I 
112TH CONGRESS 
1ST SESSION H. R. 2425 
To prohibit Fannie Mae, Freddie Mac, and Ginnie Mae from owning or 
guaranteeing any mortgage that is assigned to the Mortgage Electronic 
Registration Systems or for which MERS is the mortgagee of record. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 6, 2011 
Ms. KAPTUR introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To prohibit Fannie Mae, Freddie Mac, and Ginnie Mae from 
owning or guaranteeing any mortgage that is assigned 
to the Mortgage Electronic Registration Systems or for 
which MERS is the mortgagee of record. 
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 ‘‘Transparency and Se-
curity in Mortgage Registration Act of 2011’’. 
SEC. 2. PROHIBITION ON GUARANTEEING MERS MORT-
GAGES. 
(a) FANNIE MAE AND FREDDIE MAC.— 
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(1) FANNIE MAE.—Section 302(b) of the Na-
tional Housing Act (12 U.S.C. 1717(b)) is amended 
by adding at the end the following new paragraph: 
‘‘(7)(A) After the date of the enactment of the Trans-
parency and Security in Mortgage Registration Act of 
2011, the corporation may not purchase, acquire, newly 
lend on the security of, newly invest in securities con-
sisting of, or otherwise newly deal in any MERS mortgage 
or mortgages. 
‘‘(B) After the expiration of the period under sub-
paragraph (C), MERS shall not be the named mortgagee 
or mortgagee of record on any mortgage owned, guaran-
teed, or securitized by the corporation. Not later than the 
expiration of such period, the corporation shall require 
that all mortgage loans owned, guaranteed, or securitized 
at such time by the corporation and on which MERS is 
the named mortgagee or mortgagee of record shall be as-
signed to the servicer, holder, or creditor, as defined by 
the guidelines of the corporation. The corporation shall 
not reimburse the servicer, holder, or creditor for any ex-
pense incurred in the carrying out or recording such an 
assignment. 
‘‘(C)(i) Except as provided in clause (ii), the period 
under this subparagraph is the 6-month period beginning 
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on the date of the enactment of the Transparency and Se-
curity in Mortgage Registration Act of 2011. 
‘‘(ii) In the case of any mortgage owned, guaranteed, 
or securitized by the corporation for which the servicer, 
holder, or creditor has demonstrated to the corporation, 
in accordance with standards established by the Director 
of the Federal Housing Finance Agency, that compliance 
with subparagraph (B) by the expiration of such 6-month 
period will cause a severe threat to the continued financial 
viability of such entity, the period under this subpara-
graph shall be the period that begins on such date of en-
actment and has such duration as determined by the cor-
poration, in accordance with standards established by the 
Director, but in no case has a duration longer than 12 
months. 
‘‘(D) Not later than the expiration of the 6-month 
period referred to in subparagraph (C)(i), the corporation 
shall submit a report detailing its compliance with sub-
paragraph (B) to the Congress, the Director of the Fed-
eral Housing Finance Agency, the Financial Stability 
Oversight Council, and the Director of the Bureau of Con-
sumer Financial Protection of the Federal Reserve Sys-
tem, which shall describe any extensions of the period for 
compliance with subparagraph (B) granted pursuant to 
subparagraph (C). 
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‘‘(E) For purposes of this paragraph, the following 
definitions shall apply: 
‘‘(i) The term ‘MERS’ means the Mortgage 
Electronic Registration Systems, Inc., or any suc-
cessor entity of such corporation. 
‘‘(ii) The term ‘MERS mortgage’ means any 
mortgage— 
‘‘(I) for which the MERS is, or was at any 
time, the original or nominal mortgagee or 
mortgagee of record under the mortgage; 
‘‘(II) that is, or was at any time, assigned 
to or recorded in the MERS; or 
‘‘(III) for which the MERS is, or was at 
any time, acting as nominee in the county land 
records for the lender or servicer of the mort-
gage.’’. 
