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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5072 Referred in Senate (RFS)]

111th CONGRESS
  2d Session
                                H. R. 5072

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             June 10, 2010

Received; read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 AN ACT

 
   To improve the financial safety and soundness of the FHA mortgage 
                           insurance program.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``FHA Reform Act of 2010''.

SEC. 2. MORTGAGE INSURANCE PREMIUMS.

    Subparagraph (B) of section 203(c)(2) of the National Housing Act 
(12 U.S.C. 1709(c)(2)(B)) is amended--
            (1) in the matter preceding clause (i)--
                    (A) by striking ``shall'' and inserting ``may''; 
                and
                    (B) by striking ``0.50 percent'' and inserting 
                ``1.5 percent''; and
            (2) in clause (ii), by striking ``shall be in an amount not 
        exceeding 0.55 percent'' and inserting ``may be in an amount 
        not exceeding 1.55 percent''.

SEC. 3. INDEMNIFICATION BY MORTGAGEES.

    Section 202 of the National Housing Act (12 U.S.C. 1708) is amended 
by adding at the end the following new subsection:
    ``(i) Indemnification by Mortgagees.--
            ``(1) In general.--If the Secretary determines that a 
        mortgage executed by a mortgagee approved by the Secretary 
        under the direct endorsement program or insured by a mortgagee 
        pursuant to the delegation of authority under section 256 was 
        not originated or underwritten in accordance with the 
        requirements established by the Secretary, and the Secretary 
        pays an insurance claim with respect to the mortgage within a 
        reasonable period specified by the Secretary, the Secretary may 
        require the mortgagee approved by the Secretary under the 
        direct endorsement program or the mortgagee delegated authority 
        under section 256 to indemnify the Secretary for the loss.
            ``(2) Fraud or misrepresentation.--If fraud or 
        misrepresentation was involved in connection with the 
        origination or underwriting, the Secretary may require the 
        mortgagee approved by the Secretary under the direct 
        endorsement program or the mortgagee delegated authority under 
        section 256 to indemnify the Secretary for the loss regardless 
        of when an insurance claim is paid.
            ``(3) Requirements and procedures.--The Secretary shall 
        issue regulations establishing appropriate requirements and 
        procedures governing the indemnification of the Secretary by 
        the mortgagee.''.

SEC. 4. DELEGATION OF INSURING AUTHORITY.

    Section 256 of the National Housing Act (12 U.S.C. 1715z-21) is 
amended--
            (1) by striking subsection (c);
            (2) in subsection (e), by striking ``, including'' and all 
        that follows through ``by the mortgagee''; and
            (3) by redesignating subsections (d) and (e) as subsections 
        (c) and (d), respectively.

SEC. 5. AUTHORITY TO TERMINATE MORTGAGEE ORIGINATION AND UNDERWRITING 
              APPROVAL.

    Section 533 of the National Housing Act (12 U.S.C. 1735f-11) is 
amended--
            (1) in the first sentence of subsection (b), by inserting 
        ``or areas or on a nationwide basis'' after ``area'' each place 
        such term appears; and
            (2) in subsection (c), by striking ``(c)'' and all that 
        follows through ``The Secretary'' in the first sentence of 
        paragraph (2) and inserting the following:
    ``(c) Termination of Mortgagee Origination and Underwriting 
Approval.--
            ``(1) Termination authority.--If the Secretary determines, 
        under the comparison provided in subsection (b), that a 
        mortgagee has a rate of early defaults and claims that is 
        excessive, the Secretary may terminate the approval of the 
        mortgagee to originate or underwrite single family mortgages 
        for any area, or areas, or on a nationwide basis, 
        notwithstanding section 202(c) of this Act.
            ``(2) Procedure.--The Secretary''.

SEC. 6. DEPUTY ASSISTANT SECRETARY OF FHA FOR RISK MANAGEMENT AND 
              REGULATORY AFFAIRS.

    (a) Establishment of Position.--Subsection (b) of section 4 of the 
Department of Housing and Urban Development Act (42 U.S.C. 3533(b)) is 
amended--
            (1) by inserting ``(1)'' after ``(b)''; and
            (2) by adding at the end the following new paragraph:
    ``(2) There shall be in the Department, within the Federal Housing 
Administration, a Deputy Assistant Secretary for Risk Management and 
Regulatory Affairs, who shall be appointed by the Secretary and shall 
be responsible to the Federal Housing Commissioner for all matters 
relating to managing and mitigating risk to the mortgage insurance 
funds of the Department and ensuring the performance of mortgages 
insured by the Department.''.
    (b) Termination.--Upon the appointment and confirmation of the 
initial Deputy Assistant Secretary for Risk Management and Regulatory 
Affairs pursuant to section 4(b)(2) of the Department of Housing and 
Urban Development Act, as amended by subsection (a) of this section, 
the position of chief risk officer within the Federal Housing 
Administration, filled by appointment by the Federal Housing 
Commissioner, is abolished.

