I 

111TH CONGRESS 

1ST SESSION H. R. 1106 

To prevent mortgage foreclosures and enhance mortgage credit availability. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 23, 2009 

Mr. CONYERS (for himself, Mr. FRANK of Massachusetts, Mr. BERMAN, Mr. 

BLUMENAUER, Mr. COHEN, Mr. DELAHUNT, Ms. EDWARDS of Maryland, 

Mr. ELLISON, Mr. GONZALEZ, Mr. GUTIERREZ, Ms. JACKSON-LEE of 

Texas, Mr. JOHNSON of Georgia, Mr. LEWIS of Georgia, Ms. ZOE

LOFGREN of California, Mr. MILLER of North Carolina, Mr. NADLER of 

New York, Ms. LINDA T. SA ́NCHEZ of California, Ms. WASSERMAN

SCHULTZ, Ms. WATERS, and Mr. MARSHALL) introduced the following 

bill; which was referred to the Committee on Financial Services, and in 

addition to the Committees on the Judiciary and Veterans’ Affairs, for 

a period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To prevent mortgage foreclosures and enhance mortgage 

credit availability. 

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 ‘‘Help5 ing Families Save Their Homes Act of 2009’’. 


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

2 this Act is the following: 

Sec. 1. Short title; table of contents. 

TITLE I—PREVENTION OF MORTGAGE FORECLOSURES 

Subtitle A—Modification of Residential Mortgages 

Sec. 101. Eligibility for relief. 

Sec. 102. Prohibiting claims arising from violations of the Truth in Lending 

Act. 

Sec. 103. Authority to modify certain mortgages. 

Sec. 104. Combating excessive fees. 

Sec. 105. Confirmation of plan. 

Sec. 106. Discharge. 

Sec. 107. Standing trustee fees. 

Sec. 108. Effective date; application of amendments. 

Subtitle B—Related Mortgage Modification Provisions 

Sec. 121. Adjustments as a result of modification in bankruptcy of housing 

loans guaranteed by the department of veterans affairs. 

Sec. 122. Payment of FHA mortgage insurance benefits. 

Sec. 123. Adjustments as result of modification of rural single family housing 

loans in bankruptcy. 

Sec. 124. Unenforceability of certain provision as being contrary to public policy. 

TITLE II—FORECLOSURE MITIGATION AND CREDIT 

AVAILABILITY 

Sec. 201. Servicer safe harbor for mortgage loan modifications. 

Sec. 202. Changes to HOPE for Homeowners Program. 

Sec. 203. Requirements for FHA-approved mortgagees. 

Sec. 204. Enhancement of liquidity and stability of insured depository institutions to ensure availability of credit and reduction of foreclosures. 

3 TITLE I—PREVENTION OF 

4 MORTGAGE FORECLOSURES 

5 Subtitle A—Modification of 

6 Residential Mortgages 

7 SEC. 101. ELIGIBILITY FOR RELIEF. 

8 Section 109 of title 11, United States Code, is 

9 amended— 


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1 (1) by adding at the end of subsection (e) the 

2 following: ‘‘For purposes of this subsection, the com3 putation of debts shall not include the secured or 

4 unsecured portions of— 

5 ‘‘(1) debts secured by the debtor’s principal res6 idence if the value of such residence as of the date 

7 of the order for relief under chapter 13 is less than 

8 the applicable maximum amount of noncontingent, 

9 liquidated, secured debts specified in this subsection; 

10 or 

11 ‘‘(2) debts secured or formerly secured by what 

12 was the debtor’s principal residence that was sold in 

13 foreclosure or that the debtor surrendered to the 

14 creditor if the value of such real property as of the 

15 date of the order for relief under chapter 13 was less 

16 than the applicable maximum amount of noncontin17 gent, liquidated, secured debts specified in this sub18 section.’’, and 

19 (2) by adding at the end of subsection (h) the 

20 following: 

21 ‘‘(5) The requirements of paragraph (1) shall not 

22 apply in a case under chapter 13 with respect to a debtor 

23 who submits to the court a certification that the debtor 

24 has received notice that the holder of a claim secured by 


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1 the debtor’s principal residence may commence a fore2 closure on the debtor’s principal residence.’’. 

3 SEC. 102. PROHIBITING CLAIMS ARISING FROM VIOLA4 TIONS OF THE TRUTH IN LENDING ACT. 

5 Section 502(b) of title 11, United States Code, is 

6 amended— 

7 (1) in paragraph (8) by striking ‘‘or’’ at the 

8 end, 

9 (2) in paragraph (9) by striking the period at 

10 the end and inserting ‘‘; or’’, and 

11 (3) by adding at the end the following: 

12 ‘‘(10) the claim for a loan secured by a security 

13 interest in the debtor’s principal residence is subject 

14 to a remedy for rescission under the Truth in Lend15 ing Act notwithstanding the prior entry of a fore16 closure judgment, except that nothing in this para17 graph shall be construed to modify, impair, or super18 sede any other right of the debtor.’’. 

19 SEC. 103. AUTHORITY TO MODIFY CERTAIN MORTGAGES. 

20 Section 1322 of title 11, United States Code, is 

21 amended— 

22 (1) in subsection (b)— 

23 (A) by redesignating paragraph (11) as 

24 paragraph (12), 


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1 (B) in paragraph (10) by striking ‘‘and’’ at 

2 the end, and 

3 (C) by inserting after paragraph (10) the 

4 following: 

5 ‘‘(11) notwithstanding paragraph (2), with re6 spect to a claim for a loan originated before the ef7 fective date of this paragraph and secured by a secu8 rity interest in the debtor’s principal residence that 

9 is the subject of a notice that a foreclosure may be 

10 commenced with respect to such loan, modify the 

11 rights of the holder of such claim (and the rights of 

12 the holder of any claim secured by a subordinate se13 curity interest in such residence)— 

14 ‘‘(A) by providing for payment of the 

15 amount of the allowed secured claim as deter16 mined under section 506(a)(1); 

17 ‘‘(B) if any applicable rate of interest is 

18 adjustable under the terms of such loan by pro19 hibiting, reducing, or delaying adjustments to 

20 such rate of interest applicable on and after the 

21 date of filing of the plan; 

22 ‘‘(C) by modifying the terms and condi23 tions of such loan— 

24 ‘‘(i) to extend the repayment period 

25 for a period that is no longer than the 


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1 longer of 40 years (reduced by the period 

2 for which such loan has been outstanding) 

3 or the remaining term of such loan, begin4 ning on the date of the order for relief 

5 under this chapter; and 

6 ‘‘(ii) to provide for the payment of in7 terest accruing after the date of the order 

8 for relief under this chapter at a fixed an9 nual rate equal to the currently applicable 

10 average prime offer rate as of the date of 

11 the order for relief under this chapter, cor12 responding to the repayment term deter13 mined under the preceding paragraph, as 

