```

[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1217 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                S. 1217

  To provide secondary mortgage market reform, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 25, 2013

   Mr. Corker (for himself, Mr. Warner, Mr. Johanns, Mr. Tester, Mr. 
    Heller, Ms. Heitkamp, Mr. Moran, and Mrs. Hagan) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
  To provide secondary mortgage market reform, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Housing Finance 
Reform and Taxpayer Protection Act of 2013''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
            TITLE I--FEDERAL MORTGAGE INSURANCE CORPORATION

Sec. 101. Establishment.
Sec. 102. Director.
Sec. 103. Board of Directors.
Sec. 104. Office of the Inspector General.
Sec. 105. Staff, experts, and consultants.
Sec. 106. Reports; testimony; audits.
Sec. 107. Initial funding.
     TITLE II--DUTIES, RESPONSIBILITIES, AND STRUCTURE OF THE FMIC

                   Subtitle A--Duties and Authorities

Sec. 201. Duties and responsibilities of the FMIC.
Sec. 202. Standard form credit risk-sharing mechanisms, products, 
                            structures, contracts, or other security 
                            agreements.
Sec. 203. Mortgage Insurance Fund.
Sec. 204. Insurance.
Sec. 205. Authority to protect taxpayers in unusual and exigent market 
                            conditions.
Sec. 206. General powers.
Sec. 207. Exemptions.
              Subtitle B--Oversight of Market Participants

Sec. 211. Approval of private mortgage insurers.
Sec. 212. Approval of servicers.
Sec. 213. Approval of issuers.
Sec. 214. Approval of bond guarantors.
Sec. 215. Authority to establish FMIC Mutual Securitization Company.
Sec. 216. Additional authority relating to oversight of market 
                            participants.
Sec. 217. Civil money penalties.
Sec. 218. Protection of privilege and other matters relating to 
                            disclosures by market participants.
             Subtitle C--Transparency in Market Operations

Sec. 221. Review of loan documents; disclosures.
Sec. 222. Investor immunity.
Sec. 223. Uniform securitization agreements.
Sec. 224. Uniform mortgage database.
Sec. 225. Electronic registration of eligible mortgages.
                       Subtitle D--FMIC Structure

Sec. 231. Office of Underwriting.
Sec. 232. Office of Securitization.
Sec. 233. Office of Federal Home Loan Bank Supervision.
  TITLE III--TRANSFER OF POWERS, PERSONNEL, AND PROPERTY TO FMIC FROM 
                                  FHFA

Sec. 301. Powers and duties transferred.
Sec. 302. Transfer and rights of employees of the FHFA.
Sec. 303. Abolishment of FHFA.
Sec. 304. Transfer of property and facilities.
Sec. 305. Technical and conforming amendments.
 TITLE IV--IMPROVING TRANSPARENCY, ACCOUNTABILITY, AND EFFICACY WITHIN 
                           AFFORDABLE HOUSING

Sec. 401. Affordable housing allocations.
Sec. 402. Housing Trust Fund.
Sec. 403. Capital Magnet Fund.
Sec. 404. Additional taxpayer protections.
            TITLE V--WIND DOWN OF FANNIE MAE AND FREDDIE MAC

Sec. 501. Repeal of GSE charters.
Sec. 502. Wind down.
Sec. 503. Aligning purpose of conservatorship with FMIC.
Sec. 504. Conforming loan limits.
Sec. 505. Portfolio reduction.
Sec. 506. Repeal of mandatory housing goals.
        TITLE VI--IMPROVEMENTS TO FUNCTIONING OF HOUSING MARKET

Sec. 601. Continuation of multifamily business of the enterprises.
Sec. 602. Multiple lender issues.
Sec. 603. GAO report on full privatization of secondary mortgage 
                            market.
                     TITLE VII--GENERAL PROVISIONS

Sec. 701. Authority to issue regulations.
Sec. 702. Fair value accounting.
Sec. 703. Rule of construction.
Sec. 704. Severability.

SEC. 2. DEFINITIONS.

    As used in this Act, the following definitions shall apply:
            (1) Approved bond guarantor.--The term ``approved bond 
        guarantor'' means any entity that provides credit enhancement 
        that is approved by the Corporation pursuant to section 214 to 
        guarantee the timely payment of principal and interest on 
        securities collateralized by eligible mortgages and insured by 
        the Corporation.
            (2) Approved issuer.--The term ``approved issuer'' means an 
        issuer that is approved by the Corporation pursuant to section 
        213--
                    (A) to issue covered securities; and
                    (B) to purchase insurance offered by the 
                Corporation pursuant to title II on a covered security 
                for which first loss credit enhancement has been 
                secured.
            (3) Approved private mortgage insurer.--The term ``approved 
        private mortgage insurer'' means an insurer that is approved by 
        the Corporation pursuant to section 211 to provide private 
        mortgage insurance on eligible mortgages.
            (4) Approved servicer.--The term ``approved servicer'' 
        means a servicer that is approved by the Corporation pursuant 
        to section 212 to administer eligible mortgages.
            (5) Area.--The term ``area''--
                    (A) means a metropolitan statistical area as 
                established by the Office of Management and Budget; and
                    (B) for purposes of paragraph (11)(A)(ii), the 
                median 1-family house price for an area shall be equal 
                to the median 1-family house price of the county within 
                the area that has the highest such median price.
            (6) Board; board of directors.--The terms ``Board'' and 
        ``Board of Directors'' mean the Board of Directors of the 
        Federal Mortgage Insurance Corporation.
            (7) Charter.--The term ``charter'' means--
                    (A) with respect to the Federal National Mortgage 
                Association, the Federal National Mortgage Association 
                Charter Act (12 U.S.C. 1716 et seq.); and
                    (B) with respect to the Federal Home Loan Mortgage 
                Corporation, the Federal Home Loan Mortgage Corporation 
                Act (12 U.S.C. 1451 et seq.).
            (8) Corporation.--The term ``Corporation'' means the 
        Federal Mortgage Insurance Corporation established under title 
        I.
            (9) Covered security.--The term ``covered security'' means 
        a mortgage-backed security--
                    (A) collateralized by eligible mortgages;
                    (B) which is issued subject to a standard form 
                credit-risk sharing mechanism, product, structure, 
                contract, or other securitization agreement developed 
                by the Corporation pursuant to title II; and
                    (C) which is eligible for insurance by the 
                Corporation pursuant to title II, which insurance is 
                purchased by an approved issuer who issues covered 
                securities.
            (10) Director.--The term ``Director'' means the Director of 
        the Federal Mortgage Insurance Corporation, unless the context 
        otherwise requires.
            (11) Eligible mortgage.--The term ``eligible mortgage'' 
        means a mortgage--
                    (A) that is a residential real estate loan secured 
                by a property with 1 to 4 single family units that has 
                been originated in compliance with the provisions of 
                section 1026 of title 12 of the Code of Federal 
                Regulations, as promulgated by the Bureau of Consumer 
                Financial Protection pursuant to section 129C(b) of the 
                Truth in Lending Act (15 U.S.C. 1639c(b)) (commonly 
                referred to as the ``Ability-to-Repay and Qualified 
                Mortgage Rule'');
                    (B) has a maximum original principal obligation 
                amount that does not exceed the conforming loan 
                limitation determined under section 504;
                    (C) the outstanding principal balance of which at 
                the time of purchase of insurance available under title 
                II--
                            (i) is less than 80 percent of the value of 
                        the property securing the mortgage;
                            (ii) is not less than 80 percent but not 
                        more than 85 percent of the value of the 
                        property securing the mortgage, provided that 
                        not less than 12 percent of the unpaid 
                        principal balance of the mortgage, accounting 
                        for any downpayment required under subparagraph 
                        (D), is insured by--
                                    (I) an approved private mortgage 
                                insurer; or
                                    (II) lender recourse or other 
                                credit enhancement that--
                                            (aa) meets standards 
                                        comparable to the standards 
                                        required of private mortgage 
                                        insurers under section 211; and
                                            (bb) is approved by the 
                                        Corporation;
                            (iii) is not less than 85 percent but not 
                        more than 90 percent of the value of the 
                        property securing the mortgage, provided that 
                        not less than 25 percent of the unpaid 
                        principal balance of the mortgage, accounting 
                        for any downpayment required under subparagraph 
                        (D), is insured by--
                                    (I) an approved private mortgage 
                                insurer; or
                                    (II) lender recourse or other 
                                credit enhancement that--
                                            (aa) meets standards 
                                        comparable to the standards 
                                        required of private mortgage 
                                        insurers under section 211; and
                                            (bb) is approved by the 
                                        Corporation; or
                            (iv) is not less than 90 percent but not 
                        more than 95 percent of the value of the 
                        property securing the mortgage, provided that 
                        not less than 30 percent of the unpaid 
                        principal balance of the mortgage, accounting 
                        for any downpayment required under subparagraph 
                        (D), is insured by--
                                    (I) an approved private mortgage 
                                insurer; or
                                    (II) lender recourse or other 
                                credit enhancement that--
                                            (aa) meets standards 
                                        comparable to the standards 
                                        required of private mortgage 
                                        insurers under section 211; and
                                            (bb) is approved by the 
                                        Corporation;
                    (D) having a downpayment which shall be equal to 
                not less than 5 percent of purchase price of the 
                property securing the mortgage;
                    (E) that is insured by an approved State licensed 
                title insurance company;
                    (F) that contains such terms and provisions with 
                respect to insurance, property maintenance, repairs, 
                alterations, payment of taxes, default, reserves, 
                delinquency charges, foreclosure proceedings, 
                anticipation of maturity, additional and secondary 
                liens, and other matters, including matters that set 
                forth terms and provisions for establishing escrow 
                accounts, performing financial assessments, or limiting 
                the amount of any payment made available under the 
                mortgage as the Corporation may prescribe; and
                    (G) that contains such other terms or 
                characteristics as the Corporation, in consultation 
                with the Bureau of Consumer Financial Protection, may 
                determine necessary or appropriate.
            (12) Enterprise.--The term ``enterprise'' means--
                    (A) the Federal National Mortgage Association and 
                any affiliate thereof; and
                    (B) the Federal Home Loan Mortgage Corporation and 
                any affiliate thereof.
            (13) Federal banking agencies.--The term--
                    (A) ``Federal banking agency'' means, individually, 
                the Board of Governors of the Federal Reserve System, 
                the Office of the Comptroller of the Currency, the 
                Federal Deposit Insurance Corporation, the Bureau of 
                Consumer Financial Protection, the National Credit 
                Union Administration, the Securities and Exchange 
                Commission, the Commodities Futures Trading Commission, 
                the Federal Housing Finance Agency, and the Secretary 
                of the Treasury; and
                    (B) ``Federal banking agencies'' means all of the 
                agencies referred to in subparagraph (A), collectively.
            (14) Federal home loan bank.--The term ``Federal Home Loan 
        Bank'' means a bank established under the authority of the 
        Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.).
            (15) Federal home loan bank system.--The term ``Federal 
        Home Loan Bank System'' means the Federal Home Loan Banks and 
        the Office of Finance and any authorized subsidiary of one or 
        more Federal Home Loan Banks.
            (16) FMIC certification date.--The term ``FMIC 
        certification date'' means the date on which the Board of 
        Directors certifies that the Corporation is operational and 
        able to perform the insurance functions for covered securities 
        as provided in this Act, which date shall be not later than 5 
        years after the date of enactment of this Act.
            (17) Insured depository institution.--The term ``insured 
        depository institution'' means--
                    (A) an insured depository institution, as defined 
                under section 3 of the Federal Deposit Insurance Act 
                (12 U.S.C. 1813); and
                    (B) a credit union that meets the definition of 
                ``depository institution'' as that term is defined 
                under section 19(b) of the Federal Reserve Act (12 
                U.S.C. 461).
            (18) Senior preferred stock purchase agreement defined.--
        The term ``Senior Preferred Stock Purchase Agreement'' means--
                    (A) the Amended and Restated Senior Preferred Stock 
                Purchase Agreement, dated September 26, 2008, as such 
                Agreement has been amended on May 6, 2009, December 24, 
                2009, and August 17, 2012, respectively, and as such 
                Agreement may be further amended and restated, entered 
                into between the Department of the Treasury and each 
                enterprise, as applicable; and
                    (B) any provision of any certificate in connection 
                with such Agreement creating or designating the terms, 
                powers, preferences, privileges, limitations, or any 
                other conditions of the Variable Liquidation Preference 
                Senior Preferred Stock of an enterprise issued or sold 
                pursuant to such Agreement.
            (19) Transfer date.--The term ``transfer date'' means the 
        date that is 1 year after the date of enactment of this Act.

            TITLE I--FEDERAL MORTGAGE INSURANCE CORPORATION

SEC. 101. ESTABLISHMENT.

    (a) Establishment.--There is hereby established the Federal 
Mortgage Insurance Corporation which shall have the powers hereinafter 
granted.
    (b) Purpose.--The purpose of the Corporation shall be to--
            (1) provide liquidity, transparency, and access to mortgage 
        credit by supporting a robust secondary mortgage market and the 
        production of residential mortgage-backed securities; and
            (2) protect the taxpayer from having to absorb losses 
        incurred in the secondary mortgage market during periods of 
        economic stress.
    (c) Federal Status.--The Corporation shall be an independent agency 
of the Federal Government.
    (d) Succession.--The Corporation shall have succession until 
dissolved by Act of Congress.
    (e) Principal Office.--The Corporation shall maintain its principal 
office in the District of Columbia and shall be deemed, for purposes of 
venue in civil actions, to be a resident thereof.
    (f) Authority To Establish Other Offices.--The Corporation may 
establish such other offices in such other place or places as the 
Corporation may deem necessary or appropriate in the conduct of its 
business.
    (g) Prohibition.--The Corporation shall not engage in mortgage 
origination.

SEC. 102. DIRECTOR.

    (a) Establishment of Position.--There is established the position 
of the Director of the Corporation, who shall be the head of the 
Corporation.
    (b) Appointment; Term.--
            (1) Appointment.--The Director shall be appointed by the 
        President, by and with the advice and consent of the Senate, 
        from among individuals who--
                    (A) are citizens of the United States; and
                    (B) have a demonstrated technical, academic, or 
                professional understanding of, and practical, 
                disciplinary, vocational, or regulatory experience 
                working in, the mortgage securities markets and housing 
                finance.
            (2) Term.--The Director shall be appointed for a term of 5 
        years, unless removed before the end of such term for cause by 
        the President.
            (3) Vacancy.--
                    (A) In general.--A vacancy in the position of 
                Director that occurs before the expiration of the term 
                for which a Director was appointed shall be filled in 
                the manner established under paragraph (1), and the 
                Director appointed to fill such vacancy shall be 
                appointed only for the remainder of such term.
                    (B) Acting director.--
                            (i) Designation by the president.--
                                    (I) Eligible individuals.--If the 
                                Senate has not confirmed a Director, 
                                the President may designate either the 
                                individual nominated, but not yet 
                                confirmed, for the position of Director 
                                or a member of the Board of Directors 
                                to serve as the Acting Director, and 
                                such Acting Director shall have all the 
                                rights, duties, powers, and 
                                responsibilities of the Director, until 
                                such time as a Director is confirmed by 
                                the Senate.
                                    (II) Limitation.--No individual may 
                                serve concurrently as the Acting 
                                Director of the Corporation and the 
                                Director of the Federal Housing Finance 
                                Agency.
            (4) Service after end of term.--An individual may serve as 
        the Director after the expiration of the term for which 
        appointed until a successor has been appointed.
            (5) Compensation.--The Director shall be compensated at the 
        rate prescribed for level II of the Executive Schedule under 
        section 5313 of title 5, United States Code.
            (6) Rules of construction.--No individual--
                    (A) may serve concurrently as the Director of the 
                Corporation and the Director of the Federal Housing 
                Finance Agency; and
                    (B) that has, at any time prior to, on, or after 
                the date of enactment of this Act, served as the 
                Director of the Federal Housing Finance Agency may 
                serve as the Director of the Corporation.
    (c) Membership on FSOC.--The Dodd-Frank Wall Street Reform and 
Consumer Protection Act is amended--
            (1) in section 2, by amending paragraph (12)(E) to read as 
        follows:
                    ``(E) the Federal Mortgage Insurance Corporation, 
                with respect to--
                            ``(i) the Mortgage Insurance Fund 
                        established under title II of the Housing 
                        Finance Reform and Taxpayer Protection Act of 
                        2013; and
                            ``(ii) the Federal Home Loan Banks or the 
                        Federal Home Loan Bank System.''; and
            (2) in section 111(b)(1)(H), by striking ``Director of the 
        Federal Housing Finance Agency'' and inserting ``Chairperson of 
        the Federal Mortgage Insurance Corporation''.

SEC. 103. BOARD OF DIRECTORS.

    (a) Board of Directors.--
            (1) Voting members.--The management of the Corporation 
        shall be vested in a Board of Directors consisting of 5 voting 
        members--
                    (A) 1 of whom shall be the Director, who shall 
                serve as Chairperson of the Board; and
                    (B) 4 of whom shall be appointed by the President, 
                by and with the advice and consent of the Senate, from 
                among individuals who are citizens of the United 
                States--
                            (i) 1 of whom shall have demonstrated 
                        technical, academic, or professional 
                        understanding of, and practical, disciplinary, 
                        vocational, or regulatory experience working 
                        in, the field of asset management;
                            (ii) 1 of whom shall have demonstrated 
                        technical, academic, or professional 
                        understanding of, and practical, disciplinary, 
                        vocational, or regulatory experience working 
                        in, mortgage insurance markets;
                            (iii) 1 of whom shall have a demonstrated 
                        technical, academic, or professional 
                        understanding of, and practical, disciplinary, 
                        vocational, or regulatory experience working 
                        with, lenders having less than $10,000,000,000 
                        in total assets; and
                            (iv) 1 of whom shall have a demonstrated 
                        technical, academic, or professional 
                        understanding of, and practical, disciplinary, 
                        vocational, or regulatory experience working 
                        with, multifamily housing development.
            (2) Non-voting member.--The President shall appoint the 
        Director of the Federal Housing Finance Agency as an additional 
        non-voting member of the Board of Directors. The Director of 
        the Federal Housing Finance Agency shall serve as non-voting 
        member of the Board of Directors until such time as that 
        position is abolished pursuant to title III.
            (3) Independence.--
                    (A) In general.--Each voting member of the Board of 
                Directors shall be independent and neutral and maintain 
                a fiduciary relationship to the Corporation in 
                performing his or her duties.
