II 

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. 

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Housing Finance Reform and Taxpayer Protection Act 

6 of 2013’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

TITLE I—FEDERAL MORTGAGE INSURANCE CORPORATION 


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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. 


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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. 

1 SEC. 2. DEFINITIONS. 

2 As used in this Act, the following definitions shall 

3 apply: 

4 (1) APPROVED BOND GUARANTOR.—The term 

5 ‘‘approved bond guarantor’’ means any entity that 

6 provides credit enhancement that is approved by the 

7 Corporation pursuant to section 214 to guarantee 

8 the timely payment of principal and interest on secu9 rities collateralized by eligible mortgages and insured 

10 by the Corporation. 


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1 (2) APPROVED ISSUER.—The term ‘‘approved 

2 issuer’’ means an issuer that is approved by the Cor3 poration pursuant to section 213— 

4 (A) to issue covered securities; and 

5 (B) to purchase insurance offered by the 

6 Corporation pursuant to title II on a covered 

7 security for which first loss credit enhancement 

8 has been secured. 

9 (3) APPROVED PRIVATE MORTGAGE INSURER.— 

10 The term ‘‘approved private mortgage insurer’’ 

11 means an insurer that is approved by the Corpora12 tion pursuant to section 211 to provide private mort13 gage insurance on eligible mortgages. 

14 (4) APPROVED SERVICER.—The term ‘‘ap15 proved servicer’’ means a servicer that is approved 

16 by the Corporation pursuant to section 212 to ad17 minister eligible mortgages. 

18 (5) AREA.—The term ‘‘area’’— 

19 (A) means a metropolitan statistical area 

20 as established by the Office of Management and 

21 Budget; and 

22 (B) for purposes of paragraph (11)(A)(ii), 

23 the median 1-family house price for an area 

24 shall be equal to the median 1-family house 


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1 price of the county within the area that has the 

2 highest such median price. 

3 (6) BOARD; BOARD OF DIRECTORS.—The terms 

4 ‘‘Board’’ and ‘‘Board of Directors’’ mean the Board 

5 of Directors of the Federal Mortgage Insurance Cor6 poration. 

7 (7) CHARTER.—The term ‘‘charter’’ means— 

8 (A) with respect to the Federal National 

9 Mortgage Association, the Federal National 

10 Mortgage Association Charter Act (12 U.S.C. 

11 1716 et seq.); and 

12 (B) with respect to the Federal Home 

13 Loan Mortgage Corporation, the Federal Home 

14 Loan Mortgage Corporation Act (12 U.S.C. 

15 1451 et seq.). 

16 (8) CORPORATION.—The term ‘‘Corporation’’ 

17 means the Federal Mortgage Insurance Corporation 

18 established under title I. 

19 (9) COVERED SECURITY.—The term ‘‘covered 

20 security’’ means a mortgage-backed security— 

21 (A) collateralized by eligible mortgages; 

22 (B) which is issued subject to a standard 

23 form credit-risk sharing mechanism, product, 

24 structure, contract, or other securitization 


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1 agreement developed by the Corporation pursu2 ant to title II; and 

3 (C) which is eligible for insurance by the 

4 Corporation pursuant to title II, which insur5 ance is purchased by an approved issuer who 

6 issues covered securities. 

7 (10) DIRECTOR.—The term ‘‘Director’’ means 

8 the Director of the Federal Mortgage Insurance Cor9 poration, unless the context otherwise requires. 

10 (11) ELIGIBLE MORTGAGE.—The term ‘‘eligible 

11 mortgage’’ means a mortgage— 

12 (A) that is a residential real estate loan se13 cured by a property with 1 to 4 single family 

14 units that has been originated in compliance 

15 with the provisions of section 1026 of title 12 

16 of the Code of Federal Regulations, as promul17 gated by the Bureau of Consumer Financial 

18 Protection pursuant to section 129C(b) of the 

19 Truth in Lending Act (15 U.S.C. 1639c(b)) 

20 (commonly referred to as the ‘‘Ability-to-Repay 

21 and Qualified Mortgage Rule’’); 

22 (B) has a maximum original principal obli23 gation amount that does not exceed the con24 forming loan limitation determined under sec25 tion 504; 


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1 (C) the outstanding principal balance of 

2 which at the time of purchase of insurance 

3 available under title II— 

4 (i) is less than 80 percent of the value 

5 of the property securing the mortgage; 

6 (ii) is not less than 80 percent but not 

7 more than 85 percent of the value of the 

8 property securing the mortgage, provided 

9 that not less than 12 percent of the unpaid 

10 principal balance of the mortgage, account11 ing for any downpayment required under 

12 subparagraph (D), is insured by— 

13 (I) an approved private mortgage 

14 insurer; or 

15 (II) lender recourse or other 

16 credit enhancement that— 

17 (aa) meets standards com18 parable to the standards required 

19 of private mortgage insurers 

20 under section 211; and 

21 (bb) is approved by the Cor22 poration; 

23 (iii) is not less than 85 percent but 

24 not more than 90 percent of the value of 

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1 vided that not less than 25 percent of the 

2 unpaid principal balance of the mortgage, 

3 accounting for any downpayment required 

4 under subparagraph (D), is insured by— 

5 (I) an approved private mortgage 

6 insurer; or 

7 (II) lender recourse or other 

8 credit enhancement that— 

9 (aa) meets standards com10 parable to the standards required 

11 of private mortgage insurers 

12 under section 211; and 

13 (bb) is approved by the Cor14 poration; or 

15 (iv) is not less than 90 percent but 

16 not more than 95 percent of the value of 

17 the property securing the mortgage, pro18 vided that not less than 30 percent of the 

19 unpaid principal balance of the mortgage, 

20 accounting for any downpayment required 

21 under subparagraph (D), is insured by— 

22 (I) an approved private mortgage 

23 insurer; or 

24 (II) lender recourse or other 

25 credit enhancement that— 


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1 (aa) meets standards com2 parable to the standards required 

3 of private mortgage insurers 

4 under section 211; and 

5 (bb) is approved by the Cor6 poration; 

7 (D) having a downpayment which shall be 

8 equal to not less than 5 percent of purchase 

9 price of the property securing the mortgage; 

10 (E) that is insured by an approved State 

11 licensed title insurance company; 

12 (F) that contains such terms and provi13 sions with respect to insurance, property main14 tenance, repairs, alterations, payment of taxes, 

15 default, reserves, delinquency charges, fore16 closure proceedings, anticipation of maturity, 

17 additional and secondary liens, and other mat18 ters, including matters that set forth terms and 

19 provisions for establishing escrow accounts, per20 forming financial assessments, or limiting the 

21 amount of any payment made available under 

22 the mortgage as the Corporation may prescribe; 

23 and 

24 (G) that contains such other terms or 

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1 tion with the Bureau of Consumer Financial 

2 Protection, may determine necessary or appro3 priate. 

4 (12) ENTERPRISE.—The term ‘‘enterprise’’ 

5 means— 

6 (A) the Federal National Mortgage Asso7 ciation and any affiliate thereof; and 

8 (B) the Federal Home Loan Mortgage 

9 Corporation and any affiliate thereof. 

10 (13) FEDERAL BANKING AGENCIES.—The 

11 term— 

12 (A) ‘‘Federal banking agency’’ means, indi13 vidually, the Board of Governors of the Federal 

14 Reserve System, the Office of the Comptroller 

15 of the Currency, the Federal Deposit Insurance 

16 Corporation, the Bureau of Consumer Financial 

17 Protection, the National Credit Union Adminis18 tration, the Securities and Exchange Commis19 sion, the Commodities Futures Trading Com20 mission, the Federal Housing Finance Agency, 

21 and the Secretary of the Treasury; and 

22 (B) ‘‘Federal banking agencies’’ means all 

23 of the agencies referred to in subparagraph (A), 

24 collectively. 


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1 (14) FEDERAL HOME LOAN BANK.—The term 

2 ‘‘Federal Home Loan Bank’’ means a bank estab3 lished under the authority of the Federal Home 

4 Loan Bank Act (12 U.S.C. 1421 et seq.). 

5 (15) FEDERAL HOME LOAN BANK SYSTEM.— 

6 The term ‘‘Federal Home Loan Bank System’’ 

7 means the Federal Home Loan Banks and the Of8 fice of Finance and any authorized subsidiary of one 

9 or more Federal Home Loan Banks. 

10 (16) FMIC CERTIFICATION DATE.—The term 

11 ‘‘FMIC certification date’’ means the date on which 

12 the Board of Directors certifies that the Corporation 

13 is operational and able to perform the insurance 

14 functions for covered securities as provided in this 

15 Act, which date shall be not later than 5 years after 

16 the date of enactment of this Act. 

17 (17) INSURED DEPOSITORY INSTITUTION.—The 

18 term ‘‘insured depository institution’’ means— 

19 (A) an insured depository institution, as 

20 defined under section 3 of the Federal Deposit 

21 Insurance Act (12 U.S.C. 1813); and 

22 (B) a credit union that meets the defini23 tion of ‘‘depository institution’’ as that term is 

24 defined under section 19(b) of the Federal Re25 serve Act (12 U.S.C. 461). 


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1 (18) SENIOR PREFERRED STOCK PURCHASE

2 AGREEMENT DEFINED.—The term ‘‘Senior Pre3 ferred Stock Purchase Agreement’’ means— 

4 (A) the Amended and Restated Senior Pre5 ferred Stock Purchase Agreement, dated Sep6 tember 26, 2008, as such Agreement has been 

7 amended on May 6, 2009, December 24, 2009, 

8 and August 17, 2012, respectively, and as such 

9 Agreement may be further amended and re10 stated, entered into between the Department of 

11 the Treasury and each enterprise, as applicable; 

12 and 

13 (B) any provision of any certificate in con14 nection with such Agreement creating or desig15 nating the terms, powers, preferences, privi16 leges, limitations, or any other conditions of the 

17 Variable Liquidation Preference Senior Pre18 ferred Stock of an enterprise issued or sold pur19 suant to such Agreement. 

20 (19) TRANSFER DATE.—The term ‘‘transfer 

21 date’’ means the date that is 1 year after the date 

22 of enactment of this Act. 


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1 TITLE I—FEDERAL MORTGAGE 

2 INSURANCE CORPORATION 

3 SEC. 101. ESTABLISHMENT. 

4 (a) ESTABLISHMENT.—There is hereby established 

5 the Federal Mortgage Insurance Corporation which shall 

6 have the powers hereinafter granted. 

7 (b) PURPOSE.—The purpose of the Corporation shall 

8 be to— 

9 (1) provide liquidity, transparency, and access 

10 to mortgage credit by supporting a robust secondary 

11 mortgage market and the production of residential 

12 mortgage-backed securities; and 

13 (2) protect the taxpayer from having to absorb 

14 losses incurred in the secondary mortgage market 

15 during periods of economic stress. 

16 (c) FEDERAL STATUS.—The Corporation shall be an 

17 independent agency of the Federal Government. 

18 (d) SUCCESSION.—The Corporation shall have suc19 cession until dissolved by Act of Congress. 

20 (e) PRINCIPAL OFFICE.—The Corporation shall 

21 maintain its principal office in the District of Columbia 

22 and shall be deemed, for purposes of venue in civil actions, 

23 to be a resident thereof. 

24 (f) AUTHORITY TO ESTABLISH OTHER OFFICES.— 

25 The Corporation may establish such other offices in such 


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1 other place or places as the Corporation may deem nec2 essary or appropriate in the conduct of its business. 

3 (g) PROHIBITION.—The Corporation shall not engage 

4 in mortgage origination. 

5 SEC. 102. DIRECTOR. 

6 (a) ESTABLISHMENT OF POSITION.—There is estab7 lished the position of the Director of the Corporation, who 

8 shall be the head of the Corporation. 

9 (b) APPOINTMENT; TERM.— 

10 (1) APPOINTMENT.—The Director shall be ap11 pointed by the President, by and with the advice and 

12 consent of the Senate, from among individuals 

13 who— 

14 (A) are citizens of the United States; and 

15 (B) have a demonstrated technical, aca16 demic, or professional understanding of, and 

17 practical, disciplinary, vocational, or regulatory 

18 experience working in, the mortgage securities 

19 markets and housing finance. 

20 (2) TERM.—The Director shall be appointed for 

21 a term of 5 years, unless removed before the end of 

22 such term for cause by the President. 

23 (3) VACANCY.— 

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1 tion of the term for which a Director was ap2 pointed shall be filled in the manner established 

3 under paragraph (1), and the Director ap4 pointed to fill such vacancy shall be appointed 

5 only for the remainder of such term. 

6 (B) ACTING DIRECTOR.— 

7 (i) DESIGNATION BY THE PRESI8 DENT.— 

9 (I) ELIGIBLE INDIVIDUALS.—If 

10 the Senate has not confirmed a Direc11 tor, the President may designate ei12 ther the individual nominated, but not 

13 yet confirmed, for the position of Di14 rector or a member of the Board of 

15 Directors to serve as the Acting Di16 rector, and such Acting Director shall 

17 have all the rights, duties, powers, 

18 and responsibilities of the Director, 

19 until such time as a Director is con20 firmed by the Senate. 

21 (II) LIMITATION.—No individual 

22 may serve concurrently as the Acting 

23 Director of the Corporation and the 

24 Director of the Federal Housing Fi25 nance Agency. 


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1 (4) SERVICE AFTER END OF TERM.—An indi2 vidual may serve as the Director after the expiration 

3 of the term for which appointed until a successor 

4 has been appointed. 

5 (5) COMPENSATION.—The Director shall be 

6 compensated at the rate prescribed for level II of the 

7 Executive Schedule under section 5313 of title 5, 

8 United States Code. 

9 (6) RULES OF CONSTRUCTION.—No indi10 vidual— 

11 (A) may serve concurrently as the Director 

12 of the Corporation and the Director of the Fed13 eral Housing Finance Agency; and 

14 (B) that has, at any time prior to, on, or 

15 after the date of enactment of this Act, served 

16 as the Director of the Federal Housing Finance 

17 Agency may serve as the Director of the Cor18 poration. 

19 (c) MEMBERSHIP ON FSOC.—The Dodd-Frank Wall 

20 Street Reform and Consumer Protection Act is amend21 ed— 

22 (1) in section 2, by amending paragraph 

23 (12)(E) to read as follows: 

24 ‘‘(E) the Federal Mortgage Insurance Cor25 poration, with respect to— 


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1 ‘‘(i) the Mortgage Insurance Fund es2 tablished under title II of the Housing Fi3 nance Reform and Taxpayer Protection 

4 Act of 2013; and 

5 ‘‘(ii) the Federal Home Loan Banks 

6 or the Federal Home Loan Bank Sys7 tem.’’; and 

8 (2) in section 111(b)(1)(H), by striking ‘‘Direc9 tor of the Federal Housing Finance Agency’’ and in10 serting ‘‘Chairperson of the Federal Mortgage Insur11 ance Corporation’’. 

12 SEC. 103. BOARD OF DIRECTORS. 

13 (a) BOARD OF DIRECTORS.— 

14 (1) VOTING MEMBERS.—The management of 

15 the Corporation shall be vested in a Board of Direc16 tors consisting of 5 voting members— 

17 (A) 1 of whom shall be the Director, who 

18 shall serve as Chairperson of the Board; and 

19 (B) 4 of whom shall be appointed by the 

20 President, by and with the advice and consent 

21 of the Senate, from among individuals who are 

22 citizens of the United States— 

23 (i) 1 of whom shall have demonstrated 

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1 cational, or regulatory experience working 

2 in, the field of asset management; 

3 (ii) 1 of whom shall have dem4 onstrated technical, academic, or profes5 sional understanding of, and practical, dis6 ciplinary, vocational, or regulatory experi7 ence working in, mortgage insurance mar8 kets; 

9 (iii) 1 of whom shall have a dem10 onstrated technical, academic, or profes11 sional understanding of, and practical, dis12 ciplinary, vocational, or regulatory experi13 ence working with, lenders having less than 

14 $10,000,000,000 in total assets; and 

15 (iv) 1 of whom shall have a dem16 onstrated technical, academic, or profes17 sional understanding of, and practical, dis18 ciplinary, vocational, or regulatory experi19 ence working with, multifamily housing de20 velopment. 

21 (2) NON-VOTING MEMBER.—The President 

22 shall appoint the Director of the Federal Housing 

23 Finance Agency as an additional non-voting member 

24 of the Board of Directors. The Director of the Fed25 eral Housing Finance Agency shall serve as non-votVerDate Mar 15 2010 23:07 Jun 28, 2013 Jkt 029200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S1217.IS S1217

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1 ing member of the Board of Directors until such 

2 time as that position is abolished pursuant to title 

3 III. 

4 (3) INDEPENDENCE.— 

5 (A) IN GENERAL.—Each voting member of 

6 the Board of Directors shall be independent 

7 and neutral and maintain a fiduciary relation8 ship to the Corporation in performing his or her 

9 duties. 

10 (B) INDEPENDENCE DETERMINATION.—In 

11 order to be considered independent for purposes 

12 of this paragraph, a voting member of the 

13 Board of Directors— 

14 (i) may not, other than in his or her 

15 capacity as a member of the Board of Di16 rectors or any committee thereof— 

17 (I) accept any consulting, advi18 sory, or other compensatory fee from 

19 the Corporation; or 

20 (II) be a person associated with 

21 the Corporation or with any affiliated 

22 company thereof; and 

23 (ii) shall be disqualified from any de24 liberation involving any transaction of the 

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1 nancial interest in the outcome of the 

2 transaction. 

3 (4) RULE OF CONSTRUCTION.—No individual 

4 that has, at any time prior to, on, or after the date 

5 of enactment of this Act, served as the Director or 

6 Acting Director of the Federal Housing Finance 

7 Agency may serve as a voting member of the Board 

8 of Directors. 

9 (b) ADMINISTRATION.—Except as otherwise may pro10 vided in this Act, the Board of Directors shall administer 

11 the affairs of the Corporation fairly and impartially and 

12 without discrimination. 

13 (c) CONSULTATION.—The Board of Directors may, in 

14 carrying out any duty, responsibility, requirement, or ac15 tion authorized under this Act, consult with the Federal 

16 banking agencies or any individual Federal banking agen17 cy, as the Board determines necessary and appropriate. 

18 (d) TERMS.— 

19 (1) APPOINTED MEMBERS.—Each appointed 

20 voting member shall be appointed for a term of 5 

21 years and shall serve on a full-time basis. 

22 (2) INTERIM APPOINTMENTS.—Any voting 

23 member appointed to fill a vacancy occurring before 

24 the expiration of the term for which such member’s 


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1 predecessor was appointed shall be appointed only 

2 for the remainder of such term. 

3 (3) CONTINUATION OF SERVICE.—The Chair4 person and each appointed voting member may con5 tinue to serve after the expiration of the term of of6 fice to which such member was appointed until a 

7 successor has been appointed and qualified. 

8 (e) VACANCY.—A vacancy in the voting membership 

9 of the Board of Directors shall not affect the powers of 

10 the Board, and shall be filled in the manner in which the 

11 original appointment was made. 

12 (f) VOTING.—A majority vote of all voting members 

13 of the Board of Directors is necessary to resolve all voting 

14 issues of the Corporation. 

15 (g) MEETINGS.—The Board of Directors shall meet 

16 in accordance with the bylaws of the Corporation— 

17 (1) at the call of the Chairperson; and 

18 (2) not less frequently than once each month. 

19 (h) QUORUM.—Three voting members of the Board 

20 of Directors then in office shall constitute a quorum. 

21 (i) BYLAWS.—A majority of the voting members of 

22 the Board of Directors may amend the bylaws of the Cor23 poration. 


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1 (j) ATTENDANCE.—Members of the Board of Direc2 tors may attend meetings of the Corporation and vote in 

3 person, via telephone conference, or via video conference. 

4 (k) INELIGIBILITY FOR OTHER OFFICES DURING

5 SERVICE.— 

6 (1) IN GENERAL.—No voting member of the 

7 Board of Directors may during the time such mem8 ber is in office— 

9 (A) be an officer or director of any insured 

10 depository institution, depository institution 

11 holding company, Federal Reserve bank, Fed12 eral home loan bank, approved servicer, ap13 proved private mortgage insurer, institution 

14 that originates eligible mortgages, or institution 

15 that issues a covered security; or 

16 (B) hold stock or a controlling interest in 

17 any insured depository institution or depository 

18 institution holding company, approved servicer, 

19 approved private mortgage insurer, institution 

20 that originates eligible mortgages, or institution 

21 that issues a covered security. 

22 (2) CERTIFICATION.—Upon taking office, each 

23 voting member of the Board of Directors shall cer24 tify under oath that such member has complied with 


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1 this subsection and such certification shall be filed 

2 with the secretary of the Board of Directors. 

3 (l) STATUS OF EMPLOYEES.— 

4 (1) IN GENERAL.—A director, member, officer, 

5 or employee of the Corporation has no liability under 

6 the Securities Act of 1933 (15 U.S.C. 77a et seq.) 

