,i #aacth ,,congress #ast ,session ,h4 ,r4 #bgfg ,,in ,,the ,,house ,,of ,,representatives ,july #bb1 #bjac ,mr4 ,garrett 7for himself1 ,mr4 ,hensarling1 ,mr4 ,neugebauer1 ,mrs4 ,capito1 and ,mr4 ,mc,henry7 introduced the following bill2 which was referred to the ,committee on ,financial ,services1 and in addition to the ,committee on ,ways and ,means1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to protect ,american taxpayers and homeowners by creating a sustainable housing finance system for the #bast century4 #a4 ,short title ,this ,act may be cited as the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac4 #b4 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title4 ,sec4 #b4 ,table of contents4 ,title ,i--,wind-down of ,fannie ,mae and ,freddie ,mac ,sec4 #aja4 ,short title4 ,sec4 #ajb4 ,definitions4 ,sec4 #ajc4 ,termination of current conservatorship2 mandatory receivership4 ,sec4 #ajd4 ,limitations on enterprise authority4 ,sec4 #aje4 ,modifications to increases in conforming loan limits4 ,sec4 #ajf4 ,mandatory risk-sharing4 ,sec4 #ajg4 ,limitation of enterprise mortgage purchases to qualified mortgages4 ,sec4 #ajh4 ,prohibition relating to use of power of eminent domain4 ,sec4 #aji4 ,receiver's discretionary authority to create receivership entity4 ,sec4 #aaj4 ,authority of receiver to repeal enterprise charter4 ,title ,,ii--,,fha ,reform ,sec4 #bja4 ,short title4 ,sec4 #bjb4 ,definitions4 ,subtitle ,a--,organization ,sec4 #baa4 ,establishment4 ,sec4 #bab4 ,purposes4 ,sec4 #bac4 ,general powers4 ,sec4 #bad4 ,board of ,directors4 ,sec4 #bae4 ,officers and personnel4 ,sec4 #baf4 ,financial1 underwriting1 and operations systems4 ,sec4 #bag4 ,procurement4 ,sec4 #bah4 ,applicability of laws4 ,sec4 #bai4 ,evaluation4 ,sec4 #bbj4 ,funding4 ,sec4 #bba4 ,effective date4 ,subtitle ,b--,business authority and requirements ,sec4 #bca4 ,authority to carry out ,,fha and other business4 ,sec4 #bcb4 ,eligible single-family mortgages4 ,sec4 #bcc4 ,risk-sharing4 ,sec4 #bcd4 ,limitation on mortgage insurance coverage4 ,sec4 #bce4 ,premiums4 ,sec4 #bcf4 ,default and foreclosure statement4 ,sec4 #bcg4 ,occupancy and rent limitations for multifamily mortgage insurance4 ,sec4 #bch4 ,effective date4 ,subtitle ,c--,financial safety and soundness ,sec4 #bea4 ,authority of ,director4 ,sec4 #beb4 ,budgets and business plans4 ,sec4 #bec4 ,annual business plan2 use of ,,gaap4 ,sec4 #bed4 ,examinations1 reports1 and cost estimates4 ,sec4 #bee4 ,reimbursement of costs4 ,sec4 #bef4 ,mutual ,mortgage ,insurance ,fund capital reserve4 ,sec4 #beg4 ,capital classifications and performance measures for ,mutual ,mortgage ,insurance ,fund4 ,sec4 #beh4 ,enforcement4 ,sec4 #bei4 ,capital reserve requirements for other funds4 ,sec4 #bfj4 ,authority to establish temporary capital ratios in cases of nationwide countercyclical market adjustment4 ,sec4 #bfa4 #g-year borrower suspension for foreclosure4 ,sec4 #bfb4 ,borrower ineligibility upon second foreclosure4 ,sec4 #bfc4 ,limitation on seller concessions4 ,sec4 #bfd4 ,lender repurchase requirement4 ,sec4 #bfe4 ,indemnification by mortgagees4 ,sec4 #bff4 ,prohibitions relating to use of power of eminent domain4 ,sec4 #bfg4 ,residual income requirement4 ,sec4 #bfh4 ,effective date4 ,subtitle ,d--,transition ,sec4 #bha4 ,transition period4 ,sec4 #bhb4 ,authority during transition period4 ,sec4 #bhc4 ,advisory ,board4 ,sec4 #bhd4 ,transfer of ,,hud authority4 ,sec4 #bhe4 ,wind-up of ,,hud affairs4 ,sec4 #bhf4 ,continuation and coordination of certain actions4 ,sec4 #bhg4 ,transfer and rights of ,,hud employees4 ,sec4 #bhh4 ,transfer of property and facilities4 ,sec4 #bhi4 ,effective date4 ,subtitle ,e--,related amendments and provisions ,sec4 #bia4 ,,gnma authority4 ,sec4 #bib4 ,repeal of certain ,,fha programs4 ,sec4 #bic4 ,conforming amendments4 ,sec4 #bid4 ,rule of construction4 ,sec4 #bie4 ,effective date4 ,title ,,iii--,building a ,new ,market ,structure ,subtitle ,a--,national ,mortgage ,market ,utility ,sec4 #cja4 ,short title4 ,sec4 #cjb4 ,findings and purposes4 ,sec4 #cjc4 ,definitions4 ,part #a--;,establishment and authority of the ,utility ,sec4 #caa4 ,establishment4 ,sec4 #cab4 ,general powers2 authorized and prohibited activities4 ,sec4 #cac4 ,transfer of ownership of ,platform4 ,sec4 #cad4 ,funding4 ,sec4 #cae4 ,regulation1 supervision1 and enforcement4 ,sec4 #caf4 ,civil and criminal liability4 ,part #b--,standards for qualified securities ,sec4 #cba4 ,qualified securities4 ,sec4 #cbb4 ,standards for qualified securities4 ,sec4 #cbc4 ,liability for misleading statements4 ,sec4 #cbd4 ,unlawful representations4 ,sec4 #cbe4 ,contrary stipulations void4 ,part #c--,national ,mortgage ,data ,repository ,sec4 #cca4 ,organization and operation4 ,sec4 #ccb4 ,legal effect of registration with ,repository4 ,sec4 #ccc4 ,grants to ,states2 repayment4 ,sec4 #ccd4 ,judicial review4 ,sec4 #cce4 ,transition provisions4 ,part #d--;,conforming amendments ,sec4 #cda4 ,conforming amendment to ,federal ,home ,loan ,bank ,act4 ,sec4 #cdb4 ,conforming amendments to the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act4 ,sec4 #cdc4 ,conforming amendments to ,securities ,act of #aicc4 ,sec4 #cdd4 ,conforming amendments to title #ah1 ,united ,states ,code4 ,subtitle ,b--,covered ,bonds ,sec4 #cea4 ,short title4 ,sec4 #ceb4 ,definitions4 ,sec4 #cec4 ,regulatory oversight of covered bond programs established4 ,sec4 #ced4 ,resolution upon default or insolvency4 ,sec4 #cee4 ,securities law provisions4 ,sec4 #cef4 ,miscellaneous provisions4 ,title ,,iv--,removing ,barriers to ,new ,investment ,sec4 #dja4 ,basel ,,iii impact study4 ,sec4 #djb4 ,basel ,,iii ,liquidity ,coverage ,ratio amendments4 ,sec4 #djc4 ,definition of points and fees4 ,sec4 #djd4 ,exclusion of issuers of asset-backed securities from covered funds4 ,sec4 #dje4 ,suspension of regulation ,,ab ,,ii rulemaking4 ,sec4 #djf4 ,effective date of certain mortgage reform regulations4 ,sec4 #djg4 ,repeal of credit risk retention regulations4 ,sec4 #djh4 ,mortgages in qualified securities4 ,sec4 #dji4 ,mortgage loans held in portfolio4 ,sec4 #daj4 ,repeal of certain mortgage-related provisions4 ,sec4 #daa4 ,amendments to the ,truth in ,lending ,act4 ,sec4 #dab4 ,financial ,institutions ,examination ,fairness and ,reform4 ,sec4 #dac4 ,notice of junior mortgage or lien4 ,sec4 #dad4 ,limitation on mortgages held by loan servicers4 ,title ,v--,miscellaneous ,provisions ,sec4 #eja4 ,preserving access to manufactured housing4 ,sec4 #ejb4 ,common sense economic recovery4 ,sec4 #ejc4 ,technical ,amendments to ,federal ,home ,loan ,bank ,act4 ,sec4 #ejd4 ,preservation of attorney-client privilege for information provided to ,,fhfa4 ,sec4 #eje4 ,,fhfa ,liaison ,membership in ,federal ,financial ,institutions ,examination ,council4 ,sec4 #ejf4 ,recognition of ,,fhfa enforcement authority with regard to regulated entities4 ,sec4 #ejg4 ,exception from ,right to ,financial ,privacy ,act for ,,fhfa as conservator or receiver4 ,sec4 #ejh4 ,technical amendment to ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib4 ,sec4 #eji4 ,application of presumption to enterprise streamlined refinancings4 ,sec4 #eaj4 ,,fhfa authority to regulate and examine contractual counterparties4 ,sec4 #eaa4 ,election of directors of a merged ,federal ,home ,loan ,bank4 ,i ,wind-down of ,fannie ,mae and ,freddie ,mac #aja4 ,short title ,this title may be cited as the ,,gse ,bailout ,elimination and ,taxpayer ,protection ,act4 #ajb4 ,definitions ,for purposes of this title1 the following definitions shall apply3 7#a7 ,charter ,the term charter means-- 7,a7 with respect to the ,federal ,national ,mortgage ,association1 the ,federal ,national ,mortgage ,association ,charter ,act 7#ab ,u4,s4,c4 #agaf et seq472 and 7,b7 with respect to the ,federal ,home ,loan ,mortgage ,corporation1 the ,federal ,home ,loan ,mortgage ,corporation ,act 7#ab ,u4,s4,c4 #adea et seq474 7#b7 ,director ,the term ,director means the ,director of the ,federal ,housing ,finance ,agency4 7#c7 ,enterprise ,the term enterprise means-- 7,a7 the ,federal ,national ,mortgage ,association2 and 7,b7 the ,federal ,home ,loan ,mortgage ,corporation4 #ajc4 ,termination of current conservatorship2 mandatory receivership ,upon the expiration of the #e-year period beginning upon the date of the enactment of this ,act1 the ,director shall1 with respect to each enterprise1 immediately appoint the ,federal ,housing ,finance ,agency as receiver under section #acfg of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib and carry out such receivership under the authority of such section4 #ajd4 ,limitations on enterprise authority 7a7 ,portfolio limitations ,subtitle ,b of title ,,xiii of the ,housing and ,community ,development ,act of #aiib 7#ab ,u4,s4,c4 #dfaa et seq47 is amended by adding at the end the following new section3 #acfi;,e4 ,restriction on mortgage assets of enterprises 7a7 ,restriction ,subject to subsection 7b71 no enterprise shall own1 as of any applicable date in this subsection or thereafter1 mortgage assets in excess of-- 7#a7 as of ,december #ca1 #bjac1 #eej1jjj1jjj1jjj2 or 7#b7 as of ,december #ca of each year thereafter1 #he percent of the aggregate amount of mortgage assets that the enterprise was permitted to own pursuant to this section as of ,december #ca of the immediately preceding calendar year4 7b7 ,limitation ,in no event shall an enterprise be required under this section to own less than #bej1jjj1jjj1jjj in mortgage assets4 7c7 ,definition of mortgage assets ,for purposes of this section1 the term mortgage assets means1 with respect to an enterprise1 assets of such enterprise consisting of mortgages1 mortgage loans1 mortgage-related securities1 participation certificates1 mortgage-backed commercial paper1 obligations of real estate mortgage investment conduits and similar assets1 in each case to the extent such assets would appear on the balance sheet of such enterprise in accordance with generally accepted accounting principles in effect in the ,united ,states as of ,september #g1 #bjjh 7as set forth in the opinions and pronouncements of the ,accounting ,principles ,board and the ,american ,institute of ,certified ,public ,accountants and statements and pronouncements of the ,financial ,accounting ,standards ,board from time to time2 and without giving any effect to any change that may be made after ,september #g1 #bjjh1 in respect of ,statement of ,financial ,accounting ,standards ,no4 #adj or any similar accounting standard74 4 7b7 ,equitability in guarantee fees ,section #acbg of ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #dedg7 is amended by adding at the end the following new subsection3 7f7 ,equitability in guarantee fees 7#a7 ,requirement ,notwithstanding any other provision of this section1 the ,director shall ensure1 pursuant to the annual review conducted under paragraph 7#b71 that each enterprise charges a guarantee fee1 in connection with any mortgage guaranteed after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 in an amount that the ,director determines is equivalent to the amount that the enterprise would charge if the enterprise were held to the same capital standards as private banks or financial institutions4 7#b7 ,annual determination ,not less often than annually1 the ,director shall review the guarantee fees charged by each enterprise and determine how such fees compare to the amount determined by the ,director under paragraph 7#a74 ,if the ,director determines that such fees charged by an enterprise are less than such amount1 the ,director shall1 by order1 require the enterprise to increase such fees in such amount as the ,director determines necessary to comply with paragraph 7#a74 7#c7 ,flexibility in determination of increase ,to determine the amount of any increase under this subsection1 the ,director shall establish a pricing mechanism as the ,director considers appropriate1 taking into consideration current market conditions1 including the current market share of an enterprise1 and any data collected pursuant to section #afja of the ,housing and ,economic ,recovery ,act of #bjjh 7#ab ,u4,s4,c4 #dead;a74 4 7c7 ,repeal of mandatory housing activities 7#a7 ,repeal of housing goals ,the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib is amended by striking sections #acca through #accf 7#ab ,u4,s4,c4 #defa-f74 7#b7 ,conforming amendments ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib is amended-- 7,a7 in section #acjc7bh7 7#ab ,u4,s4,c4 #dejb7bh771 by striking 1 and1 for the purposes and all that follows through designated disaster areas2 7,b7 in section #acbd7;b77#a77;,a7 7#ab ,u4,s4,c4 #dedd7;b77#a77;,a771 by striking clauses 7i71 7ii71 and 7iv72 7,c7 in section #acci7;h7 7#ab ,u4,s4,c4 #defi7;h771 by striking paragraph 7#g72 7,d7 in section #acda 7#ab ,u4,s4,c4 #deha7-- 7i7 in subsection 7a7-- 7,i7 in paragraph 7#a71 by inserting or after the semicolon at the end2 7,,ii7 in paragraph 7#b71 by striking the semicolon at the end and inserting a period2 and 7,,iii7 by striking paragraphs 7#c7 and 7#d72 and 7ii7 in subsection 7b77#b7-- 7,i7 in subparagraph 7,a71 by inserting or after the semicolon at the end2 7,,ii7 by striking subparagraphs 7,b7 and 7,c72 and 7,,iii7 by redesignating subparagraph 7,d7 as subparagraph 7,b72 7,e7 in section #acde7;a7 7#ab ,u4,s4,c4 #dehe7;a77-- 7i7 in paragraph 7#a71 by inserting or after the semicolon at the end2 7ii7 in paragraph 7#b71 by striking the semicolon at the end and inserting a period2 and 7iii7 by striking paragraphs 7#c7 and 7#d72 and 7,f7 in section #acga7;a77#b7 7#ab ,u4,s4,c4 #dfca7;a77#b771 by striking with any housing goal established under subpart ,b of part #b of subtitle ,a of this title1 with section #accf or #accg of this title14 7#c7 ,repeal of ,housing ,trust ,fund 7,a7 ,repeal ,the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib is amended by striking sections #accg and #acch 7#ab ,u4,s4,c4 #defg1 #defh74 7,b7 ,conforming amendments ,the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib is amended-- 7i7 in section #acjc7bd77;,b7 7#ab ,u4,s4,c4 #dejb7bd77;,b771 by striking #acch and2 7ii7 in section #acbd7;b77#a77;,a7 7#ab ,u4,s4,c4 #dedd7;b77#a77;,a771 as amended by the preceding provisions of this ,act-- 7,i7 by striking clause 7iii72 7,,ii7 by striking the dash after which and inserting the text of clause 7v7 and a period2 and 7,,iii7 by striking clause 7v72 7iii7 in section #acci7;b7-- 7,i7 by striking paragraph 7#a72 7,,ii7 by striking the dash after consist of and inserting the text of paragraph 7#b7 and a period2 and 7,,iii7 by striking paragraph 7#b72 and 7iv7 in section #acde 7#ab ,u4,s4,c4 #dehe71 by striking subsection 7f74 #aje4 ,modifications to increases in conforming loan limits 7a7 ,fannie ,mae ,section #cjb7;b77#b7 of the ,federal ,national ,mortgage ,association ,charter ,act 7#ab ,u4,s4,c4 #agag7;b77#b77 is amended-- 7#a7 in the #hth sentence-- 7,a7 in inserting or subtracting from after adding to2 and 7,b7 by inserting or decrease1 respectively before the first comma2 7#b7 by striking the #ith and #ajth sentences2 7#c7 by striking the last sentence2 7#d7 by inserting 7,a7 after the paragraph designation2 and 7#e7 by adding at the end the following new subparagraph3 7,b7 ,high-,cost areas 7i7 ,maximum original principal limitation ,subject to clause 7ii71 the limitations established pursuant to subparagraph 7,a7 shall also be increased1 with respect to properties of a particular size located in any area for which #aae percent of the median house price for such size residence exceeds the limitation under subparagraph 7,a7 for such size residence1 to the lesser of-- 7,i7 7aa7 for the first year beginning after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 the difference between-- 7,,aa7 #aej percent of the limitation under subparagraph 7,a7 for such size residence2 and 7,,bb7 #bj1jjj in the case of a #a-;family residence1 #be1fjd in the case of a #b-;family residence1 #cj1iej in the case of a #c-;family residence1 and #ch1dfc in the case of a #d-;family residence2 7bb7 for the second year beginning after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 the difference between-- 7,,aa7 #aej percent of the limitation under subparagraph 7,a7 for such size residence2 and 7,,bb7 #dj1jjj in the case of a #a-;family residence1 #ea1bjh in the case of a #b-;family residence1 #fa1ijj in the case of a #c-;family residence1 and #gf1ibf in the case of a #d-;family residence2 7cc7 for the third year beginning after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 the difference between-- 7,,aa7 #aej percent of the limitation under subparagraph 7,a7 for such size residence2 and 7,,bb7 #fj1jjj in the case of a #a-;family residence1 #gf1hab in the case of a #b-;family residence1 #ib1hej in the case of a #c-;family residence1 and #ajc1chi in the case of a #d-;family residence2 7dd7 for the fourth year beginning after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 the difference between-- 7,,aa7 #aej percent of the limitation under subparagraph 7,a7 for such size residence2 and 7,,bb7 #hj1jjj in the case of a #a-;family residence1 #ajb1daf in the case of a #b-;family residence1 #abc1hjj in the case of a #c-;family residence1 and #aec1heb in the case of a #d-;family residence2 and 7ee7 for the fifth year beginning after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 the difference between-- 7,,aa7 #aej percent of the limitation under subparagraph 7,a7 for such size residence2 and 7,,bb7 #ajj1jjj in the case of a #a-;family residence1 #abh1jbj in the case of a #b-;family residence1 #aed1gej in the case of a #c-;family residence1 and #aib1cae in the case of a #d-;family residence2 7,,ii7 the amount that is equal to #aae percent of the median house price in such area for such size residence2 or 7,,iii7 the limitation in effect for such size residence for such area1 pursuant to the last sentence of this paragraph as in effect immediately before the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 as of the date of such enactment4 7ii7 ,prohibition on new high-cost areas ,the limitations established pursuant to subparagraph 7,a7 may not be increased1 with respect to properties of any size located in a particular area unless1 as of the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 such foregoing limitations in effect for such area for any size residence were determined under the authority provided in the last sentence of this paragraph1 as in effect immediately before such enactment4 4 7b7 ,freddie ,mac ,section #cje7;a77#b7 of the ,federal ,home ,loan ,mortgage ,corporation ,act 7#ab ,u4,s4,c4 #aded7;a77#b77 is amended-- 7#a7 in the #gth sentence-- 7,a7 in inserting or subtracting from after adding to2 and 7,b7 by inserting or decrease1 respectively before the first comma2 and 7#b7 by striking the #hth and #ith sentences2 7#c7 by striking the last sentence2 7#d7 by inserting 7,a7 after the paragraph designation2 and 7#e7 by adding at the end the following new subparagraph3 7,b7 ,high-,cost areas 7i7 ,maximum original principal limitation ,subject to clause 7ii71 the limitations established pursuant to subparagraph 7,a7 shall also be increased1 with respect to properties of a particular size located in any area for which #aae percent of the median house price for such size residence exceeds the limitation under subparagraph 7,a7 for such size residence1 to the lesser of-- 7,i7 7aa7 for the first year beginning after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 the difference between-- 7,,aa7 #aej percent of the limitation under subparagraph 7,a7 for such size residence2 and 7,,bb7 #bj1jjj in the case of a #a-;family residence1 #be1fjd in the case of a #b-;family residence1 #cj1iej in the case of a #c-;family residence1 and #ch1dfc in the case of a #d-;family residence2 7bb7 for the second year beginning after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 the difference between-- 7,,aa7 #aej percent of the limitation under subparagraph 7,a7 for such size residence2 and 7,,bb7 #dj1jjj in the case of a #a-;family residence1 #ea1bjh in the case of a #b-;family residence1 #fa1ijj in the case of a #c-;family residence1 and #gf1ibf in the case of a #d-;family residence2 7cc7 for the third year beginning after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 the difference between-- 7,,aa7 #aej percent of the limitation under subparagraph 7,a7 for such size residence2 and 7,,bb7 #fj1jjj in the case of a #a-;family residence1 #gf1hab in the case of a #b-;family residence1 #ib1hej in the case of a #c-;family residence1 and #ajc1chi in the case of a #d-;family residence2 7dd7 for the fourth year beginning after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 the difference between-- 7,,aa7 #aej percent of the limitation under subparagraph 7,a7 for such size residence2 and 7,,bb7 #hj1jjj in the case of a #a-;family residence1 #ajb1daf in the case of a #b-;family residence1 #abc1hjj in the case of a #c-;family residence1 and #aec1heb in the case of a #d-;family residence2 and 7ee7 for the fifth year beginning after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 the difference between-- 7,,aa7 #aej percent of the limitation under subparagraph 7,a7 for such size residence2 and 7,,bb7 #ajj1jjj in the case of a #a-;family residence1 #abh1jbj in the case of a #b-;family residence1 #aed1gej in the case of a #c-;family residence1 and #aib1cae in the case of a #d-;family residence2 7,,ii7 the amount that is equal to #aae percent of the median house price in such area for such size residence2 or 7,,iii7 the limitation in effect for such size residence for such area1 pursuant to the last sentence of this paragraph as in effect immediately before the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 as of the date of such enactment4 7ii7 ,prohibition on new high-cost areas ,the limitations established pursuant to subparagraph 7,a7 may not be increased1 with respect to properties of any size located in a particular area unless1 as of the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 such foregoing limitations in effect for such area for any size residence were determined under the authority provided in the last sentence of this paragraph1 as in effect immediately before such enactment4 4 #ajf4 ,mandatory risk-sharing ,subpart ,a of part #b of subtitle ,a of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib is amended by adding after section #acbg 7#ab ,u4,s4,c4 #dedg7 the following new section3 #acbh4 ,mandatory risk-sharing transactions 7a7 ,in general ,the ,director shall require each enterprise to develop and undertake transactions involving the guarantee by the enterprises of securities and obligations based on or backed by mortgages on residential real properties designed principally for occupancy of from #a to #d families that provide for private market participants to share or assume credit risk associated with such mortgages1 as follows3 7#a7 ,required percentage of business ,the ,director shall require that not less than #aj percent of the annual business of each enterprise 7as measured in such manner as the ,director shall determine7 in guaranteeing such securities and obligations involve such transactions4 7#b7 ,multiple types of transactions ,the ,director shall require that in complying with paragraph 7#a71 each enterprise undertake multiple types of the various transactions and structures described in subsection 7b74 7b7 ,types of transactions ,the risk-sharing transactions referred to in subsection 7a7 may include transactions involving increased mortgage insurance requirements1 credit-linked notes and securities1 senior and subordinated security structures1 and such other structures and transactions as the ,director considers appropriate to increase private market assumption of credit risk4 4 #ajg4 ,limitation of enterprise mortgage purchases to qualified mortgages 7a7 ,fannie ,mae ,section #cjb7;b7 of the ,federal ,national ,mortgage ,association ,charter ,act 7#ab ,u4,s4,c4 #agag7;b77 is amended by adding at the end the following new paragraph3 7#g7 ,effective for mortgages with application dates on or after ,january #aj1 #bjad1 the corporation may only purchase1 make commitments to purchase1 service1 sell1 lend on the security of1 or otherwise deal in a mortgage that is a qualified mortgage 7as such term is defined in section #abi;,c7b7 of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afci;c7b72 as added by section #adab of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#abd ,stat4 #bade771 in accordance with the regulations issued by the ,bureau of ,consumer ,financial ,protection to carry out such section4 4 7b7 ,freddie ,mac ,section #cje7;a7 of the ,federal ,home ,loan ,mortgage ,corporation ,act 7#ab ,u4,s4,c4 #aded7;a77 is amended by adding at the end the following new paragraph3 7#f7 ,effective for mortgages with application dates on or after ,january #aj1 #bjad1 the ,corporation may only purchase1 make commitments to purchase1 service1 sell1 lend on the security of1 or otherwise deal in a mortgage that is a qualified mortgage 7as such term is defined in section #abi;,c7b7 of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afci;c7b72 as added by section #adab of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#abd ,stat4 #bade771 in accordance with the regulations issued by the ,bureau of ,consumer ,financial ,protection to carry out such section4 4 #ajh4 ,prohibition relating to use of power of eminent domain 7a7 ,fannie ,mae ,subsection 7b7 of section #cjb of the ,federal ,national ,mortgage ,association ,charter ,act 7#ab ,u4,s4,c4 #agag7;b77 is amended by adding at the end the following new paragraph3 7#g7 7,a7 ,notwithstanding any other provision of law1 the corporation may not purchase or guarantee any mortgage that is secured by a structure or dwelling unit that is located within a county that contains any structure or dwelling unit that secures or secured a residential mortgage loan which mortgage loan was obtained by the ,state during the preceding #abj months by exercise of the power of eminent domain4 7,b7 ,for purposes of this paragraph1 the following definitions shall apply3 7i7 ,the term residential mortgage loan means a mortgage loan that is evidenced by a promissory note and secured by a mortgage1 deed of trust1 or other security instrument on a residential structure or a dwelling unit in a residential structure4 ,such term includes a first mortgage loan or any subordinate mortgage loan4 7ii7 ,the term ,state includes the ,district of ,columbia1 the ,commonwealth of ,puerto ,rico1 and any territory or possession of the ,united ,states1 and includes any agency or political subdivision of a ,state4 4 7b7 ,freddie ,mac ,subsection 7a7 of section #cje of the ,federal ,home ,loan ,mortgage ,corporation ,act 7#ab ,u4,s4,c4 #aded7;a77 is amended by adding at the end the following new paragraph3 7#f7 7,a7 ,notwithstanding any other provision of law1 the ,corporation may not purchase or guarantee any mortgage that is secured by a structure or dwelling unit that is located within a county that contains any structure or dwelling unit that secures or secured a residential mortgage loan which mortgage loan was obtained by the ,state during the preceding #abj months by exercise of the power of eminent domain4 7,b7 ,for purposes of this paragraph1 the following definitions shall apply3 7i7 ,the term residential mortgage loan means a mortgage loan that is evidenced by a promissory note and secured by a mortgage1 deed of trust1 or other security instrument on a residential structure or a dwelling unit in a residential structure4 ,such term includes a first mortgage or any subordinate mortgage4 7ii7 ,the term ,state includes the ,district of ,columbia1 the ,commonwealth of ,puerto ,rico1 and any territory or possession of the ,united ,states1 and includes any agency or political subdivision of a ,state4 4 #aji4 ,receiver's discretionary authority to create receivership entity ,section #acfg of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #dfag7 is amended by striking subsection 7i7 and inserting the following3 7i7 ,receivership ,entity 7#a7 ,authority2 ,organization ,the ,agency1 as receiver appointed pursuant to subsection 7a71 may establish a receivership entity in such form or structure as the ,agency deems appropriate to meet the purposes of receivership and this section4 7#b7 ,powers ,upon creation of such receivership entity1 the ,agency may transfer to it any assets or liabilities of the regulated entity in default as the ,agency1 in its discretion1 determines to be appropriate1 and may authorize the receivership entity to perform any temporary function that the ,agency1 in its discretion1 prescribes in accordance with this section4 ,the transfer of any assets or liabilities of a regulated entity for which the ,agency has been appointed receiver shall be effective without any further approval under ,federal or ,state law1 assignment1 or consent with respect thereto4 ,such authority is in addition to any other power the ,agency may have as receiver or may confer on the receivership entity4 7#c7 ,exemption from ,taxation ,notwithstanding any other provision of ,federal or ,state law1 any receivership entity established by the ,agency pursuant to this section1 its franchise1 property and income1 shall be exempt from all taxation now or hereafter imposed by the ,united ,states1 by any territory1 dependency1 or possession thereof1 or by any ,state1 county1 municipality1 or local taxing authority4 7#d7 ,regulations ,the ,agency may promulgate such regulations as the ,agency determines to be necessary or appropriate to implement this subsection4 7#e7 ,no ,federal ,status ,a receivership entity established pursuant to this section shall not be an agency1 establishment1 or instrumentality of the ,united ,states4 4 #aaj4 ,authority of receiver to repeal enterprise charter ,section #acfg of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #dfag7 is amended by striking subsection 7k7 and inserting the following new subsection3 7k7 ,repeal of enterprise charters 7#a7 ,fannie ,mae ,effective five years after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 the charter of the ,federal ,national ,mortgage ,association is repealed and the ,federal ,national ,mortgage ,association shall have no authority to conduct new business under such charter1 except that the provisions of such charter in effect immediately before such repeal shall continue to apply with respect to the rights and obligations of any holders of-- 7,a7 outstanding debt obligations of the ,federal ,national ,mortgage ,association1 including any-- 7i7 bonds1 debentures1 notes1 or other similar instruments2 7ii7 capital lease obligations2 or 7iii7 obligations in respect of letters of credit1 bankers' acceptances1 or other similar instruments2 or 7,b7 mortgage-backed securities guaranteed by the ,federal ,national ,mortgage ,association4 7#b7 ,freddie ,mac ,effective five years after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac1 the charter of the ,federal ,home ,loan ,mortgage ,corporation is repealed and the ,federal ,home ,loan ,mortgage ,corporation shall have no authority to conduct new business under such charter1 except that the provisions of such charter in effect immediately before such repeal shall continue to apply with respect to the rights and obligations of any holders of-- 7,a7 outstanding debt obligations of the ,federal ,home ,loan ,mortgage ,corporation1 including any-- 7i7 bonds1 debentures1 notes1 or other similar instruments2 7ii7 capital lease obligations2 or 7iii7 obligations in respect of letters of credit1 bankers' acceptances1 or other similar instruments2 or 7,b7 mortgage-backed securities guaranteed by the ,federal ,home ,loan ,mortgage ,corporation4 7#c7 ,existing guarantee obligations 7,a7 ,explicit guarantee ,the full faith and credit of the ,united ,states is pledged to the payment of all amounts which may be required to be paid under any obligation described in paragraph 7#a7 or 7#b74 7,b7 ,continued dividend payments ,notwithstanding any other provision of law1 provision #b7;a7 7relating to ,dividend ,payment ,dates and ,dividend ,periods7 and provision #b7;c7 7relating to ,dividend ,rates and ,dividend ,amount7 of the ,senior ,preferred ,stock ,purchase ,agreement1 or any provision of any certificate in connection with such ,agreement creating or designating the terms1 powers1 preferences1 privileges1 limitations1 or any other conditions of the ,variable ,liquidation ,preference ,senior ,preferred ,stock of an enterprise issued pursuant to such ,agreement-- 7i7 shall not be amended1 restated1 or otherwise changed to reduce the rate or amount of dividends in effect pursuant to such ,agreement as of the ,third ,amendment to such ,agreement dated ,august #ag1 #bjab1 except that any amendment to such ,agreement to facilitate the sale of assets of the enterprises shall be permitted2 and 7ii7 shall remain in effect until the guarantee obligations described under paragraphs 7#a77;,b7 and 7#b77;,b7 of this subsection are fully extinguished4 7,c7 ,applicability ,all guarantee fee amounts derived from the single-family mortgage guarantee business of the enterprises in existence as of five years after the date of the enactment of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac shall be deposited into the ,united ,states ,treasury1 for purposes of deficit reduction4 7,d7 ,senior ,preferred ,stock ,purchase ,agreement defined ,for purposes of this paragraph1 the term ,senior ,preferred ,stock ,purchase ,agreement means-- 7i7 the ,amended and ,restated ,senior ,preferred ,stock ,purchase ,agreement1 dated ,september #bf1 #bjjh1 as such ,agreement has been amended on ,may #f1 #bjji1 ,december #bd1 #bjji1 and ,august #ag1 #bjab1 respectively1 and as such ,agreement may be further amended and restated1 entered into between the ,department of the ,treasury and each enterprise1 as applicable2 and 7ii7 any provision of any certificate in connection with such ,agreement creating or designating the terms1 powers1 preferences1 privileges1 limitations1 or any other conditions of the ,variable ,liquidation ,preference ,senior ,preferred ,stock of an enterprise issued or sold pursuant to such ,agreement4 4 ,,ii ,,fha ,reform #bja4 ,short title ,this title may be cited as the ,,fha ,reform and ,modernization ,act of #bjac4 #bjb4 ,definitions ,for purposes of this title1 the following definitions shall apply3 7#a7 ,board ,the term ,board means the ,board of ,directors of the ,,fha established under section #bad4 7#b7 ,director ,the term ,director means the ,director of the ,federal ,housing ,finance ,agency4 7#c7 ,,fha ,the term ,,fha means the ,federal ,housing ,administration established under this title4 7#d7 ,first-time homebuyer ,the term first-time homebuyer means an individual who meets any of the following criteria3 7,a7 ,an individual1 and his or her spouse1 who has never had ownership in a principal residence4 7,b7 ,a single parent 7as such term is defined in section #ief of the ,cranston-,gonzalez ,national ,affordable ,housing ,act 7#db ,u4,s4,c4 #abgac77 who has only owned a principal residence with a former spouse while married4 7,c7 ,an individual who is a displaced homemaker 7as such term is defined in such section #ief of the ,cranston-,gonzalez ,national ,affordable ,housing ,act7 and has only owned a principal residence with a spouse4 7,d7 ,an individual who has only owned a principal residence not permanently affixed to a permanent foundation in accordance with applicable regulations4 7,e7 ,an individual who has only owned a property that was not in compliance with state1 local or model building codes and which cannot be brought into compliance for less than the cost of constructing a permanent structure4 7#e7 ,native american government ,the term ,native ,american government means the government of any ,indian or ,alaska native tribe1 band1 nation1 pueblo1 village or community that the ,secretary of the ,interior acknowledges to exist as an ,indian ,tribe1 pursuant to the ,federally ,recognized ,indian ,tribe ,list ,act of #aiid4 7#f7 ,residential health care facility ,the term residential health care facility includes a nursing home1 a facility for long-term care1 an intermediate care facility1 a board and care home1 an assisted living facility1 a public health center1 an outpatient facility1 and a rehabilitation facility4 7#g7 ,secretary ,the term ,secretary means the ,secretary of ,housing and ,urban ,development4 7#h7 ,united ,states ,the term ,united ,states includes the ,states1 the ,district of ,columbia1 the ,commonwealth of ,puerto ,rico1 the ,commonwealth of the ,northern ,mariana ,islands1 ,guam1 the ,virgin ,islands1 ,american ,samoa1 and ,native ,american governments4 ,a ,organization #baa4 ,establishment 7a7 ,in ,general ,there is hereby established the ,federal ,housing ,administration1 which shall be a body corporate without capital stock and shall have succession until dissolved by ,act of ,congress4 7b7 ,government ,corporation ,the ,,fha shall be established as a wholly owned ,government corporation subject to chapter #ia of title #ca1 ,united ,states ,code 7commonly referred to as the ,government ,corporation ,control ,act71 except as otherwise provided in this subtitle4 7c7 ,federal ,agency 7#a7 ,in general ,the ,,fha shall be an agency of the ,united ,states1 except that the ,,fha shall not be considered an agency for purposes of holding1 managing1 and disposing of assets acquired by the ,,fha under the provisions of this title or the ,national ,housing ,act4 7#b7 ,holding1 management1 and disposal authority ,for purposes of this subsection1 the term holding1 managing1 and disposing of assets includes the powers to-- 7,a7 deal with1 complete1 reconstruct1 rent1 renovate1 modernize1 insure1 make contracts for the management of1 establish suitable agencies for the management of1 or exercise discretion to sell for cash or credit or lease1 any acquired property2 7,b7 pursue collection by way of compromise or otherwise all assigned and transferred claims2 and 7,c7 at any time1 upon default1 foreclose on any property secured by any assigned or transferred mortgage4 7d7 ,self-,sufficient ,entity ,the ,,fha shall operate and conduct its business as a self-sufficient entity in accordance with section #bce7;c74 7e7 ,corporate ,offices and ,residency ,the ,,fha shall maintain its principal office in the ,district of ,columbia and shall be deemed1 for purposes of venue in civil actions1 to be a resident of the ,district of ,columbia4 ,the ,,fha may establish other offices in such other places as the ,,fha considers appropriate in the conduct of its business4 7f7 ,tax ,status ,the ,,fha1 including its franchise1 activities1 income1 and assets1 shall be exempt from all taxation now or hereafter imposed by any taxing authority in the ,united ,states1 except that any real property of the ,,fha 7other than real property that the ,,fha uses as an office7 shall be subject to taxation to the same extent according to its