69–006 

110TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 110–619 

FHA HOUSING STABILIZATION AND HOMEOWNERSHIP 

RETENTION ACT OF 2008 

MAY 5, 2008.—Committed to the Committee of the Whole House on the State of the 

Union and ordered to be printed 

Mr. FRANK of Massachusetts, from the Committee on Financial 

Services, submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 5830] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 5830) to create a voluntary FHA program that provides 

mortgage refinancing assistance to allow families to stay in their 

homes, protect neighborhoods, and help stabilize the housing market, having considered the same, report favorably thereon with an 

amendment and recommend that the bill as amended do pass. 

CONTENTS 

Page 

Amendment .............................................................................................................. 2 

Purpose and Summary ............................................................................................ 19 

Background and Need for Legislation .................................................................... 20 

Hearings ................................................................................................................... 21 

Committee Consideration ........................................................................................ 23 

Committee Votes ...................................................................................................... 23 

Committee Oversight Findings ............................................................................... 38 

Performance Goals and Objectives ......................................................................... 38 

New Budget Authority, Entitlement Authority, and Tax Expenditures ............. 38 

Committee Cost Estimate ....................................................................................... 38 

Congressional Budget Office Estimate ................................................................... 38 

Federal Mandates Statement ................................................................................. 46 

Advisory Committee Statement .............................................................................. 46 

Constitutional Authority Statement ...................................................................... 46 

Applicability to Legislative Branch ........................................................................ 46 

Earmark Identification ............................................................................................ 47 


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Section-by-Section Analysis of the Legislation ...................................................... 47 

Changes in Existing Law Made by the Bill, as Reported ..................................... 58 

Dissenting Views ..................................................................................................... 83 

AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘FHA Housing Stabilization and 

Homeownership Retention Act of 2008’’. (b) TABLE OF CONTENTS.—The table of contents for this Act is as follows: 

Sec. 1. Short title and table of contents. 

TITLE I—HOMEOWNERSHIP RETENTION 

Sec. 101. Purposes. 

Sec. 102. Insurance of homeownership retention mortgages. 

Sec. 103. Study of Auction or Bulk Refinance Program. 

Sec. 104. Temporary increase in maximum loan guaranty amount for certain housing loans guaranteed by Secretary of Veterans Affairs. 

Sec. 105. Study of possible accounting revisions relating to property at risk of foreclosure and the availability 

of credit for refinancing home mortgages at risk of foreclosure. 

Sec. 106. GAO study of the effect of tightening credit markets in communities affected by the subprime mortgage foreclosure crises and predatory lending on prospective first-time homebuyers seeking mortgages. 

TITLE II—OFFICE OF HOUSING COUNSELING 

Sec. 201. Short title. 

Sec. 202. Establishment of Office of Housing Counseling. 

Sec. 203. Counseling procedures. 

Sec. 204. Grants for housing counseling assistance. 

Sec. 205. Requirements to use HUD-certified counselors under HUD programs. 

Sec. 206. Study of defaults and foreclosures. 

Sec. 207. Definitions for counseling-related programs. 

Sec. 208. Updating and simplification of mortgage information booklet. 

TITLE III—COMBATING MORTGAGE FRAUD 

Sec. 301. Authorization of appropriations to combat mortgage fraud. 

TITLE I—HOMEOWNERSHIP RETENTION 

SEC. 101. PURPOSES. 

The purposes of this title are— (1) to create an FHA program, which is voluntary on the part of borrowers 

and existing mortgage loan holders, to insure refinance loans for substantial 

numbers of borrowers at risk of foreclosure, at levels which are reasonably likely to be sustainable through enhanced affordability of debt service; 

(2) to provide flexible underwriting for FHA-insured loans under such a program to provide refinancing opportunities under fiscally responsible terms, including higher fees commensurate with higher risk levels, a seasoning requirement for higher debt to income loans, and additional program controls to limit 

and control risk; 

(3) to bar speculators and second home owners from participation in such program; 

(4) to require existing mortgage loan holders to take substantial loan 

writedowns in exchange for having the Federal Government and the borrower 

assume the ongoing risk of the refinanced loan; 

(5) to set a loan-to-value limit on such loans that provides the FHA with an 

equity buffer against potential loan losses, provides protections against the risk 

of future home price declines, and creates incentives for borrowers to maintain 

payments on the loan; 

(6) to protect the FHA against losses which may exceed normal FHA loss levels by establishing higher fee levels, including an exit fee and profit sharing 

during the first five years of the loan, with such higher fee levels effectively 

being funded through the required lender writedown; 

(7) to provide a fair level of incentives for junior lien holders to provide the 

necessary releases of their lien interests, in order to meet program requirements that all outstanding liens must be extinguished, and thereby permit the 

refinancing to be completed; 

(8) to enhance the administrative capacity of the FHA to carry out its expanded role under the program through establishment of an Oversight Board 


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which adds expertise from the Federal Reserve and the Department of the 

Treasury, through additional funding to contract out for the provision of any 

needed expertise in designing program requirements and oversight, and 

through additional funding to increase FHA personnel resources as needed to 

handle the increased loan volume resulting from the program; 

(9) to sunset the program when it is no longer needed; and 

(10) to study the need for and efficacy of an auction or bulk refinancing mechanism to facilitate more expeditious refinancing of larger volumes of existing 

mortgages that are at risk for foreclosure into FHA-insured mortgages. 

SEC. 102. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES. 

(a) MORTGAGE INSURANCE PROGRAM.—Title II of the National Housing Act (12 

U.S.C. 1707 et seq.) is amended by adding at the end the following new section: 

‘‘SEC. 257. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES. 

‘‘(a) OVERSIGHT BOARD.—

‘‘(1) ESTABLISHMENT.—There is hereby established the Refinance Program 

Oversight Board (in this section referred to as the ‘Oversight Board’). 

‘‘(2) MEMBERSHIP.—The Oversight Board shall consist of the following members or their designees: 

‘‘(A) The Secretary of the Treasury. 

‘‘(B) The Secretary of Housing and Urban Development. 

‘‘(C) The Chairman of the Board of Governors of the Federal Reserve System. 

‘‘(3) NO ADDITIONAL COMPENSATION.—Members of the Oversight Board shall 

receive no additional pay by reason of service on the Oversight Board. 

‘‘(4) RESPONSIBILITIES.—The Oversight Board shall be responsible for establishing program and oversight requirements for the program under this section, 

which shall include—

‘‘(A) detailed program requirements under subsection (c); 

‘‘(B) flexible underwriting criteria under subsection (d); 

‘‘(C) a mortgage premium structure under subsection (e); 

‘‘(D) a reasonable fee and rate limitation under subsection (f); 

‘‘(E) enhancement of FHA capacity under subsection (i), including oversight of such activities and personnel as may be contracted for as provided 

therein; 

‘‘(F) monitoring of underwriting risk under subsection (j); and 

‘‘(G) such additional requirements as may be necessary and appropriate 

to oversee and implement the program. 

‘‘(5) USE OF RESOURCES.—In carrying out its functions under this section, the 

Oversight Board may utilize, with their consent and to the extent practical, the 

personnel, services, and facilities of the Department of the Treasury, the Department of Housing and Urban Development, the Board of Governors of the 

Federal Reserve System, the Federal Reserve Banks, and other Federal agencies, with or without reimbursement therefore. 

‘‘(b) AUTHORITY.—

‘‘(1) IN GENERAL.—The Secretary shall, subject only to the absence of qualified 

requests for insurance under this section and to the limitations under subsection (h) of this section and section 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 Oversight 

Board, and of section 203, except as modified by this section. 

‘‘(2) ESTABLISHMENT AND IMPLEMENTATION OF PROGRAM REQUIREMENTS.—The 

Oversight Board shall establish program requirements and standards under 

this section and the Secretary shall implement such requirements and standards. The Oversight Board and the Secretary may establish and implement any 

requirements or standards through interim guidance and mortgagee letters. 

‘‘(c) REQUIREMENTS.—To be eligible for insurance under this section, a mortgage 

shall comply with all of the following requirements: 

‘‘(1) OWNER-OCCUPIED PRINCIPAL RESIDENCE REQUIREMENT.—The residence to 

be covered by the mortgage insured under this section shall be occupied by the 

mortgagor as the principal residence of the mortgagor and the mortgagor shall 

provide a certification to the originator of the mortgage that such residence to 

be covered by the mortgage insured under this section is the only residence in 

which the mortgagor has any present ownership interest. 

‘‘(2) LACK OF CAPACITY TO PAY EXISTING MORTGAGE OR MORTGAGES.—

‘‘(A) BORROWER CERTIFICATION.—


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‘‘(i) The mortgagor shall provide a certification to the originator of the 

mortgage that the mortgagor— ‘‘(I) has not intentionally defaulted on the existing mortgage or 

mortgages; and ‘‘(II) has not knowingly, or willfully and with actual knowledge 

furnished material information known to be false for the purpose 

of obtaining the existing mortgage or mortgages. ‘‘(ii) The mortgagor shall agree in writing that the mortgagor shall 

be liable to repay the FHA any direct financial benefit achieved from 

the reduction of indebtedness on the existing mortgage or mortgages on 

the residence refinanced under this section derived from misrepresentations made in the certifications and documentation required under this 

subparagraph, subject to the discretion of the Oversight Board. ‘‘(B) CURRENT BORROWER DEBT-TO-INCOME RATIO.—As of March 1, 2008, 

the mortgagor shall have had a ratio of mortgage debt to income, taking 

into consideration all existing mortgages at such time, greater than 35 percent. ‘‘(C) LOSS MITIGATION RESPONSIBILITIES.—This section may not be construed to alter or in any way affect the responsibilities of any party (including the mortgage servicer) to engage in any or all loan modification or other 

loss mitigation strategies to maximize value to investors as established by 

any applicable contract. 

‘‘(3) ELIGIBILITY OF MORTGAGES BY DATE OF ORIGINATION.—The existing senior 

mortgage shall have been originated on or before December 31, 2007. 

‘‘(4) MAXIMUM LOAN-TO-VALUE RATIO FOR NEW LOANS.—The mortgage being 

insured under this section shall involve a principal obligation (including such 

initial service charges, appraisal, inspection, and other fees as the Secretary 

shall approve and including the mortgage insurance premium paid pursuant to 

subsection (e)(1)) in an amount not to exceed 90 percent of the current appraised value of the property. Section 203(d) shall not apply to mortgages insured under this section. 

‘‘(5) REQUIRED WAIVER OF PREPAYMENT PENALTIES AND FEES.—All penalties for 

prepayment of the existing mortgage or mortgages, and all fees and penalties 

related to default or delinquency on all existing mortgages or mortgages, shall 

be waived or forgiven. 

‘‘(6) REQUIRED LOAN REDUCTION.—

‘‘(A) REDUCTION OF INDEBTEDNESS UNDER EXISTING SENIOR MORTGAGE.—

The amount of indebtedness on the existing mortgage or mortgages on the 

residence shall have been substantially reduced by such percentage as the 

Oversight Board or Secretary may require, and such reduction shall be at 

least sufficient to—

‘‘(i) provide for the refinancing of such existing mortgage or mortgages in an amount not greater than 90 percent of the current appraised value of the property involved; 

‘‘(ii) pay the full amount of the single premium to be collected pursuant to subsection (e)(1) (which shall be an amount equal to 3.0 percent 

of the amount of the original insured principal obligation of the mortgage insured under this section and which shall serve as an additional 

reserve to cover possible loan losses); and 

‘‘(iii) pay the full amount of the loan origination fee and any other 

closing costs, not to exceed 2.0 percent of the amount of the original 

insured principal obligation of the mortgage insured under this section. 

‘‘(B) EXTINGUISHMENT OF DEBT BY REFINANCING.—

‘‘(i) REQUIRED AGREEMENT.—All existing holders of mortgage liens on 

the property involved shall agree to accept the proceeds of the insured 

loan as payment in full of all indebtedness under all existing mortgages, and all encumbrances related to such mortgages shall be removed. The Oversight Board may take such actions as the Oversight 

Board considers necessary or appropriate to facilitate coordination and 

agreement between the holders of the existing senior mortgage and any 

existing subordinate mortgages, taking into consideration the subordinate lien status of such subordinate mortgages, to comply with the requirement under this subparagraph. 

‘‘(ii) TREATMENT OF MULTIPLE MORTGAGE LIENS.—In addition to 

clause (i), the Oversight Board shall adopt one of the following approaches for all mortgages or such classes of mortgages as the Oversight Board may determine and may, from time to time, reconsider: 

‘‘(I) FIXED PRICE.—As a requirement for participating in this program, all existing lien holders will agree to not provide any payVerDate Aug 31 2005 08:30 May 06, 2008 Jkt 069006 PO 00000 Frm 00004 Fmt 6659 Sfmt 6621 E:\HR\OC\HR619.XXX HR619

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ment to subordinate lien holders other than such payment in accordance with a formula established by the Oversight Board as set 

forth in clause (iii); except that the Oversight Board may establish 

a short period within which first and subordinate lien holders may 

negotiate to extinguish all subordinate liens for compensation that 

may be different from the amount determined under such formula 

set forth in clause (iii). ‘‘(II) SHARED EQUITY.—The Oversight Board may require the 

mortgagor under a mortgage insured under this section to agree to 

share a portion of any future equity in the mortgaged property 

with holders of existing subordinate mortgages, in accordance with 

a formula for such shared equity established by the Oversight 

Board as set forth in clause (iii), except that payments of such 

shared equity may be made only after the Secretary recovers all 

amounts owed to the Secretary with respect to such mortgage pursuant to the program under this section (including amounts owed 

pursuant to paragraph (8)). ‘‘(iii) FORMULA.—In determining a formula for determining any payments to subordinate lien holders pursuant to subclauses (I) and (II) 

of clause (ii), and in any reconsideration of such formula as the Oversight Board may from time to time undertake, the Oversight Board 

shall take into consideration the current market value of such liens. In 

no case may a formula provide for the payment of more than 1 percent 

of the current appraised value of the mortgaged property to a subordinate lien holder if the outstanding balance owed to more senior lien 

holders is equal to or exceeds such current appraised value. 

‘‘(iv) VOLUNTARY PROGRAM.—This subparagraph may not be construed to require any holder of any existing mortgage to participate in 

the program under this section generally, or with respect to any particular loan. 

‘‘(v) SOURCE OF PAYMENTS FOR SUBORDINATE LOANS.—Any amounts 

paid to holders of any existing subordinate mortgages in connection 

with the origination and insurance of a mortgage under this section 

shall derive only from—

‘‘(I) the holder of the existing senior mortgage; or 

‘‘(II) in the case only of the shared equity approach under clause 

(ii)(II), the mortgagor under the mortgage insured under this section 

‘‘(7) REQUIRED REDUCTION OF DEBT SERVICE.—The debt service payments due 

under the mortgage insured under this section shall be in an amount that is 

substantially reduced from the debt service payments due under the existing 

mortgage or mortgages, which reduction may be achieved through a reduction 

of indebtedness, a reduction in the interest rate being paid, or an extension of 

the term of the mortgage, or any combination thereof. 

‘‘(8) FINANCIAL RECOVERY TO FEDERAL GOVERNMENT THROUGH EXIT PREMIUM.—

‘‘(A) SUBORDINATE LIEN.—The mortgage shall provide that the Secretary 

shall retain a lien on the residence involved, which shall be subordinate to 

the mortgage insured under this section but senior to all other mortgages 

on the residence that may exist at any time, and which shall secure the 

repayment of the amount due under subparagraph (D). 

‘‘(B) NO INTEREST OR PAYMENT DURING MORTGAGE.—The amount secured 

by the lien retained by the Secretary pursuant to subparagraph (A) shall 

not bear interest and shall not be repayable to the Secretary except as provided in subparagraph (D) of this paragraph. 

‘‘(C) NET PROCEEDS AVAILABLE FOR EXIT PREMIUM.—Upon the sale, refinancing, or other disposition of the residence covered by a mortgage insured 

under this section, any proceeds resulting from such disposition that remain after deducting the remaining insured principal balance of the mortgage insured under this section shall be available to meet the obligation 

under subparagraph (D). 

‘‘(D) EXIT PREMIUM.—Upon any refinancing of the mortgage insured 

under this section or any sale or disposition of the residence covered by the 

mortgage, the Secretary shall, subject to the availability of sufficient net 

proceeds described in subparagraph (C), receive the greater of—

‘‘(i) 3 percent of the amount of the original insured principal obligation of the mortgage; or 

‘‘(ii) a percentage of the portion of the net proceeds described in subparagraph (C), which shall be—


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‘‘(I) in the case of any refinancing, sale, or disposition occurring 

during the first year of the term of the mortgage, 100 percent of 

such net proceeds; 

‘‘(II) in the case of any refinancing, sale, or disposition occurring 

during the second year of the term of the mortgage, 80 percent; 

‘‘(III) in the case of any refinancing, sale, or disposition occurring 

during the third year of the term of the mortgage, 60 percent; and 

‘‘(IV) in the case of any refinancing, sale, or disposition occurring 

during the fourth year of the term of the mortgage or at any time 

thereafter, 50 percent; 

except that such percentage of proceeds shall be reduced by all fees the Secretary has collected for the mortgage prior to such refinancing, sale, or disposition. 

‘‘(E) AUTHORITY TO PROHIBIT NEW SECOND LIENS.—The Oversight Board 

shall prohibit borrowers from granting a new second lien on the mortgaged 

property during the first five years of the term of the mortgage insured 

under this section, except as the Oversight Board determines to be necessary to ensure the appropriate maintenance of the mortgaged property. 

‘‘(9) DOCUMENTATION AND VERIFICATION OF INCOME.—In complying with the 

FHA underwriting requirements under the program under this section, the 

mortgagee under the mortgage shall document and verify the income of the 

mortgagor by procuring an Internal Revenue Service transcript of the income 

tax returns of the mortgagor for the two most recent years for which the filing 

deadline for such years has passed and by any other method, in accordance with 

procedures and standards that the Oversight Board or the Secretary shall establish. 

‘‘(10) FIXED RATE MORTGAGE.—The mortgage insured under this section shall 

bear interest at a single rate that is fixed for the entire term of the mortgage. 

‘‘(11) MAXIMUM LOAN AMOUNT.—Notwithstanding section 203(b)(2), the mortgage being insured under this section shall involve a principal obligation in an 

amount that does not exceed the limitation (for a property of the applicable size) 

on the amount of the principal obligation that would be allowable under the 

terms of section 202(a) of the Economic Stimulus Act of 2008 if the mortgage 

were insured pursuant to such section. The limitation on the amount of the 

principal obligation allowable under such Act shall apply for the purposes of 

this Act until the termination under subsection (n) of the program under this 

subsection. 

‘‘(12) INELIGIBILITY FOR FRAUD CONVICTION.—The mortgagor shall not have 

been convicted under Federal or State law for mortgage fraud during the 7-year 

period ending upon the insurance of the mortgage under this section. 

‘‘(13) LENDER REVIEW.—The mortgagee under the mortgage shall conduct an 

electronic database search of the mortgagor’s criminal history to determine if 

the mortgagor has had a conviction described in paragraph (12). The mortgagee 

may charge the mortgagor a reasonable fee for the actual cost of the search not 

to exceed a maximum rate established by the Oversight Board. The Oversight 

Board may provide clarification, if needed, to help mortgagees identify any differences among the States in how they report mortgage fraud convictions. The 

Oversight Board shall establish procedures sufficient to allow the mortgagor to 

challenge a mortgagee’s determination with respect to paragraph (12) (including 

to correct inaccuracies resulting from theft of the mortgagor’s identity or personally identifiable information). 

‘‘(14) APPRAISALS.—Any appraisal conducted in connection with a mortgage 

insured under this section shall—

‘‘(A) be based on the current value of the property; 

‘‘(B) be conducted in accordance with title XI of the Financial Institutions 

Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et seq.); 

‘‘(C) be completed by an appraiser who meets the competency requirements of the Uniform Standards of Professional Appraisal Practice; 

‘‘(D) be wholly consistent with the appraisal standards, practices, and 

procedures under section 202(e) of this Act that apply to all loans insured 

under this Act; and 

‘‘(E) comply with the requirements of subsection (g) of this section (relating to appraisal independence). 

‘‘(15) STATEMENT OF LOAN TERMS.—

‘‘(A) REQUIREMENT.—The mortgagor shall have been provided by the 

mortgagee, not later than three days after application for the mortgage, a 

form described in subparagraph (B) appropriately and accurately completed 

by the mortgagee. 


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‘‘(B) FORM.—The form described in this subparagraph shall be a single 

page, written disclosure regarding the mortgage loan to be insured under 

this section that, when completed by the mortgagee, sets forth, in accordance with such requirements as the Secretary shall by regulation establish 

a best possible estimate of— ‘‘(i) the total loan amount under the mortgage; 

‘‘(ii) the loan-to-value ratio for the mortgage; 

‘‘(iii) the final maturity date for the mortgage; 

‘‘(iv) the amount of any prepayment fee to be charged if the mortgage 

is paid in full before the final maturity date for the mortgage, including 

the percentages of any net proceeds to be received by the Secretary 

pursuant to paragraph (8)(D)(ii); ‘‘(v) the amount of the exit premium under the mortgage pursuant 

to subsection (e)(3); ‘‘(vi) the interest rate under the mortgage expressed as an annual 

percentage rate, and the amount of the monthly payment due under 

such rate; ‘‘(vii) the fully indexed rate of interest under the mortgage expressed 

as an annual percentage rate and the amount of the monthly payment 

due under such rate; ‘‘(viii) the monthly household income of the borrower upon which the 

mortgage is based; 

‘‘(ix) the amount of the monthly payment due under the mortgage, 

and the amount of such initial monthly payment plus monthly amounts 

due for taxes and insurance on the property for which the mortgage is 

made, both expressed as a percentage of the monthly household income 

of the borrower; and 

‘‘(x) the aggregate amount of settlement charges for all settlement 

services provided in connection with the mortgage, the amount of such 

charges that are included in the principal amount and the amount of 

such charges the borrower must pay at closing, the aggregate amount 

of mortgagee’s fees connection with the mortgage, and the aggregate 

amount of other fees or required payments in connection with the mortgage. 

‘‘(d) FLEXIBLE UNDERWRITING CRITERIA.—

‘‘(1) IN GENERAL.—The Oversight Board shall establish, and the Secretary acting on behalf of the Oversight Board shall implement, underwriting standards 

for mortgages insured under this section that—

‘‘(A) ensure that each mortgagor under a mortgage insured under this 

section has a reasonable expectation of repaying the mortgage, taking into 

consideration the mortgagor’s income, assets, liabilities, payment history, 

and other applicable criteria, but which shall not result in a denial of insurance solely on the basis of the mortgagor’s current FICO or other credit 

scores, or any delinquency or default by the mortgagor under the existing 

mortgage or mortgages, or any case filed under title 11, United States Code, 

by the mortgagor; and 

‘‘(B) subject to the provisions of subparagraph (A), permit a total debt-toincome ratio of up to 43 percent. 

‘‘(2) EXCEPTION.—

‘‘(A) IN GENERAL.—Subject to the underwriting standards established 

under paragraph (1)(A) and any additional requirements that the Oversight 

Board considers appropriate, the Oversight Board shall permit a total debtto-income ratio of more than 43 percent, but not more than 50 percent, if 

the mortgagor has made, on a timely basis before the endorsement of the 

mortgage insured under this section, not less than six months of payments 

in an amount not less than the amount of the monthly payment due under 

the mortgage to be insured under this section. The holder of the existing 

senior mortgage shall exercise forbearance with respect to such mortgage 

during the period in which such payments are made. 

‘‘(B) COMPUTATION OF DEBT-TO-INCOME RATIO.— In computing the mortgagor’s total debt-to-income ratio for purposes of mortgage qualification under 

the underwriting standards established pursuant to this section—

‘‘(i) if the mortgagor is a debtor in a case under chapter 13 of title 

11, United States Code, payments on recurring debts other than housing expenses shall be based on the amounts being paid on such debts 

under the mortgagor’s confirmed plan under such chapter; and 

‘‘(ii) if the mortgagor is a debtor in a case under chapter 7 of title 

11, United States Code, recurring debts that are to be discharged in 

that case shall not be considered. 


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‘‘(3) AUTHORITY.—The Oversight Board may alter the ratios under this subsection for a particular class of borrowers subject to such requirements as the 

Board determines is necessary and appropriate to fulfill the purposes of this 

Act. 

‘‘(4) REPRESENTATIONS AND WARRANTIES.—The Oversight Board shall require 

the underwriter of the insured loan to provide such representations and warranties as the Oversight Board considers necessary or appropriate for the Secretary 

to enforce compliance with all underwriting and appraisal standards of the program. 

‘‘(e) PREMIUMS.—For each mortgage insured under this section, the Oversight 

Board shall establish and the Secretary shall collect—

‘‘(1) at the time of insurance, a single premium payment in an amount equal 

to 3.0 percent of the amount of the original insured principal obligation of the 

mortgage, which shall be paid from the proceeds of the mortgage being insured 

under this section, through the reduction of the amount of indebtedness on the 

existing senior mortgage required under subsection (c)(6)(A); 

‘‘(2) in addition to the premium under paragraph (1), annual premium payments in an amount equal to 1.50 percent of the remaining insured principal 

balance of the mortgage; and 

‘‘(3) an exit premium in the amount determined under subsection (c)(8), but 

which shall not be less than 3.0 percent of the original insured principal obligation of the mortgage, subject only to the availability of sufficient net proceeds 

from sale, refinancing, or other disposition of the property, as determined in 

subsection (c)(8). 

‘‘(f) ORIGINATION FEES AND MORTGAGE RATE.—The Oversight Board shall establish and the Secretary shall implement a reasonable limitation on origination fees 

for mortgages insured under this section and shall establish procedures to ensure 

that interest rates on such mortgages shall be commensurate with market rate interest rates on such types of loans. 

‘‘(g) APPRAISAL INDEPENDENCE.—

‘‘(1) PROHIBITIONS ON INTERESTED PARTIES IN A REAL ESTATE TRANSACTION.—

No mortgage lender, mortgage broker, mortgage banker, real estate broker, appraisal management company, employee of an appraisal management company, 

nor any other person with an interest in a real estate transaction involving an 

appraisal in connection with a mortgage insured under this section shall improperly influence, or attempt to improperly influence, through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, non-payment for services rendered, or bribery, the development, reporting, result, or review of a real estate appraisal sought in connection with the mortgage. 

‘‘(2) EXCEPTIONS.—The requirements of paragraph (1) shall not be construed 

as prohibiting a mortgage lender, mortgage broker, mortgage banker, real estate broker, appraisal management company, employee of an appraisal management company, or any other person with an interest in a real estate transaction 

from asking an appraiser to provide 1 or more of the following services: 

‘‘(A) Consider additional, appropriate property information, including the 

consideration of additional comparable properties to make or support an appraisal. 

‘‘(B) Provide further detail, substantiation, or explanation for the appraiser’s value conclusion. 

‘‘(C) Correct errors in the appraisal report. 

‘‘(3) CIVIL MONETARY PENALTIES.—The Secretary may impose a civil money 

penalty for any knowing and material violation of paragraph (1) under the same 

terms and conditions as are authorized in section 536(a) of this Act. 

‘‘(h) LIMITATION ON AGGREGATE INSURANCE AUTHORITY.—The aggregate original 

principal obligation of all mortgages insured under this section may not exceed 

$300,000,000,000. 

‘‘(i) ENHANCEMENT OF FHA CAPACITY.—Under the direction of the Oversight 

Board, the Secretary shall take such actions as may be necessary to—

‘‘(1) contract for the establishment of underwriting criteria, automated underwriting systems, pricing standards, and other factors relating to eligibility for 

mortgages insured under this section; 

‘‘(2) contract for independent quality reviews of underwriting, including appraisal reviews and fraud detection, of mortgages insured under this section or 

pools of such mortgages; and 

‘‘(3) increase personnel of the Department as necessary to process or monitor 

the processing of mortgages insured under this section. 

‘‘(j) MONITORING OF UNDERWRITING RISK.—


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‘‘(1) MONITORING OF DESIGNATED UNDERWRITERS.—The Oversight Board and 

the Secretary shall monitor independent quality reviews as established pursuant to subsection (i)(2) to— ‘‘(A) determine compliance of designated underwriters with underwriting 

standards; ‘‘(B) determine rates of delinquency, claims rates, and loss rates of designated underwriters; and ‘‘(C) terminate eligibility of designated underwriters that do not meet 

minimum performance standards as the Oversight Board may establish and 

the Secretary implements. ‘‘(2) REPORTS BY OVERSIGHT BOARD.—The Oversight Board shall submit 

monthly reports to the Congress identifying the progress of the program for 

mortgage insurance under this section, which shall contain the following information for each month: ‘‘(A) The number of new mortgages insured under this section, including 

the location of the properties subject to such mortgages by census tract. ‘‘(B) The aggregate principal obligation of new mortgages insured under 

this section. ‘‘(C) The average amount by which the indebtedness on existing mortgages is reduced in accordance with subsection (c)(6). ‘‘(D) The average amount by which the debt service payments on existing 

mortgages is reduced in accordance with subsection (c)(7). 

