,,ii #aacth ,,congress #ast ,session ,s4 #acgf ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #be1 #bjac ,mr4 ,johnson of ,south ,dakota 7for himself and ,mr4 ,crapo7 introduced the following bill2 which was read twice and referred to the ,committee on ,banking1 ,housing1 and ,urban ,affairs ,a ,,bill ,to improve the ,federal ,housing ,administration and to ensure the solvency of the ,mutual ,mortgage ,insurance ,fund1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,,fha ,solvency ,act of #bjac4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,sec4 #b4 ,mortgage insurance premiums4 ,sec4 #c4 ,indemnification by ,,fha mortgagees4 ,sec4 #d4 ,review of mortgagee performance4 ,sec4 #e4 ,easing regulatory burdens2 resource guide4 ,sec4 #f4 ,improving underwriting standards4 ,sec4 #g4 ,ensuring adequate capital levels in the ,mutual ,mortgage ,insurance ,fund4 ,sec4 #h4 ,establishment of ,deputy ,assistant ,secretary and ,chief ,risk ,officer of ,,fha4 ,sec4 #i4 ,disclosure of events4 ,sec4 #aj4 ,,gao study on disclosures4 ,sec4 #aa4 ,stabilizing the ,,hecm program4 ,sec4 #ab4 ,publication of final rules relating to limiting seller contributions towards purchase related expenses4 #b4 ,mortgage insurance premiums 7a7 ,in general ,section #bjc7;c7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agji7;c77 is amended-- 7#a7 in paragraph 7#b77;,b7-- 7,a7 in the matter preceding clause 7i7-- 7i7 by striking may and inserting shall2 7ii7 by striking not exceeding #a4e percent and inserting not less than #j4ee percent2 and 7iii7 by inserting and not exceeding #b4j percent of such remaining insured principal balance before for the following periods32 and 7,b7 in clause 7ii71 by striking #a4ee percent and inserting #b4je percent2 and 7#b7 by adding at the end the following3 7#c7 ,evaluation of up-front and annual premiums 7,a7 ,annual review ,the ,secretary shall1 at least annually1 review-- 7i7 the amount of the annual and up-front premiums collected under this subsection2 and 7ii7 the expected losses to the ,mutual ,mortgage ,insurance ,fund1 as such losses are calculated in the annual independent actuarial study required under section #bjb7;a77#d74 7,b7 ,required adjustments ,upon completion of the review required under subparagraph 7,a71 the ,secretary shall1 for all mortgages that are to become an obligation of the ,mutual ,mortgage ,insurance ,fund after the date that such review is complete1 adjust the annual and up-front premiums applied to such mortgages so that the premiums collected over the life of such mortgages will exceed the expected losses of such mortgages to the ,fund plus amounts sufficient to ensure the capital reserve ratio remains at the level required under section #bje7;f74 7,c7 ,rule of construction ,nothing in this paragraph shall permit or be construed to permit the ,secretary to apply different premium rates to the same mortgage product during the same time period based solely on the characteristics of the mortgagor4 4 7b7 ,effective date ,the amendments made by subsection 7a7 take effect upon the expiration of the #f-month period beginning on the date of enactment of this ,act4 #c4 ,indemnification by ,,fha mortgagees 7a7 ,in general ,section #bjb of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjh7 is amended by adding at the end the following new subsection3 7i7 ,indemnification by mortgagees 7#a7 ,in general ,if the ,secretary determines that a mortgage executed by a mortgagee approved by the ,secretary under the direct endorsement program or insured by a mortgagee pursuant to the delegation of authority under section #bef contains a material defect such that the mortgage should not have been approved or endorsed for insurance1 and a loan becomes delinquent within #cf months of such approval or endorsement leading to a default or the ,secretary pays a claim within #cf months after such approval or endorsement1 the ,secretary may require the mortgagee approved by the ,secretary under the direct endorsement program or the mortgagee delegated authority under section #bef to indemnify the ,secretary for the loss1 irrespective of whether the violation caused the mortgage default4 7#b7 ,fraud or misrepresentation ,if fraud or misrepresentation was involved in connection with the origination1 the ,secretary shall require the mortgagee approved by the ,secretary under the direct endorsement program or the mortgagee delegated authority under section #bef to indemnify the ,secretary for the loss regardless of when an insurance claim is paid4 7#c7 ,requirements and procedures ,the ,secretary shall issue regulations establishing-- 7,a7 appropriate requirements and procedures governing the indemnification of the ,secretary by the mortgagee1 including public reporting on-- 7i7 the number of loans that-- 7,i7 were not originated in accordance with the requirements established by the ,secretary2 and 7,,ii7 involved fraud or misrepresentation in connection with the origination2 and 7ii7 the financial impact on the ,mutual ,mortgage ,insurance ,fund when indemnification is required2 and 7,b7 an appeals process1 or making any necessary modifications or revisions to an existing appeals process of the ,secretary1 to appeal any determination of indemnification made by the ,secretary pursuant to paragraph 7#a7 or 7#b74 7#d7 ,applicability ,this subsection shall only apply to mortgages insured under this title that were originated on or after the date of enactment of the ,,fha ,solvency ,act of #bjac4 7#e7 ,deposit in the ,mutual ,mortgage ,insurance ,fund ,the ,secretary shall deposit any amounts collected pursuant to this subsection in1 and for the use of1 the ,mutual ,mortgage ,insurance ,fund4 4 7b7 ,rule of construction ,nothing in subsection 7a71 or the amendment made by subsection 7a71 shall be construed to supersede1 alter1 or in any way affect the authorities granted to the ,secretary of ,housing and ,urban ,development under section #bef of the ,national ,housing ,act4 #d4 ,review of mortgagee performance ,section #ecc of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agce;f-#aa7 is amended-- 7#a7 by amending subsection 7a7 to read as follows3 7a7 ,periodic review of mortgagee performance ,to reduce losses in connection with single family mortgage insurance programs under this ,act1 at least once a year the ,secretary shall review the mortgagees originating or underwriting insured single family mortgages4 2 7#b7 by amending subsection 7b7 to read as follows3 7b7 ,comparison with other mortgagees 7#a7 ,in general ,in conducting the review required under subsection 7a71 for each mortgagee the ,secretary shall compare that mortgagee with other mortgagees originating or underwriting insured single family mortgages based on the rates of defaults and claims for insured single family mortgage loans originated or underwritten by that mortgagee4 ,the ,secretary may also compare that mortgagee with such other mortgagees based on-- 7,a7 underwriting