7 with respect to any claim arising out of or resulting 

8 from any act or omission by such person within the 

9 scope of such person’s employment in connection 

10 with any transaction involving the Corporation. This 

11 subsection shall not be construed to limit personal li12 ability for criminal acts or omissions, willful or mali13 cious misconduct, acts or omissions for private gain, 

14 or any other acts or omissions outside the scope of 

15 such person’s employment. 

16 (2) EFFECT ON OTHER LAW.— 

17 (A) IN GENERAL.—This subsection does 

18 not affect— 

19 (i) any other immunities and protec20 tions that may be available to such person 

21 under applicable law with respect to such 

22 transactions; or 

23 (ii) any other right or remedy against 

24 the Corporation, against the United States 

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1 son other than a person described in para2 graph (1) participating in such trans3 actions. 

4 (B) RULE OF CONSTRUCTION.—This sub5 section shall not be construed to limit or alter 

6 in any way the immunities that are available 

7 under applicable law for Federal officials and 

8 employees not described in this subsection. 

9 SEC. 104. OFFICE OF THE INSPECTOR GENERAL. 

10 (a) OFFICE OF INSPECTOR GENERAL.— 

11 (1) IN GENERAL.—There is established the Of12 fice of the Inspector General of the Federal Mort13 gage Insurance Corporation. The head of the Office 

14 of the Inspector General of the Federal Mortgage 

15 Insurance Corporation is the Inspector General of 

16 the Federal Mortgage Insurance Corporation (in this 

17 section referred to as the ‘‘Inspector General’’), who 

18 shall be appointed by the President, by and with the 

19 advice and consent of the Senate. 

20 (2) ADDITIONAL RESPONSIBILITIES.—In addi21 tion to carrying out the requirements established 

22 under the Inspector General Act of 1978 (5 U.S.C. 

23 App.), the Inspector General shall— 


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1 (A) conduct, supervise, and coordinate au2 dits and investigations relating to the programs 

3 and operations of the Corporation— 

4 (i) to ensure that the first loss posi5 tion that the Corporation requires of pri6 vate market holders of covered securities 

7 insured under this Act is adequate to cover 

8 losses that might be incurred as a result of 

9 adverse economic conditions, wherein such 

10 conditions are generally consistent with the 

11 economic conditions, including national 

12 home price declines, observed in the United 

13 States during moderate to severe reces14 sions experienced during the last 100 

15 years; and 

16 (ii) with respect to the— 

17 (I) oversight and supervision of 

18 the Federal Home Loan Banks and 

19 the Federal Home Loan Bank Sys20 tem; and 

21 (II) the contracting practices and 

22 procedures of the Corporation; and 

23 (B) recommend policies for the purpose of 

24 addressing any deficiencies, inefficiencies, gaps, 


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1 or failures in the administration of such pro2 grams and operations. 

3 (3) INSPECTOR GENERAL REPORT; REPORT OF

4 INDEPENDENT ACTUARY.—Beginning 1 year after 

5 the FMIC certification date, and annually there6 after, the Inspector General and an independent ac7 tuary contracted for by the Director shall each con8 duct an examination and issue a separate report re9 garding— 

10 (A) the adequacy of insurance fees charged 

11 by the Board of Directors under title II; and 

12 (B) the adequacy of the Mortgage Insur13 ance Fund established under title II. 

14 (b) AMENDMENTS TO INSPECTOR GENERAL ACT OF

15 1978.—Section 11 of the Inspector General Act of 1978 

16 (5 U.S.C. App.) is amended— 

17 (1) in paragraph (1), by inserting ‘‘Chairperson 

18 of the Federal Mortgage Insurance Corporation;’’ 

19 after ‘‘the Director of the Federal Housing Finance 

20 Agency;’’; and 

21 (2) in paragraph (2), by inserting ‘‘the Federal 

22 Mortgage Insurance Corporation,’’ after ‘‘the Fed23 eral Housing Finance Agency,’’. 

24 (c) COMPENSATION.—The annual rate of basic pay 

25 of the Inspector General shall be the annual rate of basic 


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1 pay provided for positions at level III of the Executive 

2 Schedule under section 5314 of title 5, United States 

3 Code. 

4 SEC. 105. STAFF, EXPERTS, AND CONSULTANTS. 

5 (a) COMPENSATION.— 

6 (1) IN GENERAL.—The Board of Directors may 

7 appoint and fix the compensation of such officers, 

8 attorneys, economists, examiners, and other employ9 ees as may be necessary for carrying out the func10 tions of the Corporation. 

11 (2) RATES OF PAY.—Rates of basic pay and the 

12 total amount of compensation and benefits for all 

13 employees of the Corporation may be— 

14 (A) set and adjusted by the Board of Di15 rectors without regard to the provisions of 

16 chapter 51 or subchapter III of chapter 53 of 

17 title 5, United States Code; and 

18 (B) reasonably increased, notwithstanding 

19 any limitation set forth in paragraph (3), if the 

20 Board of Directors determines such increases 

21 are necessary to attract and hire qualified em22 ployees. 

23 (3) PARITY.—The Board of Directors may pro24 vide additional compensation and benefits to employ25 ees of the Corporation, of the same type of comVerDate Mar 15 2010 23:07 Jun 28, 2013 Jkt 029200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S1217.IS S1217

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1 pensation or benefits that are then being provided by 

2 any agency referred to under section 1206 of the Fi3 nancial Institutions Reform, Recovery, and Enforce4 ment Act of 1989 (12 U.S.C. 1833b) or, if not then 

5 being provided, could be provided by such an agency 

6 under applicable provisions of law, rule, or regula7 tion. In setting and adjusting the total amount of 

8 compensation and benefits for employees, the Board 

9 of Directors shall consult with and seek to maintain 

10 comparability with the agencies referred to under 

11 section 1206 of the Financial Institutions Reform, 

12 Recovery, and Enforcement Act of 1989 (12 U.S.C. 

13 1833b). 

14 (b) DETAIL OF GOVERNMENT EMPLOYEES.—Upon 

15 the request of the Board of Directors, any Federal Gov16 ernment employee may be detailed to the Corporation 

17 without reimbursement, and such detail shall be without 

18 interruption or loss of civil service status or privilege. 

19 (c) EXPERTS AND CONSULTANTS.—The Board of Di20 rectors may procure the services of experts and consult21 ants as the Board considers necessary or appropriate. 

22 (d) TECHNICAL AND PROFESSIONAL ADVISORY COM23 MITTEES.—The Board of Directors may appoint such spe24 cial advisory, technical, or professional committees as may 

25 be useful in carrying out the functions of the Corporation. 


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1 SEC. 106. REPORTS; TESTIMONY; AUDITS. 

2 (a) REPORTS.— 

3 (1) IN GENERAL.—The Corporation shall sub4 mit, on an annual basis, to the Committee on Bank5 ing, Housing, and Urban Affairs of the Senate and 

6 the Committee on Financial Services of the House of 

7 Representatives a written report of its operations, 

8 activities, budget, receipts, and expenditures for the 

9 preceding 12-month period. 

10 (2) CONTENTS OF REPORT.—The report re11 quired under subsection (a) shall include an analysis 

12 of— 

13 (A) with respect to the Mortgage Insur14 ance Fund established under section 203— 

15 (i) the current financial condition of 

16 the Mortgage Insurance Fund; 

17 (ii) the exposure of the Mortgage In18 surance Fund to changes in those eco19 nomic factors most likely to affect the con20 dition of that fund; 

21 (iii) a current estimate of the re22 sources needed for the Mortgage Insurance 

23 Fund to achieve the purposes of this Act; 

24 and 

25 (iv) any findings, conclusions, and rec26 ommendations for legislative and adminisVerDate Mar 15 2010 23:07 Jun 28, 2013 Jkt 029200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S1217.IS S1217

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1 trative actions considered appropriate to 

2 the future activities of the Corporation; 

3 (B) the secondary mortgage market, the 

4 housing market, and the economy, including 

5 through use of stress tests, and how such anal6 ysis was used to determine and set the reserve 

7 ratio for the Mortgage Insurance Fund for the 

8 preceding 12-month period; 

9 (C) whether or not the actual reserve ratio 

10 of the Mortgage Insurance Fund met— 

11 (i) the reserve ratio set for the pre12 ceding 12-month period; or 

13 (ii) the reserve ratio goals established 

14 in section 203(e); 

15 (D) how the Corporation intends to ensure 

16 that the goals set for the reserve ratio for the 

17 Mortgage Insurance Fund are to be met and 

18 maintained for the next 12-month period, and 

19 such analysis shall include a detailed and de20 scriptive plan of the actions that the Corpora21 tion intends to take pursuant to its authorities 

22 under this Act; 

23 (E) how the Corporation has provided li24 quidity, transparency, and access to mortgage 

25 credit in its support of a robust secondary 


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1 mortgage market and the production of residen2 tial mortgage-backed securities; 

3 (F) the state of the private label mortgage4 backed securities market, and such analysis 

5 shall include the submission of a reasonable set 

6 of administrative, regulatory, and legislative 

7 proposals on how to limit the Federal Govern8 ment’s footprint in the secondary mortgage 

9 market; 

10 (G) the effect that further decreases in 

11 loan limits would have on the secondary mort12 gage market, the housing market, and the econ13 omy; and 

14 (H) the state of the global covered bond 

15 market. 

16 (b) TESTIMONY.—The Chairperson of the Corpora17 tion, on a biannual basis, shall provide testimony to the 

18 Committee on Banking, Housing, and Urban Affairs of 

19 the Senate and the Committee on Financial Services of 

20 the House of Representatives. 

21 (c) AUDIT OF CORPORATION.— 

22 (1) ANNUAL AUDIT.—The Comptroller General 

23 of the United States shall annually audit the finan24 cial transactions of the Corporation in accordance 

25 with the United States generally accepted governVerDate Mar 15 2010 23:07 Jun 28, 2013 Jkt 029200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S1217.IS S1217

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1 ment auditing standards as may be prescribed by 

2 the Comptroller General. 

3 (2) PLACE OF AUDIT.—The audit required 

4 under this subsection shall be conducted at the place 

5 or places where accounts of the Corporation are nor6 mally kept. 

7 (3) ACCESS.—The representatives of the Comp8 troller General shall have access to the personnel 

9 and to all books, accounts, documents, papers, 

10 records (including electronic records), reports, files, 

11 and all other papers, automated data, or property 

12 belonging to or under the control of or used or em13 ployed by the Corporation pertaining to its financial 

14 transactions and necessary to facilitate the audit re15 quired under this subsection, and such representa16 tives shall be afforded full facilities for verifying 

17 transactions with the balances or securities held by 

18 depositories, fiscal agents, and custodians. 

19 (4) POSSESSION AND CUSTODY.—All such 

20 books, accounts, documents, records, reports, files, 

21 papers, and property of the Corporation used to 

22 carry out the audit required under this subsection 

23 shall remain in the possession and custody of the 

24 Corporation. 


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1 (5) PERMISSIBLE DUPLICATION.—The Comp2 troller General may obtain and duplicate any such 

3 books, accounts, documents, records, working pa4 pers, automated data and files, or other information 

5 relevant to such audit without cost to the Comp6 troller General and the Comptroller General’s right 

7 of access to such information shall be enforceable 

8 pursuant to section 716(c) of title 31, United States 

9 Code. 

10 (6) REPORT.— 

11 (A) SUBMISSION TO CONGRESS.—The 

12 Comptroller General shall submit to Congress a 

13 report of each annual audit conducted under 

14 this subsection. 

15 (B) REQUIRED CONTENT.—The report to 

16 Congress required under subparagraph (A) 

17 shall— 

18 (i) set forth the scope of the audit; 

19 and 

20 (ii) include— 

21 (I) the statement of assets and li22 abilities and surplus or deficit; 

23 (II) the statement of income and 

24 expenses; 


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1 (III) the statement of sources 

2 and application of funds; and 

3 (IV) such comments and infor4 mation as the Comptroller General 

5 may deem necessary to inform Con6 gress of the financial operations and 

7 condition of the Corporation, together 

8 with such recommendations with re9 spect thereto as the Comptroller Gen10 eral may deem advisable. 

11 (C) COPIES.—A copy of each report re12 quired under subparagraph (A) shall be fur13 nished to the President and to the Chairperson 

14 of the Corporation at the time such report is 

15 submitted to the Congress. 

16 (7) ASSISTANCE AND COSTS.— 

17 (A) PERMITTED USE OF OUTSIDE ASSIST18 ANCE.—For the purpose of conducting an audit 

19 under this subsection, the Comptroller General 

20 may employ by contract, without regard to sec21 tion 3709 of the Revised Statutes of the United 

22 States (41 U.S.C. 5), professional services of 

23 firms and organizations of certified public ac24 countants for temporary periods or for special 

25 purposes. 


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1 (B) COST OF AUDIT COVERED BY COR2 PORATION.— 

3 (i) IN GENERAL.—Upon the request 

4 of the Comptroller General, the Chair5 person of the Corporation shall transfer to 

6 the Comptroller General from funds avail7 able, the amount requested by the Comp8 troller General to cover the reasonable 

9 costs of any audit and report conducted by 

10 the Comptroller General pursuant to this 

11 subsection. 

12 (ii) CREDIT OF FUNDS.—The Comp13 troller General shall credit funds trans14 ferred under clause (i) to the account at 

15 the Treasury established for salaries and 

16 expenses of the Government Accountability 

17 Office, and such amounts shall be available 

18 upon receipt and without fiscal year limita19 tion to cover the full costs of the audit and 

20 report. 

21 SEC. 107. INITIAL FUNDING. 

22 (a) IN GENERAL.—Section 1316 of the Federal 

23 Housing Enterprises Financial Safety and Soundness Act 

24 of 1992 (12 U.S.C. 4516) is amended by adding at the 

25 end the following: 


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1 ‘‘(i) ANNUAL ASSESSMENTS RELATING TO INITIAL

2 FUNDING OF THE FMIC.—Notwithstanding title V of the 

3 Housing Finance Reform and Taxpayer Protection Act of 

4 2013 or any other provision of law, for the period begin5 ning on the date of enactment of this subsection and end6 ing on the FMIC certification date (as that date is set 

7 forth under section 2(16) of the Housing Finance Reform 

8 and Taxpayer Protection Act of 2013, the Director, in 

9 consultation with the Chairperson of the Federal Mort10 gage Insurance Corporation, shall establish and collect 

11 from the enterprises annual assessments in addition to 

12 those required under subsection (a) in an amount not ex13 ceeding the amount sufficient to provide for the reasonable 

14 costs (including administrative costs) and expenses of the 

15 Corporation. All amounts collected under this subsection 

16 shall be transferred to the Federal Mortgage Insurance 

17 Corporation. The annual assessment shall be payable 

18 semiannually for each fiscal year, on October 1 and April 

19 1.’’. 

20 (b) TREATMENT OF ASSESSMENTS.— 

21 (1) DEPOSIT.—Amounts received by the Cor22 poration from assessments imposed under section 

23 1316(i) of the Federal Housing Enterprises Finan24 cial Safety and Soundness Act of 1992 shall be de25 posited by the Corporation in the manner provided 


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1 in section 5234 of the Revised Statutes of the 

2 United States (12 U.S.C. 192) for monies deposited 

3 by the Comptroller of the Currency. 

4 (2) NOT GOVERNMENT FUNDS.—The amounts 

5 received by the Corporation from any assessment 

6 imposed under section 1316(i) of the Federal Hous7 ing Enterprises Financial Safety and Soundness Act 

8 of 1992 shall not be construed to be Government or 

9 public funds or appropriated money. 

10 (3) NO APPORTIONMENT OF FUNDS.—Notwith11 standing any other provision of law, the amounts re12 ceived by the Corporation from any assessment im13 posed under section 1316(i) of the Federal Housing 

14 Enterprises Financial Safety and Soundness Act of 

15 1992 shall not be subject to apportionment for the 

16 purpose of chapter 15 of title 31, United States 

17 Code, or under any other authority. 

18 (4) USE OF FUNDS.— 

19 (A) IN GENERAL.—The Corporation may 

20 use any amounts received from assessments im21 posed under section 1316(i) of the Federal 

22 Housing Enterprises Financial Safety and 

23 Soundness Act of 1992— 

24 (i) for compensation of the employees 

25 of the Corporation; and 


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1 (ii) for all other expenses of the Cor2 poration. 

3 (B) TREASURY INVESTMENTS.—The Cor4 poration may request the Secretary of the 

5 Treasury to invest such portions of amounts re6 ceived from assessments imposed under section 

7 1316(i) of the Federal Housing Enterprises Fi8 nancial Safety and Soundness Act of 1992 that, 

9 in the discretion of the Corporation, are not re10 quired to meet the current working needs of the 

11 Corporation. 

12 (C) GOVERNMENT OBLIGATIONS.—Pursu13 ant to a request under subparagraph (B), the 

14 Secretary of the Treasury shall invest such 

15 amounts in Government obligations— 

16 (i) guaranteed as to principal and in17 terest by the United States with maturities 

18 suitable to the needs of the Corporation; 

19 and 

20 (ii) bearing interest at a rate deter21 mined by the Secretary of the Treasury 

22 taking into consideration current market 

23 yields on outstanding marketable obliga24 tions of the United States of comparable 

25 maturity. 


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1 TITLE II—DUTIES, RESPONSIBIL2 ITIES, AND STRUCTURE OF 

3 THE FMIC 

4 Subtitle A—Duties and Authorities 

5 SEC. 201. DUTIES AND RESPONSIBILITIES OF THE FMIC. 

6 (a) DUTIES.—The principal duties of the Corporation 

7 shall be to— 

8 (1) carry out this Act in a manner that— 

9 (A) minimizes any potential long-term neg10 ative cost on the taxpayer; and 

11 (B) ensures, to the maximum extent pos12 sible— 

13 (i) a liquid and resilient housing fi14 nance market; and 

15 (ii) the availability of mortgage credit; 

16 (2) develop standard form credit risk-sharing 

17 mechanisms, products, structures, contracts, or 

18 other security agreements that require private mar19 ket holders of a covered security insured under this 

20 Act to assume the first loss position with respect to 

21 losses incurred on such securities; 

22 (3) provide insurance on any covered security 

23 for which private market holders of such security 

24 have assumed the first loss position with respect to 

25 losses that may be incurred on such security in 


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1 order to provide a liquid and resilient housing fi2 nance market; 

3 (4) provide leadership to the housing finance 

4 market to help ensure that all geographic locations 

5 have access to mortgage credit; 

6 (5) charge and collect fees in exchange for pro7 viding such insurance, whereby such fees shall be 

8 sufficient to protect the taxpayer from the risk of 

9 providing such insurance and to fund the activities 

10 and operations of the Corporation; 

11 (6) establish and maintain a Mortgage Insur12 ance Fund; 

13 (7) facilitate securitization of eligible mortgages 

14 originated by credit unions and community and mid15 size banks without securitization capabilities; 

16 (8) ensure discipline and integrity in the mar17 ket for covered securities by setting standards for 

18 the approval of private mortgage insurers, servicers, 

19 issuers, and bond guarantors; 

20 (9) establish, operate, and maintain a database 

21 for the collection, public use, and dissemination of 

22 uniform loan level information on eligible mortgages; 

23 (10) develop, adopt, and publish standard uni24 form securitization agreements for covered securi25 ties; 


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1 (11) establish, operate, and maintain an elec2 tronic registry system for eligible mortgages that 

3 collateralize covered securities insured under this 

4 Act; 

5 (12) oversee and supervise the common 

6 securitization platform developed by the business en7 tity announced by the Federal Housing Finance 

8 Agency and established by the enterprises; and 

9 (13) ensure that credit unions and community 

10 and mid-size banks— 

11 (A) have equal access to any such common 

12 securitization platform and any other 

13 securitization platforms; and 

14 (B) are not, in their access or use of such 

15 platforms, discriminated against through dis16 counts for volume pricing or other mechanisms. 

17 (b) SCOPE OF AUTHORITY.—The authority of the 

18 Corporation shall include the authority to exercise such 

19 incidental powers as may be necessary or appropriate to 

20 fulfill the duties and responsibilities of the Corporation set 

21 forth under subsection (a). 

22 (c) DELEGATION OF AUTHORITY.—The Board of Di23 rectors may delegate to officers and employees of the Cor24 poration any of the functions, powers, or duties of the CorVerDate Mar 15 2010 23:07 Jun 28, 2013 Jkt 029200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\S1217.IS S1217

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1 poration, as the Board of Directors determines appro2 priate. 

3 SEC. 202. STANDARD FORM CREDIT RISK-SHARING MECHA4 NISMS, PRODUCTS, STRUCTURES, CON5 TRACTS, OR OTHER SECURITY AGREEMENTS. 

6 (a) REQUIREMENTS; SHARE OF LOSS; DIVERSITY.— 

7 Pursuant to section 201(a)(2), the Corporation shall de8 velop standard form credit-risk sharing mechanisms, prod9 ucts, structures, contracts, or other security agreements 

10 which shall require that the first loss position of private 

11 market holders of a covered security insured under this 

12 Act— 

13 (1) is adequate to cover losses that might be in14 curred as a result of adverse economic conditions, 

15 wherein such conditions are generally consistent with 

16 the economic conditions, including national home 

17 price declines, observed in the United States during 

18 moderate to severe recessions experienced during the 

19 last 100 years; and 

20 (2) is not less than 10 percent of the principal 

21 or face value of the covered security. 

