IIB 

111TH CONGRESS 

1ST SESSION H. R. 3146 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 16, 2009 

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

Urban Affairs 

AN ACT 

To make improvements to the FHA mortgage insurance programs of the Department of Housing and Urban Development, and for other purposes. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘21st Century FHA 

3 Housing Act of 2009’’. 

4 SEC. 2. MORTGAGE INSURANCE FOR CONDOMINIUMS. 

5 Section 203 of the National Housing Act (12 U.S.C. 

6 1709) is amended by adding at the end the following new 

7 subsection: 

8 ‘‘(y) INAPPLICABILITY OF ENVIRONMENTAL REVIEW

9 PROVISIONS.—In insuring, under this section, any mort10 gage described in section 201(a)(C), the Secretary shall 

11 not be subject to the conditions of, or review under, the 

12 National Environmental Policy Act of 1969 or any other 

13 provision of law that furthers the purposes of such Act.’’. 

14 SEC. 3. ENERGY EFFICIENT MORTGAGES. 

15 Section 106(a)(2)(C) of the Energy Policy Act of 

16 1992 (42 U.S.C. 12712 note) is amended— 

17 (1) in clause (i), by inserting ‘‘(i)’’ after ‘‘(A)’’ 

18 each place such term appears; and 

19 (2) in clause (ii), by striking ‘‘203(b)(2)(B)’’ 

20 and inserting ‘‘203(b)(2)(A)(ii)’’. 

21 SEC. 4. MODERNIZATION OF WORKFORCE AND RE22 SOURCES. 

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

24 1708) is amended by adding at the end the following new 

25 subsections: 

26 ‘‘(g) PERSONNEL.— 


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1 ‘‘(1) IN GENERAL.—Notwithstanding section 

2 502(a) of the Housing Act of 1948 (12 U.S.C. 

3 1701c(a)), the Secretary may appoint and fix the 

4 compensation of such officers and employees of the 

5 Department as the Secretary considers necessary to 

6 carry out the functions of the Secretary under this 

7 Act and any other functions of the Federal Housing 

8 Administration. Such officers and employees may be 

9 paid without regard to the provisions of chapter 51 

10 and subchapter III of chapter 53 of title 5, United 

11 States Code, relating to classification and General 

12 Schedule pay rates. 

13 ‘‘(2) COMPARABILITY OF COMPENSATION WITH

14 FEDERAL FINANCIAL REGULATORY AGENCIES.—In 

15 fixing and directing compensation under paragraph 

16 (1), the Secretary shall consult with, and maintain 

17 comparability with compensation of officers and em18 ployees of the Federal Housing Finance Agency, the 

19 Board of Governors of the Federal Reserve System, 

20 and the Federal Deposit Insurance Corporation. 

21 ‘‘(3) PERSONNEL OF OTHER FEDERAL AGEN22 CIES.—In carrying out the functions referred to in 

23 paragraph (1), the Secretary may use information, 

24 services, staff, and facilities of any executive agency, 

25 independent agency, or department on a reimbursVerDate Nov 24 2008 00:08 Sep 17, 2009 Jkt 079200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3146.RFS H3146

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1 able basis, with the consent of such agency or de2 partment. 

3 ‘‘(4) OUTSIDE EXPERTS AND CONSULTANTS.— 

4 The Secretary may procure temporary and intermit5 tent services under section 3109(b) of title 5, United 

6 States Code, to assist the work of the Department 

7 in carrying out the functions referred to in para8 graph (1). 

9 ‘‘(h) INFORMATION TECHNOLOGY.— 

10 ‘‘(1) IN GENERAL.—In carrying out any pro11 gram under this Act or any other program of the 

12 Federal Housing Administration, the Secretary may 

13 utilize any amounts as may be made available for 

14 such programs to ensure that an appropriate level of 

15 investment in information technology is maintained 

16 in order for the Secretary to upgrade the technology 

17 systems of the Department used in carrying out the 

18 functions referred to in subsection (g)(1). 

19 ‘‘(2) USE OF PREMIUM-GENERATED INCOME.— 

20 To the extent that income derived in any fiscal year 

21 from premium fees charged under section 203(c) is 

22 in excess of the level of income estimated for that 

23 such year for such premium fees and assumed in the 

24 baseline projection prepared by the Director of the 

25 Office of Management and Budget for inclusion in 


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1 the President’s annual budget request and subject to 

2 approval in advance in an appropriation Act, not 

3 more than $72,000,000 of such excess amounts may 

4 be used from such amounts for the purpose of car5 rying out this subsection. 