quality2 7,b7 geographic area served2 or 7,c7 any commonly used factors the ,secretary deems necessary for comparing mortgage default risk1 provided that such comparison is of factors that the ,secretary would expect to reduce the default risk of mortgages insured by the ,secretary4 7#b7 ,implementation ,in carrying out the comparisons required under paragraph 7#a71 the ,secretary shall implement such comparisons by regulation1 notice1 or mortgagee letter4 2 and 7#c7 in subsection 7c7-- 7,a7 by striking paragraph 7#a7 and inserting the following3 7#a7 ,termination authority 7,a7 ,in general ,notwithstanding section #bjb7;c71 the ,secretary may terminate the approval of a mortgagee to originate or underwrite single family mortgages if the ,secretary determines that the mortgage loans originated or underwritten by the mortgagee present an unacceptable risk to the insurance funds4 7,b7 ,basis for determining unacceptable risk ,for purposes of subparagraph 7,a71 a mortgagee may present an unacceptable risk to the insurance funds based on-- 7i7 a comparison of any of the factors set forth in subsection 7b72 or 7ii7 a determination that the mortgagee engaged in fraud or misrepresentation4 2 7,b7 by redesignating paragraph 7#b7 as paragraph 7#c72 7,c7 by inserting after paragraph 7#a7 the following3 7#b7 ,applicability and enforcement ,the authority granted to the ,secretary under paragraph 7#a7 shall-- 7,a7 apply for any specified area or areas1 or on a nationwide basis2 and 7,b7 be made in accordance with any regulation1 notice1 or mortgagee letter issued by the ,secretary4 2 and 7,d7 in paragraph 7#c7 7as so redesignated7-- 7i7 by striking ,the ,secretary shall give and inserting 7#c7 ,notice and right to informal conference4--,the ,secretary shall give2 and 7ii7 in the fourth sentence1 by striking excessive default and claim rate and inserting finding of an unacceptable risk to the insurance funds4 #e4 ,easing regulatory burdens2 resource guide 7a7 ,in general ,not later than #cfj days after the date of enactment of this ,act1 the ,secretary of ,housing and ,urban ,development 7in this section referred to as the ,secretary7 shall issue a single1 uniform resource guide to inform lenders and servicers of the policies1 processes1 and procedures applicable to mortgages insured under title ,,ii of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjg et seq471 including1 but not limited to1 the policies1 processes1 and procedures of the ,secretary relating to any indemnification authority of the ,secretary1 including any criteria the ,secretary considers to be a material defect for purposes of executing such authority4 7b7 ,content ,the resource guide required under subsection 7a7 shall aggregate all forms1 policies1 and other related information set forth in any handbooks1 mortgagee letters1 guidebooks1 notices1 or bulletins issued by the ,secretary4 7c7 ,updating ,beginning on the expiration of the date set forth under subsection 7a71 whenever the ,secretary issues any new policy1 process1 or procedure1 or revises or otherwise amends any existing policy1 process1 or procedure contained in the resource guide required under subsection 7a71 such addition1 revision1 or amendment shall be issued as an amendment to the resource guide4 7d7 ,public availability2 website access ,the resource guide required under subsection 7a7 shall be made available to the public and posted on the website of the ,department of the ,housing and ,urban ,development4 7e7 ,authorization of appropriations ,there are authorized to be appropriated such sums as are necessary to carry out this section4 #f4 ,improving underwriting standards 7a7 ,in general ,not later than #ahj days after the date of enactment of this ,act1 the ,secretary of ,housing and ,urban ,development shall1 by mortgagee letter or rule1 evaluate and revise as necessary the underwriting standards for mortgages eligible to be insured under title ,,ii of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjg et seq471 which shall-- 7#a7 be based on empirically derived1 demonstrably and statistically sound models2 and 7#b7 include criteria1 the evaluation of which has historically resulted in comparatively low rates of delinquency and default during adverse economic conditions4 7b7 ,criteria ,the underwriting standards under subsection 7a7 shall include an evaluation of-- 7#a7 the current or reasonably expected income and financial resources of a borrower2 7#b7 the employment status of a borrower1 if income used under paragraph 7#a7 is employment income2 7#c7 the monthly payment of a borrower under the terms of a mortgage2 7#d7 the monthly payment for any other loan held by the borrower2 7#e7 the monthly payment for any obligations related to the mortgage2 7#f7 any other debt obligations of a borrower1 including alimony and child support2 7#g7 the monthly debt-to-income ratio or residual income of a borrower2 7#h7 the credit history of a borrower2 and 7#i7 any other risk factor or criteria1 as determined appropriate by the ,secretary4 #g4 ,ensuring adequate capital levels in the ,mutual ,mortgage ,insurance ,fund ,section #bje of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agaa7;f77 is amended-- 7#a7 in subsection 7f7-- 7,a7 in paragraph 7#b71 by striking shall ensure that the ,fund maintains at least such capital ratio at all times thereafter and inserting maintains such ratio thereafter1 subject to paragraph 7#c72 and 7,b7 by amending paragraph 7#c7 to read as follows3 7#c7 ,the ,secretary shall ensure that the ,mutual ,mortgage ,insurance ,fund attains a capital ratio of not less than #c4j percent within #aj years after the date of enactment of the ,,fha ,solvency ,act of #bjac1 and shall ensure that the ,fund maintains at least such capital ratio at all times thereafter4 2 and 7#b7 by adding at the end the following3 7g7 ,ensuring adequate capital levels in the ,mutual ,mortgage ,insurance ,fund 7#a7 ,effective date 7,a7 ,in general ,except as provided in subparagraph 7,b71 this subsection shall take effect on the date of enactment of the ,,fha ,solvency ,act of #bjac4 7,b7 ,exception for imposition of surcharges 7i7 ,in general ,paragraphs 7#d77;,d71 7#e77;,d71 and 7#f77;,d7 of this subsection-- 7,i7 shall not have any force or effect during the #b-year period beginning on the date of enactment of the ,,fha ,solvency ,act of #bjac2 and 7,,ii7 shall take effect upon the earlier of-- 7aa7 the expiration of the #b-year period set forth under subclause 7,i71 if in any annual independent actuarial study required under section #bjb7;a77#d7 the ,mutual ,mortgage ,insurance ,fund is designated as critically undercapitalized pursuant to paragraph 7#f72 7bb7 the date the independent actuary commissioned to carry out the annual independent actuarial study required under section #bjb7;a77#d7 submits the results of the fiscal year #bjaf study to the ,secretary1 if such study finds that the ,mutual ,mortgage ,insurance ,fund has not