value as any taxing authority taxes other real property4 7g7 ,protection of ,name 7#a7 ,prohibition ,no person shall1 except the body corporate established under this section1 after the date of the enactment of this ,act1 use the words ,federal ,housing ,administration or the initials ,,fha as the name or part thereof under which such person shall do business4 7#b7 ,enforcement ,violations of paragraph 7#a7 may be enjoined by any court of general jurisdiction at the suit of the ,,fha4 ,in any such suit1 the ,,fha may recover any actual damages resulting from such violation1 and1 in addition1 shall be entitled to punitive damages 7regardless of the existence or nonexistence of actual damages7 of not more than #ajj for each day during which such violation is committed or repeated4 #bab4 ,purposes ,the ,,fha is established for the following purposes3 7#a7 ,to provide mortgage insurance and other credit enhancement and related activities1 for-- 7,a7 single family homeownership to first-time homebuyers1 low- and moderate-income homebuyers1 homebuyers in areas subject to counter-cyclical markets or ,presidentially declared disasters2 7,b7 the provision of affordable rental housing2 and 7,c7 the provision of residential health care facilities4 7#b7 ,to supplement private sector activity by serving hard-to-serve markets1 developing new mortgage products1 and filling gaps in the provision and delivery of mortgage credit4 7#c7 ,to deliver housing mortgage insurance and credit enhancement and provide other services in a non-discriminatory manner4 7#d7 ,to promote liquidity and provide stability to the single family and multifamily housing finance market1 by continuing to provide mortgage insurance and credit enhancement on a sound basis during times of regional and national economic downturn4 7#e7 ,to engage in research1 development1 and testing of new products designed to make single family and multifamily housing and residential health care facility credit available to hard-to-serve markets4 7#f7 ,to establish uniformity in operations and risk management and loss mitigation in housing mortgage insurance and rural housing loan programs4 #bac4 ,general powers ,to further the purposes of this subtitle1 in accordance with chapter #ia of title #ca of the ,united ,states ,code 7relating to government corporations71 the ,,fha-- 7#a7 may adopt1 amend1 and repeal by-laws1 and other written administrative guidance2 7#b7 may adopt1 alter1 and use a corporate seal1 which shall be judicially noted2 7#c7 may insure1 and make commitments to insure mortgages1 to the extent authorized under this title1 and enhance and make commitments to otherwise enhance credit1 and in providing such insurance may reinsure1 advance1 incur liabilities1 pool loans1 and risk share2 7#d7 may acquire1 hold1 use1 improve1 deal in1 or dispose of1 by any means1 any interests in any real property or any personal property2 7#e7 may execute contracts1 and make other agreements in its own name1 with any agency1 public or private entity1 or other person1 and carry out any lawful requirement of such contracts1 grants1 or other agreements2 7#f7 may take any actions1 including the restructuring of debt1 that the ,,fha determines are necessary to manage any portfolio 7including the portfolio of the ,,fha7 of property1 assets1 and obligations2 7#g7 may-- 7,a7 create and supply1 alone or in cooperation with public or private entities or persons1 any product or service consistent with its corporate purposes2 and 7,b7 assess fees and charges for such products1 information1 and services in amounts1 as determined by the ,,fha1 that-- 7i7 do not exceed their value in the market2 7ii7 permit the ,,fha to recover its fully allocated long-term costs2 and 7iii7 permit the ,,fha to maintain the level of capital determined by the ,,fha to be necessary and sufficient to carry out the public purposes of the ,,fha and as required under subtitle ,c2 7#h7 may create distinct insurance funds or other devices to segregate or permit limitations on liability for business activities or accounts2 7#i7 may qualify any person or entity to engage in business with the ,,fha and may enforce and impose penalties for the breach of any duties1 obligations1 and other commitments made by such persons or entities2 7#aj7 shall take actions necessary to administer its business in a nondiscriminatory manner2 7#aa7 may use the services or obtain the goods of any ,federal agency1 including the ,department of ,housing and ,urban ,development1 under working or cooperation agreements or contracts with such agencies and make or receive payment for the cost of such activities2 7#ab7 shall have the power1 in its corporate name1 to sue and be sued1 and to complain and defend1 in any court of competent jurisdiction1 ,state or ,federal1 but no attachment1 garnishment1 injunction1 or other similar process1 mesne or final1 shall be issued against the property of the ,,fha or against the ,,fha with respect to its property1 and the ,,fha shall not be liable for interest prior to judgment1 for punitive or exemplary damages1 for penalties1 or for claims based upon unjust enrichment1 quasi-contract1 or contracts implied-in-law1 nor shall the ,,fha be subject to trial by jury2 7#ac7 notwithstanding any other provision of law-- 7,a7 shall be an agency of the ,united ,states ,government and the officers and employees of the ,,fha shall be officers and employees of the ,united ,states ,government for purposes of part ,,iv of title #bh1 ,united ,states ,code2 7,b7 shall have all civil actions to which the ,,fha is a party deemed to arise under the laws of the ,united ,states2 and 7,c7 may1 at any time before trial and without bond or security1 remove any civil or criminal action or proceeding in a ,state court to which the ,,fha is a party to the ,united ,states district court for the ,district of ,columbia or to the ,united ,states district court with jurisdiction over the place where the civil action or proceeding is pending1 by following any procedure for removal of actions in effect at the time of such removal2 7#ad7 may-- 7,a7 accept and use voluntary and uncompensated services and accept1 hold1 administer1 and use gifts and bequests of property1 both real and personal1 for the purpose of aiding or facilitating the work of the ,,fha1 and 7,b7 hold gifts and bequests of money and the proceeds from sales of other property received as gifts or bequests in a separate account1 and such amounts shall be disbursed as provided by the ,,fha2 except that property accepted pursuant to this paragraph1 and the proceeds thereof1 shall be used as nearly as possible in accordance with the terms of the gift or bequest and1 for the purpose of ,federal income1 estate1 and gift taxes1 property accepted under this paragraph shall be considered as a gift or bequest to or for the use of the ,united ,states2 7#ae7 shall have any transaction in which it participates be exempt from the terms of any ,state or other law or prohibition against payment of usurious interest2 7#af7 may act as a fiduciary in connection with any of its undertakings2 7#ag7 may foreclose any single family mortgages held by the ,,fha pursuant to the same procedures and authority applicable to the ,secretary under the ,single ,family ,mortgage ,foreclosure ,act of #aiid2 7#ah7 may foreclose any multifamily housing mortgages held by the ,,fha pursuant to the same procedures and authority applicable to the ,secretary under the ,multifamily ,mortgage ,foreclosure ,act of #aiha2 7#ai7 shall have the priority of the ,united ,states with respect to the payment of debts out of bankrupt1 insolvent1 and decedents' estates2 7#bj7 may invest in systems1 technology1 or other capital resources1 to enhance its ability to carry out the purposes of this title2 and 7#ba7 shall have and exercise all powers necessary or appropriate to effect any of the purposes of this title1 including the power to carry out any authority delegated to the ,,fha by the ,secretary4 #bad4 ,board of ,directors 7a7 ,in ,general ,the powers of the ,,fha shall be vested in the ,board of ,directors of the ,,fha4 7b7 ,members and ,appointment ,the ,board of ,directors shall consist of #i individuals appointed by the ,president1 who shall include the following individuals3 7#a7 ,the ,secretary of ,housing and ,urban ,development4 7#b7 ,the ,secretary of ,agriculture4 7#c7 ,not less than #e individuals who have expertise in mortgage finance4 7#d7 ,not less than #b individuals who have expertise in affordable housing serving low- and moderate-income populations4 7c7 ,chairperson ,the ,secretary of ,housing and ,urban ,development shall serve as the chairperson of the ,board4 7d7 ,terms 7#a7 ,in general ,each member of the ,board appointed under paragraph 7#c7 or 7#d7 of subsection 7b7 shall be appointed for a term of #c years1 except as provided in paragraphs 7#b7 and 7#c74 7#b7 ,terms of initial appointees ,as designated by the ,president at the time of appointment1 of the members first appointed to the ,board pursuant to paragraphs 7#c7 and 7#d7 of subsection 7b7-- 7,a7 #c shall be appointed for terms of #a year2 and 7,b7 #d shall be appointed for terms of #b years4 7#c7 ,vacancies ,any member appointed to fill a vacancy on the ,board occurring before the expiration of the term for which the member's predecessor was appointed shall be appointed only for the remainder of that term4 ,a member may serve after the expiration of that member's term until a successor has taken office4 ,a vacancy on the ,board shall be filled in the manner in which the original appointment was made4 7e7 ,meetings and ,quorum ,the ,board shall meet at any time pursuant to the call of the ,chairperson or a majority of its members and as provided by the bylaws of the ,,fha1 but not less than quarterly4 ,a majority of the members of the ,board shall constitute a quorum4 7f7 ,powers ,the ,board shall be responsible for the general management of the ,,fha and shall have the same authority1 privileges1 and responsibilities as the board of directors of a private corporation incorporated under the ,district of ,columbia ,business ,corporation ,act4 7g7 ,duties ,in performing its duties1 the ,board shall-- 7#a7 obtain guidance from participants in the mortgage markets served by the ,,fha2 7#b7 assess the housing and mortgage insurance needs of consumers and providers of single family and multifamily housing and communities1 and the mortgage insurance needs of providers of residential health care facilities2 7#c7 obtain information concerning housing finance markets in order to better assess how the ,,fha can complement the roles of public and private participants in such markets2 and 7#d7 assist the ,secretary of ,housing and ,urban ,development and the ,secretary of ,agriculture in coordinating the roles of ,federal housing1 banking1 and credit agencies generally1 and particularly in the delivery of housing credit enhancement to families1 communities1 and hard-to-serve markets4 7h7 ,compensation ,members of the ,board shall serve on a part-time basis and shall serve without pay4 7i7 ,travel ,expenses ,each member shall receive travel expenses1 including per diem in lieu of subsistence1 in accordance with sections #egjb and #egjc of title #e1 ,united ,states ,code4 #bae4 ,officers and personnel 7a7 ,appointment of ,officers ,the ,board shall appoint a president and vice president of the ,,fha1 and1 except as provided in subsections 7b7 and 7c71 such other officers as are provided for in the bylaws of the ,,fha4 7b7 ,chief ,risk ,officer ,there shall be in the ,,fha a ,chief ,risk ,officer1 who-- 7#a7 shall be appointed by the ,board of ,directors of the ,,fha2 7#b7 shall be selected from among individuals who possess demonstrated ability in the general management of1 and knowledge of and extensive practical experience in1 risk evaluation practices in large governmental or business entities2 7#c7 shall be-- 7,a7 responsible for all matters relating to managing and mitigating risk to the mortgage insurance programs of the ,,fha and ensuring the performance of mortgages insured by the ,,fha2 and 7,b7 responsible for all matters relating to managing and mitigating risk to the housing loans made1 insured1 or guaranteed under title ,v of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adga et seq47 and ensuring the performance of such housing loans2 7#d7 shall not be subject to the review or approval of the ,board of ,directors of the ,,fha or the ,secretary of ,agriculture with respect to the exercise of the responsibilities under subparagraph 7,a7 or 7,b71 respectively1 of paragraph 7#c72 and 7#e7 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 submissions include a statement indicating that the views expressed therein are those of the ,chief ,risk ,officer of the ,,fha and do not necessarily represent the views of the ,board of ,directors of the ,,fha or the ,secretary of ,agriculture4 7c7 ,chief ,technology ,officer ,there shall be in the ,,fha a ,chief ,technology ,officer1 who-- 7#a7 shall be appointed by the ,board of ,directors of the ,,fha2 7#b7 shall be selected from among individuals who possess demonstrated ability in the general management of1 and knowledge of and extensive practical experience in1 information technology management practices in1 large governmental or business entities2 7#c7 shall be-- 7,a7 responsible for all matters relating to information technology management relating to the mortgage insurance programs of the ,,fha2 and 7,b7 responsible for all matters relating to information technology management relating to the programs for making1 insuring1 and guaranteeing housing loans under title ,v of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adga et seq472 including analysis and assessment of the information technology infrastructures1 information technology strategy1 and use of information technology1 ensuring the security and privacy of information technology infrastructure and networks1 and promoting technological innovation2 7#d7 shall not be subject to the review or approval of the ,board of ,directors of the ,,fha or the ,secretary of ,agriculture with respect to the exercise of the responsibilities under subparagraph 7,a7 or 7,b71 respectively of paragraph 7#c72 and 7#e7 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 submissions include a statement indicating that the views expressed therein are those of the ,chief ,technology ,officer of the ,,fha and do not necessarily represent the views of the ,board of ,directors of the ,,fha or the ,secretary of ,agriculture4 7d7 ,appointment of ,employees ,subject to subtitle ,d1 the ,board shall appoint such other employees of the ,,fha as the ,board considers necessary for the transaction of the ,,fha's business4 7e7 ,compensation1 ,duties1 and ,removal 7#a7 ,in general ,the ,board shall fix the compensation of all officers and employees of the ,,fha and define their duties4 ,officers and employees shall be appointed1 promoted1 assigned1 and removed on the basis of qualifications1 and any such actions taken shall be consistent with the principles of fairness1 nondiscrimination1 and due process4 7#b7 ,considerations in fixing compensation ,in fixing and directing compensation for officers and employees of the ,,fha1 the ,board shall consult and maintain comparability with the compensation provided by the ,government ,national ,mortgage ,association1 the ,federal ,housing ,finance ,agency1 the ,comptroller of ,currency1 the ,board of ,governors of the ,federal ,reserve ,system1 and the ,federal ,deposit ,insurance ,corporation to officers and employees of such entities4 7f7 ,applicability of ,certain ,civil ,service ,laws ,the officers and employees of the ,,fha shall be appointed without regard to the provisions of title #e1 ,united ,states ,code1 governing appointments in the competitive service1 and may be paid without regard to the provisions of chapter #ea and subchapter ,,iii of chapter #ec of that title relating to classification and ,general ,schedule pay rates4 7g7 ,use of ,federal ,agencies ,in carrying out its purposes1 the ,,fha may use information1 services1 staff1 and facilities of any executive agency1 independent agency1 or department 7including the ,department of ,housing and ,urban ,development71 with the consent of the agency or department1 and shall reimburse the agency or department for the cost of such information1 services1 staff1 and facilities4 7h7 ,indemnification ,the ,,fha may provide for the indemnification of any officer1 employee1 contractor1 or agent of the ,,fha on such terms as the ,,fha determines proper1 except that1 to the extent that the ,,fha self-insures for any indemnification-- 7#a7 the aggregate maximum amount of indemnification outstanding at any time shall not exceed #e percent of the amount of capital required under section #bef to be maintained by the ,mutual ,mortgage ,insurance ,fund2 and 7#b7 not more than #a1jjj1jjj may be paid as an indemnity for any single event4 7i7 ,amendments to ,housing ,act of #aidi ,section #eja of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adga7 is amended by adding at the end the following new subsections3 7k7 ,authority of ,chief ,risk ,officer of ,,fha ,the ,chief ,risk ,officer of the ,,fha appointed pursuant to section #bae7;b7 of the ,,fha ,reform and ,modernization ,act of #bjac shall be solely responsible for all matters relating to evaluating1 managing1 and mitigating risk to the programs under this title for making1 insuring1 and guaranteeing housing loans and ensuring the performance of such housing loans1 and such authority shall not be subject to the review or approval of the ,secretary4 7l7 ,authority of ,chief ,technology ,officer of ,,fha ,the ,chief ,technology ,officer of the ,,fha appointed pursuant to section #bae7;c7 of the ,,fha ,reform and ,modernization ,act of #bjac shall be solely responsible for all matters relating to information technology management relating to the programs under this title for making1 insuring1 and guaranteeing housing loans1 and such authority shall not be subject to the review or approval of the ,secretary4 4 #baf4 ,financial1 underwriting1 and operations systems 7a7 ,in general ,the ,,fha shall develop and maintain such financial1 underwriting1 and operations systems as may be necessary to carry out the responsibilities of the ,,fha4 ,such systems shall be designed and developed in a manner so that such systems shall also be used for the financial1 underwriting1 and operations systems1 respectively1 of the programs under title ,v of the ,housing ,act of #aidi for making1 guaranteeing1 and insuring rural housing loan programs4 7b7 ,use by ,rural ,housing ,service programs 7#a7 ,availability ,all financial1 underwriting1 and operations systems of the ,,fha shall be available to the ,secretary of ,agriculture to the extent necessary to ensure compliance with section #eja7m7 of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adga7l774 7#b7 ,use ,section #eja of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adga71 as amended by the preceding provisions of this title1 is further amended by adding at the end the following new subsection3 7m7 ,use of ,,fha systems ,the ,secretary1 the ,chief ,risk ,officer of the ,,fha1 and the ,chief ,technology ,officer of the ,,fha shall utilize the financial1 underwriting1 and operations systems of the ,,fha in carrying out all financial1 underwriting1 and operations functions with respect to the programs under this title for making1 insuring1 or guaranteeing housing loans4 4 #bag4 ,procurement 7a7 ,in ,general ,the ,,fha shall establish an economical and results-oriented system for the procurement1 supply1 and disposition by the ,,fha of personal property and services1 which shall include performance measures and standards for determining the extent to which the ,,fha's procurement of property and services satisfies the objective for which the procurement was undertaken4 ,the system shall be consistent with the principles of impartiality and competitiveness4 7b7 ,exemption from ,federal ,property and ,administrative ,service ,act ,requirements ,section #aac7;e7 of title #dj1 ,united ,states ,code1 is amended-- 7#a7 in paragraph 7#ai71 by striking or at the end2 7#b7 in paragraph 7#bj71 by striking the period at the end and inserting 2 or 2 and 7#c7 by adding at the end the following new paragraph3 7#ba7 ,the ,federal ,housing ,administration2 and 4 7c7 ,exemption from ,procurement ,protest ,system ,subchapter ,v of chapter #ce of title #ca1 ,united ,states ,code1 relating to the procurement protest system1 shall not apply to the ,,fha4 #bah4 ,applicability of laws 7a7 ,exemption from notice and comment rulemaking ,any matter relating to credit enhancement or other business activities of the ,,fha authorized under this title shall be considered a matter relating to agency management or personnel or to public property1 loans1 grants1 benefits1 or contracts1 for purposes of section #eec7;a7 of title #e1 ,united ,states ,code4 7b7 ,subsidy layering ,for purposes of section #ajb7;d7 of the ,department of ,housing and ,urban ,development ,reform ,act of #aihi1 mortgage insurance and other credit enhancement provided under this title shall not be considered assistance within the jurisdiction of the ,department4 7c7 ,government ,corporation ,control ,act ,section #iaja7c7 of title #ca1 ,united ,states ,code1 is amended by adding at the end the following new subparagraph3 7,s7 the ,federal ,housing ,administration4 4 7d7 ,tax ,exempt ,status of ,,fha ,section #eja7l7 of the ,internal ,revenue ,code of #aihf 7#bf ,u4,s4,c4 #eja7l77 is amended by adding at the end the following new paragraph3 7#e7 ,the ,federal ,housing ,administration established under the ,,fha ,reform and ,modernization ,act of #bjac4 4 #bai4 ,evaluation 7a7 ,in ,general ,the ,director shall conduct a study and submit a report to the ,president and the ,congress on-- 7#a7 whether this title provides sufficient authority to permit the ,,fha to accomplish its public purposes efficiently and effectively1 and in a safe and sound manner2 7#b7 the impact of the limitations on business activities as to mortgage amounts and aggregate commitments1 and any other statutory limitations1 on the current and anticipated business activity of the ,,fha2 and 7#c7 whether the provisions of subtitle ,c appropriately provide that the ,,fha will be operated in a safe and sound manner and will fulfill the public purposes of its establishment4 7b7 ,timing ,the report required by this section shall be submitted on the third ,january #ast occurring after the conclusion of the transition period under section #bha4 #bbj4 ,funding 7a7 ,funding of salaries and expenses ,there is authorized to be appropriated for each fiscal year to the ,,fha1 for salaries1 expenses1 and technology for the management and operations of the ,,fha an amount not exceeding the amount of the negative subsidy credited to the negative subsidy receipt account not needed for reserves of the funds of the ,,fha pursuant to sections #bef and #bei4 7b7 ,funding of ,claims 7#a7 ,availability of funds ,amounts credited to the financing account of the ,,fha1 established pursuant to title ,v of the ,congressional ,budget ,act of #aigd1 shall be permanently and indefinitely available for payment of any claim that the ,,fha approves under a contract of insurance or other credit enhancement instrument pursuant to this title4 7#b7 ,borrowing authority 7,a7 ,in general ,to the extent that such amounts are insufficient for such purpose1 the ,,fha may borrow from the ,treasury pursuant to title ,v of the ,congressional ,budget ,act of #aigd4 7,b7 ,notice to ,congress ,upon exercising the authority referred to in subparagraph 7,a71 the ,,fha shall submit to the ,congress-- 7i7 notice of such exercise of authority and the extent of the borrowing undertaken2 7ii7 a plan for repayment to the ,treasury of the amounts borrowed1 specifying the time and amounts of such payments2 and 7iii7 if such borrowing is for the ,mutual ,mortgage ,insurance ,fund1 how the ,,fha will comply with the capital restoration plan required under section #beg7;c74 #bba4 ,effective date ,this subtitle shall take effect on the date of the enactment of this ,act4 ,b ,business authority and requirements #bca4 ,authority to carry out ,,fha and other business 7a7 ,in ,general ,after the expiration of the transition period under section #bha-- 7#a7 the ,,fha may exercise 7in addition to powers set forth in section #bhb7 any authority and undertake any responsibilities of the ,secretary of ,housing and ,urban ,development under the ,national ,housing ,act 7as amended by this title7 relating to mortgage insurance1 except as otherwise provided in this title and except that any authority that requires an appropriation may be conducted only to the extent that amounts are so appropriated2 7#b7 any amounts in the ,mutual ,mortgage ,insurance ,fund under section #bjb7;a7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjh7;a771 any amounts in the ,general ,insurance ,fund and ,special ,risk ,insurance ,fund under sections #eai and #bch7;b71 respectively1 of such ,act 7#ab ,u4,s4,c4 #agce;c1 #agaez-#c7;b771 and any amounts in the ,cooperative ,management ,housing ,insurance ,fund under section #bac7k7 of such ,act 7#ab ,u4,s4,c4 #agae;e7k771 shall be used by the ,,fha only-- 7,a7 for meeting any obligations of such ,funds entered into before such transition date2 and 7,b7 for carrying out the mortgage insurance obligations of the ,,fha pursuant to section #bhb7a7 of this title and paragraph 7#a7 of this section2 and 7#c7 the ,,fha may exercise any authority of the ,,fha under this title4 7b7 ,termination of ,secretary's ,,fha ,authority ,after the expiration of the transition period under section #bha1 the ,secretary may not exercise any authority under the ,national ,housing ,act relating to mortgage insurance4 ,this subsection may not be construed to limit or otherwise affect the ,secretary's authority under title ,i of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjb et seq474 7c7 ,continuation of ,obligations ,this section and section #bhb7a7 may not be construed to affect the validity of any right1 duty1 or obligation of the ,united ,states or other person arising under or pursuant to any commitment or agreement lawfully entered into with the ,secretary of ,housing and ,urban ,development under the ,national ,housing ,act4 #bcb4 ,eligible single-family mortgages 7a7 ,in ,general ,notwithstanding section #bjc of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agji7 or any other provision of law1 the ,,fha may insure1 and make commitments to insure1 a mortgage on a #a- to #d-;family residential property only if the mortgage complies with the following requirements3 7#a7 ,mortgage amount ,the mortgage shall involve a principal obligation 7including such initial service charges1 appraisal1 inspection1 and other fees as the ,,fha shall approve7 in an amount not to exceed the following amounts3 7,a7 ,appraised value #ajj percent of the appraised value of the property4 7,b7 ,area limitation 7i7 ,maximum limit ,the lesser of the following amounts3 7,i7 ,in the case of-- 7aa7 a #a-;family residence1 #aae percent of the median #a-;family house price in the area in which such residence is located1 as determined by the ,,fha2 and 7bb7 in the case of a #b-1 #c-1 or #d-;family residence1 the percentage of such median price that bears the same ratio to such median price as the dollar amount limitation determined under the sixth sentence of section #cje7;a77#b7 of the ,federal ,home ,loan ,mortgage ,corporation ,act 7#ab ,u4,s4,c4 #aded7;a77#b77 for a #b-1 #c-1 or #d-;family residence1 respectively1 bears to the dollar amount limitation determined under such section for a #a-;family residence2 or 7,,ii7 #aej percent of the dollar amount limitation determined under the sixth sentence of such section #cje7;a77#b7 for a residence of the applicable size4 ,for purposes of the preceding sentence1 the term area means a metropolitan statistical area as established by the ,office of ,management and ,budget2 and the median #a-;family house price for an area shall be equal to the median #a-;family house price of the county within the area that has the highest such median price4 7ii7 ,minimum limit ,notwithstanding clause 7i71 the principal obligation limitation in effect for any area under this subparagraph may not be less than the greater of-- 7,i7 #cge percent of the median income for the area1 as determined by the ,,fha2 or 7,,ii7 #bjj1jjj4 7#b7 ,downpayment ,the mortgage shall be executed by a mortgagor who shall have paid on account of the property subject to the mortgage an amount1 in cash or its equivalent1 equal to or exceeding-- 7,a7 #e percent of the cost of acquisition of the property1 as determined by the ,,fha2 or 7,b7 in the case of a mortgage under which the mortgagor is a first-time homebuyer and for which such credit enhancement as the ,,fha shall determine has been provided1 #c4e percent of the cost of acquisition of the property1 as determined by the ,,fha4 7#c7 ,public purpose requirement ,the mortgage shall meet the requirements of any one of the following subparagraphs3 7,a7 ,first-time homebuyer ,the mortgagor under the mortgage is a first-time homebuyer 7as such term is defined in section #bjb7 of the property subject to the mortgage and the property is used as the principal residence of the mortgagor4 7,b7 ,low- or moderate-income mortgagor ,the mortgagor under the mortgage is a member of a family as follows3 7i7 ,in general ,a family having an income that is less than #aae percent of the median income1 as determined by the ,,fha1 for the area in which the property subject to the mortgage is located1 except that the ,,fha may establish income ceilings higher or lower than #aae percent of the median for the area to take into consideration various sizes of families4 7ii7 ,high-cost areas ,a family that-- 7,i7 resides in any area for which the median #a-;family house price exceeds the maximum dollar amount limitation in effect for that year on the original principal obligation of a mortgage on a #a-;family residence that may be purchased by the ,federal ,home ,loan ,mortgage ,corporation1 as determined under section #cje7;a77#b7 of the ,federal ,home ,loan ,mortgage ,corporation ,act 7#ab ,u4,s4,c4 #aded7;a77#b772 and 7,,ii7 has an income that is less than #aej percent of the median income1 as determined by the ,,fha1 for the area in which the property subject to the mortgage is located1 except that the ,,fha may establish income ceilings higher or lower than #aej percent of the median for the area to take into consideration various sizes of families4 ,for purposes of this subparagraph1 the term area has the meaning given such term in the last sentence of paragraph 7#a77;,b77i74 7,c7 ,counter-cyclical market adjustment ,the property subject to the mortgage is located in a county or counties for which a determination under this subparagraph has been made1 as follows3 7i7 ,determination ,a mortgage may be insured pursuant to this subparagraph only upon a joint determination by the ,director and the ,chief ,risk ,officer that-- 7,i7 available credit for the purchase of #a- to #d-;family homes located in such county or counties has contracted significantly1 as measured by the credit availability measure of the ,office of the ,comptroller of the ,currency2 7,,ii7 housing prices in such county or counties have declined significantly1 as measured by the applicable housing price index of the ,federal ,housing ,finance ,agency2 or 7,,iii7 available credit for the purchase of housing or such other economic conditions exist sufficient to evidence a significant contraction of capital in such county or counties1 as measured by a metric identified by the ,director and the ,chief ,risk ,officer in a written notice made publicly available1 and provided to the ,congress1 in advance of such determination4 7ii7 ,conditions of termination ,upon making a determination under clause 7i71 the ,director and the ,chief ,risk ,officer shall also identify measurable criteria for determining that the conditions determined under clause 7i7 for such county or counties have ceased to exist4 7iii7 ,notice to ,congress ,upon making a determination under clause 7i71 the ,director and the ,chief ,risk ,officer shall provide written notice to the ,congress of such determination and the specific measurable criteria identified pursuant to clause 7ii74 7iv7 ,termination ,the authority to insure mortgages pursuant to this subparagraph on properties located in a county or counties shall terminate upon the earlier of-- 7,i7 the expiration of the #ah-month period beginning upon the date that notification under clause 7iii7 is provided to the ,congress of the determination under clause 7i7 with respect to such county or counties2 or 7,,ii7 the occurrence of the conditions identified pursuant to clause 7ii7 with respect to such county or counties4 7v7 ,multiple determinations ,nothing in this subparagraph may be construed to prevent multiple or consecutive periods for a county or counties during which mortgages on properties located in such county or counties may be insured pursuant to this subparagraph4 7,d7 ,disaster area ,the ,board of ,directors exercises the authority to insure mortgages under this subparagraph1 subject to the following requirements3 7i7 ,implementation ,the ,board of ,directors may implement authority to insure mortgages under this subparagraph only if the ,board-- 7,i7 by a vote of the majority of its members1 approves such implementation for a specific disaster area under clause 7iii7 and a specific disaster period under clause 7iv72 and 7,,ii7 notifies the ,congress and the ,president in writing of such approval1 such disaster period1 and such disaster area not less than #cj days before the commencement of the disaster period4 7ii7 ,eligible mortgages ,the ,,fha may insure1 or make a commitment to insure1 a mortgage under authority under this subparagraph only if-- 7,i7 the mortgage is made for the purchase of a principal residence by a mortgagor whose home 7that the mortgagor occupied as an owner or tenant7 was located in a disaster area described under clause 7iii7 and was destroyed or damaged to such an extent that reconstruction is required1 as a result of a major disaster declared by the ,president under the ,robert ,t4 ,stafford ,disaster ,relief and ,emergency ,assistance ,act2 and 7,,ii7 the commitment for mortgage insurance is made during the disaster period established under clause 7iv7 for such disaster area4 7iii7 ,disaster area ,a disaster area may be established for purposes of this subparagraph only for the area affected by a major disaster1 as declared by the ,president under the ,robert ,t4 ,stafford ,disaster ,relief and ,emergency ,assistance ,act1 or a portion of such area1 as determined by the ,,fha4 7iv7 ,disaster period ,a disaster period established for purposes of this subparagraph shall-- 7,i7 commence upon or after the declaration of the major disaster referred to in clause 7iii72 and 7,,ii7 terminate on the date certain approved by the ,board of ,directors under clause 7i77,i7 and contained in the notice under clause 7i77,,ii71 which shall not be later than #ah months after the commencement of the period4 7b7 ,conforming amendments ,section #bjc7;b7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agji7;b77 is amended-- 7#a7 by striking paragraph 7#b72 and 7#b7 in paragraph 7#i7-- 7,a7 by striking subparagraph 7,a72 and 7,b7 in subparagraph 7,b71 by striking this paragraph and inserting section #bjb7;a77#b7 of the ,,fha ,reform and ,modernization ,act of #bjac4 #bcc4 ,risk-sharing 7a7 ,development of demonstration model ,not later than the expiration of the #b-year period beginning on the date of the enactment of this ,act1 the ,,fha shall develop and implement a model and standards for entering into risk-sharing agreements with respect to mortgages insured by the ,,fha1 under which the ,,fha shall insure a portion of the amount of the mortgage and persons or entities determined under the guidelines established pursuant to subsection 7b7 to be qualified to participate in such an agreement shall insure the remainder 7or another7 portion of the amount of the eligible mortgage4 7b7 ,qualifications of ,risk-,sharing ,partners 7#a7 ,establishment ,the model and standards established under this section shall include guidelines for the qualification of persons or entities to participate in risk-sharing and other credit enhancement activities with the ,,fha4 7#b7 ,procedures ,in establishing such guidelines1 the ,,fha shall review the guidelines established by the ,director for qualification of persons or entities to participate in risk-sharing and other credit enhancement activities with the ,federal ,national ,mortgage ,association or the ,federal ,home ,loan ,mortgage ,corporation4 ,the ,,fha shall determine whether such guidelines for such enterprises are sufficient for purposes of the ,,fha1 including whether such guidelines meet the requirements under paragraph 7#c71 and-- 7,a7 if the ,,fha determines that such guidelines are so sufficient1 the ,,fha shall adopt such guidelines for purposes of this section1 to the extent appropriate1 with any changes necessary to account for differences between the mortgages insured under this title and the ,national ,housing ,act and the business under such provisions and the business of such enterprises2 or 7,b7 if the ,,fha determines that such guidelines are not so sufficient1 the ,,fha shall adopt such guidelines for purposes of this section1 to the extent appropriate and with changes referred to in subparagraph 7,a71 together with additional criteria sufficient to address any such insufficiency4 7#c7 ,content ,such guidelines shall ensure that-- 7,a7 persons or entities participating in risk-sharing and other credit enhancement activities pursuant to this section have sufficient capital1 credit worthiness1 and liquidity1 and are otherwise capable of fulfilling their obligations to the ,,fha2 7,b7 such persons or entities and their principals or officers are not engaged in a business the goals of which would conflict with the purposes of the ,,fha or the ,national ,housing ,act2 and 7,c7 product or service delivery will be conducted in a manner that is efficient and effective1 and that will comply with the requirement under section #baa7;d74 7c7 ,risk-,sharing requirement 7#a7 ,requirement ,after the expiration of the #b-year period referred to in subsection 7a71 the ,,fha shall ensure that1 in each fiscal year1 not less than #aj percent of any new business in mortgages on #a- to #d-;family residential property is insured pursuant to a risk-sharing agreement with respect to such mortgage that complies with the standards established pursuant to subsection 7a74 7#b7 ,limitation ,in any fiscal year1 the ,,fha may not comply with paragraph 7#a7 by entering into risk-sharing agreements with respect only to one or a limited number of types or categories of