IN THE SENATE OF THE UNITED STATES
January 25 (legislative day, January 5), 2011
Mrs. Boxer introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
To provide for the affordable refinancing of mortgages held by Fannie Mae and Freddie Mac.
This Act may be cited as
Helping Responsible Homeowners
Affordable refinancing of mortgages owned or guaranteed by Fannie Mae and Freddie Mac
As used in this Act, the following definitions shall apply:
The term Director means the Director of the Federal Housing Finance Agency.
The term enterprise means the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
The term qualified mortgage means a mortgage that—
is an existing first mortgage that was made for purchase of, or refinancing another first mortgage on, a one- to four-family dwelling, including a condominium or a share in a cooperative ownership housing association, that is occupied by the mortgagor as the principal residence of the mortgagor;
is owned or guaranteed by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation; and
the mortgagor is current on payments due under the mortgage.
The term refinancing mortgage means a mortgage that meets the following requirements:
Refinancing of qualified mortgage
The principal loan amount repayment of which is secured by the mortgage shall be used to satisfy all indebtedness under an existing qualified mortgage and any closing costs from the refinancing of the mortgage that the mortgagor chooses to include in the refinanced mortgage.
The property that is subject to the mortgage shall be the same property that is subject to the qualified mortgage being refinanced.
The mortgage shall bear a fair rate of interest, which shall not exceed 40 basis points above the required net yield for a 60-day commitment to purchase a prime conventional conforming fixed rate mortgage as published by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation at the time the interest rate is locked in.
Loan to value
The mortgage shall not be limited by the loan-to-value ratio.
Waiver of prepayment penalties
All penalties for prepayment or refinancing of the qualified mortgage that is refinanced by the mortgage, and all fees and penalties related to the default or delinquency on such mortgage, shall have been waived or forgiven.
Term to maturity
The mortgage shall have a term to maturity of not more than 40 years from the date of the beginning of the amortization of the mortgage.
The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall each carry out a program under this section to provide for the refinancing of qualified mortgages on single-family housing owned by such enterprise through a refinancing mortgage, and for the purchase of and securitization of such refinancing mortgages, in accordance with this section and policies and procedures that the Director of the Federal Housing Finance Agency shall establish. Such program shall require the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to purchase or guarantee the refinancing mortgage used to refinance a qualified mortgage upon the request of the mortgagee.
Prohibition on loan level price adjustments and post settlement delivery fees
In carrying out the program established under this section, the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall not charge the mortgagee any up-front fee beyond the standard guarantee fee for the refinancing of the qualified mortgage through the refinancing mortgage.
Resubordination of second liens
For any servicer or creditor holding a second lien on a qualified mortgage who refuses to resubordinate that lien, thereby preventing the refinancing of the qualified mortgage, new mortgages originated by that servicer or creditor shall be ineligible for purchase or guarantee by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation.
The requirement for an enterprise to refinance qualified mortgages under this section shall not apply to any request for refinancing made after the expiration of the 1-year period beginning on the date of the enactment of this Act. Notwithstanding the prior sentence, the Director, at his or her discretion, may extend the program established under this section, and the requirements of such program shall apply during any such extension, in 1-year increments.
The Director shall issue any regulations or guidance necessary to carry out the program established under this section.
Notice of the refinancing program
The Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation shall require each servicer of a mortgage owned or guaranteed by each such enterprise to inform each borrower of such mortgage of the refinancing program authorized and established under section 2.
The Director shall, as part of the monthly Foreclosure Prevention & Refinance Report published by the Director, include information on the progress of the refinancing program authorized and established under section 2.