I 

111TH CONGRESS 

2D SESSION H. R. 4811 

To protect the American taxpayers by improving the safety and soundness 

of the FHA mortgage insurance programs of the Department of Housing 

and Urban Development. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 10, 2010 

Mrs. CAPITO (for herself, Mr. BACHUS, Mrs. BIGGERT, Mr. GARRETT of New 

Jersey, Mr. NEUGEBAUER, Mr. LANCE, Mr. HENSARLING, and Mr. GARY

G. MILLER of California) introduced the following bill; which was referred 

to the Committee on Financial Services 

A BILL 

To protect the American taxpayers by improving the safety 

and soundness of the FHA mortgage insurance programs 

of the Department of Housing and Urban Development. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘FHA Safety and 

5 Soundness and Taxpayer Protection Act of 2010’’. 


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1 SEC. 2. DEPUTY ASSISTANT SECRETARY OF FHA FOR RISK 

2 MANAGEMENT. 

3 (a) ESTABLISHMENT OF POSITION.—Subsection (b) 

4 of section 4 of the Department of Housing and Urban De5 velopment Act (42 U.S.C. 3533(b)) is amended— 

6 (1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and 

7 (2) by adding at the end the following new 

8 paragraph: 

9 ‘‘(2) There shall be in the Department, within the 

10 Federal Housing Administration, a Deputy Assistant Sec11 retary for Risk Management, who shall be appointed by 

12 the Secretary and shall be responsible to the Federal 

13 Housing Commissioner for all matters relating to man14 aging and mitigating risk to the mortgage insurance funds 

15 of the Department and ensuring the performance of mort16 gages insured by the Department.’’. 

17 (b) TERMINATION.—Upon the appointment and con18 firmation of the initial Deputy Assistant Secretary for 

19 Risk Management pursuant to section 4(b)(2) of the De20 partment of Housing and Urban Development Act, as 

21 amended by subsection (a) of this section, the position of 

22 chief risk officer within the Department of Housing and 

23 Urban Development, filled by appointment by the Federal 

24 Housing Commissioner, is abolished. 


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1 SEC. 3. USE OF OUTSIDE CREDIT RISK ANALYSIS SOURCES. 

2 Section 202 of the National Housing Act (12 U.S.C. 

3 1708) is amended by adding at the end the following new 

4 subsection: 

5 ‘‘(i) USE OF OUTSIDE CREDIT RISK ANALYSIS

6 SOURCES.—To improve the credit risk analysis functions 

7 of the Department of Housing and Urban Development 

8 in connection with insurance provided by the Department 

9 for single-family housing mortgages, the Secretary may 

10 obtain the services of, and enter into contracts with, pri11 vate and other entities outside of the Department in— 

12 ‘‘(1) analyzing credit risk models and practices 

13 employed by the Department in connection with 

14 such mortgages; 

15 ‘‘(2) evaluating underwriting standards applica16 ble to such mortgages insured by the Department; 

17 and 

18 ‘‘(3) analyzing the performance of lenders in 

19 complying with, and the Department in enforcing, 

20 such underwriting standards.’’. 

21 SEC. 4. AUTHORITY TO INCREASE ANNUAL INSURANCE 

22 PREMIUMS. 

23 (a) AUTHORITY.—Paragraph (2) of section 203(c) of 

24 the National Housing Act (12 U.S.C. 1709(c)(2)) is 

25 amended— 


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1 (1) in subparagraph (B), in the matter pre2 ceding clause (i), by inserting ‘‘, except as provided 

3 in subparagraph (C),’’ before ‘‘0.50 percent’’; and 

4 (2) by adding at the end the following new sub5 paragraph: 

6 ‘‘(C) The Secretary may, if the Secretary 

7 determines that action pursuant to this sub8 paragraph is necessary to protect the safety and 

9 soundness of the Mutual Mortgage Insurance 

10 Fund, establish and collect the annual premium 

11 payments in an amount not exceeding 1.75 per12 cent of the remaining insured principal balance 

13 (excluding the portion of the remaining balance 

14 attributable to the premium collected under 

15 subparagraph (A) and without taking into ac16 count delinquent payments or prepayments) for 

17 the first 30 years of the mortgage term.’’. 

