[House Report 110-622]
[From the U.S. Government Publishing Office]
110th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 110-622
======================================================================
PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENTS TO THE BILL (H.R.
3221) MOVING THE UNITED STATES TOWARD GREATER ENERGY INDEPENDENCE AND
SECURITY, DEVELOPING INNOVATIVE NEW TECHNOLOGIES, REDUCING CARBON
EMISSIONS, CREATING GREEN JOBS, PROTECTING CONSUMERS, INCREASING CLEAN
RENEWABLE ENERGY PRODUCTION, AND MODERNIZING OUR ENERGY INFRASTRUCTURE,
AND TO AMEND THE INTERNAL REVENUE CODE OF 1986 TO PROVIDE TAX
INCENTIVES FOR THE PRODUCTION OF RENEWABLE ENERGY AND ENERGY
CONSERVATION
_______
May 6, 2008.--Referred to the House Calendar and ordered to be printed
_______
Mr. Welch, from the Committee on Rules, submitted the following
R E P O R T
[To accompany H. Res. 1175]
The Committee on Rules, having had under consideration
House Resolution 1175, by a record vote of 9-4, report the same
to the House with the recommendation that the resolution be
adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for the consideration of the Senate
amendments to H.R. 3221, the American Housing Rescue and
Foreclosure Prevention Act of 2008. The resolution makes in
order a motion by the Chairman of the Committee on Financial
Services to concur in the Senate amendment to the text with
each of the three House amendments printed in this report. The
rule waives all points of order against the motion except for
clause 10 of rule XXI and provides that the Senate amendments
and the motion shall be considered as read. The rule provides
three hours of debate on the motion, with two hours equally
divided and controlled by the chairman and ranking minority
member of the Committee on Financial Services and one hour
equally divided and controlled by the chairman and ranking
minority member of the Committee on Ways and Means. The rule
also provides that the Chair shall divide the question of
adoption of the motion among the three House amendments. The
rule provides that upon adoption of the motion specified in the
first section of the resolution, a motion that the House concur
in the Senate amendment to the title shall be considered as
adopted. The rule provides that the Chair may postpone further
consideration of the motion to a time designated by the
Speaker.
EXPLANATION OF WAIVERS
The waiver of all points of order against the motion
(except clause 10 of rule XXI) includes a waiver of clause 7 of
rule XVI, regarding nongermane amendments and includes a waiver
of section 303 of the Congressional Budget Act, prohibiting
consideration of legislation, as reported, providing new budget
authority, change in revenues, change in public debt, new
entitlement authority, or new credit authority for a fiscal
year until the budget resolution for that year has been agreed
to.
COMMITTEE VOTES
The results of each record vote on an amendment or motion
to report, together with the names of those voting for and
against, are printed below:
Rules Committee record vote No. 481
Date: May 6, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Dreier.
Summary of motion: To grant an open rule.
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings
(WA)--Yea; Sessions--Yea; Slaughter--Nay.
Rules Committee record vote No. 482
Date: May 6, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Dreier.
Summary of motion: To report an open rule providing for the
consideration of H.R. 5830, the FHA Housing Stabilization and
Homeownership Retention Act of 2008, as well as a structured
rule for consideration of H.R. 5720, the Housing Assistance Tax
Act of 2008, which would provide for one germane amendment in
the nature of a substitute offered by Rep. McCrery, or his
designee, which would have to comply with all the rules of the
House. The rule would also authorize the Chairman of the
Committee on Energy and Commerce to move to take from the
Speaker's table H.R. 3221, and to consider the Senate amendment
thereto in the House and to move to strike all after the
enacting clause, insert in lieu thereof the provisions of H.R.
5830 and 5720 as adopted by the House, insist on the House
amendments and request a conference thereon.
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings
(WA)--Yea; Sessions--Yea; Slaughter--Nay.
Rules Committee record vote No. 483
Date: May 6, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Dreier.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Bachus (AL), Rep. Biggert
(IL), and Rep. Capito (WV), #7, an amendment in the nature of a
substitute, which, among other provisions, the amendment would
establish a nationwide database of mortgage originators to
prevent fraud; modernize the Federal Housing Administration;
reform the Government Sponsored Enterprises; promote housing
counseling; reform the appraisal industry; provide monies to
the FBI to combat mortgage fraud; establish housing counseling
opportunities for returning veterans; and improve disclosures
for new mortgages and for monthly mortgage statements.
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings
(WA)--Yea; Sessions--Yea; Slaughter--Nay.
Rules Committee record vote No. 484
Date: May 6, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Diaz-Balart.
Summary of motion: To make in order and provide appropriate
waivers for amendments by Rep. Garrett (NJ), #8 and 9, which
would have the FHA insure only 90% of each of the new loans
instead of 100% as currently written. The second amendment, #9,
removes the provision allowing mortgagors a 10% equity stake.
Mortgagors would instead receive new loans underwritten with
affordable mortgage payments on extended terms.
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings
(WA)--Yea; Sessions--Yea; Slaughter--Nay.
Rules Committee record vote No. 485
Date: May 6, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Diaz-Balart.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Mario Diaz-Balart (FL), #10,
which increases the tax deduction amount for property taxes
from $350 (or $700 for joint filers) to $500 (or $1,000 for
joint filers).
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings
(WA)--Yea; Sessions--Yea; Slaughter--Nay.
Rules Committee record vote No. 486
Date: May 6, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Hastings (WA).
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Price (GA), #2 and 3, which
strikes Title VI--Housing Assistance Authorization and which
requires offsets for all new spending.
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings
(WA)--Yea; Sessions--Yea; Slaughter--Nay.
Rules Committee record vote No. 487
Date: May 6, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Hastings (WA).
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Price (GA), #5, which
prohibits the use of funds set aside in Title I for housing and
legal counseling from being used to provide, obtain, or arrange
on behalf of a homeowner, legal representation involving or for
the purposes of civil litigation.
Results: Defeated 4-9
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings
(WA)--Yea; Sessions--Yea; Slaughter--Nay.
Rules Committee record vote No. 488
Date: May 6, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Sessions.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Terry, #1, which amends the
Rangel amendment to create a one-time tax credit for homebuyers
of 10 percent of the home's purchase price.
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings
(WA)--Yea; Sessions--Yea; Slaughter--Nay.
Rules Committee record vote No. 489
Date: May 6, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Sessions.
Summary of motion: To make in order and provide appropriate
waivers for an amendment by Rep. Hensarling (TX), #6, which
would limit the program to families with incomes that do not
exceed 140 percent of the median income for the area in which
the housing is located.
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings
(WA)--Yea; Sessions--Yea; Slaughter--Nay.
Rules Committee record vote No. 490
Date: May 6, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Dreier.
Summary of motion: Add as a new section at the end of the
resolution as follows: That upon adoption of this resolution,
H.R. 2642 and H.R. 2638, and their accompanying papers are laid
on the table.
Results: Defeated 4-9.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Sutton--Nay; Dreier--Yea; Diaz-Balart--Yea; Hastings
(WA)--Yea; Sessions--Yea; Slaughter--Nay.
Rules Committee record vote No. 491
Date: May 6, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. McGovern.
Summary of motion: To report the rule.
Results: Adopted 9-4.
Vote by Members: McGovern--Yea; Hastings (FL)--Yea;
Matsui--Yea; Cardoza--Yea; Welch--Yea; Castor--Yea; Arcuri--
Yea; Sutton--Yea; Dreier--Nay; Diaz-Balart--Nay; Hastings
(WA)--Nay; Sessions--Nay; Slaughter--Yea.
SUMMARY OF AMENDMENTS MADE IN ORDER
Summary of the House Amendment #1 to the Senate Amendment to H.R. 3221
made in order under the rule
The housing package amendment consists of a number of
reforms that have passed the House and/or the Committee on
Financial Services and have been assembled as conformed, such
as bills regarding FHA refinance (H.R. 5830), FHA modernization
(HR 1852), GSE reform (H.R. 1427), loan modification (H.R.
5579), community development investments (H.R. 1066), and
certain housing preservation provisions from H.R. 1851, as well
as a proposal to protect disabled veterans from discrimination
in government mortgage programs.
Summary of the House Amendment #2 to the Senate Amendment to H.R. 3221
made in order under the rule
The amendment consists primarily of the text of H.R. 5720,
the Housing Assistance Tax Act of 2008 as reported from the
Ways and Means Committee on April 24, 2008. Middle class
families would be eligible to receive a tax benefit that is
equivalent to an interest-free loan of up to $7,500 towards the
purchase of a first home and existing homeowners claiming the
standard deduction would be allowed an additional standard
deduction for property taxes up to $700 for a married couple
filing jointly. States would receive a temporary increase in
low-income housing tax credits and $10 billion of additional
tax-exempt bond authority to provide low-interest loans to
first time homebuyers, to build low-income rental housing and
to refinance certain subprime mortgages. Additionally it
provides that municipal bonds that are guaranteed by Federal
home loan banks would be eligible for treatment as tax exempt
bonds. It would also make necessary improvements to the low-
income housing tax credit and other incentives for low-income
rental housing as well as make certain reforms to the rules
governing real estate investment trusts. The amendment also
includes language to provide better coordination between the
housing tax credit and multifamily bond programs and housing
programs under the Department of Housing and Urban Development
(HUD) and the Rural Housing Service (RHS), including actions to
streamline and expedite transactions involving these different
programs. The amendment also extends the period following
release from active duty (from 90 days to one year) during
which a servicemember shall be protected from foreclosure, and
require that any charges accrued during that period of time be
fully disclosed to the servicemember. The cost of the amendment
is offset with a tax compliance provision included in the
President's Budget and by delaying the effective date of a tax
benefit for multinational companies that has not yet taken
effect.
Summary of the House Amendment #3 to the Senate Amendment to H.R. 3221
made in order under the rule
The Brad Miller/LaTourette amendment affirms the right of
states to prevent abusive foreclosure practices and to
establish rules concerning the foreclosure process by
clarifying that this Act, the National Bank Act and the Home
Owner's Loan Act do not preempt state laws regulating the
foreclosure of residential real property or the treatment of
foreclosed property.
TEXT OF AMENDMENTS MADE IN ORDER
TEXT OF THE HOUSE AMENDMENT #1 TO THE SENATE AMENDMENT TO H.R. 3221
MADE IN ORDER UNDER THE RULE
In the matter proposed to be inserted by the amendment of the
Senate to the text of the bill, strike section 1 and all that
follows through the end of title V and insert the following:
SEC. 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``American
Housing Rescue and Foreclosure Prevention Act of 2008''.
(b) Table of Contents.--The table of contents for this Act is
as follows:
*ERR08*Sec. 1. Short title and table of contents.
TITLE I--FHA HOUSING STABILIZATION AND HOMEOWNERSHIP RETENTION
Sec. 101. Short title.
Subtitle A--Homeownership Retention
Sec. 111. Purposes.
Sec. 112. Insurance of homeownership retention mortgages.
Sec. 113. Study of Auction or Bulk Refinance Program.
Sec. 114. Temporary increase in maximum loan guaranty amount for certain
housing loans guaranteed by Secretary of Veterans Affairs.
Sec. 115. 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. 116. 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.
Subtitle B--Office of Housing Counseling
Sec. 131. Short title.
Sec. 132. Establishment of Office of Housing Counseling.
Sec. 133. Counseling procedures.
Sec. 134. Grants for housing counseling assistance.
Sec. 135. Requirements to use HUD-certified counselors under HUD
programs.
Sec. 136. Study of defaults and foreclosures.
Sec. 137. Definitions for counseling-related programs.
Sec. 138. Updating and simplification of mortgage information booklet.
Subtitle C--Combating Mortgage Fraud
Sec. 151. Authorization of appropriations to combat mortgage fraud.
TITLE II--FHA REFORM AND MANUFACTURED HOUSING LOAN INSURANCE
MODERNIZATION
Subtitle A--FHA Reform
Sec. 201. Short title.
Sec. 202. Findings and purposes.
Sec. 203. Maximum principal loan obligation.
Sec. 204. Extension of mortgage term.
Sec. 205. Downpayment simplification.
Sec. 206. Mortgage insurance premiums for qualified homeownership
assistance entities and higher-risk borrowers.
Sec. 207. Risk-based mortgage insurance premiums.
Sec. 208. Payment incentives for higher-risk borrowers.
Sec. 209. Protections for higher-risk borrowers.
Sec. 210. Refinancing mortgages.
Sec. 211. Annual reports on new programs and loss mitigation.
Sec. 212. Insurance for single family homes with licensed child care
facilities.
Sec. 213. Rehabilitation loans.
Sec. 214. Discretionary action.
Sec. 215. Insurance of condominiums and manufactured housing.
Sec. 216. Mutual Mortgage Insurance Fund.
Sec. 217. Hawaiian home lands and Indian reservations.
Sec. 218. Conforming and technical amendments.
Sec. 219. Home equity conversion mortgages.
Sec. 220. Study on participation of mortgage brokers and correspondent
lenders.
Sec. 221. Conforming loan limit in disaster areas.
Sec. 222. Failure to pay amounts from escrow accounts for single family
mortgages.
Sec. 223. Acceptable identification for FHA mortgagors.
Sec. 224. Pilot program for automated process for borrowers without
sufficient credit history.
Sec. 225. Sense of Congress regarding technology for financial systems.
Sec. 226. Clarification of disposition of certain properties.
Sec. 227. Valuation of multifamily properties in noncompetitive sales by
HUD to states and localities.
Sec. 228. Limitation on mortgage insurance premium increases.
Sec. 229. Civil money penalties for improperly influencing appraisals.
Sec. 230. Mortgage insurance premium refunds.
Sec. 231. Savings provision.
Sec. 232. Implementation.
Subtitle B--FHA Manufactured Housing Loan Insurance Modernization
Sec. 251. Short title.
Sec. 252. Findings and purposes.
Sec. 253. Exception to limitation on financial institution portfolio.
Sec. 254. Insurance benefits.
Sec. 255. Maximum loan limits.
Sec. 256. Insurance premiums.
Sec. 257. Technical corrections.
Sec. 258. Revision of underwriting criteria.
Sec. 259. Requirement of social security account number for assistance.
Sec. 260. GAO study of mitigation of tornado risks to manufactured
homes.
TITLE III--REFORM OF GOVERNMENT-SPONSORED ENTITIES FOR HOUSING FINANCE
Sec. 301. Short title.
Sec. 302. Definitions.
Subtitle A--Reform of Regulation of Enterprises and Federal Home Loan
Banks
Chapter 1--Improvement of Safety and Soundness
Sec. 311. Establishment of the Federal Housing Finance Agency.
Sec. 312. Duties and authorities of Director.
Sec. 313. Federal Housing Enterprise Board.
Sec. 314. Authority to require reports by regulated entities.
Sec. 315. Disclosure of income and charitable contributions by
enterprises.
Sec. 316. Assessments.
Sec. 317. Examiners and accountants.
Sec. 318. Prohibition and withholding of executive compensation.
Sec. 319. Reviews of regulated entities.
Sec. 320. Inclusion of minorities and women; diversity in Agency
workforce.
Sec. 321. Regulations and orders.
Sec. 322. Non-waiver of privileges.
Sec. 323. Risk-based capital requirements.
Sec. 324. Minimum and critical capital levels.
Sec. 325. Review of and authority over enterprise assets and
liabilities.
Sec. 326. Corporate governance of enterprises.
Sec. 327. Required registration under Securities Exchange Act of 1934.
Sec. 328. Liaison with Financial Institutions Examination Council.
Sec. 329. Guarantee fee study.
Sec. 330. Conforming amendments.
Chapter 2--Improvement of Mission Supervision
Sec. 331. Transfer of product approval and housing goal oversight.
Sec. 332. Review of enterprise products.
Sec. 333. Conforming loan limits.
Sec. 334. Annual housing report regarding regulated entities.
Sec. 335. Annual reports by regulated entities on affordable housing
stock.
Sec. 336. Mortgagor identification requirements for mortgages of
regulated entities.
Sec. 337. Revision of housing goals.
Sec. 338. Duty to serve underserved markets.
Sec. 339. Monitoring and enforcing compliance with housing goals.
Sec. 340. Affordable Housing Fund.
Sec. 341. Consistency with mission.
Sec. 342. Enforcement.
Sec. 343. Conforming amendments.
Chapter 3--Prompt Corrective Action
Sec. 345. Capital classifications.
Sec. 346. Supervisory actions applicable to undercapitalized regulated
entities.
Sec. 347. Supervisory actions applicable to significantly
undercapitalized regulated entities.
Sec. 348. Authority over critically undercapitalized regulated entities.
Sec. 349. Conforming amendments.
Chapter 4--Enforcement Actions
Sec. 351. Cease-and-desist proceedings.
Sec. 352. Temporary cease-and-desist proceedings.
Sec. 353. Prejudgment attachment.
Sec. 354. Enforcement and jurisdiction.
Sec. 355. Civil money penalties.
Sec. 356. Removal and prohibition authority.
Sec. 357. Criminal penalty.
Sec. 358. Subpoena authority.
Sec. 359. Conforming amendments.
Chapter 5--General Provisions
Sec. 361. Boards of enterprises.
Sec. 362. Report on portfolio operations, safety and soundness, and
mission of enterprises.
Sec. 363. Conforming and technical amendments.
Sec. 364. Study of alternative secondary market systems.
Sec. 365. Effective date.
Subtitle B--Federal Home Loan Banks
Sec. 371. Definitions.
Sec. 372. Directors.
Sec. 373. Federal Housing Finance Agency oversight of Federal Home Loan
Banks.
Sec. 374. Joint activities of Banks.
Sec. 375. Sharing of information between Federal Home Loan Banks.
Sec. 376. Reorganization of Banks and voluntary merger.
Sec. 377. Securities and Exchange Commission disclosure.
Sec. 378. Community financial institution members.
Sec. 379. Technical and conforming amendments.
Sec. 380. Study of affordable housing program use for long-term care
facilities.
Sec. 381. Effective date.
Subtitle C--Transfer of Functions, Personnel, and Property of Office of
Federal Housing Enterprise Oversight, Federal Housing Finance Board, and
Department of Housing and Urban Development
Chapter 1--Office of Federal Housing Enterprise Oversight
Sec. 385. Abolishment of OFHEO.
Sec. 386. Continuation and coordination of certain regulations.
Sec. 387. Transfer and rights of employees of OFHEO.
Sec. 388. Transfer of property and facilities.
Chapter 2--Federal Housing Finance Board
Sec. 391. Abolishment of the Federal Housing Finance Board.
Sec. 392. Continuation and coordination of certain regulations.
Sec. 393. Transfer and rights of employees of the Federal Housing
Finance Board.
Sec. 394. Transfer of property and facilities.
Chapter 3--Department of Housing and Urban Development
Sec. 395. Termination of enterprise-related functions.
Sec. 396. Continuation and coordination of certain regulations.
Sec. 397. Transfer and rights of employees of Department of Housing and
Urban Development.
Sec. 398. Transfer of appropriations, property, and facilities.
TITLE IV--EMERGENCY MORTGAGE LOAN MODIFICATION
Sec. 401. Short title.
Sec. 402. Safe harbor for qualified loan modifications or workout plans
for certain residential mortgage loans.
TITLE V--OTHER HOUSING PROVISIONS
Sec. 501. Depository Institution Community Development Investments
Enhancement .
Sec. 502. Preservation of certain affordable housing dwelling units.
Sec. 503. Eligibility of certain projects for enhanced voucher
assistance.
Sec. 504. Transfer of certain rental assistance contracts.
Sec. 505. Protection against discriminatory treatment.*ERR08*
TITLE I--FHA HOUSING STABILIZATION AND HOMEOWNERSHIP RETENTION
SEC. 101. SHORT TITLE.
This title may be cited as the ``FHA Housing Stabilization
and Homeownership Retention Act of 2008''.
Subtitle A--Homeownership Retention
SEC. 111. PURPOSES.
The purposes of this subtitle are--
(1) to create an FHA program, which is voluntary on
the part of borrowers and existing mortgage loan
holders, including both existing senior mortgage loan
holders and existing subordinate 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. 112. 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 securing 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 securing
the mortgage insured under this section is the only
residence in which the mortgagor has any present
ownership interest. With regard to such certification,
the Oversight Board may create exceptions for
mortgagors who have only a partial ownership interest
in a residence other than the residence securing the
mortgage insured under this section.
``(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 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 securing the mortgage to
be insured under this section 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
section 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 securing 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). In the case
of a refinance, non-arms length transaction, or
such other transaction as the Oversight Board
shall determine, the proceeds shall be based on
the current appraised value at the time of the
refinance or transaction.
``(D) Exit premium.--Upon any refinancing of
the mortgage insured under this section or any
sale or disposition of the residence securing
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 the entire amount
of the net proceeds described in
subparagraph (C) if such net proceeds
are less than 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 available for profit-
sharing, as described in subparagraph
(E), 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) Net proceeds available for profit-
sharing.--With respect to any mortgage insured
under this section, the net proceeds available
for purposes of subparagraph (D)(ii) shall be
any proceeds resulting from the sale,
refinancing, or other disposition of the
residence securing the mortgage that remain
after deducting the original insured principal
obligation of the mortgage. In the case of a
refinance, non-arms length transaction, or such
other transaction as the Oversight Board shall
determine, the proceeds shall be based on the
current appraised value at the time of the
refinance or transaction.
``(F) 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 shall
document and verify the income of the mortgagor or non-
filing status by procuring (A) an income tax return
transcript of the income tax returns of the mortgagor,
or (B) a copy of the income tax returns for the
Internal Revenue Service, 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 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 section until the termination under
subsection (n) of the program under this section.
``(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 before closing 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) $230,000,000 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) funds shall be targeted to States and
communities based on their levels of
foreclosures and delinquencies in 2007 and
2008;
``(B) 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;
``(C) $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; except that no funds under this
subparagraph shall be used for class action
litigation;
``(D) $20,000,000 of the funds made available
pursuant to this paragraph shall be used for
such counseling for veterans recently returning
from active duty in the Armed Forces;
``(E) the NRC shall give priority
consideration for funding with amounts made
available pursuant to this paragraph, except
for funds made available under subparagraphs
(B), (C), and (D), 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;
``(F) except with respect to funds reserved
under subparagraphs (B), (C), and (D), 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
``(G) 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''.
(c) FHA Reverse Mortgage Program.--Section 255(g) of the
National Housing Act (12 U.S.C. 1715z-20(g)) is amended by
striking the first sentence.
SEC. 113. 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 112(a)
of this title), 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 112(a) of this title 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. 114. 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. 115. 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 Securities and Exchange Commission,
in consultation with the Board of Governors of the Federal
Reserve System, shall conduct a study on fair value accounting
standards applicable to financial institutions, including
depository institutions, with respect to their residential
mortgages that are at risk of foreclosure and mortgage-backed
securities involving such mortgages, the effects of such
accounting standards on a financial institution's balance sheet
and 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 advisability and feasibility of
modifications of such standards 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 Securities and Exchange Commission
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 Commission
with respect to the study conducted under subsection (a) and
such administrative and legislative recommendations as the
Commission may determine to be appropriate.
SEC. 116. 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.
Subtitle B--Office of Housing Counseling
SEC. 131. SHORT TITLE.
This subtitle may be cited as the ``Expand and Preserve Home
Ownership Through Counseling Act''.
SEC. 132. 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 136 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. 133. 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. 134. 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. 135. 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. 136. 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. 137. 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 subtitle, 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. 138. 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.''.
Subtitle C--Combating Mortgage Fraud
SEC. 151. 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.
TITLE II--FHA REFORM AND MANUFACTURED HOUSING LOAN INSURANCE
MODERNIZATION
Subtitle A--FHA Reform
SEC. 201. SHORT TITLE.
This subtitle may be cited as the ``Expanding American
Homeownership Act of 2008''.
SEC. 202. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) one of the primary missions of the Federal
Housing Administration (FHA) single family mortgage
insurance program is to reach borrowers who are
underserved, or not served, by the existing
conventional mortgage marketplace;
(2) the FHA program has a long history of innovation,
which includes pioneering the 30-year self-amortizing
mortgage and a safe-to-seniors reverse mortgage
product, both of which were once thought too risky to
private lenders;
(3) the FHA single family mortgage insurance program
traditionally has been a major provider of mortgage
insurance for home purchases;
(4) the FHA mortgage insurance premium structure, as
well as FHA's product offerings, should be revised to
reflect FHA's enhanced ability to determine risk at the
loan level and to allow FHA to better respond to
changes in the mortgage market;
(5) during past recessions, including the oil-patch
downturns in the mid-1980s, FHA remained a viable
credit enhancer and was therefore instrumental in
preventing a more catastrophic collapse in housing
markets and a greater loss of homeowner equity; and
(6) as housing price appreciation slows and interest
rates rise, many homeowners and prospective homebuyers
will need the less-expensive, safer financing
alternative that FHA mortgage insurance provides.
(b) Purposes.--The purposes of this subtitle are--
(1) to provide flexibility to FHA to allow for the
insurance of housing loans for low- and moderate-income
homebuyers during all economic cycles in the mortgage
market;
(2) to modernize the FHA single family mortgage
insurance program by making it more reflective of
enhancements to loan-level risk assessments and changes
to the mortgage market; and
(3) to adjust the loan limits for the single family
mortgage insurance program to reflect rising house
prices and the increased costs associated with new
construction.
SEC. 203. MAXIMUM PRINCIPAL LOAN OBLIGATION.
(a) In General.--Section 203(b)(2) of the National Housing
Act (12 U.S.C. 1709(b)(2)(A)) is amended by striking
subparagraph (A) and inserting the following new subparagraph:
``(A) not to exceed the lesser of--
``(i) in the case of a 1-family
residence, 125 percent of the median 1-
family house price in the area, as
determined by the Secretary; and in the
case of a 2-, 3-, or 4-family
residence, the percentage of such
median price that bears the same ratio
to such median price as the dollar
amount limitation determined under
section 305(a)(2) of the Federal Home
Loan Mortgage Corporation Act (12
U.S.C. 1454(a)(2)) for a 2-, 3-, or 4-
family residence, respectively, bears
to the dollar amount limitation
determined under such section for a 1-
family residence; or
``(ii) 175 percent of the dollar
amount limitation determined under such
section 305(a)(2)(A) for a residence of
the applicable size (without regard to
any authority to increase such
limitations with respect to properties
located in Alaska, Guam, Hawaii, or the
Virgin Islands and without regard to
the high-cost area limitation under
such section 305(a)(2)(B));
except that the dollar amount limitation in
effect under this subparagraph for any size
residence for any area may not be less than the
greater of: (I) the dollar amount limitation in
effect under this section for the area on
October 21, 1998; or (II) 65 percent of the
dollar amount limitation determined under such
section 305(a)(2) for a residence of the
applicable size; and except that, if the
Secretary determines that market conditions
warrant such an increase, the Secretary may,
for such period as the Secretary considers
appropriate, increase the maximum dollar amount
limitation determined pursuant to the preceding
provisions of this subparagraph with respect to
any particular size or sizes of residences, or
with respect to residences located in any
particular area or areas, to an amount that
does not exceed the maximum dollar amount then
otherwise in effect pursuant to the preceding
provisions of this subparagraph for such size
residence, or for such area (if applicable), by
not more than $100,000; and''.
(b) Treatment of Temporary Loan Limit Increase.--Subsection
(a) and the amendment made by such subsection may not be
construed to in any way affect the effectiveness of section 202
of the Economic Stimulus Act of 2008 (Public Law 110-185; 122
Stat. 620).
SEC. 204. EXTENSION OF MORTGAGE TERM.
Paragraph (3) of section 203(b) of the National Housing Act
(12 U.S.C. 1709(b)(3)) is amended--
(1) by striking ``thirty-five years'' and inserting
``forty years''; and
(2) by striking ``(or thirty years if such mortgage
is not approved for insurance prior to construction)''.
SEC. 205. DOWNPAYMENT SIMPLIFICATION.
Section 203(b) of the National Housing Act (12 U.S.C.
1709(b)) is amended--
(1) in paragraph (2)--
(A) by striking subparagraph (B) and
inserting the following new subparagraph:
``(B) not to exceed an amount equal to the
sum of--
``(i) the amount of the mortgage
premium paid at the time the mortgage
is insured; and
``(ii) 97.75 percent of the appraised
value of the property.'';
(B) in the matter after and below
subparagraph (B), by striking the second
sentence (relating to a definition of ``average
closing cost'') and all that follows through
``title 38, United States Code.''; and
(C) by striking the last undesignated
paragraph (relating to counseling with respect
to the responsibilities and financial
management involved in homeownership); and
(2) in paragraph (9)--
(A) by striking the paragraph designation and
all that follows through ``Provided further,
That for'' and inserting the following:
``(9) Be executed by a mortgagor who shall have paid
on account of the property, in cash or its equivalent,
at least 3 percent of the Secretary's estimate of the
cost of acquisition (excluding the mortgage insurance
premium paid at the time the mortgage is insured).
For''; and
(B) by inserting after the period at the end
the following: ``For purposes of this
paragraph, the Secretary shall consider as cash
or its equivalent any amounts gifted by a
family member (as such term is defined in
section 201), the mortgagor's employer or labor
union, or a qualified homeownership assistance
entity, but only if there is no obligation on
the part of the mortgagor to repay the gift:
For purposes of the preceding sentence, the
term `qualified homeownership assistance
entity' means any governmental agency or
charity that has a program to provide
homeownership assistance to low- and moderate-
income families or first-time home buyers, or
any private nonprofit organization that has
such a program and evidences sufficient fiscal
soundness to protect the fiscal integrity of
the Mutual Mortgage Insurance Fund by
maintaining a minimum net worth of $4,000,000
of acceptable assets.''.
SEC. 206. MORTGAGE INSURANCE PREMIUMS FOR QUALIFIED HOMEOWNERSHIP
ASSISTANCE ENTITIES AND HIGHER-RISK BORROWERS.
Paragraph (2) of section 203(c) of the National Housing Act
(12 U.S.C. 1709(c)(2)) is amended--
(1) in subparagraph (A), in the matter preceding
subparagraph (A), by striking the first comma after
``section 234(c)'';
(2) in subparagraph (A), by inserting after the
period at the end of the second sentence the following:
``In the case of a mortgage for which any amounts
gifted by a qualified homeownership assistance entity
(as such term is defined in paragraph (9) of subsection
(b)) that is a private nonprofit organization are
treated as cash or its equivalent for purposes of
meeting the 3 percent requirement under such paragraph,
the premium payment under this subparagraph shall not
exceed 3.0 percent of the amount of the original
insured principal obligation of the mortgage.''; and
(3) by adding at the end the following new
subparagraph:
``(C) Higher-risk borrowers.--The Secretary shall
establish underwriting standards that provide for
insurance under this section of mortgages described in
the matter in this paragraph preceding subparagraph (A)
for which the mortgagor has a credit score equivalent
to a FICO score of less than 560, and may insure, and
make commitments to insure, such mortgages. Such
underwriting standards shall include establishing and
collecting premium payments that comply with the
requirements of this paragraph, except that
notwithstanding subparagraph (A), the single premium
payment collected at the time of insurance may be
established in an amount that does not exceed 3.0
percent of the amount of the original insured principal
obligation of the mortgage.''.
SEC. 207. RISK-BASED MORTGAGE INSURANCE PREMIUMS.
Section 203(c) of the National Housing Act (12 U.S.C.
1709(c)), as amended by the preceding provisions of this
subtitle, is further amended by adding at the end the following
new paragraphs:
``(4) Flexible Risk-Based Premiums.--In the case of a
mortgage referred to in paragraph (2)(C) or a mortgage
described in the third sentence of subparagraph (A) of
paragraph (2) (relating to mortgages for which amounts are
gifted by a nonprofit qualified homeownership assistance
entity), for which the loan application is received by the
mortgagee on or after the date of the enactment of the
Expanding American Homeownership Act of 2008:
``(A) In general.--The Secretary may establish a
mortgage insurance premium structure involving a single
premium payment collected prior to the insurance of the
mortgage or annual payments (which may be collected on
a periodic basis), or both, subject to the requirements
of subparagraph (B) and paragraph (5). Under such
structure, the rate of premiums for such a mortgage may
vary according to the credit risk associated with the
mortgage and the rate of any annual premium for such a
mortgage may vary during the mortgage term as long as
the basis for determining the variable rate is
established before the execution of the mortgage. The
Secretary may change a premium structure established
under this subclause but only to the extent that such
change is not applied to any mortgage already executed.
``(B) Establishment and alteration of premium
structure.--A premium structure shall be established or
changed under subparagraph (A) only by providing notice
to mortgagees and to the Congress, at least 30 days
before the premium structure is established or changed.
``(C) Annual report regarding premiums.--The
Secretary shall submit a report to the Congress
annually setting forth the rate structures and rates
established and altered pursuant to this paragraph
during the preceding 12-month period and describing how
such rates were determined.
``(5) Considerations for Premium Structure.--When
establishing premiums for mortgages referred to in paragraph
(2)(C), establishing premiums pursuant to paragraph (3),
establishing a premium structure under paragraph (4), and when
changing such a premium structure, the Secretary shall consider
the following:
``(A) The effect of the proposed premiums or
structure on the Secretary's ability to meet the
operational goals of the Mutual Mortgage Insurance Fund
as provided in section 202(a).
``(B) Underwriting variables.
``(C) The extent to which new pricing under the
proposed premiums or structure has potential for
acceptance in the private market.
``(D) The administrative capability of the Secretary
to administer the proposed premiums or structure.
``(E) The effect of the proposed premiums or
structure on the Secretary's ability to maintain the
availability of mortgage credit and provide stability
to mortgage markets.
``(6) Authority to Base Premium Prices on Product Risk.--
``(A) Authority.--In establishing premium rates under
paragraphs (2), (3), and (4), the Secretary may provide
for variations in such rates according to the credit
risk associated with the type of mortgage product that
is being insured under this title, which may include
providing that premium rates differ between fixed-rate
mortgages and adjustable-rate mortgages insured
pursuant to section 251, between mortgages insured
pursuant to section 203(b) and mortgages for
condominiums insured pursuant to section 234, and
between such other products as the Secretary considers
appropriate.
``(B) Limitation.--Subparagraph (A) may not be
construed to authorize the Secretary to establish, for
any mortgage product, any mortgage insurance premium
rate that does not comply with the requirements and
limitations under paragraphs (2) through (5).''.
SEC. 208. PAYMENT INCENTIVES FOR HIGHER-RISK BORROWERS.
Section 203(c) of the National Housing Act (12 U.S.C.
1709(c)), as amended by the preceding provisions of this
subtitle, is further amended by adding at the end the following
new paragraph:
``(7) Payment Incentives.--
``(A) Authority.--With respect to mortgages referred
to in paragraph (2)(C):
``(i) Discretionary 3-year payment
incentive.--The Secretary may provide, in the
discretion of the Secretary, that the payment
incentive under subparagraph (B) shall apply
upon the expiration of the 3-year period
beginning upon the time of insurance of such a
mortgage.
``(ii) Mandatory 5-year payment incentive.--
The Secretary shall provide that the payment
incentive under subparagraph (B) applies upon
the expiration of the 5-year period beginning
upon the time of insurance of such a mortgage.
``(B) Payment incentive.--In the case of any mortgage
to which the payment incentive under this subparagraph
applies, if, during the period referred to in clause
(i) or (ii) of subparagraph (A), as applicable, all
mortgage insurance premiums for such mortgage have been
paid on a timely basis, upon the expiration of such
period the Secretary shall--
``(i) reduce the amount of the annual premium
payments otherwise due thereafter under such
mortgage to an amount that does not exceed the
amount of the annual premium payable at the
time of insurance of the mortgage on a mortgage
of the same product type having the same terms,
but for which the mortgagor has a credit score
equivalent to a FICO score of 560 or more; and
``(ii) refund to the mortgagor, upon payment
in full of the obligation of the mortgage, any
amount by which the single premium payment for
such mortgage collected at the time of
insurance exceeded the amount of the single
premium payment chargeable under paragraph
(2)(A) at the time of insurance for a mortgage
of the same product type having the same terms,
but for which the mortgagor has a credit score
equivalent to a FICO score of 560 or more.''.
SEC. 209. PROTECTIONS FOR HIGHER-RISK BORROWERS.
Section 203(b) of the National Housing Act (12 U.S.C.
1709(b)) is amended by adding at the end the following new
paragraph:
``(10) Protections for higher-risk borrowers.--Except
as otherwise specifically provided in this paragraph,
in the case of any mortgage referred to in paragraph
(2)(C) of subsection (c), the following requirements
shall apply:
``(A) Disclosures.--
``(i) Required disclosures.--In
addition to any disclosures that are
otherwise required by law or by the
Secretary for single family mortgages,
the mortgagee shall disclose to the
mortgagor the following information:
``(I) At application.--At the
time of application for the
loan involved in the mortgage,
a list of counseling agencies,
approved by the Secretary, in
the area of the applicant.
``(II) At execution.--At the
time of entering into the
mortgage--
``(aa) the terms of
the mandatory 5-year
payment incentive
required under
subsection
(c)(7)(A)(ii); and
``(bb) a statement
that the mortgagor has
a right under contract
to loss mitigation.
``(III) Other information.--
Any other additional
information that the Secretary
determines is appropriate to
ensure that the mortgagor has
received timely and accurate
information about the program
under paragraph (2)(C) of
subsection (c).
``(ii) Penalties for failure to
provide required disclosures.--The
Secretary may establish and impose
appropriate penalties for failure of a
mortgagee to provide any disclosure
required under clause (i).
``(iii) No private right of action.--
This subparagraph shall not create any
private right of action on behalf of
the mortgagor.
``(B) Counseling.--
``(i) Requirement.--The Secretary
shall require that the mortgagor shall
have received counseling that complies
with the requirements of this
subparagraph.
``(ii) Terms of counseling.--
Counseling under this subparagraph
shall be provided--
``(I) prior to closing for
the loan involved in the
mortgage;
``(II) by a third party
(other than the mortgagee) who
is approved by the Secretary,
with respect to the
responsibilities and financial
management involved in
homeownership;
``(III) on an individual
basis to the mortgagor by a
representative of the approved
third-party counseling entity;
and
``(IV) in person, to the
maximum extent possible.
``(iii) 2- and 3-family residences.--
In the case of a mortgage involving a
2- or 3-family residence, counseling
under this subparagraph shall include
(in addition to the information
required under clause (iii))
information regarding real estate
property management.
``(C) Notice of foreclosure prevention
counseling availability.--
``(i) Written agreement.--To be
eligible for insurance under this
subsection, the mortgagee shall provide
the mortgagor, at the time of the
execution of the mortgage, a written
agreement which shall be signed by the
mortgagor and under which the mortgagee
shall provide notice described in
clause (ii) to a housing counseling
entity that has agreed to provide the
notice and counseling required under
clause (iii) and is approved by the
Secretary.
``(ii) Notice to counseling agency.--
The notice described in this clause,
with respect to a mortgage, is notice,
provided at the earliest time
practicable after the mortgagor becomes
60 days delinquent with respect to any
payment due under the mortgage, that
the mortgagor is so delinquent and of
how to contact the mortgagor. Such
notice may only be provided once with
respect to each delinquency period for
a mortgage.
``(iii) Notice to mortgagor.--Upon
notice from a mortgagee that a
mortgagor is 60 days delinquent with
respect to payments due under the
mortgage, the housing counseling entity
shall at the earliest time practicable
notify the mortgagor of such
delinquency, that the entity makes
available foreclosure prevention
counseling that may assist the
mortgagor in resolving the delinquency,
and of how to contact the entity to
arrange for such counseling.
``(iv) Ability to cure.--Failure to
provide the written agreement required
under clause (i) may be corrected by
sending such agreement to the mortgagor
not later than the earliest time
practicable after the mortgagor first
becomes 60 days delinquent with respect
to payments due under the mortgage.
Insurance provided under this
subsection may not be terminated and
penalties for such failure may not be
prospectively or retroactively imposed
if such failure is corrected in
accordance with this clause.
``(v) Penalties for failure to
provide agreement.--The Secretary may
establish and impose appropriate
penalties for failure of a mortgagee to
provide the written agreement required
under clause (i).
``(vi) Limitation on liability of
mortgagee.--A mortgagee shall not incur
any liability or penalties for any
failure of a housing counseling entity
to provide notice under clause (iii).
``(vii) No private right of action.--
This subparagraph shall not create any
private right of action on behalf of
the mortgagor.
``(viii) Delinquency period.--For
purposes of this subparagraph, the term
`delinquency period' means, with
respect to a mortgage, a period that
begins upon the mortgagor becoming
delinquent with respect to payments due
under the mortgage and ends upon the
first subsequent occurrence of such
payments under the mortgage becoming
current or the property subject to the
mortgage being foreclosed or otherwise
disposed of.''.
SEC. 210. REFINANCING MORTGAGES.
Section 203 of the National Housing Act (12 U.S.C. 1709) is
amended by inserting after subsection (k) the following new
subsection:
``(l) Refinancing Mortgages.--
``(1) Establishment of underwriting standards.--The
Secretary shall establish underwriting standards that
provide for insurance under this title of mortgage
loans, and take actions to facilitate the availability
of mortgage loans insured under this title, for
qualified borrowers that are made for the purpose of
paying or prepaying outstanding obligations under
existing mortgages for borrowers that--
``(A) have existing mortgages with adverse
terms or rates, or
``(B) do not have access to mortgages at
reasonable rates and terms for such
refinancings due to adverse market conditions.
``(2) Insurance of mortgages to borrowers in default
or at risk of default.--In facilitating insurance for
such mortgages, the Secretary may insure mortgages to
borrowers who are, currently in default or at imminent
risk of being in default, but only if such loans meet
reasonable underwriting standards established by the
Secretary.''.
SEC. 211. ANNUAL REPORTS ON NEW PROGRAMS AND LOSS MITIGATION.
Section 540(b)(2) of the National Housing Act (12 U.S.C.
1735f-18(b)(2)) is amended, by adding at the end the following
new subparagraphs:
``(C) The rates of default and foreclosure
for the applicable collection period for
mortgages insured pursuant to the program for
mortgage insurance under paragraph (2)(C) of
section 203(c).
``(D) Actions taken by the Secretary during
the applicable collection period with respect
to loss mitigation on mortgages insured
pursuant to section 203.''.
SEC. 212. INSURANCE FOR SINGLE FAMILY HOMES WITH LICENSED CHILD CARE
FACILITIES.
(a) Definition of Child Care Facility.--Section 201 of the
National Housing Act (12 U.S.C. 1707) is amended by adding at
the end the following new subsection:
``(g) The term `child care facility' means a facility that--
``(A) has as its purpose the care of children who are
less than 12 years of age; and
``(B) is licensed or regulated by the State in which
it is located (or, if there is no State law providing
for such licensing and regulation by the State, by the
municipality or other political subdivision in which
the facility is located).
Such term does not include facilities for school-age children
primarily for use during normal school hours.''.
(b) Increase in Maximum Mortgage Amount Limitation.--
Paragraph (2) of section 203(b) of the National Housing Act (12
U.S.C. 1709(b)(2)), as amended by the preceding provisions of
this subtitle, is further amended by adding at end the
following new undesignated paragraph:
``Notwithstanding any other provision of this
paragraph, the amount that may be insured under this
section may be increased by up to 25 percent if such
increase is necessary to account for the increased cost
of the residence due to an increased need of space in
the residence for locating and operating a child care
facility (as such term is defined in section 201)
within the residence, but only if a valid license or
certificate of compliance with regulations described in
section 201(g)(2) has been issued for such facility as
of the date of the execution of the mortgage, and only
if such increase in the amount insured is proportional
to the amount of space of such residence that will be
used for such facility.''.
SEC. 213. REHABILITATION LOANS.
Subsection (k) of section 203 of the National Housing Act (12
U.S.C. 1709(k)) is amended--
(1) in paragraph (1), by striking ``on'' and all that
follows through ``1978''; and
(2) in paragraph (5)--
(A) by striking ``General Insurance Fund''
the first place it appears and inserting
``Mutual Mortgage Insurance Fund''; and
(B) in the second sentence, by striking the
comma and all that follows through ``General
Insurance Fund''.
SEC. 214. DISCRETIONARY ACTION.
The National Housing Act is amended--
(1) in subsection (e) of section 202 (12 U.S.C.
1708(e))--
(A) in paragraph (3)(B), by striking
``section 202(e) of the National Housing Act''
and inserting ``this subsection''; and
(B) by redesignating such subsection as
subsection (f);
(2) by striking paragraph (4) of section 203(s) (12
U.S.C. 1709(s)(4)) and inserting the following new
paragraph:
``(4) the Secretary of Agriculture;''; and
(3) by transferring subsection (s) of section 203 (as
amended by paragraph (2) of this section) to section
202, inserting such subsection after subsection (d) of
section 202, and redesignating such subsection as
subsection (e).
SEC. 215. INSURANCE OF CONDOMINIUMS AND MANUFACTURED HOUSING.
(a) In General.--Section 234 of the National Housing Act (12
U.S.C. 1715y) is amended--
(1) in subsection (c)--
(A) in the first sentence--
(i) by striking ``and'' before
``(2)''; and
(ii) by inserting before the period
at the end the following: ``, and (3)
the project has a blanket mortgage
insured by the Secretary under
subsection (d)''; and
(B) in clause (B) of the third sentence, by
striking ``thirty-five years'' and inserting
``forty years''; and
(2) in subsection (g), by striking ``, except that''
and all that follows and inserting a period.
(b) Definition of Mortgage.--Section 201(a) of the National
Housing Act (12 U.S.C. 1707(a)) is amended--
(1) before `` a first mortgage'' insert ``(A)'';
(2) by striking ``or on a leasehold (1)'' and
inserting ``(B) a first mortgage on a leasehold on real
estate (i)'';
(3) by striking ``or (2)'' and inserting ``, or
(ii)''; and
(4) by inserting before the semicolon the following:
``, or (C) a first mortgage given to secure the unpaid
purchase price of a fee interest in, or long-term
leasehold interest in, real estate consisting of a one-
family unit in a multifamily project, including a
project in which the dwelling units are attached, or
are manufactured housing units, semi-detached, or
detached, and an undivided interest in the common areas
and facilities which serve the project''.
(c) Definition of Real Estate.--Section 201 of the National
Housing Act (12 U.S.C. 1707), as amended by the preceding
provisions of this subtitle, is further amended by adding at
the end the following new subsection:
``(h) The term `real estate' means land and all natural
resources and structures permanently affixed to the land,
including residential buildings and stationary manufactured
housing. The Secretary may not require, for treatment of any
land or other property as real estate for purposes of this
title, that such land or property be treated as real estate for
purposes of State taxation.''.
SEC. 216. MUTUAL MORTGAGE INSURANCE FUND.
(a) In General.--Subsection (a) of section 202 of the
National Housing Act (12 U.S.C. 1708(a)) is amended to read as
follows:
``(a) Mutual Mortgage Insurance Fund.--
``(1) Establishment.--Subject to the provisions of
the Federal Credit Reform Act of 1990, there is hereby
created a Mutual Mortgage Insurance Fund (in this title
referred to as the `Fund'), which shall be used by the
Secretary to carry out the provisions of this title
with respect to mortgages insured under section 203.
The Secretary may enter into commitments to guarantee,
and may guarantee, such insured mortgages.
``(2) Limit on loan guarantees.--The authority of the
Secretary to enter into commitments to guarantee such
insured mortgages shall be effective for any fiscal
year only to the extent that the aggregate original
principal loan amount under such mortgages, any part of
which is guaranteed, does not exceed the amount
specified in appropriations Acts for such fiscal year.
``(3) Fiduciary responsibility.--The Secretary has a
responsibility to ensure that the Mutual Mortgage
Insurance Fund remains financially sound.
``(4) Annual independent actuarial study.--The
Secretary shall provide for an independent actuarial
study of the Fund to be conducted annually, which shall
analyze the financial position of the Fund. The
Secretary shall submit a report annually to the
Congress describing the results of such study and
assessing the financial status of the Fund. The report
shall recommend adjustments to underwriting standards,
program participation, or premiums, if necessary, to
ensure that the Fund remains financially sound.
``(5) Quarterly reports.--During each fiscal year,
the Secretary shall submit a report to the Congress for
each quarter, which shall specify for mortgages that
are obligations of the Fund--
``(A) the cumulative volume of loan guarantee
commitments that have been made during such
fiscal year through the end of the quarter for
which the report is submitted;
``(B) the types of loans insured, categorized
by risk;
``(C) any significant changes between actual
and projected claim and prepayment activity;
``(D) projected versus actual loss rates; and
``(E) updated projections of the annual
subsidy rates to ensure that increases in risk
to the Fund are identified and mitigated by
adjustments to underwriting standards, program
participation, or premiums, and the financial
soundness of the Fund is maintained.
The first quarterly report under this paragraph shall
be submitted on the last day of the first quarter of
fiscal year 2008, or upon the expiration of the 90-day
period beginning on the date of the enactment of the
Expanding American Homeownership Act of 2008, whichever
is later.
``(6) Adjustment of premiums.--If, pursuant to the
independent actuarial study of the Fund required under
paragraph (5), the Secretary determines that the Fund
is not meeting the operational goals established under
paragraph (8) or there is a substantial probability
that the Fund will not maintain its established target
subsidy rate, the Secretary may either make
programmatic adjustments under section 203 as necessary
to reduce the risk to the Fund, or make appropriate
premium adjustments.
``(7) Operational goals.--The operational goals for
the Fund are--
``(A) to charge borrowers under loans that
are obligations of the Fund an appropriate
premium for the risk that such loans pose to
the Fund;
``(B) to minimize the default risk to the
Fund and to homeowners;
``(C) to curtail the impact of adverse
selection on the Fund; and
``(D) to meet the housing needs of the
borrowers that the single family mortgage
insurance program under this title is designed
to serve.''.
(b) Obligations of Fund.--The National Housing Act is amended
as follows:
(1) Homeownership voucher program mortgages.--In
section 203(v) (12 U.S.C. 1709(v))--
(A) by striking ``Notwithstanding section 202
of this title, the'' and inserting ``The''; and
(B) by striking ``General Insurance Fund''
the first place such term appears and all that
follows and inserting ``Mutual Mortgage
Insurance Fund.''.
(2) Home equity conversion mortgages.--Section
255(i)(2)(A) of the National Housing Act (12 U.S.C.
1715z-20(i)(2)(A)) is amended by striking ``General
Insurance Fund'' and inserting ``Mutual Mortgage
Insurance Fund''.
(c) Conforming Amendments.--The National Housing Act is
amended--
(1) in section 205 (12 U.S.C. 1711), by striking
subsections (g) and (h); and
(2) in section 519(e) (12 U.S.C. 1735c(e)), by
striking ``203(b)'' and all that follows through
``203(i)'' and inserting ``203, except as determined by
the Secretary''.
SEC. 217. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.
(a) Hawaiian Home Lands.--Section 247(c) of the National
Housing Act (12 U.S.C. 1715z-12) is amended--
(1) by striking ``General Insurance Fund established
in section 519'' and inserting ``Mutual Mortgage
Insurance Fund''; and
(2) in the second sentence, by striking ``(1) all
references'' and all that follows through ``and (2)''.
(b) Indian Reservations.--Section 248(f) of the National
Housing Act (12 U.S.C. 1715z-13) is amended--
(1) by striking ``General Insurance Fund'' the first
place it appears and all that follows through ``519''
and inserting ``Mutual Mortgage Insurance Fund''; and
(2) in the second sentence, by striking ``(1) all
references'' and all that follows through ``and (2)''.
SEC. 218. CONFORMING AND TECHNICAL AMENDMENTS.
(a) Repeals.--The following provisions of the National
Housing Act are repealed:
(1) Subsection (i) of section 203 (12 U.S.C.
1709(i)).
(2) Subsection (o) of section 203 (12 U.S.C.
1709(o)).
(3) Subsection (p) of section 203 (12 U.S.C.
1709(p)).
(4) Subsection (q) of section 203 (12 U.S.C.
1709(q)).
(5) Section 222 (12 U.S.C. 1715m).
(6) Section 237 (12 U.S.C. 1715z-2).
(7) Section 245 (12 U.S.C. 1715z-10).
(b) Definition of Area.--Section 203(u)(2)(A) of the National
Housing Act (12 U.S.C. 1709(u)(2)(A)) is amended by striking
``shall'' and all that follows and inserting ``means a
metropolitan statistical area as established by the Office of
Management and Budget;''.
(c) Definition of State.--Section 201(d) of the National
Housing Act (12 U.S.C. 1707(d)) is amended by striking ``the
Trust Territory of the Pacific Islands'' and inserting ``the
Commonwealth of the Northern Mariana Islands''.
SEC. 219. HOME EQUITY CONVERSION MORTGAGES.
(a) In General.--Section 255 of the National Housing Act (12
U.S.C. 1715z-20) is amended--
(1) in subsection (b)(2), insert `` `real estate,' ''
after `` `mortgagor','';
(2) in subsection (b)(4), by striking subparagraph
(B) and inserting the following new subparagraph:
``(B) under a lease that has a term that ends
no earlier than the minimum number of years, as
specified by the Secretary, beyond the
actuarial life expectancy of the mortgagor or
comortgagor, whichever is the later date.''.
(3) in the second sentence of subsection (g), by
striking ``the maximum dollar amount established under
section 203(b)(2)'' and all that follows through
``located'' and inserting ``132 percent of the dollar
amount limitation determined under section 305(a)(2)(A)
of the Federal Home Loan Mortgage Corporation Act for a
1-family residence (without regard to any authority to
increase such limitations with respect to properties
located in Alaska, Guam, Hawaii, or the Virgin Islands
and without regard to the high-cost area limitation
under such section 305(a)(2)(B))'';
(4) in subsection (i)(1)(C), by striking
``limitations'' and inserting ``limitation''; and
(5) by adding at the end the following new
subsection:
``(o) Authority to Insure Home Purchase Mortgages.--
``(1) In general.--Notwithstanding any other
provision in this section, the Secretary may insure,
upon application by a mortgagee, a home equity
conversion mortgage upon such terms and conditions as
the Secretary may prescribe, when the primary purpose
of the home equity conversion mortgage is to enable an
elderly mortgagor to purchase a 1- to 4-family dwelling
in which the mortgagor will occupy or occupies one of
the units.
``(2) Limitation on principal obligation.--A home
equity conversion mortgage insured pursuant to
paragraph (1) shall involve a principal obligation that
does not exceed the limitation under subsection (g) of
this section on the maximum amount of the benefits of
insurance under this section.''.
(b) Mortgages for Cooperatives.--Subsection (b) of section
255 of the National Housing Act (12 U.S.C. 1715z-20(b)) is
amended--
(1) in paragraph (4)--
(A) by inserting ``a first or subordinate
mortgage or lien'' before ``on all stock'';
(B) by inserting ``unit'' after ``dwelling'';
and
(C) by inserting ``a first mortgage or first
lien'' before ``on a leasehold''; and
(2) in paragraph (5), by inserting ``a first or
subordinate lien on'' before ``all stock''.
(c) Prohibition on Required Purchase of an Annuity.--Section
255 of the National Housing Act of 1937 (12 U.S.C. 1715z-20) is
amended--
(1) by striking subparagraph (B) of subsection (d)(2)
and inserting the following new subparagraph:
``(B) has received adequate counseling by a
third party (other than a reverse mortgage
lender, servicer or investor, or an entity
engaged in the sale of annuities, investments,
long-term care insurance, or any other type of
financial or insurance product) as provided in
subsection (f);'';
(2) by striking the first sentence of subsection (f)
and inserting the following new sentence: ``The
Secretary shall provide or cause to be provided and
paid for by entities other than a reverse mortgage
lender, servicer or investor, or an entity engaged in
the sale of annuities, investments, long-term care
insurance, or any other type of financial or insurance
product the information required in subsection
(d)(2)(B).''; and
(3) by striking subsections (l) and (m) and inserting
the following new subsection:
``(l) Regulations to Protect Elderly Homeowners.--
``(1) In general.--Not later than 6 months after the
date of the enactment of the Expanding American
Homeownership Act of 2008, the Secretary shall, in
consultation with other relevant Federal departments
and agencies, prescribe regulations to help protect
elderly homeowners from the marketing of financial and
insurance products not in the interest of such
homeowners, including the marketing or sale of an
annuity as a condition of obtaining any home equity
conversion mortgage.
``(2) Consultation.--In developing the regulations
required under paragraph (1), the Secretary shall
consult with consumer advocates (including recognized
experts in consumer protection), industry
representatives, representatives of counseling
organizations, and other interested parties.''.
(d) Limitation on Origination Fees.--Section 255 of the
National Housing Act (12 U.S.C. 1715z-20), as amended by the
preceding provisions of this section, is further amended--
(1) by redesignating subsections (k), (l), and (m) as
subsections (l), (m), and (n), respectively; and
(2) by inserting after subsection (j) the following
new subsection:
``(k) Limitation on Origination Fees.--The Secretary shall
establish limits on the origination fee that may be charged to
a mortgagor under a mortgage insured under this section, which
limitations shall--
``(1) be equal to 2.0 percent of the maximum claim
amount of the mortgage up to a maximum claim amount of
$200,000 plus 1 percent of any portion of the maximum
claim amount that is greater than $200,000, unless
adjusted thereafter on the basis of an analysis of (A)
costs to mortgagors, and (B) the impact on the reverse
mortgage market;
``(2) be subject to a minimum allowable amount;
``(3) provide that the origination fee may be fully
financed with the mortgage;
``(4) include any fees paid to correspondent
mortgagees approved by the Secretary or to mortgage
brokers;
``(5) apply beginning upon the date that the maximum
dollar amount limitation on the benefits of insurance
under this section is first increased pursuant to the
amendments made by section 219(a)(3) of the Expanding
American Homeownership Act of 2008; and
``(6) be subject to a maximum origination fee of
$6,000, except that such maximum limit shall be
adjusted in accordance with the annual percentage
increase in the Consumer Price Index of the Bureau of
Labor Statistics of the Department of Labor in
increments of $500 only when the percentage increase in
such index, when applied to the maximum origination
fee, produce dollar increases that exceed $500.''.
(e) Study Regarding Mortgage Insurance Premiums.--The
Secretary of Housing and Urban Development shall conduct a
study regarding mortgage insurance premiums charged under the
program under section 255 of the National Housing Act (12
U.S.C. 1715z-20) for insurance of home equity conversion
mortgages to analyze and determine the effects of reducing the
amounts of such premiums from the amounts charged as of the
date of the enactment of this Act on: (1) costs to mortgagors;
and (2) the financial soundness of the program. Not later than
the expiration of the 12-month period beginning on the date of
the enactment of this Act, the Secretary shall submit a report
to the Congress setting forth the results and conclusions of
the study.
(f) Purchase Authority of Fannie Mae and Freddie Mac.--
(1) Fannie mae.--Section 302(b) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1717(b)) is amended by adding at the end the following:
``(7) The corporation is authorized to purchase, service,
sell, lend on the security of, and otherwise deal in any
mortgage insured under section 255 of the National Housing Act
(12 U.S.C. 1715z-20), notwithstanding the limitations under
paragraph (2) on the maximum original principal obligations of
mortgages.''.
(2) Freddie mac.--Section 305(a) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1454(a)) is
amended by adding at the end the following:
``(6) The Corporation is authorized to purchase, service,
sell, lend on the security of, and otherwise deal in any
mortgage insured under section 255 of the National Housing Act
(12 U.S.C. 1715z-20), notwithstanding the limitations under
paragraph (2) on the maximum original principal obligations of
mortgages.''.
SEC. 220. STUDY ON PARTICIPATION OF MORTGAGE BROKERS AND CORRESPONDENT
LENDERS.
(a) Study.--The Comptroller General of the United States
shall conduct a study, which shall be completed not later than
the expiration of the 12-month period beginning on the date of
the enactment of this Act, which shall analyze and determine--
(1) the extent to which the financial audit and net
worth requirements impede participation by mortgage
brokers and correspondent lenders in the mortgage
insurance programs under the National Housing Act, as
measured by the number and value of such insured
mortgages, disaggregated by the States in which the
properties subject to such mortgages are located;
(2) the extent and effectiveness of the financial
audit and net worth requirements in protecting the
Mutual Mortgage Insurance Fund;
(3) the extent and effectiveness of the supervision
and quality control enforcement, by the Secretary, of
mortgagees in the FHA program, separate from the
financial audit and net worth requirements for
participation, in protecting the Mutual Mortgage
Insurance Fund;
(4) the extent to which allowing a mortgage broker to
secure a surety bond in lieu of the financial audit and
net worth requirements would increase participation by
mortgage brokers and correspondent lenders in the
mortgage insurance programs under the National Housing
Act;
(5) the extent to which allowing a mortgage broker to
secure a surety bond in lieu of the financial audit and
net worth requirements would protect the Mutual
Mortgage Insurance Fund; and
(6) the potential impact of such changes on the costs
incurred by the Secretary of Housing and Urban
Development in administering the mortgage insurance
programs under such Act.
