I 

112TH CONGRESS 

1ST SESSION H. R. 1859 

To ensure the availability of reasonably priced conventional mortgages to 

borrowers in all economic cycles by encouraging private sector capital 

to support the secondary mortgage market, limiting the role of the 

Federal government and the exposure of taxpayers, and other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 12, 2011 

Mr. CAMPBELL (for himself and Mr. PETERS) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To ensure the availability of reasonably priced conventional 

mortgages to borrowers in all economic cycles by encouraging private sector capital to support the secondary 

mortgage market, limiting the role of the Federal government and the exposure of taxpayers, and 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 ‘‘Housing Finance Re5 form Act of 2011’’. 

6 SEC. 2. STATEMENT OF PURPOSES. 

7 The purposes of this Act are to— 


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1 (1) ensure the availability of reasonably priced 

2 conventional residential mortgages to qualified bor3 rowers in all economic cycles; 

4 (2) provide incentives for private sector capital 

5 to support the secondary market for residential 

6 mortgages; 

7 (3) limit the role of the Federal Government in 

8 the secondary market for residential mortgages and 

9 the exposure of taxpayers to the operations of the 

10 secondary markets for residential mortgages; and 

11 (4) provide for the orderly wind down of the 

12 Federal National Mortgage Association and the Fed13 eral Home Loan Mortgage Corporation. 

14 SEC. 3. ESTABLISHMENT, OPERATION, SUPERVISION, AND 

15 REGULATION OF HOUSING FINANCE GUAR16 ANTY ASSOCIATIONS. 

17 The Federal Housing Enterprises Financial Safety 

18 and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 

19 amended by inserting the following new subtitle D, and 

20 designating the existing subtitles D and E as subtitles E 

21 and F, respectively, and renumbering the sections of those 

22 subtitles accordingly: 


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1 ‘‘Subtitle D—Establishment, Oper2 ation, Supervision, and Regula3 tion of Housing Finance Guar4 antee Associations 

5 ‘‘SEC. 1381. DEFINITIONS. 

6 ‘‘For purposes of this subtitle, the following defini7 tions shall apply: 

8 ‘‘(1) ASSOCIATION.—The term ‘association’ 

9 means a housing finance guarantee association char10 tered by the Director pursuant to section 1382. 

11 ‘‘(2) ASSOCIATION-AFFILIATED PARTY.—The 

12 term ‘association-affiliated party’ means— 

13 ‘‘(A) any director, officer, employee, or 

14 controlling stockholder of, or agent for, an asso15 ciation; 

16 ‘‘(B) any shareholder, affiliate, consultant, 

17 or joint venture partner of an association, and 

18 any other person, as determined by the Director 

19 (by regulation or on a case-by-case basis) that 

20 participates in the conduct of the affairs of an 

21 association; 

22 ‘‘(C) any independent contractor for an as23 sociation (including any attorney, appraiser, or 

24 accountant), if— 


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1 ‘‘(i) the independent contractor know2 ingly or recklessly participates in— 

3 ‘‘(I) any violation of any law or 

4 regulation; 

5 ‘‘(II) any breach of fiduciary 

6 duty; or 

7 ‘‘(III) any unsafe or unsound 

8 practice; and 

9 ‘‘(ii) such violation, breach, or prac10 tice caused, or is likely to cause, more than 

11 a minimal financial loss to, or a significant 

12 adverse effect on, the association. 

13 ‘‘(3) CONVENTIONAL MORTGAGE.—The term 

14 ‘conventional mortgage’ means a mortgage loan as 

15 defined in section 1390(e)(2). 

16 ‘‘(4) FEDERAL HOUSING FINANCE AGENCY SE17 CURITY.—The term ‘Federal Housing Finance Agen18 cy security’ means a security issued by an associa19 tion through the Office of Securitization that con20 forms to the terms and conditions of section 1387. 

21 ‘‘(5) LIMITED-LIFE ASSOCIATION.—The term 

22 ‘limited-life association’ means, with respect to an 

23 association in default or in danger of default, an en24 tity organized by the Agency under section 1367(i) 

25 with respect to such association. 


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1 ‘‘(6) OFFICE OF SECURITIZATION.—The term 

2 ‘Office of Securitization’ means the Office estab3 lished by section 1386. 

4 ‘‘(7) ORGANIZER.—The term ‘organizer’ means 

5 the person or group of persons seeking to organize 

6 an association. 

7 ‘‘(8) PERSON.—The term ‘person’ means any 

8 natural person or business entity. 

9 ‘‘SEC. 1382. ESTABLISHMENT OF HOUSING FINANCE GUAR10 ANTY ASSOCIATIONS. 

11 ‘‘(a) DIRECTOR’S AUTHORITY.—The Director is au12 thorized, under such regulations as the Director may pre13 scribe, to provide for the organization, incorporation, ex14 amination, operation, and regulation of housing finance 

15 guaranty associations, and to issue charters for such enti16 ties. 

17 ‘‘(b) FORMATION OF ASSOCIATIONS; ARTICLES OF

18 ASSOCIATION.—Subject to the terms of this Act and regu19 lations issued by the Director, an organizer may file an 

20 application with the Director to establish an association. 

21 The association may be chartered as a corporation, mutual 

22 association, partnership, limited liability corporation, co23 operative, or any other organizational form that the orga24 nizer may deem appropriate. The Director may not require 

25 the organizer to adopt any particular organizational form. 


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1 ‘‘(c) CONTENTS OF THE APPLICATION.—An applica2 tion for establishment of an association shall include— 

3 ‘‘(1) the proposed articles of association; 

4 ‘‘(2) a statement of the general object and pur5 poses of the association; 

6 ‘‘(3) the proposed capitalization and business 

7 plan for the association; 

8 ‘‘(4) information on the financial resources of 

9 the organizers; 

10 ‘‘(5) a statement of the relevant housing fi11 nance experience of the organizers; 

12 ‘‘(6) identification of the proposed senior man13 agers of the association and the relevant experience 

14 of such individuals; and 

15 ‘‘(7) any other information the Director deter16 mines may be necessary to evaluate the background, 

17 experience, and integrity of the organizers and the 

18 proposed senior managers, or information otherwise 

19 necessary to determine the likely success of the pro20 posed association. 

21 ‘‘(d) ISSUANCE OF CHARTERS AND CHARTERING

22 CRITERIA.— 

23 ‘‘(1) IN GENERAL.—The Director may issue a 

24 charter for an association to commence business if 

25 the Director determines that the proposed associaVerDate Mar 15 2010 05:42 May 25, 2011 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1859.IH H1859

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1 tion would be consistent with the purposes of this 

2 Act and the Housing Finance Reform Act of 2011, 

3 and that the association would have the managerial 

4 and financial resources to succeed. 

