone else'' is ultimately 
the U.S. taxpayer.

                       FAIRNESS AND MORAL HAZARD

    The primary basis for Republican opposition to H.R. 5830 
can be found in the legislation's fundamental unfairness and 
skewed incentives. The bill rewards financial irresponsibility 
and punishes prudence. By providing ``gift equity'' to those 
homeowners who made bad choices or engaged in financial 
irresponsibility, it does an injustice to those millions of 
Americans--including the 51 million making their mortgage 
payments on time, sometimes at considerable personal sacrifice, 
and the 34 million renters--who chose a more responsible 
course. Those Americans must now watch as their neighbors 
receive a taxpayer-subsidized windfall in the form of sizable 
write-downs in loan principal and reduced monthly mortgage 
payments.
    Perhaps even more harmful for those of us concerned about 
moral hazard and personal responsibility is the message that we 
risk sending to financial institutions and individuals that 
when they willingly take on excessive and ill-advised risks, 
the government will always ride to their rescue. As the 
Congressional Budget Office noted in a recent report on policy 
options for dealing with turmoil in the housing market: ``If 
the federal government is expected to step in when economic 
times are bad, then lenders and borrowers do not need to 
consider the possibility of bad times when making decisions.'' 
Unless individual market participants receive a clear and 
unmistakable signal that they must bear the consequences of 
their own decisions, severe market disruptions like the one 
that has unfolded over the past year will be repeated over and 
over again, with grave damage to our country's economic future.
    If there could be a rationale for legislation of this kind, 
it would be that it was targeted toward the poor or victims of 
fraud. Instead, H.R. 5830 has been designed to bail out the 
affluent too. Because the FHA is now authorized to guarantee 
mortgages valued as high as $729,750, some of the beneficiaries 
of the program established under the legislation could be quite 
wealthy. The Majority rejected amendments that would limit 
eligibility by, among other measures, imposing a means test. As 
a result, H.R. 5830 risks conferring a substantial government 
subsidy on those who are neither worthy nor needy.
    Moreover, this legislation also bails out investors who 
willingly and knowingly purchased securities that were cobbled 
together from mortgages that were poorly underwritten. The 
investors and lenders that would benefit from H.R. 5830 are 
those that chased high rates of return even as they ignored the 
obvious risks of subprime lending and declining housing values. 
These market participants eagerly reaped the upside potential 
when housing prices soared; H.R. 5830 offers them a mechanism 
for offloading the downside risk on the government now that the 
market has soured.
    The proponents of H.R. 5830 point to the ``haircut'' that 
investors must take in order to participate in the FHA 
refinancing program to rebut the contention that the bill would 
bail them out. But this argument is specious. Because 
participation in the plan is voluntary, no mortgage will be 
placed in the program unless an investor concludes that the 
loan is likely to fail. The incentives are perverse: Investors 
will place the mortgages they think are worth less than the 
``haircut'' into the program, to be refinanced with an FHA-
guaranteed loan. Given the substantial risk that these loans 
represent--the plan is after all aimed at those borrowers most 
likely to default or who are ``intentionally walking away''--no 
lender would refinance but for the FHA guarantee. The result is 
that taxpayers who acted responsibly during the run-up in 
housing prices are left to underwrite the costs of cleaning up 
after irresponsible borrowers, lenders, and investors. During 
Committee consideration of H.R. 5830, Republicans offered a 
series of amendments designed to mitigate these moral hazard 
and adverse selection issues, only to have them opposed 
unanimously by Committee Democrats.

                         IMPLEMENTATION ISSUES

    Economists of every stripe have pointed out that by every 
conceivable measure, housing prices remain inflated and will 
still have to come down at least another 15 percent to return 
to historical levels. There is currently a 10 months' over-
supply of existing homes, which H.R. 5830 will do nothing to 
address. Because prospective customers cannot afford to buy at 
current prices, those prices will have to fall, wiping out 
whatever minimal impact H.R. 5830 will have on home prices. 
Given that the Federal Reserve estimates that owner-occupied 
real estate is worth almost $21 trillion, H.R. 5830's goal of 
arresting home price declines by refinancing a maximum of $300 
billion in mortgages is as futile as it is unfair.
    Even if one concedes that a plan of this nature could work, 
because the market remains so unsettled, there is no way of 
knowing whether it will work. No one knows where the market's 
bottom is. Thus, there is no way of knowing how many distressed 
homeowners this would help. No reasonable person can predict 
whether the principal write-downs, returns on equity or exit 
premiums in this bill are rationally related to actual, 
eventual home values. And because the numbers are based on 
nothing more than guesswork, it is simply unreasonable to ask 
the taxpayer to bear the risk of that guess being off the mark.
    Furthermore, many believe that FHA lacks the administrative 
capacity to insure an additional $300 billion in mortgages, 
which would represent a massive expansion of the agency's 
current $180 billion portfolio. Moreover, given that the 
program contemplated by H.R. 5830 depends on a large-scale re-
underwriting of troubled mortgages, it is far from certain that 
the program could be launched in time to make any difference in 
the real estate market. Interest rate reduction and extensions 
of amortization periods are better options anyway: They are 
immediate, easier to administer and can be implemented without 
reliance upon a cumbersome FHA bureaucracy. Indeed, perhaps the 
best that can be said about this legislation is that given its 
inherent unfairness and potential to put taxpayers at risk for 
loans that investors are all too eager to be rid of, the 
insurmountable difficulties of implementing it may mean that 
whatever harm it ultimately ends up doing should be limited.

                               CONCLUSION

    For all of the foregoing reasons, we must oppose H.R. 5830, 
and will continue to push for changes to the bill as it moves 
through the House to limit taxpayer exposure and discourage 
moral hazard.

                                   Spencer Bachus.
                                   Ed Royce.
                                   Tom Feeney.
                                   John Campbell.
                                   K. Marchant.
                                   Scott Garrett.
                                   Adam H. Putnam.
                                   Thomas Price.
                                   J. Gresham Barrett.
                                   Jeb Hensarling.
                                   Ron Paul.
                                   Patrick T. McHenry.
                                   Michele Bachmann.
                                   Donald Manzullo.
                                   Geoff Davis.
                                   Kevin McCarthy.
                                   Peter J. Roskam.
                                   Randy Neugebauer.
                                   Stevan Pearce.
                                   Judy Biggert.

                                  
