,i #aacth ,,congress #ast ,session ,h4 ,r4 #aade ,,in ,,the ,,house ,,of ,,representatives ,march #ac1 #bjac ,ms4 ,waters 7for herself and ,mr4 ,capuano7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,a ,,bill ,to help ensure the fiscal solvency of the ,,fha mortgage insurance programs of the ,secretary of ,housing and ,urban ,development1 and for other purposes4 #a4 ,short title and table of contents 7a7 ,short title ,this ,act may be cited as the ,,fha ,emergency ,fiscal ,solvency ,act of #bjac4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title and table of contents4 ,sec4 #b4 ,,fha annual mortgage insurance premiums4 ,sec4 #c4 ,indemnification by ,,fha mortgagees4 ,sec4 #d4 ,early period delinquencies4 ,sec4 #e4 ,semiannual actuarial studies of ,,mmif during periods of capital depletion4 ,sec4 #f4 ,delegation of ,,fha insuring authority4 ,sec4 #g4 ,authority to terminate ,,fha mortgagee origination and underwriting approval4 ,sec4 #h4 ,authorization to participate in the origination of ,,fha-insured loans4 ,sec4 #i4 ,reporting of mortgagee actions taken against other mortgagees4 ,sec4 #aj4 ,default and origination information by loan servicer and originating direct endorsement lender4 ,sec4 #aa4 ,deputy ,assistant ,secretary of ,,fha for ,risk ,management and ,regulatory ,affairs4 ,sec4 #ab4 ,establishment of ,chief ,risk ,officer for ,,gnma4 ,sec4 #ac4 ,report on mortgage servicers4 ,sec4 #ad4 ,,fha emergency capital plan4 ,sec4 #ae4 ,,fha safety and soundness review4 ,sec4 #af4 ,,fha disclosure standards4 ,sec4 #ag4 ,report on streamlining ,,fha programs4 ,sec4 #ah4 ,budget compliance4 #b4 ,,fha annual mortgage insurance premiums 7a7 ,in general ,subparagraph 7,b7 of section #bjc7;c77#b7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agji7;c77#b77;,b77 is amended-- 7#a7 in the matter preceding clause 7i7-- 7,a7 by striking may and inserting shall2 7,b7 by striking not exceeding #a4e percent and inserting not less than #j4ee percent2 and 7,c7 by inserting and not exceeding #b4j percent of such remaining insured principal balance before for the following periods32 and 7#b7 in clause 7ii71 by striking #a4ee percent and inserting #b4je percent4 7b7 ,effective date ,the amendments made by subsection 7a7 take effect upon the expiration of the #f-month period beginning on the date of the enactment of this ,act4 #c4 ,indemnification by ,,fha mortgagees ,section #bjb of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjh7 is amended by adding at the end the following new subsection3 7i7 ,indemnification by mortgagees 7#a7 ,in general ,if the ,secretary determines that the mortgagee knew1 or should have known1 of a serious or material violation of the requirements established by the ,secretary with respect to 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 #bef such that the mortgage loan should not have been approved and endorsed for insurance1 and the ,secretary pays an insurance claim with respect to the mortgage within a reasonable period specified by the ,secretary1 the ,secretary may require the mortgagee approved by the ,secretary under the direct endorsement program or the mortgagee delegated authority under section #bef to indemnify the ,secretary for the loss1 irrespective of whether the violation caused the mortgage default4 7#b7 ,fraud or misrepresentation ,if fraud or misrepresentation was involved in connection with the origination or underwriting and the ,secretary determines that the mortgagee knew or should have known of the fraud or misrepresentation1 the ,secretary shall require the mortgagee approved by the ,secretary under the direct endorsement program or the mortgagee delegated authority under section #bef to indemnify the ,secretary for the loss regardless of when an insurance claim is paid4 7#c7 ,appeals process ,the ,secretary shall1 by regulation1 establish an appeals process for mortgagees to appeal indemnification determinations made pursuant to paragraph 7#a7 or 7#b74 7#d7 ,requirements and procedures ,the ,secretary shall issue regulations establishing appropriate requirements and procedures governing the indemnification of the ,secretary by the mortgagee1 including public reporting on-- 7,a7 the number of loans that-- 7i7 were not originated or underwritten in accordance with the requirements established by the ,secretary2 and 7ii7 involved fraud or misrepresentation in connection with the origination or underwriting2 and 7,b7 the financial impact on the ,mutual ,mortgage ,insurance ,fund when indemnification is required4 4 #d4 ,early period delinquencies ,subsection 7a7 of