(i) in subparagraph (A), by inserting 
‘‘, as defined in section 201,’’ after ‘‘mort-
gagee’’; 
(ii) by striking subparagraph (B); and 
(iii) by redesignating subparagraphs 
(C) and (D) as subparagraphs (B) and 
(C), respectively. 
(C) MULTIFAMILY
RENTAL
HOUSING
IN-
SURANCE.—Section 207(a)(2) of the National 
Housing Act (12 U.S.C. 1713(a)(2)) is amend-
ed by striking ‘‘means the original lender under 
a mortgage, and its successors and assigns, 
and’’ and inserting ‘‘has the meaning given 
such term in section 201, except that such term 
also’’. 
(D) WAR
HOUSING
INSURANCE.—Section 
601(b) of the National Housing Act (12 U.S.C. 
1736(b)) is amended by striking ‘‘includes the 
original lender under a mortgage, and his suc-
cessors and assigns approved by the Secretary’’ 
and inserting ‘‘has the meaning given such 
term in section 201’’. 
(E) ARMED SERVICES HOUSING MORTGAGE 
INSURANCE.—Section 801(b) of the National 
Housing Act (12 U.S.C. 1748(b)) is amended
by striking ‘‘includes the original lender under 
a mortgage, and his successors and assigns ap-
proved by the Secretary’’ and inserting ‘‘has the 
meaning given such term in section 201’’. 
(F) GROUP
PRACTICE
FACILITIES
MORT-
GAGE INSURANCE.—Section 1106(8) of the Na-
tional Housing Act (12 U.S.C. 1749aaa–5(8)) 
is amended by striking ‘‘means the original 
lender under a mortgage, and his or its succes-
sors and assigns, and’’ and inserting ‘‘has the 
meaning given such term in section 201, except 
that such term also’’. 
(2) ELIGIBILITY FOR INSURANCE.— 
(A) TITLE
I.—Paragraph (1) of section 
8(b) of the National Housing Act (12 U.S.C. 
1706c(b)(1)) is amended— 
(i) by striking ‘‘, and be held by,’’; 
and 
(ii) by striking ‘‘as responsible and 
able to service the mortgage properly’’. 
(B) SINGLE FAMILY HOUSING MORTGAGE 
INSURANCE.—Paragraph (1) of section 203(b) 
of the National Housing Act (12 U.S.C. 
1709(b)(1)) is amended—
(i) by striking ‘‘, and be held by,’’; 
and 
(ii) by striking ‘‘as responsible and 
able to service the mortgage properly’’. 
(C) 
SECTION
221
MORTGAGE
INSUR-
ANCE.—Paragraph (1) of section 221(d) of the 
National Housing Act (12 U.S.C. 1715l(d)(1)) 
is amended— 
(i) by striking ‘‘and be held by’’; and 
(ii) by striking ‘‘as responsible and 
able to service the mortgage properly’’. 
(D) HOME
EQUITY
CONVERSION
MORT-
GAGE
INSURANCE.—Paragraph (1) of section 
255(d) of the National Housing Act (12 U.S.C. 
1715z–20(d)(1)) is amended by striking ‘‘as re-
sponsible and able to service the mortgage prop-
erly’’. 
(E) WAR
HOUSING
MORTGAGE
INSUR-
ANCE.—Paragraph (1) of section 603(b) of the 
National Housing Act (12 U.S.C. 1738(b)(1)) 
is amended— 
(i) by striking ‘‘, and be held by,’’; 
and 
(ii) by striking ‘‘as responsible and 
able to service the mortgage properly’’.
(F) WAR HOUSING MORTGAGE INSURANCE 
FOR LARGE-SCALE HOUSING PROJECTS.—Para-
graph (1) of section 611(b) of the National 
Housing Act (12 U.S.C. 1746(b)(1)) is amend-
ed— 
(i) by striking ‘‘and be held by’’; and 
(ii) by striking ‘‘as responsible and 
able to service the mortgage properly’’. 
