A bill to provide for the expansion of affordable refinancing of mortgages held by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.

Summary: Responsible Homeowners Refinancing Act of 2012 - Requires the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) (government sponsored enterprises or GSEs), in carrying out the Home Affordable Refinance Program, to adopt specified criteria pertaining to: (1) borrower eligibility, (2) representations and warranties, (3) prohibition on up-front fees, (4) alternative streamlined methods to appraise the value of a property, (5) an administrative penalty for lien-holder refusal to resubordinate junior liens, (6) carryover of mortgage insurance, and (7) guarantee fees.

Requires the GSE to notify all borrowers with a mortgage owned or guaranteed by a GSE about the Program and its eligibility criteria, and inform borrowers of the website required below.

Directs the Director of the Federal Housing Finance Agency (FHFA) to establish a single website where borrowers may: (1) determine their potential eligibility for participation in the Program, (2) see a complete list of and links to participating lenders, (3) use a mortgage refinance calculator to calculate potential payment savings based on different interest rates, and (4) obtain tips on refinancing their loan.

Directs the FHFA to issue guidelines to require the GSEs to make their refinancing guidelines consistent to ease lender compliance requirements, particularly with respect to: (1) loans with less than an 80% loan-to-value ratio, and (2) GSE closing cost policies.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Responsible Homeowner Refinancing 
Act of 2012''.

SEC. 2. DEFINITIONS.

    In this Act--
            (1) the term ``current borrower'' means a mortgagor who is 
        current on the subject mortgage at the time of the refinancing, 
        and has had no late payments in the preceding 6 months and not 
        more than 1 late payment in the preceding 12 months;
            (2) the term ``eligible mortgage'' means any mortgage 
        that--
                    (A) is an existing first mortgage that was made for 
                purchase of, or refinancing of another first mortgage 
                on, a 1- to 4-family dwelling, including a condominium 
                or a share in a cooperative ownership housing 
                association, on or before May 31, 2010;
                    (B) is owned or guaranteed by an enterprise;
                    (C) with respect to which, the mortgagor is a 
                current borrower; and
                    (D) includes existing first mortgages with a loan-
                to-value ratio of less than 80 percent.
            (3) the term ``enterprise'' means the Federal National 
        Mortgage Association and the Federal Home Loan Mortgage 
        Corporation;
            (4) the terms ``FHFA'' and ``Director'' mean the Federal 
        Housing Finance Agency and the Director thereof, respectively;
            (5) the terms ``Home Affordable Refinance Program'' and 
        ``Program'' mean the Home Affordable Refinance Program, 
        administered by the FHFA and the enterprises as part of the 
        Making Home Affordable initiative announced on March 4, 2009;
            (6) the term--
                    (A) ``LTV'' means loan-to-value, or the ratio of 
                the amount of the primary mortgage on a property to the 
                value of that property; and
                    (B) ``CLTV'' means combined loan-to-value, or the 
                ratio of all mortgage debt on a property to the value 
                of the property;
            (7) the term ``junior lien'' means a mortgage on the same 
        property that is--
                    (A) used as collateral for the eligible mortgage; 
                and
                    (B) in a subordinate position in terms of priority 
                and recording status;
            (8) the term ``same servicer'' means a lender that is 
        providing refinancing for a borrower whose loan they already 
        service;
            (9) the term ``qualified lender'' means a lender who is 
        eligible to make refinancing loans under the Program;
            (10) the terms ``guarantee fee'' has the same meanings as 
        in section 1327(a) of the Housing and Community Development Act 
        of 1992 (12 U.S.C. 4547(a)); and
            (11) the term ``average fees'' means the average 
        contractual fee rate of single-family guaranty arrangements by 
        an enterprise entered into during 2012, plus the recognition of 
        any up-front cash payments over an estimated average life, 
        expressed in terms of basis points, such definition to be 
        interpreted in a manner consistent with the annual report on 
        guarantee fees by the FHFA.

SEC. 3. STREAMLINED REFINANCING CRITERIA.