                    (B) Independence determination.--In order to be 
                considered independent for purposes of this paragraph, 
                a voting member of the Board of Directors--
                            (i) may not, other than in his or her 
                        capacity as a member of the Board of Directors 
                        or any committee thereof--
                                    (I) accept any consulting, 
                                advisory, or other compensatory fee 
                                from the Corporation; or
                                    (II) be a person associated with 
                                the Corporation or with any affiliated 
                                company thereof; and
                            (ii) shall be disqualified from any 
                        deliberation involving any transaction of the 
                        Corporation in which the member has a financial 
                        interest in the outcome of the transaction.
            (4) Rule of construction.--No individual that has, at any 
        time prior to, on, or after the date of enactment of this Act, 
        served as the Director or Acting Director of the Federal 
        Housing Finance Agency may serve as a voting member of the 
        Board of Directors.
    (b) Administration.--Except as otherwise may provided in this Act, 
the Board of Directors shall administer the affairs of the Corporation 
fairly and impartially and without discrimination.
    (c) Consultation.--The Board of Directors may, in carrying out any 
duty, responsibility, requirement, or action authorized under this Act, 
consult with the Federal banking agencies or any individual Federal 
banking agency, as the Board determines necessary and appropriate.
    (d) Terms.--
            (1) Appointed members.--Each appointed voting member shall 
        be appointed for a term of 5 years and shall serve on a full-
        time basis.
            (2) Interim appointments.--Any voting member appointed to 
        fill a vacancy occurring before the expiration of the term for 
        which such member's predecessor was appointed shall be 
        appointed only for the remainder of such term.
            (3) Continuation of service.--The Chairperson and each 
        appointed voting member may continue to serve after the 
        expiration of the term of office to which such member was 
        appointed until a successor has been appointed and qualified.
    (e) Vacancy.--A vacancy in the voting membership of the Board of 
Directors shall not affect the powers of the Board, and shall be filled 
in the manner in which the original appointment was made.
    (f) Voting.--A majority vote of all voting members of the Board of 
Directors is necessary to resolve all voting issues of the Corporation.
    (g) Meetings.--The Board of Directors shall meet in accordance with 
the bylaws of the Corporation--
            (1) at the call of the Chairperson; and
            (2) not less frequently than once each month.
    (h) Quorum.--Three voting members of the Board of Directors then in 
office shall constitute a quorum.
    (i) Bylaws.--A majority of the voting members of the Board of 
Directors may amend the bylaws of the Corporation.
    (j) Attendance.--Members of the Board of Directors may attend 
meetings of the Corporation and vote in person, via telephone 
conference, or via video conference.
    (k) Ineligibility for Other Offices During Service.--
            (1) In general.--No voting member of the Board of Directors 
        may during the time such member is in office--
                    (A) be an officer or director of any insured 
                depository institution, depository institution holding 
                company, Federal Reserve bank, Federal home loan bank, 
                approved servicer, approved private mortgage insurer, 
                institution that originates eligible mortgages, or 
                institution that issues a covered security; or
                    (B) hold stock or a controlling interest in any 
                insured depository institution or depository 
                institution holding company, approved servicer, 
                approved private mortgage insurer, institution that 
                originates eligible mortgages, or institution that 
                issues a covered security.
            (2) Certification.--Upon taking office, each voting member 
        of the Board of Directors shall certify under oath that such 
        member has complied with this subsection and such certification 
        shall be filed with the secretary of the Board of Directors.
    (l) Status of Employees.--
            (1) In general.--A director, member, officer, or employee 
        of the Corporation has no liability under the Securities Act of 
        1933 (15 U.S.C. 77a et seq.) with respect to any claim arising 
        out of or resulting from any act or omission by such person 
        within the scope of such person's employment in connection with 
        any transaction involving the Corporation. This subsection 
        shall not be construed to limit personal liability for criminal 
        acts or omissions, willful or malicious misconduct, acts or 
        omissions for private gain, or any other acts or omissions 
        outside the scope of such person's employment.
            (2) Effect on other law.--
                    (A) In general.--This subsection does not affect--
                            (i) any other immunities and protections 
                        that may be available to such person under 
                        applicable law with respect to such 
                        transactions; or
                            (ii) any other right or remedy against the 
                        Corporation, against the United States under 
                        applicable law, or against any person other 
                        than a person described in paragraph (1) 
                        participating in such transactions.
                    (B) Rule of construction.--This subsection shall 
                not be construed to limit or alter in any way the 
                immunities that are available under applicable law for 
                Federal officials and employees not described in this 
                subsection.

SEC. 104. OFFICE OF THE INSPECTOR GENERAL.

    (a) Office of Inspector General.--
            (1) In general.--There is established the Office of the 
        Inspector General of the Federal Mortgage Insurance 
        Corporation. The head of the Office of the Inspector General of 
        the Federal Mortgage Insurance Corporation is the Inspector 
        General of the Federal Mortgage Insurance Corporation (in this 
        section referred to as the ``Inspector General''), who shall be 
        appointed by the President, by and with the advice and consent 
        of the Senate.
            (2) Additional responsibilities.--In addition to carrying 
        out the requirements established under the Inspector General 
        Act of 1978 (5 U.S.C. App.), the Inspector General shall--
                    (A) conduct, supervise, and coordinate audits and 
                investigations relating to the programs and operations 
                of the Corporation--
                            (i) to ensure that the first loss position 
                        that the Corporation requires of private market 
                        holders of covered securities insured under 
                        this Act is adequate to cover losses that might 
                        be incurred as a result of adverse economic 
                        conditions, wherein such conditions are 
                        generally consistent with the economic 
                        conditions, including national home price 
                        declines, observed in the United States during 
                        moderate to severe recessions experienced 
                        during the last 100 years; and
                            (ii) with respect to the--
                                    (I) oversight and supervision of 
                                the Federal Home Loan Banks and the 
                                Federal Home Loan Bank System; and
                                    (II) the contracting practices and 
                                procedures of the Corporation; and
                    (B) recommend policies for the purpose of 
                addressing any deficiencies, inefficiencies, gaps, or 
                failures in the administration of such programs and 
                operations.
            (3) Inspector general report; report of independent 
        actuary.--Beginning 1 year after the FMIC certification date, 
        and annually thereafter, the Inspector General and an 
        independent actuary contracted for by the Director shall each 
        conduct an examination and issue a separate report regarding--
                    (A) the adequacy of insurance fees charged by the 
                Board of Directors under title II; and
                    (B) the adequacy of the Mortgage Insurance Fund 
                established under title II.
    (b) Amendments to Inspector General Act of 1978.--Section 11 of the 
Inspector General Act of 1978 (5 U.S.C. App.) is amended--
            (1) in paragraph (1), by inserting ``Chairperson of the 
        Federal Mortgage Insurance Corporation;'' after ``the Director 
        of the Federal Housing Finance Agency;''; and
            (2) in paragraph (2), by inserting ``the Federal Mortgage 
        Insurance Corporation,'' after ``the Federal Housing Finance 
        Agency,''.
    (c) Compensation.--The annual rate of basic pay of the Inspector 
General shall be the annual rate of basic pay provided for positions at 
level III of the Executive Schedule under section 5314 of title 5, 
United States Code.

SEC. 105. STAFF, EXPERTS, AND CONSULTANTS.

    (a) Compensation.--
            (1) In general.--The Board of Directors may appoint and fix 
        the compensation of such officers, attorneys, economists, 
        examiners, and other employees as may be necessary for carrying 
        out the functions of the Corporation.
            (2) Rates of pay.--Rates of basic pay and the total amount 
        of compensation and benefits for all employees of the 
        Corporation may be--
                    (A) set and adjusted by the Board of Directors 
                without regard to the provisions of chapter 51 or 
                subchapter III of chapter 53 of title 5, United States 
                Code; and
                    (B) reasonably increased, notwithstanding any 
                limitation set forth in paragraph (3), if the Board of 
                Directors determines such increases are necessary to 
                attract and hire qualified employees.
            (3) Parity.--The Board of Directors may provide additional 
        compensation and benefits to employees of the Corporation, of 
        the same type of compensation or benefits that are then being 
        provided by any agency referred to under section 1206 of the 
        Financial Institutions Reform, Recovery, and Enforcement Act of 
        1989 (12 U.S.C. 1833b) or, if not then being provided, could be 
        provided by such an agency under applicable provisions of law, 
        rule, or regulation. In setting and adjusting the total amount 
        of compensation and benefits for employees, the Board of 
        Directors shall consult with and seek to maintain comparability 
        with the agencies referred to under section 1206 of the 
        Financial Institutions Reform, Recovery, and Enforcement Act of 
        1989 (12 U.S.C. 1833b).
    (b) Detail of Government Employees.--Upon the request of the Board 
of Directors, any Federal Government employee may be detailed to the 
Corporation without reimbursement, and such detail shall be without 
interruption or loss of civil service status or privilege.
    (c) Experts and Consultants.--The Board of Directors may procure 
the services of experts and consultants as the Board considers 
necessary or appropriate.
    (d) Technical and Professional Advisory Committees.--The Board of 
Directors may appoint such special advisory, technical, or professional 
committees as may be useful in carrying out the functions of the 
Corporation.

SEC. 106. REPORTS; TESTIMONY; AUDITS.

    (a) Reports.--
            (1) In general.--The Corporation shall submit, on an annual 
        basis, to the Committee on Banking, Housing, and Urban Affairs 
        of the Senate and the Committee on Financial Services of the 
        House of Representatives a written report of its operations, 
        activities, budget, receipts, and expenditures for the 
        preceding 12-month period.
            (2) Contents of report.--The report required under 
        subsection (a) shall include an analysis of--
                    (A) with respect to the Mortgage Insurance Fund 
                established under section 203--
                            (i) the current financial condition of the 
                        Mortgage Insurance Fund;
                            (ii) the exposure of the Mortgage Insurance 
                        Fund to changes in those economic factors most 
                        likely to affect the condition of that fund;
                            (iii) a current estimate of the resources 
                        needed for the Mortgage Insurance Fund to 
                        achieve the purposes of this Act; and
                            (iv) any findings, conclusions, and 
                        recommendations for legislative and 
                        administrative actions considered appropriate 
                        to the future activities of the Corporation;
                    (B) the secondary mortgage market, the housing 
                market, and the economy, including through use of 
                stress tests, and how such analysis was used to 
                determine and set the reserve ratio for the Mortgage 
                Insurance Fund for the preceding 12-month period;
                    (C) whether or not the actual reserve ratio of the 
                Mortgage Insurance Fund met--
                            (i) the reserve ratio set for the preceding 
                        12-month period; or
                            (ii) the reserve ratio goals established in 
                        section 203(e);
                    (D) how the Corporation intends to ensure that the 
                goals set for the reserve ratio for the Mortgage 
                Insurance Fund are to be met and maintained for the 
                next 12-month period, and such analysis shall include a 
                detailed and descriptive plan of the actions that the 
                Corporation intends to take pursuant to its authorities 
                under this Act;
                    (E) how the Corporation has provided liquidity, 
                transparency, and access to mortgage credit in its 
                support of a robust secondary mortgage market and the 
                production of residential mortgage-backed securities;
                    (F) the state of the private label mortgage-backed 
                securities market, and such analysis shall include the 
                submission of a reasonable set of administrative, 
                regulatory, and legislative proposals on how to limit 
                the Federal Government's footprint in the secondary 
                mortgage market;
                    (G) the effect that further decreases in loan 
                limits would have on the secondary mortgage market, the 
                housing market, and the economy; and
                    (H) the state of the global covered bond market.
    (b) Testimony.--The Chairperson of the Corporation, on a biannual 
basis, shall provide testimony to the Committee on Banking, Housing, 
and Urban Affairs of the Senate and the Committee on Financial Services 
of the House of Representatives.
    (c) Audit of Corporation.--
            (1) Annual audit.--The Comptroller General of the United 
        States shall annually audit the financial transactions of the 
        Corporation in accordance with the United States generally 
        accepted government auditing standards as may be prescribed by 
        the Comptroller General.
            (2) Place of audit.--The audit required under this 
        subsection shall be conducted at the place or places where 
        accounts of the Corporation are normally kept.
            (3) Access.--The representatives of the Comptroller General 
        shall have access to the personnel and to all books, accounts, 
        documents, papers, records (including electronic records), 
        reports, files, and all other papers, automated data, or 
        property belonging to or under the control of or used or 
        employed by the Corporation pertaining to its financial 
        transactions and necessary to facilitate the audit required 
        under this subsection, and such representatives shall be 
        afforded full facilities for verifying transactions with the 
        balances or securities held by depositories, fiscal agents, and 
        custodians.
            (4) Possession and custody.--All such books, accounts, 
        documents, records, reports, files, papers, and property of the 
        Corporation used to carry out the audit required under this 
        subsection shall remain in the possession and custody of the 
        Corporation.
            (5) Permissible duplication.--The Comptroller General may 
        obtain and duplicate any such books, accounts, documents, 
        records, working papers, automated data and files, or other 
        information relevant to such audit without cost to the 
        Comptroller General and the Comptroller General's right of 
        access to such information shall be enforceable pursuant to 
        section 716(c) of title 31, United States Code.
            (6) Report.--
                    (A) Submission to congress.--The Comptroller 
                General shall submit to Congress a report of each 
                annual audit conducted under this subsection.
                    (B) Required content.--The report to Congress 
                required under subparagraph (A) shall--
                            (i) set forth the scope of the audit; and
                            (ii) include--
                                    (I) the statement of assets and 
                                liabilities and surplus or deficit;
                                    (II) the statement of income and 
                                expenses;
                                    (III) the statement of sources and 
                                application of funds; and
                                    (IV) such comments and information 
                                as the Comptroller General may deem 
                                necessary to inform Congress of the 
                                financial operations and condition of 
                                the Corporation, together with such 
                                recommendations with respect thereto as 
                                the Comptroller General may deem 
                                advisable.
                    (C) Copies.--A copy of each report required under 
                subparagraph (A) shall be furnished to the President 
                and to the Chairperson of the Corporation at the time 
                such report is submitted to the Congress.
            (7) Assistance and costs.--
                    (A) Permitted use of outside assistance.--For the 
                purpose of conducting an audit under this subsection, 
                the Comptroller General may employ by contract, without 
                regard to section 3709 of the Revised Statutes of the 
                United States (41 U.S.C. 5), professional services of 
                firms and organizations of certified public accountants 
                for temporary periods or for special purposes.
                    (B) Cost of audit covered by corporation.--
                            (i) In general.--Upon the request of the 
                        Comptroller General, the Chairperson of the 
                        Corporation shall transfer to the Comptroller 
                        General from funds available, the amount 
                        requested by the Comptroller General to cover 
                        the reasonable costs of any audit and report 
                        conducted by the Comptroller General pursuant 
                        to this subsection.
                            (ii) Credit of funds.--The Comptroller 
                        General shall credit funds transferred under 
                        clause (i) to the account at the Treasury 
                        established for salaries and expenses of the 
                        Government Accountability Office, and such 
                        amounts shall be available upon receipt and 
                        without fiscal year limitation to cover the 
                        full costs of the audit and report.

SEC. 107. INITIAL FUNDING.

    (a) In General.--Section 1316 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4516) is amended 
by adding at the end the following:
    ``(i) Annual Assessments Relating to Initial Funding of the FMIC.--
Notwithstanding title V of the Housing Finance Reform and Taxpayer 
Protection Act of 2013 or any other provision of law, for the period 
beginning on the date of enactment of this subsection and ending on the 
FMIC certification date (as that date is set forth under section 2(16) 
of the Housing Finance Reform and Taxpayer Protection Act of 2013, the 
Director, in consultation with the Chairperson of the Federal Mortgage 
Insurance Corporation, shall establish and collect from the enterprises 
annual assessments in addition to those required under subsection (a) 
in an amount not exceeding the amount sufficient to provide for the 
reasonable costs (including administrative costs) and expenses of the 
Corporation. All amounts collected under this subsection shall be 
transferred to the Federal Mortgage Insurance Corporation. The annual 
assessment shall be payable semiannually for each fiscal year, on 
October 1 and April 1.''.
    (b) Treatment of Assessments.--
            (1) Deposit.--Amounts received by the Corporation from 
        assessments imposed under section 1316(i) of the Federal 
        Housing Enterprises Financial Safety and Soundness Act of 1992 
        shall be deposited by the Corporation in the manner provided in 
        section 5234 of the Revised Statutes of the United States (12 
        U.S.C. 192) for monies deposited by the Comptroller of the 
        Currency.
            (2) Not government funds.--The amounts received by the 
        Corporation from any assessment imposed under section 1316(i) 
        of the Federal Housing Enterprises Financial Safety and 
        Soundness Act of 1992 shall not be construed to be Government 
        or public funds or appropriated money.
            (3) No apportionment of funds.--Notwithstanding any other 
        provision of law, the amounts received by the Corporation from 
        any assessment imposed under section 1316(i) of the Federal 
        Housing Enterprises Financial Safety and Soundness Act of 1992 
        shall not be subject to apportionment for the purpose of 
        chapter 15 of title 31, United States Code, or under any other 
        authority.
            (4) Use of funds.--
                    (A) In general.--The Corporation may use any 
                amounts received from assessments imposed under section 
                1316(i) of the Federal Housing Enterprises Financial 
                Safety and Soundness Act of 1992--
                            (i) for compensation of the employees of 
                        the Corporation; and
                            (ii) for all other expenses of the 
                        Corporation.
                    (B) Treasury investments.--The Corporation may 
                request the Secretary of the Treasury to invest such 
                portions of amounts received from assessments imposed 
                under section 1316(i) of the Federal Housing 
                Enterprises Financial Safety and Soundness Act of 1992 
                that, in the discretion of the Corporation, are not 
                required to meet the current working needs of the 
                Corporation.
                    (C) Government obligations.--Pursuant to a request 
                under subparagraph (B), the Secretary of the Treasury 
                shall invest such amounts in Government obligations--
                            (i) guaranteed as to principal and interest 
                        by the United States with maturities suitable 
                        to the needs of the Corporation; and
                            (ii) bearing interest at a rate determined 
                        by the Secretary of the Treasury taking into 
                        consideration current market yields on 
                        outstanding marketable obligations of the 
                        United States of comparable maturity.

     TITLE II--DUTIES, RESPONSIBILITIES, AND STRUCTURE OF THE FMIC

                   Subtitle A--Duties and Authorities

SEC. 201. DUTIES AND RESPONSIBILITIES OF THE FMIC.

