II 

112TH CONGRESS 

1ST SESSION S. 1834 

To restore and repair the United States mortgage markets by making them 

transparent, bringing in private capital, winding down the Governmentsponsored enterprises, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 9, 2011 

Mr. CORKER introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To restore and repair the United States mortgage markets 

by making them transparent, bringing in private capital, 

winding down the Government-sponsored enterprises, and 

for other purposes. 

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 ‘‘Residential Mortgage 

5 Market Privatization and Standardization Act of 2011’’. 

6 SEC. 2. DEFINITIONS. 

7 For purposes of this Act, the following definitions 

8 shall apply: 


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1 (1) COVERED MORTGAGE LOAN.— 

2 (A) IN GENERAL.—The term ‘‘covered 

3 mortgage loan’’ means any residential mortgage 

4 loan, including any single-family and multi5 family loan, that is originated, serviced, or sub6 serviced, in whole or in part, owned directly or 

7 indirectly, including through any interest in a 

8 security that is backed in whole or in part by 

9 a mortgage loan, or securitized or resecuritized, 

10 by an entity or affiliate or subsidiary thereof 

11 that is regulated by any of the agencies listed 

12 in subparagraph (B). 

13 (B) AGENCIES.—The agencies listed in 

14 this subparagraph are— 

15 (i) the Board of Governors of the 

16 Federal Reserve System; 

17 (ii) the Department of Agriculture; 

18 (iii) the Department of Housing and 

19 Urban Development; 

20 (iv) the Federal Deposit Insurance 

21 Corporation; 

22 (v) the Federal Housing Finance 

23 Agency; 

24 (vi) the Farm Credit Administration; 

25 (vii) the Federal Trade Commission; 


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1 (viii) the Office of the Comptroller of 

2 the Currency; 

3 (ix) the National Credit Union Ad4 ministration; and 

5 (x) the Securities and Exchange Com6 mission. 

7 (2) ENTERPRISES.—The term ‘‘enterprises’’ 

8 means, individually and collectively, the Federal Na9 tional Mortgage Association and the Federal Home 

10 Loan Mortgage Corporation. 

11 (3) FHFA; DIRECTOR.—The terms ‘‘FHFA’’ 

12 and ‘‘Director’’ mean the Federal Housing Finance 

13 Agency and the Director thereof, respectively. 

14 (4) MORTGAGE DATA.— 

15 (A) IN GENERAL.—The Director shall de16 fine mortgage data, by regulation, consistent 

17 with this paragraph. 

18 (B) SINGLE-FAMILY LOANS.—For single19 family covered mortgage loans, the term ‘‘mort20 gage data’’ means, as of the date of origina21 tion— 

22 (i) the loan origination date and the 

23 loan maturity date; 


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1 (ii) whether the loan is a purchase 

2 loan or a refinance, and for refinance 

3 loans— 

4 (I) the date on which the refi5 nanced loan was originated; 

6 (II) the identity of the lender on 

7 the refinanced loan; and 

8 (III) the unpaid principal balance 

9 of the refinanced loan that was repaid 

10 by the new loan; 

11 (iii) the value of the collateral prop12 erty on which the lender relied, and how 

13 the lender determined the value; 

14 (iv) the credit score or scores that the 

15 lender used or on which it relied, and the 

16 entity that supplied each; 

17 (v) debt-to-income ratios, including— 

18 (I) the ratio of the total debt of 

19 the borrower and coborrowers, ex20 pressed as a monthly payment 

21 amount, to the total current and ex22 pected future income of the borrower 

23 and any coborrowers on which the 

24 lender relied, expressed as a monthly 

25 income amount; and 


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1 (II) the ratio of the first sched2 uled payment on the loan, expressed 

3 as a monthly payment amount, to the 

4 total current and expected future in5 come of the borrower and any cobor6 rowers on which the lender relied, ex7 pressed as a monthly income amount; 

8 (vi) the total value of borrower assets, 

9 but not including the value of the collateral 

10 and not including income, on which the 

11 lender relied; 

12 (vii) the principal amount of the loan; 

13 (viii) the interest rate on the loan; 

14 (ix) if the interest rate may adjust 

15 under the loan terms, the terms and limits 

16 of any permissible adjustment, including 

17 the index and margin, if applicable, when 

18 the rate may adjust, and any caps or floors 

19 on any such adjustment; 

