[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 3522 Placed on Calendar Senate (PCS)]
Calendar No. 503
112th CONGRESS
2d Session
S. 3522
To provide for the expansion of affordable refinancing of mortgages
held by the Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 10, 2012
Mr. Menendez (for himself, Mrs. Boxer, Mrs. Feinstein, Mr. Wyden, Mr.
Durbin, Mr. Schumer, Mrs. Gillibrand, Ms. Stabenow, Mr. Reed, Mr.
Lautenberg, Mr. Franken, Mr. Merkley, and Mr. Sanders) introduced the
following bill; which was read the first time
September 11, 2012
Read the second time and placed on the calendar
_______________________________________________________________________
A BILL
To provide for the expansion of affordable refinancing of mortgages
held by the Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Responsible Homeowner Refinancing
Act of 2012''.
SEC. 2. DEFINITIONS.
In this Act--
(1) the term ``current borrower'' means a mortgagor who is
current on the subject mortgage at the time of the refinancing,
and has had no late payments in the preceding 6 months and not
more than 1 late payment in the preceding 12 months;
(2) the term ``eligible mortgage'' means any mortgage
that--
(A) is an existing first mortgage that was made for
purchase of, or refinancing of another first mortgage
on, a 1- to 4-family dwelling, including a condominium
or a share in a cooperative ownership housing
association;
(B) was originated or refinanced on or before May
31, 2009, unless that date is extended by the Director
under FHFA's preexisting authority to do so;
(C) is owned or guaranteed by an enterprise;
(D) with respect to which, the mortgagor is a
current borrower; and
(E) includes existing first mortgages with a loan-
to-value ratio of less than 80 percent.
(3) the term ``enterprise'' means the Federal National
Mortgage Association and the Federal Home Loan Mortgage
Corporation;
(4) the terms ``FHFA'' and ``Director'' mean the Federal
Housing Finance Agency and the Director thereof, respectively;
(5) the terms ``Home Affordable Refinance Program'' and
``Program'' mean the Home Affordable Refinance Program,
administered by the FHFA and the enterprises as part of the
Making Home Affordable initiative announced on March 4, 2009;
(6) the term--
(A) ``LTV'' means loan-to-value, or the ratio of
the amount of the primary mortgage on a property to the
value of that property; and
(B) ``CLTV'' means combined loan-to-value, or the
ratio of all mortgage debt on a property to the value
of the property;
(7) the term ``same servicer'' means a lender that is
providing refinancing for a borrower whose loan they already
service;
(8) the term ``qualified lender'' means a lender that is
participating in the Program;
(9) the term ``guarantee fee'' has the same meaning as in
section 1327(a) of the Housing and Community Development Act of
1992 (12 U.S.C. 4547(a)); and
(10) the term ``average fees'' means the average
contractual fee rate of single-family guaranty arrangements
charged by an enterprise on April 1, 2012, plus the recognition
of any up-front cash payments over an estimated average life,
expressed in terms of basis points, such definition to be
interpreted in a manner consistent with the annual report on
guarantee fees by the FHFA.
SEC. 3. STREAMLINED REFINANCING CRITERIA UNDER THE PROGRAM.
(a) In General.--In carrying out the Home Affordable Refinance
Program, each enterprise shall adopt and adhere to the criteria
established under this section.
(b) Borrower Eligibility.--The enterprises shall include as
eligible borrowers in the Home Affordable Refinance Program all current
borrowers who have an eligible mortgage and meet those underwriting
requirements for eligibility for same servicer refinancing in the
Program as of March 1, 2012, except that the enterprises may not
disqualify or impose varying rules within the Program for borrowers
based on LTV, CLTV, employment status or income.
(c) Additional Relief From Representations and Warranties.--The
enterprises shall not require of any qualified lender executing a loan
under the Program any representations or warranties--
(1) for the value, marketability, condition, or property
type of the loan, as such loan characteristics are evidenced by
an appraisal or alternative valuation method, provided that the
lender complies with the enterprises' required methods and
standards for ordering an appraisal under the Program; or
(2) that are not required of same servicers under the
Program as of March 1, 2012, whether that loan is manually
underwritten or underwritten through an automated system,
except that, under no circumstances shall greater
representations and warranties be required for a loan that is
manually underwritten than for one that is underwritten through
an automated system.
(d) Prohibition on Up-front Fees.--In carrying out the Program, the
enterprises may not charge the qualified lender any loan level price
adjustment, post settlement delivery fee, adverse delivery charge, or
other similar up-front fee.
(e) Appraisals.--The enterprises shall develop and allow
alternative streamlined methods to determine the value of the property
for which refinancing is sought through the Program that eliminate the
costs to the borrower and qualified lender associated with such
determination. Until such time as such method is developed, and when
the existing automated valuation models of the enterprises are unable
to determine the value of a certain property for which refinancing is
sought through the Program, the enterprises shall bear the costs
associated with the use of manual appraisal of that property, without
passing on such costs to the borrower or qualified lender.
