[House Report 110-767]
[From the U.S. Government Publishing Office]
110th Congress Report
2d Session 110-767
HOUSE OF REPRESENTATIVES
_______________________________________________________________________
PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENT TO THE HOUSE
AMENDMENTS TO THE SENATE AMENDMENT TO THE BILL (H.R. 3221) TO PROVIDE
NEEDED HOUSING REFORM AND FOR OTHER PURPOSES
__________
R E P O R T
of the
COMMITTEE ON RULES
to accompany
H. Res. 1363
July 22, 2008.--Referred to the House Calendar and ordered to be
printed
PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENT TO THE HOUSE
AMENDMENTS TO THE SENATE AMENDMENT TO THE BILL (H.R. 3221) TO PROVIDE
NEEDED HOUSING REFORM AND FOR OTHER PURPOSES
110th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 110-767
======================================================================
PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENT TO THE HOUSE
AMENDMENTS TO THE SENATE AMENDMENT TO THE BILL (H.R. 3221) TO PROVIDE
NEEDED HOUSING REFORM AND FOR OTHER PURPOSES
_______
July 22, 2008.--Referred to the House Calendar and ordered to be
printed
_______
Ms. Castor, from the Committee on Rules,
submitted the following
R E P O R T
[To accompany H. Res. 1363]
The Committee on Rules, having had under consideration
House Resolution 1363, by a nonrecord vote, report the same to
the House with the recommendation that the resolution be
adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for consideration of the Senate
amendment to the House amendments to the Senate amendment to
H.R. 3221, the American Housing Rescue and Foreclosure
Prevention Act of 2008. The resolution makes in order a motion
by the Chairman of the Committee on Financial Services to
concur in the Senate amendment to the House amendment numbered
one with the text of the House amendment printed in this
report. The rule waives all points of order against the motion
and provides that the Senate amendment and the motion shall be
considered as read. The rule provides two hours of debate on
the motion, with 80 minutes equally divided and controlled by
the chairman and ranking minority member of the Committee on
Financial Services and 40 minutes equally divided and
controlled by the chairman and ranking minority member of the
Committee on Ways and Means. The rule provides that upon
adoption of the motion specified in the first section of the
resolution, the House shall be considered to have receded from
any remaining amendments or disagreements. The rule provides
that the Chair may postpone further consideration of the motion
to a time designated by the Speaker.
EXPLANATION OF WAIVERS
The waiver of all points of order against the motion
includes a waiver of clause 10 of rule XXI regarding PAYGO.
COMMITTEE VOTES
The results of each record vote on an amendment or motion
to report, together with the names of those voting for and
against, are printed below:
Rules Committee record vote No. 574
Date: July 22, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Dreier.
Summary of motion: To make in order a sight-unseen
substitute amendment that complies with the rules of the House
if offered by Republican Leader Boehner or his designee.
Results: Defeated 2-8.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Dreier--Yea; Hastings (WA)--Yea; Slaughter--Nay.
Rules Committee record vote No. 575
Date: July 22, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Dreier.
Summary of motion: To make in order a substitute amendment
offered by Rep. Garrett.
Results: Defeated 2-8.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Dreier--Yea; Hastings (WA)--Yea; Slaughter--Nay.
Rules Committee record vote No. 576
Date: July 22, 2008.
Measure: Consideration of Senate amendments to H.R. 3221.
Motion by: Mr. Hastings (WA).
Summary of motion: To make in order amendment #6 offered by
Rep. Price (GA) which would eliminate assistance for the
Community Development Block Grant program.
Results: Defeated 2-8.
Vote by Members: McGovern--Nay; Hastings (FL)--Nay;
Matsui--Nay; Cardoza--Nay; Welch--Nay; Castor--Nay; Arcuri--
Nay; Dreier--Yea; Hastings (WA)--Yea; Slaughter--Nay.
SUMMARY OF THE HOUSE AMENDMENT MADE IN ORDER
The amendment incorporates a number of housing-related
provisions, including GSE reform, FHA refinance, loan
modification, mortgage licensing, FHA modernization,
foreclosure protection for veterans, emergency assistance to
stabilize neighborhoods, housing counseling, mortgage
disclosure improvement, additional veterans housing matters,
and housing preservation. The amendment increases Treasury
authority under existing lines of credit to Freddie Mac, Fannie
Mae, and the Federal Home Loan Banks for the next 18 months,
giving Treasury standby authority to buy stock or debt in those
companies if it determines an emergency exists and the purchase
is necessary to provide market stability, prevent disruptions
to availability of mortgages, protect the taxpayer, and restore
orderly markets. Use of authority will be by mutual agreement
between Treasury and the individual enterprise. To use the
authority, the Secretary must make an emergency determination
that use of the authority is necessary to stabilize markets,
prevent disruptions in mortgage availability, and protect the
taxpayer. The authority includes additional provisions to
protect the taxpayers and provides enhanced oversight of the
enterprises while standby facility is in place, with the
Federal Reserve consulting with the new regulator on issues
concerning the safety and soundness of and risks posed by the
GSEs. It also includes provisions contained in the Housing
Assistance Tax Act of 2008, a revenue neutral bill to provide
tax relief to homebuyers and homeowners. Under this amendment,
middle-class families would be eligible to receive a tax
benefit that is equivalent to an interest-free loan of up to
$7,500 towards the purchase of a first home and existing
homeowners claiming the standard deduction would be allowed an
additional standard deduction for property taxes up to $1,000
for a married couple filing jointly. States would receive a
temporary increase in low-income housing tax credits and $11
billion of additional tax-exempt bond authority to provide low-
interest loans to first-time homebuyers, to build low-income
rental housing and to refinance certain subprime mortgages.
Under the amendment, municipal bonds that are guaranteed by
Federal home loan banks would be eligible for treatment as tax-
exempt bonds. The amendment would also make necessary
improvements to the low-income housing tax credit and other
incentives for low-income rental housing. It would also make
certain reforms to the rules governing real estate investment
trusts. The amendment also contains Gulf Opportunity Zone-
related provisions and economic stimulus provisions. The cost
of these provisions in the amendment is offset with a tax
compliance provision included in the President's Budget and by
delaying the effective date of a tax benefit for multinational
companies that has not yet taken effect. Both offsets have
previously passed the House of Representatives.
TEXT OF THE HOUSE AMENDMENT MADE IN ORDER
In lieu of the matter proposed to be inserted by the
amendment of the Senate, insert the following:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Housing and
Economic Recovery Act of 2008''.
(b) Table of Contents.--The table of contents for this Act is
as follows:
Sec. 1. Short title; table of contents.
DIVISION A--HOUSING FINANCE REFORM
Sec. 1001. Short title.
Sec. 1002. Definitions.
TITLE I--REFORM OF REGULATION OF ENTERPRISES
Subtitle A--Improvement of Safety and Soundness Supervision
Sec. 1101. Establishment of the Federal Housing Finance Agency.
Sec. 1102. Duties and authorities of the Director.
Sec. 1103. Federal Housing Finance Oversight Board.
Sec. 1104. Authority to require reports by regulated entities.
Sec. 1105. Examiners and accountants; authority to contract for reviews
of regulated entities; ombudsman.
Sec. 1106. Assessments.
Sec. 1107. Regulations and orders.
Sec. 1108. Prudential management and operations standards.
Sec. 1109. Review of and authority over enterprise assets and
liabilities.
Sec. 1110. Risk-based capital requirements.
Sec. 1111. Minimum capital levels.
Sec. 1112. Registration under the securities laws.
Sec. 1113. Prohibition and withholding of executive compensation.
Sec. 1114. Limit on golden parachutes.
Sec. 1115. Reporting of fraudulent loans.
Sec. 1116. Inclusion of minorities and women; diversity in Agency
workforce.
Sec. 1117. Temporary authority for purchase of obligations of regulated
entities by Secretary of Treasury.
Sec. 1118. Consultation between the Director of the Federal Housing
Finance Agency and the Board of Governors of the Federal
Reserve System to ensure financial market stability.
Subtitle B--Improvement of Mission Supervision
Sec. 1121. Transfer of program approval and housing goal oversight.
Sec. 1122. Assumption by the Director of certain other HUD
responsibilities.
Sec. 1123. Review of enterprise products.
Sec. 1124. Conforming loan limits.
Sec. 1125. Annual housing report.
Sec. 1126. Public use database.
Sec. 1127. Reporting of mortgage data.
Sec. 1128. Revision of housing goals.
Sec. 1129. Duty to serve underserved markets.
Sec. 1130. Monitoring and enforcing compliance with housing goals.
Sec. 1131. Affordable housing programs.
Sec. 1132. Financial education and counseling.
Sec. 1133. Transfer and rights of certain HUD employees.
Subtitle C--Prompt Corrective Action
Sec. 1141. Critical capital levels.
Sec. 1142. Capital classifications.
Sec. 1143. Supervisory actions applicable to undercapitalized regulated
entities.
Sec. 1144. Supervisory actions applicable to significantly
undercapitalized regulated entities.
Sec. 1145. Authority over critically undercapitalized regulated
entities.
Subtitle D--Enforcement Actions
Sec. 1151. Cease and desist proceedings.
Sec. 1152. Temporary cease and desist proceedings.
Sec. 1153. Removal and prohibition authority.
Sec. 1154. Enforcement and jurisdiction.
Sec. 1155. Civil money penalties.
Sec. 1156. Criminal penalty.
Sec. 1157. Notice after separation from service.
Sec. 1158. Subpoena authority.
Subtitle E--General Provisions
Sec. 1161. Conforming and technical amendments.
Sec. 1162. Presidentially-appointed directors of enterprises.
Sec. 1163. Effective date.
TITLE II--FEDERAL HOME LOAN BANKS
Sec. 1201. Recognition of distinctions between the enterprises and the
Federal Home Loan Banks.
Sec. 1202. Directors.
Sec. 1203. Definitions.
Sec. 1204. Agency oversight of Federal Home Loan Banks.
Sec. 1205. Housing goals.
Sec. 1206. Community development financial institutions.
Sec. 1207. Sharing of information among Federal Home Loan Banks.
Sec. 1208. Exclusion from certain requirements.
Sec. 1209. Voluntary mergers.
Sec. 1210. Authority to reduce districts.
Sec. 1211. Community financial institution members.
Sec. 1212. Public use database; reports to Congress.
Sec. 1213. Semiannual reports.
Sec. 1214. Liquidation or reorganization of a Federal Home Loan Bank.
Sec. 1215. Study and report to Congress on securitization of acquired
member assets.
Sec. 1216. Technical and conforming amendments.
Sec. 1217. Study on Federal Home Loan Bank advances.
Sec. 1218. Federal Home Loan Bank refinancing authority for certain
residential mortgage loans.
TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND
THE FEDERAL HOUSING FINANCE BOARD
Subtitle A--OFHEO
Sec. 1301. Abolishment of OFHEO.
Sec. 1302. Continuation and coordination of certain actions.
Sec. 1303. Transfer and rights of employees of OFHEO.
Sec. 1304. Transfer of property and facilities.
Subtitle B--Federal Housing Finance Board
Sec. 1311. Abolishment of the Federal Housing Finance Board.
Sec. 1312. Continuation and coordination of certain actions.
Sec. 1313. Transfer and rights of employees of the Federal Housing
Finance Board.
Sec. 1314. Transfer of property and facilities.
TITLE IV--HOPE FOR HOMEOWNERS
Sec. 1401. Short title.
Sec. 1402. Establishment of HOPE for Homeowners Program.
Sec. 1403. Fiduciary duty of servicers of pooled residential mortgage
loans.
Sec. 1404. Revised standards for FHA appraisers.
TITLE V--S.A.F.E. MORTGAGE LICENSING ACT
Sec. 1501. Short title.
Sec. 1502. Purposes and methods for establishing a mortgage licensing
system and registry.
Sec. 1503. Definitions.
Sec. 1504. License or registration required.
Sec. 1505. State license and registration application and issuance.
Sec. 1506. Standards for State license renewal.
Sec. 1507. System of registration administration by Federal agencies.
Sec. 1508. Secretary of Housing and Urban Development backup authority
to establish a loan originator licensing system.
Sec. 1509. Backup authority to establish a nationwide mortgage licensing
and registry system.
Sec. 1510. Fees.
Sec. 1511. Background checks of loan originators.
Sec. 1512. Confidentiality of information.
Sec. 1513. Liability provisions.
Sec. 1514. Enforcement under HUD backup licensing system.
Sec. 1515. State examination authority.
Sec. 1516. Reports and recommendations to Congress.
Sec. 1517. Study and reports on defaults and foreclosures.
TITLE VI--MISCELLANEOUS
Sec. 1601. Study and reports on guarantee fees.
Sec. 1602. Study and report on default risk evaluation.
Sec. 1603. Conversion of HUD contracts.
Sec. 1604. Bridge depository institutions.
Sec. 1605. Sense of the Senate.
DIVISION B--FORECLOSURE PREVENTION
Sec. 2001. Short title.
Sec. 2002. Emergency designation.
TITLE I--FHA MODERNIZATION ACT OF 2008
Sec. 2101. Short title.
Subtitle A--Building American Homeownership
Sec. 2111. Short title.
Sec. 2112. Maximum principal loan obligation.
Sec. 2113. Cash investment requirement and prohibition of seller-funded
down payment assistance.
Sec. 2114. Mortgage insurance premiums.
Sec. 2115. Rehabilitation loans.
Sec. 2116. Discretionary action.
Sec. 2117. Insurance of condominiums.
Sec. 2118. Mutual Mortgage Insurance Fund.
Sec. 2119. Hawaiian home lands and Indian reservations.
Sec. 2120. Conforming and technical amendments.
Sec. 2121. Insurance of mortgages.
Sec. 2122. Home equity conversion mortgages.
Sec. 2123. Energy efficient mortgages program.
Sec. 2124. Pilot program for automated process for borrowers without
sufficient credit history.
Sec. 2125. Homeownership preservation.
Sec. 2126. Use of FHA savings for improvements in FHA technologies,
procedures, processes, program performance, staffing, and
salaries.
Sec. 2127. Post-purchase housing counseling eligibility improvements.
Sec. 2128. Pre-purchase homeownership counseling demonstration.
Sec. 2129. Fraud prevention.
Sec. 2130. Limitation on mortgage insurance premium increases.
Sec. 2131. Savings provision.
Sec. 2132. Implementation.
Sec. 2133. Moratorium on implementation of risk-based premiums.
Subtitle B--Manufactured Housing Loan Modernization
Sec. 2141. Short title.
Sec. 2142. Purposes.
Sec. 2143. Exception to limitation on financial institution portfolio.
Sec. 2144. Insurance benefits.
Sec. 2145. Maximum loan limits.
Sec. 2146. Insurance premiums.
Sec. 2147. Technical corrections.
Sec. 2148. Revision of underwriting criteria.
Sec. 2149. Prohibition against kickbacks and unearned fees.
Sec. 2150. Leasehold requirements.
TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS
Sec. 2201. Temporary increase in maximum loan guaranty amount for
certain housing loans guaranteed by the Secretary of Veterans
Affairs.
Sec. 2202. Counseling on mortgage foreclosures for members of the Armed
Forces returning from service abroad.
Sec. 2203. Enhancement of protections for servicemembers relating to
mortgages and mortgage foreclosures.
TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND
FORECLOSED HOMES
Sec. 2301. Emergency assistance for the redevelopment of abandoned and
foreclosed homes.
Sec. 2302. Nationwide distribution of resources.
Sec. 2303. Limitation on use of funds with respect to eminent domain.
Sec. 2304. Limitation on distribution of funds.
Sec. 2305. Counseling intermediaries.
TITLE IV--HOUSING COUNSELING RESOURCES
Sec. 2401. Housing counseling resources.
Sec. 2402. Credit counseling.
TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT
Sec. 2501. Short title.
Sec. 2502. Enhanced mortgage loan disclosures.
Sec. 2503. Community Development Investment Authority for depository
institutions.
TITLE VI--VETERANS HOUSING MATTERS
Sec. 2601. Home improvements and structural alterations for totally
disabled members of the Armed Forces before discharge or
release from the Armed Forces.
Sec. 2602. Eligibility for specially adapted housing benefits and
assistance for members of the Armed Forces with service-
connected disabilities and individuals residing outside the
United States.
Sec. 2603. Specially adapted housing assistance for individuals with
severe burn injuries.
Sec. 2604. Extension of assistance for individuals residing temporarily
in housing owned by a family member.
Sec. 2605. Increase in specially adapted housing benefits for disabled
veterans.
Sec. 2606. Report on specially adapted housing for disabled individuals.
Sec. 2607. Report on specially adapted housing assistance for
individuals who reside in housing owned by a family member on
permanent basis.
Sec. 2608. Definition of annual income for purposes of section 8 and
other public housing programs.
Sec. 2609. Payment of transportation of baggage and household effects
for members of the Armed Forces who relocate due to
foreclosure of leased housing.
TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT
Sec. 2701. Short title.
Sec. 2702. Public housing agency plans for certain qualified public
housing agencies.
TITLE VIII--HOUSING PRESERVATION
Subtitle A--Preservation Under Federal Housing Programs
Sec. 2801. Clarification of disposition of certain properties.
Sec. 2802. Eligibility of certain projects for enhanced voucher
assistance.
Sec. 2803. Transfer of certain rental assistance contracts.
Sec. 2804. Public housing disaster relief.
Sec. 2805. Preservation of certain affordable housing.
Subtitle B--Coordination of Federal Housing Programs and Tax Incentives
for Housing
Sec. 2831. Short title.
Sec. 2832. Approvals by Department of Housing and Urban Development.
Sec. 2833. Project approvals by rural housing service.
Sec. 2834. Use of FHA loans with housing tax credits.
Sec. 2835. Other HUD programs.
TITLE IX--MISCELLANEOUS
Sec. 2901. Homeless assistance.
Sec. 2902. Increasing access and understanding of energy efficient
mortgages.
DIVISION C--TAX-RELATED PROVISIONS
Sec. 3000. Short title; etc.
TITLE I--HOUSING TAX INCENTIVES
Subtitle A--Multi-Family Housing
Part I--Low-Income Housing Tax Credit
Sec. 3001. Temporary increase in volume cap for low-income housing tax
credit.
Sec. 3002. Determination of credit rate.
Sec. 3003. Modifications to definition of eligible basis.
Sec. 3004. Other simplification and reform of low-income housing tax
incentives.
Sec. 3005. Treatment of military basic pay.
Part II--Modifications to Tax-Exempt Housing Bond Rules
Sec. 3007. Recycling of tax-exempt debt for financing residential rental
projects.
Sec. 3008. Coordination of certain rules applicable to low-income
housing credit and qualified residential rental project exempt
facility bonds.
Part III--Reforms Related to the Low-Income Housing Credit and Tax-
Exempt Housing Bonds
Sec. 3009. Hold harmless for reductions in area median gross income.
Sec. 3010. Exception to annual current income determination requirement
where determination not relevant.
Subtitle B--Single Family Housing
Sec. 3011. First-time homebuyer credit.
Sec. 3012. Additional standard deduction for real property taxes for
nonitemizers.
Subtitle C--General Provisions
Sec. 3021. Temporary liberalization of tax-exempt housing bond rules.
Sec. 3022. Repeal of alternative minimum tax limitations on tax-exempt
housing bonds, low-income housing tax credit, and
rehabilitation credit.
Sec. 3023. Bonds guaranteed by Federal home loan banks eligible for
treatment as tax-exempt bonds.
Sec. 3024. Modification of rules pertaining to FIRPTA nonforeign
affidavits.
Sec. 3025. Modification of definition of tax-exempt use property for
purposes of the rehabilitation credit.
Sec. 3026. Extension of special rule for mortgage revenue bonds for
residences located in disaster areas.
Sec. 3027. Transfer of funds appropriated to carry out 2008 recovery
rebates for individuals.
TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS
Subtitle A--Foreign Currency and Other Qualified Activities
Sec. 3031. Revisions to REIT income tests.
Sec. 3032. Revisions to REIT asset tests.
Sec. 3033. Conforming foreign currency revisions.
Subtitle B--Taxable REIT Subsidiaries
Sec. 3041. Conforming taxable REIT subsidiary asset test.
Subtitle C--Dealer Sales
Sec. 3051. Holding period under safe harbor.
Sec. 3052. Determining value of sales under safe harbor.
Subtitle D--Health Care REITs
Sec. 3061. Conformity for health care facilities.
Subtitle E--Effective Dates
Sec. 3071. Effective dates.
TITLE III--REVENUE PROVISIONS
Subtitle A--General Provisions
Sec. 3081. Election to accelerate the AMT and research credits in lieu
of bonus depreciation.
Sec. 3082. Certain GO Zone incentives.
Sec. 3083. Increase in statutory limit on the public debt.
Subtitle B--Revenue Offsets
Sec. 3091. Returns relating to payments made in settlement of payment
card and third party network transactions.
Sec. 3092. Gain from sale of principal residence allocated to
nonqualified use not excluded from income.
Sec. 3093. Delay in application of worldwide allocation of interest.
Sec. 3094. Time for payment of corporate estimated taxes.
DIVISION A--HOUSING FINANCE REFORM
SEC. 1001. SHORT TITLE.
This division may be cited as the ``Federal Housing Finance
Regulatory Reform Act of 2008''.
SEC. 1002. DEFINITIONS.
(a) Federal Safety and Soundness Act Definitions.--Section
1303 of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4502) is amended--
(1) in each of paragraphs (8), (9), (10), and (19),
by striking ``Secretary'' each place that term appears
and inserting ``Director'';
(2) by redesignating paragraphs (16) through (19) as
paragraphs (21) through (24), respectively;
(3) by striking paragraphs (13) through (15) and
inserting the following:
``(19) Office of finance.--The term `Office of
Finance' means the Office of Finance of the Federal
Home Loan Bank System (or any successor thereto).
``(20) 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; and
``(C) any Federal Home Loan Bank.'';
(4) by redesignating paragraphs (11) and (12) as
paragraphs (17) and (18), respectively;
(5) by redesignating paragraph (7) as paragraph (12);
(6) by redesignating paragraphs (8) through (10) as
paragraphs (14) through (16), respectively;
(7) in paragraph (5)--
(A) by striking ``(5)'' and inserting
``(9)''; and
(B) by striking ``Office of Federal Housing
Enterprise Oversight of the Department of
Housing and Urban Development'' and inserting
``Federal Housing Finance Agency'';
(8) by redesignating paragraph (6) as paragraph (10);
(9) by redesignating paragraphs (2) through (4) as
paragraphs (5) through (7), respectively;
(10) by inserting after paragraph (7), as
redesignated, the following:
``(8) Default; in danger of default.--
``(A) Default.--The term `default' means,
with respect to a regulated entity, any
adjudication or other official determination by
any court of competent jurisdiction, or the
Agency, pursuant to which a conservator,
receiver, limited-life regulated entity, or
legal custodian is appointed for a regulated
entity.
``(B) In danger of default.--The term `in
danger of default' means a regulated entity
with respect to which, in the opinion of the
Agency--
``(i) the regulated entity is not
likely to be able to pay the
obligations of the regulated entity in
the normal course of business; or
``(ii) the regulated entity--
``(I) has incurred or is
likely to incur losses that
will deplete all or
substantially all of its
capital; and
``(II) there is no reasonable
prospect that the capital of
the regulated entity will be
replenished.'';
(11) by inserting after paragraph (1) the following:
``(2) Agency.--The term `Agency' means the Federal
Housing Finance Agency established under section 1311.
``(3) Authorizing statutes.--The term `authorizing
statutes' means--
``(A) the Federal National Mortgage
Association Charter Act;
``(B) the Federal Home Loan Mortgage
Corporation Act; and
``(C) the Federal Home Loan Bank Act.
``(4) Board.--The term `Board' means the Federal
Housing Finance Oversight Board established under
section 1313A.'';
(12) by inserting after paragraph (10), as
redesignated by this section, the following:
``(11) Entity-affiliated party.--The term `entity-
affiliated party' means--
``(A) any director, officer, employee, or
controlling stockholder of, or agent for, a
regulated entity;
``(B) any shareholder, affiliate, consultant,
or joint venture partner of a regulated entity,
and any other person, as determined by the
Director (by regulation or on a case-by-case
basis) that participates in the conduct of the
affairs of a regulated entity, provided that a
member of a Federal Home Loan Bank shall not be
deemed to have participated in the affairs of
that Bank solely by virtue of being a
shareholder of, and obtaining advances from,
that Bank;
``(C) any independent contractor for a
regulated entity (including any attorney,
appraiser, or accountant), if--
``(i) the independent contractor
knowingly or recklessly participates
in--
``(I) any violation of any
law or regulation;
``(II) any breach of
fiduciary duty; or
``(III) any unsafe or unsound
practice; and
``(ii) such violation, breach, or
practice caused, or is likely to cause,
more than a minimal financial loss to,
or a significant adverse effect on, the
regulated entity;
``(D) any not-for-profit corporation that
receives its principal funding, on an ongoing
basis, from any regulated entity; and
``(E) the Office of Finance.'';
(13) by inserting after paragraph (12), as
redesignated by this section, the following:
``(13) Limited-life regulated entity.--The term
`limited-life regulated entity' means an entity
established by the Agency under section 1367(i) with
respect to a Federal Home Loan Bank in default or in
danger of default or with respect to an enterprise in
default or in danger of default.''; and
(14) by adding at the end the following:
``(25) Violation.--The term `violation' includes any
action (alone or in combination with another or others)
for or toward causing, bringing about, participating
in, counseling, or aiding or abetting a violation.''.
(b) References in This Act.--As used in this Act, unless
otherwise specified--
(1) the term ``Agency'' means the Federal Housing
Finance Agency;
(2) the term ``Director'' means the Director of the
Agency; and
(3) the terms ``enterprise'', ``regulated entity'',
and ``authorizing statutes'' have the same meanings as
in section 1303 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992, as amended
by this Act.
TITLE I--REFORM OF REGULATION OF ENTERPRISES
Subtitle A--Improvement of Safety and Soundness Supervision
SEC. 1101. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.
The Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by
striking sections 1311 and 1312 and inserting the following:
``SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING FINANCE AGENCY.
``(a) Establishment.--There is established the Federal
Housing Finance Agency, which shall be an independent agency of
the Federal Government.
``(b) General Supervisory and Regulatory Authority.--
``(1) In general.--Each regulated entity shall, to
the extent provided in this title, be subject to the
supervision and regulation of the Agency.
``(2) Authority over fannie mae, freddie mac, the
federal home loan banks, and the office of finance.--
The Director shall have general regulatory authority
over each regulated entity and the Office of Finance,
and shall exercise such general regulatory authority,
including such duties and authorities set forth under
section 1313, to ensure that the purposes of this Act,
the authorizing statutes, and any other applicable law
are carried out.
``(c) Savings Provision.--The authority of the Director to
take actions under subtitles B and C shall not in any way limit
the general supervisory and regulatory authority granted to the
Director under subsection (b).
``SEC. 1312. DIRECTOR.
``(a) Establishment of Position.--There is established the
position of the Director of the Agency, who shall be the head
of the Agency.
``(b) Appointment; Term.--
``(1) Appointment.--The Director 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, have a demonstrated understanding of
financial management or oversight, and have a
demonstrated understanding of capital markets,
including the mortgage securities markets and housing
finance.
``(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.
``(3) Vacancy.--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.
``(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.
``(5) Transitional provision.--Notwithstanding
paragraphs (1) and (2), during the period beginning on
the effective date of the Federal Housing Finance
Regulatory Reform Act of 2008, and ending on the date
on which the Director is appointed and confirmed, the
person serving as the Director of the Office of Federal
Housing Enterprise Oversight of the Department of
Housing and Urban Development on that effective date
shall act for all purposes as, and with the full powers
of, the Director.
``(c) Deputy Director of the Division of Enterprise
Regulation.--
``(1) In general.--The Agency shall have a Deputy
Director of the Division of Enterprise Regulation, who
shall be designated by the Director from among
individuals who are citizens of the United States, have
a demonstrated understanding of financial management or
oversight, and have a demonstrated understanding of
mortgage securities markets and housing finance.
``(2) Functions.--The Deputy Director of the Division
of Enterprise Regulation shall have such functions,
powers, and duties with respect to the oversight of the
enterprises as the Director shall prescribe.
``(d) Deputy Director Of The Division Of Federal Home Loan
Bank Regulation.--
``(1) In general.--The Agency shall have a Deputy
Director of the Division of Federal Home Loan Bank
Regulation, who shall be designated by the Director
from among individuals who are citizens of the United
States, have a demonstrated understanding of financial
management or oversight, and have a demonstrated
understanding of the Federal Home Loan Bank System and
housing finance.
``(2) Functions.--The Deputy Director of the Division
of Federal Home Loan Bank Regulation shall have such
functions, powers, and duties with respect to the
oversight of the Federal Home Loan Banks as the
Director shall prescribe.
``(e) Deputy Director for Housing Mission and Goals.--
``(1) In general.--The Agency shall have a Deputy
Director for Housing Mission and Goals, who shall be
designated by the Director from among individuals who
are citizens of the United States, and have a
demonstrated understanding of the housing markets and
housing finance.
``(2) Functions.--The Deputy Director for Housing
Mission and Goals shall have such functions, powers,
and duties with respect to the oversight of the housing
mission and goals of the enterprises, and with respect
to oversight of the housing finance and community and
economic development mission of the Federal Home Loan
Banks, as the Director shall prescribe.
``(3) Considerations.--In exercising such functions,
powers, and duties, the Deputy Director for Housing
Mission and Goals shall consider the differences
between the enterprises and the Federal Home Loan
Banks, including those described in section 1313(d).
``(f) Acting Director.--In the event of the death,
resignation, sickness, or absence of the Director, the
President shall designate either the Deputy Director of the
Division of Enterprise Regulation, the Deputy Director of the
Division of Federal Home Loan Bank Regulation, or the Deputy
Director for Housing Mission and Goals, to serve as acting
Director until the return of the Director, or the appointment
of a successor pursuant to subsection (b).
``(g) Limitations.--The Director and each of the Deputy
Directors may not--
``(1) have any direct or indirect financial interest
in any regulated entity or entity-affiliated party;
``(2) hold any office, position, or employment in any
regulated entity or entity-affiliated party; or
``(3) have served as an executive officer or director
of any regulated entity or entity-affiliated party at
any time during the 3-year period preceding the date of
appointment or designation of such individual as
Director or Deputy Director, as applicable.''.
SEC. 1102. DUTIES AND AUTHORITIES OF THE DIRECTOR.
(a) In General.--Section 1313 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4513) is amended to read as follows:
``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.
``(a) Duties.--
``(1) Principal duties.--The principal duties of the
Director shall be--
``(A) to oversee the prudential operations of
each regulated entity; and
``(B) to ensure that--
``(i) each regulated entity operates
in a safe and sound manner, including
maintenance of adequate capital and
internal controls;
``(ii) the operations and activities
of each regulated entity foster liquid,
efficient, competitive, and resilient
national housing finance markets
(including activities relating to
mortgages on housing for low- and
moderate-income families involving a
reasonable economic return that may be
less than the return earned on other
activities);
``(iii) each regulated entity
complies with this title and the rules,
regulations, guidelines, and orders
issued under this title and the
authorizing statutes;
``(iv) each regulated entity carries
out its statutory mission only through
activities that are authorized under
and consistent with this title and the
authorizing statutes; and
``(v) the activities of each
regulated entity and the manner in
which such regulated entity is operated
are consistent with the public
interest.
``(2) Scope of authority.--The authority of the
Director shall include the authority--
``(A) to review and, if warranted based on
the principal duties described in paragraph
(1), reject any acquisition or transfer of a
controlling interest in a regulated entity; and
``(B) to exercise such incidental powers as
may be necessary or appropriate to fulfill the
duties and responsibilities of the Director in
the supervision and regulation of each
regulated entity.
``(b) Delegation of Authority.--The Director may delegate to
officers and employees of the Agency any of the functions,
powers, or duties of the Director, as the Director considers
appropriate.
``(c) Litigation Authority.--
``(1) In general.--In enforcing any provision of this
title, any regulation or order prescribed under this
title, or any other provision of law, rule, regulation,
or order, or in any other action, suit, or proceeding
to which the Director is a party or in which the
Director is interested, and in the administration of
conservatorships and receiverships, the Director may
act in the Director's own name and through the
Director's own attorneys.
``(2) Subject to suit.--Except as otherwise provided
by law, the Director shall be subject to suit (other
than suits on claims for money damages) by a regulated
entity with respect to any matter under this title or
any other applicable provision of law, rule, order, or
regulation under this title, in the United States
district court for the judicial district in which the
regulated entity has its principal place of business,
or in the United States District Court for the District
of Columbia, and the Director may be served with
process in the manner prescribed by the Federal Rules
of Civil Procedure.''.
(b) Independence in Congressional Testimony and
Recommendations.--Section 111 of Public Law 93-495 (12 U.S.C.
250) is amended by striking ``the Federal Housing Finance
Board'' and inserting ``the Director of the Federal Housing
Finance Agency''.
SEC. 1103. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.
(a) In General.--The Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is
amended by inserting after section 1313 the following:
``SEC. 1313A. FEDERAL HOUSING FINANCE OVERSIGHT BOARD.
``(a) In General.--There is established the Federal Housing
Finance Oversight Board, which shall advise the Director with
respect to overall strategies and policies in carrying out the
duties of the Director under this title.
``(b) Limitations.--The Board may not exercise any executive
authority, and the Director may not delegate to the Board any
of the functions, powers, or duties of the Director.
``(c) Composition.--The Board shall be comprised of 4
members, of whom--
``(1) 1 member shall be the Secretary of the
Treasury;
``(2) 1 member shall be the Secretary of Housing and
Urban Development;
``(3) 1 member shall be the Chairman of the
Securities and Exchange Commission; and
``(4) 1 member shall be the Director, who shall serve
as the Chairperson of the Board.
``(d) Meetings.--
``(1) In general.--The Board shall meet upon notice
by the Director, but in no event shall the Board meet
less frequently than once every 3 months.
``(2) Special meetings.--Either the Secretary of the
Treasury, the Secretary of Housing and Urban
Development, or the Chairman of the Securities and
Exchange Commission may, upon giving written notice to
the Director, require a special meeting of the Board.
``(e) Testimony.--On an annual basis, the Board shall testify
before Congress regarding--
``(1) the safety and soundness of the regulated
entities;
``(2) any material deficiencies in the conduct of the
operations of the regulated entities;
``(3) the overall operational status of the regulated
entities;
``(4) an evaluation of the performance of the
regulated entities in carrying out their respective
missions;
``(5) operations, resources, and performance of the
Agency; and
``(6) such other matters relating to the Agency and
its fulfillment of its mission, as the Board determines
appropriate.''.
(b) Annual Report of the Director.--Section 1319B(a) of the
Federal Housing Enterprises Financial Safety and Soundness Act
of 1992 (12 U.S.C. 4521(a)) is amended--
(1) by striking ``enterprise'' each place that term
appears and inserting ``regulated entity'';
(2) by striking ``enterprises'' each place that term
appears and inserting ``regulated entities'';
(3) in paragraph (3), by striking ``; and'' and
inserting a semicolon;
(4) in paragraph (4), by striking ``1994.'' and
inserting ``1994; and''; and
(5) by adding at the end the following:
``(5) the assessment of the Board or any of its
members with respect to--
``(A) the safety and soundness of the
regulated entities;
``(B) any material deficiencies in the
conduct of the operations of the regulated
entities;
``(C) the overall operational status of the
regulated entities; and
``(D) an evaluation of the performance of the
regulated entities in carrying out their
respective missions;
``(6) operations, resources, and performance of the
Agency; and
``(7) such other matters relating to the Agency and
the fulfillment of its mission.''.
SEC. 1104. AUTHORITY TO REQUIRE REPORTS BY REGULATED ENTITIES.
(a) In General.--Section 1314 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4514) is amended--
(1) in the section heading, by striking
``ENTERPRISES'' and inserting ``REGULATED ENTITIES'';
(2) by striking ``an enterprise'' each place that
term appears and inserting ``a regulated entity'';
(3) by striking ``the enterprise'' and inserting
``the regulated entity'';
(4) in subsection (a)--
(A) by striking the subsection heading and
all that follows through ``and operations'' in
paragraph (1) and inserting the following:
``(a) Regular and Special Reports.--
``(1) Regular reports.--The Director may require, by
general or specific orders, a regulated entity to
submit regular reports, including financial statements
determined on a fair value basis, on the condition
(including financial condition), management,
activities, or operations of the regulated entity, as
the Director considers appropriate''; and
(B) in paragraph (2)--
(i) by inserting ``, by general or
specific orders,'' after ``may also
require''; and
(ii) by striking ``whenever'' and
inserting ``on any of the topics
specified in paragraph (1) or any other
relevant topics, if''; and
(5) by adding at the end the following:
``(c) Penalties for Failure To Make Reports.--
``(1) Violations.--It shall be a violation of this
section for any regulated entity--
``(A) to fail to make, transmit, or publish
any report or obtain any information required
by the Director under this section, section
309(k) of the Federal National Mortgage
Association Charter Act, section 307(c) of the
Federal Home Loan Mortgage Corporation Act, or
section 20 of the Federal Home Loan Bank Act,
within the period of time specified in such
provision of law or otherwise by the Director;
or
``(B) to submit or publish any false or
misleading report or information under this
section.
``(2) Penalties.--
``(A) First tier.--
``(i) In general.--A violation
described in paragraph (1) shall be
subject to a penalty of not more than
$2,000 for each day during which such
violation continues, in any case in
which--
``(I) the subject regulated
entity maintains procedures
reasonably adapted to avoid any
inadvertent error and the
violation was unintentional and
a result of such an error; or
``(II) the violation was an
inadvertent transmittal or
publication of any report which
was minimally late.
``(ii) Burden of proof.--For purposes
of this subparagraph, the regulated
entity shall have the burden of proving
that the error was inadvertent or that
a report was inadvertently transmitted
or published late.
``(B) Second tier.--A violation described in
paragraph (1) shall be subject to a penalty of
not more than $20,000 for each day during which
such violation continues or such false or
misleading information is not corrected, in any
case that is not addressed in subparagraph (A)
or (C).
``(C) Third tier.--A violation described in
paragraph (1) shall be subject to a penalty of
not more than $1,000,000 per day for each day
during which such violation continues or such
false or misleading information is not
corrected, in any case in which the subject
regulated entity committed such violation
knowingly or with reckless disregard for the
accuracy of any such information or report.
``(3) Assessments.--Any penalty imposed under this
subsection shall be in lieu of a penalty under section
1376, but shall be assessed and collected by the
Director in the manner provided in section 1376 for
penalties imposed under that section, and any such
assessment (including the determination of the amount
of the penalty) shall be otherwise subject to the
provisions of section 1376.
``(4) Hearing.--A regulated entity against which a
penalty is assessed under this section shall be
afforded an agency hearing if the regulated entity
submits a request for a hearing not later than 20 days
after the date of the issuance of the notice of
assessment. Section 1374 shall apply to any such
proceedings.''.
(b) Conforming Amendment.--The Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et
seq.) is amended by striking sections 1327 and 1328.
SEC. 1105. EXAMINERS AND ACCOUNTANTS; AUTHORITY TO CONTRACT FOR REVIEWS
OF REGULATED ENTITIES; OMBUDSMAN.
(a) In General.--Section 1317 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4517) is amended--
(1) in subsection (a), by striking ``enterprise''
each place that term appears and inserting ``regulated
entity'';
(2) in subsection (b)--
(A) by inserting ``of a regulated entity''
after ``under this section''; and
(B) by striking ``to determine the condition
of an enterprise for the purpose of ensuring
its financial safety and soundness'' and
inserting ``or appropriate'';
(3) in subsection (c), in the second sentence, by
inserting before the period ``to conduct examinations
under this section'';
(4) by redesignating subsections (d) through (f) as
subsections (e) through (g), respectively; and
(5) by inserting after subsection (c) the following:
``(d) Inspector General.--There shall be within the Agency an
Inspector General, who shall be appointed in accordance with
section 3(a) of the Inspector General Act of 1978.''.
(b) Direct Hire Authority To Hire Accountants, Economists,
and Examiners.--Section 1317 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4517) is
amended by adding at the end the following:
``(h) Appointment of Accountants, Economists, and
Examiners.--
``(1) Applicability.--This section shall apply with
respect to any position of examiner, accountant,
economist, and specialist in financial markets and in
technology at the Agency, with respect to supervision
and regulation of the regulated entities, that is in
the competitive service.
``(2) Appointment authority.--The Director may
appoint candidates to any position described in
paragraph (1)--
``(A) in accordance with the statutes, rules,
and regulations governing appointments in the
excepted service; and
``(B) notwithstanding any statutes, rules,
and regulations governing appointments in the
competitive service.''.
(c) Amendments to Inspector General Act.--Section 11 of the
Inspector General Act of 1978 (5 U.S.C. App.) is amended--
(1) in paragraph (1), by inserting ``; the Director
of the Federal Housing Finance Agency'' after ``Social
Security Administration''; and
(2) in paragraph (2), by inserting ``, the Federal
Housing Finance Agency'' after ``Social Security
Administration''.
(d) Authority To Contract for Reviews of Regulated
Entities.--Section 1319 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4519) is
amended--
(1) in the section heading, by striking ``ENTERPRISES
BY RATING ORGANIZATION'' and inserting ``REGULATED
ENTITIES''; and
(2) by striking ``enterprises'' and inserting
``regulated entities''.
(e) Office of the Ombudsman.--Section 1317 of the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4517) is amended by adding at the end the following:
``(i) Ombudsman.--The Director shall establish, by
regulation, an Office of the Ombudsman within the Agency, which
shall be responsible for considering complaints and appeals,
from any regulated entity and any person that has a business
relationship with a regulated entity, regarding any matter
relating to the regulation and supervision of such regulated
entity by the Agency. The regulation issued by the Director
under this subsection shall specify the authority and duties of
the Office of the Ombudsman.''.
SEC. 1106. ASSESSMENTS.
Section 1316 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4516) is amended--
(1) by striking subsection (a) and inserting the
following:
``(a) Annual Assessments.--The Director shall establish and
collect from the regulated entities annual assessments in an
amount not exceeding the amount sufficient to provide for
reasonable costs (including administrative costs) and expenses
of the Agency, including--
``(1) the expenses of any examinations under section
1317 of this Act and under section 20 of the Federal
Home Loan Bank Act;
``(2) the expenses of obtaining any reviews and
credit assessments under section 1319;
``(3) such amounts in excess of actual expenses for
any given year as deemed necessary by the Director to
maintain a working capital fund in accordance with
subsection (e); and
``(4) the windup of the affairs of the Office of
Federal Housing Enterprise Oversight and the Federal
Housing Finance Board under title III of the Federal
Housing Finance Regulatory Reform Act of 2008.'';
(2) in subsection (b)--
(A) by realigning the margins of paragraph
(2) two ems from the left, so as to align the
left margin of such paragraph with the left
margins of paragraph (1);
(B) by redesignating paragraphs (2) and (3)
as paragraphs (3) and (4), respectively; and
(C) by inserting after paragraph (1) the
following:
``(2) Separate treatment of federal home loan bank
and enterprise assessments.--Assessments collected from
the enterprises shall not exceed the amounts sufficient
to provide for the costs and expenses described in
subsection (a) relating to the enterprises. Assessments
collected from the Federal Home Loan Banks shall not
exceed the amounts sufficient to provide for the costs
and expenses described in subsection (a) relating to
the Federal Home Loan Banks.'';
(3) by striking subsection (c) and inserting the
following:
``(c) Increased Costs of Regulation.--
``(1) Increase for inadequate capitalization.--The
semiannual payments made pursuant to subsection (b) by
any regulated entity that is not classified (for
purposes of subtitle B) as adequately capitalized may
be increased, as necessary, in the discretion of the
Director to pay additional estimated costs of
regulation of the regulated entity.
``(2) Adjustment for enforcement activities.--The
Director may adjust the amounts of any semiannual
payments for an assessment under subsection (a) that
are to be paid pursuant to subsection (b) by a
regulated entity, as necessary in the discretion of the
Director, to ensure that the costs of enforcement
activities under this Act for a regulated entity are
borne only by such regulated entity.
``(3) Additional assessment for deficiencies.--If at
any time, as a result of increased costs of regulation
of a regulated entity that is not classified (for
purposes of subtitle B) as adequately capitalized or as
the result of supervisory or enforcement activities
under this Act for a regulated entity, the amount
available from any semiannual payment made by such
regulated entity pursuant to subsection (b) is
insufficient to cover the costs of the Agency with
respect to such entity, the Director may make and
collect from such regulated entity an immediate
assessment to cover the amount of such deficiency for
the semiannual period. If, at the end of any semiannual
period during which such an assessment is made, any
amount remains from such assessment, such remaining
amount shall be deducted from the assessment for such
regulated entity for the following semiannual
period.'';
(4) in subsection (d), by striking ``If'' and
inserting ``Except with respect to amounts collected
pursuant to subsection (a)(3), if''; and
(5) by striking subsections (e) through (g) and
inserting the following:
``(e) Working Capital Fund.--At the end of each year for
which an assessment under this section is made, the Director
shall remit to each regulated entity any amount of assessment
collected from such regulated entity that is attributable to
subsection (a)(3) and is in excess of the amount the Director
deems necessary to maintain a working capital fund.
``(f) Treatment of Assessments.--
``(1) Deposit.--Amounts received by the Director from
assessments under this section may be deposited by the
Director 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.
``(2) Not government funds.--The amounts received by
the Director from any assessment under this section
shall not be construed to be Government or public funds
or appropriated money.
``(3) No apportionment of funds.--Notwithstanding any
other provision of law, the amounts received by the
Director from any assessment under this section shall
not be subject to apportionment for the purpose of
chapter 15 of title 31, United States Code, or under
any other authority.
``(4) Use of funds.--The Director may use any amounts
received by the Director from assessments under this
section for compensation of the Director and other
employees of the Agency and for all other expenses of
the Director and the Agency.
``(5) Availability of oversight fund amounts.--
Notwithstanding any other provision of law, any amounts
remaining in the Federal Housing Enterprises Oversight
Fund established under this section (as in effect
before the effective date of the Federal Housing
Finance Regulatory Reform Act of 2008, and any amounts
remaining from assessments on the Federal Home Loan
Banks pursuant to section 18(b) of the Federal Home
Loan Bank Act (12 U.S.C. 1438(b)), shall, upon such
effective date, be treated for purposes of this
subsection as amounts received from assessments under
this section.
``(6) Treasury investments.--
``(A) Authority.--The Director may request
the Secretary of the Treasury to invest such
portions of amounts received by the Director
from assessments paid under this section that,
in the Director's discretion, are not required
to meet the current working needs of the
Agency.
``(B) Government obligations.--Pursuant to a
request under subparagraph (A), the Secretary
of the Treasury shall invest such amounts in
Government obligations guaranteed as to
principal and interest by the United States
with maturities suitable to the needs of the
Agency and 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.
``(g) Budget and Financial Management.--
``(1) Financial operating plans and forecasts.--The
Director shall provide to the Director of the Office of
Management and Budget copies of the Director's
financial operating plans and forecasts, as prepared by
the Director in the ordinary course of the Agency's
operations, and copies of the quarterly reports of the
Agency's financial condition and results of operations,
as prepared by the Director in the ordinary course of
the Agency's operations.
``(2) Financial statements.--The Agency shall prepare
annually a statement of--
``(A) assets and liabilities and surplus or
deficit;
``(B) income and expenses; and
``(C) sources and application of funds.
``(3) Financial management systems.--The Agency shall
implement and maintain financial management systems
that--
``(A) comply substantially with Federal
financial management systems requirements and
applicable Federal accounting standards; and
``(B) use a general ledger system that
accounts for activity at the transaction level.
``(4) Assertion of internal controls.--The Director
shall provide to the Comptroller General of the United
States an assertion as to the effectiveness of the
internal controls that apply to financial reporting by
the Agency, using the standards established in section
3512(c) of title 31, United States Code.
``(5) Rule of construction.--This subsection may not
be construed as implying any obligation on the part of
the Director to consult with or obtain the consent or
approval of the Director of the Office of Management
and Budget with respect to any report, plan, forecast,
or other information referred to in paragraph (1) or
any jurisdiction or oversight over the affairs or
operations of the Agency.
``(h) Audit of Agency.--
``(1) In general.--The Comptroller General shall
annually audit the financial transactions of the Agency
in accordance with the United States generally accepted
government auditing standards as may be prescribed by
the Comptroller General of the United States. The audit
shall be conducted at the place or places where
accounts of the Agency are normally kept. The
representatives of the Government Accountability Office
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, things, or property belonging
to or under the control of or used or employed by the
Agency pertaining to its financial transactions and
necessary to facilitate the audit, and such
representatives shall be afforded full facilities for
verifying transactions with the balances or securities
held by depositories, fiscal agents, and custodians.
All such books, accounts, documents, records, reports,
files, papers, and property of the Agency shall remain
in possession and custody of the Agency. 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.
``(2) Report.--The Comptroller General shall submit
to the Congress a report of each annual audit conducted
under this subsection. The report to the Congress shall
set forth the scope of the audit and shall include the
statement of assets and liabilities and surplus or
deficit, the statement of income and expenses, the
statement of sources and application of funds, and such
comments and information as may be deemed necessary to
inform Congress of the financial operations and
condition of the Agency, together with such
recommendations with respect thereto as the Comptroller
General may deem advisable. A copy of each report shall
be furnished to the President and to the Agency at the
time submitted to the Congress.
``(3) Assistance and costs.--For the purpose of
conducting an audit under this subsection, the
Comptroller General may, in the discretion of the
Comptroller General, 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. Upon the
request of the Comptroller General, the Director of the
Agency shall transfer to the Government Accountability
Office from funds available, the amount requested by
the Comptroller General to cover the full costs of any
audit and report conducted by the Comptroller General.
The Comptroller General shall credit funds transferred
to the account established for salaries and expenses of
the Government Accountability Office, and such amount
shall be available upon receipt and without fiscal year
limitation to cover the full costs of the audit and
report.''.
SEC. 1107. REGULATIONS AND ORDERS.
Section 1319G of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4526) is amended--
(1) by striking subsection (a) and inserting the
following:
``(a) Authority.--The Director shall issue any regulations,
guidelines, or orders necessary to carry out the duties of the
Director under this title or the authorizing statutes, and to
ensure that the purposes of this title and the authorizing
statutes are accomplished.''; and
(2) by striking subsection (c).
SEC. 1108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.
The Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by
inserting after section 1313A, as added by this Act, the
following new section:
``SEC. 1313B. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.
``(a) Standards.--The Director shall establish standards, by
regulation or guideline, for each regulated entity relating
to--
``(1) adequacy of internal controls and information
systems taking into account the nature and scale of
business operations;
``(2) independence and adequacy of internal audit
systems;
``(3) management of interest rate risk exposure;
``(4) management of market risk, including standards
that provide for systems that accurately measure,
monitor, and control market risks and, as warranted,
that establish limitations on market risk;
``(5) adequacy and maintenance of liquidity and
reserves;
``(6) management of asset and investment portfolio
growth;
``(7) investments and acquisitions of assets by a
regulated entity, to ensure that they are consistent
with the purposes of this title and the authorizing
statutes;
``(8) overall risk management processes, including
adequacy of oversight by senior management and the
board of directors and of processes and policies to
identify, measure, monitor, and control material risks,
including reputational risks, and for adequate, well-
tested business resumption plans for all major systems
with remote site facilities to protect against
disruptive events;
``(9) management of credit and counterparty risk,
including systems to identify concentrations of credit
risk and prudential limits to restrict exposure of the
regulated entity to a single counterparty or groups of
related counterparties;
``(10) maintenance of adequate records, in accordance
with consistent accounting policies and practices that
enable the Director to evaluate the financial condition
of the regulated entity; and
``(11) such other operational and management
standards as the Director determines to be appropriate.
``(b) Failure To Meet Standards.--
``(1) Plan requirement.--
``(A) In general.--If the Director determines
that a regulated entity fails to meet any
standard established under subsection (a)--
``(i) if such standard is established
by regulation, the Director shall
require the regulated entity to submit
an acceptable plan to the Director
within the time allowed under
subparagraph (C); and
``(ii) if such standard is
established by guideline, the Director
may require the regulated entity to
submit a plan described in clause (i).
``(B) Contents.--Any plan required under
subparagraph (A) shall specify the actions that
the regulated entity will take to correct the
deficiency. If the regulated entity is
undercapitalized, the plan may be a part of the
capital restoration plan for the regulated
entity under section 1369C.
``(C) Deadlines for submission and review.--
The Director shall by regulation establish
deadlines that--
``(i) provide the regulated entities
with reasonable time to submit plans
required under subparagraph (A), and
generally require a regulated entity to
submit a plan not later than 30 days
after the Director determines that the
entity fails to meet any standard
established under subsection (a); and
``(ii) require the Director to act on
plans expeditiously, and generally not
later than 30 days after the plan is
submitted.
``(2) Required order upon failure to submit or
implement plan.--If a regulated entity fails to submit
an acceptable plan within the time allowed under
paragraph (1)(C), or fails in any material respect to
implement a plan accepted by the Director, the
following shall apply:
``(A) Required correction of deficiency.--The
Director shall, by order, require the regulated
entity to correct the deficiency.
``(B) Other authority.--The Director may, by
order, take one or more of the following
actions until the deficiency is corrected:
``(i) Prohibit the regulated entity
from permitting its average total
assets (as such term is defined in
section 1316(b)) during any calendar
quarter to exceed its average total
assets during the preceding calendar
quarter, or restrict the rate at which
the average total assets of the entity
may increase from one calendar quarter
to another.
``(ii) Require the regulated entity--
``(I) in the case of an
enterprise, to increase its
ratio of core capital to
assets.
``(II) in the case of a
Federal Home Loan Bank, to
increase its ratio of total
capital (as such term is
defined in section 6(a)(5) of
the Federal Home Loan Bank Act
(12 U.S.C. 1426(a)(5)) to
assets.
``(iii) Require the regulated entity
to take any other action that the
Director determines will better carry
out the purposes of this section than
any of the actions described in this
subparagraph.
``(3) Mandatory restrictions.--In complying with
paragraph (2), the Director shall take one or more of
the actions described in clauses (i) through (iii) of
paragraph (2)(B) if--
``(A) the Director determines that the
regulated entity fails to meet any standard
prescribed under subsection (a);
``(B) the regulated entity has not corrected
the deficiency; and
``(C) during the 18-month period before the
date on which the regulated entity first failed
to meet the standard, the entity underwent
extraordinary growth, as defined by the
Director.
``(c) Other Enforcement Authority Not Affected.--The
authority of the Director under this section is in addition to
any other authority of the Director.''.
SEC. 1109. REVIEW OF AND AUTHORITY OVER ENTERPRISE ASSETS AND
LIABILITIES.
(a) In General.--Subtitle B of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4611 et seq.) is amended--
(1) by striking the subtitle designation and heading
and inserting the following:
``Subtitle B--Required Capital Levels for Regulated Entities, Special
Enforcement Powers, and Reviews of Assets and Liabilities'';
and
(2) by adding at the end the following new section:
``SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS AND LIABILITIES.
``(a) In General.--The Director shall, by regulation,
establish criteria governing the portfolio holdings of the
enterprises, to ensure that the holdings are backed by
sufficient capital and consistent with the mission and the safe
and sound operations of the enterprises. In establishing such
criteria, the Director shall consider the ability of the
enterprises to provide a liquid secondary market through
securitization activities, the portfolio holdings in relation
to the overall mortgage market, and adherence to the standards
specified in section 1313B.
``(b) Temporary Adjustments.--The Director may, by order,
make temporary adjustments to the established standards for an
enterprise or both enterprises, such as during times of
economic distress or market disruption.
``(c) Authority To Require Disposition or Acquisition.--The
Director shall monitor the portfolio of each enterprise.
Pursuant to subsection (a) and notwithstanding the capital
classifications of the enterprises, the Director may, by order,
require an enterprise, under such terms and conditions as the
Director determines to be appropriate, to dispose of or acquire
any asset, if the Director determines that such action is
consistent with the purposes of this Act or any of the
authorizing statutes.''.
(b) Regulations.--Not later than the expiration of the 180-
day period beginning on the effective date of this Act, the
Director shall issue regulations pursuant to section 1369E(a)
of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (as added by subsection (a) of this
section) establishing the portfolio holdings standards under
such section.
SEC. 1110. RISK-BASED CAPITAL REQUIREMENTS.
(a) In General.--Section 1361 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4611) is amended to read as follows:
``SEC. 1361. RISK-BASED CAPITAL LEVELS FOR REGULATED ENTITIES.
``(a) In General.--
``(1) Enterprises.--The Director shall, by
regulation, establish risk-based capital requirements
for the enterprises to ensure that the enterprises
operate in a safe and sound manner, maintaining
sufficient capital and reserves to support the risks
that arise in the operations and management of the
enterprises.
``(2) Federal home loan banks.--The Director shall
establish risk-based capital standards under section 6
of the Federal Home Loan Bank Act for the Federal Home
Loan Banks.
``(b) No Limitation.--Nothing in this section shall limit the
authority of the Director to require other reports or
undertakings, or take other action, in furtherance of the
responsibilities of the Director under this Act.''.
(b) Federal Home Loan Banks Risk-Based Capital.--Section
6(a)(3) of the Federal Home Loan Bank Act (12 U.S.C.
1426(a)(3)) is amended--
(1) by striking subparagraph (A) and inserting the
following:
``(A) Risk-based capital standards.--The
Director shall, by regulation, establish risk-
based capital standards for the Federal Home
Loan Banks to ensure that the Federal Home Loan
Banks operate in a safe and sound manner, with
sufficient permanent capital and reserves to
support the risks that arise in the operations
and management of the Federal Home Loans
Banks.''; and
(2) in subparagraph (B), by striking ``(A)(ii)'' and
inserting ``(A)''.
SEC. 1111. MINIMUM CAPITAL LEVELS.
Section 1362 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4612) is amended--
(1) in subsection (a), by striking ``In General'' and
inserting ``Enterprises''; and
(2) by striking subsection (b) and inserting the
following:
``(b) Federal Home Loan Banks.--For purposes of this
subtitle, the minimum capital level for each Federal Home Loan
Bank shall be the minimum capital required to be maintained to
comply with the leverage requirement for the bank established
under section 6(a)(2) of the Federal Home Loan Bank Act (12
U.S.C. 1426(a)(2)).
``(c) Establishment of Revised Minimum Capital Levels.--
Notwithstanding subsections (a) and (b) and notwithstanding the
capital classifications of the regulated entities, the Director
may, by regulations issued under section 1319G, establish a
minimum capital level for the enterprises, for the Federal Home
Loan Banks, or for both the enterprises and the banks, that is
higher than the level specified in subsection (a) for the
enterprises or the level specified in subsection (b) for the
Federal Home Loan Banks, to the extent needed to ensure that
the regulated entities operate in a safe and sound manner.
``(d) Authority To Require Temporary Increase.--
``(1) In general.--Notwithstanding subsections (a)
and (b) and any minimum capital level established
pursuant to subsection (c), the Director may, by order,
increase the minimum capital level for a regulated
entity on a temporary basis, when the Director
determines that such an increase is necessary and
consistent with the prudential regulation and the safe
and sound operations of a regulated entity.
``(2) Rescission.--The Director shall rescind any
temporary minimum capital level established under
paragraph (1) when the Director determines that the
circumstances or facts no longer justify the temporary
minimum capital level.
``(3) Regulations required.--The Director shall issue
regulations establishing--
``(A) standards for the imposition of a
temporary increase in minimum capital under
paragraph (1);
``(B) the standards and procedures that the
Director will use to make the determination
referred to in paragraph (2); and
``(C) a reasonable time frame for periodic
review of any temporary increase in minimum
capital for the purpose of making the
determination referred to in paragraph (2).
``(e) Authority To Establish Additional Capital and Reserve
Requirements for Particular Purposes.--The Director may, at any
time by order or regulation, establish such capital or reserve
requirements with respect to any product or activity of a
regulated entity, as the Director considers appropriate to
ensure that the regulated entity operates in a safe and sound
manner, with sufficient capital and reserves to support the
risks that arise in the operations and management of the
regulated entity.
``(f) Periodic Review.--The Director shall periodically
review the amount of core capital maintained by the
enterprises, the amount of capital retained by the Federal Home
Loan Banks, and the minimum capital levels established for such
regulated entities pursuant to this section.''.
SEC. 1112. REGISTRATION UNDER THE SECURITIES LAWS.
The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.)
is amended by adding at the end the following:
``SEC. 38. FEDERAL NATIONAL MORTGAGE ASSOCIATION, FEDERAL HOME LOAN
MORTGAGE CORPORATION, FEDERAL HOME LOAN BANKS.
``(a) Federal National Mortgage Association and Federal Home
Loan Mortgage Corporation.--No class of equity securities of
the Federal National Mortgage Association or the Federal Home
Loan Mortgage Corporation shall be treated as an exempted
security for purposes of section 12, 13, 14, or 16.
``(b) Federal Home Loan Banks.--
``(1) Registration.--Each Federal Home Loan Bank
shall register a class of its common stock under
section 12(g), not later than 120 days after the date
of enactment of the Federal Housing Finance Regulatory
Reform Act of 2008, and shall thereafter maintain such
registration and be treated for purposes of this title
as an `issuer', the securities of which are required to
be registered under section 12, regardless of the
number of members holding such stock at any given time.
``(2) Standards relating to audit committees.--Each
Federal Home Loan Bank shall comply with the rules
issued by the Commission under section 10A(m).
``(c) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Federal home loan bank; member.--The terms
`Federal Home Loan Bank' and `member', have the same
meanings as in section 2 of the Federal Home Loan Bank
Act.
``(2) Federal national mortgage association.--The
term `Federal National Mortgage Association' means the
corporation created by the Federal National Mortgage
Association Charter Act.
``(3) Federal home loan mortgage corporation.--The
term `Federal Home Loan Mortgage Corporation' means the
corporation created by the Federal Home Loan Mortgage
Corporation Act.''.
SEC. 1113. PROHIBITION AND WITHHOLDING OF EXECUTIVE COMPENSATION.
(a) In General.--Section 1318 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4518) is amended--
(1) in the section heading, by striking ``OF
EXCESSIVE'' and inserting ``AND WITHHOLDING OF
EXECUTIVE'';
(2) in subsection (a)--
(A) by striking ``enterprise'' and inserting
``regulated entity''; and
(B) by striking ``enterprises'' and inserting
``regulated entities'';
(3) by redesignating subsection (b) as subsection
(d); and
(4) by inserting after subsection (a) the following:
``(b) Factors.--In making any determination under subsection
(a), the Director may take into consideration any factors the
Director considers relevant, including any wrongdoing on the
part of the executive officer, and such wrongdoing shall
include any fraudulent act or omission, breach of trust or
fiduciary duty, violation of law, rule, regulation, order, or
written agreement, and insider abuse with respect to the
regulated entity. The approval of an agreement or contract
pursuant to section 309(d)(3)(B) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723a(d)(3)(B)) or
section 303(h)(2) of the Federal Home Loan Mortgage Corporation
Act (12 U.S.C. 1452(h)(2)) shall not preclude the Director from
making any subsequent determination under subsection (a).
``(c) Withholding of Compensation.--In carrying out
subsection (a), the Director may require a regulated entity to
withhold any payment, transfer, or disbursement of compensation
to an executive officer, or to place such compensation in an
escrow account, during the review of the reasonableness and
comparability of compensation.''.
(b) Conforming Amendments.--
(1) Fannie mae.--Section 309(d) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1723a(d)) is amended by adding at the end the following
new paragraph:
``(4) Notwithstanding any other provision of this section,
the corporation shall not transfer, disburse, or pay
compensation to any executive officer, or enter into an
agreement with such executive officer, without the approval of
the Director, for matters being reviewed under section 1318 of
the Federal Housing Enterprises Financial Safety and Soundness
Act of 1992 (12 U.S.C. 4518).''.
(2) Freddie mac.--Section 303(h) of the Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1452(h)) is
amended by adding at the end the following new
paragraph:
``(4) Notwithstanding any other provision of this section,
the Corporation shall not transfer, disburse, or pay
compensation to any executive officer, or enter into an
agreement with such executive officer, without the approval of
the Director, for matters being reviewed under section 1318 of
the Federal Housing Enterprises Financial Safety and Soundness
Act of 1992 (12 U.S.C. 4518).''.
(3) Federal home loan banks.--Section 7 of the
Federal Home Loan Bank Act (12 U.S.C. 1427) is amended
by adding at the end the following new subsection:
``(l) Withholding of Compensation.--Notwithstanding any other
provision of this section, a Federal Home Loan Bank shall not
transfer, disburse, or pay compensation to any executive
officer, or enter into an agreement with such executive
officer, without the approval of the Director, for matters
being reviewed under section 1318 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4518).''.
SEC. 1114. LIMIT ON GOLDEN PARACHUTES.
Section 1318 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4518) is amended by
adding at the end the following:
``(e) Authority To Regulate or Prohibit Certain Forms of
Benefits to Affiliated Parties.--
``(1) Golden parachutes and indemnification
payments.--The Director may prohibit or limit, by
regulation or order, any golden parachute payment or
indemnification payment.
``(2) Factors to be taken into account.--The Director
shall prescribe, by regulation, the factors to be
considered by the Director in taking any action
pursuant to paragraph (1), which may include such
factors as--
``(A) whether there is a reasonable basis to
believe that the affiliated party has committed
any fraudulent act or omission, breach of trust
or fiduciary duty, or insider abuse with regard
to the regulated entity that has had a material
effect on the financial condition of the
regulated entity;
``(B) whether there is a reasonable basis to
believe that the affiliated party is
substantially responsible for the insolvency of
the regulated entity, the appointment of a
conservator or receiver for the regulated
entity, or the troubled condition of the
regulated entity (as defined in regulations
prescribed by the Director);
``(C) whether there is a reasonable basis to
believe that the affiliated party has
materially violated any applicable provision of
Federal or State law or regulation that has had
a material effect on the financial condition of
the regulated entity;
``(D) whether the affiliated party was in a
position of managerial or fiduciary
responsibility; and
``(E) the length of time that the party was
affiliated with the regulated entity, and the
degree to which--
``(i) the payment reasonably reflects
compensation earned over the period of
employment; and
``(ii) the compensation involved
represents a reasonable payment for
services rendered.
``(3) Certain payments prohibited.--No regulated
entity may prepay the salary or any liability or legal
expense of any affiliated party if such payment is
made--
``(A) in contemplation of the insolvency of
such regulated entity, or after the commission
of an act of insolvency; and
``(B) with a view to, or having the result
of--
``(i) preventing the proper
application of the assets of the
regulated entity to creditors; or
``(ii) preferring one creditor over
another.
``(4) Golden parachute payment defined.--
``(A) In general.--For purposes of this
subsection, the term `golden parachute payment'
means any payment (or any agreement to make any
payment) in the nature of compensation by any
regulated entity for the benefit of any
affiliated party pursuant to an obligation of
such regulated entity that--
``(i) is contingent on the
termination of such party's affiliation
with the regulated entity; and
``(ii) is received on or after the
date on which--
``(I) the regulated entity
became insolvent;
``(II) any conservator or
receiver is appointed for such
regulated entity; or
``(III) the Director
determines that the regulated
entity is in a troubled
condition (as defined in the
regulations of the Director).
``(B) Certain payments in contemplation of an
event.--Any payment which would be a golden
parachute payment but for the fact that such
payment was made before the date referred to in
subparagraph (A)(ii) shall be treated as a
golden parachute payment if the payment was
made in contemplation of the occurrence of an
event described in any subclause of such
subparagraph.
``(C) Certain payments not included.--For
purposes of this subsection, the term `golden
parachute payment' shall not include--
``(i) any payment made pursuant to a
retirement plan which is qualified (or
is intended to be qualified) under
section 401 of the Internal Revenue
Code of 1986, or other
nondiscriminatory benefit plan;
``(ii) any payment made pursuant to a
bona fide deferred compensation plan or
arrangement which the Director
determines, by regulation or order, to
be permissible; or
``(iii) any payment made by reason of
the death or disability of an
affiliated party.
``(5) Other definitions.--For purposes of this
subsection, the following definitions shall apply:
``(A) Indemnification payment.--Subject to
paragraph (6), the term `indemnification
payment' means any payment (or any agreement to
make any payment) by any regulated entity for
the benefit of any person who is or was an
affiliated party, to pay or reimburse such
person for any liability or legal expense with
regard to any administrative proceeding or
civil action instituted by the Agency which
results in a final order under which such
person--
``(i) is assessed a civil money
penalty;
``(ii) is removed or prohibited from
participating in conduct of the affairs
of the regulated entity; or
``(iii) is required to take any
affirmative action to correct certain
conditions resulting from violations or
practices, by order of the Director.
``(B) Liability or legal expense.--The term
`liability or legal expense' means--
``(i) any legal or other professional
expense incurred in connection with any
claim, proceeding, or action;
``(ii) the amount of, and any cost
incurred in connection with, any
settlement of any claim, proceeding, or
action; and
``(iii) the amount of, and any cost
incurred in connection with, any
judgment or penalty imposed with
respect to any claim, proceeding, or
action.
``(C) Payment.--The term `payment' includes--
``(i) any direct or indirect transfer
of any funds or any asset; and
``(ii) any segregation of any funds
or assets for the purpose of making, or
pursuant to an agreement to make, any
payment after the date on which such
funds or assets are segregated, without
regard to whether the obligation to
make such payment is contingent on--
``(I) the determination,
after such date, of the
liability for the payment of
such amount; or
``(II) the liquidation, after
such date, of the amount of
such payment.
``(6) Certain commercial insurance coverage not
treated as covered benefit payment.--No provision of
this subsection shall be construed as prohibiting any
regulated entity from purchasing any commercial
insurance policy or fidelity bond, except that, subject
to any requirement described in paragraph (5)(A)(iii),
such insurance policy or bond shall not cover any legal
or liability expense of the regulated entity which is
described in paragraph (5)(A).''.
SEC. 1115. REPORTING OF FRAUDULENT LOANS.
Part 1 of subtitle C of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et
seq.), as amended by this Act, is amended by adding at the end
the following:
``SEC. 1379E. REPORTING OF FRAUDULENT LOANS.
``(a) Requirement to Report.--The Director shall require a
regulated entity to submit to the Director a timely report upon
discovery by the regulated entity that it has purchased or sold
a fraudulent loan or financial instrument, or suspects a
possible fraud relating to the purchase or sale of any loan or
financial instrument. The Director shall require each regulated
entity to establish and maintain procedures designed to
discover any such transactions.
``(b) Protection From Liability for Reports.--Any regulated
entity that, in good faith, makes a report pursuant to
subsection (a), and any entity-affiliated party, that, in good
faith, makes or requires another to make any such report, shall
not be liable to any person under any provision of law or
regulation, any constitution, law, or regulation of any State
or political subdivision of any State, or under any contract or
other legally enforceable agreement (including any arbitration
agreement) for such report or for any failure to provide notice
of such report to the person who is the subject of such report
or any other persons identified in the report.''.
SEC. 1116. INCLUSION OF MINORITIES AND WOMEN; DIVERSITY IN AGENCY
WORKFORCE.
Section 1319A of the Housing and Community Development Act of
1992 (12 U.S.C. 4520) is amended--
(1) in the section heading, by striking ``EQUAL
OPPORTUNITY IN SOLICITATION OF CONTRACTS'' and
inserting ``MINORITY AND WOMEN INCLUSION; DIVERSITY
REQUIREMENTS'';
(2) in subsection (a), by striking ``(a) In
General.--Each enterprise'' and inserting ``(e)
Outreach.--Each regulated entity''; and
(3) by striking subsection (b);
(4) by inserting before subsection (e), as so
redesignated by paragraph (2) of this section, the
following new subsections:
``(a) Office of Minority and Women Inclusion.--Each regulated
entity shall establish an Office of Minority and Women
Inclusion, or designate an office of the entity, that shall be
responsible for carrying out this section and all matters of
the entity relating to diversity in management, employment, and
business activities in accordance with such standards and
requirements as the Director shall establish.
``(b) Inclusion in All Levels of Business Activities.--Each
regulated entity shall develop and implement standards and
procedures to ensure, to the maximum extent possible, the
inclusion and utilization of minorities (as such term is
defined in section 1204(c) of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1811
note)) and women, and minority- and women-owned businesses (as
such terms are defined in section 21A(r)(4) of the Federal Home
Loan Bank Act (12 U.S.C. 1441a(r)(4)) (including financial
institutions, investment banking firms, mortgage banking firms,
asset management firms, broker-dealers, financial services
firms, underwriters, accountants, brokers, investment
consultants, and providers of legal services) in all business
and activities of the regulated entity at all levels, including
in procurement, insurance, and all types of contracts
(including contracts for the issuance or guarantee of any debt,
equity, or mortgage-related securities, the management of its
mortgage and securities portfolios, the making of its equity
investments, the purchase, sale and servicing of single- and
multi-family mortgage loans, and the implementation of its
affordable housing program and initiatives). The processes
established by each regulated entity for review and evaluation
for contract proposals and to hire service providers shall
include a component that gives consideration to the diversity
of the applicant.
``(c) Applicability.--This section shall apply to all
contracts of a regulated entity for services of any kind,
including services that require the services of investment
banking, asset management entities, broker-dealers, financial
services entities, underwriters, accountants, investment
consultants, and providers of legal services.
