I 
111TH CONGRESS 
2D SESSION 
H. R. 4811 
To protect the American taxpayers by improving the safety and soundness 
of the FHA mortgage insurance programs of the Department of Housing 
and Urban Development. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 10, 2010 
Mrs. CAPITO (for herself, Mr. BACHUS, Mrs. BIGGERT, Mr. GARRETT of New 
Jersey, Mr. NEUGEBAUER, Mr. LANCE, Mr. HENSARLING, and Mr. GARY 
G. MILLER of California) introduced the following bill; which was referred 
to the Committee on Financial Services 
A BILL 
To protect the American taxpayers by improving the safety 
and soundness of the FHA mortgage insurance programs 
of the Department of Housing and Urban Development. 
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 ‘‘FHA Safety and 
Soundness and Taxpayer Protection Act of 2010’’. 
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SEC. 2. DEPUTY ASSISTANT SECRETARY OF FHA FOR RISK 
MANAGEMENT. 
(a) ESTABLISHMENT OF POSITION.—Subsection (b) 
of section 4 of the Department of Housing and Urban De-
velopment Act (42 U.S.C. 3533(b)) is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(b)’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) There shall be in the Department, within the 
Federal Housing Administration, a Deputy Assistant Sec-
retary for Risk Management, who shall be appointed by 
the Secretary and shall be responsible to the Federal 
Housing Commissioner for all matters relating to man-
aging and mitigating risk to the mortgage insurance funds 
of the Department and ensuring the performance of mort-
gages insured by the Department.’’. 
(b) TERMINATION.—Upon the appointment and con-
firmation of the initial Deputy Assistant Secretary for 
Risk Management pursuant to section 4(b)(2) of the De-
partment of Housing and Urban Development Act, as 
amended by subsection (a) of this section, the position of 
chief risk officer within the Department of Housing and 
Urban Development, filled by appointment by the Federal 
Housing Commissioner, is abolished. 
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SEC. 3. USE OF OUTSIDE CREDIT RISK ANALYSIS SOURCES. 
Section 202 of the National Housing Act (12 U.S.C. 
1708) is amended by adding at the end the following new 
subsection: 
‘‘(i) USE
OF OUTSIDE CREDIT RISK ANALYSIS 
SOURCES.—To improve the credit risk analysis functions 
of the Department of Housing and Urban Development 
in connection with insurance provided by the Department 
for single-family housing mortgages, the Secretary may 
obtain the services of, and enter into contracts with, pri-
vate and other entities outside of the Department in— 
‘‘(1) analyzing credit risk models and practices 
employed by the Department in connection with 
such mortgages; 
‘‘(2) evaluating underwriting standards applica-
ble to such mortgages insured by the Department; 
and 
‘‘(3) analyzing the performance of lenders in 
complying with, and the Department in enforcing, 
such underwriting standards.’’. 
SEC. 4. AUTHORITY TO INCREASE ANNUAL INSURANCE 
PREMIUMS. 
(a) AUTHORITY.—Paragraph (2) of section 203(c) of 
the National Housing Act (12 U.S.C. 1709(c)(2)) is 
amended— 
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(1) in subparagraph (B), in the matter pre-
ceding clause (i), by inserting ‘‘, except as provided 
in subparagraph (C),’’ before ‘‘0.50 percent’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(C) The Secretary may, if the Secretary 
determines that action pursuant to this sub-
paragraph is necessary to protect the safety and 
soundness of the Mutual Mortgage Insurance 
Fund, establish and collect the annual premium 
payments in an amount not exceeding 1.75 per-
cent of the remaining insured principal balance 
(excluding the portion of the remaining balance 
attributable to the premium collected under 
subparagraph (A) and without taking into ac-
count delinquent payments or prepayments) for 
the first 30 years of the mortgage term.’’. 
(b) EFFECT ON UP-FRONT PREMIUMS.—Subpara-
graph (A) of section 203(c)(2) of the National Housing 
Act (12 U.S.C. 1709(c)(2)(A)) is amended by adding at 
the end the following: ‘‘In establishing the amount of the 
single premium payment pursuant to this subparagraph, 
the Secretary shall consider any increase of the annual 
premium payment pursuant to subparagraph (C) and shall 
ensure that such single and annual premium payments are 
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sufficient to ensure the safety and soundness of the Mu-
tual Mortgage Insurance Fund.’’. 
