I 
112TH CONGRESS 
2D SESSION 
H. R. 6428 
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 HOUSE OF REPRESENTATIVES 
SEPTEMBER 14, 2012 
Mr. WELCH (for himself and Mr. COSTA) introduced the following bill; which 
was referred to the Committee on Financial Services 
A BILL 
To provide for the expansion of affordable refinancing of 
mortgages held by the Federal National Mortgage Asso-
ciation and the Federal Home Loan Mortgage Corpora-
tion. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Responsible Home-
owner Refinancing Act of 2012’’. 
SEC. 2. DEFINITIONS. 
In this Act— 
VerDate Mar 15 2010 
00:55 Sep 19, 2012
Jkt 019200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H6428.IH
H6428
tjames on DSK6SPTVN1PROD with BILLS
(1) the term ‘‘current borrower’’ means a mort-
gagor who is current on the subject mortgage at the 
time of the refinancing, and has had no late pay-
ments in the preceding 6 months and not more than 
1 late payment in the preceding 12 months; 
(2) the term ‘‘eligible mortgage’’ means any 
mortgage that— 
(A) is an existing first mortgage that was 
made for purchase of, or refinancing of another 
first mortgage on, a 1- to 4-family dwelling, in-
cluding a condominium or a share in a coopera-
tive ownership housing association; 
(B) was originated or refinanced on or be-
fore May 31, 2009, unless that date is extended 
by the Director under FHFA’s preexisting au-
thority to do so; 
(C) is owned or guaranteed by an enter-
prise; 
(D) with respect to which, the mortgagor 
is a current borrower; and 
(E) includes existing first mortgages with 
a loan-to-value ratio of less than 80 percent. 
(3) the term ‘‘enterprise’’ means the Federal 
National Mortgage Association and the Federal 
Home Loan Mortgage Corporation; 
VerDate Mar 15 2010 
00:55 Sep 19, 2012
Jkt 019200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H6428.IH
H6428
tjames on DSK6SPTVN1PROD with BILLS
(4) the terms ‘‘FHFA’’ and ‘‘Director’’ mean 
the Federal Housing Finance Agency and the Direc-
tor thereof, respectively; 
(5) the terms ‘‘Home Affordable Refinance Pro-
gram’’ and ‘‘Program’’ mean the Home Affordable 
Refinance Program, administered by the FHFA and 
the enterprises as part of the Making Home Afford-
able initiative announced on March 4, 2009; 
(6) the term— 
(A) ‘‘LTV’’ means loan-to-value, or the 
ratio of the amount of the primary mortgage on 
a property to the value of that property; and 
(B) ‘‘CLTV’’ means combined loan-to- 
value, or the ratio of all mortgage debt on a 
property to the value of the property; 
(7) the term ‘‘same servicer’’ means a lender 
that is providing refinancing for a borrower whose 
loan they already service; 
(8) the term ‘‘qualified lender’’ means a lender 
that is participating in the Program; 
(9) the term ‘‘guarantee fee’’ has the same 
meaning as in section 1327(a) of the Housing and 
Community Development Act of 1992 (12 U.S.C. 
4547(a)); and 
VerDate Mar 15 2010 
00:55 Sep 19, 2012
Jkt 019200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H6428.IH
H6428
tjames on DSK6SPTVN1PROD with BILLS
(10) the term ‘‘average fees’’ means the average 
contractual fee rate of single-family guaranty ar-
rangements charged by an enterprise on April 1, 
2012, plus the recognition of any up-front cash pay-
ments over an estimated average life, expressed in 
terms of basis points, such definition to be inter-
preted in a manner consistent with the annual re-
port on guarantee fees by the FHFA. 
SEC. 3. STREAMLINED REFINANCING CRITERIA UNDER 
THE PROGRAM. 
(a) IN GENERAL.—In carrying out the Home Afford-
able Refinance Program, each enterprise shall adopt and 
adhere to the criteria established under this section. 
(b) BORROWER ELIGIBILITY.—The enterprises shall 
include as eligible borrowers in the Home Affordable Refi-
nance Program all current borrowers who have an eligible 
mortgage and meet those underwriting requirements for 
eligibility for same servicer refinancing in the Program as 
of March 1, 2012, except that the enterprises may not 
disqualify or impose varying rules within the Program for 
borrowers based on LTV, CLTV, employment status or 
income. 
(c) ADDITIONAL RELIEF FROM REPRESENTATIONS 
AND WARRANTIES.—The enterprises shall not require of 
VerDate Mar 15 2010 
00:55 Sep 19, 2012
Jkt 019200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H6428.IH
H6428
tjames on DSK6SPTVN1PROD with BILLS
any qualified lender executing a loan under the Program 
any representations or warranties— 
(1) for the value, marketability, condition, or 
property type of the loan, as such loan characteris-
tics are evidenced by an appraisal or alternative 
valuation method, provided that the lender complies 
with the enterprises’ required methods and stand-
ards for ordering an appraisal under the Program; 
or 
(2) that are not required of same servicers 
under the Program as of March 1, 2012, whether 
that loan is manually underwritten or underwritten 
through an automated system, except that, under no 
circumstances shall greater representations and war-
ranties be required for a loan that is manually un-
derwritten than for one that is underwritten through 
an automated system. 
(d) PROHIBITION ON UP-FRONT FEES.—In carrying 
out the Program, the enterprises may not charge the 
qualified lender any loan level price adjustment, post set-
tlement delivery fee, adverse delivery charge, or other simi-
lar up-front fee. 