5 ‘‘(2) CHARTERING CRITERIA.—In making the 

6 determination under paragraph (1), the Director 

7 shall consider the competence, experience, and integ8 rity of the organizer and proposed senior managers 

9 of the association, and the financial resources and 

10 future prospects of the proposed association. The 

11 Director may not issue a charter if the organizer 

12 fails to— 

13 ‘‘(A) comply with all applicable formation 

14 requirements; 

15 ‘‘(B) provide all information requested by 

16 the Director; 

17 ‘‘(C) demonstrate the competence, experi18 ence, and integrity necessary to operate the as19 sociation in a safe or sound manner; 

20 ‘‘(D) demonstrate sufficient financial re21 sources necessary to operate the association in 

22 a safe or sound manner; or 

23 ‘‘(E) provide the Director with assurances 

24 that the association will make available to the 

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1 tion on the operations or activities of the asso2 ciation, or any affiliate of the association, that 

3 the Director deems necessary to ensure the safe 

4 and sound operation of the association and to 

5 enforce compliance with this Act. 

6 ‘‘(3) EXPLANATION FOR DENIAL.—Within 30 

7 days of denying any application for the issuance of 

8 a charter under this section, the Director shall pro9 vide the organizer with a written explanation of the 

10 basis for the denial. 

11 ‘‘(e) SPECIAL PURPOSE ASSOCIATIONS.— 

12 ‘‘(1) IN GENERAL.—The Director may issue a 

13 special purpose charter to the organizer of an asso14 ciation if the operations of the proposed association 

15 would be limited to serving a particular mortgage 

16 market, such as multifamily housing, or a particular 

17 category of mortgage lenders, such as community 

18 banks. All provisions of this Act that apply to asso19 ciations shall apply to special purpose associations, 

20 including the criteria for obtaining a charter. 

21 ‘‘(2) NONDISCRIMINATION.—The operation of a 

22 special purpose association shall not be considered 

23 discriminatory for purposes of section 1385(a)(9). 

24 ‘‘(f) INVESTMENTS BY BANKING ORGANIZATIONS.— 

25 A national bank, State bank, trust company, Federal or 


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1 State credit union, or other banking organization, includ2 ing a bank holding company and a savings and loan hold3 ing company, may acquire an interest in an association, 

4 and hold or dispose of such interest, subject to the provi5 sions of this Act, and subject to the approval by the appro6 priate Federal banking agency for such institution. 

7 ‘‘SEC. 1383. GENERAL POWERS OF ASSOCIATIONS. 

8 ‘‘An association may— 

9 ‘‘(1) adopt and use a corporate seal; 

10 ‘‘(2) adopt, amend, and repeal by-laws; 

11 ‘‘(3) sue or be sued; 

12 ‘‘(4) make contracts and guarantees, incur li13 abilities, borrow money, issue notes, bonds, and 

14 other obligations; 

15 ‘‘(5) purchase, receive, hold, and use real and 

16 personal property and other assets necessary for the 

17 conduct of its operations; 

18 ‘‘(6) lend money; 

19 ‘‘(7) invest, and reinvest funds, subject to the 

20 limitations of sections 1384 and 1385; 

21 ‘‘(8) elect or appoint directors, officers, employ22 ees, and agents; and 

23 ‘‘(9) issue securities, membership certificates, 

24 and other forms of ownership interests. 


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1 ‘‘SEC. 1384. HOUSING FINANCE RELATED POWERS OF ASSO2 CIATIONS. 

3 ‘‘In addition to its general powers under section 

4 1383, an association may— 

5 ‘‘(1) purchase, hold, sell, and otherwise deal in 

6 conventional mortgages only for the purpose of— 

7 ‘‘(A) creating a secondary market for such 

8 mortgages, including new conventional mort9 gage products; 

10 ‘‘(B) facilitating the securitization of con11 ventional mortgages; and 

12 ‘‘(C) supporting multifamily housing; 

13 ‘‘(2) issue, through the Office of Securitization, 

14 Federal Housing Finance Agency securities; 

15 ‘‘(3) establish a trust or similar entity that 

16 shall not be subject to the claims made by creditors 

17 of the association in order to provide for the sale of 

18 beneficial interests in pools of mortgage loans or the 

19 right to receive interest and principal from such 

20 pools; 

21 ‘‘(4) guarantee the timely payment of principal 

22 and interest on Federal Housing Finance Agency se23 curities and charge a fee for such guarantee; 

24 ‘‘(5) ensure that Federal Housing Finance 

25 Agency securities are properly serviced, which shall 

26 include the right to remove a mortgage servicer in 


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1 the event the association determines that such 

2 servicer fails to perform contractual servicing obliga3 tions or other legal requirements imposed on mort4 gage servicers; and 

5 ‘‘(6) hedge credit, interest rate and other risks 

6 associated with the purchase and sale of conven7 tional mortgages. 

8 ‘‘SEC. 1385. PROHIBITED ACTIVITIES. 

9 ‘‘(a) IN GENERAL.—An association may not— 

10 ‘‘(1) originate a mortgage; 

11 ‘‘(2) service a mortgage; 

12 ‘‘(3) guarantee timely payment of principal or 

13 interest on any mortgage-related security other than 

14 a Federal Housing Finance Agency security; 

15 ‘‘(4) invest in securities other than Federal 

16 Housing Finance Agency securities, securities issued 

17 by the Federal Government or any agency of the 

18 Federal Government, and any other securities 

19 deemed appropriate by the Director; 

20 ‘‘(5) speculate on credit, interest rate, and 

21 other risks; 

22 ‘‘(6) underwrite, offer, sell, or solicit any form 

23 of insurance; 

24 ‘‘(7) purchase any mortgage from an institution 

25 that holds a voting interest in the association; 


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1 ‘‘(8) purchase a conventional mortgage secured 

2 by a property comprised of one-to-four family dwell3 ing units if the outstanding principal balance of the 

4 mortgage at the time of purchase exceeds 80 percent 

5 of the value of the property securing the mortgage, 

6 unless— 

7 ‘‘(A) the seller retains a participation of 

8 not less than 10 percent in the mortgage; 

9 ‘‘(B) for such period and under such cir10 cumstances as the Director may require, the 

11 seller agrees to repurchase or replace the mort12 gage upon demand of the association in the 

13 event that the mortgage is in default; or 

14 ‘‘(C) that portion of the unpaid principal 

15 balance of the mortgage which is in excess of 

16 such 80 percent is guaranteed or insured by a 

17 qualified insurer, as determined by the Direc18 tor. 

19 ‘‘(9) discriminate against, or provide a pref20 erence to, any mortgage originator on the basis of 

21 the charter or license of such originator, the asset 

22 size of the originator, or the existence any ownership 

23 interest in the association by the originator; or 

24 ‘‘(10) engage in any activity that is not author25 ized by this Act. 


