S 896 EAH

To prevent mortgage foreclosures and enhance mortgage credit availability.CommentsClose CommentsPermalink

’, do pass with the following

AMENDMENT:

Page 2, before line 1, insert the following new heading:

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

DIVISION A--PREVENTING MORTGAGE FORECLOSURESCommentsClose CommentsPermalink

(a) Guaranteed Rural Housing Loans- Section 502(h) of the Housing Act of 1949 (42 U.S.C. 1472(h)) is amended--CommentsClose CommentsPermalink





(1) by redesignating paragraphs (13) and (14) as paragraphs (16) and (17), respectively; andCommentsClose CommentsPermalink





(2) by inserting after paragraph (12) the following new paragraphs:CommentsClose CommentsPermalink





‘(13) LOSS MITIGATION- Upon default or imminent default of any mortgage guaranteed under this subsection, mortgagees shall engage in loss mitigation actions for the purpose of providing an alternative to foreclosure (including actions such as special forbearance, loan modification, pre-foreclosure sale, deed in lieu of foreclosure, as required, support for borrower housing counseling, subordinate lien resolution, and borrower relocation), as provided for by the Secretary.CommentsClose CommentsPermalink





‘(14) PAYMENT OF PARTIAL CLAIMS AND MORTGAGE MODIFICATIONS- The Secretary may authorize the modification of mortgages, and establish a program for payment of a partial claim to a mortgagee that agrees to apply the claim amount to payment of a mortgage on a 1- to 4-family residence, for mortgages that are in default or face imminent default, as defined by the Secretary. Any payment under such program directed to the mortgagee shall be made at the sole discretion of the Secretary and on terms and conditions acceptable to the Secretary, except that--CommentsClose CommentsPermalink





‘(A) the amount of the partial claim payment shall be in an amount determined by the Secretary, and shall not exceed an amount equivalent to 30 percent of the unpaid principal balance of the mortgage and any costs that are approved by the Secretary;CommentsClose CommentsPermalink





‘(B) the amount of the partial claim payment shall be applied first to any outstanding indebtedness on the mortgage, including any arrearage, but may also include principal reduction;CommentsClose CommentsPermalink





‘(C) the mortgagor shall agree to repay the amount of the partial claim to the Secretary upon terms and conditions acceptable to the Secretary;CommentsClose CommentsPermalink





‘(D) expenses related to a partial claim or modification are not to be charged to the borrower;CommentsClose CommentsPermalink





‘(E) the Secretary may authorize compensation to the mortgagee for lost income on monthly mortgage payments due to interest rate reduction;CommentsClose CommentsPermalink





‘(F) the Secretary may reimburse the mortgagee from the appropriate guaranty fund in connection with any activities that the mortgagee is required to undertake concerning repayment by the mortgagor of the amount owed to the Secretary;CommentsClose CommentsPermalink





‘(G) the Secretary may authorize payments to the mortgagee on page 16 and all that follows behalf of the borrower, under such terms and conditions as are defined by the Secretary, based on successful performance under the terms of the mortgage modification, which shall be used to reduce the principal obligation under the modified mortgage; andCommentsClose CommentsPermalink





‘(H) the Secretary may authorize the modification of mortgages with terms extended up to 40 years from the date of modification.CommentsClose CommentsPermalink





‘(15) ASSIGNMENT-CommentsClose CommentsPermalink





‘(A) PROGRAM AUTHORITY- The Secretary may establish a program for assignment to the Secretary, upon request of the mortgagee, of a mortgage on a 1- to 4-family residence guaranteed under this chapter.CommentsClose CommentsPermalink





‘(B) PROGRAM REQUIREMENTS-CommentsClose CommentsPermalink





‘(i) IN GENERAL- The Secretary may encourage loan modifications for eligible delinquent mortgages or mortgages facing imminent default, as defined by the Secretary, through the payment of the guaranty and assignment of the mortgage to the Secretary and the subsequent modification of the terms of the mortgage according to a loan modification approved under this section.CommentsClose CommentsPermalink





‘(ii) ACCEPTANCE OF ASSIGNMENT- The Secretary may accept assignment of a mortgage under a program under this subsection only if--CommentsClose CommentsPermalink





‘(I) the mortgage is in default or facing imminent default;CommentsClose CommentsPermalink





‘(II) the mortgagee has modified the mortgage or qualified the mortgage for modification sufficient to cure the default and provide for mortgage payments the mortgagor is reasonably able to pay, at interest rates not exceeding current market interest rates; andCommentsClose CommentsPermalink





‘(III) the Secretary arranges for servicing of the assigned mortgage by a mortgagee (which may include the assigning mortgagee) through procedures that the Secretary has determined to be in the best interests of the appropriate guaranty fund.CommentsClose CommentsPermalink





‘(C) PAYMENT OF GUARANTY- Under the program under this paragraph, the Secretary may pay the guaranty for a mortgage, in the amount determined in accordance with paragraph (2), without reduction for any amounts modified, but only upon the assignment, transfer, and delivery to the Secretary of all rights, interest, claims, evidence, and records with respect to the mortgage, as defined by the Secretary.CommentsClose CommentsPermalink





‘(D) DISPOSITION- After modification of a mortgage pursuant to this paragraph, and assignment of the mortgage, the Secretary may provide guarantees under this subsection for the mortgage. The Secretary may subsequently--CommentsClose CommentsPermalink





‘(i) re-assign the mortgage to the mortgagee under terms and conditions as are agreed to by the mortgagee and the Secretary;CommentsClose CommentsPermalink





‘(ii) act as a Government National Mortgage Association issuer, or contract with an entity for such purpose, in order to pool the mortgage into a Government National Mortgage Association security; orCommentsClose CommentsPermalink





‘(iii) re-sell the mortgage in accordance with any program that has been established for purchase by the Federal Government of mortgages insured under this title, and the Secretary may coordinate standards for interest rate reductions available for loan modification with interest rates established for such purchase.CommentsClose CommentsPermalink





‘(E) LOAN SERVICING- In carrying out the program under this subsection, the Secretary may require the existing servicer of a mortgage assigned to the Secretary under the program to continue servicing the mortgage as an agent of the Secretary during the period that the Secretary acquires and holds the mortgage for the purpose of modifying the terms of the mortgage. If the mortgage is resold pursuant to subparagraph (D)(iii), the Secretary may provide for the existing servicer to continue to service the mortgage or may engage another entity to service the mortgage.’.CommentsClose CommentsPermalink





(b) Technical Amendments- Subsection (h) of section 502 of the Housing Act of 1949 (42 U.S.C. 1472(h)) is amended--CommentsClose CommentsPermalink





(1) in paragraph (5)(A), by striking ‘(as defined in paragraph (13)’ and inserting ‘(as defined in paragraph (17)’; andCommentsClose CommentsPermalink





(2) in paragraph (18)(E)(as so redesignated by subsection (a)(2)), by--CommentsClose CommentsPermalink





(A) striking ‘paragraphs (3), (6), (7)(A), (8), and (10)’ and inserting ‘paragraphs (3), (6), (7)(A), (8), (10), (13), and (14)’; andCommentsClose CommentsPermalink





(B) striking ‘paragraphs (2) through page 17, line 23 and insert the following:(13)’ and inserting ‘paragraphs (2) through (15)’.CommentsClose CommentsPermalink





(c) Procedure-CommentsClose CommentsPermalink





(1) IN GENERAL- The promulgation of regulations necessitated and the administration actions required by the amendments made by this section shall be made without regard to--CommentsClose CommentsPermalink





(A) the notice and comment provisions of section 553 of title 5, United States Code;CommentsClose CommentsPermalink