‘‘(E) The amount of premiums collected for insurance of mortgages under 

this section. 

‘‘(F) The claim and loss rates for mortgages insured under this section. 

‘‘(G) The race, ethnicity, gender, and income of the mortgagors, aggregated by geographical areas at least as specific as census tracts, except 

where necessary to protect privacy of the borrower. 

‘‘(H) Any other information that the Oversight Board considers appropriate. 

‘‘(3) REPORT BY INSPECTOR GENERAL.—The Inspector General of the Department of Housing and Urban Development shall conduct an annual audit of the 

program for mortgage insurance under this section to determine compliance 

with this section and program rules. 

‘‘(k) GNMA COMMITMENT AUTHORITY.—

‘‘(1) GUARANTEES.—The Secretary shall take such actions as may be necessary 

to ensure that securities based on and backed by a trust or pool composed of 

mortgages insured under this section are available to be guaranteed by the Government National Mortgage Association as to the timely payment of principal 

and interest. 

‘‘(2) GUARANTEE AUTHORITY.—To carry out the purposes of section 306 of the 

National Housing Act (12 U.S.C. 1721), the Government National Mortgage Association may enter into new commitments to issue guarantees of securities 

based on or backed by mortgages insured under this section, not exceeding 

$300,000,000,000. The amount of authority provided under the preceding sentence to enter into new commitments to issue guarantees is in addition to any 

amount of authority to make new commitments to issue guarantees that is provided to the Association under any other provision of law. 

‘‘(l) SPECIAL RISK INSURANCE FUND.—The insurance of each mortgage under this 

section shall be the obligation of the Special Risk Insurance Fund established by 

section 238. 

‘‘(m) DEFINITIONS.—For purposes of this section, the following definitions shall 

apply: 

‘‘(1) EXISTING MORTGAGE.—The term ‘existing mortgage’ means, with respect 

to a mortgage insured under this section, a mortgage that is to be extinguished, 

and paid or prepaid, from the proceeds of the mortgage insured under this section. 

‘‘(2) EXISTING SENIOR MORTGAGE.—The term ‘existing senior mortgage’ means, 

with respect to a mortgage insured under this section, the existing mortgage 

that has superior priority. 

‘‘(3) EXISTING SUBORDINATE MORTGAGE.—The term ‘existing subordinate mortgage’ means, with respect to a mortgage insured under this section, an existing 

mortgage that has subordinate priority to the existing senior mortgage. 

‘‘(n) SUNSET.—

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the authority of the 

Secretary to make any new commitment to insure any mortgage under this section shall terminate upon the expiration of the 2-year period beginning on the 

date of the enactment of the FHA Housing Stabilization and Homeownership 

Retention Act of 2008. 


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‘‘(2) EXTENSIONS.—The Oversight Board may, not more than four times, extend the authority to enter into new commitments to insure mortgages under 

this section beyond the date specified in paragraph (1), except that each such 

extension shall— ‘‘(A) be effective only if, before the program terminates pursuant to paragraph (1) or any previous extension pursuant to this paragraph, the Oversight Board— ‘‘(i) certifies the need for such extension in writing to the Congress; 

and ‘‘(ii) causes notice of such extension to be published in the Federal 

Register no later than the beginning of the 3-month period that ends 

upon the scheduled termination date of the program; and ‘‘(B) be for a period of not more than 6 months. ‘‘(o) AUTHORIZATIONS OF APPROPRIATIONS.—There is authorized to be appropriated 

for each of fiscal years 2008 and 2009— ‘‘(1) $210,000,000 for providing counseling regarding loss mitigation for mortgagors with 1- to 4-family residences, including determining eligibility for the 

program under this section, with grants to be administered through the Neighborhood Reinvestment Corporation, except that— ‘‘(A) not less than 15 percent of the funds made available pursuant to this 

paragraph shall be provided to counseling organizations that target counseling services regarding loss mitigation to minority and low-income homeowners or provide such services in neighborhoods with high concentrations 

of minority and low-income homeowners; 

‘‘(B) $35,000,000 of the funds made available pursuant to this paragraph 

shall be used by the Neighborhood Reinvestment Corporation (referred to 

in this subparagraph as the ‘NRC’) to make grants to State and local legal 

organizations or attorneys that have demonstrated legal experience in home 

foreclosure or eviction law to provide legal assistance related to home ownership preservation, home foreclosure prevention, and tenancy associated 

with home foreclosure or to counseling intermediaries that have been approved by the Department of Housing and Urban Development for the purpose of making such grants or contracting for such legal assistance; of the 

amount provided under this subparagraph, at least 60 percent shall be allocated for legal assistance to low-income homeowners or tenants; such attorneys shall be capable of assisting homeowners in owner-occupied homes or 

tenants who live in homes with mortgages in default, in danger of default, 

or subject to or at risk of foreclosure or eviction and who have legal issues 

that cannot be handled by counselors employed by NRC intermediaries; in 

using the amount made available under this subparagraph, the NRC shall 

give priority consideration to State and local legal organizations and attorneys that (i) provide legal assistance in the 100 metropolitan statistical 

areas (as defined by the Director of the Office of Management and Budget) 

with the highest home foreclosure rates, and (ii) have the capacity to begin 

using the financial assistance within 90 days after receipt of the assistance; 

as a condition of the receipt of a grant under this subparagraph, the grantee shall submit to NRC information relating to the demographic characteristics of the assisted homeowners or tenants, the dollar amount and terms 

of the relevant mortgages and the outcome of legal proceedings related to 

the foreclosure or eviction proceedings, including the resolutions thereof; 

‘‘(C) some such sums shall be used for such counseling for veterans recently returning from active duty in the Armed Forces; 

‘‘(D) the NRC shall give priority consideration for funding with amounts 

made available pursuant to this paragraph, except for funds made available 

under subparagraphs (A) and (B), to entities that have an effective plan in 

place for making contact, including personal contact, with defaulted mortgagors, and such a plan may include use of third parties (including both forprofit and not-for-profit entities) to make personal contact with defaulted 

mortgagors, or visits to such mortgagors, or both; 

‘‘(E) except with respect to funds reserved under subparagraphs (A) and 

(B), the NRC shall give priority consideration for funding with amounts 

made available pursuant to this paragraph to entities that have a written 

plan that has been implemented for providing in-person counseling and for 

making contact, including personal contact, with defaulted mortgagors, for 

the purpose of providing counseling or providing information about available counseling, both (i) prior to commencement of any foreclosure proceedings, and (ii) in the event effective in person or phone contact has not 

been made with such defaulted mortgagors prior thereto, then prior to the 

conclusion of the foreclosure process; and 


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‘‘(F) not less than 2 percent of the funds made available pursuant to this 

paragraph shall be used only for identifying and notifying borrowers under 

existing mortgages who are eligible under this section for insurance of refinancing mortgages, and in making funds reserved under this subparagraph 

available for such purpose, the Secretary shall give preference to assistance 

for programs that have a proven history of outreach within minority communities; and 

‘‘(2) $150,000,000 for costs of activities under subsection (i). 

‘‘(p) AUDIT AND REPORT BY INSPECTOR GENERAL.—

‘‘(1) AUDIT.—The Inspector General of the Department of Housing and Urban 

Development shall conduct an audit of the program for loss mitigation counseling funded with amounts made available under subsection (o)(1) to determine 

compliance with such subsection. 

‘‘(2) REPORTS TO CONGRESS.—Not later than March 30, 2009, and every calendar quarter thereafter, the Inspector General shall submit to the appropriate 

committees of the Congress a report summarizing the activities of the Inspector 

General and the Neighborhood Reinvestment Corporation during the 120-day 

period ending on the date of such report. Each report shall include, for the period covered by such report, a detailed statement of all obligations, expenditures, and revenues associated with paragraphs (1) and (2) of subsection (o), including—

‘‘(A) obligations and expenditures of appropriated funds; 

‘‘(B) the number of homeowners eligible in such program; 

‘‘(C) the number of homeowners participating in such program; 

‘‘(D) the status of homeowners within such program; 

‘‘(E) the number of homeowners who have rejected assistance from the 

Neighborhood Reinvestment Corporation; and 

‘‘(F) information on participating counseling services.’’. 

(b) SPECIAL RISK INSURANCE FUND.—Section 238 of the National Housing Act (12 

U.S.C. 1715z–3) is amended—

(1) in subsection (a)(1), by striking ‘‘or 243’’ each place such term appears and 

inserting ‘‘243, or 257’’; and 

(2) in subsection (b), by striking ‘‘and 243’’ each place such term appears and 

inserting ‘‘243, and 257’’. 

SEC. 103. STUDY OF AUCTION OR BULK REFINANCE PROGRAM. 

(a) STUDY.—The Board of Governors of the Federal Reserve System (in this section referred to as the ‘‘Board of Governors’’), in consultation with other members 

of the Oversight Board established by section 257(a) of the National Housing Act 

(as added by the amendment made by section 102(a) of this Act), shall conduct a 

study of the need for and efficacy of an auction or bulk refinancing mechanism to 

facilitate refinancing of existing residential mortgages that are at risk for foreclosure into mortgages insured under the mortgage insurance program under title 

II of the National Housing Act. The study shall identify and examine various options for mechanisms under which lenders and servicers of such mortgages may 

make bids for forward commitments for such insurance in an expedited manner. 

(b) CONTENT.—

(1) ANALYSIS.—The study required under subsection (a) shall analyze—

(A) the feasibility of establishing a mechanism that would facilitate the 

more rapid refinancing of borrowers at risk of foreclosure into performing 

mortgages insured under title II of the National Housing Act; 

(B) whether such a mechanism would provide an effective and efficient 

mechanism to reduce foreclosures on qualified existing mortgages; 

(C) whether the use of an auction or bulk refinance program is necessary 

to stabilize the housing market and reduce the impact of turmoil in that 

market on the economy of the United States; 

(D) whether there are other mechanisms or authority that would be useful to reduce foreclosure; and 

(E) and any other factors that the Board of Governors considers relevant. 

(2) DETERMINATIONS.—To the extent that the Board of Governors finds that 

a facility of the type described in paragraph (1) is feasible and useful, the study 

shall—

(A) determine and identify any additional authority or resources needed 

to establish and operate such a mechanism; 

(B) determine whether there is a need for additional authority with respect to the loan underwriting criteria included in the amendment made by 

section 102(a) of this Act or with respect to eligibility of participating borrowers, lenders, or holders of liens; 


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(C) determine whether such underwriting criteria should be established 

on the basis of individual loans, in the aggregate, or otherwise to facilitate 

the goal of refinancing borrowers at risk of foreclosure into viable loans insured under the National Housing Act. 

(c) REPORT.—Not later than the expiration of the 60-day period beginning on the 

date of the enactment of this Act, the Board of Governors shall submit a report regarding the results of the study conducted under this section to the Committee on 

Financial Services of the House of Representatives and the Committee on Banking, 

Housing, and Urban Affairs of the Senate. The report shall include a detailed description of the analysis required under subsection (b)(1) and of the determinations 

made pursuant to subsection (b)(2), and shall include any other findings and recommendations of the Board of Governors pursuant to the study, including identifying various options for mechanisms described in subsection (a). 

SEC. 104. TEMPORARY INCREASE IN MAXIMUM LOAN GUARANTY AMOUNT FOR CERTAIN 

HOUSING LOANS GUARANTEED BY SECRETARY OF VETERANS AFFAIRS. 

Notwithstanding subparagraph (C) of section 3703(a)(1) of title 38, United States 

Code, for purposes of any loan described in subparagraph (A)(i)(IV) of such section 

that is originated during the period beginning on the date of the enactment of this 

Act and ending on December 31, 2008, the term ‘‘maximum guaranty amount’’ shall 

mean an amount equal to 25 percent of the higher of—

(1) the limitation determined under section 305(a)(2) of the Federal Home 

Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for the calendar year in 

which the loan is originated for a single-family residence; or 

(2) 125 percent of the area median price for a single-family residence, but in 

no case to exceed 175 percent of the limitation determined under such section 

305(a)(2) for the calendar year in which the loan is originated for a single-family 

residence. 

SEC. 105. STUDY OF POSSIBLE ACCOUNTING REVISIONS RELATING TO PROPERTY AT RISK OF 

FORECLOSURE AND THE AVAILABILITY OF CREDIT FOR REFINANCING HOME 

MORTGAGES AT RISK OF FORECLOSURE. 

(a) STUDY REQUIRED.—The Board of Governors of the Federal Reserve System 

shall conduct a study on mark-to-market accounting standards applicable to depository institutions with respect to their residential mortgages that are at risk of foreclosure, the effects of such accounting standards and capital requirements on a depository institution’s capacity to provide refinancing to residential mortgagors that 

are at risk of foreclosure and to residential mortgagors during periods of market 

value declines and increased foreclosures, and the feasibility of modifications of such 

standards, requirements, and regulatory actions during periods of market fluctuation in order to maintain the ability of the institution to continue to carry mortgages 

on residential property at risk of foreclosure and assure the availability of credit to 

refinance at-risk residential mortgages. 

(b) REPORT REQUIRED.—The Board of Governors of the Federal Reserve System 

shall submit a report to the Congress before the end of the 90-day period beginning 

on the date of the enactment of this Act containing the findings and determinations 

of the Board with respect to the study conducted under subsection (a) and such administrative and legislative recommendations as the Board may determine to be appropriate. 

SEC. 106. GAO STUDY OF THE EFFECT OF TIGHTENING CREDIT MARKETS IN COMMUNITIES 

AFFECTED BY THE SUBPRIME MORTGAGE FORECLOSURE CRISES AND PREDATORY LENDING ON PROSPECTIVE FIRST-TIME HOMEBUYERS SEEKING MORTGAGES. 

The Comptroller General of the United States shall conduct a study to analyze 

the effects of tightening credit markets on prospective first-time home buyers who 

reside in selected communities that have been most detrimentally affected by both 

the current subprime mortgage foreclosure crisis and predatory mortgage lending. 

Such study shall also analyze the adequacy of financial literacy outreach efforts by 

agencies of the Federal Government tasked with implementing financial literacy 

education in such communities and shall assess whether the current funding levels 

for such efforts are at sufficient levels to reduce the levels of subprime mortgage 

delinquencies and foreclosures and to increase the level of financial literacy in the 

selected communities so as to minimize the incidences of predatory mortgage lending. Not later than the expiration of the 6-month period beginning on the date of 

the enactment of this Act, the Comptroller General shall submit a report to the Congress setting forth the results of the study and including recommendations regarding such funding levels. 


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TITLE II—OFFICE OF HOUSING COUNSELING 

SEC. 201. SHORT TITLE. 

This title may be cited as the ‘‘Expand and Preserve Home Ownership Through 

Counseling Act’’. 

SEC. 202. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING. 

Section 4 of the Department of Housing and Urban Development Act (42 U.S.C. 

3533) is amended by adding at the end the following new subsection: 

‘‘(g) OFFICE OF HOUSING COUNSELING.—

‘‘(1) ESTABLISHMENT.—There is established, in the Office of the Secretary, the 

Office of Housing Counseling. 

‘‘(2) DIRECTOR.—There is established the position of Director of Housing 

Counseling. The Director shall be the head of the Office of Housing Counseling 

and shall be appointed by the Secretary. Such position shall be a career-reserved position in the Senior Executive Service. 

‘‘(3) FUNCTIONS.—

‘‘(A) IN GENERAL.—The Director shall have ultimate responsibility within 

the Department, except for the Secretary, for all activities and matters relating to homeownership counseling and rental housing counseling, including—

‘‘(i) research, grant administration, public outreach, and policy development relating to such counseling; and 

‘‘(ii) establishment, coordination, and administration of all regulations, requirements, standards, and performance measures under programs and laws administered by the Department that relate to housing 

counseling, homeownership counseling (including maintenance of 

homes), mortgage-related counseling (including home equity conversion 

mortgages and credit protection options to avoid foreclosure), and rental housing counseling, including the requirements, standards, and performance measures relating to housing counseling. 

‘‘(B) SPECIFIC FUNCTIONS.—The Director shall carry out the functions assigned to the Director and the Office under this section and any other provisions of law. Such functions shall include establishing rules necessary 

for—

‘‘(i) the counseling procedures under section 106(g)(1) of the Housing 

and Urban Development Act of 1968 (12 U.S.C. 1701x(h)(1)); 

‘‘(ii) carrying out all other functions of the Secretary under section 

106(g) of the Housing and Urban Development Act of 1968, including 

the establishment, operation, and publication of the availability of the 

toll-free telephone number under paragraph (2) of such section; 

‘‘(iii) carrying out section 5 of the Real Estate Settlement Procedures 

Act of 1974 (12 U.S.C. 2604) for home buying information booklets prepared pursuant to such section; 

‘‘(iv) carrying out the certification program under section 106(e) of the 

Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)); 

‘‘(v) carrying out the assistance program under section 106(a)(4) of 

the Housing and Urban Development Act of 1968, including criteria for 

selection of applications to receive assistance; 

‘‘(vi) carrying out any functions regarding abusive, deceptive, or unscrupulous lending practices relating to residential mortgage loans that 

the Secretary considers appropriate, which shall include conducting the 

study under section 206 of the Expand and Preserve Home Ownership 

Through Counseling Act; 

‘‘(vii) providing for operation of the advisory committee established 

under paragraph (4) of this subsection; 

‘‘(viii) collaborating with community-based organizations with expertise in the field of housing counseling; and 

‘‘(ix) providing for the building of capacity to provide housing counseling services in areas that lack sufficient services. 

‘‘(4) ADVISORY COMMITTEE.—

‘‘(A) IN GENERAL.—The Secretary shall appoint an advisory committee to 

provide advice regarding the carrying out of the functions of the Director. 

‘‘(B) MEMBERS.—Such advisory committee shall consist of not more than 

12 individuals, and the membership of the committee shall equally represent all aspects of the mortgage and real estate industry, including consumers. 


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‘‘(C) TERMS.—Except as provided in subparagraph (D), each member of 

the advisory committee shall be appointed for a term of 3 years. Members 

may be reappointed at the discretion of the Secretary. 

‘‘(D) TERMS OF INITIAL APPOINTEES.—As designated by the Secretary at 

the time of appointment, of the members first appointed to the advisory 

committee, 4 shall be appointed for a term of 1 year and 4 shall be appointed for a term of 2 years. 

‘‘(E) PROHIBITION OF PAY; TRAVEL EXPENSES.—Members of the advisory 

committee shall serve without pay, but shall receive travel expenses, including per diem in lieu of subsistence, in accordance with applicable provisions under subchapter I of chapter 57 of title 5, United States Code. 

‘‘(F) ADVISORY ROLE ONLY.—The advisory committee shall have no role in 

reviewing or awarding housing counseling grants. 

‘‘(5) SCOPE OF HOMEOWNERSHIP COUNSELING.—In carrying out the responsibilities of the Director, the Director shall ensure that homeownership counseling 

provided by, in connection with, or pursuant to any function, activity, or program of the Department addresses the entire process of homeownership, including the decision to purchase a home, the selection and purchase of a home, 

issues arising during or affecting the period of ownership of a home (including 

refinancing, default and foreclosure, and other financial decisions), and the sale 

or other disposition of a home.’’. 

SEC. 203. COUNSELING PROCEDURES. 

(a) IN GENERAL.—Section 106 of the Housing and Urban Development Act of 1968 

(12 U.S.C. 1701x) is amended by adding at the end the following new subsection: 

‘‘(g) PROCEDURES AND ACTIVITIES.—

‘‘(1) COUNSELING PROCEDURES.—

‘‘(A) IN GENERAL.—The Secretary shall establish, coordinate, and monitor 

the administration by the Department of Housing and Urban Development 

of the counseling procedures for homeownership counseling and rental 

housing counseling provided in connection with any program of the Department, including all requirements, standards, and performance measures 

that relate to homeownership and rental housing counseling. 

‘‘(B) HOMEOWNERSHIP COUNSELING.—For purposes of this subsection and 

as used in the provisions referred to in this subparagraph, the term ‘homeownership counseling’ means counseling related to homeownership and residential mortgage loans. Such term includes counseling related to homeownership and residential mortgage loans that is provided pursuant to—

‘‘(i) section 105(a)(20) of the Housing and Community Development 

Act of 1974 (42 U.S.C. 5305(a)(20)); 

‘‘(ii) in the United States Housing Act of 1937—

‘‘(I) section 9(e) (42 U.S.C. 1437g(e)); 

‘‘(II) section 8(y)(1)(D) (42 U.S.C. 1437f(y)(1)(D)); 

‘‘(III) section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D)); 

‘‘(IV) section 23(c)(4) (42 U.S.C. 1437u(c)(4)); 

‘‘(V) section 32(e)(4) (42 U.S.C. 1437z–4(e)(4)); 

‘‘(VI) section 33(d)(2)(B) (42 U.S.C. 1437z–5(d)(2)(B)); 

‘‘(VII) sections 302(b)(6) and 303(b)(7) (42 U.S.C. 1437aaa–1(b)(6), 

1437aaa–2(b)(7)); and 

‘‘(VIII) section 304(c)(4) (42 U.S.C. 1437aaa–3(c)(4)); 

‘‘(iii) section 302(a)(4) of the American Homeownership and Economic 

Opportunity Act of 2000 (42 U.S.C. 1437f note); 

‘‘(iv) sections 233(b)(2) and 258(b) of the Cranston-Gonzalez National 

Affordable Housing Act (42 U.S.C. 12773(b)(2), 12808(b)); 

‘‘(v) this section and section 101(e) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x, 1701w(e)); 

‘‘(vi) section 220(d)(2)(G) of the Low-Income Housing Preservation 

and Resident Homeownership Act of 1990 (12 U.S.C. 4110(d)(2)(G)); 

‘‘(vii) sections 422(b)(6), 423(b)(7), 424(c)(4), 442(b)(6), and 443(b)(6) of 

the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 

12872(b)(6), 12873(b)(7), 12874(c)(4), 12892(b)(6), and 12893(b)(6)); 

‘‘(viii) section 491(b)(1)(F)(iii) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii)); 

‘‘(ix) sections 202(3) and 810(b)(2)(A) of the Native American Housing 

and Self-Determination Act of 1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); 

‘‘(x) in the National Housing Act—

‘‘(I) in section 203 (12 U.S.C. 1709), the penultimate undesignated paragraph of paragraph (2) of subsection (b), subsection 

(c)(2)(A), and subsection (r)(4); 


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‘‘(II) subsections (a) and (c)(3) of section 237 (12 U.S.C. 1715z– 2); and ‘‘(III) subsections (d)(2)(B) and (m)(1) of section 255 (12 U.S.C. 

1715z–20); ‘‘(xi) section 502(h)(4)(B) of the Housing Act of 1949 (42 U.S.C. 

1472(h)(4)(B)); and ‘‘(xii) section 508 of the Housing and Urban Development Act of 1970 

(12 U.S.C. 1701z–7). ‘‘(C) RENTAL HOUSING COUNSELING.—For purposes of this subsection, the 

term ‘rental housing counseling’ means counseling related to rental of residential property, which may include counseling regarding future homeownership opportunities and providing referrals for renters and prospective 

renters to entities providing counseling and shall include counseling related 

to such topics that is provided pursuant to— ‘‘(i) section 105(a)(20) of the Housing and Community Development 

Act of 1974 (42 U.S.C. 5305(a)(20)); ‘‘(ii) in the United States Housing Act of 1937— ‘‘(I) section 9(e) (42 U.S.C. 1437g(e)); 

‘‘(II) section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D)); 

‘‘(III) section 23(c)(4) (42 U.S.C. 1437u(c)(4)); 

‘‘(IV) section 32(e)(4) (42 U.S.C. 1437z–4(e)(4)); 

‘‘(V) section 33(d)(2)(B) (42 U.S.C. 1437z–5(d)(2)(B)); and 

‘‘(VI) section 302(b)(6) (42 U.S.C. 1437aaa–1(b)(6)); 

‘‘(iii) section 233(b)(2) of the Cranston-Gonzalez National Affordable 

Housing Act (42 U.S.C. 12773(b)(2)); 

‘‘(iv) section 106 of the Housing and Urban Development Act of 1968 

(12 U.S.C. 1701x); 

‘‘(v) section 422(b)(6) of the Cranston-Gonzalez National Affordable 

Housing Act (42 U.S.C. 12872(b)(6)); 

‘‘(vi) section 491(b)(1)(F)(iii) of the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii)); 

‘‘(vii) sections 202(3) and 810(b)(2)(A) of the Native American Housing and Self-Determination Act of 1996 (25 U.S.C. 4132(3), 

4229(b)(2)(A)); and 

‘‘(viii) the rental assistance program under section 8 of the United 

States Housing Act of 1937 (42 U.S.C. 1437f). 

‘‘(2) STANDARDS FOR MATERIALS.—The Secretary, in conjunction with the advisory committee established under subsection (g)(4) of the Department of Housing and Urban Development Act, shall establish standards for materials and 

forms to be used, as appropriate, by organizations providing homeownership 

counseling services, including any recipients of assistance pursuant to subsection (a)(4). 

‘‘(3) MORTGAGE SOFTWARE SYSTEMS.—

‘‘(A) CERTIFICATION.—The Secretary shall provide for the certification of 

various computer software programs for consumers to use in evaluating different residential mortgage loan proposals. The Secretary shall require, for 

such certification, that the mortgage software systems take into account—

‘‘(i) the consumer’s financial situation and the cost of maintaining a 

home, including insurance, taxes, and utilities; 

‘‘(ii) the amount of time the consumer expects to remain in the home 

or expected time to maturity of the loan; 

‘‘(iii) such other factors as the Secretary considers appropriate to assist the consumer in evaluating whether to pay points, to lock in an interest rate, to select an adjustable or fixed rate loan, to select a conventional or government-insured or guaranteed loan and to make other 

choices during the loan application process. 

If the Secretary determines that available existing software is inadequate 

to assist consumers during the residential mortgage loan application process, the Secretary shall arrange for the development by private sector software companies of new mortgage software systems that meet the Secretary’s specifications. 

‘‘(B) USE AND INITIAL AVAILABILITY.—Such certified computer software 

programs shall be used to supplement, not replace, housing counseling. The 

Secretary shall provide that such programs are initially used only in connection with the assistance of housing counselors certified pursuant to subsection (e). 

‘‘(C) AVAILABILITY.—After a period of initial availability under subparagraph (B) as the Secretary considers appropriate, the Secretary shall take 

reasonable steps to make mortgage software systems certified pursuant to 


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this paragraph widely available through the Internet and at public locations, including public libraries, senior-citizen centers, public housing sites, 

offices of public housing agencies that administer rental housing assistance 

vouchers, and housing counseling centers. 

‘‘(4) NATIONAL PUBLIC SERVICE MULTIMEDIA CAMPAIGNS TO PROMOTE HOUSING

COUNSELING.—

‘‘(A) IN GENERAL.—The Director of Housing Counseling shall develop, implement, and conduct national public service multimedia campaigns designed to make persons facing mortgage foreclosure, persons considering a 

subprime mortgage loan to purchase a home, elderly persons, persons who 

face language barriers, low-income persons, and other potentially vulnerable consumers aware that it is advisable, before seeking or maintaining a 

residential mortgage loan, to obtain homeownership counseling from an unbiased and reliable sources and that such homeownership counseling is 

available, including through programs sponsored by the Secretary of Housing and Urban Development. 

‘‘(B) CONTACT INFORMATION.—Each segment of the multimedia campaign 

under subparagraph (A) shall publicize the toll-free telephone number and 

web site of the Department of Housing and Urban Development through 

which persons seeking housing counseling can locate a housing counseling 

agency in their State that is certified by the Secretary of Housing and 

Urban Development and can provide advice on buying a home, renting, defaults, foreclosures, credit issues, and reverse mortgages. 

‘‘(C) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary, not to exceed $3,000,000 for fiscal years 2008, 

2009, and 2010, for the develop, implement, and conduct of national public 

service multimedia campaigns under this paragraph. 

‘‘(5) EDUCATION PROGRAMS.—The Secretary shall provide advice and technical 

assistance to States, units of general local government, and nonprofit organizations regarding the establishment and operation of, including assistance with 

the development of content and materials for, educational programs to inform 

and educate consumers, particularly those most vulnerable with respect to residential mortgage loans (such as elderly persons, persons facing language barriers, low-income persons, and other potentially vulnerable consumers), regarding home mortgages, mortgage refinancing, home equity loans, and home repair 

loans.’’. 

(b) CONFORMING AMENDMENTS TO GRANT PROGRAM FOR HOMEOWNERSHIP COUNSELING ORGANIZATIONS.—Section 106(c)(5)(A)(ii) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is amended—

(1) in subclause (III), by striking ‘‘and’’ at the end; 

(2) in subclause (IV) by striking the period at the end and inserting ‘‘; and’’; 

and 

(3) by inserting after subclause (IV) the following new subclause: 

‘‘(V) notify the housing or mortgage applicant of the availability 

of mortgage software systems provided pursuant to subsection 

(g)(3).’’. 