achieved the capital ratio required to be maintained under subsection 7f77#a72 7cc7 any date occurring after the date set forth under item 7bb71 but prior to any date set forth under items 7dd7 or 7ee71 if in any annual independent actuarial study required under section #bjb7;a77#d7 the independent actuary commissioned to carry out the study finds-- 7,,aa7 that in comparison to the independent actuarial study submitted in the most recent prior fiscal year1 the capital ratio of the ,fund has decreased2 and 7,,bb7 the market share for mortgages insured under this title has not been concurrently reduced thus contributing to the decrease in the capital ratio described under subitem 7,,aa72 7dd7 the date on which the ,mutual ,mortgage ,insurance ,fund attains a capital ratio of #c4j percent2 or 7ee7 the date that is #aj years after the date of enactment of the ,,fha ,solvency ,act of #bjac4 7ii7 ,rule of construction ,for purposes of this subsection1 any finding made under item 7cc7 of clause 7i77,,ii7 shall be deemed to mean that the ,mutual ,mortgage ,insurance ,fund is undercapitalized pursuant to paragraph 7#d7 and that notwithstanding the provisions of paragraph 7#d77;,d77iv71 the ,secretary shall begin or continue to collect any surcharge set forth under paragraph 7#d77;,d71 until the earlier of the date on which-- 7,i7 the next report of the ,secretary on the annual independent actuarial study required under section #bjb7;a77#d7 finds that in comparison to the independent actuarial study submitted in the most recent prior fiscal year1 the capital ratio of the ,fund has increased2 7,,ii7 the report of the ,secretary required under paragraph 7#c77;,a7 finds that in comparison to the independent actuarial study submitted in the most recent prior fiscal year1 the capital ratio of the ,fund has increased2 or 7,,iii7 the ,mutual ,mortgage ,insurance ,fund has been designated significantly undercapitalized pursuant to paragraph 7#e7 or critically undercapitalized pursuant to paragraph 7#f7 and the premium surcharge applicable to any such designation has taken effect4 7#b7 ,duty of ,chief ,risk ,officer ,following the receipt by the ,deputy ,assistant ,secretary and ,chief ,risk ,officer of the final completed report for the fiscal year of the independent actuary commissioned to carry out the annual independent actuarial study required under section #bjb7;a77#d7 analyzing the capital ratio of the ,mutual ,mortgage ,insurance ,fund1 the ,deputy ,assistant ,secretary and ,chief ,risk ,officer shall1 as part of that individual's regularly assigned duties and responsibilities1 have a duty to notify1 within #bd hours1 the ,secretary of any failure to maintain the capital ratio of the ,mutual ,mortgage ,insurance ,fund as required under subsection 7f74 7#c7 ,studies and reports 7,a7 ,for when ,fund is undercapitalized or significantly undercapitalized ,if the ,mutual ,mortgage ,insurance ,fund is designated as undercapitalized or significantly undercapitalized pursuant to paragraphs 7#d7 or 7#e71 respectively1 then not later than #ahj days after date on which the ,secretary submits the report on the annual independent actuarial study required under section #bjb7;a77#d71 and annually thereafter until such time as the ,mutual ,mortgage ,insurance ,fund achieves the capital ratio required to be maintained under subsection 7f71 the ,secretary shall provide 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 updating the results of the independent actuarial study required under section #bjb7;a77#d7 to reflect the most recently available information and analyzing the financial position of the ,fund4 7,b7 ,for when ,fund is critically undercapitalized ,if the ,mutual ,mortgage ,insurance ,fund is designated as critically undercapitalized pursuant to paragraph 7#f71 then not later than the last day of the current fiscal quarter in which the ,congress is informed of such events pursuant to paragraph 7#f77;,a71 and every fiscal quarter thereafter until such time as the ,mutual ,mortgage ,insurance ,fund achieves the capital ratio required to be maintained under subsection 7f7 or is designated as undercapitalized or significantly undercapitalized pursuant to paragraphs 7#d7 or 7#e71 respectively1 the ,secretary shall provide 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 updating the results of the independent actuarial study required under section #bjb7;a77#d7 to reflect the most recently available information and analyzing the financial position of the ,fund4 7,c7 ,failure to comply with required timelines ,if the ,secretary fails to comply with any timeline required under subparagraphs 7,a7 or 7,b71 the ,secretary shall appear before the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives within #g days of the last day of that deadline to provide testimony explaining the failure to comply4 7#d7 ,corrective actions when ,fund is undercapitalized 7,a7 ,notice to ,congress ,not later than #g days after the date on which the ,secretary is informed that the ,mutual ,mortgage ,insurance ,fund has a capital ratio of not less than #ej percent but less than #ajj percent of the capital ratio required to be maintained under subsection 7f71 the ,secretary shall notify the ,chair and ,ranking ,member of the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,chair and ,ranking ,member of the ,committee on ,financial ,services of the ,house of ,representatives of such shortfall1 and the exact date on which the ,secretary was informed of such shortfall4 7,b7 ,submission of capital restoration plan ,not later than #cj days after the date on which notice is provided under subparagraph 7,a71 the ,secretary shall submit to the ,chair and ,ranking ,member of the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,chair and ,ranking ,member of the ,committee on ,financial ,services of the ,house of ,representatives a capital restoration plan1 including a timeline for implementation of such plan1 to achieve the capital ratio required to be maintained under subsection 7f74 ,the plan required under this subparagraph shall be revised annually until such time as the ,mutual ,mortgage ,insurance ,fund achieves the capital ratio required to be maintained under subsection 7f74 7,c7 ,congressional testimony ,not later than #de days after the date on which notice is provided under subparagraph 7,a71 and annually thereafter until such time as the ,mutual ,mortgage ,insurance ,fund achieves the capital ratio required to be maintained under subsection 7f71 the ,secretary shall provide testimony 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 capital status of the ,fund and the performance or projected performance of the plan submitted under subparagraph 7,b74 7,d7 ,imposition of premium surcharge 7i7 ,in general ,notwithstanding any limitation on the amount of any premium payment set forth under section #bjc7;c71 in addition to the premiums collected under subparagraphs 7,a71 7,b71 and 7,c7 of