,i  #aae? ,,congress  #a/ ,session  ,h4 
,r4 #ceef  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,july #bh1 #bjag,mr4  
,royce ( ,cali=nia 7= himself & ,ms4    
,moore7 introduc$ ! foll[+ bill2 :i* 0  
ref]r$ to ! ,committee on ,f9ancial     
,s]vices1 & 9 addition to ! ,committees 
on ,ways & ,means1 & ,agriculture1 = a  
p]iod to be subsequ5tly det]m9$ by !    
,speak]1 9 ea* case = consid]ation ( su*
 provisions z fall )9 ! jurisdiction ( !
 committee conc]n$  ,a ,,bill  ,to      
require ,fannie ,mae & ,fr$die ,mac to  
engage 9 cr$it risk transf]             
transactions1 & = o!r purposes4  #a4    
,%ort title ,?is ,act may be cit$ z !   
,taxpay] ,protections & ,m>ket ,access =
 ,mortgage ,f9ance ,act ( #bjag4  #b4   
,cr$it risk-transf] transactions  7a7   
,requirem5t = ent]prises ,subp>t ,a ( "p
 #b ( subtitle ,a ( ! ,f$]al ,h\s+      
,ent]prises ,f9ancial ,safety &         
,s\ndness ,act ( #aiib 7#ab ,u4,s4,c4   
#deda et seq47 is am5d$ by add+ at ! end
 ! foll[+ new section3  #acbh4          

,ent]prise cr$it risk-transf]           
transactions  7a7 ,requirem5t ,n lat]   
?an #ab mon?s aft] ! date ( enactm5t (  
?is ,act1 ! ,director %all1 aft] tak+   
into consid]ation m>ket conditions & !  
safety & s\ndness ( ! ent]prises1       
e/abli% guidel9es requir+ t ea*         
ent]prise engage 9 significant1         
increas+1 & v>i$ cr$it risk-transf]     
transactions1 ) an emphasis on front-end
 transactions4  7b7 ,consid]ations ,9   
e/abli%+ ! guidel9es "u subsection 7a71 
! ,director %all-- 7#a7 seek to promote 
a deep1 broad m>ket = a v>iety (        
/ructures t toge!r insulate ! taxpay] f 
losses1 m9imize ongo+ risks to !        
ent]prises1 rema9 /able ?r\gh ! economic
 cycle1 ma9ta9 adequate access to !     
second>y m>ket = l5d]s ( all sizes1 &   
promote cr$it = borr[]s 9 all           
communities2  7#b7 cont9ue & seek to    
increase ! am\nt ( cr$it risk transf]r$ 
to ! private sector & ! types (         
risk-transf] transactions t ! ent]prises
 engag$ 9 ea* ye> ) ! goal t ! risk     

transf]r$ by an ent]prise by all cr$it  
risk-transf] transactions %all be at    
lea/ #djj basis po9ts ( risk 9 total1   
/>t+ f ! fir/ doll> ( cr$it loss among  
all ! diff]5t cr$it risk-transf]        
/ructures2  7#c7 cont9ue & seek to      
increase front-end risk transf]         
transactions1 includ+ ^? done at ! "t ( 
orig9ation2 &  7#d7 cont9ue & seek to   
increase transactions 9 :i* ! fir/ loss 
position is transf]r$ or %>$ & ?r\gh    
/ructures t are scalable & transp>5t4   
7c7 ,gu>antee fees ,! ent]prises %all   
set & publi% gu>antee fees1 includ+     
up-front deliv]y fees & loan level price
 adju/m5ts1 comm5surate ) ! ent]prises' 
r$uc$ cr$it risk result+ f any new      
risk-transf] transaction4  7d7 ,,apa    
compliance ,! guidel9es requir$ "u      
subsection 7a7 %all be issu$ & made     
available to ! public pursuant to       
section #eec ( title #e1 ,unit$ ,/ates  
,code4  7e7 ,comp5sation ,! ,director   
%all adju/ individual & corporate       
scorec>ds us$ 9 det]m9+ comp5sation =   

