II 

113TH CONGRESS 

1ST SESSION S. 1373 

To increase access to refinancing for homeowners, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 25, 2013 

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

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To increase access to refinancing for homeowners, and for 

other purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Rebuilding American 

5 Homeownership Act of 2013’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act, the following definitions shall apply: 

8 (1) CURRENT BORROWER.—The term ‘‘current 

9 borrower’’ means a mortgagor that— 

10 (A) has made each payment on an eligible 

11 mortgage, within the month in which the payVerDate Mar 15 2010 03:04 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1373.IS S1373

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1 ment was due, during the 6-month period pre2 ceding the date of refinancing of the eligible 

3 mortgage under this Act; and 

4 (B) has not been more than 30 days delin5 quent on an eligible mortgage more than once 

6 during the 1-year period preceding the date of 

7 refinancing of the mortgage under this Act. 

8 (2) DIRECTOR.—The term ‘‘Director’’ means 

9 the Director of the Federal Housing Finance Agen10 cy. 

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

12 mortgage’’— 

13 (A) means any mortgage that— 

14 (i) is an existing first mortgage— 

15 (I) that was made for purchase 

16 of, or refinancing of another first 

17 mortgage, on a 1- to 4-family owner18 occupied dwelling, including a condo19 minium or a share in a cooperative 

20 ownership housing association; and 

21 (II) with a current loan-to-value 

22 ratio in excess of 80 percent, but not 

23 greater than 140 percent; 

24 (ii) was originated on or before May 

25 31, 2009; 


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1 (iii) is not owned or guaranteed by an 

2 enterprise; and 

3 (iv) with respect to which, the mort4 gagor is a current borrower; and 

5 (B) does not include any mortgage that is 

6 insured or guaranteed by any program of the 

7 Federal Housing Administration, the Depart8 ment of Housing and Urban Development, the 

9 Government National Mortgage Association, the 

10 Department of Agriculture, or the Department 

11 of Veterans Affairs. 

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

13 means the Federal National Mortgage Association 

14 and the Federal Home Loan Mortgage Corporation. 

15 (5) GUARANTEE FEE.—The term ‘‘guarantee 

16 fee’’ has the same meaning as in section 1327(a) of 

17 the Housing and Community Development Act of 

18 1992 (12 U.S.C. 4547(a)). 

19 SEC. 3. REFINANCING AUTHORITY. 

20 (a) ENTERPRISE REFINANCING AUTHORITY.— 

21 (1) PROGRAM.—Each enterprise shall establish 

22 and carry out a program under this section to pro23 vide for the refinancing of eligible mortgages. 

24 (2) AUTHORITY.—Notwithstanding any provi25 sion of the Federal National Mortgage Association 


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1 Charter Act (12 U.S.C. 1716 et seq.) and the Fed2 eral Home Loan Mortgage Corporation Act (12 

3 U.S.C. 1451 et seq.), in carrying out the refinancing 

4 program required under paragraph (1), an enter5 prise may purchase, guarantee, service, sell, lend on 

6 the security of, refinance, or otherwise deal in eligi7 ble mortgages. 

8 (b) IMPLEMENTATION AUTHORITY.— 

9 (1) IN GENERAL.—Subject to paragraph (2), 

10 each enterprise may prescribe any requirements, 

11 terms, and conditions that such enterprise deter12 mines necessary to carry out the refinancing pro13 gram required under subsection (a), including with 

14 respect to any underwriting criteria, such as— 

15 (A) verification of a borrower’s employ16 ment, income, reserves, and assets; 

17 (B) a borrower’s credit history; 

18 (C) property valuation requirements; 

19 (D) representations and warranties; 

20 (E) eligible property type and occupancy 

21 requirements; and 

22 (F) continuation of the second-lien posi23 tion, or release, of any junior liens on the prop24 erty. 


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1 (2) EXISTING CREDIT ENHANCEMENTS TO BE

2 RETAINED.—In order to participate in the refi3 nancing program required under subsection (a), an 

4 eligible mortgage with existing credit enhancement 

5 coverage must continue to maintain or otherwise 

6 transfer such coverage to the new mortgage that is 

7 a result of the refinancing of the eligible mortgage 

8 authorized by this section. 

