I 
111TH CONGRESS 
1ST SESSION H. R. 2588 
To prevent foreclosure of home mortgages and increase the availability of 
affordable new mortgages and affordable refinancing of mortgages held 
by Fannie Mae and Freddie Mac. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 21, 2009 
Mr. CARDOZA (for himself and Mr. COSTA) introduced the following bill; which 
was referred to the Committee on Financial Services 
A BILL 
To prevent foreclosure of home mortgages and increase the 
availability of affordable new mortgages and affordable 
refinancing of mortgages held by Fannie Mae and 
Freddie Mac. 
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 ‘‘Housing Opportunity 
and Mortgage Equity Act of 2009’’. 
SEC. 2. AFFORDABLE NEW MORTGAGES. 
(a) AUTHORITY.—The Federal National Mortgage 
Association and the Federal Home Loan Mortgage Cor-
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poration shall each carry out a program under this section 
to purchase and securitize qualified new mortgages on sin-
gle-family housing, in accordance with this section and 
policies and procedures that the Director of the Federal 
Housing Finance Agency shall establish. 
(b) REQUIREMENT TO PURCHASE QUALIFIED NEW 
MORTGAGES.—If a lender proffers to an enterprise, in ac-
cordance with requirements established by the Director, 
a mortgage or mortgages for purchase under this section, 
the enterprise shall make a determination of whether such 
mortgage or mortgages are qualified new mortgages. Sub-
ject to subsection (e), if the enterprise determines that 
such mortgage or mortgages meet the requirements for 
qualified new mortgages, the enterprise shall make a com-
mitment to purchase, and shall purchase, the mortgage 
or mortgages. 
(c) QUALIFIED NEW MORTGAGES.—For purposes of 
this section, the term ‘‘qualified new mortgage’’ means a 
mortgage that meets the following requirements: 
(1) SINGLE-FAMILY
HOUSING.—The property 
subject to the mortgage shall be a one- to four-fam-
ily dwelling, including a condominium or a share in 
a cooperative ownership housing association. 
(2) PRINCIPAL
RESIDENCE.—The mortgagor 
under the mortgage shall occupy the property sub-
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ject to the mortgage as his or her principal resi-
dence. 
(3) INTEREST RATE; TERM TO MATURITY.—The 
mortgage shall— 
(A) bear interest at a single rate that is 
fixed for the entire term of the mortgage, which 
shall not exceed an annual rate that is 1.6 per-
centage points higher than the average annual 
rate of interest paid on obligations of the 
United States most recently issued by the Sec-
retary of the Treasury and having 10-year ma-
turities; and 
(B) have a term to maturity of not less 
than 30 years and not more than 40 years from 
the date of the beginning of the amortization of 
the mortgage. 
(4) UNDERWRITING
STANDARDS.—The mort-
gage shall meet such underwriting standards as the 
Director shall require. 
(5) HOME
PURCHASE.—The principal loan 
amount repayment of which is secured by the mort-
gage shall be used to purchase the property that is 
subject to the qualified new mortgage. 
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(6) NEW
MORTGAGES.—The mortgage was 
originated on or after the date of the enactment of 
this Act. 
(d) SECURITIZATION.— 
(1) REQUIREMENT.—Each enterprise shall, 
upon such terms and conditions as it may prescribe, 
set aside any qualified new mortgages purchased by 
it under this section and, upon approval of the Sec-
retary of the Treasury, issue and sell securities 
based upon such mortgages set aside. 
(2) FORM.—Securities issued under this sub-
section may be in the form of debt obligations or 
trust certificates of beneficial interest, or both. 
(3) TERMS.—Securities issued under this sub-
section shall have such maturities and bear such 
rate or rates of interest as may be determined by the 
enterprise with the approval of the Secretary. 
(4) EXEMPTION.—Securities issued by an en-
terprise under this subsection shall, to the same ex-
tent as securities which are direct obligations of or 
obligations guaranteed as to principal and interest 
by the United States, be deemed to be exempt secu-
rities within the meaning of laws administered by 
the Securities and Exchange Commission. 
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(5) PRINCIPAL
AND
INTEREST
PAYMENTS.— 
Mortgages set aside pursuant to this subsection shall 
at all times be adequate to enable the issuing enter-
prise to make timely principal and interest payments 
on the securities issued and sold pursuant to this 
subsection. 
(6) REQUIRED DISCLOSURE.—Each enterprise 
shall insert appropriate language in all of the securi-
ties issued under this subsection clearly indicating 
that such securities, together with the interest there-
on, are not guaranteed by the United States and do 
not constitute a debt or obligation of the United 
States or any agency or instrumentality thereof 
other than the enterprise. 