    (a) In General.--In carrying out the Home Affordable Refinance 
Program, each enterprise shall adopt and adhere to the criteria 
established under this section.
    (b) Borrower Eligibility.--The enterprises shall include as 
eligible borrowers in the Home Affordable Refinance Program all current 
borrowers who have an eligible mortgage and meet those underwriting 
requirements for eligibility for same servicer refinancing in the 
Program as of March 1, 2012, except that the enterprises may not 
disqualify or impose varying rules within the Program for borrowers 
based on LTV, CLTV, employment status or income.
    (c) Representations and Warranties.--The enterprises shall not 
require of any lender providing a loan under the Program any 
representations or warranties for such a loan--
            (1) for the value, marketability, condition, or property 
        type, as evidenced by the appraisal or alternative valuation 
        methods, if that lender complies with the enterprises' required 
        methods and standards for ordering an appraisal under the 
        Program; or
            (2) that are not required of same servicers under the 
        Program as of March 1, 2012, whether that loan is manually 
        underwritten or underwritten through an automated system, 
        except that, under no circumstances shall greater 
        representations and warranties be required for a loan that is 
        manually underwritten than for one that is underwritten through 
        an automated system.
    (d) Prohibition on Up-Front Fees.--In carrying out the Program, the 
enterprises may not charge the qualified lender any loan level price 
adjustment, post settlement delivery fee, adverse delivery charge, or 
other similar up-front fee.
    (e) Appraisals.--The enterprises shall develop and allow 
alternative streamlined methods to determine the value of the property 
for which refinancing is sought through the Program that eliminate the 
costs to the borrower and lender associated with such determination. 
Until such time as such method is developed, and when the existing 
automated valuation models of the enterprises are unable to determine 
the value of a certain property for which refinancing is sought through 
the Program, the enterprises shall bear the costs associated with the 
use of manual appraisal of that property, without passing on such costs 
to the borrower or lender.
    (f) Resubordination of Junior Liens.--
            (1) In general.--If the holder of a junior lien fails to 
        resubordinate that lien, thereby preventing the refinancing of 
        the eligible mortgage through the Program into a new mortgage, 
        the holder of the junior lien shall be liable for an amount 
        equal to 5.0 percent of the first mortgage balance, unless--
                    (A) the new mortgage would increase the first 
                mortgage payment;
                    (B) the new mortgage would increase the loan 
                balance by more than 3 percent or $3,000, whichever is 
                greater;
                    (C) the new mortgage is an adjustable rate mortgage 
                or has a term exceeding 30 years;
                    (D) the borrower has violated the due-on-sale 
                clause at any time;
                    (E) the subordination would put the junior lien at 
                risk of a bankruptcy strip down;
                    (F) the lender seeking to originate the loan 
                through the Program has a lien on the original loan, or 
                services the loan for a party, that is already in a 
                junior position to the junior lien holder; or
                    (G) the underlying trust documents for the junior 
                lien, as of March 1, 2012, explicitly prohibit the 
                servicer of the junior lien from impacting the security 
                interest of the notes through resubordination.
            (2) FHFA authority.--At the discretion of the Director, the 
        FHFA may add to the list of exceptions in paragraph (1) 
        additional exceptions when the Director determines a refinance 
        would significantly increase the risk faced by the junior lien 
        holder, and in which a failure to resubordinate would be 
        justifiable.
            (3) Actions by enterprises.--Upon submission to an 
        enterprise of documentation by a qualified lender or eligible 
        borrower that the holder of a junior lien has failed to 
        resubordinate its lien, thereby preventing the refinancing of 
        the eligible mortgage through the Program into a new mortgage, 
        the enterprise shall charge the junior lien holder and recoup 
        the fine described in paragraph (1), as applicable, and shall 
        apply the payment to the balance of the borrower's first 
        mortgage.
            (4) Limitations on liabilities.--A junior lien holder shall 
        not be liable to the enterprise or to anyone else for the fine 
        described in paragraph (1) if, within 30 days of the 
        enterprise's written determination that a junior lien holder 
        has failed to resubordinate its lien for any reason other than 
        those specified in paragraph (1), that lien holder agrees to 
        resubordinate its lien in compliance with this section.
    (g) Carryover of Mortgage Insurance.--
            (1) In general.--If a mortgage insurer backing an eligible 
        mortgage fails to transfer coverage to a new mortgage 
        refinanced through the Program or places additional 
        underwriting criteria or fees beyond those required by the 
        Program as a condition of transfer approval, thereby preventing 
        the refinancing of the eligible mortgage through the Program, 
        that mortgage insurer shall be liable for an amount equal to 
        5.0 percent of the first mortgage balance, unless the new 
        mortgage--
                    (A) would increase the first mortgage payment;
                    (B) would increase the loan balance by more than 3 
                percent or $3,000, whichever is greater;
                    (C) is an adjustable rate mortgage or has a term 
                exceeding 30 years; or
                    (D) the borrower has violated the due-on-sale 
                clause at any time.
            (2) Actions by enterprises.--Upon submission to an 
        enterprise of documentation by a qualified lender or eligible 
        borrower that the mortgage insurer has prevented the refinance 
        of an eligible mortgage through the Program into a new 
        mortgage, the enterprise shall charge the mortgage insurer and 
        recoup the fine described in paragraph (1), as applicable, and 
        shall apply the payment to the balance of the borrower's first 
        mortgage.
            (3) Limitation on liability.--A mortgage insurer shall not 
        be liable to the enterprise or to anyone else for the fine 
        described in paragraph (1) if, within 30 days of the 
        enterprise's written determination that a mortgage insurer has 
        prevented the refinancing of an eligible mortgage for any 
        reason other than those specified in paragraph (1), that 
        mortgage insurer agrees to transfer coverage in compliance with 
        this section.
    (h) Limitation.--Notwithstanding any other provision of law, the 
enterprises shall not be prevented from purchasing or guaranteeing a 
mortgage resulting from the refinancing of an eligible mortgage 
pursuant to this section and subject to all other provisions of this 
section.
    (i) Guarantee Fees.--
            (1) In general.--
                    (A) Average fee.--On each mortgage refinanced under 
                the Program in accordance with this section, the 
                enterprises shall set the average fee required under 
                this Act, as determined by the Director in an amount 
                not less than the average fees imposed in 2012 for such 
                guarantees. The Director shall prohibit an enterprise 
                from offsetting the cost of the fee to the mortgage 
                originators, borrowers, and investors by decreasing 
                other charges, fees, or premiums, or in any other 
                manner.
                    (B) Authority to limit offer of guarantee.--The 
                Director shall prohibit an enterprise from consummating 
                any offer for a guarantee to a lender for mortgage-
                backed securities, if the guarantee is inconsistent 
                with the requirements of this section.
            (2) Information collection and analysis.--The Director 
        shall require each enterprise to provide to the Director, as 
        part of its annual report submitted to Congress, for loans 
        refinanced under the Program--
                    (A) a description of changes made to up-front fees 
                and annual fees as part of the guarantee fees 
                negotiated with lenders; and
                    (B) an assessment of how the changes in the 
                guarantee fees described in subparagraph (A) met the 
                requirements of paragraph (1).
    (j) Regulations.--Not later than 30 days after the date of 
enactment of this Act, the Director shall issue any regulations or 
guidance necessary to carry out the changes to the Program established 
under this section, which regulations or guidance shall be put into 
effect not later than 90 days after the date of enactment of this Act.
    (k) Termination.--The requirements of this section shall expire 
concurrent with the expiration of the Program.

