[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1217 Reported in Senate (RS)]
Calendar No. 579
113th CONGRESS
2d Session
S. 1217
To provide secondary mortgage market reform, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 25, 2013
Mr. Corker (for himself, Mr. Warner, Mr. Johanns, Mr. Tester, Mr.
Heller, Ms. Heitkamp, Mr. Moran, Mrs. Hagan, Mr. Kirk, Mr. Manchin, Mr.
Chambliss, and Mr. Begich) introduced the following bill; which was
read twice and referred to the Committee on Banking, Housing, and Urban
Affairs
September 18, 2014
Reported by Mr. Johnson of South Dakota, with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
_______________________________________________________________________
A BILL
To provide secondary mortgage market reform, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
<DELETED>SECTION 1. SHORT TITLE; TABLE OF CONTENTS.</DELETED>
<DELETED> (a) Short Title.--This Act may be cited as the ``Housing
Finance Reform and Taxpayer Protection Act of 2013''.</DELETED>
<DELETED> (b) Table of Contents.--The table of contents for this Act
is as follows:</DELETED>
<DELETED>Sec. 1. Short title; table of contents.
<DELETED>Sec. 2. Definitions.
<DELETED>TITLE I--FEDERAL MORTGAGE INSURANCE CORPORATION
<DELETED>Sec. 101. Establishment.
<DELETED>Sec. 102. Director.
<DELETED>Sec. 103. Board of Directors.
<DELETED>Sec. 104. Office of the Inspector General.
<DELETED>Sec. 105. Staff, experts, and consultants.
<DELETED>Sec. 106. Reports; testimony; audits.
<DELETED>Sec. 107. Initial funding.
<DELETED>TITLE II--DUTIES, RESPONSIBILITIES, AND STRUCTURE OF THE FMIC
<DELETED>Subtitle A--Duties and Authorities
<DELETED>Sec. 201. Duties and responsibilities of the FMIC.
<DELETED>Sec. 202. Standard form credit risk-sharing mechanisms,
products, structures, contracts, or other
security agreements.
<DELETED>Sec. 203. Mortgage Insurance Fund.
<DELETED>Sec. 204. Insurance.
<DELETED>Sec. 205. Authority to protect taxpayers in unusual and
exigent market conditions.
<DELETED>Sec. 206. General powers.
<DELETED>Sec. 207. Exemptions.
<DELETED>Subtitle B--Oversight of Market Participants
<DELETED>Sec. 211. Approval of private mortgage insurers.
<DELETED>Sec. 212. Approval of servicers.
<DELETED>Sec. 213. Approval of issuers.
<DELETED>Sec. 214. Approval of bond guarantors.
<DELETED>Sec. 215. Authority to establish FMIC Mutual Securitization
Company.
<DELETED>Sec. 216. Additional authority relating to oversight of market
participants.
<DELETED>Sec. 217. Civil money penalties.
<DELETED>Sec. 218. Protection of privilege and other matters relating
to disclosures by market participants.
<DELETED>Subtitle C--Transparency in Market Operations
<DELETED>Sec. 221. Review of loan documents; disclosures.
<DELETED>Sec. 222. Investor immunity.
<DELETED>Sec. 223. Uniform securitization agreements.
<DELETED>Sec. 224. Uniform mortgage database.
<DELETED>Sec. 225. Electronic registration of eligible mortgages.
<DELETED>Subtitle D--FMIC Structure
<DELETED>Sec. 231. Office of Underwriting.
<DELETED>Sec. 232. Office of Securitization.
<DELETED>Sec. 233. Office of Federal Home Loan Bank Supervision.
<DELETED>TITLE III--TRANSFER OF POWERS, PERSONNEL, AND PROPERTY TO FMIC
FROM FHFA
<DELETED>Sec. 301. Powers and duties transferred.
<DELETED>Sec. 302. Transfer and rights of employees of the FHFA.
<DELETED>Sec. 303. Abolishment of FHFA.
<DELETED>Sec. 304. Transfer of property and facilities.
<DELETED>Sec. 305. Technical and conforming amendments.
<DELETED>TITLE IV--IMPROVING TRANSPARENCY, ACCOUNTABILITY, AND EFFICACY
WITHIN AFFORDABLE HOUSING
<DELETED>Sec. 401. Affordable housing allocations.
<DELETED>Sec. 402. Housing Trust Fund.
<DELETED>Sec. 403. Capital Magnet Fund.
<DELETED>Sec. 404. Additional taxpayer protections.
<DELETED>TITLE V--WIND DOWN OF FANNIE MAE AND FREDDIE MAC
<DELETED>Sec. 501. Repeal of GSE charters.
<DELETED>Sec. 502. Wind down.
<DELETED>Sec. 503. Aligning purpose of conservatorship with FMIC.
<DELETED>Sec. 504. Conforming loan limits.
<DELETED>Sec. 505. Portfolio reduction.
<DELETED>Sec. 506. Repeal of mandatory housing goals.
<DELETED>TITLE VI--IMPROVEMENTS TO FUNCTIONING OF HOUSING MARKET
<DELETED>Sec. 601. Continuation of multifamily business of the
enterprises.
<DELETED>Sec. 602. Multiple lender issues.
<DELETED>Sec. 603. GAO report on full privatization of secondary
mortgage market.
<DELETED>TITLE VII--GENERAL PROVISIONS
<DELETED>Sec. 701. Authority to issue regulations.
<DELETED>Sec. 702. Fair value accounting.
<DELETED>Sec. 703. Rule of construction.
<DELETED>Sec. 704. Severability.
<DELETED>SEC. 2. DEFINITIONS.</DELETED>
<DELETED> As used in this Act, the following definitions shall
apply:</DELETED>
<DELETED> (1) Approved bond guarantor.--The term ``approved
bond guarantor'' means any entity that provides credit
enhancement that is approved by the Corporation pursuant to
section 214 to guarantee the timely payment of principal and
interest on securities collateralized by eligible mortgages and
insured by the Corporation.</DELETED>
<DELETED> (2) Approved issuer.--The term ``approved issuer''
means an issuer that is approved by the Corporation pursuant to
section 213--</DELETED>
<DELETED> (A) to issue covered securities;
and</DELETED>
<DELETED> (B) to purchase insurance offered by the
Corporation pursuant to title II on a covered security
for which first loss credit enhancement has been
secured.</DELETED>
<DELETED> (3) Approved private mortgage insurer.--The term
``approved private mortgage insurer'' means an insurer that is
approved by the Corporation pursuant to section 211 to provide
private mortgage insurance on eligible mortgages.</DELETED>
<DELETED> (4) Approved servicer.--The term ``approved
servicer'' means a servicer that is approved by the Corporation
pursuant to section 212 to administer eligible
mortgages.</DELETED>
<DELETED> (5) Area.--The term ``area''--</DELETED>
<DELETED> (A) means a metropolitan statistical area
as established by the Office of Management and Budget;
and</DELETED>
<DELETED> (B) for purposes of paragraph (11)(A)(ii),
the median 1-family house price for an area shall be
equal to the median 1-family house price of the county
within the area that has the highest such median
price.</DELETED>
<DELETED> (6) Board; board of directors.--The terms
``Board'' and ``Board of Directors'' mean the Board of
Directors of the Federal Mortgage Insurance
Corporation.</DELETED>
<DELETED> (7) Charter.--The term ``charter'' means--
</DELETED>
<DELETED> (A) with respect to the Federal National
Mortgage Association, the Federal National Mortgage
Association Charter Act (12 U.S.C. 1716 et seq.);
and</DELETED>
<DELETED> (B) with respect to the Federal Home Loan
Mortgage Corporation, the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1451 et seq.).</DELETED>
<DELETED> (8) Corporation.--The term ``Corporation'' means
the Federal Mortgage Insurance Corporation established under
title I.</DELETED>
<DELETED> (9) Covered security.--The term ``covered
security'' means a mortgage-backed security--</DELETED>
<DELETED> (A) collateralized by eligible
mortgages;</DELETED>
<DELETED> (B) which is issued subject to a standard
form credit-risk sharing mechanism, product, structure,
contract, or other securitization agreement developed
by the Corporation pursuant to title II; and</DELETED>
<DELETED> (C) which is eligible for insurance by the
Corporation pursuant to title II, which insurance is
purchased by an approved issuer who issues covered
securities.</DELETED>
<DELETED> (10) Director.--The term ``Director'' means the
Director of the Federal Mortgage Insurance Corporation, unless
the context otherwise requires.</DELETED>
<DELETED> (11) Eligible mortgage.--The term ``eligible
mortgage'' means a mortgage--</DELETED>
<DELETED> (A) that is a residential real estate loan
secured by a property with 1 to 4 single family units
that has been originated in compliance with the
provisions of section 1026 of title 12 of the Code of
Federal Regulations, as promulgated by the Bureau of
Consumer Financial Protection pursuant to section
129C(b) of the Truth in Lending Act (15 U.S.C.
1639c(b)) (commonly referred to as the ``Ability-to-
Repay and Qualified Mortgage Rule'');</DELETED>
<DELETED> (B) has a maximum original principal
obligation amount that does not exceed the conforming
loan limitation determined under section 504;</DELETED>
<DELETED> (C) the outstanding principal balance of
which at the time of purchase of insurance available
under title II--</DELETED>
<DELETED> (i) is less than 80 percent of the
value of the property securing the
mortgage;</DELETED>
<DELETED> (ii) is not less than 80 percent
but not more than 85 percent of the value of
the property securing the mortgage, provided
that not less than 12 percent of the unpaid
principal balance of the mortgage, accounting
for any downpayment required under subparagraph
(D), is insured by--</DELETED>
<DELETED> (I) an approved private
mortgage insurer; or</DELETED>
<DELETED> (II) lender recourse or
other credit enhancement that--
</DELETED>
<DELETED> (aa) meets
standards comparable to the
standards required of private
mortgage insurers under section
211; and</DELETED>
<DELETED> (bb) is approved
by the Corporation;</DELETED>
<DELETED> (iii) is not less than 85 percent
but not more than 90 percent of the value of
the property securing the mortgage, provided
that not less than 25 percent of the unpaid
principal balance of the mortgage, accounting
for any downpayment required under subparagraph
(D), is insured by--</DELETED>
<DELETED> (I) an approved private
mortgage insurer; or</DELETED>
<DELETED> (II) lender recourse or
other credit enhancement that--
</DELETED>
<DELETED> (aa) meets
standards comparable to the
standards required of private
mortgage insurers under section
211; and</DELETED>
<DELETED> (bb) is approved
by the Corporation;
or</DELETED>
<DELETED> (iv) is not less than 90 percent
but not more than 95 percent of the value of
the property securing the mortgage, provided
that not less than 30 percent of the unpaid
principal balance of the mortgage, accounting
for any downpayment required under subparagraph
(D), is insured by--</DELETED>
<DELETED> (I) an approved private
mortgage insurer; or</DELETED>
<DELETED> (II) lender recourse or
other credit enhancement that--
</DELETED>
<DELETED> (aa) meets
standards comparable to the
standards required of private
mortgage insurers under section
211; and</DELETED>
<DELETED> (bb) is approved
by the Corporation;</DELETED>
<DELETED> (D) having a downpayment which shall be
equal to not less than 5 percent of purchase price of
the property securing the mortgage;</DELETED>
<DELETED> (E) that is insured by an approved State
licensed title insurance company;</DELETED>
<DELETED> (F) that contains such terms and
provisions with respect to insurance, property
maintenance, repairs, alterations, payment of taxes,
default, reserves, delinquency charges, foreclosure
proceedings, anticipation of maturity, additional and
secondary liens, and other matters, including matters
that set forth terms and provisions for establishing
escrow accounts, performing financial assessments, or
limiting the amount of any payment made available under
the mortgage as the Corporation may prescribe;
and</DELETED>
<DELETED> (G) that contains such other terms or
characteristics as the Corporation, in consultation
with the Bureau of Consumer Financial Protection, may
determine necessary or appropriate.</DELETED>
<DELETED> (12) Enterprise.--The term ``enterprise'' means--
</DELETED>
<DELETED> (A) the Federal National Mortgage
Association and any affiliate thereof; and</DELETED>
<DELETED> (B) the Federal Home Loan Mortgage
Corporation and any affiliate thereof.</DELETED>
<DELETED> (13) Federal banking agencies.--The term--
</DELETED>
<DELETED> (A) ``Federal banking agency'' means,
individually, the Board of Governors of the Federal
Reserve System, the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation,
the Bureau of Consumer Financial Protection, the
National Credit Union Administration, the Securities
and Exchange Commission, the Commodities Futures
Trading Commission, the Federal Housing Finance Agency,
and the Secretary of the Treasury; and</DELETED>
<DELETED> (B) ``Federal banking agencies'' means all
of the agencies referred to in subparagraph (A),
collectively.</DELETED>
<DELETED> (14) Federal home loan bank.--The term ``Federal
Home Loan Bank'' means a bank established under the authority
of the Federal Home Loan Bank Act (12 U.S.C. 1421 et
seq.).</DELETED>
<DELETED> (15) Federal home loan bank system.--The term
``Federal Home Loan Bank System'' means the Federal Home Loan
Banks and the Office of Finance and any authorized subsidiary
of one or more Federal Home Loan Banks.</DELETED>
<DELETED> (16) FMIC certification date.--The term ``FMIC
certification date'' means the date on which the Board of
Directors certifies that the Corporation is operational and
able to perform the insurance functions for covered securities
as provided in this Act, which date shall be not later than 5
years after the date of enactment of this Act.</DELETED>
<DELETED> (17) Insured depository institution.--The term
``insured depository institution'' means--</DELETED>
<DELETED> (A) an insured depository institution, as
defined under section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813); and</DELETED>
<DELETED> (B) a credit union that meets the
definition of ``depository institution'' as that term
is defined under section 19(b) of the Federal Reserve
Act (12 U.S.C. 461).</DELETED>
<DELETED> (18) Senior preferred stock purchase agreement
defined.--The term ``Senior Preferred Stock Purchase
Agreement'' means--</DELETED>
<DELETED> (A) the Amended and Restated Senior
Preferred Stock Purchase Agreement, dated September 26,
2008, as such Agreement has been amended on May 6,
2009, December 24, 2009, and August 17, 2012,
respectively, and as such Agreement may be further
amended and restated, entered into between the
Department of the Treasury and each enterprise, as
applicable; and</DELETED>
<DELETED> (B) any provision of any certificate in
connection with such Agreement creating or designating
the terms, powers, preferences, privileges,
limitations, or any other conditions of the Variable
Liquidation Preference Senior Preferred Stock of an
enterprise issued or sold pursuant to such
Agreement.</DELETED>
<DELETED> (19) Transfer date.--The term ``transfer date''
means the date that is 1 year after the date of enactment of
this Act.</DELETED>
<DELETED>TITLE I--FEDERAL MORTGAGE INSURANCE CORPORATION</DELETED>
<DELETED>SEC. 101. ESTABLISHMENT.</DELETED>
<DELETED> (a) Establishment.--There is hereby established the
Federal Mortgage Insurance Corporation which shall have the powers
hereinafter granted.</DELETED>
<DELETED> (b) Purpose.--The purpose of the Corporation shall be to--
</DELETED>
<DELETED> (1) provide liquidity, transparency, and access to
mortgage credit by supporting a robust secondary mortgage
market and the production of residential mortgage-backed
securities; and</DELETED>
<DELETED> (2) protect the taxpayer from having to absorb
losses incurred in the secondary mortgage market during periods
of economic stress.</DELETED>
<DELETED> (c) Federal Status.--The Corporation shall be an
independent agency of the Federal Government.</DELETED>
<DELETED> (d) Succession.--The Corporation shall have succession
until dissolved by Act of Congress.</DELETED>
<DELETED> (e) Principal Office.--The Corporation shall maintain its
principal office in the District of Columbia and shall be deemed, for
purposes of venue in civil actions, to be a resident thereof.</DELETED>
<DELETED> (f) Authority To Establish Other Offices.--The Corporation
may establish such other offices in such other place or places as the
Corporation may deem necessary or appropriate in the conduct of its
business.</DELETED>
<DELETED> (g) Prohibition.--The Corporation shall not engage in
mortgage origination.</DELETED>
<DELETED>SEC. 102. DIRECTOR.</DELETED>
<DELETED> (a) Establishment of Position.--There is established the
position of the Director of the Corporation, who shall be the head of
the Corporation.</DELETED>
<DELETED> (b) Appointment; Term.--</DELETED>
<DELETED> (1) Appointment.--The Director shall be appointed
by the President, by and with the advice and consent of the
Senate, from among individuals who--</DELETED>
<DELETED> (A) are citizens of the United States;
and</DELETED>
<DELETED> (B) have a demonstrated technical,
academic, or professional understanding of, and
practical, disciplinary, vocational, or regulatory
experience working in, the mortgage securities markets
and housing finance.</DELETED>
<DELETED> (2) Term.--The Director shall be appointed for a
term of 5 years, unless removed before the end of such term for
cause by the President.</DELETED>
<DELETED> (3) Vacancy.--</DELETED>
<DELETED> (A) In general.--A vacancy in the position
of Director that occurs before the expiration of the
term for which a Director was appointed shall be filled
in the manner established under paragraph (1), and the
Director appointed to fill such vacancy shall be
appointed only for the remainder of such
term.</DELETED>
<DELETED> (B) Acting director.--</DELETED>
<DELETED> (i) Designation by the
president.--</DELETED>
<DELETED> (I) Eligible
individuals.--If the Senate has not
confirmed a Director, the President may
designate either the individual
nominated, but not yet confirmed, for
the position of Director or a member of
the Board of Directors to serve as the
Acting Director, and such Acting
Director shall have all the rights,
duties, powers, and responsibilities of
the Director, until such time as a
Director is confirmed by the
Senate.</DELETED>
<DELETED> (II) Limitation.--No
individual may serve concurrently as
the Acting Director of the Corporation
and the Director of the Federal Housing
Finance Agency.</DELETED>
<DELETED> (4) Service after end of term.--An individual may
serve as the Director after the expiration of the term for
which appointed until a successor has been appointed.</DELETED>
<DELETED> (5) Compensation.--The Director shall be
compensated at the rate prescribed for level II of the
Executive Schedule under section 5313 of title 5, United States
Code.</DELETED>
<DELETED> (6) Rules of construction.--No individual--
</DELETED>
<DELETED> (A) may serve concurrently as the Director
of the Corporation and the Director of the Federal
Housing Finance Agency; and</DELETED>
<DELETED> (B) that has, at any time prior to, on, or
after the date of enactment of this Act, served as the
Director of the Federal Housing Finance Agency may
serve as the Director of the Corporation.</DELETED>
<DELETED> (c) Membership on FSOC.--The Dodd-Frank Wall Street Reform
and Consumer Protection Act is amended--</DELETED>
<DELETED> (1) in section 2, by amending paragraph (12)(E) to
read as follows:</DELETED>
<DELETED> ``(E) the Federal Mortgage Insurance
Corporation, with respect to--</DELETED>
<DELETED> ``(i) the Mortgage Insurance Fund
established under title II of the Housing
Finance Reform and Taxpayer Protection Act of
2013; and</DELETED>
<DELETED> ``(ii) the Federal Home Loan Banks
or the Federal Home Loan Bank System.'';
and</DELETED>
<DELETED> (2) in section 111(b)(1)(H), by striking
``Director of the Federal Housing Finance Agency'' and
inserting ``Chairperson of the Federal Mortgage Insurance
Corporation''.</DELETED>
<DELETED>SEC. 103. BOARD OF DIRECTORS.</DELETED>
<DELETED> (a) Board of Directors.--</DELETED>
<DELETED> (1) Voting members.--The management of the
Corporation shall be vested in a Board of Directors consisting
of 5 voting members--</DELETED>
<DELETED> (A) 1 of whom shall be the Director, who
shall serve as Chairperson of the Board; and</DELETED>
<DELETED> (B) 4 of whom shall be appointed by the
President, by and with the advice and consent of the
Senate, from among individuals who are citizens of the
United States--</DELETED>
<DELETED> (i) 1 of whom shall have
demonstrated technical, academic, or
professional understanding of, and practical,
disciplinary, vocational, or regulatory
experience working in, the field of asset
management;</DELETED>
<DELETED> (ii) 1 of whom shall have
demonstrated technical, academic, or
professional understanding of, and practical,
disciplinary, vocational, or regulatory
experience working in, mortgage insurance
markets;</DELETED>
<DELETED> (iii) 1 of whom shall have a
demonstrated technical, academic, or
professional understanding of, and practical,
disciplinary, vocational, or regulatory
experience working with, lenders having less
than $10,000,000,000 in total assets;
and</DELETED>
<DELETED> (iv) 1 of whom shall have a
demonstrated technical, academic, or
professional understanding of, and practical,
disciplinary, vocational, or regulatory
experience working with, multifamily housing
development.</DELETED>
<DELETED> (2) Non-voting member.--The President shall
appoint the Director of the Federal Housing Finance Agency as
an additional non-voting member of the Board of Directors. The
Director of the Federal Housing Finance Agency shall serve as
non-voting member of the Board of Directors until such time as
that position is abolished pursuant to title III.</DELETED>
<DELETED> (3) Independence.--</DELETED>
<DELETED> (A) In general.--Each voting member of the
Board of Directors shall be independent and neutral and
maintain a fiduciary relationship to the Corporation in
performing his or her duties.</DELETED>
<DELETED> (B) Independence determination.--In order
to be considered independent for purposes of this
paragraph, a voting member of the Board of Directors--
</DELETED>
<DELETED> (i) may not, other than in his or
her capacity as a member of the Board of
Directors or any committee thereof--</DELETED>
<DELETED> (I) accept any consulting,
advisory, or other compensatory fee
from the Corporation; or</DELETED>
<DELETED> (II) be a person
associated with the Corporation or with
any affiliated company thereof;
and</DELETED>
<DELETED> (ii) shall be disqualified from
any deliberation involving any transaction of
the Corporation in which the member has a
financial interest in the outcome of the
transaction.</DELETED>
<DELETED> (4) Rule of construction.--No individual that has,
at any time prior to, on, or after the date of enactment of
this Act, served as the Director or Acting Director of the
Federal Housing Finance Agency may serve as a voting member of
the Board of Directors.</DELETED>
<DELETED> (b) Administration.--Except as otherwise may provided in
this Act, the Board of Directors shall administer the affairs of the
Corporation fairly and impartially and without
discrimination.</DELETED>
<DELETED> (c) Consultation.--The Board of Directors may, in carrying
out any duty, responsibility, requirement, or action authorized under
this Act, consult with the Federal banking agencies or any individual
Federal banking agency, as the Board determines necessary and
appropriate.</DELETED>
<DELETED> (d) Terms.--</DELETED>
<DELETED> (1) Appointed members.--Each appointed voting
member shall be appointed for a term of 5 years and shall serve
on a full-time basis.</DELETED>
<DELETED> (2) Interim appointments.--Any voting member
appointed to fill a vacancy occurring before the expiration of
the term for which such member's predecessor was appointed
shall be appointed only for the remainder of such
term.</DELETED>
<DELETED> (3) Continuation of service.--The Chairperson and
each appointed voting member may continue to serve after the
expiration of the term of office to which such member was
appointed until a successor has been appointed and
qualified.</DELETED>
<DELETED> (e) Vacancy.--A vacancy in the voting membership of the
Board of Directors shall not affect the powers of the Board, and shall
be filled in the manner in which the original appointment was
made.</DELETED>
<DELETED> (f) Voting.--A majority vote of all voting members of the
Board of Directors is necessary to resolve all voting issues of the
Corporation.</DELETED>
<DELETED> (g) Meetings.--The Board of Directors shall meet in
accordance with the bylaws of the Corporation--</DELETED>
<DELETED> (1) at the call of the Chairperson; and</DELETED>
<DELETED> (2) not less frequently than once each
month.</DELETED>
<DELETED> (h) Quorum.--Three voting members of the Board of
Directors then in office shall constitute a quorum.</DELETED>
<DELETED> (i) Bylaws.--A majority of the voting members of the Board
of Directors may amend the bylaws of the Corporation.</DELETED>
<DELETED> (j) Attendance.--Members of the Board of Directors may
attend meetings of the Corporation and vote in person, via telephone
conference, or via video conference.</DELETED>
<DELETED> (k) Ineligibility for Other Offices During Service.--
</DELETED>
<DELETED> (1) In general.--No voting member of the Board of
Directors may during the time such member is in office--
</DELETED>
<DELETED> (A) be an officer or director of any
insured depository institution, depository institution
holding company, Federal Reserve bank, Federal home
loan bank, approved servicer, approved private mortgage
insurer, institution that originates eligible
mortgages, or institution that issues a covered
security; or</DELETED>
<DELETED> (B) hold stock or a controlling interest
in any insured depository institution or depository
institution holding company, approved servicer,
approved private mortgage insurer, institution that
originates eligible mortgages, or institution that
issues a covered security.</DELETED>
<DELETED> (2) Certification.--Upon taking office, each
voting member of the Board of Directors shall certify under
oath that such member has complied with this subsection and
such certification shall be filed with the secretary of the
Board of Directors.</DELETED>
<DELETED> (l) Status of Employees.--</DELETED>
<DELETED> (1) In general.--A director, member, officer, or
employee of the Corporation has no liability under the
Securities Act of 1933 (15 U.S.C. 77a et seq.) with respect to
any claim arising out of or resulting from any act or omission
by such person within the scope of such person's employment in
connection with any transaction involving the Corporation. This
subsection shall not be construed to limit personal liability
for criminal acts or omissions, willful or malicious
misconduct, acts or omissions for private gain, or any other
acts or omissions outside the scope of such person's
employment.</DELETED>
<DELETED> (2) Effect on other law.--</DELETED>
<DELETED> (A) In general.--This subsection does not
affect--</DELETED>
<DELETED> (i) any other immunities and
protections that may be available to such
person under applicable law with respect to
such transactions; or</DELETED>
<DELETED> (ii) any other right or remedy
against the Corporation, against the United
States under applicable law, or against any
person other than a person described in
paragraph (1) participating in such
transactions.</DELETED>
<DELETED> (B) Rule of construction.--This subsection
shall not be construed to limit or alter in any way the
immunities that are available under applicable law for
Federal officials and employees not described in this
subsection.</DELETED>
<DELETED>SEC. 104. OFFICE OF THE INSPECTOR GENERAL.</DELETED>
<DELETED> (a) Office of Inspector General.--</DELETED>
<DELETED> (1) In general.--There is established the Office
of the Inspector General of the Federal Mortgage Insurance
Corporation. The head of the Office of the Inspector General of
the Federal Mortgage Insurance Corporation is the Inspector
General of the Federal Mortgage Insurance Corporation (in this
section referred to as the ``Inspector General''), who shall be
appointed by the President, by and with the advice and consent
of the Senate.</DELETED>
<DELETED> (2) Additional responsibilities.--In addition to
carrying out the requirements established under the Inspector
General Act of 1978 (5 U.S.C. App.), the Inspector General
shall--</DELETED>
<DELETED> (A) conduct, supervise, and coordinate
audits and investigations relating to the programs and
operations of the Corporation--</DELETED>
<DELETED> (i) to ensure that the first loss
position that the Corporation requires of
private market holders of covered securities
insured under this Act is adequate to cover
losses that might be incurred as a result of
adverse economic conditions, wherein such
conditions are generally consistent with the
economic conditions, including national home
price declines, observed in the United States
during moderate to severe recessions
experienced during the last 100 years;
and</DELETED>
<DELETED> (ii) with respect to the--
</DELETED>
<DELETED> (I) oversight and
supervision of the Federal Home Loan
Banks and the Federal Home Loan Bank
System; and</DELETED>
<DELETED> (II) the contracting
practices and procedures of the
Corporation; and</DELETED>
<DELETED> (B) recommend policies for the purpose of
addressing any deficiencies, inefficiencies, gaps, or
failures in the administration of such programs and
operations.</DELETED>
<DELETED> (3) Inspector general report; report of
independent actuary.--Beginning 1 year after the FMIC
certification date, and annually thereafter, the Inspector
General and an independent actuary contracted for by the
Director shall each conduct an examination and issue a separate
report regarding--</DELETED>
<DELETED> (A) the adequacy of insurance fees charged
by the Board of Directors under title II; and</DELETED>
<DELETED> (B) the adequacy of the Mortgage Insurance
Fund established under title II.</DELETED>
<DELETED> (b) Amendments to Inspector General Act of 1978.--Section
11 of the Inspector General Act of 1978 (5 U.S.C. App.) is amended--
</DELETED>
<DELETED> (1) in paragraph (1), by inserting ``Chairperson
of the Federal Mortgage Insurance Corporation;'' after ``the
Director of the Federal Housing Finance Agency;'';
and</DELETED>
<DELETED> (2) in paragraph (2), by inserting ``the Federal
Mortgage Insurance Corporation,'' after ``the Federal Housing
Finance Agency,''.</DELETED>
<DELETED> (c) Compensation.--The annual rate of basic pay of the
Inspector General shall be the annual rate of basic pay provided for
positions at level III of the Executive Schedule under section 5314 of
title 5, United States Code.</DELETED>
<DELETED>SEC. 105. STAFF, EXPERTS, AND CONSULTANTS.</DELETED>
<DELETED> (a) Compensation.--</DELETED>
<DELETED> (1) In general.--The Board of Directors may
appoint and fix the compensation of such officers, attorneys,
economists, examiners, and other employees as may be necessary
for carrying out the functions of the Corporation.</DELETED>
<DELETED> (2) Rates of pay.--Rates of basic pay and the
total amount of compensation and benefits for all employees of
the Corporation may be--</DELETED>
<DELETED> (A) set and adjusted by the Board of
Directors without regard to the provisions of chapter
51 or subchapter III of chapter 53 of title 5, United
States Code; and</DELETED>
<DELETED> (B) reasonably increased, notwithstanding
any limitation set forth in paragraph (3), if the Board
of Directors determines such increases are necessary to
attract and hire qualified employees.</DELETED>
<DELETED> (3) Parity.--The Board of Directors may provide
additional compensation and benefits to employees of the
Corporation, of the same type of compensation or benefits that
are then being provided by any agency referred to under section
1206 of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 1833b) or, if not then being
provided, could be provided by such an agency under applicable
provisions of law, rule, or regulation. In setting and
adjusting the total amount of compensation and benefits for
employees, the Board of Directors shall consult with and seek
to maintain comparability with the agencies referred to under
section 1206 of the Financial Institutions Reform, Recovery,
and Enforcement Act of 1989 (12 U.S.C. 1833b).</DELETED>
<DELETED> (b) Detail of Government Employees.--Upon the request of
the Board of Directors, any Federal Government employee may be detailed
to the Corporation without reimbursement, and such detail shall be
without interruption or loss of civil service status or
privilege.</DELETED>
<DELETED> (c) Experts and Consultants.--The Board of Directors may
procure the services of experts and consultants as the Board considers
necessary or appropriate.</DELETED>
<DELETED> (d) Technical and Professional Advisory Committees.--The
Board of Directors may appoint such special advisory, technical, or
professional committees as may be useful in carrying out the functions
of the Corporation.</DELETED>
<DELETED>SEC. 106. REPORTS; TESTIMONY; AUDITS.</DELETED>
<DELETED> (a) Reports.--</DELETED>
<DELETED> (1) In general.--The Corporation shall submit, on
an annual basis, to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives a written report of
its operations, activities, budget, receipts, and expenditures
for the preceding 12-month period.</DELETED>
<DELETED> (2) Contents of report.--The report required under
subsection (a) shall include an analysis of--</DELETED>
<DELETED> (A) with respect to the Mortgage Insurance
Fund established under section 203--</DELETED>
<DELETED> (i) the current financial
condition of the Mortgage Insurance
Fund;</DELETED>
<DELETED> (ii) the exposure of the Mortgage
Insurance Fund to changes in those economic
factors most likely to affect the condition of
that fund;</DELETED>
<DELETED> (iii) a current estimate of the
resources needed for the Mortgage Insurance
Fund to achieve the purposes of this Act;
and</DELETED>
<DELETED> (iv) any findings, conclusions,
and recommendations for legislative and
administrative actions considered appropriate
to the future activities of the
Corporation;</DELETED>
<DELETED> (B) the secondary mortgage market, the
housing market, and the economy, including through use
of stress tests, and how such analysis was used to
determine and set the reserve ratio for the Mortgage
Insurance Fund for the preceding 12-month
period;</DELETED>
<DELETED> (C) whether or not the actual reserve
ratio of the Mortgage Insurance Fund met--</DELETED>
<DELETED> (i) the reserve ratio set for the
preceding 12-month period; or</DELETED>
<DELETED> (ii) the reserve ratio goals
established in section 203(e);</DELETED>
<DELETED> (D) how the Corporation intends to ensure
that the goals set for the reserve ratio for the
Mortgage Insurance Fund are to be met and maintained
for the next 12-month period, and such analysis shall
include a detailed and descriptive plan of the actions
that the Corporation intends to take pursuant to its
authorities under this Act;</DELETED>
<DELETED> (E) how the Corporation has provided
liquidity, transparency, and access to mortgage credit
in its support of a robust secondary mortgage market
and the production of residential mortgage-backed
securities;</DELETED>
<DELETED> (F) the state of the private label
mortgage-backed securities market, and such analysis
shall include the submission of a reasonable set of
administrative, regulatory, and legislative proposals
on how to limit the Federal Government's footprint in
the secondary mortgage market;</DELETED>
<DELETED> (G) the effect that further decreases in
loan limits would have on the secondary mortgage
market, the housing market, and the economy;
and</DELETED>
<DELETED> (H) the state of the global covered bond
market.</DELETED>
<DELETED> (b) Testimony.--The Chairperson of the Corporation, on a
biannual basis, shall provide testimony to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives.</DELETED>
<DELETED> (c) Audit of Corporation.--</DELETED>
<DELETED> (1) Annual audit.--The Comptroller General of the
United States shall annually audit the financial transactions
of the Corporation in accordance with the United States
generally accepted government auditing standards as may be
prescribed by the Comptroller General.</DELETED>
<DELETED> (2) Place of audit.--The audit required under this
subsection shall be conducted at the place or places where
accounts of the Corporation are normally kept.</DELETED>
<DELETED> (3) Access.--The representatives of the
Comptroller General shall have access to the personnel and to
all books, accounts, documents, papers, records (including
electronic records), reports, files, and all other papers,
automated data, or property belonging to or under the control
of or used or employed by the Corporation pertaining to its
financial transactions and necessary to facilitate the audit
required under this subsection, and such representatives shall
be afforded full facilities for verifying transactions with the
balances or securities held by depositories, fiscal agents, and
custodians.</DELETED>
<DELETED> (4) Possession and custody.--All such books,
accounts, documents, records, reports, files, papers, and
property of the Corporation used to carry out the audit
required under this subsection shall remain in the possession
and custody of the Corporation.</DELETED>
<DELETED> (5) Permissible duplication.--The Comptroller
General may obtain and duplicate any such books, accounts,
documents, records, working papers, automated data and files,
or other information relevant to such audit without cost to the
Comptroller General and the Comptroller General's right of
access to such information shall be enforceable pursuant to
section 716(c) of title 31, United States Code.</DELETED>
<DELETED> (6) Report.--</DELETED>
<DELETED> (A) Submission to congress.--The
Comptroller General shall submit to Congress a report
of each annual audit conducted under this
subsection.</DELETED>
<DELETED> (B) Required content.--The report to
Congress required under subparagraph (A) shall--
</DELETED>
<DELETED> (i) set forth the scope of the
audit; and</DELETED>
<DELETED> (ii) include--</DELETED>
<DELETED> (I) the statement of
assets and liabilities and surplus or
deficit;</DELETED>
<DELETED> (II) the statement of
income and expenses;</DELETED>
<DELETED> (III) the statement of
sources and application of funds;
and</DELETED>
<DELETED> (IV) such comments and
information as the Comptroller General
may deem necessary to inform Congress
of the financial operations and
condition of the Corporation, together
with such recommendations with respect
thereto as the Comptroller General may
deem advisable.</DELETED>
<DELETED> (C) Copies.--A copy of each report
required under subparagraph (A) shall be furnished to
the President and to the Chairperson of the Corporation
at the time such report is submitted to the
Congress.</DELETED>
<DELETED> (7) Assistance and costs.--</DELETED>
<DELETED> (A) Permitted use of outside assistance.--
For the purpose of conducting an audit under this
subsection, the Comptroller General may employ by
contract, without regard to section 3709 of the Revised
Statutes of the United States (41 U.S.C. 5),
professional services of firms and organizations of
certified public accountants for temporary periods or
for special purposes.</DELETED>
<DELETED> (B) Cost of audit covered by
corporation.--</DELETED>
<DELETED> (i) In general.--Upon the request
of the Comptroller General, the Chairperson of
the Corporation shall transfer to the
Comptroller General from funds available, the
amount requested by the Comptroller General to
cover the reasonable costs of any audit and
report conducted by the Comptroller General
pursuant to this subsection.</DELETED>
<DELETED> (ii) Credit of funds.--The
Comptroller General shall credit funds
transferred under clause (i) to the account at
the Treasury established for salaries and
expenses of the Government Accountability
Office, and such amounts shall be available
upon receipt and without fiscal year limitation
to cover the full costs of the audit and
report.</DELETED>
<DELETED>SEC. 107. INITIAL FUNDING.</DELETED>
<DELETED> (a) In General.--Section 1316 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4516)
is amended by adding at the end the following:</DELETED>
<DELETED> ``(i) Annual Assessments Relating to Initial Funding of
the FMIC.--Notwithstanding title V of the Housing Finance Reform and
Taxpayer Protection Act of 2013 or any other provision of law, for the
period beginning on the date of enactment of this subsection and ending
on the FMIC certification date (as that date is set forth under section
2(16) of the Housing Finance Reform and Taxpayer Protection Act of
2013, the Director, in consultation with the Chairperson of the Federal
Mortgage Insurance Corporation, shall establish and collect from the
enterprises annual assessments in addition to those required under
subsection (a) in an amount not exceeding the amount sufficient to
provide for the reasonable costs (including administrative costs) and
expenses of the Corporation. All amounts collected under this
subsection shall be transferred to the Federal Mortgage Insurance
Corporation. The annual assessment shall be payable semiannually for
each fiscal year, on October 1 and April 1.''.</DELETED>
<DELETED> (b) Treatment of Assessments.--</DELETED>
<DELETED> (1) Deposit.--Amounts received by the Corporation
from assessments imposed under section 1316(i) of the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992
shall be deposited by the Corporation in the manner provided in
section 5234 of the Revised Statutes of the United States (12
U.S.C. 192) for monies deposited by the Comptroller of the
Currency.</DELETED>
<DELETED> (2) Not government funds.--The amounts received by
the Corporation from any assessment imposed under section
1316(i) of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 shall not be construed to be Government
or public funds or appropriated money.</DELETED>
<DELETED> (3) No apportionment of funds.--Notwithstanding
any other provision of law, the amounts received by the
Corporation from any assessment imposed under section 1316(i)
of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 shall not be subject to apportionment for
the purpose of chapter 15 of title 31, United States Code, or
under any other authority.</DELETED>
<DELETED> (4) Use of funds.--</DELETED>
<DELETED> (A) In general.--The Corporation may use
any amounts received from assessments imposed under
section 1316(i) of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992--</DELETED>
<DELETED> (i) for compensation of the
employees of the Corporation; and</DELETED>
<DELETED> (ii) for all other expenses of the
Corporation.</DELETED>
<DELETED> (B) Treasury investments.--The Corporation
may request the Secretary of the Treasury to invest
such portions of amounts received from assessments
imposed under section 1316(i) of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992
that, in the discretion of the Corporation, are not
required to meet the current working needs of the
Corporation.</DELETED>
<DELETED> (C) Government obligations.--Pursuant to a
request under subparagraph (B), the Secretary of the
Treasury shall invest such amounts in Government
obligations--</DELETED>
<DELETED> (i) guaranteed as to principal and
interest by the United States with maturities
suitable to the needs of the Corporation;
and</DELETED>
<DELETED> (ii) bearing interest at a rate
determined by the Secretary of the Treasury
taking into consideration current market yields
on outstanding marketable obligations of the
United States of comparable maturity.</DELETED>
<DELETED>TITLE II--DUTIES, RESPONSIBILITIES, AND STRUCTURE OF THE
FMIC</DELETED>
<DELETED>Subtitle A--Duties and Authorities</DELETED>
<DELETED>SEC. 201. DUTIES AND RESPONSIBILITIES OF THE FMIC.</DELETED>
<DELETED> (a) Duties.--The principal duties of the Corporation shall
be to--</DELETED>
<DELETED> (1) carry out this Act in a manner that--
</DELETED>
<DELETED> (A) minimizes any potential long-term
negative cost on the taxpayer; and</DELETED>
<DELETED> (B) ensures, to the maximum extent
possible--</DELETED>
<DELETED> (i) a liquid and resilient housing
finance market; and</DELETED>
<DELETED> (ii) the availability of mortgage
credit;</DELETED>
<DELETED> (2) develop standard form credit risk-sharing
mechanisms, products, structures, contracts, or other security
agreements that require private market holders of a covered
security insured under this Act to assume the first loss
position with respect to losses incurred on such
securities;</DELETED>
<DELETED> (3) provide insurance on any covered security for
which private market holders of such security have assumed the
first loss position with respect to losses that may be incurred
on such security in order to provide a liquid and resilient
housing finance market;</DELETED>
<DELETED> (4) provide leadership to the housing finance
market to help ensure that all geographic locations have access
to mortgage credit;</DELETED>
<DELETED> (5) charge and collect fees in exchange for
providing such insurance, whereby such fees shall be sufficient
to protect the taxpayer from the risk of providing such
insurance and to fund the activities and operations of the
Corporation;</DELETED>
<DELETED> (6) establish and maintain a Mortgage Insurance
Fund;</DELETED>
<DELETED> (7) facilitate securitization of eligible
mortgages originated by credit unions and community and mid-
size banks without securitization capabilities;</DELETED>
<DELETED> (8) ensure discipline and integrity in the market
for covered securities by setting standards for the approval of
private mortgage insurers, servicers, issuers, and bond
guarantors;</DELETED>
<DELETED> (9) establish, operate, and maintain a database
for the collection, public use, and dissemination of uniform
loan level information on eligible mortgages;</DELETED>
<DELETED> (10) develop, adopt, and publish standard uniform
securitization agreements for covered securities;</DELETED>
<DELETED> (11) establish, operate, and maintain an
electronic registry system for eligible mortgages that
collateralize covered securities insured under this
Act;</DELETED>
<DELETED> (12) oversee and supervise the common
securitization platform developed by the business entity
announced by the Federal Housing Finance Agency and established
by the enterprises; and</DELETED>
<DELETED> (13) ensure that credit unions and community and
mid-size banks--</DELETED>
<DELETED> (A) have equal access to any such common
securitization platform and any other securitization
platforms; and</DELETED>
<DELETED> (B) are not, in their access or use of
such platforms, discriminated against through discounts
for volume pricing or other mechanisms.</DELETED>
<DELETED> (b) Scope of Authority.--The authority of the Corporation
shall include the authority to exercise such incidental powers as may
be necessary or appropriate to fulfill the duties and responsibilities
of the Corporation set forth under subsection (a).</DELETED>
<DELETED> (c) Delegation of Authority.--The Board of Directors may
delegate to officers and employees of the Corporation any of the
functions, powers, or duties of the Corporation, as the Board of
Directors determines appropriate.</DELETED>
<DELETED>SEC. 202. STANDARD FORM CREDIT RISK-SHARING MECHANISMS,
PRODUCTS, STRUCTURES, CONTRACTS, OR OTHER SECURITY
AGREEMENTS.</DELETED>
<DELETED> (a) Requirements; Share of Loss; Diversity.--Pursuant to
section 201(a)(2), the Corporation shall develop standard form credit-
risk sharing mechanisms, products, structures, contracts, or other
security agreements which shall require that the first loss position of
private market holders of a covered security insured under this Act--
</DELETED>
<DELETED> (1) is adequate to cover losses that might be
incurred as a result of adverse economic conditions, wherein
such conditions are generally consistent with the economic
conditions, including national home price declines, observed in
the United States during moderate to severe recessions
experienced during the last 100 years; and</DELETED>
<DELETED> (2) is not less than 10 percent of the principal
or face value of the covered security.</DELETED>
<DELETED> (b) Development Window for Risk-Sharing Mechanisms.--
</DELETED>
<DELETED> (1) In general.--The Corporation shall complete
the development and implementation of the mechanisms, products,
structures, contracts, or other security agreements required
under subsection (a) not later than 5 years after the date of
enactment of this Act.</DELETED>
<DELETED> (2) Examination of various mechanisms.--In
developing the mechanisms, products, structures, contracts, or
other security agreements required under subsection (a), the
Corporation shall--</DELETED>
<DELETED> (A) examine proposals that include a
senior-subordinated deal structure, credit-linked
structures, and the use of regulated guarantors with
sufficient equity capital to absorb losses associated
with moderate or severe economic downturns;</DELETED>
<DELETED> (B) consider any risk-sharing mechanisms,
products, structures, contracts, or other security
agreements undertaken by the business entity announced
by the Federal Housing Finance Agency and established
by the enterprises to provide a common securitization
platform for issuers in the secondary mortgage
market;</DELETED>
<DELETED> (C) consider how each proposed mechanism,
product, structure, contract, or other security
agreement--</DELETED>
<DELETED> (i) minimizes any potential long-
term negative cost to the taxpayer;</DELETED>
<DELETED> (ii) impacts the availability of
mortgage credit for--</DELETED>
<DELETED> (I) small financial
institutions, such as credit unions and
community and mid-size banks;
and</DELETED>
<DELETED> (II) consumers;</DELETED>
<DELETED> (iii) influences mortgage
affordability;</DELETED>
<DELETED> (iv) allows for loan modifications
and foreclosure prevention
alternatives;</DELETED>
<DELETED> (v) interacts with the To-Be-
Announced market; and</DELETED>
<DELETED> (vi) facilitates market liquidity
and resiliency; and</DELETED>
<DELETED> (D) ensure that lenders of all sizes and
from all geographic locations, including rural
locations, have equitable access to secondary mortgage
market financing.</DELETED>
<DELETED> (3) Report.--</DELETED>
<DELETED> (A) In general.--Not later than 1 year
after the date of enactment of this Act, and annually
thereafter until the end of the 5-year period provided
in paragraph (1), the Corporation shall 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 that--</DELETED>
<DELETED> (i) details the benefits and
drawbacks of each mechanism, product,
structure, contract, or other security
agreement that the Director considered in
carrying out the requirement of this
section;</DELETED>
<DELETED> (ii) describes the operation and
execution of any mechanisms, products,
structures, contracts, or other security
agreements that the Director determines best
fulfills the requirements of this section;
and</DELETED>
<DELETED> (iii) explains how the Corporation
arrived at the determination made under clause
(ii).</DELETED>
<DELETED> (B) Subsequent reports.--After the
expiration of the 5-year period provided in paragraph
(1) and the submission of the report required under
subparagraph (A), each time the Corporation develops an
additional standard form credit risk-sharing mechanism,
product, structure, contract, or other security
agreement that fulfills the requirements of this
section, the Corporation shall 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 addressing the identical
concerns set forth under clauses (i) through (iii) of
subparagraph (A).</DELETED>
<DELETED>SEC. 203. MORTGAGE INSURANCE FUND.</DELETED>
<DELETED> (a) Establishment.--There is established the Mortgage
Insurance Fund, which the Corporation shall--</DELETED>
<DELETED> (1) maintain and administer; and</DELETED>
<DELETED> (2) use to cover losses incurred on covered
securities insured under this Act, when such losses exceed the
first position losses absorbed by private market holders of
such securities.</DELETED>
<DELETED> (b) Deposits.--The Mortgage Insurance Fund shall be
credited with any--</DELETED>
<DELETED> (1) insurance fee amounts required to be deposited
in the Fund under this section;</DELETED>
<DELETED> (2) guarantee fee amounts collected under section
601; and</DELETED>
<DELETED> (3) amounts earned on investments pursuant to
subsection (h).</DELETED>
<DELETED> (c) Fiduciary Responsibility.--The Corporation has the
responsibility to ensure that the Mortgage Insurance Fund remains
financially sound.</DELETED>
<DELETED> (d) Use.--</DELETED>
<DELETED> (1) In general.--The Mortgage Insurance Fund shall
be solely available to the Corporation for use by the
Corporation to carry out the functions authorized by this Act
and may not be used or otherwise diverted to cover any other
expense of the Federal Government.</DELETED>
<DELETED> (2) Exemption from apportionment.--Notwithstanding
any other provision of law, amounts received by the Mortgage
Insurance Fund pursuant to any fees collected under this
section shall not be subject to apportionment for the purposes
of chapter 15 of title 31, United States Code, or under any
other authority.</DELETED>
<DELETED> (e) Reserve Ratio Goals for Mortgage Insurance Fund.--The
Corporation shall endeavor to ensure that the Mortgage Insurance Fund
attains a reserve balance--</DELETED>
<DELETED> (1) of 1.25 percent of the sum of the outstanding
principal balance of the covered securities for which insurance
is being provided under this title within 5 years of the FMIC
certification date, and to strive to maintain such ratio
thereafter, subject to subparagraph (B); and</DELETED>
<DELETED> (2) of 2.50 percent of the sum of the outstanding
principal balance of the covered securities for which insurance
is being provided under this title within 10 years of the FMIC
certification date, and to strive to maintain such ratio at all
times thereafter.</DELETED>
<DELETED> (f) Maintenance of Reserve Ratio; Establishment of Fees.--
</DELETED>
<DELETED> (1) Establishment of fees.--The Corporation shall
charge and collect a fee, and may in its discretion increase or
decrease such fee, in connection with any insurance provided
under this title to--</DELETED>
<DELETED> (A) achieve and maintain the reserve ratio
goals established under subsection (e);</DELETED>
<DELETED> (B) achieve such reserve ratio goals, if
the actual balance of such reserve is below the goal
amounts established under subsection (e); and</DELETED>
<DELETED> (C) fund the operations of the
Corporation.</DELETED>
<DELETED> (2) Fee considerations.--In exercising the
authority granted under paragraph (1), the Corporation shall
consider--</DELETED>
<DELETED> (A) the expected operating expenses of the
Mortgage Insurance Fund;</DELETED>
<DELETED> (B) the risk of loss to the Mortgage
Insurance Fund in carrying out the requirements under
this Act;</DELETED>
<DELETED> (C) the risk presented by, and the loss
absorption capacity of, the credit enhancement that is
provided on the pool of eligible mortgages
collateralizing the covered security to be insured
under this title;</DELETED>
<DELETED> (D) economic conditions generally
affecting the mortgage markets;</DELETED>
<DELETED> (E) the extent to which the reserve ratio
of the Mortgage Insurance Fund met--</DELETED>
<DELETED> (i) the reserve ratio set for the
preceding 12-month period; or</DELETED>
<DELETED> (ii) the reserve ratio goals
established in subsection (e); and</DELETED>
<DELETED> (F) any other factor that the Corporation
determines appropriate.</DELETED>
<DELETED> (3) Fee uniformity.--The fee required under
paragraph (1)--</DELETED>
<DELETED> (A) shall be set at a uniform amount
applicable to all institutions purchasing insurance
under this title;</DELETED>
<DELETED> (B) may not vary--</DELETED>
<DELETED> (i) by geographic location;
or</DELETED>
<DELETED> (ii) by the size of the
institution to which the fee is charged;
and</DELETED>
<DELETED> (C) may not be based on the volume of
insurance to be purchased by an approved
issuer.</DELETED>
<DELETED> (4) Deposit into mortgage insurance fund.--Any fee
amounts collected under this subsection shall be deposited in
the Mortgage Insurance Fund.</DELETED>
<DELETED> (g) Full Faith and Credit.--The full faith and credit of
the United States is pledged to the payment of all amounts from the
Mortgage Insurance Fund which may be required to be paid under any
insurance provided under this title.</DELETED>
<DELETED> (h) Investments.--Amounts in the Mortgage Insurance Fund
that are not otherwise employed--</DELETED>
<DELETED> (1) shall be invested in obligations of the United
States; and</DELETED>
<DELETED> (2) may not be invested in any covered security
insured under this Act.</DELETED>
<DELETED>SEC. 204. INSURANCE.</DELETED>
<DELETED> (a) Authority.--The Corporation shall, upon application
and in exchange for a fee in accordance with section 203(f), insure the
payment of principal and interest on a covered security with respect to
losses that may be incurred on such security.</DELETED>
<DELETED> (b) Precondition; Ensuring Placement of First Loss
Capital.--The Corporation shall develop standards and processes to
ensure that prior to making any commitment to provide insurance under
this section that private market holders have taken first loss position
in a covered security and that such holders have sufficient capital to
cover their risk-sharing obligations.</DELETED>
<DELETED> (c) Cash Payments; Continued Operations.--In the event of
a payment default on an eligible mortgage that collateralizes a covered
security insured under this section that exceeds the first loss
position assumed by a private market holder or that, in the case of an
approved bond guarantor, if the guarantor has become insolvent, the
Corporation shall--</DELETED>
<DELETED> (1) pay, in cash when due, any shortfalls in
payment of principal and interest under the eligible mortgage;
and</DELETED>
<DELETED> (2) continue to charge and collect any fees for
the provision of insurance (in accordance with section 203(f))
relating to the covered security.</DELETED>
<DELETED> (d) Full Faith and Credit.--The full faith and credit of
the United States is pledged to the payment of all amounts which may be
required to be paid under any insurance provided under this
section.</DELETED>
<DELETED> (e) Prohibition on Federal Assistance.--Notwithstanding
any other provision of law, no Federal funds may be used to purchase or
guarantee obligations of, issue lines of credit to, provide direct or
indirect access to any financing provided by the United States
Government to, or provide direct or indirect grants and aid to any
private market holder of the first loss position on a covered security
which, on or after the date of enactment of this Act, has defaulted on
its obligations, is at risk of defaulting, or is likely to default,
absent such assistance from the United States Government.</DELETED>
<DELETED>SEC. 205. AUTHORITY TO PROTECT TAXPAYERS IN UNUSUAL AND
EXIGENT MARKET CONDITIONS.</DELETED>
<DELETED> (a) In General.--If the Corporation, upon the written
agreement of the Chairman of the Board of Governors of the Federal
Reserve System and the Secretary of the Treasury, and in consultation
with the Secretary of Housing and Urban Development, determines that
unusual and exigent circumstances have created or threatened to create
an anomalous lack of mortgage credit availability within the housing
markets that could materially and severely disrupt the functioning of
the housing finance system of the United States, the Corporation may,
for a period not to exceed 6 months, provide insurance in accord with
section 204 to any covered security regardless of whether such security
has satisfied the requirements of section 202(a).</DELETED>
<DELETED> (b) Considerations.--In exercising the authority granted
under subsection (a), the Corporation shall consider the severity of
the conditions present in the housing markets and the risks presented
to the Mortgage Insurance Fund in exercising such authority.</DELETED>
<DELETED> (c) Limitation.--The authority granted to the Corporation
under subsection (a) may not be exercised more than once in any given
3-year period.</DELETED>
<DELETED>SEC. 206. GENERAL POWERS.</DELETED>
<DELETED> (a) Corporate Powers.--The Federal Mortgage Insurance
Corporation shall have power--</DELETED>
<DELETED> (1) to adopt, alter, and use a corporate seal,
which shall be judicially noticed;</DELETED>
<DELETED> (2) to enter into and perform contracts, leases,
cooperative agreements, or other transactions, on such terms as
it may deem appropriate, with any agency or instrumentality of
the United States, or with any State, Territory, or possession,
or the Commonwealth of Puerto Rico, or with any political
subdivision thereof, or with any person, firm, association, or
corporation;</DELETED>
<DELETED> (3) to execute, in accordance with its bylaws, all
instruments necessary or appropriate in the exercise of any of
its powers;</DELETED>
<DELETED> (4) in its corporate name, to sue and to be sued,
and to complain and to defend, in any court of competent
jurisdiction, State or Federal, but no attachment, injunction,
or other similar process, mesne or final, shall be issued
against the property of the Corporation;</DELETED>
<DELETED> (5) to conduct its business without regard to any
qualification or similar statute in any State of the United
States, including the District of Columbia, the Commonwealth of
Puerto Rico, and the Territories and possessions of the United
States;</DELETED>
<DELETED> (6) to lease, purchase, or acquire any property,
real, personal, or mixed, or any interest therein, to hold,
rent, maintain, modernize, renovate, improve, use, and operate
such property, and to sell, for cash or credit, lease, or
otherwise dispose of the same, at such time and in such manner
as and to the extent that it may deem necessary or
appropriate;</DELETED>
<DELETED> (7) to prescribe, repeal, and amend or modify,
rules, regulations, or requirements governing the manner in
which its general business may be conducted;</DELETED>
<DELETED> (8) to accept gifts or donations of services, or
of property, real, personal, or mixed, tangible, or intangible,
in aid of any of its purposes; and</DELETED>
<DELETED> (9) to do all things as are necessary or
incidental to the proper management of its affairs and the
proper conduct of its business.</DELETED>
<DELETED> (b) Expenditures.--Except as may be otherwise provided in
this title, in chapter 91 of title 31, United States Code, or in other
laws specifically applicable to Government corporations, the
Corporation shall determine the necessity for, and the character and
amount of its obligations and expenditures, and the manner in which
they shall be incurred, allowed, paid, and accounted for.</DELETED>
<DELETED> (c) Exemption From Certain Taxes.--The Corporation,
including its franchise, capital, reserves, surplus, mortgages or other
security holdings, and income shall be exempt from all taxation now or
hereafter imposed by the United States, by any territory, dependency,
or possession thereof, or by any State, county, municipality, or local
taxing authority, except that any real property of the Corporation
shall be subject to State, territorial, county, municipal, or local
taxation to the same extent according to its value as other real
property is taxed.</DELETED>
<DELETED> (d) Exclusive Use of Name.--No individual, association,
partnership, or corporation, except the bodies corporate named under
section 101, shall hereafter use the words ``Federal Mortgage Insurance
Corporation'' or any combination of such words, as the name or a part
thereof under which the individual, association, partnership, or
corporation shall do business. Violations of the foregoing sentence may
be enjoined by any court of general jurisdiction at the suit of the
proper body corporate. In any such suit, the plaintiff may recover any
actual damages flowing from such violation, and, in addition, shall be
entitled to punitive damages (regardless of the existence or
nonexistence of actual damages) of not exceeding $100 for each day
during which such violation is committed or repeated.</DELETED>
<DELETED> (e) Fiscal Agents.--The Federal Reserve banks are
authorized and directed to act as depositories, custodians, and fiscal
agents for each of the bodies corporate named in section 101, for its
own account or as fiduciary, and such banks shall be reimbursed for
such services in such manner as may be agreed upon; and each of such
bodies corporate may itself act in such capacities, for its own account
or as fiduciary, and for the account of others.</DELETED>
<DELETED>SEC. 207. EXEMPTIONS.</DELETED>
<DELETED> (a) Securities Exempt From SEC Regulation.--</DELETED>
<DELETED> (1) In general.--All covered securities insured or
guaranteed by the Corporation shall, to the same extent as
securities that are direct obligations of or obligations
guaranteed as to principal or interest by the United States, be
deemed to be exempt securities within the meaning of the laws
administered by the Securities and Exchange
Commission.</DELETED>
<DELETED> (2) Conforming amendment.--The first sentence of
section 3(a)(2) of the Securities Act of 1933 (15 U.S.C.