(b) GAO Report.--Not later than the expiration of the 12-
month period beginning on the date of the enactment of this
Act, the Comptroller General shall submit a report to the
Congress and the Secretary of Housing and Urban Development
setting forth the results and conclusions of the study
conducted pursuant to subsection (a).
(c) HUD Report.--Not later than the expiration of the 18-
month period beginning upon the date of the enactment of this
Act, the Secretary of Housing and Urban Development may submit
a report to the Congress making recommendations regarding any
changes in requirements for participation of mortgage brokers
and correspondent lenders in the mortgage insurance programs
under the National Housing Act arising from a review of the
study conducted pursuant to subsection (a).
SEC. 221. CONFORMING LOAN LIMIT IN DISASTER AREAS.
Section 203(h) of the National Housing Act (12 U.S.C. 1709)
is amended--
(1) by inserting after ``property'' the following:
``plus any initial service charges, appraisal,
inspection and other fees in connection with the
mortgage as approved by the Secretary,'';
(2) by striking the second sentence (as added by
chapter 7 of the Emergency Supplemental Appropriations
Act of 1994 (Public Law 103-211; 108 Stat. 12)); and
(3) by adding at the end the following new sentence:
``In any case in which the single family residence to
be insured under this subsection is within a
jurisdiction in which the President has declared a
major disaster to have occurred, the Secretary is
authorized, for a temporary period not to exceed 36
months from the date of such Presidential declaration,
to enter into agreements to insure a mortgage which
involves a principal obligation of up to 100 percent of
the dollar limitation determined under section
305(a)(2) of the Federal Home Loan Mortgage Corporation
Act for a single family residence, and not in excess of
100 percent of the appraised value of the property plus
any initial service charges, appraisal, inspection and
other fees in connection with the mortgage as approved
by the Secretary.''.
SEC. 222. FAILURE TO PAY AMOUNTS FROM ESCROW ACCOUNTS FOR SINGLE FAMILY
MORTGAGES.
(a) Penalties.--Section 536 of the National Housing Act (12
U.S.C. 1735f-14) is amended--
(1) in subsection (a)(1), by inserting ``servicers
(including escrow account servicers),'' after
``appraisers,'';
(2) in subsection (b)(1)--
(A) in the matter preceding subparagraph (A),
by inserting ``or other participant referred to
in subsection (a),'' after ``lender,''; and
(B) by inserting at the end the following new
subparagraphs:
``(K) In the case of a mortgage for a 1- to
4-family residence insured under title II that
requires the mortgagor to make payments to the
mortgagee or other servicer of the mortgage for
deposit into an escrow account for the purpose
of assuring payment of taxes, insurance
premiums, and other charges with respect to the
property, failure on the part of the servicer
to make any such payment from the escrow
account by the deadline to avoid a penalty with
respect to such payment provided for in the
mortgage, unless the servicer was not provided
notice of such deadline.
``(L) In the case of any failure to make any
payment as described in subparagraph (K),
submitting any information to a consumer
reporting agency (as such term is defined in
section 603(f) of the Fair Credit Reporting Act
(15 U.S.C. 1681a(f))) regarding such failure
that is adverse to the credit rating or
interest of the mortgagor.''; and
(3) in subsection (c)(3), by adding at the end the
following: ``In the case of any failure to make a
payment described in subsection (b)(1)(K) for which the
servicer fails to reimburse the mortgagor (A) before
the expiration of the 60-day period beginning on the
deadline to avoid a penalty with respect to such
payment, in the sum of the amount not paid from the
escrow account by such deadline and the amount of any
penalties accruing to the mortgagor that are
attributable to such failure, or (B) in the amount of
any attorneys fees incurred by the mortgagor and
attributable to such failure, the Secretary shall
increase the amount of the penalty under subsection (a)
for any such failure to reimburse, unless the Secretary
determines there are mitigating circumstances.''.
(b) Prohibition on Submission of Information by HUD.--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. PROHIBITION REGARDING FAILURE ON PART OF SERVICER TO MAKE
ESCROW PAYMENTS.
``In the case of any failure to make any payment as described
in section 536(b)(1)(K), the Secretary may not submit any
information to a consumer reporting agency (as such term is
defined in section 603(f) of the Fair Credit Reporting Act (15
U.S.C. 1681a(f))) regarding such failure that is adverse to the
credit rating or interest of the mortgagor.''.
SEC. 223. ACCEPTABLE IDENTIFICATION FOR FHA MORTGAGORS.
(a) In General.--Title II of the National Housing Act is
amended by inserting after section 209 (12 U.S.C. 1715) the
following new section:
``SEC. 210. FORMS OF ACCEPTABLE IDENTIFICATION.
``The Secretary may not insure a mortgage under any provision
of this title unless the mortgagor under the mortgage provides
personal identification in one of the following forms:
``(1) A valid social security number verified in
accordance with paragraph 3-1 C of chapter 3 of HUD
Handbook 4155.1 REV-5.
``(2) A driver's license or identification card
issued by a State in the case of a State that is in
compliance with title II of the REAL ID Act of 2005
(title II of division B of Public Law 109-13; 49 U.S.C.
30301 note).
``(3) A passport issued by the United States or a
foreign government.
``(4) A photo identification card issued by the
Secretary of Homeland Security (acting through the
Director of the United States Citizenship and
Immigration Services).''.
(b) Effective Date.--The requirements of section 210 of the
National Housing Act (as added by subsection (a) of this
section) shall take effect 6 months after the date of the
enactment of this Act.
SEC. 224. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS WITHOUT
SUFFICIENT CREDIT HISTORY.
(a) Establishment.--Title II of the National Housing Act (12
U.S.C. 1707 et seq.), as amended by the preceding provisions of
this subtitle, is further amended by adding at the end the
following new section:
``SEC. 258. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS WITHOUT
SUFFICIENT CREDIT HISTORY.
``(a) Establishment.--The Secretary shall carry out a pilot
program to establish, and make available to mortgagees, an
automated process for providing alternative credit rating
information for mortgagors and prospective mortgagors under
mortgages on 1- to 4-family residences to be insured under this
title who have insufficient credit histories for determining
their creditworthiness. Such alternative credit rating
information may include rent, utilities, and insurance payment
histories, and such other information as the Secretary
considers appropriate.
``(b) Scope.--The Secretary may carry out the pilot program
under this section on a limited basis or scope, and may
consider limiting the program--
``(1) to first-time homebuyers; or
``(2) metropolitan statistical areas significantly
impacted by subprime lending.
``(c) Limitation.--In any fiscal year, the aggregate number
of mortgages insured pursuant to the automated process
established under this section may not exceed 5 percent of the
aggregate number of mortgages for 1- to 4-family residences
insured by the Secretary under this title during the preceding
fiscal year.
``(d) Sunset.--After the expiration of the 5-year period
beginning on the date of the enactment of the Expanding
American Homeownership Act of 2008, the Secretary may not enter
into any new commitment to insure any mortgage, or newly insure
any mortgage, pursuant to the automated process established
under this section.''.
(b) GAO Report.--Not later than the expiration of the 4-year
period beginning on the date that the Secretary of Housing and
Urban Development first insures any mortgage pursuant to the
automated process established under pilot program under section
258 of the National Housing Act (as added by the amendment made
by subsection (a) of this section), the Comptroller General of
the United States shall submit to the Congress a report
identifying the number of additional mortgagors served using
such automated process and the impact of such process and the
insurance of mortgages pursuant to such process on the safety
and soundness of the insurance funds under the National Housing
Act of which such mortgages are obligations.
SEC. 225. SENSE OF CONGRESS REGARDING TECHNOLOGY FOR FINANCIAL SYSTEMS.
(a) Congressional Findings.--The Congress finds the
following:
(1) The Government Accountability Office has cited
the FHA single family housing mortgage insurance
program as a ``high-risk'' program, with a primary
reason being non-integrated and out-dated financial
management systems.
(2) The ``Audit of the Federal Housing
Administration's Financial Statements for Fiscal--Years
2004 and 2003'', conducted by the Inspector General of
the Department of Housing and Urban Development
reported as a material weakness that ``HUD/FHA's
automated data processing [ADP] system environment must
be enhanced to more effectively support FHA's business
and budget processes''.
(3) Existing technology systems for the FHA program
have not been updated to meet the latest standards of
the Mortgage Industry Standards Maintenance
Organization and have numerous deficiencies that
lenders have outlined.
(4) Improvements to technology used in the FHA
program will--
(A) allow the FHA program to improve the
management of the FHA portfolio, garner greater
efficiencies in its operations, and lower costs
across the program;
(B) result in efficiencies and lower costs
for lenders participating in the program,
allowing them to better use the FHA products in
extending homeownership opportunities to higher
credit risk or lower-income families, in a
sound manner.
(5) The Mutual Mortgage Insurance Fund operates
without cost to the taxpayers and generates revenues
for the Federal Government.
(b) Sense of Congress.--It is the sense of the Congress
that--
(1) the Secretary of Housing and Urban Development
should use a portion of the funds received from
premiums paid for FHA single family housing mortgage
insurance that are in excess of the amounts paid out in
claims to substantially increase the funding for
technology used in such FHA program;
(2) the goal of this investment should be to bring
the technology used in such FHA program to the level
and sophistication of the technology used in the
conventional mortgage lending market, or to exceed such
level; and
(3) the Secretary of Housing and Urban Development
should report to the Congress not later than 180 days
after the date of the enactment of this Act regarding
the progress the Department is making toward such goal
and if progress is not sufficient, the resources needed
to make greater progress.
SEC. 226. CLARIFICATION OF DISPOSITION OF CERTAIN PROPERTIES.
Notwithstanding any other provision of law, subtitle A of
title II of the Deficit Reduction Act of 2005 (12 U.S.C. 1701z-
11 note) and the amendments made by such title shall not apply
to any transaction regarding a multifamily real property for
which--
(1) the Secretary of Housing and Urban Development
has received, before the date of the enactment of such
Act, written expressions of interest in purchasing the
property from both a city government and the housing
commission of such city;
(2) after such receipt, the Secretary acquires title
to the property at a foreclosure sale; and
(3) such city government and housing commission have
resolved a previous disagreement with respect to the
disposition of the property.
SEC. 227. VALUATION OF MULTIFAMILY PROPERTIES IN NONCOMPETITIVE SALES
BY HUD TO STATES AND LOCALITIES.
Subtitle A of title II of the Deficit Reduction Act of 2005
(Public Law 109-171; 120 Stat. 7) is amended by adding at the
end the following new section:
``SEC. 2004. VALUATION OF MULTIFAMILY PROPERTIES IN NONCOMPETITIVE
SALES BY HUD TO STATES AND LOCALITIES.
`` `Notwithstanding any other provision of law, in
determining the market value of any multifamily real property
or multifamily loan for any noncompetitive sale to a State or
local government entity occurring during fiscal year 2008, the
Secretary shall consider, but not be limited to, industry
standard appraisal practices, including the cost of repairs
needed to bring the property at least to minimum State and
local code standards and of maintaining the existing
affordability restrictions imposed by the Secretary on the
multifamily real property or multifamily loan.'.''.
SEC. 228. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.
Notwithstanding any other provision of law, including any
provision of this subtitle and any amendment made by this
subtitle--
(1) the premiums charged for mortgage insurance under
any program under the National Housing Act may not be
increased above the premium amounts in effect under
such program on October 1, 2006, unless the Secretary
of Housing and Urban Development determines that,
absent such increase, insurance of additional mortgages
under such program would, under the Federal Credit
Reform Act of 1990, require the appropriation of new
budget authority to cover the costs (as such term is
defined in section 502 of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661a) of such insurance; and
(2) a premium increase pursuant to paragraph (1) may
be made only by rule making in accordance with the
procedures under section 553 of title 5, United States
Code (notwithstanding subsections (a)(2), (b)(B), and
(d)(3) of such section).
SEC. 229. CIVIL MONEY PENALTIES FOR IMPROPERLY INFLUENCING APPRAISALS.
Paragraph (2) of section 536(b) of the National Housing Act
(12 U.S.C. 1735f-14(b)(2)) is amended--
(1) in subparagraph (B), by striking ``or'' at the
end;
(2) in subparagraph (C), by striking the period at
the end and inserting ``; or''; and
(3) by adding at the end the following new
subparagraph:
``(D) in the case of an insured mortgage
under title II for a 1- to 4-family residence,
compensating, instructing, inducing, coercing,
or intimidating any person who conducts an
appraisal of the property in connection with
such mortgage, or attempting to compensate,
instruct, induce, coerce, or intimidate such a
person, for the purpose of causing the
appraised value assigned to the property under
the appraisal to be based on any other factor
other than the independent judgment of such
person exercised in accordance with applicable
professional standards.''.
SEC. 230. MORTGAGE INSURANCE PREMIUM REFUNDS.
(a) Authority.--The Secretary of Housing and Urban
Development shall, to the extent that amounts are made
available pursuant to subsection (c), provide refunds of
unearned premium charges paid, at the time of insurance, for
mortgage insurance under title II of the National Housing Act
(12 U.S.C. 1707 et seq.) to or on behalf of mortgagors under
mortgages described in subsection (b).
(b) Eligible Mortgages.--A mortgage described in this section
is a mortgage on a one- to four-family dwelling that--
(1) was insured under title II of the National
Housing Act (12 U.S.C. 1707 et seq.);
(2) is otherwise eligible, under the last sentence of
subparagraph (A) of section 203(c)(2) of such Act (12
U.S.C. 1709(c)(2)(A)), for a refund of all unearned
premium charges paid on the mortgage pursuant to such
subparagraph, except that the mortgage--
(A) was closed before December 8, 2004; and
(B) was endorsed on or after such date.
(c) Authorization of Appropriations.--There is authorized to
be appropriated for each fiscal year such sums as may be
necessary to provide refunds of unearned mortgage insurance
premiums pursuant to this section.
SEC. 231. SAVINGS PROVISION.
Any mortgage insured under title II of the National Housing
Act before the date of enactment of this Act shall continue to
be governed by the laws, regulations, orders, and terms and
conditions to which it was subject on the day before the date
of the enactment of this Act.
SEC. 232. IMPLEMENTATION.
Except as provided in section 223(b), the Secretary of
Housing and Urban Development shall by notice establish any
additional requirements that may be necessary to immediately
carry out the provisions of this subtitle. The notice shall
take effect upon issuance.
Subtitle B--FHA Manufactured Housing Loan Insurance Modernization
SECTION 251. SHORT TITLE.
This subtitle may be cited as the ``FHA Manufactured Housing
Loan Modernization Act of 2008''.
SEC. 252. FINDINGS AND PURPOSES.
(a) Findings.--The Congress finds that--
(1) manufactured housing plays a vital role in
providing housing for low- and moderate-income families
in the United States;
(2) the FHA title I insurance program for
manufactured home loans traditionally has been a major
provider of mortgage insurance for home-only
transactions;
(3) the manufactured housing market is in the midst
of a prolonged downturn which has resulted in a severe
contraction of traditional sources of private lending
for manufactured home purchases;
(4) during past downturns the FHA title I insurance
program for manufactured homes has filled the lending
void by providing stability until the private markets
could recover;
(5) in 1992, during the manufactured housing
industry's last major recession, over 30,000
manufactured home loans were insured under title I;
(6) in 2006, fewer than 1,500 manufactured housing
loans were insured under title I;
(7) the loan limits for title I manufactured housing
loans have not been adjusted for inflation since 1992;
and
(8) these problems with the title I program have
resulted in an atrophied market for manufactured
housing loans, leaving American families who have the
most difficulty achieving homeownership without
adequate financing options for home-only manufactured
home purchases.
(b) Purposes.--The purposes of this subtitle are--
(1) to provide adequate funding for FHA-insured
manufactured housing loans for low- and moderate-income
homebuyers during all economic cycles in the
manufactured housing industry;
(2) to modernize the FHA title I insurance program
for manufactured housing loans to enhance participation
by Ginnie Mae and the private lending markets; and
(3) to adjust the low loan limits for title I
manufactured home loan insurance to reflect the
increase in costs since such limits were last increased
in 1992 and to index the limits to inflation.
SEC. 253. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION PORTFOLIO.
The second sentence of section 2(a) of the National Housing
Act (12 U.S.C. 1703(a)) is amended--
(1) by striking ``In no case'' and inserting ``Other
than in connection with a manufactured home or a lot on
which to place such a home (or both), in no case''; and
(2) by striking ``: Provided, That with'' and
inserting ``. With''.
SEC. 254. INSURANCE BENEFITS.
(a) In General.--Subsection (b) of section 2 of the National
Housing Act (12 U.S.C. 1703(b)), is amended by adding at the
end the following new paragraph:
``(8) Insurance benefits for manufactured housing
loans.--Any contract of insurance with respect to
loans, advances of credit, or purchases in connection
with a manufactured home or a lot on which to place a
manufactured home (or both) for a financial institution
that is executed under this title after the date of the
enactment of the by the Secretary shall be conclusive
evidence of the eligibility of such financial
institution for insurance, and the validity of any
contract of insurance so executed shall be
incontestable in the hands of the bearer from the date
of the execution of such contract, except for fraud or
misrepresentation on the part of such institution.''.
(b) Applicability.--The amendment made by subsection (a)
shall only apply to loans that are registered or endorsed for
insurance after the date of the enactment of this Act.
SEC. 255. MAXIMUM LOAN LIMITS.
(a) Dollar Amounts.--Paragraph (1) of section 2(b) of the
National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
(1) in clause (ii) of subparagraph (A), by striking
``$17,500'' and inserting ``$25,090'';
(2) in subparagraph (C) by striking ``$48,600'' and
inserting ``$69,678'';
(3) in subparagraph (D) by striking ``$64,800'' and
inserting ``$92,904'';
(4) in subparagraph (E) by striking ``$16,200'' and
inserting ``$23,226''; and
(5) by realigning subparagraphs (C), (D), and (E) 2
ems to the left so that the left margins of such
subparagraphs are aligned with the margins of
subparagraphs (A) and (B).
(b) Annual Indexing.--Subsection (b) of section 2 of the
National Housing Act (12 U.S.C. 1703(b)), as amended by the
preceding provisions of this subtitle, is further amended by
adding at the end the following new paragraph:
``(9) Annual indexing of manufactured housing
loans.--The Secretary shall develop a method of
indexing in order to annually adjust the loan limits
established in subparagraphs (A)(ii), (C), (D), and (E)
of this subsection. Such index shall be based on the
manufactured housing price data collected by the United
States Census Bureau. The Secretary shall establish
such index no later than one year after the date of the
enactment of the FHA Manufactured Housing Loan
Modernization Act of 2008.''.
(c) Technical and Conforming Changes.--Paragraph (1) of
section 2(b) of the National Housing Act (12 U.S.C. 1703(b)(1))
is amended--
(1) by striking ``No'' and inserting ``Except as
provided in the last sentence of this paragraph, no'';
and
(2) by adding after and below subparagraph (G) the
following:
``The Secretary shall, by regulation, annually increase the
dollar amount limitations in subparagraphs (A)(ii), (C), (D),
and (E) (as such limitations may have been previously adjusted
under this sentence) in accordance with the index established
pursuant to paragraph (9).''.
SEC. 256. INSURANCE PREMIUMS.
Subsection (f) of section 2 of the National Housing Act (12
U.S.C. 1703(f)) is amended--
(1) by inserting ``(1) Premium Charges.--'' after
``(f)''; and
(2) by adding at the end the following new paragraph:
``(2) Manufactured Home Loans.--Notwithstanding paragraph
(1), in the case of a loan, advance of credit, or purchase in
connection with a manufactured home or a lot on which to place
such a home (or both), the premium charge for the insurance
granted under this section shall be paid by the borrower under
the loan or advance of credit, as follows:
``(A) At the time of the making of the loan, advance of
credit, or purchase, a single premium payment in an amount not
to exceed 2.25 percent of the amount of the original insured
principal obligation.
``(B) In addition to the premium under subparagraph (A),
annual premium payments during the term of the loan, advance,
or obligation purchased in an amount not exceeding 1.0 percent
of the remaining insured principal balance (excluding the
portion of the remaining balance attributable to the premium
collected under subparagraph (A) and without taking into
account delinquent payments or prepayments).
``(C) Premium charges under this paragraph shall be
established in amounts that are sufficient, but do not exceed
the minimum amounts necessary, to maintain a negative credit
subsidy for the program under this section for insurance of
loans, advances of credit, or purchases in connection with a
manufactured home or a lot on which to place such a home (or
both), as determined based upon risk to the Federal Government
under existing underwriting requirements.
``(D) The Secretary may increase the limitations on premium
payments to percentages above those set forth in subparagraphs
(A) and (B), but only if necessary, and not in excess of the
minimum increase necessary, to maintain a negative credit
subsidy as described in subparagraph (C).''.
SEC. 257. TECHNICAL CORRECTIONS.
(a) Dates.--Subsection (a) of section 2 of the National
Housing Act (12 U.S.C. 1703(a)) is amended--
(1) by striking ``on and after July 1, 1939,'' each
place such term appears; and
(2) by striking ``made after the effective date of
the Housing Act of 1954''.
(b) Authority of Secretary.--Subsection (c) of section 2 of
the National Housing Act (12 U.S.C. 1703(c)) is amended to read
as follows:
``(c) Handling and Disposal of Property.--
``(1) Authority of secretary.--Notwithstanding any
other provision of law, the Secretary may--
``(A) deal with, complete, rent, renovate,
modernize, insure, or assign or sell at public
or private sale, or otherwise dispose of, for
cash or credit in the Secretary's discretion,
and upon such terms and conditions and for such
consideration as the Secretary shall determine
to be reasonable, any real or personal property
conveyed to or otherwise acquired by the
Secretary, in connection with the payment of
insurance heretofore or hereafter granted under
this title, including any evidence of debt,
contract, claim, personal property, or security
assigned to or held by him in connection with
the payment of insurance heretofore or
hereafter granted under this section; and
``(B) pursue to final collection, by way of
compromise or otherwise, all claims assigned to
or held by the Secretary and all legal or
equitable rights accruing to the Secretary in
connection with the payment of such insurance,
including unpaid insurance premiums owed in
connection with insurance made available by
this title.
``(2) Advertisements for proposals.--Section 3709 of
the Revised Statutes shall not be construed to apply to
any contract of hazard insurance or to any purchase or
contract for services or supplies on account of such
property if the amount thereof does not exceed $25,000.
``(3) Delegation of authority.--The power to convey
and to execute in the name of the Secretary, deeds of
conveyance, deeds of release, assignments and
satisfactions of mortgages, and any other written
instrument relating to real or personal property or any
interest therein heretofore or hereafter acquired by
the Secretary pursuant to the provisions of this title
may be exercised by an officer appointed by the
Secretary without the execution of any express
delegation of power or power of attorney. Nothing in
this subsection shall be construed to prevent the
Secretary from delegating such power by order or by
power of attorney, in the Secretary's discretion, to
any officer or agent the Secretary may appoint.''.
SEC. 258. REVISION OF UNDERWRITING CRITERIA.
(a) In General.--Subsection (b) of section 2 of the National
Housing Act (12 U.S.C. 1703(b)), as amended by the preceding
provisions of this subtitle, is further amended by adding at
the end the following new paragraph:
``(10) Financial soundness of manufactured housing
program.--The Secretary shall establish such
underwriting criteria for loans and advances of credit
in connection with a manufactured home or a lot on
which to place a manufactured home (or both), including
such loans and advances represented by obligations
purchased by financial institutions, as may be
necessary to ensure that the program under this title
for insurance for financial institutions against losses
from such loans, advances of credit, and purchases is
financially sound.''.
(b) Timing.--Not later than the expiration of the 6-month
period beginning on the date of the enactment of this Act, the
Secretary of Housing and Urban Development shall revise the
existing underwriting criteria for the program referred to in
paragraph (10) of section 2(b) of the National Housing Act (as
added by subsection (a) of this section) in accordance with the
requirements of such paragraph.
SEC. 259. REQUIREMENT OF SOCIAL SECURITY ACCOUNT NUMBER FOR ASSISTANCE.
Section 2 of the National Housing Act (12 U.S.C. 1703) is
amended by adding at the end the following new subsection:
``(j) Requirement of Social Security Account Number for
Financing.--No insurance shall be granted under this section
with respect to any obligation representing any loan, advance
of credit, or purchase by a financial institution unless the
borrower to which the loan or advance of credit was made has a
valid social security number.''.
SEC. 260. GAO STUDY OF MITIGATION OF TORNADO RISKS TO MANUFACTURED
HOMES.
The Comptroller General of the United States shall assess how
the Secretary of Housing and Urban Development utilizes the FHA
manufactured housing loan insurance program under title I of
the National Housing Act, the community development block grant
program under title I of the Housing and Community Development
Act of 1974, and other programs and resources available to the
Secretary to mitigate the risks to manufactured housing
residents and communities resulting from tornados. The
Comptroller General shall submit to the Congress a report on
the conclusions and recommendations of the assessment conducted
pursuant to this section not later than the expiration of the
12-month period beginning on the date of the enactment of this
Act.
TITLE III--REFORM OF GOVERNMENT-SPONSORED ENTITIES FOR HOUSING FINANCE
SEC. 301. SHORT TITLE.
This title may be cited as the ``Federal Housing Finance
Reform Act of 2008''.
SEC. 302. DEFINITIONS.
Section 1303 of the Housing and Community Development Act of
1992 (12 U.S.C. 4502) is amended--
(1) in paragraph (7), by striking ``an enterprise''
and inserting ``a regulated entity'';
(2) by striking ``the enterprise'' each place such
term appears (except in paragraphs (4) and (18)) and
inserting ``the regulated entity'';
(3) in paragraph (5), by striking ``Office of Federal
Housing Enterprise Oversight of the Department of
Housing and Urban Development'' and inserting ``Federal
Housing Finance Agency'';
(4) in each of paragraphs (8), (9), (10), and (19),
by striking ``Secretary'' each place that term appears
and inserting ``Director'';
(5) in paragraph (13), by inserting ``, with respect
to an enterprise,'' after ``means'';
(6) by redesignating paragraphs (16) through (19) as
paragraphs (20) through (23), respectively;
(7) by striking paragraphs (14) and (15) and
inserting the following new paragraphs:
``(18) Regulated entity.--The term `regulated entity'
means--
``(A) the Federal National Mortgage
Association and any affiliate thereof;
``(B) the Federal Home Loan Mortgage
Corporation and any affiliate thereof; and
``(C) each Federal home loan bank.
``(19) Regulated entity-affiliated party.--The term
`regulated entity-affiliated party' means--
``(A) any director, officer, employee, or
agent for, a regulated entity, or controlling
shareholder of an enterprise;
``(B) any shareholder, affiliate, consultant,
or joint venture partner of a regulated entity,
and any other person, as determined by the
Director (by regulation or on a case-by-case
basis) that participates in the conduct of the
affairs of a regulated entity, except that a
shareholder of a regulated entity shall not be
considered to have participated in the affairs
of that regulated entity solely by reason of
being a member or customer of the regulated
entity;
``(C) any independent contractor for a
regulated entity (including any attorney,
appraiser, or accountant), if--
``(i) the independent contractor
knowingly or recklessly participates
in--
``(I) any violation of any
law or regulation;
``(II) any breach of
fiduciary duty; or
``(III) any unsafe or unsound
practice; and
``(ii) such violation, breach, or
practice caused, or is likely to cause,
more than a minimal financial loss to,
or a significant adverse effect on, the
regulated entity; and
``(D) any not-for-profit corporation that
receives its principal funding, on an ongoing
basis, from any regulated entity.''.
(8) by redesignating paragraphs (8) through (13) as
paragraphs (12) through (17), respectively; and
(9) by inserting after paragraph (7) the following
new paragraph:
``(11) Federal home loan bank.--The term `Federal
home loan bank' means a bank established under the
authority of the Federal Home Loan Bank Act.'';
(10) by redesignating paragraphs (2) through (7) as
paragraphs (5) through (10), respectively; and
(11) by inserting after paragraph (1) the following
new paragraphs:
``(2) Agency.--The term `Agency' means the Federal
Housing Finance Agency.
``(3) Authorizing statutes.--The term `authorizing
statutes' means--
``(A) the Federal National Mortgage
Association Charter Act;
``(B) the Federal Home Loan Mortgage
Corporation Act; and
``(C) the Federal Home Loan Bank Act.
``(4) Board.--The term `Board' means the Federal
Housing Enterprise Board established under section
1313B.''.
Subtitle A--Reform of Regulation of Enterprises and Federal Home Loan
Banks
CHAPTER 1--IMPROVEMENT OF SAFETY AND SOUNDNESS
SEC. 311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.
(a) In General.--The Housing and Community Development Act of
1992 (12 U.S.C. 4501 et seq.) is amended by striking sections
1311 and 1312 and inserting the following:
``SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.
``(a) Establishment.--There is established the Federal
Housing Finance Agency, which shall be an independent agency of
the Federal Government.
``(b) General Supervisory and Regulatory Authority.--
``(1) In general.--Each regulated entity shall, to
the extent provided in this title, be subject to the
supervision and regulation of the Agency.
``(2) Authority over fannie mae, freddie mac, and
federal home loan banks.--The Director of the Federal
Housing Finance Agency shall have general supervisory
and regulatory authority over each regulated entity and
shall exercise such general regulatory and supervisory
authority, including such duties and authorities set
forth under section 1313 of this Act, to ensure that
the purposes of this Act, the authorizing statutes, and
any other applicable law are carried out. The Director
shall have the same supervisory and regulatory
authority over any joint office of the Federal home
loan banks, including the Office of Finance of the
Federal Home Loan Banks, as the Director has over the
individual Federal home loan banks.
``(c) Savings Provision.--The authority of the Director to
take actions under subtitles B and C shall not in any way limit
the general supervisory and regulatory authority granted to the
Director.
``SEC. 1312. DIRECTOR.
``(a) Establishment of Position.--There is established the
position of the Director of the Federal Housing Finance Agency,
who shall be the head of the Agency.
``(b) Appointment; Term.--
``(1) Appointment.--The Director shall be appointed
by the President, by and with the advice and consent of
the Senate, from among individuals who are citizens of
the United States, have a demonstrated understanding of
financial management or oversight, and have a
demonstrated understanding of capital markets,
including the mortgage securities markets and housing
finance.
``(2) Term and removal.--The Director shall be
appointed for a term of 5 years and may be removed by
the President only for cause.
``(3) Vacancy.--A vacancy in the position of Director
that occurs before the expiration of the term for which
a Director was appointed shall be filled in the manner
established under paragraph (1), and the Director
appointed to fill such vacancy shall be appointed only
for the remainder of such term.
``(4) Service after end of term.--An individual may
serve as the Director after the expiration of the term
for which appointed until a successor has been
appointed.
``(5) Transitional provision.--Notwithstanding
paragraphs (1) and (2), the Director of the Office of
Federal Housing Enterprise Oversight of the Department
of Housing and Urban Development shall serve as the
Director until a successor has been appointed under
paragraph (1).
``(c) Deputy Director of the Division of Enterprise
Regulation.--
``(1) In general.--The Agency shall have a Deputy
Director of the Division of Enterprise Regulation, who
shall be appointed by the Director from among
individuals who are citizens of the United States, and
have a demonstrated understanding of financial
management or oversight and of mortgage securities
markets and housing finance.
``(2) Functions.--The Deputy Director of the Division
of Enterprise Regulation shall have such functions,
powers, and duties with respect to the oversight of the
enterprises as the Director shall prescribe.
``(d) Deputy Director of the Division of Federal Home Loan
Bank Regulation.--
``(1) In general.--The Agency shall have a Deputy
Director of the Division of Federal Home Loan Bank
Regulation, who shall be appointed by the Director from
among individuals who are citizens of the United
States, have a demonstrated understanding of financial
management or oversight and of the Federal Home Loan
Bank System and housing finance.
``(2) Functions.--The Deputy Director of the Division
of Federal Home Loan Bank Regulation shall have such
functions, powers, and duties with respect to the
oversight of the Federal home loan banks as the
Director shall prescribe.
``(e) Deputy Director for Housing.--
``(1) In general.--The Agency shall have a Deputy
Director for Housing, who shall be appointed by the
Director from among individuals who are citizens of the
United States, and have a demonstrated understanding of
the housing markets and housing finance and of
community and economic development.
``(2) Functions.--The Deputy Director for Housing
shall have such functions, powers, and duties with
respect to the oversight of the housing mission and
goals of the enterprises, and with respect to oversight
of the housing finance and community and economic
development mission of the Federal home loan banks, as
the Director shall prescribe.
``(f) Limitations.--The Director and each of the Deputy
Directors may not--
``(1) have any direct or indirect financial interest
in any regulated entity or regulated entity-affiliated
party;
``(2) hold any office, position, or employment in any
regulated entity or regulated entity-affiliated party;
or
``(3) have served as an executive officer or director
of any regulated entity, or regulated entity-affiliated
party, at any time during the 3-year period ending on
the date of appointment of such individual as Director
or Deputy Director.
``(g) Ombudsman.--The Director shall establish the position
of the Ombudsman in the Agency. The Director shall provide that
the Ombudsman will consider complaints and appeals from any
regulated entity and any person that has a business
relationship with a regulated entity and shall specify the
duties and authority of the Ombudsman.''.
(b) Appointment of Director.--Notwithstanding any other
provision of law or of this title, the President may, any time
after the date of the enactment of this Act, appoint an
individual to serve as the Director of the Federal Housing
Finance Agency, as such office is established by the amendment
made by subsection (a). This subsection shall take effect on
the date of the enactment of this Act.
SEC. 312. DUTIES AND AUTHORITIES OF DIRECTOR.
(a) In General.--The Housing and Community Development Act of
1992 (12 U.S.C. 4513) is amended by striking section 1313 and
inserting the following new sections:
``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.
``(a) Duties.--
``(1) Principal duties.--The principal duties of the
Director shall be--
``(A) to oversee the operations of each
regulated entity and any joint office of the
Federal Home Loan Banks; and
``(B) to ensure that--
``(i) each regulated entity operates
in a safe and sound manner, including
maintenance of adequate capital and
internal controls;
``(ii) the operations and activities
of each regulated entity foster liquid,
efficient, competitive, and resilient
national housing finance markets that
minimize the cost of housing finance
(including activities relating to
mortgages on housing for low- and
moderate- income families involving a
reasonable economic return that may be
less than the return earned on other
activities);
``(iii) each regulated entity
complies with this title and the rules,
regulations, guidelines, and orders
issued under this title and the
authorizing statutes; and
``(iv) each regulated entity carries
out its statutory mission only through
activities that are consistent with
this title and the authorizing
statutes.
``(2) Scope of authority.--The authority of the
Director shall include the authority--
``(A) to review and, if warranted based on
the principal duties described in paragraph
(1), reject any acquisition or transfer of a
controlling interest in an enterprise; and
``(B) to exercise such incidental powers as
may be necessary or appropriate to fulfill the
duties and responsibilities of the Director in
the supervision and regulation of each
regulated entity.
``(b) Delegation of Authority.--The Director may delegate to
officers or employees of the Agency, including each of the
Deputy Directors, any of the functions, powers, or duties of
the Director, as the Director considers appropriate.
``(c) Litigation Authority.--
``(1) In general.--In enforcing any provision of this
title, any regulation or order prescribed under this
title, or any other provision of law, rule, regulation,
or order, or in any other action, suit, or proceeding
to which the Director is a party or in which the
Director is interested, and in the administration of
conservatorships and receiverships, the Director may
act in the Director's own name and through the
Director's own attorneys, or request that the Attorney
General of the United States act on behalf of the
Director.
``(2) Consultation with attorney general.--The
Director shall provide notice to, and consult with, the
Attorney General of the United States before taking an
action under paragraph (1) of this subsection or under
section 1344(a), 1345(d), 1348(c), 1372(e), 1375(a),
1376(d), or 1379D(c), except that, if the Director
determines that any delay caused by such prior notice
and consultation may adversely affect the safety and
soundness responsibilities of the Director under this
title, the Director shall notify the Attorney General
as soon as reasonably possible after taking such
action.
``(3) Subject to suit.--Except as otherwise provided
by law, the Director shall be subject to suit (other
than suits on claims for money damages) by a regulated
entity or director or officer thereof with respect to
any matter under this title or any other applicable
provision of law, rule, order, or regulation under this
title, in the United States district court for the
judicial district in which the regulated entity has its
principal place of business, or in the United States
District Court for the District of Columbia, and the
Director may be served with process in the manner
prescribed by the Federal Rules of Civil Procedure.
``SEC. 1313A. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.
``(a) Standards.--The Director shall establish standards, by
regulation, guideline, or order, for each regulated entity
relating to--
``(1) adequacy of internal controls and information
systems, including information security and privacy
policies and practices, taking into account the nature
and scale of business operations;
``(2) independence and adequacy of internal audit
systems;
``(3) management of credit and counterparty risk,
including systems to identify concentrations of credit
risk and prudential limits to restrict exposure of the
regulated entity to a single counterparty or groups of
related counterparties;
``(4) management of interest rate risk exposure;
``(5) management of market risk, including standards
that provide for systems that accurately measure,
monitor, and control market risks and, as warranted,
that establish limitations on market risk;
``(6) adequacy and maintenance of liquidity and
reserves;
``(7) management of any asset and investment
portfolio;
``(8) investments and acquisitions by a regulated
entity, to ensure that they are consistent with the
purposes of this Act and the authorizing statutes;
``(9) maintenance of adequate records, in accordance
with consistent accounting policies and practices that
enable the Director to evaluate the financial condition
of the regulated entity;
``(10) issuance of subordinated debt by that
particular regulated entity, as the Director considers
necessary;
``(11) overall risk management processes, including
adequacy of oversight by senior management and the
board of directors and of processes and policies to
identify, measure, monitor, and control material risks,
including reputational risks, and for adequate, well-
tested business resumption plans for all major systems
with remote site facilities to protect against
disruptive events; and
``(12) such other operational and management
standards as the Director determines to be appropriate.
``(b) Failure To Meet Standards.--
``(1) Plan requirement.--
``(A) In general.--If the Director determines
that a regulated entity fails to meet any
standard established under subsection (a)--
``(i) if such standard is established
by regulation, the Director shall
require the regulated entity to submit
an acceptable plan to the Director
within the time allowed under
subparagraph (C); and
``(ii) if such standard is
established by guideline, the Director
may require the regulated entity to
submit a plan described in clause (i).
``(B) Contents.--Any plan required under
subparagraph (A) shall specify the actions that
the regulated entity will take to correct the
deficiency. If the regulated entity is
undercapitalized, the plan may be a part of the
capital restoration plan for the regulated
entity under section 1369C.
``(C) Deadlines for submission and review.--
The Director shall by regulation establish
deadlines that--
``(i) provide the regulated entities
with reasonable time to submit plans
required under subparagraph (A), and
generally require a regulated entity to
submit a plan not later than 30 days
after the Director determines that the
entity fails to meet any standard
established under subsection (a); and
``(ii) require the Director to act on
plans expeditiously, and generally not
later than 30 days after the plan is
submitted.
``(2) Required order upon failure to submit or
implement plan.--If a regulated entity fails to submit
an acceptable plan within the time allowed under
paragraph (1)(C), or fails in any material respect to
implement a plan accepted by the Director, the
following shall apply:
``(A) Required correction of deficiency.--The
Director shall, by order, require the regulated
entity to correct the deficiency.
``(B) Other authority.--The Director may, by
order, take one or more of the following
actions until the deficiency is corrected:
``(i) Prohibit the regulated entity
from permitting its average total
assets (as such term is defined in
section 1316(b)) during any calendar
quarter to exceed its average total
assets during the preceding calendar
quarter, or restrict the rate at which
the average total assets of the entity
may increase from one calendar quarter
to another.
``(ii) Require the regulated entity--
``(I) in the case of an
enterprise, to increase its
ratio of core capital to
assets.
``(II) in the case of a
Federal home loan bank, to
increase its ratio of total
capital (as such term is
defined in section 6(a)(5) of
the Federal Home Loan Bank Act
(12 U.S.C. 1426(a)(5)) to
assets.
``(iii) Require the regulated entity
to take any other action that the
Director determines will better carry
out the purposes of this section than
any of the actions described in this
subparagraph.
``(3) Mandatory restrictions.--In complying with
paragraph (2), the Director shall take one or more of
the actions described in clauses (i) through (iii) of
paragraph (2)(B) if--
``(A) the Director determines that the
regulated entity fails to meet any standard
prescribed under subsection (a);
``(B) the regulated entity has not corrected
the deficiency; and
``(C) during the 18-month period before the
date on which the regulated entity first failed
to meet the standard, the entity underwent
extraordinary growth, as defined by the
Director.
``(c) Other Enforcement Authority Not Affected.--The
authority of the Director under this section is in addition to
any other authority of the Director.''.
(b) Independence in Congressional Testimony and
Recommendations.--Section 111 of Public Law 93-495 (12 U.S.C.
250) is amended by striking ``the Federal Housing Finance
Board'' and inserting ``the Director of the Federal Housing
Finance Agency''.
SEC. 313. FEDERAL HOUSING ENTERPRISE BOARD.
(a) In General.--Title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4501 et seq.) is amended by
inserting after section 1313A, as added by the preceding
provisions of this title, the following new section:
``SEC. 1313B. FEDERAL HOUSING ENTERPRISE BOARD.
``(a) In General.--There is established the Federal Housing
Enterprise Board, which shall advise the Director with respect
to overall strategies and policies in carrying out the duties
of the Director under this title.
``(b) Limitations.--The Board may not exercise any executive
authority, and the Director may not delegate to the Board any
of the functions, powers, or duties of the Director.
``(c) Composition.--The Board shall be comprised of 3
members, of whom--
``(1) one member shall be the Secretary of the
Treasury;
``(2) one member shall be the Secretary of Housing
and Urban Development; and
``(3) one member shall be the Director, who shall
serve as the Chairperson of the Board.
``(d) Meetings.--
``(1) In general.--The Board shall meet upon notice
by the Director, but in no event shall the Board meet
less frequently than once every 3 months.
``(2) Special meetings.--Either the Secretary of the
Treasury or the Secretary of Housing and Urban
Development may, upon giving written notice to the
Director, require a special meeting of the Board.
``(e) Testimony.--On an annual basis, the Board shall testify
before Congress regarding--
``(1) the safety and soundness of the regulated
entities;
``(2) any material deficiencies in the conduct of the
operations of the regulated entities;
``(3) the overall operational status of the regulated
entities;
``(4) an evaluation of the performance of the
regulated entities in carrying out their respective
missions;
``(5) operations, resources, and performance of the
Agency; and
``(6) such other matters relating to the Agency and
its fulfillment of its mission, as the Board determines
appropriate.''.
(b) Annual Report of the Director.--Section 1319B(a) of the
Housing and Community Development Act of 1992 (12 U.S.C. 4521
(a)) is amended--
(1) in paragraph (3), by striking ``and'' at the end;
and
(2) by striking paragraph (4) and inserting the
following new paragraphs:
``(4) an assessment of the Board or any of its
members with respect to--
``(A) the safety and soundness of the
regulated entities;
``(B) any material deficiencies in the
conduct of the operations of the regulated
entities;
``(C) the overall operational status of the
regulated entities; and
``(D) an evaluation of the performance of the
regulated entities in carrying out their
missions;
``(5) operations, resources, and performance of the
Agency;
``(6) a description of the demographic makeup of the
workforce of the Agency and the actions taken pursuant
to section 1319A(b) to provide for diversity in the
workforce; and
``(7) such other matters relating to the Agency and
its fulfillment of its mission.''.
SEC. 314. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.
Section 1314 of the Housing and Community Development Act of
1992 (12 U.S.C. 4514) is amended--
(1) in the section heading, by striking
``ENTERPRISES'' and inserting ``REGULATED ENTITIES'';
(2) in subsection (a)--
(A) in the subsection heading, by striking
``Special Reports and Reports of Financial
Condition'' and inserting ``Regular and Special
Reports'';
(B) in paragraph (1)--
(i) in the paragraph heading, by
striking ``Financial condition'' and
inserting ``Regular reports''; and
(ii) by striking ``reports of
financial condition and operations''
and inserting ``regular reports on the
condition (including financial
condition), management, activities, or
operations of the regulated entity, as
the Director considers appropriate'';
and
(C) in paragraph (2), after ``submit special
reports'' insert ``on any of the topics
specified in paragraph (1) or such other
topics''; and
(3) by adding at the end the following new
subsection:
``(c) Reports of Fraudulent Financial Transactions.--
``(1) Requirement to report.--The Director shall
require a regulated entity to submit to the Director a
timely report upon discovery by the regulated entity
that it has purchased or sold a fraudulent loan or
financial instrument or suspects a possible fraud
relating to a purchase or sale of any loan or financial
instrument. The Director shall require the regulated
entities to establish and maintain procedures designed
to discover any such transactions.
``(2) Protection from liability for reports.--
``(A) In general.--If a regulated entity
makes a report pursuant to paragraph (1), or a
regulated entity-affiliated party makes, or
requires another to make, such a report, and
such report is made in a good faith effort to
comply with the requirements of paragraph (1),
such regulated entity or regulated entity-
affiliated party shall not be liable to any
person under any law or regulation of the
United States, any constitution, law, or
regulation of any State or political
subdivision of any State, or under any contract
or other legally enforceable agreement
(including any arbitration agreement), for such
report or for any failure to provide notice of
such report to the person who is the subject of
such report or any other person identified in
the report.
``(B) Rule of construction.--Subparagraph (A)
shall not be construed as creating--
``(i) any inference that the term
`person', as used in such subparagraph,
may be construed more broadly than its
ordinary usage so as to include any
government or agency of government; or
``(ii) any immunity against, or
otherwise affecting, any civil or
criminal action brought by any
government or agency of government to
enforce any constitution, law, or
regulation of such government or
agency.''.
SEC. 315. DISCLOSURE OF INCOME AND CHARITABLE CONTRIBUTIONS BY
ENTERPRISES.
Section 1314 of the Housing and Community Development Act of
1992 (12 U.S.C. 4514), as amended by the preceding provisions
of this title, is further amended by adding at the end the
following new subsections:
``(d) Disclosure of Charitable Contributions by
Enterprises.--
``(1) Required disclosure.--The Director shall, by
regulation, require each enterprise to submit a report
annually, in a format designated by the Director,
containing the following information:
``(A) Total value.--The total value of
contributions made by the enterprise to
nonprofit organizations during its previous
fiscal year.
``(B) Substantial contributions.--If the
value of contributions made by the enterprise
to any nonprofit organization during its
previous fiscal year exceeds the designated
amount, the name of that organization and the
value of contributions.
``(C) Substantial contributions to insider-
affiliated charities.--Identification of each
contribution whose value exceeds the designated
amount that were made by the enterprise during
the enterprise's previous fiscal year to any
nonprofit organization of which a director,
officer, or controlling person of the
enterprise, or a spouse thereof, was a director
or trustee, the name of such nonprofit
organization, and the value of the
contribution.
``(2) Definitions.--For purposes of this subsection--
``(A) the term `designated amount' means such
amount as may be designated by the Director by
regulation, consistent with the public interest
and the protection of investors for purposes of
this subsection; and
``(B) the Director may, by such regulations
as the Director deems necessary or appropriate
in the public interest, define the terms
officer and controlling person.
``(3) Public availability.--The Director shall make
the information submitted pursuant to this subsection
publicly available.
``(e) Disclosure of Income.--Each enterprise shall include,
in each annual report filed under section 13 of the Securities
Exchange Act of 1934 (15 U.S.C. 78m), the income reported by
the issuer to the Internal Revenue Service for the most recent
taxable year. Such income shall--
``(1) be presented in a prominent location in each
such report and in a manner that permits a ready
comparison of such income to income otherwise required
to be included in such reports under regulations issued
under such section; and
``(2) be submitted to the Securities and Exchange
Commission in a form and manner suitable for entry into
the EDGAR system of such Commission for public
availability under such system.''.
SEC. 316. ASSESSMENTS.
Section 1316 of the Housing and Community Development Act of
1992 (12 U.S.C. 4516) is amended--
(1) by striking subsection (a) and inserting the
following new subsection:
``(a) Annual Assessments.--The Director shall establish and
collect from the regulated entities annual assessments in an
amount not exceeding the amount sufficient to provide for
reasonable costs and expenses of the Agency, including--
``(1) the expenses of any examinations under section
1317 of this Act and under section 20 of the Federal
Home Loan Bank Act;
``(2) the expenses of obtaining any reviews and
credit assessments under section 1319;
``(3) such amounts in excess of actual expenses for
any given year as deemed necessary by the Director to
maintain a working capital fund in accordance with
subsection (e); and
``(4) the wind up of the affairs of the Office of
Federal Housing Enterprise Oversight and the Federal
Housing Finance Board under subtitle C of the Federal
Housing Finance Reform Act of 2008.'';
(2) in subsection (b)--
(A) in the subsection heading, by striking
``Enterprises'' and inserting ``Regulated
Entities'' ;
(B) by realigning paragraph (2) two ems from
the left margin, so as to align the left margin
of such paragraph with the left margins of
paragraph (1);
(C) in paragraph (1)--
(i) by striking ``Each enterprise''
and inserting ``Each regulated
entity'';
(ii) by striking ``each enterprise''
and inserting ``each regulated
entity''; and
(iii) by striking ``both
enterprises'' and inserting ``all of
the regulated entities''; and
(D) in paragraph (3)--
(i) in subparagraph (B), by striking
``subparagraph (A)'' and inserting
``clause (i)'';
(ii) by redesignating subparagraphs
(A), (B), and (C) as clauses (i), (ii)
and (ii), respectively, and realigning
such clauses, as so redesignated, so as
to be indented 6 ems from the left
margin;
(iii) by striking the matter that
precedes clause (i), as so
redesignated, and inserting the
following:
``(3) Definition of total assets.--For purposes of
this section, the term `total assets' means as follows:
``(A) Enterprises.--With respect to an
enterprise, the sum of--''; and
(iv) by adding at the end the
following new subparagraph:
``(B) Federal home loan banks.--With respect
to a Federal home loan bank, the total assets
of the Bank, as determined by the Director in
accordance with generally accepted accounting
principles.'';
(3) by striking subsection (c) and inserting the
following new subsection:
``(c) Increased Costs of Regulation.--
``(1) Increase for inadequate capitalization.--The
semiannual payments made pursuant to subsection (b) by
any regulated entity that is not classified (for
purposes of subtitle B) as adequately capitalized may
be increased, as necessary, in the discretion of the
Director to pay additional estimated costs of
regulation of the regulated entity.
``(2) Adjustment for enforcement activities.--The
Director may adjust the amounts of any semiannual
payments for an assessment under subsection (a) that
are to be paid pursuant to subsection (b) by a
regulated entity, as necessary in the discretion of the
Director, to ensure that the costs of enforcement
activities under this Act for a regulated entity are
borne only by such regulated entity.
``(3) Additional assessment for deficiencies.--If at
any time, as a result of increased costs of regulation
of a regulated entity that is not classified (for
purposes of subtitle B) as adequately capitalized or as
the result of supervisory or enforcement activities
under this Act for a regulated entity, the amount
available from any semiannual payment made by such
regulated entity pursuant to subsection (b) is
insufficient to cover the costs of the Agency with
respect to such entity, the Director may make and
collect from such regulated entity an immediate
assessment to cover the amount of such deficiency for
the semiannual period. If, at the end of any semiannual
period during which such an assessment is made, any
amount remains from such assessment, such remaining
amount shall be deducted from the assessment for such
regulated entity for the following semiannual
period.'';
(4) in subsection (d), by striking ``If'' and
inserting ``Except with respect to amounts collected
pursuant to subsection (a)(3), if''; and
(5) by striking subsections (e) through (g) and
inserting the following new subsections:
``(e) Working Capital Fund.--At the end of each year for
which an assessment under this section is made, the Director
shall remit to each regulated entity any amount of assessment
collected from such regulated entity that is attributable to
subsection (a)(3) and is in excess of the amount the Director
deems necessary to maintain a working capital fund.
``(f) Treatment of Assessments.--
``(1) Deposit.--Amounts received by the Director from
assessments under this section may be deposited by the
Director in the manner provided in section 5234 of the
Revised Statutes (12 U.S.C. 192) for monies deposited
by the Comptroller of the Currency.
``(2) Not government funds.--The amounts received by
the Director from any assessment under this section
shall not be construed to be Government or public funds
or appropriated money.
``(3) No apportionment of funds.--Notwithstanding any
other provision of law, the amounts received by the
Director from any assessment under this section shall
not be subject to apportionment for the purpose of
chapter 15 of title 31, United States Code, or under
any other authority.
``(4) Use of funds.--The Director may use any amounts
received by the Director from assessments under this
section for compensation of the Director and other
employees of the Agency and for all other expenses of
the Director and the Agency.
``(5) Availability of oversight fund amounts.--
Notwithstanding any other provision of law, any amounts
remaining in the Federal Housing Enterprises Oversight
Fund established under this section (as in effect
before the effective date under section 365 of the
Federal Housing Finance Reform Act of 2008), and any
amounts remaining from assessments on the Federal Home
Loan banks pursuant to section 18(b) of the Federal
Home Loan Bank Act (12 U.S.C. 1438(b)), shall, upon
such effective date, be treated for purposes of this
subsection as amounts received from assessments under
this section.
``(6) Treasury investments.--
``(A) Authority.--The Director may request
the Secretary of the Treasury to invest such
portions of amount received by the Director
from assessments paid under this section that,
in the Director's discretion, are not required
to meet the current working needs of the
Agency.
``(B) Government obligations.--Pursuant to a
request under subparagraph (A), the Secretary
of the Treasury shall invest such amounts in
government obligations guaranteed as to
principal and interest by the United States
with maturities suitable to the needs of Agency
and bearing interest at a rate determined by
the Secretary of the Treasury taking into
consideration current market yields on
outstanding marketable obligations of the
United States of comparable maturity.
``(g) Budget and Financial Management.--
``(1) Financial operating plans and forecasts.--The
Director shall provide to the Director of the Office of
Management and Budget copies of the Director's
financial operating plans and forecasts as prepared by
the Director in the ordinary course of the Agency's
operations, and copies of the quarterly reports of the
Agency's financial condition and results of operations
as prepared by the Director in the ordinary course of
the Agency's operations.
``(2) Financial statements.--The Agency shall prepare
annually a statement of assets and liabilities and
surplus or deficit; a statement of income and expenses;
and a statement of sources and application of funds.
``(3) Financial management systems.--The Agency shall
implement and maintain financial management systems
that comply substantially with Federal financial
management systems requirements, applicable Federal
accounting standards, and that uses a general ledger
system that accounts for activity at the transaction
level.
``(4) Assertion of internal controls.--The Director
shall provide to the Comptroller General an assertion
as to the effectiveness of the internal controls that
apply to financial reporting by the Agency, using the
standards established in section 3512(c) of title 31,
United States Code.
``(5) Rule of construction.--This subsection may not
be construed as implying any obligation on the part of
the Director to consult with or obtain the consent or
approval of the Director of the Office of Management
and Budget with respect to any reports, plans,
forecasts, or other information referred to in
paragraph (1) or any jurisdiction or oversight over the
affairs or operations of the Agency.
``(h) Audit of Agency.--
``(1) In general.--The Comptroller General shall
annually audit the financial transactions of the Agency
in accordance with the U.S. generally accepted
government auditing standards as may be prescribed by
the Comptroller General of the United States. The audit
shall be conducted at the place or places where
accounts of the Agency are normally kept. The
representatives of the Government Accountability Office
shall have access to the personnel and to all books,
accounts, documents, papers, records (including
electronic records), reports, files, and all other
papers, automated data, things, or property belonging
to or under the control of or used or employed by the
Agency pertaining to its financial transactions and
necessary to facilitate the audit, and such
representatives shall be afforded full facilities for
verifying transactions with the balances or securities
held by depositories, fiscal agents, and custodians.
All such books, accounts, documents, records, reports,
files, papers, and property of the Agency shall remain
in possession and custody of the Agency. The
Comptroller General may obtain and duplicate any such
books, accounts, documents, records, working papers,
automated data and files, or other information relevant
to such audit without cost to the Comptroller General
and the Comptroller General's right of access to such
information shall be enforceable pursuant to section
716(c) of title 31, United States Code.
``(2) Report.--The Comptroller General shall submit
to the Congress a report of each annual audit conducted
under this subsection. The report to the Congress shall
set forth the scope of the audit and shall include the
statement of assets and liabilities and surplus or
deficit, the statement of income and expenses, the
statement of sources and application of funds, and such
comments and information as may be deemed necessary to
inform Congress of the financial operations and
condition of the Agency, together with such
recommendations with respect thereto as the Comptroller
General may deem advisable. A copy of each report shall
be furnished to the President and to the Agency at the
time submitted to the Congress.
``(3) Assistance and costs.--For the purpose of
conducting an audit under this subsection, the
Comptroller General may, in the discretion of the
Comptroller General, employ by contract, without regard
to section 5 of title 41, United States Code,
professional services of firms and organizations of
certified public accountants for temporary periods or
for special purposes. Upon the request of the
Comptroller General, the Director of the Agency shall
transfer to the Government Accountability Office from
funds available, the amount requested by the
Comptroller General to cover the full costs of any
audit and report conducted by the Comptroller General.
The Comptroller General shall credit funds transferred
to the account established for salaries and expenses of
the Government Accountability Office, and such amount
shall be available upon receipt and without fiscal year
limitation to cover the full costs of the audit and
report.''.
SEC. 317. EXAMINERS AND ACCOUNTANTS.
(a) Examinations.--Section 1317 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4517) is amended--
(1) in subsection (a), by adding after the period at
the end the following: ``Each examination under this
subsection of a regulated entity shall include a review
of the procedures required to be established and
maintained by the regulated entity pursuant to section
1314(c) (relating to fraudulent financial transactions)
and the report regarding each such examination shall
describe any problems with such procedures maintained
by the regulated entity.'';
(2) in subsection (b)--
(A) by inserting ``of a regulated entity''
after ``under this section''; and
(B) by striking ``to determine the condition
of an enterprise for the purpose of ensuring
its financial safety and soundness'' and
inserting ``or appropriate''; and
(3) in subsection (c)--
(A) in the second sentence, by inserting ``to
conduct examinations under this section''
before the period; and
(B) in the third sentence, by striking ``from
amounts available in the Federal Housing
Enterprises Oversight Fund''.
(b) Enhanced Authority To Hire Examiners and Accountants.--
Section 1317 of the Housing and Community Development Act of
1992 (12 U.S.C. 4517) is amended by adding at the end the
following new subsection:
``(g) Appointment of Accountants, Economists, Specialists,
and Examiners.--
``(1) Applicability.--This section applies with
respect to any position of examiner, accountant,
specialist in financial markets, specialist in
information technology, and economist at the Agency,
with respect to supervision and regulation of the
regulated entities, that is in the competitive service.
``(2) Appointment authority.--The Director may
appoint candidates to any position described in
paragraph (1)--
``(A) in accordance with the statutes, rules,
and regulations governing appointments in the
excepted service; and
``(B) notwithstanding any statutes, rules,
and regulations governing appointments in the
competitive service.
``(3) Rule of construction.--The appointment of a
candidate to a position under the authority of this
subsection shall not be considered to cause such
position to be converted from the competitive service
to the excepted service.''.
(c) Repeal.--Section 20 of the Federal Home Loan Bank Act (12
U.S.C. 1440) is amended--
(1) by striking the section heading and inserting the
following: ``examinations and gao audits'';
(2) in the third sentence, by striking ``the Board
and'' each place such term appears; and
(3) by striking the first two sentences and inserting
the following: ``The Federal home loan banks shall be
subject to examinations by the Director to the extent
provided in section 1317 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4517).''.
SEC. 318. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.
(a) In General.--Section 1318 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4518) is amended--
(1) in the section heading, by striking ``OF
EXCESSIVE'' and inserting ``AND WITHHOLDING OF
EXECUTIVE'';
(2) by redesignating subsection (b) as subsection
(d); and
(3) by inserting after subsection (a) the following
new subsections:
``(b) Factors.--In making any determination under subsection
(a), the Director may take into consideration any factors the
Director considers relevant, including any wrongdoing on the
part of the executive officer, and such wrongdoing shall
include any fraudulent act or omission, breach of trust or
fiduciary duty, violation of law, rule, regulation, order, or
written agreement, and insider abuse with respect to the
regulated entity. The approval of an agreement or contract
pursuant to section 309(d)(3)(B) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723a(d)(3)(B)) or
section 303(h)(2) of the Federal Home Loan Mortgage Corporation
Act (12 U.S.C. 1452(h)(2)) shall not preclude the Director from
making any subsequent determination under subsection (a).
