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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1295 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 1295

 To mitigate mortgage foreclosures, facilitate and include fairness in 
  housing recovery, and combat mortgage fraud, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 4, 2009

Mrs. Biggert (for herself, Mr. Bachus, Mr. Neugebauer, Mrs. Capito, Ms. 
 Ginny Brown-Waite of Florida, Mr. Rogers of Michigan, Mr. Jones, Mr. 
Shimkus, Mr. Rooney, Mr. Sessions, Mr. Turner, Mr. Smith of Texas, Mr. 
  Paulsen, Mrs. Bono Mack, Mr. Lance, Mr. Bilbray, Mr. Reichert, Mr. 
 Castle, Mr. McCaul, Mr. Johnson of Illinois, Mrs. Miller of Michigan, 
and Mrs. Schmidt) introduced the following bill; which was referred to 
the Committee on Financial Services, and in addition to the Committees 
 on Ways and Means and the Judiciary, 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 mitigate mortgage foreclosures, facilitate and include fairness in 
  housing recovery, and combat mortgage fraud, and for other purposes.

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

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Fairness in 
Housing Recovery Act of 2009''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
Sec. 2. Servicer safe harbor for mortgage loan modifications.
Sec. 3. Replacement of HOPE for Homeowners Program with program for 
                            insurance of homeownership retention 
                            mortgages.
Sec. 4. Expanding and preserving homeownership through counseling.
Sec. 5. Requirements for FHA-approved mortgagees.
Sec. 6. Commission on the Foreclosure and Mortgage Lending Crisis.
Sec. 7. Authorization of appropriations for combating mortgage fraud.
Sec. 8. Enhancement of liquidity and stability of insured depository 
                            institutions to ensure availability of 
                            credit and reduction of foreclosures.
Sec. 9. Prohibition on the receipt of common stock and the exercise of 
                            stock voting power.
Sec. 10. Treatment of gain on disposition of subsidized residences.
Sec. 11. Refundable tax credit for residences purchased during 2009 or 
                            2010.
Sec. 12. Conditions on mortgage relief.

SEC. 2. SERVICER SAFE HARBOR FOR MORTGAGE LOAN MODIFICATIONS.

    (a) Safe Harbor.--
            (1) Loan modifications and workout plans.--Notwithstanding 
        any other provision of law, and notwithstanding any investment 
        contract between a servicer and a securitization vehicle or 
        investor, a servicer that acts consistent with the duty set 
        forth in section 129A(a) of Truth in Lending Act (15 U.S.C. 
        1639a) shall not be liable for entering into a loan 
        modification, workout, or other loss mitigation plan, 
        including, but not limited to, disposition, including any 
        modification or refinancing undertaken pursuant to standard 
        loan modification, sale, or disposition guidelines issued by 
        the Secretary of the Treasury or his designee under the 
        Emergency Economic Stabilization Act of 2008, with respect to 
        any such mortgage that meets all of the criteria set forth in 
        paragraph (2)(B) to--
                    (A) any person, based on that person's ownership of 
                a residential mortgage loan or any interest in a pool 
                of residential mortgage loans or in securities that 
                distribute payments out of the principal, interest and 
                other payments in loans on the pool;
                    (B) any person who is obligated pursuant to a 
                derivatives instrument to make payments determined in 
                reference to any loan or any interest referred to in 
                subparagraph (A); or
                    (C) any person that insures any loan or any 
                interest referred to in subparagraph (A) under any law 
                or regulation of the United States or any law or 
                regulation of any State or political subdivision of any 
                State.
            (2) Ability to modify mortgages.--
                    (A) Ability.--Notwithstanding any other provision 
                of law, and notwithstanding any investment contract 
                between a servicer and a securitization vehicle or 
                investor, a servicer--
                            (i) shall not be limited in the ability to 
                        modify mortgages, the number of mortgages that 
                        can be modified, the frequency of loan 
                        modifications, or the range of permissible 
                        modifications; and
                            (ii) shall not be obligated to repurchase 
                        loans from or otherwise make payments to the 
                        securitization vehicle on account of a 
                        modification, workout, or other loss mitigation 
                        plan for a residential mortgage or a class of 
                        residential mortgages that constitute a part or 
                        all of the mortgages in the securitization 
                        vehicle,
                if any mortgage so modified meets all of the criteria 
                set forth in subparagraph (B).
                    (B) Criteria.--The criteria under this subparagraph 
                with respect to a mortgage are as follows:
                            (i) Default on the payment of such mortgage 
                        has occurred or is reasonably foreseeable.
                            (ii) The property securing such mortgage is 
                        occupied by the mortgagor of such mortgage.
                            (iii) The servicer reasonably and in good 
                        faith believes that the anticipated recovery on 
                        the principal outstanding obligation of the 
                        mortgage under the particular modification or 
                        workout plan or other loss mitigation action 
                        will exceed, on a net present value basis, the 
                        anticipated recovery on the principal 
                        outstanding obligation of the mortgage to be 
                        realized through foreclosure.
            (3) Applicability.--This subsection shall apply only with 
        respect to modifications, workouts, and other loss mitigation 
        plans initiated before January 1, 2012.
    (b) Reporting.--Each servicer that engages in loan modifications or 
workout plans subject to the safe harbor in subsection (a) shall report 
to the Secretary on a regular basis regarding the extent, scope and 
results of the servicer's modification activities. The Secretary shall 
prescribe regulations specifying the form, content, and timing of such 
reports.
    (c) Legal Costs.--If an unsuccessful action is brought against a 
servicer by any person described in subparagraph (A), (B), or (C) of 
subsection (a)(1), such person shall bear any actual legal costs of the 
servicer, including reasonable attorney fees and expert witness fees, 
incurred in good faith in such action, as determined by the court.
    (d) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (2) Securitization vehicle.--The term ``securitization 
        vehicle'' means a trust, corporation, partnership, limited 
        liability entity, special purpose entity, or other structure 
        that--
                    (A) is the issuer, or is created by the issuer, of 
                mortgage pass-through certificates, participation 
                certificates, mortgage-backed securities, or other 
                similar securities backed by a pool of assets that 
                includes residential mortgage loans; and
                    (B) holds such mortgages.

SEC. 3. REPLACEMENT OF HOPE FOR HOMEOWNERS PROGRAM WITH PROGRAM FOR 
              INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

    (a) Replacement of Program.--Title II of the National Housing Act 
(12 U.S.C. 1707 et seq.) is amended--
            (1) in section 257 (12 U.S.C. 1715z-23), as added by 
        section 1402(a) of Public Law 110-289--
                    (A) by striking subsections (a) through (k); and
                    (B) by striking subsections (n) through (v);
            (2) by redesignating section 257 (12 U.S.C. 1715z-24), as 
        added by section 2124 of Public Law 110-289, as section 259; 
        and
            (3) by inserting before such section 259 (as so 
        redesignated) the following new section:

``SEC. 258. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

    ``(a) Authority.--The Secretary shall, subject only to the absence 
of qualified requests for insurance under this section and to the 
limitations under sections 257(m) and 531(a), make commitments to 
insure and insure any mortgage covering a 1- to 4-family residence that 
is made for the purpose of paying or prepaying outstanding obligations 
under an existing mortgage or mortgages on the residence if the 
mortgage being insured under this section meets the requirements of 
this section, as established by the Secretary. The Secretary shall 
establish such mortgage insurance products, and requirements and 
standards, in accordance with this section as the Secretary considers 
appropriate to carry out this section and shall prescribe such 
regulations and provide such guidance as may be necessary or 
appropriate to implement such products, requirements, and standards.
    ``(b) Requirements of Insured Mortgage.--To be eligible for 
insurance under this section, a mortgage to be insured under this 
section shall comply with all of the following requirements:
            ``(1) Primary residence.--The mortgagor under the mortgage 
        to be insured shall provide documentation satisfactory in the 
        determination of the Secretary to prove that the residence 
        covered by the mortgage to be insured under this section is 
        occupied by the mortgagor as the primary residence of the 
        mortgagor, and that such residence is the only residence in 
        which the mortgagor has any present ownership interest.
            ``(2) Troubled homeowner.--The mortgagor under the mortgage 
        to be insured shall be the mortgagor under the existing 
        mortgage to be refinanced by the insured mortgage and shall--
                    ``(A) be in default on the mortgagor's obligations 
                under the existing mortgage;
                    ``(B) be in danger of defaulting, as determined in 
                accordance with standards established by the Secretary, 
                on the mortgagor's obligations under the existing 
                mortgage; or
                    ``(C) have a remaining principal obligation amount 
                under such existing mortgage that exceeds, at the time 
                of the commitment for mortgage insurance under this 
                section, the appraised value of the property that is 
                subject to such existing mortgage.
            ``(3) Prohibition on refinancing liar loans.--The Secretary 
        may not insure a mortgage under this section if the mortgagor 
        under such mortgage has knowingly, or willfully and with actual 
        knowledge, furnished any material information regarding the 
        income or financial worth of the mortgagor that is known to be 
        false for the purpose of obtaining the existing mortgage that 
        is to be refinanced by the mortgage to be insured under this 
        section.
            ``(4) Exclusion of zero down payment loans.--In connection 
        with the origination of the senior existing mortgage to be 
        refinanced with the mortgage insured under this section, the 
        mortgagor shall have made a down payment, in cash or its 
        equivalent, on account of the property purchased under such 
        senior existing mortgage.
            ``(5) Exclusion of no-doc loans.--The existing senior 
        mortgage to be refinanced with the mortgage insured under this 
        section shall have been originated only pursuant to the 
        mortgagor providing documentation sufficient to verify the 
        amount and source of the mortgagor's income.
            ``(6) Prohibition on refinancing zero-down loans and loans 
        with equity removed.--The Secretary may not insure a mortgage 
        under this section if--
                    ``(A) under the existing mortgage to be refinanced, 
                the mortgagor did not make any payment on account of 
                the property (or any payment exceeding such nominal 
                amount as the Secretary may establish), in cash or its 
                equivalent, in connection with acquisition of the 
                property; or
                    ``(B) during the term of the existing mortgage to 
                be refinanced, the mortgagor withdrew all, or 
                substantially all (in accordance with such standards 
                and guidelines as the Secretary shall establish) of any 
                equity of the mortgagor in the property subject to such 
                existing mortgage.
            ``(7) Terms.--The mortgage to be insured under this section 
        shall have such terms and conditions as the Secretary shall 
        provide, except that such mortgage shall--
                    ``(A) have a term to maturity not exceeding 40 
                years; and
                    ``(B) bear interest at an annual rate that is fixed 
                for the entire term of the mortgage.
            ``(8) Required waiver of prepayment penalties and fees.--
        All penalties for prepayment or refinancing of the existing 
        mortgage, and all fees and penalties related to default or 
        delinquency on the existing mortgage, shall be waived or 
        forgiven.
            ``(9) Shared appreciation.--The Secretary shall provide 
        that, with respect to each mortgage insured under this section, 
        upon any sale or disposition of the property subject to such 
        mortgage occurring during the 5-year period beginning on the 
        date of the insurance of the mortgage, to the extent of any 
        principal write-down or interest rate subsidy provided in 
        connection with the mortgage, the Secretary and the mortgagee 
        shall be entitled to a percentage of any appreciation in value 
        of such property that has occurred since the date that such 
        mortgage was insured under this section, which percentage shall 
        decrease over time, and the mortgagor shall be entitled to the 
        remainder of any such appreciation.
            ``(10) Maximum loan amount.--The principal obligation 
        amount of the mortgage to be insured under this section shall 
        not exceed the applicable dollar amount limitation in effect 
        under section 305(a)(2) of the Federal Home Loan Mortgage 
        Corporation (12 U.S.C. 1452(a)(2)) for a property of the 
        applicable size for the area in which the property is located .
            ``(11) Term; interest rate.--The refinanced eligible 
        mortgage to be insured shall--
                    ``(A) bear interest at a single rate that is fixed 
                for the entire term of the mortgage; and
                    ``(B) have a maturity of not less than 30 years 
                from the date of the beginning of amortization of such 
                refinanced eligible mortgage.
    ``(c) Exit Fee.--The Secretary may establish a fee, charge, or 
other mechanism for recovering, upon sale or other disposition of the 
property that is subject to the mortgage insured under this section or 
upon the subsequent refinancing of the mortgage, a portion of the 
equity or appreciation in the property.
    ``(d) GNMA Pricing.--In order to facilitate favorable pricing for 
loans insured under this section, the Board of Governors of the Federal 
Reserve System, the Secretary of the Treasury, the Federal National 
Mortgage Association, and the Federal Home Loan Mortgage Corporation 
are authorized to purchase mortgage-backed securities guaranteed by the 
Government National Mortgage Association that are backed by loans 
originated under this section or whole loans originated and purchased 
under this section. The Government National Mortgage Association is 
authorized to hold, sell, and securitize whole loans originated under 
this section.
    ``(e) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Existing mortgage.--The term `existing mortgage' 
        means, with respect to a mortgage insured under this section, a 
        mortgage that is to be extinguished, and paid or prepaid, from 
        the proceeds of the mortgage insured under this section.
            ``(2) Senior existing mortgage.--The term `senior existing 
        mortgage' means, with respect to a mortgage insured under this 
        section, the existing mortgage that has superior priority.
    ``(f) Sunset.--The Secretary may not enter into any new commitment 
to insure any refinanced eligible mortgage, or newly insure any 
refinanced eligible mortgage pursuant to this section after the 
expiration of the 3-year period beginning upon the date of the 
enactment of this section.''.
    (b) Use of Aggregate Insurance Authority and Funds Under HOPE for 
Homeowners Program.--Section 257 of the National Housing Act (12 U.S.C. 
1715z-24), as added by section 1402(a) of Public Law 110-289), is 
amended--
            (1) in subsection (l)(1), by striking ``this section'' and 
        inserting ``section 258'';
            (2) in subsection (m), by striking ``this section'' and 
        inserting ``section 258'';
            (3) in subsection (w)--
                    (A) in paragraphs (1) and (3), by striking ``HOPE 
                for Homeowners Program'' each place such term appears 
                and inserting ``mortgage insurance program under 
                section 258''; and
                    (B) in paragraph (4) by striking ``HOPE for 
                Homeowners Program in accordance with subsections (i) 
                and (k)'' and inserting ``mortgage insurance program 
                under section 258'';
            (4) by redesignating subsections (l), (m), and (w) as 
        subsections (a), (b), and (c), respectively; and
            (5) by striking the section heading and inserting the 
        following: ``hope fund and hope bonds.''
    (c) Reducing TARP Funds To Offset Costs of Program.--Paragraph (3) 
of section 115(a) of the Emergency Economic Stabilization Act of 2008 
(12 U.S.C. 5225) is amended by inserting ``, as such amount is reduced 
by $1,000,000,000,'' after ``$700,000,000,000''.

SEC. 4. EXPANDING AND PRESERVING HOMEOWNERSHIP THROUGH COUNSELING.