section #bjb of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjh7;a77 is amended by adding at the end the following new paragraphs3 7#h7 ,programmatic review of early period delinquencies ,the ,secretary shall establish and maintain a program-- 7,a7 to review the cause of each early period delinquency on a mortgage that is an obligation of the ,mutual ,mortgage ,insurance ,fund2 7,b7 to require indemnification of the ,secretary for a loss associated with any such early period delinquency that is the result of a material violation1 as determined by the ,secretary1 of any provision1 regulation1 or other guideline established or promulgated pursuant to this title2 and 7,c7 to publicly report-- 7i7 a summary of the results of all early period delinquencies reviewed under subparagraph 7,a72 7ii7 any indemnifications required under subparagraph 7,b72 and 7iii7 the financial impact on the ,mutual ,mortgage ,insurance ,fund of any such indemnifications4 7#i7 ,definition of early period delinquency ,for purposes of this section1 the term early period delinquency means1 with respect to a mortgage1 that the mortgage becomes #ij or more days delinquent within #bd months of the origination of such mortgage4 4 #e4 ,semiannual actuarial studies of ,,mmif during periods of capital depletion 7a7 ,in general ,paragraph 7#d7 of section #bjb7;a7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjh7;a77#d77 is amended-- 7#a7 in the first sentence1 by inserting except as provided in subparagraph 7,b71 after to be conducted annually12 7#b7 in the second sentence1 by inserting 1 except as provided in subparagraph 7,b71 after annually2 7#c7 by striking the paragraph designation and heading and all that follows through ,the ,secretary shall provide and inserting the following3 7#d7 ,independent actuarial study 7,a7 ,annual study ,the ,secretary shall provide 2 and 7#d7 by adding at the end the following new subparagraph3 7,b7 ,semiannual studies during periods of capital depletion ,during any period that the ,fund fails to maintain sufficient capital to comply with the capital ratio requirement under section #bje7;f77#b7-- 7i7 the independent study required by subparagraph 7,a7 shall be conducted semiannually and shall analyze the financial position of the ,fund as of ,september #cj and ,march #ca of each fiscal year during such period2 and 7ii7 the ,secretary shall submit a report meeting the requirements of subparagraph 7,a7 for each such semiannual study4 4 7b7 ,analysis of quarterly actuarial studies ,the ,secretary of ,housing and ,urban ,development shall conduct an analysis of the cost and feasibility of providing for an independent actuarial study of the ,mutual ,mortgage ,insurance ,fund on a calendar quarterly basis1 which shall compare the cost and feasibility of conducting such a study on a quarterly basis as compared to a semi-annual basis and shall determine whether such an actuarial study can be conducted on a quarterly basis without substantial additional costs to the taxpayers4 ,not later than the expiration of the #ij-;day period beginning on the date of the enactment of this ,act1 the ,secretary shall submit a report to the ,congress setting forth the findings and conclusion of the analysis conducted pursuant to this subsection4 #f4 ,delegation of ,,fha insuring authority ,section #bef of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agaez-#ba7 is amended-- 7#a7 by striking subsection 7c72 7#b7 in subsection 7e71 by striking 1 including and all that follows through by the mortgagee2 and 7#c7 by redesignating subsections 7d7 and 7e7 as subsections 7c7 and 7d71 respectively4 #g4 ,authority to terminate ,,fha mortgagee origination and underwriting approval ,section #ecc of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agce;f-#aa7 is amended-- 7#a7 in the first sentence of subsection 7b71 by inserting or areas or on a nationwide basis after area each place such term appears2 and 7#b7 in subsection 7c71 by striking 7c7 and all that follows through ,the ,secretary in the first sentence of paragraph 7#b7 and inserting the following3 7c7 ,termination of mortgagee origination and underwriting approval 7#a7 ,termination authority ,if the ,secretary determines1 under the comparison provided in subsection 7b71 that a mortgagee has a rate of early defaults and claims that is excessive1 the ,secretary may terminate the approval of the mortgagee to originate or underwrite single family mortgages for any area1 or areas1 or on a nationwide basis1 notwithstanding section #bjb7;c7 of this ,act4 7#b7 ,procedure ,the ,secretary 4 #h4 ,authorization