18 (b) EFFECT ON UP-FRONT PREMIUMS.—Subpara19 graph (A) of section 203(c)(2) of the National Housing 

20 Act (12 U.S.C. 1709(c)(2)(A)) is amended by adding at 

21 the end the following: ‘‘In establishing the amount of the 

22 single premium payment pursuant to this subparagraph, 

23 the Secretary shall consider any increase of the annual 

24 premium payment pursuant to subparagraph (C) and shall 

25 ensure that such single and annual premium payments are 


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1 sufficient to ensure the safety and soundness of the Mu2 tual Mortgage Insurance Fund.’’. 

3 SEC. 5. RISK-BASED PREMIUM PILOT PROGRAM. 

4 Title II of the National Housing Act is amended— 

5 (1) in section 203(c)(2) (12 U.S.C. 1709(c)(2)), 

6 in the matter preceding subparagraph (A), by strik7 ing ‘‘Notwithstanding’’ and inserting ‘‘Except as 

8 provided in section 259 and notwithstanding’’; and 

9 (2) by adding after section 258 (12 U.S.C. 

10 1715z–24) the following new section: 

11 ‘‘SEC. 259. FLEXIBLE RISK-BASED PREMIUM PILOT PRO12 GRAM. 

13 ‘‘(a) ESTABLISHMENT.—The Secretary shall carry 

14 out a pilot program to provide a flexible risk-based pre15 mium structure for mortgage insurance premiums only for 

16 mortgages that are— 

17 ‘‘(1) insured under this title; 

18 ‘‘(2) secured by 1- to 4-family residences; and 

19 ‘‘(3) executed by first-time homebuyers. 

20 ‘‘(b) FLEXIBLE RISK-BASED PREMIUMS.— 

21 ‘‘(1) PREMIUM STRUCTURE.—Under the pilot 

22 program under this section, the Secretary shall es23 tablish a mortgage insurance premium structure in24 volving a single premium payment collected prior to 

25 the insurance of the mortgage or periodic payments, 


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1 or both, without regard to any maximum or min2 imum premium amounts set forth in section 203(c). 

3 The rate of premium for such a mortgage may vary 

4 during the mortgage term as long as the basis for 

5 determining the variable rate is established before 

6 the execution of the mortgage. The Secretary may 

7 change a premium structure established under this 

8 paragraph but only to the extent that such change 

9 is not applied to any mortgage already executed. 

10 ‘‘(2) NOTICE TO ESTABLISH AND ALTER PRE11 MIUM STRUCTURE.—A premium structure shall be 

12 established or changed under paragraph (1) only by 

13 providing notice to mortgagees and to the Congress, 

14 at least 30 days before the premium structure is es15 tablished or changed. 

16 ‘‘(3) CONSIDERATIONS.—When establishing a 

17 premium structure under paragraph (1) or when 

18 changing such a premium structure, the Secretary 

19 shall consider the following: 

20 ‘‘(A) The effect of the proposed premium 

21 structure on the Secretary’s ability to meet the 

22 operational goals of the Mutual Mortgage In23 surance Fund as provided in section 202(a). 

24 ‘‘(B) Underwriting variables. 


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1 ‘‘(C) The extent to which new pricing 

2 under the proposed premium structure has po3 tential for acceptance in the private market. 

4 ‘‘(D) The administrative capability of the 

5 Secretary to administer the proposed premium 

6 structure. 

7 ‘‘(E) The effect of the proposed premium 

8 structure on the Secretary’s ability to maintain 

9 the availability of mortgage credit and provide 

10 stability to mortgage markets. 

11 ‘‘(c) SCOPE.—The Secretary may carry out the pilot 

12 program under this section on a limited basis or scope, 

13 except that the program shall be carried out nationwide 

14 and the Secretary shall ensure wide geographic represen15 tation of residences subject to mortgages insured pursuant 

16 to the pilot program. 

