I 

111TH CONGRESS 

1ST SESSION H. R. 3146 

To make improvements to the FHA mortgage insurance programs of the 

Department of Housing and Urban Development, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 9, 2009 

Mr. ADLER of New Jersey (for himself, Mr. LEE of New York, Mr. HIMES, 

and Mr. LANCE) introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

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, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘21 Century FHA 

5 Housing Act of 2009’’. 

6 SEC. 2. MORTGAGE INSURANCE FOR CONDOMINIUMS. 

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

8 1709) is amended by adding at the end the following new 

9 subsection: 


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1 ‘‘(y) INAPPLICABILITY OF ENVIRONMENTAL REVIEW

2 PROVISIONS.—In insuring, under this section, any mort3 gage described in section 201(a)(C), the Secretary shall 

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

5 National Environmental Policy Act of 1969 or any other 

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

7 SEC. 3. ENERGY EFFICIENT MORTGAGES. 

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

9 1992 (42 U.S.C. 12712 note) is amended— 

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

11 each place such term appears; and 

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

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

14 SEC. 4. MODERNIZATION OF WORKFORCE AND RE15 SOURCES. 

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

17 1708) is amended by adding at the end the following new 

18 subsections: 

19 ‘‘(g) PERSONNEL.— 

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

21 502(a) of the Housing Act of 1948 (12 U.S.C. 

22 1701c(a)), the Secretary may appoint and fix the 

23 compensation of such officers and employees of the 

24 Department as the Secretary considers necessary to 

25 carry out the functions of the Secretary under this 


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1 Act and any other functions of the Federal Housing 

2 Administration. Such officers and employees may be 

3 paid without regard to the provisions of chapter 51 

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

5 States Code, relating to classification and General 

6 Schedule pay rates. 

7 ‘‘(2) COMPARABILITY OF COMPENSATION WITH

8 FEDERAL FINANCIAL REGULATORY AGENCIES.—In 

9 fixing and directing compensation under paragraph 

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

11 comparability with compensation of officers and em12 ployees of the Federal Housing Finance Agency, the 

13 Board of Governors of the Federal Reserve System, 

14 and the Federal Deposit Insurance Corporation. 

15 ‘‘(3) PERSONNEL OF OTHER FEDERAL AGEN16 CIES.—In carrying out the functions referred to in 

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

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

19 independent agency, or department on a reimburs20 able basis, with the consent of such agency or de21 partment. 

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

23 The Secretary may procure temporary and intermit24 tent services under section 3109(b) of title 5, United 

25 States Code, to assist the work of the Department 


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1 in carrying out the functions referred to in para2 graph (1). 

3 ‘‘(h) INFORMATION TECHNOLOGY.— 

4 ‘‘(1) IN GENERAL.—In carrying out any pro5 gram under this Act or any other program of the 

6 Federal Housing Administration, the Secretary may 

7 utilize any amounts as may be made available for 

8 such programs to ensure that an appropriate level of 

9 investment in information technology is maintained 

10 in order for the Secretary to upgrade the technology 

11 systems of the Department used in carrying out the 

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

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

14 To the extent that income derived in any fiscal year 

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

16 in excess of the level of income estimated for that 

17 such year for such premium fees and assumed in the 

18 baseline projection prepared by the Director of the 

19 Office of Management and Budget for inclusion in 

20 the President’s annual budget request, not more 

21 than $72,000,000 of such excess amounts may be 

22 used from such amounts for the purpose of carrying 

23 out this subsection. 

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


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

2 Housing and Urban Development shall carry out a 

3 comprehensive training and education program to 

4 improve the service provided by personnel of the De5 partment carrying out functions referred to in sub6 section (g)(1) to users of the mortgage insurance 

7 programs under this Act and any other FHA mort8 gage insurance programs. 

9 ‘‘(2) TOPICS.—The training and education pro10 gram under this subsection shall— 

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

12 the quality and consistency of responses pro13 vided by such personnel of the Department 

14 headquarters and other offices and centers of 

15 the Department regarding regulations, hand16 books, mortgagee letters, and other guidance; 

17 and 

18 ‘‘(B) be designed to— 

19 ‘‘(i) ensure that lenders participating 

20 in the FHA programs may rely on infor21 mation provided by one office or center of 

22 the Department when doing business with 

23 a different office or center; and 

24 ‘‘(ii) prevent such lenders from solic25 iting answers to the same question from 


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1 different offices or centers of the Depart2 ment in an attempt to obtain an answer 

3 that is satisfactory to the lender, by ensur4 ing consistent responses from different of5 fices and centers.’’. 

6 SEC. 5. RISK MANAGEMENT IMPROVEMENTS. 

7 (a) REVIEW OF DELINQUENCIES AND LENDER MON8 ITORING.—Section 202 of the National Housing Act (12 

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

10 this Act, is further amended by adding at the end the fol11 lowing new subsection: 

12 ‘‘(j) RISK MANAGEMENT IMPROVEMENT.— 

13 ‘‘(1) REVIEW OF DELINQUENCIES AMONG RE14 CENT ORIGINATIONS.— 

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

16 conduct an ongoing review of mortgages on sin17 gle family housing originated during the pre18 ceding 12 months and insured pursuant to this 

19 Act under which the mortgagor has become 60 

20 or more days delinquent with respect to pay21 ment under the mortgage during the first 90 

22 days of the term of the mortgage to determine 

23 which mortgages should not have been origi24 nated or insured and the characteristics of such 


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1 mortgages, and which lenders have relatively 

2 high incidences of such delinquent mortgages; 

3 ‘‘(B) SUFFICIENT RESOURCES.—There is 

4 authorized to be appropriated to the Secretary 

5 for each of fiscal years 2010 through 2014 the 

6 amount necessary to provide 90 additional full7 time equivalent positions for the Department, 

8 or for entering into such contracts as are nec9 essary, to conduct reviews in accordance with 

10 the requirements of this section. 

