S. 3704 (111th): FHA Reform Act of 2010

111th Congress, 2009–2010. Text as of Aug 04, 2010 (Introduced).

Status & Summary | PDF | Source: GPO

II

111th CONGRESS

2d Session

S. 3704

IN THE SENATE OF THE UNITED STATES

August 4, 2010

(for himself and Mr. Brown of Ohio) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To improve the financial safety and soundness of the FHA mortgage insurance program.

1.

Short title

This Act may be cited as the FHA Reform Act of 2010.

2.

Indemnification by mortgagees

(a)

In general

Section 202 of the National Housing Act (12 U.S.C. 1708) is amended by adding at the end the following new subsection:

(i)

Indemnification by mortgagees

(1)

In general

If the Secretary determines that a mortgage executed by a mortgagee approved by the Secretary under the direct endorsement program or insured by a mortgagee pursuant to the delegation of authority under section 256 was not materially originated or underwritten in accordance with the requirements established by the Secretary, as determined by the Secretary, and the Secretary pays an insurance claim with respect to the mortgage within a reasonable period specified by the Secretary, the Secretary shall require the mortgagee approved by the Secretary under the direct endorsement program or the mortgagee delegated authority under section 256 to indemnify the Secretary for the loss.

(2)

Fraud or misrepresentation

If fraud or misrepresentation was involved in connection with the origination or underwriting, the Secretary may require the mortgagee approved by the Secretary under the direct endorsement program or the mortgagee delegated authority under section 256 to indemnify the Secretary for the loss regardless of when an insurance claim is paid.

(3)

Requirements and procedures

The Secretary shall issue regulations establishing appropriate requirements and procedures governing the indemnification of the Secretary by the mortgagee.

.

(b)

Early term defaults

Section 202(a) of the National Housing Act (12 U.S.C. 1708(a)) is amended by adding at the end the following:

(8)

Indemnification

The Secretary shall take any actions required to seek indemnification for any early term default and claim on a mortgage which—

(A)

is an obligations of the Fund; and

(B)

as of the date of origination of the mortgage, was not in material compliance with a provision, regulation, or other guideline established or promulgated pursuant to this title.

(9)

Programmatic review of defaults

The Secretary shall establish and maintain a program—

(A)

to review the cause of each early term default and claim on a mortgage described under paragraph (8); and

(B)

to require indemnification of any such early term default that did not meet the guidelines and requirements set forth pursuant to this section prior to the date of origination.

(10)

Definition of early term default

For purposes of this subsection, the term early term default means any loan that becomes delinquent or that is in default during the 2-year period beginning on the date of origination of such loan.

.

3.

Delegation of insuring authority

Section 256 of the National Housing Act (12 U.S.C. 1715z–21) is amended—

(1)

by striking subsection (c);

(2)

in subsection (e), by striking , including and all that follows through by the mortgagee; and

(3)

by redesignating subsections (d) and (e) as subsections (c) and (d), respectively.

4.

Authority to terminate mortgagee origination and underwriting approval

Section 533 of the National Housing Act (12 U.S.C. 1735f–11) is amended—

(1)

in the first sentence of subsection (b), by inserting or areas or on a nationwide basis after area each place such term appears; and

(2)

in subsection (c), by striking (c) and all that follows through The Secretary in the first sentence of paragraph (2) and inserting the following:

(c)

Termination of mortgagee origination and underwriting approval

(1)

Termination authority

If the Secretary determines, under the comparison provided in subsection (b), that a mortgagee has a rate of early defaults and claims that is excessive, the Secretary may terminate the approval of the mortgagee to originate or underwrite single family mortgages for any area, or areas, or on a nationwide basis, notwithstanding section 202(c) of this Act.

(2)

Procedure

The Secretary

.

5.

Deputy Assistant Secretary of FHA for Risk Management and Regulatory Affairs

(a)

Establishment of position

Subsection (b) of section 4 of the Department of Housing and Urban Development Act (42 U.S.C. 3533(b)) is amended—

(1)

by inserting (1) after (b); and

(2)

by adding at the end the following new paragraph:

(2)

There shall be in the Department, within the Federal Housing Administration, a Deputy Assistant Secretary for Risk Management and Regulatory Affairs, who shall be appointed by the Secretary and shall be responsible to the Federal Housing Commissioner for all matters relating to managing and mitigating risk to the mortgage insurance funds of the Department and ensuring the performance of mortgages insured by the Department.