20 (x) if the principal may increase under 

21 the loan terms at origination, the terms 

22 and limits of any permissible increase, in23 cluding when the increase or increases may 

24 occur, how the amount and timing of any 


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1 increase is determined, and any caps on 

2 any such increases; 

3 (xi) if the payment amount may ad4 just, independently of a rate adjustment or 

5 of an increase in the principal amount, the 

6 terms and limits of any permissible adjust7 ment, including when the adjustment may 

8 occur, how the amount and timing of any 

9 adjustment is determined, and any caps or 

10 floors on any such adjustments; 

11 (xii) whether, under the loan terms, 

12 the borrower may be required to pay any 

13 prepayment penalty, and if so, the poten14 tial amount and timing of any such pen15 alty; 

16 (xiii) any permissible grace periods 

17 and late fees under the loan terms, includ18 ing fee amounts permitted on the loan; 

19 (xiv) whether the borrower or any co20 borrower has stated an intent to reside in 

21 the property as a principal residence; 

22 (xv) whether the loan is assumable 

23 under the loan terms at origination and if 

24 so, the conditions on which any assumption 

25 may be denied; 


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1 (xvi) whether the originating lender 

2 was or is aware of any subordinate or sen3 ior lien on the property at the time at 

4 which the loan was originated, and if so, 

5 the identity of all lenders or other 

6 lienholders of such other loans, the relative 

7 lien position of each, and the date of origi8 nation of each lien if it secures a mortgage 

9 loan; 

10 (xvii) the type of mortgage insurance 

11 relating to the loan, including who pays it, 

12 and the amount and scheduled payment 

13 dates of any premiums; 

14 (xviii) whether flood insurance is re15 quired in connection with the loan, and if 

16 so, the amount and timing of premiums; 

17 (xix) whether the loan has an escrow 

18 account and if so, the amount of the initial 

19 deposit into the escrow account and the 

20 amount of the monthly payments scheduled 

21 to be deposited into the escrow account; 

22 (xx) the amount of points, fees, and 

23 settlement charges paid to originate the 

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1 pensation paid to a mortgage broker, and 

2 who paid it; 

3 (xxi) whether the borrower or bor4 rowers have any payment assistance at 

5 origination, such as government or private 

6 subsidies or buydowns, and if so, the 

7 amounts, terms, and timing of such assist8 ance; and 

9 (xxii) the address of the real property 

10 securing the mortgage loan. 

11 (C) MULTIFAMILY LOANS.—For multi12 family covered mortgage loans, the term ‘‘mort13 gage data’’ means, as of the date of origina14 tion— 

15 (i) the number of dwelling units in 

16 each property securing each loan; 

17 (ii) the rent on each dwelling unit, or, 

18 if more than 1 has the same rent, the 

19 number of units at each rent level; 

20 (iii) the occupancy status of each 

21 dwelling unit; 

22 (iv) whether the rent is subsidized by 

23 any government agency and, if so, in what 

24 amounts, under what terms and conditions, 

25 and for what period of time; 


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1 (v) whether the rent on the units is 

2 current, and if not, how many days or 

3 months the rent for each unit is delin4 quent; and 

5 (vi) all of the information described in 

6 subparagraph (B), except as modified by 

7 the Director, by regulation, consistent with 

8 this Act. 

9 (D) AFTER ORIGINATION.—For both sin10 gle-family and multifamily covered mortgage 

11 loans, beginning the day after the date of origi12 nation of the loan, and reported not less fre13 quently than monthly thereafter until the loan 

14 ceases to exist, the term ‘‘mortgage data’’ in15 cludes— 

16 (i) the amount and date of payments 

17 received each month, including— 

18 (I) whether each payment is re19 ceived by the due date or within a 

20 grace period, and if a payment is re21 ceived after the scheduled due date, 

22 how many days past due; 

23 (II) the amount of any payment 

24 deposited into an escrow account; 


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1 (III) amounts paid for other loan 

2 charges, with an identification of the 

3 amount and type of such other 

4 charge; and 

5 (IV) the amount of any prepay6 ments; 

7 (ii) for loans on which any payment or 

8 partial payment is overdue, the number of 

9 days since the loan was current; 