14 published by the Federal Financial Institu15 tions Examination Council in its table enti16 tled ‘Average Prime Offer Rates—Fixed’, 

17 plus a reasonable premium for risk; and 

18 ‘‘(D) by providing for payments of such 

19 modified loan directly to the holder of the claim 

20 or, at the discretion of the court, through the 

21 trustee during the term of the plan; and’’, and 

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

23 ‘‘(g) A claim may be reduced under subsection 

24 (b)(11)(A) only on the condition that if the debtor sells 

25 the principal residence securing such claim, before comVerDate Nov 24 2008 02:27 Feb 24, 2009 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1106.IH H1106

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1 pleting all payments under the plan (or, if applicable, be2 fore receiving a discharge under section 1328(b)) and re3 ceives net proceeds from the sale of such residence, then 

4 the debtor agrees to pay to such holder not later than 15 

5 days after receiving such proceeds— 

6 ‘‘(1) if such residence is sold in the 1st year oc7 curring after the effective date of the plan, 80 per8 cent of the amount of the difference between the 

9 sales price and the amount of such claim as origi10 nally determined under section 1322(b)(11) (plus 

11 costs of sale and improvements), but not to exceed 

12 the unpaid amount of the allowed secured claim de13 termined as if such claim had not been reduced 

14 under such subsection; 

15 ‘‘(2) if such residence is sold in the 2d year oc16 curring after the effective date of the plan, 60 per17 cent of the amount of the difference between the 

18 sales price and the amount of such claim as origi19 nally determined under section 1322(b)(11) (plus 

20 costs of sale and improvements), but not to exceed 

21 the unpaid amount of the allowed secured claim de22 termined as if such claim had not been reduced 

23 under such subsection; 

24 ‘‘(3) if such residence is sold in the 3d year oc25 curring after the effective date of the plan, 40 perVerDate Nov 24 2008 02:27 Feb 24, 2009 Jkt 079200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1106.IH H1106

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1 cent of the amount of the difference between the 

2 sales price and the amount of such claim as origi3 nally determined under section 1322(b)(11) (plus 

4 costs of sale and improvements), but not to exceed 

5 the unpaid amount of the allowed secured claim de6 termined as if such claim had not been reduced 

7 under such subsection; and 

8 ‘‘(4) if such residence is sold in the 4th year oc9 curring after the effective date of the plan, 20 per10 cent of the amount of the difference between the 

11 sales price and the amount of such claim as origi12 nally determined under section 1322(b)(11) (plus 

13 costs of sale and improvements), but not to exceed 

14 the unpaid amount of the allowed secured claim de15 termined as if such claim had not been reduced 

16 under such subsection. 

17 ‘‘(h) With respect to a claim of the kind described 

18 in subsection (b)(11), the plan may not contain a modi19 fication under the authority of subsection (b)(11)— 

20 ‘‘(1) in a case commenced under this chapter 

21 after the expiration of the 15-day period beginning 

22 on the effective date of this subsection, unless— 

23 ‘‘(A) the debtor certifies that the debtor 

24 attempted, not less than 15 days before the 

25 commencement of the case, to contact the holdVerDate Nov 24 2008 02:27 Feb 24, 2009 Jkt 079200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1106.IH H1106

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1 er of such claim (or the entity collecting pay2 ments on behalf of such holder) regarding 

3 modification of the loan that is the subject of 

4 such claim; or 

5 ‘‘(B) a foreclosure sale is scheduled to 

6 occur on a date in the 30-day period beginning 

7 on the date the case is commenced; and 

8 ‘‘(2) in any other case pending under this chap9 ter, unless the debtor certifies that the debtor at10 tempted to contact the holder of such claim (or the 

11 entity collecting payments on behalf of such holder) 

12 regarding modification of the loan that is the subject 

13 of such claim, before— 

14 ‘‘(A) filing a plan under section 1321 that 

15 contains a modification under the authority of 

16 subsection (b)(11); or 

17 ‘‘(B) modifying a plan under section 1323 

18 or 1329 to contain a modification under the au19 thority of subsection (b)(11). 

20 ‘‘(i) In determining the holder’s allowed secured claim 

21 under section 506(a)(1) for purposes of subsection 

22 (b)(11)(A), the value of the debtor’s principal residence 

23 shall be the fair market value of such residence on the 

24 date such value is determined.’’. 


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1 SEC. 104. COMBATING EXCESSIVE FEES. 

2 Section 1322(c) of title 11, United States Code, is 

3 amended— 

4 (1) in paragraph (1) by striking ‘‘and’’ at the 

5 end, 

6 (2) in paragraph (2) by striking the period at 

7 the end and inserting a semicolon, and 

8 (3) by adding at the end the following: 

9 ‘‘(3) the debtor, the debtor’s property, and 

10 property of the estate are not liable for a fee, cost, 

11 or charge that is incurred while the case is pending 

12 and arises from a debt that is secured by the debt13 or’s principal residence except to the extent that— 

14 ‘‘(A) the holder of the claim for such debt 

15 files with the court and serves on the trustee, 

16 the debtor, and the debtor’s attorney (annually 

17 or, in order to permit filing consistent with 

18 clause (ii), at such more frequent periodicity as 

19 the court determines necessary) notice of such 

20 fee, cost, or charge before the earlier of— 

21 ‘‘(i) 1 year after such fee, cost, or 

22 charge is incurred; or 

23 ‘‘(ii) 60 days before the closing of the 

24 case; and 

25 ‘‘(B) such fee, cost, or charge— 


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1 ‘‘(i) is lawful under applicable non2 bankruptcy law, reasonable, and provided 

3 for in the applicable security agreement; 

4 and 

5 ‘‘(ii) is secured by property the value 

6 of which is greater than the amount of 

7 such claim, including such fee, cost, or 

8 charge; 

9 ‘‘(4) the failure of a party to give notice de10 scribed in paragraph (3) shall be deemed a waiver 

11 of any claim for fees, costs, or charges described in 

12 paragraph (3) for all purposes, and any attempt to 

13 collect such fees, costs, or charges shall constitute a 

14 violation of section 524(a)(2) or, if the violation oc15 curs before the date of discharge, of section 362(a); 

16 and 

17 ‘‘(5) a plan may provide for the waiver of any 

18 prepayment penalty on a claim secured by the debt19 or’s principal residence.’’. 