    (a) Establishment of Office of Housing Counseling.--Section 4 of 
the Department of Housing and Urban Development Act (42 U.S.C. 3533) is 
amended by adding at the end the following new subsection:
    ``(g) Office of Housing Counseling.--
            ``(1) Establishment.--There is established, in the Office 
        of the Secretary, the Office of Housing Counseling.
            ``(2) Director.--There is established the position of 
        Director of Housing Counseling. The Director shall be the head 
        of the Office of Housing Counseling and shall be appointed by 
        the Secretary. Such position shall be a career-reserved 
        position in the Senior Executive Service.
            ``(3) Functions.--
                    ``(A) In general.--The Director shall have ultimate 
                responsibility within the Department, except for the 
                Secretary, for all activities and matters relating to 
                homeownership counseling and rental housing counseling, 
                including--
                            ``(i) research, grant administration, 
                        public outreach, and policy development 
                        relating to such counseling; and
                            ``(ii) establishment, coordination, and 
                        administration of all regulations, 
                        requirements, standards, and performance 
                        measures under programs and laws administered 
                        by the Department that relate to housing 
                        counseling, homeownership counseling (including 
                        maintenance of homes), mortgage-related 
                        counseling (including home equity conversion 
                        mortgages and credit protection options to 
                        avoid foreclosure), and rental housing 
                        counseling, including the requirements, 
                        standards, and performance measures relating to 
                        housing counseling.
                    ``(B) Specific functions.--The Director shall carry 
                out the functions assigned to the Director and the 
                Office under this section and any other provisions of 
                law. Such functions shall include establishing rules 
                necessary for--
                            ``(i) the counseling procedures under 
                        section 106(g)(1) of the Housing and Urban 
                        Development Act of 1968 (12 U.S.C. 
                        1701x(h)(1));
                            ``(ii) carrying out all other functions of 
                        the Secretary under section 106(g) of the 
                        Housing and Urban Development Act of 1968, 
                        including the establishment, operation, and 
                        publication of the availability of the toll-
                        free telephone number under paragraph (2) of 
                        such section;
                            ``(iii) carrying out section 5 of the Real 
                        Estate Settlement Procedures Act of 1974 (12 
                        U.S.C. 2604) for home buying information 
                        booklets prepared pursuant to such section;
                            ``(iv) carrying out the certification 
                        program under section 106(e) of the Housing and 
                        Urban Development Act of 1968 (12 U.S.C. 
                        1701x(e));
                            ``(v) carrying out the assistance program 
                        under section 106(a)(4) of the Housing and 
                        Urban Development Act of 1968, including 
                        criteria for selection of applications to 
                        receive assistance;
                            ``(vi) carrying out any functions regarding 
                        abusive, deceptive, or unscrupulous lending 
                        practices relating to residential mortgage 
                        loans that the Secretary considers appropriate, 
                        which shall include conducting the study under 
                        section 4(e) of the Fairness in Housing 
                        Recovery Act of 2009;
                            ``(vii) providing for operation of the 
                        advisory committee established under paragraph 
                        (4) of this subsection;
                            ``(viii) collaborating with community-based 
                        organizations with expertise in the field of 
                        housing counseling; and
                            ``(ix) providing for the building of 
                        capacity to provide housing counseling services 
                        in areas that lack sufficient services.
            ``(4) Advisory committee.--
                    ``(A) In general.--The Secretary shall appoint an 
                advisory committee to provide advice regarding the 
                carrying out of the functions of the Director.
                    ``(B) Members.--Such advisory committee shall 
                consist of not more than 12 individuals, and the 
                membership of the committee shall equally represent all 
                aspects of the mortgage and real estate industry, 
                including consumers.
                    ``(C) Terms.--Except as provided in subparagraph 
                (D), each member of the advisory committee shall be 
                appointed for a term of 3 years. Members may be 
                reappointed at the discretion of the Secretary.
                    ``(D) Terms of initial appointees.--As designated 
                by the Secretary at the time of appointment, of the 
                members first appointed to the advisory committee, 4 
                shall be appointed for a term of 1 year and 4 shall be 
                appointed for a term of 2 years.
                    ``(E) Prohibition of pay; travel expenses.--Members 
                of the advisory committee shall serve without pay, but 
                shall receive travel expenses, including per diem in 
                lieu of subsistence, in accordance with applicable 
                provisions under subchapter I of chapter 57 of title 5, 
                United States Code.
                    ``(F) Advisory role only.--The advisory committee 
                shall have no role in reviewing or awarding housing 
                counseling grants.
            ``(5) Scope of homeownership counseling.--In carrying out 
        the responsibilities of the Director, the Director shall ensure 
        that homeownership counseling provided by, in connection with, 
        or pursuant to any function, activity, or program of the 
        Department addresses the entire process of homeownership, 
        including the decision to purchase a home, the selection and 
        purchase of a home, issues arising during or affecting the 
        period of ownership of a home (including refinancing, default 
        and foreclosure, and other financial decisions), and the sale 
        or other disposition of a home.''.
    (b) Counseling Procedures.--
            (1) In general.--Section 106 of the Housing and Urban 
        Development Act of 1968 (12 U.S.C. 1701x) is amended by adding 
        at the end the following new subsection:
    ``(g) Procedures and Activities.--
            ``(1) Counseling procedures.--
                    ``(A) In general.--The Secretary shall establish, 
                coordinate, and monitor the administration by the 
                Department of Housing and Urban Development of the 
                counseling procedures for homeownership counseling and 
                rental housing counseling provided in connection with 
                any program of the Department, including all 
                requirements, standards, and performance measures that 
                relate to homeownership and rental housing counseling.
                    ``(B) Homeownership counseling.--For purposes of 
                this subsection and as used in the provisions referred 
                to in this subparagraph, the term `homeownership 
                counseling' means counseling related to homeownership 
                and residential mortgage loans. Such term includes 
                counseling related to homeownership and residential 
                mortgage loans that is provided pursuant to--
                            ``(i) section 105(a)(20) of the Housing and 
                        Community Development Act of 1974 (42 U.S.C. 
                        5305(a)(20));
                            ``(ii) in the United States Housing Act of 
                        1937--
                                    ``(I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                    ``(II) section 8(y)(1)(D) (42 
                                U.S.C. 1437f(y)(1)(D));
                                    ``(III) section 18(a)(4)(D) (42 
                                U.S.C. 1437p(a)(4)(D));
                                    ``(IV) section 23(c)(4) (42 U.S.C. 
                                1437u(c)(4));
                                    ``(V) section 32(e)(4) (42 U.S.C. 
                                1437z-4(e)(4));
                                    ``(VI) section 33(d)(2)(B) (42 
                                U.S.C. 1437z-5(d)(2)(B));
                                    ``(VII) sections 302(b)(6) and 
                                303(b)(7) (42 U.S.C. 1437aaa-1(b)(6), 
                                1437aaa-2(b)(7)); and
                                    ``(VIII) section 304(c)(4) (42 
                                U.S.C. 1437aaa-3(c)(4));
                            ``(iii) section 302(a)(4) of the American 
                        Homeownership and Economic Opportunity Act of 
                        2000 (42 U.S.C. 1437f note);
                            ``(iv) sections 233(b)(2) and 258(b) of the 
                        Cranston-Gonzalez National Affordable Housing 
                        Act (42 U.S.C. 12773(b)(2), 12808(b));
                            ``(v) this section and section 101(e) of 
                        the Housing and Urban Development Act of 1968 
                        (12 U.S.C. 1701x, 1701w(e));
                            ``(vi) section 220(d)(2)(G) of the Low-
                        Income Housing Preservation and Resident 
                        Homeownership Act of 1990 (12 U.S.C. 
                        4110(d)(2)(G));
                            ``(vii) sections 422(b)(6), 423(b)(7), 
                        424(c)(4), 442(b)(6), and 443(b)(6) of the 
                        Cranston-Gonzalez National Affordable Housing 
                        Act (42 U.S.C. 12872(b)(6), 12873(b)(7), 
                        12874(c)(4), 12892(b)(6), and 12893(b)(6));
                            ``(viii) section 491(b)(1)(F)(iii) of the 
                        McKinney-Vento Homeless Assistance Act (42 
                        U.S.C. 11408(b)(1)(F)(iii));
                            ``(ix) sections 202(3) and 810(b)(2)(A) of 
                        the Native American Housing and Self-
                        Determination Act of 1996 (25 U.S.C. 4132(3), 
                        4229(b)(2)(A));
                            ``(x) in the National Housing Act--
                                    ``(I) in section 203 (12 U.S.C. 
                                1709), the penultimate undesignated 
                                paragraph of paragraph (2) of 
                                subsection (b), subsection (c)(2)(A), 
                                and subsection (r)(4);
                                    ``(II) subsections (a) and (c)(3) 
                                of section 237 (12 U.S.C. 1715z-2); and
                                    ``(III) subsections (d)(2)(B) and 
                                (m)(1) of section 255 (12 U.S.C. 1715z-
                                20);
                            ``(xi) section 502(h)(4)(B) of the Housing 
                        Act of 1949 (42 U.S.C. 1472(h)(4)(B)); and
                            ``(xii) section 508 of the Housing and 
                        Urban Development Act of 1970 (12 U.S.C. 1701z-
                        7).
                    ``(C) Rental housing counseling.--For purposes of 
                this subsection, the term `rental housing counseling' 
                means counseling related to rental of residential 
                property, which may include counseling regarding future 
                homeownership opportunities and providing referrals for 
                renters and prospective renters to entities providing 
                counseling and shall include counseling related to such 
                topics that is provided pursuant to--
                            ``(i) section 105(a)(20) of the Housing and 
                        Community Development Act of 1974 (42 U.S.C. 
                        5305(a)(20));
                            ``(ii) in the United States Housing Act of 
                        1937--
                                    ``(I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                    ``(II) section 18(a)(4)(D) (42 
                                U.S.C. 1437p(a)(4)(D));
                                    ``(III) section 23(c)(4) (42 U.S.C. 
                                1437u(c)(4));
                                    ``(IV) section 32(e)(4) (42 U.S.C. 
                                1437z-4(e)(4));
                                    ``(V) section 33(d)(2)(B) (42 
                                U.S.C. 1437z-5(d)(2)(B)); and
                                    ``(VI) section 302(b)(6) (42 U.S.C. 
                                1437aaa-1(b)(6));
                            ``(iii) section 233(b)(2) of the Cranston-
                        Gonzalez National Affordable Housing Act (42 
                        U.S.C. 12773(b)(2));
                            ``(iv) section 106 of the Housing and Urban 
                        Development Act of 1968 (12 U.S.C. 1701x);
                            ``(v) section 422(b)(6) of the Cranston-
                        Gonzalez National Affordable Housing Act (42 
                        U.S.C. 12872(b)(6));
                            ``(vi) section 491(b)(1)(F)(iii) of the 
                        McKinney-Vento Homeless Assistance Act (42 
                        U.S.C. 11408(b)(1)(F)(iii));
                            ``(vii) sections 202(3) and 810(b)(2)(A) of 
                        the Native American Housing and Self-
                        Determination Act of 1996 (25 U.S.C. 4132(3), 
                        4229(b)(2)(A)); and
                            ``(viii) the rental assistance program 
                        under section 8 of the United States Housing 
                        Act of 1937 (42 U.S.C. 1437f).
            ``(2) Standards for materials.--The Secretary, in 
        conjunction with the advisory committee established under 
        section 4(g)(4) of the Department of Housing and Urban 
        Development Act (42 U.S.C. 3533(g)(4), shall establish 
        standards for materials and forms to be used, as appropriate, 
        by organizations providing homeownership counseling services, 
        including any recipients of assistance pursuant to subsection 
        (a)(4).
            ``(3) Mortgage software systems.--
                    ``(A) Certification.--The Secretary shall provide 
                for the certification of various computer software 
                programs for consumers to use in evaluating different 
                residential mortgage loan proposals. The Secretary 
                shall require, for such certification, that the 
                mortgage software systems take into account--
                            ``(i) the consumer's financial situation 
                        and the cost of maintaining a home, including 
                        insurance, taxes, and utilities;
                            ``(ii) the amount of time the consumer 
                        expects to remain in the home or expected time 
                        to maturity of the loan; and
                            ``(iii) such other factors as the Secretary 
                        considers appropriate to assist the consumer in 
                        evaluating whether to pay points, to lock in an 
                        interest rate, to select an adjustable or fixed 
                        rate loan, to select a conventional or 
                        government-insured or guaranteed loan and to 
                        make other choices during the loan application 
                        process.
                If the Secretary determines that available existing 
                software is inadequate to assist consumers during the 
                residential mortgage loan application process, the 