17 ‘‘(d) LIMITATIONS.— 

18 ‘‘(1) ANNUAL.—In any fiscal year, the aggre19 gate number of mortgages insured pursuant to the 

20 pilot program under this section may not exceed 5 

21 percent of the aggregate number of mortgages for 1- 

22 to 4-family residences insured by the Secretary 

23 under this title during the preceding fiscal year. 


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1 ‘‘(2) TERM OF PROGRAM.—The aggregate num2 ber or mortgages insured pursuant to the pilot pro3 gram under this section may not exceed 150,000. 

4 ‘‘(e) SUNSET.—After the expiration of the 3-year pe5 riod beginning on the date of the enactment of the FHA 

6 Safety and Soundness and Taxpayer Protection Act of 

7 2010, the Secretary may not enter into any new commit8 ment to insure any mortgage, or newly insure any mort9 gage, pursuant to the pilot program under this section.’’. 

10 SEC. 6. ONGOING LENDER REVIEW OF DELINQUENCIES 

11 AMONG RECENT ORIGINATIONS AND AU12 THORITY TO SUSPEND LENDERS. 

13 Section 533 of the National Housing Act (12 U.S.C. 

14 1735f–11) is amended— 

15 (1) by striking the section designation and 

16 heading and inserting the following: 

17 ‘‘SEC. 533. REVIEWS OF MORTGAGEE PERFORMANCE AND 

18 AUTHORITY TO TEMPORARILY SUSPEND AND 

19 TERMINATE.’’; 

20 (2) in subsection (a), by striking ‘‘at least once 

21 a year’’ and all that follows through the end of the 

22 subsection and inserting the following: ‘‘the Sec23 retary shall— 

24 ‘‘(1) at least once a year, for each mortgagee 

25 that originates or underwrites mortgages on single 


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1 family housing that are insured by the Secretary, re2 view the rate of early defaults and claims for such 

3 mortgages for such mortgagee; and 

4 ‘‘(2) conduct an ongoing review of mortgages 

5 on single family housing originated during the pre6 ceding 24 months and insured by the Secretary 

7 under which the mortgagor has become 60 or more 

8 days delinquent with respect to payment under the 

9 mortgage during the first 24 months of the term of 

10 the mortgage to determine— 

11 ‘‘(A) which mortgages should not have 

12 been originated or insured and the characteris13 tics of such mortgages; 

14 ‘‘(B) which mortgagees have relatively high 

15 incidences, as determined by the Secretary, of 

16 such delinquent mortgages or insurance claims 

17 on mortgages, with respect to all mortgages 

18 originated by the mortgagee or mortgages on 

19 housing located in any particular geographic 

20 area or areas; and 

21 ‘‘(C) which mortgagees have had a signifi22 cant or rapid increase, as determined by the 

23 Secretary, in the number or percentage of such 

24 delinquent mortgages or insurance claims on 

25 such mortgages, with respect to all mortgages 


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1 originated by the mortgagee or mortgages on 

2 housing located in any particular geographic 

3 area or areas.’’; 

4 (3) in the first sentence of subsection (b), by in5 serting ‘‘or areas or on a nationwide basis’’ after 

6 ‘‘area’’ each place such term appears; 

7 (4) in subsection (c)(1), by inserting ‘‘for any 

8 area or areas, or on a nationwide basis’’ after ‘‘sin9 gle family mortgages’’; and 

10 (5) by adding at the end the following new sub11 sections: 

12 ‘‘(d) REQUIRED MORTGAGEE INVESTIGATION FOR

13 HIGH EARLY DEFAULT RATES.—If the Secretary deter14 mines pursuant to review under subsection (a)(2) or other15 wise that, with respect to any mortgagee of mortgages on 

16 single family housing that are insured by the Secretary, 

17 that— 

18 ‘‘(1) there is a relatively high incidence of mort19 gages originated by such mortgagee under which the 

