I 
113TH CONGRESS 
1ST SESSION H. R. 1145 
To help ensure the fiscal solvency of the FHA mortgage insurance programs 
of the Secretary of Housing and Urban Development, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 13, 2013 
Ms. WATERS (for herself and Mr. CAPUANO) introduced the following bill; 
which was referred to the Committee on Financial Services 
A BILL 
To help ensure the fiscal solvency of the FHA mortgage 
insurance programs of the Secretary of Housing and 
Urban Development, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘FHA Emergency Fiscal Solvency Act of 2013’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
Sec. 2. FHA annual mortgage insurance premiums. 
Sec. 3. Indemnification by FHA mortgagees. 
Sec. 4. Early period delinquencies. 
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Sec. 5. Semiannual actuarial studies of MMIF during periods of capital deple-
tion. 
Sec. 6. Delegation of FHA insuring authority. 
Sec. 7. Authority to terminate FHA mortgagee origination and underwriting 
approval. 
Sec. 8. Authorization to participate in the origination of FHA-insured loans. 
Sec. 9. Reporting of mortgagee actions taken against other mortgagees. 
Sec. 10. Default and origination information by loan servicer and originating 
direct endorsement lender. 
Sec. 11. Deputy Assistant Secretary of FHA for Risk Management and Regu-
latory Affairs. 
Sec. 12. Establishment of Chief Risk Officer for GNMA. 
Sec. 13. Report on mortgage servicers. 
Sec. 14. FHA emergency capital plan. 
Sec. 15. FHA safety and soundness review. 
Sec. 16. FHA disclosure standards. 
Sec. 17. Report on streamlining FHA programs. 
Sec. 18. Budget compliance. 
SEC. 2. FHA ANNUAL MORTGAGE INSURANCE PREMIUMS. 
(a) IN GENERAL.—Subparagraph (B) of section 
203(c)(2) of the National Housing Act (12 U.S.C. 
1709(c)(2)(B)) is amended— 
(1) in the matter preceding clause (i)— 
(A) by striking ‘‘may’’ and inserting 
‘‘shall’’; 
(B) by striking ‘‘not exceeding 1.5 per-
cent’’ and inserting ‘‘not less than 0.55 per-
cent’’; and 
(C) by inserting ‘‘and not exceeding 2.0 
percent of such remaining insured principal bal-
ance’’ before ‘‘for the following periods:’’; and 
(2) in clause (ii), by striking ‘‘1.55 percent’’ 
and inserting ‘‘2.05 percent’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) take effect upon the expiration of the 6- 
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month period beginning on the date of the enactment of 
this Act. 
SEC. 3. INDEMNIFICATION BY FHA 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 the mortgagee knew, or should have known, of 
a serious or material violation of the requirements 
established by the Secretary with respect to a mort-
gage executed by a mortgagee approved by the Sec-
retary under the direct endorsement program or in-
sured by a mortgagee pursuant to the delegation of 
authority under section 256 such that the mortgage 
loan should not have been approved and endorsed 
for insurance, and the Secretary pays an insurance 
claim with respect to the mortgage within a reason-
able period specified by the Secretary, the Secretary 
may require the mortgagee approved by the Sec-
retary under the direct endorsement program or the 
mortgagee delegated authority under section 256 to 
indemnify the Secretary for the loss, irrespective of 
whether the violation caused the mortgage default. 
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‘‘(2) 
FRAUD
OR
MISREPRESENTATION.—If 
fraud or misrepresentation was involved in connec-
tion with the origination or underwriting and the 
Secretary determines that the mortgagee knew or 
should have known of the fraud or misrepresenta-
tion, the Secretary shall require the mortgagee ap-
proved by the Secretary under the direct endorse-
ment 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) APPEALS PROCESS.—The Secretary shall, 
by regulation, establish an appeals process for mort-
gagees to appeal indemnification determinations 
made pursuant to paragraph (1) or (2). 