SEC. 5. RISK-BASED PREMIUM PILOT PROGRAM. 
Title II of the National Housing Act is amended— 
(1) in section 203(c)(2) (12 U.S.C. 1709(c)(2)), 
in the matter preceding subparagraph (A), by strik-
ing ‘‘Notwithstanding’’ and inserting ‘‘Except as 
provided in section 259 and notwithstanding’’; and 
(2) by adding after section 258 (12 U.S.C. 
1715z–24) the following new section: 
‘‘SEC. 259. FLEXIBLE RISK-BASED PREMIUM PILOT PRO-
GRAM. 
‘‘(a) ESTABLISHMENT.—The Secretary shall carry 
out a pilot program to provide a flexible risk-based pre-
mium structure for mortgage insurance premiums only for 
mortgages that are— 
‘‘(1) insured under this title; 
‘‘(2) secured by 1- to 4-family residences; and 
‘‘(3) executed by first-time homebuyers. 
‘‘(b) FLEXIBLE RISK-BASED PREMIUMS.— 
‘‘(1) PREMIUM STRUCTURE.—Under the pilot 
program under this section, the Secretary shall es-
tablish a mortgage insurance premium structure in-
volving a single premium payment collected prior to 
the insurance of the mortgage or periodic payments, 
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or both, without regard to any maximum or min-
imum premium amounts set forth in section 203(c). 
The rate of premium for such a mortgage may vary 
during the mortgage term as long as the basis for 
determining the variable rate is established before 
the execution of the mortgage. The Secretary may 
change a premium structure established under this 
paragraph but only to the extent that such change 
is not applied to any mortgage already executed. 
‘‘(2) NOTICE TO ESTABLISH AND ALTER PRE-
MIUM STRUCTURE.—A premium structure shall be 
established or changed under paragraph (1) only by 
providing notice to mortgagees and to the Congress, 
at least 30 days before the premium structure is es-
tablished or changed. 
‘‘(3) CONSIDERATIONS.—When establishing a 
premium structure under paragraph (1) or when 
changing such a premium structure, the Secretary 
shall consider the following: 
‘‘(A) The effect of the proposed premium 
structure on the Secretary’s ability to meet the 
operational goals of the Mutual Mortgage In-
surance Fund as provided in section 202(a). 
‘‘(B) Underwriting variables. 
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‘‘(C) The extent to which new pricing 
under the proposed premium structure has po-
tential for acceptance in the private market. 
‘‘(D) The administrative capability of the 
Secretary to administer the proposed premium 
structure. 
‘‘(E) The effect of the proposed premium 
structure on the Secretary’s ability to maintain 
the availability of mortgage credit and provide 
stability to mortgage markets. 
‘‘(c) SCOPE.—The Secretary may carry out the pilot 
program under this section on a limited basis or scope, 
except that the program shall be carried out nationwide 
and the Secretary shall ensure wide geographic represen-
tation of residences subject to mortgages insured pursuant 
to the pilot program. 
‘‘(d) LIMITATIONS.— 
‘‘(1) ANNUAL.—In any fiscal year, the aggre-
gate number of mortgages insured pursuant to the 
pilot program 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. 
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‘‘(2) TERM OF PROGRAM.—The aggregate num-
ber or mortgages insured pursuant to the pilot pro-
gram under this section may not exceed 150,000. 
‘‘(e) SUNSET.—After the expiration of the 3-year pe-
riod beginning on the date of the enactment of the FHA 
Safety and Soundness and Taxpayer Protection Act of 
2010, the Secretary may not enter into any new commit-
ment to insure any mortgage, or newly insure any mort-
gage, pursuant to the pilot program under this section.’’. 
SEC. 6. ONGOING LENDER REVIEW OF DELINQUENCIES 
AMONG RECENT ORIGINATIONS AND AU-
THORITY TO SUSPEND LENDERS. 
Section 533 of the National Housing Act (12 U.S.C. 
