II 

113TH CONGRESS 

1ST SESSION S. 249 

To provide for the expansion of affordable refinancing of mortgages held 

by the Federal National Mortgage Association and the Federal Home 

Loan Mortgage Corporation. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 7, 2013 

Mr. MENENDEZ (for himself, Mrs. BOXER, Mr. LEAHY, Mr. LAUTENBERG, 

Mr. WHITEHOUSE, Mr. REED, Mrs. SHAHEEN, Mr. FRANKEN, Mr. 

BEGICH, Mr. DURBIN, Ms. STABENOW, Mr. BLUMENTHAL, Mr. SCHUMER, Mr. WYDEN, Mr. LEVIN, Ms. LANDRIEU, Mr. MERKLEY, Mrs. 

GILLIBRAND, Mr. CARDIN, Mrs. HAGAN, Mr. SANDERS, and Mrs. FEINSTEIN) introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To provide for the expansion of affordable refinancing of 

mortgages held by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Responsible Home5 owner Refinancing Act of 2013’’. 


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1 SEC. 2. DEFINITIONS. 

2 In this Act— 

3 (1) the term ‘‘current borrower’’ means a mort4 gagor who is current on the subject mortgage at the 

5 time of the refinancing, and has had no late pay6 ments in the preceding 6 months and not more than 

7 1 late payment in the preceding 12 months; 

8 (2) the term ‘‘eligible mortgage’’ means any 

9 mortgage, regardless of current loan-to-value, that— 

10 (A) is an existing first mortgage that was 

11 made for purchase of, or refinancing of another 

12 first mortgage on, a 1- to 4-family dwelling, in13 cluding a condominium or a share in a coopera14 tive ownership housing association; 

15 (B) was originated or refinanced on or be16 fore May 31, 2009, unless that date is extended 

17 by the Director under FHFA’s preexisting au18 thority to do so; 

19 (C) is owned or guaranteed by an enter20 prise; and 

21 (D) with respect to which, the mortgagor 

22 is a current borrower; 

23 (3) the term ‘‘enterprise’’ means the Federal 

24 National Mortgage Association and the Federal 

25 Home Loan Mortgage Corporation; 


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1 (4) the terms ‘‘FHFA’’ and ‘‘Director’’ mean 

2 the Federal Housing Finance Agency and the Direc3 tor thereof, respectively; 

4 (5) the terms ‘‘Home Affordable Refinance Pro5 gram’’ and ‘‘Program’’ mean the Home Affordable 

6 Refinance Program, administered by the FHFA and 

7 the enterprises as part of the Making Home Afford8 able initiative announced on March 4, 2009; 

9 (6) the term— 

10 (A) ‘‘LTV’’ means loan-to-value, or the 

11 ratio of the amount of the primary mortgage on 

12 a property to the value of that property; and 

13 (B) ‘‘CLTV’’ means combined loan-to14 value, or the ratio of all mortgage debt on a 

15 property to the value of the property; 

16 (7) the term ‘‘same servicer’’ means a lender 

17 that is providing refinancing for a borrower whose 

18 loan they already service; 

19 (8) the term ‘‘qualified lender’’ means a lender 

20 that is participating in the Program; 

21 (9) the term ‘‘guarantee fee’’ has the same 

22 meaning as in section 1327(a) of the Housing and 

23 Community Development Act of 1992 (12 U.S.C. 

24 4547(a)); and 


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1 (10) the term ‘‘average fees’’ means the average 

2 contractual fee rate of single-family guaranty ar3 rangements charged by an enterprise on January 1, 

4 2013, plus the recognition of any up-front cash pay5 ments over an estimated average life, expressed in 

6 terms of basis points, such definition to be inter7 preted in a manner consistent with the annual re8 port on guarantee fees by the FHFA. 

9 SEC. 3. STREAMLINED REFINANCING CRITERIA UNDER 

10 THE PROGRAM. 

11 (a) IN GENERAL.—In carrying out the Home Afford12 able Refinance Program, each enterprise shall adopt and 

13 adhere to the criteria established under this section. 