paragraph 7#b7 of section #bjc7;c71 if the ,mutual ,mortgage ,insurance ,fund is designated as undercapitalized pursuant to this paragraph1 the ,secretary shall establish and collect annual premium payments for any newly insured mortgage for which the ,secretary collects an annual premium payment under section #bjc7;c71 except for those mortgages insured pursuant to section #bee1 in an amount described in clause 7ii74 7ii7 ,amount of surcharge ,with respect to a mortgage1 the amount described in this clause is #aj basis points of the remaining insured principal balance 7excluding the portion of the remaining balance attributable to the premium collected under paragraph 7#b77;,a7 of section #bjc7;c7 and without taking into account delinquent payments or prepayments74 7iii7 ,effective date 7,i7 ,in general ,subject to subclause 7,,ii71 the requirement to collect the annual premium payment set forth under this subparagraph shall take effect on the date that is #ahj days after the date on which notice is provided to ,congress under subparagraph 7,a74 7,,ii7 ,delay ,the effective date of the requirement to collect the annual premium payment set forth under this subparagraph may be extended for an additional #ahj days1 if prior to the expiration of the initial #ahj-;day time period described under subclause 7,i71 the report of the ,secretary required under paragraph 7#c77;,a7-- 7aa7 is submitted to ,congress2 and 7bb7 finds that the ,mutual ,mortgage ,insurance ,fund has achieved the capital ratio required to be maintained under subsection 7f74 7,,iii7 ,reinstitution of surcharge ,notwithstanding subclauses 7,i7 and 7,,ii71 if the next report of the ,secretary on the annual independent actuarial study required under section #bjb7;a77#d7 that is submitted after the report of the ,secretary described in subclause 7,,ii7 finds that the ,mutual ,mortgage ,insurance ,fund has not achieved the capital ratio required to be maintained under subsection 7f71 then the effective date of the requirement to collect the annual premium payment set forth under this subparagraph shall be the date that is #cj days after the date on which such report is submitted to ,congress4 7iv7 ,cessation of application ,the ,secretary shall not be required to collect the annual premium payment set forth under this subparagraph1 if1 at any time after the date on which such requirement has gone into effect1 either-- 7,i7 the report of the ,secretary on the annual independent actuarial study required under section #bjb7;a77#d7 finds that the ,mutual ,mortgage ,insurance ,fund has achieved the capital ratio required to be maintained under subsection 7f72 7,,ii7 the report of the ,secretary required under paragraph 7#c7 finds that the ,mutual ,mortgage ,insurance ,fund has achieved the capital ratio required to be maintained under subsection 7f72 or 7,,iii7 the ,mutual ,mortgage ,insurance ,fund has been designated significantly undercapitalized pursuant to paragraph 7#e7 or critically undercapitalized pursuant to paragraph 7#f7 and the premium surcharge applicable to any such designation has taken effect4 7#e7 ,corrective actions when ,fund is significantly undercapitalized 7,a7 ,notice to ,congress ,not later than #g days after the date on which the ,secretary is informed that the ,mutual ,mortgage ,insurance ,fund has a capital ratio of not less than #j percent but less than #ej percent of the capital ratio required to be maintained under subsection 7f71 the ,secretary shall notify the ,chair and ,ranking ,member of the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,chair and ,ranking ,member of the ,committee on ,financial ,services of the ,house of ,representatives of such shortfall1 and the date on which the ,secretary was informed of such shortfall4 7,b7 ,submission of revised capital restoration plan ,not later than #cj days after the date on which notice is provided under subparagraph 7,a71 the ,secretary shall submit to the ,chair and ,ranking ,member of the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,chair and ,ranking ,member of the ,committee on ,financial ,services of the ,house of ,representatives a capital restoration plan1 or a revised capital restoration plan1 including a timeline for implementation of such plan or revised plan1 to achieve the capital ratio required to be maintained under subsection 7f74 ,the plan required under this subparagraph shall be revised annually until such time as the ,mutual ,mortgage ,insurance ,fund achieves the capital ratio required to be maintained under subsection 7f74 7,c7 ,congressional testimony ,not later than #de days after the date on which notice is provided under subparagraph 7,a71 and every #ahj days thereafter until such time as the ,mutual ,mortgage ,insurance ,fund achieves the capital ratio required to be maintained under subsection 7f71 the ,secretary shall provide testimony 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 capital status of the ,fund and the performance or projected performance of the revised capital restoration plan submitted under subparagraph 7,b74 7,d7 ,imposition of premium surcharge 7i7 ,in general ,notwithstanding any limitation on the amount of any premium payment set forth under section #bjc7;c71 in addition to the premiums collected under subparagraphs 7,a71 7,b71 and 7,c7 of paragraph 7#b7 of section #bjc7;c71 if the ,mutual ,mortgage ,insurance ,fund is designated as significantly undercapitalized pursuant to this paragraph1 the ,secretary shall establish and collect annual premium payments for any newly insured mortgage for which the ,secretary collects an annual premium payment under section #bjc7;c71 except for those mortgages insured pursuant to section #bee1 in an amount described in clause 7ii74 7ii7 ,amount of surcharge ,with respect to a mortgage1 the amount described in this clause is #bj basis points of the remaining insured principal balance 7excluding the portion of the remaining balance attributable to the premium collected under paragraph 7#b77;,a7 of section #bjc7;c7 and without taking into account delinquent payments or prepayments74 7iii7 ,effective date 7,i7 ,in general ,subject to subclause 7,,ii71 the requirement to collect the annual premium payment set forth under this subparagraph shall take effect on the date that is #ahj days after the date on which notice is provided to ,congress under subparagraph 7,a74 7,,ii7 ,delay ,the effective date of the requirement to collect the annual premium payment set forth under this subparagraph shall be extended for an additional #ahj days1 if prior to the expiration of the initial #ahj-;day time period described under subclause 7,i71 the report of the ,secretary required under paragraph 7#c77;,a7-- 7aa7 is submitted to ,congress2 and 7bb7 finds that the ,mutual ,mortgage ,insurance ,fund-- 7,,aa7 has achieved the capital ratio required to be maintained under subsection 7f72 or 7,,bb7 has a capital ratio of not less than #ej percent but less