22 (b) DEVELOPMENT WINDOW FOR RISK-SHARING

23 MECHANISMS.— 

24 (1) IN GENERAL.—The Corporation shall com25 plete the development and implementation of the 


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1 mechanisms, products, structures, contracts, or 

2 other security agreements required under subsection 

3 (a) not later than 5 years after the date of enact4 ment of this Act. 

5 (2) EXAMINATION OF VARIOUS MECHANISMS.— 

6 In developing the mechanisms, products, structures, 

7 contracts, or other security agreements required 

8 under subsection (a), the Corporation shall— 

9 (A) examine proposals that include a sen10 ior-subordinated deal structure, credit-linked 

11 structures, and the use of regulated guarantors 

12 with sufficient equity capital to absorb losses 

13 associated with moderate or severe economic 

14 downturns; 

15 (B) consider any risk-sharing mechanisms, 

16 products, structures, contracts, or other secu17 rity agreements undertaken by the business en18 tity announced by the Federal Housing Finance 

19 Agency and established by the enterprises to 

20 provide a common securitization platform for 

21 issuers in the secondary mortgage market; 

22 (C) consider how each proposed mecha23 nism, product, structure, contract, or other se24 curity agreement— 


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1 (i) minimizes any potential long-term 

2 negative cost to the taxpayer; 

3 (ii) impacts the availability of mort4 gage credit for— 

5 (I) small financial institutions, 

6 such as credit unions and community 

7 and mid-size banks; and 

8 (II) consumers; 

9 (iii) influences mortgage affordability; 

10 (iv) allows for loan modifications and 

11 foreclosure prevention alternatives; 

12 (v) interacts with the To-Be-An13 nounced market; and 

14 (vi) facilitates market liquidity and re15 siliency; and 

16 (D) ensure that lenders of all sizes and 

17 from all geographic locations, including rural lo18 cations, have equitable access to secondary 

19 mortgage market financing. 

20 (3) REPORT.— 

21 (A) IN GENERAL.—Not later than 1 year 

22 after the date of enactment of this Act, and an23 nually thereafter until the end of the 5-year pe24 riod provided in paragraph (1), the Corporation 

25 shall submit a report to the Committee on 


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1 Banking, Housing, and Urban Affairs of the 

2 Senate and the Committee on Financial Serv3 ices of the House of Representatives that— 

4 (i) details the benefits and drawbacks 

5 of each mechanism, product, structure, 

6 contract, or other security agreement that 

7 the Director considered in carrying out the 

8 requirement of this section; 

9 (ii) describes the operation and execu10 tion of any mechanisms, products, struc11 tures, contracts, or other security agree12 ments that the Director determines best 

13 fulfills the requirements of this section; 

14 and 

15 (iii) explains how the Corporation ar16 rived at the determination made under 

17 clause (ii). 

18 (B) SUBSEQUENT REPORTS.—After the ex19 piration of the 5-year period provided in para20 graph (1) and the submission of the report re21 quired under subparagraph (A), each time the 

22 Corporation develops an additional standard 

23 form credit risk-sharing mechanism, product, 

24 structure, contract, or other security agreement 

25 that fulfills the requirements of this section, the 


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1 Corporation shall submit a report to the Com2 mittee on Banking, Housing, and Urban Affairs 

3 of the Senate and the Committee on Financial 

4 Services of the House of Representatives ad5 dressing the identical concerns set forth under 

6 clauses (i) through (iii) of subparagraph (A). 

7 SEC. 203. MORTGAGE INSURANCE FUND. 

8 (a) ESTABLISHMENT.—There is established the 

9 Mortgage Insurance Fund, which the Corporation shall— 

10 (1) maintain and administer; and 

11 (2) use to cover losses incurred on covered secu12 rities insured under this Act, when such losses ex13 ceed the first position losses absorbed by private 

14 market holders of such securities. 

15 (b) DEPOSITS.—The Mortgage Insurance Fund shall 

16 be credited with any— 

17 (1) insurance fee amounts required to be depos18 ited in the Fund under this section; 

19 (2) guarantee fee amounts collected under sec20 tion 601; and 

21 (3) amounts earned on investments pursuant to 

22 subsection (h). 

23 (c) FIDUCIARY RESPONSIBILITY.—The Corporation 

24 has the responsibility to ensure that the Mortgage Insur25 ance Fund remains financially sound. 


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1 (d) USE.— 

2 (1) IN GENERAL.—The Mortgage Insurance 

3 Fund shall be solely available to the Corporation for 

4 use by the Corporation to carry out the functions 

5 authorized by this Act and may not be used or oth6 erwise diverted to cover any other expense of the 

7 Federal Government. 

8 (2) EXEMPTION FROM APPORTIONMENT.—Not9 withstanding any other provision of law, amounts re10 ceived by the Mortgage Insurance Fund pursuant to 

11 any fees collected under this section shall not be 

12 subject to apportionment for the purposes of chapter 

13 15 of title 31, United States Code, or under any 

14 other authority. 

15 (e) RESERVE RATIO GOALS FOR MORTGAGE INSUR16 ANCE FUND.—The Corporation shall endeavor to ensure 

17 that the Mortgage Insurance Fund attains a reserve bal18 ance— 

19 (1) of 1.25 percent of the sum of the out20 standing principal balance of the covered securities 

21 for which insurance is being provided under this title 

22 within 5 years of the FMIC certification date, and 

23 to strive to maintain such ratio thereafter, subject to 

24 subparagraph (B); and 


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1 (2) of 2.50 percent of the sum of the out2 standing principal balance of the covered securities 

3 for which insurance is being provided under this title 

4 within 10 years of the FMIC certification date, and 

5 to strive to maintain such ratio at all times there6 after. 

7 (f) MAINTENANCE OF RESERVE RATIO; ESTABLISH8 MENT OF FEES.— 

9 (1) ESTABLISHMENT OF FEES.—The Corpora10 tion shall charge and collect a fee, and may in its 

11 discretion increase or decrease such fee, in connec12 tion with any insurance provided under this title 

13 to— 

14 (A) achieve and maintain the reserve ratio 

15 goals established under subsection (e); 

16 (B) achieve such reserve ratio goals, if the 

17 actual balance of such reserve is below the goal 

18 amounts established under subsection (e); and 

19 (C) fund the operations of the Corporation. 

20 (2) FEE CONSIDERATIONS.—In exercising the 

21 authority granted under paragraph (1), the Corpora22 tion shall consider— 

23 (A) the expected operating expenses of the 

24 Mortgage Insurance Fund; 


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1 (B) the risk of loss to the Mortgage Insur2 ance Fund in carrying out the requirements 

3 under this Act; 

4 (C) the risk presented by, and the loss ab5 sorption capacity of, the credit enhancement 

6 that is provided on the pool of eligible mort7 gages collateralizing the covered security to be 

8 insured under this title; 

9 (D) economic conditions generally affecting 

10 the mortgage markets; 

11 (E) the extent to which the reserve ratio of 

12 the Mortgage Insurance Fund met— 

13 (i) the reserve ratio set for the pre14 ceding 12-month period; or 

15 (ii) the reserve ratio goals established 

16 in subsection (e); and 

17 (F) any other factor that the Corporation 

18 determines appropriate. 

19 (3) FEE UNIFORMITY.—The fee required under 

20 paragraph (1)— 

21 (A) shall be set at a uniform amount appli22 cable to all institutions purchasing insurance 

23 under this title; 

24 (B) may not vary— 

25 (i) by geographic location; or 


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1 (ii) by the size of the institution to 

2 which the fee is charged; and 

3 (C) may not be based on the volume of in4 surance to be purchased by an approved issuer. 

5 (4) DEPOSIT INTO MORTGAGE INSURANCE

6 FUND.—Any fee amounts collected under this sub7 section shall be deposited in the Mortgage Insurance 

8 Fund. 

9 (g) FULL FAITH AND CREDIT.—The full faith and 

10 credit of the United States is pledged to the payment of 

11 all amounts from the Mortgage Insurance Fund which 

12 may be required to be paid under any insurance provided 

13 under this title. 

14 (h) INVESTMENTS.—Amounts in the Mortgage Insur15 ance Fund that are not otherwise employed— 

16 (1) shall be invested in obligations of the 

17 United States; and 

18 (2) may not be invested in any covered security 

19 insured under this Act. 

20 SEC. 204. INSURANCE. 

21 (a) AUTHORITY.—The Corporation shall, upon appli22 cation and in exchange for a fee in accordance with section 

23 203(f), insure the payment of principal and interest on 

24 a covered security with respect to losses that may be in25 curred on such security. 


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1 (b) PRECONDITION; ENSURING PLACEMENT OF

2 FIRST LOSS CAPITAL.—The Corporation shall develop 

3 standards and processes to ensure that prior to making 

4 any commitment to provide insurance under this section 

5 that private market holders have taken first loss position 

6 in a covered security and that such holders have sufficient 

7 capital to cover their risk-sharing obligations. 

8 (c) CASH PAYMENTS; CONTINUED OPERATIONS.—In 

9 the event of a payment default on an eligible mortgage 

10 that collateralizes a covered security insured under this 

11 section that exceeds the first loss position assumed by a 

12 private market holder or that, in the case of an approved 

13 bond guarantor, if the guarantor has become insolvent, the 

14 Corporation shall— 

15 (1) pay, in cash when due, any shortfalls in 

16 payment of principal and interest under the eligible 

17 mortgage; and 

18 (2) continue to charge and collect any fees for 

19 the provision of insurance (in accordance with sec20 tion 203(f)) relating to the covered security. 

21 (d) FULL FAITH AND CREDIT.—The full faith and 

22 credit of the United States is pledged to the payment of 

23 all amounts which may be required to be paid under any 

24 insurance provided under this section. 


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1 (e) PROHIBITION ON FEDERAL ASSISTANCE.—Not2 withstanding any other provision of law, no Federal funds 

3 may be used to purchase or guarantee obligations of, issue 

4 lines of credit to, provide direct or indirect access to any 

5 financing provided by the United States Government to, 

6 or provide direct or indirect grants and aid to any private 

7 market holder of the first loss position on a covered secu8 rity which, on or after the date of enactment of this Act, 

9 has defaulted on its obligations, is at risk of defaulting, 

10 or is likely to default, absent such assistance from the 

11 United States Government. 

12 SEC. 205. AUTHORITY TO PROTECT TAXPAYERS IN UN13 USUAL AND EXIGENT MARKET CONDITIONS. 

14 (a) IN GENERAL.—If the Corporation, upon the writ15 ten agreement of the Chairman of the Board of Governors 

16 of the Federal Reserve System and the Secretary of the 

17 Treasury, and in consultation with the Secretary of Hous18 ing and Urban Development, determines that unusual and 

19 exigent circumstances have created or threatened to create 

20 an anomalous lack of mortgage credit availability within 

21 the housing markets that could materially and severely 

22 disrupt the functioning of the housing finance system of 

23 the United States, the Corporation may, for a period not 

24 to exceed 6 months, provide insurance in accord with sec25 tion 204 to any covered security regardless of whether 


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1 such security has satisfied the requirements of section 

2 202(a). 

3 (b) CONSIDERATIONS.—In exercising the authority 

4 granted under subsection (a), the Corporation shall con5 sider the severity of the conditions present in the housing 

6 markets and the risks presented to the Mortgage Insur7 ance Fund in exercising such authority. 

8 (c) LIMITATION.—The authority granted to the Cor9 poration under subsection (a) may not be exercised more 

10 than once in any given 3-year period. 

11 SEC. 206. GENERAL POWERS. 

12 (a) CORPORATE POWERS.—The Federal Mortgage 

13 Insurance Corporation shall have power— 

14 (1) to adopt, alter, and use a corporate seal, 

15 which shall be judicially noticed; 

16 (2) to enter into and perform contracts, leases, 

17 cooperative agreements, or other transactions, on 

18 such terms as it may deem appropriate, with any 

19 agency or instrumentality of the United States, or 

20 with any State, Territory, or possession, or the Com21 monwealth of Puerto Rico, or with any political sub22 division thereof, or with any person, firm, associa23 tion, or corporation; 


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1 (3) to execute, in accordance with its bylaws, all 

2 instruments necessary or appropriate in the exercise 

3 of any of its powers; 

4 (4) in its corporate name, to sue and to be 

5 sued, and to complain and to defend, in any court 

6 of competent jurisdiction, State or Federal, but no 

7 attachment, injunction, or other similar process, 

8 mesne or final, shall be issued against the property 

9 of the Corporation; 

10 (5) to conduct its business without regard to 

11 any qualification or similar statute in any State of 

12 the United States, including the District of Colum13 bia, the Commonwealth of Puerto Rico, and the Ter14 ritories and possessions of the United States; 

15 (6) to lease, purchase, or acquire any property, 

16 real, personal, or mixed, or any interest therein, to 

17 hold, rent, maintain, modernize, renovate, improve, 

18 use, and operate such property, and to sell, for cash 

19 or credit, lease, or otherwise dispose of the same, at 

20 such time and in such manner as and to the extent 

21 that it may deem necessary or appropriate; 

22 (7) to prescribe, repeal, and amend or modify, 

23 rules, regulations, or requirements governing the 

24 manner in which its general business may be con25 ducted; 


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1 (8) to accept gifts or donations of services, or 

2 of property, real, personal, or mixed, tangible, or in3 tangible, in aid of any of its purposes; and 

4 (9) to do all things as are necessary or inci5 dental to the proper management of its affairs and 

6 the proper conduct of its business. 

7 (b) EXPENDITURES.—Except as may be otherwise 

8 provided in this title, in chapter 91 of title 31, United 

9 States Code, or in other laws specifically applicable to 

10 Government corporations, the Corporation shall determine 

11 the necessity for, and the character and amount of its obli12 gations and expenditures, and the manner in which they 

13 shall be incurred, allowed, paid, and accounted for. 

14 (c) EXEMPTION FROM CERTAIN TAXES.—The Cor15 poration, including its franchise, capital, reserves, surplus, 

16 mortgages or other security holdings, and income shall be 

17 exempt from all taxation now or hereafter imposed by the 

18 United States, by any territory, dependency, or possession 

19 thereof, or by any State, county, municipality, or local tax20 ing authority, except that any real property of the Cor21 poration shall be subject to State, territorial, county, mu22 nicipal, or local taxation to the same extent according to 

23 its value as other real property is taxed. 

24 (d) EXCLUSIVE USE OF NAME.—No individual, asso25 ciation, partnership, or corporation, except the bodies corVerDate Mar 15 2010 23:07 Jun 28, 2013 Jkt 029200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 E:\BILLS\S1217.IS S1217

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1 porate named under section 101, shall hereafter use the 

2 words ‘‘Federal Mortgage Insurance Corporation’’ or any 

3 combination of such words, as the name or a part thereof 

4 under which the individual, association, partnership, or 

5 corporation shall do business. Violations of the foregoing 

6 sentence may be enjoined by any court of general jurisdic7 tion at the suit of the proper body corporate. In any such 

8 suit, the plaintiff may recover any actual damages flowing 

9 from such violation, and, in addition, shall be entitled to 

10 punitive damages (regardless of the existence or nonexist11 ence of actual damages) of not exceeding $100 for each 

12 day during which such violation is committed or repeated. 

13 (e) FISCAL AGENTS.—The Federal Reserve banks 

14 are authorized and directed to act as depositories, 

15 custodians, and fiscal agents for each of the bodies cor16 porate named in section 101, for its own account or as 

17 fiduciary, and such banks shall be reimbursed for such 

18 services in such manner as may be agreed upon; and each 

19 of such bodies corporate may itself act in such capacities, 

20 for its own account or as fiduciary, and for the account 

21 of others. 

22 SEC. 207. EXEMPTIONS. 

23 (a) SECURITIES EXEMPT FROM SEC REGULA24 TION.— 


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1 (1) IN GENERAL.—All covered securities in2 sured or guaranteed by the Corporation shall, to the 

3 same extent as securities that are direct obligations 

4 of or obligations guaranteed as to principal or inter5 est by the United States, be deemed to be exempt 

6 securities within the meaning of the laws adminis7 tered by the Securities and Exchange Commission. 

8 (2) CONFORMING AMENDMENT.—The first sen9 tence of section 3(a)(2) of the Securities Act of 1933 

10 (15 U.S.C. 77c(a)(2)) is amended by inserting ‘‘or 

11 any covered security, as such term is defined under 

12 section 2(9) of the Housing Finance Reform and 

13 Taxpayer Protection Act of 2013;’’ after ‘‘Federal 

14 Reserve bank;’’. 

15 (b) QRM EXEMPTION.—Section 15G(e) of the Secu16 rities Exchange Act of 1934 (15 U.S.C. 78o–11(e)) is 

17 amended— 

18 (1) in paragraph (3)(B)— 

19 (A) by striking ‘‘Association, the’’ and in20 serting ‘‘Association and the’’; and 

21 (B) by striking ‘‘and the Federal home 

22 loan banks’’; and 

23 (2) by adding at the end the following: 

24 ‘‘(7) COVERED SECURITIES INSURED BY THE

25 FEDERAL MORTGAGE INSURANCE CORPORATION.— 


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1 Notwithstanding any other provision of this section, 

2 the requirements of this section shall not apply to 

3 any covered security, as such term is defined under 

4 section 2(9) of the Housing Finance Reform and 

5 Taxpayer Protection Act of 2013, insured or guar6 anteed by the Federal Mortgage Insurance Corpora7 tion or any institution that is subject to the super8 vision of the Federal Mortgage Insurance Corpora9 tion.’’. 

10 Subtitle B—Oversight of Market 

11 Participants 

12 SEC. 211. APPROVAL OF PRIVATE MORTGAGE INSURERS. 

13 (a) STANDARDS FOR APPROVAL OF PRIVATE MORT14 GAGE INSURERS.— 

15 (1) IN GENERAL.—The Corporation shall de16 velop, adopt, and publish standards for the approval 

17 by the Corporation of private mortgage insurers to 

18 provide private mortgage insurance on eligible mort19 gages. 

20 (2) REQUIRED STANDARDS.—The standards re21 quired under paragraph (1) shall include— 

22 (A) the financial history and condition of 

23 the insurer; 

24 (B) the adequacy of the insurer’s capital 

25 structure, including whether the insurer has 


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1 sufficient capital to cover the first loss insur2 ance obligations it assumes under this Act and 

3 that might be incurred in a period of economic 

4 stress, including, but not limited to, any period 

5 of economic stress that would result in a 30 

6 percent (or greater) national home price de7 cline; 

8 (C) the general character and fitness of 

9 the management of the insurer, including com10 pliance history with Federal and State laws; 

11 (D) the risk presented by such insurer to 

12 the Mortgage Insurance Fund; 

13 (E) the adequacy of insurance and fidelity 

14 coverage of the insurer; 

15 (F) a requirement that the insurer submit 

16 audited financial statements to the Director; 

17 and 

18 (G) any other standard the Corporation 

19 determines necessary or appropriate. 

20 (b) APPLICATION AND APPROVAL.— 

21 (1) APPLICATION PROCESS.—The Corporation 

22 shall establish an application process, in such form 

23 and manner and requiring such information as the 

24 Corporation may require, for the approval of private 

25 mortgage insurers under this section. 


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1 (2) APPROVAL.—The Corporation may approve 

2 any application made pursuant to paragraph (1) 

3 provided the private mortgage insurer meets the 

4 standards adopted under subsection (a). 

5 (3) PUBLICATION.—The Corporation shall— 

6 (A) publish in the Federal Register a list 

7 of newly approved private mortgage insurers; 

8 and 

9 (B) maintain an updated list of approved 

10 private mortgage insurers on the website of the 

11 Corporation. 

12 (c) REVIEW, SUSPENSION, AND REVOCATION OF AP13 PROVED STATUS.— 

14 (1) IN GENERAL.—The Corporation may review 

15 the status of any approved private mortgage insurer 

16 if the Corporation is notified of or becomes aware of 

17 any violation by the insurer of this Act or the rules 

18 promulgated pursuant to this Act. 

19 (2) SUSPENSION OR REVOCATION.— 

20 (A) CORPORATION AUTHORITY.—If the 

21 Corporation determines, in a review pursuant to 

22 paragraph (1), that an approved private mort23 gage insurer no longer meets the standards for 

24 approval, the Corporation may suspend or re25 voke the approved status of such insurer. 


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1 (B) RULE OF CONSTRUCTION.—The sus2 pension or revocation of an approved private 

3 mortgage insurer’s approved status under this 

4 paragraph shall have no effect on the status of 

5 any covered security. 

6 (3) PUBLICATION.—The Corporation shall— 

7 (A) publish in the Federal Register a list 

8 of any approved private mortgage insurers who 

9 lost their approved status; and 

10 (B) maintain an updated list of such insur11 ers on the website of the Corporation. 

12 (d) APPEALS.— 

13 (1) IN GENERAL.— 

14 (A) APPEALS OF DENIALS OF APPLICA15 TION.—A private mortgage insurer who submits 

16 an application under subsection (b)(1) to be17 come an approved private mortgage insurer 

18 may appeal a decision of the Corporation deny19 ing such application. 