``(c) Withholding of Compensation.--In carrying out
subsection (a), the Director may require a regulated entity to
withhold any payment, transfer, or disbursement of compensation
to an executive officer, or to place such compensation in an
escrow account, during the review of the reasonableness and
comparability of compensation.''.
(b) Conforming Amendments.--
(1) Fannie mae.--Section 309(d) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1723a(d)) is amended by adding at the end the following
new paragraph:
``(4) Notwithstanding any other provision of this section,
the corporation shall not transfer, disburse, or pay
compensation to any executive officer, or enter into an
agreement with such executive officer, without the approval of
the Director, for matters being reviewed under section 1318 of
the Federal Housing Enterprises Financial Safety and Soundness
Act of 1992 (12 U.S.C. 4518).''.
(2) Freddie mac.--Section 303(h) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1452(h)) is
amended by adding at the end the following new
paragraph:
``(4) Notwithstanding any other provision of this section,
the Corporation shall not transfer, disburse, or pay
compensation to any executive officer, or enter into an
agreement with such executive officer, without the approval of
the Director, for matters being reviewed under section 1318 of
the Federal Housing Enterprises Financial Safety and Soundness
Act of 1992 (12 U.S.C. 4518).''.
(3) Federal home loan banks.--Section 7 of the
Federal Home Loan Bank Act (12 U.S.C. 1427) is amended
by adding at the end the following new subsection:
``(l) Withholding of Compensation.--Notwithstanding any other
provision of this section, a Federal home loan bank shall not
transfer, disburse, or pay compensation to any executive
officer, or enter into an agreement with such executive
officer, without the approval of the Director, for matters
being reviewed under section 1318 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4518).''.
SEC. 319. REVIEWS OF REGULATED ENTITIES.
Section 1319 of the Housing and Community Development Act of
1992 (12 U.S.C. 4519) is amended--
(1) by striking the section designation and heading
and inserting the following:
``SEC. 1319. REVIEWS OF REGULATED ENTITIES.'';
and
(2) by striking ``is a nationally recognized'' and
all that follows through ``1934'' and inserting the
following: ``the Director considers appropriate,
including an entity that is registered under section 15
of the Securities Exchange Act of 1934 (15 U.S.C. 78a)
as a nationally registered statistical rating
organization''.
SEC. 320. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN AGENCY
WORKFORCE.
Section 1319A of the Housing and Community Development Act of
1992 (12 U.S.C. 4520) is amended--
(1) in the section heading, by striking ``EQUAL
OPPORTUNITY IN SOLICITATION OF CONTRACTS'' and
inserting ``MINORITY AND WOMEN INCLUSION; DIVERSITY
REQUIREMENTS'';
(2) in subsection (a), by striking ``(a) In
General.--Each enterprise'' and inserting ``(e)
Outreach.--Each regulated entity''; and
(3) by striking subsection (b);
(4) by inserting before subsection (e), as so
redesignated by paragraph (2) of this section, the
following new subsections:
``(a) Office of Minority and Women Inclusion.--Each regulated
entity shall establish an Office of Minority and Women
Inclusion, or designate an office of the entity, that shall be
responsible for carrying out this section and all matters of
the entity relating to diversity in management, employment, and
business activities in accordance with such standards and
requirements as the Director shall establish.
``(b) Inclusion in All Levels of Business Activities.--Each
regulated entity shall develop and implement standards and
procedures to ensure, to the maximum extent possible, the
inclusion and utilization of minorities (as such term is
defined in section 1204(c) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811
note)) and women, and minority- and women-owned businesses (as
such terms are defined in section 21A(r)(4) of the Federal Home
Loan Bank Act (12 U.S.C. 1441a(r)(4)) (including financial
institutions, investment banking firms, mortgage banking firms,
asset management firms, broker-dealers, financial services
firms, underwriters, accountants, brokers, investment
consultants, and providers of legal services) in all business
and activities of the regulated entity at all levels, including
in procurement, insurance, and all types of contracts
(including contracts for the issuance or guarantee of any debt,
equity, or mortgage-related securities, the management of its
mortgage and securities portfolios, the making of its equity
investments, the purchase, sale and servicing of single- and
multi-family mortgage loans, and the implementation of its
affordable housing program and initiatives). The processes
established by each regulated entity for review and evaluation
for contract proposals and to hire service providers shall
include a component that gives consideration to the diversity
of the applicant.
``(c) Applicability.--This section shall apply to all
contracts of a regulated entity for services of any kind,
including services that require the services of investment
banking, asset management entities, broker-dealers, financial
services entities, underwriters, accountants, investment
consultants, and providers of legal services.
``(d) Inclusion in Annual Reports.--Each regulated entity
shall include, in the annual report submitted by the entity to
the Director pursuant to section 309(k) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723a(k)), section
307(c) of the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1456(c)), and section 20 of the Federal Home Loan Bank
Act (12 U.S.C. 1440), as applicable, detailed information
describing the actions taken by the entity pursuant to this
section, which shall include a statement of the total amounts
paid by the entity to third party contractors since the last
such report and the percentage of such amounts paid to
businesses described in subsection (b) of this section.''; and
(5) by adding at the end the following new
subsection:
``(f) Diversity in Agency Workforce.--The Agency shall take
affirmative steps to seek diversity in its workforce at all
levels of the agency consistent with the demographic diversity
of the United States, which shall include--
``(1) heavily recruiting at historically Black
colleges and universities, Hispanic-serving
institutions, women's colleges, and colleges that
typically serve majority minority populations;
``(2) sponsoring and recruiting at job fairs in urban
communities, and placing employment advertisements in
newspapers and magazines oriented toward women and
people of color;
``(3) partnering with organizations that are focused
on developing opportunities for minorities and women to
place talented young minorities and women in industry
internships, summer employment, and full-time
positions; and
``(4) where feasible, partnering with inner-city high
schools, girls' high schools, and high schools with
majority minority populations to establish or enhance
financial literacy programs and provide mentoring.''.
SEC. 321. REGULATIONS AND ORDERS.
Section 1319G of the Housing and Community Development Act of
1992 (12 U.S.C. 4526) is amended--
(1) by striking subsection (a) and inserting the
following new subsection:
``(a) Authority.--The Director shall issue any regulations,
guidelines, and orders necessary to carry out the duties of the
Director under this title and each of the authorizing statutes
to ensure that the purposes of this title and such statutes are
accomplished.'';
(2) in subsection (b), by inserting ``, this title,
or any of the authorizing statutes'' after ``under this
section''; and
(3) by striking subsection (c).
SEC. 322. NON-WAIVER OF PRIVILEGES.
Part 1 of subtitle A of title XIII of the Housing and
Community Development Act of 1992 (12 U.S.C. 4511) is amended
by adding at the end the following new section:
``SEC. 1319H. PRIVILEGES NOT AFFECTED BY DISCLOSURE.
``(a) In General.--The submission by any person of any
information to the Agency for any purpose in the course of any
supervisory or regulatory process of the Agency shall not be
construed as waiving, destroying, or otherwise affecting any
privilege such person may claim with respect to such
information under Federal or State law as to any person or
entity other than the Agency.
``(b) Rule of Construction.--No provision of subsection (a)
may be construed as implying or establishing that--
``(1) any person waives any privilege applicable to
information that is submitted or transferred under any
circumstance to which subsection (a) does not apply; or
``(2) any person would waive any privilege applicable
to any information by submitting the information to the
Agency, but for this subsection.''.
SEC. 323. RISK-BASED CAPITAL REQUIREMENTS.
(a) In General.--Section 1361 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4611) is amended to read as
follows:
``SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED ENTITIES.
``(a) In General.--
``(1) Enterprises.--The Director shall, by
regulation, establish risk-based capital requirements
for the enterprises to ensure that the enterprises
operate in a safe and sound manner, maintaining
sufficient capital and reserves to support the risks
that arise in the operations and management of the
enterprises.
``(2) Federal home loan banks.--The Director shall
establish risk-based capital standards under section 6
of the Federal Home Loan Bank Act for the Federal home
loan banks.
``(b) Confidentiality of Information.--Any person that
receives any book, record, or information from the Director or
a regulated entity to enable the risk-based capital
requirements established under this section to be applied
shall--
``(1) maintain the confidentiality of the book,
record, or information in a manner that is generally
consistent with the level of confidentiality
established for the material by the Director or the
regulated entity; and
``(2) be exempt from section 552 of title 5, United
States Code, with respect to the book, record, or
information.
``(c) No Limitation.--Nothing in this section shall limit the
authority of the Director to require other reports or
undertakings, or take other action, in furtherance of the
responsibilities of the Director under this Act.''.
(b) Federal Home Loan Banks Risk-Based Capital.--Section
6(a)(3) of the Federal Home Loan Bank Act (12 U.S.C.
1426(a)(3)) is amended--
(1) by striking subparagraph (A) and inserting the
following new subparagraph:
``(A) Risk-based capital standards.--The
Director shall, by regulation, establish risk-
based capital standards for the Federal home
loan banks to ensure that the Federal home loan
banks operate in a safe and sound manner, with
sufficient permanent capital and reserves to
support the risks that arise in the operations
and management of the Federal home loans
banks.''; and
(2) in subparagraph (B), by striking ``(A)(ii)'' and
inserting ``(A)''.
SEC. 324. MINIMUM AND CRITICAL CAPITAL LEVELS.
(a) Minimum Capital Level.--Section 1362 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4612) is amended--
(1) in subsection (a), by striking ``In General'' and
inserting ``Enterprises''; and
(2) by striking subsection (b) and inserting the
following new subsections:
``(b) Federal Home Loan Banks.--For purposes of this
subtitle, the minimum capital level for each Federal home loan
bank shall be the minimum capital required to be maintained to
comply with the leverage requirement for the bank established
under section 6(a)(2) of the Federal Home Loan Bank Act (12
U.S.C. 1426(a)(2)).
``(c) Establishment of Revised Minimum Capital Levels.--
Notwithstanding subsections (a) and (b) and notwithstanding the
capital classifications of the regulated entities, the Director
may, by regulations issued under section 1319G, establish a
minimum capital level for the enterprises, for the Federal home
loan banks, or for both the enterprises and the banks, that is
higher than the level specified in subsection (a) for the
enterprises or the level specified in subsection (b) for the
Federal home loan banks, to the extent needed to ensure that
the regulated entities operate in a safe and sound manner.
``(d) Authority To Require Temporary Increase.--
Notwithstanding subsections (a) and (b) and any minimum capital
level established pursuant to subsection (c), the Director may,
by order, increase the minimum capital level for a regulated
entity on a temporary basis for such period as the Director may
provide if the Director--
``(1) makes any determination specified in
subparagraphs (A) through (C) of section 1364(c)(1);
``(2) determines that the regulated entity has
violated any of the prudential standards established
pursuant to section 1313A and, as a result of such
violation, determines that an unsafe and unsound
condition exists; or
``(3) determines that an unsafe and unsound condition
exists, except that a temporary increase in minimum
capital imposed on a regulated entity pursuant to this
paragraph shall not remain in place for a period of
more than 6 months unless the Director makes a renewed
determination of the existence of an unsafe and unsound
condition.
``(e) Authority To Establish Additional Capital and Reserve
Requirements for Particular Programs.--The Director may, at any
time by order or regulation, establish such capital or reserve
requirements with respect to any program or activity of a
regulated entity as the Director considers appropriate to
ensure that the regulated entity operates in a safe and sound
manner, with sufficient capital and reserves to support the
risks that arise in the operations and management of the
regulated entity.
``(f) Periodic Review.--The Director shall periodically
review the amount of core capital maintained by the
enterprises, the amount of capital retained by the Federal home
loan banks, and the minimum capital levels established for such
regulated entities pursuant to this section. The Director shall
rescind any temporary minimum capital level increase if the
Director determines that the circumstances or facts justifying
the temporary increase are no longer present.''.
(b) Critical Capital Levels.--
(1) In general.--Section 1363 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4613) is
amended--
(A) by striking ``For'' and inserting ``(a)
Enterprises.--For''; and
(B) by adding at the end the following new
subsection:
``(b) Federal Home Loan Banks.--
``(1) In general.--For purposes of this subtitle, the
critical capital level for each Federal home loan bank
shall be such amount of capital as the Director shall,
by regulation require.
``(2) Consideration of other critical capital
levels.--In establishing the critical capital level
under paragraph (1) for the Federal home loan banks,
the Director shall take due consideration of the
critical capital level established under subsection (a)
for the enterprises, with such modifications as the
Director determines to be appropriate to reflect the
difference in operations between the banks and the
enterprises.''.
(2) Regulations.--Not later than the expiration of
the 180-day period beginning on the effective date
under section 365, the Director of the Federal Housing
Finance Agency shall issue regulations pursuant to
section 1363(b) of the Housing and Community
Development Act of 1992 (as added by paragraph (1) of
this subsection) establishing the critical capital
level under such section.
SEC. 325. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND
LIABILITIES.
(a) In General.--Subtitle B of title XIII of the Housing and
Community Development Act of 1992 (12 U.S.C. 4611 et seq.) is
amended--
(1) by striking the subtitle designation and heading
and inserting the following:
``Subtitle B--Required Capital Levels for Regulated Entities, Special
Enforcement Powers, and Reviews of Assets and Liabilities'';
and
(2) by adding at the end the following new section:
``SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES.
``(a) In General.--The Director shall, by regulation,
establish standards by which the portfolio holdings, or rate of
growth of the portfolio holdings, of the enterprises will be
deemed to be consistent with the mission and the safe and sound
operations of the enterprises. In developing such standards,
the Director shall consider--
``(1) the size or growth of the mortgage market;
``(2) the need for the portfolio in maintaining
liquidity or stability of the secondary mortgage market
(including the market for the mortgage-backed
securities the enterprises issue);
``(3) the need for an inventory of mortgages in
connection with securitizations;
``(4) the need for the portfolio to directly support
the affordable housing mission of the enterprises;
``(5) the liquidity needs of the enterprises;
``(6) any potential risks posed to the enterprises by
the nature of the portfolio holdings; and
``(7) any additional factors that the Director
determines to be necessary to carry out the purpose
under the first sentence of this subsection to
establish standards for assessing whether the portfolio
holdings are consistent with the mission and safe and
sound operations of the enterprises.
``(b) Temporary Adjustments.--The Director may, by order,
make temporary adjustments to the established standards for an
enterprise or both enterprises, such as during times of
economic distress or market disruption.
``(c) Authority To Require Disposition or Acquisition.--The
Director shall monitor the portfolio of each enterprise.
Pursuant to subsection (a) and notwithstanding the capital
classifications of the enterprises, the Director may, by order,
require an enterprise, under such terms and conditions as the
Director determines to be appropriate, to dispose of or acquire
any asset, if the Director determines that such action is
consistent with the purposes of this Act or any of the
authorizing statutes.''.
(b) Regulations.--Not later than the expiration of the 180-
day period beginning on the effective date under section 365,
the Director of the Federal Housing Finance Agency shall issue
regulations pursuant to section 1369E(a) of the Housing and
Community Development Act of 1992 (as added by subsection (a)
of this section) establishing the portfolio holdings standards
under such section.
SEC. 326. CORPORATE GOVERNANCE OF ENTERPRISES.
The Housing and Community Development Act of 1992 is amended
by inserting before section 1323 (12 U.S.C. 4543) the following
new section:
``SEC. 1322A. CORPORATE GOVERNANCE OF ENTERPRISES.
``(a) Board of Directors.--
``(1) Independence.--A majority of seated members of
the board of directors of each enterprise shall be
independent board members, as defined under rules set
forth by the New York Stock Exchange, as such rules may
be amended from time to time.
``(2) Frequency of meetings.--To carry out its
obligations and duties under applicable laws, rules,
regulations, and guidelines, the board of directors of
an enterprise shall meet at least eight times a year
and not less than once a calendar quarter.
``(3) Non-management board member meetings.--The non-
management directors of an enterprise shall meet at
regularly scheduled executive sessions without
management participation.
``(4) Quorum; prohibition on proxies.--For the
transaction of business, a quorum of the board of
directors of an enterprise shall be at least a majority
of the seated board of directors and a board member may
not vote by proxy.
``(5) Information.--The management of an enterprise
shall provide a board member of the enterprise with
such adequate and appropriate information that a
reasonable board member would find important to the
fulfillment of his or her fiduciary duties and
obligations.
``(6) Annual review.--At least annually, the board of
directors of each enterprise shall review, with
appropriate professional assistance, the requirements
of laws, rules, regulations, and guidelines that are
applicable to its activities and duties.
``(b) Committees of Boards of Directors.--
``(1) Frequency of meetings.--Any committee of the
board of directors of an enterprise shall meet with
sufficient frequency to carry out its obligations and
duties under applicable laws, rules, regulations, and
guidelines.
``(2) Required committees.--Each enterprise shall
provide for the establishment, however styled, of the
following committees of the board of directors:
``(A) Audit committee.
``(B) Compensation committee.
``(C) Nominating/corporate governance
committee.
Such committees shall be in compliance with the
charter, independence, composition, expertise, duties,
responsibilities, and other requirements set forth
under section 10A(m) of the Securities Exchange Act of
1934 (15 U.S.C. 78j-1(m)), with respect to the audit
committee, and under rules issued by the New York Stock
Exchange, as such rules may be amended from time to
time.
``(c) Compensation.--
``(1) In general.--The compensation of board members,
executive officers, and employees of an enterprise--
``(A) shall not be in excess of that which is
reasonable and appropriate;
``(B) shall be commensurate with the duties
and responsibilities of such persons;
``(C) shall be consistent with the long-term
goals of the enterprise;
``(D) shall not focus solely on earnings
performance, but shall take into account risk
management, operational stability and legal and
regulatory compliance as well; and
``(E) shall be undertaken in a manner that
complies with applicable laws, rules, and
regulations.
``(2) Reimbursement.--If an enterprise is required to
prepare an accounting restatement due to the material
noncompliance of the enterprise, as a result of
misconduct, with any financial reporting requirement
under the securities laws, the chief executive officer
and chief financial officer of the enterprise shall
reimburse the enterprise as provided under section 304
of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7243).
This provision does not otherwise limit the authority
of the Agency to employ remedies available to it under
its enforcement authorities.
``(d) Code of Conduct and Ethics.--
``(1) In general.--An enterprise shall establish and
administer a written code of conduct and ethics that is
reasonably designed to assure the ability of board
members, executive officers, and employees of the
enterprise to discharge their duties and
responsibilities, on behalf of the enterprise, in an
objective and impartial manner, and that includes
standards required under section 406 of the Sarbanes-
Oxley Act of 2002 (15 U.S.C. 7264) and other applicable
laws, rules, and regulations.
``(2) Review.--Not less than once every three years,
an enterprise shall review the adequacy of its code of
conduct and ethics for consistency with practices
appropriate to the enterprise and make any appropriate
revisions to such code.
``(e) Conduct and Responsibilities of Board of Directors.--
The board of directors of an enterprise shall be responsible
for directing the conduct and affairs of the enterprise in
furtherance of the safe and sound operation of the enterprise
and shall remain reasonably informed of the condition,
activities, and operations of the enterprise. The
responsibilities of the board of directors shall include having
in place adequate policies and procedures to assure its
oversight of, among other matters, the following:
``(1) Corporate strategy, major plans of action, risk
policy, programs for legal and regulatory compliance
and corporate performance, including prudent plans for
growth and allocation of adequate resources to manage
operations risk.
``(2) Hiring and retention of qualified executive
officers and succession planning for such executive
officers.
``(3) Compensation programs of the enterprise.
``(4) Integrity of accounting and financial reporting
systems of the enterprise, including independent audits
and systems of internal control.
``(5) Process and adequacy of reporting, disclosures,
and communications to shareholders, investors, and
potential investors.
``(6) Extensions of credit to board members and
executive officers.
``(7) Responsiveness of executive officers in
providing accurate and timely reports to Federal
regulators and in addressing the supervisory concerns
of Federal regulators in a timely and appropriate
manner.
``(f) Prohibition of Extensions of Credit.--An enterprise may
not directly or indirectly, including through any subsidiary,
extend or maintain credit, arrange for the extension of credit,
or renew an extension of credit, in the form of a personal loan
to or for any board member or executive officer of the
enterprise, as provided by section 13(k) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m(k)).
``(g) Certification of Disclosures.--The chief executive
officer and the chief financial officer of an enterprise shall
review each quarterly report and annual report issued by the
enterprise and such reports shall include certifications by
such officers as required by section 302 of the Sarbanes-Oxley
Act of 2002 (15 U.S.C. 7241).
``(h) Change of Audit Partner.--An enterprise may not accept
audit services from an external auditing firm if the lead or
coordinating audit partner who has primary responsibility for
the external audit of the enterprise, or the external audit
partner who has responsibility for reviewing the external audit
has performed audit services for the enterprise in each of the
five previous fiscal years.
``(i) Compliance Program.--
``(1) Requirement.--Each enterprise shall establish
and maintain a compliance program that is reasonably
designed to assure that the enterprise complies with
applicable laws, rules, regulations, and internal
controls.
``(2) Compliance officer.--The compliance program of
an enterprise shall be headed by a compliance officer,
however styled, who reports directly to the chief
executive officer of the enterprise. The compliance
officer shall report regularly to the board of
directors or an appropriate committee of the board of
directors on compliance with and the adequacy of
current compliance policies and procedures of the
enterprise, and shall recommend any adjustments to such
policies and procedures that the compliance officer
considers necessary and appropriate.
``(j) Risk Management Program.--
``(1) Requirement.--Each enterprise shall establish
and maintain a risk management program that is
reasonably designed to manage the risks of the
operations of the enterprise.
``(2) Risk management officer.--The risk management
program of an enterprise shall be headed by a risk
management officer, however styled, who reports
directly to the chief executive officer of the
enterprise. The risk management officer shall report
regularly to the board of directors or an appropriate
committee of the board of directors on compliance with
and the adequacy of current risk management policies
and procedures of the enterprise, and shall recommend
any adjustments to such policies and procedures that
the risk management officer considers necessary and
appropriate.
``(k) Compliance With Other Laws.--
``(1) Deregistered or unregistered common stock.--If
an enterprise deregisters or has not registered its
common stock with the Securities and Exchange
Commission under the Securities Exchange Act of 1934,
the enterprise shall comply or continue to comply with
sections 10A(m) and 13(k) of the Securities Exchange
Act of 1934 (15 U.S.C. 78j-1(m), 78m(k)) and sections
302, 304, and 406 of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7241, 7243, 7264), subject to such requirements
as provided by subsection (l) of this section.
``(2) Registered common stock.--An enterprise that
has its common stock registered with the Securities and
Exchange Commission shall maintain such registered
status, unless it provides 60 days prior written notice
to the Director stating its intent to deregister and
its understanding that it will remain subject to the
requirements of the sections of the Securities Exchange
Act of 1934 and the Sarbanes-Oxley Act of 2002, subject
to such requirements as provided by subsection (l) of
this section.
``(l) Other Matters.--The Director may from time to time
establish standards, by regulation, order, or guideline,
regarding such other corporate governance matters of the
enterprises as the Director considers appropriate.
``(m) Modification of Standards.--In connection with
standards of Federal or State law (including the Revised Model
Corporation Act) or New York Stock Exchange rules that are made
applicable to an enterprise by section 1710.10 of the
Director's rules (12 CFR 1710.10) and by subsections (a), (b),
(g), (i), (j), and (k) of this section, the Director, in the
Director's sole discretion, may modify the standards contained
in this section or in part 1710 of the Director's rules (12 CFR
Part 1710) in accordance with section 553 of title 5, United
States Code, and upon written notice to the enterprise.''.
SEC. 327. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF 1934.
The Housing and Community Development Act of 1992 is amended
by adding after section 1322A, as added by the preceding
provisions of this title, the following new section:
``SEC. 1322B. REQUIRED REGISTRATION UNDER SECURITIES EXCHANGE ACT OF
1934.
``(a) In General.--Each regulated entity shall register at
least one class of the capital stock of such regulated entity,
and maintain such registration with the Securities and Exchange
Commission, under the Securities Exchange Act of 1934.
``(b) Enterprises.--Each enterprise shall comply with
sections 14 and 16 of the Securities Exchange Act of 1934.''.
SEC. 328. LIAISON WITH FINANCIAL INSTITUTIONS EXAMINATION COUNCIL.
Section 1007 of the Federal Financial Institutions
Examination Council Act of 1978 (12 U.S.C. 3306) is amended--
(1) in the section heading, by inserting after
``state'' the following: ``and federal housing finance
agency''; and
(2) by inserting after ``financial institutions'' the
following: ``, and one representative of the Federal
Housing Finance Agency,''.
SEC. 329. GUARANTEE FEE STUDY.
(a) In General.--The Director of the Federal Housing Finance
Agency, in consultation with the heads of the federal banking
agencies, shall, not later than 18 months after the date of the
enactment of this Act, submit to the Congress a study
concerning the pricing, transparency and reporting of the
Federal National Mortgage Association, the Federal Home Loan
Mortgage Corporation, and the Federal home loan banks with
regard to guarantee fees and concerning analogous practices,
transparency and reporting requirements (including advances
pricing practices by the Federal Home Loan Banks) of other
participants in the business of mortgage purchases and
securitization.
(b) Factors.--The study required by this section shall
examine various factors such as credit risk, counterparty risk
considerations, economic value considerations, and volume
considerations used by the regulated entities (as such term is
defined in section 1303 of the Housing and Community
Development Act of 1992) included in the study in setting the
amount of fees they charge.
(c) Contents of Report.--The report required under subsection
(a) shall identify and analyze--
(1) the factors used by each enterprise (as such term
is defined in section 1303 of the Housing and Community
Development Act of 1992) in determining the amount of
the guarantee fees it charges;
(2) the total revenue the enterprises earn from
guarantee fees;
(3) the total costs incurred by the enterprises for
providing guarantees;
(4) the average guarantee fee charged by the
enterprises;
(5) an analysis of how and why the guarantee fees
charged differ from such fees charged during the
previous year;
(6) a breakdown of the revenue and costs associated
with providing guarantees, based on product type and
risk classifications; and
(7) other relevant information on guarantee fees with
other participants in the mortgage and securitization
business.
(d) Protection of Information.--Nothing in this section may
be construed to require or authorize the Director of the
Federal Housing Finance Agency, in connection with the study
mandated by this section, to disclose information of the
enterprises or other organization that is confidential or
proprietary.
(e) Effective Date.--This section shall take effect on the
date of the enactment of this Act.
SEC. 330. CONFORMING AMENDMENTS.
(a) 1992 Act.--Part 1 of subtitle A of title XIII of the
Housing and Community Development Act of 1992 (12 U.S.C. 4511
et seq.), as amended by the preceding provisions of this title,
is further amended--
(1) by striking ``an enterprise'' each place such
term appears in such part (except in sections
1313(a)(2)(A), 1313A(b)(2)(B)(ii)(I), and 1316(b)(3))
and inserting ``a regulated entity'';
(2) by striking ``the enterprise'' each place such
term appears in such part (except in section
1316(b)(3)) and inserting ``the regulated entity'';
(3) by striking ``the enterprises'' each place such
term appears in such part (except in sections
1312(c)(2), and 1312(e)(2)) and inserting ``the
regulated entities'';
(4) by striking ``each enterprise'' each place such
term appears in such part and inserting ``each
regulated entity'';
(5) by striking ``Office'' each place such term
appears in such part (except in sections 1311(b)(2),
1312(b)(5), 1315(b), and 1316(a)(4), (g), and (h),
1317(c), and 1319A(a)) and inserting ``Agency'';
(6) in section 1315 (12 U.S.C. 4515)--
(A) in subsection (a)--
(i) in the subsection heading, by
striking ``Office Personnel'' and
inserting ``In General''; and
(ii) by striking ``The'' and
inserting ``Subject to subtitle C of
the Federal Housing Finance Reform Act
of 2008, the'';
(B) by striking subsections (d) and (f); and
(C) by redesignating subsection (e) as
subsection (d);
(7) in section 1319B (12 U.S.C. 4521), by striking
``Committee on Banking, Finance and Urban Affairs''
each place such term appears and inserting ``Committee
on Financial Services''; and
(8) in section 1319F (12 U.S.C. 4525), striking all
that follows ``United States Code'' and inserting ``,
the Agency shall be considered an agency responsible
for the regulation or supervision of financial
institutions.''.
(b) Amendments to Fannie Mae Charter Act.--The Federal
National Mortgage Association Charter Act (12 U.S.C. 1716 et
seq.) is amended--
(1) by striking ``Director of the Office of Federal
Housing Enterprise Oversight of the Department of
Housing and Urban Development'' each place such term
appears, and inserting ``Director of the Federal
Housing Finance Agency'', in--
(A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
(B) section 309(d)(3)(B) (12 U.S.C.
1723a(d)(3)(B)); and
(C) section 309(k)(1); and
(2) in section 309--
(A) in subsections (d)(3)(A) and (n)(1), by
striking ``Banking, Finance and Urban Affairs''
each place such term appears and inserting
``Financial Services''; and
(B) in subsection (m)--
(i) in paragraph (1), by striking
``Secretary'' the second place such
term appears and inserting
``Director'';
(ii) in paragraph (2), by striking
``Secretary'' the second place such
term appears and inserting
``Director''; and
(iii) by striking ``Secretary'' each
other place such term appears and
inserting ``Director of the Federal
Housing Finance Agency''; and
(C) in subsection (n), by striking
``Secretary'' each place such term appears and
inserting ``Director of the Federal Housing
Finance Agency''.
(c) Amendments to Freddie Mac Act.--The Federal Home Loan
Mortgage Corporation Act is amended--
(1) by striking ``Director of the Office of Federal
Housing Enterprise Oversight of the Department of
Housing and Urban Development'' each place such term
appears, and inserting ``Director of the Federal
Housing Finance Agency'', in--
(A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
(B) section 303(h)(2) (12 U.S.C. 1452(h)(2));
and
(C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
(2) in sections 303(h)(1) and 307(f)(1) (12 U.S.C.
1452(h)(1), 1456(f)(1)), by striking ``Banking, Finance
and Urban Affairs'' each place such term appears and
inserting ``Financial Services'';
(3) in section 306(i) (12 U.S.C. 1455(i))--
(A) by striking ``1316(c)'' and inserting
``306(c)''; and
(B) by striking ``section 106'' and inserting
``section 1316''; and
(4) in section 307 (12 U.S.C. 1456))--
(A) in subsection (e)--
(i) in paragraph (1), by striking
``Secretary'' the second place such
term appears and inserting
``Director'';
(ii) in paragraph (2), by striking
``Secretary'' the second place such
term appears and inserting
``Director''; and
(iii) by striking ``Secretary'' each
other place such term appears and
inserting ``Director of the Federal
Housing Finance Agency''; and
(B) in subsection (f), by striking
``Secretary'' each place such term appears and
inserting ``Director of the Federal Housing
Finance Agency''.
CHAPTER 2--IMPROVEMENT OF MISSION SUPERVISION
SEC. 331. TRANSFER OF PRODUCT APPROVAL AND HOUSING GOAL OVERSIGHT.
Part 2 of subtitle A of title XIII of the Housing and
Community Development Act of 1992 (12 U.S.C. 4541 et seq.) is
amended--
(1) by striking the designation and heading for the
part and inserting the following:
``PART 2--PRODUCT APPROVAL BY DIRECTOR, CORPORATE GOVERNANCE, AND
ESTABLISHMENT OF HOUSING GOALS'';
and
(2) by striking sections 1321 and 1322.
SEC. 332. REVIEW OF ENTERPRISE PRODUCTS.
(a) In General.--Part 2 of subtitle A of title XIII of the
Housing and Community Development Act of 1992 is amended by
inserting before section 1323 (12 U.S.C. 4543) the following
new section:
``SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS OF ENTERPRISES.
``(a) In General.--The Director shall require each enterprise
to obtain the approval of the Director for any product of the
enterprise before initially offering the product.
``(b) Standard for Approval.--In considering any request for
approval of a product pursuant to subsection (a), the Director
shall make a determination that--
``(1) in the case of a product of the Federal
National Mortgage Association, the Director determines
that the product is authorized under paragraph (2),
(3), (4), or (5) of section 302(b) or section 304 of
the Federal National Mortgage Association Charter Act,
(12 U.S.C. 1717(b), 1719);
``(2) in the case of a product of the Federal Home
Loan Mortgage Corporation, the Director determines that
the product is authorized under paragraph (1), (4), or
(5) of section 305(a) of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1454(a));
``(3) the product is in the public interest;
``(4) the product is consistent with the safety and
soundness of the enterprise or the mortgage finance
system; and
``(5) the product does not materially impair the
efficiency of the mortgage finance system.
``(c) Procedure for Approval.--
``(1) Submission of request.--An enterprise shall
submit to the Director a written request for approval
of a product that describes the product in such form as
prescribed by order or regulation of the Director.
``(2) Request for public comment.--Immediately upon
receipt of a request for approval of a product, as
required under paragraph (1), the Director shall
publish notice of such request and of the period for
public comment pursuant to paragraph (3) regarding the
product, and a description of the product proposed by
the request. The Director shall give interested parties
the opportunity to respond in writing to the proposed
product.
``(3) Public comment period.--During the 30-day
period beginning on the date of publication pursuant to
paragraph (2) of a request for approval of a product,
the Director shall receive public comments regarding
the proposed product.
``(4) Offering of product.--
``(A) In general.--Not later than 30 days
after the close of the public comment period
described in paragraph (3), the Director shall
approve or deny the product, specifying the
grounds for such decision in writing.
``(B) Failure to act.--If the Director fails
to act within the 30-day period described in
subparagraph (A), the enterprise may offer the
product.
``(d) Expedited Review.--
``(1) Determination and notice.--If an enterprise
determines that any new activity, service, undertaking,
or offering is not a product, as defined in subsection
(f), the enterprise shall provide written notice to the
Director prior to the commencement of such activity,
service, undertaking, or offering.
``(2) Director determination of applicable
procedure.--Immediately upon receipt of any notice
pursuant to paragraph (1), the Director shall make a
determination under paragraph (3).
``(3) Determination and treatment as product.--If the
Director determines that any new activity, service,
undertaking, or offering consists of, relates to, or
involves a product--
``(A) the Director shall notify the
enterprise of the determination;
``(B) the new activity, service, undertaking,
or offering described in the notice under
paragraph (1) shall be considered a product for
purposes of this section; and
``(C) the enterprise shall withdraw its
request or submit a written request for
approval of the product pursuant to subsection
(c).
``(e) Conditional Approval.--The Director may conditionally
approve the offering of any product by an enterprise, and may
establish terms, conditions, or limitations with respect to
such product with which the enterprise must comply in order to
offer such product.
``(f) Definition of Product.--For purposes of this section,
the term `product' does not include--
``(1) the automated loan underwriting system of an
enterprise in existence as of the date of the enactment
of the Federal Housing Finance Reform Act of 2008,
including any upgrade to the technology, operating
system, or software to operate the underwriting system;
or
``(2) any modification to the mortgage terms and
conditions or mortgage underwriting criteria relating
to the mortgages that are purchased or guaranteed by an
enterprise: Provided, That such modifications do not
alter the underlying transaction so as to include
services or financing, other than residential mortgage
financing, or create significant new exposure to risk
for the enterprise or the holder of the mortgage.
``(g) No Limitation.--Nothing in this section shall be deemed
to restrict--
``(1) the safety and soundness authority of the
Director over all new and existing products or
activities; or
``(2) the authority of the Director to review all new
and existing products or activities to determine that
such products or activities are consistent with the
statutory mission of the enterprise.''.
(b) Conforming Amendments.--
(1) Fannie mae.--Section 302(b)(6) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1717(b)(6)) is amended--
(A) by striking ``implement any new program''
and inserting ``initially offer any product'';
(B) by striking ``section 1303'' and
inserting ``section 1321(f)''; and
(C) by striking ``before obtaining the
approval of the Secretary under section 1322''
and inserting ``except in accordance with
section 1321''.
(2) Freddie mac.--Section 305(c) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1454(c)) is
amended--
(A) by striking ``implement any new program''
and inserting ``initially offer any product'';
(B) by striking ``section 1303'' and
inserting ``section 1321(f)''; and
(C) by striking ``before obtaining the
approval of the Secretary under section 1322''
and inserting ``except in accordance with
section 1321''.
(3) 1992 act.--Section 1303 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4502), as
amended by the preceding provisions of this title, is
further amended--
(A) by striking paragraph (17) (relating to
the definition of ``new program''); and
(B) by redesignating paragraphs (18) through
(23) as paragraphs (17) through (22),
respectively.
SEC. 333. CONFORMING LOAN LIMITS.
(a) Fannie Mae.--Section 302(b)(2) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is
amended--
(1) in the second sentence, by redesignating clause
(A) through (C) as clauses (i) through (iii),
respectively;
(2) in the third sentence, by striking ``clause (A)''
and inserting ``clause (i)'';
(3) in the 4th sentence, by striking ``the Resolution
Trust Corporation,'';
(4) by striking the 7th and 8th sentences and
inserting the following new sentences: ``For 2008, such
limitations shall not exceed $417,000 for a mortgage
secured by a single-family residence, $533,850 for a
mortgage secured by a 2-family residence, $645,300 for
a mortgage secured by a 3-family residence, and
$801,950 for a mortgage secured by a 4-family
residence, except that such maximum limitations shall
be adjusted effective January 1 of each year beginning
with 2009, subject to the limitations in this
paragraph. Each adjustment shall be made by adding to
or subtracting from each such amount (as it may have
been previously adjusted) a percentage thereof equal to
the percentage increase or decrease, during the most
recent 12-month or four-quarter period ending before
the time of determining such annual adjustment, in the
housing price index maintained by the Director of the
Federal Housing Finance Agency (pursuant to section
1322 of the Housing and Community Development Act of
1992 (12 U.S.C. 4541)).''.
(5) by inserting ``(A)'' after ``(2)''; and
(6) by adding at the end the following new
subparagraph:
``(B)(i) Notwithstanding subparagraph (A), for mortgages
originated on or after January 1, 2009, the limitation on the
maximum original principal obligation of a mortgage that may be
purchased by the corporation shall be the higher of--
``(I) the limitation determined under subparagraph
(A) for a residence of the applicable size; or
``(II) 125 percent of the area median price for a
residence of the applicable size, but in no case to
exceed 175 percent of the limitation determined under
subparagraph (A) for a residence of the applicable
size.
``(ii) The areas and area median prices used for purposes of
the determination under this subparagraph shall be the areas
and area median prices used by the Secretary of Housing and
Urban Development in determining the applicable limits under
section 203(b)(2) of the National Housing Act (12 U.S.C.
1709(b)(2)). A mortgage that is eligible for purchase by the
corporation at the time the mortgage is originated under this
subparagraph shall be eligible for such purchase for the
duration of the term of the mortgage.''.
(b) Freddie Mac.--Section 305(a)(2) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended--
(1) in the first sentence, by redesignating clause
(A) through (C) as clauses (i) through (iii),
respectively;
(2) in the second sentence, by striking ``clause
(A)'' and inserting ``clause (i)'';
(3) in the third sentence by striking ``the
Resolution Trust Corporation'';
(4) by striking the 6th and 7th sentence and
inserting the following new sentences: ``For 2008, such
limitations shall not exceed $417,000 for a mortgage
secured by a single-family residence, $533,850 for a
mortgage secured by a 2-family residence, $645,300 for
a mortgage secured by a 3-family residence, and
$801,950 for a mortgage secured by a 4-family
residence, except that such maximum limitations shall
be adjusted effective January 1 of each year beginning
with 2009, subject to the limitations in this
paragraph. Each adjustment shall be made by adding to
or subtracting from each such amount (as it may have
been previously adjusted) a percentage thereof equal to
the percentage increase or decrease, during the most
recent 12-month or four-quarter period ending before
the time of determining such annual adjustment, in the
housing price index maintained by the Director of the
Federal Housing Finance Agency (pursuant to section
1322 of the Housing and Community Development Act of
1992 (12 U.S.C. 4541)).'';
(5) by inserting ``(A)'' after ``(2)''; and
(6) by adding at the end the following new
subparagraph:
``(B)(i) Notwithstanding subparagraph (A), for mortgages
originated on or after January 1, 2009, the limitation on the
maximum original principal obligation of a mortgage that may be
purchased by the Corporation shall be the higher of--
``(I) the limitation determined under subparagraph
(A) for a residence of the applicable size; or
``(II) 125 percent of the area median price for a
residence of the applicable size, but in no case to
exceed 175 percent of the limitation determined under
subparagraph (A) for a residence of the applicable
size.
``(ii) The areas and area median prices used for purposes of
the determination under this subparagraph shall be the areas
and area median prices used by the Secretary of Housing and
Urban Development in determining the applicable limits under
section 203(b)(2) of the National Housing Act (12 U.S.C.
1709(b)(2)). A mortgage that is eligible for purchase by the
Corporation at the time the mortgage is originated under this
subparagraph shall be eligible for such purchase for the
duration of the term of the mortgage.''.
(c) Housing Price Index.--Subpart A of part 2 of subtitle A
of title XIII of the Housing and Community Development Act of
1992 (as amended by the preceding provisions of this title) is
amended by inserting after section 1321 (as added by the
preceding provisions of this title) the following new section:
``SEC. 1322. HOUSING PRICE INDEX.
``(a) In General.--The Director shall establish and maintain
a method of assessing the national average 1-family house price
for use for adjusting the conforming loan limitations of the
enterprises. In establishing such method, the Director shall
take into consideration the monthly survey of all major lenders
conducted by the Federal Housing Finance Agency to determine
the national average 1-family house price, the House Price
Index maintained by the Office of Federal Housing Enterprise
Oversight of the Department of Housing and Urban Development
before the effective date under section 365 of the Federal
Housing Finance Reform Act of 2008, any appropriate house price
indexes of the Bureau of the Census of the Department of
Commerce, and any other indexes or measures that the Director
considers appropriate.
``(b) GAO Audit.--
``(1) In general.--At such times as are required
under paragraph (2), the Comptroller General of the
United States shall conduct an audit of the methodology
established by the Director under subsection (a) to
determine whether the methodology established is an
accurate and appropriate means of measuring changes to
the national average 1-family house price.
``(2) Timing.--An audit referred to in paragraph (1)
shall be conducted and completed not later than the
expiration of the 180-day period that begins upon each
of the following dates:
``(A) Establishment.--The date upon which
such methodology is initially established under
subsection (a) in final form by the Director.
``(B) Modification or amendment.--Each date
upon which any modification or amendment to
such methodology is adopted in final form by
the Director.
``(3) Report.--Within 30 days of the completion of
any audit conducted under this subsection, the
Comptroller General shall submit a report detailing the
results and conclusions of the audit to the Director,
the Committee on Financial Services of the House of
Representatives, and the Committee on Banking, Housing,
and Urban Affairs of the Senate.''.
(d) Sense of Congress.--It is the sense of the Congress that
the securitization of mortgages by the Federal National
Mortgage Association and the Federal Home Loan Mortgage
Corporation plays an important role in providing liquidity to
the United States housing markets. Therefore, the Congress
encourages the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation to securitize mortgages
acquired under the increased conforming loan limits established
by the amendments made by this section, to the extent that such
securitizations can be effected in a timely and efficient
manner that does not impose additional costs for mortgages
originated, purchased, or securitized under the existing limits
or interfere with the goal of adding liquidity to the market.
(e) Effective Date.--The amendments made by this section
shall take effect on, and shall apply beginning on, January 1,
2009.
SEC. 334. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.
(a) In General.--The Housing and Community Development Act of
1992 is amended by striking section 1324 (12 U.S.C. 4544) and
inserting the following new section:
``SEC. 1324. ANNUAL HOUSING REPORT REGARDING REGULATED ENTITIES.
``(a) In General.--After reviewing and analyzing the reports
submitted under section 309(n) of the Federal National Mortgage
Association Charter Act, section 307(f) of the Federal Home
Loan Mortgage Corporation Act, and section 10(j)(11) of the
Federal Home Loan Bank Act (12 U.S.C. 1430(j)(11)), the
Director shall submit a report, not later than October 30 of
each year, to the Committee on Financial Services of the House
of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate, on the activities of each
regulated entity.
``(b) Contents.--The report shall--
``(1) discuss the extent to which--
``(A) each enterprise is achieving the annual
housing goals established under subpart B of
this part;
``(B) each enterprise is complying with
section 1337;
``(C) each Federal home loan bank is
complying with section 10(j) of the Federal
Home Loan Bank Act; and
``(D) each regulated entity is achieving the
purposes of the regulated entity established by
law;
``(2) aggregate and analyze relevant data on income
to assess the compliance by each enterprise with the
housing goals established under subpart B;
``(3) aggregate and analyze data on income, race, and
gender by census tract and other relevant
classifications, and compare such data with larger
demographic, housing, and economic trends;
``(4) examine actions that--
``(A) each enterprise has undertaken or could
undertake to promote and expand the annual
goals established under subpart B and the
purposes of the enterprise established by law;
and
``(B) each Federal home loan bank has taken
or could undertake to promote and expand the
community investment program and affordable
housing program of the bank established under
subsections (i) and (j) of section 10 of the
Federal Home Loan Bank Act;
``(5) examine the primary and secondary multifamily
housing mortgage markets and describe--
``(A) the availability and liquidity of
mortgage credit;
``(B) the status of efforts to provide
standard credit terms and underwriting
guidelines for multifamily housing and to
securitize such mortgage products; and
``(C) any factors inhibiting such
standardization and securitization;
``(6) examine actions each regulated entity has
undertaken and could undertake to promote and expand
opportunities for first-time homebuyers, including the
use of alternative credit scoring;
``(7) describe any actions taken under section
1325(5) with respect to originators found to violate
fair lending procedures;
``(8) discuss and analyze existing conditions and
trends, including conditions and trends relating to
pricing, in the housing markets and mortgage markets;
and
``(9) identify the extent to which each enterprise is
involved in mortgage purchases and secondary market
activities involving subprime loans (as identified in
accordance with the regulations issued pursuant to
section 334(b) of the Federal Housing Finance Reform
Act of 2008) and compare the characteristics of
subprime loans purchased and securitized by the
enterprises to other loans purchased and securitized by
the enterprises.
``(c) Data Collection and Reporting.--
``(1) In general.--To assist the Director in
analyzing the matters described in subsection (b) and
establishing the methodology described in section 1322,
the Director shall conduct, on a monthly basis, a
survey of mortgage markets in accordance with this
subsection.
``(2) Data points.--Each monthly survey conducted by
the Director under paragraph (1) shall collect data
on--
``(A) the characteristics of individual
mortgages that are eligible for purchase by the
enterprises and the characteristics of
individual mortgages that are not eligible for
purchase by the enterprises including, in both
cases, information concerning--
``(i) the price of the house that
secures the mortgage;
``(ii) the loan-to-value ratio of the
mortgage, which shall reflect any
secondary liens on the relevant
property;
``(iii) the terms of the mortgage;
``(iv) the creditworthiness of the
borrower or borrowers; and
``(v) whether the mortgage, in the
case of a conforming mortgage, was
purchased by an enterprise; and
``(B) such other matters as the Director
determines to be appropriate.
``(3) Public availability.--The Director shall make
any data collected by the Director in connection with
the conduct of a monthly survey available to the public
in a timely manner, provided that the Director may
modify the data released to the public to ensure that
the data is not released in an identifiable form.
``(4) Definition.--For purposes of this subsection,
the term `identifiable form' means any representation
of information that permits the identity of a borrower
to which the information relates to be reasonably
inferred by either direct or indirect means.''.
(b) Standards for Subprime Loans.--The Director shall, not
later than one year after the effective date under section 365,
by regulations issued under section 1316G of the Housing and
Community Development Act of 1992, establish standards by which
mortgages purchased and mortgages purchased and securitized
shall be characterized as subprime for the purpose of, and only
for the purpose of, complying with the reporting requirement
under section 1324(b)(9) of such Act.
SEC. 335. ANNUAL REPORTS BY REGULATED ENTITIES ON AFFORDABLE HOUSING
STOCK.
The Housing and Community Development Act of 1992 is amended
by inserting after section 1328 (12 U.S.C. 4548) the following
new section:
``SEC. 1329. ANNUAL REPORTS ON AFFORDABLE HOUSING STOCK.
``(a) In General.--To obtain information helpful in applying
the formula under section 1337(c)(2) for the affordable housing
program under such section and for other appropriate uses, the
regulated entities shall conduct, or provide for the conducting
of, a study on an annual basis to determine the levels of
affordable housing inventory, and the changes in such levels,
in communities throughout the United States.
``(b) Contents.--The annual study under this section shall
determine, for the United States, each State, and each
community within each State--
``(1) the level of affordable housing inventory,
including affordable rental dwelling units and
affordable homeownership dwelling units;
``(2) any changes to the level of such inventory
during the 12-month period of the study under this
section, including--
``(A) any additions to such inventory,
disaggregated by the category of such additions
(including new construction or housing
conversion);
``(B) any subtractions from such inventory,
disaggregated by the category of such
subtractions (including abandonment,
demolition, or upgrade to market-rate housing);
``(C) the number of new affordable dwelling
units placed in service; and
``(D) the number of affordable housing
dwelling units withdrawn from service;
``(3) the types of financing used to build any
dwelling units added to such inventory level and the
period during which such units are required to remain
affordable;
``(4) any excess demand for affordable housing,
including the number of households on rental housing
waiting lists and the tenure of the wait on such lists;
and
``(5) such other information as the Director may
require.
``(c) Report.--For each annual study conducted pursuant to
this section, the regulated entities shall submit to the
Congress, and make publicly available, a report setting forth
the findings of the study.
``(d) Regulations and Timing.--The Director shall, by
regulation, establish requirements for the studies and reports
under this section, including deadlines for the submission of
such annual reports and standards for determining affordable
housing.''.
SEC. 336. MORTGAGOR IDENTIFICATION REQUIREMENTS FOR MORTGAGES OF
REGULATED ENTITIES.
(a) In General.--Subpart A of part 2 of subtitle A of title
XIII of the Housing and Community Development Act of 1992 (12
U.S.C. 4541 et seq.), as amended by the preceding provisions of
this title, is further amended by adding at the end the
following new section:
``SEC. 1330. MORTGAGOR IDENTIFICATION REQUIREMENTS FOR MORTGAGES OF
REGULATED ENTITIES.
``(a) Limitation.--The Director shall by regulation establish
standards, and shall enforce compliance with such standards,
that--
``(1) prohibit the enterprises from the purchase,
service, holding, selling, lending on the security of,
or otherwise dealing with any mortgage on a one- to
four-family residence that will be used as the
principal residence of the mortgagor that does not meet
the requirements under subsection (b); and
``(2) prohibit the Federal home loan banks from
providing any advances to a member for use in
financing, and from accepting as collateral for any
advance to a member, any mortgage on a one- to four-
family residence that will be used as the principal
residence of the mortgagor that does not meet the
requirements under subsection (b).
``(b) Identification Requirements.--The requirements under
this subsection with respect to a mortgage are that the
mortgagor have, at the time of settlement on the mortgage, a
Social Security account number.''.
(b) Fannie Mae.--Section 304 of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1719) is amended by adding
at the end the following new subsection:
``(g) Prohibition Regarding Mortgagor Identification
Requirement.--Nothing in this Act may be construed to authorize
the corporation to purchase, service, hold, sell, lend on the
security of, or otherwise deal with any mortgage that the
corporation is prohibited from so dealing with under the
standards issued under section 1330 of the Housing and
Community Development Act of 1992 by the Director of the
Federal Housing Finance Agency.''.
(c) Freddie Mac.--Section 305 of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454) is amended by adding
at the end the following new subsection:
``(d) Prohibition Regarding Mortgagor Identification
Requirements.--Nothing in this Act may be construed to
authorize the Corporation to purchase, service, hold, sell,
lend on the security of, or otherwise deal with any mortgage
that the Corporation is prohibited from so dealing with under
the standards issued under section 1330 of the Housing and
Community Development Act of 1992 by the Director of the
Federal Housing Finance Agency.''.
(d) Federal Home Loan Banks.--Section 10(a) of the Federal
Home Loan Bank Act (12 U.S.C. 1430(a)) is amended--
(1) by redesignating paragraph (6) as paragraph (7);
and
(2) by inserting after paragraph (5) the following
new paragraph:
``(6) Prohibition regarding mortgagor identification
requirements.--Nothing in this Act may be construed to
authorize a Federal Home Loan Bank to provide any
advance to a member for use in financing, or accept as
collateral for an advance under this section, any
mortgage that a Bank is prohibited from so accepting
under the standards issued under section 1330 of the
Housing and Community Development Act of 1992 by the
Director of the Federal Housing Finance Agency.''.
SEC. 337. REVISION OF HOUSING GOALS.
(a) Housing Goals.--The Housing and Community Development Act
of 1992 is amended by striking sections 1331 through 1334 (12
U.S.C. 4561-4) and inserting the following new sections:
``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.
``(a) In General.--The Director shall establish, effective
for the first year that begins after the effective date under
section 365 of the Federal Housing Finance Reform Act of 2008
and each year thereafter, annual housing goals, with respect to
the mortgage purchases by the enterprises, as follows:
``(1) Single family housing goals.--Three single-
family housing goals under section 1332.
``(2) Multifamily special affordable housing goals.--
A multifamily special affordable housing goal under
section 1333.
``(b) Eliminating Interest Rate Disparities.--
``(1) In general.--Upon request by the Director, an
enterprise shall provide to the Director, in a form
determined by the Director, data the Director may
review to determine whether there exist disparities in
interest rates charged on mortgages to borrowers who
are minorities as compared with comparable mortgages to
borrowers of similar creditworthiness who are not
minorities.
``(2) Remedial actions upon preliminary finding.--
Upon a preliminary finding by the Director that a
pattern of disparities in interest rates with respect
to any lender or lenders exists pursuant to the data
provided by an enterprise in paragraph (1), the
Director shall--
``(A) refer the preliminary finding to the
appropriate regulatory or enforcement agency
for further review;
``(B) require the enterprise to submit
additional data with respect to any lender or
lenders, as appropriate and to the extent
practicable, to the Director who shall submit
any such additional data to the regulatory or
enforcement agency for appropriate action; and
``(C) require the enterprise to undertake
remedial actions, as appropriate, pursuant to
section 1325(5) (12 U.S.C. 4545(5)).
``(3) Annual report to congress.--The Director shall
submit to the Committee on Financial Services of the
House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate a report
describing the actions taken, and being taken, by the
Director to carry out this subsection. No such report
shall identify any lender or lenders who have not been
found to have engaged in discriminatory lending
practices pursuant to a final adjudication on the
record, and after opportunity for an administrative
hearing, in accordance with subchapter II of chapter 5
of title 5, United States Code.
``(4) Protection of identity of individuals.--In
carrying out this subsection, the Director shall ensure
that no property-related or financial information that
would enable a borrower to be identified shall be made
public.
``(c) Timing.--The Director shall establish an annual
deadline by which the Director shall establish the annual
housing goals under this subpart for each year, taking into
consideration the need for the enterprises to reasonably and
sufficiently plan their operations and activities in advance,
including operations and activities necessary to meet such
annual goals.
``SEC. 1332. SINGLE-FAMILY HOUSING GOALS.
``(a) In General.--The Director shall establish annual goals
for the purchase by each enterprise of conventional,
conforming, single-family, purchase money mortgages financing
owner-occupied and rental housing for each of the following
categories of families:
``(1) Low-income families.
``(2) Families that reside in low-income areas.
``(3) Very low-income families.
``(b) Refinance Subgoal.--
``(1) In general.--The Director shall establish a
separate subgoal within each goal under subsection
(a)(1) for the purchase by each enterprise of mortgages
for low-income families on single family housing given
to pay off or prepay an existing loan secured by the
same property. The Director shall, for each year,
determine whether each enterprise has complied with the
subgoal under this subsection in the same manner
provided under this section for determining compliance
with the housing goals.
``(2) Enforcement.--For purposes of section 1336, the
subgoal established under paragraph (1) of this
subsection shall be considered to be a housing goal
established under this section. Such subgoal shall not
be enforceable under any other provision of this title
(including subpart C of this part) other than section
1336 or under any provision of the Federal National
Mortgage Association Charter Act or the Federal Home
Loan Mortgage Corporation Act.
``(c) Determination of Compliance.--The Director shall
determine, for each year that the housing goals under this
section are in effect pursuant to section 1331(a), whether each
enterprise has complied with the single-family housing goals
established under this section for such year. An enterprise
shall be considered to be in compliance with such a goal for a
year only if, for each of the types of families described in
subsection (a), the percentage of the number of conventional,
conforming, single-family, owner-occupied or rental, as
applicable, purchase money mortgages purchased by each
enterprise in such year that serve such families, meets or
exceeds the target for the year for such type of family that is
established under subsection (d).
``(d) Annual Targets.--
``(1) In general.--Except as provided in paragraph
(2), for each of the types of families described in
subsection (a), the target under this subsection for a
year shall be the average percentage, for the three
years that most recently precede such year and for
which information under the Home Mortgage Disclosure
Act of 1975 is publicly available, of the number of
conventional, conforming, single-family, owner-occupied
or rental, as applicable, purchase money mortgages
originated in such year that serves such type of
family, as determined by the Director using the
information obtained and determined pursuant to
paragraphs (3) and (4).
``(2) Authority to increase targets.--
``(A) In general.--The Director may, for any
year, establish by regulation, for any or all
of the types of families described in
subsection (a), percentage targets that are
higher than the percentages for such year
determined pursuant to paragraph (1), to
reflect expected changes in market performance
related to such information under the Home
Mortgage Disclosure Act of 1975.
``(B) Factors.--In establishing any targets
pursuant to subparagraph (A), the Director
shall consider the following factors:
``(i) National housing needs.
``(ii) Economic, housing, and
demographic conditions.
``(iii) The performance and effort of
the enterprises toward achieving the
housing goals under this section in
previous years.
``(iv) The size of the conventional
mortgage market serving each of the
types of families described in
subsection (a) relative to the size of
the overall conventional mortgage
market.
``(v) The ability of the enterprise
to lead the industry in making mortgage
credit available.
``(vi) The need to maintain the sound
financial condition of the enterprises.
``(3) HMDA information.--The Director shall annually
obtain information submitted in compliance with the
Home Mortgage Disclosure Act of 1975 regarding
conventional, conforming, single-family, owner-occupied
or rental, as applicable, purchase money mortgages
originated and purchased for the previous year.
``(4) Conforming mortgages.--In determining whether a
mortgage is a conforming mortgage for purposes of this
paragraph, the Director shall consider the original
principal balance of the mortgage loan to be the
principal balance as reported in the information
referred to in paragraph (3), as rounded to the nearest
thousand dollars.
``(e) Notice of Determination and Enterprise Comment.--
``(1) Notice.--Within 30 days of making a
determination under subsection (c) regarding a
compliance of an enterprise for a year with a housing
goal established under this section and before any
public disclosure thereof, the Director shall provide
notice of the determination to the enterprise, which
shall include an analysis and comparison, by the
Director, of the performance of the enterprise for the
year and the targets for the year under subsection (d).
``(2) Comment period.--The Director shall provide
each enterprise an opportunity to comment on the
determination during the 30-day period beginning upon
receipt by the enterprise of the notice.
``(f) Use of Borrower Income.--In monitoring the performance
of each enterprise pursuant to the housing goals under this
section and evaluating such performance (for purposes of
section 1336), the Director shall consider a mortgagor's income
to be such income at the time of origination of the mortgage.
``(g) Consideration of Units in Single-Family Rental
Housing.--In establishing any goal under this subpart, the
Director may take into consideration the number of housing
units financed by any mortgage on single-family rental housing
purchased by an enterprise.
``SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.
``(a) Establishment.--
``(1) In general.--The Director shall establish, by
regulation, an annual goal for the purchase by each
enterprise of each of the following types of mortgages
on multifamily housing:
``(A) Mortgages that finance dwelling units
for low-income families.
``(B) Mortgages that finance dwelling units
for very low-income families.
``(C) Mortgages that finance dwelling units
assisted by the low-income housing tax credit
under section 42 of the Internal Revenue Code
of 1986.
``(2) Additional requirements for smaller projects.--
The Director shall establish, within the goal under
this section, additional requirements for the purchase
by each enterprise of mortgages described in paragraph
(1) for multifamily housing projects of a smaller or
limited size, which may be based on the number of
dwelling units in the project or the amount of the
mortgage, or both, and shall include multifamily
housing projects of such smaller sizes as are typical
among such projects that serve rural areas.