                Secretary shall arrange for the development by private 
                sector software companies of new mortgage software 
                systems that meet the Secretary's specifications.
                    ``(B) Use and initial availability.--Such certified 
                computer software programs shall be used to supplement, 
                not replace, housing counseling. The Secretary shall 
                provide that such programs are initially used only in 
                connection with the assistance of housing counselors 
                certified pursuant to subsection (e).
                    ``(C) Availability.--After a period of initial 
                availability under subparagraph (B) as the Secretary 
                considers appropriate, the Secretary shall take 
                reasonable steps to make mortgage software systems 
                certified pursuant to this paragraph widely available 
                through the Internet and at public locations, including 
                public libraries, senior-citizen centers, public 
                housing sites, offices of public housing agencies that 
                administer rental housing assistance vouchers, and 
                housing counseling centers.
            ``(4) National public service multimedia campaigns to 
        promote housing counseling.--
                    ``(A) In general.--The Director of Housing 
                Counseling shall develop, implement, and conduct 
                national public service multimedia campaigns designed 
                to make persons facing mortgage foreclosure, persons 
                considering a subprime mortgage loan to purchase a 
                home, elderly persons, persons who face language 
                barriers, low-income persons, and other potentially 
                vulnerable consumers aware that it is advisable, before 
                seeking or maintaining a residential mortgage loan, to 
                obtain homeownership counseling from an unbiased and 
                reliable sources and that such homeownership counseling 
                is available, including through programs sponsored by 
                the Secretary of Housing and Urban Development.
                    ``(B) Contact information.--Each segment of the 
                multimedia campaign under subparagraph (A) shall 
                publicize the toll-free telephone number and web site 
                of the Department of Housing and Urban Development 
                through which persons seeking housing counseling can 
                locate a housing counseling agency in their State that 
                is certified by the Secretary of Housing and Urban 
                Development and can provide advice on buying a home, 
                renting, defaults, foreclosures, credit issues, and 
                reverse mortgages.
                    ``(C) Authorization of appropriations.--There are 
                authorized to be appropriated to the Secretary, not to 
                exceed $3,000,000 for fiscal years 2009, 2010, and 
                2011, for the development, implementation, and 
                conducting of national public service multimedia 
                campaigns under this paragraph.
            ``(5) Education programs.--The Secretary shall provide 
        advice and technical assistance to States, units of general 
        local government, and nonprofit organizations regarding the 
        establishment and operation of, including assistance with the 
        development of content and materials for, educational programs 
        to inform and educate consumers, particularly those most 
        vulnerable with respect to residential mortgage loans (such as 
        elderly persons, persons facing language barriers, low-income 
        persons, and other potentially vulnerable consumers), regarding 
        home mortgages, mortgage refinancing, home equity loans, and 
        home repair loans.''.
            (2) Conforming amendments to grant program for 
        homeownership counseling organizations.--Section 
        106(c)(5)(A)(ii) of the Housing and Urban Development Act of 
        1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is amended--
                    (A) in subclause (III), by striking ``and'' at the 
                end;
                    (B) in subclause (IV) by striking the period at the 
                end and inserting ``; and''; and
                    (C) by inserting after subclause (IV) the following 
                new subclause:
                                    ``(V) notify the housing or 
                                mortgage applicant of the availability 
                                of mortgage software systems provided 
                                pursuant to subsection (g)(3).''.
    (c) Grants for Housing Counseling Assistance.--Section 106(a) of 
the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(a)(3)) 
is amended by adding at the end the following new paragraph:
    ``(4) Homeownership and Rental Counseling Assistance.--
            ``(A) In general.--The Secretary shall make financial 
        assistance available under this paragraph to States, units of 
        general local governments, and nonprofit organizations 
        providing homeownership or rental counseling (as such terms are 
        defined in subsection (g)(1)).
            ``(B) Qualified entities.--The Secretary shall establish 
        standards and guidelines for eligibility of organizations 
        (including governmental and nonprofit organizations) to receive 
        assistance under this paragraph.
            ``(C) Distribution.--Assistance made available under this 
        paragraph shall be distributed in a manner that encourages 
        efficient and successful counseling programs.
            ``(D) Authorization of appropriations.--There are 
        authorized to be appropriated $45,000,000 for each of fiscal 
        years 2009 through 2012 for--
                    ``(i) the operations of the Office of Housing 
                Counseling of the Department of Housing and Urban 
                Development;
                    ``(ii) the responsibilities of the Secretary under 
                paragraphs (2) through (5) of subsection (g); and
                    ``(iii) assistance pursuant to this paragraph for 
                entities providing homeownership and rental 
                counseling.''.
    (d) Requirements To Use HUD-Certified Counselors Under HUD 
Programs.--Section 106(e) of the Housing and Urban Development Act of 
1968 (12 U.S.C. 1701x(e)) is amended--
            (1) by striking paragraph (1) and inserting the following 
        new paragraph:
            ``(1) Requirement for assistance.--An organization may not 
        receive assistance for counseling activities under subsection 
        (a)(1)(iii), (a)(2), (a)(4), (c), or (d) of this section, or 
        under section 101(e), unless the organization, or the 
        individuals through which the organization provides such 
        counseling, has been certified by the Secretary under this 
        subsection as competent to provide such counseling.'';
            (2) in paragraph (2)--
                    (A) by inserting ``and for certifying 
                organizations'' before the period at the end of the 
                first sentence; and
                    (B) in the second sentence by striking ``for 
                certification'' and inserting ``, for certification of 
                an organization, that each individual through which the 
                organization provides counseling shall demonstrate, 
                and, for certification of an individual,'';
            (3) in paragraph (3), by inserting ``organizations and'' 
        before ``individuals'';
            (4) by redesignating paragraph (3) as paragraph (5); and
            (5) by inserting after paragraph (2) the following new 
        paragraphs:
            ``(3) Requirement under hud programs.--Any homeownership 
        counseling or rental housing counseling (as such terms are 
        defined in subsection (g)(1)) required under, or provided in 
        connection with, any program administered by the Department of 
        Housing and Urban Development shall be provided only by 
        organizations or counselors certified by the Secretary under 
        this subsection as competent to provide such counseling.
            ``(4) Outreach.--The Secretary shall take such actions as 
        the Secretary considers appropriate to ensure that individuals 
        and organizations providing homeownership or rental housing 
        counseling are aware of the certification requirements and 
        standards of this subsection and of the training and 
        certification programs under subsection (f).''.
    (e) Study of Defaults and Foreclosures.--The Secretary of Housing 
and Urban Development shall conduct an extensive study of the root 
causes of default and foreclosure of home loans, using as much 
empirical data as are available. The study shall also examine the role 
of escrow accounts in helping prime and nonprime borrowers to avoid 
defaults and foreclosures. Not later than 12 months after the date of 
the enactment of this Act, the Secretary shall submit to the Congress a 
preliminary report regarding the study. Not later than 24 months after 
such date of enactment, the Secretary shall submit a final report 
regarding the results of the study, which shall include any recommended 
legislation relating to the study, and recommendations for best 
practices and for a process to identify populations that need 
counseling the most.
    (f) Definitions for Counseling-Related Programs.--Section 106 of 
the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x), as 
amended by the preceding provisions of this section, is further amended 
by adding at the end the following new subsection:
    ``(h) Definitions.--For purposes of this section:
            ``(1) Nonprofit organization.--The term `nonprofit 
        organization' has the meaning given such term in section 104(5) 
        of the Cranston-Gonzalez National Affordable Housing Act (42 
        U.S.C. 12704(5)), except that subparagraph (D) of such section 
        shall not apply for purposes of this section.
            ``(2) State.--The term `State' means each of the several 
        States, the Commonwealth of Puerto Rico, the District of 
        Columbia, the Commonwealth of the Northern Mariana Islands, 
        Guam, the Virgin Islands, American Samoa, the Trust Territories 
        of the Pacific, or any other possession of the United States.
            ``(3) Unit of general local government.--The term `unit of 
        general local government' means any city, county, parish, town, 
        township, borough, village, or other general purpose political 
        subdivision of a State.''.
    (g) Updating and Simplification of Mortgage Information Booklet.--
Section 5 of the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2604) is amended--
            (1) in the section heading, by striking ``special'' and 
        inserting ``home buying'';
            (2) by striking subsections (a) and (b) and inserting the 
        following new subsections:
    ``(a) Preparation and Distribution.--The Secretary shall prepare, 
at least once every 5 years, a booklet to help consumers applying for 
federally related mortgage loans to understand the nature and costs of 
real estate settlement services. The Secretary shall prepare the 
booklet in various languages and cultural styles, as the Secretary 
determines to be appropriate, so that the booklet is understandable and 
accessible to homebuyers of different ethnic and cultural backgrounds. 
The Secretary shall distribute such booklets to all lenders that make 
federally related mortgage loans. The Secretary shall also distribute 
to such lenders lists, organized by location, of homeownership 
counselors certified under section 106(e) of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701x(e)) for use in complying with 
the requirement under subsection (c) of this section.
    ``(b) Contents.--Each booklet shall be in such form and detail as 
the Secretary shall prescribe and, in addition to such other 
information as the Secretary may provide, shall include in plain and 
understandable language the following information:
            ``(1) A description and explanation of the nature and 
        purpose of the costs incident to a real estate settlement or a 
        federally related mortgage loan. The description and 
        explanation shall provide general information about the 
        mortgage process as well as specific information concerning, at 
        a minimum--
                    ``(A) balloon payments;
                    ``(B) prepayment penalties; and
                    ``(C) the trade-off between closing costs and the 
                interest rate over the life of the loan.
            ``(2) An explanation and sample of the uniform settlement 
        statement required by section 4.
            ``(3) A list and explanation of lending practices, 
        including those prohibited by the Truth in Lending Act or other 
        applicable Federal law, and of other unfair practices and 
        unreasonable or unnecessary charges to be avoided by the 
        prospective buyer with respect to a real estate settlement.
            ``(4) A list and explanation of questions a consumer 
        obtaining a federally related mortgage loan should ask 
        regarding the loan, including whether the consumer will have 
        the ability to repay the loan, whether the consumer 
        sufficiently shopped for the loan, whether the loan terms 
        include prepayment penalties or balloon payments, and whether 
        the loan will benefit the borrower.
            ``(5) An explanation of the right of rescission as to 
        certain transactions provided by sections 125 and 129 of the 
        Truth in Lending Act.
            ``(6) A brief explanation of the nature of a variable rate 
        mortgage and a reference to the booklet entitled `Consumer 
        Handbook on Adjustable Rate Mortgages', published by the Board 
        of Governors of the Federal Reserve System pursuant to section 
        226.19(b)(1) of title 12, Code of Federal Regulations, or to 
        any suitable substitute of such booklet that such Board of 
        Governors may subsequently adopt pursuant to such section.
            ``(7) A brief explanation of the nature of a home equity 
        line of credit and a reference to the pamphlet required to be 
        provided under section 127A of the Truth in Lending Act.
            ``(8) Information about homeownership counseling services 
        made available pursuant to section 106(a)(4) of the Housing and 
        Urban Development Act of 1968 (12 U.S.C. 1701x(a)(4)), a 
        recommendation that the consumer use such services, and 
        notification that a list of certified providers of 
        homeownership counseling in the area, and their contact 
        information, is available.
            ``(9) An explanation of the nature and purpose of escrow 
        accounts when used in connection with loans secured by 
        residential real estate and the requirements under section 10 
        of this Act regarding such accounts.
            ``(10) An explanation of the choices available to buyers of 
        residential real estate in selecting persons to provide 
        necessary services incidental to a real estate settlement.
            ``(11) An explanation of a consumer's responsibilities, 
        liabilities, and obligations in a mortgage transaction.
            ``(12) An explanation of the nature and purpose of real 
        estate appraisals, including the difference between an 
        appraisal and a home inspection.
            ``(13) Notice that the Office of Housing of the Department 
        of Housing and Urban Development has made publicly available a 
        brochure regarding loan fraud and a World Wide Web address and 
        toll-free telephone number for obtaining the brochure.
The booklet prepared pursuant to this section shall take into 
consideration differences in real estate settlement procedures that may 
exist among the several States and territories of the United States and 
among separate political subdivisions within the same State and 
territory.'';
            (3) in subsection (c), by inserting at the end the 
        following new sentence: ``Each lender shall also include with 
        the booklet a reasonably complete or updated list of 
        homeownership counselors who are certified pursuant to section 
        106(e) of the Housing and Urban Development Act of 1968 (12 
        U.S.C. 1701x(e)) and located in the area of the lender.''; and
            (4) in subsection (d), by inserting after the period at the 
        end of the first sentence the following: ``The lender shall 
        provide the HUD-issued booklet in the version that is most 
        appropriate for the person receiving it.''.

