SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘FHA Reform Act of 
2010’’. 
SEC. 2. MORTGAGE INSURANCE PREMIUMS. 
Subparagraph (B) of section 203(c)(2) of the Na-
tional Housing Act (12 U.S.C. 1709(c)(2)(B)) is amend-
ed— 
(1) in the matter preceding clause (i)— 
(A) by striking ‘‘shall’’ and inserting 
‘‘may’’; and 
(B) by striking ‘‘0.50 percent’’ and insert-
ing ‘‘1.5 percent’’; and 
(2) in clause (ii), by striking ‘‘shall be in an 
amount not exceeding 0.55 percent’’ and inserting 
‘‘may be in an amount not exceeding 1.55 percent’’. 
SEC. 3. INDEMNIFICATION BY 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. 
‘‘(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.’’. 
SEC. 4. DELEGATION OF INSURING AUTHORITY. 
Section 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’’ 
and all that follows through ‘‘by the mortgagee’’; 
and 
(3) by redesignating subsections (d) and (e) as 
subsections (c) and (d), respectively. 
SEC. 5. AUTHORITY TO TERMINATE MORTGAGEE ORIGINA-
TION AND UNDERWRITING APPROVAL. 
Section 533 of the National Housing Act (12 U.S.C. 
1735f–11) is amended— 
(1) in the first sentence of subsection (b), by in-
serting ‘‘or areas or on a nationwide basis’’ after 
‘‘area’’ each place such term appears; and 
(2) in subsection (c), by striking ‘‘(c)’’ and all 
that follows through ‘‘The Secretary’’ in the first 
sentence of paragraph (2) and inserting the fol-
lowing: 
‘‘(c) TERMINATION
OF MORTGAGEE ORIGINATION 
AND UNDERWRITING APPROVAL.— 
‘‘(1) TERMINATION
AUTHORITY.—If the Sec-
retary determines, under the comparison provided in 
subsection (b), that a mortgagee has a rate of early 
defaults and claims that is excessive, the Secretary 
may terminate the approval of the mortgagee to 
originate or underwrite single family mortgages for
any area, or areas, or on a nationwide basis, not-
withstanding section 202(c) of this Act. 
‘‘(2) PROCEDURE.—The Secretary’’. 
SEC. 6. DEPUTY ASSISTANT SECRETARY OF FHA FOR RISK 
MANAGEMENT AND REGULATORY AFFAIRS. 
(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 and Regulatory Affairs, who 
shall be appointed by the Secretary and shall be respon-
sible to the Federal Housing Commissioner for all matters 
relating to managing and mitigating risk to the mortgage 
insurance funds of the Department and ensuring the per-
formance of mortgages insured by the Department.’’. 
(b) TERMINATION.—Upon the appointment and con-
firmation of the initial Deputy Assistant Secretary for 
Risk Management and Regulatory Affairs pursuant to sec-
tion 4(b)(2) of the Department of Housing and Urban De-
velopment Act, as amended by subsection (a) of this sec-
tion, the position of chief risk officer within the Federal
Housing Administration, filled by appointment by the 
Federal Housing Commissioner, is abolished. 
SEC. 7. USE OF OUTSIDE CREDIT RISK ANALYSIS SOURCES. 
Section 202 of the National Housing Act (12 U.S.C. 
1708), as amended by the preceding provisions of this Act, 
is further amended by adding at the end the following new 
subsection: 
‘‘(j) USE
OF OUTSIDE CREDIT RISK ANALYSIS 
SOURCES.—The Secretary may obtain the services of, and 
enter into contracts with, private and other entities out-
side 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. 8. REVIEW OF MORTGAGEE PERFORMANCE. 
Section 533 of the National Housing Act (12 U.S.C. 
1735f–11) is amended— 
(1) in subsection (a), by inserting after the pe-
riod at the end the following: ‘‘For purposes of this
subsection, the term ‘early default’ means a default 
that occurs within 24 months after a mortgage is 
originated or such alternative appropriate period as 
the Secretary shall establish.’’; 
(2) in subsection (b), by inserting after the pe-
riod at the end of the first sentence the following: 
‘‘The Secretary shall also identify which mortgagees 
have had a significant or rapid increase, as deter-
mined by the Secretary, in the number or percentage 
of early defaults and claims on such mortgages, with 
respect to all mortgages originated by the mortgagee 
or mortgages on housing located in any particular 
geographic area or areas.’’; and 
(3) by adding at the end the following new sub-
sections: 
‘‘(d) SUFFICIENT RESOURCES.—There is authorized 
to be appropriated to the Secretary for each of fiscal years 
2010 through 2014 the amount necessary to provide addi-
tional full-time equivalent positions for the Department, 
or for entering into such contracts as are necessary, to 
conduct reviews in accordance with the requirements of 
this section and to carry out other responsibilities relating 
to ensuring the safety and soundness of the Mutual Mort-
gage Insurance Fund.