.

(b)

Termination

Upon the appointment and confirmation of the initial Deputy Assistant Secretary for Risk Management and Regulatory Affairs pursuant to section 4(b)(2) of the Department of Housing and Urban Development Act, as amended by subsection (a) of this section, the position of chief risk officer within the Federal Housing Administration, filled by appointment by the Federal Housing Commissioner, is abolished.

6.

Use of outside credit risk analysis sources

Section 202 of the National Housing Act (12 U.S.C. 1708), as amended by the preceding provisions of this Act, is further amended by adding at the end the following new subsection:

(j)

Use of outside credit risk analysis sources

The Secretary may obtain the services of, and enter into contracts with, private and other entities outside of the Department in—

(1)

analyzing credit risk models and practices employed by the Department in connection with such mortgages;

(2)

evaluating underwriting standards applicable to such mortgages insured by the Department; and

(3)

analyzing the performance of lenders in complying with, and the Department in enforcing, such underwriting standards.

.

7.

Review of mortgagee performance

Section 533 of the National Housing Act (12 U.S.C. 1735f–11) is amended—

(1)

in subsection (a), by inserting after the period at the end the following: For purposes of this subsection, the term early default means a default that occurs within 24 months after a mortgage is originated or such alternative appropriate period as the Secretary shall establish.;

(2)

in subsection (b), by inserting after the period at the end of the first sentence the following: The Secretary shall also identify which mortgagees have had a significant or rapid increase, as determined by the Secretary, in the number or percentage of early defaults and claims on such mortgages, with respect to all mortgages originated by the mortgagee or mortgages on housing located in any particular geographic area or areas.; and

(3)

by adding at the end the following new subsections:

(d)

Sufficient resources

There is authorized to be appropriated to the Secretary for each of fiscal years 2010 through 2014 the amount necessary to provide additional full-time equivalent positions for the Department, or for entering into such contracts as are necessary, to conduct reviews in accordance with the requirements of this section and to carry out other responsibilities relating to ensuring the safety and soundness of the Mutual Mortgage Insurance Fund.

(e)

Reporting to Congress

Not later than 90 days after the date of enactment of the FHA Reform Act of 2010 and not less often than annually thereafter, the Secretary shall make available to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate any information and conclusions pursuant to the reviews required under subsection (a). Such report shall not include detailed information on the performance of individual mortgages.

.

8.

Use of nationwide mortgage licensing system and registry

(a)

Use by mortgagees, officers, and owners; use for insured mortgages

(1)

Mortgagees, officers, and owners

Section 202 of the National Housing Act (12 U.S.C. 1708), as amended by the preceding provisions of this Act, is further amended by adding at the end the following new subsections:

(k)

Use of nationwide mortgage licensing system and registry for mortgagees, officers, and owners

The Secretary may require, as a condition for approval of a mortgagee by the Secretary to originate or underwrite mortgages on single family residences that are insured by the Secretary, that the mortgagee—

(1)

obtain and maintain a unique company identifier assigned by the Nationwide Mortgage Licensing System and Registry, as established by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators; and

(2)

obtain and maintain, as relates to any and all officers or owners of the mortgagee who are subject to the requirements of the S.A.F.E. Mortgage Licensing Act of 2008, or are otherwise required to register with the Nationwide Mortgage Licensing System and Registry, the unique identifier assigned by the Nationwide Mortgage Licensing System and Registry, as established by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators.

.

(2)

Insured mortgages

Section 203 of the National Housing Act (12 U.S.C. 1709) is amended by adding at the end the following new subsection:

(y)

Use of nationwide mortgage licensing system and registry for insured loans

The Secretary may require each mortgage insured under this section to include the unique identifier (as such term is defined in section 1503 of the S.A.F.E. Mortgage Licensing act of 2008 (12 U.S.C. 5102)) and any unique company identifier assigned by the Nationwide Mortgage Licensing System and Registry, as established by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators.

.

(b)

Coordination with State regulatory agencies

Section 202 of the National Housing Act (12 U.S.C. 1708), as amended by the preceding provisions of this Act, is further amended by adding at the end the following new subsection:

(l)

Information sharing with State regulatory agencies

(1)

Joint protocol on information sharing

The Secretary shall, through consultation with State regulatory agencies, pursue protocols for information sharing, including the appropriate treatment of confidential or otherwise restricted information, regarding either actions described in subsection (c)(3) of this section or disciplinary or enforcement actions by a State regulatory agency or agencies against a mortgagee (as such term is defined in subsection (c)(7)).