6 ‘‘(i) TRAINING AND EDUCATION PROGRAM.— 

7 ‘‘(1) ESTABLISHMENT.—The Secretary of 

8 Housing and Urban Development shall carry out a 

9 comprehensive training and education program to 

10 improve the service provided by personnel of the De11 partment carrying out functions referred to in sub12 section (g)(1) to users of the mortgage insurance 

13 programs under this Act and any other FHA mort14 gage insurance programs. 

15 ‘‘(2) TOPICS.—The training and education pro16 gram under this subsection shall— 

17 ‘‘(A) have as its primary goal improving 

18 the quality and consistency of responses pro19 vided by such personnel of the Department 

20 headquarters and other offices and centers of 

21 the Department regarding regulations, hand22 books, mortgagee letters, and other guidance; 

23 and 

24 ‘‘(B) be designed to— 


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1 ‘‘(i) ensure that lenders participating 

2 in the FHA programs may rely on infor3 mation provided by one office or center of 

4 the Department when doing business with 

5 a different office or center; and 

6 ‘‘(ii) prevent such lenders from solic7 iting answers to the same question from 

8 different offices or centers of the Depart9 ment in an attempt to obtain an answer 

10 that is satisfactory to the lender, by ensur11 ing consistent responses from different of12 fices and centers.’’. 

13 SEC. 5. RISK MANAGEMENT IMPROVEMENTS. 

14 (a) REVIEW OF DELINQUENCIES AND LENDER MON15 ITORING.—Section 202 of the National Housing Act (12 

16 U.S.C. 1708), as amended by the preceding provisions of 

17 this Act, is further amended by adding at the end the fol18 lowing new subsection: 

19 ‘‘(j) RISK MANAGEMENT IMPROVEMENT.— 

20 ‘‘(1) REVIEW OF DELINQUENCIES AMONG RE21 CENT ORIGINATIONS.— 

22 ‘‘(A) IN GENERAL.—The Secretary shall 

23 conduct an ongoing review of mortgages on sin24 gle family housing originated during the pre25 ceding 12 months and insured pursuant to this 


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1 Act under which the mortgagor has become 60 

2 or more days delinquent with respect to pay3 ment under the mortgage during the first 90 

4 days of the term of the mortgage to determine 

5 which mortgages should not have been origi6 nated or insured and the characteristics of such 

7 mortgages, and which lenders have relatively 

8 high incidences of such delinquent mortgages; 

9 ‘‘(B) REPORTING TO CONGRESS.—Not 

10 later than 90 days after the date of enactment 

11 of the 21st Century FHA Housing Act of 2009, 

12 the Secretary shall make available to the Com13 mittee on Financial Services of the House of 

14 Representatives and the Committee on Bank15 ing, Housing, and Urban Affairs of the Senate 

16 any information and conclusions pursuant to 

17 the review required under subparagraph (A). 

18 ‘‘(C) SUFFICIENT RESOURCES.—There is 

19 authorized to be appropriated to the Secretary 

20 for each of fiscal years 2010 through 2014 the 

21 amount necessary to provide 90 additional full22 time equivalent positions for the Department, 

23 or for entering into such contracts as are nec24 essary, to conduct reviews in accordance with 

25 the requirements of this section. 


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1 ‘‘(2) LENDER MONITORING.—In conducting 

2 monitoring and analysis of the performance of lend3 ers for mortgages on single family housing insured 

4 under this Act, the Secretary shall utilize a one-year 

5 period for such monitoring and analysis, to promote 

6 earlier identification of problem lenders and allow 

7 earlier intervention and sanctions.’’. 

8 (b) ANALYSIS OF MORTGAGE PERFORMANCE.—Sec9 tion 203(g)(2) of the Helping Families Save Their Homes 

10 Act of 2009 (12 U.S.C. 1708 note) is amended— 

11 (1) in paragraph (1), by striking ‘‘and’’ at the 

12 end; 

13 (2) in paragraph (2)(B), by striking the period 

14 at the end and inserting ‘‘; and’’; and 

15 (3) by adding at the end the following new 

16 paragraph: 

17 ‘‘(3) analyze the portion of mortgages randomly 

18 reviewed pursuant to subparagraph (B) on the basis 

19 of performance.’’. 