to participate in the origination of ,,fha-insured loans 7a7 ,single family mortgages ,section #bjc7;b7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agji7;b77 is amended by striking paragraph 7#a7 and inserting the following new paragraph3 7#a7 ,have been made to a mortgagee approved by the ,secretary or to a person or entity authorized by the ,secretary under section #bjb7;d77#a7 to participate in the origination of the mortgage1 and be held by a mortgagee approved by the ,secretary as responsible and able to service the mortgage properly4 4 7b7 ,home equity conversion mortgages ,section #bee7;d7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agaez-#bj7;d77 is amended by striking paragraph 7#a7 and inserting the following new paragraph3 7#a7 have been originated by a mortgagee approved by1 or by a person or entity authorized under section #bjb7;d77#a7 to participate in the origination by1 the ,secretary2 4 #i4 ,reporting of mortgagee actions taken against other mortgagees ,section #bjb of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjh71 as amended by the preceding provisions of this ,act1 is further amended by adding at the end the following new subsection3 7j7 ,notification of mortgagee actions ,the ,secretary shall require each mortgagee1 as a condition for approval by the ,secretary to originate or underwrite mortgages on single family or multifamily housing that are insured by the ,secretary1 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 mortgages1 and such mortgagee at any time takes action to terminate or discontinue such purchases from another mortgagee based on any determination or evidence of fraud or material misrepresentation in connection with the origination of such mortgages1 to notify the ,secretary of the action taken and the reasons for such action not later than #ae days after taking such action4 4 #aj4 ,default and origination information by loan servicer and originating direct endorsement lender 7a7 ,collection of information ,paragraph 7#b7 of section #edj7;b7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agab ,u4,s4,c4 #agce;f-#ah7;b77#b77 is amended by adding at the end the following new subparagraph3 7,c7 ,for each entity that services insured mortgages1 data on the number of claims paid to each servicing mortgagee during each calendar quarter occurring during the applicable collection period4 4 7b7 ,applicability ,information described in subparagraph 7,c7 of section #edj7;b77#b7 of the ,national ,housing ,act1 as added by subsection 7a7 of this section1 shall first be made available under such section #edj for the applicable collection period 7as such term is defined in such section7 relating to the first calendar quarter ending after the expiration of the #ab-month period that begins on the date of the enactment of this ,act4 #aa4 ,deputy ,assistant ,secretary of ,,fha for ,risk ,management and ,regulatory ,affairs 7a7 ,establishment of position ,subsection 7b7 of section #d of the ,department of ,housing and ,urban ,development ,act 7#db ,u4,s4,c4 #cecc7;b77 is amended-- 7#a7 by inserting 7#a7 after 7b72 and 7#b7 by adding at the end the following new paragraph3 7#b7 ,there shall be in the ,department1 within the ,federal ,housing ,administration1 a ,deputy ,assistant ,secretary for ,risk ,management and ,regulatory ,affairs1 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 ,department4 4 7b7 ,termination ,upon the appointment of the initial ,deputy ,assistant ,secretary for ,risk ,management and ,regulatory ,affairs pursuant to section #d7;b77#b7 of the ,department of ,housing and ,urban ,development ,act1 as amended by subsection 7a7 of this section1 the position of chief risk officer within the ,federal ,housing ,administration1 filled by appointment by the ,federal ,housing ,commissioner1 is abolished4 #ab4 ,establishment of ,chief ,risk ,officer for ,,gnma ,section #d of the ,department of ,housing and ,urban ,development ,act 7#db ,u4,s4,c4 #cecc7 is amended by adding after subsection 7g71 as added by section #addb of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7,public ,law #aaa-bjc2 #abd ,stat4 #bafc71 the following new subsection3 7h7 ,there shall be in the ,department a ,chief ,risk ,officer for the ,government ,national ,mortgage ,association1 who shall-- 7#a7 be designated by the ,secretary2 7#b7 be responsible to the ,president of the ,association for all matters related to evaluating1 managing1 and mitigating risk to the programs of the ,association2 7#c7 be in the competitive service or the senior executive service2 7#d7 be a career