(2)

Coordination

To the greatest extent possible, the Secretary and appropriate State regulatory agencies shall coordinate disciplinary and enforcement actions involving mortgagees (as such term is defined in subsection (c)(7)).

.

9.

Reporting of mortgagee actions taken against other mortgagees

Section 202 of the National Housing Act (12 U.S.C. 1708(e)), as amended by the preceding provisions of this Act, is further amended by adding at the end the following new subsection:

(m)

Notification of mortgagee actions

The Secretary shall require each mortgagee, as a condition for approval by the Secretary to originate or underwrite mortgages on single family or multifamily housing that are insured by the Secretary, if such mortgagee engages in the purchase of mortgages insured by the Secretary and originated by other mortgagees or in the purchase of the servicing rights to such mortgages, and such mortgagee at any time takes action to terminate or discontinue such purchases from another mortgagee based on any determination, evidence, or report of fraud or material misrepresentation in connection with the origination of such mortgages, the mortgagee shall, not later than 15 days after taking such action, shall notify the Secretary of the action taken and the reasons for such action.

.

10.

Annual actuarial study and quarterly reports on Mutual Mortgage Insurance Fund

Subsection (a) of section 202 of the National Housing Act (12 U.S.C. 1708(a)) is amended—

(1)

in paragraph (4)—

(A)

by striking The Secretary shall provide for an independent and inserting the following:

(A)

In general

The Secretary shall provide for an independent

;

(B)

in subparagraph (A) (as so designated by this paragraph), in the second sentence, by inserting before the period at the end the following: , any changes to the current or projected safety and soundness of the Fund since the most recent report under this paragraph or paragraph (5), and any risks to the Fund; and

(C)

by adding at the end the following:

(B)

Additional reporting on defaults

The report required under subparagraph (A) shall include—

(i)

all data, for each of the last preceding fiscal years, on each default of a mortgage which is an obligation of the Fund, including—

(I)

the actual number of all such defaults; and

(II)

the percentage of all such defaults, broken out by quarter for each such fiscal year;

(ii)

all data, for each of the last preceding fiscal years, on each early term default of mortgage which is an obligation of the Fund, including—

(I)

the actual number of all such early term defaults;

(II)

the percentage of all such early term defaults, broken out by quarter for each such fiscal year; and

(III)

a summary of the findings of the causes of such early term defaults discovered by the program established under paragraph (9); and

(iii)

the results of all known investigations or inquiries concerning defaults on loans insured under this title or any insurance payments made by the Secretary pursuant to this title, including—

(I)

the number of such loans as to which the Secretary made an inquiry about the reasons for loss or default;

(II)

the identity of the direct endorsement underwriter of such loan;

(III)

all of the reasons determined to be the cause for each default or insurance payment, including whether such default or payment was due to an underwriting error, borrower fraud or misrepresentation, mortgage broker fraud or misrepresentation, appraiser fraud or misrepresentation, lender fraud or misrepresentation, reduced borrower income, or reduced property value;

(IV)

whether there was an insurance payment made pursuant to this title in connection with the loan, and if so, the amount of such payment and the date on which such payment was made;

(V)

the rate at which such loans are becoming seriously delinquent, as determined by the Secretary;

(VI)

whether the rate set for under subclause (V) is increasing or decreasing;

(VII)

if there are certain subsets of mortgages within the larger set of mortgages which are obligations of the Fund that have great or lesser rates of default; and

(VIII)

if a subset of mortgages is identified under subclause (VII), the characteristics of such subset of mortgages and the financial exposure of the Federal Housing Administration created by such subsets.

(C)

Timing of reports

The first annual report, and each annual report thereafter, to include the additional reporting on defaults as required by subparagraph (B), shall be submitted within 90 days of the first day of the next fiscal year, or if such report for the past fiscal year is submitted to Congress prior to the date of enactment of the FHA Reform Act of 2010, such report shall be updated and resubmitted to reflect such additional reporting requirements not later than the last day of the full calendar quarter following the date of enactment of the FHA Reform Act of 2010.