SEC. 204. GRANTS FOR HOUSING COUNSELING ASSISTANCE. 

Section 106(a) of the Housing and Urban Development Act of 1968 (12 U.S.C. 

1701x(a)(3)) is amended by adding at the end the following new paragraph: 

‘‘(4) HOMEOWNERSHIP AND RENTAL COUNSELING ASSISTANCE.—

‘‘(A) IN GENERAL.—The Secretary shall make financial assistance available 

under this paragraph to States, units of general local governments, and nonprofit organizations providing homeownership or rental counseling (as such 

terms are defined in subsection (g)(1)). 

‘‘(B) QUALIFIED ENTITIES.—The Secretary shall establish standards and guidelines for eligibility of organizations (including governmental and nonprofit organizations) to receive assistance under this paragraph. 

‘‘(C) DISTRIBUTION.—Assistance made available under this paragraph shall be 

distributed in a manner that encourages efficient and successful counseling programs. 

‘‘(D) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated $45,000,000 for each of fiscal years 2008 through 2011 for—

‘‘(i) the operations of the Office of Housing Counseling of the Department 

of Housing and Urban Development; 

‘‘(ii) the responsibilities of the Secretary under paragraphs (2) through (5) 

of subsection (g); and 

‘‘(iii) assistance pursuant to this paragraph for entities providing homeownership and rental counseling.’’. 


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SEC. 205. REQUIREMENTS TO USE HUD-CERTIFIED COUNSELORS UNDER HUD PROGRAMS. 

Section 106(e) of the Housing and Urban Development Act of 1968 (12 U.S.C. 

1701x(e)) is amended— (1) by striking paragraph (1) and inserting the following new paragraph: 

‘‘(1) REQUIREMENT FOR ASSISTANCE.—An organization may not receive assistance for counseling activities under subsection (a)(1)(iii), (a)(2), (a)(4), (c), or (d) 

of this section, or under section 101(e), unless the organization, or the individuals through which the organization provides such counseling, has been certified by the Secretary under this subsection as competent to provide such counseling.’’; 

(2) in paragraph (2)—

(A) by inserting ‘‘and for certifying organizations’’ before the period at the 

end of the first sentence; and 

(B) in the second sentence by striking ‘‘for certification’’ and inserting ‘‘, 

for certification of an organization, that each individual through which the 

organization provides counseling shall demonstrate, and, for certification of 

an individual,’’; 

(3) in paragraph (3), by inserting ‘‘organizations and’’ before ‘‘individuals’’; 

(4) by redesignating paragraph (3) as paragraph (5); and 

(5) by inserting after paragraph (2) the following new paragraphs: 

‘‘(3) REQUIREMENT UNDER HUD PROGRAMS.—Any homeownership counseling or 

rental housing counseling (as such terms are defined in subsection (g)(1)) required under, or provided in connection with, any program administered by the 

Department of Housing and Urban Development shall be provided only by organizations or counselors certified by the Secretary under this subsection as competent to provide such counseling. 

‘‘(4) OUTREACH.—The Secretary shall take such actions as the Secretary considers appropriate to ensure that individuals and organizations providing homeownership or rental housing counseling are aware of the certification requirements and standards of this subsection and of the training and certification programs under subsection (f).’’. 

SEC. 206. STUDY OF DEFAULTS AND FORECLOSURES. 

The Secretary of Housing and Urban Development shall conduct an extensive 

study of the root causes of default and foreclosure of home loans, using as much 

empirical data as are available. The study shall also examine the role of escrow accounts in helping prime and nonprime borrowers to avoid defaults and foreclosures. 

Not later than 12 months after the date of the enactment of this Act, the Secretary 

shall submit to the Congress a preliminary report regarding the study. Not later 

than 24 months after such date of enactment, the Secretary shall submit a final report regarding the results of the study, which shall include any recommended legislation relating to the study, and recommendations for best practices and for a process to identify populations that need counseling the most. 

SEC. 207. DEFINITIONS FOR COUNSELING-RELATED PROGRAMS. 

Section 106 of the Housing and Urban Development Act of 1968 (12 U.S.C. 

1701x), as amended by the preceding provisions of this title, is further amended by 

adding at the end the following new subsection: 

‘‘(h) DEFINITIONS.—For purposes of this section: 

‘‘(1) NONPROFIT ORGANIZATION.—The term ‘nonprofit organization’ has the 

meaning given such term in section 104(5) of the Cranston-Gonzalez National 

Affordable Housing Act (42 U.S.C. 12704(5)), except that subparagraph (D) of 

such section shall not apply for purposes of this section. 

‘‘(2) STATE.—The term ‘State’ means each of the several States, the Commonwealth of Puerto Rico, the District of Columbia, the Commonwealth of the 

Northern Mariana Islands, Guam, the Virgin Islands, American Samoa, the 

Trust Territories of the Pacific, or any other possession of the United States. 

‘‘(3) UNIT OF GENERAL LOCAL GOVERNMENT.—The term ‘unit of general local 

government’ means any city, county, parish, town, township, borough, village, 

or other general purpose political subdivision of a State.’’. 

SEC. 208. UPDATING AND SIMPLIFICATION OF MORTGAGE INFORMATION BOOKLET. 

Section 5 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604) 

is amended—

(1) in the section heading, by striking ‘‘SPECIAL’’ and inserting ‘‘HOME BUYING’’; 

(2) by striking subsections (a) and (b) and inserting the following new subsections: 

‘‘(a) PREPARATION AND DISTRIBUTION.—The Secretary shall prepare, at least once 

every 5 years, a booklet to help consumers applying for federally related mortgage 

loans to understand the nature and costs of real estate settlement services. The SecVerDate Aug 31 2005 08:30 May 06, 2008 Jkt 069006 PO 00000 Frm 00017 Fmt 6659 Sfmt 6621 E:\HR\OC\HR619.XXX HR619

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retary shall prepare the booklet in various languages and cultural styles, as the Secretary determines to be appropriate, so that the booklet is understandable and accessible to homebuyers of different ethnic and cultural backgrounds. The Secretary 

shall distribute such booklets to all lenders that make federally related mortgage 

loans. The Secretary shall also distribute to such lenders lists, organized by location, 

of homeownership counselors certified under section 106(e) of the Housing and 

Urban Development Act of 1968 (12 U.S.C. 1701x(e)) for use in complying with the 

requirement under subsection (c) of this section. ‘‘(b) CONTENTS.—Each booklet shall be in such form and detail as the Secretary 

shall prescribe and, in addition to such other information as the Secretary may provide, shall include in plain and understandable language the following information: ‘‘(1) A description and explanation of the nature and purpose of the costs incident to a real estate settlement or a federally related mortgage loan. The description and explanation shall provide general information about the mortgage 

process as well as specific information concerning, at a minimum— ‘‘(A) balloon payments; 

‘‘(B) prepayment penalties; and 

‘‘(C) the trade-off between closing costs and the interest rate over the life 

of the loan. ‘‘(2) An explanation and sample of the uniform settlement statement required 

by section 4. 

‘‘(3) A list and explanation of lending practices, including those prohibited by 

the Truth in Lending Act or other applicable Federal law, and of other unfair 

practices and unreasonable or unnecessary charges to be avoided by the prospective buyer with respect to a real estate settlement. 

‘‘(4) A list and explanation of questions a consumer obtaining a federally related mortgage loan should ask regarding the loan, including whether the consumer will have the ability to repay the loan, whether the consumer sufficiently 

shopped for the loan, whether the loan terms include prepayment penalties or 

balloon payments, and whether the loan will benefit the borrower. 

‘‘(5) An explanation of the right of rescission as to certain transactions provided by sections 125 and 129 of the Truth in Lending Act. 

‘‘(6) A brief explanation of the nature of a variable rate mortgage and a reference to the booklet entitled ‘Consumer Handbook on Adjustable Rate Mortgages’, published by the Board of Governors of the Federal Reserve System pursuant to section 226.19(b)(1) of title 12, Code of Federal Regulations, or to any 

suitable substitute of such booklet that such Board of Governors may subsequently adopt pursuant to such section. 

‘‘(7) A brief explanation of the nature of a home equity line of credit and a 

reference to the pamphlet required to be provided under section 127A of the 

Truth in Lending Act. 

‘‘(8) Information about homeownership counseling services made available 

pursuant to section 106(a)(4) of the Housing and Urban Development Act of 

1968 (12 U.S.C. 1701x(a)(4)), a recommendation that the consumer use such 

services, and notification that a list of certified providers of homeownership 

counseling in the area, and their contact information, is available. 

‘‘(9) An explanation of the nature and purpose of escrow accounts when used 

in connection with loans secured by residential real estate and the requirements 

under section 10 of this Act regarding such accounts. 

‘‘(10) An explanation of the choices available to buyers of residential real estate in selecting persons to provide necessary services incidental to a real estate 

settlement. 

‘‘(11) An explanation of a consumer’s responsibilities, liabilities, and obligations in a mortgage transaction. 

‘‘(12) An explanation of the nature and purpose of real estate appraisals, including the difference between an appraisal and a home inspection. 

‘‘(13) Notice that the Office of Housing of the Department of Housing and 

Urban Development has made publicly available a brochure regarding loan 

fraud and a World Wide Web address and toll-free telephone number for obtaining the brochure. 

The booklet prepared pursuant to this section shall take into consideration differences in real estate settlement procedures that may exist among the several 

States and territories of the United States and among separate political subdivisions 

within the same State and territory.’’; 

(3) in subsection (c), by inserting at the end the following new sentence: ‘‘Each 

lender shall also include with the booklet a reasonably complete or updated list 

of homeownership counselors who are certified pursuant to section 106(e) of the 

Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)) and located 

in the area of the lender.’’; and 


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(4) in subsection (d), by inserting after the period at the end of the first sentence the following: ‘‘The lender shall provide the HUD-issued booklet in the 

version that is most appropriate for the person receiving it.’’. 

TITLE III—COMBATING MORTGAGE FRAUD 

SEC. 301. AUTHORIZATION OF APPROPRIATIONS TO COMBAT MORTGAGE FRAUD. 

For fiscal years 2008, 2009, 2010, 2011, and 2012, there are authorized to be appropriated to the Attorney General a total of—

(1) $31,250,000 to support the employment of 30 additional agents of the Federal Bureau of Investigation and 2 additional dedicated prosecutors at the Department of Justice to coordinate prosecution of mortgage fraud efforts with the 

offices of the United States Attorneys; and 

(2) $750,000 to support the operations of interagency task forces of the Federal Bureau of Investigation in the areas with the 15 highest concentrations of 

mortgage fraud. 

PURPOSE AND SUMMARY

H.R. 5830, the FHA Housing Stabilization and Homeownership 

Retention Act of 2008, is intended to create a voluntary Federal 

Housing Administration (FHA) program that provides mortgage refinancing assistance to allow families to stay in their homes, protect neighborhoods, and help stabilize the housing market. H.R. 

5830 seeks to stem the rise in mortgage foreclosures by allowing 

FHA to insure and guarantee refinanced mortgages that have been 

significantly written down by mortgage holders and lenders. H.R. 

5830 would permit FHA to provide up to $300 billion in new guarantees to help refinance at-risk borrowers into viable mortgages. In 

exchange for the acceptance of a substantial write-down of principal, the existing lender or mortgage holder would receive a short 

payment from the proceeds of a new FHA loan if the restructured 

loan would result in terms that the borrower can reasonably be expected to pay. The existing lender or mortgage holder would have 

a cash payment and no further credit exposure to the borrower. 

Under the program created by H.R. 5830, a borrower or existing 

loan servicer of an eligible loan would contact an FHA-approved 

lender, who would determine the size of a loan that would be consistent with the requirements of the program and that the borrower could reasonably repay. If the current lender or mortgage 

holder agrees to a write-down that is sufficient to meet the requirements of the program and make the new loan affordable, the FHAlender will pay off the discounted existing mortgage. 

In addition to a first lien, the program gives the government a 

soft second lien to help defray the government’s costs and prevent 

unjust enrichment (e.g., borrower flipping). When the borrower 

sells the home or refinances the loan, the borrower will pay from 

any profits the higher of an ongoing exit fee equal to 3 percent of 

the original FHA loan balance or a declining percentage of any 

profits. 

H.R. 5830 also establishes within the Department of Housing 

and Urban Development (HUD) an Office of Housing Counseling 

that will conduct activities relating to homeownership and rental 

housing counseling, and authorizes appropriations to hire additional FBI agents and Department of Justice prosecutors to combat 

mortgage fraud. 


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BACKGROUND AND NEED FOR LEGISLATION

A record number of American families are facing or are at risk 

of foreclosure. According to data from the Mortgage Bankers Association (MBA), the delinquency rate for mortgage loans on singlefamily properties stood at 5.82 percent of all loans outstanding in 

the fourth quarter of 2007, up almost 20 percent from one year ago. 

This is the highest total delinquency rate in the MBA survey in 

over 20 years. And this delinquency data does not take into account 

loans in the foreclosure process. The percentage of loans in the 

foreclosure process has risen over 70 percent in the last year and 

stands at the highest level ever. In her testimony at the April 9, 

2008 hearing, Chairman Sheila Bair of the FDIC also cited data 

from the MBA and observed that over 20 percent of subprime adjustable rate mortgages (ARMs) were seriously delinquent in the 

fourth quarter of 2007, and over 14 percent of all subprime mortgages were seriously delinquent. 

The increase in foreclosures and delinquencies can be traced to 

the rise of securitization coupled with the proliferation of subprime 

and other exotic ARMs, which were given to many borrowers with 

the expectation that they could sell or refinance before the loans 

reset. The typical subprime hybrid ARM has a fixed interest rate 

during the initial two or three year period but then resets every six 

months. Many of these loans were extended under the assumption 

that housing prices would continue to appreciate. However, stagnant or negative home price appreciation has limited refinance options for many subprime—as well as Alt-A and prime—borrowers. 

According to Mark Zandi of Economy.com, 550,000 first mortgage 

loans were in default as of the end of January 2008. This pace 

would leave 2.2 million defaults this year and could go as high as 

3 million. In addition, Mr. Zandi also notes nearly 8.8 million 

homeowners, or 10 percent of all homeowners, are ‘‘underwater’’

(i.e., their mortgage debt exceeds the value of their homes). Similarly, Governor Randall Kroszner of the Federal Reserve testified 

at the April 9, 2008 hearing that more than 1.5 million foreclosures 

were started during 2007, up 53 percent from the previous year, 

and the consensus expectation is that the number of foreclosures 

in 2008 will likely exceed the number in 2007. 

Rising delinquency and foreclosure rates have reverberated in 

the secondary market, decreasing the value of mortgage backed securities and reducing the availability of credit. Accordingly, lenders 

have tightened credit standards, making it more difficult for delinquent borrowers to refinance. Chairman Bair noted the sharp contraction in credit availability in her April 9, 2008 testimony, stating that the total U.S. mortgage debt originated in the fourth quarter of 2007 was $450 billion, down 38 percent from the fourth quarter of 2006, and that the total issuance of subprime mortgagebacked securities fell by 89 percent in the fourth quarter of 2007 

compared to the prior year. 

At the same time, because of falling home prices in many parts 

of the country, many borrowers—even those current on their mortgages—find themselves unable to refinance into more affordable or 

fixed-rate products because their outstanding mortgage loan balances exceed their homes’ values. These borrowers’ inability to refinance before a rate reset may be creating a downward cycle with 


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increasing foreclosure rates, which in turn further lowers local 

property values, further eroding credit availability. A February 

2008 Center for Responsible Lending study notes that foreclosures 

have a significant impact on the neighborhoods and communities in 

which they occur, estimating that 40.6 million homes will experience devaluation due to foreclosures on neighboring properties that 

were financed with subprime loans. 

HEARINGS

During the 110th Congress, the Committee on Financial Services 

and its subcommittees held several hearings to examine the need 

for legislation and policy alternatives on this legislation. 

The Financial Services Committee held a hearing on April 10, 

2008, entitled ‘‘Using FHA for Housing Stabilization and Homeownership Retention.’’ The following witnesses testified: The Honorable Martin O’Malley, Governor, State of Maryland, The Honorable Adrian M. Fenty, Mayor, District of Columbia, The Honorable 

Thomas M. Menino, Mayor, City of Boston, The Honorable Oscar 

B. Goodman, Mayor, City of Las Vegas, Mr. Doug Garver, Executive Director, Ohio Housing Finance Agency, Mr. David C. 

Lizarraga, Chairman, US Hispanic Chamber of Commerce, Ms. 

Sheila Crowley, President, National Low Income Housing Coalition, 

Mr. Hilary O. Shelton, Director, NAACP Washington Bureau, Mr. 

Victor Burrola, Director, Homeownership Network, National Council of La Raza. 

The Financial Services Committee held a hearing on April 9, 

2008, entitled ‘‘Using FHA for Housing Stabilization and Homeownership Retention.’’ The following witnesses testified: The Honorable Sheila C. Bair, Chairman, Federal Deposit Insurance Corporation, The Honorable John C. Dugan, Comptroller, Office of the 

Comptroller of the Currency, The Honorable John M. Reich, Director, Office of Thrift Supervision, The Honorable Randall Kroszner, 

Board Member, Board of Governors of the Federal Reserve System, 

The Honorable Brian Montgomery, Assistant Secretary for Housing-Federal Housing Commissioner, United States Department of 

Housing and Urban Development, Mr. Brian Wesbury, Chief Economist, First Trust Advisors L.P., Dr. Alan S. Blinder, Ph.D., Gordon S. Rentschler Memorial Professor of Economics and Public Affairs, Princeton University, Dr. Allen Sinai, Chief Global Economist, Strategist and President, Decision Economics, Inc. 

The Financial Services Committee held a hearing on September 

20, 2007, entitled ‘‘Legislative and Regulatory Options for Minimizing and Mitigating Mortgage Foreclosures.’’ The following witnesses testified: The Honorable Henry M. Paulson, Jr., Secretary of 

the Treasury, United States Department of the Treasury, The Honorable Alphonso Jackson, Secretary of Housing and Urban Development, United States Department of Housing and Urban Development, The Honorable Ben S. Bernanke, Chairman, Board of Governors of the Federal Reserve System, Mr. Daniel H. Mudd, President and Chief Executive Officer, Fannie Mae, Dr. Richard F. 

Syron, Chairman and Chief Executive Officer, Freddie Mac, Ms. 

Judith Liben, Massachusetts Law Reform Institute, Mr. John M. 

Robbins, Chairman, Mortgage Bankers Association, Mr. Harry H. 

Dinham, CMC, Past-President, National Association of Mortgage 

Brokers (NAMB), The Dinham Companies, Mr. Bruce Marks, Chief 


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Executive Officer, Neighborhood Assistance Corporation of America, Mr. Alex J. Pollock, Resident Fellow, American Enterprise Institute. 

The Financial Services Committee held a field hearing in Minneapolis, Minnesota on August 9, 2007, entitled ‘‘The Effect of 

Predatory Lending and the Foreclosure Crisis on Twin Cities’ Communities and Neighborhoods.’’ The following witnesses testified: 

The Honorable R. T. Rybak, Mayor, Minneapolis, Minnesota, The 

Honorable Chris Coleman, Mayor, St. Paul, Minnesota, The Honorable Lori Swanson, Attorney General, State of Minnesota, Mr. 

Richard M. Todd, Minneapolis Federal Reserve Chair Vice President, Federal Reserve Bank of Minneapolis, Ms. Sharon Glover, 

Golden Valley, Minnesota, Mr. Dante Rivera, St. Paul, Minnesota, 

Ms. Dorothy Bridges, President, Franklin Avenue Bank, Minneapolis, Minnesota, Mr. Paul Satriano, ACORN National Treasurer, MN ACORN State Board Director, St. Paul, Minnesota, Ms. 

Patricia Hanson, President, Community Development and Specialized Lending, Wells Fargo, Minneapolis, Minnesota, Ms. Sheri 

Pugh Sullivan, Executive Director, Northside Residents Resource 

Council, Minneapolis, Minnesota, Mr. Tim Marx, Commissioner, 

Minnesota Housing Finance Agency, St. Paul, Minnesota, Ms. Julie 

Gugin, Executive Director, Minnesota Home Ownership Center. 

The Subcommittee on Housing and Community Opportunity held 

a hearing on April 17, 2007, entitled ‘‘Possible Responses to Rising 

Mortgage Foreclosures.’’ The following witnesses testified: The 

Honorable Marcy Kaptur; The Honorable Michael R. Turner, The 

Honorable Sheila Bair, Chairman, Federal Deposit Insurance Corporation, The Honorable Brian Montgomery, Assistant Secretary 

for Housing, Department of Housing and Urban Development, Daniel Mudd, President and CEO, Fannie Mae, Richard F. Syron, 

Chairman & CEO, Freddie Mac, David Berenbaum, Executive Vice 

President, National Community Reinvestment Coalition, Janis 

Bowdler, Senior Policy Analyst, National Council of La Raza, The 

Honorable John H. Dalton, President, Housing Policy Council, The 

Financial Services Roundtable, Mr. George Miller, Executive Director, American Securitization Forum, also representing the Securities Industry and Financial Markets Association, Douglas A. 

Garver, Executive Director, Ohio Housing Finance Agency, Kenneth D. Wade, CEO, NeighborWorks America. 

The Subcommittee on Financial Institutions and Consumer Credit held a hearing on March 27, 2007, entitled ‘‘Subprime and Predatory Mortgage Lending: New Regulatory Guidance, Current Market 

Conditions and Effects on Regulated Financial Institutions.’’ The 

following witnesses testified: The Honorable Sheila Bair, Chairman, Federal Deposit Insurance Corporation, The Honorable John 

Reich, Director, Office of Thrift Supervision, The Honorable JoAnn 

Johnson, Chairman, National Credit Union Administration, Mr. E. 

Wayne Rushton, Senior Deputy Comptroller, Office of the Comptroller of the Currency, Ms. Sandra F. Braunstein, Director, Division of Consumer and Community Affairs, Federal Reserve Board, 

Mr. Steve Antonakes, Commissioner of Banks, Massachusetts Division of Banks, on behalf of Conference of State Banking Supervisors, Mr. Michael Calhoun, President, Center for Responsible 

Lending, Mr. John Taylor, President & CEO, National Community 

Reinvestment Coalition, Mr. Allen Fishbein, Director of Housing 


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and Credit Policy, Consumer Federation of America, Mr. John Robbins, Chairman, Mortgage Bankers Association, Mr. Harry H. 

Dinham, CMC, President, National Association of Mortgage Brokers, Mr. Alex J. Pollock, Resident Fellow, American Enterprise Institute. 

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

April 24 and 30, 2008, and on May 1, 2008, ordered H.R. 5830, the 

‘‘FHA Housing Stabilization and Homeownership Retention Act of 

2008’’, as amended, favorably reported by a record vote of 46 yeas 

and 21 nays. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. A motion by Mr. 

Frank to report the bill, as amended, to the House with a favorable 

recommendation was agreed to by a record vote of 46 yeas and 21 

nays (Record vote FC–110). The names of Members voting for and 

against follow: 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. X ........... ............. Mr. Bachus ........................... ........... X .............

Mr. Kanjorski ......................... X ........... ............. Ms. Pryce (OH) ..................... X ........... .............

Ms. Waters ............................ X ........... ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... X ........... ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... X ........... ............. Mr. Royce ............................. ........... X .............

Ms. Vela ́zquez ....................... X ........... ............. Mr. Lucas ............................. ........... ........... .............

Mr. Watt ................................ X ........... ............. Mr. Paul ............................... ........... X .............

Mr. Ackerman ........................ X ........... ............. Mr. LaTourette ...................... X ........... .............

Mr. Sherman ......................... X ........... ............. Mr. Manzullo ........................ ........... X .............

Mr. Meeks ............................. X ........... ............. Mr. Jones .............................. ........... X .............

Mr. Moore (KS) ...................... X ........... ............. Mrs. Biggert ......................... ........... ........... .............

Mr. Capuano ......................... X ........... ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Clay ................................ X ........... ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... X ........... ............. Mr. Feeney ............................ ........... X .............

Mr. Baca ............................... X ........... ............. Mr. Hensarling ..................... ........... X .............

Mr. Lynch .............................. X ........... ............. Mr. Garrett (NJ) .................... ........... X .............

Mr. Miller (NC) ...................... X ........... ............. Ms. Brown-Waite .................. X ........... .............

Mr. Scott ............................... X ........... ............. Mr. Barrett (SC) ................... ........... X .............

Mr. Green .............................. X ........... ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... X ........... ............. Mr. Pearce ............................ ........... X .............

Ms. Bean ............................... X ........... ............. Mr. Neugebauer .................... ........... X .............

Ms. Moore (WI) ...................... X ........... ............. Mr. Price (GA) ...................... ........... X .............

Mr. Davis (TN) ...................... X ........... ............. Mr. Davis (KY) ...................... ........... X .............

Mr. Hodes .............................. X ........... ............. Mr. McHenry ......................... ........... X .............

Mr. Ellison ............................. X ........... ............. Mr. Campbell ....................... ........... X .............

Mr. Klein ............................... X ........... ............. Mr. Putnam .......................... ........... X .............

Mr. Mahoney (FL) .................. X ........... ............. Mrs. Bachmann .................... ........... X .............

Mr. Wilson ............................. X ........... ............. Mr. Roskam .......................... ........... X .............

Mr. Perlmutter ....................... X ........... ............. Mr. Marchant ....................... ........... X .............

Mr. Murphy ............................ X ........... ............. Mr. McCotter ........................ ........... X .............

Mr. Donnelly .......................... X ........... ............. Mr. McCarthy ........................ ........... X .............

Mr. Wexler ............................. X ........... ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... X ........... .............

Mr. Boren .............................. X ........... .............

Mr. Foster .............................. X ........... .............

Mr. Carson ............................ X ........... .............


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The following amendments were disposed of by record votes. The 

names of Members voting for and against follow: 

An amendment in the nature of a substitute by Mr. Bachus, Mrs. 

Biggert, and Mrs. Capito, no. 5, was NOT AGREED TO by a record 

vote of 23 yeas and 34 nays. (FC–91): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Ms. Pryce (OH) ..................... ........... ........... .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. ........... ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... ........... ........... .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. ........... ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Miller (CA) ..................... ........... X .............

Mr. Clay ................................ ........... ........... ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ ........... ........... .............

Mr. Baca ............................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. ........... ........... .............

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... ........... ............. Mr. Davis (KY) ...................... ........... ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... ........... ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... ........... ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... X ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... ........... .............

An amendment by Mr. Putnam, no. 9, regarding borrower bankruptcy history, was NOT AGREED TO by a record vote of 27 yeas 

and 32 nays (Record vote no. FC–92): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Ms. Pryce (OH) ..................... ........... ........... .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... ........... ........... .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. ........... ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Clay ................................ ........... ........... ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ ........... ........... .............

Mr. Baca ............................... ........... X ............. Mr. Hensarling ..................... X ........... .............


cprice-sewell on PROD1PC72 with HEARING
25 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. ........... ........... .............

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... ........... ............. Mr. Davis (KY) ...................... ........... ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... ........... ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... X ........... ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... X ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... ........... .............

An amendment by Mr. Watt and Ms. Vela ́zquez, no. 10, regarding legal assistance, was NOT AGREED TO by a record vote of 28 

yeas and 34 nays (Record vote no. FC–93): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... ........... X .............

Mr. Kanjorski ......................... X ........... ............. Ms. Pryce (OH) ..................... ........... ........... .............

Ms. Waters ............................ X ........... ............. Mr. Castle ............................ ........... X .............

Mrs. Maloney ......................... X ........... ............. Mr. King (NY) ....................... ........... X .............

Mr. Gutierrez ......................... X ........... ............. Mr. Royce ............................. ........... X .............

Ms. Vela ́zquez ....................... X ........... ............. Mr. Lucas ............................. ........... X .............

Mr. Watt ................................ X ........... ............. Mr. Paul ............................... ........... X .............

Mr. Ackerman ........................ X ........... ............. Mr. LaTourette ...................... ........... ........... .............

Mr. Sherman ......................... X ........... ............. Mr. Manzullo ........................ ........... X .............

Mr. Meeks ............................. X ........... ............. Mr. Jones .............................. ........... ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... ........... X .............

Mr. Capuano ......................... X ........... ............. Mr. Shays ............................. ........... X .............

Mr. Hinojosa .......................... X ........... ............. Mr. Miller (CA) ..................... ........... X .............

Mr. Clay ................................ X ........... ............. Mrs. Capito .......................... ........... X .............

Mrs. McCarthy ....................... X ........... ............. Mr. Feeney ............................ ........... ........... .............

Mr. Baca ............................... X ........... ............. Mr. Hensarling ..................... ........... X .............

Mr. Lynch .............................. X ........... ............. Mr. Garrett (NJ) .................... ........... X .............

Mr. Miller (NC) ...................... X ........... ............. Ms. Brown-Waite .................. ........... ........... .............

Mr. Scott ............................... X ........... ............. Mr. Barrett (SC) ................... ........... X .............