``(d) Inclusion in Annual Reports.--Each regulated entity
shall include, in the annual report submitted by the entity to
the Director pursuant to section 309(k) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723a(k)), section
307(c) of the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1456(c)), and section 20 of the Federal Home Loan Bank
Act (12 U.S.C. 1440), as applicable, detailed information
describing the actions taken by the entity pursuant to this
section, which shall include a statement of the total amounts
paid by the entity to third party contractors since the last
such report and the percentage of such amounts paid to
businesses described in subsection (b) of this section.''; and
(5) by adding at the end the following new
subsection:
``(f) Diversity in Agency Workforce.--The Agency shall take
affirmative steps to seek diversity in its workforce at all
levels of the agency consistent with the demographic diversity
of the United States, which shall include--
``(1) heavily recruiting at historically Black
colleges and universities, Hispanic-serving
institutions, women's colleges, and colleges that
typically serve majority minority populations;
``(2) sponsoring and recruiting at job fairs in urban
communities, and placing employment advertisements in
newspapers and magazines oriented toward women and
people of color;
``(3) partnering with organizations that are focused
on developing opportunities for minorities and women to
place talented young minorities and women in industry
internships, summer employment, and full-time
positions; and
``(4) where feasible, partnering with inner-city high
schools, girls' high schools, and high schools with
majority minority populations to establish or enhance
financial literacy programs and provide mentoring.''.
SEC. 1117. TEMPORARY AUTHORITY FOR PURCHASE OF OBLIGATIONS OF REGULATED
ENTITIES BY SECRETARY OF TREASURY.
(a) Fannie Mae.--Section 304 of the Federal National Mortgage
Association Charter Act (12 U.S.C. 1719) is amended by adding
at the end the following new subsection:
``(g) Temporary Authority of Treasury To Purchase Obligations
and Securities; Conditions.--
``(1) Authority to purchase.--
``(A) General authority.--In addition to the
authority under subsection (c) of this section,
the Secretary of the Treasury is authorized to
purchase any obligations and other securities
issued by the corporation under any section of
this Act, on such terms and conditions as the
Secretary may determine and in such amounts as
the Secretary may determine. Nothing in this
subsection requires the corporation to issue
obligations or securities to the Secretary
without mutual agreement between the Secretary
and the corporation. Nothing in this subsection
permits or authorizes the Secretary, without
the agreement of the corporation, to engage in
open market purchases of the common securities
of the corporation.
``(B) Emergency determination required.--In
connection with any use of this authority, the
Secretary must determine that such actions are
necessary to--
``(i) provide stability to the
financial markets;
``(ii) prevent disruptions in the
availability of mortgage finance; and
``(iii) protect the taxpayer.
``(C) Considerations.--To protect the
taxpayers, the Secretary of the Treasury shall
take into consideration the following in
connection with exercising the authority
contained in this paragraph:
``(i) The need for preferences or
priorities regarding payments to the
Government.
``(ii) Limits on maturity or
disposition of obligations or
securities to be purchased.
``(iii) The corporation's plan for
the orderly resumption of private
market funding or capital market
access.
``(iv) The probability of the
corporation fulfilling the terms of any
such obligation or other security,
including repayment.
``(v) The need to maintain the
corporation's status as a private
shareholder-owned company.
``(vi) Restrictions on the use of
corporation resources, including
limitations on the payment of dividends
and executive compensation and any such
other terms and conditions as
appropriate for those purposes.
``(D) Reports to congress.--Upon exercise of
this authority, the Secretary shall report to
the Committees on the Budget, Financial
Services, and Ways and Means of the House of
Representatives and the Committees on the
Budget, Finance, and Banking, Housing, and
Urban Affairs of the Senate as to the necessity
for the purchase and the determinations made by
the Secretary under subparagraph (B) and with
respect to the considerations required under
subparagraph (C), and the size, terms, and
probability of repayment or fulfillment of
other terms of such purchase.
``(2) Rights; sale of obligations and securities.--
``(A) Exercise of rights.--The Secretary of
the Treasury may, at any time, exercise any
rights received in connection with such
purchases.
``(B) Sale of obligation and securities.--The
Secretary of the Treasury may, at any time,
subject to the terms of the security or
otherwise upon terms and conditions and at
prices determined by the Secretary, sell any
obligation or security acquired by the
Secretary under this subsection.
``(C) Application of sunset to purchased
obligations or securities.--The authority of
the Secretary of the Treasury to hold, exercise
any rights received in connection with, or
sell, any obligations or securities purchased
is not subject to the provisions of paragraph
(4).
``(3) Funding.--For the purpose of the authorities
granted in this subsection, the Secretary of the
Treasury may use the proceeds of the sale of any
securities issued under chapter 31 of Title 31, and the
purposes for which securities may be issued under
chapter 31 of Title 31 are extended to include such
purchases and the exercise of any rights in connection
with such purchases. Any funds expended for the
purchase of, or modifications to, obligations and
securities, or the exercise of any rights received in
connection with such purchases under this subsection
shall be deemed appropriated at the time of such
purchase, modification, or exercise.
``(4) Termination of authority.--The authority under
this subsection (g), with the exception of paragraphs
(2) and (3) of this subsection, shall expire December
31, 2009.
``(5) Authority of the director with respect to
executive compensation.--The Director shall have the
power to approve, disapprove, or modify the executive
compensation of the corporation, as defined under
Regulation S-K, 17 C.F.R. 229.''.
(b) Freddie Mac.--Section 306 of the Federal Home Loan
Mortgage Corporation Act (12 U.S.C. 1455) is amended by adding
at the end the following new subsection:
``(l) Temporary Authority of Treasury To Purchase Obligations
and Securities; Conditions.--
``(1) Authority to purchase.--
``(A) General authority.--In addition to the
authority under subsection (c) of this section,
the Secretary of the Treasury is authorized to
purchase any obligations and other securities
issued by the Corporation under any section of
this Act, on such terms and conditions as the
Secretary may determine and in such amounts as
the Secretary may determine. Nothing in this
subsection requires the Corporation to issue
obligations or securities to the Secretary
without mutual agreement between the Secretary
and the Corporation. Nothing in this subsection
permits or authorizes the Secretary, without
the agreement of the Corporation, to engage in
open market purchases of the common securities
of the Corporation.
``(B) Emergency determination required.--In
connection with any use of this authority, the
Secretary must determine that such actions are
necessary to--
``(i) provide stability to the
financial markets;
``(ii) prevent disruptions in the
availability of mortgage finance; and
``(iii) protect the taxpayer.
``(C) Considerations.--To protect the
taxpayers, the Secretary of the Treasury shall
take into consideration the following in
connection with exercising the authority
contained in this paragraph:
``(i) The need for preferences or
priorities regarding payments to the
Government.
``(ii) Limits on maturity or
disposition of obligations or
securities to be purchased.
``(iii) The Corporation's plan for
the orderly resumption of private
market funding or capital market
access.
``(iv) The probability of the
Corporation fulfilling the terms of any
such obligation or other security,
including repayment.
``(v) The need to maintain the
Corporation's status as a private
shareholder-owned company.
``(vi) Restrictions on the use of
Corporation resources, including
limitations on the payment of dividends
and executive compensation and any such
other terms and conditions as
appropriate for those purposes.
``(D) Reports to congress.--Upon exercise of
this authority, the Secretary shall report to
the Committees on the Budget, Financial
Services, and Ways and Means of the House of
Representatives and the Committees on the
Budget, Finance, and Banking, Housing, and
Urban Affairs of the Senate as to the necessity
for the purchase and the determinations made by
the Secretary under subparagraph (B) and with
respect to the considerations required under
subparagraph (C), and the size, terms, and
probability of repayment or fulfillment of
other terms of such purchase.
``(2) Rights; sale of obligations and securities.--
``(A) Exercise of rights.--The Secretary of
the Treasury may, at any time, exercise any
rights received in connection with such
purchases.
``(B) Sale of obligation and securities.--The
Secretary of the Treasury may, at any time,
subject to the terms of the security or
otherwise upon terms and conditions and at
prices determined by the Secretary, sell any
obligation or security acquired by the
Secretary under this subsection.
``(C) Application of sunset to purchased
obligations or securities.--The authority of
the Secretary of the Treasury to hold, exercise
any rights received in connection with, or
sell, any obligations or securities purchased
is not subject to the provisions of paragraph
(4).
``(3) Funding.--For the purpose of the authorities
granted in this subsection, the Secretary of the
Treasury may use the proceeds of the sale of any
securities issued under chapter 31 of Title 31, and the
purposes for which securities may be issued under
chapter 31 of Title 31 are extended to include such
purchases and the exercise of any rights in connection
with such purchases. Any funds expended for the
purchase of, or modifications to, obligations and
securities, or the exercise of any rights received in
connection with such purchases under this subsection
shall be deemed appropriated at the time of such
purchase, modification, or exercise.
``(4) Termination of authority.--The authority under
this subsection (l), with the exception of paragraphs
(2) and (3) of this subsection, shall expire December
31, 2009.
``(5) Authority of the director with respect to
executive compensation.--The Director shall have the
power to approve, disapprove, or modify the executive
compensation of the Corporation, as defined under
Regulation S-K, 17 C.F.R. 229.''.
(c) Federal Home Loan Banks.--Section 11 of the Federal Home
Loan Bank Act (12 U.S.C. 1431) is amended by adding at the end
the following new subsection:
``(l) Temporary Authority of Treasury to Purchase
Obligations; Conditions.--
``(1) Authority to purchase.--
``(A) General authority.--In addition to the
authority under subsection (i) of this section,
the Secretary of the Treasury is authorized to
purchase any obligations issued by any Federal
Home Loan Bank under any section of this Act,
on such terms and conditions as the Secretary
may determine and in such amounts as the
Secretary may determine. Nothing in this
subsection requires a Federal Home Loan Bank to
issue obligations or securities to the
Secretary without mutual agreement between the
Secretary and the Federal Home Loan Bank.
Nothing in this subsection permits or
authorizes the Secretary, without the agreement
of the Federal Home Loan Bank, to engage in
open market purchases of the common securities
of any Federal Home Loan Bank.
``(B) Emergency determination required.--In
connection with any use of this authority, the
Secretary must determine that such actions are
necessary to--
``(i) provide stability to the
financial markets;
``(ii) prevent disruptions in the
availability of mortgage finance; and
``(iii) protect the taxpayer.
``(C) Considerations.--To protect the
taxpayers, the Secretary of the Treasury shall
take into consideration the following in
connection with exercising the authority
contained in this paragraph:
``(i) The need for preferences or
priorities regarding payments to the
Government.
``(ii) Limits on maturity or
disposition of obligations or
securities to be purchased.
``(iii) The Federal Home Loan Bank's
plan for the orderly resumption of
private market funding or capital
market access.
``(iv) The probability of the Federal
Home Loan Bank fulfilling the terms of
any such obligation or other security,
including repayment.
``(v) The need to maintain the
Federal Home Loan Bank's status as a
private shareholder-owned company.
``(vi) Restrictions on the use of
Federal Home Loan Bank resources,
including limitations on the payment of
dividends and executive compensation
and any such other terms and conditions
as appropriate for those purposes.
``(D) Reports to congress.--Upon exercise of
this authority, the Secretary shall report to
the Committees on the Budget, Financial
Services, and Ways and Means of the House of
Representatives and the Committees on the
Budget, Finance, and Banking, Housing, and
Urban Affairs of the Senate as to the necessity
for the purchase and the determinations made by
the Secretary under subparagraph (B) and with
respect to the considerations required under
subparagraph (C), and the size, terms, and
probability of repayment or fulfillment of
other terms of such purchase.
``(2) Rights; sale of obligations and securities.--
``(A) Exercise of rights.--The Secretary of
the Treasury may, at any time, exercise any
rights received in connection with such
purchases.
``(B) Sale of obligations.--The Secretary of
the Treasury may, at any time, subject to the
terms of the security or otherwise upon terms
and conditions and at prices determined by the
Secretary, sell any obligation acquired by the
Secretary under this subsection.
``(C) Application of sunset to purchased
obligations.--The authority of the Secretary of
the Treasury to hold, exercise any rights
received in connection with, or sell, any
obligations purchased is not subject to the
provisions of paragraph (4).
``(3) Funding.--For the purpose of the authorities
granted in this subsection, the Secretary of the
Treasury may use the proceeds of the sale of any
securities issued under chapter 31 of Title 31, and the
purposes for which securities may be issued under
chapter 31 of Title 31 are extended to include such
purchases and the exercise of any rights in connection
with such purchases. Any funds expended for the
purchase of, or modifications to, obligations and
securities, or the exercise of any rights received in
connection with such purchases under this subsection
shall be deemed appropriated at the time of such
purchase, modification, or exercise.
``(4) Termination of authority.--The authority under
this subsection (l), with the exception of paragraphs
(2) and (3) of this subsection, shall expire December
31, 2009.
``(5) Authority of the director with respect to
executive compensation.--The Director shall have the
power to approve, disapprove, or modify the executive
compensation of the Federal Home Loan Bank, as defined
under Regulation S-K, 17 C.F.R. 229.''.
SEC. 1118. CONSULTATION BETWEEN THE DIRECTOR OF THE FEDERAL HOUSING
FINANCE AGENCY AND THE BOARD OF GOVERNORS OF THE
FEDERAL RESERVE SYSTEM TO ENSURE FINANCIAL MARKET
STABILITY .
Subsection (a) of section 1313 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4513), as amended by the preceding provisions of this
Act, is further amended by adding at the end the following new
paragraph:
``(3) Coordination with the chairman of the board of
governors of the federal reserve system.--
``(A) Consultation.-- The Director shall
consult with, and consider the views of, the
Chairman of the Board of Governors of the
Federal Reserve System, with respect to the
risks posed by the regulated entities to the
financial system, prior to issuing any proposed
or final regulations, orders, and guidelines
with respect to the exercise of the additional
authority provided in this Act regarding
prudential management and operations standards,
safe and sound operations of, and capital
requirements and portfolio standards applicable
to the regulated entities (as such term is
defined in section 1303). The Director also
shall consult with the Chairman regarding any
decision to place a regulated entity into
conservatorship or receivership.
``(B) Information sharing.--To facilitate the
consultative process, the Director shall share
information with the Board of Governors of the
Federal Reserve System on a regular, periodic
basis as determined by the Director and the
Board regarding the capital, asset and
liabilities, financial condition, and risk
management practices of the regulated entities
as well as any information related to financial
market stability.
``(C) Termination of consultation
requirement.--The requirement of the Director
to consult with the Board of Governors of the
Federal Reserve System under this paragraph
shall expire at the conclusion of December 31,
2009.''.
Subtitle B--Improvement of Mission Supervision
SEC. 1121. TRANSFER OF PROGRAM APPROVAL AND HOUSING GOAL OVERSIGHT.
Part 2 of subtitle A of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et
seq.) is amended--
(1) by striking the heading for the part and
inserting the following:
``PART 2--ADDITIONAL AUTHORITIES OF THE DIRECTOR'';
and
(2) by striking sections 1321 and 1322.
SEC. 1122. ASSUMPTION BY THE DIRECTOR OF CERTAIN OTHER HUD
RESPONSIBILITIES.
(a) In General.--Part 2 of subtitle A of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4541 et seq.) is amended--
(1) by striking ``Secretary'' each place that term
appears and inserting ``Director'' in each of sections
1323, 1326, 1327, 1328, and 1336; and
(2) by striking sections 1338 and 1349 (12 U.S.C.
4562 note and 4589).
(b) Retention of Fair Housing Responsibilities.--Section 1325
of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4545) is amended in the matter
preceding paragraph (1), by inserting ``of Housing and Urban
Development'' after ``The Secretary''.
SEC. 1123. REVIEW OF ENTERPRISE PRODUCTS.
Part 2 of subtitle A of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4541 et
seq.) is amended by inserting before section 1323 the
following:
``SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS.
``(a) In General.--The Director shall require each enterprise
to obtain the approval of the Director for any product of the
enterprise before initially offering the product.
``(b) Standard for Approval.--In considering any request for
approval of a product pursuant to subsection (a), the Director
shall make a determination that--
``(1) in the case of a product of the Federal
National Mortgage Association, the product is
authorized under paragraph (2), (3), (4), or (5) of
section 302(b) or section 304 of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b),
1719);
``(2) in the case of a product of the Federal Home
Loan Mortgage Corporation, the product is authorized
under paragraph (1), (4), or (5) of section 305(a) of
the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1454(a));
``(3) the product is in the public interest; and
``(4) the product is consistent with the safety and
soundness of the enterprise or the mortgage finance
system.
``(c) Procedure for Approval.--
``(1) Submission of request.--An enterprise shall
submit to the Director a written request for approval
of a product that describes the product in such form as
prescribed by order or regulation of the Director.
``(2) Request for public comment.--Immediately upon
receipt of a request for approval of a product, as
required under paragraph (1), the Director shall
publish notice of such request and of the period for
public comment pursuant to paragraph (3) regarding the
product, and a description of the product proposed by
the request. The Director shall give interested parties
the opportunity to respond in writing to the proposed
product.
``(3) Public comment period.--During the 30-day
period beginning on the date of publication pursuant to
paragraph (2) of a request for approval of a product,
the Director shall receive public comments regarding
the proposed product.
``(4) Offering of product.--
``(A) In general.--Not later than 30 days
after the close of the public comment period
described in paragraph (3), the Director shall
approve or deny the product, specifying the
grounds for such decision in writing.
``(B) Failure to act.--If the Director fails
to act within the 30-day period described in
subparagraph (A), then the enterprise may offer
the product.
``(C) Temporary approval.--The Director may,
subject to the rules of the Director, provide
for temporary approval of the offering of a
product without a public comment period, if the
Director finds that the existence of exigent
circumstances makes such delay contrary to the
public interest.
``(d) Conditional Approval.--If the Director approves the
offering of any product by an enterprise, the Director may
establish terms, conditions, or limitations with respect to
such product with which the enterprise must comply in order to
offer such product.
``(e) Exclusions.--
``(1) In general.--The requirements of subsections
(a) through (d) do not apply with respect to--
``(A) the automated loan underwriting system
of an enterprise in existence as of the date of
enactment of the Federal Housing Finance
Regulatory Reform Act of 2008, including any
upgrade to the technology, operating system, or
software to operate the underwriting system;
``(B) any modification to the mortgage terms
and conditions or mortgage underwriting
criteria relating to the mortgages that are
purchased or guaranteed by an enterprise,
provided that such modifications do not alter
the underlying transaction so as to include
services or financing, other than residential
mortgage financing; or
``(C) any other activity that is
substantially similar, as determined by rule of
the Director to--
``(i) the activities described in
subparagraphs (A) and (B); and
``(ii) other activities that have
been approved by the Director in
accordance with this section.
``(2) Expedited review.--
``(A) Enterprise notice.--For any new
activity that an enterprise considers not to be
a product, the enterprise shall provide written
notice to the Director of such activity, and
may not commence such activity until the date
of receipt of a notice under subparagraph (B)
or the expiration of the period described in
subparagraph (C). The Director shall establish,
by regulation, the form and content of such
written notice.
``(B) Director determination.--Not later than
15 days after the date of receipt of a notice
under subparagraph (A), the Director shall
determine whether such activity is a product
subject to approval under this section. The
Director shall, immediately upon so
determining, notify the enterprise.
``(C) Failure to act.--If the Director fails
to determine whether such activity is a product
within the 15-day period described in
subparagraph (B), the enterprise may commence
the new activity in accordance with
subparagraph (A).
``(f) No Limitation.--Nothing in this section may be
construed to restrict--
``(1) the safety and soundness authority of the
Director over all new and existing products or
activities; or
``(2) the authority of the Director to review all new
and existing products or activities to determine that
such products or activities are consistent with the
statutory mission of an enterprise.''.
SEC. 1124. CONFORMING LOAN LIMITS.
(a) Fannie Mae.--
(1) General limit.--Section 302(b)(2) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1717(b)(2)) is amended by striking the 7th and 8th
sentences and inserting the following new sentences:
``Such limitations 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 effective date of the Federal
Housing Finance Regulatory Reform Act of 2008, 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 Director of the
Federal Housing Finance Agency (pursuant to section
1322 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4541)). 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.''.
(2) High-cost area limit.--Section 302(b)(2) of the
Federal National Mortgage Association Charter Act (12
U.S.C. 1717(b)(2)) is amended by adding after the
period at the end the following: ``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 foregoing limitation for
such size residence, 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.''.
(3) Effective date.--The amendments made by
paragraphs (1) and (2) of this subsection shall take
effect upon the expiration of the date described in
section 201(a) of the Economic Stimulus Act of 2008
(Public Law 110-185).
(b) Freddie Mac.--
(1) General limit.--Section 305(a)(2) of the Federal
Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2)) is amended by striking the 6th and 7th
sentences and inserting the following new sentences:
``Such limitations 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 effective date of the Federal
Housing Finance Regulatory Reform Act of 2008, 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 Director of the
Federal Housing Finance Agency (pursuant to section
1322 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4541)). 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.''.
(2) High-cost area limit.--Section 305(a)(2) of the
Federal Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2)) is amended by adding after the period at
the end the following: ``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 foregoing limitation for such
size residence, 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.''.
(3) Effective date.--The amendments made by
paragraphs (1) and (2) of this subsection shall take
effect upon the expiration of the date described in
section 201(a) of the Economic Stimulus Act of 2008
(Public Law 110-185).
(c) Sense of Congress.--It is the sense of the Congress that
the securitization of mortgages by the Federal National
Mortgage Association and the Federal Home Loan Mortgage
Corporation plays an important role in providing liquidity to
the United States housing markets. Therefore, the Congress
encourages the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation to securitize mortgages
acquired under the increased conforming loan limits established
under this Act.
(d) Housing Price Index.--Part 2 of subtitle A of the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4541 et seq.) is amended by inserting after section
1321 (as added by section 1123 of this Act) the following new
section:
``SEC. 1322. HOUSING PRICE INDEX.
``The Director shall establish and maintain a method of
assessing the national average 1-family house price for use for
adjusting the conforming loan limitations of the enterprises.
In establishing such method, the Director shall take into
consideration the monthly survey of all major lenders conducted
by the Federal Housing Finance Agency to determine the national
average 1-family house price, the House Price Index maintained
by the Office of Federal Housing Enterprise Oversight of the
Department of Housing and Urban Development before the
effective date of the Federal Housing Finance Regulatory Reform
Act of 2008, any appropriate house price indexes of the Bureau
of the Census of the Department of Commerce, and any other
indexes or measures that the Director considers appropriate.''.
SEC. 1125. ANNUAL HOUSING REPORT.
(a) Repeal.--Section 1324 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4544) is
hereby repealed.
(b) Annual Housing Report.--The Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 is amended by
inserting after section 1323 the following:
``SEC. 1324. ANNUAL HOUSING REPORT.
``(a) In General.--After reviewing and analyzing the reports
submitted under section 309(n) of the Federal National Mortgage
Association Charter Act and section 307(f) of the Federal Home
Loan Mortgage Corporation Act, the Director shall submit a
report, not later than October 30 of each year, 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 activities of each enterprise.
``(b) Contents.--The report required under subsection (a)
shall--
``(1) discuss--
``(A) the extent to and manner in which--
``(i) each enterprise is achieving
the annual housing goals established
under subpart B;
``(ii) each enterprise is complying
with its duty to serve underserved
markets, as established under section
1335;
``(iii) each enterprise is complying
with section 1337;
``(iv) each enterprise received
credit towards achieving each of its
goals resulting from a transaction or
activity pursuant to section
1331(b)(2); and
``(v) each enterprise is achieving
the purposes of the enterprise
established by law; and
``(B) the actions that each enterprise could
undertake to promote and expand the purposes of
the enterprise;
``(2) aggregate and analyze relevant data on income
to assess the compliance of each enterprise with the
housing goals established under subpart B;
``(3) aggregate and analyze data on income, race, and
gender by census tract and other relevant
classifications, and compare such data with larger
demographic, housing, and economic trends;
``(4) identify the extent to which each enterprise is
involved in mortgage purchases and secondary market
activities involving subprime and nontraditional loans;
``(5) compare the characteristics of subprime and
nontraditional loans both purchased and securitized by
each enterprise to other loans purchased and
securitized by each enterprise; and
``(6) compare the characteristics of high-cost loans
purchased and securitized, where such securities are
not held on portfolio to loans purchased and
securitized, where such securities are either retained
on portfolio or repurchased by the enterprise,
including such characteristics as--
``(A) the purchase price of the property that
secures the mortgage;
``(B) the loan-to-value ratio of the
mortgage, which shall reflect any secondary
liens on the relevant property;
``(C) the terms of the mortgage;
``(D) the creditworthiness of the borrower;
and
``(E) any other relevant data, as determined
by the Director.
``(c) Data Collection and Reporting.--
``(1) In general.--To assist the Director in
analyzing the matters described in subsection (b), the
Director shall conduct, on a monthly basis, a survey of
mortgage markets in accordance with this subsection.
``(2) Data points.--Each monthly survey conducted by
the Director under paragraph (1) shall collect data
on--
``(A) the characteristics of individual
mortgages that are eligible for purchase by the
enterprises and the characteristics of
individual mortgages that are not eligible for
purchase by the enterprises including, in both
cases, information concerning--
``(i) the price of the house that
secures the mortgage;
``(ii) the loan-to-value ratio of the
mortgage, which shall reflect any
secondary liens on the relevant
property;
``(iii) the terms of the mortgage;
``(iv) the creditworthiness of the
borrower or borrowers; and
``(v) whether the mortgage, in the
case of a conforming mortgage, was
purchased by an enterprise;
``(B) the characteristics of individual
subprime and nontraditional mortgages that are
eligible for purchase by the enterprises and
the characteristics of borrowers under such
mortgages, including the creditworthiness of
such borrowers and determination whether such
borrowers would qualify for prime lending; and
``(C) such other matters as the Director
determines to be appropriate.
``(3) Public availability.--The Director shall make
any data collected by the Director in connection with
the conduct of a monthly survey available to the public
in a timely manner, provided that the Director may
modify the data released to the public to ensure that
the data--
``(A) is not released in an identifiable
form; and
``(B) is not otherwise obtainable from other
publicly available data sets.
``(4) Definition.--For purposes of this subsection,
the term `identifiable form' means any representation
of information that permits the identity of a borrower
to which the information relates to be reasonably
inferred by either direct or indirect means.''.
SEC. 1126. PUBLIC USE DATABASE.
Section 1323 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (42 U.S.C. 4543) is amended--
(1) in subsection (a)--
(A) by striking ``(a) In General.--The
Secretary'' and inserting the following:
``(a) Availability.--
``(1) In general.--The Director''; and
(B) by adding at the end the following new
paragraph:
``(2) Census tract level reporting.--Such data shall
include the data elements required to be reported under
the Home Mortgage Disclosure Act of 1975, at the census
tract level.'';
(2) in subsection (b)(2), by inserting before the
period at the end the following: ``or with subsection
(a)(2)''; and
(3) by adding at the end the following new
subsection:
``(d) Timing.--Data submitted under this section by an
enterprise in connection with a provision referred to in
subsection (a) shall be made publicly available in accordance
with this section not later than September 30 of the year
following the year to which the data relates.''.
SEC. 1127. REPORTING OF MORTGAGE DATA.
Section 1326 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4546) is amended--
(1) in subsection (a), by striking ``The Director''
and inserting ``Subject to subsection (d), the
Director''; and
(2) by adding at the end the following:
``(d) Mortgage Information.--Subject to privacy
considerations, as described in section 304(j) of the Home
Mortgage Disclosure Act of 1975 (12 U.S.C. 2803(j)), the
Director shall, by regulation or order, provide that certain
information relating to single family mortgage data of the
enterprises shall be disclosed to the public, in order to make
available to the public--
``(1) the same data from the enterprises that is
required of insured depository institutions under the
Home Mortgage Disclosure Act of 1975; and
``(2) information collected by the Director under
section 1324(b)(6).''.
SEC. 1128. REVISION OF HOUSING GOALS.
(a) Repeal.--Sections 1331 through 1334 of the Federal
Housing Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4561 through 4564) are hereby repealed.
(b) Housing Goals.--The Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 is amended by inserting before
section 1335 the following:
``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.
``(a) In General.--The Director shall, by regulation,
establish effective for 2010 and each year thereafter, annual
housing goals, with respect to the mortgage purchases by the
enterprises, as follows:
``(1) Single-family housing goals.--Four single-
family housing goals under section 1332.
``(2) Multifamily special affordable housing goal.--
One multifamily special affordable housing goal under
section 1333.
``(b) Timing.--The Director shall, by regulation, establish
an annual deadline by which the Director shall establish the
annual housing goals under this subpart for each year, taking
into consideration the need for the enterprises to reasonably
and sufficiently plan their operations and activities in
advance, including operations and activities necessary to meet
such annual goals.
``(c) Transition.--The annual housing goals effective for
2008 pursuant to this subpart, as in effect before the
enactment of the Federal Housing Finance Regulatory Reform Act
of 2008, shall remain in effect for 2009, except that not later
than the expiration of the 270-day period beginning on the date
of the enactment of such Act, the Director shall review such
goals applicable for 2009 to determine the feasibility of such
goals given the market conditions current at such time and,
after seeking public comment for a period not to exceed 30
days, may make appropriate adjustments consistent with such
market conditions.
``(d) Eliminating Interest Rate Disparities.--
``(1) In general.--Upon request by the Director, an
enterprise shall provide to the Director, in a form
determined by the Director, data the Director may
review to determine whether there exist disparities in
interest rates charged on mortgages to borrowers who
are minorities as compared with comparable mortgages to
borrowers of similar creditworthiness who are not
minorities.
``(2) Remedial actions upon preliminary finding.--
Upon a preliminary finding by the Director that a
pattern of disparities in interest rates with respect
to any lender or lenders exists pursuant to the data
provided by an enterprise in paragraph (1), the
Director shall_
``(A) refer the preliminary finding to the
appropriate regulatory or enforcement agency
for further review; and
``(B) require the enterprise to submit
additional data with respect to any lender or
lenders, as appropriate and to the extent
practicable, to the Director who shall submit
any such additional data to the regulatory or
enforcement agency for appropriate action.
``(3) Annual report to congress.--The Director shall
submit to the Committee on Financial Services of the
House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate a report
describing the actions taken, and being taken, by the
Director to carry out this subsection. No such report
shall identify any lender or lenders who have not been
found to have engaged in discriminatory lending
practices 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.
``(4) Protection of identity of individuals.--In
carrying out this subsection, the Director shall ensure
that no property-related or financial information that
would enable a borrower to be identified shall be made
public.
``SEC. 1332. SINGLE-FAMILY HOUSING GOALS.
``(a) In General.--The Director shall, by regulation,
establish annual goals for the purchase by each enterprise of
the following types of mortgages for the following categories
of families:
``(1) Purchase-money mortgages.--A goal for purchase
of conventional, conforming, single-family, purchase
money mortgages financing owner-occupied housing for
each of the following categories of families:
``(A) Low-income families.
``(B) Families that reside in low-income
areas.
``(C) Very low-income families.
``(2) Refinancing mortgages.--A goal for purchase of
conventional, conforming mortgages on owner-occupied,
single-family housing for low-income families that are
given to pay off or prepay an existing loan secured by
the same property.
``(b) Goals as a Percentage of Total Mortgage Purchases.--The
goals established under paragraphs (1) and (2) of subsection
(a) shall be established as a percentage of the total number of
conventional, conforming, single-family, owner-occupied,
purchase money mortgages purchased by the enterprise, or as
percentage of the total number of conventional, single-family,
owner-occupied refinance mortgages purchased by the enterprise,
as applicable, that are mortgages for the types of families
specified in paragraphs (1) and (2) of subsection (a).
``(c) Single-Family, Owner-Occupied Rental Housing Units.--
The Director shall require each enterprise to report the number
of rental housing units affordable to low-income families each
year which are contained in mortgages purchased by the
enterprise financing 2- to 4-unit single-family, owner-occupied
properties and may, by regulation, establish additional
requirements relating to such units.
``(d) Determination of Compliance.--
``(1) In general.--The Director shall determine, for
each year that the housing goals under this section are
in effect pursuant to section 1331(a), whether each
enterprise has complied with each such goal established
under subsection (a) of this section and any additional
requirements which may be established under subsection
(c) of this section.
``(2) Purchase-money mortgage goals.--An enterprise
shall be considered to be in compliance with a housing
goal under subparagraph (A), (B), or (C) of subsection
(a)(1) for a year only if, for the type of family
described in such subparagraph, the percentage of the
number of conventional, conforming, single-family,
owner-occupied, purchase money mortgages purchased by
the enterprise in such year that serve such families,
meets or exceeds the target for the year for such type
of family that is established under subsection (e).
``(3) Refinance goal.--An enterprise shall be
considered to be in compliance with the refinance goal
under subsection (a)(2) for a year only if the
percentage of the number of conventional, conforming,
single-family, owner-occupied refinance mortgages
purchased by the enterprise in such year that serve
low-income families meets or exceeds the target for the
year that is established under subsection (e).
``(e) Annual Targets.--
``(1) In general.--The Director shall, by regulation,
establish annual targets for each goal and subgoal
under this section, provided that the Director shall
not set prospective targets longer than three years. In
establishing such targets, the Director shall not
consider segments of the market determined to be
unacceptable or contrary to good lending practices,
inconsistent with safety and soundness, or unauthorized
for purchase by the enterprises.
``(2) Goals targets.--
``(A) Calculation.--The Director shall
calculate, for each of the types of families
described in subsection (a), the percentage,
for each of the three years that most recently
precede such year and for which information
under the Home Mortgage Disclosure Act of 1975
is publicly available--
``(i) of the number of conventional,
conforming, single-family, owner-
occupied purchase money mortgages
originated in such year that serve such
type of family, or
``(ii) the number of conventional,
conforming, single-family, owner-
occupied refinance mortgages originated
in such year that serve low-income
families,
as applicable, as determined by the Director
using the information obtained and determined
pursuant to paragraphs (4) and (5).
``(B) Establishment of goal targets.--The
Director shall, by regulation, establish
targets for each of the goal categories, taking
into consideration the calculations under
subparagraph (A) and the following factors:
``(i) National housing needs.
``(ii) Economic, housing, and
demographic conditions, including
expected market developments.
``(iii) The performance and effort of
the enterprises toward achieving the
housing goals under this section in
previous years.
``(iv) The ability of the enterprise
to lead the industry in making mortgage
credit available.
``(v) Such other reliable mortgage
data as may be available.
``(vi) The size of the purchase money
conventional mortgage market, or
refinance conventional mortgage market,
as applicable, serving each of the
types of families described in
subsection (a), relative to the size of
the overall purchase money mortgage
market or the overall refinance
mortgage market, respectively.
``(vii) The need to maintain the
sound financial condition of the
enterprises.
``(3) Authority to adjust targets.--The Director may,
by regulation, adjust the percentage targets previously
established by regulation pursuant to paragraph (2)(B)
for any year, to reflect subsequent available data and
market developments.
``(4) HMDA information.--The Director shall annually
obtain information submitted in compliance with the
Home Mortgage Disclosure Act of 1975 regarding
conventional, conforming, single-family, owner-
occupied, purchase money and refinance mortgages
originated and purchased for the previous year.
``(5) Conforming mortgages.--In determining whether a
mortgage is a conforming mortgage for purposes of this
paragraph, the Director shall consider the original
principal balance of the mortgage loan to be the
principal balance as reported in the information
referred to in paragraph (4), as rounded to the nearest
thousand dollars.
``(f) Notice of Determination and Enterprise Comment.--
``(1) Notice.--Within 30 days of making a
determination under subsection (d) regarding compliance
of an enterprise for a year with a housing goal
established under this section and before any public
disclosure thereof, the Director shall provide notice
of the determination to the enterprise, which shall
include an analysis and comparison, by the Director, of
the performance of the enterprise for the year and the
targets for the year under subsection (e).
``(2) Comment period.--The Director shall provide
each enterprise an opportunity to comment on the
determination during the 30-day period beginning upon
receipt by the enterprise of the notice.
``(g) Use of Borrower Income.--In monitoring the performance
of each enterprise pursuant to the housing goals under this
section and evaluating such performance (for purposes of
section 1336), the Director shall consider a mortgagor's income
to be such income at the time of origination of the mortgage.
``(h) Consideration of Properties With Rental Units.--
Mortgages financing two- to four-unit owner-occupied properties
shall count toward the achievement of the single-family housing
goals under this section, if such properties otherwise meet the
requirements under this section, notwithstanding the use of one
or more units for rental purposes.
``(i) Goals Credit.--The Director shall determine whether an
enterprise shall receive full, partial, or no credit for a
transaction toward achievement of any of the housing goals
established pursuant to section 1332 and 1333. In making any
such determination, the Director shall consider whether a
transaction or activity of an enterprise is substantially
equivalent to a mortgage purchase and either (1) creates a new
market, or (2) adds liquidity to an existing market. No credit
toward the achievement of the housing goals and subgoals
established under this section may be given to the purchase of
mortgages, including any transaction or activity of an
enterprise determined to be substantially equivalent to a
mortgage purchase, that is determined to be unacceptable or
contrary to good lending practices, inconsistent with safety
and soundness, or unauthorized for purchase by the enterprises,
pursuant to regulations issued by the Director.
``SEC. 1333. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.
``(a) Establishment of Goal.--
``(1) In general.--The Director shall, by regulation,
establish a single annual goal, by either unit or
dollar volume, of purchases by each enterprise of
mortgages on multifamily housing that finance dwelling
units affordable to low-income families.
``(2) Additional requirements for units affordable to
very low-income families.--When establishing the goal
under this section, the Director shall establish
additional requirements for the purchase by each
enterprise of mortgages on multifamily housing that
finance dwelling units affordable to very low-income
families.
``(3) Reporting on smaller properties.--The Director
shall require each enterprise to report on the purchase
by each enterprise of multifamily housing of a smaller
or limited size that is affordable to low-income
families, which may be based on multifamily projects of
5 to 50 units (as such numbers may be adjusted by the
Director) or on mortgages of up to $5,000,000 (as such
amount may be adjusted by the Director), and may, by
regulation, establish such aditional requirements
related to such units.
``(4) Factors.--In establishing the goal and
additional requirements under this section, the
Director shall not consider segments of the market
determined to be inconsistent with safety and soundness
or unauthorized for purchase by the enterprises, and
shall take into consideration--
``(A) national multifamily mortgage credit
needs and the ability of the enterprise to
provide additional liquidity and stability for
the multifamily mortgage market;
``(B) the performance and effort of the
enterprise in making mortgage credit available
for multifamily housing in previous years;
``(C) the size of the multifamily mortgage
market for housing affordable to low-income and
very low-income families, including the size of
the multifamily markets for housing of a
smaller or limited size;
``(D) the ability of the enterprise to lead
the market in making multifamily mortgage
credit available, especially for multifamily
housing described in paragraphs (1) and (2);
``(E) the availability of public subsidies;
and
``(F) the need to maintain the sound
financial condition of the enterprise.
``(b) Units Financed by Housing Finance Agency Bonds.--The
Director shall give full credit toward the achievement of the
multifamily special affordable housing goal under this section
(for purposes of section 1336) to dwelling units in multifamily
housing that otherwise qualifies under such goal and that is
financed by tax-exempt or taxable bonds issued by a State or
local housing finance agency, if such bonds, in whole or in
part--
``(1) are secured by a guarantee of the enterprise;
or
``(2) are purchased by the enterprise, except that
the Director may give less than full credit for
purchases of investment grade bonds, to the extent that
such purchases do not provide a new market or add
liquidity to an existing market.
``(c) Measurement of Performance.--The Director shall monitor
the performance of each enterprise in meeting the goals
established under this section and shall evaluate such
performance (for purposes of section 1336) based on whether the
rent levels are affordable. A rent level shall be considered to
be affordable for purposes of this subsection for low-income
families if it does not exceed 30 percent of the maximum income
level of such income category, with appropriate adjustments for
unit size as measured by the number of bedrooms.
``(d) Determination of Compliance.--The Director shall
determine, for each year that the housing goal under this
section is in effect pursuant to section 1331(a), whether each
enterprise has complied with such goal and the additional
requirements under subsection (a)(2).
``SEC. 1334. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.
``(a) Authority.--An enterprise may petition the Director in
writing at any time during a year to reduce the level of any
goal or subgoal for such year established pursuant to this
subpart.
``(b) Standard for Reduction.--The Director may reduce the
level for a goal or subgoal pursuant to such a petition only
if--
``(1) market and economic conditions or the financial
condition of the enterprise require such action; or
``(2) efforts to meet the goal or subgoal would
result in the constraint of liquidity, over-investment
in certain market segments, or other consequences
contrary to the intent of this subpart, or section
301(3) of the Federal National Mortgage Association
Charter Act (12 U.S.C. 1716(3)) or section 301(b)(3) of
the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1451 note), as applicable.
``(c) Determination.--The Director shall, promptly upon
receipt of a petition regarding a reduction, seek public
comment on the reduction for a period of 30 days. The Director
shall make a determination regarding any proposed reduction
within 30 days after the expiration of such public comment
period. The Director may extend such determination period for a
single additional 15-day period, but only if the Director
requests additional information from the enterprise.''.
(c) Conforming Amendments.--The Housing and Community
Development Act of 1992 is amended--_
(1) in section 1335(a) (12 U.S.C. 4565(a)), in the
matter preceding paragraph (1), by striking ``low- and
moderate-income housing goal'' and all that follows
through ``section 1334'' and inserting ``housing goals
established under this subpart''; and
(2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), by
striking ``sections 1332, 1333, and 1334,'' and
inserting ``this subpart''.
(d) Definitions.--Section 1303 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4502) is amended--
(1) by striking paragraph (24), as so designated by
section 1002 of this Act, and inserting the following:
``(24) 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 area
median income; and
``(ii) in the case of rental units,
families having incomes not greater
than 50 percent of the area median
income, with adjustments for smaller
and larger families, as determined by
the Director.
``(B) Rule of construction.--For purposes of
section 1338 and 1339, 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
area median income; and
``(ii) in the case of rental units,
income in excess of 30 percent but not
greater than 50 percent of the area
median income, with adjustments for
smaller and larger families, as
determined by the Director.''; and
(2) by adding at the end the following:
``(26) Conforming mortgage.--The term `conforming
mortgage' means, with respect to an enterprise, a
conventional mortgage having an original principal
obligation that does not exceed the dollar amount
limitation in effect at the time of such origination
and applicable to such mortgage, under, as applicable--
``(A) section 302(b)(2) of the Federal
National Mortgage Association Charter Act; or
``(B) section 305(a)(2) of the Federal Home
Loan Mortgage Corporation Act.
``(27) 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 area
median income; and
``(B) in the case of rental units, income not
in excess of 30 percent of the area median
income, with adjustments for smaller and larger
families, as determined by the Director.
``(28) Low-income area.--The term `low-income area'
means a census tract or block numbering area in which
the median income does not exceed 80 percent of the
median income for the area in which such census tract
or block numbering area is located, and, for the
purposes of section 1332(a)(1)(B), shall include
families having incomes not greater than 100 percent of
the area median income who reside in minority census
tracts and shall include families having incomes not
greater than 100 percent of the area median income who
reside in designated disaster areas.
``(29) Minority census tract.--The term `minority
census tract' means a census tract that has a minority
population of at least 30 percent and a median family
income of less than 100 percent of the area family
median income.
``(30) Shortage of standard rental units both
affordable and available to extremely low-income renter
households.--
``(A) In general.--The term `shortage of
standard rental units both affordable and
available to extremely low-income renter
households' means the gap between--
``(i) the number of units with
complete plumbing and kitchen
facilities with a rent that is 30
percent or less of 30 percent of the
adjusted area median income as
determined by the Director that are
occupied by extremely low-income renter
households or are vacant for rent; and
``(ii) the number of extremely low-
income renter households.
``(B) Rule of construction.--If the number of
units described in subparagraph (A)(i) exceeds
the number of extremely low-income households
as described in subparagraph (A)(ii), there is
no shortage.
``(31) Shortage of standard rental units both
affordable and available to very low-income renter
households.--
``(A) In general.--The term `shortage of
standard rental units both affordable and
available to very low-income renter households'
means the gap between--
``(i) the number of units with
complete plumbing and kitchen
facilities with a rent that is 30
percent or less of 50 percent of the
adjusted area median income as
determined by the Director that are
occupied by either extremely low- or
very low-income renter households or
are vacant for rent; and
``(ii) the number of extremely low-
and very low-income renter households.
``(B) Rule of construction.--If the number of
units described in subparagraph (A)(i) exceeds
the number of extremely low- and very low-
income households as described in subparagraph
(A)(ii), there is no shortage.''.
SEC. 1129. DUTY TO SERVE UNDERSERVED MARKETS.
(a) Establishment and Evaluation of Performance.--Section
1335 of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4565) is amended--
(1) in the section heading, by inserting ``duty to
serve underserved markets and'' before ``other'';
(2) by striking subsection (b);
(3) in subsection (a)--
(A) in the matter preceding paragraph (1), by
inserting ``and to carry out the duty under
subsection (a) of this section'' before ``,
each enterprise shall'';
(B) in paragraph (3), by inserting ``and''
after the semicolon at the end;
(C) in paragraph (4), by striking ``; and''
and inserting a period;
(D) by striking paragraph (5); and
(E) by redesignating such subsection as
subsection (b);
(4) by inserting before subsection (b) (as so
redesignated by paragraph (3)(E) of this subsection)
the following new subsection:
``(a) Duty to Serve Underserved Markets.--
``(1) Duty.--To increase the liquidity of mortgage
investments and improve the distribution of investment
capital available for mortgage financing for
underserved markets, each enterprise shall provide
leadership to the market in developing loan products
and flexible underwriting guidelines to facilitate a
secondary market for mortgages for very low-, low-, and
moderate-income families with respect to the following
underserved markets:
``(A) Manufactured housing.--The enterprise
shall develop loan products and flexible
underwriting guidelines to facilitate a
secondary market for mortgages on manufactured
homes for very low-, low-, and moderate-income
families.
``(B) Affordable housing preservation.--The
enterprise shall develop loan products and
flexible underwriting guidelines to facilitate
a secondary market to preserve housing
affordable to very low-, low-, and moderate-
income families, including housing projects
subsidized under_
``(i) the project-based and tenant-
based rental assistance programs under
section 8 of the United States Housing
Act of 1937;
``(ii) the program under section 236
of the National Housing Act;
``(iii) the below-market interest
rate mortgage program under section
221(d)(4) of the National Housing Act;
``(iv) the supportive housing for the
elderly program under section 202 of
the Housing Act of 1959;
``(v) the supportive housing program
for persons with disabilities under
section 811 of the Cranston-Gonzalez
National Affordable Housing Act;
``(vi) the programs under title IV of
the McKinney-Vento Homeless Assistance
Act (42 U.S.C. 11361 et seq.), but only
permanent supportive housing projects
subsidized under such programs;
``(vii) the rural rental housing
program under section 515 of the
Housing Act of 1949;
``(viii) the low-income housing tax
credit under section 42 of the Internal
Revenue Code of 1986; and
``(ix) comparable state and local
affordable housing programs.
``(C) Rural markets.--The enterprise shall
develop loan products and flexible underwriting
guidelines to facilitate a secondary market for
mortgages on housing for very low-, and low-,
and moderate-income families in rural areas.'';
and
(5) by adding at the end the following new
subsections:
``(c) Additional Categories.--The Director may submit
recommendations to the Committee on Financial Services of the
House of Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate for the establishment of
additional categories under subsection (a), provided that the
Director makes a preliminary determination that any such
category is important to the mission of the enterprises, that
the category is an underserved market, and that the
establishment of such category is warranted.
``(d) Evaluation and Reporting of Compliance.--
``(1) In general.--The Director shall, by regulation,
establish effective for 2010 and thereafter a manner
for evaluating whether, and the extent to which, the
enterprises have complied with the duty under
subsection (a) to serve underserved markets and for
rating the extent of such compliance. Using such
method, the Director shall, for 2010 and each year
thereafter, evaluate such compliance and rate the
performance of each enterprise as to extent of
compliance. The Director shall include such evaluation
and rating for each enterprise for a year in the report
for that year submitted pursuant to section 1319B(a).
``(2) Separate evaluations.--In determining whether
an enterprise has complied with the duty referred to in
paragraph (1), the Director shall separately evaluate
whether the enterprise has complied with such duty with
respect to each of the underserved markets identified
in subsection (a), taking into consideration_
``(A) the development of loan products, more
flexible underwriting guidelines, and other
innovative approaches to providing financing to
each of such underserved markets;
``(B) the extent of outreach to qualified
loan sellers and other market participants in
each of such underserved markets;
``(C) the volume of loans purchased in each
of such underserved markets relative to the
market opportunities available to the
enterprise, except that the Director shall not
establish specific quantitative targets nor
evaluate the enterprises based solely on the
volume of loans purchased; and
``(D) the amount of investments and grants in
projects which assist in meeting the needs of
such underserved markets.
``(3) Manufactured housing market.--In determining
whether an enterprise has complied with the duty under
subparagraph (A) of subsection (a)(1), the Director may
consider loans secured by both real and personal
property.
``(4) Prohibition of consideration of affordable
housing fund grants for meeting duty to serve.-- In
determining whether an enterprise has complied with the
duty referred to in paragraph (1), the Director may not
consider any affordable housing fund grant amounts used
under section 1337 for eligible activities under
subsection (g) of such section.''.
(b) Enforcement.--Subsection (a) of section 1336 of the
Housing and Community Development Act of 1992 (12 U.S.C.
4566(a)) is amended--
(1) in paragraph (1), by inserting ``and with the
duty under section 1335(a) of each enterprise with
respect to underserved markets,'' before ``as provided
in this section''; and
(2) by adding at the end of such subsection, as
amended by the preceding provisions of this title, the
following new paragraph:
``(4) Enforcement of duty to provide mortgage credit
to underserved markets.--The duty under section 1335(a)
of each enterprise to serve underserved markets (as
determined in accordance with section 1335(c)) shall be
enforceable under this section to the same extent and
under the same provisions that the housing goals
established under this subpart are enforceable. Such
duty shall be enforceable only under this section,
except that such duty shall not be subject to
subsection (c)(7) of this section and shall not be
enforceable under any other provision of this title
(including subpart C of this part) or under any
provision of the Federal National Mortgage Association
Charter Act or the Federal Home Loan Mortgage
Corporation Act.''.
(c) Additional Credit for Certain Mortgages.--Section 1336(a)
of the Housing and Community Development Act of 1992 (12 U.S.C.
4566(a)) is amended_
(1) in paragraph (2), by inserting ``, except as
provided in paragraph (5),'' after ``which''; and
(2) by adding at the end the following new paragraph:
``(5) Additional credit.--The Director may assign
additional credit toward achievement, under this
section, of the housing goals for mortgage purchase
activities of the enterprises that comply with the
requirements of such goals and support housing that
includes a licensed childcare center. The availability
of additional credit under this paragraph shall not be
used to increase any housing goal, subgoal, or target
established under this subpart.''.
SEC. 1130. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING GOALS.
(a) In General.--Section 1336 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4566) is amended by striking subsections (b) and (c) and
inserting the following:
``(b) Notice and Preliminary Determination of Failure To Meet
Goals.--
``(1) Notice.--If the Director preliminarily
determines that an enterprise has failed, or that there
is a substantial probability that an enterprise will
fail, to meet any housing goal under this subpart, the
Director shall provide written notice to the enterprise
of such a preliminary determination, the reasons for
such determination, and the information on which the
Director based the determination.
``(2) Response period.--
``(A) In general.--During the 30-day period
beginning on the date on which an enterprise is
provided notice under paragraph (1), the
enterprise may submit to the Director any
written information that the enterprise
considers appropriate for consideration by the
Director in finally determining whether such
failure has occurred or whether the achievement
of such goal was or is feasible.
``(B) Extended period.--The Director may
extend the period under subparagraph (A) for
good cause for not more than 30 additional
days.
``(C) Shortened period.--The Director may
shorten the period under subparagraph (A) for
good cause.
``(D) Failure to respond.--The failure of an
enterprise to provide information during the
30-day period under this paragraph (as extended
or shortened) shall waive any right of the
enterprise to comment on the proposed
determination or action of the Director.
``(3) Consideration of information and final
determination.--
``(A) In general.--After the expiration of
the response period under paragraph (2), or
upon receipt of information provided during
such period by the enterprise, whichever occurs
earlier, the Director shall issue a final
determination on--
``(i) whether the enterprise has
failed, or there is a substantial
probability that the enterprise will
fail, to meet the housing goal; and
``(ii) whether (taking into
consideration market and economic
conditions and the financial condition
of the enterprise) the achievement of
the housing goal was or is feasible.
``(B) Considerations.--In making a final
determination under subparagraph (A), the
Director shall take into consideration any
relevant information submitted by the
enterprise during the response period.
``(C) Notice.--The Director shall provide
written notice, including a response to any
information submitted during the response
period, to the enterprise, the Committee on
Banking, Housing, and Urban Affairs of the
Senate, and the Committee on Financial Services
of the House of Representatives, of--
``(i) each final determination under
this paragraph that an enterprise has
failed, or that there is a substantial
probability that the enterprise will
fail, to meet a housing goal;
``(ii) each final determination that
the achievement of a housing goal was
or is feasible; and
``(iii) the reasons for each such
final determination.
``(c) Cease and Desist, Civil Money Penalties, and Remedies
Including Housing Plans.--
``(1) Requirement.--If the Director finds, pursuant
to subsection (b), that there is a substantial
probability that an enterprise will fail, or has
actually failed, to meet any housing goal under this
subpart, and that the achievement of the housing goal
was or is feasible, the Director may require that the
enterprise submit a housing plan under this subsection.
If the Director makes such a finding and the enterprise
refuses to submit such a plan, submits an unacceptable
plan, or fails to comply with the plan, the Director
may issue a cease and desist order in accordance with
section 1341 and impose civil money penalties in
accordance with section 1345.
``(2) Housing plan.--If the Director requires a
housing plan under this subsection, such a plan shall
be--
``(A) a feasible plan describing the specific
actions the enterprise will take--
``(i) to achieve the goal for the
next calendar year; and
``(ii) if the Director determines
that there is a substantial probability
that the enterprise will fail to meet a
goal in the current year, to make such
improvements and changes in its
operations as are reasonable in the
remainder of such year; and
``(B) sufficiently specific to enable the
Director to monitor compliance periodically.
``(3) Deadline for submission.--The Director shall
establish a deadline for an enterprise to submit a
housing plan to the Director, which may not be more
than 45 days after the enterprise is provided notice.
The Director may extend the deadline to the extent that
the Director determines necessary. Any extension of the
deadline shall be in writing and for a time certain.
``(4) Approval.--The Director shall review each
submission by an enterprise, including a housing plan
submitted under this subsection, and, not later than 30
days after submission, approve or disapprove the plan
or other action. The Director may extend the period for
approval or disapproval for a single additional 30-day
period if the Director determines it necessary. The
Director shall approve any plan that the Director
determines is likely to succeed, and conforms with the
Federal National Mortgage Association Charter Act or
the Federal Home Loan Mortgage Corporation Act (as
applicable), this title, and any other applicable
provision of law.
``(5) Notice of approval and disapproval.--The
Director shall provide written notice to any enterprise
submitting a housing plan of the approval or
disapproval of the plan (which shall include the
reasons for any disapproval of the plan) and of any
extension of the period for approval or disapproval.
``(6) Resubmission.--If the initial housing plan
submitted by an enterprise under this section is
disapproved, the enterprise shall submit an amended
plan acceptable to the Director not later than 15 days
after such disapproval, or such longer period that the
Director determines is in the public interest.
``(7) Cease and desist orders; civil money
penalties.--Solely with respect to the housing goals
established under sections 1332(a) and 1333(a)(1), if
the Director requires an enterprise to submit a housing
plan under this subsection and the enterprise refuses
to submit such a plan, submits an unacceptable plan, or
fails to comply with the plan, the Director may issue a
cease and desist order in accordance with section 1341,
impose civil money penalties in accordance with section
1345, exercise other appropriate enforcement authority
or seek other appropriate actions.''.
(b) Conforming Amendment.--The heading for subpart C of part
2 of subtitle A of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 is amended to read as follows:
``Subpart C--Enforcement''.
(c) Cease and Desist Proceedings .--
(1) Repeal.--Section 1341 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4581) is hereby repealed.
(2) Cease and desist proceedings.--The Federal
Housing Enterprises Financial Safety and Soundness Act
of 1992 is amended by inserting before section 1342 the
following:
``SEC. 1341. CEASE AND DESIST PROCEEDINGS.
``(a) Grounds for Issuance.--The Director may issue and serve
a notice of charges under this section upon an enterprise if
the Director determines that--
``(1) the enterprise has failed to submit a report
under section 1327, following a notice of such failure,
an opportunity for comment by the enterprise, and a
final determination by the Director;
``(2) the enterprise has failed to submit the
information required under subsection (m) or (n) of
section 309 of the Federal National Mortgage
Association Charter Act, or subsection (e) or (f) of
section 307 of the Federal Home Loan Mortgage
Corporation Act;
``(3) solely with respect to the housing goals
established under sections 1332(a) and 1333(a)(1), the
enterprise has failed to submit a housing plan that
complies with section 1336(c) within the applicable
period; or
``(4) solely with respect to the housing goals
established under sections 1332(a) and 1333(a)(1), the
enterprise has failed to comply with a housing plan
under section 1336(c).
``(b) Procedure.--
``(1) Notice of charges.--Each notice of charges
issued under this section shall contain a statement of
the facts constituting the alleged conduct and shall
fix a time and place at which a hearing will be held to
determine on the record whether an order to cease and
desist from such conduct should issue.
``(2) Issuance of order.--If the Director finds on
the record made at a hearing described in paragraph (1)
that any conduct specified in the notice of charges has
been established (or the enterprise consents pursuant
to section 1342(a)(4)), the Director may issue and
serve upon the enterprise an order requiring the
enterprise to--
``(A) submit a report under section 1327;
``(B) solely with respect to the housing
goals established under sections 1332(a) and
1333(a)(1), submit a housing plan in compliance
with section 1336(c);
``(C) solely with respect to the housing
goals established under sections 1332(a) and
1333(a)(1), comply with the housing plan in
compliance with section 1336(c); or
``(D) provide the information required under
subsection (m) or (n) of section 309 of the
Federal National Mortgage Association Charter
Act, or subsection (e) or (f) of section 307 of
the Federal Home Loan Mortgage Corporation Act.
``(c) Effective Date.--An order under this section shall
become effective upon the expiration of the 30-day period
beginning on the date of service of the order upon the
enterprise (except in the case of an order issued upon consent,
which shall become effective at the time specified therein),
and shall remain effective and enforceable as provided in the
order, except to the extent that the order is stayed, modified,
terminated, or set aside by action of the Director or
otherwise, as provided in this subpart.''.
(d) Civil Money Penalties.--
(1) Repeal.--Section 1345 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992
(12 U.S.C. 4585) is hereby repealed.
(2) Civil money penalties.--The Federal Housing
Enterprises Financial Safety and Soundness Act of 1992
is amended by inserting after section 1344 the
following:
``SEC. 1345. CIVIL MONEY PENALTIES.
``(a) Authority.--The Director may impose a civil money
penalty, in accordance with the provisions of this section, on
any enterprise that has failed to--
``(1) submit a report under section 1327, following a
notice of such failure, an opportunity for comment by
the enterprise, and a final determination by the
Director;
``(2) submit the information required under
subsection (m) or (n) of section 309 of the Federal
National Mortgage Association Charter Act or subsection
(e) or (f) of section 307 of the Federal Home Loan
Mortgage Corporation Act;
``(3) solely with respect to the housing goals
established under sections 1332(a) and 1333(a)(1),
submit a housing plan or perform its responsibilities
under a remedial order issued pursuant to section
1336(c) within the required period; or
``(4) solely with respect to the housing goals
established under sections 1332(a) and 1333(a)(1),
comply with a housing plan for the enterprise under
section 1336(c).
``(b) Amount of Penalty.--The amount of a penalty under this
section, as determined by the Director, may not exceed--
``(1) for any failure described in paragraph (1),
(5), or (6) of subsection (a), $100,000 for each day
that the failure occurs; and
``(2) for any failure described in paragraph (2),
(3), or (4) of subsection (a), $50,000 for each day
that the failure occurs.
``(c) Procedures.--
``(1) Establishment.--The Director shall establish
standards and procedures governing the imposition of
civil money penalties under this section. Such
standards and procedures--
``(A) shall provide for the Director to
notify the enterprise in writing of the
determination of the Director to impose the
penalty, which shall be made on the record;
``(B) shall provide for the imposition of a
penalty only after the enterprise has been
given an opportunity for a hearing on the
record pursuant to section 1342; and
``(C) may provide for review by the Director
of any determination or order, or interlocutory
ruling, arising from a hearing.
``(2) Factors in determining amount of penalty.--In
determining the amount of a penalty under this section,
the Director shall give consideration to factors
including--
``(A) the gravity of the offense;
``(B) any history of prior offenses;
``(C) ability to pay the penalty;
``(D) injury to the public;
``(E) benefits received;
``(F) deterrence of future violations;
``(G) the length of time that the enterprise
should reasonably take to achieve the goal; and
``(H) such other factors as the Director may
determine, by regulation, to be appropriate.
``(d) Action to Collect Penalty.--If an enterprise fails to
comply with an order by the Director imposing a civil money
penalty under this section, after the order is no longer
subject to review, as provided in sections 1342 and 1343, the
Director may bring an action in the United States District
Court for the District of Columbia to obtain a monetary
judgment against the enterprise, 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.
``(e) Settlement by Director.--The Director may compromise,
modify, or remit any civil money penalty which may be, or has
been, imposed under this section.
``(f) Deposit of Penalties.--The Director shall use any civil
money penalties collected under this section to help fund the
Housing Trust Fund established under section 1338.''.
(e) Director Authority.--
(1) Authority to bring a civil action.--Section
1344(a) of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4584) is
amended by striking ``The Secretary may request the
Attorney General of the United States to bring a civil
action'' and inserting ``The Director may bring a civil
action''.
(2) Subpoena enforcement.--Section 1348(c) of the
Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4588(c)) is amended by
inserting ``may bring an action or'' before ``may
request''.
(3) Conforming amendments.--Subpart C of part 2 of
subtitle A of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4581 et
seq.) is amended by striking ``Secretary'' each place
that term appears and inserting ``Director'' in each
of--
(A) section 1342 (12 U.S.C. 4582);
(B) section 1343 (12 U.S.C. 4583);
(C) section 1346 (12 U.S.C. 4586);
(D) section 1347 (12 U.S.C. 4587); and
(E) section 1348 (12 U.S.C. 4588).
SEC. 1131. AFFORDABLE HOUSING PROGRAMS.
(a) Repeal.--Section 1337 of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4567) is
hereby repealed.
(b) Annual Housing Report.--The Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 1301 et
seq.) is amended by inserting after section 1336 the following:
``SEC. 1337. AFFORDABLE HOUSING ALLOCATIONS.
``(a) Set Aside and Allocation of Amounts by Enterprises.--
Subject to subsection (b), in each fiscal year--
``(1) the Federal Home Loan Mortgage Corporation
shall--
``(A) set aside an amount equal to 4.2 basis
points for each dollar of the unpaid principal
balance of its total new business purchases;
and
``(B) allocate or otherwise transfer--
``(i) 65 percent of such amounts to
the Secretary of Housing and Urban
Development to fund the Housing Trust
Fund established under section 1338;
and
``(ii) 35 percent of such amounts to
fund the Capital Magnet Fund
established pursuant to section 1339;
and
``(2) the Federal National Mortgage Association
shall--
``(A) set aside an amount equal to 4.2 basis
points for each dollar of unpaid principal
balance of its total new business purchases;
and
``(B) allocate or otherwise transfer--
``(i) 65 percent of such amounts to
the Secretary of Housing and Urban
Development to fund the Housing Trust
Fund established under section 1338;
and
``(ii) 35 percent of such amounts to
fund the Capital Magnet Fund
established pursuant to section 1339.
``(b) Suspension of Contributions.--The Director shall
temporarily suspend allocations under subsection (a) by an
enterprise upon a finding by the Director that such
allocations--
``(1) are contributing, or would contribute, to the
financial instability of the enterprise;
``(2) are causing, or would cause, the enterprise to
be classified as undercapitalized; or
``(3) are preventing, or would prevent, the
enterprise from successfully completing a capital
restoration plan under section 1369C.
``(c) Prohibition of Pass-Through of Cost of Allocations.--
The Director shall, by regulation, prohibit each enterprise
from redirecting the costs of any allocation required under
this section, through increased charges or fees, or decreased
premiums, or in any other manner, to the originators of
mortgages purchased or securitized by the enterprise.
``(d) Enforcement of Requirements on Enterprise.--Compliance
by the enterprises with the requirements under this section
shall be enforceable under subpart C. Any reference in such
subpart to this part or to an order, rule, or regulation under
this part specifically includes this section and any order,
rule, or regulation under this section.
``(e) Required Amount for HOPE Reserve Fund.--Of the
aggregate amount allocated under subsection (a), 25 percent
shall be deposited into a fund established in the Treasury of
the United States by the Secretary of the Treasury for such
purpose.
``(f) Limitation.--No funds under this title may be used in
conjunction with property taken by eminent domain, unless
eminent domain is employed only for a public use, except that,
for purposes of this section, public use shall not be construed
to include economic development that primarily benefits any
private entity.
``SEC. 1338. HOUSING TRUST FUND.
``(a) Establishment and Purpose.--
``(1) In general.--The Secretary of Housing and Urban
Development (in this section referred to as the
`Secretary') shall establish and manage a Housing Trust
Fund, which shall be funded with amounts allocated by
the enterprises under section 1337 and any amounts as
are or may be appropriated, transferred, or credited to
such Housing Trust Fund under any other provisions of
law. The purpose of the Housing Trust Fund under this
section is to provide grants to States (as such term is
defined in section 1303) for use--
``(A) to increase and preserve the supply of
rental housing for extremely low- and very low-
income families, including homeless families;
and
``(B) to increase homeownership for extremely
low- and very low-income families.
``(2) Federal assistance.--For purposes of the
application of Federal civil rights laws, all
assistance provided from the Housing Trust Fund shall
be considered Federal financial assistance.
``(b) Allocations for HOPE Bond Payments.--
``(1) In general.--Notwithstanding subsection (c), to
help address the mortgage crisis, of the amounts
allocated pursuant to clauses (i) and (ii) of section
1337(a)(1)(B) and clauses (i) and (ii) of section
1337(a)(2)(B) in excess of amounts described in section
1337(e)--
``(A) 100 percent of such excess shall be
used to reimburse the Treasury for payments
made pursuant to section 257(w)(1)(C) of the
National Housing Act in calendar year 2009;
``(B) 50 percent of such excess shall be used
to reimburse the Treasury for such payments in
calendar year 2010; and
``(C) 25 percent of such excess shall be used
to reimburse the Treasury for such payments in
calendar year 2011.
``(2) Excess funds.--At the termination of the HOPE
for Homeowners Program established under section 257 of
the National Housing Act, if amounts used to reimburse
the Treasury under paragraph (1) exceed the total net
cost to the Government of the HOPE for Homeowners
Program, such amounts shall be used for their original
purpose, as described in paragraphs (1)(B) and (2)(B)
of section 1337(a).
``(3) Treasury fund.--The amounts referred to in
subparagraphs (A) through (C) of paragraph (1) shall be
deposited into a fund established in the Treasury of
the United States by the Secretary of the Treasury for
such purpose.
``(c) Allocation for Housing Trust Fund in Fiscal Year 2010
and Subsequent Years.--
``(1) In general.--Except as provided in subsection
(b), the Secretary shall distribute the amounts
allocated for the Housing Trust Fund under this section
to provide affordable housing as described in this
subsection.
``(2) Permissible designees.--A State receiving grant
amounts under this subsection may designate a State
housing finance agency, housing and community
development entity, tribally designated housing entity
(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)), or any other qualified
instrumentality of the State to receive such grant
amounts.
``(3) Distribution to states by needs-based
formula.--
``(A) In general.--The Secretary shall, by
regulation, establish a formula within 12
months of the date of enactment of the Federal
Housing Finance Regulatory Reform Act of 2008,
to distribute amounts made available under this
subsection to each State to provide affordable
housing to extremely low- and very low-income
households.
``(B) Basis for formula.--The formula
required under subparagraph (A) shall include
the following:
``(i) The ratio of the shortage of
standard rental units both affordable
and available to extremely low-income
renter households in the State to the
aggregate shortage of standard rental
units both affordable and available to
extremely low-income renter households
in all the States.
``(ii) The ratio of the shortage of
standard rental units both affordable
and available to very low-income renter
households in the State to the
aggregate shortage of standard rental
units both affordable and available to
very low-income renter households in
all the States.
``(iii) The ratio of extremely low-
income renter households in the State
living with either (I) incomplete
kitchen or plumbing facilities, (II)
more than 1 person per room, or (III)
paying more than 50 percent of income
for housing costs, to the aggregate
number of extremely low-income renter
households living with either (IV)
incomplete kitchen or plumbing
facilities, (V) more than 1 person per
room, or (VI) paying more than 50
percent of income for housing costs in
all the States.
``(iv) The ratio of very low-income
renter households in the State paying
more than 50 percent of income on rent
relative to the aggregate number of
very low-income renter households
paying more than 50 percent of income
on rent in all the States.
``(v) The resulting sum calculated
from the factors described in clauses
(i) through (iv) shall be multiplied by
the relative cost of construction in
the State. For purposes of this
subclause, the term `cost of
construction'--
``(I) means the cost of
construction or building
rehabilitation in the State
relative to the national cost
of construction or building
rehabilitation; and
``(II) shall be calculated
such that values higher than
1.0 indicate that the State's
construction costs are higher
than the national average, a
value of 1.0 indicates that the
State's construction costs are
exactly the same as the
national average, and values
lower than 1.0 indicate that
the State's cost of
construction are lower than the
national average.
``(C) Priority.--The formula required under
subparagraph (A) shall give priority emphasis
and consideration to the factor described in
subparagraph (B)(i).
``(4) Allocation of grant amounts.--
``(A) Notice.--Not later than 60 days after
the date that the Secretary determines the
formula amounts described in paragraph (3), the
Secretary shall caused to be published in the
Federal Register a notice that such amounts
shall be so available.
``(B) Grant amount.--In each fiscal year
other than fiscal year 2009, the Secretary
shall make a grant to each State in an amount
that is equal to the formula amount determined
under paragraph (3) for that State.
``(C) Minimum state allocations.--If the
formula amount determined under paragraph (3)
for a fiscal year would allocate less than
$3,000,000 to any of the 50 States of the
United States or the District of Columbia, the
allocation for such State of the United States
or the District of Columbia shall be
$3,000,000, and the increase shall be deducted
pro rata from the allocations made to all other
of the States (as such term is defined in
section 1303).
``(5) Allocation plans required.--
``(A) In general.--For each year that a State
or State designated entity receives a grant
under this subsection, the State or State
designated entity shall establish an allocation
plan. Such plan shall--
``(i) set forth a plan for the
distribution of grant amounts received
by the State or State designated entity
for such year;
``(ii) be based on priority housing
needs, as determined by the State or
State designated entity in accordance
with the regulations established under
subsection (g)(2)(D);
``(iii) comply with paragraph (6);
and
``(iv) include performance goals that
comply with the requirements
established by the Secretary pursuant
to subsection (g)(2).
``(B) Establishment.--In establishing an
allocation plan under this paragraph, a State
or State designated entity shall--
``(i) notify the public of the
establishment of the plan;
``(ii) provide an opportunity for
public comments regarding the plan;
``(iii) consider any public comments
received regarding the plan; and
``(iv) make the completed plan
available to the public.
``(C) Contents.--An allocation plan of a
State or State designated entity under this
paragraph shall set forth the requirements for
eligible recipients under paragraph (8) to
apply for such grant amounts, including a
requirement that each such application
include--
``(i) a description of the eligible
activities to be conducted using such
assistance; and
``(ii) a certification by the
eligible recipient applying for such
assistance that any housing units
assisted with such assistance will
comply with the requirements under this
section.
``(6) Selection of activities funded using housing
trust fund grant amounts.--Grant amounts received by a
State or State designated entity under this subsection
may be used, or committed for use, only for activities
that--
``(A) are eligible under paragraph (7) for
such use;
``(B) comply with the applicable allocation
plan of the State or State designated entity
under paragraph (5); and
``(C) are selected for funding by the State
or State designated entity in accordance with
the process and criteria for such selection
established pursuant to subsection (g)(2)(D).
``(7) Eligible activities.--Grant amounts allocated
to a State or State designated entity under this
subsection shall be eligible for use, or for commitment
for use, only for assistance for--
``(A) the production, preservation, and
rehabilitation of rental housing, including
housing under the programs identified in
section 1335(a)(2)(B) and for operating costs,
except that not less than 75 percent of such
grant amounts shall be used for the benefit
only of extremely low-income families or
families with incomes at or below the poverty
line (as such term is defined in section 673 of
the Omnibus Budget Reconciliation Act of 1981
(42 U.S.C. 9902), including any revision
required by such section) applicable to a
family of the size involved, and not more than
25 percent for the benefit only of very low-
income families; and
``(B) the production, preservation, and
rehabilitation of housing for homeownership,
including such forms as down payment
assistance, closing cost assistance, and
assistance for interest rate buy-downs, that--
``(i) is available for purchase only
for use as a principal residence by
families that qualify both as--
``(I) extremely low- and very
low-income families at the
times described in
subparagraphs (A) through (C)
of section 215(b)(2) of the
Cranston-Gonzalez National
Affordable Housing Act (42
U.S.C. 12745(b)(2)); and
``(II) first-time homebuyers,
as such term is defined in
section 104 of the Cranston-
Gonzalez National Affordable
Housing Act (42 U.S.C. 12704),
except that any reference in
such section to assistance
under title II of such Act
shall for purposes of this
subsection be considered to
refer to assistance from
affordable housing fund grant
amounts;
``(ii) has an initial purchase price
that meets the requirements of section
215(b)(1) of the Cranston-Gonzalez
National Affordable Housing Act;
``(iii) is subject to the same resale
restrictions established under section
215(b)(3) of the Cranston-Gonzalez
National Affordable Housing Act and
applicable to the participating
jurisdiction that is the State in which
such housing is located; and
``(iv) is made available for purchase
only by, or in the case of assistance
under this subsection, is made
available only to homebuyers who have,
before purchase completed a program of
independent financial education and
counseling from an eligible
organization that meets the
requirements of section 132 of the
Federal Housing Finance Regulatory
Reform Act of 2008.