mortgages1 or mortgages having only particular1 or a particular range of1 original principal obligation amounts1 but shall enter into risk-sharing agreements for all types and amounts of mortgages insured by the ,,fha1 to the extent required under paragraph 7#a74 7#c7 ,new business ,for purposes of this subsection1 with respect to a fiscal year1 the term new business means the aggregate dollar amount of the principal obligations of mortgages for which a commitment to insure is made pursuant to the ,national ,housing ,act or this title1 as applicable1 during such fiscal year4 7d7 ,reports to ,congress ,upon the expiration of each of the #c- and #e-year periods beginning on the date of the enactment of this ,act1 the ,,fha shall submit a report to the ,congress on the findings and results of risk-sharing activities under this section4 ,such reports shall describe the model and standards for entering into risk-sharing agreements1 analyze appropriate dollar amount limits for the original principal obligations of mortgages that should be subject to a risk-sharing requirement1 identify the effects of such risk-sharing activities on the ,mutual ,mortgage ,insurance ,fund1 and make recommendations regarding expanding the risk-sharing requirement under subsection 7c74 7e7 ,effective date ,this section shall take effect on the date of the enactment of this ,act4 ,during the transition period under section #bha1 any reference in this section to the ,,fha shall be construed to refer to the ,secretary to the extent the ,secretary has not delegated authority under this section to the ,,fha pursuant to section #bhb7a74 #bcd4 ,limitation on mortgage insurance coverage 7a7 ,limitation ,notwithstanding any other provision of this title or the ,national ,housing ,act1 the ,,fha may not insure1 or make any commitment to insure1 any portion of any mortgage on a #a- to #d-;family residential property in excess of the amount equal to the following percentage of the original principal obligation of the mortgage3 7#a7 ,in the case of any such mortgage insured after the expiration of the #a-year period beginning on the date of the enactment of this ,act1 #ij percent of such original principal obligation1 subject to paragraphs 7#b7 through 7#e74 7#b7 ,in the case of any such mortgage insured after the expiration of the #b-year period beginning on the date of the enactment of this ,act1 #hj percent of such original principal obligation1 subject to paragraphs 7#c7 through 7#e74 7#c7 ,in the case of any such mortgage insured after the expiration of the #c-year period beginning on the date of the enactment of this ,act1 #gj percent of such original principal obligation1 subject to paragraphs 7#d7 and 7#e74 7#d7 ,in the case of any such mortgage insured after the expiration of the #d-year period beginning on the date of the enactment of this ,act1 #fj percent of such original principal obligation1 subject to paragraph 7#e74 7#e7 ,in the case of any such mortgage insured after the expiration of the #e-year period beginning on the date of the enactment of this ,act1 #ej percent of such original principal obligation4 7b7 ,effective date ,this section shall take effect on the date of the enactment of this ,act4 ,during the transition period under section #bha1 any reference in this section to the ,,fha shall be construed to refer to the ,secretary to the extent the ,secretary has not delegated authority under this section to the ,,fha pursuant to section #bhb7a74 #bce4 ,premiums 7a7 ,establishment ,the ,,fha shall establish and collect premium payments for mortgage insurance provided pursuant to this title and the amendments made by this title1 and shall provide for sharing of premiums with entities entering into risk-sharing agreements with the ,,fha pursuant to section #bcc based on the relative portion of the mortgage insured and the risk of loss borne4 7b7 ,minimum premiums ,in the case of mortgages on #a- to #d-;family residential properties insured by the ,,fha1 the premiums established and collected by the ,,fha shall include an annual premium payment in an amount not less than #j4ee percent of the remaining insured principal balance 7excluding the portion of the remaining balance attributable to any premium collected at the time of insurance and without taking into account delinquent payments or prepayments7 for the entire term of the mortgage4 7c7 ,self-,sufficient operations ,notwithstanding section #bjc7;c7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agji7;c77 or any other provision of law1 premium rates established under this section shall be established in amounts sufficient to cover-- 7#a7 costs of providing mortgage insurance coverage under this title2 7#b7 costs for administration1 operations1 management1 and technology systems for the ,,fha for carrying out this title2 7#c7 the capital ratio required for the ,mutual ,mortgage ,insurance ,fund under section #bef7;b7 and under section #bei with respect to mortgage insurance for mortgages on multifamily properties2 and 7#d7 salaries and expenses for officers and personnel of the ,,fha4 7d7 ,risk-,based premiums ,the ,,fha may1 with respect to mortgages on #a- to #d-;family residential properties insured by the ,,fha1 establish a mortgage insurance premium structure involving a single premium payment collected prior to the insurance of the mortgage or annual payments 7which may be collected on a periodic basis71 or both4 ,under such structure1 the rate of premiums for such a mortgage may vary according to the credit risk associated with the mortgage and the rate of any annual premium for such a mortgage may vary during the mortgage term1 except that the basis for determining the variable rate shall be established before the execution of the mortgage4 ,the ,,fha may change a premium structure established under this subsection1 but only to the extent that such change is not applied to any mortgage already executed4 7e7 ,savings provision ,nothing in this section may be construed to affect premiums charged for mortgage insurance provided for mortgages insured before the date of the enactment of this ,act4 #bcf4 ,default and foreclosure statement 7a7 ,written statement ,the ,,fha shall ensure that each mortgagor under a mortgage on a #a- to #d-;family residential property insured by the ,,fha is provided1 by the mortgagee at the time that such mortgage is originated1 with a written statement containing the information required under subsection 7b74 7b7 ,default and foreclosure information ,the information required under this subsection with respect to a mortgage is information identifying the percentage 7as determined according to historical rates of default and foreclosure7 of mortgages on #a- to #d-;family residential properties that were insured pursuant to this title and the ,national ,housing ,act and that had mortgagors who have the same risk profile and mortgage product as the mortgagor receiving the written statement pursuant to this section 7as determined in accordance with guidelines established by the ,,fha7 that-- 7#a7 during the terms of such mortgages1 experienced a default on payments due under such mortgages2 and 7#b7 were foreclosed upon during the terms of such mortgages4 #bcg4 ,occupancy and rent limitations for multifamily mortgage insurance 7a7 ,in general ,notwithstanding any provision of the ,national ,housing ,act or any other provision of law1 the ,,fha may not insure any mortgage on a residential property having #e or more dwelling units unless the property is subject to such binding terms and conditions1 including such occupancy and rent restrictions1 as are satisfactory to the ,,fha to ensure that the property includes dwelling units1 to the extent determined by the ,,fha to be appropriate1 for which occupancy is restricted during the entire term of the mortgage to only the following families3 7#a7 ,in general ,a family having an income that is less than #aae percent of the median income1 as determined by the ,,fha1 for the area in which the property subject to the mortgage is located1 except that the ,,fha may establish income ceilings higher or lower than #aae percent of the median for the area to take into consideration various sizes of families4 7#b7 ,high-cost areas ,a family that-- 7,a7 resides in any area in which the median #a-;family house price exceeds the maximum dollar amount limitation in effect for that year on the original principal obligation of a mortgage on a #a-;family residence that may be purchased by the ,federal ,home ,loan ,mortgage ,corporation1 as determined under section #cje7;a77#b7 of the ,federal ,home ,loan ,mortgage ,corporation ,act 7#ab ,u4,s4,c4 #aded7;a77#b772 and 7,b7 has an income that is less than #aej percent of the median income1 as determined by the ,,fha1 for the area in which the property subject to the mortgage is located1 except that the ,,fha may establish income ceilings higher or lower than #aej percent of the median for the area to take into consideration various sizes of families4 7b7 ,lower incomes ,subsection 7a7 may not be construed to prevent the ,,fha from establishing occupancy1 income1 and rent restrictions that establish limits on incomes for families occupying income-restricted units in a property that are lower than the incomes specified in subsection 7a74 7c7 ,area ,for purposes of this section1 the term area has the meaning given such term in the last sentence of section #bcb7;a77#a77;b77i74 #bch4 ,effective date ,this subtitle and the amendments made by this subtitle1 except for sections #bcc and #bcd1 shall take effect upon the expiration of the transition period under section #bha4 ,c ,financial safety and soundness #bea4 ,authority of ,director 7a7 ,duty ,the ,director of the ,federal ,housing ,finance ,agency shall supervise and regulate the safety and soundness of the ,,fha and the programs of the ,rural ,housing ,service of the ,department of ,agriculture for housing loans made1 insured1 or guaranteed under title ,v of the ,housing ,act of #aidi1 and it shall be the duty of the ,director to ensure that the ,,fha and such ,rural ,housing ,service programs are adequately capitalized and operating safely4 7b7 ,authority ,the ,director may make such determinations1 take such actions1 and perform such functions as the ,director determines necessary to meet the responsibilities of the ,director under this subtitle4 #beb4 ,budgets and business plans 7a7 ,submission of business-,type budget ,in each year1 the ,,fha shall prepare and submit an annual budget as required under section #iajc of title #ca1 ,united ,states ,code1 and shall submit such budget to the ,director by a date sufficient to enable the ,director to produce1 pursuant to section #bee7;c7 of this title1 the credit subsidy cost estimates that are required for the budget of the ,united ,states ,government under section #aaje7;a7 of title #ca1 ,united ,states ,code4 7b7 ,submission of ,budget and ,credit ,cost ,estimates to ,,omb ,for purposes of inclusion in the budget of the ,united ,states ,government1 the ,,fha shall submit the annual budget of the ,,fha and the annual credit subsidy cost estimates produced pursuant to section #bee7;c7 of this title to the ,director of the ,office of ,management and ,budget4 7c7 ,reserves 7#a7 ,establishment ,subject to sections #bef and #bei1 the ,,fha may establish any reserve that the ,,fha determines is necessary for the business operations of the ,,fha4 7#b7 ,amounts ,the ,,fha may hold as a reserve in any financing account1 as defined in section #ejb of the ,congressional ,budget ,act of #aigd 7#b ,u4,s4,c4 #ffa;a71 such amounts as the ,,fha considers necessary to comply with the capital requirements established for the ,,fha under sections #bef and #bei of this title and to fulfill the purposes of this title4 #bec4 ,annual business plan2 use of ,,gaap 7a7 ,annual business plan ,the ,,fha shall establish a business plan on an annual basis and shall make such plan available for review by the ,director4 ,such plan shall specify the products and operational strategy of the ,,fha1 including plans to address compliance with the safety and soundness requirements applicable to the ,,fha4 7b7 ,use of ,,gaap ,any financial reporting of the ,,fha1 including the preparation of the annual business plan required by subsection 7a71 the annual budget required in accordance with section #beb7;a71 and any financial statements of the ,,fha1 shall be conducted in accordance with generally accepted accounting principles applicable to the private sector4 #bed4 ,examinations1 reports1 and cost estimates 7a7 ,examinations ,the ,director shall conduct such examinations of the ,,fha and the ,rural ,housing ,service programs referred to in section #bea7;a7 as the ,director determines necessary to evaluate the safety and soundness of the ,,fha and such programs4 ,such examinations shall be subject to and governed by subsections 7c7 through 7h7 of section #acag of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #deag71 except that the last sentence of subsection 7c7 shall not apply and any reimbursements referred to in such sentence shall be made from amounts collected under section #bee of this title4 7b7 ,reports ,the ,director may require the ,,fha and the ,rural ,housing ,service to submit1 within a reasonable period of time1 any regular or special report1 data1 or other information whenever1 in the judgment of the ,director1 such report1 data1 or information is necessary to carry out the ,director's responsibilities under this title4 7c7 ,credit ,subsidy ,cost ,estimates 7#a7 ,in general ,the ,director shall produce and submit to the ,director of the ,office of ,management and ,budget the annual credit subsidy cost estimates for the ,,fha and the ,rural ,housing ,service programs referred to in section #bea7;a7 required for the ,president's budget4 ,such estimates shall be consistent with the estimates of performance generated by the risk-based capital model developed in accordance with section #beg7;b71 and with the ,president's economic forecast4 7#b7 ,unified estimates ,the annual credit subsidy cost estimates produced under this subsection by the ,director shall be reported on a unified basis1 which shall be based upon the business of the ,,fha1 and the ,rural ,housing ,service programs referred to in section #bea7;a71 as a whole4 7d7 ,annual ,report on ,safety and ,soundness ,the ,director shall submit an annual report to ,congress and the ,director of the ,office of ,management and ,budget on the financial safety and soundness of the ,,fha and the ,rural ,housing ,service programs referred to in section #bea7;a71 as measured pursuant to this subtitle4 #bee4 ,reimbursement of costs 7a7 ,assessment and ,collection ,the ,director shall assess and collect from the ,,fha and the ,secretary of ,agriculture annual assessments in such amounts determined by the ,director as necessary to reimburse the ,federal ,housing ,finance ,agency for the reasonable costs and expenses of the activities undertaken by such ,agency to carry out the duties of the ,director under this subtitle1 including the costs of examination1 enforcement1 and oversight expenses4 7b7 ,requirements ,annual assessments imposed by the ,director shall be-- 7#a7 imposed prior to ,october #a of each year2 7#b7 allocated among the ,,fha and the ,secretary of ,agriculture proportionally based on the costs and expenses of the ,agency of carrying out the duties under this subtitle with respect to ,,fha and the ,rural ,housing ,service program referred to in section #bea7;a71 respectively2 7#c7 collected at such time or times during each assessment year as determined necessary or appropriate by the ,director2 and 7#d7 treated in the same manner as provided under section #acaf7;f7 of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #deaf7;f77 with respect to amounts received by the ,director from assessments under section #acaf of such ,act1 except that amounts from assessments under this section may be used only for expenses of the ,director and the ,agency relating to the functions and responsibilities under this subtitle4 #bef4 ,mutual ,mortgage ,insurance ,fund capital reserve 7a7 ,segregation of books ,to ensure accurate determinations of the capital ratio under subsection 7b7 of this section and such ratio under section #bje7;f7 of the ,national ,housing ,act1 as amended by subsection 7d7 of this section1 the ,,fha shall establish separate accounts in the ,mutual ,mortgage ,insurance ,fund and take such other actions as may be necessary to segregate the following amounts3 7#a7 ,capital attributable to new business4 7#b7 ,capital attributable to mortgages that become insured before the expiration of the transition period under section #bha4 7b7 ,capital ratio for new business ,the ,,fha shall ensure that the account for the ,mutual ,mortgage ,insurance ,fund that is established pursuant to subsection 7a77#a7 of this section at all times maintains a capital ratio of not less than #d4j percent4 7c7 ,definitions ,for purposes of this section1 the following definitions shall apply3 7#a7 ,capital ,the term capital means the economic net worth of the account of the ,fund that is established pursuant to subsection 7a77#a7 of this section1 as determined by the ,,fha under the annual audit required under section #ech of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agce;f-#af74 7#b7 ,capital ratio ,the term capital ratio means the ratio of capital to unamortized insurance-in-force4 7#c7 ,economic net worth ,the term economic net worth means the current cash available to the account of the ,fund that is established pursuant to subsection 7a77#a7 of this section1 plus the net present value of all future cash inflows and outflows expected to result from outstanding new business4 7#d7 ,fund ,the term ,fund means the ,mutual ,mortgage ,insurance ,fund established under section #bje of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agaa74 7#e7 ,new business ,the term new business means mortgages that are obligations of the ,mutual ,mortgage ,insurance ,fund that become insured by the ,,fha after the expiration of the transition period under section #bha4 7#f7 ,unamortized insurance in force ,the term unamortized insurance-in-force means the remaining obligation on outstanding new business1 as estimated by the ,,fha4 7d7 ,treatment of existing capital ratio ,paragraph 7#d7 of section #bje7;f7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agaa7;f77#d77 is amended-- 7#a7 in subparagraph 7,a71 by striking ,mutual ,mortgage ,insurance ,fund and inserting account of the ,mutual ,mortgage ,insurance ,fund that is established pursuant to subsection 7a77#b7 of the ,,fha ,reform and ,modernization ,act of #bjac2 7#b7 in subparagraph 7,c7-- 7,a7 by striking ,fund the first place such term appears and inserting account of the ,mutual ,mortgage ,insurance ,fund that is established pursuant to subsection 7a77#b7 of the ,,fha ,reform and ,modernization ,act of #bjac2 and 7,b7 by striking the ,fund4 and inserting the following3 such account that become insured by the ,secretary of ,housing and ,urban ,development 7or the ,,fha1 pursuant to subtitle ,d of the ,,fha ,reform and ,modernization ,act of #bjac7 before the expiration of the transition period under section #bha of such ,act42 and 7#c7 in subparagraph 7,d71 by inserting before the comma the following3 and become insured before the expiration of the transition period under section #bha of the ,,fha ,reform and ,modernization ,act of #bjac4 #beg4 ,capital classifications and performance measures for ,mutual ,mortgage ,insurance ,fund 7a7 ,capital classification2 effect on insurance authority 7#a7 ,adequately capitalized ,at any time that the capital ratio 7as such term is defined in section #bef7;c77#b7 of this title7 is greater than #d4j percent1 the account for the ,mutual ,mortgage ,insurance ,fund established pursuant to section #bef7;a77#a7 shall be classified as adequately capitalized for purposes of this subtitle4 7#b7 ,undercapitalized ,at any time that the capital ratio is less than #d4j percent-- 7,a7 the account for the ,mutual ,mortgage ,insurance ,fund established pursuant to section #bef7;a77#a7 shall be classified as undercapitalized for purposes of this subtitle2 and 7,b7 if such capital ratio is-- 7i7 equal to or greater than #b4j percent1 the ,,fha may not enter into any new commitment to insure any mortgage on a #a- to #d-;family residential property that involves a principal obligation 7including such initial service charges1 appraisal1 inspection1 and other fees as the ,,fha shall approve7 in an amount exceeding #ij percent of the appraised value of the property2 and 7ii7 less than #b4j percent but equal to or greater than #j4j percent1 the ,,fha may not enter into any new commitment to insure any mortgage on a #a- to #d-;family residential property that involves a principal obligation 7including such initial service charges1 appraisal1 inspection1 and other fees as the ,,fha shall approve7 in an amount exceeding #hj percent of the appraised value of the property4 7#c7 ,significantly undercapitalized ,at any time that the capital ratio is less than #j4j percent-- 7,a7 the account for the ,mutual ,mortgage ,insurance ,fund established pursuant to section #bef7;a77#a7 shall be classified as significantly undercapitalized for purposes of this subtitle2 and 7,b7 the ,director may1 pursuant to section #beh7;a77#a71 take actions under section #beh7;b74 7#d7 ,quarterly determination of capital ratio ,the ,director shall determine the capital ratio and the capital classification of the account for the ,mutual ,mortgage ,insurance ,fund established pursuant to section #bef7;a77#a7 for purposes of this subtitle not less frequently than each calendar quarter4 7b7 ,stress test 7#a7 ,in general ,the ,director shall develop a risk-based capital model to determine the amount of capital that is sufficient for the ,,fha to maintain positive capital during a period of economic stress4 ,the model shall incorporate the assumptions under paragraphs 7#b7 and 7#c74 7#b7 ,credit risk ,for purposes of paragraph 7#a71 the ,director shall assume that1 during the period of economic stress referred to in paragraph 7#a71 credit losses occur at a rate consistent with a nationwide economic recession of average severity based on nationwide economic recessions since #aiej4 7#c7 ,other risks ,for purposes of paragraph 7#a71 the ,director shall make assumptions about such other aspects of the period of economic stress as the ,director determines are appropriate and consistent4 7c7 ,capital restoration plan requirement ,if the account for the ,mutual ,mortgage ,insurance ,fund established pursuant to section #bef7;a77#a7 is classified as undercapitalized or significantly undercapitalized1 the ,,fha shall-- 7#a7 submit to the ,director a capital restoration plan meeting the requirements of section #beh7;d7 for raising or restoring the capital of such account to an amount not less than the amount required for such account to be classified as adequately capitalized2 and 7#b7 upon approval by the ,director1 carry out such plan4 ,if the ,director disapproves a capital restoration plan submitted under this subsection1 the ,director shall convey in writing reasons for such disapproval and shall provide for the ,,fha to resubmit a revised plan for approval by the ,director4 #beh4 ,enforcement 7a7 ,grounds ,the ,director may take actions under subsection 7b7 only if-- 7#a7 the account for the ,mutual ,mortgage ,insurance ,fund established pursuant to section #bef7;a77#a7 is classified under section #beg7;a7 as significantly undercapitalized2 7#b7 the account for the ,mutual ,mortgage ,insurance ,fund established pursuant to section #bef7;a77#a7 is classified under section #beg7;a7 as undercapitalized and-- 7,a7 the ,,fha does not submit a capital restoration plan that is substantially in compliance with section #beg7;c7 within the applicable period1 or the ,director disapproves the capital restoration plan submitted by the ,,fha2 or 7,b7 the ,,fha has failed to make1 in good faith1 reasonable efforts necessary to comply with the capital restoration plan2 or 7#c7 the ,,fha is engaging or has engaged1 or the ,director has reasonable cause to believe that the ,,fha is about to engage in-- 7,a7 any conduct that is likely to threaten the adequacy of the capital of the account for the ,mutual ,mortgage ,insurance ,fund established pursuant to section #bef7;a77#a72 7,b7 any failure to comply with any written agreement entered into by the ,,fha with the ,director2 or 7,c7 any failure to comply with any request by the ,director for a report1 data1 or information under section #bed7;b74 7b7 ,actions ,the ,director may1 under this subsection1 require the ,,fha-- 7#a7 to cease and desist from any conduct or activity that-- 7,a7 with respect to the account for the ,mutual ,mortgage ,insurance ,fund established pursuant to section #bef7;a77#a71 is described in paragraph 7#b7 or 7#c7 of subsection 7a71 or that contributes to the condition described in subsection 7a77#a72 and 7,b7 with respect to any other ,fund1 contributes to a failure to meet a capital reserve requirement established pursuant to section #bei7;a7 or is likely to threaten the adequacy of the capital of such ,fund2 and 7#b7 to take corrective or remedial action1 including-- 7,a7 restricting the growth of1 or contracting1 any category of assets or liabilities2 7,b7 reducing1 modifying1 or terminating any activity that the ,director determines creates excessive risk to the ,,fha2 7,c7 terminating agreements or contracts2 7,d7 engaging or employing qualified employees 7who may be subject to approval by the ,director at the direction of the ,director72 or 7,e7 submitting to the ,director for review and approval a detailed and complete operating plan4 7c7 ,reports ,if the ,director is authorized under subsection 7a7 of this section or section #bei7;b7 to take action under subsection 7b7 of this section and determines not to take any such action1 the ,director shall prepare a report detailing the basis of the ,director's decision not to take such action and shall1 within #cj days of the decision1 submit the report to the ,president1 the ,director of the ,office of ,management and ,budget1 the ,comptroller ,general of the ,united ,states1 the ,committee on ,banking and ,financial ,services of the ,house of ,representatives1 and the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate4 7d7 ,capital restoration plans ,a capital restoration plan submitted pursuant to section #beg7;c71 #bei7;b71 or #bfj7;d77#c7 shall-- 7#a7 set forth a feasible plan for raising or restoring the capital of the ,fund for which it is prepared2 7#b7 specify the level of capital to be achieved and maintained2 7#c7 be submitted to the ,director within #de days from the date of notification1 or if the ,director determines that an extension is necessary1 within such additional time as the ,director so determines2 7#d7 describe the actions that the ,,fha shall take for such ,fund to become classified as adequately capitalized2 7#e7 establish a schedule for completing the actions set forth in the plan2 and 7#f7 specify the types and levels of activities 7including existing and new business activities7 in which the ,,fha shall engage during the term of the plan4 #bei4 ,capital reserve requirements for other funds 7a7 ,requirements ,the ,director shall establish capital reserve requirements for-- 7#a7 the ,general ,insurance ,fund established under section #eai of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agce;c72 7#b7 the ,special ,risk ,insurance ,fund established under section #bch7;b7 of such ,act 7#ab ,u4,s4,c4 #agaez-#c7;b772 7#c7 the ,cooperative ,management ,housing ,insurance ,fund established under section #bac7k7 of such ,act 7#ab ,u4,s4,c4 #agae;e7k772 and 7#d7 the ,rural ,housing ,insurance ,fund established under title ,v of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adga71 or the various accounts of such ,fund4 7b7 ,enforcement ,the ,director may enforce compliance with the requirements under subsection 7a7 of this section with respect to a ,fund by taking action under section #beh7;b7 or by requiring submission of a capital restoration plan for such ,fund meeting the requirements of section #beh7;d74 #bfj4 ,authority to establish temporary capital ratios in cases of nationwide countercyclical market adjustment 7a7 ,authority2 determination ,the ,director may suspend the applicability of the capital ratio under section #bef7;b7 for the ,mutual ,mortgage ,insurance ,fund or any capital reserve requirement established pursuant to section #bei for any ,fund specified under such section and establish a temporary alternative capital ratio with respect to such ,fund for a specified period of time1 but only upon a joint determination by the ,director and the ,chief ,risk ,officer that-- 7#a7 available credit throughout the ,united ,states or a significant portion of the ,united ,states for the purchase of the types of residences for which mortgages that obligations of such ,fund are made has contracted significantly1 as measured by the credit availability measure of the ,office of the ,comptroller of the ,currency2 7#b7 housing prices throughout the ,united ,states or a significant portion of the ,united ,states have declined significantly1 as measured by the applicable housing price index of the ,federal ,housing ,finance ,agency2 or 7#c7 available credit for the purchase of housing or such other economic conditions exist sufficient to evidence a significant contraction of capital throughout the ,united ,states or a significant portion of the ,united ,states1 as measured by a metric identified by the ,director and the ,chief ,risk ,officer in a written notice made publicly available1 and provided to the ,congress1 in advance of such determination4 7b7 ,conditions of termination ,upon making a determination under subsection 7a71 the ,director and the ,chief ,risk ,officer shall also identify measurable criteria for determining that the conditions determined under subsection 7a7 have ceased to exist4 7c7 ,notice to ,congress ,upon making a determination under subsection 7a71 the ,director and the ,chief ,risk ,officer shall provide written notice to the ,congress of such determination and the specific measurable criteria identified pursuant to subsection 7b74 7d7 ,effect of temporary alternative capital ratio ,during any period that a temporary alternative capital ratio is in effect pursuant to subsection 7a7 with respect to any ,fund-- 7#a7 in the case of a temporary capital ratio for the ,mutual ,mortgage ,insurance ,fund1 subsections 7a7 and 7c7 of section #beg and section #beh shall not apply2 7#b7 such temporary and alternative capital classifications as the ,director shall establish shall be in effect with respect to such ,fund2 and 7#c7 the ,director shall require the ,,fha or the ,secretary of ,agriculture 7as appropriate7 to submit and carry out a capital restoration plan for such ,fund meeting the requirements under section #beh7;d7 and may take actions under section #beh7;b7 with respect to such ,fund only in accordance with such standards relating to such temporary and alternative capital classifications for such ,fund as the ,director shall establish4 7e7 ,termination ,any temporary alternative capital ratio established pursuant to subsection 7a7 shall terminate upon the earlier of-- 7#a7 the expiration of the #ah-month period beginning upon the date that notification under subsection 7c7 is provided to the ,congress of the determination under subsection 7a72 or 7#b7 the occurrence of the conditions identified pursuant to subsection 7b74 7f7 ,multiple determinations ,nothing in this section may be construed to prevent multiple or consecutive periods during which temporary alternative capital ratios are in effect pursuant to this section4 #bfa4 #g-year borrower suspension for foreclosure 7a7 ,,fha 7#a7 ,in general ,except as provided in paragraph 7#b71 with respect to any mortgage on a #a- to #d-;family residential property that is foreclosed upon1 during the #g-year period beginning upon the date of such foreclosure1 the ,,fha may not newly insure1 under any provision of this title1 the ,national ,housing ,act1 or any ,,fha program1 any other mortgage under which the mortgagor is the individual who was the mortgagor under the mortgage that was foreclosed upon4 7#b7 ,waiver ,the ,,fha shall provide1 by regulation1 for the ,,fha to waive the applicability of paragraph 7#a7 with respect to a mortgagor in cases in which hardship circumstances materially contributed to the default and foreclosure of the mortgage4 ,for purposes of this subsection1 such hardship circumstances may include divorce1 job or other income loss1 health problems1 death in the family1 and such other situations as the ,,fha may prescribe4 7b7 ,rural housing ,section #eje of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adge7 is amended by adding at the end the following new subsection3 7c7 #g-,year borrower suspension for foreclosure 7#a7 ,in general ,except as provided in paragraph 7#b71 with respect to any mortgage on a #a- to #d-;family residential property that is foreclosed upon1 during the #g-year period beginning upon the date of such foreclosure1 the ,secretary may not newly make1 insure1 or guarantee1 under any provision of this title1 any other loan under which the borrower is individual who was the mortgagor under the mortgage that was foreclosed upon4 7#b7 ,waiver ,the ,secretary shall provide1 by regulation1 for waiver of the applicability of paragraph 7#a7 with respect to a borrower in cases in which hardship circumstances materially contributed to the default and foreclosure of the mortgage4 ,for purposes of this subsection1 such hardship circumstances may include divorce1 job or other income loss1 health problems1 death in the family1 and such other situations as the ,secretary may prescribe4 4 7c7 ,regulations ,the ,,fha and the ,secretary of ,agriculture shall jointly issue regulations required under subsection 7a7 of this section and section #eje7;c7 of the ,housing ,act of #aidi1 as added by subsection 7b7 of this section4 #bfb4 ,borrower ineligibility upon second foreclosure 7a7 ,,fha ,if any individual is the mortgagor under any two mortgages on #a- to #d-;family residential properties that have been foreclosed upon1 the ,,fha may not newly insure1 under any provision of this title1 the ,national ,housing ,act1 or any ,,fha program1 any other mortgage under which such individual is the mortgagor4 7b7 ,rural housing ,section #eje of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adge71 as amended by the preceding provisions of this title1 is further amended by adding at the end the following new subsection3 7d7 ,borrower ineligibility upon second foreclosure ,if any individual is the mortgagor under any two mortgages for #a- to #d-;family residential properties that have been foreclosed upon1 the ,secretary may not newly make1 insure1 or guarantee1 under any provision of this title1 any other loan under which such individual is the borrower4 4 #bfc4 ,limitation on seller concessions 7a7 ,,fha ,the ,,fha may not newly insure1 under any provision of this title1 the ,national ,housing ,act1 or any ,,fha program1 any mortgage on a #a- to #d-;family residential property with respect to which the seller of the property subject to such mortgage 7or any third party or entity that is reimbursed directly or indirectly by the seller7 contributes toward the acquisition of the property by the mortgagor any amount in excess of #c percent of the total closing costs 7as determined by the ,,fha7 in connection with such acquisition4 7b7 ,rural housing ,section #eja of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adga71 as amended by the preceding provisions of this title1 is further amended by adding at the end the following new subsection3 7n7 ,limitation on seller concessions ,the ,secretary may not newly make1 insure1 or guarantee1 under any provision of this title1 any loan for a #a- to #d-;family residential property with respect to which the seller of the property for which the loan is made 7or any third party or entity that is reimbursed directly or indirectly by the seller7 contributes toward the acquisition of the property by the borrower any amount in excess of #c percent of the total closing costs 7as determined by the ,secretary7 in connection with such acquisition4 4 #bfd4 ,lender repurchase requirement 7a7 ,requirement ,the ,,fha may not newly insure1 under any provision of this title1 the ,national ,housing ,act1 or any ,,fha program1 any mortgage on a #a- to #d-;family residential property unless the mortgagee under such mortgage enters into such binding agreements as the ,,fha considers necessary to ensure that1 if the mortgagor is in default with respect to the mortgagor's obligation to make payments under the mortgage for #fj or more consecutive days during the #bd-month period beginning upon origination of the mortgage1 the mortgagee will1 upon notice by the ,,fha1 repurchase such mortgage in an amount equal to the remaining principal obligation under the mortgage1 as determined in accordance with guidelines issued by the ,,fha4 7b7 ,effective date ,this section shall take effect upon the date of the enactment of this ,act4 #bfe4 ,indemnification by mortgagees 7a7 ,in general ,if the ,,fha determines that at or before the time of loan closing the mortgagee knew1 or should have known based on the information then reasonably available to the mortgagee1 of a serious and material violation of the requirements established by the ,,fha with respect to a mortgage executed after the date of the enactment of this ,act by such mortgagee approved by the ,,fha under the direct endorsement program or insured by a mortgagee pursuant to the delegation of authority under section #bef of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agaez-#ba7 such that the mortgage loan should not have been approved and endorsed for insurance1 and the ,,fha pays an insurance claim with respect to the mortgage within a reasonable period specified by the ,,fha1 the ,,fha may require the mortgagee approved by the ,,fha under the direct endorsement program or the mortgagee delegated authority under such section #bef to indemnify the ,,fha for the loss1 or any portion thereof1 if the violation was a materially contributing factor to the cause of the mortgage default4 7b7 ,fraud or material misrepresentation ,if fraud or material misrepresentation was involved in connection with the origination or underwriting of a mortgage executed after enactment by the mortgagee and the ,,fha determines that at or before the time of loan closing such mortgagee knew or should have known1 based on the information then reasonably available to such mortgagee1 of the fraud or material misrepresentation such that the mortgage loan should not have been approved and endorsed for insurance1 the ,,fha shall require the mortgagee approved by the ,,fha under the direct endorsement