77c(a)(2)) is amended by inserting ``or any covered security,
as such term is defined under section 2(9) of the Housing
Finance Reform and Taxpayer Protection Act of 2013;'' after
``Federal Reserve bank;''.</DELETED>
<DELETED> (b) QRM Exemption.--Section 15G(e) of the Securities
Exchange Act of 1934 (15 U.S.C. 78o-11(e)) is amended--</DELETED>
<DELETED> (1) in paragraph (3)(B)--</DELETED>
<DELETED> (A) by striking ``Association, the'' and
inserting ``Association and the''; and</DELETED>
<DELETED> (B) by striking ``and the Federal home
loan banks''; and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(7) Covered securities insured by the federal
mortgage insurance corporation.--Notwithstanding any other
provision of this section, the requirements of this section
shall not apply to any covered security, as such term is
defined under section 2(9) of the Housing Finance Reform and
Taxpayer Protection Act of 2013, insured or guaranteed by the
Federal Mortgage Insurance Corporation or any institution that
is subject to the supervision of the Federal Mortgage Insurance
Corporation.''.</DELETED>
<DELETED>Subtitle B--Oversight of Market Participants</DELETED>
<DELETED>SEC. 211. APPROVAL OF PRIVATE MORTGAGE INSURERS.</DELETED>
<DELETED> (a) Standards for Approval of Private Mortgage Insurers.--
</DELETED>
<DELETED> (1) In general.--The Corporation shall develop,
adopt, and publish standards for the approval by the
Corporation of private mortgage insurers to provide private
mortgage insurance on eligible mortgages.</DELETED>
<DELETED> (2) Required standards.--The standards required
under paragraph (1) shall include--</DELETED>
<DELETED> (A) the financial history and condition of
the insurer;</DELETED>
<DELETED> (B) the adequacy of the insurer's capital
structure, including whether the insurer has sufficient
capital to cover the first loss insurance obligations
it assumes under this Act and that might be incurred in
a period of economic stress, including, but not limited
to, any period of economic stress that would result in
a 30 percent (or greater) national home price
decline;</DELETED>
<DELETED> (C) the general character and fitness of
the management of the insurer, including compliance
history with Federal and State laws;</DELETED>
<DELETED> (D) the risk presented by such insurer to
the Mortgage Insurance Fund;</DELETED>
<DELETED> (E) the adequacy of insurance and fidelity
coverage of the insurer;</DELETED>
<DELETED> (F) a requirement that the insurer submit
audited financial statements to the Director;
and</DELETED>
<DELETED> (G) any other standard the Corporation
determines necessary or appropriate.</DELETED>
<DELETED> (b) Application and Approval.--</DELETED>
<DELETED> (1) Application process.--The Corporation shall
establish an application process, in such form and manner and
requiring such information as the Corporation may require, for
the approval of private mortgage insurers under this
section.</DELETED>
<DELETED> (2) Approval.--The Corporation may approve any
application made pursuant to paragraph (1) provided the private
mortgage insurer meets the standards adopted under subsection
(a).</DELETED>
<DELETED> (3) Publication.--The Corporation shall--
</DELETED>
<DELETED> (A) publish in the Federal Register a list
of newly approved private mortgage insurers;
and</DELETED>
<DELETED> (B) maintain an updated list of approved
private mortgage insurers on the website of the
Corporation.</DELETED>
<DELETED> (c) Review, Suspension, and Revocation of Approved
Status.--</DELETED>
<DELETED> (1) In general.--The Corporation may review the
status of any approved private mortgage insurer if the
Corporation is notified of or becomes aware of any violation by
the insurer of this Act or the rules promulgated pursuant to
this Act.</DELETED>
<DELETED> (2) Suspension or revocation.--</DELETED>
<DELETED> (A) Corporation authority.--If the
Corporation determines, in a review pursuant to
paragraph (1), that an approved private mortgage
insurer no longer meets the standards for approval, the
Corporation may suspend or revoke the approved status
of such insurer.</DELETED>
<DELETED> (B) Rule of construction.--The suspension
or revocation of an approved private mortgage insurer's
approved status under this paragraph shall have no
effect on the status of any covered security.</DELETED>
<DELETED> (3) Publication.--The Corporation shall--
</DELETED>
<DELETED> (A) publish in the Federal Register a list
of any approved private mortgage insurers who lost
their approved status; and</DELETED>
<DELETED> (B) maintain an updated list of such
insurers on the website of the Corporation.</DELETED>
<DELETED> (d) Appeals.--</DELETED>
<DELETED> (1) In general.--</DELETED>
<DELETED> (A) Appeals of denials of application.--A
private mortgage insurer who submits an application
under subsection (b)(1) to become an approved private
mortgage insurer may appeal a decision of the
Corporation denying such application.</DELETED>
<DELETED> (B) Appeals of denials of benefits or
suspensions of participation.--An approved private
mortgage insurer may appeal a decision of the
Corporation suspending or revoking the approved status
of such insurer.</DELETED>
<DELETED> (2) Filing of appeal.--Any insurer who files an
appeal under paragraph (1) shall file the appeal with the
Corporation not later than 90 days after the date on which the
person receives notice of the decision of the Corporation being
appealed.</DELETED>
<DELETED> (3) Final determination.--The Corporation shall
make a final determination with respect to an appeal under
paragraph (1) not later than 180 days after the date on which
the appeal is filed under paragraph (2).</DELETED>
<DELETED> (e) Avoidance of Conflicts of Interest.--With respect to
any eligible mortgage collateralizing a covered security insured under
this Act, an approved private mortgage insurer may not provide
insurance both--</DELETED>
<DELETED> (1) in satisfaction of the credit enhancement
required under section 2(11)(C); and</DELETED>
<DELETED> (2) to cover the first loss position of private
market holders of such covered security.</DELETED>
<DELETED>SEC. 212. APPROVAL OF SERVICERS.</DELETED>
<DELETED> (a) Standards for Approval of Servicers.--</DELETED>
<DELETED> (1) In general.--The Corporation shall develop,
adopt, and publish standards for the approval by the
Corporation of servicers to administer eligible mortgages,
including standards with respect to--</DELETED>
<DELETED> (A) the collection and forwarding of
principal and interest payments;</DELETED>
<DELETED> (B) the maintenance of escrow
accounts;</DELETED>
<DELETED> (C) the collection and payment of taxes
and insurance premiums;</DELETED>
<DELETED> (D) the maintenance of records on eligible
mortgages;</DELETED>
<DELETED> (E) the establishment of foreclosure loss
mitigation programs that seek to enhance investor value
and prevent, to greatest extent possible, the need to
trigger any claim on insurance offered by the
Corporation pursuant to this title;</DELETED>
<DELETED> (F) the advancement of principal and
interest payments to investors in the case of a
delinquency by a borrower until such time as the
borrower has made all payments in arrears or the
property securing the eligible mortgage has been
liquidated; and</DELETED>
<DELETED> (G) implementing the terms of any loss
mitigation and foreclosure prevention as required by a
uniform securitization agreement developed under
section 223.</DELETED>
<DELETED> (2) Additional required standards.--The standards
required under paragraph (1) shall also include--</DELETED>
<DELETED> (A) the financial history and condition of
the servicer;</DELETED>
<DELETED> (B) the general character and fitness of
the management of the servicer, including compliance
history with Federal and State laws;</DELETED>
<DELETED> (C) the risk presented by such servicer to
the Mortgage Insurance Fund;</DELETED>
<DELETED> (D) a requirement that the servicer submit
audited financial statements to the Corporation;
and</DELETED>
<DELETED> (E) any other standard the Corporation
determines necessary or appropriate.</DELETED>
<DELETED> (3) Coordination with other regulators.--In
developing the standards required under paragraph (1), the
Corporation shall--</DELETED>
<DELETED> (A) coordinate with the Bureau of Consumer
Financial Protection; and</DELETED>
<DELETED> (B) to the extent the Corporation
determines practical and appropriate, shall coordinate
with the other Federal banking agencies.</DELETED>
<DELETED> (b) Application and Approval.--</DELETED>
<DELETED> (1) Application process.--The Corporation shall
establish an application process--</DELETED>
<DELETED> (A) in such form and manner and requiring
such information as the Corporation may require, for
the approval of servicers under this section;
and</DELETED>
<DELETED> (B) that does not discriminate against or
otherwise disadvantage small servicers.</DELETED>
<DELETED> (2) Approval.--The Corporation may approve any
application made pursuant to paragraph (1) provided the
servicer meets the standards adopted under subsection
(a).</DELETED>
<DELETED> (3) Publication.--The Corporation shall--
</DELETED>
<DELETED> (A) publish in the Federal Register a list
of newly approved servicers; and</DELETED>
<DELETED> (B) maintain an updated list of approved
servicers on the website of the Corporation.</DELETED>
<DELETED> (c) Review, Suspension, and Revocation of Approved
Status.--</DELETED>
<DELETED> (1) In general.--The Corporation may review the
status of any approved servicer if the Corporation is notified
of or becomes aware of any violation by the servicer of this
Act or the rules promulgated pursuant to this Act, including
any failure by an approved servicer to comply with terms set
forth in any uniform securitization agreement developed under
section 223.</DELETED>
<DELETED> (2) Suspension or revocation.--</DELETED>
<DELETED> (A) Corporation authority.--If the
Corporation determines, in a review pursuant to
paragraph (1), that an approved servicer no longer
meets the standards for approval, the Corporation may
suspend or revoke the approved status of such
servicer.</DELETED>
<DELETED> (B) Rule of construction.--The suspension
or revocation of an approved servicer's approved status
under this paragraph shall have no effect on the status
of any covered security.</DELETED>
<DELETED> (3) Publication.--The Corporation shall--
</DELETED>
<DELETED> (A) publish in the Federal Register a list
of any approved servicers who lost their approved
status; and</DELETED>
<DELETED> (B) maintain an updated list of such
servicers on the website of the Corporation.</DELETED>
<DELETED> (d) Appeals.--</DELETED>
<DELETED> (1) In general.--</DELETED>
<DELETED> (A) Appeals of denials of application.--A
servicer who submits an application under subsection
(b)(1) to become an approved servicer may appeal a
decision of the Corporation denying such
application.</DELETED>
<DELETED> (B) Appeals of denials of benefits or
suspensions of participation.--An approved servicer may
appeal a decision of the Corporation suspending or
revoking the approved status of such
servicer.</DELETED>
<DELETED> (2) Filing of appeal.--Any servicer who files an
appeal under paragraph (1) shall file the appeal with the
Corporation not later than 90 days after the date on which the
person receives notice of the decision of the Corporation being
appealed.</DELETED>
<DELETED> (3) Final determination.--The Corporation shall
make a final determination with respect to an appeal under
paragraph (1) not later than 180 days after the date on which
the appeal is filed under paragraph (2).</DELETED>
<DELETED> (e) Petitions for Change of Servicer by Private Market
Holders.--The Corporation shall develop a process by which private
market holders of the first loss position in a covered security may
petition the Corporation for a change in approved servicers if the
private market holders can demonstrate that their current approved
servicer has failed to appropriately protect their investment,
including by failing to meet any standard identified under subsection
(a)(1).</DELETED>
<DELETED>SEC. 213. APPROVAL OF ISSUERS.</DELETED>
<DELETED> (a) Standards for Approval of Issuers.--</DELETED>
<DELETED> (1) In general.--The Corporation shall develop,
adopt, and publish standards for the approval by the
Corporation of issuers to issue covered securities, including
standards with respect to an issuer's ability to--</DELETED>
<DELETED> (A) aggregate eligible mortgage loans into
pools;</DELETED>
<DELETED> (B) securitize eligible mortgage loans for
sale to private investors as a covered
security;</DELETED>
<DELETED> (C) transfer investment risk and credit to
private market participants in accordance with the
risk-sharing mechanisms developed by the Corporation
under section 202;</DELETED>
<DELETED> (D) ensure equitable access to the
secondary mortgage market for covered securities for
all institutions regardless of size or geographic
location;</DELETED>
<DELETED> (E) create mechanisms for multi-lender
pools; and</DELETED>
<DELETED> (F) ensure that eligible mortgage loans
that collateralize a covered security insured under
this title are originated in compliance with the
requirements of this Act.</DELETED>
<DELETED> (2) Additional required standards.--The standards
required under paragraph (1) shall also include--</DELETED>
<DELETED> (A) the financial history and condition of
the issuer;</DELETED>
<DELETED> (B) the adequacy of the capital structure
of the issuer;</DELETED>
<DELETED> (C) the general character and fitness of
the management of the issuer, including compliance
history with Federal and State laws;</DELETED>
<DELETED> (D) the risk presented by such issuer to
the Mortgage Insurance Fund;</DELETED>
<DELETED> (E) the adequacy of insurance and fidelity
coverage of the issuer;</DELETED>
<DELETED> (F) a requirement that the issuer submit
audited financial statements to the
Corporation;</DELETED>
<DELETED> (G) the capacity of the issuer to secure
first loss credit enhancement; and</DELETED>
<DELETED> (H) any other standard the Corporation
determines necessary or appropriate.</DELETED>
<DELETED> (b) Application and Approval.--</DELETED>
<DELETED> (1) Application process.--</DELETED>
<DELETED> (A) In general.--The Corporation shall
establish an application process, in such form and
manner and requiring such information as the
Corporation may require, for the approval of issuers
under this section.</DELETED>
<DELETED> (B) Application process for insured
depository institutions.--If an insured depository
institution seeks to become an approved issuer under
this section, such institution may only submit its
application via a separately capitalized affiliate or
subsidiary.</DELETED>
<DELETED> (2) Approval.--The Corporation--</DELETED>
<DELETED> (A) may approve--</DELETED>
<DELETED> (i) any application made pursuant
to paragraph (1) provided the issuer meets the
standards adopted under subsection (a);
and</DELETED>
<DELETED> (ii) any application to become an
approved issuer made by the Federal Home Loan
Bank System; and</DELETED>
<DELETED> (B) shall ensure that at least one issuer
approved to issue covered securities under this section
is dedicated to serving the securitization needs of
credit unions and community and mid-size banks without
securitization capabilities.</DELETED>
<DELETED> (3) Publication.--The Corporation shall--
</DELETED>
<DELETED> (A) publish in the Federal Register a list
of newly approved issuers; and</DELETED>
<DELETED> (B) maintain an updated list of approved
issuers on the website of the Corporation.</DELETED>
<DELETED> (c) Federal Home Loan Bank System.--</DELETED>
<DELETED> (1) In general.--If the Federal Home Loan Bank
System is approved by the Corporation to become an approved
issuer under this section, the Corporation shall--</DELETED>
<DELETED> (A) develop a process by which each
individual Federal Home Loan Bank may elect not to
engage or otherwise contribute to any activity
practiced by the Federal Home Loan Bank System as an
approved issuer;</DELETED>
<DELETED> (B) ensure that, notwithstanding section
11 of the Federal Home Loan Bank Act (12 U.S.C. 1431),
any covered securities issued by the Federal Home Loan
Bank System as an approved issuer are not issued as
consolidated Federal Home Loan Bank debentures and are
explicitly designated or otherwise treated as not being
the joint and several obligations of any individual
Federal Home Loan Bank that has made an election under
subparagraph (A); and</DELETED>
<DELETED> (C) ensure that in establishing the
capital standards set forth under subsection (a)(2)(B)
with respect to the Federal Home Loan Bank System, that
such standards shall--</DELETED>
<DELETED> (i) not be applicable to any
individual Federal Home Loan Bank that has made
an election under subparagraph (A);</DELETED>
<DELETED> (ii) be based on the volume of
eligible mortgage loan originations made by the
Federal Home Loan Banks that have not made an
election under subparagraph (A); and</DELETED>
<DELETED> (iii) not adversely impact the
traditional liquidity and advance business of
the Federal Home Loan Banks or the Federal Home
Loan Bank System.</DELETED>
<DELETED> (2) Federal home loan bank act.--</DELETED>
<DELETED> (A) Amendment.--Section 12 of the Federal
Home Loan Bank Act (12 U.S.C. 1432) is amended by
adding at the end the following:</DELETED>
<DELETED> ``(c) Subject to such regulations as may be prescribed by
the Corporation, one or more Federal Home Loan Banks may establish a
subsidiary. Any subsidiary established under this subsection shall be
subject to supervision by the Office of Federal Home Loan Bank
Supervision of the Corporation and shall be restricted to engaging in
activities related to being an approved issuer, as that term is defined
under section 2(2) of the Housing Finance Reform and Taxpayer
Protection Act of 2013.''.</DELETED>
<DELETED> (B) Effective date.--The amendment made by
subparagraph (A) shall take effect on the transfer
date.</DELETED>
<DELETED> (d) Review, Suspension, and Revocation of Approved
Status.--</DELETED>
<DELETED> (1) In general.--The Corporation may review the
status of any approved issuer if the Corporation is notified of
or becomes aware of any violation by the issuer of this Act or
the rules promulgated pursuant to this Act.</DELETED>
<DELETED> (2) Suspension or revocation.--</DELETED>
<DELETED> (A) Corporation authority.--If the
Corporation determines, in a review pursuant to
paragraph (1), that an approved issuer no longer meets
the standards for approval, the Corporation may suspend
or revoke the approved status of such issuer.</DELETED>
<DELETED> (B) Rule of construction.--The suspension
or revocation of an approved issuer's approved status
under this paragraph shall have no effect on the status
of any covered security.</DELETED>
<DELETED> (3) Publication.--The Corporation shall--
</DELETED>
<DELETED> (A) publish in the Federal Register a list
of any approved issuers who lost their approved status;
and</DELETED>
<DELETED> (B) maintain an updated list of such
issuers on the website of the Corporation.</DELETED>
<DELETED> (e) Appeals.--</DELETED>
<DELETED> (1) In general.--</DELETED>
<DELETED> (A) Appeals of denials of application.--An
issuer who submits an application under subsection
(b)(1) to become an approved issuer may appeal a
decision of the Corporation denying such
application.</DELETED>
<DELETED> (B) Appeals of denials of benefits or
suspensions of participation.--An approved issuer may
appeal a decision of the Corporation suspending or
revoking the approved status of such issuer.</DELETED>
<DELETED> (2) Filing of appeal.--Any issuer who files an
appeal under paragraph (1) shall file the appeal with the
Corporation not later than 90 days after the date on which the
person receives notice of the decision of the Corporation being
appealed.</DELETED>
<DELETED> (3) Final determination.--The Corporation shall
make a final determination with respect to an appeal under
paragraph (1) not later than 180 days after the date on which
the appeal is filed under paragraph (2).</DELETED>
<DELETED> (f) Limitation on Market Share.--</DELETED>
<DELETED> (1) In general.--The Corporation may not enter
into any contract, covenant, or other agreement with an
approved issuer, if such contract, covenant, or agreement would
provide the issuer a share of the covered security issuer
market in excess of 15 percent of the total market, as such
market is measured by the total outstanding principal balance
at origination of eligible mortgages collateralizing covered
securities issued in the previous 12-month period.</DELETED>
<DELETED> (2) Exception.--The limitation set forth under
paragraph (1) shall not apply to--</DELETED>
<DELETED> (A) an approved issuer described under
subsection (b)(2)(A)(ii);</DELETED>
<DELETED> (B) the FMIC Mutual Securitization
Company;</DELETED>
<DELETED> (C) any approved issuer which securitizes
only eligible mortgage loans originated by the issuer
or an affiliate of the issuer; or</DELETED>
<DELETED> (D) any approved issuer to which the
Corporation grants a waiver pursuant to paragraph
(3).</DELETED>
<DELETED> (3) Waiver.--The Corporation may, during the 3-
year period beginning on the FMIC certification date, grant a
waiver from the limitation set forth under paragraph (1) to an
approved issuer if the Corporation determines that the number
of approved issuers is insufficient, such that imposition of
the limitation would adversely affect the availability of
mortgage credit.</DELETED>
<DELETED> (g) Limited Authority To Hold Eligible Mortgage Loans.--An
approved issuer may, for a period not to exceed 6-months, hold--
</DELETED>
<DELETED> (1) eligible mortgage loans on the balance sheet
of such issuer; and</DELETED>
<DELETED> (2) the first loss position in a covered security
for purposes of obtaining insurance under this title.</DELETED>
<DELETED>SEC. 214. APPROVAL OF BOND GUARANTORS.</DELETED>
<DELETED> (a) Standards for Approval of Bond Guarantors.--</DELETED>
<DELETED> (1) In general.--The Corporation shall develop,
adopt, and publish standards for the approval by the
Corporation of bond guarantors to guarantee the timely payment
of principal and interest on securities collateralized by
eligible mortgages and insured by the Corporation.</DELETED>
<DELETED> (2) Required standards.--The standards required
under paragraph (1) shall include--</DELETED>
<DELETED> (A) the financial history and condition of
the guarantor;</DELETED>
<DELETED> (B) that the guarantor maintain a minimum
capital level equal to not less than 10 percent of the
unpaid principal balance of outstanding mortgage-backed
securities for which the guarantor is providing
insurance, net of any transactions, including
derivative transactions, repurchase agreements, reverse
repurchase agreements, securities lending transactions,
or securities borrowing transactions, that in the
determination of the Corporation are used by the
guarantor to hedge or mitigate against credit risk,
provided that any such hedging transaction does not
diminish the total amount of loss absorption capital in
the secondary mortgage market that stands in front of
the insurance provided by the Corporation under this
title;</DELETED>
<DELETED> (C) the general character and fitness of
the management of the guarantor, including compliance
history with Federal and State laws;</DELETED>
<DELETED> (D) the risk presented by such guarantor
to the Mortgage Insurance Fund;</DELETED>
<DELETED> (E) the adequacy of insurance and fidelity
coverage of the guarantor;</DELETED>
<DELETED> (F) a requirement that the guarantor
submit audited financial statements to the
Director;</DELETED>
<DELETED> (G) a requirement that the guarantor meet
a minimum tangible common equity level, or other
minimum capital threshold as the Corporation determines
necessary; and</DELETED>
<DELETED> (H) any other standard the Corporation
determines necessary or appropriate.</DELETED>
<DELETED> (b) Rule of Construction.--Any covered security issued by
an approved issuer and insured by an approved bond guarantor shall be
deemed to have satisfied the credit-risk sharing requirements under
section 202(a)(1) with respect to the eligibility of that security to
obtain insurance under this title.</DELETED>
<DELETED> (c) Application and Approval.--</DELETED>
<DELETED> (1) Application process.--</DELETED>
<DELETED> (A) In general.--The Corporation shall
establish an application process, in such form and
manner and requiring such information as the
Corporation may require, for the approval of bond
guarantors under this section.</DELETED>
<DELETED> (B) Application process by insured
depository institutions.--If an insured depository
institution seeks to become an approved bond guarantor
under this section, such institution may only submit
its application via a separately capitalized affiliate
or subsidiary.</DELETED>
<DELETED> (2) Approval.--The Corporation may approve any
application made pursuant to paragraph (1) provided the bond
guarantor meets the standards adopted under subsection
(a).</DELETED>
<DELETED> (3) Publication.--The Corporation shall--
</DELETED>
<DELETED> (A) publish in the Federal Register a list
of newly approved bond guarantors; and</DELETED>
<DELETED> (B) maintain an updated list of approved
bond guarantors on the website of the
Corporation.</DELETED>
<DELETED> (d) Review, Suspension, and Revocation of Approved
Status.--</DELETED>
<DELETED> (1) In general.--The Corporation may review the
status of any approved bond guarantor if the Corporation is
notified of or becomes aware of any violation by the insurer of
this Act or the rules promulgated pursuant to this
Act.</DELETED>
<DELETED> (2) Suspension or revocation.--</DELETED>
<DELETED> (A) Corporation authority.--If the
Corporation determines, in a review pursuant to
paragraph (1), that an approved bond guarantor no
longer meets the standards for approval, the
Corporation shall revoke the approved status of such
guarantor.</DELETED>
<DELETED> (B) Rule of construction.--The revocation
of an approved bond guarantor's approved status under
this paragraph shall have no effect on the status of
any covered security.</DELETED>
<DELETED> (3) Publication.--The Corporation shall--
</DELETED>
<DELETED> (A) publish in the Federal Register a list
of any approved bond guarantors who lost their approved
status; and</DELETED>
<DELETED> (B) maintain an updated list of such
guarantors on the website of the Corporation.</DELETED>
<DELETED> (e) Appeals.--</DELETED>
<DELETED> (1) In general.--</DELETED>
<DELETED> (A) Appeals of denials of application.--A
bond guarantor who submits an application under
subsection (c)(1) to become an approved bond guarantor
may appeal a decision of the Corporation denying such
application.</DELETED>
<DELETED> (B) Appeals of denials of benefits or
suspensions of participation.--An approved bond
guarantor may appeal a decision of the Corporation
suspending or revoking the approved status of such
guarantor.</DELETED>
<DELETED> (2) Filing of appeal.--Any bond guarantor who
files an appeal under paragraph (1) shall file the appeal with
the Corporation not later than 90 days after the date on which
the person receives notice of the decision of the Corporation
being appealed.</DELETED>
<DELETED> (3) Final determination.--The Corporation shall
make a final determination with respect to an appeal under
paragraph (1) not later than 180 days after the date on which
the appeal is filed under paragraph (2).</DELETED>
<DELETED> (f) Limitations on Approved Bond Guarantors.--With respect
to any eligible mortgage collateralizing a covered security insured
under this Act, an approved bond guarantor may not provide insurance--
</DELETED>
<DELETED> (1) in satisfaction of the credit enhancement
required under section 2(11)(C) or as an approved private
mortgage insurer pursuant to section 211; and</DELETED>
<DELETED> (2) as an approved bond guarantor under this
section.</DELETED>
<DELETED> (g) Permission To Carry Out Other Activities.--Nothing in
this Act prohibits an approved bond guarantor from being or controlling
an approved issuer, provided that each issuer and bond guarantor,
independent of each other, meet the approval standards established by
the Corporation under this title.</DELETED>
<DELETED>SEC. 215. AUTHORITY TO ESTABLISH FMIC MUTUAL SECURITIZATION
COMPANY.</DELETED>
<DELETED> (a) In General.--The Corporation shall establish a mutual
corporation to be known as the ``FMIC Mutual Securitization
Company''.</DELETED>
<DELETED> (b) Purpose.--The purpose of the FMIC Mutual
Securitization Company is to--</DELETED>
<DELETED> (1) develop, securitize, sell, and otherwise meet
the issuing needs of credit unions, community and mid-size
banks, and non-depository mortgage originators with respect to
covered securities; and</DELETED>
<DELETED> (2) purchase from its member participants for
cash, on a single loan basis, eligible mortgage loans to
securitize in a covered security.</DELETED>
<DELETED> (c) Sale of Necessary Technology.--Upon the FMIC
certification date, the enterprises shall sell to the FMIC Mutual
Securitization Company any function, activity, infrastructure,
property, including intellectual property, platform, or any other
object or service of an enterprise that the Corporation determines
necessary for the FMIC Mutual Securitization Company to carry out its
activities and operations.</DELETED>
<DELETED> (d) Designation as an Approved Issuer.--The FMIC Mutual
Securitization Company shall be an approved issuer for purposes of
section 213.</DELETED>
<DELETED> (e) Eligibility.--Eligibility to participate as a member
in the FMIC Mutual Securitization Company shall be limited to--
</DELETED>
<DELETED> (1) insured depository institutions having less
than $15,000,000,000 in total consolidated assets at the time
of the institution's initial participation in the Company;
or</DELETED>
<DELETED> (2) any non-depository mortgage originator having
a minimum net worth of $2,500,000.</DELETED>
<DELETED> (f) Governance.--</DELETED>
<DELETED> (1) Recognition of important role of smaller
institutions.--The Corporation shall take all necessary steps
to ensure that the governance provisions of the FMIC Mutual
Securitization Company reflect the important role in the
mortgage market played by the small and mid-sized member
participants of the FMIC Mutual Securitization
Company.</DELETED>
<DELETED> (2) Establishment of position of director.--There
is established the position of the Director of the FMIC Mutual
Securitization Company who shall be the head of the
Company.</DELETED>
<DELETED> (3) Board of directors.--</DELETED>
<DELETED> (A) In general.--The management of the
FMIC Mutual Securitization Company shall be vested in a
Board of Directors (hereafter referred to as the
``Mutual Board''), which shall include representatives
of member participants of the Company, including
representatives of--</DELETED>
<DELETED> (i) mortgage bankers;</DELETED>
<DELETED> (ii) community banks;
and</DELETED>
<DELETED> (iii) credit unions.</DELETED>
<DELETED> (B) Initial appointment.--The Corporation
shall make initial appointments of the members of the
Mutual Board. Each such initial appointment shall be
for a term 1 year.</DELETED>
<DELETED> (C) Appointments.--Following the initial
1-year appointment of the members of the Mutual Board,
member participants in the FMIC Mutual Securitization
Company shall elect the members of the Mutual Board
from within the membership of the Company.</DELETED>
<DELETED> (D) Administration.--The Mutual Board
shall administer the affairs of the FMIC Mutual
Securitization Company fairly and impartially and
without discrimination.</DELETED>
<DELETED> (4) No preferences for size.--Member participants
of the FMIC Mutual Securitization Company shall have equal
voting rights on any matters before the Company, regardless of
the size of the individual member participant.</DELETED>
<DELETED> (g) Approval of Member Participants.--</DELETED>
<DELETED> (1) In general.--The Mutual Board shall develop
standards and procedures to approve the application of member
participants in the FMIC Mutual Securitization
Company.</DELETED>
<DELETED> (2) Content of standards.--The standards required
under paragraph (1) shall include standards relating to the
safety and soundness of prospective member participants,
including standards regarding the underwriting practices of
such prospective members.</DELETED>
<DELETED> (3) Coordination with other regulators.--
</DELETED>
<DELETED> (A) Consultation.--In approving any
prospective member to become a member participant in
the FMIC Mutual Securitization Company, the Mutual
Board may consult and share information with the
primary prudential regulator of the prospective
member.</DELETED>
<DELETED> (B) Privilege preserved.--Information
shared pursuant to subparagraph (A) shall not be
construed as waiving, destroying, or otherwise
affecting any privilege or confidential status that a
prospective member may claim with respect to such
information under Federal or State law as to any person
or entity other than the Mutual Board or its primary
prudential regulator.</DELETED>
<DELETED> (C) Rule of construction.--No provision of
this subsection may be construed as implying or
establishing that--</DELETED>
<DELETED> (i) any prospective member waives
any privilege applicable to information that is
shared or transferred under any circumstance to
which this subsection does not apply;
or</DELETED>
<DELETED> (ii) any prospective would waive
any privilege applicable to any information by
submitting the information directly to its
primary prudential regulator, but for this
subsection.</DELETED>
<DELETED> (h) Funding Authority.--</DELETED>
<DELETED> (1) Authority to establish membership fees.--The
Mutual Board shall have the authority to charge and collect
fees, and may in its discretion increase or decrease such fee,
on its member participants for membership in the FMIC Mutual
Securitization Company, including to cover the costs of--
</DELETED>
<DELETED> (A) the initial capitalization of the
Company;</DELETED>
<DELETED> (B) the purchase of any function,
activity, infrastructure, property, including
intellectual property, platform, or any other object or
service from an enterprise pursuant to subsection (c);
and</DELETED>
<DELETED> (C) the continued operation of the
Company.</DELETED>
<DELETED> (2) Limitation.--The fees authorized under
paragraph (1)--</DELETED>
<DELETED> (A) shall be equitably assessed;
and</DELETED>
<DELETED> (B) may be based on the volume of eligible
mortgages that the member participant sells to the FMIC
Mutual Securitization Company.</DELETED>
<DELETED> (i) Coordination of Servicer Approval.--The Mutual Board
may coordinate with the Corporation to facilitate the application
process for its member participants to become approved servicers of the
Corporation pursuant to section 212.</DELETED>
<DELETED>SEC. 216. ADDITIONAL AUTHORITY RELATING TO OVERSIGHT OF MARKET
PARTICIPANTS.</DELETED>
<DELETED> In carrying out its authorities under this subtitle, the
Corporation may, in its discretion, develop, publish, and adopt such
other additional standards or requirements as the Corporation
determines necessary to ensure--</DELETED>
<DELETED> (1) competition among approved private mortgage
insurers, servicers, issuers, and bond guarantors and other
market participants in the secondary mortgage market;</DELETED>
<DELETED> (2) competitive pricing among approved private
mortgage insurers, servicers, issuers, and bond guarantors and
other market participants in the secondary mortgage market;
and</DELETED>
<DELETED> (3) liquidity, transparency, and access to
mortgage credit in the secondary mortgage market.</DELETED>
<DELETED>SEC. 217. CIVIL MONEY PENALTIES.</DELETED>
<DELETED> (a) Authority.--In addition to any suspension or
revocation of the approved status of an approved private mortgage
insurer, servicer, issuer, or bond guarantor under this subtitle, the
Corporation may, in its discretion, impose a civil money penalty on any
such approved private mortgage insurer, servicer, issuer, or bond
guarantor that has failed to comply with or otherwise violates--
</DELETED>
<DELETED> (1) any standard adopted by the Corporation
pursuant to this subtitle; or</DELETED>
<DELETED> (2) any other requirement or provision of this
Act, or any order, condition, rule, or regulation issued
pursuant to this Act, applicable to such private mortgage
insurer, servicer, issuer, or bond guarantor, as the case may
be.</DELETED>
<DELETED> (b) Procedures.--</DELETED>
<DELETED> (1) Establishment.--The Corporation shall
establish standards and procedures governing the imposition of
civil money penalties under this section. Such standards and
procedures--</DELETED>
<DELETED> (A) shall provide for the Corporation to
notify the approved private mortgage insurer, servicer,
issuer, or bond guarantor, as the case may be, in
writing of the determination of the Corporation to
impose the penalty, which shall be made on the
record;</DELETED>
<DELETED> (B) shall provide for the imposition of a
penalty only after the approved private mortgage
insurer, servicer, issuer, or bond guarantor, as the
case may be, has been given an opportunity for a
hearing on the record; and</DELETED>
<DELETED> (C) may provide for review by the
Corporation of any determination or order, or
interlocutory ruling, arising from a hearing.</DELETED>
<DELETED> (2) Factors determining amount of penalty.--In
determining the amount of a penalty under this section, the
Corporation shall give consideration to factors including--
</DELETED>
<DELETED> (A) the gravity of the offense;</DELETED>
<DELETED> (B) any history of prior
offenses;</DELETED>
<DELETED> (C) ability to pay the penalty;</DELETED>
<DELETED> (D) injury to the public;</DELETED>
<DELETED> (E) benefits received;</DELETED>
<DELETED> (F) deterrence of future violations;
and</DELETED>
<DELETED> (G) such other factors as the Corporation
may determine, by regulation, to be
appropriate.</DELETED>
<DELETED> (c) Action To Collect Penalty.--If the approved private
mortgage insurer, servicer, issuer, or bond guarantor, as the case may
be, fails to comply with an order by the Corporation imposing a civil
money penalty under this section, the Corporation may bring an action
in the United States District Court for the District of Columbia to
obtain a monetary judgment against the approved private mortgage
insurer, servicer, issuer, or bond guarantor, as the case may be, and
such other relief as may be available. The monetary judgment may, in
the court's discretion, include the attorneys' fees and other expenses
incurred by the United States in connection with the action. In an
action under this subsection, the validity and appropriateness of the
order imposing the penalty shall not be subject to review.</DELETED>
<DELETED> (d) Settlements.--The Corporation may compromise, modify,
or remit any civil money penalty which may be, or has been, imposed
under this section.</DELETED>
<DELETED> (e) Deposit of Penalties.--The Corporation shall use any
civil money penalties collected under this section to help fund the
Mortgage Insurance Fund established under section 203.</DELETED>
<DELETED>SEC. 218. PROTECTION OF PRIVILEGE AND OTHER MATTERS RELATING
TO DISCLOSURES BY MARKET PARTICIPANTS.</DELETED>
<DELETED> (a) Information Sharing and Maintenance of Privilege.--The
Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended--
</DELETED>
<DELETED> (1) in section 11(t)(2)(A) (12 U.S.C.
1821(t)(2)(A)), by inserting after clause (v) the
following:</DELETED>
<DELETED> ``(vii) The Federal Mortgage
Insurance Corporation.''; and</DELETED>
<DELETED> (2) in section 18(x) (12 U.S.C. 1828(x))--
</DELETED>
<DELETED> (A) by inserting ``the Federal Mortgage
Insurance Corporation,'' before ``any Federal banking
agency'' each place that term appears; and</DELETED>
<DELETED> (B) by striking ``such agency'' each place
that term appears and inserting ``Corporation,
agency''.</DELETED>
<DELETED> (b) Permissible Consultation With Federal Banking
Agencies.--</DELETED>
<DELETED> (1) In general.--Pursuant to its authority under
section 103(c), to facilitate the consultive process, the
Corporation may share information with the Federal banking
agencies, or any individual Federal banking agency, or any
State bank supervisor, or foreign banking authority, on a one-
time, regular, or periodic basis as determined by the
Corporation regarding the capital, asset and liabilities,
financial condition, risk management practices or any other
practice of any approved private mortgage insurer, servicer,
issuer, or bond guarantor.</DELETED>
<DELETED> (2) Privilege preserved.--Information shared by
the Corporation pursuant to paragraph (1) shall not be
construed as waiving, destroying, or otherwise affecting any
privilege or confidential status that any approved private
mortgage insurer, servicer, issuer, or bond guarantor or any
other person may claim with respect to such information under
Federal or State law as to any person or entity other than such
agencies, agency, supervisor, or authority.</DELETED>
<DELETED> (3) Rule of construction.--No provision of this
subsection may be construed as implying or establishing that--
</DELETED>
<DELETED> (A) any person waives any privilege
applicable to information that is shared or transferred
under any circumstance to which this subsection does
not apply; or</DELETED>
<DELETED> (B) any person would waive any privilege
applicable to any information by submitting the
information directly to the Federal banking agencies,
or any individual Federal banking agency, or any State
bank supervisor, or foreign banking authority, but for
this subsection.</DELETED>
<DELETED>Subtitle C--Transparency in Market Operations</DELETED>
<DELETED>SEC. 221. REVIEW OF LOAN DOCUMENTS; DISCLOSURES.</DELETED>
<DELETED> (a) In General.--The Corporation shall, by rule--
</DELETED>
<DELETED> (1) require that approved issuers--</DELETED>
<DELETED> (A) grant access to private market
investors seeking to take the first loss position in a
covered security to all--</DELETED>
<DELETED> (i) documents relating to eligible
mortgage loans collateralizing that covered
security; and</DELETED>
<DELETED> (ii) servicing reports of the
approved servicer relating to such mortgages;
and</DELETED>
<DELETED> (B) disclose any other material
information that a reasonable investor would want to
know, and make no material omission of such
information, relating to eligible mortgage loans
collateralizing a covered security; and</DELETED>
<DELETED> (2) establish the timing, frequency, and manner in
which such access and disclosures are made.</DELETED>
<DELETED> (b) Privacy Protections.--In prescribing the rules
required under this section, the Corporation shall take into
consideration issues of consumer privacy and all statutes, rules, and
regulations related to privacy of consumer credit information and
personally identifiable information. Such rules shall expressly
prohibit the identification of specific borrowers.</DELETED>
<DELETED>SEC. 222. INVESTOR IMMUNITY.</DELETED>
<DELETED> Any private market investor that has taken the first loss
position in a covered security or that has otherwise invested in any
covered security insured under this Act shall have immunity and
protection from civil liability under Federal and State law, and no
cause of action may be brought under Federal or State law against such
investor, with respect to whether or not eligible mortgages that
collateralize a covered security insured under this Act have complied
with the requirements of this Act, including, but not limited to, with
respect to any underwriting requirements applicable to such mortgage,
any representations or warranties made by an approved issuer or an
approved bond guarantor with respect to such mortgages, or whether or
not the terms of any uniform securitization agreement have been
met.</DELETED>
<DELETED>SEC. 223. UNIFORM SECURITIZATION AGREEMENTS.</DELETED>
<DELETED> (a) In General.--The Corporation shall develop, adopt, and
publish standard uniform securitization agreements for covered
securities which are insured under this Act.</DELETED>
<DELETED> (b) Required Content.--The standard uniform securitization
agreements required to be developed under subsection (a) shall include
terms relating to--</DELETED>
<DELETED> (1) pooling and servicing, including the
development of uniform standards and practices--</DELETED>
<DELETED> (A) regarding remittance schedules and
payment delays; and</DELETED>
<DELETED> (B) permitting the transfer of servicing
rights, if such transfer is determined to be in the
best financial interest of the investor, as such
interest is calculated on a net present value
basis;</DELETED>
<DELETED> (2) representations and warranties, including
representations and warranties as to compliance or conformity
with the requirements of this Act;</DELETED>
<DELETED> (3) indemnification and remedies, including for
the restitution or indemnification of the Corporation with
respect to early term delinquencies of eligible mortgages
collateralizing a covered security;</DELETED>
<DELETED> (4) the qualification, responsibilities, and
duties of trustees; and</DELETED>
<DELETED> (5) any other terms or standards the Corporation
determines necessary or appropriate.</DELETED>
<DELETED> (c) Defining Representation and Warranty Violations.--In
developing the uniform securitization agreements required under
subsection (a), the Corporation shall also develop, adopt, and publish
clear and uniform standards that define and illustrate what actions, or
omissions to act, comprise a violation of the representations and
warranties clauses that are made a part of such agreements.</DELETED>
<DELETED> (d) Consultation.--The Corporation shall work with
industry groups, including servicers, originators, issuers, and
mortgage investors to develop the uniform securitization agreements
required under subsection (a).</DELETED>
<DELETED>SEC. 224. UNIFORM MORTGAGE DATABASE.</DELETED>
<DELETED> (a) Uniform Mortgage Database.--The Corporation shall
establish, operate, and maintain a database for the collection, public
use, and dissemination of uniform loan level information on eligible
mortgages relating to--</DELETED>
<DELETED> (1) loan characteristics;</DELETED>
<DELETED> (2) borrower information;</DELETED>
<DELETED> (3) the property securing the eligible
mortgages;</DELETED>
<DELETED> (4) loan data required at the time of application
for insurance from the Corporation under this title;</DELETED>
<DELETED> (5) the quality and consistency of appraisal and
collateral data on eligible mortgages;</DELETED>
<DELETED> (6) industry-wide servicing data standards;
and</DELETED>
<DELETED> (7) such other data, datasets, information, facts,
or measurements as the Corporation determines appropriate to
improve and enhance loan quality and operational efficiencies
within the secondary mortgage market.</DELETED>
<DELETED> (b) Considerations.--In establishing the database required
under subsection (a), the Corporation shall take into consideration,
build upon, and adopt to the extent the Corporation determines
appropriate, the existing data standards set forth under the Uniform
Mortgage Data Program initiative established by the Federal Housing
Finance Agency.</DELETED>
<DELETED> (c) Regulations.--The Corporation shall, by regulation--
</DELETED>
<DELETED> (1) establish the manner and form by which any
loan level information collected under subsection (a) may be
accessed by the public, including whether or not to establish a
fee for such access;</DELETED>
<DELETED> (2) require that such loan level information be
made available to the public in a uniform manner, in a form
designed for ease and speed of access, ease and speed of
downloading, and ease and speed of use; and</DELETED>
<DELETED> (3) ensure the protection of any personally
identifiable information contained in any information, or mix
of information, collected and made available for public
access.</DELETED>
<DELETED> (d) Monthly Update.--The database required under
subsection (a) shall be updated not less frequently than once a
month.</DELETED>
<DELETED>SEC. 225. ELECTRONIC REGISTRATION OF ELIGIBLE
MORTGAGES.</DELETED>
<DELETED> (a) Establishment of Electronic Registration System.--The
Corporation shall establish, operate, and maintain an electronic
registry system for eligible mortgages that collateralize a covered
security insured under this Act in order to automate, centralize,
standardize, and improve the process of tracking changes in servicing
rights and beneficial ownership interests in such eligible
mortgages.</DELETED>
<DELETED> (b) Considerations.--In establishing the electronic
registry system required under subsection (a), the Corporation shall
take into consideration, build upon, and adopt to the extent the
Corporation determines appropriate, any existing efforts of the Federal
Housing Finance Agency or expertise among the private sector to develop
a sound, efficient system for document custody and electronic
registration of mortgages, notes, titles, and liens.</DELETED>
<DELETED>Subtitle D--FMIC Structure</DELETED>
<DELETED>SEC. 231. OFFICE OF UNDERWRITING.</DELETED>
<DELETED> (a) Establishment.--There is established within the
Federal Mortgage Insurance Corporation an Office of Underwriting which
shall be headed by the Deputy Director of Underwriting, who shall be
appointed by the Board of Directors.</DELETED>
<DELETED> (b) Responsibilities.--The Office of Underwriting shall
ensure, through oversight, analysis, and examination, that eligible
mortgages that collateralize a covered security insured under this Act
comply with the requirements of this Act, including with respect to--
</DELETED>
<DELETED> (1) the submission of complete and accurate loan
data on eligible mortgages;</DELETED>
<DELETED> (2) the identification of ineligible mortgage
loans;</DELETED>
<DELETED> (3) assisting lenders with originating high-
quality, lower-risk eligible mortgages; and</DELETED>
<DELETED> (4) any other activity that the Director
determines appropriate.</DELETED>
<DELETED>SEC. 232. OFFICE OF SECURITIZATION.</DELETED>
<DELETED> (a) Establishment.--There is established within the
Federal Mortgage Insurance Corporation an Office of Securitization
which shall be headed by the Deputy Director of Securitization, who
shall be appointed by the Board of Directors.</DELETED>
<DELETED> (b) Responsibilities.--</DELETED>
<DELETED> (1) In general.--The Office of Securitization
shall--</DELETED>
<DELETED> (A) oversee and supervise the common
securitization platform developed by the business
entity announced by the Federal Housing Finance Agency
and established by the enterprises, including by
requiring that the platform have system capabilities to
permit the issuance of multi-lender covered
securities;</DELETED>
<DELETED> (B) ensure that credit unions, community
and mid-size banks, and small non-depository lenders
have equitable access to any such platform, including
through the development and facilitation of options for
multi-lender pools of eligible mortgages to be
securitized and issued as covered securities through
such platform; and</DELETED>
<DELETED> (C) coordinate and consult with the
Federal Home Loan Bank System to establish a
securitization platform that addresses the needs of its
members.</DELETED>
<DELETED> (2) Rules for use of common securitization
platform.--</DELETED>
<DELETED> (A) In general.--The Corporation, acting
through the Office of Securitization, may promulgate
rules--</DELETED>
<DELETED> (i) regarding the use of the
common securitization platform described under
paragraph (1)(A); and</DELETED>
<DELETED> (ii) to permit securities other
than covered securities to be issued through
such platform for reasonable
compensation.</DELETED>
<DELETED> (B) Content of rules.--Any rule that may
be promulgated under subparagraph (A) may include a
requirement that any security to be issued through the
common securitization platform be subject to a uniform
securitization agreement developed under section
223.</DELETED>
<DELETED> (c) Establishment of Database To Provide Notice to
Different Classes of Lien Holders.--The Office of Securitization shall
establish, operate, and maintain a database that--</DELETED>
<DELETED> (1) can be accessed by any holder of a lien on an
eligible mortgage;</DELETED>
<DELETED> (2) identifies and tracks if a junior lien or any
other subordinate lien has been issued on the property securing
an eligible mortgage;</DELETED>
<DELETED> (3) notifies, to the extent feasible, any senior
or first lien holder of the existence of such junior or
subordinate lien; and</DELETED>
<DELETED> (4) informs--</DELETED>
<DELETED> (A) the senior or first lien holder of the
monthly performance of the junior or subordinate lien;
and</DELETED>
<DELETED> (B) the junior or subordinate lien holder
of the monthly performance of the senior or first
lien.</DELETED>
<DELETED>SEC. 233. OFFICE OF FEDERAL HOME LOAN BANK
SUPERVISION.</DELETED>
<DELETED> (a) Establishment.--There is established within the
Federal Mortgage Insurance Corporation an Office of Federal Home Loan
Bank Supervision which shall be headed by the Deputy Director of
Federal Home Loan Bank Supervision, who shall be appointed by the Board
of Directors.</DELETED>
<DELETED> (b) Responsibilities.--The Office of Federal Home Loan
Bank Supervision shall--</DELETED>
<DELETED> (1) oversee, coordinate, and supervise the Federal
Home Loan Banks and the Federal Home Loan Bank System,
including the transition of all activities transferred to the
Corporation pursuant to section 301; and</DELETED>
<DELETED> (2) supervise any authorized subsidiary of one or
more Federal Home Loan Banks that is approved as an approved
issuer pursuant to section 213(b)(2)(A)(ii), including with
respect to the initial capitalization of any such
subsidiary.</DELETED>
<DELETED>TITLE III--TRANSFER OF POWERS, PERSONNEL, AND PROPERTY TO FMIC
FROM FHFA</DELETED>
<DELETED>SEC. 301. POWERS AND DUTIES TRANSFERRED.</DELETED>
<DELETED> (a) Federal Home Loan Bank Functions Transferred.--
</DELETED>
<DELETED> (1) Transfer of functions.--There are transferred
to the Corporation all functions of the Federal Housing Finance
Agency and the Director of the Federal Housing Finance Agency
relating to--</DELETED>
<DELETED> (A) the supervision of the Federal Home
Loan Banks and the Federal Home Loan Bank System;
and</DELETED>
<DELETED> (B) all rulemaking authority of the
Federal Housing Finance Agency and the Director of the
Federal Housing Finance Agency relating to the Federal
Home Loan Banks and the Federal Home Loan Bank
System.</DELETED>
<DELETED> (2) Powers, authorities, rights, and duties.--The
Corporation shall succeed to all powers, authorities, rights,
and duties that were vested in the Federal Housing Finance
Agency and the Director of the Federal Housing Finance Agency,
including all conservatorship or receivership authorities, on
the day before the transfer date in connection with the
functions and authorities transferred under paragraph
(1).</DELETED>
<DELETED> (3) Effective date.--The transfer of functions
under this paragraph shall take effect on the transfer
date.</DELETED>
<DELETED> (b) Continuation and Coordination of Certain Actions.--
</DELETED>
<DELETED> (1) In general.--All regulations, orders,
determinations, and resolutions described under paragraph (2)
shall remain in effect according to the terms of such
regulations, orders, determinations, and resolutions, and shall
be enforceable by or against the Corporation until modified,
terminated, set aside, or superseded in accordance with
applicable law by the Corporation, any court of competent
jurisdiction, or operation of law.</DELETED>
<DELETED> (2) Applicability.--A regulation, order,
determination, or resolution is described under this subsection
if it--</DELETED>
<DELETED> (A) was issued, made, prescribed, or
allowed to become effective by--</DELETED>
<DELETED> (i) the Federal Housing Finance
Agency; or</DELETED>
<DELETED> (ii) a court of competent
jurisdiction, and relates to functions
transferred by this Act;</DELETED>
<DELETED> (B) relates to the performance of
functions that are transferred by this section;
and</DELETED>
<DELETED> (C) is in effect on the transfer
date.</DELETED>
<DELETED> (c) Disposition of Affairs.--During the period preceding
the transfer date, the Director of the Federal Housing Finance Agency,
for the purpose of winding up the affairs of the Federal Housing
Finance Agency in connection with the performance of functions that are
transferred by this section--</DELETED>
<DELETED> (1) shall manage the employees of such Agency and
provide for the payment of the compensation and benefits of any
such employees which accrue before the transfer date;
and</DELETED>
<DELETED> (2) may take any other action necessary for the
purpose of winding up the affairs of the Office.</DELETED>
<DELETED> (d) Use of Property and Services.--</DELETED>
<DELETED> (1) Property.--The Corporation may use the
property and services of the Federal Housing Finance Agency to
perform functions which have been transferred to the
Corporation until such time as the Agency is abolished under
section 303 to facilitate the orderly transfer of functions
transferred under this section, any other provision of this
Act, or any amendment made by this Act to any other provision
of law.</DELETED>
<DELETED> (2) Agency services.--Any agency, department, or
other instrumentality of the United States, and any successor
to any such agency, department, or instrumentality, that was
providing supporting services to the Agency before the transfer
date in connection with functions that are transferred to the
Corporation shall--</DELETED>
<DELETED> (A) continue to provide such services, on
a reimbursable basis, until the transfer of such
functions is complete; and</DELETED>
<DELETED> (B) consult with any such agency to
coordinate and facilitate a prompt and reasonable
transition.</DELETED>
<DELETED> (e) Continuation of Services.--The Corporation may use the
services of employees and other personnel of the Federal Housing
Finance Agency, on a reimbursable basis, to perform functions which
have been transferred to the Corporation for such time as is reasonable
to facilitate the orderly transfer of functions pursuant to this
section, any other provision of this Act, or any amendment made by this
Act to any other provision of law.</DELETED>
<DELETED> (f) Savings Provisions.--</DELETED>
<DELETED> (1) Existing rights, duties, and obligations not
affected.--Subsection (a) and section 303 shall not affect the
validity of any right, duty, or obligation of the United
States, the Director of the Federal Housing Finance Agency, the
Federal Housing Finance Agency, or any other person, that
existed on the day before transfer date.</DELETED>
<DELETED> (2) Continuation of suits.--No action or other
proceeding commenced by or against the Director of the Federal
Housing Finance Agency in connection with the functions that
are transferred to the Corporation under this section shall
abate by reason of the enactment of this Act, except that the
Corporation shall be substituted for the Director of the
Federal Housing Finance Agency as a party to any such action or
proceeding.</DELETED>
<DELETED> (g) Conforming Amendments.--</DELETED>
<DELETED> (1) Federal home loan bank act.--The Federal Home
Loan Bank Act (12 U.S.C. 1421 et seq.) is amended--</DELETED>
<DELETED> (A) by striking ``the Director'' and
inserting ``the Corporation'' each place that term
appears;</DELETED>
<DELETED> (B) by striking ``The Director'' and
inserting ``The Corporation'' each place that term
appears;</DELETED>
<DELETED> (C) by striking ``Chairman of the Director
of Governors'' and inserting ``Chairman of the Board of
Governors'' each place that term appears;</DELETED>
<DELETED> (D) by striking ``the Agency'' and
inserting ``the Corporation'' each place that term
appears;</DELETED>
<DELETED> (E) in section 2, by striking paragraphs
(11) and (12) and inserting the following:</DELETED>
<DELETED> ``(11) Corporation.--The term `Corporation' means
the Federal Mortgage Insurance Corporation established under
title I of the Housing Finance Reform and Taxpayer Protection
Act of 2013.''; and</DELETED>
<DELETED> (F) in section 11(l)(5), in the header to
such paragraph, by striking ``of the
director''.</DELETED>
<DELETED> (2) Federal housing enterprises financial safety
and soundness act.--Section 1316 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4516) is amended--</DELETED>
<DELETED> (A) in subsection (a)--</DELETED>
<DELETED> (i) in the matter preceding
paragraph (1), by striking ``the regulated
entities'' and inserting ``each enterprise'';
and</DELETED>
<DELETED> (ii) in paragraph (1), by striking
``and under section 20 of the Federal Home Loan
Bank Act'';</DELETED>
<DELETED> (B) in subsection (b), by striking
paragraph (2);</DELETED>
<DELETED> (C) in subsection (c)--</DELETED>
<DELETED> (i) by striking ``any regulated
entity'' and inserting ``any
enterprise'';</DELETED>
<DELETED> (ii) by striking ``the regulated
entity'' and inserting ``the
enterprise'';</DELETED>
<DELETED> (iii) by striking ``a regulated
entity'' and inserting ``an enterprise'' each
place that term appears;</DELETED>
<DELETED> (iv) by striking ``such regulated
entity'' and inserting ``such enterprise'' each
place that term appears; and</DELETED>
<DELETED> (v) by striking ``such entity''
and inserting ``such enterprise'';
and</DELETED>
<DELETED> (D) in subsection (e)--</DELETED>
<DELETED> (i) by striking ``each regulated
entity'' and inserting ``each enterprise'';
and</DELETED>
<DELETED> (ii) by striking ``such regulated
entity'' and inserting ``such
enterprise''.</DELETED>
<DELETED> (3) Right to financial privacy act of 1978.--
Section 1113(o) of the Right to Financial Privacy Act of 1978
(12 U.S.C. 3413(o)) is amended--</DELETED>
<DELETED> (A) in the heading to the subsection, by
``Federal Housing Finance Agency'' and inserting
``Federal Mortgage Insurance Corporation'';</DELETED>
<DELETED> (B) by striking ``Federal Housing Finance
Agency'' and inserting ``Federal Mortgage Insurance
Corporation''; and</DELETED>
<DELETED> (C) by striking ``Federal Housing Finance
Agency's'' and inserting ``Federal Mortgage Insurance
Corporation's''.</DELETED>
<DELETED> (4) Effective date.--The amendments made by this
subsection shall take effect on the transfer date.</DELETED>
<DELETED>SEC. 302. TRANSFER AND RIGHTS OF EMPLOYEES OF THE
FHFA.</DELETED>
<DELETED> (a) Transfer.--Each employee of the Federal Housing
Finance Agency that is employed in connection with functions that are
transferred to the Corporation under section 301 shall be transferred
to the Corporation for employment, not later than the transfer date,
and such transfer shall be deemed a transfer of function for purposes
of section 3503 of title 5, United States Code.</DELETED>
<DELETED> (b) Status of Employees.--The transfer of functions under
this title, and the abolishment of the Federal Housing Finance Agency
under section 303, may not be construed to affect the status of any
transferred employee as an employee of an agency of the United States
for purposes of any other provision of law.</DELETED>
<DELETED> (c) Guaranteed Positions.--Each employee transferred under
subsection (a) shall be guaranteed a position with the same status,
tenure, grade, and pay as that held on the day immediately preceding
the transfer.</DELETED>
<DELETED> (d) Appointment Authority for Excepted Employees.--
</DELETED>
<DELETED> (1) In general.--In the case of an employee
occupying a position in the excepted service, any appointment
authority established under law or by regulations of the Office
of Personnel Management for filling such position shall be
transferred, subject to paragraph (2).</DELETED>
<DELETED> (2) Decline of transfer.--The Corporation may
decline a transfer of authority under paragraph (1), to the
extent that such authority relates to a position excepted from
the competitive service because of its confidential,
policymaking, policy-determining, or policy-advocating
character.</DELETED>
<DELETED> (e) Reorganization.--If the Corporation determines, after
the end of the 1-year period beginning on the transfer date, that a
reorganization of the combined workforce is required, that
reorganization shall be deemed a major reorganization for purposes of
affording affected employee retirement under section 8336(d)(2) or
8414(b)(1)(B) of title 5, United States Code.</DELETED>
<DELETED> (f) Employee Benefit Programs.--</DELETED>
<DELETED> (1) In general.--Any employee of the Federal
Housing Finance Agency accepting employment with the
Corporation as a result of a transfer under subsection (a) may
retain, for 12 months after the date on which such transfer
occurs, membership in any employee benefit program of the
Agency or the Corporation, as applicable, including insurance,
to which such employee belongs on the transfer date if--
</DELETED>
<DELETED> (A) the employee does not elect to give up
the benefit or membership in the program; and</DELETED>
<DELETED> (B) the benefit or program is continued by
the Corporation.</DELETED>
<DELETED> (2) Cost differential.--</DELETED>
<DELETED> (A) In general.--The difference in the
costs between the benefits which would have been
provided by the Federal Housing Finance Agency and
those provided by this section shall be paid by the
Corporation.</DELETED>
<DELETED> (B) Health insurance.--If any employee
elects to give up membership in a health insurance
program or the health insurance program is not
continued by the Corporation, the employee shall be
permitted to select an alternate Federal health
insurance program not later than 30 days after the date
of such election or notice, without regard to any other
regularly scheduled open season.</DELETED>
<DELETED>SEC. 303. ABOLISHMENT OF FHFA.</DELETED>
<DELETED> Effective upon the FMIC certification date, the Federal
Housing Finance Agency and the position of the Director of the Federal
Housing Finance Agency are abolished.</DELETED>
<DELETED>SEC. 304. TRANSFER OF PROPERTY AND FACILITIES.</DELETED>
<DELETED> Effective upon the FMIC certification date all property of
the Federal Housing Finance Agency shall transfer to the
Corporation.</DELETED>
<DELETED>SEC. 305. TECHNICAL AND CONFORMING AMENDMENTS.</DELETED>
<DELETED> (a) Effective Date.--The amendments made by this section
shall take effect on the date of enactment of this Act.</DELETED>
<DELETED> (b) References in Federal Law.--On and after the date of
enactment of this Act, any reference in Federal law to the Director of
the Federal Housing Finance Agency or the Federal Housing Finance
Agency, in connection with any function of the Director of the Federal
Housing Finance Agency or the Federal Housing Finance Agency
transferred under section 301, shall be deemed a reference to the
Chairperson of the Federal Mortgage Insurance Corporation or the
Federal Mortgage Insurance Corporation, as appropriate and consistent
with the amendments made by this Act.</DELETED>
<DELETED> (c) Title 18, United States Code.--Title 18, United States
Code, is amended--</DELETED>
<DELETED> (1) in section 1905, by inserting ``or the Federal
Mortgage Insurance Corporation'' after ``Federal Housing
Finance Agency'';</DELETED>
<DELETED> (2) in section 212(c)(2)--</DELETED>
<DELETED> (A) in subparagraph (F), by striking ``;
and'' and inserting a semicolon;</DELETED>
<DELETED> (B) in subparagraph (G), by striking the
period at the end and inserting ``; and'';
and</DELETED>
<DELETED> (C) by adding at the end the
following:</DELETED>
<DELETED> ``(H) the Federal Mortgage Insurance
Corporation.'';</DELETED>
<DELETED> (3) in section 657, by inserting ``the Federal
Mortgage Insurance Corporation,'' after ``Federal Housing
Finance Agency,'';</DELETED>
<DELETED> (4) in section 1006, by inserting ``the Federal
Mortgage Insurance Corporation,'' after ``Federal Housing
Finance Agency,''; and</DELETED>
<DELETED> (5) in section 1014, by inserting ``the Federal
Mortgage Insurance Corporation,'' after ``Federal Housing
Finance Agency,''.</DELETED>
<DELETED> (d) Flood Disaster Protection Act of 1973.--Section
102(b)(5) of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a(b)(5)) is amended in subsection (b)(5), by inserting ``the
Federal Mortgage Insurance Corporation,'' after ``Federal Housing
Finance Agency,''.</DELETED>
<DELETED> (e) Title 5, United States Code.--Title 5, United States
Code, is amended--</DELETED>
<DELETED> (1) in section 5313, by inserting the following
new item after the item relating to the Director of the Federal
Housing Finance Agency:</DELETED>
<DELETED> ``Director of the Federal Mortgage Insurance
Corporation.''; and</DELETED>
<DELETED> (2) in section 3132(a)(1)(D), by inserting ``the
Federal Mortgage Insurance Corporation,'' after ``Federal
Housing Finance Agency,''.</DELETED>
<DELETED> (f) Sarbanes-Oxley Act.--Section 105(b)(5)(B)(ii)(II) of
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(B)(ii)(II)) is
amended by inserting ``or the Chairperson of the Federal Mortgage
Insurance Corporation'' after ``Director of the Federal Housing Finance
Agency''.</DELETED>
<DELETED> (g) Federal Deposit Insurance Act.--The Federal Deposit
Insurance Act (12 U.S.C. 1811 et seq.) is amended--</DELETED>
<DELETED> (1) in section 7(a)(2)(A), by inserting ``the
Federal Mortgage Insurance Corporation,'' after ``Federal
Housing Finance Agency,'' each place that term
appears;</DELETED>
<DELETED> (2) in section 8(e)(7)(A)(vi), by inserting ``,
the Federal Mortgage Insurance Corporation,'' after ``Federal
Housing Finance Agency'';</DELETED>
<DELETED> (3) in section 11(t)(2)(A), by adding at the end
the following:</DELETED>
<DELETED> ``(viii) The Federal Mortgage
Insurance Corporation.''; and</DELETED>
<DELETED> (4) in section 33(e), by inserting ``, the Federal
Mortgage Insurance Corporation,'' after ``Federal Housing
Finance Agency''.</DELETED>
<DELETED> (h) Riegle Community Development and Regulatory
Improvement Act of 1994.--Section 117(e) of the Riegle Community
Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4716(e))
is amended by inserting ``the Federal Mortgage Insurance Corporation,''
after ``Federal Housing Finance Agency,''.</DELETED>
<DELETED> (i) MAHRA Act of 1997.--Section 517(b)(4) of the
Multifamily Assisted Housing Reform and Affordability Act of 1997 (42
U.S.C. 1437f note) is amended by inserting ``the Federal Mortgage
Insurance Corporation,'' after ``Federal Housing Finance
Agency,''.</DELETED>
<DELETED> (j) Title 44, United States Code.--Section 3502(5) of
title 44, United States Code, is amended by inserting ``the Federal
Mortgage Insurance Corporation,'' after ``Federal Housing Finance
Agency,''.</DELETED>
<DELETED> (k) Access to Local TV Act of 2000.--Section
1004(d)(2)(D)(iii) of the Launching Our Communities' Access to Local
Television Act of 2000 (47 U.S.C. 1103(d)(2)(D)(iii)) is amended by
inserting ``or the Federal Mortgage Insurance Corporation,'' after
``Federal Housing Finance Agency''.</DELETED>
<DELETED> (l) FIRREA.--The Financial Institutions Reform, Recovery,
and Enhancement Act of 1989 is amended--</DELETED>
<DELETED> (1) in section 1216--</DELETED>
<DELETED> (A) in subsection (a)--</DELETED>
<DELETED> (i) in paragraph (2), by striking
``; and'' and inserting a semicolon;</DELETED>
<DELETED> (ii) in paragraph (3), by striking
the period and inserting ``; and'';
and</DELETED>
<DELETED> (iii) by adding at the end the
following:</DELETED>
<DELETED> ``(4) the Federal Mortgage Insurance
Corporation.''; and</DELETED>
<DELETED> (B) in subsection (c), by inserting ``the
Federal Mortgage Insurance Corporation,'' before ``and
the Federal Housing Finance Agency,'';</DELETED>
<DELETED> (2) in section 402(e), by striking ``Federal
Housing Finance Agency'' each place that term appears and
inserting ``Federal Mortgage Insurance Corporation'';</DELETED>
<DELETED> (3) in section 1124, by inserting ``the Federal
Mortgage Insurance Corporation,'' after ``Federal Housing
Finance Agency,'' each place that term appears; and</DELETED>
<DELETED> (4) in section 1125(b), by inserting ``the Federal
Mortgage Insurance Corporation,'' after ``Federal Housing
Finance Agency,''.</DELETED>
<DELETED> (m) EESA.--The Emergency Economic Stabilization Act of
2008 (12 U.S.C. 5201 note) is amended--</DELETED>
<DELETED> (1) in section 104(b)--</DELETED>
<DELETED> (A) in paragraph (4), by striking ``;
and'' and inserting a semicolon;</DELETED>
<DELETED> (B) in paragraph (5), by striking the
period and inserting ``; and''; and</DELETED>
<DELETED> (C) by adding at the end the
following:</DELETED>
<DELETED> ``(6) the Federal Mortgage Insurance
Corporation.''; and</DELETED>
<DELETED> (2) in section 109(b), by inserting ``the Federal
Mortgage Insurance Corporation,'' after ``Federal Housing
Finance Agency,''.</DELETED>
<DELETED> (n) Dodd-Frank Act.--The Dodd-Frank Wall Street Reform and
Consumer Protection Act (Public Law 111-203) is amended--</DELETED>
<DELETED> (1) in section 342(g)(1)--</DELETED>
<DELETED> (A) in subparagraph (H), by striking ``;
and'' and inserting a semicolon;</DELETED>
<DELETED> (B) in subparagraph (I), by striking the
period and inserting ``; and''; and</DELETED>
<DELETED> (C) by adding at the end the
following:</DELETED>
<DELETED> ``(J) the Federal Mortgage Insurance
Corporation.'';</DELETED>
<DELETED> (2) in section 989E(a)(1), by adding at the end
the following:</DELETED>
<DELETED> ``(J) The Federal Mortgage Insurance
Corporation.''; and</DELETED>
<DELETED> (3) in section 1481(b), by inserting ``the Federal
Mortgage Insurance Corporation,'' after ``Federal Housing
Finance Agency,''.</DELETED>
<DELETED> (o) Housing and Urban-Rural Recovery Act.--Section 469 of
the Housing and Urban-Rural Recovery Act of 1983 (12 U.S.C. 1701p-1) is
amended, in the first sentence, by inserting ``the Federal Mortgage
Insurance Corporation,'' after ``Federal Housing Finance
Agency,''.</DELETED>
<DELETED> (p) Neighborhood Reinvestment Corporation Act.--Section
606(c)(3) of the Neighborhood Reinvestment Corporation Act (42 U.S.C.
8105(c)(3)) is amended by inserting ``, the Federal Mortgage Insurance
Corporation,'' after ``Federal Housing Finance Agency''.</DELETED>
<DELETED> (q) Federal Insurance Office Act.--Section 313(r)(4) of
title 31, United States Code, is amended by inserting ``the Federal
Mortgage Insurance Corporation,'' after ``Federal Housing Finance
Agency,''.</DELETED>
<DELETED> (r) Commodity Exchange Act.--Section 1a(39)(E) of the
Commodity Exchange Act (7 U.S.C. 1a(39)(E)) is amended--</DELETED>
<DELETED> (1) by striking ``a regulated entity'' and
inserting ``an enterprise''; and</DELETED>
<DELETED> (2) by inserting before the period at the end
``the Federal Mortgage Insurance Corporation in the case of a
swap dealer, major swap participant, security-based swap
dealer, or major security-based swap participant that is a
Federal Home Loan Bank''.</DELETED>
<DELETED> (s) Truth in Lending Act.--The Truth in Lending Act (15
U.S.C. 1601 et seq.) is amended--</DELETED>
<DELETED> (1) section 129H(b)(4), by inserting ``the Federal
Mortgage Insurance Corporation,'' after ``Federal Housing
Finance Agency,''; and</DELETED>
<DELETED> (2) in section 129E--</DELETED>
<DELETED> (A) in subsection (g)(1), by inserting
``the Federal Mortgage Insurance Corporation,'' after
``Federal Housing Finance Agency,''; and</DELETED>
<DELETED> (B) in subsection (h), by inserting ``the
Federal Mortgage Insurance Corporation,'' after
``Federal Housing Finance Agency,''.</DELETED>
<DELETED> (t) FFIEC.--The first sentence of section 1011 of the
Federal Financial Institutions Examination Council Act of 1978 (12
U.S.C. 3310) is amended by inserting ``the Federal Mortgage Insurance
Corporation,'' before ``and the Federal Housing Finance
Agency''.</DELETED>
<DELETED>TITLE IV--IMPROVING TRANSPARENCY, ACCOUNTABILITY, AND EFFICACY
WITHIN AFFORDABLE HOUSING</DELETED>
<DELETED>SEC. 401. AFFORDABLE HOUSING ALLOCATIONS.</DELETED>
<DELETED> (a) Fee and Allocation of Amounts.--Subject to subsection
(b), and in addition to any fees for the provision of insurance
established in accordance with title II, in each fiscal year the
Corporation shall--</DELETED>
<DELETED> (1) charge and collect a fee in an amount equal to
not less than 5 basis points and not more than 10 basis points
for each dollar of the outstanding principal balance of
eligible mortgages collateralizing covered securities for which
insurance is being provided under title II; and</DELETED>
<DELETED> (2) allocate or otherwise transfer--</DELETED>
<DELETED> (A) 80 percent of such fee amounts to the
Secretary of Housing and Urban Development to fund the
Housing Trust Fund established under section 1338 of
the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4568); and</DELETED>
<DELETED> (B) 20 percent of such fee amounts to the
Secretary of the Treasury to fund the Capital Magnet
Fund established under section 1339 of the Federal
Housing Enterprises Financial Safety and Soundness Act
of 1992 (12 U.S.C. 4569).</DELETED>
<DELETED> (b) Suspension of Contributions.--The Corporation may
temporarily suspend allocations under subsection (a) upon a finding by
the Corporation that such allocations are contributing, or would
contribute, to the financial instability of the Mortgage Insurance Fund
established under section 203.</DELETED>
<DELETED>SEC. 402. HOUSING TRUST FUND.</DELETED>
<DELETED> Section 1338 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4568) is amended--
</DELETED>
<DELETED> (1) in subsection (a), by striking ``by the
enterprises under section 1337'' and inserting ``pursuant to
section 401 of the Housing Finance Reform and Taxpayer
Protection Act of 2013'';</DELETED>
<DELETED> (2) by repealing subsection (b); and</DELETED>
<DELETED> (3) in subsection (c)--</DELETED>
<DELETED> (A) in paragraph (1), by striking ``Except
as provided in subsection (b), the'' and inserting
``The'';</DELETED>
<DELETED> (B) in paragraph (4)(B), by striking
``other than fiscal year 2009'';</DELETED>
<DELETED> (C) in paragraph (7)--</DELETED>
<DELETED> (i) in subparagraph (A), by
striking ``; and'' and inserting a
semicolon;</DELETED>
<DELETED> (ii) in subparagraph (B)(iv)--
</DELETED>
<DELETED> (I) by striking ``section
132'' and inserting ``section 1132'';
and</DELETED>
<DELETED> (II) by striking the
period at the end and inserting a
semicolon; and</DELETED>
<DELETED> (iii) by adding at the end the
following:</DELETED>
<DELETED> ``(C) grants and loans, including through
the use of pilot programs of sufficient scale, to
support the research and development of sustainable
homeownership and affordable rental programs, provided
that such grant or loan amounts are used only for the
benefit of families whose income does not exceed 120
percent of the area median income as determined by the
Secretary, with adjustments for family size;
and</DELETED>
<DELETED> ``(D) provide limited credit enhancement,
and other forms of credit support, for product and
services that--</DELETED>
<DELETED> ``(i) will increase the rate of
sustainable homeownership and affordable rental
by individuals or families whose income does
not exceed 120 percent of the area median
income as determined by the Secretary, with
adjustments for family size; and</DELETED>
<DELETED> ``(ii) might not otherwise be
offered or supported by a pilot program of
sufficient scale to determine the viability of
such products and services in the private
market.''; and</DELETED>
<DELETED> (D) in paragraph (10)--</DELETED>
<DELETED> (i) by amending subparagraph (A)
to read as follows:</DELETED>
<DELETED> ``(A) Ensuring efficient use of grant
amounts.--</DELETED>
<DELETED> ``(i) Use for certain eligible
activities.--In each fiscal year, of the
aggregate amount allocated to a State or State
designated entity under this subsection--
</DELETED>
<DELETED> ``(I) 35 percent shall be
used for activities under subparagraph
(A) of paragraph (7);</DELETED>
<DELETED> ``(II) 5 percent shall be
used for activities under subparagraph
(B) of paragraph (7); and</DELETED>
<DELETED> ``(III) 60 percent shall
be used for activities under
subparagraphs (C) and (D) of paragraph
(7).</DELETED>
<DELETED> ``(ii) Ensuring benefits for rural
communities.--</DELETED>
<DELETED> ``(I) In general.--In each
fiscal year, of the aggregate amount
allocated to a State or State
designated entity under this
subsection, the State or State
designated entity shall ensure that, at
a minimum, such amounts are distributed
for the benefit of nonentitlement areas
in that State in the same proportion
that the total amount of nonentitlement
areas in that State bears to the total
amount of all areas in that
State.</DELETED>
<DELETED> ``(II) Targeted outreach
to smaller communities.--In carrying
out the requirement under subclause
(I), each State or State designated
entity shall in distributing amounts
allocated to that State or State
designated entity give priority to
nonentitlement areas with a population
of less than 20,000.</DELETED>
<DELETED> ``(III) Definition of
nonentitlement area.--For purposes of
this clause, the term `nonentitlement
area' has the same meaning given that
term under section 102(a)(7) of the
Housing and Community Development Act
of 1974 (42 U.S.C. 5302(a)(7)).'';
and</DELETED>
<DELETED> (ii) by striking subparagraph
(E).</DELETED>
<DELETED>SEC. 403. CAPITAL MAGNET FUND.</DELETED>
<DELETED> Section 1339 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4569) is amended--
</DELETED>
<DELETED> (1) in subsection (b)(1), by striking ``pursuant
to section 1337'' and inserting ``pursuant to section 401 of
the Housing Finance Reform and Taxpayer Protection Act of
2013''; and</DELETED>
<DELETED> (2) in subsection (h), by striking paragraph
(7).</DELETED>
<DELETED>SEC. 404. ADDITIONAL TAXPAYER PROTECTIONS.</DELETED>
<DELETED> (a) Ensuring Benefits Support Citizens and Lawful
Permanent Residents.--The Secretary of Housing and Urban Development
and the Secretary of the Treasury, respectively, shall ensure that
grant amounts allocated to covered grantees, allocated by covered
grantees to eligible recipients, or allocated to individuals by such
eligible recipients are used for the benefit of only lawful permanent
residents and citizens of the United States in carrying out the
activities of--</DELETED>
<DELETED> (1) the Housing Trust Fund; and</DELETED>
<DELETED> (2) the Capital Magnet Fund.</DELETED>
<DELETED> (b) Not To Be Used for Political Activities.--Consistent
with the existing requirements under sections 1338(c)(10)(D) and
section 1339(h)(5) of the Federal Housing Enterprises Financial Safety
and Soundness Act of 1992, the Secretary of Housing and Urban
Development and the Secretary of the Treasury, respectively, shall
ensure that grant amounts allocated by covered grantees to eligible
recipients or allocated to individuals by such eligible recipients are
not used for--</DELETED>
<DELETED> (1) political activities;</DELETED>
<DELETED> (2) advocacy;</DELETED>
<DELETED> (3) lobbying, whether directly or through other
parties;</DELETED>
<DELETED> (4) influencing the selection, nomination,
election, or appointment of one or more candidates to any
Federal, State or local office;</DELETED>
<DELETED> (5) personal counseling services;</DELETED>
<DELETED> (6) travel expenses; and</DELETED>
<DELETED> (7) preparing or providing advice on tax
returns.</DELETED>
<DELETED> (c) Penalties.--</DELETED>
<DELETED> (1) Civil money penalty.--If an eligible recipient
or any other individual in receipt of grant amounts described
by this section violates any provision of subsection (a) or
(b), the Secretary of Housing and Urban Development or the
Secretary of the Treasury, as the case may be, may impose a
civil penalty on such recipient or individual, as the case may
be, of not more than $1,000,000 for each violation.</DELETED>
<DELETED> (2) Criminal penalties.--Whoever, being subject to
the provisions of subsection (a) or (b), knowingly
participates, directly or indirectly, in any manner in conduct
that results in a violation of such provisions shall,
notwithstanding section 3571 of title 18, United States Code,
be fined not more than $1,000,000 for each violation,
imprisoned for not more than 5 years, or both.</DELETED>
<DELETED> (3) Rule of construction.--The penalties imposed
under paragraphs (1) or (2) shall be in addition to any other
available civil remedy or any other available criminal penalty
and may be imposed whether or not the Secretary of Housing and
Urban Development or the Secretary of the Treasury, as the case
may be, imposes other administrative sanctions.</DELETED>
<DELETED> (d) Definition.--As used in this section--</DELETED>
<DELETED> (1) the term ``covered grantee'' means--</DELETED>
<DELETED> (A) for purposes of the Housing Trust
Fund, a State or State designated entity; and</DELETED>
<DELETED> (B) for purposes of the Capital Magnet
Fund, an eligible grantee as described under section
1339(e) of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992;</DELETED>
<DELETED> (2) the term ``eligible recipient'' means--
</DELETED>
<DELETED> (A) for purposes of the Housing Trust
Fund, a recipient as described under section 1338(c)(9)
of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992t; and</DELETED>
<DELETED> (B) for purposes of the Capital Magnet
Fund, a recipient of assistance from the Capital Magnet
Fund;</DELETED>
<DELETED> (3) the term ``Capital Magnet Fund'' means the
Capital Magnet Fund established under section 1339 of the
Federal Housing Enterprises Financial Safety and Soundness Act
of 1992 (12 U.S.C. 4569); and</DELETED>
<DELETED> (4) the term ``Housing Trust Fund'' means the
Housing Trust Fund established under section 1338 of the
Federal Housing Enterprises Financial Safety and Soundness Act
of 1992 (12 U.S.C. 4568).</DELETED>
<DELETED>TITLE V--WIND DOWN OF FANNIE MAE AND FREDDIE MAC</DELETED>
<DELETED>SEC. 501. REPEAL OF GSE CHARTERS.</DELETED>
<DELETED> (a) Fannie Mae.--Effective on the FMIC certification date,
the charter of the Federal National Mortgage Association is repealed
and the Federal National Mortgage Association shall have no authority
to conduct new business under such charter, except that the provisions
of such charter in effect immediately before such repeal shall continue
to apply with respect to the rights and obligations of any holders of--
</DELETED>
<DELETED> (1) outstanding debt obligations of the Federal
National Mortgage Association, including any--</DELETED>
<DELETED> (A) bonds, debentures, notes, or other
similar instruments;</DELETED>
<DELETED> (B) capital lease obligations;
or</DELETED>
<DELETED> (C) obligations in respect of letters of
credit, bankers' acceptances, or other similar
instruments; or</DELETED>
<DELETED> (2) mortgage-backed securities guaranteed by the
Federal National Mortgage Association.</DELETED>
<DELETED> (b) Freddie Mac.--Effective on the FMIC certification
date, the charter of the Federal Home Loan Mortgage Corporation is
repealed and the Federal Home Loan Mortgage Corporation shall have no
authority to conduct new business under such charter, except that the
provisions of such charter in effect immediately before such repeal
shall continue to apply with respect to the rights and obligations of
any holders of--</DELETED>
<DELETED> (1) outstanding debt obligations of the Federal
Home Loan Mortgage Corporation, including any--</DELETED>
<DELETED> (A) bonds, debentures, notes, or other
similar instruments;</DELETED>
<DELETED> (B) capital lease obligations;
or</DELETED>
<DELETED> (C) obligations in respect of letters of
credit, bankers' acceptances, or other similar
instruments; or</DELETED>
<DELETED> (2) mortgage-backed securities guaranteed by the
Federal Home Loan Mortgage Corporation.</DELETED>
<DELETED> (c) Existing Guarantee Obligations.--</DELETED>
<DELETED> (1) Explicit guarantee.--The full faith and credit
of the United States is pledged to the payment of all amounts
which may be required to be paid under any obligation described
under subsections (a) and (b).</DELETED>
<DELETED> (2) Continued dividend payments.--Notwithstanding
section 502 or any other provision of law, and subject to
section 601, provision 2(a) (relating to Dividend Payment Dates
and Dividend Periods) and provision 2(c) (relating to Dividend
Rates and Dividend Amount) of the Senior Preferred Stock
Purchase Agreement, or any provision of any certificate in
connection with such Agreement creating or designating the
terms, powers, preferences, privileges, limitations, or any
other conditions of the Variable Liquidation Preference Senior
Preferred Stock of an enterprise issued pursuant to such
Agreement--</DELETED>
<DELETED> (A) shall not be amended, restated, or
otherwise changed to reduce the rate or amount of
dividends in effect pursuant to such Agreement as of
the Third Amendment to such Agreement dated August 17,
2012, except that any amendment to such Agreement to
facilitate the sale of assets of the enterprises to
facilitate compliance with the provisions of section
502(b) shall be permitted; and</DELETED>
<DELETED> (B) shall remain in effect until the
guarantee obligations described under subsections
(a)(2) and (b)(2) are fully extinguished.</DELETED>
<DELETED> (3) Applicability.--Notwithstanding section 502,
all guarantee fee amounts derived from the single-family
mortgage guarantee business of the enterprises in existence as
of the FMIC certification date shall be subject to the terms of
the Senior Preferred Stock Purchase Agreement.</DELETED>
<DELETED> (d) Federal Safety and Soundness Act.--</DELETED>
<DELETED> (1) In general.--The Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et
seq.) is amended--</DELETED>
<DELETED> (A) in section 1303--</DELETED>
<DELETED> (i) in paragraph (2), by striking
``'Federal Housing Finance Agency'' and
inserting ``Federal Mortgage Insurance
Corporation'';</DELETED>
<DELETED> (ii) in paragraph (3), by striking
``means'' and all that follows through the
period at the end, and inserting ``means the
Federal Home Loan Bank Act.'';</DELETED>
<DELETED> (iii) by repealing paragraph (4);
and</DELETED>
<DELETED> (iv) in paragraph (9), by striking
``Director of the Federal Housing Finance
Agency'' and inserting ``Board of Directors of
the Federal Mortgage Insurance
Corporation'';</DELETED>
<DELETED> (B) by repealing section 1313A;
and</DELETED>
<DELETED> (C) by repealing section
1317(d).</DELETED>
<DELETED> (2) Effective date.--The amendments made by
paragraph (1) shall take effect on the FMIC certification
date.</DELETED>
<DELETED>SEC. 502. WIND DOWN.</DELETED>
<DELETED> (a) Wind Down.--</DELETED>
<DELETED> (1) Authority of fhfa.--Beginning on the date of
enactment of this Act and ending on the FMIC certification
date, the Director of the Federal Housing Finance Agency, in
consultation with the Corporation and the Secretary of the
Treasury, shall take such action, and may prescribe such
regulations and procedures, as may be necessary to wind down
the operations of the enterprises in an orderly manner that
complies with the requirements of this Act and any amendments
made by this Act.</DELETED>
<DELETED> (2) Limitation.--Notwithstanding any authority
granted to the Director of the Federal Housing Finance Agency
under paragraph (1), the sale, transfer, exchange, or other
disposition of any asset subject to the wind down required
under this section shall be prohibited, if the Corporation--
</DELETED>
<DELETED> (A) in its discretion determines that such
sale, transfer, exchange, or disposition would
materially interfere with the ability of the
Corporation to carry out the requirements of this Act;
and</DELETED>
<DELETED> (B) notifies, in writing, the Director of
the Federal Housing Finance Agency within 14 days of
such determination.</DELETED>
<DELETED> (3) Rule of construction.--Notwithstanding any
authority granted to the Director of the Federal Housing
Finance Agency under paragraph (1), the Director of the Federal
Housing Finance Agency--</DELETED>
<DELETED> (A) shall have no authority to sell,
transfer, exchange, or otherwise dispose of any
guarantee obligations described under subsections
(a)(2) and (b)(2) of section 501; and</DELETED>
<DELETED> (B) shall have no rights, claims, or title
to, nor any authority to sell, transfer, exchange, or
otherwise dispose of, guarantee fee amounts derived
from the single-family mortgage guarantee business of
the enterprises in existence as of the FMIC
certification date.</DELETED>
<DELETED> (b) Division of Assets and Liabilities; Authority To
Establish Holding Corporation and Dissolution Trust Fund.--The action
and procedures required under subsection (a)--</DELETED>
<DELETED> (1) shall include the establishment and execution
of plans to provide for an equitable division, distribution,
and liquidation of the assets and liabilities of an enterprise,
including any infrastructure, property, including intellectual
property, platforms, or any other thing or object of value,
provided such plan complies with the requirements of this Act
and any amendments made by this Act; and</DELETED>
<DELETED> (2) may provide for establishment of--</DELETED>
<DELETED> (A) a holding corporation organized under
the laws of any State of the United States or the
District of Columbia for the purpose of winding down an
enterprise; and</DELETED>
<DELETED> (B) one or more trusts to which to
transfer--</DELETED>
<DELETED> (i) outstanding debt obligations
of an enterprise; or</DELETED>
<DELETED> (ii) outstanding mortgages held
for the purpose of collateralizing mortgage-
backed securities guaranteed by an
enterprise.</DELETED>
<DELETED> (c) Recoupment by Senior Preferred Shareholders.--
</DELETED>
<DELETED> (1) In general.--Subject to the requirements of
this Act, any proceeds from the wind down of an enterprise
shall be paid first to the senior preferred shareholders of
each such enterprise, then to the preferred shareholders of
each such enterprise, and then to the common shareholders of
each such enterprise.</DELETED>
<DELETED> (2) Joint determination.--The amount of any
proceeds to be paid pursuant to paragraph (1) shall be jointly
determined by the Director of the Federal Housing Finance
Agency, the Corporation, and the Secretary of the
Treasury.</DELETED>
<DELETED> (3) Maximum return to shareholders.--The wind down
of each enterprise required under this section shall be managed
by the Director of the Federal Housing Finance Agency, in
consultation with the Corporation and the Secretary of the
Treasury, to obtain resolutions that maximize the return for
the senior preferred shareholders under paragraph (1), to the
extent that such resolutions--</DELETED>
<DELETED> (A) are consistent with the goal of
supporting a sound, stable, and liquid housing
market;</DELETED>
<DELETED> (B) are consistent with applicable Federal
and State law;</DELETED>
<DELETED> (C) comply with the requirements of this
Act and any amendments made by this Act; and</DELETED>
<DELETED> (D) protect the taxpayer.</DELETED>
<DELETED> (4) Sale of certain assets as a going concern.--
Except as provided in section 601 or elsewhere as required in
this Act, if the Director of the Federal Housing Finance
Agency, in consultation with the Corporation and the Secretary
of the Treasury, determines that the sale of any line of
business, or any function, activity, or service of an
enterprise as a going concern will maximize the return for the
senior preferred shareholders as required under paragraph (3),
the Director may conduct such sale, provided that--</DELETED>
<DELETED> (A) under no circumstance, shall such sale
transfer, convey, or authorize, or be deemed to
transfer, convey, or authorize, any guarantee or
Federal support, assistance, or backing, implicit or
explicit, related to any such line of business,
function, activity, or service; and</DELETED>
<DELETED> (B) such sale does not impede or otherwise
interfere with the ability of the Federal Mortgage
Insurance Corporation to carry out the functions and
requirements of this Act.</DELETED>
<DELETED> (5) Rule of construction.--For purposes of this
subsection, the term ``proceeds'' does not include any
guarantee fee amounts derived from the single-family mortgage
guarantee business of the enterprises in existence as of the
FMIC certification date.</DELETED>
<DELETED>SEC. 503. ALIGNING PURPOSE OF CONSERVATORSHIP WITH
FMIC.</DELETED>
<DELETED> (a) Power as Conservator.--Section 1367(b)(2)(D) of the
Federal Housing Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4617(b)(2)(D)) is amended to read as follows:</DELETED>
<DELETED> ``(D) Power as conservator.--After the
date of enactment of the Housing Finance Reform and
Taxpayer Protection Act of 2013 the Agency shall, as
conservator, take such actions as are necessary--
</DELETED>
<DELETED> ``(i) to ensure the efficient,
effective, and expeditious wind down of the
enterprises;</DELETED>
<DELETED> ``(ii) to manage the affairs,
assets, and obligations of the enterprises and
to operate the enterprises in compliance with
the requirements of the Housing Finance Reform
and Taxpayer Protection Act of 2013;</DELETED>
<DELETED> ``(iii) to assist the Federal
Mortgage Insurance Corporation, in a
consultative capacity, in carrying out the
requirements under the Housing Finance Reform
and Taxpayer Protection Act of 2013;
and</DELETED>
<DELETED> ``(iv) to maintain liquidity and
stability in the secondary mortgage market
until such as time as the charters of the
enterprises are revoked pursuant to title V of
such Act.''.</DELETED>
<DELETED> (b) Rule of Construction.--Nothing in this Act, or any
amendments made by this Act, except as may be explicitly provided for
in this Act, or any amendment made by this Act, shall be deemed to
alter the powers, authorities, rights, and duties that are vested in
the Federal Housing Finance Agency and the Director of the Federal
Housing Finance Agency with respect to its supervision and regulation
of the enterprises.</DELETED>
<DELETED>SEC. 504. CONFORMING LOAN LIMITS.</DELETED>
<DELETED> (a) In General.--Beginning on the date of enactment of
this Act, the limitations governing the maximum original principal
obligation of conventional mortgages that may be purchased by the
Federal National Mortgage Association and the Federal Home Loan
Mortgage Corporation, referred to in section 302(b)(2) of the Federal
National Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) and
section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1454(a)(2)), respectively, shall not exceed $417,000 for a
mortgage secured by a single-family residence, $533,850 for a mortgage
secured by a 2-family residence, $645,300 for a mortgage secured by a
3-family residence, and $801,950 for a mortgage secured by a 4-family
residence, except that such maximum limitations shall be adjusted
effective January 1 of each year beginning after the date of enactment
of this Act, subject to the limitations in this paragraph. Each
adjustment shall be made by adding to each such amount (as it may have
been previously adjusted) a percentage thereof equal to the percentage
increase, during the most recent 12-month or 4-quarter period ending
before the time of determining such annual adjustment, in the housing
price index maintained pursuant to section 1322 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C.