appointee2 7#e7 be designated from among individuals who possess demonstrated ability in general management of1 and knowledge of and extensive practical experience in risk evaluation practices in large governmental or business entities2 and 7#f7 shall not be required to obtain the prior approval1 comment1 or review of any officer or agency of the ,united ,states before submitting to the ,congress1 or any committee or subcommittee thereof1 any reports1 recommendations1 testimony1 or comments if such submission include a statement indicating that the views expressed therein are those of the ,chief ,risk ,officer of the ,association and do not necessarily represent the views of the ,secretary4 4 #ac4 ,report on mortgage servicers 7a7 ,examination ,the ,secretary of ,housing and ,urban ,development shall conduct an examination into mortgage servicer compliance with the loan servicing1 loss mitigation1 and insurance claim submission guidelines of the ,,fha mortgage insurance programs under the ,national ,housing ,act 7#ab ,u4,s4,c4 #agja et seq471 and an estimate of the annual costs to the ,mutual ,mortgage ,insurance ,fund1 since #bjjh1 resulting from any failures by mortgage servicers to comply with such guidelines4 7b7 ,report ,not later than the expiration of the #abj-;day period that begins upon the date of the enactment of this ,act1 the ,secretary shall submit a report to the ,congress on the results of the examination conducted pursuant to subsection 7a71 including recommendations for any administrative and legislative actions to improve mortgage servicer compliance with the guidelines referred to in subsection 7a74 #ad4 ,,fha emergency capital plan 7a7 ,establishment ,not later than the expiration of the #cj-;day period beginning on the date of the enactment of this ,act1 the ,secretary of ,housing and ,urban ,development shall develop1 submit to the ,congress1 and commence implementation of an emergency capital plan for the restoration of the fiscal solvency of the ,mutual ,mortgage ,insurance ,fund 7in this section referred to as the ,fund74 7b7 ,contents ,the emergency capital plan developed pursuant to this section shall-- 7#a7 provide a detailed explanation of the processes and controls by which amounts of capital that are assets of the ,fund are monitored and tracked2 7#b7 establish a plan to ensure the financial safety and soundness of the ,fund that avoids the need for borrowing amounts from the ,treasury of the ,united ,states to meet obligations of the ,fund2 and 7#c7 describe the procedure by which1 if necessary1 any amounts from the ,treasury needed to meet obligations of the ,fund will be obtained from the ,treasury4 7c7 ,monthly reports 7#a7 ,reports ,subject to paragraph 7#c71 upon the conclusion of each calendar month ending after the #ad-;day period that begins on the date of the enactment of this ,act1 the ,secretary of ,housing and ,urban ,development shall submit to the ,congress a report assessing the financial status of the ,fund at the conclusion of such month and setting forth the information described in paragraph 7#b74 7#b7 ,contents ,each report required under paragraph 7#a7 for a month shall contain the following information regarding the ,fund as of the conclusion of such month3 7,a7 ,the number of mortgages that are obligations of the ,fund that are #fj or more days delinquent1 the expected losses to the ,fund associated with such delinquent mortgages1 and the methodology used to make such calculation4 7,b7 ,the number of mortgages that are obligations of the ,fund that have a loan-to-value ratio at the time of origination that is less than #hj percent and the percentage of all mortgages that are obligations of the ,fund having such a ratio4 7,c7 ,the number of mortgages that are obligations of the ,fund that had an original principal obligation exceeding #abe percent of the median house price1 for a home of the size of the residence subject to the mortgage1 for the area in which such residence is located1 and the percentage of all mortgages that are obligations of the ,fund having such an original principal obligation4 7,d7 ,the number of mortgages that are obligations of the ,fund for which the mortgagor's income at the time of origination of the mortgage is greater than the median income for the area in which the residence subject to the mortgage is located1 and the percentage of all mortgages that are obligations of the ,fund for which the mortgagor has such an income4 7,e7 ,the balances for the financing and capital reserve accounts of the ,fund4 7,f7 ,any actions taken during such month to help