I 

111TH CONGRESS 

1ST SESSION H. R. 1331 

To replace the HOPE for Homeowners Program with a new program developed and implemented by the Secretary of Housing and Urban Development. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 5, 2009 

Mrs. CAPITO (for herself, Mr. BACHUS, Mrs. BIGGERT, and Mr. SESSIONS) 

introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To replace the HOPE for Homeowners Program with a 

new program developed and implemented by the Secretary of Housing and Urban Development. 

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 ‘‘Responsible, Equitable, 

5 and Fair Insurance for Homeowners Act of 2009’’ or the 

6 ‘‘REFI for Homeowners Act of 2009’’. 


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1 SEC. 2. REPLACEMENT OF HOPE FOR HOMEOWNERS PRO2 GRAM WITH PROGRAM FOR INSURANCE OF 

3 HOMEOWNERSHIP RETENTION MORTGAGES. 

4 (a) REPLACEMENT OF PROGRAM.—Title II of the 

5 National Housing Act (12 U.S.C. 1707 et seq.) is amend6 ed— 

7 (1) in section 257 (12 U.S.C. 1715z–23), as 

8 added by section 1402(a) of Public Law 110–289— 

9 (A) by striking subsections (a) through 

10 (k); and 

11 (B) by striking subsections (n) through 

12 (v); 

13 (2) by redesignating section 257 (12 U.S.C. 

14 1715z–24), as added by section 2124 of Public Law 

15 110–289, as section 259; and 

16 (3) by inserting before such section 259 (as so 

17 redesignated) the following new section: 

18 ‘‘SEC. 258. INSURANCE OF HOMEOWNERSHIP RETENTION 

19 MORTGAGES. 

20 ‘‘(a) AUTHORITY.—The Secretary shall, subject only 

21 to the absence of qualified requests for insurance under 

22 this section and to the limitations under sections 257(m) 

23 and 531(a), make commitments to insure and insure any 

24 mortgage covering a 1- to 4-family residence that is made 

25 for the purpose of paying or prepaying outstanding obliga26 tions under an existing mortgage or mortgages on the resiVerDate Nov 24 2008 02:11 Mar 07, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1331.IH H1331

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1 dence if the mortgage being insured under this section 

2 meets the requirements of this section, as established by 

3 the Secretary. The Secretary shall establish such mortgage 

4 insurance products, and requirements and standards, in 

5 accordance with this section as the Secretary considers ap6 propriate to carry out this section and shall prescribe such 

7 regulations and provide such guidance as may be nec8 essary or appropriate to implement such products, require9 ments, and standards. 

10 ‘‘(b) REQUIREMENTS OF INSURED MORTGAGE.—To 

11 be eligible for insurance under this section, a mortgage 

12 shall comply with all of the following requirements: 

13 ‘‘(1) PRIMARY RESIDENCE.—The mortgagor 

14 under the mortgage to be insured under this section 

15 shall provide documentation satisfactory in the de16 termination of the Secretary to prove that the resi17 dence covered by the mortgage to be insured under 

18 this section is occupied by the mortgagor as the pri19 mary residence of the mortgagor, and that such resi20 dence is the only residence in which the mortgagor 

21 has any present ownership interest. 

22 ‘‘(2) TROUBLED HOMEOWNER.—The mortgagor 

23 under the mortgage to be insured under this section 

24 shall be the mortgagor under the existing mortgage 


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1 to be refinanced by the insured mortgage and 

2 shall— 

3 ‘‘(A) be in default on the mortgagor’s obli4 gations under the existing mortgage; 

5 ‘‘(B) be in danger of defaulting, as deter6 mined in accordance with standards established 

7 by the Secretary, on the mortgagor’s obligations 

8 under the existing mortgage; or 

9 ‘‘(C) have a remaining principal obligation 

10 amount under such existing mortgage that ex11 ceeds, at the time of the commitment for mort12 gage insurance under this section, the appraised 

13 value of the property that is subject to such ex14 isting mortgage. 

15 ‘‘(3) PROHIBITION ON REFINANCING LIAR

16 LOANS.—The Secretary may not insure a mortgage 

17 under this section if the mortgagor under such mort18 gage has knowingly, or willfully and with actual 

19 knowledge, furnished any material information re20 garding the income or financial worth of the mort21 gagor that is known to be false for the purpose of 

22 obtaining the existing mortgage that is to be refi23 nanced by the mortgage to be insured under this 

24 section. 


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1 ‘‘(4) PROHIBITION ON REFINANCING ZERO2 DOWN LOANS AND LOANS WITH EQUITY RE3 MOVED.—The Secretary may not insure a mortgage 

4 under this section if— 

5 ‘‘(A) under the existing mortgage to be re6 financed, the mortgagor did not make any pay7 ment on account of the property (or any pay8 ment exceeding such nominal amount as the 

9 Secretary may establish), in cash or its equiva10 lent, in connection with acquisition of the prop11 erty; or 

12 ‘‘(B) during the term of the existing mort13 gage to be refinanced, the mortgagor withdrew 

14 all, or substantially all (in accordance with such 

15 standards and guidelines as the Secretary shall 

16 establish) of any equity of the mortgagor in the 

17 property subject to such existing mortgage. 

