To replace the HOPE for Homeowners Program with a new program developed and implemented by the Secretary of Housing and Urban Development.

Summary: Responsible, Equitable, and Fair Insurance for Homeowners Act of 2009 or the REFI for Homeowners Act of 2009 - Amends the National Housing Act to direct the Secretary of Housing and Urban Development (HUD) to insure any mortgage covering a troubled homeowner's one- to four-family primary residence that is made to pay or prepay (refinance) outstanding obligations under an existing mortgage or mortgages meeting specified requirements.

Prohibits the refinancing of liar loans, zero-down loans, or loans with equity removed.

Authorizes the Board of Governors of the Federal Reserve System, the Secretary of the Treasury, the Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (Freddie Mac) to purchase mortgage-backed securities guaranteed by the Government National Mortgage Association (GNMA [Ginnie Mae]) that are either backed by loans originated under this Act, or whole loans originated and purchased under this Act. Authorizes GNMA to hold, sell, and securitize such whole loans.

Amends the Emergency Economic Stabilization Act of 2008 (EESA) to reduce Troubled Asset Relief Program (TARP) funds to offset costs of this Program.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Responsible, Equitable, and Fair 
Insurance for Homeowners Act of 2009'' or the ``REFI for Homeowners Act 
of 2009''.

SEC. 2. REPLACEMENT OF HOPE FOR HOMEOWNERS PROGRAM WITH PROGRAM FOR 
              INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

    (a) Replacement of Program.--Title II of the National Housing Act 
(12 U.S.C. 1707 et seq.) is amended--
            (1) in section 257 (12 U.S.C. 1715z-23), as added by 
        section 1402(a) of Public Law 110-289--
                    (A) by striking subsections (a) through (k); and
                    (B) by striking subsections (n) through (v);
            (2) by redesignating section 257 (12 U.S.C. 1715z-24), as 
        added by section 2124 of Public Law 110-289, as section 259; 
        and
            (3) by inserting before such section 259 (as so 
        redesignated) the following new section:

``SEC. 258. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

    ``(a) Authority.--The Secretary shall, subject only to the absence 
of qualified requests for insurance under this section and to the 
limitations under sections 257(m) and 531(a), make commitments to 
insure and insure any mortgage covering a 1- to 4-family residence that 
is made for the purpose of paying or prepaying outstanding obligations 
under an existing mortgage or mortgages on the residence if the 
mortgage being insured under this section meets the requirements of 
this section, as established by the Secretary. The Secretary shall 
establish such mortgage insurance products, and requirements and 
standards, in accordance with this section as the Secretary considers 
appropriate to carry out this section and shall prescribe such 
regulations and provide such guidance as may be necessary or 
appropriate to implement such products, requirements, and standards.
    ``(b) Requirements of Insured Mortgage.--To be eligible for 
insurance under this section, a mortgage shall comply with all of the 
following requirements:
            ``(1) Primary residence.--The mortgagor under the mortgage 
        to be insured under this section shall provide documentation 
        satisfactory in the determination of the Secretary to prove 
        that the residence covered by the mortgage to be insured under 
        this section is occupied by the mortgagor as the primary 
        residence of the mortgagor, and that such residence is the only 
        residence in which the mortgagor has any present ownership 
        interest.
            ``(2) Troubled homeowner.--The mortgagor under the mortgage 
        to be insured under this section shall be the mortgagor under 
        the existing mortgage to be refinanced by the insured mortgage 
        and shall--
                    ``(A) be in default on the mortgagor's obligations 
                under the existing mortgage;
                    ``(B) be in danger of defaulting, as determined in 
                accordance with standards established by the Secretary, 
                on the mortgagor's obligations under the existing 
                mortgage; or
                    ``(C) have a remaining principal obligation amount 
                under such existing mortgage that exceeds, at the time 
                of the commitment for mortgage insurance under this 
                section, the appraised value of the property that is 
                subject to such existing mortgage.
            ``(3) Prohibition on refinancing liar loans.--The Secretary 
        may not insure a mortgage under this section if the mortgagor 
        under such mortgage has knowingly, or willfully and with actual 
        knowledge, furnished any material information regarding the 
        income or financial worth of the mortgagor that is known to be 
        false for the purpose of obtaining the existing mortgage that 
        is to be refinanced by the mortgage to be insured under this 
        section.
            ``(4) Prohibition on refinancing zero-down loans and loans 
        with equity removed.--The Secretary may not insure a mortgage 
        under this section if--
                    ``(A) under the existing mortgage to be refinanced, 
                the mortgagor did not make any payment on account of 
                the property (or any payment exceeding such nominal 
                amount as the Secretary may establish), in cash or its 
                equivalent, in connection with acquisition of the 
                property; or
                    ``(B) during the term of the existing mortgage to 
                be refinanced, the mortgagor withdrew all, or 
                substantially all (in accordance with such standards 
                and guidelines as the Secretary shall establish) of any 
                equity of the mortgagor in the property subject to such 
                existing mortgage.
            ``(5) Terms.--The mortgage to be insured under this section 
        shall have such terms and conditions as the Secretary shall 
        provide, except that such mortgage shall--
                    ``(A) have a term to maturity not exceeding 40 
                years; and
                    ``(B) bear interest at an annual rate that is fixed 
                for the entire term of the mortgage.
            ``(6) Required waiver of prepayment penalties and fees.--
        All penalties for prepayment or refinancing of the existing 
        mortgage, and all fees and penalties related to default or 
        delinquency on the existing mortgage, shall be waived or 
        forgiven.
            ``(7) Shared appreciation.--The Secretary shall provide 
        that, with respect to each mortgage insured under this section, 
        upon any sale or disposition of the property subject to such 
        mortgage occurring during the 5-year period beginning on the 
        date of the insurance of the mortgage, to the extent of any 
        principal write- down or interest rate subsidy provided in 
        connection with the mortgage, the Secretary and the mortgagee 
        shall be entitled to a percentage of any appreciation in value 
        of such property that has occurred since the date that such 
        mortgage was insured under this section, which percentage shall 
        decrease over time, and the mortgagor shall be entitled to the 
        remainder of any such appreciation.
            ``(8) Maximum loan amount.--The principal obligation amount 
        of the mortgage to be insured under this section shall not 
        exceed the applicable dollar amount limitation in effect under 
        section 305(a)(2) of the Federal Home Loan Mortgage Corporation 
        (12 U.S.C. 1452(a)(2)) for a property of the applicable size 
        for the area in which the property is located.
            ``(9) Term; interest rate.--The refinanced eligible 
        mortgage to be insured shall--
                    ``(A) bear interest at a single rate that is fixed 
                for the entire term of the mortgage; and
                    ``(B) have a maturity of not less than 30 years 
                from the date of the beginning of amortization of such 
                refinanced eligible mortgage.
    ``(c) Exit Fee.--The Secretary may establish a fee, charge, or 
other mechanism for recovering, upon sale or other disposition of the 
property that is subject to the mortgage insured under this section or 
upon the subsequent refinancing of the mortgage, a portion of the 
equity or appreciation in the property.
    ``(d) GNMA Pricing.--In order to facilitate favorable pricing for 
loans insured under this section, the Board of Governors of the Federal 
Reserve System, the Secretary of the Treasury, the Federal National 
Mortgage Association, and the Federal Home Loan Mortgage Corporation 
are authorized to purchase mortgage-backed securities guaranteed by the 
Government National Mortgage Association that are backed by loans 
originated under this section or whole loans originated and purchased 
under this section. The Government National Mortgage Association is 
authorized to hold, sell, and securitize whole loans originated under 
this section.
    ``(e) Sunset.--The Secretary may not enter into any new commitment 
to insure any refinanced eligible mortgage, or newly insure any 
refinanced eligible mortgage pursuant to this section after the 
expiration of the 3-year period beginning upon the date of the 
enactment of this section.''.
    (b) Use of Aggregate Insurance Authority and Funds Under HOPE for 
Homeowners Program.--Section 257 of the National Housing Act (12 U.S.C. 
1715z-24), as added by section 1402(a) of Public Law 110-289), is 
amended--
            (1) in subsection (l)(1), by striking ``this section'' and 
        inserting ``section 258'';
            (2) in subsection (m), by striking ``this section'' and 
        inserting ``section 258'';
            (3) in subsection (w)--
                    (A) in paragraphs (1) and (3), by striking ``HOPE 
                for Homeowners Program'' each place such term appears 
                and inserting ``mortgage insurance program under 
                section 258''; and
                    (B) in paragraph (4) by striking ``HOPE for 
                Homeowners Program in accordance with subsections (i) 
                and (k)'' and inserting ``mortgage insurance program 
                under section 258'';
            (4) by redesignating subsections (l), (m), and (w) as 
        subsections (a), (b), and (c), respectively; and
            (5) by striking the section heading and inserting the 
        following: ``hope fund and hope bonds.''
    (c) Reducing TARP Funds to Offset Costs of Program.--Paragraph (3) 
of section 115(a) of the Emergency Economic Stabilization Act of 2008 
(12 U.S.C. 5225) is amended by inserting ``, as such amount is reduced 
by $1,000,000,000,'' after ``$700,000,000,000''.