(2) FREDDIE MAC.—Section 305(a) of the Fed-
eral Home Loan Mortgage Corporation Act (12 
U.S.C. 1454(a)) is amended by adding at the end 
the following new paragraph: 
‘‘(6)(A) After the date of the enactment of the Trans-
parency and Security in Mortgage Registration Act of 
2011, the Corporation may not purchase, acquire, newly 
lend on the security of, newly invest in securities con-
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period will cause a severe threat to the continued financial 
viability of such entity, the period under this subpara-
graph shall be the period that begins on such date of en-
actment and has such duration as determined by the Cor-
poration, in accordance with standards established by the 
Director, but in no case has a duration longer than 12 
months. 
‘‘(D) Not later than the expiration of the 6-month 
period referred to in subparagraph (C)(i), the Corporation 
shall submit a report detailing its compliance with sub-
paragraph (B) to the Congress, the Director of the Fed-
eral Housing Finance Agency, the Financial Stability 
Oversight Council, and the Director of the Bureau of Con-
sumer Financial Protection of the Federal Reserve Sys-
tem, which shall describe any extensions of the period for 
compliance with subparagraph (B) granted pursuant to 
subparagraph (C). 
‘‘(E) For purposes of this paragraph, the following 
definitions shall apply: 
‘‘(i) The term ‘MERS’ means the Mortgage 
Electronic Registration Systems, Inc., or any suc-
cessor entity of such corporation. 
‘‘(ii) The term ‘MERS mortgage’ means any 
mortgage— 
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‘‘(I) for which the MERS is, or was at any 
time, the original or nominal mortgagee or 
mortgagee of record under the mortgage; 
‘‘(II) that is, or was at any time, assigned 
to or recorded in the MERS; or 
‘‘(III) for which the MERS is, or was at 
any time, acting as nominee in the county land 
records for the lender or servicer of the mort-
gage.’’. 
(3) REGULATIONS.—Not later than the expira-
tion of the 90-day period beginning on the date of 
the enactment of this Act, the Director of the Fed-
eral Housing Finance Agency shall issue any regula-
tions necessary to carry out the amendments made 
by paragraphs (1) and (2). In issuing such regula-
tions, the Director shall consult and coordinate with 
the Secretary of Housing and Urban Development to 
ensure that the regulations issued by the Director 
and the regulations issued by the Secretary pursuant 
to subsection (b)(2) of this section are uniform and 
consistent to maximum extent possible. 
(b) GINNIE MAE.— 
(1) PROHIBITION.—Section 302(c) of the Na-
tional Housing Act (12 U.S.C. 1717(c)) is amended 
by adding at the end the following new paragraph: 
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‘‘(6)(A) After the date of the enactment of the Trans-
parency and Security in Mortgage Registration Act of 
2011, the Association may not newly guarantee the pay-
ment of principal of or interest on any trust certificate 
or other security based or backed by a trust or pool that 
contains, or purchase or acquire, any MERS mortgage. 
‘‘(B)(i) After the expiration of the period under sub-
paragraph (C), MERS shall not be the named mortgagee 
or mortgagee of record on any mortgage owned or held 
by the Association or on any mortgage contained in a pool 
backing or on which is based any trust certificate or other 
security the payment of principal of or interest on which 
is guaranteed by the Association. 
‘‘(ii) Not later than the expiration of such period, the 
Association shall require that all mortgage loans that are 
owned or held at such time by the Association, or that 
at such time are contained in a trust or pool backing or 
on which is based a trust certificate or other security the 
payment of principal of or interest on which is guaranteed 
by the Association, and on which MERS is the named 
mortgagee or mortgagee of record, shall be assigned to 
the servicer, holder, or creditor, as defined by the guide-
lines of the Association. The Association shall not reim-
burse the servicer, holder, or creditor for any expense in-
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curred in the carrying out or recording such an assign-
ment. 
‘‘(C)(i) Except as provided in clause (ii), the period 
under this subparagraph is the 6-month period beginning 
on the date of the enactment of the Transparency and Se-
curity in Mortgage Registration Act of 2011. 