relevant ent]prise employees to align ) 
! consid]ations ( subsection 7b74  7f7  
,exemption f c]ta9 ,commodity ,ex*ange  
,act provisions ,a swap 7z su* t]m is   
def9$ 9 section #a;a ( ! ,commodity     
,ex*ange ,act 7#g ,u4,s4,c4 #a;a77 ent]$
 into = ! purpose ( transf]r+ or %>+    
cr$it risk 9 connection ) a risk-transf]
 transaction %all n be deem$ to be a    
commodity int]e/ 7z su* t]m is def9$ 9  
section #a4c7yy7 ( ! regulations ( !    
,commodity ,futures ,trad+ ,commission  
7#ag ,c4,f4,r4 #a4c7yy7771 & no swap    
c\nt]p>ty or o!r p]son sponsor+ or      
arrang+ a risk-transf] transaction %all 
be deem$ to be a commodity pool op]ator 
7z su* t]m is def9$ 9 section #a4c7;cc7 
( su* regulations71 solely by virtue (  
ent]+ into or sponsor+ or arrang+ su* a 
swap 9 connection ) su* transaction4    
7g7 ,report ,! ,director %all submit a  
report1 n lat] ?an ,octob] #cj ( ea*    
ye>1 to ! ,committee on ,f9ancial       
,s]vices ( ! ,h\se ( ,repres5tatives & !
 ,committee on ,bank+1 ,h\s+1 & ,urban  

,affairs ( ! ,s5ate1 on ! activities (  
ea* ent]prise 9 meet+ ! guidel9es       
e/abli%$ "u subsection 7a7 & any        
ob/acles ! ,director has det]m9$ h imp$$
 ! ability ( ! ent]prises to meet su*   
guidel9es4  7h7 ,def9itions ,= purposes 
( ?is section1 ! foll[+ def9itions %all 
apply3 7#a7 ,cr$it risk ,! t]m cr$it    
risk means1 ) respect to a mortgage loan
 on a "o- to f\r-family resid5tial      
prop]ty t is held or gu>ante$1 or int5d$
 to be held or gu>ante$1 by an ent]prise
 or any security back$ by su* resid5tial
 mortgage loans held or gu>ante$ by !   
ent]prise1 ! risk ( loss to ! ent]prise 
t c\ld result f a mortgagor's failure to
 repay any su* loan 9 accordance ) its  
t]ms4  7#b7 ,fir/ loss ,! t]m fir/-loss 
means ! risk ( loss = an ent]prise on a 
mortgage loan on a "o- to f\r-family    
resid5tial prop]ty or a security back$  
by su* resid5tial mortgage loans1 beg9n+
 ) ! fir/ doll> ( loss4  7#c7 ,front-end
 risk transf] ,! t]m front-end risk     
transf] means1 ) respect to a mortgage  

loan on a "o- to f\r-family resid5tial  
prop]ty or any security back$ by su*    
resid5tial mortgage loans1 a risk       
transf] or risk %>e t occurs be=e or    
simultane\s ) ! acquisition ( su* loan  
or security by an ent]prise4  7#d7      
,gu>antee fee ,! t]m gu>antee fee has ! 
mean+ giv5 su* t]m 9 section #acbg7;a7  
7#ab ,u4,s4,c4 #dedg7;a774  7#e7        
,risk-transf] transaction ,! t]m        
risk-transf] transaction means any      
transaction t provides =--  7,a7 ! sale1
 disposition1 ret5tion1 or transf] )9 ! 
private sector ( cr$it risk on any      
resid5tial mortgage loan on a "o- to    
f\r-family resid5tial prop]ty or a pool 
( su* resid5tial mortgage loans t back  
securities on :i* ! ent]prise gu>antees 
! timely paym5t ( pr9cipal & int]e/2 or 
7,b7 ! ret5tion by ! private sector (   
any su* cr$it risk 9 connection ) ! sale
 ( any su* loan or security to an       
ent]prise4  4  7b7 ,con=m+ am5dm5t to   
,commodity ,ex*ange ,act ,p>agraph 7#aj7
 ( section #a;a ( ! ,commodity ,ex*ange 