20 SEC. 105. CONFIRMATION OF PLAN. 

21 Section 1325(a) of title 11, United States Code, is 

22 amended— 

23 (1) in paragraph (5) by inserting ‘‘except as 

24 otherwise provided in section 1322(b)(11),’’ after 

25 ‘‘(5)’’, 


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1 (2) in paragraph (8) by striking ‘‘and’’ at the 

2 end, 

3 (3) in paragraph (9) by striking the period at 

4 the end and inserting a semicolon, and 

5 (4) by inserting after paragraph (9) the fol6 lowing: 

7 ‘‘(10) notwithstanding subclause (I) of para8 graph (5)(B)(i), whenever the plan modifies a claim 

9 in accordance with section 1322(b)(11), the holder 

10 of a claim whose rights are modified pursuant to 

11 section 1322(b)(11) shall retain the lien until the 

12 later of— 

13 ‘‘(A) the payment of such holder’s allowed 

14 secured claim; or 

15 ‘‘(B) completion of all payments under the 

16 plan (or, if applicable, receipt of a discharge 

17 under section 1328(b)); and 

18 ‘‘(11) whenever the plan modifies a claim in ac19 cordance with section 1322(b)(11), the court finds 

20 that such modification is in good faith and does not 

21 find that the debtor has been convicted of obtaining 

22 by actual fraud the extension, renewal, or refi23 nancing of credit that gives rise to a modified 

24 claim.’’. 


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1 SEC. 106. DISCHARGE. 

2 Section 1328(a) of title 11, United States Code, is 

3 amended— 

4 (1) by inserting ‘‘(other than payments to hold5 ers of claims whose rights are modified under sec6 tion 1322(b)(11))’’ after ‘‘paid’’, and 

7 (2) in paragraph (1) by inserting ‘‘or, to the ex8 tent of the unpaid portion of an allowed secured 

9 claim, provided for in section 1322(b)(11)’’ after 

10 ‘‘1322(b)(5)’’. 

11 SEC. 107. STANDING TRUSTEE FEES. 

12 (a) AMENDMENT TO TITLE 28.—Section 

13 586(e)(1)(B)(i) of title 28, United States Code, is amend14 ed— 

15 (1) by inserting ‘‘(I) except as provided in sub16 paragraph (II)’’ after ‘‘(i)’’, 

17 (2) by striking ‘‘or’’ at the end and inserting 

18 ‘‘and’’, and 

19 (3) by adding at the end the following: 

20 ‘‘(II) 4 percent with respect to pay21 ments received under section 1322(b)(11) 

22 of title 11 by the individual as a result of 

23 the operation of section 1322(b)(11)(D) of 

24 title 11, unless the bankruptcy court 

25 waives all fees with respect to such pay26 ments based on a determination that such 


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1 individual has income less than 150 per2 cent of the income official poverty line (as 

3 defined by the Office of Management and 

4 Budget, and revised annually in accord5 ance with section 673(2) of the Omnibus 

6 Budget Reconciliation Act of 1981) appli7 cable to a family of the size involved and 

8 payment of such fees would render the 

9 debtor’s plan infeasible.’’. 

10 (b) CONFORMING PROVISION.—The amendments 

11 made by this section shall apply to any trustee to whom 

12 the provisions of section 302(d)(3) of the Bankruptcy 

13 Judges, United States Trustees, and Family Farmer 

14 Bankruptcy Act of 1986 (Public Law 99–554; 100 Stat. 

15 3121) apply. 

16 SEC. 108. EFFECTIVE DATE; APPLICATION OF AMEND17 MENTS. 

18 (a) EFFECTIVE DATE.—Except as provided in sub19 section (b), this subtitle and the amendments made by this 

20 subtitle shall take effect on the date of the enactment of 

21 this Act. 

22 (b) APPLICATION OF AMENDMENTS.— 

23 (1) IN GENERAL.—Except as provided in para24 graph (2), the amendments made by this subtitle 

25 shall apply with respect to cases commenced under 


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1 title 11 of the United States Code before, on, or 

2 after the date of the enactment of this Act. 

3 (2) LIMITATION.—Paragraph (1) shall not 

4 apply with respect to cases closed under title 11 of 

5 the United States Code as of the date of the enact6 ment of this Act that are neither pending on appeal 

7 in, nor appealable to, any court of the United 

8 States. 

9 Subtitle B—Related Mortgage 

10 Modification Provisions 

11 SEC. 121. ADJUSTMENTS AS A RESULT OF MODIFICATION 

12 IN BANKRUPTCY OF HOUSING LOANS GUAR13 ANTEED BY THE DEPARTMENT OF VETERANS 

14 AFFAIRS. 

15 (a) IN GENERAL.—Subsection (a) of section 3732 of 

16 title 38, United States Code is amended— 

17 (1) in subsection (a)— 

18 (A) by redesignating paragraph (2) as sub19 paragraph (A) of paragraph (2), and 

20 (2) by inserting after subparagraph (A) the fol21 lowing new subparagraph: 

22 ‘‘(B) In the event that a housing loan 

23 guaranteed under this chapter is modified 

24 under the authority provided under section 

25 1322(b) of title 11, United States Code, the 


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1 Secretary may pay the holder of the obligation 

2 the unpaid balance of the obligation due as of 

3 the date of the filing of the petition under title 

4 11, United States Code, plus accrued interest, 

5 but only upon the assignment, transfer, and de6 livery to the Secretary (in a form and manner 

7 satisfactory to the Secretary) of all rights, in8 terest, claims, evidence, and records with re9 spect to the housing loan.’’. 

10 (b) MATURITY OF HOUSING LOANS.—Paragraph (1) 

11 of section (d) of section 3703 of title 38, United States 

12 Code, is amended by inserting ‘‘at the time of origination’’ 

13 after ‘‘loan’’. 

14 (c) IMPLEMENTATION.—The Secretary of Veterans 

15 Affairs may implement the amendments made by this sec16 tion through notice, procedure notice, or administrative 

17 notice. 

18 SEC. 122. PAYMENT OF FHA MORTGAGE INSURANCE BENE19 FITS. 

20 (a) IN GENERAL.—Subsection (a) of section 204 of 

21 the National Housing Act (12 U.S.C. 1710(a)) is amend22 ed— 

23 (1) in paragraph (1), by adding at the end the 

24 following new subparagraph: 


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1 ‘‘(E) MODIFICATION OF MORTGAGE IN

2 BANKRUPTCY.— 

3 ‘‘(i) AUTHORITY.—If an order is en4 tered under the authority provided under 

5 section 1322(b) of title 11, United States 

6 Code, that (a) determines the amount of 

7 an allowed secured claim under a mortgage 

8 in accordance with section 506(a)(1) of 

9 title 11, United States Code, and the 

10 amount of such allowed secured claim is 

11 less than the amount due under the mort12 gage as of the date of the filing of the peti13 tion under title 11, United States Code, or 

14 (b) reduces the interest to be paid under a 

15 mortgage in accordance with section 1325 

16 of such title, the Secretary may pay insur17 ance benefits for the mortgage as follows: 

18 ‘‘(I) FULL PAYMENT AND AS19 SIGNMENT.—The Secretary may pay 

20 the insurance benefits for the mort21 gage, but only upon the assignment, 

22 transfer, and delivery to the Secretary 

23 of all rights, interest, claims, evidence, 

24 and records with respect to the mort25 gage specified in clauses (i) through 


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1 (iv) of paragraph (1)(A). The insur2 ance benefits shall be paid in the 

3 amount equal to the original principal 

4 obligation of the mortgage (with such 

5 additions and deductions as the Sec6 retary determines are appropriate) 

7 which was unpaid upon the date of 

8 the filing of by the mortgagor of the 

9 petition under title 11 of the United 

10 States Code. Nothing in this Act may 

11 be construed to prevent the Secretary 

12 from providing insurance under this 

13 title for a mortgage that has pre14 viously been assigned to the Secretary 

15 under this subclause. The decision of 

16 whether to utilize the authority under 

17 this subclause for payment and as18 signment shall be at the election of 

19 the mortgagee, subject to such terms 

20 and conditions as the Secretary may 

21 establish. 