4542). If the change in such house price index during the most recent
12-month or 4-quarter period ending before the time of determining such
annual adjustment is a decrease, then no adjustment shall be made for
the next year, and the next adjustment shall take into account prior
declines in the house price index, so that any adjustment shall reflect
the net change in the house price index since the last adjustment.
Declines in the house price index shall be accumulated and then reduce
increases until subsequent increases exceed prior declines.</DELETED>
<DELETED> (b) Special Exception for Alaska, Hawaii, Guam, and
USVI.--The limitations set forth under subsection (a) shall be
increased by not to exceed 50 per centum with respect to properties
located in Alaska, Guam, Hawaii, and the Virgin Islands.</DELETED>
<DELETED> (c) High-Cost Area Limit.--The limitations set forth under
subsection (a) shall also be increased, with respect to properties of a
particular size located in any area for which 115 percent of the median
house price for such size residence exceeds the limitation under
subsection (a) for such size residence--</DELETED>
<DELETED> (1) for the first year following the date of
enactment of this Act, to the lesser of 150 percent of such
limitation for such size residence or the amount that is equal
to 115 percent of the median house price in such area for such
size residence;</DELETED>
<DELETED> (2) for the second year following the date of
enactment of this Act, to the lesser of 145 percent of such
limitation for such size residence or the amount that is equal
to 115 percent of the median house price in such area for such
size residence;</DELETED>
<DELETED> (3) for the third year following the date of
enactment of this Act, to the lesser of 135 percent of such
limitation for such size residence or the amount that is equal
to 115 percent of the median house price in such area for such
size residence;</DELETED>
<DELETED> (4) for the fourth year following the date of
enactment of this Act, to the lesser of 130 percent of such
limitation for such size residence or the amount that is equal
to 115 percent of the median house price in such area for such
size residence; and</DELETED>
<DELETED> (5) for the fifth year following the date of
enactment of this Act, and each year thereafter, to the lesser
of 125 percent of such limitation for such size residence or
the amount that is equal to 115 percent of the median house
price in such area for such size residence.</DELETED>
<DELETED>SEC. 505. PORTFOLIO REDUCTION.</DELETED>
<DELETED> (a) Graduated Reduction.--</DELETED>
<DELETED> (1) In general.--Each enterprise shall not own, as
of any applicable date, mortgage assets in excess of--
</DELETED>
<DELETED> (A) as of December 31, 2013,
$552,500,000,000; and</DELETED>
<DELETED> (B) on December 31 of each year thereafter
until the FMIC certification date, 85 percent of the
aggregate amount of the mortgage assets that the
enterprise was permitted to own as of December 31 of
the immediately preceding calendar year.</DELETED>
<DELETED> (2) Retained portfolio to facilitate orderly wind
down.--On December 31 of the year in which the FMIC
certification date occurs, the Corporation shall establish an
allowable amount of enterprise owned mortgage assets in an
amount equal to the amount necessary to facilitate--</DELETED>
<DELETED> (A) the orderly wind down of the
enterprises; and</DELETED>
<DELETED> (B) appropriate loss mitigation on any
legacy guarantees of the enterprises.</DELETED>
<DELETED> (b) Mortgage Assets Defined.--For purposes of this
section, the term ``mortgage assets'' means, with respect to an
enterprise, assets of such enterprise consisting of mortgages, mortgage
loans, mortgage-related securities, participation certificates,
mortgage-backed commercial paper, obligations of real estate mortgage
investment conduits and similar assets, in each case to the extent such
assets would appear on the balance sheet of such enterprise in
accordance with generally accepted accounting principles in effect in
the United States as of September 7, 2008 (as set forth in the opinions
and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board from time to
time; and without giving any effect to any change that may be made
after September 7, 2008, in respect of Statement of Financial
Accounting Standards No. 140 or any similar accounting
standard).</DELETED>
<DELETED>SEC. 506. REPEAL OF MANDATORY HOUSING GOALS.</DELETED>
<DELETED> (a) Repeal of Housing Goals.--The Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 is amended by
striking sections 1331 through 1336 (12 U.S.C. 4561-6).</DELETED>
<DELETED> (b) Conforming Amendments.--The Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501
et seq.) is amended--</DELETED>
<DELETED> (1) in section 1303(28), by striking ``, and, for
the purposes'' and all that follows through ``designated
disaster areas'';</DELETED>
<DELETED> (2) in section 1324(b)(1)(A), by striking clauses
(i), (ii), and (iv);</DELETED>
<DELETED> (3) in section 1341--</DELETED>
<DELETED> (A) in subsection (a)--</DELETED>
<DELETED> (i) in paragraph (1), by inserting
``or'' after the semicolon at the
end;</DELETED>
<DELETED> (ii) in paragraph (2), by striking
the semicolon at the end and inserting a
period; and</DELETED>
<DELETED> (iii) by striking paragraphs (3)
and (4); and</DELETED>
<DELETED> (B) in subsection (b)(2)--</DELETED>
<DELETED> (i) in subparagraph (A), by
inserting ``or'' after the semicolon at the
end;</DELETED>
<DELETED> (ii) by striking subparagraphs (B)
and (C); and</DELETED>
<DELETED> (iii) by redesignating
subparagraph (D) as subparagraph (B);</DELETED>
<DELETED> (4) in section 1345(a)--</DELETED>
<DELETED> (A) in paragraph (1), by inserting ``or''
after the semicolon at the end;</DELETED>
<DELETED> (B) in paragraph (2), by striking the
semicolon at the end and inserting a period;
and</DELETED>
<DELETED> (C) by striking paragraphs (3) and (4);
and</DELETED>
<DELETED> (5) in section 1371(a)(2), by striking ``with any
housing goal established under subpart B of part 2 of subtitle
A of this title, with section 1336 or 1337 of this
title,''.</DELETED>
<DELETED>TITLE VI--IMPROVEMENTS TO FUNCTIONING OF HOUSING
MARKET</DELETED>
<DELETED>SEC. 601. CONTINUATION OF MULTIFAMILY BUSINESS OF THE
ENTERPRISES.</DELETED>
<DELETED> (a) In General.--Notwithstanding any provision of title V,
or any other provision of law, effective on the FMIC certification
date, all functions, activities, infrastructure, property, including
intellectual property, platforms, or any other object or service of an
enterprise relating to the maintenance and operation of the multifamily
guarantee business of an enterprise shall be transferred, without cost,
to the Corporation.</DELETED>
<DELETED> (b) Authority of Director.--The Corporation is authorized,
upon such terms and conditions as it may deem appropriate, to guarantee
the timely payment of principal of and interest, on any mortgage on
multifamily housing purchased by the Corporation pursuant to the
transfer of an enterprise's multifamily guarantee business under
subsection (a).</DELETED>
<DELETED> (c) Limitation on Ongoing Operation of Multifamily
Business.--In carrying out the multifamily guarantee business of an
enterprise transferred pursuant to subsection (a), the Corporation
shall ensure that any such business continues to operate, as
applicable, consistent with--</DELETED>
<DELETED> (1) the Delegated Underwriting and Servicing
Lender Program established by the Federal National Mortgage
Association; and</DELETED>
<DELETED> (2) the Program Plus Lender Program established by
the Federal Home Loan Mortgage Corporation, especially the
Series K Structured Pass-Through Certificates offered by the
enterprise.</DELETED>
<DELETED> (d) Explicit Guarantee.--The full faith and credit of the
United States is pledged to the payment of all amounts which may be
required to be paid under any guaranty--</DELETED>
<DELETED> (1) issued by the Corporation pursuant to this
subsection; and</DELETED>
<DELETED> (2) obligation assumed by the Corporation pursuant
to the transfer of an enterprise's multifamily guarantee
business under subsection (a).</DELETED>
<DELETED> (e) Guarantee Fee.--</DELETED>
<DELETED> (1) In general.--The Corporation shall collect a
reasonable fee for any guaranty under this subsection and shall
make such charges as it may determine to be reasonable for the
analysis of any trust or other security arrangement proposed by
an issuer of a security backed by multifamily mortgages
guaranteed under this section.</DELETED>
<DELETED> (2) Deposit into mortgage insurance fund.--Any
guarantee fee amounts collected under this subsection shall be
deposited in the Mortgage Insurance Fund.</DELETED>
<DELETED>SEC. 602. MULTIPLE LENDER ISSUES.</DELETED>
<DELETED> With respect to the dwelling of a borrower that serves as
security for an eligible mortgage, if the borrower enters into any
credit transaction that would result in the creation of a new mortgage
or other lien on such dwelling where the loan-to-value ratio of such
credit transaction amount is 80 percent or more, the creditor of such
new mortgage or other lien shall seek and obtain the approval of the
creditor of the senior eligible mortgage loan before any such credit
transaction becomes valid and enforceable.</DELETED>
<DELETED>SEC. 603. GAO REPORT ON FULL PRIVATIZATION OF SECONDARY
MORTGAGE MARKET.</DELETED>
<DELETED> (a) GAO Report.--Not later than 8 years after the date of
enactment of this Act, the Comptroller General of the United States
shall 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 on the feasibility of maintaining a fully
privatized secondary mortgage market, including recommendations on how
to best carry out any displacement of the insurance model established
under this Act.</DELETED>
<DELETED> (b) Corporation Plan To Transition to a Fully Private
Secondary Mortgage Market.--</DELETED>
<DELETED> (1) Required submission to congress.--Not later
than 6 months after the date on which the report required under
subsection (a) is submitted, the Corporation shall submit to
the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House of
Representatives a plan to transition to a fully privatized
secondary mortgage market.</DELETED>
<DELETED> (2) Required content of plan.--The plan required
to be submitted under paragraph (1) shall describe, chronicle,
and specify all the legislative, administrative, and regulatory
actions necessary to carry out a transition to a fully private
secondary mortgage market, including all actions necessary to
dissolve the Corporation and successfully displace the
insurance model established under this Act.</DELETED>
<DELETED>TITLE VII--GENERAL PROVISIONS</DELETED>
<DELETED>SEC. 701. AUTHORITY TO ISSUE REGULATIONS.</DELETED>
<DELETED> The Corporation may prescribe such regulations and issue
such guidelines, orders, requirements, or standards as are necessary to
carry out this Act, or any amendment made by this Act.</DELETED>
<DELETED>SEC. 702. FAIR VALUE ACCOUNTING.</DELETED>
<DELETED> In any evaluation, oversight, audit, or analysis by the
Corporation of the cost of the Mortgage Insurance Fund, the insurance
or guarantee activities of the Corporation required under this Act,
including any fee or charge in connection with the provision of such
insurance or guarantee, or the financial transactions of the
Corporation, the Corporation shall conduct any such evaluation,
oversight, audit, or analysis based on the fair-value accrual
accounting method.</DELETED>
<DELETED>SEC. 703. RULE OF CONSTRUCTION.</DELETED>
<DELETED> Nothing in this Act shall be construed to prohibit or
otherwise restrict the ability of a holder of any loss position in any
covered security insured under this Act from restructuring,
retranching, or resecuritizing such position.</DELETED>
<DELETED>SEC. 704. SEVERABILITY.</DELETED>
<DELETED> If any provision of this Act or the application of any
provision of this Act to any person or circumstance, is held invalid,
the application of such provision to other persons or circumstances,
and the remainder of this Act, shall not be affected thereby.</DELETED>
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Housing Finance
Reform and Taxpayer Protection Act of 2014''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
TITLE I--ELIMINATION OF FANNIE MAE AND FREDDIE MAC
Sec. 101. Elimination of Fannie Mae and Freddie Mac.
TITLE II--FEDERAL MORTGAGE INSURANCE CORPORATION
Sec. 201. Establishment.
Sec. 202. Management of Corporation.
Sec. 203. Advisory Committee.
Sec. 204. Office of the Inspector General.
Sec. 205. Staff, experts, and consultants.
Sec. 206. Reports; testimony; audits.
Sec. 207. Specific offices.
Sec. 208. Office of Consumer and Market Access.
Sec. 209. Office of Multifamily Housing.
Sec. 210. Equitable access for lenders and borrowers.
Sec. 211. Office of Taxpayer Protection.
TITLE III--DUTIES AND RESPONSIBILITIES OF THE FMIC
Subtitle A--Duties and Authorities
Sec. 301. Duties and responsibilities.
Sec. 302. Standards for credit risk-sharing mechanisms.
Sec. 303. Insurance; Mortgage Insurance Fund.
Sec. 304. Loan limits; Housing Price Index.
Sec. 305. Authority to protect taxpayers in unusual and exigent market
conditions.
Sec. 306. General powers.
Sec. 307. Exemptions.
Sec. 308. Regulatory consultation and coordination.
Sec. 309. Authority to issue regulations.
Sec. 310. Equivalency in protection of the Mortgage Insurance Fund.
Subtitle B--Approval and Supervision of Approved Entities for Single-
family Activities
Sec. 311. Approval and supervision of guarantors.
Sec. 312. Approval and supervision of aggregators.
Sec. 313. Approval of private mortgage insurers.
Sec. 314. Approval of servicers.
Sec. 315. Authority to establish and approve small lender mutuals.
Sec. 316. Supervisory actions related to capital and solvency.
Sec. 317. Ownership, acquisitions, and operations of covered entities.
Subtitle C--Securitization Platform and Transparency in Market
Operations
PART I--Securitization Platform
Sec. 321. Establishment of the Securitization Platform.
Sec. 322. Management of the Platform.
Sec. 323. Membership in the Platform.
Sec. 324. Fees.
Sec. 325. Purposes and obligations of the Platform.
Sec. 326. Uniform securitization agreements for covered securities and
required contractual terms for noncovered
securities.
Sec. 327. Approval and standards for collateral risk managers.
PART II--Transparency in Market Operations
Sec. 331. Review of loan documents; disclosures.
Sec. 332. National mortgage database.
Sec. 333. Working group on electronic registration of mortgage loans.
Sec. 334. Multiple lender issues.
Sec. 335. Required harmonization of standards within eligible mortgage
criteria.
TITLE IV--FHFA AND FMIC TRANSITION
Sec. 401. Definitions.
Sec. 402. FHFA transition.
Sec. 403. Transfer and rights of employees of the FHFA.
Sec. 404. Transition Committee.
Sec. 405. Transition assessments.
Sec. 406. Transfer of powers and duties on the system certification
date; continuation and coordination of
certain actions.
Sec. 407. Technical and conforming amendments relating to abolishment
of FHFA.
Sec. 408. Repeal of mandatory housing goals.
TITLE V--IMPROVING TRANSPARENCY, ACCOUNTABILITY, AND EFFICACY WITHIN
AFFORDABLE HOUSING
Sec. 501. Affordable housing allocations.
Sec. 502. Housing Trust Fund.
Sec. 503. Capital Magnet Fund.
Sec. 504. Market Access Fund.
Sec. 505. Additional taxpayer protections.
Sec. 506. Promoting affordable housing investment.
TITLE VI--TRANSITION AND TERMINATION OF FANNIE MAE AND FREDDIE MAC
Sec. 601. Minimum housing finance system criteria to be met prior to
system certification date.
Sec. 602. Transition of the housing finance system.
Sec. 603. Resolution authority; technical amendments.
Sec. 604. Wind down.
Sec. 605. Portfolio reduction.
Sec. 606. Oversight of transition of the housing finance system.
Sec. 607. Authority to establish provisional standards.
Sec. 608. Initial fund level for the Mortgage Insurance Fund.
Sec. 609. GAO report on full privatization of secondary mortgage
market.
TITLE VII--MULTIFAMILY
Sec. 701. Establishment of multifamily subsidiaries.
Sec. 702. Disposition of multifamily businesses.
Sec. 703. Approval and supervision of multifamily guarantors.
Sec. 704. Multifamily housing requirement.
Sec. 705. Establishment of small multifamily property program.
Sec. 706. Multifamily housing study.
Sec. 707. Multifamily platform study.
Sec. 708. Short-term residential housing.
TITLE VIII--GENERAL PROVISIONS
Sec. 801. Rule of construction.
Sec. 802. Severability.
Sec. 803. Transfer notification under TILA.
Sec. 804. Investment authority to support rural infrastructure.
Sec. 805. Consolidation of similar housing assistance programs.
Sec. 806. Bureau of Consumer Financial Protection review; GAO report.
Sec. 807. Determination of budgetary effects.
SEC. 2. DEFINITIONS.
As used in this Act, the following definitions shall apply:
(1) Affiliate.--The term ``affiliate'' means any person
that controls, is controlled by, or is under common control
with another person.
(2) Affordable rental housing.--The term ``affordable
rental housing'' means a rental housing unit that is considered
affordable for extremely low-, very low-, low-, and moderate-
income families if the rent charged, including utilities or a
utility allowance, does not exceed 30 percent of the respective
income limit in that market area for extremely low-, very low-,
low-, or moderate-income families, respectively, of the size
appropriate for the number of bedrooms in the unit, as
established by the Secretary of Housing and Urban Development.
(3) Agency transfer date.--The term ``agency transfer
date'' means the date that is 6 months after the date of
enactment of this Act.
(4) Appropriate federal banking agency.--The term
``appropriate Federal banking agency'' has the same meaning as
in section 3(q) of the Federal Deposit Insurance Act (12 U.S.C.
1813(q)), and includes the National Credit Union Administration
in the case of any credit union.
(5) Approved aggregator.--The term ``approved aggregator''
means an entity that is approved by the Corporation pursuant to
section 312.
(6) Approved entity.--The term ``approved entity'' means--
(A) an approved guarantor;
(B) an approved multifamily guarantor;
(C) an approved aggregator;
(D) an approved private mortgage insurer; and
(E) an approved servicer.
(7) Approved guarantor.--The term ``approved guarantor''
means an entity that is approved by the Corporation pursuant to
section 311.
(8) Approved multifamily guarantor.--The term ``approved
multifamily guarantor'' means an entity that is approved by the
Corporation pursuant to section 703.
(9) Approved private mortgage insurer.--The term ``approved
private mortgage insurer'' means an entity that is approved by
the Corporation pursuant to section 313.
(10) Approved servicer.--The term ``approved servicer''
means an entity that is approved by the Corporation pursuant to
section 314.
(11) Area.--The term ``area'' means a metropolitan
statistical area, a micropolitan statistical area, and a
noncore area, as such areas may be established by the Office of
Management and Budget.
(12) Board; board of directors.--The terms ``Board'' and
``Board of Directors'' mean the Board of Directors of the
Federal Mortgage Insurance Corporation, unless the context
otherwise requires.
(13) Chairperson.--The term ``Chairperson'' means the
Chairperson of Board of Directors of the Federal Mortgage
Insurance Corporation, unless the context otherwise requires.
(14) Charter.--The term ``charter'' means--
(A) with respect to the Federal National Mortgage
Association, the Federal National Mortgage Association
Charter Act (12 U.S.C. 1716 et seq.); and
(B) with respect to the Federal Home Loan Mortgage
Corporation, the Federal Home Loan Mortgage Corporation
Act (12 U.S.C. 1451 et seq.).
(15) Community development financial institution.--The term
``Community Development Financial Institution'' has the same
meaning as in section 103 of the Riegle Community Development
and Regulatory Improvement Act of 1994 (12 U.S.C. 4702).
(16) Community land trust.--The term ``community land
trust'' means a nonprofit organization or State or local
government that owns real property and leases the land through
homeownership programs that--
(A) use a ground lease to--
(i) make real property affordable to low-
or moderate-income borrowers; and
(ii) stipulate a preemptive option to
purchase the real property from the home owner
at resale so that the affordability of the real
property is preserved for successive low- and
moderate-income borrowers;
(B) monitor properties to ensure affordability is
preserved over resales; and
(C) support homeowners to promote successful
homeownership and prevent foreclosure.
(17) Corporation.--The term ``Corporation'' means the
Federal Mortgage Insurance Corporation established under title
II.
(18) Covered entity.--The term ``covered entity'' means--
(A) an approved guarantor;
(B) an approved multifamily guarantor; and
(C) an approved aggregator that is neither an
insured depository institution nor an affiliate of an
insured depository institution.
(19) Covered guarantee transaction.--
(A) Definition.--The term ``covered guarantee
transaction'' means a transaction, as that term shall
be defined by the Corporation by regulation, involving
the agreement to guarantee--
(i) any eligible mortgage loan;
(ii) any pool of such eligible mortgage
loans; or
(iii) the payment of principal and interest
on covered securities collateralized by
eligible mortgage loans before payments insured
by the Corporation are made.
(B) Rules of construction.--A covered guarantee
transaction--
(i) shall not be construed to be--
(I) a contract for sale of a
commodity for future delivery or a swap
under the Commodity Exchange Act; or
(II) a contract of insurance or
reinsurance under any Federal or State
law regulating the sale, underwriting,
provision, or brokerage of insurance;
(ii) shall not be subject to any
requirement of the Commodity Exchange Act; and
(iii) shall not be subject to any
requirement imposed under State law pertaining
to the sale, underwriting, provision, or
brokerage of insurance or reinsurance.
(20) Covered market-based risk-sharing transaction.--
(A) Definition.--The term ``covered market-based
risk-sharing transaction'' means any private market
transaction, as that term shall be defined by the
Corporation by regulation, involving a covered security
issued subject to a standard risk-sharing mechanism,
product, contract, or other security agreement approved
by the Corporation under section 302.
(B) Rules of construction.--A covered market-based
risk-sharing transaction--
(i) shall not be construed to be a contract
of insurance or reinsurance under any Federal
or State law regulating the sale, underwriting,
provision, or brokerage of insurance; and
(ii) shall not be subject to any
requirement imposed under State law pertaining
to the sale, underwriting, provision, or
brokerage of insurance or reinsurance.
(21) Covered security.--The term ``covered security''
means--
(A) a single-family covered security; and
(B) a multifamily covered security.
(22) Credit risk-sharing mechanism.--The term ``credit
risk-sharing mechanism'' means any mechanism, product,
structure, contract, or security agreement by which a private
market holder assumes the first loss position, or any part of
such position, associated with the pool of eligible mortgage
loans collateralizing a covered security, or by which an
approved guarantor or approved multifamily guarantor manages
the credit risk related to guarantees provided for covered
securities.
(23) CSP.--The term ``CSP'' means the securitization
infrastructure announced by the Federal Housing Finance Agency
on October 4, 2012, and developed by the enterprises while
under conservatorship, under the authority of the Federal
Housing Finance Agency pursuant to the Safety and Soundness
Act, and commonly referred to as the ``common securitization
platform''.
(24) Days.--The term ``days'' means--
(A) with respect to any period of time less than or
equal to 10 days, business days; and
(B) with respect to any period of time greater than
10 days, calendar days.
(25) Depository institution holding company.--The term
``depository institution holding company'' has the same meaning
as section 3(w)(1) of the Federal Deposit Insurance Act (12
U.S.C. 1813(w)(1)).
(26) Eligible borrower.--The term ``eligible borrower''
means a borrower who--
(A) applies for an eligible mortgage loan; and
(B) meets the standards required of a borrower to
be approved for an eligible mortgage loan.
(27) Eligible mortgage loan.--The term ``eligible mortgage
loan'' means--
(A) an eligible single-family mortgage loan; and
(B) an eligible multifamily mortgage loan.
(28) Eligible multifamily mortgage loan.--The term
``eligible multifamily mortgage loan'' means a commercial real
estate loan--
(A) secured by a property with--
(i) 5 or more residential units; or
(ii) 2 or more residential units, if the
requirement under clause (i) is waived by the
Corporation for purposes of carrying out a
demonstration or pilot program;
(B) the primary source of repayment for which is
expected to be derived from rental income generated by
the property;
(C) the term of which may not be less than 5 years
but not more than 40 years, except that the term may be
less than 5 years subject to standards set by the
Corporation;
(D) that satisfies any additional underwriting
criteria established by the Corporation to balance
supporting access to capital with managing credit risk
to the Mortgage Insurance Fund, including--
(i) a maximum loan-to-value ratio;
(ii) a minimum debt service coverage ratio;
and
(iii) considerations for restrictive or
special uses of a property, including non-
residential uses, properties for seniors,
manufactured housing, and affordability
restrictions, and the impact of such uses on
clauses (i) and (ii); and
(E) that satisfies any additional underwriting
criteria that may be established by the Corporation.
(29) Eligible single-family mortgage loan.--The term
``eligible single-family mortgage loan'' means--
(A) a loan that--
(i) has been originated in compliance with
minimum standards issued by the Corporation by
regulation, provided that such standards--
(I) are uniform and equal in kind,
nature, and application regardless of--
(aa) the originator of the
mortgage loan; or
(bb) the role performed by
an approved entity with respect
to the mortgage loan;
(II) are, to the greatest extent
possible, substantially similar to the
regulations issued by the Bureau of
Consumer Financial Protection under
section 129C(b) of the Truth in Lending
Act (15 U.S.C. 1639c); and
(III) permit--
(aa) residential real
estate loans secured by a
property with 1 to 4 single-
family units, including units
that are not owner-occupied;
(bb) loans secured by
manufactured homes, as defined
in section 603(6) of the
National Manufactured Housing
Construction and Safety
Standards Act of 1974 (42
U.S.C. 5402(6));
(cc) residential real
estate loans secured by a
property with 1 to 4 single-
family units that are
originated by a State housing
finance agency, as defined in
section 106 of the Housing and
Urban Development Act of 1968
(12 U.S.C. 1701x);
(dd) loans originated by a
Community Development Financial
Institution;
(ee) loans originated by a
mission-based nonprofit lender;
(ff) loans secured by real
property in a permanently
affordable homeownership
program or community land
trust; and
(gg) loans to entities that
provide non-owner occupied
rental housing with care
providers for individuals with
intellectual and developmental
disabilities;
(ii) has a maximum original principal
obligation amount that does not exceed the
applicable loan limitation established under
section 304;
(iii) has an outstanding principal balance
at the time of purchase of insurance available
under title II that does not exceed 80 percent
of the value of the property securing the loan,
unless--
(I) for such period and under such
circumstances as the Corporation may
require, the seller agrees to
repurchase or replace the loan upon
demand of the Corporation in the event
the loan is in default;
(II) an approved private mortgage
insurer guarantees or insures--
(aa) not less than 12
percent of the unpaid principal
balance of the loan, accounting
for any down payment required
under clause (iv), for loans in
which the unpaid principal
balance exceeds 80 percent but
not more than 85 percent of the
value of the property securing
the loan;
(bb) not less than 25
percent of the unpaid principal
balance of the loan, accounting
for any down payment required
under clause (iv), for loans in
which the unpaid principal
balance exceeds 85 percent but
not more than 90 percent of the
value of the property securing
the loan;
(cc) not less than 30
percent of the unpaid principal
balance of the loan, accounting
for any down payment required
under clause (iv), for loans in
which the unpaid principal
balance exceeds 90 percent but
not more than 95 percent of the
value of the property securing
the loan; and
(dd) not less than 35
percent of the unpaid principal
balance of the loan, accounting
for any down payment required
under clause (iv), for loans in
which the unpaid principal
balance exceeds 95 percent of
the value of the property
securing the loan; or
(III) that portion of the unpaid
principal balance of the loan which
exceeds 80 percent of the value of the
property securing the loan is subject
to other credit enhancement that--
(aa) meets standards
comparable to the standards
required of private mortgage
insurers under subclause (II);
and
(bb) is approved by the
Corporation;
(iv) has a down payment that is--
(I) for a first-time homebuyer, as
that term shall be defined by the
Corporation by regulation, equal to not
less than 3.5 percent of the purchase
price of the property securing the
loan; or
(II) for non first-time homebuyers,
equal to--
(aa) not less than 3.5
percent of the purchase price
of the property securing the
loan, if such purchase occurs
prior to the system
certification date or less than
1 year after the system
certification date;
(bb) not less than 4
percent of the purchase price
of the property securing the
loan, if such purchase occurs
during the period that begins 1
year after the system
certification date and ends
less than 2 years after the
system certification date;
(cc) not less than 4.5
percent of the purchase price
of the property securing the
loan, if such purchase occurs
during the period that begins 2
years after the system
certification date and ends
less than 3 years after the
system certification date; or
(dd) not less than 5
percent of the purchase price
of the property securing the
loan, if such purchase occurs
during any period after the
period set forth in item (cc);
(v) satisfies standards related to
establishing title or marketability of title,
as may be required by the Corporation, which
standards may include the required purchase of
title insurance on the property securing the
loan;
(vi) contains such terms and provisions
with respect to insurance, property
maintenance, repairs, alterations, payment of
taxes, default, reserves, delinquency charges,
foreclosure proceedings, anticipation of
maturity, additional and secondary liens, and
other matters, including matters that set forth
terms and provisions for establishing escrow
accounts, performing financial assessments, or
limiting the amount of any payment made
available under the loan as the Corporation may
prescribe; and
(vii) contains such other terms,
characteristics, or underwriting criteria as
the Corporation, in consultation with the
Bureau of Consumer Financial Protection, may
determine necessary or appropriate; or
(B) a loan refinanced pursuant to the authority
granted under section 305(i).
(30) Enterprise.--The term ``enterprise'' means--
(A) the Federal National Mortgage Association and
any affiliate thereof; and
(B) the Federal Home Loan Mortgage Corporation and
any affiliate thereof.
(31) Extremely low-income.--The term ``extremely low-
income'' means--
(A) in the case of owner-occupied units, income not
in excess of 30 percent of the median income of the
area; and
(B) in the case of rental units, income not in
excess of 30 percent of the median income of the area,
with adjustments for smaller and larger families, as
determined by the Secretary of Housing and Urban
Development.
(32) Federal home loan bank.--The term ``Federal Home Loan
Bank'' means a bank established under the authority of the
Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.).
(33) Federal home loan bank system.--The term ``Federal
Home Loan Bank System'' means the Federal Home Loan Banks and
the Office of Finance and any authorized subsidiary of one or
more Federal Home Loan Banks.
(34) FHFA related terms.--
(A) Federal housing finance agency.--The term
``Federal Housing Finance Agency'' shall mean--
(i) prior to the agency transfer date, the
Federal Housing Finance Agency established
under section 1311 of the Safety and Soundness
Act (12 U.S.C. 4511);
(ii) on and after the agency transfer date
but prior to the system certification date, the
Federal Housing Finance Agency established
within the Corporation under title IV; and
(iii) on and after the system certification
date, the Corporation.
(B) FHFA director.--The term ``FHFA Director'' has
the same meaning as the term ``Director'' in section
401(1).
(35) Federal regulatory agencies.--The term--
(A) ``Federal regulatory agency'' means,
individually, the Board of Governors of the Federal
Reserve System, the Office of the Comptroller of the
Currency, the Federal Deposit Insurance Corporation,
the Bureau of Consumer Financial Protection, the
National Credit Union Administration, the Securities
and Exchange Commission, the Commodity Futures Trading
Commission, and the Federal Housing Finance Agency; and
(B) ``Federal regulatory agencies'' means all of
the agencies referred to in subparagraph (A),
collectively.
(36) First loss position.--The term ``first loss position''
means, with regard to a covered security--
(A) either--
(i) the fully-funded position to which any
credit loss on such covered security resulting
from the nonperformance of underlying mortgage
loans will accrue and be absorbed, to the full
extent of the holder's interest in such
position; or
(ii) the guarantee provided by an approved
guarantor or approved multifamily guarantor
with respect to an eligible single-family
mortgage loan, pool of eligible single-family
mortgage loans, or a single-family covered
security or eligible multifamily mortgage loan,
pool of eligible multifamily mortgage loans, or
a multifamily covered security, as applicable;
and
(B) the position or guarantee described under
subparagraph (A), as applicable, which is required to
absorb any initial credit loss on a covered security
prior to the Corporation becoming obligated to make any
payment of insurance in accordance with this Act.
(37) HUD-approved housing counseling agency.--The term
``HUD-approved housing counseling agency'' means an agency
certified by the Secretary of Housing and Urban Development
under section 106(e) of the Housing and Urban Development Act
of 1968 (12 U.S.C. 1701x(e)).
(38) Insured depository institution.--The term ``insured
depository institution'' means--
(A) an insured depository institution, as defined
under section 3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813); and
(B) an insured credit union, as defined under
section 101 of the Federal Credit Union Act (12 U.S.C.
1752).
(39) Issuer.--For a noncovered security, the term
``issuer'' shall have the same meaning as under the Securities
Act of 1933 (15 U.S.C. 77b) and the rules and regulations
promulgated thereunder. The Platform shall not be deemed to be
an issuer of noncovered securities for purposes of the
Securities Act of 1933.
(40) Low-income.--The term ``low-income'' means--
(A) in the case of owner-occupied units, income not
in excess of 80 percent of median income of the area;
and
(B) in the case of rental units, income not in
excess of 80 percent of median income of the area, with
adjustments for smaller and larger families, as
determined by the Secretary of Housing and Urban
Development.
(41) Market participant.--The term ``market participant''
means any--
(A) approved entity;
(B) private market holder; and
(C) member of the Securitization Platform.
(42) Median income.--The term ``median income'' means, with
respect to an area, the unadjusted median family income for the
area, as determined and published annually by the Secretary of
Housing and Urban Development.
(43) Mission-based nonprofit lender.--The term ``mission-
based nonprofit lender'' means an organization that--
(A) is exempt from taxation pursuant to section
501(c)(3) of the Internal Revenue Code of 1986;
(B) makes--
(i) residential real estate loans for the
purpose of promoting or facilitating
homeownership for poor or low- or moderate-
income, disabled, or other disadvantaged
persons or families; or
(ii) real estate loans for the purpose of
promoting or facilitating affordable rental
housing for low-income persons or families and
subject to any other additional criteria
established by the Corporation;
(C) sets interest rates on such loans that--
(i) are lower than the bank prime loan
rate, as determined under the Federal Reserve
Statistical Release of selected interest rates
(commonly referred to as the ``H.15'') by the
Board of Governors of the Federal Reserve
System, for the last day of the most recent
weekly release of such rates; or
(ii) are, after adjusting for inflation,
no-interest loans or loans with interest rates
at or below the interest rates for mortgage
loans generally available in the market;
(D) except as described under subparagraph (B),
does not engage in the business of a mortgage
originator or mortgage broker;
(E) conducts its activities in a manner that serves
public or charitable purposes;
(F) receives funding and revenue and charges fees
in a manner that does not incentivize the organization
or its employees to act other than in the best
interests of its clients;
(G) compensates employees in a manner that does not
incentivize employees to act other than in the best
interests of its clients; and
(H) meets such other requirements as the
Corporation determines appropriate.
(44) Moderate-income.--The term ``moderate-income'' means
(A) in the case of owner-occupied units, income not
in excess of median income of the area; and
(B) in the case of rental units, income not in
excess of median income of the area, with adjustments
for smaller and larger families, as determined by the
Secretary of Housing and Urban Development.
(45) Mortgage aggregator.--The term ``mortgage aggregator''
means a person that--
(A) arranges, in connection with a single-family
covered security, a credit-risk sharing mechanism that
is approved by the Corporation pursuant to section 302;
(B) issues such single-family covered security
through the Securitization Platform;
(C) does not originate eligible single-family
mortgage loans; and
(D) is not affiliated with a person that actively
engages in the business of originating eligible single-
family mortgage loans.
(46) Mortgage-backed security.--The term ``mortgage-backed
security'' means an asset-backed security, as defined in
section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)), that is collateralized by--
(A) a mortgage loan, including any residential real
estate loan or commercial real estate loan; or
(B) a collateralized mortgage obligation of
mortgage-backed securities.
(47) Mortgage originator.--The term ``mortgage originator''
has the same meaning as in section 103(cc)(2) of the Truth in
Lending Act (15 U.S.C. 1602(cc)(2)).
(48) Multifamily business.--The term ``multifamily
business'' means the activities and processes of the
enterprises of--
(A) purchasing, selling, lending on the security
of, or otherwise dealing in multifamily mortgage loans;
(B) securitizing a pool of multifamily mortgage
loans; and
(C) issuing multifamily securities.
(49) Multifamily covered security.--The term ``multifamily
covered security'' means a multifamily mortgage-backed
security--
(A) collateralized by eligible multifamily mortgage
loans; and
(B) that is insured by the Corporation pursuant to
section 303.
(50) Multifamily mortgage-backed security.--The term
``multifamily mortgage-backed security'' means a mortgage-
backed security collateralized by commercial real estate loans
secured by properties with 5 or more residential units in
accordance with the requirements of this Act.
(51) Noncovered security.--The term ``noncovered security''
means any mortgage-backed security other than a covered
security.
(52) Noneligible mortgage loan.--The term ``noneligible
mortgage loan'' means any mortgage loan other than an eligible
mortgage loan.
(53) Office of finance.--The term ``Office of Finance''
means the Office of Finance in the Federal Home Loan Bank
System.
(54) Permanently affordable homeownership program.--The
term ``permanently affordable homeownership program'' includes
programs administered by community land trusts, nonprofit
organizations, or State or local governments that--
(A) use a ground lease, deed restriction,
subordinate loan, or similar legal mechanism to--
(i) make real property affordable to low-
or moderate-income borrowers; and
(ii) stipulate a preemptive option to
purchase the real property from the homeowner
at resale to preserve the affordability of the
real property for successive low- and moderate-
income borrowers;
(B) monitor properties to ensure affordability is
preserved over resales; and
(C) support homeowners to promote successful
homeownership and prevent foreclosure.
(55) Person.--The term ``person'' means an individual,
corporation, company (including a limited liability company or
joint stock company), association (incorporated or
unincorporated), mutual or cooperative organization,
partnership, trust, estate, society, or any other legal entity.
(56) Platform; securitization platform.--The terms
``Platform'' and ``Securitization Platform'' mean the
securitization infrastructure established under part I of
subtitle C of title III.
(57) Platform directors.--The term ``Platform Directors''
means the board of directors of the Securitization Platform.
(58) Platform security.--The term ``Platform security''
means a mortgage-backed security issued through the
Securitization Platform.
(59) Private label mortgage-backed securities market.--The
term ``private label mortgage-backed securities market'' means
the market in which noncovered securities are issued, bought,
and sold.
(60) Private market holder.--The term ``private market
holder'' means the holder or holders, other than an approved
guarantor or an approved multifamily guarantor, of the first
loss position with respect to eligible mortgage loans
collateralizing any covered security insured in accordance with
this Act.
(61) Regulated entity.--The term ``regulated entity''
means--
(A) the Federal National Mortgage Association and
any affiliate thereof;
(B) the Federal Home Loan Mortgage Corporation and
any affiliate thereof;
(C) any Federal Home Loan Bank; and
(D) the Securitization Platform.
(62) Residential real estate loan.--The term ``residential
real estate loan'' includes any--
(A) real estate mortgage loan;
(B) personal property loan secured solely by the
home itself;
(C) hybrid land-home loan for a manufactured home,
as defined in section 603(6) of the National
Manufactured Housing Construction and Safety Standards
Act of 1974 (42 U.S.C. 5402(6)), to which the
requirements of paragraph (29)(A)(v) shall not apply;
and
(D) mortgage loan secured by real property in a
community land trust or permanently affordable
homeownership program.
(63) Safety and soundness act.--The term ``Safety and
Soundness Act'' means the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.).
(64) Senior preferred stock purchase agreement.--The term
``Senior Preferred Stock Purchase Agreement'' means--
(A) the Amended and Restated Senior Preferred Stock
Purchase Agreement, dated September 26, 2008, as such
Agreement has been amended on May 6, 2009, December 24,
2009, and August 17, 2012, respectively, and as such
Agreement may be further amended and restated, entered
into between the Department of the Treasury and each
enterprise, as applicable; and
(B) any provision of any certificate in connection
with such Agreement creating or designating the terms,
powers, preferences, privileges, limitations, or any
other conditions of the Variable Liquidation Preference
Senior Preferred Stock of an enterprise issued or sold
pursuant to such Agreement.
(65) Single-family activities.--The term ``single-family
activities'' means the activities and processes of the
Corporation in providing insurance for single-family covered
securities as provided in this Act.
(66) Single-family covered security.--The term ``single-
family covered security'' means a single-family mortgage-backed
security--
(A) collateralized by eligible single-family
mortgage loans; and
(B) that is insured by the Corporation pursuant to
section 303.
(67) Small mortgage lender.--The term ``small mortgage
lender'' means a community bank, credit union, mid-sized bank,
non-depository institution, Community Development Financial
Institution, mission-based nonprofit lender, or housing finance
agency that originates residential real estate loans or
commercial real estate loans.
(68) Standardized covered security; standardized security
for single-family covered securities.--The terms ``standardized
covered security'' and ``standardized single-family covered
security'' mean a single-family covered security that is--
(A) issued through the Platform; and
(B) in a form, and includes the standardized and
uniform terms for the security and transaction that
have been, developed by the Platform Directors and
approved by the Corporation for use across various
issuances.
(69) Standardized noncovered security; standardized
security for single-family noncovered securities.--The terms
``standardized noncovered security'' and ``standardized single-
family noncovered security'' mean a single-family noncovered
security that is--
(A) issued through the Platform; and
(B) in a form, and includes the standardized and
uniform terms for the security and transaction that
have been, developed by the Platform Directors for use
across various issuances.
(70) State.--The term ``State'' means any State, territory,
or possession of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, the Commonwealth of the
Northern Mariana Islands, Guam, American Samoa, or the United
States Virgin Islands or any Federally recognized Indian tribe,
as defined by the Secretary of the Interior under section
104(a) of the Federally Recognized Indian Tribe List Act of
1994 (25 U.S.C. 479a-1(a)).
(71) System certification date.--The term ``system
certification date'' means the date on which the Board of
Directors certifies that the requirements of section 601 have
been met.
(72) Very low-income.--
(A) In general.--The term ``very low-income''
means--
(i) in the case of owner-occupied units,
families having incomes not greater than 50
percent of the median income of the area; and
(ii) in the case of rental units, families
having incomes not greater than 50 percent of
the median income of the area, with adjustments
for smaller and larger families, as determined
by the Secretary of Housing and Urban
Development.
(B) Rule of construction.--For purposes of the
Housing Trust Fund established under section 1338 of
the Safety and Soundness Act (12 U.S.C. 4568), the
Capital Magnet Fund established under section 1339 of
the Safety and Soundness Act (12 U.S.C. 4569), and the
Market Access Fund established under section 504, the
term ``very low-income'' means--
(i) in the case of owner-occupied units,
income in excess of 30 percent but not greater
than 50 percent of the median income of the
area; and
(ii) in the case of rental units, income in
excess of 30 percent but not greater than 50
percent of the median income of the area, with
adjustments for smaller and larger families, as
determined by the Secretary of Housing and
Urban Development.
TITLE I--ELIMINATION OF FANNIE MAE AND FREDDIE MAC
SEC. 101. ELIMINATION OF FANNIE MAE AND FREDDIE MAC.
(a) Fannie Mae.--Effective on the agency transfer date, the
Corporation shall take all steps necessary to dissolve and eliminate
the Federal National Mortgage Association pursuant to the provisions of
this Act. The charter for the Federal National Mortgage Association
shall be repealed pursuant to title VI.
(b) Freddie Mac.--Effective on the agency transfer date, the
Corporation shall take all steps necessary to dissolve and eliminate
the Federal Home Loan Mortgage Corporation pursuant to the provisions
of this Act. The charter for the Federal Home Loan Mortgage Corporation
shall be repealed pursuant to title VI.
TITLE II--FEDERAL MORTGAGE INSURANCE CORPORATION
SEC. 201. ESTABLISHMENT.
(a) Establishment.--Effective on the agency transfer date, there is
established the Federal Mortgage Insurance Corporation, which is
charged with ensuring the safety and soundness of, and compliance with
laws and regulations, fair access to financial services, and fair
treatment of customers by the institutions and other persons subject to
its jurisdiction and which shall have the powers hereinafter granted.
(b) Purpose.--The purpose of the Corporation shall be to--
(1) facilitate a liquid, transparent, and resilient single-
family and multifamily mortgage credit market by supporting a
robust secondary mortgage market, including during the
transition to the new housing finance system;
(2) provide insurance on any mortgage-backed security that
satisfies the requirements under this Act to become a covered
security;
(3) monitor and supervise approved entities to the extent
provided in this Act;
(4) supervise the regulated entities;
(5) facilitate the broad availability of mortgage credit
and secondary mortgage market financing through fluctuations in
the business cycle for eligible single-family and multifamily
lending across all--
(A) regions;
(B) localities;
(C) institutions;
(D) property types, including housing serving
renters; and
(E) eligible borrowers;
(6) ensure continued, widespread availability of an
affordable, long-term, fixed rate, prepayable mortgage, such as
a 30-year fixed rate mortgage; and
(7) preserve and maintain a liquid forward execution market
for eligible single-family mortgage loans and single-family
covered securities, such as the To-Be-Announced market.
(c) General Supervisory and Regulatory Authority.--
(1) In general.--Each approved entity shall, to the extent
provided in this Act, be subject to the supervision and
regulation of the Corporation.
(2) Regulated entities; office of finance.--The Corporation
shall have general regulatory authority over each regulated
entity and the Office of Finance, and shall exercise such
general regulatory authority to ensure that the purposes of
this Act, any amendments made by this Act, and any other
applicable law as to which the Corporation has responsibility
under this Act are carried out.
(d) Federal Status.--The Corporation shall be an independent agency
and an instrumentality of the Federal Government.
(e) Succession.--The Corporation shall have succession until
dissolved by an Act of Congress.
(f) Principal Office.--The Corporation shall maintain its principal
office in the District of Columbia and shall be deemed, for purposes of
venue in civil actions, to be a resident thereof.
(g) Authority to Establish Other Offices.--The Corporation may
establish such other offices in such other place or places as the
Corporation may deem necessary or appropriate in the conduct of its
business.
(h) Prohibition.--The Corporation shall not engage in mortgage loan
origination.
SEC. 202. MANAGEMENT OF CORPORATION.
(a) Board of Directors.--
(1) Members.--The management of the Corporation shall be
vested in a Board of Directors consisting of 5 members who
shall be appointed by the President, by and with the advice and
consent of the Senate, from among individuals who--
(A) are citizens of the United States; and
(B) have demonstrated technical, academic, or
professional understanding of, and practical,
disciplinary, vocational, or regulatory experience
working in, housing and housing finance.
(2) Political affiliation.--Not more than 3 of the members
of the Board of Directors may be members of the same political
party.
(3) Duties.--The Board of Directors shall advise the
Chairperson regarding overall strategies and policies to carry
out the duties and purposes of this Act.
(b) Chairperson and Vice Chairperson.--
(1) Chairperson.--
(A) Designation.--1 of the members appointed
pursuant to subsection (a)(1) shall be designated by
the President to serve as Chairperson of the Board of
Directors.
(B) Term.--Except as provided in subsection
(c)(1)(A), the Chairperson shall be appointed for a
term of 5 years, unless removed before the end of such
term by the President under subparagraph (C).
(C) Removal for cause.--The President may remove
the Chairperson for inefficiency, neglect of duty, or
malfeasance in office.
(D) Duties and authorities.--
(i) In general.--The Chairperson--
(I) shall--
(aa) be the active
executive officer of the
Corporation, subject to
supervision by the Board of
Directors;
(bb) oversee the prudential
operations of each regulated
entity; and
(cc) ensure that each
approved entity and regulated
entity operates in a safe and
sound manner, including--
(AA) through the
maintenance of adequate
capital, standards, and
internal controls; and
(BB) by ensuring
compliance with the
rules, regulations,
guidelines, and orders
issued pursuant to this
Act; and
(II) may exercise such incidental
powers as may be necessary or
appropriate to assist the Corporation
in fulfilling the duties and
responsibilities of the Corporation in
the supervision and regulation of each
approved entity and regulated entity.
(ii) Delegation.--The Chairperson may
delegate to officers and employees of the
Corporation any of the functions, powers, or
duties of the Chairperson, as the Chairperson
considers appropriate.
(2) Vice chairperson.--
(A) Designation.--1 of the members appointed
pursuant to subsection (a)(1) shall be designated by
the President to serve as Vice Chairperson of the Board
of Directors.
(B) Term.--Except as provided in subsection
(c)(1)(B), the Vice Chairperson shall be appointed for
a term of 5 years, unless removed before the end of
such term by the President under subparagraph (C).
(C) Removal for cause.--The President may remove
the Vice Chairperson for inefficiency, neglect of duty,
or malfeasance in office.
(3) Acting chairperson.--
(A) During vacancy in the position of
chairperson.--Except as provided in section 402, in the
event of a vacancy in the position of Chairperson of
the Board of Directors or during the absence or
disability of the Chairperson, the Vice Chairperson
shall act as Chairperson.
(B) During vacancies in the position of chairperson
and vice chairperson.--Except as provided in section
402, in the event of vacancies in the positions of
Chairperson and Vice Chairperson, or during the absence
or disability of both the Chairperson and the Vice
Chairperson, the President shall designate 1 of the
other members appointed pursuant to subsection (a)(1)
as Acting Chairperson.
(C) Retention of authority.--Any person confirmed
to serve as Chairperson, or acting as Chairperson,
whether designated to act as such by the President
under this paragraph or acting in such capacity by
operation of this paragraph or section 402, shall for
the period that such person is serving as Chairperson
or acting as Chairperson--
(i) act for all purposes as the
Chairperson; and
(ii) have all the rights, duties, powers,
and responsibilities of the Chairperson.
(c) Staggered Terms; Term Continuation.--
(1) Terms.--
(A) Term of initial chairperson.--The initial
member of the Board of Directors appointed pursuant to
subsection (a)(1) and designated as Chairperson under
subsection (b)(1) shall serve a term of 30 months.
(B) Term of initial vice chairperson.--The initial
member of the Board of Directors appointed pursuant to
subsection (a)(1) and designated as Vice Chairperson
under subsection (b)(2) shall serve a term of 30
months.
(C) Term of other appointed members.--1 of the
other initial members of the Board of Directors
appointed pursuant to subsection (a)(1) and not
designated as Chairperson or Vice Chairperson under
subsection (b) shall serve a term of 30 months and the
other 2 initial members shall serve a term of 4 years.
(D) All other terms.--After the expiration of the
initial terms under subparagraphs (A) through (C), all
subsequent members of the Board of Directors appointed
pursuant to subsection (a)(1) shall serve for a term of
5 years.
(2) Continuation of service.--Each member of the Board of
Directors appointed pursuant to subsection (a)(1), including
any member appointed to serve as Chairperson or Vice
Chairperson, may continue to serve after the expiration of the
term of office to which such member was appointed until the
expiration of the next session of Congress subsequent to the
expiration of said fixed term of office.
(d) Vacancy; Manner of Fulfillment.--Any vacancy on the Board of
Directors shall be filled in the manner in which the original
appointment was made, and the person appointed to fill such vacancy
shall be appointed only for the remainder of such term.
(e) Compensation of Members.--
(1) Chairperson.--The Chairperson shall receive
compensation at the rate prescribed for Level II of the
Executive Schedule under section 5313 of title 5, United States
Code.
(2) Other appointed members.--All members of the Board of
Directors not described in paragraph (1) shall receive
compensation at the rate prescribed for Level III of the
Executive Schedule under section 5314 of title 5, United States
Code.
(f) Ineligibility for Other Offices During Service; Postservice
Restriction.--
(1) Restrictions during service.--No member of the Board of
Directors may, during the time such member is serving in such
capacity and for the 2-year period beginning on the date such
member ceases to serve as a member of the Board of Directors--
(A) be an officer, employee, or director of any--
(i) insured depository institution;
(ii) insured depository institution holding
company;
(iii) Federal Reserve bank;
(iv) regulated entity;
(v) approved entity; or
(vi) non-bank financial institution or
company that originates eligible mortgage
loans; or
(B) hold stock or have beneficial ownership in
any--
(i) insured depository institution;
(ii) insured depository institution holding
company;
(iii) regulated entity;
(iv) approved entity; or
(v) non-bank financial institution or
company that originates eligible mortgage
loans.
(2) Certification.--Upon taking office, each member of the
Board of Directors shall certify under oath that such member
has complied, and will comply, with this subsection and such
certification shall be filed with the secretary of the Board of
Directors.
(g) Status of Directors, Officers, and Employees.--
(1) In general.--A member of the Board of Directors,
officer, or employee of the Corporation has no liability under
the Securities Act of 1933 (15 U.S.C. 77b et seq.) with respect
to any claim arising out of or resulting from any act or
omission by such person within the scope of such person's
employment in connection with any transaction involving the
disposition of assets (or any interests in any assets or any
obligations backed by any assets) by the Corporation. This
subsection shall not be construed to limit personal liability
for criminal acts or omissions, willful or malicious
misconduct, acts or omissions for private gain, or any other
acts or omissions outside the scope of such person's
employment.
(2) Effect on other law.--This subsection does not affect--
(A) any other immunities and protections that may
be available to such person under applicable law with
respect to such transactions; or
(B) any other right or remedy against the
Corporation, against the United States under applicable
law, or against any person other than a person
described in paragraph (1) participating in such
transactions.
(3) Rule of construction.--This subsection shall not be
construed to limit or alter in any way the immunities that are
available under applicable law for Federal officials and
employees not described in this subsection.
(h) Independence.--
(1) In general.--Each member of the Board of Directors
shall be independent in performing his or her duties.
(2) Independence determination.--In order to be considered
independent for purposes of this subsection, a member of the
Board of Directors--
(A) may not, other than in his or her capacity as a
member of the Board of Directors or any committee
thereof--
(i) accept any consulting, advisory, or
other compensatory fee from the Corporation; or
(ii) be a person associated with the
Corporation or with any affiliate of the
Corporation; and
(B) shall be disqualified from any deliberation
involving any transaction of the Corporation in which
the member has a financial interest in the outcome of
the transaction.
(i) Administration.--Except as may be otherwise provided in this
Act, the Board of Directors shall administer the affairs of the
Corporation fairly and impartially and without discrimination.
(j) Voting.--A majority vote of all members of the Board of
Directors is necessary to resolve all voting issues of the Corporation.
(k) Meetings.--The Board of Directors shall meet in accordance with
the bylaws of the Corporation--
(1) at the call of the Chairperson; and
(2) not less frequently than once each quarter.
(l) Quorum.--3 members of the Board of Directors then in office
shall constitute a quorum.
(m) Bylaws.--A majority of the members of the Board of Directors
may amend the bylaws of the Corporation.
SEC. 203. ADVISORY COMMITTEE.
(a) Establishment.--
(1) In general.--The Corporation shall establish an
Advisory Committee for the purpose of advising the Office of
Consumer and Market Access and the Board of Directors on
developments in the primary and secondary mortgage markets that
have material effects on the ongoing mission of the
Corporation.
(2) Duties.--The Advisory Committee shall provide advice
and recommendations to the Office of Consumer and Market Access
and the Board of Directors as to material developments in the
following areas:
(A) Housing prices and affordability.
(B) The effectiveness of consumer protections in
the housing market.
(C) Volume and characteristics of eligible mortgage
loan originations.
(D) The condition of the rental housing market.
(E) Small lender participation in the secondary
mortgage market.
(F) Access to credit in rural and underserved
communities.
(G) Competition among approved entities.
(H) Fair, equitable, and nondiscriminatory access
to mortgage credit for individuals and communities.
(b) Composition and Qualifications.--
(1) In general.--The Advisory Committee shall be composed
of 14 members as follows:
(A) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
and practical, disciplinary, vocational, or regulatory
experience working with, non-depository mortgage
originators having less than $10,000,000,000 in total
assets.
(B) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
and practical, disciplinary, vocational, or regulatory
experience working with, credit unions having less than
$10,000,000,000 in total assets.
(C) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
and practical, disciplinary, vocational, or regulatory
experience working with, banks having less than
$10,000,000,000 in total assets.
(D) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
and practical, disciplinary, vocational, or regulatory
experience working with, banks having more than
$500,000,000,000 in total assets.
(E) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
and practical, disciplinary, vocation, or regulatory
experience working with, regional banks having more
than $10,000,000,000 and less than $500,000,000,000 in
total assets.
(F) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
and practical, disciplinary, vocational, or regulatory
experience with private mortgage insurance.
(G) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
and practical, disciplinary, vocational, or regulatory
experience with securitization.
(H) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
and practical, disciplinary, vocational, or regulatory
experience with investor protection and institutional
investors.
(I) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
or practical, disciplinary, or vocational experience
with consumer protection.
(J) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
or practical, disciplinary, or vocational experience
with policies and programs to support sustainable
homeownership.
(K) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
or practical, disciplinary, or vocational experience
with multifamily housing development.
(L) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
or practical, disciplinary, or vocational experience
with affordable rental housing.
(M) 1 member who shall have a demonstrated
technical, academic, or professional understanding of,
or practical, disciplinary, or vocational experience
with asset management.
(N) 1 member who shall have a demonstrated
professional understanding of and vocational experience
with State bank, non-bank, or insurance regulation.
(2) Experience with rural housing.--Of the members of the
Advisory Committee identified under subparagraphs (B) and (C)
of paragraph (1), at least 1 shall be required to have
practical, disciplinary, or vocational experience working in
rural areas and with rural borrowers.
(3) Experience with fair lending.--Of the members of the
Advisory Committee identified under paragraph (1), at least 1
shall be required to have demonstrated practical, academic,
disciplinary, or vocational experience with fair lending
practices and policies and programs that promote fair,
equitable, and nondiscriminatory access to credit in
underserved markets.
(c) Member Selection.--Members of the Advisory Committee shall be
appointed to the Committee by the Chairperson, subject to approval by a
majority of the Board of Directors.
(d) Meetings.--The Advisory Committee shall meet no less frequently
than once during each calendar quarter.
SEC. 204. OFFICE OF THE INSPECTOR GENERAL.
(a) Office of Inspector General.--
(1) Establishment.--On the agency transfer date, there is
established the Office of the Inspector General of the Federal
Mortgage Insurance Corporation.
(2) Head of office.--
(A) In general.--The head of the Office of the
Inspector General of the Federal Mortgage Insurance
Corporation shall be the Inspector General of the
Federal Mortgage Insurance Corporation, who shall be
appointed by the President, by and with the advice and
consent of the Senate, in accordance with section 3(a)
of the Inspector General Act of 1978 (5 U.S.C. App.).
(B) Transitional provision.--Notwithstanding
subparagraph (A), during the period beginning on the
agency transfer date and ending on the date on which
the Inspector General of the Federal Mortgage Insurance
Corporation is confirmed, the person serving as the
Inspector General or the Acting Inspector General for
the Office of the Inspector General within the Federal
Housing Finance Agency on the date that is 1 day prior
to the agency transfer date shall act for all purposes
as, and with the full powers of, the Inspector General
of the Federal Mortgage Insurance Corporation.
(3) Office of the inspector general authorities.--Beginning
on the agency transfer date, the authority of the Office of the
Inspector General of the Federal Mortgage Insurance Corporation
shall include all rights and responsibilities of the Office of
the Inspector General of the Federal Housing Finance Agency as
such rights and responsibilities existed on the date that is 1
day prior to the agency transfer date.
(b) Provision of Property and Facilities.--The Chairperson shall
provide the Office of the Inspector General of the Federal Mortgage
Insurance Corporation with--
(1) appropriate and adequate office space at each central
and field office location established by the Corporation,
together with such equipment, office supplies, and
communications facilities and services as may be necessary for
the Inspector General of the Federal Mortgage Insurance
Corporation to operate such offices; and
(2) the necessary maintenance services for--
(A) any office provided under paragraph (1); and
(B) the equipment and facilities located in any
such office.
(c) Hiring of Employees, Experts, and Consultants.--Notwithstanding
paragraphs (7) and (8) of section 6(a) of the Inspector General Act of
1978 (5 U.S.C. App.), the Inspector General of the Federal Mortgage
Insurance Corporation may select, appoint, and employ such officers and
employees as may be necessary--
(1) for carrying out the functions, powers, and duties of
the Office of the Inspector General; and
(2) to obtain the temporary or intermittent services of
experts or consultants or an organization of experts or
consultants, subject to the applicable laws and regulations
that govern such selections, appointments, and employment, and
the obtaining of such services, within the Corporation.
(d) Submission of Budget.--
(1) In general.--For each fiscal year, the Inspector
General of the Federal Mortgage Insurance Corporation shall
transmit a budget estimate and request for funds to the
Chairperson.
(2) Required content.--The budget request required under
paragraph (1) shall--
(A) specify--
(i) the aggregate amount of funds requested
for such fiscal year for the operations of the
Office of the Inspector General of the Federal
Mortgage Insurance Corporation; and
(ii) the amount requested for all training
needs, including a certification from the
Inspector General that the amount requested
satisfies all training requirements for the
Office of the Inspector General of the Federal
Mortgage Insurance Corporation for that fiscal
year; and
(B) specifically--
(i) identify and specify any resources
necessary to support the Council of the
Inspectors General on Integrity and Efficiency;
and
(ii) justify the need for any resources
identified and specified under clause (i).
(e) Amendments to Inspector General Act of 1978.--The Inspector
General Act of 1978 (5 U.S.C. App.) is amended--
(1) in section 6(e)(3), by inserting ``Federal Mortgage
Insurance Corporation'' after ``Federal Emergency Management
Agency'';
(2) in section 8G(a)(2), by striking ``the Federal Housing
Finance Board''; and
(3) in section 12--
(A) in paragraph (1), by striking ``Director of the
Federal Housing Finance Agency'' and inserting
``Chairperson of the Federal Mortgage Insurance
Corporation''; and
(B) in paragraph (2), by striking ``Federal Housing
Finance Agency'' and inserting ``Federal Mortgage
Insurance Corporation''.
(f) Effective Date.--The amendments made by this section shall take
effect on the agency transfer date.
SEC. 205. STAFF, EXPERTS, AND CONSULTANTS.
(a) Compensation.--
(1) In general.--The Board of Directors may appoint and fix
the compensation of such officers, attorneys, economists,
examiners, and other employees as may be necessary for carrying
out the functions of the Corporation.
(2) Rates of pay.--Rates of basic pay and the total amount
of compensation and benefits for all employees of the
Corporation may be--
(A) set and adjusted by the Board of Directors
without regard to the provisions of chapter 51 or
subchapter III of chapter 53 of title 5, United States
Code; and
(B) reasonably increased, notwithstanding any
limitation set forth in paragraph (3), if the Board of
Directors determines such increases are necessary to
attract and hire qualified employees.
(3) Parity.--The Board of Directors may provide additional
compensation and benefits to employees of the Corporation, of
the same type of compensation or benefits that are then being
provided by any agency referred to under section 1206 of the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 1833b) or, if not then being provided, could be
provided by such an agency under applicable provisions of law,
rule, or regulation. In setting and adjusting the total amount
of compensation and benefits for employees, the Board of
Directors shall consult with and seek to maintain comparability
with the agencies referred to under section 1206 of the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 1833b).
(b) Detail of Government Employees.--Upon the request of the Board
of Directors, any Federal Government employee may be detailed to the
Corporation without reimbursement from the Corporation, and such detail
shall be without interruption or loss of civil service status or
privilege.
(c) Experts and Consultants.--The Corporation may procure the
services of experts and consultants as the Corporation considers
necessary or appropriate.
(d) Technical and Professional Advisory Committees.--The Board of
Directors may appoint such special advisory, technical, or professional
committees as may be useful in carrying out the functions of the
Corporation.
SEC. 206. REPORTS; TESTIMONY; AUDITS.
(a) Reports.--
(1) In general.--After the system certification date, the
Corporation shall submit, on an annual basis, to the Committee
on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives
a written report of its operations, activities, budget,
receipts, and expenditures for the preceding 12-month period.
(2) Contents of report.--The report required under
subsection (a) shall include--
(A) an analysis of--
(i) with respect to the Mortgage Insurance
Fund established under section 303(e)--
(I) the current financial condition
of the Mortgage Insurance Fund;
(II) the exposure of the Mortgage
Insurance Fund to economic conditions
and an analysis of any stress tests
conducted with respect to the Fund;
(III) an estimate of the resources
needed for the Mortgage Insurance Fund
to achieve the purposes of this Act;
and
(IV) any findings, conclusions, and
recommendations for legislative and
administrative actions considered
appropriate to the future activities of
the Corporation;
(ii) whether or not the actual reserve
ratio of the Mortgage Insurance Fund met--
(I) the reserve ratio set for the
preceding 12-month period; or
(II) the reserve ratio goals
established in section 303(e)(7);
(iii) the detailed plan of the Corporation
to ensure that the goals set for the reserve
ratio for the Mortgage Insurance Fund are met
and maintained for the next 12-month period;
(iv) the state of the private label
mortgage-backed securities market, including
the submission of a reasonable set of
administrative, regulatory, and legislative
proposals on how to limit the Federal
Government's footprint in the secondary
mortgage market;
(v) how and the extent to which the
Corporation and the Small Lender Mutual
established under section 315(a)(1) has
fulfilled its obligations to ensure that
community and mid-size banks, credit unions,
and other small lenders have equitable and
meaningful access to the secondary mortgage
market; and
(vi) the report required under section
208(b)(2)(B);
(B) a discussion of the significant problems faced
by consumers in shopping for or obtaining mortgage
credit or services;
(C) a justification of the Corporation's budget for
the preceding 12-month period;
(D) a list of the significant rules and orders
adopted by the Corporation, as well as other
significant initiatives conducted by the Corporation,
during the preceding 12-month period and the plan of
the Corporation for rules, orders, or other initiatives
to be undertaken during the next 12-month period;
(E) a list, with a brief statement of the issues,
of the public supervisory and enforcement actions to
which the Corporation was a party during the preceding
12-month period;
(F) the actions of the Corporation taken regarding
rules, orders, and supervisory actions with respect to
covered entities; and
(G) an assessment of significant actions by State
attorneys general or State regulators relating to
Federal law within the Corporation's jurisdiction.