``(8) Tenant protections and public participation.--
All amounts from the Trust Fund shall be allocated in
accordance with, and any eligible activities carried
out in whole or in part with grant amounts under this
subtitle (including housing provided with such grant
amounts) shall comply with and be operated in
compliance with--
``(A) laws relating to tenant protections and
tenant rights to participate in decision making
regarding their residences;
``(B) laws requiring public participation,
including laws relating to Consolidated Plans,
Qualified Allocation Plans, and Public Housing
Agency Plans; and
``(C) fair housing laws and laws regarding
accessibility in federally assisted housing,
including section 504 of the Rehabilitation Act
of 1973.
``(9) Eligible recipients.--Grant amounts allocated
to a State or State designated entity under this
subsection may be provided only to a recipient that is
an organization, agency, or other entity (including a
for-profit entity or a nonprofit entity) that--
``(A) has demonstrated experience and
capacity to conduct an eligible activity under
paragraph (7), as evidenced by its ability to--
``(i) own, construct or rehabilitate,
manage, and operate an affordable
multifamily rental housing development;
``(ii) design, construct or
rehabilitate, and market affordable
housing for homeownership; or
``(iii) provide forms of assistance,
such as down payments, closing costs,
or interest rate buy-downs for
purchasers;
``(B) demonstrates the ability and financial
capacity to undertake, comply, and manage the
eligible activity;
``(C) demonstrates its familiarity with the
requirements of any other Federal, State, or
local housing program that will be used in
conjunction with such grant amounts to ensure
compliance with all applicable requirements and
regulations of such programs; and
``(D) makes such assurances to the State or
State designated entity as the Secretary shall,
by regulation, require to ensure that the
recipient will comply with the requirements of
this subsection during the entire period that
begins upon selection of the recipient to
receive such grant amounts and ending upon the
conclusion of all activities under paragraph
(8) that are engaged in by the recipient and
funded with such grant amounts.
``(10) Limitations on use.--
``(A) Required amount for homeownership
activities.--Of the aggregate amount allocated
to a State or State designated entity under
this subsection not more than 10 percent shall
be used for activities under subparagraph (B)
of paragraph (7).
``(B) Deadline for commitment or use.--Grant
amounts allocated to a State or State
designated entity under this subsection shall
be used or committed for use within 2 years of
the date that such grant amounts are made
available to the State or State designated
entity. The Secretary shall recapture any such
amounts not so used or committed for use and
reallocate such amounts under this subsection
in the first year after such recapture.
``(C) Use of returns.--The Secretary shall,
by regulation, provide that any return on a
loan or other investment of any grant amount
used by a State or State designated entity to
provide a loan under this subsection shall be
treated, for purposes of availability to and
use by the State or State designated entity, as
a grant amount authorized under this
subsection.
``(D) Prohibited uses.--The Secretary shall,
by regulation--
``(i) set forth prohibited uses of
grant amounts allocated under this
subsection, which shall include use
for--
``(I) political activities;
``(II) advocacy;
``(III) lobbying, whether
directly or through other
parties;
``(IV) counseling services;
``(V) travel expenses; and
``(VI) preparing or providing
advice on tax returns;
and for the purposes of this
subparagraph, the prohibited use of
funds for political activities includes
influencing the selection, nomination,
election, or appointment of one or more
candidates to any Federal, State or
local office as codified in section 501
of the Internal Revenue Code of 1986
(26 U.S.C. 501);
``(ii) provide that, except as
provided in clause (iii), grant amounts
of a State or State designated entity
may not be used for administrative,
outreach, or other costs of--
``(I) the State or State
designated entity; or
``(II) any other recipient of
such grant amounts; and
``(iii) limit the amount of any grant
amounts for a year that may be used by
the State or State designated entity
for administrative costs of carrying
out the program required under this
subsection, including home ownership
counseling, to a percentage of such
grant amounts of the State or State
designated entity for such year, which
may not exceed 10 percent.
``(E) Prohibition of consideration of use for
meeting housing goals or duty to serve.--In
determining compliance with the housing goals
under this subpart and the duty to serve
underserved markets under section 1335, the
Director may not consider any grant amounts
used under this section for eligible activities
under paragraph (7). The Director shall give
credit toward the achievement of such housing
goals and such duty to serve underserved
markets to purchases by the enterprises of
mortgages for housing that receives funding
from such grant amounts, but only to the extent
that such purchases by the enterprises are
funded other than with such grant amounts.
``(d) Reduction for Failure to Obtain Return of Misused
Funds.--If in any year a State or State designated entity fails
to obtain reimbursement or return of the full amount required
under subsection (e)(1)(B) to be reimbursed or returned to the
State or State designated entity during such year--
``(1) except as provided in paragraph (2)--
``(A) the amount of the grant for the State
or State designated entity for the succeeding
year, as determined pursuant to this section,
shall be reduced by the amount by which such
amounts required to be reimbursed or returned
exceed the amount actually reimbursed or
returned; and
``(B) the amount of the grant for the
succeeding year for each other State or State
designated entity whose grant is not reduced
pursuant to subparagraph (A) shall be increased
by the amount determined by applying the
formula established pursuant to this section to
the total amount of all reductions for all
State or State designated entities for such
year pursuant to subparagraph (A); or
``(2) in any case in which such failure to obtain
reimbursement or return occurs during a year
immediately preceding a year in which grants under this
section will not be made, the State or State designated
entity shall pay to the Secretary for reallocation
among the other grantees an amount equal to the amount
of the reduction for the entity that would otherwise
apply under paragraph (1)(A).
``(e) Accountability of Recipients and Grantees.--
``(1) Recipients.--
``(A) Tracking of funds.--The Secretary
shall--
``(i) require each State or State
designated entity to develop and
maintain a system to ensure that each
recipient of assistance under this
section uses such amounts in accordance
with this section, the regulations
issued under this section, and any
requirements or conditions under which
such amounts were provided; and
``(ii) establish minimum requirements
for agreements, between the State or
State designated entity and recipients,
regarding assistance under this
section, which shall include--
``(I) appropriate periodic
financial and project
reporting, record retention,
and audit requirements for the
duration of the assistance to
the recipient to ensure
compliance with the limitations
and requirements of this
section and the regulations
under this section; and
``(II) any other requirements
that the Secretary determines
are necessary to ensure
appropriate administration and
compliance.
``(B) Misuse of funds.--
``(i) Reimbursement requirement.--If
any recipient of assistance under this
section is determined, in accordance
with clause (ii), to have used any such
amounts in a manner that is materially
in violation of this section, the
regulations issued under this section,
or any requirements or conditions under
which such amounts were provided, the
State or State designated entity shall
require that, within 12 months after
the determination of such misuse, the
recipient shall reimburse the State or
State designated entity for such
misused amounts and return to the State
or State designated entity any such
amounts that remain unused or
uncommitted for use. The remedies under
this clause are in addition to any
other remedies that may be available
under law.
``(ii) Determination.--A
determination is made in accordance
with this clause if the determination
is made by the Secretary or made by the
State or State designated entity,
provided that--
``(I) the State or State
designated entity provides
notification of the
determination to the Secretary
for review, in the discretion
of the Secretary, of the
determination; and
``(II) the Secretary does not
subsequently reverse the
determination.
``(2) Grantees.--
``(A) Report.--
``(i) In general.--The Secretary
shall require each State or State
designated entity receiving grant
amounts in any given year under this
section to submit a report, for such
year, to the Secretary that--
``(I) describes the
activities funded under this
section during such year with
such grant amounts; and
``(II) the manner in which
the State or State designated
entity complied during such
year with any allocation plan
established pursuant to
subsection (c).
``(ii) Public availability.--The
Secretary shall make such reports
pursuant to this subparagraph publicly
available.
``(B) Misuse of funds.--If the Secretary
determines, after reasonable notice and
opportunity for hearing, that a State or State
designated entity has failed to comply
substantially with any provision of this
section, and until the Secretary is satisfied
that there is no longer any such failure to
comply, the Secretary shall--
``(i) reduce the amount of assistance
under this section to the State or
State designated entity by an amount
equal to the amount of grant amounts
which were not used in accordance with
this section;
``(ii) require the State or State
designated entity to repay the
Secretary any amount of the grant which
was not used in accordance with this
section;
``(iii) limit the availability of
assistance under this section to the
State or State designated entity to
activities or recipients not affected
by such failure to comply; or
``(iv) terminate any assistance under
this section to the State or State
designated entity.
``(f) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Extremely low-income renter household.--The
term `extremely low-income renter household' means a
household whose income is not in excess of 30 percent
of the area median income, with adjustments for smaller
and larger families, as determined by the Secretary.
``(2) Recipient.--The term `recipient' means an
individual or entity that receives assistance from a
State or State designated entity from amounts made
available to the State or State designated entity under
this section.
``(3) Shortage of standard rental units both
affordable and available to extremely low-income renter
households.--
``(A) In general.--The term `shortage of
standard rental units both affordable and
available to extremely low-income renter
households' means for any State or other
geographical area the gap between--
``(i) the number of units with
complete plumbing and kitchen
facilities with a rent that is 30
percent or less of 30 percent of the
adjusted area median income as
determined by the Secretary that are
occupied by extremely low-income renter
households or are vacant for rent; and
``(ii) the number of extremely low-
income renter households.
``(B) Rule of construction.--If the number of
units described in subparagraph (A)(i) exceeds
the number of extremely low-income households
as described in subparagraph (A)(ii), there is
no shortage.
``(4) Shortage of standard rental units both
affordable and available to very low-income renter
households.--
``(A) In general.--The term `shortage of
standard rental units both affordable and
available to very low-income renter households'
means for any State or other geographical area
the gap between--
``(i) the number of units with
complete plumbing and kitchen
facilities with a rent that is 30
percent or less of 50 percent of the
adjusted area median income as
determined by the Secretary that are
occupied by very low-income renter
households or are vacant for rent; and
``(ii) the number of very low-income
renter households.
``(B) Rule of construction.--If the number of
units described in subparagraph (A)(i) exceeds
the number of very low-income households as
described in subparagraph (A)(ii), there is no
shortage.
``(5) Very low-income family.--The term `very low-
income family' has the meaning given such term in
section 1303, except that such term includes any family
that resides in a rural area that has an income that
does not exceed the poverty line (as such term is
defined in section 673(2) of the Omnibus Budget
Reconciliation Act of 1981 (42 U.S.C. 9902(2)),
including any revision required by such section)
applicable to a family of the size involved.
``(6) Very low-income renter households.--The term
`very low-income renter households' means a household
whose income is in excess of 30 percent but not greater
than 50 percent of the area median income, with
adjustments for smaller and larger families, as
determined by the Secretary.
``(g) Regulations.--
``(1) In general.--The Secretary shall issue
regulations to carry out this section.
``(2) Required contents.--The regulations issued
under this subsection shall include--
``(A) a requirement that the Secretary ensure
that the use of grant amounts under this
section by States or State designated entities
is audited not less than annually to ensure
compliance with this section;
``(B) authority for the Secretary to audit,
provide for an audit, or otherwise verify a
State or State designated entity's activities
to ensure compliance with this section;
``(C) a requirement that, for the purposes of
subparagraphs (A) and (B), any financial
statement submitted by a grantee or recipient
to the Secretary shall be reviewed by an
independent certified public accountant in
accordance with Statements on Standards for
Accounting and Review Services, issued by the
American Institute of Certified Public
Accountants;
``(D) requirements for a process for
application to, and selection by, each State or
State designated entity for activities meeting
the State or State designated entity's priority
housing needs to be funded with grant amounts
under this section, which shall provide for
priority in funding to be based upon--
``(i) geographic diversity;
``(ii) ability to obligate amounts
and undertake activities so funded in a
timely manner;
``(iii) in the case of rental housing
projects under subsection (c)(7)(A),
the extent to which rents for units in
the project funded are affordable,
especially for extremely low-income
families;
``(iv) in the case of rental housing
projects under subsection (c)(7)(A),
the extent of the duration for which
such rents will remain affordable;
``(v) the extent to which the
application makes use of other funding
sources; and
``(vi) the merits of an applicant's
proposed eligible activity;
``(E) requirements to ensure that grant
amounts provided to a State or State designated
entity under this section that are used for
rental housing under subsection (c)(7)(A) are
used only for the benefit of extremely low- and
very low-income families; and
``(F) requirements and standards for
establishment, by a State or State designated
entity, for use of grant amounts in 2009 and
subsequent years of performance goals,
benchmarks, and timetables for the production,
preservation, and rehabilitation of affordable
rental and homeownership housing with such
grant amounts.
``(h) Affordable Housing Trust Fund.--If, after the date of
enactment of the Federal Housing Finance Regulatory Reform Act
of 2008, in any year, there is enacted any provision of Federal
law establishing an affordable housing trust fund other than
under this title for use only for grants to provide affordable
rental housing and affordable homeownership opportunities, and
the subsequent year is a year referred to in subsection (c),
the Secretary shall in such subsequent year and any remaining
years referred to in subsection (c) transfer to such affordable
housing trust fund the aggregate amount allocated pursuant to
subsection (c) in such year. Notwithstanding any other
provision of law, assistance provided using amounts transferred
to such affordable housing trust fund pursuant to this
subsection may not be used for any of the activities specified
in clauses (i) through (vi) of subsection (c)(9)(D).
``(i) Funding Accountability and Transparency.--Any grant
under this section to a grantee by a State or State designated
entity, any assistance provided to a recipient by a State or
State designated entity, and any grant, award, or other
assistance from an affordable housing trust fund referred to in
subsection (h) shall be considered a Federal award for purposes
of the Federal Funding Accountability and Transparency Act of
2006 (31 U.S.C. 6101 note). Upon the request of the Director of
the Office of Management and Budget, the Secretary shall obtain
and provide such information regarding any such grants,
assistance, and awards as the Director of the Office of
Management and Budget considers necessary to comply with the
requirements of such Act, as applicable, pursuant to the
preceding sentence.
``SEC. 1339. CAPITAL MAGNET FUND.
``(a) Establishment.--There is established in the Treasury of
the United States a trust fund to be known as the Capital
Magnet Fund, which shall be a special account within the
Community Development Financial Institutions Fund.
``(b) Deposits to Trust Fund.--The Capital Magnet Fund shall
consist of--
``(1) any amounts transferred to the Fund pursuant to
section 1337; and
``(2) any amounts as are or may be appropriated,
transferred, or credited to such Fund under any other
provisions of law.
``(c) Expenditures From Trust Fund.--Amounts in the Capital
Magnet Fund shall be available to the Secretary of the Treasury
to carry out a competitive grant program to attract private
capital for and increase investment in--
``(1) the development, preservation, rehabilitation,
or purchase of affordable housing for primarily
extremely low-, very low-, and low-income families; and
``(2) economic development activities or community
service facilities, such as day care centers, workforce
development centers, and health care clinics, which in
conjunction with affordable housing activities
implement a concerted strategy to stabilize or
revitalize a low-income area or underserved rural area.
``(d) Federal Assistance.--For purposes of the application of
Federal civil rights laws, all assistance provided using
amounts in the Capital Magnet Fund shall be considered Federal
financial assistance.
``(e) Eligible Grantees.--A grant under this section may be
made, pursuant to such requirements as the Secretary of the
Treasury shall establish for experience and success in
attracting private financing and carrying out the types of
activities proposed under the application of the grantee, only
to--
``(1) a Treasury certified community development
financial institution; or
``(2) a nonprofit organization having as 1 of its
principal purposes the development or management of
affordable housing.
``(f) Eligible Uses.--Grant amounts awarded from the Capital
Magnet Fund pursuant to this section may be used for the
purposes described in paragraphs (1) and (2) of subsection (c),
including for the following uses:
``(1) To provide loan loss reserves.
``(2) To capitalize a revolving loan fund.
``(3) To capitalize an affordable housing fund.
``(4) To capitalize a fund to support activities
described in subsection (c)(2).
``(5) For risk-sharing loans.
``(g) Applications.--
``(1) In general.--The Secretary of the Treasury
shall provide, in a competitive application process
established by regulation, for eligible grantees under
subsection (e) to submit applications for Capital
Magnet Fund grants to the Secretary at such time and in
such manner as the Secretary shall determine.
``(2) Content of application.--The application
required under paragraph (1) shall include a detailed
description of--
``(A) the types of affordable housing,
economic, and community revitalization projects
that support or sustain residents of an
affordable housing project funded by a grant
under this section for which such grant amounts
would be used, including the proposed use of
eligible grants as authorized under this
section;
``(B) the types, sources, and amounts of
other funding for such projects; and
``(C) the expected time frame of any grant
used for such project.
``(h) Grant Limitation.--
``(1) In general.--Any 1 eligible grantee and its
subsidiaries and affiliates may not be awarded more
than 15 percent of the aggregate funds available for
grants during any year from the Capital Magnet Fund.
``(2) Geographic diversity.--
``(A) Goal.--The Secretary of the Treasury
shall seek to fund activities in geographically
diverse areas of economic distress, including
metropolitan and underserved rural areas in
every State.
``(B) Diversity defined.--For purposes of
this paragraph, geographic diversity includes
those areas that meet objective criteria of
economic distress developed by the Secretary of
the Treasury, which may include--
``(i) the percentage of low-income
families or the extent of poverty;
``(ii) the rate of unemployment or
underemployment;
``(iii) extent of blight and
disinvestment;
``(iv) projects that target extremely
low-, very low-, and low-income
families in or outside a designated
economic distress area; or
``(v) any other criteria designated
by the Secretary of the Treasury.
``(3) Leverage of funds.--Each grant from the Capital
Magnet Fund awarded under this section shall be
reasonably expected to result in eligible housing, or
economic and community development projects that
support or sustain an affordable housing project funded
by a grant under this section whose aggregate costs
total at least 10 times the grant amount.
``(4) Commitment for use deadline.--Amounts made
available for grants under this section shall be
committed for use within 2 years of the date of such
allocation. The Secretary of the Treasury shall
recapture into the Capital Magnet Fund any amounts not
so used or committed for use and allocate such amounts
in the first year after such recapture.
``(5) Prohibited uses.--The Secretary shall, by
regulation, set forth prohibited uses of grant amounts
awarded under this section, which shall include use
for--
``(A) political activities;
``(B) advocacy;
``(C) lobbying, whether directly or through
other parties;
``(D) counseling services;
``(E) travel expenses; and
``(F) preparing or providing advice on tax
returns;
and for the purposes of this paragraph, the prohibited
use of funds for political activities includes
influencing the selection, nomination, election, or
appointment of one or more candidates to any Federal,
State or local office as codified in section Sec. 501
of the Internal Revenue Code of 1986 (26 U.S.C. 501).
``(6) Additional lobbying restrictions.--No
assistance or amounts made available under this section
may be expended by an eligible grantee to pay any
person to influence or attempt to influence any agency,
elected official, officer or employee of a State or
local government in connection with the making, award,
extension, continuation, renewal, amendment, or
modification of any State or local government contract,
grant, loan, or cooperative agreement as such terms are
defined in section 1352 of title 31, United States
Code.
``(7) Prohibition of consideration of use for meeting
housing goals or duty to serve.--In determining the
compliance of the enterprises with the housing goals
under this section and the duty to serve underserved
markets under section 1335, the Director of the Federal
Housing Finance Agency may not consider any Capital
Magnet Fund amounts used under this section for
eligible activities under subsection (f). The Director
of the Federal Housing Finance Agency shall give credit
toward the achievement of such housing goals and such
duty to serve underserved markets to purchases by the
enterprises of mortgages for housing that receives
funding from Capital Magnet Fund grant amounts, but
only to the extent that such purchases by the
enterprises are funded other than with such grant
amounts.
``(8) Accountability of recipients and grantees.--
``(A) Tracking of funds.--The Secretary of
the Treasury shall--
``(i) require each grantee to develop
and maintain a system to ensure that
each recipient of assistance from the
Capital Magnet Fund uses such amounts
in accordance with this section, the
regulations issued under this section,
and any requirements or conditions
under which such amounts were provided;
and
``(ii) establish minimum requirements
for agreements, between the grantee and
the Capital Magnet Fund, regarding
assistance from the Capital Magnet
Fund, which shall include--
``(I) appropriate periodic
financial and project
reporting, record retention,
and audit requirements for the
duration of the grant to the
recipient to ensure compliance
with the limitations and
requirements of this section
and the regulations under this
section; and
``(II) any other requirements
that the Secretary determines
are necessary to ensure
appropriate grant
administration and compliance.
``(B) Misuse of funds.--If the Secretary of
the Treasury determines, after reasonable
notice and opportunity for hearing, that a
grantee has failed to comply substantially with
any provision of this section and until the
Secretary is satisfied that there is no longer
any such failure to comply, the Secretary
shall--
``(i) reduce the amount of assistance
under this section to the grantee by an
amount equal to the amount of Capital
Magnet Fund grant amounts which were
not used in accordance with this
section;
``(ii) require the grantee to repay
the Secretary any amount of the Capital
Magnet Fund grant amounts which were
not used in accordance with this
section;
``(iii) limit the availability of
assistance under this section to the
grantee to activities or recipients not
affected by such failure to comply; or
``(iv) terminate any assistance under
this section to the grantee.
``(i) Periodic Reports.--
``(1) In general.--The Secretary of the Treasury
shall submit a report, on a periodic basis, to the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the
House of Representatives describing the activities to
be funded under this section.
``(2) Reports available to public.--The Secretary of
the Treasury shall make the reports required under
paragraph (1) publicly available.
``(j) Regulations.--
``(1) In general.--The Secretary of the Treasury
shall issue regulations to carry out this section.
``(2) Required contents.--The regulations issued
under this subsection shall include--
``(A) authority for the Secretary to audit,
provide for an audit, or otherwise verify an
enterprise's activities, to ensure compliance
with this section;
``(B) a requirement that the Secretary ensure
that the allocation of each enterprise is
audited not less than annually to ensure
compliance with this section;
``(C) a requirement that, for the purposes of
subparagraphs (A) and (B), any financial
statement submitted by a grantee to the
Secretary shall be reviewed by an independent
certified public accountant in accordance with
Statements on Standards for Accounting and
Review Services, issued by the American
Institute of Certified Public Accountants; and
``(D) requirements for a process for
application to, and selection by, the Secretary
for activities to be funded with amounts from
the Capital Magnet Fund, which shall provide
that--
``(i) funds be fairly distributed to
urban, suburban, and rural areas; and
``(ii) selection shall be based upon
specific criteria, including a
prioritization of funding based upon--
``(I) the ability to use such
funds to generate additional
investments;
``(II) affordable housing
need (taking into account the
distinct needs of different
regions of the country); and
``(III) ability to obligate
amounts and undertake
activities so funded in a
timely manner.''.
SEC. 1132. FINANCIAL EDUCATION AND COUNSELING.
(a) Goals.--Financial education and counseling under this
section shall have the goal of--
(1) increasing the financial knowledge and decision
making capabilities of prospective homebuyers;
(2) assisting prospective homebuyers to develop
monthly budgets, build personal savings, finance or
plan for major purchases, reduce their debt, improve
their financial stability, and set and reach their
financial goals;
(3) helping prospective homebuyers to improve their
credit scores by understanding the relationship between
their credit histories and their credit scores; and
(4) educating prospective homebuyers about the
options available to build savings for short- and long-
term goals.
(b) Grants.--
(1) In general.--The Secretary of the Treasury (in
this section referred to as the ``Secretary'') shall
make grants to eligible organizations to enable such
organizations to provide a range of financial education
and counseling services to prospective homebuyers.
(2) Selection.--The Secretary shall select eligible
organizations to receive assistance under this section
based on their experience and ability to provide
financial education and counseling services that result
in documented positive behavioral changes.
(c) Eligible Organizations.--
(1) In general.--For purposes of this section, the
term ``eligible organization'' means an organization
that is--
(A) certified in accordance with section
106(e)(1) of the Housing and Urban Development
Act of 1968 (12 U.S.C. 1701x(e)); or
(B) certified by the Office of Financial
Education of the Department of the Treasury for
purposes of this section, in accordance with
paragraph (2).
(2) OFE certification.--To be certified by the Office
of Financial Education for purposes of this section, an
eligible organization shall be--
(A) a housing counseling agency certified by
the Secretary of Housing and Urban Development
under section 106(e) of the Housing and Urban
Development Act of 1968;
(B) a State, local, or tribal government
agency;
(C) a community development financial
institution (as defined in section 103(5) of
the Community Development Banking and Financial
Institutions Act of 1994 (12 U.S.C. 4702(5)) or
a credit union; or
(D) any collaborative effort of entities
described in any of subparagraphs (A) through
(C).
(d) Authority for Pilot Projects.--
(1) In general.--The Secretary of the Treasury shall
authorize not more than 5 pilot project grants to
eligible organizations under subsection (c) in order
to--
(A) carry out the services under this
section; and
(B) provide such other services that will
improve the financial stability and economic
condition of low- and moderate-income and low-
wealth individuals.
(2) Goal.--The goal of the pilot project grants under
this subsection is to--
(A) identify successful methods resulting in
positive behavioral change for financial
empowerment; and
(B) establish program models for
organizations to carry out effective counseling
services.
(e) Authorization of Appropriations.--There are authorized to
be appropriated to the Secretary such sums as are necessary to
carry out this section and for the provision of additional
financial educational services.
(f) Study and Report on Effectiveness and Impact.--
(1) In general.--The Comptroller General of the
United States shall conduct a study on the
effectiveness and impact of the grant program
established under this section. Not later than 3 years
after the date of enactment of this Act, the
Comptroller General shall submit a report on the
results of such study to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of
Representatives.
(2) Content of study.--The study required under
paragraph (1) shall include an evaluation of the
following:
(A) The effectiveness of the grant program
established under this section in improving the
financial situation of homeowners and
prospective homebuyers served by the grant
program.
(B) The extent to which financial education
and counseling services have resulted in
positive behavioral changes.
(C) The effectiveness and quality of the
eligible organizations providing financial
education and counseling services under the
grant program.
(g) Regulations.--The Secretary is authorized to promulgate
such regulations as may be necessary to implement and
administer the grant program authorized by this section.
SEC. 1133. TRANSFER AND RIGHTS OF CERTAIN HUD EMPLOYEES.
(a) Transfer.--Each employee of the Department of Housing and
Urban Development whose position responsibilities primarily
involve the establishment and enforcement of the housing goals
under subpart B of part 2 of subtitle A of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4561 et seq.) shall be transferred to the Federal
Housing Finance Agency for employment, not later than the
effective date of the Federal Housing Finance Regulatory Reform
Act of 2008, and such transfer shall be deemed a transfer of
function for purposes of section 3503 of title 5, United States
Code.
(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 Director 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 position in the Senior
Executive Service (within the meaning of
section 3132(a)(7) of title 5, United States
Code).
(d) Reorganization.--If the Director determines, after the
end of the 1-year period beginning on the effective date of the
Federal Housing Finance Regulatory Reform Act of 2008, 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.
(e) Employee Benefit Programs.--
(1) In general.--Any employee described under
subsection (a) accepting employment with the Agency 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 Department of Housing and Urban
Development, as applicable, including insurance, to
which such employee belongs on such effective date,
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 Director of the Federal Housing Finance
Agency.
(2) Cost differential.--
(A) In general.--The difference in the costs
between the benefits which would have been
provided by the Department of Housing and Urban
Development and those provided by this section
shall be paid by the Director.
(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 Director, 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.
Subtitle C--Prompt Corrective Action
SEC. 1141. CRITICAL CAPITAL LEVELS.
(a) In General.--Section 1363 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4613) is amended--
(1) by striking ``For'' and inserting ``(a)
Enterprises.--For''; and
(2) by adding at the end the following new
subsection:
``(b) Federal Home Loan Banks.--
``(1) In general.--For purposes of this subtitle, the
critical capital level for each Federal Home Loan Bank
shall be such amount of capital as the Director shall,
by regulation, require.
``(2) Consideration of other critical capital
levels.--In establishing the critical capital level
under paragraph (1) for the Federal Home Loan Banks,
the Director shall take due consideration of the
critical capital level established under subsection (a)
for the enterprises, with such modifications as the
Director determines to be appropriate to reflect the
difference in operations between the banks and the
enterprises.''.
(b) Regulations.--Not later than the expiration of the 180-
day period beginning on the date of enactment of this Act, the
Director of the Federal Housing Finance Agency shall issue
regulations pursuant to section 1363(b) of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (as
added by this section) establishing the critical capital level
under such section.
SEC. 1142. CAPITAL CLASSIFICATIONS.
(a) In General.--Section 1364 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4614) is amended--
(1) in the heading for subsection (a) by striking
``In General'' and inserting ``Enterprises'';
(2) in subsection (c)--
(A) by striking ``subsection (b)'' and
inserting ``subsection (c)'';
(B) by striking ``enterprises'' and inserting
``regulated entities''; and
(C) by striking the last sentence;
(3) by redesignating subsections (c) (as so amended
by paragraph (2) of this subsection) and (d) as
subsections (d) and (f), respectively;
(4) by striking subsection (b) and inserting the
following:
``(b) Federal Home Loan Banks.--
``(1) Establishment and criteria.--For purposes of
this subtitle, the Director shall, by regulation--
``(A) establish the capital classifications
specified under paragraph (2) for the Federal
Home Loan Banks;
``(B) establish criteria for each such
capital classification based on the amount and
types of capital held by a bank and the risk-
based, minimum, and critical capital levels for
the banks and taking due consideration of the
capital classifications established under
subsection (a) for the enterprises, with such
modifications as the Director determines to be
appropriate to reflect the difference in
operations between the banks and the
enterprises; and
``(C) shall classify the Federal Home Loan
Banks according to such capital
classifications.
``(2) Classifications.--The capital classifications
specified under this paragraph are--
``(A) adequately capitalized;
``(B) undercapitalized;
``(C) significantly undercapitalized; and
``(D) critically undercapitalized.
``(c) Discretionary Classification.--
``(1) Grounds for reclassification.--The Director may
reclassify a regulated entity under paragraph (2) if--
``(A) at any time, the Director determines in
writing that the regulated entity is engaging
in conduct that could result in a rapid
depletion of core or total capital or the value
of collateral pledged as security has decreased
significantly or that the value of the property
subject to mortgages held by the regulated
entity (or securitized in the case of an
enterprise) has decreased significantly;
``(B) after notice and an opportunity for
hearing, the Director determines that the
regulated entity is in an unsafe or unsound
condition; or
``(C) pursuant to section 1371(b), the
Director deems the regulated entity to be
engaging in an unsafe or unsound practice.
``(2) Reclassification.--In addition to any other
action authorized under this title, including the
reclassification of a regulated entity for any reason
not specified in this subsection, if the Director takes
any action described in paragraph (1), the Director may
classify a regulated entity--
``(A) as undercapitalized, if the regulated
entity is otherwise classified as adequately
capitalized;
``(B) as significantly undercapitalized, if
the regulated entity is otherwise classified as
undercapitalized; and
``(C) as critically undercapitalized, if the
regulated entity is otherwise classified as
significantly undercapitalized.''; and
(5) by inserting after subsection (d) (as so
redesignated by paragraph (3) of this subsection), the
following new subsection:
``(e) Restriction on Capital Distributions.--
``(1) In general.--A regulated entity shall make no
capital distribution if, after making the distribution,
the regulated entity would be undercapitalized.
``(2) Exception.--Notwithstanding paragraph (1), the
Director may permit a regulated 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--
``(A) is made in connection with the issuance
of additional shares or obligations of the
regulated entity in at least an equivalent
amount; and
``(B) will reduce the financial obligations
of the regulated entity or otherwise improve
the financial condition of the entity.''.
(b) Regulations.--Not later than the expiration of the 180-
day period beginning on the date of enactment of this Act, the
Director of the Federal Housing Finance Agency shall issue
regulations to carry out section 1364(b) of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (as
added by this section), relating to capital classifications for
the Federal Home Loan Banks.
SEC. 1143. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED REGULATED
ENTITIES.
Section 1365 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4615) is amended--
(1) by striking ``the enterprise'' each place that
term appears and inserting ``the regulated entity'';
(2) by striking ``An enterprise'' each place that
term appears and inserting ``A regulated entity'';
(3) by striking ``an enterprise'' each place that
term appears and inserting ``a regulated entity'';
(4) in subsection (a)--
(A) by redesignating paragraphs (1) and (2)
as paragraphs (2) and (3), respectively;
(B) by inserting before paragraph (2), as
redesignated, the following:
``(1) Required monitoring.--The Director shall--
``(A) closely monitor the condition of any
undercapitalized regulated entity;
``(B) closely monitor compliance with the
capital restoration plan, restrictions, and
requirements imposed on an undercapitalized
regulated entity under this section; and
``(C) periodically review the plan,
restrictions, and requirements applicable to an
undercapitalized regulated entity to determine
whether the plan, restrictions, and
requirements are achieving the purpose of this
section.''; and
(C) by adding at the end the following:
``(4) Restriction of asset growth.--An
undercapitalized regulated 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 Director has accepted the capital
restoration plan of the regulated entity;
``(B) any increase in total assets is
consistent with the capital restoration plan;
and
``(C) the ratio of tangible equity to assets
of the regulated entity increases during the
calendar quarter at a rate sufficient to enable
the regulated entity to become adequately
capitalized within a reasonable time.
``(5) Prior approval of acquisitions and new
activities.--An undercapitalized regulated entity shall
not, directly or indirectly, acquire any interest in
any entity or engage in any new activity, unless--
``(A) the Director has accepted the capital
restoration plan of the regulated entity, the
regulated entity is implementing the plan, and
the Director determines that the proposed
action is consistent with and will further the
achievement of the plan; or
``(B) the Director determines that the
proposed action will further the purpose of
this subtitle.'';
(5) in subsection (b)--
(A) in the subsection heading, by striking
``Discretionary'';
(B) in the matter preceding paragraph (1), by
striking ``may'' and inserting ``shall''; and
(C) in paragraph (2)--
(i) by striking ``make, in good
faith, reasonable efforts necessary
to''; and
(ii) by striking the period at the
end and inserting ``in any material
respect.''; and
(6) by striking subsection (c) and inserting the
following:
``(c) Other Discretionary Safeguards.--The Director may take,
with respect to an undercapitalized regulated entity, any of
the actions authorized to be taken under section 1366 with
respect to a significantly undercapitalized regulated entity,
if the Director determines that such actions are necessary to
carry out the purpose of this subtitle.''.
SEC. 1144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY
UNDERCAPITALIZED REGULATED ENTITIES.
Section 1366 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4616) is amended--
(1) in subsection (a)(2), by striking
``undercapitalized enterprise'' and inserting
``undercapitalized'';
(2) by striking ``the enterprise'' each place that
term appears and inserting ``the regulated entity'';
(3) by striking ``An enterprise'' each place that
term appears and inserting ``A regulated entity'';
(4) by striking ``an enterprise'' each place that
term appears and inserting ``a regulated entity'';
(5) in subsection (b)--
(A) in the subsection heading, by striking
``Discretionary Supervisory'' and inserting
``Specific'';
(B) in the matter preceding paragraph (1), by
striking ``may, at any time, take any'' and
inserting ``shall carry out this section by
taking, at any time, 1 or more'';
(C) by striking paragraph (6);
(D) by redesignating paragraph (5) as
paragraph (6);
(E) by inserting after paragraph (4) the
following:
``(5) Improvement of management.--Take 1 or more of
the following actions:
``(A) New election of board.--Order a new
election for the board of directors of the
regulated entity.
``(B) Dismissal of directors or executive
officers.--Require the regulated 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
regulated entity became undercapitalized.
Dismissal under this subparagraph shall not be
construed to be a removal pursuant to the
enforcement powers of the Director under
section 1377.
``(C) Employ qualified executive officers.--
Require the regulated entity to employ
qualified executive officers (who, if the
Director so specifies, shall be subject to
approval by the Director).''; and
(F) by adding at the end the following:
``(7) Other action.--Require the regulated entity to
take any other action that the Director determines will
better carry out the purpose of this section than any
of the other actions specified in this subsection.'';
and
(6) by striking subsection (c) and inserting the
following:
``(c) Restriction on Compensation of Executive Officers.--A
regulated entity that is classified as significantly
undercapitalized in accordance with section 1364 may not,
without prior written approval by the Director--
``(1) pay any bonus to any executive officer; or
``(2) provide compensation to any executive officer
at a rate exceeding the average rate of compensation of
that officer (excluding bonuses, stock options, and
profit sharing) during the 12 calendar months preceding
the calendar month in which the regulated entity became
significantly undercapitalized.''.
SEC. 1145. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED
ENTITIES.
(a) In General.--Section 1367 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4617) is amended to read as follows:
``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED REGULATED
ENTITIES.
``(a) Appointment of the Agency as Conservator or Receiver.--
``(1) In general.--Notwithstanding any other
provision of Federal or State law, the Director may
appoint the Agency as conservator or receiver for a
regulated entity in the manner provided under paragraph
(2) or (4). All references to the conservator or
receiver under this section are references to the
Agency acting as conservator or receiver.
``(2) Discretionary appointment.--The Agency may, at
the discretion of the Director, be appointed
conservator or receiver for the purpose of
reorganizing, rehabilitating, or winding up the affairs
of a regulated entity.
``(3) Grounds for discretionary appointment of
conservator or receiver.--The grounds for appointing
conservator or receiver for any regulated entity under
paragraph (2) are as follows:
``(A) Assets insufficient for obligations.--
The assets of the regulated entity are less
than the obligations of the regulated entity to
its creditors and others.
``(B) Substantial dissipation.--Substantial
dissipation of assets or earnings due to--
``(i) any violation of any provision
of Federal or State law; or
``(ii) any unsafe or unsound
practice.
``(C) Unsafe or unsound condition.--An unsafe
or unsound condition to transact business.
``(D) Cease and desist orders.--Any willful
violation of a cease and desist order that has
become final.
``(E) Concealment.--Any concealment of the
books, papers, records, or assets of the
regulated entity, or any refusal to submit the
books, papers, records, or affairs of the
regulated entity, for inspection to any
examiner or to any lawful agent of the
Director.
``(F) Inability to meet obligations.--The
regulated entity is likely to be unable to pay
its obligations or meet the demands of its
creditors in the normal course of business.
``(G) Losses.--The regulated entity has
incurred or is likely to incur losses that will
deplete all or substantially all of its
capital, and there is no reasonable prospect
for the regulated entity to become adequately
capitalized (as defined in section 1364(a)(1)).
``(H) Violations of law.--Any violation of
any law or regulation, or any unsafe or unsound
practice or condition that is likely to--
``(i) cause insolvency or substantial
dissipation of assets or earnings; or
``(ii) weaken the condition of the
regulated entity.
``(I) Consent.--The regulated entity, by
resolution of its board of directors or its
shareholders or members, consents to the
appointment.
``(J) Undercapitalization.--The regulated
entity is undercapitalized or significantly
undercapitalized (as defined in section
1364(a)(3)), and--
``(i) has no reasonable prospect of
becoming adequately capitalized;
``(ii) fails to become adequately
capitalized, as required by--
``(I) section 1365(a)(1) with
respect to a regulated entity;
or
``(II) section 1366(a)(1)
with respect to a significantly
undercapitalized regulated
entity;
``(iii) fails to submit a capital
restoration plan acceptable to the
Agency within the time prescribed under
section 1369C; or
``(iv) materially fails to implement
a capital restoration plan submitted
and accepted under section 1369C.
``(K) Critical undercapitalization.--The
regulated entity is critically
undercapitalized, as defined in section
1364(a)(4).
``(L) Money laundering.--The Attorney General
notifies the Director in writing that the
regulated entity has been found guilty of a
criminal offense under section 1956 or 1957 of
title 18, United States Code, or section 5322
or 5324 of title 31, United States Code.
``(4) Mandatory receivership.--
``(A) In general.--The Director shall appoint
the Agency as receiver for a regulated entity
if the Director determines, in writing, that--
``(i) the assets of the regulated
entity are, and during the preceding 60
calendar days have been, less than the
obligations of the regulated entity to
its creditors and others; or
``(ii) the regulated entity is not,
and during the preceding 60 calendar
days has not been, generally paying the
debts of the regulated entity (other
than debts that are the subject of a
bona fide dispute) as such debts become
due.
``(B) Periodic determination required for
critically undercapitalized regulated entity.--
If a regulated entity is critically
undercapitalized, the Director shall make a
determination, in writing, as to whether the
regulated entity meets the criteria specified
in clause (i) or (ii) of subparagraph (A)--
``(i) not later than 30 calendar days
after the regulated entity initially
becomes critically undercapitalized;
and
``(ii) at least once during each
succeeding 30-calendar day period.
``(C) Determination not required if
receivership already in place.--Subparagraph
(B) does not apply with respect to a regulated
entity in any period during which the Agency
serves as receiver for the regulated entity.
``(D) Receivership terminates
conservatorship.--The appointment of the Agency
as receiver of a regulated entity under this
section shall immediately terminate any
conservatorship established for the regulated
entity under this title.
``(5) Judicial review.--
``(A) In general.--If the Agency is appointed
conservator or receiver under this section, the
regulated entity may, within 30 days of such
appointment, bring an action in the United
States district court for the judicial district
in which the home office of such regulated
entity is located, or in the United States
District Court for the District of Columbia,
for an order requiring the Agency to remove
itself as conservator or receiver.
``(B) Review.--Upon the filing of an action
under subparagraph (A), the court shall, upon
the merits, dismiss such action or direct the
Agency to remove itself as such conservator or
receiver.
``(6) Directors not liable for acquiescing in
appointment of conservator or receiver.--The members of
the board of directors of a regulated entity shall not
be liable to the shareholders or creditors of the
regulated entity for acquiescing in or consenting in
good faith to the appointment of the Agency as
conservator or receiver for that regulated entity.
``(7) Agency not subject to any other federal
agency.--When acting as conservator or receiver, the
Agency shall not be subject to the direction or
supervision of any other agency of the United States or
any State in the exercise of the rights, powers, and
privileges of the Agency.
``(b) Powers and Duties of the Agency as Conservator or
Receiver.--
``(1) Rulemaking authority of the agency.--The Agency
may prescribe such regulations as the Agency determines
to be appropriate regarding the conduct of
conservatorships or receiverships.
``(2) General powers.--
``(A) Successor to regulated entity.--The
Agency shall, as conservator or receiver, and
by operation of law, immediately succeed to--
``(i) all rights, titles, powers, and
privileges of the regulated entity, and
of any stockholder, officer, or
director of such regulated entity with
respect to the regulated entity and the
assets of the regulated entity; and
``(ii) title to the books, records,
and assets of any other legal custodian
of such regulated entity.
``(B) Operate the regulated entity.--The
Agency may, as conservator or receiver--
``(i) take over the assets of and
operate the regulated entity with all
the powers of the shareholders, the
directors, and the officers of the
regulated entity and conduct all
business of the regulated entity;
``(ii) collect all obligations and
money due the regulated entity;
``(iii) perform all functions of the
regulated entity in the name of the
regulated entity which are consistent
with the appointment as conservator or
receiver;
``(iv) preserve and conserve the
assets and property of the regulated
entity; and
``(v) provide by contract for
assistance in fulfilling any function,
activity, action, or duty of the Agency
as conservator or receiver.
``(C) Functions of officers, directors, and
shareholders of a regulated entity.--The Agency
may, by regulation or order, provide for the
exercise of any function by any stockholder,
director, or officer of any regulated entity
for which the Agency has been named conservator
or receiver.
``(D) Powers as conservator.--The Agency may,
as conservator, take such action as may be--
``(i) necessary to put the regulated
entity in a sound and solvent
condition; and
``(ii) appropriate to carry on the
business of the regulated entity and
preserve and conserve the assets and
property of the regulated entity.
``(E) Additional powers as receiver.--In any
case in which the Agency is acting as receiver,
the Agency shall place the regulated entity in
liquidation and proceed to realize upon the
assets of the regulated entity in such manner
as the Agency deems appropriate, including
through the sale of assets, the transfer of
assets to a limited-life regulated entity
established under subsection (i), or the
exercise of any other rights or privileges
granted to the Agency under this paragraph.
``(F) Organization of new enterprise.--The
Agency may, as receiver for an enterprise,
organize a successor enterprise that will
operate pursuant to subsection (i).
``(G) Transfer or sale of assets and
liabilities.--The Agency may, as conservator or
receiver, transfer or sell any asset or
liability of the regulated entity in default,
and may do so without any approval, assignment,
or consent with respect to such transfer or
sale.
``(H) Payment of valid obligations.--The
Agency, as conservator or receiver, shall, to
the extent of proceeds realized from the
performance of contracts or sale of the assets
of a regulated entity, pay all valid
obligations of the regulated entity that are
due and payable at the time of the appointment
of the Agency as conservator or receiver, in
accordance with the prescriptions and
limitations of this section.
``(I) Subpoena authority.--
``(i) In general.--
``(I) Agency authority.--The
Agency may, as conservator or
receiver, and for purposes of
carrying out any power,
authority, or duty with respect
to a regulated entity
(including determining any
claim against the regulated
entity and determining and
realizing upon any asset of any
person in the course of
collecting money due the
regulated entity), exercise any
power established under section
1348.
``(II) Applicability of
law.--The provisions of section
1348 shall apply with respect
to the exercise of any power
under this subparagraph, in the
same manner as such provisions
apply under that section.
``(ii) Subpoena.--A subpoena or
subpoena duces tecum may be issued
under clause (i) only by, or with the
written approval of, the Director, or
the designee of the Director.
``(iii) Rule of construction.--This
subsection shall not be construed to
limit any rights that the Agency, in
any capacity, might otherwise have
under section 1317 or 1379B.
``(J) Incidental powers.--The Agency may, as
conservator or receiver--
``(i) exercise all powers and
authorities specifically granted to
conservators or receivers,
respectively, under this section, and
such incidental powers as shall be
necessary to carry out such powers; and
``(ii) take any action authorized by
this section, which the Agency
determines is in the best interests of
the regulated entity or the Agency.
``(K) Other provisions.--
``(i) Shareholders and creditors of
failed regulated entity.--
Notwithstanding any other provision of
law, the appointment of the Agency as
receiver for a regulated entity
pursuant to paragraph (2) or (4) of
subsection (a) and its succession, by
operation of law, to the rights,
titles, powers, and privileges
described in subsection (b)(2)(A) shall
terminate all rights and claims that
the stockholders and creditors of the
regulated entity may have against the
assets or charter of the regulated
entity or the Agency arising as a
result of their status as stockholders
or creditors, except for their right to
payment, resolution, or other
satisfaction of their claims, as
permitted under subsections (b)(9),
(c), and (e).
``(ii) Assets of regulated entity.--
Notwithstanding any other provision of
law, for purposes of this section, the
charter of a regulated entity shall not
be considered an asset of the regulated
entity.
``(3) Authority of receiver to determine claims.--
``(A) In general.--The Agency may, as
receiver, determine claims in accordance with
the requirements of this subsection and any
regulations prescribed under paragraph (4).
``(B) Notice requirements.--The receiver, in
any case involving the liquidation or winding
up of the affairs of a closed regulated entity,
shall--
``(i) promptly publish a notice to
the creditors of the regulated entity
to present their claims, together with
proof, to the receiver by a date
specified in the notice which shall be
not less than 90 days after the date of
publication of such notice; and
``(ii) republish such notice
approximately 1 month and 2 months,
respectively, after the date of
publication under clause (i).
``(C) Mailing required.--The receiver shall
mail a notice similar to the notice published
under subparagraph (B)(i) at the time of such
publication to any creditor shown on the books
of the regulated entity--
``(i) at the last address of the
creditor appearing in such books; or
``(ii) upon discovery of the name and
address of a claimant not appearing on
the books of the regulated entity,
within 30 days after the discovery of
such name and address.
``(4) Rulemaking authority relating to determination
of claims.--Subject to subsection (c), the Director may
prescribe regulations regarding the allowance or
disallowance of claims by the receiver and providing
for administrative determination of claims and review
of such determination.
``(5) Procedures for determination of claims.--
``(A) Determination period.--
``(i) In general.--Before the end of
the 180-day period beginning on the
date on which any claim against a
regulated entity is filed with the
Agency as receiver, the Agency shall
determine whether to allow or disallow
the claim and shall notify the claimant
of any determination with respect to
such claim.
``(ii) Extension of time.--The period
described in clause (i) may be extended
by a written agreement between the
claimant and the Agency.
``(iii) Mailing of notice
sufficient.--The requirements of clause
(i) shall be deemed to be satisfied if
the notice of any determination with
respect to any claim is mailed to the
last address of the claimant which
appears--
``(I) on the books of the
regulated entity;
``(II) in the claim filed by
the claimant; or
``(III) in documents
submitted in proof of the
claim.
``(iv) Contents of notice of
disallowance.--If any claim filed under
clause (i) is disallowed, the notice to
the claimant shall contain--
``(I) a statement of each
reason for the disallowance;
and
``(II) the procedures
available for obtaining agency
review of the determination to
disallow the claim or judicial
determination of the claim.
``(B) Allowance of proven claim.--The
receiver shall allow any claim received on or
before the date specified in the notice
published under paragraph (3)(B)(i) by the
receiver from any claimant which is proved to
the satisfaction of the receiver.
``(C) Disallowance of claims filed after
filing period.--Claims filed after the date
specified in the notice published under
paragraph (3)(B)(i), or the date specified
under paragraph (3)(C), shall be disallowed and
such disallowance shall be final.
``(D) Authority to disallow claims.--
``(i) In general.--The receiver may
disallow any portion of any claim by a
creditor or claim of security,
preference, or priority which is not
proved to the satisfaction of the
receiver.
``(ii) Payments to less than fully
secured creditors.--In the case of a
claim of a creditor against a regulated
entity which is secured by any property
or other asset of such regulated
entity, the receiver--
``(I) may treat the portion
of such claim which exceeds an
amount equal to the fair market
value of such property or other
asset as an unsecured claim
against the regulated entity;
and
``(II) may not make any
payment with respect to such
unsecured portion of the claim,
other than in connection with
the disposition of all claims
of unsecured creditors of the
regulated entity.
``(iii) Exceptions.--No provision of
this paragraph shall apply with respect
to--
``(I) any extension of credit
from any Federal Reserve Bank,
Federal Home Loan Bank, or the
United States Treasury; or
``(II) any security interest
in the assets of the regulated
entity securing any such
extension of credit.
``(E) No judicial review of determination
pursuant to subparagraph (d).--No court may
review the determination of the Agency under
subparagraph (D) to disallow a claim.
``(F) Legal effect of filing.--
``(i) Statute of limitation tolled.--
For purposes of any applicable statute
of limitations, the filing of a claim
with the receiver shall constitute a
commencement of an action.
``(ii) No prejudice to other
actions.--Subject to paragraph (10),
the filing of a claim with the receiver
shall not prejudice any right of the
claimant to continue any action which
was filed before the date of the
appointment of the receiver, subject to
the determination of claims by the
receiver.
``(6) Provision for judicial determination of
claims.--
``(A) In general.--The claimant may file suit
on a claim (or continue an action commenced
before the appointment of the receiver) in the
district or territorial court of the United
States for the district within which the
principal place of business of the regulated
entity is located or the United States District
Court for the District of Columbia (and such
court shall have jurisdiction to hear such
claim), before the end of the 60-day period
beginning on the earlier of--
``(i) the end of the period described
in paragraph (5)(A)(i) with respect to
any claim against a regulated entity
for which the Agency is receiver; or
``(ii) the date of any notice of
disallowance of such claim pursuant to
paragraph (5)(A)(i).
``(B) Statute of limitations.--A claim shall
be deemed to be disallowed (other than any
portion of such claim which was allowed by the
receiver), and such disallowance shall be
final, and the claimant shall have no further
rights or remedies with respect to such claim,
if the claimant fails, before the end of the
60-day period described under subparagraph (A),
to file suit on such claim (or continue an
action commenced before the appointment of the
receiver).
``(7) Review of claims.--
``(A) Other review procedures.--
``(i) In general.--The Agency shall
establish such alternative dispute
resolution processes as may be
appropriate for the resolution of
claims filed under paragraph (5)(A)(i).
``(ii) Criteria.--In establishing
alternative dispute resolution
processes, the Agency shall strive for
procedures which are expeditious, fair,
independent, and low cost.
``(iii) Voluntary binding or
nonbinding procedures.--The Agency may
establish both binding and nonbinding
processes under this subparagraph,
which may be conducted by any
government or private party. All
parties, including the claimant and the
Agency, must agree to the use of the
process in a particular case.
``(B) Consideration of incentives.--The
Agency shall seek to develop incentives for
claimants to participate in the alternative
dispute resolution process.
``(8) Expedited determination of claims.--
``(A) Establishment required.--The Agency
shall establish a procedure for expedited
relief outside of the routine claims process
established under paragraph (5) for claimants
who--
``(i) allege the existence of legally
valid and enforceable or perfected
security interests in assets of any
regulated entity for which the Agency
has been appointed receiver; and
``(ii) allege that irreparable injury
will occur if the routine claims
procedure is followed.
``(B) Determination period.--Before the end
of the 90-day period beginning on the date on
which any claim is filed in accordance with the
procedures established under subparagraph (A),
the Director shall--
``(i) determine--
``(I) whether to allow or
disallow such claim; or
``(II) whether such claim
should be determined pursuant
to the procedures established
under paragraph (5); and
``(ii) notify the claimant of the
determination, and if the claim is
disallowed, provide a statement of each
reason for the disallowance and the
procedure for obtaining agency review
or judicial determination.
``(C) Period for filing or renewing suit.--
Any claimant who files a request for expedited
relief shall be permitted to file a suit, or to
continue a suit filed before the date of
appointment of the receiver, seeking a
determination of the rights of the claimant
with respect to such security interest after
the earlier of--
``(i) the end of the 90-day period
beginning on the date of the filing of
a request for expedited relief; or
``(ii) the date on which the Agency
denies the claim.
``(D) Statute of limitations.--If an action
described under subparagraph (C) is not filed,
or the motion to renew a previously filed suit
is not made, before the end of the 30-day
period beginning on the date on which such
action or motion may be filed under
subparagraph (B), the claim shall be deemed to
be disallowed as of the end of such period
(other than any portion of such claim which was
allowed by the receiver), such disallowance
shall be final, and the claimant shall have no
further rights or remedies with respect to such
claim.
``(E) Legal effect of filing.--
``(i) Statute of limitation tolled.--
For purposes of any applicable statute
of limitations, the filing of a claim
with the receiver shall constitute a
commencement of an action.
``(ii) No prejudice to other
actions.--Subject to paragraph (10),
the filing of a claim with the receiver
shall not prejudice any right of the
claimant to continue any action that
was filed before the appointment of the
receiver, subject to the determination
of claims by the receiver.
``(9) Payment of claims.--
``(A) In general.--The receiver may, in the
discretion of the receiver, and to the extent
that funds are available from the assets of the
regulated entity, pay creditor claims, in such
manner and amounts as are authorized under this
section, which are--
``(i) allowed by the receiver;
``(ii) approved by the Agency
pursuant to a final determination
pursuant to paragraph (7) or (8); or
``(iii) determined by the final
judgment of any court of competent
jurisdiction.
``(B) Agreements against the interest of the
agency.--No agreement that tends to diminish or
defeat the interest of the Agency in any asset
acquired by the Agency as receiver under this
section shall be valid against the Agency
unless such agreement is in writing and
executed by an authorized officer or
representative of the regulated entity.
``(C) Payment of dividends on claims.--The
receiver may, in the sole discretion of the
receiver, pay from the assets of the regulated
entity dividends on proved claims at any time,
and no liability shall attach to the Agency by
reason of any such payment, for failure to pay
dividends to a claimant whose claim is not
proved at the time of any such payment.
``(D) Rulemaking authority of the director.--
The Director may prescribe such rules,
including definitions of terms, as the Director
deems appropriate to establish a single uniform
interest rate for, or to make payments of post-
insolvency interest to creditors holding proven
claims against the receivership estates of the
regulated entity, following satisfaction by the
receiver of the principal amount of all
creditor claims.
``(10) Suspension of legal actions.--
``(A) In general.--After the appointment of a
conservator or receiver for a regulated entity,
the conservator or receiver may, in any
judicial action or proceeding to which such
regulated entity is or becomes a party, request
a stay for a period not to exceed--
``(i) 45 days, in the case of any
conservator; and
``(ii) 90 days, in the case of any
receiver.
``(B) Grant of stay by all courts required.--
Upon receipt of a request by the conservator or
receiver under subparagraph (A) for a stay of
any judicial action or proceeding in any court
with jurisdiction of such action or proceeding,
the court shall grant such stay as to all
parties.
``(11) Additional rights and duties.--
``(A) Prior final adjudication.--The Agency
shall abide by any final unappealable judgment
of any court of competent jurisdiction which
was rendered before the appointment of the
Agency as conservator or receiver.
``(B) Rights and remedies of conservator or
receiver.--In the event of any appealable
judgment, the Agency as conservator or
receiver--
``(i) shall have all of the rights
and remedies available to the regulated
entity (before the appointment of such
conservator or receiver) and the
Agency, including removal to Federal
court and all appellate rights; and
``(ii) shall not be required to post
any bond in order to pursue such
remedies.
``(C) No attachment or execution.--No
attachment or execution may issue by any court
upon assets in the possession of the receiver,
or upon the charter, of a regulated entity for
which the Agency has been appointed receiver.
``(D) Limitation on judicial review.--Except
as otherwise provided in this subsection, no
court shall have jurisdiction over--
``(i) any claim or action for payment
from, or any action seeking a
determination of rights with respect
to, the assets or charter of any
regulated entity for which the Agency
has been appointed receiver; or
``(ii) any claim relating to any act
or omission of such regulated entity or
the Agency as receiver.
``(E) Disposition of assets.--In exercising
any right, power, privilege, or authority as
conservator or receiver in connection with any
sale or disposition of assets of a regulated
entity for which the Agency has been appointed
conservator or receiver, the Agency shall
conduct its operations in a manner which--
``(i) maximizes the net present value
return from the sale or disposition of
such assets;
``(ii) minimizes the amount of any
loss realized in the resolution of
cases; and
``(iii) ensures adequate competition
and fair and consistent treatment of
offerors.
``(12) Statute of limitations for actions brought by
conservator or receiver.--
``(A) In general.--Notwithstanding any
provision of any contract, the applicable
statute of limitations with regard to any
action brought by the Agency as conservator or
receiver shall be--
``(i) in the case of any contract
claim, the longer of--
``(I) the 6-year period
beginning on the date on which
the claim accrues; or
``(II) the period applicable
under State law; and
``(ii) in the case of any tort claim,
the longer of--
``(I) the 3-year period
beginning on the date on which
the claim accrues; or
``(II) the period applicable
under State law.
``(B) Determination of the date on which a
claim accrues.--For purposes of subparagraph
(A), the date on which the statute of
limitations begins to run on any claim
described in such subparagraph shall be the
later of--
``(i) the date of the appointment of
the Agency as conservator or receiver;
or
``(ii) the date on which the cause of
action accrues.
``(13) Revival of expired state causes of action.--
``(A) In general.--In the case of any tort
claim described under clause (ii) for which the
statute of limitations applicable under State
law with respect to such claim has expired not
more than 5 years before the appointment of the
Agency as conservator or receiver, the Agency
may bring an action as conservator or receiver
on such claim without regard to the expiration
of the statute of limitations applicable under
State law.
``(B) Claims described.--A tort claim
referred to under clause (i) is a claim arising
from fraud, intentional misconduct resulting in
unjust enrichment, or intentional misconduct
resulting in substantial loss to the regulated
entity.
``(14) Accounting and recordkeeping requirements.--
``(A) In general.--The Agency as conservator
or receiver shall, consistent with the
accounting and reporting practices and
procedures established by the Agency, maintain
a full accounting of each conservatorship and
receivership or other disposition of a
regulated entity in default.
``(B) Annual accounting or report.--With
respect to each conservatorship or
receivership, the Agency shall make an annual
accounting or report available to the Board,
the Comptroller General of the United States,
the Committee on Banking, Housing, and Urban
Affairs of the Senate, and the Committee on
Financial Services of the House of
Representatives.
``(C) Availability of reports.--Any report
prepared under subparagraph (B) shall be made
available by the Agency upon request to any
shareholder of a regulated entity or any member
of the public.
``(D) Recordkeeping requirement.--After the
end of the 6-year period beginning on the date
on which the conservatorship or receivership is
terminated by the Director, the Agency may
destroy any records of such regulated entity
which the Agency, in the discretion of the
Agency, determines to be unnecessary, unless
directed not to do so by a court of competent
jurisdiction or governmental agency, or
prohibited by law.
``(15) Fraudulent transfers.--
``(A) In general.--The Agency, as conservator
or receiver, may avoid a transfer of any
interest of an entity-affiliated party, or any
person determined by the conservator or
receiver to be a debtor of the regulated
entity, in property, or any obligation incurred
by such party or person, that was made within 5
years of the date on which the Agency was
appointed conservator or receiver, if such
party or person voluntarily or involuntarily
made such transfer or incurred such liability
with the intent to hinder, delay, or defraud
the regulated entity, the Agency, the
conservator, or receiver.
``(B) Right of recovery.--To the extent a
transfer is avoided under subparagraph (A), the
conservator or receiver may recover, for the
benefit of the regulated entity, the property
transferred, or, if a court so orders, the
value of such property (at the time of such
transfer) from--
``(i) the initial transferee of such
transfer or the entity-affiliated party
or person for whose benefit such
transfer was made; or
``(ii) any immediate or mediate
transferee of any such initial
transferee.
``(C) Rights of transferee or obligee.--The
conservator or receiver may not recover under
subparagraph (B) from--
``(i) any transferee that takes for
value, including satisfaction or
securing of a present or antecedent
debt, in good faith; or
``(ii) any immediate or mediate good
faith transferee of such transferee.
``(D) Rights under this paragraph.--The
rights under this paragraph of the conservator
or receiver described under subparagraph (A)
shall be superior to any rights of a trustee or
any other party (other than any party which is
a Federal agency) under title 11, United States
Code.
``(16) Attachment of assets and other injunctive
relief.--Subject to paragraph (17), any court of
competent jurisdiction may, at the request of the
conservator or receiver, issue an order in accordance
with rule 65 of the Federal Rules of Civil Procedure,
including an order placing the assets of any person
designated by the conservator or receiver under the
control of the court, and appointing a trustee to hold
such assets.
``(17) Standards of proof.--Rule 65 of the Federal
Rules of Civil Procedure shall apply with respect to
any proceeding under paragraph (16) without regard to
the requirement of such rule that the applicant show
that the injury, loss, or damage is irreparable and
immediate.
``(18) Treatment of claims arising from breach of
contracts executed by the conservator or receiver.--
``(A) In general.--Notwithstanding any other
provision of this subsection, any final and
unappealable judgment for monetary damages
entered against the conservator or receiver for
the breach of an agreement executed or approved
in writing by the conservator or receiver after
the date of its appointment, shall be paid as
an administrative expense of the conservator or
receiver.
``(B) No limitation of power.--Nothing in
this paragraph shall be construed to limit the
power of the conservator or receiver to
exercise any rights under contract or law,
including to terminate, breach, cancel, or
otherwise discontinue such agreement.
``(19) General exceptions.--
``(A) Limitations.--The rights of the
conservator or receiver appointed under this
section shall be subject to the limitations on
the powers of a receiver under sections 402
through 407 of the Federal Deposit Insurance
Corporation Improvement Act of 1991 (12 U.S.C.
4402 through 4407).
``(B) Mortgages held in trust.--
``(i) In general.--Any mortgage, pool
of mortgages, or interest in a pool of
mortgages held in trust, custodial, or
agency capacity by a regulated entity
for the benefit of any person other
than the regulated entity shall not be
available to satisfy the claims of
creditors generally, except that
nothing in this clause shall be
construed to expand or otherwise affect
the authority of any regulated entity.
``(ii) Holding of mortgages.--Any
mortgage, pool of mortgages, or
interest in a pool of mortgages
described in clause (i) shall be held
by the conservator or receiver
appointed under this section for the
beneficial owners of such mortgage,
pool of mortgages, or interest in
accordance with the terms of the
agreement creating such trust,
custodial, or other agency arrangement.
``(iii) Liability of conservator or
receiver.--The liability of the
conservator or receiver appointed under
this section for damages shall, in the
case of any contingent or unliquidated
claim relating to the mortgages held in
trust, be estimated in accordance with
the regulations of the Director.
``(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) Administrative expenses of the
receiver.
``(B) Any other general or senior liability
of the regulated entity (which is not a
liability described under subparagraph (C) or
(D).
``(C) Any obligation subordinated to general
creditors (which is not an obligation described
under subparagraph (D)).
``(D) Any obligation to shareholders or
members arising as a result of their status as
shareholder or members.
``(2) 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 Director determines that such
action is necessary to maximize the value of
the assets of the regulated entity, to maximize
the present value return from the sale or other
disposition of the assets of the regulated
entity, or to minimize the amount of any loss
realized upon the sale or other disposition of
the assets of the regulated entity; and
``(B) all creditors that are similarly
situated under paragraph (1) receive not less
than the amount provided in subsection (e)(2).
``(3) 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.
``(d) Provisions Relating to Contracts Entered Into Before
Appointment of Conservator or Receiver.--
``(1) Authority to repudiate contracts.--In addition
to any other rights a conservator or receiver may have,
the conservator or receiver for any regulated entity
may disaffirm or repudiate any contract or lease--
``(A) to which such regulated entity is a
party;
``(B) the performance of which the
conservator or receiver, in its sole
discretion, determines to be burdensome; and
``(C) the disaffirmance or repudiation of
which the conservator or receiver determines,
in its sole discretion, will promote the
orderly administration of the affairs of the
regulated entity.
``(2) Timing of repudiation.--The conservator or
receiver shall determine whether or not to exercise the
rights of repudiation under this subsection within a
reasonable period following such appointment.
``(3) Claims for damages for repudiation.--
``(A) In general.--Except as otherwise
provided under subparagraph (C) and paragraphs
(4), (5), and (6), the liability of the
conservator or receiver for the disaffirmance
or repudiation of any contract pursuant to
paragraph (1) shall be--
``(i) limited to actual direct
compensatory damages; and
``(ii) determined as of--
``(I) the date of the
appointment of the conservator
or receiver; or
``(II) in the case of any
contract or agreement referred
to in paragraph (8), the date
of the disaffirmance or
repudiation of such contract or
agreement.
``(B) No liability for other damages.--For
purposes of subparagraph (A), the term `actual
direct compensatory damages' shall not
include--
``(i) punitive or exemplary damages;
``(ii) damages for lost profits or
opportunity; or
``(iii) damages for pain and
suffering.
``(C) Measure of damages for repudiation of
financial contracts.--In the case of any
qualified financial contract or agreement to
which paragraph (8) applies, compensatory
damages shall be--
``(i) deemed to include normal and
reasonable costs of cover or other
reasonable measures of damages utilized
in the industries for such contract and
agreement claims; and
``(ii) paid in accordance with this
subsection and subsection (e), except
as otherwise specifically provided in
this section.
``(4) Leases under which the regulated entity is the
lessee.--
``(A) In general.--If the conservator or
receiver disaffirms or repudiates a lease under
which the regulated entity was the lessee, the
conservator or receiver shall not be liable for
any damages (other than damages determined
under subparagraph (B)) for the disaffirmance
or repudiation of such lease.
``(B) Payments of rent.--Notwithstanding
subparagraph (A), the lessor under a lease to
which that subparagraph applies shall--
``(i) be entitled to the contractual
rent accruing before the later of the
date on which--
``(I) the notice of
disaffirmance or repudiation is
mailed; or
``(II) the disaffirmance or
repudiation becomes effective,
unless the lessor is in default
or breach of the terms of the
lease;
``(ii) have no claim for damages
under any acceleration clause or other
penalty provision in the lease; and
``(iii) have a claim for any unpaid
rent, subject to all appropriate
offsets and defenses, due as of the
date of the appointment, which shall be
paid in accordance with this subsection
and subsection (e).
``(5) Leases under which the regulated entity is the
lessor.--
``(A) In general.--If the conservator or
receiver repudiates an unexpired written lease
of real property of the regulated entity under
which the regulated entity is the lessor and
the lessee is not, as of the date of such
repudiation, in default, the lessee under such
lease may either--
``(i) treat the lease as terminated
by such repudiation; or
``(ii) remain in possession of the
leasehold interest for the balance of
the term of the lease, unless the
lessee defaults under the terms of the
lease after the date of such
repudiation.
``(B) Provisions applicable to lessee
remaining in possession.--If any lessee under a
lease described under subparagraph (A) remains
in possession of a leasehold interest under
clause (ii) of subparagraph (A)--
``(i) the lessee--
``(I) shall continue to pay
the contractual rent pursuant
to the terms of the lease after
the date of the repudiation of
such lease; and
``(II) may offset against any
rent payment which accrues
after the date of the
repudiation of the lease, and
any damages which accrue after
such date due to the
nonperformance of any
obligation of the regulated
entity under the lease after
such date; and
``(ii) the conservator or receiver
shall not be liable to the lessee for
any damages arising after such date as
a result of the repudiation, other than
the amount of any offset allowed under
clause (i)(II).
``(6) Contracts for the sale of real property.--
``(A) In general.--If the conservator or
receiver repudiates any contract for the sale
of real property and the purchaser of such real
property under such contract is in possession,
and is not, as of the date of such repudiation,
in default, such purchaser may either--
``(i) treat the contract as
terminated by such repudiation; or
``(ii) remain in possession of such
real property.
``(B) Provisions applicable to purchaser
remaining in possession.--If any purchaser of
real property under any contract described
under subparagraph (A) remains in possession of
such property under clause (ii) of subparagraph
(A)--
``(i) the purchaser--
``(I) shall continue to make
all payments due under the
contract after the date of the
repudiation of the contract;
and
``(II) may offset against any
such payments any damages which
accrue after such date due to
the nonperformance (after such
date) of any obligation of the
regulated entity under the
contract; and
``(ii) the conservator or receiver
shall--
``(I) not be liable to the
purchaser for any damages
arising after such date as a
result of the repudiation,
other than the amount of any
offset allowed under clause
(i)(II);
``(II) deliver title to the
purchaser in accordance with
the provisions of the contract;
and
``(III) have no obligation
under the contract other than
the performance required under
subclause (II).
``(C) Assignment and sale allowed.--
``(i) In general.--No provision of
this paragraph shall be construed as
limiting the right of the conservator
or receiver to assign the contract
described under subparagraph (A), and
sell the property subject to the
contract and the provisions of this
paragraph.
``(ii) No liability after assignment
and sale.--If an assignment and sale
described under clause (i) is
consummated, the conservator or
receiver shall have no further
liability under the contract described
under subparagraph (A), or with respect
to the real property which was the
subject of such contract.
``(7) Service contracts.--
``(A) Services performed before
appointment.--In the case of any contract for
services between any person and any regulated
entity for which the Agency has been appointed
conservator or receiver, any claim of such
person for services performed before the
appointment of the conservator or receiver
shall be--
``(i) a claim to be paid in
accordance with subsections (b) and
(e); and
``(ii) deemed to have arisen as of
the date on which the conservator or
receiver was appointed.
``(B) Services performed after appointment
and prior to repudiation.--If, in the case of
any contract for services described under
subparagraph (A), the conservator or receiver
accepts performance by the other person before
the conservator or receiver makes any
determination to exercise the right of
repudiation of such contract under this
section--
``(i) the other party shall be paid
under the terms of the contract for the
services performed; and
``(ii) the amount of such payment
shall be treated as an administrative
expense of the conservatorship or
receivership.
``(C) Acceptance of performance no bar to
subsequent repudiation.--The acceptance by the
conservator or receiver of services referred to
under subparagraph (B) in connection with a
contract described in such subparagraph shall
not affect the right of the conservator or
receiver to repudiate such contract under this
section at any time after such performance.
``(8) Certain qualified financial contracts.--
``(A) Rights of parties to contracts.--
Subject to paragraphs (9) and (10), and
notwithstanding any other provision of this
title (other than subsection (b)(9)(B) of this
section), any other Federal law, or the law of
any State, no person shall be stayed or
prohibited from exercising--
``(i) any right of that person to
cause the termination, liquidation, or
acceleration of any qualified financial
contract with a regulated entity that
arises upon the appointment of the
Agency as receiver for such regulated
entity at any time after such
appointment;
``(ii) any right under any security
agreement or arrangement or other
credit enhancement relating to one or
more qualified financial contracts; or
``(iii) any right to offset or net
out any termination value, payment
amount, or other transfer obligation
arising under or in connection with 1
or more contracts and agreements
described in clause (i), including any
master agreement for such contracts or
agreements.
``(B) Applicability of other provisions.--
Subsection (b)(10) shall apply in the case of
any judicial action or proceeding brought
against any receiver referred to under
subparagraph (A), or the regulated entity for
which such receiver was appointed, by any party
to a contract or agreement described under
subparagraph (A)(i) with such regulated entity.
``(C) Certain transfers not avoidable.--
``(i) In general.--Notwithstanding
paragraph (11), or any other provision
of Federal or State law relating to the
avoidance of preferential or fraudulent
transfers, the Agency, whether acting
as such or as conservator or receiver
of a regulated entity, may not avoid
any transfer of money or other property
in connection with any qualified
financial contract with a regulated
entity.