20 mortgagor has become 60 or more days delinquent 

21 with respect to payment under the mortgage during 

22 the first 24 months of the term of the mortgage, 

23 with respect to all mortgages originated by such 

24 mortgagee or mortgages on housing located in any 

25 particular geographic area or areas, or 


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1 ‘‘(2) there has been a significant or rapid in2 crease in the number or percentage of such delin3 quent mortgages originated by any mortgagee, with 

4 respect to all mortgages originated by the mortgagee 

5 or mortgages on housing located in any particular 

6 geographic area or areas, 

7 the Secretary shall undertake an investigation of the mort8 gagee to determine if action against such mortgagee under 

9 subsection (e) of this section is warranted or the matter 

10 should be referred to the Mortgagee Review Board under 

11 section 202(c). 

12 ‘‘(e) AUTHORITY TO TEMPORARILY SUSPEND MORT13 GAGEES IN EXIGENT CIRCUMSTANCES.— 

14 ‘‘(1) AUTHORITY.—Notwithstanding section 

15 202(c), the Secretary may temporarily suspend the 

16 approval of a mortgagee to originate or underwrite 

17 mortgages on single family housing that are insured 

18 by the Secretary if the Secretary determines, in ac19 cordance with regulations issued by the Secretary, 

20 that any of the grounds under paragraph (2) of this 

21 subsection exist. If the grounds under paragraph (2) 

22 for a suspension of a mortgagee are limited to a par23 ticular geographic area or areas, the suspension may 

24 apply to such particular geographic area or areas or 

25 to all business of the mortgagee with the Federal 


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1 Housing Administration regardless of location of the 

2 mortgaged properties. 

3 ‘‘(2) GROUNDS.—The grounds under this para4 graph exist for a suspension of a mortgagee pursu5 ant to paragraph (1) only if— 

6 ‘‘(A) there exists adequate evidence of— 

7 ‘‘(i) a relatively high incidence of 

8 mortgages originated by such mortgagee 

9 under which the mortgagor has become 60 

10 or more days delinquent with respect to 

11 payment under the mortgage during the 

12 first 24 months of the term of the mort13 gage, with respect to all mortgages origi14 nated by such mortgagee or mortgages on 

15 housing located in any particular geo16 graphic area or areas; or 

17 ‘‘(ii) a significant or rapid increase in 

18 the number or percentage such delinquent 

19 mortgages originated by such mortgagee, 

20 with respect to all mortgages originated by 

21 such mortgagee or mortgages on housing 

22 located in any particular geographic area 

23 or areas; and 

24 ‘‘(B) continuation of the mortgagee’s ap25 proval, pending or at the completion of any 


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1 audit, investigation, or other review, or such ad2 ministrative or other legal proceedings as may 

3 ensue, would not be in— 

4 ‘‘(i) the public interest; or 

5 ‘‘(ii) the best interests of the Depart6 ment, including the best interests of the 

7 safety and soundness of the insurance 

8 funds under this title. 

9 ‘‘(3) IMMEDIATE EFFECTIVENESS.—A suspen10 sion of a mortgagee pursuant to this subsection shall 

11 take effect upon the Secretary providing written no12 tice of the suspension to the mortgagee and to the 

13 Mortgagee Review Board. Pursuant to such notice, 

14 the Mortgagee Review Board shall, as promptly as 

15 possible, review the suspension and the grounds for 

16 the suspension and make a determination whether to 

17 terminate the suspension, take other action pursuant 

18 to section 202(c), or both. Such a suspension shall 

19 continue in effect until withdrawn by the Secretary 

20 or terminated by the Mortgagee Review Board pur21 suant to action under section 202(c). 

22 ‘‘(4) CONFERENCE.—If requested in writing by 

23 the suspended mortgagee within 30 days of the date 

24 of that notice is provided to the mortgagee, the 

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1 ference with the official authorized to issue termi2 nation notices on behalf of the Secretary (or a des3 ignee of such official). At the informal conference, 

4 the mortgagee may present for consideration specific 

5 factors that it believes were beyond its control and 

6 that caused the grounds for the suspension. 