(G) GROUP PRACTICE FACILITY MORTGAGE 
INSURANCE.—Section 1101(b)(2) of the Na-
tional Housing Act (12 U.S.C. 1749aaa(b)(2)) 
is amended— 
(i) by striking ‘‘and held by’’; and 
(ii) by striking ‘‘as responsible and 
able to service the mortgage properly’’. 
(H) NATIONAL DEFENSE HOUSING INSUR-
ANCE.—Paragraph (1) of section 903(b) of the 
National Housing Act (12 U.S.C. 1750b(b)(1)) 
is amended— 
(i) by striking ‘‘, and be held by,’’; 
and 
(ii) by striking ‘‘as responsible and 
able to service the mortgage properly’’. 
(I) CONTINGENT REPEAL.—Unless there is 
published in the Federal Register, before the
expiration of the 5-year period beginning on the 
date of the enactment of this Act, an order 
under clause (i) or (ii) of section 201(2)(D) of 
the 
National 
Housing 
Act 
(12 
U.S.C. 
1707(2)(D)), as added by paragraph (1)(A)(2) 
of this subsection, upon the expiration of such 
period the provisions of such Act amended by 
this paragraph are amended to read as such 
provisions would be in effect upon such expira-
tion if this Act had not been enacted (taking 
into consideration any amendments, after such 
date of enactment, to such provisions other 
than under this Act). 
(b) GAO STUDY AND REPORT.— 
(1) STUDY.—The Comptroller General of the 
United States shall conduct a study, upon the expi-
ration of the 42-month period beginning on the date 
of the enactment of this Act, regarding the effect of 
the amendments made by subsection (a), which shall 
analyze and determine— 
(A) the extent to which such amendments 
have resulted in increased participation, by 
mortgage brokers and correspondent lenders, in 
the mortgage insurance programs under the 
National Housing Act, as measured by the
number and amounts of such insured mort-
gages, disaggregated by the States in which the 
properties subject to such mortgages are lo-
cated; 
(B) with respect to mortgages insured 
under such Act, a comparison in the numbers 
and rate of defaults, foreclosures, and mortgage 
insurance claims on such mortgages originated 
by mortgage brokers and correspondent lenders 
authorized to participate in the programs under 
such Act pursuant to the amendments made by 
subsection (a) to such numbers and rates on 
such mortgages originated by lenders who 
would be authorized to participate in such pro-
grams notwithstanding such amendments; 
(C) any impact of such amendments on the 
costs to the Secretary of Housing and Urban 
Development of administering the mortgage in-
surance programs under such title; and 
(D) the extent and effectiveness of the su-
pervision and enforcement, by the Secretary, of 
the additional authority provided under the 
amendments made by subsection (a). 
(2) REPORT.—Not later than the expiration of 
4-year period beginning on the date of the enact-
ment of this Act, the Comptroller General shall sub-
mit a report to the Congress and the Secretary of 
Housing and Urban Development setting forth the 
results and conclusions of the study conducted pur-
suant to paragraph (1). 
SEC. 22. CONFORMING LOAN LIMIT IN DISASTER AREAS. 
Section 203(h) of the National Housing Act (12 
U.S.C. 1709) is amended— 
(1) by inserting after ‘‘property’’ the following: 
‘‘plus any initial service charges, appraisal, inspec-
tion and other fees in connection with the mortgage 
as approved by the Secretary,’’; 
(2) by striking the second sentence (as added 
by chapter 7 of the Emergency Supplemental Appro-
priations Act of 1994 (Public Law 103–211; 108 
Stat. 12)); and 
(3) by adding at the end the following new sen-
tence: ‘‘In any case in which the single family resi-
dence to be insured under this subsection is within 
a jurisdiction in which the President has declared a 
major disaster to have occurred, the Secretary is au-
thorized, for a temporary period not to exceed 36 
months from the date of such Presidential declara-
tion, to enter into agreements to insure a mortgage 
which involves a principal obligation of up to 100
percent of the dollar limitation determined under 
section 305(a)(2) of the Federal Home Loan Mort-
gage Corporation Act for a single family residence, 
and not in excess of 100 percent of the appraised 
value of the property plus any initial service charges, 
appraisal, inspection and other fees in connection 
with the mortgage as approved by the Secretary.’’. 