Mr. Green .............................. X ........... ............. Mr. Gerlach .......................... ........... X .............

Mr. Cleaver ........................... X ........... ............. Mr. Pearce ............................ ........... X .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... ........... X .............

Ms. Moore (WI) ...................... X ........... ............. Mr. Price (GA) ...................... ........... X .............

Mr. Davis (TN) ...................... ........... ........... ............. Mr. Davis (KY) ...................... ........... ........... .............

Mr. Hodes .............................. X ........... ............. Mr. McHenry ......................... ........... X .............

Mr. Ellison ............................. X ........... ............. Mr. Campbell ....................... ........... ........... .............

Mr. Klein ............................... X ........... ............. Mr. Putnam .......................... ........... X .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... ........... X .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... ........... X .............

Mr. Perlmutter ....................... X ........... ............. Mr. Marchant ....................... ........... X .............

Mr. Murphy ............................ X ........... ............. Mr. McCotter ........................ ........... X .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ ........... X .............

Mr. Wexler ............................. X ........... ............. Mr. Heller ............................. ........... X .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. X ........... .............

Mr. Carson ............................ X ........... .............


cprice-sewell on PROD1PC72 with HEARING
26 

A motion to reconsider the vote on the amendment by Mr. Watt 

no. 10 was AGREED TO by a record vote of 36 yeas and 23 nays. 

(Record vote no. FC–94): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. X ........... ............. Mr. Bachus ........................... ........... X .............

Mr. Kanjorski ......................... X ........... ............. Ms. Pryce (OH) ..................... ........... ........... .............

Ms. Waters ............................ X ........... ............. Mr. Castle ............................ ........... X .............

Mrs. Maloney ......................... X ........... ............. Mr. King (NY) ....................... ........... ........... .............

Mr. Gutierrez ......................... ........... ........... ............. Mr. Royce ............................. ........... ........... .............

Ms. Vela ́zquez ....................... X ........... ............. Mr. Lucas ............................. ........... X .............

Mr. Watt ................................ X ........... ............. Mr. Paul ............................... ........... ........... .............

Mr. Ackerman ........................ X ........... ............. Mr. LaTourette ...................... ........... X .............

Mr. Sherman ......................... X ........... ............. Mr. Manzullo ........................ ........... X .............

Mr. Meeks ............................. X ........... ............. Mr. Jones .............................. ........... X .............

Mr. Moore (KS) ...................... X ........... ............. Mrs. Biggert ......................... ........... X .............

Mr. Capuano ......................... X ........... ............. Mr. Shays ............................. ........... ........... .............

Mr. Hinojosa .......................... X ........... ............. Mr. Miller (CA) ..................... ........... ........... .............

Mr. Clay ................................ X ........... ............. Mrs. Capito .......................... ........... X .............

Mrs. McCarthy ....................... X ........... ............. Mr. Feeney ............................ ........... X .............

Mr. Baca ............................... X ........... ............. Mr. Hensarling ..................... ........... X .............

Mr. Lynch .............................. X ........... ............. Mr. Garrett (NJ) .................... ........... ........... .............

Mr. Miller (NC) ...................... X ........... ............. Ms. Brown-Waite .................. ........... ........... .............

Mr. Scott ............................... X ........... ............. Mr. Barrett (SC) ................... ........... X .............

Mr. Green .............................. X ........... ............. Mr. Gerlach .......................... ........... X .............

Mr. Cleaver ........................... X ........... ............. Mr. Pearce ............................ ........... X .............

Ms. Bean ............................... X ........... ............. Mr. Neugebauer .................... ........... X .............

Ms. Moore (WI) ...................... X ........... ............. Mr. Price (GA) ...................... ........... X .............

Mr. Davis (TN) ...................... X ........... ............. Mr. Davis (KY) ...................... ........... ........... .............

Mr. Hodes .............................. X ........... ............. Mr. McHenry ......................... ........... X .............

Mr. Ellison ............................. X ........... ............. Mr. Campbell ....................... ........... X .............

Mr. Klein ............................... X ........... ............. Mr. Putnam .......................... ........... ........... .............

Mr. Mahoney (FL) .................. X ........... ............. Mrs. Bachmann .................... ........... X .............

Mr. Wilson ............................. X ........... ............. Mr. Roskam .......................... ........... X .............

Mr. Perlmutter ....................... X ........... ............. Mr. Marchant ....................... ........... X .............

Mr. Murphy ............................ X ........... ............. Mr. McCotter ........................ ........... X .............

Mr. Donnelly .......................... X ........... ............. Mr. McCarthy ........................ ........... X .............

Mr. Wexler ............................. X ........... ............. Mr. Heller ............................. ........... X .............

Mr. Marshall ......................... X ........... .............

Mr. Boren .............................. X ........... .............

Mr. Foster .............................. X ........... .............

Mr. Carson ............................ X ........... .............

An amendment by Mr. Perlmutter, no. 10a, regarding counseling intermediaries, to the amendment offered by Mr. Watt, no. 10, 

was AGREED TO by a record vote of 45 yeas and 22 nays (Record 

vote no. FC–95): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. X ........... ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... X ........... ............. Ms. Pryce (OH) ..................... ........... ........... .............

Ms. Waters ............................ X ........... ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... X ........... ............. Mr. King (NY) ....................... ........... X .............

Mr. Gutierrez ......................... X ........... ............. Mr. Royce ............................. ........... X .............

Ms. Vela ́zquez ....................... X ........... ............. Mr. Lucas ............................. ........... X .............

Mr. Watt ................................ X ........... ............. Mr. Paul ............................... ........... X .............

Mr. Ackerman ........................ X ........... ............. Mr. LaTourette ...................... ........... X .............

Mr. Sherman ......................... X ........... ............. Mr. Manzullo ........................ ........... X .............

Mr. Meeks ............................. X ........... ............. Mr. Jones .............................. X ........... .............

Mr. Moore (KS) ...................... X ........... ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... X ........... ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Miller (CA) ..................... ........... X .............

Mr. Clay ................................ X ........... ............. Mrs. Capito .......................... ........... X .............

Mrs. McCarthy ....................... X ........... ............. Mr. Feeney ............................ ........... X .............

Mr. Baca ............................... X ........... ............. Mr. Hensarling ..................... ........... X .............

Mr. Lynch .............................. X ........... ............. Mr. Garrett (NJ) .................... ........... X .............


cprice-sewell on PROD1PC72 with HEARING
27 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Miller (NC) ...................... X ........... ............. Ms. Brown-Waite .................. X ........... .............

Mr. Scott ............................... X ........... ............. Mr. Barrett (SC) ................... ........... X .............

Mr. Green .............................. X ........... ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... X ........... ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... X ........... ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... X ........... ............. Mr. Price (GA) ...................... ........... X .............

Mr. Davis (TN) ...................... X ........... ............. Mr. Davis (KY) ...................... ........... X .............

Mr. Hodes .............................. X ........... ............. Mr. McHenry ......................... ........... X .............

Mr. Ellison ............................. X ........... ............. Mr. Campbell ....................... ........... X .............

Mr. Klein ............................... X ........... ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. X ........... ............. Mrs. Bachmann .................... ........... X .............

Mr. Wilson ............................. X ........... ............. Mr. Roskam .......................... ........... X .............

Mr. Perlmutter ....................... X ........... ............. Mr. Marchant ....................... ........... X .............

Mr. Murphy ............................ X ........... ............. Mr. McCotter ........................ ........... X .............

Mr. Donnelly .......................... X ........... ............. Mr. McCarthy ........................ ........... X .............

Mr. Wexler ............................. ........... ........... ............. Mr. Heller ............................. ........... X .............

Mr. Marshall ......................... X ........... .............

Mr. Boren .............................. X ........... .............

Mr. Foster .............................. X ........... .............

Mr. Carson ............................ X ........... .............

An amendment by Mr. Price, no. 10b, limiting funds for purposes of civil litigation, to the amendment offered by Mr. Watt, no. 

10, was NOT AGREED TO by a record vote of 33 yeas and 36 nays 

(Record vote no. FC–96): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Ms. Pryce (OH) ..................... X ........... .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... X ........... .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Clay ................................ ........... X ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... X ............. Mr. Davis (KY) ...................... X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... ........... ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............


cprice-sewell on PROD1PC72 with HEARING
28 

An amendment by Mr. Price (GA), no. 11a, regarding veterans 

counseling, to the amendment offered by Mr. Frank, no. 11, as a 

substitute for the amendment offered by Mr. Watt, no. 10, was 

NOT AGREED TO by a record vote of 33 yeas and 36 nays (Record 

vote no. FC–97): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Ms. Pryce (OH) ..................... X ........... .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. X ...........

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... X ........... .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Clay ................................ ........... X ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... X ............. Mr. Davis (KY) ...................... X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... ........... ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

An amendment offered by Mr. Frank, no. 11, regarding legal assistance and veterans counseling, as a substitute for the amendment offered by Mr. Watt, no. 10, was AGREED TO by a record 

vote of 69 yeas and 0 nays (Record vote no. FC–98): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. X ........... ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... X ........... ............. Ms. Pryce (OH) ..................... X ........... .............

Ms. Waters ............................ X ........... ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... X ........... ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... X ........... ............. Mr. Royce ............................. X ........... .............

Ms. Vela ́zquez ....................... X ........... ............. Mr. Lucas ............................. X ........... .............

Mr. Watt ................................ X ........... ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ X ........... ............. Mr. LaTourette ...................... X ........... .............

Mr. Sherman ......................... X ........... ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. X ........... ............. Mr. Jones .............................. X ........... .............

Mr. Moore (KS) ...................... X ........... ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... X ........... ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... X ........... ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Clay ................................ X ........... ............. Mrs. Capito .......................... X ........... .............


cprice-sewell on PROD1PC72 with HEARING
29 

Representative Aye Nay Present Representative Aye Nay Present 

Mrs. McCarthy ....................... X ........... ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... X ........... ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. X ........... ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... X ........... ............. Ms. Brown-Waite .................. X ........... .............

Mr. Scott ............................... X ........... ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. X ........... ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... X ........... ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... X ........... ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... X ........... ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... X ........... ............. Mr. Davis (KY) ...................... X ........... .............

Mr. Hodes .............................. X ........... ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. X ........... ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... X ........... ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. X ........... ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. X ........... ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... X ........... ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ X ........... ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... X ........... ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... ........... ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... X ........... .............

Mr. Boren .............................. X ........... .............

Mr. Foster .............................. X ........... .............

Mr. Carson ............................ X ........... .............

An amendment by Mr. Manzullo, no. 18, striking the treatment 

of multiple mortgage liens was NOT AGREED TO by a record vote 

of 33 yeas and 36 nays (Record vote no. FC–99): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Ms. Pryce (OH) ..................... X ........... .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... X ........... .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Clay ................................ ........... X ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... X ............. Mr. Davis (KY) ...................... X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... ........... ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............


cprice-sewell on PROD1PC72 with HEARING
30 

An amendment by Mr. Marshall, no. 21, regarding flexible underwriting standards, was AGREED TO by a record vote of 36 yeas 

and 32 nays (Record vote no. FC–100): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. X ........... ............. Mr. Bachus ........................... ........... X .............

Mr. Kanjorski ......................... X ........... ............. Ms. Pryce (OH) ..................... ........... X .............

Ms. Waters ............................ X ........... ............. Mr. Castle ............................ ........... X .............

Mrs. Maloney ......................... X ........... ............. Mr. King (NY) ....................... ........... X .............

Mr. Gutierrez ......................... X ........... ............. Mr. Royce ............................. ........... X .............

Ms. Vela ́zquez ....................... X ........... ............. Mr. Lucas ............................. ........... X .............

Mr. Watt ................................ X ........... ............. Mr. Paul ............................... ........... X .............

Mr. Ackerman ........................ X ........... ............. Mr. LaTourette ...................... ........... X .............

Mr. Sherman ......................... X ........... ............. Mr. Manzullo ........................ ........... X .............

Mr. Meeks ............................. X ........... ............. Mr. Jones .............................. ........... X .............

Mr. Moore (KS) ...................... X ........... ............. Mrs. Biggert ......................... ........... X .............

Mr. Capuano ......................... X ........... ............. Mr. Shays ............................. ........... X .............

Mr. Hinojosa .......................... X ........... ............. Mr. Miller (CA) ..................... ........... X .............

Mr. Clay ................................ X ........... ............. Mrs. Capito .......................... ........... X .............

Mrs. McCarthy ....................... X ........... ............. Mr. Feeney ............................ ........... X .............

Mr. Baca ............................... X ........... ............. Mr. Hensarling ..................... ........... X .............

Mr. Lynch .............................. X ........... ............. Mr. Garrett (NJ) .................... ........... X .............

Mr. Miller (NC) ...................... X ........... ............. Ms. Brown-Waite .................. ........... X .............

Mr. Scott ............................... X ........... ............. Mr. Barrett (SC) ................... ........... X .............

Mr. Green .............................. X ........... ............. Mr. Gerlach .......................... ........... X .............

Mr. Cleaver ........................... X ........... ............. Mr. Pearce ............................ ........... X .............

Ms. Bean ............................... X ........... ............. Mr. Neugebauer .................... ........... X .............

Ms. Moore (WI) ...................... X ........... ............. Mr. Price (GA) ...................... ........... X .............

Mr. Davis (TN) ...................... X ........... ............. Mr. Davis (KY) ...................... ........... X .............

Mr. Hodes .............................. X ........... ............. Mr. McHenry ......................... ........... X .............

Mr. Ellison ............................. X ........... ............. Mr. Campbell ....................... ........... X .............

Mr. Klein ............................... X ........... ............. Mr. Putnam .......................... ........... X .............

Mr. Mahoney (FL) .................. X ........... ............. Mrs. Bachmann .................... ........... X .............

Mr. Wilson ............................. X ........... ............. Mr. Roskam .......................... ........... X .............

Mr. Perlmutter ....................... X ........... ............. Mr. Marchant ....................... ........... X .............

Mr. Murphy ............................ X ........... ............. Mr. McCotter ........................ ........... X .............

Mr. Donnelly .......................... X ........... ............. Mr. McCarthy ........................ ........... X .............

Mr. Wexler ............................. ........... ........... ............. Mr. Heller ............................. ........... X .............

Mr. Marshall ......................... X ........... .............

Mr. Boren .............................. X ........... .............

Mr. Foster .............................. X ........... .............

Mr. Carson ............................ X ........... .............

An amendment by Mrs. Biggert, no. 23, regarding FHA Secure 

was NOT AGREED TO by a record vote of 31 yeas and 38 nays 

(Record vote no. FC–101): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Ms. Pryce (OH) ..................... X ........... .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... X ........... .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. ........... X .............

Mr. Hinojosa .......................... ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Clay ................................ ........... X ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. ........... X .............


cprice-sewell on PROD1PC72 with HEARING
31 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... X ............. Mr. Davis (KY) ...................... X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... ........... ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

An amendment by Mr. Davis (KY), no. 24, regarding sunset, was 

NOT AGREED TO by a record vote of 33 yeas and 36 nays. (Record 

vote no. FC–102): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Ms. Pryce (OH) ..................... X ........... .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... X ........... .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Clay ................................ ........... X ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... X ............. Mr. Davis (KY) ...................... X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... ........... ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............


cprice-sewell on PROD1PC72 with HEARING
32 

An amendment by Mr. Garrett (NJ), no. 25, reducing the mortgagor’s equity stake, was NOT AGREED TO by a record vote of 30 

yeas and 39 nays (Record vote no. FC–103): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Ms. Pryce (OH) ..................... ........... X .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... ........... X .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. X ...........

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Clay ................................ ........... X ............. Mrs. Capito .......................... ........... X .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... X ............. Mr. Davis (KY) ...................... X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... ........... ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

An amendment by Mr. Barrett (SC), no. 26, regarding denial of 

insurance based solely on credit scores or delinquency, was NOT 

AGREED TO by a record vote of 33 yeas and 36 nays (Record vote 

no. FC–104): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Ms. Pryce (OH) ..................... X ........... .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Ms. Vel ́zquez ......................... ........... X ............. Mr. Lucas ............................. X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... X ........... .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Clay ................................ ........... X ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............


cprice-sewell on PROD1PC72 with HEARING
33 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... X ............. Mr. Davis (KY) ...................... X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... ........... ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

An amendment by Mr. Neugebauer, no. 27, regarding subordination certificates, was NOT AGREED TO by a record vote of 22 yeas 

and 47 nays (Record vote no. FC–105): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Ms. Pryce (OH) ..................... ........... X .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ ........... X .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... ........... X .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. ........... X .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... ........... X .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. ........... X .............

Mr. Hinojosa .......................... ........... X ............. Mr. Miller (CA) ..................... ........... X .............

Mr. Clay ................................ ........... X ............. Mrs. Capito .......................... ........... X .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. ........... X .............

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... ........... X .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... X ............. Mr. Davis (KY) ...................... X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ ........... X .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... ........... ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

An amendment by Mrs. Bachmann and Mr. McHenry, no. 28, regarding Oversight Board underwriting standards, was NOT 


cprice-sewell on PROD1PC72 with HEARING
34 

AGREED TO by a record vote of 33 yeas and 36 nays (Record vote 

no. FC–106): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... X ............. Ms. Pryce (OH) ..................... X ........... .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. X ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... X ........... .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... X ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... X ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Clay ................................ ........... X ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... X ............. Mr. Davis (KY) ...................... X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... ........... ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

An amendment by Mr. Roskam, no. 14, regarding eligibility of 

mortgages by adequacy of underwriting, as amended, was NOT 

AGREED TO by a record vote of 28 yeas and 29 nays (Record vote 

no. FC–107): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... ........... ............. Ms. Pryce (OH) ..................... X ........... .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. ........... ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... ........... ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... X ........... .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... ........... ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Miller (CA) ..................... X ........... .............

Mr. Clay ................................ ........... ........... ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... ........... ........... ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. X ........... .............


cprice-sewell on PROD1PC72 with HEARING
35 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... ........... ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... ........... ............. Mr. Davis (KY) ...................... ........... ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... ........... ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... ........... ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... X ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

An amendment by Mr. Hensarling, no. 17, regarding maximum 

income, was NOT AGREED TO by a record vote of 28 yeas and 36 

nays (Record vote no. FC–108): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... ........... ............. Mr. Pryce (OH) ...................... X ........... .............

Ms. Waters ............................ ........... x ............. Mr. Castle ............................ X ........... .............

Mrs. Maloney ......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. ........... X .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. ........... ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... ........... X .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jones .............................. X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... ........... ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. X ........... .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Miller (CA) ..................... ........... X .............

Mr. Clay ................................ ........... ........... ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... ........... ........... ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... X ............. Mr. Davis (KY) ...................... X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putman .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mrs. Bachmann .................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... X ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............


cprice-sewell on PROD1PC72 with HEARING
36 

An amendment by Mr. Price (GA), no. 27, requiring offsets, was 

NOT AGREED TO by a record vote of 29 yeas and 37 nays (Record 

vote no. FC–109): 

Representative Aye Nay Present Representative Aye Nay Present 

Mr. Frank .............................. ........... X ............. Mr. Bachus ........................... X ........... .............

Mr. Kanjorski ......................... ........... ........... ............. Mr. Pryce (OH) ...................... X ........... .............

Ms. Waters ............................ ........... X ............. Mr. Castle ............................ X ........... .............

Mr. Maloney .......................... ........... X ............. Mr. King (NY) ....................... X ........... .............

Mr. Gutierrez ......................... ........... X ............. Mr. Royce ............................. X ........... .............

Ms. Vela ́zquez ....................... ........... X ............. Mr. Lucas ............................. ........... ........... .............

Mr. Watt ................................ ........... X ............. Mr. Paul ............................... X ........... .............

Mr. Ackerman ........................ ........... X ............. Mr. LaTourette ...................... ........... X .............

Mr. Sherman ......................... ........... X ............. Mr. Manzullo ........................ X ........... .............

Mr. Meeks ............................. ........... X ............. Mr. Jomes ............................. X ........... .............

Mr. Moore (KS) ...................... ........... X ............. Mrs. Biggert ......................... ........... ........... .............

Mr. Capuano ......................... ........... X ............. Mr. Shays ............................. ........... X .............

Mr. Hinojosa .......................... ........... ........... ............. Mr. Miller .............................. X ........... .............

Mr. Clay ................................ ........... X ............. Mrs. Capito .......................... X ........... .............

Mrs. McCarthy ....................... ........... X ............. Mr. Feeney ............................ X ........... .............

Mr. Baca ............................... ........... X ............. Mr. Hensarling ..................... X ........... .............

Mr. Lynch .............................. ........... X ............. Mr. Garrett (NJ) .................... X ........... .............

Mr. Miller (NC) ...................... ........... X ............. Ms. Brown-Waite .................. X ........... .............

Mr. Scott ............................... ........... X ............. Mr. Barrett (SC) ................... X ........... .............

Mr. Green .............................. ........... X ............. Mr. Gerlach .......................... X ........... .............

Mr. Cleaver ........................... ........... X ............. Mr. Pearce ............................ X ........... .............

Ms. Bean ............................... ........... X ............. Mr. Neugebauer .................... X ........... .............

Ms. Moore (WI) ...................... ........... X ............. Mr. Price (GA) ...................... X ........... .............

Mr. Davis (TN) ...................... ........... X ............. Mr. Davis .............................. X ........... .............

Mr. Hodes .............................. ........... X ............. Mr. McHenry ......................... X ........... .............

Mr. Ellison ............................. ........... X ............. Mr. Campbell ....................... X ........... .............

Mr. Klein ............................... ........... X ............. Mr. Putnam .......................... X ........... .............

Mr. Mahoney (FL) .................. ........... X ............. Mr. Bachmann ..................... X ........... .............

Mr. Wilson ............................. ........... X ............. Mr. Roskam .......................... X ........... .............

Mr. Perlmutter ....................... ........... X ............. Mr. Marchant ....................... X ........... .............

Mr. Murphy ............................ ........... X ............. Mr. McCotter ........................ X ........... .............

Mr. Donnelly .......................... ........... X ............. Mr. McCarthy ........................ X ........... .............

Mr. Wexler ............................. ........... X ............. Mr. Heller ............................. X ........... .............

Mr. Marshall ......................... ........... X .............

Mr. Boren .............................. ........... X .............

Mr. Foster .............................. ........... X .............

Mr. Carson ............................ ........... X .............

During the consideration of the bill, the following amendments 

were also considered: 

An amendment by Mrs. Bean and Mr. McCarthy (CA), no. 1, regarding ineligibility for fraud conviction, was AGREED TO by voice 

vote. 

An amendment by Mr. Frank, no. 2, regarding flexible underwriting criteria, was AGREED TO by voice vote. 

An amendment by Ms. Bean, no. 3, regarding exit premium 

modifications, was AGREED TO by voice vote. 

An amendment by Mr. Moore (KS) and Mr. Shays, no. 4, regarding verification of income of mortgagor, was AGREED TO by voice 

vote. 

An amendment by Mrs. Biggert and Mr. LaTourette, no. 6, regarding housing counseling, was AGREED TO by voice vote. 

An amendment by Mrs. Capito, no. 7, regarding a temporary increase in maximum loan guaranty amount for certain housing 

loans, was AGREED TO by voice vote. 

An amendment by Mr. Mahoney, no. 8, regarding counseling priority, was AGREED TO by voice vote. 


cprice-sewell on PROD1PC72 with HEARING
37 

An amendment by Mrs. Capito, no. 7, regarding a temporary increase in maximum loan guaranty amount for certain housing 

loans, was AGREED TO by voice vote. 

An amendment by Mr. Mahoney, no. 8, regarding counseling priority, was AGREED TO by voice vote. 

An amendment by Mr. Watt, Ms. Vela ́zquez and Mr. Green, no. 

10, regarding distribution of funds by the neighborhood Reinvestment Corporation, as amended by the substitute amendment offered by Mr. Frank, was AGREED TO by voice vote. An amendment offered by Mr. Price, no. 10c, to the amendment by Mr. Watt 

was AGREED TO agreed to by voice vote. 

An amendment by Mr. Miller (CA), no. 11, relating to a study of 

possible accounting revisions relating to property at risk of foreclosure, was AGREED TO by voice vote. 

An amendment by Mr. Carson, no. 12, regarding programs with 

history of outreach, was AGREED TO by voice vote. 

An amendment by Mr. Neugebauer, no. 13, regarding Inspector 

general audit of loss mitigation counseling, was AGREED TO by 

voice vote. 

An amendment by Mr. Hensarling, no. 14, regarding borrower 

certification, as amended by the amendment by Mr. Frank, no. 14a, 

was AGREED TO by voice vote. 

A point of order that the amendment by Ms. Moore (WI), no. 15, 

regarding funding for emergency food and shelter, was not germane 

was SUSTAINED. 

An amendment by Mr. Kanjorski and Mrs. Biggert, no. 16, regarding appraisal standards was AGREED TO by voice vote. 

An amendment by Mr. Meeks, no. 18, regarding a General Accountability Office study of credit markets, was AGREED TO by 

voice vote. 

An amendment by Mr. Miller (NC), no. 20, regarding mortgage 

servicer disclosure, was OFFERED AND WITHDRAWN. 

An amendment by Mr. Hensarling, no. 21, regarding demonstrated ability for responsible homeownership, was NOT 

AGREED TO by voice vote. 

An amendment by Mr. Baca and Mrs. McCarthy (NY), no. 23, regarding in person counseling outreach, was AGREED TO by voice 

vote. 

An amendment by Mr. Garrett (NJ), no. 31, regarding shared 

risk, was NOT AGREED TO by voice vote. 

An amendment by Mr. Neugebauer, no. 32, regarding debt to income ratio, was NOT AGREED TO by voice vote. 

An amendment by Mr. McHenry, no. 34, regarding certification 

of only residence, was AGREED TO by voice vote. 

An amendment by Mr. Price (GA), no. 35, striking legal counseling assistance, was OFFERED and WITHDRAWN. 

An amendment by Mr. Price (GA), no. 36, regarding veterans 

counseling, was OFFERED and WITHDRAWN. An amendment by 

Mr.Frank, no. 37, to the amendment was thereby withdrawn. 

An amendment by Mr. McHenry, no. 38 regarding disclosure, 

was AGREED TO by voice vote, as modified. 

An amendment by Mr. Hensarling, no. 39 regarding the current 

borrower debt to income ratio, was AGREED TO by voice vote. 


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38 

An amendment by Mrs. Biggert and Mr. LaTourette, no. 40, authorizing appropriations to combat mortgage fraud, was AGREED 

TO by voice vote. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee has held hearings and made 

findings that are reflected in this report. 

PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee establishes the following performance related goals and objectives for this legislation: 

H.R. 5830 is intended to create a voluntary Federal Housing Administration (FHA) program that provides mortgage refinancing assistance to allow families to stay in their homes, protect neighborhoods, and help stabilize the housing market. H.R. 5830 seeks to 

stem the rise in mortgage foreclosures by allowing FHA to insure 

and guarantee refinanced mortgages that have been significantly 

written down by mortgage holders and lenders. H.R. 5830 would 

permit FHA to provide up to $300 billion in new guarantees to help 

refinance at-risk borrowers into viable mortgages. In exchange for 

the acceptance of a substantial write-down of principal, the existing 

lender or mortgage holder would receive a short payment from the 

proceeds of a new FHA loan if the restructured loan would result 

in terms that the borrower can reasonably be expected to pay. The 

existing lender or mortgage holder would have a cash payment and 

no further credit exposure to the borrower. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 


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U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, May 2, 2008. 

Hon. BARNEY FRANK, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 5830, the FHA Housing 

Stabilization and Homeownership Retention Act of 2008. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Chad Chirico. 

Sincerely, 

ROBERT A. SUNSHINE

(For Peter R. Orszag, Director). 

Enclosure. 

H.R. 5830—FHA Housing Stabilization and Homeownership Retention Act of 2008 

Summary: CBO estimates that implementing this legislation 

would cost about $2.7 billion over the 2008–2013 period, assuming 

future appropriation actions consistent with the bill. Of that 

amount, about $1.7 billion would be needed for the estimated subsidy cost of insuring mortgages with a value of about $85 billion 

in a proposed new Federal Housing Administration (FHA) mortgage guarantee program. 

H.R. 5830 would authorize—for up to four years—a new mortgage guarantee program under FHA that would allow certain atrisk borrowers to refinance their mortgages after the mortgage 

holder (lender or servicer) agrees to a write-down of the existing 

loan (that is, a reduction in the amount of loan principal). This new 

program would be established and overseen by the Refinance Program Oversight Board (Oversight Board), also established under 

this legislation. The bill would authorize the appropriation of $720 

million over the 2008–2009 period for administrative support associated with this newprogram and to provide financial counseling 

services for certain borrowers. 

In addition, the legislation would establish an Office of Housing 

Counseling within the Department of Housing and Urban Development (HUD) and authorize the appropriation of $183 million over 

the 2008–2011 period for grants to states, local governments, and 

nonprofit organizations to support counseling services and a public 

service campaign to publicize financial counseling for home buyers, 

homeowners, and renters. H.R. 5830 also would authorize the appropriation of $32 million over the 2008–2012 period for the Department of Justice (DOJ) to support efforts to combat mortgage 

fraud. 