than #ajj percent of the capital ratio required to be maintained under subsection 7f71 at which point the provisions of paragraph 7#d77;,d7 shall be applicable1 except that the provisions of clause 7iii7 of such paragraph 7#d77;,d7 shall not be applicable and that the premium surcharge applicable to such paragraph shall take effect within #cj days of the issuance of such report4 7,,iii7 ,reinstitution of surcharge ,notwithstanding subclauses 7,i7 and 7,,ii71 if the next report of the ,secretary on the annual independent actuarial study required under section #bjb7;a77#d7 that is submitted after the report of the ,secretary described in subclause 7,,ii7 finds that the ,mutual ,mortgage ,insurance ,fund has a capital ratio of not less than #j percent but less than #ej percent of the capital ratio required to be maintained under subsection 7f71 then the effective date of the requirement to collect the annual premium payment set forth under this subparagraph shall be the date that is #cj days after the date on which such report is submitted to ,congress4 7iv7 ,cessation of application ,the ,secretary shall not be required to collect the annual premium payment set forth under this subparagraph1 if1 at any time after the date on which such requirement has gone into effect1 either-- 7,i7 the report of the ,secretary on the annual independent actuarial study required under section #bjb7;a77#d7 finds that the ,mutual ,mortgage ,insurance ,fund-- 7aa7 has achieved the capital ratio required to be maintained under subsection 7f72 or 7bb7 has a capital ratio of not less than #ej percent but less than #ajj percent of the capital ratio required to be maintained under subsection 7f71 at which point the provisions of paragraph 7#d77;,d7 shall be applicable1 except that the provisions of clause 7iii7 of such paragraph 7#d77;,d7 shall not be applicable and that the premium surcharge applicable to such paragraph shall take effect within #cj days of the issuance of such report2 7,,ii7 the report of the ,secretary required under paragraph 7#c77;,a7 finds that the ,mutual ,mortgage ,insurance ,fund-- 7aa7 has achieved the capital ratio required to be maintained under subsection 7f72 or 7bb7 has a capital ratio of not less than #ej percent but less than #ajj percent of the capital ratio required to be maintained under subsection 7f71 at which point the provisions of paragraph 7#d77;,d7 shall be applicable1 except that the provisions of clause 7iii7 of such paragraph 7#d77;,d7 shall not be applicable and that the premium surcharge applicable to such paragraph shall take effect within #cj days of the issuance of such report2 or 7,,iii7 the ,mutual ,mortgage ,insurance ,fund has been designated critically undercapitalized pursuant to paragraph 7#f7 and the premium surcharge applicable to any such designation has taken effect4 7,e7 ,required examination of underwriting requirements ,if the ,mutual ,mortgage ,insurance ,fund is designated as significantly undercapitalized pursuant to this paragraph1 the ,secretary shall-- 7i7 not later than #cj days after the date on which notice is provided under subparagraph 7,a71 examine all of its product lines1 product or insurance features1 and underwriting criteria for ways to strengthen and enhance such products1 features1 or criteria to limit losses to the ,mutual ,mortgage ,insurance ,fund2 7ii7 in carrying out the requirement under clause 7i71 undertake such examination actions as are necessary to reduce the financial vulnerability of the ,mutual ,mortgage ,insurance ,fund from those risk characteristics or product lines that most contribute to the default of mortgages insured under section #bjb1 including by reviewing the underwriting and servicing standards for mortgages to be insured by the ,secretary1 including1 but not limited to1 a review of-- 7,i7 the amount of cash or its equivalent required to be paid on account of the property subject to a mortgage that is an obligation of the ,fund2 7,,ii7 servicer compliance with any loan servicing or loss mitigation guidelines of the ,secretary2 and 7,,iii7 economic conditions present in the housing market1 provided there is a demonstrated likelihood that the policies of the ,secretary would impact those economic conditions2 and 7iii7 submit to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives any analysis1 findings1 or recommendations used or made by the ,secretary to carry out the requirements of this subparagraph4 7#f7 ,corrective actions when ,fund is critically undercapitalized 7,a7 ,notice to ,congress ,not later than #g days after the date on which the ,secretary is informed that the ,mutual ,mortgage ,insurance ,fund has a capital ratio of less than #j percent of the capital ratio required to be maintained under subsection 7f71 the ,secretary shall notify the ,chair and ,ranking ,member of the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,chair and ,ranking ,member of the ,committee on ,financial ,services of the ,house of ,representatives of such shortfall1 and the date on which the ,secretary was informed of such shortfall4 7,b7 ,submission of further revised capital restoration plan ,not later than #cj days after the date on which notice is provided under subparagraph 7,a71 the ,secretary shall jointly submit with the ,secretary of the ,treasury to the ,chair and ,ranking ,member of the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,chair and ,ranking ,member of the ,committee on ,financial ,services of the ,house of ,representatives a capital restoration plan1 or a revised capital restoration plan1 including a timeline for implementation of such plan1 to achieve the capital ratio required to be maintained under subsection 7f74 ,the plan required under this subparagraph shall be revised and submitted annually with the ,secretary of the ,treasury1 until such time as the ,mutual ,mortgage ,insurance ,fund achieves the capital ratio required to be maintained under subsection 7f74 7,c7 ,congressional testimony ,not later than #de days after the date on which notice is provided under subparagraph 7,a71 and every #ahj days thereafter until such time as the ,mutual ,mortgage ,insurance ,fund achieves the capital ratio required to be maintained under subsection 7f71 the ,secretary and the ,secretary of the ,treasury shall each provide testimony 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 capital status of the ,fund and the success or failure of the further revised capital restoration plan submitted under subparagraph 7,b74 7,d7 ,imposition of premium surcharge 7i7 ,in general ,notwithstanding any limitation on the amount of any premium payment set forth under section #bjc7;c71 in addition to the premiums collected under subparagraphs 7,a71 7,b71 and 7,c7 of paragraph 7#b7 of section #bjc7;c71 if the ,mutual ,mortgage ,insurance ,fund is designated as critically undercapitalized pursuant to this paragraph1 the ,secretary shall establish and collect annual premium payments