SEC. 23. FAILURE TO PAY AMOUNTS FROM ESCROW AC-
COUNTS FOR SINGLE FAMILY MORTGAGES. 
(a) PENALTIES.—Section 536 of the National Hous-
ing Act (12 U.S.C. 1735f–14) is amended— 
(1) in subsection (a)(1), by inserting ‘‘servicers 
(including escrow account servicers),’’ after ‘‘ap-
praisers,’’; 
(2) in subsection (b)(1)— 
(A) in the matter preceding subparagraph 
(A), by inserting ‘‘or other participant referred 
to in subsection (a),’’ after ‘‘lender,’’; and 
(B) by inserting at the end the following 
new subparagraphs: 
‘‘(K) In the case of a mortgage for a 1- to 
4-family residence insured under title II that 
requires the mortgagor to make payments to 
the mortgagee or other servicer of the mortgage 
for deposit into an escrow account for the pur-
pose of assuring payment of taxes, insurance 
premiums, and other charges with respect to 
the property, failure on the part of the servicer 
to make any such payment from the escrow ac-
count by the deadline to avoid a penalty with 
respect to such payment provided for in the 
mortgage, unless the servicer was not provided 
notice of such deadline. 
‘‘(L) In the case of any failure to make 
any payment as described in subparagraph (K), 
submitting any information to a consumer re-
porting agency (as such term is defined in sec-
tion 603(f) of the Fair Credit Reporting Act 
(15 U.S.C. 1681a(f))) regarding such failure 
that is adverse to the credit rating or interest 
of the mortgagor.’’; and 
(3) in subsection (c)(3), by adding at the end 
the following: ‘‘In the case of any failure to make a 
payment described in subsection (b)(1)(K) for which 
the servicer fails to reimburse the mortgagor (A) be-
fore the expiration of the 60-day period beginning on 
the deadline to avoid a penalty with respect to such 
payment, in the sum of the amount not paid from 
the escrow account by such deadline and the amount 
of any penalties accruing to the mortgagor that are
attributable to such failure, or (B) in the amount of 
any attorneys fees incurred by the mortgagor and 
attributable to such failure, the Secretary shall in-
crease the amount of the penalty under subsection 
(a) for any such failure to reimburse, unless the Sec-
retary 
determines 
there 
are 
mitigating 
cir-
cumstances.’’. 
(b) PROHIBITION ON SUBMISSION OF INFORMATION 
BY HUD.—Title II of the National Housing Act (12 
U.S.C. 1707 et seq.) is amended by adding at the end 
the following new section: 
‘‘SEC. 257. PROHIBITION REGARDING FAILURE ON PART OF 
SERVICER TO MAKE ESCROW PAYMENTS. 
‘‘In the case of any failure to make any payment as 
described in section 536(b)(1)(K), the Secretary may not 
submit any information to a consumer reporting agency 
(as such term is defined in section 603(f) of the Fair Cred-
it Reporting Act (15 U.S.C. 1681a(f))) regarding such 
failure that is adverse to the credit rating or interest of 
the mortgagor.’’. 
SEC. 24. ACCEPTABLE IDENTIFICATION FOR FHA MORTGA-
GORS. 
(a) IN GENERAL.—Title II of the National Housing 
Act is amended by inserting after section 209 (12 U.S.C. 
1715) the following new section:
‘‘SEC. 210. FORMS OF ACCEPTABLE IDENTIFICATION. 
‘‘The Secretary may not insure a mortgage under any 
provision of this title unless the mortgagor under the 
mortgage provides personal identification in one of the fol-
lowing forms: 
‘‘(1) SOCIAL
SECURITY
CARD
WITH
PHOTO 
IDENTIFICATION CARD OR REAL ID ACT IDENTIFICA-
TION.— 
‘‘(A) A social security card accompanied by 
a photo identification card issued by the Fed-
eral Government or a State Government; or 
‘‘(B) A driver’s license or identification 
card issued by a State in the case of a State 
that is in compliance with title II of the REAL 
ID Act of 2005 (title II of division B of Public 
Law 109–13; 49 U.S.C. 30301 note). 