Finally, H.R. 5830 would increase by up to 75 percent the maximum guarantee that the Department of Veterans Affairs could 

provide to lenders who make loans to qualified veterans. Enacting 

that provision would reduce direct spending by $1 million in 2008. 

(The bill would not affect revenues.) 

H.R. 5830 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 


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Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 5830 is shown in the following table. The costs 

of this legislation fall within budget functions 370 (mortgage and 

housing credit), 700 (veterans benefits and services), and 750 (administration of justice). 

By fiscal year, in millions of dollars—

2008 2009 2010 2011 2012 2013 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

Homeownership Retention Loan Guarantee Program: 

Estimated Authorization Level ......................................................... 174 599 447 292 190 0 

Estimated Outlays ........................................................................... 157 556 462 307 201 19 

FHA Administrative Support and Counseling Services: 

Authorization Level .......................................................................... 360 360 0 0 0 0 

Estimated Outlays ........................................................................... 53 216 235 108 72 36 

HUD Administrative Support for Office of Housing Counseling, Grants, 

and Public Service Campaign: 

Estimated Authorization Level ......................................................... 61 61 61 61 16 16 

Estimated Outlays ........................................................................... 11 52 61 61 56 23 

Funding for the Department of Justice: 

Authorization Level .......................................................................... 4 7 7 7 7 0 

Estimated Outlays ........................................................................... 3 7 7 7 7 1 

Total Changes: 

Estimated Authorization Level ................................................ 599 1,027 515 360 213 16 

Estimated Outlays .................................................................. 224 831 765 483 336 79 

CHANGES IN DIRECT SPENDING 

Temporary Increase in Loan Guarantee Amount for Veterans Housing 

Loans: 

Estimated Authorization Level ......................................................... ¥1 * 0 0 0 0 

Estimated Outlays ........................................................................... ¥1 * 0 0 0 0 

Note: * = between ¥$500,000 and 0. 

Basis of estimate: For this estimate, we assume that the bill will 

be enacted by June 1, 2008, that a supplemental appropriation will 

be provided during 2008 to operate the program, and that the new 

loan-guarantee program would operate for four years. 

The bill’s cost would stem mostly from the new FHA program 

and the authorized administrative support and loan counseling activities, subject to appropriation of the necessary funds. CBO estimates that the new loan guarantee program would cost $1.7 billion 

over the 2008–2013 period, while the administrative support and 

counseling would cost $720 million over that period. Other discretionary costs for implementing the bill would total about $296 million over the 2008–2013 period. The Congress could choose to provide a larger or smaller share of the program’s multiyear cost in 

a 2008 supplemental appropriation than CBO has displayed in this 

estimate. 

CBO estimates that under the new FHA loan-guarantee program, FHA would insure about 500,000 loans over the 2008–2013 

period with an estimated average subsidy cost of about 2 percent 

of the loan principal. Assuming an average loan amount of 

$170,000 (after write-down of existing mortgages), we estimate that 

implementing H.R. 5830 would cost about $1.7 billion over the 

2008–2013 period to pay for the estimated subsidy cost of the new 

program. 


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Features of the proposed Homeownership Retention Loan Guarantee 

Program 

The Oversight Board established by H.R. 5830 would include the 

Secretary of the Treasury, the Secretary of HUD, and the Chairman of the Board of Governors of the Federal Reserve System (Federal Reserve). It would establish operational procedures, including 

underwriting standards for mortgages, and it would oversee the 

new loan-guarantee program. 

The proposed program would allow certain borrowers, who are at 

risk of defaulting on their mortgages, to refinance their home loans 

through a private lender with an FHA loan guarantee. To qualify 

for the program, the existing loans must be for an owner-occupied 

principal residence, have been originated on or before December 31, 

2007, and meet other conditions specified in the bill. 

Under the new program, the participating mortgage holder must 

agree to a loan refinancing arrangement that brings the loan-tovalue (LTV) ratio on the new FHA-insured loan to no greater than 

90 percent of the property’s current appraised value. That change 

would result in a substantial reduction in the payment owed by the 

borrower each month. (The LTV ratio indicates how much equity 

a borrower initially has in the home—in this case, no less than 10 

percent.) In addition to forgiving a portion on the debt of the existing loan, the mortgage holder would have to pay two fees: 3 percent 

of the original insured loan amount would be paid to FHA and not 

more than 2 percent of the original insured loan amount would be 

paid to cover origination costs and other closing costs for the new 

loan. In effect, the existing mortgage holder would take at least a 

15 percent write-down on the value of the existing mortgage, and 

thus receive no more than 85 percent of the property’s current 

value, after fees are taken into account. 

In addition, the new loan would carry a fixed interest rate and 

be subject to the loan limits in place for FHA’s single-family program at the time of the bill’s enactment. This legislation also would 

require FHA to charge the borrower an annual fee of 1.5 percent 

of the remaining insured principal balance each year. Furthermore, 

the program would provide that, upon sale, refinancing, or other 

disposition of the residence, the borrower would pay to FHA the 

greater of a fee equal to 3 percent of the original insured loan 

amount or a declining percentage of any net proceeds realized, including any appreciation in the home’s value. The percentage 

would start at 100 percent and reach 50 percent in the fourth year 

of the term of the new loan, and it would remain at that level for 

the duration of the loan. 

The budgetary impact of the new loan program depends on how 

many loans would be refinanced under this voluntary program and 

the likelihood that borrowers would default on their refinanced 

mortgages. 

Demand for the Homeownership Retention Loan Guarantee Program 

Since the end of the unusual boom in homeownership and housing prices from 2003 to early 2006, delinquencies and foreclosures 

on mortgages have risen, particularly on subprime loans and altA loans. (Subprime loans are made to borrowers with low credit 

scores or other impairments to their credit histories. Alt-A loans 


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1For additional details on the state of the nation’s housing market, see: Congressional Budget 

Office, Policy Options for the Housing and Financial Markets, CBO Paper (April 2008). 

are loans often made on the basis of little or no documentation of 

the borrower’s income and may include low-downpayment loans, 

loans that are not for owner’s principal residence, interest-only 

loans, and loans whose balances rise over time.) Because economic 

activity has slowed and house prices continue to decline in many 

areas of the United States, CBO expects that delinquencies and 

foreclosures on mortgage loans will continue to rise in the near 

term; in places where house prices have declined a great deal, some 

borrowers whose loan amount exceeds the value of their home may 

have little incentive to remain current on their loans.1

Because use of the program is contingent on the voluntary participation of both lenders and borrowers, demand for this program 

to refinance qualifying mortgages under this legislation is uncertain. Furthermore, several factors would influence whether lenders 

and borrowers would perceive the new program as their best option. 

Over the next four years, CBO estimates that about 500,000 borrowers would refinance troubled loans worth about $85 billion 

under this new program. The basis for this estimate of program 

volume is described below. 

Number of Foreclosure Proceedings. Based on information from 

the Federal Reserve and mortgage industry data, CBO estimates 

that there are about 11 million subprime and alt-A mortgages outstanding, with a face value of over $2 trillion. Of those 11 million 

loans, we estimate that about 9 million are for owner-occupied 

houses. 

CBO estimates that about 2.8 million borrowers with those loans 

will have foreclosure proceedings initiated against them at some 

point over the next four years. That estimate is tied to the historic 

performance of alt-A and sub-prime mortgage loans but adjusted 

for current macroeconomic conditions. Roughly 10–15 percent of 

those loans would enter foreclosure proceedings under more favorable conditions. However, given CBO’s projections of house prices, 

interest rates, employment, and other factors, this rate was increased to about 30 percent. 

While many of those 2.8 million loans that are estimated to enter 

the foreclosure process could be eligible for an FHA guarantee of 

a refinanced loan under this legislation, most would not be refinanced under the proposed program for several reasons. 

Second Lien Holders. According to most mortgage industry participants that CBO consulted, the biggest impediment to the use of 

the proposed program is that participation is conditioned on the release of all existing liens on the loan. Second liens are very common for subprime and alt-A financing; based on information from 

loan servicers, CBO estimates that 40 percent of such loans carry 

second liens. Because first and second lien holders may have conflicting financial incentives, the opportunities for joint consent can 

be limited. That is, second lien holders may prefer to retain their 

existing loans with the expectation that borrowers’ repayments will 

be greater in the future. In those instances, modifying the first 

mortgage outside of the proposed program may be more consistent 

with the second lien holder’s interests. The intersection of willing 


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first lien holders and willing second lien holders is more likely to 

occur when foreclosure is perceived by all parties to be truly imminent. Currently, about 40 percent of borrowers entering the foreclosure process actually lose their homes through a foreclosure sale. 

This legislation would give the Oversight Board the authority to 

implement certain program features aimed at enticing second lien 

holders to voluntarily release their liens. One option would require 

the first lien holder to provide some amount of compensation to the 

second lien holder, based on a formula developed by the Oversight 

Board. What approach the Oversight Board would choose and ultimately how successful any approach would be is uncertain. Based 

on information from industry representatives, CBO estimates that 

about 25 percent of the loans with second liens could be refinanced 

under this new program. As home prices recover, however, second 

lien holders’ incentive to retain their current position with the 

loans will increase. Accordingly, CBO estimates that in later years, 

about 20 percent of loans with second liens could be refinanced 

under the new program. Reducing the pool of potential participants 

because second liens would remain an impediment to program participation results in about 1.9 million loans that might be affected 

by the new program. 

Adjustment for Other Factors. Many borrowers who would otherwise be eligible for this program would not participate because 

servicers will not be able to contact some borrowers and some borrowers will not be able to avoid foreclosure because they have experienced a significant event, such as job loss, illness, divorce, or 

death. Reducing the pool of potential participants for those factors 

leaves about 1.4 million borrowers that could seek the new loan 

guarantees. 

Participation by Mortgage Holders and Borrowers. CBO adjusted 

this eligible population of about 1.4 million borrowers to reflect expected levels of participation by mortgage holders and borrowers. 

Typically, much less than 100 percent of those eligible actually participate in federal benefit programs. Moreover, many factors would 

influence participation in the new program, though ultimately, the 

intersection of interests of both the mortgage holders and borrowers would determine the amount of participation. 

Mortgage holders will evaluate loans that are eligible for the new 

FHA program and determine if the program would provide a better 

return than modifying the loans on their own, despite the risk of 

default. They will also evaluate whether the present value of the 

proceeds stemming from a modified loan under the new program 

is greater than or less than the value of proceeds from a foreclosure 

sale. Expectations regarding trends in house prices will greatly affect such calculations. Because mortgage holders may use different 

models to project future house prices, CBO expects that the behavioral responses by mortgage holders to the new program will vary 

considerably. 

Borrowers also would have to decide whether participating in the 

program is a favorable option. In particular, borrowers would have 

to evaluate the profit-sharing provisions under the program and determine if forgoing some future profits on their homes is an acceptable arrangement even if foreclosure on their existing loans is the 

only alternative. Furthermore, some of the riskier borrowers with 

higher ratios of debt-to-income would be required to make six timeVerDate Aug 31 2005 07:33 May 06, 2008 Jkt 069006 PO 00000 Frm 00043 Fmt 6659 Sfmt 6602 E:\HR\OC\HR619.XXX HR619

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ly payments on the loan before being guaranteed by FHA; invariably, some of those borrowers would be disqualified from participating in the new program. 

CBO estimates that fewer than 40 percent of the 1.4 million eligible loans would be refinanced under the new program. Following 

a reduction in the principal amount of those loans to make them 

affordable, CBO estimates that approximately 500,000 loans would 

be guaranteed under this legislation with an average loan amount 

of $170,000 each. Thus, CBO estimates that FHA would require 

about $85 billion in loan commitment authority over the next four 

years to implement the program. The legislation would authorize 

FHA to provide up to $300 billion in loan guarantees under the 

new program. 

Subsidy cost of the new FHA Loan Guarantee Program 

Budgeting procedures for federal credit programs require that 

funds must be appropriated in advance to cover the estimated subsidy cost of loan guarantees on a present-value basis. CBO estimates that the new program would have a subsidy rate of about 

2 percent of the loan value. This estimated subsidy rate assumes 

that the cumulative claims rate (default) for the program would be 

about 35 percent and that recoveries on defaulted mortgages would 

be about 60 percent of the outstanding loan amount. Those rates 

reflect CBO’s view that mortgage holders would have an incentive 

to direct their highest-risk loans to the program, and are based on 

the expectation that the underwriting standards established for the 

new program would be less restrictive than those currently in place 

for FHA’s single-family loan-guarantee program, thereby allowing 

FHA to insure loans with a greater risk of default. More-restrictive 

underwriting standards would lower the subsidy cost of the program but at the expense of lowering the number of borrowers able 

to participate. 

Using an estimated subsidy rate of 2 percent and our estimate 

that demand for loan guarantees would equal $85 billion over the 

next four years, CBO estimates that implementing the new loanguarantee program would cost $1.7 billion over the 2008–2013 period, subject to appropriation of the necessary amounts. 

The Government National Mortgage Association (GNMA) is responsible for guaranteeing securities backed by pools of mortgages 

insured by the federal government. In exchange for a fee charged 

to lenders or issuers of the securities, GNMA guarantees the timely 

payments of scheduled principal and interest due on the pooled 

mortgages that back those securities. Enacting this legislation 

would require GNMA to guarantee securities backed by pools of the 

homeownership retention loans in an amount not to exceed $300 

billion. CBO estimates that most of new federal loan guarantees 

made under this legislation would be included in GNMA’s Mortgage-Backed Securities (MBS) program. CBO estimates that the 

subsidy rate for those securities would be close to zero. Thus, we 

estimate that implementing the MBS program under this legislation would result in a cost or savings of less than $500,000 a year 

over the 2008–2013 period, assuming enactment of appropriation 

laws necessary to implement the program. 


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Administrative support for the Homeownership Retention Program 

and funding for counseling activities 

H.R. 5830 would specifically authorize the appropriation of $720 

million over the 2008–2009 period to pay FHA’s administrative expenses associated with implementing the new loan-guarantee program and to support counseling and legal aid for certain borrowers. 

CBO estimates that outlays would total $720 million over the 

2008–2013 period. 

Public Service Campaign, grants for Housing Counseling, and administrative support for the Office of Counseling 

This legislation would establish the Office of Housing Counseling 

within HUD to support various activities relating to homeownership and rental housing counseling. Section 203 would authorize 

the appropriation of $3 million over the 2008–2010 period to support a national campaign to publicize the existence of counseling 

services for home buyers, homeowners, and renters. In addition, 

section 204 would authorize the appropriation of $45 million annually over the 2008–2011 period to provide grants to states, local 

governments, and nonprofit organizations to support counseling 

services. Based on information from HUD, CBO expects that funds 

for additional personnel, contractors, and information technology 

would be required to run the Office of Housing Counseling. CBO 

estimates that such support would cost $81 million over the 2008–

2013 period. In total, CBO estimates that implementing those provisions would cost $264 million over the 2008–2013 period, assuming appropriation of the necessary amounts. 

Funding for the Department of Justice 

This legislation would specifically authorize the appropriation of 

$32 million over the 2008–2012 period for DOJ to support efforts 

to combat mortgage fraud. Most of this funding would be used to 

hire additional agents of the Federal Bureau of Investigation and 

additional prosecutors within the Offices of the United States Attorneys. Assuming that appropriations would be almost spread 

evenly over fiscal years 2008 through 2012, CBO estimates that enacting those provisions would cost $32 million over the 2008–2013 

period. 

Temporary Increase in Loan Guarantee Amount for Veterans Housing Loans 

Section 104 would increase by up to 75 percent the maximum 

guarantee that VA could provide to lenders who make housing 

loans to qualified veterans. CBO estimates that the authority, 

which expires on December 31, 2008, would result in a small increase in the number of loans guaranteed by VA. Receipts from 

fees that the department charges for most of the loans it guarantees exceed its outlays for guarantee payments on defaulting loans. 

Therefore, the estimated subsidy cost is negative (¥0.37 percent) 

and the additional loans that would be guaranteed under this authority would increase net receipts—by about $1 million in 2008 

and less than $500,000 in 2009—CBO estimates. 


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Revenues 

Section 102 of the bill would establish civil penalties (which are 

recorded in the budget as revenues) for certain violations related 

to real estate appraisals by interested parties in connection to the 

new loan guarantee program. CBO estimates that any increase in 

revenues resulting from those civil penalties would not be significant. 

Sections 103 and 105 of the bill would require the Federal Reserve to conduct a study on the need for an auction or bulk refinancing mechanism to facilitate the refinancing of existing residential mortgages that are at risk of foreclosure and a study on the 

accounting standards applicable to depository institutions with respect to their residential mortgages that are at risk of foreclosure. 

Based on information from the Federal Reserve, CBO expects those 

studies would have no significant effect on the agency’s workload 

or budget. 

Intergovernmental and private-sector impact: H.R. 5830 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA. The bill would benefit state, local, and tribal governments 

by authorizing grants to support housing programs. 

Estimate prepared by: Federal costs: Chad Chirico, Susanne S. 

Mehlman, Mark Hadley, Damien Moore, and David Newman; Impact on state, local, and tribal governments: Elizabeth Cove; Impact on the private sector: Jacob Kuipers. 

Estimate approved by: Peter H. Fontaine, Assistant Director for 

Budget Analysis. 

FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds that the Constitutional 

Authority of Congress to enact this legislation is provided by Article 1, section 8, clause 1 (relating to the general welfare of the 

United States) and clause 3 (relating to the power to regulate interstate commerce). 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 


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EARMARK IDENTIFICATION

H.R. 5830 does not contain any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9 of rule 

XXI. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title and table of contents 

This section establishes the short title of the bill, the ‘‘FHA 

Housing Stabilization and Homeownership Retention Act of 2008’’

(Act) and sets forth the table of contents. 

TITLE I—HOMEOWNERSHIP RETENTION

Section 101. Purposes 

This section provides the purposes of this title. 

Section 102. Insurance of Homeownership Retention Mortgages 

(a) Mortgage Insurance Program. This subsection amends Title II 

of the National Housing Act (NHA) by adding a new section 257. 

A specific description of section 257 is set forth below. 

NHA Section 257(a). Oversight Board 

This subsection establishes the Refinance Program Oversight 

Board (Oversight Board), which will consist of the Secretary of the 

Treasury, the Secretary of HUD (Secretary), and the Chairman of 

the Board of Governors of the Federal Reserve System, and be responsible for establishing program and oversight requirements for 

the program. The Oversight Board may utilize the personnel, services, and facilities of Federal agencies with their consent and with 

or without reimbursing such agencies. 

NHA Section 257(b). Authority 

The Secretary will, subject to certain specified limitations, make 

commitments to insure and insure mortgages for the purpose of 

paying or prepaying outstanding obligations under existing mortgage(s) if the mortgage being insured meets the requirements set 

forth in this section, as established by the Oversight Board, and 

the requirements of section 203, except as modified by this section. 

The Oversight Board will establish program requirements and 

standards and the Secretary will implement such requirements and 

standards, which may be established or implemented through interim guidance and mortgage letters. 

NHA Section 257(c). Requirements 

To be eligible for insurance under this section, a mortgage must 

meet all of the following requirements: 

(1) Owner-Occupied Principal Residence Requirement. The residence securing the mortgage under this section will be occupied by 

the borrower as the principal residence, and the borrower will provide a certification to the originator of the mortgage that such residence is the only residence in which the borrower has any present 

ownership interest. 

(2) Lack of Capacity to Pay Existing Mortgage or Mortgages. Borrowers must certify that they did not intentionally default on existVerDate Aug 31 2005 07:33 May 06, 2008 Jkt 069006 PO 00000 Frm 00047 Fmt 6659 Sfmt 6602 E:\HR\OC\HR619.XXX HR619

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ing mortgage(s) and did not knowingly or willfully and with actual 

knowledge furnished false information for obtaining the exiting 

mortgage(s). Borrowers must agree in writing to repay the FHA 

any direct financial benefit achieved from reduction of indebtedness 

on the existing mortgage(s) on the residence refinanced under the 

program derived from misrepresentations made in the required certification and documentation, subject to the discretion of the Oversight Board. Borrowers must have had a mortgage debt to income 

ratio greater than 35 percent as of March 1, 2008. This section may 

not be construed as affecting the responsibilities of any party to engage in any loan modification or other loss mitigation strategies to 

maximize value to investors as established by applicable contract. 

For example, the duty of a servicer to conduct a loan level review 

and make a determination that a borrower was eligible to be considered for refinancing before accepting a short sale remains unaffected by this Act. 

(3) Eligibility of Mortgages by Date of Origination. The existing 

senior mortgage must have been originated on or before December 

31, 2007. 

(4) Maximum Loan-to-Value Ratio for New Loans. The mortgage 

being insured must have a principal obligation (including initial 

service charges, appraisal, inspection, and other fees approved by 

the Secretary and the premium set forth in subsection (e)(1)) not 

exceeding 90 percent of the current appraised value of the property. 

(5) Required Waiver of Prepayment Penalties and Fees. All prepayment penalties and all fees and penalties related to default or 

delinquency on all existing mortgage(s) will be waived or forgiven. 

(6) Required Loan Reduction. 

(A) Reduction of Indebtedness under Existing Senior Mortgage. 

The amount of indebtedness on the existing mortgage(s) will have 

been substantially reduced by such percentage as the Oversight 

Board or Secretary may require. Such reduction will be at least 

sufficient to (i) provide for refinancing of existing mortgage(s) in an 

amount not greater than 90 percent of the current appraised value 

of the property, (ii) pay the full amount of the single premium to 

be collected pursuant to subsection (e)(1) (which will be equal to 3 

percent of the amount of the original insured principal obligation 

of the mortgage insured under this section), and (iii) pay the full 

amount of the loan origination fee and any other closing costs, not 

to exceed 2 percent of the amount of the original insured principal 

obligation of the mortgage insured under this section. 

(B) Extinguishment of Debt by Refinancing. 

(i) Required Agreement. All existing holders of mortgage liens on 

the property involved will agree to accept the proceeds of the insured loan as payment in full of all indebtedness under all existing 

mortgage(s) and all encumbrances related to such mortgage(s) will 

be removed. The Oversight Board may take actions necessary or 

appropriate to facilitate coordination and agreement between the 

holders of existing senior mortgage and any existing subordinate 

mortgages. 

(ii) Treatment of Multiple Mortgage Liens. In addition, the Oversight Board will adopt one of the following approaches for all mortgages or classes of mortgages as the Oversight Board may determine and may, from time to time, reconsider: (I) As a requirement 


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for participating in the program, all existing lien holders will agree 

to not provide any payment to subordinate lien holders other than 

such payment according to a formula established by the Oversight 

Board, except the Oversight Board may establish a short period 

within which first and subordinate lien holders may negotiate to 

extinguish all subordinate liens for an amount different from that 

established by such formula; (II) The Oversight Board may require 

the borrower to agree to share a portion of any future equity in the 

mortgaged property with holders of existing subordinate mortgages 

in accordance with a formula for such shared equity established by 

the Oversight Board, except payments of such shared equity may 

be made only after the Secretary recovers all amounts owed to the 

Secretary with respect to such mortgage under the program. 

(iii) Formula. In determining and in any reconsideration of a formula for any payments to subordinate lien holders pursuant to 

clause (ii) above, the Oversight Board will take into consideration 

the current market value of such liens. In no case may a formula 

provide for the payment of more than 1 percent of the current appraised value of the mortgaged property to a subordinate lien holder if the outstanding balance owed to more senior lien holders is 

equal to or exceeds such current appraised value. 

(iv) Voluntary Program. This clause clarifies that participation in 

the program is voluntary. 

(v) Source of Payments for Subordinate Loans. Any amounts paid 

to holders of any existing subordinate mortgages in connection with 

the origination and insurance of a mortgage under this section will 

derive only from the holder of the existing senior mortgage or, in 

case only of the shared equity approach under clause (ii)(II) above, 

the borrower. 

(7) Required Reduction of Debt Service. The debt service payments under the new mortgage will be in an amount substantially 

reduced from those under the existing mortgage(s). 

(8) Financial Recovery to Federal Government Through Exit Premium. 

(A) Subordinate Lien. The mortgage will provide that the Secretary will retain a second lien on the property to secure the repayment of the amount due under subparagraph (D) below. 

(B) No Interest or Payment during Mortgage. Such second lien 

will not bear interest and will not be repayable to the Secretary except as provided in subparagraph (D) below. 

(C) Net Proceeds Available for Exit Premium. Upon the sale, refinancing, or other disposition of the residence covered by a mortgage insured under this section, any proceeds that remain after deducting the remaining insured principal balance of the mortgage 

will be available to meet the obligation under subparagraph (D) 

below. 

(D) Exit Premium. Upon any refinancing of the mortgage insured under this section or any sale or disposition of the residence 

covered by the mortgage, the Secretary will, subject to availability 

of sufficient net proceeds, receive the greater of (i) 3 percent of the 

amount of the original insured principal obligation of the mortgage, 

or (ii) a declining percentage of the net proceeds described in subparagraph (C) above, from 100 percent in year one to 50 percent 

in year four and thereafter, except that such percentage of proceeds 


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will be reduced by all fees the Secretary has collected prior to such 

refinancing, sale or disposition. 

(E) Authority to Prohibit New Second Liens. The Oversight 

Board will prohibit borrowers from granting a new second lien on 

the mortgaged property during the first five years of the term of 

the new mortgage except as the Oversight Board determines necessary to ensure the appropriate maintenance of the mortgaged 

property. 

(9) Documentation and Verification of Income. In complying with 

the FHA underwriting requirements under the program, the FHA 

lender will document and verify the income of the borrower by procuring the two most recent IRS tax returns of the borrower in accordance with procedures and standards established by the Oversight Board or the Secretary. 

(10) Fixed Rate Mortgage. The mortgage insured under this section will bear interest at a single fixed rate for the entire term of 

the mortgage. 

(11) Maximum Loan Amount. The mortgage being insured under 

this section will involve a principal obligation in an amount that 

does not exceed the limitation that would be allowable under the 

terms of the Economic Stimulus Act of 2008. Such limitation will 

apply for the purposes of this Act until the termination of the program under subsection (n). 

(12) Ineligibility for Fraud Conviction. The borrower cannot have 

been convicted under Federal or State law for mortgage fraud during the 7 years prior to obtaining the new FHA loan. 

(13) Lender Review. The lender will conduct an electronic database search of the borrower’s criminal history to determine if the 

borrower has had a conviction for fraud under paragraph (12), and 

may charge the borrower a reasonable fee not to exceed a maximum established by the Oversight Board. The Oversight Board 

will establish a procedure for the borrower to challenge the lender’s 

determination. 

(14) Appraisals. Any appraisal conducted in connection with a 

mortgage insured under the program will be based on the current 

value of the property, conducted in accordance with specified title 

of the Financial Institutions Reform, Recovery, and Enforcement 

Act, completed by an appraiser who meets the competency requirements of the Uniform Standards of Professional Appraisal Practice, 

wholly consistent with FHA appraisal standards, practices, and 

procedures, and will comply with the appraisal independence requirements of subsection (g). 

(15) Statement of Loan Terms. The borrower will have been provided a one-page disclosure form regarding the new FHA loan by 

the lender no later than three days after application for the mortgage. When completed by the lender, the form will set forth, in accordance with requirements that the Secretary will establish, a 

best possible estimate of the enumerated loan terms as specified in 

this paragraph. 

NHA Section 257(d). Flexible underwriting criteria 

The Oversight Board will establish, and the Secretary acting on 

behalf of the Oversight Board will implement, underwriting standards for mortgages insured under this section that ensure that 

borrowers have a reasonable expectation of repaying the mortgage, 


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taking into consideration the borrower’s income, assets, liabilities, 

payment history, and other applicable criteria but not resulting in 

a denial solely on the basis of the borrower’s current FICO or other 

credit scores, any delinquency or default under the existing mortgage(s), or any case filed under title 11 of the U.S. Code by the borrower. Subject to such underwriting criteria, the Oversight Board 

will permit a total debt-to-income ratio of up to 43 percent. As an 

exception, subject to such underwriting criteria and any additional 

requirements the Oversight Board consider appropriate, the Oversight Board will permit a total debt-to-income ratio of more than 

43 percent but not more than 50 percent if the borrower has made 

not less than six months of payments in an amount not less than 

the amount of the monthly payment due under the mortgage to be 

insured under this section. The holder of the existing senior mortgage will exercise forbearance with respect to such mortgage during the period in which such payments are made. In computing the 

borrower’s total debt-to-income ratio for purposes of mortgage qualification under the underwriting standards established pursuant to 

this section, if the borrower is a debtor under chapter 13 of title 

11, U.S. Code, payments on recurring debts other than housing expenses will be based on the amounts being paid on such debts 

under the borrower’s confirmed plan under such chapter, and if the 

borrower is a debtor under chapter 7 of such title, recurring debts 

that are to be discharged will not be considered. The Oversight 

Board may alter the ratios for a particular class of borrowers subject to such requirements as the Oversight Board determines is 

necessary and appropriate to fulfill the purposes of this Act. The 

Oversight Board will require the underwriter of the insured loan 

to provide such representations and warranties as the Oversight 

Board considers necessary or appropriate for the Secretary to enforce compliance with all underwriting and appraisal standards of 

the program. 