``(3) Factors.--In establishing the goal under this
section relating to mortgages on multifamily housing
for an enterprise for a year, the Director shall
consider--
``(A) national multifamily mortgage credit
needs;
``(B) the performance and effort of the
enterprise in making mortgage credit available
for multifamily housing in previous years;
``(C) the size of the multifamily mortgage
market;
``(D) the ability of the enterprise to lead
the industry in making mortgage credit
available, especially for underserved markets,
such as for small multifamily projects of 5 to
50 units, multifamily properties in need of
rehabilitation, and multifamily properties
located in rural areas; and
``(E) the need to maintain the sound
financial condition of the enterprise.
``(b) Units Financed by Housing Finance Agency Bonds.--The
Director shall give credit toward the achievement of the
multifamily special affordable housing goal under this section
(for purposes of section 1336) to dwelling units in multifamily
housing that otherwise qualifies under such goal and that is
financed by tax-exempt or taxable bonds issued by a State or
local housing finance agency, but only if such bonds--
``(1) are secured by a guarantee of the enterprise;
or
``(2) are not investment grade and are purchased by
the enterprise.
``(c) Use of Tenant Income or Rent.--The Director shall
monitor the performance of each enterprise in meeting the goals
established under this section and shall evaluate such
performance (for purposes of section 1336) based on--
``(1) the income of the prospective or actual tenants
of the property, where such data are available; or
``(2) where the data referred to in paragraph (1) are
not available, rent levels affordable to low-income and
very low-income families.
A rent level shall be considered to be affordable for purposes
of this subsection for an income category referred to in this
subsection if it does not exceed 30 percent of the maximum
income level of such income category, with appropriate
adjustments for unit size as measured by the number of
bedrooms.
``(d) Determination of Compliance.--The Director shall, for
each year that the housing goal under this section is in effect
pursuant to section 1331(a), determine whether each enterprise
has complied with such goal and the additional requirements
under subsection (a)(2).
``SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.
``(a) Authority.--An enterprise may petition the Director in
writing at any time during a year to reduce the level of any
goal for such year established pursuant to this subpart.
``(b) Standard for Reduction.--The Director may reduce the
level for a goal pursuant to such a petition only if--
``(1) market and economic conditions or the financial
condition of the enterprise require such action; or
``(2) efforts to meet the goal would result in the
constraint of liquidity, over-investment in certain
market segments, or other consequences contrary to the
intent of this subpart, or section 301(3) of the
Federal National Mortgage Association Charter Act (12
U.S.C. 1716(3)) or section 301(3) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1451 note), as
applicable.
``(c) Determination.--The Director shall make a determination
regarding any proposed reduction within 30 days of receipt of
the petition regarding the reduction. The Director may extend
such period for a single additional 15-day period, but only if
the Director requests additional information from the
enterprise. A denial by the Director to reduce the level of any
goal under this section may be appealed to the United States
District Court for the District of Columbia or the United
States district court in the jurisdiction in which the
headquarters of an enterprise is located.''.
(b) Conforming Amendments.--The Housing and Community
Development Act of 1992 is amended--
(1) in section 1335(a) (12 U.S.C. 4565(a)), in the
matter preceding paragraph (1), by striking ``low- and
moderate-income housing goal'' and all that follows
through ``section 1334'' and inserting ``housing goals
established under this subpart''; and
(2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by
striking ``sections 1332, 1333, and 1334,'' and
inserting ``this subpart''.
(c) Definitions.--Section 1303 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4502), as amended by the
preceding provisions of this title, is further amended--
(1) in paragraph (22) (relating to the definition of
``very low-income''), by striking ``60 percent'' each
place such term appears and inserting ``50 percent'';
(2) by redesignating paragraphs (19) through (22) as
paragraphs (23) through (26), respectively;
(3) by inserting after paragraph (18) the following
new paragraph:
``(22) Rural area.--The term `rural area' has the
meaning given such term in section 520 of the Housing
Act of 1949 (42 U.S.C. 1490), except that such term
includes micropolitan areas and tribal trust lands.''.
(4) by redesignating paragraphs (13) through (18) as
paragraphs (16) through (21), respectively;
(5) by inserting after paragraph (12) the following
new paragraph:
``(15) Low-income area.--The term `low income area'
means a census tract or block numbering area in which
the median income does not exceed 80 percent of the
median income for the area in which such census tract
or block numbering area is located, and, for the
purposes of section 1332(a)(2), shall include families
having incomes not greater than 100 percent of the area
median income who reside in minority census tracts.'';
(6) by redesignating paragraphs (11) and (12) as
paragraphs (13) and (14), respectively;
(7) by inserting after paragraph (10) the following
new paragraph:
``(12) Extremely low-income.--The term `extremely
low-income' means--
``(A) in the case of owner-occupied units,
income not in excess of 30 percent of the area
median income; and
``(B) in the case of rental units, income not
in excess of 30 percent of the area median
income, with adjustments for smaller and larger
families, as determined by the Secretary.'';
(8) by redesignating paragraphs (7) through (10) as
paragraphs (8) through (11), respectively; and
(9) by inserting after paragraph (6) the following
new paragraph:
``(7) Conforming mortgage.--The term `conforming
mortgage' means, with respect to an enterprise, a
conventional mortgage having an original principal
obligation that does not exceed the dollar limitation,
in effect at the time of such origination, under, as
applicable--
``(A) section 302(b)(2) of the Federal
National Mortgage Association Charter Act; or
``(B) section 305(a)(2) of the Federal Home
Loan Mortgage Corporation Act.''.
SEC. 338. DUTY TO SERVE UNDERSERVED MARKETS.
(a) Establishment and Evaluation of Performance.--Section
1335 of the Housing and Community Development Act of 1992 (12
U.S.C. 4565) is amended--
(1) in the section heading, by inserting ``DUTY TO
SERVE UNDERSERVED MARKETS AND'' before ``OTHER'';
(2) by striking subsection (b);
(3) in subsection (a)--
(A) in the matter preceding paragraph (1), by
inserting ``and to carry out the duty under
subsection (a) of this section'' before ``,
each enterprise shall'';
(B) in paragraph (3), by inserting ``and''
after the semicolon at the end;
(C) in paragraph (4), by striking ``; and''
and inserting a period;
(D) by striking paragraph (5); and
(E) by redesignating such subsection as
subsection (b);
(4) by inserting before subsection (b) (as so
redesignated by paragraph (3)(E) of this subsection)
the following new subsection:
``(a) Duty To Serve Underserved Markets.--
``(1) Duty.--In accordance with the purpose of the
enterprises under section 301(3) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1716) and section 301(b)(3) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1451 note) to
undertake activities relating to mortgages on housing
for very low-, low-, and moderate-income families
involving a reasonable economic return that may be less
than the return earned on other activities, each
enterprise shall have the duty to increase the
liquidity of mortgage investments and improve the
distribution of investment capital available for
mortgage financing for underserved markets.
``(2) Underserved markets.--To meet its duty under
paragraph (1), each enterprise shall comply with the
following requirements with respect to the following
underserved markets:
``(A) Manufactured housing.--The enterprise
shall lead the industry in developing loan
products and flexible underwriting guidelines
to facilitate a secondary market for mortgages
on manufactured homes for very low-, low-, and
moderate-income families.
``(B) Affordable housing preservation.--The
enterprise shall lead the industry in
developing loan products and flexible
underwriting guidelines to facilitate a
secondary market to preserve housing affordable
to very low-, low-, and moderate-income
families, including housing projects subsidized
under--
``(i) the project-based and tenant-
based rental assistance programs under
section 8 of the United States Housing
Act of 1937;
``(ii) the program under section 236
of the National Housing Act;
``(iii) the below-market interest
rate mortgage program under section
221(d)(4) of the National Housing Act;
``(iv) the supportive housing for the
elderly program under section 202 of
the Housing Act of 1959;
``(v) the supportive housing program
for persons with disabilities under
section 811 of the Cranston-Gonzalez
National Affordable Housing Act;
``(vi) the programs under title IV of
the McKinney-Vento Homeless Assistance
Act (42 U.S.C. 11361 et seq.), but only
permanent supportive housing projects
subsidized under such programs; and
``(vii) the rural rental housing
program under section 515 of the
Housing Act of 1949.
``(C) Rural and other underserved markets.--
The enterprise shall lead the industry in
developing loan products and flexible
underwriting guidelines to facilitate a
secondary market for mortgages on housing for
very low-, low-, and moderate-income families
in rural areas, and for mortgages for housing
for any other underserved market for very low-,
low-, and moderate-income families that the
Secretary identifies as lacking adequate credit
through conventional lending sources. Such
underserved markets may be identified by
borrower type, market segment, or geographic
area.''; and
(5) by adding at the end the following new
subsection:
``(c) Evaluation and Reporting of Compliance.--
``(1) In general.--Not later than 6 months after the
effective date under section 365 of the Federal Housing
Finance Reform Act of 2008, the Director shall
establish a manner for evaluating whether, and the
extent to which, the enterprises have complied with the
duty under subsection (a) to serve underserved markets
and for rating the extent of such compliance. Using
such method, the Director shall, for each year,
evaluate such compliance and rate the performance of
each enterprise as to extent of compliance. The
Director shall include such evaluation and rating for
each enterprise for a year in the report for that year
submitted pursuant to section 1319B(a).
``(2) Separate evaluations.--In determining whether
an enterprise has complied with the duty referred to in
paragraph (1), the Director shall separately evaluate
whether the enterprise has complied with such duty with
respect to each of the underserved markets identified
in subsection (a), taking into consideration--
``(A) the development of loan products and
more flexible underwriting guidelines;
``(B) the extent of outreach to qualified
loan sellers in each of such underserved
markets; and
``(C) the volume of loans purchased in each
of such underserved markets.
``(3) Manufactured housing market.--In determining
whether an enterprise has complied with the duty under
subparagraph (A) of subsection (a)(2), the Director may
consider loans secured by both real and personal
property.''.
(b) Enforcement.--Subsection (a) of section 1336 of the
Housing and Community Development Act of 1992 (12 U.S.C.
4566(a)) is amended--
(1) in paragraph (1), by inserting ``and with the
duty under section 1335(a) of each enterprise with
respect to underserved markets,'' before ``as provided
in this section''; and
(2) by adding at the end of such subsection, as
amended by the preceding provisions of this subtitle,
the following new paragraph:
``(4) Enforcement of duty to provide mortgage credit
to underserved markets.--The duty under section 1335(a)
of each enterprise to serve underserved markets (as
determined in accordance with section 1335(c)) shall be
enforceable under this section to the same extent and
under the same provisions that the housing goals
established under this subpart are enforceable. Such
duty shall not be enforceable under any other provision
of this title (including subpart C of this part) other
than this section or under any provision of the Federal
National Mortgage Association Charter Act or the
Federal Home Loan Mortgage Corporation Act.''.
SEC. 339. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.
(a) Additional Credit for Certain Mortgages.--Section 1336(a)
of the Housing and Community Development Act of 1992 (12 U.S.C.
4566(a)) is amended--
(1) in paragraph (2), by inserting ``, except as
provided in paragraph (4),'' after ``which''; and
(2) by adding at the end the following new paragraph:
``(5) Additional credit.--The Director shall assign
more than 125 percent credit toward achievement, under
this section, of the housing goals for mortgage
purchase activities of the enterprises that comply with
the requirements of such goals and support--
``(A) housing that meets energy efficiency or
other environmental standards that are
established by a Federal, State, or local
governmental authority with respect to the
geographic area where the housing is located or
are otherwise widely recognized; or
``(B) housing that includes a licensed
childcare center.
The availability of additional credit under this
paragraph shall not be used to increase any housing
goal, subgoal, or target established under this
subpart.''.
(b) Monitoring and Enforcement.--Section 1336 of the Housing
and Community Development Act of 1992 (12 U.S.C. 4566) is
amended--
(1) in subsection (b)--
(A) in the subsection heading, by inserting
``Preliminary'' before ``Determination'';
(B) by striking paragraph (1) and inserting
the following new paragraph:
``(1) Notice.--If the Director preliminarily
determines that an enterprise has failed, or that there
is a substantial probability that an enterprise will
fail, to meet any housing goal established under this
subpart, the Director shall provide written notice to
the enterprise of such a preliminary determination, the
reasons for such determination, and the information on
which the Director based the determination.'';
(C) in paragraph (2)--
(i) in subparagraph (A), by inserting
``finally'' before ``determining'';
(ii) by striking subparagraphs (B)
and (C) and inserting the following new
subparagraph:
``(B) Extension or shortening of period.--The
Director may--
``(i) extend the period under
subparagraph (A) for good cause for not
more than 30 additional days; and
``(ii) shorten the period under
subparagraph (A) for good cause.''; and
(iii) by redesignating subparagraph
(D) as subparagraph (C); and
(D) in paragraph (3)--
(i) in subparagraph (A), by striking
``determine'' and inserting ``issue a
final determination of'';
(ii) in subparagraph (B), by
inserting ``final'' before
``determinations''; and
(iii) in subparagraph (C)--
(I) by striking ``Committee
on Banking, Finance and Urban
Affairs'' and inserting
``Committee on Financial
Services''; and
(II) by inserting ``final''
before ``determination'' each
place such term appears; and
(2) in subsection (c)--
(A) by striking the subsection designation
and heading and all that follows through the
end of paragraph (1) and inserting the
following:
``(c) Cease and Desist Orders, Civil Money Penalties, and
Remedies Including Housing Plans.--
``(1) Requirement.--If the Director finds, pursuant
to subsection (b), that there is a substantial
probability that an enterprise will fail, or has
actually failed, to meet any housing goal under this
subpart and that the achievement of the housing goal
was or is feasible, the Director may require that the
enterprise submit a housing plan under this subsection.
If the Director makes such a finding and the enterprise
refuses to submit such a plan, submits an unacceptable
plan, fails to comply with the plan or the Director
finds that the enterprise has failed to meet any
housing goal under this subpart, in addition to
requiring an enterprise to submit a housing plan, the
Director may issue a cease and desist order in
accordance with section 1341, impose civil money
penalties in accordance with section 1345, or order
other remedies as set forth in paragraph (7) of this
subsection.'';
(B) in paragraph (2)--
(i) by striking ``Contents.--Each
housing plan'' and inserting ``Housing
plan.--If the Director requires a
housing plan under this section, such a
plan''; and
(ii) in subparagraph (B), by
inserting ``and changes in its
operations'' after ``improvements'';
(C) in paragraph (3)--
(i) by inserting ``comply with any
remedial action or'' before ``submit a
housing plan''; and
(ii) by striking ``under subsection
(b)(3) that a housing plan is
required'';
(D) in paragraph (4), by striking the first
two sentences and inserting the following:
``The Director shall review each submission by
an enterprise, including a housing plan
submitted under this subsection, and not later
than 30 days after submission, approve or
disapprove the plan or other action. The
Director may extend the period for approval or
disapproval for a single additional 30-day
period if the Director determines such
extension necessary.''; and
(E) by adding at the end the following new
paragraph:
``(7) Additional remedies for failure to meet
goals.--In addition to ordering a housing plan under
this section, issuing cease and desist orders under
section 1341, and ordering civil money penalties under
section 1345, the Director may seek other actions when
an enterprise fails to meet a goal, and exercise
appropriate enforcement authority available to the
Director under this Act to prohibit the enterprise from
initially offering any product (as such term is defined
in section 1321(f)) or engaging in any new activities,
services, undertakings, and offerings and to order the
enterprise to suspend products and activities,
services, undertakings, and offerings pending its
achievement of the goal.''.
SEC. 340. AFFORDABLE HOUSING FUND.
(a) In General.--The Housing and Community Development Act of
1992 is amended by striking sections 1337 and 1338 (12 U.S.C.
4562 note) and inserting the following new section:
``SEC. 1337. AFFORDABLE HOUSING FUND.
``(a) Establishment and Purpose.--The Director, in
consultation with the Secretary of Housing and Urban
Development, shall establish and manage an affordable housing
fund in accordance with this section, which shall be funded
with amounts allocated by the enterprises under subsection (b).
The purpose of the affordable housing fund shall be to provide
formula grants to grantees for use--
``(1) to increase homeownership for extremely low-and
very low-income families;
``(2) to increase investment in housing in low-income
areas, and areas designated as qualified census tracts
or an area of chronic economic distress pursuant to
section 143(j) of the Internal Revenue Code of 1986 (26
U.S.C. 143(j));
``(3) to increase and preserve the supply of rental
and owner-occupied housing for extremely low- and very
low-income families;
``(4) to increase investment in public infrastructure
development in connection with housing assisted under
this section; and
``(5) to leverage investments from other sources in
affordable housing and in public infrastructure
development in connection with housing assisted under
this section.
``(b) Allocation of Amounts by Enterprises.--
``(1) In general.--In accordance with regulations
issued by the Director under subsection (m) and subject
to paragraph (2) of this subsection and subsection
(i)(5), each enterprise shall allocate to the
affordable housing fund established under subsection
(a), in each of the years 2008 through 2012, an amount
equal to 1.2 basis points for each dollar of the
average total mortgage portfolio of the enterprise
during the preceding year.
``(2) Suspension of contributions.--The Director
shall temporarily suspend the allocation under
paragraph (1) by an enterprise to the affordable
housing fund upon a finding by the Director that such
allocations--
``(A) are contributing, or would contribute,
to the financial instability of the enterprise;
``(B) are causing, or would cause, the
enterprise to be classified as
undercapitalized; or
``(C) are preventing, or would prevent, the
enterprise from successfully completing a
capital restoration plan under section 1369C.
``(3) 5-year sunset and report.--
``(A) Sunset.--The enterprises shall not be
required to make allocations to the affordable
housing fund in 2012 or in any year thereafter.
``(B) Report on program continuance.--Not
later than June 30, 2011, the Director shall
submit to the Committee on Financial Services
of the House of Representatives and the
Committee on Banking, Housing, and Urban
Affairs of the Senate a report making
recommendations on whether the program under
this section, including the requirement for the
enterprises to make allocations to the
affordable housing fund, should be extended and
on any modifications for the program.
``(4) Prohibition of pass-through of cost of
allocations.--The Director shall, by regulation,
prohibit each enterprise from redirecting such costs,
through increased charges or fees, or decreased
premiums, or in any other manner, to the originators of
mortgages purchased or securitized by the enterprise.
``(c) Affordable Housing Needs Formulas.--
``(1) Allocation for 2008.--
``(A) Allocation percentages for louisiana
and mississippi.--For purposes of subsection
(d)(1)(A), the allocation percentages for 2008
for the grantees under this section for such
year shall be as follows:
``(i) The allocation percentage for
the Louisiana Housing Finance Agency
shall be 75 percent.
``(ii) The allocation percentage for
the Mississippi Development Authority
shall be 25 percent.
``(B) Use in disaster areas.--Affordable
housing grant amounts for 2008 shall be used
only as provided in subsection (g) only for
such eligible activities in areas that were
subject to a declaration by the President of a
major disaster or emergency under the Robert T.
Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5121 et seq.) in
connection with Hurricane Katrina or Rita of
2005.
``(2) Allocation formula for other years.--The
Secretary of Housing and Urban Development shall, by
regulation, establish a formula to allocate, among the
States (as such term is defined in section 1303) and
federally recognized Indian tribes, the amounts
provided by the enterprises in each year referred to
subsection (b)(1), other than 2008, to the affordable
housing fund established under this section. The
formula shall be based on the following factors, with
respect to each State and tribe:
``(A) The ratio of the population of the
State or federally recognized Indian tribe to
the aggregate population of all the States and
tribes.
``(B) The percentage of families in the State
or federally recognized Indian tribe that pay
more than 50 percent of their annual income for
housing costs.
``(C) The percentage of persons in the State
or federally recognized Indian tribe that are
members of extremely low- or very low-income
families.
``(D) The cost of developing or carrying out
rehabilitation of housing in the State or for
the federally recognized Indian tribe.
``(E) The percentage of families in the State
or federally recognized Indian tribe that live
in substandard housing.
``(F) The percentage of housing stock in the
State or for the federally recognized Indian
tribe that is extremely old housing.
``(G) Any other factors that the Secretary
determines to be appropriate.
``(3) Failure to establish.--If, in any year referred
to in subsection (b)(1), other than 2008, the
regulations establishing the formula required under
paragraph (2) of this subsection have not been issued
by the date that the Director determines the amounts
described in subsection (d)(1) to be available for
affordable housing fund grants in such year, for
purposes of such year any amounts for a State (as such
term is defined in section 1303 of this Act) that would
otherwise be determined under subsection (d) by
applying the formula established pursuant to paragraph
(2) of this subsection shall be determined instead by
applying, for such State, the percentage that is equal
to the percentage of the total amounts made available
for such year for allocation under subtitle A of title
II of the Cranston-Gonzalez National Affordable Housing
Act (42 U.S.C. 12741 et seq.) that are allocated in
such year, pursuant to such subtitle, to such State
(including any insular area or unit of general local
government, as such terms are defined in section 104 of
such Act (42 U.S.C. 12704), that is treated as a State
under section 1303 of this Act) and to participating
jurisdictions and other eligible entities within such
State.
``(d) Allocation of Formula Amount; Grants.--
``(1) Formula amount.--For each year referred to in
subsection (b)(1), the Director shall determine the
formula amount under this section for each grantee,
which shall be the amount determined for such grantee--
``(A) for 2008, by applying the allocation
percentages under subparagraph (A) of
subsection (c)(1) to the sum of the total
amounts allocated by the enterprises to the
affordable housing fund for such year, less any
amounts used pursuant to subsection (i)(1); and
``(B) for any other year referred to in
subsection (b)(1) (other than 2008), by
applying the formula established pursuant to
paragraph (2) of subsection (c) to the sum of
the total amounts allocated by the enterprises
to the affordable housing fund for such year
and any recaptured amounts available pursuant
to subsection (i)(4), less any amounts used
pursuant to subsection (i)(1).
``(2) Notice.--In each year referred to in subsection
(b)(1), not later than 60 days after the date that the
Director determines the amounts described in paragraph
(1) to be available for affordable housing fund grants
to grantees in such year, the Director shall cause to
be published in the Federal Register a notice that such
amounts shall be so available.
``(3) Grant amount.--
``(A) In general.--For each year referred to
in subsection (b)(1), the Director shall make a
grant from amounts in the affordable housing
fund to each grantee in an amount that
is, except as provided in subparagraph (B), equal to the
formula amount under this section for the grantee. A grantee
may designate a State housing finance agency, housing and
community development entity, tribally designated housing
entity (as such term is defined in section 4 of the Native
American Housing Assistance and Self-Determination Act of 1997
(25 U.S.C. 4103)) or other qualified instrumentality of the
grantee to receive such grant amounts.
``(B) Reduction for failure to obtain return
of misused funds.--If in any year a grantee
fails to obtain reimbursement or return of the
full amount required under subsection (j)(1)(B)
to be reimbursed or returned to the grantee
during such year--
``(i) except as provided in clause
(ii)--
``(I) the amount of the grant
for the grantee for the
succeeding year, as determined
pursuant to subparagraph (A),
shall be reduced by the amount
by which such amounts required
to be reimbursed or returned
exceed the amount actually
reimbursed or returned; and
``(II) the amount of the
grant for the succeeding year
for each other grantee whose
grant is not reduced pursuant
to subclause (I) shall be
increased by the amount
determined by applying the
formula established pursuant to
subsection (c)(2) to the total
amount of all reductions for
all grantees for such year
pursuant to subclause (I); or
``(ii) in any case in which such
failure to obtain reimbursement or
return occurs during a year immediately
preceding a year in which grants under
this subsection will not be made, the
grantee shall pay to the Director for
reallocation among the other grantees
an amount equal to the amount of the
reduction for the grantee that would
otherwise apply under clause (i)(I).
``(e) Grantee Allocation Plans.--
``(1) In general.--For each year that a grantee
receives affordable housing fund grant amounts, the
grantee shall establish an allocation plan in
accordance with this subsection, which shall be a plan
for the distribution of such grant amounts of the
grantee for such year that--
``(A) is based on priority housing needs, as
determined by the grantee in accordance with
the regulations established under subsection
(m)(2)(C);
``(B) complies with subsection (f); and
``(C) includes performance goals, benchmarks,
and timetables for the grantee for the
production, preservation, and rehabilitation of
affordable rental and homeownership housing
with such grant amounts that comply with the
requirements established by the Director
pursuant to subsection (m)(2)(F).
``(2) Establishment.--In establishing an allocation
plan, a grantee shall notify the public of the
establishment of the plan, provide an opportunity for
public comments regarding the plan, consider any public
comments received, and make the completed plan
available to the public.
``(3) Contents.--An allocation plan of a grantee
shall set forth the requirements for eligible
recipients under subsection (h) to apply to the grantee
to receive assistance from affordable housing fund
grant amounts, including a requirement that each such
application include--
``(A) a description of the eligible
activities to be conducted using such
assistance; and
``(B) a certification by the eligible
recipient applying for such assistance that any
housing units assisted with such assistance
will comply with the requirements under this
section.
``(f) Selection of Activities Funded Using Affordable Housing
Fund Grant Amounts.--Affordable housing fund grant amounts of a
grantee may be used, or committed for use, only for activities
that--
``(1) are eligible under subsection (g) for such use;
``(2) comply with the applicable allocation plan
under subsection (e) of the grantee; and
``(3) are selected for funding by the grantee in
accordance with the process and criteria for such
selection established pursuant to subsection (m)(2)(C).
``(g) Eligible Activities.--Affordable housing fund grant
amounts of a grantee shall be eligible for use, or for
commitment for use, only for assistance for--
``(1) the production, preservation, and
rehabilitation of rental housing, including housing
under the programs identified in section 1335(a)(2)(B),
except that such grant amounts may be used for the
benefit only of extremely low- and very low-income
families;
``(2) the production, preservation, and
rehabilitation of housing for homeownership, including
such forms as downpayment assistance, closing cost
assistance, and assistance for interest-rate buy-downs,
that--
``(A) is available for purchase only for use
as a principal residence by families that
qualify both as--
``(i) extremely low- and very-low
income families at the times described
in subparagraphs (A) through (C) of
section 215(b)(2) of the Cranston-
Gonzalez National Affordable Housing
Act (42 U.S.C. 12745(b)(2)); and
``(ii) first-time homebuyers, as such
term is defined in section 104 of the
Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 12704), except
that any reference in such section to
assistance under title II of such Act
shall for purposes of this section be
considered to refer to assistance from
affordable housing fund grant amounts;
``(B) has an initial purchase price that
meets the requirements of section 215(b)(1) of
the Cranston-Gonzalez National Affordable
Housing Act;
``(C) is subject to the same resale
restrictions established under section
215(b)(3) of the Cranston-Gonzalez National
Affordable Housing Act and applicable to the
participating jurisdiction that is the State in
which such housing is located; and
``(D) is made available for purchase only by,
or in the case of assistance under this
paragraph, is made available only to,
homebuyers who have, before purchase--
``(i) completed a program of
counseling with respect to the
responsibilities and financial
management involved in homeownership
that is approved by the Director;
except that the Director may, at the
request of a State, waive the
requirements of this subparagraph with
respect to a geographic area or areas
within the State if: (I) the travel
time or distance involved in providing
counseling with respect to such area or
areas, as otherwise required under this
subparagraph, on an in-person basis is
excessive or the cost of such travel is
prohibitive; and (II) the State
provides alternative forms of
counseling for such area or areas,
which may include interactive telephone
counseling, on-line counseling,
interactive video counseling, and
interactive home study counseling and a
program of financial literacy and
education to promote an understanding
of consumer, economic, and personal
finance issues and concepts, including
saving for retirement, managing credit,
long-term care, and estate planning and
education on predatory lending,
identity theft, and financial abuse
schemes relating to homeownership that
is approved by the Director, except
that entities providing such counseling
shall not discriminate against any
particular form of housing; and
``(ii) demonstrated, in accordance
with regulations as the Director shall
issue setting forth requirements for
sufficient evidence, that they are
lawfully present in the United States;
and
``(3) public infrastructure development activities in
connection with housing activities funded under
paragraph (1) or (2).
``(h) Eligible Recipients.--Affordable housing fund grant
amounts of a grantee may be provided only to a recipient that
is an organization, agency, or other entity (including a for-
profit entity, a nonprofit entity, and a faith-based
organization) that--
``(1) has demonstrated experience and capacity to
conduct an eligible activity under (g), as evidenced by
its ability to--
``(A) own, construct or rehabilitate, manage,
and operate an affordable multifamily rental
housing development;
``(B) design, construct or rehabilitate, and
market affordable housing for homeownership;
``(C) provide forms of assistance, such as
downpayments, closing costs, or interest-rate
buy-downs, for purchasers; or
``(D) construct related public infrastructure
development activities in connection with such
housing activities;
``(2) demonstrates the ability and financial capacity
to undertake, comply, and manage the eligible activity;
``(3) demonstrates its familiarly with the
requirements of any other Federal, State or local
housing program that will be used in conjunction with
such grant amounts to ensure compliance with all
applicable requirements and regulations of such
programs; and
``(4) makes such assurances to the grantee as the
Director shall, by regulation, require to ensure that
the recipient will comply with the requirements of this
section during the entire period that begins upon
selection of the recipient to receive such grant
amounts and ending upon the conclusion of all
activities under subsection (g) that are engaged in by
the recipient and funded with such grant amounts.
``(i) Limitations on Use.--
``(1) Required amount for refcorp.--Of the aggregate
amount allocated pursuant to subsection (b) in each
year to the affordable housing fund, 25 percent shall
be used as provided in section 21B(f)(2)(E) of the
Federal Home Loan Bank Act (12 U.S.C. 1441b(f)(2)(E)).
``(2) Required amount for homeownership activities.--
Of the aggregate amount of affordable housing fund
grant amounts provided in each year to a grantee, not
less than 10 percent shall be used for activities under
paragraph (2) of subsection (g).
``(3) Maximum amount for public infrastructure
development activities in connection with affordable
housing activities.--Of the aggregate amount of
affordable housing fund grant amounts provided in each
year to a grantee, not more than 12.5 percent may be
used for activities under paragraph (3) of subsection
(g).
``(4) Deadline for commitment or use.--Any affordable
housing fund grant amounts of a grantee shall be used
or committed for use within two years of the date of
that such grant amounts are made available to the
grantee. The Director shall recapture into the
affordable housing fund any such amounts not so used or
committed for use and allocate such amounts under
subsection (d)(1) in the first year after such
recapture.
``(5) Use of returns.--The Director shall, by
regulation provide that any return on a loan or other
investment of any affordable housing fund grant amounts
of a grantee shall be treated, for purposes of
availability to and use by the grantee, as affordable
housing fund grant amounts.
``(6) Prohibited uses.--The Director shall--
``(A) by regulation, set forth prohibited
uses of affordable housing fund grant amounts,
which shall include use for--
``(i) political activities;
``(ii) advocacy;
``(iii) lobbying, whether directly or
through other parties;
``(iv) counseling services;
``(v) travel expenses; and
``(vi) preparing or providing advice
on tax returns;
``(B) by regulation, provide that, except as
provided in subparagraph (C), affordable
housing fund grant amounts of a grantee may not
be used for administrative, outreach, or other
costs of--
``(i) the grantee; or
``(ii) any recipient of such grant
amounts; and
``(C) by regulation, limit the amount of any
affordable housing fund grant amounts of the
grantee for a year that may be used for
administrative costs of the grantee of carrying
out the program required under this section to
a percentage of such grant amounts of the
grantee for such year, which may not exceed 10
percent.
``(7) Prohibition of consideration of use for meeting
housing goals or duty to serve.--In determining
compliance with the housing goals under this subpart
and the duty to serve underserved markets under section
1335, the Director may not consider any affordable
housing fund grant amounts used under this section for
eligible activities under subsection (g). The Director
shall give credit toward the achievement of such
housing goals and such duty to serve underserved
markets to purchases by the enterprises of mortgages
for housing that receives funding from affordable
housing fund grant amounts, but only to the extent that
such purchases by the enterprises are funded other than
with such grant amounts.
``(8) Acceptable identification requirement for
occupancy or assistance.--
``(A) In general.--Any assistance provided
with any affordable housing grant amounts may
not be made available to, or on behalf of, any
individual or household unless the individual
provides, or, in the case of a household, all
adult members of the household provide,
personal identification in one of the following
forms:
``(i) Social security card with photo
identification card or real id act
identification.--
``(I) A social security card
accompanied by a photo
identification card issued by
the Federal Government or a
State Government; or
``(II) A driver's license or
identification card issued by a
State in the case of a State
that is in compliance with
title II of the REAL ID Act of
2005 (title II of division B of
Public Law 109-13; 49 U.S.C.
30301 note).
``(ii) Passport.--A passport issued
by the United States or a foreign
government.
``(iii) USCIS photo identification
card.--A photo identification card
issued by the Secretary of Homeland
Security (acting through the Director
of the United States Citizenship and
Immigration Services).
``(B) Regulations.--The Director shall, by
regulation, require that each grantee and
recipient take such actions as the Director
considers necessary to ensure compliance with
the requirements of subparagraph (A).
``(j) Accountability of Recipients and Grantees.--
``(1) Recipients.--
``(A) Tracking of funds.--The Director
shall--
``(i) require each grantee to develop
and maintain a system to ensure that
each recipient of assistance from
affordable housing fund grant amounts
of the grantee uses such amounts in
accordance with this section, the
regulations issued under this section,
and any requirements or conditions
under which such amounts were provided;
and
``(ii) establish minimum requirements
for agreements, between the grantee and
recipients, regarding assistance from
the affordable housing fund grant
amounts of the grantee, which shall
include--
``(I) appropriate continuing
financial and project
reporting, record retention,
and audit requirements for the
duration of the grant to the
recipient to ensure compliance
with the limitations and
requirements of this section
and the regulations under this
section; and
``(II) any other requirements
that the Director determines
are necessary to ensure
appropriate grant
administration and compliance.
``(B) Misuse of funds.--
``(i) Reimbursement requirement.--If
any recipient of assistance from
affordable housing fund grant amounts
of a grantee is determined, in
accordance with clause (ii), to have
used any such amounts in a manner that
is materially in violation of this
section, the regulations issued under
this section, or any requirements or
conditions under which such amounts
were provided, the grantee shall
require that, within 12 months after
the determination of such misuse, the
recipient shall reimburse the grantee
for such misused amounts and return to
the grantee any amounts from the
affordable housing fund grant amounts
of the grantee that remain unused or
uncommitted for use. The remedies under
this clause are in addition to any
other remedies that may be available
under law.
``(ii) Determination.--A
determination is made in accordance
with this clause if the determination
is--
``(I) made by the Director;
or
``(II)(aa) made by the
grantee;
``(bb) the grantee provides
notification of the
determination to the Director
for review, in the discretion
of the Director, of the
determination; and
``(cc) the Director does not
subsequently reverse the
determination.
``(2) Grantees.--
``(A) Report.--
``(i) In general.--The Director shall
require each grantee receiving
affordable housing fund grant amounts
for a year to submit a report, for such
year, to the Director that--
``(I) describes the
activities funded under this
section during such year with
the affordable housing fund
grant amounts of the grantee;
and
``(II) the manner in which
the grantee complied during
such year with the allocation
plan established pursuant to
subsection (e) for the grantee.
``(ii) Public availability.--The
Director shall make such reports
pursuant to this subparagraph publicly
available.
``(B) Misuse of funds.--If the Director
determines, after reasonable notice and
opportunity for hearing, that a grantee has
failed to comply substantially with any
provision of this section and until the
Director is satisfied that there is no longer
any such failure to comply, the Director
shall--
``(i) reduce the amount of assistance
under this section to the grantee by an
amount equal to the amount affordable
housing fund grant amounts which were
not used in accordance with this
section;
``(ii) require the grantee to repay
the Director an amount equal to the
amount of the amount affordable housing
fund grant amounts which were not used
in accordance with this section;
``(iii) limit the availability of
assistance under this section to the
grantee to activities or recipients not
affected by such failure to comply; or
``(iv) terminate any assistance under
this section to the grantee.
``(k) Capital Requirements.--The utilization or commitment of
amounts from the affordable housing fund shall not be subject
to the risk-based capital requirements established pursuant to
section 1361(a).
``(l) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Affordable housing fund grant amounts.--The
term `affordable housing fund grant amounts' means
amounts from the affordable housing fund established
under subsection (a) that are provided to a grantee
pursuant to subsection (d)(3).
``(2) Grantee.--The term `grantee' means--
``(A) with respect to 2008, the Louisiana
Housing Finance Agency and the Mississippi
Development Authority; and
``(B) with respect to the years referred to
in subsection (b)(1), other than 2008, each
State (as such term is defined in section 1303)
and each federally recognized Indian tribe.
``(3) Recipient.--The term `recipient' means an
entity meeting the requirements under subsection (h)
that receives assistance from a grantee from affordable
housing fund grant amounts of the grantee.
``(4) Total mortgage portfolio.--The term `total
mortgage portfolio' means, with respect to a year, the
sum, for all mortgages outstanding during that year in
any form, including whole loans, mortgage-backed
securities, participation certificates, or other
structured securities backed by mortgages, of the
dollar amount of the unpaid outstanding principal
balances under such mortgages. Such term includes all
such mortgages or securitized obligations, whether
retained in portfolio, or sold in any form. The
Director is authorized to promulgate rules further
defining such term as necessary to implement this
section and to address market developments.
``(5) Very-low income family.--The term `very low-
income family' has the meaning given such term in
section 1303, except that such term includes any family
that resides in a rural area that has an income that
does not exceed the poverty line (as such term is
defined in section 673(2) of the Omnibus Budget
Reconciliation Act of 1981 (42 U.S.C. 9902(2)),
including any revision required by such section)
applicable to a family of the size involved.
``(m) Regulations.--
``(1) In general.--The Director, in consultation with
the Secretary of Housing and Urban Development, shall
issue regulations to carry out this section.
``(2) Required contents.--The regulations issued
under this subsection shall include--
``(A) a requirement that the Director ensure
that the program of each grantee for use of
affordable housing fund grant amounts of the
grantee is audited not less than annually to
ensure compliance with this section;
``(B) authority for the Director to audit,
provide for an audit, or otherwise verify a
grantee's activities, to ensure compliance with
this section;
``(C) requirements for a process for
application to, and selection by, each grantee
for activities meeting the grantee's priority
housing needs to be funded with affordable
housing fund grant amounts of the grantee,
which shall provide for priority in funding to
be based upon--
``(i) greatest impact;
``(ii) geographic diversity;
``(iii) ability to obligate amounts
and undertake activities so funded in a
timely manner;
``(iv) in the case of rental housing
projects under subsection (g)(1), the
extent to which rents for units in the
project funded are affordable,
especially for extremely low-income
families;
``(v) in the case of rental housing
projects under subsection (g)(1), the
extent of the duration for which such
rents will remain affordable;
``(vi) the extent to which the
application makes use of other funding
sources; and
``(vii) the merits of an applicant's
proposed eligible activity;
``(D) requirements to ensure that amounts
provided to a grantee from the affordable
housing fund that are used for rental housing
under subsection (g)(1) are used only for the
benefit of extremely low- and very-low income
families;
``(E) limitations on public infrastructure
development activities that are eligible
pursuant to subsection (g)(3) for funding with
affordable housing fund grant amounts and
requirements for the connection between such
activities and housing activities funded under
paragraph (1) or (2) of subsection (g); and
``(F) requirements and standards for
establishment, by grantees (including the
grantees for 2008 pursuant to subsection
(l)(2)(A)), of performance goals, benchmarks,
and timetables for the production,
preservation, and rehabilitation of affordable
rental and homeownership housing with
affordable housing fund grant amounts.
``(n) Enforcement of Requirements on Enterprise.--Compliance
by the enterprises with the requirements under this section
shall be enforceable under subpart C. Any reference in such
subpart to this part or to an order, rule, or regulation under
this part specifically includes this section and any order,
rule, or regulation under this section.
``(o) Affordable Housing Trust Fund.--If, after the enactment
of the Federal Housing Finance Reform Act of 2008, in any year,
there is enacted any provision of Federal law establishing an
affordable housing trust fund other than under this title for
use only for grants to provide affordable rental housing and
affordable homeownership opportunities, and the subsequent year
is a year referred to in subsection (b)(1), the Director shall
in such subsequent year and any remaining years referred to in
subsection (b)(1) transfer to such affordable housing trust
fund the aggregate amount allocated pursuant to subsection (b)
in such year to the affordable housing fund under this section,
less any amounts used pursuant to subsection (i)(1). For such
subsequent and remaining years, the provisions of subsections
(c) and (d) shall not apply. Notwithstanding any other
provision of law, assistance provided using amounts transferred
to such affordable housing trust fund pursuant to this
subsection may not be used for any of the activities specified
in clauses (i) through (vi) of subsection (i)(6). Nothing in
this subsection shall be construed to alter the terms and
conditions of the affordable housing fund under this section or
to extend the life of such fund.
``(p) Funding Accountability and Transparency.--Any grant
under this section to a grantee from the affordable housing
fund established under subsection (a), any assistance provided
to a recipient by a grantee from affordable housing fund grant
amounts, and any grant, award, or other assistance from an
affordable housing trust fund referred to in subsection (o)
shall be considered a Federal award for purposes of the Federal
Funding Accountability and Transparency Act of 2006 (31 U.S.C.
6101 note). Upon the request of the Director of the Office of
Management and Budget, the Director of the Federal Housing
Finance Agency shall obtain and provide such information
regarding any such grants, assistance, and awards as the
Director of the Office of Management and Budget considers
necessary to comply with the requirements of such Act, as
applicable pursuant to the preceding sentence.''.
(b) Timely Establishment of Affordable Housing Needs
Formula.--
(1) In general.--The Secretary of Housing and Urban
Development shall, not later than the effective date
under section 365 of this title, issue the regulations
establishing the affordable housing needs formulas in
accordance with the provisions of section 1337(c)(2) of
the Housing and Community Development Act of 1992, as
such section is amended by subsection (a) of this
section.
(2) Effective date.--This subsection shall take
effect on the date of the enactment of this Act.
(c) REFCORP Payments.--Section 21B(f)(2) of the Federal Home
Loan Bank Act (12 U.S.C. 1441b(f)(2)) is amended--
(1) in subparagraph (E), by striking ``and (D)'' and
inserting ``(D), and (E)'';
(2) by redesignating subparagraph (E) as subparagraph
(F); and
(3) by inserting after subparagraph (D) the following
new subparagraph:
``(E) Payments by fannie mae and freddie
mac.--To the extent that the amounts available
pursuant to subparagraphs (A), (B), (C), and
(D) are insufficient to cover the amount of
interest payments, each enterprise (as such
term is defined in section 1303 of the Housing
and Community Development Act of 1992 (42
U.S.C. 4502)) shall transfer to the Funding
Corporation in each calendar year the amounts
allocated for use under this subparagraph
pursuant to section 1337(i)(1) of such Act.''.
(d) GAO Report.--The Comptroller General shall conduct a
study to determine the effects that the affordable housing fund
established under section 1337 of the Housing and Community
Development Act of 1992, as added by the amendment made by
subsection (a) of this section, will have on the availability
and affordability of credit for homebuyers, including the
effects on such credit of the requirement under such section
1337(b) that the Federal National Mortgage Association and
Federal Home Loan Mortgage Corporation make allocations of
amounts to such fund based on the average total mortgage
portfolios, and the extent to which the costs of such
allocation requirement will be borne by such entities or will
be passed on to homebuyers. Not later than the expiration of
the 12-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 and conclusions of such
study. This subsection shall take effect on the date of the
enactment of this Act.
SEC. 341. CONSISTENCY WITH MISSION.
Subpart B of part 2 of subtitle A of title XIII of the
Housing and Community Development Act of 1992 (12 U.S.C. 4561
et seq.) is amended by adding after section 1337, as added by
the preceding provisions of this title, the following new
section:
``SEC. 1338. CONSISTENCY WITH MISSION.
``This subpart may not be construed to authorize an
enterprise to engage in any program or activity that
contravenes or is inconsistent with the Federal National
Mortgage Association Charter Act or the Federal Home Loan
Mortgage Corporation Act.''.
SEC. 342. ENFORCEMENT.
(a) Cease-and-Desist Proceedings.--Section 1341 of the
Housing and Community Development Act of 1992 (12 U.S.C. 4581)
is amended--
(1) by striking subsection (a) and inserting the
following new subsection:
``(a) Grounds for Issuance.--The Director may issue and serve
a notice of charges under this section upon an enterprise if
the Director determines--
``(1) the enterprise has failed to meet any housing
goal established under subpart B, following a written
notice and determination of such failure in accordance
with section 1336;
``(2) the enterprise has failed to submit a report
under section 1314, following a notice of such failure,
an opportunity for comment by the enterprise, and a
final determination by the Director;
``(3) the enterprise has failed to submit the
information required under subsection (m) or (n) of
section 309 of the Federal National Mortgage
Association Charter Act, or subsection (e) or (f) of
section 307 of the Federal Home Loan Mortgage
Corporation Act;
``(4) the enterprise has violated any provision of
this part or any order, rule or regulation under this
part;
``(5) the enterprise has failed to submit a housing
plan that complies with section 1336(c) within the
applicable period; or
``(6) the enterprise has failed to comply with a
housing plan under section 1336(c).'';
(2) in subsection (b)(2), by striking ``requiring the
enterprise to'' and all that follows through the end of
the paragraph and inserting the following: ``requiring
the enterprise to--
``(A) comply with the goal or goals;
``(B) submit a report under section 1314;
``(C) comply with any provision this part or
any order, rule or regulation under such part;
``(D) submit a housing plan in compliance
with section 1336(c);
``(E) comply with a housing plan submitted
under section 1336(c); or
``(F) provide the information required under
subsection (m) or (n) of section 309 of the
Federal National Mortgage Association Charter
Act or subsection (e) or (f) of section 307 of
the Federal Home Loan Mortgage Corporation Act,
as applicable.'';
(3) in subsection (c), by inserting ``date of the''
before ``service of the order''; and
(4) by striking subsection (d).
(b) Authority of Director To Enforce Notices and Orders.--
Section 1344 of the Housing and Community Development Act of
1992 (12 U.S.C. 4584) is amended by striking subsection (a) and
inserting the following new subsection:
``(a) Enforcement.--The Director may, in the discretion of
the Director, apply to the United States District Court for the
District of Columbia, or the United States district court
within the jurisdiction of which the headquarters of the
enterprise is located, for the enforcement of any effective and
outstanding notice or order issued under section 1341 or 1345,
or request that the Attorney General of the United States bring
such an action. Such court shall have jurisdiction and power to
order and require compliance with such notice or order.''.
(c) Civil Money Penalties.--Section 1345 of the Housing and
Community Development Act of 1992 (12 U.S.C. 4585) is amended--
(1) by striking subsections (a) and (b) and inserting
the following new subsections:
``(a) Authority.--The Director may impose a civil money
penalty, in accordance with the provisions of this section, on
any enterprise that has failed to--
``(1) meet any housing goal established under subpart
B, following a written notice and determination of such
failure in accordance with section 1336(b);
``(2) submit a report under section 1314, following a
notice of such failure, an opportunity for comment by
the enterprise, and a final determination by the
Director;
``(3) submit the information required under
subsection (m) or (n) of section 309 of the Federal
National Mortgage Association Charter Act, or
subsection (e) or (f) of section 307 of the Federal
Home Loan Mortgage Corporation Act;
``(4) comply with any provision of this part or any
order, rule or regulation under this part;
``(5) submit a housing plan pursuant to section
1336(c) within the required period; or
``(6) comply with a housing plan for the enterprise
under section 1336(c).
``(b) Amount of Penalty.--The amount of the penalty, as
determined by the Director, may not exceed--
``(1) for any failure described in paragraph (1),
(5), or (6) of subsection (a), $50,000 for each day
that the failure occurs; and
``(2) for any failure described in paragraph (2),
(3), or (4) of subsection (a), $20,000 for each day
that the failure occurs.'';
(2) in subsection (c)--
(A) in paragraph (1)--
(i) in subparagraph (A), by inserting
``and'' after the semicolon at the end;
(ii) in subparagraph (B), by striking
``; and'' and inserting a period; and
(iii) by striking subparagraph (C);
and
(B) in paragraph (2), by inserting after the
period at the end the following: ``In
determining the penalty under subsection
(a)(1), the Director shall give consideration
to the length of time the enterprise should
reasonably take to achieve the goal.'';
(3) in the first sentence of subsection (d)--
(A) by striking ``request the Attorney
General of the United States to'' and inserting
``, in the discretion of the Director,''; and
(B) by inserting ``, or request that the
Attorney General of the United States bring
such an action'' before the period at the end;
(4) by striking subsection (f); and
(5) by redesignating subsection (g) as subsection
(f).
(d) Enforcement of Subpoenas.--Section 1348(c) of the Housing
and Community Development Act of 1992 (12 U.S.C. 4588(c)) is
amended--
(1) by striking ``request the Attorney General of the
United States to'' and inserting ``, in the discretion
of the Director,''; and
(2) by inserting ``or request that the Attorney
General of the United States bring such an action,''
after ``District of Columbia,''.
(e) Conforming Amendment.--The heading for subpart C of part
2 of subtitle A of title XIII of the Housing and Community
Development Act of 1992 is amended to read as follows:
``Subpart C--Enforcement''.
SEC. 343. CONFORMING AMENDMENTS.
Part 2 of subtitle A of title XIII of the Housing and
Community Development Act of 1992 (12 U.S.C. 4541 et seq.) is
amended--
(1) by striking ``Secretary'' each place such term
appears in such part and inserting ``Director'';
(2) in the section heading for section 1323 (12
U.S.C. 4543), by inserting ``OF ENTERPRISES'' before
the period at the end;
(3) by striking section 1327 (12 U.S.C. 4547);
(4) by striking section 1328 (12 U.S.C. 4548);
(5) by redesignating section 1329 (as amended by
section 335) as section 1327;
(6) in sections 1345(c)(1)(A), 1346(a), and 1346(b)
(12 U.S.C. 4585(c)(1)(A), 4586(a), and 4586(b)), by
striking ``Secretary's'' each place such term appears
and inserting ``Director's''; and
(7) by striking section 1349 (12 U.S.C. 4589).
CHAPTER 3--PROMPT CORRECTIVE ACTION
SEC. 345. CAPITAL CLASSIFICATIONS.
(a) In General.--Section 1364 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4614) is amended--
(1) in the heading for subsection (a), by striking
``In General'' and inserting ``Enterprises''.
(2) in subsection (c)--
(A) by striking ``subsection (b)'' and
inserting ``subsection (c)'';
(B) by striking ``enterprises'' and inserting
``regulated entities''; and
(C) by striking the last sentence;
(3) by redesignating subsections (c) (as so amended
by paragraph (2) of this subsection) and (d) as
subsections (d) and (f), respectively;
(4) by striking subsection (b) and inserting the
following new subsections:
``(b) Federal Home Loan Banks.--
``(1) Establishment and criteria.--For purposes of
this subtitle, the Director shall, by regulation--
``(A) establish the capital classifications
specified under paragraph (2) for the Federal
home loan banks;
``(B) establish criteria for each such
capital classification based on the amount and
types of capital held by a bank and the risk-
based, minimum, and critical capital levels for
the banks and taking due consideration of the
capital classifications established under
subsection (a) for the enterprises, with such
modifications as the Director determines to be
appropriate to reflect the difference in
operations between the banks and the
enterprises; and
``(C) shall classify the Federal home loan
banks according to such capital
classifications.
``(2) Classifications.--The capital classifications
specified under this paragraph are--
``(A) adequately capitalized;
``(B) undercapitalized;
``(C) significantly undercapitalized; and
``(D) critically undercapitalized.
``(c) Discretionary Classification.--
``(1) Grounds for reclassification.--The Director may
reclassify a regulated entity under paragraph (2) if--
``(A) at any time, the Director determines in
writing that the regulated entity is engaging
in conduct that could result in a rapid
depletion of core or total capital or, in the
case of an enterprise, that the value of the
property subject to mortgages held or
securitized by the enterprise has decreased
significantly;
``(B) after notice and an opportunity for
hearing, the Director determines that the
regulated entity is in an unsafe or unsound
condition; or
``(C) pursuant to section 1371(b), the
Director deems the regulated entity to be
engaging in an unsafe or unsound practice.
``(2) Reclassification.--In addition to any other
action authorized under this title, including the
reclassification of a regulated entity for any reason
not specified in this subsection, if the Director takes
any action described in paragraph (1) the Director may
classify a regulated entity--
``(A) as undercapitalized, if the regulated
entity is otherwise classified as adequately
capitalized;
``(B) as significantly undercapitalized, if
the regulated entity is otherwise classified as
undercapitalized; and
``(C) as critically undercapitalized, if the
regulated entity is otherwise classified as
significantly undercapitalized.''; and
(5) by inserting after subsection (d) (as so
redesignated by paragraph (3) of this subsection), the
following new subsection:
``(e) Restriction on Capital Distributions.--
``(1) In general.--A regulated entity shall make no
capital distribution if, after making the distribution,
the regulated entity would be undercapitalized.
``(2) Exception.--Notwithstanding paragraph (1), the
Director may permit a regulated entity, to the extent
appropriate or applicable, to repurchase, redeem,
retire, or otherwise acquire shares or ownership
interests if the repurchase, redemption, retirement, or
other acquisition--
``(A) is made in connection with the issuance
of additional shares or obligations of the
regulated entity in at least an equivalent
amount; and
``(B) will reduce the financial obligations
of the regulated entity or otherwise improve
the financial condition of the entity.''.
(b) Regulations.--Not later than the expiration of the 180-
day period beginning on the effective date under section 365,
the Director of the Federal Housing Finance Agency shall issue
regulations to carry out section 1364(b) of the Housing and
Community Development Act of 1992 (as added by paragraph (4) of
this subsection), relating to capital classifications for the
Federal home loan banks.
SEC. 346. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED
ENTITIES.
Section 1365 of the Housing and Community Development Act of
1992 (12 U.S.C. 4615) is amended--
(1) in the section heading, by striking
``ENTERPRISES'' and inserting ``REGULATED ENTITIES'';
(2) in subsection (a)--
(A) by redesignating paragraphs (1) and (2)
as paragraphs (2) and (3), respectively;
(B) by inserting before paragraph (2), as so
redesignated by subparagraph (A) of this
paragraph, the following paragraph:
``(1) Required monitoring.--The Director shall--
``(A) closely monitor the condition of any
regulated entity that is classified as
undercapitalized;
``(B) closely monitor compliance with the
capital restoration plan, restrictions, and
requirements imposed under this section; and
``(C) periodically review the plan,
restrictions, and requirements applicable to
the undercapitalized regulated entity to
determine whether the plan, restrictions, and
requirements are achieving the purpose of this
section.''; and
(C) by inserting at the end the following new
paragraphs:
``(4) Restriction of asset growth.--A regulated
entity that is classified as undercapitalized shall not
permit its average total assets (as such term is
defined in section 1316(b) during any calendar quarter
to exceed its average total assets during the preceding
calendar quarter unless--
``(A) the Director has accepted the capital
restoration plan of the regulated entity;
``(B) any increase in total assets is
consistent with the plan; and
``(C) the ratio of total capital to assets
for the regulated entity increases during the
calendar quarter at a rate sufficient to enable
the entity to become adequately capitalized
within a reasonable time.
``(5) Prior approval of acquisitions, new products,
and new activities.--A regulated entity that is
classified as undercapitalized shall not, directly or
indirectly, acquire any interest in any entity or
initially offer any new product (as such term is
defined in section 1321(f)) or engage in any new
activity, service, undertaking, or offering unless--
``(A) the Director has accepted the capital
restoration plan of the regulated entity, the
entity is implementing the plan, and the
Director determines that the proposed action is
consistent with and will further the
achievement of the plan; or
``(B) the Director determines that the
proposed action will further the purpose of
this section.'';
(3) in the subsection heading for subsection (b), by
striking ``From Undercapitalized to Significantly
Undercapitalized''; and
(4) by striking subsection (c) and inserting the
following new subsection:
``(c) Other Discretionary Safeguards.--The Director may take,
with respect to a regulated entity that is classified as
undercapitalized, any of the actions authorized to be taken
under section 1366 with respect to a regulated entity that is
classified as significantly undercapitalized, if the Director
determines that such actions are necessary to carry out the
purpose of this subtitle.''.
SEC. 347. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY
UNDERCAPITALIZED REGULATED ENTITIES.
Section 1366 of the Housing and Community Development Act of
1992 (12 U.S.C. 4616) is amended--
(1) in the section heading, by striking
``ENTERPRISES'' and inserting ``REGULATED ENTITIES'';
(2) in subsection (a)(2)(A), by striking
``enterprise'' the last place such term appears;
(3) in subsection (b)--
(A) in the subsection heading, by striking
``Discretionary Supervisory Actions'' and
inserting ``Specific Actions''.
(B) in the matter preceding paragraph (1), by
striking ``may, at any time, take any'' and
inserting ``shall carry out this section by
taking, at any time, one or more'';
(C) by redesignating paragraphs (5) and (6)
as paragraphs (6) and (7), respectively;
(D) by inserting after paragraph (4) the
following new paragraph:
``(5) Improvement of management.--Take one or more of
the following actions:
``(A) New election of board.--Order a new
election for the board of directors of the
regulated entity.
``(B) Dismissal of directors or executive
officers.--Require the regulated entity to
dismiss from office any director or executive
officer who had held office for more than 180
days immediately before the entity became
undercapitalized. Dismissal under this
subparagraph shall not be construed to be a
removal pursuant to the Director's enforcement
powers provided in section 1377.
``(C) Employ qualified executive officers.--
Require the regulated entity to employ
qualified executive officers (who, if the
Director so specifies, shall be subject to
approval by the Director).''; and
(E) by inserting at the end the following new
paragraph:
``(8) Other action.--Require the regulated entity to
take any other action that the Director determines will
better carry out the purpose of this section than any
of the actions specified in this paragraph.'';
(4) by redesignating subsection (c) as subsection
(d); and
(5) by inserting after subsection (b) the following
new subsection:
``(c) Restriction on Compensation of Executive Officers.--A
regulated entity that is classified as significantly
undercapitalized may not, without prior written approval by the
Director--
``(1) pay any bonus to any executive officer; or
``(2) provide compensation to any executive officer
at a rate exceeding that officer's average rate of
compensation (excluding bonuses, stock options, and
profit sharing) during the 12 calendar months preceding
the calendar month in which the regulated entity became
undercapitalized.''.
SEC. 348. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED
ENTITIES.
(a) In General.--Section 1367 of the Housing and Community
Development Act of 1992 (12 U.S.C. 4617) is amended to read as
follows:
``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED
ENTITIES.
``(a) Appointment of Agency as Conservator or Receiver.--
``(1) In general.--Notwithstanding any other
provision of Federal or State law, if any of the
grounds under paragraph (3) exist, at the discretion of
the Director, the Director may establish a
conservatorship or receivership, as appropriate, for
the purpose of reorganizing, rehabilitating, or winding
up the affairs of a regulated entity.
``(2) Appointment.--In any conservatorship or
receivership established under this section, the
Director shall appoint the Agency as conservator or
receiver.
``(3) Grounds for appointment.--The grounds for
appointing a conservator or receiver for a regulated
entity are as follows:
``(A) Assets insufficient for obligations.--
The assets of the regulated entity are less
than the obligations of the regulated entity to
its creditors and others.
``(B) Substantial dissipation.--Substantial
dissipation of assets or earnings due to--
``(i) any violation of any provision
of Federal or State law; or
``(ii) any unsafe or unsound
practice.
``(C) Unsafe or unsound condition.--An unsafe
or unsound condition to transact business.
``(D) Cease-and-desist orders.--Any willful
violation of a cease-and-desist order that has
become final.
``(E) Concealment.--Any concealment of the
books, papers, records, or assets of the
regulated entity, or any refusal to submit the
books, papers, records, or affairs of the
regulated entity, for inspection to any
examiner or to any lawful agent of the
Director.
``(F) Inability to meet obligations.--The
regulated entity is likely to be unable to pay
its obligations or meet the demands of its
creditors in the normal course of business.
``(G) Losses.--The regulated entity has
incurred or is likely to incur losses that will
deplete all or substantially all of its
capital, and there is no reasonable prospect
for the regulated entity to become adequately
capitalized (as defined in section 1364(a)(1)).
``(H) Violations of law.--Any violation of
any law or regulation, or any unsafe or unsound
practice or condition that is likely to--
``(i) cause insolvency or substantial
dissipation of assets or earnings; or
``(ii) weaken the condition of the
regulated entity.
``(I) Consent.--The regulated entity, by
resolution of its board of directors or its
shareholders or members, consents to the
appointment.