1735f–11) is amended— 
(1) by striking the section designation and 
heading and inserting the following: 
‘‘SEC. 533. REVIEWS OF MORTGAGEE PERFORMANCE AND 
AUTHORITY TO TEMPORARILY SUSPEND AND 
TERMINATE.’’; 
(2) in subsection (a), by striking ‘‘at least once 
a year’’ and all that follows through the end of the 
subsection and inserting the following: ‘‘the Sec-
retary shall— 
‘‘(1) at least once a year, for each mortgagee 
that originates or underwrites mortgages on single 
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family housing that are insured by the Secretary, re-
view the rate of early defaults and claims for such 
mortgages for such mortgagee; and 
‘‘(2) conduct an ongoing review of mortgages 
on single family housing originated during the pre-
ceding 24 months and insured by the Secretary 
under which the mortgagor has become 60 or more 
days delinquent with respect to payment under the 
mortgage during the first 24 months of the term of 
the mortgage to determine— 
‘‘(A) which mortgages should not have 
been originated or insured and the characteris-
tics of such mortgages; 
‘‘(B) which mortgagees have relatively high 
incidences, as determined by the Secretary, of 
such delinquent mortgages or insurance claims 
on mortgages, with respect to all mortgages 
originated by the mortgagee or mortgages on 
housing located in any particular geographic 
area or areas; and 
‘‘(C) which mortgagees have had a signifi-
cant or rapid increase, as determined by the 
Secretary, in the number or percentage of such 
delinquent mortgages or insurance claims on 
such mortgages, with respect to all mortgages 
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originated by the mortgagee or mortgages on 
housing located in any particular geographic 
area or areas.’’; 
(3) in the first sentence of subsection (b), by in-
serting ‘‘or areas or on a nationwide basis’’ after 
‘‘area’’ each place such term appears; 
(4) in subsection (c)(1), by inserting ‘‘for any 
area or areas, or on a nationwide basis’’ after ‘‘sin-
gle family mortgages’’; and 
(5) by adding at the end the following new sub-
sections: 
‘‘(d) REQUIRED MORTGAGEE INVESTIGATION
FOR 
HIGH EARLY DEFAULT RATES.—If the Secretary deter-
mines pursuant to review under subsection (a)(2) or other-
wise that, with respect to any mortgagee of mortgages on 
single family housing that are insured by the Secretary, 
that— 
‘‘(1) there is a relatively high incidence of mort-
gages originated by such mortgagee under which the 
mortgagor has become 60 or more days delinquent 
with respect to payment under the mortgage during 
the first 24 months of the term of the mortgage, 
with respect to all mortgages originated by such 
mortgagee or mortgages on housing located in any 
particular geographic area or areas, or 
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‘‘(2) there has been a significant or rapid in-
crease in the number or percentage of such delin-
quent mortgages originated by any mortgagee, with 
respect to all mortgages originated by the mortgagee 
or mortgages on housing located in any particular 
geographic area or areas, 
the Secretary shall undertake an investigation of the mort-
gagee to determine if action against such mortgagee under 
subsection (e) of this section is warranted or the matter 
should be referred to the Mortgagee Review Board under 
section 202(c). 
‘‘(e) AUTHORITY TO TEMPORARILY SUSPEND MORT-
GAGEES IN EXIGENT CIRCUMSTANCES.— 
‘‘(1) 
AUTHORITY.—Notwithstanding 
section 
202(c), the Secretary may temporarily suspend the 
approval of a mortgagee to originate or underwrite 
mortgages on single family housing that are insured 
by the Secretary if the Secretary determines, in ac-
cordance with regulations issued by the Secretary, 
that any of the grounds under paragraph (2) of this 
subsection exist. If the grounds under paragraph (2) 
for a suspension of a mortgagee are limited to a par-
ticular geographic area or areas, the suspension may 
apply to such particular geographic area or areas or 
to all business of the mortgagee with the Federal 
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Housing Administration regardless of location of the 
mortgaged properties. 
‘‘(2) GROUNDS.—The grounds under this para-
graph exist for a suspension of a mortgagee pursu-
ant to paragraph (1) only if— 
‘‘(A) there exists adequate evidence of— 
‘‘(i) a relatively high incidence of 
mortgages originated by such mortgagee 
under which the mortgagor has become 60 
or more days delinquent with respect to 
payment under the mortgage during the 
first 24 months of the term of the mort-
gage, with respect to all mortgages origi-
nated by such mortgagee or mortgages on 
housing located in any particular geo-
graphic area or areas; or 
‘‘(ii) a significant or rapid increase in 
the number or percentage such delinquent 
mortgages originated by such mortgagee, 
with respect to all mortgages originated by 
such mortgagee or mortgages on housing 
located in any particular geographic area 
or areas; and 
‘‘(B) continuation of the mortgagee’s ap-
proval, pending or at the completion of any 
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audit, investigation, or other review, or such ad-
ministrative or other legal proceedings as may 
ensue, would not be in— 
‘‘(i) the public interest; or 
‘‘(ii) the best interests of the Depart-
ment, including the best interests of the 
safety and soundness of the insurance 
funds under this title. 