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1 ‘‘(b) RULE OF CONSTRUCTION.—Subsection (a)(8) 

2 shall not be construed to prevent an association from set3 ting standards related to the financial condition of origina4 tors from which it may acquire a conventional mortgage 

5 or prevent an association from setting guarantee fees 

6 based upon the volume of mortgages an originator sells 

7 to the association. 

8 ‘‘SEC. 1386. OFFICE OF SECURITIZATION. 

9 ‘‘(a) IN GENERAL.—The Director shall establish an 

10 Office of Securitization within the Agency to facilitate the 

11 securitization of conventional mortgages. 

12 ‘‘(b) FUNCTIONS OF OFFICE.—The Office of 

13 Securitization shall— 

14 ‘‘(1) subject to section 1387, create and label 

15 Federal Housing Finance Agency securities; 

16 ‘‘(2) take such actions as may be necessary to 

17 issue the catastrophic federal guarantee described in 

18 section 1388 with respect to Federal Housing Fi19 nance Agency securities; 

20 ‘‘(3) impose and collect the fee for the cata21 strophic federal guarantee; 

22 ‘‘(4) administer and service Federal Housing 

23 Finance Agency securities, including acting as trust24 ee for any trust established by an association for 


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1 purposes of facilitating the securitization of conven2 tional mortgages; and 

3 ‘‘(5) engage in such other activities the Director 

4 determines to be incidental to the securitization of 

5 conventional mortgages. 

6 ‘‘(c) MANAGEMENT OF THE OFFICE.—The Office of 

7 Securitization shall be managed by the Deputy Director 

8 of the Agency for Housing Finance Guarantee Associa9 tion, who shall be designated by the Director in accord10 ance with section 1391 and shall be subject to the direc11 tion and control of the Director. 

12 ‘‘(d) NO ECONOMIC INTEREST.—In the performance 

13 of its functions, the Office of Securitization shall not as14 sume any economic interest in the securities issued by an 

15 association. 

16 ‘‘(e) CONTRACTING AUTHORITY.—The Director may 

17 contract with the Government National Mortgage Associa18 tion to perform any or all of the functions of the Office 

19 of Securitization specified in subsection (b). 

20 ‘‘SEC. 1387. FEDERAL HOUSING FINANCE AGENCY SECURI21 TIES. 

22 ‘‘(a) IN GENERAL.—The Director shall establish, by 

23 regulation, one or more standard forms for Federal Hous24 ing Finance Agency securities issued by associations. 


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1 ‘‘(b) COMMON LABEL; STANDARD TERMS AND CON2 DITIONS.—The forms required by subsection (a) shall— 

3 ‘‘(1) identify the securities as Federal Housing 

4 Finance Agency securities; 

5 ‘‘(2) set forth the terms and conditions for the 

6 payment of interest and principal on such securities; 

7 ‘‘(3) state that such securities are guaranteed 

8 by the full faith and credit of the United States, 

9 subject to the limitations of section 1388(b); 

10 ‘‘(4) address the servicing of Federal Housing 

11 Finance Agency securities; and 

12 ‘‘(5) include such other standardized terms and 

13 conditions that the Director deems appropriate to 

14 enhance the liquidity of the securities, and shall in15 clude a representation and warranty certifying that 

16 a policy of a title insurance be in place to transfer 

17 title-related risks to State licensed title insurance 

18 companies for all conventional mortgages 

19 collateralizing a Federal Housing Finance Agency 

20 security. 

21 ‘‘(c) LIMITATION.—The forms established by the Di22 rector pursuant to subsection (a) shall not prevent Federal 

23 Housing Finance Agency securities to vary based upon— 

24 ‘‘(1) the maturity of the securities; 

25 ‘‘(2) the yield of the securities; 


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1 ‘‘(3) the type of conventional mortgages that 

2 serve as collateral for the securities; or 

3 ‘‘(4) such other terms and conditions that the 

4 Director deems appropriate. 

5 ‘‘(d) TEMPORARY REGULATION OF GUARANTEE

6 FEES.— 

7 ‘‘(1) GAO STUDY.—Not later than the expira8 tion of the 12-month period beginning upon the date 

9 of the enactment of the Housing Finance Reform 

10 Act of 2011, the Comptroller General of the United 

11 States shall conduct a study to determine the mar12 ket value of the catastrophic guarantee under sec13 tion 1388 and submit to the Director a report set14 ting forth the findings of such study. 

15 ‘‘(2) AMOUNT.—Taking into consideration the 

16 findings of the study pursuant to paragraph (1), the 

17 Director shall establish a pricing structure for guar18 antee fees by associations that provides for a reason19 able rate of return to associations. 

20 ‘‘(3) QUARTERLY ADJUSTMENT.—After initially 

21 establishing the pricing structure pursuant to para22 graph (2), the Director shall, on a calendar quar23 terly basis, review such prices and adjust the pricing 

24 structure as appropriate. 


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1 ‘‘(4) EMERGENCY ADJUSTMENT.—The Director 

2 may, at any time, adjust the prices and pricing 

3 structure under this subsection if the Director deter4 mines that market conditions or other factors re5 quire such adjustment. 

6 ‘‘(5) TERMINATION OF PRICING STRUCTURE.— 

7 The Director shall monitor competition between as8 sociations to determine the first time at which both 

9 are the following conditions exist: 

10 ‘‘(A) There is sufficient competition be11 tween the associations. 

12 ‘‘(B) The associations, individually and col13 lectively, are stable and sufficient to serve the 

14 market. 

15 Upon such a determination, the Director shall pro16 vide for the termination of the applicability and ad17 justment of pricing structure under this subsection 

18 upon a date certain and shall terminate the pricing 

19 structure on such date. On and after such date, each 

20 association shall establish guarantee fees to be 

21 charged by the association. 

22 ‘‘(e) DISCLOSURE REQUIREMENT.— 

23 ‘‘(1) IN GENERAL.—Federal Housing Finance 

24 Agency securities shall not be registered securities 

25 under the terms of the Securities Act of 1933 (15 


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1 U.S.C. 77a et seq.) and shall be exempt securities 

2 for purposes of the Securities Exchange Act of 1934 

3 (15 U.S.C. 78a et seq.). 

4 ‘‘(2) DISCLOSURE REGULATION.—Notwith5 standing paragraph (1), the Director shall, by regu6 lation, ensure transparency of Federal Housing Fi7 nance Agency securities by requiring each associa8 tion to publicly disclose information about the com9 position of each pool of mortgages backing the secu10 rity, including the average loan-to-value ratio, the 

11 average debt-to-income ratio, the average payment 

12 history of the mortgagors, the number and value of 

13 mortgages from each State, the distribution of mort14 gage coupon rates, and whether the mortgages were 

15 originated in broker or non-broker channels. 