program or the mortgagee delegated authority under such section #bef to indemnify the ,,fha for the loss1 or any portion thereof1 if the fraud or material misrepresentation was a materially contributing factor to the cause of the mortgage default4 7c7 ,appeals process ,the ,,fha shall1 by regulation1 establish an appeals process for mortgagees to appeal indemnification determinations made pursuant to subsection 7a7 or 7b74 7d7 ,requirements and procedures ,the ,,fha shall issue regulations establishing appropriate requirements and procedures governing the indemnification of the ,,fha by the mortgagee1 including public reporting on-- 7#a7 the number of loans that-- 7,a7 were not originated or underwritten in accordance with the requirements established by the ,,fha2 7,b7 involved fraud or material misrepresentation in connection with the origination or underwriting that was a material contributing factor to the cause of the mortgage default2 and 7,c7 the financial impact on the ,mutual ,mortgage ,insurance ,fund when indemnification is required4 7e7 ,quality control and assurance 7#a7 ,manual ,the ,,fha shall1 pursuant to its existing regulatory authority1 issue and update annually a manual1 handbook1 or guide that collects all of the origination and underwriting requirements that a mortgagee must follow to make residential mortgage loans eligible for insurance by the ,,fha which shall-- 7,a7 provide clear and concise directions so that a mortgagee can reasonably know what is expected of it2 7,b7 identify examples of specific serious and material violations that could be the basis for an indemnification demand under this section2 7,c7 apply nationally and be interpreted by the ,,fha uniformly with respect to all mortgages endorsed for insurance2 and 7,d7 permit prospective changes with reasonable advance notice to mortgagees1 which such changes must be incorporated into the following year's revised version of the manual1 handbook1 or guide and may not provide for retroactive changes to mortgages previously endorsed for insurance4 7#b7 ,requirements ,the ,,fha shall-- 7,a7 make prompt initial determinations of a mortgagee's potential liability for either indemnification under this section or other administrative remedies or sanctions that may be available under the ,national ,housing ,act or other applicable laws1 based on either self-reports by the mortgagee or other findings by the ,,fha through its examination processes of potential serious and material violations of such origination and underwriting requirements established under paragraph 7#a7 or other fraud and material misrepresentations2 7,b7 promptly notify the mortgagee of such initial determination and afford the lender the opportunity to provide additional information and analysis before a final determination is made2 and 7,c7 not pursue indemnification under subsections 7a7 and 7b7 with respect to those mortgages reviewed under this subsection unless an initial determination of mortgagee liability is made and communicated to the mortgagee within six months of the ,,fha's receipt of information that is reasonably sufficient to enable the ,,fha to determine initially that a serious and material violation or fraud or material misrepresentation may have occurred4 7f7 ,effective date ,this section shall take effect on the date of the enactment of this ,act4 ,during the transition period under section #bha1 any reference in this section to the ,,fha shall be construed to refer to the ,secretary to the extent the ,secretary has not delegated authority under this section to the ,,fha pursuant to section #bhb7a74 #bff4 ,prohibitions relating to use of power of eminent domain 7a7 ,,fha 7#a7 ,in general ,notwithstanding any other provision of law1 neither the ,secretary nor the ,,fha may newly insure1 under any provision of this title1 the ,national ,housing ,act1 or any ,,fha program1 any mortgage that is secured by a structure or dwelling unit that is located within a county that contains any structure or dwelling unit that secures or secured a residential mortgage loan which mortgage loan was obtained by the ,state during the preceding #abj months by exercise of the power of eminent domain4 7#b7 ,definitions ,for purposes of this paragraph1 the following definitions shall apply3 7,a7 ,residential mortgage loan ,the term residential mortgage loan means a mortgage loan that is evidenced by a promissory note and secured by a mortgage1 deed of trust1 or other security instrument on a residential structure or a dwelling unit in a residential structure4 ,such term includes a first mortgage or any subordinate mortgage4 7,b7 ,state ,the term ,state includes the ,district of ,columbia1 the ,commonwealth of ,puerto ,rico1 and any territory or possession of the ,united ,states1 and includes any agency or political subdivision of a ,state4 7b7 ,rural housing ,section #eja of the ,housing ,act of #aidi 7#db ,u4,s4,c4 #adga71 as amended by the preceding provisions of this title1 is further amended by adding at the end the following new subsection3 7o7 ,prohibition relating to use of power of eminent domain 7#a7 ,in general ,notwithstanding any other provision of law1 the ,secretary may not newly guarantee1 make1 or insure under this title any mortgage that is secured by a structure or dwelling unit that is located within a county that contains any structure or dwelling unit that secures or secured a residential mortgage loan which mortgage loan was obtained by the ,state during the preceding #abj months by exercise of the power of eminent domain4 7#b7 ,definitions ,for purposes of this subsection1 the following definitions shall apply3 7,a7 ,residential mortgage loan ,the term residential mortgage loan means a mortgage loan that is evidenced by a promissory note and secured by a mortgage1 deed of trust1 or other security instrument on a residential structure or a dwelling unit in a residential structure4 ,such term includes a first mortgage or any subordinate mortgage4 7,b7 ,state ,the term ,state has the meaning given such term in section #ejb7;h77#ab71 and includes any agency or political subdivision of a ,state4 4 7c7 ,effective date ,this section and the amendment made by this section shall take effect upon the date of the enactment of this ,act4 #bfg4 ,residual income requirement 7a7 ,in general ,the ,,fha may not newly insure1 under any provision of this title1 the ,national ,housing ,act1 or any ,,fha program1 any mortgage on a #a- to #d-;family residential property unless the mortgagor under such mortgage meets such requirements as the ,,fha shall1 by regulation1 establish to ensure that the mortgagor has sufficient residual income4 7b7 ,residual income ,for purposes of this section1 the term residual income means1 with respect to a mortgagor1 the net monthly income of the mortgagor1 as provided by regulation by the ,,fha1 after taking into consideration-- 7#a7 any assets of the mortgagor other than the property subject to such mortgage2 and 7#b7 any monthly obligations of the mortgagor with respect to mortgage payments1 insurance payment1 and taxes for the property subject to the mortgage1 income and other taxes1 maintenance1 and utility expenses for the property1 child care expenses1 auto1 consumer1 and any other debt obligations1 alimony and child support expenses1 and such other expenses as the ,,fha may provide4 7c7 ,effective date ,this section and the amendment made by this section shall take effect upon the date of the enactment of this ,act4 #bfh4 ,effective date ,this subtitle and the amendments made by this subtitle 7except for sections #bfd1 #bfe1 #bff1 and #bfg1 and any amendments made by such sections7 shall take effect upon the expiration of the transition period under section #bha4 ,d ,transition #bha4 ,transition period 7a7 ,in ,general ,for purposes of this subtitle1 the term transition period means the period that-- 7#a7 begins on the date of the enactment of this ,act2 and 7#b7 ends upon the earlier of-- 7,a7 the date that the ,director publishes notice in the ,federal ,register that the ,director has determined that all of the requirements under subsection 7b7 have been completed2 or 7,b7 the expiration of the #e-year period beginning on the date of the enactment of this ,act4 7b7 ,requirements for ,ending ,transition ,period ,the requirements under this subsection are the following3 7#a7 ,approval of initial annual budget and business plan ,the ,,fha has submitted to the ,director of the ,federal ,housing ,finance ,agency an initial annual budget and business plan and the ,director has approved the budget and plan4 7#b7 ,determination of corporate capacity ,the ,director of the ,office of ,management and ,budget has determined1 and notified the ,director1 that the staff1 systems1 and administrative infrastructure of the ,,fha are sufficient to permit the ,,fha to fully conduct the operation of its business4 #bhb4 ,authority during transition period ,during the transition period the ,,fha may-- 7#a7 carry out any power or responsibility of the ,secretary relating to mortgage insurance programs under the ,national ,housing ,act that the ,secretary delegates to the ,,fha1 using the staff1 systems1 and administrative infrastructure that the ,,fha engages or acquires during the transition period1 or the personnel and other resources of the ,secretary2 7#b7 incur any obligation consistent with-- 7,a7 the carrying out of a power or responsibility delegated under paragraph 7#a72 or 7,b7 the acquisition1 engagement1 or development of staff1 systems 7including technology to enhance the ability of the ,,fha to engage in the business authorized by the title71 and administrative structure2 and 7#c7 engage in any activity or undertake any responsibility 7not including entering into1 or making any commitment to enter into1 any contract of insurance under this title7 that the ,,fha determines to be consistent with the establishment of the ,,fha4 #bhc4 ,advisory ,board 7a7 ,establishment ,the ,secretary of ,housing and ,urban ,development shall establish an advisory board to provide advice to the ,board of ,directors of the ,,fha regarding establishing and organizing the ,,fha and creating the business plan1 premium structure1 and product lines of the ,,fha4 7b7 ,functions ,in carrying out its responsibilities under subsection 7a7 the advisory board may-- 7#a7 obtain guidance from participants in the mortgage markets to be served by the ,,fha2 7#b7 assess the housing and mortgage credit needs2 7#c7 obtain information concerning single family housing finance markets to assess how the ,,fha can complement the roles of public and private participants in such markets2 and 7#d7 consult with the relevant ,federal agencies generally regarding how the ,,fha can improve the delivery of single family housing credit enhancement to families1 communities1 and hard-to-serve markets4 7c7 ,membership ,the advisory board shall consist of-- 7#a7 the ,assistant ,secretary of ,housing and ,urban ,development who is the ,federal ,housing ,commissioner2 7#b7 the ,administrator of the ,rural ,housing ,service of the ,department of ,agriculture2 7#c7 not less than #e individuals appointed by the ,secretary who are representatives of the mortgage finance industry2 and 7#d7 not less than #b individuals who have expertise in affordable housing serving low- and moderate-income populations4 ,members of the advisory board shall serve at the pleasure of the ,secretary4 7d7 ,termination ,the advisory board shall terminate upon the expiration of the transition period under section #bha4 #bhd4 ,transfer of ,,hud authority 7a7 ,transfer ,except as provided in subsections 7c7 and 7d71 effective upon the expiration of the transition period1 the functions of1 authority provided to1 and the responsibilities of the ,secretary of ,housing and ,urban ,development and the ,department of ,housing and ,urban ,development under the following provisions of law are transferred to the ,,fha3 7#a7 ,titles ,,ii and ,v of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjg et seq41 #agce;a et seq474 7#b7 ,section #c of ,public ,law #ii-bhi 7#ab ,u4,s4,c4 #agba note2 relating to estimates of use of insuring authority71 except that this paragraph shall not terminate or transfer any authority of the ,secretary under such section relating to section #cjf7;g7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agba7;g774 7#c7 ,section #hja of the ,housing ,act of #aied 7#ab ,u4,s4,c4 #agja;j-#a2 relating to builders warranties74 7#d7 ,section #dbd of the ,housing and ,community ,development ,act of #aihg 7#ab ,u4,s4,c4 #agaez-#a;c2 relating to residential water treatment74 7#e7 ,section #cbh of the ,cranston-,gonzalez ,national ,affordable ,housing ,act 7#ab ,u4,s4,c4 #agac note2 relating to delegation of processing74 7#f7 ,section #ajf of the ,energy ,policy ,act of #aiib 7#ab ,u4,s4,c4 #agjaz-#af2 relating to energy efficient mortgages pilot program74 7#g7 ,section #edb of the ,housing and ,community ,development ,act of #aiib 7#ab ,u4,s4,c4 #agaez-#bb2 relating to multifamily mortgage credit programs74 7#h7 ,section #ajc7;h7 of the ,multifamily ,housing ,property ,disposition ,reform ,act of #aiid 7#ab ,u4,s4,c4 #agaez-#a;a note2 relating to alternative uses of multifamily projects to prevent default74 7b7 ,repeal of ,assignment ,provisions ,effective upon the date of the enactment of this ,act1 section #bjd7;a77#a77;,b7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agaj7;a77 is amended by striking the last sentence4 7c7 ,applicability ,the repeals under subsections 7a7 and 7b7 shall not affect any legally binding obligations entered into pursuant to the provisions repealed before the applicable effective date under such subsections4 ,any mortgage insurance1 funds1 or activities subject1 before repeal1 to a provision of law repealed by such subsections shall continue to be governed by the provision as it existed immediately before repeal1 except that the ,,fha may exercise any authority under such provision otherwise transferred to the ,,fha by this title4 7d7 ,references ,after the expiration of the transition period1 any reference in ,federal law to the ,secretary of ,housing and ,urban ,development1 in connection with any function of the ,secretary transferred under subsection 7a7 or any other provision of this subtitle1 shall be deemed to be a reference to the ,,fha4 #bhe4 ,wind-up of ,,hud affairs 7a7 ,abolishment of positions ,effective upon the expiration of the transition period1 any offices of the ,department of ,housing and ,urban ,development responsible for functions transferred pursuant to section #bhd7;a71 to the extent of such functions1 and the position of the ,federal ,housing ,commissioner in the ,department of ,housing and ,urban ,development1 are abolished4 7b7 ,disposition of ,affairs ,during the transition period1 the ,secretary1 solely for the purpose of winding up the affairs of the ,department relating to the functions transferred under section #bhd-- 7#a7 shall manage the employees of the ,department responsible for such functions and provide for the payment of the compensation and benefits of any such employee which accrue before the effective date of the transfer of such employee under section #bhg2 and 7#b7 may take any other action necessary for the purpose of winding up the affairs of the ,department relating to such functions4 7c7 ,status of ,employees ,before ,transfer ,the provisions of and amendments made by this title and the abolishments under subsection 7a7 of this section may not be construed to affect the status of any employee of the ,department as an employee of an agency of the ,united ,states for purposes of any other provision of law before the effective date of the transfer of any such employee under section #bhg4 7d7 ,use of ,property and ,services 7#a7 ,property ,the ,,fha may use the property of the ,department of ,housing and ,urban ,development to perform functions which have been transferred to the ,,fha for such time as is reasonable to facilitate the orderly transfer of functions transferred under any other provision of this title or any amendment made by this title to any other provision of law4 7#b7 ,agency services ,any agency1 department1 or other instrumentality of the ,united ,states1 and any successor to any such agency1 department1 or instrumentality1 which was providing supporting services to the ,department of ,housing and ,urban ,development before the expiration of the transition period under subsection 7a7 in connection with functions that are transferred under section #bhd to the ,,fha shall-- 7,a7 continue to provide such services1 on a reimbursable basis1 until the transfer of such functions is complete2 and 7,b7 consult with the ,,fha to coordinate and facilitate a prompt and reasonable transition4 7e7 ,continuation of ,services ,the ,,fha may use the services of employees and other personnel of the ,department of ,housing and ,urban ,development relating to the functions transferred under section #bhd1 on a reimbursable basis1 to perform functions which have been transferred to the ,,fha for such time as is reasonable to facilitate the orderly transfer of functions pursuant to any other provision of this title or any amendment made by this title to any other provision of law4 7f7 ,savings ,provisions 7#a7 ,existing rights1 duties1 and obligations not affected ,subsection 7a7 shall not affect the validity of any right1 duty1 or obligation of the ,united ,states1 the ,secretary of ,housing and ,urban ,development1 or any other person1 which-- 7,a7 arises under-- 7i7 the ,national ,housing ,act2 or 7ii7 any other provision of law applicable with respect to the functions of the ,department of ,housing and ,urban ,development transferred under section #bhd2 and 7,b7 existed on the day before the date of abolishment under subsection 7a74 7#b7 ,continuation of suits ,no action or other proceeding commenced by or against the ,secretary of ,housing and ,urban ,development in connection with functions transferred to the ,,fha under section #bhd shall abate by reason of the enactment of this title1 except that the ,,fha shall be substituted for the ,secretary as a party to any such action or proceeding4 #bhf4 ,continuation and coordination of certain actions 7a7 ,in general ,all regulations1 orders1 and determinations described in subsection 7b7 shall remain in effect according to the terms of such regulations1 orders1 and determinations1 and shall be enforceable by or against the ,,fha1 until modified1 terminated1 set aside1 or superseded in accordance with applicable law by the ,,fha1 as the case may be1 any court of competent jurisdiction1 or operation of law4 7b7 ,applicability ,a regulation1 order1 or determination is described in this subsection if it-- 7#a7 was issued1 made1 prescribed1 or allowed to become effective by-- 7,a7 the ,secretary of ,housing and ,urban ,development and relates to a function of the ,secretary transferred under section #bhd2 or 7,b7 a court of competent jurisdiction1 and relates to functions transferred under section #bhd2 and 7#b7 is in effect upon the expiration of the transition period4 #bhg4 ,transfer and rights of ,,hud employees 7a7 ,transfer ,each employee of the ,department of ,housing and ,urban ,development who performs functions transferred under section #bhd shall be transferred to the ,,fha for employment1 not later than the date of the expiration of the transition period1 and such transfer shall be deemed a transfer of function for purposes of section #cejc of title #e1 ,united ,states ,code4 7b7 ,guaranteed ,positions 7#a7 ,in general ,each employee transferred under subsection 7a7 shall be guaranteed a position with the same status1 tenure1 grade1 and pay as the position held by such employee on the day immediately preceding the transfer4 7#b7 ,no involuntary separation or reduction ,an employee transferred under subsection 7a7 holding a permanent position on the day immediately preceding the transfer may not be involuntarily separated or reduced in grade or compensation during the #ab-month period beginning on the date of transfer1 except for cause1 or1 in the case of a temporary employee1 separated in accordance with the terms of the appointment of the employee4 7c7 ,appointment ,authority for ,excepted and ,senior ,executive ,service ,employees 7#a7 ,in general ,in the case of an employee occupying a position in the excepted service or the ,senior ,executive ,service1 any appointment authority established under law or by regulations of the ,office of ,personnel ,management for filling such position shall be transferred1 subject to paragraph 7#b74 7#b7 ,decline of transfer ,the ,,fha may decline a transfer of authority under paragraph 7#a7 to the extent that such authority relates to-- 7,a7 a position excepted from the competitive service because of its confidential1 policymaking1 policy-determining1 or policy-advocating character2 or 7,b7 a noncareer position in the ,senior ,executive ,service 7within the meaning of section #cacb7;a77#g7 of title #e1 ,united ,states ,code74 7d7 ,reorganization ,if the ,,fha determines1 after the end of the #a-year period beginning on the expiration of the transition period1 that a reorganization of the combined workforce is required1 that reorganization shall be deemed a major reorganization for purposes of affording affected employee retirement under section #hccf7;d77#b7 or #hdad7;b77#a77;,b7 of title #e1 ,united ,states ,code4 7e7 ,employee benefit programs 7#a7 ,in general ,any employee of the ,department of ,housing and ,urban ,development accepting employment with the ,,fha as a result of a transfer under subsection 7a7 may retain1 for #ab months after the date on which such transfer occurs1 membership in any employee benefit program of the ,,fha or the ,department of ,housing and ,urban ,development1 as applicable1 including insurance1 to which such employee belongs on the date of the expiration of the transition period1 if-- 7,a7 the employee does not elect to give up the benefit or membership in the program2 and 7,b7 the benefit or program is continued by the ,,fha4 7#b7 ,cost differential 7,a7 ,in general ,the difference in the costs between the benefits which would have been provided by the ,department of ,housing and ,urban ,development and those provided by this section shall be paid by the ,,fha4 7,b7 ,health insurance -,if any employee elects to give up membership in a health insurance program or the health insurance program is not continued by the ,,fha1 the employee shall be permitted to select an alternate ,federal health insurance program not later than #cj days after the date of such election or notice1 without regard to any other regularly scheduled open season4 #bhh4 ,transfer of property and facilities ,upon the expiration of the transition period1 all property of the ,department of ,housing and ,urban ,development relating to the functions transferred under section #bhd shall transfer to the ,,fha4 #bhi4 ,effective date ,this subtitle shall take effect on the date of the enactment of this ,act4 ,e ,related amendments and provisions #bia4 ,,gnma authority ,title ,,iii of the ,national ,housing ,act is amended-- 7#a7 in section #cja7e7 7#ab ,u4,s4,c4 #agaf7e771 by inserting after federally owned mortgage portfolios the following3 7including any owned by the ,federal ,housing ,administration72 7#b7 in section #cjb 7#ab ,u4,s4,c4 #agag7-- 7,a7 in subsection 7b77#a71 by inserting 1 the ,,fha ,reform and ,modernization ,act of #bjac1 after ,national ,housing ,act each place such term appears2 and 7,b7 in subsection 7c77#b71 by inserting after subparagraph 7,f7 the following new subparagraph3 7,g7 ,the ,federal ,housing ,administration4 2 and 7#c7 in section #cjf7;g7 7#ab ,u4,s4,c4 #agba7;g77-- 7,a7 in the clause 7ii7 of the first sentence of paragraph 7#a71 by inserting or the ,,fha ,reform and ,modernization ,act of #bjac before 1 or which are insured2 and 7,b7 in paragraph 7#c77;,a71 by inserting under the ,,fha ,reform and ,modernization ,act of #bjac or are insured after ,federal ,housing ,administration4 #bib4 ,repeal of certain ,,fha programs 7a7 ,repeals ,effective upon the expiration of the #b-year period that begins upon the date of the enactment of this ,act1 the following sections are repealed3 7#a7 ,home equity conversion mortgage program ,section #bee of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agaez-#bj74 7#b7 ,mortgage insurance for hospitals ,section #bdb 7#ab ,u4,s4,c4 #agaez-#g74 7b7 ,conforming amendments 7#a7 ,the penultimate sentence of section #bab7;a7 7#ab ,u4,s4,c4 #agae;c7a77 is amended by inserting after section #bdb each place such term appears the following3 7as such section was in effect immediately before the effective date under section #bib7;a7 of the ,,fha ,reform and ,modernization ,act of #bjac74 7#b7 ,section #bbc 7#ab ,u4,s4,c4 #agaen7 is amended-- 7,a7 in subsection 7a77#g71 in the matter preceding subparagraph 7,a71 by inserting before the first comma the following3 but not including a mortgage insured under section #bdb 7as such section was in effect immediately before the effective date under section #bib7;a7 of the ,,fha ,reform and ,modernization ,act of #bjac72 7,b7 in subsection 7d77#b77;,a7-- 7i7 in clause 7i7 by striking and at the end2 and 7ii7 by inserting before the semicolon at the end the following3 and 7iii7 shall not be insured under section #bdb 7as such section was in effect immediately before the effective date under section #bib7;a7 of the ,,fha ,reform and ,modernization ,act of #bjac72 and 7,c7 in subsection 7f7-- 7i7 in paragraph 7#a7-- 7,i7 by striking existing hospital 7or2 and 7,,ii7 by striking thereof7 and inserting thereof2 and 7ii7 in paragraph 7#d7-- 7,i7 in the matter preceding subparagraph 7,a71 by striking existing hospital 7or2 7,,ii7 in the matter preceding subparagraph 7,a71 by striking thereof7 and inserting thereof12 7,,iii7 in subparagraphs 7,a71 7,b71 and 7,c7-- 7aa7 by striking existing hospital 7or each place such term appears2 and 7bb7 by striking thereof7 each place such term appears and inserting thereof2 and 7,,iv7 in subparagraph 7,d71 by striking or of section #bdb 7for the existing hospital proposed to be refinanced74 7#c7 ,section #eda7;a7 7#ab ,u4,s4,c4 #agce;f-#ai7;a77 is amended by inserting after section #bdb of this ,act the following3 1 as such section was in effect immediately before the effective date under section #bib7;a7 of the ,,fha ,reform and ,modernization ,act of #bjac4 7c7 ,savings ,provisions 7#a7 ,effect of repeals ,the repeals under subsection 7a7 shall not affect any legally binding obligations entered before the effective date of such repeals4 7#b7 ,insurance authority ,notwithstanding the repeals under subsection 7a71 the ,secretary 7or the ,,fha1 pursuant to subtitle ,d of this title7 may insure any mortgage for which a commitment to insure under section #bdb or #bee of the ,national ,housing ,act was made before the expiration of the period referred to in subsection 7a74 ,any such mortgage insured under such section #bdb or #bee shall be subject to the terms of such section as in effect immediately before the expiration of such period4 7#c7 ,savings provision ,any funds or activities subject1 before the effective date of the repeals under subsection 7a7 of this section1 to section #bdb or #bee of the ,national ,housing ,act shall continue to be governed by such sections as in effect immediately before such effective date4 #bic4 ,conforming amendments 7a7 ,penalties for equity skimming ,paragraph 7#a7 of section #iab of the ,housing and ,urban ,development ,act of #aigj 7#ab ,u4,s4,c4 #agji-b7a77 is amended by inserting or ,federal ,housing ,administration after ,housing and ,urban ,development4 7b7 ,fraudulently misappropriated mortgage proceeds ,section #hai of the ,housing and ,community ,development ,act of #aigd 7#ab ,u4,s4,c4 #agjal-#a7 is amended-- 7#a7 by inserting or the ,federal ,housing ,administration after ,secretary of ,housing and ,urban ,development2 and 7#b7 by inserting or such ,administration1 as appropriate1 before has reason4 7c7 ,unauthorized use of multifamily housing assets and income ,section #dba of the ,housing and ,community ,development ,act of #aihg 7#ab ,u4,s4,c4 #agaez-#d;a7 is amended-- 7#a7 in subsection 7a7-- 7,a7 in paragraph 7#a7-- 7i7 by inserting or the ,,fha1 as applicable1 after ,secretary'72 7ii7 by inserting or by the ,,fha pursuant to the ,,fha ,reform and ,modernization ,act of #bjac after ,national ,housing ,act2 and 7iii7 in the last sentence1 by inserting or the ,,fha after ,secretary each place such term appears2 7,b7 in paragraph 7#b71 by inserting or the ,,fha ,reform and ,modernization ,act of #bjac before the first comma2 and 7#b7 in subsections 7b7 through 7e7-- 7,a7 by inserting or the ,,fha1 as applicable1 after ,secretary1 each place such term appears2 and 7,b7 by inserting or the ,,fha1 as applicable1 after ,secretary each place such term appears 7except the penultimate occurrence in subsection 7c774 7d7 ,single family mortgage foreclosure ,the ,single ,family ,mortgage ,foreclosure ,act of #aiid 7#ab ,u4,s4,c4 #cgea et seq47 is amended-- 7#a7 in section #hjb7;b77#a7 7#ab ,u4,s4,c4 #cgea7;b77#a771 by inserting or by the ,,fha pursuant to the ,,fha ,reform and ,modernization ,act of #bjac before the semicolon2 7#b7 in section #hjc7aj77;,a7 7#ab ,u4,s4,c4 #cgeb7aj77;,a77-- 7,a7 in subparagraph 7,a71 by striking or at the end2 7,b7 by redesignating subparagraph 7,b7 as subparagraph 7,c72 and 7,c7 by inserting after subparagraph 7,a7 the following new subparagraph3 7,b7 is held by the ,,fha pursuant to the ,,fha ,reform and ,modernization ,act of #bjac2 or 2 and 7#c7 by adding at the end the following new section3 #hbj4 ,authority of ,,fha ,after the expiration of the transition period under section #bha of the ,,fha ,reform and ,modernization ,act of #bjac1 any reference in sections #hjd through #hai of this ,act to the ,secretary shall be considered to also refer to the ,,fha 7as established pursuant to subtitle ,a of such ,act71 but only with respect to single family mortgages described in section #hjc7aj77;,b74 4 7e7 ,multifamily mortgage foreclosure ,the ,multifamily ,mortgage ,foreclosure ,act of #aiha 7#ab ,u4,s4,c4 #cgja et seq47 is amended-- 7#a7 in section #cfc7b7 7#ab ,u4,s4,c4 #cgjb7b771 by adding after and below subparagraph 7,e7 the following3 ,such term includes a mortgage on a property consisting of #e or more dwelling units that is held by the ,,fha pursuant to the ,,fha ,reform and ,modernization ,act of #bjac4 4 7#b7 by adding at the end the following new section3 #cfi;,j4 ,authority of ,,fha ,after the expiration of the transition period under section #bha of the ,,fha ,reform and ,modernization ,act of #bjac1 any reference in sections #cfd through #cfi;,i of this ,act to the ,secretary shall be considered to also refer to the ,,fha 7as established pursuant to subtitle ,a of such ,act71 but only with respect to multifamily mortgages described in the last sentence of section #cfc7b74 4 #bid4 ,rule of construction ,notwithstanding any other evidence of the intent of the ,congress1 it is hereby declared to be the intent of ,congress that the provisions of this title shall be construed broadly to achieve the purposes of the title1 and the provisions of any other ,act that must be construed with any provision of this title shall similarly be construed to achieve the purposes of this title to the extent reasonably possible4 ,this section shall take effect on the date of the enactment of this ,act4 #bie4 ,effective date ,the amendments made by this subtitle shall be made1 and shall apply beginning on1 the expiration of the transition period under section #bha4 ,,iii ,building a ,new ,market ,structure ,a ,national ,mortgage ,market ,utility #cja4 ,short title ,this subtitle may be cited as the ,national ,mortgage ,market ,utility ,act of #bjac4 #cjb4 ,findings and purposes 7a7 ,findings ,the ,congress finds that-- 7#a7 the liquidity and efficiency of the national housing finance market is enhanced by a robust secondary market for residential mortgage loans1 including securities backed by residential mortgage loans2 7#b7 the financial crisis that began in #bjjg revealed weaknesses in the market infrastructure related to residential mortgage-backed securities1 including-- 7,a7 weaknesses in standards-- 7i7 for underwriting and servicing residential mortgage loans that may be collateral for mortgage-backed securities2 and 7ii7 for issuers and trustees of such securities2 7,b7 weaknesses in the manner of recording and registering ownership and security interests in residential mortgage loans that backed pools of securities2 and 7,c7 weaknesses in the availability of information to assess performance of pools2 7#c7 weaknesses revealed in the financial crisis created uncertainty and impeded timely and successful resolution of troubled residential mortgage loans1 and have impeded the return of private capital to the market for securities backed by residential mortgage loans in the absence of a ,federal guarantee of timely payment of principal and interest to investors2 and 7#d7 improved standards and information availability and a national system for registering mortgage-related documents1 including notes1 mortgages and deeds of trust1 and ownership and security interests established therein1 with standard procedures for demonstrating the right to act with regard to such notes or other registered data1 would assist in addressing these weaknesses4 7b7 ,purposes ,the purposes of the national mortgage market utility created by this title are-- 7#a7 to enhance efficiency1 liquidity1 and security in the secondary market for residential mortgages1 including mortgage-backed securities2 7#b7 to establish standards related to originating and servicing eligible collateral and for issuers and trustees of qualified securities1 which would be exempt from the ,securities ,act of #aicc2 7#c7 to improve uniformity1 quality and accessibility of information related to the performance of residential mortgage loans2 7#d7 to operate a common securitization platform that could be available to issuers of residential mortgage-backed securities2 7#e7 to foster the use and uniformity of electronic methods for the creation1 authentication1 transmission1 storage1 and availability of materials relating to mortgages2 7#f7 to provide a central repository for notes1 mortgages1 and other mortgage-related information1 and address problems that can arise when paper notes cannot be produced1 due to loss or destruction as a result of natural disaster or other causes2 and 7#g7 to provide a uniform procedure for demonstrating the right to act with regard to such notes or other registered data for all actions in any ,state or ,federal proceeding1 judicial or nonjudicial1 involving such notes or other data4 #cjc4 ,definitions ,for purposes of this subtitle1 the following definitions shall apply3 7#a7 ,affiliate ,with respect to the ,utility1 the term affiliate means any entity that controls1 is controlled by1 or is under common control with1 the ,utility4 7#b7 ,agency ,the term ,agency means the ,federal ,housing ,finance ,agency4 7#c7 ,depositor ,the term depositor means-- 7,a7 any person authorized to submit documents or data for registration with the ,repository2 and 7,b7 any person qualified pursuant to section #cca 7relating to organization and operation of the ,repository7 to inform the ,repository of-- 7i7 newly identified interest holders1 whether through creation1 assignment1 or transfer2 or 7ii7 changes to interests of existing holders1 including through modification1 amendment1 or restatement of1 or discharge related to1 any registered mortgage-related document4 7#d7 ,director ,the term ,director means the ,director of the ,federal ,housing ,finance ,agency4 7#e7 ,eligible collateral ,the term eligible collateral means a residential mortgage loan that meets any standard for mortgage classification established pursuant to section #cbb 7relating to standards for qualified securities74 7#f7 ,enterprise ,the term enterprise means-- 7,a7 the ,federal ,national ,mortgage ,association and any affiliate thereof1 and 7,b7 the ,federal ,home ,loan ,mortgage ,corporation and any affiliate thereof4 7#g7 ,mortgage-related document ,the term mortgage-related document means any document or other information or data related to the use of residential real estate as security for a loan1 including documents establishing an obligation to repay a loan secured by residential real estate1 establishing a security interest in real estate1 establishing the value of the real estate at the time the security interest is created1 and insuring clear title to residential real estate pledged as security1 or as the ,director by regulation may define4 ,such documents may include electronic documents4 7#h7 ,organizer ,the term organizer means the person or entity that establishes the ,utility4 7#i7 ,participant ,the term participant means any person authorized to use data maintained or created by the ,repository that is not otherwise available to the public4 7#aj7 ,platform ,the term ,platform means the securitization infrastructure announced by the ,federal ,housing ,finance ,agency on ,october #d1 #bjab1 and as developed by an enterprise or the enterprises in conservatorship1 under authority of the ,federal ,housing ,finance ,agency pursuant to the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib4 7#aa7 ,repository ,the term ,repository means the national mortgage data repository organized under section #cca4 7#ab7 ,utility ,the term ,utility means the national mortgage market utility established under section #caa4 7#ac7 ,utility-affiliated party ,the term utility-affiliated party means-- 7,a7 any director1 officer1 employee or controlling stockholder of1 or agent for1 the ,utility2 7,b7 any shareholder1 affiliate1 consultant1 or joint venture partner of the ,utility1 and any other person1 as determined by the ,director 7by regulation or on a case-by-case basis7 that participates in the conduct of the affairs of the ,utility2 7,c7 any independent contractor of the ,utility 7including any attorney1 appraiser or accountant7 if-- 7i7 the independent contractor knowingly or recklessly participates in any violation of law or regulation1 any breach of fiduciary duty or any unsafe or unsound practice2 and 7ii7 such violation1 breach or practice caused1 or is likely to cause1 more than a minimal financial loss to1 or a significant adverse effect on1 the ,utility4 #a ,establishment and authority of the ,utility #caa4 ,establishment 7a7 ,authority of ,director ,under such regulations as the ,director may prescribe1 the ,director shall provide for the organization1 incorporation1 examination1 operation1 and regulation of a national mortgage market utility 7,utility71 and issuance of a charter for such ,utility4 ,the ,utility shall be organized1 operated1 and managed as a not-for-profit entity4 7b7 ,formation of ,utility2 application 7#a7 ,formation ,subject to the terms of this subtitle