HR 2588 IHCommentsClose CommentsPermalink

To prevent foreclosure of home mortgages and increase the availability of affordable new mortgages and affordable refinancing of mortgages held by Fannie Mae and Freddie Mac.CommentsClose CommentsPermalink

May 21, 2009CommentsClose CommentsPermalink

Mr. CARDOZA (for himself and Mr. COSTA) introduced the following bill; which was referred to the Committee on Financial ServicesCommentsClose CommentsPermalink

To prevent foreclosure of home mortgages and increase the availability of affordable new mortgages and affordable refinancing of mortgages held by Fannie Mae and Freddie Mac.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Housing Opportunity and Mortgage Equity Act of 2009’.CommentsClose CommentsPermalink

SEC. 2. AFFORDABLE NEW MORTGAGES.

(a) Authority- The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall each carry out a program under this section to purchase and securitize qualified new mortgages on single-family housing, in accordance with this section and policies and procedures that the Director of the Federal Housing Finance Agency shall establish.CommentsClose CommentsPermalink





(b) Requirement To Purchase Qualified New Mortgages- If a lender proffers to an enterprise, in accordance with requirements established by the Director, a mortgage or mortgages for purchase under this section, the enterprise shall make a determination of whether such mortgage or mortgages are qualified new mortgages. Subject to subsection (e), if the enterprise determines that such mortgage or mortgages meet the requirements for qualified new mortgages, the enterprise shall make a commitment to purchase, and shall purchase, the mortgage or mortgages.CommentsClose CommentsPermalink





(c) Qualified New Mortgages- For purposes of this section, the term ‘qualified new mortgage’ means a mortgage that meets the following requirements:CommentsClose CommentsPermalink





(1) SINGLE-FAMILY HOUSING- The property subject to the mortgage shall be a one- to four-family dwelling, including a condominium or a share in a cooperative ownership housing association.CommentsClose CommentsPermalink





(2) PRINCIPAL RESIDENCE- The mortgagor under the mortgage shall occupy the property subject to the mortgage as his or her principal residence.CommentsClose CommentsPermalink





(3) INTEREST RATE; TERM TO MATURITY- The mortgage shall--CommentsClose CommentsPermalink





(A) bear interest at a single rate that is fixed for the entire term of the mortgage, which shall not exceed an annual rate that is 1.6 percentage points higher than the average annual rate of interest paid on obligations of the United States most recently issued by the Secretary of the Treasury and having 10-year maturities; andCommentsClose CommentsPermalink





(B) have a term to maturity of not less than 30 years and not more than 40 years from the date of the beginning of the amortization of the mortgage.CommentsClose CommentsPermalink





(4) UNDERWRITING STANDARDS- The mortgage shall meet such underwriting standards as the Director shall require.CommentsClose CommentsPermalink





(5) HOME PURCHASE- The principal loan amount repayment of which is secured by the mortgage shall be used to purchase the property that is subject to the qualified new mortgage.CommentsClose CommentsPermalink





(6) NEW MORTGAGES- The mortgage was originated on or after the date of the enactment of this Act.CommentsClose CommentsPermalink





(d) Securitization-CommentsClose CommentsPermalink





(1) REQUIREMENT- Each enterprise shall, upon such terms and conditions as it may prescribe, set aside any qualified new mortgages purchased by it under this section and, upon approval of the Secretary of the Treasury, issue and sell securities based upon such mortgages set aside.CommentsClose CommentsPermalink





(2) FORM- Securities issued under this subsection may be in the form of debt obligations or trust certificates of beneficial interest, or both.CommentsClose CommentsPermalink





(3) TERMS- Securities issued under this subsection shall have such maturities and bear such rate or rates of interest as may be determined by the enterprise with the approval of the Secretary.CommentsClose CommentsPermalink





(4) EXEMPTION- Securities issued by an enterprise under this subsection shall, to the same extent as securities which are direct obligations of or obligations guaranteed as to principal and interest by the United States, be deemed to be exempt securities within the meaning of laws administered by the Securities and Exchange Commission.CommentsClose CommentsPermalink





(5) PRINCIPAL AND INTEREST PAYMENTS- Mortgages set aside pursuant to this subsection shall at all times be adequate to enable the issuing enterprise to make timely principal and interest payments on the securities issued and sold pursuant to this subsection.CommentsClose CommentsPermalink





(6) REQUIRED DISCLOSURE- Each enterprise shall insert appropriate language in all of the securities issued under this subsection clearly indicating that such securities, together with the interest thereon, are not guaranteed by the United States and do not constitute a debt or obligation of the United States or any agency or instrumentality thereof other than the enterprise.CommentsClose CommentsPermalink





(e) Termination- The requirement under subsection (b) for the enterprises to purchase mortgages shall not apply to any mortgage proferred to an enterprise after the expiration of the two-year period beginning on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 3. AFFORDABLE REFINANCING OF MORTGAGES HELD BY FANNIE MAE AND FREDDIE MAC.