16 ‘‘SEC. 1388. CATASTROPHIC FEDERAL GUARANTEE. 

17 ‘‘(a) AUTHORIZATION.—Subject to the limitations in 

18 subsection (b), and such other terms and conditions that 

19 the Director deems appropriate, the Director shall guar20 antee the timely payment of the principal and interest of 

21 Federal Housing Finance Agency securities, and the full 

22 faith and credit of the United States is hereby pledged 

23 to the payment of all amounts which may be required to 

24 be paid as a result of such guarantee. 


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1 ‘‘(b) LIMITATIONS.—A guarantee under this section 

2 shall apply only if— 

3 ‘‘(1) the association that issued the securities 

4 has been placed into conservatorship or receivership 

5 by the Director; and 

6 ‘‘(2) the Reserve Fund established by section 

7 1389 lacks sufficient funds to make the required 

8 principal and interest payments. 

9 ‘‘(c) FEE.— 

10 ‘‘(1) ESTABLISHMENT.—The Director shall es11 tablish, on an annual basis, a fee to be paid by asso12 ciations for a guarantee issued under this section in 

13 connection with Federal Housing Finance Agency 

14 securities issued by such associations. 

15 ‘‘(2) ADMINISTRATION.—The Director shall im16 pose and collect such fee through the Office of 

17 Securitization. 

18 ‘‘(3) AMOUNT.—The Director shall establish 

19 the fee at a level to ensure that amounts in the Re20 serve Fund are sufficient to cover potential claims 

21 on such Fund, taking into consideration— 

22 ‘‘(A) general economic conditions; 

23 ‘‘(B) trends in housing prices; and 

24 ‘‘(C) such other factors that the Director 

25 deems appropriate. 


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1 ‘‘(d) SPECIAL ASSESSMENT TO REPAY COST OF

2 FEDERAL GUARANTEE.— 

3 ‘‘(1) IN GENERAL.—If the Director is required 

4 to make payments pursuant to the catastrophic Fed5 eral guarantee authorized under subsection (a) in 

6 excess of the amounts in the Reserve Fund, the Di7 rector shall impose a special assessment on associa8 tions to recoup all costs associated with the guar9 antee. 

10 ‘‘(2) CRITERIA.—The Director, by regulation, 

11 shall establish criteria for the imposition of a special 

12 assessment. Such criteria shall— 

13 ‘‘(A) apportion the assessment equally 

14 among all associations; and 

15 ‘‘(B) to the extent feasible and prudent, 

16 permit associations to pay the assessment over 

17 a period of time so that the assessment does 

18 not cause an association to be undercapitalized 

19 or otherwise materially impair the operations of 

20 an association. 

21 ‘‘(e) NO FEDERAL SUPPORT FOR OTHER SECURI22 TIES OR OBLIGATIONS OF ASSOCIATIONS.—This Act may 

23 not be construed to authorize or provide any guarantee 

24 of any security or obligation of an association by the 

25 United States or any agency or instrumentality of the 


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1 United States, other than Federal Housing Finance Agen2 cy securities issued by an association. 

3 ‘‘SEC. 1389. RESERVE FUND. 

4 ‘‘(a) ESTABLISHMENT; CREDITS.—The Director shall 

5 establish a Reserve Fund, which shall be credited with all 

6 fees imposed and collected pursuant to section 1388(c). 

7 ‘‘(b) ORGANIZATION.—The Reserve Fund shall be 

8 maintained with a Federal Reserve Bank or with a deposi9 tory institution designated as a depository or fiscal agent 

10 of the United States. 

11 ‘‘(c) USE.—Amounts in the Reserve Fund shall be 

12 used by the Director, through the Office of Securitization, 

13 to make principal and interest payments to the owners of 

14 Federal Housing Finance Agency securities issued by an 

15 association that has been placed into conservatorship or 

16 receivership— 

17 ‘‘(1) for payment under guarantees issued 

18 under subsection (a) of section 1388 only under the 

19 terms provided in subsection (b) of such section; and 

20 ‘‘(2) to the extent such amounts are not other21 wise needed, for investment in obligations of the 

22 United States or in obligations guaranteed as to 

23 principal and interest by the United States. 

24 ‘‘(d) TREASURY ADVANCE.— 


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1 ‘‘(1) IN GENERAL.—If amounts in the Reserve 

2 Fund are insufficient to satisfy the liabilities of the 

3 Fund, the Secretary of the Treasury shall advance 

4 to the Fund such amounts as may be necessary to 

5 meet the obligations of the Fund, as determined by 

6 the Director and the Secretary, and the Director 

7 shall agree to repay such advance on such terms and 

8 conditions as required by the Secretary. 

9 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

10 There are authorized to be appropriated to the Sec11 retary, without fiscal year limitation, such sums as 

12 may be necessary to carry out this subsection. 

13 ‘‘SEC. 1390. SUPERVISION OF ASSOCIATIONS. 

14 ‘‘(a) GENERAL SUPERVISORY AUTHORITY OF DIREC15 TOR.— 

16 ‘‘(1) IN GENERAL.—The Director shall have su17 pervisory authority over associations, and may issue 

18 such regulations, orders, and interpretations as the 

19 Director determines necessary to ensure that an as20 sociation operates in a safe and sound manner. 

21 ‘‘(2) USE OF EXISTING AUTHORITY.—Except as 

22 provided in this section, an association, an associa23 tion-affiliated party, and a limited-life association 

24 shall be subject to the same supervisory and enforce25 ment powers of the Director to the same extent as 


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1 if an association was a regulated entity, the associa2 tion-affiliated party was an entity-affiliated party, 

3 and the limited-life association was a limited-life en4 tity, including— 

5 ‘‘(A) the enforcement powers under sec6 tions 1371 through 1379 (12 U.S.C. 4631–9); 

7 ‘‘(B) authority to reclassify a capital clas8 sification (as established pursuant to subsection 

9 (h)(2) of this section) as provided in section 

10 1364(c) (12 U.S.C. 4614(c)); 

11 ‘‘(C) authority to restrict capital distribu12 tions in accordance with section 1364(e) (12 

13 U.S.C. 4614(e)); 

14 ‘‘(D) authority to take prompt corrective 

15 supervisory actions in response to capital classi16 fications as provided for in sections 1365 and 

17 1366 (12 U.S.C. 4615, 4616); and 

18 ‘‘(E) authority to appoint the Agency as 

19 the conservator or a receiver in accordance with 

20 section 1367 (12 U.S.C. 4617). 

21 ‘‘(b) EXAMINATIONS.—The Director shall conduct a 

22 full-scope examination of an association not less frequently 

23 than once every 12 months, and shall have real-time access 

24 to all data and information related to the activities and 

25 operations of an association. 