``(ii) Exception for certain
transfers.--Clause (i) shall not apply
to any transfer of money or other
property in connection with any
qualified financial contract with a
regulated entity if the Agency
determines that the transferee had
actual intent to hinder, delay, or
defraud such regulated entity, the
creditors of such regulated entity, or
any conservator or receiver appointed
for such regulated entity.
``(D) Certain contracts and agreements
defined.--In this subsection the following
definitions shall apply:
``(i) Qualified financial contract.--
The term `qualified financial contract'
means any securities contract,
commodity contract, forward contract,
repurchase agreement, swap agreement,
and any similar agreement that the
Agency determines by regulation,
resolution, or order to be a qualified
financial contract for purposes of this
paragraph.
``(ii) Securities contract.--The term
`securities contract'--
``(I) means a contract for
the purchase, sale, or loan of
a security, a certificate of
deposit, a mortgage loan, or
any interest in a mortgage
loan, a group or index of
securities, certificates of
deposit, or mortgage loans or
interests therein (including
any interest therein or based
on the value thereof) or any
option on any of the foregoing,
including any option to
purchase or sell any such
security, certificate of
deposit, mortgage loan,
interest, group or index, or
option, and including any
repurchase or reverse
repurchase transaction on any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option;
``(II) does not include any
purchase, sale, or repurchase
obligation under a
participation in a commercial
mortgage loan, unless the
Agency determines by
regulation, resolution, or
order to include any such
agreement within the meaning of
such term;
``(III) means any option
entered into on a national
securities exchange relating to
foreign currencies;
``(IV) means the guarantee by
or to any securities clearing
agency of any settlement of
cash, securities, certificates
of deposit, mortgage loans or
interests therein, group or
index of securities,
certificates of deposit, or
mortgage loans or interests
therein (including any interest
therein or based on the value
thereof) or option on any of
the foregoing, including any
option to purchase or sell any
such security, certificate of
deposit, mortgage loan,
interest, group or index, or
option;
``(V) means any margin loan;
``(VI) means any other
agreement or transaction that
is similar to any agreement or
transaction referred to in this
clause;
``(VII) means any combination
of the agreements or
transactions referred to in
this clause;
``(VIII) means any option to
enter into any agreement or
transaction referred to in this
clause;
``(IX) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), (IV), (V), (VI), (VII),
or (VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
securities contract under this
clause, except that the master
agreement shall be considered
to be a securities contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (III), (IV),
(V), (VI), (VII), or (VIII);
and
``(X) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in this
clause, including any guarantee
or reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.
``(iii) Commodity contract.--The term
`commodity contract' means--
``(I) with respect to a
futures commission merchant, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade;
``(II) with respect to a
foreign futures commission
merchant, a foreign future;
``(III) with respect to a
leverage transaction merchant,
a leverage transaction;
``(IV) with respect to a
clearing organization, a
contract for the purchase or
sale of a commodity for future
delivery on, or subject to the
rules of, a contract market or
board of trade that is cleared
by such clearing organization,
or commodity option traded on,
or subject to the rules of, a
contract market or board of
trade that is cleared by such
clearing organization;
``(V) with respect to a
commodity options dealer, a
commodity option;
``(VI) any other agreement or
transaction that is similar to
any agreement or transaction
referred to in this clause;
``(VII) any combination of
the agreements or transactions
referred to in this clause;
``(VIII) any option to enter
into any agreement or
transaction referred to in this
clause;
``(IX) a master agreement
that provides for an agreement
or transaction referred to in
subclause (I), (II), (III),
(IV), (V), (VI), (VII), or
(VIII), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
provides for an agreement or
transaction that is not a
commodity contract under this
clause, except that the master
agreement shall be considered
to be a commodity contract
under this clause only with
respect to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (II), (III),
(IV), (V), (VI), (VII), or
(VIII); or
``(X) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in this clause,
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
this clause.
``(iv) Forward contract.--The term
`forward contract' means--
``(I) a contract (other than
a commodity contract) for the
purchase, sale, or transfer of
a commodity or any similar
good, article, service, right,
or interest which is presently
or in the future becomes the
subject of dealing in the
forward contract trade, or
product or byproduct thereof,
with a maturity date more than
2 days after the date on which
the contract is entered into,
including a repurchase
transaction, reverse repurchase
transaction, consignment,
lease, swap, hedge transaction,
deposit, loan, option,
allocated transaction,
unallocated transaction, or any
other similar agreement;
``(II) any combination of
agreements or transactions
referred to in subclauses (I)
and (III);
``(III) any option to enter
into any agreement or
transaction referred to in
subclause (I) or (II);
``(IV) a master agreement
that provides for an agreement
or transaction referred to in
subclauses (I), (II), or (III),
together with all supplements
to any such master agreement,
without regard to whether the
master agreement provides for
an agreement or transaction
that is not a forward contract
under this clause, except that
the master agreement shall be
considered to be a forward
contract under this clause only
with respect to each agreement
or transaction under the master
agreement that is referred to
in subclause (I), (II), or
(III); or
``(V) any security agreement
or arrangement or other credit
enhancement related to any
agreement or transaction
referred to in subclause (I),
(II), (III), or (IV), including
any guarantee or reimbursement
obligation in connection with
any agreement or transaction
referred to in any such
subclause.
``(v) Repurchase agreement.--The term
`repurchase agreement' (including a
reverse repurchase agreement)--
``(I) means an agreement,
including related terms, which
provides for the transfer of
one or more certificates of
deposit, mortgage-related
securities (as such term is
defined in section 3 of the
Securities Exchange Act of
1934), mortgage loans,
interests in mortgage-related
securities or mortgage loans,
eligible bankers' acceptances,
qualified foreign government
securities (defined for
purposes of this clause as a
security that is a direct
obligation of, or that is fully
guaranteed by, the central
government of a member of the
Organization for Economic
Cooperation and Development, as
determined by regulation or
order adopted by the
appropriate Federal banking
authority), or securities that
are direct obligations of, or
that are fully guaranteed by,
the United States or any agency
of the United States against
the transfer of funds by the
transferee of such certificates
of deposit, eligible bankers'
acceptances, securities,
mortgage loans, or interests
with a simultaneous agreement
by such transferee to transfer
to the transferor thereof
certificates of deposit,
eligible bankers' acceptances,
securities, mortgage loans, or
interests as described above,
at a date certain not later
than 1 year after such
transfers or on demand, against
the transfer of funds, or any
other similar agreement;
``(II) does not include any
repurchase obligation under a
participation in a commercial
mortgage loan, unless the
Agency determines by
regulation, resolution, or
order to include any such
participation within the
meaning of such term;
``(III) means any combination
of agreements or transactions
referred to in subclauses (I)
and (IV);
``(IV) means any option to
enter into any agreement or
transaction referred to in
subclause (I) or (III);
``(V) means a master
agreement that provides for an
agreement or transaction
referred to in subclause (I),
(III), or (IV), together with
all supplements to any such
master agreement, without
regard to whether the master
agreement provides for an
agreement or transaction that
is not a repurchase agreement
under this clause, except that
the master agreement shall be
considered to be a repurchase
agreement under this subclause
only with respect to each
agreement or transaction under
the master agreement that is
referred to in subclause (I),
(III), or (IV); and
``(VI) means any security
agreement or arrangement or
other credit enhancement
related to any agreement or
transaction referred to in
subclause (I), (III), (IV), or
(V), including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
any such subclause.
``(vi) Swap agreement.--The term
`swap agreement' means--
``(I) any agreement,
including the terms and
conditions incorporated by
reference in any such
agreement, which is an interest
rate swap, option, future, or
forward agreement, including a
rate floor, rate cap, rate
collar, cross-currency rate
swap, and basis swap; a spot,
same day-tomorrow, tomorrow-
next, forward, or other foreign
exchange or precious metals
agreement; a currency swap,
option, future, or forward
agreement; an equity index or
equity swap, option, future, or
forward agreement; a debt index
or debt swap, option, future,
or forward agreement; a total
return, credit spread or credit
swap, option, future, or
forward agreement; a commodity
index or commodity swap,
option, future, or forward
agreement; or a weather swap,
weather derivative, or weather
option;
``(II) any agreement or
transaction that is similar to
any other agreement or
transaction referred to in this
clause and that is of a type
that has been, is presently, or
in the future becomes, the
subject of recurrent dealings
in the swap markets (including
terms and conditions
incorporated by reference in
such agreement) and that is a
forward, swap, future, or
option on one or more rates,
currencies, commodities, equity
securities or other equity
instruments, debt securities or
other debt instruments,
quantitative measures
associated with an occurrence,
extent of an occurrence, or
contingency associated with a
financial, commercial, or
economic consequence, or
economic or financial indices
or measures of economic or
financial risk or value;
``(III) any combination of
agreements or transactions
referred to in this clause;
``(IV) any option to enter
into any agreement or
transaction referred to in this
clause;
``(V) a master agreement that
provides for an agreement or
transaction referred to in
subclause (I), (II), (III), or
(IV), together with all
supplements to any such master
agreement, without regard to
whether the master agreement
contains an agreement or
transaction that is not a swap
agreement under this clause,
except that the master
agreement shall be considered
to be a swap agreement under
this clause only with respect
to each agreement or
transaction under the master
agreement that is referred to
in subclause (I), (II), (III),
or (IV); and
``(VI) any security agreement
or arrangement or other credit
enhancement related to any
agreements or transactions
referred to in subclause (I),
(II), (III), (IV), or (V),
including any guarantee or
reimbursement obligation in
connection with any agreement
or transaction referred to in
any such subclause.
``(vii) Treatment of master agreement
as one agreement.--Any master agreement
for any contract or agreement described
in any preceding clause of this
subparagraph (or any master agreement
for such master agreement or
agreements), together with all
supplements to such master agreement,
shall be treated as a single agreement
and a single qualified financial
contract. If a master agreement
contains provisions relating to
agreements or transactions that are not
themselves qualified financial
contracts, the master agreement shall
be deemed to be a qualified financial
contract only with respect to those
transactions that are themselves
qualified financial contracts.
``(viii) Transfer.--The term
`transfer' means every mode, direct or
indirect, absolute or conditional,
voluntary or involuntary, of disposing
of or parting with property or with an
interest in property, including
retention of title as a security
interest and foreclosure of the equity
of redemption of the regulated entity.
``(E) Certain protections in event of
appointment of conservator.--Notwithstanding
any other provision of this section, any other
Federal law, or the law of any State (other
than paragraph (10) of this subsection and
subsection (b)(9)(B)), no person shall be
stayed or prohibited from exercising--
``(i) any right such person has to
cause the termination, liquidation, or
acceleration of any qualified financial
contract with a regulated entity in a
conservatorship based upon a default
under such financial contract which is
enforceable under applicable
noninsolvency law;
``(ii) any right under any security
agreement or arrangement or other
credit enhancement relating to 1 or
more such qualified financial
contracts; or
``(iii) any right to offset or net
out any termination values, payment
amounts, or other transfer obligations
arising under or in connection with
such qualified financial contracts.
``(F) Clarification.--No provision of law
shall be construed as limiting the right or
power of the Agency, or authorizing any court
or agency to limit or delay in any manner, the
right or power of the Agency to transfer any
qualified financial contract in accordance with
paragraphs (9) and (10), or to disaffirm or
repudiate any such contract in accordance with
subsection (d)(1).
``(G) Walkaway clauses not effective.--
``(i) In general.--Notwithstanding
the provisions of subparagraphs (A) and
(E), and sections 403 and 404 of the
Federal Deposit Insurance Corporation
Improvement Act of 1991, no walkaway
clause shall be enforceable in a
qualified financial contract of a
regulated entity in default.
``(ii) Walkaway clause defined.--For
purposes of this subparagraph, the term
`walkaway clause' means a provision in
a qualified financial contract that,
after calculation of a value of a
party's position or an amount due to or
from 1 of the parties in accordance
with its terms upon termination,
liquidation, or acceleration of the
qualified financial contract, either
does not create a payment obligation of
a party or extinguishes a payment
obligation of a party in whole or in
part solely because of the status of
such party as a nondefaulting party.
``(9) Transfer of qualified financial contracts.--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--
``(A) transfer to 1 person--
``(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 clause (i), or
any claim described in clause (ii) or
(iii) under any such contract; or
``(B) transfer none of the financial
contracts, claims, or property referred to
under subparagraph (A) (with respect to such
person and any affiliate of such person).
``(10) Notification of transfer.--
``(A) In general.--The conservator or
receiver shall notify any person that is a
party to a contract or transfer by 5:00 p.m.
(Eastern Standard Time) on the business day
following the date of the appointment of the
receiver in the case of a receivership, or the
business day following such transfer in the
case of a conservatorship, if--
``(i) the conservator or receiver for
a regulated entity in default makes any
transfer of the assets and liabilities
of such regulated entity; and
``(ii) such transfer includes any
qualified financial contract.
``(B) Certain rights not enforceable.--
``(i) Receivership.--A person who is
a party to a qualified financial
contract with a regulated entity may
not exercise any right that such person
has to terminate, liquidate, or net
such contract under paragraph (8)(A) of
this subsection or under section 403 or
404 of the Federal Deposit Insurance
Corporation Improvement Act of 1991,
solely by reason of or incidental to
the appointment of a receiver for the
regulated entity (or the insolvency or
financial condition of the regulated
entity for which the receiver has been
appointed)--
``(I) until 5:00 p.m.
(Eastern Standard Time) on the
business day following the date
of the appointment of the
receiver; or
``(II) after the person has
received notice that the
contract has been transferred
pursuant to paragraph (9)(A).
``(ii) Conservatorship.--A person who
is a party to a qualified financial
contract with a regulated entity may
not exercise any right that such person
has to terminate, liquidate, or net
such contract under paragraph (8)(E) of
this subsection or under section 403 or
404 of the Federal Deposit Insurance
Corporation Improvement Act of 1991,
solely by reason of or incidental to
the appointment of a conservator for
the regulated entity (or the insolvency
or financial condition of the regulated
entity for which the conservator has
been appointed).
``(iii) Notice.--For purposes of this
paragraph, the conservator or receiver
of a regulated entity shall be deemed
to have notified a person who is a
party to a qualified financial contract
with such regulated entity, if the
conservator or receiver has taken steps
reasonably calculated to provide notice
to such person by the time specified in
subparagraph (A).
``(C) Business day defined.--For purposes of
this paragraph, the term `business day' means
any day other than any Saturday, Sunday, or any
day on which either the New York Stock Exchange
or the Federal Reserve Bank of New York is
closed.
``(11) Disaffirmance or repudiation of qualified
financial contracts.--In exercising the rights of
disaffirmance or repudiation of a conservator or
receiver with respect to any qualified financial
contract to which a regulated entity is a party, the
conservator or receiver for such institution shall
either--
``(A) disaffirm or repudiate all qualified
financial contracts between--
``(i) any person or any affiliate of
such person; and
``(ii) the regulated entity in
default; or
``(B) disaffirm or repudiate none of the
qualified financial contracts referred to in
subparagraph (A) (with respect to such person
or any affiliate of such person).
``(12) Certain security interests not avoidable.--No
provision of this subsection shall be construed as
permitting the avoidance of any legally enforceable or
perfected security interest in any of the assets of any
regulated entity, except where such an interest is
taken in contemplation of the insolvency of the
regulated entity, or with the intent to hinder, delay,
or defraud the regulated entity or the creditors of
such regulated entity.
``(13) Authority to enforce contracts.--
``(A) In general.--Notwithstanding any
provision of a contract providing for
termination, default, acceleration, or exercise
of rights upon, or solely by reason of,
insolvency or the appointment of, or the
exercise of rights or powers by, a conservator
or receiver, the conservator or receiver may
enforce any contract, other than a contract for
liability insurance for a director or officer,
or a contract or a regulated entity bond,
entered into by the regulated entity.
``(B) Certain rights not affected.--No
provision of this paragraph may be construed as
impairing or affecting any right of the
conservator or receiver to enforce or recover
under a liability insurance contract for an
officer or director, or regulated entity bond
under other applicable law.
``(C) Consent requirement.--
``(i) In general.--Except as
otherwise provided under this section,
no person may exercise any right or
power to terminate, accelerate, or
declare a default under any contract to
which a regulated entity is a party, or
to obtain possession of or exercise
control over any property of the
regulated entity, or affect any
contractual rights of the regulated
entity, without the consent of the
conservator or receiver, as
appropriate, for a period of--
``(I) 45 days after the date
of appointment of a
conservator; or
``(II) 90 days after the date
of appointment of a receiver.
``(ii) Exceptions.--This subparagraph
shall not--
``(I) apply to a contract for
liability insurance for an
officer or director;
``(II) apply to the rights of
parties to certain qualified
financial contracts under
subsection (d)(8); and
``(III) be construed as
permitting the conservator or
receiver to fail to comply with
otherwise enforceable
provisions of such contracts.
``(14) Savings clause.--The meanings of terms used in
this subsection are applicable for purposes of this
subsection only, and shall not be construed or applied
so as to challenge or affect the characterization,
definition, or treatment of any similar terms under any
other statute, regulation, or rule, including the
Gramm-Leach-Bliley Act, the Legal Certainty for Bank
Products Act of 2000, the securities laws (as that term
is defined in section 3(a)(47) of the Securities
Exchange Act of 1934), and the Commodity Exchange Act.
``(15) Exception for federal reserve and federal home
loan banks.--No provision of this subsection shall
apply with respect to--
``(A) any extension of credit from any
Federal Home Loan Bank or Federal Reserve Bank
to any regulated entity; or
``(B) any security interest in the assets of
the regulated entity securing any such
extension of credit.
``(e) Valuation of Claims in Default.--
``(1) In general.--Notwithstanding any other
provision of Federal law or the law of any State, and
regardless of the method which the Agency determines to
utilize with respect to a regulated entity in default
or in danger of default, including transactions
authorized under subsection (i), this subsection shall
govern the rights of the creditors of such regulated
entity.
``(2) Maximum liability.--The maximum liability of
the Agency, acting as receiver or in any other
capacity, to any person having a claim against the
receiver or the regulated entity for which such
receiver is appointed shall be not more than the amount
that such claimant would have received if the Agency
had liquidated the assets and liabilities of the
regulated entity without exercising the authority of
the Agency under subsection (i).
``(f) Limitation on Court Action.--Except as provided in this
section or at the request of the Director, no court may take
any action to restrain or affect the exercise of powers or
functions of the Agency as a conservator or a receiver.
``(g) Liability of Directors and Officers.--
``(1) In general.--A director or officer of a
regulated entity may be held personally liable for
monetary damages in any civil action described in
paragraph (2) brought by, on behalf of, or at the
request or direction of the Agency, and prosecuted
wholly or partially for the benefit of the Agency--
``(A) acting as conservator or receiver of
such regulated entity; or
``(B) acting based upon a suit, claim, or
cause of action purchased from, assigned by, or
otherwise conveyed by such receiver or
conservator.
``(2) Actions addressed.--Paragraph (1) applies in
any civil action for gross negligence, including any
similar conduct or conduct that demonstrates a greater
disregard of a duty of care than gross negligence,
including intentional tortious conduct, as such terms
are defined and determined under applicable State law.
``(3) No limitation.--Nothing in this subsection
shall impair or affect any right of the Agency under
other applicable law.
``(h) Damages.--In any proceeding related to any claim
against a director, officer, employee, agent, attorney,
accountant, appraiser, or any other party employed by or
providing services to a regulated entity, recoverable damages
determined to result from the improvident or otherwise improper
use or investment of any assets of the regulated entity shall
include principal losses and appropriate interest.
``(i) Limited-Life Regulated Entities.--
``(1) Organization.--
``(A) Purpose.--The Agency, as receiver
appointed pursuant to subsection (a)--
``(i) may, in the case of a Federal
Home Loan Bank, organize a limited-life
regulated entity with those powers and
attributes of the Federal Home Loan
Bank in default or in danger of default
as the Director determines necessary,
subject to the provisions of this
subsection, and the Director shall
grant a temporary charter to that
limited-life regulated entity, and that
limited-life regulated entity may
operate subject to that charter; and
``(ii) shall, in the case of an
enterprise, organize a limited-life
regulated entity with respect to that
enterprise in accordance with this
subsection.
``(B) Authorities.--Upon the creation of a
limited-life regulated entity under
subparagraph (A), the limited-life regulated
entity may--
``(i) assume such liabilities of the
regulated entity that is in default or
in danger of default as the Agency may,
in its discretion, determine to be
appropriate, except that the
liabilities assumed shall not exceed
the amount of assets purchased or
transferred from the regulated entity
to the limited-life regulated entity;
``(ii) purchase such assets of the
regulated entity that is in default, or
in danger of default as the Agency may,
in its discretion, determine to be
appropriate; and
``(iii) perform any other temporary
function which the Agency may, in its
discretion, prescribe in accordance
with this section.
``(2) Charter and establishment.--
``(A) Transfer of charter.--
``(i) Fannie mae.--If the Agency is
appointed as receiver for the Federal
National Mortgage Association, the
limited-life regulated entity
established under this subsection with
respect to such enterprise shall, by
operation of law and immediately upon
its organization--
``(I) succeed to the charter
of the Federal National
Mortgage Association, as set
forth in the Federal National
Mortgage Association Charter
Act; and
``(II) thereafter operate in
accordance with, and subject
to, such charter, this Act, and
any other provision of law to
which the Federal National
Mortgage Association is
subject, except as otherwise
provided in this subsection.
``(ii) Freddie mac.--If the Agency is
appointed as receiver for the Federal
Home Loan Mortgage Corporation, the
limited-life regulated entity
established under this subsection with
respect to such enterprise shall, by
operation of law and immediately upon
its organization--
``(I) succeed to the charter
of the Federal Home Loan
Mortgage Corporation, as set
forth in the Federal Home Loan
Mortgage Corporation Charter
Act; and
``(II) thereafter operate in
accordance with, and subject
to, such charter, this Act, and
any other provision of law to
which the Federal Home Loan
Mortgage Corporation is
subject, except as otherwise
provided in this subsection.
``(B) Interests in and assets and obligations
of regulated entity in default.--
Notwithstanding subparagraph (A) or any other
provision of law--
``(i) a limited-life regulated entity
shall assume, acquire, or succeed to
the assets or liabilities of a
regulated entity only to the extent
that such assets or liabilities are
transferred by the Agency to the
limited-life regulated entity in
accordance with, and subject to the
restrictions set forth in, paragraph
(1)(B);
``(ii) a limited-life regulated
entity shall not assume, acquire, or
succeed to any obligation that a
regulated entity for which a receiver
has been appointed may have to any
shareholder of the regulated entity
that arises as a result of the status
of that person as a shareholder of the
regulated entity; and
``(iii) no shareholder or creditor of
a regulated entity shall have any right
or claim against the charter of the
regulated entity once the Agency has
been appointed receiver for the
regulated entity and a limited-life
regulated entity succeeds to the
charter pursuant to subparagraph (A).
``(C) Limited-life regulated entity treated
as being in default for certain purposes.--A
limited-life regulated entity shall be treated
as a regulated entity in default at such times
and for such purposes as the Agency may, in its
discretion, determine.
``(D) Management.--Upon its establishment, a
limited-life regulated entity shall be under
the management of a board of directors
consisting of not fewer than 5 nor more than 10
members appointed by the Agency.
``(E) Bylaws.--The board of directors of a
limited-life regulated entity shall adopt such
bylaws as may be approved by the Agency.
``(3) Capital stock.--
``(A) No agency requirement.--The
Agency is not required to pay capital
stock into a limited-life regulated
entity or to issue any capital stock on
behalf of a limited-life regulated
entity established under this
subsection.
``(B) Authority.--If the Director
determines that such action is
advisable, the Agency may cause capital
stock or other securities of a limited-
life regulated entity established with
respect to an enterprise to be issued
and offered for sale, in such amounts
and on such terms and conditions as the
Director may determine, in the
discretion of the Director.
``(4) Investments.--Funds of a limited-life regulated
entity shall be kept on hand in cash, invested in
obligations of the United States or obligations
guaranteed as to principal and interest by the United
States, or deposited with the Agency, or any Federal
reserve bank.
``(5) Exempt tax status.--Notwithstanding any other
provision of Federal or State law, a limited-life
regulated entity, its franchise, property, 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.
``(6) Winding up.--
``(A) In general.--Subject to subparagraphs
(B) and (C), not later than 2 years after the
date of its organization, the Agency shall wind
up the affairs of a limited-life regulated
entity.
``(B) Extension.--The Director may, in the
discretion of the Director, extend the status
of a limited-life regulated entity for 3
additional 1-year periods.
``(C) Termination of status as limited-life
regulated entity.--
``(i) In general.--Upon the sale by
the Agency of 80 percent or more of the
capital stock of a limited-life
regulated entity, as defined in clause
(iv), to 1 or more persons (other than
the Agency)--
``(I) the status of the
limited-life regulated entity
as such shall terminate; and
``(II) the entity shall cease
to be a limited-life regulated
entity for purposes of this
subsection.
``(ii) Divestiture of remaining
stock, if any.--
``(I) In general.--Not later
than 1 year after the date on
which the status of a limited-
life regulated entity is
terminated pursuant to clause
(i), the Agency shall sell to 1
or more persons (other than the
Agency) any remaining capital
stock of the former limited-
life regulated entity.
``(II) Extension
authorized.--The Director may
extend the period referred to
in subclause (I) for not longer
than an additional 2 years, if
the Director determines that
such action would be in the
public interest.
``(iii) Savings clause.--
Notwithstanding any provision of law,
other than clause (ii), the Agency
shall not be required to sell the
capital stock of an enterprise or a
limited-life regulated entity
established with respect to an
enterprise.
``(iv) Applicability.--This
subparagraph applies only with respect
to a limited-life regulated entity that
is established with respect to an
enterprise.
``(7) Transfer of assets and liabilities.--
``(A) In general.--
``(i) Transfer of assets and
liabilities.--The Agency, as receiver,
may transfer any assets and liabilities
of a regulated entity in default, or in
danger of default, to the limited-life
regulated entity in accordance with and
subject to the restrictions of
paragraph (1).
``(ii) Subsequent transfers.--At any
time after the establishment of a
limited-life regulated entity, the
Agency, as receiver, may transfer any
assets and liabilities of the regulated
entity in default, or in danger of
default, as the Agency may, in its
discretion, determine to be appropriate
in accordance with and subject to the
restrictions of paragraph (1).
``(iii) Effective without approval.--
The transfer of any assets or
liabilities of a regulated entity in
default or in danger of default to a
limited-life regulated entity shall be
effective without any further approval
under Federal or State law, assignment,
or consent with respect thereto.
``(iv) Equitable treatment of
similarly situated creditors.--The
Agency shall treat all creditors of a
regulated entity in default or in
danger of default that are similarly
situated under subsection (c)(1) in a
similar manner in exercising the
authority of the Agency under this
subsection to transfer any assets or
liabilities of the regulated entity to
the limited-life regulated entity
established with respect to such
regulated entity, except that the
Agency may take actions (including
making payments) that do not comply
with this clause, if--
``(I) the Director determines
that such actions are necessary
to maximize the value of the
assets of the regulated entity,
to maximize the present value
return from the sale or other
disposition of the assets of
the regulated entity, or to
minimize the amount of any loss
realized upon the sale or other
disposition of the assets of
the regulated entity; and
``(II) all creditors that are
similarly situated under
subsection (c)(1) receive not
less than the amount provided
in subsection (e)(2).
``(v) Limitation on transfer of
liabilities.--Notwithstanding any other
provision of law, the aggregate amount
of liabilities of a regulated entity
that are transferred to, or assumed by,
a limited-life regulated entity may not
exceed the aggregate amount of assets
of the regulated entity that are
transferred to, or purchased by, the
limited-life regulated entity.
``(8) Regulations.--The Agency may promulgate such
regulations as the Agency determines to be necessary or
appropriate to implement this subsection.
``(9) Powers of limited-life regulated entities.--
``(A) In general.--Each limited-life
regulated entity created under this subsection
shall have all corporate powers of, and be
subject to the same provisions of law as, the
regulated entity in default or in danger of
default to which it relates, except that--
``(i) the Agency may--
``(I) remove the directors of
a limited-life regulated
entity;
``(II) fix the compensation
of members of the board of
directors and senior
management, as determined by
the Agency in its discretion,
of a limited-life regulated
entity; and
``(III) indemnify the
representatives for purposes of
paragraph (1)(B), and the
directors, officers, employees,
and agents of a limited-life
regulated entity on such terms
as the Agency determines to be
appropriate; and
``(ii) the board of directors of a
limited-life regulated entity--
``(I) shall elect a
chairperson who may also serve
in the position of chief
executive officer, except that
such person shall not serve
either as chairperson or as
chief executive officer without
the prior approval of the
Agency; and
``(II) may appoint a chief
executive officer who is not
also the chairperson, except
that such person shall not
serve as chief executive
officer without the prior
approval of the Agency.
``(B) Stay of judicial action.--Any judicial
action to which a limited-life regulated entity
becomes a party by virtue of its acquisition of
any assets or assumption of any liabilities of
a regulated entity in default shall be stayed
from further proceedings for a period of not
longer than 45 days, at the request of the
limited-life regulated entity. Such period may
be modified upon the consent of all parties.
``(10) No federal status.--
``(A) Agency status.--A limited-life
regulated entity is not an agency,
establishment, or instrumentality of the United
States.
``(B) Employee status.--Representatives for
purposes of paragraph (1)(B), interim
directors, directors, officers, employees, or
agents of a limited-life regulated entity are
not, solely by virtue of service in any such
capacity, officers or employees of the United
States. Any employee of the Agency or of any
Federal instrumentality who serves at the
request of the Agency as a representative for
purposes of paragraph (1)(B), interim director,
director, officer, employee, or agent of a
limited-life regulated entity shall not--
``(i) solely by virtue of service in
any such capacity lose any existing
status as an officer or employee of the
United States for purposes of title 5,
United States Code, or any other
provision of law; or
``(ii) receive any salary or benefits
for service in any such capacity with
respect to a limited-life regulated
entity in addition to such salary or
benefits as are obtained through
employment with the Agency or such
Federal instrumentality.
``(11) Authority to obtain credit.--
``(A) In general.--A limited-life regulated
entity may obtain unsecured credit and issue
unsecured debt.
``(B) Inability to obtain credit.--If a
limited-life regulated entity is unable to
obtain unsecured credit or issue unsecured
debt, the Director may authorize the obtaining
of credit or the issuance of debt by the
limited-life regulated entity--
``(i) with priority over any or all
of the obligations of the limited-life
regulated entity;
``(ii) secured by a lien on property
of the limited-life regulated entity
that is not otherwise subject to a
lien; or
``(iii) secured by a junior lien on
property of the limited-life regulated
entity that is subject to a lien.
``(C) Limitations.--
``(i) In general.--The Director,
after notice and a hearing, may
authorize the obtaining of credit or
the issuance of debt by a limited-life
regulated entity that is secured by a
senior or equal lien on property of the
limited-life regulated entity that is
subject to a lien (other than mortgages
that collateralize the mortgage-backed
securities issued or guaranteed by an
enterprise) only if--
``(I) the limited-life
regulated entity is unable to
otherwise obtain such credit or
issue such debt; and
``(II) there is adequate
protection of the interest of
the holder of the lien on the
property with respect to which
such senior or equal lien is
proposed to be granted.
``(D) Burden of proof.--In any hearing under
this subsection, the Director has the burden of
proof on the issue of adequate protection.
``(12) Effect on debts and liens.--The reversal or
modification on appeal of an authorization under this
subsection to obtain credit or issue debt, or of a
grant under this section of a priority or a lien, does
not affect the validity of any debt so issued, or any
priority or lien so granted, to an entity that extended
such credit in good faith, whether or not such entity
knew of the pendency of the appeal, unless such
authorization and the issuance of such debt, or the
granting of such priority or lien, were stayed pending
appeal.
``(j) Other Agency Exemptions.--
``(1) Applicability.--The provisions of this
subsection shall apply with respect to the Agency in
any case in which the Agency is acting as a conservator
or a receiver.
``(2) Taxation.--The Agency, including its franchise,
its capital, reserves, and surplus, and its income,
shall be exempt from all taxation imposed by any State,
county, municipality, or local taxing authority, except
that any real property of the Agency 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, except that,
notwithstanding the failure of any person to challenge
an assessment under State law of the value of such
property, and the tax thereon, shall be determined as
of the period for which such tax is imposed.
``(3) Property protection.--No property of the Agency
shall be subject to levy, attachment, garnishment,
foreclosure, or sale without the consent of the Agency,
nor shall any involuntary lien attach to the property
of the Agency.
``(4) Penalties and fines.--The Agency shall not be
liable for any amounts in the nature of penalties or
fines, including those arising from the failure of any
person to pay any real property, personal property,
probate, or recording tax or any recording or filing
fees when due.
``(k) Prohibition of Charter Revocation.--In no case may the
receiver appointed pursuant to this section revoke, annul, or
terminate the charter of an enterprise.''.
(b) Technical and Conforming Amendments.--The Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4501 et seq.) is amended--
(1) in section 1368 (12 U.S.C. 4618)--
(A) by striking ``an enterprise'' each place
that term appears and inserting ``a regulated
entity''; and
(B) by striking ``the enterprise'' each place
that term appears and inserting ``the regulated
entity'';
(2) in section 1369C (12 U.S.C. 4622), by striking
``enterprise'' each place that term appears and
inserting ``regulated entity'';
(3) in section 1369D (12 U.S.C. 4623)--
(A) by striking ``an enterprise'' each place
that term appears and inserting ``a regulated
entity''; and
(B) in subsection (a)(1), by striking ``An
enterprise'' and inserting ``A regulated
entity''; and
(4) by striking sections 1369, 1369A, and 1369B (12
U.S.C. 4619, 4620, and 4621).
Subtitle D--Enforcement Actions
SEC. 1151. CEASE AND DESIST PROCEEDINGS.
Section 1371 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4631) is amended--
(1) by striking subsections (a) and (b) and inserting
the following:
``(a) Issuance for Unsafe or Unsound Practices and
Violations.--
``(1) Authority of director.--If, in the opinion of
the Director, a regulated entity or any entity-
affiliated party is engaging or has engaged, or the
Director has reasonable cause to believe that the
regulated entity or any entity-affiliated party is
about to engage, in an unsafe or unsound practice in
conducting the business of the regulated entity or the
Office of Finance, or is violating or has violated, or
the Director has reasonable cause to believe is about
to violate, a law, rule, regulation, or order, or any
condition imposed in writing by the Director in
connection with the granting of any application or
other request by the regulated entity or the Office of
Finance or any written agreement entered into with the
Director, the Director may issue and serve upon the
regulated entity or entity-affiliated party a notice of
charges in respect thereof.
``(2) Limitation.--The Director may not, pursuant to
this section, enforce compliance 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,
with subsection (m) or (n) of section 309 of the
Federal National Mortgage Association Charter Act (12
U.S.C. 1723a(m), (n)), with subsection (e) or (f) of
section 307 of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1456(e), (f)), or with
paragraph (5) of section 10(j) of the Federal Home Loan
Bank Act (12 U.S.C. 1430(j)).
``(b) Issuance for Unsatisfactory Rating.--If a regulated
entity receives, in its most recent report of examination, a
less-than-satisfactory rating for asset quality, management,
earnings, or liquidity, the Director may (if the deficiency is
not corrected) deem the regulated entity to be engaging in an
unsafe or unsound practice for purposes of subsection (a).'';
(2) in subsection (c)--
(A) in paragraph (1), by inserting before the
period at the end the following: ``, unless the
party served with a notice of charges shall
appear at the hearing personally or by a duly
authorized representative, the party shall be
deemed to have consented to the issuance of the
cease and desist order''; and
(B) in paragraph (2)--
(i) by striking ``or director'' and
inserting ``director, or entity-
affiliated party''; and
(ii) by inserting ``or entity-
affiliated party'' before ``consents'';
(3) in each of subsections (c), (d), and (e)--
(A) by striking ``the enterprise'' each place
that term appears and inserting ``the regulated
entity'';
(B) by striking ``an enterprise'' each place
that term appears and inserting ``a regulated
entity''; and
(C) by striking ``conduct'' each place that
term appears and inserting ``practice'';
(4) in subsection (d)--
(A) in the matter preceding paragraph (1)--
(i) by striking ``or director'' and
inserting ``director, or entity-
affiliated party''; and
(ii) by inserting ``to require a
regulated entity or entity-affiliated
party'' after ``includes the
authority'';
(B) in paragraph (1)--
(i) by striking ``to require an
executive officer or a director to'';
and
(ii) by striking ``loss'' and all
that follows through ``person'' and
inserting ``loss, if'';
(iii) in subparagraph (A), by
inserting ``such entity or party or
finance facility'' before ``was''; and
(iv) by striking subparagraph (B) and
inserting the following:
``(B) the violation or practice involved a
reckless disregard for the law or any
applicable regulations or prior order of the
Director;''; and
(C) in paragraph (4), by inserting ``loan
or'' before ``asset'';
(5) in subsection (e), by inserting ``or entity-
affiliated party''--
(A) before ``or any executive''; and
(B) before the period at the end; and
(6) in subsection (f)--
(A) by striking ``enterprise'' and inserting
``regulated entity, finance facility,''; and
(B) by striking ``or director'' and inserting
``director, or entity-affiliated party''.
SEC. 1152. TEMPORARY CEASE AND DESIST PROCEEDINGS.
Section 1372 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4632) is amended--
(1) by striking subsection (a) and inserting the
following:
``(a) Grounds for Issuance.--
``(1) In general.--If the Director determines that
the actions specified in the notice of charges served
upon a regulated entity or any entity-affiliated party
pursuant to section 1371(a), or the continuation
thereof, is likely to cause insolvency or significant
dissipation of assets or earnings of that entity, or is
likely to weaken the condition of that entity prior to
the completion of the proceedings conducted pursuant to
sections 1371 and 1373, the Director may--
``(A) issue a temporary order requiring that
regulated entity or entity-affiliated party to
cease and desist from any such violation or
practice; and
``(B) require that regulated entity or
entity-affiliated party to take affirmative
action to prevent or remedy such insolvency,
dissipation, condition, or prejudice pending
completion of such proceedings.
``(2) Additional requirements.--An order issued under
paragraph (1) may include any requirement authorized
under subsection 1371(d).'';
(2) in subsection (b)--
(A) by striking ``or director'' and inserting
``director, or entity-affiliated party''; and
(B) by striking ``enterprise'' each place
that term appears and inserting ``regulated
entity'';
(3) in subsection (c), by striking ``enterprise''
each place that term appears and inserting ``regulated
entity'';
(4) in subsection (d)--
(A) by striking ``or director'' each place
that term appears and inserting ``director, or
entity-affiliated party''; and
(B) by striking ``An enterprise'' and
inserting ``A regulated entity''; and
(5) in subsection (e)--
(A) by striking ``request the Attorney
General of the United States to''; and
(B) by striking ``or may, under the direction
and control of the Attorney General, bring such
action''.
SEC. 1153. REMOVAL AND PROHIBITION AUTHORITY.
(a) In General.--Part 1 of subtitle C of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4631 et seq.) is amended--
(1) by redesignating sections 1377 through 1379B (12
U.S.C. 4637-4641) as sections 1379 through 1379D,
respectively; and
(2) by inserting after section 1376 (12 U.S.C. 4636)
the following:
``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.
``(a) Authority To Issue Order.--
``(1) In general.--The Director may serve upon a
party described in paragraph (2), or any officer,
director, or management of the Office of Finance a
written notice of the intention of the Director to
suspend or remove such party from office, or prohibit
any further participation by such party, in any manner,
in the conduct of the affairs of the regulated entity.
``(2) Applicability.--A party described in this
paragraph is an entity-affiliated party or any officer,
director, or management of the Office of Finance, if
the Director determines that--
``(A) that party, officer, or director has,
directly or indirectly--
``(i) violated--
``(I) any law or regulation;
``(II) any cease and desist
order which has become final;
``(III) any condition imposed
in writing by the Director in
connection with the grant of
any application or other
request by such regulated
entity; or
``(IV) any written agreement
between such regulated entity
and the Director;
``(ii) engaged or participated in any
unsafe or unsound practice in
connection with any regulated entity or
business institution; or
``(iii) committed or engaged in any
act, omission, or practice which
constitutes a breach of such party's
fiduciary duty;
``(B) by reason of the violation, practice,
or breach described in subparagraph (A)--
``(i) such regulated entity or
business institution has suffered or
will probably suffer financial loss or
other damage; or
``(ii) such party has received
financial gain or other benefit; and
``(C) the violation, practice, or breach
described in subparagraph (A)--
``(i) involves personal dishonesty on
the part of such party; or
``(ii) demonstrates willful or
continuing disregard by such party for
the safety or soundness of such
regulated entity or business
institution.
``(b) Suspension Order.--
``(1) Suspension or prohibition authority.--If the
Director serves written notice under subsection (a)
upon a party subject to that subsection (a), the
Director may, by order, suspend or remove such party
from office, or prohibit such party from further
participation in any manner in the conduct of the
affairs of the regulated entity, if the Director--
``(A) determines that such action is
necessary for the protection of the regulated
entity; and
``(B) serves such party with written notice
of the order.
``(2) Effective period.--Any order issued under this
subsection--
``(A) shall become effective upon service;
and
``(B) unless a court issues a stay of such
order under subsection (g), shall remain in
effect and enforceable until--
``(i) the date on which the Director
dismisses the charges contained in the
notice served under subsection (a) with
respect to such party; or
``(ii) the effective date of an order
issued under subsection (b).
``(3) Copy of order.--If the Director issues an order
under subsection (b) to any party, the Director shall
serve a copy of such order on any regulated entity with
which such party is affiliated at the time such order
is issued.
``(c) Notice, Hearing, and Order.--
``(1) Notice.--A notice under subsection (a) of the
intention of the Director to issue an order under this
section shall contain a statement of the facts
constituting grounds for such action, and shall fix a
time and place at which a hearing will be held on such
action.
``(2) Timing of hearing.--A hearing shall be fixed
for a date not earlier than 30 days, nor later than 60
days, after the date of service of notice under
subsection (a), unless an earlier or a later date is
set by the Director at the request of--
``(A) the party receiving such notice, and
good cause is shown; or
``(B) the Attorney General of the United
States.
``(3) Consent.--Unless the party that is the subject
of a notice delivered under subsection (a) appears at
the hearing in person or by a duly authorized
representative, such party shall be deemed to have
consented to the issuance of an order under this
section.
``(4) Issuance of order of suspension.--The Director
may issue an order under this section, as the Director
may deem appropriate, if--
``(A) a party is deemed to have consented to
the issuance of an order under paragraph (3);
or
``(B) upon the record made at the hearing,
the Director finds that any of the grounds
specified in the notice have been established.
``(5) Effectiveness of order.--Any order issued under
paragraph (4) shall become effective at the expiration
of 30 days after the date of service upon the relevant
regulated entity and party (except in the case of an
order issued upon consent under paragraph (3), which
shall become effective at the time specified therein).
Such order shall remain effective and enforceable
except to such extent as it is stayed, modified,
terminated, or set aside by action of the Director or a
reviewing court.
``(d) Prohibition of Certain Specific Activities.--Any person
subject to an order issued under this section shall not--
``(1) participate in any manner in the conduct of the
affairs of any regulated entity or the Office of
Finance;
``(2) solicit, procure, transfer, attempt to
transfer, vote, or attempt to vote any proxy, consent,
or authorization with respect to any voting rights in
any regulated entity;
``(3) violate any voting agreement previously
approved by the Director; or
``(4) vote for a director, or serve or act as an
entity-affiliated party of a regulated entity or as an
officer or director of the Office of Finance.
``(e) Industry-Wide Prohibition.--
``(1) In general.--Except as provided in paragraph
(2), any person who, pursuant to an order issued under
this section, has been removed or suspended from office
in a regulated entity or the Office of Finance, or
prohibited from participating in the conduct of the
affairs of a regulated entity or the Office of Finance,
may not, while such order is in effect, continue or
commence to hold any office in, or participate in any
manner in the conduct of the affairs of, any regulated
entity or the Office of Finance.
``(2) Exception if director provides written
consent.--If, on or after the date on which an order is
issued under this section which removes or suspends
from office any party, or prohibits such party from
participating in the conduct of the affairs of a
regulated entity or the Office of Finance, such party
receives the written consent of the Director, the order
shall, to the extent of such consent, cease to apply to
such party with respect to the regulated entity or such
Office of Finance described in the written consent. Any
such consent shall be publicly disclosed.
``(3) Violation of paragraph (1) treated as violation
of order.--Any violation of paragraph (1) by any person
who is subject to an order issued under subsection (h)
shall be treated as a violation of the order.
``(f) Applicability.--This section shall only apply to a
person who is an individual, unless the Director specifically
finds that it should apply to a corporation, firm, or other
business entity.
``(g) Stay of Suspension and Prohibition of Entity-Affiliated
Party.--Not later than 10 days after the date on which any
entity-affiliated party has been suspended from office or
prohibited from participation in the conduct of the affairs of
a regulated entity under this section, such party may apply to
the United States District Court for the District of Columbia,
or the United States district court for the judicial district
in which the headquarters of the regulated entity is located,
for a stay of such suspension or prohibition pending the
completion of the administrative proceedings pursuant to
subsection (c). The court shall have jurisdiction to stay such
suspension or prohibition.
``(h) Suspension or Removal of Entity-Affiliated Party
Charged With Felony.--
``(1) Suspension or prohibition.--
``(A) In general.--Whenever any entity-
affiliated party is charged in any information,
indictment, or complaint, with the commission
of or participation in a crime involving
dishonesty or breach of trust which is
punishable by imprisonment for a term exceeding
1 year under Federal or State law, the Director
may, if continued service or participation by
such party may pose a threat to the regulated
entity or impair public confidence in the
regulated entity, by written notice served upon
such party, suspend such party from office or
prohibit such party from further participation
in any manner in the conduct of the affairs of
any regulated entity.
``(B) Provisions applicable to notice.--
``(i) Copy.--A copy of any notice
under subparagraph (A) shall be served
upon the relevant regulated entity.
``(ii) Effective period.--A
suspension or prohibition under
subparagraph (A) shall remain in effect
until the information, indictment, or
complaint referred to in subparagraph
(A) is finally disposed of, or until
terminated by the Director.
``(2) Removal or prohibition.--
``(A) In general.--If a judgment of
conviction or an agreement to enter a pretrial
diversion or other similar program is entered
against an entity-affiliated party in
connection with a crime described in paragraph
(1)(A), at such time as such judgment is not
subject to further appellate review, the
Director may, if continued service or
participation by such party may pose a threat
to the regulated entity or impair public
confidence in the regulated entity, issue and
serve upon such party an order removing such
party from office or prohibiting such party
from further participation in any manner in the
conduct of the affairs of the regulated entity
without the prior written consent of the
Director.
``(B) Provisions applicable to order.--
``(i) Copy.--A copy of any order
under subparagraph (A) shall be served
upon the relevant regulated entity, at
which time the entity-affiliated party
who is subject to the order (if a
director or an officer) shall cease to
be a director or officer of such
regulated entity.
``(ii) Effect of acquittal.--A
finding of not guilty or other
disposition of the charge shall not
preclude the Director from instituting
proceedings after such finding or
disposition to remove a party from
office or to prohibit further
participation in the affairs of a
regulated entity pursuant to subsection
(a) or (b).
``(iii) Effective period.--Unless
terminated by the Director, any notice
of suspension or order of removal
issued under this subsection shall
remain effective and outstanding until
the completion of any hearing or appeal
authorized under paragraph (4).
``(3) Authority of remaining board members.--
``(A) In general.--If at any time, because of
the suspension of 1 or more directors pursuant
to this section, there shall be on the board of
directors of a regulated entity less than a
quorum of directors not so suspended, all
powers and functions vested in or exercisable
by such board shall vest in and be exercisable
by the director or directors on the board not
so suspended, until such time as there shall be
a quorum of the board of directors.
``(B) Appointment of temporary directors.--If
all of the directors of a regulated entity are
suspended pursuant to this section, the
Director shall appoint persons to serve
temporarily as directors pending the
termination of such suspensions, or until such
time as those who have been suspended cease to
be directors of the regulated entity and their
respective successors take office.
``(4) Hearing regarding continued participation.--
``(A) In general.--Not later than 30 days
after the date of service of any notice of
suspension or order of removal issued pursuant
to paragraph (1) or (2), the entity-affiliated
party may request in writing an opportunity to
appear before the Director to show that the
continued service or participation in the
conduct of the affairs of the regulated entity
by such party does not, or is not likely to,
pose a threat to the interests of the regulated
entity, or threaten to impair public confidence
in the regulated entity.
``(B) Timing and form of hearing.--Upon
receipt of a request for a hearing under
subparagraph (A), the Director shall fix a time
(not later than 30 days after the date of
receipt of such request, unless extended at the
request of such party) and place at which the
entity-affiliated party may appear, personally
or through counsel, before the Director or 1 or
more designated employees of the Director to
submit written materials (or, at the discretion
of the Director, oral testimony) and oral
argument.
``(C) Determination.--Not later than 60 days
after the date of a hearing under subparagraph
(B), the Director shall notify the entity-
affiliated party whether the suspension or
prohibition from participation in any manner in
the conduct of the affairs of the regulated
entity will be continued, terminated, or
otherwise modified, or whether the order
removing such party from office or prohibiting
such party from further participation in any
manner in the conduct of the affairs of the
regulated entity will be rescinded or otherwise
modified. Such notification shall contain a
statement of the basis for any adverse decision
of the Director.
``(5) Rules.--The Director is authorized to prescribe
such rules as may be necessary to carry out this
subsection.''.
(b) Conforming Amendments.--
(1) Safety and soundness act.--Subtitle C of the
Federal Housing Enterprises Financial Safety and
Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is
amended--
(A) in section 1317(f), by striking ``section
1379B'' and inserting ``section 1379D'';
(B) in section 1373(a)--
(i) in paragraph (1), by striking
``or 1376(c)'' and inserting ``,
1376(c), or 1377'';
(ii) in paragraph (2), by inserting
``or 1377'' after'' 1371''; and
(iii) in paragraph (4), by inserting
``or removal or prohibition'' after
``cease and desist''; and
(C) in section 1374(a)--
(i) by striking ``or 1376'' and
inserting ``1313B, 1376, or 1377''; and
(ii) by striking ``such section'' and
inserting ``this title''.
(2) Fannie mae charter act.--Section 308(b) of the
Federal National Mortgage Association Charter Act (12
U.S.C. 1723(b)) is amended in the second sentence, by
striking ``The'' and inserting ``Except to the extent
that action under section 1377 of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992
temporarily results in a lesser number, the''.
(3) Freddie mac charter act.--Section 303(a)(2)(A) of
the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1452(a)(2)(A)) is amended, in the second
sentence, by striking ``The'' and inserting ``Except to
the extent action under section 1377 of the Federal
Housing Enterprises Financial Safety and Soundness Act
of 1992 temporarily results in a lesser number, the''.
SEC. 1154. ENFORCEMENT AND JURISDICTION.
Section 1375 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4635) is amended--
(1) by striking subsection (a) and inserting the
following new subsection:
``(a) Enforcement.--The Director may, in the discretion of
the Director, apply to the United States District Court for the
District of Columbia, or the United States district court
within the jurisdiction of which the headquarters of the
regulated entity is located, for the enforcement of any
effective and outstanding notice or order issued under this
subtitle or subtitle B, or request that the Attorney General of
the United States bring such an action. Such court shall have
jurisdiction and power to order and require compliance with
such notice or order.''; and
(2) in subsection (b), by striking ``or 1376'' and
inserting ``1313B, 1376, or 1377''.
SEC. 1155. CIVIL MONEY PENALTIES.
Section 1376 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4636) is amended--
(1) by striking subsection (a) and inserting the
following:
``(a) In General.--The Director may impose a civil money
penalty in accordance with this section on any regulated entity
or any entity-affiliated party. The Director shall not impose a
civil penalty in accordance with this section on any regulated
entity or any entity-affiliated party for any violation that is
addressed under section 1345(a).'';
(2) by striking subsection (b) and inserting the
following:
``(b) Amount of Penalty.--
``(1) First tier.--A regulated entity or entity-
affiliated party shall forfeit and pay a civil penalty
of not more than $10,000 for each day during which a
violation continues, if such regulated entity or
party--
``(A) violates any provision of this title,
the authorizing statutes, or any order,
condition, rule, or regulation under this title
or any authorizing statute;
``(B) violates any final or temporary order
or notice issued pursuant to this title;
``(C) violates any condition imposed in
writing by the Director in connection with the
grant of any application or other request by
such regulated entity; or
``(D) violates any written agreement between
the regulated entity and the Director.
``(2) Second tier.--Notwithstanding paragraph (1), a
regulated entity or entity-affiliated party shall
forfeit and pay a civil penalty of not more than
$50,000 for each day during which a violation,
practice, or breach continues, if--
``(A) the regulated entity or entity-
affiliated party, respectively--
``(i) commits any violation described
in any subparagraph of paragraph (1);
``(ii) recklessly engages in an
unsafe or unsound practice in
conducting the affairs of the regulated
entity; or
``(iii) breaches any fiduciary duty;
and
``(B) the violation, practice, or breach--
``(i) is part of a pattern of
misconduct;
``(ii) causes or is likely to cause
more than a minimal loss to the
regulated entity; or
``(iii) results in pecuniary gain or
other benefit to such party.
``(3) Third tier.--Notwithstanding paragraphs (1) and
(2), any regulated entity or entity-affiliated party
shall forfeit and pay a civil penalty in an amount not
to exceed the applicable maximum amount determined
under paragraph (4) for each day during which such
violation, practice, or breach continues, if such
regulated entity or entity-affiliated party--
``(A) knowingly--
``(i) commits any violation described
in any subparagraph of paragraph (1);
``(ii) engages in any unsafe or
unsound practice in conducting the
affairs of the regulated entity; or
``(iii) breaches any fiduciary duty;
and
``(B) knowingly or recklessly causes a
substantial loss to the regulated entity or a
substantial pecuniary gain or other benefit to
such party by reason of such violation,
practice, or breach.
``(4) Maximum amounts of penalties for any violation
described in paragraph (3).--The maximum daily amount
of any civil penalty which may be assessed pursuant to
paragraph (3) for any violation, practice, or breach
described in paragraph (3) is--
``(A) in the case of any entity-affiliated
party, an amount not to exceed $2,000,000; and
``(B) in the case of any regulated entity,
$2,000,000.'';
(3) in subsection (c)--
(A) by striking ``enterprise'' each place
that term appears and inserting ``regulated
entity'';
(B) by inserting ``or entity-affiliated
party'' before ``in writing''; and
(C) by inserting ``or entity-affiliated
party'' before ``has been given'';
(4) in subsection (d)--
(A) by striking ``or director'' each place
such term appears and inserting ``director, or
entity-affiliated party'';
(B) by striking ``an enterprise'' and
inserting ``a regulated entity'';
(C) by striking ``the enterprise'' and
inserting ``the regulated entity'';
(D) by striking ``request the Attorney
General of the United States to'';
(E) by inserting ``, or the United States
district court within the jurisdiction of which
the headquarters of the regulated entity is
located,'' after ``District of Columbia'';
(F) by striking ``, or may, under the
direction and control of the Attorney General
of the United States, bring such an action'';
and
(G) by striking ``and section 1374''; and
(5) in subsection (g), by striking ``An enterprise''
and inserting ``A regulated entity''.
SEC. 1156. CRIMINAL PENALTY.
(a) In General.--Subtitle C of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4631 et seq.) is amended by inserting after section
1377, as added by this Act, the following:
``SEC. 1378. CRIMINAL PENALTY.
``Whoever, being subject to an order in effect under section
1377, without the prior written approval of the Director,
knowingly participates, directly or indirectly, in any manner
(including by engaging in an activity specifically prohibited
in such an order) in the conduct of the affairs of any
regulated entity shall, notwithstanding section 3571 of title
18, be fined not more than $1,000,000, imprisoned for not more
than 5 years, or both.''.
(b) Technical and Conforming Amendments.--The Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4501 et seq.) is amended--
(1) in section 1379 (as so designated by this Act)--
(A) by striking ``an enterprise'' and
inserting ``a regulated entity''; and
(B) by striking ``the enterprise'' and
inserting ``the regulated entity'';
(2) in section 1379A (as so designated by this Act),
by striking ``an enterprise'' and inserting ``a
regulated entity'';
(3) in section 1379B(c) (as so designated by this
Act), by striking ``enterprise'' and inserting
``regulated entity''; and
(4) in section 1379D (as so designated by this Act),
by striking ``enterprise'' and inserting ``regulated
entity''.
SEC. 1157. NOTICE AFTER SEPARATION FROM SERVICE.
Section 1379 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4637), as so
designated by this Act, is amended--
(1) by striking ``2-year'' and inserting ``6-year'';
(2) by striking ``a director or executive officer of
an enterprise'' and inserting ``an entity-affiliated
party'';
(3) by striking ``director or officer'' each place
that term appears and inserting ``entity-affiliated
party''; and
(4) by striking ``enterprise.'' and inserting
``regulated entity.''.
SEC. 1158. SUBPOENA AUTHORITY.
(a) In General.--Section 1379B of the Federal Housing
Enterprises Financial Safety and Soundness Act of 1992 (12
U.S.C. 4641) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1)--
(i) by striking ``administrative'';
(ii) by inserting ``, examination, or
investigation'' after ``proceeding'';
(iii) by striking ``subtitle'' and
inserting ``title''; and
(iv) by inserting ``or any designated
representative thereof, including any
person designated to conduct any
hearing under this subtitle'' after
``Director''; and
(B) in paragraph (4), by striking ``issued by
the Director'';
(2) in subsection (b), by inserting ``or in any
territory or other place subject to the jurisdiction of
the United States'' after ``State'';
(3) by striking subsection (c) and inserting the
following:
``(c) Enforcement.--
``(1) In general.--The Director, or any party to
proceedings under this subtitle, may apply to the
United States District Court for the District of
Columbia, or the United States district court for the
judicial district of the United States in any territory
in which such proceeding is being conducted, or where
the witness resides or carries on business, for
enforcement of any subpoena or subpoena duces tecum
issued pursuant to this section.
``(2) Power of court.--The courts described under
paragraph (1) shall have the jurisdiction and power to
order and require compliance with any subpoena issued
under paragraph (1).'';
(4) in subsection (d), by inserting ``enterprise-
affiliated party'' before ``may allow''; and
(5) by adding at the end the following:
``(e) Penalties.--A person shall be guilty of a misdemeanor,
and upon conviction, shall be subject to a fine of not more
than $1,000 or to imprisonment for a term of not more than 1
year, or both, if that person willfully fails or refuses, in
disobedience of a subpoena issued under subsection (c), to--
``(1) attend court;
``(2) testify in court;
``(3) answer any lawful inquiry; or
``(4) produce books, papers, correspondence,
contracts, agreements, or such other records as
requested in the subpoena.''.
Subtitle E--General Provisions
SEC. 1161. CONFORMING AND TECHNICAL AMENDMENTS.
(a) Amendments to 1992 Act.--The Federal Housing Enterprises
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et
seq.), as amended by this Act, is amended--
(1) in section 1315 (12 U.S.C. 4515)--
(A) in subsection (a)--
(i) by striking ``(a) Office
Personnel.--The'' and inserting ``(a)
In General.--Subject to title III of
the Federal Housing Finance Regulatory
Reform Act of 2008, the''; and
(ii) by striking ``the Office'' each
place that term appears and inserting
``the Agency'';
(B) in subsection (c), by striking ``the
Office'' and inserting ``the Agency'';
(C) in subsection (e), by striking ``the
Office'' and inserting ``the Agency'';
(D) by striking subsection (d) and
redesignating subsection (e) as subsection (d);
and
(E) by striking subsection (f);
(2) in section 1319A (12 U.S.C. 4520)--
(A) by striking ``(a) In General.--''; and
(B) by striking subsection (b);
(3) in section 1364(c) (12 U.S.C. 4614(c)), by
striking the last sentence;
(4) by striking section 1383 (12 U.S.C. 1451 note);
(5) in each of sections 1319D, 1319E, and 1319F (12
U.S.C. 4523, 4524, 4525) by striking ``the Office''
each place that term appears and inserting ``the
Agency''; and
(6) in each of sections 1319B and 1369(a)(3) (12
U.S.C. 4521, 4619(a)(3)), by striking ``Committee on
Banking, Finance and Urban Affairs'' each place such
term appears and inserting ``Committee on Financial
Services''.
(b) Amendments to Fannie Mae Charter Act.--The Federal
National Mortgage Association Charter Act (12 U.S.C. 1716 et
seq.) is amended--
(1) in each of sections 303(c)(2) (12 U.S.C.
1718(c)(2)), 309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)),
and 309(k)(1) (12 U.S.C. 1723a(k)(1)), by striking
``Director of the Office of Federal Housing Enterprise
Oversight of the Department of Housing and Urban
Development'' each place that term appears, and
inserting ``Director of the Federal Housing Finance
Agency''; and
(2) in section 309--
(A) in subsection (m) (12 U.S.C. 1723a(m))--
(i) in paragraph (1), by striking
``to the Secretary, in a form
determined by the Secretary'' and
inserting ``to the Director of the
Federal Housing Finance Agency, in a
form determined by the Director''; and
(ii) in paragraph (2), by striking
``to the Secretary, in a form
determined by the Secretary'' and
inserting ``to the Director of the
Federal Housing Finance Agency, in a
form determined by the Director'';
(B) in subsection (n) (12 U.S.C. 1723a(n))--
(i) in paragraph (1), by striking
``and the Secretary'' and inserting
``and the Director of the Federal
Housing Finance Agency''; and
(ii) in paragraph (2), by striking
``Secretary'' each place that term
appears and inserting ``Director of the
Federal Housing Finance Agency''; and
(C) in paragraph (3)(B), by striking
``Secretary'' and inserting ``Director of the
Federal Housing Finance Agency''.
(c) Amendments to Freddie Mac Charter Act.--The Federal Home
Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.) is
amended--
(1) in each of sections 303(b)(2) (12 U.S.C.
1452(b)(2)), 303(h)(2) (12 U.S.C. 1452(h)(2)), and
section 307(c)(1) (12 U.S.C. 1456(c)(1)), by striking
``Director of the Office of Federal Housing Enterprise
Oversight of the Department of Housing and Urban
Development'' each place that term appears, and
inserting ``Director of the Federal Housing Finance
Agency'';
(2) in section 306 (12 U.S.C. 1455)--
(A) in subsection (c)(2), by inserting
``the'' after ``Secretary of'';
(B) in subsection (i)--
(i) by striking ``section 1316(c)''
and inserting ``section 306(c)''; and
(ii) by striking ``section 106'' and
inserting ``section 1316''; and
(C) in subsection (j)(2), by striking ``of
substantially'' and inserting ``or
substantially''; and
(3) in section 307 (12 U.S.C. 1456)--
(A) in subsection (e)--
(i) in paragraph (1), by striking
``to the Secretary, in a form
determined by the Secretary'' and
inserting ``to the Director of the
Federal Housing Finance Agency, in a
form determined by the Director''; and
(ii) in paragraph (2), by striking
``to the Secretary, in a form
determined by the Secretary'' and
inserting ``to the Director of the
Federal Housing Finance Agency, in a
form determined by the Director''; and
(B) in subsection (f)--
(i) in paragraph (1), by striking
``and the Secretary'' and inserting
``and the Director of the Federal
Housing Finance Agency'';
(ii) in paragraph (2), by striking
``the Secretary'' each place that term
appears and inserting ``the Director of
the Federal Housing Finance Agency'';
and
(iii) in paragraph (3)(B), by
striking ``Secretary'' and inserting
``Director of the Federal Housing
Finance Agency''.
(d) Amendment to Title 18, United States Code.--Section 1905
of title 18, United States Code, is amended by striking
``Office of Federal Housing Enterprise Oversight'' and
inserting ``Federal Housing Finance Agency''.
(e) Amendments to 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 Office of Federal Housing Enterprise
Oversight of the Department of Housing and Urban Development''
and inserting ``Director of the Federal Housing Finance
Agency''.
(f) Amendment to Department of Housing and Urban Development
Act.--Section 5 of the Department of Housing and Urban
Development Act (42 U.S.C. 3534) is amended by striking
subsection (d).
(g) Amendments to Title 5, United States Code.--Title 5,
United States Code, is amended--
(1) in section 5313, by striking the item relating to
the Director of the Office of Federal Housing
Enterprise Oversight, Department of Housing and Urban
Development and inserting the following new item:
``Director of the Federal Housing Finance Agency.'';
and
(2) in section 3132(a)(1)--
(A) in subparagraph (B), by striking ``,,
and'' and inserting ``, and'';
(B) in subparagraph (D)--
(i) by striking ``the Federal Housing
Finance Board'';
(ii) by striking ``the Office of
Federal Housing Enterprise Oversight of
the Department of Housing and Urban
Development'' and inserting ``the
Federal Housing Finance Agency''; and
(iii) by striking ``or or'' at the
end;
(C) in subparagraph (E), as added by section
8(d)(1)(B)(iii) of Public Law 107-123, by
adding ``or'' at the end; and
(D) by redesignating subparagraph (E), as
added by section 10702(c)(1)(C) of Public Law
107-171, as subparagraph (F).
(h) Amendment to 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 ``and the
Director of the Federal Housing Finance Agency,'' after
``Commission,''.
(i) Amendment to Federal Deposit Insurance Act.--Section
11(t)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C.
1821(t)(2)(A)) is amended by adding at the end the following:
``(vii) Federal Housing Finance
Agency.''.
SEC. 1162. PRESIDENTIALLY-APPOINTED DIRECTORS OF ENTERPRISES.
(a) Fannie Mae.--
(1) In general.--Section 308(b) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1723(b)) is amended--
(A) in the first sentence, by striking
``eighteen persons, five of whom shall be
appointed annually by the President of the
United States, and the remainder of whom'' and
inserting ``13 persons, or such other number
that the Director determines appropriate,
who'';
(B) in the second sentence, by striking
``appointed by the President'';
(C) in the third sentence--
(i) by striking ``appointed or''; and
(ii) by striking ``, except that any
such appointed member may be removed
from office by the President for good
cause'';
(D) in the fourth sentence, by striking
``elective''; and
(E) by striking the fifth sentence.
(2) Transitional provision.--The amendments made by
paragraph (1) shall not apply to any appointed position
of the board of directors of the Federal National
Mortgage Association until the expiration of the annual
term for such position during which the effective date
under section 1163 occurs.
(b) Freddie Mac.--
(1) In general.--Section 303(a)(2) of the Federal
Home Loan Mortgage Corporation Act (12 U.S.C.
1452(a)(2)) is amended--
(A) in subparagraph (A)--
(i) in the first sentence, by
striking ``18 persons, 5 of whom shall
be appointed annually by the President
of the United States and the remainder
of whom'' and inserting ``13 persons,
or such other number as the Director
determines appropriate, who''; and
(ii) in the second sentence, by
striking ``appointed by the President
of the United States'';
(B) in subparagraph (B)--
(i) by striking ``such or''; and
(ii) by striking ``, except that any
appointed member may be removed from
office by the President for good
cause''; and
(C) in subparagraph (C)--
(i) by striking the first sentence;
and
(ii) by striking ``elective''.
(2) Transitional provision.--The amendments made by
paragraph (1) shall not apply to any appointed position
of the board of directors of the Federal Home Loan
Mortgage Corporation until the expiration of the annual
term for such position during which the effective date
under section 1163 occurs.
SEC. 1163. EFFECTIVE DATE.
Except as otherwise specifically provided in this title, this
title and the amendments made by this title shall take effect
on, and shall apply beginning on, the date of enactment of this
Act.
TITLE II--FEDERAL HOME LOAN BANKS
SEC. 1201. RECOGNITION OF DISTINCTIONS BETWEEN THE ENTERPRISES AND THE
FEDERAL HOME LOAN BANKS.
Section 1313 of the Federal Housing Enterprises Financial
Safety and Soundness Act of 1992 (12 U.S.C. 4513) is amended by
adding at the end the following:
``(f) Recognition of Distinctions Between the Enterprises and
the Federal Home Loan Banks.--Prior to promulgating any
regulation or taking any other formal or informal agency action
of general applicability and future effect relating to the
Federal Home Loan Banks (other than any regulation, advisory
document, or examination guidance of the Federal Housing
Finance Board that the Director reissues after the authority of
the Director over the Federal Home Loan Banks takes effect),
including the issuance of an advisory document or examination
guidance, the Director shall consider the differences between
the Federal Home Loan Banks and the enterprises with respect
to--
``(1) the Banks'--
``(A) cooperative ownership structure;
``(B) the mission of providing liquidity to
members;
``(C) affordable housing and community
development mission;
``(D) capital structure; and
``(E) joint and several liability; and
``(2) any other differences that the Director
considers appropriate.''.
SEC. 1202. DIRECTORS.
Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 1427)
is amended--
(1) by striking subsection (a) and inserting the
following:
``(a) Number; Election; Qualifications; Conflicts of
Interest.--
``(1) In general.--Subject to paragraphs (2) through
(4), the management of each Federal Home Loan Bank
shall be vested in a board of 13 directors, or such
other number as the Director determines appropriate.
``(2) Board makeup.--The board of directors of each
Bank shall be comprised of--
``(A) member directors, who shall comprise at
least the majority of the members of the board
of directors; and
``(B) independent directors, who shall
comprise not fewer than \2/5\ of the members of
the board of directors.
``(3) Selection criteria.--
``(A) In general.--Each member of the board
of directors shall be--
``(i) elected by plurality vote of
the members, in accordance with
procedures established under this
section; and
``(ii) a citizen of the United
States.
``(B) Independent director criteria.--
``(i) In general.--Each independent
director that is not a public interest
director under clause (ii) shall have
demonstrated knowledge of, or
experience in, financial management,
auditing and accounting, risk
management practices, derivatives,
project development, or organizational
management, or such other knowledge or
expertise as the Director may provide
by regulation.
``(ii) Public interest.--Not fewer
than 2 of the independent directors
shall have more than 4 years of
experience in representing consumer or
community interests on banking
services, credit needs, housing, or
financial consumer protections.
``(iii) Conflicts of interest.--No
independent director may, during the
term of service on the board of
directors, serve as an officer of any
Federal Home Loan Bank or as a
director, officer, or employee of any
member of a Bank, or of any person that
receives advances from a Bank.
``(4) Definitions.--For purposes of this section, the
following definitions shall apply:
``(A) Independent director.--The terms
`independent director' and `independent
directorship' mean a member of the board of
directors of a Federal Home Loan Bank who is a
bona fide resident of the district in which the
Federal Home Loan Bank is located, or the
directorship held by such a person,
respectively.
``(B) Member director.--The terms `member
director' and `member directorship' mean a
member of the board of directors of a Federal
Home Loan Bank who is an officer or director of
a member institution that is located in the
district in which the Federal Home Loan Bank is
located, or the directorship held by such a
person, respectively.'';
(2) by striking ``elective'' each place that term
appears, other than in subsections (d), (e), and (f),
and inserting ``member'';
(3) in subsection (b)--
(A) by striking the subsection heading and
all that follows through ``Each elective
directorship'' and inserting the following:
``(b) Directorships.--
``(1) Member directorships.--Each member
directorship''; and
(B) by adding at the end the following:
``(2) Independent directorships.--
``(A) Elections.--Each independent director--
``(i) shall be elected by the members
entitled to vote, from among eligible
persons nominated, after consultation
with the Advisory Council of the Bank,
by the board of directors of the Bank;
and
``(ii) shall be elected by a
plurality of the votes of the members
of the Bank at large, with each member
having the number of votes for each
such directorship as it has under
paragraph (1) in an election to fill
member directorships.
``(B) Criteria.--Nominees shall meet all
applicable requirements prescribed in this
section.
``(C) Nomination and election procedures.--
Procedures for nomination and election of
independent directors shall be prescribed by
the bylaws of each Federal Home Loan Bank, in a
manner consistent with the rules and
regulations of the Agency.'';
(4) in subsection (c)--
(A) by striking ``elective'' each place that
term appears and inserting ``member'', except--
(i) in the second sentence, the
second place that term appears; and
(ii) each place that term appears in
the fifth sentence; and
(B) in the second sentence--
(i) by inserting ``(A) except as
provided in clause (B) of this
sentence,'' before ``if at any time'';
and
(ii) by inserting before the period
at the end the following: ``, and (B)
clause (A) of this sentence shall not
apply to the directorships of any
Federal Home Loan Bank resulting from
the merger of any 2 or more such
Banks'';
(5) in subsection (d)--
(A) in the first sentence--
(i) by striking ``, whether elected
or appointed,''; and
(ii) by striking ``3 years'' and
inserting ``4 years'';
(B) in the second sentence--
(i) by striking ``Federal Home Loan
Bank System Modernization Act of 1999''
and inserting ``Federal Housing Finance
Regulatory Reform Act of 2008'';
(ii) by striking ``\1/3\'' and
inserting ``\1/4\''; and
(iii) by striking ``or appointed'';
and
(C) in the third sentence--
(i) by striking ``an elective'' each
place that term appears and inserting
``a''; and
(ii) by striking ``in any elective
directorship or elective
directorships'';
(6) in subsection (f)--
(A) by striking paragraph (2);
(B) by striking ``appointed or'' each place
that term appears; and
(C) in paragraph (3)--
(i) by striking ``(3) Elected bank
directors.--'' and inserting ``(2)
Election process.--''; and
(ii) by striking ``elective'' each
place that term appears;
(7) in subsection (i)--
(A) in paragraph (1), by striking ``Subject
to paragraph (2), each'' and inserting
``Each''; and
(B) by striking paragraph (2) and inserting
the following:
``(2) Annual report.--The Director shall include, in
the annual report submitted to the Congress pursuant to
section 1319B of the Federal Housing Enterprises
Financial Safety and Soundness Act of 1992, information
regarding the compensation and expenses paid by the
Federal Home Loan Banks to the directors on the boards
of directors of the Banks.''; and
(8) by adding at the end the following:
``(l) Transition Rule.--Any member of the board of directors
of a Bank elected or appointed in accordance with this section
prior to the date of enactment of this subsection may continue
to serve as a member of that board of directors for the
remainder of the existing term of service.''.
