,i  #aac? ,,congress  #a/ ,session  ,h4 
,r4 #aged  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,april #be1 #bjac ,mr4
 ,pet]s ( ,mi*igan 7= himself1 ,mr4     
,ross1 & ,mr4 ,ellison7 introduc$ !     
foll[+ bill2 :i* 0 ref]r$ to !          
,committee on ,f9ancial ,s]vices  ,a    
,,bill  ,to e/abli% pilot programs to   
enc\rage ! use ( %>$ appreciation       
mortgage modifications1 & = o!r         
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,pres]v+ ,am]ican          
,home[n]%ip ,act ( #bjac4  #b4 ,f9d+s ,!
 ,congress f9ds ! foll[+3  7#a7 ,!      
/ability ( ! economy1 h\s+ m>ket1 &     
neighborhoods ( ! ,unit$ ,/ates dep5ds  
^u r$uc+ ! numb] ( =eclosures 9 ! ,unit$
 ,/ates4  7#b7 ,home[n]s /ruggl+ to make
 paym5ts on homes ) mortgages t are     
deeply und]wat] are "s ( ! mo/ at risk (
 =eclosure4  7#c7 ,a prop]ly c>ri$ out  
pr9cipal modification program w pres]ve 
! assets ( ! gov]nm5t-sponsor$ mortgage 
ent]prises assets & r$uce taxpay]       
losses1 consi/5t ) ! mission ( ! ,f$]al 

,h\s+ ,f9ance ,ag5cy z ! ent]prises'    
cons]vator1 & w help fo/] a m resili5t  
national h\s+ m>ket4  #c4 ,%>$          
appreciation mortgage modification pilot
 programs  7a7 ,def9itions ,9 ?is       
section--  7#a7 ! t]m capital improvem5t
 means a home improvem5t describ$ 9     
table #d ( ,publication #ecj ( !        
,int]nal ,rev5ue ,s]vice1 or any        
successor !reto2  7#b7 ! t]m cov]$      
mortgage means a mortgage--  7,a7 t is--
  7i7 sold to ! ,f$]al ,national        
,mortgage ,association1 ! ,gov]nm5t     
,national ,mortgage ,association1 or !  
,f$]al ,home ,loan ,mortgage            
,corporation2 or  7ii7 insur$ "u title  
,,ii ( ! ,national ,h\s+ ,act 7#ab      
,u4,s4,c4 #agjg et seq472  7,b7 t is    
secur$ by real prop]ty t is ! prim>y    
resid5ce ( a home[n]2  7,c7 t has an    
out/&+ pr9cipal balance ( an am\nt t is 
great] ?an ! apprais$ value ( ! real    
prop]ty secur+ ! mortgage1 on or ab\t ! 
date on :i* ! home[n] is approv$ to     
p>ticipate 9 ! pilot program "u         

subsection 7b72  7,d7 ) respect to :i* !
 home[n] is1 bo? z ( ! date ( ! enactm5t
 ( ?is ,act & z ( ! date ( !            
modification "u a pilot program "u      
subsection 7b7--  7i7 n few] ?an #fj    
days del9qu5t2 or  7ii7 at risk ( imm95t
 default2 &  7,e7 ( a home[n] :o has a  
docum5t$ f9ancial h>d%ip t prev5ts or w 
prev5t ! home[n] f mak+ mortgage        
paym5ts2  7#c7 ! t]m ,director means !  
,director ( ! ,f$]al ,h\s+ ,f9ance      
,ag5cy2  7#d7 ! t]m ent]prise has ! same
 mean+ z 9 section #acjc ( ! ,f$]al     
,h\s+ ,ent]prises ,f9ancial ,safety &   
,s\ndness ,act ( #aiib 7#ab ,u4,s4,c4   
#dejb72  7#e7 ! t]m home[n] means !     
mortgagor "u a cov]$ mortgage2  7#f7 !  
t]m inve/or means--  7,a7 ! mortgagee "u
 a cov]$ mortgage2 or  7,b7 9 ! case ( a
 cov]$ mortgage t collat]alizes an      
asset-back$ security1 z def9$ 9 section 
#c7;a7 ( ! ,securities ,ex*ange ,act (  
#aicd 7#ae ,u4,s4,c4 #gh;c7a771 ! tru/ee
 = ! asset-back$ security2  7#g7 ! t]m  
pilot program means a pilot program     