SEC. 7. USE OF OUTSIDE CREDIT RISK ANALYSIS SOURCES.

    Section 202 of the National Housing Act (12 U.S.C. 1708), as 
amended by the preceding provisions of this Act, is further amended by 
adding at the end the following new subsection:
    ``(j) Use of Outside Credit Risk Analysis Sources.--The Secretary 
may obtain the services of, and enter into contracts with, private and 
other entities outside of the Department in--
            ``(1) analyzing credit risk models and practices employed 
        by the Department in connection with such mortgages;
            ``(2) evaluating underwriting standards applicable to such 
        mortgages insured by the Department; and
            ``(3) analyzing the performance of lenders in complying 
        with, and the Department in enforcing, such underwriting 
        standards.''.

SEC. 8. REVIEW OF MORTGAGEE PERFORMANCE.

    Section 533 of the National Housing Act (12 U.S.C. 1735f-11) is 
amended--
            (1) in subsection (a), by inserting after the period at the 
        end the following: ``For purposes of this subsection, the term 
        `early default' means a default that occurs within 24 months 
        after a mortgage is originated or such alternative appropriate 
        period as the Secretary shall establish.'';
            (2) in subsection (b), by inserting after the period at the 
        end of the first sentence the following: ``The Secretary shall 
        also identify which mortgagees have had a significant or rapid 
        increase, as determined by the Secretary, in the number or 
        percentage of early defaults and claims on such mortgages, with 
        respect to all mortgages originated by the mortgagee or 
        mortgages on housing located in any particular geographic area 
        or areas.''; and
            (3) by adding at the end the following new subsections:
    ``(d) Sufficient Resources.--There is authorized to be appropriated 
to the Secretary for each of fiscal years 2010 through 2014 the amount 
necessary to provide additional full-time equivalent positions for the 
Department, or for entering into such contracts as are necessary, to 
conduct reviews in accordance with the requirements of this section and 
to carry out other responsibilities relating to ensuring the safety and 
soundness of the Mutual Mortgage Insurance Fund.
    ``(e) Reporting to Congress.--Not later than 90 days after the date 
of enactment of the FHA Reform Act of 2010 and not less often than 
annually thereafter, the Secretary shall make available to the 
Committee on Financial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate any 
information and conclusions pursuant to the reviews required under 
subsection (a). Such report shall not include detailed information on 
the performance of individual mortgages.''.

SEC. 9. USE OF NATIONWIDE MORTGAGE LICENSING SYSTEM AND REGISTRY.

    (a) Use by Mortgagees, Officers, and Owners; Use for Insured 
Mortgages.--
            (1) Mortgagees, officers, and owners.--Section 202 of the 
        National Housing Act (12 U.S.C. 1708), as amended by the 
        preceding provisions of this Act, is further amended by adding 
        at the end the following new subsections:
    ``(k) Use of Nationwide Mortgage Licensing System and Registry for 
Mortgagees, Officers, and Owners.--The Secretary may require, as a 
condition for approval of a mortgagee by the Secretary to originate or 
underwrite mortgages on single family residences that are insured by 
the Secretary, that the mortgagee--
            ``(1) obtain and maintain a unique company identifier 
        assigned by the Nationwide Mortgage Licensing System and 
        Registry, as established by the Conference of State Bank 
        Supervisors and the American Association of Residential 
        Mortgage Regulators; and
            ``(2) obtain and maintain, as relates to any and all 
        officers or owners of the mortgagee who are subject to the 
        requirements of the S.A.F.E. Mortgage Licensing Act of 2008, or 
        are otherwise required to register with the Nationwide Mortgage 
        Licensing System and Registry, the unique identifier assigned 
        by the Nationwide Mortgage Licensing System and Registry, as 
        established by the Conference of State Bank Supervisors and the 
        American Association of Residential Mortgage Regulators.''.
            (2) Insured mortgages.--Section 203 of the National Housing 
        Act (12 U.S.C. 1709) is amended by adding at the end the 
        following new subsection:
    ``(y) Use of Nationwide Mortgage Licensing System and Registry for 
Insured Loans.--The Secretary may require each mortgage insured under 
this section to include the unique identifier (as such term is defined 
in section 1503 of the S.A.F.E. Mortgage Licensing act of 2008 (12 
U.S.C. 5102)) and any unique company identifier assigned by the 
Nationwide Mortgage Licensing System and Registry, as established by 
the Conference of State Bank Supervisors and the American Association 
of Residential Mortgage Regulators.''.
    (b) Coordination With State Regulatory Agencies.--Section 202 of 
the National Housing Act (12 U.S.C. 1708), as amended by the preceding 
provisions of this Act, is further amended by adding at the end the 
following new subsection:
    ``(l) Information Sharing With State Regulatory Agencies.--
            ``(1) Joint protocol on information sharing.--The Secretary 
        shall, through consultation with State regulatory agencies, 
        pursue protocols for information sharing, including the 
        appropriate treatment of confidential or otherwise restricted 
        information, regarding either actions described in subsection 
        (c)(3) of this section or disciplinary or enforcement actions 
        by a State regulatory agency or agencies against a mortgagee 
        (as such term is defined in subsection (c)(7)).
            ``(2) Coordination.--To the greatest extent possible, the 
        Secretary and appropriate State regulatory agencies shall 
        coordinate disciplinary and enforcement actions involving 
        mortgagees (as such term is defined in subsection (c)(7)).''.