(f) Limitation.--Notwithstanding any provision of the Federal
National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.) or
the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et
seq.), an enterprise may purchase or guarantee any new mortgage
resulting from the refinancing of an eligible mortgage pursuant to this
section, if at the time of origination of the eligible mortgage, the
eligible mortgage complied with the applicable limitation governing the
maximum original principal obligation on conventional mortgages that
may be purchased or guaranteed by that enterprise.
(g) Guarantee Fees.--
(1) In general.--
(A) Average fee.--On each mortgage refinanced under
the Program in accordance with this section, the
enterprises shall set the average fee required under
this Act, as determined by the Director in an amount
not less than the average fees charged by the
enterprises as of April 1, 2012, for such guarantees.
The Director shall prohibit an enterprise from
offsetting the cost of the fee to the mortgage
originators, borrowers, and investors by decreasing
other charges, fees, or premiums, or in any other
manner.
(B) Authority to limit offer of guarantee.--The
Director shall prohibit an enterprise from consummating
any offer for a guarantee to a qualified lender for
mortgage-backed securities, if the guarantee is
inconsistent with the requirements of this section.
(2) Information collection and analysis.--The Director
shall require each enterprise to provide to the Director, as
part of its annual report submitted to Congress, for loans
refinanced under the Program--
(A) a description of changes made to up-front fees
and annual fees as part of the guarantee fees
negotiated with qualified lenders; and
(B) an assessment of how the changes in the
guarantee fees described in subparagraph (A) met the
requirements of paragraph (1).
(h) Regulations.--Not later than 30 days after the date of
enactment of this Act, the Director shall issue any regulations or
guidance necessary to carry out the changes to the Program established
under this section, which regulations or guidance shall be put into
effect not later than 90 days after the date of enactment of this Act.
(i) Termination.--The requirements of this section shall expire
concurrent with the expiration of the Program.
(j) Rule of Construction.--
(1) In general.--Nothing in this section shall be construed
to supersede, preempt, or otherwise nullify the requirement
that a loan refinanced under the Program must benefit the
borrower.
(2) Definition.--For purposes of paragraph (1), a loan
refinanced under the Program benefits the borrower, if the
refinanced loan results in--
(A) reduction in payment;
(B) reduction in interest rate;
(C) movement to a more stable product, such as from
an adjustable rate mortgage to a fixed rate mortgage;
or
(D) reduction in amortization term.
SEC. 4. INFORMATION FOR BORROWERS ON ELIGIBILITY FOR THE PROGRAM.
(a) Notice to Borrowers.--Not later than 60 days after the date of
enactment of this Act, the enterprises shall notify all borrowers with
a mortgage owned or guaranteed by an enterprise about the Program and
its eligibility criteria, and inform borrowers of the website required
under subsection (b).
(b) Public Access to Eligibility Criteria.--The Director shall
establish, and the enterprises shall display a link on their homepages
to, a single website where borrowers may--
(1) determine their potential eligibility for participation
in the Program;
(2) see a complete list of and links to qualified lenders;
(3) use a mortgage refinance calculator to calculate
potential payment savings based on different interest rates;
and
(4) obtain tips on refinancing their loan.
SEC. 5. CONSISTENT REFINANCING GUIDELINES REQUIRED.
Not later than 60 days after the date of enactment of this Act, the
Director shall issue guidance to require the enterprises to make their
refinancing guidelines consistent to ease the compliance requirements
of qualified lenders, and in particular with respect to loans with less
than an 80 percent loan-to-value ratio and closing cost policies of the
enterprises, which regulations or guidance shall be put into effect not
later than 90 days after the date of enactment of this Act.
SEC. 6. PROGRESS REPORTS.
The Director shall provide to Congress monthly reports on the
progress of the Program, and each enterprise shall include and
disclose, as part of its filings with the Securities and Exchange
Commission on Form 10-Q, Form 10-K, or any successors thereto, detailed
information on each enterprise's progress and results in implementing
and executing the Program.
SEC. 7. SEVERABILITY.
If any portion of this Act or the application thereof to any person
or circumstance is held invalid, such invalidity shall not affect the
portions or applications of this Act which can be given effect without
the invalid portion or application.
Calendar No. 503
112th CONGRESS
2d Session
S. 3522
_______________________________________________________________________
A BILL
To provide for the expansion of affordable refinancing of mortgages
held by the Federal National Mortgage Association and the Federal Home
Loan Mortgage Corporation.
_______________________________________________________________________
September 11, 2012
Read the second time and placed on the calendar