(e) APPRAISALS.—The enterprises shall develop and 
allow alternative streamlined methods to determine the 
value of the property for which refinancing is sought 
VerDate Mar 15 2010 
00:55 Sep 19, 2012
Jkt 019200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H6428.IH
H6428
tjames on DSK6SPTVN1PROD with BILLS
through the Program that eliminate the costs to the bor-
rower and qualified lender associated with such determina-
tion. Until such time as such method is developed, and 
when the existing automated valuation models of the en-
terprises are unable to determine the value of a certain 
property for which refinancing is sought through the Pro-
gram, the enterprises shall bear the costs associated with 
the use of manual appraisal of that property, without 
passing on such costs to the borrower or qualified lender. 
(f) LIMITATION.—Notwithstanding any provision of 
the Federal National Mortgage Association Charter Act 
(12 U.S.C. 1716 et seq.) or the Federal Home Loan Mort-
gage Corporation Act (12 U.S.C. 1451 et seq.), an enter-
prise may purchase or guarantee any new mortgage result-
ing from the refinancing of an eligible mortgage pursuant 
to this section, if at the time of origination of the eligible 
mortgage, the eligible mortgage complied with the applica-
ble limitation governing the maximum original principal 
obligation on conventional mortgages that may be pur-
chased or guaranteed by that enterprise. 
(g) GUARANTEE FEES.— 
(1) IN GENERAL.— 
(A) AVERAGE FEE.—On each mortgage re-
financed under the Program in accordance with 
this section, the enterprises shall set the aver-
VerDate Mar 15 2010 
00:55 Sep 19, 2012
Jkt 019200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H6428.IH
H6428
tjames on DSK6SPTVN1PROD with BILLS
age fee required under this Act, as determined 
by the Director in an amount not less than the 
average fees charged by the enterprises as of 
April 1, 2012, for such guarantees. The Direc-
tor shall prohibit an enterprise from offsetting 
the cost of the fee to the mortgage originators, 
borrowers, and investors by decreasing other 
charges, fees, or premiums, or in any other 
manner. 
(B) AUTHORITY
TO
LIMIT
OFFER
OF 
GUARANTEE.—The Director shall prohibit an 
enterprise from consummating any offer for a 
guarantee to a qualified lender for mortgage- 
backed securities, if the guarantee is incon-
sistent with the requirements of this section. 
(2) INFORMATION
COLLECTION
AND
ANAL-
YSIS.—The Director shall require each enterprise to 
provide to the Director, as part of its annual report 
submitted to Congress, for loans refinanced under 
the Program— 
(A) a description of changes made to up- 
front fees and annual fees as part of the guar-
antee fees negotiated with qualified lenders; and 
VerDate Mar 15 2010 
00:55 Sep 19, 2012
Jkt 019200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H6428.IH
H6428
tjames on DSK6SPTVN1PROD with BILLS
(B) an assessment of how the changes in 
the guarantee fees described in subparagraph 
(A) met the requirements of paragraph (1). 
(h) REGULATIONS.—Not later than 30 days after the 
date of enactment of this Act, the Director shall issue any 
regulations or guidance necessary to carry out the changes 
to the Program established under this section, which regu-
lations or guidance shall be put into effect not later than 
90 days after the date of enactment of this Act. 
(i) TERMINATION.—The requirements of this section 
shall expire concurrent with the expiration of the Pro-
gram. 
(j) RULE OF CONSTRUCTION.— 
(1) IN GENERAL.—Nothing in this section shall 
be construed to supersede, preempt, or otherwise 
nullify the requirement that a loan refinanced under 
the Program must benefit the borrower. 
(2) DEFINITION.—For purposes of paragraph 
(1), a loan refinanced under the Program benefits 
the borrower, if the refinanced loan results in— 
(A) reduction in payment; 
(B) reduction in interest rate; 
(C) movement to a more stable product, 
such as from an adjustable rate mortgage to a 
fixed rate mortgage; or 
VerDate Mar 15 2010 
00:55 Sep 19, 2012
Jkt 019200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H6428.IH
H6428
tjames on DSK6SPTVN1PROD with BILLS
(D) reduction in amortization term. 
SEC. 4. INFORMATION FOR BORROWERS ON ELIGIBILITY 
FOR THE PROGRAM. 
(a) NOTICE TO BORROWERS.—Not later than 60 
days after the date of enactment of this Act, the enter-
prises shall notify all borrowers with a mortgage owned 
or guaranteed by an enterprise about the Program and 
its eligibility criteria, and inform borrowers of the website 
required under subsection (b). 
(b) PUBLIC ACCESS TO ELIGIBILITY CRITERIA.—The 
Director shall establish, and the enterprises shall display 
a link on their homepages to, a single website where bor-
rowers may— 
(1) determine their potential eligibility for par-
ticipation in the Program; 
(2) see a complete list of and links to qualified 
lenders; 
(3) use a mortgage refinance calculator to cal-
culate potential payment savings based on different 
interest rates; and 
(4) obtain tips on refinancing their loan. 
SEC. 
5. 
CONSISTENT 
REFINANCING 
GUIDELINES 
RE-
QUIRED. 
Not later than 60 days after the date of enactment 
of this Act, the Director shall issue guidance to require 
VerDate Mar 15 2010 
00:55 Sep 19, 2012
Jkt 019200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H6428.IH
H6428
tjames on DSK6SPTVN1PROD with BILLS