14 (b) BORROWER ELIGIBILITY.—The enterprises shall 

15 include as eligible borrowers in the Home Affordable Refi16 nance Program all current borrowers who have an eligible 

17 mortgage and meet those underwriting requirements for 

18 eligibility for same servicer refinancing in the Program as 

19 of January 1, 2013, except that the enterprises may not 

20 disqualify or impose varying rules within the Program for 

21 borrowers based on LTV, CLTV, employment status or 

22 income. 

23 (c) ADDITIONAL RELIEF FROM REPRESENTATIONS

24 AND WARRANTIES.—The enterprises shall not require of 


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1 any qualified lender executing a loan under the Program 

2 any representations or warranties— 

3 (1) for the value, marketability, condition, or 

4 property type of the loan, as such loan characteris5 tics are evidenced by an appraisal or alternative 

6 valuation method, provided that the lender complies 

7 with the enterprises’ required methods and stand8 ards for ordering an appraisal under the Program; 

9 or 

10 (2) that are not required of same servicers 

11 under the Program as of January 1, 2013, whether 

12 that loan is manually underwritten or underwritten 

13 through an automated system, except that, under no 

14 circumstances shall greater representations and war15 ranties be required for a loan that is manually un16 derwritten than for one that is underwritten through 

17 an automated system. 

18 (d) PROHIBITION ON UP-FRONT FEES.—In carrying 

19 out the Program, the enterprises may not charge the 

20 qualified lender any loan level price adjustment, post set21 tlement delivery fee, adverse delivery charge, or other simi22 lar up-front fee. 

23 (e) APPRAISALS.—The enterprises shall develop and 

24 allow alternative streamlined methods to determine the 

25 value of the property for which refinancing is sought 


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1 through the Program that eliminate the costs to the bor2 rower and qualified lender associated with such determina3 tion. Until such time as such method is developed, and 

4 when the existing automated valuation models of the en5 terprises are unable to determine the value of a certain 

6 property for which refinancing is sought through the Pro7 gram, the enterprises shall bear the costs associated with 

8 the use of manual appraisal of that property, without 

9 passing on such costs to the borrower or qualified lender. 

10 (f) LIMITATION.—Notwithstanding any provision of 

11 the Federal National Mortgage Association Charter Act 

12 (12 U.S.C. 1716 et seq.) or the Federal Home Loan Mort13 gage Corporation Act (12 U.S.C. 1451 et seq.), an enter14 prise may purchase or guarantee any new mortgage result15 ing from the refinancing of an eligible mortgage pursuant 

16 to this section, if at the time of origination of the eligible 

17 mortgage, the eligible mortgage complied with the applica18 ble limitation governing the maximum original principal 

19 obligation on conventional mortgages that may be pur20 chased or guaranteed by that enterprise. 

21 (g) GUARANTEE FEES.— 

22 (1) IN GENERAL.— 

23 (A) AVERAGE FEE.—On each mortgage re24 financed under the Program in accordance with 

25 this section, the enterprises shall set the averVerDate Mar 15 2010 22:29 Feb 19, 2013 Jkt 029200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S249.IS S249

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1 age fee required under this Act, as determined 

2 by the Director in an amount not less than the 

3 average fees charged by the enterprises as of 

4 January 1, 2013, for such guarantees. The Di5 rector shall prohibit an enterprise from offset6 ting the cost of the fee to the mortgage origina7 tors, borrowers, and investors by decreasing 

8 other charges, fees, or premiums, or in any 

9 other manner. 

10 (B) AUTHORITY TO LIMIT OFFER OF

11 GUARANTEE.—The Director shall prohibit an 

12 enterprise from consummating any offer for a 

13 guarantee to a qualified lender for mortgage14 backed securities, if the guarantee is incon15 sistent with the requirements of this section. 