e/abli%$ "u subsection 7b72 &  7#h7 !   
t]m %>$ appreciation mortgage           
modification means a modification ( a   
cov]$ mortgage 9 accordance ) subsection
 7c74  7b7 ,pilot programs e/abli%$ ,!  
,director ( ! ,f$]al ,h\s+ ,f9ance      
,ag5cy & ! ,f$]al ,h\s+ ,commission]1 9 
consultation ) ! ,secret>y ( !          
,treasury1 %all ea* e/abli% a pilot     
program to enc\rage1 ?r\gh assi/ance    
provid$ "u ! ,home ,af=dable            
,modification ,program "u ! ,mak+ ,home 
,af=dable initiative ( ! ,secret>y ( !  
,treasury1 ! use ( %>$ appreciation     
mortgage modifications t are design$ to 
return great] ca% fl[ to inve/ors ?an   
o!r loss-mitigation activities1 includ+ 
=eclosure1 & result 9 positive net      
pres5t value = ! inve/or4  7c7 ,%>$     
appreciation mortgage modification ,=   
purposes ( ! pilot program1 a %>$       
appreciation mortgage modification      
%all--  7#a7 r$uce ! loan-to-value ratio
 ( a cov]$ mortgage--  7,a7 to #aae     
p]c5t imm$iately ^u su* modification1 by

 imm$iately r$uc+ ! am\nt ( pr9cipal "u 
! cov]$ mortgage accord+ly2 &  7,b7 to  
#ie p]c5t )9 #c ye>s1 by r$uc+ ! am\nt (
 pr9cipal "u ! cov]$ mortgage by #a_/c  
at ! end ( ea* ye> = #c ye>s2  7#b7     
r$uce ! int]e/ rate = a cov]$ mortgage1 
if a r$uction ( pr9cipal "u p>agraph    
7#a7 w\ld n result 9 a r$uc$ mon?ly     
paym5t t is af=dable to ! home[n]2  7#c7
 r$uce ! am\nt ( any p]iodic paym5t     
requir$ to be made by ! home[n]1 s t !  
am\nt payable by ! home[n] is equal to !
 am\nt t w\ld be payable by ! home[n]   
if1 on ! date on :i* ! %>$ appreciation 
mortgage modification takes effect--    
7,a7 all r$uctions ( ! am\nt ( pr9cipal 
"u p>agraph 7#a7 _h be5 made2 &  7,b7   
any r$uction 9 ! int]e/ rate "u p>agraph
 7#b7 = :i* ! cov]$ mortgage is eligible
 _h be5 made2  7#d7 require ! home[n] to
 pay to ! inve/or aft] ref9anc+ or sell+
 ! real prop]ty secur+ a cov]$ mortgage 
a p]c5tage ( ! am\nt ( any increase 7n  
to exce$ #ej p]c5t ( su* increase7 9 !  
value ( ! real prop]ty dur+ ! p]iod     

beg9n+ on ! date on :i* ! home[n] 0     
approv$ to p>ticipate 9 ! pilot program 
& end+ on ! date ( ! ref9anc+ or sale t 
is equal to ! p]c5tage by :i* ! inve/or 
r$uc$ ! am\nt ( pr9cipal "u ! cov]$     
mortgage "u p>agraph 7#a72 &  7#e7      
result 9 a positive net pres5t value = !
 inve/or aft] tak+ into acc\nt !        
pr9cipal r$uction "u p>agraph 7#a7 &1 if
 necess>y1 any int]e/ rate r$uction "u  
p>agraph 7#b74  7d7 ,det]m9ation ( value
 ( home  7#a7 ,9 g5]al ,= purposes ( ?is
 section1 ! value ( real prop]ty secur+ 
a cov]$ mortgage %all be det]m9$ by a   
lic5s$ apprais] :o is indep5d5t ( & does
 n o!rwise d bus9ess ) ! home[n]1       
s]vic]1 inve/or1 or an affiliate ( !    
home[n]1 s]vic]1 or inve/or1 except t1  
:]e available1 su* value may be det]m9$ 
us+ a reliable e/imate ( value provid$  
by an automat$ valuation model ( an     
ent]prise4  7#b7 ,"t = det]m9ation ,!   
value ( real prop]ty secur+ a cov]$     
mortgage %all be det]m9$ on a date t is 
z close z practicable to ! date on :i* a

 home[n] beg9s to p>ticipate 9 a pilot  
program4  7#c7 ,co/  7,a7               
,responsibility = co/  7i7 ,initial co/ 
,! inve/or %all pay ! co/ ( an appraisal
 or o!r det]m9ation ( value "u p>agraph 
7#a74  7ii7 ,d$uction f home[n] %>e ,at 
! option ( ! inve/or1 ! co/ ( an        
appraisal or o!r det]m9ation ( value "u 
p>agraph 7#a7 may be add$ to ! am\nt    
paid by ! home[n] to ! inve/or "u       
subsection 7c77#d74  7,b7 ,reasonabl5ess
 ( co/ ,! co/ ( an appraisal or o!r     
det]m9ation ( value "u p>agraph 7#a7    
%all be reasonable1 z det]m9$ by !      
,director & ! ,f$]al ,h\s+ ,commission]4
  7#d7 ,second appraisal ,at ! "t (     
ref9anc+ or sale ( real prop]ty secur+ a
 cov]$ mortgage1 ! inve/or may reque/ a 
second appraisal ( ! value ( ! real     
prop]ty1 at ! exp5se ( ! inve/or1 by a  
lic5s$ apprais] :o is indep5d5t ( & does
 n o!rwise d bus9ess ) ! home[n]1       
s]vic]1 inve/or1 or an affiliate ( !    
home[n]1 s]vic]1 or inve/or1 if !       
inve/or believes t ! sale price or      