SEC. 1203. DEFINITIONS.
Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 1422)
is amended--
(1) by striking paragraphs (1), (10), and (11);
(2) by redesignating paragraphs (2) through (9) as
paragraphs (1) through (8), respectively;
(3) by redesignating paragraphs (12) and (13) as
paragraphs (9) and (10), respectively; and
(4) by adding at the end the following:
``(11) Director.--The term `Director' means the
Director of the Federal Housing Finance Agency.
``(12) Agency.--The term `Agency' means the Federal
Housing Finance Agency, established under section 1311
of the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992.''.
SEC. 1204. AGENCY OVERSIGHT OF FEDERAL HOME LOAN BANKS.
The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.),
other than in provisions of that Act added or amended otherwise
by this Act, is amended--
(1) by striking sections 2A and 2B (12 U.S.C. 1422a,
1422b);
(2) in section 18 (12 U.S.C. 1438), by striking
subsection (b);
(3) in section 11 (12 U.S.C. 1431)--
(A) in subsection (b)--
(i) in the first sentence--
(I) by striking ``The Board''
and inserting ``The Office of
Finance, as agent for the
Banks,''; and
(II) by striking ``the
Board'' and inserting ``such
Office''; and
(ii) in the second and fourth
sentences, by striking ``the Board''
each place such term appears and
inserting ``the Office of Finance'';
(B) in subsection (c)--
(i) by striking ``the Board'' the
first place such term appears and
inserting ``the Office of Finance, as
agent for the Banks,''; and
(ii) by striking ``the Board'' the
second place such term appears and
inserting ``such Office''; and
(C) in subsection (f)--
(i) by striking the 2 commas after
``permit'' and inserting ``or''; and
(ii) by striking the comma after
``require'';
(4) in section 6 (12 U.S.C. 1426)--
(A) in subsection (b)(1), in the matter
preceding subparagraph (A), by striking
``Finance Board approval'' and inserting
``approval by the Director''; and
(B) in each of subsections (c)(4)(B) and
(d)(2), by striking ``Finance Board
regulations'' each place that term appears and
inserting ``regulations of the Director'';
(5) in section 10(b) (12 U.S.C. 1430(b))--
(A) in the subsection heading, by striking
``Formal Board Resolution'' and inserting
``Approval of Director''; and
(B) by striking ``by formal resolution'';
(6) in section 21(b)(5) (12 U.S.C. 1441(b)(5)), by
striking ``Chairperson of the Federal Housing Finance
Board'' and inserting ``Director'';
(7) in section 15 (12 U.S.C. 1435), by inserting ``or
the Director'' after ``the Board'';
(8) by striking ``the Board'' each place that term
appears and inserting ``the Director'';
(9) by striking ``The Board'' each place that term
appears and inserting ``The Director'';
(10) by striking ``the Finance Board'' each place
that term appears and inserting ``the Director'';
(11) by striking ``The Finance Board'' each place
that term appears and inserting ``The Director''; and
(12) by striking ``Federal Housing Finance Board''
each place that term appears and inserting
``Director''.
SEC. 1205. HOUSING GOALS.
The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is
amended by inserting after section 10b the following new
section:
``SEC. 10C. HOUSING GOALS.
``(a) In General.--The Director shall establish housing goals
with respect to the purchase of mortgages, if any, by the
Federal Home Loan Banks. Such goals shall be consistent with
the goals established under sections 1331 through 1334 of the
Federal Housing Enterprises Financial Safety and Soundness Act
of 1992.
``(b) Considerations.--In establishing the goals required by
subsection (a), the Director shall consider the unique mission
and ownership structure of the Federal Home Loan Banks.
``(c) Transition Period.--To facilitate an orderly
transition, the Director shall establish interim target goals
for purposes of this section for each of the 2 calendar years
following the date of enactment of this section.
``(d) Monitoring and Enforcement of Goals.--The requirements
of section 1336 of the Federal Housing Enterprises Safety and
Soundness Act of 1992, shall apply to this section, in the same
manner and to the same extent as that section applies to the
Federal housing enterprises.
``(e) Annual Report.--The Director shall annually report to
Congress on the performance of the Banks in meeting the goals
established under this section.''.
SEC. 1206. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS.
Section 4(a)(1) of the Federal Home Loan Bank Act (12 U.S.C.
1424(a)(1)) is amended--
(1) by inserting after ``savings bank,'' the
following: ``community development financial
institution,''; and
(2) in subparagraph (B), by inserting after ``United
States,'' the following: ``or, in the case of a
community development financial institution, is
certified as a community development financial
institution under the Community Development Banking and
Financial Institutions Act of 1994.''.
SEC. 1207. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN BANKS.
The Federal Home Loan Bank Act is amended by inserting after
section 20 (12 U.S.C. 1440) the following new section:
``SEC. 20A. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN BANKS.
``(a) Information on Financial Condition.--In order to enable
each Federal Home Loan Bank to evaluate the financial condition
of one or more of the other Federal Home Loan Banks
individually and the Federal Home Loan Bank System (including
any risks associated with the issuance or repayment of
consolidated Federal Home Loan Bank bonds and debentures or
other borrowings and the joint and several liabilities of the
Banks incurred due to such borrowings), as well as to comply
with any of its obligations under the Securities Exchange Act
of 1934 (15 U.S.C. 78a et seq.), the Director shall make
available to the Banks such reports, records, or other
information as may be available, relating to the condition of
any Federal Home Loan Bank.
``(b) Sharing of Information.--
``(1) In general.--The Director shall promulgate
regulations to facilitate the sharing of information
made available under subsection (a) directly among the
Federal Home Loan Banks.
``(2) Limitation.--Notwithstanding paragraph (1), a
Federal Home Loan Bank responding to a request from
another Bank or from the Director for information
pursuant to this section may request that the Director
determine that such information is proprietary and that
the public interest requires that such information not
be shared.
``(c) Limitation.--Nothing in this section shall affect the
obligations of any Federal Home Loan Bank under the Securities
Exchange Act of 1934 (15 U.S.C. 78a et seq.) or the regulations
issued by the Securities and Exchange Commission thereunder.
``(d) No Waiver of Privilege.--The Director shall not be
deemed to have waived any privilege applicable to any
information concerning a Federal Home Loan Bank by
transferring, or permitting the transfer of, that information
to any other Federal Home Loan Bank for the purposes set out in
subsection (a).''.
SEC. 1208. EXCLUSION FROM CERTAIN REQUIREMENTS.
(a) In General.--The Federal Home Loan Banks shall be exempt
from compliance with--
(1) sections 13(e), 14(a), and 14(c) of the
Securities Exchange Act of 1934, and related Commission
regulations;
(2) section 15 of the Securities Exchange Act of
1934, and related Commission regulations, with respect
to transactions in the capital stock of a Federal Home
Loan Bank;
(3) section 17A of the Securities Exchange Act of
1934, and related Commission regulations, with respect
to the transfer of the securities of a Federal Home
Loan Bank; and
(4) the Trust Indenture Act of 1939.
(b) Member Exemption.--The members of the Federal Home Loan
Bank System shall be exempt from compliance with sections
13(d), 13(f), 13(g), 14(d), and 16 of the Securities Exchange
Act of 1934, and related Commission regulations, with respect
to ownership of or transactions in the capital stock of the
Federal Home Loan Banks by such members.
(c) Exempted and Government Securities.--
(1) Capital stock.--The capital stock issued by each
of the Federal Home Loan Banks under section 6 of the
Federal Home Loan Bank Act are--
(A) exempted securities, within the meaning
of section 3(a)(2) of the Securities Act of
1933; and
(B) exempted securities, within the meaning
of section 3(a)(12)(A) of the Securities
Exchange Act of 1934, except to the extent
provided in section 38 of that Act.
(2) Other obligations.--The debentures, bonds, and
other obligations issued under section 11 of the
Federal Home Loan Bank Act (12 U.S.C. 1431) are--
(A) exempted securities, within the meaning
of section 3(a)(2) of the Securities Act of
1933;
(B) government securities, within the meaning
of section 3(a)(42) of the Securities Exchange
Act of 1934; and
(C) government securities, within the meaning
of section 2(a)(16) of the Investment Company
Act of 1940.
(3) Brokers and dealers.--A person (other than a
Federal Home Loan Bank effecting transactions for
members of the Federal Home Loan Bank System) that
effects transactions in the capital stock or other
obligations of a Federal Home Loan Bank, for the
account of others or for that person's own account, as
applicable, is a broker or dealer, as those terms are
defined in paragraphs (4) and (5), respectively, of
section 3(a) of the Securities Exchange Act of 1934,
but is excluded from the definition of--
(A) the term ``government securities broker''
under section 3(a)(43) of the Securities
Exchange Act of 1934; and
(B) the term ``government securities dealer''
under section 3(a)(44) of the Securities
Exchange Act of 1934.
(d) Exemption From Reporting Requirements.--The Federal Home
Loan Banks shall be exempt from periodic reporting requirements
under the securities laws pertaining to the disclosure of--
(1) related party transactions that occur in the
ordinary course of the business of the Banks with
members; and
(2) the unregistered sales of equity securities.
(e) Tender Offers.--Commission rules relating to tender
offers shall not apply in connection with transactions in the
capital stock of the Federal Home Loan Banks.
(f) Regulations.--
(1) In general.--The Commission shall promulgate such
rules and regulations as may be necessary or
appropriate in the public interest or in furtherance of
this section and the exemptions provided in this
section.
(2) Considerations.--In issuing regulations under
this section, the Commission shall consider the
distinctive characteristics of the Federal Home Loan
Banks when evaluating--
(A) the accounting treatment with respect to
the payment to the Resolution Funding
Corporation;
(B) the role of the combined financial
statements of the Federal Home Loan Banks;
(C) the accounting classification of
redeemable capital stock; and
(D) the accounting treatment related to the
joint and several nature of the obligations of
the Banks.
(g) Definitions.--As used in this section--
(1) the terms ``Bank'', ``Federal Home Loan Bank'',
``member'', and ``Federal Home Loan Bank System'' have
the same meanings as in section 2 of the Federal Home
Loan Bank Act (12 U.S.C. 1422);
(2) the term ``Commission'' means the Securities and
Exchange Commission; and
(3) the term ``securities laws'' has the same meaning
as in section 3(a)(47) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)(47)).
SEC. 1209. VOLUNTARY MERGERS.
Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446)
is amended--
(1) by striking ``Whenever'' and inserting ``(a) In
General.--Whenever''; and
(2) by adding at the end the following:
``(b) Voluntary Mergers Authorized.--
``(1) In general.--Any Federal Home Loan Bank may,
with the approval of the Director and of the boards of
directors of the Banks involved, merge with another
Bank.
``(2) Regulations required.--The Director shall
promulgate regulations establishing the conditions and
procedures for the consideration and approval of any
voluntary merger described in paragraph (1), including
the procedures for Bank member approval.''.
SEC. 1210. AUTHORITY TO REDUCE DISTRICTS.
Section 3 of the Federal Home Loan Bank Act (12 U.S.C. 1423)
is amended--
(1) by striking ``As soon'' and inserting ``(a) In
General.--As soon''; and
(2) by adding at the end the following:
``(b) Authority To Reduce Districts.--Notwithstanding
subsection (a), the number of districts may be reduced to a
number less than 8--
``(1) pursuant to a voluntary merger between Banks,
as approved pursuant to section 26(b); or
``(2) pursuant to a decision by the Director to
liquidate a Bank pursuant to section 1367 of the
Federal Housing Enterprises Financial Safety and
Soundness Act of 1992.''.
SEC. 1211. COMMUNITY FINANCIAL INSTITUTION MEMBERS.
(a) Total Asset Requirement.--Paragraph (10) of section 2 of
the Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so
redesignated by section 201(3) of this Act, is amended by
striking ``$500,000,000'' each place such term appears and
inserting ``$1,000,000,000''.
(b) Use of Advances for Community Development Activities.--
Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C.
1430(a)) is amended--
(1) in paragraph (2)(B)--
(A) by striking ``and''; and
(B) by inserting ``, and community
development activities'' before the period at
the end;
(2) in paragraph (3)(E), by inserting ``or community
development activities'' after ``agriculture,''; and
(3) in paragraph (6)--
(A) by striking ``and''; and
(B) by inserting ``, and `community
development activities' '' before ``shall''.
SEC. 1212. PUBLIC USE DATABASE; REPORTS TO CONGRESS.
Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 1430)
is amended--
(1) in subsection (j)(12)--
(A) by striking subparagraph (C) and
inserting the following:
``(C) Reports.--The Director shall annually
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 collateral pledged to
the Banks, including an analysis of collateral
by type and by Bank district.''; and
(B) by adding at the end the following:
``(D) Submission to congress.--The Director
shall submit the reports under subparagraphs
(A) and (C) to the Committee on Banking,
Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the
House of Representatives, not later than 180
days after the date of enactment of the Federal
Housing Finance Regulatory Reform Act of
2008.''; and
(2) by adding at the end the following:
``(k) Public Use Database.--
``(1) Data.--Each Federal Home Loan Bank shall
provide to the Director, in a form determined by the
Director, census tract level data relating to mortgages
purchased, if any, including--
``(A) data consistent with that reported
under section 1323 of the Federal Housing
Enterprises Financial Safety and Soundness Act
of 1992;
``(B) data elements required to be reported
under the Home Mortgage Disclosure Act of 1975;
and
``(C) any other data elements that the
Director considers appropriate.
``(2) Public use database.--
``(A) In general.--The Director shall make
available to the public, in a form that is
useful to the public (including forms
accessible electronically), and to the extent
practicable, the data provided to the Director
under paragraph (1).
``(B) Proprietary information.--Not
withstanding subparagraph (A), the Director may
not provide public access to, or disclose to
the public, any information required to be
submitted under this subsection that the
Director determines is proprietary or that
would provide personally identifiable
information and that is not otherwise publicly
accessible through other forms, unless the
Director determines that it is in the public
interest to provide such information.''.
SEC. 1213. SEMIANNUAL REPORTS.
Section 21B of the Federal Home Loan Bank Act is amended in
subsection (f)(2)(C), by adding at the end the following:
``(v) Semiannual reports.--The
Director shall report semiannually 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
projected date for the completion of
contributions required by this
section.''.
SEC. 1214. LIQUIDATION OR REORGANIZATION OF A FEDERAL HOME LOAN BANK.
Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 1446)
is amended by adding at the end the following: ``At least 30
days prior to liquidating or reorganizing any Bank under this
section, the Director shall notify the Bank of its
determination and the facts and circumstances upon which such
determination is based. The Bank may contest that determination
in a hearing before the Director, in which all issues shall be
determined on the record pursuant to section 554 of title 5,
United States Code.''.
SEC. 1215. STUDY AND REPORT TO CONGRESS ON SECURITIZATION OF ACQUIRED
MEMBER ASSETS.
(a) Study.--The Director shall conduct a study on
securitization of home mortgage loans purchased or to be
purchased from member financial institutions under the Acquired
Member Assets programs. In conducting the study, the Director
shall establish a process for the formal submission of
comments.
(b) Elements.--The study shall encompass--
(1) the benefits and risks associated with
securitization of Acquired Member Assets;
(2) the potential impact of securitization upon
liquidity in the mortgage and broader credit markets;
(3) the ability of the Federal Home Loan Bank or
Banks in question to manage the risks associated with
such a program;
(4) the impact of such a program on the existing
activities of the Banks, including their mortgage
portfolios and advances; and
(5) the joint and several liability of the Banks and
the cooperative structure of the Federal Home Loan Bank
System.
(c) Consultations.--In conducting the study under this
section, the Director shall consult with the Federal Home Loan
Banks, the Banks' fiscal agent, representatives of the mortgage
lending industry, practitioners in the structured finance
field, and other experts as needed.
(d) Report.--Not later than 1 year after the date of
enactment of this Act, the Director shall submit a report to
Congress on the results of the study conducted under subsection
(a), including policy recommendations based on the analysis of
the Director of the feasibility of mortgage-backed securities
issuance by a Federal Home Loan Bank or Banks and the risks and
benefits associated with such program or programs.
(e) Definitions.--As used in this section, the terms
``member'', ``Bank'', and ``Federal Home Loan Bank'' have the
same meanings as in section 2 of the Federal Home Loan Bank Act
(12 U.S.C. 1422).
SEC. 1216. TECHNICAL AND CONFORMING AMENDMENTS.
(a) 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) by striking ``Federal Housing Finance Board'' and
inserting ``Federal Housing Finance Agency''; and
(2) by striking ``Federal Housing Finance Board's''
and inserting ``Federal Housing Finance Agency's''.
(b) 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
Board'' and inserting ``Federal Housing Finance Agency''.
(c) Title 18, United States Code.--Title 18, United States
Code, is amended by striking ``Federal Housing Finance Board''
each place such term appears in each of sections 212, 657,
1006, and 1014, and inserting ``Federal Housing Finance
Agency''.
(d) 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 striking ``Federal Housing
Finance Board'' and inserting ``Federal Housing Finance
Agency''.
(e) Title 44, United States Code.--Section 3502(5) of title
44, United States Code, is amended by striking ``Federal
Housing Finance Board'' and inserting ``Federal Housing Finance
Agency''.
(f) 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 ``Office of Federal Housing Enterprise
Oversight, the Federal Housing Finance Board'' and inserting
``Federal Housing Finance Agency''.
(g) FIRREA.--Section 1216 of the Financial Institutions
Reform, Recovery, and Enhancement Act of 1989 (12 U.S.C. 1833e)
is amended--
(1) in subsection (a), by striking paragraph (3) and
inserting the following:
``(3) the Federal Housing Finance Agency;'';
(2) in subsection (b), by striking ``Federal National
Mortgage Association'' and inserting ``Federal Home
Loan Banks, the Federal National Mortgage
Association,''; and
(3) in subsection (c), by striking ``Finance Board''
and inserting ``Finance Agency''.
SEC. 1217. STUDY ON FEDERAL HOME LOAN BANK ADVANCES.
(a) In General.--Not later than 1 year after the date of
enactment of this Act, the Director 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 or Representatives on the extent to which loans
and securities used as collateral to support Federal Home Loan
Bank advances are consistent with the interagency guidance on
nontraditional mortgage products.
(b) Required Content.--The study required under subsection
(a) shall--
(1) consider and recommend any additional
regulations, guidance, advisory bulletins, or other
administrative actions necessary to ensure that the
Federal Home Loan Banks are not supporting loans with
predatory characteristics; and
(2) include an opportunity for the public to comment
on any recommendations made under paragraph (1).
SEC. 1218. FEDERAL HOME LOAN BANK REFINANCING AUTHORITY FOR CERTAIN
RESIDENTIAL MORTGAGE LOANS.
Section 10(j)(2) of the Federal Home Loan Bank Act (12 U.S.C.
1430(j)(2)) is amended--
(1) in subparagraph (A), by striking ``or'' at the
end;
(2) in subparagraph (B), by striking the period at
the end and inserting ``; or''; and
(3) by adding at the end the following:
``(C) during the 2-year period beginning on
the date of enactment of this subparagraph, use
such percentage as the Director may by
regulation establish of any subsidized advances
set aside to finance homeownership under
subparagraph (A) to refinance loans that are
secured by a first mortgage on a primary
residence of any family having an income at or
below 80 percent of the median income for the
area.''.
TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND
THE FEDERAL HOUSING FINANCE BOARD
Subtitle A--OFHEO
SEC. 1301. ABOLISHMENT OF OFHEO.
(a) In General.--Effective at the end of the 1-year period
beginning on the date of enactment of this Act, the Office of
Federal Housing Enterprise Oversight of the Department of
Housing and Urban Development and the positions of the Director
and Deputy Director of such Office are abolished.
(b) Disposition of Affairs.--During the 1-year period
beginning on the date of enactment of this Act, the Director of
the Office of Federal Housing Enterprise Oversight, solely for
the purpose of winding up the affairs of the Office of Federal
Housing Enterprise Oversight--
(1) shall manage the employees of such Office and
provide for the payment of the compensation and
benefits of any such employee which accrue before the
effective date of the transfer of such employee under
section 1303; and
(2) may take any other action necessary for the
purpose of winding up the affairs of the Office.
(c) Status of Employees Before Transfer.--The amendments made
by title I and the abolishment of the Office of Federal Housing
Enterprise Oversight under subsection (a) of this section may
not be construed to affect the status of any employee of such
Office as an employee of an agency of the United States for
purposes of any other provision of law before the effective
date of the transfer of any such employee under section 1303.
(d) Use of Property and Services.--
(1) Property.--The Director may use the property of
the Office of Federal Housing Enterprise Oversight to
perform functions which have been transferred to the
Director for such time as is reasonable to facilitate
the orderly transfer of functions transferred under any
other provision of this Act or any amendment made by
this Act to any other provision of law.
(2) 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 Office of Federal Housing Enterprise
Oversight before the expiration of the period under
subsection (a) in connection with functions that are
transferred to the Director shall--
(A) continue to provide such services, on a
reimbursable basis, until the transfer of such
functions is complete; and
(B) consult with any such agency to
coordinate and facilitate a prompt and
reasonable transition.
(e) Continuation of Services.--The Director may use the
services of employees and other personnel of the Office of
Federal Housing Enterprise Oversight, on a reimbursable basis,
to perform functions which have been transferred to the
Director for such time as is reasonable to facilitate the
orderly transfer of functions pursuant to any other provision
of this Act or any amendment made by this Act to any other
provision of law.
(f) 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 Office of Federal Housing
Enterprise Oversight, or any other person, which--
(A) arises under--
(i) the Federal Housing Enterprises
Financial Safety and Soundness Act of
1992;
(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 such Office;
and
(B) existed on the day before the date of
abolishment under subsection (a).
(2) Continuation of suits.--No action or other
proceeding commenced by or against the Director of the
Office of Federal Housing Enterprise Oversight in
connection with functions that are transferred to the
Director of the Federal Housing Finance Agency shall
abate by reason of the enactment of this Act, except
that the Director of the Federal Housing Finance Agency
shall be substituted for the Director of the Office of
Federal Housing Enterprise Oversight as a party to any
such action or proceeding.
SEC. 1302. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.
(a) In General.--All regulations, orders, and determinations
described in subsection (b) shall remain in effect according to
the terms of such regulations, orders, and determinations, and
shall be enforceable by or against the Director or the
Secretary of Housing and Urban Development, as the case may be,
until modified, terminated, set aside, or superseded in
accordance with applicable law by the Director or the
Secretary, as the case may be, any court of competent
jurisdiction, or operation of law.
(b) Applicability.--A regulation, order, or determination is
described in this subsection if it--
(1) was issued, made, prescribed, or allowed to
become effective by--
(A) the Office of Federal Housing Enterprise
Oversight;
(B) the Secretary of Housing and Urban
Development, and relates to the authority of
the Secretary under--
(i) the Federal Housing Enterprises
Financial Safety and Soundness Act of
1992;
(ii) the Federal National Mortgage
Association Charter Act, with respect
to the Federal National Mortgage
Association; or
(iii) the Federal Home Loan Mortgage
Corporation Act, with respect to the
Federal Home Loan Mortgage Corporation;
or
(C) a court of competent jurisdiction, and
relates to functions transferred by this Act;
and
(2) is in effect on the effective date of the
abolishment under section 1301(a).
SEC. 1303. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.
(a) Transfer.--Each employee of the Office of Federal Housing
Enterprise Oversight shall be transferred to the Agency for
employment, not later than the effective date of the
abolishment under section 1301(a), and such transfer shall be
deemed a transfer of function for purposes of section 3503 of
title 5, United States Code.
(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 Director 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 position in the Senior
Executive Service (within the meaning of
section 3132(a)(7) of title 5, United States
Code).
(d) Reorganization.--If the Director determines, after the
end of the 1-year period beginning on the effective date of the
abolishment under section 1301(a), 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.
(e) Employee Benefit Programs.--
(1) In general.--Any employee of the Office of
Federal Housing Enterprise Oversight accepting
employment with the Agency 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
Office of Federal Housing Enterprise Oversight of the
Department of Housing and Urban Development, as
applicable, including insurance, to which such employee
belongs on the date of the abolishment under section
1301(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 Director of the Federal Housing Finance
Agency.
(2) Cost differential.--
(A) In general.--The difference in the costs
between the benefits which would have been
provided by the Office of Federal Housing
Enterprise Oversight and those provided by this
section shall be paid by the Director.
(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 Director, 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.
SEC. 1304. TRANSFER OF PROPERTY AND FACILITIES.
Upon the effective date of its abolishment under section
1301(a), all property of the Office of Federal Housing
Enterprise Oversight shall transfer to the Agency.
Subtitle B--Federal Housing Finance Board
SEC. 1311. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.
(a) In General.--Effective at the end of the 1-year period
beginning on the date of enactment of this Act, the Federal
Housing Finance Board (in this subtitle referred to as the
``Board'') is abolished.
(b) Disposition of Affairs.--During the 1-year period
beginning on the date of enactment of this Act, the Board,
solely for the purpose of winding up the affairs of the Board--
(1) shall manage the employees of the Board and
provide for the payment of the compensation and
benefits of any such employee which accrue before the
effective date of the transfer of such employee under
section 1313; and
(2) may take any other action necessary for the
purpose of winding up the affairs of the Board.
(c) Status of Employees Before Transfer.--The amendments made
by titles I and II and the abolishment of the Board under
subsection (a) may not be construed to affect the status of any
employee of the Board as an employee of an agency of the United
States for purposes of any other provision of law before the
effective date of the transfer of any such employee under
section 1313.
(d) Use of Property and Services.--
(1) Property.--The Director may use the property of
the Board to perform functions which have been
transferred to the Director, for such time as is
reasonable to facilitate the orderly transfer of
functions transferred under any other provision of this
Act or any amendment made by this Act to any other
provision of law.
(2) 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 Board before the expiration of the 1-
year period under subsection (a) in connection with
functions that are transferred to the Director shall--
(A) continue to provide such services, on a
reimbursable basis, until the transfer of such
functions is complete; and
(B) consult with any such agency to
coordinate and facilitate a prompt and
reasonable transition.
(e) Continuation of Services.--The Director may use the
services of employees and other personnel of the Board, on a
reimbursable basis, to perform functions which have been
transferred to the Director for such time as is reasonable to
facilitate the orderly transfer of functions pursuant to any
other provision of this Act or any amendment made by this Act
to any other provision of law.
(f) 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,
a member of the Board, or any other person, which--
(A) arises under the Federal Home Loan Bank
Act, or any other provision of law applicable
with respect to the Board; and
(B) existed on the day before the effective
date of the abolishment under subsection (a).
(2) Continuation of suits.--No action or other
proceeding commenced by or against the Board in
connection with functions that are transferred under
this Act to the Director shall abate by reason of the
enactment of this Act, except that the Director shall
be substituted for the Board or any member thereof as a
party to any such action or proceeding.
SEC. 1312. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS.
(a) In General.--All regulations, orders, determinations, and
resolutions described under subsection (b) shall remain in
effect according to the terms of such regulations, orders,
determinations, and resolutions, and shall be enforceable by or
against the Director until modified, terminated, set aside, or
superseded in accordance with applicable law by the Director,
any court of competent jurisdiction, or operation of law.
(b) Applicability.--A regulation, order, determination, or
resolution is described under this subsection if it--
(1) was issued, made, prescribed, or allowed to
become effective by--
(A) the Board; or
(B) a court of competent jurisdiction, and
relates to functions transferred by this Act;
and
(2) is in effect on the effective date of the
abolishment under section 1311(a).
SEC. 1313. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL HOUSING
FINANCE BOARD.
(a) Transfer.--Each employee of the Board shall be
transferred to the Agency for employment, not later than the
effective date of the abolishment under section 1311(a), and
such transfer shall be deemed a transfer of function for
purposes of section 3503 of title 5, United States Code.
(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 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, if the
employee is a temporary employee, separated in
accordance with the terms of the appointment of the
employee.
(c) Appointment Authority for Excepted Employees.--
(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).
(2) Decline of transfer.--The Director 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.
(d) Reorganization.--If the Director determines, after the
end of the 1-year period beginning on the effective date of the
abolishment under section 1311(a), 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.
(e) Employee Benefit Programs.--
(1) In general.--Any employee of the Board accepting
employment with the Agency 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
Board, as applicable, including insurance, to which
such employee belongs on the effective date of the
abolishment under section 1311(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 Director.
(2) Cost differential.--
(A) In general.--The difference in the costs
between the benefits which would have been
provided by the Board and those provided by
this section shall be paid by the Director.
(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 Director, 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.
SEC. 1314. TRANSFER OF PROPERTY AND FACILITIES.
Upon the effective date of the abolishment under section
1311(a), all property of the Board shall transfer to the
Agency.
TITLE IV--HOPE FOR HOMEOWNERS
SEC. 1401. SHORT TITLE.
This title may be cited as the ``HOPE for Homeowners Act of
2008''.
SEC. 1402. ESTABLISHMENT OF HOPE FOR HOMEOWNERS PROGRAM.
(a) Establishment.--Title II of the National Housing Act (12
U.S.C. 1707 et seq.) is amended by adding at the end the
following:
``SEC. 257. HOPE FOR HOMEOWNERS PROGRAM.
``(a) Establishment.--There is established in the Federal
Housing Administration a HOPE for Homeowners Program.
``(b) Purpose.--The purpose of the HOPE for Homeowners
Program is--
``(1) to create an FHA program, participation in
which is voluntary on the part of homeowners and
existing loan holders to insure refinanced loans for
distressed borrowers to support long-term, sustainable
homeownership;
``(2) to allow homeowners to avoid foreclosure by
reducing the principle balance outstanding, and
interest rate charged, on their mortgages;
``(3) to help stabilize and provide confidence in
mortgage markets by bringing transparency to the value
of assets based on mortgage assets;
``(4) to target mortgage assistance under this
section to homeowners for their principal residence;
``(5) to enhance the administrative capacity of the
FHA to carry out its expanded role under the HOPE for
Homeowners Program;
``(6) to ensure the HOPE for Homeowners Program
remains in effect only for as long as is necessary to
provide stability to the housing market; and
``(7) to provide servicers of delinquent mortgages
with additional methods and approaches to avoid
foreclosure.
``(c) Establishment and Implementation of Program
Requirements.--
``(1) Duties of the board.--In order to carry out the
purposes of the HOPE for Homeowners Program, the Board
shall--
``(A) establish requirements and standards
for the program; and
``(B) prescribe such regulations and provide
such guidance as may be necessary or
appropriate to implement such requirements and
standards.
``(2) Duties of the secretary.--In carrying out any
of the program requirements or standards established
under paragraph (1), the Secretary may issue such
interim guidance and mortgagee letters as the Secretary
determines necessary or appropriate.
``(d) Insurance of Mortgages.--The Secretary is authorized
upon application of a mortgagee to make commitments to insure
or to insure any eligible mortgage that has been refinanced in
a manner meeting the requirements under subsection (e).
``(e) Requirements of Insured Mortgages.--To be eligible for
insurance under this section, a refinanced eligible mortgage
shall comply with all of the following requirements:
``(1) Lack of capacity to pay existing mortgage.--
``(A) Borrower certification.--
``(i) In general.--The mortgagor
shall provide certification to the
Secretary that the mortgagor has not
intentionally defaulted on the mortgage
or any other debt, and has not
knowingly, or willfully and with actual
knowledge, furnished material
information known to be false for the
purpose of obtaining any eligible
mortgage.
``(ii) Penalties.--
``(I) False statement.--Any
certification filed pursuant to
clause (i) shall contain an
acknowledgment that any willful
false statement made in such
certification is punishable
under section 1001, of title
18, United States Code, by fine
or imprisonment of not more
than 5 years, or both.
``(II) Liability for
repayment.--The mortgagor shall
agree in writing that the
mortgagor shall be liable to
repay to the Federal Housing
Administration any direct
financial benefit achieved from
the reduction of indebtedness
on the existing mortgage or
mortgages on the residence
refinanced under this section
derived from misrepresentations
made in the certifications and
documentation required under
this subparagraph, subject to
the discretion of the
Secretary.
``(B) Current borrower debt-to-income
ratio.--As of March 1, 2008, the mortgagor
shall have had a ratio of mortgage debt to
income, taking into consideration all existing
mortgages of that mortgagor at such time,
greater than 31 percent (or such higher amount
as the Board determines appropriate).
``(2) Determination of principal obligation amount.--
The principal obligation amount of the refinanced
eligible mortgage to be insured shall--
``(A) be determined by the reasonable ability
of the mortgagor to make his or her mortgage
payments, as such ability is determined by the
Secretary pursuant to section 203(b)(4) or by
any other underwriting standards established by
the Board; and
``(B) not exceed 90 percent of the appraised
value of the property to which such mortgage
relates.
``(3) Required waiver of prepayment penalties and
fees.--All penalties for prepayment or refinancing of
the eligible mortgage, and all fees and penalties
related to default or delinquency on the eligible
mortgage, shall be waived or forgiven.
``(4) Extinguishment of subordinate liens.--
``(A) Required agreement.--All holders of
outstanding mortgage liens on the property to
which the eligible mortgage relates shall agree
to accept the proceeds of the insured loan as
payment in full of all indebtedness under the
eligible mortgage, and all encumbrances related
to such eligible mortgage shall be removed. The
Secretary may take such actions, subject to
standards established by the Board under
subparagraph (B), as may be necessary and
appropriate to facilitate coordination and
agreement between the holders of the existing
senior mortgage and any existing subordinate
mortgages, taking into consideration the
subordinate lien status of such subordinate
mortgages.
``(B) Shared appreciation.--
``(i) In general.--The Board shall
establish standards and policies that
will allow for the payment to the
holder of any existing subordinate
mortgage of a portion of any future
appreciation in the property secured by
such eligible mortgage that is owed to
the Secretary pursuant to subsection
(k).
``(ii) Factors.--In establishing the
standards and policies required under
clause (i), the Board shall take into
consideration--
``(I) the status of any
subordinate mortgage;
``(II) the outstanding
principal balance of and
accrued interest on the
existing senior mortgage and
any outstanding subordinate
mortgages;
``(III) the extent to which
the current appraised value of
the property securing a
subordinate mortgage is less
than the outstanding principal
balance and accrued interest on
any other liens that are senior
to such subordinate mortgage;
and
``(IV) such other factors as
the Board determines to be
appropriate.
``(C) Voluntary program.--This paragraph may
not be construed to require any holder of any
existing mortgage to participate in the program
under this section generally, or with respect
to any particular loan.
``(5) Term of mortgage.--The refinanced eligible
mortgage to be insured shall--
``(A) bear interest at a single rate that is
fixed for the entire term of the mortgage; and
``(B) have a maturity of not less than 30
years from the date of the beginning of
amortization of such refinanced eligible
mortgage.
``(6) Maximum loan amount.--The principal obligation
amount of the eligible mortgage to be insured shall not
exceed 132 percent of the dollar amount limitation in
effect for 2007 under section 305(a)(2) of the Federal
Home Loan Mortgage Corporation Act (12 U.S.C.
1454(a)(2)) for a property of the applicable size.
``(7) Prohibition on second liens.--A mortgagor may
not grant a new second lien on the mortgaged property
during the first 5 years of the term of the mortgage
insured under this section, except as the Board
determines to be necessary to ensure the maintenance of
property standards; and provided that such new
outstanding liens (A) do not reduce the value of the
Government's equity in the borrower's home; and (B)
when combined with the mortgagor's existing mortgage
indebtedness, do not exceed 95 percent of the home's
appraised value at the time of the new second lien.
``(8) Appraisals.--Any appraisal conducted in
connection with a mortgage insured under this section
shall--
``(A) be based on the current value of the
property;
``(B) be conducted in accordance with title
XI of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12
U.S.C. 3331 et seq.);
``(C) be completed by an appraiser who meets
the competency requirements of the Uniform
Standards of Professional Appraisal Practice;
``(D) be wholly consistent with the appraisal
standards, practices, and procedures under
section 202(e) of this Act that apply to all
loans insured under this Act; and
``(E) comply with the requirements of
subsection (g) of this section (relating to
appraisal independence).
``(9) Documentation and verification of income.--In
complying with the FHA underwriting requirements under
the HOPE for Homeowners Program under this section, the
mortgagee shall document and verify the income of the
mortgagor or non-filing status by procuring (A) an
income tax return transcript of the income tax returns
of the mortgagor, or(B) a copy of the income tax
returns from the Internal Revenue Service, for the two
most recent years for which the filing deadline for
such years has passed and by any other method, in
accordance with procedures and standards that the Board
shall establish.
``(10) Mortgage fraud.--The mortgagor shall not have
been convicted under Federal or State law for fraud
during the 10-year period ending upon the insurance of
the mortgage under this section.
``(11) Primary residence.--The mortgagor shall
provide documentation satisfactory in the determination
of the Secretary to prove that the residence covered by
the mortgage to be insured under this section is
occupied by the mortgagor as the primary residence of
the mortgagor, and that such residence is the only
residence in which the mortgagor has any present
ownership interest.
``(f) Study of Auction or Bulk Refinance Program.--
``(1) Study.--The Board shall conduct a study of the
need for and efficacy of an auction or bulk refinancing
mechanism to facilitate refinancing of existing
residential mortgages that are at risk for foreclosure
into mortgages insured under this section. The study
shall identify and examine various options for
mechanisms under which lenders and servicers of such
mortgages may make bids for forward commitments for
such insurance in an expedited manner.
``(2) Content.--
``(A) Analysis.--The study required under
paragraph (1) shall analyze--
``(i) the feasibility of establishing
a mechanism that would facilitate the
more rapid refinancing of borrowers at
risk of foreclosure into performing
mortgages insured under this section;
``(ii) whether such a mechanism would
provide an effective and efficient
mechanism to reduce foreclosures on
qualified existing mortgages;
``(iii) whether the use of an auction
or bulk refinance program is necessary
to stabilize the housing market and
reduce the impact of turmoil in that
market on the economy of the United
States;
``(iv) whether there are other
mechanisms or authority that would be
useful to reduce foreclosure; and
``(v) and any other factors that the
Board considers relevant.
``(B) Determinations.--To the extent that the
Board finds that a facility of the type
described in subparagraph (A) is feasible and
useful, the study shall--
``(i) determine and identify any
additional authority or resources
needed to establish and operate such a
mechanism;
``(ii) determine whether there is a
need for additional authority with
respect to the loan underwriting
criteria established in this section or
with respect to eligibility of
participating borrowers, lenders, or
holders of liens;
``(iii) determine whether such
underwriting criteria should be
established on the basis of individual
loans, in the aggregate, or otherwise
to facilitate the goal of refinancing
borrowers at risk of foreclosure into
viable loans insured under this
section.
``(3) Report.--Not later than the expiration of the
60-day period beginning on the date of the enactment of
this section, the Board shall submit a report regarding
the results of the study conducted under this
subsection to the Committee on Financial Services of
the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate. The
report shall include a detailed description of the
analysis required under paragraph (2)(A) and of the
determinations made pursuant to paragraph (2)(B), and
shall include any other findings and recommendations of
the Board pursuant to the study, including identifying
various options for mechanisms described in paragraph
(1).
``(g) Appraisal Independence.--
``(1) Prohibitions on interested parties in a real
estate transaction.--No mortgage lender, mortgage
broker, mortgage banker, real estate broker, appraisal
management company, employee of an appraisal management
company, nor any other person with an interest in a
real estate transaction involving an appraisal in
connection with a mortgage insured under this section
shall improperly influence, or attempt to improperly
influence, through coercion, extortion, collusion,
compensation, instruction, inducement, intimidation,
nonpayment for services rendered, or bribery, the
development, reporting, result, or review of a real
estate appraisal sought in connection with the
mortgage.
``(2) Civil monetary penalties.--The Secretary may
impose a civil money penalty for any knowing and
material violation of paragraph (1) under the same
terms and conditions as are authorized in section
536(a) of this Act.
``(h) Standards To Protect Against Adverse Selection.--
``(1) In general.--The Board shall, by rule or order,
establish standards and policies to require the
underwriter of the insured loan to provide such
representations and warranties as the Board considers
necessary or appropriate to enforce compliance with all
underwriting and appraisal standards of the HOPE for
Homeowners Program.
``(2) Exclusion for violations.--The Board shall
prohibit the Secretary from paying insurance benefits
to a mortgagee who violates the representations and
warranties, as established under paragraph (1), or in
any case in which a mortgagor fails to make the first
payment on a refinanced eligible mortgage.
``(3) Other authority.--The Board may establish such
other standards or policies as necessary to protect
against adverse selection, including requiring loans
identified by the Secretary as higher risk loans to
demonstrate payment performance for a reasonable period
of time prior to being insured under the program.
``(i) Premiums.--For each refinanced eligible mortgage
insured under this section, the Secretary shall establish and
collect--
``(1) at the time of insurance, a single premium
payment in an amount equal to 3 percent of the amount
of the original insured principal obligation of the
refinanced eligible mortgage, which shall be paid from
the proceeds of the mortgage being insured under this
section, through the reduction of the amount of
indebtedness that existed on the eligible mortgage
prior to refinancing; and
``(2) in addition to the premium required under
paragraph (1), an annual premium in an amount equal to
1.5 percent of the amount of the remaining insured
principal balance of the mortgage.
``(j) Origination Fees and Interest Rate.--The Board shall
establish--
``(1) a reasonable limitation on origination fees for
refinanced eligible mortgages insured under this
section; and
``(2) procedures to ensure that interest rates on
such mortgages shall be commensurate with market rate
interest rates on such types of loans.
``(k) Equity and Appreciation.--
``(1) Five-year phase-in for equity as a result of
sale or refinancing.--For each eligible mortgage
insured under this section, the Secretary and the
mortgagor of such mortgage shall, upon any sale or
disposition of the property to which such mortgage
relates, or upon the subsequent refinancing of such
mortgage, be entitled to the following with respect to
any equity created as a direct result of such sale or
refinancing:
``(A) If such sale or refinancing occurs
during the period that begins on the date that
such mortgage is insured and ends 1 year after
such date of insurance, the Secretary shall be
entitled to 100 percent of such equity.
``(B) If such sale or refinancing occurs
during the period that begins 1 year after such
date of insurance and ends 2 years after such
date of insurance, the Secretary shall be
entitled to 90 percent of such equity and the
mortgagor shall be entitled to 10 percent of
such equity.
``(C) If such sale or refinancing occurs
during the period that begins 2 years after
such date of insurance and ends 3 years after
such date of insurance, the Secretary shall be
entitled to 80 percent of such equity and the
mortgagor shall be entitled to 20 percent of
such equity.
``(D) If such sale or refinancing occurs
during the period that begins 3 years after
such date of insurance and ends 4 years after
such date of insurance, the Secretary shall be
entitled to 70 percent of such equity and the
mortgagor shall be entitled to 30 percent of
such equity.
``(E) If such sale or refinancing occurs
during the period that begins 4 years after
such date of insurance and ends 5 years after
such date of insurance, the Secretary shall be
entitled to 60 percent of such equity and the
mortgagor shall be entitled to 40 percent of
such equity.
``(F) If such sale or refinancing occurs
during any period that begins 5 years after
such date of insurance, the Secretary shall be
entitled to 50 percent of such equity and the
mortgagor shall be entitled to 50 percent of
such equity.
``(2) Appreciation in value.--For each eligible
mortgage insured under this section, the Secretary and
the mortgagor of such mortgage shall, upon any sale or
disposition of the property to which such mortgage
relates, each be entitled to 50 percent of any
appreciation in value of the appraised value of such
property that has occurred since the date that such
mortgage was insured under this section.
``(l) Establishment of HOPE Fund.--
``(1) In general.--There is established in the
Federal Housing Administration a revolving fund to be
known as the Home Ownership Preservation Entity Fund,
which shall be used by the Board for carrying out the
mortgage insurance obligations under this section.
``(2) Management of fund.--The HOPE Fund shall be
administered and managed by the Secretary, who shall
establish reasonable and prudent criteria for the
management and operation of any amounts in the HOPE
Fund.
``(m) Limitation on Aggregate Insurance Authority.--The
aggregate original principal obligation of all mortgages
insured under this section may not exceed $300,000,000,000.
``(n) Reports by the Board.--The Board shall submit monthly
reports to the Congress identifying the progress of the HOPE
for Homeowners Program, which shall contain the following
information for each month:
``(1) The number of new mortgages insured under this
section, including the location of the properties
subject to such mortgages by census tract.
``(2) The aggregate principal obligation of new
mortgages insured under this section.
``(3) The average amount by which the principle
balance outstanding on mortgages insured this section
was reduced.
``(4) The amount of premiums collected for insurance
of mortgages under this section.
``(5) The claim and loss rates for mortgages insured
under this section.
``(6) Any other information that the Board considers
appropriate.
``(o) Required Outreach Efforts.--The Secretary shall carry
out outreach efforts to ensure that homeowners, lenders, and
the general public are aware of the opportunities for
assistance available under this section.
``(p) Enhancement of FHA Capacity.--Under the direction of
the Board, the Secretary shall take such actions as may be
necessary to--
``(1) contract for the establishment of underwriting
criteria, automated underwriting systems, pricing
standards, and other factors relating to eligibility
for mortgages insured under this section;
``(2) contract for independent quality reviews of
underwriting, including appraisal reviews and fraud
detection, of mortgages insured under this section or
pools of such mortgages; and
``(3) increase personnel of the Department as
necessary to process or monitor the processing of
mortgages insured under this section.
``(q) GNMA Commitment Authority.--
``(1) Guarantees.--The Secretary shall take such
actions as may be necessary to ensure that securities
based on and backed by a trust or pool composed of
mortgages insured under this section are available to
be guaranteed by the Government National Mortgage
Association as to the timely payment of principal and
interest.
``(2) Guarantee authority.--To carry out the purposes
of section 306 of the National Housing Act (12 U.S.C.
1721), the Government National Mortgage Association may
enter into new commitments to issue guarantees of
securities based on or backed by mortgages insured
under this section, not exceeding $300,000,000,000. The
amount of authority provided under the preceding
sentence to enter into new commitments to issue
guarantees is in addition to any amount of authority to
make new commitments to issue guarantees that is
provided to the Association under any other provision
of law.
``(r) Sunset.--The Secretary may not enter into any new
commitment to insure any refinanced eligible mortgage, or newly
insure any refinanced eligible mortgage pursuant to this
section before October 1, 2008 or after September 30, 2011.
``(s) Definitions.--For purposes of this section, the
following definitions shall apply:
``(1) Approved financial institution or mortgagee.--
The term `approved financial institution or mortgagee'
means a financial institution or mortgagee approved by
the Secretary under section 203 as responsible and able
to service mortgages responsibly.
``(2) Board.--The term `Board' means the Board of
Directors of the HOPE for Homeowners Program. The Board
shall be composed of the Secretary, the Secretary of
the Treasury, the Chairperson of the Board of Governors
of the Federal Reserve System, and the Chairperson of
the Board of Directors of the Federal Deposit Insurance
Corporation, or their designees.
``(3) Eligible mortgage.--The term `eligible
mortgage' means a mortgage--
``(A) the mortgagor of which--
``(i) occupies such property as his
or her principal residence; and
``(ii) cannot, subject to subsection
(e)(1)(B) and such other standards
established by the Board, afford his or
her mortgage payments; and
``(B) originated on or before January 1,
2008.
``(4) Existing senior mortgage.--The term `existing
senior mortgage' means, with respect to a mortgage
insured under this section, the existing mortgage that
has superior priority.
``(5) Existing subordinate mortgage.--The term
`existing subordinate mortgage' means, with respect to
a mortgage insured under this section, an existing
mortgage that has subordinate priority to the existing
senior mortgage.
``(6) HOPE for homeowners program.--The term `HOPE
for Homeowners Program' means the program established
under this section.
``(7) Secretary.--The term `Secretary' means the
Secretary of Housing and Urban Development, except
where specifically provided otherwise.
``(t) Requirements Related to the Board.--
``(1) Compensation, actual, necessary, and
transportation expenses.--
``(A) Federal employees.--A member of the
Board who is an officer or employee of the
Federal Government shall serve without
additional pay (or benefits in the nature of
compensation) for service as a member of the
Board.
``(B) Travel expenses.--Members of the Board
shall be entitled to receive travel expenses,
including per diem in lieu of subsistence,
equivalent to those set forth in subchapter I
of chapter 57 of title 5, United States Code.
``(2) Bylaws.--The Board may prescribe, amend, and
repeal such bylaws as may be necessary for carrying out
the functions of the Board.
``(3) Quorum.--A majority of the Board shall
constitute a quorum.
``(4) Staff; experts and consultants.--
``(A) Detail of government employees.--Upon
request of the Board, any Federal Government
employee may be detailed to the Board without
reimbursement, and such detail shall be without
interruption or loss of civil service status or
privilege.
``(B) Experts and consultants.--The Board
shall procure the services of experts and
consultants as the Board considers appropriate.
``(u) Rule of Construction Related to Voluntary Nature of the
Program.--This section shall not be construed to require that
any approved financial institution or mortgagee participate in
any activity authorized under this section, including any
activity related to the refinancing of an eligible mortgage.
``(v) Rule of Construction Related to Insurance of
Mortgages.--Except as otherwise provided for in this section or
by action of the Board, the provisions and requirements of
section 203(b) shall apply with respect to the insurance of any
eligible mortgage under this section.
``(w) HOPE Bonds.--
``(1) Issuance and repayment of bonds.--
Notwithstanding section 504(b) of the Federal Credit
Reform Act of 1990 (2 U.S.C. 661d(b)), the Secretary of
the Treasury shall--
``(A) subject to such terms and conditions as
the Secretary of the Treasury deems necessary,
issue Federal credit instruments, to be known
as `HOPE Bonds', that are callable at the
discretion of the Secretary of the Treasury and
do not, in the aggregate, exceed the amount
specified in subsection (m);
``(B) provide the subsidy amounts necessary
for loan guarantees under the HOPE for
Homeowners Program, not to exceed the amount
specified in subsection (m), in accordance with
the provisions of the Federal Credit Reform Act
of 1990 (2 U.S.C. 661 et seq.), except as
provided in this paragraph; and
``(C) use the proceeds from HOPE Bonds only
to pay for the net costs to the Federal
Government of the HOPE for Homeowners Program,
including administrative costs.
``(2) Reimbursements to treasury.--Funds received
pursuant to section 1338(b) of the Federal Housing
Enterprises Regulatory Reform Act of 1992 shall be used
to reimburse the Secretary of the Treasury for amounts
borrowed under paragraph (1).
``(3) Use of reserve fund.--If the net cost to the
Federal Government for the HOPE for Homeowners Program
exceeds the amount of funds received under paragraph
(2), remaining debts of the HOPE for Homeowners Program
shall be paid from amounts deposited into the fund
established by the Secretary under section 1337(e) of
the Federal Housing Enterprises Financial Safety and
Soundness Act of 1992, remaining amounts in such fund
to be used to reduce the National debt.
``(4) Reduction of national debt.--Amounts collected
under the HOPE for Homeowners Program in accordance
with subsections (i) and (k) in excess of the net cost
to the Federal Government for such Program shall be
used to reduce the National debt.''.
SEC. 1403. FIDUCIARY DUTY OF SERVICERS OF POOLED RESIDENTIAL MORTGAGE
LOANS.
The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended
by inserting after section 129 the following new section:
``SEC. 129A. FIDUCIARY DUTY OF SERVICERS OF POOLED RESIDENTIAL
MORTGAGES.
``(a) In General.--Except as may be established in any
investment contract between a servicer of pooled residential
mortgages and an investor, a servicer of pooled residential
mortgages--
``(1) owes any duty to maximize the net present value
of the pooled mortgages in an investment to all
investors and parties having a direct or indirect
interest in such investment, not to any individual
party or group of parties; and
``(2) shall be deemed to act in the best interests of
all such investors and parties if the servicer agrees
to or implements a modification or workout plan,
including any modification or refinancing undertaken
pursuant to the HOPE for Homeowners Act of 2008, for a
residential mortgage or a class of residential
mortgages that constitute a part or all of the pooled
mortgages in such investment, provided that any
mortgage so modified meets the following criteria:
``(A) Default on the payment of such mortgage
has occurred or is reasonably foreseeable.
``(B) The property securing such mortgage is
occupied by the mortgagor of such mortgage.
``(C) The anticipated recovery on the
principal outstanding obligation of the
mortgage under the modification or workout plan
exceeds, on a net present value basis, the
anticipated recovery on the principal
outstanding obligation of the mortgage through
foreclosure.
``(b) Definition.--As used in this section, the term
`servicer' means the person responsible for servicing of a loan
(including the person who makes or holds a loan if such person
also services the loan).''.
SEC. 1404. REVISED STANDARDS FOR FHA APPRAISERS.
Section 202(e) of the National Housing Act (12 U.S.C.
1708(e)) is amended by adding at the end the following:
``(5) Additional appraiser standards.--Beginning on
the date of enactment of the Federal Housing Finance
Regulatory Reform Act of 2008, any appraiser chosen or
approved to conduct appraisals for mortgages under this
title shall--
``(A) be certified--
``(i) by the State in which the
property to be appraised is located; or
``(ii) by a nationally recognized
professional appraisal organization;
and
``(B) have demonstrated verifiable education
in the appraisal requirements established by
the Federal Housing Administration under this
subsection.''.
TITLE V--S.A.F.E. MORTGAGE LICENSING ACT
SEC. 1501. SHORT TITLE.
This title may be cited as the ``Secure and Fair Enforcement
for Mortgage Licensing Act of 2008'' or ``S.A.F.E. Mortgage
Licensing Act of 2008''.
SEC. 1502. PURPOSES AND METHODS FOR ESTABLISHING A MORTGAGE LICENSING
SYSTEM AND REGISTRY.
In order to increase uniformity, reduce regulatory burden,
enhance consumer protection, and reduce fraud, the States,
through the Conference of State Bank Supervisors and the
American Association of Residential Mortgage Regulators, are
hereby encouraged to establish a Nationwide Mortgage Licensing
System and Registry for the residential mortgage industry that
accomplishes all of the following objectives:
(1) Provides uniform license applications and
reporting requirements for State-licensed loan
originators.
(2) Provides a comprehensive licensing and
supervisory database.
(3) Aggregates and improves the flow of information
to and between regulators.
(4) Provides increased accountability and tracking of
loan originators.
(5) Streamlines the licensing process and reduces the
regulatory burden.
(6) Enhances consumer protections and supports anti-
fraud measures.
(7) Provides consumers with easily accessible
information, offered at no charge, utilizing electronic
media, including the Internet, regarding the employment
history of, and publicly adjudicated disciplinary and
enforcement actions against, loan originators.
(8) Establishes a means by which residential mortgage
loan originators would, to the greatest extent
possible, be required to act in the best interests of
the consumer.
(9) Facilitates responsible behavior in the subprime
mortgage market place and provides comprehensive
training and examination requirements related to
subprime mortgage lending.
(10) Facilitates the collection and disbursement of
consumer complaints on behalf of State and Federal
mortgage regulators.
SEC. 1503. DEFINITIONS.
For purposes of this title, the following definitions shall
apply:
(1) Federal banking agencies.--The term ``Federal
banking agencies'' means the Board of Governors of the
Federal Reserve System, the Comptroller of the
Currency, the Director of the Office of Thrift
Supervision, the National Credit Union Administration,
and the Federal Deposit Insurance Corporation.
(2) Depository institution.--The term ``depository
institution'' has the same meaning as in section 3 of
the Federal Deposit Insurance Act, and includes any
credit union.
(3) Loan originator.--
(A) In general.--The term ``loan
originator''--
(i) means an individual who--
(I) takes a residential
mortgage loan application; and
(II) offers or negotiates
terms of a residential mortgage
loan for compensation or gain;
(ii) does not include any individual
who is not otherwise described in
clause (i) and who performs purely
administrative or clerical tasks on
behalf of a person who is described in
any such clause;
(iii) does not include a person or
entity that only performs real estate
brokerage activities and is licensed or
registered in accordance with
applicable State law, unless the person
or entity is compensated by a lender, a
mortgage broker, or other loan
originator or by any agent of such
lender, mortgage broker, or other loan
originator; and
(iv) does not include a person or
entity solely involved in extensions of
credit relating to timeshare plans, as
that term is defined in section
101(53D) of title 11, United States
Code.
(B) Other definitions relating to loan
originator.--For purposes of this subsection,
an individual ``assists a consumer in obtaining
or applying to obtain a residential mortgage
loan'' by, among other things, advising on loan
terms (including rates, fees, other costs),
preparing loan packages, or collecting
information on behalf of the consumer with
regard to a residential mortgage loan.
(C) Administrative or clerical tasks.--The
term ``administrative or clerical tasks'' means
the receipt, collection, and distribution of
information common for the processing or
underwriting of a loan in the mortgage industry
and communication with a consumer to obtain
information necessary for the processing or
underwriting of a residential mortgage loan.
(D) Real estate brokerage activity defined.--
The term ``real estate brokerage activity''
means any activity that involves offering or
providing real estate brokerage services to the
public, including--
(i) acting as a real estate agent or
real estate broker for a buyer, seller,
lessor, or lessee of real property;
(ii) bringing together parties
interested in the sale, purchase,
lease, rental, or exchange of real
property;
(iii) negotiating, on behalf of any
party, any portion of a contract
relating to the sale, purchase, lease,
rental, or exchange of real property
(other than in connection with
providing financing with respect to any
such transaction);
(iv) engaging in any activity for
which a person engaged in the activity
is required to be registered or
licensed as a real estate agent or real
estate broker under any applicable law;
and
(v) offering to engage in any
activity, or act in any capacity,
described in clause (i), (ii), (iii),
or (iv).
(4) Loan processor or underwriter.--
(A) In general.--The term ``loan processor or
underwriter'' means an individual who performs
clerical or support duties at the direction of
and subject to the supervision and instruction
of--
(i) a State-licensed loan originator;
or
(ii) a registered loan originator.
(B) Clerical or support duties.--For purposes
of subparagraph (A), the term ``clerical or
support duties'' may include--
(i) the receipt, collection,
distribution, and analysis of
information common for the processing
or underwriting of a residential
mortgage loan; and
(ii) communicating with a consumer to
obtain the information necessary for
the processing or underwriting of a
loan, to the extent that such
communication does not include offering
or negotiating loan rates or terms, or
counseling consumers about residential
mortgage loan rates or terms.
(5) Nationwide mortgage licensing system and
registry.--The term ``Nationwide Mortgage Licensing
System and Registry'' means a mortgage licensing system
developed and maintained by the Conference of State
Bank Supervisors and the American Association of
Residential Mortgage Regulators for the State licensing
and registration of State-licensed loan originators and
the registration of registered loan originators or any
system established by the Secretary under section 1509.
(6) Nontraditional mortgage product.--The term
``nontraditional mortgage product'' means any mortgage
product other than a 30-year fixed rate mortgage.
(7) Registered loan originator.--The term
``registered loan originator'' means any individual
who--
(A) meets the definition of loan originator
and is an employee of--
(i) a depository institution;
(ii) a subsidiary that is--
(I) owned and controlled by a
depository institution; and
(II) regulated by a Federal
banking agency; or
(iii) an institution regulated by the
Farm Credit Administration; and
(B) is registered with, and maintains a
unique identifier through, the Nationwide
Mortgage Licensing System and Registry.
(8) Residential mortgage loan.--The term
``residential mortgage loan'' means any loan primarily
for personal, family, or household use that is secured
by a mortgage, deed of trust, or other equivalent
consensual security interest on a dwelling (as defined
in section 103(v) of the Truth in Lending Act) or
residential real estate upon which is constructed or
intended to be constructed a dwelling (as so defined).
(9) Secretary.--The term ``Secretary'' means the
Secretary of Housing and Urban Development.
(10) State.--The term ``State'' means any State of
the United States, the District of Columbia, any
territory of the United States, Puerto Rico, Guam,
American Samoa, the Trust Territory of the Pacific
Islands, the Virgin Islands, and the Northern Mariana
Islands.
(11) State-licensed loan originator.--The term
``State-licensed loan originator'' means any individual
who--
(A) is a loan originator;
(B) is not an employee of--
(i) a depository institution;
(ii) a subsidiary that is--
(I) owned and controlled by a
depository institution; and
(II) regulated by a Federal
banking agency; or
(iii) an institution regulated by the
Farm Credit Administration; and
(C) is licensed by a State or by the
Secretary under section 1508 and registered as
a loan originator with, and maintains a unique
identifier through, the Nationwide Mortgage
Licensing System and Registry.
(12) Unique identifier.--
(A) In general.--The term ``unique
identifier'' means a number or other identifier
that--
(i) permanently identifies a loan
originator;
(ii) is assigned by protocols
established by the Nationwide Mortgage
Licensing System and Registry and the
Federal banking agencies to facilitate
electronic tracking of loan originators
and uniform identification of, and
public access to, the employment
history of and the publicly adjudicated
disciplinary and enforcement actions
against loan originators; and
(iii) shall not be used for purposes
other than those set forth under this
title.
(B) Responsibility of states.--To the
greatest extent possible and to accomplish the
purpose of this title, States shall use unique
identifiers in lieu of social security numbers.
SEC. 1504. LICENSE OR REGISTRATION REQUIRED.
(a) In General.--Subject to the existence of a licensing or
registration regime, as the case may be, an individual may not
engage in the business of a loan originator without first--
(1) obtaining, and maintaining annually--
(A) a registration as a registered loan
originator; or
(B) a license and registration as a State-
licensed loan originator; and
(2) obtaining a unique identifier.
(b) Loan Processors and Underwriters.--
(1) Supervised loan processors and underwriters.--A
loan processor or underwriter who does not represent to
the public, through advertising or other means of
communicating or providing information (including the
use of business cards, stationery, brochures, signs,
rate lists, or other promotional items), that such
individual can or will perform any of the activities of
a loan originator shall not be required to be a State-
licensed loan originator.
(2) Independent contractors.--An independent
contractor may not engage in residential mortgage loan
origination activities as a loan processor or
underwriter unless such independent contractor is a
State-licensed loan originator.
SEC. 1505. STATE LICENSE AND REGISTRATION APPLICATION AND ISSUANCE.
(a) Background Checks.--In connection with an application to
any State for licensing and registration as a State-licensed
loan originator, the applicant shall, at a minimum, furnish to
the Nationwide Mortgage Licensing System and Registry
information concerning the applicant's identity, including--
(1) fingerprints for submission to the Federal Bureau
of Investigation, and any governmental agency or entity
authorized to receive such information for a State and
national criminal history background check; and
(2) personal history and experience, including
authorization for the System to obtain--
(A) an independent credit report obtained
from a consumer reporting agency described in
section 603(p) of the Fair Credit Reporting
Act; and
(B) information related to any
administrative, civil or criminal findings by
any governmental jurisdiction.
(b) Issuance of License.--The minimum standards for licensing
and registration as a State-licensed loan originator shall
include the following:
(1) The applicant has never had a loan originator
license revoked in any governmental jurisdiction.
(2) The applicant has not been convicted of, or pled
guilty or nolo contendere to, a felony in a domestic,
foreign, or military court--
(A) during the 7-year period preceding the
date of the application for licensing and
registration; or
(B) at any time preceding such date of
application, if such felony involved an act of
fraud, dishonesty, or a breach of trust, or
money laundering.
(3) The applicant has demonstrated financial
responsibility, character, and general fitness such as
to command the confidence of the community and to
warrant a determination that the loan originator will
operate honestly, fairly, and efficiently within the
purposes of this title.
(4) The applicant has completed the pre-licensing
education requirement described in subsection (c).
(5) The applicant has passed a written test that
meets the test requirement described in subsection (d).
(6) The applicant has met either a net worth or
surety bond requirement, or paid into a State fund, as
required by the State pursuant to section 1508(d)(6).
(c) Pre-Licensing Education of Loan Originators.--
(1) Minimum educational requirements.--In order to
meet the pre-licensing education requirement referred
to in subsection (b)(4), a person shall complete at
least 20 hours of education approved in accordance with
paragraph (2), which shall include at least--
(A) 3 hours of Federal law and regulations;
(B) 3 hours of ethics, which shall include
instruction on fraud, consumer protection, and
fair lending issues; and
(C) 2 hours of training related to lending
standards for the nontraditional mortgage
product marketplace.
(2) Approved educational courses.--For purposes of
paragraph (1), pre-licensing education courses shall be
reviewed, and approved by the Nationwide Mortgage
Licensing System and Registry.
(3) Limitation and standards.--
(A) Limitation.--To maintain the independence
of the approval process, the Nationwide
Mortgage Licensing System and Registry shall
not directly or indirectly offer pre-licensure
educational courses for loan originators.
(B) Standards.--In approving courses under
this section, the Nationwide Mortgage Licensing
System and Registry shall apply reasonable
standards in the review and approval of
courses.
(d) Testing of Loan Originators.--
(1) In general.--In order to meet the written test
requirement referred to in subsection (b)(5), an
individual shall pass, in accordance with the standards
established under this subsection, a qualified written
test developed by the Nationwide Mortgage Licensing
System and Registry and administered by an approved
test provider.
(2) Qualified test.--A written test shall not be
treated as a qualified written test for purposes of
paragraph (1) unless the test adequately measures the
applicant's knowledge and comprehension in appropriate
subject areas, including--
(A) ethics;
(B) Federal law and regulation pertaining to
mortgage origination;
(C) State law and regulation pertaining to
mortgage origination;
(D) Federal and State law and regulation,
including instruction on fraud, consumer
protection, the nontraditional mortgage
marketplace, and fair lending issues.
(3) Minimum competence.--
(A) Passing score.--An individual shall not
be considered to have passed a qualified
written test unless the individual achieves a
test score of not less than 75 percent correct
answers to questions.
(B) Initial retests.--An individual may
retake a test 3 consecutive times with each
consecutive taking occurring at least 30 days
after the preceding test.
(C) Subsequent retests.--After failing 3
consecutive tests, an individual shall wait at
least 6 months before taking the test again.
(D) Retest after lapse of license.--A State-
licensed loan originator who fails to maintain
a valid license for a period of 5 years or
longer shall retake the test, not taking into
account any time during which such individual
is a registered loan originator.
(e) Mortgage Call Reports.--Each mortgage licensee shall
submit to the Nationwide Mortgage Licensing System and Registry
reports of condition, which shall be in such form and shall
contain such information as the Nationwide Mortgage Licensing
System and Registry may require.
SEC. 1506. STANDARDS FOR STATE LICENSE RENEWAL.
(a) In General.--The minimum standards for license renewal
for State-licensed loan originators shall include the
following:
(1) The loan originator continues to meet the minimum
standards for license issuance.
(2) The loan originator has satisfied the annual
continuing education requirements described in
subsection (b).
(b) Continuing Education for State-Licensed Loan
Originators.--
(1) In general.--In order to meet the annual
continuing education requirements referred to in
subsection (a)(2), a State-licensed loan originator
shall complete at least 8 hours of education approved
in accordance with paragraph (2), which shall include
at least--
(A) 3 hours of Federal law and regulations;
(B) 2 hours of ethics, which shall include
instruction on fraud, consumer protection, and
fair lending issues; and
(C) 2 hours of training related to lending
standards for the nontraditional mortgage
product marketplace.
(2) Approved educational courses.--For purposes of
paragraph (1), continuing education courses shall be
reviewed, and approved by the Nationwide Mortgage
Licensing System and Registry.
(3) Calculation of continuing education credits.--A
State-licensed loan originator--
(A) may only receive credit for a continuing
education course in the year in which the
course is taken; and
(B) may not take the same approved course in
the same or successive years to meet the annual
requirements for continuing education.
(4) Instructor credit.--A State-licensed loan
originator who is approved as an instructor of an
approved continuing education course may receive credit
for the originator's own annual continuing education
requirement at the rate of 2 hours credit for every 1
hour taught.
(5) Limitation and standards.--
(A) Limitation.--To maintain the independence
of the approval process, the Nationwide
Mortgage Licensing System and Registry shall
not directly or indirectly offer any continuing
education courses for loan originators.
(B) Standards.--In approving courses under
this section, the Nationwide Mortgage Licensing
System and Registry shall apply reasonable
standards in the review and approval of
courses.
SEC. 1507. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL AGENCIES.
(a) Development.--
(1) In general.--The Federal banking agencies shall
jointly, through the Federal Financial Institutions
Examination Council, and together with the Farm Credit
Administration, develop and maintain a system for
registering employees of a depository institution,
employees of a subsidiary that is owned and controlled
by a depository institution and regulated by a Federal
banking agency, or employees of an institution
regulated by the Farm Credit Administration, as
registered loan originators with the Nationwide
Mortgage Licensing System and Registry. The system
shall be implemented before the end of the 1-year
period beginning on the date of enactment of this
title.
(2) Registration requirements.--In connection with
the registration of any loan originator under this
subsection, the appropriate Federal banking agency and
the Farm Credit Administration shall, at a minimum,
furnish or cause to be furnished to the Nationwide
Mortgage Licensing System and Registry information
concerning the employees's identity, including--
(A) fingerprints for submission to the
Federal Bureau of Investigation, and any
governmental agency or entity authorized to
receive such information for a State and
national criminal history background check; and
(B) personal history and experience,
including authorization for the Nationwide
Mortgage Licensing System and Registry to
obtain information related to any
administrative, civil or criminal findings by
any governmental jurisdiction.
(b) Coordination.--
(1) Unique identifier.--The Federal banking agencies,
through the Financial Institutions Examination Council,
and the Farm Credit Administration shall coordinate
with the Nationwide Mortgage Licensing System and
Registry to establish protocols for assigning a unique
identifier to each registered loan originator that will
facilitate electronic tracking and uniform
identification of, and public access to, the employment
history of and publicly adjudicated disciplinary and
enforcement actions against loan originators.
(2) Nationwide mortgage licensing system and registry
development.--To facilitate the transfer of information
required by subsection (a)(2), the Nationwide Mortgage
Licensing System and Registry shall coordinate with the
Federal banking agencies, through the Financial
Institutions Examination Council, and the Farm Credit
Administration concerning the development and
operation, by such System and Registry, of the
registration functionality and data requirements for
loan originators.
(c) Consideration of Factors and Procedures.--In establishing
the registration procedures under subsection (a) and the
protocols for assigning a unique identifier to a registered
loan originator, the Federal banking agencies shall make such
de minimis exceptions as may be appropriate to paragraphs
(1)(A) and (2) of section 1504(a), shall make reasonable
efforts to utilize existing information to minimize the burden
of registering loan originators, and shall consider methods for
automating the process to the greatest extent practicable
consistent with the purposes of this title.
SEC. 1508. SECRETARY OF HOUSING AND URBAN DEVELOPMENT BACKUP AUTHORITY
TO ESTABLISH A LOAN ORIGINATOR LICENSING SYSTEM.
(a) Backup Licensing System.--If, by the end of the 1-year
period, or the 2-year period in the case of a State whose
legislature meets only biennially, beginning on the date of the
enactment of this title or at any time thereafter, the
Secretary determines that a State does not have in place by law
or regulation a system for licensing and registering loan
originators that meets the requirements of sections 1505 and
1506 and subsection (d) of this section, or does not
participate in the Nationwide Mortgage Licensing System and
Registry, the Secretary shall provide for the establishment and
maintenance of a system for the licensing and registration by
the Secretary of loan originators operating in such State as
State-licensed loan originators.
(b) Licensing and Registration Requirements.--The system
established by the Secretary under subsection (a) for any State
shall meet the requirements of sections 1505 and 1506 for
State-licensed loan originators.
(c) Unique Identifier.--The Secretary shall coordinate with
the Nationwide Mortgage Licensing System and Registry to
establish protocols for assigning a unique identifier to each
loan originator licensed by the Secretary as a State-licensed
loan originator that will facilitate electronic tracking and
uniform identification of, and public access to, the employment
history of and the publicly adjudicated disciplinary and
enforcement actions against loan originators.
(d) State Licensing Law Requirements.--For purposes of this
section, the law in effect in a State meets the requirements of
this subsection if the Secretary determines the law satisfies
the following minimum requirements:
(1) A State loan originator supervisory authority is
maintained to provide effective supervision and
enforcement of such law, including the suspension,
termination, or nonrenewal of a license for a violation
of State or Federal law.
(2) The State loan originator supervisory authority
ensures that all State-licensed loan originators
operating in the State are registered with Nationwide
Mortgage Licensing System and Registry.
(3) The State loan originator supervisory authority
is required to regularly report violations of such law,
as well as enforcement actions and other relevant
information, to the Nationwide Mortgage Licensing
System and Registry.
(4) The State loan originator supervisory authority
has a process in place for challenging information
contained in the Nationwide Mortgage Licensing System
and Registry.
(5) The State loan originator supervisory authority
has established a mechanism to assess civil money
penalties for individuals acting as mortgage
originators in their State without a valid license or
registration.
(6) The State loan originator supervisory authority
has established minimum net worth or surety bonding
requirements that reflect the dollar amount of loans
originated by a residential mortgage loan originator,
or has established a recovery fund paid into by the
loan originators.
(e) Temporary Extension of Period.--The Secretary may extend,
by not more than 24 months, the 1-year or 2-year period, as the
case may be, referred to in subsection (a) for the licensing of
loan originators in any State under a State licensing law that
meets the requirements of sections 1505 and 1506 and subsection
(d) if the Secretary determines that such State is making a
good faith effort to establish a State licensing law that meets
such requirements, license mortgage originators under such law,
and register such originators with the Nationwide Mortgage
Licensing System and Registry.