ensure the financial soundness of the ,fund and compliance with section #bje7;f7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agaa7;f72 relating to a capital ratio requirement74 7#c7 ,termination of reporting requirement ,the requirement to submit reports under paragraph 7#a7 shall terminate on the first date after the date of the enactment of this ,act that the ,fund attains a capital ratio 7as such term is defined in section #bje7;f77#c7 of the ,national ,housing ,act7 of #b4j percent4 #ae4 ,,fha safety and soundness review 7a7 ,review ,the ,comptroller ,general of the ,united ,states shall provide for an independent third party to-- 7#a7 conduct a one-time review of the mortgage insurance programs and funds of the ,secretary of ,housing and ,urban ,development that shall determine1 as of the time of such review-- 7,a7 the financial safety and soundness of such programs and funds2 and 7,b7 the extent of loan loss reserves and capital adequacy of such programs and funds2 and 7#b7 to submit a report under subsection 7b74 ,such review shall be conducted in accordance with generally accepted accounting principles applicable to the private sector and ,federal entities4 7b7 ,report ,the report under this subsection shall describe the methodology and standards used to conduct the review under subsection 7a77#a71 set forth the results and findings of the review1 including the extent of loan loss reserves and capital adequacy of the mortgage insurance programs and funds of the ,secretary of ,housing and ,urban ,development1 and include recommendations regarding restoring such reserves and capital to maintain such programs and funds in a safe and sound condition4 7c7 ,timing ,the review required under subsection 7a7 shall be completed1 and the report required under subsection 7b7 shall be submitted1 not later than the expiration of the #fj-;day period beginning on the date of the enactment of this ,act4 7d7 ,rule of construction ,nothing in this section may be construed to alter or affect1 or exempt the ,secretary of ,housing and ,urban ,development from complying with1 any laws1 regulations1 or guidance relating to preparation or submission of budgets or audits or financial or management statements or reports4 #af4 ,,fha disclosure standards ,not later than the expiration of the #ij-;day period beginning on the date of the enactment of this ,act1 the ,secretary of ,housing and ,urban ,development shall review and revise all standards and requirements relating to disclosure of information regarding the mortgage insurance programs and funds1 including actuarial studies conducted under section #bjb7;a77#d7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjh7;a77#d771 quarterly reports under section #bjb7;a77#e7 of such ,act1 and annual audited financial statements under section #ech of such ,act 7#ab ,u4,s4,c4 #agce;f-#af71 to ensure that1 after the date of the enactment of this ,act1 such disclosures-- 7#a7 provide meaningful financial and other information that is timely1 comprehensive1 and accurate2 7#b7 do not contain any material misstatements or misrepresentations2 7#c7 make available all relevant information2 and 7#d7 prohibit material omissions that make the contents of the disclosure misleading4 #ag4 ,report on streamlining ,,fha programs 7a7 ,examination ,the ,secretary of ,housing and ,urban ,development shall conduct an examination of the mortgage insurance and any other programs of the ,federal ,housing ,administration to identify-- 7#a7 the level of use and need for such programs2 7#b7 any such programs that are unused or underused2 and 7#c7 methods for streamlining1 consolidating1 simplifying1 increasing the efficiency of1 and reducing the number of such programs4 7b7 ,report ,not later than the expiration of the #ab-month period that begins upon the date of the enactment of this ,act1 the ,secretary shall submit a report to the ,congress on the results of the examination conducted pursuant to subsection 7a71 including recommendations for any administrative and legislative actions to streamline1 consolidate1 simplify1 increase the efficiency of1 and reduce the number of such programs4 #ah4 ,budget compliance ,the ,secretary of ,housing and ,urban ,development shall allocate #b1ejj1jjj from the account for ,administrative ,contract ,expenses each fiscal year through ,september #cj1 #bjag1 which amounts shall be available only for the purposes of this ,act and the amendments made by this ,act1 including such additional actuarial reviews as may be required by section #e of this ,act and the amendments made by such section4