10 (iii) whether property taxes, hazard 

11 insurance premiums, and any flood insur12 ance premiums required in connection with 

13 the loan are paid by the borrower or bor14 rowers as required, and if any such item is 

15 not paid as required— 

16 (I) the number of days since the 

17 payment was required, and the 

18 amount of the missed payment; 

19 (II) whether the servicer or other 

20 party on behalf of the servicer paid 

21 property taxes on the property, and in 

22 what amount; and 

23 (III) whether the servicer or 

24 other party on behalf of the servicer 

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1 ance, and if so, the amount of the 

2 premium and the identity of the in3 surer; 

4 (iv) the amount of any interest paid 

5 to the borrower on any escrow; 

6 (v) the type and date of any actions 

7 taken by or on behalf of the servicer due 

8 to default, including nonpayment default, 

9 and the amount charged to the borrower or 

10 borrowers as a result of the action or ac11 tions; and 

12 (vi) if the servicer is aware of any 

13 damage to the property securing the loan, 

14 the type and extent of the damage and of 

15 any repairs, the amount of insurance pro16 ceeds paid, the amount of such proceeds 

17 disbursed or paid to the borrower, and the 

18 amount held by the servicer, and the date 

19 and results of any inspection done by or on 

20 behalf of the servicer. 

21 (E) ADJUSTMENTS CONSISTENT WITH THE

22 PURPOSES OF THIS ACT.—The Director may 

23 adjust the items that are included in or ex24 cluded from the definition of mortgage data 


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1 consistent with this Act, as appropriate to pro2 tect the privacy of individual consumers. 

3 (F) PRIVACY.—The regulations required 

4 by subparagraph (A) may require rounding off 

5 of the debt to income ratios required to be in6 cluded as mortgage data to protect the privacy 

7 of the borrower, taking into consideration the 

8 information that is already available on the 

9 Internet or in other ways. 

10 SEC. 3. GSE WINDDOWN. 

11 (a) FANNIE MAE.—Section 304 of the National 

12 Housing Act (12 U.S.C. 1719) is amended by adding at 

13 the end the following: 

14 ‘‘(h) WINDDOWN OF ENTERPRISES.— 

15 ‘‘(1) ANNUAL GUARANTEE REDUCTIONS.—Not 

16 later than 180 days after the date of enactment of 

17 the Mortgage Market Privatization and Standardiza18 tion Act of 2011, and annually thereafter, the Direc19 tor shall begin reducing the percentage of the value 

20 of a trust certificate or other security that may be 

21 guaranteed by the corporation by not less than 10 

22 percent per year. 

23 ‘‘(2) STRUCTURE.—The percentage of the bond 

24 guaranteed by the corporation can be structured on 

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1 termined by the Director. The Director shall pursue 

2 a strategy that allows for market signals to assist 

3 Congress and the Director to monitor and assess the 

4 price that private market participants are assigning 

5 to mortgage credit risk.’’. 

6 (b) FREDDIE MAC.—Section 305 of the Federal 

7 Home Loan Mortgage Corporation Act (12 U.S.C. 1454) 

8 is amended by adding at the end the following: 

9 ‘‘(d) WINDDOWN OF ENTERPRISES.— 

10 ‘‘(1) ANNUAL GUARANTEE REDUCTIONS.—Not 

11 later than 180 days after the date of enactment of 

12 the Mortgage Market Privatization and Standardiza13 tion Act of 2011, and annually thereafter, the Direc14 tor shall begin reducing the percentage of the value 

15 of a trust certificate or other security that may be 

16 guaranteed by the corporation by not less than 10 

17 percent per year. 

18 ‘‘(2) STRUCTURE.—The percentage of the bond 

19 guaranteed by the corporation can be structured on 

20 either a pro-rata or senior-subordinated basis, as de21 termined by the Director. The Director shall pursue 

22 a strategy that allows for market signals to assist 

23 Congress and the Director to monitor and assess the 

24 price that private market participants are assigning 

25 to mortgage credit risk.’’. 


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1 SEC. 4. RESIDENTIAL MORTGAGE MARKET TRANS2 PARENCY. 

3 (a) IN GENERAL.—Mortgage data relating to all cov4 ered mortgage loans shall be put into the public domain 

5 in accordance with this section. 