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

12 monitoring and analysis of the performance of lend13 ers for mortgages on single family housing insured 

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

15 period for such monitoring and analysis, to promote 

16 earlier identification of problem lenders and allow 

17 earlier intervention and sanctions.’’. 

18 (b) ANALYSIS OF MORTGAGE PERFORMANCE.—Sec19 tion 203(g)(2) of the Helping Families Save Their Homes 

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

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

22 end; 

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

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


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

2 paragraph: 

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

4 reviewed pursuant to subparagraph (B) on the basis 

5 of performance.’’. 

6 SEC. 6. SENSE OF CONGRESS REGARDING ADEQUATE CAP7 ITAL FLOW FOR MORTGAGE LOANS. 

8 (a) CONGRESSIONAL FINDINGS.—The Congress finds 

9 that— 

10 (1) warehouse lending, which provides short11 term lines of credit to non-depository lenders for 

12 mortgage loans that are eventually sold into the sec13 ondary market to Fannie Mae, Freddie Mac and 

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

15 chain; 

16 (2) according to data obtained pursuant to the 

17 Home Mortgage Disclosure Act of 1975, nondeposi18 tory lenders that utilize warehouse lines of credit ac19 count for as much as 40 percent of all residential 

20 mortgage loans in the United States, and nearly 55 

21 percent of FHA loans, which are increasingly pop22 ular; 

23 (3) it is estimated that since 2006 warehouse 

24 lending capacity available to the mortgage lending 

25 industry has declined by nearly 90 percent to the 


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1 current level of approximately $20 billion to $25 bil2 lion; 

3 (4) based upon projected 2009 lending volume, 

4 there could be a shortfall of hundreds of billions of 

5 dollars in home mortgage availability caused by a 

6 lack of warehouse lending capacity; and 

7 (5) unless Federal regulators promptly address 

8 the issue, borrowers seeking to take advantage of to9 day’s low interest rates will face rising costs and re10 duced credit access, which could undermine the 

11 housing market recovery. 

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

13 the Congress that— 

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

15 of Housing and Urban Development, and the Direc16 tor of the Federal Housing Finance Agency should 

17 use their existing authorities under the Emergency 

18 Economic Stabilization Act of 2008, the Housing 

19 and Economic Recovery Act of 2008, and other stat20 utory and regulatory authorities to provide financial 

21 support and assistance to facilitate increased ware22 house credit capacity by qualified warehouse lenders; 

23 (2) such financial support and assistance 

24 should— 


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

2 credit or lending capacity made available to 

3 qualified mortgage lenders by qualified ware4 house lenders for the purpose of funding resi5 dential mortgage loans; 

6 (B) be provided in such form and manner 

7 as such Secretaries or the Director, as applica8 ble, consider appropriate, which might include 

9 direct loans, guarantees, credit enhancement, 

10 and other incentives; and 

11 (C) comply with other requirements estab12 lished by such Secretaries or the Director, as 

13 applicable. 

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

15 following definitions shall apply: 

16 (1) QUALIFIED MORTGAGE LENDER.—The term 

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

18 (A) is engaged in the business of making 

19 mortgage loans for one- to four-family resi20 dences that are— 

21 (i) insured under title II of the Na22 tional Housing Act (12 U.S.C. 1707 et 

23 seq.); 


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1 (ii) guaranteed, insured, or made 

2 under chapter 37 of title 38, United States 

3 Code; 

4 (iii) made, guaranteed, or insured 

5 under title V of the Housing Act of 1949 

6 (42 U.S.C. 1471 et seq.); or 

7 (iv) eligible for purchase by the Fed8 eral National Mortgage Association or the 

9 Federal Home Loan Mortgage Corpora10 tion; and 

11 (B) is not a depository institution. 

12 (2) QUALIFIED WAREHOUSE LENDER.—The 

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

14 that extends credit to qualified mortgage lenders for 

15 the purpose of originating mortgage loans described 

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

17 origination of such loans by a qualified mortgage 

18 lender. 

19 SEC. 7. FORECLOSURE AVOIDANCE INITIATIVES. 

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

21 1715u) is amended by inserting after subsection (d) the 

22 following new subsection: 

23 ‘‘(e) FORECLOSURE AVOIDANCE DEMONSTRATION

24 PROGRAMS.—The Secretary may carry out such dem25 onstration programs as the Secretary from time to time 


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1 determines are appropriate to demonstrate the effective2 ness of alternative methods of avoiding foreclosure on 

3 mortgages insured under this title, including methods in4 volving short sales and deeds in lieu of foreclosure, and 

5 such methods may involve partial or full payment of insur6 ance benefits to the mortgagee.’’. 

Æ 


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