; and

(2)

in paragraph (5)—

(A)

in the matter prior to subparagraph (A), by striking During each fiscal year and inserting the following:

(A)

In general

During each fiscal 8 year;

;

(B)

by redesignating subparagraphs (A) through (E) as clauses (i) through (v), respectively, and moving the margins 2 ems to the right;

(C)

in clause (iv) of subparagraph (A) (as so redesignated), by striking and at the end;

(D)

in clause (v) of subparagraph (A) (as so redesignated), by striking the period at the end and inserting ; and;

(E)

by adding at the end of subparagraph (A) the following:

(vi)

any other factors that are likely to have an impact on the financial status of the Fund or cause any material changes to the current or projected safety and soundness of the Fund since the most recent report under paragraph (4).

The Secretary may include in the report under this paragraph any recommendations not made in the most recent report under paragraph (4) that may be needed to ensure that the Fund remains financially sound.

; and

(F)

by adding at the end the following:

(B)

Additional reporting on defaults

The report required under subparagraph (A) shall include—

(i)

all data, for each of the last preceding fiscal years, on each default of mortgage which is an obligation of the Fund, including—

(I)

the actual number of all such defaults; and

(II)

the percentage of all such defaults, broken out by quarter for each such fiscal year;

(ii)

all data, for each of the last preceding fiscal years, on each early term default of mortgage which is an obligation of the Fund, including—

(I)

the actual number of all such early term defaults;

(II)

the percentage of all such early term defaults, broken out by quarter for each such fiscal year; and

(III)

a summary of the findings of the causes of such early term defaults discovered by the program established under paragraph (9); and

(iii)

the results of all known investigations or inquiries concerning defaults on loans insured under this title or any insurance payments made by the Secretary pursuant to this title, including—

(I)

the number of such loans as to which the Secretary made an inquiry about the reasons for loss or default;

(II)

the identity of the direct endorsement underwriter of such loan;

(III)

all the reasons determined to be the cause for each default or insurance payment, including whether such default or payment was due to an underwriting error, borrower fraud or misrepresentation, mortgage broker fraud or misrepresentation, appraiser fraud or misrepresentation, lender fraud or misrepresentation, reduced borrower income, or reduced property value;

(IV)

whether there was an insurance payment made pursuant to this title in connection with the loan, and if so, the amount of such payment and the date on which such payment was made;

(V)

the rate at which such loans are becoming seriously delinquent, as determined by the Secretary;

(VI)

whether the rate set for under subclause (V) is increasing or decreasing;

(VII)

if there are certain subsets of mortgages within the larger set of mortgages which are obligations of the Fund that have great or lesser rates of default; and

(VIII)

if a subset of mortgages is identified under subclause (VII), the characteristics of such subset of mortgages and the financial exposure of the Federal Housing Administration created by such subsets.

.

11.

Review of downpayment requirements

Section 205 of the National Housing Act (12 U.S.C. 1711) is amended by adding at the end the following new subsection:

(g)

Review of downpayment requirements

If, at any time when the capital ratio (as such term is defined in subsection (f)) of the Mutual Mortgage Insurance Fund does not comply with the requirement under subsection (f)(1), the Secretary establishes a cash investment requirement, for all mortgages or mortgagors or with respect to any group of mortgages or mortgagors, that exceeds the minimum percentage or amount required under section 203(b)(9), thereafter upon the capital ratio first complying with the requirement under subsection (f)(1) the Secretary shall review such cash investment requirement and, if the Secretary determines that such percentage or amount may be reduced while maintaining such compliance, the Secretary may subsequently reduce such requirement by such percentage or amount as the Secretary considers appropriate.

.

12.

Authorization to participate in the origination of FHA-insured loans

(a)

Single family mortgages

Section 203(b) of the National Housing Act (12 U.S.C. 1709(b)) is amended by striking paragraph (1) and inserting the following new paragraph:

(1)

Have been made to a mortgagee approved by the Secretary or to a person or entity authorized by the Secretary under section 202(d)(1) to participate in the origination of the mortgage, and be held by a mortgagee approved by the Secretary as responsible and able to service the mortgage properly.

.

(b)

Home equity conversion mortgages

Section 255(d) of the National Housing Act (12 U.S.C. 1715z–20(d)) is amended by striking paragraph (1) and inserting the following new paragraph:

(1)

have been originated by a mortgagee approved by, or by a person or entity authorized under section 202(d)(1) to participate in the origination by, the Secretary;

.

13.

