II 

113TH CONGRESS 

1ST SESSION S. 1375 

To require a portion of closing costs to be paid by the enterprises with 

respect to certain refinanced mortgage loans, 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 require a portion of closing costs to be paid by the 

enterprises with respect to certain refinanced mortgage 

loans, 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 Equity Act 

5 of 2013’’. 

6 SEC. 2. REBUILDING EQUITY PROGRAM. 

7 (a) ESTABLISHMENT OF VOLUNTARY PROGRAM.— 

8 (1) ESTABLISHMENT.— 

9 (A) PAYMENT OF CLOSING COSTS.—The 

10 Federal National Mortgage Association and the 


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1 Federal Home Loan Mortgage Corporation (in 

2 this Act referred to as the ‘‘enterprises’’) shall 

3 each establish a voluntary program for bor4 rowers described in paragraph (2), under which 

5 the enterprises shall pay $1,000 toward the 

6 closing costs associated with applying for and 

7 receiving the refinancing when the borrower 

8 agrees to refinance into a fully amortizing loan 

9 with a term of not longer than 20 years. 

10 (B) FIRST YEAR OF PROGRAM.—During 

11 the 12-month period that begins on the date of 

12 enactment of this Act, the amount of the clos13 ing costs that each enterprise shall pay under 

14 the program shall not vary based on the term 

15 of the mortgage that the borrower agrees to re16 finance into. 

17 (C) SUBSEQUENT YEARS.— 

18 (i) ANNUAL RECALCULATION OF

19 CLOSING COSTS PAYMENT.—Upon the ex20 piration of the 12-month period set forth 

21 under subparagraph (B), and for each of 

22 the next two 12-month periods thereafter, 

23 the Director of the Federal Housing Fi24 nance Agency— 


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1 (I) shall adjust the amount of the 

2 portion of the closing costs that each 

3 enterprise will pay under the pro4 gram— 

5 (aa) by an amount that re6 sults in such program being rev7 enue neutral for such 12-month 

8 period; and 

9 (bb) based on economic con10 ditions generally affecting the 

11 mortgage and housing markets; 

12 and 

13 (II) may adjust the amount of 

14 the closing costs that each enterprise 

15 will pay under the program based on 

16 the term of the mortgage that the 

17 borrower agrees to refinance into. 

18 (ii) REPORT.—The Director of the 

19 Federal Housing Finance Agency shall re20 port any adjustments made pursuant to 

21 the requirements of clause (i) to the Chair 

22 and Ranking Member of the Committee on 

23 Banking, Housing, and Urban Affairs of 

24 the Senate and the Committee on FinanVerDate Mar 15 2010 00:48 Jul 30, 2013 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1375.IS S1375

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1 cial Services of the House of Representa2 tives. 

3 (2) ELIGIBLE BORROWERS.—The program re4 quired by paragraph (1) shall be for any borrower— 

5 (A) who qualifies for the Home Affordable 

6 Refinance Program carried out by the enter7 prises; 

8 (B) whose subject property has a loan-to9 value ratio of not less than 105 percent; and 

10 (C) who refinances from a loan with an 

11 original term of 30 years to a loan with a term 

12 of 20 years or less. 

13 (b) SUNSET.—Each voluntary program under this 

14 section shall terminate on the date that is 3 years after 

15 the date of establishment of such program. 

16 (c) DEFINITIONS.—As used in this section, the fol17 lowing definitions shall apply: 

18 (1) LOAN-TO-VALUE RATIO.—The term ‘‘loan19 to-value ratio’’ means the ratio of the amount of the 

20 primary mortgage on a property to the value of that 

21 property. 

22 (2) CLOSING COSTS.—The term ‘‘closing 

23 costs’’— 


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1 (A) means all reasonable and actual costs 

2 charged to the borrower by a third party to the 

3 refinancing transaction; 

4 (B) includes— 

5 (i) appraisal and inspection fees; 

6 (ii) fees associated with obtaining a 

7 borrower’s credit report; 

8 (iii) title insurance and title examina9 tion costs; 

10 (iv) attorneys’ fees associated with 

11 closing the transaction, other than attor12 neys’ fees associated with disputes arising 

13 out of the transaction or otherwise ancil14 lary to closing the transaction; 

15 (v) document preparation costs, if 

16 completed by a third party not controlled 

17 by the lender; 

18 (vi) transfer stamps, recording fees, 

19 courier fees, wire transfer fees, and re20 conveyance fees; and 

21 (vii) test and certification fees; and 

22 (C) does not include any costs charged to 

23 the borrower by the lender, including— 

24 (i) lender application fees; and 


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1 (ii) lender origination fees. 

Æ 


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