I 
111TH CONGRESS 
1ST SESSION H. R. 1116 
To improve the process through which loan originators participate in FHA 
mortgage programs, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 23, 2009 
Ms. WATERS (for herself, Ms. SPEIER, and Mr. DRIEHAUS) introduced the 
following bill; which was referred to the Committee on Financial Services 
A BILL 
To improve the process through which loan originators par-
ticipate in FHA mortgage programs, and for other pur-
poses. 
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 ‘‘Honest FHA Origi-
nator Act of 2009’’. 
SEC. 2. REQUIREMENTS FOR FHA-APPROVED MORTGA-
GEES. 
(a) MORTGAGEE REVIEW BOARD.—Paragraph (2) of 
section 202(c) of the National Housing Act (12 U.S.C. 
1708(c)) is amended— 
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(1) in subparagraph (E), by inserting ‘‘and’’ 
after the semicolon; 
(2) in subparagraph (F), by striking ‘‘; and’’ 
and inserting a period; and 
(3) by striking subparagraph (G). 
(b) LIMITATIONS
ON PARTICIPATION
AND MORT-
GAGEE APPROVAL AND USE OF NAME.—Section 202 of 
the National Housing Act (12 U.S.C. 1708) is amended— 
(1) by redesignating subsections (d), (e), and 
(f) as subsections (e), (f), and (g), respectively; 
(2) by inserting after subsection (c) the fol-
lowing new subsection: 
‘‘(d) LIMITATIONS ON PARTICIPATION IN ORIGINA-
TION AND MORTGAGEE APPROVAL.— 
‘‘(1) REQUIREMENT.—Any person or entity 
that is not approved by the Secretary to serve as a 
mortgagee, as such term is defined in subsection 
(c)(7), shall not participate in the origination of an 
FHA-insured loan except as authorized by the Sec-
retary. 
‘‘(2) ELIGIBILITY FOR APPROVAL.—In order to 
be eligible for approval by the Secretary, an appli-
cant mortgagee shall not be, and shall not have any 
officer, partner, director, principal, or employee of 
the applicant mortgagee who is— 
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‘‘(A) currently suspended, debarred, under 
a limited denial of participation (LDP), or oth-
erwise restricted under part 24 or 25 of title 24 
of the Code of Federal Regulations, or any suc-
cessor regulations to such parts, or under simi-
lar provisions of any other Federal agency; 
‘‘(B) under indictment for, or has been 
convicted of, an offense that reflects adversely 
upon the applicant’s integrity, competence or 
fitness to meet the responsibilities of an ap-
proved mortgagee; 
‘‘(C) subject to unresolved findings con-
tained in a Department of Housing and Urban 
Development or other governmental audit, in-
vestigation, or review; 
‘‘(D) engaged in business practices that do 
not conform to generally accepted practices of 
prudent mortgagees or that demonstrate irre-
sponsibility; 
‘‘(E) convicted of, or who has pled guilty 
or nolo contendre to, a felony related to partici-
pation in the real estate or mortgage loan in-
dustry— 
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