A bill to temporarily raise conforming loan limits in high cost areas and portfolio caps applicable to Freddie Mac and Fannie Mae, to provide the necessary financing to curb foreclosures by facilitating the refinancing of at-risk subprime borrowers into safe, prime loans, to preserve liquidity in the mortgage lending markets, and for other purposes.

Summary: Protecting Access to Safe Mortgages Act - Amends the Federal National Mortgage Association Charter Act and the Federal Home Loan Mortgage Corporation Act to increase mortgage portfolio limitations placed upon: (1) the Federal National Mortgage Association (Fannie Mae); and (2) the Federal Home Loan Mortgage Corporation (Freddie Mac), respectively.

Instructs the Director of the Office of Federal Housing Enterprise Oversight (OFHEO) of the Department of Housing and Urban Development (HUD) to lift: (1) the limitation on growth provision set forth in the Fannie Mae Consent Decree; and (2) the voluntary temporary growth limitation described in a certain Freddie Mac Letter.

Requires 50% of such portfolio increase to be used on loans which have had or will have interest rate resets between June 2005 and December 2009.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protecting Access to Safe Mortgages 
Act''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) American families will be severely harmed by an 
        unprecedented wave of potential foreclosures expected to occur 
        in the next 12 months, as adjustable rate subprime mortgages 
        reset to higher interest rates;
            (2) preventing such foreclosures and facilitating the 
        refinancing of at-risk subprime borrowers into safe prime loans 
        will require additional capacity on the part of the government 
        sponsored enterprises, the Federal National Mortgage 
        Association, and the Federal Home Loan Mortgage Association, 
        and any affiliates thereof, to purchase additional financing;
            (3) there is a lack of liquidity in the financial markets 
        for mortgage backed securities, which threatens to impair 
        financing for all mortgages; and
            (4) the government sponsored enterprises, the Federal 
        National Mortgage Association, and the Federal Home Loan 
        Mortgage Corporation, and any affiliates thereof, are uniquely 
        positioned to provide the financing necessary to alleviate the 
        predicted wave of upcoming foreclosures, and the liquidity 
        necessary to help United States markets.

SEC. 3. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Director.--The term ``Director'' means the Director of 
        the Office of Federal Housing Enterprise Oversight of the 
        Department of Housing and Urban Development.
            (2) Enterprise.--The term ``enterprise'' means--
                    (A) the Federal National Mortgage Association, and 
                any affiliate thereof; and
                    (B) the Federal Home Loan Mortgage Corporation, and 
                any affiliate thereof.
            (3) Fannie mae consent decree.--The term ``Fannie Mae 
        Consent Decree'' means the order of the Office of Federal 
        Housing Enterprises Oversight dated May 23, 2006, in the matter 
        of the Federal National Mortgage Association.
            (4) Freddie mac letter.--The term ``Freddie Mac Letter'' 
        means the letter dated July 31, 2006, from the Chairman and 
        Chief Executive Officer of the Federal Home Loan Mortgage 
        Corporation to the Director.
            (5) OFHEO.--The term ``OFHEO'' means the Office of Federal 
        Housing Enterprises Oversight.

SEC. 4. AMENDMENTS TO CONFORMING LOAN LIMITS.

    (a) Fannie Mae.--Section 302(b)(2) of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1717(b)(2)) is amended by adding at 
the end the following: ``During the 1-year period beginning on the date 
of enactment of the Protecting Access to Safe Mortgages Act, the 
limitations established under this paragraph shall be increased with 
respect to properties of a particular size located in any area for 
which the median price for such size residence exceeds the foregoing 
limitations for such size residence, to the lesser of 150 percent of 
such foregoing limitation for such size residence or the amount that is 
equal to the median price in such area for such size residence.''.
    (b) Freddie Mac.--Section 305(a)(2) of the Federal Home Loan 
Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended by adding at 
the end the following: ``During the 1-year period beginning on the date 
of enactment of the Protecting Access to Safe Mortgages Act, the 
limitations established under this paragraph shall be increased with 
respect to properties of a particular size located in any area for 
which the median price for such size residence exceeds the foregoing 
limitations for such size residence, to the lesser of 150 percent of 
such foregoing limitation for such size residence or the amount that is 
equal to the median price in such area for such size residence.''.

SEC. 5. LIFTING OF PORTFOLIO CAPS.

    (a) In General.--Immediately upon the date of enactment of this 
Act, the Director shall terminate, suspend, modify, or otherwise lift--
            (1) the limitation on growth provision set forth in section 
        4, Article III of the Fannie Mae Consent Decree; and
            (2) the voluntary temporary growth limitation described in 
        the Freddie Mac Letter.
    (b) Factors.--In carrying out subsection (a), the Director shall 
increase the mortgage portfolio limitations of both enterprises by not 
less than 10 percent, unless the Director certifies in writing to the 
Committee on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representatives, and 
demonstrates by compelling evidence that such action is likely to 
result in a significant depletion of the core capital of an enterprise, 
or otherwise create an unsafe and unsound condition.
    (c) Allocation.--Fifty percent of the portfolio increase described 
in subsection (b) shall be used on loans which have had or will have 
interest rate resets between June 2005 and December 2009.

SEC. 6. SUNSET PROVISION.

    This Act and the amendments made by this Act are repealed, 
effective 1 year after the date of enactment of this Act.