22 ‘‘(II) ASSIGNMENT OF UNSE23 CURED CLAIM.—The Secretary may 

24 make a partial payment of the insur25 ance benefits for any unsecured claim 


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1 under the mortgage, but only upon 

2 the assignment to the Secretary of 

3 any unsecured claim of the mortgagee 

4 against the mortgagor or others aris5 ing out of such order. Such assign6 ment shall be deemed valid irrespec7 tive of whether such claim has been or 

8 will be discharged under title 11 of 

9 the United States Code. The insur10 ance benefits shall be paid in the 

11 amount specified in subclause (I) of 

12 this clause, as such amount is reduced 

13 by the amount of the allowed secured 

14 claim. Such allowed secured claim 

15 shall continue to be insured under sec16 tion 203. 

17 ‘‘(III) INTEREST PAYMENTS.— 

18 The Secretary may make periodic pay19 ments, or a one-time payment, of in20 surance benefits for interest payments 

21 that are reduced pursuant to such 

22 order, as determined by the Secretary, 

23 but only upon assignment to the Sec24 retary of all rights and interest re25 lated to such payments. 


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1 ‘‘(ii) DELIVERY OF EVIDENCE OF

2 ENTRY OF ORDER.—Notwithstanding any 

3 other provision of this paragraph, no insur4 ance benefits may be paid pursuant to this 

5 subparagraph for a mortgage before deliv6 ery to the Secretary of evidence of the 

7 entry of the order issued pursuant to title 

8 11, United States Code, in a form satisfac9 tory to the Secretary.’’; 

10 (2) in paragraph (5), in the matter preceding 

11 subparagraph (A), by inserting after ‘‘section 520, 

12 and’’ the following: ‘‘, except as provided in para13 graph (1)(E),’’; and 

14 (3) by adding at the end the following new 

15 paragraph: 

16 ‘‘(10) LOAN MODIFICATION PROGRAM.— 

17 ‘‘(A) AUTHORITY.—The Secretary may 

18 carry out a program solely to encourage loan 

19 modifications for eligible delinquent mortgages 

20 through the payment of insurance benefits and 

21 assignment of the mortgage to the Secretary 

22 and the subsequent modification of the terms of 

23 the mortgage according to a loan modification 

24 approved by the mortgagee. 


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1 ‘‘(B) PAYMENT OF BENEFITS AND ASSIGN2 MENT.—Under the program under this para3 graph, the Secretary may pay insurance bene4 fits for a mortgage, in the amount determined 

5 in accordance with paragraph (5)(A), without 

6 reduction for any amounts modified, but only 

7 upon the assignment, transfer, and delivery to 

8 the Secretary of all rights, interest, claims, evi9 dence, and records with respect to the mortgage 

10 specified in clauses (i) through (iv) of para11 graph (1)(A). 

12 ‘‘(C) DISPOSITION.—After modification of 

13 a mortgage pursuant to this paragraph, the 

14 Secretary may provide insurance under this 

15 title for the mortgage. The Secretary may sub16 sequently— 

17 ‘‘(i) re-assign the mortgage to the 

18 mortgagee under terms and conditions as 

19 are agreed to by the mortgagee and the 

20 Secretary; 

21 ‘‘(ii) act as a Government National 

22 Mortgage Association issuer, or contract 

23 with an entity for such purpose, in order 

24 to pool the mortgage into a Government 

25 National Mortgage Association security; or 


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1 ‘‘(iii) re-sell the mortgage in accord2 ance with any program that has been es3 tablished for purchase by the Federal Gov4 ernment of mortgages insured under this 

5 title, and the Secretary may coordinate 

6 standards for interest rate reductions 

7 available for loan modification with inter8 est rates established for such purchase. 

9 ‘‘(D) LOAN SERVICING.—In carrying out 

10 the program under this section, the Secretary 

11 may require the existing servicer of a mortgage 

12 assigned to the Secretary under the program to 

13 continue servicing the mortgage as an agent of 

14 the Secretary during the period that the Sec15 retary acquires and holds the mortgage for the 

16 purpose of modifying the terms of the mort17 gage. If the mortgage is resold pursuant to sub18 paragraph (C)(iii), the Secretary may provide 

19 for the existing servicer to continue to service 

20 the mortgage or may engage another entity to 

21 service the mortgage.’’. 

22 (b) AMENDMENT TO PARTIAL CLAIM AUTHORITY.— 

23 Paragraph (1) of section 230(b) of the National Housing 

24 Act (12 U.S.C. 1715u(b)(1)) is amended by striking ‘‘12 


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1 of the monthly mortgage payments’’ and inserting ‘‘30 

2 percent of the unpaid principal balance of the mortgage’’. 

3 (c) IMPLEMENTATION.—The Secretary of Housing 

4 and Urban Development may implement the amendments 

5 made by this section through notice or mortgagee letter. 

6 SEC. 123. ADJUSTMENTS AS RESULT OF MODIFICATION OF 

7 RURAL SINGLE FAMILY HOUSING LOANS IN 

8 BANKRUPTCY. 

9 (a) GUARANTEED RURAL HOUSING LOANS.—Sub10 section (h) of section 502 of the Housing Act of 1949 (42 

11 U.S.C. 1472(h)) is amended— 

12 (1) in paragraph (7)— 

13 (A) in subparagraph (A), by inserting be14 fore the period at the end the following: ‘‘, un15 less the maturity date of the loan is modified in 

16 a bankruptcy proceeding or at the discretion of 

17 the Secretary’’; and 

18 (B) in subparagraph (B), by inserting be19 fore the semicolon the following: ‘‘, unless such 

20 rate is modified in a bankruptcy proceeding’’; 

21 (2) by redesignating paragraphs (13) and (14) 

22 as paragraphs (14) and (15), respectively; and 

23 (3) by inserting after paragraph (12) the fol24 lowing new paragraph: 


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1 ‘‘(13) PAYMENT OF GUARANTEE.—In addition 

2 to all other authorities to pay a guarantee claim, the 

3 Secretary may also pay the guaranteed portion of 

4 any losses incurred by the holder of a note or the 

5 servicer resulting from a modification of a note by 

6 a bankruptcy proceeding.’’. 