and any regulations issued by the ,director1 a person or entity may file an application with the ,director to establish the ,utility4 ,the ,utility may be chartered as a corporation1 mutual association1 partnership1 limited liability corporation1 cooperative1 or any other organizational form that the applicant may deem appropriate4 7#b7 ,contents of application ,an application for establishment of the ,utility shall include-- 7,a7 the proposed articles of association2 7,b7 a statement of the general object and purpose of the ,utility1 consistent with the provisions of this subtitle2 7,c7 the proposed capitalization and business plan for the ,utility2 7,d7 the proposed ,state whose law would govern1 by election of the applicant1 the operation of the ,utility to the extent not otherwise covered by this subtitle2 7,e7 information on the financial resources of the applicant2 7,f7 a statement of the relevant housing finance experience of the applicant2 7,g7 identification of the proposed senior managers of the ,utility1 and the relevant experience of such individuals2 and 7,h7 any other information the ,director determines to be necessary to evaluate the background1 experience1 and integrity of the applicant and the proposed senior managers1 or information otherwise relevant to determine the likely success of the proposed ,utility4 7c7 ,issuance of charter and chartering criteria 7#a7 ,charter ,not later than the end of the #b-year period following the date of the enactment of this ,act1 the ,director shall issue a charter for the ,utility to the applicant that the ,director determines1 in the ,director's sole discretion1 has the managerial1 financial1 and operational resources to succeed1 consistent with the purposes of this subtitle4 ,at the discretion of the ,director1 the charter may require the ,utility to obtain specific approval from the ,director before commencing any business operation1 including operations related to the ,platform or the ,repository1 which approval shall be provided when the ,director determines1 in the ,director's sole discretion1 that the ,utility demonstrates appropriate operational1 managerial1 and governance capability with regard to such operation1 including successful completion of testing and transition periods4 7#b7 ,chartering criteria ,in making a determination under paragraph 7#a71 the ,director shall consider the competence1 experience1 and integrity of the applicant and proposed senior managers of the ,utility1 and the financial and operational resources and future prospects of the ,utility4 ,the ,director may not issue a charter if the applicant fails to-- 7,a7 comply with all applicable formation requirements2 7,b7 provide all information requested by the ,director2 7,c7 demonstrate the competence1 experience1 and integrity necessary to operate the ,utility in a safe and sound manner2 7,d7 demonstrate sufficient financial resources necessary to operate the ,utility in a safe and sound manner2 7,e7 provide the ,director with assurances that it will operate and maintain the ,platform in an open-access manner that does not discriminate against eligible loan originators1 aggregators1 or qualified issuers2 or 7,f7 provide the ,director with assurances that the ,utility will make available to the ,director1 on an on-going basis1 such information on the operation and activities of the ,utility1 or any affiliate of the ,utility1 that the ,director deems necessary to ensure the safe and sound operation of the ,utility and to enforce compliance with this subtitle4 7#c7 ,explanation ,for ,denial ,within #cj days of denying any application for the issuance of a charter under this section1 the ,director shall provide the applicant with a written explanation of the basis for the denial4 7d7 ,authority ,to ,suspend 7#a7 ,in general ,the authority of the ,director shall include the authority to suspend the charter of the ,utility1 if the ,director determines1 in the ,director's discretion1 that-- 7,a7 the organizers have failed to make adequate progress in establishing the ,utility or any business operation2 7,b7 the organizers engaged in waste of appropriated funds made available for establishment of the ,repository2 or 7,c7 such suspension is necessary for any other reason related to safe and sound operation of the ,utility4 7#b7 ,rulemaking ,the ,director shall issue regulations to address suspension of the charter1 including a process for remediation4 7e7 ,status 7#a7 ,not a ,federal ,government instrumentality ,the ,utility is not1 and shall not be deemed to be1 a department1 agency1 or instrumentality of the ,united ,states ,government and shall not be subject to title #e or #ca of the ,united ,states ,code4 7#b7 ,supervision ,notwithstanding any other provision of law1 the ,utility shall be subject to the exclusive supervision and regulation by the ,agency1 and shall not be subject to supervision or regulation by any other ,federal department or agency or by any ,state4 ,the ,utility is authorized to conduct its business without regard to any qualification or similar statute in any ,state4 7#c7 ,exemption from taxation ,the ,utility shall be exempt from all taxation imposed by the ,united ,states1 any territory1 dependency1 or possession of the ,united ,states or any ,state1 county1 municipality1 or local taxing authority1 except that any real property of the ,repository shall be subject to ,state1 territorial1 county1 municipal1 or local taxation to the same extent according to its value as other real property4 7f7 ,directors ,the ,utility shall be governed by a board of directors1 which shall consist of a number of directors determined by the ,director to meet the needs of the ,utility1 of which-- 7#a7 not less than two members shall be from larger financial institutions2 7#b7 not less than two members shall be from smaller financial institutions2 7#c7 not less than two members shall have expertise in residential mortgage securitizations1 7#d7 not less than two members shall have expertise in legal and electronic documentation and systems2 and 7#e7 such other members as the ,director may provide1 who shall have such qualifications as the ,director may establish in the charter or by regulation to meet the requirements for independence and any provisions of applicable ,state law4 7g7 ,reports to ,congress ,commencing with the first annual report of the ,director following the date of the enactment of this ,act1 the annual report of the ,director under section #acai;,b of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #deba7 shall include a description of the ,agency's activities with regard to organization1 incorporation1 examination1 operation1 and regulation of the ,utility4 #cab4 ,general powers2 authorized and prohibited activities 7a7 ,general ,powers ,the ,utility may-- 7#a7 adopt and use a corporate seal2 7#b7 determine a ,state whose law will govern the corporate business activities of the ,utility2 7#c7 adopt1 amend1 and repeal by-laws2 7#d7 sue or be sued1 subject to section #ccd 7relating to judicial review72 7#e7 make contracts1 incur liabilities1 borrow money1 and issue notes1 bonds1 or other obligations2 7#f7 purchase1 receive1 hold1 and use real and personal property and other assets necessary for the conduct of its operations2 7#g7 elect or appoint directors1 officers1 employees and agents1 subject to section #caa7;f72 and 7#h7 upon receipt of the ,director's prior written approval1 establish subsidiaries or affiliates that shall be subject to the same rights1 duties and responsibilities as the ,utility4 7b7 ,authorized activities ,in addition to the general powers under subsection 7a71 the ,utility shall-- 7#a7 develop standards related to originating1 servicing1 pooling1 and securitizing residential mortgage loans in accordance with part #b2 7#b7 operate and maintain the ,platform and establish fees for use of the ,platform2 7#c7 establish the ,repository and establish fees for registration of mortgage-related documents and maintenance and use of data of the ,repository1 in accordance with part #c2 7#d7 perform any other service or engage in any other activity that the ,director determines1 by regulation or order1 to be incidental to the activities enumerated in this subsection2 and 7#e7 establish fees for the provision of other related or incidental services not inconsistent with the purposes of this subtitle4 7c7 ,prohibited activities ,the ,utility shall not-- 7#a7 originate1 service1 insure1 or guarantee any residential mortgage or other financial instrument that is associated with a residential mortgage2 7#b7 guarantee timely payment of principal or interest on any mortgage-related security2 7#c7 adopt access rules or fees for the ,platform the effect of which is to discriminate against eligible loan originators1 aggregators1 or qualified issuers based on size1 composition1 business line1 or loan volume2 or 7#d7 perform any service or engage in any activity other than those authorized under this subtitle1 unless such activity has been determined by the ,director to be incidental to an authorized activity4 #cac4 ,transfer of ownership of ,platform 7a7 ,valuation ,not later than the end of the #f-month period beginning on the date of the enactment of this ,act1 the ,director shall determine a method for recovering the cost to each enterprise of developing the ,platform1 in consultation with ,treasury1 and agree on a valuation of the ,platform upon transfer to the ,utility4 7b7 ,transfer ,not later than the end of the #a-year period beginning on the date of the issuance of the charter of the ,utility by the ,director1 the ,director shall oversee the transfer to the ,utility of ownership of the ,platform4 ,at the time of such transfer1 the value of the ,platform as established in accordance with subsection 7a7 shall be deemed transferred to the ,utility1 and shall be repaid to the ,treasury of the ,united ,states by the ,utility within #aj years after such transfer4 7c7 ,availability to ,director ,after transfer of the ,platform to the ,utility1 to the extent feasible the ,platform shall be made available to the ,agency on terms and conditions applicable to other users1 to assist with managing the wind-down of any enterprise for which the ,agency has been appointed conservator or receiver pursuant to section #acfg of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #dfag74 #cad4 ,funding 7a7 ,initial funding ,there is authorized to be appropriated #aej1jjj1jjj for the establishment and initial oversight1 regulation1 and supervision of the ,utility and its operation4 7b7 ,repayment of ,initial ,funding ,the ,utility shall repay to the ,treasury of the ,united ,states the amount of the initial funding provided in subsection 7a7 within the #aj-year period beginning on the date that the ,utility is chartered4 7c7 ,ongoing funding 7#a7 ,collection of ,fees ,after establishment1 all expenses of the ,utility shall be paid for by fees collected based on services provided by and operations of the ,utility4 7#b7 ,establishment of fee schedule ,the ,utility shall-- 7,a7 establish1 subject to the approval of the ,director1 a fee schedule and may differentiate fees based on classes or types of services1 operations1 and users of services or operations1 and such differentiation shall not be deemed discriminatory2 and 7,b7 review and publish the fee schedule not less frequently than annually1 but may review1 revise1 and publish the schedule more frequently than annually4 #cae4 ,regulation1 supervision1 and enforcement 7a7 ,general oversight ,the ,director shall exercise1 by rule1 order1 or guidance1 oversight of the ,utility1 which shall include the authority to regulate1 supervise1 and examine the ,utility and take enforcement actions against the ,utility or any ,utility-affiliated party1 consistent with the provisions of the ,federal ,housing ,enterprise ,financial ,safety and ,soundness ,act of #aiib4 7b7 ,scope of ,authority ,the authority of the ,director under this section shall include the authority to exercise such incidental powers as may be necessary or appropriate to fulfill the duties and responsibilities of the ,director in the oversight1 supervision1 and regulation of the ,utility4 7c7 ,division of ,utility regulation ,the ,director shall establish within the ,agency a ,division of ,utility ,regulation1 which shall-- 7#a7 be headed by a ,deputy ,director designated by the ,director from among individuals who are citizens of the ,united ,states who have a demonstrated understanding of financial management or oversight and of mortgage securities markets and housing finance2 and 7#b7 as requested by the ,director1 conduct examination and supervision activities1 gather any information attendant to such activities1 and provide recommendations to the ,director regarding the safe and sound operation of the ,utility and regarding any requests to revise1 alter1 or amend existing or proposed activities4 7d7 ,consultation with ,other ,agencies ,in exercising authority to regulate and supervise the ,utility1 the ,director shall consult with other ,federal departments and agencies that regulate or supervise entities1 institutions1 or companies that are or may become subject to standards1 rules1 processes1 or procedures developed by the ,utility 7including issuers through the ,platform and depositors or participants in the ,repository71 including the ,bureau of ,consumer ,financial ,protection and any appropriate ,federal banking agency 7as defined under section #c of the ,federal ,deposit ,insurance ,act74 7e7 ,annual ,assessment ,the ,director shall establish and collect from the ,utility an annual assessment in an amount not exceeding the amount sufficient to provide for reasonable costs 7including administrative costs7 and expenses of the ,agency related to its oversight of the ,utility4 ,the amounts received by the ,director from assessments under this section shall not be construed to be ,government or public funds or appropriated money4 ,notwithstanding any other provision of law1 the amounts received by the ,director from assessments under this section shall not be subject to apportionment for the purpose of chapter #ae of title #ca1 ,united ,states ,code1 or under any other authority4 #caf4 ,civil and criminal liability 7a7 ,use of names 7#a7 ,in general ,except as expressly authorized by statute of the ,united ,states1 no person or organization 7except the ,repository1 ,utility1 and ,platform7 shall use the term ,national ,mortgage ,market ,utility1 ,common ,securitization ,platform1 or ,national ,mortgage ,data ,repository1 or such other name as the ,director may establish in the charter of the ,utility or any combination of words that appears to indicate that such use of the term conflicts with the operation of the ,utility or any function created herein4 ,no individual or organization shall use or display-- 7,a7 any sign1 device1 or insignia prescribed or approved by the ,utility for use of display by the ,utility2 7,b7 any copy1 reproduction or colorable imitation of any such sign1 device1 or insignia2 or 7,c7 any sign1 device or insignia reasonably calculated to convey the impression that it is a sign1 device or insignia used by the ,utility or prescribed by the ,utility contrary to policies or procedures of the ,utility prohibiting1 limiting or restricting such use by any individual or organization4 7#b7 ,relief ,the ,agency or ,utility may seek to enjoin or recover damages for any breach of this section and refer to the ,attorney ,general any matters that may constitute criminal activity for a breach of this section4 7b7 ,exclusive operation of the ,repository ,except as expressly authorized by statute of the ,united ,states1 no person or organization 7except the ,utility7 shall operate a national registry or repository of mortgage-related documents4 ,any ,state of the ,united ,states may operate a ,state registry or repository system1 subject to the laws of that ,state1 provided that any such ,state registry or repository system does not conflict with the ,repository or the purposes of this subtitle4 7c7 ,actions for breach ,in any action for breach of contract1 including breach of representation or warranty1 or breach of privacy related to data collected and maintained by the ,repository1 no prevailing party may recover more than an amount established by the ,director1 by regulation4 ,when issuing any such regulation1 the ,director shall take into consideration intentional1 willful1 reckless1 or negligent actions or omissions4 ,such regulations shall be reviewed not less frequently than annually1 and may be revised in the ,director's discretion4 #b ,standards for qualified securities #cba4 ,qualified securities ,for purposes of this subtitle1 the term qualified security means a security that-- 7#a7 is collateralized by a class1 or multiple classes1 of residential mortgages established under section #cbb7;a72 7#b7 is issued in accordance with a standard form securitization agreement under section #cbb7;b72 7#c7 is issued by a qualified issuer in accordance with section #cbb7;g72 7#d7 is issued through the ,platform2 and 7#e7 is not guaranteed1 in whole or in part1 by the ,united ,states ,government4 #cbb4 ,standards for qualified securities 7a7 ,standard mortgage classifications 7#a7 ,establishment of mortgage classifications ,the ,utility shall prescribe classifications for residential mortgages having various degrees of credit risk1 ranging from a classification of mortgages having little to no credit risk to a classification of mortgages having higher credit risk4 ,in prescribing such classifications the ,utility shall seek to allow for the pricing of credit risk1 allow for the trading of securities collateralized by each classification of mortgages established pursuant to this subsection in the forward market1 and maintain well-functioning liquid markets in securities collateralized by each of the classifications of mortgages established pursuant to this subsection4 7#b7 ,underwriting ,criteria ,for each classification of mortgages established under paragraph 7#a71 the ,utility shall establish standards for each of the following underwriting criteria3 7,a7 ,debt-to-,income ,ratio ,the ratio of the amount of the total monthly debt of the mortgagor to the amount of the monthly income of the mortgagor4 7,b7 ,loan-to-,value ,ratio ,the ratio of the principal obligation under the mortgage to the value of the residence subject to the mortgage1 at the time of mortgage origination4 7,c7 ,credit ,history ,information on the credit history of the mortgagor1 including credit scores of the mortgagor4 7,d7 ,loan ,documentation ,the extent of loan documentation and verification of the financial resources of the mortgagor used to qualify the mortgagor for the mortgage1 including any appraisal4 7,e7 ,occupancy ,whether the residence subject to the mortgage is occupied by the mortgagor4 7,f7 ,credit ,enhancement ,whether any mortgage insurance or other type of insurance or credit enhancement was obtained at the time of origination4 7,g7 ,loan ,payment ,terms 7i7 ,in general ,the terms of the mortgage that determine the magnitude and timing of payments due from the mortgagor1 including the term to maturity of the mortgage1 the frequency of payment1 the type of amortization1 any prepayment penalties1 and whether the interest rate is fixed or may vary4 7ii7 ,inclusion of #cj-,year ,fixed ,interest ,rate ,terms established under clause 7i7 shall include a #cj-year fixed interest rate mortgage4 7,h7 ,other ,such other underwriting criteria as the ,utility may establish1 consistent with the goals of this subtitle4 7#c7 ,definitions ,the ,utility shall1 for purposes of this subsection1 prescribe definitions for each of the following terms3 7,a7 ,mortgage ,the term mortgage1 which definition shall include only mortgages on residential properties4 7,b7 ,default ,the term default1 with respect to a mortgage4 7,c7 ,delinquency ,the term delinquency1 with respect to a mortgage4 7,d7 ,loan documentation ,the term loan documentation1 with respect to a mortgage4 7,e7 ,additional ,terms ,such other terms as the ,utility may establish4 7b7 ,standard ,form ,securitization ,agreements 7#a7 ,in general ,the ,utility shall develop1 adopt1 and publish standard form securitization agreements for eligible collateral4 7#b7 ,required ,content ,the standard form securitization agreements to be developed under paragraph 7#a7 shall include terms relating to-- 7,a7 pooling and servicing2 7,b7 purchase and sale2 7,c7 representations and warranties1 including representations and warranties as to compliance or conformity with standards established by the ,utility1 as appropriate2 7,d7 indemnification and remedies1 including principles of a repurchase program that will ensure an appropriate amount of risk retention under the representations and warranties set forth under subparagraph 7,c72 and 7,e7 the qualification1 responsibilities1 and duties of trustees4 7c7 ,registration with the ,repository ,the ,utility shall require that any mortgage-related document associated with eligible collateral for qualified securities be registered with the ,repository4 7d7 ,standards for ,servicing ,the ,utility shall develop1 adopt1 and publish-- 7#a7 servicing standards1 including for the modification1 restructuring1 or work-out of any mortgage that serves as collateral for a qualified security2 and 7#b7 a servicer succession plan1 which may include provisions for-- 7,a7 a specialty servicer that can replace the existing servicer if the performance of the mortgage pool deteriorates to specified levels2 and 7,b7 a plan to achieve consistency in servicing systems related to systematic note-taking1 consistent mailing addresses1 and other points of contact for borrowers to use1 among other items4 7e7 ,standards for ,servicer ,reporting ,the ,utility shall develop1 adopt1 and publish standards for the reporting obligations of servicers of any mortgage that serves as collateral for a qualified security4 7f7 ,standards for ,aggregators ,the ,utility may develop1 adopt1 and publish standards for aggregation of eligible collateral by entities1 institutions1 or companies other than an issuer4 ,notwithstanding any such standards developed by the ,utility1 any ,federal ,home ,loan ,bank may act as an aggregator and offer the service of aggregation to any member of such ,bank1 subject to regulations prescribed by the ,director4 7g7 ,standards for ,qualified ,issuers 7#a7 ,in ,general ,the ,utility shall develop1 adopt1 and publish standards for an issuer to qualify as a qualified issuer4 ,such standards shall only include-- 7,a7 the experience1 financial resources1 and integrity of the issuer and its principals1 including compliance history with ,federal and ,state laws2 7,b7 the adequacy of insurance and fidelity coverage of the issuer with respect to errors and omissions2 and 7,c7 a requirement that the issuer submit audited financial statements to the ,utility1 who shall make such statements publicly available through the ,utility's ,web site4 7#b7 ,application process 7,a7 ,in general ,the ,utility shall establish an application process for the qualification of issuers1 in such form and manner and requiring such information as the ,utility may prescribe1 in accordance with standards adopted under paragraph 7#a74 7,b7 ,approval ,the ,utility shall approve any application made pursuant to subparagraph 7,a7 unless the issuer does not meet the standards adopted under paragraph 7#a74 7,c7 ,publication ,the ,agency shall publish a list of newly qualified issuers in the ,federal ,register and the ,utility shall maintain an updated list of qualified issuers on the ,utility's ,web site4 7#c7 ,review and revocation of qualified status 7,a7 ,in ,general ,the ,utility may review the status of a qualified issuer if the ,utility is notified that a claim has been made against the issuer by a trustee with respect to a violation of a contractual term in a securitization document of the issuer4 7,b7 ,revocation 7i7 ,in general ,subject to subparagraph 7,c71 if the ,utility determines1 subject to the approval of the ,director1 in a review pursuant to subparagraph 7,a71 that an issuer no longer meets the standards for qualification1 the ,utility shall revoke the issuer's qualified status4 7ii7 ,construction ,the revocation of an issuer's qualified status under this subparagraph shall-- 7,i7 have no effect on the qualified status of any security issued before such revocation2 and 7,,ii7 not relieve the issuer of any obligation associated with any representation or warranty or any repurchase obligations related to any qualified security issued before such revocation4 7,c7 ,grace ,period ,the ,utility shall establish standards by which a qualified issuer who no longer meets the standards for qualification may remediate and return to meeting the standards1 without losing the issuer's qualified status4 7,d7 ,publication ,the ,agency shall publish a list of issuers who are no longer qualified in the ,federal ,register and the ,utility shall maintain an updated list of such issuers on the ,utility's ,web site4 7h7 ,standards for ,trustees 7#a7 ,in ,general ,there shall at all times be one or more trustee for each pool of mortgages that acts as collateral for a qualified security4 7#b7 ,rulemaking ,the ,director shall issue regulations regarding the qualifications of trustees under paragraph 7#a7 that shall1 to the extent practicable1 be consistent with the qualification provisions applicable to trustees under section #caj7;a7 of the ,trust ,indenture ,act of #aicd 7#ae ,u4,s4,c4 #gg;jjj7a774 7#c7 ,conflicts of ,interest ,the ,director shall issue conflict of interest regulations that apply to a qualified trustee4 ,such regulations shall1 to the extent practicable1 be consistent with those conflict of interest provisions applicable to an indenture trustee under section #caj7;b7 of the ,trust ,indenture ,act of #aicd 7#ae ,u4,s4,c4 #gg;jjj7b774 7#d7 ,reporting of ,claims ,any time a trustee brings a claim against a qualified issuer on behalf of investors with respect to a standard form securitization agreement1 the trustee shall notify the ,director of such claim4 7#e7 ,protection of ,investor ,rights ,for the purpose of protecting investor rights1 each trustee shall-- 7,a7 maintain a list of all investors 7beneficial owners7 in a qualified security2 7,b7 update such list from time to time2 7,c7 not make such list available to investors 7beneficial owners72 and 7,d7 act as a means to communicate information about the qualified security to investors 7beneficial owners7 and act as a means for investors 7beneficial owners7 to communicate with each other4 7#f7 ,no ,liability for ,certain ,communications ,a trustee shall not be liable for the content of any information provided to the trustee by an investor 7beneficial owner7 that the trustee communicates to another investor 7beneficial owner74 7#g7 ,investor 7,beneficial ,owner7 ,notification of ,trustee ,a person who becomes an investor 7beneficial owner7 in a qualified security shall promptly notify the trustee of such security of the change in ownership4 7i7 ,independent ,third ,party ,if the majority of investors 7beneficial owners7 in a pool of qualified securities chooses to hire an independent third party to act on behalf of the best interests of the investors 7beneficial owners71 such party shall-- 7#a7 be granted access to the loan documents for the mortgage loans backing such security and all servicing reports the servicer provides to investors 7beneficial owners7 or the trustee2 7#b7 be granted access to the list of investors 7beneficial owners7 maintained by the trustee1 on the condition that the independent third party will not make the list available to the investors 7beneficial owners72 and 7#c7 have the right1 on behalf of the investors 7beneficial owners71 to inform the trustee of such securities of any breach of the securitization agreement identified by the third party4 7j7 ,mandatory ,arbitration 7#a7 ,in general ,all disputes between an owner of a qualified security and the qualified issuer of such security relating to representations and warranties shall be subject to mandatory arbitration procedures established by the ,utility1 in accordance with current market practices4 7#b7 ,selection of ,arbitrator ,investors 7beneficial owners7 and issuers subject to a dispute described under paragraph 7#a7 shall have the right to agree on an independent arbitrator4 ,if the parties cannot agree on an independent arbitrator1 the ,utility shall select an independent arbitrator for the parties4 7#c7 ,reporting ,duty of ,arbitrator 7,a7 ,upon ,commencement ,the arbitrator shall provide the ,utility with notice upon commencement of any arbitration under this subsection4 7,b7 ,upon ,conclusion ,upon conclusion of any arbitration under this subsection1 the arbitrator shall provide the ,utility with-- 7i7 the decision reached by the arbitrator2 and 7ii7 the basis for the arbitrator's decision1 including any evidence or testimony received during the arbitration process4 7k7 ,data ,standards2 ,disclosure ,standards 7#a7 ,data ,standards ,the ,utility shall develop1 adopt1 and publish standard data definitions for all aspects of loan origination1 appraisals1 and servicing4 ,in developing such definitions1 the ,utility shall consider the data standard-setting work undertaken by the ,mortgage ,industry ,standards ,maintenance ,organization through the enterprises' ,uniform ,mortgage ,data ,program announced by the ,agency on ,may #bd1 #bjaj4 7#b7 ,disclosure ,standards ,the ,utility shall develop1 adopt1 and publish standards for disclosure of loan origination1 appraisal1 and servicing data1 including data required in subsection 7a77#b7 7relating to underwriting criteria7 for residential mortgage loans that comprise qualified securities1 and that allow for trading of qualified securities under this subtitle in a forward market4 7#c7 ,coordination ,in developing the data and disclosure standards required by this subsection1 the ,utility shall ensure that such standards are coordinated4 7#d7 ,privacy ,protections ,in prescribing the definitions and standards required under this subsection1 the ,utility shall take into consideration issues of consumer privacy and all statutes1 rules1 and regulations related to privacy of consumer credit information and personally identifiable information4 ,such standards shall expressly prohibit the identification of specific borrowers4 7#e7 ,consultation ,when reviewing any disclosure standards established under this subsection1 the ,director shall consult with the ,securities and ,exchange ,commission4 7l7 ,timing of issuance2 ,agency review2 authority ,to revise standards 7#a7 ,timing ,the ,director shall issue any regulations required by this section not later than the end of the #ab-month period beginning on the date of the enactment of this ,act4 ,the ,utility shall issue any definitions1 standards1 rules1 processes1 or procedures required by this section not later than the end of the #ab-month period beginning on the date of issuance of the charter by the ,director4 7#b7 ,agency review ,any definition1 standard1 rule1 process or procedure established by the ,utility shall be submitted to the ,director for review and approval prior to its implementation if1 in the ,director's discretion1 the ,director requires such submission4 ,any definition1 standard1 rule1 process or procedure that the ,director requires be submitted to the ,agency for review and approval shall be reviewed within three months of submission4 7#c7 ,authority to revise 7,a7 ,in general ,the ,utility may review1 revise1 and1 if revised1 re-publish any standard form securitization agreement or other definition1 standard1 rule1 process1 or procedure required to be developed by this subtitle if the ,utility determines review or revision to be necessary or appropriate to satisfy the goals of this subtitle4 7,b7 ,application of revisions ,any revisions made pursuant to subparagraph 7,a7 shall apply only to securitizations made after the date of such revision4 7m7 ,effect of ,conflict ,in the event a definition1 standard1 rule1 process1 or procedure established by the ,utility is in conflict with any definition1 standard1 rule1 process1 or procedure established by another ,federal department or agency1 the ,director shall consult with the other ,federal department or agency1 and provide prompt written notification to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives1 of the conflict4 7n7 ,public ,involvement ,in developing definitions1 standards1 rules1 processes1 and procedures required by this subtitle1 the ,utility shall work with market participants1 including servicers1 originators1 and mortgage investors1 and develop methods for gathering information and comment from such groups4 #cbc4 ,liability for misleading statements 7a7 ,in general ,any person who shall make or cause to be made any statement in any application1 report1 or document filed with the ,agency or ,utility pursuant to any provisions of this subtitle1 or any rule1 regulation1 or order thereunder1 which statement was at the time and in light of the circumstances under which it was made false or misleading with respect to any material fact1 or who shall omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading1 shall be liable to any person 7not knowing that such statement was false or misleading or of such omission7 who1 in reliance upon such statement or omission1 shall have purchased or sold a qualified security issued under the indenture to which such application1 report1 or document relates1 for damages caused by such reliance1 unless the person sued shall prove that such person acted in good faith and had no knowledge that such statement was false or misleading or of such omission4 ,a person seeking to enforce such liability may sue at law or in equity in any court of competent jurisdiction4 ,in any such suit the court may1 in its discretion1 require an undertaking for the payment of the costs of such suit and assess reasonable costs1 including reasonable attorneys' fees1 against either party litigant1 having due regard for the merits and good faith of the suit or defense4 ,no action shall be maintained to enforce any liability created under this section unless brought within one year after the discovery of the facts constituting the cause of action and within three years after such cause of action accrued4 7b7 ,rights and remedies under other laws ,the rights and remedies provided by this part shall be in addition to any and all other rights and remedies that may exist under the ,securities ,act of #aicc or the ,securities ,exchange ,act of #aicd or otherwise at law or in equity2 but no person permitted to maintain a suit for damages under the provisions of this subtitle shall recover1 through satisfaction of judgment in one or more actions1 a total amount in excess of the person's actual damages on account of the act complained of4 #cbd4 ,unlawful representations ,it shall be unlawful for any person in offering1 selling1 or issuing any qualified security pursuant to this subtitle to represent or imply in any manner whatsoever that any action or failure to act by the ,agency or ,utility in the administration of this subtitle means that the ,agency or ,utility has in any way passed upon the merits of1 or given approval to1 any trustee1 indenture1 or security1 or any transaction or transactions therein1 or that any such action or failure to act with regard to any statement or report files or examined by the ,agency or ,utility pursuant to this subtitle or any rule1 regulation1 or order thereunder1 has the effect of a finding by the ,agency or ,utility that such statement or report is true and accurate on its face or that it is not false or misleading4 #cbe4 ,contrary stipulations void ,any condition1 stipulation1 or provision binding any person to waive compliance with any provision of this subtitle or with any rule1 regulation1 or order thereunder shall be void4 #c ,national ,mortgage ,data ,repository #cca4 ,organization and operation 7a7 ,organization and operation ,under such regulations as the ,director may prescribe1 the ,utility shall organize and operate a national mortgage data repository 7,repository74 7b7 ,authorized activities ,in addition to organizing and operating the ,repository1 the ,utility shall-- 7#a7 establish and operate a repository for mortgage-related documents2 7#b7 establish standards for qualification of any depositor of mortgage-related documents to the ,repository2 7#c7 establish standards and procedures for submission of mortgage-related documents to the ,repository1 including required information and the type and format of information and data2 7#d7 establish procedures for validation of mortgage-related documents and the data contained in the ,repository2 7#e7 establish standards and procedures for acceptance of mortgage-related documents 7including electronic copies71 and notice of acceptance1 by the ,repository2 7#f7 establish standards and procedures for registration of any mortgage-related document with the ,repository1 including notice of registration and the assignment of a unique identifier2 7#g7 establish standards and procedures for recording the creation1 assignment1 or transfer of an interest in any registered mortgage-related document2 7#h7 establish standards and procedures for qualification of depositors and participants in the ,repository2 7#i7 establish procedures for proper demonstration of registration of mortgage-related documents with the ,repository and recordation of an interest by the holder of an interest in any such document1 subject to regulations issued by the ,director in accordance with section #ccb 7relating to legal effect of registration with the ,repository72 7#aj7 establish and maintain a catalog of the mortgage-related documents registered with the ,repository2 7#aa7 establish standards and procedures for disposition of mortgage-related documents1 including safekeeping1 long-term storage1 or destruction of paper documents2 7#ab7 establish standards and procedures for making data publicly available2 7#ac7 ensure that data collected and maintained by the ,repository are kept secure and protected against unauthorized disclosure1 including disclosure of personally identifiable information that is not otherwise available as part of any public record2 7#ad7 establish a process1 including notification from the public1 for identification and correction of incorrect information submitted to or maintained by the ,repository2 7#ae7 establish fees for registration of mortgage-related documents and maintenance and use of data1 and for the provision of other related services not inconsistent with the purposes of this subtitle2 and 7#af7 perform any other service or engage in any other activity that the ,director determines1 by regulation or order1 to be incidental to the activities enumerated in this subsection4 7c7 ,requirements on participants ,each participant shall-- 7#a7 comply with such requirements as may be set by the ,repository