6 (b) AGENCY ACTION.—Each agency named in section 

7 2(1)(B) shall, not later than 1 year after the date of enact8 ment of this Act, require, by regulation, that all entities 

9 regulated by such agency shall put mortgage data relating 

10 to covered mortgage loans into the public domain, in ac11 cordance with this Act and the regulations issued under 

12 this Act. Such regulations shall require that the data be 

13 reasonably accurate and complete. 

14 (c) MANNER AND FORM OF DATA.—Not later than 

15 1 year after the date of enactment of this Act, the Director 

16 shall, by regulation— 

17 (1) establish the manner and form by which all 

18 mortgage data required to be put into the public do19 main by this section shall be put into the public do20 main; and 

21 (2) require that such mortgage data be made 

22 available in a uniform manner, in a form designed 

23 for uniformity of data definitions and forms, ease 

24 and speed of access, ease and speed of downloading, 

25 and ease and speed of use. 


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1 (d) UPDATE.—All entities required to put mortgage 

2 data into the public domain under this Act shall continu3 ously update the mortgage data, not less frequently than 

4 monthly, as long as the entities exist, whether in con5 servatorship, receivership, or otherwise. All updates shall 

6 be reasonably accurate and complete. 

7 (e) RESPONSIBILITY OF REGULATED ENTITIES.— 

8 The mortgage data required to be put into the public do9 main in accordance with this Act shall include all mort10 gage data related to all covered mortgage loans, to the 

11 extent practicable. 

12 (f) DUPLICATION OF EFFORT.—If 2 or more entities 

13 are required by this Act to report the same mortgage data 

14 relating to the same mortgage loan, they may, by agree15 ment, determine that only 1 of such entities will report 

16 the data. If 1 of such entities reports the required mort17 gage data, it shall not be a violation of this section for 

18 the other entities not to report the data. 

19 (g) DATE OF ACCESS TO DATA.—The Director shall 

20 establish, and cause to be published in the Federal Reg21 ister, the initial date on which— 

22 (1) the public shall begin to have access to any 

23 data put into the public domain in accordance with 

24 this Act; and 


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1 (2) all mortgage data is required to be put into 

2 the public domain, in accordance with this Act. 

3 (h) COSTS TO FHFA.—The FHFA shall pay the cost 

4 of establishing the database of mortgage data that is put 

5 into the public domain under this section, and of providing 

6 public access to that database. If the FHFA ever ceases 

7 to exist without being replaced, and unless otherwise pro8 vided by Act of Congress, the cost of maintaining the data9 base shall be borne by the remaining agencies named in 

10 section 2(1)(B), by agreement. 

11 SEC. 5. ENCOURAGING A MARKET FOR HIGH QUALITY RESI12 DENTIAL MORTGAGE FUTURES. 

13 (a) IN GENERAL.—Subpart A of part 2 of subtitle 

14 A of the Federal Housing Enterprises Financial Safety 

15 and Soundness Act of 1992 (12 U.S.C. 4541 et seq.) is 

16 amended by adding at the end the following: 

17 ‘‘SEC. 1327. ENCOURAGING A MARKET FOR HIGH QUALITY 

18 RESIDENTIAL MORTGAGE FUTURES. 

19 ‘‘(a) DEFINITIONS.—In this section, the following 

20 definitions shall apply: 

21 ‘‘(1) DELIVERABLE RESIDENTIAL MORTGAGE.— 

22 ‘‘(A) IN GENERAL.—The terms ‘deliverable 

23 residential mortgage’ and ‘DRM’ have the 

24 meaning given those terms by rule of the Direc25 tor, in consultation with participants in the 


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1 TBA market, taking into consideration under2 writing and product features that historical 

3 loan performance data indicate result in a lower 

4 risk of default, such as— 

5 ‘‘(i) documentation and verification of 

6 the financial resources relied upon to qual7 ify the mortgagor; 

8 ‘‘(ii) standards with respect to— 

9 ‘‘(I) the residual income of the 

10 mortgagor after all monthly obliga11 tions; 

12 ‘‘(II) the ratio of the housing 

13 payments of the mortgagor to the 

14 monthly income of the mortgagor; and 

15 ‘‘(III) the ratio of total monthly 

16 installment payments of the mort17 gagor to the income of the mortgagor; 

18 ‘‘(iii) mitigating the potential for pay19 ment shock on adjustable rate mortgages 

20 through product features and underwriting 

21 standards; 

22 ‘‘(iv) mortgage guarantee insurance or 

23 other types of insurance or credit enhance24 ment obtained at the time of origination, 


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1 to the extent such insurance or credit en2 hancement reduces the risk of default; and 

3 ‘‘(v) prohibiting or restricting the use 

4 of balloon payments, negative amortization, 

5 prepayment penalties, interest-only pay6 ments, and other features that have been 

7 demonstrated to exhibit a higher risk of 

8 borrower default. 