(b) Testimony.--After the system certification date, the
Chairperson shall appear annually before the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives to provide testimony on the
report submitted under subsection (a).
(c) Reports to the Office of Management and Budget.--
(1) Financial operating plans and forecasts.--The
Corporation shall provide to the Director of the Office of
Management and Budget copies of the--
(A) Corporation's financial operating plans and
forecasts as prepared by the Corporation in the
ordinary course of its operations; and
(B) quarterly reports of the Corporation's
financial condition and results of operations as
prepared by the Corporation in the ordinary course of
its operations.
(2) Rule of construction.--This subsection shall not be
construed to--
(A) require any obligation on the part of the
Corporation to consult with, or obtain the consent or
approval of, the Director of the Office of Management
and Budget with respect to any reports, plans,
forecasts, or other information referred to in
paragraph (1); or
(B) authorize any jurisdiction or oversight by the
Director of the Office of Management and Budget over
the affairs or operations of the Corporation.
(d) Audit.--
(1) Annual audit.--The Comptroller General of the United
States shall annually audit--
(A) the financial transactions of the Corporation;
and
(B) the Mortgage Insurance Fund.
(2) Auditing standards.--The audit required under this
subsection shall be completed in accordance with the United
States generally accepted government auditing standards as may
be prescribed by the Comptroller General.
(3) Place of audit.--The audit required under this
subsection shall be conducted at the place or places where
accounts of the Corporation are normally kept.
(4) Access.--Notwithstanding any other provision of law,
upon request and in such reasonable form as the Comptroller
General may request, the Comptroller General shall have access
to--
(A) any records, books, accounts, documents,
reports, files, papers, property, or other information
under the control of or used by the Corporation;
(B) any records or other information under the
control of a person or entity acting on behalf of or
under the authority of the Corporation, to the extent
that such records or other information are relevant to
an audit required under this subsection; and
(C) the officers, directors, employees, financial
advisors, staff, working groups, and agents and
representatives of the Corporation (relating to the
activities on behalf of the Corporation of such agent
or representative).
(5) Rule of construction.--All records, books, accounts,
documents, reports, files, papers, property, or other
information referred to in paragraph (4) shall remain in the
possession and custody of the Corporation.
(6) Copies.--The Comptroller General may, as the
Comptroller General considers appropriate, make and retain
copies of the records, books, accounts, documents, reports,
files, papers, property, or other information to which the
Comptroller General is granted access under paragraph (3).
(7) Report.--
(A) Submission to congress.--The Comptroller
General shall submit to Congress a report of each
annual audit conducted under this subsection not later
than six and one-half months following the close of the
year covered by such audit.
(B) Required content.--The report required under
subparagraph (A) shall--
(i) set forth the scope of the audit; and
(ii) include--
(I) the statement of assets and
liabilities, as well as any surplus or
deficit;
(II) the statement of income and
expenses;
(III) the statement of sources and
application of funds;
(IV) such comments and information
as the Comptroller General may deem
necessary to inform Congress of the
financial operations and condition of
the Corporation and the Mortgage
Insurance Fund, together with such
recommendations with respect thereto as
the Comptroller General may deem
advisable; and
(V) a description of any program,
expenditure, or other financial
transaction or undertaking observed in
the course of the audit, which, in the
opinion of the Comptroller General, has
been carried on or made without
authority of law.
(C) Copies.--A copy of each report required under
subparagraph (A) shall be furnished to the President
and to the Chairperson at the time such report is
submitted to Congress.
(8) Assistance and costs.--
(A) Permitted use of outside assistance.--For the
purpose of conducting an audit under this subsection,
the Comptroller General may employ by contract, without
regard to section 3709 of the Revised Statutes of the
United States (41 U.S.C. 6101), professional services
of firms and organizations of certified public
accountants for temporary periods or for special
purposes.
(B) Cost of audit covered by corporation.--
(i) In general.--Upon the request of the
Comptroller General, the Chairperson shall
transfer to the Comptroller General from funds
available the amount requested by the
Comptroller General to cover the reasonable
costs of any audit and report conducted by the
Comptroller General pursuant to this
subsection.
(ii) Credit of funds.--The Comptroller
General shall credit funds transferred under
clause (i) to the account at the United States
Treasury established for salaries and expenses
of the Government Accountability Office, and
such amounts shall be available upon receipt
and without fiscal year limitation to cover the
full costs of the audit and report.
SEC. 207. SPECIFIC OFFICES.
(a) Establishment.--
(1) General authority.--The Corporation--
(A) shall establish within the Corporation any
office required to be established by this Act;
(B) may establish such other offices or suboffices
as are necessary and proper for the functioning of the
Corporation; and
(C) may eliminate or consolidate any office or
suboffice established under subparagraph (B).
(2) Appointments.--Except as may otherwise be specifically
provided, the head of any office established pursuant to
paragraph (1) shall be appointed by the Board of Directors.
(b) Underwriting.--The Corporation shall establish an Office of
Underwriting in the Corporation, whose functions shall include ensuring
that eligible single-family mortgage loans that collateralize single-
family covered securities insured under this Act comply with the
requirements of this Act and minimize risk to the Mortgage Insurance
Fund.
(c) Securitization.--The Corporation shall establish an Office of
Securitization in the Corporation, whose functions shall include--
(1) overseeing and supervising the Securitization Platform
established under part I of subtitle C of title III; and
(2) ensuring that small mortgage lenders have equitable
access to--
(A) the Securitization Platform, including through
the development and facilitation of options such as
multi-guarantor pools and multi-lender pools of
eligible single-family mortgage loans to be securitized
and issued as single-family covered securities through
such Platform; and
(B) any small lender mutual established or approved
under section 315.
(d) Federal Home Loan Banks.--
(1) In general.--Upon the system certification date, the
Corporation shall establish an Office of Federal Home Loan Bank
Supervision in the Corporation, whose functions shall include--
(A) overseeing, coordinating, and supervising the
Federal Home Loan Banks and the Federal Home Loan Bank
System;
(B) supervising any authorized subsidiary of 1 or
more Federal Home Loan Banks that is an approved
aggregator pursuant to section 312(m), including with
respect to the capitalization of any such subsidiary;
(C) serving as the central point of coordination
within the Corporation with respect to any regulations
or regulatory actions relating to the role of a Federal
Home Loan Bank, or subsidiary or joint office thereof,
as a covered entity; and
(D) monitoring whether any regulation or regulatory
action taken with respect to a Federal Home Loan Bank,
or subsidiary or joint office thereof, approved under
section 312 in its role as a covered entity does not
adversely impact the traditional liquidity and advance
mission of the Federal Home Loan Banks and Federal Home
Loan Bank System.
(2) Transfer of functions.--Effective on the system
certification date, there are transferred to the Office of
Federal Home Loan Bank Supervision in the Corporation all
functions of the Federal Housing Finance Agency of the
Corporation relating to--
(A) the supervision of the Federal Home Loan Banks
and the Federal Home Loan Bank System; and
(B) all rulemaking authority of the Federal Housing
Finance Agency of the Corporation relating to the
Federal Home Loan Banks and the Federal Home Loan Bank
System.
SEC. 208. OFFICE OF CONSUMER AND MARKET ACCESS.
(a) Establishment.--The Corporation shall establish an Office of
Consumer and Market Access in the Corporation, whose functions shall
include the responsibilities set forth under subsection (b).
(b) Responsibilities.--
(1) Administering the market access fund.--The Office of
Consumer and Market Access shall administer the Market Access
Fund established under section 504.
(2) Monitoring, coordinating, and facilitating the needs of
underserved markets.--
(A) In general.--The Office of Consumer and Market
Access shall--
(i) monitor, on a macro level, the
national, regional, and area single-family and
multifamily housing finance markets to identify
underserved markets, communities, and consumers
in accordance with the market segments
identified and defined under section 210;
(ii) coordinate with Federal and State
agencies regarding existing policies and
initiatives that address--
(I) the housing needs of
underserved markets, communities, and
consumers; and
(II) the affordable housing needs
of markets, communities, and consumers;
and
(iii) provide information on business
practices and technical assistance to market
participants regarding communities identified
as underserved with regards to addressing the
housing needs of consumers in that community.
(B) Annual state of covered securities market
report.--
(i) In general.--The Office of Consumer and
Market Access shall, on an annual basis, submit
a report to Congress on the state of the
covered securities market, and make such report
available to the public.
(ii) Required content.--The report required
under clause (i) shall include--
(I) an assessment of the extent to
which the covered securities market is
providing liquidity to eligible
borrowers in all segments of the
mortgage origination primary market,
including underserved segments
identified and defined by the
Corporation under section 210; and
(II) recommendations for such
legislative, regulatory, or
administrative actions as may be
necessary to address any deficiencies
in the availability of mortgage credit
in any market or region identified
pursuant to clause (i) via existing
Federal programs or the covered
securities market.
(iii) Reliance on public data.--In
preparing each report required under this
subparagraph, the Office of Consumer and Market
Access--
(I) shall use, to the maximum
extent practicable, publicly available
data and data otherwise collected under
this Act; and
(II) shall not include or review
any confidential information or
information collected by the
Corporation as part of its supervisory
or examination authorities that is
confidential.
(C) Incentive study.--The Office of Consumer and
Market Access shall, on a biennial basis, conduct a
study on incentives to encourage mortgage lenders and
mortgage originators to address the housing needs of
underserved markets and communities.
(D) Inclusion in annual report.--The Corporation
shall include the report required in subparagraph (B)
and the study required in subparagraph (C) in the
annual report required under section 206.
(E) Consultation.--The Office of Consumer and
Market Access shall consult with the Federal Home Loan
Banks and any small lender mutual established or
approved under section 315 on approaches, methods, and
practices designed to address the housing needs of
underserved markets and communities.
SEC. 209. OFFICE OF MULTIFAMILY HOUSING.
The Corporation shall establish an Office of Multifamily Housing in
the Corporation, whose functions shall include--
(1) developing, adopting, and publishing specific
eligibility criteria to ensure that eligible multifamily
mortgage loans that collateralize multifamily covered
securities insured under this Act comply with the requirements
of this Act; and
(2) performing any other activity relating to the
multifamily housing finance system that the Corporation may
determine appropriate to fulfill the requirements of this Act.
SEC. 210. EQUITABLE ACCESS FOR LENDERS AND BORROWERS.
(a) Equitable Access in Underserved Market Segments.--
(1) In general.--Subject to subsection (b), the Corporation
shall seek to support the primary mortgage market for eligible
mortgage loans on an equitable, nondiscriminatory, and non-
exclusionary basis to help ensure that all eligible borrowers
have access to mortgage credit, including underserved segments
of the primary mortgage market as identified and defined by the
Corporation under paragraph (2).
(2) Underserved market segments.--The Corporation shall, by
regulation, identify and define not more than 8 segments of the
primary mortgage market in which lenders and eligible borrowers
have been determined to lack equitable access to the housing
finance system facilitated by the Corporation. The regulation
required under this paragraph shall set forth the criteria by
which the Corporation identified such underserved market
segments. The identified underserved market segments required
to be identified and defined under this paragraph may include
the following:
(A) Historically underserved communities, including
rural and urban areas.
(B) Manufactured housing.
(C) Small balance loans.
(D) Low- and moderate-income creditworthy
borrowers.
(E) Preservation of existing housing stock created
by State or Federal laws.
(F) Affordable rental housing.
(3) Reports on serving underserved market segments.--
(A) Annual reports.--The Corporation shall require
that each approved guarantor and approved aggregator
engaged in a covered guarantee transaction or in a
covered market-based risk-sharing transaction submit on
annual basis a public report describing the actions
taken by such approved guarantor or approved aggregator
during the year, consistent with its business judgment,
to provide credit to the underserved market segments
identified and defined by the Corporation pursuant to
this subsection, including corporate practices designed
to serve such identified market segments. The annual
report required under this subparagraph shall be
approved by the board of directors and signed by the
chief executive officer of the approved guarantor or
approved aggregator submitting the report.
(B) Report template.--The Corporation may establish
an optional template for the annual report required
under subparagraph (A).
(C) Report not subject to prior review or
approval.--An annual report required under subparagraph
(A) shall not be subject to prior review or approval by
the Corporation.
(D) Coordination with other federal and state
agencies.--The Corporation shall, in establishing the
requirements for the annual report required under
subparagraph (A), coordinate with other Federal and
State agencies, as necessary, to reduce duplicative
reporting requirements.
(b) Limitations.--
(1) Limitation on use of authorities and information.--In
carrying out this title, the Corporation shall not interfere
with the exercise of business judgment of an approved
aggregator or approved guarantor in determining which specific
mortgage loans to include in a covered guarantee transaction or
a covered market-based risk-sharing transaction, including
through the Corporation's use of--
(A) the approval process for a guarantor or an
aggregator established under subtitle B of title III;
(B) its general supervisory and examination
authorities under subtitle B of title III; or
(C) information collected under this section,
section 501, or section 208.
(2) Rule of construction.--Nothing in this subsection shall
prevent the imposition of the variable incentive-based fees
authorized in section 501 nor shall it exempt covered entities
from compliance with the Fair Housing Act (42 U.S.C. 3601 et
seq.) and the Equal Credit Opportunity Act (15 U.S.C. 1691 et
seq.) as required in section 408(d).
(3) Consistency with safety and soundness.--The Corporation
shall take appropriate measures designed to ensure that the
requirements under this section are implemented in a manner
consistent with safety and soundness principles.
SEC. 211. OFFICE OF TAXPAYER PROTECTION.
(a) Establishment.--The Corporation shall establish an Office of
Taxpayer Protection whose functions shall include the responsibilities
set forth under subsection (b).
(b) Responsibilities.--
(1) Study on market concentration and the impact of the
fmic guarantee.--The Office of Taxpayer Protection shall, on a
semi-annual basis, conduct a study and submit to the Committee
on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives
a report on--
(A) market concentration in the secondary mortgage
markets, including the exposure of the Mortgage
Insurance Fund to the top 10 largest approved
aggregators and approved guarantors, as measured by the
total outstanding principal balance at origination of
eligible single-family mortgage loans collateralizing
single-family covered securities for which such
aggregator or guarantor has obtained insurance provided
under this Act in the previous 6 months;
(B) the general state of underwriting standards in
the origination of eligible single-family mortgage
loans and the effect of insurance provided under this
Act on such underwriting standards;
(C) whether the insurance provided under this Act
produces a subsidy to any approved entity or approved
entities;
(D) a comparison of the treatment in the secondary
mortgage markets of mortgage-backed securities
guaranteed by the Government National Mortgage
Association and single-family covered securities
insured under this Act, which shall include--
(i) a discussion of the characteristics
of--
(I) mortgage loans collateralizing
mortgage-backed securities guaranteed
by the Government National Mortgage
Association; and
(II) eligible single-family
mortgage loans collateralizing single-
family covered securities insured under
this Act; and
(ii) an analysis of any actions taken in
the secondary mortgage markets to manipulate
the guarantee provided by the Government
National Mortgage Association and the insurance
provided under this Act to the advantage of the
secondary mortgage markets; and
(E) what steps the Corporation has taken to
minimize any potential long-term costs to the taxpayers
and the Mortgage Insurance Fund relating to risks
identified in subparagraphs (A) through (D).
(2) Annual report on taxpayer protection and the exposure
of the mortgage insurance fund.--
(A) In general.--The Office of Taxpayer Protection
shall, on an annual basis, 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 containing the information
required under subparagraph (B).
(B) Required content.--The report required under
subparagraph (A) shall--
(i) include an analysis of the adequacy
of--
(I) the first loss position
required under this Act, including the
sufficiency of any permissible risk-
sharing or risk mitigation permitted as
a substitute for equity capital
intended to cover the initial credit
losses on a covered security prior to
use of any amounts in the Mortgage
Insurance Fund, the ability of the
first loss position to absorb credit
loss on covered securities, and to
protect taxpayers; and
(II) the performance of eligible
single-family mortgage loans
collateralizing single-family covered
securities insured under this Act based
upon current underwriting standards and
how that performance differs from the
performance of noneligible mortgage
loans based upon the underwriting
standards for such noneligible mortgage
loans, including with respect to--
(aa) debt to income ratio;
(bb) loan to value ratios;
(cc) credit history;
(dd) loan documentation;
(ee) occupancy status;
(ff) credit enhancements;
(gg) housing counseling by
a HUD-approved housing
counseling agency;
(hh) loan payments;
(ii) the purpose of the
loan, such as to refinance or
purchase a home;
(jj) the type of loan
product, such as a 30-year
fixed interest rate mortgage
loan, a 15-year fixed interest
rate mortgage loan, or an
adjustable interest rate
mortgage loan;
(kk) the mortgage loan
origination channel; and
(ll) such other
underwriting criteria that
would be useful to the Director
of Taxpayer Protection; and
(ii) provide recommendations for such
legislative, regulatory, or administrative
actions to--
(I) address any need to further
limit overexposure of the Mortgage
Insurance Fund to any 1 approved entity
or business practice;
(II) foster and encourage a robust
private secondary mortgage market for
noneligible mortgage loans and
mortgage-backed securities that are not
guaranteed by the Government National
Mortgage Association; and
(III) assist the Corporation in
protecting taxpayers, including a
recommendation as to whether a counter-
cyclical increase of the reserve ratio
of the Mortgage Insurance Fund or of
the capital standards required of
individual approved guarantors is
necessary to protect taxpayers.
(3) Annual report on system-wide leverage.--The Office of
Taxpayer Protection shall, on an annual basis, submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives a report on system-wide leverage in the
secondary mortgage market.
(4) Annual report on early payment defaults.--The Office of
Taxpayer Protection shall, on an annual basis, submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives a report on early payment defaults on eligible
single-family mortgage loans for the preceding year, which
shall include any eligible single-family mortgage loan that
becomes delinquent or that is in default within 24 months of
the origination of the loan.
(5) Inclusion in annual report.--The Corporation shall
include the reports required under paragraphs (2) and (3) in
the annual report required under section 206.
(6) Reliance on public data.--In preparing each report
required under this section, the Office of Taxpayer
Protection--
(A) shall use, to the maximum extent practicable,
publicly available data and data otherwise collected
under this Act; and
(B) shall not include or review any confidential
information or information collected by the Corporation
as part of its supervisory or examination authorities
that is confidential.
TITLE III--DUTIES AND RESPONSIBILITIES OF THE FMIC
Subtitle A--Duties and Authorities
SEC. 301. DUTIES AND RESPONSIBILITIES.
(a) Duties.--The principal duties of the Corporation shall be to--
(1) carry out this Act in a manner that fulfills the
purposes of the Corporation as described in section 201(b);
(2) minimize any potential long-term cost to the taxpayer,
including through the use of the Mortgage Insurance Fund, the
assessment of insurance fees, and the approval of approved
entities and credit risk-sharing mechanisms;
(3) facilitate fair access to the secondary mortgage market
for small mortgage lenders originating eligible single-family
and multifamily mortgage loans, including through the
establishment, approval, and oversight of small lender mutuals;
(4) ensure integrity and discipline in the mortgage market,
particularly by monitoring the safety and soundness of
regulated entities and approved entities;
(5) ensure that approved entities maintain the capacity to
further the requirements of the Corporation pursuant to section
201(b)(5) and that approved guarantors, approved multifamily
guarantors, and approved aggregators are in compliance with
section 210(a)(3);
(6) promote the standardization of the secondary mortgage
market through the use of uniform securitization agreements,
servicing agreements, and the Securitization Platform;
(7) increase transparency in single-family and multifamily
mortgage markets, including through the National Mortgage
Database; and
(8) ensure continued, widespread availability of an
affordable, long-term, fixed rate, prepayable mortgage, such as
a 30-year fixed rate mortgage.
(b) Scope of Authority.--The authority of the Corporation shall
include the authority to exercise such incidental powers as may be
necessary or appropriate to fulfill the duties and responsibilities of
the Corporation set forth in this Act.
(c) Delegation of Authority.--The Board of Directors may delegate
to any duly authorized employee or representative any power vested in
the Corporation by law.
SEC. 302. STANDARDS FOR CREDIT RISK-SHARING MECHANISMS.
(a) Approval.--
(1) Authority.--The Corporation shall develop, adopt, and
publish, after notice and comment, standards for the
consideration and, as appropriate, the approval of credit risk-
sharing mechanisms that shall require that the first loss
position of private market holders on single-family covered
securities is--
(A) adequate to cover losses that might be incurred
in a period of economic stress, including national and
regional home price declines, such as those observed
during moderate to severe recessions in the United
States; and
(B) not less than 10 percent of the principal or
face value of the single-family covered security at the
time of issuance.
(2) Fraud prohibition.--
(A) Prohibition.--It shall be unlawful for any
person to intentionally create and issue any instrument
or security as a first loss position on a single-family
covered security that such person knows or in the
exercise of reasonable care should have known does not
satisfy the requirements of this section.
(B) Penalty.--Violations of subparagraph (A) shall
be punishable in accordance with section 1343 of title
18, United States Code.
(b) Approval of Credit Risk-sharing Mechanisms.--
(1) Considerations for approval of various mechanisms.--In
approving credit risk-sharing mechanisms under subsection (a),
the Corporation shall--
(A) consider proposals that include credit-linked
structures or other instruments that are designed to
absorb credit losses on single-family covered
securities;
(B) consider any credit risk-sharing mechanisms
undertaken by the enterprises;
(C) ensure that the first loss position is fully
funded to meet the requirements of subsection
(a)(1)(B);
(D) ensure that each type of proposed mechanism--
(i) enables the Corporation to verify that
the first loss position is fully funded;
(ii) minimizes any potential long-term cost
to the taxpayer;
(iii) accommodates the availability of
mortgage credit on equal and transparent terms
in the secondary mortgage market for--
(I) small mortgage lenders; and
(II) lenders from all geographic
locations, including rural locations;
(iv) allows for broad availability of
mortgage credit and secondary mortgage market
financing through fluctuations in the business
cycle for eligible single-family lending across
all--
(I) regions;
(II) localities;
(III) institutions;
(IV) property types, including
housing serving renters; and
(V) eligible borrowers;
(v) fulfills the requirements under section
314 with respect to loan modifications and
foreclosure prevention;
(vi) does not prevent the securitization of
refinanced or modified eligible single-family
mortgage loans within single-family covered
securities during a period when the authority
under section 305(i) is exercised;
(vii) does not diminish market liquidity
and resiliency;
(viii) does not prevent the refinancing of
underwater eligible single-family mortgage
loans; and
(ix) does not present an unnecessary risk
to the Mortgage Insurance Fund;
(E) consider whether the approval of any credit
risk-sharing mechanism will impair the operation and
liquidity of forward market executions for eligible
single-family mortgage loans and single-family covered
securities, such as the To-Be-Announced market, taking
into consideration other risk-sharing options available
to market participants; and
(F) take necessary steps to prevent abuse and
deceptive practices in the use of the credit risk-
sharing mechanisms, including by--
(i) creating appropriate standards relating
to--
(I) the vintages or categories of
covered securities that are referenced
by a credit risk-sharing mechanism;
(II) standardization of the terms
and features of credit risk-sharing
structures; and
(III) measures that prevent the
duplicative sale by a guarantor of the
same mortgage credit risk in the same
pool of eligible single-family mortgage
loans; and
(ii) requiring additional disclosures and
affirmative representations that must be made
by entities that create and issue credit risk-
sharing mechanisms.
(2) Notice and publication.--The Corporation shall--
(A) provide prompt notice to any person seeking
approval for a credit risk-sharing mechanism of the
approval or denial of that credit risk-sharing
mechanism; and
(B) make available detailed information regarding
approved mechanisms on the website of the Corporation.
(3) Review of approved credit risk-sharing mechanisms.--
(A) Authority to suspend.--The Corporation may,
from time to time and in its discretion--
(i) conduct reviews of approved credit
risk-sharing mechanisms to determine whether
such credit risk-sharing mechanisms continue to
satisfy the considerations for approval under
paragraph (1);
(ii) assess the functioning of the forward
market for eligible single-family mortgage
loans and single-family covered securities,
including the To-Be-Announced market, to
determine whether any approved credit risk-
sharing mechanism has adversely affected the
liquidity or resiliency of such market; and
(iii) suspend the approval of--
(I) any credit risk-sharing
mechanism that it determines does not
satisfy the considerations for approval
under paragraph (1); or
(II) any credit risk-sharing
mechanism that it determines has
adversely affected the liquidity or
resiliency of the forward market for
eligible single-family mortgage loans
and single-family covered securities,
including the To-Be-Announced market.
(B) Reconsideration.--
(i) Development of expedited process.--The
Corporation shall develop an expedited process
for the reinstatement of the approval of any
credit risk-sharing mechanism that is suspended
under subparagraph (A)(iii).
(ii) Revision of mechanism.--If a credit
risk-sharing mechanism is suspended under
subparagraph (A)(iii), the credit risk-sharing
mechanism may be adapted or revised, as
necessary, for reconsideration for
reinstatement of the approval of the credit
risk-sharing mechanism under the expedited
process developed under clause (i).
(C) No effect on existing mechanisms.--The
suspension of the approval of any credit risk-sharing
mechanism under subparagraph (A)(iii) shall have no
effect on the status of single-family covered
securities and related instruments using the credit
risk-sharing mechanism that were issued prior to the
suspension.
(4) Additional credit risk-sharing mechanisms.--
(A) Approval.--In addition to credit risk-sharing
mechanisms approved by the Corporation under subsection
(a), the Corporation shall consider and may approve
additional fully-funded credit risk-sharing mechanisms
that--
(i) may be employed by an approved
guarantor to manage the credit risk relating to
guarantees provided for single-family covered
securities; and
(ii) do not represent the first loss
position with respect to single-family covered
securities.
(B) Rule of construction.--Nothing in this
paragraph shall be construed to limit an approved
guarantor from engaging in other forms of risk-sharing
or risk mitigation using mechanisms that have not been
considered or approved by the Corporation.
(5) Reports.--
(A) In general.--Not later than 1 year after the
agency transfer date, and annually thereafter until the
system certification date, the Corporation shall 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
that--
(i) discusses each credit risk-sharing
mechanism that the Chairperson considered in
carrying out the requirements of this section;
(ii) describes how the operation and
execution of each approved credit risk-sharing
mechanism fulfills the requirements of this
section; and
(iii) explains how the Corporation arrived
at the determinations made under clause (ii),
including a discussion of the data considered.
(B) Subsequent reports.--On the system
certification date and annually thereafter, the
Corporation shall publish in the Federal Register a
list of the credit risk-sharing mechanisms that the
Corporation approved or suspended, addressing the
identical concerns set forth under clauses (i) through
(iii) of subparagraph (A) and, with respect to any
suspension, the considerations under paragraph (1) that
are no longer satisfied.
(C) Multifamily reports.--The Corporation shall
include in the reports prepared under subparagraphs (A)
and (B) a description of the credit risk-sharing
mechanisms approved by the Corporation for multifamily
guarantors pursuant to section 703.
(c) Collateral Diversification Standards.--The Corporation shall
establish standards, after notice and comment, for the appropriate
minimum level of diversification for eligible single-family mortgage
loans that collateralize single-family covered securities that are
issued subject to an approved credit risk-sharing mechanism in order to
reduce the credit risk such single-family covered securities could pose
to the Mortgage Insurance Fund.
(d) Rule of Construction.--Nothing in this section shall be
construed to require the Corporation to approve any credit risk-sharing
mechanism.
(e) Applicability of the Commodity Exchange Act and Securities Act
of 1933.--
(1) Exemption from the commodity exchange act; prior
consultation required.--
(A) Exemption.--No counterparty that enters into a
swap, as that term is defined in section 1a of the
Commodity Exchange Act (7 U.S.C. 1a), for purposes of
structuring any credit risk-sharing mechanism that is
approved by the Corporation pursuant to this section,
which credit risk-sharing mechanism is designed to be
used or is used by a private market holder to assume
losses and to reduce the specific risks arising from
losses realized under such credit risk-sharing
mechanism associated with any single-family covered
security insured in accordance with section 303 or
section 305, shall be deemed, by reason of such swap
transaction, to be a commodity pool, as that term is
defined in section 1a of the Commodity Exchange Act (7
U.S.C. 1a).
(B) Prior consultation required.--Before approving
any credit risk-sharing mechanism that would be exempt
from the Commodity Exchange Act pursuant to
subparagraph (A), the Corporation shall consult with
the Commodity Futures Trading Commission.
(2) Exemption from section 27b of the securities act of
1933; prior consultation required.--
(A) Exemption.--Any credit risk-sharing mechanism
that is approved by the Corporation pursuant to this
section, which credit risk-sharing mechanism is
designed to be used or is used by a private market
holder to assume losses and to reduce the specific
risks arising from losses realized under such credit
risk-sharing mechanism associated with any single-
family covered security insured in accordance with
section 303 or section 305, shall be exempt from
section 27B of the Securities Act of 1933 (15 U.S.C.
77z-2a).
(B) Prior consultation required.--Before approving
any credit risk-sharing mechanism that would be exempt
from section 27B of the Securities Act of 1933 pursuant
to subparagraph (A), the Corporation shall consult with
the Securities and Exchange Commission.
SEC. 303. INSURANCE; MORTGAGE INSURANCE FUND.
(a) Authority.--The Corporation shall, in exchange for a fee in
accordance with subsection (e)(8), insure the payment of principal and
interest on a covered security with respect to any failure to pay on
such covered security subject to the requirements of this section.
(b) Terms and Conditions.--
(1) In general.--The Corporation shall, by regulation,
establish terms and conditions for the provision of insurance
under this Act.
(2) Single-family.--The terms and conditions required to be
established under paragraph (1) shall, for single-family
covered securities, include terms and conditions that ensure--
(A) eligible single-family mortgage loans
collateralizing single-family covered securities have
been delivered to the Platform; and
(B) with respect to each single-family covered
security, either--
(i) private market holders have taken a
first loss position that satisfies the
requirements of section 302; or
(ii) an approved guarantor has provided a
guarantee in satisfaction of the requirements
of section 311.
(3) Multifamily.--The terms and conditions required to be
established under paragraph (1) shall, for multifamily covered
securities, include terms and conditions that ensure, with
respect to each multifamily covered security, that an approved
multifamily guarantor has provided a guarantee in satisfaction
of the requirements of section 703.
(c) Cash Payments; Continued Operations.--The Corporation shall
facilitate the timely and unconditional payment of principal and
interest on covered securities insured under this Act by paying, in
cash when due, any shortfalls in principal and interest due on the
covered security, and continuing to charge and collect any fees for the
provision of insurance (in accordance with subsection (e)(8)) relating
to the covered security in the event of any losses that may be incurred
(1) in excess of a payment default on the covered security that exceeds
the first loss position assumed by a private market holder, (2) in the
case of a covered security that is guaranteed by an approved guarantor
or approved multifamily guarantor as a result of the insolvency of the
guarantor, or (3) upon the failure of the servicer or guarantor to
transfer to the bond administrator for the covered security funds in
amounts necessary to make timely payment of principal and interest due
on the covered security.
(d) Cost Recovery.--In the event the Corporation makes a payment on
a covered security based on subsection (c)(3), the Corporation shall
recover such amount paid, and reasonable costs and expenses, from the
servicer or guarantor.
(e) Mortgage Insurance Fund.--
(1) Establishment.--On the agency transfer date, there
shall be established the Mortgage Insurance Fund, which the
Corporation shall--
(A) maintain and administer;
(B) use to carry out the insurance functions
authorized under this Act, including any function or
action authorized under section 305; and
(C) invest in accordance with the requirements of
paragraph (10).
(2) Deposits.--The Mortgage Insurance Fund shall be
credited with any--
(A) fee amounts required to be deposited in the
Fund under this section;
(B) amounts earned on investments pursuant to
paragraph (10);
(C) assessment amounts authorized to be deposited
into the Fund under section 405(b); and
(D) assessment amounts required to be deposited
into the Fund under section 608(c).
(3) Fees for single-family and multifamily covered
securities.--In determining the amount of any fee to be charged
by the Corporation under this section, the Corporation shall
charge a separate fee for single-family covered securities and
multifamily covered securities, as appropriate for each asset
class.
(4) Separate accounting required.--The Corporation shall
keep and maintain separate accounting for deposits in the
Mortgage Insurance Fund related to fee amounts charged and
collected for the insurance of single-family covered securities
and multifamily covered securities.
(5) Fiduciary responsibility.--The Corporation has the
responsibility to ensure that the Mortgage Insurance Fund
remains financially sound.
(6) Use and treatment of amounts in the fund.--
(A) In general.--The Mortgage Insurance Fund shall
be solely available to the Corporation for use by the
Corporation to carry out the functions authorized by
this Act, for the expenses of the Corporation, and
for--
(i) compensation of the employees of the
Corporation;
(ii) purposes of--
(I) funding the CSP; and
(II) establishing the
Securitization Platform under section
321, multifamily subsidiaries under
section 701, the initial Small Lender
Mutual under section 315, and any other
entity authorized by this Act that
facilitates an orderly transition to
the new housing finance system; and
(iii) covering all other expenses of the
Corporation.
(B) Prohibition.--The Mortgage Insurance Fund may
not be used or otherwise diverted to cover any other
expense of the Federal Government.
(C) Exemption from apportionment.--Notwithstanding
any other provision of law, amounts in the Mortgage
Insurance Fund shall not be subject to apportionment
for the purposes of chapter 15 of title 31, United
States Code, or under any other authority.
(D) Not government funds.--Amounts in the Mortgage
Insurance Fund shall not be construed to be Government
or public funds or appropriated money.
(7) Reserve ratio goals for mortgage insurance fund.--The
Corporation shall--
(A) endeavor to ensure that the Mortgage Insurance
Fund attains a reserve ratio--
(i) of 1.25 percent of the sum of the
outstanding principal balance of the covered
securities for which insurance is being
provided under this title within 5 years of the
system certification date; and
(ii) of 2.50 percent of the sum of the
outstanding principal balance of the covered
securities for which insurance is being
provided under this title within 10 years of
the system certification date; and
(B) after the expiration of the period referred to
in subparagraph (A)(ii), endeavor to ensure that the
Mortgage Insurance Fund maintains a reserve ratio of
not less than 2.50 percent of the sum of the
outstanding principal balance of the covered securities
for which insurance is being provided under this title.
(8) Maintenance of reserve ratio; establishment of fees.--
(A) Establishment of fees.--The Corporation shall
charge and collect a fee, and may in its discretion
increase or decrease such fee, in connection with any
insurance provided under this title to--
(i) achieve and maintain the reserve ratio
goals established under paragraph (7); and
(ii) fund the operations of the
Corporation.
(B) Fee considerations.--In establishing fees under
subparagraph (A), the Corporation shall consider--
(i) the expected operating expenses of the
Mortgage Insurance Fund;
(ii) the risk of loss to the Mortgage
Insurance Fund in carrying out the requirements
under this Act;
(iii) the risk presented by, and the loss
absorption capacity of, the credit risk-sharing
mechanism or guarantee that is provided on the
pool of eligible mortgage loans collateralizing
the covered security to be insured under this
title;
(iv) economic conditions generally
affecting the mortgage markets;
(v) the extent to which the reserve ratio
of the Mortgage Insurance Fund met--
(I) the reserve ratio set for the
preceding 12-month period; or
(II) the reserve ratio goals
established in paragraph (7); and
(vi) any other factors that the Corporation
determines appropriate.
(C) Fee uniformity.--The fee required under
subparagraph (A)--
(i) except as provided in subparagraph (D),
shall be set at a uniform amount applicable to
all institutions purchasing insurance under
this title;
(ii) may not vary--
(I) by geographic location; or
(II) by the size of the institution
to which the fee is charged; and
(iii) may not be based on the volume of
insurance to be purchased.
(D) Separate and distinct fees based on credit
risk-sharing mechanisms.--Nothing in subparagraph (C)
shall prohibit or be construed to prohibit the
Corporation from charging separate and distinct fees
under this paragraph based on the type or form of
credit risk-sharing mechanism applicable to the covered
security to be insured under this title.
(E) Deposit into mortgage insurance fund.--Any fee
amounts collected under this paragraph shall be
deposited in the Mortgage Insurance Fund.
(9) Full faith and credit.--The full faith and credit of
the United States is pledged to the payment of all amounts from
the Mortgage Insurance Fund which may be required to be paid
under any insurance provided under this title.
(10) Investments.--
(A) In general.--The Board of Directors may request
the Secretary of the Treasury to invest such portion of
amounts in the Mortgage Insurance Fund that, in the
judgment of the Board, is not required to meet the
current needs of the Corporation.
(B) Eligible investments.--Pursuant to a request
under subparagraph (A), the Secretary of the Treasury
shall invest such portions in obligations of the United
States with maturities suitable to the needs of the
Corporation, as determined by the Board, and bearing
interest at a rate determined by the Secretary of the
Treasury, taking into consideration, at the time of the
investment, market yields on outstanding marketable
obligations of the United States of comparable
maturity.
(C) Prohibited investments.--Amounts in the
Mortgage Insurance Fund may not be invested in any--
(i) covered security insured under this
title; or
(ii) mortgage-backed security issued by the
enterprises.
(f) Mandatory Loss Review by the Inspector General of the Federal
Mortgage Insurance Corporation.--
(1) In general.--If the Mortgage Insurance Fund is required
to make any payment of principal or interest, or both, on a
covered security with respect to losses incurred on such
covered security to any holder of such covered security, the
Inspector General of the Federal Mortgage Insurance Corporation
shall--
(A) review and make a written report to the
Corporation regarding the decision of the Corporation
to insure such covered security and the supervision by
the Corporation of all market participants involved in
the creation, issuance, servicing, guarantee of, or
insurance of such covered security, which shall--
(i) ascertain why the covered security
resulted in a loss to the Mortgage Insurance
Fund; and
(ii) make recommendations for preventing
any such loss in the future; and
(B) provide a copy of the report required under
subparagraph (A) to--
(i) the Comptroller General of the United
States;
(ii) the appropriate Federal banking agency
or State regulatory authority, as appropriate,
of any market participant involved in the
creation, issuance, servicing, guarantee of, or
insurance of such covered security; and
(iii) the Committee on Banking, Housing,
and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives.
(2) Deadline for report.--The Inspector General of the
Federal Mortgage Insurance Corporation shall comply with
paragraph (1) as expeditiously as possible, but in no event
shall the report required under paragraph (1) be submitted
later than 6 months after the date on which the loss was
incurred.
(3) Public disclosure required.--
(A) In general.--The Corporation shall disclose any
report on losses required under this subsection, upon
request under section 552 of title 5, United States
Code, without excising--
(i) any portion under section 552(b)(5) of
that title; or
(ii) any information under paragraph (4)
(other than trade secrets) or paragraph (8) of
section 552(b) of that title.
(B) Exception.--Subparagraph (A) does not require
the Corporation to disclose the name of any holder of
the covered security, or information from which the
identity of such a person could reasonably be
ascertained.
(4) Review by comptroller general.--The Comptroller General
of the United States shall, under such conditions as the
Comptroller General determines to be appropriate, review any
report made under paragraph (1) and recommend to the
Corporation improvements in the supervision of market
participants.
SEC. 304. LOAN LIMITS; HOUSING PRICE INDEX.
(a) Establishment.--The Corporation shall establish limitations
governing the maximum original principal obligation of eligible single-
family mortgage loans that may collateralize a covered security to be
insured by the Corporation under this title.
(b) Calculation of Amount.--The limitation set forth under
subsection (a) shall be calculated with respect to the total original
principal obligation of the eligible single-family mortgage loan and
not merely with respect to the amount insured by the Corporation.
(c) Maximum Limits.--
(1) In general.--Except as provided in paragraph (2), the
maximum limitation amount under this subsection shall not
exceed $417,000 for a mortgage loan secured by a 1-family
residence, for a mortgage loan secured by a 2-family residence
the limit shall equal 128 percent of the limit for a mortgage
loan secured by a 1-family residence, for a mortgage loan
secured by a 3-family residence the limit shall equal 155
percent of the limit for a mortgage loan secured by a 1-family
residence, and for a mortgage loan secured by a 4-family
residence the limit shall equal 192 percent of the limit for a
mortgage loan secured by a 1-family residence, except that such
maximum limitations shall be adjusted effective January 1 of
each year beginning after the effective date of this Act,
subject to the limitations in this paragraph. Each adjustment
shall be made by adding to each such amount (as it may have
been previously adjusted) a percentage thereof equal to the
percentage increase, during the most recent 12-month or 4-
quarter period ending before the time of determining such
annual adjustment, in the housing price index maintained by the
Chairperson pursuant to subsection (d). If the change in such
house price index during the most recent 12-month or 4-quarter
period ending before the time of determining such annual
adjustment is a decrease, then no adjustment shall be made for
the next year, and the next upward adjustment shall take into
account prior declines in the house price index, so that any
adjustment shall reflect the net change in the house price
index since the last adjustment. Declines in the house price
index shall be accumulated and then reduce increases until
subsequent increases exceed prior declines.
(2) High-cost area limits.--The limitations set forth in
paragraph (1) may be increased by not more than 50 percent with
respect to properties located in Alaska, Guam, Hawaii, and the
Virgin Islands. Such foregoing limitations shall also be
increased, with respect to properties of a particular size
located in any area for which 115 percent of the median house
price for such size residence exceeds the limitation for such
size residence set forth under paragraph (1), to the lesser of
150 percent of such limitation for such size residence or the
amount that is equal to 115 percent of the median house price
in such area for such size residence.
(d) Housing Price Index.--
(1) National index.--The Corporation shall establish and
maintain a method of assessing a national average single-family
house price for use in calculating the loan limits for eligible
single-family mortgage loans under subsection (c), and other
averages as the Corporation considers appropriate, including--
(A) averages based on different geographic regions;
and
(B) an average for houses whose mortgage
collateralized single-family covered securities.
(2) Considerations.--In establishing the method described
under subsection (a), the Corporation may take into
consideration the data collected in carrying out the functions
described under section 332, and such other data, existing
house price indexes, and other measures as the Corporation
considers appropriate.
SEC. 305. AUTHORITY TO PROTECT TAXPAYERS IN UNUSUAL AND EXIGENT MARKET
CONDITIONS.
(a) In General.--If the Corporation, upon the written agreement of
the Chairman of the Board of Governors of the Federal Reserve System
and the Secretary of the Treasury, and in consultation with the
Secretary of Housing and Urban Development, determines that unusual and
exigent circumstances have created or threaten to create an anomalous
lack of mortgage credit availability within the single-family housing
market, multifamily housing market, or entire United States housing
market that could materially and severely disrupt the functioning of
the housing finance system of the United States, the Corporation may,
for a period of 6 months--
(1) provide insurance in accordance with section 303 to any
single-family covered security regardless of whether such
security has satisfied the requirements of section 302; and
(2) establish provisional standards for approved entities,
notwithstanding any standard required under subtitle B or
section 703, pursuant to section 607.
(b) Considerations.--In exercising the authority granted under
subsection (a), the Corporation shall consider the severity of the
conditions present in the housing markets and the risks presented to
the Mortgage Insurance Fund in exercising such authority.
(c) Terms and Conditions.--Insurance provided under subsection (a)
shall be subject to such additional or different limitations,
restrictions, and regulations as the Corporation may prescribe.
(d) Bailout Strictly Prohibited.--In exercising the authority
granted under subsection (a), the Corporation may not--
(1) provide aid to an approved entity or an affiliate of
the approved entity, if such approved entity is in bankruptcy
or any other Federal or State insolvency proceeding; or
(2) provide aid for the purpose of assisting a single and
specific company to avoid bankruptcy or any other Federal or
State insolvency proceeding.
(e) Notice.--Not later than 7 days after authorizing insurance or
establishing provisional standards under subsection (a), the
Corporation shall submit to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives a report that includes--
(1) the justification for the exercise of authority to
provide such insurance or establish such provisional standards;
(2) evidence that unusual and exigent circumstances have
created or threatened to create an anomalous lack of mortgage
credit availability within the single-family housing market,
multifamily housing market, or entire United States housing
market that could materially and severely disrupt the
functioning of the housing finance system of the United States;
and
(3) evidence that failure to exercise such authority would
have undermined the safety and soundness of the housing finance
system.
(f) Additional Exercise of Authority.--
(1) In general.--Subject to the limitation under subsection
(g), the authority granted to the Corporation under subsection
(a) may be exercised for 2 additional 9-month periods within
any given 3-year period, provided that the Corporation, upon
the written agreement of the Chairman of the Board of Governors
of the Federal Reserve System and the Secretary of the
Treasury, and in consultation with the Secretary of Housing and
Urban Development--
(A) determines--
(i) for a second exercise of authority
under subsection (a), by an affirmative vote of
\2/3\ or more of the Board of Directors then
serving, that a second exercise of authority
under subsection (a) is necessary; or
(ii) for a third exercise of authority
under subsection (a), by an affirmative vote of
\2/3\ or more of the Board of Directors then
serving, and an affirmative vote of \2/3\ or
more of the Board of Governors of the Federal
Reserve System then serving, that a third
exercise of authority under this section is
necessary; and
(B) provides notice to Congress, as provided under
subsection (e).
(2) Order of exercise of authority.--Any additional
exercise of authority under this subsection may occur
consecutively or non-consecutively.
(g) Limitation.--The authority granted to the Corporation under
this section may not be exercised more than 3 times in any given 3-year
period, which 3-year period shall commence upon the initial exercise of
authority under subsection (a).
(h) Normalization and Reduction of Risk.--Following any exercise of
authority under this section, the Corporation shall--
(1) establish a timeline for approved entities to meet the
approval standards set forth in this Act; and
(2) in a manner and pursuant to a timeline that will
minimize losses to the Mortgage Insurance Fund, establish a
program to either--
(A) sell, in whole or in part, the first loss
position on covered securities issued pursuant to this
section to private market holders; or
(B) transfer for value to approved entities, or
work with approved entities to sell, in whole or in
part, the first lost position on covered securities
issued pursuant to this section.
(i) Authority to Respond to Sustained National Home Price
Decline.--
(1) Authority.--In the event of a significant decline of
national home prices, in at least 2 consecutive calendar
quarters, the Corporation, by an affirmative vote of \2/3\ or
more of the Board of Directors then serving, may for a period
of 6 months permit the transfer of guarantees of eligible
mortgage loans that secure covered securities if such eligible
mortgage loans are refinanced, regardless of the value of the
underlying collateral securing such eligible mortgage loans.
(2) Additional exercise of authority.--The authority
granted to the Corporation under paragraph (1) may be exercised
for additional 6-month periods, if upon each additional
extension of such authority there is an affirmative vote of \2/
3\ or more of the Board of Directors then serving.
(3) Limitation.--The Corporation shall not provide
insurance under this section to any covered security that
includes mortgage loans that do not meet the definition of an
eligible mortgage loan, as defined in this Act, except for
mortgage loans refinanced from eligible mortgage loans in
covered securities.
(4) Rule of construction.--No provision in this section
shall be construed as permitting the Corporation to lower any
other requirement related to the requirements set forth under
the definition of an eligible mortgage loan.
SEC. 306. GENERAL POWERS.
(a) Corporate Powers.--The Federal Mortgage Insurance Corporation
shall have the power--
(1) to adopt, alter, and use a corporate seal, which shall
be judicially noticed;
(2) to enter into, execute, and perform contracts, leases,
cooperative agreements, or other transactions, on such terms as
it may deem appropriate, with any agency or instrumentality of
the United States, or with any political subdivision thereof,
or with any person, firm, association, or corporation;
(3) to execute, in accordance with its bylaws, all
instruments necessary or appropriate in the exercise of any of
its powers;
(4) in its corporate name, to sue and to be sued, and to
complain and to defend, in any court or tribunal of competent
jurisdiction, Federal or State, but no attachment, injunction,
or other similar process, mesne or final, shall be issued
against the property of the Corporation;
(5) to conduct its business without regard to any
qualification or similar statute in any State of the United
States;
(6) to lease, purchase, or acquire any property, real,
personal, or mixed, or any interest therein, to hold, rent,
maintain, modernize, renovate, improve, use, and operate such
property, and to sell, for cash or credit, lease, or otherwise
dispose of the same, at such time and in such manner as and to
the extent that it may deem necessary or appropriate;
(7) to prescribe, repeal, and amend or modify, rules,
regulations, or requirements governing the manner in which its
general business may be conducted;
(8) to accept gifts or donations of services, or of
property, real, personal, or mixed, tangible, or intangible, in
aid of any of its purposes;
(9) to appoint and supervise personnel employed by the
Corporation;
(10) to establish and maintain divisions, units, or other
offices within the Corporation, including those established in
sections 207, 208, 209, and 211 in order to carry out the
responsibilities of this Act, and to satisfy the requirements
of other applicable law; and
(11) to manage the affairs of the Corporation and conduct
the business of the Corporation, as necessary.
(b) Litigation Authority.--
(1) In general.--In enforcing any provision of this Act,
any regulation or order prescribed under this Act, or any other
provision of law, rule, regulation, or order, or in any other
action, suit, or proceeding to which the Corporation is a party
or in which the Corporation is interested, and in the
administration of conservatorships and receiverships, the
Corporation may act in the Corporation's own name and through
attorneys or other agents acting on behalf of the Corporation.
(2) Subject to suit.--Except as otherwise provided by law,
the Corporation shall be subject to suit (other than suits for
claims for money damages) by a regulated entity or market
participant with respect to any matter under this Act or any
other applicable provision of law, rule, order, or regulation
under this Act, in the United States district court for the
judicial district in which the regulated entity or market
participant has its principal place of business, or in the
United States District Court for the District of Columbia, and
the Corporation may be served with process in the manner
prescribed by the Federal Rules of Civil Procedure.
(c) Expenditures.--Except as may be otherwise provided in this
title, the Corporation shall determine the necessity for, and the
character and amount of its obligations and expenditures, and the
manner in which they shall be incurred, allowed, paid, and accounted
for.
(d) Exemption From Certain Taxes.--The Corporation, including its
franchise, capital, reserves, surplus, mortgage loans or other security
holdings, and income shall be exempt from all taxation now or hereafter
imposed by the United States, by any territory, dependency, or
possession thereof, or by any State, county, municipality, or local
taxing authority, except that any real property of the Corporation
shall be subject to State, county, municipal, or local taxation to the
same extent according to its value as other real property is taxed.
(e) Exclusive Use of Name.--No individual, association,
partnership, or corporation, except the body corporate named under
section 201, shall hereafter use the words ``Federal Mortgage Insurance
Corporation'' or any combination of such words, as the name or a part
thereof under which such individual, association, partnership, or
corporation shall do business. Violations of the foregoing sentence may
be enjoined by any court of general jurisdiction at the suit of the
proper body corporate named under section 201. In any such suit, the
plaintiff may recover any actual damages flowing from such violation,
and, in addition, shall be entitled to punitive damages (regardless of
the existence or nonexistence of actual damages) of not exceeding
$1,000 for each day during which such violation is committed or
repeated.
(f) Fiscal Agents.--The Federal Reserve banks are authorized and
directed to act as depositories, custodians, and fiscal agents for the
Corporation, for its own account or as fiduciary, and such banks shall
be reimbursed for such services in such manner as may be agreed upon,
and the Corporation may itself act in such capacities, for its own
account or as fiduciary, and for the account of others.
(g) Other Powers.--The Corporation is authorized to assess and
collect fees on regulated entities and approved entities, including for
applications, examinations, and other purposes, as authorized by this
Act.
(h) Federal Home Loan Bank Assessment.--The Corporation shall have
the authority to assess a fee on the Federal Home Loan Banks to cover
the necessary costs related to supervising the Federal Home Loan Banks.
The costs associated with the secondary market activities of the
Federal Home Loan Banks pursuant to section 312 shall be covered by the
fee charged pursuant to this subsection.
(i) Rule of Construction Related to Fair Housing.--Nothing in this
Act shall be construed as authorizing the Corporation to waive, repeal,
amend, or modify requirements relating to fair housing law, including
those requirements under the Fair Housing Act (42 U.S.C. 3601 et seq.)
and the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.).
SEC. 307. EXEMPTIONS.
(a) Securities Exempt From Securities and Exchange Commission
Regulation.--
(1) Covered securities.--
(A) In general.--All securities insured or
guaranteed by the Corporation shall, to the same extent
as securities that are direct obligations of or
obligations guaranteed as to principal or interest by
the United States, be deemed to be exempt securities
within the meaning of the laws administered by the
Securities and Exchange Commission.
(B) Conforming amendment.--The first sentence of
section 3(a)(2) of the Securities Act of 1933 (15
U.S.C. 77c(a)(2)) is amended by inserting ``or any
security insured or guaranteed by the Federal Mortgage
Insurance Corporation;'' after ``Federal Reserve
bank;''.
(2) Credit risk-sharing mechanisms.--Section 27B(c) of the
Securities Act of 1933 (15 U.S.C. 77z-2a(c)) is amended--
(A) in paragraph (1), by striking ``or'' at the
end;
(B) in paragraph (2), by striking the period at the
end and inserting ``; or''; and
(C) by adding at the end the following:
``(3) purchases or sales of any asset-backed security that
is a credit risk-sharing mechanism approved by the Federal
Mortgage Insurance Corporation in accordance with section 302
or section 703(c) of the Housing Finance Reform and Taxpayer
Protection Act of 2014, which credit risk-sharing mechanism is
designed to be used or is used, as determined by the Federal
Mortgage Insurance Corporation, by a private market holder to
assume losses and to reduce the specific risks arising from
losses realized under such credit risk-sharing mechanism
associated with any pool of eligible mortgage loans that
collateralizes a covered security insured in accordance with
section 303 or 305 of that Act.''.
(b) QRM Exemption.--Section 15G(e) of the Securities Exchange Act
of 1934 (15 U.S.C. 78o-11(e)) is amended--
(1) in paragraph (3)(B)--
(A) by striking ``Association, the'' and inserting
``Association and the''; and
(B) by striking ``and the Federal home loan
banks''; and
(2) by adding at the end the following:
``(7) Covered securities insured by the federal mortgage
insurance corporation.--Notwithstanding any other provision of
this section, the requirements of this section shall not apply
to any covered security, as such term is defined under section
2 of the Housing Finance Reform and Taxpayer Protection Act of
2014, insured or guaranteed by the Federal Mortgage Insurance
Corporation or any institution that is subject to the
supervision of the Federal Mortgage Insurance Corporation.''.
(c) Counterparties Exempt From the Commodity Exchange Act.--Section
1a(10) of the Commodity Exchange Act (7 U.S.C. 1a(10)) is amended by
adding at the end the following:
``(C) Exemption.--Solely as it relates to the
specific role of a counterparty in connection with the
swap transaction described in this paragraph, the term
`commodity pool' does not include any counterparty that
enters into any swap for purposes of structuring a
credit risk-sharing mechanism that is approved by the
Federal Mortgage Insurance Corporation in accordance
with section 302 or section 703(c) of the Housing
Finance Reform and Taxpayer Protection Act of 2014,
which credit risk-sharing mechanism is designed to be
used or is used, as determined by the Federal Mortgage
Insurance Corporation, by a private market holder to
assume losses and to reduce the specific risks arising
from losses realized under such credit risk-sharing
mechanism associated with any pool of eligible mortgage
loans that collateralizes a covered security insured in
accordance with section 303 or 305 of that Act.''.
SEC. 308. REGULATORY CONSULTATION AND COORDINATION.
(a) Consultation Permitted.--The Corporation may, in carrying out
any duty, responsibility, requirement, or action authorized under this
Act, consult with the Federal regulatory agencies, any individual
Federal regulatory agency, the Secretary of the Treasury, the Secretary
of Housing and Urban Development, any State banking regulator, any
State insurance regulator, and any other State agency, as the
Corporation determines necessary and appropriate.
(b) Coordination Required.--The Corporation shall, as required by
this Act, in carrying out any duty, responsibility, requirement, or
action authorized under this Act, coordinate with the Federal
regulatory agencies, any individual Federal regulatory agency, the
Secretary of the Treasury, the Secretary of Housing and Urban
Development, any State banking regulator, any State insurance
regulator, and any other State agency.
(c) Avoidance of Duplication.--To the fullest extent possible, the
Corporation shall--
(1) avoid duplication of examination activities, reporting
requirements, and requests for information;
(2) rely on examination reports made by other Federal or
State regulatory agencies relating to an approved entity and
its subsidiaries, if any; and
(3) ensure that approved entities are not subject to
conflicting supervisory demands by the Corporation and other
Federal regulatory agencies.
(d) Protection of Privileges.--
(1) In general.--Pursuant to the authorities provided under
subsections (a) and (b), to facilitate the consultative process
and coordination, the Corporation may share information with
the Federal regulatory agencies, any individual Federal
regulatory agency, the Secretary of the Treasury, the Secretary
of Housing and Urban Development, any State bank supervisor,
any State insurance regulator, any other State agency, or any
foreign banking authority, on a one-time, regular, or periodic
basis, as determined by the Corporation, regarding the capital
assets and liabilities, financial condition, risk management
practices, or any other practice of any market participant.
(2) Privilege preserved.--Information shared by the
Corporation pursuant to paragraph (1) shall not be construed as
waiving, destroying, or otherwise affecting any privilege or
confidential status that any market participant or any other
person may claim with respect to such information under Federal
or State law as to any person or entity other than such
agencies, agency, supervisor, or authority.
(3) Rule of construction.--No provision of this subsection
may be construed as implying or establishing that--
(A) any person waives any privilege applicable to
information that is shared or transferred under any
circumstance to which this subsection does not apply;
or
(B) any person would waive any privilege applicable
to any information by submitting the information
directly to the Federal regulatory agencies, any
individual Federal regulatory agency, any State bank
supervisor, any State insurance regulator, any other
State agency, or any foreign banking authority, but for
this subsection.
(e) Federal and State Authority Preserved.--Unless otherwise
expressly provided by this section, no provision of this section shall
limit or be construed to limit, in any way, the existing authority of
any Federal agency or State regulatory authority.
SEC. 309. AUTHORITY TO ISSUE REGULATIONS.
(a) General Authority.--The Corporation may prescribe such
regulations and issue such guidelines, orders, requirements, or
standards as are necessary to--
(1) carry out this Act, or any amendment made by this Act;
and
(2) ensure--
(A) competition among approved entities in the
secondary mortgage market;
(B) liquidity in the secondary mortgage market and
the forward execution market for eligible single-family
mortgage loans and single-family covered securities,
such as the To-Be-Announced market; and
(C) mitigation of systemic risk in the secondary
mortgage market.
(b) Capital Standards.--
(1) In general.--For each type of covered entity the
Corporation shall establish, by regulation, capital standards
and related solvency standards necessary to implement the
provisions of this Act.
(2) Definitions.--
(A) In general.--The regulations required under
this subsection shall define all such terms as are
necessary to carry out the purposes of this subsection.
(B) Considerations in defining instruments and
contracts that qualify as capital.--In defining
instruments and contracts that qualify as capital
pursuant to subparagraph (A), the Corporation--
(i) shall include such instruments and
contracts that will absorb losses before the
Mortgage Insurance Fund; and
(ii) may assign significance to those
instruments and contracts based on the nature
and risks of such instruments and contracts.
(C) Considerations in defining capital ratios.--
Solely for the purposes of calculating a capital ratio
appropriate to the business model of the applicable
entity pursuant to subparagraph (A), the Corporation
shall consider for the denominator--
(i) total assets;
(ii) total liabilities;
(iii) risk in force; or
(iv) unpaid principal balance.
(3) Designed to ensure safety and soundness.--The capital
and related solvency standards established under this
subsection shall be designed to--
(A) ensure the safety and soundness of a covered
entity;
(B) minimize the risk of loss to the Mortgage
Insurance Fund;
(C) in consultation and coordination with the Board
of Governors of the Federal Reserve System, the Federal
Deposit Insurance Corporation, the Office of the
Comptroller of the Currency, and the National Credit
Union Administration, reduce the potential for
regulatory arbitrage between capital standards for
covered entities and capital standards promulgated by
Federal regulatory agencies for insured depository
institutions and their affiliates; and
(D) be specifically tailored to accommodate a
diverse range of business models that may be employed
by covered entities.
(4) Supplemental capital requirements.--In order to prevent
or mitigate risks to the secondary mortgage market of the
United States that could arise from the material financial
distress or failure, or ongoing activities, of covered entities
that are large approved aggregators or large approved
guarantors that engage in covered guarantee transactions, the
Corporation, by regulation--
(A) shall establish supplemental capital
requirements for covered entities that are large
approved aggregators or large approved guarantors; and
(B) may establish such other standards for covered
entities that are large approved aggregators or large
approved guarantors that the Corporation determines
necessary or appropriate.
(c) Market Share Limitation for Certain Large Entities.--The
Corporation shall establish, by regulation, market share limitations
for large approved aggregators and large approved guarantors that would
take effect only in the event the Corporation has reason to believe the
supplemental standards established under subsection (b)(4) are
insufficient to prevent or mitigate risks to the secondary mortgage
market of the United States that could arise from the material
financial distress or failure, or ongoing activities, of such approved
aggregators and approved guarantors.
(d) Recognition of Distinctions Between the Approved Entities and
the Federal Home Loan Banks.--
(1) In general.--Prior to promulgating any regulation or
taking any other formal or informal action of general
applicability and future effect relating to the Federal Home
Loan Banks, including the issuance of an advisory document or
examination guidance, the Chairperson, in consultation with the
Office of Federal Home Loan Bank Supervision, shall consider
the differences between the Federal Home Loan Banks and
approved entities with respect to--
(A) the Banks'--
(i) cooperative ownership structure;
(ii) mission of providing liquidity to its
members;
(iii) affordable housing and community
development mission;
(iv) capital structure; and
(v) joint and several liability; and
(B) any other differences that the Corporation
considers appropriate.
(2) Capital considerations.--The Corporation, in
coordination with the Office of Federal Home Loan Bank
Supervision, shall establish capital standards, as required
under section 309(b), with respect to a Federal Home Loan Bank,
or subsidiary or joint office thereof, that is approved as an
aggregator under section 312, that--
(A) are adequate to support the role of a Federal
Home Loan Bank as a covered entity, consistent with the
safe and sound operations of the Bank or Banks
involved; and
(B) do not adversely impact the traditional
liquidity and advance business of the Federal Home Loan
Bank System or the marketability or creditworthiness of
Federal Home Loan Bank consolidated obligations.
(e) Regulations Relating to Force-placed Insurance.--
(1) In general.--The Corporation shall, by regulation, set
standards for the purchase of force-placed insurance by market
participants.
(2) Limitation.--No standards developed, adopted, or
published under paragraph (1) shall concern the regulation of
the business of insurance or preempt any State law, regulation,
or procedure concerning the regulation of the business of
insurance.
(f) Use and Protection of Personally Identifiable Information.--
(1) Privacy considerations.--In collecting information from
any person, in publicly releasing information held by the
Corporation, or in requiring approved entities to publicly
report information, the Corporation shall take steps to ensure
that proprietary, personal, or confidential consumer
information that is protected from public disclosure under
section 552(b) or 552a of title 5, United States Code, or any
other provision of law, is not made public.
(2) Treatment of approved entities.--With respect to the
application of any provision of the Right to Financial Privacy
Act of 1978 to a disclosure by an approved entity subject to
this subsection, the approved entity shall be treated as if it
were a ``financial institution'' as defined in section 1101 of
that Act (12 U.S.C. 3401).
(3) Non disclosure.--
(A) In general.--Unless otherwise specified by this
Act, any personally identifiable information obtained
or maintained by the Corporation in connection with any
supervision or enforcement authority or function,
including the Office of General Counsel and Office of
the Inspector General of the Federal Mortgage Insurance
Corporation, may not be disclosed to any non
supervisory or non enforcement office, division, or
employee of the Corporation, or to any other Federal or
State agency unless--
(i) the information is necessary and
appropriate for such office, division, or
employee of the Corporation to comply with this
Act, and the office, division, or employee
cannot reasonably obtain the information
through the normal course of business of such
office, division, or employee;
(ii) the other Federal or State agency has
satisfied any conditions of information sharing
that the Corporation may establish, including
treatment of personally identifiable
information and sharing of information that
shall conform to the standards for protection
of the confidentiality of personally
identifiable information and for data integrity
and security that are applicable to Federal
agencies; or
(iii) the records are relevant to a
legitimate law enforcement inquiry, or
intelligence or counterintelligence activity,
investigation, or analysis related to
international terrorism within the jurisdiction
of the receiving entity.
(B) Protection of personally identifiable
information by specific offices.--Any office created
under section 207(a)(1)(B) shall--
(i) develop standards regarding treatment
and confidentiality of personally identifiable
information and the collection and sharing of
information that are tailored to the purpose or
mission of the office; and
(ii) obtain approval from the Chairperson
of the standards developed under clause (i)
prior to the operation of the office.
(g) Consumer Privacy.--The Corporation shall not obtain from an
approved entity any personally identifiable financial information about
a consumer from the financial records of the approved entity, except--
(1) if the financial records are reasonably described in a
request by the Corporation and the consumer provides written
permission for the disclosure of such information by an
approved entity to the Corporation; or
(2) as may be specifically permitted or required under
other applicable provisions of law and in accordance with the
Right to Financial Privacy Act of 1978 (12 U.S.C. 3401 et
seq.).
(h) Option for Approved Guarantors and Approved Aggregators.--
(1) Establishment of process for approval.--The Corporation
may, if it determines necessary or appropriate, establish a
process and criteria for approved guarantors and approved
aggregators to apply to the Corporation for approval to operate
a cash window for the purchase of individual eligible single-
family mortgage loans.
(2) Requirements.--If the Corporation establishes a process
and criteria under paragraph (1), the Corporation--
(A) may grant approval to an approved guarantor or
an approved aggregator that applies to operate a cash
window for the purchase of individual eligible single-
family mortgage loans only if the Corporation
determines that--
(i) the approved guarantor or approved
aggregator meets the criteria established under
paragraph (1); and
(ii) the operation of the cash window would
not pose a risk to the Mortgage Insurance Fund;
and
(B) to ensure the safety and soundness of each
approved guarantor and approved aggregator, shall
establish standards for the regulation, supervision,
and operation of each cash window that an approved
guarantor or approved aggregator is approved to operate
under this paragraph.
SEC. 310. EQUIVALENCY IN PROTECTION OF THE MORTGAGE INSURANCE FUND.
In order to protect the Mortgage Insurance Fund and promote
multiple sources of first loss positions, the Corporation shall seek to
ensure equivalent loss absorption capacity between approved credit
risk-sharing mechanisms pursuant to section 302 and capital standards
for approved guarantors pursuant to section 311.
Subtitle B--Approval and Supervision of Approved Entities for Single-
family Activities
SEC. 311. APPROVAL AND SUPERVISION OF GUARANTORS.
(a) Standards for Approval of Guarantors.--
(1) In general.--The Corporation shall develop, adopt, and
publish standards for the approval by the Corporation of
guarantors to guarantee the timely payment of principal and
interest on securities collateralized by eligible single-family
mortgage loans and insured by the Corporation.
(2) Required standards.--The standards required under
paragraph (1) shall include--
(A) the financial history and condition of the
guarantor;
(B) a requirement that the guarantor maintain
capital levels as defined by the Corporation, pursuant
to subsection (g);
(C) the capability of the management of the
guarantor;
(D) the general character and fitness of the
officers and directors of the guarantor, including the
compliance history of the guarantor's officers and
directors with Federal and State laws and the rules and
regulations promulgated by self-regulatory
organizations (as defined in section 3(a)(26) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(26)),
as applicable;
(E) the risk presented by the guarantor to the
Mortgage Insurance Fund;
(F) the adequacy of insurance and fidelity coverage
of the guarantor;
(G) the ability of the guarantor to--
(i) at the discretion of the guarantor,
transfer investment risk and credit risk to
private market holders in the single-family
market in accordance with the credit risk-
sharing mechanisms approved by the Corporation
under section 302;
(ii) create mechanisms to guarantee multi-
lender pools; and
(iii) ensure that eligible single-family
mortgage loans that collateralize a single-
family covered security insured under this
title are originated in compliance with the
requirements of this Act;
(H) the capacity of the guarantor to take the first
loss position;
(I) that the guarantor has the capacity to
guarantee eligible single-family mortgage loans in a
manner that furthers the purposes of the Corporation
described in section 201(b)(5);
(J) a requirement that the guarantor timely issue
publicly available audited financial statements on an
annual basis prepared in accordance with generally
accepted accounting principles used in the industry;
(K) that the guarantor is in compliance with
section 210(a)(3);
(L) that the guarantor has substantial analytical
capabilities to effectively manage credit risk;
(M) that the guarantor does not originate eligible
single-family mortgage loans and is not an affiliate of
a person that actively engages in the business of
originating eligible single-family mortgage loans; and
(N) any other standard the Corporation determines
necessary to protect the Mortgage Insurance Fund.
(3) Rule of construction.--Nothing in subparagraph (I) of
paragraph (2) shall be construed to prevent the Corporation
from approving a small or specialty guarantor, provided that
the guarantor has the capacity to adequately diversify its risk
to meet appropriate safety and soundness concerns.
(4) Consultation and coordination.--To promote consistency
and minimize regulatory conflict, the Corporation shall consult
and coordinate with appropriate Federal and State regulators
and officials when developing standards pursuant to this
subsection.
(b) Application and Approval.--
(1) Application process.--
(A) In general.--The Corporation shall establish an
application process, in such form and manner and
requiring such information as the Corporation may
require, for the approval of a guarantor under this
section.
(B) Application review.--The Corporation shall
establish internal timelines for its processing of an
application under this section, including timelines for
any action to approve or to deny an application under
this section.
(C) Prohibition on control by insured depository
institutions or affiliates of insured depository
institutions.--
(i) In general.--It shall be unlawful for
an insured depository institution or an
affiliate of an insured depository institution
to control an approved guarantor.
(ii) Rule of construction regarding
control.--For purposes of this subparagraph,
any insured depository institution or affiliate
of an insured depository institution has
control over an approved guarantor if the
company directly or indirectly or acting
through 1 or more other persons owns, controls,
or has power to vote 10 percent or more of any
class of voting shares of the approved
guarantor.
(2) Approval.--The Corporation may approve any application
made pursuant to paragraph (1), provided the guarantor meets
the standards established under subsection (a).
(3) Denial.--The Corporation shall have the authority to
deny any application made pursuant to paragraph (1) if an
officer or director of the guarantor has, at any time prior to
the date of the approval of such application, been--
(A) subject to a statutory disqualification
pursuant to section 3(a)(39) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(39)); or
(B) suspended, removed, or prohibited from
participation pursuant to section 8(g) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(g)), prohibited
from certain action pursuant to paragraphs (6) or (7)
of section 8(e) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(e)), subject to an action resulting in
a written agreement or other written statement under
section 8(u)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(u)(1)), for which a violation may be
enforced by an appropriate Federal banking agency, or
subject to any final order issued with respect to any
administrative enforcement proceeding initiated by such
agency under section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818).
(4) Notice and publication.--The Corporation shall--
(A) provide prompt notice to a guarantor of the
approval or denial of any application of the guarantor
to become an approved guarantor under this section;
(B) publish a notice in the Federal Register upon
approval of any guarantor; and
(C) maintain an updated list of approved guarantors
on the website of the Corporation.
(c) Requirement to Maintain Approval Status.--
(1) Authority to issue order.--If the Corporation
determines that an approved guarantor no longer meets the
standards for such approval or violates a requirement under
this Act, including any standard, regulation, or order
promulgated in accordance with this Act, the Corporation may--
(A) suspend or revoke the approved status of the
approved guarantor; or
(B) take any other action with respect to such
approved guarantor as may be authorized under this Act.
(2) Rule of construction.--The suspension or revocation of
the approved status of an approved guarantor under this section
shall have no effect on the status as a covered security of any
covered security collateralized by eligible mortgage loans with
which the approved guarantor contracted prior to the suspension
or revocation.
(3) Publication.--The Corporation shall--
(A) promptly publish a notice in the Federal
Register upon suspension or revocation of the approval
of any approved guarantor; and
(B) maintain an updated list of such approved
guarantors on the website of the Corporation.
(4) Definition.--In this subsection, the term ``violate''
includes any action, taken alone or with others, for or toward
causing, bringing about, participating in, counseling, or
aiding or abetting, a violation of the requirements under this
Act.