``(J) Undercapitalization.--The regulated
entity is undercapitalized or significantly
undercapitalized (as defined in section
1364(a)(3) or in regulations issued pursuant to
section 1364(b), as applicable), and--
``(i) has no reasonable prospect of
becoming adequately capitalized;
``(ii) fails to become adequately
capitalized, as required by--
``(I) section 1365(a)(1) with
respect to an undercapitalized
regulated entity; or
``(II) section 1366(a)(1)
with respect to a significantly
undercapitalized regulated
entity;
``(iii) fails to submit a capital
restoration plan acceptable to the
Agency within the time prescribed under
section 1369C; or
``(iv) materially fails to implement
a capital restoration plan submitted
and accepted under section 1369C.
``(K) Critical undercapitalization.--The
regulated entity is critically
undercapitalized, as defined in section
1364(a)(4) or in regulations issued pursuant to
section 1364(b), as applicable.
``(L) Money laundering.--The Attorney General
notifies the Director in writing that the
regulated entity has been found guilty of a
criminal offense under section 1956 or 1957 of
title 18, United States Code, or section 5322
or 5324 of title 31, United States Code.
``(4) Mandatory receivership.--
``(A) In general.--The Director shall appoint
the Agency as receiver for a regulated entity
if the Director determines, in writing, that--
``(i) the assets of the regulated
entity are, and during the preceding 30
calendar days have been, less than the
obligations of the regulated entity to
its creditors and others; or
``(ii) the regulated entity is not,
and during the preceding 30 calendar
days has not been, generally paying the
debts of the regulated entity (other
than debts that are the subject of a
bona fide dispute) as such debts become
due.
``(B) Periodic determination required for
critically under capitalized regulated
entity.--If a regulated entity is critically
undercapitalized, the Director shall make a
determination, in writing, as to whether the
regulated entity meets the criteria specified
in clause (i) or (ii) of subparagraph (A)--
``(i) not later than 30 calendar days
after the regulated entity initially
becomes critically undercapitalized;
and
``(ii) at least once during each
succeeding 30-calendar day period.
``(C) Determination not required if
receivership already in place.--Subparagraph
(B) shall not apply with respect to a regulated
entity in any period during which the Agency
serves as receiver for the regulated entity.
``(D) Receivership terminates
conservatorship.--The appointment under this
section of the Agency as receiver of a
regulated entity shall immediately terminate
any conservatorship established under this
title for the regulated entity.
``(5) Judicial review.--
``(A) In general.--If the Agency is appointed
conservator or receiver under this section, the
regulated entity may, within 30 days of such
appointment, bring an action in the United
States District Court for the judicial district
in which the principal place of business of
such regulated entity is located, or in the
United States District Court for the District
of Columbia, for an order requiring the Agency
to remove itself as conservator or receiver.
``(B) Review.--Upon the filing of an action
under subparagraph (A), the court shall, upon
the merits, dismiss such action or direct the
Agency to remove itself as such conservator or
receiver.
``(6) Directors not liable for acquiescing in
appointment of conservator or receiver.--The members of
the board of directors of a regulated entity shall not
be liable to the shareholders or creditors of the
regulated entity for acquiescing in or consenting in
good faith to the appointment of the Agency as
conservator or receiver for that regulated entity.
``(7) Agency not subject to any other federal
agency.--When acting as conservator or receiver, the
Agency shall not be subject to the direction or
supervision of any other agency of the United States or
any State in the exercise of the rights, powers, and
privileges of the Agency.
``(b) Powers and Duties of the Agency as Conservator or
Receiver.--
``(1) Rulemaking authority of the agency.--The Agency
may prescribe such regulations as the Agency determines
to be appropriate regarding the conduct of
conservatorships or receiverships.
``(2) General powers.--
``(A) Successor to regulated entity.--The
Agency shall, as conservator or receiver, and
by operation of law, immediately succeed to--
``(i) all rights, titles, powers, and
privileges of the regulated entity, and
of any stockholder, officer, or
director of such regulated entity with
respect to the regulated entity and the
assets of the regulated entity; and
``(ii) title to the books, records,
and assets of any other legal custodian
of such regulated entity.
``(B) Operate the regulated entity.--The
Agency may, as conservator or receiver--
``(i) take over the assets of and
operate the regulated entity with all
the powers of the shareholders, the
directors, and the officers of the
regulated entity and conduct all
business of the regulated entity;
``(ii) collect all obligations and
money due the regulated entity;
``(iii) perform all functions of the
regulated entity in the name of the
regulated entity which are consistent
with the appointment as conservator or
receiver; and
``(iv) preserve and conserve the
assets and property of such regulated
entity.
``(C) Functions of officers, directors, and
shareholders of a regulated entity.--The Agency
may, by regulation or order, provide for the
exercise of any function by any stockholder,
director, or officer of any regulated entity
for which the Agency has been named conservator
or receiver.
``(D) Powers as conservator.--The Agency may,
as conservator, take such action as may be--
``(i) necessary to put the regulated
entity in a sound and solvent
condition; and
``(ii) appropriate to carry on the
business of the regulated entity and
preserve and conserve the assets and
property of the regulated entity,
including, if two or more Federal home
loan banks have been placed in
conservatorship contemporaneously,
merging two or more such banks into a
single Federal home loan bank.
``(E) Additional powers as receiver.--The
Agency may, as receiver, place the regulated
entity in liquidation and proceed to realize
upon the assets of the regulated entity, having
due regard to the conditions of the housing
finance market.
``(F) Organization of new regulated
entities.--The Agency may, as receiver,
organize a successor regulated entity that will
operate pursuant to subsection (i).
``(G) Transfer of assets and liabilities.--
The Agency may, as conservator or receiver,
transfer any asset or liability of the
regulated entity in default without any
approval, assignment, or consent with respect
to such transfer. Any Federal home loan bank
may, with the approval of the Agency, acquire
the assets of any Bank in conservatorship or
receivership, and assume the liabilities of
such Bank.
``(H) Payment of valid obligations.--The
Agency, as conservator or receiver, shall, to
the extent of proceeds realized from the
performance of contracts or sale of the assets
of a regulated entity, pay all valid
obligations of the regulated entity in
accordance with the prescriptions and
limitations of this section.
``(I) Subpoena authority.--
``(i) In general.--
``(I) In general.--The Agency
may, as conservator or
receiver, and for purposes of
carrying out any power,
authority, or duty with respect
to a regulated entity
(including determining any
claim against the regulated
entity and determining and
realizing upon any asset of any
person in the course of
collecting money due the
regulated entity), exercise any
power established under section
1348.
``(II) Applicability of
law.--The provisions of section
1348 shall apply with respect
to the exercise of any power
exercised under this
subparagraph in the same manner
as such provisions apply under
that section.
``(ii) Authority of director.--A
subpoena or subpoena duces tecum may be
issued under clause (i) only by, or
with the written approval of, the
Director, or the designee of the
Director.
``(iii) Rule of construction.--This
subsection shall not be construed to
limit any rights that the Agency, in
any capacity, might otherwise have
under section 1317 or 1379D.
``(J) Contracting for services.--The Agency
may, as conservator or receiver, provide by
contract for the carrying out of any of its
functions, activities, actions, or duties as
conservator or receiver.
``(K) Incidental powers.--The Agency may, as
conservator or receiver--
``(i) exercise all powers and
authorities specifically granted to
conservators or receivers,
respectively, under this section, and
such incidental powers as shall be
necessary to carry out such powers; and
``(ii) take any action authorized by
this section, which the Agency
determines is in the best interests of
the regulated entity or the Agency.
``(3) Authority of receiver to determine claims.--
``(A) In general.--The Agency may, as
receiver, determine claims in accordance with
the requirements of this subsection and any
regulations prescribed under paragraph (4).
``(B) Notice requirements.--The receiver, in
any case involving the liquidation or winding
up of the affairs of a closed regulated entity,
shall--
``(i) promptly publish a notice to
the creditors of the regulated entity
to present their claims, together with
proof, to the receiver by a date
specified in the notice which shall be
not less than 90 days after the
publication of such notice; and
``(ii) republish such notice
approximately 1 month and 2 months,
respectively, after the publication
under clause (i).
``(C) Mailing required.--The receiver shall
mail a notice similar to the notice published
under subparagraph (B)(i) at the time of such
publication to any creditor shown on the books
of the regulated entity--
``(i) at the last address of the
creditor appearing in such books; or
``(ii) upon discovery of the name and
address of a claimant not appearing on
the books of the regulated entity
within 30 days after the discovery of
such name and address.
``(4) Rulemaking authority relating to determination
of claims.--Subject to subsection (c), the Director may
prescribe regulations regarding the allowance or
disallowance of claims by the receiver and providing
for administrative determination of claims and review
of such determination.
``(5) Procedures for determination of claims.--
``(A) Determination period.--
``(i) In general.--Before the end of
the 180-day period beginning on the
date on which any claim against a
regulated entity is filed with the
Agency as receiver, the Agency shall
determine whether to allow or disallow
the claim and shall notify the claimant
of any determination with respect to
such claim.
``(ii) Extension of time.--The period
described in clause (i) may be extended
by a written agreement between the
claimant and the Agency.
``(iii) Mailing of notice
sufficient.--The notification
requirements of clause (i) shall be
deemed to be satisfied if the notice of
any determination with respect to any
claim is mailed to the last address of
the claimant which appears--
``(I) on the books of the
regulated entity;
``(II) in the claim filed by
the claimant; or
``(III) in documents
submitted in proof of the
claim.
``(iv) Contents of notice of
disallowance.--If any claim filed under
clause (i) is disallowed, the notice to
the claimant shall contain--
``(I) a statement of each
reason for the disallowance;
and
``(II) the procedures
available for obtaining agency
review of the determination to
disallow the claim or judicial
determination of the claim.
``(B) Allowance of proven claim.--The
receiver shall allow any claim received on or
before the date specified in the notice
published under paragraph (3)(B)(i), or the
date specified in the notice required under
paragraph (3)(C), which is proved to the
satisfaction of the receiver.
``(C) Disallowance of claims filed after end
of filing period.--Claims filed after the date
specified in the notice published under
paragraph (3)(B)(i), or the date specified
under paragraph (3)(C), shall be disallowed and
such disallowance shall be final.
``(D) Authority to disallow claims.--
``(i) In general.--The receiver may
disallow any portion of any claim by a
creditor or claim of security,
preference, or priority which is not
proved to the satisfaction of the
receiver.
``(ii) Payments to less than fully
secured creditors.--In the case of a
claim of a creditor against a regulated
entity which is secured by any property
or other asset of such regulated
entity, the receiver--
``(I) may treat the portion
of such claim which exceeds an
amount equal to the fair market
value of such property or other
asset as an unsecured claim
against the regulated entity;
and
``(II) may not make any
payment with respect to such
unsecured portion of the claim
other than in connection with
the disposition of all claims
of unsecured creditors of the
regulated entity.
``(iii) Exceptions.--No provision of
this paragraph shall apply with respect
to any extension of credit from any
Federal Reserve Bank, Federal home loan
bank, or the Treasury of the United
States.
``(E) No judicial review of determination
pursuant to subparagraph (d).--No court may
review the determination of the Agency under
subparagraph (D) to disallow a claim. This
subparagraph shall not affect the authority of
a claimant to obtain de novo judicial review of
a claim pursuant to paragraph (6).
``(F) Legal effect of filing.--
``(i) Statute of limitation tolled.--
For purposes of any applicable statute
of limitations, the filing of a claim
with the receiver shall constitute a
commencement of an action.
``(ii) No prejudice to other
actions.--Subject to paragraph (10),
the filing of a claim with the receiver
shall not prejudice any right of the
claimant to continue any action which
was filed before the date of the
appointment of the receiver, subject to
the determination of claims by the
receiver.
``(6) Provision for judicial determination of
claims.--
``(A) In general.--The claimant may file suit
on a claim (or continue an action commenced
before the appointment of the receiver) in the
district or territorial court of the United
States for the district within which the
principal place of business of the regulated
entity is located or the United States District
Court for the District of Columbia (and such
court shall have jurisdiction to hear such
claim), before the end of the 60-day period
beginning on the earlier of--
``(i) the end of the period described
in paragraph (5)(A)(i) with respect to
any claim against a regulated entity
for which the Agency is receiver; or
``(ii) the date of any notice of
disallowance of such claim pursuant to
paragraph (5)(A)(i).
``(B) Statute of limitations.--A claim shall
be deemed to be disallowed (other than any
portion of such claim which was allowed by the
receiver), and such disallowance shall be
final, and the claimant shall have no further
rights or remedies with respect to such claim,
if the claimant fails, before the end of the
60-day period described under subparagraph (A),
to file suit on such claim (or continue an
action commenced before the appointment of the
receiver).
``(7) Review of claims.--
``(A) Other review procedures.--
``(i) In general.--The Agency shall
establish such alternative dispute
resolution processes as may be
appropriate for the resolution of
claims filed under paragraph (5)(A)(i).
``(ii) Criteria.--In establishing
alternative dispute resolution
processes, the Agency shall strive for
procedures which are expeditious, fair,
independent, and low cost.
``(iii) Voluntary binding or
nonbinding procedures.--The Agency may
establish both binding and nonbinding
processes, which may be conducted by
any government or private party. All
parties, including the claimant and the
Agency, must agree to the use of the
process in a particular case.
``(B) Consideration of incentives.--The
Agency shall seek to develop incentives for
claimants to participate in the alternative
dispute resolution process.
``(8) Expedited determination of claims.--
``(A) Establishment required.--The Agency
shall establish a procedure for expedited
relief outside of the routine claims process
established under paragraph (5) for claimants
who--
``(i) allege the existence of legally
valid and enforceable or perfected
security interests in assets of any
regulated entity for which the Agency
has been appointed receiver; and
``(ii) allege that irreparable injury
will occur if the routine claims
procedure is followed.
``(B) Determination period.--Before the end
of the 90-day period beginning on the date any
claim is filed in accordance with the
procedures established under subparagraph (A),
the Director shall--
``(i) determine--
``(I) whether to allow or
disallow such claim; or
``(II) whether such claim
should be determined pursuant
to the procedures established
under paragraph (5); and
``(ii) notify the claimant of the
determination, and if the claim is
disallowed, provide a statement of each
reason for the disallowance and the
procedure for obtaining agency review
or judicial determination.
``(C) Period for filing or renewing suit.--
Any claimant who files a request for expedited
relief shall be permitted to file a suit, or to
continue a suit filed before the appointment of
the receiver, seeking a determination of the
rights of the claimant with respect to such
security interest after the earlier of--
``(i) the end of the 90-day period
beginning on the date of the filing of
a request for expedited relief; or
``(ii) the date the Agency denies the
claim.
``(D) Statute of limitations.--If an action
described under subparagraph (C) is not filed,
or the motion to renew a previously filed suit
is not made, before the end of the 30-day
period beginning on the date on which such
action or motion may be filed under
subparagraph (B), the claim shall be deemed to
be disallowed as of the end of such period
(other than any portion of such claim which was
allowed by the receiver), such disallowance
shall be final, and the claimant shall have no
further rights or remedies with respect to such
claim.
``(E) Legal effect of filing.--
``(i) Statute of limitation tolled.--
For purposes of any applicable statute
of limitations, the filing of a claim
with the receiver shall constitute a
commencement of an action.
``(ii) No prejudice to other
actions.--Subject to paragraph (10),
the filing of a claim with the receiver
shall not prejudice any right of the
claimant to continue any action that
was filed before the appointment of the
receiver, subject to the determination
of claims by the receiver.
``(9) Payment of claims.--
``(A) In general.--The receiver may, in the
discretion of the receiver, and to the extent
funds are available from the assets of the
regulated entity, pay creditor claims, in such
manner and amounts as are authorized under this
section, which are--
``(i) allowed by the receiver;
``(ii) approved by the Agency
pursuant to a final determination
pursuant to paragraph (7) or (8); or
``(iii) determined by the final
judgment of any court of competent
jurisdiction.
``(B) Agreements against the interest of the
agency.--No agreement that tends to diminish or
defeat the interest of the Agency in any asset
acquired by the Agency as receiver under this
section shall be valid against the Agency
unless such agreement is in writing, and
executed by an authorized official of the
regulated entity, except that such requirements
for qualified financial contracts shall be
applied in a manner consistent with reasonable
business trading practices in the financial
contracts market.
``(C) Payment of dividends on claims.--The
receiver may, in the sole discretion of the
receiver, pay from the assets of the regulated
entity dividends on proved claims at any time,
and no liability shall attach to the Agency, by
reason of any such payment, for failure to pay
dividends to a claimant whose claim is not
proved at the time of any such payment.
``(D) Rulemaking authority of the director.--
The Director may prescribe such rules,
including definitions of terms, as the Director
deems appropriate to establish a single uniform
interest rate for, or to make payments of post-
insolvency interest to creditors holding proven
claims against the receivership estates of
regulated entities following satisfaction by
the receiver of the principal amount of all
creditor claims.
``(10) Suspension of legal actions.--
``(A) In general.--After the appointment of a
conservator or receiver for a regulated entity,
the conservator or receiver may, in any
judicial action or proceeding to which such
regulated entity is or becomes a party, request
a stay for a period not to exceed--
``(i) 45 days, in the case of any
conservator; and
``(ii) 90 days, in the case of any
receiver.
``(B) Grant of stay by all courts required.--
Upon receipt of a request by any conservator or
receiver under subparagraph (A) for a stay of
any judicial action or proceeding in any court
with jurisdiction of such action or proceeding,
the court shall grant such stay as to all
parties.
``(11) Additional rights and duties.--
``(A) Prior final adjudication.--The Agency
shall abide by any final unappealable judgment
of any court of competent jurisdiction which
was rendered before the appointment of the
Agency as conservator or receiver.
``(B) Rights and remedies of conservator or
receiver.--In the event of any appealable
judgment, the Agency as conservator or receiver
shall--
``(i) have all the rights and
remedies available to the regulated
entity (before the appointment of such
conservator or receiver) and the
Agency, including removal to Federal
court and all appellate rights; and
``(ii) not be required to post any
bond in order to pursue such remedies.
``(C) No attachment or execution.--No
attachment or execution may issue by any court
upon assets in the possession of the receiver.
``(D) Limitation on judicial review.--Except
as otherwise provided in this subsection, no
court shall have jurisdiction over--
``(i) any claim or action for payment
from, or any action seeking a
determination of rights with respect
to, the assets of any regulated entity
for which the Agency has been appointed
receiver; or
``(ii) any claim relating to any act
or omission of such regulated entity or
the Agency as receiver.
``(E) Disposition of assets.--In exercising
any right, power, privilege, or authority as
conservator or receiver in connection with any
sale or disposition of assets of a regulated
entity for which the Agency has been appointed
conservator or receiver, the Agency shall
conduct its operations in a manner which
maintains stability in the housing finance
markets and, to the extent consistent with that
goal--
``(i) maximizes the net present value
return from the sale or disposition of
such assets;
``(ii) minimizes the amount of any
loss realized in the resolution of
cases; and
``(iii) ensures adequate competition
and fair and consistent treatment of
offerors.
``(12) Statute of limitations for actions brought by
conservator or receiver.--
``(A) In general.--Notwithstanding any
provision of any contract, the applicable
statute of limitations with regard to any
action brought by the Agency as conservator or
receiver shall be--
``(i) in the case of any contract
claim, the longer of--
``(I) the 6-year period
beginning on the date the claim
accrues; or
``(II) the period applicable
under State law; and
``(ii) in the case of any tort claim,
the longer of--
``(I) the 3-year period
beginning on the date the claim
accrues; or
``(II) the period applicable
under State law.
``(B) Determination of the date on which a
claim accrues.--For purposes of subparagraph
(A), the date on which the statute of
limitations begins to run on any claim
described in such subparagraph shall be the
later of--
``(i) the date of the appointment of
the Agency as conservator or receiver;
or
``(ii) the date on which the cause of
action accrues.
``(13) Revival of expired state causes of action.--
``(A) In general.--In the case of any tort
claim described under subparagraph (B) for
which the statute of limitations applicable
under State law with respect to such claim has
expired not more than 5 years before the
appointment of the Agency as conservator or
receiver, the Agency may bring an action as
conservator or receiver on such claim without
regard to the expiration of the statute of
limitation applicable under State law.
``(B) Claims described.--A tort claim
referred to under subparagraph (A) is a claim
arising from fraud, intentional misconduct
resulting in unjust enrichment, or intentional
misconduct resulting in substantial loss to the
regulated entity.
``(14) Accounting and recordkeeping requirements.--
``(A) In general.--The Agency as conservator
or receiver shall, consistent with the
accounting and reporting practices and
procedures established by the Agency, maintain
a full accounting of each conservatorship and
receivership or other disposition of a
regulated entity in default.
``(B) Annual accounting or report.--With
respect to each conservatorship or
receivership, the Agency shall make an annual
accounting or report available to the Board,
the Comptroller General of the United States,
the Committee on Banking, Housing, and Urban
Affairs of the Senate, and the Committee on
Financial Services of the House of
Representatives.
``(C) Availability of reports.--Any report
prepared under subparagraph (B) shall be made
available by the Agency upon request to any
shareholder of a regulated entity or any member
of the public.
``(D) Recordkeeping requirement.--After the
end of the 6-year period beginning on the date
that the conservatorship or receivership is
terminated by the Director, the Agency may
destroy any records of such regulated entity
which the Agency, in the discretion of the
Agency, determines to be unnecessary unless
directed not to do so by a court of competent
jurisdiction or governmental agency, or
prohibited by law.
``(15) Fraudulent transfers.--
``(A) In general.--The Agency, as conservator
or receiver, may avoid a transfer of any
interest of a regulated entity-affiliated
party, or any person who the conservator or
receiver determines is a debtor of the
regulated entity, in property, or any
obligation incurred by such party or person,
that was made within 5 years of the date on
which the Agency was appointed conservator or
receiver, if such party or person voluntarily
or involuntarily made such transfer or incurred
such liability with the intent to hinder,
delay, or defraud the regulated entity, the
Agency, the conservator, or receiver.
``(B) Right of recovery.--To the extent a
transfer is avoided under subparagraph (A), the
conservator or receiver may recover, for the
benefit of the regulated entity, the property
transferred, or, if a court so orders, the
value of such property (at the time of such
transfer) from--
``(i) the initial transferee of such
transfer or the regulated entity-
affiliated party or person for whose
benefit such transfer was made; or
``(ii) any immediate or mediate
transferee of any such initial
transferee.
``(C) Rights of transferee or obligee.--The
conservator or receiver may not recover under
subparagraph (B) from--
``(i) any transferee that takes for
value, including satisfaction or
securing of a present or antecedent
debt, in good faith; or
``(ii) any immediate or mediate good
faith transferee of such transferee.
``(D) Rights under this paragraph.--The
rights under this paragraph of the conservator
or receiver described under subparagraph (A)
shall be superior to any rights of a trustee or
any other party (other than any party which is
a Federal agency) under title 11, United States
Code.
``(16) Attachment of assets and other injunctive
relief.--Subject to paragraph (17), any court of
competent jurisdiction may, at the request of the
conservator or receiver, issue an order in accordance
with Rule 65 of the Federal Rules of Civil Procedure,
including an order placing the assets of any person
designated by the Agency or such conservator under the
control of the court, and appointing a trustee to hold
such assets.
``(17) Standards of proof.--Rule 65 of the Federal
Rules of Civil Procedure shall apply with respect to
any proceeding under paragraph (16) without regard to
the requirement of such rule that the applicant show
that the injury, loss, or damage is irreparable and
immediate.
``(18) Treatment of claims arising from breach of
contracts executed by the receiver or conservator.--
``(A) In general.--Notwithstanding any other
provision of this subsection, any final and
unappealable judgment for monetary damages
entered against a receiver or conservator for
the breach of an agreement executed or approved
in writing by such receiver or conservator
after the date of its appointment, shall be
paid as an administrative expense of the
receiver or conservator.
``(B) No limitation of power.--Nothing in
this paragraph shall be construed to limit the
power of a receiver or conservator to exercise
any rights under contract or law, including to
terminate, breach, cancel, or otherwise
discontinue such agreement.
``(19) General exceptions.--
``(A) Limitations.--The rights of a
conservator or receiver appointed under this
section shall be subject to the limitations on
the powers of a receiver under sections 402
through 407 of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C.
4402 through 4407).
``(B) Mortgages held in trust.--
``(i) In general.--Any mortgage, pool
of mortgages, or interest in a pool of
mortgages, held in trust, custodial, or
agency capacity by a regulated entity
for the benefit of persons other than
the regulated entity shall not be
available to satisfy the claims of
creditors generally.
``(ii) Holding of mortgages.--Any
mortgage, pool of mortgages, or
interest in a pool of mortgages,
described under clause (i) shall be
held by the conservator or receiver
appointed under this section for the
beneficial owners of such mortgage,
pool of mortgages, or interest in a
pool of mortgages in accordance with
the terms of the agreement creating
such trust, custodial, or other agency
arrangement.
``(iii) Liability of receiver.--The
liability of a receiver appointed under
this section for damages shall, in the
case of any contingent or unliquidated
claim relating to the mortgages held in
trust, be estimated in accordance set
forth in the regulations of the
Director.
``(c) Priority of Expenses and Unsecured Claims.--
``(1) In general.--Unsecured claims against a
regulated entity, or a receiver, that are proven to the
satisfaction of the receiver shall have priority in the
following order:
``(A) Administrative expenses of the
receiver.
``(B) Any other general or senior liability
of the regulated entity and claims of other
Federal home loan banks arising from their
payment obligations (including joint and
several payment obligations).
``(C) Any obligation subordinated to general
creditors.
``(D) Any obligation to shareholders or
members arising as a result of their status as
shareholder or members.
``(2) Creditors similarly situated.--All creditors
that are similarly situated under paragraph (1) shall
be treated in a similar manner, except that the Agency
may make such other payments to creditors necessary to
maximize the present value return from the sale or
disposition or such regulated entity's assets or to
minimize the amount of any loss realized in the
resolution of cases so long as all creditors similarly
situated receive not less than the amount provided
under subsection (e)(2).
``(3) Definition.--The term `administrative expenses
of the receiver' shall include the actual, necessary
costs and expenses incurred by the receiver in
preserving the assets of the regulated entity or
liquidating or otherwise resolving the affairs of the
regulated entity. Such expenses shall include
obligations that are incurred by the receiver after
appointment as receiver that the Director determines
are necessary and appropriate to facilitate the smooth
and orderly liquidation or other resolution of the
regulated entity.
``(d) Provisions Relating to Contracts Entered Into Before
Appointment of Conservator or Receiver.--
``(1) Authority to repudiate contracts.--In addition
to any other rights a conservator or receiver may have,
the conservator or receiver for any regulated entity
may disaffirm or repudiate any contract or lease--
``(A) to which such regulated entity is a
party;
``(B) the performance of which the
conservator or receiver, in its sole
discretion, determines to be burdensome; and
``(C) the disaffirmance or repudiation of
which the conservator or receiver determines,
in its sole discretion, will promote the
orderly administration of the affairs of the
regulated entity.
``(2) Timing of repudiation.--The conservator or
receiver shall determine whether or not to exercise the
rights of repudiation under this subsection within a
reasonable period following such appointment.
``(3) Claims for damages for repudiation.--
``(A) In general.--Except as otherwise
provided under subparagraph (C) and paragraphs
(4), (5), and (6), the liability of the
conservator or receiver for the disaffirmance
or repudiation of any contract pursuant to
paragraph (1) shall be--
``(i) limited to actual direct
compensatory damages; and
``(ii) determined as of--
``(I) the date of the
appointment of the conservator
or receiver; or
``(II) in the case of any
contract or agreement referred
to in paragraph (8), the date
of the disaffirmance or
repudiation of such contract or
agreement.
``(B) No liability for other damages.--For
purposes of subparagraph (A), the term `actual
direct compensatory damages' shall not
include--
``(i) punitive or exemplary damages;
``(ii) damages for lost profits or
opportunity; or
``(iii) damages for pain and
suffering.
``(C) Measure of damages for repudiation of
financial contracts.--In the case of any
qualified financial contract or agreement to
which paragraph (8) applies, compensatory
damages shall be--
``(i) deemed to include normal and
reasonable costs of cover or other
reasonable measures of damages utilized
in the industries for such contract and
agreement claims; and
``(ii) paid in accordance with this
subsection and subsection (e), except
as otherwise specifically provided in
this section.
``(4) Leases under which the regulated entity is the
lessee.--
``(A) In general.--If the conservator or
receiver disaffirms or repudiates a lease under
which the regulated entity was the lessee, the
conservator or receiver shall not be liable for
any damages (other than damages determined
under subparagraph (B)) for the disaffirmance
or repudiation of such lease.
``(B) Payments of rent.--Notwithstanding
subparagraph (A), the lessor under a lease to
which that subparagraph applies shall--
``(i) be entitled to the contractual
rent accruing before the later of the
date--
``(I) the notice of
disaffirmance or repudiation is
mailed; or
``(II) the disaffirmance or
repudiation becomes effective,
unless the lessor is in default
or breach of the terms of the
lease;
``(ii) have no claim for damages
under any acceleration clause or other
penalty provision in the lease; and
``(iii) have a claim for any unpaid
rent, subject to all appropriate
offsets and defenses, due as of the
date of the appointment, which shall be
paid in accordance with this subsection
and subsection (e).
``(5) Leases under which the regulated entity is the
lessor.--
``(A) In general.--If the conservator or
receiver repudiates an unexpired written lease
of real property of the regulated entity under
which the regulated entity is the lessor and
the lessee is not, as of the date of such
repudiation, in default, the lessee under such
lease may either--
``(i) treat the lease as terminated
by such repudiation; or
``(ii) remain in possession of the
leasehold interest for the balance of
the term of the lease, unless the
lessee defaults under the terms of the
lease after the date of such
repudiation.
``(B) Provisions applicable to lessee
remaining in possession.--If any lessee under a
lease described under subparagraph (A) remains
in possession of a leasehold interest under
clause (ii) of such subparagraph--
``(i) the lessee--
``(I) shall continue to pay
the contractual rent pursuant
to the terms of the lease after
the date of the repudiation of
such lease; and
``(II) may offset against any
rent payment which accrues
after the date of the
repudiation of the lease, and
any damages which accrue after
such date due to the
nonperformance of any
obligation of the regulated
entity under the lease after
such date; and
``(ii) the conservator or receiver
shall not be liable to the lessee for
any damages arising after such date as
a result of the repudiation other than
the amount of any offset allowed under
clause (i)(II).
``(6) Contracts for the sale of real property.--
``(A) In general.--If the conservator or
receiver repudiates any contract for the sale
of real property and the purchaser of such real
property under such contract is in possession,
and is not, as of the date of such repudiation,
in default, such purchaser may either--
``(i) treat the contract as
terminated by such repudiation; or
``(ii) remain in possession of such
real property.
``(B) Provisions applicable to purchaser
remaining in possession.--If any purchaser of
real property under any contract described
under subparagraph (A) remains in possession of
such property under clause (ii) of such
subparagraph--
``(i) the purchaser--
``(I) shall continue to make
all payments due under the
contract after the date of the
repudiation of the contract;
and
``(II) may offset against any
such payments any damages which
accrue after such date due to
the nonperformance (after such
date) of any obligation of the
regulated entity under the
contract; and
``(ii) the conservator or receiver
shall--
``(I) not be liable to the
purchaser for any damages
arising after such date as a
result of the repudiation other
than the amount of any offset
allowed under clause (i)(II);
``(II) deliver title to the
purchaser in accordance with
the provisions of the contract;
and
``(III) have no obligation
under the contract other than
the performance required under
subclause (II).
``(C) Assignment and sale allowed.--
``(i) In general.--No provision of
this paragraph shall be construed as
limiting the right of the conservator
or receiver to assign the contract
described under subparagraph (A), and
sell the property subject to the
contract and the provisions of this
paragraph.
``(ii) No liability after assignment
and sale.--If an assignment and sale
described under clause (i) is
consummated, the conservator or
receiver shall have no further
liability under the contract described
under subparagraph (A), or with respect
to the real property which was the
subject of such contract.
``(7) Provisions applicable to service contracts.--
``(A) Services performed before
appointment.--In the case of any contract for
services between any person and any regulated
entity for which the Agency has been appointed
conservator or receiver, any claim of such
person for services performed before the
appointment of the conservator or the receiver
shall be--
``(i) a claim to be paid in
accordance with subsections (b) and
(e); and
``(ii) deemed to have arisen as of
the date the conservator or receiver
was appointed.
``(B) Services performed after appointment
and prior to repudiation.--If, in the case of
any contract for services described under
subparagraph (A), the conservator or receiver
accepts performance by the other person before
the conservator or receiver makes any
determination to exercise the right of
repudiation of such contract under this
section--
``(i) the other party shall be paid
under the terms of the contract for the
services performed; and
``(ii) the amount of such payment
shall be treated as an administrative
expense of the conservatorship or
receivership.
``(C) Acceptance of performance no bar to
subsequent repudiation.--The acceptance by any
conservator or receiver of services referred to
under subparagraph (B) in connection with a
contract described in such subparagraph shall
not affect the right of the conservator or
receiver to repudiate such contract under this
section at any time after such performance.
``(8) Certain qualified financial contracts.--
``(A) Rights of parties to contracts.--
Subject to paragraphs (9) and (10) and
notwithstanding any other provision of this
Act, any other Federal law, or the law of any
State, no person shall be stayed or prohibited
from exercising--
``(i) any right such person has to
cause the termination, liquidation, or
acceleration of any qualified financial
contract with a regulated entity that
arises upon the appointment of the
Agency as receiver for such regulated
entity at any time after such
appointment;
``(ii) any right under any security
agreement or arrangement or other
credit enhancement relating to one or
more qualified financial contracts
described in clause (i); or
``(iii) any right to offset or net
out any termination value, payment
amount, or other transfer obligation
arising under or in connection with 1
or more contracts and agreements
described in clause (i), including any
master agreement for such contracts or
agreements.
``(B) Applicability of other provisions.--
Paragraph (10) of subsection (b) shall apply in
the case of any judicial action or proceeding
brought against any receiver referred to under
subparagraph (A), or the regulated entity for
which such receiver was appointed, by any party
to a contract or agreement described under
subparagraph (A)(i) with such regulated entity.
``(C) Certain transfers not avoidable.--
``(i) In general.--Notwithstanding
paragraph (11) or any other Federal or
State laws relating to the avoidance of
preferential or fraudulent transfers,
the Agency, whether acting as such or
as conservator or receiver of a
regulated entity, may not avoid any
transfer of money or other property in
connection with any qualified financial
contract with a regulated entity.
``(ii) Exception for certain
transfers.--Clause (i) shall not apply
to any transfer of money or other
property in connection with any
qualified financial contract with a
regulated entity if the Agency
determines that the transferee had
actual intent to hinder, delay, or
defraud such regulated entity, the
creditors of such regulated entity, or
any conservator or receiver appointed
for such regulated entity.
``(D) Certain contracts and agreements
defined.--In this subsection:
``(i) Qualified financial contract.--
The term `qualified financial contract'
means any securities contract,
commodity contract, forward contract,
repurchase agreement, swap agreement,
and any similar agreement that the
Agency determines by regulation,
resolution, or order to be a qualified
financial contract for purposes of this
paragraph.
``(ii) Securities contract.--The term
`securities contract'--
``(I) means a contract for
the purchase, sale, or loan of
a security, a certificate of
deposit, a mortgage loan, or
any interest in a mortgage
loan, a group or index of
securities, certificates of
deposit, or mortgage loans or
interests therein (including
any interest therein or based
on the value thereof) or any
option on any of the foregoing,
including any option to
purchase or sell any such
security, certificate of
deposit, mortgage loan,
interest, group or index, or
option, and including any
repurchase or reverse
repurchase transaction on any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option;
``(II) does not include any
purchase, sale, or repurchase
obligation under a
participation in a commercial
mortgage loan unless the Agency
determines by regulation,
resolution, or order to include
any such agreement within the
meaning of such term;
``(III) means any option
entered into on a national
securities exchange relating to
foreign currencies;
``(IV) means the guarantee by
or to any securities clearing
agency of any settlement of
cash, securities, certificates
of deposit, mortgage loans or
interests therein, group or
index of securities,
certificates of deposit, or
mortgage loans or interests
therein (including any interest
therein or based on the value
thereof) or option on any of
the foregoing, including any
option to purchase or sell any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option;
``(V) means any margin loan;
``(VI) means any other
agreement or transaction that
is similar to any agreement or
transaction referred to in this
clause;
``(VII) means any combination
of the agreements or
transactions referred to in
this clause;
``(VIII) means any option to
enter into any agreement or
transaction referred to in this
clause;
``(IX) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), (IV), (V), (VI), (VII),
or (VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
securities contract under this
clause, except that the master
agreement shall be considered
to be a securities contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (III), (IV),
(V), (VI), (VII), or (VIII);
and
``(X) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in this
clause, including any guarantee
or reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.
``(iii) Commodity contract.--The term
`commodity contract' means--
``(I) with respect to a
futures commission merchant, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade;
``(II) with respect to a
foreign futures commission
merchant, a foreign future;
``(III) with respect to a
leverage transaction merchant,
a leverage transaction;
``(IV) with respect to a
clearing organization, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade that is cleared
by such clearing organization,
or commodity option traded on,
or subject to the rules of, a
contract market or board of
trade that is cleared by such
clearing organization;
``(V) with respect to a
commodity options dealer, a
commodity option;
``(VI) any other agreement or
transaction that is similar to
any agreement or transaction
referred to in this clause;
``(VII) any combination of
the agreements or transactions
referred to in this clause;
``(VIII) any option to enter
into any agreement or
transaction referred to in this
clause;
``(IX) a master agreement
that provides for an agreement
or transaction referred to in
subclause (I), (II), (III),
(IV), (V), (VI), (VII), or
(VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
commodity contract under this
clause, except that the master
agreement shall be considered
to be a commodity contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (II), (III),
(IV), (V), (VI), (VII), or
(VIII); or
``(X) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in this clause,
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.
``(iv) Forward contract.--The term
`forward contract' means--
``(I) a contract (other than
a commodity contract) for the
purchase, sale, or transfer of
a commodity or any similar
good, article, service, right,
or interest which is presently
or in the future becomes the
subject of dealing in the
forward contract trade, or
product or byproduct thereof,
with a maturity date more than
2 days after the date the
contract is entered into,
including, a repurchase
transaction, reverse repurchase
transaction, consignment,
lease, swap, hedge transaction,
deposit, loan, option,
allocated transaction,
unallocated transaction, or any
other similar agreement;
``(II) any combination of
agreements or transactions
referred to in subclauses (I)
and (III);
``(III) any option to enter
into any agreement or
transaction referred to in
subclause (I) or (II);
``(IV) a master agreement
that provides for an agreement
or transaction referred to in
subclauses (I), (II), or (III),
together with all supplements
to any such master agreement,
without regard to whether the
master agreement provides for
an agreement or transaction
that is not a forward contract
under this clause, except that
the master agreement shall be
considered to be a forward
contract under this clause only
with respect to each agreement
or transaction under the master
agreement that is referred to
in subclause (I), (II), or
(III); or
``(V) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in subclause (I),
(II), (III), or (IV), including
any guarantee or reimbursement
obligation in connection with
any agreement or transaction
referred to in any such
subclause.
``(v) Repurchase agreement.--The term
`repurchase agreement' (which
definition also applies to a reverse
repurchase agreement)--
``(I) means an agreement,
including related terms, which
provides for the transfer of
one or more certificates of
deposit, mortgage-related
securities (as such term is
defined in the Securities
Exchange Act of 1934), mortgage
loans, interests in mortgage-
related securities or mortgage
loans, eligible bankers'
acceptances, qualified foreign
government securities or
securities that are direct
obligations of, or that are
fully guaranteed by, the United
States or any agency of the
United States against the
transfer of funds by the
transferee of such certificates
of deposit, eligible bankers'
acceptances, securities,
mortgage loans, or interests
with a simultaneous agreement
by such transferee to transfer
to the transferor thereof
certificates of deposit,
eligible bankers' acceptances,
securities, mortgage loans, or
interests as described above,
at a date certain not later
than 1 year after such
transfers or on demand, against
the transfer of funds, or any
other similar agreement;
``(II) does not include any
repurchase obligation under a
participation in a commercial
mortgage loan unless the Agency
determines by regulation,
resolution, or order to include
any such participation within
the meaning of such term;
``(III) means any combination
of agreements or transactions
referred to in subclauses (I)
and (IV);
``(IV) means any option to
enter into any agreement or
transaction referred to in
subclause (I) or (III);
``(V) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), or (IV), together with
all supplements to any such
master agreement, without
regard to whether the master
agreement provides for an
agreement or transaction that
is not a repurchase agreement
under this clause, except that
the master agreement shall be
considered to be a repurchase
agreement under this subclause
only with respect to each
agreement or transaction under
the master agreement that is
referred to in subclause (I),
(III), or (IV); and
``(VI) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in
subclause (I), (III), (IV), or
(V), including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
any such subclause.
For purposes of this clause, the term
`qualified foreign government security'
means a security that is a direct
obligation of, or that is fully
guaranteed by, the central government
of a member of the Organization for
Economic Cooperation and Development
(as determined by regulation or order
adopted by the appropriate Federal
banking authority).
``(vi) Swap agreement.--The term
`swap agreement' means--
``(I) any agreement,
including the terms and
conditions incorporated by
reference in any such
agreement, which is an interest
rate swap, option, future, or
forward agreement, including a
rate floor, rate cap, rate
collar, cross-currency rate
swap, and basis swap; a spot,
same day-tomorrow, tomorrow-
next, forward, or other foreign
exchange or precious metals
agreement; a currency swap,
option, future, or forward
agreement; an equity index or
equity swap, option, future, or
forward agreement; a debt index
or debt swap, option, future,
or forward agreement; a total
return, credit spread or credit
swap, option, future, or
forward agreement; a commodity
index or commodity swap,
option, future, or forward
agreement; or a weather swap,
weather derivative, or weather
option;
``(II) any agreement or
transaction that is similar to
any other agreement or
transaction referred to in this
clause and that is of a type
that has been, is presently, or
in the future becomes, the
subject of recurrent dealings
in the swap markets (including
terms and conditions
incorporated by reference in
such agreement) and that is a
forward, swap, future, or
option on one or more rates,
currencies, commodities, equity
securities or other equity
instruments, debt securities or
other debt instruments,
quantitative measures
associated with an occurrence,
extent of an occurrence, or
contingency associated with a
financial, commercial, or
economic consequence, or
economic or financial indices
or measures of economic or
financial risk or value;
``(III) any combination of
agreements or transactions
referred to in this clause;
``(IV) any option to enter
into any agreement or
transaction referred to in this
clause;
``(V) a master agreement that
provides for an agreement or
transaction referred to in
subclause (I), (II), (III), or
(IV), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
contains an agreement or
transaction that is not a swap
agreement under this clause,
except that the master
agreement shall be considered
to be a swap agreement under
this clause only with respect
to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (II), (III),
or (IV); and
``(VI) any security agreement
or arrangement or other credit
enhancement related to any
agreements or transactions
referred to in subclause (I),
(II), (III), (IV), or (V),
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
any such subclause.
Such term is applicable for purposes of
this subsection only and shall not be
construed or applied so as to challenge
or affect the characterization,
definition, or treatment of any swap
agreement under any other statute,
regulation, or rule, including the
Securities Act of 1933, the Securities
Exchange Act of 1934, the Public
Utility Holding Company Act of 1935,
the Trust Indenture Act of 1939, the
Investment Company Act of 1940, the
Investment Advisers Act of 1940, the
Securities Investor Protection Act of
1970, the Commodity Exchange Act, the
Gramm-Leach-Bliley Act, and the Legal
Certainty for Bank Products Act of
2000.
``(vii) Treatment of master agreement
as one agreement.--Any master agreement
for any contract or agreement described
in any preceding clause of this
subparagraph (or any master agreement
for such master agreement or
agreements), together with all
supplements to such master agreement,
shall be treated as a single agreement
and a single qualified financial
contract. If a master agreement
contains provisions relating to
agreements or transactions that are not
themselves qualified financial
contracts, the master agreement shall
be deemed to be a qualified financial
contract only with respect to those
transactions that are themselves
qualified financial contracts.
``(viii) Transfer.--The term
`transfer' means every mode, direct or
indirect, absolute or conditional,
voluntary or involuntary, of disposing
of or parting with property or with an
interest in property, including
retention of title as a security
interest and foreclosure of the
regulated entity's equity of
redemption.
``(E) Certain protections in event of
appointment of conservator.--Notwithstanding
any other provision of this Act (other than
paragraph (13) of this subsection), any other
Federal law, or the law of any State, no person
shall be stayed or prohibited from exercising--
``(i) any right such person has to
cause the termination, liquidation, or
acceleration of any qualified financial
contract with a regulated entity in a
conservatorship based upon a default
under such financial contract which is
enforceable under applicable
noninsolvency law;
``(ii) any right under any security
agreement or arrangement or other
credit enhancement relating to one or
more such qualified financial
contracts; or
``(iii) any right to offset or net
out any termination values, payment
amounts, or other transfer obligations
arising under or in connection with
such qualified financial contracts.
``(F) Clarification.--No provision of law
shall be construed as limiting the right or
power of the Agency, or authorizing any court
or agency to limit or delay, in any manner, the
right or power of the Agency to transfer any
qualified financial contract in accordance with
paragraphs (9) and (10) of this subsection or
to disaffirm or repudiate any such contract in
accordance with subsection (d)(1) of this
section.
``(G) Walkaway clauses not effective.--
``(i) In general.--Notwithstanding
the provisions of subparagraphs (A) and
(E), and sections 403 and 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, no walkaway
clause shall be enforceable in a
qualified financial contract of a
regulated entity in default.
``(ii) Walkaway clause defined.--For
purposes of this subparagraph, the term
`walkaway clause' means a provision in
a qualified financial contract that,
after calculation of a value of a
party's position or an amount due to or
from 1 of the parties in accordance
with its terms upon termination,
liquidation, or acceleration of the
qualified financial contract, either
does not create a payment obligation of
a party or extinguishes a payment
obligation of a party in whole or in
part solely because of such party's
status as a nondefaulting party.
``(9) Transfer of qualified financial contracts.--In
making any transfer of assets or liabilities of a
regulated entity in default which includes any
qualified financial contract, the conservator or
receiver for such regulated entity shall either--
``(A) transfer to 1 person--
``(i) all qualified financial
contracts between any person (or any
affiliate of such person) and the
regulated entity in default;
``(ii) all claims of such person (or
any affiliate of such person) against
such regulated entity under any such
contract (other than any claim which,
under the terms of any such contract,
is subordinated to the claims of
general unsecured creditors of such
regulated entity);
``(iii) all claims of such regulated
entity against such person (or any
affiliate of such person) under any
such contract; and
``(iv) all property securing or any
other credit enhancement for any
contract described in clause (i) or any
claim described in clause (ii) or (iii)
under any such contract; or
``(B) transfer none of the financial
contracts, claims, or property referred to
under subparagraph (A) (with respect to such
person and any affiliate of such person).
``(10) Notification of transfer.--
``(A) In general.--If--
``(i) the conservator or receiver for
a regulated entity in default makes any
transfer of the assets and liabilities
of such regulated entity, and
``(ii) the transfer includes any
qualified financial contract,
the conservator or receiver shall notify any
person who is a party to any such contract of
such transfer by 5:00 p.m. (eastern time) on
the business day following the date of the
appointment of the receiver in the case of a
receivership, or the business day following
such transfer in the case of a conservatorship.
``(B) Certain rights not enforceable.--
``(i) Receivership.--A person who is
a party to a qualified financial
contract with a regulated entity may
not exercise any right that such person
has to terminate, liquidate, or net
such contract under paragraph (8)(A) of
this subsection or section 403 or 404
of the Federal Deposit Insurance
Corporation Improvement Act of 1991,
solely by reason of or incidental to
the appointment of a receiver for the
regulated entity (or the insolvency or
financial condition of the regulated
entity for which the receiver has been
appointed)--
``(I) until 5:00 p.m.
(eastern time) on the business
day following the date of the
appointment of the receiver; or
``(II) after the person has
received notice that the
contract has been transferred
pursuant to paragraph (9)(A).
``(ii) Conservatorship.--A person who
is a party to a qualified financial
contract with a regulated entity may
not exercise any right that such person
has to terminate, liquidate, or net
such contract under paragraph (8)(E) of
this subsection or section 403 or 404
of the Federal Deposit Insurance
Corporation Improvement Act of 1991,
solely by reason of or incidental to
the appointment of a conservator for
the regulated entity (or the insolvency
or financial condition of the regulated
entity for which the conservator has
been appointed).
``(iii) Notice.--For purposes of this
paragraph, the Agency as receiver or
conservator of a regulated entity shall
be deemed to have notified a person who
is a party to a qualified financial
contract with such regulated entity if
the Agency has taken steps reasonably
calculated to provide notice to such
person by the time specified in
subparagraph (A).
``(C) Business day defined.--For purposes of
this paragraph, the term `business day' means
any day other than any Saturday, Sunday, or any
day on which either the New York Stock Exchange
or the Federal Reserve Bank of New York is
closed.
``(11) Disaffirmance or repudiation of qualified
financial contracts.--In exercising the rights of
disaffirmance or repudiation of a conservator or
receiver with respect to any qualified financial
contract to which a regulated entity is a party, the
conservator or receiver for such institution shall
either--
``(A) disaffirm or repudiate all qualified
financial contracts between--
``(i) any person or any affiliate of
such person; and
``(ii) the regulated entity in
default; or
``(B) disaffirm or repudiate none of the
qualified financial contracts referred to in
subparagraph (A) (with respect to such person
or any affiliate of such person).
``(12) Certain security interests not avoidable.--No
provision of this subsection shall be construed as
permitting the avoidance of any legally enforceable or
perfected security interest in any of the assets of any
regulated entity, except where such an interest is
taken in contemplation of the insolvency of the
regulated entity, or with the intent to hinder, delay,
or defraud the regulated entity or the creditors of
such regulated entity.
``(13) Authority to enforce contracts.--
``(A) In general.--Notwithstanding any
provision of a contract providing for
termination, default, acceleration, or exercise
of rights upon, or solely by reason of,
insolvency or the appointment of a conservator
or receiver, the conservator or receiver may
enforce any contract or regulated entity bond
entered into by the regulated entity.
``(B) Certain rights not affected.--No
provision of this paragraph may be construed as
impairing or affecting any right of the
conservator or receiver to enforce or recover
under a director's or officer's liability
insurance contract or surety bond under other
applicable law.
``(C) Consent requirement.--
``(i) In general.--Except as
otherwise provided under this section,
no person may exercise any right or
power to terminate, accelerate, or
declare a default under any contract to
which a regulated entity is a party, or
to obtain possession of or exercise
control over any property of the
regulated entity, or affect any
contractual rights of the regulated
entity, without the consent of the
conservator or receiver, as
appropriate, for a period of--
``(I) 45 days after the date
of appointment of a
conservator; or
``(II) 90 days after the date
of appointment of a receiver.
``(ii) Exceptions.--This paragraph
shall--
``(I) not apply to a
director's or officer's
liability insurance contract;
``(II) not apply to the
rights of parties to any
qualified financial contracts
under subsection (d)(8); and
``(III) not be construed as
permitting the conservator or
receiver to fail to comply with
otherwise enforceable
provisions of such contracts.
``(14) Savings clause.--The meanings of terms used in
this subsection are applicable for purposes of this
subsection only, and shall not be construed or applied
so as to challenge or affect the characterization,
definition, or treatment of any similar terms under any
other statute, regulation, or rule, including the
Gramm-Leach-Bliley Act, the Legal Certainty for Bank
Products Act of 2000, the securities laws (as that term
is defined in section 3(a)(47) of the Securities
Exchange Act of 1934), and the Commodity Exchange Act.
``(15) Exception for federal reserve and federal home
loan banks.--No provision of this subsection shall
apply with respect to--
``(A) any extension of credit from any
Federal home loan bank or Federal Reserve Bank
to any regulated entity; or
``(B) any security interest in the assets of
the regulated entity securing any such
extension of credit.
``(e) Valuation of Claims in Default.--
``(1) In general.--Notwithstanding any other
provision of Federal law or the law of any State, and
regardless of the method which the Agency determines to
utilize with respect to a regulated entity in default
or in danger of default, including transactions
authorized under subsection (i), this subsection shall
govern the rights of the creditors of such regulated
entity.
``(2) Maximum liability.--The maximum liability of
the Agency, acting as receiver or in any other
capacity, to any person having a claim against the
receiver or the regulated entity for which such
receiver is appointed shall equal the lesser of--
``(A) the amount such claimant would have
received if the Agency had liquidated the
assets and liabilities of such regulated entity
without exercising the authority of the Agency
under subsection (i) of this section; or
``(B) the amount of proceeds realized from
the performance of contracts or sale of the
assets of the regulated entity.
``(f) Limitation on Court Action.--Except as provided in this
section or at the request of the Director, no court may take
any action to restrain or affect the exercise of powers or
functions of the Agency as a conservator or a receiver.
``(g) Liability of Directors and Officers.--
``(1) In general.--A director or officer of a
regulated entity may be held personally liable for
monetary damages in any civil action by, on behalf of,
or at the request or direction of the Agency, which
action is prosecuted wholly or partially for the
benefit of the Agency--
``(A) acting as conservator or receiver of
such regulated entity, or
``(B) acting based upon a suit, claim, or
cause of action purchased from, assigned by, or
otherwise conveyed by such receiver or
conservator,
for gross negligence, including any similar conduct or
conduct that demonstrates a greater disregard of a duty
of care (than gross negligence) including intentional
tortious conduct, as such terms are defined and
determined under applicable State law.
``(2) No limitation.--Nothing in this paragraph shall
impair or affect any right of the Agency under other
applicable law.
``(h) Damages.--In any proceeding related to any claim
against a director, officer, employee, agent, attorney,
accountant, appraiser, or any other party employed by or
providing services to a regulated entity, recoverable damages
determined to result from the improvident or otherwise improper
use or investment of any assets of the regulated entity shall
include principal losses and appropriate interest.
``(i) Limited-Life Regulated Entities.--
``(1) Organization.--
``(A) Purpose.--If a regulated entity is in
default, or if the Agency anticipates that a
regulated entity will default, the Agency may
organize a limited-life regulated entity with
those powers and attributes of the regulated
entity in default or in danger of default that
the Director determines necessary, subject to
the provisions of this subsection. The Director
shall grant a temporary charter to the limited-
life regulated entity, and the limited-life
regulated entity shall operate subject to that
charter.
``(B) Authorities.--Upon the creation of a
limited-life regulated entity under
subparagraph (A), the limited-life regulated
entity may--
``(i) assume such liabilities of the
regulated entity that is in default or
in danger of default as the Agency may,
in its discretion, determine to be
appropriate, provided that the
liabilities assumed shall not exceed
the amount of assets of the limited-
life regulated entity;
``(ii) purchase such assets of the
regulated entity that is in default, or
in danger of default, as the Agency
may, in its discretion, determine to be
appropriate; and
``(iii) perform any other temporary
function which the Agency may, in its
discretion, prescribe in accordance
with this section.
``(2) Charter.--
``(A) Conditions.--The Agency may grant a
temporary charter if the Agency determines that
the continued operation of the regulated entity
in default or in danger of default is in the
best interest of the national economy and the
housing markets.
``(B) Treatment as being in default for
certain purposes.--A limited-life regulated
entity shall be treated as a regulated entity
in default at such times and for such purposes
as the Agency may, in its discretion,
determine.
``(C) Management.--A limited-life regulated
entity, upon the granting of its charter, shall
be under the management of a board of directors
consisting of not fewer than 5 nor more than 10
members appointed by the Agency.
``(D) Bylaws.--The board of directors of a
limited-life regulated entity shall adopt such
bylaws as may be approved by the Agency.
``(3) Capital stock.--No capital stock need be paid
into a limited-life regulated entity by the Agency.
``(4) Investments.--Funds of a limited-life regulated
entity shall be kept on hand in cash, invested in
obligations of the United States or obligations
guaranteed as to principal and interest by the United
States, or deposited with the Agency, or any Federal
Reserve bank.
``(5) Exempt status.--Notwithstanding any other
provision of Federal or State law, the limited-life
regulated entity, its franchise, property, and income
shall be exempt from all taxation now or hereafter
imposed by the United States, by any territory,
dependency, or possession thereof, or by any State,
county, municipality, or local taxing authority.
``(6) Winding up.--
``(A) In general.--Subject to subparagraph
(B), unless Congress authorizes the sale of the
capital stock of the limited-life regulated
entity, not later than 2 years after the date
of its organization, the Agency shall wind up
the affairs of the limited-life regulated
entity.
``(B) Extension.--The Director may, in the
discretion of the Director, extend the status
of the limited-life regulated entity for 3
additional 1-year periods.
``(7) Transfer of assets and liabilities.--
``(A) In general.--
``(i) Transfer of assets and
liabilities.--The Agency, as receiver,
may transfer any assets and liabilities
of a regulated entity in default, or in
danger of default, to the limited-life
regulated entity in accordance with
paragraph (1).
``(ii) Subsequent transfers.--At any
time after a charter is transferred to
a limited-life regulated entity, the
Agency, as receiver, may transfer any
assets and liabilities of such
regulated entity in default, or in
danger in default, as the Agency may,
in its discretion, determine to be
appropriate in accordance with
paragraph (1).
``(iii) Effective without approval.--
The transfer of any assets or
liabilities of a regulated entity in
default, or in danger of default,
transferred to a limited-life regulated
entity shall be effective without any
further approval under Federal or State
law, assignment, or consent with
respect thereto.
``(8) Proceeds.--To the extent that available
proceeds from the limited-life regulated entity exceed
amounts required to pay obligations, such proceeds may
be paid to the regulated entity in default, or in
danger of default.
``(9) Powers.--
``(A) In general.--Each limited-life
regulated entity created under this subsection
shall have all corporate powers of, and be
subject to the same provisions of law as, the
regulated entity in default or in danger of
default to which it relates, except that--
``(i) the Agency may--
``(I) remove the directors of
a limited-life regulated
entity; and
``(II) fix the compensation
of members of the board of
directors and senior
management, as determined by
the Agency in its discretion,
of a limited-life regulated
entity;
``(ii) the Agency may indemnify the
representatives for purposes of
paragraph (1)(B), and the directors,
officers, employees, and agents of a
limited-life regulated entity on such
terms as the Agency determines to be
appropriate; and
``(iii) the board of directors of a
limited-life regulated entity--
``(I) shall elect a
chairperson who may also serve
in the position of chief
executive officer, except that
such person shall not serve
either as chairperson or as
chief executive officer without
the prior approval of the
Agency; and
``(II) may appoint a chief
executive officer who is not
also the chairperson, except
that such person shall not
serve as chief executive
officer without the prior
approval of the Agency.
``(B) Stay of judicial action.--Any judicial
action to which a limited-life regulated entity
becomes a party by virtue of its acquisition of
any assets or assumption of any liabilities of
a regulated entity in default shall be stayed
from further proceedings for a period of up to
45 days at the request of the limited-life
regulated entity. Such period may be modified
upon the consent of all parties.
``(10) Obtaining of credit and incurring of debt.--
``(A) In general.--The limited-life regulated
entity may obtain unsecured credit and incur
unsecured debt in the ordinary course of
business.
``(B) Inability to obtain credit.--If the
limited-life regulated entity is unable to
obtain unsecured credit the Director may
authorize the obtaining of credit or the
incurring of debt--
``(i) with priority over any or all
administrative expenses;
``(ii) secured by a lien on property
that is not otherwise subject to a
lien; or
``(iii) secured by a junior lien on
property that is subject to a lien.
``(C) Limitations.--
``(i) In general.--The Director,
after notice and a hearing, may
authorize the obtaining of credit or
the incurring of debt secured by a
senior or equal lien on property that
is subject to a lien (other than
mortgages that collateralize the
mortgage-backed securities issued or
guaranteed by the regulated entity)
only if--
``(I) the limited-life
regulated entity is unable to
obtain such credit otherwise;
and
``(II) there is adequate
protection of the interest of
the holder of the lien on the
property which such senior or
equal lien is proposed to be
granted.
``(ii) Burden of proof.--In any
hearing under this subsection, the
Director has the burden of proof on the
issue of adequate protection.
``(D) Effect on debts and liens.--The
reversal or modification on appeal of an
authorization under this paragraph to obtain
credit or incur debt, or of a grant under this
section of a priority or a lien, does not
affect the validity of any debt so incurred, or
any priority or lien so granted, to an entity
that extended such credit in good faith,
whether or not such entity knew of the pendency
of the appeal, unless such authorization and
the incurring of such debt, or the granting of
such priority or lien, were stayed pending
appeal.