(B) the Statement of Policy of the Secretary of Agriculture effective July 24, 1971 (36 Fed. Reg. 13804), relating to notices of proposed rulemaking and public participation in rulemaking; andCommentsClose CommentsPermalink





(C) chapter 35 of title 44, United States Code (commonly known as the ‘Paperwork Reduction Act’).CommentsClose CommentsPermalink





(2) CONGRESSIONAL REVIEW OF AGENCY RULEMAKING- In carrying out this section, and the amendments made by this section, the Secretary shall use the authority provided under section 808 of title 5, United States Code.CommentsClose CommentsPermalink

(a) In General- Section 2301(c) of the Foreclosure Prevention Act of 2008 (42 U.S.C. 5301 note) is amended--CommentsClose CommentsPermalink





(1) by redesignating paragraph (3) as paragraph (4); andCommentsClose CommentsPermalink





(2) by inserting after paragraph (2) the following new paragraph:CommentsClose CommentsPermalink





‘(3) EXCEPTION FOR CERTAIN STATES- Each State that has received the minimum allocation of amounts pursuant to the requirement under section 2302 may, to the extent such State has fulfilled the requirements of paragraph (2), distribute any remaining amounts to areas with homeowners at risk of foreclosure or in foreclosure without regard to the percentage of home foreclosures in such areas.’.CommentsClose CommentsPermalink





Page 22, line 24, strike the closing quotation marks and the 2nd period.

Page 22, after line 24, insert the following new subsection:

‘(g) Rule of Construction- No provision of subsection (b) or (d) (b) Retroactive Effective Date- The amendment made by subsection (a) shall take effect as if enacted on the date of enactment of the Foreclosure Prevention Act of 2008 (Public Law 110-289).CommentsClose CommentsPermalink

‘SEC. 129. DUTY OF SERVICERS OF RESIDENTIAL MORTGAGES.CommentsClose CommentsPermalink

‘(a) In General- Notwithstanding any other provision of law, whenever a servicer of residential mortgages agrees to enter into a qualified loss mitigation plan with respect to 1 or more residential mortgages originated before the date of enactment of the Helping Families Save Their Homes Act of 2009, including mortgages held in a securitization or other investment vehicle--CommentsClose CommentsPermalink





‘(1) to the extent that the servicer owes a duty to investors or other parties to maximize the net present value of such mortgages, the duty shall be construed to apply to all such investors and parties, and not to any individual party or group of parties; andCommentsClose CommentsPermalink





‘(2) the servicer shall be construed as affecting the liability of any servicer ordeemed to have satisfied the duty set forth in paragraph (1) if, before December 31, 2012, the servicer implements a qualified loss mitigation plan that meets the following criteria:CommentsClose CommentsPermalink





‘(A) Default on the payment of such mortgage has occurred, is imminent, or is reasonably foreseeable, as such terms are defined by guidelines issued by the Secretary of the Treasury or his designee under the Emergency Economic Stabilization Act of 2008.CommentsClose CommentsPermalink





‘(B) The mortgagor occupies the property securing the mortgage as his or her principal residence.CommentsClose CommentsPermalink





‘(C) The servicer reasonably determined, consistent with the guidelines issued by the Secretary of the Treasury or his designee, that the application of such qualified loss mitigation plan to a mortgage or class of mortgages will likely provide an anticipated recovery on the outstanding principal mortgage debt that will exceed the anticipated recovery through foreclosures.CommentsClose CommentsPermalink





‘(b) No Liability- A servicer that is deemed to be acting in the best interests of all investors or other parties under this section shall not be liable to any party who is owed a duty under subsection (a)(1), and shall not be subject to any injunction, stay, or other equitable relief to such party, based solely upon the implementation by the servicer of a qualified loss mitigation plan.CommentsClose CommentsPermalink





‘(c) Standard Industry Practice- The qualified loss mitigation plan guidelines issued by the Secretary of the Treasury under the Emergency Economic Stabilization Act of 2008 shall constitute standard industry practice for purposes of all Federal and State laws.CommentsClose CommentsPermalink





‘(d) Scope of Safe Harbor- Any person, including a trustee, issuer, and loan originator, shall not be liable for monetary damages or be subject to an injunction, stay, or other equitable relief, based solely upon the cooperation of such person with a servicer when such cooperation is necessary for the servicer to implement a qualified loss mitigation plan that meets the requirements of subsection (a).CommentsClose CommentsPermalink





‘(e) Reporting- Each servicer that engages in qualified loss mitigation plans under this section shall regularly report to the Secretary of the Treasury the extent, scope, and results of the servicer’s modification activities. The Secretary of the Treasury shall prescribe regulations or guidance specifying the form, content, and timing of such reports.CommentsClose CommentsPermalink





‘(f) Definitions- As used in this section--CommentsClose CommentsPermalink





‘(1) the term ‘qualified loss mitigation plan’ means--CommentsClose CommentsPermalink





‘(A) a residential loan modification, workout, or other loss mitigation plan, including to the extent that the Secretary of the Treasury determines appropriate, a loan sale, real property disposition, trial modification, pre-foreclosure sale, and deed in lieu of foreclosure, that is described or authorized in guidelines issued by the Secretary of the Treasury or his designee under the Emergency Economic Stabilization Act of 2008; andCommentsClose CommentsPermalink





‘(B) a refinancing of a mortgage under the Hope for Homeowners program;CommentsClose CommentsPermalink





‘(2) the term ‘servicer’ means the person responsible for the servicing for others of residential mortgage loans (including of a pool of residential mortgage loans); andCommentsClose CommentsPermalink





‘(3) the term ‘securitization vehicle’ means a trust, special purpose entity, or other legal structure that is used to facilitate the issuing of securities, participation certificates, or similar instruments backed by or referring to a pool of assets that includes residential mortgages (or instruments that are related to residential mortgages such as described in subsection credit-linked notes).CommentsClose CommentsPermalink





‘(g) Rule of Construction- No provision of subsection (b) or (d) shall be construed as affecting the liability of any servicer or person as described in subsection (d) for actual fraud in the origination or servicing of a loan or in the implementation of a qualified loss mitigation plan, or for the violation of a State or Federal law, including laws regulating the origination of mortgage loans, commonly referred to as predatory lending laws.’.CommentsClose CommentsPermalink

(a) Program Changes- Section 257 of the National Housing Act (12 U.S.C. 1715z-23) is amended--CommentsClose CommentsPermalink





(1) in subsection (c)--CommentsClose CommentsPermalink





(A) in the heading for paragraph (1), by striking ‘THE BOARD’ and inserting ‘SECRETARY’;CommentsClose CommentsPermalink





(B) in paragraph (1), by striking ‘Board’ inserting ‘Secretary, after consultation with the Board,’;CommentsClose CommentsPermalink





(C) in paragraph (1)(A), by inserting ‘consistent with section 203(b) to the maximum extent possible’ before the semicolon; andCommentsClose CommentsPermalink





(D) by adding after paragraph (2) the following:CommentsClose CommentsPermalink





‘(3) DUTIES OF BOARD- The Board shall advise the Secretary regarding the establishment and implementation of the HOPE for Homeowners Program.’;CommentsClose CommentsPermalink





(2) by striking ‘Board’ each place such term appears in subsections (e), (h)(1), (h)(3), (j), (l), (n), (s)(3), and (v) and inserting ‘Secretary’;CommentsClose CommentsPermalink





(3) in subsection (e)--CommentsClose CommentsPermalink





(A) by striking paragraph (1) and inserting the following:CommentsClose CommentsPermalink





‘(1) BORROWER CERTIFICATION-CommentsClose CommentsPermalink





‘(A) NO INTENTIONAL DEFAULT OR FALSE INFORMATION- The mortgagor shall provide a certification to the Secretary that the mortgagor has not intentionally defaulted on the existing mortgage or mortgages or any other substantial debt within the last 5 years and has not knowingly, or willfully and with actual knowledge, furnished material information known to be false for the purpose of obtaining the eligible mortgage to be insured and has not been convicted under Federal or State law for fraud during the 10-year period ending upon the insurance of the mortgage under this section.CommentsClose CommentsPermalink





