I 

111TH CONGRESS 

1ST SESSION H. R. 230 

To prevent foreclosure of home mortgages and increase the availability of 

affordable new mortgages. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 7, 2009 

Mr. CARDOZA introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To prevent foreclosure of home mortgages and increase the 

availability of affordable new mortgages. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Housing Opportunity 

5 and Mortgage Equity Act of 2009’’. 

6 SEC. 2. AFFORDABLE REFINANCING MORTGAGES AND NEW 

7 MORTGAGES. 

8 (a) AUTHORITY.—The Federal National Mortgage 

9 Association and the Federal Home Loan Mortgage Cor10 poration shall each carry out a program under this section 


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1 to purchase and securitize qualified refinancing mortgages 

2 and qualified new mortgages on single-family housing, in 

3 accordance with this section and policies and procedures 

4 that the Director of the Federal Housing Finance Agency 

5 shall establish. 

6 (b) PURCHASE OF QUALIFIED MORTGAGES.— 

7 (1) REQUIREMENT TO PURCHASE.—If a lender 

8 proffers to an enterprise, in accordance with require9 ments established by the Director, a mortgage or 

10 mortgages for purchase under this section, the en11 terprise shall make a determination of whether such 

12 mortgage or mortgages are qualified mortgages. 

13 Subject to subsection (g), if the enterprise deter14 mines that such mortgage or mortgages meet the re15 quirements for qualified mortgages, the enterprise 

16 shall make a commitment to purchase, and shall 

17 purchase, the mortgage or mortgages. 

18 (2) ADVANCE COMMITMENTS.—The Director 

19 shall require each enterprise to establish a procedure 

20 for approval of lenders to receive commitments, in 

21 advance of the origination of qualified mortgages, 

22 for purchase of such mortgages under this section by 

23 the enterprise. 

24 (c) QUALIFIED MORTGAGES.— 


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1 (1) QUALIFIED MORTGAGE.—For purposes of 

2 this section, the term ‘‘qualified mortgage’’ means a 

3 mortgage that is a qualified refinancing mortgage or 

4 a qualified new mortgage. 

5 (2) QUALIFIED REFINANCING MORTGAGE.—For 

6 purposes of this section, the term ‘‘qualified refi7 nancing mortgage’’ means a mortgage that meets 

8 the following requirements: 

9 (A) SINGLE-FAMILY HOUSING.—The prop10 erty subject to the mortgage shall be a one- to 

11 four-family dwelling, including a condominium 

12 or a share in a cooperative ownership housing 

13 association. 

14 (B) PRINCIPAL RESIDENCE.—The mort15 gagor under the mortgage shall occupy the 

16 property subject to the mortgage as his or her 

17 principal residence. 

18 (C) REFINANCING.—The principal loan 

19 amount repayment of which is secured by the 

20 mortgage shall be used to satisfy all indebted21 ness under an existing first mortgage that— 

22 (i) was made for purchase of, or refi23 nancing another first mortgage on, the 

24 same property that is subject to the quali25 fied refinancing mortgage; and 


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1 (ii) was originated on or before Janu2 ary 1, 2008. 

3 (D) INTEREST RATE; TERM TO MATU4 RITY.—The mortgage shall— 

5 (i) bear interest at a single rate that 

6 is fixed for the entire term of the mort7 gage, which shall not exceed 4.0 percent 

8 annually; and 

9 (ii) have a term to maturity of not 

10 less than 30 years and not more than 40 

11 years from the date of the beginning of the 

12 amortization of the mortgage. 

13 (E) UNDERWRITING STANDARDS.—The 

14 mortgage shall meet such underwriting stand15 ards as the Director shall require. 

16 (F) WAIVER OF PREPAYMENT PEN17 ALTIES.—All penalties for prepayment or refi18 nancing of the underlying mortgage refinanced 

19 by the mortgage, and all fees and penalties re20 lated to the default or delinquency on such 

21 mortgage, shall have been waived or forgiven. 

