H. R. 3221—130 
‘‘(2) any other differences that the Director considers appro-
priate.’’. 
SEC. 1202. DIRECTORS. 
Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 
1427) is amended— 
(1) by striking subsection (a) and inserting the following: 
‘‘(a) NUMBER; ELECTION; QUALIFICATIONS; CONFLICTS
OF 
INTEREST.— 
‘‘(1) IN GENERAL.—Subject to paragraphs (2) through (4), 
the management of each Federal Home Loan Bank shall be 
vested in a board of 13 directors, or such other number as 
the Director determines appropriate. 
‘‘(2) BOARD MAKEUP.—The board of directors of each Bank 
shall be comprised of— 
‘‘(A) member directors, who shall comprise at least 
the majority of the members of the board of directors; 
and 
‘‘(B) independent directors, who shall comprise not 
fewer than 2⁄5 of the members of the board of directors. 
‘‘(3) SELECTION CRITERIA.— 
‘‘(A) IN GENERAL.—Each member of the board of direc-
tors shall be— 
‘‘(i) elected by plurality vote of the members, in 
accordance with procedures established under this sec-
tion; and 
‘‘(ii) a citizen of the United States. 
‘‘(B) INDEPENDENT DIRECTOR CRITERIA.— 
‘‘(i) IN GENERAL.—Each independent director that 
is not a public interest director under clause (ii) shall 
have demonstrated knowledge of, or experience in, 
financial management, auditing and accounting, risk 
management practices, derivatives, project develop-
ment, or organizational management, or such other 
knowledge or expertise as the Director may provide 
by regulation. 
‘‘(ii) PUBLIC INTEREST.—Not fewer than 2 of the 
independent directors shall have more than 4 years 
of experience in representing consumer or community 
interests on banking services, credit needs, housing, 
or financial consumer protections. 
‘‘(iii) CONFLICTS
OF
INTEREST.—No independent 
director may, during the term of service on the board 
of directors, serve as an officer of any Federal Home 
Loan Bank or as a director, officer, or employee of 
any member of a Bank, or of any person that receives 
advances from a Bank. 
‘‘(4) DEFINITIONS.—For purposes of this section, the fol-
lowing definitions shall apply: 
‘‘(A) INDEPENDENT DIRECTOR.—The terms ‘independent 
director’ and ‘independent directorship’ mean a member 
of the board of directors of a Federal Home Loan Bank 
who is a bona fide resident of the district in which the 
Federal Home Loan Bank is located, or the directorship 
held by such a person, respectively. 
‘‘(B) MEMBER DIRECTOR.—The terms ‘member director’ 
and ‘member directorship’ mean a member of the board
H. R. 3221—131 
of directors of a Federal Home Loan Bank who is an 
officer or director of a member institution that is located 
in the district in which the Federal Home Loan Bank 
is located, or the directorship held by such a person, respec-
tively.’’; 
(2) by striking ‘‘elective’’ each place that term appears, 
other than in subsections (d), (e), and (f), and inserting 
‘‘member’’; 
(3) in subsection (b)— 
(A) by striking the subsection heading and all that 
follows through ‘‘Each elective directorship’’ and inserting 
the following: 
‘‘(b) DIRECTORSHIPS.— 
‘‘(1) MEMBER DIRECTORSHIPS.—Each member directorship’’; 
and 
(B) by adding at the end the following: 
‘‘(2) INDEPENDENT DIRECTORSHIPS.— 
‘‘(A) ELECTIONS.—Each independent director— 
‘‘(i) shall be elected by the members entitled to 
vote, from among eligible persons nominated, after con-
sultation with the Advisory Council of the Bank, by 
the board of directors of the Bank; and 
‘‘(ii) shall be elected by a plurality of the votes 
of the members of the Bank at large, with each member 
having the number of votes for each such directorship 
as it has under paragraph (1) in an election to fill 
member directorships. 
‘‘(B) CRITERIA.—Nominees shall meet all applicable 
requirements prescribed in this section. 