‘(B) LIABILITY FOR REPAYMENT- The mortgagor shall agree in writing that the mortgagor shall be liable to repay to the Secretary 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 by the mortgagor in the certifications and documentation required under this paragraph, subject to the discretion of the Secretary.CommentsClose CommentsPermalink





‘(C) CURRENT BORROWER DEBT-TO-INCOME RATIO- As of the date of application for a commitment to insure or insurance under this section, the mortgagor shall have had, or thereafter is likely to have, due to the terms of the mortgage being reset, a ratio of mortgage debt to income, taking into consideration all existing mortgages of that mortgagor at such time, greater than 31 percent (or such higher amount as the Secretary determines appropriate).’;CommentsClose CommentsPermalink





(B) in paragraph (4)--CommentsClose CommentsPermalink





(i) in subparagraph (A), by striking ‘, subject to standards established by the Board under subparagraph (B),’; andCommentsClose CommentsPermalink





(ii) in subparagraph (B)(i), by striking ‘shall’ and inserting ‘may’; andCommentsClose CommentsPermalink





(C) in paragraph (7), by striking ‘; and provided that’ and all that follows through ‘new second lien’;CommentsClose CommentsPermalink





(D) in paragraph (9)--CommentsClose CommentsPermalink





(i) by striking ‘by procuring (A) an income tax return transcript of the income tax return of the mortgagor, or (B)’ and inserting ‘in accordance with procedures and standards that the Secretary shall establish (provided that such procedures and standards are consistent with section 203(b) to the maximum extent possible) which may include requiring the mortgagee to procure’; andCommentsClose CommentsPermalink





(ii) by striking ‘and by any other method, in accordance with procedures and standards that the Board shall establish’;CommentsClose CommentsPermalink





(E) in paragraph (10)--CommentsClose CommentsPermalink





(i) by striking ‘The mortgagor shall not’ and inserting the following:CommentsClose CommentsPermalink





‘(A) PROHIBITION- The mortgagor shall not’; andCommentsClose CommentsPermalink





(ii) by adding at the end the following:CommentsClose CommentsPermalink





‘(B) DUTY OF MORTGAGEE- The duty of the mortgagee to ensure that the mortgagor is in compliance with the prohibition under subparagraph (A) shall be satisfied if the mortgagee makes a good faith effort to determine that the mortgagor has not been convicted under Federal or State law for fraud during the period described in subparagraph (A).’;CommentsClose CommentsPermalink





(F) in paragraph (11), by inserting before the period at the end the following: ‘, except that the Secretary may provide exceptions to such latter requirement (relating to present ownership interest) for any mortgagor who has inherited a property’; andCommentsClose CommentsPermalink





(G) by adding at the end:CommentsClose CommentsPermalink





‘(12) BAN ON MILLIONAIRES- The mortgagor shall not have a net worth, as of the date the mortgagor first applies for a mortgage to be insured under the Program under this section, that exceeds $1,000,000.’;CommentsClose CommentsPermalink





(4) in subsection (h)(2), by striking ‘The Board shall prohibit the Secretary from paying’ and inserting ‘The Secretary shall not pay’; andCommentsClose CommentsPermalink





(5) in subsection (i)--CommentsClose CommentsPermalink





(A) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and adjusting the margins accordingly;CommentsClose CommentsPermalink





(B) in the matter preceding subparagraph (A), as redesignated by this paragraph, by striking ‘For each’ and inserting the following:CommentsClose CommentsPermalink





‘(1) PREMIUMS- For each’;CommentsClose CommentsPermalink





(C) in subparagraph (A), as redesignated by this paragraph, by striking ‘equal to 3 percent’ and inserting ‘not more than 3 percent’; andCommentsClose CommentsPermalink





(D) in subparagraph (B), as redesignated by this paragraph, by striking ‘equal to 1.5 percent’ and inserting ‘not more than 1.5 percent’;CommentsClose CommentsPermalink





(E) by adding at the end the following:CommentsClose CommentsPermalink





‘(2) CONSIDERATIONS- In setting the premium under this subsection, the Secretary shall consider--CommentsClose CommentsPermalink





‘(A) the financial integrity of the HOPE for Homeowners Program; andCommentsClose CommentsPermalink





‘(B) the purposes of the HOPE for Homeowners Program described in subsection (b).’;CommentsClose CommentsPermalink





(6) in subsection (k)--CommentsClose CommentsPermalink





(A) by striking the subsection heading and inserting ‘Exit Fee’;CommentsClose CommentsPermalink





(B) in paragraph (1), in the matter preceding subparagraph (A), by striking ‘such sale or refinancing’ and inserting ‘the mortgage being insured under this section’; andCommentsClose CommentsPermalink





(C) in paragraph (2), by striking ‘and the mortgagor’ and all that follows through the end and inserting ‘may, upon any sale or disposition of the property to which the mortgage relates, be entitled to up to 50 percent of appreciation, up to the appraised value of the home at the time when the mortgage being refinanced under this section was originally made. The Secretary may share any amounts received under this paragraph with or assign the rights of any amounts due to the Secretary to the holder of the existing senior mortgage on the eligible mortgage, the holder of any existing subordinate mortgage on the eligible mortgage, or both.’;CommentsClose CommentsPermalink





(7) in the heading for subsection (n), by striking ‘the Board’ and inserting ‘Secretary’;CommentsClose CommentsPermalink





(8) in subsection (p), by striking ‘Under the direction of the Board, the’ and inserting ‘The’;CommentsClose CommentsPermalink





(9) in subsection (s)--CommentsClose CommentsPermalink





(A) in the first sentence of paragraph (2), by striking ‘Board of Directors of’ and inserting ‘Advisory Board for’; andCommentsClose CommentsPermalink





(B) in paragraph (3)(A)(ii), by striking ‘subsection (e)(1)(B) and such other’ and inserting ‘such’;CommentsClose CommentsPermalink





(10) in subsection (v), by inserting after the period at the end the following: ‘The Secretary shall conform documents, forms, and procedures for mortgages insured under this section to those in place for mortgages insured under section 203(b) to the maximum extent possible consistent with the requirements of this section.’; andCommentsClose CommentsPermalink





(11) by adding at the end the following new subsections:CommentsClose CommentsPermalink





‘(x) Payments to Servicers and Originators- The Secretary may establish a payment to the--CommentsClose CommentsPermalink





‘(1) servicer of the existing senior mortgage or existing subordinate mortgage for every loan insured under the HOPE for Homeowners Program; andCommentsClose CommentsPermalink





‘(2) originator of each new loan insured under the HOPE for Homeowners Program.CommentsClose CommentsPermalink





‘(y) Auctions- The Secretary, with the concurrence of the Board, shall, if feasible, establish a structure and organize procedures for an auction to refinance eligible mortgages on a wholesale or bulk basis.’.CommentsClose CommentsPermalink





(b) Reducing TARP Funds To Offset Costs of Program Changes- Paragraph (3) of section 115(a) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5225) is amended by inserting ‘, as such amount is reduced by $1,244,000,000,’ after ‘$700,000,000,000’.CommentsClose CommentsPermalink





(c) Technical Correction- The second section 257 of the National Housing Act (Public Law 110-289; 122 Stat. 2839; 12 U.S.C. 1715z-24) is amended by striking the section heading and inserting the following:CommentsClose CommentsPermalink

(a) Mortgagee Review Board-CommentsClose CommentsPermalink





(1) IN GENERAL- Section 202(c)(2) of the National Housing Act (12 U.S.C. 1708(c)) is amended--CommentsClose CommentsPermalink