SEC. 5. REQUIREMENTS FOR FHA-APPROVED MORTGAGEES.

    (a) Mortgagee Review Board.--Paragraph (2) of section 202(c) of the 
National Housing Act (12 U.S.C. 1708(c)) is amended--
            (1) in subparagraph (E), by inserting ``and'' after the 
        semicolon;
            (2) in subparagraph (F), by striking ``; and'' and 
        inserting a period; and
            (3) by striking subparagraph (G).
    (b) Limitations on Participation and Mortgagee Approval and Use of 
Name.--Section 202 of the National Housing Act (12 U.S.C. 1708) is 
amended--
            (1) by redesignating subsections (d), (e), and (f) as 
        subsections (e), (f), and (g), respectively;
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d) Limitations on Participation in Origination and Mortgagee 
Approval.--
            ``(1) Requirement.--Any person or entity that is not 
        approved by the Secretary to serve as a mortgagee, as such term 
        is defined in subsection (c)(7), shall not participate in the 
        origination of an FHA-insured loan except as authorized by the 
        Secretary.
            ``(2) Eligibility for approval.--In order to be eligible 
        for approval by the Secretary, an applicant mortgagee shall not 
        be, and shall not have any officer, partner, director, 
        principal, manager, supervisor, loan processor, loan 
        underwriter, or loan originator of the applicant mortgagee who 
        is--
                    ``(A) currently suspended, debarred, under a 
                limited denial of participation (LDP), or otherwise 
                restricted under part 24 or 25 of title 24 of the Code 
                of Federal Regulations, or any successor regulations to 
                such parts, or under similar provisions of any other 
                Federal agency;
                    ``(B) under indictment for, or has been convicted 
                of, an offense that reflects adversely upon the 
                applicant's integrity, competence or fitness to meet 
                the responsibilities of an approved mortgagee;
                    ``(C) subject to unresolved findings contained in a 
                Department of Housing and Urban Development or other 
                governmental audit, investigation, or review;
                    ``(D) engaged in business practices that do not 
                conform to generally accepted practices of prudent 
                mortgagees or that demonstrate irresponsibility;
                    ``(E) convicted of, or who has pled guilty or nolo 
                contendre to, a felony related to participation in the 
                real estate or mortgage loan industry--
                            ``(i) during the 7-year period preceding 
                        the date of the application for licensing and 
                        registration; or
                            ``(ii) at any time preceding such date of 
                        application, if such felony involved an act of 
                        fraud, dishonesty, or a breach of trust, or 
                        money laundering;
                    ``(F) in violation of provisions of the S.A.F.E. 
                Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.) 
                or any applicable provision of State law; or
                    ``(G) in violation of any other requirement as 
                established by the Secretary.
            ``(3) Rulemaking and implementation.--The Secretary shall 
        conduct a rulemaking to carry out this subsection. The 
        Secretary shall implement this subsection not later than the 
        expiration of the 60-day period beginning upon the date of the 
        enactment of this subsection by notice, mortgagee letter, or 
        interim final regulations, which shall take effect upon 
        issuance.''; and
            (3) by adding at the end the following new subsection:
    ``(h) Use of Name.--The Secretary shall, by regulation, require 
each mortgagee approved by the Secretary for participation in the FHA 
mortgage insurance programs of the Secretary--
            ``(1) to use the business name of the mortgagee that is 
        registered with the Secretary in connection with such approval 
        in all advertisements and promotional materials, as such terms 
        are defined by the Secretary, relating to the business of such 
        mortgagee in such mortgage insurance programs; and
            ``(2) to maintain copies of all such advertisements and 
        promotional materials, in such form and for such period as the 
        Secretary requires.''.
    (c) Change of Status.--The National Housing Act is amended by 
striking section 532 (12 U.S.C. 1735f-10) and inserting the following 
new section:

``SEC. 532. CHANGE OF MORTGAGEE STATUS.