9 (3) MAXIMUM TERM OF THE NEW MORT10 GAGE.—The term of any new mortgage that is a re11 sult of the refinancing of an eligible mortgage au12 thorized by this section shall not exceed 30 years. 

13 (4) MAXIMUM LOAN AMOUNT.—The maximum 

14 original principal obligation of any new mortgage 

15 that is a result of the refinancing of an eligible 

16 mortgage authorized by this section shall not exceed 

17 the limitation in law governing the maximum origi18 nal principal obligation on conventional mortgages 

19 that may be purchased or guaranteed by an enter20 prise, as such law is in effect on the date of the clos21 ing of the new mortgage. 

22 (c) REGULATIONS.—The Director may issue any reg23 ulations, guidance, or directives necessary to carry out the 

24 refinancing program required under subsection (a). 


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1 SEC. 4. GUARANTEE FEES. 

2 (a) REQUIREMENT TO CHARGE A GUARANTEE

3 FEE.—Each enterprise shall charge a guarantee fee in 

4 connection with any guarantee of the timely payment of 

5 principal and interest on securities, notes, and other obli6 gations based on or backed by eligible mortgages refi7 nanced under this Act. 

8 (b) AMOUNT.— 

9 (1) IN GENERAL.—The amount of the guar10 antee fee required to be charged by an enterprise 

11 pursuant to subsection (a) shall be actuarially deter12 mined by the Director to cover the expected risk of 

13 default on the pool of eligible mortgages refinanced 

14 under this Act backing the security, note, or other 

15 obligation to which the enterprises’ guarantee ap16 plies. 

17 (2) RULE OF CONSTRUCTION.—In calculating 

18 the expected risk of default pursuant to paragraph 

19 (1), the Director shall ensure that any default prob20 ability assumptions used to model such risk— 

21 (A) are reasonable, including with respect 

22 to the arrival rate of default and the magnitude 

23 risk of default; and 

24 (B) are not unduly weighted to cover his25 torical stress or crisis scenarios. 


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1 (3) PROHIBITION ON ADDITIONAL CHARGES.— 

2 In determining the amount of any guarantee fee re3 quired to be charged pursuant to subsection (a), nei4 ther the Director nor an enterprise may charge any 

5 additional fee, price adjustment, premium, or other 

6 amount other than that which is determined in ac7 cordance with paragraph (1). 

8 (4) PROHIBITION ON OFFSETS.—The Director 

9 shall prohibit an enterprise from offsetting the cost 

10 of the guarantee fee required to by charged pursuant 

11 to subsection (a) to mortgage originators, borrowers, 

12 and investors by decreasing other charges, fees, or 

13 premiums, or in any other manner. 

14 (c) AUTHORITY TO LIMIT OFFER OF GUARANTEE.— 

15 The Director shall prohibit an enterprise from consum16 mating any offer for a guarantee on any security, note, 

17 or other obligation based on or backed by eligible mort18 gages refinanced under this Act, if the guarantee is incon19 sistent with the requirements of this section. 

20 SEC. 5. REPORTS. 

21 The Director shall include, in the annual report sub22 mitted to the Congress pursuant to section 1319B of the 

23 Federal Housing Enterprises Financial Safety and Sound24 ness Act of 1992 (12 U.S.C. 4521), information on the 


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1 use and impact of the program established under section 

2 3. The information provided shall include— 

3 (1) a review and analysis of the effectiveness of 

4 the program in— 

5 (A) reducing the rate of mortgage default 

6 and delinquency; 

7 (B) preventing foreclosure; and 

8 (C) supporting stable homeownership; and 

9 (2) any recommendations the Director considers 

10 appropriate regarding the program. 

11 SEC. 6. SUNSET. 

12 (a) TERMINATION.—The provisions of this Act, and 

13 any program or authorities established or granted therein 

14 or derived therefrom, shall terminate on December 31, 

15 2014. 

16 (b) EXTENSION.—The Director, upon transmission of 

17 a written notification to Congress, may extend the authori18 ties provided under this Act for a 1-year period. 

Æ 


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