SEC. 1509. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE MORTGAGE
LICENSING AND REGISTRY SYSTEM.
If at any time the Secretary determines that the Nationwide
Mortgage Licensing System and Registry is failing to meet the
requirements and purposes of this title for a comprehensive
licensing, supervisory, and tracking system for loan
originators, the Secretary shall establish and maintain such a
system to carry out the purposes of this title and the
effective registration and regulation of loan originators.
SEC. 1510. FEES.
The Federal banking agencies, the Farm Credit Administration,
the Secretary, and the Nationwide Mortgage Licensing System and
Registry may charge reasonable fees to cover the costs of
maintaining and providing access to information from the
Nationwide Mortgage Licensing System and Registry, to the
extent that such fees are not charged to consumers for access
to such system and registry.
SEC. 1511. BACKGROUND CHECKS OF LOAN ORIGINATORS.
(a) Access to Records.--Notwithstanding any other provision
of law, in providing identification and processing functions,
the Attorney General shall provide access to all criminal
history information to the appropriate State officials
responsible for regulating State-licensed loan originators to
the extent criminal history background checks are required
under the laws of the State for the licensing of such loan
originators.
(b) Agent.--For the purposes of this section and in order to
reduce the points of contact which the Federal Bureau of
Investigation may have to maintain for purposes of subsection
(a), the Conference of State Bank Supervisors or a wholly owned
subsidiary may be used as a channeling agent of the States for
requesting and distributing information between the Department
of Justice and the appropriate State agencies.
SEC. 1512. CONFIDENTIALITY OF INFORMATION.
(a) System Confidentiality.--Except as otherwise provided in
this section, any requirement under Federal or State law
regarding the privacy or confidentiality of any information or
material provided to the Nationwide Mortgage Licensing System
and Registry or a system established by the Secretary under
section 1509, and any privilege arising under Federal or State
law (including the rules of any Federal or State court) with
respect to such information or material, shall continue to
apply to such information or material after the information or
material has been disclosed to the system. Such information and
material may be shared with all State and Federal regulatory
officials with mortgage industry oversight authority without
the loss of privilege or the loss of confidentiality
protections provided by Federal and State laws.
(b) Nonapplicability of Certain Requirements.--Information or
material that is subject to a privilege or confidentiality
under subsection (a) shall not be subject to--
(1) disclosure under any Federal or State law
governing the disclosure to the public of information
held by an officer or an agency of the Federal
Government or the respective State; or
(2) subpoena or discovery, or admission into
evidence, in any private civil action or administrative
process, unless with respect to any privilege held by
the Nationwide Mortgage Licensing System and Registry
or the Secretary with respect to such information or
material, the person to whom such information or
material pertains waives, in whole or in part, in the
discretion of such person, that privilege.
(c) Coordination With Other Law.--Any State law, including
any State open record law, relating to the disclosure of
confidential supervisory information or any information or
material described in subsection (a) that is inconsistent with
subsection (a) shall be superseded by the requirements of such
provision to the extent State law provides less confidentiality
or a weaker privilege.
(d) Public Access to Information.--This section shall not
apply with respect to the information or material relating to
the employment history of, and publicly adjudicated
disciplinary and enforcement actions against, loan originators
that is included in Nationwide Mortgage Licensing System and
Registry for access by the public.
SEC. 1513. LIABILITY PROVISIONS.
The Secretary, any State official or agency, any Federal
banking agency, or any organization serving as the
administrator of the Nationwide Mortgage Licensing System and
Registry or a system established by the Secretary under section
1509, or any officer or employee of any such entity, shall not
be subject to any civil action or proceeding for monetary
damages by reason of the good faith action or omission of any
officer or employee of any such entity, while acting within the
scope of office or employment, relating to the collection,
furnishing, or dissemination of information concerning persons
who are loan originators or are applying for licensing or
registration as loan originators.
SEC. 1514. ENFORCEMENT UNDER HUD BACKUP LICENSING SYSTEM.
(a) Summons Authority.--The Secretary may--
(1) examine any books, papers, records, or other data
of any loan originator operating in any State which is
subject to a licensing system established by the
Secretary under section 1508; and
(2) summon any loan originator referred to in
paragraph (1) or any person having possession, custody,
or care of the reports and records relating to such
loan originator, to appear before the Secretary or any
delegate of the Secretary at a time and place named in
the summons and to produce such books, papers, records,
or other data, and to give testimony, under oath, as
may be relevant or material to an investigation of such
loan originator for compliance with the requirements of
this title.
(b) Examination Authority.--
(1) In general.--If the Secretary establishes a
licensing system under section 1508 for any State, the
Secretary shall appoint examiners for the purposes of
administering such section.
(2) Power to examine.--Any examiner appointed under
paragraph (1) shall have power, on behalf of the
Secretary, to make any examination of any loan
originator operating in any State which is subject to a
licensing system established by the Secretary under
section 1508 whenever the Secretary determines an
examination of any loan originator is necessary to
determine the compliance by the originator with this
title.
(3) Report of examination.--Each examiner appointed
under paragraph (1) shall make a full and detailed
report of examination of any loan originator examined
to the Secretary.
(4) Administration of oaths and affirmations;
evidence.--In connection with examinations of loan
originators operating in any State which is subject to
a licensing system established by the Secretary under
section 1508, or with other types of investigations to
determine compliance with applicable law and
regulations, the Secretary and examiners appointed by
the Secretary may administer oaths and affirmations and
examine and take and preserve testimony under oath as
to any matter in respect to the affairs of any such
loan originator.
(5) Assessments.--The cost of conducting any
examination of any loan originator operating in any
State which is subject to a licensing system
established by the Secretary under section 1508 shall
be assessed by the Secretary against the loan
originator to meet the Secretary's expenses in carrying
out such examination.
(c) Cease and Desist Proceeding.--
(1) Authority of secretary.--If the Secretary finds,
after notice and opportunity for hearing, that any
person is violating, has violated, or is about to
violate any provision of this title, or any regulation
thereunder, with respect to a State which is subject to
a licensing system established by the Secretary under
section 1508, the Secretary may publish such findings
and enter an order requiring such person, and any other
person that is, was, or would be a cause of the
violation, due to an act or omission the person knew or
should have known would contribute to such violation,
to cease and desist from committing or causing such
violation and any future violation of the same
provision, rule, or regulation. Such order may, in
addition to requiring a person to cease and desist from
committing or causing a violation, require such person
to comply, or to take steps to effect compliance, with
such provision or regulation, upon such terms and
conditions and within such time as the Secretary may
specify in such order. Any such order may, as the
Secretary deems appropriate, require future compliance
or steps to effect future compliance, either
permanently or for such period of time as the Secretary
may specify, with such provision or regulation with
respect to any loan originator.
(2) Hearing.--The notice instituting proceedings
pursuant to paragraph (1) shall fix a hearing date not
earlier than 30 days nor later than 60 days after
service of the notice unless an earlier or a later date
is set by the Secretary with the consent of any
respondent so served.
(3) Temporary order.--Whenever the Secretary
determines that the alleged violation or threatened
violation specified in the notice instituting
proceedings pursuant to paragraph (1), or the
continuation thereof, is likely to result in
significant dissipation or conversion of assets,
significant harm to consumers, or substantial harm to
the public interest prior to the completion of the
proceedings, the Secretary may enter a temporary order
requiring the respondent to cease and desist from the
violation or threatened violation and to take such
action to prevent the violation or threatened violation
and to prevent dissipation or conversion of assets,
significant harm to consumers, or substantial harm to
the public interest as the Secretary deems appropriate
pending completion of such proceedings. Such an order
shall be entered only after notice and opportunity for
a hearing, unless the Secretary determines that notice
and hearing prior to entry would be impracticable or
contrary to the public interest. A temporary order
shall become effective upon service upon the respondent
and, unless set aside, limited, or suspended by the
Secretary or a court of competent jurisdiction, shall
remain effective and enforceable pending the completion
of the proceedings.
(4) Review of temporary orders.--
(A) Review by secretary.--At any time after
the respondent has been served with a temporary
cease and desist order pursuant to paragraph
(3), the respondent may apply to the Secretary
to have the order set aside, limited, or
suspended. If the respondent has been served
with a temporary cease and desist order entered
without a prior hearing before the Secretary,
the respondent may, within 10 days after the
date on which the order was served, request a
hearing on such application and the Secretary
shall hold a hearing and render a decision on
such application at the earliest possible time.
(B) Judicial review.--Within--
(i) 10 days after the date the
respondent was served with a temporary
cease and desist order entered with a
prior hearing before the Secretary; or
(ii) 10 days after the Secretary
renders a decision on an application
and hearing under paragraph (1), with
respect to any temporary cease and
desist order entered without a prior
hearing before the Secretary,
the respondent may apply to the United States
district court for the district in which the
respondent resides or has its principal place
of business, or for the District of Columbia,
for an order setting aside, limiting, or
suspending the effectiveness or enforcement of
the order, and the court shall have
jurisdiction to enter such an order. A
respondent served with a temporary cease and
desist order entered without a prior hearing
before the Secretary may not apply to the court
except after hearing and decision by the
Secretary on the respondent's application under
subparagraph (A).
(C) No automatic stay of temporary order.--
The commencement of proceedings under
subparagraph (B) shall not, unless specifically
ordered by the court, operate as a stay of the
Secretary's order.
(5) Authority of the secretary to prohibit persons
from serving as loan originators.--In any cease and
desist proceeding under paragraph (1), the Secretary
may issue an order to prohibit, conditionally or
unconditionally, and permanently or for such period of
time as the Secretary shall determine, any person who
has violated this title or regulations thereunder, from
acting as a loan originator if the conduct of that
person demonstrates unfitness to serve as a loan
originator.
(d) Authority of the Secretary To Assess Money Penalties.--
(1) In general.--The Secretary may impose a civil
penalty on a loan originator operating in any State
which is subject to a licensing system established by
the Secretary under section 1508, if the Secretary
finds, on the record after notice and opportunity for
hearing, that such loan originator has violated or
failed to comply with any requirement of this title or
any regulation prescribed by the Secretary under this
title or order issued under subsection (c).
(2) Maximum amount of penalty.--The maximum amount of
penalty for each act or omission described in paragraph
(1) shall be $25,000.
SEC. 1515. STATE EXAMINATION AUTHORITY.
In addition to any authority allowed under State law a State
licensing agency shall have the authority to conduct
investigations and examinations as follows:
(1) For the purposes of investigating violations or
complaints arising under this title, or for the
purposes of examination, the State licensing agency may
review, investigate, or examine any loan originator
licensed or required to be licensed under this title,
as often as necessary in order to carry out the
purposes of this title.
(2) Each such loan originator shall make available
upon request to the State licensing agency the books
and records relating to the operations of such
originator. The State licensing agency may have access
to such books and records and interview the officers,
principals, loan originators, employees, independent
contractors, agents, and customers of the licensee
concerning their business.
(3) The authority of this section shall remain in
effect, whether such a loan originator acts or claims
to act under any licensing or registration law of such
State, or claims to act without such authority.
(4) No person subject to investigation or examination
under this section may knowingly withhold, abstract,
remove, mutilate, destroy, or secrete any books,
records, computer records, or other information.
SEC. 1516. REPORTS AND RECOMMENDATIONS TO CONGRESS.
(a) Annual Reports.--Not later than 1 year after the date of
enactment of this title, and annually thereafter, the Secretary
shall submit a report to Congress on the effectiveness of the
provisions of this title, including legislative
recommendations, if any, for strengthening consumer
protections, enhancing examination standards, streamlining
communication between all stakeholders involved in residential
mortgage loan origination and processing, and establishing
performance based bonding requirements for mortgage originators
or institutions that employ such brokers.
(b) Legislative Recommendations.--Not later than 6 months
after the date of enactment of this title, the Secretary shall
make recommendations to Congress on legislative reforms to the
Real Estate Settlement Procedures Act of 1974, that the
Secretary deems appropriate to promote more transparent
disclosures, allowing consumers to better shop and compare
mortgage loan terms and settlement costs.
SEC. 1517. STUDY AND REPORTS ON DEFAULTS AND FORECLOSURES.
(a) Study Required.--The Secretary shall conduct an extensive
study of the root causes of default and foreclosure of home
loans, using as much empirical data as is available.
(b) Preliminary Report to Congress.--Not later than 6 months
after the date of enactment of this title, the Secretary shall
submit to Congress a preliminary report regarding the study
required by this section.
(c) Final Report to Congress.--Not later than 12 months after
the date of enactment of this title, the Secretary shall submit
to Congress a final report regarding the results of the study
required by this section, which shall include any recommended
legislation relating to the study, and recommendations for best
practices and for a process to provide targeted assistance to
populations with the highest risk of potential default or
foreclosure.
TITLE VI--MISCELLANEOUS
SEC. 1601. STUDY AND REPORTS ON GUARANTEE FEES.
(a) Ongoing Study of Fees.--The Director shall conduct an
ongoing study of fees charged by enterprises for guaranteeing a
mortgage.
(b) Collection of Data.--The Director shall, by regulation or
order, establish procedures for the collection of data from
enterprises for purposes of this subsection, including the
format and the process for collection of such data.
(c) Reports to Congress.--The Director shall annually submit
a report to Congress on the results of the study conducted
under subsection (a), based on the aggregated data collected
under subsection (a) for the subject year, regarding the amount
of such fees and the criteria used by the enterprises to
determine such fees.
(d) Contents of Reports.--The reports required under
subsection (c) shall identify and analyze--
(1) the factors considered in determining the amount
of the guarantee fees charged;
(2) the total revenue earned by the enterprises from
guarantee fees;
(3) the total costs incurred by the enterprises for
providing guarantees;
(4) the average guarantee fee charged by the
enterprises;
(5) an analysis of any increase or decrease in
guarantee fees from the preceding year;
(6) a breakdown of the revenue and costs associated
with providing guarantees, based on product type and
risk classifications; and
(7) a breakdown of guarantee fees charged based on
asset size of the originator and the number of loans
sold or transferred to an enterprise.
(e) Protection of Information.--Nothing in this section may
be construed to require or authorize the Director to publicly
disclose information that is confidential or proprietary.
SEC. 1602. STUDY AND REPORT ON DEFAULT RISK EVALUATION.
(a) Study.--The Director shall conduct a study of ways to
improve the overall default risk evaluation used with respect
to residential mortgage loans. Particular attention shall be
paid to the development and utilization of processes and
technologies that provide a means to standardize the
measurement of risk.
(b) Report.--The Director shall submit a report on the study
conducted under this section to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives, not later
than 1 year after the date of enactment of this Act.
SEC. 1603. CONVERSION OF HUD CONTRACTS.
(a) In General.--Notwithstanding any other provision of law,
the Secretary may, at the request of an owner of a multifamily
housing project that exceeds 5,000 units to which a contract
for project-based rental assistance under section 8 of the
United States Housing Act of 1937 (``Act'') (42 U.S.C. 1437f)
and a Rental Assistance Payment contract is subject, convert
such contracts to a contract for project-based rental
assistance under section 8 of the Act.
(b) Initial Renewal.--
(1) At the request of an owner under subsection (a)
made no later than 90 days prior to a conversion, the
Secretary may, to the extent sufficient amounts are
made available in appropriation Acts and
notwithstanding any other law, treat the contemplated
resulting contract as if such contract were eligible
for initial renewal under section 524(a) of the
MultiFamily Assisted Housing Reform and Affordability
Act of 1997 (42 U.S.C. 1437f note) (``MAHRA'') (42
U.S.C. 1437f note).
(2) A request by an owner pursuant to paragraph (1)
shall be upon such terms and conditions as the
Secretary may require.
(c) Resulting Contract.--The resulting contract shall--
(1) be subject to section 524(a) of MAHRA (42 U.S.C.
1437f note);
(2) be considered for all purposes a contract that
has been renewed under section 524(a) of MAHRA (42
U.S.C. 1437f note) for a term not to exceed 20 years;
(3) be subsequently renewable at the request of an
owner, under any renewal option for which the project
is eligible under MAHRA (42 U.S.C. 1437f note);
(4) contain provisions limiting distributions, as the
Secretary determines appropriate, not to exceed 10
percent of the initial investment of the owner;
(5) be subject to the availability of sufficient
amounts in appropriation Acts; and
(6) be subject to such other terms and conditions as
the Secretary considers appropriate.
(d) Income Targeting.--To the extent that assisted dwelling
units, subject to the resulting contract under subsection (a),
serve low-income families, as defined in section 3(b)(2) of the
Act (42 U.S.C. 1437a(b)(2)) the units shall be considered to be
in compliance with all income targeting requirements under the
Act (42 U.S.C. 1437 et seq).
(e) Tenant Eligibility.--Notwithstanding any other provision
of law, each family residing in an assisted dwelling unit on
the date of conversion of a contract under this section,
subject to the resulting contract under subsection (a), shall
be considered to meet the applicable requirements for income
eligibility and occupancy.
(f) Definitions.--As used in this section--
(1) the term ``Secretary'' means the Secretary of
Housing and Urban Development;
(2) the term ``conversion'' means the action under
which a contract for project-based rental assistance
under section 8 of the Act and a Rental Assistance
Payment contract become a contract for project-based
rental assistance under section 8 of the Act (42 U.S.C.
1437f) pursuant to subsection (a);
(3) the term ``resulting contract'' means the new
contract after a conversion pursuant to subsection (a);
and
(4) the term ``assisted dwelling unit'' means a
dwelling unit in a multifamily housing project that
exceeds 5,000 units that, on the date of conversion of
a contract under this section, is subject to a contract
for project-based rental assistance under section 8 of
the Act (42 U.S.C. 1437f) or a Rental Assistance
Payment contract.
SEC. 1604. BRIDGE DEPOSITORY INSTITUTIONS.
(a) In General.--Section 11 of the Federal Deposit Insurance
Act (12 U.S.C. 1821) is amended--
(1) in subsection (d)(2)--
(A) in subparagraph (F), by striking ``as
receiver'' and all that follows through clause
(ii) and inserting the following: ``as
receiver, with respect to any insured
depository institution, organize a new
depository institution under subsection (m) or
a bridge depository institution under
subsection (n).'';
(B) in subparagraph (G), by striking ``new
bank or a bridge bank'' and inserting ``new
depository institution or a bridge depository
institution'';
(2) in the heading for subsection (e)(10)(C), by
striking ``Bridge Banks'' and inserting ``Bridge
Depository Institutions'';
(3) in subsection (e)(10)(C)(i), by striking ``bridge
bank'' and inserting ``bridge depository institution'';
(4) in subsection (m)--
(A) in the subsection heading, by striking
``Banks'' and inserting ``Depository
Institutions'';
(B) by striking ``insured bank'' each place
such term appears and inserting ``insured
depository institution'';
(C) by striking ``new bank'' each place such
term appears and inserting ``new depository
institution'';
(D) by striking ``such bank'' each place such
term appears and inserting ``such depository
institution'';
(E) by striking ``the bank'' each place such
term appears and inserting ``the insured
depository institution'';
(F) in paragraph (1), by inserting ``or
Federal savings association'' after ``national
bank'';
(G) in paragraph (6), by striking ``only
bank'' and inserting ``only depository
institution'';
(H) in paragraph (9), by inserting ``or the
Director of the Office of Thrift Supervision,
as appropriate'' after ``Comptroller of the
Currency'';
(I) in paragraph (15), by striking ``, but in
no event'' and all that follows through
``located'';
(J) in paragraph (16)--
(i) by inserting ``or the Director of
the Office of Thrift Supervision, as
appropriate,'' after ``Comptroller of
the Currency'' each place such term
appears;
(ii) by striking ``the bank'' each
place such term appears and inserting
``the depository institution'';
(iii) by inserting ``or Federal
savings association'' after ``national
bank'' each place such term appears;
(iv) by inserting ``or Federal
savings associations'' after ``national
banks''; and
(v) by striking ``Such bank'' and
inserting ``Such depository
institution''; and
(K) in paragraph (18), by inserting ``or the
Director of the Office of Thrift Supervision,
as appropriate,'' after ``Comptroller of the
Currency'' each place such term appears;
(5) in subsection (n)--
(A) in the subsection heading, by striking
``Banks'' and inserting ``Depository
Institutions'';
(B) by striking ``bridge bank'' each place
such term appears and inserting ``bridge
depository institution'';
(C) by striking ``bridge banks'' each place
such term appears (other than in paragraph
(1)(A))and inserting ``bridge depository
institutions'';
(D) by striking ``bridge bank's'' each place
such term appears and inserting ``bridge
depository institution's'';
(E) by striking ``insured bank'' each place
such term appears and inserting ``insured
depository institution'';
(F) by striking ``insured banks'' each place
such term appears and inserting ``insured
depository institutions'';
(G) by striking ``such bank'' each place such
term appears (other than in paragraph (4)(J))
and inserting ``such depository institution'';
(H) by striking ``the bank'' each place such
term appears and inserting ``the depository
institution'';
(I) by striking ``bank or banks'' each place
such term appears and inserting ``depository
institution or institutions'';
(J) in paragraph (1)(A)--
(i) by inserting ``, with respect to
1 or more insured banks, or the
Director of the Office of Thrift
Supervision, with respect to 1 or more
insured savings associations,'' after
``Comptroller of the Currency'';
(ii) by inserting ``or Federal
savings associations, as appropriate,''
after ``national banks'';
(iii) by inserting ``or Federal
savings associations, as applicable,''
after ``banking associations''; and
(iv) by striking ``as bridge banks''
and inserting ``as `bridge depository
institutions' '';
(K) in paragraph (1)(B)--
(i) by striking ``of a bank''; and
(ii) by striking ``of that bank'';
(L) in the heading for paragraph (1)(E), by
inserting ``or federal savings association''
before the period;
(M) in paragraph (1)(E), by inserting before
the period ``, in the case of 1 or more insured
banks, and as a Federal savings association, in
the case of 1 or more insured savings
associations'';
(N) in paragraph (2)--
(i) by inserting ``or Federal savings
association'' after ``national bank''
each place such term appears;
(ii) in subparagraph (A), by
inserting ``or the Director of the
Office of Thrift Supervision'' after
``Comptroller of the Currency''; and
(iii) in the heading for subparagraph
(B), by inserting ``or federal savings
association'' before the period;
(O) in paragraph (4)--
(i) in the matter preceding
subparagraph (A), by inserting ``or
Federal savings association, as
appropriate'' after ``national bank'';
(ii) in subparagraph (C), by striking
``under section 5138 of the Revised
Statutes or any other'' and inserting
``under any'';
(iii) by inserting ``and the Director
of the Office of Thrift Supervision, as
appropriate,'' after ``Comptroller of
the Currency'' each place such term
appears;
(iv) in subparagraph (D), by striking
``bank's'' and inserting ``depository
institution's''; and
(v) in subparagraph (H), by striking
``a bank in default'' and inserting ``a
depository institution in default'';
(P) in paragraph (8)--
(i) in subparagraph (A), by striking
``the banks'' and inserting ``the
depository institutions'';
(ii) in subparagraph (B), by striking
``bank's'' and inserting ``depository
institution's'';
(Q) by striking ``bridge bank'' or ``bridge
banks'' as the case may be in the headings for
paragraphs (9), (10), (12), and (13) and
inserting ``bridge depository institution'' or
``bridge depository institutions'' as
appropriate;
(R) in paragraph (11), by inserting ``or a
Federal savings association, as the case may
be,'' after ``national bank'' each place such
term appears;
(S) in paragraph (12)--
(i) by inserting ``or the Director of
the Office of Thrift Supervision, as
appropriate,'' after ``Comptroller of
the Currency'' each place such term
appears; and
(ii) by inserting ``or Federal
savings associations, as appropriate''
after ``national banks''; and
(T) in paragraph (13), by striking ``single
bank'' and inserting ``single depository
institution''.
(b) Other Conforming Amendments.--
(1) Federal deposit insurance act.--The Federal
Deposit Insurance Act (12 U.S.C. 1811 et seq.) is
amended--
(A) in section 3 (12 U.S.C. 1813), by
striking subsection (i) and inserting the
following:
``(i) New Depository Institution and Bridge Depository
Institution Defined.--
``(1) New depository institution.--The term `new
depository institution' means a new national bank or
Federal savings association, other than a bridge
depository institution, organized by the Corporation in
accordance with section 11(m).
``(2) Bridge depository institution.--The term
`bridge depository institution' means a new national
bank or Federal savings association organized by the
Corporation in accordance with section 11(n).'';
(B) in section 10(d)(5)(B) (12 U.S.C.
1820(d)(5)(B)), by striking ``bridge bank'' and
inserting ``bridge depository institution'';
(C) in section 12 (12 U.S.C. 1822), by
striking ``new bank'' each place such term
appears and inserting ``new depository
institution'';and
(D) in section 38(j)(2) (12 U.S.C.
1831o(j)(2)), by striking ``bridge bank'' and
inserting ``bridge depository institution''.
(2) Federal credit union act.--Section
207(c)(10)(C)(i) of the Federal Credit Union Act (12
U.S.C. 1787(c)(10)(C)(i)) is amended by striking
``bridge bank'' and inserting ``bridge depository
institution''.
(3) Title 11, united states code.--Section 783 of
title 11, United States Code, is amended by striking
``bridge bank'' and inserting ``bridge depository
institution''.
(4) Title 26, united states code.--Section
414(l)(2)(G) of the Internal Revenue Code of 1986, is
amended by striking ``bridge bank'' and inserting
``bridge depository institution''.
(c) Repeal of Deposit Limitation.--Section 11(n)(1)(B)(i) of
the Federal Deposit Insurance Act (12 U.S.C. 1821(n)(1)(B)(i))
is amended by striking ``, except that'' and all that follows
through ``another insured depository institution''.
(d) Federal Reserve Bank Lending to Bridge Depository
Institutions.--Section 11(n)(5) of the Federal Deposit
Insurance Act (12 U.S.C. 1821(n)(5)) is amended by adding at
the end the following new subparagraph:
``(D) Capital levels.--A bridge depository
institution shall not be considered an
undercapitalized depository institution or a
critically undercapitalized depository
institution for purposes of section 10B(b) of
the Federal Reserve Act.''.
SEC. 1605. SENSE OF THE SENATE.
It is the sense of the Senate that in implementing or
carrying out any provision of this Act, or any amendment made
by this Act, the Senate supports a policy of noninterference
regarding local government requirements that the holder of a
foreclosed property maintain that property.
DIVISION B--FORECLOSURE PREVENTION
SECTION 2001. SHORT TITLE.
This division may be cited as the ``Foreclosure Prevention
Act of 2008''.
SEC. 2002. EMERGENCY DESIGNATION.
For purposes of Senate enforcement, all provisions of this
division are designated as emergency requirements and necessary
to meet emergency needs pursuant to section 204 of S. Con. Res.
21 (110th Congress), the concurrent resolution on the budget
for fiscal year 2008.
TITLE I--FHA MODERNIZATION ACT OF 2008
SEC. 2101. SHORT TITLE.
This title may be cited as the ``FHA Modernization Act of
2008''.
Subtitle A--Building American Homeownership
SEC. 2111. SHORT TITLE.
This subtitle may be cited as the ``Building American
Homeownership Act of 2008''.
SEC. 2112. MAXIMUM PRINCIPAL LOAN OBLIGATION.
(a) In General.--Paragraph (2) of section 203(b) of the
National Housing Act (12 U.S.C. 1709(b)(2)) is amended--
(1) by striking subparagraphs (A) and (B) and
inserting the following:
``(A) not to exceed the lesser of--
``(i) in the case of a 1-family
residence, 115 percent of the median 1-
family house price in the area, as
determined by the Secretary; and in the
case of a 2-, 3-, or 4-family
residence, the percentage of such
median price that bears the same ratio
to such median price as the dollar
amount limitation determined under the
sixth sentence of section 305(a)(2) of
the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1454(a)(2))
for a 2-, 3-, or 4-family residence,
respectively, bears to the dollar
amount limitation determined under such
section for a 1-family residence; or
``(ii) 150 percent of the dollar
amount limitation determined under the
sixth sentence of such section
305(a)(2) for a residence of applicable
size;
except that the dollar amount limitation in
effect under this subparagraph for any size
residence for any area may not be less than the
greater of: (I) the dollar amount limitation in
effect under this section for the area on
October 21, 1998; or (II) 65 percent of the
dollar amount limitation determined under the
sixth sentence of such section 305(a)(2) for a
residence of the applicable size; and
``(B) not to exceed 100 percent of the
appraised value of the property.''; and
(2) in the matter following subparagraph (B), by
striking the second sentence (relating to a definition
of ``average closing cost'') and all that follows
through ``section 3103A(d) of title 38, United States
Code.''.
(b) Treatment of Up-Front Premiums.--Section 203(d) of the
National Housing Act (12 U.S.C. 1709(d)) is amended--
(1) by striking ``Notwithstanding any'' and inserting
the following: ``Except as provided in paragraph (2) of
this subsection, notwithstanding'';
(2) by inserting ``(1)'' after ``(d)''; and
(3) by adding at the end the following new paragraph:
``(2) The maximum amount of a mortgage determined under
subsection (b)(2)(B) of this section may not be increased as
provided in paragraph (1).''.
(c) Effective Date.-- The amendments made by subsection (a)
shall take effect upon the expiration of the date described in
section 202(a) of the Economic Stimulus Act of 2008 (Public Law
110-185; 122 Stat. 620).
SEC. 2113. CASH INVESTMENT REQUIREMENT AND PROHIBITION OF SELLER-FUNDED
DOWN PAYMENT ASSISTANCE.
Paragraph (9) of section 203(b) of the National Housing Act
(12 U.S.C. 1709(b)(9)) is amended to read as follows:
``(9) Cash investment requirement.--
``(A) In general.--A mortgage insured under
this section shall be executed by a mortgagor
who shall have paid, in cash or its equivalent,
on account of the property an amount equal to
not less than 3.5 percent of the appraised
value of the property or such larger amount as
the Secretary may determine.
``(B) Family members.--For purposes of this
paragraph, the Secretary shall consider as cash
or its equivalent any amounts borrowed from a
family member (as such term is defined in
section 201), subject only to the requirements
that, in any case in which the repayment of
such borrowed amounts is secured by a lien
against the property, that--
``(i) such lien shall be subordinate
to the mortgage; and
``(ii) the sum of the principal
obligation of the mortgage and the
obligation secured by such lien may not
exceed 100 percent of the appraised
value of the property plus any initial
service charges, appraisal, inspection,
and other fees in connection with the
mortgage.
``(C) Prohibited sources.--In no case shall
the funds required by subparagraph (A) consist,
in whole or in part, of funds provided by any
of the following parties before, during, or
after closing of the property sale:
``(i) The seller or any other person
or entity that financially benefits
from the transaction.
``(ii) Any third party or entity that
is reimbursed, directly or indirectly,
by any of the parties described in
clause (i).
This subparagraph shall apply only to mortgages
for which the mortgagee has issued credit
approval for the borrower on or after October
1, 2008.''.
SEC. 2114. MORTGAGE INSURANCE PREMIUMS.
Section 203(c)(2) of the National Housing Act (12 U.S.C.
1709(c)(2)) is amended--
(1) in the matter preceding subparagraph (A), by
striking ``or of the General Insurance Fund'' and all
that follows through ``section 234(c),,''; and
(2) in subparagraph (A)--
(A) by striking ``2.25 percent'' and
inserting ``3 percent''; and
(B) by striking ``2.0 percent'' and inserting
``2.75 percent''.
SEC. 2115. REHABILITATION LOANS.
Subsection (k) of section 203 of the National Housing Act (12
U.S.C. 1709(k)) is amended--
(1) in paragraph (1), by striking ``on'' and all that
follows through ``1978''; and
(2) in paragraph (5)--
(A) by striking ``General Insurance Fund''
the first place it appears and inserting
``Mutual Mortgage Insurance Fund''; and
(B) in the second sentence, by striking the
comma and all that follows through ``General
Insurance Fund''.
SEC. 2116. DISCRETIONARY ACTION.
The National Housing Act is amended--
(1) in subsection (e) of section 202 (12 U.S.C.
1708(e))--
(A) in paragraph (3)(B), by striking
``section 202(e) of the National Housing Act''
and inserting ``this subsection''; and
(B) by redesignating such subsection as
subsection (f);
(2) by striking paragraph (4) of section 203(s) (12
U.S.C. 1709(s)(4)) and inserting the following new
paragraph:
``(4) the Secretary of Agriculture;''; and
(3) by transferring subsection (s) of section 203 (as
amended by paragraph (2) of this section) to section
202, inserting such subsection after subsection (d) of
section 202, and redesignating such subsection as
subsection (e).
SEC. 2117. INSURANCE OF CONDOMINIUMS.
(a) In General.--Section 234 of the National Housing Act (12
U.S.C. 1715y) is amended--
(1) in subsection (c), in the first sentence--
(A) by striking ``and'' before ``(2)''; and
(B) by inserting before the period at the end
the following: ``, and (3) the project has a
blanket mortgage insured by the Secretary under
subsection (d)''; and
(2) in subsection (g), by striking ``, except that''
and all that follows and inserting a period.
(b) Definition of Mortgage.--Section 201(a) of the National
Housing Act (12 U.S.C. 1707(a)) is amended--
(1) before ``a first mortgage'' insert ``(A)'';
(2) by striking ``or on a leasehold (1)'' and
inserting ``(B) a first mortgage on a leasehold on real
estate (i)'';
(3) by striking ``or (2)'' and inserting ``, or
(ii)''; and
(4) by inserting before the semicolon the following:
``, or (C) a first mortgage given to secure the unpaid
purchase price of a fee interest in, or long-term
leasehold interest in, real estate consisting of a one-
family unit in a multifamily project, including a
project in which the dwelling units are attached, or
are manufactured housing units, semi-detached, or
detached, and an undivided interest in the common areas
and facilities which serve the project''.
(c) Definition of Real Estate.--Section 201 of the National
Housing Act (12 U.S.C. 1707) is amended by adding at the end
the following new subsection:
``(g) The term `real estate' means land and all natural
resources and structures permanently affixed to the land,
including residential buildings and stationary manufactured
housing. The Secretary may not require, for treatment of any
land or other property as real estate for purposes of this
title, that such land or property be treated as real estate for
purposes of State taxation.''.
SEC. 2118. MUTUAL MORTGAGE INSURANCE FUND.
(a) In General.--Subsection (a) of section 202 of the
National Housing Act (12 U.S.C. 1708(a)) is amended to read as
follows:
``(a) Mutual Mortgage Insurance Fund.--
``(1) Establishment.--Subject to the provisions of
the Federal Credit Reform Act of 1990, there is hereby
created a Mutual Mortgage Insurance Fund (in this title
referred to as the `Fund'), which shall be used by the
Secretary to carry out the provisions of this title
with respect to mortgages insured under section 203.
The Secretary may enter into commitments to guarantee,
and may guarantee, such insured mortgages.
``(2) Limit on loan guarantees.--The authority of the
Secretary to enter into commitments to guarantee such
insured mortgages shall be effective for any fiscal
year only to the extent that the aggregate original
principal loan amount under such mortgages, any part of
which is guaranteed, does not exceed the amount
specified in appropriations Acts for such fiscal year.
``(3) Fiduciary responsibility.--The Secretary has a
responsibility to ensure that the Mutual Mortgage
Insurance Fund remains financially sound.
``(4) Annual independent actuarial study.--The
Secretary shall provide for an independent actuarial
study of the Fund to be conducted annually, which shall
analyze the financial position of the Fund. The
Secretary shall submit a report annually to the
Congress describing the results of such study and
assessing the financial status of the Fund. The report
shall recommend adjustments to underwriting standards,
program participation, or premiums, if necessary, to
ensure that the Fund remains financially sound. The
report shall also include an evaluation of the quality
control procedures and accuracy of information utilized
in the process of underwriting loans guaranteed by the
Fund. Such evaluation shall include a review of the
risk characteristics of loans based not only on
borrower information and performance, but on risks
associated with loans originated or funded by various
entities or financial institutions.
``(5) Quarterly reports.--During each fiscal year,
the Secretary shall submit a report to the Congress for
each calendar quarter, which shall specify for
mortgages that are obligations of the Fund--
``(A) the cumulative volume of loan guarantee
commitments that have been made during such
fiscal year through the end of the quarter for
which the report is submitted;
``(B) the types of loans insured, categorized
by risk;
``(C) any significant changes between actual
and projected claim and prepayment activity;
``(D) projected versus actual loss rates; and
``(E) updated projections of the annual
subsidy rates to ensure that increases in risk
to the Fund are identified and mitigated by
adjustments to underwriting standards, program
participation, or premiums, and the financial
soundness of the Fund is maintained.
The first quarterly report under this paragraph shall
be submitted on the last day of the first quarter of
fiscal year 2008, or on the last day of the first full
calendar quarter following the enactment of the
Building American Homeownership Act of 2008, whichever
is later.
``(6) Adjustment of premiums.--If, pursuant to the
independent actuarial study of the Fund required under
paragraph (4), the Secretary determines that the Fund
is not meeting the operational goals established under
paragraph (7) or there is a substantial probability
that the Fund will not maintain its established target
subsidy rate, the Secretary may either make
programmatic adjustments under this title as necessary
to reduce the risk to the Fund, or make appropriate
premium adjustments.
``(7) Operational goals.--The operational goals for
the Fund are--
``(A) to minimize the default risk to the
Fund and to homeowners by among other actions
instituting fraud prevention quality control
screening not later than 18 months after the
date of enactment of the Building American
Homeownership Act of 2008; and
``(B) to meet the housing needs of the
borrowers that the single family mortgage
insurance program under this title is designed
to serve.''.
(b) Obligations of Fund.--The National Housing Act is amended
as follows:
(1) Homeownership voucher program mortgages.--In
section 203(v) (12 U.S.C. 1709(v))--
(A) by striking ``Notwithstanding section 202
of this title, the'' and inserting ``The''; and
(B) by striking ``General Insurance Fund''
the first place such term appears and all that
follows through the end of the subsection and
inserting ``Mutual Mortgage Insurance Fund.''.
(2) Home equity conversion mortgages.--Section
255(i)(2)(A) of the National Housing Act (12 U.S.C.
1715z-20(i)(2)(A)) is amended by striking ``General
Insurance Fund'' and inserting ``Mutual Mortgage
Insurance Fund''.
(c) Conforming Amendments.--The National Housing Act is
amended--
(1) in section 205 (12 U.S.C. 1711), by striking
subsections (g) and (h); and
(2) in section 519(e) (12 U.S.C. 1735c(e)), by
striking ``203(b)'' and all that follows through
``203(i)'' and inserting ``203, except as determined by
the Secretary''.
SEC. 2119. HAWAIIAN HOME LANDS AND INDIAN RESERVATIONS.
(a) Hawaiian Home Lands.--Section 247(c) of the National
Housing Act (12 U.S.C. 1715z-12(c)) is amended--
(1) by striking ``General Insurance Fund established
in section 519'' and inserting ``Mutual Mortgage
Insurance Fund''; and
(2) in the second sentence, by striking ``(1) all
references'' and all that follows through ``and (2)''.
(b) Indian Reservations.--Section 248(f) of the National
Housing Act (12 U.S.C. 1715z-13(f)) is amended--
(1) by striking ``General Insurance Fund'' the first
place it appears through ``519'' and inserting ``Mutual
Mortgage Insurance Fund''; and
(2) in the second sentence, by striking ``(1) all
references'' and all that follows through ``and (2)''.
SEC. 2120. CONFORMING AND TECHNICAL AMENDMENTS.
(a) Repeals.--The following provisions of the National
Housing Act are repealed:
(1) Subsection (i) of section 203 (12 U.S.C.
1709(i)).
(2) Subsection (o) of section 203 (12 U.S.C.
1709(o)).
(3) Subsection (p) of section 203 (12 U.S.C.
1709(p)).
(4) Subsection (q) of section 203 (12 U.S.C.
1709(q)).
(5) Section 222 (12 U.S.C. 1715m).
(6) Section 237 (12 U.S.C. 1715z-2).
(7) Section 245 (12 U.S.C. 1715z-10).
(b) Definition of Area.--Section 203(u)(2)(A) of the National
Housing Act (12 U.S.C. 1709(u)(2)(A)) is amended by striking
``shall'' and all that follows and inserting ``means a
metropolitan statistical area as established by the Office of
Management and Budget;''.
(c) Definition of State.--Section 201(d) of the National
Housing Act (12 U.S.C. 1707(d)) is amended by striking ``the
Trust Territory of the Pacific Islands'' and inserting ``the
Commonwealth of the Northern Mariana Islands''.
SEC. 2121. INSURANCE OF MORTGAGES.
Subsection (n)(2) of section 203 of the National Housing Act
(12 U.S.C. 1709(n)(2)) is amended--
(1) in subparagraph (A), by inserting ``or
subordinate mortgage or'' before ``lien given''; and
(2) in subparagraph (C), by inserting ``or
subordinate mortgage or'' before ``lien''.
SEC. 2122. HOME EQUITY CONVERSION MORTGAGES.
(a) In General.--Section 255 of the National Housing Act (12
U.S.C. 1715z-20) is amended--
(1) in subsection (b)(2), insert `` `real estate,' ''
after `` `mortgagor','';
(2) by amending subsection (d)(1) to read as follows:
``(1) have been originated by a mortgagee approved by
the Secretary;'';
(3) by amending subsection (d)(2)(B) to read as
follows:
``(B) has received adequate counseling, as
provided in subsection (f), by an independent
third party that is not, either directly or
indirectly, associated with or compensated by a
party involved in--
``(i) originating or servicing the
mortgage;
``(ii) funding the loan underlying
the mortgage; or
``(iii) the sale of annuities,
investments, long-term care insurance,
or any other type of financial or
insurance product;'';
(4) in subsection (f)--
(A) by striking ``(f) Information Services
for Mortgagors.--'' and inserting ``(f)
Counseling Services and Information for
Mortgagors.--''; and
(B) by amending the matter preceding
paragraph (1) to read as follows: ``The
Secretary shall provide or cause to be provided
adequate counseling for the mortgagor, as
described in subsection (d)(2)(B). Such
counseling shall be provided by counselors that
meet qualification standards and follow uniform
counseling protocols. The qualification
standards and counseling protocols shall be
established by the Secretary within 12 months
of the date of enactment of the Building
American Homeownership Act of 2008. The
protocols shall require a qualified counselor
to discuss with each mortgagor information
which shall include--''
(5) in subsection (g), by striking ``established
under section 203(b)(2)'' and all that follows through
``located'' and inserting ``limitation established
under section 305(a)(2) of the Federal Home Loan
Mortgage Corporation Act for a 1-family residence'';
(6) by striking subsection (l);
(7) by redesignating subsection (m) as subsection
(l);
(8) by amending subsection (l), as so redesignated,
to read as follows:
``(l) Funding for Counseling.--The Secretary may use a
portion of the mortgage insurance premiums collected under the
program under this section to adequately fund the counseling
and disclosure activities required under subsection (f),
including counseling for those homeowners who elect not to take
out a home equity conversion mortgage, provided that the use of
such funds is based upon accepted actuarial principles.''; and
(9) by adding at the end the following new
subsection:
``(m) Authority To Insure Home Purchase Mortgage.--
``(1) In general.--Notwithstanding any other
provision of this section, the Secretary may insure,
upon application by a mortgagee, a home equity
conversion mortgage upon such terms and conditions as
the Secretary may prescribe, when the home equity
conversion mortgage will be used to purchase a 1- to 4-
family dwelling unit, one unit of which the mortgagor
will occupy as a primary residence, and to provide for
any future payments to the mortgagor, based on
available equity, as authorized under subsection
(d)(9).
``(2) Limitation on principal obligation.--A home
equity conversion mortgage insured pursuant to
paragraph (1) shall involve a principal obligation that
does not exceed the dollar amount limitation determined
under section 305(a)(2) of the Federal Home Loan
Mortgage Corporation Act for a 1-family residence.
``(n) Requirements on Mortgage Originators.--
``(1) In general.--The mortgagee and any other party
that participates in the origination of a mortgage to
be insured under this section shall--
``(A) not participate in, be associated with,
or employ any party that participates in or is
associated with any other financial or
insurance activity; or
``(B) demonstrate to the Secretary that the
mortgagee or other party maintains, or will
maintain, firewalls and other safeguards
designed to ensure that--
``(i) individuals participating in
the origination of the mortgage shall
have no involvement with, or incentive
to provide the mortgagor with, any
other financial or insurance product;
and
``(ii) the mortgagor shall not be
required, directly or indirectly, as a
condition of obtaining a mortgage under
this section, to purchase any other
financial or insurance product.
``(2) Approval of other parties.--All parties that
participate in the origination of a mortgage to be
insured under this section shall be approved by the
Secretary.
``(o) Prohibition Against Requirements To Purchase Additional
Products.--The mortgagor or any other party shall not be
required by the mortgagee or any other party to purchase an
insurance, annuity, or other similar product as a requirement
or condition of eligibility for insurance under subsection (c),
except for title insurance, hazard, flood, or other peril
insurance, or other such products that are customary and normal
under subsection (c), as determined by the Secretary.
``(p) Study to Determine Consumer Protections and
Underwriting Standards.--The Secretary shall conduct a study to
examine and determine appropriate consumer protections and
underwriting standards to ensure that the purchase of products
referred to in subsection (o) is appropriate for the consumer.
In conducting such study, the Secretary shall consult with
consumer advocates (including recognized experts in consumer
protection), industry representatives, representatives of
counseling organizations, and other interested parties.''.
(b) Mortgages for Cooperatives.--Subsection (b) of section
255 of the National Housing Act (12 U.S.C. 1715z-20(b)) is
amended--
(1) in paragraph (4)--
(A) by inserting ``a first or subordinate
mortgage or lien'' before ``on all stock'';
(B) by inserting ``unit'' after ``dwelling'';
and
(C) by inserting ``a first mortgage or first
lien'' before ``on a leasehold''; and
(2) in paragraph (5), by inserting ``a first or
subordinate lien on'' before ``all stock''.
(c) Limitation on Origination Fees.--Section 255 of the
National Housing Act (12 U.S.C. 1715z-20), as amended by the
preceding provisions of this section, is further amended by
adding at the end the following new subsection:
``(r) Limitation on Origination Fees.--The Secretary shall
establish limits on the origination fee that may be charged to
a mortgagor under a mortgage insured under this section, which
limitations shall--
``(1) be equal to 2.0 percent of the maximum claim
amount of the mortgage, up to a maximum claim amount of
$200,000 plus 1 percent of any portion of the maximum
claim amount that is greater than $200,000, unless
adjusted thereafter on the basis of an analysis of--
``(A) the costs to mortgagors; and
``(B) the impact on the reverse mortgage
market;
``(2) be subject to a minimum allowable amount;
``(3) provide that the origination fee may be fully
financed with the mortgage;
``(4) include any fees paid to correspondent
mortgagees approved by the Secretary;
``(5) have the same effective date as subsection
(m)(2) regarding the limitation on principal
obligation; and
``(6) be subject to a maximum origination fee of
$6,000, except that such maximum limit shall be
adjusted in accordance with the annual percentage
increase in the Consumer Price Index of the Bureau of
Labor Statistics of the Department of Labor in
increments of $500 only when the percentage increase in
such index, when applied to the maximum origination
fee, produces dollar increases that exceed $500.''.
(d) Study Regarding Program Costs and Credit Availability.--
(1) In general.--The Comptroller General of the
United States shall conduct a study regarding the costs
and availability of credit under the home equity
conversion mortgages for elderly homeowners program
under section 255 of the National Housing Act (12
U.S.C. 1715z-20) (in this subsection referred to as the
``program'').
(2) Purpose.--The purpose of the study required under
paragraph (1) is to help Congress analyze and determine
the effects of limiting the amounts of the costs or
fees under the program from the amounts charged under
the program as of the date of the enactment of this
title.
(3) Content of report.--The study required under
paragraph (1) should focus on--
(A) the cost to mortgagors of participating
in the program;
(B) the financial soundness of the program;
(C) the availability of credit under the
program; and
(D) the costs to elderly homeowners
participating in the program, including--
(i) mortgage insurance premiums
charged under the program;
(ii) up-front fees charged under the
program; and
(iii) margin rates charged under the
program.
(4) Timing of report.--Not later than 12 months after
the date of the enactment of this title, the
Comptroller General 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 setting forth the results and
conclusions of the study required under paragraph (1).
SEC. 2123. ENERGY EFFICIENT MORTGAGES PROGRAM.
Section 106(a)(2) of the Energy Policy Act of 1992 (42 U.S.C.
12712 note) is amended--
(1) by amending subparagraph (C) to read as follows:
``(C) Costs of improvements.--The cost of
cost-effective energy efficiency improvements
shall not exceed the greater of--
``(i) 5 percent of the property value
(not to exceed 5 percent of the limit
established under section 203(b)(2)(A))
of the National Housing Act (12 U.S.C.
1709(b)(2)(A); or
``(ii) 2 percent of the limit
established under section 203(b)(2)(B)
of such Act.''; and
(2) by adding at the end the following:
``(D) Limitation.--In any fiscal year, the
aggregate number of mortgages insured pursuant
to this section may not exceed 5 percent of the
aggregate number of mortgages for 1- to 4-
family residences insured by the Secretary of
Housing and Urban Development under title II of
the National Housing Act (12 U.S.C. 1707 et
seq.) during the preceding fiscal year.''.
SEC. 2124. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS WITHOUT
SUFFICIENT CREDIT HISTORY.
(a) Establishment.--Title II of the National Housing Act (12
U.S.C. 1707 et seq.) is amended by adding at the end the
following new section:
``SEC. 257. PILOT PROGRAM FOR AUTOMATED PROCESS FOR BORROWERS WITHOUT
SUFFICIENT CREDIT HISTORY.
``(a) Establishment.--The Secretary shall carry out a pilot
program to establish, and make available to mortgagees, an
automated process for providing alternative credit rating
information for mortgagors and prospective mortgagors under
mortgages on 1- to 4-family residences to be insured under this
title who have insufficient credit histories for determining
their creditworthiness. Such alternative credit rating
information may include rent, utilities, and insurance payment
histories, and such other information as the Secretary
considers appropriate.
``(b) Scope.--The Secretary may carry out the pilot program
under this section on a limited basis or scope, and may
consider limiting the program to first-time homebuyers.
``(c) Limitation.--In any fiscal year, the aggregate number
of mortgages insured pursuant to the automated process
established under this section may not exceed 5 percent of the
aggregate number of mortgages for 1- to 4-family residences
insured by the Secretary under this title during the preceding
fiscal year.
``(d) Sunset.--After the expiration of the 5-year period
beginning on the date of the enactment of the Building American
Homeownership Act of 2008, the Secretary may not enter into any
new commitment to insure any mortgage, or newly insure any
mortgage, pursuant to the automated process established under
this section.''.
(b) GAO Report.--Not later than the expiration of the two-
year period beginning on the date of the enactment of this
subtitle, the Comptroller General of the United States shall
submit to the Congress a report identifying the number of
additional mortgagors served using the automated process
established pursuant to section 257 of the National Housing Act
(as added by the amendment made by subsection (a) of this
section) and the impact of such process and the insurance of
mortgages pursuant to such process on the safety and soundness
of the insurance funds under the National Housing Act of which
such mortgages are obligations.
SEC. 2125. HOMEOWNERSHIP PRESERVATION.
The Secretary of Housing and Urban Development and the
Commissioner of the Federal Housing Administration, in
consultation with industry, the Neighborhood Reinvestment
Corporation, and other entities involved in foreclosure
prevention activities, shall--
(1) develop and implement a plan to improve the
Federal Housing Administration's loss mitigation
process; and
(2) report such 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. 2126. USE OF FHA SAVINGS FOR IMPROVEMENTS IN FHA TECHNOLOGIES,
PROCEDURES, PROCESSES, PROGRAM PERFORMANCE,
STAFFING, AND SALARIES.
(a) Authorization of Appropriations.--There is authorized to
be appropriated for each of fiscal years 2009 through 2013,
$25,000,000, from negative credit subsidy for the mortgage
insurance programs under title II of the National Housing Act,
to the Secretary of Housing and Urban Development for
increasing funding for the purpose of improving technology,
processes, program performance, eliminating fraud, and for
providing appropriate staffing in connection with the mortgage
insurance programs under title II of the National Housing Act.
(b) Certification.--The authorization under subsection (a)
shall not be effective for a fiscal year unless the Secretary
of Housing and Urban Development has, by rulemaking in
accordance with section 553 of title 5, United States Code
(notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such
section), made a determination that--
(1) premiums being, or to be, charged during such
fiscal year for mortgage insurance under title II of
the National Housing Act are established at the minimum
amount sufficient to--
(A) comply with the requirements of section
205(f) of such Act (relating to required
capital ratio for the Mutual Mortgage Insurance
Fund); and
(B) ensure the safety and soundness of the
other mortgage insurance funds under such Act;
and
(2) any negative credit subsidy for such fiscal year
resulting from such mortgage insurance programs
adequately ensures the efficient delivery and
availability of such programs.
(c) Study and Report.--The Secretary of Housing and Urban
Development shall conduct a study to obtain recommendations
from participants in the private residential (both single
family and multifamily) mortgage lending business and the
secondary market for such mortgages on how best to update and
upgrade processes and technologies for the mortgage insurance
programs under title II of the National Housing Act so that the
procedures for originating, insuring, and servicing of such
mortgages conform with those customarily used by secondary
market purchasers of residential mortgage loans. Not later than
the expiration of the 12-month period beginning on the date of
the enactment of this title, the Secretary shall submit a
report to the Congress describing the progress made and to be
made toward updating and upgrading such processes and
technology, and providing appropriate staffing for such
mortgage insurance programs.
SEC. 2127. POST-PURCHASE HOUSING COUNSELING ELIGIBILITY IMPROVEMENTS.
Section 106(c)(4) of the Housing and Urban Development Act of
1968 (12 U.S.C. 1701x(c)(4)) is amended:
(1) in subparagraph (C)--
(A) in clause (i), by striking ``; or'' and
inserting a semicolon;
(B) in clause (ii), by striking the period at
the end and inserting a semicolon; and
(C) by adding at the end the following:
``(iii) a significant reduction in
the income of the household due to
divorce or death; or
``(iv) a significant increase in
basic expenses of the homeowner or an
immediate family member of the
homeowner (including the spouse, child,
or parent for whom the homeowner
provides substantial care or financial
assistance) due to--
``(I) an unexpected or
significant increase in medical
expenses;
``(II) a divorce;
``(III) unexpected and
significant damage to the
property, the repair of which
will not be covered by private
or public insurance; or
``(IV) a large property-tax
increase; or'';
(2) by striking the matter that follows subparagraph
(C); and
(3) by adding at the end the following:
``(D) the Secretary of Housing and Urban
Development determines that the annual income
of the homeowner is no greater than the annual
income established by the Secretary as being of
low- or moderate-income.''.
SEC. 2128. PRE-PURCHASE HOMEOWNERSHIP COUNSELING DEMONSTRATION.
(a) Establishment of Program.--For the period beginning on
the date of enactment of this title and ending on the date that
is 3 years after such date of enactment, the Secretary of
Housing and Urban Development shall establish and conduct a
demonstration program to test the effectiveness of alternative
forms of pre-purchase homeownership counseling for eligible
homebuyers.
(b) Forms of Counseling.--The Secretary of Housing and Urban
Development shall provide to eligible homebuyers pre-purchase
homeownership counseling under this section in the form of--
(1) telephone counseling;
(2) individualized in-person counseling;
(3) web-based counseling;
(4) counseling classes; or
(5) any other form or type of counseling that the
Secretary may, in his discretion, determine
appropriate.
(c) Size of Program.--The Secretary shall make available the
pre-purchase homeownership counseling described in subsection
(b) to not more than 3,000 eligible homebuyers in any given
year.
(d) Incentive To Participate.--The Secretary of Housing and
Urban Development may provide incentives to eligible homebuyers
to participate in the demonstration program established under
subsection (a). Such incentives may include the reduction of
any insurance premium charges owed by the eligible homebuyer to
the Secretary.
(e) Eligible Homebuyer Defined.--For purposes of this section
an ``eligible homebuyer'' means a first-time homebuyer who has
been approved for a home loan with a loan-to-value ratio
between 97 percent and 98.5 percent.
(f) Report to Congress.--The Secretary of Housing and Urban
Development shall report to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representative--
(1) on an annual basis, on the progress and results
of the demonstration program established under
subsection (a); and
(2) for the period beginning on the date of enactment
of this title and ending on the date that is 5 years
after such date of enactment, on the payment history
and delinquency rates of eligible homebuyers who
participated in the demonstration program.
SEC. 2129. FRAUD PREVENTION.
Section 1014 of title 18, United States Code, is amended in
the first sentence--
(1) by inserting ``the Federal Housing
Administration,'' before ``the Farm Credit
Administration''; and
(2) by striking ``commitment, or loan'' and inserting
``commitment, loan, or insurance agreement or
application for insurance or a guarantee''.
SEC. 2130. LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES.
(a) In General.--Notwithstanding any other provision of law,
including any provision of this title and any amendment made by
this title--
(1) for the period beginning on the date of the
enactment of this title and ending on October 1, 2009,
the premiums charged for mortgage insurance under
multifamily housing programs under the National Housing
Act may not be increased above the premium amounts in
effect under such program on October 1, 2006, unless
the Secretary of Housing and Urban Development
determines that, absent such increase, insurance of
additional mortgages under such program would, under
the Federal Credit Reform Act of 1990, require the
appropriation of new budget authority to cover the
costs (as such term is defined in section 502 of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a) of
such insurance; and
(2) a premium increase pursuant to paragraph (1) may
be made only if not less than 30 days prior to such
increase taking effect, the Secretary of Housing and
Urban Development--
(A) notifies the Committee on Banking,
Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the
House of Representatives of such increase; and
(B) publishes notice of such increase in the
Federal Register.
(b) Waiver.--The Secretary of Housing and Urban Development
may waive the 30-day notice requirement under subsection
(a)(2), if the Secretary determines that waiting 30-days before
increasing premiums would cause substantial damage to the
solvency of multifamily housing programs under the National
Housing Act.
SEC. 2131. SAVINGS PROVISION.
Any mortgage insured under title II of the National Housing
Act before the date of enactment of this subtitle shall
continue to be governed by the laws, regulations, orders, and
terms and conditions to which it was subject on the day before
the date of the enactment of this subtitle.
SEC. 2132. IMPLEMENTATION.
The Secretary of Housing and Urban Development shall by
notice establish any additional requirements that may be
necessary to immediately carry out the provisions of this
subtitle. The notice shall take effect upon issuance.
SEC. 2133. MORATORIUM ON IMPLEMENTATION OF RISK-BASED PREMIUMS.
(a) In General.--During the 12-month period beginning on
October 1, 2008, the Secretary of Housing and Urban Development
shall not take any action to implement or carry out risk-based
premiums, which are designed for mortgage lenders to offer
borrowers an FHA-insured product that provides a range of
mortgage insurance premium pricing, based on the risk that the
insurance contract represents, as such planned implementation
was set forth in the Notice published in the Federal Register
on May 13, 2008 (Vol. 73, No. 93, Pages 27703 through 27711)
(effective July 14, 2008).
(b) Insurance of Mortgages Under the National Housing Act.--
During the 12-month period beginning on October 1, 2008, the
Secretary of Housing and Urban Development shall not take any
action to implement or carry out any other risk-based premium
product related to the insurance of any mortgage on a single
family residence under title II of the National Housing Act,
where the premium price for such new product is based in whole
or in part on a borrower's Decision Credit Score, as that term
is defined in the Notice described under subsection (a), or any
successor thereto.
Subtitle B--Manufactured Housing Loan Modernization
SEC. 2141. SHORT TITLE.
This subtitle may be cited as the ``FHA Manufactured Housing
Loan Modernization Act of 2008''.
SEC. 2142. PURPOSES.
The purposes of this subtitle are--
(1) to provide adequate funding for FHA-insured
manufactured housing loans for low- and moderate-income
homebuyers during all economic cycles in the
manufactured housing industry;
(2) to modernize the FHA title I insurance program
for manufactured housing loans to enhance participation
by Ginnie Mae and the private lending markets; and
(3) to adjust the low loan limits for title I
manufactured home loan insurance to reflect the
increase in costs since such limits were last increased
in 1992 and to index the limits to inflation.
SEC. 2143. EXCEPTION TO LIMITATION ON FINANCIAL INSTITUTION PORTFOLIO.
The second sentence of section 2(a) of the National Housing
Act (12 U.S.C. 1703(a)) is amended--
(1) by striking ``In no case'' and inserting ``Other
than in connection with a manufactured home or a lot on
which to place such a home (or both), in no case''; and
(2) by striking ``: Provided, That with'' and
inserting ``. With''.
SEC. 2144. INSURANCE BENEFITS.
(a) In General.--Subsection (b) of section 2 of the National
Housing Act (12 U.S.C. 1703(b)), is amended by adding at the
end the following new paragraph:
``(8) Insurance benefits for manufactured housing
loans.--Any contract of insurance with respect to
loans, advances of credit, or purchases in connection
with a manufactured home or a lot on which to place a
manufactured home (or both) for a financial institution
that is executed under this title after the date of the
enactment of the FHA Manufactured Housing Loan
Modernization Act of 2008 by the Secretary shall be
conclusive evidence of the eligibility of such
financial institution for insurance, and the validity
of any contract of insurance so executed shall be
incontestable in the hands of the bearer from the date
of the execution of such contract, except for fraud or
misrepresentation on the part of such institution.''.
(b) Applicability.--The amendment made by subsection (a)
shall only apply to loans that are registered or endorsed for
insurance after the date of the enactment of this title.
SEC. 2145. MAXIMUM LOAN LIMITS.
(a) Dollar Amounts.--Paragraph (1) of section 2(b) of the
National Housing Act (12 U.S.C. 1703(b)(1)) is amended--
(1) in clause (ii) of subparagraph (A), by striking
``$17,500'' and inserting ``$25,090'';
(2) in subparagraph (C) by striking ``$48,600'' and
inserting ``$69,678'';
(3) in subparagraph (D) by striking ``$64,800'' and
inserting ``$92,904'';
(4) in subparagraph (E) by striking ``$16,200'' and
inserting ``$23,226''; and
(5) by realigning subparagraphs (C), (D), and (E) 2
ems to the left so that the left margins of such
subparagraphs are aligned with the margins of
subparagraphs (A) and (B).
(b) Annual Indexing.--Subsection (b) of section 2 of the
National Housing Act (12 U.S.C. 1703(b)), as amended by the
preceding provisions of this title, is further amended by
adding at the end the following new paragraph:
``(9) Annual indexing of manufactured housing
loans.--The Secretary shall develop a method of
indexing in order to annually adjust the loan limits
established in subparagraphs (A)(ii), (C), (D), and (E)
of this subsection. Such index shall be based on the
manufactured housing price data collected by the United
States Census Bureau. The Secretary shall establish
such index no later than 1 year after the date of the
enactment of the FHA Manufactured Housing Loan
Modernization Act of 2008.''
(c) Technical and Conforming Changes.--Paragraph (1) of
section 2(b) of the National Housing Act (12 U.S.C. 1703(b)(1))
is amended--
(1) by striking ``No'' and inserting ``Except as
provided in the last sentence of this paragraph, no'';
and
(2) by adding after and below subparagraph (G) the
following:
``The Secretary shall, by regulation, annually increase the
dollar amount limitations in subparagraphs (A)(ii), (C), (D),
and (E) (as such limitations may have been previously adjusted
under this sentence) in accordance with the index established
pursuant to paragraph (9).''.
SEC. 2146. INSURANCE PREMIUMS.
Subsection (f) of section 2 of the National Housing Act (12
U.S.C. 1703(f)) is amended--
(1) by inserting ``(1) Premium charges.--'' after
``(f)''; and
(2) by adding at the end the following new paragraph:
``(2) Manufactured Home Loans.--Notwithstanding paragraph
(1), in the case of a loan, advance of credit, or purchase in
connection with a manufactured home or a lot on which to place
such a home (or both), the premium charge for the insurance
granted under this section shall be paid by the borrower under
the loan or advance of credit, as follows:
``(A) At the time of the making of the loan, advance
of credit, or purchase, a single premium payment in an
amount not to exceed 2.25 percent of the amount of the
original insured principal obligation.
``(B) In addition to the premium under subparagraph
(A), annual premium payments during the term of the
loan, advance, or obligation purchased in an amount not
exceeding 1.0 percent of the remaining insured
principal balance (excluding the portion of the
remaining balance attributable to the premium collected
under subparagraph (A) and without taking into account
delinquent payments or prepayments).
``(C) Premium charges under this paragraph shall be
established in amounts that are sufficient, but do not
exceed the minimum amounts necessary, to maintain a
negative credit subsidy for the program under this
section for insurance of loans, advances of credit, or
purchases in connection with a manufactured home or a
lot on which to place such a home (or both), as
determined based upon risk to the Federal Government
under existing underwriting requirements.
``(D) The Secretary may increase the limitations on
premium payments to percentages above those set forth
in subparagraphs (A) and (B), but only if necessary,
and not in excess of the minimum increase necessary, to
maintain a negative credit subsidy as described in
subparagraph (C).''.
SEC. 2147. TECHNICAL CORRECTIONS.
(a) Dates.--Subsection (a) of section 2 of the National
Housing Act (12 U.S.C. 1703(a)) is amended--
(1) by striking ``on and after July 1, 1939,'' each
place such term appears; and
(2) by striking ``made after the effective date of
the Housing Act of 1954''.
(b) Authority of Secretary.--Subsection (c) of section 2 of
the National Housing Act (12 U.S.C. 1703(c)) is amended to read
as follows:
``(c) Handling and Disposal of Property.--
``(1) Authority of secretary.--Notwithstanding any
other provision of law, the Secretary may--
``(A) deal with, complete, rent, renovate,
modernize, insure, or assign or sell at public
or private sale, or otherwise dispose of, for
cash or credit in the Secretary's discretion,
and upon such terms and conditions and for such
consideration as the Secretary shall determine
to be reasonable, any real or personal property
conveyed to or otherwise acquired by the
Secretary, in connection with the payment of
insurance heretofore or hereafter granted under
this title, including any evidence of debt,
contract, claim, personal property, or security
assigned to or held by him in connection with
the payment of insurance heretofore or
hereafter granted under this section; and
``(B) pursue to final collection, by way of
compromise or otherwise, all claims assigned to
or held by the Secretary and all legal or
equitable rights accruing to the Secretary in
connection with the payment of such insurance,
including unpaid insurance premiums owed in
connection with insurance made available by
this title.
``(2) Advertisements for proposals.--Section 3709 of
the Revised Statutes shall not be construed to apply to
any contract of hazard insurance or to any purchase or
contract for services or supplies on account of such
property if the amount thereof does not exceed $25,000.
``(3) Delegation of authority.--The power to convey
and to execute in the name of the Secretary, deeds of
conveyance, deeds of release, assignments and
satisfactions of mortgages, and any other written
instrument relating to real or personal property or any
interest therein heretofore or hereafter acquired by
the Secretary pursuant to the provisions of this title
may be exercised by an officer appointed by the
Secretary without the execution of any express
delegation of power or power of attorney. Nothing in
this subsection shall be construed to prevent the
Secretary from delegating such power by order or by
power of attorney, in the Secretary's discretion, to
any officer or agent the Secretary may appoint.''.
SEC. 2148. REVISION OF UNDERWRITING CRITERIA.
(a) In General.--Subsection (b) of section 2 of the National
Housing Act (12 U.S.C. 1703(b)), as amended by the preceding
provisions of this title, is further amended by adding at the
end the following new paragraph:
``(10) Financial soundness of manufactured housing
program.--The Secretary shall establish such
underwriting criteria for loans and advances of credit
in connection with a manufactured home or a lot on
which to place a manufactured home (or both), including
such loans and advances represented by obligations
purchased by financial institutions, as may be
necessary to ensure that the program under this title
for insurance for financial institutions against losses
from such loans, advances of credit, and purchases is
financially sound.''.
(b) Timing.--Not later than the expiration of the 6-month
period beginning on the date of the enactment of this title,
the Secretary of Housing and Urban Development shall revise the
existing underwriting criteria for the program referred to in
paragraph (10) of section 2(b) of the National Housing Act (as
added by subsection (a) of this section) in accordance with the
requirements of such paragraph.
SEC. 2149. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.
Title I of the National Housing Act is amended by adding at
the end of section 9 the following new section:
``SEC. 10. PROHIBITION AGAINST KICKBACKS AND UNEARNED FEES.
``(a) In General.--Except as provided in subsection (b), the
provisions of sections 3, 8, 16, 17, 18, and 19 of the Real
Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et
seq.) shall apply to each sale of a manufactured home financed
with an FHA-insured loan or extension of credit, as well as to
services rendered in connection with such transactions.
``(b) Authority of the Secretary.--The Secretary is
authorized to determine the manner and extent to which the
provisions of sections 3, 8, 16, 17, 18, and 19 of the Real
Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et
seq.) may reasonably be applied to the transactions described
in subsection (a), and to grant such exemptions as may be
necessary to achieve the purposes of this section.
``(c) Definitions.--For purposes of this section--
``(1) the term `federally related mortgage loan' as
used in sections 3, 8, 16, 17, 18, and 19 of the Real
Estate Settlement Procedures Act of 1974 (12 U.S.C.
2601 et seq.) shall include an FHA-insured loan or
extension of credit made to a borrower for the purpose
of purchasing a manufactured home that the borrower
intends to occupy as a personal residence; and
``(2) the term `real estate settlement service' as
used in sections 3, 8, 16, 17, 18, and 19 of the Real
Estate Settlement Procedures Act of 1974 (12 U.S.C.
2601 et seq.) shall include any service rendered in
connection with a loan or extension of credit insured
by the Federal Housing Administration for the purchase
of a manufactured home.
``(d) Unfair and Deceptive Practices.--In connection with the
purchase of a manufactured home financed with a loan or
extension of credit insured by the Federal Housing
Administration under this title, the Secretary shall prohibit
acts or practices in connection with loans or extensions of
credit that the Secretary finds to be unfair, deceptive, or
otherwise not in the interests of the borrower.''.
SEC. 2150. LEASEHOLD REQUIREMENTS.
Subsection (b) of section 2 of the National Housing Act (12
U.S.C. 1703(b)), as amended by the preceding provisions of this
title, is further amended by adding at the end the following
new paragraph:
``(11) Leasehold requirements.--No insurance shall be
granted under this section to any such financial
institution with respect to any obligation representing
any such loan, advance of credit, or purchase by it,
made for the purposes of financing a manufactured home
which is intended to be situated in a manufactured home
community pursuant to a lease, unless such lease--
``(A) expires not less than 3 years after the
origination date of the obligation;
``(B) is renewable upon the expiration of the
original 3 year term by successive 1 year
terms; and
``(C) requires the lessor to provide the
lessee written notice of termination of the
lease not less than 180 days prior to the
expiration of the current lease term in the
event the lessee is required to move due to the
closing of the manufactured home community, and
further provides that failure to provide such
notice to the mortgagor in a timely manner will
cause the lease term, at its expiration, to
automatically renew for an additional 1 year
term.''.
TITLE II--MORTGAGE FORECLOSURE PROTECTIONS FOR SERVICEMEMBERS
SEC. 2201. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT FOR
CERTAIN HOUSING LOANS GUARANTEED BY THE SECRETARY
OF VETERANS AFFAIRS.
Notwithstanding subparagraph (C) of section 3703(a)(1) of
title 38, United States Code, for purposes of any loan
described in subparagraph (A)(i)(IV) of such section that is
originated during the period beginning on the date of the
enactment of this Act and ending on December 31, 2008, the term
``maximum guaranty amount'' shall mean an amount equal to 25
percent of the higher of--
(1) the limitation determined under section 305(a)(2)
of the Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1454(a)(2)) for the calendar year in which the
loan is originated for a single-family residence; or
(2) 125 percent of the area median price for a
single-family residence, but in no case to exceed 175
percent of the limitation determined under such section
305(a)(2) for the calendar year in which the loan is
originated for a single-family residence.
SEC. 2202. COUNSELING ON MORTGAGE FORECLOSURES FOR MEMBERS OF THE ARMED
FORCES RETURNING FROM SERVICE ABROAD.
(a) In General.--The Secretary of Defense shall develop and
implement a program to advise members of the Armed Forces
(including members of the National Guard and Reserve) who are
returning from service on active duty abroad (including service
in Operation Iraqi Freedom and Operation Enduring Freedom) on
actions to be taken by such members to prevent or forestall
mortgage foreclosures.
(b) Elements.--The program required by subsection (a) shall
include the following:
(1) Credit counseling.
(2) Home mortgage counseling.
(3) Such other counseling and information as the
Secretary considers appropriate for purposes of the
program.
(c) Timing of Provision of Counseling.--Counseling and other
information under the program required by subsection (a) shall
be provided to a member of the Armed Forces covered by the
program as soon as practicable after the return of the member
from service as described in subsection (a).
SEC. 2203. ENHANCEMENT OF PROTECTIONS FOR SERVICEMEMBERS RELATING TO
MORTGAGES AND MORTGAGE FORECLOSURES.
(a) Extension of Period of Protections Against Mortgage
Foreclosures.--
(1) Extension of protection period.--Subsection (c)
of section 303 of the Servicemembers Civil Relief Act
(50 U.S.C. App. 533) is amended by striking ``90 days''
and inserting ``9 months''.
(2) Extension of stay of proceedings period.--
Subsection (b) of such section is amended by striking
``90 days'' and inserting ``9 months''.