    ``(a) Notification.--Upon the occurrence of any action described in 
subsection (b), an approved mortgagee shall immediately submit to the 
Secretary, in writing, notification of such occurrence.
    ``(b) Actions.--The actions described in this subsection are as 
follows:
            ``(1) The debarment, suspension of a Limited Denial of 
        Participation (LDP), or application of other sanctions, fines, 
        or penalties applied to the mortgagee or to any officer, 
        partner, director, principal, manager, supervisor, loan 
        processor, loan underwriter, or loan originator of the 
        mortgagee pursuant to applicable provisions of State or Federal 
        law.
            ``(2) The revocation of a State-issued mortgage loan 
        originator license issued pursuant to the S.A.F.E. Mortgage 
        Licensing Act of 2008 (12 U.S.C. 5101 et seq.) or any other 
        similar declaration of ineligibility pursuant to State law.''.
    (d) Civil Money Penalties.--Section 536 of the National Housing Act 
(12 U.S.C. 1735f-14) is amended--
            (1) in subsection (b)--
                    (A) in paragraph (1)--
                            (i) in the matter preceding subparagraph 
                        (A), by inserting ``or any of its owners, 
                        officers, or directors'' after ``mortgagee or 
                        lender'';
                            (ii) in subparagraph (H), by striking 
                        ``title I'' and all that follows through ``Act 
                        of 1989)'' and inserting ``title I or II''; and
                            (iii) by inserting after subparagraph (J) 
                        the following:
                    ``(K) Violation of section 202(d) of this Act (12 
                U.S.C. 1708(d)).''; and
                    (B) in paragraph (2)--
                            (i) in subparagraph (B), by striking ``or'' 
                        at the end;
                            (ii) in subparagraph (C), by striking the 
                        period at the end and inserting ``; or''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(D) causing or participating in any of the 
                violations set forth in paragraph (1) of this 
                subsection.''; and
            (2) in subsection (g), by striking ``The term'' and all 
        that follows through the end of the sentence and inserting 
        ``For purposes of this section, a person acts knowingly when a 
        person has actual knowledge of acts or should have known of the 
        acts.''.
    (e) Expanded Review of FHA Mortgagee Applicants and Newly Approved 
Mortgagees.--Not later than the expiration of the 3-month period 
beginning upon the date of the enactment of this Act, the Secretary of 
Housing and Urban Development shall--
            (1) expand the existing process for reviewing new 
        applicants for approval for participation in the mortgage 
        insurance programs of the Secretary for mortgages on 1- to 4-
        family residences for the purpose of identifying applicants who 
        represent a high risk to the Mutual Mortgage Insurance Fund; 
        and
            (2) implement procedures that, for mortgagees approved 
        during the 12-month period ending upon such date of enactment--
                    (A) expand the number of mortgages originated by 
                such mortgagees that are reviewed for compliance with 
                applicable laws, regulations, and policies; and
                    (B) include a process for random reviews of such 
                mortgagees and a process for reviews that is based on 
                volume of mortgages originated by such mortgagees.

SEC. 6. COMMISSION ON THE FORECLOSURE AND MORTGAGE LENDING CRISIS.

    (a) Establishment of Commission.--There is established in the 
legislative branch a commission to be known as the ``Commission on the 
Foreclosure and Mortgage Lending Crisis'' (in this section referred to 
as the ``Commission'').
    (b) Findings and Purpose.--
            (1) Findings.--Congress finds the following:
                    (A) The United States is experiencing a steady 
                increase in foreclosures and mortgage lending problems 
                that have impacted homeowners, families, communities, 
                the United States economy and the global credit 
                markets.
                    (B) In 2006, there were an estimated 1,300,000 
                foreclosures in the United States.
                    (C) This number increased by 79 percent in 2007, 
                bringing the estimated number of foreclosures 
                nationwide to 2,200,000.
                    (D) In 2008, an estimated 3,200,000 foreclosures 
                were reported.
                    (E) Estimates suggest that this trend is likely to 
                continue with millions more Americans potentially 
                losing their homes to foreclosure in the next 4 years.
            (2) Purpose.--The purpose of this section is to establish a 
        commission to undertake a comprehensive analysis and review of 
        the origins and causes of the current foreclosure and mortgage 
        lending crisis and to issue a report of its findings to the 
        Congress. The Commission shall also recommend legislative and 
        regulatory changes that will prohibit the kinds of lending 
        practices that contributed to the increased foreclosure rate 
        and the current mortgage lending crisis.
    (c) Composition.--
            (1) Members.--The Commission shall be composed of 10 
        members as follows:
                    (A) 2 members shall be appointed by the Speaker of 
                the House of Representatives.
                    (B) 2 members shall be appointed by the minority 
                leader of the House of Representatives.
                    (C) 2 members shall be appointed by the majority 
                leader of the Senate.
                    (D) 2 members shall be appointed by the minority 
                leader of the Senate.
                    (E) The Secretary of the Treasury or his designee.
                    (F) The chairman of the Board of Governors of the 
                Federal Reserve System or his designee.
            (2) Deadline for appointment.--All members of the 
        Commission shall be appointed not later than 30 days after the 
        date of the enactment of this Act.
            (3) Co-chairmen.--Of the members appointed to the 
        Commission under subparagraphs (A) through (D) of paragraph 
        (1), 2 shall be designated as the co-chairmen of the 
        Commission. One co-chairman shall be designated by the Speaker 
        of the House of Representatives in consultation with the 
        majority leader of the Senate and the other co-chairman shall 
        be designated by the minority leader of the House of 
        Representatives in consultation with the minority leader of the 
        Senate.
            (4) Vacancies.--Any vacancy in the Commission shall not 
        affect its powers, but shall be filled in the same manner in 
        which the original appointment was made.
            (5) Compensation.--
                    (A) In general.--Members of the Commission shall 
                serve without pay.
                    (B) Travel expenses.--While away from their homes 
                or regular places of business in the performance of 
                services for the Commission, members of the Commission 
                shall be allowed travel expenses, including per diem in 
                lieu of subsistence, in the same manner as persons 
                employed intermittently in the Government service are 
                allowed expenses under section 5703(b) of title 5, 
                United States Code.
            (6) Initial meeting; rules of procedure; quorum.--
                    (A) Initial meeting.--The Commission shall meet and 
                begin the operations of the Commission not later than 
                60 days after the date of the enactment of this Act.
                    (B) Meetings.--After its initial meeting, the 
                Commission shall meet upon the call of the co-chairmen 
                or a majority of its members.
                    (C) Quorum.--A majority of the members of the 
                Commission shall constitute a quorum.
                    (D) Rules of procedure.--The Commission may 
                establish rules for the conduct of the Commission's 
                business, if such rules are consistent with this Act or 
                other applicable law.
    (d) Duties.--
            (1) In general.--The Commission shall--
                    (A) study and assess the current legal and 
                regulatory framework governing the housing mortgage 
                lending markets and investigate how the such framework 
                contributed to the increased foreclosure rate, 
                including--
                            (i) refinancing practices;
                            (ii) loan to value ratios; and
                            (iii) the prevalence of fraudulent industry 
                        practices;
                    (B) recommend changes to the current legal and 
                regulatory framework to prohibit lending practices that 
                have contributed to the mortgage lending crisis;
                    (C) review the impact of subprime abuses and 
                predatory lending practices;
                    (D) assess the role of States in enacting policies 
                to reduce predatory lending practices and abuses in the 
                subprime markets;
                    (E) assess the impact of mortgage backed securities 
                and Fannie Mae and Freddie Mac on the mortgage lending 
                crisis; and
                    (F) assess the impact of the Community Reinvestment 
                Act on the mortgage lending crisis.
            (2) Final report.--Not later than 12 months after the date 
        of enactment of this Act, the Commission shall submit to the 
        Congress a final report containing such findings, conclusions, 
        and recommendations as have been agreed to by a majority of 
        Commission members. If, at the conclusion of such 12 month 
        period, a majority of the Commission determines it necessary, 
        the Commission may be granted a 6 month extension for 
        submission of its final report upon written notification to the 
        Congress.
    (e) Powers of the Commission.--
            (1) Hearings and evidence.--The Commission, or on the 
        authority of the Commission or any subcommittee or member 
        thereof, may, for the purpose of carrying out this title--
                    (A) hold such hearings and sit and act at such 
                times and places, take such testimony, receive such 
                evidence, administer such oaths; and
                    (B) subject to paragraph (2)(A), subpoena or 
                otherwise require, the attendance and testimony of such 
                witnesses and the production of such books, records, 
                correspondence, memoranda, papers, and documents as the 
                Commission or such designated subcommittee or 
                designated member may determine advisable.
            (2) Subpoenas.--
                    (A) Issuance.--
                            (i) In general.--A subpoena may be issued 
                        under this subsection only--
                                    (I) by a co-chairman; or
                                    (II) by the affirmative vote of a 
                                majority of the members of the 
                                Commission.
                            (ii) Signature.--Subject to clause (i), 
                        subpoenas issued under this subparagraph may be 
                        issued under the signature of a co-chairman or 
                        any member designated by a majority of the 
                        Commission, may be served by any person 
                        designated by the co-chairmen or by a member 
                        designated by a majority of the Commission.
                    (B) Enforcement.--
                            (i) In general.--In the case of contumacy 
                        or failure to obey a subpoena issued under 
                        subparagraph (A), the United States district 
                        court for the judicial district in which the 
                        subpoenaed person resides, is served, or may be 
                        found, or where the subpoena is returnable, may 
                        issue an order requiring such person to appear 
                        at any designated place to testify or to 
                        produce documentary or other evidence. Any 
                        failure to obey the order of the court may be 
                        punished by the court as a contempt of that 
                        court.
                            (ii) Additional enforcement.--In the case 
                        of any failure of any witness to comply with 
                        any subpoena or to testify when summoned under 
                        authority of this section, the Commission may, 
                        by majority vote, certify a statement of fact 
                        constituting such failure to the appropriate 
                        United States attorney, who may bring the 
                        matter before the grand jury for its action, 
                        under the same statutory authority and 
                        procedures as if the United States attorney had 
                        received as certification under section 102 
                        through 104 of the Revised Statutes of the 
                        United States (2 U.S.C. 192 through 194).
            (3) Contract authority.--The Commission may, to such extent 
        and in such amounts as are provided in appropriation Acts, 
        enter into contracts to enable the Commission to discharge its 
        duties under this section.
            (4) Information from federal agencies.--
                    (A) In general.--The Commission is authorized to 
                secure directly from any executive department, bureau, 
                agency, board, commission, office, independent 
                establishment, or instrumentality of the Government, 
                information, suggestions, estimates, and statistics for 
                the purposes of this section. Each department, bureau, 
                agency, board, commission, office, independent 
                establishment, or instrumentality shall, to the extent 
                authorized by law, furnish such information, 
                suggestions, estimates, and statistics directly to the 
                Commission, upon request made by the co-chairmen of any 
                subcommittee created by a majority of the Commission, 
                or any member designated by a majority of the 
                Commission.
                    (B) Receipt, handling, storage, and 
                dissemination.--Information shall only be received, 
                handled, stored, and disseminated by members of the 
                Commission and its staff consistent with all applicable 
                statutes, regulations, and Executive orders.
            (5) Assistance from federal agencies.--
                    (A) General services administration.--The 
                Administrator of General Services shall provide to the 
                Commission on a reimbursable basis administrative 
                support and other services for the performance of the 
                Commission's functions.
                    (B) Other departments and agencies.--In addition to 
                the assistance described in subparagraph (A), 
                departments and agencies of the United States may 
                provide to the Commission such services, funds, 
                facilities, staff, and other support services as they 
                may determine advisable and as may be authorized by 
                law.
            (6) Postal services.--The Commission may use the United 
        States mails in the same manner and under the same conditions 
        as departments and agencies of the United States.
    (f) Staff.--
            (1) In general.--
                    (A) Appointment and compensation.--The co-chairman, 
                in accordance with rules agreed upon by the Commission, 
                may appoint and fix the compensation of a staff 
                director and such other personnel as may be necessary 
                to enable the Commission to carry out its duties, 
                without regard to the provisions of title 5, United 
                States Code, governing appointments in the competitive 
                service, and without regard to the provisions of 
                chapter 51 and subchapter III of chapter 53 of such 
                title relating to classification and General Schedule 
                pay rates, except that no rate of pay fixed under this 
                subsection may exceed the equivalent of that payable 
                for a position at level IV of the Executive Schedule 
                under section 5316 of title 5, United States Code.
                    (B) Personnel as federal employees.--
                            (i) In general.--The executive director and 
                        any personnel of the Commission who are 
                        employees shall be employees under section 2105 
                        of title 5, United States Code, for purposes of 
                        chapters 63, 81, 83, 84, 85, 87, 89, and 90 of 
                        that title.
                            (ii) Members of the commission.--Clause (i) 
                        shall not apply to members of the Commission.
            (2) Detailees.--Any Federal Government employee may be 
        detailed to the Commission without reimbursement from the 
        Commission, and such detailee shall retain the rights, status, 
        and privileges of his or her regular employment without 
        interruption.
            (3) Expert and consultant services.--The Commission is 
        authorized to procure the services of experts and consultants 
        in accordance with section 3109 of title 5, United States Code, 
        but at rates not to exceed the daily rate paid to a person 
        occupying a position at level IV of the Executive Schedule 
        under section 5315 of title 5, United States Code.
            (4) Volunteer services.--Notwithstanding section 1342 of 
        title 31, United States Code, the Commission may accept and use 
        voluntary and uncompensated services as the Commission 
        determines necessary.
    (g) Nonapplicability of Federal Advisory Committee Act.--
            (1) In general.--The Federal Advisory Committee Act (5 
        U.S.C. App.) shall not apply to the Commission.
            (2) Public meetings and release of public versions of 
        reports.--The Commission shall--
                    (A) hold public hearings and meetings to the extent 
                appropriate; and
                    (B) release public versions of the report required 
                under subsection (d)(2).
            (3) Public hearings.--Any public hearings of the Commission 
        shall be conducted in a manner consistent with the protection 
        of information provided to or developed for or by the 
        Commission as required by any applicable statute, regulations, 
        or Executive order.
    (h) Termination.--
            (1) In general.--The Commission and all the authorities of 
        this section, shall terminate not later than 60 days after the 
        date on which the final report is submitted under subsection 
        (d)(2).
            (2) Administrative activities before termination.--The 
        Commission may use the 60-day period referred to in paragraph 
        (1) for the purpose of concluding its activities, including 
        providing testimony to committees of Congress concerning its 
        report and disseminating the final report.
    (i) Authorization of Appropriation.--There are authorized to be 
appropriated such sums as necessary to carry out this section.

