SECTION 1. SHORT TITLE.

    This Act may be cited as the ``FHA Bailout Protection Act of 
2011''.

SEC. 2. TAXPAYER PROTECTION AT THE FHA.

    (a) Mutual Mortgage Insurance Fund.--Section 205 of the National 
Housing Act (12 U.S.C. 1711) is amended by adding at the end the 
following:
    ``(g) Taxpayer Protection.--
            ``(1) In general.--In order to protect the taxpayers of the 
        United States from financial responsibility for any obligations 
        of the Mutual Mortgage Insurance Fund (referred to in this 
        subsection as the `Fund'), the Secretary shall take all 
        available actions and use all available methods authorized 
        under law to ensure that, not later than 2 years after the date 
        of enactment of this subsection, the Fund attains the capital 
        ratio required under subsection (f)(2) and to ensure that the 
        Fund maintains a capital ratio that is not less than the 
        capital ratio required under subsection (f)(2) thereafter, 
        including--
                    ``(A) the authority to increase insurance premiums 
                charged under this title for mortgages that are 
                obligations of the Fund;
                    ``(B) the authority to establish more stringent 
                underwriting standards for mortgages described in 
                subparagraph (A); and
                    ``(C) the authority to increase the amount of cash 
                or its equivalent required to be paid on account of the 
                property subject to a mortgage described in 
                subparagraph (A).
            ``(2) Use of authority to prevent bailout of fund.--The 
        Secretary shall take the actions required under paragraph (3), 
        if--
                    ``(A) the Fund fails to--
                            ``(i) attain a capital ratio of 2 percent 
                        on the date described in paragraph (1); or
                            ``(ii) maintain such capital ratio after 
                        the date described in paragraph (1); or
                    ``(B) the expected claims rate of the Fund as set 
                forth in the quarterly independent actuarial study 
                required under section 202(a)(4) is 10.0 or higher.
            ``(3) Required actions.--The actions required under this 
        paragraph are--
                    ``(A) increasing the annual insurance premiums for 
                mortgages that are obligations of the Fund to the 
                maximum extent otherwise permitted under law, until the 
                date on which the Fund achieves a capital ratio of 2 
                percent; and
                    ``(B) until the date on which the Fund achieves a 
                capital ratio of 2 percent, charging an additional 
                risk-based annual insurance premium for mortgages that 
                are obligations of the Fund having a loan-to-value 
                ratio that is 95 percent or greater, in an amount that 
                is--
                            ``(i) proportionate to the risk the 
                        mortgages pose to the Fund; and
                            ``(ii) consistent with the amount of 
                        insurance premiums charged by the private 
                        sector with respect to similar mortgages.''.
    (b) Indemnification by Mortgagees.--Section 202 of the National 
Housing Act (12 U.S.C. 1708) is amended by adding at the end the 
following:
    ``(i) Indemnification by Mortgagees.--
            ``(1) 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 256 was 
        not originated or underwritten in accordance with the 
        requirements established by the Secretary, and the Secretary 
        pays an insurance claim with respect to the mortgage within a 
        reasonable period specified by the Secretary, the Secretary 
        shall require the mortgagee approved by the Secretary under the 
        direct endorsement program or the mortgagee delegated authority 
        under section 256 to indemnify the Secretary for the loss.
            ``(2) Fraud or misrepresentation.--If fraud or 
        misrepresentation was involved in connection with the 
        origination or underwriting, the Secretary shall require the 
        mortgagee approved by the Secretary under the direct 
        endorsement program or the mortgagee delegated authority under 
        section 256 to indemnify the Secretary for the loss regardless 
        of when an insurance claim is paid.
            ``(3) Requirements and procedures.--The Secretary shall 
        issue regulations establishing appropriate requirements and 
        procedures governing the indemnification of the Secretary by 
        the mortgagee, including public reporting on--
                    ``(A) the number of loans that--
                            ``(i) were not originated or underwritten 
                        in accordance with the requirements established 
                        by the Secretary; and
                            ``(ii) involved fraud or misrepresentation 
                        in connection with the origination or 
                        underwriting; and
                    ``(B) the financial impact on the Mutual Mortgage 
                Insurance Fund when indemnification is required.''.
    (c) Early Term Delinquencies.--Section 202(a) of the National 
Housing Act (12 U.S.C. 1708(a)) is amended by adding at the end the 
following:
            ``(8) Indemnification.--The Secretary shall take any 
        actions required to seek indemnification for any early term 
        delinquency on a mortgage which--
                    ``(A) is an obligation of the Mutual Mortgage 
                Insurance Fund; and
                    ``(B) at the time of origination of the mortgage 
                was not in compliance with any provision, regulation, 
                or other guideline established or promulgated pursuant 
                to this title.
            ``(9) Programmatic review of delinquencies.--The Secretary 
        shall establish and maintain a program--
                    ``(A) to review the cause of each early term 
                delinquency on a mortgage described under paragraph 
                (8);
                    ``(B) to require indemnification of any such early 
                term delinquency that did not meet the guidelines and 
                requirements set forth pursuant to this section prior 
                to origination; and
                    ``(C) to publicly report--
                            ``(i) the results of all early term 
                        delinquencies reviewed under subparagraph (A); 
                        and
                            ``(ii) if indemnification is required under 
                        subparagraph (B), the financial impact on the 
                        Mutual Mortgage Insurance Fund of the 
                        indemnification.
            ``(10) Definition of early term delinquency.--For purposes 
        of this section, the term `early term delinquency' means any 
        loan that becomes delinquent or that is in default within 24 
        months of the origination of such loan.''.