16 (2) INFORMATION COLLECTION AND ANAL17 YSIS.—The Director shall require each enterprise to 

18 provide to the Director, as part of its annual report 

19 submitted to Congress, for loans refinanced under 

20 the Program— 

21 (A) a description of changes made to up22 front fees and annual fees as part of the guar23 antee fees negotiated with qualified lenders; and 


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1 (B) an assessment of how the changes in 

2 the guarantee fees described in subparagraph 

3 (A) met the requirements of paragraph (1). 

4 (h) REGULATIONS.—Not later than 30 days after the 

5 date of enactment of this Act, the Director shall issue any 

6 regulations or guidance necessary to carry out the changes 

7 to the Program established under this section, which regu8 lations or guidance shall be put into effect not later than 

9 90 days after the date of enactment of this Act. 

10 (i) TERMINATION.—The Program shall expire on De11 cember 31, 2014 and the requirements of this section shall 

12 expire concurrent with the expiration of the Program. Not13 withstanding the prior sentence, the Director, at his or 

14 her discretion, may extend the Program and the require15 ments established under this section shall apply during 

16 any such extension. 

17 (j) RULE OF CONSTRUCTION.— 

18 (1) IN GENERAL.—Nothing in this section shall 

19 be construed to supersede, preempt, or otherwise 

20 nullify the requirement that a loan refinanced under 

21 the Program must benefit the borrower. 

22 (2) DEFINITION.—For purposes of paragraph 

23 (1), a loan refinanced under the Program benefits 

24 the borrower, if the refinanced loan results in— 

25 (A) reduction in payment; 


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1 (B) reduction in interest rate; 

2 (C) movement to a more stable product, 

3 such as from an adjustable rate mortgage to a 

4 fixed rate mortgage; or 

5 (D) reduction in amortization term. 

6 SEC. 4. INFORMATION FOR BORROWERS ON ELIGIBILITY 

7 FOR THE PROGRAM. 

8 (a) NOTICE TO BORROWERS.—Not later than 60 

9 days after the date of enactment of this Act, the enter10 prises shall notify all borrowers with a mortgage owned 

11 or guaranteed by an enterprise about the Program and 

12 its eligibility criteria, and inform borrowers of the website 

13 required under subsection (b). 

14 (b) PUBLIC ACCESS TO ELIGIBILITY CRITERIA.—The 

15 Director shall establish, and the enterprises shall display 

16 a link on their homepages to, a single website where bor17 rowers may— 

18 (1) determine their potential eligibility for par19 ticipation in the Program; 

20 (2) see a complete list of and links to qualified 

21 lenders; 

22 (3) use a mortgage refinance calculator to cal23 culate potential payment savings based on different 

24 interest rates; and 

25 (4) obtain tips on refinancing their loan. 


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1 SEC. 5. CONSISTENT REFINANCING GUIDELINES RE2 QUIRED. 

3 Not later than 60 days after the date of enactment 

4 of this Act, the Director shall issue guidance to require 

5 the enterprises to make their refinancing guidelines con6 sistent to ease the compliance requirements of qualified 

7 lenders, and in particular with respect to loans with less 

8 than an 80 percent loan-to-value ratio and closing cost 

9 policies of the enterprises, which regulations or guidance 

10 shall be put into effect not later than 90 days after the 

11 date of enactment of this Act. 

12 SEC. 6. PROGRESS REPORTS. 

13 The Director shall provide to Congress monthly re14 ports on the progress of the Program, and each enterprise 

15 shall include and disclose, as part of its filings with the 

16 Securities and Exchange Commission on Form 10–Q, 

17 Form 10–K, or any successors thereto, detailed informa18 tion on each enterprise’s progress and results in imple19 menting and executing the Program. 

20 SEC. 7. SEVERABILITY. 

21 If any portion of this Act or the application thereof 

22 to any person or circumstance is held invalid, such inva23 lidity shall not affect the portions or applications of this 

24 Act which can be given effect without the invalid portion 

25 or application. 

Æ 


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