NHA Section 257(e). Premiums 

The Oversight Board will establish and the Secretary will collect 

the following premiums: (1) a single premium payment at the time 

of insurance equal to 3 percent of the amount of the original insured principal obligation of the mortgage, which will be paid from 

the proceeds of the mortgage being insured under this section 

through the reduction of the amount of indebtedness on the existing senior mortgage required under subsection (c)(6)(A), (2) annual 

premium payments equal to 1.5 percent of the remaining insured 

principal balance of the mortgage, and (3) an exit premium determined under subsection (c)(8), but no less than 3 percent of the 

original insured principal obligation of the mortgage subject only to 

the availability of sufficient net proceeds. 

NHA Section 257(f). Origination fees and mortgage rate 

The Oversight Board will establish and the Secretary will implement a reasonable limitation on origination fees for mortgages insured under this section and will establish procedures to ensure interest rates commensurate with market rates. 


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NHA Section 257(g). Appraisal independence 

No mortgage lender, mortgage broker, mortgage banker, real estate broker, appraisal management company, employee of an appraisal management company, or any other person with an interest 

in a real estate transaction involving an appraisal in connection 

with a mortgage insured under the program will improperly influence or attempt to improperly influence a real estate appraisal 

sought in connection with the mortgage. This will not be construed 

to prohibit such person from asking an appraiser to consider additional, appropriate property information, provide further detail for 

the appraiser’s value conclusion, or correct errors in the appraisal 

report. The Secretary may impose a civil money penalty for any 

knowing and material violation. 

NHA Section 257(h). Limitation on aggregate insurance authority 

The aggregate original principal obligation of all mortgages in- sured under this section may not exceed $300 billion. 

NHA Section 257(i). Enhancement of FHA capacity 

Under the direction of the Oversight Board, the Secretary will 

take actions as may be necessary to (1) contract for establishment 

of underwriting criteria and other factors relating to eligibility for 

mortgages insured under this section, (2) contract for independent 

quality reviews of underwriting, including appraisal reviews and 

fraud detection, of mortgages insured under this section or pools of 

such mortgages, and (3) increase personnel of HUD as necessary to 

process or monitor the processing of mortgages insured under this 

section. 

NHA Section 257(j). Monitoring of underwriting risk 

(1) Monitoring of Designated Underwriters. The Oversight Board 

and the Secretary will monitor independent quality reviews as established under subsection (i)(2) to: 

(A) determine compliance of designated underwriters with underwriting standards; 

(B) determine rates of delinquency, claims rates, and loss rates 

of designated underwriters; and 

(C) terminate eligibility of designated underwriters that do not 

meet minimum performance standards as the Oversight Board may 

establish and the Secretary implements. 

(2) Reports by Oversight Board. The Oversight Board will submit 

monthly reports to the Congress identifying the progress of the program, which will contain the following: 

(A) The number of new mortgages insured under this section, including the location of the properties subject to such mortgages by 

census tract. 

(B) The aggregate principal obligation of new mortgages insured 

under this section. 

(C) The average amount by which the indebtedness on existing 

mortgages is reduced in accordance with subsection (c)(6). 

(D) The average amount by which the debt service payments on 

existing mortgages is reduced in accordance with subsection (c)(7). 

(E) The amount of premiums collected for insurance of mortgages under this section. 


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(F) The claim and loss rates for mortgages insured under this 

section. 

(G) The race, ethnicity, gender, and income of the mortgagors, 

aggregated by geographical areas at least as specific as census 

tracts, except where necessary to protect privacy of the borrower. 

(H) Any other information that the Oversight Board considers 

appropriate. 

(3) Report by Inspector General. The Inspector General of HUD 

will conduct an annual audit of the program to determine compliance with this section and program rules. 

NHA Section 257(k). GNMA commitment authority 

The Secretary will take actions as may be necessary to ensure 

that securities based on and backed by a trust or pool composed of 

mortgages insured under this section are available to be guaranteed by the Government National Mortgage Association (GNMA) as 

to the timely payment of principal and interest. The GNMA may 

enter into new commitments to issue guarantees of securities based 

on or backed by mortgages insured under this section, not exceeding $300 billion. This amount is in addition to any amount of authority to make new commitments to issue guarantees provided 

under any other provision of law. 

NHA Section 257(l). Special risk insurance fund 

The insurance of each mortgage under this section will be the obligation of the Special Risk Insurance Fund. 

NHA Section 257(m). Definitions 

This subsection establishes the definition of ‘‘existing mortgage,’’

‘‘existing senior mortgage,’’ and ‘‘existing subordinate mortgage.’’

NHA Section 257(n). Sunset 

The authority of the Secretary to make any new commitment to 

insure any mortgage under this section will terminate 2 years after 

the date of the enactment of this Act. The Oversight Board may extend such authority not more than four times, except that each extension will be no more than six months and be effective only if the 

Oversight Board certifies the need for such extension in writing to 

the Congress and causes notice of such extension to be published 

in the Federal Register at least three months before the termination of the program. 

NHA Section 257(o). Authorization of appropriations 

(1) For fiscal years 2008 and 2009, this subsection provides $210 

million for loss mitigation counseling for homeowners with grants 

to be administered through the Neighborhood Reinvestment Corporation (NRC), and requires NRC to give priority consideration for 

this funding to counseling entities that have a plan in place for 

making contact with or providing in-person counseling to defaulted 

borrowers. In addition, not less than 2 percent of the funds are to 

be used for identifying and notifying borrowers who are eligible for 

the counseling program. Preference will also be given to counseling 

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seling, the Committee recognizes the importance in certain communities of providing such counseling in relevant languages. 

In addition, this subsection provides that not less than 15 percent of the $210 million made available for loss mitigation counseling will be provided to counseling organizations that target minority and low-income homeowners or provide services in neighborhoods with high concentrations of such homeowners. This subsection also provides that some amount of the $210 million made 

available for loss mitigation counseling be used for such counseling 

for veterans recently returning from active duty in the armed 

forces. 

The subsection further provides that $35 million of the $210 million of funds made available for loss mitigation counseling are to 

be used by the NRC to make grants to State and local legal organizations or attorneys with experience in home foreclosure or eviction 

law to provide legal assistance related to home ownership and foreclosure prevention; or to HUD-approved counseling intermediaries 

for the purpose of making such grants or contracting for such legal 

assistance. Of the $35 million, at least 60 percent will be allocated 

for legal assistance to low-income homeowners or tenants. The subsection provides that attorneys who receive these grants shall be 

capable of assisting homeowners in owner-occupied homes or tenants who live in homes with mortgages in default or subject to or 

at risk of foreclosure or eviction and who have legal issues that 

cannot be handled by counselors employed by NRC intermediaries. 

The NRC will give priority to State and local legal organizations 

and attorneys that provide legal assistance in the 100 metropolitan 

statistical areas with the highest foreclosure rates and that have 

the capacity to begin using the financial assistance within 90 days 

of receipt. The subsection also requires grantees to submit certain 

information to the NRC. 

(2) $150 million for FHA enhancement under subsection (i). 

NHA Section 257(p). Audit and report by Inspector General 

The Inspector General of HUD will conduct an audit of the program for loss mitigation counseling funded with amounts made 

available under subsection (o)(1) to determine compliance with 

such subsection. Not later than March 30, 2009, and every calendar 

quarter thereafter, the Inspector General will submit a report to 

the appropriate committees of Congress summarizing the activities 

of the Inspector General and the NRC and including such details 

as specified. 

(b) Special Risk Insurance Fund. This subsection amends section 

238 of the NHA to include cross-references to the new section 257 

created by this Act. 

Section 103. Study of auction or bulk refinance program 

The Board of Governors of the Federal Reserve System (Board of 

Governors), in consultation with other members of the Oversight 

Board, will conduct a study of the need for and efficacy of an auction or bulk refinancing mechanism to facilitate refinancing of existing residential mortgages that are at risk for foreclosure into 

FHA-insured mortgages. The study will analyze certain factors as 

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port regarding the results of the study to the Congress no later 

than 60 days after the date of the enactment of this Act. 

Section 104. Temporary increase in maximum loan guaranty 

amount for certain housing loans guaranteed by Secretary of 

Veterans Affairs 

Certain housing loans guaranteed by Secretary of Veterans Affairs that are originated between the date of enactment of this Act 

and December 31, 2008 will have a maximum guaranty amount 

that is equal to 25 percent of the higher of (1) the limitation determined under section 305(a)(2) of the Federal Home Loan Mortgage 

Corporation Act for the calendar year in which the loan is originated for a single-family residence or (2) 125 percent of the area 

median price for a single-family residence, but in no case to exceed 

175 percent of such limitation set forth in (1). 

Section 105. Study of possible accounting revisions relating to property at risk of foreclosure and the availability of credit for refinancing home mortgages at risk of foreclosure 

The Board of Governors will conduct a study on mark-to-market 

accounting standards applicable to depository institutions with respect to their residential mortgages that are at risk of foreclosure, 

the effects of such accounting standards and capital requirements 

on capacity to provide refinancing to at-risk borrowers during periods of market value declines and increased foreclosures, and the 

feasibility of modifications of such standards during periods of market fluctuation. The Board of Governors will submit a report with 

respect to the study to Congress no later than 90 days after the enactment of this Act. 

Section 106. GAO study of the effect of tightening credit markets in 

communities affected by the subprime mortgage foreclosure crises and predatory lending on prospective first-time homebuyers 

seeking mortgages 

The GAO will conduct a study to analyze the effects of tightening 

credit markets on prospective first-time home buyers in communities most detrimentally affected by subprime mortgage foreclosure crisis and predatory mortgage lending. The study will also 

analyze the adequacy of financial literacy outreach efforts by Federal agencies and whether funding levels are sufficient. A report of 

the study will be submitted to Congress no later than six months 

after the enactment of this Act. 

TITLE II—OFFICE OF HOUSING COUNSELING

This title amends the Department of Housing and Urban Development Act to establish within HUD an Office of Housing Counseling that will conduct activities relating to homeownership and 

rental housing counseling. 

Section 201. Short title 

This title may be cited as the ‘‘Expand and Preserve Home Ownership Through Counseling Act.’’


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Section 202. Establishment of Office of Housing Counseling 

This section establishes the Office of Housing Counseling under 

the Office of the Secretary, headed by a Director of Housing Counseling (Director) appointed by the Secretary. The Director will be 

responsible for all homeownership and rental housing counseling 

programs for HUD, and will establish, coordinate and administer 

all regulations, requirements, standards, and performance measures under the pro- grams that relate to housing counseling, homeownership counseling, mortgage-related counseling, and rental 

housing counseling. The Director will establish rules for (1) counseling procedures, (2) carrying out all other related functions, including establishing a toll-free number, (3) information booklets, (4) 

carrying out the certification of counseling service providers, (5) 

providing assistance in the provision of counseling services, (6) carrying out functions the Secretary deems appropriate with regard to 

unscrupulous lending practices in the home mortgage business, (7) 

support the advisory committee created under this section, (8) collaborate with community-based organizations, and (9) provide for 

building capacity to provide housing counseling services in areas 

that lack sufficient services. The Secretary will appoint an advisory 

committee composed of no more than 12 individuals representing 

all aspects of the mortgage and real estate industry, including consumers. Advisory committee members appointed by the Secretary 

will serve 3-year terms, except that initially, four will be appointed 

for 1-year terms and four will be appointed for 2-year terms. The 

Secretary may reappoint members at his discretion. Members will 

not be paid, but may receive travel expenses. The advisory committee has no role in reviewing or awarding housing counseling 

grants. Counseling services will cover the entire process of homeownership, including refinancing and foreclosure. 

Section 203. Counseling procedures 

This section directs the Secretary to establish, coordinate, and 

monitor all HUD counseling procedures, including requirements, 

standards, and performance measures that relate to homeownership and rental housing. ‘‘Homeownership counseling’’ is defined as 

counseling related to homeownership and residential mortgage 

loans. ‘‘Rental housing counseling’’ is defined as counseling related 

to rental of residential property, which may include counseling regarding future homeownership opportunities and providing referral 

for renters and prospective renters to entities providing counseling. 

The Secretary, in conjunction with the advisory committee, will establish standards for materials and forms used by counseling service providers. The Secretary will provide for the certification of various computer software programs for consumers to use in evaluating different residential mortgage loan proposals. The mortgage 

software system will take into account (1) the consumer’s financial 

situation and the cost of maintaining a home, including insurance, 

taxes, and utilities, (2) the amount of time the consumer expects 

to remain in the home or expected time to maturity of the loan, 

and (3) any other factors to assist the consumer in making choices 

during the loan application process. The certified software programs will be used to supplement, not replace, housing counseling, 

and the software programs initially will be used only in connection 

with the assistance of certified housing counselors. The Director 


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will develop, implement, and conduct national public service multimedia campaigns to make potentially vulnerable consumers aware 

of the existence of homeownership counseling. Appropriations not 

to exceed $3 million are authorized for national public service 

multimedia campaigns for fiscal years 2008, 2009, and 2010. The 

Secretary will provide advice and technical assistance to States, 

units of local government, and non-profit organizations regarding 

provisions of counseling services. 

Section 204. Grants for housing counseling assistance 

This section directs the Secretary to make financial assistance 

available to States, units of local government, and non-profit organizations providing homeownership or rental counseling. The Secretary will establish standards and guidelines for assistance eligibility. Appropriations of $45 million are authorized for each of fiscal years 2008 through 2011 for the operations of the Office of 

Housing Counseling; homeownership and rental counseling assistance grants; and the establishment of materials and forms standards, computer software certification, and the national public service multimedia campaigns created by this title. 

Section 205. Requirements to use HUD-certified counselors under 

HUD programs 

This section requires any homeownership counseling or rental 

housing counseling administered by HUD to be provided solely by 

organizations or counselors certified by the Secretary. The Secretary will take appropriate actions to ensure that individuals and 

organizations providing homeownership or rental housing counseling are aware of the certification requirements and standards. 

Section 206. Study of defaults and foreclosures 

This section directs the Secretary to submit to Congress not later 

than 12 months after the enactment of this Act a preliminary report on the root causes of default and foreclosure of home loans and 

the role of escrow accounts in helping prime and nonprime borrowers to avoid defaults and foreclosures. No later than 24 months 

after the enactment of this Act, the Secretary will submit a final 

report regarding the results of the study, which will include any 

recommended legislation relating to the study and recommendations for best practices and for a process to identify populations 

that need counseling the most. 

Section 207. Definitions for counseling-related programs 

This section provides definitions of ‘‘nonprofit organization,’’

‘‘State,’’ and ‘‘unit of general local government.’’

Section 208. Updating and simplification of mortgage information 

booklet 

This section directs the Secretary to prepare a booklet at least 

once every 5 years to help consumers applying for Federally related 

mortgage loans to understand the nature and costs of real estate 

settlement services. The Secretary must include specific topics in 

the information booklet in plain and understandable language, including explanation of (1) costs incident to real estate settlement 

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loon payments, prepayment penalties, and trade-off between closing costs and the interest rate over the life of the loan); (2) the uniform settlement statement; (3) unfair lending practices and unreasonable or unnecessary charges to be avoided by the prospective 

buyer with respect to a real estate settlement; (4) questions that 

the consumer should ask about a loan; (5) the right of rescission; 

(6) variable rate mortgages; (7) home equity line of credit; (8) the 

availability and the value of homeownership counseling services; 

(9) escrow accounts; (10) available choices for providers of incidental services; (11) the buyer’s responsibilities, liabilities, and obligations; (12) appraisals; and (13) HUD brochure regarding loan 

fraud. 

TITLE III—COMBATING MORTGAGE FRAUD

Section 301. Authorization of appropriations to combat mortgage 

fraud 

This section provides that for fiscal years 2008, 2009, 2010, 2011, 

and 2012, there are authorized to be appropriated to the Attorney 

General a total of (1) $31,250,000 to support the employment of 30 

additional FBI agents and 2 additional dedicated prosecutors at the 

Department of Justice to coordinate prosecution of mortgage fraud 

efforts with the offices of the United States Attorneys, and (2) 

$750,000 to support the operations of interagency task forces of the 

FBI in the areas with the 15 highest concentrations of mortgage 

fraud. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

NATIONAL HOUSING ACT 

* * * * * * * 

TITLE II—MORTGAGE INSURANCE 

* * * * * * * 

PAYMENT OF INSURANCE—SPECIAL RISK INSURANCE FUND

SEC. 238. (a)(1) Any mortgagee under a mortgage insured 

under section 235(i), 235(j)(4), 237, øor 243¿ 243, or 257 shall be 

entitled to receive the benefits of the insurance as provided in section 204(a) with respect to mortgages insured under section 203. 

The provisions of subsections (b), (c), (d), (g), (j), and (k) of section 

204 shall be applicable to mortgages insured under section 235(i), 

235(j)(4), 237, øor 243¿ 243, or 257, except that all references 

therein to the ‘‘Mutual Mortgage Insurance Fund’’ shall be construed to refer to the ‘‘Special Risk Insurance Fund’’, and all references therein to section 203 shall be construed to refer to section 

235(i), 235(j)(4), 237, øor 243¿ 243, or 257, as may be appropriate. 

* * * * * * * 


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(b) There is hereby created a Special Risk Insurance Fund 

(hereinafter referred to as the ‘‘fund’’) which shall be used by the 

Secretary as a revolving fund for carrying out the mortgage insurance obligations of sections 223(e), 233(a)(2), 235, 236, 237, øand 

243¿ 243, and 257, and the Secretary is hereby authorized to advance to the fund, at such times and in such amounts as he may 

determine to be necessary, a total sum of $20,000,000 from the 

General Insurance Fund established pursuant to the provisions of 

section 519. Such advance shall be repayable at such times and at 

such rates of interest as the Secretary deems appropriate. Premium 

charges, adjusted premium charges, inspection and other fees, service charges, and any other income received by the Secretary under 

sections 223(e), 233(a)(2), 235, 236, and 237, together with all earnings on the assets of the fund, shall be credited to the fund. All 

payments made pursuant to claims of mortgagees with respect to 

mortgages insured under sections 233(a)(2), 235, 236, 237, øand 

243¿ 243, and 257 or pursuant to section 223(e), cash adjustments, 

the principal of and interest paid on debentures which are the obligation of the fund, expenses incurred in connection with or as a 

consequence of the acquisition and disposal of property acquired 

under such sections, and all administrative expenses in connection 

with the mortgage insurance operations under such sections shall 

be paid out of the fund. Moneys in the fund not needed for current 

operations of the fund shall be deposited with the Treasurer of the 

United States to the credit of the fund or invested in bonds or obligations of, or in bonds or other obligations guaranteed by, the 

United States or any agency of the United States: Provided, That 

such moneys shall to the maximum extent feasible be invested in 

such bonds or other obligations the proceeds of which will be used 

to directly support the residential mortgage market. The Secretary, 

with the approval of the Secretary of the Treasury, may purchase 

in the open market debentures which are the obligation of the 

fund. Such purchases shall be made at a price which will provide 

an investment yield of not less than the yield obtained from other 

investments authorized by this section. Debentures so purchased 

shall be canceled and not reissued. 

* * * * * * * 

SEC. 257. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES. 

(a) OVERSIGHT BOARD.—

(1) ESTABLISHMENT.—There is hereby established the Refinance Program Oversight Board (in this section referred to as 

the ‘‘Oversight Board’’). 

(2) MEMBERSHIP.—The Oversight Board shall consist of the 

following members or their designees: 

(A) The Secretary of the Treasury. 

(B) The Secretary of Housing and Urban Development. 

(C) The Chairman of the Board of Governors of the Federal Reserve System. 

(3) NO ADDITIONAL COMPENSATION.—Members of the Oversight Board shall receive no additional pay by reason of service 

on the Oversight Board. 

(4) RESPONSIBILITIES.—The Oversight Board shall be responsible for establishing program and oversight requirements for 

the program under this section, which shall include—


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(A) detailed program requirements under subsection (c); 

(B) flexible underwriting criteria under subsection (d); 

(C) a mortgage premium structure under subsection (e); 

(D) a reasonable fee and rate limitation under subsection 

(f); 

(E) enhancement of FHA capacity under subsection (i), 

including oversight of such activities and personnel as may 

be contracted for as provided therein; 

(F) monitoring of underwriting risk under subsection (j); 

and 

(G) such additional requirements as may be necessary 

and appropriate to oversee and implement the program. 

(5) USE OF RESOURCES.—In carrying out its functions under 

this section, the Oversight Board may utilize, with their consent 

and to the extent practical, the personnel, services, and facilities 

of the Department of the Treasury, the Department of Housing 

and Urban Development, the Board of Governors of the Federal 

Reserve System, the Federal Reserve Banks, and other Federal 

agencies, with or without reimbursement therefore. 

(b) AUTHORITY.—

(1) IN GENERAL.—The Secretary shall, subject only to the absence of qualified requests for insurance under this section and 

to the limitations under subsection (h) of this section and section 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 Oversight Board, and of section 203, except as modified by this section. 

(2) ESTABLISHMENT AND IMPLEMENTATION OF PROGRAM REQUIREMENTS.—The Oversight Board shall establish program requirements and standards under this section and the Secretary 

shall implement such requirements and standards. The Oversight Board and the Secretary may establish and implement 

any requirements or standards through interim guidance and 

mortgagee letters. 

(c) REQUIREMENTS.—To be eligible for insurance under this section, a mortgage shall comply with all of the following requirements: 

(1) OWNER-OCCUPIED PRINCIPAL RESIDENCE REQUIREMENT.—

The residence to be covered by the mortgage insured under this 

section shall be occupied by the mortgagor as the principal residence of the mortgagor and the mortgagor shall provide a certification to the originator of the mortgage that such residence 

to be covered by the mortgage insured under this section is the 

only residence in which the mortgagor has any present ownership interest. 

(2) LACK OF CAPACITY TO PAY EXISTING MORTGAGE OR MORT- GAGES.—

(A) BORROWER CERTIFICATION.— (i) The mortgagor shall provide a certification to the 

originator of the mortgage that the mortgagor— (I) has not intentionally defaulted on the existing 

mortgage or mortgages; and 


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(II) has not knowingly, or willfully and with actual knowledge furnished material information 

known to be false for the purpose of obtaining the 

existing mortgage or mortgages. 

(ii) The mortgagor shall agree in writing that the 

mortgagor shall be liable to repay the FHA any direct 

financial benefit achieved from the reduction of indebtedness on the existing mortgage or mortgages on the 

residence refinanced under this section derived from 

misrepresentations made in the certifications and documentation required under this subparagraph, subject 

to the discretion of the Oversight Board. 

(B) CURRENT BORROWER DEBT-TO-INCOME RATIO.—As of 

March 1, 2008, the mortgagor shall have had a ratio of 

mortgage debt to income, taking into consideration all existing mortgages at such time, greater than 35 percent. 

(C) LOSS MITIGATION RESPONSIBILITIES.—This section 

may not be construed to alter or in any way affect the responsibilities of any party (including the mortgage servicer) 

to engage in any or all loan modification or other loss mitigation strategies to maximize value to investors as established by any applicable contract. 

(3) ELIGIBILITY OF MORTGAGES BY DATE OF ORIGINATION.— The existing senior mortgage shall have been originated on or 

before December 31, 2007. 

(4) MAXIMUM LOAN-TO-VALUE RATIO FOR NEW LOANS.—The 

mortgage being insured under this section shall involve a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the Secretary shall approve and including the mortgage insurance premium paid pursuant to subsection (e)(1)) in an amount not to exceed 90 percent 

of the current appraised value of the property. Section 203(d) 

shall not apply to mortgages insured under this section. 

(5) REQUIRED WAIVER OF PREPAYMENT PENALTIES AND

FEES.—All penalties for prepayment of the existing mortgage or 

mortgages, and all fees and penalties related to default or delinquency on all existing mortgages or mortgages, shall be 

waived or forgiven. 

(6) REQUIRED LOAN REDUCTION.— (A) REDUCTION OF INDEBTEDNESS UNDER EXISTING SENIOR MORTGAGE.—The amount of indebtedness on the existing mortgage or mortgages on the residence shall have been 

substantially reduced by such percentage as the Oversight 

Board or Secretary may require, and such reduction shall 

be at least sufficient to—

(i) provide for the refinancing of such existing mortgage or mortgages in an amount not greater than 90 

percent of the current appraised value of the property 

involved; 

(ii) pay the full amount of the single premium to be 

collected pursuant to subsection (e)(1) (which shall be 

an amount equal to 3.0 percent of the amount of the 

original insured principal obligation of the mortgage 

insured under this section and which shall serve as an 

additional reserve to cover possible loan losses); and 


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(iii) pay the full amount of the loan origination fee 

and any other closing costs, not to exceed 2.0 percent 

of the amount of the original insured principal obligation of the mortgage insured under this section. 

(B) EXTINGUISHMENT OF DEBT BY REFINANCING.— (i) REQUIRED AGREEMENT.—All existing holders of 

mortgage liens on the property involved shall agree to 

accept the proceeds of the insured loan as payment in 

full of all indebtedness under all existing mortgages, 

and all encumbrances related to such mortgages shall 

be removed. The Oversight Board may take such actions as the Oversight Board considers necessary or appropriate to facilitate coordination and agreement between the holders of the existing senior mortgage and 

any existing subordinate mortgages, taking into consideration the subordinate lien status of such subordinate 

mortgages, to comply with the requirement under this 

subparagraph. 

(ii) TREATMENT OF MULTIPLE MORTGAGE LIENS.—In 

addition to clause (i), the Oversight Board shall adopt 

one of the following approaches for all mortgages or 

such classes of mortgages as the Oversight Board may 

determine and may, from time to time, reconsider: 

(I) FIXED PRICE.—As a requirement for participating in this program, all existing lien holders 

will agree to not provide any payment to subordinate lien holders other than such payment in accordance with a formula established by the Oversight Board as set forth in clause (iii); except that 

the Oversight Board may establish a short period 

within which first and subordinate lien holders 

may negotiate to extinguish all subordinate liens 

for compensation that may be different from the 

amount determined under such formula set forth 

in clause (iii). 

(II) SHARED EQUITY.—The Oversight Board may 

require the mortgagor under a mortgage insured 

under this section to agree to share a portion of 

any future equity in the mortgaged property with 

holders of existing subordinate mortgages, in accordance with a formula for such shared equity established by the Oversight Board as set forth in 

clause (iii), except that payments of such shared 

equity may be made only after the Secretary recovers all amounts owed to the Secretary with respect 

to such mortgage pursuant to the program under 

this section (including amounts owed pursuant to 

paragraph (8)). 

(iii) FORMULA.—In determining a formula for determining any payments to subordinate lien holders pursuant to subclauses (I) and (II) of clause (ii), and in 

any reconsideration of such formula as the Oversight 

Board may from time to time undertake, the Oversight 

Board shall take into consideration the current market 

value of such liens. In no case may a formula provide 


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for the payment of more than 1 percent of the current 

appraised value of the mortgaged property to a subordinate lien holder if the outstanding balance owed to 

more senior lien holders is equal to or exceeds such 

current appraised value. 

(iv) VOLUNTARY PROGRAM.—This subparagraph may 

not be construed to require any holder of any existing 

mortgage to participate in the program under this section generally, or with respect to any particular loan. 

(v) SOURCE OF PAYMENTS FOR SUBORDINATE

LOANS.—Any amounts paid to holders of any existing 

subordinate mortgages in connection with the origination and insurance of a mortgage under this section 

shall derive only from— (I) the holder of the existing senior mortgage; or 

(II) in the case only of the shared equity approach under clause (ii)(II), the mortgagor under 

the mortgage insured under this section 

(7) REQUIRED REDUCTION OF DEBT SERVICE.—The debt service 

payments due under the mortgage insured under this section 

shall be in an amount that is substantially reduced from the 

debt service payments due under the existing mortgage or mortgages, which reduction may be achieved through a reduction of 

indebtedness, a reduction in the interest rate being paid, or an 

extension of the term of the mortgage, or any combination thereof. 

(8) FINANCIAL RECOVERY TO FEDERAL GOVERNMENT THROUGH

EXIT PREMIUM.— (A) SUBORDINATE LIEN.—The mortgage shall provide that 

the Secretary shall retain a lien on the residence involved, 

which shall be subordinate to the mortgage insured under 

this section but senior to all other mortgages on the residence that may exist at any time, and which shall secure 

the repayment of the amount due under subparagraph (D). 

(B) NO INTEREST OR PAYMENT DURING MORTGAGE.—The 

amount secured by the lien retained by the Secretary pursuant to subparagraph (A) shall not bear interest and shall 

not be repayable to the Secretary except as provided in subparagraph (D) of this paragraph. 