(d) Prudential Standards for Supervision.--The Corporation shall
prescribe prudential standards for approved guarantors in order to--
(1) ensure--
(A) the safety and soundness of approved
guarantors; and
(B) the maintenance of approval standards by
approved guarantors; and
(2) minimize the risk presented to the Mortgage Insurance
Fund.
(e) Reports and Examinations.--For purposes of determining whether
an approved guarantor is fulfilling the requirements under this Act,
the Corporation shall have the authority to require reports from and
examine an approved guarantor, in the same manner and to the same
extent as the Federal Deposit Insurance Corporation has with respect to
an insured depository institution under the provisions of subsection
(a) of section 9 of the Federal Deposit Insurance Act (12 U.S.C. 1819).
(f) Enforcement.--The Corporation shall have the authority to
enforce the provisions of this Act with respect to an approved
guarantor, in the same manner and to the same extent as the Federal
Deposit Insurance Corporation has with respect to an insured depository
institution under the provisions of subsections (b) through (n) of
section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818).
(g) Capital Standards.--
(1) In general.--Pursuant to the requirement to establish
capital and related solvency standards under section 309(b),
the Corporation shall establish standards for approved
guarantors that require an approved guarantor to--
(A) hold 10 percent capital; and
(B) maintain solvency levels adequate for the
approved guarantor to withstand losses that might be
incurred by the approved guarantor in a period of
economic stress, including national and regional home
price declines, such as those observed during moderate
to severe recessions in the United States.
(2) Risk-sharing considerations.--For purposes of paragraph
(1), the Corporation shall consider the extent, amount, and
form of risk-sharing and risk mitigation through the use by
approved guarantors of credit risk-sharing mechanisms approved
pursuant to section 302(b)(4). The Corporation shall allow such
risk-sharing and risk mitigation to fulfill required amounts of
capital to be held under paragraph (1)(A) such that it ensures
an equivalent amount of loss absorption capacity as required
under section 302(a)(1)(B) while maintaining an appropriate
structure of capital as determined by the Corporation.
(3) Stress tests.--The Corporation shall conduct
appropriate stress tests of each approved guarantor that has
total assets of more than $10,000,000,000, provided that such
stress tests shall be--
(A) specifically tailored to the business model of
the approved guarantor; and
(B) utilized to--
(i) ensure the safety and soundness of the
approved guarantor; and
(ii) minimize the risk the approved
guarantor may present to the Mortgage Insurance
Fund.
(h) Resolution Authority for Failing Guarantors.--
(1) In general.--Notwithstanding any other provision of
Federal law, the law of any State, or the constitution of any
State, the Corporation shall--
(A) have the authority to act, in the same manner
and to the same extent, with respect to an approved
guarantor as the Federal Deposit Insurance Corporation
has with respect to an insured depository institution
under subsections (c) through (s) of section 11 of the
Federal Deposit Insurance Act (12 U.S.C. 1821), section
12 of the Federal Deposit Insurance Act (12 U.S.C.
1822), and section 13 of the Federal Deposit Insurance
Act (12 U.S.C. 1823), while tailoring such actions to
the specific business model of the approved guarantor,
as may be necessary to properly exercise such authority
under this subsection;
(B) in carrying out any authority provided in
subparagraph (A), act, in the same manner and to the
same extent, with respect to the Mortgage Insurance
Fund as the Federal Deposit Insurance Corporation may
act with respect to the Deposit Insurance Fund under
the provisions of the Federal Deposit Insurance Act set
forth in subparagraph (A);
(C) prescribe regulations governing the applicable
rights, duties, and obligations of an approved
guarantor placed into resolution under this subsection,
its creditors, counterparties, and other persons, as
the Corporation deems necessary to properly exercise
the authority provided in subparagraph (A);
(D) consistent with the authorities provided in
subparagraph (A), immediately place an insolvent
approved guarantor into receivership; and
(E) upon placing an approved guarantor into
receivership, treat single-family covered securities
insured by the Corporation under section 303 in the
same manner as the Federal Deposit Insurance
Corporation treats deposit liabilities under section
11(d)(11)(A)(ii) of the Federal Deposit Insurance Act
and insured deposits under section 11(f) of the Federal
Deposit Insurance Act, where the Corporation shall have
the same right of subrogation as the Federal Deposit
Insurance Corporation has under section 11(g) of the
Federal Deposit Insurance Act.
(2) Least-cost resolution required.--The Corporation may
not exercise any authority under paragraph (1) with respect to
any approved guarantor unless the total amount of the
expenditures by the Corporation and obligations incurred by the
Corporation in connection with the exercise of any such
authority with respect to such approved guarantor is the least
costly to the Mortgage Insurance Fund, consistent with the
least cost approach specified in the Federal Deposit Insurance
Act (12 U.S.C. 1811 et seq.), of all possible methods for
meeting the Corporation's obligations under this Act and
expeditiously concluding its resolution activities, subject to
section 13 of the Federal Deposit Insurance Act where the
Corporation and the Board of Directors shall have the same
authority as the Federal Deposit Insurance Corporation and the
Federal Deposit Insurance Corporation's board of directors.
(3) Taxpayer protection.--The Corporation, in carrying out
any authority provided in this subsection, shall prescribe
regulations to ensure that any amounts owed to the United
States, unless the United States agrees or consents otherwise,
shall have priority following administrative expenses of the
receiver when satisfying unsecured claims against an approved
guarantor, or the receiver therefor, that are proven to the
satisfaction of the receiver.
(i) Hearing.--Upon notice of denial of an application for approval
under subsection (b) or upon a notice of suspension or revocation of
the approved status of an approved guarantor under subsection (c), the
applicant or approved guarantor shall be afforded a hearing under
subsection (h) of section 8 of the Federal Deposit Insurance Act (12
U.S.C. 1818(h)), in the same manner and to the same extent as if the
Corporation were the appropriate Federal banking agency, provided that
the approved guarantor submits a request to the Corporation for a
hearing not later than 10 days after the date on which the notice is
published under subsection (b)(3) or (c)(3).
(j) Other Activities.--An approved guarantor shall be prohibited
from being an approved aggregator.
(k) Provision of Pool Level Insurance.--Subject to such standards
as the Corporation may provide, an approved guarantor may provide
insurance or other credit enhancement on a pool of eligible single-
family mortgage loans collateralizing a single-family covered security
insured under this title.
(l) Prohibited Activity.--An approved guarantor may not--
(1) originate eligible single-family mortgage loans; or
(2) be an affiliate of a person that actively engages in
the business of originating eligible single-family mortgage
loans.
(m) Guarantors Required to Pay Claims.--Subject to such standards
as the Corporation may provide, an approved guarantor may not for any
reason withhold payment of funds that would ensure holders of single-
family covered securities receive timely payment of principal and
interest on single-family covered securities. The Corporation shall by
regulation develop a process for the mediation and resolution of
disputed payment amounts.
SEC. 312. APPROVAL AND SUPERVISION OF AGGREGATORS.
(a) Standards for Approval of Mortgage Aggregators.--
(1) In general.--The Corporation shall develop, adopt, and
publish standards for the approval by the Corporation of
mortgage aggregators to deliver eligible single-family mortgage
loans to the Securitization Platform for securitization by such
aggregator as a single-family covered security.
(2) Required standards.--The standards required under
paragraph (1) shall include standards with respect to the
ability of mortgage aggregator to--
(A) aggregate eligible single-family mortgage loans
into pools, including multi-lender pools, as
appropriate;
(B) transfer investment risk and credit risk to
private market participants in accordance with the
credit risk-sharing mechanisms approved by the
Corporation under section 302;
(C) ensure equitable access to the secondary
mortgage market for single-family covered securities
for all institutions regardless of size or geographic
location; and
(D) ensure that eligible single-family mortgage
loans that collateralize a single-family covered
security insured under this title are originated in
compliance with the requirements of this Act.
(3) Additional required standards.--The standards required
under paragraph (1) shall also include--
(A) the financial history and condition of the
mortgage aggregator;
(B) the adequacy of the capital structure of the
mortgage aggregator;
(C) the capability of the management of the
mortgage aggregator;
(D) the general character and fitness of the
officers and directors of the mortgage aggregator,
including the compliance history of the mortgage
aggregator's officers and directors with Federal and
State laws and the rules and regulations promulgated by
self-regulatory organizations (as defined in section
3(a)(26) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(26)), as applicable;
(E) the risk presented by the mortgage aggregator
to the Mortgage Insurance Fund;
(F) the adequacy of insurance and fidelity coverage
of the mortgage aggregator;
(G) a requirement that the mortgage aggregator
submit audited financial statements to the Corporation;
(H) that the mortgage aggregator has the capacity
to aggregate mortgage loans in a manner that furthers
purposes of the Corporation described in section
201(b)(5);
(I) that the mortgage aggregator is in compliance
with section 210(a)(3); and
(J) any other standard the Corporation determines
necessary to protect the Mortgage Insurance Fund.
(4) Rule of construction.--Nothing in subparagraph (H) of
paragraph (3) shall be construed to prevent the Corporation
from approving a small or specialty mortgage aggregator,
provided that the mortgage aggregator has the capacity to
adequately diversify its risk to meet appropriate safety and
soundness concerns of the Corporation.
(5) Consultation and coordination.--To promote consistency
and minimize regulatory conflict, the Corporation shall consult
and coordinate with appropriate Federal and State regulators
and officials when developing standards pursuant to this
subsection.
(b) Application and Approval.--
(1) Application process.--
(A) In general.--The Corporation shall establish an
application process, in such form and manner and
requiring such information as the Corporation may
require, for the approval of a mortgage aggregator
under this section.
(B) Application review.--The Corporation shall
establish internal timelines for its processing of an
application under this section, including timelines for
any action to approve or to deny an application under
this section.
(2) Approval.--The Corporation may approve any application
made pursuant to paragraph (1), provided the mortgage
aggregator meets the standards established under subsection
(a).
(3) Denial.--The Corporation shall have the authority to
deny any application made pursuant to paragraph (1) if an
officer or director of the mortgage aggregator has, at any time
prior to the date of the approval of such application, been--
(A) subject to a statutory disqualification
pursuant to section 3(a)(39) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(39)); or
(B) suspended, removed, or prohibited from
participation pursuant to section 8(g) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(g)), prohibited
from certain action pursuant to paragraphs (6) or (7)
of section 8(e) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(e)), subject to an action resulting in
a written agreement or other written statement under
section 8(u)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(u)(1)), for which a violation may be
enforced by an appropriate Federal banking agency, or
subject to any final order issued with respect to any
administrative enforcement proceeding initiated by such
agency under section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818).
(4) Notice and publication.--The Corporation shall--
(A) provide prompt notice to a mortgage aggregator
of the approval or denial of any application of the
mortgage aggregator to become an approved aggregator
under this section;
(B) publish a notice in the Federal Register upon
approval of any mortgage aggregator; and
(C) maintain an updated list of approved
aggregators on the website of the Corporation.
(c) Requirement to Maintain Approval Status.--
(1) Authority to issue order.--If the Corporation
determines that an approved aggregator no longer meets the
standards for such approval or violates a requirement under
this Act, including any standard, regulation, or order
promulgated in accordance with this Act, the Corporation may--
(A) suspend or revoke the approved status of the
approved aggregator; or
(B) take any other action with respect to such
approved aggregator as may be authorized under this
Act.
(2) Rule of construction.--The suspension or revocation of
the approved status of an approved aggregator under this
section shall have no effect on the status as a covered
security of any covered security collateralized by eligible
mortgage loans with which the approved aggregator contracted
prior to the suspension or revocation.
(3) Publication.--The Corporation shall--
(A) promptly publish a notice in the Federal
Register upon suspension or revocation of the approval
of any approved aggregator; and
(B) maintain an updated list of such approved
aggregators on the website of the Corporation.
(4) Definition.--In this subsection, the term ``violate''
includes any action, taken alone or with others, for or toward
causing, bringing about, participating in, counseling, or
aiding or abetting, a violation of the requirements under this
Act.
(d) Prudential Standards for Supervision.--
(1) In general.--Subject to subsection (k)(1), the
Corporation shall prescribe prudential standards for approved
aggregators in order to--
(A) ensure--
(i) the safety and soundness of approved
aggregators; and
(ii) the maintenance of approval standards
by approved aggregators; and
(B) minimize the risk presented to the Mortgage
Insurance Fund.
(2) Recognition of distinctions between aggregators that
are insured depository institutions, affiliates of insured
depository institutions, and those that are not.--In carrying
out the requirements under paragraph (1), the Corporation
shall--
(A) distinguish between prudential standards for
approved aggregators that are insured depository
institutions, approved aggregators that are affiliates
of insured depository institutions, and approved
aggregators that are neither insured depository
institutions nor affiliates of insured depository
institutions; and
(B) consult and coordinate with Federal and State
banking agencies when establishing prudential standards
for approved aggregators that are insured depository
institutions and approved aggregators that are
affiliates of insured depository institutions, in order
to minimize duplication of and conflicts with the
prudential standards set by the appropriate Federal or
State banking agencies of insured depository
institutions or the affiliates of insured depository
institutions.
(3) Rule of construction.--Nothing in this section shall
supersede the prudential standards established by the
appropriate Federal banking agencies.
(e) Reports and Examinations.--For purposes of gathering
information to determine whether an approved aggregator is fulfilling
the requirements under this Act, the Corporation shall have the
authority to require reports from and examine an approved aggregator as
follows:
(1) Not insured depository institutions or affiliates.--For
an approved aggregator that is neither an insured depository
institution nor an affiliate of an insured depository
institution, the Corporation shall have the authority to
require reports from and examine an approved aggregator, in the
same manner and to the same extent as the Federal Deposit
Insurance Corporation has with respect to an insured depository
institution under the provisions of subsection (a) of section 9
of the Federal Deposit Insurance Act (12 U.S.C. 1819).
(2) Insured depository institutions and affiliates.--For an
approved aggregator that is an insured depository institution
or an affiliate of an insured depository institutions:
(A) Use of existing reports to reduce
examinations.--To the fullest extent possible, the
Corporation shall--
(i) rely on the examinations, inspections,
and reports of the appropriate Federal or State
banking agencies;
(ii) avoid duplication of examination
activities, reporting requirements, and
requests for information; and
(iii) ensure that the depository
institution holding company and the
subsidiaries of the depository institution
holding company are not subject to conflicting
supervisory demands by the Corporation and
appropriate Federal and State banking agencies.
(B) Examination authority.--If the Corporation
determines that the examinations, inspections, and
reports obtained pursuant to subparagraph (A) are
insufficient for the Corporation to adequately
supervise an approved aggregator for compliance with
this Act, the Corporation shall have the authority to
require reports from and examine the approved
aggregator for compliance with this Act, in the same
manner and to the same extent as the Board of Governors
of the Federal Reserve System has with respect to a
subsidiary of a bank holding companyunder the
provisions of paragraphs (1) and (2) of subsection (c)
of section 5 of the Bank Holding Company Act (12 U.S.C.
1844).
(C) Regulatory notice.--
(i) Regulatory notice.--Before commencing
an examination of an approved aggregator under
this paragraph, the Corporation shall provide
reasonable notice to, and coordinate with, the
appropriate Federal or State banking agency or
State regulatory agency.
(ii) Rule of construction.--Nothing in this
Act shall limit the authority of the
Corporation to require reports of and examine
an approved aggregator--
(I) to verify the sale of, and
funds received from, the first loss
position; and
(II) when the Corporation becomes
aware--
(aa) of a material threat
to the safety and soundness of
the approved aggregator;
(bb) that the approved
aggregator is in material
violation of this Act or the
rules promulgated by the
Corporation pursuant to this
Act; or
(cc) that the activities of
the approved aggregator
threaten the financial
stability of the housing
finance system or the Mortgage
Insurance Fund.
(f) Enforcement.--The Corporation shall have the authority to
enforce the provisions of this Act with respect to an approved
aggregator, in the same manner and to the same extent as the Federal
Deposit Insurance Corporation has with respect to an insured depository
institution under the provisions of subsections (b) through (n) of
section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818),
provided that to the extent that the Corporation and an appropriate
Federal banking agency are each authorized to enforce prudential
standards with respect to an approved aggregator that is an insured
depository institution or an affiliate of an insured depository
institution, the appropriate Federal banking agency shall have primary
authority to enforce such standards.
(g) Capital Standards.--For approved aggregators that are neither
an insured depository institution nor an affiliate of an insured
depository institution the following shall apply:
(1) In general.--Pursuant to the requirement to establish
capital and related solvency standards under section 309(b),
the Corporation shall establish standards for approved
aggregators that require an approved aggregator--
(A) to hold capital in an amount comparable to that
which is required to be held by insured depository
institutions and their affiliates with respect to their
applicable aggregating activities; and
(B) to maintain solvency levels adequate for the
approved aggregator to withstand losses that might be
incurred by the approved aggregator in a period of
economic stress, including national and regional home
price declines, such as those observed during moderate
to severe recessions in the United States.
(2) Stress tests.--The Corporation shall conduct
appropriate stress tests of each approved aggregator that has
total assets of more than $10,000,000,000, provided that such
stress tests shall be--
(A) specifically tailored to the business model of
the approved aggregator;
(B) utilized to--
(i) ensure the safety and soundness of the
approved aggregator; and
(ii) minimize the risk the approved
aggregator may present to the Mortgage
Insurance Fund; and
(C) coordinated with the Board of Governors of the
Federal Reserve System, if the approved aggregator is
an affiliate of an insured depository institution.
(h) Resolution Authority for Failing Aggregators.--
(1) In general.--Notwithstanding any other provision of
Federal law, the law of any State, or the constitution of any
State, the Corporation shall--
(A) have the authority to act, in the same manner
and to the same extent, with respect to an approved
aggregator that is not an insured depository
institution as the Federal Deposit Insurance
Corporation has with respect to an insured depository
institution under subsections (c) through (s) of
section 11 of the Federal Deposit Insurance Act (12
U.S.C. 1821), section 12 of the Federal Deposit
Insurance Act (12 U.S.C. 1822), and section 13 of the
Federal Deposit Insurance Act (12 U.S.C. 1823), while
tailoring such actions to the specific business model
of the approved aggregator, as may be necessary to
properly exercise such authority under this subsection;
(B) in carrying out any authority provided under
subparagraph (A), act, in the same manner and to the
same extent, with respect to the Mortgage Insurance
Fund as the Federal Deposit Insurance Corporation may
act with respect to the Deposit Insurance Fund under
the provisions of the Federal Deposit Insurance Act set
forth in subparagraph (A);
(C) prescribe regulations governing the applicable
rights, duties, and obligations of an approved
aggregator that is not an insured depository
institution placed into resolution under this
subsection, its creditors, counterparties, and other
persons, as the Corporation deems necessary to properly
exercise the authority provided in subparagraph (A);
and
(D) consistent with the authorities provided in
subparagraph (A), immediately place an insolvent
approved aggregator that is not an insured depository
institution into receivership.
(2) Rule of construction.--If an insolvent approved
aggregator is an insured depository institution, the
Corporation shall recommend, in writing, to such approved
aggregator's appropriate Federal banking agency or State
banking regulator to resolve such approved aggregator, which
agency shall have sole authority to resolve such aggregator
pursuant to section 11(c) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(c)) and other appropriate sections of the
Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.) or
appropriate Federal or State law, as applicable.
(3) Least-cost resolution required.--The Corporation may
not exercise any authority under paragraph (1) with respect to
any approved aggregator that is not an insured depository
institution unless the total amount of the expenditures by the
Corporation and obligations incurred by the Corporation in
connection with the exercise of any such authority with respect
to such approved aggregator is the least costly to the Mortgage
Insurance Fund, consistent with the least cost approach
specified in the Federal Deposit Insurance Act (12 U.S.C. 1811
et seq.), of all possible methods for meeting the Corporation's
obligations under this Act and expeditiously concluding its
resolution activities, subject to section 13 of the Federal
Deposit Insurance Act where the Corporation and the Board of
Directors shall have the same authority as the Federal Deposit
Insurance Corporation and the Federal Deposit Insurance
Corporation's board of directors.
(4) Taxpayer protection.--The Corporation, in carrying out
any authority provided in this subsection, shall prescribe
regulations to ensure that any amounts owed to the United
States, unless the United States agrees or consents otherwise,
shall have priority following administrative expenses of the
receiver when satisfying unsecured claims against an approved
aggregator, or the receiver therefor, that are proven to the
satisfaction of the receiver.
(i) Hearing.--Upon notice of denial of an application for approval
under subsection (b) or upon a notice of suspension or revocation of
the approved status of an approved aggregator under subsection (c), the
applicant or approved aggregator shall be afforded a hearing under
subsection (h) of section 8 of the Federal Deposit Insurance Act (12
U.S.C. 1818(h)), in the same manner and to the same extent as if the
Corporation were the appropriate Federal banking agency, provided that
the approved aggregator submits a request to the Corporation for a
hearing not later than 10 days after the date on which the notice is
published under subsection (b)(3) or (c)(3).
(j) Other Activities.--An approved aggregator shall be prohibited
from being an approved guarantor.
(k) Information Sharing Regarding Insured Depository Institutions
and Affiliates of Insured Depository Institutions.--
(1) By the corporation.--To the extent the Corporation has
relevant information indicating that an approved aggregator
that is an insured depository institution or an affiliate of an
insured depository institution (A) faces a material threat to
its safety and soundness, including insufficient capital, (B)
may be in material violation of Federal banking law, or (C) may
threaten the financial stability of the housing finance system
or the Mortgage Insurance Fund, the Corporation shall notify,
in writing, such appropriate Federal banking agency that such
conditions exist. The Corporation shall have no authority to
enforce prudential standards established by an appropriate
Federal banking agency pursuant to the appropriate Federal
banking agency's authority.
(2) By federal and state banking agencies.--To the extent
an appropriate Federal banking agency or State banking agency
has relevant information indicating that an approved aggregator
that is an insured depository institution or an affiliate of an
insured depository institution (A) faces a material threat to
its safety and soundness, including insufficient capital, (B)
may be in material violation of this Act or the rules
promulgated by the Corporation pursuant to this Act, or (C) may
threaten the financial stability of the housing finance system
or the Mortgage Insurance Fund, such appropriate Federal
banking agency or State banking agency shall notify, in
writing, the Corporation that such conditions exist.
(l) Rule of Construction Regarding Preservation of Corporation
Authority.--Nothing in this section limits, or shall be construed to
limit, the authority of the Corporation to provide exemptions to, or
adjustments for, the provisions of this section based on the asset size
of an approved aggregator, or other criteria, as the Corporation deems
appropriate, in order to reduce regulatory burdens while appropriately
balancing protection of the Mortgage Insurance Fund.
(m) Federal Home Loan Banks, Joint Offices, and Bank Subsidiaries
as Aggregators.--
(1) Federal home loan bank act.--
(A) Establishment of joint offices and
subsidiaries.--
(i) Amendment.--Section 12 of the Federal
Home Loan Bank Act (12 U.S.C. 1432) is amended
by adding at the end the following:
``(c) Subject to such regulations as may be prescribed by the
Agency, in coordination with the Federal Mortgage Insurance
Corporation, 1 or more Federal Home Loan Banks may establish a
subsidiary or joint office in any form under the laws of any State,
subject to the approval of the Corporation. Any subsidiary or joint
office established under this subsection shall be restricted to
engaging in activities related to being an approved aggregator, as that
term is defined under section 2 of Housing Finance Reform and Taxpayer
Protection Act of 2014.
``(d) Subject to such regulations as may be prescribed by the
Agency, in coordination with the Federal Mortgage Insurance
Corporation, 1 or more Federal Home Loan Banks or any subsidiary or
joint office of a Federal Home Loan Bank established under subsection
(c) may apply to become, and may become, an approved aggregator, as
that term is defined under section 2 of the Housing Finance Reform and
Taxpayer Protection Act of 2014.''.
(ii) Effective date.--The amendments made
by clause (i) shall take effect on the system
certification date.
(B) Cdfis.--
(i) Amendment.--Section 10(a) of the
Federal Home Loan Bank Act (12 U.S.C. 1430(a))
is amended--
(I) in paragraph (2)(B), by
inserting ``or community development
financial institution (as defined in
section 103 of the Riegle Community
Development and Regulatory Improvement
Act of 1994 (12 U.S.C. 4702))'' after
``community financial institution'';
and
(II) in paragraph (3)(E), by
inserting ``or community development
financial institution (as defined in
section 103 of the Riegle Community
Development and Regulatory Improvement
Act of 1994 (12 U.S.C. 4702))'' after
``community financial institution''.
(ii) Effective date.--The amendment made by
clause (i) shall take effect on the agency
transfer date.
(2) Not consolidated debt.--Notwithstanding section 11 of
the Federal Home Loan Bank Act (12 U.S.C. 1431), any covered
security secured by eligible mortgage loans transferred to the
Platform by a Federal Home Loan Bank or subsidiary or joint
office thereof, acting as an approved aggregator, shall not be
designated as, or considered to be the joint and several
obligations of the Federal Home Loan Banks.
SEC. 313. APPROVAL OF PRIVATE MORTGAGE INSURERS.
(a) Standards for Approval of Private Mortgage Insurers.--
(1) In general.--The Corporation shall develop, adopt, and
publish standards for the approval by the Corporation of
private mortgage insurers to provide private mortgage loan
insurance on eligible single-family mortgage loans that
collateralize single-family covered securities.
(2) Required standards.--The standards required under
paragraph (1) shall include--
(A) the financial history and current financial
condition, including capital and loss reserves to
comply with any applicable State law or regulation, of
the private mortgage insurer;
(B) the capability of the management of the private
mortgage insurer;
(C) the general character and fitness of the
officers and directors of the private mortgage insurer,
including the compliance history of the private
mortgage insurer's officers and directors with Federal
and State laws and the rules and regulations
promulgated by self-regulatory organizations (as
defined in section 3(a)(26) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(26)), as applicable;
(D) that the private mortgage insurer has the
capacity to insure eligible single-family mortgage
loans in a manner to comply with any applicable State
law or regulation and that furthers the purposes of the
Corporation as described in section 201(b)(5);
(E) the risk presented by the private mortgage
insurer to the Mortgage Insurance Fund;
(F) the adequacy of insurance and fidelity coverage
of the private mortgage insurer;
(G) a requirement that the private mortgage insurer
submit audited financial statements to the Corporation;
and
(H) any other standard the Corporation, after
notice and public comment, determines necessary to
avoid significant risk to the Mortgage Insurance Fund,
provided the standard does not materially conflict with
State law.
(3) Rule of construction.--Nothing in subparagraph (D) of
paragraph (2) shall be construed to prevent the Corporation
from approving a small or specialty private mortgage insurer,
provided that the private mortgage insurer has the capacity to
adequately diversify its risk to meet solvency standards
required by any applicable State law or regulation.
(4) Consultation and coordination.--To promote consistency
and minimize regulatory conflict, the Corporation shall consult
and coordinate with appropriate Federal regulators and State
regulators and officials when developing standards pursuant to
this subsection.
(b) Application and Approval.--
(1) Application process.--
(A) In general.--The Corporation shall establish an
application process, in such form and manner and
requiring such information as the Corporation may
require, for the approval of a private mortgage insurer
under this section.
(B) Application review.--The Corporation shall
establish internal timelines for its processing of an
application under this section, including timelines for
any action to approve or to deny an application under
this section.
(C) Notification.--The Corporation shall notify the
appropriate State insurance regulator upon receipt of
any application by a private mortgage insurer to become
an approved private mortgage insurer under this
section.
(2) Approval.--The Corporation may approve any application
made pursuant to paragraph (1), provided the private mortgage
insurer meets the standards established under subsection (a).
(3) Denial.--The Corporation shall have the authority to
deny any application made pursuant to paragraph (1) if an
officer or director of the private mortgage insurer has, at any
time prior to the date of the approval of such application,
been--
(A) subject to a statutory disqualification
pursuant to section 3(a)(39) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(39)); or
(B) suspended, removed, or prohibited from
participation pursuant to section 8(g) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(g)), prohibited
from certain action pursuant to paragraphs (6) or (7)
of section 8(e) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(e)), subject to an action resulting in
a written agreement or other written statement under
section 8(u)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(u)(1)), for which a violation may be
enforced by an appropriate Federal banking agency, or
subject to any final order issued with respect to any
administrative enforcement proceeding initiated by such
agency under section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818).
(4) Notice and publication.--The Corporation shall--
(A) provide prompt notice to a private mortgage
insurer of the approval or denial of any application of
the private mortgage insurer to become an approved
private mortgage insurer under this section;
(B) publish a notice in the Federal Register upon
approval of any private mortgage insurer;
(C) maintain an updated list of approved private
mortgage insurers on the website of the Corporation;
and
(D) provide prompt notice to the appropriate State
insurance regulator upon the approval or denial of any
application of a private mortgage insurer to become an
approved private mortgage insurer under this section.
(5) Grandfathered insurers of the enterprises.--Any private
mortgage insurer who was approved to insure mortgage loans for
an enterprise on the date that is 1 day before the date the
Corporation publishes the provisional standards for the
approval of private mortgage insurers required under section
607(a)(2), and was in good standing as of such date--
(A) shall be deemed conditionally approved for a
period of 1 year from the date on which the Corporation
publishes the provisional standards for the approval of
private mortgage insurers required under section
607(a)(2);
(B) shall, not later than the date which is 6
months after date on which the Corporation publishes
the standards required under subsection (a), apply for
approved status via the application process described
in this subsection to be eligible for approved status;
and
(C) shall, provided the private mortgage insurer
has complied with subparagraph (B), receive a
determination from the Corporation as to the approval
or denial of its application to become an approved
private mortgage insurer prior to the expiration of the
1-year period described under subparagraph (A).
(c) Requirement to Maintain Approval Status.--
(1) Authority to issue order.--If the Corporation
determines that an approved private mortgage insurer no longer
meets the standards for such approval or violates a requirement
under this section, including any standard, regulation, or
order promulgated in accordance with this Act, the Corporation
may--
(A) provide prompt notice to the appropriate State
insurance regulator that the Corporation determines
that an approved private mortgage insurer no longer
meets the standard for such approval;
(B) suspend or revoke the approved status of the
approved private mortgage insurer; or
(C) take any other action with respect to such
approved private mortgage insurer as may be authorized
under this Act.
(2) Rule of construction.--The suspension or revocation of
the approved status of an approved private mortgage insurer
under this section shall have no effect on the status as a
covered security of any covered security collateralized by
eligible mortgage loans with which the approved private
mortgage insurer contracted prior to the suspension or
revocation.
(3) Publication.--The Corporation shall--
(A) promptly publish a notice in the Federal
Register upon suspension or revocation of the approval
of any approved private mortgage insurer; and
(B) maintain an updated list of such approved
private mortgage insurers on the website of the
Corporation.
(4) Definition.--In this subsection, the term ``violate''
includes any action, taken alone or with others, for or toward
causing, bringing about, participating in, counseling, or
aiding or abetting, a violation of the requirements under this
Act.
(d) State Regulation.--The appropriate State insurance regulator of
an approved private mortgage insurer has primary authority to examine
and supervise the approved private mortgage insurer.
(e) Reports and Examinations.--
(1) In general.--For purposes of determining whether an
approved private mortgage insurer is fulfilling the
requirements under this Act, the Corporation may, in
coordination with the appropriate State insurance regulator of
the approved private mortgage insurer, including providing the
appropriate State insurance regulator the opportunity to join
the Corporation in an on-site examination, examine or review
any approved private mortgage insurer if the Corporation has
substantial reason to believe--
(A) that an approved private mortgage insurer has
engaged in a material violation or pattern of
violations of this Act or the rules promulgated
pursuant to this Act; or
(B) that the activities of an approved private
mortgage insurer may threaten the financial stability
of the housing finance system or the Mortgage Insurance
Fund.
(2) 3-year compliance examination.--In addition to the
authority under paragraph (1), the Corporation shall conduct an
examination of an approved private mortgage insurer once, but
not more than once, every 3 years, provided the approved
private mortgage insurer has not been examined on-site by an
appropriate State insurance regulator.
(3) Coordination.--In conducting an exam or review
authorized pursuant to paragraph (1) or paragraph (2), the
Corporation shall--
(A) provide reasonable notice to, and coordinate
with, the appropriate State insurance regulator for an
approved private mortgage insurer before commencing an
examination of the approved private mortgage insurer
under this section;
(B) to the fullest extent possible, avoid
duplication of examination activities, reporting
requirements, and requests for information, including
by relying on existing examinations, inspections, and
reports of the appropriate State insurance regulator;
and
(C) ensure that the approved private mortgage
insurer is not subject to conflicting supervisory
demands by the Corporation and State insurance
regulators, as appropriate.
(4) Notice of determination.--The State insurance regulator
of an approved private mortgage insurer shall notify the
Corporation if there has been a final determination that the
approved private mortgage insurer is in a hazardous financial
condition provided that the Corporation agrees to maintain the
confidentiality or privileged status of the document, material,
or other information received from the State insurance
regulator of the approved private mortgage insurer.
(f) Enforcement.--
(1) In general.--The Corporation shall have the authority
to enforce the provisions of this section with respect to a
private mortgage insurer, in the same manner and to the same
extent as the Federal Deposit Insurance Corporation has with
respect to an insured depository institution under the
provisions of subsections (b) through (n) of section 8 of the
Federal Deposit Insurance Act (12 U.S.C. 1818), provided the
Corporation demonstrates that such enforcement action is
necessary to avoid significant risk to the Mortgage Insurance
Fund.
(2) Notification.--Prior to taking any enforcement action
against an approved private mortgage insurer, the Corporation
shall promptly notify, consult, and coordinate with the
appropriate State insurance regulator.
(g) Resolution Authority.--
(1) In general.--For any approved private mortgage insurer
that the Corporation has substantial reason to believe is
insolvent, as defined by applicable State law, and would
otherwise be subject to receivership proceedings under such
applicable State law, the Corporation shall recommend, in
writing, that the State insurance regulator for such approved
private mortgage insurer take such actions as are necessary and
authorized under applicable State law to resolve such approved
private mortgage insurer.
(2) Backup authority.--Notwithstanding the requirement
under paragraph (1), if, after the end of the 60-day period
beginning on the date on which the Corporation provides its
written recommendation pursuant to paragraph (1), the
appropriate State insurance regulator has not filed the
appropriate judicial action in the appropriate State court to
place such approved private mortgage insurer into receivership
under the laws and requirements of the State, the Corporation
shall have the authority to stand in the place of the
appropriate regulatory agency and file the appropriate judicial
action in the appropriate State court to place such approved
private mortgage insurer into receivership under the laws and
requirements of the State.
(h) Hearing.--Upon notice of denial of an application for approval
under subsection (b) or upon a notice of suspension or revocation of
the approved status of an approved private mortgage insurer under
subsection (c), the applicant or approved private mortgage insurer
shall be afforded a hearing under subsection (h) of section 8 of the
Federal Deposit Insurance Act (12 U.S.C. 1818(h)), in the same manner
and to the same extent as if the Corporation were the appropriate
Federal banking agency, provided that the approved private mortgage
insurer submits a request to the Corporation for a hearing not later
than 10 days after the date on which the notice is published under
subsection (b)(3) or (c)(3).
(i) Rule of Construction Regarding Preservation of Corporation
Authority.--Nothing in this section limits, or shall be construed to
limit, the authority of the Corporation to provide exemptions to, or
adjustments for, the provisions of this section based on the asset size
of approved private mortgage insurers, or other criteria, as the
Corporation deems appropriate, in order to reduce regulatory burdens
while appropriately balancing the protection of the Mortgage Insurance
Fund.
SEC. 314. APPROVAL OF SERVICERS.
(a) Standards for Approval of Servicers.--
(1) In general.--The Corporation shall, by regulation,
establish standards for the approval by the Corporation of
servicers to administer eligible single-family mortgage loans,
including standards with respect to--
(A) the collection and forwarding of principal and
interest payments;
(B) the maintenance of escrow accounts;
(C) the collection and payment of taxes and bona
fide insurance premiums;
(D) the maintenance of records on eligible single-
family mortgage loans;
(E) the establishment of loss mitigation options
that seek to enhance value and prevent, to greatest
extent possible, the need to trigger a claim on
insurance offered by the Corporation pursuant to this
title, including by--
(i) establishing, by rule, a consistent
process through which borrowers, who have
submitted an initial loan modification request,
will be evaluated by servicers and the
securitization trust for an affordable loan
modification; and
(ii) providing clear guidance regarding the
treatment of second lien holders, taking into
consideration the priority and subordination of
liens under Federal and State laws;
(F) the advancement of principal and interest
payments to investors in the case of a delinquency by a
borrower until such time as the borrower has made all
payments in arrears, the borrower has entered into a
repayment plan or modification, an approved entity or
regulated entity has purchased the loan, or the
property securing the eligible single-family mortgage
loan has been liquidated, including specification that
the servicer shall recover advances upon permanent
modification of a borrower's mortgage loan;
(G) the establishment of procedures under which the
servicer may initiate or continue a foreclosure, in
accordance with applicable Federal and State laws and
regulations that--
(i) take into account--
(I) the servicer's evaluation of,
and agreements with, borrowers for loss
mitigation options pursuant to
subparagraph (E);
(II) potential losses caused by
delays in collateral recovery; and
(III) the need to minimize risks to
the Mortgage Insurance Fund; and
(ii) provide the borrower, upon request,
documentation establishing the right of the
mortgagee to foreclose;
(H) the provision of eligible single-family
mortgage loan information to borrowers, upon request,
including a copy of the pooling and servicing agreement
and securitization trust requirements that address the
ability of the servicer to offer loss mitigation
options; and
(I) implementing the terms of any loss mitigation
and foreclosure prevention as required by any uniform
securitization agreement developed under section 326.
(2) Additional required standards.--The standards required
under paragraph (1) shall also include--
(A) the financial history and condition of the
servicer;
(B) the capability of the management of the
servicer;
(C) the general character and fitness of the
officers and directors of the servicer, including the
compliance history of the servicer's officers and
directors with Federal and State laws and the rules and
regulations promulgated by self-regulatory
organizations (as defined in section 3(a)(26) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(26)),
as applicable;
(D) the risk presented by such servicer to the
Mortgage Insurance Fund; and
(E) minimum operational and management standards
for the servicer, including with respect to--
(i) internal controls;
(ii) recordkeeping;
(iii) internal audit systems;
(iv) the maintenance of adequate liquidity
and reserves; and
(v) reporting standards to the Corporation
and investors, including audited financial
statements.
(3) Coordination, consistency, and comparability.--To
promote consistency and minimize regulatory conflict, the
Comptroller of the Currency, the Board of Governors of the
Federal Reserve System, the Federal Deposit Insurance
Corporation, the Bureau of Consumer Financial Protection, the
National Credit Union Administration, and the Corporation
shall--
(A) consult and coordinate with each other in
developing and issuing regulations with respect to the
rules and standards for the servicing of eligible
single-family mortgage loans; and
(B) review existing regulations with respect to
mortgage loan servicing rules and standards.
(4) Consultation and coordination with state regulators.--
To promote consistency and minimize regulatory conflict, the
Corporation shall consult and coordinate with appropriate State
regulators in developing and issuing regulations with respect
to the rules and standards for the servicing of eligible
single-family mortgage loans.
(b) Application and Approval.--
(1) Application process.--The Corporation shall establish
an application process--
(A) in such form and manner and requiring such
information as the Corporation may require, for the
approval of a servicer under this section; and
(B) that does not discriminate against or otherwise
disadvantage small servicers.
(2) Approval.--
(A) In general.--The Corporation may approve any
application made pursuant to paragraph (1) provided the
servicer meets the standards adopted under subsection
(a).
(B) Prompt notice.--The Corporation shall notify
any applicant seeking to become an approved servicer
under this section of the decision of the Corporation
with respect to such approval as promptly as
practicable.
(3) Denial.--The Corporation shall have the authority to
deny any application made pursuant to paragraph (1) if an
officer or director of the servicer has, at any time prior to
the date of the approval of such application, been--
(A) subject to a statutory disqualification
pursuant to section 3(a)(39) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(39)); or
(B) suspended, removed, or prohibited from
participation pursuant to section 8(g) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(g)), prohibited
from certain action pursuant to paragraphs (6) or (7)
of section 8(e) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(e)), subject to an action resulting in
a written agreement or other written statement under
section 8(u)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(u)(1)), for which a violation may be
enforced by an appropriate Federal banking agency, or
subject to any final order issued with respect to any
administrative enforcement proceeding initiated by such
agency under section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818).
(4) Grandfathered servicers of the enterprises.--Any
servicer who was approved to service mortgage loans for an
enterprise on the date that is 1 day before the date of
enactment of this Act, and was in good standing as of such
date, shall be deemed to be an approved servicer for purposes
of initial servicer approval by the Corporation and thereafter
subject to the requirements of this section as an approved
servicer.
(5) Small servicer exemption.--
(A) In general.--The Corporation shall, by
regulation, provide exemptions to, or adjustments for,
the provisions of this section for approved servicers
that service 7,500 or fewer eligible single-family
mortgage loans, in order to reduce regulatory burdens
while appropriately balancing protection of the
Mortgage Insurance Fund.
(B) Limitation of exemption eligibility.--An
approved servicer and its subsidiaries and affiliates
shall be considered a single entity for purposes of the
exemption under subparagraph (A).
(6) RESPA amendment.--Section 6 of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2605) is amended
by adding at the end the following:
``(n) Small Servicer Exemption.--
``(1) In general.--The Bureau shall, by regulation, provide
exemptions to, or adjustments for, the provisions of this
section for servicers that service 7,500 or fewer mortgage
loans, in order to reduce regulatory burdens while
appropriately balancing consumer protections.
``(2) Limitation of exemption eligibility.--An approved
servicer and its subsidiaries and affiliates shall be
considered a single entity for purposes of the exemption under
paragraph (1).''.
(7) Publication.--The Corporation shall--
(A) publish a notice in the Federal Register upon
approving any servicer under this section; and
(B) maintain an updated list of approved servicers
on the website of the Corporation.
(c) Review, Suspension, and Revocation of Approved Status.--
(1) Review.--
(A) In general.--The Corporation may examine or
review any approved servicer if the Corporation has
substantial reason to believe that a servicer has
engaged in a material violation or pattern of
violations of this Act or the rules promulgated
pursuant to this Act, including--
(i) any failure by an approved servicer to
comply with terms set forth in any uniform
securitization agreement developed under
section 326; or
(ii) through the identification of any
information indicating abnormal eligible
single-family mortgage loan performance within
the loan portfolio of the approved servicer.
(B) 2-year compliance examination.--In addition to
the authority under subparagraph (A), the Corporation
shall conduct an examination or review of an approved
servicer once, but not more than once, every 2 years,
provided however that such examination or review shall
be limited to compliance with this Act or regulations
promulgated under this Act.
(C) Coordination.--In conducting an exam or review
authorized pursuant to subparagraph (A) or subparagraph
(B), the Corporation shall--
(i) provide reasonable notice to, and
coordinate with, the appropriate Federal
banking agency, the Bureau of Consumer
Financial Protection, or State regulatory
agency, as appropriate, for an approved
servicer that is regulated by such Federal
banking agency, the Bureau of Consumer
Financial Protection, or State regulatory
agency before commencing an examination of the
approved servicer under this section; and
(ii) to the fullest extent possible--
(I) rely on the examinations,
inspections, and reports of the
appropriate Federal banking agency, the
Bureau of Consumer Financial
Protection, or State regulatory agency,
as appropriate, for an approved
servicer that is regulated by such
Federal banking agency, the Bureau of
Consumer Financial Protection, or State
regulatory agency;
(II) avoid duplication of
examination activities, reporting
requirements, and requests for
information; and
(III) ensure that approved
servicers are not subject to
conflicting supervisory demands by the
Corporation, appropriate Federal
banking agencies, the Bureau of
Consumer Financial Protection, or State
regulatory agencies, as appropriate.
(D) Self certification.--
(i) In general.--To facilitate any exam or
review authorized pursuant to subparagraph (A)
or subparagraph (B), each approved servicer
shall, on an annual basis and in accordance
with such requirements as the Corporation may
establish, certify in writing to the
Corporation that the approved servicer is in
compliance with the standards identified under
paragraphs (1) and (2) of subsection (a), all
other requirements of this Act, and any rules
promulgated pursuant to this Act.
(ii) Penalty for false or misleading
certifications.--
(I) Enforcement.--The Corporation
shall have the authority to impose
enforcement penalties with respect to
an approved servicer who submits a
certification under clause (i) that
contains false or misleading
information, in the same manner and to
the same extent as the Federal Deposit
Insurance Corporation has with respect
to insured depository institutions
under the provisions of subsections (b)
through (n) of section 8 of the Federal
Deposit Insurance Act (12 U.S.C. 1818),
except that the penalties under
subsection (j) of such section 8 shall
not apply.
(II) Notification.--If the
Corporation takes any enforcement
action against an approved servicer,
the Corporation shall notify the
approved servicer's appropriate Federal
banking agency, the Bureau of Consumer
Financial Protection, or State
regulator, if applicable.
(2) Suspension or revocation.--
(A) Corporation authority.--If the Corporation
determines, in any exam or review authorized pursuant
to paragraph (1), that an approved servicer no longer
meets the standards for approval, the Corporation may
suspend or revoke the approved status of such servicer.
(B) Rule of construction.--The suspension or
revocation of an approved servicer's approved status
under this paragraph shall have no effect on the status
of any covered security.
(3) Publication.--The Corporation shall--
(A) publish in the Federal Register a list of any
approved servicers who have their approved status
suspended or revoked; and
(B) maintain an updated list of such servicers on
the website of the Corporation.
(d) Appeals.--
(1) In general.--
(A) Appeals of denials of application.--A servicer
who submits an application under subsection (b)(1) to
become an approved servicer may appeal a decision of
the Corporation denying such application.
(B) Appeals of denials of benefits or suspensions
of participation.--An approved servicer may appeal a
decision of the Corporation suspending or revoking the
approved status of such servicer.
(2) Filing of appeal.--Any servicer who files an appeal
under paragraph (1) shall file the appeal with the Corporation
not later than 90 days after the date on which the person
receives notice of the decision of the Corporation being
appealed.
(3) Final determination.--The Corporation shall make a
final determination with respect to an appeal under paragraph
(1) not later than 180 days after the date on which the appeal
is filed under paragraph (2).
(e) Transfer of Mortgage Servicing Duties.--
(1) In general.--For any eligible single-family mortgage
loan or pool of eligible single-family mortgage loans
collateralizing a single-family covered security insured by the
Corporation under this title and in accordance with rules
promulgated by the Corporation, the Corporation may require the
approved servicer of any such eligible single-family mortgage
loan or pool of eligible single-family mortgage loans to enter
into a subservicing arrangement with any independent specialty
servicer approved by the Corporation.
(2) Rules.--The rules required under paragraph (1) shall--
(A) set forth with clarity the performance
conditions of an approved servicer that would warrant
or necessitate the use of the authority granted to the
Corporation under this subsection;
(B) require that the performance condition
warranting or necessitating the use of such authority
be of such type or character so as to materially and
adversely affect the ability of the Corporation to
recover any amounts owed to the Corporation;
(C) for purposes of subparagraph (B), define the
term ``materially and adversely affect'';
(D) require that any approved servicer whose
servicing duties are subject to this subsection be
provided a reasonable amount of time, provided that
such time does not present a risk to the Mortgage
Insurance Fund, to rebut, address, or correct any
determination of the Corporation regarding a
performance condition described under subparagraph (A);
(E) only permit the Corporation to carry out the
authority granted under this subsection upon expiration
of the time-period allowed under subparagraph (D);
(F) limit the scope of any such authority to
eligible single-family mortgage loans that share
similar underwriting, borrower, and performance
characteristics;
(G) ensure that the scope of any such authority is
not applied broadly and without further limitation; and
(H) notwithstanding subparagraphs (B) through (G),
provide that an approved servicer may be subject to
more extensive programmatic discipline or correction
measures, as determined by the Corporation, if, during
any 5-year period--
(i) the servicing duties that are the
subject of the current use of the Corporation's
authority under this subsection marks the third
instance of the use of such authority with
respect to the same approved servicer; and
(ii) with respect to the prior 2 separate
and individual instances of the use of such
authority, the same approved servicer failed to
cure any identified performance conditions or
implement corrective measures as determined by
the Corporation pursuant to subparagraph (D).
(3) Cessation of compensation.--If a transfer of servicing
duties occurs under paragraph (1), the approved servicer from
whom such servicing duties are extinguished shall cease to
receive compensation for any such servicing activities related
to those duties.
(4) Servicer succession plans.--
(A) In general.--The Corporation may establish a
succession plan for each approved servicer, including
provisions for--
(i) a specialized servicer to replace the
approved servicer if the performance of the
eligible single-family mortgage loan pool
serviced by such approved servicer deteriorates
to specified levels; and
(ii) a plan to achieve continuity of
contact for borrowers upon the replacement of
the approved servicer.
(B) Rule of construction.--Nothing in this
paragraph shall be construed as authorizing the
Corporation to circumvent, evade, or otherwise
disregard the rules established in paragraphs (1) and
(2) when facilitating a transfer of servicing rights.
(f) Petitions for Change of Servicer by Private Market Holders.--
(1) Development of process.--The Corporation shall develop
a process by which private market holders of the first loss
position in a single-family covered security may petition the
Corporation for a change in approved servicers, including
specialized servicers for individual eligible single-family
mortgage loans, if the private market holders can demonstrate
that its investment was not appropriately protected by the
current approved servicer, including by failing to meet any
standard or requirement identified under paragraphs (1) and (2)
of subsection (a).
(2) Cessation of compensation.--If a change in approved
servicers is approved under paragraph (1)--
(A) the change must occur within 30 days after the
petition is approved by the Corporation; and
(B) once the change required under subparagraph (A)
has occurred, the approved servicer from whom such
servicing rights are extinguished shall cease to
receive compensation for any such servicing activities
related to those rights.
(g) Notice of Transfer of Servicing Rights by Current Servicer.--
(1) Notice to fmic.--The Corporation shall develop a
process by which an approved servicer shall provide notice to
the Corporation of any transfer of any servicing rights of such
approved servicer to another approved servicer.
(2) Authority of fmic to prevent, halt, or rescind a
transfer.--The process required to be developed under paragraph
(1) shall include the development of procedures to permit the
Corporation to prevent, halt, or rescind any transfer of
servicing rights from an approved servicer to a servicer that
is not approved to service eligible single-family mortgage
loans under this section or to any servicer whose approved
status has been suspended or revoked pursuant to subsection
(c)(2).
(h) General Authority With Respect to the Transfer of Servicing
Rights.--The Corporation may develop such other standards with respect
to the transfer of servicing rights by approved servicers as the
Corporation determines necessary and appropriate to facilitate an
orderly transfer of servicing rights after the suspension or revocation
of the approved status of a servicer pursuant to subsection (c)(2).
(i) Study of Servicer Compensation Related to Non-performing
Single-family Mortgage Loans.--
(1) In general.--The Corporation shall carry out a study of
servicing compensation for non-performing single-family
mortgage loans, including alternatives to existing servicing
compensation structures.
(2) Recommendations.--The study required under paragraph
(1) shall include recommendations for the optimal structure of
servicer compensation, in order to--
(A) improve service for borrowers;
(B) reduce financial risk to servicers; and
(C) provide flexibility for guarantors to better
manage non-performing single-family mortgage loans.
(3) Report.--Not later than 1 year after the date of
enactment of this Act, the Chairperson shall issue a report to
the Congress containing any findings and determinations made in
carrying out the study required under paragraph (1).
(j) Rule of Construction.--Nothing in this section shall prohibit a
mortgage originator from retaining rights to service the eligible
single-family mortgage loans it originated, provided that the mortgage
originator--
(1) meets the standards to be an approved servicer under
subsection (a); or
(2) qualifies for an exemption under subsection (b)(5).
SEC. 315. AUTHORITY TO ESTABLISH AND APPROVE SMALL LENDER MUTUALS.
(a) Establishment of Small Lender Mutuals.--
(1) In general.--The Corporation shall establish 1 entity
known as the ``Small Lender Mutual'', which shall be an
approved small lender mutual, owned by and operated for the
benefit of its members, for the purposes of subsection (b).
(2) Approval of other small lender mutuals.--The
Corporation shall, by regulation, establish standards for the
approval by the Corporation of such other small lender mutuals
as may be necessary to facilitate the purposes described in
subsection (b).
(b) Purposes.--The purpose of the Small Lender Mutual established
under subsection (a)(1) and any small lender mutual approved under
subsection (a)(2) (in this section collectively referred to as a
``small lender mutual'') shall be as follows:
(1) To address the needs of small mortgage lenders with
respect to covered securities.
(2) To purchase eligible mortgage loans to securitize a
covered security from its member participants--
(A) for cash, on a single loan basis; or
(B) through the sale of a portion of a multi-lender
pool or multi-guarantor pool collateralized by eligible
mortgage loans securitized in a covered security.
(3) To obtain all necessary and appropriate credit
enhancements for covered securities to support the lending
activities of small mortgage lenders.
(4) To implement policies and procedures that ensure that
the access rules and fees of any small lender mutual are not
prohibitive and do not discriminate against originators of
eligible mortgage loans or any entity that aggregates eligible
mortgage loans on the basis of size, composition, business
line, or loan volume.
(5) To appropriately manage the risk of the Small Lender
Mutual to ensure the continued safety and soundness of such
mutual.
(c) Provisions to Ensure the Effective Operations of Small Lender
Mutuals.--
(1) Requirement to assess needs of small lender mutual.--
Not later than 1 year after the date of enactment of this Act,
the Federal Housing Finance Agency shall conduct an assessment
of the intellectual property, technology, infrastructure, and
processes of the enterprises relating to the operation and
maintenance of the systems needed to ensure small mortgage
lender access to the secondary mortgage market to determine the
needs of the Small Lender Mutual established under subsection
(a)(1). The assessment required under this paragraph shall be
submitted to the Transition Committee established under section
404, or the Board if confirmed pursuant to section 404(d), and
included in the transition plan required under section 602.
(2) Authority to manage disposition of enterprise
infrastructure.--After the agency transfer date and before the
system certification date, the Federal Housing Finance Agency,
consistent with title VI--
(A) shall dispose of the intellectual property,
technology, infrastructure, and processes of the
enterprises relating to the operation and maintenance
of the systems needed for small mortgage lenders to
access the secondary mortgage market; and
(B) may manage such disposition through the sale,
transfer, licensing, or leasing of such intellectual
property, technology, infrastructure, and processes of
an enterprise to the Small Lender Mutual established
under subsection (a)(1) to ensure that the Small Lender
Mutual can access the secondary mortgage market and
fulfill the purposes of the section.
(3) Transfer of necessary technology.--After the agency
transfer date and before the system certification date, the
Federal Housing Finance Agency, consistent with section 604(h),
may transfer to a subsidiary or subsidiaries of the enterprises
any function, activity, infrastructure, property, including
intellectual property, technology, or any other object or
service of an enterprise that the Corporation determines is
necessary and available for the Small Lender Mutual established
under subsection (a)(1) to carry out its activities and
operations.
(4) Initial capitalization.--
(A) In general.--The initial capital necessary for
the Small Lender Mutual to be established under
subsection (a)(1) to purchase a subsidiary established
under paragraph (3) or to purchase, lease, or license
the systems under paragraph (2)(B), and to perform all
other activities and functions of the Small Lender
Mutual, including the ability of the Small Lender
Mutual to operate a cash window for the purchase of
individual eligible mortgage loans, shall be provided
by the enterprises.
(B) Determination of amount.--The amount of any
initial capital required to be provided by the
enterprises under subparagraph (A) shall be determined
by the Corporation based on the needs of the Small
Lender Mutual to carry out its activities and
functions, as well as by the current volume of business
from the enterprise-approved sellers that are eligible
to participate, pursuant to subsection (e), as a member
of the Small Lender Mutual.
(C) Repayment.--
(i) In general.--The amount of any initial
capital required to be provided by the
enterprises under subparagraph (A) shall be
repaid by the Small Lender Mutual established
under subsection (a)(1) on a schedule jointly
agreed to by the Small Lender Mutual and the
Corporation.
(ii) Repayment period.--
(I) In general.--The repayment of
any amounts required under clause (i)
shall be completed within 7 years from
the system certification date.
(II) Authority to extend repayment
period.--The Corporation, after
consultation with the mutual board of
the Small Lender Mutual established
under subsection (a)(1), may extend the
repayment period set forth under
subclause (I) for an additional 3
years, if, in the sole discretion of
the Corporation, the Corporation deems
such extension necessary.
(d) Ensuring Fair Competition.--The Federal Housing Finance Agency
may, consistent with the public interest, for the maintenance of fair
competition among all small lender mutuals, and for the purposes set
forth in this section, provide, through a licensing agreement or other
agreement, access to any technology or platform transferred pursuant to
subsection (c)(3).
(e) Eligibility.--
(1) In general.--Eligibility to participate as a member in
any small lender mutual shall be limited to any--
(A) insured depository institution having less than
$500,000,000,000 in total consolidated assets at the
time of the initial participation of the institution in
the small lender mutual;
(B) non-depository mortgage originator that--
(i) has a minimum net worth of $2,500,000;
(ii) has annual eligible mortgage loan
production of less than $100,000,000,000; and
(iii)(I) prior to the system certification
date, was approved to sell mortgage loans to an
enterprise on the date that is 1 day prior to
the establishment or approval of the small
lender mutual, provided that such originator
was in good standing as of such date; or
(II) meets the standards established by the
small lender mutual pursuant to subsection (l);
(C) Community Development Financial Institution
that meets the standards established by the small
lender mutual pursuant to subsection (l);
(D) mission-based nonprofit lender that meets the
standards established by the small lender mutual
pursuant to subsection (l);
(E) housing finance agency that meets the standards
established by the small lender mutual pursuant to
subsection (l); and
(F) Federal Home Loan Bank.
(2) Access of originators.--An entity eligible to
participate as a member of a small lender mutual may not be
required to become an approved entity under this Act to access
any function or operation of a small lender mutual.
(3) Rule of construction.--Each entity eligible to
participate as a member of a small lender mutual under this
section shall meet all applicable standards and requirements
under this Act.
(f) Report.--Not later than 2 years after the date on which the
Small Lender Mutual is established under subsection (a)(1), the
Corporation shall--
(1) conduct and complete a study evaluating the criteria
for eligibility as a member of the Small Lender Mutual under
subparagraphs (A) and (B) of subsection (e)(1); and
(2) submit a report to Congress, which shall include an
evaluation of--
(A) whether the participation levels of members of
the Small Lender Mutual under subparagraphs (A) and (B)
of subsection (e)(1) are sufficient to create the
economies of scale and liquidity necessary for
competitive pricing in the secondary mortgage market;
(B) the ability of the Small Lender Mutual to
ensure access for small mortgage lenders to the
secondary mortgage market;
(C) the impact of the asset and net worth
eligibility criteria established in subparagraphs (A)
and (B) of subsection (e)(1) on the size,
competitiveness, and membership of the Small Lender
Mutual;
(D) whether the eligibility thresholds established
in subparagraphs (A) and (B) of subsection (e)(1) are
facilitating or impeding the creation of a robust
market for approved guarantors;
(E) whether the establishment of other eligibility
criteria in subparagraphs (A) and (B) of subsection
(e)(1) would better serve members of the Small Lender
Mutual, including such other criteria as--
(i) a different asset threshold;
(ii) an annual mortgage loan origination
threshold; or
(iii) a mortgage loan production cap;
(F) whether the Small Lender Mutual is fully
meeting the cash window needs of small mortgage
lenders; and
(G) whether the Small Lender Mutual is adequately
capitalized to meet the needs of members of the Small
Lender Mutual and protect the Mortgage Insurance Fund.
(g) Eligibility Thresholds.--Beginning on the date on which the
Corporation submits the report required under subsection (f), the
Corporation may adjust the eligibility thresholds established in
subparagraphs (A) and (B) of subsection (e)(1) if the Corporation, in
consultation with the mutual board of a small lender mutual, determines
that--
(1) the thresholds do not facilitate the purposes of the
small lender mutual as described in subsection (b);
(2) the thresholds restrict small multifamily lenders'
participation in the small lender mutual;
(3) the thresholds do not foster competition in the
secondary mortgage market; or
(4) the thresholds pose a risk to the Mortgage Insurance
Fund.
(h) Reassessment.--Beginning on the date on which the Corporation
submits the report required under subsection (f), the Corporation
shall, on an annual basis, reassess the Small Lender Mutual's
eligibility thresholds.
(i) Platform Membership.--Each small lender mutual shall be a
member of the Securitization Platform.
(j) Funding Authority.--
(1) Authority to establish membership fees.--The mutual
board of each small lender mutual shall charge and collect fees
from its member participants--
(A) for membership in the small lender mutual; and
(B) to cover the costs of--
(i) in the case of the Small Lender Mutual
established under subsection (a)(1)--
(I) the purchase of any function,
activity, infrastructure, property,
including intellectual property,
technology, or any other object or
service from an enterprise pursuant to
subsection (c);
(II) any initial capital for the
establishment of a cash window; and
(III) the repayment of amounts
required under subsection (c)(4)(C),
provided that any fee charged to cover
such repayment amounts is applicable
only to those member participants
identified and approved after the
establishment date of the Small Lender
Mutual and before the repayment date
established under subsection
(c)(4)(C)(ii); and
(ii) the continued operation of the small
lender mutual, including to build capital
reserves and to manage risks.
(2) Equitable compensation of certain member participants
of small lender mutual.--The mutual board of the Small Lender
Mutual established under subsection (a)(1) may, in addition to
any fee required under paragraph (1), charge and collect a fee
from member participants identified and approved after the
repayment date established under subsection (c)(4)(C)(ii) to
compensate member participants identified and approved prior to
such repayment date for the share of the fees paid by such
member participants to cover the cost of repayment amounts
pursuant to paragraph (1)(B)(i)(III).
(3) Authority to increase or decrease fees.--The mutual
board of each small lender mutual may, in its discretion and
upon consultation with the Corporation, increase or decrease
any fee authorized under paragraph (1).
(4) Provision of fee schedule to fmic.--The mutual board of
each small lender mutual shall, on an annual basis and upon any
increase or decrease of any fee authorized under paragraph (1),
provide the Corporation with a schedule of the fees charged by
the small lender mutual to its member participants.
(5) Limitation.--The fees authorized under paragraph (1)--
(A) shall be equitably assessed; and
(B) shall not discriminate against originators of
eligible mortgage loans or any entity that aggregates
eligible mortgage loans on the basis of size,
composition, business line, or loan volume.
(6) Authority to reduce fees.--
(A) In general.--If a small lender mutual, in
consultation with the Corporation, determines that any
fee or fees authorized under this subsection are
prohibitive or discriminatory, the small lender mutual
may, in the interest of building the membership of the
small lender mutual, lower any such fee or fees.
(B) Reasonableness and considerations.--Each small
lender mutual shall, in consultation with the
Corporation, set reasonable criteria for any
determination authorized under subparagraph (A). The
criteria required to be set forth under this
subparagraph shall consider the potential impact on the
financial safety and soundness of the small lender
mutual.
(k) Governance.--
(1) Recognition of important role of smaller
institutions.--The mutual board of each small lender mutual, in
consultation with the Corporation, shall take all reasonable
steps necessary to establish governance provisions that reflect
the important role in the mortgage market played by the member
participants of small lender mutuals.
(2) Mutual board.--
(A) In general.--The management of each small
lender mutual shall be vested in a board of 15
directors (in this section referred to as the ``mutual
board''), which shall include representatives of
approved member participants of the small lender
mutual.
(B) Appointment of mutual board of small lender
mutual.--
(i) Initial appointment.--The Corporation
shall make initial appointments of the members
of the mutual board for the Small Lender Mutual
established under subsection (a)(1). Each such
initial appointment shall be for a term of 1
year.
(ii) Appointments.--Upon expiration of the
1-year period set forth under clause (i), the
member participants of the Small Lender Mutual
established under subsection (a)(1) shall elect
the members of the mutual board of the Small
Lender Mutual from within the membership of the
Small Lender Mutual.
(C) Independent directors.--The mutual board of
each small lender mutual shall have at least 1
independent director to serve the public interest. The
independent director required under this subparagraph
shall have a history of representing consumer or
community interests on banking services, credit needs,
housing, or financial consumer protections.
(D) Representation on board.--No more than \1/3\ of
the directors of the mutual board of the Small Lender
Mutual may be held by a single category of member
participants, which shall be defined for purposes of
this subsection as community banks, credit unions, non-
depository mortgage originators, Federal Home Loan
Banks, housing finance agencies, Community Development
Financial Institutions, and mission-based nonprofit
lenders.
(3) Representation to the platform.--The mutual board of
the Small Lender Mutual shall select, on a rotating basis from
representative of its directors, an individual to serve as a
Platform Director under section 322.
(4) Representation of multiple small lender mutuals.--If
more than 1 small lender mutual is approved under this section,
each small lender mutual shall rotate the representation
position under section 322.
(5) No preferences for size.--Member participants of each
small lender mutual shall have equal voting rights on any
matters before the small lender mutual of which it is a member,
regardless of the size of the individual member participant.
(6) Rule of construction.--For purposes of this subsection,
a member participant and its subsidiaries, joint offices, and
affiliates shall be treated as a single entity and shall be
entitled to cast a single vote on any matters before the small
lender mutual of which it is a member.
(l) Approval of Member Participants.--
(1) In general.--Each mutual board established under
subsection (k) shall develop standards and procedures to
approve the application of member participants in the small
lender mutual.
(2) Content of standards.--The standards required under
paragraph (1) shall include standards relating to the--
(A) prospective members' compliance history with
Federal and State law;
(B) safety and soundness of prospective member
participants; and
(C) mortgage underwriting practices of the
prospective member.
(3) Coordination with other regulators.--
(A) Consultation.--In approving any prospective
member to become a member participant in a small lender
mutual, the mutual board of that small lender mutual
may consult and share information with--
(i) the appropriate Federal banking agency
and State regulator of the prospective member;
or
(ii) the Bureau of Consumer Financial
Protection, if the Bureau of Consumer Financial
Protection has supervisory authority over the
prospective member.
(B) Privilege preserved.--Information shared
pursuant to subparagraph (A) shall not be construed as
waiving, destroying, or otherwise affecting any
privilege or confidential status that a prospective
member may claim with respect to such information under
Federal or State law as to any person or entity other
than the board of directors or its appropriate Federal
banking agency.
(C) Rule of construction.--No provision of this
subsection may be construed as implying or establishing
that--
(i) any prospective member waives any
privilege applicable to information that is
shared or transferred under any circumstance to
which this subsection does not apply; or
(ii) any prospective would waive any
privilege applicable to any information by
submitting the information directly to its
primary Federal or State regulator, but for
this subsection.
(4) Streamlining for existing lenders approved by the
enterprises.--Each mutual board established under subsection
(k) shall develop streamlined membership standards and
procedures for any lender who was approved to sell mortgage
loans to an enterprise on the date that is 1 day before the
date of enactment of this Act, and was in good standing as of
such date.
(m) Cash Window.--
(1) Requirement for small lender mutuals.--Each small
lender mutual shall have the ability to operate a cash window
for the purchase of individual eligible single-family mortgage
loans.
(2) Standards to ensure safety and soundness.--To ensure
the safety and soundness of each small lender mutual, the
Corporation shall establish standards for the regulation,
supervision, and operation of each cash window required under
paragraph (1).
(3) Licensing of cash window technology.--The Federal
Housing Finance Agency may, consistent with the public interest
and for the maintenance of fair competition among entities
providing cash window services, provide, through a licensing
agreement or other agreement, access to any technology or
platform relating to a cash window transferred under paragraph
(3) of subsection (c).
(n) Recognition of Distinction Between Small Lender Mutual
Companies and Other Aggregators.--Prior to promulgating any regulation
or taking any other formal or informal action of general applicability,
including the issuance of an advisory document or examination guidance,
the Corporation shall consider the differences between small lender
mutuals and other approved aggregators with respect to--
(1) the cooperative ownership structure of small lender
mutuals;
(2) the purposes of small lender mutuals as set forth in
subsection (b);
(3) the capital structure of small lender mutuals; and
(4) any other differences that the Corporation considers
appropriate.
(o) Coordination of Servicer Approval.--Each mutual board
established under subsection (k) may coordinate with the Corporation to
facilitate the application process for its member participants to
become approved servicers of the Corporation pursuant to section 314.
(p) Multifamily Study.--Not later than 1 year after the agency
transfer date, the Corporation shall conduct and complete a study to
determine--
(1) the access needs of small multifamily mortgage lenders
to the secondary multifamily mortgage market; and
(2) whether the Small Lender Mutual established under
subsection (a)(1) can meet the access needs of small
multifamily mortgage lenders.
(q) Prohibited Activities.--A small lender mutual may not guarantee
any mortgage loans or mortgage-backed securities.
SEC. 316. SUPERVISORY ACTIONS RELATED TO CAPITAL AND SOLVENCY.
(a) Capital Classifications.--
(1) Establishment.--The Corporation shall establish, by
regulation, capital classifications regarding the levels of
capital maintained by each type of covered entity.
(2) Classes.--In carrying out the requirement under
paragraph (1), the Corporation shall classify covered entities
according to the following capital classifications:
(A) Well capitalized.--A covered entity shall be
classified as well capitalized if the entity meets or
exceeds all of the capital and solvency standards
required under section 309(b).
(B) Adequately capitalized.--A covered entity shall
be classified as adequately capitalized if the entity
meets or exceeds some, but not all, of the capital and
solvency standards required under section 309(b).
(C) Undercapitalized.--A covered entity shall be
classified as undercapitalized if the entity fails to
meet any of the capital and solvency standards required
under section 309(b).
(D) Significantly undercapitalized.--A covered
entity shall be classified as significantly
undercapitalized if the entity is significantly below
any of the capital and solvency standards required
under section 309(b).
(E) Critically undercapitalized.--A covered entity
shall be classified as critically undercapitalized if
the entity is critically below any of the capital and
solvency standards required under section 309(b).
(3) Discretionary classification.--
(A) Grounds for reclassification.--The Corporation
may reclassify the capital classification of a covered
entity if--
(i) at any time, the Corporation
determines, in writing, that the covered entity
is engaging in conduct that could result in a
rapid depletion of capital held by the covered
entity;
(ii) after notice and an opportunity for
hearing, the Corporation determines that the
covered entity is in an unsafe or unsound
condition;
(iii) pursuant to the requirements of this
title, the Corporation deems the covered entity
to be engaging in an unsafe or unsound
practice;
(iv) the covered entity does not submit a
capital restoration plan within the applicable
time period that is substantially in compliance
with regulations for such plans adopted by the
Corporation;
(v) the Corporation does not approve the
capital restoration plan submitted by the
covered entity; or
(vi) the Corporation determines that the
covered entity has failed to comply with the
capital restoration plan and fulfill the
schedule for the plan approved by the
Corporation in any material respect.
(B) Reclassification.--In addition to any other
action authorized under this title, including the
reclassification of a covered entity for any reason not
specified in this subsection, if the Corporation takes
any action described in subparagraph (A), the
Corporation may classify a covered entity as
appropriate.
(4) Restriction on capital distributions.--
(A) In general.--A covered entity shall make no
capital distribution if, after making the distribution,
the covered entity would be classified as anything
other than well capitalized or adequately capitalized.
(B) Exception.--Notwithstanding subparagraph (A),
the Corporation may permit a covered entity, to the
extent appropriate or applicable, to repurchase,
redeem, retire, or otherwise acquire shares or
ownership interests if the repurchase, redemption,
retirement, or other acquisition--
(i) is made in connection with the issuance
of additional shares or obligations of the
covered entity in at least an equivalent
amount;
(ii) will reduce the financial obligations
of the covered entity or otherwise improve the
financial condition of the covered entity;
(iii) will enhance the ability of the
covered entity to promptly meet the minimum
capital level for the covered entity;
(iv) contributes to the long-term financial
safety and soundness of the covered entity; or
(v) furthers the public interest.
(b) Adequately Capitalized.--If a covered entity is classified as
adequately capitalized:
(1) Mandatory capital restoration plan.--The Corporation
shall require the covered entity to--
(A) submit to the Corporation a capital restoration
plan; and
(B) implement the plan after approval.
(2) Discretionary safeguards.--The Corporation may take,
with respect to an adequately capitalized covered entity, any
of the actions authorized to be taken under subsection (c) with
respect to an undercapitalized covered entity, if the
Corporation determines that such actions are necessary to carry
out the purposes of this subtitle.
(c) Undercapitalized.--If a covered entity is classified as
undercapitalized:
(1) Mandatory capital restoration plan.--The Corporation
shall require the covered entity to--
(A) submit to the Corporation a capital restoration
plan; and
(B) implement the plan after approval.