20 (B) APPEALS OF DENIALS OF BENEFITS

21 OR SUSPENSIONS OF PARTICIPATION.—An ap22 proved private mortgage insurer may appeal a 

23 decision of the Corporation suspending or re24 voking the approved status of such insurer. 


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1 (2) FILING OF APPEAL.—Any insurer who files 

2 an appeal under paragraph (1) shall file the appeal 

3 with the Corporation not later than 90 days after 

4 the date on which the person receives notice of the 

5 decision of the Corporation being appealed. 

6 (3) FINAL DETERMINATION.—The Corporation 

7 shall make a final determination with respect to an 

8 appeal under paragraph (1) not later than 180 days 

9 after the date on which the appeal is filed under 

10 paragraph (2). 

11 (e) AVOIDANCE OF CONFLICTS OF INTEREST.—With 

12 respect to any eligible mortgage collateralizing a covered 

13 security insured under this Act, an approved private mort14 gage insurer may not provide insurance both— 

15 (1) in satisfaction of the credit enhancement re16 quired under section 2(11)(C); and 

17 (2) to cover the first loss position of private 

18 market holders of such covered security. 

19 SEC. 212. APPROVAL OF SERVICERS. 

20 (a) STANDARDS FOR APPROVAL OF SERVICERS.— 

21 (1) IN GENERAL.—The Corporation shall de22 velop, adopt, and publish standards for the approval 

23 by the Corporation of servicers to administer eligible 

24 mortgages, including standards with respect to— 


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1 (A) the collection and forwarding of prin2 cipal and interest payments; 

3 (B) the maintenance of escrow accounts; 

4 (C) the collection and payment of taxes 

5 and insurance premiums; 

6 (D) the maintenance of records on eligible 

7 mortgages; 

8 (E) the establishment of foreclosure loss 

9 mitigation programs that seek to enhance inves10 tor value and prevent, to greatest extent pos11 sible, the need to trigger any claim on insur12 ance offered by the Corporation pursuant to 

13 this title; 

14 (F) the advancement of principal and in15 terest payments to investors in the case of a de16 linquency by a borrower until such time as the 

17 borrower has made all payments in arrears or 

18 the property securing the eligible mortgage has 

19 been liquidated; and 

20 (G) implementing the terms of any loss 

21 mitigation and foreclosure prevention as re22 quired by a uniform securitization agreement 

23 developed under section 223. 


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1 (2) ADDITIONAL REQUIRED STANDARDS.—The 

2 standards required under paragraph (1) shall also 

3 include— 

4 (A) the financial history and condition of 

5 the servicer; 

6 (B) the general character and fitness of 

7 the management of the servicer, including com8 pliance history with Federal and State laws; 

9 (C) the risk presented by such servicer to 

10 the Mortgage Insurance Fund; 

11 (D) a requirement that the servicer submit 

12 audited financial statements to the Corporation; 

13 and 

14 (E) any other standard the Corporation 

15 determines necessary or appropriate. 

16 (3) COORDINATION WITH OTHER REGU17 LATORS.—In developing the standards required 

18 under paragraph (1), the Corporation shall— 

19 (A) coordinate with the Bureau of Con20 sumer Financial Protection; and 

21 (B) to the extent the Corporation deter22 mines practical and appropriate, shall coordi23 nate with the other Federal banking agencies. 

24 (b) APPLICATION AND APPROVAL.— 


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1 (1) APPLICATION PROCESS.—The Corporation 

2 shall establish an application process— 

3 (A) in such form and manner and requir4 ing such information as the Corporation may 

5 require, for the approval of servicers under this 

6 section; and 

7 (B) that does not discriminate against or 

8 otherwise disadvantage small servicers. 

9 (2) APPROVAL.—The Corporation may approve 

10 any application made pursuant to paragraph (1) 

11 provided the servicer meets the standards adopted 

12 under subsection (a). 

13 (3) PUBLICATION.—The Corporation shall— 

14 (A) publish in the Federal Register a list 

15 of newly approved servicers; and 

16 (B) maintain an updated list of approved 

17 servicers on the website of the Corporation. 

18 (c) REVIEW, SUSPENSION, AND REVOCATION OF AP19 PROVED STATUS.— 

20 (1) IN GENERAL.—The Corporation may review 

21 the status of any approved servicer if the Corpora22 tion is notified of or becomes aware of any violation 

23 by the servicer of this Act or the rules promulgated 

24 pursuant to this Act, including any failure by an ap25 proved servicer to comply with terms set forth in any 


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1 uniform securitization agreement developed under 

2 section 223. 

3 (2) SUSPENSION OR REVOCATION.— 

4 (A) CORPORATION AUTHORITY.—If the 

5 Corporation determines, in a review pursuant to 

6 paragraph (1), that an approved servicer no 

7 longer meets the standards for approval, the 

8 Corporation may suspend or revoke the ap9 proved status of such servicer. 

10 (B) RULE OF CONSTRUCTION.—The sus11 pension or revocation of an approved servicer’s 

12 approved status under this paragraph shall 

13 have no effect on the status of any covered se14 curity. 

15 (3) PUBLICATION.—The Corporation shall— 

16 (A) publish in the Federal Register a list 

17 of any approved servicers who lost their ap18 proved status; and 

19 (B) maintain an updated list of such 

20 servicers on the website of the Corporation. 

21 (d) APPEALS.— 

22 (1) IN GENERAL.— 

23 (A) APPEALS OF DENIALS OF APPLICA24 TION.—A servicer who submits an application 

25 under subsection (b)(1) to become an approved 


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1 servicer may appeal a decision of the Corpora2 tion denying such application. 

3 (B) APPEALS OF DENIALS OF BENEFITS

4 OR SUSPENSIONS OF PARTICIPATION.—An ap5 proved servicer may appeal a decision of the 

6 Corporation suspending or revoking the ap7 proved status of such servicer. 

8 (2) FILING OF APPEAL.—Any servicer who files 

9 an appeal under paragraph (1) shall file the appeal 

10 with the Corporation not later than 90 days after 

11 the date on which the person receives notice of the 

12 decision of the Corporation being appealed. 

13 (3) FINAL DETERMINATION.—The Corporation 

14 shall make a final determination with respect to an 

15 appeal under paragraph (1) not later than 180 days 

16 after the date on which the appeal is filed under 

17 paragraph (2). 

18 (e) PETITIONS FOR CHANGE OF SERVICER BY PRI19 VATE MARKET HOLDERS.—The Corporation shall develop 

20 a process by which private market holders of the first loss 

21 position in a covered security may petition the Corporation 

22 for a change in approved servicers if the private market 

23 holders can demonstrate that their current approved 

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1 ment, including by failing to meet any standard identified 

2 under subsection (a)(1). 

3 SEC. 213. APPROVAL OF ISSUERS. 

4 (a) STANDARDS FOR APPROVAL OF ISSUERS.— 

5 (1) IN GENERAL.—The Corporation shall de6 velop, adopt, and publish standards for the approval 

7 by the Corporation of issuers to issue covered securi8 ties, including standards with respect to an issuer’s 

9 ability to— 

10 (A) aggregate eligible mortgage loans into 

11 pools; 

12 (B) securitize eligible mortgage loans for 

13 sale to private investors as a covered security; 

14 (C) transfer investment risk and credit to 

15 private market participants in accordance with 

16 the risk-sharing mechanisms developed by the 

17 Corporation under section 202; 

18 (D) ensure equitable access to the sec19 ondary mortgage market for covered securities 

20 for all institutions regardless of size or geo21 graphic location; 

22 (E) create mechanisms for multi-lender 

23 pools; and 

24 (F) ensure that eligible mortgage loans 

25 that collateralize a covered security insured 


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1 under this title are originated in compliance 

2 with the requirements of this Act. 

3 (2) ADDITIONAL REQUIRED STANDARDS.—The 

4 standards required under paragraph (1) shall also 

5 include— 

6 (A) the financial history and condition of 

7 the issuer; 

8 (B) the adequacy of the capital structure 

9 of the issuer; 

10 (C) the general character and fitness of 

11 the management of the issuer, including compli12 ance history with Federal and State laws; 

13 (D) the risk presented by such issuer to 

14 the Mortgage Insurance Fund; 

15 (E) the adequacy of insurance and fidelity 

16 coverage of the issuer; 

17 (F) a requirement that the issuer submit 

18 audited financial statements to the Corporation; 

19 (G) the capacity of the issuer to secure 

20 first loss credit enhancement; and 

21 (H) any other standard the Corporation 

22 determines necessary or appropriate. 

23 (b) APPLICATION AND APPROVAL.— 

24 (1) APPLICATION PROCESS.— 


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1 (A) IN GENERAL.—The Corporation shall 

2 establish an application process, in such form 

3 and manner and requiring such information as 

4 the Corporation may require, for the approval 

5 of issuers under this section. 

6 (B) APPLICATION PROCESS FOR INSURED

7 DEPOSITORY INSTITUTIONS.—If an insured de8 pository institution seeks to become an ap9 proved issuer under this section, such institu10 tion may only submit its application via a sepa11 rately capitalized affiliate or subsidiary. 

12 (2) APPROVAL.—The Corporation— 

13 (A) may approve— 

14 (i) any application made pursuant to 

15 paragraph (1) provided the issuer meets 

16 the standards adopted under subsection 

17 (a); and 

18 (ii) any application to become an ap19 proved issuer made by the Federal Home 

20 Loan Bank System; and 

21 (B) shall ensure that at least one issuer 

22 approved to issue covered securities under this 

23 section is dedicated to serving the securitization 

24 needs of credit unions and community and mid25 size banks without securitization capabilities. 


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1 (3) PUBLICATION.—The Corporation shall— 

2 (A) publish in the Federal Register a list 

3 of newly approved issuers; and 

4 (B) maintain an updated list of approved 

5 issuers on the website of the Corporation. 

6 (c) FEDERAL HOME LOAN BANK SYSTEM.— 

7 (1) IN GENERAL.—If the Federal Home Loan 

8 Bank System is approved by the Corporation to be9 come an approved issuer under this section, the Cor10 poration shall— 

11 (A) develop a process by which each indi12 vidual Federal Home Loan Bank may elect not 

13 to engage or otherwise contribute to any activ14 ity practiced by the Federal Home Loan Bank 

15 System as an approved issuer; 

16 (B) ensure that, notwithstanding section 

17 11 of the Federal Home Loan Bank Act (12 

18 U.S.C. 1431), any covered securities issued by 

19 the Federal Home Loan Bank System as an ap20 proved issuer are not issued as consolidated 

21 Federal Home Loan Bank debentures and are 

22 explicitly designated or otherwise treated as not 

23 being the joint and several obligations of any 

24 individual Federal Home Loan Bank that has 

25 made an election under subparagraph (A); and 


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1 (C) ensure that in establishing the capital 

2 standards set forth under subsection (a)(2)(B) 

3 with respect to the Federal Home Loan Bank 

4 System, that such standards shall— 

5 (i) not be applicable to any individual 

6 Federal Home Loan Bank that has made 

7 an election under subparagraph (A); 

8 (ii) be based on the volume of eligible 

9 mortgage loan originations made by the 

10 Federal Home Loan Banks that have not 

11 made an election under subparagraph (A); 

12 and 

13 (iii) not adversely impact the tradi14 tional liquidity and advance business of the 

15 Federal Home Loan Banks or the Federal 

16 Home Loan Bank System. 

17 (2) FEDERAL HOME LOAN BANK ACT.— 

18 (A) AMENDMENT.—Section 12 of the Fed19 eral Home Loan Bank Act (12 U.S.C. 1432) is 

20 amended by adding at the end the following: 

21 ‘‘(c) Subject to such regulations as may be prescribed 

22 by the Corporation, one or more Federal Home Loan 

23 Banks may establish a subsidiary. Any subsidiary estab24 lished under this subsection shall be subject to supervision 

25 by the Office of Federal Home Loan Bank Supervision 


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1 of the Corporation and shall be restricted to engaging in 

2 activities related to being an approved issuer, as that term 

3 is defined under section 2(2) of the Housing Finance Re4 form and Taxpayer Protection Act of 2013.’’. 

5 (B) EFFECTIVE DATE.—The amendment 

6 made by subparagraph (A) shall take effect on 

7 the transfer date. 

8 (d) REVIEW, SUSPENSION, AND REVOCATION OF AP9 PROVED STATUS.— 

10 (1) IN GENERAL.—The Corporation may review 

11 the status of any approved issuer if the Corporation 

12 is notified of or becomes aware of any violation by 

13 the issuer of this Act or the rules promulgated pur14 suant to this Act. 

15 (2) SUSPENSION OR REVOCATION.— 

16 (A) CORPORATION AUTHORITY.—If the 

17 Corporation determines, in a review pursuant to 

18 paragraph (1), that an approved issuer no 

19 longer meets the standards for approval, the 

20 Corporation may suspend or revoke the ap21 proved status of such issuer. 

22 (B) RULE OF CONSTRUCTION.—The sus23 pension or revocation of an approved issuer’s 

24 approved status under this paragraph shall 


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1 have no effect on the status of any covered se2 curity. 

3 (3) PUBLICATION.—The Corporation shall— 

4 (A) publish in the Federal Register a list 

5 of any approved issuers who lost their approved 

6 status; and 

7 (B) maintain an updated list of such 

8 issuers on the website of the Corporation. 

9 (e) APPEALS.— 

10 (1) IN GENERAL.— 

11 (A) APPEALS OF DENIALS OF APPLICA12 TION.—An issuer who submits an application 

13 under subsection (b)(1) to become an approved 

14 issuer may appeal a decision of the Corporation 

15 denying such application. 

16 (B) APPEALS OF DENIALS OF BENEFITS

17 OR SUSPENSIONS OF PARTICIPATION.—An ap18 proved issuer may appeal a decision of the Cor19 poration suspending or revoking the approved 

20 status of such issuer. 

21 (2) FILING OF APPEAL.—Any issuer who files 

22 an appeal under paragraph (1) shall file the appeal 

23 with the Corporation not later than 90 days after 

24 the date on which the person receives notice of the 

25 decision of the Corporation being appealed. 


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1 (3) FINAL DETERMINATION.—The Corporation 

2 shall make a final determination with respect to an 

3 appeal under paragraph (1) not later than 180 days 

4 after the date on which the appeal is filed under 

5 paragraph (2). 

6 (f) LIMITATION ON MARKET SHARE.— 

7 (1) IN GENERAL.—The Corporation may not 

8 enter into any contract, covenant, or other agree9 ment with an approved issuer, if such contract, cov10 enant, or agreement would provide the issuer a 

11 share of the covered security issuer market in excess 

12 of 15 percent of the total market, as such market 

13 is measured by the total outstanding principal bal14 ance at origination of eligible mortgages 

15 collateralizing covered securities issued in the pre16 vious 12-month period. 

17 (2) EXCEPTION.—The limitation set forth 

18 under paragraph (1) shall not apply to— 

19 (A) an approved issuer described under 

20 subsection (b)(2)(A)(ii); 

21 (B) the FMIC Mutual Securitization Com22 pany; 

23 (C) any approved issuer which securitizes 

24 only eligible mortgage loans originated by the 

25 issuer or an affiliate of the issuer; or 


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1 (D) any approved issuer to which the Cor2 poration grants a waiver pursuant to paragraph 

3 (3). 

4 (3) WAIVER.—The Corporation may, during the 

5 3-year period beginning on the FMIC certification 

6 date, grant a waiver from the limitation set forth 

7 under paragraph (1) to an approved issuer if the 

8 Corporation determines that the number of approved 

9 issuers is insufficient, such that imposition of the 

10 limitation would adversely affect the availability of 

11 mortgage credit. 

12 (g) LIMITED AUTHORITY TO HOLD ELIGIBLE MORT13 GAGE LOANS.—An approved issuer may, for a period not 

14 to exceed 6-months, hold— 

15 (1) eligible mortgage loans on the balance sheet 

16 of such issuer; and 

17 (2) the first loss position in a covered security 

18 for purposes of obtaining insurance under this title. 

19 SEC. 214. APPROVAL OF BOND GUARANTORS. 

20 (a) STANDARDS FOR APPROVAL OF BOND GUARAN21 TORS.— 

22 (1) IN GENERAL.—The Corporation shall de23 velop, adopt, and publish standards for the approval 

24 by the Corporation of bond guarantors to guarantee 

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1 rities collateralized by eligible mortgages and insured 

2 by the Corporation. 

3 (2) REQUIRED STANDARDS.—The standards re4 quired under paragraph (1) shall include— 

5 (A) the financial history and condition of 

6 the guarantor; 

7 (B) that the guarantor maintain a min8 imum capital level equal to not less than 10 

9 percent of the unpaid principal balance of out10 standing mortgage-backed securities for which 

11 the guarantor is providing insurance, net of any 

12 transactions, including derivative transactions, 

13 repurchase agreements, reverse repurchase 

14 agreements, securities lending transactions, or 

15 securities borrowing transactions, that in the 

16 determination of the Corporation are used by 

17 the guarantor to hedge or mitigate against 

18 credit risk, provided that any such hedging 

19 transaction does not diminish the total amount 

20 of loss absorption capital in the secondary 

21 mortgage market that stands in front of the in22 surance provided by the Corporation under this 

23 title; 


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1 (C) the general character and fitness of 

2 the management of the guarantor, including 

3 compliance history with Federal and State laws; 

4 (D) the risk presented by such guarantor 

5 to the Mortgage Insurance Fund; 

6 (E) the adequacy of insurance and fidelity 

7 coverage of the guarantor; 

8 (F) a requirement that the guarantor sub9 mit audited financial statements to the Direc10 tor; 

11 (G) a requirement that the guarantor meet 

12 a minimum tangible common equity level, or 

13 other minimum capital threshold as the Cor14 poration determines necessary; and 

15 (H) any other standard the Corporation 

16 determines necessary or appropriate. 

17 (b) RULE OF CONSTRUCTION.—Any covered security 

18 issued by an approved issuer and insured by an approved 

19 bond guarantor shall be deemed to have satisfied the cred20 it-risk sharing requirements under section 202(a)(1) with 

21 respect to the eligibility of that security to obtain insur22 ance under this title. 

23 (c) APPLICATION AND APPROVAL.— 

24 (1) APPLICATION PROCESS.— 


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1 (A) IN GENERAL.—The Corporation shall 

2 establish an application process, in such form 

3 and manner and requiring such information as 

4 the Corporation may require, for the approval 

5 of bond guarantors under this section. 

6 (B) APPLICATION PROCESS BY INSURED

7 DEPOSITORY INSTITUTIONS.—If an insured de8 pository institution seeks to become an ap9 proved bond guarantor under this section, such 

10 institution may only submit its application via 

11 a separately capitalized affiliate or subsidiary. 

12 (2) APPROVAL.—The Corporation may approve 

13 any application made pursuant to paragraph (1) 

14 provided the bond guarantor meets the standards 

15 adopted under subsection (a). 

16 (3) PUBLICATION.—The Corporation shall— 

17 (A) publish in the Federal Register a list 

18 of newly approved bond guarantors; and 

19 (B) maintain an updated list of approved 

20 bond guarantors on the website of the Corpora21 tion. 

22 (d) REVIEW, SUSPENSION, AND REVOCATION OF AP23 PROVED STATUS.— 

24 (1) IN GENERAL.—The Corporation may review 

25 the status of any approved bond guarantor if the 


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1 Corporation is notified of or becomes aware of any 

2 violation by the insurer of this Act or the rules pro3 mulgated pursuant to this Act. 

4 (2) SUSPENSION OR REVOCATION.— 

5 (A) CORPORATION AUTHORITY.—If the 

6 Corporation determines, in a review pursuant to 

7 paragraph (1), that an approved bond guar8 antor no longer meets the standards for ap9 proval, the Corporation shall revoke the ap10 proved status of such guarantor. 

11 (B) RULE OF CONSTRUCTION.—The rev12 ocation of an approved bond guarantor’s ap13 proved status under this paragraph shall have 

14 no effect on the status of any covered security. 

15 (3) PUBLICATION.—The Corporation shall— 

16 (A) publish in the Federal Register a list 

17 of any approved bond guarantors who lost their 

18 approved status; and 

19 (B) maintain an updated list of such guar20 antors on the website of the Corporation. 

21 (e) APPEALS.— 

22 (1) IN GENERAL.— 

23 (A) APPEALS OF DENIALS OF APPLICA24 TION.—A bond guarantor who submits an ap25 plication under subsection (c)(1) to become an 


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1 approved bond guarantor may appeal a decision 

2 of the Corporation denying such application. 

3 (B) APPEALS OF DENIALS OF BENEFITS

4 OR SUSPENSIONS OF PARTICIPATION.—An ap5 proved bond guarantor may appeal a decision of 

6 the Corporation suspending or revoking the ap7 proved status of such guarantor. 

8 (2) FILING OF APPEAL.—Any bond guarantor 

9 who files an appeal under paragraph (1) shall file 

10 the appeal with the Corporation not later than 90 

11 days after the date on which the person receives no12 tice of the decision of the Corporation being ap13 pealed. 

14 (3) FINAL DETERMINATION.—The Corporation 

15 shall make a final determination with respect to an 

16 appeal under paragraph (1) not later than 180 days 

17 after the date on which the appeal is filed under 

18 paragraph (2). 