claim$ value at ! "t ( ! ref9anc+ is n  
an accurate reflection ( ! fair m>ket   
value ( ! real prop]ty4  7e7            
,eligibility = r$uction ( pr9cipal ,ea* 
pilot program %all provide t a home[n]  
is n eligible = a r$uction 9 ! am\nt (  
pr9cipal "u a cov]$ mortgage "u a %>$   
appreciation mortgage modification if1  
aft] ! home[n] beg9s p>ticipat+ 9 !     
pilot program1 ! home[n]--  7#a7 7,a7 is
 del9qu5t on m ?an #c paym5ts "u ! %>$  
appreciation mortgage modification dur+ 
any ( ! #c successive #a-ye> p]iods     
beg9n+ on ! date on :i* ! %>$           
appreciation mortgage modification is   
made2 &  7,b7 fails to be curr5t ) all  
paym5ts describ$ 9 p>agraph 7#a7 be=e ! 
end ( ea* #a-ye> p]iod describ$ 9       
p>agraph 7#a72 or  7#b7 obta9s a        
mortgage1 loan1 or cr$it1 or incurs any 
o!r debt1 t creates any additional li5  
on ! resid5ce t is subject to ! cov]$   
mortgage = :i* ! %>$ appreciation       
mortgage modification or = :i* su*      
resid5ce is us$ z collat]al4  ,!        

,director %all require1 z a condition = 
p>ticipation 9 a pilot program by a     
home[n]1 t ! home[n] ent] into su*      
agreem5ts z ! ,director consid]s        
necess>y to ensure compliance ) ?is     
subsection4  7f7 ,notification  7#a7 ,9 
g5]al ,ea* pilot program %all require t 
! s]vic] ( a cov]$ mortgage transmit to 
ea* home[n] p>ticipat+ 9 ! pilot program
 writt5 notice1 9 cle> & simple         
language1 ( h[ to ma9ta9 & submit any   
docum5tation ( capital improvem5ts t is 
necess>y to ensure t ! %>es ( any       
increase 9 ! value ( ! real prop]ty     
secur+ ! cov]$ mortgage to :i* ! inve/or
 & ! home[n] are entitl$ are det]m9$    
accurately4  7#b7 ,tim+ ,! pilot program
 %all require t a s]vic] provide !      
notice describ$ 9 p>agraph 7#a7--  7,a7 
be=e ! home[n] accepts a %>$            
appreciation mortgage modification2 &   
7,b7 be=e ! home[n] sells or ref9ances !
 real prop]ty secur+ ! cov]$ mortgage4  
7g7 ,p>ticipation by s]vic]s ,!         
,director %all require ea* ent]prise to 

require t any s]vic] ( a cov]$ mortgage 
9 :i* ! ent]prise is an inve/or         
p>ticipate 9 ! pilot program ( ! ,f$]al 
,h\s+ ,f9ance ,ag5cy by (f]+ %>$        
appreciation mortgage modifications to a
 r&om & /ati/ically significant sampl+ (
 home[n]s ) cov]$ mortgages4  7h7       
,mortgage insurance ,! ,director %all-- 
7#a7 provide t an ent]prise may         
negotiate reg>d+ a %>$ appreciation     
mortgage modification ( a cov]$ mortgage
 ) any provid] ( mortgage insurance = a 
mortgage on ! prop]ty subject to ! cov]$
 mortgage2 &  7#b7 all[ advance claim   
agreem5ts ) respect to su* mortgage     
insurance policies4  7i7 ,ma9t5ance (   
li5 /atus ,a %>$ appreciation mortgage  
modification ( a cov]$ mortgage "u a    
pilot program "u ?is section %all n     
impair ! priority /atus ( li5s on !     
resid5ce t is subject to ! mortgage4    
7j7 ,/udies & reports ,! ,director & !  
,f$]al ,h\s+ ,commission] %all--  7#a7  
conduct annual /udies ( ! pilot programs
 ( ! ,f$]al ,h\s+ ,f9ance ,ag5cy & !    

,f$]al ,h\s+ ,adm9i/ration1             
respectively2 &  7#b7 submit a report to
 ! ,congress conta9+ ! results ( ea*    
/udy at ! end ( ea* ( ! #c successive   
#a-ye> p]iods beg9n+ on ! date on :i* ! 
pilot program is e/abli%$4  7k7         
,t]m9ation ,on & aft] ! date t is #b    
ye>s aft] ! date ( enactm5t ( ?is ,act1 
! ,director & ! ,f$]al ,h\s+            
,commission] may n ent] into any        
agreem5t "u ! pilot program ) respect to
 a %>$ appreciation mortgage            
modification4