S.Amdt. 1010

1. Adds TITLE II--HECM FRAUD PREVENTION AND ENFORCEMENT ACT at the end of the bill

   Adds a title

   In S. 386 · Reported to Senate

   (b) Effective Date and Application.--The amendments made by this section shall take effect on the date of enactment of this Act and shall apply to conduct on or after the date of enactment, except that subparagraph (B) of section 3729(a)(1) of title 31, United States Code, as added by subsection (a)(1), shall take effect as if enacted on June 7, 2008, and apply to all claims under the False Claims Act (31 U.S.C. 3729 et seq.) that are pending on or after that date.

   Inserted: TITLE II--HECM FRAUD PREVENTION AND ENFORCEMENT ACT

   Inserted: SEC. 21. SHORT TITLE.

   Inserted: This title may be cited as the "Home Equity Conversion Mortgage Fraud Prevention and Enforcement Act of 2009".

   Inserted: SEC. 22. PURPOSE.

   Inserted: The purpose of this title is to provide additional fraud prevention, detection, and enforcement provisions with respect to federally-insured home equity conversion mortgages.

   Inserted: SEC. 23. FEDERALLY-INSURED HOME EQUITY CONVERSION MORTGAGES.

   Inserted: (a) Certification of Residence.--Section 255(d)(2) of the National Housing Act (12 U.S.C. 1715z-20(d)(2)) is amended--

   Inserted: (1) in subparagraph (C), by striking "and" at the end;

   Inserted: (2) by redesignating subparagraph (D) as subparagraph (E); and

   Inserted: (3) by inserting after subparagraph (C) the following:

   Inserted: "(D) submits a certification to the Secretary and the mortgagee that the mortgagor occupies the dwelling that secures the mortgage; and".

   Inserted: (b) Purchase of Dwelling.--Section 255(d)(3) of the National Housing Act (12 U.S.C. 1715z-20(d)(3)) is amended by striking "that is" and all that follows through "unit" and inserting "that--"

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   Inserted: "(A) is designed principally for a 1- to 4-family residence in which the mortgagor occupies 1 of the units; and

   Inserted: "(B) in the case of a dwelling that is purchased with the proceeds of a home equity conversion mortgage, was owned and occupied during the 180-day period ending on the date of the sale of the dwelling".

   Inserted: (c) Appraisals.--Section 255(d) of the National Housing Act (12 U.S.C. 1715z-20(d)) is amended--

   Inserted: (1) in paragraph (10), by striking "and" at the end;

   Inserted: (2) in paragraph (11), by striking the period at the end and inserting "; and"; and

   Inserted: (3) by adding at the end the following:

   Inserted: "(12) be secured by a dwelling that has been properly appraised by a person that--

   Inserted: "(A) the Secretary determines is qualified to perform such appraisals;

   Inserted: "(B) has verified the purchase price of the dwelling to ensure that the appraised value of the property is not inflated; and

   Inserted: "(C) has obtained any documentation necessary to support an appraised value that is high in relation to those of comparable dwellings.".

   Inserted: (d) Information Services for Mortgagors.--Section 255(f) of the National Housing Act (12 U.S.C. 1715z-20(f)) is amended--

   Inserted: (1) by redesignating paragraphs (1) through (4) as subparagraphs (A) through (D), respectively, and adjusting the margins accordingly;

   Inserted: (2) by striking paragraph (5);

   Inserted: (3) in the matter preceding subparagraph (A), as redesignated by this subsection, by striking "The Secretary" and all that follows through "which shall include--" and inserting the following:

   Inserted: "(1) In general.--The Secretary shall provide or cause to be provided to entities other than the lender the information required under subsection (d)(2)(B). Such information shall be discussed with the mortgagor and shall include--";

   Inserted: (4) in the matter following subparagraph (D), as redesignated, by striking "The Secretary shall" and inserting the following:

   Inserted: "(4) Alternative approaches.--The Secretary shall";

   Inserted: (5) in subparagraph (D), as redesignated by this subsection, by striking "and" at the end; and

   Inserted: (6) by inserting after subparagraph (D), as redesignated by this subsection, the following:

   Inserted: "(E) information about how to report mortgage-related fraud or consumer abuses, including information about how to contact the Office of the Inspector General of the Department of Housing and Urban Development;

   Inserted: "(F) in the case of a home equity conversion mortgage in which a person was removed from the title to the dwelling, information about--

   Inserted: "(i) the consequences of being removed from such title; and

   Inserted: "(ii) the consequences upon the death of the mortgagor or a divorce settlement.

   Inserted: "(2) Fraud reporting.--A person or entity that counsels a mortgagor under this subsection shall report to the Inspector General of the Department of Housing and Urban Development any suspected mortgage-related fraud against a mortgagor.

   Inserted: "(3) Certification.--Before making a home equity conversion mortgage, a mortgagee shall obtain from each mortgagor a certification that such mortgagor has received counseling under this subsection.".

   Inserted: (e) Additional Protections.--Section 255 of the National Housing Act (12 U.S.C. 1715z-20) is amended by inserting after subsection (p) the following:

   Inserted: "(q) Powers of HUD Inspector General.--The Inspector General of the Department of Housing and Urban Development may--

   Inserted: "(1) conduct independent audits and inspections of mortgagees to ensure that such mortgagees comply with the requirements under this section; and

   Inserted: "(2) compare the records of mortgagors under mortgages insured under this section with the Death Master File of the Social Security Administration.

   Inserted: "(r) Privacy Protections.--A mortgagee may not sell or disclose any personally identifiable information about a mortgagor under a home equity conversion mortgage for marketing purposes unless such disclosure is at the request of the mortgagor.

   Inserted: "(s) Compliance System.--Each mortgagee shall create and maintain a system to ensure compliance with this section that includes--

   Inserted: "(1) written procedures; and

   Inserted: "(2) a periodic review of records to detect and prevent violations of this section.

   Inserted: "(t) Advertising.--

   Inserted: "(1) In general.--A mortgagee may not advertise a home equity conversion mortgage in a manner that--

   Inserted: "(A) is false or misleading;

   Inserted: "(B) fails to present a fair balance between the risks and benefits of a home equity conversion mortgage; or

   Inserted: "(C) fails to reveal--

   Inserted: "(i) facts that are material to a representation made in such advertisement; or

   Inserted: "(ii) the consequences of obtaining a home equity conversion mortgage.

   Inserted: "(2) Request to withdraw or revise advertisement.--The Secretary or the Commissioner of the Federal Trade Commission may request that a mortgagee withdraw or modify an advertisement that does not meet the requirements established under paragraph (1).".

   Inserted: SEC. 24. CRIMINAL PENALTIES.

   Inserted: (a) Department of Housing and Urban Development Transactions.--Section 1012 of title 18, United States Code, is amended by striking "one year" and inserting "2 years".

   Inserted: (b) Equity Skimming.--Section 912 of the Housing and Urban Development Act of 1970 (12 U.S.C. 1709-2) is amended--

   Inserted: (1) in paragraph (1), by striking "a mortgage or deed of trust insured or held by the Secretary" and inserting "a home equity conversion mortgage, a mortgage, or deed of trust insured or held by the Secretary"; and

   Inserted: (2) in the matter following paragraph (3), by adding at the end the following: "Notwithstanding any other provision of law, and for purposes of any violation of this section relating to a home equity conversion mortgage, the statute of limitations for the commencement of a criminal action under this section shall not begin and shall be considered tolled until the fraud constituting the action is discovered.".

   Original wording

   At the end of the bill, add the following:

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As printed