(b) Treatment of Mortgages as Obligations Subject to Interest
Rate Limitation.--Section 207 of the Servicemembers Civil
Relief Act (50 U.S.C. App. 527) is amended--
(1) in subsection (a)(1), by striking ``in excess of
6 percent'' the second place it appears and all that
follows and inserting ``in excess of 6 percent--
``(A) during the period of military service
and one year thereafter, in the case of an
obligation or liability consisting of a
mortgage, trust deed, or other security in the
nature of a mortgage; or
``(B) during the period of military service,
in the case of any other obligation or
liability.''; and
(2) by striking subsection (d) and inserting the
following new subsection:
``(d) Definitions.--In this section:
``(1) Interest.--The term `interest' includes service
charges, renewal charges, fees, or any other charges
(except bona fide insurance) with respect to an
obligation or liability.
``(2) Obligation or liability.--The term `obligation
or liability' includes an obligation or liability
consisting of a mortgage, trust deed, or other security
in the nature of a mortgage.''.
(c) Effective Date; Sunset.--
(1) Effective date.--The amendment made by subsection
(a) shall take effect on the date of enactment of this
Act.
(2) Sunset.--The amendments made by subsection (a)
shall expire on December 31, 2010. Effective January 1,
2011, the provisions of subsections (b) and (c) of
section 303 of the Servicemembers Civil Relief Act, as
in effect on the day before the date of the enactment
of this Act, are hereby revived.
TITLE III--EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND
FORECLOSED HOMES
SEC. 2301. EMERGENCY ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND
FORECLOSED HOMES.
(a) Direct Appropriations.--There are appropriated out of any
money in the Treasury not otherwise appropriated for the fiscal
year 2008, $4,000,000,000, to remain available until expended,
for assistance to States and units of general local government
(as such terms are defined in section 102 of the Housing and
Community Development Act of 1974 (42 U.S.C. 5302)) for the
redevelopment of abandoned and foreclosed upon homes and
residential properties.
(b) Allocation of Appropriated Amounts.--
(1) In general.--The amounts appropriated or
otherwise made available to States and units of general
local government under this section shall be allocated
based on a funding formula established by the Secretary
of Housing and Urban Development (in this title
referred to as the ``Secretary'').
(2) Formula to be devised swiftly.--The funding
formula required under paragraph (1) shall be
established not later than 60 days after the date of
enactment of this section.
(3) Criteria.--The funding formula required under
paragraph (1) shall ensure that any amounts
appropriated or otherwise made available under this
section are allocated to States and units of general
local government with the greatest need, as such need
is determined in the discretion of the Secretary based
on--
(A) the number and percentage of home
foreclosures in each State or unit of general
local government;
(B) the number and percentage of homes
financed by a subprime mortgage related loan in
each State or unit of general local government;
and
(C) the number and percentage of homes in
default or delinquency in each State or unit of
general local government.
(4) Distribution.--Amounts appropriated or otherwise
made available under this section shall be distributed
according to the funding formula established by the
Secretary under paragraph (1) not later than 30 days
after the establishment of such formula.
(c) Use of Funds.--
(1) In general.--Any State or unit of general local
government that receives amounts pursuant to this
section shall, not later than 18 months after the
receipt of such amounts, use such amounts to purchase
and redevelop abandoned and foreclosed homes and
residential properties.
(2) Priority.--Any State or unit of general local
government that receives amounts pursuant to this
section shall in distributing such amounts give
priority emphasis and consideration to those
metropolitan areas, metropolitan cities, urban areas,
rural areas, low- and moderate-income areas, and other
areas with the greatest need, including those--
(A) with the greatest percentage of home
foreclosures;
(B) with the highest percentage of homes
financed by a subprime mortgage related loan;
and
(C) identified by the State or unit of
general local government as likely to face a
significant rise in the rate of home
foreclosures.
(3) Eligible uses.--Amounts made available under this
section may be used to--
(A) establish financing mechanisms for
purchase and redevelopment of foreclosed upon
homes and residential properties, including
such mechanisms as soft-seconds, loan loss
reserves, and shared-equity loans for low- and
moderate-income homebuyers;
(B) purchase and rehabilitate homes and
residential properties that have been abandoned
or foreclosed upon, in order to sell, rent, or
redevelop such homes and properties;
(C) establish land banks for homes that have
been foreclosed upon;
(D) demolish blighted structures; and
(E) redevelop demolished or vacant
properties.
(d) Limitations.--
(1) On purchases.--Any purchase of a foreclosed upon
home or residential property under this section shall
be at a discount from the current market appraised
value of the home or property, taking into account its
current condition, and such discount shall ensure that
purchasers are paying below-market value for the home
or property.
(2) Rehabilitation.--Any rehabilitation of a
foreclosed-upon home or residential property under this
section shall be to the extent necessary to comply with
applicable laws, codes, and other requirements relating
to housing safety, quality, and habitability, in order
to sell, rent, or redevelop such homes and properties.
Rehabilitation may include improvements to increase the
energy efficiency or conservation of such homes and
properties or provide a renewable energy source or
sources for such homes and properties.
(3) Sale of homes.--If an abandoned or foreclosed
upon home or residential property is purchased,
redeveloped, or otherwise sold to an individual as a
primary residence, then such sale shall be in an amount
equal to or less than the cost to acquire and redevelop
or rehabilitate such home or property up to a decent,
safe, and habitable condition.
(4) Reinvestment of profits.--
(A) Profits from sales, rentals, and
redevelopment.--
(i) 5-year reinvestment period.--
During the 5-year period following the
date of enactment of this Act, any
revenue generated from the sale,
rental, redevelopment, rehabilitation,
or any other eligible use that is in
excess of the cost to acquire and
redevelop (including reasonable
development fees) or rehabilitate an
abandoned or foreclosed upon home or
residential property shall be provided
to and used by the State or unit of
general local government in accordance
with, and in furtherance of, the intent
and provisions of this section.
(ii) Deposits in the treasury.--
(I) Profits.--Upon the
expiration of the 5-year period
set forth under clause (i), any
revenue generated from the
sale, rental, redevelopment,
rehabilitation, or any other
eligible use that is in excess
of the cost to acquire and
redevelop (including reasonable
development fees) or
rehabilitate an abandoned or
foreclosed upon home or
residential property shall be
deposited in the Treasury of
the United States as
miscellaneous receipts, unless
the Secretary approves a
request to use the funds for
purposes under this Act.
(II) Other amounts.--Upon the
expiration of the 5-year period
set forth under clause (i), any
other revenue not described
under subclause (I) generated
from the sale, rental,
redevelopment, rehabilitation,
or any other eligible use of an
abandoned or foreclosed upon
home or residential property
shall be deposited in the
Treasury of the United States
as miscellaneous receipts.
(B) Other revenues.--Any revenue generated
under subparagraphs (A), (C) or (D) of
subsection (c)(3) shall be provided to and used
by the State or unit of general local
government in accordance with, and in
furtherance of, the intent and provisions of
this section.
(e) Rules of Construction.--
(1) In general.--Except as otherwise provided by this
section, amounts appropriated, revenues generated, or
amounts otherwise made available to States and units of
general local government under this section shall be
treated as though such funds were community development
block grant funds under title I of the Housing and
Community Development Act of 1974 (42 U.S.C. 5301 et
seq.).
(2) No match.--No matching funds shall be required in
order for a State or unit of general local government
to receive any amounts under this section.
(f) Authority to Specify Alternative Requirements.--
(1) In general.--In administering any amounts
appropriated or otherwise made available under this
section, the Secretary may specify alternative
requirements to any provision under title I of the
Housing and Community Development Act of 1974 (except
for those related to fair housing, nondiscrimination,
labor standards, and the environment) in accordance
with the terms of this section and for the sole purpose
of expediting the use of such funds.
(2) Notice.--The Secretary shall provide written
notice of its intent to exercise the authority to
specify alternative requirements under paragraph (1) to
the Committee on Banking, Housing and Urban Affairs of
the Senate and the Committee on Financial Services of
the House of Representatives not later than 10 business
days before such exercise of authority is to occur.
(3) Low and moderate income requirement.--
(A) In general.--Notwithstanding the
authority of the Secretary under paragraph
(1)--
(i) all of the funds appropriated or
otherwise made available under this
section shall be used with respect to
individuals and families whose income
does not exceed 120 percent of area
median income; and
(ii) not less than 25 percent of the
funds appropriated or otherwise made
available under this section shall be
used for the purchase and redevelopment
of abandoned or foreclosed upon homes
or residential properties that will be
used to house individuals or families
whose incomes do not exceed 50 percent
of area median income.
(B) Recurrent requirement.--The Secretary
shall, by rule or order, ensure, to the maximum
extent practicable and for the longest feasible
term, that the sale, rental, or redevelopment
of abandoned and foreclosed upon homes and
residential properties under this section
remain affordable to individuals or families
described in subparagraph (A).
(g) Periodic Audits.--In consultation with the Secretary of
Housing and Urban Development, the Comptroller General of the
United States shall conduct periodic audits to ensure that
funds appropriated, made available, or otherwise distributed
under this section are being used in a manner consistent with
the criteria provided in this section.
SEC. 2302. NATIONWIDE DISTRIBUTION OF RESOURCES.
Notwithstanding any other provision of this Act or the
amendments made by this Act, each State shall receive not less
than 0.5 percent of funds made available under section 2301
(relating to emergency assistance for the redevelopment of
abandoned and foreclosed homes).
SEC. 2303. LIMITATION ON USE OF FUNDS WITH RESPECT TO EMINENT DOMAIN.
No State or unit of general local government may use any
amounts received pursuant to section 2301 to fund any project
that seeks to use the power of eminent domain, unless eminent
domain is employed only for a public use: Provided, That for
purposes of this section, public use shall not be construed to
include economic development that primarily benefits private
entities.
SEC. 2304. LIMITATION ON DISTRIBUTION OF FUNDS.
(a) In General.--None of the funds made available under this
title or title IV shall be distributed to--
(1) an organization which has been indicted for a
violation under Federal law relating to an election for
Federal office; or
(2) an organization which employs applicable
individuals.
(b) Applicable Individuals Defined.--In this section, the
term ``applicable individual'' means an individual who--
(1) is--
(A) employed by the organization in a
permanent or temporary capacity;
(B) contracted or retained by the
organization; or
(C) acting on behalf of, or with the express
or apparent authority of, the organization; and
(2) has been indicted for a violation under Federal
law relating to an election for Federal office.
SEC. 2305. COUNSELING INTERMEDIARIES.
Notwithstanding any other provision of this Act, the amount
appropriated under section 2301(a) of this Act shall be
$3,920,000,000 and the amount appropriated under section 2401
of this Act shall be $180,000,000: Provided, That of the amount
appropriated under section 2401 of this Act pursuant to this
section, not less than 15 percent shall be provided to
counseling organizations that target counseling services
regarding loss mitigation to minority and low-income homeowners
or provide such services in neighborhoods with high
concentrations of minority and low-income homeowners: Provided
further, That of amounts appropriated under such section 2401
$30,000,000 shall be used by the Neighborhood Reinvestment
Corporation (referred to in this section as the ``NRC'') to
make grants to counseling intermediaries approved by the
Department of Housing and Urban Development or the NRC to hire
attorneys to assist homeowners who have legal issues directly
related to the homeowner's foreclosure, delinquency or short
sale. Such attorneys shall be capable of assisting homeowners
of owner-occupied homes with mortgages in default, in danger of
default, or subject to or at risk of foreclosure and who have
legal issues that cannot be handled by counselors already
employed by such intermediaries: Provided further, That of the
amounts provided for in the prior provisos the NRC shall give
priority consideration to counseling intermediaries and legal
organizations that (1) provide legal assistance in the 100
metropolitan statistical areas (as defined by the Director of
the Office of Management and Budget) with the highest home
foreclosure rates, and (2) have the capacity to begin using the
financial assistance within 90 days after receipt of the
assistance: Provided further, That no funds provided under this
Act shall be used to provide, obtain, or arrange on behalf of a
homeowner, legal representation involving or for the purposes
of civil litigation: Provided further, That the NRC, in
awarding counseling grants under section 2401 of this Act, may
consider, where appropriate, whether the entity has implemented
a written plan for providing in-person counseling and for
making contact, including personal contact, with defaulted
mortgagors, for the purpose of providing counseling or
providing information about available counseling.
TITLE IV--HOUSING COUNSELING RESOURCES
SEC. 2401. HOUSING COUNSELING RESOURCES.
There are appropriated out of any money in the Treasury not
otherwise appropriated for the fiscal year 2008, for an
additional amount for the ``Neighborhood Reinvestment
Corporation--Payment to the Neighborhood Reinvestment
Corporation'' $100,000,000, to remain available until December
31, 2008, for foreclosure mitigation activities under the terms
and conditions contained in the second undesignated paragraph
(beginning with the phrase ``For an additional amount'') under
the heading ``Neighborhood Reinvestment Corporation--Payment to
the Neighborhood Reinvestment Corporation'' of Public Law 110-
161.
SEC. 2402. CREDIT COUNSELING.
(a) In General.--Entities approved by the Neighborhood
Reinvestment Corporation or the Secretary and State housing
finance entities receiving funds under this title shall work to
identify and coordinate with non-profit organizations operating
national or statewide toll-free foreclosure prevention
hotlines, including those that--
(1) serve as a consumer referral source and data
repository for borrowers experiencing some form of
delinquency or foreclosure;
(2) connect callers with local housing counseling
agencies approved by the Neighborhood Reinvestment
Corporation or the Secretary to assist with working out
a positive resolution to their mortgage delinquency or
foreclosure; or
(3) facilitate or offer free assistance to help
homeowners to understand their options, negotiate
solutions, and find the best resolution for their
particular circumstances.
TITLE V--MORTGAGE DISCLOSURE IMPROVEMENT ACT
SEC. 2501. SHORT TITLE.
This title may be cited as the ``Mortgage Disclosure
Improvement Act of 2008''.
SEC. 2502. ENHANCED MORTGAGE LOAN DISCLOSURES.
(a) Truth in Lending Act Disclosures.--Section 128(b)(2) of
the Truth in Lending Act (15 U.S.C. 1638(b)(2)) is amended--
(1) by inserting ``(A)'' before ``In the'';
(2) by striking ``a residential mortgage transaction,
as defined in section 103(w)'' and inserting ``any
extension of credit that is secured by the dwelling of
a consumer'';
(3) by striking ``before the credit is extended, or''
and inserting ``and'';
(4) by inserting ``, which shall be at least 7
business days before consummation of the transaction''
after ``written application'';
(5) by striking ``, whichever is earlier''; and
(6) by striking ``If the'' and all that follows
through the end of the paragraph and inserting the
following:
``(B) In the case of an extension of credit that is
secured by the dwelling of a consumer, the disclosures
provided under subparagraph (A), shall be in addition
to the other disclosures required by subsection (a),
and shall--
``(i) state in conspicuous type size and
format, the following: `You are not required to
complete this agreement merely because you have
received these disclosures or signed a loan
application.'; and
``(ii) be provided in the form of final
disclosures at the time of consummation of the
transaction, in the form and manner prescribed
by this section.
``(C) In the case of an extension of credit that is
secured by the dwelling of a consumer, under which the
annual rate of interest is variable, or with respect to
which the regular payments may otherwise be variable,
in addition to the other disclosures required by
subsection (a), the disclosures provided under this
subsection shall do the following:
``(i) Label the payment schedule as follows:
`Payment Schedule: Payments Will Vary Based on
Interest Rate Changes'.
``(ii) State in conspicuous type size and
format examples of adjustments to the regular
required payment on the extension of credit
based on the change in the interest rates
specified by the contract for such extension of
credit. Among the examples required to be
provided under this clause is an example that
reflects the maximum payment amount of the
regular required payments on the extension of
credit, based on the maximum interest rate
allowed under the contract, in accordance with
the rules of the Board. Prior to issuing any
rules pursuant to this clause, the Board shall
conduct consumer testing to determine the
appropriate format for providing the
disclosures required under this subparagraph to
consumers so that such disclosures can be
easily understood, including the fact that the
initial regular payments are for a specific
time period that will end on a certain date,
that payments will adjust afterwards
potentially to a higher amount, and that there
is no guarantee that the borrower will be able
to refinance to a lower amount.
``(D) In any case in which the disclosure statement
under subparagraph (A) contains an annual percentage
rate of interest that is no longer accurate, as
determined under section 107(c), the creditor shall
furnish an additional, corrected statement to the
borrower, not later than 3 business days before the
date of consummation of the transaction.
``(E) The consumer shall receive the disclosures
required under this paragraph before paying any fee to
the creditor or other person in connection with the
consumer's application for an extension of credit that
is secured by the dwelling of a consumer. If the
disclosures are mailed to the consumer, the consumer is
considered to have received them 3 business days after
they are mailed. A creditor or other person may impose
a fee for obtaining the consumer's credit report before
the consumer has received the disclosures under this
paragraph, provided the fee is bona fide and reasonable
in amount.
``(F) Waiver of timeliness of disclosures.--To
expedite consummation of a transaction, if the consumer
determines that the extension of credit is needed to
meet a bona fide personal financial emergency, the
consumer may waive or modify the timing requirements
for disclosures under subparagraph (A), provided that--
``(i) the term `bona fide personal emergency'
may be further defined in regulations issued by
the Board;
``(ii) the consumer provides to the creditor
a dated, written statement describing the
emergency and specifically waiving or modifying
those timing requirements, which statement
shall bear the signature of all consumers
entitled to receive the disclosures required by
this paragraph; and
``(iii) the creditor provides to the
consumers at or before the time of such waiver
or modification, the final disclosures required
by paragraph (1).
``(G) The requirements of subparagraphs (B), (C), (D)
and (E) shall not apply to extensions of credit
relating to plans described in section 101(53D) of
title 11, United States Code.''.
(b) Civil Liability.--Section 130(a) of the Truth in Lending
Act (15 U.S.C. 1640(a)) is amended--
(1) in paragraph (2)(A)(iii), by striking ``not less
than $200 or greater than $2,000'' and inserting ``not
less than $400 or greater than $4,000''; and
(2) in the penultimate sentence of the undesignated
matter following paragraph (4)--
(A) by inserting ``or section
128(b)(2)(C)(ii),'' after ``128(a),''; and
(B) by inserting ``or section
128(b)(2)(C)(ii)'' before the period.
(c) Effective Dates.--
(1) General disclosures.--Except as provided in
paragraph (2), the amendments made by subsection (a)
shall become effective 12 months after the date of
enactment of this Act.
(2) Variable interest rates.--Subparagraph (C) of
section 128(b)(2) of the Truth in Lending Act (15
U.S.C. 1638(b)(2)(C)), as added by subsection (a) of
this section, shall become effective on the earlier
of--
(A) the compliance date established by the
Board for such purpose, by regulation; or
(B) 30 months after the date of enactment of
this Act.
SEC. 2503. COMMUNITY DEVELOPMENT INVESTMENT AUTHORITY FOR DEPOSITORY
INSTITUTIONS.
(a) National Banks.--The first sentence of the paragraph
designated as the ``Eleventh'' of section 5136 of the Revised
Statutes of the United States (12 U.S.C. 24) is amended by
striking ``promotes the public welfare by benefitting
primarily'' and inserting ``is designed primarily to promote
the public welfare, including the welfare of''.
(b) State Member Banks.--The first sentence of the 23rd
paragraph of section 9 of the Federal Reserve Act (12 U.S.C.
338a) is amended by striking ``promotes the public welfare by
benefitting primarily'' and inserting ``is designed primarily
to promote the public welfare, including the welfare of''.
TITLE VI--VETERANS HOUSING MATTERS
SEC. 2601. HOME IMPROVEMENTS AND STRUCTURAL ALTERATIONS FOR TOTALLY
DISABLED MEMBERS OF THE ARMED FORCES BEFORE
DISCHARGE OR RELEASE FROM THE ARMED FORCES.
Section 1717 of title 38, United States Code, is amended by
adding at the end the following new subsection:
``(d)(1) In the case of a member of the Armed Forces who, as
determined by the Secretary, has a disability permanent in
nature incurred or aggravated in the line of duty in the active
military, naval, or air service, the Secretary may furnish
improvements and structural alterations for such member for
such disability or as otherwise described in subsection (a)(2)
while such member is hospitalized or receiving outpatient
medical care, services, or treatment for such disability if the
Secretary determines that such member is likely to be
discharged or released from the Armed Forces for such
disability.
``(2) The furnishing of improvements and alterations under
paragraph (1) in connection with the furnishing of medical
services described in subparagraph (A) or (B) of subsection
(a)(2) shall be subject to the limitation specified in the
applicable subparagraph.''.
SEC. 2602. ELIGIBILITY FOR SPECIALLY ADAPTED HOUSING BENEFITS AND
ASSISTANCE FOR MEMBERS OF THE ARMED FORCES WITH
SERVICE-CONNECTED DISABILITIES AND INDIVIDUALS
RESIDING OUTSIDE THE UNITED STATES.
(a) Eligibility.--Chapter 21 of title 38, United States Code,
is amended by inserting after section 2101 the following new
section:
``Sec. 2101A. Eligibility for benefits and assistance: members of the
Armed Forces with service-connected disabilities;
individuals residing outside the United States
``(a) Members With Service-Connected Disabilities.--(1) The
Secretary may provide assistance under this chapter to a member
of the Armed Forces serving on active duty who is suffering
from a disability that meets applicable criteria for benefits
under this chapter if the disability is incurred or aggravated
in line of duty in the active military, naval, or air service.
Such assistance shall be provided to the same extent as
assistance is provided under this chapter to veterans eligible
for assistance under this chapter and subject to the same
requirements as veterans under this chapter.
``(2) For purposes of this chapter, any reference to a
veteran or eligible individual shall be treated as a reference
to a member of the Armed Forces described in subsection (a) who
is similarly situated to the veteran or other eligible
individual so referred to.
``(b) Benefits and Assistance for Individuals Residing
Outside the United States.--(1) Subject to paragraph (2), the
Secretary may, at the Secretary's discretion, provide benefits
and assistance under this chapter (other than benefits under
section 2106 of this title) to any individual otherwise
eligible for such benefits and assistance who resides outside
the United States.
``(2) The Secretary may provide benefits and assistance to an
individual under paragraph (1) only if--
``(A) the country or political subdivision in which
the housing or residence involved is or will be located
permits the individual to have or acquire a beneficial
property interest (as determined by the Secretary) in
such housing or residence; and
``(B) the individual has or will acquire a beneficial
property interest (as so determined) in such housing or
residence.
``(c) Regulations.--Benefits and assistance under this
chapter by reason of this section shall be provided in
accordance with such regulations as the Secretary may
prescribe.''.
(b) Conforming Amendments.--
(1) Repeal of superseded authority.--Section 2101 of
title 38, United States Code, is amended--
(A) by striking subsection (c); and
(B) by redesignating subsection (d) as
subsection (c).
(2) Limitations on assistance.--Section 2102 of title
38, United States Code, is amended--
(A) in subsection (a)--
(i) by striking ``veteran'' each
place it appears and inserting
``individual''; and
(ii) in paragraph (3), by striking
``veteran's'' and inserting
``individual's'';
(B) in subsection (b)(1), by striking ``a
veteran'' and inserting ``an individual'';
(C) in subsection (c)--
(i) by striking ``a veteran'' and
inserting ``an individual''; and
(ii) by striking ``the veteran'' each
place it appears and inserting ``the
individual''; and
(D) in subsection (d), by striking ``a
veteran'' each place it appears and inserting
``an individual''.
(3) Assistance for individuals temporarily residing
in housing of family member.--Section 2102A of title
38, United States Code, is amended--
(A) by striking ``veteran'' each place it
appears (other than in subsection (b)) and
inserting ``individual'';
(B) in subsection (a), by striking
``veteran's'' each place it appears and
inserting ``individual's''; and
(C) in subsection (b), by striking ``a
veteran'' each place it appears and inserting
``an individual''.
(4) Furnishing of plans and specifications.--Section
2103 of title 38, United States Code, is amended by
striking ``veterans'' both places it appears and
inserting ``individuals''.
(5) Construction of benefits.--Section 2104 of title
38, United States Code, is amended--
(A) in subsection (a), by striking
``veteran'' each place it appears and inserting
``individual''; and
(B) in subsection (b)--
(i) in the first sentence, by
striking ``A veteran'' and inserting
``An individual'';
(ii) in the second sentence, by
striking ``a veteran'' and inserting
``an individual''; and
(iii) by striking ``such veteran''
each place it appears and inserting
``such individual''.
(6) Veterans' mortgage life insurance.--Section 2106
of title 38, United States Code, is amended--
(A) in subsection (a)--
(i) by striking ``any eligible
veteran'' and inserting ``any eligible
individual''; and
(ii) by striking ``the veterans' ''
and inserting ``the individual's'';
(B) in subsection (b), by striking ``an
eligible veteran'' and inserting ``an eligible
individual'';
(C) in subsection (e), by striking ``an
eligible veteran'' and inserting ``an
individual'';
(D) in subsection (h), by striking ``each
veteran'' and inserting ``each individual'';
(E) in subsection (i), by striking ``the
veteran's'' each place it appears and inserting
``the individual's'';
(F) by striking ``the veteran'' each place it
appears and inserting ``the individual''; and
(G) by striking ``a veteran'' each place it
appears and inserting ``an individual''.
(7) Heading amendments.--(A) The heading of section
2101 of title 38, United States Code, is amended to
read as follows:
``Sec. 2101. Acquisition and adaptation of housing: eligible
veterans''.
(B) The heading of section 2102A of such title is
amended to read as follows:
``Sec. 2102A. Assistance for individuals residing temporarily in
housing owned by a family member''.
(8) Clerical amendments.--The table of sections at
the beginning of chapter 21 of title 38, United States
Code, is amended--
(A) by striking the item relating to section
2101 and inserting the following new item:
``2101. Acquisition and adaptation of housing: eligible veterans.'';
(B) by inserting after the item relating to
section 2101, as so amended, the following new
item:
``2101A. Eligibility for benefits and assistance: members of the Armed
Forces with service-connected disabilities; individuals
residing outside the United States.'';
and
(C) by striking the item relating to section
2102A and inserting the following new item:
``2102A. Assistance for individuals residing temporarily in housing
owned by a family member.''.
SEC. 2603. SPECIALLY ADAPTED HOUSING ASSISTANCE FOR INDIVIDUALS WITH
SEVERE BURN INJURIES.
Section 2101 of title 38, United States Code, is amended--
(1) in subsection (a)(2), by adding at the end the
following new subparagraph:
``(E) The disability is due to a severe burn injury
(as determined pursuant to regulations prescribed by
the Secretary).''; and
(2) in subsection (b)(2)--
(A) by striking ``either'' and inserting
``any''; and
(B) by adding at the end the following new
subparagraph:
``(C) The disability is due to a severe burn injury
(as so determined).''.
SEC. 2604. EXTENSION OF ASSISTANCE FOR INDIVIDUALS RESIDING TEMPORARILY
IN HOUSING OWNED BY A FAMILY MEMBER.
Section 2102A(e) of title 38, United States Code, is amended
by striking ``after the end of the five-year period that begins
on the date of the enactment of the Veterans' Housing
Opportunity and Benefits Improvement Act of 2006'' and
inserting ``after December 31, 2011''.
SEC. 2605. INCREASE IN SPECIALLY ADAPTED HOUSING BENEFITS FOR DISABLED
VETERANS.
(a) In General.--Section 2102 of title 38, United States
Code, is amended--
(1) in subsection (b)(2), by striking ``$10,000'' and
inserting ``$12,000'';
(2) in subsection (d)--
(A) in paragraph (1), by striking ``$50,000''
and inserting ``$60,000''; and
(B) in paragraph (2), by striking ``$10,000''
and inserting ``$12,000''; and
(3) by adding at the end the following new
subsection:
``(e)(1) Effective on October 1 of each year (beginning in
2009), the Secretary shall increase the amounts described in
subsection (b)(2) and paragraphs (1) and (2) of subsection (d)
in accordance with this subsection.
``(2) The increase in amounts under paragraph (1) to take
effect on October 1 of a year shall be by an amount of such
amounts equal to the percentage by which--
``(A) the residential home cost-of-construction index
for the preceding calendar year, exceeds
``(B) the residential home cost-of-construction index
for the year preceding the year described in
subparagraph (A).
``(3) The Secretary shall establish a residential home cost-
of-construction index for the purposes of this subsection. The
index shall reflect a uniform, national average change in the
cost of residential home construction, determined on a calendar
year basis. The Secretary may use an index developed in the
private sector that the Secretary determines is appropriate for
purposes of this subsection.''.
(b) Effective Date.--The amendments made by this section
shall take effect on July 1, 2008, and shall apply with respect
to payments made in accordance with section 2102 of title 38,
United States Code, on or after that date.
SEC. 2606. REPORT ON SPECIALLY ADAPTED HOUSING FOR DISABLED
INDIVIDUALS.
(a) In General.--Not later than December 31, 2008, the
Secretary of Veterans Affairs shall submit to the Committee on
Veterans' Affairs of the Senate and the Committee on Veterans'
Affairs of the House of Representatives a report that contains
an assessment of the adequacy of the authorities available to
the Secretary under law to assist eligible disabled individuals
in acquiring--
(1) suitable housing units with special fixtures or
movable facilities required for their disabilities, and
necessary land therefor;
(2) such adaptations to their residences as are
reasonably necessary because of their disabilities; and
(3) residences already adapted with special features
determined by the Secretary to be reasonably necessary
as a result of their disabilities.
(b) Focus on Particular Disabilities.--The report required by
subsection (a) shall set forth a specific assessment of the
needs of--
(1) veterans who have disabilities that are not
described in subsections (a)(2) and (b)(2) of section
2101 of title 38, United States Code; and
(2) other disabled individuals eligible for specially
adapted housing under chapter 21 of such title by
reason of section 2101A of such title (as added by
section 2602(a) of this Act) who have disabilities that
are not described in such subsections.
SEC. 2607. REPORT ON SPECIALLY ADAPTED HOUSING ASSISTANCE FOR
INDIVIDUALS WHO RESIDE IN HOUSING OWNED BY A FAMILY
MEMBER ON PERMANENT BASIS.
Not later than December 31, 2008, the Secretary of Veterans
Affairs shall submit to the Committee on Veterans' Affairs of
the Senate and the Committee on Veterans' Affairs of the House
of Representatives a report on the advisability of providing
assistance under section 2102A of title 38, United States Code,
to veterans described in subsection (a) of such section, and to
members of the Armed Forces covered by such section 2102A by
reason of section 2101A of title 38, United States Code (as
added by section 2602(a) of this Act), who reside with family
members on a permanent basis.
SEC. 2608. DEFINITION OF ANNUAL INCOME FOR PURPOSES OF SECTION 8 AND
OTHER PUBLIC HOUSING PROGRAMS.
Section 3(b)(4) of the United States Housing Act of 1937 (42
U.S.C. 1437a(3)(b)(4)) is amended by inserting ``or any
deferred Department of Veterans Affairs disability benefits
that are received in a lump sum amount or in prospective
monthly amounts'' before ``may not be considered''.
SEC. 2609. PAYMENT OF TRANSPORTATION OF BAGGAGE AND HOUSEHOLD EFFECTS
FOR MEMBERS OF THE ARMED FORCES WHO RELOCATE DUE TO
FORECLOSURE OF LEASED HOUSING.
Section 406 of title 37, United States Code, is amended--
(1) by redesignating subsections (k) and (l) as
subsections (l) and (m), respectively; and
(2) by inserting after subsection (j) the following
new subsection (k):
``(k) A member of the armed forces who relocates from leased
or rental housing by reason of the foreclosure of such housing
is entitled to transportation of baggage and household effects
under subsection (b)(1) in the same manner, and subject to the
same conditions and limitations, as similarly circumstanced
members entitled to transportation of baggage and household
effects under that subsection.''.
TITLE VII--SMALL PUBLIC HOUSING AUTHORITIES PAPERWORK REDUCTION ACT
SEC. 2701. SHORT TITLE.
This title may be cited as the ``Small Public Housing
Authorities Paperwork Reduction Act''.
SEC. 2702. PUBLIC HOUSING AGENCY PLANS FOR CERTAIN QUALIFIED PUBLIC
HOUSING AGENCIES.
(a) In General.--Section 5A(b) of the United States Housing
Act of 1937 (42 U.S.C. 1437c-1(b)) is amended by adding at the
end the following:
``(3) Exemption of certain phas from filing
requirement.--
``(A) In general.--Notwithstanding paragraph
(1) or any other provision of this Act--
``(i) the requirement under paragraph
(1) shall not apply to any qualified
public housing agency; and
``(ii) except as provided in
subsection (e)(4)(B), any reference in
this section or any other provision of
law to a `public housing agency' shall
not be considered to refer to any
qualified public housing agency, to the
extent such reference applies to the
requirement to submit an annual public
housing agency plan under this
subsection.
``(B) Civil rights certification.--
Notwithstanding that qualified public housing
agencies are exempt under subparagraph (A) from
the requirement under this section to prepare
and submit an annual public housing plan, each
qualified public housing agency shall, on an
annual basis, make the certification described
in paragraph (16) of subsection (d), except
that for purposes of such qualified public
housing agencies, such paragraph shall be
applied by substituting `the public housing
program of the agency' for `the public housing
agency plan'.
``(C) Definition.--For purposes of this
section, the term `qualified public housing
agency' means a public housing agency that
meets the following requirements:
``(i) The sum of (I) the number of
public housing dwelling units
administered by the agency, and (II)
the number of vouchers under section
8(o) of the United States Housing Act
of 1937 (42 U.S.C. 1437f(o))
administered by the agency, is 550 or
fewer.
``(ii) The agency is not designated
under section 6(j)(2) as a troubled
public housing agency, and does not
have a failing score under the section
8 Management Assessment Program during
the prior 12 months.''.
(b) Resident Participation.--Section 5A of the United States
Housing Act of 1937 (42 U.S.C. 1437c-1) is amended--
(1) in subsection (e), by inserting after paragraph
(3) the following:
``(4) Qualified public housing agencies.--
``(A) In general.--Except as provided in
subparagraph (B), nothing in this section may
be construed to exempt a qualified public
housing agency from the requirement under
paragraph (1) to establish 1 or more resident
advisory boards. Notwithstanding that qualified
public housing agencies are exempt under
subsection (b)(3)(A) from the requirement under
this section to prepare and submit an annual
public housing plan, each qualified public
housing agency shall consult with, and consider
the recommendations of the resident advisory
boards for the agency, at the annual public
hearing required under subsection (f)(5),
regarding any changes to the goals, objectives,
and policies of that agency.
``(B) Applicability of waiver authority.--
Paragraph (3) shall apply to qualified public
housing agencies, except that for purposes of
such qualified public housing agencies,
subparagraph (B) of such paragraph shall be
applied by substituting `the functions
described in the second sentence of paragraph
(4)(A)' for `the functions described in
paragraph (2)'.
``(f) Public Hearings.--''; and
(2) in subsection (f) (as so designated by the
amendment made by paragraph (1)), by adding at the end
the following:
``(5) Qualified public housing agencies.--
``(A) Requirement.--Notwithstanding that
qualified public housing agencies are exempt
under subsection (b)(3)(A) from the requirement
under this section to conduct a public hearing
regarding the annual public housing plan of the
agency, each qualified public housing agency
shall annually conduct a public hearing--
``(i) to discuss any changes to the
goals, objectives, and policies of the
agency; and
``(ii) to invite public comment
regarding such changes.
``(B) Availability of information and
notice.--Not later than 45 days before the date
of any hearing described in subparagraph (A), a
qualified public housing agency shall--
``(i) make all information relevant
to the hearing and any determinations
of the agency regarding changes to the
goals, objectives, and policies of the
agency to be considered at the hearing
available for inspection by the public
at the principal office of the public
housing agency during normal business
hours; and
``(ii) publish a notice informing the
public that--
``(I) the information is
available as required under
clause (i); and
``(II) a public hearing under
subparagraph (A) will be
conducted.''.
TITLE VIII--HOUSING PRESERVATION
Subtitle A--Preservation Under Federal Housing Programs
SEC. 2801. CLARIFICATION OF DISPOSITION OF CERTAIN PROPERTIES.
Notwithstanding any other provision of law, subtitle A of
title II of the Deficit Reduction Act of 2005 (12 U.S.C. 1701z-
11 note) and the amendments made by such title shall not apply
to any transaction regarding a multifamily real property for
which--
(1) the Secretary of Housing and Urban Development
has received, before the date of the enactment of such
Act, written expressions of interest in purchasing the
property from both a city government and the housing
commission of such city;
(2) after such receipt, the Secretary acquires title
to the property at a foreclosure sale; and
(3) such city government and housing commission have
resolved a previous disagreement with respect to the
disposition of the property.
SEC. 2802. ELIGIBILITY OF CERTAIN PROJECTS FOR ENHANCED VOUCHER
ASSISTANCE.
Notwithstanding any other provision of law--
(1) the property known as The Heritage Apartments
(FHA No. 023-44804), in Malden, Massachusetts, shall be
considered eligible low-income housing for purposes of
the eligibility of residents of the property for
enhanced voucher assistance under section 8(t) of the
United States Housing Act of 1937 (42 U.S.C. 1437f(t)),
pursuant to paragraph (2)(A) of section 223(f) of the
Low-Income Housing Preservation and Resident
Homeownership Act of 1990 (12 U.S.C. 4113(f)(2)(A));
(2) such residents shall receive enhanced rental
housing vouchers upon the prepayment of the mortgage
loan for the property under section 236 of the National
Housing Act (12 U.S.C. 1715z-1); and
(3) the Secretary shall approve such prepayment and
subsequent transfer of the property without any further
condition, except that the property shall be restricted
for occupancy, until the original maturity date of the
prepaid mortgage loan, only by families with incomes
not exceeding 80 percent of the adjusted median income
for the area in which the property is located, as
published by the Secretary.
Amounts for the enhanced vouchers pursuant to this section
shall be provided under amounts appropriated for tenant-based
rental assistance otherwise authorized under section 8(t) of
the United States Housing Act of 1937.
SEC. 2803. TRANSFER OF CERTAIN RENTAL ASSISTANCE CONTRACTS.
(a) Transfer.--Subject to subsection (c) and notwithstanding
any other provision of law, the Secretary of Housing and Urban
Development shall, at the request of the owner, transfer or
authorize the transfer, of the contracts, restrictions, and
debt described in subsection (b)--
(1) on the housing that is owned or managed by
Community Properties of Ohio Management Services LLC or
an affiliate of Ohio Capital Corporation for Housing
and located in Franklin County, Ohio, to other
properties located in Franklin County, Ohio; and
(2) on the housing that is owned or managed by The
Model Group, Inc., and located in Hamilton County,
Ohio, to other properties located in Hamilton County,
Ohio.
(b) Contracts, Restrictions, and Debt Covered.--The
contracts, restrictions, and debt described in this subsection
are as follows:
(1) All or a portion of a project-based rental
assistance housing assistance payments contract under
section 8 of the United States Housing Act of 1937 (42
U.S.C. 1437f).
(2) Existing Federal use restrictions, including
without limitation use agreements, regulatory
agreements, and accommodation agreements.
(3) Any subordinate debt held by the Secretary or
assigned and any mortgages securing such debt, all
related loan and security documentation and
obligations, and reserve and escrow balances.
(c) Retention of Same Number of Units and Amount of
Assistance.--Any transfer pursuant to subsection (a) shall
result in--
(1) a total number of dwelling units (including units
retained by the owners and units transferred) covered
by assistance described in subsection (b)(1) after the
transfer remaining the same as such number assisted
before the transfer, with such increases or decreases
in unit sizes as may be contained in a plan approved by
a local planning or development commission or
department; and
(2) no reduction in the total amount of the housing
assistance payments under contracts described in
subsection (b)(1).
SEC. 2804. PUBLIC HOUSING DISASTER RELIEF.
Section 9 of the United States Housing Act of 1937 (42 U.S.C.
1437g) is amended--
(1) by striking subsection (k); and
(2) by redesignating subsections (l), (m), and (n) as
subsections (k), (l), and (m), respectively.
SEC. 2805. PRESERVATION OF CERTAIN AFFORDABLE HOUSING.
Notwithstanding any other provision of law--
(1) for the property known as Nihonmachi Terrace (FHA
No. 121-44284), in San Francisco, California, upon the
refinancing of the existing federally insured mortgage
pursuant to section 236(b) of the National Housing Act
(12 U.S.C. 1715z-1(b)), unassisted low and moderate-
income residents of the property shall be deemed
eligible for and shall receive voucher assistance under
section 8(o) of the United States Housing Act of 1937
(42 U.S.C. 1437f(o)); and
(2) to preserve the affordability of the property,
the housing authority shall utilize such additional
voucher assistance pursuant to subsection 8(o)(13) of
the United States Housing Act of 1937, without regard
to the limitations of subparagraphs (B) and (D) of that
subsection.
Amounts for the vouchers pursuant to this section shall be
provided under amounts appropriated for tenant-based rental
assistance otherwise authorized.
Subtitle B--Coordination of Federal Housing Programs and Tax Incentives
for Housing
SEC. 2831. SHORT TITLE.
This subtitle may be cited as the ``Housing Tax Credit
Coordination Act of 2008''.
SEC. 2832. APPROVALS BY DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT.
(a) Administrative and Procedural Changes.--
(1) In general.--The Secretary of Housing and Urban
Development (in this section referred to as the
``Secretary'') shall, not later than the expiration of
the 6-month period beginning upon after the date of the
enactment of this Act, implement administrative and
procedural changes to expedite approval of multifamily
housing projects under the jurisdiction of the
Department of Housing and Urban Development that meet
the requirements of the Secretary for such approvals.
(2) Projects.--The multifamily housing projects
referred to in paragraph (1) shall include--
(A) projects for which assistance is provided
by such Department in conjunction with any low-
income housing tax credits under section 42 of
the Internal Revenue Code of 1986 or tax-exempt
housing bonds; and
(B) existing public housing projects and
assisted housing projects, for which approval
of the Secretary is necessary for transactions,
in conjunction with any such low-income housing
tax credits or tax-exempt housing bonds,
involving the preservation or rehabilitation of
the project.
(3) Changes.--The administrative and procedural
changes referred to in paragraph (1) shall include all
actions necessary to carry out paragraph (1), which may
include--
(A) improving the efficiency of approval
procedures;
(B) simplifying approval requirements,
(C) establishing time deadlines or target
deadlines for required approvals;
(D) modifying division of approval authority
between field and national offices;
(E) improving outreach to project sponsors
regarding information that is required to be
submitted for such approvals;
(F) requesting additional funding for
increasing staff, if necessary; and
(G) any other actions which would expedite
approvals.
Any such changes shall be made in a manner that
provides for full compliance with any existing
requirements under law or regulation that are designed
to protect families receiving public and assisted
housing assistance, including income targeting, rent,
and fair housing provisions, and shall also comply with
requirements regarding environmental review and
protection and wages paid to laborers.
(b) Consultation.--The Secretary shall consult with the
Commissioner of the Internal Revenue Service and take such
actions as are appropriate in conjunction with such
consultation to simplify the coordination of rules,
regulations, forms, and approval requirements for multifamily
housing projects projects for which assistance is provided by
such Department in conjunction with any low-income housing tax
credits under section 42 of the Internal Revenue Code of 1986
or tax-exempt housing bonds.
(c) Recommendations.--In implementing the changes required
under this section, the Secretary shall solicit recommendations
regarding such changes from project owners and sponsors,
investors and stakeholders in housing tax credits, State and
local housing finance agencies, public housing agencies, tenant
advocates, and other stakeholders in such projects.
(d) Report.--Not later than the expiration of the 9-month
period beginning on the date of the enactment of this Act, the
Secretary shall submit a report to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate that--
(1) identifies the actions taken by the Secretary to
comply with this section;
(2) includes information regarding any resulting
improvements in the expedited approval for multifamily
housing projects;
(3) identifies recommendations made pursuant to
subsection (c);
(4) identifies actions taken by the Secretary to
implement the provisions in the amendments made by
sections 2834 and 2835 of this Act; and
(5) makes recommendations for any legislative changes
that are needed to facilitate prompt approval of
assistance for such projects.
SEC. 2833. PROJECT APPROVALS BY RURAL HOUSING SERVICE.
Section 515(h) of the Housing Act of 1949 (42 U.S.C. 1485) is
amended--
(1) by inserting ``(1) Condition.--'' after ``(h)'';
and
(2) by adding at the end the following new
paragraphs:
``(2) Actions to expedite project approvals.--
``(A) In general.--The Secretary shall take
actions to facilitate timely approval of
requests to transfer ownership or control, for
the purpose of rehabilitation or preservation,
of multifamily housing projects for which
assistance is provided by the Secretary of
Agriculture in conjunction with any low-income
housing tax credits under section 42 of the
Internal Revenue Code of 1986 or tax-exempt
housing bonds.
``(B) Consultation.--The Secretary of
Agriculture shall consult with the Commissioner
of the Internal Revenue Service and take such
actions as are appropriate in conjunction with
such consultation to simplify the coordination
of rules, regulations, forms (including
applications forms for project transfers), and
approval requirements multifamily housing
projects for which assistance is provided by
the Secretary of Agriculture in conjunction
with any low-income housing tax credits under
section 42 of the Internal Revenue Code of 1986
or tax-exempt housing bonds.
``(C) Existing requirements.--Any actions
taken pursuant to this paragraph shall be taken
in a manner that provides for full compliance
with any existing requirements under law or
regulation that are designed to protect
families receiving Federal housing assistance,
including income targeting, rent, and fair
housing provisions, and shall also comply with
requirements regarding environmental review and
protection and wages paid to laborers.
``(D) Recommendations.--In implementing the
changes required under this paragraph, the
Secretary shall solicit recommendations
regarding such changes from project owners and
sponsors, investors and stakeholders in housing
tax credits, State and local housing finance
agencies, tenant advocates, and other
stakeholders in such projects.''.
SEC. 2834. USE OF FHA LOANS WITH HOUSING TAX CREDITS.
(a) Subsidy Layering Requirements.--Subsection (d) of section
102 of the Department of Housing and Urban Development Reform
Act of 1989 (42 U.S.C. 3545(d)) is amended--
(1) in the first sentence, by inserting after
``assistance within the jurisdiction of the
Department'' the following: ``, as such term is defined
in subsection (m), except that for purposes of this
subsection such term shall not include any mortgage
insurance provided pursuant to title II of the National
Housing Act (12 U.S.C. 1707 et seq.)''; and
(2) in the second sentence, by inserting ``such''
before ``assistance''.
(b) Cost Certification.--Section 227 of National Housing Act
(12 U.S.C. 1715r) is amended--
(1) in the matter preceding paragraph (a) (relating
to a definition of ``new or rehabilitated multifamily
housing'')--
(A) in the first sentence--
(i) by striking ``Notwithstanding''
and inserting ``Except as provided in
subsection (b) and notwithstanding'';
and
(ii) by redesignating clauses (a) and
(b) as clauses (A) and (B),
respectively; and
(B) by striking ``As used in this section--
'';
(2) in paragraph (c) (relating to a definition of
``actual cost'')--
(A) in clause (i), by redesignating clauses
(1) and (2) as clauses (I) and (II),
respectively; and
(B) in clause (ii), by redesignating clauses
(1) and (2) as clauses (I) and (II),
respectively;
(3) by redesignating paragraphs (a), (b), and (c) as
paragraphs (1), (2), and (3), respectively;
(4) by inserting before paragraph (1) (as so
redesignated by paragraph (3) of this subsection) the
following:
``(b) Exemption for Certain Projects Assisted With Low-Income
Housing Tax Credit.--In the case of any mortgage insured under
any provision of this title that is executed in connection with
the construction, rehabilitation, purchase, or refinancing of a
multifamily housing project for which equity provided through
any low-income housing tax credit pursuant to section 42 of the
Internal Revenue Code of 1986 (26 U.S.C. 42), if the Secretary
determines at the time of issuance of the firm commitment for
insurance that the ratio of the loan proceeds to the actual
cost of the project is less than 80 percent, subsection (a) of
this section shall not apply.
``(c) Definitions.--For purposes of this section, the
following definitions shall apply:''; and
(5) by inserting ``(a) Requirement.--'' after
``227.''.
(c) Other Provisions Regarding Treatment of Mortgages
Covering Tax Credit Projects.--Title II of the National Housing
Act is amended by inserting after section 227 (12 U.S.C. 1715r)
the following new section:
``SEC. 228. TREATMENT OF MORTGAGES COVERING TAX CREDIT PROJECTS.
``(a) Definition.--For purposes of this section, the term
`insured mortgage covering a tax credit project' means a
mortgage insured under any provision of this title that is
executed in connection with the construction, rehabilitation,
purchase, or refinancing of a multifamily housing project for
which equity provided through any low-income housing tax credit
pursuant to section 42 of the Internal Revenue Code of 1986 (26
U.S.C. 42).
``(b) Acceptance of Letters of Credit.--In the case of an
insured mortgage covering a tax credit project, the Secretary
may not require the escrowing of equity provided by the sale of
any low-income housing tax credits for the project pursuant to
section 42 of the Internal Revenue Code of 1986, or any other
form of security, such as a letter of credit.
``(c) Asset Management Requirements.--In the case of an
insured mortgage covering a tax credit project for which
project the applicable tax credit allocating agency is causing
to be performed periodic inspections in compliance with the
requirements of section 42 of the Internal Revenue Code of
1986, such project shall be exempt from requirements imposed by
the Secretary regarding periodic inspections of the property by
the mortgagee. To the extent that other compliance monitoring
is being performed with respect to such a project by such an
allocating agency pursuant to such section 42, the Secretary
shall, to the extent that the Secretary determines such
monitoring is sufficient to ensure compliance with any
requirements established by the Secretary, accept such agency's
evidence of compliance for purposes of determining compliance
with the Secretary's requirements.
``(d) Streamlined Processing Pilot Program.--
``(1) In general.--The Secretary shall establish a
pilot program to demonstrate the effectiveness of
streamlining the review process, which shall include
all applications for mortgage insurance under any
provision of this title for mortgages executed in
connection with the construction, rehabilitation,
purchase, or refinancing of a multifamily housing
project for which equity provided through any low-
income housing tax credit pursuant to section 42 of the
Internal Revenue Code of 1986. The Secretary shall
issue instructions for implementing the pilot program
under this subsection not later than the expiration of
the 180-day period beginning upon the date of the
enactment of the Housing Tax Credit Coordination Act of
2008.
``(2) Requirements.--Such pilot program shall provide
for--
``(A) the Secretary to appoint designated
underwriters, who shall be responsible for
reviewing such mortgage insurance applications
and making determinations regarding the
eligibility of such applications for such
mortgage insurance in lieu of the processing
functions regarding such applications that are
otherwise performed by other employees of the
Department of Housing and Urban Development;
``(B) submission of applications for such
mortgage insurance by mortgagees who have
previously been expressly approved by the
Secretary; and
``(C) determinations regarding the
eligibility of such applications for such
mortgage insurance to be made by the chief
underwriter pursuant to requirements prescribed
by the Secretary, which shall include requiring
submission of reports regarding applications of
proposed mortgagees by third-party entities
expressly approved by the chief underwriter.''.
SEC. 2835. OTHER HUD PROGRAMS.
(a) Section 8 Assistance.--
(1) PHA project-based assistance.--Section 8(o)(13)
of the United States Housing Act of 1937 (42 U.S.C.
1437f(o)(13)) is amended--
(A) in subparagraph (D)(i)--
(i) by striking ``building'' and
inserting ``project''; and
(ii) by adding at the end the
following: ``For purposes of this
subparagraph, the term''project`` means
a single building, multiple contiguous
buildings, or multiple buildings on
contiguous parcels of land.'';
(B) in the first sentence of subparagraph
(F), by striking ``10 years'' and inserting
``15 years'';
(C) in subparagraph (G)--
(i) by inserting after the period at
the end of the first sentence the
following: ``Such contract may, at the
election of the public housing agency
and the owner of the structure, specify
that such contract shall be extended
for renewal terms of up to 15 years
each, if the agency makes the
determination required by this
subparagraph and the owner is in
compliance with the terms of the
contract.''; and
(ii) by adding at the end the
following: ``A public housing agency
may agree to enter into such a contract
at the time it enters into the initial
agreement for a housing assistance
payment contract or at any time
thereafter that is before the
expiration of the housing assistance
payment contract.'';
(D) in subparagraph (H), by inserting before
the period at the end of the first sentence the
following: ``, except that in the case of a
contract unit that has been allocated low-
income housing tax credits and for which the
rent limitation pursuant to such section 42 is
less than the amount that would otherwise be
permitted under this subparagraph, the rent for
such unit may, in the sole discretion of a
public housing agency, be established at the
higher section 8 rent, subject only to
paragraph (10)(A)'';
(E) in subparagraph (I)(i), by inserting
before the semicolon the following: ``, except
that the contract may provide that the maximum
rent permitted for a dwelling unit shall not be
less than the initial rent for the dwelling
unit under the initial housing assistance
payments contract covering the unit''; and
(F) by adding at the end the following new
subparagraphs:
``(L) Use in cooperative housing and elevator
buildings.--A public housing agency may enter
into a housing assistance payments contract
under this paragraph with respect to--
``(i) dwelling units in cooperative
housing; and
``(ii) notwithstanding subsection
(c), dwelling units in a high-rise
elevator project, including such a
project that is occupied by families
with children, without review and
approval of the contract by the
Secretary.
``(M) Reviews.--
``(i) Subsidy layering.--A subsidy
layering review in accordance with
section 102(d) of the Department of
Housing and Urban Development Reform
Act of 1989 (42 U.S.C. 3545(d)) shall
not be required for assistance under
this paragraph in the case of a housing
assistance payments contract for an
existing structure, or if a subsidy
layering review has been conducted by
the applicable State or local agency.
``(ii) Environmental review.--A
public housing agency shall not be
required to undertake any environmental
review before entering into a housing
assistance payments contract under this
paragraph for an existing structure,
except to the extent such a review is
otherwise required by law or
regulation.''.
(2) Voucher program rent reasonableness.--Section
8(o)(10) of the United States Housing Act of 1937 (42
U.S.C. 1437f(o)(10)) is amended by adding at the end
the following new subparagraph;
``(F) Tax credit projects.--In the case of a
dwelling unit receiving tax credits pursuant to
section 42 of the Internal Revenue Code of 1986
or for which assistance is provided under
subtitle A of title II of the Cranston Gonzalez
National Affordable Housing Act of 1990, for
which a housing assistance contract not subject
to paragraph (13) of this subsection is
established, rent reasonableness shall be
determined as otherwise provided by this
paragraph, except that--
``(i) comparison with rent for units
in the private, unassisted local market
shall not be required if the rent is
equal to or less than the rent for
other comparable units receiving such
tax credits or assistance in the
project that are not occupied by
families assisted with tenant-based
assistance under this subsection; and
``(ii) the rent shall not be
considered reasonable for purposes of
this paragraph if it exceeds the
greater of--
``(I) the rents charged for
other comparable units
receiving such tax credits or
assistance in the project that
are not occupied by families
assisted with tenant-based
assistance under this
subsection; and
``(II) the payment standard
established by the public
housing agency for a unit of
the size involved.''.
(b) Section 202 Housing for Elderly Persons.--Subsection (f)
of section 202 of the Housing Act of 1959 (12 U.S.C. 1701q(f))
is amended--
(1) by striking ``Selection Criteria.--'' and
inserting ``Initial Selection Criteria and
Processing.-- (1) Selection criteria.--'';
(2) by redesignating paragraphs (1) through (7) as
subparagraphs (A) through (G), respectively; and
(3) by adding at the end the following new paragraph:
``(2) Delegated processing.--
``(A) In issuing a capital advance under this
subsection for any project for which financing
for the purposes described in the last two
sentences of subsection (b) is provided by a
combination of a capital advance under
subsection (c)(1) and sources other than this
section, within 30 days of award of the capital
advance, the Secretary shall delegate review
and processing of such projects to a State or
local housing agency that--
``(i) is in geographic proximity to
the property;
``(ii) has demonstrated experience in
and capacity for underwriting
multifamily housing loans that provide
housing and supportive services;
``(iii) may or may not be providing
low-income housing tax credits in
combination with the capital advance
under this section, and
``(iv) agrees to issue a firm
commitment within 12 months of
delegation.
``(B) The Secretary shall retain the
authority to process capital advances in cases
in which no State or local housing agency has
applied to provide delegated processing
pursuant to this paragraph or no such agency
has entered into an agreement with the
Secretary to serve as a delegated processing
agency.
``(C) An agency to which review and
processing is delegated pursuant to
subparagraph (A) may assess a reasonable fee
which shall be included in the capital advance
amounts and may recommend project rental
assistance amounts in excess of those initially
awarded by the Secretary. The Secretary shall
develop a schedule for reasonable fees under
this subparagraph to be paid to delegated
processing agencies, which shall take into
consideration any other fees to be paid to the
agency for other funding provided to the
project by the agency, including bonds, tax
credits, and other gap funding.
``(D) Under such delegated system, the
Secretary shall retain the authority to approve
rents and development costs and to execute a
capital advance within 60 days of receipt of
the commitment from the State or local agency.
The Secretary shall provide to such agency and
the project sponsor, in writing, the reasons
for any reduction in capital advance amounts or
project rental assistance and such reductions
shall be subject to appeal.''.
(c) McKinney-Vento Act Homeless Assistance Under Shelter Plus
Care Program.--
(1) Term of contracts with owner or lessor.--Part I
of subtitle F of the McKinney-Vento Homeless Assistance
Act is amended--
(A) by redesignating sections 462 and 463 (42
U.S.C. 11403g, 11403h) as sections 463 and 464,
respectively;
(B) by striking ``section 463'' each place
such term appears in sections 471, 476, 481,
486, and 488 (42 U.S.C. 11404, 11405, 11406,
11407, and 11407b) and inserting ``section
464''; and
(C) by inserting after section 461 (42 U.S.C.
11403f) the following new section:
``SEC. 462. TERM OF CONTRACT WITH OWNER OR LESSOR.
``An applicant under this subtitle may enter into a contract
with the owner or lessor of a property that receives rental
assistance under this subtitle having a term of not more than
15 years, subject to the availability of sufficient funds
provided in appropriation Acts for the purpose of renewing
expiring contracts for assistance payments. Such contract may,
at the election of the applicant and owner or lessor, specify
that such contract shall be extended for renewal terms of not
more than 15 years each, subject to the availability of
sufficient such appropriated funds.''.
(2) Project-based rental assistance contracts.--
Section 478(a) of the McKinney-Vento Homeless
Assistance Act (42 U.S.C. 11405a(a)) is amended by
inserting before the period at the end the following:
``; except that, in the case of any project for which
equity is provided through any low-income housing tax
credit pursuant to section 42 of the Internal Revenue
Code of 1986 (26 U.S.C. 42), if an expenditure of such
amount for each unit (including the prorated share of
such work) is required to make the structure decent,
safe, and sanitary, and the owner agrees to reach
initial closing on permanent financing from such other
sources within two years and agrees to carry out the
rehabilitation with resources other than assistance
under this subtitle within 60 months of notification of
grant approval, the contract shall be for a term of 10
years (except that such period may be extended by up to
1 year by the Secretary, which extension shall be
granted unless the Secretary determines that the
sponsor is primarily responsible for the failure to
meet such deadline)''.
(d) Data Collection on Tenants of Housing Tax Credit
Projects.--Title I of the United States Housing Act of 1937 (42
U.S.C. 1437 et seq.) is amended by adding at the end the
following new section:
``SEC. 36. COLLECTION OF INFORMATION ON TENANTS IN TAX CREDIT PROJECTS.
``(a) In General.--Each State agency administering tax
credits under section 42 of the Internal Revenue Code of 1986
(26 U.S.C. 42) shall furnish to the Secretary of Housing and
Urban Development, not less than annually, information
concerning the race, ethnicity, family composition, age,
income, use of rental assistance under section 8(o) of the
United States Housing Act of 1937 or other similar assistance,
disability status, and monthly rental payments of households
residing in each property receiving such credits through such
agency. Such State agencies shall, to the extent feasible,
collect such information through existing reporting processes
and in a manner that minimizes burdens on property owners. In
the case of any household that continues to reside in the same
dwelling unit, information provided by the household in a
previous year may be used if the information is of a category
that is not subject to change or if information for the current
year is not readily available to the owner of the property.
``(b) Standards.--The Secretary shall establish standards and
definitions for the information collected under subsection (a),
provide States with technical assistance in establishing
systems to compile and submit such information, and, in
coordination with other Federal agencies administering housing
programs, establish procedures to minimize duplicative
reporting requirements for properties assisted under multiple
housing programs.
``(c) Public Availability.--The Secretary shall, not less
than annually, compile and make publicly available the
information submitted to the Secretary pursuant to subsection
(a).
``(d) Authorization of Appropriations.--There is authorized
to be appropriated for the cost of activities required under
subsections (b) and (c) $2,500,000 for fiscal year 2009 and
$900,000 for each of fiscal years 2010 through 2013.''.
TITLE IX--MISCELLANEOUS
SEC. 2901. HOMELESS ASSISTANCE.
(a) Appropriations.--Section 726 of the McKinney-Vento
Homeless Assistance Act (42 U.S.C. 11435) is amended by
striking ``$70,000,000'' and all that follows and inserting
``$100,000,000 for fiscal year 2009 and such sums as may be
necessary for each subsequent fiscal year.''.
(b) Emergency Assistance.--Section 722 of the McKinney-Vento
Homeless Assistance Act (42 U.S.C. 11432) is amended by adding
at the end the following:
``(h) Special Rule for Emergency Assistance.--
``(1) Emergency assistance.--
``(A) Reservation of amounts.--Subject to
paragraph (4) and notwithstanding any other
provision of this title, the Secretary shall
use funds appropriated under section 726 for
fiscal year 2009, but not to exceed
$30,000,000, for the purposes of providing
emergency assistance through grants.
``(B) General authority.--The Secretary shall
use the funds to make grants to State
educational agencies under paragraph (2), to
enable the agencies to make subgrants to local
educational agencies under paragraph (3), to
provide activities described in section 723(d)
for individuals referred to in subparagraph
(C).
``(C) Eligible individuals.--Funds made
available under this subsection shall be used
to provide such activities for eligible
individuals, consisting of homeless children
and youths, and their families, who have become
homeless due to home foreclosure, including
children and youths, and their families, who
became homeless when lenders foreclosed on
properties rented by the families.
``(2) Grants to state educational agencies.--
``(A) Disbursement.--The Secretary shall make
grants with funds provided under paragraph
(1)(A) to State educational agencies based on
need, consistent with the number of eligible
individuals described in paragraph (1)(C) in
the States involved, as determined by the
Secretary.
``(B) Assurance.--To be eligible to receive a
grant under this paragraph, a State educational
agency shall provide an assurance to the
Secretary that the State educational agency,
and each local educational agency receiving a
subgrant from the State educational agency
under this subsection shall ensure that the
activities carried out under this subsection
are consistent with the activities described in
section 723(d).
``(3) Subgrants to local educational agencies.--A
State educational agency that receives a grant under
paragraph (2) shall use the funds made available
through the grant to make subgrants to local
educational agencies. The State educational agency
shall make the subgrants to local educational agencies
based on need, consistent with the number of eligible
individuals described in paragraph (1)(C) in the areas
served by the local educational agencies, as determined
by the State educational agency.
``(4) Restriction.--The Secretary--
``(A) shall determine the amount (if any) by
which the funds appropriated under section 726
for fiscal year 2009 exceed $70,000,000; and
``(B) may only use funds from that amount to
carry out this subsection.''.
SEC. 2902. INCREASING ACCESS AND UNDERSTANDING OF ENERGY EFFICIENT
MORTGAGES.
(a) Definition.--As used in this section, the term ``energy
efficient mortgage'' has the same meaning as given that term in
paragraph (24) of section 104 of the Cranston-Gonzalez National
Affordable Housing Act (42 U.S.C. 12704(24)).
(b) Recommendations to Eliminate Barriers to Use of Energy
Efficient Mortgages.--
(1) In general.--Not later than 180 days after the
date of enactment of this section, the Secretary of
Housing and Urban Development, in conjunction with the
Secretary of Energy and the Administrator of the
Environmental Protection Agency, shall consult with the
residential mortgage industry and States to develop
recommendations to eliminate the barriers that exist to
increasing the availability, use, and purchase of
energy efficient mortgages, including such barriers
as--
(A) the lack of reliable and accessible
information on such mortgages, including
estimated energy savings and other benefits of
energy efficient housing;
(B) the confusion regarding underwriting
requirements and differences among various
energy efficient mortgage programs;
(C) the complex and time consuming process of
securing such mortgages;
(D) the lack of publicly available research
on the default risk of such mortgages; and
(E) the availability of certified or
accredited home energy rating services.
(2) Report to congress.--The Secretary of Housing and
Urban Development shall submit a report to Congress
that--
(A) summarizes the recommendations developed
under paragraph (1); and
(B) includes any recommendations for
statutory, regulatory, or administrative
changes that the Secretary deems necessary to
institute such recommendations.
(c) Energy Efficient Mortgages Outreach Campaign.--
(1) In general.--The Secretary of Housing and Urban
Development, in consultation and coordination with the
Secretary of Energy, the Administrator of the
Environmental Protection Agency, and State Energy and
Housing Finance Directors, shall carry out an education
and outreach campaign to inform and educate consumers,
home builders, residential lenders, and other real
estate professionals on the availability, benefits, and
advantages of--
(A) improved energy efficiency in housing;
and
(B) energy efficient mortgages.
(2) Authorization of appropriations.--There are
authorized to be appropriated such sums as are
necessary to carry out the education and outreach
campaign described under paragraph (1).
DIVISION C--TAX-RELATED PROVISIONS
SECTION 3000. SHORT TITLE; ETC.
(a) Short Title.--This division may be cited as the ``Housing
Assistance Tax Act of 2008''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this division an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a section
or other provision, the reference shall be considered to be
made to a section or other provision of the Internal Revenue
Code of 1986.
(c) Table of Contents.--The table of contents for this
division is as follows:
Sec. 3000. Short title; etc.
TITLE I--HOUSING TAX INCENTIVES
Subtitle A--Multi-Family Housing
Part I--Low-Income Housing Tax Credit
Sec. 3001. Temporary increase in volume cap for low-income housing tax
credit.
Sec. 3002. Determination of credit rate.
Sec. 3003. Modifications to definition of eligible basis.
Sec. 3004. Other simplification and reform of low-income housing tax
incentives.
Sec. 3005. Treatment of military basic pay.
Part II--Modifications to Tax-Exempt Housing Bond Rules
Sec. 3007. Recycling of tax-exempt debt for financing residential rental
projects.
Sec. 3008. Coordination of certain rules applicable to low-income
housing credit and qualified residential rental project exempt
facility bonds.
Part III--Reforms Related to the Low-Income Housing Credit and Tax-
Exempt Housing Bonds
Sec. 3009. Hold harmless for reductions in area median gross income.
Sec. 3010. Exception to annual current income determination requirement
where determination not relevant.
Subtitle B--Single Family Housing
Sec. 3011. First-time homebuyer credit.
Sec. 3012. Additional standard deduction for real property taxes for
nonitemizers.
Subtitle C--General Provisions
Sec. 3021. Temporary liberalization of tax-exempt housing bond rules.
Sec. 3022. Repeal of alternative minimum tax limitations on tax-exempt
housing bonds, low-income housing tax credit, and
rehabilitation credit.
Sec. 3023. Bonds guaranteed by Federal home loan banks eligible for
treatment as tax-exempt bonds.
Sec. 3024. Modification of rules pertaining to FIRPTA nonforeign
affidavits.
Sec. 3025. Modification of definition of tax-exempt use property for
purposes of the rehabilitation credit.
Sec. 3026. Extension of special rule for mortgage revenue bonds for
residences located in disaster areas.
Sec. 3027. Transfer of funds appropriated to carry out 2008 recovery
rebates for individuals.
TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS
Subtitle A--Foreign Currency and Other Qualified Activities
Sec. 3031. Revisions to REIT income tests.
Sec. 3032. Revisions to REIT asset tests.
Sec. 3033. Conforming foreign currency revisions.
Subtitle B--Taxable REIT Subsidiaries
Sec. 3041. Conforming taxable REIT subsidiary asset test.
Subtitle C--Dealer Sales
Sec. 3051. Holding period under safe harbor.
Sec. 3052. Determining value of sales under safe harbor.
Subtitle D--Health Care REITs
Sec. 3061. Conformity for health care facilities.
Subtitle E--Effective Dates
Sec. 3071. Effective dates.
TITLE III--REVENUE PROVISIONS
Subtitle A--General Provisions
Sec. 3081. Election to accelerate the AMT and research credits in lieu
of bonus depreciation.
Sec. 3082. Certain GO Zone incentives.
Sec. 3083. Increase in statutory limit on the public debt.
Subtitle B--Revenue Offsets
Sec. 3091. Returns relating to payments made in settlement of payment
card and third party network transactions.
Sec. 3092. Gain from sale of principal residence allocated to
nonqualified use not excluded from income.
Sec. 3093. Delay in application of worldwide allocation of interest.
Sec. 3094. Time for payment of corporate estimated taxes.
TITLE I--HOUSING TAX INCENTIVES
Subtitle A--Multi-Family Housing
PART I--LOW-INCOME HOUSING TAX CREDIT
SEC. 3001. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME HOUSING TAX
CREDIT.
Paragraph (3) of section 42(h) is amended by adding at the
end the following new subparagraph:
``(I) Increase in state housing credit
ceiling for 2008 and 2009.--In the case of
calendar years 2008 and 2009--
``(i) the dollar amount in effect
under subparagraph (C)(ii)(I) for such
calendar year (after any increase under
subparagraph (H)) shall be increased by
$0.20, and
``(ii) the dollar amount in effect
under subparagraph (C)(ii)(II) for such
calendar year (after any increase under
subparagraph (H)) shall be increased by
an amount equal to 10 percent of such
dollar amount (rounded to the next
lowest multiple of $5,000).''.
SEC. 3002. DETERMINATION OF CREDIT RATE.
(a) Temporary Minimum Credit Rate for Non-Federally
Subsidized New Buildings.--
(1) In general.--Subsection (b) of section 42 is
amended by striking paragraph (1), by redesignating
paragraph (2) as paragraph (1), and by inserting after
paragraph (1), as so redesignated, the following new
paragraph:
``(2) Temporary minimum credit rate for non-federally
subsidized new buildings.--In the case of any new
building--
``(A) which is placed in service by the
taxpayer after the date of the enactment of
this paragraph and before December 31, 2013,
and
``(B) which is not federally subsidized for
the taxable year,
the applicable percentage shall not be less than 9
percent.''.
(2) Conforming amendments.--
(A) Subsection (b) of section 42, as amended
by paragraph (1), is amended by striking ``For
purposes of this section--'' and all that
follows through ``means the appropriate'' and
inserting the following:
``(1) Determination of applicable percentage.--For
purposes of this section, the term `applicable
percentage' means, with respect to any building, the
appropriate''.
(B) Clause (i) of section 42(b)(1)(B), as
redesignated by paragraph (1), is amended by
striking ``a building described in paragraph
(1)(A)'' and inserting ``a new building which
is not federally subsidized for the taxable
year''.
(C) Clause (ii) of section 42(b)(1)(B), as
redesignated by paragraph (1), is amended by
striking ``a building described in paragraph
(1)(B)'' and inserting ``a building not
described in clause (i)''.
(b) Modifications to Definition of Federally Subsidized
Building.--
(1) In general.--Subparagraph (A) of section 42(i)(2)
is amended by striking ``, or any below market Federal
loan,''.
(2) Conforming amendments.--
(A) Subparagraph (B) of section 42(i)(2) is
amended--
(i) by striking ``balance of loan
or'' in the heading thereof,
(ii) by striking ``loan or'' in the
matter preceding clause (i), and
(iii) by striking ``subsection (d)--
'' and all that follows and inserting
``subsection (d) the proceeds of such
obligation.''.
(B) Subparagraph (C) of section 42(i)(2) is
amended--
(i) by striking ``or below market
Federal loan'' in the matter preceding
clause (i),
(ii) in clause (i)--
(I) by striking ``or loan
(when issued or made)'' and
inserting ``(when issued)'',
and
(II) by striking ``the
proceeds of such obligation or
loan'' and inserting ``the
proceeds of such obligation'',
and
(iii) by striking ``, and such loan
is repaid,'' in clause (ii).
(C) Paragraph (2) of section 42(i) is amended
by striking subparagraphs (D) and (E).
(c) Effective Date.--The amendments made by this subsection
shall apply to buildings placed in service after the date of
the enactment of this Act.
SEC. 3003. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS.
(a) Increase in Credit for Certain State Designated
Buildings.--Subparagraph (C) of section 42(d)(5) (relating to
increase in credit for buildings in high cost areas), before
redesignation under subsection (g), is amended by adding at the
end the following new clause:
``(v) Buildings designated by state
housing credit agency.--Any building
which is designated by the State
housing credit agency as requiring the
increase in credit under this
subparagraph in order for such building
to be financially feasible as part of a
qualified low-income housing project
shall be treated for purposes of this
subparagraph as located in a difficult
development area which is designated
for purposes of this subparagraph. The
preceding sentence shall not apply to
any building if paragraph (1) of
subsection (h) does not apply to any
portion of the eligible basis of such
building by reason of paragraph (4) of
such subsection.''.
(b) Modification to Rehabilitation Requirements.--
(1) In general.--Clause (ii) of section 42(e)(3)(A)
is amended--
(A) by striking ``10 percent'' in subclause
(I) and inserting ``20 percent'', and
(B) by striking ``$3,000'' in subclause (II)
and inserting ``$6,000''.