for any newly insured mortgage for which the ,secretary collects an annual premium payment under section #bjc7;c71 except for those mortgages insured pursuant to section #bee1 in an amount described in clause 7ii74 7ii7 ,amount of surcharge ,with respect to a mortgage1 the amount described in this clause is #cj basis points of the remaining insured principal balance 7excluding the portion of the remaining balance attributable to the premium collected under paragraph 7#b77;,a7 of section #bjc7;c7 and without taking into account delinquent payments or prepayments74 7iii7 ,effective date 7,i7 ,in general ,subject to subclause 7,,ii71 the requirement to collect the annual premium payment set forth under this subparagraph shall take effect on the date that is #ahj days after the date on which notice is provided to ,congress under subparagraph 7,a74 7,,ii7 ,delay ,the effective date of the requirement to collect the annual premium payment set forth under this subparagraph shall be extended for an additional #ahj days1 if prior to the expiration of the initial #ahj-;day time period described under subclause 7,i71 the report of the ,secretary required under paragraph 7#c77;,b7-- 7aa7 is submitted to ,congress2 and 7bb7 finds that the ,mutual ,mortgage ,insurance ,fund-- 7,,aa7 has achieved the capital ratio required to be maintained under subsection 7f72 7,,bb7 has a capital ratio of not less than #ej percent but less than #ajj percent of the capital ratio required to be maintained under subsection 7f71 at which point the provisions of paragraph 7#d77;,d7 shall be applicable1 except that the provisions of clause 7iii7 of such paragraph 7#d77;,d7 shall not be applicable and that the premium surcharge applicable to such paragraph shall take effect within #cj days of the issuance of such report2 or 7,,cc7 has a capital ratio of not less than #j percent but less than #ej percent of the capital ratio required to be maintained under subsection 7f71 at which point the provisions of paragraph 7#e77;,d7 shall be applicable1 except that the provisions of clause 7iii7 of such paragraph 7#e77;,d7 shall not be applicable and that the premium surcharge applicable to such paragraph shall take effect within #cj days of the issuance of such report4 7,,iii7 ,reinstitution of surcharge ,notwithstanding subclauses 7,i7 and 7,,ii71 if within #a calendar year any report of the ,secretary required under paragraph 7#c77;,b7 finds that the ,mutual ,mortgage ,insurance ,fund has a capital ratio of less than #j percent of the capital ratio required to be maintained under subsection 7f71 then the effective date of the requirement to collect the annual premium payment set forth under this subparagraph shall be the date that is #cj days after the date on which such report is submitted to ,congress4 7iv7 ,cessation of application ,the ,secretary shall not be required to collect the annual premium payment set forth under this subparagraph1 if1 at any time after the date on which such requirement has gone into effect1 either-- 7,i7 the report of the ,secretary on the annual independent actuarial study required under section #bjb7;a77#d7 finds that the ,mutual ,mortgage ,insurance ,fund-- 7aa7 has achieved the capital ratio required to be maintained under subsection 7f72 7bb7 has a capital ratio of not less than #ej percent but less than #ajj percent of the capital ratio required to be maintained under subsection 7f71 at which point the provisions of paragraph 7#d77;,d7 shall be applicable1 except that the provisions of clause 7iii7 of such paragraph 7#d77;,d7 shall not be applicable and that the premium surcharge applicable to such paragraph shall take effect within #cj days of the issuance of such report2 or 7cc7 has a capital ratio of not less than #j percent but less than #ej percent of the capital ratio required to be maintained under subsection 7f71 at which point the provisions of paragraph 7#e77;,d7 shall be applicable1 except that the provisions of clause 7iii7 of such paragraph 7#e77;,d7 shall not be applicable and that the premium surcharge applicable to such paragraph shall take effect within #cj days of the issuance of such report2 or 7,,ii7 the report of the ,secretary required under paragraph 7#c77;,b7 finds that the ,mutual ,mortgage ,insurance ,fund-- 7aa7 has achieved the capital ratio required to be maintained under subsection 7f72 7bb7 has a capital ratio of not less than #ej percent but less than #ajj percent of the capital ratio required to be maintained under subsection 7f71 at which point the provisions of paragraph 7#d77;,d7 shall be applicable1 except that the provisions of clause 7iii7 of such paragraph 7#d77;,d7 shall not be applicable and that the premium surcharge applicable to such paragraph shall take effect within #cj days of the issuance of such report2 or 7cc7 has a capital ratio of not less than #j percent but less than #ej percent of the capital ratio required to be maintained under subsection 7f71 at which point the provisions of paragraph 7#e77;,d7 shall be applicable1 except that the provisions of clause 7iii7 of such paragraph 7#e77;,d7 shall not be applicable and that the premium surcharge applicable to such paragraph shall take effect within #cj days of the issuance of such report4 7,e7 ,required enhancements to underwriting requirements ,if the ,mutual ,mortgage ,insurance ,fund is designated as critically undercapitalized pursuant to this paragraph1 the ,secretary shall-- 7i7 not later than #cj days after the date on which notice is provided under subparagraph 7,a71 take such actions as necessary to revise its product lines1 product or insurances features1 or underwriting criteria in order to strengthen and enhance such products1 features1 or criteria to limit losses to the ,mutual ,mortgage ,insurance ,fund2 7ii7 in carrying out the requirement under clause 7i71 undertake such actions as are necessary to reduce the financial vulnerability of the ,mutual ,mortgage ,insurance ,fund from those risk characteristics or product lines that most contribute to the default of mortgages insured under section #bjb1 such actions-- 7,i7 may include1 but are not limited to1 a revision of the-- 7aa7 amount of cash or its equivalent required to be paid on account of the property subject to a mortgage that is an obligation of the ,fund2 7bb7 servicer standards for compliance with any loan servicing or loss mitigation guidelines of the ,secretary2 and 7cc7 treatment of loan modification requests made by borrowers having insurance provided under this title seeking assistance under a modification program of the ,secretary2 and 7,,ii7 shall take into consideration economic conditions present in the housing market1 provided there is a demonstrated likelihood that the policies of the ,secretary would impact those economic conditions2 and 7iii7 submit to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives any relevant final analysis used by the ,secretary to carry out the requirements