7 (b) INSURED RURAL HOUSING LOANS.—Subsection 

8 (j) of section 517 of the Housing Act of 1949 (42 U.S.C. 

9 1487(j)) is amended— 

10 (1) by redesignating paragraphs (2) through 

11 (7) as paragraphs (3) through (8), respectively; and 

12 (2) by inserting after paragraph (1) the fol13 lowing new paragraph: 

14 ‘‘(2) to pay for losses incurred by holders or 

15 servicers in the event of a modification pursuant to 

16 a bankruptcy proceeding;’’. 

17 (c) IMPLEMENTATION.—The Secretary of Agriculture 

18 may implement the amendments made by this section 

19 through notice, procedure notice, or administrative notice. 

20 SEC. 124. UNENFORCEABILITY OF CERTAIN PROVISION AS 

21 BEING CONTRARY TO PUBLIC POLICY. 

22 No provision in any investment contract between a 

23 servicer and a securitization vehicle or investor in effect 

24 as of the date of enactment of this Act that requires excess 

25 bankruptcy losses that exceed a certain dollar amount on 


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1 residential mortgages to be borne by classes of certificates 

2 on a pro rata basis that refers to types of bankruptcy 

3 losses that could not have been incurred under the law 

4 in effect at the time such contract was entered into shall 

5 be enforceable, as such provision shall be contrary to pub6 lic policy. Notwithstanding this section, such reference 

7 to types of bankruptcy losses that could have been in8 curred under the law in effect at the time such contract 

9 was entered into shall be enforceable. 

10 TITLE II—FORECLOSURE MITI11 GATION AND CREDIT AVAIL12 ABILITY 

13 SEC. 201. SERVICER SAFE HARBOR FOR MORTGAGE LOAN 

14 MODIFICATIONS. 

15 (a) SAFE HARBOR.— 

16 (1) LOAN MODIFICATIONS AND WORKOUT

17 PLANS.—Notwithstanding any other provision of 

18 law, and notwithstanding any investment contract 

19 between a servicer and a securitization vehicle or in20 vestor, a servicer that acts consistent with the duty 

21 set forth in section 129A(a) of Truth in Lending Act 

22 (15 U.S.C. 1639a) shall not be liable for entering 

23 into a loan modification, workout, or other loss miti24 gation plan, including, but not limited to, disposition 


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1 with respect to any such mortgage that meets all of 

2 the criteria set forth in paragraph (2)(B) to— 

3 (A) any person, based on that person’s 

4 ownership of a residential mortgage loan or any 

5 interest in a pool of residential mortgage loans 

6 or in securities that distribute payments out of 

7 the principal, interest and other payments in 

8 loans on the pool; 

9 (B) any person who is obligated pursuant 

10 to a derivatives instrument to make payments 

11 determined in reference to any loan or any in12 terest referred to in subparagraph (A); or 

13 (C) any person that insures any loan or 

14 any interest referred to in subparagraph (A) 

15 under any law or regulation of the United 

16 States or any law or regulation of any State or 

17 political subdivision of any State. 

18 (2) ABILITY TO MODIFY MORTGAGES.— 

19 (A) ABILITY.—Notwithstanding any other 

20 provision of law, and notwithstanding any in21 vestment contract between a servicer and a 

22 securitization vehicle or investor, a servicer— 

23 (i) shall not be limited in the ability 

24 to modify mortgages, the number of mort25 gages that can be modified, the frequency 


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1 of loan modifications, or the range of per2 missible modifications; and 

3 (ii) shall not be obligated to repur4 chase loans from or otherwise make pay5 ments to the securitization vehicle on ac6 count of a modification, workout, or other 

7 loss mitigation plan for a residential mort8 gage or a class of residential mortgages 

9 that constitute a part or all of the mort10 gages in the securitization vehicle, 

11 if any mortgage so modified meets all of the cri12 teria set forth in subparagraph (B). 

13 (B) CRITERIA.—The criteria under this 

14 subparagraph with respect to a mortgage are as 

15 follows: 

16 (i) Default on the payment of such 

17 mortgage has occurred or is reasonably 

18 foreseeable. 

19 (ii) The property securing such mort20 gage is occupied by the mortgagor of such 

21 mortgage. 

22 (iii) The servicer reasonably and in 

23 good faith believes that the anticipated re24 covery on the principal outstanding obliga25 tion of the mortgage under the particular 


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1 modification or workout plan or other loss 

2 mitigation action will exceed, on a net 

3 present value basis, the anticipated recov4 ery on the principal outstanding obligation 

5 of the mortgage to be realized through 

6 foreclosure. 

7 (3) APPLICABILITY.—This subsection shall 

8 apply only with respect to modifications, workouts, 

9 and other loss mitigation plans initiated before Jan10 uary 1, 2012. 

11 (b) REPORTING.—Each servicer that engages in loan 

12 modifications or workout plans subject to the safe harbor 

13 in subsection (a) shall report to the Secretary on a regular 

14 basis regarding the extent, scope and results of the 

15 servicer’s modification activities. The Secretary shall pre16 scribe regulations specifying the form, content, and timing 

17 of such reports. 

18 (c) DEFINITION OF SECURITIZATION VEHICLES.— 

19 For purposes of this section, the term ‘‘securitization vehi20 cle’’ means a trust, corporation, partnership, limited liabil21 ity entity, special purpose entity, or other structure that— 

22 (1) is the issuer, or is created by the issuer, of 

23 mortgage pass-through certificates, participation cer24 tificates, mortgage-backed securities, or other similar 


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1 securities backed by a pool of assets that includes 

2 residential mortgage loans; and 

3 (2) holds such mortgages. 

4 SEC. 202. CHANGES TO HOPE FOR HOMEOWNERS PRO5 GRAM. 

6 (a) PROGRAM CHANGES.—Section 257 of the Na7 tional Housing Act (12 U.S.C. 1715z–23) is amended— 

8 (1) in subsection (c)— 

9 (A) in the heading for paragraph (1), by 

10 striking ‘‘THE BOARD’’ and inserting ‘‘SEC11 RETARY’’; 

12 (B) in paragraph (1), by striking ‘‘Board’’ 

13 inserting ‘‘Secretary, after consultation with the 

14 Board,’’; and 

15 (C) by adding after paragraph (2) the fol16 lowing: 

17 ‘‘(3) DUTIES OF BOARD.—The Board shall ad18 vise the Secretary regarding the establishment and 

19 implementation of the HOPE for Homeowners Pro20 gram.’’. 