SEC. 10. REPORTING OF MORTGAGEE ACTIONS TAKEN AGAINST OTHER MORTGAGEES.

    Section 202 of the National Housing Act (12 U.S.C. 1708(e)), as 
amended by the preceding provisions of this Act, is further amended by 
adding at the end the following new subsection:
    ``(m) Notification of Mortgagee Actions.--The Secretary shall 
require each mortgagee, as a condition for approval by the Secretary to 
originate or underwrite mortgages on single family or multifamily 
housing that are insured by the Secretary, if such mortgagee engages in 
the purchase of mortgages insured by the Secretary and originated by 
other mortgagees or in the purchase of the servicing rights to such 
mortgages, and such mortgagee at any time takes action to terminate or 
discontinue such purchases from another mortgagee based on any 
determination, evidence, or report of fraud or material 
misrepresentation in connection with the origination of such mortgages, 
the mortgagee shall, not later than 15 days after taking such action, 
shall notify the Secretary of the action taken and the reasons for such 
action.''.

SEC. 11. ANNUAL ACTUARIAL STUDY AND QUARTERLY REPORTS ON MUTUAL 
              MORTGAGE INSURANCE FUND.

    Subsection (a) of section 202 of the National Housing Act (12 
U.S.C. 1708(a)) is amended--
            (1) in the second sentence of paragraph (4), by inserting 
        before the period at the end the following: ``, any changes to 
        the current or projected safety and soundness of the Fund since 
        the most recent report under this paragraph or paragraph (5), 
        and any risks to the Fund''; and
            (2) in paragraph (5)--
                    (A) in subparagraph (D), by striking ``and'' at the 
                end;
                    (B) in subparagraph (E), by striking the period at 
                the end and inserting ``; and'';
                    (C) by adding at the end the following:
                    ``(F) any other factors that are likely to have an 
                impact on the financial status of the Fund or cause any 
                material changes to the current or projected safety and 
                soundness of the Fund since the most recent report 
                under paragraph (4).
        The Secretary may include in the report under this paragraph 
        any recommendations not made in the most recent report under 
        paragraph (4) that may be needed to ensure that the Fund 
        remains financially sound.''.

SEC. 12. REVIEW OF DOWNPAYMENT REQUIREMENTS.

    Section 205 of the National Housing Act (12 U.S.C. 1711) is amended 
by adding at the end the following new subsection:
    ``(g) Review of Downpayment Requirements.--If, at any time when the 
capital ratio (as such term is defined in subsection (f)) of the Mutual 
Mortgage Insurance Fund does not comply with the requirement under 
subsection (f)(1), the Secretary establishes a cash investment 
requirement, for all mortgages or mortgagors or with respect to any 
group of mortgages or mortgagors, that exceeds the minimum percentage 
or amount required under section 203(b)(9), thereafter upon the capital 
ratio first complying with the requirement under subsection (f)(1) the 
Secretary shall review such cash investment requirement and, if the 
Secretary determines that such percentage or amount may be reduced 
while maintaining such compliance, the Secretary shall subsequently 
reduce such requirement by such percentage or amount as the Secretary 
considers appropriate.''.

SEC. 13. AUTHORIZATION TO PARTICIPATE IN THE ORIGINATION OF FHA-INSURED 
              LOANS.