(A) in subparagraph (E), by inserting ‘and’ after the semicolon;CommentsClose CommentsPermalink





(B) in subparagraph (F), by striking ‘; and’ and inserting ‘or their designees.’; andCommentsClose CommentsPermalink





(C) by striking subparagraph (G).CommentsClose CommentsPermalink





(2) PROHIBITION AGAINST LIMITATIONS ON MORTGAGEE REVIEW BOARD’S POWER TO TAKE ACTION AGAINST MORTGAGEES- Section 202(c) of the National Housing Act (12 U.S.C. 1708(c)) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(9) PROHIBITION AGAINST LIMITATIONS ON MORTGAGEE REVIEW BOARD’S POWER TO TAKE ACTION AGAINST MORTGAGEES- No State or local law, and no Federal law (except a Federal law enacted expressly in limitation of this subsection after the effective date of this sentence), shall preclude or limit the exercise by the Board of its power to take any action authorized under paragraphs (3) and (6) of this subsection against any mortgagee.’.CommentsClose CommentsPermalink





(b) Limitations on Participation and Mortgagee Approval and Use of Name- Section 202 of the National Housing Act (12 U.S.C. 1708) is amended--CommentsClose CommentsPermalink





(1) by redesignating subsections (d), (e), and (f) as subsections (e), (f), and (g), respectively;CommentsClose CommentsPermalink





(2) by inserting after subsection (c) the following new subsection:CommentsClose CommentsPermalink





‘(d) Limitations on Participation in Origination and Mortgagee Approval-CommentsClose CommentsPermalink





‘(1) REQUIREMENT- Any person or entity that is not approved by the Secretary to serve as a mortgagee, as such term is defined in subsection (c)(7), shall not participate in the origination of an FHA-insured loan except as authorized by the Secretary.CommentsClose CommentsPermalink





‘(2) ELIGIBILITY FOR APPROVAL- In order to be eligible for approval by the Secretary, an applicant mortgagee shall not be, and shall not have any officer, partner, director, principal, manager, supervisor, loan processor, loan underwriter, or loan originator of the applicant mortgagee who is--CommentsClose CommentsPermalink





‘(A) currently suspended, debarred, under a limited denial of participation (LDP), or otherwise restricted under part 25 of title 24 of the Code of Federal Regulations, 2 Code of Federal Regulations, part 180 as implemented by part 2424, or any successor regulations to such parts, or under similar provisions of any other Federal agency;CommentsClose CommentsPermalink





‘(B) under indictment for, or has been convicted of, an offense that reflects adversely upon the applicant’s integrity, competence or fitness to meet the responsibilities of an approved mortgagee;CommentsClose CommentsPermalink





‘(C) subject to unresolved findings contained in a Department of Housing and Urban Development or other governmental audit, investigation, or review;CommentsClose CommentsPermalink





‘(D) engaged in business practices that do not conform to generally accepted practices of prudent mortgagees or that demonstrate irresponsibility;CommentsClose CommentsPermalink





‘(E) convicted of, or who has pled guilty or nolo contendre to, a felony related to participation in the real estate or mortgage loan industry--CommentsClose CommentsPermalink





‘(i) during the 7-year period preceding the date of the application for licensing and registration; orCommentsClose CommentsPermalink





‘(ii) at any time preceding such date of application, if such felony involved an act of fraud, dishonesty, or a breach of trust, or money laundering;CommentsClose CommentsPermalink





‘(F) in violation of provisions of the S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.) or any applicable provision of State law; orCommentsClose CommentsPermalink





‘(G) in violation of any other requirement as established by the Secretary.CommentsClose CommentsPermalink





‘(3) RULEMAKING AND IMPLEMENTATION- The Secretary shall conduct a rulemaking to carry out this subsection. The Secretary shall implement this subsection not later than the expiration of the 60-day period beginning upon the date of the enactment of this subsection by notice, mortgagee letter, or interim final regulations, which shall take effect upon issuance.’; andCommentsClose CommentsPermalink





(3) by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(h) Use of Name- The Secretary shall, by regulation, require each mortgagee approved by the Secretary for participation in the FHA mortgage insurance programs of the Secretary--CommentsClose CommentsPermalink





‘(1) to use the business name of the mortgagee that is registered with the Secretary in connection with such approval in all advertisements and promotional materials, as such terms are defined by the Secretary, relating to the business of such mortgagee in such mortgage insurance programs; andCommentsClose CommentsPermalink





‘(2) to maintain copies of all such advertisements and promotional materials, in such form and for such period as the Secretary requires.’.CommentsClose CommentsPermalink





(c) Payment for Loss Mitigation- Section 204(a)(2) of the National Housing Act (12 U.S.C. 1710(a)(2)) is amended--CommentsClose CommentsPermalink





(1) by inserting ‘or faces imminent default, as defined by the Secretary’ after ‘default’;CommentsClose CommentsPermalink





(2) by inserting ‘support for borrower housing counseling, partial claims, borrower incentives, preforeclosure sale,’ after ‘loan modification,’; andCommentsClose CommentsPermalink





(3) by striking ‘204(a)(1)(A)’ and inserting ‘subsection (a)(1)(A) or section 230(c)’.CommentsClose CommentsPermalink





(d) Payment of FHA Mortgage Insurance Benefits-CommentsClose CommentsPermalink





(1) ADDITIONAL LOSS MITIGATION ACTIONS- Section 230(a) of the National Housing Act (12 U.S.C. 1715u(a)) is amended--CommentsClose CommentsPermalink





(A) by inserting ‘or imminent default, as defined by the Secretary’ after ‘default’;CommentsClose CommentsPermalink





(B) by striking ‘loss’ and inserting ‘loan’;CommentsClose CommentsPermalink





(C) by inserting ‘preforeclosure sale, support for borrower housing counseling, subordinate lien resolution, borrower incentives,’ after ‘loan modification,’;CommentsClose CommentsPermalink





(D) by inserting ‘as required,’ after ‘deeds in lieu of foreclosure,’; andCommentsClose CommentsPermalink





(E) by inserting ‘or section 230(c),’ before ‘as provided’.CommentsClose CommentsPermalink





(2) AMENDMENT TO PARTIAL CLAIM AUTHORITY- Section 230(b) of the National Housing Act (12 U.S.C. 1715u(b)) is amended to read as follows:CommentsClose CommentsPermalink





‘(b) Payment of Partial Claim-CommentsClose CommentsPermalink





‘(1) ESTABLISHMENT OF PROGRAM- The Secretary may establish a program for payment of a partial claim to a mortgagee that agrees to apply the claim amount to payment of a mortgage on a 1- to 4-family residence that is in default or faces imminent default, as defined by the Secretary.CommentsClose CommentsPermalink





‘(2) PAYMENTS AND EXCEPTIONS- Any payment of a partial claim under the program established in paragraph (1) to a mortgagee shall be made in the sole discretion of the Secretary and on terms and conditions acceptable to the Secretary, except that--CommentsClose CommentsPermalink





‘(A) the amount of the payment shall be in an amount determined by the Secretary, not to exceed an amount equivalent to 30 percent of the unpaid principal balance of the mortgage and any amounts due to the Secretary to’ after ‘with’.Page 30, line 9, insert costs that are approved by the Secretary;CommentsClose CommentsPermalink





‘(B) the amount of the partial claim payment shall first be applied to any arrearage on the mortgage, and may also be applied to achieve principal reduction;CommentsClose CommentsPermalink





‘(C) the mortgagor shall agree to repay the amount of the insurance claim to the Secretary upon terms and conditions acceptable to the Secretary;CommentsClose CommentsPermalink