19 (f) LIMITATIONS ON APPROVED BOND GUARAN20 TORS.—With respect to any eligible mortgage 

21 collateralizing a covered security insured under this Act, 

22 an approved bond guarantor may not provide insurance— 

23 (1) in satisfaction of the credit enhancement re24 quired under section 2(11)(C) or as an approved pri25 vate mortgage insurer pursuant to section 211; and 


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1 (2) as an approved bond guarantor under this 

2 section. 

3 (g) PERMISSION TO CARRY OUT OTHER ACTIVI4 TIES.—Nothing in this Act prohibits an approved bond 

5 guarantor from being or controlling an approved issuer, 

6 provided that each issuer and bond guarantor, inde7 pendent of each other, meet the approval standards estab8 lished by the Corporation under this title. 

9 SEC. 215. AUTHORITY TO ESTABLISH FMIC MUTUAL 

10 SECURITIZATION COMPANY. 

11 (a) IN GENERAL.—The Corporation shall establish a 

12 mutual corporation to be known as the ‘‘FMIC Mutual 

13 Securitization Company’’. 

14 (b) PURPOSE.—The purpose of the FMIC Mutual 

15 Securitization Company is to— 

16 (1) develop, securitize, sell, and otherwise meet 

17 the issuing needs of credit unions, community and 

18 mid-size banks, and non-depository mortgage origi19 nators with respect to covered securities; and 

20 (2) purchase from its member participants for 

21 cash, on a single loan basis, eligible mortgage loans 

22 to securitize in a covered security. 

23 (c) SALE OF NECESSARY TECHNOLOGY.—Upon the 

24 FMIC certification date, the enterprises shall sell to the 

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1 ity, infrastructure, property, including intellectual prop2 erty, platform, or any other object or service of an enter3 prise that the Corporation determines necessary for the 

4 FMIC Mutual Securitization Company to carry out its ac5 tivities and operations. 

6 (d) DESIGNATION AS AN APPROVED ISSUER.—The 

7 FMIC Mutual Securitization Company shall be an ap8 proved issuer for purposes of section 213. 

9 (e) ELIGIBILITY.—Eligibility to participate as a 

10 member in the FMIC Mutual Securitization Company 

11 shall be limited to— 

12 (1) insured depository institutions having less 

13 than $15,000,000,000 in total consolidated assets at 

14 the time of the institution’s initial participation in 

15 the Company; or 

16 (2) any non-depository mortgage originator hav17 ing a minimum net worth of $2,500,000. 

18 (f) GOVERNANCE.— 

19 (1) RECOGNITION OF IMPORTANT ROLE OF

20 SMALLER INSTITUTIONS.—The Corporation shall 

21 take all necessary steps to ensure that the govern22 ance provisions of the FMIC Mutual Securitization 

23 Company reflect the important role in the mortgage 

24 market played by the small and mid-sized member 


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1 participants of the FMIC Mutual Securitization 

2 Company. 

3 (2) ESTABLISHMENT OF POSITION OF DIREC4 TOR.—There is established the position of the Direc5 tor of the FMIC Mutual Securitization Company 

6 who shall be the head of the Company. 

7 (3) BOARD OF DIRECTORS.— 

8 (A) IN GENERAL.—The management of 

9 the FMIC Mutual Securitization Company shall 

10 be vested in a Board of Directors (hereafter re11 ferred to as the ‘‘Mutual Board’’), which shall 

12 include representatives of member participants 

13 of the Company, including representatives of— 

14 (i) mortgage bankers; 

15 (ii) community banks; and 

16 (iii) credit unions. 

17 (B) INITIAL APPOINTMENT.—The Corpora18 tion shall make initial appointments of the 

19 members of the Mutual Board. Each such ini20 tial appointment shall be for a term 1 year. 

21 (C) APPOINTMENTS.—Following the initial 

22 1-year appointment of the members of the Mu23 tual Board, member participants in the FMIC 

24 Mutual Securitization Company shall elect the 


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1 members of the Mutual Board from within the 

2 membership of the Company. 

3 (D) ADMINISTRATION.—The Mutual Board 

4 shall administer the affairs of the FMIC Mu5 tual Securitization Company fairly and impar6 tially and without discrimination. 

7 (4) NO PREFERENCES FOR SIZE.—Member par8 ticipants of the FMIC Mutual Securitization Com9 pany shall have equal voting rights on any matters 

10 before the Company, regardless of the size of the in11 dividual member participant. 

12 (g) APPROVAL OF MEMBER PARTICIPANTS.— 

13 (1) IN GENERAL.—The Mutual Board shall de14 velop standards and procedures to approve the appli15 cation of member participants in the FMIC Mutual 

16 Securitization Company. 

17 (2) CONTENT OF STANDARDS.—The standards 

18 required under paragraph (1) shall include stand19 ards relating to the safety and soundness of prospec20 tive member participants, including standards re21 garding the underwriting practices of such prospec22 tive members. 

23 (3) COORDINATION WITH OTHER REGU24 LATORS.— 


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1 (A) CONSULTATION.—In approving any 

2 prospective member to become a member par3 ticipant in the FMIC Mutual Securitization 

4 Company, the Mutual Board may consult and 

5 share information with the primary prudential 

6 regulator of the prospective member. 

7 (B) PRIVILEGE PRESERVED.—Information 

8 shared pursuant to subparagraph (A) shall not 

9 be construed as waiving, destroying, or other10 wise affecting any privilege or confidential sta11 tus that a prospective member may claim with 

12 respect to such information under Federal or 

13 State law as to any person or entity other than 

14 the Mutual Board or its primary prudential 

15 regulator. 

16 (C) RULE OF CONSTRUCTION.—No provi17 sion of this subsection may be construed as im18 plying or establishing that— 

19 (i) any prospective member waives any 

20 privilege applicable to information that is 

21 shared or transferred under any cir22 cumstance to which this subsection does 

23 not apply; or 

24 (ii) any prospective would waive any 

25 privilege applicable to any information by 


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1 submitting the information directly to its 

2 primary prudential regulator, but for this 

3 subsection. 

4 (h) FUNDING AUTHORITY.— 

5 (1) AUTHORITY TO ESTABLISH MEMBERSHIP

6 FEES.—The Mutual Board shall have the authority 

7 to charge and collect fees, and may in its discretion 

8 increase or decrease such fee, on its member partici9 pants for membership in the FMIC Mutual 

10 Securitization Company, including to cover the costs 

11 of— 

12 (A) the initial capitalization of the Com13 pany; 

14 (B) the purchase of any function, activity, 

15 infrastructure, property, including intellectual 

16 property, platform, or any other object or serv17 ice from an enterprise pursuant to subsection 

18 (c); and 

19 (C) the continued operation of the Com20 pany. 

21 (2) LIMITATION.—The fees authorized under 

22 paragraph (1)— 

23 (A) shall be equitably assessed; and 


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1 (B) may be based on the volume of eligible 

2 mortgages that the member participant sells to 

3 the FMIC Mutual Securitization Company. 

4 (i) COORDINATION OF SERVICER APPROVAL.—The 

5 Mutual Board may coordinate with the Corporation to fa6 cilitate the application process for its member participants 

7 to become approved servicers of the Corporation pursuant 

8 to section 212. 

9 SEC. 216. ADDITIONAL AUTHORITY RELATING TO OVER10 SIGHT OF MARKET PARTICIPANTS. 

11 In carrying out its authorities under this subtitle, the 

12 Corporation may, in its discretion, develop, publish, and 

13 adopt such other additional standards or requirements as 

14 the Corporation determines necessary to ensure— 

15 (1) competition among approved private mort16 gage insurers, servicers, issuers, and bond guaran17 tors and other market participants in the secondary 

18 mortgage market; 

19 (2) competitive pricing among approved private 

20 mortgage insurers, servicers, issuers, and bond guar21 antors and other market participants in the sec22 ondary mortgage market; and 

23 (3) liquidity, transparency, and access to mort24 gage credit in the secondary mortgage market. 


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1 SEC. 217. CIVIL MONEY PENALTIES. 

2 (a) AUTHORITY.—In addition to any suspension or 

3 revocation of the approved status of an approved private 

4 mortgage insurer, servicer, issuer, or bond guarantor 

5 under this subtitle, the Corporation may, in its discretion, 

6 impose a civil money penalty on any such approved private 

7 mortgage insurer, servicer, issuer, or bond guarantor that 

8 has failed to comply with or otherwise violates— 

9 (1) any standard adopted by the Corporation 

10 pursuant to this subtitle; or 

11 (2) any other requirement or provision of this 

12 Act, or any order, condition, rule, or regulation 

13 issued pursuant to this Act, applicable to such pri14 vate mortgage insurer, servicer, issuer, or bond 

15 guarantor, as the case may be. 

16 (b) PROCEDURES.— 

17 (1) ESTABLISHMENT.—The Corporation shall 

18 establish standards and procedures governing the 

19 imposition of civil money penalties under this sec20 tion. Such standards and procedures— 

21 (A) shall provide for the Corporation to 

22 notify the approved private mortgage insurer, 

23 servicer, issuer, or bond guarantor, as the case 

24 may be, in writing of the determination of the 

25 Corporation to impose the penalty, which shall 

26 be made on the record; 


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1 (B) shall provide for the imposition of a 

2 penalty only after the approved private mort3 gage insurer, servicer, issuer, or bond guar4 antor, as the case may be, has been given an 

5 opportunity for a hearing on the record; and 

6 (C) may provide for review by the Corpora7 tion of any determination or order, or interlocu8 tory ruling, arising from a hearing. 

9 (2) FACTORS DETERMINING AMOUNT OF PEN10 ALTY.—In determining the amount of a penalty 

11 under this section, the Corporation shall give consid12 eration to factors including— 

13 (A) the gravity of the offense; 

14 (B) any history of prior offenses; 

15 (C) ability to pay the penalty; 

16 (D) injury to the public; 

17 (E) benefits received; 

18 (F) deterrence of future violations; and 

19 (G) such other factors as the Corporation 

20 may determine, by regulation, to be appro21 priate. 

22 (c) ACTION TO COLLECT PENALTY.—If the approved 

23 private mortgage insurer, servicer, issuer, or bond guar24 antor, as the case may be, fails to comply with an order 

25 by the Corporation imposing a civil money penalty under 


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1 this section, the Corporation may bring an action in the 

2 United States District Court for the District of Columbia 

3 to obtain a monetary judgment against the approved pri4 vate mortgage insurer, servicer, issuer, or bond guarantor, 

5 as the case may be, and such other relief as may be avail6 able. The monetary judgment may, in the court’s discre7 tion, include the attorneys’ fees and other expenses in8 curred by the United States in connection with the action. 

9 In an action under this subsection, the validity and appro10 priateness of the order imposing the penalty shall not be 

11 subject to review. 

12 (d) SETTLEMENTS.—The Corporation may com13 promise, modify, or remit any civil money penalty which 

14 may be, or has been, imposed under this section. 

15 (e) DEPOSIT OF PENALTIES.—The Corporation shall 

16 use any civil money penalties collected under this section 

17 to help fund the Mortgage Insurance Fund established 

18 under section 203. 

19 SEC. 218. PROTECTION OF PRIVILEGE AND OTHER MAT20 TERS RELATING TO DISCLOSURES BY MAR21 KET PARTICIPANTS. 

22 (a) INFORMATION SHARING AND MAINTENANCE OF

23 PRIVILEGE.—The Federal Deposit Insurance Act (12 

24 U.S.C. 1811 et seq.) is amended— 


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1 (1) in section 11(t)(2)(A) (12 U.S.C. 

2 1821(t)(2)(A)), by inserting after clause (v) the fol3 lowing: 

4 ‘‘(vii) The Federal Mortgage Insur5 ance Corporation.’’; and 

6 (2) in section 18(x) (12 U.S.C. 1828(x))— 

7 (A) by inserting ‘‘the Federal Mortgage In8 surance Corporation,’’ before ‘‘any Federal 

9 banking agency’’ each place that term appears; 

10 and 

11 (B) by striking ‘‘such agency’’ each place 

12 that term appears and inserting ‘‘Corporation, 

13 agency’’. 

14 (b) PERMISSIBLE CONSULTATION WITH FEDERAL

15 BANKING AGENCIES.— 

16 (1) IN GENERAL.—Pursuant to its authority 

17 under section 103(c), to facilitate the consultive 

18 process, the Corporation may share information with 

19 the Federal banking agencies, or any individual Fed20 eral banking agency, or any State bank supervisor, 

21 or foreign banking authority, on a one-time, regular, 

22 or periodic basis as determined by the Corporation 

23 regarding the capital, asset and liabilities, financial 

24 condition, risk management practices or any other 


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1 practice of any approved private mortgage insurer, 

2 servicer, issuer, or bond guarantor. 

3 (2) PRIVILEGE PRESERVED.—Information 

4 shared by the Corporation pursuant to paragraph 

5 (1) shall not be construed as waiving, destroying, or 

6 otherwise affecting any privilege or confidential sta7 tus that any approved private mortgage insurer, 

8 servicer, issuer, or bond guarantor or any other per9 son may claim with respect to such information 

10 under Federal or State law as to any person or enti11 ty other than such agencies, agency, supervisor, or 

12 authority. 

13 (3) RULE OF CONSTRUCTION.—No provision of 

14 this subsection may be construed as implying or es15 tablishing that— 

16 (A) any person waives any privilege appli17 cable to information that is shared or trans18 ferred under any circumstance to which this 

19 subsection does not apply; or 

20 (B) any person would waive any privilege 

21 applicable to any information by submitting the 

22 information directly to the Federal banking 

23 agencies, or any individual Federal banking 

24 agency, or any State bank supervisor, or foreign 

25 banking authority, but for this subsection. 


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1 Subtitle C—Transparency in 

2 Market Operations 

3 SEC. 221. REVIEW OF LOAN DOCUMENTS; DISCLOSURES. 

4 (a) IN GENERAL.—The Corporation shall, by rule— 

5 (1) require that approved issuers— 

6 (A) grant access to private market inves7 tors seeking to take the first loss position in a 

8 covered security to all— 

9 (i) documents relating to eligible 

10 mortgage loans collateralizing that covered 

11 security; and 

12 (ii) servicing reports of the approved 

13 servicer relating to such mortgages; and 

14 (B) disclose any other material information 

15 that a reasonable investor would want to know, 

16 and make no material omission of such infor17 mation, relating to eligible mortgage loans 

18 collateralizing a covered security; and 

19 (2) establish the timing, frequency, and manner 

20 in which such access and disclosures are made. 

21 (b) PRIVACY PROTECTIONS.—In prescribing the rules 

22 required under this section, the Corporation shall take into 

23 consideration issues of consumer privacy and all statutes, 

24 rules, and regulations related to privacy of consumer cred25 it information and personally identifiable information. 


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1 Such rules shall expressly prohibit the identification of 

2 specific borrowers. 

3 SEC. 222. INVESTOR IMMUNITY. 

4 Any private market investor that has taken the first 

5 loss position in a covered security or that has otherwise 

6 invested in any covered security insured under this Act 

7 shall have immunity and protection from civil liability 

8 under Federal and State law, and no cause of action may 

9 be brought under Federal or State law against such inves10 tor, with respect to whether or not eligible mortgages that 

11 collateralize a covered security insured under this Act have 

12 complied with the requirements of this Act, including, but 

13 not limited to, with respect to any underwriting require14 ments applicable to such mortgage, any representations or 

15 warranties made by an approved issuer or an approved 

16 bond guarantor with respect to such mortgages, or wheth17 er or not the terms of any uniform securitization agree18 ment have been met. 

19 SEC. 223. UNIFORM SECURITIZATION AGREEMENTS. 

20 (a) IN GENERAL.—The Corporation shall develop, 

21 adopt, and publish standard uniform securitization agree22 ments for covered securities which are insured under this 

23 Act. 


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1 (b) REQUIRED CONTENT.—The standard uniform 

2 securitization agreements required to be developed under 

3 subsection (a) shall include terms relating to— 

4 (1) pooling and servicing, including the develop5 ment of uniform standards and practices— 

6 (A) regarding remittance schedules and 

7 payment delays; and 

8 (B) permitting the transfer of servicing 

9 rights, if such transfer is determined to be in 

10 the best financial interest of the investor, as 

11 such interest is calculated on a net present 

12 value basis; 

13 (2) representations and warranties, including 

14 representations and warranties as to compliance or 

15 conformity with the requirements of this Act; 

16 (3) indemnification and remedies, including for 

17 the restitution or indemnification of the Corporation 

18 with respect to early term delinquencies of eligible 

19 mortgages collateralizing a covered security; 

20 (4) the qualification, responsibilities, and duties 

21 of trustees; and 

22 (5) any other terms or standards the Corpora23 tion determines necessary or appropriate. 

24 (c) DEFINING REPRESENTATION AND WARRANTY

25 VIOLATIONS.—In developing the uniform securitization 


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1 agreements required under subsection (a), the Corporation 

2 shall also develop, adopt, and publish clear and uniform 

3 standards that define and illustrate what actions, or omis4 sions to act, comprise a violation of the representations 

5 and warranties clauses that are made a part of such agree6 ments. 

7 (d) CONSULTATION.—The Corporation shall work 

8 with industry groups, including servicers, originators, 

9 issuers, and mortgage investors to develop the uniform 

10 securitization agreements required under subsection (a). 

11 SEC. 224. UNIFORM MORTGAGE DATABASE. 

12 (a) UNIFORM MORTGAGE DATABASE.—The Corpora13 tion shall establish, operate, and maintain a database for 

14 the collection, public use, and dissemination of uniform 

15 loan level information on eligible mortgages relating to— 

16 (1) loan characteristics; 

17 (2) borrower information; 

18 (3) the property securing the eligible mort19 gages; 

20 (4) loan data required at the time of application 

21 for insurance from the Corporation under this title; 

22 (5) the quality and consistency of appraisal and 

23 collateral data on eligible mortgages; 

24 (6) industry-wide servicing data standards; and 


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1 (7) such other data, datasets, information, 

2 facts, or measurements as the Corporation deter3 mines appropriate to improve and enhance loan 

4 quality and operational efficiencies within the sec5 ondary mortgage market. 

6 (b) CONSIDERATIONS.—In establishing the database 

7 required under subsection (a), the Corporation shall take 

8 into consideration, build upon, and adopt to the extent the 

9 Corporation determines appropriate, the existing data 

10 standards set forth under the Uniform Mortgage Data 

11 Program initiative established by the Federal Housing Fi12 nance Agency. 

13 (c) REGULATIONS.—The Corporation shall, by regu14 lation— 

15 (1) establish the manner and form by which 

16 any loan level information collected under subsection 

17 (a) may be accessed by the public, including whether 

18 or not to establish a fee for such access; 

19 (2) require that such loan level information be 

20 made available to the public in a uniform manner, 

21 in a form designed for ease and speed of access, ease 

22 and speed of downloading, and ease and speed of 

23 use; and 

24 (3) ensure the protection of any personally 

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1 tion, or mix of information, collected and made 

2 available for public access. 

3 (d) MONTHLY UPDATE.—The database required 

4 under subsection (a) shall be updated not less frequently 

5 than once a month. 

6 SEC. 225. ELECTRONIC REGISTRATION OF ELIGIBLE MORT7 GAGES. 

8 (a) ESTABLISHMENT OF ELECTRONIC REGISTRATION

9 SYSTEM.—The Corporation shall establish, operate, and 

10 maintain an electronic registry system for eligible mort11 gages that collateralize a covered security insured under 

12 this Act in order to automate, centralize, standardize, and 

13 improve the process of tracking changes in servicing rights 

14 and beneficial ownership interests in such eligible mort15 gages. 

16 (b) CONSIDERATIONS.—In establishing the electronic 

17 registry system required under subsection (a), the Cor18 poration shall take into consideration, build upon, and 

19 adopt to the extent the Corporation determines appro20 priate, any existing efforts of the Federal Housing Fi21 nance Agency or expertise among the private sector to de22 velop a sound, efficient system for document custody and 

23 electronic registration of mortgages, notes, titles, and 

24 liens. 


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1 Subtitle D—FMIC Structure 

2 SEC. 231. OFFICE OF UNDERWRITING. 

3 (a) ESTABLISHMENT.—There is established within 

4 the Federal Mortgage Insurance Corporation an Office of 

5 Underwriting which shall be headed by the Deputy Direc6 tor of Underwriting, who shall be appointed by the Board 

7 of Directors. 

8 (b) RESPONSIBILITIES.—The Office of Underwriting 

9 shall ensure, through oversight, analysis, and examination, 

10 that eligible mortgages that collateralize a covered security 

11 insured under this Act comply with the requirements of 

12 this Act, including with respect to— 

13 (1) the submission of complete and accurate 

14 loan data on eligible mortgages; 

15 (2) the identification of ineligible mortgage 

16 loans; 

17 (3) assisting lenders with originating high-qual18 ity, lower-risk eligible mortgages; and 

19 (4) any other activity that the Director deter20 mines appropriate. 