``(11) Issuance of preferred debt.--A limited-life
regulated entity may, subject to the approval of the
Director and subject to such terms and conditions as
the Director may prescribe, issue notes, bonds, or
other debt obligations of a class to which all other
debt obligations of the limited-life regulated entity
shall be subordinate in right and payment.
``(12) No federal status.--
``(A) Agency status.--A limited-life
regulated entity is not an agency,
establishment, or instrumentality of the United
States.
``(B) Employee status.--Representatives for
purposes of paragraph (1)(B), interim
directors, directors, officers, employees, or
agents of a limited-life regulated entity are
not, solely by virtue of service in any such
capacity, officers or employees of the United
States. Any employee of the Agency or of any
Federal instrumentality who serves at the
request of the Agency as a representative for
purposes of paragraph (1)(B), interim director,
director, officer, employee, or agent of a
limited-life regulated entity shall not--
``(i) solely by virtue of service in
any such capacity lose any existing
status as an officer or employee of the
United States for purposes of title 5,
United States Code, or any other
provision of law; or
``(ii) receive any salary or benefits
for service in any such capacity with
respect to a limited-life regulated
entity in addition to such salary or
benefits as are obtained through
employment with the Agency or such
Federal instrumentality.
``(13) Additional powers.--In addition to any other
powers granted under this subsection, a limited-life
regulated entity may--
``(A) extend a maturity date or change in an
interest rate or other term of outstanding
securities;
``(B) issue securities of the limited-life
regulated entity, for cash, for property, for
existing securities, or in exchange for claims
or interests, or for any other appropriate
purposes; and
``(C) take any other action not inconsistent
with this section.
``(j) Other Exemptions.--When acting as a receiver, the
following provisions shall apply with respect to the Agency:
``(1) Exemption from taxation.--The Agency, including
its franchise, its capital, reserves, and surplus, and
its income, shall be exempt from all taxation imposed
by any State, country, municipality, or local taxing
authority, except that any real property of the Agency
shall be subject to State, territorial, county,
municipal, or local taxation to the same extent
according to its value as other real property is taxed,
except that, notwithstanding the failure of any person
to challenge an assessment under State law of the value
of such property, and the tax thereon, shall be
determined as of the period for which such tax is
imposed.
``(2) Exemption from attachment and liens.--No
property of the Agency shall be subject to levy,
attachment, garnishment, foreclosure, or sale without
the consent of the Agency, nor shall any involuntary
lien attach to the property of the Agency.
``(3) Exemption from penalties and fines.--The Agency
shall not be liable for any amounts in the nature of
penalties or fines, including those arising from the
failure of any person to pay any real property,
personal property, probate, or recording tax or any
recording or filing fees when due.
``(k) Prohibition of Charter Revocation.--In no case may a
receiver appointed pursuant to this section revoke, annul, or
terminate the charter of a regulated entity.
``(l) Preservation of Bankruptcy Law .--Nothing in this Act
shall be construed to modify, impair, or supersede the
operation of any provision of title 11 of the United States
Code, or the operation of any provision of title 28 of such
Code that relates to cases under such title 11, except as
otherwise provided in section 1367(b) of this Act and except
that a regulated entity may not be a debtor under such title
11.''.
(b) Conforming Amendments.--
(1) Housing and community development act of 1992.--
Subtitle B of title XIII of the Housing and Community
Development Act of 1992 is amended by striking sections
1369 (12 U.S.C. 4619), 1369A (12 U.S.C. 4620), and
1369B (12 U.S.C. 4621).
(2) Federal home loan banks.--Section 25 of the
Federal Home Loan Bank Act (12 U.S.C. 1445) is amended
to read as follows:
``SEC. 25. SUCCESSION OF FEDERAL HOME LOAN BANKS.
``Each Federal Home Loan Bank shall have succession until it
is voluntarily merged with another Bank under this Act, or
until it is merged, reorganized, rehabilitated, liquidated, or
otherwise wound up by the Director in accordance with the
provisions of section 1367 of the Housing and Community
Development Act of 1992, or by further Act of Congress.''.
SEC. 349. CONFORMING AMENDMENTS.
Title XIII of the Housing and Community Development Act of
1992, as amended by the preceding provisions of this title, is
further amended--
(1) in sections 1365 (12 U.S.C. 4615) through 1369D
(12 U.S.C. 4623), but not including section 1367 (12
U.S.C. 4617) as amended by section 349 of this title--
(A) by striking ``An enterprise'' each place
such term appears and inserting ``A regulated
entity'';
(B) by striking ``an enterprise'' each place
such term appears and inserting ``a regulated
entity''; and
(C) by striking ``the enterprise'' each place
such term appears and inserting ``the regulated
entity'';
(2) in section 1366 (12 U.S.C. 4616)--
(A) in subsection (b)(7), by striking
``section 1369 (excluding subsection (a)(1) and
(2))'' and inserting ``section 1367''; and
(B) in subsection (d), by striking ``the
enterprises'' and inserting ``the regulated
entities'';
(3) in section 1368(d) (12 U.S.C. 4618(d)), by
striking ``Committee on Banking, Finance and Urban
Affairs'' and inserting ``Committee on Financial
Services'';
(4) in section 1369C (12 U.S.C. 4622)--
(A) in subsection (a)(4), by striking
``activities (including existing and new
programs)'' and inserting ``activities,
services, undertakings, and offerings
(including existing and new products (as such
term is defined in section 1321(f))''; and
(B) in subsection (c), by striking ``any
enterprise'' and inserting ``any regulated
entity''; and
(5) in subsections (a) and (d) of section 1369D, by
striking ``section 1366 or 1367 or action under section
1369)'' each place such phrase appears and inserting
``section 1367)''.
CHAPTER 4--ENFORCEMENT ACTIONS
SEC. 351. CEASE-AND-DESIST PROCEEDINGS.
Section 1371 of the Housing and Community Development Act of
1992 (12 U.S.C. 4631) is amended--
(1) by striking subsections (a) and (b) and inserting
the following new subsections:
``(a) Issuance for Unsafe or Unsound Practices and Violations
of Rules or Laws.--If, in the opinion of the Director, a
regulated entity or any regulated entity-affiliated party is
engaging or has engaged, or the Director has reasonable cause
to believe that the regulated entity or any regulated entity-
affiliated party is about to engage, in an unsafe or unsound
practice in conducting the business of the regulated entity or
is violating or has violated, or the Director has reasonable
cause to believe that the regulated entity or any regulated
entity-affiliated party is about to violate, a law, rule, or
regulation, or any condition imposed in writing by the Director
in connection with the granting of any application or other
request by the regulated entity or any written agreement
entered into with the Director, the Director may issue and
serve upon the regulated entity or such party a notice of
charges in respect thereof. The Director may not, pursuant to
this section, enforce compliance with any housing goal
established under subpart B of part 2 of subtitle A of this
title, with section 1336 or 1337 of this title, with subsection
(m) or (n) of section 309 of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1723a(m), (n)), with
subsection (e) or (f) of section 307 of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1456(e), (f)), or with
paragraph (5) of section 10(j) of the Federal Home Loan Bank
Act (12 U.S.C. 1430(j)).
``(b) Issuance for Unsatisfactory Rating.--If a regulated
entity receives, in its most recent report of examination, a
less-than-satisfactory rating for asset quality, management,
earnings, or liquidity, the Director may (if the deficiency is
not corrected) deem the regulated entity to be engaging in an
unsafe or unsound practice for purposes of this subsection.'';
(2) in subsection (c)(2), by striking ``enterprise,
executive officer, or director'' and inserting
``regulated entity or regulated entity-affiliated
party''; and
(3) in subsection (d)--
(A) in the matter preceding paragraph (1), by
striking ``enterprise, executive officer, or
director'' and inserting ``regulated entity or
regulated entity-affiliated party'';
(B) in paragraph (1)--
(i) by striking ``an executive
officer or a director'' and inserting
``a regulated entity affiliated
party''; and
(ii) by inserting ``(including
reimbursement of compensation under
section 1318)'' after
``reimbursement'';
(C) in paragraph (6), by striking ``and'' at
the end;
(D) by redesignating paragraph (7) as
paragraph (8); and
(E) by inserting after paragraph (6) the
following new paragraph:
``(7) to effect an attachment on a regulated entity
or regulated entity-affiliated party subject to an
order under this section or section 1372; and''.
SEC. 352. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.
Section 1372 of the Housing and Community Development Act of
1992 (12 U.S.C. 4632) is amended--
(1) by striking subsection (a) and inserting the
following new subsection:
``(a) Grounds for Issuance.--Whenever the Director determines
that the violation or threatened violation or the unsafe or
unsound practice or practices specified in the notice of
charges served upon the regulated entity or any regulated
entity-affiliated party pursuant to section 1371(a), or the
continuation thereof, is likely to cause insolvency or
significant dissipation of assets or earnings of the regulated
entity, or is likely to weaken the condition of the regulated
entity prior to the completion of the proceedings conducted
pursuant to sections 1371 and 1373, the Director may issue a
temporary order requiring the regulated entity or such party to
cease and desist from any such violation or practice and to
take affirmative action to prevent or remedy such insolvency,
dissipation, condition, or prejudice pending completion of such
proceedings. Such order may include any requirement authorized
under section 1371(d).'';
(2) in subsection (b), by striking ``enterprise,
executive officer, or director'' and inserting
``regulated entity or regulated entity-affiliated
party'';
(3) in subsection (d)--
(A) by striking ``An enterprise, executive
officer, or director'' and inserting ``A
regulated entity or regulated entity-affiliated
party''; and
(B) by striking ``the enterprise, executive
officer, or director'' and inserting ``the
regulated entity or regulated entity-affiliated
party''; and
(4) by striking subsection (e) and in inserting the
following new subsection:
``(e) Enforcement.--In the case of violation or threatened
violation of, or failure to obey, a temporary cease-and-desist
order issued pursuant to this section, the Director may apply
to the United States District Court for the District of
Columbia or the United States district court within the
jurisdiction of which the headquarters of the regulated entity
is located, for an injunction to enforce such order, and, if
the court determines that there has been such violation or
threatened violation or failure to obey, it shall be the duty
of the court to issue such injunction.''.
SEC. 353. PREJUDGMENT ATTACHMENT.
The Housing and Community Development Act of 1992 is amended
by inserting after section 1375 (12 U.S.C. 4635) the following
new section:
``SEC. 1375A. PREJUDGMENT ATTACHMENT.
``(a) In General.--In any action brought pursuant to this
title, or in actions brought in aid of, or to enforce an order
in, any administrative or other civil action for money damages,
restitution, or civil money penalties brought pursuant to this
title, the court may, upon application of the Director or
Attorney General, as applicable, issue a restraining order
that--
``(1) prohibits any person subject to the proceeding
from withdrawing, transferring, removing, dissipating,
or disposing of any funds, assets or other property;
and
``(2) appoints a person on a temporary basis to
administer the restraining order.
``(b) Standard.--
``(1) Showing.--Rule 65 of the Federal Rules of Civil
Procedure shall apply with respect to any proceeding
under subsection (a) without regard to the requirement
of such rule that the applicant show that the injury,
loss, or damage is irreparable and immediate.
``(2) State proceeding.--If, in the case of any
proceeding in a State court, the court determines that
rules of civil procedure available under the laws of
such State provide substantially similar protections to
a party's right to due process as Rule 65 (as modified
with respect to such proceeding by paragraph (1)), the
relief sought under subsection (a) may be requested
under the laws of such State.''.
SEC. 354. ENFORCEMENT AND JURISDICTION.
Section 1375 of the Housing and Community Development Act of
1992 (12 U.S.C. 4635) is amended--
(1) by striking subsection (a) and inserting the
following new subsection:
``(a) Enforcement.--The Director may, in the discretion of
the Director, apply to the United States District Court for the
District of Columbia, or the United States district court
within the jurisdiction of which the headquarters of the
regulated entity is located, for the enforcement of any
effective and outstanding notice or order issued under this
subtitle or subtitle B, or request that the Attorney General of
the United States bring such an action. Such court shall have
jurisdiction and power to order and require compliance with
such notice or order.''; and
(2) in subsection (b), by striking ``or 1376'' and
inserting ``1376, or 1377''.
SEC. 355. CIVIL MONEY PENALTIES.
Section 1376 of the Housing and Community Development Act of
1992 (12 U.S.C. 4636) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by
striking ``, or any executive officer or
director'' and inserting ``or any regulated-
entity affiliated party''; and
(B) in paragraph (1)--
(i) by striking ``the Federal
National Mortgage Association Charter
Act, the Federal Home Loan Mortgage
Corporation Act'' and inserting ``any
provision of any of the authorizing
statutes'';
(ii) by striking ``or Act'' and
inserting ``or statute'';
(iii) by striking ``or subsection''
and inserting ``, subsection''; and
(iv) by inserting ``, or paragraph
(5) or (12) of section 10(j) of the
Federal Home Loan Bank Act'' before the
semicolon at the end;
(2) by striking subsection (b) and inserting the
following new subsection:
``(b) Amount of Penalty.--
``(1) First tier.--Any regulated entity which, or any
regulated entity-affiliated party who--
``(A) violates any provision of this title,
any provision of any of the authorizing
statutes, or any order, condition, rule, or
regulation under any such title or statute,
except that the Director may not, pursuant to
this section, enforce compliance with any
housing goal established under subpart B of
part 2 of subtitle A of this title, with
section 1336 or 1337 of this title, with
subsection (m) or (n) of section 309 of the
Federal National Mortgage Association Charter
Act (12 U.S.C. 1723a(m), (n)), with subsection
(e) or (f) of section 307 of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C.
1456(e), (f)), or with paragraph (5) or (12) of
section 10(j) of the Federal Home Loan Bank
Act;
``(B) violates any final or temporary order
or notice issued pursuant to this title;
``(C) violates any condition imposed in
writing by the Director in connection with the
grant of any application or other request by
such regulated entity; or
``(D) violates any written agreement between
the regulated entity and the Director,
shall forfeit and pay a civil money penalty of not more
than $10,000 for each day during which such violation
continues.
``(2) Second tier.--Notwithstanding paragraph (1)--
``(A) if a regulated entity, or a regulated
entity-affiliated party--
``(i) commits any violation described
in any subparagraph of paragraph (1);
``(ii) recklessly engages in an
unsafe or unsound practice in
conducting the affairs of such
regulated entity; or
``(iii) breaches any fiduciary duty;
and
``(B) the violation, practice, or breach--
``(i) is part of a pattern of
misconduct;
``(ii) causes or is likely to cause
more than a minimal loss to such
regulated entity; or
``(iii) results in pecuniary gain or
other benefit to such party,
the regulated entity or regulated entity-affiliated
party shall forfeit and pay a civil penalty of not more
than $50,000 for each day during which such violation,
practice, or breach continues.
``(3) Third tier.--Notwithstanding paragraphs (1) and
(2), any regulated entity which, or any regulated
entity-affiliated party who--
``(A) knowingly--
``(i) commits any violation or
engages in any conduct described in any
subparagraph of paragraph (1);
``(ii) engages in any unsafe or
unsound practice in conducting the
affairs of such regulated entity; or
``(iii) breaches any fiduciary duty;
and
``(B) knowingly or recklessly causes a
substantial loss to such regulated entity or a
substantial pecuniary gain or other benefit to
such party by reason of such violation,
practice, or breach,
shall forfeit and pay a civil penalty in an amount not
to exceed the applicable maximum amount determined
under paragraph (4) for each day during which such
violation, practice, or breach continues.
``(4) Maximum amounts of penalties for any violation
described in paragraph (3).--The maximum daily amount
of any civil penalty which may be assessed pursuant to
paragraph (3) for any violation, practice, or breach
described in such paragraph is--
``(A) in the case of any person other than a
regulated entity, an amount not to exceed
$2,000,000; and
``(B) in the case of any regulated entity,
$2,000,000.'';
(3) in subsection (c)(1)(B), by striking
``enterprise, executive officer, or director'' and
inserting ``regulated entity or regulated entity-
affiliated party'';
(4) in subsection (d), by striking the first sentence
and inserting the following: ``If a regulated entity or
regulated entity-affiliated party fails to comply with
an order of the Director imposing a civil money penalty
under this section, after the order is no longer
subject to review as provided under subsection (c)(1)
and section 1374, the Director may, in the discretion
of the Director, bring an action in the United States
District Court for the District of Columbia, or the
United States district court within the jurisdiction of
which the headquarters of the regulated entity is
located, to obtain a monetary judgment against the
regulated entity or regulated entity affiliated party
and such other relief as may be available, or request
that the Attorney General of the United States bring
such an action.''; and
(5) in subsection (g), by striking ``subsection
(b)(3)'' and inserting ``this section, unless
authorized by the Director by rule, regulation, or
order''.
SEC. 356. REMOVAL AND PROHIBITION AUTHORITY.
(a) In General.--Subtitle C of title XIII of the Housing and
Community Development Act of 1992 is amended--
(1) by redesignating sections 1377, 1378, 1379,
1379A, and 1379B (12 U.S.C. 4637-41) as sections 1379,
1379A, 1379B, 1379C, and 1379D, respectively; and
(2) by inserting after section 1376 (12 U.S.C. 4636)
the following new section:
``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.
``(a) Authority To Issue Order.--Whenever the Director
determines that--
``(1) any regulated entity-affiliated party has,
directly or indirectly--
``(A) violated--
``(i) any law or regulation;
``(ii) any cease-and-desist order
which has become final;
``(iii) any condition imposed in
writing by the Director in connection
with the grant of any application or
other request by such regulated entity;
or
``(iv) any written agreement between
such regulated entity and the Director;
``(B) engaged or participated in any unsafe
or unsound practice in connection with any
regulated entity; or
``(C) committed or engaged in any act,
omission, or practice which constitutes a
breach of such party's fiduciary duty;
``(2) by reason of the violation, practice, or breach
described in any subparagraph of paragraph (1)--
``(A) such regulated entity has suffered or
will probably suffer financial loss or other
damage; or
``(B) such party has received financial gain
or other benefit by reason of such violation,
practice, or breach; and
``(3) such violation, practice, or breach--
``(A) involves personal dishonesty on the
part of such party; or
``(B) demonstrates willful or continuing
disregard by such party for the safety or
soundness of such regulated entity, the
Director may serve upon such party a written
notice of the Director's intention to remove
such party from office or to prohibit any
further participation by such party, in any
manner, in the conduct of the affairs of any
regulated entity.
``(b) Suspension Order.--
``(1) Suspension or prohibition authority.--If the
Director serves written notice under subsection (a) to
any regulated entity-affiliated party of the Director's
intention to issue an order under such subsection, the
Director may--
``(A) suspend such party from office or
prohibit such party from further participation
in any manner in the conduct of the affairs of
the regulated entity, if the Director--
``(i) determines that such action is
necessary for the protection of the
regulated entity; and
``(ii) serves such party with written
notice of the suspension order; and
``(B) prohibit the regulated entity from
releasing to or on behalf of the regulated
entity-affiliated party any compensation or
other payment of money or other thing of
current or potential value in connection with
any resignation, removal, retirement, or other
termination of employment or office of the
party.
``(2) Effective period.--Any suspension order issued
under this subsection--
``(A) shall become effective upon service;
and
``(B) unless a court issues a stay of such
order under subsection (g) of this section,
shall remain in effect and enforceable until--
``(i) the date the Director dismisses
the charges contained in the notice
served under subsection (a) with
respect to such party; or
``(ii) the effective date of an order
issued by the Director to such party
under subsection (a).
``(3) Copy of order.--If the Director issues a
suspension order under this subsection to any regulated
entity-affiliated party, the Director shall serve a
copy of such order on any regulated entity with which
such party is affiliated at the time such order is
issued.
``(c) Notice, Hearing, and Order.--A notice of intention to
remove a regulated entity-affiliated party from office or to
prohibit such party from participating in the conduct of the
affairs of a regulated entity shall contain a statement of the
facts constituting grounds for such action, and shall fix a
time and place at which a hearing will be held on such action.
Such hearing shall be fixed for a date not earlier than 30 days
nor later than 60 days after the date of service of such
notice, unless an earlier or a later date is set by the
Director at the request of (1) such party, and for good cause
shown, or (2) the Attorney General of the United States. Unless
such party shall appear at the hearing in person or by a duly
authorized representative, such party shall be deemed to have
consented to the issuance of an order of such removal or
prohibition. In the event of such consent, or if upon the
record made at any such hearing the Director shall find that
any of the grounds specified in such notice have been
established, the Director may issue such orders of suspension
or removal from office, or prohibition from participation in
the conduct of the affairs of the regulated entity, as it may
deem appropriate, together with an order prohibiting
compensation described in subsection (b)(1)(B). Any such order
shall become effective at the expiration of 30 days after
service upon such regulated entity and such party (except in
the case of an order issued upon consent, which shall become
effective at the time specified therein). Such order shall
remain effective and enforceable except to such extent as it is
stayed, modified, terminated, or set aside by action of the
Director or a reviewing court.
``(d) Prohibition of Certain Specific Activities.--Any person
subject to an order issued under this section shall not--
``(1) participate in any manner in the conduct of the
affairs of any regulated entity;
``(2) solicit, procure, transfer, attempt to
transfer, vote, or attempt to vote any proxy, consent,
or authorization with respect to any voting rights in
any regulated entity;
``(3) violate any voting agreement previously
approved by the Director; or
``(4) vote for a director, or serve or act as a
regulated entity-affiliated party.
``(e) Industry-Wide Prohibition.--
``(1) In general.--Except as provided in paragraph
(2), any person who, pursuant to an order issued under
this section, has been removed or suspended from office
in a regulated entity or prohibited from participating
in the conduct of the affairs of a regulated entity may
not, while such order is in effect, continue or
commence to hold any office in, or participate in any
manner in the conduct of the affairs of, any regulated
entity.
``(2) Exception if director provides written
consent.--If, on or after the date an order is issued
under this section which removes or suspends from
office any regulated entity-affiliated party or
prohibits such party from participating in the conduct
of the affairs of a regulated entity, such party
receives the written consent of the Director, the order
shall, to the extent of such consent, cease to apply to
such party with respect to the regulated entity
described in the written consent. If the Director
grants such a written consent, it shall publicly
disclose such consent.
``(3) Violation of paragraph (1) treated as violation
of order.--Any violation of paragraph (1) by any person
who is subject to an order described in such subsection
shall be treated as a violation of the order.
``(f) Applicability.--This section shall only apply to a
person who is an individual, unless the Director specifically
finds that it should apply to a corporation, firm, or other
business enterprise.
``(g) Stay of Suspension and Prohibition of Regulated Entity-
Affiliated Party.--Within 10 days after any regulated entity-
affiliated party has been suspended from office and/or
prohibited from participation in the conduct of the affairs of
a regulated entity under this section, such party may apply to
the United States District Court for the District of Columbia,
or the United States district court for the judicial district
in which the headquarters of the regulated entity is located,
for a stay of such suspension and/or prohibition and any
prohibition under subsection (b)(1)(B) pending the completion
of the administrative proceedings pursuant to the notice served
upon such party under this section, and such court shall have
jurisdiction to stay such suspension and/or prohibition.
``(h) Suspension or Removal of Regulated Entity-Affiliated
Party Charged With Felony.--
``(1) Suspension or prohibition.--
``(A) In general.--Whenever any regulated
entity-affiliated party is charged in any
information, indictment, or complaint, with the
commission of or participation in a crime
involving dishonesty or breach of trust which
is punishable by imprisonment for a term
exceeding one year under State or Federal law,
the Director may, if continued service or
participation by such party may pose a threat
to the regulated entity or impair public
confidence in the regulated entity, by written
notice served upon such party--
``(i) suspend such party from office
or prohibit such party from further
participation in any manner in the
conduct of the affairs of any regulated
entity; and
``(ii) prohibit the regulated entity
from releasing to or on behalf of the
regulated entity-affiliated party any
compensation or other payment of money
or other thing of current or potential
value in connection with the period of
any such suspension or with any
resignation, removal, retirement, or
other termination of employment or
office of the party.
``(B) Provisions applicable to notice.--
``(i) Copy.--A copy of any notice
under paragraph (1)(A) shall also be
served upon the regulated entity.
``(ii) Effective period.--A
suspension or prohibition under
subparagraph (A) shall remain in effect
until the information, indictment, or
complaint referred to in such
subparagraph is finally disposed of or
until terminated by the Director.
``(2) Removal or prohibition.--
``(A) In general.--If a judgment of
conviction or an agreement to enter a pretrial
diversion or other similar program is entered
against a regulated entity-affiliated party in
connection with a crime described in paragraph
(1)(A), at such time as such judgment is not
subject to further appellate review, the
Director may, if continued service or
participation by such party may pose a threat
to the regulated entity or impair public
confidence in the regulated entity, issue and
serve upon such party an order that--
``(i) removes such party from office
or prohibits such party from further
participation in any manner in the
conduct of the affairs of the regulated
entity without the prior written
consent of the Director; and
``(ii) prohibits the regulated entity
from releasing to or on behalf of the
regulated entity-affiliated party any
compensation or other payment of money
or other thing of current or potential
value in connection with the
termination of employment or office of
the party.
``(B) Provisions applicable to order.--
``(i) Copy.--A copy of any order
under paragraph (2)(A) shall also be
served upon the regulated entity,
whereupon the regulated entity-
affiliated party who is subject to the
order (if a director or an officer)
shall cease to be a director or officer
of such regulated entity.
``(ii) Effect of acquittal.--A
finding of not guilty or other
disposition of the charge shall not
preclude the Director from instituting
proceedings after such finding or
disposition to remove such party from
office or to prohibit further
participation in regulated entity
affairs, and to prohibit compensation
or other payment of money or other
thing of current or potential value in
connection with any resignation,
removal, retirement, or other
termination of employment or office of
the party, pursuant to subsections (a),
(d), or (e) of this section.
``(iii) Effective period.--Any notice
of suspension or order of removal
issued under this subsection shall
remain effective and outstanding until
the completion of any hearing or appeal
authorized under paragraph (4) unless
terminated by the Director.
``(3) Authority of remaining board members.--If at
any time, because of the suspension of one or more
directors pursuant to this section, there shall be on
the board of directors of a regulated entity less than
a quorum of directors not so suspended, all powers and
functions vested in or exercisable by such board shall
vest in and be exercisable by the director or directors
on the board not so suspended, until such time as there
shall be a quorum of the board of directors. In the
event all of the directors of a regulated entity are
suspended pursuant to this section, the Director shall
appoint persons to serve temporarily as directors in
their place and stead pending the termination of such
suspensions, or until such time as those who have been
suspended cease to be directors of the regulated entity
and their respective successors take office.
``(4) Hearing regarding continued participation.--
Within 30 days from service of any notice of suspension
or order of removal issued pursuant to paragraph (1) or
(2) of this subsection, the regulated entity-affiliated
party concerned may request in writing an opportunity
to appear before the Director to show that the
continued service to or participation in the conduct of
the affairs of the regulated entity by such party does
not, or is not likely to, pose a threat to the
interests of the regulated entity or threaten to impair
public confidence in the regulated entity. Upon receipt
of any such request, the Director shall fix a time (not
more than 30 days after receipt of such request, unless
extended at the request of such party) and place at
which such party may appear, personally or through
counsel, before one or more members of the Director or
designated employees of the Director to submit written
materials (or, at the discretion of the Director, oral
testimony) and oral argument. Within 60 days of such
hearing, the Director shall notify such party whether
the suspension or prohibition from participation in any
manner in the conduct of the affairs of the regulated
entity will be continued, terminated, or otherwise
modified, or whether the order removing such party from
office or prohibiting such party from further
participation in any manner in the conduct of the
affairs of the regulated entity, and prohibiting
compensation in connection with termination will be
rescinded or otherwise modified. Such notification
shall contain a statement of the basis for the
Director's decision, if adverse to such party. The
Director is authorized to prescribe such rules as may
be necessary to effectuate the purposes of this
subsection.
``(i) Hearings and Judicial Review.--
``(1) Venue and procedure.--Any hearing provided for
in this section shall be held in the District of
Columbia or in the Federal judicial district in which
the headquarters of the regulated entity is located,
unless the party afforded the hearing consents to
another place, and shall be conducted in accordance
with the provisions of chapter 5 of title 5, United
States Code. After such hearing, and within 90 days
after the Director has notified the parties that the
case has been submitted to it for final decision, it
shall render its decision (which shall include findings
of fact upon which its decision is predicated) and
shall issue and serve upon each party to the proceeding
an order or orders consistent with the provisions of
this section. Judicial review of any such order shall
be exclusively as provided in this subsection. Unless a
petition for review is timely filed in a court of
appeals of the United States, as provided in paragraph
(2), and thereafter until the record in the proceeding
has been filed as so provided, the Director may at any
time, upon such notice and in such manner as it shall
deem proper, modify, terminate, or set aside any such
order. Upon such filing of the record, the Director may
modify, terminate, or set aside any such order with
permission of the court.
``(2) Review of order.--Any party to any proceeding
under paragraph (1) may obtain a review of any order
served pursuant to paragraph (1) (other than an order
issued with the consent of the regulated entity or the
regulated entity-affiliated party concerned, or an
order issued under subsection (h) of this section) by
the filing in the United States Court of Appeals for
the District of Columbia Circuit or court of appeals of
the United States for the circuit in which the
headquarters of the regulated entity is located, within
30 days after the date of service of such order, a
written petition praying that the order of the Director
be modified, terminated, or set aside. A copy of such
petition shall be forthwith transmitted by the clerk of
the court to the Director, and thereupon the Director
shall file in the court the record in the proceeding,
as provided in section 2112 of title 28, United States
Code. Upon the filing of such petition, such court
shall have jurisdiction, which upon the filing of the
record shall (except as provided in the last sentence
of paragraph (1)) be exclusive, to affirm, modify,
terminate, or set aside, in whole or in part, the order
of the Director. Review of such proceedings shall be
had as provided in chapter 7 of title 5, United States
Code. The judgment and decree of the court shall be
final, except that the same shall be subject to review
by the Supreme Court upon certiorari, as provided in
section 1254 of title 28, United States Code.
``(3) Proceedings not treated as stay.--The
commencement of proceedings for judicial review under
paragraph (2) shall not, unless specifically ordered by
the court, operate as a stay of any order issued by the
Director.''.
(b) Conforming Amendments.--
(1) 1992 act.--Section 1317(f) of the Housing and
Community Development Act of 1992 (12 U.S.C. 4517(f))
is amended by striking ``section 1379B'' and inserting
``section 1379D''.
(2) Fannie mae charter act.--The second sentence of
subsection (b) of section 308 of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723(b)) is
amended by striking ``The'' and inserting ``Except to
the extent that action under section 1377 of the
Housing and Community Development Act of 1992
temporarily results in a lesser number, the''.
(3) Freddie mac act.--The second sentence of
subparagraph (A) of section 303(a)(2) of the Federal
Home Loan Mortgage Corporation Act (12 U.S.C.
1452(a)(2)(A)) is amended by striking ``The'' and
inserting ``Except to the extent that action under
section 1377 of the Housing and Community Development
Act of 1992 temporarily results in a lesser number,
the''.
SEC. 357. CRIMINAL PENALTY.
Subtitle C of title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4631 et seq.) is amended by
inserting after section 1377 (as added by the preceding
provisions of this title) the following new section:
``SEC. 1378. CRIMINAL PENALTY.
``Whoever, being subject to an order in effect under section
1377, without the prior written approval of the Director,
knowingly participates, directly or indirectly, in any manner
(including by engaging in an activity specifically prohibited
in such an order) in the conduct of the affairs of any
regulated entity shall be fined not more than $1,000,000,
imprisoned for not more than 5 years, or both.''.
SEC. 358. SUBPOENA AUTHORITY.
Section 1379D(c) of the Housing and Community Development Act
of 1992 (12 U.S.C. 4641(c)), as so redesignated by section
356(a)(1) of this title, is further amended--
(1) by striking ``request the Attorney General of the
United States to'' and inserting ``, in the discretion
of the Director,'';
(2) by inserting ``or request that the Attorney
General of the United States bring such an action,''
after ``District of Columbia,''; and
(3) by striking ``or may, under the direction and
control of the Attorney General, bring such an
action''.
SEC. 359. CONFORMING AMENDMENTS.
Subtitle C of title XIII of the Housing and Community
Development Act of 1992 (12 U.S.C. 4631 et seq.), as amended by
the preceding provisions of this title, is amended--
(1) in section 1372(c)(1) (12 U.S.C. 4632(c)), by
striking ``that enterprise'' and inserting ``that
regulated entity'';
(2) in section 1379 (12 U.S.C. 4637), as so
redesignated by section 356(a)(1) of this title--
(A) by inserting ``, or of a regulated
entity-affiliated party,'' before ``shall not
affect''; and
(B) by striking ``such director or executive
officer'' each place such term appears and
inserting ``such director, executive officer,
or regulated entity-affiliated party'';
(3) in section 1379A (12 U.S.C. 4638), as so
redesignated by section 356(a)(1) of this title, by
inserting ``or against a regulated entity-affiliated
party,'' before ``or impair'';
(4) by striking ``An enterprise'' each place such
term appears in such subtitle and inserting ``A
regulated entity'';
(5) by striking ``an enterprise'' each place such
term appears in such subtitle and inserting ``a
regulated entity'';
(6) by striking ``the enterprise'' each place such
term appears in such subtitle and inserting ``the
regulated entity''; and
(7) by striking ``any enterprise'' each place such
term appears in such subtitle and inserting ``any
regulated entity''.
CHAPTER 5--GENERAL PROVISIONS
SEC. 361. BOARDS OF ENTERPRISES.
(a) Fannie Mae.--
(1) In general.--Section 308(b) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1723(b)) is amended--
(A) in the first sentence, by striking
``eighteen persons, five of whom shall be
appointed annually by the President of the
United States, and the remainder of whom'' and
inserting ``13 persons, or such other number
that the Director determines appropriate,
who'';
(B) in the second sentence, by striking
``appointed by the President'';
(C) in the third sentence--
(i) by striking ``appointed or''; and
(ii) by striking ``, except that any
such appointed member may be removed
from office by the President for good
cause'';
(D) in the fourth sentence, by striking
``elective''; and
(E) by striking the fifth sentence.
(2) Transitional provision.--The amendments made by
paragraph (1) shall not apply to any appointed position
of the board of directors of the Federal National
Mortgage Association until the expiration of the annual
term for such position during which the effective date
under section 365 occurs.
(b) Freddie Mac.--
(1) In general.--Section 303(a)(2) of the Federal
Home Loan Mortgage Corporation Act (12 U.S.C.
1452(a)(2)) is amended--
(A) in subparagraph (A)--
(i) in the first sentence, by
striking ``18 persons, 5 of whom shall
be appointed annually by the President
of the United States and the remainder
of whom'' and inserting ``13 persons,
or such other number as the Director
determines appropriate, who''; and
(ii) in the second sentence, by
striking ``appointed by the President
of the United States'';
(B) in subparagraph (B)--
(i) by striking ``such or''; and
(ii) by striking ``, except that any
appointed member may be removed from
office by the President for good
cause''; and
(C) in subparagraph (C)--
(i) by striking the first sentence;
and
(ii) by striking ``elective''.
(2) Transitional provision.--The amendments made by
paragraph (1) shall not apply to any appointed position
of the board of directors of the Federal Home Loan
Mortgage Corporation until the expiration of the annual
term for such position during which the effective date
under section 365 occurs.
SEC. 362. REPORT ON PORTFOLIO OPERATIONS, SAFETY AND SOUNDNESS, AND
MISSION OF ENTERPRISES.
Not later than the expiration of the 12-month period
beginning on the effective date under section 365, the Director
of the Federal Housing Finance Agency shall submit a report to
the Congress which shall include--
(1) a description of the portfolio holdings of the
enterprises (as such term is defined in section 1303 of
the Housing and Community Development Act of 1992 (12
U.S.C. 4502) in mortgages (including whole loans and
mortgage-backed securities), non-mortgages, and other
assets;
(2) a description of the risk implications for the
enterprises of such holdings and the consequent risk
management undertaken by the enterprises (including the
use of derivatives for hedging purposes), compared with
off-balance sheet liabilities of the enterprises
(including mortgage-backed securities guaranteed by the
enterprises);
(3) an analysis of portfolio holdings for safety and
soundness purposes;
(4) an assessment of whether portfolio holdings
fulfill the mission purposes of the enterprises under
the Federal National Mortgage Association Charter Act
and the Federal Home Loan Mortgage Corporation Act; and
(5) an analysis of the potential systemic risk
implications for the enterprises, the housing and
capital markets, and the financial system of portfolio
holdings, and whether such holdings should be limited
or reduced over time.
SEC. 363. CONFORMING AND TECHNICAL AMENDMENTS.
(a) 1992 Act.--Title XIII of the Housing and Community
Development Act of 1992 is amended by striking section 1383 (12
U.S.C. 1451 note).
(b) Title 18, United States Code.--Section 1905 of title 18,
United States Code, is amended by striking ``Office of Federal
Housing Enterprise Oversight'' and inserting ``Federal Housing
Finance Agency''.
(c) Flood Disaster Protection Act of 1973.--Section
102(f)(3)(A) of the Flood Disaster Protection Act of 1973 (42
U.S.C. 4012a(f)(3)(A)) is amended by striking ``Director of the
Office of Federal Housing Enterprise Oversight of the
Department of Housing and Urban Development'' and inserting
``Director of the Federal Housing Finance Agency''.
(d) Department of Housing and Urban Development Act.--Section
5 of the Department of Housing and Urban Development Act (42
U.S.C. 3534) is amended by striking subsection (d).
(e) Title 5, United States Code.--
(1) Director's pay rate.--Section 5313 of title 5,
United States Code, is amended by striking the item
relating to the Director of the Office of Federal
Housing Enterprise Oversight, Department of Housing and
Urban Development and inserting the following new item:
``Director of the Federal Housing Finance Agency.''.
(2) Exclusion from senior executive service.--Section
3132(a)(1)(D) of title 5, United States Code, is
amended--
(A) by striking ``the Federal Housing Finance
Board,''; and
(B) by striking ``the Office of Federal
Housing Enterprise Oversight of the Department
of Housing and Urban Development'' and
inserting ``the Federal Housing Finance
Agency''.
(f) Inspector General Act of 1978.--Section 8G(a)(2) of the
Inspector General Act of 1978 (5 U.S.C. App.) is amended by
striking ``Federal Housing Finance Board'' and inserting
``Federal Housing Finance Agency''.
(g) Federal Deposit Insurance Act.--Section 11(t)(2)(A) of
the Federal Deposit Insurance Act (12 U.S.C.1821(t)(2)(A)) is
amended by adding at the end the following new clause:
``(vii) The Federal Housing Finance
Agency.''.
(h) 1997 Emergency Supplemental Appropriations Act.--Section
10001 of the 1997 Emergency Supplemental Appropriations Act for
Recovery From Natural Disasters, and for Overseas Peacekeeping
Efforts, Including Those In Bosnia (42 U.S.C. 3548) is
amended--
(1) by striking ``the Government National Mortgage
Association, and the Office of Federal Housing
Enterprise Oversight'' and inserting ``and the
Government National Mortgage Association''; and
(2) by striking ``, the Government National Mortgage
Association, or the Office of Federal Housing
Enterprise Oversight'' and inserting ``or the
Government National Mortgage Association''.
(i) National Homeownership Trust Act.--Section 302(b)(4) of
the Cranston-Gonzalez National Affordable Housing Act (42
U.S.C. 12851(b)(4)) is amended by striking ``the chairperson of
the Federal Housing Finance Board'' and inserting ``the
Director of the Federal Housing Finance Agency''.
SEC. 364. STUDY OF ALTERNATIVE SECONDARY MARKET SYSTEMS.
(a) In General.--The Director of the Federal Housing Finance
Agency, in consultation with the Board of Governors of the
Federal Reserve System, the Secretary of the Treasury, and the
Secretary of Housing and Urban Development, shall conduct a
comprehensive study of the effects on financial and housing
finance markets of alternatives to the current secondary market
system for housing finance, taking into consideration changes
in the structure of financial and housing finance markets and
institutions since the creation of the Federal National
Mortgage Association and the Federal Home Loan Mortgage
Corporation.
(b) Contents.--The study under this section shall--
(1) include, among the alternatives to the current
secondary market system analyzed--
(A) repeal of the chartering Acts for the
Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation;
(B) establishing bank-like mechanisms for
granting new charters for limited purposed
mortgage securitization entities;
(C) permitting the Director of the Federal
Housing Finance Agency to grant new charters
for limited purpose mortgage securitization
entities, which shall include analyzing the
terms on which such charters should be granted,
including whether such charters should be sold,
or whether such charters and the charters for
the Federal National Mortgage Association and
the Federal Home Loan Mortgage Corporation
should be taxed or otherwise assessed a
monetary price; and
(D) such other alternatives as the Director
considers appropriate;
(2) examine all of the issues involved in making the
transition to a completely private secondary mortgage
market system;
(3) examine the technological advancements the
private sector has made in providing liquidity in the
secondary mortgage market and how such advancements
have affected liquidity in the secondary mortgage
market; and
(4) examine how taxpayers would be impacted by each
alternative system, including the complete
privatization of the Federal National Mortgage
Association and the Federal Home Loan Mortgage
Corporation.
(c) Report.--The Director of the Federal Housing Finance
Agency shall submit a report to the Congress on the study not
later than the expiration of the 24-month period beginning on
the effective date under section 365.
SEC. 365. EFFECTIVE DATE.
Except as specifically provided otherwise in this subtitle,
this subtitle shall take effect on and the amendments made by
this subtitle shall take effect on, and shall apply beginning
on, the expiration of the 6-month period beginning on the date
of the enactment of this Act.
Subtitle B--Federal Home Loan Banks
SEC. 371. DEFINITIONS.
Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422)
is amended--
(1) by striking paragraphs (1), (10), and (11);
(2) by redesignating paragraphs (2) through (9) as
paragraphs (1) through (8), respectively;
(3) by redesignating paragraphs (12) and (13) as
paragraphs (9) and (10), respectively; and
(4) by adding at the end the following:
``(11) Director.--The term `Director' means the
Director of the Federal Housing Finance Agency.
``(12) Agency.--The term `Agency' means the Federal
Housing Finance Agency.''.
SEC. 372. DIRECTORS.
(a) Election.--Section 7 of the Federal Home Loan Bank Act
(12 U.S.C. 1427) is amended--
(1) by striking subsection (a) and inserting the
following:
``(a) Number; Election; Qualifications; Conflicts of
Interest.--
``(1) In general.--The management of each Federal
Home Loan Bank shall be vested in a board of 13
directors, or such other number as the Director
determines appropriate, each of whom shall be a citizen
of the United States. All directors of a Bank who are
not independent directors pursuant to paragraph (3)
shall be elected by the members.
``(2) Member directors.--A majority of the directors
of each Bank shall be officers or directors of a member
of such Bank that is located in the district in which
such Bank is located.
``(3) Independent directors.--At least two-fifths of
the directors of each Bank shall be independent
directors, who shall be appointed by the Director of
the Federal Housing Finance Agency from a list of
individuals recommended by the Federal Housing
Enterprise Board. The Federal Housing Enterprise Board
may recommend individuals who are identified by the
Board's own independent process or included on a list
of individuals recommended by the board of directors of
the Bank involved, which shall be submitted to the
Federal Housing Enterprise Board by such board of
directors. The number of individuals on any such list
submitted by a Bank's board of directors shall be equal
to at least two times the number of independent
directorships to be filled. All independent directors
appointed shall meet the following criteria:
``(A) In general.--Each independent director
shall be a bona fide resident of the district
in which such Bank is located.
``(B) Public interest directors.--At least 2
of the independent directors under this
paragraph of each Bank shall be representatives
chosen from organizations with more than a 2-
year history of representing consumer or
community interests on banking services, credit
needs, housing, community development, economic
development, or financial consumer protections.
``(C) Other directors.--
``(i) Qualifications.--Each
independent director that is not a
public interest director under
subparagraph (B) shall have
demonstrated knowledge of, or
experience in, financial management,
auditing and accounting, risk
management practices, derivatives,
project development, or organizational
management, or such other knowledge or
expertise as the Director may provide
by regulation.
``(ii) Consultation with banks.--In
appointing other directors to serve on
the board of a Federal home loan bank,
the Director of the Federal Housing
Finance Agency may consult with each
Federal home loan bank about the
knowledge, skills, and expertise needed
to assist the board in better
fulfilling its responsibilities.
``(D) Conflicts of interest.--Notwithstanding
subsection (f)(2), an independent director
under this paragraph of a Bank may not, during
such director's term of office, serve as an
officer of any Federal Home Loan Bank or as a
director or officer of any member of a Bank.
``(E) Community demographics.--In appointing
independent directors of a Bank pursuant to
this paragraph, the Director shall take into
consideration the demographic makeup of the
community most served by the Affordable Housing
Program of the Bank pursuant to section
10(j).'';
(2) in the first sentence of subsection (b), by
striking ``elective directorship'' and inserting
``member directorship established pursuant to
subsection (a)(2)'';
(3) in subsection (c)--
(A) by striking ``elective'' each place such
term appears and inserting ``member'', except--
(i) in the second sentence, the
second place such term appears; and
(ii) each place such term appears in
the fifth sentence;
(B) in the first sentence, by inserting after
``less than one'' the following: ``or two, as
determined by the board of directors of the
appropriate Federal home loan bank,''; and
(C) in the second sentence--
(i) by inserting ``(A) except as
provided in clause (B) of this
sentence,'' before ``if at any time'';
and
(ii) by inserting before the period
at the end the following: ``, and (B)
clause (A) of this sentence shall not
apply to the directorships of any
Federal home loan bank resulting from
the merger of any two or more such
banks''; and
(4) by striking ``elective'' each place such term
appears (except in subsections (c), (e), and (f)).
(b) Terms.--
(1) In general.--Section 7(d) of the Federal Home
Loan Bank Act (12 U.S.C. 1427(d)) is amended--
(A) in the first sentence, by striking ``3
years'' and inserting ``4 years''; and
(B) in the second sentence--
(i) by striking ``Federal Home Loan
Bank System Modernization Act of 1999''
and inserting ``Federal Housing Finance
Reform Act of 2008''; and
(ii) by striking ``1/3'' and
inserting ``1/4''.
(2) Savings provision.--The amendments made by
paragraph (1) shall not apply to the term of office of
any director of a Federal home loan bank who is serving
as of the effective date of this subtitle under section
381, including any director elected to fill a vacancy
in any such office.
(c) Continued Service of Independent Directors After
Expiration of Term.--Section 7(f)(2) of the Federal Home Loan
Bank Act (12 U.S.C. 1427(f)(2)) is amended--
(1) in the second sentence, by striking ``or the term
of such office expires, whichever occurs first'';
(2) by adding at the end the following new sentence:
``An independent Bank director may continue to serve as
a director after the expiration of the term of such
director until a successor is appointed.'';
(3) in the paragraph heading, by striking
``Appointed'' and inserting ``Independent''; and
(4) by striking ``appointive'' each place such term
appears and inserting ``independent''.
(d) Conforming Amendments.--Section 7(f)(3) of the Federal
Home Loan Bank Act (12 U.S.C. 1427(f)(3)) is amended--
(1) in the paragraph heading, by striking ``Elected''
and inserting ``Member''; and
(2) by striking ``elective'' each place such term
appears in the first and third sentences and inserting
``member''.
(e) Compensation.--Subsection (i) of section 7 of the Federal
Home Loan Bank Act (12 U.S.C. 1427(i)) is amended to read as
follows:
``(i) Directors' Compensation.--
``(1) In general.--Each Federal home loan bank may
pay the directors on the board of directors for the
bank reasonable and appropriate compensation for the
time required of such directors, and reasonable and
appropriate expenses incurred by such directors, in
connection with service on the board of directors, in
accordance with resolutions adopted by the board of
directors and subject to the approval of the Director.
``(2) Annual report by the board.--The Director shall
include, in the annual report submitted to the Congress
pursuant to section 1319B of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992,
information regarding the compensation and expenses
paid by the Federal home loan banks to the directors on
the boards of directors of the banks.''.
(f) Transition Rule.--Any member of the board of directors of
a Federal Home Loan Bank serving as of the effective date under
section 381 may continue to serve as a member of such board of
directors for the remainder of the term of such office as
provided in section 7 of the Federal Home Loan Bank Act, as in
effect before such effective date.
SEC. 373. FEDERAL HOUSING FINANCE AGENCY OVERSIGHT OF FEDERAL HOME LOAN
BANKS.
The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.),
other than in provisions of that Act added or amended otherwise
by this title, is amended--
(1) by striking sections 2A and 2B (12 U.S.C. 1422a,
1422b);
(2) in section 6 (12 U.S.C. 1426(b)(1))--
(A) in subsection (b)(1), in the matter
preceding subparagraph (A), by striking
``Finance Board approval'' and inserting
``approval by the Director''; and
(B) in each of subsections (c)(4)(B) and
(d)(2), by striking ``Finance Board
regulations'' each place that term appears and
inserting ``regulations of the Director'';
(3) in section 8 (12 U.S.C. 1428), in the section
heading, by striking ``by the board'';
(4) in section 10(b) (12 U.S.C. 1430(b)), by striking
``by formal resolution'';
(5) in section 10 (12 U.S.C. 1430), by adding at the
end the following new subsection:
``(k) Monitoring and Enforcing Compliance With Affordable
Housing and Community Investment Program Requirements.--The
requirements under subsection (i) and (j) that the Banks
establish Community Investment and Affordable Housing Programs,
respectively, and contribute to the Affordable Housing Program,
shall be enforceable by the Director with respect to the Banks
in the same manner and to the same extent as the housing goals
under subpart B of part 2 of subtitle A of title XIII of the
Housing and Community Development Act of 1992 (12 U.S.C. 4561
et seq.) are enforceable under section 1336 of such Act with
respect to the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation.'';
(6) in section 11 (12 U.S.C. 1431)--
(A) in subsection (b)--
(i) in the first sentence--
(I) by striking ``The Board''
and inserting ``The Office of
Finance, as agent for the
Banks,''; and
(II) by striking ``the
Board'' and inserting ``such
Office''; and
(ii) in the second and fourth
sentences, by striking ``the Board''
each place such term appears and
inserting ``the Office of Finance'';
(B) in subsection (c)--
(i) by striking ``the Board'' the
first place such term appears and
inserting ``the Office of Finance, as
agent for the Banks,''; and
(ii) by striking ``the Board'' the
second place such term appears and
inserting ``such Office''; and
(C) in subsection (f)--
(i) by striking the two commas after
``permit'' and inserting ``or''; and
(ii) by striking the comma after
``require'';
(7) in section 15 (12 U.S.C. 1435), by inserting ``or
the Director'' after ``the Board'';
(8) in section 18 (12 U.S.C. 1438), by striking
subsection (b);
(9) in section 21 (12 U.S.C. 1441)--
(A) in subsection (b)--
(i) in paragraph (5), by striking
``Chairperson of the Federal Housing
Finance Board'' and inserting
``Director''; and
(ii) in the heading for paragraph
(8), by striking ``federal housing
finance board'' and inserting
``director''; and
(B) in subsection (i), in the heading for
paragraph (2), by striking ``Federal housing
finance board'' and inserting ``Director'';
(10) in section 23 (12 U.S.C. 1443), by striking
``Board of Directors of the Federal Housing Finance
Board'' and inserting ``Director'';
(11) by striking ``the Board'' each place such term
appears in such Act (except in section 15 (12 U.S.C.
1435), section 21(f)(2) (12 U.S.C. 1441(f)(2)),
subsections (a), (k)(2)(B)(i), and (n)(6)(C)(ii) of
section 21A (12 U.S.C. 1441a), subsections (f)(2)(C),
and (k)(7)(B)(ii) of section 21B (12 U.S.C. 1441b), and
the first two places such term appears in section 22
(12 U.S.C. 1442)) and inserting ``the Director'';
(12) by striking ``The Board'' each place such term
appears in such Act (except in sections 7(e) (12 U.S.C.
1427(e)), and 11(b) (12 U.S.C. 1431(b)) and inserting
``The Director'';
(13) by striking ``the Board's'' each place such term
appears in such Act and inserting ``the Director's'';
(14) by striking ``The Board's'' each place such term
appears in such Act and inserting ``The Director's'';
(15) by striking ``the Finance Board'' each place
such term appears in such Act and inserting ``the
Director'';
(16) by striking ``Federal Housing Finance Board''
each place such term appears and inserting
``Director'';
(17) in section 11(i) (12 U.S.C. 1431(i), by striking
``the Chairperson of''; and
(18) in section 21(e)(9) (12 U.S.C. 1441(e)(9)), by
striking ``Chairperson of the''.
SEC. 374. JOINT ACTIVITIES OF BANKS.
Section 11 of the Federal Home Loan Bank Act (12 U.S.C. 1431)
is amended by adding at the end the following new subsection:
``(l) Joint Activities.--Subject to the regulation of the
Director, any two or more Federal Home Loan Banks may establish
a joint office for the purpose of performing functions for, or
providing services to, the Banks on a common or collective
basis, or may require that the Office of Finance perform such
functions or services, but only if the Banks are otherwise
authorized to perform such functions or services
individually.''.
SEC. 375. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN BANKS.
(a) In General.--The Federal Home Loan Bank Act is amended by
inserting after section 20 (12 U.S.C. 1440) the following new
section:
``SEC. 20A. SHARING OF INFORMATION BETWEEN FEDERAL HOME LOAN BANKS.
``(a) Regulatory Authority.--The Director shall prescribe
such regulations as may be necessary to ensure that each
Federal Home Loan Bank has access to information that the Bank
needs to determine the nature and extent of its joint and
several liability.
``(b) No Waiver of Privilege.--The Director shall not be
deemed to have waived any privilege applicable to any
information concerning a Federal Home Loan Bank by
transferring, or permitting the transfer of, that information
to any other Federal Home Loan Bank for the purpose of enabling
the recipient to evaluate the nature and extent of its joint
and several liability.''.
(b) Regulations.--The regulations required under the
amendment made by subsection (a) shall be issued in final form
not later than 6 months after the effective date under section
381 of this title.
SEC. 376. REORGANIZATION OF BANKS AND VOLUNTARY MERGER.
Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446)
is amended--
(1) by inserting ``(a) Reorganization.--'' before
``Whenever''; and
(2) by striking ``liquidated or'' each place such
phrase appears;
(3) by striking ``liquidation or''; and
(4) by adding at the end the following new
subsection:
``(b) Voluntary Mergers.--Any two or more Banks may, with the
approval of the Director, and the approval of the boards of
directors of the Banks involved, merge. The Director shall
promulgate regulations establishing the conditions and
procedures for the consideration and approval of any such
voluntary merger, including the procedures for Bank member
approval.''.
SEC. 377. SECURITIES AND EXCHANGE COMMISSION DISCLOSURE.
(a) In General.--The Federal Home Loan Banks shall be exempt
from compliance with--
(1) sections 13(e), 14(a), 14(c), and 17A of the
Securities Exchange Act of 1934 and related Commission
regulations; and
(2) section 15 of that Act and related Securities and
Exchange Commission regulations with respect to
transactions in capital stock of the Banks.
(b) Member Exemption.--The members of the Federal Home Loan
Banks shall be exempt from compliance with sections 13(d),
13(f), 13(g), 14(d), and 16 of the Securities Exchange Act of
1934 and related Securities and Exchange Commission regulations
with respect to their ownership of, or transactions in, capital
stock of the Federal Home Loan Banks.
(c) Exempted and Government Securities.--
(1) Capital stock.--The capital stock issued by each
of the Federal Home Loan Banks under section 6 of the
Federal Home Loan Bank Act are--
(A) exempted securities within the meaning of
section 3(a)(2) of the Securities Act of 1933;
and
(B) ``exempted securities'' within the
meaning of section 3(a)(12)(A) of the
Securities Exchange Act of 1934.
(2) Other obligations.--The debentures, bonds, and
other obligations issued under section 11 of the
Federal Home Loan Bank Act are--
(A) exempted securities within the meaning of
section 3(a)(2) of the Securities Act of 1933;
(B) ``government securities'' within the
meaning of section 3(a)(42) of the Securities
Exchange Act of 1934;
(C) excluded from the definition of
``government securities broker'' within section
3(a)(43) of the Securities Exchange Act of
1934;
(D) excluded from the definition of
``government securities dealer'' within section
3(a)(44) of the Securities Exchange Act of
1934; and
(E) ``government securities'' within the
meaning of section 2(a)(16) of the Investment
Company Act of 1940.
(d) Exemption From Reporting Requirements.--The Federal Home
Loan Banks shall be exempt from periodic reporting requirements
pertaining to--
(1) the disclosure of related party transactions that
occur in the ordinary course of business of the Banks
with their members; and
(2) the disclosure of unregistered sales of equity
securities.
(e) Tender Offers.--The Securities and Exchange Commission's
rules relating to tender offers shall not apply in connection
with transactions in capital stock of the Federal Home Loan
Banks.
(f) Regulations.--In issuing any final regulations to
implement provisions of this section, the Securities and
Exchange Commission shall consider the distinctive
characteristics of the Federal Home Loan Banks when evaluating
the accounting treatment with respect to the payment to
Resolution Funding Corporation, the role of the combined
financial statements of the twelve Banks, the accounting
classification of redeemable capital stock, and the accounting
treatment related to the joint and several nature of the
obligations of the Banks.
SEC. 378. COMMUNITY FINANCIAL INSTITUTION MEMBERS.
(a) Total Asset Requirement.--Paragraph (10) of section 2 of
the Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so
redesignated by section 371(3) of this title, is amended by
striking ``$500,000,000'' each place such term appears and
inserting ``$1,000,000,000''.
(b) Use of Advances for Community Development Activities.--
Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C.
1430(a)) is amended--
(1) in paragraph (2)(B)--
(A) by striking ``and''; and
(B) by inserting ``, and community
development activities'' before the period at
the end;
(2) in paragraph (3)(E), by inserting ``or community
development activities'' after ``agriculture,''; and
(3) in paragraph (6)--
(A) by striking ``and''; and
(B) by inserting ``, and `community
development activities' '' before ``shall''.
SEC. 379. TECHNICAL AND CONFORMING AMENDMENTS.
(a) Right to Financial Privacy Act of 1978.--Section 1113(o)
of the Right to Financial Privacy Act of 1978 (12 U.S.C.
3413(o)) is amended--
(1) by striking ``Federal Housing Finance Board'' and
inserting ``Federal Housing Finance Agency''; and
(2) by striking ``Federal Housing Finance Board's''
and inserting ``Federal Housing Finance Agency's''.
(b) Riegle Community Development and Regulatory Improvement
Act of 1994.--Section 117(e) of the Riegle Community
Development and Regulatory Improvement Act of 1994 (12 U.S.C.
4716(e)) is amended by striking ``Federal Housing Finance
Board'' and inserting ``Federal Housing Finance Agency''.
(c) Title 18, United States Code.--Title 18, United States
Code, is amended by striking ``Federal Housing Finance Board''
each place such term appears in each of sections 212, 657,
1006, 1014, and inserting ``Federal Housing Finance Agency''.
(d) MAHRA Act of 1997.--Section 517(b)(4) of the Multifamily
Assisted Housing Reform and Affordability Act of 1997 (42
U.S.C. 1437f note) is amended by striking ``Federal Housing
Finance Board'' and inserting ``Federal Housing Finance
Agency''.
(e) Title 44, United States Code.--Section 3502(5) of title
44, United States Code, is amended by striking ``Federal
Housing Finance Board'' and inserting ``Federal Housing Finance
Agency''.
(f) Access to Local TV Act of 2000.--Section
1004(d)(2)(D)(iii) of the Launching Our Communities' Access to
Local Television Act of 2000 (47 U.S.C. 1103(d)(2)(D)(iii)) is
amended by striking ``Office of Federal Housing Enterprise
Oversight, the Federal Housing Finance Board'' and inserting
``Federal Housing Finance Agency''.
(g) Sarbanes-Oxley Act of 2002.--Section 105(b)(5)(B)(ii)(II)
of the Sarbanes-Oxley Act of 2002 (15 U.S.C.
7215(B)(5)(b)(ii)(II)) is amended by inserting ``and the
Director of the Federal Housing Finance Agency'' after
``Commission,''.
SEC. 380. STUDY OF AFFORDABLE HOUSING PROGRAM USE FOR LONG-TERM CARE
FACILITIES.