18 ‘‘(5) TERMS.—The mortgage to be insured 

19 under this section shall have such terms and condi20 tions as the Secretary shall provide, except that such 

21 mortgage shall— 

22 ‘‘(A) have a term to maturity not exceed23 ing 40 years; and 

24 ‘‘(B) bear interest at an annual rate that 

25 is fixed for the entire term of the mortgage. 


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1 ‘‘(6) REQUIRED WAIVER OF PREPAYMENT PEN2 ALTIES AND FEES.—All penalties for prepayment or 

3 refinancing of the existing mortgage, and all fees 

4 and penalties related to default or delinquency on 

5 the existing mortgage, shall be waived or forgiven. 

6 ‘‘(7) SHARED APPRECIATION.—The Secretary 

7 shall provide that, with respect to each mortgage in8 sured under this section, upon any sale or disposi9 tion of the property subject to such mortgage occur10 ring during the 5-year period beginning on the date 

11 of the insurance of the mortgage, to the extent of 

12 any principal write- down or interest rate subsidy 

13 provided in connection with the mortgage, the Sec14 retary and the mortgagee shall be entitled to a per15 centage of any appreciation in value of such prop16 erty that has occurred since the date that such 

17 mortgage was insured under this section, which per18 centage shall decrease over time, and the mortgagor 

19 shall be entitled to the remainder of any such appre20 ciation. 

21 ‘‘(8) MAXIMUM LOAN AMOUNT.—The principal 

22 obligation amount of the mortgage to be insured 

23 under this section shall not exceed the applicable 

24 dollar amount limitation in effect under section 

25 305(a)(2) of the Federal Home Loan Mortgage CorVerDate Nov 24 2008 02:11 Mar 07, 2009 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1331.IH H1331

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1 poration (12 U.S.C. 1452(a)(2)) for a property of 

2 the applicable size for the area in which the property 

3 is located. 

4 ‘‘(9) TERM; INTEREST RATE.—The refinanced 

5 eligible mortgage to be insured shall— 

6 ‘‘(A) bear interest at a single rate that is 

7 fixed for the entire term of the mortgage; and 

8 ‘‘(B) have a maturity of not less than 30 

9 years from the date of the beginning of amorti10 zation of such refinanced eligible mortgage. 

11 ‘‘(c) EXIT FEE.—The Secretary may establish a fee, 

12 charge, or other mechanism for recovering, upon sale or 

13 other disposition of the property that is subject to the 

14 mortgage insured under this section or upon the subse15 quent refinancing of the mortgage, a portion of the equity 

16 or appreciation in the property. 

17 ‘‘(d) GNMA PRICING.—In order to facilitate favor18 able pricing for loans insured under this section, the 

19 Board of Governors of the Federal Reserve System, the 

20 Secretary of the Treasury, the Federal National Mortgage 

21 Association, and the Federal Home Loan Mortgage Cor22 poration are authorized to purchase mortgage-backed se23 curities guaranteed by the Government National Mortgage 

24 Association that are backed by loans originated under this 

25 section or whole loans originated and purchased under this 


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1 section. The Government National Mortgage Association 

2 is authorized to hold, sell, and securitize whole loans origi3 nated under this section. 

4 ‘‘(e) SUNSET.—The Secretary may not enter into any 

5 new commitment to insure any refinanced eligible mort6 gage, or newly insure any refinanced eligible mortgage 

7 pursuant to this section after the expiration of the 3-year 

8 period beginning upon the date of the enactment of this 

9 section.’’. 

10 (b) USE OF AGGREGATE INSURANCE AUTHORITY

11 AND FUNDS UNDER HOPE FOR HOMEOWNERS PRO12 GRAM.—Section 257 of the National Housing Act (12 

13 U.S.C. 1715z–24), as added by section 1402(a) of Public 

14 Law 110–289), is amended— 

15 (1) in subsection (l)(1), by striking ‘‘this sec16 tion’’ and inserting ‘‘section 258’’; 

17 (2) in subsection (m), by striking ‘‘this section’’ 

18 and inserting ‘‘section 258’’; 

19 (3) in subsection (w)— 

20 (A) in paragraphs (1) and (3), by striking 

21 ‘‘HOPE for Homeowners Program’’ each place 

22 such term appears and inserting ‘‘mortgage in23 surance program under section 258’’; and 

24 (B) in paragraph (4) by striking ‘‘HOPE 

25 for Homeowners Program in accordance with 


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1 subsections (i) and (k)’’ and inserting ‘‘mort2 gage insurance program under section 258’’; 

3 (4) by redesignating subsections (l), (m), and 

4 (w) as subsections (a), (b), and (c), respectively; and 

5 (5) by striking the section heading and insert6 ing the following: ‘‘HOPE FUND AND HOPE

7 BONDS.’’ 

8 (c) REDUCING TARP FUNDS TO OFFSET COSTS OF

9 PROGRAM.—Paragraph (3) of section 115(a) of the Emer10 gency Economic Stabilization Act of 2008 (12 U.S.C. 

11 5225) is amended by inserting ‘‘, as such amount is re12 duced by $1,000,000,000,’’ after ‘‘$700,000,000,000’’. 

Æ 


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