SEC. 4. INFORMATION FOR BORROWERS ON ELIGIBILITY FOR THE PROGRAM.

    (a) Notice to Borrowers.--Not later than 60 days after the date of 
enactment of this Act, the enterprises shall notify all borrowers with 
a mortgage owned or guaranteed by an enterprise about the Program and 
its eligibility criteria, and inform borrowers of the website required 
under subsection (b).
    (b) Public Access to Eligibility Criteria.--The Director shall 
establish, and the enterprises shall display a link on their homepages 
to, a single website where borrowers may--
            (1) determine their potential eligibility for participation 
        in the Program;
            (2) see a complete list of and links to participating 
        lenders;
            (3) use a mortgage refinance calculator to calculate 
        potential payment savings based on different interest rates; 
        and
            (4) obtain tips on refinancing their loan.

SEC. 5. CONSISTENT REFINANCING GUIDELINES REQUIRED.

    Not later than 60 days after the date of enactment of this Act, the 
FHFA shall issue guidance to require the enterprises to make their 
refinancing guidelines consistent to ease lender compliance 
requirements, and in particular with respect to loans with less than an 
80 percent loan-to-value ratio and closing cost policies of the 
enterprises, which regulations or guidance shall be put into effect not 
later than 90 days after the date of enactment of this Act.

SEC. 6. PROGRESS REPORTS.

    The Director shall provide to Congress monthly reports on the 
progress of the Program, and each enterprise shall include and 
disclose, as part of its filings with the Securities and Exchange 
Commission on Form 10-Q, Form 10-K, or any successors thereto, detailed 
information on each enterprise's progress and results in implementing 
and executing the Program.