SEC. 7. AUTHORIZATION OF APPROPRIATIONS FOR COMBATING MORTGAGE FRAUD.

    For fiscal years 2009, 2010, 2011, 2012, and 2013, there are 
authorized to be appropriated to the Attorney General a total of--
            (1) $31,250,000 to support the employment of 30 additional 
        agents of the Federal Bureau of Investigation and 2 additional 
        dedicated prosecutors at the Department of Justice to 
        coordinate prosecution of mortgage fraud efforts with the 
        offices of the United States Attorneys; and
            (2) $750,000 to support the operations of interagency task 
        forces of the Federal Bureau of Investigation in the areas with 
        the 15 highest concentrations of mortgage fraud.

SEC. 8. ENHANCEMENT OF LIQUIDITY AND STABILITY OF INSURED DEPOSITORY 
              INSTITUTIONS TO ENSURE AVAILABILITY OF CREDIT AND 
              REDUCTION OF FORECLOSURES.

    (a) Permanent Increase in Deposit Insurance.--
            (1) Amendments to federal deposit insurance act.--Effective 
        upon the date of the enactment of this Act, section 11(a) of 
        the Federal Deposit Insurance Act (12 U.S.C. 1821(a)) is 
        amended--
                    (A) in paragraph (1)(E), by striking ``$100,000'' 
                and inserting ``$250,000'';
                    (B) in paragraph (1)(F)(i), by striking ``2010'' 
                and inserting ``2015'';
                    (C) in subclause (I) of paragraph (1)(F)(i), by 
                striking ``$100,000'' and inserting ``$250,000'';
                    (D) in subclause (II) of paragraph (1)(F)(i), by 
                striking ``the calendar year preceding the date this 
                subparagraph takes effect under the Federal Deposit 
                Insurance Reform Act of 2005'' and inserting ``calendar 
                year 2008''; and
                    (E) in paragraph (3)(A), by striking ``, except 
                that $250,000 shall be substituted for $100,000 
                wherever such term appears in such paragraph''.
            (2) Amendment to federal credit union act.--Section 207(k) 
        of the Federal Credit Union Act (12 U.S.C. 1787(k)) is 
        amended--
                    (A) in paragraph (3)--
                            (i) by striking the opening quotation mark 
                        before ``$250,000'';
                            (ii) by striking ``, except that $250,000 
                        shall be substituted for $100,000 wherever such 
                        term appears in such section''; and
                            (iii) by striking the closing quotation 
                        mark after the closing parenthesis; and
                    (B) in paragraph (5), by striking ``$100,000'' and 
                inserting ``$250,000''.
            (3) Repeal of eesa provision.--Section 136 of the Emergency 
        Economic Stabilization Act (12 U.S.C. 5241) is hereby repealed.
    (b) Extension of Restoration Plan Period.--Section 7(b)(3)(E)(ii) 
of the Federal Deposit Insurance Act (12 U.S.C. 1817(b)(3)(E)(ii)) is 
amended by striking ``5-year period'' and inserting ``8-year period''.
    (c) FDIC and NCUA Borrowing Authority.--
            (1) FDIC.--Section 14(a) of the Federal Deposit Insurance 
        Act (12 U.S.C. 1824(a)) is amended by striking 
        ``$30,000,000,000'' and inserting ``$100,000,000,000''.
            (2) NCUA.--Section 203(d)(1) of the Federal Credit Union 
        Act (12 U.S.C. 1783(d)(1)) is amended by striking 
        ``$100,000,000'' and inserting ``$6,000,000,000''.
    (d) Expanding Systemic Risk Special Assessments.--Section 
13(c)(4)(G)(ii) of the Federal Deposit Insurance Act (12 U.S.C. 
1823(c)(4)(G)(ii)) is amended to read as follows:
                            ``(ii) Repayment of loss.--
                                    ``(I) In general.--The Corporation 
                                shall recover the loss to the Deposit 
                                Insurance Fund arising from any action 
                                taken or assistance provided with 
                                respect to an insured depository 
                                institution under clause (i) from 1 or 
                                more special assessments on insured 
                                depository institutions, depository 
                                institution holding companies (with the 
                                concurrence of the Secretary of the 
                                Treasury with respect to holding 
                                companies), or both, as the Corporation 
                                determines to be appropriate.
                                    ``(II) Treatment of depository 
                                institution holding companies.--For 
                                purposes of this clause, sections 
                                7(c)(2) and 18(h) shall apply to 
                                depository institution holding 
                                companies as if they were insured 
                                depository institutions.
                                    ``(III) Regulations.--The 
                                Corporation shall prescribe such 
                                regulations as it deems necessary to 
                                implement this clause. In prescribing 
                                such regulations, defining terms, and 
                                setting the appropriate assessment rate 
                                or rates, the Corporation shall 
                                establish rates sufficient to cover the 
                                losses incurred as a result of the 
                                actions of the Corporation under clause 
                                (i) and shall consider: the types of 
                                entities that benefit from any action 
                                taken or assistance provided under this 
                                subparagraph; economic conditions, the 
                                effects on the industry, and such other 
                                factors as the Corporation deems 
                                appropriate and relevant to the action 
                                taken or the assistance provided. Any 
                                funds so collected that exceed actual 
                                losses shall be placed in the Deposit 
                                Insurance Fund.''.
    (e) Establishment of a National Credit Union Share Insurance Fund 
Restoration Plan Period.--Section 202(c)(2) of the Federal Credit Union 
Act (12 U.S.C. 1782(c)(2)) is amended by adding at the end the 
following new subparagraph:
                    ``(D) Fund restoration plans.--
                            ``(i) In general.--Whenever--
                                    ``(I) the Board projects that the 
                                equity ratio of the Fund will, within 6 
                                months of such determination, fall 
                                below the minimum amount specified in 
                                subparagraph (C) for the designated 
                                equity ratio; or
                                    ``(II) the equity ratio of the Fund 
                                actually falls below the minimum amount 
                                specified in subparagraph (C) for the 
                                equity ratio without any determination 
                                under sub-clause (I) having been made,
                        the Board shall establish and implement a Share 
                        Insurance Fund restoration plan within 90 days 
                        that meets the requirements of clause (ii) and 
                        such other conditions as the Board determines 
                        to be appropriate.
                            ``(ii) Requirements of restoration plan.--A 
                        Share Insurance Fund restoration plan meets the 
                        requirements of this clause if the plan 
                        provides that the equity ratio of the Fund will 
                        meet or exceed the minimum amount specified in 
                        subparagraph (C) for the designated equity 
                        ratio before the end of the 5-year period 
                        beginning upon the implementation of the plan 
                        (or such longer period as the Board may 
                        determine to be necessary due to extraordinary 
                        circumstances).
                            ``(iii) Transparency.--Not more than 30 
                        days after the Board establishes and implements 
                        a restoration plan under clause (i), the Board 
                        shall publish in the Federal Register a 
                        detailed analysis of the factors considered and 
                        the basis for the actions taken with regard to 
                        the plan.''.