    (a) Duties.--The principal duties of the Corporation shall be to--
            (1) carry out this Act in a manner that--
                    (A) minimizes any potential long-term negative cost 
                on the taxpayer; and
                    (B) ensures, to the maximum extent possible--
                            (i) a liquid and resilient housing finance 
                        market; and
                            (ii) the availability of mortgage credit;
            (2) develop standard form credit risk-sharing mechanisms, 
        products, structures, contracts, or other security agreements 
        that require private market holders of a covered security 
        insured under this Act to assume the first loss position with 
        respect to losses incurred on such securities;
            (3) provide insurance on any covered security for which 
        private market holders of such security have assumed the first 
        loss position with respect to losses that may be incurred on 
        such security in order to provide a liquid and resilient 
        housing finance market;
            (4) provide leadership to the housing finance market to 
        help ensure that all geographic locations have access to 
        mortgage credit;
            (5) charge and collect fees in exchange for providing such 
        insurance, whereby such fees shall be sufficient to protect the 
        taxpayer from the risk of providing such insurance and to fund 
        the activities and operations of the Corporation;
            (6) establish and maintain a Mortgage Insurance Fund;
            (7) facilitate securitization of eligible mortgages 
        originated by credit unions and community and mid-size banks 
        without securitization capabilities;
            (8) ensure discipline and integrity in the market for 
        covered securities by setting standards for the approval of 
        private mortgage insurers, servicers, issuers, and bond 
        guarantors;
            (9) establish, operate, and maintain a database for the 
        collection, public use, and dissemination of uniform loan level 
        information on eligible mortgages;
            (10) develop, adopt, and publish standard uniform 
        securitization agreements for covered securities;
            (11) establish, operate, and maintain an electronic 
        registry system for eligible mortgages that collateralize 
        covered securities insured under this Act;
            (12) oversee and supervise the common securitization 
        platform developed by the business entity announced by the 
        Federal Housing Finance Agency and established by the 
        enterprises; and
            (13) ensure that credit unions and community and mid-size 
        banks--
                    (A) have equal access to any such common 
                securitization platform and any other securitization 
                platforms; and
                    (B) are not, in their access or use of such 
                platforms, discriminated against through discounts for 
                volume pricing or other mechanisms.
    (b) Scope of Authority.--The authority of the Corporation shall 
include the authority to exercise such incidental powers as may be 
necessary or appropriate to fulfill the duties and responsibilities of 
the Corporation set forth under subsection (a).
    (c) Delegation of Authority.--The Board of Directors may delegate 
to officers and employees of the Corporation any of the functions, 
powers, or duties of the Corporation, as the Board of Directors 
determines appropriate.

SEC. 202. STANDARD FORM CREDIT RISK-SHARING MECHANISMS, PRODUCTS, 
              STRUCTURES, CONTRACTS, OR OTHER SECURITY AGREEMENTS.

    (a) Requirements; Share of Loss; Diversity.--Pursuant to section 
201(a)(2), the Corporation shall develop standard form credit-risk 
sharing mechanisms, products, structures, contracts, or other security 
agreements which shall require that the first loss position of private 
market holders of a covered security insured under this Act--
            (1) is adequate to cover losses that might be incurred as a 
        result of adverse economic conditions, wherein such conditions 
        are generally consistent with the economic conditions, 
        including national home price declines, observed in the United 
        States during moderate to severe recessions experienced during 
        the last 100 years; and
            (2) is not less than 10 percent of the principal or face 
        value of the covered security.
    (b) Development Window for Risk-Sharing Mechanisms.--
            (1) In general.--The Corporation shall complete the 
        development and implementation of the mechanisms, products, 
        structures, contracts, or other security agreements required 
        under subsection (a) not later than 5 years after the date of 
        enactment of this Act.
            (2) Examination of various mechanisms.--In developing the 
        mechanisms, products, structures, contracts, or other security 
        agreements required under subsection (a), the Corporation 
        shall--
                    (A) examine proposals that include a senior-
                subordinated deal structure, credit-linked structures, 
                and the use of regulated guarantors with sufficient 
                equity capital to absorb losses associated with 
                moderate or severe economic downturns;
                    (B) consider any risk-sharing mechanisms, products, 
                structures, contracts, or other security agreements 
                undertaken by the business entity announced by the 
                Federal Housing Finance Agency and established by the 
                enterprises to provide a common securitization platform 
                for issuers in the secondary mortgage market;
                    (C) consider how each proposed mechanism, product, 
                structure, contract, or other security agreement--
                            (i) minimizes any potential long-term 
                        negative cost to the taxpayer;
                            (ii) impacts the availability of mortgage 
                        credit for--
                                    (I) small financial institutions, 
                                such as credit unions and community and 
                                mid-size banks; and
                                    (II) consumers;
                            (iii) influences mortgage affordability;
                            (iv) allows for loan modifications and 
                        foreclosure prevention alternatives;
                            (v) interacts with the To-Be-Announced 
                        market; and
                            (vi) facilitates market liquidity and 
                        resiliency; and
                    (D) ensure that lenders of all sizes and from all 
                geographic locations, including rural locations, have 
                equitable access to secondary mortgage market 
                financing.
            (3) Report.--
                    (A) In general.--Not later than 1 year after the 
                date of enactment of this Act, and annually thereafter 
                until the end of the 5-year period provided in 
                paragraph (1), the Corporation shall submit a report to 
                the Committee on Banking, Housing, and Urban Affairs of 
                the Senate and the Committee on Financial Services of 
                the House of Representatives that--
                            (i) details the benefits and drawbacks of 
                        each mechanism, product, structure, contract, 
                        or other security agreement that the Director 
                        considered in carrying out the requirement of 
                        this section;
                            (ii) describes the operation and execution 
                        of any mechanisms, products, structures, 
                        contracts, or other security agreements that 
                        the Director determines best fulfills the 
                        requirements of this section; and
                            (iii) explains how the Corporation arrived 
                        at the determination made under clause (ii).
                    (B) Subsequent reports.--After the expiration of 
                the 5-year period provided in paragraph (1) and the 
                submission of the report required under subparagraph 
                (A), each time the Corporation develops an additional 
                standard form credit risk-sharing mechanism, product, 
                structure, contract, or other security agreement that 
                fulfills the requirements of this section, the 
                Corporation shall submit a report to the Committee on 
                Banking, Housing, and Urban Affairs of the Senate and 
                the Committee on Financial Services of the House of 
                Representatives addressing the identical concerns set 
                forth under clauses (i) through (iii) of subparagraph 
                (A).

SEC. 203. MORTGAGE INSURANCE FUND.

    (a) Establishment.--There is established the Mortgage Insurance 
Fund, which the Corporation shall--
            (1) maintain and administer; and
            (2) use to cover losses incurred on covered securities 
        insured under this Act, when such losses exceed the first 
        position losses absorbed by private market holders of such 
        securities.
    (b) Deposits.--The Mortgage Insurance Fund shall be credited with 
any--
            (1) insurance fee amounts required to be deposited in the 
        Fund under this section;
            (2) guarantee fee amounts collected under section 601; and
            (3) amounts earned on investments pursuant to subsection 
        (h).
    (c) Fiduciary Responsibility.--The Corporation has the 
responsibility to ensure that the Mortgage Insurance Fund remains 
financially sound.
    (d) Use.--
            (1) In general.--The Mortgage Insurance Fund shall be 
        solely available to the Corporation for use by the Corporation 
        to carry out the functions authorized by this Act and may not 
        be used or otherwise diverted to cover any other expense of the 
        Federal Government.
            (2) Exemption from apportionment.--Notwithstanding any 
        other provision of law, amounts received by the Mortgage 
        Insurance Fund pursuant to any fees collected under this 
        section shall not be subject to apportionment for the purposes 
        of chapter 15 of title 31, United States Code, or under any 
        other authority.
    (e) Reserve Ratio Goals for Mortgage Insurance Fund.--The 
Corporation shall endeavor to ensure that the Mortgage Insurance Fund 
attains a reserve balance--
            (1) of 1.25 percent of the sum of the outstanding principal 
        balance of the covered securities for which insurance is being 
        provided under this title within 5 years of the FMIC 
        certification date, and to strive to maintain such ratio 
        thereafter, subject to subparagraph (B); and
            (2) of 2.50 percent of the sum of the outstanding principal 
        balance of the covered securities for which insurance is being 
        provided under this title within 10 years of the FMIC 
        certification date, and to strive to maintain such ratio at all 
        times thereafter.
    (f) Maintenance of Reserve Ratio; Establishment of Fees.--
            (1) Establishment of fees.--The Corporation shall charge 
        and collect a fee, and may in its discretion increase or 
        decrease such fee, in connection with any insurance provided 
        under this title to--
                    (A) achieve and maintain the reserve ratio goals 
                established under subsection (e);
                    (B) achieve such reserve ratio goals, if the actual 
                balance of such reserve is below the goal amounts 
                established under subsection (e); and
                    (C) fund the operations of the Corporation.
            (2) Fee considerations.--In exercising the authority 
        granted under paragraph (1), the Corporation shall consider--
                    (A) the expected operating expenses of the Mortgage 
                Insurance Fund;
                    (B) the risk of loss to the Mortgage Insurance Fund 
                in carrying out the requirements under this Act;
                    (C) the risk presented by, and the loss absorption 
                capacity of, the credit enhancement that is provided on 
                the pool of eligible mortgages collateralizing the 
                covered security to be insured under this title;
                    (D) economic conditions generally affecting the 
                mortgage markets;
                    (E) the extent to which the reserve ratio of the 
                Mortgage Insurance Fund met--
                            (i) the reserve ratio set for the preceding 
                        12-month period; or
                            (ii) the reserve ratio goals established in 
                        subsection (e); and
                    (F) any other factor that the Corporation 
                determines appropriate.
            (3) Fee uniformity.--The fee required under paragraph (1)--
                    (A) shall be set at a uniform amount applicable to 
                all institutions purchasing insurance under this title;
                    (B) may not vary--
                            (i) by geographic location; or
                            (ii) by the size of the institution to 
                        which the fee is charged; and
                    (C) may not be based on the volume of insurance to 
                be purchased by an approved issuer.
            (4) Deposit into mortgage insurance fund.--Any fee amounts 
        collected under this subsection shall be deposited in the 
        Mortgage Insurance Fund.
    (g) Full Faith and Credit.--The full faith and credit of the United 
States is pledged to the payment of all amounts from the Mortgage 
Insurance Fund which may be required to be paid under any insurance 
provided under this title.
    (h) Investments.--Amounts in the Mortgage Insurance Fund that are 
not otherwise employed--
            (1) shall be invested in obligations of the United States; 
        and
            (2) may not be invested in any covered security insured 
        under this Act.

SEC. 204. INSURANCE.

    (a) Authority.--The Corporation shall, upon application and in 
exchange for a fee in accordance with section 203(f), insure the 
payment of principal and interest on a covered security with respect to 
losses that may be incurred on such security.
    (b) Precondition; Ensuring Placement of First Loss Capital.--The 
Corporation shall develop standards and processes to ensure that prior 
to making any commitment to provide insurance under this section that 
private market holders have taken first loss position in a covered 
security and that such holders have sufficient capital to cover their 
risk-sharing obligations.
    (c) Cash Payments; Continued Operations.--In the event of a payment 
default on an eligible mortgage that collateralizes a covered security 
insured under this section that exceeds the first loss position assumed 
by a private market holder or that, in the case of an approved bond 
guarantor, if the guarantor has become insolvent, the Corporation 
shall--
            (1) pay, in cash when due, any shortfalls in payment of 
        principal and interest under the eligible mortgage; and
            (2) continue to charge and collect any fees for the 
        provision of insurance (in accordance with section 203(f)) 
        relating to the covered security.
    (d) Full Faith and Credit.--The full faith and credit of the United 
States is pledged to the payment of all amounts which may be required 
to be paid under any insurance provided under this section.
    (e) Prohibition on Federal Assistance.--Notwithstanding any other 
provision of law, no Federal funds may be used to purchase or guarantee 
obligations of, issue lines of credit to, provide direct or indirect 
access to any financing provided by the United States Government to, or 
provide direct or indirect grants and aid to any private market holder 
of the first loss position on a covered security which, on or after the 
date of enactment of this Act, has defaulted on its obligations, is at 
risk of defaulting, or is likely to default, absent such assistance 
from the United States Government.

SEC. 205. AUTHORITY TO PROTECT TAXPAYERS IN UNUSUAL AND EXIGENT MARKET 
              CONDITIONS.

    (a) In General.--If the Corporation, upon the written agreement of 
the Chairman of the Board of Governors of the Federal Reserve System 
and the Secretary of the Treasury, and in consultation with the 
Secretary of Housing and Urban Development, determines that unusual and 
exigent circumstances have created or threatened to create an anomalous 
lack of mortgage credit availability within the housing markets that 
could materially and severely disrupt the functioning of the housing 
finance system of the United States, the Corporation may, for a period 
not to exceed 6 months, provide insurance in accord with section 204 to 
any covered security regardless of whether such security has satisfied 
the requirements of section 202(a).
    (b) Considerations.--In exercising the authority granted under 
subsection (a), the Corporation shall consider the severity of the 
conditions present in the housing markets and the risks presented to 
the Mortgage Insurance Fund in exercising such authority.
    (c) Limitation.--The authority granted to the Corporation under 
subsection (a) may not be exercised more than once in any given 3-year 
period.

SEC. 206. GENERAL POWERS.

    (a) Corporate Powers.--The Federal Mortgage Insurance Corporation 
shall have power--
            (1) to adopt, alter, and use a corporate seal, which shall 
        be judicially noticed;
            (2) to enter into and perform contracts, leases, 
        cooperative agreements, or other transactions, on such terms as 
        it may deem appropriate, with any agency or instrumentality of 
        the United States, or with any State, Territory, or possession, 
        or the Commonwealth of Puerto Rico, or with any political 
        subdivision thereof, or with any person, firm, association, or 
        corporation;
            (3) to execute, in accordance with its bylaws, all 
        instruments necessary or appropriate in the exercise of any of 
        its powers;
            (4) in its corporate name, to sue and to be sued, and to 
        complain and to defend, in any court of competent jurisdiction, 
        State or Federal, but no attachment, injunction, or other 
        similar process, mesne or final, shall be issued against the 
        property of the Corporation;
            (5) to conduct its business without regard to any 
        qualification or similar statute in any State of the United 
        States, including the District of Columbia, the Commonwealth of 
        Puerto Rico, and the Territories and possessions of the United 
        States;
            (6) to lease, purchase, or acquire any property, real, 
        personal, or mixed, or any interest therein, to hold, rent, 
        maintain, modernize, renovate, improve, use, and operate such 
        property, and to sell, for cash or credit, lease, or otherwise 
        dispose of the same, at such time and in such manner as and to 
        the extent that it may deem necessary or appropriate;
            (7) to prescribe, repeal, and amend or modify, rules, 
        regulations, or requirements governing the manner in which its 
        general business may be conducted;
            (8) to accept gifts or donations of services, or of 
        property, real, personal, or mixed, tangible, or intangible, in 
        aid of any of its purposes; and
            (9) to do all things as are necessary or incidental to the 
        proper management of its affairs and the proper conduct of its 
        business.
    (b) Expenditures.--Except as may be otherwise provided in this 
title, in chapter 91 of title 31, United States Code, or in other laws 
specifically applicable to Government corporations, the Corporation 
shall determine the necessity for, and the character and amount of its 
obligations and expenditures, and the manner in which they shall be 
incurred, allowed, paid, and accounted for.
    (c) Exemption From Certain Taxes.--The Corporation, including its 
franchise, capital, reserves, surplus, mortgages or other security 
holdings, and income shall be exempt from all taxation now or hereafter 
imposed by the United States, by any territory, dependency, or 
possession thereof, or by any State, county, municipality, or local 
taxing authority, except that any real property of the Corporation 
shall be subject to State, territorial, county, municipal, or local 
taxation to the same extent according to its value as other real 
property is taxed.
    (d) Exclusive Use of Name.--No individual, association, 
partnership, or corporation, except the bodies corporate named under 
section 101, shall hereafter use the words ``Federal Mortgage Insurance 
Corporation'' or any combination of such words, as the name or a part 
thereof under which the individual, association, partnership, or 
corporation shall do business. Violations of the foregoing sentence may 
be enjoined by any court of general jurisdiction at the suit of the 
proper body corporate. In any such suit, the plaintiff may recover any 
actual damages flowing from such violation, and, in addition, shall be 
entitled to punitive damages (regardless of the existence or 
nonexistence of actual damages) of not exceeding $100 for each day 
during which such violation is committed or repeated.
    (e) Fiscal Agents.--The Federal Reserve banks are authorized and 
directed to act as depositories, custodians, and fiscal agents for each 
of the bodies corporate named in section 101, for its own account or as 
fiduciary, and such banks shall be reimbursed for such services in such 
manner as may be agreed upon; and each of such bodies corporate may 
itself act in such capacities, for its own account or as fiduciary, and 
for the account of others.

SEC. 207. EXEMPTIONS.

    (a) Securities Exempt From SEC Regulation.--
            (1) In general.--All covered securities insured or 
        guaranteed by the Corporation shall, to the same extent as 
        securities that are direct obligations of or obligations 
        guaranteed as to principal or interest by the United States, be 
        deemed to be exempt securities within the meaning of the laws 
        administered by the Securities and Exchange Commission.
            (2) Conforming amendment.--The first sentence of section 
        3(a)(2) of the Securities Act of 1933 (15 U.S.C. 77c(a)(2)) is 
        amended by inserting ``or any covered security, as such term is 
        defined under section 2(9) of the Housing Finance Reform and 
        Taxpayer Protection Act of 2013;'' after ``Federal Reserve 
        bank;''.
    (b) QRM Exemption.--Section 15G(e) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78o-11(e)) is amended--
            (1) in paragraph (3)(B)--
                    (A) by striking ``Association, the'' and inserting 
                ``Association and the''; and
                    (B) by striking ``and the Federal home loan 
                banks''; and
            (2) by adding at the end the following:
            ``(7) Covered securities insured by the federal mortgage 
        insurance corporation.--Notwithstanding any other provision of 
        this section, the requirements of this section shall not apply 
        to any covered security, as such term is defined under section 
        2(9) of the Housing Finance Reform and Taxpayer Protection Act 
        of 2013, insured or guaranteed by the Federal Mortgage 
        Insurance Corporation or any institution that is subject to the 
        supervision of the Federal Mortgage Insurance Corporation.''.