21 SEC. 232. OFFICE OF SECURITIZATION. 

22 (a) ESTABLISHMENT.—There is established within 

23 the Federal Mortgage Insurance Corporation an Office of 

24 Securitization which shall be headed by the Deputy DirecVerDate Mar 15 2010 23:07 Jun 28, 2013 Jkt 029200 PO 00000 Frm 00100 Fmt 6652 Sfmt 6201 E:\BILLS\S1217.IS S1217

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1 tor of Securitization, who shall be appointed by the Board 

2 of Directors. 

3 (b) RESPONSIBILITIES.— 

4 (1) IN GENERAL.—The Office of Securitization 

5 shall— 

6 (A) oversee and supervise the common 

7 securitization platform developed by the busi8 ness entity announced by the Federal Housing 

9 Finance Agency and established by the enter10 prises, including by requiring that the platform 

11 have system capabilities to permit the issuance 

12 of multi-lender covered securities; 

13 (B) ensure that credit unions, community 

14 and mid-size banks, and small non-depository 

15 lenders have equitable access to any such plat16 form, including through the development and 

17 facilitation of options for multi-lender pools of 

18 eligible mortgages to be securitized and issued 

19 as covered securities through such platform; 

20 and 

21 (C) coordinate and consult with the Fed22 eral Home Loan Bank System to establish a 

23 securitization platform that addresses the needs 

24 of its members. 


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1 (2) RULES FOR USE OF COMMON

2 SECURITIZATION PLATFORM.— 

3 (A) IN GENERAL.—The Corporation, act4 ing through the Office of Securitization, may 

5 promulgate rules— 

6 (i) regarding the use of the common 

7 securitization platform described under 

8 paragraph (1)(A); and 

9 (ii) to permit securities other than 

10 covered securities to be issued through 

11 such platform for reasonable compensation. 

12 (B) CONTENT OF RULES.—Any rule that 

13 may be promulgated under subparagraph (A) 

14 may include a requirement that any security to 

15 be issued through the common securitization 

16 platform be subject to a uniform securitization 

17 agreement developed under section 223. 

18 (c) ESTABLISHMENT OF DATABASE TO PROVIDE NO19 TICE TO DIFFERENT CLASSES OF LIEN HOLDERS.—The 

20 Office of Securitization shall establish, operate, and main21 tain a database that— 

22 (1) can be accessed by any holder of a lien on 

23 an eligible mortgage; 


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1 (2) identifies and tracks if a junior lien or any 

2 other subordinate lien has been issued on the prop3 erty securing an eligible mortgage; 

4 (3) notifies, to the extent feasible, any senior or 

5 first lien holder of the existence of such junior or 

6 subordinate lien; and 

7 (4) informs— 

8 (A) the senior or first lien holder of the 

9 monthly performance of the junior or subordi10 nate lien; and 

11 (B) the junior or subordinate lien holder of 

12 the monthly performance of the senior or first 

13 lien. 

14 SEC. 233. OFFICE OF FEDERAL HOME LOAN BANK SUPER15 VISION. 

16 (a) ESTABLISHMENT.—There is established within 

17 the Federal Mortgage Insurance Corporation an Office of 

18 Federal Home Loan Bank Supervision which shall be 

19 headed by the Deputy Director of Federal Home Loan 

20 Bank Supervision, who shall be appointed by the Board 

21 of Directors. 

22 (b) RESPONSIBILITIES.—The Office of Federal Home 

23 Loan Bank Supervision shall— 

24 (1) oversee, coordinate, and supervise the Fed25 eral Home Loan Banks and the Federal Home Loan 


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1 Bank System, including the transition of all activi2 ties transferred to the Corporation pursuant to sec3 tion 301; and 

4 (2) supervise any authorized subsidiary of one 

5 or more Federal Home Loan Banks that is approved 

6 as an approved issuer pursuant to section 

7 213(b)(2)(A)(ii), including with respect to the initial 

8 capitalization of any such subsidiary. 

9 TITLE III—TRANSFER OF POW10 ERS, PERSONNEL, AND PROP11 ERTY TO FMIC FROM FHFA 

12 SEC. 301. POWERS AND DUTIES TRANSFERRED. 

13 (a) FEDERAL HOME LOAN BANK FUNCTIONS

14 TRANSFERRED.— 

15 (1) TRANSFER OF FUNCTIONS.—There are 

16 transferred to the Corporation all functions of the 

17 Federal Housing Finance Agency and the Director 

18 of the Federal Housing Finance Agency relating 

19 to— 

20 (A) the supervision of the Federal Home 

21 Loan Banks and the Federal Home Loan Bank 

22 System; and 

23 (B) all rulemaking authority of the Federal 

24 Housing Finance Agency and the Director of 

25 the Federal Housing Finance Agency relating 


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1 to the Federal Home Loan Banks and the Fed2 eral Home Loan Bank System. 

3 (2) POWERS, AUTHORITIES, RIGHTS, AND DU4 TIES.—The Corporation shall succeed to all powers, 

5 authorities, rights, and duties that were vested in 

6 the Federal Housing Finance Agency and the Direc7 tor of the Federal Housing Finance Agency, includ8 ing all conservatorship or receivership authorities, on 

9 the day before the transfer date in connection with 

10 the functions and authorities transferred under 

11 paragraph (1). 

12 (3) EFFECTIVE DATE.—The transfer of func13 tions under this paragraph shall take effect on the 

14 transfer date. 

15 (b) CONTINUATION AND COORDINATION OF CERTAIN

16 ACTIONS.— 

17 (1) IN GENERAL.—All regulations, orders, de18 terminations, and resolutions described under para19 graph (2) shall remain in effect according to the 

20 terms of such regulations, orders, determinations, 

21 and resolutions, and shall be enforceable by or 

22 against the Corporation until modified, terminated, 

23 set aside, or superseded in accordance with applica24 ble law by the Corporation, any court of competent 

25 jurisdiction, or operation of law. 


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1 (2) APPLICABILITY.—A regulation, order, de2 termination, or resolution is described under this 

3 subsection if it— 

4 (A) was issued, made, prescribed, or al5 lowed to become effective by— 

6 (i) the Federal Housing Finance 

7 Agency; or 

8 (ii) a court of competent jurisdiction, 

9 and relates to functions transferred by this 

10 Act; 

11 (B) relates to the performance of functions 

12 that are transferred by this section; and 

13 (C) is in effect on the transfer date. 

14 (c) DISPOSITION OF AFFAIRS.—During the period 

15 preceding the transfer date, the Director of the Federal 

16 Housing Finance Agency, for the purpose of winding up 

17 the affairs of the Federal Housing Finance Agency in con18 nection with the performance of functions that are trans19 ferred by this section— 

20 (1) shall manage the employees of such Agency 

21 and provide for the payment of the compensation 

22 and benefits of any such employees which accrue be23 fore the transfer date; and 

24 (2) may take any other action necessary for the 

25 purpose of winding up the affairs of the Office. 


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1 (d) USE OF PROPERTY AND SERVICES.— 

2 (1) PROPERTY.—The Corporation may use the 

3 property and services of the Federal Housing Fi4 nance Agency to perform functions which have been 

5 transferred to the Corporation until such time as the 

6 Agency is abolished under section 303 to facilitate 

7 the orderly transfer of functions transferred under 

8 this section, any other provision of this Act, or any 

9 amendment made by this Act to any other provision 

10 of law. 

11 (2) AGENCY SERVICES.—Any agency, depart12 ment, or other instrumentality of the United States, 

13 and any successor to any such agency, department, 

14 or instrumentality, that was providing supporting 

15 services to the Agency before the transfer date in 

16 connection with functions that are transferred to the 

17 Corporation shall— 

18 (A) continue to provide such services, on a 

19 reimbursable basis, until the transfer of such 

20 functions is complete; and 

21 (B) consult with any such agency to co22 ordinate and facilitate a prompt and reasonable 

23 transition. 

24 (e) CONTINUATION OF SERVICES.—The Corporation 

25 may use the services of employees and other personnel of 


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1 the Federal Housing Finance Agency, on a reimbursable 

2 basis, to perform functions which have been transferred 

3 to the Corporation for such time as is reasonable to facili4 tate the orderly transfer of functions pursuant to this sec5 tion, any other provision of this Act, or any amendment 

6 made by this Act to any other provision of law. 

7 (f) SAVINGS PROVISIONS.— 

8 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA9 TIONS NOT AFFECTED.—Subsection (a) and section 

10 303 shall not affect the validity of any right, duty, 

11 or obligation of the United States, the Director of 

12 the Federal Housing Finance Agency, the Federal 

13 Housing Finance Agency, or any other person, that 

14 existed on the day before transfer date. 

15 (2) CONTINUATION OF SUITS.—No action or 

16 other proceeding commenced by or against the Di17 rector of the Federal Housing Finance Agency in 

18 connection with the functions that are transferred to 

19 the Corporation under this section shall abate by 

20 reason of the enactment of this Act, except that the 

21 Corporation shall be substituted for the Director of 

22 the Federal Housing Finance Agency as a party to 

23 any such action or proceeding. 

24 (g) CONFORMING AMENDMENTS.— 


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1 (1) FEDERAL HOME LOAN BANK ACT.—The 

2 Federal Home Loan Bank Act (12 U.S.C. 1421 et 

3 seq.) is amended— 

4 (A) by striking ‘‘the Director’’ and insert5 ing ‘‘the Corporation’’ each place that term ap6 pears; 

7 (B) by striking ‘‘The Director’’ and insert8 ing ‘‘The Corporation’’ each place that term ap9 pears; 

10 (C) by striking ‘‘Chairman of the Director 

11 of Governors’’ and inserting ‘‘Chairman of the 

12 Board of Governors’’ each place that term ap13 pears; 

14 (D) by striking ‘‘the Agency’’ and inserting 

15 ‘‘the Corporation’’ each place that term ap16 pears; 

17 (E) in section 2, by striking paragraphs 

18 (11) and (12) and inserting the following: 

19 ‘‘(11) CORPORATION.—The term ‘Corporation’ 

20 means the Federal Mortgage Insurance Corporation 

21 established under title I of the Housing Finance Re22 form and Taxpayer Protection Act of 2013.’’; and 

23 (F) in section 11(l)(5), in the header to 

24 such paragraph, by striking ‘‘OF THE DIREC25 TOR’’. 


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1 (2) FEDERAL HOUSING ENTERPRISES FINAN2 CIAL SAFETY AND SOUNDNESS ACT.—Section 1316 

3 of the Federal Housing Enterprises Financial Safety 

4 and Soundness Act of 1992 (12 U.S.C. 4516) is 

5 amended— 

6 (A) in subsection (a)— 

7 (i) in the matter preceding paragraph 

8 (1), by striking ‘‘the regulated entities’’ 

9 and inserting ‘‘each enterprise’’; and 

10 (ii) in paragraph (1), by striking ‘‘and 

11 under section 20 of the Federal Home 

12 Loan Bank Act’’; 

13 (B) in subsection (b), by striking para14 graph (2); 

15 (C) in subsection (c)— 

16 (i) by striking ‘‘any regulated entity’’ 

17 and inserting ‘‘any enterprise’’; 

18 (ii) by striking ‘‘the regulated entity’’ 

19 and inserting ‘‘the enterprise’’; 

20 (iii) by striking ‘‘a regulated entity’’ 

21 and inserting ‘‘an enterprise’’ each place 

22 that term appears; 

23 (iv) by striking ‘‘such regulated enti24 ty’’ and inserting ‘‘such enterprise’’ each 

25 place that term appears; and 


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1 (v) by striking ‘‘such entity’’ and in2 serting ‘‘such enterprise’’; and 

3 (D) in subsection (e)— 

4 (i) by striking ‘‘each regulated entity’’ 

5 and inserting ‘‘each enterprise’’; and 

6 (ii) by striking ‘‘such regulated enti7 ty’’ and inserting ‘‘such enterprise’’. 

8 (3) RIGHT TO FINANCIAL PRIVACY ACT OF

9 1978.—Section 1113(o) of the Right to Financial 

10 Privacy Act of 1978 (12 U.S.C. 3413(o)) is amend11 ed— 

12 (A) in the heading to the subsection, by 

13 ‘‘FEDERAL HOUSING FINANCE AGENCY’’ and 

14 inserting ‘‘FEDERAL MORTGAGE INSURANCE

15 CORPORATION’’; 

16 (B) by striking ‘‘Federal Housing Finance 

17 Agency’’ and inserting ‘‘Federal Mortgage In18 surance Corporation’’; and 

19 (C) by striking ‘‘Federal Housing Finance 

20 Agency’s’’ and inserting ‘‘Federal Mortgage In21 surance Corporation’s’’. 

22 (4) EFFECTIVE DATE.—The amendments made 

23 by this subsection shall take effect on the transfer 

24 date. 


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

2 FHFA. 

3 (a) TRANSFER.—Each employee of the Federal 

4 Housing Finance Agency that is employed in connection 

5 with functions that are transferred to the Corporation 

6 under section 301 shall be transferred to the Corporation 

7 for employment, not later than the transfer date, and such 

8 transfer shall be deemed a transfer of function for pur9 poses of section 3503 of title 5, United States Code. 

10 (b) STATUS OF EMPLOYEES.—The transfer of func11 tions under this title, and the abolishment of the Federal 

12 Housing Finance Agency under section 303, may not be 

13 construed to affect the status of any transferred employee 

14 as an employee of an agency of the United States for pur15 poses of any other provision of law. 

16 (c) GUARANTEED POSITIONS.—Each employee trans17 ferred under subsection (a) shall be guaranteed a position 

18 with the same status, tenure, grade, and pay as that held 

19 on the day immediately preceding the transfer. 

20 (d) APPOINTMENT AUTHORITY FOR EXCEPTED EM21 PLOYEES.— 

22 (1) IN GENERAL.—In the case of an employee 

23 occupying a position in the excepted service, any ap24 pointment authority established under law or by reg25 ulations of the Office of Personnel Management for 


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1 filling such position shall be transferred, subject to 

2 paragraph (2). 

3 (2) DECLINE OF TRANSFER.—The Corporation 

4 may decline a transfer of authority under paragraph 

5 (1), to the extent that such authority relates to a po6 sition excepted from the competitive service because 

7 of its confidential, policymaking, policy-determining, 

8 or policy-advocating character. 

9 (e) REORGANIZATION.—If the Corporation deter10 mines, after the end of the 1-year period beginning on the 

11 transfer date, that a reorganization of the combined work12 force is required, that reorganization shall be deemed a 

13 major reorganization for purposes of affording affected 

14 employee retirement under section 8336(d)(2) or 

15 8414(b)(1)(B) of title 5, United States Code. 

16 (f) EMPLOYEE BENEFIT PROGRAMS.— 

17 (1) IN GENERAL.—Any employee of the Federal 

18 Housing Finance Agency accepting employment with 

19 the Corporation as a result of a transfer under sub20 section (a) may retain, for 12 months after the date 

21 on which such transfer occurs, membership in any 

22 employee benefit program of the Agency or the Cor23 poration, as applicable, including insurance, to which 

24 such employee belongs on the transfer date if— 


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1 (A) the employee does not elect to give up 

2 the benefit or membership in the program; and 

3 (B) the benefit or program is continued by 

4 the Corporation. 

5 (2) COST DIFFERENTIAL.— 

6 (A) IN GENERAL.—The difference in the 

7 costs between the benefits which would have 

8 been provided by the Federal Housing Finance 

9 Agency and those provided by this section shall 

10 be paid by the Corporation. 

11 (B) HEALTH INSURANCE.—If any em12 ployee elects to give up membership in a health 

13 insurance program or the health insurance pro14 gram is not continued by the Corporation, the 

15 employee shall be permitted to select an alter16 nate Federal health insurance program not 

17 later than 30 days after the date of such elec18 tion or notice, without regard to any other reg19 ularly scheduled open season. 

20 SEC. 303. ABOLISHMENT OF FHFA. 

21 Effective upon the FMIC certification date, the Fed22 eral Housing Finance Agency and the position of the Di23 rector of the Federal Housing Finance Agency are abol24 ished. 


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1 SEC. 304. TRANSFER OF PROPERTY AND FACILITIES. 

2 Effective upon the FMIC certification date all prop3 erty of the Federal Housing Finance Agency shall transfer 

4 to the Corporation. 

5 SEC. 305. TECHNICAL AND CONFORMING AMENDMENTS. 

6 (a) EFFECTIVE DATE.—The amendments made by 

7 this section shall take effect on the date of enactment of 

8 this Act. 

9 (b) REFERENCES IN FEDERAL LAW.—On and after 

10 the date of enactment of this Act, any reference in Federal 

11 law to the Director of the Federal Housing Finance Agen12 cy or the Federal Housing Finance Agency, in connection 

13 with any function of the Director of the Federal Housing 

14 Finance Agency or the Federal Housing Finance Agency 

15 transferred under section 301, shall be deemed a reference 

16 to the Chairperson of the Federal Mortgage Insurance 

17 Corporation or the Federal Mortgage Insurance Corpora18 tion, as appropriate and consistent with the amendments 

19 made by this Act. 

20 (c) TITLE 18, UNITED STATES CODE.—Title 18, 

21 United States Code, is amended— 

22 (1) in section 1905, by inserting ‘‘or the Fed23 eral Mortgage Insurance Corporation’’ after ‘‘Fed24 eral Housing Finance Agency’’; 

25 (2) in section 212(c)(2)— 


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1 (A) in subparagraph (F), by striking ‘‘; 

2 and’’ and inserting a semicolon; 

3 (B) in subparagraph (G), by striking the 

4 period at the end and inserting ‘‘; and’’; and 

5 (C) by adding at the end the following: 

6 ‘‘(H) the Federal Mortgage Insurance Cor7 poration.’’; 

8 (3) in section 657, by inserting ‘‘the Federal 

9 Mortgage Insurance Corporation,’’ after ‘‘Federal 

10 Housing Finance Agency,’’; 

11 (4) in section 1006, by inserting ‘‘the Federal 

12 Mortgage Insurance Corporation,’’ after ‘‘Federal 

13 Housing Finance Agency,’’; and 

14 (5) in section 1014, by inserting ‘‘the Federal 

15 Mortgage Insurance Corporation,’’ after ‘‘Federal 

16 Housing Finance Agency,’’. 

17 (d) FLOOD DISASTER PROTECTION ACT OF 1973.— 

18 Section 102(b)(5) of the Flood Disaster Protection Act of 

19 1973 (42 U.S.C. 4012a(b)(5)) is amended in subsection 

20 (b)(5), by inserting ‘‘the Federal Mortgage Insurance Cor21 poration,’’ after ‘‘Federal Housing Finance Agency,’’. 

22 (e) TITLE 5, UNITED STATES CODE.—Title 5, 

23 United States Code, is amended— 


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1 (1) in section 5313, by inserting the following 

2 new item after the item relating to the Director of 

3 the Federal Housing Finance Agency: 

4 ‘‘Director of the Federal Mortgage Insurance 

5 Corporation.’’; and 

6 (2) in section 3132(a)(1)(D), by inserting ‘‘the 

7 Federal Mortgage Insurance Corporation,’’ after 

8 ‘‘Federal Housing Finance Agency,’’. 

9 (f) SARBANES-OXLEY ACT.—Section 

10 105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 2002 

11 (15 U.S.C. 7215(b)(5)(B)(ii)(II)) is amended by inserting 

12 ‘‘or the Chairperson of the Federal Mortgage Insurance 

13 Corporation’’ after ‘‘Director of the Federal Housing Fi14 nance Agency’’. 

15 (g) FEDERAL DEPOSIT INSURANCE ACT.—The Fed16 eral Deposit Insurance Act (12 U.S.C. 1811 et seq.) is 

17 amended— 

18 (1) in section 7(a)(2)(A), by inserting ‘‘the 

19 Federal Mortgage Insurance Corporation,’’ after 

20 ‘‘Federal Housing Finance Agency,’’ each place that 

21 term appears; 

22 (2) in section 8(e)(7)(A)(vi), by inserting ‘‘, the 

23 Federal Mortgage Insurance Corporation,’’ after 

24 ‘‘Federal Housing Finance Agency’’; 


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1 (3) in section 11(t)(2)(A), by adding at the end 

2 the following: 

3 ‘‘(viii) The Federal Mortgage Insur4 ance Corporation.’’; and 

5 (4) in section 33(e), by inserting ‘‘, the Federal 

6 Mortgage Insurance Corporation,’’ after ‘‘Federal 

7 Housing Finance Agency’’. 

8 (h) RIEGLE COMMUNITY DEVELOPMENT AND REGU9 LATORY IMPROVEMENT ACT OF 1994.—Section 117(e) of 

10 the Riegle Community Development and Regulatory Im11 provement Act of 1994 (12 U.S.C. 4716(e)) is amended 

12 by inserting ‘‘the Federal Mortgage Insurance Corpora13 tion,’’ after ‘‘Federal Housing Finance Agency,’’. 

14 (i) MAHRA ACT OF 1997.—Section 517(b)(4) of the 

15 Multifamily Assisted Housing Reform and Affordability 

16 Act of 1997 (42 U.S.C. 1437f note) is amended by insert17 ing ‘‘the Federal Mortgage Insurance Corporation,’’ after 

18 ‘‘Federal Housing Finance Agency,’’. 