,act 7#g ,u4,s4,c4 #a;a7#aj77 is am5d$  
by add+ at ! end ! foll[+ new           
subp>agraph3  7,c7 ,rule ( con/ruction  
,a swap 7z su* t]m is def9$ 9 section   
#a;a7 ent]$ into = ! purpose ( transf]r+
 or %>+ cr$it risk 9 connection ) a     
risk-transf] transaction %all n be      
consid]$ to be a commodity int]e/ 7z su*
 t]m is def9$ 9 section #a4c7yy7 ( title
 #ag1 ,code ( ,f$]al ,regulations71 & no
 swap c\nt]p>ty or o!r p]son sponsor+ or
 arrang+ a risk-transf] transaction %all
 be consid]$ to be a commodity pool     
op]ator 7z su* t]m is def9$ 9 section   
#a4c7;cc7 ( su* title71 solely by virtue
 ( ent]+ into or sponsor+ or arrang+ su*
 a swap 9 connection ) su* transaction4 
4  7c7 ,con=m+ am5dm5ts to exi/+ laws   
7#a7 ,inve/m5t ,company ,act ( #aidj    
,section #c7;c77#e7 ( ! ,inve/m5t       
,company ,act ( #aidj 7#ae ,u4,s4,c4    
#hj;a-#c7;c77#e77 is am5d$ by ins]t+    
be=e ! p]iod ! foll[+3 1 includ+ notes1 
bonds1 o!r evid5ces ( indebt$ness1      
c]tificates1 securities1 & o!r int]e/s1 

issu$ 9 connection ) or o!rwise relat$  
to a risk-transf] transaction 7z su* t]m
 is def9$ 9 section #acbh7;h7 ( ! ,f$]al
 ,h\s+ ,ent]prises ,f9ancial ,safety &  
,s\ndness ,act ( #aiib74  7#b7 ,asset & 
income te/ cl>ification = ent]prise     
risk-transf] transactions ,! ,int]nal   
,rev5ue ,code ( #aihf is am5d$-- 7,a7 9 
ea* ( p>agraphs 7#b77;,b7 & 7#c77;,b7 ( 
section #hef7;c7 7#bf ,u4,s4,c4         
#hef7;c771 by ins]t+ be=e ! semicolon at
 ! end ! foll[+ 1 & gross income result+
 f p>ticipation 9 any transaction1      
includ+ notes1 bonds1 o!r evid5ces (    
indebt$ness1 c]tificates1 securities1 & 
o!r int]e/s1 t are risk-transf]         
transactions 7z su* t]m is def9$ 9      
section #acbh7;h7 ( ! ,f$]al ,h\s+      
,ent]prises ,f9ancial ,safety &         
,s\ndness ,act ( #aiib72 &  7,b7 9      
subp>agraph 7,b7 ( section #hef7;c77#e7 
7#bf ,u4,s4,c4 #hef7;c77#e77;,b771 by   
ins]t+ be=e ! p]iod at ! end ( ! fir/   
s5t5ce ! foll[+3 1 & p>ticipation 9 any 
transaction1 includ+ notes1 bonds1 o!r  