    (a) Single Family Mortgages.--Section 203(b) of the National 
Housing Act (12 U.S.C. 1709(b)) is amended by striking paragraph (1) 
and inserting the following new paragraph:
            ``(1) Have been made to a mortgagee approved by the 
        Secretary or to a person or entity authorized by the Secretary 
        under section 202(d)(1) to participate in the origination of 
        the mortgage, and be held by a mortgagee approved by the 
        Secretary as responsible and able to service the mortgage 
        properly.''.
    (b) Home Equity Conversion Mortgages.--Section 255(d) of the 
National Housing Act (12 U.S.C. 1715z-20(d)) is amended by striking 
paragraph (1) and inserting the following new paragraph:
            ``(1) have been originated by a mortgagee approved by, or 
        by a person or entity authorized under section 202(d)(1) to 
        participate in the origination by, the Secretary;''.

SEC. 14. DEFAULT AND ORIGINATION INFORMATION BY LOAN SERVICER AND 
              ORIGINATING DIRECT ENDORSEMENT LENDER.

    (a) Collection of Information.--Paragraph (2) of section 540(b) of 
the National Housing Act (12 U.S.C. 1712 U.S.C. 1735f-18(b)(2)) is 
amended by adding at the end the following new subparagraph:
                    ``(C) For each entity that services insured 
                mortgages, data on the performance of mortgages 
                originated during each calendar quarter occurring 
                during the applicable collection period, disaggregated 
                by the direct endorsement mortgagee from whom such 
                entity acquired such servicing.''.
    (b) Applicability.--Information described in subparagraph (C) of 
section 540(b)(2) of the National Housing Act, as added by subsection 
(a) of this section, shall first be made available under such section 
540 for the applicable collection period (as such term is defined in 
such section) relating to the first calendar quarter ending after the 
expiration of the 12-month period that begins on the date of the 
enactment of this Act.

SEC. 15. THIRD PARTY SERVICER OUTREACH.

    (a) Authority.--The Secretary of Housing and Urban Development may, 
to the extent any amounts for fiscal year 2010 or 2011 are made 
available in advance in appropriation Acts for reimbursements under 
this section, provide reimbursement to servicers of covered mortgages 
(as such term is defined in subsection (f)) for costs of obtaining the 
services of independent third parties meeting the requirements under 
subsection (b) of this section to make in-person contact with 
mortgagors under covered mortgages whose payments under such mortgages 
are 60 or more days past due, solely for the purposes of providing 
information to such mortgagors regarding--
            (1) available counseling by housing counseling agencies 
        approved by the Secretary;
            (2) available mortgage loan modification, refinance, and 
        assistance programs; and
            (3) available counseling regarding financial management and 
        credit risk.
    (b) Qualified Independent Third Parties.--An independent third 
party meets the requirements of this subsection if the third party--
            (1) is an entity, including a housing counseling agency 
        approved by the Secretary, that meets standards, 
        qualifications, and requirements (including regarding 
        foreclosure prevention training, quality monitoring, 
        safeguarding of non-public information) established by the 
        Secretary for purposes of this section for in-person contact 
        about available mortgage loan modification, refinance, and 
        assistance programs; and
            (2) does not charge any fees or require other payments, 
        directly or indirectly, from any mortgagor for making in-person 
        contact and providing information and documents under this 
        section.
    (c) Treatment of Personal, Non-public, and Confidential 
Information.--An independent third party whose services are obtained 
using amounts made available for use under this section and the 
mortgage servicer obtaining such services shall not use, disclose, or 
distribute any personal, non-public, or confidential information about 
a mortgagor obtained during an in-person contact with the mortgagor, 
except for purposes of engaging in the process of modification or 
refinance of the covered mortgage.
    (d) Date of Contact and Disclosures.--Each independent third party 
whose services are obtained by a mortgage servicer using amounts made 
available for use under this section shall--
            (1) initiate in-person contact with a mortgagor not later 
        than 10 days after the date upon which payments under the 
        covered mortgage of the mortgagor become 60 days past due; and
            (2) upon making in-person contact with a mortgagor, provide 
        the mortgagor with a written document that discloses--
                    (A) the name of, and contact information for, the 
                independent third party and the mortgage servicer;
                    (B) that the independent third party has contracted 
                with the mortgage servicer to provide the in-person 
                contact at no charge to the mortgagor;
                    (C) that the independent third party is an agent of 
                the mortgage servicer;
                    (D) that the in-person contact with the mortgagor 
                consists of providing information about available 
                counseling by a housing counseling agency approved by 
                the Secretary and available mortgage loan modification, 
                refinance, and assistance programs;
                    (E) that the independent third party and the 
                mortgage servicer are prohibited from the use, 
                disclosure, or distribution of personal, non-public, 
                and confidential information about the mortgagor, 
                obtained during the in-person contact, except for 
                purposes of engaging in the process of modification or 
                refinance of the covered mortgage;
                    (F) any other information that the Secretary 
                determines should be disclosed.
    (e) Priority.--In providing reimbursements under this section, the 
Secretary of Housing and Urban Development shall provide priority to 
independent third parties serving mortgagors under covered mortgages in 
areas experiencing a mortgage foreclosure rate and unemployment rate 
higher than the national average for the most recent 12-month period 
for which satisfactory data are available.
    (f) Definition of Covered Mortgage.--For purposes of this section, 
the term ``covered mortgage'' means a mortgage on a 1- to 4-family 
residence insured under the provisions of subsection (b) or (k) of 
section 203, section 234(c), or 251 of the National Housing Act (12 
U.S.C. 1709, 1715y, 1715z-16).