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1 ‘‘(c) CAPITAL STANDARDS.— 

2 ‘‘(1) ESTABLISHMENT.—The Director shall es3 tablish, by regulation, risk-based and leverage cap4 ital standards for associations. 

5 ‘‘(2) CRITERIA.—In setting the capital stand6 ards required by paragraph (1), the Director shall 

7 take into consideration— 

8 ‘‘(A) the risk associated with conventional 

9 mortgages; 

10 ‘‘(B) underwriting standards that apply to 

11 conventional mortgages; and 

12 ‘‘(C) such other factors as the Director 

13 deems appropriate. 

14 ‘‘(d) MANAGEMENT AND OPERATIONAL STAND15 ARDS.—The Director shall establish, by regulation, stand16 ards for the management and operations of associations, 

17 including standards related to— 

18 ‘‘(1) adequacy of internal controls and informa19 tion systems taking into account the nature and 

20 scale of business operations; 

21 ‘‘(2) independence and adequacy of internal 

22 audit systems; 

23 ‘‘(3) management of interest rate risk exposure; 

24 ‘‘(4) management of market risk, including 

25 standards that provide for systems that accurately 


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1 measure, monitor, and control market risks and, as 

2 warranted, that establish limitations on market risk; 

3 ‘‘(5) adequacy and maintenance of liquidity and 

4 reserves; 

5 ‘‘(6) management of asset growth; 

6 ‘‘(7) investments and acquisitions of assets con7 sistent with this Act; 

8 ‘‘(8) overall risk management processes, includ9 ing adequacy of oversight by senior management and 

10 the board of directors and of processes and policies 

11 to identify, measure, monitor, and control material 

12 risks, including reputational risks, and for adequate, 

13 well-tested business resumption plans for all major 

14 systems with remote site facilities to protect against 

15 disruptive events; 

16 ‘‘(9) management of credit and counterparty 

17 risk, including systems to identify concentrations of 

18 credit risk and prudential limits to restrict exposure 

19 of the association to a single counterparty or groups 

20 of related counterparties; 

21 ‘‘(10) maintenance of adequate records, in ac22 cordance with consistent accounting policies and 

23 practices that enable the Director to evaluate the fi24 nancial condition of the association; and 


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1 ‘‘(11) such other operational and management 

2 standards as the Director determines to be appro3 priate. 

4 ‘‘(e) UNDERWRITING STANDARDS FOR CONVEN5 TIONAL MORTGAGES.— 

6 ‘‘(1) REGULATION REQUIRED.—The Director 

7 shall establish, by regulation, underwriting stand8 ards for conventional mortgage purchased by an as9 sociation. Such standards shall be the same as the 

10 standards established by the Bureau for Consumer 

11 Financial Protection of the Federal Reserve System 

12 for qualified mortgages pursuant to section 129C(b) 

13 of the Truth in Lending Act (15 U.S.C. 1639c(b); 

14 as added by section 1412 of the Dodd-Frank Wall 

15 Street Reform and Consumer Protection Act (124 

16 Stat. 2145)). 

17 ‘‘(2) DEFINITION.—For purposes of this sub18 section, the term ‘conventional mortgage’ means a 

19 loan that— 

20 ‘‘(A) is secured by a mortgage, lien, or 

21 other security interest on a— 

22 ‘‘(i) a one-to-four family residence 

23 that is the principal residence of the mort24 gagor, 


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1 ‘‘(ii) a property comprising five or 

2 more family dwelling units; 

3 ‘‘(iii) a manufactured home that is the 

4 principal residence of the mortgagor; or 

5 ‘‘(iv) the stock or membership interest 

6 or certificate issued to a tenant-stockholder 

7 or resident-member of a cooperative hous8 ing corporation, as defined in section 216 

9 of the Internal Revenue Code of 1986, and 

10 in the proprietary lease, occupancy agree11 ment, or right of tenancy in the dwelling 

12 union of the tenant-stockholder or resi13 dent-member in such cooperative housing 

14 corporation; 

15 ‘‘(B) is a subordinate mortgage or lien 

16 on— 

17 ‘‘(i) a one-to-four family residence 

18 that is the principal residence of the mort19 gage; or 

20 ‘‘(ii) a property that comprises five or 

21 more family dwelling units: 

22 ‘‘(C) is not insured or guaranteed under— 

23 ‘‘(i) the National Housing Act (12 

24 U.S.C. 1701 et seq.); 


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1 ‘‘(ii) title V of the Housing Act of 

2 1949 (42 U.S.C. 1471 et seq.); 

3 ‘‘(iii) chapter 37 of title 38, United 

4 States Code; or 

5 ‘‘(D) meets the underwriting standards set 

6 by the Director pursuant to paragraph (1). 

7 ‘‘(f) LIMITATION ON MAXIMUM ORIGINAL PRINCIPAL

8 AMOUNT.—The Director shall prohibit any association 

9 from purchasing any conventional mortgage for which the 

10 maximum original principal obligation exceeds the greater 

11 of— 

12 ‘‘(1) 150 percent of the average home price in 

13 the United States for a residence having the same 

14 number of dwelling units as the residence subject to 

15 the mortgage; or 

16 ‘‘(2) 150 percent of the median price, for the 

17 area in which the residence subject the mortgage is 

18 located for a residence having the same number of 

19 dwelling units as the residence subject to the mort20 gage. 

21 ‘‘(g) REPORTING REQUIREMENTS.— 

22 ‘‘(1) IN GENERAL.—An association shall submit 

23 to the Director such reports, containing such infor24 mation and in such form and at such times, as the 


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1 Director deems necessary to assess the condition, 

2 operations and activities of the association. 

3 ‘‘(2) INFORMATION REGARDING AREAS AND

4 MARKETS SERVED.— 

5 ‘‘(A) SUBMISSION OF INFORMATION.—The 

6 Director shall require each association to sub7 mit data annually to the Director that the Di8 rector determines is sufficient to indicate the 

9 geographic areas and market segments being 

10 served by the association. 

11 ‘‘(B) PUBLIC AVAILABILITY.—Upon re12 ceipt of information submitted pursuant to sub13 paragraph (A), the Director shall make such in14 formation available to the public in a form and 

15 manner determined appropriate by the Director. 

16 ‘‘(h) PROMPT CORRECTIVE ACTIONS.— 

17 ‘‘(1) ESTABLISHMENT AND CRITERIA.—The Di18 rector, by regulation, shall— 

19 ‘‘(A) establish the capital classifications 

20 specified under paragraph (2) for associations; 

21 ‘‘(B) establish criteria for each such cap22 ital classification based upon the amount and 

23 types of capital held by an association; and 

24 ‘‘(C) classify each association according to 

25 such capital classifications. 