7 ‘‘(f) SUFFICIENT RESOURCES.—There is authorized 

8 to be appropriated to the Secretary for each of fiscal years 

9 2010 through 2014 the amount necessary to provide 90 

10 additional full-time equivalent positions for the Depart11 ment, or for entering into such contracts as are necessary, 

12 to conduct reviews in accordance with the requirements 

13 of this section. 

14 ‘‘(g) LENDER MONITORING.—In conducting moni15 toring and analysis of the performance of lenders for mort16 gages on single family housing insured under this Act, the 

17 Secretary shall utilize a 24-month period for such moni18 toring and analysis, to promote earlier identification of 

19 problem mortgagees and allow earlier intervention and 

20 sanctions. 

21 ‘‘(h) REPORTING TO CONGRESS.—Not later than 90 

22 days after the date of enactment of the FHA Safety and 

23 Soundness and Taxpayer Protection Act of 2010 and not 

24 less often than annually thereafter, the Secretary shall 

25 make available to the Committee on Financial Services of 


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1 the House of Representatives and the Committee on 

2 Banking, Housing, and Urban Affairs of the Senate any 

3 information and conclusions pursuant to the reviews re4 quired under subsection (a).’’. 

5 SEC. 7. INDEMNIFICATION BY MORTGAGEES. 

6 (a) INDEMNIFICATION BY DIRECT ENDORSEMENT

7 MORTGAGEES.—Section 202 of the National Housing Act 

8 (12 U.S.C. 1708) is amended by adding at the end the 

9 following new subsection: 

10 ‘‘(i) INDEMNIFICATION BY MORTGAGEES.— 

11 ‘‘(1) IN GENERAL.—If the Secretary determines 

12 that a mortgage executed by a mortgagee approved 

13 by the Secretary under the direct endorsement pro14 gram or insured by a mortgagee pursuant to the del15 egation of authority under section 256 was not origi16 nated or underwritten in accordance with the re17 quirements established by the Secretary, and the 

18 Secretary pays an insurance claim with respect to 

19 the mortgage within a reasonable period specified by 

20 the Secretary, the Secretary may require the mort21 gagee approved by the Secretary under the direct en22 dorsement program or the mortgagee delegated au23 thority under section 256 to indemnify the Secretary 

24 for the loss. 


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1 ‘‘(2) FRAUD OR MISREPRESENTATION.—If 

2 fraud or misrepresentation was involved in connec3 tion with the origination or underwriting, the Sec4 retary may require the mortgagee approved by the 

5 Secretary under the direct endorsement program or 

6 the mortgagee delegated authority under section 256 

7 to indemnify the Secretary for the loss regardless of 

8 when an insurance claim is paid. 

9 ‘‘(3) REQUIREMENTS AND PROCEDURES.—The 

10 Secretary shall issue regulations establishing appro11 priate requirements and procedures governing the 

12 indemnification of the Secretary by the mortgagee.’’. 

13 (b) DELEGATION OF INSURING AUTHORITY.—Sec14 tion 256 of the National Housing Act (12 U.S.C. 1715z– 

15 21) is amended— 

16 (1) by striking subsection (c); 

17 (2) in subsection (e), by striking ‘‘, including 

18 requirements and procedures governing the indem19 nification of the Secretary by the mortgagee’’; and 

20 (3) by redesignating subsections (d) and (e) as 

21 subsections (c) and (d), respectively. 

22 SEC. 8. USE OF SAFE MORTGAGE LICENSING ACT IDENTI23 FIERS. 

24 (a) REQUIREMENT.—Section 202 of the National 

25 Housing Act (12 U.S.C. 1708), as amended by the preVerDate Nov 24 2008 04:33 Mar 11, 2010 Jkt 089200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H4811.IH H4811

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1 ceding provisions of this Act, is further amended by add2 ing at the end the following new subsection: 

3 ‘‘(j) USE OF SAFE MORTGAGE LICENSING ACT

4 IDENTIFIERS.—The Secretary shall require each mort5 gagee, as a condition for approval by the Secretary to 

6 originate or underwrite mortgages on single family or mul7 tifamily housing that are insured by the Secretary, that 