SEC. 16. GAO REPORT ON FHA.

    Not later than the expiration of the 12-month period beginning on 
the date of the enactment of this Act, the Comptroller General of the 
United States shall submit to the Congress a report on the single 
family mortgage insurance programs of the Secretary of Housing and 
Urban Development and the Mutual Mortgage Insurance Fund established 
under section 202(a) of the National Housing Act (12 U.S.C. 1708(a)) 
that--
            (1) analyzes such Fund, the economic net worth, capital 
        ratio, and unamortized insurance-in-force (as such terms are 
        defined in section 205(f)(4) of such Act (12 U.S.C. 
        1711(f)(4))) of such Fund, the risks to the Fund, how the 
        capital ratio of the Fund affects the mortgage insurance 
        programs under the Fund and the broader housing market, the 
        extent to which the housing markets are more dependent on 
        mortgage insurance provided through the Fund since the 
        financial crisis began in 2008, and the exposure of the 
        taxpayers for obligations of the Fund;
            (2) analyzes the methodology for determining the Fund's 
        capital ratio under section 205(f) of such Act and examines 
        alternative methods for assessing the Fund's financial 
        condition and their potential impacts on the Fund's ability to 
        meet the operational goals under section 202(a)(7) of such Act;
            (3) analyzes the potential effects of the increases in the 
        limits on the maximum principal obligation of mortgages made by 
        the FHA Modernization Act of 2008 (title I of division B of 
        Public Law 110-289), section 202 of the Economic Stimulus Act 
        of 2008 (Public Law 110-185; 122 Stat. 620), section 1202 of 
        division A of the American Recovery and Reinvestment Act of 
        2009 (Public Law 111-5; 123 Stat. 225), and section 166 of the 
        Continuing Appropriations Resolution, 2010 (as added by section 
        104 of division B of Public Law 111-88; 123 Stat. 29723) on--
                    (A) the risks to and safety and soundness of the 
                Fund;
                    (B) the impact on the affordability and 
                availability of mortgage credit for borrowers for loans 
                authorized under such higher loan limits;
                    (C) the private market for residential mortgage 
                loans that are not insured by the Secretary of Housing 
                and Urban Development; and
                    (D) the Federal National Mortgage Association and 
                the Federal Home Loan Mortgage Corporation; and
            (4) analyzes the impact on affordability to FHA borrowers, 
        and the impact to the Fund, of seller concessions or 
        contributions to a borrower purchasing a residence using a 
        mortgage that is insured by the Secretary.

SEC. 17. AUTHORITY TO ESTABLISH HIGHER MINIMUM CASH INVESTMENT 
              REQUIREMENT.

