IN THE SENATE OF THE UNITED STATES
August 2, 2012
Mr. Merkley (for himself, Mr. Akaka, Mr. Begich, Mr. Blumenthal, Mr. Franken, Ms. Landrieu, Mr. Lautenberg, and Mr. Levin) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
To require a portion of closing costs to be paid by the enterprises with respect to certain refinanced mortgage loans, and for other purposes.
This Act may be cited as
Rebuilding Equity Act of
Rebuilding equity program
The Federal National Mortgage Association and the Federal
Home Loan Mortgage Corporation (in this Act referred to as the
enterprises) shall each establish a voluntary program for
borrowers described in paragraph (2), under which the enterprises shall pay not
more than $1,000 of the closing costs associated with applying for and
receiving the refinancing when the borrower agrees to refinance into a fully
amortizing loan with a term of not longer than 20 years.
The program required by paragraph (1) shall be for any borrower—
who qualifies for the Home Affordable Refinance Program carried out by the enterprises;
whose subject property has a loan-to-value ratio of not less than 105 percent; and
who refinances from a loan with an original term of 30 years to a loan with a term of 20 years or less.
As used in this section, the following definitions shall apply:
loan-to-value ratio means the ratio
of the amount of the primary mortgage on a property to the value of that
The term closing costs—
means all reasonable and actual costs charged to the borrower by a third party to the refinancing transaction;
appraisal and inspection fees;
fees associated with obtaining a borrower’s credit report;
title insurance and title examination costs;
attorneys’ fees associated with closing the transaction, other than attorneys’ fees associated with disputes arising out of the transaction or otherwise ancillary to closing the transaction;
document preparation costs, if completed by a third party not controlled by the lender;
transfer stamps, recording fees, courier fees, wire transfer fees, and reconveyance fees; and
test and certification fees; and
does not include any costs charged to the borrower by the lender, including—
lender application fees; and
lender origination fees.