8 the mortgagee obtain, maintain, and use in all dealings 

9 and communications with the Department, or otherwise 

10 relating to any mortgages insured by the Secretary, a 

11 unique identifier (as such term is defined in section 1503 

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

13 U.S.C. 5102)).’’. 

14 (b) RULEMAKING AND IMPLEMENTATION.—The Sec15 retary of Housing and Urban Development shall conduct 

16 a rulemaking to carry out subsection (i) of section 202 

17 of the National Housing Act, as added by the amendment 

18 made by subsection (a) of this section. The Secretary shall 

19 implement such subsection (i) not later than the expiration 

20 of the 120-day period beginning upon the date of the en21 actment of this Act by notice, mortgagee letter, or interim 

22 final regulations, which shall take effect upon issuance. 


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1 SEC. 9. REPORTING OF AGGREGATOR ACTIONS TAKEN 

2 AGAINST MORTGAGEES. 

3 Section 202 of the National Housing Act (12 U.S.C. 

4 1708(e)), as amended by the preceding provisions of this 

5 Act, is further amended by adding at the end the following 

6 new subsection: 

7 ‘‘(k) NOTIFICATION OF MORTGAGEE ACTIONS.—The 

8 Secretary shall require each mortgagee, as a condition for 

9 approval by the Secretary to originate or underwrite mort10 gages on single family or multifamily housing that are in11 sured by the Secretary, if such mortgagee engages in the 

12 purchase of mortgages insured by the Secretary and origi13 nated by other mortgagees or in the purchase of the serv14 icing rights to such mortgages, and such mortgagee at any 

15 time takes action to terminate or discontinue such pur16 chases from another mortgagee based on any determina17 tion, evidence, report, or concern of fraud or misrepresen18 tation in connection with the origination of such mort19 gages, or based on the level of defaults on such mortgages, 

20 the mortgagee shall, not later than 15 days after taking 

21 such action, shall notify the Secretary of the action taken 

22 and the reasons for such action.’’. 


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1 SEC. 10. ANNUAL ACTUARIAL STUDY AND QUARTERLY RE2 PORTS ON MUTUAL MORTGAGE INSURANCE 

3 FUND. 

4 Subsection (a) of section 202 of the National Hous5 ing Act (12 U.S.C. 1708(a)) is amended— 

6 (1) in the second sentence of paragraph (4), by 

7 inserting before the period at the end the following: 

8 ‘‘, any changes to the current or projected safety 

9 and soundness of the Fund since the most recent re10 port under this paragraph or paragraph (5), and 

11 any risks to the Fund’’; and 

12 (2) in paragraph (5), in the matter that follows 

13 subparagraph (E), by inserting at the beginning of 

14 such matter and before ‘‘The first’’ the following: 

15 ‘‘Each such quarterly report shall include an assess16 ment of the financial status of the Fund, any 

17 changes to the current or projected safety and 

18 soundness of the Fund since the most recent report 

19 under paragraph (4) and this paragraph, and any 

20 risks to the Fund, and shall set forth any rec21 ommendations (in addition to recommendations 

22 under subparagraph (E)) for actions to ensure that 

23 the Fund remains financially sound.’’. 


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1 SEC. 11. DEFAULT AND ORIGINATION INFORMATION BY 

2 LOAN SERVICER AND ORIGINATING DIRECT 

3 ENDORSEMENT LENDER. 

4 Paragraph (2) of section 540(b) of the National 

5 Housing Act (12 U.S.C. 1712 U.S.C. 1735f–18(b)(2)) is 

6 amended by adding at the end the following new subpara7 graph: 

8 ‘‘(C) For each entity that services insured 

9 mortgages, data on the performance of mort10 gages originated during each calendar quarter 

11 occurring during the applicable collection pe12 riod, disaggregated by the direct endorsement 

13 mortgagee from whom such entity acquired 

14 such servicing.’’. 