20 SEC. 6. SENSE OF CONGRESS REGARDING ADEQUATE CAP21 ITAL FLOW FOR MORTGAGE LOANS. 

22 (a) CONGRESSIONAL FINDINGS.—The Congress finds 

23 that— 

24 (1) warehouse lending, which provides short25 term lines of credit to non-depository lenders for 


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1 mortgage loans that are eventually sold into the sec2 ondary market to Fannie Mae, Freddie Mac and 

3 Ginnie Mae, is a critical link in the housing finance 

4 chain; 

5 (2) according to data obtained pursuant to the 

6 Home Mortgage Disclosure Act of 1975, nondeposi7 tory lenders that utilize warehouse lines of credit ac8 count for as much as 40 percent of all residential 

9 mortgage loans in the United States, and nearly 55 

10 percent of FHA loans, which are increasingly pop11 ular; 

12 (3) it is estimated that since 2006 warehouse 

13 lending capacity available to the mortgage lending 

14 industry has declined by nearly 90 percent to the 

15 current level of approximately $20 billion to $25 bil16 lion; 

17 (4) based upon projected 2009 lending volume, 

18 there could be a shortfall of hundreds of billions of 

19 dollars in home mortgage availability caused by a 

20 lack of warehouse lending capacity; and 

21 (5) unless Federal regulators promptly address 

22 the issue, borrowers seeking to take advantage of to23 day’s low interest rates will face rising costs and re24 duced credit access, which could undermine the 

25 housing market recovery. 


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1 (b) SENSE OF THE CONGRESS.—It is the sense of 

2 the Congress that— 

3 (1) the Secretary of the Treasury, the Secretary 

4 of Housing and Urban Development, and the Direc5 tor of the Federal Housing Finance Agency should 

6 use their existing authorities under the Emergency 

7 Economic Stabilization Act of 2008, the Housing 

8 and Economic Recovery Act of 2008, and other stat9 utory and regulatory authorities to provide financial 

10 support and assistance to facilitate increased ware11 house credit capacity by qualified warehouse lenders; 

12 (2) such financial support and assistance 

13 should— 

14 (A) be used only to expand the amount of 

15 credit or lending capacity made available to 

16 qualified mortgage lenders by qualified ware17 house lenders for the purpose of funding resi18 dential mortgage loans; 

19 (B) be provided in such form and manner 

20 as such Secretaries or the Director, as applica21 ble, consider appropriate, which might include 

22 direct loans, guarantees, credit enhancement, 

23 and other incentives; and 


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1 (C) comply with other requirements estab2 lished by such Secretaries or the Director, as 

3 applicable. 

4 (c) DEFINITIONS.—For purposes of this section, the 

5 following definitions shall apply: 

6 (1) QUALIFIED MORTGAGE LENDER.—The term 

7 ‘‘qualified mortgage lender’’ means an entity that— 

8 (A) is engaged in the business of making 

9 mortgage loans for one- to four-family resi10 dences that are— 

11 (i) insured under title II of the Na12 tional Housing Act (12 U.S.C. 1707 et 

13 seq.); 

14 (ii) guaranteed, insured, or made 

15 under chapter 37 of title 38, United States 

16 Code; 

17 (iii) made, guaranteed, or insured 

18 under title V of the Housing Act of 1949 

19 (42 U.S.C. 1471 et seq.); or 

20 (iv) eligible for purchase by the Fed21 eral National Mortgage Association or the 

22 Federal Home Loan Mortgage Corpora23 tion; and 

24 (B) is not a depository institution. 


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1 (2) QUALIFIED WAREHOUSE LENDER.—The 

2 term ‘‘qualified warehouse lender’’ means an entity 

3 that extends credit to qualified mortgage lenders for 

4 the purpose of originating mortgage loans described 

5 in paragraph (1)(A), or that otherwise facilitates the 

6 origination of such loans by a qualified mortgage 

7 lender. 

8 SEC. 7. FORECLOSURE AVOIDANCE INITIATIVES. 

9 Section 230 of the National Housing Act (12 U.S.C. 

10 1715u) is amended by inserting after subsection (d) the 

11 following new subsection: 

12 ‘‘(e) FORECLOSURE AVOIDANCE DEMONSTRATION

13 PROGRAMS.—The Secretary may carry out such dem14 onstration programs as the Secretary from time to time 

15 determines are appropriate to demonstrate the effective16 ness of alternative methods of avoiding foreclosure on 

17 mortgages insured under this title, including methods in18 volving short sales and deeds in lieu of foreclosure, and 

19 such methods may involve partial or full payment of insur20 ance benefits to the mortgagee.’’. 

Passed the House of Representatives September 15, 

2009. 

Attest: LORRAINE C. MILLER, 

Clerk. 


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