of this subparagraph4 7#g7 ,mandatory reevaluation ,upon the ,mutual ,mortgage ,insurance ,fund achieving the capital ratio required to be maintained under subsection 7f71 the ,secretary-- 7,a7 shall review any actions taken pursuant to this subsection2 7,b7 shall examine and determine whether-- 7i7 the need to maintain such action is necessary2 and 7ii7 the repeal1 revision1 or amendment of any such action can be carried out without having any adverse effect on the ability of the ,fund to maintain the capital ratio required under subsection 7f72 and 7,c7 may1 pursuant to any determination under subparagraph 7,b7 that no such adverse effects exist1 repeal1 revise1 or amend any such action as the ,secretary determines appropriate4 4 #h4 ,establishment of ,deputy ,assistant ,secretary and ,chief ,risk ,officer of ,,fha 7a7 ,in general ,subsection 7b7 of section #d of the ,department of ,housing and ,urban ,development ,act 7#db ,u4,s4,c4 #cecc7;b77 is amended-- 7#a7 by striking ,there shall be and inserting the following3 7#a7 ,establishment of ,commissioner ,there shall be 2 and 7#b7 by adding at the end the following3 7#b7 ,establishment of ,deputy ,assistant ,secretary and ,chief ,risk ,officer 7,a7 ,appointment ,there shall be in the ,department1 within the ,federal ,housing ,administration1 a ,deputy ,assistant ,secretary and ,chief ,risk ,officer1 who shall be appointed by the ,secretary and shall be responsible to the ,federal ,housing ,commissioner for all matters relating to managing and mitigating risk to the mortgage insurance funds of the ,department and ensuring the performance of mortgages insured by the ,department to protect borrowers and taxpayers4 7,b7 ,responsibilities ,the ,deputy ,assistant ,secretary and ,chief ,risk ,officer established under subparagraph 7,a7 shall have-- 7i7 comprehensive risk management and regulatory knowledge in key risks1 including credit1 interest rate1 and operational risk2 7ii7 a sound understanding of the tools and methodologies used to measure and quantify risk1 including the use of statistical models2 and 7iii7 a broad understanding and knowledge of mortgage industry best practices for risk management4 7,c7 ,underwriting report 7i7 ,in general ,not later than #a year after the date of enactment of the ,,fha ,solvency ,act of #bjac1 and annually thereafter1 the ,deputy ,assistant ,secretary and ,chief ,risk ,officer 7or1 if not yet appointed1 the ,commissioner of the ,federal ,housing ,administration7 shall prepare a report on the underwriting standards for mortgages insured under title ,,ii of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjg et seq471 which shall be submitted by the ,secretary to-- 7,i7 the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate2 and 7,,ii7 the ,committee on ,financial ,services of the ,house of ,representatives4 7ii7 ,contents ,the report required under clause 7i7 shall include-- 7,i7 for all mortgages insured under title ,,ii of the ,national ,housing ,act that were made not less than #f months and not more than #cf months before the date of the report1 an identification of the default risk characteristics as such characteristics existed at the time of origination of the mortgage based on risk factors that are commonly used in evaluating mortgage default risk1 including-- 7aa7 the current or reasonably expected income and financial resources of a borrower2 7bb7 the employment status of a borrower1 if income used under item 7aa7 is employment income2 7cc7 the monthly mortgage payment of a borrower under the terms of a mortgage2 7dd7 the monthly payment for any other loan held by the borrower2 7ee7 the monthly payment for any obligations related to the mortgage2 7ff7 any other debt obligations of a borrower1 including alimony and child support2 7gg7 the monthly debt-to-income ratio or residual income of a borrower2 7hh7 the credit history of a borrower2 and 7ii7 any other risk factor1 as determined appropriate by the ,secretary2 7,,ii7 in tabular format1 the number of mortgages insured under title ,,ii of the ,national ,housing ,act that are in default and the rate of default for-- 7aa7 each for the characteristics described in subclause 7,i72 7bb7 any multi-way combination of the characteristics in subclause 7,i7 as determined appropriate by the ,secretary2 and 7cc7 any additional multi-way combination of the characteristics in subclause 7,i7 as may be requested by the ,chair or ,ranking ,member of the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate or the ,chair or ,ranking ,member of the ,committee on ,financial ,services of the ,house of ,representatives1 provided that the ,deputy ,assistant ,secretary and ,chief ,risk ,officer 7or1 if not yet appointed1 the ,commissioner of the ,federal ,housing ,administration7 shall be provided an additional #cj days from the date of receipt of such request to satisfy such request2 7,,iii7 an analysis of mortgages insured under title ,,ii of the ,national ,housing ,act that were made not less than #f months and not more than #cf months before the date of the report and are in the lowest quartile and decile of loan performance1 which shall include-- 7aa7 a description of the characteristics described in subclause 7,i7 for mortgages in the lowest quartile and decile of loan performance2 and 7bb7 a comparison of the characteristics described in subclause 7,i7 between mortgages in the lowest quartile and decile of loan performance and all other mortgages insured under title ,,ii of the ,national ,housing ,act2 7,,iv7 recommendations by the ,deputy ,assistant ,secretary and ,chief ,risk ,officer for revisions to the underwriting standards of the ,secretary for mortgages eligible to be insured under title ,,ii of the ,national ,housing ,act based on the findings of the report1 and a response to those recommendations from the ,secretary2 and 7,v7 a quantitative analysis of the effects of any revisions to the underwriting standards made by the ,secretary in response to the findings of a prior report1 and any recommendations of the ,deputy ,assistant ,secretary and ,chief ,risk ,officer in response to those revisions4 4 7b7 ,conforming amendment ,section #bjb7;a77#d7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjh7;a77#d77 is amended by inserting after the first sentence the following3 ,the independent actuary commissioned to carry out the annual independent actuarial study required under this paragraph shall submit such study to the ,deputy ,assistant ,secretary and ,chief ,risk ,officer44 #i4 ,disclosure of events ,section #bjb7;a77#d7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjh7;a77#d77 is amended-- 7#a7 by striking ,the ,secretary shall and inserting the following3 7#a7 ,in general ,the ,secretary shall 2 and 7#b7 by adding at the end the following3 7#b7 ,disclosure of unforeseen events 7,a7 ,in general ,prior to the submission of any report of the ,secretary under paragraph 7#a71 the ,secretary shall require that