              Subtitle B--Oversight of Market Participants

SEC. 211. APPROVAL OF PRIVATE MORTGAGE INSURERS.

    (a) Standards for Approval of Private Mortgage Insurers.--
            (1) In general.--The Corporation shall develop, adopt, and 
        publish standards for the approval by the Corporation of 
        private mortgage insurers to provide private mortgage insurance 
        on eligible mortgages.
            (2) Required standards.--The standards required under 
        paragraph (1) shall include--
                    (A) the financial history and condition of the 
                insurer;
                    (B) the adequacy of the insurer's capital 
                structure, including whether the insurer has sufficient 
                capital to cover the first loss insurance obligations 
                it assumes under this Act and that might be incurred in 
                a period of economic stress, including, but not limited 
                to, any period of economic stress that would result in 
                a 30 percent (or greater) national home price decline;
                    (C) the general character and fitness of the 
                management of the insurer, including compliance history 
                with Federal and State laws;
                    (D) the risk presented by such insurer to the 
                Mortgage Insurance Fund;
                    (E) the adequacy of insurance and fidelity coverage 
                of the insurer;
                    (F) a requirement that the insurer submit audited 
                financial statements to the Director; and
                    (G) any other standard the Corporation determines 
                necessary or appropriate.
    (b) Application and Approval.--
            (1) Application process.--The Corporation shall establish 
        an application process, in such form and manner and requiring 
        such information as the Corporation may require, for the 
        approval of private mortgage insurers under this section.
            (2) Approval.--The Corporation may approve any application 
        made pursuant to paragraph (1) provided the private mortgage 
        insurer meets the standards adopted under subsection (a).
            (3) Publication.--The Corporation shall--
                    (A) publish in the Federal Register a list of newly 
                approved private mortgage insurers; and
                    (B) maintain an updated list of approved private 
                mortgage insurers on the website of the Corporation.
    (c) Review, Suspension, and Revocation of Approved Status.--
            (1) In general.--The Corporation may review the status of 
        any approved private mortgage insurer if the Corporation is 
        notified of or becomes aware of any violation by the insurer of 
        this Act or the rules promulgated pursuant to this Act.
            (2) Suspension or revocation.--
                    (A) Corporation authority.--If the Corporation 
                determines, in a review pursuant to paragraph (1), that 
                an approved private mortgage insurer no longer meets 
                the standards for approval, the Corporation may suspend 
                or revoke the approved status of such insurer.
                    (B) Rule of construction.--The suspension or 
                revocation of an approved private mortgage insurer's 
                approved status under this paragraph shall have no 
                effect on the status of any covered security.
            (3) Publication.--The Corporation shall--
                    (A) publish in the Federal Register a list of any 
                approved private mortgage insurers who lost their 
                approved status; and
                    (B) maintain an updated list of such insurers on 
                the website of the Corporation.
    (d) Appeals.--
            (1) In general.--
                    (A) Appeals of denials of application.--A private 
                mortgage insurer who submits an application under 
                subsection (b)(1) to become an approved private 
                mortgage insurer may appeal a decision of the 
                Corporation denying such application.
                    (B) Appeals of denials of benefits or suspensions 
                of participation.--An approved private mortgage insurer 
                may appeal a decision of the Corporation suspending or 
                revoking the approved status of such insurer.
            (2) Filing of appeal.--Any insurer who files an appeal 
        under paragraph (1) shall file the appeal with the Corporation 
        not later than 90 days after the date on which the person 
        receives notice of the decision of the Corporation being 
        appealed.
            (3) Final determination.--The Corporation shall make a 
        final determination with respect to an appeal under paragraph 
        (1) not later than 180 days after the date on which the appeal 
        is filed under paragraph (2).
    (e) Avoidance of Conflicts of Interest.--With respect to any 
eligible mortgage collateralizing a covered security insured under this 
Act, an approved private mortgage insurer may not provide insurance 
both--
            (1) in satisfaction of the credit enhancement required 
        under section 2(11)(C); and
            (2) to cover the first loss position of private market 
        holders of such covered security.

SEC. 212. APPROVAL OF SERVICERS.

    (a) Standards for Approval of Servicers.--
            (1) In general.--The Corporation shall develop, adopt, and 
        publish standards for the approval by the Corporation of 
        servicers to administer eligible mortgages, including standards 
        with respect to--
                    (A) the collection and forwarding of principal and 
                interest payments;
                    (B) the maintenance of escrow accounts;
                    (C) the collection and payment of taxes and 
                insurance premiums;
                    (D) the maintenance of records on eligible 
                mortgages;
                    (E) the establishment of foreclosure loss 
                mitigation programs that seek to enhance investor value 
                and prevent, to greatest extent possible, the need to 
                trigger any claim on insurance offered by the 
                Corporation pursuant to this title;
                    (F) the advancement of principal and interest 
                payments to investors in the case of a delinquency by a 
                borrower until such time as the borrower has made all 
                payments in arrears or the property securing the 
                eligible mortgage has been liquidated; and
                    (G) implementing the terms of any loss mitigation 
                and foreclosure prevention as required by a uniform 
                securitization agreement developed under section 223.
            (2) Additional required standards.--The standards required 
        under paragraph (1) shall also include--
                    (A) the financial history and condition of the 
                servicer;
                    (B) the general character and fitness of the 
                management of the servicer, including compliance 
                history with Federal and State laws;
                    (C) the risk presented by such servicer to the 
                Mortgage Insurance Fund;
                    (D) a requirement that the servicer submit audited 
                financial statements to the Corporation; and
                    (E) any other standard the Corporation determines 
                necessary or appropriate.
            (3) Coordination with other regulators.--In developing the 
        standards required under paragraph (1), the Corporation shall--
                    (A) coordinate with the Bureau of Consumer 
                Financial Protection; and
                    (B) to the extent the Corporation determines 
                practical and appropriate, shall coordinate with the 
                other Federal banking agencies.
    (b) Application and Approval.--
            (1) Application process.--The Corporation shall establish 
        an application process--
                    (A) in such form and manner and requiring such 
                information as the Corporation may require, for the 
                approval of servicers under this section; and
                    (B) that does not discriminate against or otherwise 
                disadvantage small servicers.
            (2) Approval.--The Corporation may approve any application 
        made pursuant to paragraph (1) provided the servicer meets the 
        standards adopted under subsection (a).
            (3) Publication.--The Corporation shall--
                    (A) publish in the Federal Register a list of newly 
                approved servicers; and
                    (B) maintain an updated list of approved servicers 
                on the website of the Corporation.
    (c) Review, Suspension, and Revocation of Approved Status.--
            (1) In general.--The Corporation may review the status of 
        any approved servicer if the Corporation is notified of or 
        becomes aware of any violation by the servicer of this Act or 
        the rules promulgated pursuant to this Act, including any 
        failure by an approved servicer to comply with terms set forth 
        in any uniform securitization agreement developed under section 
        223.
            (2) Suspension or revocation.--
                    (A) Corporation authority.--If the Corporation 
                determines, in a review pursuant to paragraph (1), that 
                an approved servicer no longer meets the standards for 
                approval, the Corporation may suspend or revoke the 
                approved status of such servicer.
                    (B) Rule of construction.--The suspension or 
                revocation of an approved servicer's approved status 
                under this paragraph shall have no effect on the status 
                of any covered security.
            (3) Publication.--The Corporation shall--
                    (A) publish in the Federal Register a list of any 
                approved servicers who lost their approved status; and
                    (B) maintain an updated list of such servicers on 
                the website of the Corporation.
    (d) Appeals.--
            (1) In general.--
                    (A) Appeals of denials of application.--A servicer 
                who submits an application under subsection (b)(1) to 
                become an approved servicer may appeal a decision of 
                the Corporation denying such application.
                    (B) Appeals of denials of benefits or suspensions 
                of participation.--An approved servicer may appeal a 
                decision of the Corporation suspending or revoking the 
                approved status of such servicer.
            (2) Filing of appeal.--Any servicer who files an appeal 
        under paragraph (1) shall file the appeal with the Corporation 
        not later than 90 days after the date on which the person 
        receives notice of the decision of the Corporation being 
        appealed.
            (3) Final determination.--The Corporation shall make a 
        final determination with respect to an appeal under paragraph 
        (1) not later than 180 days after the date on which the appeal 
        is filed under paragraph (2).
    (e) Petitions for Change of Servicer by Private Market Holders.--
The Corporation shall develop a process by which private market holders 
of the first loss position in a covered security may petition the 
Corporation for a change in approved servicers if the private market 
holders can demonstrate that their current approved servicer has failed 
to appropriately protect their investment, including by failing to meet 
any standard identified under subsection (a)(1).

SEC. 213. APPROVAL OF ISSUERS.

    (a) Standards for Approval of Issuers.--
            (1) In general.--The Corporation shall develop, adopt, and 
        publish standards for the approval by the Corporation of 
        issuers to issue covered securities, including standards with 
        respect to an issuer's ability to--
                    (A) aggregate eligible mortgage loans into pools;
                    (B) securitize eligible mortgage loans for sale to 
                private investors as a covered security;
                    (C) transfer investment risk and credit to private 
                market participants in accordance with the risk-sharing 
                mechanisms developed by the Corporation under section 
                202;
                    (D) ensure equitable access to the secondary 
                mortgage market for covered securities for all 
                institutions regardless of size or geographic location;
                    (E) create mechanisms for multi-lender pools; and
                    (F) ensure that eligible mortgage loans that 
                collateralize a covered security insured under this 
                title are originated in compliance with the 
                requirements of this Act.
            (2) Additional required standards.--The standards required 
        under paragraph (1) shall also include--
                    (A) the financial history and condition of the 
                issuer;
                    (B) the adequacy of the capital structure of the 
                issuer;
                    (C) the general character and fitness of the 
                management of the issuer, including compliance history 
                with Federal and State laws;
                    (D) the risk presented by such issuer to the 
                Mortgage Insurance Fund;
                    (E) the adequacy of insurance and fidelity coverage 
                of the issuer;
                    (F) a requirement that the issuer submit audited 
                financial statements to the Corporation;
                    (G) the capacity of the issuer to secure first loss 
                credit enhancement; and
                    (H) any other standard the Corporation determines 
                necessary or appropriate.
    (b) Application and Approval.--
            (1) Application process.--
                    (A) In general.--The Corporation shall establish an 
                application process, in such form and manner and 
                requiring such information as the Corporation may 
                require, for the approval of issuers under this 
                section.
                    (B) Application process for insured depository 
                institutions.--If an insured depository institution 
                seeks to become an approved issuer under this section, 
                such institution may only submit its application via a 
                separately capitalized affiliate or subsidiary.
            (2) Approval.--The Corporation--
                    (A) may approve--
                            (i) any application made pursuant to 
                        paragraph (1) provided the issuer meets the 
                        standards adopted under subsection (a); and
                            (ii) any application to become an approved 
                        issuer made by the Federal Home Loan Bank 
                        System; and
                    (B) shall ensure that at least one issuer approved 
                to issue covered securities under this section is 
                dedicated to serving the securitization needs of credit 
                unions and community and mid-size banks without 
                securitization capabilities.
            (3) Publication.--The Corporation shall--
                    (A) publish in the Federal Register a list of newly 
                approved issuers; and
                    (B) maintain an updated list of approved issuers on 
                the website of the Corporation.
    (c) Federal Home Loan Bank System.--
            (1) In general.--If the Federal Home Loan Bank System is 
        approved by the Corporation to become an approved issuer under 
        this section, the Corporation shall--
                    (A) develop a process by which each individual 
                Federal Home Loan Bank may elect not to engage or 
                otherwise contribute to any activity practiced by the 
                Federal Home Loan Bank System as an approved issuer;
                    (B) ensure that, notwithstanding section 11 of the 
                Federal Home Loan Bank Act (12 U.S.C. 1431), any 
                covered securities issued by the Federal Home Loan Bank 
                System as an approved issuer are not issued as 
                consolidated Federal Home Loan Bank debentures and are 
                explicitly designated or otherwise treated as not being 
                the joint and several obligations of any individual 
                Federal Home Loan Bank that has made an election under 
                subparagraph (A); and
                    (C) ensure that in establishing the capital 
                standards set forth under subsection (a)(2)(B) with 
                respect to the Federal Home Loan Bank System, that such 
                standards shall--
                            (i) not be applicable to any individual 
                        Federal Home Loan Bank that has made an 
                        election under subparagraph (A);
                            (ii) be based on the volume of eligible 
                        mortgage loan originations made by the Federal 
                        Home Loan Banks that have not made an election 
                        under subparagraph (A); and
                            (iii) not adversely impact the traditional 
                        liquidity and advance business of the Federal 
                        Home Loan Banks or the Federal Home Loan Bank 
                        System.
            (2) Federal home loan bank act.--
                    (A) Amendment.--Section 12 of the Federal Home Loan 
                Bank Act (12 U.S.C. 1432) is amended by adding at the 
                end the following:
    ``(c) Subject to such regulations as may be prescribed by the 
Corporation, one or more Federal Home Loan Banks may establish a 
subsidiary. Any subsidiary established under this subsection shall be 
subject to supervision by the Office of Federal Home Loan Bank 
Supervision of the Corporation and shall be restricted to engaging in 
activities related to being an approved issuer, as that term is defined 
under section 2(2) of the Housing Finance Reform and Taxpayer 
Protection Act of 2013.''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall take effect on the transfer 
                date.
    (d) Review, Suspension, and Revocation of Approved Status.--
            (1) In general.--The Corporation may review the status of 
        any approved issuer if the Corporation is notified of or 
        becomes aware of any violation by the issuer of this Act or the 
        rules promulgated pursuant to this Act.
            (2) Suspension or revocation.--
                    (A) Corporation authority.--If the Corporation 
                determines, in a review pursuant to paragraph (1), that 
                an approved issuer no longer meets the standards for 
                approval, the Corporation may suspend or revoke the 
                approved status of such issuer.
                    (B) Rule of construction.--The suspension or 
                revocation of an approved issuer's approved status 
                under this paragraph shall have no effect on the status 
                of any covered security.
            (3) Publication.--The Corporation shall--
                    (A) publish in the Federal Register a list of any 
                approved issuers who lost their approved status; and
                    (B) maintain an updated list of such issuers on the 
                website of the Corporation.
    (e) Appeals.--
            (1) In general.--
                    (A) Appeals of denials of application.--An issuer 
                who submits an application under subsection (b)(1) to 
                become an approved issuer may appeal a decision of the 
                Corporation denying such application.
                    (B) Appeals of denials of benefits or suspensions 
                of participation.--An approved issuer may appeal a 
                decision of the Corporation suspending or revoking the 
                approved status of such issuer.
            (2) Filing of appeal.--Any issuer who files an appeal under 
        paragraph (1) shall file the appeal with the Corporation not 
        later than 90 days after the date on which the person receives 
        notice of the decision of the Corporation being appealed.
            (3) Final determination.--The Corporation shall make a 
        final determination with respect to an appeal under paragraph 
        (1) not later than 180 days after the date on which the appeal 
        is filed under paragraph (2).
    (f) Limitation on Market Share.--
            (1) In general.--The Corporation may not enter into any 
        contract, covenant, or other agreement with an approved issuer, 
        if such contract, covenant, or agreement would provide the 
        issuer a share of the covered security issuer market in excess 
        of 15 percent of the total market, as such market is measured 
        by the total outstanding principal balance at origination of 
        eligible mortgages collateralizing covered securities issued in 
        the previous 12-month period.
            (2) Exception.--The limitation set forth under paragraph 
        (1) shall not apply to--
                    (A) an approved issuer described under subsection 
                (b)(2)(A)(ii);
                    (B) the FMIC Mutual Securitization Company;
                    (C) any approved issuer which securitizes only 
                eligible mortgage loans originated by the issuer or an 
                affiliate of the issuer; or
                    (D) any approved issuer to which the Corporation 
                grants a waiver pursuant to paragraph (3).
            (3) Waiver.--The Corporation may, during the 3-year period 
        beginning on the FMIC certification date, grant a waiver from 
        the limitation set forth under paragraph (1) to an approved 
        issuer if the Corporation determines that the number of 
        approved issuers is insufficient, such that imposition of the 
        limitation would adversely affect the availability of mortgage 
        credit.
    (g) Limited Authority To Hold Eligible Mortgage Loans.--An approved 
issuer may, for a period not to exceed 6-months, hold--
            (1) eligible mortgage loans on the balance sheet of such 
        issuer; and
            (2) the first loss position in a covered security for 
        purposes of obtaining insurance under this title.

SEC. 214. APPROVAL OF BOND GUARANTORS.

    (a) Standards for Approval of Bond Guarantors.--
            (1) In general.--The Corporation shall develop, adopt, and 
        publish standards for the approval by the Corporation of bond 
        guarantors to guarantee the timely payment of principal and 
        interest on securities collateralized by eligible mortgages and 
        insured by the Corporation.
            (2) Required standards.--The standards required under 
        paragraph (1) shall include--
                    (A) the financial history and condition of the 
                guarantor;
                    (B) that the guarantor maintain a minimum capital 
                level equal to not less than 10 percent of the unpaid 
                principal balance of outstanding mortgage-backed 
                securities for which the guarantor is providing 
                insurance, net of any transactions, including 
                derivative transactions, repurchase agreements, reverse 
                repurchase agreements, securities lending transactions, 
                or securities borrowing transactions, that in the 
                determination of the Corporation are used by the 
                guarantor to hedge or mitigate against credit risk, 
                provided that any such hedging transaction does not 
                diminish the total amount of loss absorption capital in 
                the secondary mortgage market that stands in front of 
                the insurance provided by the Corporation under this 
                title;
                    (C) the general character and fitness of the 
                management of the guarantor, including compliance 
                history with Federal and State laws;
                    (D) the risk presented by such guarantor to the 
                Mortgage Insurance Fund;
                    (E) the adequacy of insurance and fidelity coverage 
                of the guarantor;
                    (F) a requirement that the guarantor submit audited 
                financial statements to the Director;
                    (G) a requirement that the guarantor meet a minimum 
                tangible common equity level, or other minimum capital 
                threshold as the Corporation determines necessary; and
                    (H) any other standard the Corporation determines 
                necessary or appropriate.
    (b) Rule of Construction.--Any covered security issued by an 
approved issuer and insured by an approved bond guarantor shall be 
deemed to have satisfied the credit-risk sharing requirements under 
section 202(a)(1) with respect to the eligibility of that security to 
obtain insurance under this title.