(C) NET PROCEEDS AVAILABLE FOR EXIT PREMIUM.—Upon 

the sale, refinancing, or other disposition of the residence 

covered by a mortgage insured under this section, any proceeds resulting from such disposition that remain after deducting the remaining insured principal balance of the 

mortgage insured under this section shall be available to 

meet the obligation under subparagraph (D). 

(D) EXIT PREMIUM.—Upon any refinancing of the mortgage insured under this section or any sale or disposition 

of the residence covered by the mortgage, the Secretary 

shall, subject to the availability of sufficient net proceeds 

described in subparagraph (C), receive the greater of— (i) 3 percent of the amount of the original insured 

principal obligation of the mortgage; or 

(ii) a percentage of the portion of the net proceeds described in subparagraph (C), which shall be—


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(I) in the case of any refinancing, sale, or disposition occurring during the first year of the term 

of the mortgage, 100 percent of such net proceeds; 

(II) in the case of any refinancing, sale, or disposition occurring during the second year of the 

term of the mortgage, 80 percent; 

(III) in the case of any refinancing, sale, or disposition occurring during the third year of the 

term of the mortgage, 60 percent; and 

(IV) in the case of any refinancing, sale, or disposition occurring during the fourth year of the 

term of the mortgage or at any time thereafter, 50 

percent; 

except that such percentage of proceeds shall be reduced by 

all fees the Secretary has collected for the mortgage prior 

to such refinancing, sale, or disposition. 

(E) AUTHORITY TO PROHIBIT NEW SECOND LIENS.—The 

Oversight Board shall prohibit borrowers from granting a 

new second lien on the mortgaged property during the first 

five years of the term of the mortgage insured under this 

section, except as the Oversight Board determines to be necessary to ensure the appropriate maintenance of the mortgaged property. 

(9) DOCUMENTATION AND VERIFICATION OF INCOME.—In complying with the FHA underwriting requirements under the program under this section, the mortgagee under the mortgage 

shall document and verify the income of the mortgagor by procuring an Internal Revenue Service transcript of the income tax 

returns of the mortgagor for the two most recent years for which 

the filing deadline for such years has passed and by any other 

method, in accordance with procedures and standards that the 

Oversight Board or the Secretary shall establish. 

(10) FIXED RATE MORTGAGE.—The mortgage insured under 

this section shall bear interest at a single rate that is fixed for 

the entire term of the mortgage. 

(11) MAXIMUM LOAN AMOUNT.—Notwithstanding section 

203(b)(2), the mortgage being insured under this section shall 

involve a principal obligation in an amount that does not exceed the limitation (for a property of the applicable size) on the 

amount of the principal obligation that would be allowable 

under the terms of section 202(a) of the Economic Stimulus Act 

of 2008 if the mortgage were insured pursuant to such section. 

The limitation on the amount of the principal obligation allowable under such Act shall apply for the purposes of this Act 

until the termination under subsection (n) of the program under 

this subsection. 

(12) INELIGIBILITY FOR FRAUD CONVICTION.—The mortgagor 

shall not have been convicted under Federal or State law for 

mortgage fraud during the 7-year period ending upon the insurance of the mortgage under this section. 

(13) LENDER REVIEW.—The mortgagee under the mortgage 

shall conduct an electronic database search of the mortgagor’s 

criminal history to determine if the mortgagor has had a conviction described in paragraph (12). The mortgagee may charge 

the mortgagor a reasonable fee for the actual cost of the search 


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not to exceed a maximum rate established by the Oversight 

Board. The Oversight Board may provide clarification, if needed, to help mortgagees identify any differences among the States 

in how they report mortgage fraud convictions. The Oversight 

Board shall establish procedures sufficient to allow the mortgagor to challenge a mortgagee’s determination with respect to 

paragraph (12) (including to correct inaccuracies resulting from 

theft of the mortgagor’s identity or personally identifiable information). 

(14) APPRAISALS.—Any appraisal conducted in connection 

with a mortgage insured under this section shall— (A) be based on the current value of the property; 

(B) be conducted in accordance with title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 

1989 (12 U.S.C. 3331 et seq.); 

(C) be completed by an appraiser who meets the competency requirements of the Uniform Standards of Professional Appraisal Practice; 

(D) be wholly consistent with the appraisal standards, 

practices, and procedures under section 202(e) of this Act 

that apply to all loans insured under this Act; and 

(E) comply with the requirements of subsection (g) of this 

section (relating to appraisal independence). 

(15) STATEMENT OF LOAN TERMS.— (A) REQUIREMENT.—The mortgagor shall have been provided by the mortgagee, not later than three days after application for the mortgage, a form described in subparagraph (B) appropriately and accurately completed by the 

mortgagee. 

(B) FORM.—The form described in this subparagraph 

shall be a single page, written disclosure regarding the 

mortgage loan to be insured under this section that, when 

completed by the mortgagee, sets forth, in accordance with 

such requirements as the Secretary shall by regulation establish a best possible estimate of— (i) the total loan amount under the mortgage; 

(ii) the loan-to-value ratio for the mortgage; 

(iii) the final maturity date for the mortgage; 

(iv) the amount of any prepayment fee to be charged 

if the mortgage is paid in full before the final maturity 

date for the mortgage, including the percentages of any 

net proceeds to be received by the Secretary pursuant to 

paragraph (8)(D)(ii); 

(v) the amount of the exit premium under the mortgage pursuant to subsection (e)(3); 

(vi) the interest rate under the mortgage expressed as 

an annual percentage rate, and the amount of the 

monthly payment due under such rate; 

(vii) the fully indexed rate of interest under the mortgage expressed as an annual percentage rate and the 

amount of the monthly payment due under such rate; 

(viii) the monthly household income of the borrower 

upon which the mortgage is based; 

(ix) the amount of the monthly payment due under 

the mortgage, and the amount of such initial monthly 


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payment plus monthly amounts due for taxes and insurance on the property for which the mortgage is 

made, both expressed as a percentage of the monthly 

household income of the borrower; and 

(x) the aggregate amount of settlement charges for all 

settlement services provided in connection with the 

mortgage, the amount of such charges that are included in the principal amount and the amount of 

such charges the borrower must pay at closing, the aggregate amount of mortgagee’s fees connection with the 

mortgage, and the aggregate amount of other fees or required payments in connection with the mortgage. 

(d) FLEXIBLE UNDERWRITING CRITERIA.—

(1) IN GENERAL.—The Oversight Board shall establish, and 

the Secretary acting on behalf of the Oversight Board shall implement, underwriting standards for mortgages insured under 

this section that—

(A) ensure that each mortgagor under a mortgage insured under this section has a reasonable expectation of repaying the mortgage, taking into consideration the mortgagor’s income, assets, liabilities, payment history, and other 

applicable criteria, but which shall not result in a denial 

of insurance solely on the basis of the mortgagor’s current 

FICO or other credit scores, or any delinquency or default 

by the mortgagor under the existing mortgage or mortgages, 

or any case filed under title 11, United States Code, by the 

mortgagor; and 

(B) subject to the provisions of subparagraph (A), permit 

a total debt-to-income ratio of up to 43 percent. 

(2) EXCEPTION.—

(A) IN GENERAL.—Subject to the underwriting standards 

established under paragraph (1)(A) and any additional requirements that the Oversight Board considers appropriate, 

the Oversight Board shall permit a total debt-to-income 

ratio of more than 43 percent, but not more than 50 percent, if the mortgagor has made, on a timely basis before 

the endorsement of the mortgage insured under this section, 

not less than six months of payments in an amount not less 

than the amount of the monthly payment due under the 

mortgage to be insured under this section. The holder of the 

existing senior mortgage shall exercise forbearance with respect to such mortgage during the period in which such 

payments are made. 

(B) COMPUTATION OF DEBT-TO-INCOME RATIO.— In computing the mortgagor’s total debt-to-income ratio for purposes of mortgage qualification under the underwriting 

standards established pursuant to this section—

(i) if the mortgagor is a debtor in a case under chapter 13 of title 11, United States Code, payments on recurring debts other than housing expenses shall be 

based on the amounts being paid on such debts under 

the mortgagor’s confirmed plan under such chapter; 

and 

(ii) if the mortgagor is a debtor in a case under chapter 7 of title 11, United States Code, recurring debts 


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that are to be discharged in that case shall not be considered. 

(3) AUTHORITY.—The Oversight Board may alter the ratios 

under this subsection for a particular class of borrowers subject 

to such requirements as the Board determines is necessary and 

appropriate to fulfill the purposes of this Act. 

(4) REPRESENTATIONS AND WARRANTIES.—The Oversight 

Board shall require the underwriter of the insured loan to provide such representations and warranties as the Oversight 

Board considers necessary or appropriate for the Secretary to 

enforce compliance with all underwriting and appraisal standards of the program. 

(e) PREMIUMS.—For each mortgage insured under this section, the 

Oversight Board shall establish and the Secretary shall collect—

(1) at the time of insurance, a single premium payment in an 

amount equal to 3.0 percent of the amount of the original insured principal obligation of the mortgage, which shall be paid 

from the proceeds of the mortgage being insured under this section, through the reduction of the amount of indebtedness on 

the existing senior mortgage required under subsection (c)(6)(A); 

(2) in addition to the premium under paragraph (1), annual 

premium payments in an amount equal to 1.50 percent of the 

remaining insured principal balance of the mortgage; and 

(3) an exit premium in the amount determined under subsection (c)(8), but which shall not be less than 3.0 percent of the 

original insured principal obligation of the mortgage, subject 

only to the availability of sufficient net proceeds from sale, refinancing, or other disposition of the property, as determined in 

subsection (c)(8). 

(f) ORIGINATION FEES AND MORTGAGE RATE.—The Oversight 

Board shall establish and the Secretary shall implement a reasonable limitation on origination fees for mortgages insured under this 

section and shall establish procedures to ensure that interest rates 

on such mortgages shall be commensurate with market rate interest 

rates on such types of loans. 

(g) APPRAISAL INDEPENDENCE.— (1) PROHIBITIONS ON INTERESTED PARTIES IN A REAL ESTATE

TRANSACTION.—No mortgage lender, mortgage broker, mortgage 

banker, real estate broker, appraisal management company, employee of an appraisal management company, nor any other 

person with an interest in a real estate transaction involving an 

appraisal in connection with a mortgage insured under this section shall improperly influence, or attempt to improperly influence, through coercion, extortion, collusion, compensation, instruction, inducement, intimidation, non-payment for services 

rendered, or bribery, the development, reporting, result, or review of a real estate appraisal sought in connection with the 

mortgage. 

(2) EXCEPTIONS.—The requirements of paragraph (1) shall 

not be construed as prohibiting a mortgage lender, mortgage 

broker, mortgage banker, real estate broker, appraisal management company, employee of an appraisal management company, or any other person with an interest in a real estate 

transaction from asking an appraiser to provide 1 or more of 

the following services: 


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(A) Consider additional, appropriate property information, including the consideration of additional comparable 

properties to make or support an appraisal. 

(B) Provide further detail, substantiation, or explanation 

for the appraiser’s value conclusion. 

(C) Correct errors in the appraisal report. 

(3) CIVIL MONETARY PENALTIES.—The Secretary may impose 

a civil money penalty for any knowing and material violation 

of paragraph (1) under the same terms and conditions as are 

authorized in section 536(a) of this Act. 

(h) LIMITATION ON AGGREGATE INSURANCE AUTHORITY.—The aggregate original principal obligation of all mortgages insured under 

this section may not exceed $300,000,000,000. 

(i) ENHANCEMENT OF FHA CAPACITY.—Under the direction of the 

Oversight Board, the Secretary shall take such actions as may be 

necessary to—

(1) contract for the establishment of underwriting criteria, 

automated underwriting systems, pricing standards, and other 

factors relating to eligibility for mortgages insured under this 

section; 

(2) contract for independent quality reviews of underwriting, 

including appraisal reviews and fraud detection, of mortgages 

insured under this section or pools of such mortgages; and 

(3) increase personnel of the Department as necessary to process or monitor the processing of mortgages insured under this 

section. 

(j) MONITORING OF UNDERWRITING RISK.— (1) MONITORING OF DESIGNATED UNDERWRITERS.—The Oversight Board and the Secretary shall monitor independent quality reviews as established pursuant to subsection (i)(2) to— (A) determine compliance of designated underwriters 

with underwriting standards; 

(B) determine rates of delinquency, claims rates, and loss 

rates of designated underwriters; and 

(C) terminate eligibility of designated underwriters that 

do not meet minimum performance standards as the Oversight Board may establish and the Secretary implements. 

(2) REPORTS BY OVERSIGHT BOARD.—The Oversight Board 

shall submit monthly reports to the Congress identifying the 

progress of the program for mortgage insurance under this section, which shall contain the following information for each 

month: 

(A) The number of new mortgages insured under this section, including the location of the properties subject to such 

mortgages by census tract. 

(B) The aggregate principal obligation of new mortgages 

insured under this section. 

(C) The average amount by which the indebtedness on existing mortgages is reduced in accordance with subsection 

(c)(6). 

(D) The average amount by which the debt service payments on existing mortgages is reduced in accordance with 

subsection (c)(7). 

(E) The amount of premiums collected for insurance of 

mortgages under this section. 


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(F) The claim and loss rates for mortgages insured under 

this section. 

(G) The race, ethnicity, gender, and income of the mortgagors, aggregated by geographical areas at least as specific as census tracts, except where necessary to protect privacy of the borrower. 

(H) Any other information that the Oversight Board considers appropriate. 

(3) REPORT BY INSPECTOR GENERAL.—The Inspector General 

of the Department of Housing and Urban Development shall 

conduct an annual audit of the program for mortgage insurance 

under this section to determine compliance with this section 

and program rules. 

(k) GNMA COMMITMENT AUTHORITY.—

(1) GUARANTEES.—The Secretary shall take such actions as 

may be necessary to ensure that securities based on and backed 

by a trust or pool composed of mortgages insured under this 

section are available to be guaranteed by the Government National Mortgage Association as to the timely payment of principal and interest. 

(2) GUARANTEE AUTHORITY.—To carry out the purposes of section 306 of the National Housing Act (12 U.S.C. 1721), the Government National Mortgage Association may enter into new 

commitments to issue guarantees of securities based on or 

backed by mortgages insured under this section, not exceeding 

$300,000,000,000. The amount of authority provided under the 

preceding sentence to enter into new commitments to issue guarantees is in addition to any amount of authority to make new 

commitments to issue guarantees that is provided to the Association under any other provision of law. 

(l) SPECIAL RISK INSURANCE FUND.—The insurance of each mortgage under this section shall be the obligation of the Special Risk 

Insurance Fund established by section 238. 

(m) DEFINITIONS.—For purposes of this section, the following definitions shall apply: 

(1) EXISTING MORTGAGE.—The term ‘‘existing mortgage’’ means, with respect to a mortgage insured under this section, 

a mortgage that is to be extinguished, and paid or prepaid, 

from the proceeds of the mortgage insured under this section. 

(2) EXISTING SENIOR MORTGAGE.—The term ‘‘existing senior 

mortgage’’ means, with respect to a mortgage insured under this 

section, the existing mortgage that has superior priority. 

(3) EXISTING SUBORDINATE MORTGAGE.—The term ‘‘existing 

subordinate mortgage’’ means, with respect to a mortgage insured under this section, an existing mortgage that has subordinate priority to the existing senior mortgage. 

(n) SUNSET.—

(1) IN GENERAL.—Except as provided in paragraph (2), the 

authority of the Secretary to make any new commitment to insure any mortgage under this section shall terminate upon the 

expiration of the 2-year period beginning on the date of the enactment of the FHA Housing Stabilization and Homeownership 

Retention Act of 2008. 

(2) EXTENSIONS.—The Oversight Board may, not more than 

four times, extend the authority to enter into new commitments 


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to insure mortgages under this section beyond the date specified 

in paragraph (1), except that each such extension shall— (A) be effective only if, before the program terminates 

pursuant to paragraph (1) or any previous extension pursuant to this paragraph, the Oversight Board— (i) certifies the need for such extension in writing to 

the Congress; and 

(ii) causes notice of such extension to be published in 

the Federal Register no later than the beginning of the 

3-month period that ends upon the scheduled termination date of the program; and 

(B) be for a period of not more than 6 months. 

(o) AUTHORIZATIONS OF APPROPRIATIONS.—There is authorized to 

be appropriated for each of fiscal years 2008 and 2009—

(1) $210,000,000 for providing counseling regarding loss mitigation for mortgagors with 1- to 4-family residences, including 

determining eligibility for the program under this section, with 

grants to be administered through the Neighborhood Reinvestment Corporation, except that—

(A) not less than 15 percent of the funds made available 

pursuant to this paragraph shall be provided to counseling 

organizations that target counseling services regarding loss 

mitigation to minority and low-income homeowners or provide such services in neighborhoods with high concentrations of minority and low-income homeowners; 

(B) $35,000,000 of the funds made available pursuant to 

this paragraph shall be used by the Neighborhood Reinvestment Corporation (referred to in this subparagraph as 

the ‘‘NRC’’) to make grants to State and local legal organizations or attorneys that have demonstrated legal experience in home foreclosure or eviction law to provide legal assistance related to home ownership preservation, home foreclosure prevention, and tenancy associated with home foreclosure or to counseling intermediaries that have been approved by the Department of Housing and Urban Development for the purpose of making such grants or contracting 

for such legal assistance; of the amount provided under this 

subparagraph, at least 60 percent shall be allocated for 

legal assistance to low-income homeowners or tenants; such 

attorneys shall be capable of assisting homeowners in 

owner-occupied homes or tenants who live in homes with 

mortgages in default, in danger of default, or subject to or 

at risk of foreclosure or eviction and who have legal issues 

that cannot be handled by counselors employed by NRC 

intermediaries; in using the amount made available under 

this subparagraph, the NRC shall give priority consideration to State and local legal organizations and attorneys 

that (i) provide legal assistance in the 100 metropolitan statistical areas (as defined by the Director of the Office of 

Management and Budget) with the highest home foreclosure rates, and (ii) have the capacity to begin using the 

financial assistance within 90 days after receipt of the assistance; as a condition of the receipt of a grant under this 

subparagraph, the grantee shall submit to NRC information relating to the demographic characteristics of the asVerDate Aug 31 2005 07:33 May 06, 2008 Jkt 069006 PO 00000 Frm 00070 Fmt 6659 Sfmt 6603 E:\HR\OC\HR619.XXX HR619

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sisted homeowners or tenants, the dollar amount and terms 

of the relevant mortgages and the outcome of legal proceedings related to the foreclosure or eviction proceedings, 

including the resolutions thereof; 

(C) some such sums shall be used for such counseling for 

veterans recently returning from active duty in the Armed 

Forces; 

(D) the NRC shall give priority consideration for funding 

with amounts made available pursuant to this paragraph, 

except for funds made available under subparagraphs (A) 

and (B), to entities that have an effective plan in place for 

making contact, including personal contact, with defaulted 

mortgagors, and such a plan may include use of third parties (including both for-profit and not-for-profit entities) to 

make personal contact with defaulted mortgagors, or visits 

to such mortgagors, or both; 

(E) except with respect to funds reserved under subparagraphs (A) and (B), the NRC shall give priority consideration for funding with amounts made available pursuant 

to this paragraph to entities that have a written plan that 

has been implemented for providing in-person counseling 

and for making contact, including personal contact, with 

defaulted mortgagors, for the purpose of providing counseling or providing information about available counseling, 

both (i) prior to commencement of any foreclosure proceedings, and (ii) in the event effective in person or phone 

contact has not been made with such defaulted mortgagors 

prior thereto, then prior to the conclusion of the foreclosure 

process; and 

(F) not less than 2 percent of the funds made available 

pursuant to this paragraph shall be used only for identifying and notifying borrowers under existing mortgages 

who are eligible under this section for insurance of refinancing mortgages, and in making funds reserved under 

this subparagraph available for such purpose, the Secretary 

shall give preference to assistance for programs that have 

a proven history of outreach within minority communities; 

and 

(2) $150,000,000 for costs of activities under subsection (i). 

(p) AUDIT AND REPORT BY INSPECTOR GENERAL.—

(1) AUDIT.—The Inspector General of the Department of 

Housing and Urban Development shall conduct an audit of the 

program for loss mitigation counseling funded with amounts 

made available under subsection (o)(1) to determine compliance 

with such subsection. 

(2) REPORTS TO CONGRESS.—Not later than March 30, 2009, 

and every calendar quarter thereafter, the Inspector General 

shall submit to the appropriate committees of the Congress a report summarizing the activities of the Inspector General and the 

Neighborhood Reinvestment Corporation during the 120-day period ending on the date of such report. Each report shall include, for the period covered by such report, a detailed statement of all obligations, expenditures, and revenues associated 

with paragraphs (1) and (2) of subsection (o), including— (A) obligations and expenditures of appropriated funds; 


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(B) the number of homeowners eligible in such program; 

(C) the number of homeowners participating in such program; 

(D) the status of homeowners within such program; 

(E) the number of homeowners who have rejected assistance from the Neighborhood Reinvestment Corporation; 

and 

(F) information on participating counseling services. 

* * * * * * * 

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 

ACT 

* * * * * * * 

UNDER SECRETARY AND OTHER OFFICERS AND OFFICES

SEC. 4. (a) * * * 

* * * * * * * 

(g) OFFICE OF HOUSING COUNSELING.— (1) ESTABLISHMENT.—There is established, in the Office of the 

Secretary, the Office of Housing Counseling. 

(2) DIRECTOR.—There is established the position of Director of 

Housing Counseling. The Director shall be the head of the Office of Housing Counseling and shall be appointed by the Secretary. Such position shall be a career-reserved position in the 

Senior Executive Service. 

(3) FUNCTIONS.— (A) IN GENERAL.—The Director shall have ultimate responsibility within the Department, except for the Secretary, for all activities and matters relating to homeownership counseling and rental housing counseling, including— (i) research, grant administration, public outreach, 

and policy development relating to such counseling; 

and 

(ii) establishment, coordination, and administration 

of all regulations, requirements, standards, and performance measures under programs and laws administered by the Department that relate to housing counseling, homeownership counseling (including maintenance of homes), mortgage-related counseling (including home equity conversion mortgages and credit protection options to avoid foreclosure), and rental housing 

counseling, including the requirements, standards, and 

performance measures relating to housing counseling. 

(B) SPECIFIC FUNCTIONS.—The Director shall carry out 

the functions assigned to the Director and the Office under 

this section and any other provisions of law. Such functions 

shall include establishing rules necessary for—

(i) the counseling procedures under section 106(g)(1) 

of the Housing and Urban Development Act of 1968 (12 

U.S.C. 1701x(h)(1)); 

(ii) carrying out all other functions of the Secretary 

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opment Act of 1968, including the establishment, operation, and publication of the availability of the toll-free 

telephone number under paragraph (2) of such section; 

(iii) carrying out section 5 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604) for home 

buying information booklets prepared pursuant to such 

section; 

(iv) carrying out the certification program under section 106(e) of the Housing and Urban Development Act 

of 1968 (12 U.S.C. 1701x(e)); 

(v) carrying out the assistance program under section 

106(a)(4) of the Housing and Urban Development Act 

of 1968, including criteria for selection of applications 

to receive assistance; 

(vi) carrying out any functions regarding abusive, deceptive, or unscrupulous lending practices relating to 

residential mortgage loans that the Secretary considers 

appropriate, which shall include conducting the study 

under section 6 of the Expand and Preserve Home 

Ownership Through Counseling Act; 

(vii) providing for operation of the advisory committee established under paragraph (4) of this subsection; 

(viii) collaborating with community-based organizations with expertise in the field of housing counseling; 

and 

(ix) providing for the building of capacity to provide 

housing counseling services in areas that lack sufficient 

services. 

(4) ADVISORY COMMITTEE.—

(A) IN GENERAL.—The Secretary shall appoint an advisory committee to provide advice regarding the carrying out 

of the functions of the Director. 

(B) MEMBERS.—Such advisory committee shall consist of 

not more than 12 individuals, and the membership of the 

committee shall equally represent all aspects of the mortgage and real estate industry, including consumers. 

(C) TERMS.—Except as provided in subparagraph (D), 

each member of the advisory committee shall be appointed 

for a term of 3 years. Members may be reappointed at the 

discretion of the Secretary. 

(D) TERMS OF INITIAL APPOINTEES.—As designated by the 

Secretary at the time of appointment, of the members first 

appointed to the advisory committee, 4 shall be appointed 

for a term of 1 year and 4 shall be appointed for a term 

of 2 years. 

(E) PROHIBITION OF PAY; TRAVEL EXPENSES.—Members of 

the advisory committee shall serve without pay, but shall 

receive travel expenses, including per diem in lieu of subsistence, in accordance with applicable provisions under 

subchapter I of chapter 57 of title 5, United States Code. 

(F) ADVISORY ROLE ONLY.—The advisory committee shall 

have no role in reviewing or awarding housing counseling 

grants. 


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(5) SCOPE OF HOMEOWNERSHIP COUNSELING.—In carrying out 

the responsibilities of the Director, the Director shall ensure 

that homeownership counseling provided by, in connection with, 

or pursuant to any function, activity, or program of the Department addresses the entire process of homeownership, including 

the decision to purchase a home, the selection and purchase of 

a home, issues arising during or affecting the period of ownership of a home (including refinancing, default and foreclosure, 

and other financial decisions), and the sale or other disposition 

of a home. 

* * * * * * * 

HOUSING AND URBAN DEVELOPMENT ACT OF 1968 

* * * * * * * 

TECHNICAL ASSISTANCE, COUNSELING TO TENANTS AND HOMEOWNERS, AND LOANS TO SPONSORS OF LOW- AND MODERATE-INCOME HOUSING

SEC. 106. (a)(1) * * * 

* * * * * * * 

(4) HOMEOWNERSHIP AND RENTAL COUNSELING ASSISTANCE.—

(A) IN GENERAL.—The Secretary shall make financial assistance available under this paragraph to States, units of general 

local governments, and nonprofit organizations providing 

homeownership or rental counseling (as such terms are defined 

in subsection (g)(1)). 

(B) QUALIFIED ENTITIES.—The Secretary shall establish 

standards and guidelines for eligibility of organizations (including governmental and nonprofit organizations) to receive 

assistance under this paragraph. 

(C) DISTRIBUTION.—Assistance made available under this 

paragraph shall be distributed in a manner that encourages efficient and successful counseling programs. 

(D) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated $45,000,000 for each of fiscal years 

2008 through 2011 for— (i) the operations of the Office of Housing Counseling of 

the Department of Housing and Urban Development; 

(ii) the responsibilities of the Secretary under paragraphs 

(2) through (5) of subsection (g); and 

(iii) assistance pursuant to this paragraph for entities 

providing homeownership and rental counseling. 

* * * * * * * 

(c) GRANTS FOR HOMEOWNERSHIP COUNSELING ORGANIZATIONS.—

(1) * * * 

* * * * * * * 

(5) NOTIFICATION OF AVAILABILITY OF HOMEOWNERSHIP COUNSELING.—

(A) NOTIFICATION OF AVAILABILITY OF HOMEOWNERSHIP

COUNSELING.—

(i) * * * 


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(ii) CONTENT.—Notification under this subparagraph 

shall—

(I) * * * 

* * * * * * * 

(III) notify the homeowner or mortgage applicant of the availability of homeownership counseling provided by nonprofit organizations approved by the Secretary and experienced in the 

provision of homeownership counseling, or provide 

the toll-free telephone number described in subparagraph (D)(i); øand¿ 

(IV) notify the homeowner by a statement or notice, written in plain English by the Secretary of 

Housing and Urban Development, in consultation 

with the Secretary of Defense and the Secretary of 

the Treasury, explaining the mortgage and foreclosure rights of servicemembers, and the dependents of such servicemembers, under the 

Servicemembers Civil Relief Act (50 U.S.C. App. 

501 et seq.), including the toll-free military one 

source number to call if servicemembers, or the 

dependents of such servicemembers, require further assistanceø.¿; and 

(V) notify the housing or mortgage applicant of 

the availability of mortgage software systems provided pursuant to subsection (g)(3). 

* * * * * * * 

(e) CERTIFICATION.— ø(1) REQUIREMENT FOR ASSISTANCE.—An organization may 

not receive assistance for counseling activities under subsection (a)(1)(iii), (a)(2), (c), or (d), unless the organization provides such counseling, to the extent practicable, by individuals 

who have been certified by the Secretary under this subsection 

as competent to provide such counseling.¿ 

(1) REQUIREMENT FOR ASSISTANCE.—An organization may 

not receive assistance for counseling activities under subsection 

(a)(1)(iii), (a)(2), (a)(4), (c), or (d) of this section, or under section 101(e), unless the organization, or the individuals through 

which the organization provides such counseling, has been certified by the Secretary under this subsection as competent to 

provide such counseling. 

