I
110th CONGRESS
1st Session
H. R. 3777
IN THE HOUSE OF REPRESENTATIVES
October 9, 2007
Ms. Bean (for herself and Mr. Neugebauer) introduced the following bill; which was referred to the Committee on Financial Services
A BILL
To temporarily raise the portfolio caps applicable to Freddie Mac and Fannie Mae, to provide the necessary financing to curb foreclosures by facilitating the refinancing of at-risk subprime borrowers into safe, prime loans, to preserve liquidity in the mortgage lending markets, and for other purposes.
Short title
This Act may be cited as the
Protecting Access to Safe Mortgages
Act
.
Findings
The Congress finds that—
American families will be severely harmed by an unprecedented wave of potential foreclosures expected to occur in the next 12 months, as adjustable rate subprime mortgages reset to higher interest rates;
preventing such foreclosures and facilitating the refinancing of at-risk subprime borrowers into safe prime loans will require additional capacity on the part of the government sponsored enterprises, the Federal National Mortgage Association, and the Federal Home Loan Mortgage Association, and any affiliates thereof, to purchase additional financing;
there is a lack of liquidity in the financial markets for mortgage backed securities, which threatens to impair financing for all mortgages; and
the government sponsored enterprises, the Federal National Mortgage Association, and the Federal Home Loan Mortgage Corporation, and any affiliates thereof, are uniquely positioned to provide the financing necessary to alleviate the predicted wave of upcoming foreclosures, and the liquidity necessary to help United States markets.
Definitions
For purposes of this Act, the following definitions shall apply:
Director
The term Director means the Director of the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development.
Enterprise
The term enterprise means—
the Federal National Mortgage Association, and any affiliate thereof; and
the Federal Home Loan Mortgage Corporation, and any affiliate thereof.
Fannie mae consent order
The term Fannie Mae Consent Order means the order of the Office of Federal Housing Enterprises Oversight dated May 23, 2006, in the matter of the Federal National Mortgage Association.
Freddie mac letter
The term Freddie Mac Letter means the letter dated July 31, 2006, from the Chairman and Chief Executive Officer of the Federal Home Loan Mortgage Corporation to the Director.
OFHEO
The term OFHEO means the Office of Federal Housing Enterprises Oversight.
Lifting of Portfolio Caps
In general
Immediately upon the date of enactment of this Act, the Director shall terminate, suspend, modify, or otherwise lift—
the limitation on growth provision set forth in section 4, Article III of the Fannie Mae Consent Order, as interpreted and modified by OFHEO on September 19, 2007; and
the voluntary temporary growth limitation described in the Freddie Mac Letter, as interpreted and modified by OFHEO on September 19, 2007.
Factors
In carrying out subsection (a), the Director shall increase the mortgage portfolio limitations of both enterprises by not less than 10 percent, unless the Director certifies in writing to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, and demonstrates by compelling evidence that such action is likely to result in a significant depletion of the core capital of an enterprise, or otherwise create an unsafe and unsound condition.
Rule of construction
Nothing in this section shall be construed to prevent or prohibit the Director from exercising any authority of the Director to terminate, suspend, modify, or otherwise lift the limitations referred to in paragraphs (1) and (2) of subsection (a) beyond the minimum increase specified in subsection (b), as the Director deems appropriate.
Sunset provision
This Act is repealed, effective 1 year after the date of enactment of this Act.