    (c) Application and Approval.--
            (1) Application process.--
                    (A) In general.--The Corporation shall establish an 
                application process, in such form and manner and 
                requiring such information as the Corporation may 
                require, for the approval of bond guarantors under this 
                section.
                    (B) Application process by insured depository 
                institutions.--If an insured depository institution 
                seeks to become an approved bond guarantor under this 
                section, such institution may only submit its 
                application via a separately capitalized affiliate or 
                subsidiary.
            (2) Approval.--The Corporation may approve any application 
        made pursuant to paragraph (1) provided the bond guarantor 
        meets the standards adopted under subsection (a).
            (3) Publication.--The Corporation shall--
                    (A) publish in the Federal Register a list of newly 
                approved bond guarantors; and
                    (B) maintain an updated list of approved bond 
                guarantors on the website of the Corporation.
    (d) Review, Suspension, and Revocation of Approved Status.--
            (1) In general.--The Corporation may review the status of 
        any approved bond guarantor if the Corporation is notified of 
        or becomes aware of any violation by the insurer of this Act or 
        the rules promulgated pursuant to this Act.
            (2) Suspension or revocation.--
                    (A) Corporation authority.--If the Corporation 
                determines, in a review pursuant to paragraph (1), that 
                an approved bond guarantor no longer meets the 
                standards for approval, the Corporation shall revoke 
                the approved status of such guarantor.
                    (B) Rule of construction.--The revocation of an 
                approved bond guarantor's approved status under this 
                paragraph shall have no effect on the status of any 
                covered security.
            (3) Publication.--The Corporation shall--
                    (A) publish in the Federal Register a list of any 
                approved bond guarantors who lost their approved 
                status; and
                    (B) maintain an updated list of such guarantors on 
                the website of the Corporation.
    (e) Appeals.--
            (1) In general.--
                    (A) Appeals of denials of application.--A bond 
                guarantor who submits an application under subsection 
                (c)(1) to become an approved bond guarantor may appeal 
                a decision of the Corporation denying such application.
                    (B) Appeals of denials of benefits or suspensions 
                of participation.--An approved bond guarantor may 
                appeal a decision of the Corporation suspending or 
                revoking the approved status of such guarantor.
            (2) Filing of appeal.--Any bond guarantor who files an 
        appeal under paragraph (1) shall file the appeal with the 
        Corporation not later than 90 days after the date on which the 
        person receives notice of the decision of the Corporation being 
        appealed.
            (3) Final determination.--The Corporation shall make a 
        final determination with respect to an appeal under paragraph 
        (1) not later than 180 days after the date on which the appeal 
        is filed under paragraph (2).
    (f) Limitations on Approved Bond Guarantors.--With respect to any 
eligible mortgage collateralizing a covered security insured under this 
Act, an approved bond guarantor may not provide insurance--
            (1) in satisfaction of the credit enhancement required 
        under section 2(11)(C) or as an approved private mortgage 
        insurer pursuant to section 211; and
            (2) as an approved bond guarantor under this section.
    (g) Permission To Carry Out Other Activities.--Nothing in this Act 
prohibits an approved bond guarantor from being or controlling an 
approved issuer, provided that each issuer and bond guarantor, 
independent of each other, meet the approval standards established by 
the Corporation under this title.

SEC. 215. AUTHORITY TO ESTABLISH FMIC MUTUAL SECURITIZATION COMPANY.

    (a) In General.--The Corporation shall establish a mutual 
corporation to be known as the ``FMIC Mutual Securitization Company''.
    (b) Purpose.--The purpose of the FMIC Mutual Securitization Company 
is to--
            (1) develop, securitize, sell, and otherwise meet the 
        issuing needs of credit unions, community and mid-size banks, 
        and non-depository mortgage originators with respect to covered 
        securities; and
            (2) purchase from its member participants for cash, on a 
        single loan basis, eligible mortgage loans to securitize in a 
        covered security.
    (c) Sale of Necessary Technology.--Upon the FMIC certification 
date, the enterprises shall sell to the FMIC Mutual Securitization 
Company any function, activity, infrastructure, property, including 
intellectual property, platform, or any other object or service of an 
enterprise that the Corporation determines necessary for the FMIC 
Mutual Securitization Company to carry out its activities and 
operations.
    (d) Designation as an Approved Issuer.--The FMIC Mutual 
Securitization Company shall be an approved issuer for purposes of 
section 213.
    (e) Eligibility.--Eligibility to participate as a member in the 
FMIC Mutual Securitization Company shall be limited to--
            (1) insured depository institutions having less than 
        $15,000,000,000 in total consolidated assets at the time of the 
        institution's initial participation in the Company; or
            (2) any non-depository mortgage originator having a minimum 
        net worth of $2,500,000.
    (f) Governance.--
            (1) Recognition of important role of smaller 
        institutions.--The Corporation shall take all necessary steps 
        to ensure that the governance provisions of the FMIC Mutual 
        Securitization Company reflect the important role in the 
        mortgage market played by the small and mid-sized member 
        participants of the FMIC Mutual Securitization Company.
            (2) Establishment of position of director.--There is 
        established the position of the Director of the FMIC Mutual 
        Securitization Company who shall be the head of the Company.
            (3) Board of directors.--
                    (A) In general.--The management of the FMIC Mutual 
                Securitization Company shall be vested in a Board of 
                Directors (hereafter referred to as the ``Mutual 
                Board''), which shall include representatives of member 
                participants of the Company, including representatives 
                of--
                            (i) mortgage bankers;
                            (ii) community banks; and
                            (iii) credit unions.
                    (B) Initial appointment.--The Corporation shall 
                make initial appointments of the members of the Mutual 
                Board. Each such initial appointment shall be for a 
                term 1 year.
                    (C) Appointments.--Following the initial 1-year 
                appointment of the members of the Mutual Board, member 
                participants in the FMIC Mutual Securitization Company 
                shall elect the members of the Mutual Board from within 
                the membership of the Company.
                    (D) Administration.--The Mutual Board shall 
                administer the affairs of the FMIC Mutual 
                Securitization Company fairly and impartially and 
                without discrimination.
            (4) No preferences for size.--Member participants of the 
        FMIC Mutual Securitization Company shall have equal voting 
        rights on any matters before the Company, regardless of the 
        size of the individual member participant.
    (g) Approval of Member Participants.--
            (1) In general.--The Mutual Board shall develop standards 
        and procedures to approve the application of member 
        participants in the FMIC Mutual Securitization Company.
            (2) Content of standards.--The standards required under 
        paragraph (1) shall include standards relating to the safety 
        and soundness of prospective member participants, including 
        standards regarding the underwriting practices of such 
        prospective members.
            (3) Coordination with other regulators.--
                    (A) Consultation.--In approving any prospective 
                member to become a member participant in the FMIC 
                Mutual Securitization Company, the Mutual Board may 
                consult and share information with the primary 
                prudential regulator of the prospective member.
                    (B) Privilege preserved.--Information shared 
                pursuant to subparagraph (A) shall not be construed as 
                waiving, destroying, or otherwise affecting any 
                privilege or confidential status that a prospective 
                member may claim with respect to such information under 
                Federal or State law as to any person or entity other 
                than the Mutual Board or its primary prudential 
                regulator.
                    (C) Rule of construction.--No provision of this 
                subsection may be construed as implying or establishing 
                that--
                            (i) any prospective member waives any 
                        privilege applicable to information that is 
                        shared or transferred under any circumstance to 
                        which this subsection does not apply; or
                            (ii) any prospective would waive any 
                        privilege applicable to any information by 
                        submitting the information directly to its 
                        primary prudential regulator, but for this 
                        subsection.
    (h) Funding Authority.--
            (1) Authority to establish membership fees.--The Mutual 
        Board shall have the authority to charge and collect fees, and 
        may in its discretion increase or decrease such fee, on its 
        member participants for membership in the FMIC Mutual 
        Securitization Company, including to cover the costs of--
                    (A) the initial capitalization of the Company;
                    (B) the purchase of any function, activity, 
                infrastructure, property, including intellectual 
                property, platform, or any other object or service from 
                an enterprise pursuant to subsection (c); and
                    (C) the continued operation of the Company.
            (2) Limitation.--The fees authorized under paragraph (1)--
                    (A) shall be equitably assessed; and
                    (B) may be based on the volume of eligible 
                mortgages that the member participant sells to the FMIC 
                Mutual Securitization Company.
    (i) Coordination of Servicer Approval.--The Mutual Board may 
coordinate with the Corporation to facilitate the application process 
for its member participants to become approved servicers of the 
Corporation pursuant to section 212.

SEC. 216. ADDITIONAL AUTHORITY RELATING TO OVERSIGHT OF MARKET 
              PARTICIPANTS.

    In carrying out its authorities under this subtitle, the 
Corporation may, in its discretion, develop, publish, and adopt such 
other additional standards or requirements as the Corporation 
determines necessary to ensure--
            (1) competition among approved private mortgage insurers, 
        servicers, issuers, and bond guarantors and other market 
        participants in the secondary mortgage market;
            (2) competitive pricing among approved private mortgage 
        insurers, servicers, issuers, and bond guarantors and other 
        market participants in the secondary mortgage market; and
            (3) liquidity, transparency, and access to mortgage credit 
        in the secondary mortgage market.

SEC. 217. CIVIL MONEY PENALTIES.

    (a) Authority.--In addition to any suspension or revocation of the 
approved status of an approved private mortgage insurer, servicer, 
issuer, or bond guarantor under this subtitle, the Corporation may, in 
its discretion, impose a civil money penalty on any such approved 
private mortgage insurer, servicer, issuer, or bond guarantor that has 
failed to comply with or otherwise violates--
            (1) any standard adopted by the Corporation pursuant to 
        this subtitle; or
            (2) any other requirement or provision of this Act, or any 
        order, condition, rule, or regulation issued pursuant to this 
        Act, applicable to such private mortgage insurer, servicer, 
        issuer, or bond guarantor, as the case may be.
    (b) Procedures.--
            (1) Establishment.--The Corporation shall establish 
        standards and procedures governing the imposition of civil 
        money penalties under this section. Such standards and 
        procedures--
                    (A) shall provide for the Corporation to notify the 
                approved private mortgage insurer, servicer, issuer, or 
                bond guarantor, as the case may be, in writing of the 
                determination of the Corporation to impose the penalty, 
                which shall be made on the record;
                    (B) shall provide for the imposition of a penalty 
                only after the approved private mortgage insurer, 
                servicer, issuer, or bond guarantor, as the case may 
                be, has been given an opportunity for a hearing on the 
                record; and
                    (C) may provide for review by the Corporation of 
                any determination or order, or interlocutory ruling, 
                arising from a hearing.
            (2) Factors determining amount of penalty.--In determining 
        the amount of a penalty under this section, the Corporation 
        shall give consideration to factors including--
                    (A) the gravity of the offense;
                    (B) any history of prior offenses;
                    (C) ability to pay the penalty;
                    (D) injury to the public;
                    (E) benefits received;
                    (F) deterrence of future violations; and
                    (G) such other factors as the Corporation may 
                determine, by regulation, to be appropriate.
    (c) Action To Collect Penalty.--If the approved private mortgage 
insurer, servicer, issuer, or bond guarantor, as the case may be, fails 
to comply with an order by the Corporation imposing a civil money 
penalty under this section, the Corporation may bring an action in the 
United States District Court for the District of Columbia to obtain a 
monetary judgment against the approved private mortgage insurer, 
servicer, issuer, or bond guarantor, as the case may be, and such other 
relief as may be available. The monetary judgment may, in the court's 
discretion, include the attorneys' fees and other expenses incurred by 
the United States in connection with the action. In an action under 
this subsection, the validity and appropriateness of the order imposing 
the penalty shall not be subject to review.
    (d) Settlements.--The Corporation may compromise, modify, or remit 
any civil money penalty which may be, or has been, imposed under this 
section.
    (e) Deposit of Penalties.--The Corporation shall use any civil 
money penalties collected under this section to help fund the Mortgage 
Insurance Fund established under section 203.

SEC. 218. PROTECTION OF PRIVILEGE AND OTHER MATTERS RELATING TO 
              DISCLOSURES BY MARKET PARTICIPANTS.

    (a) Information Sharing and Maintenance of Privilege.--The Federal 
Deposit Insurance Act (12 U.S.C. 1811 et seq.) is amended--
            (1) in section 11(t)(2)(A) (12 U.S.C. 1821(t)(2)(A)), by 
        inserting after clause (v) the following:
                            ``(vii) The Federal Mortgage Insurance 
                        Corporation.''; and
            (2) in section 18(x) (12 U.S.C. 1828(x))--
                    (A) by inserting ``the Federal Mortgage Insurance 
                Corporation,'' before ``any Federal banking agency'' 
                each place that term appears; and
                    (B) by striking ``such agency'' each place that 
                term appears and inserting ``Corporation, agency''.
    (b) Permissible Consultation With Federal Banking Agencies.--
            (1) In general.--Pursuant to its authority under section 
        103(c), to facilitate the consultive process, the Corporation 
        may share information with the Federal banking agencies, or any 
        individual Federal banking agency, or any State bank 
        supervisor, or foreign banking authority, on a one-time, 
        regular, or periodic basis as determined by the Corporation 
        regarding the capital, asset and liabilities, financial 
        condition, risk management practices or any other practice of 
        any approved private mortgage insurer, servicer, issuer, or 
        bond guarantor.
            (2) Privilege preserved.--Information shared by the 
        Corporation pursuant to paragraph (1) shall not be construed as 
        waiving, destroying, or otherwise affecting any privilege or 
        confidential status that any approved private mortgage insurer, 
        servicer, issuer, or bond guarantor or any other person may 
        claim with respect to such information under Federal or State 
        law as to any person or entity other than such agencies, 
        agency, supervisor, or authority.
            (3) Rule of construction.--No provision of this subsection 
        may be construed as implying or establishing that--
                    (A) any person waives any privilege applicable to 
                information that is shared or transferred under any 
                circumstance to which this subsection does not apply; 
                or
                    (B) any person would waive any privilege applicable 
                to any information by submitting the information 
                directly to the Federal banking agencies, or any 
                individual Federal banking agency, or any State bank 
                supervisor, or foreign banking authority, but for this 
                subsection.

             Subtitle C--Transparency in Market Operations

SEC. 221. REVIEW OF LOAN DOCUMENTS; DISCLOSURES.

    (a) In General.--The Corporation shall, by rule--
            (1) require that approved issuers--
                    (A) grant access to private market investors 
                seeking to take the first loss position in a covered 
                security to all--
                            (i) documents relating to eligible mortgage 
                        loans collateralizing that covered security; 
                        and
                            (ii) servicing reports of the approved 
                        servicer relating to such mortgages; and
                    (B) disclose any other material information that a 
                reasonable investor would want to know, and make no 
                material omission of such information, relating to 
                eligible mortgage loans collateralizing a covered 
                security; and
            (2) establish the timing, frequency, and manner in which 
        such access and disclosures are made.
    (b) Privacy Protections.--In prescribing the rules required under 
this section, the Corporation shall take into consideration issues of 
consumer privacy and all statutes, rules, and regulations related to 
privacy of consumer credit information and personally identifiable 
information. Such rules shall expressly prohibit the identification of 
specific borrowers.

SEC. 222. INVESTOR IMMUNITY.

    Any private market investor that has taken the first loss position 
in a covered security or that has otherwise invested in any covered 
security insured under this Act shall have immunity and protection from 
civil liability under Federal and State law, and no cause of action may 
be brought under Federal or State law against such investor, with 
respect to whether or not eligible mortgages that collateralize a 
covered security insured under this Act have complied with the 
requirements of this Act, including, but not limited to, with respect 
to any underwriting requirements applicable to such mortgage, any 
representations or warranties made by an approved issuer or an approved 
bond guarantor with respect to such mortgages, or whether or not the 
terms of any uniform securitization agreement have been met.

SEC. 223. UNIFORM SECURITIZATION AGREEMENTS.

    (a) In General.--The Corporation shall develop, adopt, and publish 
standard uniform securitization agreements for covered securities which 
are insured under this Act.
    (b) Required Content.--The standard uniform securitization 
agreements required to be developed under subsection (a) shall include 
terms relating to--
            (1) pooling and servicing, including the development of 
        uniform standards and practices--
                    (A) regarding remittance schedules and payment 
                delays; and
                    (B) permitting the transfer of servicing rights, if 
                such transfer is determined to be in the best financial 
                interest of the investor, as such interest is 
                calculated on a net present value basis;
            (2) representations and warranties, including 
        representations and warranties as to compliance or conformity 
        with the requirements of this Act;
            (3) indemnification and remedies, including for the 
        restitution or indemnification of the Corporation with respect 
        to early term delinquencies of eligible mortgages 
        collateralizing a covered security;
            (4) the qualification, responsibilities, and duties of 
        trustees; and
            (5) any other terms or standards the Corporation determines 
        necessary or appropriate.
    (c) Defining Representation and Warranty Violations.--In developing 
the uniform securitization agreements required under subsection (a), 
the Corporation shall also develop, adopt, and publish clear and 
uniform standards that define and illustrate what actions, or omissions 
to act, comprise a violation of the representations and warranties 
clauses that are made a part of such agreements.
    (d) Consultation.--The Corporation shall work with industry groups, 
including servicers, originators, issuers, and mortgage investors to 
develop the uniform securitization agreements required under subsection 
(a).

SEC. 224. UNIFORM MORTGAGE DATABASE.

    (a) Uniform Mortgage Database.--The Corporation shall establish, 
operate, and maintain a database for the collection, public use, and 
dissemination of uniform loan level information on eligible mortgages 
relating to--
            (1) loan characteristics;
            (2) borrower information;
            (3) the property securing the eligible mortgages;
            (4) loan data required at the time of application for 
        insurance from the Corporation under this title;
            (5) the quality and consistency of appraisal and collateral 
        data on eligible mortgages;
            (6) industry-wide servicing data standards; and
            (7) such other data, datasets, information, facts, or 
        measurements as the Corporation determines appropriate to 
        improve and enhance loan quality and operational efficiencies 
        within the secondary mortgage market.
    (b) Considerations.--In establishing the database required under 
subsection (a), the Corporation shall take into consideration, build 
upon, and adopt to the extent the Corporation determines appropriate, 
the existing data standards set forth under the Uniform Mortgage Data 
Program initiative established by the Federal Housing Finance Agency.
