II
Calendar No. 485
110th CONGRESS
1st Session
S. 2346
IN THE SENATE OF THE UNITED STATES
November 13, 2007
Mr. Schumer introduced the following bill; which was read the first time
November 14, 2007
Read the second time and placed on the calendar
A BILL
To temporarily increase 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, affordable loans, and for other purposes.
Short title
This Act may be cited as the
Promoting Refinancing Opportunities
for Mortgages Impacted by the Subprime Emergency Act of
2007
or the PROMISE Act
.
Findings
Congress finds that—
American families will be severely harmed by an unprecedented wave of anticipated foreclosures expected to occur over the coming 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, affordable loans will require the additional liquidity provided by the Federal National Mortgage Association and the Federal Home Loan Mortgage Association, and any affiliates thereof;
the failure to prevent these anticipated foreclosures could have devastating effects on household wealth, neighborhood property values, and the overall health of the broader economy; and
the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, and any affiliates thereof, are currently constrained from purchasing large volumes of subprime refinancings by portfolio limitations, as set forth by the Office of Federal Housing Enterprise Oversight.
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 Decree
The term Fannie Mae Consent Decree 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 Decree; and
the voluntary temporary growth limitation described in the Freddie Mac Letter.
Factors
In carrying out subsection (a), the Director shall increase the mortgage portfolio limitations of both enterprises by not less than 10 percent.
Allocation
In general
Eighty-five percent of the portfolio increase described in subsection (b) shall be used for the purpose of refinancing subprime mortgages at risk of foreclosure.
Definitions
The Director may establish criteria defining the term subprime mortgage, as the Director determines necessary.
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 referenced 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 6 months after the date of enactment of this Act, and the authority of the Director under this Act is terminated on that date of repeal.
November 14, 2007
Read the second time and placed on the calendar