‘‘(3) IMMEDIATE EFFECTIVENESS.—A suspen-
sion of a mortgagee pursuant to this subsection shall 
take effect upon the Secretary providing written no-
tice of the suspension to the mortgagee and to the 
Mortgagee Review Board. Pursuant to such notice, 
the Mortgagee Review Board shall, as promptly as 
possible, review the suspension and the grounds for 
the suspension and make a determination whether to 
terminate the suspension, take other action pursuant 
to section 202(c), or both. Such a suspension shall 
continue in effect until withdrawn by the Secretary 
or terminated by the Mortgagee Review Board pur-
suant to action under section 202(c). 
‘‘(4) CONFERENCE.—If requested in writing by 
the suspended mortgagee within 30 days of the date 
of that notice is provided to the mortgagee, the 
mortgagee shall be entitled to an informal con-
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ference with the official authorized to issue termi-
nation notices on behalf of the Secretary (or a des-
ignee of such official). At the informal conference, 
the mortgagee may present for consideration specific 
factors that it believes were beyond its control and 
that caused the grounds for the suspension. 
‘‘(f) SUFFICIENT RESOURCES.—There is authorized 
to be appropriated to the Secretary for each of fiscal years 
2010 through 2014 the amount necessary to provide 90 
additional full-time equivalent positions for the Depart-
ment, or for entering into such contracts as are necessary, 
to conduct reviews in accordance with the requirements 
of this section. 
‘‘(g) LENDER MONITORING.—In conducting moni-
toring and analysis of the performance of lenders for mort-
gages on single family housing insured under this Act, the 
Secretary shall utilize a 24-month period for such moni-
toring and analysis, to promote earlier identification of 
problem mortgagees and allow earlier intervention and 
sanctions. 
‘‘(h) REPORTING TO CONGRESS.—Not later than 90 
days after the date of enactment of the FHA Safety and 
Soundness and Taxpayer Protection Act of 2010 and not 
less often than annually thereafter, the Secretary shall 
make available to the Committee on Financial Services of 
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the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate any 
information and conclusions pursuant to the reviews re-
quired under subsection (a).’’. 
SEC. 7. INDEMNIFICATION BY MORTGAGEES. 
(a) INDEMNIFICATION
BY DIRECT ENDORSEMENT 
MORTGAGEES.—Section 202 of the National Housing Act 
(12 U.S.C. 1708) is amended by adding at the end the 
following new subsection: 
‘‘(i) INDEMNIFICATION BY MORTGAGEES.— 
‘‘(1) IN GENERAL.—If the Secretary determines 
that a mortgage executed by a mortgagee approved 
by the Secretary under the direct endorsement pro-
gram or insured by a mortgagee pursuant to the del-
egation of authority under section 256 was not origi-
nated or underwritten in accordance with the re-
quirements established by the Secretary, and the 
Secretary pays an insurance claim with respect to 
the mortgage within a reasonable period specified by 
the Secretary, the Secretary may require the mort-
gagee approved by the Secretary under the direct en-
dorsement program or the mortgagee delegated au-
thority under section 256 to indemnify the Secretary 
for the loss. 
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‘‘(2) 
FRAUD
OR
MISREPRESENTATION.—If 
fraud or misrepresentation was involved in connec-
tion with the origination or underwriting, the Sec-
retary may require the mortgagee approved by the 
Secretary under the direct endorsement program or 
the mortgagee delegated authority under section 256 
to indemnify the Secretary for the loss regardless of 
when an insurance claim is paid. 
‘‘(3) REQUIREMENTS AND PROCEDURES.—The 
Secretary shall issue regulations establishing appro-
priate requirements and procedures governing the 
indemnification of the Secretary by the mortgagee.’’. 