(e) TERMINATION.—The requirement under sub-
section (b) for the enterprises to purchase mortgages shall 
not apply to any mortgage proferred to an enterprise after 
the expiration of the two-year period beginning on the date 
of the enactment of this Act. 
SEC. 3. AFFORDABLE REFINANCING OF MORTGAGES HELD 
BY FANNIE MAE AND FREDDIE MAC. 
(a) AUTHORITY.—The Federal National Mortgage 
Association and the Federal Home Loan Mortgage Cor-
poration shall each carry out a program under this section 
to provide for the refinancing of qualified mortgages on 
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single-family housing owned by such enterprise and for the 
purchase of and securitization of such refinancing mort-
gages, in accordance with this section and policies and 
procedures that the Director of the Federal Housing Fi-
nance Agency shall establish. Such program shall require 
such refinancing of a qualified mortgage upon the request 
of the mortgagor made to the applicable enterprise and 
a determination by the enterprise that the mortgage is a 
qualified mortgage. 
(b) QUALIFIED REFINANCING MORTGAGE.—For pur-
poses of this section, the term ‘‘qualified mortgage’’ means 
a mortgage that meets the following requirements: 
(1) SINGLE-FAMILY
HOUSING.—The property 
subject to the mortgage shall be a one- to four-fam-
ily dwelling, including a condominium or a share in 
a cooperative ownership housing association. 
(2) 
REFINANCING
OF
GSE-OWNED
MORT-
GAGES.—The principal loan amount repayment of 
which is secured by the mortgage shall be used to 
satisfy all indebtedness under an existing first mort-
gage that— 
(A) was made for purchase of, or refi-
nancing another first mortgage on, the same 
property that is subject to the qualified refi-
nancing mortgage; 
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(B) is owned by the Federal National 
Mortgage Association or the Federal Home 
Loan Mortgage Corporation; and 
(C) was originated on or before January 1, 
2008. 
(3) INTEREST RATE.—The mortgage shall bear 
interest at a single rate that is fixed for the entire 
term of the mortgage, which shall not exceed an an-
nual rate that is 1.6 percentage points higher than 
the average annual rate of interest paid on obliga-
tions of the United States most recently issued by 
the Secretary of the Treasury and having 10-year 
maturities. 
(4) WAIVER OF PREPAYMENT PENALTIES.—All 
penalties for prepayment or refinancing of the un-
derlying mortgage refinanced by the mortgage, and 
all fees and penalties related to the default or delin-
quency on such mortgage, shall have been waived or 
forgiven. 
(c) TERMINATION.—The requirement under sub-
section (a) for the enterprises to refinance qualified mort-
gages shall not apply to any request for refinancing made 
after the expiration of the two-year period beginning on 
the date of the enactment of this Act. 
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SEC. 4. TREASURY FINANCING. 
(a) AUTHORITY.—Subject to subsection (e), the Sec-
retary may purchase securities issued by the enterprises 
pursuant to the programs under this Act and such other 
obligations as may be issued by the enterprises for pur-
poses of carrying out the programs under this Act. 
(b) PUBLIC DEBT TRANSACTION.—For the purpose 
of purchasing any such securities and obligations, the Sec-
retary may use as a public debt transaction the proceeds 
from the sale of any securities issued under chapter 31 
of title 31, United States Code, and the purposes for which 
securities are issued under such chapter are hereby ex-
tended to include any purchase by the Secretary of such 
obligations under this section. 
(c) CHARACTERISTICS
OF OBLIGATIONS.—Obliga-
tions issued and purchased pursuant to this section shall 
be in such forms and denominations, bear such maturities, 
bear interest at such rate, and be subject to such other 
terms and conditions, as the Secretary shall determine. In 
determining the term to maturity of such obligations, the 
Secretary shall take into consideration the terms to matu-
rity of the various securities issued by the enterprises pur-
suant to the programs under this Act and the terms to 
maturity and possibility of prepayment of mortgages pur-
chased and securitized under such programs. 
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(d) TREATMENT.—All redemptions, purchases, and 
sales by the Secretary of obligations under this section 
shall be treated as public debt transactions of the United 
States. 
(e) LIMITATION ON AMOUNT.—The aggregate prin-
cipal amount of outstanding obligations and securities 
purchased under subsection (a) by the Secretary and held 
at any one time may not exceed $10,000,000,000. 
SEC. 5. DEFINITIONS. 
For purposes of this Act, the following definitions 
shall apply: 
(1) DIRECTOR.—The term ‘‘Director’’ means 
the Director of the Federal Housing Finance Agen-
cy. 
(2) 
ENTERPRISE.—The 
term 
‘‘enterprise’’ 
means the Federal National Mortgage Association 
and the Federal Home Loan Mortgage Corporation. 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury. 
Æ 
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