    (a) Authority.--Paragraph (9) of section 203(b) of the National 
Housing Act (12 U.S.C. 1709(b)(9)) is amended by adding at the end the 
following new subparagraph:
                    ``(D) Authority to establish higher minimum 
                requirement.--The Secretary may establish a higher 
                minimum cash investment requirement than the minimum 
                requirement under subsection (a), for all mortgagors or 
                a certain class or classes of mortgagors, which may be 
                based on criteria related to borrowers' credit scores 
                or other industry standards related to borrowers' 
                financial soundness. In establishing such a higher 
                minimum cash investment requirement, the Secretary 
                shall take into consideration the findings of the most 
                recent annual report to the Congress on minimum cash 
                investments pursuant to section 16(b) of the FHA Reform 
                Act of 2010.''.
    (b) Report.--Not later than the expiration of the 12-month period 
beginning on the date of the enactment of this Act and annually 
thereafter, the Secretary of Housing and Urban Development shall submit 
to the Committee on Financial Services of the House of Representatives 
and the Committee on Banking, Housing, and Urban Affairs of the Senate 
a report detailing the implementation of the minimum cash investment 
requirements under section 203(b)(9) of the National Housing Act (12 
U.S.C. 1709(b)(9)) and discussing and analyzing options for proposed 
changes to such requirements, including changes that would take into 
account borrowers' credit scores or other industry standards related to 
borrowers' financial soundness. Such report shall--
            (1) analyze the impacts that any actual or proposed such 
        changes are projected to have on--
                    (A) the financial soundness of the Mutual Mortgage 
                Insurance Fund;
                    (B) the housing finance market of the United 
                States; and
                    (C) the number of borrowers served by the Federal 
                Housing Administration;
            (2) explain the reasons for any actual or proposed such 
        changes in the such requirements made since the last report 
        under this subsection;
            (3) evaluate the impact of any actual or proposed such 
        changes in such requirements on the Mutual Mortgage Insurance 
        Fund;
            (4) evaluate the impacts of any actual or proposed such 
        changes on potential mortgagors under mortgages on one- to 
        four-family dwellings insured by the Secretary under the 
        National Housing Act; and
            (5) evaluate the impact of any actual or proposed such 
        changes on the soundness of the housing market in the United 
        States.

SEC. 18. MORTGAGE INSURANCE PREMIUM REFUNDS.

    (a) Authority.--The Secretary of Housing and Urban Development 
shall, to the extent that amounts are made available pursuant to 
subsection (c), provide refunds of unearned premium charges paid at the 
time of insurance for mortgage insurance under title II of the National 
Housing Act (12 U.S.C. 1707 et seq.) to or on behalf of mortgagors 
under mortgages described in subsection (b).
    (b) Eligible Mortgages.--A mortgage described in this section is a 
mortgage on a one- to four-family dwelling that--
            (1) was insured under title II of the National Housing Act 
        (12 U.S.C. 1707 et seq.);
            (2) is otherwise eligible, under the last sentence of 
        subparagraph (A) of section 203(c)(2) of such Act (12 U.S.C. 
        1709(c)(2)(A)), for a refund of all unearned premium charges 
        paid on the mortgage pursuant to such subparagraph, except that 
        the mortgage--
                    (A) was closed before December 8, 2004; and
                    (B) was endorsed on or after such date.
    (c) Authorization of Appropriations.--There is authorized to be 
appropriated for each fiscal year such sums as may be necessary to 
provide refunds of unearned mortgage insurance premiums pursuant to 
this section.

SEC. 19. MAXIMUM MORTGAGE AMOUNT LIMITS FOR MULTIFAMILY HOUSING.

    (a) Elevator-type Structures.--
            (1) Amendments.--The National Housing Act is amended in 
        each of the provisions specified in paragraph (2)--
                    (A) by inserting ``with sound standards of 
                construction and design'' after ``elevator-type 
                structures'' the first place such term appears; and
                    (B) by striking ``to not to exceed'' and all that 
                follows through ``sound standards of construction and 
                design'' each place such terms appear and inserting 
                ``by not more than 50 percent of the amounts specified 
                for each unit size''.
            (2) Provisions amended.--The provisions of the National 
        Housing Act specified in this paragraph are as follows:
                    (A) Subparagraph (A) of section 207(c)(3) (12 
                U.S.C. 1713(c)(3)(A)).
                    (B) Subparagraph (A) of section 213(b)(2) (12 
                U.S.C. 1715e(b)(2)(A)).
                    (C) Subclause (I) of section 220(d)(3)(B)(iii) (12 
                U.S.C. 1715k(d)(3)(B)(iii)(I)).
                    (D) In section 221(d) (12 U.S.C. 1715l(d))--
                            (i) subclause (I) of paragraph (3)(ii); and
                            (ii) subclause (I) of paragraph (4)(ii).
                    (E) Subparagraph (A) of section 231(c)(2) (12 
                U.S.C. 1715v(c)(2)(A)).
                    (F) Subparagraph (A) of section 234(e)(3) (12 
                U.S.C. 1715y(e)(3)(A)).
    (b) Extremely High-cost Areas.--Section 214 of the National Housing 
Act (12 U.S.C. 1715d) is amended--
            (1) in the first sentence--
                    (A) by inserting ``, or with respect to projects 
                consisting of more than four dwelling units located in 
                an extremely high-cost area as determined by the 
                Secretary'' after ``or the Virgin Islands'' the first 
                place such term appears;
                    (B) by inserting ``, or to construct projects 
                consisting of more than four dwelling units on property 
                located in an extremely high-cost area as determined by 
                the Secretary'' after ``or the Virgin Islands'' the 
                second place such term appears; and
                    (C) by inserting ``, or with respect to projects 
                consisting of more than four dwelling units located in 
                an extremely high-cost area as determined by the 
                Secretary'' after ``or the Virgin Islands'' the third 
                place such term appears;
            (2) in the second sentence--
                    (A) by inserting ``, or with respect to a project 
                consisting of more than four dwelling units located in 
                an extremely high-cost area as determined by the 
                Secretary,'' after ``or the Virgin Islands'' the first 
                place such term appears; and
                    (B) by inserting ``, or in the case of a project 
                consisting of more than four dwelling units in an 
                extremely high-cost area as determined by the 
                Secretary, in such extremely high-cost area,'' after 
                ``or the Virgin Islands'' the second place such term 
                appears; and
            (3) in the section heading, by striking ``and the virgin 
        islands'' and inserting ``the virgin islands, and extremely 
        high-cost areas''.
    (c) Effective Date.--The amendments made by this section shall 
apply to mortgages insured under title II of the National Housing Act 
after September 30, 2010.