(b) DELEGATION OF INSURING AUTHORITY.—Sec-
tion 256 of the National Housing Act (12 U.S.C. 1715z– 
21) is amended— 
(1) by striking subsection (c); 
(2) in subsection (e), by striking ‘‘, including 
requirements and procedures governing the indem-
nification of the Secretary by the mortgagee’’; and 
(3) by redesignating subsections (d) and (e) as 
subsections (c) and (d), respectively. 
SEC. 8. USE OF SAFE MORTGAGE LICENSING ACT IDENTI-
FIERS. 
(a) REQUIREMENT.—Section 202 of the National 
Housing Act (12 U.S.C. 1708), as amended by the pre-
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ceding provisions of this Act, is further amended by add-
ing at the end the following new subsection: 
‘‘(j) USE
OF SAFE MORTGAGE LICENSING ACT 
IDENTIFIERS.—The Secretary shall require each mort-
gagee, as a condition for approval by the Secretary to 
originate or underwrite mortgages on single family or mul-
tifamily housing that are insured by the Secretary, that 
the mortgagee obtain, maintain, and use in all dealings 
and communications with the Department, or otherwise 
relating to any mortgages insured by the Secretary, a 
unique identifier (as such term is defined in section 1503 
of the S.A.F.E. Mortgage Licensing Act of 2008 (12 
U.S.C. 5102)).’’. 
(b) RULEMAKING AND IMPLEMENTATION.—The Sec-
retary of Housing and Urban Development shall conduct 
a rulemaking to carry out subsection (i) of section 202 
of the National Housing Act, as added by the amendment 
made by subsection (a) of this section. The Secretary shall 
implement such subsection (i) not later than the expiration 
of the 120-day period beginning upon the date of the en-
actment of this Act by notice, mortgagee letter, or interim 
final regulations, which shall take effect upon issuance. 
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SEC. 9. REPORTING OF AGGREGATOR ACTIONS TAKEN 
AGAINST MORTGAGEES. 
Section 202 of the National Housing Act (12 U.S.C. 
1708(e)), as amended by the preceding provisions of this 
Act, is further amended by adding at the end the following 
new subsection: 
‘‘(k) NOTIFICATION OF MORTGAGEE ACTIONS.—The 
Secretary shall require each mortgagee, as a condition for 
approval by the Secretary to originate or underwrite mort-
gages on single family or multifamily housing that are in-
sured by the Secretary, if such mortgagee engages in the 
purchase of mortgages insured by the Secretary and origi-
nated by other mortgagees or in the purchase of the serv-
icing rights to such mortgages, and such mortgagee at any 
time takes action to terminate or discontinue such pur-
chases from another mortgagee based on any determina-
tion, evidence, report, or concern of fraud or misrepresen-
tation in connection with the origination of such mort-
gages, or based on the level of defaults on such mortgages, 
the mortgagee shall, not later than 15 days after taking 
such action, shall notify the Secretary of the action taken 
and the reasons for such action.’’. 
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SEC. 10. ANNUAL ACTUARIAL STUDY AND QUARTERLY RE-
PORTS ON MUTUAL MORTGAGE INSURANCE 
FUND. 
Subsection (a) of section 202 of the National Hous-
ing Act (12 U.S.C. 1708(a)) is amended— 
(1) in the second sentence of paragraph (4), by 
inserting before the period at the end the following: 
‘‘, any changes to the current or projected safety 
and soundness of the Fund since the most recent re-
port under this paragraph or paragraph (5), and 
any risks to the Fund’’; and 
(2) in paragraph (5), in the matter that follows 
subparagraph (E), by inserting at the beginning of 
such matter and before ‘‘The first’’ the following: 
‘‘Each such quarterly report shall include an assess-
ment of the financial status of the Fund, any 
changes to the current or projected safety and 
soundness of the Fund since the most recent report 
under paragraph (4) and this paragraph, and any 
risks to the Fund, and shall set forth any rec-
ommendations (in addition to recommendations 
under subparagraph (E)) for actions to ensure that 
the Fund remains financially sound.’’. 
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SEC. 11. DEFAULT AND ORIGINATION INFORMATION BY 
LOAN SERVICER AND ORIGINATING DIRECT 
ENDORSEMENT LENDER. 