21 (2) by striking ‘‘Board’’ each place such term 

22 appears in subsections (e), (h)(1), (h)(3), (j), (l), 

23 (n), (s)(3), and (v) and inserting ‘‘Secretary’’; 

24 (3) in subsection (e)— 


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1 (A) by striking paragraph (1) and insert2 ing the following: 

3 ‘‘(1) BORROWER CERTIFICATION.— 

4 ‘‘(A) NO INTENTIONAL DEFAULT OR

5 FALSE INFORMATION.—The mortgagor shall 

6 provide a certification to the Secretary that the 

7 mortgagor has not intentionally defaulted on 

8 the existing mortgage or mortgages and has not 

9 knowingly, or willfully and with actual knowl10 edge, furnished material information known to 

11 be false for the purpose of obtaining the eligible 

12 mortgage to be insured. 

13 ‘‘(B) LIABILITY FOR REPAYMENT.—The 

14 mortgagor shall agree in writing that the mort15 gagor shall be liable to repay to the Secretary 

16 any direct financial benefit achieved from the 

17 reduction of indebtedness on the existing mort18 gage or mortgages on the residence refinanced 

19 under this section derived from misrepresenta20 tions made by the mortgagor in the certifi21 cations and documentation required under this 

22 paragraph, subject to the discretion of the Sec23 retary.’’; 


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1 (B) in paragraph (7), by striking the semi2 colon and all that follows through ‘‘new second 

3 lien’’; 

4 (C) in paragraph (9)— 

5 (i) by striking ‘‘by procuring (A) an 

6 income tax return transcript of the income 

7 tax return of the mortgagor, or (B)’’ and 

8 inserting ‘‘in accordance with procedures 

9 and standards that the Secretary shall es10 tablish, which may include requiring the 

11 mortgagee to procure’’; and 

12 (ii) by striking ‘‘and by any other 

13 method, in accordance with procedures and 

14 standards that the Board shall establish’’; 

15 and 

16 (D) by adding after paragraph (11) the 

17 following new paragraph: 

18 ‘‘(12) BAN ON MILLIONAIRES.—The mortgagor 

19 shall not have a net worth, as of the date the mort20 gagor first applies for a mortgage to be insured 

21 under the Program under this section, that exceeds 

22 $1,000,000.’’; 

23 (4) in subsection (h)(2)— 


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1 (A) by striking ‘‘The Board shall prohibit 

2 the Secretary from paying’’ and inserting ‘‘The 

3 Secretary shall not pay’’; and 

4 (B) by inserting after the period at the end 

5 the following: ‘‘In implementing this provision 

6 with respect to a failure by a mortgagor to 

7 make a first payment, the Secretary shall estab8 lish policies and timing of endorsements as con9 sistent as is possible with endorsement policies 

10 established with respect to mortgages insured 

11 under section 203(b)’’; 

12 (5) in subsection (i)— 

13 (A) by inserting ‘‘, after weighing maxi14 mization of participation with consideration of 

15 collection of premiums,’’ after ‘‘Secretary 

16 shall’’; 

17 (B) in paragraph (1), by striking ‘‘equal to 

18 3 percent’’ and inserting ‘‘not more than 2 per19 cent’’; and 

20 (C) in paragraph (2), by striking ‘‘equal to 

21 1.5 percent’’ and inserting ‘‘not more than 1 

22 percent’’; 

23 (6) in subsection (k)— 

24 (A) by striking the subsection heading and 

25 inserting ‘‘EXIT FEE’’; 


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1 (B) in paragraph (1), in the matter pre2 ceding subparagraph (A), by striking ‘‘such sale 

3 or refinancing’’ and inserting ‘‘the mortgage 

4 being insured under this section’’; and 

5 (C) in paragraph (2), by striking ‘‘and the 

6 mortgagor’’ and all that follows through the 

7 end and inserting ‘‘may, upon any sale or dis8 position of the property to which the mortgage 

9 relates, be entitled to up to 50 percent of ap10 preciation, up to the appraised value of the 

11 home at the time when the mortgage being refi12 nanced under this section was originally made. 

13 The Secretary may share any amounts received 

14 under this paragraph with the holder of the eli15 gible mortgage refinanced under this section.’’; 

16 (7) in the heading for subsection (n), by strik17 ing ‘‘THE BOARD’’ and inserting ‘‘SECRETARY’’; 

18 (8) in subsection (p), by striking ‘‘Under the di19 rection of the Board, the’’ and inserting ‘‘The’’; 

20 (9) in subsection (s)— 

21 (A) in the first sentence of paragraph (2), 

22 by striking ‘‘Board of Directors of’’ and insert23 ing ‘‘Advisory Board for’’; and 


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1 (B) in paragraph (3)(A)(ii), by striking 

2 ‘‘subsection (e)(1)(B) and such other’’ and in3 serting ‘‘such’’; 

4 (10) in subsection (v), by inserting after the pe5 riod at the end the following: ‘‘The Secretary shall 

6 conform documents, forms, and procedures for mort7 gages insured under this section to those in place for 

8 mortgages insured under section 203(b) to the max9 imum extent possible consistent with the require10 ments of this section.’’; and 

11 (11) by adding at the end the following new 

12 subsections: 

13 ‘‘(x) PAYMENT TO EXISTING LOAN SERVICER.—The 

14 Secretary may establish a payment to the servicer of the 

15 existing senior mortgage for every loan insured under the 

16 HOPE for Homeowners Program in an amount, for each 

17 such loan, that does not exceed $1,000. 

18 ‘‘(y) AUCTIONS.—The Secretary, with the concur19 rence of the Board, shall, if feasible, establish a structure 

20 and organize procedures for an auction to refinance eligi21 ble mortgages on a wholesale or bulk basis.’’. 

22 (b) REDUCING TARP FUNDS TO OFFSET COSTS OF

23 PROGRAM CHANGES.—Paragraph (3) of section 115(a) of 

24 the Emergency Economic Stabilization Act of 2008 (12 

25 U.S.C. 5225) is amended by inserting ‘‘, as such amount 


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1 is reduced by $2,316,000,000,’’ after 

2 ‘‘$700,000,000,000’’. 

3 SEC. 203. REQUIREMENTS FOR FHA-APPROVED MORTGA4 GEES. 

5 (a) MORTGAGEE REVIEW BOARD.—Paragraph (2) of 

6 section 202(c) of the National Housing Act (12 U.S.C. 

7 1708(c)) is amended— 

8 (1) in subparagraph (E), by inserting ‘‘and’’ 

9 after the semicolon; 

10 (2) in subparagraph (F), by striking ‘‘; and’’ 

11 and inserting a period; and 

12 (3) by striking subparagraph (G). 

13 (b) LIMITATIONS ON PARTICIPATION AND MORT14 GAGEE APPROVAL AND USE OF NAME.—Section 202 of 

15 the National Housing Act (12 U.S.C. 1708) is amended— 

16 (1) by redesignating subsections (d), (e), and 

17 (f) as subsections (e), (f), and (g), respectively; 

18 (2) by inserting after subsection (c) the fol19 lowing new subsection: 

20 ‘‘(d) LIMITATIONS ON PARTICIPATION IN ORIGINA21 TION AND MORTGAGEE APPROVAL.— 

22 ‘‘(1) REQUIREMENT.—Any person or entity 

23 that is not approved by the Secretary to serve as a 

24 mortgagee, as such term is defined in subsection 

25 (c)(7), shall not participate in the origination of an 


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1 FHA-insured loan except as authorized by the Sec2 retary. 