Default and origination information by loan servicer and originating direct endorsement lender

(a)

Collection of information

Paragraph (2) of section 540(b) of the National Housing Act (12 U.S.C. 1712 U.S.C. 1735f–18(b)(2)) is amended by adding at the end the following new subparagraph:

(C)

For each entity that services insured mortgages, data on the performance of mortgages originated during each calendar quarter occurring during the applicable collection period, disaggregated by the direct endorsement mortgagee from whom such entity acquired such servicing.

.

(b)

Applicability

Information described in subparagraph (C) of section 540(b)(2) of the National Housing Act, as added by subsection (a) of this section, shall first be made available under such section 540 for the applicable collection period (as such term is defined in such section) relating to the first calendar quarter ending after the expiration of the 12-month period that begins on the date of the enactment of this Act.

14.

Third party servicer outreach

(a)

Authority

The Secretary of Housing and Urban Development may, to the extent any amounts for fiscal year 2010 or 2011 are made available in advance in appropriation Acts for reimbursements under this section, provide reimbursement to servicers of covered mortgages (as such term is defined in subsection (f)) for costs of obtaining the services of independent third parties meeting the requirements under subsection (b) of this section to make in-person contact with mortgagors under covered mortgages whose payments under such mortgages are 60 or more days past due, solely for the purposes of providing information to such mortgagors regarding—

(1)

available counseling by housing counseling agencies approved by the Secretary;

(2)

available mortgage loan modification, refinance, and assistance programs; and

(3)

available counseling regarding financial management and credit risk.

(b)

Qualified independent third parties

An independent third party meets the requirements of this subsection if the third party—

(1)

is an entity, including a housing counseling agency approved by the Secretary, that meets standards, qualifications, and requirements (including regarding foreclosure prevention training, quality monitoring, safeguarding of non-public information) established by the Secretary for purposes of this section for in-person contact about available mortgage loan modification, refinance, and assistance programs; and

(2)

does not charge any fees or require other payments, directly or indirectly, from any mortgagor for making in-person contact and providing information and documents under this section.

(c)

Treatment of personal, non-Public, and confidential information

An independent third party whose services are obtained using amounts made available for use under this section and the mortgage servicer obtaining such services shall not use, disclose, or distribute any personal, non-public, or confidential information about a mortgagor obtained during an in-person contact with the mortgagor, except for purposes of engaging in the process of modification or refinance of the covered mortgage.

(d)

Date of contact and disclosures

Each independent third party whose services are obtained by a mortgage servicer using amounts made available for use under this section shall—

(1)

initiate in-person contact with a mortgagor not later than 10 days after the date upon which payments under the covered mortgage of the mortgagor become 60 days past due; and

(2)

upon making in-person contact with a mortgagor, provide the mortgagor with a written document that discloses—

(A)

the name of, and contact information for, the independent third party and the mortgage servicer;

(B)

that the independent third party has contracted with the mortgage servicer to provide the in-person contact at no charge to the mortgagor;

(C)

that the independent third party is an agent of the mortgage servicer;

(D)

that the in-person contact with the mortgagor consists of providing information about available counseling by a housing counseling agency approved by the Secretary and available mortgage loan modification, refinance, and assistance programs;

(E)

that the independent third party and the mortgage servicer are prohibited from the use, disclosure, or distribution of personal, non-public, and confidential information about the mortgagor, obtained during the in-person contact, except for purposes of engaging in the process of modification or refinance of the covered mortgage; and

(F)

any other information that the Secretary determines should be disclosed.

(e)

Priority

In providing reimbursements under this section, the Secretary of Housing and Urban Development shall provide priority to independent third parties serving mortgagors under covered mortgages in areas experiencing a mortgage foreclosure rate and unemployment rate higher than the national average for the most recent 12-month period for which satisfactory data are available.

(f)

Definition of covered mortgage

For purposes of this section, the term covered mortgage means a mortgage on a 1- to 4-family residence insured under the provisions of subsection (b) or (k) of section 203, section 234(c), or 251 of the National Housing Act (12 U.S.C. 1709, 1715y, 1715z–16).

15.