9 ‘‘(B) LIMITATION ON DEFINITION.—The 

10 Director, in defining the term ‘deliverable resi11 dential mortgage’, as required by subparagraph 

12 (B), shall define that term to be no broader 

13 than the definition of the term ‘qualified mort14 gage’, as provided under section 129C(c)(2) of 

15 the Truth in Lending Act and regulations 

16 adopted thereunder. 

17 ‘‘(2) PARTICIPANT IN THE TBA MARKET.—The 

18 term ‘participant in the TBA market’ means a pri19 vate investor in or dealer of mortgage-backed securi20 ties, particularly mortgage-backed securities issued 

21 by the enterprises, that routinely enters into forward 

22 contracts for the sale of mortgage-backed securities 

23 that do not specify the particular mortgage-backed 

24 securities that will be delivered to the buyer. 


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1 ‘‘(3) PROGRAM.—The term ‘program’ means 

2 the program established under subsection (b). 

3 ‘‘(4) DRM FUTURES MARKET.—The term 

4 ‘DRM futures market’ means a market for forward 

5 contracts for the sale of mortgage-backed securities 

6 collateralized exclusively by deliverable residential 

7 mortgages. 

8 ‘‘(5) TBA MARKET.—The term ‘TBA market’ 

9 means the market for forward contracts for the sale 

10 of mortgage-backed securities that do not specify the 

11 particular mortgage-backed securities that will be 

12 delivered to the buyer. 

13 ‘‘(b) PROGRAM ESTABLISHED.—The Director, in 

14 consultation with participants in the TBA market, shall 

15 establish a program to encourage the development of a 

16 DRM futures market that— 

17 ‘‘(1) compliments the TBA market; 

18 ‘‘(2) creates incentives for trading by partici19 pants in the TBA market; and 

20 ‘‘(3) has the potential to replace the TBA mar21 ket. 

22 ‘‘(c) TECHNOLOGY AND INFRASTRUCTURE.—The Di23 rector shall consult with participants in the TBA market 

24 to develop the technology and infrastructure necessary to 

25 carry out the program established under this section. 


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1 ‘‘(d) ANNUAL REPORT.—The Director shall submit 

2 to Congress an annual report on the program established 

3 under this section.’’. 

4 (b) SECURITIES LAWS EXEMPTIONS.— 

5 (1) SECURITIES ACT OF 1933.—Section 3(a) of 

6 the Securities Act of 1933 (15 U.S.C. 77c(a)) is 

7 amended by adding at the end the following: 

8 ‘‘(14) Any mortgage-backed security 

9 collateralized exclusively by deliverable residential 

10 mortgages, as such term is defined under section 

11 1327 of the Federal Housing Enterprises Financial 

12 Safety and Soundness Act of 1992.’’. 

13 (2) SECURITIES EXCHANGE ACT OF 1934.—Sec14 tion 3(a)(12)(A) of the Securities Exchange Act of 

15 1934 (15 U.S.C. 78c(a)(12)(A)) is amended— 

16 (A) by redesignating clauses (vi) and (vii) 

17 as clauses (vii) and (viii), respectively; and 

18 (B) by inserting after clause (v) the fol19 lowing: 

20 ‘‘(vi) any mortgage-backed security 

21 collateralized exclusively by deliverable res22 idential mortgages, as such term is defined 

23 under section 1327 of the Federal Housing 

24 Enterprises Financial Safety and Sound25 ness Act of 1992;’’. 


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1 SEC. 6. MONETIZATION OF BUSINESS VALUE. 