The Comptroller General shall conduct a study of the use of
affordable housing programs of the Federal home loan banks
under section 10(j) of the Federal Home Loan Bank Act to
determine how and the extent to which such programs are used to
assist long-term care facilities for low- and moderate-income
individuals, and the effectiveness and adequacy of such
assistance in meeting the needs of affected communities. The
study shall examine the applicability of such use to the
affordable housing fund required to be established by the
Director of the Federal Housing Finance Agency pursuant to the
amendment made by section 340 of this title. The Comptroller
General shall submit a report to the Director of the Federal
Housing Finance Agency and the Congress regarding the results
of the study not later than the expiration of the 1-year period
beginning on the date of the enactment of this Act. This
section shall take effect on the date of the enactment of this
Act.
SEC. 381. EFFECTIVE DATE.
Except as specifically provided otherwise in this subtitle,
this subtitle shall take effect on and the amendments made by
this subtitle shall take effect on, and shall apply beginning
on, the expiration of the 6-month period beginning on the date
of the enactment of this Act.
Subtitle C--Transfer of Functions, Personnel, and Property of Office of
Federal Housing Enterprise Oversight, Federal Housing Finance Board,
and Department of Housing and Urban Development
CHAPTER 1--OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT
SEC. 385. ABOLISHMENT OF OFHEO.
(a) In General.--Effective at the end of the 6-month period
beginning on the date of the enactment of this Act, the Office
of Federal Housing Enterprise Oversight of the Department of
Housing and Urban Development and the positions of the Director
and Deputy Director of such Office are abolished.
(b) Disposition of Affairs.--During the 6-month period
beginning on the date of the enactment of this Act, the
Director of the Office of Federal Housing Enterprise Oversight
shall, for the purpose of winding up the affairs of the Office
of Federal Housing Enterprise Oversight and in addition to
carrying out its other responsibilities under law--
(1) manage the employees of such Office and provide
for the payment of the compensation and benefits of any
such employee which accrue before the effective date of
the transfer of such employee pursuant to section 387;
and
(2) may take any other action necessary for the
purpose of winding up the affairs of the Office.
(c) Status of Employees Before Transfer.--The amendments made
by subtitle A and the abolishment of the Office of Federal
Housing Enterprise Oversight under subsection (a) of this
section may not be construed to affect the status of any
employee of such Office as employees of an agency of the United
States for purposes of any other provision of law before the
effective date of the transfer of any such employee pursuant to
section 387.
(d) Use of Property and Services.--
(1) Property.--The Director of the Federal Housing
Finance Agency may use the property of the Office of
Federal Housing Enterprise Oversight to perform
functions which have been transferred to the Director
of the Federal Housing Finance Agency for such time as
is reasonable to facilitate the orderly transfer of
functions transferred pursuant to any other provision
of this title or any amendment made by this title to
any other provision of law.
(2) Agency services.--Any agency, department, or
other instrumentality of the United States, and any
successor to any such agency, department, or
instrumentality, which was providing supporting
services to the Office of Federal Housing Enterprise
Oversight before the expiration of the period under
subsection (a) in connection with functions that are
transferred to the Director of the Federal Housing
Finance Agency shall--
(A) continue to provide such services, on a
reimbursable basis, until the transfer of such
functions is complete; and
(B) consult with any such agency to
coordinate and facilitate a prompt and
reasonable transition.
(e) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity
of any right, duty, or obligation of the United States,
the Director of the Office of Federal Housing
Enterprise Oversight, or any other person, which--
(A) arises under or pursuant to the title
XIII of the Housing and Community Development
Act of 1992, the Federal National Mortgage
Association Charter Act, the Federal Home Loan
Mortgage Corporation Act, or any other
provision of law applicable with respect to
such Office; and
(B) existed on the day before the abolishment
under subsection (a) of this section.
(2) Continuation of suits.--No action or other
proceeding commenced by or against the Director of the
Office of Federal Housing Enterprise Oversight in
connection with functions that are transferred to the
Director of the Federal Housing Finance Agency shall
abate by reason of the enactment of this title, except
that the Director of the Federal Housing Finance Agency
shall be substituted for the Director of the Office of
Federal Housing Enterprise Oversight as a party to any
such action or proceeding.
SEC. 386. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.
All regulations, orders, determinations, and resolutions
that--
(1) were issued, made, prescribed, or allowed to
become effective by--
(A) the Office of Federal Housing Enterprise
Oversight; or
(B) a court of competent jurisdiction and
that relate to functions transferred by this
chapter; and
(2) are in effect on the date of the abolishment
under section 385(a) of this title, shall remain in
effect according to the terms of such regulations,
orders, determinations, and resolutions, and shall be
enforceable by or against the Director of the Federal
Housing Finance Agency until modified, terminated, set
aside, or superseded in accordance with applicable law
by such Director, as the case may be, any court of
competent jurisdiction, or operation of law.
SEC. 387. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.
(a) Transfer.--Each employee of the Office of Federal Housing
Enterprise Oversight shall be transferred to the Federal
Housing Finance Agency for employment no later than the date of
the abolishment under section 385(a) of this title and such
transfer shall be deemed a transfer of function for purposes of
section 3503 of title 5, United States Code.
(b) Guaranteed Positions.--Each employee transferred under
subsection (a) shall be guaranteed a position with the same
status, tenure, grade, and pay as that held on the day
immediately preceding the transfer. Each such employee holding
a permanent position shall not be involuntarily separated or
reduced in grade or compensation for 12 months after the date
of transfer, except for cause or, if the employee is a
temporary employee, separated in accordance with the terms of
the appointment.
(c) Appointment Authority for Excepted Service Employees.--
(1) In general.--In the case of employees occupying
positions in the excepted service, any appointment
authority established pursuant to law or regulations of
the Office of Personnel Management for filling such
positions shall be transferred, subject to paragraph
(2).
(2) Decline of transfer.--The Director of the Federal
Housing Finance Agency may decline a transfer of
authority under paragraph (1) (and the employees
appointed pursuant thereto) to the extent that such
authority relates to positions excepted from the
competitive service because of their confidential,
policy-making, policy-determining, or policy-advocating
character.
(d) Reorganization.--If the Director of the Federal Housing
Finance Agency determines, after the end of the 1-year period
beginning on the date of the abolishment under section 385(a),
that a reorganization of the combined work force is required,
that reorganization shall be deemed a major reorganization for
purposes of affording affected employees retirement under
section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States
Code.
(e) Employee Benefit Programs.--Any employee of the Office of
Federal Housing Enterprise Oversight accepting employment with
the Director of the Federal Housing Finance Agency as a result
of a transfer under subsection (a) may retain for 12 months
after the date such transfer occurs membership in any employee
benefit program of the Federal Housing Finance Agency or the
Office of Federal Housing Enterprise Oversight, as applicable,
including insurance, to which such employee belongs on the date
of the abolishment under section 385(a) if--
(1) the employee does not elect to give up the
benefit or membership in the program; and
(2) the benefit or program is continued by the
Director of the Federal Housing Finance Agency,
The difference in the costs between the benefits which would
have been provided by such agency and those provided by this
section shall be paid by the Director of the Federal Housing
Finance Agency. If any employee elects to give up membership in
a health insurance program or the health insurance program is
not continued by such Director, the employee shall be permitted
to select an alternate Federal health insurance program within
30 days of such election or notice, without regard to any other
regularly scheduled open season.
SEC. 388. TRANSFER OF PROPERTY AND FACILITIES.
Upon the abolishment under section 385(a), all property of
the Office of Federal Housing Enterprise Oversight shall
transfer to the Director of the Federal Housing Finance Agency.
CHAPTER 2--FEDERAL HOUSING FINANCE BOARD
SEC. 391. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.
(a) In General.--Effective at the end of the 6-month period
beginning on the date of enactment of this Act, the Federal
Housing Finance Board (in this subtitle referred to as the
``Board'') is abolished.
(b) Disposition of Affairs.--During the 6-month period
beginning on the date of enactment of this Act, the Board, for
the purpose of winding up the affairs of the Board and in
addition to carrying out its other responsibilities under law--
(1) shall manage the employees of such Board and
provide for the payment of the compensation and
benefits of any such employee which accrue before the
effective date of the transfer of such employee under
section 393; and
(2) may take any other action necessary for the
purpose of winding up the affairs of the Board.
(c) Status of Employees Before Transfer.--The amendments made
by subtitles A and B and the abolishment of the Board under
subsection (a) may not be construed to affect the status of any
employee of such Board as employees of an agency of the United
States for purposes of any other provision of law before the
effective date of the transfer of any such employee under
section 393.
(d) Use of Property and Services.--
(1) Property.--The Director of the Federal Housing
Finance Agency may use the property of the Board to
perform functions which have been transferred to the
Director of the Federal Housing Finance Agency for such
time as is reasonable to facilitate the orderly
transfer of functions transferred under any other
provision of this title or any amendment made by this
title to any other provision of law.
(2) Agency services.--Any agency, department, or
other instrumentality of the United States, and any
successor to any such agency, department, or
instrumentality, which was providing supporting
services to the Board before the expiration of the
period under subsection (a) in connection with
functions that are transferred to the Director of the
Federal Housing Finance Agency shall--
(A) continue to provide such services, on a
reimbursable basis, until the transfer of such
functions is complete; and
(B) consult with any such agency to
coordinate and facilitate a prompt and
reasonable transition.
(e) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity
of any right, duty, or obligation of the United States,
a member of the Board, or any other person, which--
(A) arises under the Federal Home Loan Bank
Act or any other provision of law applicable
with respect to such Board; and
(B) existed on the day before the effective
date of the abolishment under subsection (a).
(2) Continuation of suits.--No action or other
proceeding commenced by or against the Board in
connection with functions that are transferred to the
Director of the Federal Housing Finance Agency shall
abate by reason of the enactment of this title, except
that the Director of the Federal Housing Finance Agency
shall be substituted for the Board or any member
thereof as a party to any such action or proceeding.
SEC. 392. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.
(a) In General.--All regulations, orders, determinations, and
resolutions described under subsection (b) shall remain in
effect according to the terms of such regulations, orders,
determinations, and resolutions, and shall be enforceable by or
against the Director of the Federal Housing Finance Agency
until modified, terminated, set aside, or superseded in
accordance with applicable law by such Director, any court of
competent jurisdiction, or operation of law.
(b) Applicability.--A regulation, order, determination, or
resolution is described under this subsection if it--
(1) was issued, made, prescribed, or allowed to
become effective by--
(A) the Board; or
(B) a court of competent jurisdiction and
relates to functions transferred by this
chapter; and
(2) is in effect on the effective date of the
abolishment under section 391(a).
SEC. 393. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL HOUSING
FINANCE BOARD.
(a) Transfer.--Each employee of the Board shall be
transferred to the Federal Housing Finance Agency for
employment not later than the effective date of the abolishment
under section 391(a), and such transfer shall be deemed a
transfer of function for purposes of section 3503 of title 5,
United States Code.
(b) Guaranteed Positions.--Each employee transferred under
subsection (a) shall be guaranteed a position with the same
status, tenure, grade, and pay as that held on the day
immediately preceding the transfer. Each such employee holding
a permanent position shall not be involuntarily separated or
reduced in grade or compensation for 12 months after the date
of transfer, except for cause or, if the employee is a
temporary employee, separated in accordance with the terms of
the appointment.
(c) Appointment Authority for Excepted and Senior Executive
Service Employees.--
(1) In general.--In the case of employees occupying
positions in the excepted service or the Senior
Executive Service, any appointment authority
established under law or by regulations of the Office
of Personnel Management for filling such positions
shall be transferred, subject to paragraph (2).
(2) Decline of transfer.--The Director of the Federal
Housing Finance Agency may decline a transfer of
authority under paragraph (1) to the extent that such
authority relates to positions excepted from the
competitive service because of their confidential,
policymaking, policy-determining, or policy-advocating
character, and noncareer positions in the Senior
Executive Service (within the meaning of section
3132(a)(7) of title 5, United States Code).
(d) Reorganization.--If the Director of the Federal Housing
Finance Agency determines, after the end of the 1-year period
beginning on the effective date of the abolishment under
section 391(a), that a reorganization of the combined workforce
is required, that reorganization shall be deemed a major
reorganization for purposes of affording affected employees
retirement under section 8336(d)(2) or 8414(b)(1)(B) of title
5, United States Code.
(e) Employee Benefit Programs.--
(1) In general.--Any employee of the Board accepting
employment with the Federal Housing Finance Agency as a
result of a transfer under subsection (a) may retain
for 12 months after the date on which such transfer
occurs membership in any employee benefit program of
the Federal Housing Finance Agency or the Board, as
applicable, including insurance, to which such employee
belongs on the effective date of the abolishment under
section 391(a) if--
(A) the employee does not elect to give up
the benefit or membership in the program; and
(B) the benefit or program is continued by
the Director of the Federal Housing Finance
Agency.
(2) Cost differential.--The difference in the costs
between the benefits which would have been provided by
the Board and those provided by this section shall be
paid by the Director of the Federal Housing Finance
Agency. If any employee elects to give up membership in
a health insurance program or the health insurance
program is not continued by such Director, the employee
shall be permitted to select an alternate Federal
health insurance program within 30 days after such
election or notice, without regard to any other
regularly scheduled open season.
SEC. 394. TRANSFER OF PROPERTY AND FACILITIES.
Upon the effective date of the abolishment under section
391(a), all property of the Board shall transfer to the
Director of the Federal Housing Finance Agency.
CHAPTER 3--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
SEC. 395. TERMINATION OF ENTERPRISE-RELATED FUNCTIONS.
(a) Termination Date.--For purposes of this chapter, the term
``termination date'' means the date that occurs 6 months after
the date of the enactment of this Act.
(b) Determination of Transferred Functions and Employees.--
(1) In general.--Not later than the expiration of the
3-month period beginning on the date of the enactment
of this Act, the Secretary, in consultation with the
Director of the Office of Federal Housing Enterprise
Oversight, shall determine--
(A) the functions, duties, and activities of
the Secretary of Housing and Urban Development
regarding oversight or regulation of the
enterprises under or pursuant to the
authorizing statutes, title XIII of the Housing
and Community Development Act of 1992, and any
other provisions of law, as in effect before
the date of the enactment of this Act, but not
including any such functions, duties, and
activities of the Director of the Office of
Federal Housing Enterprise Oversight of the
Department of Housing and Urban Development and
such Office; and
(B) the employees of the Department of
Housing and Urban Development necessary to
perform such functions, duties, and activities.
(2) Enterprise-related functions.--For purposes of
this chapter, the term ``enterprise-related functions
of the Department'' means the functions, duties, and
activities of the Department of Housing and Urban
Development determined under paragraph (1)(A).
(3) Enterprise-related employees.--For purposes of
this chapter, the term ``enterprise-related employees
of the Department'' means the employees of the
Department of Housing and Urban Development determined
under paragraph (1)(B).
(c) Disposition of Affairs.--During the 6-month period
beginning on the date of enactment of this Act, the Secretary
of Housing and Urban Development (in this subtitle referred to
as the ``Secretary''), for the purpose of winding up the
affairs of the Secretary regarding the enterprise-related
functions of the Department of Housing and Urban Development
(in this subtitle referred to as the ``Department'') and in
addition to carrying out the Secretary's other responsibilities
under law regarding such functions--
(1) shall manage the enterprise-related employees of
the Department and provide for the payment of the
compensation and benefits of any such employee which
accrue before the effective date of the transfer of any
such employee under section 397; and
(2) may take any other action necessary for the
purpose of winding up the enterprise-related functions
of the Department.
(d) Status of Employees Before Transfer.--The amendments made
by subtitles A and B and the termination of the enterprise-
related functions of the Department under subsection (b) may
not be construed to affect the status of any employee of the
Department as employees of an agency of the United States for
purposes of any other provision of law before the effective
date of the transfer of any such employee under section 397.
(e) Use of Property and Services.--
(1) Property.--The Director of the Federal Housing
Finance Agency may use the property of the Secretary to
perform functions which have been transferred to the
Director of the Federal Housing Finance Agency for such
time as is reasonable to facilitate the orderly
transfer of functions transferred under any other
provision of this title or any amendment made by this
title to any other provision of law.
(2) Agency services.--Any agency, department, or
other instrumentality of the United States, and any
successor to any such agency, department, or
instrumentality, which was providing supporting
services to the Secretary regarding enterprise-related
functions of the Department before the termination date
under subsection (a) in connection with such functions
that are transferred to the Director of the Federal
Housing Finance Agency shall--
(A) continue to provide such services, on a
reimbursable basis, until the transfer of such
functions is complete; and
(B) consult with any such agency to
coordinate and facilitate a prompt and
reasonable transition.
(f) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity
of any right, duty, or obligation of the United States,
the Secretary, or any other person, which--
(A) arises under the authorizing statutes,
title XIII of the Housing and Community
Development Act of 1992, or any other provision
of law applicable with respect to the
Secretary, in connection with the enterprise-
related functions of the Department; and
(B) existed on the day before the termination
date under subsection (a).
(2) Continuation of suits.--No action or other
proceeding commenced by or against the Secretary in
connection with the enterprise-related functions of the
Department shall abate by reason of the enactment of
this title, except that the Director of the Federal
Housing Finance Agency shall be substituted for the
Secretary or any member thereof as a party to any such
action or proceeding.
SEC. 396. CONTINUATION AND COORDINATION OF CERTAIN REGULATIONS.
(a) In General.--All regulations, orders, and determinations
described in subsection (b) shall remain in effect according to
the terms of such regulations, orders, determinations, and
resolutions, and shall be enforceable by or against the
Director of the Federal Housing Finance Agency until modified,
terminated, set aside, or superseded in accordance with
applicable law by such Director, any court of competent
jurisdiction, or operation of law.
(b) Applicability.--A regulation, order, or determination is
described under this subsection if it--
(1) was issued, made, prescribed, or allowed to
become effective by--
(A) the Secretary; or
(B) a court of competent jurisdiction and
that relate to the enterprise-related functions
of the Department; and
(2) is in effect on the termination date under
section 395(a).
SEC. 397. TRANSFER AND RIGHTS OF EMPLOYEES OF DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT.
(a) Transfer.--
(1) In general.--Except as provided in paragraph (2),
each enterprise-related employee of the Department
shall be transferred to the Federal Housing Finance
Agency for employment not later than the termination
date under section 395(a) and such transfer shall be
deemed a transfer of function for purposes of section
3503 of title 5, United States Code.
(2) Authority to decline.--An enterprise-related
employee of the Department may, in the discretion of
the employee, decline transfer under paragraph (1) to a
position in the Federal Housing Finance Agency and
shall be guaranteed a position in the Department with
the same status, tenure, grade, and pay as that held on
the day immediately preceding the date that such
declination was made. Each such employee holding a
permanent position shall not be involuntarily separated
or reduced in grade or compensation for 12 months after
the date that the transfer would otherwise have
occurred, except for cause or, if the employee is a
temporary employee, separated in accordance with the
terms of the appointment.
(b) Guaranteed Positions.--Each enterprise-related employee
of the Department transferred under subsection (a) shall be
guaranteed a position with the same status, tenure, grade, and
pay as that held on the day immediately preceding the transfer.
Each such employee holding a permanent position shall not be
involuntarily separated or reduced in grade or compensation for
12 months after the date of transfer, except for cause or, if
the employee is a temporary employee, separated in accordance
with the terms of the appointment.
(c) Appointment Authority for Excepted and Senior Executive
Service Employees.--
(1) In general.--In the case of employees occupying
positions in the excepted service or the Senior
Executive Service, any appointment authority
established under law or by regulations of the Office
of Personnel Management for filling such positions
shall be transferred, subject to paragraph (2).
(2) Decline of transfer.--The Director of the Federal
Housing Finance Agency may decline a transfer of
authority under paragraph (1) (and the employees
appointed pursuant thereto) to the extent that such
authority relates to positions excepted from the
competitive service because of their confidential,
policymaking, policy-determining, or policy-advocating
character, and noncareer positions in the Senior
Executive Service (within the meaning of section
3132(a)(7) of title 5, United States Code).
(d) Reorganization.--If the Director of the Federal Housing
Finance Agency determines, after the end of the 1-year period
beginning on the termination date under section 395(a), that a
reorganization of the combined workforce is required, that
reorganization shall be deemed a major reorganization for
purposes of affording affected employees retirement under
section 8336(d)(2) or 8414(b)(1)(B) of title 5, United States
Code.
(e) Employee Benefit Programs.--
(1) In general.--Any enterprise-related employee of
the Department accepting employment with the Federal
Housing Finance Agency as a result of a transfer under
subsection (a) may retain for 12 months after the date
on which such transfer occurs membership in any
employee benefit program of the Federal Housing Finance
Agency or the Department, as applicable, including
insurance, to which such employee belongs on the
termination date under section 395(a) if--
(A) the employee does not elect to give up
the benefit or membership in the program; and
(B) the benefit or program is continued by
the Director of the Federal Housing Finance
Agency.
(2) Cost differential.--The difference in the costs
between the benefits which would have been provided by
the Department and those provided by this section shall
be paid by the Director of the Federal Housing Finance
Agency. If any employee elects to give up membership in
a health insurance program or the health insurance
program is not continued by such Director, the employee
shall be permitted to select an alternate Federal
health insurance program within 30 days after such
election or notice, without regard to any other
regularly scheduled open season.
SEC. 398. TRANSFER OF APPROPRIATIONS, PROPERTY, AND FACILITIES.
Upon the termination date under section 395(a), all assets,
liabilities, contracts, property, records, and unexpended
balances of appropriations, authorizations, allocations, and
other funds employed, held, used, arising from, available to,
or to be made available to the Department in connection with
enterprise-related functions of the Department shall transfer
to the Director of the Federal Housing Finance Agency.
Unexpended funds transferred by this section shall be used only
for the purposes for which the funds were originally authorized
and appropriated.
TITLE IV--EMERGENCY MORTGAGE LOAN MODIFICATION
SEC. 401. SHORT TITLE.
This title may be cited as the ``Emergency Mortgage Loan
Modification Act of 2008''.
SEC. 402. SAFE HARBOR FOR QUALIFIED LOAN MODIFICATIONS OR WORKOUT PLANS
FOR CERTAIN RESIDENTIAL MORTGAGE LOANS.
(a) Standard for Loan Modifications or Workout Plans.--Absent
contractual provisions to the contrary--
(1) the duty to maximize, or to not adversely affect,
the recovery of total proceeds from pooled residential
mortgage loans is owed by a servicer of such pooled
loans to the securitization vehicle for the benefit of
all investors and holders of beneficial interests in
the pooled loans, in the aggregate, and not to any
individual party or group of parties; and
(2) a servicer of pooled residential mortgage loans
shall be deemed to be acting on behalf of the
securitization vehicle in the best interest of all
investors and holders of beneficial interests in the
pooled loans, in the aggregate, if for a loan that is
in payment default under the loan agreement or for
which payment default is imminent or reasonably
foreseeable, the loan servicer makes or causes to be
made reasonable and documented efforts to implement a
modification or workout plan or, if such efforts are
unsuccessful or such plan would be infeasible, engages
or causes to engage in other loss mitigation, including
accepting a short payment or partial discharge of
principal, or agreeing to a short sale of the property,
to the extent that the servicer reasonably believes the
modification or workout plan or other mitigation
actions will maximize the net present value to be
realized on the loan over that which would be realized
through foreclosure.
(b) Safe Harbor.--Absent contractual provisions to the
contrary, a servicer of a residential mortgage loan that acts
or causes to act in a manner consistent with the duty set forth
in subsection (a), shall not be liable for entering into a
qualified loan modification or workout plan, to--
(1) any person, based on that person's ownership of a
residential mortgage loan or any interest in a pool of
residential mortgage loans or in securities that
distribute payments out of the principal, interest and
other payments in loans on the pool;
(2) any person who is obligated to make payments
pursuant to a derivatives instrument determined in
reference to any interest referred to in paragraph (1);
or
(3) any person that insures any loan or any interest
referred to in paragraph (1) under any law or
regulation of the United States or any law or
regulation of any State or political subdivision of any
State.
(c) Rule of Construction.--No provision of this section shall
be construed as limiting the ability of a servicer to enter
into loan modifications or workout plans other than qualified
loan modification or workout plans.
(d) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Qualified loan modification or workout plan.--The
term ``qualified loan modification or workout plan''
means a modification or plan that--
(A) is scheduled to remain in place until the
borrower sells or refinances the property, or
for at least 5 years from the date of adoption
of the plan, whichever is sooner;
(B) does not provide for a repayment schedule
that results in an increase in the outstanding
principal balance of the loan, including by
deferred or unpaid interest, fees, or other
charges; and
(C) does not require the borrower to pay
additional points and fees.
(2) Residential mortgage loan defined.--The term
``residential mortgage loan'' means a loan that is
secured by a lien on an owner-occupied residential
dwelling.
(3) Securitization vehicle.--The term
``securitization vehicle'' means a trust, corporation,
partnership, limited liability entity, special purpose
entity, or other structure that--
(A) is the issuer, or is created by the
issuer, of mortgage pass-through certificates,
participation certificates, mortgage-backed
securities, or other similar securities backed
by a pool of assets that includes residential
mortgage loans; and
(B) holds such loans.
(e) Effective Period.--This section shall apply only with
respect to qualified loan modification or workout plans
initiated prior to January 1, 2011.
TITLE V--OTHER HOUSING PROVISIONS
SEC. 501. DEPOSITORY INSTITUTION COMMUNITY DEVELOPMENT INVESTMENTS
ENHANCEMENT .
(a) Technical Corrections.--
(1) National banks.--The first sentence of the
paragraph designated as the ``Eleventh'' of section
5136 of the Revised Statutes of the United States (12
U.S.C. 24) (as amended by section 305(a) of the
Financial Services Regulatory Relief Act of 2006) is
amended by striking ``promotes the public welfare by
benefitting primarily'' and inserting ``is designed
primarily to promote the public welfare, including the
welfare of''.
(2) State member banks.--The first sentence of the
23rd undesignated paragraph of section 9 of the Federal
Reserve Act (12 U.S.C. 338a) (as amended by section
305(b) of the Financial Services Regulatory Relief Act
of 2006) is amended by striking ``promotes the public
welfare by benefitting primarily'' and inserting ``is
designed primarily to promote the public welfare,
including the welfare of''.
(b) Investments by Federal Savings Associations Authorized To
Promote the Public Welfare.--
(1) In general.--Section 5(c)(3) of the Home Owners'
Loan Act (12 U.S.C. 1464(c)) is amended by adding at
the end the following new subparagraph:
``(D) Direct investments to promote the
public welfare.--
``(i) In general.--A Federal savings
association may make investments,
directly or indirectly, each of which
is designed primarily to promote the
public welfare, including the welfare
of low- and moderate-income communities
or families through the provision of
housing, services, and jobs.
``(ii) Direct investments or
acquisition of interest in other
companies.--Investments under clause
(i) may be made directly or by
purchasing interests in an entity
primarily engaged in making such
investments.
``(iii) Prohibition on unlimited
liability.--No investment may be made
under this subparagraph which would
subject a Federal savings association
to unlimited liability to any person.
``(iv) Single investment limitation
to be established by director.--Subject
to clauses (v) and (vi), the Director
shall establish, by order or
regulation, limits on--
``(I) the amount any savings
association may invest in any 1
project; and
``(II) the aggregate amount
of investment of any savings
association under this
subparagraph.
``(v) Flexible aggregate investment
limitation.--The aggregate amount of
investments of any savings association
under this subparagraph may not exceed
an amount equal to the sum of 5 percent
of the savings association's capital
stock actually paid in and unimpaired
and 5 percent of the savings
association's unimpaired surplus,
unless--
``(I) the Director determines
that the savings association is
adequately capitalized; and
``(II) the Director
determines, by order, that the
aggregate amount of investments
in a higher amount than the
limit under this clause will
pose no significant risk to the
affected deposit insurance
fund.
``(vi) Maximum aggregate investment
limitation.--Notwithstanding clause
(v), the aggregate amount of
investments of any savings association
under this subparagraph may not exceed
an amount equal to the sum of 15
percent of the savings association's
capital stock actually paid in and
unimpaired and 15 percent of the
savings association's unimpaired
surplus.
``(vii) Investments not subject to
other limitation on quality of
investments.--No obligation a Federal
savings association acquires or retains
under this subparagraph shall be taken
into account for purposes of the
limitation contained in section 28(d)
of the Federal Deposit Insurance Act on
the acquisition and retention of any
corporate debt security not of
investment grade.
``(viii) Applicability of standards
to each investment.--The standards and
limitations of this subparagraph shall
apply to each investment under this
subparagraph made by a savings
association directly and by its
subsidiaries.''.
(2) Technical and conforming amendments.--Section
5(c)(3)(A) of the Home Owners' Loan Act (12 U.S.C.
1464(c)(3)(A)) is amended to read as follows:
``(A) [Repealed]''.
SEC. 502. PRESERVATION OF CERTAIN AFFORDABLE HOUSING DWELLING UNITS.
(a) Conversion of HUD Contracts.--Notwithstanding any other
provision of law, the Secretary of Housing and Urban
Development may, at the request of the owner of the multifamily
housing project to which Section 8 Project Number NY 913 VO
0018 and RAP Contract Number 012035NIRAP are subject, convert
such contracts to a contract for project-based rental
assistance under section 8 of the United States Housing Act of
1937 (42 U.S.C. 1437f).
(b) Initial Renewal.--
(1) Eligibility.--At the request of the owner made no
later than 90 days prior to a conversion, the Secretary
may, to the extent sufficient amounts are made
available in appropriation Acts and notwithstanding any
other law, treat the contemplated resulting contract as
if such contract were eligible for initial renewal
under section 524(a) of the Multifamily Assisted
Housing Reform and Affordability Act of 1997 (42 U.S.C.
1437f note).
(2) Request.--A request by the owner pursuant to
paragraph (1) shall be upon such terms and conditions
as the Secretary may require.
(c) Resulting Contract.--The resulting contract shall--
(1) be subject to section 524(a) of MAHRA (42 U.S.C.
1437f note);
(2) be considered for all purposes a contract that
has been renewed under section 524(a) of MAHRA (42
U.S.C. 1437f note) for a term not to exceed 20 years;
(3) be subsequently renewable at the request of the
owner, under any renewal option for which the project
is eligible under MAHRA (42 U.S.C. 1437f note);
(4) contain provisions limiting distributions, as the
Secretary determines appropriate, not to exceed 10
percent of the initial investment of the owner;
(5) be subject to the availability of sufficient
amounts in appropriation Acts; and
(6) be subject to such other terms and conditions as
the Secretary considers appropriate.
(d) Income Targeting.--The owner shall be deemed to be in
compliance with all income-targeting requirements under the
United States Housing Act of 1937 by serving low-income
families, as such term is defined in the section 3(b)(2) of
such Act (42 U.S.C. 1437a(b)(2)).
(e) Tenant Eligibility.--Notwithstanding any other provision
of law, each family residing in an assisted dwelling unit on
the date of the conversion under this section, subject to the
resulting contract under subsection (a), shall be considered to
meet the applicable requirements for income eligibility and
occupancy.
(f) Definitions.--As used in this section--
(1) the term ``assisted dwelling unit'' means the
dwelling units that, on the date of the conversion
under this section, were subject to Section 8 Project
Number NY 913 VO 0018 or RAP Contract Number
012035NIRAP;
(2) the term ``conversion'' means the action under
which Section 8 Project Number NY 913 VO 0018 and RAP
Contract Number 012035NIRAP become a contract for
project-based rental assistance under section 8 of the
United States Housing Act of 1937 (42 U.S.C. 1437f)
pursuant to subsection (a);
(3) the term ``MAHRA'' means the Multifamily Assisted
Housing Reform and Affordability Act of 1997 (42 U.S.C.
1437f note);
(4) the term ``owner'' means Starrett City Associates
or any successor owner of the multifamily housing
project to which Section 8 Project Number NY 913 VO
0018 and RAP Contract Number 012035NIRAP are subject;
(5) the term ``resulting contract'' means the new
contract after a conversion of Section 8 Project Number
NY 913 VO 0018 and RAP Contract Number 012035NIRAP to a
contract for project-based rental assistance under
section 8 of the United States Housing Act of 1937 (42
U.S.C. 1437f) pursuant to subsection (a); and
(6) the term ``Secretary'' means the Secretary of
Housing and Urban Development.
SEC. 503. ELIGIBILITY OF CERTAIN PROJECTS FOR ENHANCED VOUCHER
ASSISTANCE.
Notwithstanding any other provision of law--
(1) the property known as The Heritage Apartments
(FHA No. 023-44804), in Malden, Massachusetts, shall be
considered eligible low-income housing for purposes of
the eligibility of residents of the property for
enhanced voucher assistance under section 8(t) of the
United States Housing Act of 1937 (42 U.S.C. 1437f(t)),
pursuant to paragraph (2)(A) of section 223(f) of the
Low-Income Housing Preservation and Resident
Homeownership Act of 1990 (12 U.S.C. 4113(f)(2)(A));
(2) such residents shall receive enhanced rental
housing vouchers upon the prepayment of the mortgage
loan for the property under section 236 of the National
Housing Act (12 U.S.C. 1715z-1); and
(3) the Secretary shall approve such prepayment and
subsequent transfer of the property without any further
condition, except that the property shall be restricted
for occupancy, until the original maturity date of the
prepaid mortgage loan, only by families with incomes
not exceeding 80 percent of the adjusted median income
for the area in which the property is located, as
published by the Secretary.
Amounts for the enhanced vouchers pursuant to this section
shall be provided under amounts appropriated for tenant-based
rental assistance otherwise authorized under section 8(t) of
the United States Housing Act of 1937.
SEC. 504. TRANSFER OF CERTAIN RENTAL ASSISTANCE CONTRACTS.
(a) Transfer.--Subject to subsection (c) and notwithstanding
any other provision of law, the Secretary of Housing and Urban
Development shall, at the request of the owner, transfer or
authorize the transfer, of the contracts, restrictions, and
debt described in subsection (b)--
(1) on the housing that is owned or managed by
Community Properties of Ohio Management Services LLC or
an affiliate of Ohio Capital Corporation for Housing
and located in Franklin County, Ohio, to other
properties located in Franklin County, Ohio; and
(2) on the housing that is owned or managed by The
Model Group, Inc., and located in Hamilton County,
Ohio, to other properties located in Hamilton County,
Ohio.
(b) Contracts, Restrictions, and Debt Covered.--The
contracts, restrictions, and debt described in this subsection
are as follows:
(1) All or a portion of a project-based rental
assistance housing assistance payments contract under
section 8 of the United States Housing Act of 1937 (42
U.S.C. 1437f).
(2) Existing Federal use restrictions, including
without limitation use agreements, regulatory
agreements, and accommodation agreements.
(3) Any subordinate debt held by the Secretary or
assigned and any mortgages securing such debt, all
related loan and security documentation and
obligations, and reserve and escrow balances.
(c) Retention of Same Number of Units and Amount of
Assistance.--Any transfer pursuant to subsection (a) shall
result in--
(1) a total number of dwelling units (including units
retained by the owners and units transferred) covered
by assistance described in subsection (b)(1) after the
transfer remaining the same as such number assisted
before the transfer, with such increases or decreases
in unit sizes as may be contained in a plan approved by
a local planning or development commission or
department; and
(2) no reduction in the total amount of the housing
assistance payments under contracts described in
subsection (b)(1).
SEC. 505. PROTECTION AGAINST DISCRIMINATORY TREATMENT.
Section 525 of title 11, the United States Code, is amended
by adding at the end the following:
``(d) A governmental unit that operates a mortgage loan
program, including a loan guarantee or subsidy program, may not
deny the benefits of such program to a disabled veteran (as
defined in section 3741(1) of title 38) because he or she is or
has been a debtor under this title, has been insolvent before
the commencement of a case under this title or during the
pendency of the case but before being granted or denied a
discharge, or has not paid a debt that is dischargeable in the
case under this title.''.
In the matter proposed to be inserted by the amendment of the
Senate to the text of the bill, strike titles VII, IX, and XI.
----------
TEXT OF THE HOUSE AMENDMENT #2 TO THE SENATE AMENDMENT TO
H.R. 3221 MADE IN ORDER UNDER THE RULE
In the matter proposed to be inserted by the Senate amendment
to H.R. 3221, strike titles VI (relating to tax-related
provisions), VIII (relating to REIT investment diversification
and empowerment), and X (relating to clean energy tax stimulus)
and add at the end the following new title (and conform the
table of contents accordingly):
TITLE VII--REVENUE AND OTHER PROVISIONS
SEC. 700. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this
title an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
Subtitle A--Housing Tax Incentives
PART 1--MULTI-FAMILY HOUSING
Subpart A--Low-Income Housing Tax Credit
SEC. 701. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME HOUSING TAX
CREDIT.
Paragraph (3) of section 42(h) is amended by adding at the
end the following new subparagraph:
``(I) Increase in state housing credit
ceiling for 2008 and 2009.--In the case of
calendar years 2008 and 2009, the dollar amount
in effect under subparagraph (C)(ii)(I) for
such calendar year (after any increase under
subparagraph (H)) shall be increased by
$0.20.''.
SEC. 702. DETERMINATION OF CREDIT RATE.
(a) Elimination of Distinction Between New and Existing
Buildings; Minimum Credit Rate for Non-Federally Subsidized
Buildings.--
(1) In general.--Subsection (b) section 42 is amended
to read as follows:
``(b) Applicable Percentage.--For purposes of this section--
``(1) In general.--The term `applicable percentage'
means, with respect to any building, the appropriate
percentage prescribed by the Secretary for the earlier
of--
``(A) the month in which such building is
placed in service, or
``(B) at the election of the taxpayer--
``(i) the month in which the taxpayer
and the housing credit agency enter
into an agreement with respect to such
building (which is binding on such
agency, the taxpayer, and all
successors in interest) as to the
housing credit dollar amount to be
allocated to such building, or
``(ii) in the case of any building to
which subsection (h)(4)(B) applies, the
month in which the tax-exempt
obligations are issued.
A month may be elected under clause (ii) only if the
election is made not later than the 5th day after the
close of such month. Such an election, once made, shall
be irrevocable.
``(2) Method of prescribing percentages.--
``(A) In general.--For purposes of paragraph
(1), the percentages prescribed by the
Secretary for any month shall be--
``(i) in the case of any building
which is not federally subsidized for
the taxable year, the greater of--
``(I) the average percentage
determined under subclause (II)
for months in the preceding
calendar year, or
``(II) the percentage which
will yield over a 10-year
period amounts of credit under
subsection (a) which have a
present value equal to 70
percent of the qualified basis
of such building, and
``(ii) in the case of any other
building, the percentage which will
yield over a 10-year period amounts of
credit under subsection (a) which have
a present value equal to 30 percent of
the qualified basis of such building.
``(B) Method of discounting.--The present
value under subparagraph (A) shall be
determined--
``(i) as of the last day of the 1st
year of the 10-year period referred to
in subparagraph (A),
``(ii) by using a discount rate equal
to 72 percent of the average of the
annual Federal mid-term rate and the
annual Federal long-term rate
applicable under section 1274(d)(1) to
the month applicable under subparagraph
(A) and compounded annually, and
``(iii) by assuming that the credit
allowable under this section for any
year is received on the last day of
such year.
``(3) Cross references.--
``(A) For treatment of certain rehabilitation
expenditures as separate buildings, see
subsection (e).
``(B) For determination of applicable
percentage for increases in qualified basis
after the 1st year of the credit period, see
subsection (f)(3).
``(C) For authority of housing credit agency
to limit applicable percentage and qualified
basis which may be taken into account under
this section with respect to any building, see
subsection (h)(7).''.
(2) Conforming amendments.--
(A) Subparagraph (B) of section 42(e)(3) is
amended by striking ``subsection
(b)(2)(B)(ii)'' and inserting ``subsection
(b)(2)(A)(ii)''.
(B) Subparagraph (A) of section 42(i)(2) is
amended by striking ``new building'' and
inserting ``building''.
(b) Modifications to Definition of Federally Subsidized
Building.--
(1) In general.--Subparagraph (A) of section 42(i)(2)
is amended by striking ``, or any below market Federal
loan,''.
(2) Conforming amendments.--
(A) Subparagraph (B) of section 42(i)(2) is
amended--
(i) by striking ``balance of loan
or'' in the heading thereof,
(ii) by striking ``loan or'' in the
matter preceding clause (i), and
(iii) by striking ``subsection (d)--
'' and all that follows and inserting
``subsection (d) the proceeds of such
obligation.''.
(B) Subparagraph (C) of section 42(i)(2) is
amended--
(i) by striking ``or below market
Federal loan'' in the matter preceding
clause (i),
(ii) in clause (i)--
(I) by striking ``or loan
(when issued or made)'' and
inserting ``(when issued)'',
and
(II) by striking ``the
proceeds of such obligation or
loan'' and inserting ``the
proceeds of such obligation'',
and
(iii) by striking ``, and such loan
is repaid,'' in clause (ii).
(C) Paragraph (2) of section 42(i) is amended
by striking subparagraphs (D) and (E).
(c) Effective Date.--The amendments made by this subsection
shall apply to buildings placed in service after the date of
the enactment of this Act.
SEC. 703. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.
(a) Increase in Credit for Certain State Designated
Buildings.--Subparagraph (C) of section 42(d)(5) (relating to
increase in credit for buildings in high cost areas), before
redesignation under subsection (f), is amended by adding at the
end the following new clause:
``(v) Buildings designated by state
housing credit agency.--Any building
which is designated by the State
housing credit agency as requiring the
increase in credit under this
subparagraph in order for such building
to be financially feasible as part of a
qualified low-income housing project
shall be treated for purposes of this
subparagraph as located in a difficult
development area which is designated
for purposes of this subparagraph. The
preceding sentence shall not apply to
any building if paragraph (1) of
subsection (h) does not apply to any
portion of the eligible basis of such
building by reason of paragraph (4) of
such subsection.''.
(b) Modification to Rehabilitation Requirements.--
(1) In general.--Clause (ii) of section 42(e)(3)(A)
is amended--
(A) by striking ``10 percent'' in subclause
(I) and inserting ``20 percent'', and
(B) by striking ``$3,000'' in subclause (II)
and inserting ``$6,000''.
(2) Inflation adjustment.--Paragraph (3) of section
42(e) is amended by adding at the end the following new
subparagraph:
``(D) Inflation adjustment.--In the case of
any expenditures which are treated under
paragraph (4) as placed in service during any
calendar year after 2009, the $6,000 amount in
subparagraph (A)(ii)(II) shall be increased by
an amount equal to--
``(i) such dollar amount, multiplied
by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
such calendar year by substituting
`calendar year 2008' for `calendar year
1992' in subparagraph (B) thereof.
Any increase under the preceding sentence which
is not a multiple of $100 shall be rounded to
the nearest multiple of $100.''.
(3) Conforming amendment.--Subclause (II) of section
42(f)(5)(B)(ii) is amended by striking ``if subsection
(e)(3)(A)(ii)(II)'' and all that follows and inserting
``if the dollar amount in effect under subsection
(e)(3)(A)(ii)(II) were two-thirds of such amount.''.
(c) Increase in Allowable Community Service Facility Space
for Small Projects.--Clause (ii) of section 42(d)(4)(C)
(relating to limitation) is amended by striking ``10 percent of
the eligible basis of the qualified low-income housing project
of which it is a part. For purposes of'' and inserting ``the
sum of--
``(I) 15 percent of so much
of the eligible basis of the
qualified low-income housing
project of which it is a part
as does not exceed $5,000,000,
plus
``(II) 10 percent of so much
of the eligible basis of such
project as is not taken into
account under subclause (I).
For purposes of''.
(d) Clarification of Treatment of Federal Grants.--
Subparagraph (A) of section 42(d)(5) is amended to read as
follows:
``(A) Federal grants not taken into account
in determining eligible basis.--The eligible
basis of a building shall not include any costs
financed with the proceeds of a Federally
funded grant.''.
(e) Simplification of Related Party Rules.--Clause (iii) of
section 42(d)(2)(D), before redesignation under subsection
(f)(2), is amended--
(1) by striking all that precedes subclause (II),
(2) by redesignating subclause (II) as clause (iii)
and moving such clause two ems to the left, and
(3) by striking the last sentence thereof.
(f) Repeal of Deadwood.--
(1) Clause (ii) of section 42(d)(2)(B) is amended by
striking ``the later of--'' and all that follows and
inserting ``the date the building was last placed in
service,''.
(2) Subparagraph (D) of section 42(d)(2) is amended
by striking clause (i) and by redesignating clauses
(ii) and (iii) as clauses (i) and (ii), respectively.
(3) Paragraph (5) of section 42(d) is amended by
striking subparagraph (B) and by redesignating
subparagraph (C) as subparagraph (B).
(g) Effective Date.--The amendments made by this subsection
shall apply to buildings placed in service after the date of
the enactment of this Act.
SEC. 704. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME HOUSING TAX
INCENTIVES.
(a) Repeal Prohibition on Moderate Rehabilitation
Assistance.--Paragraph (2) of section 42(c) (defining qualified
low-income building) is amended by striking the flush sentence
at the end.
(b) Modification of Time Limit for Incurring 10 Percent of
Project's Cost.--Clause (ii) of section 42(h)(1)(E) is amended
by striking ``(as of the later of the date which is 6 months
after the date that the allocation was made or the close of the
calendar year in which the allocation is made)'' and inserting
``(as of the date which is 1 year after the date that the
allocation was made)''.
(c) Repeal of Bonding Requirement on Disposition of
Building.--Paragraph (6) of section 42(j) (relating to no
recapture on disposition of building (or interest therein)
where bond posted) is amended to read as follows:
``(6) No recapture on disposition of building which
continues in qualified use.--
``(A) In general.--The increase in tax under
this subsection shall not apply solely by
reason of the disposition of a building (or an
interest therein) if it is reasonably expected
that such building will continue to be operated
as a qualified low-income building for the
remaining compliance period with respect to
such building.
``(B) Statute of limitations.--If a building
(or an interest therein) is disposed of during
any taxable year and there is any reduction in
the qualified basis of such building which
results in an increase in tax under this
subsection for such taxable or any subsequent
taxable year, then--
``(i) the statutory period for the
assessment of any deficiency with
respect to such increase in tax shall
not expire before the expiration of 3
years from the date the Secretary is
notified by the taxpayer (in such
manner as the Secretary may prescribe)
of such reduction in qualified basis,
and
``(ii) such deficiency may be
assessed before the expiration of such
3-year period notwithstanding the
provisions of any other law or rule of
law which would otherwise prevent such
assessment.''.
(d) Energy Efficiency and Historic Nature Taken Into Account
in Making Allocations.--Subparagraph (C) of section 42(m)(1)
(relating to plans for allocation of credit among projects) is
amended by striking ``and'' at the end of clause (vii), by
striking the period at the end of clause (viii) and inserting a
comma, and by adding at the end the following new clauses:
``(ix) the energy efficiency of the
project, and
``(x) the historic nature of the
project.''.
(e) Continued Eligibility for Students Who Received Foster
Care Assistance.--Clause (i) of section 42(i)(3)(D) is amended
by striking ``or'' at the end of subclause (I), by
redesignating subclause (II) as subclause (III), and by
inserting after subclause (I) the following new subclause:
``(II) a student who was
previously under the care and
placement responsibility of the
State agency responsible for
administering a plan under part
B or part E of title IV of the
Social Security Act, or''.
(f) Treatment of Rural Projects.--Section 42(i) (relating to
definitions and special rules) is amended by adding at the end
the following new paragraph:
``(8) Treatment of rural projects.--For purposes of
this section, in the case of any project for
residential rental property located in a rural area (as
defined in section 520 of the Housing Act of 1949), any
income limitation measured by reference to area median
gross income shall be measured by reference to the
greater of area median gross income or national non-
metropolitan median income. The preceding sentence
shall not apply with respect to any building if
paragraph (1) of section 42(h) does not apply by reason
of paragraph (4) thereof to any portion of the credit
determined under this section with respect to such
building.''.
(g) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply to buildings placed in service after the date of
the enactment of this Act.
(2) Repeal of bonding requirement on disposition of
building.--The amendment made by subsection (c) shall
apply to--
(A) interests in buildings disposed after the
date of the enactment of this Act, and
(B) interests in buildings disposed of on or
before such date if--
(i) it is reasonably expected that
such building will continue to be
operated as a qualified low-income
building (within the meaning of section
42 of the Internal Revenue Code of
1986) for the remaining compliance
period (within the meaning of such
section) with respect to such building,
and
(ii) the taxpayer elects the
application of this subparagraph with
respect to such disposition.
Notwithstanding the preceding sentence, the amendments
made by subsection (c) shall not apply to any
disposition after the date 5 years after the date of
the enactment of this Act.
(3) Energy efficiency and historic nature taken into
account in making allocations.--The amendments made by
subsection (d) shall apply to allocations made after
December 31, 2008.
(4) Continued eligibility for students who received
foster care assistance.--The amendments made by
subsection (e) shall apply to determinations made after
the date of the enactment of this Act.
(5) Treatment of rural projects.--The amendment made
by subsection (f) shall apply to determinations made
after the date of the enactment of this Act.
Subpart B--Modifications to Tax-Exempt Housing Bond Rules
SEC. 706. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING RESIDENTIAL RENTAL
PROJECTS.
(a) In General.--Subsection (i) of section 146 (relating to
treatment of refunding issues) is amended by adding at the end
the following new paragraph:
``(6) Treatment of certain residential rental project
bonds as refunding bonds irrespective of obligor.--
``(A) In general.--If, during the 6-month
period beginning on the date of a repayment of
a loan financed by an issue 95 percent or more
of the net proceeds of which are used to
provide projects described in section 142(d),
such repayment is used to provide a new loan
for any project so described, any bond which is
issued to refinance such issue shall be treated
as a refunding issue to the extent the
principal amount of such refunding issue does
not exceed the principal amount of the bonds
refunded.
``(B) Limitations.--Subparagraph (A) shall
apply to only one refunding of the original
issue and only if--
``(i) the refunding issue is issued
not later than 4 years after the date
on which the original issue was issued,
``(ii) the latest maturity date of
any bond of the refunding issue is not
later than 34 years after the date on
which the refunded bond was issued, and
``(iii) the refunding issue is
approved in accordance with section
147(f) before the issuance of the
refunding issue.''.
(b) Low-Income Housing Credit.--Clause (ii) of section
42(h)(4)(A) is amended by inserting ``or such financing is
refunded as described in section 146(i)(6)'' before the period
at the end.
(c) Effective Date.--The amendments made by this section
shall apply to repayments of loans received after the date of
the enactment of this Act.
SEC. 707. COORDINATION OF CERTAIN RULES APPLICABLE TO LOW-INCOME
HOUSING CREDIT AND QUALIFIED RESIDENTIAL RENTAL
PROJECT EXEMPT FACILITY BONDS.
(a) Determination of Next Available Unit.--Paragraph (3) of
section 142(d) (relating to current income determinations) is
amended by adding at the end the following new subparagraph:
``(C) Exception for projects with respect to
which affordable housing credit is allowed.--In
the case of a project with respect to which
credit is allowed under section 42, the second
sentence of subparagraph (B) shall be applied
by substituting `building (within the meaning
of section 42)' for `project'.''.
(b) Students.--Paragraph (2) of section 142(d) (relating to
definitions and special rules) is amended by adding at the end
the following new subparagraph:
``(C) Students.--Rules similar to the rules
of 42(i)(3)(D) shall apply for purposes of this
subsection.''.
(c) Single-Room Occupancy Units.--Paragraph (2) of section
142(d) (relating to definitions and special rules), as amended
by subsection (b), is further amended by adding at the end the
following new subparagraph:
``(D) Single-room occupancy units.--A unit
shall not fail to be treated as a residential
unit merely because such unit is a single-room
occupancy unit (within the meaning of section
42).''.
(d) Effective Date.--The amendments made by this section
shall apply to determinations of the status of qualified
residential rental projects for periods beginning after the
date of the enactment of this Act, with respect to bonds issued
before, on, or after such date.
Subpart C--Reforms Related to the Low-Income Housing Credit and Tax-
Exempt Housing Bonds
SEC. 709. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS INCOME.
(a) In General.--Paragraph (2) of section 142(d), as amended
by section 707, is further amended by adding at the end the
following new subparagraph:
``(E) Hold harmless for reductions in area
median gross income.--
``(i) In general.--Any determination
of area median gross income under
subparagraph (B) with respect to any
project for any calendar year after
2008 shall not be less than the area
median gross income determined under
such subparagraph with respect to such
project for the calendar year preceding
the calendar year for which such
determination is made.
``(ii) Special rule for certain
census changes.--In the case of a HUD
hold harmless impacted project, the
area median gross income with respect
to such project for any calendar year
after 2008 (hereafter in this clause
referred to as the current calendar
year) shall be the greater of the
amount determined without regard to
this clause or the sum of--
``(I) the area median gross
income determined under the HUD
hold harmless policy with
respect to such project for
calendar year 2008, plus
``(II) any increase in the
area median gross income
determined under subparagraph
(B) (determined without regard
to the HUD hold harmless policy
and this subparagraph) with
respect to such project for the
current calendar year over the
area median gross income (as so
determined) with respect to
such project for calendar year
2008.
``(iii) HUD hold harmless policy.--
The term `HUD hold harmless policy'
means the regulations under which a
policy similar to the rules of clause
(i) applied to prevent a change in the
method of determining area median gross
income from resulting in a reduction in
the area median gross income determined
with respect to certain projects in
calendar years 2007 and 2008.
``(iv) HUD hold harmless impacted
project.--The term `HUD hold harmless
impacted project' means any project
with respect to which area median gross
income was determined under
subparagraph (B) for calendar year 2007
or 2008 if such determination would
have been less but for the HUD hold
harmless policy.''.
(b) Effective Date.--The amendment made by this section shall
apply to determinations of area median gross income for
calendar years after 2008.
SEC. 710. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINATION REQUIREMENT
WHERE DETERMINATION NOT RELEVANT.
(a) In General.--Subparagraph (A) of section 142(d)(3) is
amended by adding at the end the following new sentence: ``The
preceding sentence shall not apply with respect to any project
for any year if during such year no residential unit in the
project is occupied by a new resident whose income exceeds the
applicable income limit.''.
(b) Effective Date.--The amendment made by this section shall
apply to years ending after the date of the enactment of this
Act.
PART 2--SINGLE FAMILY HOUSING
SEC. 712. FIRST-TIME HOMEBUYER CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 is amended by redesignating section 36 as section 37
and by inserting after section 35 the following new section:
``SEC. 36. FIRST-TIME HOMEBUYER CREDIT.
``(a) Allowance of Credit.--In the case of an individual who
is a first-time homebuyer of a principal residence in the
United States during a taxable year, there shall be allowed as
a credit against the tax imposed by this subtitle for such
taxable year an amount equal to 10 percent of the purchase
price of the residence.
``(b) Limitations.--
``(1) Dollar limitation.--
``(A) In general.--Except as otherwise
provided in this paragraph, the credit allowed
under subsection (a) shall not exceed $7,500.
``(B) Married individuals filing
separately.--In the case of a married
individual filing a separate return,
subparagraph (A) shall be applied by
substituting `$3,750' for `$7,500'.
``(C) Other individuals.--If two or more
individuals who are not married purchase a
principal residence, the amount of the credit
allowed under subsection (a) shall be allocated
among such individuals in such manner as the
Secretary may prescribe, except that the total
amount of the credits allowed to all such
individuals shall not exceed $7,500.
``(2) Limitation based on modified adjusted gross
income.--
``(A) In general.--The amount allowable as a
credit under subsection (a) (determined without
regard to this paragraph) for the taxable year
shall be reduced (but not below zero) by the
amount which bears the same ratio to the amount
which is so allowable as--
``(i) the excess (if any) of--
``(I) the taxpayer's modified
adjusted gross income for such
taxable year, over
``(II) $70,000 ($140,000 in
the case of a joint return),
bears to
``(ii) $20,000.
``(B) Modified adjusted gross income.--For
purposes of subparagraph (A), the term
`modified adjusted gross income' means the
adjusted gross income of the taxpayer for the
taxable year increased by any amount excluded
from gross income under section 911, 931, or
933.
``(c) Definitions.--For purposes of this section--
``(1) First-time homebuyer.--The term `first-time
homebuyer' means any individual if such individual (and
if married, such individual's spouse) had no present
ownership interest in a principal residence during the
3-year period ending on the date of the purchase of the
principal residence to which this section applies.
``(2) Principal residence.--The term `principal
residence' has the same meaning as when used in section
121.
``(3) Purchase.--
``(A) In general.--The term `purchase' means
any acquisition, but only if--
``(i) the property is not acquired
from a person related to the person
acquiring it, and
``(ii) the basis of the property in
the hands of the person acquiring it is
not determined--
``(I) in whole or in part by
reference to the adjusted basis
of such property in the hands
of the person from whom
acquired, or
``(II) under section 1014(a)
(relating to property acquired
from a decedent).
``(B) Construction.--A residence which is
constructed by the taxpayer shall be treated as
purchased by the taxpayer on the date the
taxpayer first occupies such residence.
``(4) Purchase price.--The term `purchase price'
means the adjusted basis of the principal residence on
the date such residence is purchased.
``(5) Related persons.--A person shall be treated as
related to another person if the relationship between
such persons would result in the disallowance of losses
under section 267 or 707(b) (but, in applying section
267(b) and (c) for purposes of this section, paragraph
(4) of section 267(c) shall be treated as providing
that the family of an individual shall include only his
spouse, ancestors, and lineal descendants).
``(d) Exceptions.--No credit under subsection (a) shall be
allowed to any taxpayer for any taxable year with respect to
the purchase of a residence if--
``(1) a credit under section 1400C (relating to
first-time homebuyer in the District of Columbia) is
allowable to the taxpayer (or the taxpayer's spouse)
for such taxable year or any prior taxable year,
``(2) the residence is financed by the proceeds of a
qualified mortgage issue the interest on which is
exempt from tax under section 103,
``(3) the taxpayer is a nonresident alien, or
``(4) the taxpayer disposes of such residence (or
such residence ceases to be the principal residence of
the taxpayer (and, if married, the taxpayer's spouse))
before the close of such taxable year.
``(e) Reporting.--If the Secretary requires information
reporting under section 6045 by a person described in
subsection (e)(2) thereof to verify the eligibility of
taxpayers for the credit allowable by this section, the
exception provided by section 6045(e) shall not apply.
``(f) Recapture of Credit.--
``(1) In general.--Except as otherwise provided in
this subsection, if a credit under subsection (a) is
allowed to a taxpayer, the tax imposed by this chapter
shall be increased by 6\2/3\ percent of the amount of
such credit for each taxable year in the recapture
period.
``(2) Acceleration of recapture.--If a taxpayer
disposes of the principal residence with respect to
which a credit was allowed under subsection (a) (or
such residence ceases to be the principal residence of
the taxpayer (and, if married, the taxpayer's spouse))
before the end of the recapture period--
``(A) the tax imposed by this chapter for the
taxable year of such disposition or cessation,
shall be increased by the excess of the amount
of the credit allowed over the amounts of tax
imposed by paragraph (1) for preceding taxable
years, and
``(B) paragraph (1) shall not apply with
respect to such credit for such taxable year or
any subsequent taxable year.
``(3) Limitation based on gain.--In the case of the
sale of the principal residence to a person who is not
related to the taxpayer, the increase in tax determined
under paragraph (2) shall not exceed the amount of gain
(if any) on such sale. Solely for purposes of the
preceding sentence, the adjusted basis of such
residence shall be reduced by the amount of the credit
allowed under subsection (a) to the extent not
previously recaptured under paragraph (1).
``(4) Exceptions.--
``(A) Death of taxpayer.--Paragraphs (1) and
(2) shall not apply to any taxable year ending
after the date of the taxpayer's death.
``(B) Involuntary conversion.--Paragraph (2)
shall not apply in the case of a residence
which is compulsorily or involuntarily
converted (within the meaning of section
1033(a)) if the taxpayer acquires a new
principal residence during the 2-year period
beginning on the date of the disposition or
cessation referred to in paragraph (2).
Paragraph (2) shall apply to such new principal
residence during the recapture period in the
same manner as if such new principal residence
were the converted residence.
``(C) Transfers between spouses or incident
to divorce.--In the case of a transfer of a
residence to which section 1041(a) applies--
``(i) paragraph (2) shall not apply
to such transfer, and
``(ii) in the case of taxable years
ending after such transfer, paragraphs
(1) and (2) shall apply to the
transferee in the same manner as if
such transferee were the transferor
(and shall not apply to the
transferor).
``(5) Joint returns.--In the case of a credit allowed
under subsection (a) with respect to a joint return,
half of such credit shall be treated as having been
allowed to each individual filing such return for
purposes of this subsection.
``(6) Recapture period.--For purposes of this
subsection, the term `recapture period' means the 15
taxable years beginning with the second taxable year
following the taxable year in which the purchase of the
principal residence for which a credit is allowed under
subsection (a) was made.