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1 ‘‘(2) CAPITAL CLASSIFICATIONS.—The capital 

2 classifications specified under this paragraph are— 

3 ‘‘(A) adequately capitalized; 

4 ‘‘(B) undercapitalized; 

5 ‘‘(C) significantly undercapitalized; and 

6 ‘‘(D) critically undercapitalized. 

7 ‘‘(i) CONSERVATORSHIP AND RECEIVERSHIP.— 

8 ‘‘(1) ADDITIONAL GROUNDS FOR APPOINT9 MENT.—In addition to the grounds for the appoint10 ment of conservator or receiver under section 

11 1367(a)(3) (12 U.S.C. 4617(a)(3)), the Director 

12 shall appoint the Agency as the conservator or re13 ceiver of an association if the association fails to 

14 make a timely payment of principal or interest on a 

15 Federal Housing Finance Agency security issued by 

16 the association. 

17 ‘‘(2) LIMITED-LIFE ASSOCIATION.—If the Agen18 cy is appointed as receiver for an association, the 

19 Agency, as receiver, may organize a limited life asso20 ciation to assume the assets and purchase the liabil21 ities of the association subject to the same provisions 

22 applicable under section 1367(i) to a limited-life reg23 ulated entity appointed for a regulated entity, and 

24 such limited-life association shall, by operation of 

25 law and immediately upon its organization, succeed 


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1 to the charter of the association and operate in ac2 cordance with such charter, this Act, and any other 

3 provision of law to which the association is subject. 

4 ‘‘SEC. 1391. AGENCY OPERATIONS. 

5 ‘‘(a) APPLICATIONS PROCESSING DIVISION.—The 

6 Director shall establish a division within the Agency to 

7 accept and process applications for the formation of asso8 ciations, and shall employ accountants, financial analysts, 

9 lawyers, and such other personnel as the Director deter10 mines necessary to evaluate the qualifications of the orga11 nizer or organizers and the financial prospects of a pro12 posed association. 

13 ‘‘(b) AUDITING DIVISION.—The Director shall estab14 lish a division within the Agency to conduct regular audits 

15 of the processes and systems used by associations. Such 

16 audits shall include a review of loan files and systems for 

17 tracking loan documents. 

18 ‘‘(c) DEPUTY DIRECTOR FOR HOUSING FINANCE

19 GUARANTEE ASSOCIATIONS.— 

20 ‘‘(1) IN GENERAL.—The Agency shall have a 

21 Deputy Director for Housing Finance Guarantee As22 sociations, who shall be designated by the Director 

23 from among individuals with demonstrated under24 standing of housing markets and housing finance. 


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1 ‘‘(2) FUNCTIONS.—The Deputy Director for 

2 Housing Finance Guarantee Associations shall have 

3 such functions, powers, and duties with respect to 

4 the formation, regulation, and supervision of associa5 tions and the operations of the Office of 

6 Securitization as the Director shall prescribe. 

7 ‘‘(3) LIMITATIONS.—The Deputy Director for 

8 Housing Finance Guarantee Associations may not— 

9 ‘‘(A) have any direct or indirect financial 

10 interest in any association or regulated entity; 

11 ‘‘(B) hold any office, position, or employ12 ment in any association or regulated entity; or 

13 ‘‘(C) have served as an executive officer or 

14 director of any association or regulated entity 

15 at any time during the 3-year period preceding 

16 the date of the designation of such individual by 

17 the Director. 

18 ‘‘(d) ANNUAL ASSESSMENT OF AGENCY OPER19 ATIONS.—In addition to the general authority of the Fed20 eral Housing Finance Oversight Board provided under 

21 section 1313A (12 U.S.C. 4513a), the Board, annually, 

22 shall— 

23 ‘‘(1) conduct an assessment of the operations 

24 and resources of the Agency to determine whether 

25 the Director and the Agency have the powers, sysVerDate Mar 15 2010 05:42 May 25, 2011 Jkt 099200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\H1859.IH H1859

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1 tems, personnel, and other resources necessary to 

2 charter, supervise, and regulate associations; 

3 ‘‘(2) make recommendations to the Director 

4 based upon the assessment required in paragraph 

5 (1); and 

6 ‘‘(3) report the results of the assessment under 

7 this subsection and any recommendations pursuant 

8 to such assessment to the Congress. 

9 ‘‘(e) ASSESSMENTS AND OTHER FEES.—The Direc10 tor shall establish, by regulation, such assessments and 

11 fees the Director deems necessary to cover the Agency’s 

12 direct and indirect costs for chartering, supervising, and 

13 regulating associations under this subtitle, including all 

14 costs associated with the establishment and operation of 

15 the Office of Securitization. 

16 ‘‘SEC. 1392. APPLICABLE LAW. 

17 ‘‘(a) IN GENERAL.—All authorized activities of an as18 sociation shall be governed by Federal law and subject to 

19 exclusive regulation and supervision by the Agency. No 

20 State may prevent or restrict an association from engag21 ing directly or indirectly in any activity authorized under 

22 or pursuant to this subtitle. 

23 ‘‘(b) LIMITATION.—Subsection (a) may not be con24 strued to prevent the application of nondiscriminatory 


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1 State laws that apply to all businesses operating in a 

2 State, including criminal, tax, and zoning laws. 

3 ‘‘SEC. 1393. JUDICIAL REVIEW. 

4 ‘‘(a) IN GENERAL.—An association affected by an ac5 tion of the Director may seek review of such action in an 

6 appropriate Federal court. 

7 ‘‘(b) PRIVATE RIGHTS OF ACTION.—Nothing in this 

8 Act may be construed to create a private right of action 

9 on behalf of any person against an association, or any offi10 cer or director of an association. 

11 ‘‘SEC. 1394. BUDGET NEUTRALITY. 

12 ‘‘The Director shall exercise the authority provided 

13 in this subtitle over the formation, regulation, and super14 vision of associations and the operations of the Office of 

15 Securitization so as to ensure that associations and the 

16 Office of Securitization operate in a manner that does not 

17 increase the budget deficit, or debt, of the Federal Govern18 ment.’’. 

19 SEC. 4. TRANSITION. 

20 (a) TRANSITION PLAN.—Not later than six months 

21 after the date of the enactment of this Act, the Director 

22 of the Federal Housing Finance Agency shall submit to 

23 the Congress a plan that provides for— 

24 (1) the winding down of the enterprises; and 


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1 (2) the formation, supervision, and regulation 

2 of associations as provided in subtitle D of the Fed3 eral Housing Enterprises Financial Safety and 

4 Soundness Act of 1992, as added by the amendment 

5 made by section 3 of this Act. 