22 (3) QUALIFIED NEW MORTGAGE.—For purposes 

23 of this section, the term ‘‘qualified new mortgage’’ 

24 means a mortgage that meets the following require25 ments: 


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1 (A) TERMS.—The mortgage meets the re2 quirements under subparagraphs (A), (B), (D), 

3 and (E) of paragraph (2). 

4 (B) HOME PURCHASE.—The principal loan 

5 amount repayment of which is secured by the 

6 mortgage shall be used to purchase the prop7 erty that is subject to the qualified new mort8 gage. 

9 (C) NEW MORTGAGES.—The mortgage was 

10 originated on or after the date of the enactment 

11 of this Act. 

12 (d) EXCEPTIONS TO UNDERWRITING STANDARDS.— 

13 Each enterprise shall establish such exceptions to the un14 derwriting standards of the enterprise, including downpay15 ment and credit rating standards, that conform to the un16 derwriting standards established pursuant to subsection 

17 (c)(5), as may be necessary to allow the enterprise to pur18 chase and securitize qualified refinancing mortgages and 

19 qualified new mortgages under this section, in accordance 

20 with such requirements as the Director shall establish. 

21 (e) SECURITIZATION.— 

22 (1) REQUIREMENT.—Each enterprise shall, 

23 upon such terms and conditions as it may prescribe, 

24 set aside any qualified mortgages purchased by it 

25 under this section and, upon approval of the SecVerDate Nov 24 2008 01:43 Jan 11, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H230.IH H230

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1 retary of the Treasury, issue and sell securities 

2 based upon such mortgages set aside. 

3 (2) FORM.—Securities issued under this sub4 section may be in the form of debt obligations or 

5 trust certificates of beneficial interest, or both. 

6 (3) TERMS.—Securities issued under this sub7 section shall have such maturities and bear such 

8 rate or rates of interest as may be determined by the 

9 enterprise with the approval of the Secretary. 

10 (4) EXEMPTION.—Securities issued by an en11 terprise under this subsection shall, to the same ex12 tent as securities which are direct obligations of or 

13 obligations guaranteed as to principal and interest 

14 by the United States, be deemed to be exempt secu15 rities within the meaning of laws administered by 

16 the Securities and Exchange Commission. 

17 (5) PRINCIPAL AND INTEREST PAYMENTS.— 

18 Mortgages set aside pursuant to this subsection shall 

19 at all times be adequate to enable the issuing enter20 prise to make timely principal and interest payments 

21 on the securities issued and sold pursuant to this 

22 subsection. 

23 (6) REQUIRED DISCLOSURE.—Each enterprise 

24 shall insert appropriate language in all of the securi25 ties issued under this subsection clearly indicating 


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1 that such securities, together with the interest there2 on, are not guaranteed by the United States and do 

3 not constitute a debt or obligation of the United 

4 States or any agency or instrumentality thereof 

5 other than the enterprise. 

6 (f) FEDERAL RESERVE FINANCING FACILITY.—The 

7 Board of Governors of the Federal Reserve System shall 

8 establish a credit facility of the Federal Reserve System 

9 to make credit available to the enterprises at interest rates 

10 comparable to rates on securities issued by the Secretary 

11 of the Treasury under chapter 31 of title 31, United 

12 States Code, and having comparable terms, as determined 

13 by the Board. 

14 (g) TERMINATION.—The requirement under sub15 section (b)(1) for the enterprises to purchase mortgages 

16 shall not apply to any mortgage proferred to an enterprise 

17 after December 31, 2010. 

18 SEC. 3. DEFINITIONS. 

19 For purposes of this Act, the following definitions 

20 shall apply: 

21 (1) DIRECTOR.—The term ‘‘Director’’ means 

22 the Director of the Federal Housing Finance Agen23 cy. 


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1 (2) ENTERPRISE.—The term ‘‘enterprise’’ 

2 means the Federal National Mortgage Association 

3 and the Federal Home Loan Mortgage Corporation. 

4 (3) SECRETARY.—The term ‘‘Secretary’’ means 

5 the Secretary of the Treasury. 

Æ 


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