    (c) Regulations.--The Corporation shall, by regulation--
            (1) establish the manner and form by which any loan level 
        information collected under subsection (a) may be accessed by 
        the public, including whether or not to establish a fee for 
        such access;
            (2) require that such loan level information be made 
        available to the public in a uniform manner, in a form designed 
        for ease and speed of access, ease and speed of downloading, 
        and ease and speed of use; and
            (3) ensure the protection of any personally identifiable 
        information contained in any information, or mix of 
        information, collected and made available for public access.
    (d) Monthly Update.--The database required under subsection (a) 
shall be updated not less frequently than once a month.

SEC. 225. ELECTRONIC REGISTRATION OF ELIGIBLE MORTGAGES.

    (a) Establishment of Electronic Registration System.--The 
Corporation shall establish, operate, and maintain an electronic 
registry system for eligible mortgages that collateralize a covered 
security insured under this Act in order to automate, centralize, 
standardize, and improve the process of tracking changes in servicing 
rights and beneficial ownership interests in such eligible mortgages.
    (b) Considerations.--In establishing the electronic registry system 
required under subsection (a), the Corporation shall take into 
consideration, build upon, and adopt to the extent the Corporation 
determines appropriate, any existing efforts of the Federal Housing 
Finance Agency or expertise among the private sector to develop a 
sound, efficient system for document custody and electronic 
registration of mortgages, notes, titles, and liens.

                       Subtitle D--FMIC Structure

SEC. 231. OFFICE OF UNDERWRITING.

    (a) Establishment.--There is established within the Federal 
Mortgage Insurance Corporation an Office of Underwriting which shall be 
headed by the Deputy Director of Underwriting, who shall be appointed 
by the Board of Directors.
    (b) Responsibilities.--The Office of Underwriting shall ensure, 
through oversight, analysis, and examination, that eligible mortgages 
that collateralize a covered security insured under this Act comply 
with the requirements of this Act, including with respect to--
            (1) the submission of complete and accurate loan data on 
        eligible mortgages;
            (2) the identification of ineligible mortgage loans;
            (3) assisting lenders with originating high-quality, lower-
        risk eligible mortgages; and
            (4) any other activity that the Director determines 
        appropriate.

SEC. 232. OFFICE OF SECURITIZATION.

    (a) Establishment.--There is established within the Federal 
Mortgage Insurance Corporation an Office of Securitization which shall 
be headed by the Deputy Director of Securitization, who shall be 
appointed by the Board of Directors.
    (b) Responsibilities.--
            (1) In general.--The Office of Securitization shall--
                    (A) oversee and supervise the common securitization 
                platform developed by the business entity announced by 
                the Federal Housing Finance Agency and established by 
                the enterprises, including by requiring that the 
                platform have system capabilities to permit the 
                issuance of multi-lender covered securities;
                    (B) ensure that credit unions, community and mid-
                size banks, and small non-depository lenders have 
                equitable access to any such platform, including 
                through the development and facilitation of options for 
                multi-lender pools of eligible mortgages to be 
                securitized and issued as covered securities through 
                such platform; and
                    (C) coordinate and consult with the Federal Home 
                Loan Bank System to establish a securitization platform 
                that addresses the needs of its members.
            (2) Rules for use of common securitization platform.--
                    (A) In general.--The Corporation, acting through 
                the Office of Securitization, may promulgate rules--
                            (i) regarding the use of the common 
                        securitization platform described under 
                        paragraph (1)(A); and
                            (ii) to permit securities other than 
                        covered securities to be issued through such 
                        platform for reasonable compensation.
                    (B) Content of rules.--Any rule that may be 
                promulgated under subparagraph (A) may include a 
                requirement that any security to be issued through the 
                common securitization platform be subject to a uniform 
                securitization agreement developed under section 223.
    (c) Establishment of Database To Provide Notice to Different 
Classes of Lien Holders.--The Office of Securitization shall establish, 
operate, and maintain a database that--
            (1) can be accessed by any holder of a lien on an eligible 
        mortgage;
            (2) identifies and tracks if a junior lien or any other 
        subordinate lien has been issued on the property securing an 
        eligible mortgage;
            (3) notifies, to the extent feasible, any senior or first 
        lien holder of the existence of such junior or subordinate 
        lien; and
            (4) informs--
                    (A) the senior or first lien holder of the monthly 
                performance of the junior or subordinate lien; and
                    (B) the junior or subordinate lien holder of the 
                monthly performance of the senior or first lien.

SEC. 233. OFFICE OF FEDERAL HOME LOAN BANK SUPERVISION.

    (a) Establishment.--There is established within the Federal 
Mortgage Insurance Corporation an Office of Federal Home Loan Bank 
Supervision which shall be headed by the Deputy Director of Federal 
Home Loan Bank Supervision, who shall be appointed by the Board of 
Directors.
    (b) Responsibilities.--The Office of Federal Home Loan Bank 
Supervision shall--
            (1) oversee, coordinate, and supervise the Federal Home 
        Loan Banks and the Federal Home Loan Bank System, including the 
        transition of all activities transferred to the Corporation 
        pursuant to section 301; and
            (2) supervise any authorized subsidiary of one or more 
        Federal Home Loan Banks that is approved as an approved issuer 
        pursuant to section 213(b)(2)(A)(ii), including with respect to 
        the initial capitalization of any such subsidiary.

  TITLE III--TRANSFER OF POWERS, PERSONNEL, AND PROPERTY TO FMIC FROM 
                                  FHFA

SEC. 301. POWERS AND DUTIES TRANSFERRED.

    (a) Federal Home Loan Bank Functions Transferred.--
            (1) Transfer of functions.--There are transferred to the 
        Corporation all functions of the Federal Housing Finance Agency 
        and the Director of the Federal Housing Finance Agency relating 
        to--
                    (A) the supervision of the Federal Home Loan Banks 
                and the Federal Home Loan Bank System; and
                    (B) all rulemaking authority of the Federal Housing 
                Finance Agency and the Director of the Federal Housing 
                Finance Agency relating to the Federal Home Loan Banks 
                and the Federal Home Loan Bank System.
            (2) Powers, authorities, rights, and duties.--The 
        Corporation shall succeed to all powers, authorities, rights, 
        and duties that were vested in the Federal Housing Finance 
        Agency and the Director of the Federal Housing Finance Agency, 
        including all conservatorship or receivership authorities, on 
        the day before the transfer date in connection with the 
        functions and authorities transferred under paragraph (1).
            (3) Effective date.--The transfer of functions under this 
        paragraph shall take effect on the transfer date.
    (b) Continuation and Coordination of Certain Actions.--
            (1) In general.--All regulations, orders, determinations, 
        and resolutions described under paragraph (2) shall remain in 
        effect according to the terms of such regulations, orders, 
        determinations, and resolutions, and shall be enforceable by or 
        against the Corporation until modified, terminated, set aside, 
        or superseded in accordance with applicable law by the 
        Corporation, any court of competent jurisdiction, or operation 
        of law.
            (2) Applicability.--A regulation, order, determination, or 
        resolution is described under this subsection if it--
                    (A) was issued, made, prescribed, or allowed to 
                become effective by--
                            (i) the Federal Housing Finance Agency; or
                            (ii) a court of competent jurisdiction, and 
                        relates to functions transferred by this Act;
                    (B) relates to the performance of functions that 
                are transferred by this section; and
                    (C) is in effect on the transfer date.
    (c) Disposition of Affairs.--During the period preceding the 
transfer date, the Director of the Federal Housing Finance Agency, for 
the purpose of winding up the affairs of the Federal Housing Finance 
Agency in connection with the performance of functions that are 
transferred by this section--
            (1) shall manage the employees of such Agency and provide 
        for the payment of the compensation and benefits of any such 
        employees which accrue before the transfer date; and
            (2) may take any other action necessary for the purpose of 
        winding up the affairs of the Office.
    (d) Use of Property and Services.--
            (1) Property.--The Corporation may use the property and 
        services of the Federal Housing Finance Agency to perform 
        functions which have been transferred to the Corporation until 
        such time as the Agency is abolished under section 303 to 
        facilitate the orderly transfer of functions transferred under 
        this section, any other provision of this Act, or any amendment 
        made by this Act to any other provision of law.
            (2) Agency services.--Any agency, department, or other 
        instrumentality of the United States, and any successor to any 
        such agency, department, or instrumentality, that was providing 
        supporting services to the Agency before the transfer date in 
        connection with functions that are transferred to the 
        Corporation shall--
                    (A) continue to provide such services, on a 
                reimbursable basis, until the transfer of such 
                functions is complete; and
                    (B) consult with any such agency to coordinate and 
                facilitate a prompt and reasonable transition.
    (e) Continuation of Services.--The Corporation may use the services 
of employees and other personnel of the Federal Housing Finance Agency, 
on a reimbursable basis, to perform functions which have been 
transferred to the Corporation for such time as is reasonable to 
facilitate the orderly transfer of functions pursuant to this section, 
any other provision of this Act, or any amendment made by this Act to 
any other provision of law.
    (f) Savings Provisions.--
            (1) Existing rights, duties, and obligations not 
        affected.--Subsection (a) and section 303 shall not affect the 
        validity of any right, duty, or obligation of the United 
        States, the Director of the Federal Housing Finance Agency, the 
        Federal Housing Finance Agency, or any other person, that 
        existed on the day before transfer date.
            (2) Continuation of suits.--No action or other proceeding 
        commenced by or against the Director of the Federal Housing 
        Finance Agency in connection with the functions that are 
        transferred to the Corporation under this section shall abate 
        by reason of the enactment of this Act, except that the 
        Corporation shall be substituted for the Director of the 
        Federal Housing Finance Agency as a party to any such action or 
        proceeding.
    (g) Conforming Amendments.--
            (1) Federal home loan bank act.--The Federal Home Loan Bank 
        Act (12 U.S.C. 1421 et seq.) is amended--
                    (A) by striking ``the Director'' and inserting 
                ``the Corporation'' each place that term appears;
                    (B) by striking ``The Director'' and inserting 
                ``The Corporation'' each place that term appears;
                    (C) by striking ``Chairman of the Director of 
                Governors'' and inserting ``Chairman of the Board of 
                Governors'' each place that term appears;
                    (D) by striking ``the Agency'' and inserting ``the 
                Corporation'' each place that term appears;
                    (E) in section 2, by striking paragraphs (11) and 
                (12) and inserting the following:
            ``(11) Corporation.--The term `Corporation' means the 
        Federal Mortgage Insurance Corporation established under title 
        I of the Housing Finance Reform and Taxpayer Protection Act of 
        2013.''; and
                    (F) in section 11(l)(5), in the header to such 
                paragraph, by striking ``of the director''.
            (2) Federal housing enterprises financial safety and 
        soundness act.--Section 1316 of the Federal Housing Enterprises 
        Financial Safety and Soundness Act of 1992 (12 U.S.C. 4516) is 
        amended--
                    (A) in subsection (a)--
                            (i) in the matter preceding paragraph (1), 
                        by striking ``the regulated entities'' and 
                        inserting ``each enterprise''; and
                            (ii) in paragraph (1), by striking ``and 
                        under section 20 of the Federal Home Loan Bank 
                        Act'';
                    (B) in subsection (b), by striking paragraph (2);
                    (C) in subsection (c)--
                            (i) by striking ``any regulated entity'' 
                        and inserting ``any enterprise'';
                            (ii) by striking ``the regulated entity'' 
                        and inserting ``the enterprise'';
                            (iii) by striking ``a regulated entity'' 
                        and inserting ``an enterprise'' each place that 
                        term appears;
                            (iv) by striking ``such regulated entity'' 
                        and inserting ``such enterprise'' each place 
                        that term appears; and
                            (v) by striking ``such entity'' and 
                        inserting ``such enterprise''; and
                    (D) in subsection (e)--
                            (i) by striking ``each regulated entity'' 
                        and inserting ``each enterprise''; and
                            (ii) by striking ``such regulated entity'' 
                        and inserting ``such enterprise''.
            (3) Right to financial privacy act of 1978.--Section 
        1113(o) of the Right to Financial Privacy Act of 1978 (12 
        U.S.C. 3413(o)) is amended--
                    (A) in the heading to the subsection, by ``Federal 
                Housing Finance Agency'' and inserting ``Federal 
                Mortgage Insurance Corporation'';
                    (B) by striking ``Federal Housing Finance Agency'' 
                and inserting ``Federal Mortgage Insurance 
                Corporation''; and
                    (C) by striking ``Federal Housing Finance 
                Agency's'' and inserting ``Federal Mortgage Insurance 
                Corporation's''.
            (4) Effective date.--The amendments made by this subsection 
        shall take effect on the transfer date.

SEC. 302. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FHFA.

    (a) Transfer.--Each employee of the Federal Housing Finance Agency 
that is employed in connection with functions that are transferred to 
the Corporation under section 301 shall be transferred to the 
Corporation for employment, not later than the transfer date, and such 
transfer shall be deemed a transfer of function for purposes of section 
3503 of title 5, United States Code.
    (b) Status of Employees.--The transfer of functions under this 
title, and the abolishment of the Federal Housing Finance Agency under 
section 303, may not be construed to affect the status of any 
transferred employee as an employee of an agency of the United States 
for purposes of any other provision of law.
    (c) Guaranteed Positions.--Each employee transferred under 
subsection (a) shall be guaranteed a position with the same status, 
tenure, grade, and pay as that held on the day immediately preceding 
the transfer.
    (d) Appointment Authority for Excepted Employees.--
            (1) In general.--In the case of an employee occupying a 
        position in the excepted service, any appointment authority 
        established under law or by regulations of the Office of 
        Personnel Management for filling such position shall be 
        transferred, subject to paragraph (2).
            (2) Decline of transfer.--The Corporation may decline a 
        transfer of authority under paragraph (1), to the extent that 
        such authority relates to a position excepted from the 
        competitive service because of its confidential, policymaking, 
        policy-determining, or policy-advocating character.
    (e) Reorganization.--If the Corporation determines, after the end 
of the 1-year period beginning on the transfer date, that a 
reorganization of the combined workforce is required, that 
reorganization shall be deemed a major reorganization for purposes of 
affording affected employee retirement under section 8336(d)(2) or 
8414(b)(1)(B) of title 5, United States Code.
    (f) Employee Benefit Programs.--
            (1) In general.--Any employee of the Federal Housing 
        Finance Agency accepting employment with the Corporation as a 
        result of a transfer under subsection (a) may retain, for 12 
        months after the date on which such transfer occurs, membership 
        in any employee benefit program of the Agency or the 
        Corporation, as applicable, including insurance, to which such 
        employee belongs on the transfer date if--
                    (A) the employee does not elect to give up the 
                benefit or membership in the program; and
                    (B) the benefit or program is continued by the 
                Corporation.
            (2) Cost differential.--
                    (A) In general.--The difference in the costs 
                between the benefits which would have been provided by 
                the Federal Housing Finance Agency and those provided 
                by this section shall be paid by the Corporation.
                    (B) Health insurance.--If any employee elects to 
                give up membership in a health insurance program or the 
                health insurance program is not continued by the 
                Corporation, the employee shall be permitted to select 
                an alternate Federal health insurance program not later 
                than 30 days after the date of such election or notice, 
                without regard to any other regularly scheduled open 
                season.

SEC. 303. ABOLISHMENT OF FHFA.

    Effective upon the FMIC certification date, the Federal Housing 
Finance Agency and the position of the Director of the Federal Housing 
Finance Agency are abolished.

SEC. 304. TRANSFER OF PROPERTY AND FACILITIES.

    Effective upon the FMIC certification date all property of the 
Federal Housing Finance Agency shall transfer to the Corporation.

SEC. 305. TECHNICAL AND CONFORMING AMENDMENTS.

    (a) Effective Date.--The amendments made by this section shall take 
effect on the date of enactment of this Act.
    (b) References in Federal Law.--On and after the date of enactment 
of this Act, any reference in Federal law to the Director of the 
Federal Housing Finance Agency or the Federal Housing Finance Agency, 
in connection with any function of the Director of the Federal Housing 
Finance Agency or the Federal Housing Finance Agency transferred under 
section 301, shall be deemed a reference to the Chairperson of the 
Federal Mortgage Insurance Corporation or the Federal Mortgage 
Insurance Corporation, as appropriate and consistent with the 
amendments made by this Act.
    (c) Title 18, United States Code.--Title 18, United States Code, is 
amended--
            (1) in section 1905, by inserting ``or the Federal Mortgage 
        Insurance Corporation'' after ``Federal Housing Finance 
        Agency'';
            (2) in section 212(c)(2)--
                    (A) in subparagraph (F), by striking ``; and'' and 
                inserting a semicolon;
                    (B) in subparagraph (G), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(H) the Federal Mortgage Insurance 
                Corporation.'';
            (3) in section 657, by inserting ``the Federal Mortgage 
        Insurance Corporation,'' after ``Federal Housing Finance 
        Agency,'';
            (4) in section 1006, by inserting ``the Federal Mortgage 
        Insurance Corporation,'' after ``Federal Housing Finance 
        Agency,''; and
            (5) in section 1014, by inserting ``the Federal Mortgage 
        Insurance Corporation,'' after ``Federal Housing Finance 
        Agency,''.
    (d) Flood Disaster Protection Act of 1973.--Section 102(b)(5) of 
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(b)(5)) is 
amended in subsection (b)(5), by inserting ``the Federal Mortgage 
Insurance Corporation,'' after ``Federal Housing Finance Agency,''.
    (e) Title 5, United States Code.--Title 5, United States Code, is 
amended--
            (1) in section 5313, by inserting the following new item 
        after the item relating to the Director of the Federal Housing 
        Finance Agency:
            ``Director of the Federal Mortgage Insurance 
        Corporation.''; and
            (2) in section 3132(a)(1)(D), by inserting ``the Federal 
        Mortgage Insurance Corporation,'' after ``Federal Housing 
        Finance Agency,''.
    (f) Sarbanes-Oxley Act.--Section 105(b)(5)(B)(ii)(II) of the 
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7215(b)(5)(B)(ii)(II)) is amended 
by inserting ``or the Chairperson of the Federal Mortgage Insurance 
Corporation'' after ``Director of the Federal Housing Finance Agency''.