‘‘(2) PASSPORT.—A passport issued by the 
United States or a foreign government. 
‘‘(3) USCIS PHOTO IDENTIFICATION CARD.—A 
photo identification card issued by the Secretary of 
Homeland Security (acting through the Director of 
the United States Citizenship and Immigration Serv-
ices).’’. 
(b) EFFECTIVE DATE.—The requirements of section 
210 of the National Housing Act (as added by subsection
(a) of this section) shall take effect 6 months after the 
date of the enactment of this Act. 
SEC. 25. PILOT PROGRAM FOR AUTOMATED PROCESS FOR 
BORROWERS WITHOUT SUFFICIENT CREDIT 
HISTORY. 
(a) ESTABLISHMENT.—Title II of the National Hous-
ing Act (12 U.S.C. 1707 et seq.), as amended by the pre-
ceding provisions of this Act, is further amended by add-
ing at the end the following new section: 
‘‘SEC. 258. PILOT PROGRAM FOR AUTOMATED PROCESS 
FOR 
BORROWERS 
WITHOUT 
SUFFICIENT 
CREDIT HISTORY. 
‘‘(a) ESTABLISHMENT.—The Secretary shall carry 
out a pilot program to establish, and make available to 
mortgagees, an automated process for providing alter-
native credit rating information for mortgagors and pro-
spective mortgagors under mortgages on 1- to 4-family 
residences to be insured under this title who have insuffi-
cient credit histories for determining their creditworthi-
ness. Such alternative credit rating information may in-
clude rent, utilities, and insurance payment histories, and 
such other information as the Secretary considers appro-
priate.
‘‘(b) SCOPE.—The Secretary may carry out the pilot 
program under this section on a limited basis or scope, 
and may consider limiting the program— 
‘‘(1) to first-time homebuyers; or 
‘‘(2) metropolitan statistical areas significantly 
impacted by subprime lending. 
‘‘(c) LIMITATION.—In any fiscal year, the aggregate 
number of mortgages insured pursuant to the automated 
process established under this section may not exceed 5 
percent of the aggregate number of mortgages for 1- to 
4-family residences insured by the Secretary under this 
title during the preceding fiscal year. 
‘‘(d) SUNSET.—After the expiration of the 5-year pe-
riod beginning on the date of the enactment of the Ex-
panding American Homeownership Act of 2007, the Sec-
retary may not enter into any new commitment to insure 
any mortgage, or newly insure any mortgage, pursuant to 
the automated process established under this section.’’. 
(b) GAO REPORT.—Not later than the expiration of 
the 4-year period beginning on the date that the Secretary 
of Housing and Urban Development first insures any 
mortgage pursuant to the automated process established 
under pilot program under section 258 of the National 
Housing Act (as added by the amendment made by sub-
section (a) of this section), the Comptroller General of the
United States shall submit to the Congress a report identi-
fying the number of additional mortgagors served using 
such automated process and the impact of such process 
and the insurance of mortgages pursuant to such process 
on the safety and soundness of the insurance funds under 
the National Housing Act of which such mortgages are 
obligations. 
SEC. 26. SENSE OF CONGRESS REGARDING TECHNOLOGY 
FOR FINANCIAL SYSTEMS. 
(a) CONGRESSIONAL FINDINGS.—The Congress finds 
the following: 
(1) The Government Accountability Office has 
cited the FHA single family housing mortgage insur-
ance program as a ‘‘high-risk’’ program, with a pri-
mary reason being non-integrated and out-dated fi-
nancial management systems. 
(2) The ‘‘Audit of the Federal Housing Admin-
istration’s Financial Statements for Fiscal Years 
2004 and 2003’’, conducted by the Inspector Gen-
eral of the Department of Housing and Urban De-
velopment reported as a material weakness that 
‘‘HUD/FHA’s automated data processing [ADP] 
system environment must be enhanced to more effec-
tively support FHA’s business and budget proc-
esses’’.