‘(D) the Secretary may permit compensation to the mortgagee for lost income on monthly payments, due to a reduction in the interest rate charged on the mortgage;CommentsClose CommentsPermalink





‘(E) expenses related to the partial claim or modification may not be charged to the borrower;CommentsClose CommentsPermalink





‘(F) loans may be modified to extend the term of the mortgage to a maximum of 40 years from the date of the modification; andCommentsClose CommentsPermalink





‘(G) the Secretary may permit incentive payments to the mortgagee, on the borrower’s behalf, based on successful performance of a modified mortgage, which shall be used to reduce the amount of principal indebtedness.CommentsClose CommentsPermalink





‘(3) PAYMENTS IN CONNECTION WITH CERTAIN ACTIVITIES- The Secretary may pay the mortgagee, from the appropriate insurance fund, in connection with any activities that the mortgagee is required to undertake concerning repayment by the mortgagor of the amount owed to the Secretary.’.CommentsClose CommentsPermalink





(3) ASSIGNMENT- Section 230(c) of the National Housing Act (12 U.S.C. 1715u(c)) is amended--CommentsClose CommentsPermalink





(A) by inserting ‘(1)’ after ‘(c)’;CommentsClose CommentsPermalink





(B) by redesignating paragraphs (1), (2), and (3) as subparagraphs (A), (B), and (C), respectively;CommentsClose CommentsPermalink





(C) in paragraph (1)(B) (as so redesignated)--CommentsClose CommentsPermalink





(i) by redesignating subparagraphs (A), (B), and (C) as clauses (i), (ii), and (iii), respectively;CommentsClose CommentsPermalink





(ii) in the matter preceding clause (i) (as so redesignated), by striking ‘under a program under this subsection’ and inserting ‘under this paragraph’; andCommentsClose CommentsPermalink





(iii) in clause (i) (as so redesignated), by inserting ‘or facing imminent default, as defined by the Secretary’ after ‘default’;CommentsClose CommentsPermalink





(D) in paragraph (1)(C) (as so redesignated), by striking ‘under a program under this subsection’ and inserting ‘under this paragraph’; andCommentsClose CommentsPermalink





(E) by adding at the end the following:CommentsClose CommentsPermalink





‘(2) ASSIGNMENT AND LOAN MODIFICATION-CommentsClose CommentsPermalink





‘(A) AUTHORITY- The Secretary may encourage loan modifications for eligible delinquent mortgages or mortgages facing imminent default, as defined by the Secretary, through the payment of insurance benefits and assignment of the mortgage to the Secretary and the subsequent modification of the terms of the mortgage according to a loan modification approved by the mortgagee.CommentsClose CommentsPermalink





‘(B) PAYMENT OF BENEFITS AND ASSIGNMENT- In carrying out this paragraph, the Secretary may pay insurance benefits for a mortgage, in the amount determined in accordance with section 204(a)(5), without reduction for any amounts modified, but only upon the assignment, transfer, and delivery to the Secretary of all rights, interest, claims, evidence, and records with respect to the mortgage specified in clauses (i) through (iv) of section 204(a)(1)(A).CommentsClose CommentsPermalink





‘(C) DISPOSITION- After modification of a mortgage pursuant to this paragraph, the Secretary may provide insurance under this title for the mortgage. The Secretary may subsequently--CommentsClose CommentsPermalink





‘(i) re-assign the mortgage to the mortgagee under terms and conditions as are agreed to by the mortgagee and the Secretary;CommentsClose CommentsPermalink





‘(ii) act as a Government National Mortgage Association issuer, or contract with an entity for such purpose, in order to pool the mortgage into a Government National Mortgage Association security; orCommentsClose CommentsPermalink





‘(iii) re-sell the mortgage in accordance with any program that has been established for purchase by the Federal Government of mortgages insured under this title, and the Secretary may coordinate standards for interest rate reductions available for loan modification with interest rates established for such purchase.CommentsClose CommentsPermalink





‘(D) LOAN SERVICING- In carrying out this paragraph, the Secretary may require the existing servicer of a mortgage assigned to the Secretary to continue servicing the mortgage as an agent of the Secretary during the period that the Secretary acquires and holds the mortgage for the purpose of modifying the terms of the mortgage, provided that the Secretary compensates the existing servicer appropriately, as such compensation is determined by the Secretary consistent, to the maximum extent possible, with section 203(b). If the mortgage is resold pursuant to subparagraph (C)(iii), the Secretary may provide for the existing servicer to continue to service the mortgage or may engage another entity to service the mortgage.’.CommentsClose CommentsPermalink





(4) IMPLEMENTATION- The Secretary of Housing and Urban Development may implement the amendments made by this subsection through notice or mortgagee letter.CommentsClose CommentsPermalink





(e) Change of Status- The National Housing Act is amended by striking section 532 (12 U.S.C. 1735f-10) and inserting the following new section:CommentsClose CommentsPermalink

‘SEC. 532. CHANGE OF MORTGAGEE STATUS.CommentsClose CommentsPermalink

‘(a) Notification- Upon the occurrence of any action described in subsection (b), an approved mortgagee shall immediately submit to the Secretary, in writing, notification of such occurrence.CommentsClose CommentsPermalink





‘(b) Actions- The actions described in this subsection are as follows:CommentsClose CommentsPermalink





‘(1) The debarment, suspension or a Limited Denial of Participation (LDP), or application of other sanctions, other exclusions, fines, or penalties applied to the mortgagee or to any officer, partner, director, principal, manager, supervisor, loan processor, loan underwriter, or loan originator of the mortgagee pursuant to applicable provisions of State or Federal law.CommentsClose CommentsPermalink





‘(2) The revocation of a State-issued mortgage loan originator license issued pursuant to the S.A.F.E. Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.) or any other similar declaration of ineligibility pursuant to State law.’.CommentsClose CommentsPermalink





(f) Civil Money Penalties- Section 536 of the National Housing Act (12 U.S.C. 1735f-14) is amended--CommentsClose CommentsPermalink





(1) in subsection (b)--CommentsClose CommentsPermalink





(A) in paragraph (1)--CommentsClose CommentsPermalink





(i) in the matter preceding subparagraph (A), by inserting ‘or any of its owners, officers, or directors’ after ‘mortgagee or lender’;CommentsClose CommentsPermalink





(ii) in subparagraph (H), by striking ‘title I’ and all that follows through ‘under this Act.’ and inserting ‘title I or II of this Act, or any implementing regulation, handbook, or mortgagee letter that is issued under this Act.’; andCommentsClose CommentsPermalink





(iii) by inserting after subparagraph (J) the following:CommentsClose CommentsPermalink





‘(K) Violation of section 202(d) of this Act (12 U.S.C. 1708(d)).CommentsClose CommentsPermalink





‘(L) Use of ‘Federal Housing Administration’, ‘Department of Housing and Urban Development’, ‘Government National Mortgage Association’, ‘Ginnie Mae’, the acronyms ‘HUD’, ‘FHA’, or ‘GNMA’, or any official seal or logo of the Department of Housing and Urban Development, except as authorized by the Secretary.’;CommentsClose CommentsPermalink





(B) in paragraph (2)--CommentsClose CommentsPermalink





(i) in subparagraph (B), by striking ‘or’ at the end;CommentsClose CommentsPermalink





(ii) in subparagraph (C), by striking the period at the end and inserting ‘; or’; andCommentsClose CommentsPermalink





(iii) by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(D) causing or participating in any of the violations set forth in paragraph (1) of this subsection.’; andCommentsClose CommentsPermalink





(C) by amending paragraph (3) to read as follows:CommentsClose CommentsPermalink





‘(3) PROHIBITION AGAINST MISLEADING USE OF FEDERAL ENTITY DESIGNATION- The Secretary may impose a civil money penalty, as adjusted from time to time, under subsection (a) for any use of ‘Federal Housing Administration’, ‘Department of Housing and Urban Development’, ‘Government National Mortgage Association’, ‘Ginnie Mae’, the acronyms ‘HUD’, ‘FHA’, or ‘GNMA’, or any official seal or logo of the Department of Housing and Urban Development, by any person, party, company, firm, partnership, or business, including sellers of real estate, closing agents, title companies, real estate agents, mortgage brokers, appraisers, loan correspondents, and dealers, except as authorized by the Secretary.’; andCommentsClose CommentsPermalink





(2) in subsection (g), by striking ‘The term’ and all that follows through the end of the sentence and inserting ‘For purposes of this section, a person acts knowingly when a person has actual knowledge of acts or should have known of the acts.’.CommentsClose CommentsPermalink





(g) Expanded Review of FHA Mortgagee Applicants and Newly Approved Mortgagees- Not later than the expiration of the 3-month period beginning upon the date of the enactment of this Act, the Secretary of Housing and Urban Development shall--CommentsClose CommentsPermalink





(1) expand the existing subordinate mortgage’ after ‘mortgage’.