‘‘(4) REQUIREMENTS AND PROCEDURES.—The 
Secretary shall issue regulations establishing appro-
priate requirements and procedures governing the 
indemnification of the Secretary by the mortgagee, 
including public reporting on— 
‘‘(A) the number of loans that— 
‘‘(i) were not originated or under-
written in accordance with the require-
ments established by the Secretary; and 
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‘‘(ii) involved fraud or misrepresenta-
tion in connection with the origination or 
underwriting; and 
‘‘(B) the financial impact on the Mutual 
Mortgage Insurance Fund when indemnification 
is required.’’. 
SEC. 4. EARLY PERIOD DELINQUENCIES. 
Subsection (a) of section 202 of the National Hous-
ing Act (12 U.S.C. 1708(a)) is amended by adding at the 
end the following new paragraphs: 
‘‘(8) PROGRAMMATIC
REVIEW
OF
EARLY
PE-
RIOD DELINQUENCIES.—The Secretary shall estab-
lish and maintain a program— 
‘‘(A) to review the cause of each early pe-
riod delinquency on a mortgage that is an obli-
gation of the Mutual Mortgage Insurance Fund; 
‘‘(B) to require indemnification of the Sec-
retary for a loss associated with any such early 
period delinquency that is the result of a mate-
rial violation, as determined by the Secretary, 
of any provision, regulation, or other guideline 
established or promulgated pursuant to this 
title; and 
‘‘(C) to publicly report— 
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‘‘(i) a summary of the results of all 
early period delinquencies reviewed under 
subparagraph (A); 
‘‘(ii) any indemnifications required 
under subparagraph (B); and 
‘‘(iii) the financial impact on the Mu-
tual Mortgage Insurance Fund of any such 
indemnifications. 
‘‘(9) DEFINITION
OF
EARLY
PERIOD
DELIN-
QUENCY.—For purposes of this section, the term 
‘early period delinquency’ means, with respect to a 
mortgage, that the mortgage becomes 90 or more 
days delinquent within 24 months of the origination 
of such mortgage.’’. 
SEC. 5. SEMIANNUAL ACTUARIAL STUDIES OF MMIF DUR-
ING PERIODS OF CAPITAL DEPLETION. 
(a) IN GENERAL.—Paragraph (4) of section 202(a) 
of the National Housing Act (12 U.S.C. 1708(a)(4)) is 
amended— 
(1) in the first sentence, by inserting ‘‘except as 
provided in subparagraph (B),’’ after ‘‘to be con-
ducted annually,’’; 
(2) in the second sentence, by inserting ‘‘, ex-
cept as provided in subparagraph (B),’’ after ‘‘annu-
ally’’; 
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(3) by striking the paragraph designation and 
heading and all that follows through ‘‘The Secretary 
shall provide’’ and inserting the following: 
‘‘(4) INDEPENDENT ACTUARIAL STUDY.— 
‘‘(A) ANNUAL
STUDY.—The Secretary 
shall provide’’; and 
(4) by adding at the end the following new sub-
paragraph: 
‘‘(B) SEMIANNUAL STUDIES DURING PERI-
ODS OF CAPITAL DEPLETION.—During any pe-
riod that the Fund fails to maintain sufficient 
capital to comply with the capital ratio require-
ment under section 205(f)(2)— 
‘‘(i) the independent study required by 
subparagraph (A) shall be conducted semi-
annually and shall analyze the financial po-
sition of the Fund as of September 30 and 
March 31 of each fiscal year during such 
period; and 
‘‘(ii) the Secretary shall submit a re-
port meeting the requirements of subpara-
graph (A) for each such semiannual 
study.’’. 
(b) ANALYSIS
OF QUARTERLY ACTUARIAL STUD-
IES.—The Secretary of Housing and Urban Development 
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shall conduct an analysis of the cost and feasibility of pro-
viding for an independent actuarial study of the Mutual 
Mortgage Insurance Fund on a calendar quarterly basis, 
which shall compare the cost and feasibility of conducting 
such a study on a quarterly basis as compared to a semi- 
annual basis and shall determine whether such an actu-
arial study can be conducted on a quarterly basis without 
substantial additional costs to the taxpayers. Not later 
than the expiration of the 90-day period beginning on the 
date of the enactment of this Act, the Secretary shall sub-
mit a report to the Congress setting forth the findings and 
conclusion of the analysis conducted pursuant to this sub-
section. 
SEC. 6. DELEGATION OF FHA 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. 