(2) Inflation adjustment.--Paragraph (3) of section
42(e) is amended by adding at the end the following new
subparagraph:
``(D) Inflation adjustment.--In the case of
any expenditures which are treated under
paragraph (4) as placed in service during any
calendar year after 2009, the $6,000 amount in
subparagraph (A)(ii)(II) shall be increased by
an amount equal to--
``(i) such dollar amount, multiplied
by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for
such calendar year by substituting
`calendar year 2008' for `calendar year
1992' in subparagraph (B) thereof.
Any increase under the preceding sentence which
is not a multiple of $100 shall be rounded to
the nearest multiple of $100.''.
(3) Conforming amendment.--Subclause (II) of section
42(f)(5)(B)(ii) is amended by striking ``if subsection
(e)(3)(A)(ii)(II)'' and all that follows and inserting
``if the dollar amount in effect under subsection
(e)(3)(A)(ii)(II) were two-thirds of such amount.''.
(c) Increase in Allowable Community Service Facility Space
for Small Projects.--Clause (ii) of section 42(d)(4)(C)
(relating to limitation) is amended by striking ``10 percent of
the eligible basis of the qualified low-income housing project
of which it is a part. For purposes of'' and inserting ``the
sum of--
``(I) 25 percent of so much
of the eligible basis of the
qualified low-income housing
project of which it is a part
as does not exceed $15,000,000,
plus
``(II) 10 percent of so much
of the eligible basis of such
project as is not taken into
account under subclause (I).
For purposes of''.
(d) Clarification of Treatment of Federal Grants.--
Subparagraph (A) of section 42(d)(5) is amended to read as
follows:
``(A) Federal grants not taken into account
in determining eligible basis.--The eligible
basis of a building shall not include any costs
financed with the proceeds of a federally
funded grant.''.
(e) Simplification of Related Party Rules.--Clause (iii) of
section 42(d)(2)(D), before redesignation under subsection
(g)(2), is amended--
(1) by striking all that precedes subclause (II),
(2) by redesignating subclause (II) as clause (iii)
and moving such clause two ems to the left, and
(3) by striking the last sentence thereof.
(f) Exception to 10-Year Nonacquisition Period for Existing
Buildings Applicable to Federally- or State-Assisted
Buildings.--Paragraph (6) of section 42(d) is amended to read
as follows:
``(6) Credit allowable for certain buildings acquired
during 10-year period described in paragraph
(2)(B)(ii).--
``(A) In general.--Paragraph (2)(B)(ii) shall
not apply to any federally- or State-assisted
building.
``(B) Buildings acquired from insured
depository institutions in default.--On
application by the taxpayer, the Secretary may
waive paragraph (2)(B)(ii) with respect to any
building acquired from an insured depository
institution in default (as defined in section 3
of the Federal Deposit Insurance Act) or from a
receiver or conservator of such an institution.
``(C) Federally- or state-assisted
building.--For purposes of this paragraph--
``(i) Federally-assisted building.--
The term `federally-assisted building'
means any building which is
substantially assisted, financed, or
operated under section 8 of the United
States Housing Act of 1937, section
221(d)(3), 221(d)(4), or 236 of the
National Housing Act, section 515 of
the Housing Act of 1949, or any other
housing program administered by the
Department of Housing and Urban
Development or by the Rural Housing
Service of the Department of
Agriculture.
``(ii) State-assisted building.--The
term `State-assisted building' means
any building which is substantially
assisted, financed, or operated under
any State law similar in purposes to
any of the laws referred to in clause
(i).''.
(g) Repeal of Deadwood.--
(1) Clause (ii) of section 42(d)(2)(B) is amended by
striking ``the later of--'' and all that follows and
inserting ``the date the building was last placed in
service,''.
(2) Subparagraph (D) of section 42(d)(2) is amended
by striking clause (i) and by redesignating clauses
(ii) and (iii) as clauses (i) and (ii), respectively.
(3) Paragraph (5) of section 42(d) is amended by
striking subparagraph (B) and by redesignating
subparagraph (C) as subparagraph (B).
(h) Effective Date.--
(1) In general.--Except as otherwise provided in
paragraph (2), the amendments made by this subsection
shall apply to buildings placed in service after the
date of the enactment of this Act.
(2) Rehabilitation requirements.--
(A) In general.--The amendments made by
subsection (b) shall apply to buildings with
respect to which housing credit dollar amounts
are allocated after the date of the enactment
of this Act.
(B) Buildings not subject to allocation
limits.--To the extent paragraph (1) of section
42(h) of the Internal Revenue Code of 1986 does
not apply to any building by reason of
paragraph (4) thereof, the amendments made by
subsection (b) shall apply buildings financed
with bonds issued pursuant to allocations made
after the date of the enactment of this Act.
SEC. 3004. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME HOUSING TAX
INCENTIVES.
(a) Repeal Prohibition on Moderate Rehabilitation
Assistance.--Paragraph (2) of section 42(c) (defining qualified
low-income building) is amended by striking the flush sentence
at the end.
(b) Modification of Time Limit for Incurring 10 Percent of
Project's Cost.--Clause (ii) of section 42(h)(1)(E) is amended
by striking ``(as of the later of the date which is 6 months
after the date that the allocation was made or the close of the
calendar year in which the allocation is made)'' and inserting
``(as of the date which is 1 year after the date that the
allocation was made)''.
(c) Repeal of Bonding Requirement on Disposition of
Building.--Paragraph (6) of section 42(j) (relating to no
recapture on disposition of building (or interest therein)
where bond posted) is amended to read as follows:
``(6) No recapture on disposition of building which
continues in qualified use.--
``(A) In general.--The increase in tax under
this subsection shall not apply solely by
reason of the disposition of a building (or an
interest therein) if it is reasonably expected
that such building will continue to be operated
as a qualified low-income building for the
remaining compliance period with respect to
such building.
``(B) Statute of limitations.--If a building
(or an interest therein) is disposed of during
any taxable year and there is any reduction in
the qualified basis of such building which
results in an increase in tax under this
subsection for such taxable or any subsequent
taxable year, then--
``(i) the statutory period for the
assessment of any deficiency with
respect to such increase in tax shall
not expire before the expiration of 3
years from the date the Secretary is
notified by the taxpayer (in such
manner as the Secretary may prescribe)
of such reduction in qualified basis,
and
``(ii) such deficiency may be
assessed before the expiration of such
3-year period notwithstanding the
provisions of any other law or rule of
law which would otherwise prevent such
assessment.''.
(d) Energy Efficiency and Historic Nature Taken Into Account
in Making Allocations.--Subparagraph (C) of section 42(m)(1)
(relating to plans for allocation of credit among projects) is
amended by striking ``and'' at the end of clause (vii), by
striking the period at the end of clause (viii) and inserting a
comma, and by adding at the end the following new clauses:
``(ix) the energy efficiency of the
project, and
``(x) the historic nature of the
project.''.
(e) Continued Eligibility for Students Who Received Foster
Care Assistance.--Clause (i) of section 42(i)(3)(D) is amended
by striking ``or'' at the end of subclause (I), by
redesignating subclause (II) as subclause (III), and by
inserting after subclause (I) the following new subclause:
``(II) a student who was
previously under the care and
placement responsibility of the
State agency responsible for
administering a plan under part
B or part E of title IV of the
Social Security Act, or''.
(f) Treatment of Rural Projects.--Section 42(i) (relating to
definitions and special rules) is amended by adding at the end
the following new paragraph:
``(8) Treatment of rural projects.--For purposes of
this section, in the case of any project for
residential rental property located in a rural area (as
defined in section 520 of the Housing Act of 1949), any
income limitation measured by reference to area median
gross income shall be measured by reference to the
greater of area median gross income or national non-
metropolitan median income. The preceding sentence
shall not apply with respect to any building if
paragraph (1) of section 42(h) does not apply by reason
of paragraph (4) thereof to any portion of the credit
determined under this section with respect to such
building.''.
(g) Clarification of General Public Use Requirement.--
Subsection (g) of section 42 is amended by adding at the end
the following new paragraph:
``(9) Clarification of general public use
requirement.--A project does not fail to meet the
general public use requirement solely because of
occupancy restrictions or preferences that favor
tenants--
``(A) with special needs,
``(B) who are members of a specified group
under a Federal program or State program or
policy that supports housing for such a
specified group, or
``(C) who are involved in artistic or
literary activities.''.
(h) GAO Study Regarding Modifications to Low-Income Housing
Tax Credit.--Not later than December 31, 2012, the Comptroller
General of the United States shall submit to Congress a report
which analyzes the implementation of the modifications made by
this subtitle to the low-income housing tax credit under
section 42 of the Internal Revenue Code of 1986. Such report
shall include an analysis of the distribution of credit
allocations before and after the effective date of such
modifications.
(i) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply to buildings placed in service after the date of
the enactment of this Act.
(2) Repeal of bonding requirement on disposition of
building.--The amendment made by subsection (c) shall
apply to--
(A) interests in buildings disposed after the
date of the enactment of this Act, and
(B) interests in buildings disposed of on or
before such date if--
(i) it is reasonably expected that
such building will continue to be
operated as a qualified low-income
building (within the meaning of section
42 of the Internal Revenue Code of
1986) for the remaining compliance
period (within the meaning of such
section) with respect to such building,
and
(ii) the taxpayer elects the
application of this subparagraph with
respect to such disposition.
(3) Energy efficiency and historic nature taken into
account in making allocations.--The amendments made by
subsection (d) shall apply to allocations made after
December 31, 2008.
(4) Continued eligibility for students who received
foster care assistance.--The amendments made by
subsection (e) shall apply to determinations made after
the date of the enactment of this Act.
(5) Treatment of rural projects.--The amendment made
by subsection (f) shall apply to determinations made
after the date of the enactment of this Act.
(6) Clarification of general public use
requirement.--The amendment made by subsection (g)
shall apply to buildings placed in service before, on,
or after the date of the enactment of this Act.
SEC. 3005. TREATMENT OF MILITARY BASIC PAY.
(a) In General.--Subparagraph (B) of section 142(d)(2)
(relating to income of individuals; area median gross income)
is amended--
(1) by striking ``The income'' and inserting the
following:
``(i) In general.--The income'', and
(2) by adding at the end the following:
``(ii) Special rule relating to basic
housing allowances.--For purposes of
determining income under this
subparagraph, payments under section
403 of title 37, United States Code, as
a basic pay allowance for housing shall
be disregarded with respect to any
qualified building.
``(iii) Qualified building.--For
purposes of clause (ii), the term
`qualified building' means any building
located--
``(I) in any county in which
is located a qualified military
installation to which the
number of members of the Armed
Forces of the United States
assigned to units based out of
such qualified military
installation, as of June 1,
2008, has increased by not less
than 20 percent, as compared to
such number on December 31,
2005, or
``(II) in any county adjacent
to a county described in
subclause (I).
``(iv) Qualified military
installation.--For purposes of clause
(iii), the term `qualified military
installation' means any military
installation or facility the number of
members of the Armed Forces of the
United States assigned to which, as of
June 1, 2008, is not less than
1,000.''.
(b) Effective Date.--The amendments made by this section
shall apply to--
(1) determinations made after the date of the
enactment of this Act and before January 1, 2012, in
the case of any qualified building (as defined in
section 142(d)(2)(B)(iii) of the Internal Revenue Code
of 1986)--
(A) with respect to which housing credit
dollar amounts have been allocated on or before
the date of the enactment of this Act, or
(B) with respect to buildings placed in
service before such date of enactment, to the
extent paragraph (1) of section 42(h) of such
Code does not apply to such building by reason
of paragraph (4) thereof, but only with respect
to bonds issued before such date of enactment,
and
(2) determinations made after the date of enactment
of this Act, in the case of qualified buildings (as so
defined)--
(A) with respect to which housing credit
dollar amounts are allocated after the date of
the enactment of this Act and before January 1,
2012, or
(B) with respect to which buildings placed in
service after the date of enactment of this Act
and before January 1, 2012, to the extent
paragraph (1) of section 42(h) of such Code
does not apply to such building by reason of
paragraph (4) thereof, but only with respect to
bonds issued after such date of enactment and
before January 1, 2012.
PART II--MODIFICATIONS TO TAX-EXEMPT HOUSING BOND RULES
SEC. 3007. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING RESIDENTIAL
RENTAL PROJECTS.
(a) In General.--Subsection (i) of section 146 (relating to
treatment of refunding issues) is amended by adding at the end
the following new paragraph:
``(6) Treatment of certain residential rental project
bonds as refunding bonds irrespective of obligor.--
``(A) In general.--If, during the 6-month
period beginning on the date of a repayment of
a loan financed by an issue 95 percent or more
of the net proceeds of which are used to
provide projects described in section 142(d),
such repayment is used to provide a new loan
for any project so described, any bond which is
issued to refinance such issue shall be treated
as a refunding issue to the extent the
principal amount of such refunding issue does
not exceed the principal amount of the bonds
refunded.
``(B) Limitations.--Subparagraph (A) shall
apply to only one refunding of the original
issue and only if--
``(i) the refunding issue is issued
not later than 4 years after the date
on which the original issue was issued,
``(ii) the latest maturity date of
any bond of the refunding issue is not
later than 34 years after the date on
which the refunded bond was issued, and
``(iii) the refunding issue is
approved in accordance with section
147(f) before the issuance of the
refunding issue.''.
(b) Low-Income Housing Credit.--Clause (ii) of section
42(h)(4)(A) is amended by inserting ``or such financing is
refunded as described in section 146(i)(6)'' before the period
at the end.
(c) Effective Date.--The amendments made by this section
shall apply to repayments of loans received after the date of
the enactment of this Act.
SEC. 3008. COORDINATION OF CERTAIN RULES APPLICABLE TO LOW-INCOME
HOUSING CREDIT AND QUALIFIED RESIDENTIAL RENTAL
PROJECT EXEMPT FACILITY BONDS.
(a) Determination of Next Available Unit.--Paragraph (3) of
section 142(d) (relating to current income determinations) is
amended by adding at the end the following new subparagraph:
``(C) Exception for projects with respect to
which affordable housing credit is allowed.--In
the case of a project with respect to which
credit is allowed under section 42, the second
sentence of subparagraph (B) shall be applied
by substituting `building (within the meaning
of section 42)' for `project'.''.
(b) Students.--Paragraph (2) of section 142(d) (relating to
definitions and special rules) is amended by adding at the end
the following new subparagraph:
``(C) Students.--Rules similar to the rules
of 42(i)(3)(D) shall apply for purposes of this
subsection.''.
(c) Single-Room Occupancy Units.--Paragraph (2) of section
142(d) (relating to definitions and special rules), as amended
by subsection (b), is amended by adding at the end the
following new subparagraph:
``(D) Single-room occupancy units.--A unit
shall not fail to be treated as a residential
unit merely because such unit is a single-room
occupancy unit (within the meaning of section
42).''.
(d) Effective Date.--The amendments made by this section
shall apply to determinations of the status of qualified
residential rental projects for periods beginning after the
date of the enactment of this Act, with respect to bonds issued
before, on, or after such date.
PART III--REFORMS RELATED TO THE LOW-INCOME HOUSING CREDIT AND TAX-
EXEMPT HOUSING BONDS
SEC. 3009. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS INCOME.
(a) In General.--Paragraph (2) of section 142(d), as amended
by section 3008, is amended by adding at the end the following
new subparagraph:
``(E) Hold harmless for reductions in area
median gross income.--
``(i) In general.--Any determination
of area median gross income under
subparagraph (B) with respect to any
project for any calendar year after
2008 shall not be less than the area
median gross income determined under
such subparagraph with respect to such
project for the calendar year preceding
the calendar year for which such
determination is made.
``(ii) Special rule for certain
census changes.--In the case of a HUD
hold harmless impacted project, the
area median gross income with respect
to such project for any calendar year
after 2008 (hereafter in this clause
referred to as the current calendar
year) shall be the greater of the
amount determined without regard to
this clause or the sum of--
``(I) the area median gross
income determined under the HUD
hold harmless policy with
respect to such project for
calendar year 2008, plus
``(II) any increase in the
area median gross income
determined under subparagraph
(B) (determined without regard
to the HUD hold harmless policy
and this subparagraph) with
respect to such project for the
current calendar year over the
area median gross income (as so
determined) with respect to
such project for calendar year
2008.
``(iii) HUD hold harmless policy.--
The term `HUD hold harmless policy'
means the regulations under which a
policy similar to the rules of clause
(i) applied to prevent a change in the
method of determining area median gross
income from resulting in a reduction in
the area median gross income determined
with respect to certain projects in
calendar years 2007 and 2008.
``(iv) HUD hold harmless impacted
project.--The term `HUD hold harmless
impacted project' means any project
with respect to which area median gross
income was determined under
subparagraph (B) for calendar year 2007
or 2008 if such determination would
have been less but for the HUD hold
harmless policy.''.
(b) Effective Date.--The amendment made by this section shall
apply to determinations of area median gross income for
calendar years after 2008.
SEC. 3010. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINATION REQUIREMENT
WHERE DETERMINATION NOT RELEVANT.
(a) In General.--Subparagraph (A) of section 142(d)(3) is
amended by adding at the end the following new sentence: ``The
preceding sentence shall not apply with respect to any project
for any year if during such year no residential unit in the
project is occupied by a new resident whose income exceeds the
applicable income limit.''.
(b) Effective Date.--The amendment made by this section shall
apply to years ending after the date of the enactment of this
Act.
Subtitle B--Single Family Housing
SEC. 3011. FIRST-TIME HOMEBUYER CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of
chapter 1 is amended by redesignating section 36 as section 37
and by inserting after section 35 the following new section:
``SEC. 36. FIRST-TIME HOMEBUYER CREDIT.
``(a) Allowance of Credit.--In the case of an individual who
is a first-time homebuyer of a principal residence in the
United States during a taxable year, there shall be allowed as
a credit against the tax imposed by this subtitle for such
taxable year an amount equal to 10 percent of the purchase
price of the residence.
``(b) Limitations.--
``(1) Dollar limitation.--
``(A) In general.--Except as otherwise
provided in this paragraph, the credit allowed
under subsection (a) shall not exceed $7,500.
``(B) Married individuals filing
separately.--In the case of a married
individual filing a separate return,
subparagraph (A) shall be applied by
substituting `$3,750' for `$7,500'.
``(C) Other individuals.--If two or more
individuals who are not married purchase a
principal residence, the amount of the credit
allowed under subsection (a) shall be allocated
among such individuals in such manner as the
Secretary may prescribe, except that the total
amount of the credits allowed to all such
individuals shall not exceed $7,500.
``(2) Limitation based on modified adjusted gross
income.--
``(A) In general.--The amount allowable as a
credit under subsection (a) (determined without
regard to this paragraph) for the taxable year
shall be reduced (but not below zero) by the
amount which bears the same ratio to the amount
which is so allowable as--
``(i) the excess (if any) of--
``(I) the taxpayer's modified
adjusted gross income for such
taxable year, over
``(II) $75,000 ($150,000 in
the case of a joint return),
bears to
``(ii) $20,000.
``(B) Modified adjusted gross income.--For
purposes of subparagraph (A), the term
`modified adjusted gross income' means the
adjusted gross income of the taxpayer for the
taxable year increased by any amount excluded
from gross income under section 911, 931, or
933.
``(c) Definitions.--For purposes of this section--
``(1) First-time homebuyer.--The term `first-time
homebuyer' means any individual if such individual (and
if married, such individual's spouse) had no present
ownership interest in a principal residence during the
3-year period ending on the date of the purchase of the
principal residence to which this section applies.
``(2) Principal residence.--The term `principal
residence' has the same meaning as when used in section
121.
``(3) Purchase.--
``(A) In general.--The term `purchase' means
any acquisition, but only if--
``(i) the property is not acquired
from a person related to the person
acquiring such property, and
``(ii) the basis of the property in
the hands of the person acquiring such
property is not determined--
``(I) in whole or in part by
reference to the adjusted basis
of such property in the hands
of the person from whom
acquired, or
``(II) under section 1014(a)
(relating to property acquired
from a decedent).
``(B) Construction.--A residence which is
constructed by the taxpayer shall be treated as
purchased by the taxpayer on the date the
taxpayer first occupies such residence.
``(4) Purchase price.--The term `purchase price'
means the adjusted basis of the principal residence on
the date such residence is purchased.
``(5) Related persons.--A person shall be treated as
related to another person if the relationship between
such persons would result in the disallowance of losses
under section 267 or 707(b) (but, in applying section
267(b) and (c) for purposes of this section, paragraph
(4) of section 267(c) shall be treated as providing
that the family of an individual shall include only his
spouse, ancestors, and lineal descendants).
``(d) Exceptions.--No credit under subsection (a) shall be
allowed to any taxpayer for any taxable year with respect to
the purchase of a residence if--
``(1) a credit under section 1400C (relating to
first-time homebuyer in the District of Columbia) is
allowable to the taxpayer (or the taxpayer's spouse)
for such taxable year or any prior taxable year,
``(2) the residence is financed by the proceeds of a
qualified mortgage issue the interest on which is
exempt from tax under section 103,
``(3) the taxpayer is a nonresident alien, or
``(4) the taxpayer disposes of such residence (or
such residence ceases to be the principal residence of
the taxpayer (and, if married, the taxpayer's spouse))
before the close of such taxable year.
``(e) Reporting.--If the Secretary requires information
reporting under section 6045 by a person described in
subsection (e)(2) thereof to verify the eligibility of
taxpayers for the credit allowable by this section, the
exception provided by section 6045(e) shall not apply.
``(f) Recapture of Credit.--
``(1) In general.--Except as otherwise provided in
this subsection, if a credit under subsection (a) is
allowed to a taxpayer, the tax imposed by this chapter
shall be increased by 6\2/3\ percent of the amount of
such credit for each taxable year in the recapture
period.
``(2) Acceleration of recapture.--If a taxpayer
disposes of the principal residence with respect to
which a credit was allowed under subsection (a) (or
such residence ceases to be the principal residence of
the taxpayer (and, if married, the taxpayer's spouse))
before the end of the recapture period--
``(A) the tax imposed by this chapter for the
taxable year of such disposition or cessation
shall be increased by the excess of the amount
of the credit allowed over the amounts of tax
imposed by paragraph (1) for preceding taxable
years, and
``(B) paragraph (1) shall not apply with
respect to such credit for such taxable year or
any subsequent taxable year.
``(3) Limitation based on gain.--In the case of the
sale of the principal residence to a person who is not
related to the taxpayer, the increase in tax determined
under paragraph (2) shall not exceed the amount of gain
(if any) on such sale. Solely for purposes of the
preceding sentence, the adjusted basis of such
residence shall be reduced by the amount of the credit
allowed under subsection (a) to the extent not
previously recaptured under paragraph (1).
``(4) Exceptions.--
``(A) Death of taxpayer.--Paragraphs (1) and
(2) shall not apply to any taxable year ending
after the date of the taxpayer's death.
``(B) Involuntary conversion.--Paragraph (2)
shall not apply in the case of a residence
which is compulsorily or involuntarily
converted (within the meaning of section
1033(a)) if the taxpayer acquires a new
principal residence during the 2-year period
beginning on the date of the disposition or
cessation referred to in paragraph (2).
Paragraph (2) shall apply to such new principal
residence during the recapture period in the
same manner as if such new principal residence
were the converted residence.
``(C) Transfers between spouses or incident
to divorce.--In the case of a transfer of a
residence to which section 1041(a) applies--
``(i) paragraph (2) shall not apply
to such transfer, and
``(ii) in the case of taxable years
ending after such transfer, paragraphs
(1) and (2) shall apply to the
transferee in the same manner as if
such transferee were the transferor
(and shall not apply to the
transferor).
``(5) Joint returns.--In the case of a credit allowed
under subsection (a) with respect to a joint return,
half of such credit shall be treated as having been
allowed to each individual filing such return for
purposes of this subsection.
``(6) Return requirement.--If the tax imposed by this
chapter for the taxable year is increased under this
subsection, the taxpayer shall, notwithstanding section
6012, be required to file a return with respect to the
taxes imposed under this subtitle.
``(7) Recapture period.--For purposes of this
subsection, the term `recapture period' means the 15
taxable years beginning with the second taxable year
following the taxable year in which the purchase of the
principal residence for which a credit is allowed under
subsection (a) was made.
``(g) Election to Treat Purchase in Prior Year.--In the case
of a purchase of a principal residence after December 31, 2008,
and before July 1, 2009, a taxpayer may elect to treat such
purchase as made on December 31, 2008, for purposes of this
section (other than subsection (c)).
``(h) Application of Section.--This section shall only apply
to a principal residence purchased by the taxpayer on or after
April 9, 2008, and before July 1, 2009.''.
(b) Conforming Amendments.--
(1) Section 26(b)(2) is amended by striking ``and''
at the end of subparagraph (U), by striking the period
and inserting ``, and'' and the end of subparagraph
(V), and by inserting after subparagraph (V) the
following new subparagraph:
``(W) section 36(f) (relating to recapture of
homebuyer credit).''.
(2) Section 6211(b)(4)(A) is amended by striking
``34,'' and all that follows through ``6428'' and
inserting ``34, 35, 36, 53(e), and 6428''.
(3) Section 1324(b)(2) of title 31, United States
Code, is amended by inserting ``36,'' after ``35,''.
(4) The table of sections for subpart C of part IV of
subchapter A of chapter 1 is amended by redesignating
the item relating to section 36 as an item relating to
section 37 and by inserting before such item the
following new item:
``Sec. 36. First-time homebuyer credit.''.
(c) Effective Date.--The amendments made by this section
shall apply to residences purchased on or after April 9, 2008,
in taxable years ending on or after such date.
SEC. 3012. ADDITIONAL STANDARD DEDUCTION FOR REAL PROPERTY TAXES FOR
NONITEMIZERS.
(a) In General.--Section 63(c)(1) (defining standard
deduction) is amended by striking ``and'' at the end of
subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``, and'', and by adding at the
end the following new subparagraph:
``(C) in the case of any taxable year
beginning in 2008, the real property tax
deduction.''.
(b) Definition.--Section 63(c) is amended by adding at the
end the following new paragraph:
``(7) Real property tax deduction.--For purposes of
paragraph (1), the real property tax deduction is the
lesser of--
``(A) the amount allowable as a deduction
under this chapter for State and local taxes
described in section 164(a)(1), or
``(B) $500 ($1,000 in the case of a joint
return).
Any taxes taken into account under section 62(a) shall
not be taken into account under this paragraph.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2007.
Subtitle C--General Provisions
SEC. 3021. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING BOND RULES.
(a) Temporary Increase in Volume Cap.--
(1) In general.--Subsection (d) of section 146 is
amended by adding at the end the following new
paragraph:
``(5) Increase and set aside for housing bonds for
2008.--
``(A) Increase for 2008.--In the case of
calendar year 2008, the State ceiling for each
State shall be increased by an amount equal to
$11,000,000,000 multiplied by a fraction--
``(i) the numerator of which is the
State ceiling applicable to the State
for calendar year 2008, determined
without regard to this paragraph, and
``(ii) the denominator of which is
the sum of the State ceilings
determined under clause (i) for all
States.
``(B) Set aside.--
``(i) In general.--Any amount of the
State ceiling for any State which is
attributable to an increase under this
paragraph shall be allocated solely for
one or more qualified housing issues.
``(ii) Qualified housing issue.--For
purposes of this paragraph, the term
`qualified housing issue' means--
``(I) an issue described in
section 142(a)(7) (relating to
qualified residential rental
projects), or
``(II) a qualified mortgage
issue (determined by
substituting `12-month period'
for `42-month period' each
place it appears in section
143(a)(2)(D)(i)).''.
(2) Carryforward of unused limitations.--Subsection
(f) of section 146 is amended by adding at the end the
following new paragraph:
``(6) Special rules for increased volume cap under
subsection (d)(5).--No amount which is attributable to
the increase under subsection (d)(5) may be used--
``(A) for any issue other than a qualified
housing issue (as defined in subsection
(d)(5)), or
``(B) to issue any bond after calendar year
2010.''.
(b) Temporary Rule for Use of Qualified Mortgage Bonds
Proceeds for Subprime Refinancing Loans.--
(1) In general.--Section 143(k) (relating to other
definitions and special rules) is amended by adding at
the end the following new paragraph:
``(12) Special rules for subprime refinancings.--
``(A) In general.--Notwithstanding the
requirements of subsection (i)(1), the proceeds
of a qualified mortgage issue may be used to
refinance a mortgage on a residence which was
originally financed by the mortgagor through a
qualified subprime loan.
``(B) Special rules.--In applying
subparagraph (A) to any refinancing--
``(i) subsection (a)(2)(D)(i) shall
be applied by substituting `12-month
period' for `42-month period' each
place it appears,
``(ii) subsection (d) (relating to 3-
year requirement) shall not apply, and
``(iii) subsection (e) (relating to
purchase price requirement) shall be
applied by using the market value of
the residence at the time of
refinancing in lieu of the acquisition
cost.
``(C) Qualified subprime loan.--The term
`qualified subprime loan' means an adjustable
rate single-family residential mortgage loan
made after December 31, 2001, and before
January 1, 2008, that the bond issuer
determines would be reasonably likely to cause
financial hardship to the borrower if not
refinanced.
``(D) Termination.--This paragraph shall not
apply to any bonds issued after December 31,
2010.''.
(c) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment of
this Act.
SEC. 3022. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON TAX-EXEMPT
HOUSING BONDS, LOW-INCOME HOUSING TAX CREDIT, AND
REHABILITATION CREDIT.
(a) Tax-Exempt Interest on Certain Housing Bonds Exempted
From Alternative Minimum Tax.--
(1) In general.--Subparagraph (C) of section 57(a)(5)
(relating to specified private activity bonds) is
amended by redesignating clauses (iii) and (iv) as
clauses (iv) and (v), respectively, and by inserting
after clause (ii) the following new clause:
``(iii) Exception for certain housing
bonds.--For purposes of clause (i), the
term `private activity bond' shall not
include any bond issued after the date
of the enactment of this clause if such
bond is--
``(I) an exempt facility bond
issued as part of an issue 95
percent or more of the net
proceeds of which are to be
used to provide qualified
residential rental projects (as
defined in section 142(d)),
``(II) a qualified mortgage
bond (as defined in section
143(a)), or
``(III) a qualified veterans'
mortgage bond (as defined in
section 143(b)).
The preceding sentence shall not apply
to any refunding bond unless such
preceding sentence applied to the
refunded bond (or in the case of a
series of refundings, the original
bond).''.
(2) No adjustment to adjusted current earnings.--
Subparagraph (B) of section 56(g)(4) is amended by
adding at the end the following new clause:
``(iii) Tax exempt interest on
certain housing bonds.--Clause (i)
shall not apply in the case of any
interest on a bond to which section
57(a)(5)(C)(iii) applies.''.
(b) Allowance of Low-Income Housing Credit Against
Alternative Minimum Tax.--Subparagraph (B) of section 38(c)(4)
(relating to specified credits) is amended by redesignating
clauses (ii) through (iv) as clauses (iii) through (v) and
inserting after clause (i) the following new clause:
``(ii) the credit determined under
section 42 to the extent attributable
to buildings placed in service after
December 31, 2007,''.
(c) Allowance of Rehabilitation Credit Against Alternative
Minimum Tax.--Subparagraph (B) of section 38(c)(4), as amended
by subsection (b), is amended by striking ``and'' at the end of
clause (iv), by redesignating clause (v) as clause (vi), and by
inserting after clause (iv) the following new clause:
``(v) the credit determined under
section 47 to the extent attributable
to qualified rehabilitation
expenditures properly taken into
account for periods after December 31,
2007, and''.
(d) Effective Date.--
(1) Housing bonds.--The amendments made by subsection
(a) shall apply to bonds issued after the date of the
enactment of this Act.
(2) Low income housing credit.--The amendments made
by subsection (b) shall apply to credits determined
under section 42 of the Internal Revenue Code of 1986
to the extent attributable to buildings placed in
service after December 31, 2007.
(3) Rehabilitation credit.--The amendments made by
subsection (c) shall apply to credits determined under
section 47 of the Internal Revenue Code of 1986 to the
extent attributable to qualified rehabilitation
expenditures properly taken into account for periods
after December 31, 2007.
SEC. 3023. BONDS GUARANTEED BY FEDERAL HOME LOAN BANKS ELIGIBLE FOR
TREATMENT AS TAX-EXEMPT BONDS.
(a) In General.--Subparagraph (A) of section 149(b)(3)
(relating to exceptions for certain insurance programs) is
amended by striking ``or'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting
``, or'' and by adding at the end the following new clause:
``(iv) subject to subparagraph (E),
any guarantee by a Federal home loan
bank made in connection with the
original issuance of a bond during the
period beginning on the date of the
enactment of this clause and ending on
December 31, 2010 (or a renewal or
extension of a guarantee so made).''.
(b) Safety and Soundness Requirements.--Paragraph (3) of
section 149(b) is amended by adding at the end the following
new subparagraph:
``(E) Safety and soundness requirements for
federal home loan banks.--Clause (iv) of
subparagraph (A) shall not apply to any
guarantee by a Federal home loan bank unless
such bank meets safety and soundness collateral
requirements for such guarantees which are at
least as stringent as such requirements which
apply under regulations applicable to such
guarantees by Federal home loan banks as in
effect on April 9, 2008.''.
(c) Effective Date.--The amendments made by this section
shall apply to guarantees made after the date of the enactment
of this Act.
SEC. 3024. MODIFICATION OF RULES PERTAINING TO FIRPTA NONFOREIGN
AFFIDAVITS.
(a) In General.--Subsection (b) of section 1445 (relating to
exemptions) is amended by adding at the end the following:
``(9) Alternative procedure for furnishing nonforeign
affidavit.--For purposes of paragraphs (2) and (7)--
``(A) In general.--Paragraph (2) shall be
treated as applying to a transaction if, in
connection with a disposition of a United
States real property interest--
``(i) the affidavit specified in
paragraph (2) is furnished to a
qualified substitute, and
``(ii) the qualified substitute
furnishes a statement to the transferee
stating, under penalty of perjury, that
the qualified substitute has such
affidavit in his possession.
``(B) Regulations.--The Secretary shall
prescribe such regulations as may be necessary
or appropriate to carry out this paragraph.''.
(b) Qualified Substitute.--Subsection (f) of section 1445
(relating to definitions) is amended by adding at the end the
following new paragraph:
``(6) Qualified substitute.--The term `qualified
substitute' means, with respect to a disposition of a
United States real property interest--
``(A) the person (including any attorney or
title company) responsible for closing the
transaction, other than the transferor's agent,
and
``(B) the transferee's agent.''.
(c) Exemption Not To Apply if Knowledge or Notice That
Affidavit or Statement Is False.--
(1) In general.--Paragraph (7) of section 1445(b)
(relating to special rules for paragraphs (2) and (3))
is amended to read as follows:
``(7) Special rules for paragraphs (2), (3), and
(9).--Paragraph (2), (3), or (9) (as the case may be)
shall not apply to any disposition--
``(A) if--
``(i) the transferee or qualified
substitute has actual knowledge that
the affidavit referred to in such
paragraph, or the statement referred to
in paragraph (9)(A)(ii), is false, or
``(ii) the transferee or qualified
substitute receives a notice (as
described in subsection (d)) from a
transferor's agent, transferee's agent,
or qualified substitute that such
affidavit or statement is false, or
``(B) if the Secretary by regulations
requires the transferee or qualified substitute
to furnish a copy of such affidavit or
statement to the Secretary and the transferee
or qualified substitute fails to furnish a copy
of such affidavit or statement to the Secretary
at such time and in such manner as required by
such regulations.''.
(2) Liability.--
(A) Notice.--Paragraph (1) of section 1445(d)
(relating to notice of false affidavit; foreign
corporations) is amended to read as follows:
``(1) Notice of false affidavit; foreign
corporations.--If--
``(A) the transferor furnishes the transferee
or qualified substitute an affidavit described
in paragraph (2) of subsection (b) or a
domestic corporation furnishes the transferee
an affidavit described in paragraph (3) of
subsection (b), and
``(B) in the case of--
``(i) any transferor's agent--
``(I) such agent has actual
knowledge that such affidavit
is false, or
``(II) in the case of an
affidavit described in
subsection (b)(2) furnished by
a corporation, such corporation
is a foreign corporation, or
``(ii) any transferee's agent or
qualified substitute, such agent or
substitute has actual knowledge that
such affidavit is false,
such agent or qualified substitute shall so
notify the transferee at such time and in such
manner as the Secretary shall require by
regulations.''.
(B) Failure to furnish notice.--Paragraph (2)
of section 1445(d) (relating to failure to
furnish notice) is amended to read as follows:
``(2) Failure to furnish notice.--
``(A) In general.--If any transferor's agent,
transferee's agent, or qualified substitute is
required by paragraph (1) to furnish notice,
but fails to furnish such notice at such time
or times and in such manner as may be required
by regulations, such agent or substitute shall
have the same duty to deduct and withhold that
the transferee would have had if such agent or
substitute had complied with paragraph (1).
``(B) Liability limited to amount of
compensation.--An agent's or substitute's
liability under subparagraph (A) shall be
limited to the amount of compensation the agent
or substitute derives from the transaction.''.
(C) Conforming amendment.--The heading for
section 1445(d) is amended by striking ``or
Transferee's Agents'' and inserting ``,
Transferee's Agents, or Qualified
Substitutes''.
(d) Effective Date.--The amendments made by this section
shall apply to dispositions of United States real property
interests after the date of the enactment of this Act.
SEC. 3025. MODIFICATION OF DEFINITION OF TAX-EXEMPT USE PROPERTY FOR
PURPOSES OF THE REHABILITATION CREDIT.
(a) In General.--Subclause (I) of section 47(c)(2)(B)(v) is
amended by striking ``section 168(h)'' and inserting ``section
168(h), except that `50 percent' shall be substituted for `35
percent' in paragraph (1)(B)(iii) thereof''.
(b) Effective Date.--The amendments made by this section
shall apply to expenditures properly taken into account for
periods after December 31, 2007.
SEC. 3026. EXTENSION OF SPECIAL RULE FOR MORTGAGE REVENUE BONDS FOR
RESIDENCES LOCATED IN DISASTER AREAS.
(a) In General.--Paragraph (11) of section 143(k) is
amended--
(1) by striking ``December 31, 1996'' and inserting
``May 1, 2008'', and
(2) by striking ``January 1, 1999'' and inserting
``January 1, 2010''.
(b) Effective Date.--The amendments made by this section
shall apply to bonds issued after May 1, 2008.
SEC. 3027. TRANSFER OF FUNDS APPROPRIATED TO CARRY OUT 2008 RECOVERY
REBATES FOR INDIVIDUALS.
Of the funds made available by section 101(e)(1)(A) of the
Economic Stimulus Act of 2008 (Public Law 110-185), the
Secretary of the Treasury may transfer funds among the accounts
specified in such section to carry out section 6428 of the
Internal Revenue Code of 1986. The Secretary shall provide
advance notification of any such transfer to the Committees on
Appropriations of the House of Representatives and the Senate,
and any transfer greater than $5,000,000 shall be subject to
the approval of such Committees.
TITLE II--REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS
Subtitle A--Foreign Currency and Other Qualified Activities
SEC. 3031. REVISIONS TO REIT INCOME TESTS.
(a) Foreign Currency Gains Not Gross Income in Applying REIT
Income Tests.--Section 856 (defining real estate investment
trust) is amended by adding at the end the following new
subsection:
``(n) Rules Regarding Foreign Currency Transactions.--
``(1) In general.--For purposes of this part--
``(A) passive foreign exchange gain for any
taxable year shall not constitute gross income
for purposes of subsection (c)(2), and
``(B) real estate foreign exchange gain for
any taxable year shall not constitute gross
income for purposes of subsection (c)(3).
``(2) Real estate foreign exchange gain.--For
purposes of this subsection, the term `real estate
foreign exchange gain' means--
``(A) foreign currency gain (as defined in
section 988(b)(1)) which is attributable to--
``(i) any item of income or gain
described in subsection (c)(3),
``(ii) the acquisition or ownership
of obligations secured by mortgages on
real property or on interests in real
property (other than foreign currency
gain attributable to any item of income
or gain described in clause (i)), or
``(iii) becoming or being the obligor
under obligations secured by mortgages
on real property or on interests in
real property (other than foreign
currency gain attributable to any item
of income or gain described in clause
(i)),
``(B) section 987 gain attributable to a
qualified business unit (as defined by section
989) of the real estate investment trust, but
only if such qualified business unit meets the
requirements under--
``(i) subsection (c)(3) for the
taxable year, and
``(ii) subsection (c)(4)(A) at the
close of each quarter that the real
estate investment trust has directly or
indirectly held the qualified business
unit, and
``(C) any other foreign currency gain as
determined by the Secretary.
``(3) Passive foreign exchange gain.--For purposes of
this subsection, the term `passive foreign exchange
gain' means--
``(A) real estate foreign exchange gain,
``(B) foreign currency gain (as defined in
section 988(b)(1)) which is not described in
subparagraph (A) and which is attributable to--
``(i) any item of income or gain
described in subsection (c)(2),
``(ii) the acquisition or ownership
of obligations (other than foreign
currency gain attributable to any item
of income or gain described in clause
(i)), or
``(iii) becoming or being the obligor
under obligations (other than foreign
currency gain attributable to any item
of income or gain described in clause
(i)), and
``(C) any other foreign currency gain as
determined by the Secretary.
``(4) Exception for income from substantial and
regular trading.--Notwithstanding this subsection or
any other provision of this part, any section 988 gain
derived by a corporation, trust, or association from
dealing, or engaging in substantial and regular
trading, in securities (as defined in section
475(c)(2)) shall constitute gross income which does not
qualify under paragraph (2) or (3) of subsection (c).
This paragraph shall not apply to income which does not
constitute gross income by reason of subsection
(c)(5)(G).''.
(b) Addition to REIT Hedging Rule.--Subparagraph (G) of
section 856(c)(5) is amended to read as follows:
``(G) Treatment of certain hedging
instruments.--Except to the extent as
determined by the Secretary--
``(i) any income of a real estate
investment trust from a hedging
transaction (as defined in clause (ii)
or (iii) of section 1221(b)(2)(A))
which is clearly identified pursuant to
section 1221(a)(7), including gain from
the sale or disposition of such a
transaction, shall not constitute gross
income under paragraphs (2) and (3) to
the extent that the transaction hedges
any indebtedness incurred or to be
incurred by the trust to acquire or
carry real estate assets, and
``(ii) any income of a real estate
investment trust from a transaction
entered into by the trust primarily to
manage risk of currency fluctuations
with respect to any item of income or
gain described in paragraph (2) or (3)
(or any property which generates such
income or gain), including gain from
the termination of such a transaction,
shall not constitute gross income under
paragraphs (2) and (3), but only if
such transaction is clearly identified
as such before the close of the day on
which it was acquired, originated, or
entered into (or such other time as the
Secretary may prescribe).''.
(c) Authority to Exclude Items of Income From REIT Income
Tests.--Section 856(c)(5) is amended by adding at the end the
following new subparagraph:
``(J) Secretarial authority to exclude other
items of income.--To the extent necessary to
carry out the purposes of this part, the
Secretary is authorized to determine, solely
for purposes of this part, whether any item of
income or gain which--
``(i) does not otherwise qualify
under paragraph (2) or (3) may be
considered as not constituting gross
income for purposes of paragraphs (2)
or (3), or
``(ii) otherwise constitutes gross
income not qualifying under paragraph
(2) or (3) may be considered as gross
income which qualifies under paragraph
(2) or (3).''.
SEC. 3032. REVISIONS TO REIT ASSET TESTS.
(a) Clarification of Valuation Test.--The first sentence in
the matter following section 856(c)(4)(B)(iii)(III) is amended
by inserting ``(including a discrepancy caused solely by the
change in the foreign currency exchange rate used to value a
foreign asset)'' after ``such requirements''.
(b) Clarification of Permissible Asset Category.--Section
856(c)(5), as amended by section 3031(c), is amended by adding
at the end the following new subparagraph:
``(K) Cash.--If the real estate investment
trust or its qualified business unit (as
defined in section 989) uses any foreign
currency as its functional currency (as defined
in section 985(b)), the term `cash' includes
such foreign currency but only to the extent
such foreign currency--
``(i) is held for use in the normal
course of the activities of the trust
or qualified business unit which give
rise to items of income or gain
described in paragraph (2) or (3) of
subsection (c) or are directly related
to acquiring or holding assets
described in subsection (c)(4), and
``(ii) is not held in connection with
an activity described in subsection
(n)(4).''.
SEC. 3033. CONFORMING FOREIGN CURRENCY REVISIONS.
(a) Net Income From Foreclosure Property.--Clause (i) of
section 857(b)(4)(B) is amended to read as follows:
``(i) gain (including any foreign
currency gain, as defined in section
988(b)(1)) from the sale or other
disposition of foreclosure property
described in section 1221(a)(1) and the
gross income for the taxable year
derived from foreclosure property (as
defined in section 856(e)), but only to
the extent such gross income is not
described in (or, in the case of
foreign currency gain, not attributable
to gross income described in) section
856(c)(3) other than subparagraph (F)
thereof, over''.
(b) Net Income From Prohibited Transactions.--Clause (i) of
section 857(b)(6)(B) is amended to read as follows:
``(i) the term `net income derived
from prohibited transactions' means the
excess of the gain (including any
foreign currency gain, as defined in
section 988(b)(1)) from prohibited
transactions over the deductions
(including any foreign currency loss,
as defined in section 988(b)(2))
allowed by this chapter which are
directly connected with prohibited
transactions;''.
Subtitle B--Taxable REIT Subsidiaries
SEC. 3041. CONFORMING TAXABLE REIT SUBSIDIARY ASSET TEST.
Section 856(c)(4)(B)(ii) is amended--
(1) by striking ``20 percent'' and inserting ``25
percent'', and
(2) by striking ``REIT subsidiaries'' and all that
follows, and inserting ``REIT subsidiaries,''.
Subtitle C--Dealer Sales
SEC. 3051. HOLDING PERIOD UNDER SAFE HARBOR.
(a) In General.--Section 857(b)(6) (relating to income from
prohibited transactions) is amended--
(1) by striking ``4 years'' in subparagraphs (C)(i),
(C)(iv), and (D)(i) and inserting ``2 years'',
(2) by striking ``4-year period'' in subparagraphs
(C)(ii), (D)(ii), and (D)(iii) and inserting ``2-year
period'', and
(3) by striking ``real estate asset''and all that
follows through ``if'' in the matter preceding clause
(i) of subparagraphs (C) and (D), respectively, and
inserting ``real estate asset (as defined in section
856(c)(5)(B)) and which is described in section
1221(a)(1) if''.
(b) Retention of Existing Law.--Section 857(b)(6) is
amended--
(1) by striking subparagraph (G) and redesignating
subparagraphs (H) and (I) as subparagraphs (G) and (H),
respectively, and
(2) in subparagraph (G), as so redesignated, by
adding at the end the following: ``For purposes of the
preceding sentence, the reference to subparagraph (D)
shall be a reference to such subparagraph as in effect
on the day before the enactment of the Housing
Assistance Tax Act of 2008, as modified by subparagraph
(G) as so in effect.''.
SEC. 3052. DETERMINING VALUE OF SALES UNDER SAFE HARBOR.
Section 857(b)(6) is amended--
(1) by striking the semicolon at the end of
subparagraph (C)(iii) and inserting ``, or (III) the
fair market value of property (other than sales of
foreclosure property or sales to which section 1033
applies) sold during the taxable year does not exceed
10 percent of the fair market value of all of the
assets of the trust as of the beginning of the taxable
year;'', and
(2) by adding ``or'' at the end of subclause (II) of
subparagraph (D)(iv) and by adding at the end of such
subparagraph the following new subclause:
``(III) the fair market value of
property (other than sales of
foreclosure property or sales to which
section 1033 applies) sold during the
taxable year does not exceed 10 percent
of the fair market value of all of the
assets of the trust as of the beginning
of the taxable year,''.
Subtitle D--Health Care REITs
SEC. 3061. CONFORMITY FOR HEALTH CARE FACILITIES.
(a) Related Party Rentals.--Subparagraph (B) of section
856(d)(8) (relating to special rule for taxable REIT
subsidiaries) is amended to read as follows:
``(B) Exception for certain lodging
facilities and health care property.--The
requirements of this subparagraph are met with
respect to an interest in real property which
is a qualified lodging facility (as defined in
paragraph (9)(D)) or a qualified health care
property (as defined in subsection
(e)(6)(D)(i)) leased by the trust to a taxable
REIT subsidiary of the trust if the property is
operated on behalf of such subsidiary by a
person who is an eligible independent
contractor. For purposes of this section, a
taxable REIT subsidiary is not considered to be
operating or managing a qualified health care
property or qualified lodging facility solely
because it--
``(i) directly or indirectly
possesses a license, permit, or similar
instrument enabling it to do so, or
``(ii) employs individuals working at
such facility or property located
outside the United States, but only if
an eligible independent contractor is
responsible for the daily supervision
and direction of such individuals on
behalf of the taxable REIT subsidiary
pursuant to a management agreement or
similar service contract.''.
(b) Eligible Independent Contractor.--Subparagraphs (A) and
(B) of section 856(d)(9) (relating to eligible independent
contractor) are amended to read as follows:
``(A) In general.--The term `eligible
independent contractor' means, with respect to
any qualified lodging facility or qualified
health care property (as defined in subsection
(e)(6)(D)(i)), any independent contractor if,
at the time such contractor enters into a
management agreement or other similar service
contract with the taxable REIT subsidiary to
operate such qualified lodging facility or
qualified health care property, such contractor
(or any related person) is actively engaged in
the trade or business of operating qualified
lodging facilities or qualified health care
properties, respectively, for any person who is
not a related person with respect to the real
estate investment trust or the taxable REIT
subsidiary.
``(B) Special rules.--Solely for purposes of
this paragraph and paragraph (8)(B), a person
shall not fail to be treated as an independent
contractor with respect to any qualified
lodging facility or qualified health care
property (as so defined) by reason of the
following:
``(i) The taxable REIT subsidiary
bears the expenses for the operation of
such qualified lodging facility or
qualified health care property pursuant
to the management agreement or other
similar service contract.
``(ii) The taxable REIT subsidiary
receives the revenues from the
operation of such qualified lodging
facility or qualified health care
property, net of expenses for such
operation and fees payable to the
operator pursuant to such agreement or
contract.
``(iii) The real estate investment
trust receives income from such person
with respect to another property that
is attributable to a lease of such
other property to such person that was
in effect as of the later of--
``(I) January 1, 1999, or
``(II) the earliest date that
any taxable REIT subsidiary of
such trust entered into a
management agreement or other
similar service contract with
such person with respect to
such qualified lodging facility
or qualified health care
property.''.
(c) Taxable Reit Subsidiaries.--The last sentence of section
856(l)(3) is amended--
(1) by inserting ``or a health care facility'' after
``a lodging facility'', and
(2) by inserting ``or health care facility'' after
``such lodging facility''.
Subtitle E--Effective Dates
SEC. 3071. EFFECTIVE DATES.
(a) In General.--Except as otherwise provided in this
section, the amendments made by this title shall apply to
taxable years beginning after the date of the enactment of this
Act.
(b) REIT Income Tests.--
(1) The amendments made by section 3031(a) and (c)
shall apply to gains and items of income recognized
after the date of the enactment of this Act.
(2) The amendment made by section 3031(b) shall apply
to transactions entered into after the date of the
enactment of this Act.
(c) Conforming Foreign Currency Revisions.--
(1) The amendment made by section 3033(a) shall apply
to gains recognized after the date of the enactment of
this Act.
(2) The amendment made by section 3033(b) shall apply
to gains and deductions recognized after the date of
the enactment of this Act.
(d) Dealer Sales.--The amendments made by subtitle C shall
apply to sales made after the date of the enactment of this
Act.
TITLE III--REVENUE PROVISIONS
Subtitle A--General Provisions
SEC. 3081. ELECTION TO ACCELERATE THE AMT AND RESEARCH CREDITS IN LIEU
OF BONUS DEPRECIATION.
(a) In General.--Section 168(k) is amended by adding at the
end the following new paragraph:
``(4) Election to accelerate the amt and research
credits in lieu of bonus depreciation.--
``(A) In general.--If a corporation elects to
have this paragraph apply for the first taxable
year of the taxpayer ending after March 31,
2008, in the case of such taxable year and each
subsequent taxable year--
``(i) paragraph (1) shall not apply
to any eligible qualified property
placed in service by the taxpayer,
``(ii) the applicable depreciation
method used under this section with
respect to such property shall be the
straight line method, and
``(iii) each of the limitations
described in subparagraph (B) for any
such taxable year shall be increased by
the bonus depreciation amount which
is--
``(I) determined for such
taxable year under subparagraph
(C), and
``(II) allocated to such
limitation under subparagraph
(E).
``(B) Limitations to be increased.--The
limitations described in this subparagraph
are--
``(i) the limitation imposed by
section 38(c), and
``(ii) the limitation imposed by
section 53(c).
``(C) Bonus depreciation amount.--For
purposes of this paragraph--
``(i) In general.--The bonus
depreciation amount for any taxable
year is an amount equal to 20 percent
of the excess (if any) of--
``(I) the aggregate amount of
depreciation which would be
allowed under this section for
eligible qualified property
placed in service by the
taxpayer during such taxable
year if paragraph (1) applied
to all such property, over
``(II) the aggregate amount
of depreciation which would be
allowed under this section for
eligible qualified property
placed in service by the
taxpayer during such taxable
year if paragraph (1) did not
apply to any such property.
The aggregate amounts determined under
subclauses (I) and (II) shall be
determined without regard to any
election made under subsection
(b)(2)(C), (b)(3)(D), or (g)(7) and
without regard to subparagraph (A)(ii).
``(ii) Maximum amount.--The bonus
depreciation amount for any taxable
year shall not exceed the maximum
increase amount under clause (iii),
reduced (but not below zero) by the sum
of the bonus depreciation amounts for
all preceding taxable years.
``(iii) Maximum increase amount.--For
purposes of clause (ii), the term
`maximum increase amount' means, with
respect to any corporation, the lesser
of--
``(I) $30,000,000, or
``(II) 6 percent of the sum
of the business credit increase
amount, and the AMT credit
increase amount, determined
with respect to such
corporation under subparagraph
(E).
``(iv) Aggregation rule.--All
corporations which are treated as a
single employer under section 52(a)
shall be treated--
``(I) as 1 taxpayer for
purposes of this paragraph, and
``(II) as having elected the
application of this paragraph
if any such corporation so
elects.
``(D) Eligible qualified property.--For
purposes of this paragraph, the term `eligible
qualified property' means qualified property
under paragraph (2), except that in applying
paragraph (2) for purposes of this paragraph--
``(i) `March 31, 2008' shall be
substituted for `December 31, 2007'
each place it appears in subparagraph
(A) and clauses (i) and (ii) of
subparagraph (E) thereof, and
``(ii) only adjusted basis
attributable to manufacture,
construction, or production after March
31, 2008, and before January 1, 2009,
shall be taken into account under
subparagraph (B)(ii) thereof.
``(E) Allocation of bonus depreciation
amounts.--
``(i) In general.--Subject to clauses
(ii) and (iii), the taxpayer shall, at
such time and in such manner as the
Secretary may prescribe, specify the
portion (if any) of the bonus
depreciation amount for the taxable
year which is to be allocated to each
of the limitations described in
subparagraph (B) for such taxable year.
``(ii) Limitation on allocations.--
The portion of the bonus depreciation
amount which may be allocated under
clause (i) to the limitations described
in subparagraph (B) for any taxable
year shall not exceed--
``(I) in the case of the
limitation described in
subparagraph (B)(i), the excess
of the business credit increase
amount over the bonus
depreciation amount allocated
to such limitation for all
preceding taxable years, and
``(II) in the case of the
limitation described in
subparagraph (B)(ii), the
excess of the AMT credit
increase amount over the bonus
depreciation amount allocated
to such limitation for all
preceding taxable years.
``(iii) Business credit increase
amount.--For purposes of this
paragraph, the term `business credit
increase amount' means the amount equal
to the portion of the credit allowable
under section 38 (determined without
regard to subsection (c) thereof) for
the first taxable year ending after
March 31, 2008, which is allocable to
business credit carryforwards to such
taxable year which are--
``(I) from taxable years
beginning before January 1,
2006, and
``(II) properly allocable
(determined under the rules of
section 38(d)) to the research
credit determined under section
41(a).
``(iv) AMT credit increase amount.--
For purposes of this paragraph, the
term `AMT credit increase amount' means
the amount equal to the portion of the
minimum tax credit under section 53(b)
for the first taxable year ending after
March 31, 2008, determined by taking
into account only the adjusted minimum
tax for taxable years beginning before
January 1, 2006. For purposes of the
preceding sentence, credits shall be
treated as allowed on a first-in,
first-out basis.
``(F) Credit refundable.--For purposes of
section 6401(b), the aggregate increase in the
credits allowable under part IV of subchapter A
for any taxable year resulting from the
application of this paragraph shall be treated
as allowed under subpart C of such part (and
not any other subpart).
``(G) Other rules.--
``(i) Election.--Any election under
this paragraph (including any
allocation under subparagraph (E)) may
be revoked only with the consent of the
Secretary.
``(ii) Partnerships with electing
partners.--In the case of a corporation
making an election under subparagraph
(A) and which is a partner in a
partnership, for purposes of
determining such corporation's
distributive share of partnership items
under section 702--
``(I) paragraph (1) shall not
apply to any eligible qualified
property, and
``(II) the applicable
depreciation method used under
this section with respect to
such property shall be the
straight line method.
``(iii) Special rule for passenger
aircraft.--In the case of any passenger
aircraft, the written binding contract
limitation under paragraph
(2)(A)(iii)(I) shall not apply for
purposes of subparagraphs (C)(i)(I) and
(D).''.
(b) Application to Certain Automotive Partnerships.--
(1) In general.--If an applicable partnership elects
the application of this subsection--
(A) the partnership shall be treated as
having made a payment against the tax imposed
by chapter 1 of the Internal Revenue Code of
1986 for any applicable taxable year of the
partnership in the amount determined under
paragraph (3),
(B) in the case of any eligible qualified
property placed in service by the partnership
during any applicable taxable year--
(i) section 168(k) of such Code shall
not apply in determining the amount of
the deduction allowable with respect to
such property under section 168 of such
Code,
(ii) the applicable depreciation
method used with respect to such
property shall be the straight line
method, and
(C) the amount of the credit determined under
section 41 of such Code for any applicable
taxable year with respect to the partnership
shall be reduced by the amount of the deemed
payment under subparagraph (A) for the taxable
year.
(2) Treatment of deemed payment.--
(A) In general.--Notwithstanding any other
provision of the Internal Revenue Code of 1986,
the Secretary of the Treasury or his delegate
shall not use the payment of tax described in
paragraph (1) as an offset or credit against
any tax liability of the applicable partnership
or any partner but shall refund such payment to
the applicable partnership.
(B) No interest.--The payment described in
paragraph (1) shall not be taken into account
in determining any amount of interest under
such Code.
(3) Amount of deemed payment.--The amount determined
under this paragraph for any applicable taxable year
shall be the least of the following:
(A) The amount which would be determined for
the taxable year under section 168(k)(4)(C)(i)
of the Internal Revenue Code of 1986 (as added
by the amendments made by this section) if an
election under section 168(k)(4) of such Code
were in effect with respect to the partnership.
(B) The amount of the credit determined under
section 41 of such Code for the taxable year
with respect to the partnership.
(C) $30,000,000, reduced by the amount of any
payment under this subsection for any preceding
taxable year.
(4) Definitions.--For purposes of this subsection--
(A) Applicable partnership.--The term
``applicable partnership'' means a domestic
partnership that--
(i) was formed effective on August 3,
2007, and
(ii) will produce in excess of
675,000 automobiles during the period
beginning on January 1, 2008, and
ending on June 30, 2008.
(B) Applicable taxable year.--The term
``applicable taxable year'' means any taxable
year during which eligible qualified property
is placed in service.
(C) Eligible qualified property.--The term
``eligible qualified property'' has the meaning
given such term by section 168(k)(4)(D) of the
Internal Revenue Code of 1986 (as added by the
amendments made by this section).
(c) Conforming Amendment.--Section 1324(b)(2) of title 31,
United States Code, as amended by this Act, is amended--
(1) by inserting ``168(k)(4)(F),'' after ``36,'', and
(2) by inserting ``, or due under section 3081(b)(2)
of the Housing Assistance Tax Act of 2008'' before the
period at the end.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years ending after March 31, 2008.
SEC. 3082. CERTAIN GO ZONE INCENTIVES.
(a) Use of Amended Income Tax Returns to Take Into Account
Receipt of Certain Hurricane-Related Casualty Loss Grants by
Disallowing Previously Taken Casualty Loss Deductions.--
(1) In general.--Notwithstanding any other provision
of the Internal Revenue Code of 1986, if a taxpayer
claims a deduction for any taxable year with respect to
a casualty loss to a principal residence (within the
meaning of section 121 of such Code) resulting from
Hurricane Katrina, Hurricane Rita, or Hurricane Wilma
and in a subsequent taxable year receives a grant under
Public Law 109-148, 109-234, or 110-116 as
reimbursement for such loss, such taxpayer may elect to
file an amended income tax return for the taxable year
in which such deduction was allowed (and for any
taxable year to which such deduction is carried) and
reduce (but not below zero) the amount of such
deduction by the amount of such reimbursement.
(2) Time of filing amended return.--Paragraph (1)
shall apply with respect to any grant only if any
amended income tax returns with respect to such grant
are filed not later than the later of--
(A) the due date for filing the tax return
for the taxable year in which the taxpayer
receives such grant, or
(B) the date which is 1 year after the date
of the enactment of this Act.
(3) Waiver of penalties and interest.--Any
underpayment of tax resulting from the reduction under
paragraph (1) of the amount otherwise allowable as a
deduction shall not be subject to any penalty or
interest under such Code if such tax is paid not later
than 1 year after the filing of the amended return to
which such reduction relates.
(b) Waiver of Deadline on Construction of GO Zone Property
Eligible for Bonus Depreciation.--
(1) In general.--Subparagraph (B) of section
1400N(d)(3) is amended to read as follows:
``(B) without regard to `and before January
1, 2009' in clause (i) thereof, and''.
(2) Effective date.--The amendment made by this
subsection shall apply to property placed in service
after December 31, 2007.
(c) Inclusion of Certain Counties in Gulf Opportunity Zone
for Purposes of Tax-Exempt Bond Financing.--
(1) In general.--Subsection (a) of section 1400N is
amended by adding at the end the following new
paragraph:
``(8) Inclusion of certain counties.--For purposes of
this subsection, the Gulf Opportunity Zone includes
Colbert County, Alabama and Dallas County, Alabama.''.
(2) Effective date.--The amendment made by this
subsection shall take effect as if included in the
provisions of the Gulf Opportunity Zone Act of 2005 to
which it relates.
SEC. 3083. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT.
Subsection (b) of section 3101 of title 31, United States
Code, is amended by striking out the dollar limitation
contained in such subsection and inserting in lieu thereof
$10,615,000,000,000.
Subtitle B--Revenue Offsets
SEC. 3091. RETURNS RELATING TO PAYMENTS MADE IN SETTLEMENT OF PAYMENT
CARD AND THIRD PARTY NETWORK TRANSACTIONS.
(a) In General.--Subpart B of part III of subchapter A of
chapter 61 is amended by adding at the end the following new
section:
``SEC. 6050W. RETURNS RELATING TO PAYMENTS MADE IN SETTLEMENT OF
PAYMENT CARD AND THIRD PARTY NETWORK TRANSACTIONS.
``(a) In General.--Each payment settlement entity shall make
a return for each calendar year setting forth--
``(1) the name, address, and TIN of each
participating payee to whom one or more payments in
settlement of reportable payment transactions are made,
and
``(2) the gross amount of the reportable payment
transactions with respect to each such participating
payee.
Such return shall be made at such time and in such form and
manner as the Secretary may require by regulations.
``(b) Payment Settlement Entity.--For purposes of this
section--
``(1) In general.--The term `payment settlement
entity' means--
``(A) in the case of a payment card
transaction, the merchant acquiring entity, and
``(B) in the case of a third party network
transaction, the third party settlement
organization.
``(2) Merchant acquiring entity.--The term `merchant
acquiring entity' means the bank or other organization
which has the contractual obligation to make payment to
participating payees in settlement of payment card
transactions.
``(3) Third party settlement organization.--The term
`third party settlement organization' means the central
organization which has the contractual obligation to
make payment to participating payees of third party
network transactions.
``(4) Special rules related to intermediaries.--For
purposes of this section--
``(A) Aggregated payees.--In any case where
reportable payment transactions of more than
one participating payee are settled through an
intermediary--
``(i) such intermediary shall be
treated as the participating payee for
purposes of determining the reporting
obligations of the payment settlement
entity with respect to such
transactions, and
``(ii) such intermediary shall be
treated as the payment settlement
entity with respect to the settlement
of such transactions with the
participating payees.
``(B) Electronic payment facilitators.--In
any case where an electronic payment
facilitator or other third party makes payments
in settlement of reportable payment
transactions on behalf of the payment
settlement entity, the return under subsection
(a) shall be made by such electronic payment
facilitator or other third party in lieu of the
payment settlement entity.
``(c) Reportable Payment Transaction.--For purposes of this
section--
``(1) In general.--The term `reportable payment
transaction' means any payment card transaction and any
third party network transaction.
``(2) Payment card transaction.--The term `payment
card transaction' means any transaction in which a
payment card is accepted as payment.
``(3) Third party network transaction.--The term
`third party network transaction' means any transaction
which is settled through a third party payment network.
``(d) Other Definitions.--For purposes of this section--
``(1) Participating payee.--
``(A) In general.--The term `participating
payee' means--
``(i) in the case of a payment card
transaction, any person who accepts a
payment card as payment, and
``(ii) in the case of a third party
network transaction, any person who
accepts payment from a third party
settlement organization in settlement
of such transaction.
``(B) Exclusion of foreign persons.--Except
as provided by the Secretary in regulations or
other guidance, such term shall not include any
person with a foreign address.
``(C) Inclusion of governmental units.--The
term `person' includes any governmental unit
(and any agency or instrumentality thereof).
``(2) Payment card.--The term `payment card' means
any card which is issued pursuant to an agreement or
arrangement which provides for--
``(A) one or more issuers of such cards,
``(B) a network of persons unrelated to each
other, and to the issuer, who agree to accept
such cards as payment, and
``(C) standards and mechanisms for settling
the transactions between the merchant acquiring
entities and the persons who agree to accept
such cards as payment.
The acceptance as payment of any account number or
other indicia associated with a payment card shall be
treated for purposes of this section in the same manner
as accepting such payment card as payment.
``(3) Third party payment network.--The term `third
party payment network' means any agreement or
arrangement--
``(A) which involves the establishment of
accounts with a central organization by a
substantial number of persons who--
``(i) are unrelated to such
organization,
``(ii) provide goods or services, and
``(iii) have agreed to settle
transactions for the provision of such
goods or services pursuant to such
agreement or arrangement,
``(B) which provides for standards and
mechanisms for settling such transactions, and
``(C) which guarantees persons providing
goods or services pursuant to such agreement or
arrangement that such persons will be paid for
providing such goods or services.
Such term shall not include any agreement or
arrangement which provides for the issuance of payment
cards.
``(e) Exception for De Minimis Payments by Third Party
Settlement Organizations.--A third party settlement
organization shall be required to report any information under
subsection (a) with respect to third party network transactions
of any participating payee only if--
``(1) the amount which would otherwise be reported
under subsection (a)(2) with respect to such
transactions exceeds $20,000, and
``(2) the aggregate number of such transactions
exceeds 200.
``(f) Statements to Be Furnished to Persons With Respect to
Whom Information Is Required.--Every person required to make a
return under subsection (a) shall furnish to each person with
respect to whom such a return is required a written statement
showing--
``(1) the name, address, and phone number of the
information contact of the person required to make such
return, and
``(2) the gross amount of the reportable payment
transactions with respect to the person required to be
shown on the return.
The written statement required under the preceding sentence
shall be furnished to the person on or before January 31 of the
year following the calendar year for which the return under
subsection (a) was required to be made. Such statement may be
furnished electronically, and if so, the email address of the
person required to make such return may be shown in lieu of the
phone number.
``(g) Regulations.--The Secretary may prescribe such
regulations or other guidance as may be necessary or
appropriate to carry out this section, including rules to
prevent the reporting of the same transaction more than
once.''.
(b) Penalty for Failure to File.--
(1) Return.--Subparagraph (B) of section 6724(d)(1)
is amended--
(A) by striking ``or'' at the end of clause
(xx),
(B) by redesignating the clause (xix) that
follows clause (xx) as clause (xxi),
(C) by striking ``and'' at the end of clause
(xxi), as redesignated by subparagraph (B) and
inserting ``or'', and
(D) by adding at the end the following:
``(xxii) section 6050W (relating to
returns to payments made in settlement
of payment card transactions), and''.
(2) Statement.--Paragraph (2) of section 6724(d) is
amended by striking ``or'' at the end of subparagraph
(BB), by striking the period at the end of the
subparagraph (CC) and inserting ``, or'', and by
inserting after subparagraph (CC) the following:
``(DD) section 6050W(c) (relating to returns
relating to payments made in settlement of
payment card transactions).''.
(c) Application of Backup Withholding.--Paragraph (3) of
section 3406(b) is amended by striking ``or'' at the end of
subparagraph (D), by striking the period at the end of
subparagraph (E) and inserting ``, or'', and by adding at the
end the following new subparagraph:
``(F) section 6050W (relating to returns
relating to payments made in settlement of
payment card transactions).''.
(d) Clerical Amendment.--The table of sections for subpart B
of part III of subchapter A of chapter 61 is amended by
inserting after the item relating to section 6050V the
following:
``Sec. 6050W. Returns relating to payments made in settlement of payment
card transactions.''.
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall
apply to returns for calendar years beginning after
December 31, 2010.
(2) Application of backup withholding.--
(A) In general.--The amendment made by
subsection (c) shall apply to amounts paid
after December 31, 2011.
(B) Eligibility for tin matching program.--
Solely for purposes of carrying out any TIN
matching program established by the Secretary
under section 3406(i) of the Internal Revenue
Code of 1986--
(i) the amendments made this section
shall be treated as taking effect on
the date of the enactment of this Act,
and
(ii) each person responsible for
setting the standards and mechanisms
referred to in section 6050W(d)(2)(C)
of such Code, as added by this section,
for settling transactions involving
payment cards shall be treated in the
same manner as a payment settlement
entity.
SEC. 3092. GAIN FROM SALE OF PRINCIPAL RESIDENCE ALLOCATED TO
NONQUALIFIED USE NOT EXCLUDED FROM INCOME.
(a) In General.--Subsection (b) of section 121 of the
Internal Revenue Code of 1986 (relating to limitations) is
amended by adding at the end the following new paragraph:
``(4) Exclusion of gain allocated to nonqualified
use.--
``(A) In general.--Subsection (a) shall not
apply to so much of the gain from the sale or
exchange of property as is allocated to periods
of nonqualified use.
``(B) Gain allocated to periods of
nonqualified use.--For purposes of subparagraph
(A), gain shall be allocated to periods of
nonqualified use based on the ratio which--
``(i) the aggregate periods of
nonqualified use during the period such
property was owned by the taxpayer,
bears to
``(ii) the period such property was
owned by the taxpayer.
``(C) Period of nonqualified use.--For
purposes of this paragraph--
``(i) In general.--The term `period
of nonqualified use' means any period
(other than the portion of any period
preceding January 1, 2009) during which
the property is not used as the
principal residence of the taxpayer or
the taxpayer's spouse or former spouse.
``(ii) Exceptions.--The term `period
of nonqualified use' does not include--
``(I) any portion of the 5-
year period described in
subsection (a) which is after
the last date that such
property is used as the
principal residence of the
taxpayer or the taxpayer's
spouse,
``(II) any period (not to
exceed an aggregate period of
10 years) during which the
taxpayer or the taxpayer's
spouse is serving on qualified
official extended duty (as
defined in subsection
(d)(9)(C)) described in clause
(i), (ii), or (iii) of
subsection (d)(9)(A), and
``(III) any other period of
temporary absence (not to
exceed an aggregate period of 2
years) due to change of
employment, health conditions,
or such other unforeseen
circumstances as may be
specified by the Secretary.
``(D) Coordination with recognition of gain
attributable to depreciation.--For purposes of
this paragraph--
``(i) subparagraph (A) shall be
applied after the application of
subsection (d)(6), and
``(ii) subparagraph (B) shall be
applied without regard to any gain to
which subsection (d)(6) applies.''.
(b) Effective Date.--The amendment made by this section shall
apply to sales and exchanges after December 31, 2008.
SEC. 3093. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.
(a) In General.--Paragraphs (5)(D) and (6) of section 864(f)
are each amended by striking ``December 31, 2008'' and
inserting ``December 31, 2010''.
(b) Transitional Rule.--Subsection (f) of section 864 is
amended by adding at the end the following new paragraph:
``(7) Transition.--In the case of the first taxable
year to which this subsection applies, the increase (if
any) in the amount of the interest expense allocable to
sources within the United States by reason of the
application of this subsection shall be 30 percent of
the amount of such increase determined without regard
to this paragraph.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 2008.
SEC. 3094. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
(a) Repeal of Adjustment for 2012.--Subparagraph (B) of
section 401(1) of the Tax Increase Prevention and
Reconciliation Act of 2005 is amended by striking the
percentage contained therein and inserting ``100 percent''. No
other provision of law which would change such percentage shall
have any force and effect.
(b) Modification of Adjustment for 2013.--The percentage
under subparagraph (C) of section 401(1) of the Tax Increase
Prevention and Reconciliation Act of 2005 in effect on the date
of the enactment of this Act is increased by 16.75 percentage
points.