SEC. 3. ANNUAL ACTUARIAL STUDY AND QUARTERLY REPORTS ON MUTUAL MORTGAGE 
              INSURANCE FUND.

    Section 202(a)(4) of the National Housing Act (12 U.S.C. 
1708(a)(4)) is amended--
            (1) in the heading, by striking ``annual'' and inserting 
        ``quarterly'';
            (2) in the first sentence, by striking ``annually'' and 
        inserting ``quarterly'';
            (3) in the second sentence, by striking ``such studies'' 
        and inserting ``each study conducted under the preceding 
        sentence during the preceding year''; and
            (4) by adding at the end the following: ``Each report shall 
        include a calculation of the claims rate for the Fund for each 
        of the 3 preceding quarters and the expected claims rate for 
        the Fund for each of the 3 subsequent quarters.''.

SEC. 4. PROHIBITION ON TAXPAYER BAILOUT OF FHA.

    Section 505(c) of the Federal Credit Reform Act of 1990 (2 U.S.C. 
661d(c)) is amended--
            (1) by striking ``The Secretary of the Treasury shall 
        borrow'' and inserting the following:
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary of the Treasury shall borrow''; and
            (2) by adding at the end the following:
            ``(2) Exception.--The Secretary of the Treasury may not 
        enter into a transaction under this subsection with the Mutual 
        Mortgage Insurance Fund established under section 202 of the 
        National Housing Act (12 U.S.C. 1708).''.
FHA Bailout Protection Act of 2011 - Amends the National Housing Act (NHA) to direct the Secretary of Housing and Urban Development (HUD) to take action to ensure that the Mutual Mortgage Insurance Fund attains and maintains a capital ratio of at least 2%. Includes among such actions: (1) increasing mortgage insurance premiums, (2) establishing more stringent underwriting standards, and (3) increasing the amount of cash (or its equivalent) required to be paid on account of the property subject to a mortgage.

Directs the Secretary to raise annual insurance premiums and charge an additional risk-based annual insurance premium if: (1) the Fund fails to attain a capital ratio of 2% by a specified date or maintain it, or (2) the Fund's expected claims rate as set forth in the quarterly independent actuarial study is 10.0 or higher.

Directs the Secretary to require a mortgagee to indemnify HUD for losses resulting from payment of an insurance claim with respect to a mortgage: (1) executed under the direct endorsement program or insured by the mortgagee pursuant to a delegation of authority, but (2) not originated or underwritten in accordance with HUD requirements. Requires indemnification also in the event that fraud or misrepresentation was involved in an origination or underwriting.

Directs the Secretary of HUD to take any actions required to seek indemnification for any early term delinquency on a mortgage which: (1) is an obligation of the Mutual Mortgage Insurance Fund; and (2) at the time of origination was not in compliance with NHA requirements.

Directs the Secretary of HUD to establish a program to review the cause of each early term delinquency on such a mortgage.

Converts from annual to quarterly the frequency of an independent actuarial study of the Mutual Mortgage Insurance Fund.

Amends the Federal Credit Reform Act of 1990 to prohibit the Secretary of the Treasury from entering into specified transactions with the Mutual Mortgage Insurance Fund.
A bill to prohibit the Secretary of the Treasury from providing extra support to the Federal Housing Administration.