Page 30, line 22, strike ‘$2,316,000,000’ and insert ‘$1,244,000,000’.

Page 35, line 23, strike ‘203(c)’ and insert ‘230(c)’.

Page 69, strike line 1 and all that follows through line 15 and insert the following process for reviewing new applicants for approval for participation in the mortgage insurance programs of the Secretary for mortgages on 1- to 4-family residences for the purpose of identifying applicants who represent a high risk to the Mutual Mortgage Insurance Fund; andCommentsClose CommentsPermalink




(2) implement procedures that, for mortgagees approved during the 12-month period ending upon such date of enactment--CommentsClose CommentsPermalink





(A) expand the number of mortgages originated by such mortgagees that are reviewed for compliance with applicable laws, regulations, and policies; andCommentsClose CommentsPermalink





(B) include a process for random reviews of such mortgagees and a process for reviews that is based on volume of mortgages originated by such mortgagees.CommentsClose CommentsPermalink

(a) Temporary Increase in Deposit Insurance Extended- Section 136 of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5241) is amended--CommentsClose CommentsPermalink





(1) in subsection (a)--CommentsClose CommentsPermalink





(A) in paragraph (1), by striking ‘December 31, 2009’ and inserting ‘December 31, 2013’;CommentsClose CommentsPermalink





(B) by striking paragraph (2);CommentsClose CommentsPermalink





(C) by redesignating paragraph (3) as paragraph (2); andCommentsClose CommentsPermalink





(D) in paragraph (2), as so redesignated, by striking ‘December 31, 2009’ and inserting ‘December 31, 2013’; andCommentsClose CommentsPermalink





(2) in subsection (b)--CommentsClose CommentsPermalink





(A) in paragraph (1), by striking ‘December 31, 2009’ and inserting ‘December 31, 2013’;CommentsClose CommentsPermalink





(B) by striking paragraph (2);CommentsClose CommentsPermalink





(C) by redesignating paragraph (3) as paragraph (2); andCommentsClose CommentsPermalink





(D) in paragraph (2), as so redesignated, by striking ‘December 31, 2009’ and inserting ‘December 31, 2013’; andCommentsClose CommentsPermalink





(b) Extension of Restoration Plan Period- Section 7(b)(3)(E)(ii) of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(3)(E)(ii)) is amended by striking ‘5-year period’ and inserting ‘8-year period’.CommentsClose CommentsPermalink





(c) FDIC and NCUA Borrowing Authority-CommentsClose CommentsPermalink





(1) FDIC- Section 14(a) of the Federal Deposit Insurance Act (12 U.S.C. 1824(a)) is amended--CommentsClose CommentsPermalink





(A) by striking ‘$30,000,000,000’ and inserting ‘$100,000,000,000’;CommentsClose CommentsPermalink





(B) by striking ‘The Corporation is authorized’ and inserting the following:CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Corporation is authorized’;CommentsClose CommentsPermalink





(C) by striking ‘There are hereby’ and inserting the following:CommentsClose CommentsPermalink





‘(2) FUNDING- There are hereby’; andCommentsClose CommentsPermalink





(D) by adding at the end the following:CommentsClose CommentsPermalink





‘(3) TEMPORARY INCREASES AUTHORIZED-CommentsClose CommentsPermalink





‘(A) RECOMMENDATIONS FOR INCREASE- During the period beginning on the date of enactment of this paragraph and ending on December 31, 2010, if, upon the written recommendation of the Board of Directors (upon a vote of not less than two-thirds of the members of the Board of Directors) and the Board of Governors of the Federal Reserve System (upon a vote of not less than two-thirds of the members of such Board), the Secretary of the Treasury (in consultation with the President) determines that additional amounts above the $100,000,000,000 amount specified in paragraph (1) are necessary, such amount shall be increased to the amount so determined to be necessary, not to exceed $500,000,000,000.CommentsClose CommentsPermalink





‘(B) REPORT REQUIRED- If the borrowing authority of the Corporation is increased above $100,000,000,000 pursuant to subparagraph (A), the Corporation shall promptly submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives describing the reasons and need for the additional borrowing authority and its intended uses.CommentsClose CommentsPermalink





‘(C) RESTRICTION ON USAGE- The Corporation may not borrow pursuant to subparagraph (A) to fund obligations of the Corporation incurred as a part of a program established by the Secretary of the Treasury pursuant to the Emergency Economic Stabilization Act of 2008 to purchase or guarantee assets.’.CommentsClose CommentsPermalink





(2) NCUA- Section 203(d)(1) of the Federal Credit Union Act (12 U.S.C. 1783(d)(1)) is amended to read as follows:CommentsClose CommentsPermalink





‘(1) If, in the judgment of the Board, a loan to the insurance fund, or to the stabilization fund described in section 217 of this title, is required at any time for purposes of this subchapter, the Secretary of the Treasury shall make the loan, but loans under this paragraph shall not exceed in the aggregate $6,000,000,000 outstanding at any one time. Except as otherwise provided in this subsection, section 217, and in subsection (e) of this section, each loan under this paragraph shall be made on such terms as may be fixed by agreement between the Board and the Secretary of the Treasury.’.CommentsClose CommentsPermalink





(3) TEMPORARY INCREASES OF BORROWING AUTHORITY FOR NCUA- Section 203(d) of the Federal Credit Union Act (12 U.S.C. 1783(d)) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(4) TEMPORARY INCREASES AUTHORIZED-CommentsClose CommentsPermalink





‘(A) RECOMMENDATIONS FOR INCREASE- During the period beginning on the date of enactment of this paragraph and ending on December 31, 2010, if, upon the written recommendation of the Board (upon a vote of not less than two-thirds of the members of the Board) and the Board of Governors of the Federal Reserve System (upon a vote of not less than two-thirds of the members of such Board), the Secretary of the Treasury (in consultation with the President) determines that additional amounts above the $6,000,000,000 amount specified in paragraph (1) are necessary, such amount shall be increased to the amount so determined to be necessary, not to exceed $30,000,000,000.CommentsClose CommentsPermalink





‘(B) REPORT REQUIRED- If the borrowing authority of the Board is increased above $6,000,000,000 pursuant to subparagraph (A), the Board shall promptly submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives describing the reasons and need for the additional borrowing authority and its intended uses.’.CommentsClose CommentsPermalink





(d) Expanding Systemic Risk Special Assessments- Section 13(c)(4)(G)(ii) of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)(ii)) is amended to read as follows:CommentsClose CommentsPermalink





