I
111th CONGRESS
1st Session
H. R. 230
IN THE HOUSE OF REPRESENTATIVES
January 7, 2009
Mr. Cardoza introduced the following bill; which was referred to the Committee on Financial Services
A BILL
To prevent foreclosure of home mortgages and increase the availability of affordable new mortgages.
Short title
This Act may be cited as the
Housing Opportunity and Mortgage
Equity Act of 2009
.
Affordable refinancing mortgages and new mortgages
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 refinancing mortgages and 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.
Purchase of qualified mortgages
Requirement to purchase
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 mortgages. Subject to subsection (g), if the enterprise determines that such mortgage or mortgages meet the requirements for qualified mortgages, the enterprise shall make a commitment to purchase, and shall purchase, the mortgage or mortgages.
Advance commitments
The Director shall require each enterprise to establish a procedure for approval of lenders to receive commitments, in advance of the origination of qualified mortgages, for purchase of such mortgages under this section by the enterprise.
Qualified mortgages
Qualified mortgage
For purposes of this section, the term qualified
mortgage
means a mortgage that is a qualified refinancing mortgage or a
qualified new mortgage.
Qualified refinancing mortgage
For
purposes of this section, the term qualified refinancing
mortgage
means a mortgage that meets the following requirements:
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.
Principal residence
The mortgagor under the mortgage shall occupy the property subject to the mortgage as his or her principal residence.
Refinancing
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—
was made for purchase of, or refinancing another first mortgage on, the same property that is subject to the qualified refinancing mortgage; and
was originated on or before January 1, 2008.
Interest rate; term to maturity
The mortgage shall—
bear interest at a single rate that is fixed for the entire term of the mortgage, which shall not exceed 4.0 percent annually; and
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.
Underwriting standards
The mortgage shall meet such underwriting standards as the Director shall require.
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.
Qualified new mortgage
For purposes of this
section, the term qualified new mortgage
means a mortgage that
meets the following requirements:
Terms
The mortgage meets the requirements under subparagraphs (A), (B), (D), and (E) of paragraph (2).
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.
New mortgages
The mortgage was originated on or after the date of the enactment of this Act.
Exceptions to underwriting standards
Each enterprise shall establish such exceptions to the underwriting standards of the enterprise, including downpayment and credit rating standards, that conform to the underwriting standards established pursuant to subsection (c)(5), as may be necessary to allow the enterprise to purchase and securitize qualified refinancing mortgages and qualified new mortgages under this section, in accordance with such requirements as the Director shall establish.
Securitization
Requirement
Each enterprise shall, upon such terms and conditions as it may prescribe, set aside any qualified 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.
Form
Securities issued under this subsection may be in the form of debt obligations or trust certificates of beneficial interest, or both.
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.
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.
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.
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.
Federal Reserve financing facility
The Board of Governors of the Federal Reserve System shall establish a credit facility of the Federal Reserve System to make credit available to the enterprises at interest rates comparable to rates on securities issued by the Secretary of the Treasury under chapter 31 of title 31, United States Code, and having comparable terms, as determined by the Board.
Termination
The requirement under subsection (b)(1) for the enterprises to purchase mortgages shall not apply to any mortgage proferred to an enterprise after December 31, 2010.
Definitions
For purposes of this Act, the following definitions shall apply:
Director
The
term Director
means the Director of the Federal Housing Finance
Agency.
Enterprise
The
term enterprise
means the Federal National Mortgage Association
and the Federal Home Loan Mortgage Corporation.
Secretary
The
term Secretary
means the Secretary of the Treasury.