3 ‘‘(2) ELIGIBILITY FOR APPROVAL.—In order to 

4 be eligible for approval by the Secretary, an appli5 cant mortgagee shall not be, and shall not have any 

6 officer, partner, director, principal, or employee of 

7 the applicant mortgagee who is— 

8 ‘‘(A) currently suspended, debarred, under 

9 a limited denial of participation (LDP), or oth10 erwise restricted under part 24 or 25 of title 24 

11 of the Code of Federal Regulations, or any suc12 cessor regulations to such parts, or under simi13 lar provisions of any other Federal agency; 

14 ‘‘(B) under indictment for, or has been 

15 convicted of, an offense that reflects adversely 

16 upon the applicant’s integrity, competence or 

17 fitness to meet the responsibilities of an ap18 proved mortgagee; 

19 ‘‘(C) subject to unresolved findings con20 tained in a Department of Housing and Urban 

21 Development or other governmental audit, in22 vestigation, or review; 

23 ‘‘(D) engaged in business practices that do 

24 not conform to generally accepted practices of 


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1 prudent mortgagees or that demonstrate irre2 sponsibility; 

3 ‘‘(E) convicted of, or who has pled guilty 

4 or nolo contendre to, a felony related to partici5 pation in the real estate or mortgage loan in6 dustry— 

7 ‘‘(i) during the 7-year period pre8 ceding the date of the application for li9 censing and registration; or 

10 ‘‘(ii) at any time preceding such date 

11 of application, if such felony involved an 

12 act of fraud, dishonesty, or a breach of 

13 trust, or money laundering; 

14 ‘‘(F) in violation of provisions of the 

15 S.A.F.E. Mortgage Licensing Act of 2008 (12 

16 U.S.C. 5101 et seq.) or any applicable provision 

17 of State law; or 

18 ‘‘(G) in violation of any other requirement 

19 as established by the Secretary.’’; and 

20 (3) by adding at the end the following new sub21 section: 

22 ‘‘(h) USE OF NAME.—The Secretary shall, by regula23 tion, require each mortgagee approved by the Secretary 

24 for participation in the FHA mortgage insurance pro25 grams of the Secretary— 


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1 ‘‘(1) to use the business name of the mortgagee 

2 that is registered with the Secretary in connection 

3 with such approval in all advertisements and pro4 motional materials, as such terms are defined by the 

5 Secretary, relating to the business of such mort6 gagee in such mortgage insurance programs; and 

7 ‘‘(2) to maintain copies of all such advertise8 ments and promotional materials, in such form and 

9 for such period as the Secretary requires.’’. 

10 (c) CHANGE OF STATUS.—The National Housing Act 

11 is amended by striking section 532 (12 U.S.C. 1735f–10) 

12 and inserting the following new section: 

13 ‘‘SEC. 532. CHANGE OF MORTGAGEE STATUS. 

14 ‘‘(a) NOTIFICATION.—Upon the occurrence of any ac15 tion described in subsection (b), an approved mortgagee 

16 shall immediately submit to the Secretary, in writing, noti17 fication of such occurrence. 

18 ‘‘(b) ACTIONS.—The actions described in this sub19 section are as follows: 

20 ‘‘(1) The debarment, suspension of a Limited 

21 Denial of Participation (LDP), or application of 

22 other sanctions, fines, or penalties applied to the 

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1 derwriter, or loan originator of the mortgagee pursu2 ant to applicable provisions of State or Federal law. 

3 ‘‘(2) The revocation of a State-issued mortgage 

4 loan originator license issued pursuant to the 

5 S.A.F.E. Mortgage Licensing Act of 2008 (12 

6 U.S.C. 5101 et seq.) or any other similar declaration 

7 of ineligibility pursuant to State law.’’. 

8 (d) CIVIL MONEY PENALTIES.—Section 536 of the 

9 National Housing Act (12 U.S.C. 1735f–14) is amend10 ed— 

11 (1) in subsection (b)— 

12 (A) in paragraph (1)— 

13 (i) in the matter preceding subpara14 graph (A), by inserting ‘‘or any of its own15 ers, officers, or directors’’ after ‘‘mort16 gagee or lender’’; 

17 (ii) in subparagraph (H), by striking 

18 ‘‘title I’’ and all that follows through ‘‘Act 

19 of 1989)’’ and inserting ‘‘title I or II’’; and 

20 (iii) by inserting after subparagraph 

21 (J) the following: 

22 ‘‘(K) Violation of section 202(d) of this 

23 Act (12 U.S.C. 1708(d)).’’; and 

24 (B) in paragraph (2)— 


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1 (i) in subparagraph (B), by striking 

2 ‘‘or’’ at the end; 

3 (ii) in subparagraph (C), by striking 

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

5 and 

6 (iii) by adding at the end the fol7 lowing new subparagraph: 

8 ‘‘(D) causing or participating in any of the 

9 violations set forth in paragraph (1) of this sub10 section.’’; and 

11 (2) in subsection (g), by striking ‘‘The term’’ 

12 and all that follows through the end of the sentence 

13 and inserting ‘‘For purposes of this section, a person 

14 acts knowingly when a person has actual knowledge 

15 of acts or should have known of the acts.’’. 

16 (e) EXPANDED REVIEW OF FHA MORTGAGEE AP17 PLICANTS AND NEWLY APPROVED MORTGAGEES.—Not 

18 later than the expiration of the 3-month period beginning 

19 upon the date of the enactment of this Act, the Secretary 

20 of Housing and Urban Development shall— 

21 (1) expand the existing process for reviewing 

22 new applicants for approval for participation in the 

23 mortgage insurance programs of the Secretary for 

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1 pose of identifying applicants who represent a high 

2 risk to the Mutual Mortgage Insurance Fund; and 

3 (2) implement procedures that, for mortgagees 

4 approved during the 12-month period ending upon 

5 such date of enactment— 

6 (A) expand the number of mortgages origi7 nated by such mortgagees that are reviewed for 

8 compliance with applicable laws, regulations, 

9 and policies; and 

10 (B) include a process for random reviews 

11 of such mortgagees and a process for reviews 

12 that is based on volume of mortgages originated 

13 by such mortgagees. 