‘(ii) REPAYMENT OF LOSS-CommentsClose CommentsPermalink





‘(I) IN GENERAL- The Corporation shall recover the loss to the Deposit Insurance Fund arising from any action taken or assistance provided with respect to an insured depository institution under clause (i) from 1 or more special assessments on insured depository institutions, depository institution holding companies (with the concurrence of the Secretary of the Treasury with respect to holding companies), or both, as the Corporation determines to be appropriate.CommentsClose CommentsPermalink





‘(II) TREATMENT OF DEPOSITORY INSTITUTION HOLDING COMPANIES- For purposes of this clause, sections 7(c)(2) and 18(h) shall apply to depository institution holding companies as if they were insured depository institutions.CommentsClose CommentsPermalink





‘(III) REGULATIONS- The Corporation shall prescribe such regulations as it deems necessary to implement this clause. In prescribing such regulations, defining terms, and setting the appropriate assessment rate or rates, the Corporation shall establish rates sufficient to cover the losses incurred as a result of the actions of the Corporation under clause (i) and shall consider: the types of entities that benefit from any action taken or assistance provided under this subparagraph; economic conditions, the effects on the industry, and such other factors as the Corporation deems appropriate and relevant to the action taken or the assistance provided. Any funds so collected that exceed actual losses shall be placed in the Deposit Insurance Fund.’.CommentsClose CommentsPermalink





(e) Establishment of a National Credit Union Share Insurance Fund Restoration Plan Period- Section 202(c)(2) of the Federal Credit Union Act (12 U.S.C. 1782(c)(2)) is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





(H ‘(D) FUND RESTORATION PLANS- CommentsClose CommentsPermalink





‘(i) IN GENERAL- Whenever--CommentsClose CommentsPermalink





‘(I) the Board projects that the equity ratio of the Fund will, within 6 months of such determination, fall below the minimum amount specified in subparagraph (C); orCommentsClose CommentsPermalink





‘(II) the equity ratio of the Fund actually falls below the minimum amount specified in subparagraph (C) without any determination under sub-clause (I) having been made,CommentsClose CommentsPermalink





the Board shall establish and implement a restoration plan within 90 days that meets the requirements of clause (ii) and such other conditions as the Board determines to be appropriate.CommentsClose CommentsPermalink





‘(ii) REQUIREMENTS OF RESTORATION PLAN- A restoration plan meets the requirements of this clause if the plan provides that the equity ratio of the Fund will meet or exceed the minimum amount specified in subparagraph (C) before the end of the 8-year period beginning upon the implementation of the plan (or such longer period as the Board may determine to be necessary due to extraordinary circumstances).CommentsClose CommentsPermalink





‘(iii) TRANSPARENCY- Not more than 30 days after the Board establishes and implements a restoration plan under clause (i), the Board shall publish in the Federal Register a detailed analysis of the factors considered and the basis for the actions taken with regard to the plan.’.CommentsClose CommentsPermalink





(f) Temporary Corporate Credit Union Stabilization Fund-CommentsClose CommentsPermalink





(1) ESTABLISHMENT OF STABILIZATION FUND- Title II of the Federal Credit Union Act (12 U.S.C. 1781 et seq.) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

(a) Short Title- This section may be cited as the ‘Public-Private Investment Program Improvement and Oversight Act of 2009’.CommentsClose CommentsPermalink





(b) Public-Private Investment Program-CommentsClose CommentsPermalink





(1) IN GENERAL- Any program established by the Federal Government to create a public-private investment fund shall--CommentsClose CommentsPermalink





(A) in consultation with the Special Inspector General of the Trouble Asset Relief Program (in this section referred to as the ‘Special Inspector General’), impose strict conflict of interest rules on managers of public-private investment funds to ensure that securities bought by the funds are purchased in arms-length transactions, that fiduciary duties to public and private investors in the fund are not violated, and that there is full disclosure of relevant facts and financial interests (which conflict of interest rules shall be implemented by the manager of a public-private investment fund prior to such fund receiving Federal Government financing);CommentsClose CommentsPermalink





(B) require each public-private investment fund to make a quarterly report to the Secretary of the Treasury (in this section referred to as the ‘Secretary’) that discloses the 10 largest positions of such fund (which reports shall be publicly disclosed at such time as the Secretary of the Treasury determines that such disclosure will not harm the ongoing business operations of the fund);CommentsClose CommentsPermalink





(C) allow the Special Inspector General access to all books and records of a public-private investment fund, including all records of financial transactions in machine readable form, and the confidentiality of all such information shall be maintained by the Special Inspector General;CommentsClose CommentsPermalink





(D) require each manager of a public-private investment fund to retain all books, documents, and records relating to such public-private investment fund, including electronic messages;CommentsClose CommentsPermalink





(E) require each manager of a public-private investment fund to acknowledge, in writing, a fiduciary duty to both the public and private investors in such fund;CommentsClose CommentsPermalink





(F) require each manager of a public-private investment fund to develop a robust ethics policy that includes methods to ensure compliance with such policy;CommentsClose CommentsPermalink





(G) require each manager of astrict investor screening procedures for public-private fund to identify for the Secretary, investment funds; andCommentsClose CommentsPermalink





(H) require each manager of a public-private fund to identify for the Secretary, on a periodic basis, each investor that, individually or together with affiliates, directly or indirectly, holds equity interests equal to at least 10 percent of the equity interest of the fund including if such interests are held in a vehicle formed for the purpose of directly or indirectly investing in the fundPage 70, beginning on line 21, strike ‘the Public .CommentsClose CommentsPermalink





(2) INTERACTION BETWEEN PUBLIC-PRIVATE INVESTMENT FUNDS AND THE TERM-ASSET BACKED SECURITIES LOAN FACILITY- The Secretary shall consult with the Special Inspector General and shall issue regulations governing the interaction of the Public-Private Investment’ and all that follows through ‘Board),’ on page 71, line 2, and insert ‘ Program, the Term-Asset Backed Securities Loan Facility, and other similar public-private investment programs. Such regulations shall address concerns regarding the potential for excessive leverage that could result from interactions between such programs.CommentsClose CommentsPermalink





(3) REPORT- Not later than 60 days after the date of the establishment of a program described in paragraph (1), the Special Inspector General shall submit a report to Congress on the implementation of this section.CommentsClose CommentsPermalink





(c) Additional Appropriations for the Special Inspector General-CommentsClose CommentsPermalink





(1) IN GENERAL- Of amounts made available under section 115(a) of the Emergency Economic Stabilization Act of 2008 (Public Law 110-343), $15,000,000 shall be made available to the Special Inspector General, which shall be in addition to amounts otherwise made available to the Special Inspector General.CommentsClose CommentsPermalink





(2) PRIORITIES- In utilizing funds made available under this section, the Special Inspector General shall prioritize the performance of audits or investigations of recipients of non-recourse Federal loans made under any program that is funded in whole or in part by funds appropriated under the Emergency Economic Stabilization Act of 2008, to the extent that such priority is consistent with other aspects of the mission of the Special Inspector General. Such audits or investigations shall determine the existence of any collusion between the loan recipient and the seller or originator of the asset used as loan collateral, or any other conflict of interest that may have led the loan recipient to deliberately overstate the value of the asset used as loan collateral.CommentsClose CommentsPermalink





(d) Rule of Construction- Notwithstanding any other provision of law, nothing in this section shall be construed to apply to any activity of the Federal Deposit Insurance Corporation in connection with insured depository institutions, as described in section 13(c)(2)(B) of the Federal Deposit Insurance Act.CommentsClose CommentsPermalink





(e) Definition- In this section, the term ‘public-private investment fund’ means a financial vehicle that is--CommentsClose CommentsPermalink





(1) established by the Federal Government to purchase pools of loans, securities, or assets from a financial institution described in section 101(a)(1) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211(a)(1)); andCommentsClose CommentsPermalink