19 (j) TITLE 44, UNITED STATES CODE.—Section 

20 3502(5) of title 44, United States Code, is amended by 

21 inserting ‘‘the Federal Mortgage Insurance Corporation,’’ 

22 after ‘‘Federal Housing Finance Agency,’’. 

23 (k) ACCESS TO LOCAL TV ACT OF 2000.—Section 

24 1004(d)(2)(D)(iii) of the Launching Our Communities’ 

25 Access to Local Television Act of 2000 (47 U.S.C. 


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1 1103(d)(2)(D)(iii)) is amended by inserting ‘‘or the Fed2 eral Mortgage Insurance Corporation,’’ after ‘‘Federal 

3 Housing Finance Agency’’. 

4 (l) FIRREA.—The Financial Institutions Reform, 

5 Recovery, and Enhancement Act of 1989 is amended— 

6 (1) in section 1216— 

7 (A) in subsection (a)— 

8 (i) in paragraph (2), by striking ‘‘; 

9 and’’ and inserting a semicolon; 

10 (ii) in paragraph (3), by striking the 

11 period and inserting ‘‘; and’’; and 

12 (iii) by adding at the end the fol13 lowing: 

14 ‘‘(4) the Federal Mortgage Insurance Corpora15 tion.’’; and 

16 (B) in subsection (c), by inserting ‘‘the 

17 Federal Mortgage Insurance Corporation,’’ be18 fore ‘‘and the Federal Housing Finance Agen19 cy,’’; 

20 (2) in section 402(e), by striking ‘‘Federal 

21 Housing Finance Agency’’ each place that term ap22 pears and inserting ‘‘Federal Mortgage Insurance 

23 Corporation’’; 

24 (3) in section 1124, by inserting ‘‘the Federal 

25 Mortgage Insurance Corporation,’’ after ‘‘Federal 


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•S 1217 IS

1 Housing Finance Agency,’’ each place that term ap2 pears; and 

3 (4) in section 1125(b), by inserting ‘‘the Fed4 eral Mortgage Insurance Corporation,’’ after ‘‘Fed5 eral Housing Finance Agency,’’. 

6 (m) EESA.—The Emergency Economic Stabilization 

7 Act of 2008 (12 U.S.C. 5201 note) is amended— 

8 (1) in section 104(b)— 

9 (A) in paragraph (4), by striking ‘‘; and’’ 

10 and inserting a semicolon; 

11 (B) in paragraph (5), by striking the pe12 riod and inserting ‘‘; and’’; and 

13 (C) by adding at the end the following: 

14 ‘‘(6) the Federal Mortgage Insurance Corpora15 tion.’’; and 

16 (2) in section 109(b), by inserting ‘‘the Federal 

17 Mortgage Insurance Corporation,’’ after ‘‘Federal 

18 Housing Finance Agency,’’. 

19 (n) DODD-FRANK ACT.—The Dodd-Frank Wall 

20 Street Reform and Consumer Protection Act (Public Law 

21 111–203) is amended— 

22 (1) in section 342(g)(1)— 

23 (A) in subparagraph (H), by striking ‘‘; 

24 and’’ and inserting a semicolon; 


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1 (B) in subparagraph (I), by striking the 

2 period and inserting ‘‘; and’’; and 

3 (C) by adding at the end the following: 

4 ‘‘(J) the Federal Mortgage Insurance Cor5 poration.’’; 

6 (2) in section 989E(a)(1), by adding at the end 

7 the following: 

8 ‘‘(J) The Federal Mortgage Insurance Cor9 poration.’’; and 

10 (3) in section 1481(b), by inserting ‘‘the Fed11 eral Mortgage Insurance Corporation,’’ after ‘‘Fed12 eral Housing Finance Agency,’’. 

13 (o) HOUSING AND URBAN-RURAL RECOVERY ACT.— 

14 Section 469 of the Housing and Urban-Rural Recovery 

15 Act of 1983 (12 U.S.C. 1701p–1) is amended, in the first 

16 sentence, by inserting ‘‘the Federal Mortgage Insurance 

17 Corporation,’’ after ‘‘Federal Housing Finance Agency,’’. 

18 (p) NEIGHBORHOOD REINVESTMENT CORPORATION

19 ACT.—Section 606(c)(3) of the Neighborhood Reinvest20 ment Corporation Act (42 U.S.C. 8105(c)(3)) is amended 

21 by inserting ‘‘, the Federal Mortgage Insurance Corpora22 tion,’’ after ‘‘Federal Housing Finance Agency’’. 

23 (q) FEDERAL INSURANCE OFFICE ACT.—Section 

24 313(r)(4) of title 31, United States Code, is amended by 


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1 inserting ‘‘the Federal Mortgage Insurance Corporation,’’ 

2 after ‘‘Federal Housing Finance Agency,’’. 

3 (r) COMMODITY EXCHANGE ACT.—Section 

4 1a(39)(E) of the Commodity Exchange Act (7 U.S.C. 

5 1a(39)(E)) is amended— 

6 (1) by striking ‘‘a regulated entity’’ and insert7 ing ‘‘an enterprise’’; and 

8 (2) by inserting before the period at the end 

9 ‘‘the Federal Mortgage Insurance Corporation in the 

10 case of a swap dealer, major swap participant, secu11 rity-based swap dealer, or major security-based swap 

12 participant that is a Federal Home Loan Bank’’. 

13 (s) TRUTH IN LENDING ACT.—The Truth in Lending 

14 Act (15 U.S.C. 1601 et seq.) is amended— 

15 (1) section 129H(b)(4), by inserting ‘‘the Fed16 eral Mortgage Insurance Corporation,’’ after ‘‘Fed17 eral Housing Finance Agency,’’; and 

18 (2) in section 129E— 

19 (A) in subsection (g)(1), by inserting ‘‘the 

20 Federal Mortgage Insurance Corporation,’’ 

21 after ‘‘Federal Housing Finance Agency,’’; and 

22 (B) in subsection (h), by inserting ‘‘the 

23 Federal Mortgage Insurance Corporation,’’ 

24 after ‘‘Federal Housing Finance Agency,’’. 


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1 (t) FFIEC.—The first sentence of section 1011 of 

2 the Federal Financial Institutions Examination Council 

3 Act of 1978 (12 U.S.C. 3310) is amended by inserting 

4 ‘‘the Federal Mortgage Insurance Corporation,’’ before 

5 ‘‘and the Federal Housing Finance Agency’’. 

6 TITLE IV—IMPROVING TRANS7 PARENCY, ACCOUNTABILITY, 

8 AND EFFICACY WITHIN AF9 FORDABLE HOUSING 

10 SEC. 401. AFFORDABLE HOUSING ALLOCATIONS. 

11 (a) FEE AND ALLOCATION OF AMOUNTS.—Subject to 

12 subsection (b), and in addition to any fees for the provi13 sion of insurance established in accordance with title II, 

14 in each fiscal year the Corporation shall— 

15 (1) charge and collect a fee in an amount equal 

16 to not less than 5 basis points and not more than 

17 10 basis points for each dollar of the outstanding 

18 principal balance of eligible mortgages collateralizing 

19 covered securities for which insurance is being pro20 vided under title II; and 

21 (2) allocate or otherwise transfer— 

22 (A) 80 percent of such fee amounts to the 

23 Secretary of Housing and Urban Development 

24 to fund the Housing Trust Fund established 

25 under section 1338 of the Federal Housing EnVerDate Mar 15 2010 23:07 Jun 28, 2013 Jkt 029200 PO 00000 Frm 00123 Fmt 6652 Sfmt 6201 E:\BILLS\S1217.IS S1217

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1 terprises Financial Safety and Soundness Act 

2 of 1992 (12 U.S.C. 4568); and 

3 (B) 20 percent of such fee amounts to the 

4 Secretary of the Treasury to fund the Capital 

5 Magnet Fund established under section 1339 of 

6 the Federal Housing Enterprises Financial 

7 Safety and Soundness Act of 1992 (12 U.S.C. 

8 4569). 

9 (b) SUSPENSION OF CONTRIBUTIONS.—The Corpora10 tion may temporarily suspend allocations under subsection 

11 (a) upon a finding by the Corporation that such alloca12 tions are contributing, or would contribute, to the finan13 cial instability of the Mortgage Insurance Fund estab14 lished under section 203. 

15 SEC. 402. HOUSING TRUST FUND. 

16 Section 1338 of the Federal Housing Enterprises Fi17 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

18 4568) is amended— 

19 (1) in subsection (a), by striking ‘‘by the enter20 prises under section 1337’’ and inserting ‘‘pursuant 

21 to section 401 of the Housing Finance Reform and 

22 Taxpayer Protection Act of 2013’’; 

23 (2) by repealing subsection (b); and 

24 (3) in subsection (c)— 


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1 (A) in paragraph (1), by striking ‘‘Except 

2 as provided in subsection (b), the’’ and insert3 ing ‘‘The’’; 

4 (B) in paragraph (4)(B), by striking 

5 ‘‘other than fiscal year 2009’’; 

6 (C) in paragraph (7)— 

7 (i) in subparagraph (A), by striking ‘‘; 

8 and’’ and inserting a semicolon; 

9 (ii) in subparagraph (B)(iv)— 

10 (I) by striking ‘‘section 132’’ and 

11 inserting ‘‘section 1132’’; and 

12 (II) by striking the period at the 

13 end and inserting a semicolon; and 

14 (iii) by adding at the end the fol15 lowing: 

16 ‘‘(C) grants and loans, including through 

17 the use of pilot programs of sufficient scale, to 

18 support the research and development of sus19 tainable homeownership and affordable rental 

20 programs, provided that such grant or loan 

21 amounts are used only for the benefit of fami22 lies whose income does not exceed 120 percent 

23 of the area median income as determined by the 

24 Secretary, with adjustments for family size; and 


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1 ‘‘(D) provide limited credit enhancement, 

2 and other forms of credit support, for product 

3 and services that— 

4 ‘‘(i) will increase the rate of sustain5 able homeownership and affordable rental 

6 by individuals or families whose income 

7 does not exceed 120 percent of the area 

8 median income as determined by the Sec9 retary, with adjustments for family size; 

10 and 

11 ‘‘(ii) might not otherwise be offered or 

12 supported by a pilot program of sufficient 

13 scale to determine the viability of such 

14 products and services in the private mar15 ket.’’; and 

16 (D) in paragraph (10)— 

17 (i) by amending subparagraph (A) to 

18 read as follows: 

19 ‘‘(A) ENSURING EFFICIENT USE OF GRANT

20 AMOUNTS.— 

21 ‘‘(i) USE FOR CERTAIN ELIGIBLE AC22 TIVITIES.—In each fiscal year, of the ag23 gregate amount allocated to a State or 

24 State designated entity under this sub25 section— 


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1 ‘‘(I) 35 percent shall be used for 

2 activities under subparagraph (A) of 

3 paragraph (7); 

4 ‘‘(II) 5 percent shall be used for 

5 activities under subparagraph (B) of 

6 paragraph (7); and 

7 ‘‘(III) 60 percent shall be used 

8 for activities under subparagraphs (C) 

9 and (D) of paragraph (7). 

10 ‘‘(ii) ENSURING BENEFITS FOR RURAL

11 COMMUNITIES.— 

12 ‘‘(I) IN GENERAL.—In each fiscal 

13 year, of the aggregate amount allo14 cated to a State or State designated 

15 entity under this subsection, the State 

16 or State designated entity shall ensure 

17 that, at a minimum, such amounts 

18 are distributed for the benefit of non19 entitlement areas in that State in the 

20 same proportion that the total amount 

21 of nonentitlement areas in that State 

22 bears to the total amount of all areas 

23 in that State. 

24 ‘‘(II) TARGETED OUTREACH TO

25 SMALLER COMMUNITIES.—In carrying 


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1 out the requirement under subclause 

2 (I), each State or State designated en3 tity shall in distributing amounts allo4 cated to that State or State des5 ignated entity give priority to non6 entitlement areas with a population of 

7 less than 20,000. 

8 ‘‘(III) DEFINITION OF NON9 ENTITLEMENT AREA.—For purposes 

10 of this clause, the term ‘nonentitle11 ment area’ has the same meaning 

12 given that term under section 

13 102(a)(7) of the Housing and Com14 munity Development Act of 1974 (42 

15 U.S.C. 5302(a)(7)).’’; and 

16 (ii) by striking subparagraph (E). 

17 SEC. 403. CAPITAL MAGNET FUND. 

18 Section 1339 of the Federal Housing Enterprises Fi19 nancial Safety and Soundness Act of 1992 (12 U.S.C. 

20 4569) is amended— 

21 (1) in subsection (b)(1), by striking ‘‘pursuant 

22 to section 1337’’ and inserting ‘‘pursuant to section 

23 401 of the Housing Finance Reform and Taxpayer 

24 Protection Act of 2013’’; and 

25 (2) in subsection (h), by striking paragraph (7). 


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1 SEC. 404. ADDITIONAL TAXPAYER PROTECTIONS. 

2 (a) ENSURING BENEFITS SUPPORT CITIZENS AND

3 LAWFUL PERMANENT RESIDENTS.—The Secretary of 

4 Housing and Urban Development and the Secretary of the 

5 Treasury, respectively, shall ensure that grant amounts al6 located to covered grantees, allocated by covered grantees 

7 to eligible recipients, or allocated to individuals by such 

8 eligible recipients are used for the benefit of only lawful 

9 permanent residents and citizens of the United States in 

10 carrying out the activities of— 

11 (1) the Housing Trust Fund; and 

12 (2) the Capital Magnet Fund. 

13 (b) NOT TO BE USED FOR POLITICAL ACTIVITIES.— 

14 Consistent with the existing requirements under sections 

15 1338(c)(10)(D) and section 1339(h)(5) of the Federal 

16 Housing Enterprises Financial Safety and Soundness Act 

17 of 1992, the Secretary of Housing and Urban Develop18 ment and the Secretary of the Treasury, respectively, shall 

19 ensure that grant amounts allocated by covered grantees 

20 to eligible recipients or allocated to individuals by such eli21 gible recipients are not used for— 

22 (1) political activities; 

23 (2) advocacy; 

24 (3) lobbying, whether directly or through other 

25 parties; 


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1 (4) influencing the selection, nomination, elec2 tion, or appointment of one or more candidates to 

3 any Federal, State or local office; 

4 (5) personal counseling services; 

5 (6) travel expenses; and 

6 (7) preparing or providing advice on tax re7 turns. 

8 (c) PENALTIES.— 

9 (1) CIVIL MONEY PENALTY.—If an eligible re10 cipient or any other individual in receipt of grant 

11 amounts described by this section violates any provi12 sion of subsection (a) or (b), the Secretary of Hous13 ing and Urban Development or the Secretary of the 

14 Treasury, as the case may be, may impose a civil 

15 penalty on such recipient or individual, as the case 

16 may be, of not more than $1,000,000 for each viola17 tion. 

18 (2) CRIMINAL PENALTIES.—Whoever, being 

19 subject to the provisions of subsection (a) or (b), 

20 knowingly participates, directly or indirectly, in any 

21 manner in conduct that results in a violation of such 

22 provisions shall, notwithstanding section 3571 of 

23 title 18, United States Code, be fined not more than 

24 $1,000,000 for each violation, imprisoned for not 

25 more than 5 years, or both. 


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1 (3) RULE OF CONSTRUCTION.—The penalties 

2 imposed under paragraphs (1) or (2) shall be in ad3 dition to any other available civil remedy or any 

4 other available criminal penalty and may be imposed 

5 whether or not the Secretary of Housing and Urban 

6 Development or the Secretary of the Treasury, as 

7 the case may be, imposes other administrative sanc8 tions. 

9 (d) DEFINITION.—As used in this section— 

10 (1) the term ‘‘covered grantee’’ means— 

11 (A) for purposes of the Housing Trust 

12 Fund, a State or State designated entity; and 

13 (B) for purposes of the Capital Magnet 

14 Fund, an eligible grantee as described under 

15 section 1339(e) of the Federal Housing Enter16 prises Financial Safety and Soundness Act of 

17 1992; 

18 (2) the term ‘‘eligible recipient’’ means— 

19 (A) for purposes of the Housing Trust 

20 Fund, a recipient as described under section 

21 1338(c)(9) of the Federal Housing Enterprises 

22 Financial Safety and Soundness Act of 1992t; 

23 and 


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1 (B) for purposes of the Capital Magnet 

2 Fund, a recipient of assistance from the Capital 

3 Magnet Fund; 

4 (3) the term ‘‘Capital Magnet Fund’’ means the 

5 Capital Magnet Fund established under section 

6 1339 of the Federal Housing Enterprises Financial 

7 Safety and Soundness Act of 1992 (12 U.S.C. 

8 4569); and 

9 (4) the term ‘‘Housing Trust Fund’’ means the 

10 Housing Trust Fund established under section 1338 

11 of the Federal Housing Enterprises Financial Safety 

12 and Soundness Act of 1992 (12 U.S.C. 4568). 

13 TITLE V—WIND DOWN OF 

14 FANNIE MAE AND FREDDIE MAC 

15 SEC. 501. REPEAL OF GSE CHARTERS. 

16 (a) FANNIE MAE.—Effective on the FMIC certifi17 cation date, the charter of the Federal National Mortgage 

18 Association is repealed and the Federal National Mort19 gage Association shall have no authority to conduct new 

20 business under such charter, except that the provisions of 

21 such charter in effect immediately before such repeal shall 

22 continue to apply with respect to the rights and obligations 

23 of any holders of— 

24 (1) outstanding debt obligations of the Federal 

25 National Mortgage Association, including any— 


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1 (A) bonds, debentures, notes, or other 

2 similar instruments; 

3 (B) capital lease obligations; or 

4 (C) obligations in respect of letters of cred5 it, bankers’ acceptances, or other similar instru6 ments; or 

7 (2) mortgage-backed securities guaranteed by 

8 the Federal National Mortgage Association. 

9 (b) FREDDIE MAC.—Effective on the FMIC certifi10 cation date, the charter of the Federal Home Loan Mort11 gage Corporation is repealed and the Federal Home Loan 

12 Mortgage Corporation shall have no authority to conduct 

13 new business under such charter, except that the provi14 sions of such charter in effect immediately before such re15 peal shall continue to apply with respect to the rights and 

16 obligations of any holders of— 

17 (1) outstanding debt obligations of the Federal 

18 Home Loan Mortgage Corporation, including any— 

19 (A) bonds, debentures, notes, or other 

20 similar instruments; 

21 (B) capital lease obligations; or 

22 (C) obligations in respect of letters of cred23 it, bankers’ acceptances, or other similar instru24 ments; or 


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1 (2) mortgage-backed securities guaranteed by 

2 the Federal Home Loan Mortgage Corporation. 

3 (c) EXISTING GUARANTEE OBLIGATIONS.— 

4 (1) EXPLICIT GUARANTEE.—The full faith and 

5 credit of the United States is pledged to the pay6 ment of all amounts which may be required to be 

7 paid under any obligation described under sub8 sections (a) and (b). 

9 (2) CONTINUED DIVIDEND PAYMENTS.—Not10 withstanding section 502 or any other provision of 

11 law, and subject to section 601, provision 2(a) (re12 lating to Dividend Payment Dates and Dividend Pe13 riods) and provision 2(c) (relating to Dividend Rates 

14 and Dividend Amount) of the Senior Preferred 

15 Stock Purchase Agreement, or any provision of any 

16 certificate in connection with such Agreement cre17 ating or designating the terms, powers, preferences, 

18 privileges, limitations, or any other conditions of the 

19 Variable Liquidation Preference Senior Preferred 

20 Stock of an enterprise issued pursuant to such 

21 Agreement— 

22 (A) shall not be amended, restated, or oth23 erwise changed to reduce the rate or amount of 

24 dividends in effect pursuant to such Agreement 

25 as of the Third Amendment to such Agreement 


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1 dated August 17, 2012, except that any amend2 ment to such Agreement to facilitate the sale of 

3 assets of the enterprises to facilitate compliance 

4 with the provisions of section 502(b) shall be 

5 permitted; and 

6 (B) shall remain in effect until the guar7 antee obligations described under subsections 

8 (a)(2) and (b)(2) are fully extinguished. 

9 (3) APPLICABILITY.—Notwithstanding section 

10 502, all guarantee fee amounts derived from the sin11 gle-family mortgage guarantee business of the enter12 prises in existence as of the FMIC certification date 

13 shall be subject to the terms of the Senior Preferred 

14 Stock Purchase Agreement. 

15 (d) FEDERAL SAFETY AND SOUNDNESS ACT.— 

16 (1) IN GENERAL.—The Federal Housing Enter17 prises Financial Safety and Soundness Act of 1992 

18 (12 U.S.C. 4501 et seq.) is amended— 

19 (A) in section 1303— 

20 (i) in paragraph (2), by striking 

21 ‘‘’Federal Housing Finance Agency’’ and 

22 inserting ‘‘Federal Mortgage Insurance 

23 Corporation’’; 

24 (ii) in paragraph (3), by striking 

25 ‘‘means’’ and all that follows through the 


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1 period at the end, and inserting ‘‘means 

2 the Federal Home Loan Bank Act.’’; 

3 (iii) by repealing paragraph (4); and 

4 (iv) in paragraph (9), by striking ‘‘Di5 rector of the Federal Housing Finance 

6 Agency’’ and inserting ‘‘Board of Directors 

7 of the Federal Mortgage Insurance Cor8 poration’’; 

9 (B) by repealing section 1313A; and 

10 (C) by repealing section 1317(d). 