for using data maintained or created by the ,repository2 and 7#b7 use such designation as the ,repository may provide1 such as a unique identifier4 #ccb4 ,legal effect of registration with ,repository ,notwithstanding any provision of ,state or ,federal law to the contrary1 by proper demonstration of registration with the ,repository1 any holder of an interest in any mortgage-related note shall satisfy any requirement for demonstration of a right to act regarding such note or other registered data that exists in ,state or ,federal law1 including any obligation to produce or possess an original note4 ,the ,director shall provide for the establishment of procedures for proper demonstration of registration of any mortgage-related document and of an interest by the holder of an interest in any such document with the ,repository4 ,once registered with the ,repository1 such registration shall be a legal right enforceable in any judicial or nonjudicial process4 #ccc4 ,grants to ,states2 repayment 7a7 ,grants to ,states ,there is hereby authorized to be appropriated #ej1jjj1jjj to the ,director for the establishment of a fund to be administered by the ,agency for providing grants to ,states1 on application to the ,agency1 to facilitate participation in the ,repository by any depositor or participant or class of depositors or participants1 or any other person upon appropriate demonstration to the ,agency that such a grant would assist in the accomplishment of the purposes of this subtitle4 ,any such amounts appropriated and not granted by the ,agency within five years of the date of the enactment of this ,act shall be returned to the ,treasury of the ,united ,states4 7b7 ,repayment ,the ,director shall cause to be collected from the ,utility and deposit in the ,treasury of the ,united ,states an amount equal to the aggregate amount provided as grants to ,states pursuant to subsection 7a7 within the #aj-year period beginning on the date that the first grant is made pursuant to subsection 7a74 #ccd4 ,judicial review ,except as otherwise expressly provided under this part1 no person other than the ,director or the ,attorney ,general of the ,united ,states1 or any duly authorized representative of the ,director or the ,attorney ,general1 may proceed against the ,repository in any ,state or ,federal court4 ,the prohibition in the preceding sentence shall not apply to a civil action against the ,repository or any duly authorized agent thereof for breach of a contract1 including breach of a representation or warranty1 or breach of privacy related to data collected and maintained by the ,repository or any duly authorized agent thereof4 #cce4 ,transition provisions 7a7 ,in general ,the ,agency shall provide for a transition period to permit the efficient implementation of the provisions of this part4 ,such transition may include periods for testing1 early adoption1 and final mandatory adoption for all recorded mortgages4 7b7 ,electronic ,submissions ,the ,repository shall accept electronic submissions and paper-based documents submitted electronically subject to rules of the ,repository4 ,after the expiration of the #aj-year period that begins upon the date of the enactment of this ,act1 subject to an extension of such period for up to #e additional years if the ,director determines appropriate1 the ,repository shall require only electronic submission4 #d ,conforming amendments #cda4 ,conforming amendment to ,federal ,home ,loan ,bank ,act ,section #aa of the ,federal ,home ,loan ,bank ,act 7#ab ,u4,s4,c4 #adca7 is amended by adding at the end the following new subsection3 7m7 ,aggregation of loans originated by members ,any ,federal ,home ,loan ,bank may aggregate for securitization through the common securitization platform 7as such term is defined in section #cjc of the ,national ,mortgage ,market ,utility ,act of #bjac7 residential mortgage loans originated by any member of such ,bank1 pursuant to regulations issued by the ,director4 4 #cdb4 ,conforming amendments to the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act ,section #hjc7h77;,a7 of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #edfb7h77;,a77 is amended-- 7#a7 redesignating clause 7iv7 as clause 7v72 and 7#b7 inserting after clause 7iii7 the following new clause3 7iv7 ,the ,federal ,housing ,finance ,agency1 with respect to a designated financial market utility that is subject to the exclusive supervision of that ,agency pursuant to the ,national ,mortgage ,market ,utility ,act of #bjac4 4 #cdc4 ,conforming amendments to ,securities ,act of #aicc 7a7 ,exempted securities ,section #c7;a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;c7a77 is amended by adding at the end the following new paragraph3 7#ae7 ,any qualified security1 as such term is defined in section #cba of the ,national ,mortgage ,market ,utility ,act of #bjac4 4 7b7 ,removal of credit risk retention reference ,section #bg;,b of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #ggz-#b;a7 is amended by striking subsection 7d74 #cdd4 ,conforming amendments to title #ah1 ,united ,states ,code 7a7 ,false advertising ,section #gji of title #ah1 ,united ,states ,code1 is amended by inserting after a ,federal ,home ,loan ,bank2 or the following3 ,whoever uses the words ,national ,mortgage ,data ,repository or such other name as the ,director of the ,federal ,housing ,finance ,agency may establish in the charter of the repository or any combination of words that appears to indicate that such use of the term conflicts with the exclusive operation of the repository created by part #c of the ,national ,mortgage ,market ,utility ,act of #bjac as a business name or any part of a business name1 or falsely publishes1 advertises1 or represents by any device or symbol or other means reasonably calculated to convey the impression that he or it is the repository created by such part2 or4 7b7 ,fraud and false statements ,chapter #dg of title #ah1 ,united ,states ,code1 is amended-- 7#a7 by adding at the end the following new section3 #ajda4 ,information security2 false statements and concealment of facts related to the ,national ,mortgage ,market ,utility ,act of #bjac ,whoever1 with regard to any mortgage-related document 7as such term is defined in section #cjc of the ,national ,mortgage ,market ,utility ,act of #bjac7 or the registration of any document or any interest in any such document pursuant to that ,act1 makes any false statement or representation of fact1 knowing it to be false1 or knowingly conceals1 covers up or fails to disclose any material fact the disclosure of which is required by such ,act or regulation1 shall be fined under this title1 or imprisoned not more than five years1 or both4 2 and 7#b7 in the table of contents for such chapter1 by inserting after the item relating to section #ajdj the following3 #ajda4 ,information security2 false statements and concealment of facts related to the ,national ,mortgage ,market ,utility ,act of #bjac4 4 ,b ,covered ,bonds #cea4 ,short title ,this subtitle may be cited as the ,united ,states ,covered ,bond ,act of #bjac4 #ceb4 ,definitions ,for purposes of this subtitle1 the following definitions shall apply3 7#a7 ,ancillary asset ,the term ancillary asset means-- 7,a7 any interest rate or currency swap associated with #a or more eligible assets1 substitute assets1 or other assets in a cover pool2 7,b7 any credit enhancement or liquidity arrangement associated with #a or more eligible assets1 substitute assets1 or other assets in a cover pool2 7,c7 any guarantee1 letter-of-credit right1 or other secondary obligation that supports any payment or performance of #a or more eligible assets1 substitute assets1 or other assets in a cover pool2 and 7,d7 any proceeds of1 or other property incident to1 #a or more eligible assets1 substitute assets1 or other assets in a cover pool4 7#b7 ,corporation ,the term ,corporation means the ,federal ,deposit ,insurance ,corporation4 7#c7 ,cover pool ,the term cover pool means a dynamic pool of assets that is comprised of-- 7,a7 in the case of any eligible issuer described in subparagraph 7,a71 7,b71 or 7,c7 of paragraph 7#i7-- 7i7 #a or more eligible assets from a single eligible asset class2 and 7ii7 #a or more substitute assets or ancillary assets2 and 7,b7 in the case of any eligible issuer described in paragraph 7#i77;,d7-- 7i7 the covered bonds issued by each sponsoring eligible issuer2 and 7ii7 #a or more substitute assets or ancillary assets4 7#d7 ,covered bond ,the term covered bond means any recourse debt obligation of an eligible issuer that-- 7,a7 has an original term to maturity of not less than #a year2 7,b7 is secured by a perfected security interest in or other perfected lien on a cover pool that is owned directly or indirectly by the issuer of the obligation2 7,c7 is issued under a covered bond program that has been approved by the applicable covered bond regulator2 7,d7 is identified in a register of covered bonds that is maintained by the ,secretary2 and 7,e7 is not a deposit 7as defined in section #c7l7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7l7774 7#e7 ,covered bond program ,the term covered bond program means any program of an eligible issuer under which1 on the security of a single cover pool1 #a or more series of covered bonds may be issued4 7#f7 ,covered bond regulator ,the term covered bond regulator means-- 7,a7 for any eligible issuer that is subject to the jurisdiction of an appropriate ,federal banking agency 7as defined in section #c7q7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7q7771 the appropriate ,federal banking agency2 7,b7 for any eligible issuer that is described in paragraph 7#i77;,d71 that is not subject to the jurisdiction of an appropriate ,federal banking agency1 and that is sponsored by only #a eligible issuer1 the covered bond regulator for the sponsor2 7,c7 for any eligible issuer that is described in paragraph 7#i77;,d71 that is not subject to the jurisdiction of an appropriate ,federal banking agency1 and that is sponsored by more than #a eligible issuer1 the covered bond regulator for the sponsor whose covered bonds constitute the largest share of the cover pool of the issuer2 and 7,d7 for any other eligible issuer that is not subject to the jurisdiction of an appropriate ,federal banking agency1 the ,secretary4 7#g7 ,eligible asset ,the term eligible asset means-- 7,a7 in the case of the residential mortgage asset class1 any first-lien mortgage loan that-- 7i7 is secured by #a- to #d-;family residential property2 and 7ii7 is not made1 insured1 or guaranteed by the ,government2 7,b7 in the case of the commercial mortgage asset class1 any commercial mortgage loan 7including any multifamily mortgage loan72 7,c7 in the case of the public sector asset class-- 7i7 any security issued by a ,state1 municipality1 or other governmental authority2 7ii7 any loan made to a ,state1 municipality1 or other governmental authority2 and 7iii7 any loan1 security1 or other obligation that is insured or guaranteed1 in full or substantially in full1 by the full faith and credit of the ,united ,states ,government 7whether or not such loan1 security1 or other obligation is also part of another eligible asset class72 7,d7 in the case of the auto asset class1 any auto loan or lease2 7,e7 in the case of the student loan asset class1 any student loan 7whether guaranteed or nonguaranteed72 7,f7 in the case of the credit or charge card asset class1 any extension of credit to a person under an open-end credit plan2 7,g7 in the case of the small business asset class1 any loan that is made or guaranteed under a program of the ,small ,business ,administration2 and 7,h7 in the case of any other eligible asset class1 any asset designated by the ,secretary1 by rule and in consultation with the covered bond regulators1 as an eligible asset for purposes of such class4 7#h7 ,eligible asset class ,the term eligible asset class means-- 7,a7 a residential mortgage asset class2 7,b7 a commercial mortgage asset class2 7,c7 a public sector asset class2 7,d7 an auto asset class2 7,e7 a student loan asset class2 7,f7 a credit or charge card asset class2 7,g7 a small business asset class2 and 7,h7 any other eligible asset class designated by the ,secretary1 by rule and in consultation with the covered bond regulators4 7#i7 ,eligible issuer ,the term eligible issuer means-- 7,a7 any insured depository institution and any subsidiary of such institution2 7,b7 any bank holding company1 any savings and loan holding company1 and any subsidiary of any of such companies2 7,c7 any nonbank financial company 7as defined in section #ajb7;a77#d7 of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #ecaa7;a77#d777 that is supervised by the ,board of ,governors of the ,federal ,reserve ,system under section #aac of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #ecbc71 including any intermediate holding company supervised as a nonbank financial company1 and any subsidiary of such a nonbank financial company2 and 7,d7 any issuer that is sponsored by #a or more eligible issuers for the sole purpose of issuing covered bonds on a pooled basis4 7#aj7 ,oversight program ,the term oversight program means the covered bond regulatory oversight program established under section #cec7;a74 7#aa7 ,secretary ,the term ,secretary means the ,secretary of the ,department of the ,treasury4 7#ab7 ,substitute asset ,the term substitute asset means-- 7,a7 cash2 7,b7 any direct obligation of the ,united ,states ,government1 and any security or other obligation whose full principal and interest are insured or guaranteed by the full faith and credit of the ,united ,states ,government2 7,c7 any direct obligation of a ,united ,states ,government corporation or ,government-sponsored enterprise of the highest credit quality1 and any other security or other obligation of the highest credit quality whose full principal and interest are insured or guaranteed by such corporation or enterprise1 except that the outstanding principal amount of these obligations in any cover pool may not exceed an amount equal to #bj percent of the outstanding principal amount of all assets in the cover pool without the approval of the applicable covered bond regulator2 7,d7 any overnight investment in ,federal funds2 7,e7 any other substitute asset designated by the ,secretary1 by rule and in consultation with the covered bond regulators2 and 7,f7 any deposit account or securities account into which only an asset described in subparagraph 7,a71 7,b71 7,c71 7,d71 or 7,e7 may be deposited or credited4 #cec4 ,regulatory oversight of covered bond programs established 7a7 ,establishment 7#a7 ,in general ,not later than #ahj days after the date of the enactment of this ,act1 the ,secretary shall1 by rule and in consultation with the covered bond regulators1 establish a covered bond regulatory oversight program that provides for-- 7,a7 covered bond programs to be evaluated according to reasonable and objective standards in order to be approved under paragraph 7#b71 including any additional eligibility standards for eligible assets and any other criteria determined appropriate by the ,secretary to further the purposes of this subtitle2 7,b7 covered bond programs to be maintained in a manner that is consistent with this subtitle and safe and sound asset-liability management and other financial practices2 and 7,c7 any estate created under section #ced to be administered in a manner that is consistent with maximizing the value and the proceeds of the related cover pool in a resolution under this subtitle4 7#b7 ,approval of each covered bond program 7,a7 ,in general ,a covered bond shall be subject to this subtitle only if the covered bond is issued by an eligible issuer under a covered bond program that is approved by the applicable covered bond regulator4 7,b7 ,approval process ,each covered bond regulator shall apply the standards established by the ,secretary under the oversight program to evaluate a covered bond program that has been submitted by an eligible issuer for approval4 ,each covered bond regulator also shall take into account relevant supervisory factors1 including safety and soundness considerations1 in evaluating a covered bond program that has been submitted for approval4 ,each covered bond regulator1 promptly after approving a covered bond program1 shall provide the ,secretary with the name of the covered bond program1 the name of the eligible issuer1 and all other information reasonably requested by the ,secretary in order to update the registry under paragraph 7#c77;,a74 ,each eligible issuer1 promptly after issuing a covered bond under an approved covered bond program1 shall provide the ,secretary with all information reasonably requested by the ,secretary in order to update the registry under paragraph 7#c77;,b74 7,c7 ,existing covered bond programs ,a covered bond regulator may approve a covered bond program that is in existence on the date of the enactment of this ,act4 ,upon such approval1 each covered bond under the covered bond program shall be subject to this subtitle1 regardless of when the covered bond was issued4 7,d7 ,multiple covered bond programs permitted ,an eligible issuer may have more than #a covered bond program4 7,e7 ,cease and desist authority ,the applicable covered bond regulator may direct an eligible issuer to cease issuing covered bonds under an approved covered bond program if the covered bond program is not maintained in a manner that is consistent with this subtitle and the oversight program and if1 after notice that is reasonable under the circumstances1 the issuer does not remedy all deficiencies identified by the applicable covered bond regulator4 7,f7 ,cap on the amount of outstanding covered bonds 7i7 ,in general ,with respect to each eligible issuer that submits a covered bond program for approval1 the applicable covered bond regulator shall set1 consistent with safety and soundness considerations and the financial condition of the eligible issuer1 the maximum amount1 as a percentage of the eligible issuer's total assets1 of outstanding covered bonds that the eligible issuer may issue4 7ii7 ,review of cap ,the applicable covered bond regulator may1 not more frequently than quarterly1 review the percentage set under clause 7i7 and1 if safety and soundness considerations or the financial condition of the eligible issuer has changed1 increase or decrease such percentage4 ,any decrease made pursuant to this clause shall have no effect on existing covered bonds issued by the eligible issuer4 7#c7 ,registry ,under the oversight program1 the ,secretary shall maintain a registry that is published on a ,web site available to the public and that1 for each covered bond program approved by a covered bond regulator1 contains-- 7,a7 the name of the covered bond program1 the name of the eligible issuer1 and all other information that the ,secretary considers necessary to adequately identify the covered bond program and the eligible issuer2 and 7,b7 all information that the ,secretary considers necessary to adequately identify all outstanding covered bonds issued under the covered bond program 7including the reports described in paragraphs 7#c7 and 7#d7 of subsection 7b774 7#d7 ,fees ,each covered bond regulator may levy1 on the issuers of covered bonds under the primary supervision of such covered bond regulator1 reasonably apportioned fees that such covered bond regulator considers necessary1 in the aggregate1 to defray the costs of such covered bond regulator carrying out the provisions of this subtitle4 ,such funds shall not be construed to be ,government funds or appropriated monies and shall not be subject to apportionment for purposes of chapter #ae of title #ca1 ,united ,states ,code1 or any other provision of law4 7b7 ,minimum over-,collateralization requirements 7#a7 ,requirements established ,the ,secretary1 by rule and in consultation with the covered bond regulators1 shall establish minimum over-collateralization requirements for covered bonds backed by each of the eligible asset classes4 ,the minimum over-collateralization requirements shall be designed to ensure that sufficient eligible assets and substitute assets are maintained in the cover pool to satisfy all principal and interest payments on the covered bonds when due through maturity and shall be based on the credit1 collection1 and interest rate risks 7excluding the liquidity risks7 associated with the eligible asset class4 7#b7 ,asset coverage test ,the eligible assets and the substitute assets in any cover pool shall be required1 in the aggregate1 to meet at all times the applicable minimum over-collateralization requirements4 7#c7 ,monthly reporting ,on a monthly basis1 each issuer of covered bonds shall submit a report on whether the cover pool that secures the covered bonds meets the applicable minimum over-collateralization requirements to-- 7,a7 the ,secretary2 7,b7 the applicable covered bond regulator2 7,c7 the applicable indenture trustee2 7,d7 the applicable covered bondholders2 and 7,e7 the applicable independent asset monitor4 7#d7 ,independent asset monitor 7,a7 ,appointment ,each issuer of covered bonds shall appoint the indenture trustee for the covered bonds1 or another unaffiliated entity1 as an independent asset monitor for the applicable cover pool4 7,b7 ,duties ,an independent asset monitor appointed under subparagraph 7,a7 shall1 on an annual or other more frequent periodic basis determined by the ,secretary under the oversight program-- 7i7 verify whether the cover pool meets the applicable minimum over-collateralization requirements2 and 7ii7 report to the ,secretary1 the applicable covered bond regulator1 the applicable indenture trustee1 and the applicable covered bondholders on whether the cover pool meets the applicable minimum over-collateralization requirements4 7#e7 ,no loss of status ,covered bonds shall remain subject to this subtitle regardless of whether the applicable cover pool ceases to meet the applicable minimum over-collateralization requirements4 7#f7 ,failure to meet requirements 7,a7 ,in general ,if a cover pool fails to meet the applicable minimum over-collateralization requirements1 and if the failure is not cured within the time specified in the related transaction documents1 the failure shall be an uncured default for purposes of section #ced7;a74 7,b7 ,notice required ,an issuer of covered bonds shall promptly give the ,secretary and the applicable covered bond regulator written notice if the cover pool securing the covered bonds fails to meet the applicable minimum over-collateralization requirements1 if the failure is cured within the time specified in the related transaction documents1 or if the failure is not so cured4 7c7 ,requirements for eligible assets 7#a7 ,requirements 7,a7 ,loans ,a loan shall not qualify as an eligible asset for so long as the loan is delinquent for more than #fj consecutive days4 7,b7 ,securities ,a security shall not qualify as an eligible asset for so long as the security does not meet any credit-quality requirement under this subtitle4 7,c7 ,origination ,an asset shall not qualify as an eligible asset if the asset was not originated in compliance with any rule or supervisory guidance of a ,federal agency applicable to the asset at the time of origination4 7,d7 ,no double pledge ,an asset shall not qualify as an eligible asset for so long as the asset is subject to a prior perfected security interest or other prior perfected lien that has been granted in an unrelated transaction4 ,nothing in this subtitle shall affect such a prior perfected security interest or other prior perfected lien1 and the rights of such lien holders4 7#b7 ,failure to meet requirements ,subject to paragraph 7#a77;,d71 if an asset in a cover pool does not satisfy any applicable requirement described in paragraph 7#a7 or any other applicable standard or criterion described in this subtitle1 the oversight program1 or the related transaction documents1 the asset shall not qualify as an eligible asset for purposes of the asset coverage test described in subsection 7b77#b74 ,a disqualified asset shall remain in the cover pool unless and until removed by the issuer in compliance with the provisions of this subtitle1 the oversight program1 and the related transaction documents4 ,no disqualified asset may be removed from the cover pool after an estate has been created for the related covered bond program under section #ced7;b77#a7 or #ced7;c77#b71 except in connection with the management of the cover pool under section #ced7;d77#a77;,e74 7d7 ,other requirements 7#a7 ,books and records of issuer ,each issuer of covered bonds shall clearly mark its books and records to identify the assets that comprise the cover pool securing the covered bonds4 7#b7 ,schedule of eligible assets and substitute assets ,each issuer of covered bonds shall deliver to the applicable indenture trustee and the applicable independent asset monitor1 on at least a monthly basis1 a schedule that identifies all eligible assets and substitute assets in the cover pool securing the covered bonds4 7#c7 ,single eligible asset class ,no cover pool described in section #ceb7c77;,a7 may include eligible assets from more than #a eligible asset class4 ,no cover poll described in section #b7c77;,b7 may include covered bonds backed by more than #a eligible asset class4 #ced4 ,resolution upon default or insolvency 7a7 ,uncured default defined ,for purposes of this section1 the term uncured default means a default on a covered bond that has not been cured within the time1 if any1 specified in the related transaction documents4 7b7 ,default on covered bonds prior to conservatorship1 receivership1 liquidation1 or bankruptcy 7#a7 ,creation of separate estate ,if an uncured default occurs on a covered bond before the issuer of the covered bond enters conservatorship1 receivership1 liquidation1 or bankruptcy1 an estate shall be immediately and automatically created by operation of law and shall exist and be administered separate and apart from the issuer or any subsequent conservatorship1 receivership1 liquidating agency1 or estate in bankruptcy for the issuer or any other assets of the issuer4 ,a separate estate shall be created for each affected covered bond program4 7#b7 ,assets and liabilities of estate ,any estate created under paragraph 7#a7 shall be comprised of the cover pool 7including over-collateralization in the cover pool7 that secures the covered bond4 ,the cover pool shall be immediately and automatically released to and held by the estate free and clear of any right1 title1 interest1 or claim of the issuer or any conservator1 receiver1 liquidating agent1 or trustee in bankruptcy for the issuer or any other assets of the issuer4 ,the estate shall be fully liable on the covered bond and all other covered bonds and related obligations of the issuer 7including obligations under related derivative transactions7 that are secured by a perfected security interest in or other perfected lien on the cover pool when the estate is created4 ,the estate shall not be liable on any obligation of the issuer that is not secured by a perfected security interest in or other perfected lien on the cover pool when the estate is created4 ,no conservator1 receiver1 liquidating agent1 or trustee in bankruptcy for the issuer may charge or assess the estate for any claim of the conservator1 receiver1 liquidating agent1 or trustee in bankruptcy or the conservatorship1 receivership1 liquidating agency1 or estate in bankruptcy and may not obtain or perfect a security interest in or other lien on the cover pool to secure such a claim4 7#c7 ,retention of claims ,any holder of a covered bond or related obligation for which an estate has become liable under paragraph 7#b7 shall retain a claim against the issuer for any deficiency with respect to the covered bond or related obligation4 ,if the issuer enters conservatorship1 receivership1 liquidation1 or bankruptcy1 any contingent claim for such a deficiency shall be allowed as a provable claim in the conservatorship1 receivership1 liquidating agency1 or bankruptcy case4 ,the contingent claim shall be estimated by the conservator1 receiver1 liquidating agent1 or bankruptcy court for purposes of allowing the claim as a provable claim if awaiting the fixing of the contingent claim would unduly delay the resolution of the conservatorship1 receivership1 liquidating agency1 or bankruptcy case4 7#d7 ,residual interest 7,a7 ,issuance of residual interest ,upon the creation of an estate under paragraph 7#a71 a residual interest in the estate shall be immediately and automatically issued by operation of law to the issuer4 7,b7 ,nature of residual interest ,the residual interest under subparagraph 7,a7 shall-- 7i7 be an exempted security as described in section #cee2 7ii7 represent the right to any surplus from the cover pool after the covered bonds and all other liabilities of the estate have been fully and irrevocably paid2 and 7iii7 be evidenced by a certificate executed by the trustee of the estate4 7#e7 ,obligations of issuer 7,a7 ,in general ,after the creation of an estate under paragraph 7#a71 the issuer shall-- 7i7 transfer to or at the direction of the trustee for the estate all property of the estate that is in the possession or under the control of the issuer1 including all tangible or electronic books1 records1 files1 and other documents or materials relating to the assets and liabilities of the estate2 and 7ii7 at the election of the trustee or a servicer or administrator for the estate1 continue servicing the applicable cover pool for #abj days after the creation of the estate in return for a fair-market-value fee1 as determined by the trustee in consultation with the applicable covered bond regulator1 that shall be payable from the estate as an administrative expense4 7,b7 ,obligations absolute ,neither the issuer1 whether acting as debtor in possession or in any other capacity1 nor any conservator1 receiver1 liquidating agent1 or trustee in bankruptcy for the issuer or any other assets of the issuer may disaffirm1 repudiate1 or reject the obligation to turn over property or to continue servicing the cover pool as provided in subparagraph 7,a74 7c7 ,default on covered bonds upon conservatorship1 receivership1 liquidation1 or bankruptcy 7#a7 ,corporation conservatorship or receivership 7,a7 ,in general ,if the ,corporation is appointed as conservator or receiver for an issuer of covered bonds before an uncured default results in the creation of an estate under subsection 7b71 the ,corporation as conservator or receiver shall have an exclusive right1 during the #a-year period beginning on the date of the appointment1 to transfer any cover pool owned by the issuer in its entirety1 together with all covered bonds and related obligations that are secured by a perfected security interest in or other perfected lien on the cover pool1 to another eligible issuer that meets all conditions and requirements specified in the related transaction documents4 ,the ,corporation as conservator or receiver may not remove any asset from the cover pool1 except to the extent otherwise agreed by a transferee that has assumed the covered bond program pursuant to subparagraph 7,c74 7,b7 ,obligations during #a-year period ,during the #a-year period described in subparagraph 7,a71 the ,corporation as conservator or receiver shall fully and timely satisfy all monetary and nonmonetary obligations of the issuer under all covered bonds and the related transaction documents and shall fully and timely cure all defaults by the issuer 7other than its conservatorship or receivership7 under the applicable covered bond program1 in each case1 until the earlier of-- 7i7 the transfer of the applicable covered bond program to another eligible issuer as provided in subparagraph 7,a72 or 7ii7 the delivery to the ,secretary1 the applicable covered bond regulator1 the applicable indenture trustee1 and the applicable covered bondholders of a written notice from the ,corporation as conservator or receiver electing to cease further performance under the applicable covered bond program4 7,c7 ,assumption by transferee ,if the ,corporation as conservator or receiver transfers a covered bond program to another eligible issuer within the #a-year period as provided in subparagraph 7,a71 the transferee shall take ownership of the applicable cover pool and shall become fully liable on all covered bonds and related obligations of the issuer that are secured by a perfected security interest in or other perfected lien on the cover pool4 7#b7 ,other circumstances ,an estate shall be immediately and automatically created by operation of law and shall exist and be administered separate and apart from an issuer of covered bonds and any conservatorship1 receivership1 liquidating agency1 or estate in bankruptcy for the issuer or any other assets of the issuer1 if-- 7,a7 a conservator1 receiver1 liquidating agent1 or trustee in bankruptcy1 other than the ,corporation1 is appointed for the issuer before an uncured default results in the creation of an estate under subsection 7b72 or 7,b7 in the case of the appointment of the ,corporation as conservator or receiver as described in paragraph 7#a77;,a71 the ,corporation as conservator or receiver-- 7i7 does not complete the transfer of the applicable covered bond program to another eligible issuer within the #a-year period as provided in paragraph 7#a77;,a72 7ii7 delivers to the ,secretary1 the applicable covered bond regulator1 the applicable indenture trustee1 and the applicable covered bondholders a written notice electing to cease further performance under the applicable covered bond program2 or 7iii7 fails to fully and timely satisfy all monetary and nonmonetary obligations of the issuer under the covered bonds and the related transaction documents or to fully and timely cure all defaults by the issuer 7other than its conservatorship or receivership7 under the applicable covered bond program4 ,a separate estate shall be created for each affected covered bond program4 7#c7 ,assets and liabilities of estate ,any estate created under paragraph 7#b7 shall be comprised of the cover pool 7including over-collateralization in the cover pool7 that secures the covered bonds4 ,the cover pool shall be immediately and automatically released to and held by the estate free and clear of any right1 title1 interest1 or claim of the issuer or any conservator1 receiver1 liquidating agent1 or trustee in bankruptcy for the issuer or any other assets of the issuer4 ,the estate shall be fully liable on the covered bonds and all other covered bonds and related obligations of the issuer 7including obligations under related derivative transactions7 that are secured by a perfected security interest in or other perfected lien on the cover pool when the estate is created4 ,the estate shall not be liable on any obligation of the issuer that is not secured by a perfected security interest in or other perfected lien on the cover pool when the estate is created4 ,no conservator1 receiver1 liquidating agent1 or trustee in bankruptcy for the issuer may charge or assess the estate for any claim of the conservator1 receiver1 liquidating agent1 or trustee in bankruptcy or the conservatorship1 receivership1 liquidating agency1 or estate in bankruptcy and may not obtain or perfect a security interest in or other lien on the cover pool to secure such a claim4 7#d7 ,contingent claim ,any contingent claim against an issuer for a deficiency with respect to a covered bond or related obligation for which an estate has become liable under paragraph 7#c7 shall be allowed as a provable claim in the conservatorship1 receivership1 liquidating agency1 or bankruptcy case for the issuer4 ,the contingent claim shall be estimated by the conservator1 receiver1 liquidating agent1 or bankruptcy court for purposes of allowing the claim as a provable claim if awaiting the fixing of the contingent claim would unduly delay the resolution of the conservatorship1 receivership1 liquidating agency1 or bankruptcy case4 7#e7 ,residual interest 7,a7 ,issuance of residual interest ,upon the creation of an estate under paragraph 7#b71 and regardless of whether any contingent claim described in paragraph 7#d7 becomes fixed or is estimated1 a residual interest in the estate shall be immediately and automatically issued by operation of law to the conservator1 receiver1 liquidating agent1 or trustee in bankruptcy for the issuer4 7,b7 ,nature of residual interest ,the residual interest under subparagraph 7,a7 shall-- 7i7 be an exempted security as described in section #cee2 7ii7 represent the right to any surplus from the cover pool after the covered bonds and all other liabilities of the estate have been fully and irrevocably paid2 and 7iii7 be evidenced by a certificate executed by the trustee of the estate4 7#f7 ,obligations of issuer 7,a7 ,in general ,after the creation of an estate under paragraph 7#b71 the issuer and its conservator1 receiver1 liquidating agent1 or trustee in bankruptcy shall-- 7i7 transfer to or at the direction of the trustee for the estate all property of the estate that is in the possession or under the control of the issuer or its conservator1 receiver1 liquidating agent1 or trustee in bankruptcy1 including all tangible or electronic books1 records1 files1 and other documents or materials relating to the assets and liabilities of the estate2 and 7ii7 at the election of the trustee or a servicer or administrator for the estate1 continue servicing the applicable cover pool for #abj days after the creation of the estate in return for a fair-market-value fee1 as determined by the trustee in consultation with the applicable covered bond regulator1 that shall be payable from the estate as an administrative expense4 7,b7 ,obligations absolute ,neither the issuer1 whether acting as debtor in possession or in any other capacity1 nor any conservator1 receiver1 liquidating agent1 or trustee in bankruptcy for the issuer or any other assets of the issuer may disaffirm1 repudiate1 or reject the obligation to turn over property or to continue servicing the cover pool as provided in subparagraph 7,a74 7d7 ,administration and resolution of estates 7#a7 ,trustee1 servicer1 and administrator 7,a7 ,in general ,upon the creation of any estate under subsection 7b77#a7 or 7c77#b71 the applicable covered bond regulator shall-- 7i7 appoint the trustee for the estate2 7ii7 appoint #a or more servicers or administrators for the cover pool held by the estate2 and 7iii7 give the ,secretary1 the applicable indenture trustee1 the applicable covered bondholders1 and the owner of the residual interest written notice of the creation of the estate4 7,b7 ,terms and conditions of appointment ,all terms and conditions of any appointment under paragraph 7#a71 including the terms and conditions relating to compensation1 shall conform to the requirements of this subtitle and the oversight program and otherwise shall be determined by the applicable covered bond regulator4 7,c7 ,qualification ,the applicable covered bond regulator may require the trustee or any servicer or administrator for an estate to post in favor of the ,united ,states1 for the benefit of the estate1 a bond that is conditioned on the faithful performance of the duties of the trustee or the servicer or administrator4 ,the covered bond regulator shall determine the amount of any bond required under this subparagraph and the sufficiency of the surety on the bond4 ,a proceeding on a bond required under this subparagraph may not be commenced after two years after the date on which the trustee or the servicer or administrator was discharged4 7,d7 ,powers and duties of trustee ,the trustee for an estate is the representative of the estate and1 subject to the provisions of this subtitle1 has capacity to sue and be sued4 ,the trustee shall-- 7i7 administer the estate in compliance with this subtitle1 the oversight program1 and the related transaction documents2 7ii7 be accountable for all property of the estate that is received by the trustee2 7iii7 make a final report and file a final account of the administration of the estate with the applicable covered bond regulator2 and 7iv7 after the estate has been fully administered1 close the estate4 7,e7 ,powers and duties of servicer or administrator ,any servicer or administrator for an estate-- 7i7 shall-- 7,i7 collect1 realize on 7by liquidation or other means71 and otherwise manage the cover pool held by the estate for the purpose of winding down the related cover bond program in compliance with this subtitle1 the oversight program1 and the related transaction documents and in a manner consistent with maximizing the value and the proceeds of the cover pool2 7,,ii7 deposit or invest all proceeds and funds received in compliance with this subtitle1 the oversight program1 and the related transaction documents and in a manner consistent with maximizing the net return to the estate1 taking into account the safety of the deposit or investment2 and 7,,iii7 apply1 or direct the trustee for the estate to apply1 all proceeds and funds received and the net return on any deposit or investment to make distributions in compliance with paragraphs 7#c7 and 7#d72 7ii7 may borrow funds or otherwise obtain credit1 for the benefit of the estate1 in compliance with paragraph 7#b7 on a secured or unsecured basis and on a priority1 pari passu1 or subordinated basis2 7iii7 shall1 at the times and in the manner required by the applicable covered bond regulator1 submit to the covered bond regulator1 the ,secretary1 the applicable indenture trustee1 the applicable covered bondholders1 the owner of the residual interest1 and any other person designated by the covered bond regulator1 reports that describe the activities of the servicer or administrator on behalf of the estate1 the performance of the cover pool held by the estate1 and distributions made by the estate2 and 7iv7 shall assist the trustee in preparing the final report and the final account of the administration of the estate4 7,f7 ,supervision of trustee1 servicer1 and administrator ,the applicable covered bond regulator shall supervise the trustee and any servicer or administrator for an estate4 ,the covered bond regulator shall require that all reports submitted under subparagraph 7,e77iii7 do not contain any untrue statement of a material fact and do not omit to state a material fact necessary in order to make the statements made1 in light of the circumstances under which they are made1 not misleading4 7,g7 ,removal and replacement of trustee1 servicer1 and administrator ,if the covered bond regulator determines that it is in the best interests of an estate1 the covered bond regulator may remove or replace the trustee or any servicer or administrator for the estate4 ,the removal of the trustee or any servicer or administrator does not abate any pending action or proceeding involving the estate1 and any successor or other trustee1 servicer1 or administrator shall be substituted as a party in the action or proceeding4 7,h7 ,professionals ,the trustee or any servicer or administrator for an estate may employ #a or more attorneys1 accountants1 appraisers1 auctioneers1 or other professional persons to represent or assist the trustee or the servicer or administrator in carrying out its duties4 ,the employment of any professional person and all terms and conditions of employment1 including the terms and conditions relating to compensation1 shall conform to the requirements of this subtitle and the oversight program and otherwise shall be subject to the approval of the applicable covered bond regulator4 7,i7 ,approved fees and expenses ,unless otherwise provided in the applicable terms and conditions of appointment or employment1 all approved fees and expenses of the trustee1 any servicer or administrator1 or any professional person employed by the trustee or any servicer or administrator shall be payable from the estate as administrative expenses4 7,j7 ,actions by or on behalf of estate ,the trustee or any servicer or administrator for an estate may commence or continue judicial1 administrative1 or other actions1 in the name of the estate or in its own name on behalf of the estate1 for the purpose of collecting1 realizing on1 or otherwise managing the cover pool held by the estate or exercising its other powers or duties on behalf of the estate4 7,k7 ,actions against estate ,no court may issue an attachment or execution on any property of an estate4 ,except at the request of the applicable covered bond regulator or as otherwise provided in this subparagraph or subparagraph 7,j71 no court may take any action to restrain or affect the resolution of an estate under this subtitle4 ,no person 7including the applicable indenture trustee and any applicable covered bondholder7 may commence or continue any judicial1 administrative1 or other action against the estate1 the trustee1 or any servicer or administrator or take any other act to affect the estate1 the trustee1 or any servicer or administrator that is not expressly permitted by this subtitle1 the oversight program1 and the related transaction documents1 except for a judicial or administrative action to compel the release of funds that-- 7i7 are available to the estate2 7ii7 are permitted to be distributed under this subtitle and the oversight program2 and 7iii7 are permitted and required to be distributed under the related transaction documents and any contracts executed by or on behalf of the estate4 7,l7 ,sovereign immunity ,except in connection with a guarantee provided under paragraph 7#d7 or any other contract executed by the applicable covered bond regulator under this section #ced1 the ,secretary and the covered bond regulator shall be entitled to sovereign immunity in carrying out the provisions of this subtitle4 7#b7 ,borrowings and credit 7,a7 ,in general ,any servicer or administrator for an estate created under subsection 7b77#a7 or 7c77#b7 may borrow funds or otherwise obtain credit1 on behalf of and for the benefit of the estate1 from any person in compliance with this paragraph 7#b7 solely for the purpose of providing liquidity in the case of timing mismatches among the assets and the liabilities of the estate4 ,except with respect to an underwriter1 section #e of the ,securities ,act of #aicc1 the ,trust ,indenture ,act of #aici1 and any ,state or local law requiring registration for an offer or sale of a security or registration or licensing of an issuer of1 underwriter of1 or broker or dealer in a security does not apply to the offer or sale under this paragraph 7#b7 of a security that is not an equity security4 7,b7 ,conditions ,a servicer or administrator may borrow funds or otherwise obtain credit under subparagraph 7,a7-- 7i7 on terms affording the lender only claims or liens that are fully subordinated to the claims and interests of the applicable indenture trustee and the applicable covered bondholders and all other claims against and interests in the estate1 except for the residual interest1 if the servicer or administrator certifies to the applicable covered bond regulator that1 in the business judgment of the servicer or administrator1 the borrowing or credit is in the best interests of the estate and is expected to maximize the value and the proceeds of the cover pool held by the estate2 or 7ii7 on terms affording the lender claims or liens that have priority over or are pari passu with the claims or interests of the applicable indenture trustee or the applicable covered bondholders or other claims against or interests in the estate1 if-- 7,i7 the servicer or administrator certifies to the applicable covered bond regulator that1 in the business judgment of the servicer or administrator1 the borrowing or credit is in the best interests of the estate and is expected to maximize the value and the proceeds of the cover pool held by the estate2 and 7,,ii7 the applicable covered bond regulator authorizes the borrowing or credit4 7,c7 ,limited liability ,a servicer or administrator shall not be liable for any error in business judgment when borrowing funds or otherwise obtaining credit under this paragraph 7#b7 unless the servicer or administrator acted in bad faith or in willful disregard of its duties4 7,d7 ,limits on borrowings and credit ,funds may not be borrowed or credit otherwise obtained under subparagraph 7,a7-- 7i7 for the purpose of investing in additional portfolios of eligible assets through the issuance of new covered bonds2 or 7ii7 otherwise for a purpose other than winding down the related covered bond program in compliance with this ,act1 the oversight program1 and the related transaction documents4 7,e7 ,study on borrowings and credit ,the ,comptroller ,general of the ,united ,states shall conduct a study on whether the ,federal reserve banks should be authorized to lend funds or otherwise extend credit to an estate under this paragraph 7#b7 and1 if so1 what conditions and limits should be established to mitigate any risk that the ,united ,states ,government could absorb credit losses on the cover pool held by the estate4 ,the ,comptroller ,general shall submit a report to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives on the results of the study not later than #f months after the date of enactment of this ,act4 7#c7 ,distributions by estate ,all payments or other distributions by an estate shall be made at the times1 in the amounts1 and in the manner set forth in the covered bonds1 the related transaction documents1 and any contracts executed by or on behalf of the estate in compliance with this subtitle and the oversight program4 ,to the extent that the relative priority of the liabilities of the estate are not specified in or otherwise ascertainable from their terms1 distributions shall be made on each distribution date under the covered bonds1 the related transaction documents1 or any contracts executed by or on behalf of the estate-- 7,a7 first1 to pay accrued and unpaid superpriority claims under paragraph 7#b77;,b77ii72 7,b7 second1 to pay accrued and unpaid administrative expense claims under paragraph 7#a77;,i71 paragraph 7#b77;,b77ii71 section #ced7;b77#e77;,a71 or section #ced7;c77#f77;,a72 7,c7 third1 to pay-- 7i7 accrued and unpaid claims under the covered bonds and the related transaction documents according to their terms2 and 7ii7 accrued and unpaid pari passu claims under paragraph 7#b77;,b77ii72 and 7,d7 fourth1 to pay accrued and unpaid subordinated claims under paragraph 7#b77;,b77i74 7#d7 ,distributions on residual interest ,after all other claims against and interests in an estate have been fully and irrevocably paid or defeased1 the trustee shall or shall cause a servicer or administrator to distribute the remainder of the estate to or at the direction of the owner of the residual interest4 ,no interim distribution on the residual interest may be made before that time1 unless the applicable covered bond regulator-- 7,a7 approves the distribution after determining that all other claims against and interests in the estate will be fully1 timely1 and irrevocably paid according to their terms2 and 7,b7 provides an indemnity1 for the benefit of the estate1 assuring that all other claims against and interests in the estate will be fully1 timely1 and irrevocably paid according to their terms4 7#e7 ,closing of estate ,after an estate has been fully administered1 the trustee shall close the estate and1 except as otherwise directed by the applicable covered bond regulator1 shall destroy all records of the estate4 7#f7 ,no loss to taxpayers ,taxpayers shall bear no losses from the resolution of an estate under this subtitle4 ,to the extent that the ,secretary and the ,corporation jointly determine that the ,deposit ,insurance ,fund incurred actual losses that are higher because the covered bond program of an insured depository institution was subject to resolution under this subtitle rather than as part of the receivership of the institution under the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahaa et seq471 the ,corporation may exercise the powers available under section #g7;b7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahag7;b77 to recover an amount equal to those losses after consulting with the ,secretary4 #cee4 ,securities law provisions 7a7 ,existing exemptions applicable to covered bonds 7#a7 ,treatment of certain banks and other entities ,any covered bond issued or guaranteed by a bank or by an eligible issuer described in section #ceb7i77;,d7 and sponsored solely by #a or more banks for the sole purpose of issuing covered bonds is and shall be treated as a security issued or guaranteed by a bank under section #c7;a77#b7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;c7a77#b771 section #c7;c77#c7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#c7;c77#c771 and section #cjd7;a77#d77;,a7 of the ,trust ,indenture ,act of #aici 7#ae ,u4,s4,c4 #gg;ddd7a77#d77;,a774 ,no covered bond issued or guaranteed by a bank or by an eligible issuer described in section #ceb7i77;,d7 and sponsored solely by #a or more banks for the sole purpose of issuing covered bonds shall be treated as an asset-backed security 7as defined in section #c of the ,securities and ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c774 ,each covered bond regulator for #a or more banks shall adopt disclosure and reporting regulations for offers or sales of covered bonds by a bank or an eligible issuer described in this paragraph4 ,such regulations shall provide for uniform and consistent standards for such covered bond issuers1 to the extent possible1 and shall be consistent with existing regulations governing offers or sales of nonconvertible debt4 7#b7 ,treatment of certain associations and cooperative banks ,any covered bond issued by an entity described in section #c7;a77#e77;,a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;c7a77#e77;,a77 or by an eligible issuer described in section #ceb7i77;,d7 and sponsored solely by #a or more such entities for the sole purpose of issuing covered bonds is and shall be treated as a security issued by such an entity under section #c7;a77#e77;,a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;c7a77#e77;,a771 section #c7;c77#c7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#c7;c77#c771 and section #cjd7;a77#d77;,a7 of the ,trust ,indenture ,act of #aici 7#ae ,u4,s4,c4 #gg;ddd7a77#d77;,a774 ,no covered bond issued by an entity described in section #c7;a77#e77;,a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;c7a77#e77;,a77 or by an eligible issuer described in section #ceb7i77;,d7 and sponsored solely by #a or more such entities for the sole purpose of issuing covered bonds shall be treated as an asset-backed security 7as defined in section #c of the ,securities and ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c774 ,each covered bond regulator for #a or more entities described in section #c7;a77#e77;,a7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;c7a77#e77;,a77 shall adopt1 as part of the securities regulations of the covered bond regulator1 a separate scheme of registration1 disclosure1 and reporting obligations and exemptions for offers or sales of covered bonds that are described in this paragraph4 ,such regulations shall provide for uniform and consistent standards for such covered bond issuers1 to the extent possible1 and shall be consistent with regulations governing offers or sales of similar securities4 7#c7 ,construction ,no provision of this subtitle1 including paragraph 7#a7 or 7#b71 may be construed or applied in a manner that impairs or limits any other exemption that is available under applicable securities laws4 7b7 ,exemptions for estates ,any estate that is or may be created under section #ced7;b77#a7 or #ced7;c77#b7 shall be exempt from all securities laws but-- 7#a7 shall be subject to the reporting requirements established by the applicable covered bond regulator under section #ced7;d77#a77;,e77iii72 and 7#b7 shall succeed to any requirement of the issuer to file such periodic information1 documents1 and reports in respect of the covered bonds as specified in section #ac7;a7 of the ,securities and ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghm7a77 or rules established by an appropriate ,federal banking agency4 7c7 ,exemptions for residual interests ,any residual interest in an estate that is or may be created under section #ced7;b77#a7 or #ced7;c77#b7 shall be exempt from all securities laws4 #cef4 ,miscellaneous provisions 7a7 ,domestic securities ,section #ajf7;a77#a7 of the ,secondary ,mortgage ,market ,enhancement ,act of #aihd 7#ae ,u4,s4,c4 #ggr-#a7;a77#a77 is amended-- 7#a7 in subparagraph 7,c71 by striking or at the end2 7#b7 in subparagraph 7,d71 by adding or at the end2 and 7#c7 by inserting after subparagraph 7,d7 the following3 7,e7 covered bonds 7as defined in section #ceb of the ,united ,states ,covered ,bond ,act of #bjac71 4 7b7 ,tax treatment of covered bond programs 7#a7 ,treatment of estates created under covered bond programs ,section #ggja of the ,internal ,revenue ,code of #aihf is amended by redesignating subsection 7p7 as subsection 7q7 and by inserting after subsection 7o7 the following new subsection3 7p7 ,treatment of estates created under covered bond programs ,for purposes of this title-- 7#a7 ,treatment as disregarded entity ,any estate created with respect to a covered bond program-- 7,a7 shall not be treated as an entity subject to taxation separate from the owner of the residual interest with respect to such estate2 and 7,b7 shall be treated as a disregarded entity that is owned by the owner of such residual interest4 7#b7 ,limitations on treatment as disregarded entity 7,a7 ,maximum duration ,paragraph 7#a7 shall not apply with respect to an estate after the earlier of-- 7i7 the end of the #cj-year period beginning on the date of the creation of such estate2 or 7ii7 the end of the #ahj-;day period beginning on the date of the final payment on the last outstanding covered bond that is secured by the cover pool held by such estate4 7,b7 ,restrictions on owner of residual interest ,paragraph 7#a7 shall apply with respect to an estate for any period only if-- 7i7 at no time during such period does more than one person hold a residual interest with respect to such estate2 7ii7 such person is-- 7,i7 subject to tax under subtitle ,a on the net income of such estate for the taxable year of such person which includes such period2 or 7,,ii7 a conservator1 receiver1 liquidating agent1 or trustee in bankruptcy with respect to the issuer for such period2 and 7iii7 such person is not a regulated investment company 7as defined in section #hea7 or real estate investment trust 7as defined in section #hef7 for the taxable year which includes such period4 7#c7 ,treatment as corporation ,with respect to any period for which paragraph 7#a7 does not apply to an estate created with respect to a covered bond program1 such estate shall be treated as a corporation4 7#d7 ,coordination with rules for taxable mortgage pools ,no portion of any estate created with respect to a covered bond program shall be treated as a taxable mortgage pool for purposes of subsection 7i7 during any period for which paragraph 7#a7 applies to such estate4 7#e7 ,definitions ,for purposes of this subsection1 the terms covered bond program1 cover pool1 estate1 and residual interest shall each have the same respective meanings as when used for purposes of the ,united ,states ,covered ,bond ,act of #bjac4 7#f7 ,cross references 7,a7 ,for nonrecognition with respect to certain transfers under covered bond programs1 see section #ajja7;f74 7,b7 ,for excise tax on estates created under covered bond programs by reason of default1 see section #ddge4 4 7#b7 ,treatment of certain transfers under covered bond programs ,section #ajja of such ,code is amended by adding at the end the following new subsection3 7f7 ,certain transfers under covered bond programs 7#a7 ,in general ,with respect to any covered bond program1 none of the following shall be treated as a taxable exchange of a covered bond to a covered bond holder or to a notional principal contract counterparty3 7,a7 ,the transfer of all of the assets and liabilities of such program4 7,b7 ,the creation of an estate with respect to such program4 7,c7 ,the transfer of the residual interest in such estate4 7#b7 ,definitions ,for purposes of this subsection1 the terms covered bond program1 estate1 and residual interest shall each have the same respective meanings as when used for purposes of the ,united ,states ,covered ,bond ,act of #bjac4 4 7#c7 ,excise tax on estates created under covered bond programs by reason of default 7,a7 ,in general ,chapter #cf of such ,code is amended by inserting after subchapter ,b the following new subchapter3 ,c ,tax on certain estates created under covered bond programs ,sec4 #ddge4 ,tax on estates created under covered bond programs by reason of default4 #ddge4 ,tax on estates created under covered bond programs by reason of default 7a7 ,imposition of tax ,a tax is hereby imposed on the creation of an estate by operation of section #ced7;b77#a7 of the ,united ,states ,covered ,bond ,act of #bjac4 7b7 ,amount of tax ,the tax imposed under subsection 7a7 with respect to the creation of any estate shall be equal to #a percent of the principal amount of the covered bonds secured by the cover pool with respect to such estate determined as of the close of the day before the creation of such estate4 7c7 ,by whom paid ,the tax imposed under subsection 7a7 shall be paid by the issuer of the covered bonds with respect to the covered bond program with respect to which the estate referred to in subsection 7a7 is created4 7d7 ,no effect on cover pool ,the tax imposed under subsection 7a7 shall not reduce the assets of the cover pool and no liability for such tax shall attach to the estate or to the assets of the cover pool4 7e7 ,refund in case of bankruptcy1 etc ,if an issuer liable for the tax imposed under subsection 7a7 enters conservatorship1 receivership1 liquidation1 or bankruptcy during the #e-year period beginning on the date of the creation of the estate referred to in subsection 7a71 such liability shall be extinguished and any such tax paid shall refunded to the issuer immediately upon such event4 7f7 ,definitions ,for purposes of this section1 the terms covered bond program1 cover pool1 and estate shall each have the same respective meanings as when used for purposes of the ,united ,states ,covered ,bond ,act of #bjac4 4 7,b7 ,clerical amendment ,the table of subchapters for chapter #cf of such ,code is amended by inserting after the item relating to subchapter ,b the following new item3 ,subchapter ,c--,tax on certain estates created under covered bond programs 4 7#d7 ,effective date ,the amendments made by this subsection shall apply to estates created1 and transfers made1 after the date of the enactment of this ,act4 7c7 ,state and local taxes ,the ,secretary may promulgate regulations under this subtitle that are similar to the provisions of section #cdf of title #aa1 ,united ,states ,code1 including regulations to provide that-- 7#a7 if an estate created under section #ced7;b77#a7 or #ced7;c77#b7 is not treated as an entity subject to taxation separate from the owner of the residual interest for purposes of the ,internal ,revenue ,code of #aihf 7#bf ,u4,s4,c4 #a et seq471 no separate taxable entity shall be created with respect to the estate for purposes of any ,state or local law imposing a tax on or measured by income2 and 7#b7 if a transfer or assumption of an asset or liability to or by an estate or an eligible issuer under section #ced7;b7 or #ced7;c7 does not cause or constitute an event in which gain or loss is recognized under section #ajja of the ,internal ,revenue ,code of #aihf 7#bf ,u4,s4,c4 #ajja71 the transfer or assumption shall not cause or constitute a disposition for purposes of any provision assigning tax consequences to a disposition in connection with any ,state or local law imposing a tax on or measured by income4 7d7 ,no conflict ,the provisions of this subtitle shall apply1 notwithstanding any provision of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahaa et seq471 title #aa1 ,united ,states ,code1 title ,,ii of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #echa et seq471 or any other provision of ,federal law with respect to conservatorship1 receivership1 liquidation1 or bankruptcy4 ,no provision of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahaa et seq471 title #aa1 ,united ,states ,code1 title ,,ii of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #echa et seq471 or any other provision of ,federal law with respect to conservatorship1 receivership1 liquidation1 or bankruptcy may be construed or applied in a manner that defeats or interferes with the purpose or operation of this subtitle4 7e7 ,annual report to ,congress ,the covered bond regulators shall1 annually-- 7#a7 submit a joint report to the ,congress describing the current state of the covered bond market in the ,united ,states2 and 7#b7 testify on the current state of the covered bond market in the ,united ,states before the ,committee on ,financial ,services of the ,house of ,representatives and the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate4 ,,iv ,removing ,barriers to ,new ,investment #dja4 ,basel ,,iii impact study 7a7 ,in general ,the ,board of ,governors of the ,federal ,reserve ,system1 the ,federal ,deposit ,insurance ,corporation1 and the ,office of the ,comptroller of the ,currency 7in this section collectively referred to as the ,federal banking agencies7 shall conduct an empirical study on the ,regulatory ,capital ,rules finalized by the ,board of ,governors of the ,federal ,reserve on ,july #b1 #bjac 7,final ,rule7 in accordance with subsection 7b7 and release a final report in accordance with subsection 7d74 7b7 ,issues ,to be studied ,the study required under subsection 7a7 shall include-- 7#a7 the potential impact of the ,final ,rule on the financial services sector of the ,united ,states1 and specifically covered financial institutions1 including changes to required capital levels in the aggregate1 per asset class and institution size2 7#b7 the long-term potential impact of the ,final ,rule1 including changes to the current risk weight framework2 7#c7 the potential cost and complexity of the ,final ,rule for covered financial institutions2 7#d7 the potential indicators of covered financial institutions having to maintain higher leverage capital ratios and higher total risk-based capital ratios than non-covered financial institutions1 and if such capital levels are commensurate with higher historical losses or greater risk2 7#e7 whether the ,final ,rule will cause capital levels at covered financial institutions to fluctuate with more frequency or by greater amounts than the current capital rules and what1 if any1 safety and soundness issues such fluctuations raise for covered financial institutions or the financial system including whether such fluctuations will make the ,united ,states financial system more or less safe than the current rules2 7#f7 whether the ,final ,rule will result in the discontinuation of the use of certain risk management tools by covered financial institutions and thereby undermine the safety and soundness of covered financial institutions and the financial system2 7#g7 the cumulative impact that the ,final ,rule will have on-- 7,a7 ,united ,states economic growth1 in general1 and specifically1 on the ,gross ,domestic ,product2 7,b7 the availability and cost of credit1 both generally and in low- and moderate-income areas2 7,c7 the availability and cost of residential mortgages and home equity lines of credit1 auto loans1 student loans1 and commercial loans1 including small business loans2 and 7,d7 regulatory capital levels1 capital quality1 asset quality1 and risk management at covered financial institutions4 7c7 ,voluntary participation ,any financial institution may voluntarily provide information for the study upon the request of the ,federal banking agencies1 but may not be required to provide such information4 7d7 ,final ,report 7#a7 ,availability to the public ,a final report on the completed study required under subsection 7a7 shall be made available to the public for notice and comment for a period of not less than #ij days4 7#b7 ,report to ,congress ,the ,federal banking agencies shall issue a report to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives1 and testify before such committees1 on the results of the study required under subsection 7a7 and a summary of the comments received under paragraph 7#a74 7#c7 ,review ,the ,federal banking agencies shall review any comments submitted under paragraphs 7#a7 and 7#b7 and considerations provided pursuant to paragraphs 7#a7 and 7#b71 and following such review1 shall prescribe new rules1 if appropriate1 based on the results of the study and such comments and considerations4 ,notwithstanding any other provision of law1 a new rulemaking following such comment period shall include an additional comment period of not less than #ij days4 7e7 ,delay of rulemaking ,the ,final ,rule may not take effect for a covered financial institution until the later of-- 7#a7 #b years after the date of the enactment of this ,act2 and 7#b7 #a year after the promulgation of revised rules in accordance with subsection 7d77#c7 or a determination by the ,federal banking agencies that no revised rules are needed in accordance with that subsection1 which shall be published in the ,federal ,register4 7f7 ,definition of covered financial institution ,for purposes of this section1 the term covered financial institution means any bank1 thrift1 bank holding company1 and savings and loan holding company 7as such terms are defined under section #c of the ,federal ,deposit ,insurance ,act7 other than a bank1 thrift1 bank holding company1 or savings and loan holding company identified by the ,financial ,stability ,board as a global systemically important bank1 as of the date of the enactment of this ,act4 #djb4 ,basel ,,iii ,liquidity ,coverage ,ratio amendments 7a7 ,in general ,in implementing the ,basel ,,iii ,liquidity ,coverage ,ratio amendments1 the ,board of ,governors of the ,federal ,reserve ,system1 the ,federal ,deposit ,insurance ,corporation1 and the ,office of the ,comptroller of the ,currency may not require1 as a condition for status as a high quality liquid asset1 that residential mortgage-backed securities be collateralized only by 7or be collateralized by a certain percentage of7 full recourse mortgage loans4 7b7 ,definition ,the term ,basel ,,iii ,liquidity ,coverage ,ratio amendments means the amendments to the ,liquidity ,coverage ,ratio endorsed by the ,basel ,committee on ,banking ,supervision on ,january #f1 #bjac4 #djc4 ,definition of points and fees 7a7 ,amendment to section #ajc of ,,tila ,section #ajc7;bb77#d7 of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afjb7;bb77#d77 is amended-- 7#a7 by striking paragraph 7#a77;,b7 and inserting paragraph 7#a77;,a7 and section #abi;,c2 7#b7 in subparagraph 7,a71 by striking except interest or the time-price differential and inserting the following3 except-- 7i7 interest and the time-price differential2 and 7ii7 the amount of any loan level price adjustment payment set by the ,federal ,national ,mortgage ,association1 the ,federal ,home ,loan ,mortgage ,corporation1 the ,federal ,housing ,administration1 or similar governmental entity or government-sponsored enterprise 2 7#c7 by striking subparagraph 7,b7 and inserting the following new subparagraph3 7,b7 all compensation paid directly by a consumer to a mortgage originator1 including a mortgage originator that is also the creditor in a table-funded transaction1 but not including compensation paid by a mortgage originator or a creditor to an individual employed by the mortgage originator or creditor 2 7#d7 in subparagraph 7,c7-- 7,a7 by inserting and insurance after taxes2 7,b7 in clause 7ii71 by inserting 1 except as retained by a creditor or its affiliate as a result of their participation in an affiliated business arrangement 7as defined in section #b7g7 of the ,real ,estate ,settlement ,procedures ,act of #aigd 7#ab ,u4,s4,c4 #bfjb7g77 after compensation2 and 7,c7 by striking clause 7iii7 and inserting the following3 7iii7 the charge is-- 7,i7 a bona fide third-party charge not retained by the mortgage originator1 creditor1 or an affiliate of the creditor or mortgage originator2 or 7,,ii7 a charge set forth in section #ajf7;e77#a72 2 and 7#e7 in subparagraph 7,d7-- 7,a7 by striking accident12 and 7,b7 by striking or any payments and inserting and any payments4 7b7 ,amendment to section #abi;,c of ,,tila ,section #abi;,c of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afci;c7 is amended-- 7#a7 in subsection 7a77#e77;,c71 by striking #ajc and all that follows through or mortgage originator and inserting #ajc7;bb77#d72 and 7#b7 in subsection 7b77#b77;,c77i71 by striking #ajc and all that follows through or mortgage originator7 and inserting #ajc7;bb77#d74 #djd4 ,exclusion of issuers of asset-backed securities from covered funds ,section #ac7;h77#b7 of the ,bank ,holding ,company ,act of #aief 7#ab ,u4,s4,c4 #ahea7;h77#b77 is amended-- 7#a7 by striking private equity fund mean an issuer and inserting the following3 private equity fund-- 7,a7 mean an issuer 2 7#b7 by striking the period and inserting 2 and2 and 7#c7 by adding at the end the following3 7,b7 does not include an issuer1 if such issuer is described under subparagraph 7,a7 solely because such issuer issues asset-backed securities 7as such term is defined under section #c7;a7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a7774 4 #dje4 ,suspension of regulation ,,ab ,,ii rulemaking ,section #d of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;d7 is amended-- 7#a7 by redesignating the two subsections following subsection 7a7 7each designated as subsection 7b77 as subsections 7c7 and 7d71 respectively2 and 7#b7 by inserting after subsection 7a7 the following new subsection3 7b7 ,with respect to paragraphs 7#a7 and 7#b7 of subsection 7a71 or any rule or regulation promulgated thereunder or in furtherance thereof 7including ,rule #add1 ,rule #add;,a and ,rule #ejf71 the ,commission shall not condition the availability of the exemptions afforded by any such paragraph1 rule1 or regulation upon an issuer's undertaking to provide to investors1 in connection with initial offers or sales or on an ongoing basis thereafter1 the same or substantially similar information as would be required in a transaction to which section #e applies4 4 #djf4 ,effective date of certain mortgage reform regulations 7a7 ,in general ,section #adjj7;c7 of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ae ,u4,s4,c4 #afja note7 is amended-- 7#a7 in paragraph 7#a71 by amending subparagraph 7,b7 to read as follows3 7,b7 take effect #bd months after the issuance of the regulations in final form1 or such later time as specified by regulation4 2 and 7#b7 by striking paragraph 7#c74 7b7 ,effective date ,the amendments made by subsection 7a7 shall take effect on the date of the enactment of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act1 as if included in such ,act4 #djg4 ,repeal of credit risk retention regulations 7a7 ,in general 7#a7 ,dodd-,frank ,the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act 7#ab ,u4,s4,c4 #ecja et seq47 is amended-- 7,a7 by striking section #ida2 and 7,b7 in the table of contents for such ,act1 by striking the item relating to section #ida4 7#b7 ,securities ,exchange ,act of #aicd ,the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq47 is amended-- 7,a7 in section #c7;a71 by striking paragraph 7#gg7 7relating to asset-backed security71 as added by section #ida7;a7 of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act2 and 7,b7 by striking section #ae;,g4 7b7 ,prohibition on risk retention and premium capture cash reserve accounts ,the ,comptroller of the ,currency1 the ,board of ,governors of the ,federal ,reserve ,system1 the ,federal ,deposit ,insurance ,corporation1 the ,bureau of ,consumer ,financial ,protection1 and the ,securities and ,exchange ,commission may not issue any rule or regulation to require risk retention1 the creation or maintenance of a premium capture cash reserve account1 or any similar mechanism1 unless directly authorized by an ,act of ,congress4 7c7 ,effective date ,the amendments made by subsection 7a7 shall take effect on the date of the enactment of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act1 as if included in such ,act4 #djh4 ,mortgages in qualified securities ,section #abi;,c of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afci;c71 as amended by section #daa7a71 is further amended by inserting after subsection 7e7 the following3 7f7 ,mortgages in qualified securities ,this section and any regulations promulgated under this section do not apply to a mortgage serving as collateral for a qualified security1 as such term is defined under section #cba of the ,protecting ,american ,taxpayers and ,homeowners ,act of #bjac4 4 #dji4 ,mortgage loans held in portfolio 7a7 ,home ,mortgage ,disclosure ,act of #aige ,section #cjd7;g7 of the ,home ,mortgage ,disclosure ,act of #aige 7#ab ,u4,s4,c4 #bhjc7;g77 is amended-- 7#a7 in paragraph 7#a71 by striking and at the end2 7#b7 in paragraph 7#b71 by striking the period and inserting 2 and2 and 7#c7 by adding at the end the following3 7#c7 made by the creditor1 so long as such loan appears on the balance sheet of such creditor4 4 7b7 ,truth in ,lending ,act ,the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afja et seq47 is amended-- 7#a7 in section #abi;,c 7#ae ,u4,s4,c4 #afci;c71 as amended by section #djh1 by inserting after subsection 7f7 the following3 7g7 ,mortgage loans held in portfolio ,this section and any regulations promulgated under this section do not apply to a residential mortgage loan made by the creditor so long as such