(2) Restriction on asset growth.--An undercapitalized
covered entity shall not permit its average total assets during
any calendar quarter to exceed its average total assets during
the preceding calendar quarter, unless--
(A) the Corporation has accepted the capital
restoration plan of the covered entity;
(B) any increase in total assets is consistent with
the capital restoration plan; and
(C) the ratio of capital to total assets of the
covered entity increases during the calendar quarter at
a rate sufficient to enable the covered entity to
become adequately capitalized within a reasonable time.
(3) Prior approval of acquisitions and new activities.--An
undercapitalized covered entity shall not, directly or
indirectly, acquire any interest in any entity or engage in a
new activity, unless--
(A) the Corporation has accepted the capital
restoration plan of the covered entity, the covered
entity is implementing the plan, and the Corporation
determines that the proposed action is consistent with
and will further the achievement of the plan; or
(B) the Corporation determines that the proposed
action will further the purpose of this section.
(4) Required monitoring.--The Corporation shall--
(A) closely monitor the condition of any
undercapitalized covered entity;
(B) closely monitor compliance with the capital
restoration plan, restrictions, and requirements
imposed on an undercapitalized covered entity under
this section; and
(C) periodically review the capital restoration
plan, restrictions, and requirements applicable to an
undercapitalized covered entity to determine whether
the plan, restrictions, and requirements are achieving
the purpose of this section.
(5) Discretionary safeguards.--The Corporation may take,
with respect to an undercapitalized covered entity, any of the
actions authorized to be taken under subsection (d) with
respect to a significantly undercapitalized covered entity, if
the Corporation determines that such actions are necessary to
carry out the purpose of this subtitle.
(d) Significantly Undercapitalized.--If a covered entity is
classified as significantly undercapitalized:
(1) Mandatory capital restoration plan.--The Corporation
shall require the covered entity to--
(A) submit to the Corporation a capital restoration
plan; and
(B) implement the plan after approval.
(2) Discretionary supervisory actions for significantly
undercapitalized covered entities.--In addition to any other
actions taken by the Corporation, the Corporation may, at any
time, take any of the following actions with respect to a
covered entity that is classified as significantly
undercapitalized:
(A) Limitation on obligations.--Limit any increase
in, or order the reduction of, any obligations of the
covered entity, including off-balance sheet
obligations.
(B) Limitation on growth.--Limit or prohibit the
growth of the assets of the covered entity, or require
reduction of the assets of the covered entity.
(C) Acquisition of new capital.--Require the
covered entity to raise new capital in a form and
amount determined by the Corporation.
(D) Restriction on activities.--Require the covered
entity to terminate, reduce, or modify any activity
that creates excessive risk to the covered entity, as
determined by the Corporation.
(E) Improvement of management.--Take 1 or more of
the following actions:
(i) New election of board.--Order or hold a
new election for the board of directors of the
covered entity.
(ii) Dismissal of directors or executive
officers.--Require the covered entity to
dismiss from office any director or executive
officer who had held office for more than 180
days immediately before the date on which the
covered entity became undercapitalized.
(iii) Employ qualified executive
officers.--Require the covered entity to employ
qualified executive officers (who, if the
Corporation so specifies, shall be subject to
approval by the Corporation).
(e) Critically Undercapitalized.--
(1) Regulated entity.--The Corporation shall have the
authority to resolve a critically undercapitalized regulated
entity pursuant to section 1367 of the Safety and Soundness Act
(12 U.S.C. 4617), as amended by this Act.
(2) Covered entity.--The Corporation shall have the
authority to resolve a covered entity that is classified as
failing or critically undercapitalized pursuant to the
resolution authority granted to the Corporation under section
311(h), section 312(h), section 313(g), and section 703(i), as
applicable.
SEC. 317. OWNERSHIP, ACQUISITIONS, AND OPERATIONS OF COVERED ENTITIES.
(a) Ownership and Acquisitions of Covered Entities.--It shall be
unlawful, except with the prior approval of the Corporation, for any
person to--
(1) directly or indirectly own, control, or have power to
vote 10 percent of any class of voting shares of any covered
entity (except to the extent that voting stock is required to
be purchased by Federal statute as a condition to participate
in the programs of the covered entity);
(2) control in any manner the election of a majority of the
directors or trustees of any covered entity;
(3) exercise a controlling influence over the management or
policies of any covered entity;
(4) merge or consolidate with any covered entity; or
(5) divest a covered entity, or any substantial line of
business of a covered entity, into any surviving entity.
(b) Application and Approval Process.--
(1) In general.--The Corporation shall establish, by
regulation, an application, in such form and manner and
requiring such information as the Corporation may require, for
the approval of acquisitions, mergers, consolidations, or
divestitures under subsection (a).
(2) Application review.--The Corporation shall--
(A) establish internal timelines for its processing
of applications under this section, including timelines
for any action to approve or to deny an application
under this section; and
(B) notify any applicant seeking to undertake an
action described under subsection (a) of the decision
of the Corporation to approve or to deny their
application as promptly as practicable.
(c) Standards for Approval of Application.--The Corporation shall
establish, by regulation, standards for the approval by the Corporation
of acquisitions, mergers, consolidations, or divestitures under
subsection (a). The standards required under this subsection shall, at
a minimum, be based on--
(1) the application process established by the Corporation
under subsection (b)(1);
(2) the financial history and condition of the applicant;
(3) the capability of the management of the applicant;
(4) the general character and fitness of the officers and
directors of the applicant, including the compliance history of
the applicant's officers and directors with Federal and State
laws and the rules and regulations promulgated by self-
regulatory organizations (as defined in section 3(a)(26) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(26)), as
applicable;
(5) the risk presented by such acquisition, merger,
consolidation, or divestiture to the Mortgage Insurance Fund;
(6) any other standard the Corporation determines necessary
to promote competition and mitigate market dislocations among
covered entities in the secondary mortgage market; and
(7) any other standard the Corporation determines necessary
or appropriate.
(d) Approval.--The Corporation--
(1) may approve any application made pursuant to this
section if the applicant meets the standards established under
subsection (c);
(2) may not approve--
(A) any application under this section which would
result in a monopoly; or
(B) any other proposed acquisition or merger or
consolidation under this section whose effect in any
area of the United States may be substantially to
lessen competition, or to tend to create a monopoly, or
which in any other manner would be in restraint of
trade, unless the Corporation finds that the
anticompetitive effects of the proposed transaction are
clearly outweighed in the public interest by the
probable effect of the transaction in meeting the needs
of consumers and the communities served; and
(3) shall have the authority to deny any application made
pursuant to paragraph (1) if an officer or director of the
applicant has, at any time prior to the date of the approval of
such application, been--
(A) subject to a statutory disqualification
pursuant to section 3(a)(39) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(39)); or
(B) suspended, removed, or prohibited from
participation pursuant to section 8(g) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(g)), prohibited
from certain action pursuant to paragraphs (6) or (7)
of section 8(e) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(e)), subject to an action resulting in
a written agreement or other written statement under
section 8(u)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(u)(1)), for which a violation may be
enforced by an appropriate Federal banking agency, or
subject to any final order issued with respect to any
administrative enforcement proceeding initiated by such
agency under section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818).
(e) Restrictions on Engaging in Other Lines of Business.--
(1) For approved guarantors and approved multifamily
guarantors.--An approved guarantor or approved multifamily
guarantor may not engage in any activity relating to the
business of insurance, other than any activity carried out by
an approved guarantor or approved multifamily guarantor and
approved by the Corporation pursuant to sections 311 or 703.
(2) Other activities.--An approved guarantor or approved
multifamily guarantor may engage in any business activity
unrelated to the business of insurance, subject to--
(A) the prior approval of the Corporation; and
(B) any terms and conditions set forth by the
Corporation.
(3) Rule of construction.--Nothing in paragraph (1) or (2)
shall be construed to prevent an approved guarantor from being
an affiliate of a private mortgage insurer if approved by the
Corporation.
(f) Limits on Support or Guarantee Arrangement.--
(1) In general.--An approved guarantor or approved
multifamily guarantor may not enter into any agreement,
covenant, or other arrangement (including any credit risk-
sharing arrangement) with an affiliate or other person to
support, guarantee, or finance any operation or activity of
that affiliate.
(2) Support.--Subject to any terms and conditions
established by the Corporation, by regulation or order, an
approved guarantor or approved multifamily guarantor may enter
into an agreement, covenant, or other arrangement with an
affiliate solely for the purpose of supporting, guaranteeing,
or financing an operation or activity of the approved guarantor
or approved multifamily guarantor.
(3) Rule of construction.--Nothing in this section shall
supersede the requirements under sections 23A and 23B of the
Federal Reserve Act (12 U.S.C. 371c, 371c-1).
(g) Anti-steering Requirement.--
(1) In general.--The Corporation shall, by regulation,
prohibit discounts made by an approved guarantor for any
mortgage originator that is an investor, or an affiliate of an
investor, in the approved guarantor that are not otherwise
available to other similar mortgage originators.
(2) Report.--The Office of the Inspector General of the
Federal Mortgage Insurance Corporation shall, on an annual
basis, submit a report to the Corporation and to Congress on
the practices and internal controls of approved guarantors with
respect to steering or preferential treatment for their
investors prohibited by this section.
Subtitle C--Securitization Platform and Transparency in Market
Operations
PART I--SECURITIZATION PLATFORM
SEC. 321. ESTABLISHMENT OF THE SECURITIZATION PLATFORM.
(a) In General.--The Corporation shall establish an entity known as
the ``Securitization Platform'' (in this part referred to as the
``Platform'') that shall be a utility owned by and operated for the
benefit of its members as--
(1) a nonprofit cooperative; or
(2) a cooperative entity other than as described under
paragraph (1) that--
(A) best achieves the purposes and obligations of
the Platform under section 325; and
(B) serves the public interest.
(b) Regulated by the Corporation.--The Platform shall be regulated
and supervised by the Corporation.
(c) Incorporation.--
(1) Non federal status.--The Platform shall not be an
agency or instrumentality of the Federal Government.
(2) Discretion as to legal form.--The Corporation shall
determine the legal form of incorporation of the Platform.
(3) Situs of incorporation.--The Corporation shall--
(A) determine in which of the several States to
incorporate the Platform; and
(B) have the authority to amend the State of
incorporation to best effectuate the purposes and
obligations of this part and other provisions of this
Act.
(4) Timing of incorporation.--Not later than 1 year after
the agency transfer date, the Corporation shall file and submit
the necessary documents to incorporate the Platform in the
State determined under paragraph (3)(A).
(d) Funding by the Corporation and Transfer of Property.--
(1) Transfer of funds from the corporation.--At a time
established by the Corporation, the Corporation shall transfer
to the Platform such funds as the Corporation, in consultation
with the Platform Directors, determines may be reasonably
necessary for the Platform to begin carrying out the activities
and operations of the Platform.
(2) Transfer of property.--
(A) In general.--Consistent with title VI, the
Federal Housing Finance Agency, in consultation with
the Corporation and, as appropriate, the enterprises,
may direct the enterprises to transfer or sell to the
Platform any property, including but not limited to,
intellectual property, technology, systems, and
infrastructure (including technology, systems, and
infrastructure developed by the enterprises for the
CSP), as well as any other legacy systems,
infrastructure, and processes that may be necessary for
the Platform to carry out the functions and operations
of the Platform.
(B) Contractual and other legal obligations.--As
may be necessary for the Corporation, the Federal
Housing Finance Agency, and the enterprises to comply
with legal, contractual, or other obligations, the
Federal Housing Finance Agency shall have the authority
to require that any transfer authorized pursuant to
subparagraph (A) occurs as an exchange for value,
including through the provision of appropriate
compensation to the enterprises (including as provided
in subparagraphs (C) and (D)), or other entities
responsible for creating, or contracting with, the CSP.
(C) Maximum return to senior preferred shareholders
of the enterprises.--The transfer or sale of property
to the Platform under this paragraph shall, as
appropriate, be managed by the Federal Housing Finance
Agency to obtain resolutions that maximize the return
for the senior preferred shareholders of the
enterprises to the extent that such resolutions--
(i) are consistent with facilitating--
(I) a deep, liquid, and resilient
secondary mortgage market for single-
family and multifamily mortgage-backed
securities to support access to
mortgage credit in the primary mortgage
market; and
(II) an orderly transition from
housing finance markets facilitated by
the enterprises to housing finance
markets facilitated by the Corporation
with minimum disruption in the
availability of loan credit;
(ii) are consistent with applicable Federal
and State law;
(iii) comply with the requirements of this
Act and the amendments made by this Act; and
(iv) protect the taxpayer from having to
absorb losses incurred in the secondary
mortgage market.
(D) Required determinations for sale of assets to
the platform.--The Federal Housing Finance Agency may
not require the enterprises to make a sale to the
Platform under subparagraph (A) that involves the
disposition of the property or assets of the
enterprises unless the Federal Housing Finance Agency
determines that the sale--
(i) is consistent with an orderly
transition from housing finance markets
facilitated by the enterprises to efficient
housing finance markets facilitated by the
Corporation with minimum disruption in the
availability of loan credit;
(ii) does not impede or otherwise interfere
with the ability of the Federal Housing Finance
Agency or the Corporation to carry out the
functions and requirements of this Act;
(iii) does not transfer, convey, or
authorize any guarantee or Federal support,
assistance, or backing, implicit or explicit,
related to any such property or assets being
sold; and
(iv) will maximize the return for the
senior preferred shareholders as required under
subparagraph (C).
(e) Platform Operability.--The Corporation shall establish
sufficient redundancies in the Platform so that in the event of
operational disruption of the Platform, there is sufficient back-up
capacity to--
(1) process payments on existing securities issued through
the Platform; and
(2) structure, form, and issue new securities through the
Platform.
(f) Use by Other Entities in Exigent Circumstance.--
(1) In general.--On and after the system certification
date, if the Corporation determines that operational or other
problems with the Platform do not permit the Platform to
operate in a manner that allows the Platform to achieve the
purposes and obligations of the Platform under section 325, the
Corporation shall have the authority to permit the Platform
Directors to use entities other than the Platform to perform
the issuance functions required to be performed through the
Platform and that are necessary for the proper functioning of
the secondary mortgage market.
(2) Rule of construction.--Any entity permitted to perform
issuance functions that would ordinarily be expected to be
performed by the Platform under paragraph (1) shall be
regulated and supervised, as appropriate, by the Corporation as
if such entity were the Platform itself.
SEC. 322. MANAGEMENT OF THE PLATFORM.
(a) Platform Directors.--
(1) Authority of the board.--
(A) In general.--The Platform Directors shall have
all the powers necessary to carry out the purposes,
powers, and functions of the Platform, and in the
exercise of such purposes, powers, and functions, and
upon approval of the Corporation, shall adopt such
rules and guidance and issue such orders as the
Platform Directors deem necessary and appropriate.
(B) Conflicts of interest.--The Platform Directors
shall develop policies and procedures to monitor and
mitigate potential conflicts of interest in carrying
out the purposes, powers, and functions of the
Platform.
(2) Initial board.--
(A) Composition.--The initial Platform Directors
shall be comprised of 5 directors, each of whom shall
be appointed by the Board of Directors but none of whom
shall be a member of the Board of Directors.
(B) Timing of appointment of initial platform
directors.--The initial Platform Directors shall be
appointed pursuant to subparagraph (A) not later than
180 days after the later of--
(i) the filing of the necessary documents
to incorporate the Platform as required under
section 321(c); or
(ii) the approval of the incorporation of
the Platform by the relevant State.
(C) Term.--
(i) In general.--Each initial Platform
Director appointed pursuant to subparagraph (A)
shall serve for a term of 1 year.
(ii) Authority to extend term.--The Board
of Directors may--
(I) in its discretion, extend for
an additional year the term of each
initial Platform Director appointed
pursuant to subparagraph (A); and
(II) upon a determination by the
Corporation that the Platform
membership does not reflect the
diversity or variety of market
participants required to conduct the
election of the Platform Directors
under paragraph (3), extend for an
additional 2 years the term of each
initial Platform Director appointed
pursuant to subparagraph (A).
(D) Purpose of the initial platform directors.--The
initial Platform Directors shall--
(i) draft and enact initial bylaws and
other governance documents for the operation of
the Platform, including policies and procedures
pursuant to paragraph (1)(B);
(ii) establish criteria for membership in
the Platform consistent with the requirements
of section 323;
(iii) establish any necessary initial fee
structures or usage fee structures under
section 324; and
(iv) organize and conduct the election of
the Platform Directors from the Platform
members as required by paragraph (3).
(3) Elected board.--
(A) Required election; timing of election.--Upon
the expiration of the term of the members of the
initial Platform Directors, the members of the Platform
shall, in accordance with subparagraphs (B) through
(F), elect new Platform Directors.
(B) Composition.--
(i) Diversity.--The Platform Directors
elected pursuant to this paragraph shall
reflect the diverse range of Platform members,
including large, mid-size, and small business
members.
(ii) Members.--
(I) In general.--The Platform
Directors elected pursuant to this
paragraph shall be comprised of 9
directors as follows:
(aa) 8 member directors,
including--
(AA) 7 member
directors who shall be
elected from among
representatives of the
members in the
Platform, at least 1 of
whom shall represent
the interests of small
mortgage lenders; and
(BB) 1 member
director who shall be a
representative of a
small lender mutual, as
established under
section 315(k).
(bb) 1 independent
director.
(II) Independent director.--The
independent director elected pursuant
to this paragraph--
(aa) shall not be an
affiliate of any member in the
Platform; and
(bb) shall have
demonstrated knowledge of, or
experience in, financial
management, financial services,
risk management, information
technology, or housing finance,
which may include affordable
housing finance.
(C) Chairperson.--The Chairperson of the Platform
Directors shall be elected from among the Platform
Directors elected under this paragraph.
(D) Term.--
(i) In general.--Each Platform Director
elected under this paragraph shall serve for a
term of 2 years.
(ii) Staggered terms.--Notwithstanding
clause (i)--
(I) the first elected chairperson
of the Platform Directors shall be
elected to serve for a term of 2 years;
and
(II) of the first 8 other Platform
Directors not elected to serve as
chairperson:
(aa) 4 shall be elected to
serve for a term of 2 years.
(bb) 4 shall be elected to
serve an initial term of 1
year.
(E) Equal votes.--Platform Directors shall have
equal voting rights on any matters before the Platform
Directors.
(F) Nomination and election procedures.--Procedures
for the nomination and election of Platform Directors
shall be prescribed by the bylaws adopted by the
Platform Directors in a manner consistent with the
purposes and provisions of this part.
(G) Restructuring of platform directors.--The
Platform Directors elected under this paragraph, with
approval from the Corporation, may choose to
restructure or reorganize the Platform Directors in a
manner different than what is specified under this
paragraph following a determination by the Platform
Directors and the Corporation that a different Platform
board structure or Platform board composition would
better achieve the purposes and obligations of this
Act, or better serve the owners of the Platform in a
manner consistent with the public interest.
(b) Executive Officers.--The Platform Directors shall appoint a
chief executive officer, chief financial officer, comptroller, chief
regulatory officer, and any other officers as the Platform Directors
deem necessary to carry out the management and administration of the
functions and operations of the Platform.
SEC. 323. MEMBERSHIP IN THE PLATFORM.
(a) Application.--
(1) In general.--A person seeking to become a member in the
Platform, or to be reinstated as a member in the Platform,
shall file an application with the Platform Directors.
(2) Standards.--Consistent with achieving a broad
membership that includes small mortgage lenders, as well as
large, mid-size, and small business members, the Platform
Directors shall develop procedures and standards for--
(A) the application of persons seeking to become
members in the Platform; and
(B) the approval of applicants for membership in
the Platform.
(3) Additional standards for approved entities.--The
standards for the approval by the Platform Directors of an
approved entity as a member in the Platform shall be consistent
with and supplement any standards, requirements, and
obligations applicable to the approved entity under subtitle B
of this title, or any other provision of this Act.
(b) Members.--The Platform Directors may approve as a member of the
Platform any person that applies for membership in the Platform
pursuant to subsection (a) that is--
(1) a mortgage aggregator;
(2) a mortgage guarantor;
(3) a mortgage originator;
(4) a Federal Home Loan Bank or a subsidiary or joint
office approved under section 312 of one or more Federal Home
Loan Banks;
(5) a small lender mutual established or approved under
section 315; or
(6) any other market participant, provided that in the sole
determination of the Platform Directors, having such market
participant as a member of the Platform is necessary or helpful
to fulfilling the purposes and obligations of the Platform
under section 325.
(c) Termination.--The Platform Directors may terminate membership
in the Platform of any member for failure to adhere to any standards
established by the Platform Directors.
SEC. 324. FEES.
(a) In General.--The Platform Directors may assess and collect
fees, and may, in their discretion, increase or decrease such fees,
from the members in the Platform--
(1) for initial membership in the Platform, consistent with
the requirements of subsection (b);
(2) to maintain ongoing membership in the Platform;
(3) for use of the Platform, consistent with the
requirements of subsection (c); and
(4) to cover the ongoing costs of the functions and
operations of the Platform, including--
(A) the purchase of property, technology, and
systems developed by either enterprise or others;
(B) to develop and invest in new technology;
(C) to build a capital base that would be able to
offset, or otherwise mitigate, losses that might occur
due to the potential operational failure of the
Platform; and
(D) to conduct any other activities approved by the
Platform Directors.
(b) Initial Fee.--Upon approval of its application to become a
member in the Platform, each new approved member shall pay to the
Platform a fee in an amount to be determined by the Platform Directors,
provided that such fee amount is consistent with obtaining a broad
membership in the Platform that includes small mortgage lenders, as
well as large, mid-size, and small business members.
(c) Usage Fees.--
(1) Establishment.--Each member in the Platform shall pay
usage fees, as such fees are determined by the Platform
Directors.
(2) Review of fees.--The Platform Directors shall, not less
than annually, review the fee structure established under this
subsection and submit any resulting recommendations to amend
the fee structure to the Corporation.
(3) Assessment and measurement.--
(A) In general.--Except as otherwise provided under
subparagraphs (B) and (C), usage fees charged and
collected under this subsection shall be equitably
assessed and based upon the member's use of the
services offered by the Platform, as such use is to be
measured by the total principal balance of the mortgage
loans or mortgage-backed securities securitized for the
member through the Platform.
(B) Tiered fee options.--If the Platform Directors
determine that certain entities face a barrier to use
the Platform, the Platform Directors may adopt a tiered
usage fee structure to promote greater access and a
more competitive market for the Platform that may
include differential fee structures for usage fee
charges incurred by housing finance agencies, small
mortgage lenders, Community Development Financial
Institutions, mission-based nonprofit lenders,
community land trusts, permanently affordable
homeownership programs, or other organizations selected
by the Corporation.
(C) Tiered fee option for covered and noncovered
securities.--The Platform Directors may adopt a tiered
usage fee structure under this subsection that may
include differential fee structures for usage fee
charges for the issuance of noncovered securities that
differ from the usage fees charged for the issuance of
covered securities.
(4) Payment.--Usage fees charged under this subsection
shall be paid by the member at the time the mortgage loans or
mortgage-backed securities are delivered by the member to the
Platform.
(d) Corporation Review of Initial Fees and Usage Fees.--
(1) In general.--The Platform Directors shall submit any
fee structure proposal for initial fees or usage fees under
subsection (b) or (c) to the Corporation. The Corporation shall
approve any initial fee or usage fee structure proposed by the
Platform Directors unless the Corporation determines that the
fee structure is not consistent with--
(A) facilitating, a deep, liquid, and resilient
secondary mortgage market for mortgage-backed
securities; and
(B) the purposes and obligations of the Platform
under section 325.
(2) Automatic establishment of fees absent corporation
disapproval.--If the Corporation does not issue an order of
disapproval of an initial fee or usage fee structure proposed
by the Platform Directors within 60 days following the
submission of the proposed initial fee or usage fee structure
to the Corporation, the proposed initial fee or usage fee
structure shall automatically go into effect for the Platform
and its members.
(3) Impact of corporation disapproval.--If the Corporation
disapproves an initial fee or usage fee structure proposed by
the Platform Directors pursuant to this subsection, the
Platform Directors may--
(A) submit to the Corporation a revised fee or
usage fee structure for approval; or
(B) if applicable, use the existing approved fee or
usage fee structure.
SEC. 325. PURPOSES AND OBLIGATIONS OF THE PLATFORM.
(a) Purpose.--The purposes of the Platform established under
section 321 are to--
(1) purchase and receive from its members eligible mortgage
loans or securities collateralized by eligible mortgage loans
for securitization by issuers as covered securities;
(2) issue through the Platform to its members standardized
covered securities, or other covered securities, insured by the
Corporation pursuant to this Act;
(3) purchase and receive from its members noneligible
mortgage loans or securities not collateralized by eligible
mortgage loans for securitization as noncovered securities, to
the extent desired or requested by its members; and
(4) issue to its members standardized noncovered
securities, or other noncovered securities, that are not
insured by the Corporation pursuant to this Act, to the extent
desired or requested by its members.
(b) Powers and Functions.--The powers and functions of the Platform
are to--
(1) develop the ability to issue, and to issue,
standardized covered securities, insured by the Corporation
pursuant to this Act, in accordance with subsection (e);
(2) develop, adopt, and publish standardized securitization
documents and agreements (including, but not limited to,
uniform pooling, trust, and custodial agreements)--
(A) required for all covered securities issued by
or through the Platform in accordance with section
326(a) (and which shall be made optional for all
noncovered securities issued through the Platform); and
(B) which--
(i) shall be drafted in consultation with
the Corporation, the Bureau of Consumer
Financial Protection, the Department of Housing
and Urban Development, and such other Federal
regulatory agencies as the Platform Directors
determine appropriate;
(ii) may rely upon existing documentation
and forms required by the enterprises or other
Federal regulatory agencies, to the extent
determined by the Platform Directors to be
practical or appropriate; and
(iii) before being issued through the
Platform, shall be approved by the Corporation
as being consistent with--
(I) the requirements under section
326(a); and
(II) facilitating a deep, liquid,
and resilient secondary mortgage market
for mortgage-backed securities;
(3) develop standardized documents approved by the
Corporation for servicing and loss mitigation standards
pursuant to section 314 for eligible mortgage loans that
collateralize the covered securities issued through the
Platform to its members, which shall be based on standards set
by the Corporation and which may rely upon existing
documentation and forms required by the enterprises or other
Federal or State regulatory agencies, to the extent determined
by the Platform Directors to be practical or appropriate;
(4) as expressly provided in section 326(b)(2)(F), develop,
adopt, and publish the required contractual terms for contracts
for noncovered securities issued through the Platform, which
shall be--
(A) developed in consultation with the Corporation,
the Bureau of Consumer Financial Protection, the
Department of Housing and Urban Development, and such
other Federal regulatory agencies as the Platform
Directors determine appropriate; and
(B) before being issued through the Platform,
approved by the Corporation as being consistent with--
(i) the requirements under section 326(b);
and
(ii) facilitating a deep, liquid, and
resilient secondary mortgage market for
mortgage-backed securities;
(5) develop, adopt, and publish optional standardized
securitization documents and agreements (including, but not
limited to, uniform pooling, trust, and custodial agreements)
tailored for noncovered securities issued through the Platform,
and which may be used as desired or requested by the members of
the Platform, in accordance with section 326(c), and which
standardized securitization documents and agreements--
(A) shall be drafted in consultation with the
Corporation, the Bureau of Consumer Financial
Protection, the Department of Housing and Urban
Development, and such other Federal regulatory agencies
as the Platform Directors determine appropriate;
(B) may rely upon existing documentation and forms
required by the enterprises or other Federal or State
regulatory agencies, to the extent determined by the
Platform Directors to be practical or appropriate; and
(C) before being issued through the Platform, shall
be approved by the Corporation as being consistent
with--
(i) the requirements under section 326(c);
and
(ii) facilitating a deep, liquid, and
resilient secondary mortgage market for
mortgage-backed securities;
(6) the extent not otherwise provided in paragraphs (2),
(3), and (5), to endeavor to use or rely upon existing
documentation and forms required by the enterprises or other
Federal or State regulatory agencies, to the extent determined
by the Platform Directors to be practical or appropriate;
(7) establish a strong business continuity plan that meets
industry best practices and establish sufficient redundancies
so that in the event of an operational failure of the Platform
there is sufficient back-up capacity to process payments and
issue covered and noncovered securities;
(8) verify that the eligible mortgage loans and securities
collateralized by eligible mortgage loans purchased and
received by the Platform, including from any small lender
mutual established or approved under section 315, for
securitization as covered securities, meet the requirements for
covered securities under this Act and any regulations adopted
by the Corporation pursuant thereto;
(9) verify that the noneligible mortgage loans and
securities not collateralized by eligible mortgage loans
purchased and received by the Platform, including from any
small lender mutual established or approved under section 315,
for securitization as noncovered securities, meet the
requirements for noncovered securities under this Act and any
regulations adopted by the Corporation pursuant thereto;
(10) for the purpose of securitization, purchase or receive
from members of the Platform--
(A) eligible mortgage loans, pools of eligible
mortgage loans, securities collateralized by eligible
mortgage loans, or outstanding mortgage-backed
securities issued by the enterprises for securitization
as covered securities; and
(B) noneligible mortgage loans, pools of
noneligible mortgage loans, or securities
collateralized by noneligible mortgage loans for
securitization as noncovered securities, to the extent
desired or requested by members of the Platform;
(11) for the purpose of securitization, facilitate the
issuance of--
(A) all covered securities of members of the
Platform that are collateralized by eligible mortgage
loans, or outstanding mortgage-backed securities issued
by the enterprises;
(B) all covered securities of members of the
Platform that are pooled from--
(i) a single mortgage originator, mortgage
aggregator, approved entity, or regulated
entity; or
(ii) multiple mortgage originators,
mortgage aggregators, approved entities, or
regulated entities;
(C) noncovered securities collateralized by
noneligible mortgage loans received from members of the
Platform; and
(D) noncovered securities collateralized by
noneligible mortgage loans received from members of the
Platform that are pooled from--
(i) a single mortgage originator, mortgage
aggregator, or regulated entity; or
(ii) multiple mortgage originators,
mortgage aggregators, or regulated entities;
(12) perform bond administration, data validation, and
reporting for all covered and noncovered securities issued
through the Platform, including those issued on behalf of any
small lender mutual established or approved under section 315;
(13) facilitate systems to lower barriers to entry for new
mortgage originators and approved entities or access to
membership in the Platform;
(14) provide essential functions necessary to issue
standardized securities which may be compatible with the To-Be-
Announced market, for covered securities and, if appropriate,
noncovered securities;
(15) manage operational and systems related risks
associated with delivering covered and noncovered securities
and receiving eligible and noneligible mortgage loans;
(16) develop the capability to offer securitization
services to private label issuers;
(17) require the servicing documentation used for mortgage
loans that collateralize securities issued through the Platform
to provide a standard method (which may include the use of a
single electronic verification system) for a mortgagor who has
been denied a loan modification to verify such denial at no
cost to the mortgagor;
(18) facilitate the issuance of securitizations for
multifamily loans, establish common documentation, or develop
other requirements necessary to permit the Platform, or a
subsidiary or affiliate thereof, to be used for multifamily
loan securitizations if the Platform Directors issue a
determination that it would be desirable and practical for the
Platform, or a subsidiary or affiliate thereof, to be used to
issue or otherwise facilitate multifamily loan securitizations;
and
(19) establish, not later than the system certification
date, a Collateral Valuation Advisory Committee--
(A) which shall be comprised of 9 members appointed
by the Platform Directors, including representatives of
appraisers, appraisal management companies, mortgage
originators (including small mortgage lenders),
investors, real estate professionals, homebuilding
professionals, consumer advocates, as well as Federal
and State appraisal regulatory organizations;
(B) the purpose of which shall be to--
(i) provide recommendations to the Platform
and the Corporation regarding secondary
mortgage market residential appraisal
guidelines, standards, and reporting formats
consistent with the Real Estate Settlement
Procedures Act (12 U.S.C. 2603), the Truth in
Lending Act (15 U.S.C. 1631 et seq.), and all
other applicable Federal and State laws; and
(ii) make recommendations regarding the
continuation of a repository for valuation
reports, taking into account existing
operational structures and contractual
arrangements; and
(C) which, in fulfilling its purpose under this
paragraph, shall, as appropriate, consult and
coordinate with the Appraisal Subcommittee of the
Federal Financial Institutions Examinations Council
established under title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 3331 et seq.).
(c) Prohibited Activities.--The Platform may not--
(1) guarantee any mortgage loans or mortgage-backed
securities;
(2) assume or hold mortgage loan credit risk;
(3) purchase any mortgage loans for cash on a single loan
basis for the purpose of securitization;
(4) undertake the issuance of any covered securities
through the Platform unless the first loss position is already
held by a private entity;
(5) own or hold any mortgage loans or mortgage-backed
securities for investment purposes;
(6) make or be a party to any representation and warranty
agreement on any mortgage loans; or
(7) take lender representation and warranty risk.
(d) Interoperability With Multifamily Loan Securitization
Issuance.--The Platform shall be developed in a manner that may permit,
and would not preclude, the Platform, or any subsidiary or affiliate
thereof, to be used for the issuance of multifamily loan
securitizations, provided that the development of this vehicle for
multifamily loan securitizations does not delay the ability of the
Platform to perform its obligations under this section with respect to
single-family securities by the system certification date.
(e) Timing of Platform Capacity to Develop and to Issue
Standardized Securities for the Single-family Covered Securities.--Not
later than 2 years following the election of the Platform Directors
under section 322(a)(3), or as otherwise permitted under section 601,
the Platform shall develop the Platform's ability to issue, and issue,
standardized securities for single-family covered securities.
(f) Discretion for Platform Directors to Issue Standardized
Securities for Single-family Noncovered Securities.--The Platform
Directors may develop an ability for the Platform to issue standardized
securities for single-family noncovered securities, if the Platform
Directors determine that sufficient demand exists among the Platform
members for the Platform to issue such a product.
SEC. 326. UNIFORM SECURITIZATION AGREEMENTS FOR COVERED SECURITIES AND
REQUIRED CONTRACTUAL TERMS FOR NONCOVERED SECURITIES.
(a) Required Uniform Securitization Agreements for Covered
Securities Issued Through the Platform.--
(1) In general.--The Platform Directors shall develop
standard uniform securitization agreements for all covered
securities to be issued through the Platform, as required
pursuant to section 325(b)(2).
(2) Required terms.--The standard uniform securitization
agreements required to be developed under paragraph (1) shall
include terms relating to--
(A) pooling and servicing, including the
development of uniform standards and practices
consistent with the standards specified by the
Corporation pursuant to section 314;
(B) loss mitigation procedures consistent with
those specified by the Corporation pursuant to section
314;
(C) minimum representations and warranties;
(D) indemnification and remedies, including for the
restitution or indemnification of the Corporation with
respect to early term delinquencies of eligible
mortgage loans that collateralize a covered security;
(E) the requirements of the indenture for mortgage-
backed securities that are exempt from the Trust
Indenture Act of 1939 (15 U.S.C. 77aaa et seq.) and the
requirements, responsibilities, and duties of trustees,
as set forth in the indenture or pooling and servicing
agreement;
(F) the qualification, responsibilities, and duties
of trustees; and
(G) any other terms or standards the Platform
Directors, with approval of the Corporation, determine
to be necessary or appropriate.
(3) Defining representation and warranty violations.--In
developing the uniform securitization agreements required under
paragraph (1), the Platform Directors shall also develop,
adopt, and publish, upon approval by the Corporation, clear and
uniform standards that define and illustrate what actions, or
omissions to act, comprise a violation of the representations
and warranties clauses that are made a part of such agreements.
(b) Required Contractual Terms for Contracts for All Noncovered
Securities Issued Through the Platform.--
(1) In general.--All contracts for noncovered securities
issued through the Platform shall include a set of required
contractual terms relating to the obligations of the parties to
each contract.
(2) Required contractual terms.--The required contractual
terms for agreements for all noncovered securities issued
through the Platform shall provide the obligations of the
parties to a contract including the following considerations:
(A) Pooling and servicing.
(B) Loss mitigation procedures.
(C) Representations and warranties.
(D) Indemnification and remedies.
(E) The qualification, responsibilities, and duties
of trustees, including, but not limited to,
requirements set forth in the indenture or pooling and
servicing agreement, or any applicable provisions of
the Trust Indenture Act of 1939 (15 U.S.C. 77aaa et
seq.).
(F) Other terms or standards the Platform
Directors, with approval of the Corporation, determine
to be necessary or appropriate to protect or facilitate
the operation of the Platform.
(3) Permissible adjustments.--Parties to contracts for
noncovered securities described under this subsection may
supplement the required contractual terms identified under
paragraph (2) with any additional contractual terms so desired
by the parties to contracts for noncovered securities issued
through the Platform.
(c) Optional Uniform Securitization Agreements for Noncovered
Securities Issued Through the Platform.--The Platform Directors may
develop optional uniform securitization agreements for use by
noncovered securities that are issued through the Platform that include
standards and obligations that are different from those included in the
uniform securitization agreements for covered securities as set forth
in subsection (a), provided that--
(1) the agreements include the required contractual terms
required for noncovered securities that are issued through the
Platform set forth in subsection (b); and
(2) the Platform Directors determine that sufficient demand
exists among the members of the Platform for the Platform to
issue such optional uniform securitization agreements for use
by noncovered securities.
(d) Agreements for Noncovered Securities Issued Off the Platform.--
Nothing in this section shall preclude, or require, noncovered
securities that are not issued through the Platform from adopting the--
(1) uniform securitization agreements for covered
securities issued through the Platform developed under
subsection (a);
(2) optional uniform securitization agreements for
noncovered securities issued through the Platform developed
under subsection (c); or
(3) required contractual terms for contracts for noncovered
securities issued through the Platform developed under
subsection (b).
(e) Consultation Required.--The Platform Directors shall consult
with market participants, including servicers, originators, issuers,
and mortgage investors, and community stakeholders and representatives
of homeowners in developing--
(1) the uniform securitization agreements pursuant to
subsection (a);
(2) the required contractual terms for contracts for
noncovered securities issued through the Platform pursuant to
subsection (b); and
(3) the optional uniform securitization agreements for
noncovered securities issued through the Platform pursuant to
subsection (c).
SEC. 327. APPROVAL AND STANDARDS FOR COLLATERAL RISK MANAGERS.
(a) Standards for Approval of Collateral Risk Managers.--The
Corporation shall develop, adopt, and publish standards for the use of
collateral risk managers who may work with the Platform, as well as
trustees and servicers of mortgage-backed securities to manage mortgage
loan collateral, including standards with respect to--
(1) tracking mortgage loan repurchases;
(2) compliance with obligations under any applicable
securitization documents; and
(3) managing--
(A) any disputes; and
(B) the resolution process.
(b) Additional Required Standards.--The standards required under
subsection (a) shall include the review of foreclosure loss mitigation
programs established under section 314 for approved servicers.
PART II--TRANSPARENCY IN MARKET OPERATIONS
SEC. 331. REVIEW OF LOAN DOCUMENTS; DISCLOSURES.
(a) In General.--The Corporation, in consultation and coordination
with the Securities and Exchange Commission, shall, by rule--
(1) require market participants, as appropriate, to make
available to private market investors in connection with the
first loss position on a covered security, including through
use of the Securitization Platform established under section
321, all--
(A) documents relating to eligible mortgage loans
collateralizing that covered security; and
(B) servicing reports of the approved servicer
relating to such eligible mortgage loans;
(2) require market participants, as appropriate, to
disclose to investors information that is substantially
similar, to the extent practicable, to disclosures required of
issuers of asset-backed securities under section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a),
78o(d)) until the covered security is fully paid, other than
information that the Corporation determines, in consultation
and coordination with the Securities and Exchange Commission,
is not applicable to a covered security, a particular type of
covered security, or eligible mortgage loans collateralizing a
covered security;
(3) require that all disclosures must be made consistent
with the antifraud provisions of the Federal securities laws;
and
(4) establish the timing, frequency, and manner in which
such access and disclosures are made.
(b) Access and Disclosures.--In prescribing the rules required
under subsection (a), the Corporation shall take into consideration--
(1) the potential cost of such access and disclosures;
(2) the effect of such access and disclosures on liquidity
in the housing finance market; and
(3) the interests of investors.
(c) Privacy Protections.--In prescribing the rules required under
subsection (a), the Corporation shall take into consideration issues of
consumer privacy and all statutes, rules, and regulations related to
privacy of consumer credit information and personally identifiable
information. Such rules shall expressly prohibit the identification of
specific borrowers.
SEC. 332. NATIONAL MORTGAGE DATABASE.
(a) Transfer.--Effective on the system certification date, there
are transferred to the Corporation all functions of the Federal Housing
Finance Agency of the Corporation relating to the rights,
responsibilities, and obligations of the Federal Housing Finance Agency
pursuant to the Inter-Agency Agreement (or any successor thereto)
entered into by the Federal Housing Finance Agency and the Bureau of
Consumer Financial Protection with respect to the development,
construction, maintenance, operation, and funding of the National
Mortgage Database.
(b) Privacy.--In exercising authority under this section, the
Corporation and the Bureau of Consumer Financial Protection shall--
(1) take steps to ensure the privacy of consumers,
including prohibiting the identification of specific borrowers;
(2) minimize the collection and storage of personally
identifiable information; and
(3) consider all statutes, rules, and regulations relating
to the privacy of consumer credit information and personally
identifiable information.
(c) Duplication.--The Chairperson and the Director of the Bureau of
Consumer Financial Protection shall take all reasonable steps necessary
to minimize conflicts and duplication of the data required under this
section with data collected, published, or otherwise obtained by other
Federal regulators, including the data disclosure system required under
section 304(f) of the Home Mortgage Disclosure Act of 1975 (12 U.S.C.
2803(f)).
(d) Minimize Burden on Reporting Entities.--If 2 or more entities
are required by this section to report the same mortgage data relating
to the same mortgage loan, the entities may, by agreement that is
clearly communicated to the Corporation and the Bureau, determine that
only 1 of such entities will report the data. If 1 of such entities
reports the required mortgage data, it shall not be a violation of this
section for the other entities not to report the data.
(e) Access to Data.--The Corporation and the Bureau of Consumer
Financial Protection shall each establish, and cause to be published in
the Federal Register, the initial date on which--
(1) the public shall begin to have access to any data put
into the public domain, in accordance with this section and in
a manner that is easily accessible to the public; and
(2) all mortgage data is required to be put into the public
domain, in accordance with this section.
SEC. 333. WORKING GROUP ON ELECTRONIC REGISTRATION OF MORTGAGE LOANS.
(a) Establishment.--Not later than 180 days after the agency
transfer date, the Corporation shall establish a working group to
study--
(1) whether the establishment of a national electronic
mortgage registry system is necessary; and
(2) how to establish, operate, and maintain a national
electronic mortgage registry system for single-family mortgage
loans and multifamily mortgage loans.
(b) Composition.--The working group established under subsection
(a) shall be composed of the following:
(1) The Chairperson or the Chairperson's designee.
(2) The Director of the Bureau of Consumer Financial
Protection or the Director's designee.
(3) The Chairman of the Federal Deposit Insurance
Corporation or the Chairman's designee.
(4) The Chairman of the Securities and Exchange Commission
or the Chairman's designee.
(5) The Chairman of the Federal Reserve Board or the
Chairman's designee.
(6) The Comptroller of the Currency or the Comptroller's
designee.
(7) A representative from the Federal Home Loan Bank
System.
(8) A representative from a Federal Reserve Bank.
(9) Individuals selected by the Chairperson from among the
following:
(A) State and local government agencies and
representatives, including housing finance agencies and
those with expertise in property records, electronic
recording, and the Uniform Commercial Code.
(B) The National Conference of Commissioners on
Uniform State Laws
(C) Industry groups, including single-family and
multifamily mortgage originators, title insurers,
servicers, issuers, and investors.
(D) Consumer groups, including representatives of
homeowners, community stakeholders, and housing
organizations.
(E) Individuals with technical expertise, including
those with expertise in designing, constructing and
maintaining mortgage databases.
(c) Duties.--The duties of the working group established under
subsection (a) are to assess and develop recommendations on the
necessity for and feasibility of establishing, operating, and
maintaining a national electronic mortgage registry system for single-
family mortgage loans and multifamily mortgage loans to document
custody and registration of mortgage loans, notes, titles, liens, deeds
of trust, and other security instruments, in order to automate,
centralize, standardize, and improve the tracking of changes in--
(1) the ownership of mortgage loans, deeds of trust, and
other security instruments;
(2) the ownership of the beneficial interest in promissory
notes secured by any mortgage loan, deed of trust, or other
security instrument;
(3) the servicing rights for any mortgage loan, deed of
trust, or other security instrument; and
(4) such other information as the Corporation may require.
(d) Considerations.--In carrying out the duties under this section,
the working group established under subsection (a) shall consider--
(1) the cost to States and localities, including any impact
on revenue generated by local recording of mortgage loan
documents;
(2) the feasibility of allowing States and localities to
continue to collect fees and revenue;
(3) the implications of data accuracy on judicial or non-
judicial foreclosure;
(4) the need to minimize conflicting mortgage loan registry
requirements;
(5) the need to provide consumers with access to key
information about the ownership and servicing of their mortgage
loans;
(6) the need to provide data accuracy, security, and
privacy;
(7) existing State real property and commercial laws and
any such laws in development, including an electronic mortgage
registry law developed as a uniform State law proposal;
(8) the costs and benefits of developing and maintaining a
national mortgage registry system, including any potential
impact on consumer mortgage credit and industry participants;
(9) the feasibility of using existing industry standards
and capabilities in the operation of a national mortgage
registry system; and
(10) any research, reports, or other work undertaken by
outside experts, including Federal and State entities.
(e) Report.--Not later than 2 years after the date on which the
working group is established under subsection (a), the working group
shall issue a publicly available report, which shall--
(1) include recommendations--
(A) as to whether the establishment of a national
electronic mortgage registry system is necessary or
appropriate in the public interest or for the
protection of the Mortgage Insurance Fund; and
(B) on how to establish, operate, and maintain a
national electronic mortgage registry system for
single-family mortgage loans and multifamily mortgage
loans; and
(2) if the working group recommends that the establishment
of the national electronic mortgage registry system is
necessary or appropriate under paragraph (1), outline the
minimum requirements for such registry, which shall--
(A) include considerations for the development and
implementation of electronic mortgage registry systems
by State and local government agencies, including
requirements to ensure accurate reporting to such
systems; and
(B) satisfy the recommendations of this report.
(f) Rulemaking.--
(1) In general.--Beginning 5 years after publication of the
report under subsection (e), the Corporation may, by rule,
establish a national electronic mortgage registry system for
single-family mortgage loans and multifamily mortgage loans,
deeds of trust, or other security instruments in accordance
with the findings of the report if--
(A) the Corporation determines that electronic
mortgage registry systems have not been created by
State and local government agencies in accordance with
the minimum requirements established in the report; and
(B) the establishment of a national electronic
mortgage registry system for single-family mortgage
loans and multifamily mortgage loans remains necessary
or appropriate in the public interest or for the
protection of the Mortgage Insurance Fund.
(2) Conflicting reports.--If the Corporation establishes a
national electronic mortgage registry system under paragraph
(1), the Corporation shall provide approved entities a
reasonable amount of time to correct a filing made in the
national electronic mortgage registry system established under
paragraph (1) that is in direct conflict with any filing in a
State or local real property recording system.
(3) Authority to extend establishment of registries.--The
Corporation, in consultation with appropriate State and local
government agencies responsible for real property recordation,
may extend the period of time provided under paragraph (1) for
a single period of not more than 5 years if the Corporation
determines that the extension is necessary or appropriate.
(4) Consultation and coordination with state and local
agencies.--To promote consistency in and minimize disruption to
the housing finance system and systems for the local recording
of mortgage loan documents, the Corporation shall consult and
coordinate with appropriate State and local government agencies
responsible for real property recordation when developing and
issuing rules under this subsection.
(5) Requirements on rules.--The rules and standards
promulgated under this section shall recognize and protect
valid perfected security interests in registered mortgage-
related documents.
(g) Rules of Construction.--
(1) Limitation on liability.--Nothing in this section shall
be construed as implying or establishing a private right of
action against an approved entity for filings made to a
national electronic mortgage registry system established under
subsection (f)(1) or other filing actions taken pursuant to
subsection (f).
(2) Limitation on supervisory or enforcement authority.--
Nothing in this section shall be construed as authorizing the
Corporation, before the establishment of a national electronic
mortgage registry system under subsection (f)(1), to exercise
supervisory or enforcement authority with respect to an
approved entity relating to a real property filing action in a
State or local real property recording system by the approved
entity.
(3) Preemption.--Nothing in this section shall be construed
as preempting, altering, annulling, exempting, or affecting the
applicability of any State or local law, including those laws
relating to real property recording or foreclosure.
SEC. 334. MULTIPLE LENDER ISSUES.
With respect to the dwelling of a borrower that serves as security
for an eligible mortgage loan, if the borrower enters into any credit
transaction that would result in the creation of a new mortgage loan or
other credit lien on such dwelling where the loan-to-value ratio of
such credit transaction amount is 80 percent or more, the creditor (as
defined in section 1026.2(a)(17) of title 12 of the Code of Federal
Regulations) shall notify the creditor of the senior eligible mortgage
loan within 30 days after consummation of such transaction.
SEC. 335. REQUIRED HARMONIZATION OF STANDARDS WITHIN ELIGIBLE MORTGAGE
CRITERIA.
(a) In General.--The Corporation shall consult and coordinate with
the Bureau of Consumer Financial Protection to ensure that the minimum
standards issued by the Corporation with respect to eligible single-
family mortgage loans pursuant to section 2(29) remain, to the greatest
extent possible, substantially similar to rules promulgated by the
Bureau pursuant to section 129C(b) of the Truth in Lending Act (15
U.S.C. 1639c(b)) provided that any revisions to, or amendments of, such
minimum standards issued by the Corporation--
(1) conform to all of the other requirements set forth
under section 2(29); and
(2) in the determination of the Corporation, do not
negatively impact the Mortgage Insurance Fund.
(b) Annual Report on Any Changes or Differences in Rules.--The
Corporation shall, on an annual basis, submit to the Chair and Ranking
Member of the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Chair and Ranking Member of the Committee on Financial
Services of the House of Representatives a report that--
(1) describes any changes to the minimum standards
identified in subsection (a);
(2) describes the economic analysis developed and used by
the Corporation for any changes described under paragraph (1)
in order to ensure such changes do not violate the duties of
the Corporation to protect the Mortgage Insurance Fund; and
(3) identifies any changes that occurred and differences
that exist between the minimum standards developed, adopted,
and maintained by the Corporation and the rules promulgated by
the Bureau pursuant to section 129C(b) of the Truth in Lending
Act (15 U.S.C. 1639c(b)).
TITLE IV--FHFA AND FMIC TRANSITION
SEC. 401. DEFINITIONS.
In this title--
(1) the term ``Director'' means--
(A) during the period beginning on the date of
enactment of this Act and ending on the day before the
agency transfer date, the Director of the Existing
Agency; and
(B) on and after the agency transfer date, the
Director of the Federal Housing Finance Agency of the
Corporation appointed under section 402(a)(2);
(2) the term ``Existing Agency'' means the Federal Housing
Finance Agency, as constituted on the day before the agency
transfer date;
(3) the term ``function'' means any duty, obligation,
power, authority, responsibility, right, privilege, activity,
or program;
(4) the term ``regulated entity'' has the same meaning as
in section 1303(20) of the Safety and Soundness Act (12 U.S.C.
4502(20)); and
(5) the term ``Transition Committee'' means the Federal
Mortgage Insurance Corporation Transition Committee established
under section 404(a)(1).
SEC. 402. FHFA TRANSITION.
(a) Establishment.--
(1) In general.--Effective on the agency transfer date,
there is established in the Corporation the Federal Housing
Finance Agency, which shall be maintained as a distinct entity
within the Corporation.
(2) Director.--The Federal Housing Finance Agency shall be
headed by a Director, who shall be--
(A) appointed by the President, by and with the
advice and consent of the Senate; and
(B) a non-voting member of the Board of Directors.
(b) Federal Housing Finance Agency Transfer.--
(1) Transfer of property and functions.--Effective on the
agency transfer date and unless otherwise specified by this
Act, all property and functions of the Federal Housing Finance
Agency are transferred to the Federal Housing Finance Agency of
the Corporation.
(2) Incumbent director.--The individual serving as the
Director of the Existing Agency on the day before the agency
transfer date may serve as the Director of the Federal Housing
Finance Agency of the Corporation until the end of the term of
such individual as Director of the Existing Agency under
section 1312(b)(2) of the Safety and Soundness Act (12 U.S.C.
4512(b)(2)), as in effect on the day before the agency transfer
date.
(3) Transition chairperson.--
(A) In general.--During the period beginning on the
agency transfer date and ending on the date on which
the first individual is appointed as Chairperson under
section 202, the Director shall serve as the Transition
Chairperson of the Corporation and, except as provided
in subparagraph (B), shall exercise all authorities of
the Chairperson, unless stated otherwise.
(B) Limitation on authority.--In serving as the
Transition Chairperson of the Corporation pursuant to
subparagraph (A), the Director shall not have the
authority to establish any rule under section 2 or any
rule relating to approved entities under title III.
(c) Powers and Duties.--
(1) In general.--The Director of the Federal Housing
Finance Agency of the Corporation shall--
(A) retain and exercise all powers, including
conservatorship and receivership powers, as amended by
this Act, of the Director of the Existing Agency on the
day before the agency transfer date relating to the
Federal Home Loan Bank System, the Federal Home Loan
Banks, and the enterprises;
(B) manage and implement actions authorized by the
Corporation related to the transition to the new
housing finance system that impact the conservatorship
or receivership of regulated entities; and
(C) consult with other members of the Transition
Committee and the Board of Directors as may be
appropriate to fulfill the requirements of this Act.
(2) Autonomy of fhfa.--Except as provided in section
604(a)(2), or as otherwise specifically provided in this Act,
the Chairperson and the Board of Directors may not--
(A) intervene in any matter or proceeding before
the Director, unless otherwise specifically provided by
law;
(B) appoint, direct, or remove any officer or
employee of the Federal Housing Finance Agency of the
Corporation; or
(C) merge or consolidate the Federal Housing
Finance Agency of the Corporation, or any of the
functions or responsibilities of the Federal Housing
Finance Agency of the Corporation, with any division,
office, or other component of the Corporation.
(d) Agency Expenditures and Budget.--
(1) In general.--After the agency transfer date, the
Director of the Federal Housing Finance Agency of the
Corporation--
(A) except as provided in paragraph (2), may
obligate and expend amounts available to the Federal
Housing Finance Agency; and
(B) shall submit regular updates to the Board of
Directors.
(2) Limitation on amount.--
(A) Before chairperson appointed.--During the
period beginning on the agency transfer date and ending
on the date on which the first individual is appointed
as Chairperson under section 202, the Director shall
require approval from the Transition Committee for any
agency capital expenditure in excess of $5,000,000.
(B) Chairperson appointed.--On and after the date
on which the first individual is appointed as
Chairperson under section 202, the Director shall
require approval from the Board of Directors for any
agency capital expenditure in excess of $5,000,0000.
(e) Cooperation.--During the period beginning on the date of
enactment of this Act and ending on the system certification date, the
Board of Directors and the Director shall cooperate and coordinate in
the exercise of their respective authorities to facilitate and achieve
an orderly transition from housing finance markets facilitated by the
enterprises to housing finance markets facilitated by the Corporation
with minimum disruption in the availability of mortgage credit.
(f) Coordination and Continuation of Certain Actions.--
(1) In general.--All regulations, orders, determinations,
and resolutions described in paragraph (2) shall remain in
effect according to the terms of such regulations, orders,
determinations, and resolutions, and shall be enforceable by or
against the Federal Housing Finance Agency of the Corporation
until modified, terminated, set aside, or superseded in
accordance with applicable law by the Federal Housing Finance
Agency of the Corporation, any court of competent jurisdiction,
or operation of law.
(2) Applicability.--A regulation, order, determination, or
resolution is described in this paragraph if it--
(A) was issued, made, prescribed, or allowed to
become effective by--
(i) the Existing Agency;
(ii) the Federal Housing Finance Board; or
(iii) a court of competent jurisdiction,
and relates to functions transferred by this
section;
(B) relates to the performance of functions that
are transferred by this section; and
(C) is in effect on the agency transfer date.
(g) Use of Agency Services.--Any agency, department, or other
instrumentality of the United States, and any successor to any such
agency, department, or instrumentality, which was providing supporting
services to the Existing Agency before the agency transfer date in
connection with functions that are transferred to the Federal Housing
Finance Agency of the Corporation shall--
(1) continue to provide such services, on a reimbursable
basis, until the transfer of such functions is complete; and
(2) consult with any such agency to coordinate and
facilitate a prompt and reasonable transition.
(h) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity of any
right, duty, or obligation of the United States, the Director
of the Existing Agency, or any other person, which--
(A) arises under--
(i) the Safety and Soundness Act;
(ii) the Federal National Mortgage
Association Charter Act;
(iii) the Federal Home Loan Mortgage
Corporation Act; or
(iv) any other provision of law applicable
with respect to the Existing Agency; and
(B) existed on the day before the agency transfer
date.
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Director of the Existing Agency in
connection with functions that are transferred to the Federal
Housing Finance Agency of the Corporation shall abate by reason
of the enactment of this Act, except that the Director of the
Federal Housing Finance Agency of the Corporation shall be
substituted for the Director of the Existing Agency as a party
to any such action or proceeding.
(i) Technical and Conforming Amendments.--
(1) Federal housing enterprises financial safety and
soundness act of 1992.--The Safety and Soundness Act (12 U.S.C.
4501 et seq.) is amended--
(A) in section 1303--
(i) in paragraph (2), by striking ``Federal
Housing Finance Agency established under
section 1311'' and inserting ``the Federal
Housing Finance Agency within the Federal
Mortgage Insurance Corporation established
under section 402(a)(1) of the Housing Finance
Reform and Taxpayer Protection Act of 2014'';
and
(ii) in paragraph (9), by striking
``Federal Housing Finance Agency'' and
inserting ``Agency'';
(B) in section 1311(a), by striking ``established''
and all that follows through ``Government'' and
inserting ``established in the Federal Mortgage
Insurance Corporation, the Federal Housing Finance
Agency, which shall be maintained as a distinct entity
within the Federal Mortgage Insurance Corporation'';
(C) in section 1312--
(i) in subsection (a)--
(I) in the heading, by striking
``Establishment of Position'' and
inserting ``Director''; and
(II) by striking, ``established the
position of''; and
(ii) in subsection (b)(1), by striking ``by
the President'' and all that follows through
``housing finance'' and inserting ``in
accordance with section 402(a)(2) of the
Housing Finance Reform and Taxpayer Protection
Act of 2014''; and
(D) in section 1367--
(i) in subsection (a)(7), by striking
``When acting'' and inserting ``Except as may
be provided in section 604(a)(2) of the Housing
Finance Reform and Taxpayer Protection Act of
2014, or as otherwise specifically provided for
in such Act, when acting''; and
(ii) by amending subsection (b)(2)(D) to
read as follows:
``(D) Power as conservator.--
``(i) Enterprises.--On and after the agency
transfer date, as that term is defined in
section 2 of the Housing Finance Reform and
Taxpayer Protection Act of 2014, the Agency
shall, as conservator, take such actions as are
necessary--
``(I) to wind down the operations
of the enterprises in an orderly manner
that complies with the requirements of
such Act;
``(II) to manage the affairs,
assets, and obligations of the
enterprises and to operate the
enterprises in compliance with the
requirements of such Act;
``(III) to undertake and carry out
any sale, transfer, or disposition
authorized in sections 315(c), 321(d),
604(i)(2), 701(b), or 702 of such Act
in order to facilitate the orderly
transition to the new housing finance
system authorized by such Act; and
``(IV) to maintain liquidity and
stability in the secondary mortgage
market until such time as the
enterprises shall have no authority to
conduct new business, pursuant to title
VI of such Act.
``(ii) Federal home loan banks.--The
Corporation may, as conservator, take such
actions as are--
``(I) necessary to put a Federal
Home Loan Bank in a sound and solvent
condition; and
``(II) appropriate to carry on the
business of a Federal Home Loan Bank
and preserve and conserve the assets
and property of the Federal Home Loan
Bank.''.
(2) Federal home loan bank act.--The Federal Home Loan Bank
Act (12 U.S.C. 1421 et seq.) is amended--
(A) by striking ``Chairman of the Director of
Governors'' each place that term appears and inserting
``Chairman of the Board of Governors''; and
(B) in section 2--
(i) in paragraph (11), by striking
``Federal Housing Finance Agency'' and
inserting ``Agency''; and
(ii) in paragraph (12), by striking ``the
Federal Housing Finance Agency'' and all that
follows through the period at the end and
inserting ``the Federal Housing Finance Agency
within the Federal Mortgage Insurance
Corporation established under section 402(a)(1)
of the Housing Finance Reform and Taxpayer
Protection Act of 2014''.
(3) Federal deposit insurance act.--The Federal Deposit
Insurance Act (12 U.S.C. 1811 et seq.) is amended--
(A) in section 11(t)(2)(A), by inserting after
clause (vii) the following:
``(viii) The Federal Mortgage Insurance
Corporation.''; and
(B) in section 18(x)--
(i) by inserting ``the Federal Mortgage
Insurance Corporation,'' before ``any Federal
banking agency'' each place that term appears;
and
(ii) by inserting ``Corporation,'' after
``such Bureau,'' each place that term appears.
(4) Federal financial institutions examination council act
of 1978.--The Federal Financial Institutions Examination
Council Act of 1978 (12 U.S.C. 3301 et seq.) is amended--
(A) in section 1004(a)--
(i) by redesignating paragraphs (5) and (6)
as paragraphs (6) and (7), respectively; and
(ii) by inserting after paragraph (4) the
following:
``(5) the Chairman of the Federal Mortgage Insurance
Corporation,'';
(B) in section 1011, in first sentence, by
inserting ``Federal Mortgage Insurance Corporation,''
after ``Financial Protection,''; and
(C) by inserting at the end the following:
``SEC. 1012. ESTABLISHMENT OF THE SUBCOMMITTEE ON MORTGAGE SERVICING.
``There shall be within the Council a subcommittee to be known as
the `Subcommittee on Mortgage Servicing', which shall consist of
designees of heads of the Federal financial institution regulatory
agencies, the Bureau of Consumer Financial Protection, the Federal
Mortgage Insurance Corporation, the Federal Housing Finance Agency, and
a representative of the State Liaison Committee established under
section 1007.''.
(5) FIRREA.--Section 1216 of the Financial Institutions
Reform, Recovery, and Enhancement Act of 1989 (12 U.S.C. 1833e)
is amended--
(A) in subsection (a), by striking ``Federal
Housing Finance Agency'' and inserting ``Federal
Mortgage Insurance Corporation''; and
(B) in subsection (c), by striking ``Federal
Housing Finance Agency'' and inserting ``Federal
Mortgage Insurance Corporation''.
(6) Housing and urban-rural recovery act of 1983.--The
first sentence of section 469 of the Housing and Urban-Rural
Recovery Act of 1983 (12 U.S.C. 1701p-1) is amended by
inserting ``the Federal Mortgage Insurance Corporation,'' after
``cooperation of''.
(7) Paperwork reduction act.--Section 3502(5) of title 44,
United States Code (commonly known as the ``Paperwork Reduction
Act''), is amended by striking ``Federal Housing Finance
Agency'' and inserting ``Federal Mortgage Insurance
Corporation''.
(8) Public law 93-495.--Section 111 of Public Law 93-495
(12 U.S.C. 250) is amended by inserting ``the Federal Mortgage
Insurance Corporation,'' after ``Federal Housing Finance
Agency,''.
(9) Right to financial privacy act of 1978.--Section
1101(7) of the Right to Financial Privacy Act of 1978 (12
U.S.C. 3401(7)) is amended--
(A) in subparagraph (H), by striking ``; or'' and
inserting a semicolon;
(B) in subparagraph (I), by striking ``; and'' and
inserting ``; or''; and
(C) by adding at the end the following:
``(J) the Federal Mortgage Insurance Corporation;
and''.
(10) Title 5, united states code.--Title 5, United States
Code, is amended--
(A) in section 5313, by inserting the following new
item:
``Chairperson of the Federal Mortgage Insurance
Corporation.''; and
(B) in section 3132(a)(1)(D)--
(i) by striking ``Supervision,,'' and
inserting ``Supervision,''; and
(ii) by inserting the ``Federal Mortgage
Insurance Corporation,'' after ``Federal
Housing Finance Agency,''.
(11) Title 18, united states code.--Title 18, United States
Code, is amended by striking ``Federal Housing Finance Agency''
each place such term appears in each of sections 212, 657,
1006, 1014, and 1905 and inserting ``Federal Mortgage Insurance
Corporation''.
(12) Federal credit union act.--Section 107(7)(E) of the
Federal Credit Union Act (12 U.S.C. 1757(7)(E)) is amended by
inserting ``the Federal Mortgage Insurance Corporation,''
before ``the Federal National Mortgage Association''.
(13) Bank holding company act.--Section 5(c)(5)(B) of the
Bank Holding Company Act (12 U.S.C. 1844(c)(5)(B)) is amended--
(A) in clause (iv), by striking ``; or'' and
inserting a semicolon;
(B) in clause (v), by striking the period at the
end and insert ``; or''; and
(C) by adding at the end the following:
``(vi) an approved guarantor approved under
section 311 of the Housing Finance Reform and
Taxpayer Protection Act of 2014.''.
(14) Congressional budget act of 1974.--Section 504(c) of
the Congressional Budget Act of 1974 (2 U.S.C. 661c(c)) is
amended--
(A) in paragraph (1), by striking ``or'';
(B) by redesignating paragraph (2) as paragraph
(3); and
(C) by inserting after paragraph (1) the following:
``(2) are credit programs of the Federal Mortgage Insurance
Corporation; or''.
(15) Effective date.--The amendments made by this
subsection shall take effect on the agency transfer date.
SEC. 403. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FHFA.
(a) Transfer.--
(1) In general.--Effective on the agency transfer date,
each employee of the Existing Agency, including each employee
of the Office of the Inspector General of the Existing Agency,
who is in good standing, shall be transferred to the
Corporation for employment, and such transfer shall be deemed a
transfer of function for purposes of section 3503 of title 5,
United States Code.
(2) Assignment.--
(A) In general.--Except as provided in subparagraph
(B), an employee transferred under paragraph (1) shall
be appointed to a position in the Federal Housing
Finance Agency of the Corporation.
(B) Exception.--On and after the agency transfer
date, the Chairperson, in consultation with the
Director of the Federal Housing Finance Agency of the
Corporation, may reassign an employee transferred under
paragraph (1) to a component of the Corporation other
than the Federal Housing Finance Agency of the
Corporation, if the reassignment is in the best
interest of the Corporation.
(b) Guaranteed Positions.--
(1) In general.--Each employee transferred under subsection
(a) shall be guaranteed a position with the same status,
tenure, grade, and pay as that held on the day immediately
preceding the transfer.
(2) No involuntary separation or reduction.--An employee
transferred under subsection (a) holding a permanent position
on the day immediately preceding the transfer may not be
involuntarily separated or reduced in grade or compensation
during the 12-month period beginning on the date of transfer,
except for cause, or, in the case of a temporary employee,
separated in accordance with the terms of the appointment of
the employee.
(c) Appointment Authority for Excepted and Senior Executive Service
Employees.--
(1) In general.--In the case of an employee occupying a
position in the excepted service or the Senior Executive
Service, any appointment authority established under law or by
regulations of the Office of Personnel Management for filling
such position shall be transferred, subject to paragraph (2).
(2) Decline of transfer.--The Corporation may decline a
transfer of authority under paragraph (1), to the extent that
such authority relates to--
(A) a position excepted from the competitive
service because of its confidential, policymaking,
policy-determining, or policy-advocating character; or
(B) a noncareer appointee in the Senior Executive
Service (within the meaning of section 3132(a)(7) of
title 5, United States Code).
(d) Employee Benefit Programs.--
(1) In general.--Any employee of the Existing Agency
accepting employment with the Corporation as a result of a
transfer under subsection (a) may retain, for 12 months after
the date on which such transfer occurs, membership in any
employee benefit program of the Existing Agency or the
Corporation, as applicable, including insurance, to which such
employee belongs on the date of the transfer under subsection
(a), if--
(A) the employee does not elect to give up the
benefit or membership in the program; and
(B) the benefit or program is continued by the
Corporation.
(2) Cost differential.--
(A) In general.--The difference in the costs
between the benefits which would have been provided by
the Existing Agency and those provided by this section
shall be paid by the Corporation.
(B) Health insurance.--If any employee elects to
give up membership in a health insurance program or the
health insurance program is not continued by the
Corporation, the employee shall be permitted to select
an alternate Federal health insurance program not later
than 30 days after the date of such election or notice,
without regard to any other regularly scheduled open
season.
(e) Enterprise Employees.--To ensure an orderly transition to the
new housing finance system established under this Act and to facilitate
the organization, formation, and competency of the Corporation, the
Corporation may hire employees from the enterprises.
(f) Reorganization.--If the Corporation determines that a
reorganization of the workforce is required, the reorganization shall
be deemed a major reorganization for purposes of affording affected
employee retirement under section 8336(d)(2) or 8414(b)(1)(B) of title
5, United States Code.
SEC. 404. TRANSITION COMMITTEE.
(a) Establishment and Purpose.--
(1) In general.--Effective on the date of enactment of this
Act, there is established the Federal Mortgage Insurance
Corporation Transition Committee.
(2) Purpose.--The purpose of the Transition Committee shall
be to--
(A) develop a plan to facilitate an orderly
transition to a new housing finance system in
accordance with this Act; and
(B) provide advice to the Transition Chairperson or
the Board when consulted.
(b) Composition.--
(1) Members.--The Transition Committee shall be comprised
of--
(A) the Director;
(B) the Chairman of the Federal Deposit Insurance
Corporation;
(C) the Comptroller of the Currency;
(D) the Chairperson; and
(E) any member of the Board of Directors.
(2) Chairperson.--
(A) Before chairperson of corporation.--Until the
date on which the first individual is appointed as
Chairperson under section 202, the Director shall serve
as the Chairperson of the Transition Committee.
(B) Chairperson of corporation appointed.--On and
after the date on which the first individual is
appointed as Chairperson under section 202, the
Chairperson shall serve as the Chairperson of the
Transition Committee.
(3) Acting officials may serve.--In the event of a vacancy
in the office of the head of a member agency, and pending the
appointment of a successor, or during the absence or disability
of the head of a member agency, the acting head of the member
agency shall serve as a member of the Transition Committee in
the place of that agency head.
(4) Staff.--As necessary to carry out the duties of the
Transition Committee, the Chairperson of the Transition
Committee may--
(A) before the agency transfer date, use employees
of the Existing Agency; and
(B) on and after the agency transfer date, use
employees of the Corporation.
(c) Transition Plan.--
(1) Development.--The Transition Committee shall develop
the transition plan required by section 602.
(2) Approval.--The transition plan may not be submitted to
Congress under section 602, unless it is approved by a majority
of the Transition Committee.
(d) Dissolution.--The Transition Committee shall be dissolved upon
the later of--
(1) the date on which the first individual is appointed as
Chairperson under section 202; or
(2) the date on which the transition plan is submitted to
Congress in accordance with subsection (c)(2) and section 602.
SEC. 405. TRANSITION ASSESSMENTS.
(a) In General.--Section 1316 of the Safety and Soundness Act (12
U.S.C. 4516) is amended by adding at the end the following:
``(i) Annual Assessments Relating to Initial Funding of the FMIC.--
Notwithstanding title VI of the Housing Finance Reform and Taxpayer
Protection Act of 2014 or any other provision of law, for the period
beginning on the date of enactment of this subsection and ending on the
system certification date (as that date is set forth under title VI of
the Housing Finance Reform and Taxpayer Protection Act of 2014), the
Agency shall establish and collect from the enterprises annual
assessments in addition to those required under subsection (a) in an
amount not exceeding the amount sufficient to provide for the
reasonable costs (including administrative costs) and expenses of the
Federal Mortgage Insurance Corporation, including those purposes
detailed in section 303(e)(6) of the Housing Finance Reform and
Taxpayer Protection Act of 2014. All amounts collected under this
subsection shall be transferred to the Federal Mortgage Insurance
Corporation. The annual assessment shall be payable semiannually for
each fiscal year, on October 1 and April 1.''.