(2) STANDARDS AND EXAMINATION.—The Secretary shall, by 

regulation, establish standards and procedures for testing and 

certifying counselors and for certifying organizations. Such 

standards and procedures shall require øfor certification¿, for 

certification of an organization, that each individual through 

which the organization provides counseling shall demonstrate, 

and, for certification of an individual, that the individual shall 

demonstrate, by written examination (as provided under subsection (f)(4)), competence to provide counseling in each of the 

following areas: 

(A) * * * 

* * * * * * * 


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(3) REQUIREMENT UNDER HUD PROGRAMS.—Any homeownership counseling or rental housing counseling (as such terms are 

defined in subsection (g)(1)) required under, or provided in connection with, any program administered by the Department of 

Housing and Urban Development shall be provided only by organizations or counselors certified by the Secretary under this 

subsection as competent to provide such counseling. 

(4) OUTREACH.—The Secretary shall take such actions as the 

Secretary considers appropriate to ensure that individuals and 

organizations providing homeownership or rental housing counseling are aware of the certification requirements and standards of this subsection and of the training and certification programs under subsection (f). 

ø(3)¿ (5) ENCOURAGEMENT.—The Secretary shall encourage 

organizations engaged in providing homeownership and rental 

counseling that do not receive assistance under this section to 

employ organizations and individuals to provide such counseling who are certified under this subsection or meet the certification standards established under this subsection. 

* * * * * * * 

(g) PROCEDURES AND ACTIVITIES.— (1) COUNSELING PROCEDURES.— (A) IN GENERAL.—The Secretary shall establish, coordinate, and monitor the administration by the Department of 

Housing and Urban Development of the counseling procedures for homeownership counseling and rental housing 

counseling provided in connection with any program of the 

Department, including all requirements, standards, and 

performance measures that relate to homeownership and 

rental housing counseling. 

(B) HOMEOWNERSHIP COUNSELING.—For purposes of this 

subsection and as used in the provisions referred to in this 

subparagraph, the term ‘‘homeownership counseling’’ means counseling related to homeownership and residential 

mortgage loans. Such term includes counseling related to 

homeownership and residential mortgage loans that is provided pursuant to— (i) section 105(a)(20) of the Housing and Community 

Development Act of 1974 (42 U.S.C. 5305(a)(20)); 

(ii) in the United States Housing Act of 1937— (I) section 9(e) (42 U.S.C. 1437g(e)); 

(II) section 8(y)(1)(D) (42 U.S.C. 1437f(y)(1)(D)); 

(III) section 18(a)(4)(D) (42 U.S.C. 

1437p(a)(4)(D)); 

(IV) section 23(c)(4) (42 U.S.C. 1437u(c)(4)); 

(V) section 32(e)(4) (42 U.S.C. 1437z–4(e)(4)); 

(VI) section 33(d)(2)(B) (42 U.S.C. 1437z– 5(d)(2)(B)); 

(VII) sections 302(b)(6) and 303(b)(7) (42 U.S.C. 

1437aaa–1(b)(6), 1437aaa–2(b)(7)); and 

(VIII) section 304(c)(4) (42 U.S.C. 1437aaa– 3(c)(4)); 

(iii) section 302(a)(4) of the American Homeownership and Economic Opportunity Act of 2000 (42 U.S.C. 

1437f note); 


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(iv) sections 233(b)(2) and 258(b) of the CranstonGonzalez National Affordable Housing Act (42 U.S.C. 

12773(b)(2), 12808(b)); 

(v) this section and section 101(e) of the Housing and 

Urban Development Act of 1968 (12 U.S.C. 1701x, 

1701w(e)); 

(vi) section 220(d)(2)(G) of the Low-Income Housing 

Preservation and Resident Homeownership Act of 1990 

(12 U.S.C. 4110(d)(2)(G)); 

(vii) sections 422(b)(6), 423(b)(7), 424(c)(4), 442(b)(6), 

and 443(b)(6) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12872(b)(6), 

12873(b)(7), 12874(c)(4), 12892(b)(6), and 12893(b)(6)); 

(viii) section 491(b)(1)(F)(iii) of the McKinney-Vento 

Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii)); 

(ix) sections 202(3) and 810(b)(2)(A) of the Native 

American Housing and Self-Determination Act of 1996 

(25 U.S.C. 4132(3), 4229(b)(2)(A)); 

(x) in the National Housing Act— (I) in section 203 (12 U.S.C. 1709), the penultimate undesignated paragraph of paragraph (2) 

of subsection (b), subsection (c)(2)(A), and subsection (r)(4); 

(II) subsections (a) and (c)(3) of section 237 (12 

U.S.C. 1715z–2); and 

(III) subsections (d)(2)(B) and (m)(1) of section 

255 (12 U.S.C. 1715z–20); 

(xi) section 502(h)(4)(B) of the Housing Act of 1949 

(42 U.S.C. 1472(h)(4)(B)); and 

(xii) section 508 of the Housing and Urban Development Act of 1970 (12 U.S.C. 1701z–7). 

(C) RENTAL HOUSING COUNSELING.—For purposes of this 

subsection, the term ‘‘rental housing counseling’’ means 

counseling related to rental of residential property, which 

may include counseling regarding future homeownership 

opportunities and providing referrals for renters and prospective renters to entities providing counseling and shall 

include counseling related to such topics that is provided 

pursuant to— (i) section 105(a)(20) of the Housing and Community 

Development Act of 1974 (42 U.S.C. 5305(a)(20)); 

(ii) in the United States Housing Act of 1937— (I) section 9(e) (42 U.S.C. 1437g(e)); 

(II) section 18(a)(4)(D) (42 U.S.C. 

1437p(a)(4)(D)); 

(III) section 23(c)(4) (42 U.S.C. 1437u(c)(4)); 

(IV) section 32(e)(4) (42 U.S.C. 1437z–4(e)(4)); 

(V) section 33(d)(2)(B) (42 U.S.C. 1437z– 5(d)(2)(B)); and 

(VI) section 302(b)(6) (42 U.S.C. 1437aaa–

1(b)(6)); 

(iii) section 233(b)(2) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12773(b)(2)); 

(iv) section 106 of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x); 


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(v) section 422(b)(6) of the Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 12872(b)(6)); 

(vi) section 491(b)(1)(F)(iii) of the McKinney-Vento 

Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii)); 

(vii) sections 202(3) and 810(b)(2)(A) of the Native 

American Housing and Self-Determination Act of 1996 

(25 U.S.C. 4132(3), 4229(b)(2)(A)); and 

(viii) the rental assistance program under section 8 

of the United States Housing Act of 1937 (42 U.S.C. 

1437f). 

(2) STANDARDS FOR MATERIALS.—The Secretary, in conjunction with the advisory committee established under subsection 

(g)(4) of the Department of Housing and Urban Development 

Act, shall establish standards for materials and forms to be 

used, as appropriate, by organizations providing homeownership counseling services, including any recipients of assistance 

pursuant to subsection (a)(4). 

(3) MORTGAGE SOFTWARE SYSTEMS.— (A) CERTIFICATION.—The Secretary shall provide for the 

certification of various computer software programs for consumers to use in evaluating different residential mortgage 

loan proposals. The Secretary shall require, for such certification, that the mortgage software systems take into account—

(i) the consumer’s financial situation and the cost of 

maintaining a home, including insurance, taxes, and 

utilities; 

(ii) the amount of time the consumer expects to remain in the home or expected time to maturity of the 

loan; 

(iii) such other factors as the Secretary considers appropriate to assist the consumer in evaluating whether 

to pay points, to lock in an interest rate, to select an 

adjustable or fixed rate loan, to select a conventional or 

government-insured or guaranteed loan and to make 

other choices during the loan application process. 

If the Secretary determines that available existing software 

is inadequate to assist consumers during the residential 

mortgage loan application process, the Secretary shall arrange for the development by private sector software companies of new mortgage software systems that meet the Secretary’s specifications. 

(B) USE AND INITIAL AVAILABILITY.—Such certified computer software programs shall be used to supplement, not 

replace, housing counseling. The Secretary shall provide 

that such programs are initially used only in connection 

with the assistance of housing counselors certified pursuant 

to subsection (e). 

(C) AVAILABILITY.—After a period of initial availability 

under subparagraph (B) as the Secretary considers appropriate, the Secretary shall take reasonable steps to make 

mortgage software systems certified pursuant to this paragraph widely available through the Internet and at public 

locations, including public libraries, senior-citizen centers, 

public housing sites, offices of public housing agencies that 


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administer rental housing assistance vouchers, and housing counseling centers. 

(4) NATIONAL PUBLIC SERVICE MULTIMEDIA CAMPAIGNS TO

PROMOTE HOUSING COUNSELING.— (A) IN GENERAL.—The Director of Housing Counseling 

shall develop, implement, and conduct national public service multimedia campaigns designed to make persons facing 

mortgage foreclosure, persons considering a subprime mortgage loan to purchase a home, elderly persons, persons who 

face language barriers, low-income persons, and other potentially vulnerable consumers aware that it is advisable, 

before seeking or maintaining a residential mortgage loan, 

to obtain homeownership counseling from an unbiased and 

reliable sources and that such homeownership counseling is 

available, including through programs sponsored by the 

Secretary of Housing and Urban Development. 

(B) CONTACT INFORMATION.—Each segment of the multimedia campaign under subparagraph (A) shall publicize 

the toll-free telephone number and web site of the Department of Housing and Urban Development through which 

persons seeking housing counseling can locate a housing 

counseling agency in their State that is certified by the Secretary of Housing and Urban Development and can provide 

advice on buying a home, renting, defaults, foreclosures, 

credit issues, and reverse mortgages. 

(C) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary, not to exceed 

$3,000,000 for fiscal years 2008, 2009, and 2010, for the 

develop, implement, and conduct of national public service 

multimedia campaigns under this paragraph. 

(5) EDUCATION PROGRAMS.—The Secretary shall provide advice and technical assistance to States, units of general local 

government, and nonprofit organizations regarding the establishment and operation of, including assistance with the development of content and materials for, educational programs to 

inform and educate consumers, particularly those most vulnerable with respect to residential mortgage loans (such as elderly 

persons, persons facing language barriers, low-income persons, 

and other potentially vulnerable consumers), regarding home 

mortgages, mortgage refinancing, home equity loans, and home 

repair loans. 

(h) DEFINITIONS.—For purposes of this section: 

(1) NONPROFIT ORGANIZATION.—The term ‘‘nonprofit organization’’ has the meaning given such term in section 104(5) of the 

Cranston-Gonzalez National Affordable Housing Act (42 U.S.C. 

12704(5)), except that subparagraph (D) of such section shall 

not apply for purposes of this section. 

(2) STATE.—The term ‘‘State’’ means each of the several 

States, the Commonwealth of Puerto Rico, the District of Columbia, the Commonwealth of the Northern Mariana Islands, 

Guam, the Virgin Islands, American Samoa, the Trust Territories of the Pacific, or any other possession of the United 

States. 

(3) UNIT OF GENERAL LOCAL GOVERNMENT.—The term ‘‘unit of 

general local government’’ means any city, county, parish, town, 


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township, borough, village, or other general purpose political 

subdivision of a State. 

* * * * * * * 

REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 

* * * * * * * 

øSPECIAL¿ HOME BUYING INFORMATION BOOKLETS

SEC. 5. ø(a) The Secretary shall prepare and distribute booklets 

to help persons borrowing money to finance the purchase of residential real estate better to understand the nature and costs of real 

estate settlement services. The Secretary shall distribute such 

booklets to all lenders which make federally related mortgage 

loans. 

ø(b) Each booklet shall be in such form and detail as the Secretary shall prescribe and, in addition to such other information as 

the Secretary may provide, shall include in clear and concise language—

ø(1) a description and explanation of the nature and purpose 

of each cost incident to a real estate settlement; 

ø(2) an explanation and sample of the standard real estate 

settlement form developed and prescribed under section 4; 

ø(3) a description and explanation of the nature and purpose 

of escrow accounts when used in connection with loans secured 

by residential real estate; 

ø(4) an explanation of the choices available to buyers of residential real estate in selecting persons to provide necessary 

services incident to a real estate settlement; and 

ø(5) an explanation of the unfair practices and unreasonable 

or unnecessary charges to be avoided by the prospective buyer 

with respect to a real estate settlement. 

Such booklets shall take into consideration differences in real estate settlement procedures which may exist among the several 

States and territories of the United States and among separate political subdivisions within the same State and territory.¿ 

(a) PREPARATION AND DISTRIBUTION.—The Secretary shall prepare, at least once every 5 years, a booklet to help consumers applying for federally related mortgage loans to understand the nature 

and costs of real estate settlement services. The Secretary shall prepare the booklet in various languages and cultural styles, as the 

Secretary determines to be appropriate, so that the booklet is understandable and accessible to homebuyers of different ethnic and cultural backgrounds. The Secretary shall distribute such booklets to 

all lenders that make federally related mortgage loans. The Secretary shall also distribute to such lenders lists, organized by location, of homeownership counselors certified under section 106(e) of 

the Housing and Urban Development Act of 1968 (12 U.S.C. 

1701x(e)) for use in complying with the requirement under subsection (c) of this section. 

(b) CONTENTS.—Each booklet shall be in such form and detail as 

the Secretary shall prescribe and, in addition to such other information as the Secretary may provide, shall include in plain and understandable language the following information: 


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(1) A description and explanation of the nature and purpose 

of the costs incident to a real estate settlement or a federally related mortgage loan. The description and explanation shall provide general information about the mortgage process as well as 

specific information concerning, at a minimum—

(A) balloon payments; 

(B) prepayment penalties; and 

(C) the trade-off between closing costs and the interest 

rate over the life of the loan. 

(2) An explanation and sample of the uniform settlement 

statement required by section 4. 

(3) A list and explanation of lending practices, including 

those prohibited by the Truth in Lending Act or other applicable Federal law, and of other unfair practices and unreasonable 

or unnecessary charges to be avoided by the prospective buyer 

with respect to a real estate settlement. 

(4) A list and explanation of questions a consumer obtaining 

a federally related mortgage loan should ask regarding the 

loan, including whether the consumer will have the ability to 

repay the loan, whether the consumer sufficiently shopped for 

the loan, whether the loan terms include prepayment penalties 

or balloon payments, and whether the loan will benefit the borrower. 

(5) An explanation of the right of rescission as to certain 

transactions provided by sections 125 and 129 of the Truth in 

Lending Act. 

(6) A brief explanation of the nature of a variable rate mortgage and a reference to the booklet entitled ‘‘Consumer Handbook on Adjustable Rate Mortgages’’, published by the Board of 

Governors of the Federal Reserve System pursuant to section 

226.19(b)(1) of title 12, Code of Federal Regulations, or to any 

suitable substitute of such booklet that such Board of Governors 

may subsequently adopt pursuant to such section. 

(7) A brief explanation of the nature of a home equity line of 

credit and a reference to the pamphlet required to be provided 

under section 127A of the Truth in Lending Act. 

(8) Information about homeownership counseling services 

made available pursuant to section 106(a)(4) of the Housing 

and Urban Development Act of 1968 (12 U.S.C. 1701x(a)(4)), a 

recommendation that the consumer use such services, and notification that a list of certified providers of homeownership counseling in the area, and their contact information, is available. 

(9) An explanation of the nature and purpose of escrow accounts when used in connection with loans secured by residential real estate and the requirements under section 10 of this 

Act regarding such accounts. 

(10) An explanation of the choices available to buyers of residential real estate in selecting persons to provide necessary services incidental to a real estate settlement. 

(11) An explanation of a consumer’s responsibilities, liabilities, and obligations in a mortgage transaction. 

(12) An explanation of the nature and purpose of real estate 

appraisals, including the difference between an appraisal and 

a home inspection. 


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(13) Notice that the Office of Housing of the Department of 

Housing and Urban Development has made publicly available 

a brochure regarding loan fraud and a World Wide Web address and toll-free telephone number for obtaining the brochure. 

The booklet prepared pursuant to this section shall take into consideration differences in real estate settlement procedures that may 

exist among the several States and territories of the United States 

and among separate political subdivisions within the same State 

and territory. 

(c) Each lender shall include with the booklet a good faith estimate of the amount or range of charges for specific settlement services the borrower is likely to incur in connection with the settlement as prescribed by the Secretary. Each lender shall also include 

with the booklet a reasonably complete or updated list of homeownership counselors who are certified pursuant to section 106(e) of 

the Housing and Urban Development Act of 1968 (12 U.S.C. 

1701x(e)) and located in the area of the lender. 

(d) Each lender referred to in subsection (a) shall provide the 

booklet described in such subsection to each person from whom it 

receives or for whom it prepares a written application to borrow 

money to finance the purchase of residential real estate. The lender 

shall provide the HUD-issued booklet in the version that is most appropriate for the person receiving it. Such booklet shall be provided 

by delivering it or placing it in the mail not later than 3 business 

days after the lender receives the application, but no booklet need 

be provided if the lender denies the application for credit before the 

end of the 3-day period. 

* * * * * * * 


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DISSENTING VIEWS 

Current conditions in the housing market—declining prices, increasing numbers of defaults and foreclosures, and illiquidity in the 

secondary market—have resulted in calls for the government to attempt to stabilize the market by offering Federal assistance to borrowers who owe more on their mortgages than their houses are 

worth. H.R. 5830 seeks to achieve this objective by making available $300 billion in Federal guarantees to transition borrowers in 

‘‘underwater’’ mortgages into more affordable loans, by significantly 

reducing the principal on their existing mortgages and offering 

them new loans insured by the Federal Housing Administration 

(FHA). In doing so, the bill would transfer the downside risks currently being borne by the borrowers, lenders and investors in such 

mortgages to the American taxpayer. Because we believe that H.R. 

5830 is both profoundly unfair and unlikely to achieve its stated 

objectives, we oppose this legislation and voted against reporting it 

favorably to the House. 

ROOTS OF THE SUBPRIME PROBLEM

Economists agree that the roots of the current problems in the 

mortgage market can be traced to earlier this decade, when falling 

interest rates encouraged lenders to significantly relax—and in 

some cases abandon—sound underwriting criteria when qualifying 

borrowers for mortgages. Borrowers who at one time might have 

been denied credit or granted limited credit found themselves able 

to borrow larger sums, and they took advantage of this opportunity 

to buy larger, more expensive houses than they otherwise would 

have been able to afford. 

As a consequence of low interest rates and weak underwriting 

standards, the availability of mortgage credit exploded from the 

late 1990s through 2006. Homeownership rates rose from the 64 

percent range in the 35 years prior to 1995 to an all-time high of 

69 percent in 2004. The growing demand for houses, fueled by 

cheap and easily available credit, caused home prices to skyrocket: 

according to the National Association of Realtors, the national median home price went from $110,500 in 1995 to $190,000 ten years 

later. Economists have pointed out that these inflated prices reflected the euphoria of a market fueled by easy credit. Compared 

to other economic fundamentals, such as rental prices or incomes, 

these soaring housing prices were simply unsustainable, and the 

market is now in the process of correcting these excesses. 

Despite the higher risk associated with mortgages to borrowers 

with checkered credit histories, the opportunities to earn higher 

rates of return from subprime mortgages induced many lenders to 

further loosen their underwriting standards during the period 2005 

to 2007, introducing even more risk into the system. Instead of protecting themselves against this increased risk by requiring borVerDate Aug 31 2005 07:33 May 06, 2008 Jkt 069006 PO 00000 Frm 00083 Fmt 6604 Sfmt 6604 E:\HR\OC\HR619.XXX HR619

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rowers to make higher down payments, lenders engineered new 

loans that permitted borrowers to buy with little or no money 

down, and compensated for this increased risk by charging these 

borrowers higher interest rates and fees. Lenders further eroded 

the integrity of the underwriting process by permitting borrowers 

to sign up for so-called ‘‘low documentation’’ or ‘‘no documentation’’ loans, which became known in the mortgage industry as ‘‘liar 

loans,’’ so named because they often featured loan applications 

characterized by misstated or falsified income. 

As long as housing prices continued to rise, the risks inherent in 

such shoddy underwriting practices remained hidden. Borrowers 

who had stretched to purchase homes that they otherwise could not 

afford either refinanced their mortgages against home price appreciation or sold to other buyers and paid off their mortgages. Investors in mortgage-backed securities believed their risk was limited: 

even if risky borrowers defaulted, home price appreciation all but 

guaranteed that the houses that secured the underlying mortgages 

could either be resold to other buyers through voluntary sales or, 

if necessary, foreclosed upon and resold at auction with only minimal impairment of the collateral securing the loan. 

As the subprime market began to collapse in late 2006, the assumption that home prices would rise forever was exposed as fundamentally flawed. The Wall Street Journal recently reported that 

home prices in 20 major U.S. metropolitan areas have plunged 10.7 

percent, a record. As a result of declining property values, many 

borrowers now owe more on their homes than those homes are 

worth. One economist has estimated that 8.8 million mortgages are 

now ‘‘underwater,’’ and expects that figure to rise as housing prices 

further decline. Some analysts believe that even if some significant 

percentage of these borrowers can afford to make their mortgage 

payments, the difference between what they owe on their houses 

and the home’s market value—a difference that has come to be 

known as ‘‘negative equity’’—may encourage these borrowers to 

walk away from their homes. Some commentators have even gone 

so far as to say that in these circumstances, it is economically rational for borrowers to purposefully default on these mortgages. 

The so-called ‘‘negative equity’’ problem has shifted the terms of 

the discussion of the ‘‘foreclosure crisis.’’ Last year, the discussion 

focused on foreclosures that some believed would be brought on by 

steep interest rate resets on adjustable rate subprime mortgages 

that borrowers would not be able to afford. But due largely to aggressive reductions in the federal funds rate by the Federal Reserve beginning in mid–2007, the impact of mortgage rate resets 

has not been nearly as dire as many had predicted. Indeed, in some 

cases the Fed rate cuts have actually resulted in lowering borrowers’ monthly payments when their rates reset. 

The Boston Federal Reserve examined 1.5 million 

homeownerships over twenty years and found that the overwhelming reason for subprime foreclosures was not that homeowners lacked the ability to make their mortgage payments, but 

rather that borrowers chose to walk away from their mortgages 

when the value of their homes had declined. Thus, rather than focusing assistance on those homeowners unable to afford their 

monthly mortgage payments, H.R. 5830 tries to keep these homeVerDate Aug 31 2005 07:33 May 06, 2008 Jkt 069006 PO 00000 Frm 00084 Fmt 6604 Sfmt 6604 E:\HR\OC\HR619.XXX HR619

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owners from walking away from mortgages for which they may be 

able to afford to make the payments but choose not to. As Representative Mel Watt said during Committee consideration of H.R. 

5830, ‘‘one of our intentions was to try to capture those people 

whose loans were under water . . . who are intentionally walking 

away because the mortgage is substantially greater than the 

value.’’ But as Treasury Secretary Henry Paulson has noted, ‘‘[— A]ny homeowner who can afford his mortgage payment but chooses 

to walk away from an underwater property is simply a speculator. 

Washington cannot create any new mortgage program to induce 

these speculators to continue to own these homes, unless someone 

else foots the bill.’’ Under H.R. 5830, that ‘‘someone else’’ is ultimately the U.S. taxpayer. 

FAIRNESS AND MORAL HAZARD

The primary basis for Republican opposition to H.R. 5830 can be 

found in the legislation’s fundamental unfairness and skewed incentives. The bill rewards financial irresponsibility and punishes 

prudence. By providing ‘‘gift equity’’ to those homeowners who 

made bad choices or engaged in financial irresponsibility, it does an 

injustice to those millions of Americans—including the 51 million 

making their mortgage payments on time, sometimes at considerable personal sacrifice, and the 34 million renters—who chose a 

more responsible course. Those Americans must now watch as their 

neighbors receive a taxpayer-subsidized windfall in the form of sizable write-downs in loan principal and reduced monthly mortgage 

payments. 

Perhaps even more harmful for those of us concerned about 

moral hazard and personal responsibility is the message that we 

risk sending to financial institutions and individuals that when 

they willingly take on excessive and ill-advised risks, the government will always ride to their rescue. As the Congressional Budget 

Office noted in a recent report on policy options for dealing with 

turmoil in the housing market: ‘‘If the federal government is expected to step in when economic times are bad, then lenders and 

borrowers do not need to consider the possibility of bad times when 

making decisions.’’ Unless individual market participants receive a 

clear and unmistakable signal that they must bear the consequences of their own decisions, severe market disruptions like 

the one that has unfolded over the past year will be repeated over 

and over again, with grave damage to our country’s economic future. 

If there could be a rationale for legislation of this kind, it would 

be that it was targeted toward the poor or victims of fraud. Instead, H.R. 5830 has been designed to bail out the affluent too. Because the FHA is now authorized to guarantee mortgages valued 

as high as $729,750, some of the beneficiaries of the program established under the legislation could be quite wealthy. The Majority 

rejected amendments that would limit eligibility by, among other 

measures, imposing a means test. As a result, H.R. 5830 risks conferring a substantial government subsidy on those who are neither 

worthy nor needy. 

Moreover, this legislation also bails out investors who willingly 

and knowingly purchased securities that were cobbled together 


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from mortgages that were poorly underwritten. The investors and 

lenders that would benefit from H.R. 5830 are those that chased 

high rates of return even as they ignored the obvious risks of 

subprime lending and declining housing values. These market participants eagerly reaped the upside potential when housing prices 

soared; H.R. 5830 offers them a mechanism for offloading the 

downside risk on the government now that the market has soured. 

The proponents of H.R. 5830 point to the ‘‘haircut’’ that investors 

must take in order to participate in the FHA refinancing program 

to rebut the contention that the bill would bail them out. But this 

argument is specious. Because participation in the plan is voluntary, no mortgage will be placed in the program unless an investor concludes that the loan is likely to fail. The incentives are perverse: Investors will place the mortgages they think are worth less 

than the ‘‘haircut’’ into the program, to be refinanced with an FHAguaranteed loan. Given the substantial risk that these loans represent—the plan is after all aimed at those borrowers most likely 

to default or who are ‘‘intentionally walking away’’—no lender 

would refinance but for the FHA guarantee. The result is that taxpayers who acted responsibly during the run-up in housing prices 

are left to underwrite the costs of cleaning up after irresponsible 

borrowers, lenders, and investors. During Committee consideration 

of H.R. 5830, Republicans offered a series of amendments designed 

to mitigate these moral hazard and adverse selection issues, only 

to have them opposed unanimously by Committee Democrats. 

IMPLEMENTATION ISSUES

Economists of every stripe have pointed out that by every conceivable measure, housing prices remain inflated and will still have 

to come down at least another 15 percent to return to historical 

levels. There is currently a 10 months’ over-supply of existing 

homes, which H.R. 5830 will do nothing to address. Because prospective customers cannot afford to buy at current prices, those 

prices will have to fall, wiping out whatever minimal impact H.R. 

5830 will have on home prices. Given that the Federal Reserve estimates that owner-occupied real estate is worth almost $21 trillion, H.R. 5830’s goal of arresting home price declines by refinancing a maximum of $300 billion in mortgages is as futile as it 

is unfair. 

Even if one concedes that a plan of this nature could work, because the market remains so unsettled, there is no way of knowing 

whether it will work. No one knows where the market’s bottom is. 

Thus, there is no way of knowing how many distressed homeowners this would help. No reasonable person can predict whether 

the principal write-downs, returns on equity or exit premiums in 

this bill are rationally related to actual, eventual home values. And 

because the numbers are based on nothing more than guesswork, 

it is simply unreasonable to ask the taxpayer to bear the risk of 

that guess being off the mark. 

Furthermore, many believe that FHA lacks the administrative 

capacity to insure an additional $300 billion in mortgages, which 

would represent a massive expansion of the agency’s current $180 

billion portfolio. Moreover, given that the program contemplated by 

H.R. 5830 depends on a large-scale re-underwriting of troubled 


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mortgages, it is far from certain that the program could be 

launched in time to make any difference in the real estate market. 

Interest rate reduction and extensions of amortization periods are 

better options anyway: They are immediate, easier to administer 

and can be implemented without reliance upon a cumbersome FHA 

bureaucracy. Indeed, perhaps the best that can be said about this 

legislation is that given its inherent unfairness and potential to put 

taxpayers at risk for loans that investors are all too eager to be rid 

of, the insurmountable difficulties of implementing it may mean 

that whatever harm it ultimately ends up doing should be limited. 

CONCLUSION

For all of the foregoing reasons, we must oppose H.R. 5830, and 

will continue to push for changes to the bill as it moves through 

the House to limit taxpayer exposure and discourage moral hazard. 

SPENCER BACHUS. 

ED ROYCE. 

TOM FEENEY. 

JOHN CAMPBELL. 

K. MARCHANT. 

SCOTT GARRETT. 

ADAM H. PUTNAM. 

THOMAS PRICE. 

J. GRESHAM BARRETT. 

JEB HENSARLING. 

RON PAUL. 

PATRICK T. MCHENRY. 

MICHELE BACHMANN. 

DONALD MANZULLO. 

GEOFF DAVIS. 

KEVIN MCCARTHY. 

PETER J. ROSKAM. 

RANDY NEUGEBAUER. 

STEVAN PEARCE. 

JUDY BIGGERT. 

Æ 


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