6 (b) CONTENTS OF PLAN.—The plan required by sub7 section (a) shall provide for— 

8 (1) measures to ensure the continued operation 

9 of the enterprises during the transition period, in10 cluding the retention of qualified personnel; 

11 (2) the transfer of qualified personnel and sys12 tems from the enterprises to associations; 

13 (3) the implementation of the transitional ac14 tions required by subsections (b) through (m) of this 

15 section; and 

16 (4) such other matters as the Director deems 

17 appropriate. 

18 (c) REPEAL OF AFFORDABLE HOUSING GOALS.— 

19 (1) REPEAL.—The Federal Housing Enter20 prises Financial Safety and Soundness Act of 1992 

21 is amended by striking sections 1331 through 1336 

22 (12 U.S.C. 4561–6). 

23 (2) CONFORMING AMENDMENTS.—Federal 

24 Housing Enterprises Financial Safety and Sound25 ness Act of 1992 is amended— 


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1 (A) in section 1303(28) (12 U.S.C. 

2 4502(28)), by striking ‘‘and, for the purposes’’ 

3 and all that follows through ‘‘designated dis4 aster areas’’; 

5 (B) in section 1324(b)(1)(A) (12 U.S.C. 

6 4544(b)(1)(A))— 

7 (i) by striking clauses (i), (ii), and 

8 (iv); 

9 (ii) in clause (iii), by inserting ‘‘and’’ 

10 after the semicolon at the end; and 

11 (iii) by redesignating clauses (iii) and 

12 (v) as clauses (i) and (ii), respectively; 

13 (C) in section 1338(c)(10) (12 U.S.C. 

14 4568(c)(10)), by striking subparagraph (E); 

15 (D) in section 1339(h) (12 U.S.C. 4569), 

16 by striking paragraph (7); 

17 (E) in section 1341 (12 U.S.C. 4581)— 

18 (i) in subsection (a)— 

19 (I) in paragraph (1), by inserting 

20 ‘‘or’’ after the semicolon at the end; 

21 (II) in paragraph (2), by striking 

22 the semicolon at the end and inserting 

23 a period; and 

24 (III) by striking paragraphs (3) 

25 and (4); and 


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1 (ii) in subsection (b)(2)— 

2 (I) in subparagraph (A), by in3 serting ‘‘or’’ after the semicolon at the 

4 end; 

5 (II) by striking subparagraphs 

6 (B) and (C); and 

7 (III) by redesignating subpara8 graph (D) as subparagraph (B); 

9 (F) in section 1345(a) (12 U.S.C. 

10 4585(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 (G) in section 1371(a)(2) (12 U.S.C. 

19 4631(a)(2))— 

20 (i) by striking ‘‘with any housing goal 

21 established under subpart B of part 2 of 

22 subtitle A of this title,’’; and 

23 (ii) by striking ‘‘section 1336 or’’. 

24 (d) REQUIREMENT FOR ENTERPRISES TO PAY

25 STATE AND LOCAL TAXES.— 


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1 (1) FANNIE MAE.—Effective on the date of the 

2 enactment of this Act, paragraph (2) of section 

3 309(c) of the Federal National Mortgage Association 

4 Charter Act (12 U.S.C. 1723a(c)(2)) is amended— 

5 (A) by striking ‘‘shall be exempt from’’ 

6 and inserting ‘‘shall be subject to’’; and 

7 (B) by striking ‘‘except that any’’ and in8 serting ‘‘and any’’. 

9 (2) FREDDIE MAC.—Effective on the date of 

10 the enactment of this Act, section 303(e) of the Fed11 eral Home Loan Mortgage Corporation Act (12 

12 U.S.C. 1452(e)) is amended— 

13 (A) by striking ‘‘shall be exempt from’’ 

14 and inserting ‘‘shall be subject to’’; and 

15 (B) by striking ‘‘except that any’’ and in16 serting ‘‘and any’’. 

17 (e) DESIGNATION OF DEPUTY DIRECTOR FOR HOUS18 ING FINANCE GUARANTEE ASSOCIATIONS.—Not later 

19 than six months after the date of the enactment of this 

20 Act, the Director shall designate the Deputy Director for 

21 Housing Finance Guarantee Associations authorized by 

22 section 1391(c) of the Federal Housing Enterprises Fi23 nancial Safety and Soundness Act of 1992, as added by 

24 the amendment made by section 3 of this Act. 


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1 (f) ESTABLISHMENT OF OFFICE OF SECURITIZATION

2 AND CREATION OF STANDARDIZED MORTGAGE SECU3 RITY.—Not later than 12 months after the date of the 

4 enactment of this Act, the Director shall— 

5 (1) provide for the establishment of the Office 

6 of Securitization, as authorized by section 1386 of 

7 the Federal Housing Enterprises Financial Safety 

8 and Soundness Act of 1992, as added by the amend9 ment made by section 3 of this Act; 

10 (2) create the standardized mortgage security 

11 forms required by section 1387 of the Federal Hous12 ing Enterprises Financial Safety and Soundness Act 

13 of 1992, as added by the amendment made by sec14 tion 3 of this Act; and 

15 (3) require, in a manner that does not disrupt 

16 or impair trading in existing mortgage securities 

17 issued by the enterprises, that the enterprises use 

18 the standardized mortgage security forms when 

19 issuing new mortgage securities. 

20 (g) REDUCTION IN MORTGAGE ASSET PORTFOLIOS

21 OF ENTERPRISES.— 

22 (1) IN GENERAL.—Not later than 12 months 

23 after the date of enactment of this Act, the Director 

24 shall publish, in final form, a regulation that re25 quires each enterprise to reduce its total mortgage 


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1 assets to not more than $250,000,000,000, within 5 

2 years of the date of the enactment of this Act. 

3 (2) DEFINITION.—For purposes of this para4 graph, the term ‘‘total mortgage assets’’ means, with 

5 respect to an enterprise, mortgages, mortgage loans, 

6 mortgage-related securities, participation certificates, 

7 mortgage-backed commercial paper, obligations of 

8 real estate investment conduits and similar assets, in 

9 each case to the extent that such assets would ap10 pear on the balance sheet of the enterprise in ac11 cordance with generally accepted accounting prin12 ciples in effect in the United States as of September 

13 7, 2008. 

14 (h) INCREASE IN GUARANTEE FEES CHARGED BY

15 ENTERPRISES.— 

16 (1) IN GENERAL.—Not later than 12 months 

17 after the date of the enactment of this Act, the Di18 rector shall, taking into consideration the study 

19 under section 1387(d)(1) of the Federal Housing 

20 Enterprises Financial Safety and Soundness Act of 

21 1992, as added by the amendment made by section 

22 3 of this Act, issue in final form a regulation that 

23 directs the enterprises to increase, over a three-year 

24 period, guarantee fees to more accurately reflect the 

25 risk assumed by the guarantee. 