2 Pursuant to the authority of the Director as conser3 vator of the enterprises under section 1367 of the Federal 

4 Housing Enterprises Financial Safety and Soundness Act 

5 of 1992 (12 U.S.C. 4617), the Director shall— 

6 (1) identify any property of the enterprises that 

7 would be of value to nongovernmental entities, in8 cluding— 

9 (A) historical databases containing infor10 mation on prepayment, delinquency, and default 

11 rates; 

12 (B) proprietary home price indices; 

13 (C) technology used in the securitization of 

14 mortgages; and 

15 (D) patents relating to the securitization of 

16 mortgages, automated underwriting systems, 

17 and other processes; and 

18 (2) sell any property identified under paragraph 

19 (1) to nongovernmental entities. 

20 SEC. 7. UNIFORM UNDERWRITING STANDARDS. 

21 (a) STANDARDS ESTABLISHED.—Notwithstanding 

22 any other provision of this Act or any other provision of 

23 Federal, State, or local law, the Federal banking agencies 

24 (as that term is defined in section 3 of the Federal Deposit 

25 Insurance Act (12 U.S.C. 1813)), in consultation with the 

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1 ment, shall jointly establish specific minimum standards 

2 for mortgage underwriting, including— 

3 (1) a requirement that the mortgagee verify 

4 and document the income and assets relied upon to 

5 qualify the mortgagor on the residential mortgage, 

6 including the previous employment and credit his7 tory of the mortgagor; and 

8 (2) a down payment requirement that— 

9 (A) is equal to not less than 5 percent of 

10 the purchase price of the property securing the 

11 residential mortgage; 

12 (B) in the case of a first lien residential 

13 mortgage loan with an initial loan to value ratio 

14 that is more than 80 percent and not more 

15 than 95 percent, includes a requirement for 

16 credit enhancements, as defined by the Federal 

17 banking agencies, until the loan to value ratio 

18 of the residential mortgage loan amortizes to a 

19 value that is less than 80 percent of the pur20 chase price; 

21 (C) uses a method for determining the 

22 ability of the mortgagor to repay the residential 

23 mortgage that is based on factors including— 

24 (i) all terms of the residential mort25 gage, including principal payments that 


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1 fully amortize the balance of the residential 

2 mortgage over the term of the residential 

3 mortgage; and 

4 (ii) the debt to income ratio of the 

5 mortgagor; and 

6 (D) any other specific standards that the 

7 Federal banking agencies jointly determine are 

8 appropriate to ensure prudent underwriting of 

9 residential mortgages. 

10 (b) UPDATES TO STANDARDS.—The Federal banking 

11 agencies, in consultation with the FHFA and the Sec12 retary of Housing and Urban Development— 

13 (1) shall review the standards established under 

14 this section not less frequently than every 5 years; 

15 and 

16 (2) based on the review under paragraph (1), 

17 may revise the standards established under this sec18 tion, as the Federal banking agencies, in consulta19 tion with the FHFA and the Secretary of Housing 

20 and Urban Development, determine to be necessary. 

21 (c) COMPLIANCE.—It shall be a violation of Federal 

22 law— 

23 (1) for any mortgage loan originator to fail to 

24 comply with the minimum standards for mortgage 


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1 underwriting established under subsection (a) in 

2 originating a residential mortgage loan; 

3 (2) for any company to maintain an extension 

4 of credit on a revolving basis to any person to fund 

5 a residential mortgage loan, unless the company rea6 sonably determines that the residential mortgage 

7 loan funded by such credit was subject to under8 writing standards no less stringent than the min9 imum standards for mortgage underwriting estab10 lished under subsection (a); or 

11 (3) for any company to purchase, fund by as12 signment, or guarantee a residential mortgage loan, 

13 unless the company reasonably determines that the 

14 residential mortgage loan was subject to under15 writing standards no less stringent than the min16 imum standards for mortgage underwriting estab17 lished under subsection (a). 

18 (d) IMPLEMENTATION.— 

19 (1) REGULATIONS REQUIRED.—The Federal 

20 banking agencies, in consultation with the FHFA, 

21 shall issue regulations to implement subsections (a) 

22 and (c), which shall take effect not later than 270 

23 days after the date of enactment of this Act. 

24 (2) REPORT REQUIRED.—If the Federal bank25 ing agencies have not issued final regulations under 


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1 subsections (a) and (c) before the date that is 270 

2 days after the date of enactment of this Act, the 

3 Federal banking agencies shall jointly submit to the 

4 Committee on Banking, Housing, and Urban Affairs 

5 of the Senate and the Committee on Financial Serv6 ices of the House of Representatives a report that— 

7 (A) explains why final regulations have not 

8 been issued under subsections (a) and (c); and 

9 (B) provides a timeline for the issuance of 

10 final regulations under subsections (a) and (c). 