‘‘(ii) In the case of any mortgage owned or held by 
the Association, or contained in a trust or pool backing 
or on which is based a trust certificate or other security 
the payment of principal of or interest on which is guaran-
teed by the Association, for which the servicer, holder, or 
creditor has demonstrated to the Association, in accord-
ance with standards established by the Secretary, that 
compliance with subparagraph (B) by the expiration of 
such 6-month period will cause a severe threat to the con-
tinued financial viability of such entity, the period under 
this subparagraph shall be the period that begins on such 
date of enactment and has such duration as determined 
by the Association, in accordance with standards estab-
lished by the Secretary, but in no case has a duration 
longer than 12 months. 
‘‘(D) Not later than the expiration of the 6-month 
period described in subparagraph (C)(i), the Association 
shall submit a report detailing its compliance with sub-
paragraph (B) to the Congress, the Secretary, the Finan-
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cial Stability Oversight Council, and the Director of the 
Bureau of Consumer Financial Protection of the Federal 
Reserve System, which shall describe any extensions of the 
period for compliance with subparagraph (B) granted pur-
suant to subparagraph (C). 
‘‘(E) For purposes of this paragraph, the following 
definitions shall apply: 
‘‘(i) The term ‘MERS’ means the Mortgage 
Electronic Registration Systems, Inc., or any suc-
cessor entity of such corporation. 
‘‘(ii) The term ‘MERS mortgage’ means any 
mortgage— 
‘‘(I) for which the MERS is, or was at any 
time, the original or nominal mortgagee or 
mortgagee of record under the mortgage; 
‘‘(II) that is, or was at any time, assigned 
to or recorded in the MERS; or 
‘‘(III) for which the MERS is, or was at 
any time, acting as nominee in the county land 
records for the lender or servicer of the mort-
gage.’’. 
(2) REGULATIONS.—Not later than the expira-
tion of the 90-day period beginning on the date of 
the enactment of this Act, the Secretary of Housing 
and Urban Development shall issue any regulations 
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necessary to carry out the amendments made by 
paragraphs (1) and (2). In issuing such regulations, 
the Secretary shall consult and coordinate with the 
Director of the Federal Housing Finance Agency to 
ensure that the regulations issued by the Secretary 
and the regulations issued by the Director pursuant 
to subsection (a)(3) of this section are uniform and 
consistent to maximum extent possible. 
SEC. 3. HUD STUDY. 
(a) STUDY.—The Secretary of Housing and Urban 
Development, in consultation with the Comptroller Gen-
eral of the United States, shall conduct a study to analyze 
and determine— 
(1) the impacts of the lack of electronic records 
and uniform standards found in local land title rec-
ordation systems currently used in the various 
States; 
(2) any progress States have made in devel-
oping electronic land title recordation systems for 
their localities that contain uniform standards, and 
any findings and conclusions and best practices re-
sulting from such development; 
(3) the current oversight role of the Federal 
Government in the transfer and recordation of land 
titles; 
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(4) opportunities, and the feasibility of such op-
portunities, that may be present to leverage progress 
made by some States and localities to create an elec-
tronic land title recordation system, including 
through— 
(A) a system that would maintain all pre-
vious records of the land-property without in-
validating, interfering with, or preempting State 
real property law governing the transfer and 
perfection of land title; and 
(B) further actions by the States or by the 
Federal Government, or coordinated actions of 
both; and 
(5) the feasibility of creating a Federal land 
title recordation system for property transfers that 
would maintain all previous records of the land-prop-
erty without invalidating, interfering with, or pre-
empting State real property law governing the trans-
fer and perfection of land title. 
(b) REPORT.—Not later than the expiration of the 
12-month period beginning on the date of the enactment 
of this Act, the Secretary of Housing and Urban Develop-
ment, in consultation with the Comptroller General of the 
United States, shall submit to the Congress a report on 
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the results and findings of the study conducted under this 
section. 
Æ 
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