SEC. 20. SPECIAL FORBEARANCE FOR MORTGAGORS WITH CHINESE DRYWALL.

    The provisions of Mortgagee Letter 2002-17 of the Secretary of 
Housing and Urban Development (regarding ``Special Forbearance: Program 
Changes and Updates'') relating to Type I Special Forbearance shall 
apply, until the conclusion of fiscal year 2011 and may not be revoked, 
annulled, repealed, or rescinded during such period, with respect to 
mortgagees of mortgages insured under title II of the National Housing 
Act that are secured by one- to four-family dwellings that have problem 
or damaging drywall products.

SEC. 21. INCREASED LOAN LIMITS FOR DESIGNATED COUNTIES.

    (a) Authority.--Notwithstanding any other provision of law, the 
Secretary of Housing and Urban Development (in this section referred to 
as the ``Secretary'') may increase the dollar amount limitations on the 
principal obligation of mortgages otherwise determined under section 
203(b)(2) of the National Housing Act for any county that is designated 
under this section.
    (b) Procedure.--
            (1) Federal register notice.--Any designation of a county 
        under this section shall be made only pursuant to application 
        by the county for such designation, in accordance with 
        procedures that the Secretary may establish. The Secretary may 
        establish such procedures only by publication in the Federal 
        Register not later than 60 days after the date of the enactment 
        of this Act.
            (2) Final determination.--If the Secretary establishes 
        procedures for applications under paragraph (1) and receives a 
        completed application for designation under this section of a 
        county in accordance with such procedures, the Secretary shall 
        issue a final determination regarding such application for 
        designation, based on the criteria under subsection (c), not 
        later than 60 days after such receipt.
    (c) Determination Criteria.--The Secretary may designate an 
applicant county under this section only if the county is located 
within a micropolitan area (as such term is defined by the Director of 
the Office of Management and Budget) and meets the following criteria:
            (1) More than 70 percent of the border of the applicant 
        county abuts two or more metropolitan statistical areas (as 
        such term is defined by the Director of the Office of 
        Management and Budget) for which each dollar amount limitation 
        on the principal obligation of a mortgage that may be insured 
        under section 203 of the National Housing Act, in effect at the 
        time of such determination, is at least 40 percent greater than 
        the dollar amount limitation for the same size residence for 
        the applicant county. For purposes of such calculation, the 
        dollar amount limitations of such abutting counties shall not 
        include any increase attributable to the authority under this 
        section.
            (2) The applicant county has experienced significant 
        population growth, as evidenced by an increase of 15 percent or 
        more during the 10 years preceding the application, according 
        to statistics of the United States Census Bureau or such other 
        appropriate criteria as the Secretary shall establish.
            (3) The dollar amount limitation on the principal 
        obligation of a mortgage on housing in the applicant county 
        that may be insured under section 203 of the National Housing 
        Act, in effect at the time of such application, is the minimum 
        such dollar amount limitation allowable under the matter that 
        follows clause (ii) in section 203(b)(2)(A) of the National 
        Housing Act.
    (d) Establishment of Loan Limits.--For a county designated under 
this section, the Secretary may increase the maximum dollar amount 
limitations on the principal obligation of mortgages otherwise 
determined under section 203(b)(2) of the National Housing Act to such 
levels as are appropriate, taking into consideration the criteria 
established for such designation, but not to exceed the dollar amount 
limitations for the abutting metropolitan statistical area meeting the 
requirements of subsection (c)(1) that has the lowest such dollar 
amount limitations.
    (e) Effective Date and Term of Designation of New Countywide Loan 
Limits.--A designation of a county under this section, and the maximum 
dollar amount limitations for such county pursuant to subsection (d), 
shall--
            (1) take effect upon the expiration of the 60-day period 
        that begins upon the final determination for the county 
        referred to in subsection (b)(2); and
            (2) remain in effect until the end of the calendar year in 
        which such designation takes effect.
    (f) Loan Limits for Succeeding Years.--With respect to each 
calendar year immediately following the calendar year in which a county 
is designated under this subsection, the Secretary may, notwithstanding 
any other provision of law, continue or adjust the dollar amount 
limitations in effect pursuant to this section for such designated 
county for such preceding year, as appropriate, consistent with the 
criteria under this section.