11 (e) ENFORCEMENT.—Compliance with the rules 

12 issued under this section shall be enforced by— 

13 (1) the primary financial regulatory agency as 

14 that term is defined under section 2 of the Dodd15 Frank Wall Street Reform and Consumer Protection 

16 Act (12 U.S.C. 5301) of an entity, with respect to 

17 an entity subject to the jurisdiction of a primary fi18 nancial regulatory agency, in accordance with the 

19 statutes governing the jurisdiction of the primary fi20 nancial regulatory agency over the entity, and as if 

21 the action of the primary financial regulatory agency 

22 were taken under such statutes; and 

23 (2) the Bureau of Consumer Financial Protec24 tion, with respect to a company that is not subject 


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1 to the jurisdiction of a primary financial regulatory 

2 agency. 

3 (f) EXEMPTIONS FOR CERTAIN NONPROFIT MORT4 GAGE LOAN ORIGINATORS.— 

5 (1) IN GENERAL.—Not later than 180 days 

6 after the date of enactment of this Act, the Federal 

7 banking agencies, in consultation with the Secretary 

8 of Housing and Urban Development and the Sec9 retary of the Treasury, may jointly issue rules to ex10 empt from the requirements under subsection (a)(2), 

11 mortgage loan originators that are exempt from tax12 ation under section 501(c)(3) of the Internal Rev13 enue Code of 1986. 

14 (2) DETERMINING FACTORS.—The Federal 

15 banking agencies shall ensure that— 

16 (A) the lending activities of a mortgage 

17 loan originator that receives an exemption 

18 under this subsection do not threaten the safety 

19 and soundness of the banking system of the 

20 United States; and 

21 (B) a mortgage loan originator that re22 ceives an exemption under this subsection— 

23 (i) is not compensated based on the 

24 number or value of residential mortgage 


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1 loan applications accepted, offered, or ne2 gotiated by the mortgage loan originator; 

3 (ii) does not offer residential mort4 gage loans that have an interest rate 

5 greater than zero percent; 

6 (iii) does not gain a monetary profit 

7 from any residential mortgage product or 

8 service provided; 

9 (iv) has the primary purpose of serv10 ing low income housing needs; 

11 (v) has not been specifically prohib12 ited, by statute, from receiving Federal 

13 funding; and 

14 (vi) meets any other requirements 

15 that the Federal banking agencies jointly 

16 determine are appropriate for ensuring 

17 that a mortgage loan originator that re18 ceives an exemption under this subsection 

19 does not threaten the safety and soundness 

20 of the banking system of the United 

21 States. 

22 (3) REPORTS REQUIRED.—Before the issuance 

23 of final rules under subsection (a), and annually 

24 thereafter, the Federal banking agencies shall jointly 

25 submit to the Committee on Banking, Housing, and 


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1 Urban Affairs of the Senate and the Committee on 

2 Financial Services of the House of Representatives 

3 a report that— 

4 (A) identifies the mortgage loan origina5 tors that receive an exemption under this sub6 section; and 

7 (B) for each mortgage loan originator 

8 identified under subparagraph (A), explains the 

9 rationale for providing an exemption. 

10 (4) UPDATES TO EXEMPTIONS.—The Federal 

11 banking agencies, in consultation with the Secretary 

12 of Housing and Urban Development and the Sec13 retary of the Treasury— 

14 (A) shall review the exemptions established 

15 under this subsection, not less frequently than 

16 every 2 years; and 

17 (B) based on the review under subpara18 graph (A), may revise the standards established 

19 under this subsection, as the Federal banking 

20 agencies, in consultation with the Secretary of 

21 Housing and Urban Development and the Sec22 retary of the Treasury, determine to be nec23 essary. 

24 (g) RULES OF CONSTRUCTION.—Nothing in this sec25 tion may be construed to permit— 


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1 (1) the enterprises to make or guarantee a resi2 dential mortgage loan that does not meet the min3 imum underwriting standards established under this 

4 section; or 

5 (2) the Federal banking agencies to issue an ex6 emption under subsection (f) that is not on a case7 by-case basis. 