11 (2) EFFECTIVE DATE.—The amendments made 

12 by paragraph (1) shall take effect on the FMIC cer13 tification date. 

14 SEC. 502. WIND DOWN. 

15 (a) WIND DOWN.— 

16 (1) AUTHORITY OF FHFA.—Beginning on the 

17 date of enactment of this Act and ending on the 

18 FMIC certification date, the Director of the Federal 

19 Housing Finance Agency, in consultation with the 

20 Corporation and the Secretary of the Treasury, shall 

21 take such action, and may prescribe such regulations 

22 and procedures, as may be necessary to wind down 

23 the operations of the enterprises in an orderly man24 ner that complies with the requirements of this Act 

25 and any amendments made by this Act. 


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1 (2) LIMITATION.—Notwithstanding any author2 ity granted to the Director of the Federal Housing 

3 Finance Agency under paragraph (1), the sale, 

4 transfer, exchange, or other disposition of any asset 

5 subject to the wind down required under this section 

6 shall be prohibited, if the Corporation— 

7 (A) in its discretion determines that such 

8 sale, transfer, exchange, or disposition would 

9 materially interfere with the ability of the Cor10 poration to carry out the requirements of this 

11 Act; and 

12 (B) notifies, in writing, the Director of the 

13 Federal Housing Finance Agency within 14 

14 days of such determination. 

15 (3) RULE OF CONSTRUCTION.—Notwith16 standing any authority granted to the Director of 

17 the Federal Housing Finance Agency under para18 graph (1), the Director of the Federal Housing Fi19 nance Agency— 

20 (A) shall have no authority to sell, trans21 fer, exchange, or otherwise dispose of any guar22 antee obligations described under subsections 

23 (a)(2) and (b)(2) of section 501; and 

24 (B) shall have no rights, claims, or title to, 

25 nor any authority to sell, transfer, exchange, or 


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1 otherwise dispose of, guarantee fee amounts de2 rived from the single-family mortgage guar3 antee business of the enterprises in existence as 

4 of the FMIC certification date. 

5 (b) DIVISION OF ASSETS AND LIABILITIES; AUTHOR6 ITY TO ESTABLISH HOLDING CORPORATION AND DIS7 SOLUTION TRUST FUND.—The action and procedures re8 quired under subsection (a)— 

9 (1) shall include the establishment and execu10 tion of plans to provide for an equitable division, dis11 tribution, and liquidation of the assets and liabilities 

12 of an enterprise, including any infrastructure, prop13 erty, including intellectual property, platforms, or 

14 any other thing or object of value, provided such 

15 plan complies with the requirements of this Act and 

16 any amendments made by this Act; and 

17 (2) may provide for establishment of— 

18 (A) a holding corporation organized under 

19 the laws of any State of the United States or 

20 the District of Columbia for the purpose of 

21 winding down an enterprise; and 

22 (B) one or more trusts to which to trans23 fer— 

24 (i) outstanding debt obligations of an 

25 enterprise; or 


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1 (ii) outstanding mortgages held for 

2 the purpose of collateralizing mortgage3 backed securities guaranteed by an enter4 prise. 

5 (c) RECOUPMENT BY SENIOR PREFERRED SHARE6 HOLDERS.— 

7 (1) IN GENERAL.—Subject to the requirements 

8 of this Act, any proceeds from the wind down of an 

9 enterprise shall be paid first to the senior preferred 

10 shareholders of each such enterprise, then to the 

11 preferred shareholders of each such enterprise, and 

12 then to the common shareholders of each such enter13 prise. 

14 (2) JOINT DETERMINATION.—The amount of 

15 any proceeds to be paid pursuant to paragraph (1) 

16 shall be jointly determined by the Director of the 

17 Federal Housing Finance Agency, the Corporation, 

18 and the Secretary of the Treasury. 

19 (3) MAXIMUM RETURN TO SHAREHOLDERS.— 

20 The wind down of each enterprise required under 

21 this section shall be managed by the Director of the 

22 Federal Housing Finance Agency, in consultation 

23 with the Corporation and the Secretary of the Treas24 ury, to obtain resolutions that maximize the return 


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1 for the senior preferred shareholders under para2 graph (1), to the extent that such resolutions— 

3 (A) are consistent with the goal of sup4 porting a sound, stable, and liquid housing 

5 market; 

6 (B) are consistent with applicable Federal 

7 and State law; 

8 (C) comply with the requirements of this 

9 Act and any amendments made by this Act; 

10 and 

11 (D) protect the taxpayer. 

12 (4) SALE OF CERTAIN ASSETS AS A GOING CON13 CERN.—Except as provided in section 601 or else14 where as required in this Act, if the Director of the 

15 Federal Housing Finance Agency, in consultation 

16 with the Corporation and the Secretary of the Treas17 ury, determines that the sale of any line of business, 

18 or any function, activity, or service of an enterprise 

19 as a going concern will maximize the return for the 

20 senior preferred shareholders as required under 

21 paragraph (3), the Director may conduct such sale, 

22 provided that— 

23 (A) under no circumstance, shall such sale 

24 transfer, convey, or authorize, or be deemed to 

25 transfer, convey, or authorize, any guarantee or 


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1 Federal support, assistance, or backing, implicit 

2 or explicit, related to any such line of business, 

3 function, activity, or service; and 

4 (B) such sale does not impede or otherwise 

5 interfere with the ability of the Federal Mort6 gage Insurance Corporation to carry out the 

7 functions and requirements of this Act. 

8 (5) RULE OF CONSTRUCTION.—For purposes of 

9 this subsection, the term ‘‘proceeds’’ does not in10 clude any guarantee fee amounts derived from the 

11 single-family mortgage guarantee business of the en12 terprises in existence as of the FMIC certification 

13 date. 

14 SEC. 503. ALIGNING PURPOSE OF CONSERVATORSHIP WITH 

15 FMIC. 

16 (a) POWER AS CONSERVATOR.—Section 

17 1367(b)(2)(D) of the Federal Housing Enterprises Finan18 cial Safety and Soundness Act of 1992 (12 U.S.C. 

19 4617(b)(2)(D)) is amended to read as follows: 

20 ‘‘(D) POWER AS CONSERVATOR.—After the 

21 date of enactment of the Housing Finance Re22 form and Taxpayer Protection Act of 2013 the 

23 Agency shall, as conservator, take such actions 

24 as are necessary— 


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1 ‘‘(i) to ensure the efficient, effective, 

2 and expeditious wind down of the enter3 prises; 

4 ‘‘(ii) to manage the affairs, assets, 

5 and obligations of the enterprises and to 

6 operate the enterprises in compliance with 

7 the requirements of the Housing Finance 

8 Reform and Taxpayer Protection Act of 

9 2013; 

10 ‘‘(iii) to assist the Federal Mortgage 

11 Insurance Corporation, in a consultative 

12 capacity, in carrying out the requirements 

13 under the Housing Finance Reform and 

14 Taxpayer Protection Act of 2013; and 

15 ‘‘(iv) to maintain liquidity and sta16 bility in the secondary mortgage market 

17 until such as time as the charters of the 

18 enterprises are revoked pursuant to title V 

19 of such Act.’’. 

20 (b) RULE OF CONSTRUCTION.—Nothing in this Act, 

21 or any amendments made by this Act, except as may be 

22 explicitly provided for in this Act, or any amendment made 

23 by this Act, shall be deemed to alter the powers, authori24 ties, rights, and duties that are vested in the Federal 

25 Housing Finance Agency and the Director of the Federal 


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1 Housing Finance Agency with respect to its supervision 

2 and regulation of the enterprises. 

3 SEC. 504. CONFORMING LOAN LIMITS. 

4 (a) IN GENERAL.—Beginning on the date of enact5 ment of this Act, the limitations governing the maximum 

6 original principal obligation of conventional mortgages 

7 that may be purchased by the Federal National Mortgage 

8 Association and the Federal Home Loan Mortgage Cor9 poration, referred to in section 302(b)(2) of the Federal 

10 National Mortgage Association Charter Act (12 U.S.C. 

11 1717(b)(2)) and section 305(a)(2) of the Federal Home 

12 Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), 

13 respectively, shall not exceed $417,000 for a mortgage se14 cured by a single-family residence, $533,850 for a mort15 gage secured by a 2-family residence, $645,300 for a 

16 mortgage secured by a 3-family residence, and $801,950 

17 for a mortgage secured by a 4-family residence, except 

18 that such maximum limitations shall be adjusted effective 

19 January 1 of each year beginning after the date of enact20 ment of this Act, subject to the limitations in this para21 graph. Each adjustment shall be made by adding to each 

22 such amount (as it may have been previously adjusted) 

23 a percentage thereof equal to the percentage increase, dur24 ing the most recent 12-month or 4-quarter period ending 

25 before the time of determining such annual adjustment, 


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1 in the housing price index maintained pursuant to section 

2 1322 of the Federal Housing Enterprises Financial Safety 

3 and Soundness Act of 1992 (12 U.S.C. 4542). If the 

4 change in such house price index during the most recent 

5 12-month or 4-quarter period ending before the time of 

6 determining such annual adjustment is a decrease, then 

7 no adjustment shall be made for the next year, and the 

8 next adjustment shall take into account prior declines in 

9 the house price index, so that any adjustment shall reflect 

10 the net change in the house price index since the last ad11 justment. Declines in the house price index shall be accu12 mulated and then reduce increases until subsequent in13 creases exceed prior declines. 

14 (b) SPECIAL EXCEPTION FOR ALASKA, HAWAII, 

15 GUAM, AND USVI.—The limitations set forth under sub16 section (a) shall be increased by not to exceed 50 per cen17 tum with respect to properties located in Alaska, Guam, 

18 Hawaii, and the Virgin Islands. 

19 (c) HIGH-COST AREA LIMIT.—The limitations set 

20 forth under subsection (a) shall also be increased, with 

21 respect to properties of a particular size located in any 

22 area for which 115 percent of the median house price for 

23 such size residence exceeds the limitation under subsection 

24 (a) for such size residence— 


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1 (1) for the first year following the date of en2 actment of this Act, to the lesser of 150 percent of 

3 such limitation for such size residence or the amount 

4 that is equal to 115 percent of the median house 

5 price in such area for such size residence; 

6 (2) for the second year following the date of en7 actment of this Act, to the lesser of 145 percent of 

8 such limitation for such size residence or the amount 

9 that is equal to 115 percent of the median house 

10 price in such area for such size residence; 

11 (3) for the third year following the date of en12 actment of this Act, to the lesser of 135 percent of 

13 such limitation for such size residence or the amount 

14 that is equal to 115 percent of the median house 

15 price in such area for such size residence; 

16 (4) for the fourth year following the date of en17 actment of this Act, to the lesser of 130 percent of 

18 such limitation for such size residence or the amount 

19 that is equal to 115 percent of the median house 

20 price in such area for such size residence; and 

21 (5) for the fifth year following the date of en22 actment of this Act, and each year thereafter, to the 

23 lesser of 125 percent of such limitation for such size 

24 residence or the amount that is equal to 115 percent 


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•S 1217 IS

1 of the median house price in such area for such size 

2 residence. 

3 SEC. 505. PORTFOLIO REDUCTION. 

4 (a) GRADUATED REDUCTION.— 

5 (1) IN GENERAL.—Each enterprise shall not 

6 own, as of any applicable date, mortgage assets in 

7 excess of— 

8 (A) as of December 31, 2013, 

9 $552,500,000,000; and 

10 (B) on December 31 of each year there11 after until the FMIC certification date, 85 per12 cent of the aggregate amount of the mortgage 

13 assets that the enterprise was permitted to own 

14 as of December 31 of the immediately pre15 ceding calendar year. 

16 (2) RETAINED PORTFOLIO TO FACILITATE OR17 DERLY WIND DOWN.—On December 31 of the year 

18 in which the FMIC certification date occurs, the 

19 Corporation shall establish an allowable amount of 

20 enterprise owned mortgage assets in an amount 

21 equal to the amount necessary to facilitate— 

22 (A) the orderly wind down of the enter23 prises; and 

24 (B) appropriate loss mitigation on any leg25 acy guarantees of the enterprises. 


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1 (b) MORTGAGE ASSETS DEFINED.—For purposes of 

2 this section, the term ‘‘mortgage assets’’ means, with re3 spect to an enterprise, assets of such enterprise consisting 

4 of mortgages, mortgage loans, mortgage-related securities, 

5 participation certificates, mortgage-backed commercial 

6 paper, obligations of real estate mortgage investment con7 duits and similar assets, in each case to the extent such 

8 assets would appear on the balance sheet of such enter9 prise in accordance with generally accepted accounting 

10 principles in effect in the United States as of September 

11 7, 2008 (as set forth in the opinions and pronouncements 

12 of the Accounting Principles Board and the American In13 stitute of Certified Public Accountants and statements 

14 and pronouncements of the Financial Accounting Stand15 ards Board from time to time; and without giving any ef16 fect to any change that may be made after September 7, 

17 2008, in respect of Statement of Financial Accounting 

18 Standards No. 140 or any similar accounting standard). 

19 SEC. 506. REPEAL OF MANDATORY HOUSING GOALS. 

20 (a) REPEAL OF HOUSING GOALS.—The Federal 

21 Housing Enterprises Financial Safety and Soundness Act 

22 of 1992 is amended by striking sections 1331 through 

23 1336 (12 U.S.C. 4561–6). 


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1 (b) CONFORMING AMENDMENTS.—The Federal 

2 Housing Enterprises Financial Safety and Soundness Act 

3 of 1992 (12 U.S.C. 4501 et seq.) is amended— 

4 (1) in section 1303(28), by striking ‘‘, and, for 

5 the purposes’’ and all that follows through ‘‘des6 ignated disaster areas’’; 

7 (2) in section 1324(b)(1)(A), by striking clauses 

8 (i), (ii), and (iv); 

9 (3) in section 1341— 

10 (A) in subsection (a)— 

11 (i) in paragraph (1), by inserting ‘‘or’’ 

12 after the semicolon at the end; 

13 (ii) in paragraph (2), by striking the 

14 semicolon at the end and inserting a pe15 riod; and 

16 (iii) by striking paragraphs (3) and 

17 (4); and 

18 (B) in subsection (b)(2)— 

19 (i) in subparagraph (A), by inserting 

20 ‘‘or’’ after the semicolon at the end; 

21 (ii) by striking subparagraphs (B) and 

22 (C); and 

23 (iii) by redesignating subparagraph 

24 (D) as subparagraph (B); 

25 (4) in section 1345(a)— 


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1 (A) in paragraph (1), by inserting ‘‘or’’ 

2 after the semicolon at the end; 

3 (B) in paragraph (2), by striking the semi4 colon at the end and inserting a period; and 

5 (C) by striking paragraphs (3) and (4); 

6 and 

7 (5) in section 1371(a)(2), by striking ‘‘with any 

8 housing goal established under subpart B of part 2 

9 of subtitle A of this title, with section 1336 or 1337 

10 of this title,’’. 

11 TITLE VI—IMPROVEMENTS TO 

12 FUNCTIONING OF HOUSING 

13 MARKET 

14 SEC. 601. CONTINUATION OF MULTIFAMILY BUSINESS OF 

15 THE ENTERPRISES. 

16 (a) IN GENERAL.—Notwithstanding any provision of 

17 title V, or any other provision of law, effective on the 

18 FMIC certification date, all functions, activities, infra19 structure, property, including intellectual property, plat20 forms, or any other object or service of an enterprise relat21 ing to the maintenance and operation of the multifamily 

22 guarantee business of an enterprise shall be transferred, 

23 without cost, to the Corporation. 

24 (b) AUTHORITY OF DIRECTOR.—The Corporation is 

25 authorized, upon such terms and conditions as it may 


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1 deem appropriate, to guarantee the timely payment of 

2 principal of and interest, on any mortgage on multifamily 

3 housing purchased by the Corporation pursuant to the 

4 transfer of an enterprise’s multifamily guarantee business 

5 under subsection (a). 

6 (c) LIMITATION ON ONGOING OPERATION OF MULTI7 FAMILY BUSINESS.—In carrying out the multifamily guar8 antee business of an enterprise transferred pursuant to 

9 subsection (a), the Corporation shall ensure that any such 

10 business continues to operate, as applicable, consistent 

11 with— 

12 (1) the Delegated Underwriting and Servicing 

13 Lender Program established by the Federal National 

14 Mortgage Association; and 

15 (2) the Program Plus Lender Program estab16 lished by the Federal Home Loan Mortgage Cor17 poration, especially the Series K Structured Pass18 Through Certificates offered by the enterprise. 

19 (d) EXPLICIT GUARANTEE.—The full faith and credit 

20 of the United States is pledged to the payment of all 

21 amounts which may be required to be paid under any 

22 guaranty— 

23 (1) issued by the Corporation pursuant to this 

24 subsection; and 


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1 (2) obligation assumed by the Corporation pur2 suant to the transfer of an enterprise’s multifamily 

3 guarantee business under subsection (a). 

4 (e) GUARANTEE FEE.— 

5 (1) IN GENERAL.—The Corporation shall collect 

6 a reasonable fee for any guaranty under this sub7 section and shall make such charges as it may deter8 mine to be reasonable for the analysis of any trust 

9 or other security arrangement proposed by an issuer 

10 of a security backed by multifamily mortgages guar11 anteed under this section. 

12 (2) DEPOSIT INTO MORTGAGE INSURANCE

13 FUND.—Any guarantee fee amounts collected under 

14 this subsection shall be deposited in the Mortgage 

15 Insurance Fund. 

16 SEC. 602. MULTIPLE LENDER ISSUES. 

17 With respect to the dwelling of a borrower that serves 

18 as security for an eligible mortgage, if the borrower enters 

19 into any credit transaction that would result in the cre20 ation of a new mortgage or other lien on such dwelling 

21 where the loan-to-value ratio of such credit transaction 

22 amount is 80 percent or more, the creditor of such new 

23 mortgage or other lien shall seek and obtain the approval 

24 of the creditor of the senior eligible mortgage loan before 

25 any such credit transaction becomes valid and enforceable. 


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1 SEC. 603. GAO REPORT ON FULL PRIVATIZATION OF SEC2 ONDARY MORTGAGE MARKET. 

3 (a) GAO REPORT.—Not later than 8 years after the 

4 date of enactment of this Act, the Comptroller General 

5 of the United States shall submit a report to the Com6 mittee on Banking, Housing, and Urban Affairs of the 

7 Senate and the Committee on Financial Services of the 

8 House of Representatives on the feasibility of maintaining 

9 a fully privatized secondary mortgage market, including 

10 recommendations on how to best carry out any displace11 ment of the insurance model established under this Act. 

12 (b) CORPORATION PLAN TO TRANSITION TO A

13 FULLY PRIVATE SECONDARY MORTGAGE MARKET.— 

14 (1) REQUIRED SUBMISSION TO CONGRESS.— 

15 Not later than 6 months after the date on which the 

16 report required under subsection (a) is submitted, 

17 the Corporation shall submit to the Committee on 

18 Banking, Housing, and Urban Affairs of the Senate 

19 and the Committee on Financial Services of the 

20 House of Representatives a plan to transition to a 

21 fully privatized secondary mortgage market. 

22 (2) REQUIRED CONTENT OF PLAN.—The plan 

23 required to be submitted under paragraph (1) shall 

24 describe, chronicle, and specify all the legislative, ad25 ministrative, and regulatory actions necessary to 

26 carry out a transition to a fully private secondary 


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1 mortgage market, including all actions necessary to 

2 dissolve the Corporation and successfully displace 

3 the insurance model established under this Act. 

4 TITLE VII—GENERAL 

5 PROVISIONS 

6 SEC. 701. AUTHORITY TO ISSUE REGULATIONS. 

7 The Corporation may prescribe such regulations and 

8 issue such guidelines, orders, requirements, or standards 

9 as are necessary to carry out this Act, or any amendment 

10 made by this Act. 

11 SEC. 702. FAIR VALUE ACCOUNTING. 

12 In any evaluation, oversight, audit, or analysis by the 

13 Corporation of the cost of the Mortgage Insurance Fund, 

14 the insurance or guarantee activities of the Corporation 

15 required under this Act, including any fee or charge in 

16 connection with the provision of such insurance or guar17 antee, or the financial transactions of the Corporation, the 

18 Corporation shall conduct any such evaluation, oversight, 

19 audit, or analysis based on the fair-value accrual account20 ing method. 

21 SEC. 703. RULE OF CONSTRUCTION. 

22 Nothing in this Act shall be construed to prohibit or 

23 otherwise restrict the ability of a holder of any loss posi24 tion in any covered security insured under this Act from 

25 restructuring, retranching, or resecuritizing such position. 


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1 SEC. 704. SEVERABILITY. 

2 If any provision of this Act or the application of any 

3 provision of this Act to any person or circumstance, is held 

4 invalid, the application of such provision to other persons 

5 or circumstances, and the remainder of this Act, shall not 

6 be affected thereby. 

Æ 


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