(b) Treatment of Assessments.--
(1) Deposit.--
(A) Amounts received by the corporation.--Amounts
received by the Corporation from assessments imposed
under section 1316(i) of the Safety and Soundness Act
shall be deposited by the Corporation in the Mortgage
Insurance Fund.
(B) Amounts received by the existing agency.--
Amounts received by the Existing Agency beginning on
the date of enactment of this Act until the agency
transfer date from assessments imposed under section
1316(i) of the Safety and Soundness Act shall be held
in an account of the Existing Agency and shall be
transferred to the Corporation on the agency transfer
date for deposit in the Mortgage Insurance Fund in
accordance with subparagraph (A).
(C) Exemption from apportionment.--Notwithstanding
any other provision of law, amounts received by the
Corporation from any assessment imposed under section
1316(i) of the Safety and Soundness Act shall not be
subject to apportionment for the purposes of chapter 15
of title 31, United States Code, or under any other
authority.
(D) Rule of construction.--Amounts received by the
Corporation from any assessment imposed under section
1316(i) of the Safety and Soundness Act shall not be
construed to be Government or public funds or
appropriated money.
(2) Use of funds.--
(A) In general.--The Existing Agency shall use
amounts received from assessments imposed under section
1316(i) of the Safety and Soundness Act solely for the
purpose of funding the Mortgage Insurance Fund on the
agency transfer date.
(B) Treasury investments.--The Existing Agency may
request the Secretary of the Treasury to invest the
amounts received from assessments imposed under section
1316(i) of the Safety and Soundness Act.
(C) Government obligations.--Pursuant to a request
under subparagraph (B), the Secretary of the Treasury
shall invest such amounts in Federal Government
obligations--
(i) guaranteed as to principal and interest
by the United States with maturities suitable
to the needs of the Existing Agency; and
(ii) bearing interest at a rate determined
by the Secretary of the Treasury, taking into
consideration current market yields on
outstanding marketable obligations of the
United States of comparable maturity.
SEC. 406. TRANSFER OF POWERS AND DUTIES ON THE SYSTEM CERTIFICATION
DATE; CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.
(a) Transfer of Functions.--Effective on the system certification
date and except as provided in section 332(a), there are transferred to
the Corporation all functions of the Federal Housing Finance Agency of
the Corporation and the Director thereof.
(b) Coordination and Continuation of Certain Actions.--
(1) In general.--All regulations, orders, determinations,
and resolutions described in paragraph (2) shall remain in
effect according to the terms of such regulations, orders,
determinations, and resolutions, and shall be enforceable by or
against the Corporation until modified, terminated, set aside,
or superseded in accordance with applicable law by the
Corporation, any court of competent jurisdiction, or operation
of law.
(2) Applicability.--A regulation, order, determination, or
resolution is described in this paragraph if it--
(A) was issued, made, prescribed, or allowed to
become effective by--
(i) the Existing Agency;
(ii) the Federal Housing Finance Agency of
the Corporation;
(iii) the Federal Housing Finance Board; or
(iv) a court of competent jurisdiction;
(B) relates to the performance of functions that
are transferred by subsection (a); and
(C) is in effect on the effective date of the
transfer under subsection (a).
(c) Use of Agency Services.--Any agency, department, or other
instrumentality of the United States, and any successor to any such
agency, department, or instrumentality, which was providing supporting
services to the Federal Housing Finance Agency of the Corporation
before the system certification date in connection with functions that
are transferred to the Corporation under subsection (a) shall--
(1) continue to provide such services, on a reimbursable
basis, until the transfer of such functions is complete; and
(2) consult with any such agency to coordinate and
facilitate a prompt and reasonable transition.
(d) Savings Provisions.--
(1) Existing rights, duties, and obligations not
affected.--Subsection (a) shall not affect the validity of any
right, duty, or obligation of the United States, the Director
of the Federal Housing Finance Agency of the Corporation, or
any other person, which--
(A) arises under--
(i) the Safety and Soundness Act;
(ii) the Federal National Mortgage
Association Charter Act;
(iii) the Federal Home Loan Mortgage
Corporation Act; or
(iv) any other provision of law applicable
with respect to the Federal Housing Finance
Agency; and
(B) existed on the day before the system
certification date.
(2) Continuation of suits.--No action or other proceeding
commenced by or against the Director of the Federal Housing
Finance Agency of the Corporation in connection with functions
that are transferred to the Corporation under subsection (a)
shall abate by reason of the enactment of this Act, except that
the Corporation shall be substituted for the Director of the
Federal Housing Finance Agency of the Corporation as a party to
any such action or proceeding.
SEC. 407. TECHNICAL AND CONFORMING AMENDMENTS RELATING TO ABOLISHMENT
OF FHFA.
(a) Effective Date.--The amendments made by this section shall take
effect on the system certification date.
(b) Access to Local TV Act of 2000.--Section 1004(d)(2)(D)(iii) of
the Launching Our Communities' Access to Local Television Act of 2000
(47 U.S.C. 1103(d)(2)(D)(iii)) is amended by striking ``Federal Housing
Finance Agency'' and inserting ``Federal Mortgage Insurance
Corporation''.
(c) Commodity Exchange Act.--Section 1a(39)(E) of the Commodity
Exchange Act (7 U.S.C. 1a(39)(E)) is amended by striking ``Federal
Housing Finance Agency'' and inserting ``Federal Mortgage Insurance
Corporation''.
(d) Emergency Economic Stabilization Act of 2008.--The Emergency
Economic Stabilization Act of 2008 (12 U.S.C. 5201 note) is amended--
(1) in section 104(b)(3), by striking ``the Director of the
Federal Housing Finance Agency'' and inserting ``the
Chairperson of the Federal Mortgage Insurance Corporation'';
(2) in section 109(b), by striking ``Federal Housing
Finance Agency'' and inserting ``Federal Mortgage Insurance
Corporation''; and
(3) in section 110(a)(1)(A), by striking ``Federal Housing
Finance Agency'' and inserting ``Federal Mortgage Insurance
Corporation''.
(e) Federal National Mortgage Association Charter Act.--The Federal
National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) is
amended--
(1) in section 303(c)(2), by striking ``Director of the
Federal Housing Finance Agency'' and inserting ``Chairperson of
the Federal Mortgage Insurance Corporation''; and
(2) in section 309--
(A) in subsection (d)(3)(B)--
(i) by striking ``Federal Housing Finance
Agency'' and inserting ``Federal Mortgage
Insurance Corporation''; and
(ii) by striking ``Director'' each place
that term appears and inserting
``Chairperson'';
(B) in subsection (k)(1), by striking ``Director of
the Federal Housing Finance Agency'' and inserting
``Chairperson of the Federal Mortgage Insurance
Corporation'';
(C) in subsection (m)--
(i) in paragraph (1), by striking
``Director of the Federal Housing Finance
Agency'' and inserting ``Chairperson of the
Federal Mortgage Insurance Corporation''; and
(ii) in paragraph (2)--
(I) by striking ``Federal Housing
Finance Agency'' and inserting
``Federal Mortgage Insurance
Corporation''; and
(II) by striking ``Director'' each
place that term appears and inserting
``Chairperson''; and
(D) in subsection (n)--
(i) in paragraph (1), by striking
``Director of the Federal Housing Finance
Agency'' and inserting ``Chairperson of the
Federal Mortgage Insurance Corporation'';
(ii) in paragraph (2)(L), by striking
``Director of the Federal Housing Finance
Agency'' and inserting ``Chairperson of the
Federal Mortgage Insurance Corporation''; and
(iii) in paragraph (3)(B), by striking
``Director of the Federal Housing Finance
Agency'' and inserting ``Chairperson of the
Federal Mortgage Insurance Corporation''.
(f) Federal Deposit Insurance Act.--The Federal Deposit Insurance
Act (12 U.S.C. 1811 et seq.) is amended--
(1) in section 7(a)(2)(A), by striking ``Federal Housing
Finance Agency'' each place that term appears and inserting
``Federal Mortgage Insurance Corporation'';
(2) in section 8(e)(7)(A)(vi), by striking ``Federal
Housing Finance Agency'' each place that term appears and
inserting ``Federal Mortgage Insurance Corporation''; and
(3) in section 33(e), by striking ``Federal Housing Finance
Agency'' and inserting ``Federal Mortgage Insurance
Corporation''.
(g) Federal Financial Institutions Examination Council Act of
1978.--The first sentence of section 1011 of the Federal Financial
Institutions Examination Council Act of 1978 (12 U.S.C. 3310) is
amended by striking ``and the Federal Housing Finance Agency''.
(h) Federal Home Loan Bank Act.--The Federal Home Loan Bank Act (12
U.S.C. 1421 et seq.) is amended--
(1) in section 2--
(A) in paragraph (11), as previously amended by
section 402(i), by striking ``Agency'' and inserting
``Chairperson of the Federal Mortgage Insurance
Corporation''; and
(B) in paragraph (12), as previously amended by
section 402(i), by striking ``the Federal Housing
Finance Agency within the Federal Mortgage Insurance
Corporation established under section 402(a)(1) of the
Housing Finance Reform and Taxpayer Protection Act of
2014'' and inserting ``Federal Mortgage Insurance
Corporation established under section 201 of the
Housing Finance Reform and Taxpayer Protection Act of
2014'';
(2) in section 10(a)(3)(B), by inserting ``, subject to
such regulations that the Federal Mortgage Insurance
Corporation may issue to ensure the safety and soundness of the
Federal Home Loan Banks, covered securities insured by the
Federal Mortgage Insurance Corporation under the Housing
Finance Reform and Taxpayer Protection Act of 2014'' after
``Government National Mortgage Association''; and
(3) in section 11(h), by inserting ``, subject to such
regulations that the Federal Mortgage Insurance Corporation may
issue to ensure the safety and soundness of the Federal Home
Loan Banks, covered securities insured by the Federal Mortgage
Insurance Corporation under the Housing Finance Reform and
Taxpayer Protection Act of 2014'' after ``Federal Home Loan
Mortgage Corporation pursuant to section 305 or section 306 of
the Federal Home Loan Mortgage Corporation Act''.
(i) Federal Home Loan Mortgage Corporation Act.--The Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.) is amended--
(1) in section 303--
(A) in subsection (b)(2), by striking ``Director of
the Federal Housing Finance Agency'' and inserting
``Chairperson of the Federal Mortgage Insurance
Corporation''; and
(B) in subsection (h)--
(i) in paragraph (2)--
(I) by striking ``Federal Housing
Finance Agency'' and inserting
``Federal Mortgage Insurance
Corporation''; and
(II) by striking ``Director'' each
place that term appears and inserting
``Chairperson;'' and
(ii) in paragraph (4), by striking
``Director'' and inserting ``Chairperson'';
(2) in section 305(a)(2), by striking ``Director of the
Federal Housing Finance Agency'' and inserting ``Chairperson of
the Federal Mortgage Insurance Corporation''; and
(3) in section 307--
(A) in subsection (c)(1), by striking ``Federal
Housing Finance Agency'' and inserting ``Federal
Mortgage Insurance Corporation'';
(B) in subsection (e)--
(i) in paragraph (1)--
(I) by striking ``Federal Housing
Finance Agency'' and inserting
``Federal Mortgage Insurance
Corporation''; and
(II) by striking ``Director'' each
place that term appears and inserting
``Chairperson''; and
(ii) in paragraph (2)--
(I) by striking ``Federal Housing
Finance Agency'' and inserting
``Federal Mortgage Insurance
Corporation''; and
(II) by striking ``Director'' each
place that term appears and inserting
``Chairperson''; and
(C) in subsection (f)--
(i) in paragraph (1), by striking
``Director of the Federal Housing Finance
Agency'' and inserting ``Chairperson of the
Federal Mortgage Insurance Corporation'';
(ii) in paragraph (2), by striking
``Director of the Federal Housing Finance
Agency'' each place that term appears and
inserting ``Chairperson of the Federal Mortgage
Insurance Corporation''; and
(iii) in paragraph (3)(B), by striking
``Director of the Federal Housing Finance
Agency'' and inserting ``Chairperson of the
Federal Mortgage Insurance Corporation''.
(j) Federal Housing Enterprises Financial Safety and Soundness Act
of 1992.--The Safety and Soundness Act (12 U.S.C. 4501 et seq.) is
amended--
(1) in section 1303--
(A) in paragraph (2), as previously amended by
section 402(i), by striking ``the Federal Housing
Finance Agency within the Federal Mortgage Insurance
Corporation established under section 402(a)(1) of the
Housing Finance Reform and Taxpayer Protection Act of
2014'' and inserting ``Federal Mortgage Insurance
Corporation established under section 201 of the
Housing Finance Reform and Taxpayer Protection Act of
2014'';
(B) by striking paragraph (4) and inserting the
following:
``(4) [Reserved.]''; and
(C) in paragraph (9), as previously amended by
section 402(i), by striking ``Agency'' and inserting
``Chairperson of the Federal Mortgage Insurance
Corporation'';
(2) by repealing section 1313A;
(3) in section 1317--
(A) by striking subsection (d); and
(B) by redesignating subsections (e) through (i) as
subsections (d) through (h), respectively; and
(4) in section 1367--
(A) in subsection (a), in the heading, by striking
``Agency'' and inserting ``Corporation''; and
(B) in subsection (b), in the heading to paragraph
(9)(B), as so redesignated, by striking ``Agency'' and
inserting ``Corporation''.
(k) Financial Institutions Reform, Recovery, and Enhancement Act of
1989.--The Financial Institutions Reform, Recovery, and Enhancement Act
of 1989 (Public Law 101-73; 103 Stat. 183) is amended--
(1) in section 402(e), by striking ``Federal Housing
Finance Agency'' each place that term appears and inserting
``Federal Mortgage Insurance Corporation'';
(2) in section 1124, by striking ``Federal Housing Finance
Agency'' each place that term appears and inserting ``Federal
Mortgage Insurance Corporation''; and
(3) in section 1125(b), by striking ``Federal Housing
Finance Agency'' and inserting ``Federal Mortgage Insurance
Corporation''.
(l) Flood Disaster Protection Act of 1973.--Section 102(f)(3)(A) of
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)(3)(A)) is
amended by striking ``Director of the Federal Housing Finance Agency''
and inserting ``Chairperson of the Federal Mortgage Insurance
Corporation''.
(m) Housing Economic Recovery Act of 2008.--Section 1002(b) of the
Housing and Economic Recovery Act of 2008 (Public Law 110-289; 122
Stat. 2661) is amended--
(1) in paragraph (1), by striking ``Federal Housing Finance
Agency'' and inserting ``Federal Mortgage Insurance
Corporation''; and
(2) in paragraph (2), by striking ``Director of the
Agency'' and inserting ``Chairperson of the Federal Mortgage
Insurance Corporation''.
(n) Housing and Urban-Rural Recovery Act of 1983.--The first
sentence of section 469 of the Housing and Urban-Rural Recovery Act of
1983 (12 U.S.C. 1701p-1) is amended by striking ``Federal Housing
Finance Agency,''.
(o) Multifamily Assisted Housing Reform and Affordability Act of
1997.--Section 517(b)(4) of the Multifamily Assisted Housing Reform and
Affordability Act of 1997 (42 U.S.C. 1437f note) is amended by striking
``Federal Housing Finance Agency'' and inserting ``Federal Mortgage
Insurance Corporation''.
(p) Public Law 93-495.--Section 111 of Public Law 93-495 (12 U.S.C.
250) is amended by striking ``the Director of the Federal Housing
Finance Agency,''.
(q) Neighborhood Reinvestment Corporation Act.--Section 606(c)(3)
of the Neighborhood Reinvestment Corporation Act (42 U.S.C. 8105(c)(3))
is amended by striking ``Federal Housing Finance Agency'' and inserting
``Federal Mortgage Insurance Corporation''.
(r) Riegle Community Development and Regulatory Improvement Act of
1994.--Section 117(e) of the Riegle Community Development and
Regulatory Improvement Act of 1994 (12 U.S.C. 4716(e)) is amended by
striking ``Federal Housing Finance Agency'' and inserting ``Federal
Mortgage Insurance Corporation''.
(s) Right to Financial Privacy Act of 1978.--Section 1113(o) of the
Right to Financial Privacy Act of 1978 (12 U.S.C. 3413(o)) is amended--
(1) in the heading to the subsection, by striking ``Federal
Housing Finance Agency'' and inserting ``Federal Mortgage
Insurance Corporation'';
(2) by striking ``Federal Housing Finance Agency'' and
inserting ``Federal Mortgage Insurance Corporation''; and
(3) by striking ``Federal Housing Finance Agency's'' and
inserting ``Federal Mortgage Insurance Corporation's''.
(t) Sarbanes-Oxley Act of 2002.--Section 105(b)(5)(B)(ii)(II) of
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(B)(ii)(II)) is
amended by striking ``Director of the Federal Housing Finance Agency''
and inserting ``Chairperson of the Federal Mortgage Insurance
Corporation''.
(u) Securities Exchange Act.--Section 15G of the Securities
Exchange Act (15 U.S.C. 78o-11) is amended--
(1) in subsection (b)(2), by striking ``Federal Housing
Finance Agency'' and inserting ``Federal Mortgage Insurance
Corporation''; and
(2) in subsection (e)(4), by striking ``Director of the
Federal Housing Finance Agency'' each place that term appears
and inserting ``Chairperson of the Federal Mortgage Insurance
Corporation''.
(v) Truth in Lending Act.--The Truth in Lending Act (15 U.S.C. 1601
et seq.) is amended--
(1) section 129H(b)(4), by striking ``Federal Housing
Finance Agency'' and inserting ``Federal Mortgage Insurance
Corporation''; and
(2) in section 129E--
(A) in subsection (g)(1), by striking ``Federal
Housing Finance Agency'' and inserting ``Federal
Mortgage Insurance Corporation''; and
(B) in subsection (h), by striking ``Federal
Housing Finance Agency'' and inserting ``Federal
Mortgage Insurance Corporation''.
(w) Other References in Federal Law.--On and after the system
certification date, any reference to the Federal Housing Finance Agency
or the Director thereof in any law, rule, regulation, certificate,
directive, instruction, or other official paper in force on the system
certification date shall be considered to refer and apply to the
Federal Mortgage Insurance Corporation and the Chairperson thereof,
respectively.
SEC. 408. REPEAL OF MANDATORY HOUSING GOALS.
(a) Repeal of Housing Goals.--The Safety and Soundness Act is
amended by striking sections 1331 through 1336 (12 U.S.C. 4561-6).
(b) Conforming Amendments.--The Safety and Soundness Act (12 U.S.C.
4501 et seq.) is amended--
(1) in section 1303(28), by striking ``, and, for the
purposes'' and all that follows through ``designated disaster
areas'';
(2) in section 1324(b)(1)(A), by striking clauses (i),
(ii), and (iv);
(3) in section 1341--
(A) in subsection (a)--
(i) in paragraph (1), by inserting ``or''
after the semicolon at the end;
(ii) in paragraph (2), by striking the
semicolon at the end and inserting a period;
and
(iii) by striking paragraphs (3) and (4);
and
(B) in subsection (b)(2)--
(i) in subparagraph (A), by inserting
``or'' after the semicolon at the end;
(ii) by striking subparagraphs (B) and (C);
and
(iii) by redesignating subparagraph (D) as
subparagraph (B);
(4) in section 1345(a)--
(A) in paragraph (1), by inserting ``or'' after the
semicolon at the end;
(B) in paragraph (2), by striking the semicolon at
the end and inserting a period; and
(C) by striking paragraphs (3) and (4); and
(5) in section 1371(a)(2), by striking ``with any housing
goal established under subpart B of part 2 of subtitle A of
this title, with section 1336 or 1337 of this title,''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of enactment of this Act.
(d) Required Compliance With Nondiscrimination Laws.--
(1) Approved entities; platform.--Notwithstanding any other
provision of this Act, approved entities and the Securitization
Platform shall comply with Federal and State nondiscrimination
laws, including the Fair Housing Act (42 U.S.C. 3601 et seq.)
and the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.).
(2) Corporation.--
(A) In general.--In carrying out this Act, the
Corporation shall comply with Federal and State
nondiscrimination laws.
(B) Periodic review.--The Corporation shall
periodically review its policies, standards, and
guidelines with respect to eligible mortgage loans,
including, but not limited to, any automated
underwriting systems, to ensure that such policies,
standards, and guidelines are consistent with the
requirements of section 408(d).
(3) Safety and soundness act.--Section 1325 of the Safety
and Soundness Act (12 U.S.C. 4545) is amended--
(A) in the matter preceding paragraph (1), by
striking ``The Secretary'' and inserting the following:
``(a) In General.--The Secretary'';
(B) in paragraph (1)--
(i) by inserting ``, approved guarantor,
approved multifamily guarantor, approved
aggregator, and the Securitization Platform''
after ``enterprise'';
(ii) by inserting ``or guarantee'' after
``purchase''; and
(iii) by inserting ``or mortgage-backed
security'' after ``mortgage'';
(C) in paragraph (2)--
(i) by striking ``(2) by regulation'' and
by inserting ``(2)(A) by regulation'';
(ii) by inserting ``and'' after the
semicolon; and
(iii) by adding at the end the following:
``(B) with respect to the market for covered guarantee
transactions and covered market-based risk-sharing
transactions, by regulation, require each approved guarantor,
approved multifamily guarantor, and approved aggregator to
submit data to the Secretary to assist the Secretary in
investigating whether a mortgage lender with which the approved
guarantor, approved multifamily guarantor, or approved
aggregator does business has failed to comply with the Fair
Housing Act (42 U.S.C. 3601 et seq.);'';
(D) in paragraph (3)--
(i) by striking ``(3) by regulation'' and
by inserting ``(3)(A) by regulation'';
(ii) by inserting ``and'' after the
semicolon; and
(iii) by adding at the end the following:
``(B) with respect to the market for covered guarantee
transactions and covered market-based risk-sharing
transactions, by regulation, require each approved guarantor,
approved multifamily guarantor, and approved aggregator to
submit data to the Secretary to assist in investigating whether
a mortgage lender with which the approved guarantor, approved
multifamily guarantor, or approved aggregator does business has
failed to comply with the Equal Credit Opportunity Act (15
U.S.C. 1691 et seq.), and shall submit any such information
received to the appropriate Federal agencies, as provided in
section 704 of the Equal Credit Opportunity Act (15 U.S.C.
1691c), for appropriate action;'';
(E) in paragraph (4), by inserting ``and the
Federal Mortgage Insurance Corporation'' after
``enterprises'';
(F) in paragraph (5)--
(i) by striking ``(5) direct the'' and by
inserting ``(5)(A) direct the'';
(ii) by inserting ``and'' after the
semicolon; and
(iii) by adding at the end the following:
``(B) with respect to the market for covered guarantee
transactions and covered market-based risk-sharing
transactions, apply various remedial actions, including
suspension, probation, reprimand, or settlement, against
lenders that have been found to have engaged in discriminatory
lending practices in violation of the Fair Housing Act or the
Equal Credit Opportunity Act, pursuant to a final adjudication
on the record, and after opportunity for an administrative
hearing, in accordance with subchapter II of chapter 5 of title
5, United States Code; and'';
(G) in paragraph (6)--
(i) by striking ``(6) periodically review''
and by inserting ``(6)(A) periodically
review'';
(ii) by striking the period at the end and
inserting ``; and''; and
(iii) by adding at the end the following:
``(B) with respect to the market for covered
guarantee transactions and covered market-based risk-
sharing transactions, periodically review and comment
on the underwriting and appraisal guidelines of each
approved guarantor, approved multifamily guarantor, and
approved aggregator, and the policies, standards, and
guidelines of the Securitization Platform to ensure
that such guidelines are consistent with the Fair
Housing Act and this section.''; and
(H) by adding at the end the following:
``(b) Definitions.--In this section, the terms `approved
guarantor', `approved multifamily guarantor', `approved aggregator',
`covered guarantee transaction', `covered market-based risk-sharing
transaction', and `Securitization Platform' have the meanings given
such terms in section 2 of the Housing Finance Reform and Taxpayer
Protection Act of 2014.''.
TITLE V--IMPROVING TRANSPARENCY, ACCOUNTABILITY, AND EFFICACY WITHIN
AFFORDABLE HOUSING
SEC. 501. AFFORDABLE HOUSING ALLOCATIONS.
(a) Fee and Allocation of Amounts.--In addition to any fees for the
provision of insurance established in accordance with title III, in
each fiscal year the Corporation shall--
(1) charge and collect a fee determined as provided in
subsection (b) for each dollar of the outstanding principal
balance of all eligible mortgage loans that collateralize
covered securities insured under this Act; and
(2) allocate or otherwise transfer, on an annual basis--
(A) 75 percent of such fee amounts to the Secretary
of Housing and Urban Development to fund the Housing
Trust Fund established under section 1338 of the Safety
and Soundness Act (12 U.S.C. 4568);
(B) 15 percent of such fee amounts to the Secretary
of the Treasury to fund the Capital Magnet Fund
established under section 1339 of the Safety and
Soundness Act (12 U.S.C. 4569); and
(C) 10 percent of such fee amounts to the
Corporation to fund the Market Access Fund established
under section 504.
(b) Determination of Fee.--The fee required to be charged under
subsection (a) shall be determined as follows:
(1) Initial fee.--Beginning on the date of enactment of
this Act and ending upon the date set forth under paragraph
(2)(E), the fee shall be an amount equal to 10 basis points for
each dollar of the outstanding principal balance of eligible
mortgage loans collateralizing covered securities insured under
this Act.
(2) Subsequent incentive-based fee.--Not later than 6
months after the date that the Corporation has approved at
least 2 approved guarantors, approved multifamily guarantors,
or approved aggregators, the Corporation shall, by regulation,
after notice and comment, establish a formula for determining
the fee that meets the following criteria:
(A) Average for all fees.--The average of fees
charged on the total outstanding principal balance of
all eligible mortgage loans collateralizing covered
securities insured under this Act shall be equal to 10
basis points.
(B) Permissible range.--The highest basis point fee
charged to an approved guarantor, approved multifamily
guarantor, or approved aggregator engaged in a covered
guarantee transaction or an approved aggregator engaged
in a covered market-based risk-sharing transaction
shall not exceed 2 times the lowest basis point fee
charged.
(C) Incentives to serve underserved market
segments.--
(i) In general.--The formula determined
under this subsection shall provide that the
amount by which any particular fee charged to
an approved guarantor, approved multifamily
guarantor, or approved aggregator engaged in a
covered guarantee transaction or an approved
aggregator engaged in a covered market-based
risk-sharing transaction may be more or less
than the average fee required under
subparagraph (A) based upon consideration of
the following factors:
(I) Performance relative to
peers.--The performance of each
approved guarantor, approved
multifamily guarantor, or approved
aggregator engaged in a covered
guarantee transaction and each approved
aggregator engaged in a covered market-
based risk-sharing transaction in
serving underserved market segments, as
identified and defined under section
210, relative to the performance of all
other approved guarantors, approved
multifamily guarantors, or approved
aggregators engaged in covered
guarantee transactions or approved
aggregators engaged in covered market-
based risk-sharing transactions.
(II) Performance relative to
primary market loan origination data.--
The performance of each approved
guarantor, approved multifamily
guarantor, or approved aggregator
engaged in a covered guarantee
transaction and each approved
aggregator engaged in a covered market-
based risk-sharing transaction in
serving underserved market segments, as
identified and defined under section
210, relative to the level of primary
market mortgage originations in each of
the underserved market segments so
identified and defined that were
facilitated by the approved guarantor,
approved multifamily guarantor, or
approved aggregator's engagement in a
covered guarantee transaction or the
approved aggregator's engagement in a
covered market-based risk-sharing
transaction.
(III) Relative extent to which
individual market segments are
underserved.--The relative extent to
which each of the underserved market
segments, as identified and defined
under section 210, that have primary
market mortgage originations
facilitated by the approved guarantor,
approved multifamily guarantor, or
approved aggregator's engagement in a
covered guarantee transaction or the
approved aggregator's engagement in a
covered market-based risk-sharing
transaction is underserved.
(ii) Weighing factors.--The formula
determined under this subsection shall assign
such weights to each of the factors set forth
under clause (i) as the Corporation determines
necessary and appropriate.
(iii) Data for measuring factors.--To
measure the performance in serving underserved
market segments, as identified and defined
under section 210, by approved guarantors,
approved multifamily guarantors, or approved
aggregators engaged in a covered guarantee
transaction and approved aggregators engaged in
a covered market-based risk-sharing transaction
and the extent to which a market segment is
underserved, the formula determined under this
subsection shall provide for the use of--
(I) the identifications and
definitions of underserved market
segments established by the Corporation
under section 210;
(II) data and other information in
the annual report filed with the
Corporation by each approved guarantor,
approved multifamily guarantor, or
approved aggregator engaged in a
covered guarantee transaction and each
approved aggregator engaged in a
covered market-based risk-sharing
transaction, as required under section
210;
(III) loan level data, to the
extent possible in the manner required
by the Home Mortgage Disclosure Act (12
U.S.C. 2801 et seq.) on activities
related to covered securities; and
(IV) other publicly available data.
(D) Third-party entity to measure factors.--
(i) Selection.--The Corporation, through a
competitive process, shall select an entity
independent of the Corporation to gather, use,
and provide to the Corporation the data
required under subparagraph (C)(iii).
(ii) Ranking.--The entity selected under
clause (i) shall--
(I) analyze the data required under
subparagraph (C)(iii); and
(II) rank the approved guarantors,
approved multifamily guarantors, or
approved aggregators engaged in covered
guarantee transactions and the approved
aggregators engaged in covered market-
based risk-sharing transactions,
applying the formula established by the
Corporation.
(iii) Timing of ranking.--The entity
selected under clause (i) shall, on an annual
basis, provide the rankings required under
clause (ii)(II). The annual rankings required
under this clause shall begin at a time to be
determined mutually by the entity selected
under clause (i) and the Corporation, so that
the Corporation will be positioned to
determine, charge, and collect the first
incentive-based fees beginning on the date that
is 12 months after the date of approval of at
least 2 approved guarantors, approved
multifamily guarantors, or approved
aggregators.
(E) Timing of charging and collecting incentive-
based fees.--
(i) First incentive-based fees.--Subject to
paragraph (3), the Corporation shall charge and
collect the first incentive-based fees required
under this subsection beginning on the date
that is 12 months after the date of the
approval of at least 2 approved guarantors,
approved multifamily guarantors, or approved
aggregators.
(ii) Subsequent annual incentive-based
fees.--Subject to paragraph (3), the
Corporation shall charge and collect incentive-
based fees annually on the first business day
of each 12-month period that begins after the
expiration of the initial 12-month period set
forth in clause (i).
(iii) Collection.--
(I) Procedures.--The Corporation
shall, by regulation, establish
procedures for collecting the
incentive-based fee required under this
paragraph on a periodic basis
determined by the Corporation.
(II) Compliance with procedures.--
The Corporation shall collect all
incentive-based fees required under
this paragraph consistent with the
procedures established pursuant to
subclause (I).
(iv) Adjustments to incentive-based fees
paid.--
(I) In general.--The Corporation
shall make appropriate adjustments to
the incentive-based fee charged to an
approved guarantor, approved
multifamily guarantor, or approved
aggregator engaged in a covered
guarantee transaction or an approved
aggregator engaged in a covered market-
based risk-sharing transaction for any
year based on the--
(aa) application of the
formula established under this
paragraph to such approved
guarantor, approved multifamily
guarantor, or approved
aggregator; and
(bb) measured performance
of such approved guarantor,
approved multifamily guarantor,
or approved aggregator in that
year.
(II) Form of adjustments.--Any
adjustments made pursuant to subclause
(I) may take the form of--
(aa) a credit against the
fee paid by an approved
guarantor, approved multifamily
guarantor, or approved
aggregator for the year; or
(bb) an additional amount
owing on the fee for the year
by the approved guarantor,
approved multifamily guarantor,
or approved aggregator.
(v) Frequency of incentive-based fee
collection.--In determining the appropriate
periodic basis for collecting the incentive-
based fees required under clause (iii), the
Corporation shall take into consideration the
need to make appropriate adjustments to the
fees under clause (iv) through credits or
additional billings.
(vi) Rule of construction.--Nothing in this
subparagraph shall be construed to waive,
override, or in any manner supersede the
requirement set forth under subparagraph (A).
(F) Additional incentives to serve underserved
market segments.--
(i) Fee credits from the market access
fund.--Notwithstanding any provision of section
504 or any other provision of law, the
Corporation may use up to 50 percent of the
amounts in the Market Access Fund, determined
as of the date that an incentive-based fee
under subparagraph (E) is to be charged in any
year, to provide 1 or more approved guarantors,
approved multifamily guarantors, or approved
aggregators engaged in a covered guarantee
transaction or approved aggregators engaged in
a covered market-based risk-sharing transaction
with additional incentives to serve underserved
market segments, as identified and defined
under section 210, through the award of a
credit that may be applied to reduce the annual
fee charged to the approved guarantor, approved
multifamily guarantor, or approved aggregator
if that person exceeds performance measures
related to the service of such underserved
market segments established by the Corporation.
(ii) Rule required.--The Corporation shall
establish, by regulation, the terms,
conditions, and performance measures for the
awarding of credits under clause (i).
(3) Opt-out from incentive-based fees.--
(A) Election and written agreement.--An approved
guarantor, approved multifamily guarantor, or approved
aggregator engaged in a covered guarantee transaction
or an approved aggregator engaged in a covered market-
based risk-sharing transaction may elect to be excepted
from the incentive-based fee that is charged under
paragraph (2) by notifying the Corporation in writing
that the approved guarantor, approved multifamily
guarantor, or approved aggregator agrees to pay the fee
amount described in subparagraph (C).
(B) Timing for election.--For any 12-month period
for which an incentive-based fee will be charged under
paragraph (2), an approved guarantor, approved
multifamily guarantor, or approved aggregator engaged
in a covered guarantee transaction or an approved
aggregator engaged in a covered market-based risk-
sharing transaction may make an election under
subparagraph (A) not later than 3 months prior to the
beginning of such 12-month period.
(C) Fee amount for opt-out.--If an approved
guarantor, approved multifamily guarantor, or approved
aggregator engaged in a covered guarantee transaction
or an approved aggregator engaged in a covered market-
based risk-sharing transaction makes an election under
subparagraph (A), the Corporation shall charge to, and
collect from, the approved guarantor, approved
multifamily guarantor, or approved aggregator a fee in
an amount equal to the highest fee charged by
Corporation for the 12-month period under the ranking
made under paragraph (2)(D).
(D) Opt-out not to affect reporting requirements.--
An election made under subparagraph (A) shall not
release, diminish, or otherwise affect any requirement
set forth by this Act that requires an approved
guarantor, approved multifamily guarantor, or approved
aggregator engaged in a covered guarantee transaction
or an approved aggregator engaged in a covered market-
based risk-sharing transaction to furnish to the
Corporation such information as the Corporation is
authorized by this Act to obtain, including the annual
report required to be filed with the Corporation under
section 210.
(c) Continuing Obligation.--The fee required to be charged under
subsection (a) shall be collected for the life of the covered security.
(d) Suspension of Contributions.--The Corporation may temporarily
suspend allocations under subsection (a)(2) upon a finding by the
Corporation that such allocations are contributing, or would
contribute, to the financial instability of the Mortgage Insurance Fund
established under section 303.
(e) Rule of Construction.--The cost of the fee required to be
charged under subsection (a) shall not be borne by eligible borrowers.
SEC. 502. HOUSING TRUST FUND.
Section 1338 of the Safety and Soundness Act (12 U.S.C. 4568) is
amended--
(1) in subsection (a)(1)--
(A) in the first sentence, by inserting ``or
pursuant to section 501 of the Housing Finance Reform
and Taxpayer Protection Act of 2014'' after ``section
1337''; and
(B) in the second sentence, by inserting
``federally-recognized tribes and'' after ``grants
to'';
(2) by striking subsection (b) and inserting the following:
``(b) [Reserved.]'';
(3) in subsection (c)--
(A) in paragraph (1), by striking ``Except as
provided in subsection (b), the'' and inserting
``The'';
(B) in paragraph (2)--
(i) by striking ``(as such term is defined
in section 4 of the Native American Housing
Assistance and Self-Determination Act of 1997
(25 U.S.C. 4103))''; and
(ii) by adding at the end the following:
``An Indian tribe receiving grant amounts under
this subsection may designate a federally
recognized tribe or a tribally designated
housing entity to receive such grant amounts.
Nothing in this subsection shall limit or be
construed to limit the ability of an Indian
tribe or a tribally designated housing entity
from being a permissible designated recipient
of grant amounts provided by a State under this
section.'';
(C) in paragraph (3)--
(i) in the heading--
(I) by inserting ``Indian tribes
and'' before ``States''; and
(II) by striking ``by needs-based
formula'';
(ii) in subparagraph (A), by striking ``The
Secretary shall'' and inserting the following:
``(i) Minimum tribal distributions.--
``(I) In general.--The Secretary,
acting through the Office of Native
American Programs, shall distribute via
competitive grants the amounts
determined under subclause (II) and
made available under this subsection to
federally recognized tribes and
tribally designated housing entities.
``(II) Amounts.--The total amount
required to be distributed under this
subclause for a fiscal year shall be
the greater of $20,000,000, or 2
percent of the total amount of amounts
allocated for the Housing Trust Fund
under this section.
``(III) Use of amounts.--
Competitive grant amounts received by a
federally recognized tribe or a
tribally designated housing entity
under this clause may be used, or
committed to use, only for those
activities that are identified as
eligible affordable housing activities
under section 202 of the Native
American Housing Assistance and Self-
Determination Act of 1996 (25 U.S.C.
4132).
``(IV) Evaluation of
applications.--
``(aa) In general.--In
evaluating any application for
the receipt of competitive
grant amounts authorized under
this clause, the Secretary,
acting through the Office of
Native American Programs, shall
consider with respect to the
federally recognized tribe
applicant or tribally
designated housing entity
applicant and to Indian
reservations and other Indian
areas associated with the
federally recognized tribe
applicant or served by the
tribally designated housing
entity applicant evaluation
criteria, including the
following:
``(AA) Level of
poverty on the Indian
reservation or in the
Indian area.
``(BB) Level of
unemployment on the
Indian reservation or
in the Indian area.
``(CC) Condition of
housing stock on the
Indian reservation or
in the Indian area.
``(DD) Level of
overcrowded housing on
the Indian reservation
or in the Indian area,
as measured by the
number of households in
which the number of
persons per room is
greater than 1.
``(EE) Presence and
prevalence of black
mold on the Indian
reservation or in the
Indian area.
``(FF) Demonstrated
experience, capacity,
and ability of the
applicant to manage the
development and
construction of
affordable housing, and
manage affordable
housing programs,
including rental
housing programs,
homeownership programs,
and programs to assist
purchasers with down
payments, closing
costs, or interest rate
buy-downs.
``(GG) Demonstrated
ability of the
applicant to meet the
requirements under the
Native American Housing
Assistance and Self-
Determination Act of
1996 (25 U.S.C. 4101 et
seq.), including the
timely and efficient
expenditure of funds.
``(HH) Such other
criteria as may be
specified by the
Secretary in order to
evaluate the overall
quality of the proposed
project, the
feasibility of the
proposed project, and
whether the proposed
project will address
the housing needs on
the Indian reservation
or in the Indian area.
``(bb) Review of data.--In
evaluating any application for
the receipt of competitive
grant amounts authorized under
this clause, the Secretary,
acting through the Office of
Native American Programs, shall
permit a federally recognized
tribe applicant or a tribally
designated housing entity
applicant to supplement or
replace, in whole or in part,
any data compiled and produced
by the Bureau of the Census and
upon which the Secretary,
acting through the Office of
Native American Program,
relies, provided such tribally-
collected data meets the
Department of Housing and Urban
Development's standards for
accuracy.
``(V) Treatment of funds.--
Notwithstanding any other provision of
law, competitive grant amounts received
under this clause shall not be
considered Federal funds for purposes
of matching other Federal sources of
funds.
``(VI) Rule of construction.--The
requirements under clause (ii),
subparagraphs (B) and (C) of this
paragraph, and paragraphs (4) through
(8) and paragraph (10)(A) of this
subsection shall not apply to any
amounts distributed under this clause
to a federally recognized tribe or a
tribally designated housing entity.
``(ii) State distributions.--From any
amounts remaining in the Housing Trust Fund
after the distribution of the amounts required
under clause (i), the Secretary shall'';
(iii) in subparagraph (B), by striking
``subparagraph (A)'' and inserting
``subparagraph (A)(ii)''; and
(iv) in subparagraph (C), by striking
``subparagraph (A)'' and inserting
``subparagraph (A)(ii)'';
(D) in paragraph (4)--
(i) in subparagraph (B), by striking
``other than fiscal year 2009''; and
(ii) by striking subparagraph (C), and
inserting the following:
``(C) Minimum state allocations.--
``(i) In general.--Except as provided in
clause (ii), the minimum allocation, following
the determination of the formula amount in
paragraph (3), to any of the 50 States of the
United States or the District of Columbia shall
be $10,000,000 and the increase in any such
allocation shall be deducted pro rata from the
allocations made above such minimum to all
other of the States (as such term is defined in
section 1303).
``(ii) Exception.--If the allocation to the
Housing Trust Fund under section 501(a)(2)(A)
of the Housing Finance Reform and Taxpayer
Protection Act of 2014 for a fiscal year is
less than $1,000,000,000, the minimum
allocation to any of the 50 States of the
United States or the District of Columbia shall
be the greater of $5,000,000 or 1 percent of
the total amount of amounts allocated for the
Housing Trust Fund under this section and the
increase in any such allocation shall be
deducted pro rata from the allocations made
above such minimum to all other of the States
(as such term is defined in section 1303).'';
(E) in paragraph (5)(A)--
(i) in clause (iii), by striking ``and'' at
the end;
(ii) by redesignating clause (iv) as clause
(v); and
(iii) by inserting after clause (iii) the
following:
``(iv) set forth a plan for achieving
geographic diversity, including the
distribution of grant amounts to rural areas in
proportion to housing needs in those areas;
and''.
(F) in paragraph (7)(A), by striking ``housing
under the programs identified in section 1335(a)(2)(B)
of this title'' and inserting ``housing subsidized
under Federal law or comparable State or local laws'';
(G) in paragraph (7)(B)(iv), by striking ``section
132'' and inserting ``section 1132'';
(H) in paragraph (9), by inserting ``(including a
public housing agency)'' after ``agency''; and
(I) by adding at the end the following:
``(11) Rule of construction.--Nothing in this subsection
shall be construed to limit the ability of a federally
recognized tribe or a tribally designated housing entity from
receiving grant amounts provided by a State under this
section.'';
(4) in subsection (f), by adding at the end the following:
``(7) Tribal terms.--
``(A) In general.--The terms `federally recognized
tribe', `Indian area', `Indian tribe', and `tribally
designated housing entity' have the same meaning as in
section 4 of the Native American Housing Assistance and
Self-Determination Act of 1996 (25 U.S.C. 4103).
``(B) Indian reservation.--The term `Indian
reservation' means land subject to the jurisdiction of
an Indian tribe.
``(8) Rural area.--The term `rural area' means any
community eligible for assistance under section 520 of the
Housing Act of 1949 (42 U.S.C. 1490).''; and
(5) in subsection (g)(2)(D)(i), by inserting ``, including
the distribution of grant amounts to rural areas in proportion
to housing needs in those areas'' after ``diversity''.
SEC. 503. CAPITAL MAGNET FUND.
Section 1339 of the Safety and Soundness Act (12 U.S.C. 4569) is
amended--
(1) in subsection (b)(1), by inserting ``or section 501 of
the Housing Finance Reform and Taxpayer Protection Act of
2014'' after ``section 1337'';
(2) in subsection (c)--
(A) in paragraph (1), by striking ``; and'' and
inserting a semicolon;
(B) in paragraph (2)--
(i) by inserting ``, activities designed to
foster revitalization in areas experiencing
severe economic distress and property
disinvestment, including, but not limited to,
demolition, property rehabilitation, and
infrastructure configuration,'' after
``economic development activities''; and
(ii) by inserting ``and tribal'' after
``rural''; and
(3) in subsection (h)(2)(A), by inserting ``or tribal''
after ``rural''.
SEC. 504. MARKET ACCESS FUND.
(a) Establishment.--The Corporation shall establish a fund, to be
known as the ``Market Access Fund'', which shall be maintained and
administered by the Office of Consumer and Market Access.
(b) Deposits.--The Market Access Fund shall be credited with--
(1) the share of the fee charged and collected by the
Corporation under section 501; and
(2) such other amounts as may be appropriated or
transferred to the Market Access Fund.
(c) Purpose.--Amounts in the Market Access Fund shall be eligible
for use by grantees to address the homeownership and rental housing
needs of underserved or hard-to-serve populations by--
(1) providing grants and loans for research, development,
and pilot testing of innovations in consumer education, product
design, underwriting, and servicing;
(2) offering additional credit support for certain eligible
mortgage loans or pools of eligible mortgage loans, such as by
covering a portion of any capital required to obtain insurance
from the Corporation under this Act, provided that amounts for
such additional credit support do not replace borrower funds
required of an eligible mortgage loan;
(3) providing grants and loans, including through the use
of pilot programs of sufficient scale, to support the research
and development of sustainable homeownership and affordable
rental programs, which programs shall include manufactured
homes purchased through real estate and personal property loans
and manufactured homes used as rental housing, provided that
such grant or loan amounts are used only for the benefit of
families whose income does not exceed 120 percent of the median
income for the area as determined by the Corporation, with
adjustments for family size;
(4) providing limited credit enhancement, and other forms
of credit support, for product and services that--
(A) will increase the rate of sustainable
homeownership and affordable rental housing, including
manufactured homes purchased through real estate and
personal property loans and manufactured homes used as
rental housing, by individuals or families whose income
does not exceed 120 percent of the area median income
as determined by the Corporation, with adjustments for
family size; and
(B) might not otherwise be offered or supported by
a pilot program of sufficient scale to determine the
viability of such products and services in the private
market;
(5) providing housing counseling by a HUD-approved housing
counseling agency;
(6) providing incentives to achieve broader access to
mortgage credit; and
(7) providing grants and loans for activities designed to
foster revitalization in areas experiencing severe economic
distress and property disinvestment, including, but not limited
to, demolition, rehabilitation, infrastructure configuration,
and reuse of vacant land.
(d) Annual Report.--
(1) In general.--The Chairperson shall, on an annual basis,
report to Congress on the performance and outcome of grants,
loans, or credit support programs funded by the Market Access
Fund in accordance with subsection (c), including--
(A) an evaluation of how each grant, loan, or
credit support program--
(i) succeeded in meeting or failed to meet
the need of certain populations, especially
extremely low-, very low-, low-, and moderate-
income and underserved or hard-to-serve
populations; and
(ii) succeeded in maximizing or failed to
maximize the leverage of public investment made
for each such grant, loan, or credit support
program; and
(B) for each award of funds for a grant, loan, or
credit support program by the Market Access Fund--
(i) the recipient of the funds;
(ii) the purpose for which the recipient
received the funds;
(iii) the amount of funds provided to the
recipient; and
(iv) the amount of funds, excluding
administrative costs, that are used to directly
meet the purpose identified under clause (ii),
including meeting the housing needs of
extremely low-, very low-, low-, and moderate-
income and underserved or hard-to-serve
populations.
(2) Inclusion in annual report.--The Chairperson shall
include the report required under paragraph (1) in the annual
report required under section 206.
SEC. 505. ADDITIONAL TAXPAYER PROTECTIONS.
(a) Not to Be Used for Political Activities.--Consistent with the
existing requirements under sections 1338(c)(10)(D) and 1339(h)(5) of
the Safety and Soundness Act (12 U.S.C. 4568(c)(10)(D) and 4569(h)(5)),
the Secretary of Housing and Urban Development, the Secretary of the
Treasury, and the Office of Community and Market Access, respectively,
shall ensure that grant amounts allocated by covered grantees to
eligible recipients or allocated to individuals by such eligible
recipients are not used for--
(1) political activities;
(2) political advocacy;
(3) lobbying, whether directly or through other parties;
(4) influencing the selection, nomination, election, or
appointment of 1 or more candidates to any Federal, State or
local office;
(5) personal counseling services;
(6) travel expenses; and
(7) preparing or providing advice on tax returns.
(b) Penalties.--
(1) Civil money penalty.--If an eligible recipient or any
other individual in receipt of grant amounts described by this
section violates any provision of subsection (a), the Secretary
of Housing and Urban Development, the Secretary of the
Treasury, or the Corporation, as the case may be, may impose a
civil penalty on such recipient or individual, as the case may
be, of not more than $1,000,000 for each violation.
(2) Criminal penalties.--Whoever, being subject to the
provisions of subsection (a), knowingly participates, directly
or indirectly, in any manner in conduct that results in a
violation of such provisions shall, notwithstanding section
3571 of title 18, United States Code, be fined not more than
$1,000,000 for each violation, imprisoned for not more than 5
years, or both.
(3) Rule of construction.--The penalties imposed under
paragraphs (1) or (2) shall be in addition to any other
available civil remedy or any other available criminal penalty
and may be imposed whether or not the Secretary of Housing and
Urban Development, the Secretary of the Treasury, or the
Corporation, as the case may be, imposes other administrative
sanctions.
(c) Definitions.--As used in this section--
(1) the term ``covered grantee'' means--
(A) for purposes of the Housing Trust Fund, a State
or State designated entity;
(B) for purposes of the Capital Magnet Fund, an
eligible grantee as described under section 1339(e) of
the Safety and Soundness Act (12 U.S.C. 4569(e)); and
(C) for purpose of the Market Access Fund, an
eligible grantee as described under section 504(c);
(2) the term ``eligible recipient'' means--
(A) for purposes of the Housing Trust Fund, a
recipient as described under section 1338(c)(9) of the
Safety and Soundness Act (12 U.S.C. 4568(c)(9));
(B) for purposes of the Capital Magnet Fund, a
recipient of assistance from the Capital Magnet Fund;
and
(C) for purposes of the Market Access Fund, a
recipient of assistance from the Market Access Fund;
(3) the term ``Capital Magnet Fund'' means the Capital
Magnet Fund established under section 1339 of the Safety and
Soundness Act (12 U.S.C. 4569); and
(4) the term ``Housing Trust Fund'' means the Housing Trust
Fund established under section 1338 of the Safety and Soundness
Act (12 U.S.C. 4568).
(d) Rule of Construction.--Nothing in subsection (a) shall be
construed to prevent funds from being used for--
(1) HUD-approved housing counseling services;
(2) financial literacy education; or
(3) application fees, permits, or other construction-
related expenses, if funds are authorized for such
construction.
SEC. 506. PROMOTING AFFORDABLE HOUSING INVESTMENT.
(a) Housing and Community Development Act of 1992.--Paragraph (6)
of section 542(c) of the Housing and Community Development Act of 1992
(12 U.S.C. 1715z-22(c)) is amended to read as follows:
``(6) Ginnie mae securitization.--The Government National
Mortgage Association may, at the discretion of the Secretary,
securitize any multifamily loan insured under this subsection,
provided that--
``(A) the Federal Housing Administration provides
mortgage insurance based on the unpaid principal
balance of the loan, as shall be described by
regulation;
``(B) the Federal Housing Administration shall not
require an assignment fee for mortgage insurance claims
related to the securitized mortgages;
``(C) the risk-sharing agreement must provide for
reimbursement to the Secretary by the risk share
partner or partners for either all or a portion of the
losses incurred on the loans insured, regardless of
whether the servicing rights or other related mortgage
interest have been transferred to a different entity;
and
``(D) any entity that subsequently acquires the
servicing rights or other related mortgage interest of
the risk share partner or partners shall not assume any
obligation under the risk-sharing agreement.''.
(b) National Housing Act.--Clause (ii) of the first sentence of
section 306(g)(1) of the National Housing Act (12 U.S.C. 1721(g)(1)) is
amended--
(1) by striking the semicolon and inserting a comma; and
(2) by inserting before the period at the end the
following: ``, or which are insured under subsection (c) of
section 542 of the Housing and Community Development Act of
1992 (12 U.S.C.1715z-22), subject to the terms of subsection
(c)(6) of such section''.
(c) Effective Date; Sunset.--
(1) Effective date.--The amendments made by this section
shall take effect beginning on October 1, 2014.
(2) Sunset.--The amendments made by this section shall
expire on September 30, 2021. Effective October 1, 2021, the
provisions of paragraph (6) of section 542(c) of the Housing
and Community Development Act of 1992 (12 U.S.C. 1715z-22(c))
and clause (ii) of the first sentence of section 306(g)(1) of
the National Housing Act (12 U.S.C. 1721(g)(1)), as in effect
on the day before the date of the enactment of this Act, are
hereby revived.
TITLE VI--TRANSITION AND TERMINATION OF FANNIE MAE AND FREDDIE MAC
SEC. 601. MINIMUM HOUSING FINANCE SYSTEM CRITERIA TO BE MET PRIOR TO
SYSTEM CERTIFICATION DATE.
(a) System Certification Date.--The system certification date shall
be the date that the Board of Directors, in its sole discretion,
certifies by a majority vote that--
(1) the Corporation is able to undertake, in a manner found
satisfactory to the Board, the duties specified by this Act,
and any amendments made by this Act; and
(2) all the minimum criteria set forth under subsection (b)
with respect to the new housing finance system have been fully
satisfied.
(b) Minimum Housing Finance System Criteria.--The Board of
Directors shall consider the following minimum criteria in determining
whether to certify that the new housing finance system is ready:
(1) Taxpayer protection.--The Department of the Treasury
advised the Board of Directors that laws and contracts are in
place to provide for compensation to the Department for its
support of the enterprises and the housing finance system.
(2) Securitization platform and standardized securities.--
The Securitization Platform is developed and able to issue
standardized securities for the single-family covered
securities market.
(3) Small lender mutuals.--At least 1 small lender mutual
is fully operational and able to undertake the duties specified
in section 315.
(4) Approved entities.--A sufficient number of approved
entities have been approved pursuant the provisions of subtitle
B of title III--
(A) to assume a reasonable level of first loss
position through approved guarantors or through
approved credit risk-sharing mechanisms established
under section 302; and
(B) to generate a substantial volume of secondary
mortgage market activity with respect to eligible
single-family mortgage loans collateralizing single-
family covered securities insured in accordance with
this Act.
(5) Multifamily market.--
(A) Well-functioning multifamily market.--The
Corporation has approved multiple multifamily
guarantors pursuant to title VII who are providing
sufficient multifamily financing in the primary,
secondary, and tertiary geographical markets, including
in rural markets and through a diversity of experienced
multifamily lenders.
(B) Requirements of the act.--Approved multifamily
guarantors are meeting the requirements of this Act.
(C) Competitive market.--There is a competitive
multifamily market for approved multifamily guarantors
engaging in multifamily covered securities.
(D) Rule of construction.--Noncompliance with the
requirements of this Act by any individual approved
multifamily guarantor shall not constitute grounds to
prevent system certification.
(c) Rule of Construction.--The Corporation shall take all steps
necessary to meet each minimum housing finance system criteria set
forth under subsection (b) as expeditiously and efficiently as
practicable. The Corporation may commence providing guarantees on
single-family or multifamily covered securities prior to meeting all
the minimum housing finance system criteria set forth under subsection
(b).
(d) Notification to Congress.--
(1) In general.--The Chairperson shall promptly submit to
the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House of
Representatives a written notification that the Board of
Directors has certified that the criteria set forth under
subsection (b) have been met.
(2) Timing.--The Corporation shall provide the notification
required under paragraph (1) not later than 5 years after the
date of enactment of this Act.
(3) Deadline extensions.--
(A) First extension.--If the Board of Directors is
unable to make the certification required by this
section prior to the deadline required in paragraph
(2), the Board of Directors may, with an affirmative
vote of the majority of the Board, extend the deadline
an additional 2 years.
(B) Second extension.--If, after the expiration of
the first extension of 2 years, the Board of Directors
is unable to make the certification required by this
section, the Board of Directors may, with an
affirmative vote of at least \2/3\ of the Board, extend
the deadline an additional 2 years.
(C) Additional extensions.--If, after the
expiration of the second extension of 2 years, the
Board of Directors is unable to make the certification
required by this section, the Board of Directors may,
with a unanimous affirmative vote of the Board and upon
the written agreement of the Chairman of the Board of
Governors of the Federal Reserve System and the
Secretary of the Treasury, and in consultation with the
Secretary of Housing and Urban Development, extend the
deadline an additional year, and annually thereafter
utilizing the same process described in this
subparagraph until such time as the Board of Directors
makes the certification required by this section.
SEC. 602. TRANSITION OF THE HOUSING FINANCE SYSTEM.
(a) Transition Plan.--The Transition Committee established under
section 404 shall develop a transition plan not later than 12 months
after the date of enactment of this Act to facilitate an orderly
transition to the new housing finance system authorized by this Act.
(b) Contents of Plan.--The transition plan required under
subsection (a) shall include--
(1) estimated timeframes by which to achieve the minimum
housing finance system criteria set forth under section 601(b)
within 5 years after the date of enactment of this Act;
(2) detailed actions that the Corporation will take to
achieve such minimum criteria;
(3) estimated timeframes and detailed actions that the
Corporation, including the Federal Housing Finance Agency, will
take to provide an orderly wind down of the Federal National
Mortgage Association and the Federal Home Loan Mortgage
Corporation;
(4) a detailed inventory of all intellectual property
owned, held, or licensed by the enterprises, including patents,
trademarks, software, credit evaluation systems, and data and
information on mortgage performance and plans for utilizing any
such intellectual property, technology, infrastructure, or
processes of the enterprises in effecting the transition plan;
(5) a description of and updates on the ongoing operations
of the Corporation, including the operations of the Federal
Housing Finance Agency;
(6) detailed plans and timeframes for establishing, as soon
as practicable, a multifamily covered securities market;
(7) detailed plans and timeframes for establishing, as soon
as practicable, a standardized security issued through the
Securitization Platform for the single-family covered
securities market; and
(8) detailed plans for increasing the level of credit risk-
sharing in the secondary mortgage market.
(c) Considerations.--
(1) In general.--For purposes of facilitating an orderly
transition to the new housing finance system authorized by this
Act, the Corporation shall consider in determining how to best
fulfill the requirements of this title the estimated impact of
various transition options with respect to the following:
(A) Housing prices and affordability.
(B) The effectiveness of consumer protections in
the housing market.
(C) Volume and characteristics of mortgage loan
originations.
(D) The condition of the rental housing market.
(E) Small lender participation in the secondary
mortgage market.
(F) Access to credit in rural and underserved
communities.
(G) Competition among market participants.
(H) The condition of the multifamily housing
market.
(I) Innovation among secondary mortgage market
participants.
(J) Taxpayer repayment.
(K) Private capital in the secondary mortgage
market.
(2) Inclusion in annual report.--A description and analysis
of each consideration required under paragraph (1) shall be
included in the report required to be submitted to Congress
under subsection (d).
(d) Report to Congress.--
(1) In general.--Not later than 12 months after the date of
enactment of this Act and in accordance with section 404(c)(2),
the Transition Committee shall submit the transition plan
required under subsection (a) to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives.
(2) Updates.--Not later than 1 year after the date on which
the transition plan is submitted under paragraph (1) and
annually thereafter until the system certification date, the
Chairperson shall--
(A) update the transition plan, subject to the
requirements of subsection (b); and
(B) submit such updated plan to the Committee on
Banking, Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the House of
Representatives.
SEC. 603. RESOLUTION AUTHORITY; TECHNICAL AMENDMENTS.
(a) Effective Date.--The amendments made by this section shall take
effect on the agency transfer date.
(b) Federal Housing Enterprises Financial Safety and Soundness Act
of 1992.--Section 1367 of the Safety and Soundness Act (12 U.S.C. 4617)
is amended--
(1) by striking ``stockholder'' and ``stockholders'' and
inserting ``shareholder, member,'' and ``shareholders,
members,'', respectively, each place those terms appear;
(2) by striking ``wind up'' and ``winding up'' and
inserting ``wind down'' and ``winding down'', respectively,
each place those terms appear;
(3) in subsection (a)--
(A) in paragraph (3)(G), by striking ``, and there
is no reasonable prospect for the regulated entity to
become adequately capitalized (as defined in section
1364(a)(1))'';
(B) by striking paragraph (3)(J) and inserting the
following:
``(J) Insolvency.--The regulated entity is
insolvent or near-insolvent.'';
(C) by striking paragraph (3)(K);
(D) by redesignating paragraph (3)(L) as paragraph
(3)(K); and
(E) in paragraph (4)(B)--
(i) in the heading, by striking
``critically undercapitalized regulated
entity'' and inserting ``insolvent or near-
insolvent regulated entities'';
(ii) in the matter preceding clause (i), by
striking ``critically undercapitalized'' and
inserting ``insolvent or near-insolvent''; and
(iii) in clause (i), by striking
``critically undercapitalized'' and inserting
``insolvent or near-insolvent'';
(4) in subsection (b)--
(A) in paragraph (2)(B)--
(i) in clause (iii), by adding ``and''
after ``conservator or receiver;'';
(ii) by striking clause (iv); and
(iii) by redesignating clause (v) as clause
(iv);
(B) in paragraph (2)(H), by striking ``of proceeds
realized from the performance of contracts or sale of
the assets of a regulated entity'' and inserting ``that
funds are available'';
(C) in paragraph (2)(I)(i)(I), by striking
``section 1348'' and inserting ``part II of this
subtitle'';
(D) in paragraph (2)(I)(iii), by striking ``section
1317 or 1379B'' and inserting ``subtitle B of this
Act'';
(E) by striking paragraph (3)(A) and inserting the
following:
``(A) In general.--The Agency--
``(i) may, as receiver, determine claims in
accordance with the requirements of this
subsection and any regulations prescribed under
paragraph (4); and
``(ii) may define the term `creditor' and
may distinguish between creditors, in order to
facilitate the orderly administration of the
regulated entity in conservatorship or
receivership, in accordance with the
requirements of this section.'';
(F) in paragraph (3)(B), by striking ``closed'';
(G) in paragraph (5)(D)(iii)(II), by inserting
``legally enforceable and perfected'' before ``security
interest'';
(H) by striking paragraph (7);
(I) by redesignating paragraphs (8) through (19) as
paragraphs (7) through (18), respectively; and
(J) in paragraph (10)(E), as so redesignated--
(i) in clause (ii), by striking ``; and''
and inserting a semicolon;
(ii) in clause (iii), by striking the
period and inserting a semicolon; and
(iii) by adding at the end the following:
``(iv) prohibits discrimination on the
basis of race, sex, or ethnic group in the
solicitation or consideration of offers; and
``(v) mitigates the potential for serious
adverse effects to the financial system.''; and
(5) by striking subsection (c) and inserting the following:
``(c) Priority of Expenses and Unsecured Claims.--
``(1) In general.--Unsecured claims against a regulated
entity, or the receiver therefor, that are proven to the
satisfaction of the receiver shall have priority in the
following order:
``(A) Claims of the receiver for administrative
expenses.
``(B) Any amounts owed to the United States, unless
the United States agrees or consents otherwise.
``(C) Wages, salaries, or commissions, including
vacation, severance, and sick leave pay earned by an
individual (other than an individual described in
subparagraph (F)), but only to the extent of $12,475
for each individual (as indexed for inflation, by
regulation of the Agency) earned not later than 180
days before the date of appointment of the Agency as
receiver.
``(D) Contributions owed to employee benefit plans
arising from services rendered not later than 180 days
before the date of appointment of the Agency as
receiver, to the extent of the number of employees
covered by each such plan, multiplied by $12,475 (as
indexed for inflation, by regulation of the Agency),
less the aggregate amount paid to such employees under
subparagraph (C), plus the aggregate amount paid by the
receivership on behalf of such employees to any other
employee benefit plan.
``(E) Any claim arising solely from a covered
guarantee transaction involving the regulated entity.
``(F) Any other general or senior liability of the
regulated entity (which is not a liability described
under subparagraph (G), (H), or (I)).
``(G) Any obligation subordinated to general
creditors (which is not an obligation described under
subparagraph (H) or (I)).
``(H) Any wages, salaries, or commissions,
including any vacation, severance, and sick leave pay
earned, owed to senior executives and directors of the
regulated entity.
``(I) Any obligation to shareholders or members
arising as a result of their status as shareholders or
members.
``(2) Claims of the united states.--Unsecured claims of the
United States shall, at a minimum, have a higher priority than
liabilities of the regulated entity that count as regulatory
capital.
``(3) Creditors similarly situated.--All creditors that are
similarly situated under paragraph (1) shall be treated in a
similar manner, except that the receiver may take any action
(including making payments) that does not comply with this
subsection, if--
``(A) the Agency determines that such action is
necessary to--
``(i) maximize the value of the assets of
the regulated entity;
``(ii) maximize the present value return
from the sale or other disposition of the
assets of the regulated entity;
``(iii) initiate and continue operations
essential to implementation of the receivership
or any limited-life regulated entity;
``(iv) minimize the amount of any loss
realized upon the sale or other disposition of
the assets of the regulated entity; or
``(v) preserve the financial stability of
the United States; and
``(B) all creditors that are similarly situated
under paragraph (1) receive not less than the amount
provided in subsection (f)(2).
``(4) Definition.--As used in this subsection, the term
`administrative expenses of the receiver' includes--
``(A) the actual, necessary costs and expenses
incurred by the receiver in preserving the assets of a
failed regulated entity or liquidating or otherwise
resolving the affairs of a failed regulated entity; and
``(B) any obligations that the receiver determines
are necessary and appropriate to facilitate the smooth
and orderly liquidation or other resolution of the
regulated entity.'';
(6) by redesignating subsections (d) through (j) as
subsections (e) and (k), respectively;
(7) by inserting after section (c) the following:
``(d) Subrogation.--
``(1) In general.--Notwithstanding any other provision of
Federal law, the law of any State, or the constitution of any
State, the Agency, upon the payment to any person as provided
in subsection (c) in connection with any covered guarantee
transaction (as that term is defined in section 2 of the
Housing Finance Reform and Taxpayer Protection Act of 2014),
shall be subrogated to all rights of the person against such
regulated entity to the extent of such payment or assumption.
``(2) Dividends on subrogated amounts.--The subrogation of
the Agency under paragraph (1) with respect to any regulated
entity shall include the right on the part of the Agency to
receive the same dividends, fees, or other amounts from the
proceeds of the assets of such regulated entity and recoveries
on account of stockholders' liability as would have been
payable to the person on a claim related to the covered
guarantee transaction.
``(3) Waiver of certain claims.--The Agency shall waive, in
favor only of any person against whom stockholders' individual
liability may be asserted, any claim on account of such
liability in excess of the liability, if any, to the regulated
entity or its creditors, for the amount unpaid upon such stock
in such regulated entity, but any such waiver shall be effected
in such manner and on such terms and conditions as will not
increase recoveries or dividends on account of claims to which
the Agency is not subrogated.'';
(8) in subsection (e), as so redesignated--
(A) in paragraph (8), by adding at the end the
following:
``(H) Recordkeeping.--The Agency may prescribe
regulations requiring that regulated entities maintain
such records with respect to qualified financial
contracts (including market valuations) that the Agency
determines to be necessary or appropriate in order to
assist the Agency as receiver for a regulated entity in
being able to exercise its rights and fulfill its
obligations under this paragraph or paragraph (9) or
(10).'';
(B) by striking paragraph (9) and inserting the
following:
``(9) Transfer of qualified financial contracts.--
``(A) In general.--In making any transfer of assets
or liabilities of a regulated entity in default which
includes any qualified financial contract, the
conservator or receiver for such regulated entity shall
either--
``(i) transfer to 1 person, other than a
person for which a conservator, receiver,
trustee in bankruptcy, or other legal custodian
has been appointed or which is otherwise the
subject of a bankruptcy or insolvency
proceeding--
``(I) all qualified financial
contracts between any person (or any
affiliate of such person) and the
regulated entity in default;
``(II) all claims of such person
(or any affiliate of such person)
against such regulated entity under any
such contract (other than any claim
which, under the terms of any such
contract, is subordinated to the claims
of general unsecured creditors of such
regulated entity);
``(III) all claims of such
regulated entity against such person
(or any affiliate of such person) under
any such contract; and
``(IV) all property securing, or
any other credit enhancement for any
contract described in subclause (I), or
any claim described in subclause (II)
or (III) under any such contract; or
``(ii) transfer none of the financial
contracts, claims, or property referred to
under clause (i) (with respect to such person
and any affiliate of such person).
``(B) Transfer to foreign bank, financial
institution, or branch or agency thereof.--In
transferring any qualified financial contracts and
related claims and property under subparagraph (A)(i),
the Agency as receiver for a regulated entity shall not
make such transfer to a foreign person unless, under
the law applicable to such foreign person, to the
qualified financial contracts, and to any netting
contract, any security agreement or arrangement or
other credit enhancement related to 1 or more qualified
financial contracts, the contractual rights of the
parties to such qualified financial contracts, netting
contracts, security agreements or arrangements, or
other credit enhancements, are enforceable
substantially to the same extent as permitted under
this section.''; and
(C) in paragraph (13)(C)(ii)--
(i) by redesignating subclause (III) as
subclause (IV);
(ii) by striking ``and'' at the end of
subclause (II); and
(iii) by inserting after subclause (II) the
following:
``(III) apply to the rights of
parties to netting contracts pursuant
to subtitle A of title IV of the
Federal Deposit Insurance Corporation
Improvement Act of 1991 (12 U.S.C. 4401
et seq.); or'';
(9) in subsection (g), as so redesignated--
(A) by striking ``section or at the request of the
Director'' and inserting ``title''; and
(B) by striking ``a conservator or a receiver'' and
inserting ``the conservator or receiver hereunder, and
any remedy against the Agency as conservator or
receiver shall be limited to money damages determined
in accordance with this title'';
(10) in subsection (j), as so redesignated--
(A) in paragraph (1)(A)(ii), by striking ``shall''
and inserting ``may'';
(B) in paragraph (2)--
(i) in the heading, by striking ``Charter
and establishment'' and inserting
``Establishment of limited-life regulated
entities''; and
(ii) by striking subparagraph (A) and
inserting the following:
``(A) Transfer of registered status.--If the Agency
is appointed as receiver for an enterprise, the
limited-life regulated entity established under this
subsection with respect to such enterprise shall, by
operation of law and immediately upon its organization,
succeed to the registered status of the enterprise and
thereafter operate in accordance with, and subject to,
this Act and any other provision of law to which an
enterprise is subject, except as otherwise provided in
this subsection.'';
(C) in paragraph (3)--
(i) in the heading, by inserting ``and
operating funds'' after ``Capital stock'';
(ii) by redesignating subparagraphs (A) and
(B) as subparagraphs (B) and (C), respectively;
(iii) by inserting prior to subparagraph
(B), as so redesignated, the following:
``(A) Capital not required.--Notwithstanding any
other provision of Federal or State law, a limited-life
regulated entity may, if permitted by the Agency,
operate without any capital or surplus as the Agency
may in its discretion determine to be appropriate.'';
(iv) in subparagraph (B), as so
redesignated, by striking ``No agency
requirement'' and inserting ``No contribution
by the agency required''; and
(v) by adding at the end the following:
``(D) Operating funds.--Upon the organization of a
limited-life regulated entity, and thereafter, as the
Agency may, in its discretion, determine to be
necessary or advisable, the Agency may make available
to the limited-life regulated entity, upon such terms
and conditions and in such form and amounts as the
Agency may in its discretion determine, funds for the
operation of the limited-life regulated entity in lieu
of capital.'';
(D) in paragraph (6)--
(i) in the heading, by striking ``Winding
up'' and inserting ``Winding down'';
(ii) by striking subparagraph (A) and
inserting the following:
``(A) In general.--Subject to subparagraph (B), the
Agency shall wind down the affairs of a limited-life
regulated entity established under this subsection--
``(i) with respect to a Federal Home Loan
Bank, not later than 2 years after the date of
its organization; and
``(ii) with respect to an enterprise,
within such period of time as the Agency
determines to be necessary and appropriate.'';
and
(iii) in subparagraph (B), by inserting
``established under this subsection with
respect to a Federal Home Loan Bank'' after
``limited-life regulated entity'';
(E) in paragraph (7)(A)(iv)--
(i) in the matter preceding subclause (I),
by inserting ``the Agency determines that such
actions are necessary to'' after ``that do not
comply with this clause, if''; and
(ii) by striking subclauses (I) and (II)
and inserting the following:
``(I) maximize the value of the
assets of the regulated entity;
``(II) maximize the present value
return from the sale or other
disposition of the assets of the
regulated entity;
``(III) initiate and continue
operations essential to the
implementation of the limited-life
regulated entity;
``(IV) minimize the amount of any
loss realized upon the sale or other
disposition of the assets of the
regulated entity;
``(V) preserve the financial
stability of the United States; and
``(VI) ensure that all creditors
that are similarly situated under
subsection (c)(1) receive not less than
the amount provided in subsection
(f)(2).''; and
(F) in paragraph (11)(C)--
(i) in clause (i), in the matter preceding
subclause (I), by striking ``(other than
mortgages that collateralize the mortgage-
backed securities issued or guaranteed by an
enterprise)''; and
(ii) by inserting at the end the following:
``(ii) Hearing.--The hearing required
pursuant to this subparagraph shall be before a
court of the United States, which shall have
jurisdiction to conduct such hearing and to
authorize the limited-life regulated entity to
obtain secured credit under clause (i).''; and
(11) by striking subsection (k)(relating to charter
revocation), as so designated by Public Law 110-289.