Paragraph (2) of section 540(b) of the National 
Housing Act (12 U.S.C. 1712 U.S.C. 1735f–18(b)(2)) is 
amended by adding at the end the following new subpara-
graph: 
‘‘(C) For each entity that services insured 
mortgages, data on the performance of mort-
gages originated during each calendar quarter 
occurring during the applicable collection pe-
riod, disaggregated by the direct endorsement 
mortgagee from whom such entity acquired 
such servicing.’’. 
SEC. 12. GAO REPORTS ON FHA AND GINNIE MAE. 
Not later than the expiration of the 12-month period 
beginning on the date of the enactment of this Act, the 
Comptroller General of the United States shall submit to 
the Congress the following reports: 
(1) FHA REPORT.—A report on the single fam-
ily mortgage insurance programs of the Secretary of 
Housing and Urban Development and the Mutual 
Mortgage Insurance Fund established under section 
202(a) of the National Housing Act (12 U.S.C. 
1708(a)) that— 
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(A) analyzes such Fund, the economic net 
worth, capital ratio, and unamortized insur-
ance-in-force (as such terms are defined in sec-
tion 
205(f)(4) 
of 
such 
Act 
(12 
U.S.C. 
1711(f)(4))) of such Fund, the risks to the 
Fund, how the capital ratio of the Fund affects 
the mortgage insurance programs under the 
Fund and the broader housing market, the ex-
tent to which the housing markets are more de-
pendent 
on 
mortgage 
insurance 
provided 
through the Fund since the financial crisis 
began in 2008, and the exposure of the tax-
payers for obligations of the Fund; 
(B) recommends a capital ratio for the 
Fund (notwithstanding section 205(f)(2) of 
such Act) that is appropriate and sufficient to 
ensure that the operational goals of the Fund 
under section 202(a)(8) (as so redesignated by 
the preceding provisions of this Act) are met; 
(C) analyzes the effects of the increases in 
the limits on the maximum principal obligation 
of mortgages made by the FHA Modernization 
Act of 2008 (title I of division B of Public Law 
110–289), section 202 of the Economic Stim-
ulus Act of 2008 (Public Law 110–185; 122 
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Stat. 620), section 1202 of division A of the 
American Recovery and Reinvestment Act of 
2009 (Public Law 111–5; 123 Stat. 225), and 
section 166 of the Continuing Appropriations 
Resolution, 2010 (as added by section 104 of 
division B of Public Law 111–88; 123 Stat. 
29723) on— 
(i) the risks to and safety and sound-
ness of the Fund; 
(ii) the private market for residential 
mortgage loans that are not insured by the 
Secretary of Housing and Urban Develop-
ment; and 
(iii) the Federal National Mortgage 
Association and the Federal Home Loan 
Mortgage Corporation; and 
(D) analyzes the impacts to the Fund 
caused by seller concessions or contributions to 
a borrower purchasing a residence using a 
mortgage that is insured by the Secretary and 
recommends an appropriate limitation on such 
concessions or contributions. 
(2) GINNIE MAE.—A report on the Government 
National Mortgage Association that identifies— 
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(A) the volume and share of the residential 
mortgage market that consists of mortgages 
that back, or on which are based, securities the 
payment of principal and interest on which is 
guaranteed by such Association and how the 
Association has been affected by the economic 
recession, credit crisis, and downturn in the 
housing markets occurring during 2008, 2009, 
and 2010; 
(B) the capacity of the Association to man-
age the volume of business it conducts and se-
curities it guarantees, particularly with regard 
to the recent dramatic increase in such volume, 
including the ability of the Association to con-
duct appropriate oversight of contractors and 
issuers of securities payment of principal and 
interest on which is guaranteed by the Associa-
tion and conduct proper due diligence and over-
sight in screening the mortgages that back such 
securities or on which such securities are based; 
(C) the impacts, if any, resulting from 
such increased volume of business conducted by 
the Association and securities it guarantees and 
the challenges such increased volume poses to 
the internal controls of the Association; and 
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(D) the existing capital net worth of the 
various aggregators of mortgages that issue se-
curities that are based on or backed by such 
mortgages and payment of principal and inter-
est on which is guaranteed by such Association 
and recommends an appropriate required level 
of net worth for such aggregators and issuers 
to protect the financial interests Federal Gov-
ernment and the taxpayers. 
Æ 
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