```

[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1123 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 1123

   To reduce losses under the single family and multifamily mortgage 
 insurance programs under title II of the National Housing Act through 
                             modernization.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           February 24, 1993

Mr. Santorum (for himself, Mr. Inglis of South Carolina, Mr. Doolittle, 
 and Mr. Zimmer) introduced the following bill; which was referred to 
          the Committee on Banking, Finance and Urban Affairs

_______________________________________________________________________

                                 A BILL

 
   To reduce losses under the single family and multifamily mortgage 
 insurance programs under title II of the National Housing Act through 
                             modernization.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``FHA Modernization Act''.

SEC. 2. FHA COMPUTER SYSTEM.

    (a) Selection.--
            (1) In general.--The Secretary of Housing and Urban 
        Development (in this Act referred to as the ``Secretary'') 
        shall select a computer system under this section (including 
        appropriate mechanical, electronic, and programming elements) 
        for use in administrating the single family and multifamily 
        housing mortgage insurance programs under title II of the 
        National Housing Act and shall use such system to carry out the 
        activities under subsection (b) of this section.
            (2) Use of existing systems and programs.--In selecting the 
        computer system, the Secretary shall survey and review various 
        computer systems and programs that are commercially available 
        and used for processing housing and residential mortgage 
        applications. The Secretary shall identify the programs, 
        methods, and procedures that are most effective and applicable 
        for use under this section.
            (3) Contract.--Pursuant to the survey and review under 
        paragraph (2), the Secretary shall, to the extent or in such 
        amounts as are provided in appropriation Acts, enter into a 
        contract with an appropriate private entity for the use and 
        adaptation (if necessary) of the computer system that best 
        meets the specifications established under subsection (b).
    (b) Requirements.--The computer system selected under this section 
shall meet the specifications established by the Secretary to carry out 
activities with respect to the single family and multifamily housing 
mortgage insurance programs under title II of the National Housing Act, 
as follows:
            (1) To administer the processing of applications for 
        mortgage insurance.
            (2) To maintain and update any records and information 
        maintained by the Secretary.
            (3) To facilitate, coordinate, and simplify interaction 
        between the Department of Housing and Urban Development and 
        mortgagees, including determination of eligibility, review and 
        certification of underwriting, making insurance commitments and 
        endorsements, closing, and other mortgage insurance activities.
            (4) To monitor the performance of the Department with 
        respect to each function identified in the performance 
        standards established under section 4.
            (5) To monitor the performance of mortgagees, servicers, 
        and other entities involved in the mortgage insurance programs, 
        entities to whom processing functions have been delegated by 
        the Secretary under section 328 of the Cranston-Gonzalez 
        National Affordable Housing Act, and mortgagees approved for 
        direct endorsement.

SEC. 3. STUDY OF PRIVATE MANAGEMENT OF INSURANCE PROGRAMS USING 
              COMPUTER SYSTEM.

    (a) Study.--The Secretary shall conduct a study to determine the 
effectiveness and feasibility of utilizing private contractors to 
administer the single family and multifamily housing mortgage insurance 
programs under the National Housing Act using the computer system 
selected under section 2. The study shall analyze whether the purposes 
of the mortgage insurance programs would be carried out more 
efficiently and economically by using contractors with demonstrated 
capabilities to carry out the mortgage insurance functions currently 
performed by the staff of the Department of Housing and Urban 
Development.
    (b) Report.--The Secretary shall submit a report regarding the 
study to the Congress not later than the expiration of the 4-month 
period beginning on the date of the enactment of this Act, which shall 
contain findings and recommendations regarding the use and cost of 
private contractors.

SEC. 4. PERFORMANCE STANDARDS.

    The Secretary shall establish standards by which to evaluate the 
performance of the Department of Housing and Urban Development with 
respect to functions performed by the Department in carrying out the 
single family and multifamily housing mortgage insurance programs under 
title II of the National Housing Act, including standards for prompt 
servicing of applications, accuracy of records, accounting for funds, 
prompt handling of delinquencies, and any other separately identifiable 
functions performed by the Department in carrying out such programs.

SEC. 5. PERIODIC REPORTS REGARDING CONTRACTOR PERFORMANCE.

    Using information compiled and available through the computer 
system selected under section 2, the Secretary shall submit to the 
Congress a report for each calendar year regarding the performance of 
mortgagees, servicers, and contractors involved in the single family 
and multifamily housing mortgage insurance programs under title II of 
the National Housing Act, entities to whom processing functions have 
been delegated by the Secretary under section 328 of the Cranston-
Gonzalez National Affordable Housing Act, and mortgagees approved for 
direct endorsement. Each report under this section shall be submitted 
not later than the March 31 of the year following the year for which 
the report is made.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to carry out this Act 
$10,000,000 for fiscal year 1994.

                                 <all>
```