evid5ces ( indebt$ness1 c]tificates1    
securities1 & o!r int]e/s1 t are        
risk-transf] transactions 7z su* t]m is 
def9$ 9 section #acbh7;h7 ( ! ,f$]al    
,h\s+ ,ent]prises ,f9ancial ,safety &   
,s\ndness ,act ( #aiib74  #c4 ,pilot    
program = small l5d] risk transf]  7a7  
,9 g5]al ,n lat] ?an "o ye> aft] ! date 
( ! enactm5t ( ?is ,act1 ! ,director ( !
 ,f$]al ,h\s+ ,f9ance ,ag5cy %all       
require ea* ent]prise 7z su* t]m is     
def9$ 9 section #acjc ( ! ,f$]al ,h\s+  
,ent]prises ,f9ancial ,safety &         
,s\ndness ,act ( #aiib 7#ab ,u4,s4,c4   
#dejb77 to e/abli% a pilot program "u   
:i* ! ent]prise %all annually engage1 = 
ea* ( ! next #e consecutive ye>s1 9 at  
lea/ "o front-end risk-transf]          
transaction = :i* at lea/ #ge p]c5t ( ! 
cr$it risk transf]r$ is transf]r$ to    
bank or non-bank mortgage orig9ators    
hav+ "u #aj1jjj1jjj1jjj 9 assets4  7b7  
,report ,n lat] ?an ! conclusion ( !    
fif? ye> ( ! pilot program1 ! ,director 
%all submit a report to ! ,congress t   

assesses ! ext5t to :i* ! pilot program 
"u ?is section has--  7#a7 transf]r$    
cr$it risk f ! ,f$]al ,gov]nm5t to      
mortgage orig9ators2 &  7#b7 result$ 9  
increas$ p>ticipation 9 cr$it           
risk-transf] transactions by bank or    
non-bank mortgage orig9ators hav+ "u    
#aj1jjj1jjj1jjj 9 assets4  7c7 ,ext5sion
 ( program ,bas$ on ! assessm5ts 9 !    
report requir$ "u subsection 7b71 !     
,director may ext5d ! program beyond its
 fif? ye> ( op]ation if ! ,director     
det]m9es t su* ext5sion w\ld be 9 !     
public int]e/4  #d4 ,pilot program =    
mortgage insurance risk transf]  7a7 ,9 
,g5]al ,n lat] ?an "o ye> aft] ! date ( 
! enactm5t ( ?is ,act1 ! ,director %all 
require ea* ent]prise to e/abli% a pilot
 program to increase ! am\nt ( risk t is
 %>$ by ! ent]prise us+ private mortgage
 insurance4  7b7 ,program requirem5ts   
,ea* pilot program e/abli%$ pursuant to 
subsection 7a7 %all meet ! foll[+       
requirem5ts3 7#a7 ,duration ,! pilot    
program %all h a duration ( #e ye>s4    

7#b7 ,am\nt ( mortgage pur*ases  7,a7 ,9
 g5]al ,except z provid$ 9 subp>agraph  
7,b71 9 ea* ye> ea* ent]prise %all      
pur*ase "u its pilot program suffici5t  
qualify+ loans or pools ( qualify+ loans
 su* t ! aggregate unpaid pr9cipal      
balance ( all qualify+ loans or loan    
pools pur*as$ by ! ent]prise is n less  
?an #be1jjj1jjj1jjj4  7,b7 ,exception ,!
 am\nt ( qualify+ loans t ea* ent]prise 
is requir$ to pur*ase ea* ye> "u        
p>agraph 7#a7 may be r$uc$ if !         
,director & ! ,secret>y ( ! ,treasury   
jo9tly--  7i7 make a det]m9ation t su* a
 r$uction is necess>y to prev5t an      
adv]se impact to ! h\s+ m>ket2 &  7ii7  
submit to ! ,congress a report describ+ 
! ju/ification = ! det]m9ation ref]r$ to
 9 clause 7i74  7#c7 ,selection (       
mortgage insurance ,= ea* transaction "u
 ! pilot program involv+ a qualify+     
loan1 ! loan orig9ator %all select an   
eligible mortgage insurance provid] or  
provid]s1 consi/5t ) exi/+ m>ket        
practice4  7#d7 ,mortgage insurance     