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SEC. 7. AUTHORITY TO TERMINATE FHA MORTGAGEE 
ORIGINATION 
AND 
UNDERWRITING 
AP-
PROVAL. 
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’’. 
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SEC. 8. AUTHORIZATION TO PARTICIPATE IN THE ORIGINA-
TION OF FHA-INSURED LOANS. 
(a) SINGLE FAMILY MORTGAGES.—Section 203(b) of 
the National Housing Act (12 U.S.C. 1709(b)) is amended 
by striking paragraph (1) and inserting the following new 
paragraph: 
‘‘(1) Have been made to a mortgagee approved 
by the Secretary or to a person or entity authorized 
by the Secretary under section 202(d)(1) to partici-
pate in the origination of the mortgage, and be held 
by a mortgagee approved by the Secretary as re-
sponsible and able to service the mortgage prop-
erly.’’. 
(b) HOME EQUITY CONVERSION MORTGAGES.—Sec-
tion 255(d) of the National Housing Act (12 U.S.C. 
1715z–20(d)) is amended by striking paragraph (1) and 
inserting the following new paragraph: 
‘‘(1) have been originated by a mortgagee ap-
proved by, or by a person or entity authorized under 
section 202(d)(1) to participate in the origination 
by, the Secretary;’’. 
SEC. 9. REPORTING OF MORTGAGEE ACTIONS TAKEN 
AGAINST OTHER MORTGAGEES. 
Section 202 of the National Housing Act (12 U.S.C. 
1708), as amended by the preceding provisions of this Act, 
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is further amended by adding at the end the following new 
subsection: 
‘‘(j) 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 or evidence of fraud or material misrepresentation in 
connection with the origination of such mortgages, to no-
tify the Secretary of the action taken and the reasons for 
such action not later than 15 days after taking such ac-
tion.’’. 
SEC. 10. DEFAULT AND ORIGINATION INFORMATION BY 
LOAN SERVICER AND ORIGINATING DIRECT 
ENDORSEMENT LENDER. 
(a) COLLECTION OF INFORMATION.—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 subparagraph: 
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‘‘(C) For each entity that services insured 
mortgages, data on the number of claims paid 
to each servicing mortgagee during each cal-
endar quarter occurring during the applicable 
collection period.’’. 
(b) APPLICABILITY.—Information described in sub-
paragraph (C) of section 540(b)(2) of the National Hous-
ing Act, as added by subsection (a) of this section, shall 
first be made available under such section 540 for the ap-
plicable collection period (as such term is defined in such 
section) relating to the first calendar quarter ending after 
the expiration of the 12-month period that begins on the 
date of the enactment of this Act. 
SEC. 11. 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-
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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 of the 
initial Deputy Assistant Secretary for Risk Management 
and Regulatory Affairs pursuant to section 4(b)(2) of the 
Department of Housing and Urban Development Act, as 
amended by subsection (a) of this section, the position of 
chief risk officer within the Federal Housing Administra-
tion, filled by appointment by the Federal Housing Com-
missioner, is abolished. 
SEC. 12. ESTABLISHMENT OF CHIEF RISK OFFICER FOR 
GNMA. 
Section 4 of the Department of Housing and Urban 
Development Act (42 U.S.C. 3533) is amended by adding 
after subsection (g), as added by section 1442 of the 
Dodd-Frank Wall Street Reform and Consumer Protec-
tion Act (Public Law 111–203; 124 Stat. 2163), the fol-
lowing new subsection: 
‘‘(h) There shall be in the Department a Chief Risk 
Officer for the Government National Mortgage Associa-
tion, who shall— 
‘‘(1) be designated by the Secretary; 
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‘‘(2) be responsible to the President of the As-
sociation for all matters related to evaluating, man-
aging, and mitigating risk to the programs of the 
Association; 
‘‘(3) be in the competitive service or the senior 
executive service; 
‘‘(4) be a career appointee; 
‘‘(5) be designated from among individuals who 
possess demonstrated ability in general management 
of, and knowledge of and extensive practical experi-
ence in risk evaluation practices in large govern-
mental or business entities; and 
‘‘(6) shall not be required to obtain the prior 
approval, comment, or review of any officer or agen-
cy of the United States before submitting to the 
Congress, or any committee or subcommittee there-
of, any reports, recommendations, testimony, or 
comments if such submission include a statement in-
dicating that the views expressed therein are those 
of the Chief Risk Officer of the Association and do 
not necessarily represent the views of the Sec-
retary.’’. 