SEC. 9. PROHIBITION ON THE RECEIPT OF COMMON STOCK AND THE EXERCISE OF 
              STOCK VOTING POWER.

    Title I of the Emergency Economic Stabilization Act of 2008 is 
amended by adding at the end the following new section:

``SEC. 137. PROHIBITION ON THE RECEIPT OF COMMON STOCK AND THE EXERCISE 
              OF STOCK VOTING POWER.

    ``(a) In General.--Notwithstanding any other provision of this 
title, in carrying out this title the Secretary shall not make any 
purchase for which the Secretary receives control-diluting stock.
    ``(b) Application.--Subsection (a) shall apply to purchases made by 
the Secretary under this title on or after the date of the enactment of 
this section.
    ``(c) Conversion of Certain Securities Received by the Secretary.--
Notwithstanding any other provision of this title, the Secretary shall 
not convert any security received by the Secretary under this title, 
other than a warrant, into control-diluting stock.
    ``(d) Control-Diluting Stock Defined.--For purposes of this 
section, the term `control-diluting stock' means--
            ``(1) common stock of a financial institution;
            ``(2) any other voting stock of a financial institution, 
        other than voting stock that the Secretary agrees not to 
        exercise the voting power of such stock; or
            ``(3) a warrant giving the right to the Secretary to 
        receive stock described in paragraph (1) or (2).''.

SEC. 10. TREATMENT OF GAIN ON DISPOSITION OF SUBSIDIZED RESIDENCES.

    (a) In General.--In the case any taxpayer who holds (at the time of 
the provision of the relief or assistance described in subsection (b)) 
any interest in a subsidized residence--
            (1) section 121 of the Internal Revenue Code of 1986 
        (relating to exclusion of gain from sale of principal 
        residence) shall not apply to any gain from the sale or 
        exchange of such interest, and
            (2) the rate of tax under section 1 of such Code on such 
        gain shall be twice the rate which would otherwise apply.
    (b) Subsidized Residence.--For purposes of this section, the term 
``subsidized residence'' means any residence that is subject to a 
mortgage with respect to which relief or assistance is provided under 
this Act or any amendment made by this Act, under any authority or 
program established or amended by this Act, or by any financial 
institution subject to the amendments made by section 204.

SEC. 11. REFUNDABLE TAX CREDIT FOR RESIDENCES PURCHASED DURING 2009 OR 
              2010.

    (a) In General.--Subpart C of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by inserting after section 36 the following new section:

``SEC. 36A. GENERAL HOMEBUYER CREDIT FOR RESIDENCES PURCHASED DURING 
              2009 OR 2010.

    ``(a) Allowance of Credit.--In the case of an individual who makes 
an eligible purchase during the taxable year, there shall be allowed as 
a credit against the tax imposed by this subtitle for such taxable year 
an amount equal to so much of the purchase price as does not exceed the 
applicable amount.
    ``(b) Applicable Amount.--For purposes of subsection (a), the 
applicable amount is--
            ``(1) $10,000 in the case of an eligible purchase where the 
        down payment is at least 15 percent of the purchase price,
            ``(2) $5,000 in the case of an eligible purchase where the 
        down payment is at least 10 percent of the purchase price,
            ``(3) $2,000 in the case of an eligible purchase where the 
        down payment is at least 5 percent of the purchase price, and
            ``(4) zero in any other case.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Eligible purchase.--The term `eligible purchase' 
        means the purchase of a residence for the taxpayer if--
                    ``(A) such residence is located in the United 
                States,
                    ``(B) the construction of such residence began 
                before 2009, and
                    ``(C) such purchase is made by the taxpayer during 
                2009 or 2010.
            ``(2) Other definitions.--The terms `purchase' and 
        `purchase price' have the respective meanings given such terms 
        by section 26(c).
    ``(d) Exceptions.--No credit shall be allowed under subsection (a) 
to any taxpayer for any taxable year with respect to the purchase of a 
residence if--
            ``(1) credit under section 36 (relating to first-time 
        homebuyer credit) or 1400C (relating to first-time homebuyer in 
        the District of Columbia) is allowed to the taxpayer (or the 
        taxpayer's spouse) for such taxable year or any prior taxable 
        year,
            ``(2) the residence is financed by the proceeds of a 
        qualified mortgage issue the interest on which is exempt from 
        tax under section 103,
            ``(3) the taxpayer is a nonresident alien, or
            ``(4) the taxpayer disposes of such residence (or such 
        residence ceases to be a residence of the taxpayer (or, if 
        married, the taxpayer's spouse)) before the close of such 
        taxable year.
    ``(e) Other Rules To Apply.--
            ``(1) Related persons.--Rules similar to the rules of 
        section 26(c)(5) shall apply for purposes of this section.
            ``(2) Married individuals filing separate returns, etc.--
        Rules similar to the rules of subparagraphs (B) and (C) of 
        section 26(b)(1) shall apply for purposes of this section.
            ``(3) Reporting.--Rules similar to the rules of section 
        26(e) shall apply for purposes of this section.
    ``(f) Recapture of Credit.--Rules similar to the rules of section 
26(f) shall apply for purposes of this section, except that--
            ``(1) paragraph (1) thereof shall be applied by 
        substituting `33\1/3\ percent' for `6\2/3\ percent', and
            ``(2) paragraph (7) thereof shall be applied by 
        substituting `3 years' for `15 years'.''.
    (b) Conforming Amendments.--
            (1) Section 26(b)(2) of such Code is amended--
                    (A) in subparagraph (W)--
                            (i) by striking ``homebuyer credit'' and 
                        inserting ``first-time homebuyer credit'', and
                            (ii) by striking ``and'',
                    (B) by striking the period at the end of 
                subparagraph (X) and inserting ``, and'', and
                    (C) by inserting after subparagraph (X) the 
                following new subparagraph:
                    ``(Y) section 36A(f) (relating to recapture of 
                general homebuyer credit)''.
            (2) Section 6211(b)(4)(A) of such Code is amended by 
        inserting ``36A,'' after ``36,''.
            (3) Section 1324(b)(2) of title 31, United States Code, is 
        amended by inserting ``36A,'' after ``36,''.
            (4) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 36 the following new item:

``Sec. 36A. General homebuyer credit for residences purchased during 
                            2009 or 2010.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to residences purchased after December 31, 2008, in taxable years 
ending after such date.

SEC. 12. CONDITIONS ON MORTGAGE RELIEF.

    Notwithstanding any other provision of this Act or any amendment 
made by this Act, no relief or assistance may be provided under this 
Act or any such amendment, under any authority or program established 
or amended by this Act, or by any financial institution subject to the 
amendments made by section 8 of this Act, to or on behalf of any 
mortgagor unless, before such assistance is provided the agency or 
entity providing such relief or assistance makes a determination that--
            (1) the mortgagor's income was accurately stated on the 
        application for the original mortgage in connection with which 
        such relief or assistance is being provided;
            (2) the residential property that is subject to the 
        original mortgage in connection with such relief or assistance 
        is being provided is the principal residence of the mortgagor;
            (3) the mortgagor has never been convicted under Federal or 
        State law for financial fraud; and
            (4) the mortgagor is a citizen or national of the United 
        States or an alien lawfully admitted for permanent residence in 
        the United States.
                                 <all>
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