premiums ,mortgage insurance premiums   
applicable to qualify+ loans pur*as$ by 
an ent]prise "u ! pilot program %all be 
subject to requirem5ts & limitations "u 
applicable ,/ate laws4  7#e7 ,gu>antee  
fees ,ea* ent]prise %all set & publi%   
gu>antee fees1 includ+ up-front deliv]y 
fees & loan level price adju/m5ts1      
comm5surate ) ! ent]prise's r$uc$ cr$it 
risk result+ f any new risk-transf]     
transaction "u ! pilot program4  7c7    
,report ,n lat] ?an ! conclusion ( !    
fif? ye> ( ! pilot program1 ! ,director 
%all submit a report to ! ,congress t   
assesses ! ext5t to :i* ! pilot program 
"u ?is section has--  7#a7 transf]r$    
cr$it risk f ! ent]prises to ! private  
sector2  7#b7 result$ 9 r$uc$ gu>antee  
fees = mortgage orig9ators2 &  7#c7     
produc$ b5efits or co/s = borr[]s "u    
qualify+ loans "u ! program4  7d7       
,ext5sion ( program ,bas$ on !          
assessm5ts 9 ! report requir$ "u        
subsection 7c71 ! ,director may ext5d ! 
program beyond its fif? ye> ( op]ation  

if ! ,director det]m9es t su* ext5sion  
w\ld be 9 ! public int]e/4  7e7         
,mitigat+ c\nt]p>ty risk ,no?+ 9 ?is    
section %all prev5t ! ,director f       
e/abli%+ additional requirem5ts on      
p>ticipants 9 ! pilot program necess>y  
to mitigate c\nt]p>ty risk to !         
ent]prises comp>able to o!r cr$it       
risk-transf] /ructures4  7f7 ,def9itions
 ,= purposes ( ?is section1 ! foll[+    
def9itions %all apply3 7#a7 ,director ,!
 t]m ,director means ! ,director ( !    
,f$]al ,h\s+ ,f9ance ,ag5cy4  7#b7      
,eligible mortgage insurance provid] ,! 
t]m eligible mortgage insurance provid] 
means a company t-- 7,a7 is regulat$ z a
 mortgage gu>anty insurance company by  
its ,/ate ( domicile2  7,b7 provides    
qualify+ mortgage insurance2 &  7,c7    
satisfies--  7i7  7,i7 m9imum           
requirem5ts e/abli%$ or recogniz$ by !  
,director1 pursuant to public notice &  
comm5t1 ) respect to capital1 lev]age1 &
 res]ve requirem5ts2 or  7,,ii7 ,private
 ,mortgage ,insur] ,eligibility         

,requirem5ts publi%$ by ! ent]prises on 
,april #ag1 #bjae2 &  7ii7 any          
additional requirem5ts add$ by          
subsection 7e7 ( ?is section4  7#c7     
,ent]prise ,! t]m ent]prise has ! mean+ 
giv5 su* t]m 9 section #acjc ( ! ,f$]al 
,h\s+ ,ent]prises ,f9ancial ,safety &   
,s\ndness ,act ( #aiib 7#ab ,u4,s4,c4   
#dejb74  7#d7 ,qualify+ loan ,! t]m     
qualify+ loan means a fir/ mortgage loan
 t-- 7,a7 is secur$ by a "o- to         
f\r-family resid5ce2 &  7,b7 is subject 
to qualify+ mortgage insurance4  7#e7   
,qualify+ mortgage insurance ,! t]m     
qualify+ mortgage insurance means1 )    
respect to a qualify+ loan1 prim>y      
mortgage gu>anty insurance = su*        
qualify+ loan t--  7,a7 is plac$ at ! "t
 ! qualify+ loan is orig9at$2  7,b7     
gu>antees or insures t portion ( !      
unpaid pr9cipal balance ( ! qualify+    
loan t is 9 excess ( #ej p]c5t ( ! value
 ( ! prop]ty secur+ ! mortgage2 &  7,c7 
is provid$ by an eligible mortgage      
insurance provid]4  #e4 ,rule (         

con/ruction ,no?+ 9 ?is ,act or !       
am5dm5ts made by ?is ,act %all be       
affect$ solely by t]m9ation ( !         
cons]vator%ip ( an ent]prise pursuant to
 section #acfg ( ! ,f$]al ,h\s+         
,ent]prises ,f9ancial ,safety &         
,s\ndness ,act ( #aiib 7#ab ,u4,s4,c4   
#dfag74