(2) funded by a combination of cash or equity from private investors and funds provided by the Secretary of the Treasury or funds appropriated under the Emergency Economic Stabilization Act of 2008.CommentsClose CommentsPermalink





(f) Offset of Costs of Program Changes- Notwithstanding the amendment made by section 202(b) of this Act, paragraph (3) of section 115(a) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5225) is amended by inserting ‘, as such amount is reduced by $1,259,000,000,’ after ‘$700,000,000,000’.CommentsClose CommentsPermalink





(g) Regulations- The Secretary of the Treasury may prescribe such regulations or other guidance as may be necessary or appropriate to define terms or carry out the authorities or purposes of this section.CommentsClose CommentsPermalink

Section 125(b) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5233(b)) is amended by adding at the end the following:CommentsClose CommentsPermalink





‘(3) SPECIAL REPORT ON FARM LOAN RESTRUCTURING- Not later than 60 days after the date of enactment of this paragraph, the Oversight Panel shall submit a special report on farm loan restructuring that--CommentsClose CommentsPermalink





‘(A) analyzes the state of the commercial farm credit markets and the use of loan restructuring as an alternative to foreclosure by funds appropriated recipients of financial assistance under the Emergency Economic Stabilization Act of 2008,’.

Page 72, line 11, strike ‘$2,331,000,000’ and insert ‘$1,259,000,000’.

Page 72, after line 11, insert the following new subsection:

(g) Regulations- The Secretary of the Treasury may prescribe such regulations orTroubled Asset Relief Program; andCommentsClose CommentsPermalink




‘(B) includes an examination of and recommendation on the different methods for farm loan restructuring that could be used as part of a foreclosure mitigation program for farm loans made by recipients of financial assistance under the Troubled Asset Relief Program, including any programs for direct loan restructuring or modification carried out by the Farm Service Agency of the Department of Agriculture, the farm credit system, and the Making Home Affordable Program of the Department of the Treasury.’.CommentsClose CommentsPermalink

Section 116 of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5226) is amended--CommentsClose CommentsPermalink





(1) in subsection (a)(1)(A)--CommentsClose CommentsPermalink





(A) in clause (iii), by striking ‘and’ at the end;CommentsClose CommentsPermalink





(B) in clause (iv), by striking the period at the end and inserting ‘; and’; andCommentsClose CommentsPermalink





(C) by adding at the end the following:CommentsClose CommentsPermalink





‘(v) public accountability for the exercise of such authority, including with respect to actions taken by those entities participating in programs established under this Act.’; andCommentsClose CommentsPermalink





(2) in subsection (a)(2)--CommentsClose CommentsPermalink





(A) by redesignating subparagraph (C) as subparagraph (F); andCommentsClose CommentsPermalink





(B) by striking subparagraphs (A) and (B) and inserting the following:CommentsClose CommentsPermalink





‘(A) DEFINITION- In this paragraph, the term ‘governmental unit’ has the meaning given under section 101(27) of title 11, United States Code, and does not include any insured depository institution as defined under section 3 of the Federal Deposit Insurance Act (12 U.S.C. 8113).CommentsClose CommentsPermalink





‘(B) GAO PRESENCE- The Secretary shall provide the Comptroller General with appropriate space and facilities in the Department of the Treasury as necessary to facilitate oversight of the TARP until the termination date established in section 5230 of this title.CommentsClose CommentsPermalink





‘(C) ACCESS TO RECORDS-CommentsClose CommentsPermalink





‘(i) IN GENERAL- Notwithstanding any other provision of law, and for purposes of reviewing the performance of the TARP, the Comptroller General shall have access, upon request, to any information, data, schedules, books, accounts, financial records, reports, files, electronic communications, or other papers, things, or property belonging to or in use by the TARP, any entity established by the Secretary under this Act, any entity that is established by a Federal reserve bank and receives funding from the TARP, or any entity (other than a governmental unit) participating in a program established under the authority of this Act, and to the officers, employees, directors, independent public accountants, financial advisors and any and all other guidance as agents and representatives thereof, at such time as the Comptroller General may request.CommentsClose CommentsPermalink





‘(ii) VERIFICATION- The Comptroller General shall be afforded full facilities for verifying transactions with the balances or securities held by, among others, depositories, fiscal agents, and custodians.CommentsClose CommentsPermalink





‘(iii) COPIES- The Comptroller General may make and retain copies of such books, accounts, and other records as the Comptroller General determines appropriate.CommentsClose CommentsPermalink





‘(D) AGREEMENT BY ENTITIES- Each contract, term sheet, or other agreement between the Secretary or the TARP (or any TARP vehicle, officer, director, employee, independent public accountant, financial advisor, or other TARP agent or representative) and an entity (other than a governmental unit) participating in a program established under this Act shall provide for access by the Comptroller General in accordance with this section.CommentsClose CommentsPermalink





‘(E) RESTRICTION ON PUBLIC DISCLOSURE-CommentsClose CommentsPermalink





‘(i) IN GENERAL- The Comptroller General may not publicly disclose proprietary or trade secret information obtained under this section.CommentsClose CommentsPermalink





‘(ii) EXCEPTION FOR CONGRESSIONAL COMMITTEES- This subparagraph does not limit disclosures to congressional committees or members thereof having jurisdiction over a private or public entity referred to under subparagraph (C).CommentsClose CommentsPermalink





‘(iii) RULE OF CONSTRUCTION- Nothing in this section shall be necessary or appropriate to define terms or carry out the authorities or purposes of this section.Page 80, line 17, insert ‘construed to alter or amend the prohibitions against the disclosure of trade secrets or other information prohibited by section 1905 of title 18, United States Code, section 714(c) of title 31, United States Code, or other applicable provisions of law.’.CommentsClose CommentsPermalink

(a) In General- In the case of any foreclosure on a federally-related mortgage loan or on any dwelling or residential real property after the date of enactment of this title, any immediate successor in interest in such property pursuant to the foreclosure shall assume such interest subject to--CommentsClose CommentsPermalink





(1) the provision, by such successor in interest of a notice to vacate to any bona fide tenant at least 90 days before the effective date of such notice; andCommentsClose CommentsPermalink





(2) the rights of any bona fide tenant, as of the date of such notice of foreclosure--CommentsClose CommentsPermalink





(A) under any bona fide lease entered into before the notice of foreclosure to occupy the premises until the end of the remaining term of the lease, except that a successor in interest may terminate a lease effective on the date of sale of the unit to a purchaser who will occupy the unit as a primary residence, subject to the receipt by the tenant of the 90 day notice under paragraph (1); orCommentsClose CommentsPermalink





(B) without a lease or with a lease terminable at will under State law, subject to the receipt by the tenant of the 90 day notice under subsection (1),CommentsClose CommentsPermalink





except that nothing under this section shall affect the requirements for termination of any Federal- or State-subsidized tenancy or of any State or local law that provides longer time periods or other additional protections for tenants.CommentsClose CommentsPermalink





(b) Bona Fide Lease or Tenancy- For purposes of this section, a lease or tenancy shall be considered bona fide only if--CommentsClose CommentsPermalink





(1) the mortgagor or the child, spouse, or parent of the mortgagor’ after ‘mortgagor’.

Page 80, line 20, strike ‘or’ and insert ‘and’.

Page 80, line 23, insert ‘ under the contract is not the tenant;CommentsClose CommentsPermalink




(2) the lease or tenancy was the result of an arms-length transaction; andCommentsClose CommentsPermalink





(3) the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit’s rent is reduced or subsidized due to a Federal, State, or local subsidy.CommentsClose CommentsPermalink





(c) Definition- For purposes of this section, the term ‘federally-related mortgage loan’ has the same meaning as in section 3 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2602).CommentsClose CommentsPermalink