(3) Existing technology systems for the FHA 
program have not been updated to meet the latest 
standards of the Mortgage Industry Standards 
Maintenance Organization and have numerous defi-
ciencies that lenders have outlined. 
(4) Improvements to technology used in the 
FHA program will— 
(A) allow the FHA program to improve the 
management of the FHA portfolio, garner 
greater efficiencies in its operations, and lower 
costs across the program; 
(B) result in efficiencies and lower costs 
for lenders participating in the program, allow-
ing them to better use the FHA products in ex-
tending homeownership opportunities to higher 
credit risk or lower-income families, in a sound 
manner. 
(5) The Mutual Mortgage Insurance Fund op-
erates without cost to the taxpayers and generates 
revenues for the Federal Government. 
(b) SENSE OF CONGRESS.—It is the sense of the 
Congress that— 
(1) the Secretary of Housing and Urban Devel-
opment should use a portion of the funds received 
from premiums paid for FHA single family housing
mortgage insurance that are in excess of the 
amounts paid out in claims to substantially increase 
the funding for technology used in such FHA pro-
gram; 
(2) the goal of this investment should be to 
bring the technology used in such FHA program to 
the level and sophistication of the technology used in 
the conventional mortgage lending market, or to ex-
ceed such level; and 
(3) the Secretary of Housing and Urban Devel-
opment should report to the Congress not later than 
180 days after the date of the enactment of this Act 
regarding the progress the Department is making 
toward such goal and if progress is not sufficient, 
the resources needed to make greater progress. 
SEC. 27. MULTIFAMILY HOUSING MORTGAGE LIMITS IN 
HIGH COST AREAS. 
The National Housing Act is amended— 
(1) in sections 207(c)(3), 213(b)(2)(B)(i), 
221(d)(3)(ii)(II), 
221(d)(4)(ii)(II), 
231(c)(2)(B), 
and 
234(e)(3)(B) 
(12 
U.S.C. 
1713(c)(3), 
1715e(b)(2)(B)(i), 
1715l(d)(3)(ii)(II), 
1715l(d)(4)(ii)(II), 
1715v(c)(2)(B), 
and 
1715y(e)(3)(B))—
(A) by striking ‘‘140 percent’’ each place 
such term appears and inserting ‘‘170 percent’’; 
and 
(B) by striking ‘‘170 percent in high cost 
areas’’ each place such term appears and in-
serting ‘‘215 percent in high cost areas’’; and 
(2) in section 220(d)(3)(B)(iii)(III) (12 U.S.C. 
1715k(d)(3)(B)(iii)(III)) by striking ‘‘206A’’ and all 
that follows through ‘‘project-by-project basis’’ and 
inserting the following: ‘‘206A of this Act) by not to 
exceed 170 percent in any geographical area where 
the Secretary finds that cost levels so require and by 
not to exceed 170 percent, or 215 percent in high 
cost areas, where the Secretary determines it nec-
essary on a project-by-project basis’’. 
SEC. 28. DISCOUNT SALES OF MULTIFAMILY PROPERTIES. 
There is authorized to be appropriated, for discount 
sales of multifamily real properties under section 207(l) 
or 246 of the National Housing Act (12 U.S.C. 1713(l), 
1715z–11), section 203 of the Housing and Community 
Development Amendments of 1978 (12 U.S.C. 1701z–11), 
or section 204 of the Departments of Veterans Affairs and 
Housing and Urban Development, and Independent Agen-
cies Appropriations Act, 1997 (12 U.S.C. 1715z–11a), 
and for discount loan sales under section 207(k) of the
National Housing Act (12 U.S.C. 1713(k)), section 203 
of the Housing and Community Development Amend-
ments of 1978 (12 U.S.C. 1701z–11(k)), or section 204(a) 
of the Departments of Veterans Affairs and Housing and 
Urban Development, and Independent Agencies Appro-
priations 
Act, 
1997 
(12 
U.S.C. 
1715z–11a(a)), 
$5,000,000, for fiscal year 2008. 