GAO report on FHA

Not later than the expiration of the 12-month period beginning on the date of the enactment of this Act, the Comptroller General of the United States shall submit to the Congress a report on the single family mortgage insurance programs of the Secretary of Housing and Urban Development and the Mutual Mortgage Insurance Fund established under section 202(a) of the National Housing Act (12 U.S.C. 1708(a)) that—

(1)

analyzes such Fund, the economic net worth, capital ratio, and unamortized insurance-in-force (as such terms are defined in section 205(f)(4) of such Act (12 U.S.C. 1711(f)(4))) of such Fund, the risks to the Fund, how the capital ratio of the Fund affects the mortgage insurance programs under the Fund and the broader housing market, the extent to which the housing markets are more dependent on mortgage insurance provided through the Fund since the financial crisis began in 2008, and the exposure of the taxpayers for obligations of the Fund;

(2)

analyzes the methodology for determining the Fund’s capital ratio under section 205(f) of such Act and examines alternative methods for assessing the Fund’s financial condition and their potential impacts on the Fund’s ability to meet the operational goals under section 202(a)(7) of such Act;

(3)

analyzes the potential effects of the increases in the limits on the maximum principal obligation of mortgages made by the FHA Modernization Act of 2008 (title I of division B of Public Law 110–289), section 202 of the Economic Stimulus Act of 2008 (Public Law 110–185; 122 Stat. 620), section 1202 of division A of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5; 123 Stat. 225), and section 166 of the Continuing Appropriations Resolution, 2010 (as added by section 104 of division B of Public Law 111–88; 123 Stat. 29723) on—

(A)

the risks to and safety and soundness of the Fund;

(B)

the impact on the affordability and availability of mortgage credit for borrowers for loans authorized under such higher loan limits;

(C)

the private market for residential mortgage loans that are not insured by the Secretary of Housing and Urban Development; and

(D)

the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation; and

(4)

analyzes the impact on affordability to FHA borrowers, and the impact to the Fund, of seller concessions or contributions to a borrower purchasing a residence using a mortgage that is insured by the Secretary.

16.

Authority to establish higher minimum cash investment requirement

(a)

Authority

Paragraph (9) of section 203(b) of the National Housing Act (12 U.S.C. 1709(b)(9)) is amended by adding at the end the following new subparagraph:

(D)

Authority to establish higher minimum requirement

The Secretary may establish a higher minimum cash investment requirement than the minimum requirement under subsection (a), for all mortgagors or a certain class or classes of mortgagors, which may be based on criteria related to borrowers’ credit scores or other industry standards related to borrowers’ financial soundness. In establishing such a higher minimum cash investment requirement, the Secretary shall take into consideration the findings of the most recent annual report to the Congress on minimum cash investments pursuant to section 16(b) of the FHA Reform Act of 2010.

.

(b)

Report

Not later than the expiration of the 12-month period beginning on the date of the enactment of this Act and annually thereafter, the Secretary of Housing and Urban Development 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 detailing the implementation of the minimum cash investment requirements under section 203(b)(9) of the National Housing Act (12 U.S.C. 1709(b)(9)) and discussing and analyzing options for proposed changes to such requirements, including changes that would take into account borrowers’ credit scores or other industry standards related to borrowers’ financial soundness. Such report shall—

(1)

analyze the impacts that any actual or proposed such changes are projected to have on—

(A)

the financial soundness of the Mutual Mortgage Insurance Fund;

(B)

the housing finance market of the United States; and

(C)

the number of borrowers served by the Federal Housing Administration;

(2)

explain the reasons for any actual or proposed such changes in the such requirements made since the last report under this subsection;

(3)

evaluate the impact of any actual or proposed such changes in such requirements on the Mutual Mortgage Insurance Fund;

(4)

evaluate the impacts of any actual or proposed such changes on potential mortgagors under mortgages on one- to four-family dwellings insured by the Secretary under the National Housing Act; and

(5)

evaluate the impact of any actual or proposed such changes on the soundness of the housing market in the United States.

17.

Mortgage insurance premium refunds

(a)

Authority

The Secretary of Housing and Urban Development shall, to the extent that amounts are made available pursuant to subsection (c), provide refunds of unearned premium charges paid at the time of insurance for mortgage insurance under title II of the National Housing Act (12 U.S.C. 1707 et seq.) to or on behalf of mortgagors under mortgages described in subsection (b).