    (g) Federal Deposit Insurance Act.--The Federal Deposit Insurance 
Act (12 U.S.C. 1811 et seq.) is amended--
            (1) in section 7(a)(2)(A), by inserting ``the Federal 
        Mortgage Insurance Corporation,'' after ``Federal Housing 
        Finance Agency,'' each place that term appears;
            (2) in section 8(e)(7)(A)(vi), by inserting ``, the Federal 
        Mortgage Insurance Corporation,'' after ``Federal Housing 
        Finance Agency'';
            (3) in section 11(t)(2)(A), by adding at the end the 
        following:
                            ``(viii) The Federal Mortgage Insurance 
                        Corporation.''; and
            (4) in section 33(e), by inserting ``, the Federal Mortgage 
        Insurance Corporation,'' after ``Federal Housing Finance 
        Agency''.
    (h) Riegle Community Development and Regulatory Improvement Act of 
1994.--Section 117(e) of the Riegle Community Development and 
Regulatory Improvement Act of 1994 (12 U.S.C. 4716(e)) is amended by 
inserting ``the Federal Mortgage Insurance Corporation,'' after 
``Federal Housing Finance Agency,''.
    (i) MAHRA Act of 1997.--Section 517(b)(4) of the Multifamily 
Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 1437f 
note) is amended by inserting ``the Federal Mortgage Insurance 
Corporation,'' after ``Federal Housing Finance Agency,''.
    (j) Title 44, United States Code.--Section 3502(5) of title 44, 
United States Code, is amended by inserting ``the Federal Mortgage 
Insurance Corporation,'' after ``Federal Housing Finance Agency,''.
    (k) Access to Local TV Act of 2000.--Section 1004(d)(2)(D)(iii) of 
the Launching Our Communities' Access to Local Television Act of 2000 
(47 U.S.C. 1103(d)(2)(D)(iii)) is amended by inserting ``or the Federal 
Mortgage Insurance Corporation,'' after ``Federal Housing Finance 
Agency''.
    (l) FIRREA.--The Financial Institutions Reform, Recovery, and 
Enhancement Act of 1989 is amended--
            (1) in section 1216--
                    (A) in subsection (a)--
                            (i) in paragraph (2), by striking ``; and'' 
                        and inserting a semicolon;
                            (ii) in paragraph (3), by striking the 
                        period and inserting ``; and''; and
                            (iii) by adding at the end the following:
            ``(4) the Federal Mortgage Insurance Corporation.''; and
                    (B) in subsection (c), by inserting ``the Federal 
                Mortgage Insurance Corporation,'' before ``and the 
                Federal Housing Finance Agency,'';
            (2) in section 402(e), by striking ``Federal Housing 
        Finance Agency'' each place that term appears and inserting 
        ``Federal Mortgage Insurance Corporation'';
            (3) in section 1124, by inserting ``the Federal Mortgage 
        Insurance Corporation,'' after ``Federal Housing Finance 
        Agency,'' each place that term appears; and
            (4) in section 1125(b), by inserting ``the Federal Mortgage 
        Insurance Corporation,'' after ``Federal Housing Finance 
        Agency,''.
    (m) EESA.--The Emergency Economic Stabilization Act of 2008 (12 
U.S.C. 5201 note) is amended--
            (1) in section 104(b)--
                    (A) in paragraph (4), by striking ``; and'' and 
                inserting a semicolon;
                    (B) in paragraph (5), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(6) the Federal Mortgage Insurance Corporation.''; and
            (2) in section 109(b), by inserting ``the Federal Mortgage 
        Insurance Corporation,'' after ``Federal Housing Finance 
        Agency,''.
    (n) Dodd-Frank Act.--The Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Public Law 111-203) is amended--
            (1) in section 342(g)(1)--
                    (A) in subparagraph (H), by striking ``; and'' and 
                inserting a semicolon;
                    (B) in subparagraph (I), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(J) the Federal Mortgage Insurance 
                Corporation.'';
            (2) in section 989E(a)(1), by adding at the end the 
        following:
                    ``(J) The Federal Mortgage Insurance 
                Corporation.''; and
            (3) in section 1481(b), by inserting ``the Federal Mortgage 
        Insurance Corporation,'' after ``Federal Housing Finance 
        Agency,''.
    (o) Housing and Urban-Rural Recovery Act.--Section 469 of the 
Housing and Urban-Rural Recovery Act of 1983 (12 U.S.C. 1701p-1) is 
amended, in the first sentence, by inserting ``the Federal Mortgage 
Insurance Corporation,'' after ``Federal Housing Finance Agency,''.
    (p) Neighborhood Reinvestment Corporation Act.--Section 606(c)(3) 
of the Neighborhood Reinvestment Corporation Act (42 U.S.C. 8105(c)(3)) 
is amended by inserting ``, the Federal Mortgage Insurance 
Corporation,'' after ``Federal Housing Finance Agency''.
    (q) Federal Insurance Office Act.--Section 313(r)(4) of title 31, 
United States Code, is amended by inserting ``the Federal Mortgage 
Insurance Corporation,'' after ``Federal Housing Finance Agency,''.
    (r) Commodity Exchange Act.--Section 1a(39)(E) of the Commodity 
Exchange Act (7 U.S.C. 1a(39)(E)) is amended--
            (1) by striking ``a regulated entity'' and inserting ``an 
        enterprise''; and
            (2) by inserting before the period at the end ``the Federal 
        Mortgage Insurance Corporation in the case of a swap dealer, 
        major swap participant, security-based swap dealer, or major 
        security-based swap participant that is a Federal Home Loan 
        Bank''.
    (s) Truth in Lending Act.--The Truth in Lending Act (15 U.S.C. 1601 
et seq.) is amended--
            (1) section 129H(b)(4), by inserting ``the Federal Mortgage 
        Insurance Corporation,'' after ``Federal Housing Finance 
        Agency,''; and
            (2) in section 129E--
                    (A) in subsection (g)(1), by inserting ``the 
                Federal Mortgage Insurance Corporation,'' after 
                ``Federal Housing Finance Agency,''; and
                    (B) in subsection (h), by inserting ``the Federal 
                Mortgage Insurance Corporation,'' after ``Federal 
                Housing Finance Agency,''.
    (t) FFIEC.--The first sentence of section 1011 of the Federal 
Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3310) 
is amended by inserting ``the Federal Mortgage Insurance Corporation,'' 
before ``and the Federal Housing Finance Agency''.

 TITLE IV--IMPROVING TRANSPARENCY, ACCOUNTABILITY, AND EFFICACY WITHIN 
                           AFFORDABLE HOUSING

SEC. 401. AFFORDABLE HOUSING ALLOCATIONS.

    (a) Fee and Allocation of Amounts.--Subject to subsection (b), and 
in addition to any fees for the provision of insurance established in 
accordance with title II, in each fiscal year the Corporation shall--
            (1) charge and collect a fee in an amount equal to not less 
        than 5 basis points and not more than 10 basis points for each 
        dollar of the outstanding principal balance of eligible 
        mortgages collateralizing covered securities for which 
        insurance is being provided under title II; and
            (2) allocate or otherwise transfer--
                    (A) 80 percent of such fee amounts to the Secretary 
                of Housing and Urban Development to fund the Housing 
                Trust Fund established under section 1338 of the 
                Federal Housing Enterprises Financial Safety and 
                Soundness Act of 1992 (12 U.S.C. 4568); and
                    (B) 20 percent of such fee amounts to the Secretary 
                of the Treasury to fund the Capital Magnet Fund 
                established under section 1339 of the Federal Housing 
                Enterprises Financial Safety and Soundness Act of 1992 
                (12 U.S.C. 4569).
    (b) Suspension of Contributions.--The Corporation may temporarily 
suspend allocations under subsection (a) upon a finding by the 
Corporation that such allocations are contributing, or would 
contribute, to the financial instability of the Mortgage Insurance Fund 
established under section 203.

SEC. 402. HOUSING TRUST FUND.

    Section 1338 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4568) is amended--
            (1) in subsection (a), by striking ``by the enterprises 
        under section 1337'' and inserting ``pursuant to section 401 of 
        the Housing Finance Reform and Taxpayer Protection Act of 
        2013'';
            (2) by repealing subsection (b); and
            (3) in subsection (c)--
                    (A) in paragraph (1), by striking ``Except as 
                provided in subsection (b), the'' and inserting 
                ``The'';
                    (B) in paragraph (4)(B), by striking ``other than 
                fiscal year 2009'';
                    (C) in paragraph (7)--
                            (i) in subparagraph (A), by striking ``; 
                        and'' and inserting a semicolon;
                            (ii) in subparagraph (B)(iv)--
                                    (I) by striking ``section 132'' and 
                                inserting ``section 1132''; and
                                    (II) by striking the period at the 
                                end and inserting a semicolon; and
                            (iii) by adding at the end the following:
                    ``(C) grants and loans, including through the use 
                of pilot programs of sufficient scale, to support the 
                research and development of sustainable homeownership 
                and affordable rental programs, provided that such 
                grant or loan amounts are used only for the benefit of 
                families whose income does not exceed 120 percent of 
                the area median income as determined by the Secretary, 
                with adjustments for family size; and
                    ``(D) provide limited credit enhancement, and other 
                forms of credit support, for product and services 
                that--
                            ``(i) will increase the rate of sustainable 
                        homeownership and affordable rental by 
                        individuals or families whose income does not 
                        exceed 120 percent of the area median income as 
                        determined by the Secretary, with adjustments 
                        for family size; and
                            ``(ii) might not otherwise be offered or 
                        supported by a pilot program of sufficient 
                        scale to determine the viability of such 
                        products and services in the private market.''; 
                        and
                    (D) in paragraph (10)--
                            (i) by amending subparagraph (A) to read as 
                        follows:
                    ``(A) Ensuring efficient use of grant amounts.--
                            ``(i) Use for certain eligible 
                        activities.--In each fiscal year, of the 
                        aggregate amount allocated to a State or State 
                        designated entity under this subsection--
                                    ``(I) 35 percent shall be used for 
                                activities under subparagraph (A) of 
                                paragraph (7);
                                    ``(II) 5 percent shall be used for 
                                activities under subparagraph (B) of 
                                paragraph (7); and
                                    ``(III) 60 percent shall be used 
                                for activities under subparagraphs (C) 
                                and (D) of paragraph (7).
                            ``(ii) Ensuring benefits for rural 
                        communities.--
                                    ``(I) In general.--In each fiscal 
                                year, of the aggregate amount allocated 
                                to a State or State designated entity 
                                under this subsection, the State or 
                                State designated entity shall ensure 
                                that, at a minimum, such amounts are 
                                distributed for the benefit of 
                                nonentitlement areas in that State in 
                                the same proportion that the total 
                                amount of nonentitlement areas in that 
                                State bears to the total amount of all 
                                areas in that State.
                                    ``(II) Targeted outreach to smaller 
                                communities.--In carrying out the 
                                requirement under subclause (I), each 
                                State or State designated entity shall 
                                in distributing amounts allocated to 
                                that State or State designated entity 
                                give priority to nonentitlement areas 
                                with a population of less than 20,000.
                                    ``(III) Definition of 
                                nonentitlement area.--For purposes of 
                                this clause, the term `nonentitlement 
                                area' has the same meaning given that 
                                term under section 102(a)(7) of the 
                                Housing and Community Development Act 
                                of 1974 (42 U.S.C. 5302(a)(7)).''; and
                            (ii) by striking subparagraph (E).

SEC. 403. CAPITAL MAGNET FUND.

    Section 1339 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992 (12 U.S.C. 4569) is amended--
            (1) in subsection (b)(1), by striking ``pursuant to section 
        1337'' and inserting ``pursuant to section 401 of the Housing 
        Finance Reform and Taxpayer Protection Act of 2013''; and
            (2) in subsection (h), by striking paragraph (7).

SEC. 404. ADDITIONAL TAXPAYER PROTECTIONS.

    (a) Ensuring Benefits Support Citizens and Lawful Permanent 
Residents.--The Secretary of Housing and Urban Development and the 
Secretary of the Treasury, respectively, shall ensure that grant 
amounts allocated to covered grantees, allocated by covered grantees to 
eligible recipients, or allocated to individuals by such eligible 
recipients are used for the benefit of only lawful permanent residents 
and citizens of the United States in carrying out the activities of--
            (1) the Housing Trust Fund; and
            (2) the Capital Magnet Fund.
    (b) Not To Be Used for Political Activities.--Consistent with the 
existing requirements under sections 1338(c)(10)(D) and section 
1339(h)(5) of the Federal Housing Enterprises Financial Safety and 
Soundness Act of 1992, the Secretary of Housing and Urban Development 
and the Secretary of the Treasury, respectively, shall ensure that 
grant amounts allocated by covered grantees to eligible recipients or 
allocated to individuals by such eligible recipients are not used for--
            (1) political activities;
            (2) advocacy;
            (3) lobbying, whether directly or through other parties;
            (4) influencing the selection, nomination, election, or 
        appointment of one or more candidates to any Federal, State or 
        local office;
            (5) personal counseling services;
            (6) travel expenses; and
            (7) preparing or providing advice on tax returns.
    (c) Penalties.--
            (1) Civil money penalty.--If an eligible recipient or any 
        other individual in receipt of grant amounts described by this 
        section violates any provision of subsection (a) or (b), the 
        Secretary of Housing and Urban Development or the Secretary of 
        the Treasury, as the case may be, may impose a civil penalty on 
        such recipient or individual, as the case may be, of not more 
        than $1,000,000 for each violation.
            (2) Criminal penalties.--Whoever, being subject to the 
        provisions of subsection (a) or (b), knowingly participates, 
        directly or indirectly, in any manner in conduct that results 
        in a violation of such provisions shall, notwithstanding 
        section 3571 of title 18, United States Code, be fined not more 
        than $1,000,000 for each violation, imprisoned for not more 
        than 5 years, or both.
            (3) Rule of construction.--The penalties imposed under 
        paragraphs (1) or (2) shall be in addition to any other 
        available civil remedy or any other available criminal penalty 
        and may be imposed whether or not the Secretary of Housing and 
        Urban Development or the Secretary of the Treasury, as the case 
        may be, imposes other administrative sanctions.
    (d) Definition.--As used in this section--
            (1) the term ``covered grantee'' means--
                    (A) for purposes of the Housing Trust Fund, a State 
                or State designated entity; and
                    (B) for purposes of the Capital Magnet Fund, an 
                eligible grantee as described under section 1339(e) of 
                the Federal Housing Enterprises Financial Safety and 
                Soundness Act of 1992;
            (2) the term ``eligible recipient'' means--
                    (A) for purposes of the Housing Trust Fund, a 
                recipient as described under section 1338(c)(9) of the 
                Federal Housing Enterprises Financial Safety and 
                Soundness Act of 1992t; and
                    (B) for purposes of the Capital Magnet Fund, a 
                recipient of assistance from the Capital Magnet Fund;
            (3) the term ``Capital Magnet Fund'' means the Capital 
        Magnet Fund established under section 1339 of the Federal 
        Housing Enterprises Financial Safety and Soundness Act of 1992 
        (12 U.S.C. 4569); and
            (4) the term ``Housing Trust Fund'' means the Housing Trust 
        Fund established under section 1338 of the Federal Housing 
        Enterprises Financial Safety and Soundness Act of 1992 (12 
        U.S.C. 4568).

            TITLE V--WIND DOWN OF FANNIE MAE AND FREDDIE MAC

SEC. 501. REPEAL OF GSE CHARTERS.

    (a) Fannie Mae.--Effective on the FMIC certification date, the 
charter of the Federal National Mortgage Association is repealed and 
the Federal National Mortgage Association shall have no authority to 
conduct new business under such charter, except that the provisions of 
such charter in effect immediately before such repeal shall continue to 
apply with respect to the rights and obligations of any holders of--
            (1) outstanding debt obligations of the Federal National 
        Mortgage Association, including any--
                    (A) bonds, debentures, notes, or other similar 
                instruments;
                    (B) capital lease obligations; or
                    (C) obligations in respect of letters of credit, 
                bankers' acceptances, or other similar instruments; or
            (2) mortgage-backed securities guaranteed by the Federal 
        National Mortgage Association.
    (b) Freddie Mac.--Effective on the FMIC certification date, the 
charter of the Federal Home Loan Mortgage Corporation is repealed and 
the Federal Home Loan Mortgage Corporation shall have no authority to 
conduct new business under such charter, except that the provisions of 
such charter in effect immediately before such repeal shall continue to 
apply with respect to the rights and obligations of any holders of--
            (1) outstanding debt obligations of the Federal Home Loan 
        Mortgage Corporation, including any--
                    (A) bonds, debentures, notes, or other similar 
                instruments;
                    (B) capital lease obligations; or
                    (C) obligations in respect of letters of credit, 
                bankers' acceptances, or other similar instruments; or
            (2) mortgage-backed securities guaranteed by the Federal 
        Home Loan Mortgage Corporation.
    (c) Existing Guarantee Obligations.--
            (1) Explicit guarantee.--The full faith and credit of the 
        United States is pledged to the payment of all amounts which 
        may be required to be paid under any obligation described under 
        subsections (a) and (b).
            (2) Continued dividend payments.--Notwithstanding section 
        502 or any other provision of law, and subject to section 601, 
        provision 2(a) (relating to Dividend Payment Dates and Dividend 
        Periods) and provision 2(c) (relating to Dividend Rates and 
        Dividend Amount) of the Senior Preferred Stock Purchase 
        Agreement, or any provision of any certificate in connection 
        with such Agreement creating or designating the terms, powers, 
        preferences, privileges, limitations, or any other conditions 
        of the Variable Liquidation Preference Senior Preferred Stock 
        of an enterprise issued pursuant to such Agreement--
                    (A) shall not be amended, restated, or otherwise 
                changed to reduce the rate or amount of dividends in 
                effect pursuant to such Agreement as of the Third 
                Amendment to such Agreement dated August 17, 2012, 
                except that any amendment to such Agreement to 
                facilitate the sale of assets of the enterprises to 
                facilitate compliance with the provisions of section 
                502(b) shall be permitted; and
                    (B) shall remain in effect until the guarantee 
                obligations described under subsections (a)(2) and 
                (b)(2) are fully extinguished.
            (3) Applicability.--Notwithstanding section 502, all 
        guarantee fee amounts derived from the single-family mortgage 
        guarantee business of the enterprises in existence as of the 
        FMIC certification date shall be subject to the terms of the 
        Senior Preferred Stock Purchase Agreement.