(c) Rule of Construction.--Nothing in this Act, or any amendments
made by this Act, except as may be explicitly provided for in this Act,
or any amendment made by this Act, shall be deemed to alter the powers,
authorities, rights, or duties that are vested in the Federal Housing
Finance Agency or the Director thereof with respect to supervision and
regulation of the enterprises, until such time as the Federal Housing
Finance Agency and the position of the Director are transferred in
accordance with title IV of this Act.
SEC. 604. WIND DOWN.
(a) Authority of FHFA Director.--
(1) In general.--Beginning on the date of enactment of this
Act and ending on the system certification date, the FHFA
Director, in consultation with the Corporation, shall take such
action, and may prescribe such regulations and procedures, as
may be necessary to wind down the operations of the enterprises
in an orderly manner that complies with the requirements of
this Act and any amendments made by this Act.
(2) Limitation.--Notwithstanding any authority granted to
the FHFA Director under paragraph (1)--
(A) the sale, exchange, license, or other
disposition of any asset for value subject to the wind
down required under this section shall be prohibited,
if the Corporation--
(i) in its discretion determines that such
sale, exchange, license, or disposition would
materially interfere with the ability of the
Corporation to carry out the requirements of
this Act; and
(ii) notifies, in writing, the FHFA
Director within 14 days of such determination;
and
(B) the Corporation may direct the conservator of
the enterprises to sell, exchange, license, or
otherwise dispose of any asset for value subject to the
wind down required under this section, if the Board of
Directors certifies by a majority vote that--
(i) not completing such sale, transfer,
exchange, license, or other disposition for
value would be inconsistent with the transition
plan approved pursuant to section 602; and
(ii) such sale, transfer, exchange,
license, or disposition for value would not
violate the duties of the conservator.
(b) Authority of Corporation.--Beginning on the system
certification date, the Corporation shall take such action, and may
prescribe such regulations and procedures, as may be necessary to wind
down the operations of the enterprises in an orderly manner that
complies with the requirements of this Act and any amendments made by
this Act.
(c) Resolution Plan.--
(1) In general.--Each enterprise shall develop a resolution
plan in order to facilitate an orderly transition to the new
housing finance system authorized by this Act.
(2) Timing.--Each resolution plan required to be developed
under paragraph (1) shall be submitted to the FHFA Director not
later than 90 days after the agency transfer date.
(3) Contents of plans.--Each resolution plan required to be
developed under paragraph (1) shall include a full description
and valuation of the assets, liabilities, and contractual
obligations of the enterprise, and any other information that
the FHFA Director may require.
(4) Retention of authority.--Notwithstanding any provision
of a resolution plan required to be developed under paragraph
(1), the Federal Housing Finance Agency and the Corporation
shall retain and exercise full discretion to the extent that
either the Agency or the Corporation utilizes or relies on such
a resolution plan, either in whole or in part, in fulfilling
any duty or responsibility required by this Act.
(5) Public summary.--After reviewing each resolution plan
required to be developed under paragraph (1), the Corporation
shall make available to the public a summary of each such
resolution plan.
(6) Valuation study.--After reviewing each resolution plan
required to be developed under paragraph (1), the Corporation
shall conduct a valuation study of each enterprise's business
segments, including any technology, business unit, legacy book,
and other assets and liabilities that may be sold for value in
a manner consistent with the purposes and requirements of this
Act.
(d) Prohibition on New Business.--
(1) Federal national mortgage association.--
(A) New business prohibited.--Effective on the
system certification date, the Federal National
Mortgage Association shall have no authority to conduct
new business under the Federal National Mortgage
Association Charter Act.
(B) New business defined.--For purposes of
subparagraph (A), the term ``new business'' means any
new--
(i) purchase of, servicing of, or dealing
in any insured or conventional mortgages by the
Federal National Mortgage Association under
section 302(b) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1717(b));
(ii) purchase of a mortgage by the Federal
National Mortgage Association in its secondary
mortgage market operations under section 304(a)
of the Federal National Mortgage Association
Charter Act (12 U.S.C. 1719(a));
(iii) issue of an obligation of the Federal
National Mortgage Association under section
304(b) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1719(b)),
including--
(I) bonds, notes, debentures, and
other similar instruments;
(II) capital lease obligations;
(III) obligations in respect of
letters of credit, bankers acceptances,
or other similar instruments;
(IV) guarantees of new securities
based on mortgages set aside; and
(V) swap, security-based swap,
derivative product, or other similar
instrument;
(iv) setting aside of any mortgages held by
the Federal National Mortgage Association and
any new issue and sale of securities based on
the mortgages so set aside under section 304(d)
of the Federal National Mortgage Association
Charter Act (12 U.S.C. 1719(d)); and
(v) issue of a subordinated obligation of
the Federal National Mortgage Association under
section 304(e) of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1719(e)).
(C) Exclusion from new business.--The term ``new
business'' shall not include any new--
(i) purchase by the Federal National
Mortgage Association of a non-performing
mortgage from a pool of mortgages previously
set aside by the enterprise;
(ii) issue of an obligation of the Federal
National Mortgage Association if, after giving
effect to the issuance, the aggregate amount of
such obligations does not exceed 120 percent of
the amount of mortgage assets permitted to be
owned by the enterprise under section 605;
(iii) setting aside of mortgages previously
set aside by the Federal National Mortgage
Association, or any new issue and sale of
securities based on the mortgages so previously
set aside, to refund or replace an outstanding
issue of securities based on mortgages
previously set aside, if the face amount of the
refunding or replacing mortgage-backed
securities does not exceed the face amount of
the mortgage-backed securities being refunded
or replaced;
(iv) transfer of guarantees of mortgage-
backed securities guaranteed by the Federal
National Mortgage Association if the mortgage
loans collateralizing such securities are
refinanced, regardless of the value of the
underlying collateral and the homeowner's
current employment status and income; or
(v) entry into any swap, security-based
swap, or other similar instrument, or purchase
of sale of any derivative product, or other
similar instrument, to facilitate the orderly
wind down of the Federal National Mortgage
Association and appropriate loss mitigation on
any outstanding guarantees of the Federal
National Mortgage Association under section
605.
(D) New business prohibition not to affect
outstanding enterprise debt or guarantees.--Nothing in
subparagraph (A) shall adversely affect the rights and
obligations of any holders of--
(i) outstanding debt obligations of the
Federal National Mortgage Association,
including any--
(I) bonds, notes, debentures, or
other similar instruments;
(II) capital lease obligations;
(III) obligations in respect of
letters of credit, bankers'
acceptances, or other similar
instruments; or
(IV) swap, security-based swap,
derivative product, or other similar
instrument; or
(ii) mortgage-backed securities guaranteed
by the Federal National Mortgage Association.
(2) Federal home loan mortgage corporation.--
(A) New business prohibited.--Effective on the
system certification date, the Federal Home Loan
Mortgage Corporation shall have no authority to conduct
new business under the Federal Home Loan Mortgage
Corporation Act.
(B) New business defined.--For purposes of
subparagraph (A), the term ``new business'' means any
new--
(i) purchase of, servicing of, or dealing
in any insured or conventional mortgages by the
Federal Home Loan Mortgage Corporation under
section 305(a) of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1454(a));
(ii) issue of an obligation of the Federal
Home Loan Mortgage Corporation under section
306(a) of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1455(a)),
including--
(I) bonds, notes, debentures, and
other similar instruments;
(II) capital lease obligations;
(III) obligations in respect of
letters of credit, bankers acceptances,
or other similar instruments;
(IV) guarantees of new securities
based on mortgages set aside; and
(V) swap, security-based swap,
derivative product, or other similar
instrument;
(iii) issue of mortgage-backed securities
under the Federal Home Loan Mortgage
Corporation Act; and
(iv) issue of a subordinated obligation of
the Federal Home Loan Mortgage Corporation
under the Federal Home Loan Mortgage
Corporation Act.
(C) Exclusion from new business.--The term ``new
business'' shall not include any new--
(i) purchase by the Federal Home Loan
Mortgage Corporation of a non-performing
mortgage from a pool of mortgages previously
set aside by the enterprise;
(ii) issue of an obligation of the Federal
Home Loan Mortgage Corporation if, after giving
effect to the issuance, the aggregate amount of
such obligations does not exceed 120 percent of
the amount of mortgage assets permitted to be
owned by the enterprise under section 605;
(iii) issue of mortgage-backed securities,
to refund or replace an outstanding issue of
mortgage-backed securities, if the face amount
of the refunding or replacing mortgage-backed
securities does not exceed the face amount of
the mortgage-backed securities being refunded
or replaced;
(iv) transfer of guarantees of mortgage-
backed securities guaranteed by the Federal
Home Loan Mortgage Corporation if the mortgage
loans collateralizing such securities are
refinanced, regardless of the value of the
underlying collateral and the homeowner's
current employment status and income; or
(v) entry into any swap, security-based
swap, or other similar instrument, or purchase
of sale of any derivative product, or other
similar instrument, to facilitate the orderly
wind down of the Federal Home Loan Mortgage
Corporation and appropriate loss mitigation on
any outstanding guarantees of the Federal Home
Loan Mortgage Corporation under section 605.
(D) New business prohibition not to affect
outstanding enterprise debt or guarantees.--Nothing in
subparagraph (A) shall adversely affect the rights and
obligations of any holders of--
(i) outstanding debt obligations of the
Federal Home Loan Mortgage Corporation,
including any--
(I) bonds, notes, debentures, or
other similar instruments;
(II) capital lease obligations;
(III) obligations in respect of
letters of credit, bankers'
acceptances, or other similar
instruments; or
(IV) swap, security-based swap,
derivative product, or other similar
instrument; or
(ii) mortgage-backed securities guaranteed
by the Federal Home Loan Mortgage Corporation.
(3) Rule of construction.--The prohibition on new business
by the Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation set forth in paragraphs (1) and
(2) shall not prohibit, nor be construed to prohibit, the
Corporation from managing such entity.
(4) Existing guarantee obligations.--
(A) Explicit guarantee.--The full faith and credit
of the United States is pledged to the payment of all
amounts which may be required to be paid under any
obligation described under paragraphs (1) and (2),
including any obligation issued on or after the system
certification date to refund or replace an obligation
that was outstanding on the day before the system
certification date.
(B) Loan eligibility.--The enterprises shall
include as eligible loans for the purposes of
refinancing all current loans that qualify as eligible
mortgage loans and meet those underwriting requirements
for eligibility for same servicer refinancing, except
that the enterprises may not disqualify or impose
varying rules based on loan-to-value, combined loan-to-
value, employment status, or income with regard to
refinancing mortgage loans that collateralize mortgage-
backed securities issued by an enterprise prior to the
system certification date.
(C) Continued dividend payments.--Notwithstanding
the provisions of this section or any other provision
of law, provision 2(a) (relating to Dividend Payment
Dates and Dividend Periods) and provision 2(c)
(relating to Dividend Rates and Dividend Amount) of the
Senior Preferred Stock Purchase Agreement, or any
provision of any certificate in connection with such
Agreement creating or designating the terms, powers,
preferences, privileges, limitations, or any other
conditions of the Variable Liquidation Preference
Senior Preferred Stock of an enterprise issued pursuant
to such Agreement--
(i) shall not be amended, restated, or
otherwise changed to reduce the rate or amount
of dividends in effect pursuant to such
Agreement as of the Third Amendment to such
Agreement dated August 17, 2012, except that
any amendment to such Agreement shall be
permitted if it facilitates the sale of assets
of the enterprises to facilitate compliance
with this title; and
(ii) shall remain in effect until the
guarantee obligations described under
paragraphs (1) and (2) are fully extinguished.
(D) Applicability.--Notwithstanding the provisions
of this section, all guarantee fee amounts derived from
the mortgage guarantee business of the enterprises in
existence as of the system certification date, after
satisfying the fee amounts required to be collected by
section 1327 of the Safety and Soundness Act (12 U.S.C.
4547), shall be subject to the terms of the Senior
Preferred Stock Purchase Agreement.
(e) Charters Revoked.--Effective upon the date the guarantee
obligations under subsection (d)(4)(A) are fully extinguished:
(1) The Federal National Mortgage Association Charter Act
is repealed, except as the provisions of such Act relate to the
establishment, purposes, powers, authorities, duties,
supervision, administration, and management of the Government
National Mortgage Association.
(2) The Federal Home Loan Mortgage Corporation Act is
repealed.
(f) Authority to Insure Outstanding Mortgage-backed Securities;
Mortgage-backed Securities of the Enterprises.--
(1) Authority to insure mortgage-backed securities;
authority to develop enterprise mortgage-backed securities.--
After the agency transfer date, and subject to such procedures,
standards, terms, and conditions as may be adopted by the
Corporation under paragraph (2), the Corporation may--
(A) upon application and in exchange for a fee
determined by the Corporation, provide insurance on
outstanding mortgage-backed securities issued by the
enterprises; and
(B) facilitate, including through the operations of
the enterprises or the utilization of the Platform,
the--
(i) exchange of mortgage-backed securities
issued by either enterprise for covered
securities;
(ii) exchange of mortgage-backed securities
issued by 1 enterprise for those of the other
enterprise;
(iii) issuance of mortgage-backed
securities by both enterprises through a single
issuer; and
(iv) issuance of real estate mortgage
investment conduit securities, consisting of
mortgage-backed securities issued by the
enterprises.
(2) Development of procedures, standards, terms, and
conditions.--The Corporation shall develop and adopt
procedures, standards, terms, and conditions to enable the
Corporation and each of the enterprises, as applicable, to
implement each of the activities described in paragraph (1).
(3) Required procedures, standards, terms, and
conditions.--In the development and adoption of the procedures,
standards, terms, and conditions required under paragraph (2),
the Corporation shall consider the effect of each activity with
respect to the following:
(A) Lender access to the secondary mortgage market.
(B) The liquidity and trading price of existing
enterprise mortgage-backed securities.
(C) The ability of market participants and the
enterprises to issue new mortgage-backed securities.
(D) The cost to the enterprises or the Corporation
to exchange, restructure, or insure mortgage-backed
securities.
(g) Report to Congress.--
(1) In general.--Prior to the agency transfer date, the
FHFA Director shall submit a study considering the feasibility
of activities described in subsection (f)(1) to--
(A) the Committee on Banking, Housing, and Urban
Affairs of the Senate;
(B) the Committee on Financial Services of the
House of Representatives; and
(C) the Corporation.
(2) Updates.--Following the agency transfer date, the
Corporation shall provide updates on the activities described
in subsection (f)(1) in the transition plan (and in each annual
update thereof) required under section 602.
(h) Division of Assets and Liabilities; Authority to Establish
Holding Companies, Trusts, and Subsidiaries.--
(1) In general.--The action and procedures required under
subsection (a)--
(A) shall include the establishment and execution
of plans to manage assets toward the liquidation of
liabilities and provide for an equitable division,
distribution, and liquidation of the assets and
liabilities of an enterprise, including any
infrastructure, property, including intellectual
property, historic data, platforms, or any other thing
or object of value, provided such plan complies with
the requirements of this Act and any amendments made by
this Act;
(B) may provide for the establishment of--
(i) a holding corporation organized under
the laws of any State of the United States or
the District of Columbia for the purpose of
winding down an enterprise or both enterprises;
(ii) 1 or more trusts to which to
transfer--
(I) outstanding debt obligations of
an enterprise or both enterprises; or
(II) outstanding mortgages held for
the purpose of collateralizing
mortgage-backed securities guaranteed
by an enterprise or both enterprises;
and
(iii) 1 or more subsidiaries or joint
ventures with private entities for the purposes
of facilitating an orderly wind down of one
enterprise or both enterprises and the
transition to the new housing finance system;
(C) may include the sale as a going concern of any
holding company, trust, subsidiary, or joint venture
with a private entity established by an enterprise
under this subsection; and
(D) may provide that any holding company, trust,
subsidiary, or joint venture sold as a going concern
may be utilized to facilitate the formation of--
(i) a small lender mutual under section
315;
(ii) an approved guarantor;
(iii) an approved multifamily guarantor;
(iv) an approved aggregator; or
(v) the Securitization Platform.
(2) Rule of construction.--Any holding company, trust,
subsidiary, or joint venture established by an enterprise
before or after the agency transfer date is eligible to be sold
by the Federal Housing Finance Agency as a going concern for
the purposes described in this section.
(i) Recoupment by Senior Preferred Shareholders.--
(1) Maximum return to senior preferred shareholders.--The
wind down of each enterprise required under this section shall
be managed by the Corporation to obtain resolutions that
maximize the return for the senior preferred shareholders, to
the extent that such resolutions--
(A) are consistent with the goals of facilitating--
(i) a deep, liquid, and resilient secondary
mortgage market for single-family and
multifamily mortgage-backed securities in order
to support access to mortgage credit in the
primary mortgage market; and
(ii) an orderly transition from housing
finance markets facilitated by the enterprises
to housing finance markets facilitated by the
Corporation with minimum disruption in the
availability of mortgage credit;
(B) are consistent with applicable Federal and
State law;
(C) comply with the requirements of this Act and
the amendments made by this Act; and
(D) protect the taxpayer from having to absorb
losses incurred in the secondary mortgage market.
(2) Sale of certain assets as a going concern.--
(A) Sale for value.--If the Federal Housing Finance
Agency makes the determinations in subparagraph (B),
the Federal Housing Finance Agency may conduct a sale,
exchange, license, or other disposition for value of
any line of business of an enterprise, or any function,
activity, asset, intellectual property, or service of
an enterprise, as a going concern.
(B) Required determinations.--A sale under
subparagraph (A) is permitted if the Federal Housing
Finance Agency determines that the sale, exchange,
license, or other disposition for value--
(i) is consistent with the goal of an
orderly transition from housing finance markets
facilitated by the enterprises to housing
finance markets facilitated by the Corporation
with minimum disruption in the availability of
mortgage credit;
(ii) does not impede or otherwise interfere
with the ability of the Federal Housing Finance
Agency or the Corporation to carry out the
functions and requirements of this Act;
(iii) does not transfer, convey, or
authorize any guarantee or Federal support,
assistance, or backing, implicit or explicit,
related to any such business line, function,
activity, or service;
(iv) will maximize the return for the
senior preferred shareholders as required under
paragraph (1); and
(v) would not result in an uncompetitive
primary or secondary mortgage market or
otherwise limit competitiveness in the primary
or secondary mortgage markets.
(C) Sale of historic data.--The Federal Housing
Finance Agency shall conduct a sale for value of each
enterprise's historic data, including loan-level
historical performance data. In conducting such sale,
the Federal Housing Finance Agency may require that--
(i) the purchaser of the historic data is
the Corporation or the Securitization Platform;
(ii) the purchaser of the historic data
makes the historic data available to the public
in a searchable and easily accessible format as
promptly as practicable; and
(iii) the purchaser of the historic data
takes appropriate steps to ensure the privacy
of consumers, minimizes the collection and
storage of personally identifiable financial
information, and considers statutes, rules, and
regulations relating to the privacy of consumer
credit information and personally identifiable
financial information.
SEC. 605. PORTFOLIO REDUCTION.
(a) Graduated Reduction.--
(1) In general.--On December 31 of the year after the date
of enactment of this Act, and on December 31 of each year
thereafter until each enterprise reaches the allowable size of
the retained single-family portfolio specified in paragraph
(2), each enterprise shall not own single-family mortgage loan
assets in excess of 85 percent of the aggregate amount of the
single-family mortgage loan assets that the enterprise was
permitted to own as of December 31 of the immediately preceding
calendar year.
(2) Retained single-family portfolio to facilitate orderly
wind down.--Not later than the date on which the system
certification date occurs, the Corporation shall establish an
allowable amount of enterprise-owned single-family mortgage
loan assets in an amount equal to the amount necessary to
facilitate--
(A) the orderly wind down of the enterprises; and
(B) appropriate loss mitigation on any legacy
guarantees of the enterprises.
(b) Mortgage Loan Assets Defined.--For purposes of this section,
the term ``mortgage loan assets'' means, with respect to an enterprise,
assets of such enterprise consisting of mortgage loans, mortgage-
related securities, participation certificates, mortgage-backed
commercial paper, obligations of real estate mortgage loan investment
conduits, and similar assets, in each case to the extent that such
assets would appear on the balance sheet of such enterprise in
accordance with generally accepted accounting principles in effect in
the United States as of September 7, 2008 (as set forth in the opinions
and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board from time to
time, and without giving any effect to any change that may be made
after September 7, 2008, in respect of Statement of Financial
Accounting Standards No. 140 or any similar accounting standard).
SEC. 606. OVERSIGHT OF TRANSITION OF THE HOUSING FINANCE SYSTEM.
(a) Testimony.--Beginning on the agency transfer date and ending on
the system certification date, the Chairperson shall, on an annual
basis, appear before the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the
House of Representatives to provide testimony on the progress made in
carrying out the requirements of this title.
(b) Inspector General Report on Transition.--Beginning on the
agency transfer date and ending on the system certification date, the
Inspector General of the Federal Mortgage Insurance Corporation shall,
on an annual basis--
(1) submit a report to the Corporation and the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives--
(A) on the status of the transition to the new
housing finance system authorized by this Act;
(B) that includes recommendations to facilitate an
orderly transition to the new housing finance system
authorized by this Act; and
(C) on the impact of various actions required by
this Act on borrowers and small mortgage lenders; and
(2) appear before the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives to provide testimony
on the report required under paragraph (1).
(c) GAO Report on Transition.--
(1) In general.--Not later than 18 months after the system
certification date, the Comptroller General of the United
States shall conduct a study and 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 reviewing the transition required by this Act.
(2) Contents of study.--In conducting the study required
under paragraph (1), the Comptroller General shall review--
(A) all property, including intellectual property,
of the enterprises that may have been sold,
transferred, or licensed for value pursuant to this
title or any amendment made by this title;
(B) the number and market share of each type of
approved entity; and
(C) the amount of any taxpayer repayment.
SEC. 607. AUTHORITY TO ESTABLISH PROVISIONAL STANDARDS.
(a) Provisional Standards.--
(1) In general.--Notwithstanding any standard required
under subtitle B of title III or section 703, the Corporation
may establish provisional standards for the approval of
approved entities in order to ensure the sufficient
participation of financially sound entities in the housing
finance system.
(2) Period of effectiveness during transition.--The
Corporation is authorized to establish provisional standards
under paragraph (1) prior to the system certification date and
such provisional standards shall--
(A) be published in the Federal Register for notice
and comment; and
(B) remain in effect until the Corporation adopts
and publishes final standards for the approval of
approved entities pursuant to subtitle B of title III
or section 703.
(3) Period of effectiveness during unusual and exigent
circumstances.--The Corporation is authorized to establish
provisional standards under paragraph (1) during periods when
the authority of the Corporation under section 305 is exercised
and such provisional standards shall--
(A) be published in the Federal Register; and
(B) remain in effect until the final date of the
timeline established by the Corporation pursuant to
section 305(h)(1).
(4) Rule of construction.--Nothing in paragraph (2) shall
be construed to allow the Corporation to delay or otherwise not
implement subsection (c) in the required timeframe.
(b) Oversight of Approved Entities.--During any period in which a
provisional standard is in effect pursuant to subsection (a), the
Corporation shall maintain all oversight and enforcement authorities
with regard to approved entities in accordance with the requirements
and authorities of subtitles B and C of title III and section 703.
(c) Phase-in of Capital Standards for Approved Guarantors.--
(1) In general.--The requirement under section 311(g)(1)(A)
shall take effect on the date that is 8 years after the date
that the Corporation approves the first approved guarantor
under this section.
(2) Phase-in.--Beginning on the date that the Corporation
approves the first approved guarantor under this section and
ending on the date set forth under paragraph (1), the
Corporation shall--
(A) require an approved guarantor to maintain an
appropriate level of capital necessary to help ensure
an orderly transition pursuant to this title; and
(B) increase annually, in equal increments, the
required amount of capital to be held by the approved
guarantor.
(3) Applicability.--Each capital level required to be held
by an approved guarantor under this section, including each
annual increase pursuant to paragraph (2)(B), shall only be
applicable with respect to new business being guaranteed by an
approved guarantor on and after the date each capital level
becomes effective.
(d) Phase-in of Capital Standards for Multifamily Approved
Guarantors.--
(1) In general.--The requirement under section 703(h)(1)(A)
shall take effect on the date that is 8 years after the date
that the Corporation approves the first multifamily approved
guarantor under this section.
(2) Phase-in.--Beginning on the date that the Corporation
approves the first approved multifamily guarantor under this
section and ending on the date set forth under paragraph (1),
the Corporation shall--
(A) require an approved multifamily guarantor to
maintain an appropriate level of capital necessary to
help ensure an orderly transition pursuant to this
title; and
(B) increase annually, in equal increments, the
required amount of capital to be held by the approved
multifamily guarantor.
(3) Applicability.--Each capital level required to be held
by an approved multifamily guarantor under this section,
including each annual increase pursuant to paragraph (2)(B),
shall only be applicable with respect to new business being
guaranteed by an approved multifamily guarantor on and after
the date each capital level becomes effective.
SEC. 608. INITIAL FUND LEVEL FOR THE MORTGAGE INSURANCE FUND.
(a) Fund Amount on System Certification Date.--The Corporation
shall endeavor to ensure that the Mortgage Insurance Fund established
under section 303 attains a reserve ratio of 0.75 percent of the sum of
the outstanding principal balance of the covered securities for which
insurance is projected to be provided under this Act for the 5-year
period beginning on the system certification date.
(b) Report to Congress on Projection.--The projection required
under subsection (a) shall be--
(1) determined by the Corporation; and
(2) reported to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives.
(c) Assessments.--Pursuant to the authorities granted to the
Corporation under section 1316(i) of the Safety and Soundness Act, as
added by section 405, the amount of funds required to be held by the
Mortgage Insurance Fund under subsection (a) shall be acquired through
assessments on the enterprises. The assessments required under this
subsection shall be in effect for the period beginning on the date of
enactment of this Act and ending on the system certification date. The
assessments required under this subsection shall be deposited in the
Mortgage Insurance Fund.
SEC. 609. GAO REPORT ON FULL PRIVATIZATION OF SECONDARY MORTGAGE
MARKET.
(a) GAO Report.--Not later than 8 years after the date of enactment
of this Act, the Comptroller General of the United States shall 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 on the feasibility of transitioning to and creating a
fully privatized secondary mortgage market, including recommendations
on how to best carry out any displacement of the insurance model
established under this Act, and an assessment of the cost of mortgage
credit and the impact on the economy if the secondary mortgage market
is fully privatized.
(b) Corporation Plan.--Not later than 6 months after the date on
which the report required under subsection (a) is submitted, the
Corporation shall submit to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives a description of the legislative,
administrative, and regulatory actions necessary to implement the
recommendations of the report.
TITLE VII--MULTIFAMILY
SEC. 701. ESTABLISHMENT OF MULTIFAMILY SUBSIDIARIES.
(a) Formation and Governance of Multifamily Subsidiaries.--
(1) Federal national mortgage association.--
(A) Multifamily subsidiary plan.--The FHFA
Director, in consultation with the Secretary of the
Treasury, shall direct the Federal National Mortgage
Association to develop a plan, not later than 180 days
after the date of enactment of this Act, to establish a
multifamily subsidiary for purposes of expeditiously
meeting the multifamily market minimum criteria
required under section 601.
(B) Establishment of multifamily subsidiary.--
Pursuant to section 604, the Federal Housing Finance
Agency shall direct the Federal National Mortgage
Association to establish a multifamily subsidiary not
later than 1 year after the date of enactment of this
Act.
(2) Federal home loan mortgage corporation.--
(A) Multifamily subsidiary plan.--The FHFA
Director, in consultation with the Secretary of the
Treasury, shall direct the Federal Home Loan Mortgage
Corporation to develop a plan, not later than 180 days
after the date of enactment of this Act, to establish a
multifamily subsidiary for purposes of expeditiously
meeting the multifamily market minimum criteria
required under section 601.
(B) Establishment of multifamily subsidiary.--
Pursuant to section 604, the Federal Housing Finance
Agency shall direct the Federal Home Loan Mortgage
Corporation to establish a multifamily subsidiary not
later than 1 year after the date of enactment of this
Act.
(b) Transfer of Functions.--
(1) Fannie mae multifamily subsidiary.--
(A) In general.--Notwithstanding the provisions
under title VI or any other provision of law, effective
on the date on which the multifamily subsidiary is
established under subsection (a)(1)(B), all employees,
functions, activities, infrastructure, property,
including the Delegated Underwriting and Servicing
Lender Program and other intellectual property,
platforms, technology, or any other object or service
of the Federal National Mortgage Association necessary
to the support, maintenance, and operation of the
multifamily business of the Federal National Mortgage
Association shall be transferred and contributed,
without cost, to the multifamily subsidiary.
(B) Capital contribution.--In connection with the
transfer required under subparagraph (A), the Federal
National Mortgage Association shall contribute, in any
form or manner the Federal Housing Finance Agency may
determine, subject to the approval right of the
Secretary of the Treasury in the Senior Preferred Stock
Purchase Agreement, any capital necessary to ensure
that the multifamily subsidiary established under
subsection (a)(1)(B) has, in the determination of the
FHFA Director, sufficient capital to carry out its
multifamily business, including the ability to obtain
warehouse lines of credit.
(C) Ensuring continuation of ongoing operation of
multifamily business.--In carrying out the multifamily
business transferred pursuant to subparagraph (A), the
multifamily subsidiary established under subsection
(a)(1)(B) shall ensure that any such business continues
to operate, as applicable, consistent with--
(i) the Delegated Underwriting and
Servicing Lender Program established by the
Federal National Mortgage Association;
(ii) any other programs, activities, and
contractual agreements of the enterprises that
support the enterprises' provision of liquidity
to the multifamily housing market; and
(iii) the provisions of this title.
(2) Freddie mac multifamily subsidiary.--
(A) In general.--Notwithstanding the provisions
under title VI or any other provision of law, effective
on the date on which the multifamily subsidiary is
established under subsection (a)(2)(B), all employees,
functions, activities, infrastructure, property,
including the K Series Structured Pass-Through
Certificates originated and offered under the Program
Plus Lender Program and other intellectual property,
platforms, technology, or any other object or service
of the Federal Home Loan Mortgage Corporation necessary
to the support, maintenance, and operation of the
multifamily business of the Federal Home Loan Mortgage
Corporation shall be transferred and contributed,
without cost, to the multifamily subsidiary.
(B) Capital contribution.--In connection with the
transfer required under subparagraph (A), the Federal
Home Loan Mortgage Corporation shall contribute, in any
form or manner the Federal Housing Finance Agency may
determine, subject to the approval right of the
Secretary of the Treasury in the Senior Preferred Stock
Purchase Agreement, any capital necessary to ensure
that the multifamily subsidiary established under
subsection (a)(2)(B) has, in the determination of the
FHFA Director, sufficient capital to carry out its
multifamily business, including the ability to obtain
warehouse lines of credit.
(C) Ensuring continuation of ongoing operation of
multifamily business.--In carrying out the multifamily
business transferred pursuant to subparagraph (A), the
multifamily subsidiary established under subsection
(a)(2)(B) shall ensure that any such business continues
to operate, as applicable, consistent with--
(i) the K Series Structured Pass-Through
Certificates originated and offered under the
Program Plus Lender Program established by the
Federal Home Loan Mortgage Corporation;
(ii) any other programs, activities, and
contractual agreements of the enterprises that
support the enterprises' provision of liquidity
to the multifamily housing market; and
(iii) the provisions of this title.
(c) Multifamily Subsidiaries.--
(1) In general.--The multifamily subsidiaries established
by the Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation under subsection (a) may retain
a limited multifamily mortgage loan portfolio to--
(A) aggregate mortgage loans for pooled securities
executions;
(B) implement pilot mortgage loan programs and
other risk-sharing transactions and product
modification testing;
(C) engage in the financing of properties with
rent-regulatory restrictions, off-campus student
housing, and senior and assisted living developments;
and
(D) perform additional activities as may be
established by the Corporation for the purpose of
facilitating the continuation of existing multifamily
activities.
(2) Portfolio reduction applicability.--For purposes of
expeditiously meeting the multifamily market minimum criteria
required under section 601, the multifamily subsidiaries
established under subsection (a) shall not be subject to the
portfolio reduction required under section 605.
SEC. 702. DISPOSITION OF MULTIFAMILY BUSINESSES.
(a) Authority to Manage Disposition of Multifamily Businesses.--
Notwithstanding any provision of title VI or any other provision of
law, the Federal Housing Finance Agency may, on or before the system
certification date, manage the sale, transfer, or disposition for value
of property, including intellectual property, technology, platforms,
and legacy systems, infrastructure and processes of an enterprise
relating to the operation and maintenance of the multifamily business
of an enterprise.
(b) Required Establishment of Well-functioning Multifamily Covered
Security Market.--In exercising the authority in subsection (a), the
Federal Housing Finance Agency shall manage any disposition of the
multifamily business of an enterprise in a manner consistent with--
(1) the establishment of a well-functioning multifamily
covered security market;
(2) the provision of broad access to multifamily financing;
and
(3) facilitating competition in the multifamily covered
security market by--
(A) providing open access to performance
information on the legacy multifamily business of an
enterprise;
(B) providing for reasonable licensing of the
multifamily proprietary systems of an enterprise; and
(C) setting market share limitations, fees, or
additional capital standards on multifamily business
assets that were sold, transferred, or disposed.
SEC. 703. APPROVAL AND SUPERVISION OF MULTIFAMILY GUARANTORS.
(a) Standards for Approval of Multifamily Guarantors.--
(1) In general.--The Corporation shall develop, adopt, and
publish standards for the approval by the Corporation of
multifamily guarantors to--
(A) issue multifamily covered securities; and
(B) guarantee the timely payment of principal and
interest on multifamily covered securities
collateralized by eligible multifamily mortgage loans
and insured by the Corporation.
(2) Required standards.--The standards required under
paragraph (1) shall include--
(A) the financial history and condition of the
multifamily guarantor;
(B) a requirement that the multifamily guarantor
maintain capital levels as defined by the Corporation,
pursuant to subsection (h);
(C) the capability of the management of the
multifamily guarantor;
(D) the general character and fitness of the
officers and directors of the multifamily guarantor,
including the compliance history of the multifamily
guarantor's officers and directors with Federal and
State laws and the rules and regulations promulgated by
self-regulatory organizations (as defined in section
3(a)(26) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(26)), as applicable;
(E) the risk presented by the multifamily guarantor
to the Mortgage Insurance Fund;
(F) the adequacy of insurance and fidelity coverage
of the multifamily guarantor;
(G) the ability of the multifamily guarantor to--
(i) ensure that eligible multifamily
mortgage loans that collateralize a multifamily
covered security insured under this Act are
originated in compliance with the requirements
of this Act;
(ii) oversee multifamily servicers and
specialty servicers conducting servicing
activities on eligible multifamily mortgage
loans, which may be governed under the terms of
seller-servicer guides in effect at either of
the enterprises on the date of enactment of
this Act; and
(iii) oversee counterparties in credit
risk-sharing transactions;
(H) the capacity of the multifamily guarantor to
take the first loss position, pari passu position, or
transfer investment risk and credit risk to private
market holders;
(I) that the multifamily guarantor has the capacity
to guarantee eligible multifamily mortgage loans in a
manner that furthers the purposes of the Corporation as
described in section 201(b)(5);
(J) a requirement that the multifamily guarantor
submit audited financial statements to the Corporation;
(K) that the multifamily guarantor does not
originate eligible multifamily mortgage loans and is
not an affiliate of a person that actively engages in
the business of originating eligible multifamily
mortgage loans; and
(L) a requirement that the multifamily guarantor
has the capacity to meet the requirement of section
704.
(3) Consultation and coordination.--To promote consistency
and minimize regulatory conflict, the Corporation shall consult
and coordinate with appropriate Federal and State regulators
and officials when developing standards pursuant to this
subsection.
(b) Application and Approval.--
(1) Application process.--
(A) In general.--The Corporation shall establish an
application process, in such form and manner and
requiring such information as the Corporation may
require, for the approval of a multifamily guarantor
under this section.
(B) Application review.--The Corporation shall
establish internal timelines for its processing of an
application under this section, including timelines for
any action to approve or to deny an application under
this section.
(C) Prohibition on control by insured depository
institutions or affiliates of insured depository
institutions.--
(i) In general.--It shall be unlawful for
an insured depository institution or an
affiliate of an insured depository institution
to control an approved multifamily guarantor.
(ii) Rule of construction regarding
control.--For purposes of this subparagraph,
any insured depository institution or affiliate
of an insured depository institution has
control over an approved multifamily guarantor
if the company directly or indirectly or acting
through 1 or more other persons owns, controls,
or has power to vote 10 percent or more of any
class of voting shares of the approved
multifamily guarantor.
(D) Expedited application process.--The Corporation
may establish an expedited application process for an
applicant applying to become an approved multifamily
guarantor, provided that any such applicant--
(i) proposes to use a credit risk-sharing
mechanism approved under subsection (c); and
(ii) otherwise meets the requirements of
this section.
(2) Approval.--The Corporation may approve any application
made pursuant to paragraph (1), provided the multifamily
guarantor meets the standards established under subsection (a).
(3) Denial.--The Corporation shall have the authority to
deny any application made pursuant to paragraph (1) if an
officer or director of the multifamily guarantor has, at any
time prior to the date of the approval of such application,
been--
(A) subject to a statutory disqualification
pursuant to section 3(a)(39) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(39)); or
(B) suspended, removed, or prohibited from
participation pursuant to section 8(g) of the Federal
Deposit Insurance Act (12 U.S.C. 1818(g)), prohibited
from certain action pursuant to paragraphs (6) or (7)
of section 8(e) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(e)), subject to an action resulting in
a written agreement or other written statement under
section 8(u)(1) of the Federal Deposit Insurance Act
(12 U.S.C. 1818(u)(1)), for which a violation may be
enforced by an appropriate Federal banking agency, or
subject to any final order issued with respect to any
administrative enforcement proceeding initiated by such
agency under section 8 of the Federal Deposit Insurance
Act (12 U.S.C. 1818).
(4) Notice and publication.--The Corporation shall--
(A) provide prompt notice to a multifamily
guarantor of the approval or denial of any application
of the multifamily guarantor to become an approved
multifamily guarantor under this section;
(B) publish a notice in the Federal Register upon
approval of any multifamily guarantor; and
(C) maintain an updated list of approved
multifamily guarantors on the website of the
Corporation.
(c) Credit Risk-sharing Mechanisms.--
(1) Consideration and approval.--The Corporation shall--
(A) consider and approve credit risk-sharing
mechanisms that may be employed by an approved
multifamily guarantor to manage the credit risk related
to guarantees provided for multifamily covered
securities; and
(B) approve any credit risk-sharing mechanism
undertaken by an enterprise as of the date of enactment
of this Act, including--
(i) the Delegated Underwriting and
Servicing Lender Program established by the
Federal National Mortgage Association;
(ii) the K Series Structured Pass-Through
Certificates originated and offered under the
Program Plus Lender Program established by the
Federal Home Loan Mortgage Corporation;
(iii) any other program, activity, or
contractual agreement of an enterprise that
supports the enterprise's provision of
liquidity to the multifamily housing market;
and
(iv) any credit risk-sharing mechanism
based on the mechanisms described in clause
(i), (ii), or (iii), with modifications
approved by the Corporation.
(2) Rule of construction.--Nothing in paragraph (1) shall
be construed to--
(A) prevent private market holders from taking a
first loss position on multifamily covered securities
guaranteed by an approved multifamily guarantor; or
(B) limit an approved multifamily guarantor from
engaging in other forms of risk-sharing using
mechanisms that have not been considered or approved by
the Corporation.
(3) Report.--Each report required by section 302(b)(5)
shall include a description of each credit risk-sharing
mechanism approved by the Corporation pursuant to this
subsection.
(4) Notice and publication.--The Corporation shall--
(A) provide prompt notice to any person seeking
approval for a credit risk-sharing mechanism of the
approval or denial of that credit risk-sharing
mechanism under this subsection; and
(B) make available updated information regarding
approved credit risk-sharing mechanisms on the website
of the Corporation.
(5) Applicability of the commodity exchange act and
securities act of 1933.--
(A) Exemption from the commodity exchange act;
prior consultation required.--
(i) Exemption.--No counterparty that enters
into a swap, as that term is defined in section
1a of the Commodity Exchange Act (7 U.S.C. 1a),
for purposes of structuring any credit risk-
sharing mechanism that is approved by the
Corporation pursuant to this section, which
credit risk-sharing mechanism is designed to be
used or is used by a private market holder to
assume losses and to reduce the specific risks
arising from losses realized under such credit
risk-sharing mechanism associated with any
multifamily covered security insured in
accordance with section 303 or section 305,
shall be deemed, by reason of such swap
transaction, to be a commodity pool, as that
term is defined in section 1a of the Commodity
Exchange Act (7 U.S.C. 1a).
(ii) Prior consultation required.--Before
approving any credit risk-sharing mechanism
that would be exempt from the Commodity
Exchange Act pursuant to subparagraph (A), the
Corporation shall consult with the Commodity
Futures Trading Commission.
(B) Exemption from section 27b of the securities
act of 1933; prior consultation required.--
(i) Exemption.--Any credit risk-sharing
mechanism that is approved by the Corporation
pursuant to this section, which credit risk-
sharing mechanism is designed to be used or is
used by a private market holder to assume
losses and to reduce the specific risks arising
from losses realized under such credit risk-
sharing mechanism associated with any
multifamily covered security insured in
accordance with section 303 or section 305,
shall be exempt from section 27B of the
Securities Act of 1933 (15 U.S.C. 77z-2a).
(ii) Prior consultation required.--Before
approving any credit risk-sharing mechanism
that would be exempt from section 27B of the
Securities Act of 1933 pursuant to subparagraph
(A), the Corporation shall consult with the
Securities and Exchange Commission.
(d) Requirement to Maintain Approval Status.--
(1) Authority to issue order.--If the Corporation
determines that an approved multifamily guarantor approved
under this section no longer meets the standards for such
approval or violates a requirement under this Act, including
any standard, regulation, or order promulgated in accordance
with this Act, the Corporation may--
(A) suspend or revoke the approved status of the
approved multifamily guarantor; or
(B) take any other action with respect to such
approved multifamily guarantor as may be authorized
under this Act.
(2) Rule of construction.--The suspension or revocation of
the approved status of an approved multifamily guarantor under
this section shall have no effect on the status as a
multifamily covered security of any multifamily covered
security collateralized by eligible multifamily mortgage loans
with which the approved multifamily guarantor contracted prior
to the suspension or revocation.
(3) Publication.--The Corporation shall--
(A) promptly publish a notice in the Federal
Register upon suspension or revocation of the approval
of any approved multifamily guarantor; and
(B) maintain an updated list of such approved
multifamily guarantors on the website of the
Corporation.
(4) Definition.--In this subsection, the term ``violate''
includes any action, taken alone or with others, for or toward
causing, bringing about, participating in, counseling, or
aiding or abetting, a violation of the requirements under this
Act.
(e) Prudential Standards for Supervision.--The Corporation shall
prescribe prudential standards for approved multifamily guarantors in
order to--
(1) ensure--
(A) the safety and soundness of approved
multifamily guarantors; and
(B) the maintenance of approval standards by
approved multifamily guarantors; and
(2) minimize the risk presented to the Mortgage Insurance
Fund.
(f) Reports and Examinations.--For purposes of determining whether
an approved multifamily guarantor is fulfilling the requirements under
this Act, the Corporation shall have the authority to require reports
from and examine an approved multifamily guarantor, in the same manner
and to the same extent as the Federal Deposit Insurance Corporation has
with respect to an insured depository institution under the provisions
of subsection (a) of section 9 of the Federal Deposit Insurance Act (12
U.S.C. 1819).
(g) Enforcement.--The Corporation shall have the authority to
enforce the provisions of this Act with respect to an approved
multifamily guarantor, in the same manner and to the same extent as the
Federal Deposit Insurance Corporation has with respect to an insured
depository institution under the provisions of subsections (b) through
(n) of section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818).
(h) Capital Standards.--
(1) In general.--Pursuant to the requirement to establish
capital and related solvency standards under section 309(b),
the Corporation shall establish standards for approved
multifamily guarantors as follows:
(A) Guarantor activities.--The capital standard for
eligible multifamily mortgage loans that collateralize
multifamily covered securities insured by the
Corporation shall require an approved multifamily
guarantor to hold 10 percent capital.
(B) Aggregation activities.--An approved
multifamily guarantor shall hold capital in an amount
comparable to that which is required to be held by
insured depository institutions and their affiliates
with respect to their applicable aggregating
activities.
(C) Solvency levels.--An approved multifamily
guarantor shall maintain solvency levels adequate for
the approved multifamily guarantor to withstand losses
that might be incurred by the approved multifamily
guarantor in a period of economic stress, including
national and regional multifamily housing price
declines, such as those observed during moderate to
severe recessions in the United States.
(2) Risk-sharing considerations.--
(A) In general.--For purposes of paragraph (1)(A),
the Corporation shall consider the extent, amount, and
form of risk-sharing and risk mitigation through the
use by approved multifamily guarantors of credit risk-
sharing mechanisms approved pursuant to subsection (c).
The Corporation shall allow such risk-sharing and risk
mitigation to fulfill required amounts of capital to be
held under paragraph (1)(A) while maintaining an
appropriate structure of capital as determined by the
Corporation.
(B) Equivalent treatment.--For purposes of
paragraph (2)(A), the Corporation shall seek to ensure
equivalent capital treatment between approved credit
risk-sharing mechanisms approved under subsection (c)
with similar performance histories.
(3) Other consideration.--To reflect the differences
between single-family and multifamily businesses, the capital
standards established under paragraph (1)(A) may differ from
the capital standards established under section 311 for
approved guarantors.
(4) Stress tests.--The Corporation shall conduct
appropriate stress tests of each approved multifamily guarantor
that has total assets of more than $10,000,000,000, provided
that such stress tests shall be--
(A) specifically tailored to the business model of
the approved multifamily guarantor; and
(B) utilized to--
(i) ensure the safety and soundness of the
approved multifamily guarantor; and
(ii) minimize the risk the approved
multifamily guarantor may present to the
Mortgage Insurance Fund.
(i) Resolution Authority for Failing Multifamily Guarantors.--
(1) In general.--Notwithstanding any other provision of
Federal law, the law of any State, or the constitution of any
State, the Corporation shall--
(A) have the authority to act, in the same manner
and to the same extent, with respect to an approved
multifamily guarantor as the Federal Deposit Insurance
Corporation has with respect to an insured depository
institution under subsections (c) through (s) of
section 11 of the Federal Deposit Insurance Act (12
U.S.C. 1821), section 12 of the Federal Deposit
Insurance Act (12 U.S.C. 1822), and section 13 of the
Federal Deposit Insurance Act (12 U.S.C. 1823), while
tailoring such actions to the specific business model
of the approved multifamily guarantor, as may be
necessary to properly exercise such authority under
this subsection;
(B) in carrying out any authority provided in
subparagraph (A), act, in the same manner and to the
same extent, with respect to the Mortgage Insurance
Fund as the Federal Deposit Insurance Corporation may
act with respect to the Deposit Insurance Fund under
the provisions of the Federal Deposit Insurance Act set
forth in subparagraph (A);
(C) prescribe regulations governing the applicable
rights, duties, and obligations of an approved
multifamily guarantor placed into resolution under this
subsection, its creditors, counterparties, and other
persons, as the Corporation deems necessary to properly
exercise the authority provided in subparagraph (A);
(D) consistent with the authorities provided in
subparagraph (A), immediately place an insolvent
approved multifamily guarantor into receivership; and
(E) upon placing an approved multifamily guarantor
into receivership, treat multifamily covered securities
insured by the Corporation under section 303 in the
same manner as the Federal Deposit Insurance
Corporation treats deposit liabilities under section
11(d)(11)(A)(ii) of the Federal Deposit Insurance Act
and insured deposits under section 11(f) of the Federal
Deposit Insurance Act, where the Corporation shall have
the same right of subrogation as the Federal Deposit
Insurance Corporation has under section 11(g) of the
Federal Deposit Insurance Act.
(2) Least-cost resolution required.--The Corporation may
not exercise any authority under paragraph (1) with respect to
any approved multifamily guarantor unless the total amount of
the expenditures by the Corporation and obligations incurred by
the Corporation in connection with the exercise of any such
authority with respect to such approved multifamily guarantor
is the least costly to the Mortgage Insurance Fund, consistent
with the least cost approach specified in the Federal Deposit
Insurance Act (12 U.S.C. 1811 et seq.), of all possible methods
for meeting the Corporation's obligations under this Act and
expeditiously concluding its resolution activities, subject to
section 13 of the Federal Deposit Insurance Act where the
Corporation and the Board of Directors shall have the same
authority as the Federal Deposit Insurance Corporation and the
Federal Deposit Insurance Corporation's board of directors.
(3) Taxpayer protection.--The Corporation, in carrying out
any authority provided in this subsection, shall prescribe
regulations to ensure that any amounts owed to the United
States, unless the United States agrees or consents otherwise,
shall have priority following administrative expenses of the
receiver when satisfying unsecured claims against an approved
multifamily guarantor, or the receiver therefor, that are
proven to the satisfaction of the receiver.
(j) Hearing.--Upon notice of denial of an application for approval
under subsection (b) or upon a notice of suspension or revocation of
the approved status of an approved multifamily guarantor under
subsection (d), the applicant or approved multifamily guarantor shall
be afforded a hearing under subsection (h) of section 8 of the Federal
Deposit Insurance Act (12 U.S.C. 1818(h)), in the same manner and to
the same extent as if the Corporation were the appropriate Federal
banking agency, provided that the approved multifamily guarantor
submits a request to the Corporation for a hearing not later than 10
days after the date on which the notice is published under subsection
(b)(3) or (d)(3).
(k) Prohibited Activity.--An approved multifamily guarantor may
not--
(1) originate eligible multifamily mortgage loans; or
(2) be an affiliate of a person that actively engages in
the business of originating eligible multifamily mortgage
loans.
(l) Guarantors Required to Pay Claims.--Subject to such standards
as the Corporation may provide, an approved multifamily guarantor may
not for any reason withhold payment of funds that would ensure holders
of multifamily covered securities receive timely payment of principal
and interest on multifamily covered securities. The Corporation shall
by regulation develop a process for the mediation and resolution of
disputed payment amounts.
SEC. 704. MULTIFAMILY HOUSING REQUIREMENT.
(a) In General.--Each approved multifamily guarantor shall ensure,
during each calendar year, that at least 60 percent of the rental
housing units which are contained in the eligible multifamily mortgage
loans that collateralize all multifamily covered securities guaranteed
by each such approved multifamily guarantor during the previous 24-
month period were, at the time of origination, affordable to low-income
families.
(b) Determination of Affordability of Rental Housing Units.--For
purposes of subsection (a), the affordability of rental housing units
contained in an eligible multifamily mortgage loan shall be determined
at the time of loan commitment by using--
(1) the most recent rent roll for an occupied property; or
(2) in the case of rental housing units that are newly
constructed or substantially rehabilitated, a final pro-forma
rent roll.
(c) Determination of Compliance.--The Corporation shall determine,
during each calendar year, whether each approved multifamily guarantor
has complied with the requirement under subsection (a).
(d) Suspension or Adjustment.--
(1) In general.--The Corporation may suspend or adjust the
requirement under subsection (a) for an approved multifamily
guarantor or guarantors--
(A) during a period of unusual and exigent market
conditions in the multifamily housing market as
determined pursuant to section 305; or
(B) either--
(i) pursuant to information available to
the Corporation demonstrating adverse market
conditions in the multifamily housing market;
or
(ii) pursuant to a written request to
suspend or adjust the requirement under
subsection (a) made by an approved multifamily
guarantor, which the Corporation may grant in
whole or in part.
(2) Criteria for suspension or adjustment.--The Corporation
may suspend or adjust the requirement under subsection (a)
pursuant to paragraph (1)(B) only if--
(A) market and economic conditions require such an
action; or
(B) efforts to meet the requirement under
subsection (a) would result in--
(i) the constraint of liquidity in certain
market segments;
(ii) over-investment in certain market
segments; or
(iii) other consequences contrary to the
intent of this section.
(3) Limitation on authority.--The Corporation shall
narrowly tailor any suspension or adjustment made under
paragraph (1)(B) to address the market conditions that prompted
the suspension or adjustment.
(4) Determination.--
(A) Period for public comment.--The Corporation
shall, promptly upon a decision to pursue a suspension
or adjustment under paragraph (1)(B)(i) or upon receipt
of a request under paragraph (1)(B)(ii), seek public
comment on the suspension or adjustment for a period of
30 days.
(B) Period for determination.--The Corporation
shall make a determination regarding any proposed
suspension or adjustment within 30 days after the
expiration of the public comment period provided under
subparagraph (A).
(C) Extensions.--The Corporation may extend the
period for determination provided under subparagraph
(B) for a single additional 15-day period, but only if
the Corporation requests additional information from
the approved multifamily guarantor.
(5) Review of suspension or adjustment.--
(A) Annual review.--The Corporation shall review
any suspension or adjustment made by the Corporation
under subparagraphs (A) or (B) of paragraph (1) at
least annually to determine whether the suspension or
adjustment satisfies the criteria established under
paragraph (2).
(B) Publication and comment.--The Corporation
shall--
(i) not less than annually, publish a list
of all suspensions and adjustments in effect
under this section; and
(ii) seek public comment as to the
continued necessity of such suspensions or
adjustments.
(e) Mixed Income Liquidity Study and Review.--
(1) Study.--Not later than 2 years after the date of
enactment of this Act, and periodically or as market conditions
warrant thereafter, the Corporation shall conduct a study of
liquidity in the market for financing the new construction or
substantial rehabilitation of mixed-income properties
containing multifamily units that--
(A) otherwise qualify under the requirement under
subsection (a); and
(B) are financed by tax-exempt bonds that are
issued by a State or local housing finance agency.
(2) Adjustment to requirement.--The Corporation may adjust
the requirement under subsection (a), subject to the procedures
provided under paragraphs (2) through (5) of subsection (d), if
the Corporation finds based on a study conducted under
paragraph (1) that--
(A) liquidity is constrained in the market for
eligible multifamily mortgage loans for the mixed-
income properties described in paragraph (1); and
(B) it is necessary to foster liquidity in that
market.
(f) Rule of Construction.--Nothing in this section shall be
construed to authorize the Corporation to require an approved
multifamily guarantor to exceed the 60 percent requirement set forth
under subsection (a).
(g) Definitions; Applicability to Enterprises.--In this section--
(1) the term ``approved multifamily guarantor'' includes an
enterprise or any multifamily subsidiary established pursuant
to section 701;
(2) the term ``multifamily covered security'' includes a
multifamily mortgage-backed security guaranteed by an
enterprise or any multifamily subsidiary established pursuant
to section 701; and
(3) the term ``eligible multifamily mortgage loan''
includes a multifamily mortgage loan collateralizing a security
guaranteed by an enterprise or any multifamily subsidiary
established pursuant to section 701.
SEC. 705. ESTABLISHMENT OF SMALL MULTIFAMILY PROPERTY PROGRAM.
(a) Pilot Program.--The Corporation shall establish at least 1
pilot program, to be administered by the Office of Multifamily Housing,
in consultation with the Office of Consumer and Market Access, to test
and assess methods or products designed to increase secondary mortgage
market access for multifamily properties comprised of not more than 50
units or with mortgages not exceeding $3,000,000 (as adjusted for
inflation).
(b) Activities.--In administering the pilot program required under
subsection (a), the Corporation shall--
(1) review, and may approve, proposals from regulated
entities or approved multifamily guarantors, including
proposals focused on lending by small mortgage lenders, to
participate in the pilot program by carrying out activities to
decrease barriers to secondary mortgage market access for
multifamily properties comprised of not more than 50 units or
with mortgages not exceeding $3,000,000 (as adjusted for
inflation) through new risk-sharing, partnerships, or other
mechanisms or incentives; and
(2) establish requirements governing the activities of the
pilot program, including requirements with respect to--
(A) any mid-course alterations of activities
permitted under the pilot program, information sharing,
reporting, and evaluation of the results of a pilot
program; and
(B) the tracking of any allocations of amounts that
may be distributed from the Market Access Fund.
(c) Use of Market Access Fund.--A regulated entity or approved
multifamily guarantor that submits a proposal under subsection (b) may
request, as part of the proposal, allocations from the Market Access
Fund as necessary to support its proposed activities.
(d) Amendments to Pilot Program.--The Corporation may amend a pilot
program established under subsection (a) as needed to accommodate the
multifamily mortgage market.
(e) Publication.--The Corporation shall make publicly available the
results of a pilot program established under subsection (a).
(f) Requirement.--The Corporation shall consider the results of a
pilot program established under subsection (a) for purposes of
expanding and implementing new mechanisms to decrease barriers to
secondary mortgage market access for multifamily properties comprised
of not more than 50 units or with mortgages not exceeding $3,000,000
(as adjusted for inflation).
(g) Limitation on Funding.--The Corporation may not use funds from
the Mortgage Insurance Fund to fund any pilot program activities
conducted by a regulated entity or approved multifamily guarantor under
this section.
SEC. 706. MULTIFAMILY HOUSING STUDY.
The Office of Multifamily Housing shall conduct a study on the
expansion of the Federal Home Loan Banks' Acquired Member Assets
(``AMA'') programs to eligible multifamily mortgage loans.
SEC. 707. MULTIFAMILY PLATFORM STUDY.
(a) In General.--Not later than 18 months after the system
certification date, the Corporation shall conduct a study on the need,
feasibility, costs, and merits of creating a cooperatively-owned,
nonprofit multifamily issuance platform to securitize eligible
multifamily mortgage loans.
(b) Content of Study.--The study required under subsection (a)
shall address--
(1) competition between existing approved multifamily
guarantors;
(2) the barriers to entry for new multifamily guarantors;
(3) the costs associated with developing a new platform;
(4) the funding of smaller-balance multifamily mortgage
loans, including mortgage loans originated by credit unions and
community and mid-size banks and other small-volume lenders in
rural and other underserved communities;
(5) standardized definitions and reporting and payment
requirements;
(6) stability in the multifamily lending market in times of
stress; and
(7) such other information as the Corporation determines
appropriate to further the purpose of the study.
(c) Consideration.--In conducting the study required under
subsection (a), the Corporation shall consider whether any identified
need to establish a multifamily securitization platform can and will be
met by the Platform established under section 321, or any subsidiary or
affiliate thereof.
(d) Report to Congress.--Not later than 18 months after the system
certification date, the Corporation shall submit the study required
under subsection (a) to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the
House of Representatives.
SEC. 708. SHORT-TERM RESIDENTIAL HOUSING.
(a) In General.--Section 513 of the National Housing Act (12 U.S.C.
1731b) is amended--
(1) in subsection (b)--
(A) in clause (1), by striking ``or'' at the end;
and
(B) by inserting before the period at the end the
following: ``, or (3) the project is a short-term
residential property (as such term is defined in
subsection (e) of this section) and is subject to a
mortgage insured under section 207, provided that the
Secretary has made a determination pursuant to the
study and report required under section 708(b) of the
Housing Finance Reform and Taxpayer Protection Act that
the provision of such insurance is appropriate''; and
(2) in subsection (e)--
(A) in clause (1), by striking ``and'' at the end;
and
(B) by inserting before the period at the end the
following: ``, and (3) the term `short-term residential
property' means multifamily housing that (A) has more
than 50 dwelling units that each contain a kitchen,
including a full refrigerator and cooking surface, and
bathroom facilities, (B) provides mail boxes for each
unit, (C) rents such units for a minimum stay of 7
days, and (D) does not provide food or beverage
services, including in-room service, daily maid
services, furnishing and laundering of linen without
charge, or bellhop services''.
(b) Study.--
(1) In general.--Not later than 6 months after the date of
enactment of this Act, the Secretary of Housing and Urban
Development shall--
(A) conduct and complete a study evaluating the
risk of the provision of insurance under section 207 of
the National Housing Act (12 U.S.C. 1713) for short-
term residential properties; and
(B) 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, which shall include--
(i) the findings of the study required
under subparagraph (A); and
(ii) a determination as to whether any
additional risk presented to the General
Insurance Fund resulting from the provision of
insurance under section 207 of the National
Housing Act (12 U.S.C. 1713) for short-term
residential properties is appropriate.
(2) Contents of study.--In conducting the study required
under paragraph (1)(A), the Secretary of Housing and Urban
Development shall--
(A) evaluate whether the provision of insurance
under section 207 of the National Housing Act (12
U.S.C. 1713) for short-term residential properties
presents additional risk to the General Insurance Fund;
and
(B) consider any additional operational and
logistical costs associated with providing such
insurance.
(3) Definitions.--In this subsection--
(A) the term ``General Insurance Fund'' means the
fund established under section 519 of the National
Housing Act (12 U.S.C. 1735c); and
(B) the term ``short-term residential properties''
has the meaning given the term under section 513(e)(3)
of the National Housing Act (12 U.S.C. 1731b(e)(3)).
TITLE VIII--GENERAL PROVISIONS
SEC. 801. RULE OF CONSTRUCTION.
Nothing in this Act shall be construed to alter, supersede, or
interfere with the final ruling of a court of competent jurisdiction
with respect to any provision of the Senior Preferred Stock Purchase
Agreement or amendments thereof of an enterprise.
SEC. 802. SEVERABILITY.
If any provision of this Act or the application of any provision of
this Act to any person or circumstance, is held invalid, the
application of such provision to other persons or circumstances, and
the remainder of this Act, shall not be affected thereby.
SEC. 803. TRANSFER NOTIFICATION UNDER TILA.
(a) In General.--Section 131(g) of the Truth in Lending Act (15
U.S.C. 1641(g)) is amended by striking paragraph (2) and inserting the
following:
``(2) Definitions.--For purposes of this subsection--
``(A) the term `mortgage loan' means any consumer
credit transaction that is secured by the principal
dwelling of a consumer;
``(B) the term `securitized residential mortgage'
means any residential mortgage loan that serves as
collateral for a fixed-income or other security that
allows the holder of such security to receive payments
dependent on the cash flow from such residential
mortgage loan; and
``(C) the term `servicer'--
``(i) has the meaning provided in section
129A, except that such term includes a person
who receives any payments from a mortgagor,
including any amounts for escrow accounts, and
makes payments to the owner of the loan or
other third parties, including payments made
after default, pursuant to the terms of the
relevant contracts; and
``(ii) excludes State and local housing
agencies.''.
(b) Disclosure of Fees.--Section 5(c)(3) of the Real Estate
Settlement Procedures Act (12 U.S.C. 2605(c)(3)) is amended--
(1) by striking ``Any notice required'' and inserting the
following:
``(A) In general.--Any notice required''; and
(2) by adding at the end the following:
``(B) Disclosure of fees requirement.--The
transferee servicer shall provide to the borrower, not
more than 15 days after the effective date of transfer
of the servicing of the mortgage loan, a statement
regarding the loan which shows the following:
``(i) The application of all payments and
charges, including the date received, as
allocated to principal, interest, escrow, and
other charges.
``(ii) The status of the loan as of the
date of the transfer including whether the loan
is in default and whether any loss mitigation
application submitted by the borrower is
pending.
``(iii) An itemization and explanation for
all arrearages claimed to be due as of the date
of the transfer.''.
(c) Safe Harbor for Mistaken Payments; Fees.--Section 131 of the
Truth in Lending Act (15 U.S.C. 1641) is amended--
(1) by redesignating subsection (g) as subsection (i); and
(2) by inserting after subsection (f) the following:
``(g) Treatment of Mistaken Loan Payments After Transfer.--During
the 60-day period beginning on the effective date of transfer of the
servicing of any securitized residential mortgage loan, a late fee may
not be imposed on the consumer with respect to any payment on such
loan, and no such payment may be treated as late for any other purpose,
if the payment is received by the transferor servicer (rather than the
transferee servicer who should properly receive payment) on or before
the applicable due date, including any grace period allowed under the
loan documents.
``(h) Fee Waive Upon Transfer.--
``(1) In general.--The creditor, new owner, or assignee of
the mortgage loan, by itself or through its servicer, may not
impose or collect--
``(A) any fee that is not listed as having been
incurred in the notice to the consumer of the transfer
of servicing of a securitized residential mortgage
loan; or
``(B) any fee incurred prior to the effective date
of servicing transfer that is not disclosed on a
periodic statement provided to the consumer prior to
the effective date of servicing transfer of a
securitized residential mortgage loan.
``(2) Definitions.--For purposes of this subsection--
``(A) the term `securitized residential mortgage'
means any residential mortgage loan that serves as
collateral for a fixed-income or other security that
allows the holder of such security to receive payments
dependent on the cash flow from such residential
mortgage loan; and
``(B) the term `servicer'--
``(i) has the meaning provided in section
129A, except that such term includes a person
who receives any payments from a mortgagor,
including any amounts for escrow accounts, and
makes payments to the owner of the loan or
other third parties, including payments made
after default, pursuant to the terms of the
relevant contracts; and
``(ii) excludes State and local housing
agencies.''.
SEC. 804. INVESTMENT AUTHORITY TO SUPPORT RURAL INFRASTRUCTURE.
Section 11 of the Federal Home Loan Bank Act (12 U.S.C. 1431) is
amended by adding at the end the following:
``(m) Mission Investments for Rural Infrastructure.--In furtherance
of its mission under section 5, each Federal Home Loan Bank is
authorized to purchase investment grade securities from nonmember
cooperative lenders that have received financing from the Federal
Financing Bank and that possess demonstrated experience in making loans
to rural cooperatives. Such securities shall be secured investments
collateralized by loans of the cooperative lender. The purchase of such
securities shall be at the sole discretion of the Bank, consistent with
such regulations, restrictions, and limitations as may be prescribed by
the Board.''.
SEC. 805. CONSOLIDATION OF SIMILAR HOUSING ASSISTANCE PROGRAMS.
(a) Report.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, the Corporation, the Secretary of
Housing and Urban Development, the Secretary of the Treasury,
the Secretary of Agriculture, the Secretary of Veterans
Affairs, the Secretary of Labor, and the Secretary of the
Interior shall jointly submit to Congress a report, which
shall--
(A) identify and evaluate, based on need and
appropriateness, specific opportunities to consolidate
similar housing assistance programs, which may include
the programs identified in the August 2012 Government
Accountability Office report to Congress entitled
``Opportunities Exist to Increase Collaboration and
Consider Consolidation'' (GAO-12-554);
(B) provide recommendations to Congress for
legislative action to appropriately streamline,
consolidate, or eliminate similar housing assistance
programs identified and evaluated under subparagraph
(A); and
(C) identify opportunities for cross-agency
collaboration of housing assistance efforts.
(2) Accessibility.--The report submitted under paragraph
(1) shall be made available on a publically accessible Internet
website.
(b) Use of Administrative Authority.--
(1) In general.--
(A) The Director of the Office of Management and
Budget shall coordinate with the Secretary of Housing
and Urban Development, the Secretary of the Treasury,
the Secretary of Agriculture, the Secretary of Veterans
Affairs, the Secretary of Labor, and the Secretary of
the Interior to consider and evaluate opportunities to
eliminate, consolidate, or streamline housing
assistance programs.
(B) The Director of the Office of Management and
Budget, in coordination with the Secretary of Housing
and Urban Development, the Secretary of the Treasury,
the Secretary of Agriculture, the Secretary of Veterans
Affairs, the Secretary of Labor, and the Secretary of
the Interior, shall eliminate, consolidate, or
streamline any programs identified under subparagraph
(A) which they find appropriate.
(2) Cost savings.--Any administrative cost savings
resulting from the consolidation, elimination, or streamlining
of housing assistance programs under paragraph (1) shall be
transferred as follows:
(A) 50 percent to the Housing Trust Fund
established under section 1338 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4568).
(B) 50 percent to the General Fund of the Treasury
to be used for deficit reduction.
(3) Report.--The Director of the Office of Management and
Budget shall submit to Congress a report on an annual basis of
any actions taken to streamline similar housing assistance
programs, and the cost savings resulting from such actions.
(c) Rule of Construction.--Nothing in this section shall be
construed to grant the Director of the Office of Management and Budget,
the Secretary of Housing and Urban Development, the Secretary of the
Treasury, the Secretary of Agriculture, the Secretary of Veterans
Affairs, the Secretary of Labor, or the Secretary of the Interior any
additional authority to eliminate, consolidate, or streamline housing
assistance programs that they did not have prior to the date of
enactment of this Act.
SEC. 806. BUREAU OF CONSUMER FINANCIAL PROTECTION REVIEW; GAO REPORT.
(a) Bureau of Consumer Financial Protection Review.--
(1) In general.--Except as provided in paragraph (2), not
later than 3 months after the date of enactment of this Act,
the Bureau of Consumer Financial Protection shall, after
reviewing relevant data and consulting with stakeholders,
including representatives of the manufactured housing industry
and representatives of consumers and homeowners, consider and
review the application of subsections (bb) and (cc) of section
103 of the Truth in Lending Act (15 U.S.C. 1602) to
manufactured housing loans, including--
(A) the annual percentage rate coverage test for
high-cost mortgages;
(B) the total points and fees coverage test for
high-cost mortgages; and
(C) the definition of the term ``mortgage
originator''.
(2) Exception.--The Bureau of Consumer Financial Protection
shall not be required to conduct the review under paragraph (1)
if the Bureau does not receive relevant data relating to the
review that was not previously submitted to the Bureau on or
before January 31, 2013.
(3) Rule of construction.--Nothing in paragraph (1) shall
be construed to require the Bureau of Consumer Financial
Protection to engage in rulemaking, including rulemaking to
modify any rule relating to subsection (bb) or (cc) of section
103 of the Truth in Lending Act (15 U.S.C. 1602).
(b) GAO Report.--Not later than 10 months after the date of
enactment of this Act, the Comptroller General of the United States
shall conduct a study and issue a report to Congress on the
manufactured housing loan market, which shall include an analysis of--
(1) the loan products available in the manufactured housing
loan market and the performance of those products, which shall
include a review of the underwriting standards and portfolios
of creditors that originate manufactured housing loans, such as
depository institutions and finance companies;
(2) the characteristics of borrowers that participate in
the manufactured housing loan market, including--
(A) the creditworthiness of the borrower;
(B) the usage pattern of the borrower; and
(C) the process for evaluating and comparing loan
products prior to purchase; and
(3) the potential impact on access to mortgage credit for
manufactured housing loans if subsections (bb) and (cc) of
section 103 of the Truth in Lending Act (15 U.S.C. 1602) were
applied to manufactured housing loans, including--
(A) the annual percentage rate coverage test for
high-cost mortgages;
(B) the total points and fees coverage test for
high-cost mortgages;
(C) the definition of ``mortgage originator'';
(D) borrower delinquency and default in the
manufactured housing loan market; and
(E) competition in the manufactured housing loan
market.
SEC. 807. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of complying
with the Statutory Pay-As-You-Go Act of 2010, shall be determined by
reference to the latest statement titled ``Budgetary Effects of PAYGO
Legislation'' for this Act, submitted for printing in the Congressional
Record by the Chairman of the Senate Budget Committee, provided that
such statement has been submitted prior to the vote on passage.
Calendar No. 579
113th CONGRESS
2d Session
S. 1217
_______________________________________________________________________
A BILL
To provide secondary mortgage market reform, and for other purposes.
_______________________________________________________________________
September 18, 2014
Reported with an amendment