SEC. 29. CLARIFICATION OF DISPOSITION OF CERTAIN 
PROPERTIES. 
Notwithstanding any other provision of law, subtitle 
A of title II of the Deficit Reduction Act of 2005 (12 
U.S.C. 1701z–11 note) and the amendments made by such 
title shall not apply to any transaction regarding a multi-
family real property for which— 
(1) the Secretary of Housing and Urban Devel-
opment has received, before the date of the enact-
ment of such Act, written expressions of interest in 
purchasing the property from both a city govern-
ment and the housing commission of such city; 
(2) after such receipt, the Secretary acquires 
title to the property at a foreclosure sale; and 
(3) such city government and housing commis-
sion have resolved a previous disagreement with re-
spect to the disposition of the property.
SEC. 30. NONCOMPETITIVE SALES BY HUD TO STATES AND 
LOCALITIES. 
Subtitle A of title II of the Deficit Reduction Act of 
2005 (Public Law 109–171; 120 Stat. 7) is amended by 
adding at the end the following new section: 
‘‘SEC. 2004. NONCOMPETITIVE SALES IN FISCAL YEAR 2011. 
‘‘Notwithstanding any other provision of law, the Sec-
retary may not sell any multifamily real property through 
any discount sale during fiscal year 2011 under the provi-
sions of law referred to in section 2002(a) or any multi-
family loan through any discount loan sale during such 
fiscal year under the provisions referred to in section 
2002(b), unless the property or loan is sold for an amount 
that is equal to or greater than 60 percent of the property 
market value or loan market value, respectively.’’. 
SEC. 31. USE OF FHA SAVINGS FOR COSTS OF MORTGAGE 
INSURANCE, 
HOUSING 
COUNSELING, 
FHA 
TECHNOLOGIES, PROCEDURES, AND PROC-
ESSES, 
AND 
FOR 
AFFORDABLE 
HOUSING 
GRANT FUND, AND STUDY. 
(a) IN GENERAL.—Subject to subsection (c), there is 
authorized to be appropriated for each fiscal year an 
amount equal to the net increase for such fiscal year in, 
except as provided in subsection (b), the negative credit 
subsidy for the mortgage insurance programs under title 
II of the National Housing Act resulting from this Act
and the amendments made by this Act, for the following 
purposes in the following amounts: 
(1) SINGLE
FAMILY
HOUSING
MORTGAGE
IN-
SURANCE.—For each fiscal year, for costs (as such 
term is defined in section 502 of the Federal Credit 
Reform Act of 1990 (2 U.S.C. 661a)) of mortgage 
insurance provided pursuant to section 203(b) of the 
National Housing Act (12 U.S.C. 1709(b)), the ad-
ditional amount (not including any costs of such 
mortgage insurance resulting from this Act or the 
amendments made by this Act), if any, necessary to 
ensure that the credit subsidy cost of such mortgage 
insurance for such fiscal year is $0. 
(2) HOUSING COUNSELING.—For each of fiscal 
years 2008 through 2012, the amount needed to in-
crease funding, for the housing counseling program 
under section 106 of the Housing and Urban Devel-
opment Act of 1968 (12 U.S.C. 1701x), in connec-
tion with homebuyers and homeowners with mort-
gages insured under title II of the National Housing 
Act, from the amount appropriated for the preceding 
fiscal year to $100,000,000. 
(3) MORTGAGE INSURANCE TECHNOLOGY, PRO-
CEDURES, 
PROCESSES, 
PROGRAM
PERFORMANCE, 
AND
SALARIES.—For each of fiscal years 2008
through 2012, $25,000,000 for increasing funding 
for the purpose of improving technology, procedures, 
processes, and program performance, and salaries in 
connection with the mortgage insurance programs 
under title II of the National Housing Act. 
(4) AFFORDABLE
HOUSING
FUND.—For each 
fiscal year, for an affordable housing fund available 
for use only for grants to provide affordable rental 
housing and affordable homeownership opportunities 
for low-income families, the amount remaining under 
this section after amounts are made available for 
such fiscal year in accordance with paragraphs (1), 
(2), and (3). 