loan appears on the balance sheet of such creditor4 2 and 7#b7 in section #abi;,d 7#ae ,u4,s4,c4 #afci;d71 by adding at the end the following3 7k7 ,mortgage loans held in portfolio ,this section and any regulations promulgated under this section do not apply to a residential mortgage loan made by the creditor so long as such loan appears on the balance sheet of such creditor4 4 #daj4 ,repeal of certain mortgage-related provisions 7a7 ,repeal ,sections #adac1 #adca1 and #adcb of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act are hereby repealed1 and the provisions of law amended or repealed by such sections are restored or revived as if such sections had not been enacted4 7b7 ,clerical amendment ,the table of contents for the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act is amended by striking the items relating to sections #adac1 #adca1 and #adcb4 #daa4 ,amendments to the ,truth in ,lending ,act ,the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afja et seq47 is amended-- 7#a7 in section #abi 7#ae ,u4,s4,c4 #afci7-- 7,a7 in subsection 7b77#c71 by adding at the end the following3 ,the ,bureau may not1 by regulation or otherwise1 prohibit a consumer from modifying or waiving the rights provided to the consumer under this subsection42 and 7,b7 in subsection 7u71 by adding at the end the following3 7#d7 ,ensuring access to counseling services for rural communities ,certification described under paragraph 7#a7 may be provided by a person who operates an online or telephone-operated counseling service approved by the ,secretary of ,housing and ,urban ,development or by an online or telephone-operated counseling service operated by the ,department of ,housing and ,urban ,development4 7#e7 ,effective date ,notwithstanding section #adjj7;c7 of the ,mortgage ,reform and ,anti-,predatory ,lending ,act1 this subsection shall take effect after the end of the #a-year period beginning on the earlier of-- 7,a7 the date on which the first online or telephone-operated counseling service is approved under paragraph 7#d72 and 7,b7 the date on which the ,department of ,housing and ,urban ,development begins providing online or telephone-operated counseling services described under paragraph 7#d74 2 7#b7 in section #abi;,c 7#ae ,u4,s4,c4 #afci;c7-- 7,a7 in subsection 7b77#b77;,a77viii71 by striking #cj and inserting #dj2 7,b7 by striking subsections 7c71 7d71 and 7e72 and 7,c7 by redesignating subsections 7f71 7g71 7h71 and 7i7 as subsections 7c71 7d71 7e71 and 7f71 respectively2 and 7#c7 in section #abi;,e7k77#a7 7#ae ,u4,s4,c4 #afci;e7k77#a77 by inserting after this section the following3 1 other than subsection 7e714 #dab4 ,financial ,institutions ,examination ,fairness and ,reform 7a7 ,timeliness of examination reports ,the ,federal ,financial ,institutions ,examination ,council ,act of #aigh 7#ab ,u4,s4,c4 #ccja et seq47 is amended by adding at the end the following3 #ajab4 ,timeliness of examination reports 7a7 ,in general 7#a7 ,final examination report ,a ,federal financial institutions regulatory agency shall provide a final examination report to a financial institution not later than #fj days after the later of-- 7,a7 the exit interview for an examination of the institution2 or 7,b7 the provision of additional information by the institution relating to the examination4 7#b7 ,exit interview ,if a financial institution is not subject to a resident examiner program1 the exit interview shall occur not later than the end of the #i-month period beginning on the commencement of the examination1 except that such period may be extended by the ,federal financial institutions regulatory agency by providing written notice to the institution and the ,office of ,examination ,ombudsman describing with particularity the reasons that a longer period is needed to complete the examination4 7b7 ,examination materials ,upon the request of a financial institution1 the ,federal financial institutions regulatory agency shall include with the final report an appendix listing all examination or other factual information relied upon by the agency in support of a material supervisory determination4 4 7b7 ,examination standards 7#a7 ,in general ,the ,federal ,financial ,institutions ,examination ,council ,act of #aigh is further amended by adding after section #ajab the following3 #ajac4 ,examination standards 7a7 ,in general ,in the examination of financial institutions-- 7#a7 a commercial loan shall not be placed in non-accrual status solely because the collateral for such loan has deteriorated in value2 7#b7 a modified or restructured commercial loan shall be removed from non-accrual status if the borrower demonstrates the ability to perform on such loan over a maximum period of #f months1 except that with respect to loans on a quarterly1 semiannual1 or longer repayment schedule such period shall be a maximum of #c consecutive repayment periods2 7#c7 a new appraisal on a performing commercial loan shall not be required unless an advance of new funds is involved2 7#d7 in classifying a commercial loan in which there has been deterioration in collateral value1 the amount to be classified shall be the portion of the deficiency relating to the decline in collateral value and repayment capacity of the borrower4 7b7 ,well capitalized institutions ,the ,federal financial institutions regulatory agencies may not require a financial institution that is well capitalized to raise additional capital in lieu of an action prohibited under subsection 7a74 7c7 ,consistent loan classifications ,the ,federal financial institutions regulatory agencies shall develop and apply identical definitions and reporting requirements for non-accrual loans4 4 7#b7 ,definition of material supervisory determination ,section #cji7;f77#a77;,a7 of the ,riegle ,community ,development and ,regulatory ,improvement ,act of #aiid 7#ab ,u4,s4,c4 #dhjf7;f77#a77;,a77 is amended-- 7,a7 in clause 7ii71 by striking and at the end2 and 7,b7 by inserting after clause 7iii7 the following3 7iv7 any issue specifically listed in an exam report as a matter requiring attention by the institution's management or board of directors2 and 4 7c7 ,examination ,ombudsman 7#a7 ,in general ,the ,federal ,financial ,institutions ,examination ,council ,act of #aigh is further amended by adding after section #ajac the following3 #ajad4 ,office of ,examination ,ombudsman 7a7 ,establishment ,there is established in the ,council an ,office of ,examination ,ombudsman4 7b7 ,head of office ,there is established the position of the ,ombudsman1 who shall serve as the head of the ,office of ,examination ,ombudsman1 and who shall be hired separately by the ,council and shall be independent from any member agency of the ,council4 7c7 ,staffing ,the ,ombudsman is authorized to hire staff to support the activities of the ,office of ,examination ,ombudsman4 7d7 ,duties ,the ,ombudsman shall-- 7#a7 receive and1 at the ,ombudsman's discretion1 investigate complaints from financial institutions1 their representatives1 or another entity acting on behalf of such institutions1 concerning examinations1 examination practices1 or examination reports2 7#b7 hold meetings1 at least once every three months and in locations designed to encourage participation from all sections of the ,united ,states1 with financial institutions1 their representatives1 or another entity acting on behalf of such institutions1 to discuss examination procedures1 examination practices1 or examination policies2 7#c7 review examination procedures of the ,federal financial institutions regulatory agencies to ensure that the written examination policies of those agencies are being followed in practice and adhere to the standards for consistency established by the ,council2 7#d7 conduct a continuing and regular program of examination quality assurance for all examination types conducted by the ,federal financial institutions regulatory agencies2 7#e7 process any supervisory appeal initiated under section #ajae or section #cji7;e7 of the ,riegle ,community ,development and ,regulatory ,improvement ,act of #aiid2 and 7#f7 report annually to the ,committee on ,financial ,services of the ,house of ,representatives1 the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate1 and the ,council1 on the reviews carried out pursuant to paragraphs 7#c7 and 7#d71 including compliance with the requirements set forth in section #ajab regarding timeliness of examination reports1 and the ,council's recommendations for improvements in examination procedures1 practices1 and policies4 7e7 ,confidentiality ,the ,ombudsman shall keep confidential all meetings1 discussions1 and information provided by financial institutions4 4 7#b7 ,definition ,section #ajjc of the ,federal ,financial ,institutions ,examination ,council ,act of #aigh is amended-- 7,a7 in paragraph 7#b71 by striking and at the end2 7,b7 in paragraph 7#c71 by adding and at the end2 and 7,c7 by adding at the end the following3 7#d7 the term ,ombudsman means the ,ombudsman established under section #ajad7;a74 4 7d7 ,right ,to appeal before an independent administrative law judge ,the ,federal ,financial ,institutions ,examination ,council ,act of #aigh is further amended by adding after section #ajad the following3 #ajae4 ,right to appeal before an independent administrative law judge 7a7 ,in general ,a financial institution shall have the right to appeal a material supervisory determination contained in a final report of examination4 7b7 ,notice 7#a7 ,timing ,a financial institution seeking an appeal under this section shall file a written notice with the ,ombudsman within #fj days after receiving the final report or examination that is the subject of such appeal4 7#b7 ,identification of determination ,the written notice shall identify the material supervisory determination that is the subject of the appeal1 and a statement of the reasons why the institution believes that the determination is incorrect or should otherwise be modified4 7#c7 ,information to be provided to institution ,any information relied upon by the agency in the final report that is not in the possession of the financial institution may be requested by the financial institution and shall be delivered promptly by the agency to the financial institution4 7c7 ,hearing before independent administrative law judge 7#a7 ,in general ,the ,ombudsman shall determine the merits of the appeal on the record1 after an opportunity for a hearing before an independent administrative law judge4 7#b7 ,hearing procedures ,if a hearing is requested by the financial institution1 the hearing shall-- 7,a7 take place not later than #fj days after the notice of the appeal was received by the ,ombudsman2 and 7,b7 be conducted pursuant to the procedures set forth under sections #eef and #eeg of title #e1 ,united ,states ,code4 7#c7 ,judge recommendation2 standard of review ,in any hearing under this subsection-- 7,a7 the administrative law judge shall recommend to the ,ombudsman what determination should be made2 and 7,b7 in making such recommendation1 the administrative law judge shall not defer to the opinions of the examiner or agency1 but shall independently determine the appropriateness of the agency's decision based upon the relevant statutes1 regulations1 and other appropriate guidance4 7d7 ,final decision ,a decision by the ,ombudsman on an appeal under this section shall-- 7#a7 be made not later than #fj days after the record has been closed2 and 7#b7 be final agency action and shall bind the agency whose supervisory determination was the subject of the appeal and the financial institution making the appeal4 7e7 ,report ,the ,ombudsman shall report annually to the ,committee on ,financial ,services of the ,house of ,representatives1 the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate on actions taken on appeals under this section1 including the types of issues that financial institutions have appealed and the results of those appeals4 ,in no case shall such a report contain information about individual financial institutions or any confidential or privileged information shared by financial institutions4 7f7 ,retaliation prohibited ,a ,federal financial institution's regulatory agency may not-- 7#a7 retaliate against a financial institution1 including service providers1 or any institution-affiliated party1 for exercising appellate rights under this section2 or 7#b7 delay or deny any agency action that would benefit a financial institution or any institution-affiliated party on the basis that an appeal under this section is pending under this section4 4 7e7 ,additional amendments 7#a7 ,riegle ,community ,development and ,regulatory ,improvement ,act of #aiid ,section #cji of the ,riegle ,community ,development and ,regulatory ,improvement ,act of #aiid 7#ab ,u4,s4,c4 #dhjf71 is amended-- 7,a7 in subsection 7a71 by inserting after appropriate ,federal banking agency the following3 1 the ,bureau of ,consumer ,financial ,protection12 7,b7 in subsection 7b7-- 7i7 in paragraph 7#b71 by striking the appellant from retaliation by agency examiners and inserting the insured depository institution or insured credit union from retaliation by the agencies referred to in subsection 7a72 and 7ii7 by adding at the end the following flush-left text3 ,for purposes of this subsection and subsection 7e71 retaliation includes delaying consideration of1 or withholding approval of1 any request1 notice1 or application that otherwise would have been approved1 but for the exercise of the institution's or credit union's rights under this section4 2 and 7,c7 in subsection 7e77#b7-- 7i7 in subparagraph 7,b71 by striking and at the end2 7ii7 in subparagraph 7,c71 by striking the period and inserting 2 and2 and 7iii7 by adding at the end the following3 7,d7 ensure that appropriate safeguards exist for protecting the insured depository institution or insured credit union from retaliation by any agency referred to in subsection 7a7 for exercising its rights under this subsection4 4 7#b7 ,federal ,deposit ,insurance ,act ,section #ah7x7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahbh7x77 is amended by inserting the ,bureau of ,consumer ,financial ,protection1 before any ,federal banking agency each place such term appears4 7#c7 ,federal ,credit ,union ,act ,section #bje7;j7 of the ,federal ,credit ,union ,act 7#ab ,u4,s4,c4 #aghe7;j77 is amended by inserting the ,bureau of ,consumer ,financial ,protection1 before the ,administration each place such term appears4 7#d7 ,technical corrections ,the ,federal ,financial ,institutions ,examination ,council ,act of #aigh 7#ab ,u4,s4,c4 #ccja et seq47 is amended-- 7,a7 in section #ajjc7a71 by striking the ,office of ,thrift ,supervision12 and 7,b7 in section #ajje1 by striking ,one-fifth and inserting ,one-fourth4 #dac4 ,notice of junior mortgage or lien ,with respect to the dwelling of a borrower that serves as security for a securitized senior mortgage loan1 if the borrower enters into any credit transaction that would result in the creation of a new mortgage or other lien on such dwelling1 the creditor of such new mortgage or other lien shall notify the servicer of the senior mortgage loan of the existence of the new mortgage or other lien4 #dad4 ,limitation on mortgages held by loan servicers 7a7 ,limitation ,neither the servicer of a residential mortgage loan1 nor any affiliate of such servicer1 may own1 or hold any interest in1 any other residential mortgage loan that is secured by a mortgage1 deed of trust1 or other equivalent consensual security interest on the same dwelling or residential real property that is subject to the mortgage1 deed of trust1 or other security interest that secures the residential mortgage loan serviced by the servicer4 7b7 ,definitions ,for purposes of this section1 the following definitions shall apply3 7#a7 ,affiliate ,the term affiliate has the meaning given such term under section #ajd7;g7 of the ,gramm-,leach-,bliley ,act 7#ae ,u4,s4,c4 #fgja7;g774 7#b7 ,residential mortgage loan ,the term residential mortgage loan means any consumer credit transaction that is secured by a mortgage1 deed of trust1 or other equivalent consensual security interest on a dwelling or on residential real property that includes a dwelling1 other than a consumer credit transaction under an open end credit plan or an extension of credit relating to a plan described in section #aja7ec;,d7 of title #aa1 ,united ,states ,code4 7#c7 ,servicer ,the term servicer has the meaning provided such term in section #abi;,a of the ,truth in ,lending ,act1 except that such term includes a person who makes or holds a residential mortgage loan 7including a pool of residential mortgage loans7 if such person also services the loan4 7c7 ,interests ,for purposes of subsection 7a71 ownership of1 or holding an interest in1 a residential mortgage loan includes ownership of1 or holding an interest in-- 7#a7 a pool of residential mortgage loans that contains such residential mortgage loan2 or 7#b7 any security based on or backed by a pool of residential mortgage loans that contains such residential mortgage loan4 7d7 ,effective date ,this section shall apply-- 7#a7 with respect to the servicer 7or affiliate of the servicer7 of a residential mortgage loan that is originated after the date of the enactment of this ,act1 on such date of enactment2 and 7#b7 with respect to the servicer 7or affiliate of the servicer7 of a residential mortgage loan that is originated on or before the date of the enactment of this ,act1 upon the expiration of the #ab-month period beginning upon such date of enactment4 ,v ,miscellaneous ,provisions #eja4 ,preserving access to manufactured housing 7a7 ,amendment to mortgage originator definition ,section #adja of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act is amended1 in paragraph 7#b77;,c77ii7 of the matter proposed to be added to section #ajc of the ,truth in ,lending ,act1 by striking an employee of a retailer of manufactured homes who is not described in clause 7i7 or 7iii7 of subparagraph 7,a7 and who does not advise a consumer on loan terms 7including rates1 fees1 and other costs7 and inserting a retailer of manufactured or modular homes or its employees unless such retailer or its employees receive compensation or gain for engaging in activities described in subparagraph 7,a7 that is in excess of any compensation or gain received in a comparable cash transaction4 7b7 ,technical amendments ,section #adja of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act is amended1 in the matter proposed to be added to section #ajc of the ,truth in ,lending ,act1 by redesignating subsection 7cc7 as subsection 7dd74 7c7 ,effective date ,the amendments made by this section shall take effect as if included in the provisions of the ,dodd-,frank ,wall ,street ,reform and ,consumer ,protection ,act to which they relate4 #ejb4 ,common sense economic recovery 7a7 ,short title ,this section may be cited as the ,common ,sense ,economic ,recovery ,act of #bjac4 7b7 ,treatment of certain loans 7#a7 ,in general ,for purposes of determining capital requirements or measuring capital of an insured depository institution under section #ch of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahcao7 or any other provision of law or regulatory guidance1 an insured depository institution that would otherwise be required to treat a loan as a non-accrual loan may treat such loan as an accrual loan1 if-- 7,a7 the loan is current2 7,b7 during the previous #f-month period1 no monthly payment on the loan has been more than #cj days delinquent2 and 7,c7 the payments on the loan are being made pursuant to the contractual terms of the loan agreement and any refinances and modifications that are agreed to by all of the parties4 7#b7 ,demonstration of ability ,to perform on a loan ,notwithstanding paragraph 7#a71 a modified or restructured loan may not be treated as a non-accrual loan if the borrower demonstrates the ability to perform on such a loan-- 7,a7 over a period of #f months2 or 7,b7 with respect to a loan on a quarterly1 semi-annual1 or longer repayment schedule1 over a period of #c consecutive payments4 7#c7 ,no additional adverse treatment ,with respect to a loan held by an insured depository institution and treated as an accrual loan by reason of paragraph 7#a71 an appropriate ,federal banking agency may not impose any additional accounting requirements on such institution with respect to such loan compared to the requirements that would otherwise have been placed on such institution with respect to such loan if such loan were not being treated as an accrual loan by reason of paragraph 7#a71 if the result of such additional requirement would adversely impact the measurement of capital of the institution4 7#d7 ,prohibition on the re-,classification of loans based solely on collateral value ,an appropriate ,federal banking agency may not require an insured depository institution to treat a loan as a non-accrual loan solely on the basis that the collateral of such loan has reduced in value4 7#e7 ,provisions not applicable to publicly traded institutions ,this subsection shall not apply with respect to any issuer of a security registered pursuant to section #ab of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghl74 7c7 ,study 7#a7 ,in general ,the ,financial ,stability ,oversight ,council shall conduct a study of how best to prevent contradictory guidance from being issued by appropriate ,federal banking agencies to insured depository institutions with respect to loan classifications and capital requirements4 7#b7 ,report ,not later than the end of the #fj-;day period beginning on the date of the enactment of this ,act1 the ,financial ,stability ,oversight ,council shall issue a report to the ,congress containing-- 7,a7 all determinations and conclusions made by the ,council in carrying out the study required under paragraph 7#a72 and 7,b7 legislative recommendations that the ,council believe will prevent contradictory guidance from being issued by appropriate ,federal banking agencies to insured depository institutions with respect to loan classifications and capital requirements4 7d7 ,definitions ,for purposes of this section3 7#a7 ,appropriate ,federal banking agency ,the term appropriate ,federal banking agency-- 7,a7 has the meaning given such term under section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac72 and 7,b7 means the ,national ,credit ,union ,administration ,board1 in the case of a credit union4 7#b7 ,insured depository institution ,the term insured depository institution means-- 7,a7 an insured depository institution1 as defined under section #c of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac72 and 7,b7 a credit union4 7e7 ,sunset ,effective after the end of the #b-year period beginning on the date of the enactment of this ,act1 this section shall cease to have any force or effect4 #ejc4 ,technical ,amendments to ,federal ,home ,loan ,bank ,act 7a7 ,in general ,section #aj of the ,federal ,home ,loan ,bank ,act 7#ab ,u4,s4,c4 #adcj7 is amended-- 7#a7 in subsection 7a7-- 7,a7 by redesignating paragraph 7#f7 as paragraph 7#g72 and 7,b7 by inserting after paragraph 7#e7 the following3 7#f7 ,report on collateral ,the ,director shall annually report to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives on the collateral pledged to the ,banks1 including an analysis of collateral by type and by ,bank district4 2 7#b7 by striking subsection 7g72 and 7#c7 in subsection 7j77#ab71 by striking subparagraphs 7,c7 and 7,d74 7b7 ,initial report ,the ,director of the ,federal ,housing ,finance ,agency shall make the first report required under section #aj7;a77#g7 of the ,federal ,home ,loan ,bank ,act1 as added by subsection 7a71 not later than the end of the #ahj-;day period beginning on the date of the enactment of this ,act4 #ejd4 ,preservation of attorney-client privilege for information provided to ,,fhfa ,section #acag of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4#deag7 is amended by adding at the end the following new subsection3 7j7 ,privileges not affected by disclosure to ,agency 7#a7 ,in general ,the submission by any person of any information to the ,agency for any purpose in the course of any supervisory or regulatory process of the ,agency shall not be construed as waiving1 destroying1 or otherwise affecting any privilege such person may claim with respect to such information under ,federal or ,state law as to any person or entity other than such ,agency4 7#b7 ,rule of construction ,no provision of paragraph 7#a7 may be construed as implying or establishing that-- 7,a7 any person waives any privilege applicable to information that is submitted or transferred under any circumstance to which paragraph 7#a7 does not apply2 or 7,b7 any person would waive any privilege applicable to any information by submitting the information to the ,agency1 but for this subsection4 4 #eje4 ,,fhfa ,liaison ,membership in ,federal ,financial ,institutions ,examination ,council ,section #ajjg of the ,federal ,financial ,institutions ,examination ,council ,act of #aigh 7#ab ,u4,s4,c4 #ccjf7 is amended-- 7#a7 in the section heading1 by inserting after state the following3 and ,federal ,housing ,finance ,agency2 7#b7 in the first sentence1 by inserting after financial institutions the following3 1 and one representative of the ,federal ,housing ,finance ,agency12 and 7#c7 in the last sentence1 by inserting ,state after among the4 #ejf4 ,recognition of ,,fhfa enforcement authority with regard to regulated entities ,section #aabe7;c7 of the ,financial ,institution ,reform1 ,recovery and ,enforcement ,act of #aihi 7#ab ,u4,s4,c4 #cced7;c72 as added by section #adgc7q7 of the ,dodd ,frank ,wall ,street ,reform and ,consumer ,protection ,act7 is amended-- 7#a7 in paragraph 7#a71 by striking and at the end2 7#b7 by redesignating paragraph 7#b7 as paragraph 7#c72 and 7#c7 by inserting after paragraph 7#a7 the following new paragraph3 7#b7 with respect to any regulated entity 7as such term is defined in section #acjc of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #dejb771 the ,federal ,housing ,finance ,agency2 and 4 #ejg4 ,exception from ,right to ,financial ,privacy ,act for ,,fhfa as conservator or receiver ,section #aaac7o7 of the ,right to ,financial ,privacy ,act of #aigh 7#ab ,u4,s4,c4 #cdac7o77 is amended-- 7#a7 by striking 7o7 and inserting 7o77#a72 and 7#b7 by adding at the end the following new paragraph3 7#b7 ,this title shall not apply to the examination by or disclosure to the ,federal ,housing ,finance ,agency or its employees or agents of financial records or information in the exercise of its supervisory or regulatory functions1 including conservatorship and receivership functions1 with respect to any regulated entity or other person participating in the conduct of the affairs thereof4 4 #ejh4 ,technical amendment to ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib ,section #acfh7;d7 of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #dfah7;d77 is amended by striking ,committee on ,banking1 ,finance and ,urban ,affairs and inserting ,committee on ,financial ,services4 #eji4 ,application of presumption to enterprise streamlined refinancings ,section #abi;,c7b77#c77;,b77ii7 of the ,truth in ,lending ,act 7#ae ,u4,s4,c4 #afci;c7b77#c77;,b77ii72 as added by section #adab of the ,dodd ,frank ,wall ,street ,reform and ,consumer ,protection ,act7 is amended-- 7#a7 by inserting after administer1 the following3 or that are owned or guaranteed by an entity regulated or supervised by such agency12 and 7#b7 by adding at the end the following new subclause3 7,v7 ,the ,federal ,housing ,finance ,agency1 with regard to mortgages owned or guaranteed by an entity regulated or supervised by such agency4 4 #eaj4 ,,fhfa authority to regulate and examine contractual counterparties ,section #acag of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib1 as amended by the preceding provisions of this ,act1 is further amended 7#ab ,u4,s4,c4 #deag7 by adding at the end the following new subsection3 7k7 ,regulation and examination of contractual counterparties 7#a7 ,authority ,when a regulated entity or the ,office of ,finance causes to be performed for itself1 by contract or otherwise and whether on or off its premises1 any services authorized to that regulated entity or the ,office of ,finance by its authorizing statute or the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib-- 7,a7 such performance shall be subject to regulation and examination by the ,federal ,housing ,finance ,agency to the same extent as if such services were being performed by the regulated entity or the ,office of ,finance itself on its own premises1 and 7,b7 the regulated entity or the ,office of ,finance shall notify the ,director of the existence of the service relationship within thirty days after the making of such service contract or the performance of the service1 whichever occurs first4 7#b7 ,regulations and orders ,the ,director may issue such regulations and orders as may be necessary to enable the ,agency to administer and to carry out the purposes of this subsection and to prevent evasions thereof4 4 #eaa4 ,election of directors of a merged ,federal ,home ,loan ,bank ,section #g of the ,federal ,home ,loan ,bank ,act 7#ab ,u4,s4,c4 #adbg7 is amended-- 7#a7 in subsection 7a77#a71 by inserting and subsection 7d7 after paragraphs 7#b7 through 7#d72 7#b7 in subsection 7b7-- 7,a7 in the matter preceding paragraph 7#b7-- 7i7 by striking ,each and inserting 7#a77;,a7 ,except as provided in subsection 7d71 each2 7ii7 by inserting 7,b7 before ,no person2 7iii7 by inserting 7,c7 before ,as used2 and 7iv7 in the third sentence-- 7,i7 by striking this subsection and inserting subparagraph 7,a72 and 7,,ii7 by striking home loan bank and inserting ,home ,loan ,bank2 and 7,b7 in paragraph 7#b77;,a77ii71 by inserting or subsection 7d77#d71 if applicable1 after paragraph 7#a72 7#c7 by striking subsections 7c71 7d71 and 7h72 7#d7 by redesignating subsections 7d71 7e71 7f71 and 7g7 as subsections 7e71 7f71 7g71 and 7h71 respectively2 and 7#e7 by inserting after subsection 7b7 the following3 7c7 ,allocation of member directorships among ,states in bank district 7#a7 ,designation of member location ,the ,director shall designate the ,state in which each member of each ,federal ,home ,loan ,bank shall be deemed to be located for the purposes of this subsection and subsections 7b7 and 7d71 and may from time to time change any such designation4 ,if the principal place of business of any ,bank member is located in a ,state within the district of the ,bank of which it is a member1 the ,director shall designate that ,state as the ,state in which the member shall be deemed to be located for those purposes4 7#b7 ,stock-based allocation of designated member directorships ,the number of member directorships designated as representing the members located in each separate ,state in a ,federal ,home ,loan ,bank district shall be determined by the ,director in the approximate ratio of the percentage of the required stock1 as prescribed by regulation of the ,director1 of the members located in that ,state at the end of the calendar year next preceding the date of the election to the total required stock1 as so determined1 of all members of the ,bank as of that same date4 7#c7 ,limitations on stock-based allocations ,except as provided in subsection 7d71 the following provisions shall apply to the allocation of member directorships among the ,states of a ,bank district1 notwithstanding the requirements of paragraph 7#b73 7,a7 ,in the case of each ,state1 the number of member directorships designated as representing the members located in that ,state shall not be less than one and shall not be more than six4 7,b7 ,if at any time the number of member directorships designated as representing the members located in any ,state would not be at least equal to the total number of member directorships which1 on ,december #ca1 #aifj1 were filled by officers or directors of members whose principal places of business were located in that ,state1 the ,director shall add to the board of directors of the ,bank of the district in which that ,state is located such number of member directorships1 and shall so designate the directorship or directorships thus added1 that the number of member directorships designated as representing the members located in that ,state will equal said total number4 ,any member directorship so added shall exist only until the expiration of its first term4 7d7 ,board size1 composition1 and elections for combined ,banks ,notwithstanding any other provision of this section1 the following requirements shall apply to the size and composition of1 and the election of directors to1 the board of any ,bank created as result of the combination of two or more ,banks under section #bf3 7#a7 ,board size ,the management of a combined ,bank shall be vested in a board of #ae directors1 or such lesser number as the ,director determines appropriate1 consistent with the safe and sound operation of the combined ,bank4 7#b7 ,board makeup ,the ,director shall establish the respective number of member directorships and independent directorships for the board of the combined ,bank such that-- 7,a7 member directors shall comprise at least the majority of the members of the board of directors2 and 7,b7 independent directors shall comprise not fewer than #b_/e of the members of the board of directors4 7#c7 ,allocation of member directorships ,the ,director shall allocate the member directorships of the board of a combined ,bank among the ,states of the ,bank district in accordance with the requirements of subsection 7c77#b71 except that-- 7,a7 no ,state shall be allocated more than two member directorships until every state has been allocated at least one member directorship2 and 7,b7 if1 after the ,director has allocated all but one of the member directorships1 there remain any ,states to which no member directorship has yet been allocated1 then the ,director shall allocate the remaining member directorship to represent the members located in all of the ,states that have not otherwise been allocated a member directorship4 7#d7 ,election of directors ,the directors of a combined ,bank shall be nominated and elected as provided in subsection 7b71 except that1 in the case of a member directorship that has been designated as representing the members of two or more ,states pursuant to paragraph 7#c77;,b71 the following requirements shall apply in lieu of those set forth in subsection 7b77#a77;,a73 7,a7 ,the directorship shall be filled by a person who is an officer or director of a member located in one of the ,states represented4 7,b7 ,each member located in each ,state represented shall be entitled to nominate an eligible person to fill the directorship1 and the member director shall be elected from persons so nominated by a plurality of the votes that those members may cast under subparagraph 7,c74 7,c7 ,each member located in each ,state represented may cast a number of votes equal to the number of shares of stock in the ,bank required to be held by the member at the end of the calendar year next preceding the election1 but not in excess of the average number of shares of stock in the ,bank required to be held at the end of that year by the respective members of the ,bank located in those ,states4 7#e7 ,initial directors for newly combined ,banks ,the following requirements shall apply to the selection of the individuals to serve as the initial directors of a combined ,bank as of the effective date of the combination3 7,a7 ,the terms of office of any directors of the combining ,banks who do not become directors of the combined ,bank shall terminate as of the effective date of the combination4 7,b7 ,the individuals to serve as the initial directors of a newly combined ,bank shall be chosen from among the incumbent directors of the predecessor ,banks serving immediately prior to the effective date of the combination of those ,banks and shall be-- 7i7 as designated by the ,director in the case of a ,bank created from a combination of two or more ,banks pursuant to a reorganization under section #bf7;a72 and 7ii7 as agreed upon among the merging ,banks and approved by the ,director in the case of a ,bank created from a voluntary merger of two or more ,banks pursuant to section #bf7;b74 7,c7 ,each initial director of the combined ,bank shall be entitled to serve for the remainder of the term of office that the director had with the predecessor ,bank4 ,terms served as a director of a predecessor ,bank shall be counted as being served as a director of the combined ,bank for purposes of determining term limits under subsection 7e77#c74 7,d7 ,beginning with the first election of directors occurring after the combination of the predecessor ,banks1 the ,director shall adjust the term of any directorship of the combined ,bank as necessary to achieve and maintain the staggering of terms that is required under subsection 7e77#b74 7e7 ,terms2 rules and regulations governing nominations and elections 7#a7 ,terms ,except as provided in paragraph 7#b71 the term of each ,federal ,home ,loan ,bank director shall be #d years4 7#b7 ,adjustment of terms ,the ,director shall adjust the terms of members from time to time as necessary to ensure that the terms of the members of the board of directors are staggered with approximately #a_/d of the terms expiring each year4 7#c7 ,term limits ,if any person has been elected to each of three consecutive full terms as a director of a ,federal ,home ,loan ,bank and has served for all or part of each of those terms1 that person shall not be eligible for election to a directorship of that ,bank for a term which begins earlier than two years after the expiration of the last expiring of the three terms4 7#d7 ,rules and regulations governing nominations and elections ,the ,director is hereby authorized to prescribe such rules and regulations as the ,director may deem necessary or appropriate for the nomination and election of directors of ,federal ,home ,loan ,banks1 including1 without limitation on the generality of the foregoing1 rules and regulations with respect to the breaking of ties and with respect to the inclusion of more than one directorship on a single ballot and the methods of voting and of determining the results of voting in such cases4 2 7#f7 in subsection 7f71 as so redesignated1 by striking the first and second sentences2 7#g7 in subsection 7h71 as so redesignated-- 7,a7 by striking home loan bank each place such term appears and inserting ,home ,loan ,bank2 and 7,b7 in paragraph 7#a71 by striking such bank and the bank and inserting such ,bank and the ,bank1 respectively2 7#h7 in subsection 7i77#a7-- 7,a7 by striking bank and inserting ,bank2 and 7,b7 by striking board and inserting ,director2 7#i7 in subsection 7j71 by striking bank and inserting ,bank2 and 7#aj7 by striking the second subsection 7l71 as added by section #abjb7h7 of the ,housing and ,economic ,recovery ,act of #bjjh4