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1 (2) DEFINITION.—For purposes of this sub2 section, the term ‘‘guarantee fee’’ means a fee 

3 charged by an enterprise in connection with any 

4 guarantee, issued by the enterprise, of the timely 

5 payment of principal and interest on securities, 

6 notes, and other obligations based on or backed by 

7 mortgages on residential real property. Such term 

8 includes— 

9 (A) the guarantee fee charged by the Fed10 eral National Mortgage Association with respect 

11 to mortgage-backed securities; and 

12 (B) the management and guarantee fee 

13 charged by the Federal Home Loan Mortgage 

14 Corporation with respect to participation certifi15 cates. 

16 (i) CONFORMING LOAN LIMITS.—Effective upon the 

17 date of the enactment of this Act, section 146 of the Con18 tinuing Appropriations Act, 2011 (Public Law 111–242; 

19 124 Stat. 2615) is amended by adding at the end the fol20 lowing new subsection: 

21 ‘‘(c) EXTENSION UNTIL END OF

22 CONSERVATORSHIPS.—Notwithstanding any provision of 

23 subsection (a) or (b), such subsections shall apply with 

24 respect to mortgages originated during the period that be25 gins at the conclusion of fiscal year 2011 and ends upon 


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1 the termination of the conservatorship of the Federal Na2 tional Mortgage Association or the Federal Home Loan 

3 Mortgage Corporation, as applicable, pursuant to section 

4 4(l) of the Housing Finance Reform Act of 2011.’’. 

5 (j) FINALIZATION OF REGULATIONS GOVERNING AS6 SOCIATIONS, FORMATION THE APPLICATIONS AND AUDIT7 ING DIVISIONS.—Not later than 12 months after the date 

8 of the enactment of this Act, the Director shall— 

9 (1) issue, in final form regulations governing 

10 the chartering, operations, and supervision of asso11 ciations, including required capital and other pru12 dential standards; and 

13 (2) establish the applications and auditing divi14 sions required by section 1391 of the Federal Hous15 ing Enterprises Financial Safety and Soundness Act 

16 of 1992, as added by the amendment made by sec17 tion 3 of this Act. 

18 (k) NOTIFICATION TO CONGRESS AND ACCEPTANCE

19 OF CHARTER APPLICATIONS.—Following the completion 

20 of the actions required under subsection (j), the Director 

21 shall— 

22 (1) notify the Congress that the Agency has 

23 taken all appropriate actions to begin the process of 

24 chartering, supervising and regulating associations, 

25 and 


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1 (2) may commence accepting, and acting upon, 

2 applications for the chartering of associations. 

3 (l) MANDATORY RECEIVERSHIP.—The Director shall 

4 place the enterprises into receivership no later than one 

5 year after five or more associations, two of which are not 

6 special purpose associations, have been chartered. 

7 (m) FEDERAL SUPPORT FOR EXISTING OBLIGATIONS

8 OF FANNIE MAE AND FREDDIE MAC.—The full faith and 

9 credit of the United States is hereby pledged to the pay10 ment of all debt obligations of the enterprises and all 

11 mortgage-backed securities issued by the enterprises, until 

12 such obligations and securities mature or are redeemed. 

13 (n) DEFINITIONS.—For purposes of this section, the 

14 following definitions shall apply: 

15 (1) AGENCY.—The term ‘‘Agency’’ means the 

16 Federal Housing Finance Agency. 

17 (2) ASSOCIATION; CONVENTIONAL MORTGAGE; 

18 OFFICE OF SECURITIZATION; REGULATED ENTITY.— 

19 The terms ‘‘association’’, ‘‘conventional mortgage’’, 

20 ‘‘Office of Securitization’’, and ‘‘regulated entity’’ 

21 have the meanings given such terms in section 1381 

22 of the Federal Housing Enterprises Financial Safety 

23 and Soundness Act of 1992. 

24 (3) DIRECTOR.—The term ‘‘Director’’ means 

25 the Director of the Agency. 


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1 (4) ENTERPRISE.—The term ‘‘enterprise’’ has 

2 the meaning given such term in section 1303 of the 

3 Federal Housing Enterprises Financial Safety and 

4 Soundness Act of 1992 (12 U.S.C. 4502). 

5 (5) TRANSITION PERIOD.—The term ‘‘transi6 tion period’’ means the period that begins upon the 

7 date of the enactment of this Act and ends upon ap8 pointment of receivers for both enterprises pursuant 

9 to subsection (m). 

10 SEC. 5. TECHNICAL AND CONFORMING AMENDMENTS. 

11 Federal Housing Enterprises Financial Safety and 

12 Soundness Act of 1992 is amended— 

13 (1) in section 1303(28) (12 U.S.C. 4502(28)), 

14 by striking ‘‘and, for the purposes’’ and all that fol15 lows through ‘‘designated disaster areas’’; 

16 (2) in section 1324(b)(1)(A) (12 U.S.C. 

17 4544(b)(1)(A))— 

18 (A) by striking clauses (i), (ii), and (iv); 

19 (B) in clause (iii), by inserting ‘‘and’’ after 

20 the semicolon at the end; and 

21 (C) by redesignating clauses (iii) and (v) 

22 as clauses (i) and (ii), respectively; 

23 (3) in section 1338(c)(10) (12 U.S.C. 

24 4568(c)(10)), by striking subparagraph (E); 


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1 (4) in section 1339(h) (12 U.S.C. 4569), by 

2 striking paragraph (7); 

3 (5) in section 1341 (12 U.S.C. 4581)— 

4 (A) in subsection (a)— 

5 (i) in paragraph (1), by inserting ‘‘or’’ 

6 after the semicolon at the end; 

7 (ii) in paragraph (2), by striking the 

8 semicolon at the end and inserting a pe9 riod; and 

10 (iii) by striking paragraphs (3) and 

11 (4); and 

12 (B) in subsection (b)(2)— 

13 (i) in subparagraph (A), by inserting 

14 ‘‘or’’ after the semicolon at the end; 

15 (ii) by striking subparagraphs (B) and 

16 (C); and 

17 (iii) by redesignating subparagraph 

18 (D) as subparagraph (B); 

19 (6) in section 1345(a) (12 U.S.C. 4585(a))— 

20 (A) in paragraph (1), by inserting ‘‘or’’ 

21 after the semicolon at the end; 

22 (B) in paragraph (2), by striking the semi23 colon at the end and inserting a period; and 

24 (C) by striking paragraphs (3) and (4); 

25 and 


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1 (7) in section 1371(a)(2) (12 U.S.C. 

2 4631(a)(2))— 

3 (A) by striking ‘‘with any housing goal es4 tablished under subpart B of part 2 of subtitle 

5 A of this title,’’; and 

6 (B) by striking ‘‘section 1336 or’’. 

Æ 


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