(b) EXCLUSION OF EARNINGS FROM THE SINGLE 
FAMILY MORTGAGE INSURANCE PROGRAM.—With respect 
to a fiscal year, the negative credit subsidy determined 
under subsection (a) shall not include the negative credit 
subsidy cost for such fiscal year, if any, for mortgage in-
surance provided pursuant to section 203(b) of the Na-
tional Housing Act. 
(c) CERTIFICATION.—Subsection (a) shall not be ef-
fective for a fiscal year unless the Secretary of Housing 
and Urban Development has, by rule making in accord-
ance with section 553 of title 5, United States Code (not-
withstanding subsections (a)(2), (b)(B), and (d)(3) of
such section), made a determination that premiums being, 
or to be, charged during such fiscal year for mortgage in-
surance under title II of the National Housing Act are 
established at the minimum amount sufficient to comply 
with the requirements of section 205(f) of such Act (relat-
ing to required capital ratio for the Mutual Mortgage In-
surance Fund) and ensure the safety and soundness of 
the other mortgage insurance funds under such Act, and 
any negative credit subsidy for such fiscal year resulting 
from such mortgage insurance programs adequately en-
sures the efficient delivery and availability of such pro-
grams. 
(d) STUDY AND REPORT.—The Secretary of Housing 
and Urban Development shall conduct a study to obtain 
recommendations from participants in the private residen-
tial mortgage lending business and the secondary market 
for such mortgages on how best to update and upgrade 
procedures, processes, and technologies for the mortgage 
insurance programs under title II of the National Housing 
Act so that the policies and procedures for originating, in-
suring, and servicing of such mortgages conform with 
those customarily used by secondary market purchasers 
of residential mortgage loans. Not later than the expira-
tion of the 12-month period beginning on the date of the 
enactment of this Act, the Secretary shall submit a report
to the Congress describing the progress made and to be 
made toward updating and upgrading such procedures, 
processes, and technology, and providing appropriate 
staffing for such mortgage insurance programs. 
SEC. 32. LIMITATION ON MORTGAGE INSURANCE PREMIUM 
INCREASES. 
Notwithstanding any other provision of law, including 
any provision of this Act and any amendment made by 
this Act— 
(1) the premiums charged for mortgage insur-
ance under any program under the National Hous-
ing Act may not be increased above the premium 
amounts in effect under such program on October 1, 
2006, unless the Secretary of Housing and Urban 
Development determines that, absent such increase, 
insurance of additional mortgages under such pro-
gram would, under the Federal Credit Reform Act 
of 1990, require the appropriation of new budget au-
thority to cover the costs (as such term is defined 
in section 502 of the Federal Credit Reform Act of 
1990 (2 U.S.C. 661a) of such insurance; and 
(2) a premium increase pursuant to paragraph 
(1) may be made only by rule making in accordance 
with the procedures under section 553 of title 5,
United States Code (notwithstanding subsections 
(a)(2), (b)(B), and (d)(3) of such section). 
SEC. 33. CIVIL MONEY PENALTIES FOR IMPROPERLY IN-
FLUENCING APPRAISALS. 
Paragraph (2) of section 536(b) of the National 
Housing Act (12 U.S.C. 1735f–14(b)(2)) is amended— 
(1) in subparagraph (B), by striking ‘‘or’’ at 
the end; 
(2) in subparagraph (C), by striking the period 
at the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(D) in the case of an insured mortgage 
under title II for a 1- to 4-family residence, 
compensating, instructing, inducing, coercing, 
or intimidating any person who conducts an ap-
praisal of the property in connection with such 
mortgage, or attempting to compensate, in-
struct, induce, coerce, or intimidate such a per-
son, for the purpose of causing the appraised 
value assigned to the property under the ap-
praisal to be based on any other factor other 
than the independent judgment of such person 
exercised in accordance with applicable profes-
sional standards.’’.
SEC. 34. 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 insur-
ance, 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 un-
earned premium charges paid on the mortgage pur-
suant to such subparagraph, except that the mort-
gage— 
(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.