the independent actuary commissioned to perform the study required under paragraph 7#a7 disclose to the ,secretary any events or circumstances that occur after the study is completed but before the report is submitted to ,congress and that would have resulted in changes to the inputs or assumptions the actuary used to make forecasts about the financial position of the ,fund1 if such changes are sufficiently significant that a reasonable person would expect them to substantially alter the actuary's forecasts of the economic value of the ,fund or the actuary's projections relating to the capital reserve ratio of the ,fund4 7,b7 ,informing ,congress ,the ,secretary shall inform ,congress of any disclosures required under subparagraph 7,a7 either by-- 7i7 the submission of an addendum to the report of the ,secretary required under paragraph 7#a72 or 7ii7 a letter from the ,secretary addressed to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives4 4 #aj4 ,,gao study on disclosures 7a7 ,in general ,not later than #ahj days after the date of enactment of this ,act1 the ,comptroller ,general of the ,united ,states shall conduct a one-time study of the relevant information disclosed by the ,secretary of ,housing and ,urban ,development in conjunction with the release of the annual actuarial report of the ,secretary required under section #bjb7;a77#d7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjh7;a77#d774 7b7 ,required consultation ,in conducting the study required under subsection 7a71 the ,comptroller ,general shall consult1 as appropriate1 with prominent ,united ,states academics with national recognition and significant depth of experience in the housing market and the performance of high loan-to-value lending4 7c7 ,required review ,in carrying out the study required under subsection 7a71 the ,comptroller ,general shall review and make recommendations regarding-- 7#a7 if a reasonable amount of relevant data and analyses are being disclosed by the ,secretary of ,housing and ,urban ,development to the public1 for research1 in conjunction with the release of the annual actuarial report of the ,secretary required under section #bjb7;a77#d7 of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjh7;a77#d772 and 7#b7 the disclosure by the ,secretary of additional relevant data and analyses to the public1 for research purposes4 7d7 ,follow up ,not later than #ab months after the release of the study required under subsection 7a71 the ,comptroller ,general shall conduct an additional report regarding the actions of the ,secretary of ,housing and ,urban ,development in carrying out any recommendations of the ,comptroller ,general made pursuant to subsection 7c77#b74 #aa4 ,stabilizing the ,,hecm program 7a7 ,in general ,section #bee of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agaez-#bj7 is amended-- 7#a7 in subsection 7d77#h7-- 7,a7 by inserting property maintenance1 before insurance2 and 7,b7 by inserting 1 including matters that set forth terms and provisions for establishing escrow accounts1 performing financial assessments1 or limiting the amount of any payment made available under the mortgage before the semicolon2 and 7#b7 in subsection 7h7-- 7,a7 in paragraph 7#a71 by striking 2 and and inserting a semicolon2 7,b7 in paragraph 7#b71 by striking the period and inserting 2 and2 and 7,c7 by adding at the end the following new paragraph3 7#c7 by notice or mortgagee letter1 establish any additional or alternative requirements that the ,secretary1 in his or her discretion1 determines necessary to more effectively carry out the purposes of the program authorized under this section1 and any such notice or mortgagee letter shall take effect upon issuance and expire not later than #bd months after the date of issuance of the notice or mortgagee letter4 4 7b7 ,rulemaking 7#a7 ,in general ,in carrying out the authority provided to the ,secretary of ,housing and ,urban ,development under section #bee7;h77#c7 of the ,national ,housing ,act1 as added by subsection 7a71 the ,secretary shall-- 7,a7 not later than #ij days after the issuance of the notice or mortgagee letter pursuant to such section1 issue a notice of proposed rulemaking addressing the same additional or alternative requirements that are the subject of the notice or mortgagee letter2 and 7,b7 not later than #bd months after the issuance of the notice of proposed rulemaking required under subparagraph 7,a7-- 7i7 issue a final rule addressing the same additional or alternative requirements that are the subject of the notice or mortgagee letter2 or 7ii7 withdraw the notice or mortgagee letter4 7#b7 ,failure to comply ,if the ,secretary of ,housing and ,urban ,development fails to issue a final rule by the end of the period described under paragraph 7#a77;,b7-- 7,a7 the provisions of the notice or mortgagee letter at issue shall become null and void2 7,b7 the ,secretary-- 7i7 shall not have authority to reissue such notice or mortgagee letter2 and 7ii7 may only address the requirements that are the subject of the notice or mortgagee letter at issue through the promulgation of a regulation pursuant to the rulemaking requirements of title #e1 ,united ,states ,code2 and 7,c7 the ,secretary and the ,director of ,office of ,management and ,budget shall appear before the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives to provide testimony explaining the failure to comply with the requirements of this subsection4 #ab4 ,publication of final rules relating to limiting seller contributions towards purchase related expenses 7a7 ,required completion of rule ,not later than #ij days after the date of enactment of this ,act1 the ,secretary of ,housing and ,urban ,development shall-- 7#a7 issue and publish its final rule to implement the proposed rule entitled ,federal ,housing ,administration 7,,fha7 ,risk ,management ,initiatives3 ,revised ,seller ,concessions 7#gg ,fed4 ,reg4 #ajfie 7,february #bc1 #bjab772 and 7#b7 ensure that the final rule required under paragraph 7#a7-- 7,a7 limits the amount a seller or interested third party1 or both1 may contribute towards the purchase-related expenses of a borrower without reducing the maximum insured amount of a mortgage insured under title ,,ii of the ,national ,housing ,act 7#ab ,u4,s4,c4 #agjg et seq472 and 7,b7 defines the acceptable types of expenses that a seller or interested third party1 or both1 may contribute under subparagraph 7,a71 such as closing costs1 prepaid expenses1 discount points1 up-front mortgage insurance premiums1 and interest rate buydowns4 7b7 ,failure ,to comply ,if the ,secretary of ,housing and ,urban ,development fails to issue a final rule by the end of the period described under subsection 7a71 the ,secretary and the ,director of ,office of ,management and ,budget shall appear before the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives to provide testimony explaining the failure to comply with the requirements of this section4