(b)

Eligible mortgages

A mortgage described in this section is a mortgage on a one- to four-family dwelling that—

(1)

was insured under title II of the National Housing Act (12 U.S.C. 1707 et seq.); and

(2)

is otherwise eligible, under the last sentence of subparagraph (A) of section 203(c)(2) of such Act (12 U.S.C. 1709(c)(2)(A)), for a refund of all unearned premium charges paid on the mortgage pursuant to such subparagraph, except that the mortgage—

(A)

was closed before December 8, 2004; and

(B)

was endorsed on or after such date.

(c)

Authorization of appropriations

There is authorized to be appropriated for each fiscal year such sums as may be necessary to provide refunds of unearned mortgage insurance premiums pursuant to this section.

18.

Maximum mortgage amount limits for multifamily housing

(a)

Elevator-Type structures

(1)

Amendments

The National Housing Act is amended in each of the provisions specified in paragraph (2)—

(A)

by inserting with sound standards of construction and design after elevator-type structures the first place such term appears; and

(B)

by striking to not to exceed and all that follows through sound standards of construction and design each place such terms appear and inserting by not more than 50 percent of the amounts specified for each unit size.

(2)

Provisions amended

The provisions of the National Housing Act specified in this paragraph are as follows:

(A)

Subparagraph (A) of section 207(c)(3) (12 U.S.C. 1713(c)(3)(A)).

(B)

Subparagraph (A) of section 213(b)(2) (12 U.S.C. 1715e(b)(2)(A)).

(C)

Subclause (I) of section 220(d)(3)(B)(iii) (12 U.S.C. 1715k(d)(3)(B)(iii)(I)).

(D)

In section 221(d) (12 U.S.C. 1715l(d))—

(i)

subclause (I) of paragraph (3)(ii); and

(ii)

subclause (I) of paragraph (4)(ii).

(E)

Subparagraph (A) of section 231(c)(2) (12 U.S.C. 1715v(c)(2)(A)).

(F)

Subparagraph (A) of section 234(e)(3) (12 U.S.C. 1715y(e)(3)(A)).

(b)

Extremely high-Cost areas

Section 214 of the National Housing Act (12 U.S.C. 1715d) is amended—

(1)

in the first sentence—

(A)

by inserting , or with respect to projects consisting of more than four dwelling units located in an extremely high-cost area as determined by the Secretary after or the Virgin Islands the first place such term appears;

(B)

by inserting , or to construct projects consisting of more than four dwelling units on property located in an extremely high-cost area as determined by the Secretary after or the Virgin Islands the second place such term appears; and

(C)

by inserting , or with respect to projects consisting of more than four dwelling units located in an extremely high-cost area as determined by the Secretary after or the Virgin Islands the third place such term appears;

(2)

in the second sentence—

(A)

by inserting , or with respect to a project consisting of more than four dwelling units located in an extremely high-cost area as determined by the Secretary, after or the Virgin Islands the first place such term appears; and

(B)

by inserting , or in the case of a project consisting of more than four dwelling units in an extremely high-cost area as determined by the Secretary, in such extremely high-cost area, after or the Virgin Islands the second place such term appears; and

(3)

in the section heading, by striking and the virgin islands and inserting the virgin islands, and extremely high-cost areas.

(c)

Effective date

The amendments made by this section shall apply to mortgages insured under title II of the National Housing Act after September 30, 2010.

19.

Special forbearance for mortgagors with Chinese drywall

The provisions of Mortgagee Letter 2002–17 of the Secretary of Housing and Urban Development (regarding Special Forbearance: Program Changes and Updates) relating to Type I Special Forbearance shall apply, until the conclusion of fiscal year 2011 and may not be revoked, annulled, repealed, or rescinded during such period, with respect to mortgagees of mortgages insured under title II of the National Housing Act that are secured by one- to four-family dwellings that have problem or damaging drywall products.

20.

Mortgage insurance for condominiums

Section 203 of the National Housing Act (12 U.S.C. 1709) is amended by adding at the end the following new subsection:

(y)

Inapplicability of environmental review provisions

In insuring, under this section, any mortgage described in section 201(a)(C), the Secretary shall not be subject to the conditions of, or review under, the National Environmental Policy Act of 1969 or any other provision of law that furthers the purposes of such Act.

.

21.

Energy efficient mortgages

Section 106(a)(2)(C) of the Energy Policy Act of 1992 (42 U.S.C. 12712 note) is amended—

(1)

in clause (i), by inserting (i) after (A) each place such term appears; and

(2)

in clause (ii), by striking 203(b)(2)(B) and inserting 203(b)(2)(A)(ii).