14 SEC. 204. ENHANCEMENT OF LIQUIDITY AND STABILITY OF 

15 INSURED DEPOSITORY INSTITUTIONS TO EN16 SURE AVAILABILITY OF CREDIT AND REDUC17 TION OF FORECLOSURES. 

18 (a) PERMANENT INCREASE IN DEPOSIT INSUR19 ANCE.— 

20 (1) AMENDMENTS TO FEDERAL DEPOSIT IN21 SURANCE ACT.—Effective upon the date of the en22 actment of this Act, section 11(a) of the Federal De23 posit Insurance Act (12 U.S.C. 1821(a)) is amend24 ed— 


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1 (A) in paragraph (1)(E), by striking 

2 ‘‘$100,000’’ and inserting ‘‘$250,000’’; 

3 (B) in paragraph (1)(F)(i), by striking 

4 ‘‘2010’’ and inserting ‘‘2015’’; 

5 (C) in subclause (I) of paragraph 

6 (1)(F)(i), by striking ‘‘$100,000’’ and inserting 

7 ‘‘$250,000’’; 

8 (D) in subclause (II) of paragraph 

9 (1)(F)(i), by striking ‘‘the calendar year pre10 ceding the date this subparagraph takes effect 

11 under the Federal Deposit Insurance Reform 

12 Act of 2005’’ and inserting ‘‘calendar year 

13 2008’’; and 

14 (E) in paragraph (3)(A), by striking ‘‘, ex15 cept that $250,000 shall be substituted for 

16 $100,000 wherever such term appears in such 

17 paragraph’’. 

18 (2) AMENDMENT TO FEDERAL CREDIT UNION

19 ACT.—Section 207(k) of the Federal Credit Union 

20 Act (12 U.S.C. 1787(k)) is amended— 

21 (A) in paragraph (3)— 

22 (i) by striking the opening quotation 

23 mark before ‘‘$250,000’’; 

24 (ii) by striking ‘‘, except that 

25 $250,000 shall be substituted for $100,000 


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1 wherever such term appears in such sec2 tion’’; and 

3 (iii) by striking the closing quotation 

4 mark after the closing parenthesis; and 

5 (B) in paragraph (5), by striking 

6 ‘‘$100,000’’ and inserting ‘‘$250,000’’. 

7 (3) REPEAL OF EESA PROVISION.—Section 136 

8 of the Emergency Economic Stabilization Act (12 

9 U.S.C. 5241) is hereby repealed. 

10 (b) EXTENSION OF RESTORATION PLAN PERIOD.— 

11 Section 7(b)(3)(E)(ii) of the Federal Deposit Insurance 

12 Act (12 U.S.C. 1817(b)(3)(E)(ii)) is amended by striking 

13 ‘‘5-year period’’ and inserting ‘‘8-year period’’. 

14 (c) FDIC AND NCUA BORROWING AUTHORITY.— 

15 (1) FDIC.—Section 14(a) of the Federal De16 posit Insurance Act (12 U.S.C. 1824(a)) is amended 

17 by striking ‘‘$30,000,000,000’’ and inserting 

18 ‘‘$100,000,000,000’’. 

19 (2) NCUA.—Section 203(d)(1) of the Federal 

20 Credit Union Act (12 U.S.C. 1783(d)(1)) is amend21 ed by striking ‘‘$100,000,000’’ and inserting 

22 ‘‘$6,000,000,000’’. 

23 (d) EXPANDING SYSTEMIC RISK SPECIAL ASSESS24 MENTS.—Section 13(c)(4)(G)(ii) of the Federal Deposit 


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1 Insurance Act (12 U.S.C. 1823(c)(4)(G)(ii)) is amended 

2 to read as follows: 

3 ‘‘(ii) REPAYMENT OF LOSS.— 

4 ‘‘(I) IN GENERAL.—The Corpora5 tion shall recover the loss to the De6 posit Insurance Fund arising from 

7 any action taken or assistance pro8 vided with respect to an insured de9 pository institution under clause (i) 

10 from 1 or more special assessments on 

11 insured depository institutions, deposi12 tory institution holding companies 

13 (with the concurrence of the Secretary 

14 of the Treasury with respect to hold15 ing companies), or both, as the Cor16 poration determines to be appropriate. 

17 ‘‘(II) TREATMENT OF DEPOSI18 TORY INSTITUTION HOLDING COMPA19 NIES.—For purposes of this clause, 

20 sections 7(c)(2) and 18(h) shall apply 

21 to depository institution holding com22 panies as if they were insured deposi23 tory institutions. 

24 ‘‘(III) REGULATIONS.—The Cor25 poration shall prescribe such regulaVerDate Nov 24 2008 02:27 Feb 24, 2009 Jkt 079200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\H1106.IH H1106

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1 tions as it deems necessary to imple2 ment this clause. In prescribing such 

3 regulations, defining terms, and set4 ting the appropriate assessment rate 

5 or rates, the Corporation shall estab6 lish rates sufficient to cover the losses 

7 incurred as a result of the actions of 

8 the Corporation under clause (i) and 

9 shall consider: the types of entities 

10 that benefit from any action taken or 

11 assistance provided under this sub12 paragraph; economic conditions, the 

13 effects on the industry, and such 

14 other factors as the Corporation 

15 deems appropriate and relevant to the 

16 action taken or the assistance pro17 vided. Any funds so collected that ex18 ceed actual losses shall be placed in 

19 the Deposit Insurance Fund.’’. 

20 (e) ESTABLISHMENT OF A NATIONAL CREDIT UNION

21 SHARE INSURANCE FUND RESTORATION PLAN PE22 RIOD.—Section 202(c)(2) of the Federal Credit Union Act 

23 (12 U.S.C. 1782(c)(2)) is amended by adding at the end 

24 the following new subparagraph: 

25 ‘‘(D) FUND RESTORATION PLANS.— 


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1 ‘‘(i) IN GENERAL.—Whenever— 

2 ‘‘(I) the Board projects that the 

3 equity ratio of the Fund will, within 6 

4 months of such determination, fall 

5 below the minimum amount specified 

6 in subparagraph (C) for the des7 ignated equity ratio; or 

8 ‘‘(II) the equity ratio of the Fund 

9 actually falls below the minimum 

10 amount specified in subparagraph (C) 

11 for the equity ratio without any deter12 mination under sub-clause (I) having 

13 been made, 

14 the Board shall establish and implement a 

15 Share Insurance Fund restoration plan 

16 within 90 days that meets the require17 ments of clause (ii) and such other condi18 tions as the Board determines to be appro19 priate. 

20 ‘‘(ii) REQUIREMENTS OF RESTORA21 TION PLAN.—A Share Insurance Fund res22 toration plan meets the requirements of 

23 this clause if the plan provides that the eq24 uity ratio of the Fund will meet or exceed 

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1 graph (C) for the designated equity ratio 

2 before the end of the 5-year period begin3 ning upon the implementation of the plan 

4 (or such longer period as the Board may 

5 determine to be necessary due to extraor6 dinary circumstances). 

7 ‘‘(iii) TRANSPARENCY.—Not more 

8 than 30 days after the Board establishes 

9 and implements a restoration plan under 

10 clause (i), the Board shall publish in the 

11 Federal Register a detailed analysis of the 

12 factors considered and the basis for the ac13 tions taken with regard to the plan.’’. 

Æ 


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