SEC. 22. IDENTIFICATION REQUIREMENTS FOR BORROWERS.

    Section 203 of the National Housing Act (12 U.S.C. 1709), as 
amended by the preceding provisions of this Act, is further amended by 
adding at the end the following new subsection:
    ``(z) Identification Requirements for Borrowers.--No mortgage on a 
1- to 4-family dwelling may be insured under this title unless the 
mortgagor under such mortgage--
            ``(1) provides a valid Social Security Number; and
            ``(2) is (A) a United States citizen, (B) a lawful 
        permanent resident alien, or (C) a non-permanent resident alien 
        who legally resides in and is authorized to work in the United 
        States.
The Secretary shall establish policies under which mortgagees verify 
compliance with the requirements under this subsection.''.

SEC. 23. REQUIRED CERTIFICATIONS.

    Section 203 of the National Housing Act (12 U.S.C. 1709), as 
amended by the preceding provisions of this Act, is further amended by 
adding at the end the following new subsection:
    ``(z) Required Certifications.--Notwithstanding any other provision 
of law, the Secretary may not insure any mortgage secured by a one- to 
four-family dwelling unless the mortgagor under such mortgage 
certifies, under penalty of perjury, that the mortgagor has not been 
convicted of a sex offense against a minor (as such terms are defined 
in section 111 of the Sex Offender Registration and Notification Act 
(42 U.S.C. 16911)).''.

SEC. 24. PROHIBITION ON USE OF FUNDS FOR CERTAIN FEDERAL EMPLOYEES.

    None of the funds authorized under this Act or any amendment made 
by this Act may be used to pay the salary of any individual engaged in 
activities related to title II of the National Housing Act who has been 
officially disciplined for violations of subpart G of the Standards of 
Ethical Conduct for Employees of the Executive Branch for viewing, 
downloading, or exchanging pornography, including child pornography, on 
a Federal Government computer or while performing official Federal 
Government duties.

SEC. 25. PROHIBITION OF MORTGAGE INSURANCE FOR BORROWERS WITH STRATEGIC 
              DEFAULTS.

    Section 203 of the National Housing Act (12 U.S.C. 1709), as 
amended by the preceding provisions of this Act, is further amended by 
adding at the end the following new subsection:
    ``(z) Prohibition of Mortgage Insurance for Borrowers With 
Strategic Defaults.--
            ``(1) Prohibition.--The Secretary may not newly insure any 
        mortgage under this title that is secured by a 1- to 4-family 
        dwelling unless the mortgagee has determined, in accordance 
        with such standards and requirements established by the 
        Secretary, that the mortgagor under such mortgage has not 
        previously engaged in any strategic default with respect to any 
        residential mortgage loan.
            ``(2) Strategic default.--For purposes of this subsection, 
        the term `strategic default' means, with respect to a 
        residential mortgage loan, an intentional default having such 
        characteristics or under such circumstances as the Secretary 
        shall, by regulation, provide.''.

SEC. 26. PROHIBITION ON TAXPAYER BAILOUT OF FHA PROGRAM.

    Section 205 of the National Housing Act (12 U.S.C. 1711), as 
amended by the preceding provisions of this Act, is further amended by 
adding at the end the following new subsection:
    ``(h) Taxpayer Protection.--The Secretary shall use all available 
actions and methods authorized under law to ensure compliance with 
subsection (f)(2) and to protect the taxpayers of the United States 
from financial responsibility for any obligations of the Fund, 
including authority to increase insurance premiums charged under this 
title for mortgages that are obligations of the Fund, authority to 
establish more stringent underwriting standards for such mortgages, and 
authority to increase the amount of cash or its equivalent required to 
be paid on account of the property subject to such a mortgage.''.

            Passed the House of Representatives June 10, 2010.

            Attest:

                                            LORRAINE C. MILLER,

                                                                 Clerk.
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