    (d) Federal Safety and Soundness Act.--
            (1) In general.--The Federal Housing Enterprises Financial 
        Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
        amended--
                    (A) in section 1303--
                            (i) in paragraph (2), by striking 
                        ``'Federal Housing Finance Agency'' and 
                        inserting ``Federal Mortgage Insurance 
                        Corporation'';
                            (ii) in paragraph (3), by striking 
                        ``means'' and all that follows through the 
                        period at the end, and inserting ``means the 
                        Federal Home Loan Bank Act.'';
                            (iii) by repealing paragraph (4); and
                            (iv) in paragraph (9), by striking 
                        ``Director of the Federal Housing Finance 
                        Agency'' and inserting ``Board of Directors of 
                        the Federal Mortgage Insurance Corporation'';
                    (B) by repealing section 1313A; and
                    (C) by repealing section 1317(d).
            (2) Effective date.--The amendments made by paragraph (1) 
        shall take effect on the FMIC certification date.

SEC. 502. WIND DOWN.

    (a) Wind Down.--
            (1) Authority of fhfa.--Beginning on the date of enactment 
        of this Act and ending on the FMIC certification date, the 
        Director of the Federal Housing Finance Agency, in consultation 
        with the Corporation and the Secretary of the Treasury, shall 
        take such action, and may prescribe such regulations and 
        procedures, as may be necessary to wind down the operations of 
        the enterprises in an orderly manner that complies with the 
        requirements of this Act and any amendments made by this Act.
            (2) Limitation.--Notwithstanding any authority granted to 
        the Director of the Federal Housing Finance Agency under 
        paragraph (1), the sale, transfer, exchange, or other 
        disposition of any asset subject to the wind down required 
        under this section shall be prohibited, if the Corporation--
                    (A) in its discretion determines that such sale, 
                transfer, exchange, or disposition would materially 
                interfere with the ability of the Corporation to carry 
                out the requirements of this Act; and
                    (B) notifies, in writing, the Director of the 
                Federal Housing Finance Agency within 14 days of such 
                determination.
            (3) Rule of construction.--Notwithstanding any authority 
        granted to the Director of the Federal Housing Finance Agency 
        under paragraph (1), the Director of the Federal Housing 
        Finance Agency--
                    (A) shall have no authority to sell, transfer, 
                exchange, or otherwise dispose of any guarantee 
                obligations described under subsections (a)(2) and 
                (b)(2) of section 501; and
                    (B) shall have no rights, claims, or title to, nor 
                any authority to sell, transfer, exchange, or otherwise 
                dispose of, guarantee fee amounts derived from the 
                single-family mortgage guarantee business of the 
                enterprises in existence as of the FMIC certification 
                date.
    (b) Division of Assets and Liabilities; Authority To Establish 
Holding Corporation and Dissolution Trust Fund.--The action and 
procedures required under subsection (a)--
            (1) shall include the establishment and execution of plans 
        to provide for an equitable division, distribution, and 
        liquidation of the assets and liabilities of an enterprise, 
        including any infrastructure, property, including intellectual 
        property, platforms, or any other thing or object of value, 
        provided such plan complies with the requirements of this Act 
        and any amendments made by this Act; and
            (2) may provide for establishment of--
                    (A) a holding corporation organized under the laws 
                of any State of the United States or the District of 
                Columbia for the purpose of winding down an enterprise; 
                and
                    (B) one or more trusts to which to transfer--
                            (i) outstanding debt obligations of an 
                        enterprise; or
                            (ii) outstanding mortgages held for the 
                        purpose of collateralizing mortgage-backed 
                        securities guaranteed by an enterprise.
    (c) Recoupment by Senior Preferred Shareholders.--
            (1) In general.--Subject to the requirements of this Act, 
        any proceeds from the wind down of an enterprise shall be paid 
        first to the senior preferred shareholders of each such 
        enterprise, then to the preferred shareholders of each such 
        enterprise, and then to the common shareholders of each such 
        enterprise.
            (2) Joint determination.--The amount of any proceeds to be 
        paid pursuant to paragraph (1) shall be jointly determined by 
        the Director of the Federal Housing Finance Agency, the 
        Corporation, and the Secretary of the Treasury.
            (3) Maximum return to shareholders.--The wind down of each 
        enterprise required under this section shall be managed by the 
        Director of the Federal Housing Finance Agency, in consultation 
        with the Corporation and the Secretary of the Treasury, to 
        obtain resolutions that maximize the return for the senior 
        preferred shareholders under paragraph (1), to the extent that 
        such resolutions--
                    (A) are consistent with the goal of supporting a 
                sound, stable, and liquid housing market;
                    (B) are consistent with applicable Federal and 
                State law;
                    (C) comply with the requirements of this Act and 
                any amendments made by this Act; and
                    (D) protect the taxpayer.
            (4) Sale of certain assets as a going concern.--Except as 
        provided in section 601 or elsewhere as required in this Act, 
        if the Director of the Federal Housing Finance Agency, in 
        consultation with the Corporation and the Secretary of the 
        Treasury, determines that the sale of any line of business, or 
        any function, activity, or service of an enterprise as a going 
        concern will maximize the return for the senior preferred 
        shareholders as required under paragraph (3), the Director may 
        conduct such sale, provided that--
                    (A) under no circumstance, shall such sale 
                transfer, convey, or authorize, or be deemed to 
                transfer, convey, or authorize, any guarantee or 
                Federal support, assistance, or backing, implicit or 
                explicit, related to any such line of business, 
                function, activity, or service; and
                    (B) such sale does not impede or otherwise 
                interfere with the ability of the Federal Mortgage 
                Insurance Corporation to carry out the functions and 
                requirements of this Act.
            (5) Rule of construction.--For purposes of this subsection, 
        the term ``proceeds'' does not include any guarantee fee 
        amounts derived from the single-family mortgage guarantee 
        business of the enterprises in existence as of the FMIC 
        certification date.

SEC. 503. ALIGNING PURPOSE OF CONSERVATORSHIP WITH FMIC.

    (a) Power as Conservator.--Section 1367(b)(2)(D) of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992 (12 
U.S.C. 4617(b)(2)(D)) is amended to read as follows:
                    ``(D) Power as conservator.--After the date of 
                enactment of the Housing Finance Reform and Taxpayer 
                Protection Act of 2013 the Agency shall, as 
                conservator, take such actions as are necessary--
                            ``(i) to ensure the efficient, effective, 
                        and expeditious wind down of the enterprises;
                            ``(ii) to manage the affairs, assets, and 
                        obligations of the enterprises and to operate 
                        the enterprises in compliance with the 
                        requirements of the Housing Finance Reform and 
                        Taxpayer Protection Act of 2013;
                            ``(iii) to assist the Federal Mortgage 
                        Insurance Corporation, in a consultative 
                        capacity, in carrying out the requirements 
                        under the Housing Finance Reform and Taxpayer 
                        Protection Act of 2013; and
                            ``(iv) to maintain liquidity and stability 
                        in the secondary mortgage market until such as 
                        time as the charters of the enterprises are 
                        revoked pursuant to title V of such Act.''.
    (b) Rule of Construction.--Nothing in this Act, or any amendments 
made by this Act, except as may be explicitly provided for in this Act, 
or any amendment made by this Act, shall be deemed to alter the powers, 
authorities, rights, and duties that are vested in the Federal Housing 
Finance Agency and the Director of the Federal Housing Finance Agency 
with respect to its supervision and regulation of the enterprises.

SEC. 504. CONFORMING LOAN LIMITS.

    (a) In General.--Beginning on the date of enactment of this Act, 
the limitations governing the maximum original principal obligation of 
conventional mortgages that may be purchased by the Federal National 
Mortgage Association and the Federal Home Loan Mortgage Corporation, 
referred to in section 302(b)(2) of the Federal National Mortgage 
Association Charter Act (12 U.S.C. 1717(b)(2)) and section 305(a)(2) of 
the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), 
respectively, shall not exceed $417,000 for a mortgage secured by a 
single-family residence, $533,850 for a mortgage secured by a 2-family 
residence, $645,300 for a mortgage secured by a 3-family residence, and 
$801,950 for a mortgage secured by a 4-family residence, except that 
such maximum limitations shall be adjusted effective January 1 of each 
year beginning after the date of enactment of this Act, subject to the 
limitations in this paragraph. Each adjustment shall be made by adding 
to each such amount (as it may have been previously adjusted) a 
percentage thereof equal to the percentage increase, during the most 
recent 12-month or 4-quarter period ending before the time of 
determining such annual adjustment, in the housing price index 
maintained pursuant to section 1322 of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4542). If the 
change in such house price index during the most recent 12-month or 4-
quarter period ending before the time of determining such annual 
adjustment is a decrease, then no adjustment shall be made for the next 
year, and the next adjustment shall take into account prior declines in 
the house price index, so that any adjustment shall reflect the net 
change in the house price index since the last adjustment. Declines in 
the house price index shall be accumulated and then reduce increases 
until subsequent increases exceed prior declines.
    (b) Special Exception for Alaska, Hawaii, Guam, and USVI.--The 
limitations set forth under subsection (a) shall be increased by not to 
exceed 50 per centum with respect to properties located in Alaska, 
Guam, Hawaii, and the Virgin Islands.
    (c) High-Cost Area Limit.--The limitations set forth under 
subsection (a) shall also be increased, with respect to properties of a 
particular size located in any area for which 115 percent of the median 
house price for such size residence exceeds the limitation under 
subsection (a) for such size residence--
            (1) for the first year following the date of enactment of 
        this Act, to the lesser of 150 percent of such limitation for 
        such size residence or the amount that is equal to 115 percent 
        of the median house price in such area for such size residence;
            (2) for the second year following the date of enactment of 
        this Act, to the lesser of 145 percent of such limitation for 
        such size residence or the amount that is equal to 115 percent 
        of the median house price in such area for such size residence;
            (3) for the third year following the date of enactment of 
        this Act, to the lesser of 135 percent of such limitation for 
        such size residence or the amount that is equal to 115 percent 
        of the median house price in such area for such size residence;
            (4) for the fourth year following the date of enactment of 
        this Act, to the lesser of 130 percent of such limitation for 
        such size residence or the amount that is equal to 115 percent 
        of the median house price in such area for such size residence; 
        and
            (5) for the fifth year following the date of enactment of 
        this Act, and each year thereafter, to the lesser of 125 
        percent of such limitation for such size residence or the 
        amount that is equal to 115 percent of the median house price 
        in such area for such size residence.

SEC. 505. PORTFOLIO REDUCTION.

    (a) Graduated Reduction.--
            (1) In general.--Each enterprise shall not own, as of any 
        applicable date, mortgage assets in excess of--
                    (A) as of December 31, 2013, $552,500,000,000; and
                    (B) on December 31 of each year thereafter until 
                the FMIC certification date, 85 percent of the 
                aggregate amount of the mortgage assets that the 
                enterprise was permitted to own as of December 31 of 
                the immediately preceding calendar year.
            (2) Retained portfolio to facilitate orderly wind down.--On 
        December 31 of the year in which the FMIC certification date 
        occurs, the Corporation shall establish an allowable amount of 
        enterprise owned mortgage assets in an amount equal to the 
        amount necessary to facilitate--
                    (A) the orderly wind down of the enterprises; and
                    (B) appropriate loss mitigation on any legacy 
                guarantees of the enterprises.
    (b) Mortgage Assets Defined.--For purposes of this section, the 
term ``mortgage assets'' means, with respect to an enterprise, assets 
of such enterprise consisting of mortgages, mortgage loans, mortgage-
related securities, participation certificates, mortgage-backed 
commercial paper, obligations of real estate mortgage investment 
conduits and similar assets, in each case to the extent such assets 
would appear on the balance sheet of such enterprise in accordance with 
generally accepted accounting principles in effect in the United States 
as of September 7, 2008 (as set forth in the opinions and 
pronouncements of the Accounting Principles Board and the American 
Institute of Certified Public Accountants and statements and 
pronouncements of the Financial Accounting Standards Board from time to 
time; and without giving any effect to any change that may be made 
after September 7, 2008, in respect of Statement of Financial 
Accounting Standards No. 140 or any similar accounting standard).

SEC. 506. REPEAL OF MANDATORY HOUSING GOALS.

    (a) Repeal of Housing Goals.--The Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 is amended by striking 
sections 1331 through 1336 (12 U.S.C. 4561-6).
    (b) Conforming Amendments.--The Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
amended--
            (1) in section 1303(28), by striking ``, and, for the 
        purposes'' and all that follows through ``designated disaster 
        areas'';
            (2) in section 1324(b)(1)(A), by striking clauses (i), 
        (ii), and (iv);
            (3) in section 1341--
                    (A) in subsection (a)--
                            (i) in paragraph (1), by inserting ``or'' 
                        after the semicolon at the end;
                            (ii) in paragraph (2), by striking the 
                        semicolon at the end and inserting a period; 
                        and
                            (iii) by striking paragraphs (3) and (4); 
                        and
                    (B) in subsection (b)(2)--
                            (i) in subparagraph (A), by inserting 
                        ``or'' after the semicolon at the end;
                            (ii) by striking subparagraphs (B) and (C); 
                        and
                            (iii) by redesignating subparagraph (D) as 
                        subparagraph (B);
            (4) in section 1345(a)--
                    (A) in paragraph (1), by inserting ``or'' after the 
                semicolon at the end;
                    (B) in paragraph (2), by striking the semicolon at 
                the end and inserting a period; and
                    (C) by striking paragraphs (3) and (4); and
            (5) in section 1371(a)(2), by striking ``with any housing 
        goal established under subpart B of part 2 of subtitle A of 
        this title, with section 1336 or 1337 of this title,''.

        TITLE VI--IMPROVEMENTS TO FUNCTIONING OF HOUSING MARKET

SEC. 601. CONTINUATION OF MULTIFAMILY BUSINESS OF THE ENTERPRISES.

    (a) In General.--Notwithstanding any provision of title V, or any 
other provision of law, effective on the FMIC certification date, all 
functions, activities, infrastructure, property, including intellectual 
property, platforms, or any other object or service of an enterprise 
relating to the maintenance and operation of the multifamily guarantee 
business of an enterprise shall be transferred, without cost, to the 
Corporation.
    (b) Authority of Director.--The Corporation is authorized, upon 
such terms and conditions as it may deem appropriate, to guarantee the 
timely payment of principal of and interest, on any mortgage on 
multifamily housing purchased by the Corporation pursuant to the 
transfer of an enterprise's multifamily guarantee business under 
subsection (a).
    (c) Limitation on Ongoing Operation of Multifamily Business.--In 
carrying out the multifamily guarantee business of an enterprise 
transferred pursuant to subsection (a), the Corporation shall ensure 
that any such business continues to operate, as applicable, consistent 
with--
            (1) the Delegated Underwriting and Servicing Lender Program 
        established by the Federal National Mortgage Association; and
            (2) the Program Plus Lender Program established by the 
        Federal Home Loan Mortgage Corporation, especially the Series K 
        Structured Pass-Through Certificates offered by the enterprise.
    (d) Explicit Guarantee.--The full faith and credit of the United 
States is pledged to the payment of all amounts which may be required 
to be paid under any guaranty--
            (1) issued by the Corporation pursuant to this subsection; 
        and
            (2) obligation assumed by the Corporation pursuant to the 
        transfer of an enterprise's multifamily guarantee business 
        under subsection (a).
    (e) Guarantee Fee.--
            (1) In general.--The Corporation shall collect a reasonable 
        fee for any guaranty under this subsection and shall make such 
        charges as it may determine to be reasonable for the analysis 
        of any trust or other security arrangement proposed by an 
        issuer of a security backed by multifamily mortgages guaranteed 
        under this section.
            (2) Deposit into mortgage insurance fund.--Any guarantee 
        fee amounts collected under this subsection shall be deposited 
        in the Mortgage Insurance Fund.

SEC. 602. MULTIPLE LENDER ISSUES.

    With respect to the dwelling of a borrower that serves as security 
for an eligible mortgage, if the borrower enters into any credit 
transaction that would result in the creation of a new mortgage or 
other lien on such dwelling where the loan-to-value ratio of such 
credit transaction amount is 80 percent or more, the creditor of such 
new mortgage or other lien shall seek and obtain the approval of the 
creditor of the senior eligible mortgage loan before any such credit 
transaction becomes valid and enforceable.

SEC. 603. GAO REPORT ON FULL PRIVATIZATION OF SECONDARY MORTGAGE 
              MARKET.

    (a) GAO Report.--Not later than 8 years after the date of enactment 
of this Act, the Comptroller General of the United States shall submit 
a report to the Committee on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Services of the House of 
Representatives on the feasibility of maintaining a fully privatized 
secondary mortgage market, including recommendations on how to best 
carry out any displacement of the insurance model established under 
this Act.
    (b) Corporation Plan To Transition to a Fully Private Secondary 
Mortgage Market.--
            (1) Required submission to congress.--Not later than 6 
        months after the date on which the report required under 
        subsection (a) is submitted, the Corporation shall submit to 
        the Committee on Banking, Housing, and Urban Affairs of the 
        Senate and the Committee on Financial Services of the House of 
        Representatives a plan to transition to a fully privatized 
        secondary mortgage market.
            (2) Required content of plan.--The plan required to be 
        submitted under paragraph (1) shall describe, chronicle, and 
        specify all the legislative, administrative, and regulatory 
        actions necessary to carry out a transition to a fully private 
        secondary mortgage market, including all actions necessary to 
        dissolve the Corporation and successfully displace the 
        insurance model established under this Act.

                     TITLE VII--GENERAL PROVISIONS

SEC. 701. AUTHORITY TO ISSUE REGULATIONS.

    The Corporation may prescribe such regulations and issue such 
guidelines, orders, requirements, or standards as are necessary to 
carry out this Act, or any amendment made by this Act.

SEC. 702. FAIR VALUE ACCOUNTING.

    In any evaluation, oversight, audit, or analysis by the Corporation 
of the cost of the Mortgage Insurance Fund, the insurance or guarantee 
activities of the Corporation required under this Act, including any 
fee or charge in connection with the provision of such insurance or 
guarantee, or the financial transactions of the Corporation, the 
Corporation shall conduct any such evaluation, oversight, audit, or 
analysis based on the fair-value accrual accounting method.

SEC. 703. RULE OF CONSTRUCTION.

    Nothing in this Act shall be construed to prohibit or otherwise 
restrict the ability of a holder of any loss position in any covered 
security insured under this Act from restructuring, retranching, or 
resecuritizing such position.

SEC. 704. SEVERABILITY.

    If any provision of this Act or the application of any provision of 
this Act to any person or circumstance, is held invalid, the 
application of such provision to other persons or circumstances, and 
the remainder of this Act, shall not be affected thereby.
                                 <all>
```