15 SEC. 12. GAO REPORTS ON FHA AND GINNIE MAE. 

16 Not later than the expiration of the 12-month period 

17 beginning on the date of the enactment of this Act, the 

18 Comptroller General of the United States shall submit to 

19 the Congress the following reports: 

20 (1) FHA REPORT.—A report on the single fam21 ily mortgage insurance programs of the Secretary of 

22 Housing and Urban Development and the Mutual 

23 Mortgage Insurance Fund established under section 

24 202(a) of the National Housing Act (12 U.S.C. 

25 1708(a)) that— 


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1 (A) analyzes such Fund, the economic net 

2 worth, capital ratio, and unamortized insur3 ance-in-force (as such terms are defined in sec4 tion 205(f)(4) of such Act (12 U.S.C. 

5 1711(f)(4))) of such Fund, the risks to the 

6 Fund, how the capital ratio of the Fund affects 

7 the mortgage insurance programs under the 

8 Fund and the broader housing market, the ex9 tent to which the housing markets are more de10 pendent on mortgage insurance provided 

11 through the Fund since the financial crisis 

12 began in 2008, and the exposure of the tax13 payers for obligations of the Fund; 

14 (B) recommends a capital ratio for the 

15 Fund (notwithstanding section 205(f)(2) of 

16 such Act) that is appropriate and sufficient to 

17 ensure that the operational goals of the Fund 

18 under section 202(a)(8) (as so redesignated by 

19 the preceding provisions of this Act) are met; 

20 (C) analyzes the effects of the increases in 

21 the limits on the maximum principal obligation 

22 of mortgages made by the FHA Modernization 

23 Act of 2008 (title I of division B of Public Law 

24 110–289), section 202 of the Economic Stim25 ulus Act of 2008 (Public Law 110–185; 122 


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1 Stat. 620), section 1202 of division A of the 

2 American Recovery and Reinvestment Act of 

3 2009 (Public Law 111–5; 123 Stat. 225), and 

4 section 166 of the Continuing Appropriations 

5 Resolution, 2010 (as added by section 104 of 

6 division B of Public Law 111–88; 123 Stat. 

7 29723) on— 

8 (i) the risks to and safety and sound9 ness of the Fund; 

10 (ii) the private market for residential 

11 mortgage loans that are not insured by the 

12 Secretary of Housing and Urban Develop13 ment; and 

14 (iii) the Federal National Mortgage 

15 Association and the Federal Home Loan 

16 Mortgage Corporation; and 

17 (D) analyzes the impacts to the Fund 

18 caused by seller concessions or contributions to 

19 a borrower purchasing a residence using a 

20 mortgage that is insured by the Secretary and 

21 recommends an appropriate limitation on such 

22 concessions or contributions. 

23 (2) GINNIE MAE.—A report on the Government 

24 National Mortgage Association that identifies— 


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1 (A) the volume and share of the residential 

2 mortgage market that consists of mortgages 

3 that back, or on which are based, securities the 

4 payment of principal and interest on which is 

5 guaranteed by such Association and how the 

6 Association has been affected by the economic 

7 recession, credit crisis, and downturn in the 

8 housing markets occurring during 2008, 2009, 

9 and 2010; 

10 (B) the capacity of the Association to man11 age the volume of business it conducts and se12 curities it guarantees, particularly with regard 

13 to the recent dramatic increase in such volume, 

14 including the ability of the Association to con15 duct appropriate oversight of contractors and 

16 issuers of securities payment of principal and 

17 interest on which is guaranteed by the Associa18 tion and conduct proper due diligence and over19 sight in screening the mortgages that back such 

20 securities or on which such securities are based; 

21 (C) the impacts, if any, resulting from 

22 such increased volume of business conducted by 

23 the Association and securities it guarantees and 

24 the challenges such increased volume poses to 

25 the internal controls of the Association; and 


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1 (D) the existing capital net worth of the 

2 various aggregators of mortgages that issue se3 curities that are based on or backed by such 

4 mortgages and payment of principal and inter5 est on which is guaranteed by such Association 

6 and recommends an appropriate required level 

7 of net worth for such aggregators and issuers 

8 to protect the financial interests Federal Gov9 ernment and the taxpayers. 

10

Æ 


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