SEC. 13. REPORT ON MORTGAGE SERVICERS. 
(a) EXAMINATION.—The Secretary of Housing and 
Urban Development shall conduct an examination into 
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mortgage servicer compliance with the loan servicing, loss 
mitigation, and insurance claim submission guidelines of 
the FHA mortgage insurance programs under the Na-
tional Housing Act (12 U.S.C. 1701 et seq.), and an esti-
mate of the annual costs to the Mutual Mortgage Insur-
ance Fund, since 2008, resulting from any failures by 
mortgage servicers to comply with such guidelines. 
(b) REPORT.—Not later than the expiration of the 
120-day period that begins upon the date of the enactment 
of this Act, the Secretary shall submit a report to the Con-
gress on the results of the examination conducted pursu-
ant to subsection (a), including recommendations for any 
administrative and legislative actions to improve mortgage 
servicer compliance with the guidelines referred to in sub-
section (a). 
SEC. 14. FHA EMERGENCY CAPITAL PLAN. 
(a) ESTABLISHMENT.—Not later than the expiration 
of the 30-day period beginning on the date of the enact-
ment of this Act, the Secretary of Housing and Urban 
Development shall develop, submit to the Congress, and 
commence implementation of an emergency capital plan 
for the restoration of the fiscal solvency of the Mutual 
Mortgage Insurance Fund (in this section referred to as 
the ‘‘Fund’’). 
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(b) CONTENTS.—The emergency capital plan devel-
oped pursuant to this section shall— 
(1) provide a detailed explanation of the proc-
esses and controls by which amounts of capital that 
are assets of the Fund are monitored and tracked; 
(2) establish a plan to ensure the financial safe-
ty and soundness of the Fund that avoids the need 
for borrowing amounts from the Treasury of the 
United States to meet obligations of the Fund; and 
(3) describe the procedure by which, if nec-
essary, any amounts from the Treasury needed to 
meet obligations of the Fund will be obtained from 
the Treasury. 
(c) MONTHLY REPORTS.— 
(1) REPORTS.—Subject to paragraph (3), upon 
the conclusion of each calendar month ending after 
the 14-day period that begins on the date of the en-
actment of this Act, the Secretary of Housing and 
Urban Development shall submit to the Congress a 
report assessing the financial status of the Fund at 
the conclusion of such month and setting forth the 
information described in paragraph (2). 
(2) CONTENTS.—Each report required under 
paragraph (1) for a month shall contain the fol-
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lowing information regarding the Fund as of the 
conclusion of such month: 
(A) The number of mortgages that are ob-
ligations of the Fund that are 60 or more days 
delinquent, the expected losses to the Fund as-
sociated with such delinquent mortgages, and 
the methodology used to make such calculation. 
(B) The number of mortgages that are ob-
ligations of the Fund that have a loan-to-value 
ratio at the time of origination that is less than 
80 percent and the percentage of all mortgages 
that are obligations of the Fund having such a 
ratio. 
(C) The number of mortgages that are ob-
ligations of the Fund that had an original prin-
cipal obligation exceeding 125 percent of the 
median house price, for a home of the size of 
the residence subject to the mortgage, for the 
area in which such residence is located, and the 
percentage of all mortgages that are obligations 
of the Fund having such an original principal 
obligation. 
(D) The number of mortgages that are ob-
ligations of the Fund for which the mortgagor’s 
income at the time of origination of the mort-
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gage is greater than the median income for the 
area in which the residence subject to the mort-
gage is located, and the percentage of all mort-
gages that are obligations of the Fund for 
which the mortgagor has such an income. 
(E) The balances for the financing and 
capital reserve accounts of the Fund. 
(F) Any actions taken during such month 
to help ensure the financial soundness of the 
Fund and compliance with section 205(f) of the 
National Housing Act (12 U.S.C. 1711(f); re-
lating to a capital ratio requirement). 