``(g) Application of Section.--This section shall only apply
to a principal residence purchased by the taxpayer on or after
April 9, 2008, and before April 1, 2009.''.
(b) Conforming Amendments.--
(1) Section 26(b)(2) is amended by striking ``and''
at the end of subparagraph (U), by striking the period
and inserting ``, and'' and the end of subparagraph
(V), and by inserting after subparagraph (V) the
following new subparagraph:
``(W) section 36(f) (relating to recapture of
homebuyer credit).''.
(2) Section 6211(b)(4)(A) is amended by striking
``34,'' and all that follows through ``6428'' and
inserting ``34, 35, 36, 53(e), and 6428''.
(3) Section 1324(b)(2) of title 31, United States
Code, is amended by inserting ``, 36,'' after ``section
35''.
(4) The table of sections for subpart C of part IV of
subchapter A of chapter 1 is amended by redesignating
the item relating to section 36 as an item relating to
section 37 and by inserting before such item the
following new item:
``Sec. 36. First-time homebuyer credit.''.
(c) Effective Date.--The amendments made by this section
shall apply to residences purchased on or after April 9, 2008,
in taxable years ending on or after such date.
SEC. 713. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY TAXES FOR
NONITEMIZERS.
(a) In General.--Section 63(c)(1) (defining standard
deduction) is amended by striking ``and'' at the end of
subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``, and'', and by adding at the
end the following new subparagraph:
``(C) in the case of any taxable year
beginning in 2008, the real property tax
deduction.''.
(b) Definition.--Section 63(c) is amended by adding at the
end the following new paragraph:
``(7) Real property tax deduction.--For purposes of
paragraph (1), the real property tax deduction is the
lesser of--
``(A) the amount allowable as a deduction
under this chapter for State and local taxes
described in section 164(a)(1), or
``(B) $350 ($700 in the case of a joint
return).
Any taxes taken into account under section 62(a) shall
not be taken into account under this paragraph.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2007.
PART 3--GENERAL PROVISIONS
SEC. 715. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING BOND RULES.
(a) Temporary Increase in Volume Cap.--
(1) In general.--Subsection (d) of section 146 is
amended by adding at the end the following new
paragraph:
``(5) Increase and set aside for housing bonds for
2008.--
``(A) Increase for 2008.--In the case of
calendar year 2008, the State ceiling for each
State shall be increased by an amount equal to
$10,000,000,000 multiplied by a fraction--
``(i) the numerator of which is the
population of such State, and
``(ii) the denominator of which is
the total population of all States.
``(B) Set aside.--
``(i) In general.--Any amount of the
State ceiling for any State which is
attributable to an increase under this
paragraph shall be allocated solely for
one or more qualified housing issues.
``(ii) Qualified housing issue.--For
purposes of this paragraph, the term
`qualified housing issue' means--
``(I) an issue described in
section 142(a)(7) (relating to
qualified residential rental
projects), or
``(II) a qualified mortgage
issue (determined by
substituting `12-month period'
for `42-month period' each
place it appears in section
143(a)(2)(D)(i)).''.
(2) Carryforward of unused limitations.--Subsection
(f) of section 146 is amended by adding at the end the
following new paragraph:
``(6) Special rules for increased volume cap under
subsection (d)(5).--No amount which is attributable to
the increase under subsection (d)(5) may be used--
``(A) for any issue other than a qualified
housing issue (as defined in subsection
(d)(5)), or
``(B) to issue any bond after calendar year
2010.''.
(b) Temporary Rule for Use of Qualified Mortgage Bonds
Proceeds for Subprime Refinancing Loans.--
(1) In general.--Section 143(k) (relating to other
definitions and special rules) is amended by adding at
the end the following new paragraph:
``(12) Special rules for subprime refinancings.--
``(A) In general.--Notwithstanding the
requirements of subsection (i)(1), the proceeds
of a qualified mortgage issue may be used to
refinance a mortgage on a residence which was
originally financed by the mortgagor through a
qualified subprime loan.
``(B) Special rules.--In applying
subparagraph (A) to any refinancing--
``(i) subsection (a)(2)(D)(i) shall
be applied by substituting `12-month
period' for `42-month period' each
place it appears,
``(ii) subsection (d) (relating to 3-
year requirement) shall not apply, and
``(iii) subsection (e) (relating to
purchase price requirement) shall be
applied by using the market value of
the residence at the time of
refinancing in lieu of the acquisition
cost.
``(C) Qualified subprime loan.--The term
`qualified subprime loan' means an adjustable
rate single-family residential mortgage loan
made after December 31, 2001, and before
January 1, 2008, that the bond issuer
determines would be reasonably likely to cause
financial hardship to the borrower if not
refinanced.
``(D) Termination.--This paragraph shall not
apply to any bonds issued after December 31,
2010.''.
(c) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment of
this Act.
SEC. 716. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON TAX-EXEMPT
HOUSING BONDS, LOW-INCOME HOUSING TAX CREDIT, AND
REHABILITATION CREDIT.
(a) Tax-Exempt Interest on Certain Housing Bonds Exempted
From Alternative Minimum Tax.--
(1) In general.--Subparagraph (C) of section 57(a)(5)
(relating to specified private activity bonds) is
amended by redesignating clauses (iii) and (iv) as
clauses (iv) and (v), respectively, and by inserting
after clause (ii) the following new clause:
``(iii) Exception for certain housing
bonds.--For purposes of clause (i), the
term `private activity bond' shall not
include any bond issued after the date
of the enactment of this clause if such
bond is--
``(I) an exempt facility bond
issued as part of an issue 95
percent or more of the net
proceeds of which are to be
used to provide qualified
residential rental projects (as
defined in section 142(d)),
``(II) a qualified mortgage
bond (as defined in section
143(a)), or
``(III) a qualified veterans'
mortgage bond (as defined in
section 143(b)).
The preceding sentence shall not apply
to any refunding bond unless such
preceding sentence applied to the
refunded bond (or in the case of a
series of refundings, the original
bond).''.
(2) No adjustment to adjusted current earnings.--
Subparagraph (B) of section 56(g)(4) is amended by
adding at the end the following new clause:
``(iii) Tax exempt interest on
certain housing bonds.--Clause (i)
shall not apply in the case of any
interest on a bond to which section
57(a)(5)(C)(iii) applies.''.
(b) Allowance of Low-Income Housing Credit Against
Alternative Minimum Tax.--Subparagraph (B) of section 38(c)(4)
(relating to specified credits) is amended by redesignating
clauses (ii) through (iv) as clauses (iii) through (v) and
inserting after clause (i) the following new clause:
``(ii) the credit determined under
section 42 to the extent attributable
to buildings placed in service after
December 31, 2007,''.
(c) Allowance of Rehabilitation Credit Against Alternative
Minimum Tax.--Subparagraph (B) of section 38(c)(4), as amended
by subsection (b), is amended by striking ``and'' at the end of
clause (iv), by redesignating clause (v) as clause (vi), and by
inserting after clause (iv) the following new clause:
``(v) the credit determined under
section 47 to the extent attributable
to qualified rehabilitation
expenditures properly taken into
account for periods after December 31,
2007, and''.
(d) Effective Date.--
(1) Housing bonds.--The amendments made by subsection
(a) shall apply to bonds issued after the date of the
enactment of this Act.
(2) Low income housing credit.--The amendments made
by subsection (b) shall apply to credits determined
under section 42 of the Internal Revenue Code of 1986
to the extent attributable to buildings placed in
service after December 31, 2007.
(3) Rehabilitation credit.--The amendments made by
subsection (c) shall apply to credits determined under
section 47 of the Internal Revenue Code of 1986 to the
extent attributable to qualified rehabilitation
expenditures properly taken into account for periods
after December 31, 2007.
SEC. 717. BONDS GUARANTEED BY FEDERAL HOME LOAN BANKS ELIGIBLE FOR
TREATMENT AS TAX-EXEMPT BONDS.
(a) In General.--Subparagraph (A) of section 149(b)(3)
(relating to exceptions for certain insurance programs) is
amended by striking ``or'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting
``, or'' and by adding at the end the following new clause:
``(iv) any guarantee by a Federal
home loan bank made in connection with
the original issuance of a bond during
the period beginning on the date of the
enactment of this Act and ending on
December 31, 2010 (or a renewal or
extension of a guarantee so made).''.
(b) Safety and Soundness Requirements.--Paragraph (3) of
section 149(b) is amended by adding at the end the following
new subparagraph:
``(E) Safety and soundness requirements for
federal home loan banks.--Clause (iv) of
subparagraph (A) shall not apply to any
guarantee by a Federal home loan bank unless
such bank meets safety and soundness collateral
requirements for such guarantees which are at
least as stringent as such requirements which
apply under regulations applicable to such
guarantees by Federal home loan banks as in
effect on April 9, 2008.''.
(c) Effective Date.--The amendments made by this section
shall apply to guarantees made after the date of the enactment
of this Act.
SEC. 718. MODIFICATION OF RULES PERTAINING TO FIRPTA NONFOREIGN
AFFIDAVITS.
(a) In General.--Subsection (b) of section 1445 (relating to
exemptions) is amended by adding at the end the following:
``(9) Alternative procedure for furnishing nonforeign
affidavit.--For purposes of paragraphs (2) and (7)--
``(A) In general.--Paragraph (2) shall be
treated as applying to a transaction if, in
connection with a disposition of a United
States real property interest--
``(i) the affidavit specified in
paragraph (2) is furnished to a
qualified substitute, and
``(ii) the qualified substitute
furnishes a statement to the transferee
stating, under penalty of perjury, that
the qualified substitute has such
affidavit in his possession.
``(B) Regulations.--The Secretary shall
prescribe such regulations as may be necessary
or appropriate to carry out this paragraph.''.
(b) Qualified Substitute.--Subsection (f) of section 1445
(relating to definitions) is amended by adding at the end the
following new paragraph:
``(6) Qualified substitute.--The term `qualified
substitute' means, with respect to a disposition of a
United States real property interest--
``(A) the person (including any attorney or
title company) responsible for closing the
transaction, other than the transferor's agent,
and
``(B) the transferee's agent.''.
(c) Exemption Not To Apply if Knowledge or Notice That
Affidavit or Statement Is False.--
(1) In general.--Paragraph (7) of section 1445(b)
(relating to special rules for paragraphs (2) and (3))
is amended to read as follows:
``(7) Special rules for paragraphs (2), (3), and
(9).--Paragraph (2), (3), or (9) (as the case may be)
shall not apply to any disposition--
``(A) if--
``(i) the transferee or qualified
substitute has actual knowledge that
the affidavit referred to in such
paragraph, or the statement referred to
in paragraph (9)(A)(ii), is false, or
``(ii) the transferee or qualified
substitute receives a notice (as
described in subsection (d)) from a
transferor's agent, transferee's agent,
or qualified substitute that such
affidavit or statement is false, or
``(B) if the Secretary by regulations
requires the transferee or qualified substitute
to furnish a copy of such affidavit or
statement to the Secretary and the transferee
or qualified substitute fails to furnish a copy
of such affidavit or statement to the Secretary
at such time and in such manner as required by
such regulations.''.
(2) Liability.--
(A) Notice.--Paragraph (1) of section 1445(d)
(relating to notice of false affidavit; foreign
corporations) is amended to read as follows:
``(1) Notice of false affidavit; foreign
corporations.--If--
``(A) the transferor furnishes the transferee
or qualified substitute an affidavit described
in paragraph (2) of subsection (b) or a
domestic corporation furnishes the transferee
an affidavit described in paragraph (3) of
subsection (b), and
``(B) in the case of--
``(i) any transferor's agent--
``(I) such agent has actual
knowledge that such affidavit
is false, or
``(II) in the case of an
affidavit described in
subsection (b)(2) furnished by
a corporation, such corporation
is a foreign corporation, or
``(ii) any transferee's agent or
qualified substitute, such agent or
substitute has actual knowledge that
such affidavit is false,
such agent or qualified substitute shall so
notify the transferee at such time and in such
manner as the Secretary shall require by
regulations.''.
(B) Failure to furnish notice.--Paragraph (2)
of section 1445(d) (relating to failure to
furnish notice) is amended to read as follows:
``(2) Failure to furnish notice.--
``(A) In general.--If any transferor's agent,
transferee's agent, or qualified substitute is
required by paragraph (1) to furnish notice,
but fails to furnish such notice at such time
or times and in such manner as may be required
by regulations, such agent or substitute shall
have the same duty to deduct and withhold that
the transferee would have had if such agent or
substitute had complied with paragraph (1).
``(B) Liability limited to amount of
compensation.--An agent's or substitute's
liability under subparagraph (A) shall be
limited to the amount of compensation the agent
or substitute derives from the transaction.''.
(C) Conforming amendment.--The heading for
section 1445(d) is amended by striking ``or
Transferee's Agents'' and inserting ``,
Transferee's Agents, or Qualified
Substitutes''.
(d) Effective Date.--The amendments made by this section
shall apply to dispositions of United States real property
interests after the date of the enactment of this Act.
SEC. 719. MODIFICATION OF DEFINITION OF TAX-EXEMPT USE PROPERTY FOR
PURPOSES OF THE REHABILITATION CREDIT.
(a) In General.--Subclause (I) of section 47(c)(2)(B)(v) is
amended by striking ``section 168(h)'' and inserting ``section
168(h), except that `50 percent' shall be substituted for `35
percent' in paragraph (1)(B)(iii) thereof''.
(b) Effective Date.--The amendments made by this section
shall apply to expenditures properly taken into account for
periods after December 31, 2007.
Subtitle B--Reforms Related to Real Estate Investment Trusts
PART 1--FOREIGN CURRENCY AND OTHER QUALIFIED ACTIVITIES
SEC. 721. REVISIONS TO REIT INCOME TESTS.
(a) Addition of Permissible Income Categories.--Section
856(c) (relating to limitations) is amended--
(1) by striking ``and'' at the end of paragraph
(2)(G) and by inserting after paragraph (2)(H) the
following new subparagraphs:
``(I) passive foreign exchange gains; and
``(J) any other item of income or gain as
determined by the Secretary;'', and
(2) by striking ``and'' at the end of paragraphs
(3)(H) and (3)(I) and by inserting after paragraph
(3)(I) the following new subparagraphs:
``(J) real estate foreign exchange gains; and
``(K) any other item of income or gain as
determined by the Secretary; and''.
(b) Rules Regarding Foreign Currency Transactions.--Section
856 (defining real estate investment trust) is amended by
adding at the end the following new subsection:
``(n) Rules Regarding Foreign Currency Transactions.--With
respect to any taxable year--
``(1) Real estate foreign exchange gains.--For
purposes of subsection (c)(3)(J), the term `real estate
foreign exchange gains' means--
``(A) foreign currency gains (as defined in
section 988(b)(1)) which are attributable to--
``(i) any item described in
subsection (c)(3) (other than in
subparagraph (J) thereof),
``(ii) the acquisition or ownership
of obligations secured by mortgages on
real property or on interests in real
property (other than foreign currency
gains attributable to any item
described in clause (i)), or
``(iii) becoming or being the obligor
under obligations secured by mortgages
on real property or on interests in
real property (other than foreign
currency gains attributable to any item
described in clause (i)),
``(B) gains described in section 987
attributable to a qualified business unit (as
defined by section 989) of the real estate
investment trust, but only if such qualified
business unit meets the requirements under--
``(i) subsection (c)(3) (without
regard to subparagraph (J) thereof) for
the taxable year, and
``(ii) subsection (c)(4)(A) at the
close of each quarter that the real
estate investment trust has directly or
indirectly held the qualified business
unit, and
``(C) any other foreign currency gains as
determined by the Secretary.
``(2) Passive foreign exchange gains.--For purposes
of subsection (c)(2)(I), the term `passive foreign
exchange gains' means--
``(A) real estate foreign exchange gains,
``(B) foreign currency gains (as defined in
section 988(b)(1)) which are not described in
subparagraph (A) and which are attributable to
any item described in subsection (c)(2) (other
than in subparagraph (I) thereof), and
``(C) any other foreign currency gains as
determined by the Secretary.''.
(c) Addition to REIT Hedging Rule.--Subparagraph (G) of
section 856(c)(5) is amended to read as follows:
``(G) Treatment of certain hedging
instruments.--Except to the extent as
determined by the Secretary--
``(i) any income of a real estate
investment trust from a hedging
transaction (as defined in clause (ii)
or (iii) of section 1221(b)(2)(A))
which is clearly identified pursuant to
section 1221(a)(7), including gain from
the sale or disposition of such a
transaction, shall not constitute gross
income under paragraphs (2) and (3) to
the extent that the transaction hedges
any indebtedness incurred or to be
incurred by the trust to acquire or
carry real estate assets, and
``(ii) any income of a real estate
investment trust from a transaction
entered into by the trust primarily to
manage risk of currency fluctuations
with respect to any item described in
paragraph (2) or (3), including gain
from the termination of such a
transaction, shall not constitute gross
income under paragraphs (2) and (3),
but only if such transaction is clearly
identified as such before the close of
the day on which it was acquired,
originated, or entered into (or such
other time as the Secretary may
prescribe).''.
(d) Authority to Exclude Items of Income From REIT Income
Tests.--Section 856(c)(5) is amended by adding at the end the
following new subparagraph:
``(H) Secretarial authority to exclude other
items of income.--The Secretary is authorized
to determine whether any item of income or gain
which does not otherwise qualify under
paragraph (2) or (3) may be considered as not
constituting gross income solely for purposes
of this part.''.
SEC. 722. REVISIONS TO REIT ASSET TESTS.
(a) Clarification of Valuation Test.--The first sentence in
the matter following section 856(c)(4)(B)(iii)(III) is amended
by inserting ``(including a discrepancy caused solely by the
change in the foreign currency exchange rate used to value a
foreign asset)'' after ``such requirements''.
(b) Clarification of Permissible Asset Category.--Section
856(c)(5), as amended by section 721(d), is amended by adding
at the end the following new subparagraph:
``(I) Cash.--The term `cash' includes foreign
currency if the real estate investment trust or
its qualified business unit (as defined in
section 989) uses such foreign currency as its
functional currency (as defined in section
985(b)).''.
SEC. 723. CONFORMING FOREIGN CURRENCY REVISIONS.
(a) Net Income From Foreclosure Property.--Clause (i) of
section 857(b)(4)(B) is amended to read as follows:
``(i) gain (including any foreign
currency gain, as defined in section
988(b)(1)) from the sale or other
disposition of foreclosure property
described in section 1221(a)(1) and the
gross income for the taxable year
derived from foreclosure property (as
defined in section 856(e)), but only to
the extent such gross income is not
described in (or, in the case of
foreign currency gain, not attributable
to gross income described in) section
856(c)(3) other than subparagraph (F)
thereof, over''.
(b) Net Income From Prohibited Transactions.--Clause (i) of
section 857(b)(6)(B) is amended to read as follows:
``(i) the term `net income derived
from prohibited transactions' means the
excess of the gain (including any
foreign currency gain, as defined in
section 988(b)(1)) from prohibited
transactions over the deductions
(including any foreign currency loss,
as defined in section 988(b)(2))
allowed by this chapter which are
directly connected with prohibited
transactions;''.
PART 2--TAXABLE REIT SUBSIDIARIES
SEC. 725. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.
Section 856(c)(4)(B)(ii) is amended by striking ``20
percent'' and inserting ``25 percent''.
PART 3--DEALER SALES
SEC. 727. HOLDING PERIOD UNDER SAFE HARBOR.
Section 857(b)(6) (relating to income from prohibited
transactions) is amended--
(1) by striking ``4 years'' in subparagraphs (C)(i),
(C)(iv), and (D)(i) and inserting ``2 years'',
(2) by striking ``4-year period'' in subparagraphs
(C)(ii), (D)(ii), and (D)(iii) and inserting ``2-year
period'', and
(3) by striking ``real estate asset''and all that
follows through ``if'' in the matter preceding clause
(i) of subparagraphs (C) and (D), respectively, and
inserting ``real estate asset (as defined in section
856(c)(5)(B)) and which is described in section
1221(a)(1) if''.
SEC. 728. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.
Section 857(b)(6) is amended--
(1) by striking the semicolon at the end of
subparagraph (C)(iii) and inserting ``, or (III) the
fair market value of property (other than sales of
foreclosure property or sales to which section 1033
applies) sold during the taxable year does not exceed
10 percent of the fair market value of all of the
assets of the trust as of the beginning of the taxable
year;'', and
(2) by adding ``or'' at the end of subclause (II) of
subparagraph (D)(iv) and by adding at the end of such
subparagraph the following new subclause:
``(III) the fair market value of
property (other than sales of
foreclosure property or sales to which
section 1033 applies) sold during the
taxable year does not exceed 10 percent
of the fair market value of all of the
assets of the trust as of the beginning
of the taxable year,''.
PART 4--HEALTH CARE REITS
SEC. 730. CONFORMITY FOR HEALTH CARE FACILITIES.
(a) Related Party Rentals.--Subparagraph (B) of section
856(d)(8) (relating to special rule for taxable REIT
subsidiaries) is amended to read as follows:
``(B) Exception for certain lodging
facilities and health care property.--The
requirements of this subparagraph are met with
respect to an interest in real property which
is a qualified lodging facility or a qualified
health care property (as defined in subsection
(e)(6)(D)(i)) leased by the trust to a taxable
REIT subsidiary of the trust if the property is
operated on behalf of such subsidiary by a
person who is an eligible independent
contractor. For purposes of this section, a
taxable REIT subsidiary is not considered to be
operating or managing a qualified health care
property or qualified lodging facility solely
because it directly or indirectly possesses a
license, permit or similar instrument enabling
it to do so.''.
(b) Eligible Independent Contractor.--Subparagraphs (A) and
(B) of section 856(d)(9) (relating to eligible independent
contractor) are amended to read as follows:
``(A) In general.--The term `eligible
independent contractor' means, with respect to
any qualified lodging facility or qualified
health care property (as defined in subsection
(e)(6)(D)(i)), any independent contractor if,
at the time such contractor enters into a
management agreement or other similar service
contract with the taxable REIT subsidiary to
operate such qualified lodging facility or
qualified health care property, such contractor
(or any related person) is actively engaged in
the trade or business of operating qualified
lodging facilities or qualified health care
properties, respectively, for any person who is
not a related person with respect to the real
estate investment trust or the taxable REIT
subsidiary.
``(B) Special rules.--Solely for purposes of
this paragraph and paragraph (8)(B), a person
shall not fail to be treated as an independent
contractor with respect to any qualified
lodging facility or qualified health care
property (as so defined) by reason of the
following:
``(i) The taxable REIT subsidiary
bears the expenses for the operation of
such qualified lodging facility or
qualified health care property pursuant
to the management agreement or other
similar service contract.
``(ii) The taxable REIT subsidiary
receives the revenues from the
operation of such qualified lodging
facility or qualified health care
property, net of expenses for such
operation and fees payable to the
operator pursuant to such agreement or
contract.
``(iii) The real estate investment
trust receives income from such person
with respect to another property that
is attributable to a lease of such
other property to such person that was
in effect as of the later of--
``(I) January 1, 1999, or
``(II) the earliest date that
any taxable REIT subsidiary of
such trust entered into a
management agreement or other
similar service contract with
such person with respect to
such qualified lodging facility
or qualified health care
property.''.
(c) Taxable Reit Subsidiaries.--The last sentence of section
856(l)(3) is amended--
(1) by inserting ``or a health care facility'' after
``a lodging facility'', and
(2) by inserting ``or health care facility'' after
``such lodging facility''.
PART 5--EFFECTIVE DATES
SEC. 732. EFFECTIVE DATES.
(a) In General.--Except as otherwise provided in this
section, the amendments made by this subtitle shall apply to
taxable years beginning after the date of the enactment of this
Act.
(b) REIT Income Tests.--
(1) The amendment made by section 721(a) and (b)
shall apply to gains and items of income recognized
after the date of the enactment of this Act.
(2) The amendment made by section 721(c) shall apply
to transactions entered into after the date of the
enactment of this Act.
(3) The amendment made by section 721(d) shall apply
after the date of the enactment of this Act.
(c) Conforming Foreign Currency Revisions.--
(1) The amendment made by section 723(a) shall apply
to gains recognized after the date of the enactment of
this Act.
(2) The amendment made by section 723(b) shall apply
to gains and deductions recognized after the date of
the enactment of this Act.
(d) Dealer Sales.--The amendments made by part 3 shall apply
to sales made after the date of the enactment of this Act.
Subtitle C--Revenue Provisions
SEC. 741. BROKER REPORTING OF CUSTOMER'S BASIS IN SECURITIES
TRANSACTIONS.
(a) In General.--
(1) Broker reporting for securities transactions.--
Section 6045 (relating to returns of brokers) is
amended by adding at the end the following new
subsection:
``(g) Additional Information Required in the Case of
Securities Transactions, etc.--
``(1) In general.--If a broker is otherwise required
to make a return under subsection (a) with respect to
the gross proceeds of the sale of a covered security,
the broker shall include in such return the information
described in paragraph (2).
``(2) Additional information required.--
``(A) In general.--The information required
under paragraph (1) to be shown on a return
with respect to a covered security of a
customer shall include the customer's adjusted
basis in such security and whether any gain or
loss with respect to such security is long-term
or short-term (within the meaning of section
1222).
``(B) Determination of adjusted basis.--For
purposes of subparagraph (A)--
``(i) In general.--The customer's
adjusted basis shall be determined--
``(I) in the case of any
security (other than any stock
for which an average basis
method is permissible under
section 1012), in accordance
with the first-in first-out
method unless the customer
notifies the broker by means of
making an adequate
identification of the stock
sold or transferred, and
``(II) in the case of any
stock for which an average
basis method is permissible
under section 1012, in
accordance with the broker's
default method unless the
customer notifies the broker
that he elects another
acceptable method under section
1012 with respect to the
account in which such stock is
held.
``(ii) Exception for wash sales.--
Except as otherwise provided by the
Secretary, the customer's adjusted
basis shall be determined without
regard to section 1091 (relating to
loss from wash sales of stock or
securities) unless the transactions
occur in the same account with respect
to identical securities.
``(3) Covered security.--For purposes of this
subsection--
``(A) In general.--The term `covered
security' means any specified security acquired
on or after the applicable date if such
security--
``(i) was acquired through a
transaction in the account in which
such security is held, or
``(ii) was transferred to such
account from an account in which such
security was a covered security, but
only if the broker received a statement
under section 6045A with respect to the
transfer.
``(B) Specified security.--The term
`specified security' means--
``(i) any share of stock in a
corporation,
``(ii) any note, bond, debenture, or
other evidence of indebtedness,
``(iii) any commodity, or contract or
derivative with respect to such
commodity, if the Secretary determines
that adjusted basis reporting is
appropriate for purposes of this
subsection, and
``(iv) any other financial instrument
with respect to which the Secretary
determines that adjusted basis
reporting is appropriate for purposes
of this subsection.
``(C) Applicable date.--The term `applicable
date' means--
``(i) January 1, 2010, in the case of
any specified security which is stock
in a corporation (other than any stock
described in clause (ii)),
``(ii) January 1, 2011, in the case
of any stock for which an average basis
method is permissible under section
1012, and
``(iii) January 1, 2012, or such
later date determined by the Secretary
in the case of any other specified
security.
``(4) Treatment of s corporations.--In the case of
the sale of a covered security acquired by an S
corporation (other than a financial institution) after
December 31, 2011, such S corporation shall be treated
in the same manner as a partnership for purposes of
this section.
``(5) Special rules for short sales.--In the case of
a short sale, reporting under this section shall be
made for the year in which such sale is closed.''.
(2) Broker information required with respect to
options.--Section 6045, as amended by subsection (a),
is amended by adding at the end the following new
subsection:
``(h) Application to Options on Securities.--
``(1) Exercise of option.--For purposes of this
section, if a covered security is acquired or disposed
of pursuant to the exercise of an option that was
granted or acquired in the same account as the covered
security, the amount received with respect to the grant
or paid with respect to the acquisition of such option
shall be treated as an adjustment to gross proceeds or
as an adjustment to basis, as the case may be.
``(2) Lapse or closing transaction.--In the case of
the lapse (or closing transaction (as defined in
section 1234(b)(2)(A))) of an option on a specified
security or the exercise of a cash-settled option on a
specified security, reporting under subsections (a) and
(g) with respect to such option shall be made for the
calendar year which includes the date of such lapse,
closing transaction, or exercise.
``(3) Prospective application.--Paragraphs (1) and
(2) shall not apply to any option which is granted or
acquired before January 1, 2012.
``(4) Definitions.--For purposes of this subsection,
the terms `covered security' and `specified security'
shall have the meanings given such terms in subsection
(g)(3).''.
(3) Extension of period for statements sent to
customers.--
(A) In general.--Subsection (b) of section
6045 is amended by striking ``January 31'' and
inserting ``February 15''.
(B) Statements related to substitute
payments.--Subsection (d) of section 6045 is
amended--
(i) by striking ``at such time and'',
and
(ii) by inserting after ``other
item.'' the following new sentence:
``The written statement required under
the preceding sentence shall be
furnished on or before February 15 of
the year following the calendar year in
which the payment was made.''.
(C) Other statements.--Subsection (b) of
section 6045 is amended by adding at the end
the following: ``In the case of a consolidated
reporting statement (as defined in regulations)
with respect to any account, any statement
which would otherwise be required to be
furnished on or before January 31 of a calendar
year with respect to any item reportable to the
taxpayer shall instead be required to be
furnished on or before February 15 of such
calendar year if furnished with such
consolidated reporting statement.''.
(b) Determination of Basis of Certain Securities on Account
by Account or Average Basis Method.--Section 1012 (relating to
basis of property-cost) is amended--
(1) by striking ``The basis of property'' and
inserting the following:
``(a) In General.--The basis of property'',
(2) by striking ``The cost of real property'' and
inserting the following:
``(b) Special Rule for Apportioned Real Estate Taxes.--The
cost of real property'', and
(3) by adding at the end the following new
subsections:
``(c) Determinations by Account.--
``(1) In general.--In the case of the sale, exchange,
or other disposition of a specified security on or
after the applicable date, the conventions prescribed
by regulations under this section shall be applied on
an account by account basis.
``(2) Application to open-end funds.--
``(A) In general.--Except as provided in
subparagraph (B), any stock in an open-end fund
acquired before January 1, 2011, shall be
treated as a separate account from any such
stock acquired on or after such date.
``(B) Election by open-end fund for treatment
as single account.--If an open-end fund elects
to have this subparagraph apply with respect to
one or more of its stockholders--
``(i) subparagraph (A) shall not
apply with respect to any stock in such
fund held by such stockholders, and
``(ii) all stock in such fund which
is held by such stockholders shall be
treated as covered securities described
in section 6045(g)(3) without regard to
the date of the acquisition of such
stock.
A rule similar to the rule of the preceding
sentence shall apply with respect to a broker
holding stock in an open-end fund as a nominee.
``(3) Definitions.--For purposes of this section--
``(A) Open-end fund.--The term `open-end
fund' means a regulated investment company (as
defined in section 851) which is offering for
sale or has outstanding any redeemable security
of which it is the issuer. Any stock which is
traded on an established securities exchange
shall not be treated as stock in an open-end
fund.
``(B) Specified security; applicable date.--
The terms `specified security' and `applicable
date' shall have the meaning given such terms
in section 6045(g).
``(d) Average Basis for Stock Acquired Pursuant to a Dividend
Reinvestment Plan.--
``(1) In general.--In the case of any stock acquired
after December 31, 2010, in connection with a dividend
reinvestment plan, the basis of such stock while held
as part of such plan shall be determined using one of
the methods which may be used for determining the basis
of stock in an open-end fund.
``(2) Treatment after transfer.--In the case of the
transfer to another account of stock to which paragraph
(1) applies, such stock shall have a cost basis in such
other account equal to its basis in the dividend
reinvestment plan immediately before such transfer
(properly adjusted for any fees or other charges taken
into account in connection with such transfer).
``(3) Separate accounts; election for treatment as
single account.--Rules similar to the rules of
subsection (c)(2) shall apply for purposes of this
subsection.
``(4) Dividend reinvestment plan.--For purposes of
this subsection--
``(A) In general.--The term `dividend
reinvestment plan' means any arrangement under
which dividends on any stock are reinvested in
stock identical to the stock with respect to
which the dividends are paid.
``(B) Initial stock acquisition treated as
acquired in connection with plan.--Stock shall
be treated as acquired in connection with a
dividend reinvestment plan if such stock is
acquired pursuant to such plan or if the
dividends paid on such stock are subject to
such plan.''.
(c) Information by Transferors To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter
A of chapter 61 is amended by inserting after section
6045 the following new section:
``SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH TRANSFERS OF
COVERED SECURITIES TO BROKERS.
``(a) Furnishing of Information.--Every applicable person
which transfers to a broker (as defined in section 6045(c)(1))
a security which is a covered security (as defined in section
6045(g)(3)) in the hands of such applicable person shall
furnish to such broker a written statement in such manner and
setting forth such information as the Secretary may by
regulations prescribe for purposes of enabling such broker to
meet the requirements of section 6045(g).
``(b) Applicable Person.--For purposes of subsection (a), the
term `applicable person' means--
``(1) any broker (as defined in section 6045(c)(1)),
and
``(2) any other person as provided by the Secretary
in regulations.
``(c) Time for Furnishing Statement.--Except as otherwise
provided by the Secretary, any statement required by subsection
(a) shall be furnished not later than 15 days after the date of
the transfer described in such subsection.''.
(2) Assessable penalties.--Paragraph (2) of section
6724(d) (defining payee statement) is amended by
redesignating subparagraphs (I) through (CC) as
subparagraphs (J) through (DD), respectively, and by
inserting after subparagraph (H) the following new
subparagraph:
``(I) section 6045A (relating to information
required in connection with transfers of
covered securities to brokers),''.
(3) Clerical amendment.--The table of sections for
subpart B of part III of subchapter A of chapter 61 is
amended by inserting after the item relating to section
6045 the following new item:
``Sec. 6045A. Information required in connection with transfers of
covered securities to brokers.''.
(d) Additional Issuer Information To Aid Brokers.--
(1) In general.--Subpart B of part III of subchapter
A of chapter 61, as amended by subsection (b), is
amended by inserting after section 6045A the following
new section:
``SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF SPECIFIED
SECURITIES.
``(a) In General.--According to the forms or regulations
prescribed by the Secretary, any issuer of a specified security
shall make a return setting forth--
``(1) a description of any organizational action
which affects the basis of such specified security of
such issuer,
``(2) the quantitative effect on the basis of such
specified security resulting from such action, and
``(3) such other information as the Secretary may
prescribe.
``(b) Time for Filing Return.--Any return required by
subsection (a) shall be filed not later than the earlier of--
``(1) 45 days after the date of the action described
in subsection (a), or
``(2) January 15 of the year following the calendar
year during which such action occurred.
``(c) Statements To Be Furnished to Holders of Specified
Securities or Their Nominees.--According to the forms or
regulations prescribed by the Secretary, every person required
to make a return under subsection (a) with respect to a
specified security shall furnish to the nominee with respect to
the specified security (or certificate holder if there is no
nominee) a written statement showing--
``(1) the name, address, and phone number of the
information contact of the person required to make such
return,
``(2) the information required to be shown on such
return with respect to such security, and
``(3) such other information as the Secretary may
prescribe.
The written statement required under the preceding sentence
shall be furnished to the holder on or before January 15 of the
year following the calendar year during which the action
described in subsection (a) occurred.
``(d) Specified Security.--For purposes of this section, the
term `specified security' has the meaning given such term by
section 6045(g)(3)(B). No return shall be required under this
section with respect to actions described in subsection (a)
with respect to a specified security which occur before the
applicable date (as defined in section 6045(g)(3)(C)) with
respect to such security.
``(e) Public Reporting in Lieu of Return.--The Secretary may
waive the requirements under subsections (a) and (c) with
respect to a specified security, if the person required to make
the return under subsection (a) makes publicly available, in
such form and manner as the Secretary determines necessary to
carry out the purposes of this section--
``(1) the name, address, phone number, and email
address of the information contact of such person, and
``(2) the information described in paragraphs (1),
(2), and (3) of subsection (a).''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1) of
such Code (defining information return) is
amended by redesignating clause (iv) and each
of the clauses which follow as clauses (v)
through (xxii), respectively, and by inserting
after clause (iii) the following new clause:
``(iv) section 6045B(a) (relating to
returns relating to actions affecting
basis of specified securities),''.
(B) Paragraph (2) of section 6724(d) of such
Code (defining payee statement), as amended by
subsection (c)(2), is amended by redesignating
subparagraphs (J) through (DD) as subparagraphs
(K) through (EE), respectively, and by
inserting after subparagraph (I) the following
new subparagraph:
``(J) subsections (c) and (e) of section
6045B (relating to returns relating to actions
affecting basis of specified securities),''.
(3) Clerical amendment.--The table of sections for
subpart B of part III of subchapter A of chapter 61 of
such Code, as amended by subsection (b)(3), is amended
by inserting after the item relating to section 6045A
the following new item:
``Sec. 6045B. Returns relating to actions affecting basis of specified
securities.''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
take effect on January 1, 2010.
(2) Extension of period for statements sent to
customers.--The amendments made by subsection (a)(3)
shall apply to statements required to be furnished
after December 31, 2008.
SEC. 742. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.
(a) In General.--Paragraphs (5)(D) and (6) of section 864(f)
are each amended by striking ``December 31, 2008'' and
inserting ``December 31, 2009''.
(b) Transitional Rule.--Subsection (f) of section 864 is
amended by adding at the end the following new paragraph:
``(7) Transition.--In the case of the first taxable
year to which this subsection applies, the increase (if
any) in the amount of the interest expense allocable to
sources within the United States by reason of the
application of this subsection shall be 78 percent of
the amount of such increase determined without regard
to this paragraph.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2008.
SEC. 743. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
(a) Repeal of Adjustment for 2012.--Subparagraph (B) of
section 401(1) of the Tax Increase Prevention and
Reconciliation Act of 2005 is amended by striking the
percentage contained therein and inserting ``100 percent''.
(b) Modification of Adjustment for 2013.--The percentage
under subparagraph (C) of section 401(1) of the Tax Increase
Prevention and Reconciliation Act of 2005 in effect on the date
of the enactment of this Act is increased by 13 percentage
points.
Subtitle D--Coordination of Federal Housing Programs and Tax Incentives
for Housing
SEC. 751. SHORT TITLE.
This subtitle may be cited as the ``Housing Tax Credit
Coordination Act of 2008''.
SEC. 752. APPROVALS BY DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.
(a) Administrative and Procedural Changes.--
(1) In general.--The Secretary of Housing and Urban
Development (in this section referred to as the
``Secretary'') shall, not later than the expiration of
the 6-month period beginning upon after the date of the
enactment of this Act, implement administrative and
procedural changes to expedite approval of multifamily
housing projects under the jurisdiction of the
Department of Housing and Urban Development that meet
the requirements of the Secretary for such approvals.
(2) Projects.--The multifamily housing projects
referred to in paragraph (1) shall include--
(A) projects for which assistance is provided
by such Department in conjunction with any low-
income housing tax credits under section 42 of
the Internal Revenue Code of 1986 or tax-exempt
housing bonds; and
(B) existing public housing projects and
assisted housing projects, for which approval
of the Secretary is necessary for transactions,
in conjunction with any such low-income housing
tax credits or tax-exempt housing bonds,
involving the preservation or rehabilitation of
the project.
(3) Changes.--The administrative and procedural
changes referred to in paragraph (1) shall include all
actions necessary to carry out paragraph (1), which may
include--
(A) improving the efficiency of approval
procedures;
(B) simplifying approval requirements,
(C) establishing time deadlines or target
deadlines for required approvals;
(D) modifying division of approval authority
between field and national offices;
(E) improving outreach to project sponsors
regarding information that is required to be
submitted for such approvals;
(F) requesting additional funding for
increasing staff, if necessary; and
(G) any other actions which would expedite
approvals.
Any such changes shall be made in a manner that
provides for full compliance with any existing
requirements under law or regulation that are designed
to protect families receiving public and assisted
housing assistance, including income targeting, rent,
and fair housing provisions, and shall also comply with
requirements regarding environmental review and
protection and wages paid to laborers.
(b) Consultation.--The Secretary shall consult with the
Commissioner of the Internal Revenue Service and take such
actions as are appropriate in conjunction with such
consultation to simplify the coordination of rules,
regulations, forms, and approval requirements for multifamily
housing projects projects for which assistance is provided by
such Department in conjunction with any low-income housing tax
credits under section 42 of the Internal Revenue Code of 1986
or tax-exempt housing bonds.
(c) Recommendations.--In implementing the changes required
under this section, the Secretary shall solicit recommendations
regarding such changes from project owners and sponsors,
investors and stakeholders in housing tax credits, State and
local housing finance agencies, public housing agencies, tenant
advocates, and other stakeholders in such projects.
(d) Report.--Not later than the expiration of the 9-month
period beginning on the date of the enactment of this Act, the
Secretary shall submit a report to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate that--
(1) identifies the actions taken by the Secretary to
comply with this section;
(2) includes information regarding any resulting
improvements in the expedited approval for multifamily
housing projects;
(3) identifies recommendations made pursuant to
subsection (c);
(4) identifies actions taken by the Secretary to
implement the provisions in the amendments made by
sections 4 and 5 of this Act; and
(5) makes recommendations for any legislative changes
that are needed to facilitate prompt approval of
assistance for such projects.
SEC. 753. PROJECT APPROVALS BY RURAL HOUSING SERVICE.
Section 515(h) of the Housing Act of 1949 (42 U.S.C. 1485) is
amended--
(1) by inserting ``(1) Condition.--'' after ``(h)'';
and
(2) by adding at the end the following new
paragraphs:
``(2) Actions to Expedite Project Approvals.--
``(A) In general.--The Secretary shall take actions
to facilitate timely approval of requests to transfer
ownership or control, for the purpose of rehabilitation
or preservation, of multifamily housing projects for
which assistance is provided by the Secretary of
Agriculture in conjunction with any low-income housing
tax credits under section 42 of the Internal Revenue
Code of 1986 or tax-exempt housing bonds.
``(B) Consultation.--The Secretary of Agriculture
shall consult with the Commissioner of the Internal
Revenue Service and take such actions as are
appropriate in conjunction with such consultation to
simplify the coordination of rules, regulations, forms
(including applications forms for project transfers),
and approval requirements multifamily housing projects
for which assistance is provided by the Secretary of
Agriculture in conjunction with any low-income housing
tax credits under section 42 of the Internal Revenue
Code of 1986 or tax-exempt housing bonds.
``(C) Existing requirements.--Any actions taken
pursuant to this paragraph shall be taken in a manner
that provides for full compliance with any existing
requirements under law or regulation that are designed
to protect families receiving Federal housing
assistance, including income targeting, rent, and fair
housing provisions, and shall also comply with
requirements regarding environmental review and
protection and wages paid to laborers.
``(D) Recommendations.--In implementing the changes
required under this paragraph, the Secretary shall
solicit recommendations regarding such changes from
project owners and sponsors, investors and stakeholders
in housing tax credits, State and local housing finance
agencies, tenant advocates, and other stakeholders in
such projects.''.
SEC. 754. USE OF FHA LOANS WITH HOUSING TAX CREDITS.
(a) Subsidy Layering Requirements.--Subsection (d) of section
102 of the Department of Housing and Urban Development Reform
Act of 1989 (42 U.S.C. 3545(d)) is amended--
(1) in the first sentence, by inserting after
``assistance within the jurisdiction of the
Department'' the following: ``, as such term is defined
in subsection (m), except that for purposes of this
subsection such term shall not include any mortgage
insurance provided pursuant to title II of the National
Housing Act (12 U.S.C. 1707 et seq.)''; and
(2) in the second sentence, by inserting ``such''
before ``assistance''.
(b) Cost Certification.--Section 227 of National Housing Act
(12 U.S.C. 1715r) is amended--
(1) in the matter preceding paragraph (a) (relating
to a definition of ``new or rehabilitated multifamily
housing'')--
(A) in the first sentence--
(i) by striking ``Notwithstanding''
and inserting ``Except as provided in
subsection (b) and notwithstanding'';
and
(ii) by redesignating clauses (a) and
(b) as clauses (A) and (B),
respectively; and
(B) by striking ``As used in this section--
'';
(2) in paragraph (c) (relating to a definition of
``actual cost'')--
(A) in clause (i), by redesignating clauses
(1) and (2) as clauses (I) and (II),
respectively; and
(B) in clause (ii), by redesignating clauses
(1) and (2) as clauses (I) and (II),
respectively;
(3) by redesignating paragraphs (a), (b), and (c) as
paragraphs (1), (2), and (3), respectively;
(4) by inserting before paragraph (1) (as so
redesignated by paragraph (3) of this subsection) the
following:
``(b) Exemption for Certain Projects Assisted With Low-Income
Housing Tax Credit.--In the case of any mortgage insured under
any provision of this title that is executed in connection with
the construction, rehabilitation, purchase, or refinancing of a
multifamily housing project for which equity provided through
any low-income housing tax credit pursuant to Section 42 of the
Internal Revenue Code of 1986 (26 U.S.C. 42), if the Secretary
determines at the time of issuance of the firm commitment for
insurance that the ratio of the loan proceeds to the actual
cost of the project is less than 80 percent, subsection (a) of
this section shall not apply.
``(c) Definitions.--For purposes of this section, the
following definitions shall apply:''; and
(5) by inserting ``(a) Requirement.--'' after
``227.''.
(c) Other Provisions Regarding Treatment of Mortgages
Covering Tax Credit Projects.--Title II of the National Housing
Act is amended by inserting after section 227 (12 U.S.C. 1715r)
the following new section:
``SEC. 228. TREATMENT OF MORTGAGES COVERING TAX CREDIT PROJECTS.
``(a) Definition.--For purposes of this section, the term
`insured mortgage covering a tax credit project' means a
mortgage insured under any provision of this title that is
executed in connection with the construction, rehabilitation,
purchase, or refinancing of a multifamily housing project for
which equity provided through any low-income housing tax credit
pursuant to section 42 of the Internal Revenue Code of 1986 (26
U.S.C. 42).
``(b) Acceptance of Letters of Credit.--In the case of an
insured mortgage covering a tax credit project, the Secretary
may not require the escrowing of equity provided by the sale of
any low-income housing tax credits for the project pursuant to
Section 42 of the Internal Revenue Code of 1986, or any other
form of security, such as a letter of credit.
``(c) Asset Management Requirements.--In the case of an
insured mortgage covering a tax credit project for which
project the applicable tax credit allocating agency is causing
to be performed periodic inspections in compliance with the
requirements of section 42 of the Internal Revenue Code of
1986, such project shall be exempt from requirements imposed by
the Secretary regarding periodic inspections of the property by
the mortgagee. To the extent that other compliance monitoring
is being performed with respect to such a project by such an
allocating agency pursuant to such section 42, the Secretary
shall, to the extent that the Secretary determines such
monitoring is sufficient to ensure compliance with any
requirements established by the Secretary, accept such agency's
evidence of compliance for purposes of determining compliance
with the Secretary's requirements.
``(d) Streamlined Processing Pilot Program.--
``(1) In general.--The Secretary shall establish a
pilot program to demonstrate the effectiveness of
streamlining the review process, which shall include
all applications for mortgage insurance under any
provision of this title for mortgages executed in
connection with the construction, rehabilitation,
purchase, or refinancing of a multifamily housing
project for which equity provided through any low-
income housing tax credit pursuant to section 42 of the
Internal Revenue Code of 1986. The Secretary shall
issue instructions for implementing the pilot program
under this subsection not later than the expiration of
the 180-day period beginning upon the date of the
enactment of the Housing Tax Credit Coordination Act of
2008.
``(2) Requirements.--Such pilot program shall provide
for--
``(A) the Secretary to appoint designated
underwriters, who shall be responsible for
reviewing such mortgage insurance applications
and making determinations regarding the
eligibility of such applications for such
mortgage insurance in lieu of the processing
functions regarding such applications that are
otherwise performed by other employees of the
Department of Housing and Urban Development;
``(B) submission of applications for such
mortgage insurance by mortgagees who have
previously been expressly approved by the
Secretary; and
``(C) determinations regarding the
eligibility of such applications for such
mortgage insurance to be made by the chief
underwriter pursuant to requirements prescribed
by the Secretary, which shall include requiring
submission of reports regarding applications of
proposed mortgagees by third-party entities
expressly approved by the chief underwriter.''.
SEC. 755. OTHER HUD PROGRAMS.
(a) Section 8 Assistance.--
(1) PHA project-based assistance.--Section 8(o)(13)
of the United States Housing Act of 1937 (42 U.S.C.
1437f(o)(13)) is amended--
(A) in subparagraph (D)(i)--
(i) by striking ``building'' and
inserting ``project''; and
(ii) by adding at the end the
following: ``For purposes of this
subparagraph, the term `project' means
a single building, multiple contiguous
buildings, or multiple buildings on
contiguous parcels of land.'';
(B) in the first sentence of subparagraph
(F), by striking ``10 years'' and inserting
``15 years'';
(C) In subparagraph (G)--
(i) by inserting after the period at
the end of the first sentence the
following: ``Such contract may, at the
election of the public housing agency
and the owner of the structure, specify
that such contract shall be extended
for renewal terms of up to 15 years
each, if the agency makes the
determination required by this
subparagraph and the owner is in
compliance with the terms of the
contract.''; and
(ii) by adding at the end the
following: ``A public housing agency
may agree to enter into such a contract
at the time it enters into the initial
agreement for a housing assistance
payment contract or at any time
thereafter that is before the
expiration of the housing assistance
payment contract.'';
(D) in subparagraph (H), by inserting before
the period at the end of the first sentence the
following: ``, except that in the case of a
contract unit that has been allocated low-
income housing tax credits and for which the
rent limitation pursuant to such section 42 is
less than the amount that would otherwise be
permitted under this subparagraph, the rent for
such unit may, in the sole discretion of a
public housing agency, be established at the
higher section 8 rent, subject only to
paragraph (10)(A)'';
(E) in subparagraph (I)(i), by inserting
before the semicolon the following: ``, except
that the contract may provide that the maximum
rent permitted for a dwelling unit shall not be
less than the initial rent for the dwelling
unit under the initial housing assistance
payments contract covering the unit''; and
(F) by adding at the end the following new
subparagraphs:
``(L) Use in cooperative housing and elevator
buildings.--A public housing agency may enter
into a housing assistance payments contract
under this paragraph with respect to--
``(i) dwelling units in cooperative
housing; and
``(ii) notwithstanding subsection
(c), dwelling units in a high-rise
elevator project, including such a
project that is occupied by families
with children, without review and
approval of the contract by the
Secretary.
``(M) Reviews.--
``(i) Subsidy layering.--A subsidy
layering review in accordance with
section 102(d) of the Department of
Housing and Urban Development Reform
Act of 1989 (42 U.S.C. 3545(d)) shall
not be required for assistance under
this paragraph in the case of a housing
assistance payments contract for an
existing structure, or if a subsidy
layering review has been conducted by
the applicable State or local agency.
``(ii) Environmental review.--A
public housing agency shall not be
required to undertake any environmental
review before entering into a housing
assistance payments contract under this
paragraph for an existing structure,
except to the extent such a review is
otherwise required by law or
regulation.''.
(2) Voucher program rent reasonableness.--Section
8(o)(10) of the United States Housing Act of 1937 (42
U.S.C. 1437f(o)(10)) is amended by adding at the end
the following new subparagraph;
``(F) Tax credit projects.--In the case of a
dwelling unit receiving tax credits pursuant to
section 42 of the Internal Revenue Code of 1986
or for which assistance is provided under
subtitle A of title II of the Cranston Gonzalez
National Affordable Housing Act of 1990, for
which a housing assistance contract not subject
to paragraph (13) of this subsection is
established, rent reasonableness shall be
determined as otherwise provided by this
paragraph, except that--
``(i) comparison with rent for units
in the private, unassisted local market
shall not be required if the rent is
equal to or less than the rent for
other comparable units receiving such
tax credits or assistance in the
project that are not occupied by
families assisted with tenant-based
assistance under this subsection; and
``(ii) the rent shall not be
considered reasonable for purposes of
this paragraph if it exceeds the
greater of--
``(I) the rents charged for
other comparable units
receiving such tax credits or
assistance in the project that
are not occupied by families
assisted with tenant-based
assistance under this
subsection; and
``(II) the payment standard
established by the public
housing agency for a unit of
the size involved.''.
(b) Section 202 Housing for Elderly Persons.--Subsection (f)
of section 202 of the Housing Act of 1959 (12 U.S.C. 1701q(f))
is amended--
(1) by striking ``Selection Criteria.--'' and
inserting ``Initial Selection Criteria and
Processing.--(1) Selection criteria.--'';
(2) by redesignating paragraphs (1) through (7) as
subparagraphs (A) through (G), respectively; and
(3) by adding at the end the following new paragraph:
``(2) Delegated Processing.--
``(A) In issuing a capital advance under this
subsection for any project for which financing for the
purposes described in the last two sentences of
subsection (b) is provided by a combination of a
capital advance under subsection (c)(1) and sources
other than this section, within 30 days of award of the
capital advance, the Secretary shall delegate review
and processing of such projects to a State or local
housing agency that--
``(i) is in geographic proximity to the
property;
``(ii) has demonstrated experience in and
capacity for underwriting multifamily housing
loans that provide housing and supportive
services;
``(iii) may or may not be providing low-
income housing tax credits in combination with
the capital advance under this section, and
``(iv) agrees to issue a firm commitment
within 12 months of delegation.
``(B) The Secretary shall retain the authority to
process capital advances in cases in which no State or
local housing agency has applied to provide delegated
processing pursuant to this paragraph or no such agency
has entered into an agreement with the Secretary to
serve as a delegated processing agency.
``(C) An agency to which review and processing is
delegated pursuant to subparagraph (A) may assess a
reasonable fee which shall be included in the capital
advance amounts and may recommend project rental
assistance amounts in excess of those initially awarded
by the Secretary. The Secretary shall develop a
schedule for reasonable fees under this subparagraph to
be paid to delegated processing agencies, which shall
take into consideration any other fees to be paid to
the agency for other funding provided to the project by
the agency, including bonds, tax credits, and other gap
funding.
``(D) Under such delegated system, the Secretary
shall retain the authority to approve rents and
development costs and to execute a capital advance
within 60 days of receipt of the commitment from the
State or local agency. The Secretary shall provide to
such agency and the project sponsor, in writing, the
reasons for any reduction in capital advance amounts or
project rental assistance and such reductions shall be
subject to appeal.''.
(c) McKinney-Vento Act Homeless Assistance Under Shelter Plus
Care Program.--
(1) Term of contracts with owner or lessor.--Part I
of subtitle F of the McKinney-Vento Homeless Assistance
Act is amended--
(A) by redesignating sections 462 and 463 (42
U.S.C. 11403g, 11403h) as sections 463 and 464,
respectively;
(B) by striking ``section 463'' each place
such term appears in sections 471, 476, 481,
486, and 488 (42 U.S.C. 11404, 11405, 11406,
11407, and 11407b) and inserting ``section
464''; and
(C) by inserting after section 461 (42 U.S.C.
11403f) the following new section:
``SEC. 462. TERM OF CONTRACT WITH OWNER OR LESSOR.
``An applicant under this subtitle may enter into a contract
with the owner or lessor of a property that receives rental
assistance under this subtitle having a term of not more than
15 years, subject to the availability of sufficient funds
provided in appropriation Acts for the purpose of renewing
expiring contracts for assistance payments. Such contract may,
at the election of the applicant and owner or lessor, specify
that such contract shall be extended for renewal terms of not
more than 15 years each, subject to the availability of
sufficient such appropriated funds.''.
(2) Project-based rental assistance contracts.--
Section 478(a) of the McKinney-Vento Homeless
Assistance Act (42 U.S.C. 11405a(a)) is amended by
inserting before the period at the end the following:
``; except that, in the case of any project for which
equity is provided through any low-income housing tax
credit pursuant to section 42 of the Internal Revenue
Code of 1986 (26 U.S.C. 42), if an expenditure of such
amount for each unit (including the prorated share of
such work) is required to make the structure decent,
safe, and sanitary, and the owner agrees to reach
initial closing on permanent financing from such other
sources within two years and agrees to carry out the
rehabilitation with resources other than assistance
under this subtitle within 60 months of notification of
grant approval, the contract shall be for a term of 10
years (except that such period may be extended by up to
1 year by the Secretary, which extension shall be
granted unless the Secretary determines that the
sponsor is primarily responsible for the failure to
meet such deadline)''.
(d) Data Collection on Tenants of Housing Tax Credit
Projects.--Title I of the United States Housing Act of 1937 (42
U.S.C. 1437 et seq.) is amended by adding at the end the
following new section:
``SEC. 36. COLLECTION OF INFORMATION ON TENANTS IN TAX CREDIT PROJECTS.
``(a) In General.--Each State agency administering tax
credits under section 42 of the Internal Revenue Code of 1986
(26 U.S.C. 42) shall furnish to the Secretary of Housing and
Urban Development, not less than annually, information
concerning the race, ethnicity, family composition, age,
income, use of rental assistance under section 8(o) of the
United States Housing Act of 1937 or other similar assistance,
disability status, and monthly rental payments of households
residing in each property receiving such credits through such
agency. Such State agencies shall, to the extent feasible,
collect such information through existing reporting processes
and in a manner that minimizes burdens on property owners. In
the case of any household that continues to reside in the same
dwelling unit, information provided by the household in a
previous year may be used if the information is of a category
that is not subject to change or if information for the current
year is not readily available to the owner of the property.
``(b) Standards.--The Secretary shall establish standards and
definitions for the information collected under subsection (a),
provide States with technical assistance in establishing
systems to compile and submit such information, and, in
coordination with other Federal agencies administering housing
programs, establish procedures to minimize duplicative
reporting requirements for properties assisted under multiple
housing programs.
``(c) Public Availability.--The Secretary shall, not less
than annually, compile and make publicly available the
information submitted to the Secretary pursuant to subsection
(a).
``(d) Authorization of Appropriations.--There is authorized
to be appropriated for the cost of activities required under
subsections (b) and (c) $2,500,000 for fiscal year 2009 and
$900,000 for each of fiscal years 2010 through 2013.''.
Subtitle E--Limitation on Sale, Foreclosure, or Seizure of Property
Owned by Servicemembers
SEC. 761. LIMITATION ON SALE, FORECLOSURE, OR SEIZURE OF PROPERTY OWNED
BY SERVICEMEMBERS DURING ONE-YEAR PERIOD FOLLOWING
PERIOD OF MILITARY SERVICE.
(a) Limitation.--Section 303(c) of the Servicemembers Civil
Relief Act is amended by striking ``90 days'' and inserting
``one year''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply with respect to any sale, foreclosure, or seizure
of property on or after the date of the enactment of this Act.
SEC. 762. PROVISION OF FINANCIAL DISCLOSURE TO SERVICEMEMBERS WHO
DEFAULT ON CERTAIN OBLIGATIONS.
(a) Provision of Disclosure Required.--Section 303 of the
Servicemembers Civil Relief Act (50 U.S.C. App. 533) is amended
by adding at the end the following new subsection:
``(e) Provision of Financial Disclosure.--In the case of a
servicemember who defaults on an obligation described in
subsection (a) for two consecutive months, the mortgagor or
loan servicer of the obligation shall provide to the
servicemember a written financial disclosure describing the
servicemember's liability with respect to the obligation for
the period during which a sale, foreclosure, or seizure of the
property is not valid under subsection (c).''.
(b) Effective Date.--Subsection (e) of section 303 of the
Servicemembers Civil Relief Act (50 U.S.C. App. 533), as added
by subsection (a), shall apply with respect to a servicemember
who defaults on an obligation on or after the date of the
enactment of this Act.
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TEXT OF THE HOUSE AMENDMENT #3 TO THE SENATE AMENDMENT TO H.R. 3221
MADE IN ORDER UNDER THE RULE
``At the end of the matter proposed to be inserted by the
amendment of the Senate to the text of the bill, add the
following new section:
SEC. __. RULE OF CONSTRUCTION.
(a) In General.--No provision of this Act, the Home Owners'
Loan Act, or title LXII of the Revised Statutes of the United
States (commonly referred to as the ``National Bank Act'') may
be construed as preempting the application, to any entity, of
any State law regulating the foreclosure of residential real
property in that State or the treatment of foreclosed property.
(b) No Negative Implication.--This section shall not be
construed as affecting in any way the applicability of any
other type of State law to any Federal depository institution
(as defined in section 3(c)(4) of the Federal Deposit Insurance
Act) or to any agent or subsidiary of any such depository
institution.