8 (h) DEFINITIONS.—In this section, the following defi9 nitions shall apply: 

10 (1) COMPANY.—The term ‘‘company’’— 

11 (A) has the same meaning as in section 

12 2(b) of the Bank Holding Company Act of 

13 1956 (12 U.S.C. 1841(b)); and 

14 (B) includes a sole proprietorship. 

15 (2) MORTGAGE LOAN ORIGINATOR.—The term 

16 ‘‘mortgage loan originator’’ means any company that 

17 takes residential mortgage loan applications and of18 fers or negotiates terms of residential mortgage 

19 loans. 

20 (3) RESIDENTIAL MORTGAGE LOAN.—The term 

21 ‘‘residential mortgage loan’’— 

22 (A) means any extension of credit pri23 marily for personal, family, or household use 

24 that is secured by a mortgage, deed of trust, or 

25 other equivalent security interest in a dwelling 


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1 or residential real estate upon which is con2 structed or intended to be constructed a dwell3 ing; and 

4 (B) does not include a mortgage loan for 

5 which mortgage insurance is provided by the 

6 Department of Veterans Affairs or the Rural 

7 Housing Administration. 

8 (4) EXTENSION OF CREDIT; DWELLING.—The 

9 terms ‘‘extension of credit’’ and ‘‘dwelling’’ have the 

10 same meanings as in section 103 of the Truth in 

11 Lending Act (15 U.S.C. 1602). 

12 (i) REPEAL OF CREDIT RISK RETENTION AND QRM 

13 RULES.—Section 15G of the Securities Exchange Act of 

14 1934 (15 U.S.C. 78o–11) is repealed, and any rule or reg15 ulation promulgated under that section shall have no force 

16 or effect, effective on the date of enactment of this Act. 

17 SEC. 8. RESIDENTIAL MORTGAGE SERVICING STANDARDS. 

18 (a) UNIFORM PSA.— 

19 (1) DEVELOPMENT.— 

20 (A) IN GENERAL.—The Director, in con21 sultation with the Secretary of the Treasury 

22 and the Board of Governors of the Federal Re23 serve System, shall, not later than 1 year after 

24 the date of enactment of this Act, develop a 

25 uniform pooling and servicing agreement (in 


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1 this section referred to as a ‘‘uniform PSA’’). 

2 The Director shall work with industry groups, 

3 including servicers, originators, and mortgage 

4 investors to develop the uniform PSA. 

5 (B) CRITERIA.—The uniform PSA shall— 

6 (i) address all issues relating to the 

7 pool trustee, and shall be based on pooling 

8 and servicing agreements in use by the en9 terprises on the date of enactment of this 

10 Act; and 

11 (ii) create uniform loss mitigation 

12 standards, including standards for a single 

13 point of contact for troubled borrowers, an 

14 industry wide net-present-value model for 

15 determining when to conduct a loan modi16 fication rather than foreclosure, and na17 tional standards for the foreclosure proc18 ess. 

19 (2) EFFECT OF UNIFORM PSA.—Beginning 1 

20 year after the date of enactment of this Act, all 

21 mortgage backed securities issued by national or 

22 State chartered banks in the United States will be 

23 affected in accordance with the uniform PSA. 

24 (b) MERS2.—The Director shall establish, by rule, 

25 a Mortgage Electronic Registration System (in this section 


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1 referred to as ‘‘MERS2’’) based on the Mortgage Elec2 tronic Registration System in use on the date of enact3 ment of this Act. MERS2 shall incorporate a single na4 tional database for all mortgage title transfers, to be main5 tained and operated by FHFA. The rules of the Director 

6 shall ensure that property title is transferred in accord7 ance with all applicable provisions of law. All mortgage 

8 transfers shall take place according to national standards 

9 and shall be recorded in the MERS2 system. 

10 (c) UNIFORM REGULATORY PRACTICES.—The Comp11 troller of the Currency, Chairperson of the Federal De12 posit Insurance Corporation, Director, Chairman of the 

13 Board of Governors of the Federal Reserve System, and 

14 Director of the Bureau of Consumer Financial Protection 

15 shall, jointly, under the direction of the Director, develop 

16 uniform regulatory practices for the mortgage market. 

Æ 


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