(3) TERMINATION
OF
REPORTING
REQUIRE-
MENT.—The requirement to submit reports under 
paragraph (1) shall terminate on the first date after 
the date of the enactment of this Act that the Fund 
attains a capital ratio (as such term is defined in 
section 205(f)(3) of the National Housing Act) of 
2.0 percent. 
SEC. 15. FHA SAFETY AND SOUNDNESS REVIEW. 
(a) REVIEW.—The Comptroller General of the United 
States shall provide for an independent third party to— 
(1) conduct a one-time review of the mortgage 
insurance programs and funds of the Secretary of 
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Housing and Urban Development that shall deter-
mine, as of the time of such review— 
(A) the financial safety and soundness of 
such programs and funds; and 
(B) the extent of loan loss reserves and 
capital adequacy of such programs and funds; 
and 
(2) to submit a report under subsection (b). 
Such review shall be conducted in accordance with gen-
erally accepted accounting principles applicable to the pri-
vate sector and Federal entities. 
(b) REPORT.—The report under this subsection shall 
describe the methodology and standards used to conduct 
the review under subsection (a)(1), set forth the results 
and findings of the review, including the extent of loan 
loss reserves and capital adequacy of the mortgage insur-
ance programs and funds of the Secretary of Housing and 
Urban Development, and include recommendations re-
garding restoring such reserves and capital to maintain 
such programs and funds in a safe and sound condition. 
(c) TIMING.—The review required under subsection 
(a) shall be completed, and the report required under sub-
section (b) shall be submitted, not later than the expira-
tion of the 60-day period beginning on the date of the en-
actment of this Act. 
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(d) RULE OF CONSTRUCTION.—Nothing in this sec-
tion may be construed to alter or affect, or exempt the 
Secretary of Housing and Urban Development from com-
plying with, any laws, regulations, or guidance relating to 
preparation or submission of budgets or audits or financial 
or management statements or reports. 
SEC. 16. FHA DISCLOSURE STANDARDS. 
Not later than the expiration of the 90-day period 
beginning on the date of the enactment of this Act, the 
Secretary of Housing and Urban Development shall review 
and revise all standards and requirements relating to dis-
closure of information regarding the mortgage insurance 
programs and funds, including actuarial studies conducted 
under section 202(a)(4) of the National Housing Act (12 
U.S.C. 1708(a)(4)), quarterly reports under section 
202(a)(5) of such Act, and annual audited financial state-
ments under section 538 of such Act (12 U.S.C. 1735f– 
16), to ensure that, after the date of the enactment of 
this Act, such disclosures— 
(1) provide meaningful financial and other in-
formation that is timely, comprehensive, and accu-
rate; 
(2) do not contain any material misstatements 
or misrepresentations; 
(3) make available all relevant information; and 
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(4) prohibit material omissions that make the 
contents of the disclosure misleading. 
SEC. 17. REPORT ON STREAMLINING FHA PROGRAMS. 
(a) EXAMINATION.—The Secretary of Housing and 
Urban Development shall conduct an examination of the 
mortgage insurance and any other programs of the Fed-
eral Housing Administration to identify— 
(1) the level of use and need for such programs; 
(2) any such programs that are unused or 
underused; and 
(3) methods for streamlining, consolidating, 
simplifying, increasing the efficiency of, and reduc-
ing the number of such programs. 
(b) REPORT.—Not later than the expiration of the 
12-month period that begins upon the date of the enact-
ment of this Act, the Secretary shall submit a report to 
the Congress on the results of the examination conducted 
pursuant to subsection (a), including recommendations for 
any administrative and legislative actions to streamline, 
consolidate, simplify, increase the efficiency of, and reduce 
the number of such programs. 
SEC. 18. BUDGET COMPLIANCE. 
The Secretary of Housing and Urban Development 
shall allocate $2,500,000 from the account for Adminis-
trative Contract Expenses each fiscal year through Sep-
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tember 30, 2017, which amounts shall be available only 
for the purposes of this Act and the amendments made 
by this Act, including such additional actuarial reviews as 
may be required by section 5 of this Act and the amend-
ments made by such section. 
Æ 
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