(a) Authority- The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall each carry out a program under this section to provide for the refinancing of qualified mortgages on single-family housing owned by such enterprise and for the purchase of and securitization of such refinancing mortgages, in accordance with this section and policies and procedures that the Director of the Federal Housing Finance Agency shall establish. Such program shall require such refinancing of a qualified mortgage upon the request of the mortgagor made to the applicable enterprise and a determination by the enterprise that the mortgage is a qualified mortgage.CommentsClose CommentsPermalink





(b) Qualified Refinancing Mortgage- For purposes of this section, the term ‘qualified mortgage’ means a mortgage that meets the following requirements:CommentsClose CommentsPermalink





(1) SINGLE-FAMILY HOUSING- The property subject to the mortgage shall be a one- to four-family dwelling, including a condominium or a share in a cooperative ownership housing association.CommentsClose CommentsPermalink





(2) REFINANCING OF GSE-OWNED MORTGAGES- The principal loan amount repayment of which is secured by the mortgage shall be used to satisfy all indebtedness under an existing first mortgage that--CommentsClose CommentsPermalink





(A) was made for purchase of, or refinancing another first mortgage on, the same property that is subject to the qualified refinancing mortgage;CommentsClose CommentsPermalink





(B) is owned by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; andCommentsClose CommentsPermalink





(C) was originated on or before January 1, 2008.CommentsClose CommentsPermalink





(3) INTEREST RATE- The mortgage shall bear interest at a single rate that is fixed for the entire term of the mortgage, which shall not exceed an annual rate that is 1.6 percentage points higher than the average annual rate of interest paid on obligations of the United States most recently issued by the Secretary of the Treasury and having 10-year maturities.CommentsClose CommentsPermalink





(4) WAIVER OF PREPAYMENT PENALTIES- All penalties for prepayment or refinancing of the underlying mortgage refinanced by the mortgage, and all fees and penalties related to the default or delinquency on such mortgage, shall have been waived or forgiven.CommentsClose CommentsPermalink





(c) Termination- The requirement under subsection (a) for the enterprises to refinance qualified mortgages shall not apply to any request for refinancing made after the expiration of the two-year period beginning on the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 4. TREASURY FINANCING.

(a) Authority- Subject to subsection (e), the Secretary may purchase securities issued by the enterprises pursuant to the programs under this Act and such other obligations as may be issued by the enterprises for purposes of carrying out the programs under this Act.CommentsClose CommentsPermalink





(b) Public Debt Transaction- For the purpose of purchasing any such securities and obligations, the Secretary may use as a public debt transaction the proceeds from the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities are issued under such chapter are hereby extended to include any purchase by the Secretary of such obligations under this section.CommentsClose CommentsPermalink





(c) Characteristics of Obligations- Obligations issued and purchased pursuant to this section shall be in such forms and denominations, bear such maturities, bear interest at such rate, and be subject to such other terms and conditions, as the Secretary shall determine. In determining the term to maturity of such obligations, the Secretary shall take into consideration the terms to maturity of the various securities issued by the enterprises pursuant to the programs under this Act and the terms to maturity and possibility of prepayment of mortgages purchased and securitized under such programs.CommentsClose CommentsPermalink





(d) Treatment- All redemptions, purchases, and sales by the Secretary of obligations under this section shall be treated as public debt transactions of the United States.CommentsClose CommentsPermalink





(e) Limitation on Amount- The aggregate principal amount of outstanding obligations and securities purchased under subsection (a) by the Secretary and held at any one time may not exceed $10,000,000,000.CommentsClose CommentsPermalink

SEC. 5. DEFINITIONS.

For purposes of this Act, the following definitions shall apply:CommentsClose CommentsPermalink





(1) DIRECTOR- The term ‘Director’ means the Director of the Federal Housing Finance Agency.CommentsClose CommentsPermalink





(2) ENTERPRISE- The term ‘enterprise’ means the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.CommentsClose CommentsPermalink





(3) SECRETARY- The term ‘Secretary’ means the Secretary of the Treasury.CommentsClose CommentsPermalink