‘‘(C) NOMINATION AND ELECTION PROCEDURES.—Proce-
dures for nomination and election of independent directors 
shall be prescribed by the bylaws of each Federal Home 
Loan Bank, in a manner consistent with the rules and 
regulations of the Agency.’’; 
(4) in subsection (c)— 
(A) by striking ‘‘elective’’ each place that term appears 
and inserting ‘‘member’’, except— 
(i) in the second sentence, the second place that 
term appears; and 
(ii) each place that term appears in the fifth sen-
tence; and 
(B) in the second sentence— 
(i) by inserting ‘‘(A) except as provided in clause 
(B) of this sentence,’’ before ‘‘if at any time’’; and 
(ii) by inserting before the period at the end the 
following: ‘‘, and (B) clause (A) of this sentence shall 
not apply to the directorships of any Federal Home 
Loan Bank resulting from the merger of any 2 or 
more such Banks’’; 
(5) in subsection (d)— 
(A) in the first sentence— 
(i) by striking ‘‘, whether elected or appointed,’’; 
and 
(ii) by striking ‘‘3 years’’ and inserting ‘‘4 years’’; 
(B) in the second sentence—
H. R. 3221—132 
(i) by striking ‘‘Federal Home Loan Bank System 
Modernization Act of 1999’’ and inserting ‘‘Federal 
Housing Finance Regulatory Reform Act of 2008’’; 
(ii) by striking ‘‘1⁄3’’ and inserting ‘‘1⁄4’’; and 
(iii) by striking ‘‘or appointed’’; and 
(C) in the third sentence— 
(i) by striking ‘‘an elective’’ each place that term 
appears and inserting ‘‘a’’; and 
(ii) by striking ‘‘in any elective directorship or elec-
tive directorships’’; 
(6) in subsection (f)— 
(A) by striking paragraph (2); 
(B) by striking ‘‘appointed or’’ each place that term 
appears; and 
(C) in paragraph (3)— 
(i) by striking ‘‘(3) ELECTED BANK DIRECTORS.— 
’’ and inserting ‘‘(2) ELECTION PROCESS.—’’; and 
(ii) by striking ‘‘elective’’ each place that term 
appears; 
(7) in subsection (i)— 
(A) in paragraph (1), by striking ‘‘Subject to paragraph 
(2), each’’ and inserting ‘‘Each’’; and 
(B) by striking paragraph (2) and inserting the fol-
lowing: 
‘‘(2) ANNUAL REPORT.—The Director shall include, in the 
annual report submitted to the Congress pursuant to section 
1319B of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992, information regarding the com-
pensation and expenses paid by the Federal Home Loan Banks 
to the directors on the boards of directors of the Banks.’’; 
and 
(8) by adding at the end the following: 
‘‘(l) TRANSITION RULE.—Any member of the board of directors 
of a Bank elected or appointed in accordance with this section 
prior to the date of enactment of this subsection may continue 
to serve as a member of that board of directors for the remainder 
of the existing term of service.’’. 
SEC. 1203. DEFINITIONS. 
Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 
1422) is amended— 
(1) by striking paragraphs (1), (10), and (11); 
(2) by redesignating paragraphs (2) through (9) as para-
graphs (1) through (8), respectively; 
(3) by redesignating paragraphs (12) and (13) as paragraphs 
(9) and (10), respectively; and 
(4) by adding at the end the following: 
‘‘(11) DIRECTOR.—The term ‘Director’ means the Director 
of the Federal Housing Finance Agency. 
‘‘(12) AGENCY.—The term ‘Agency’ means the Federal 
Housing Finance Agency, established under section 1311 of 
the Federal Housing Enterprises Financial Safety and Sound-
ness Act of 1992.’’. 
SEC. 1204. AGENCY OVERSIGHT OF FEDERAL HOME LOAN BANKS. 
The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), 
other than in provisions of that Act added or amended otherwise 
by this Act, is amended—
H. R. 3221—133 
(1) by striking sections 2A and 2B (12 U.S.C. 1422a, 1422b); 
(2) in section 18 (12 U.S.C. 1438), by striking subsection 
(b); 
(3) in section 11 (12 U.S.C. 1431)— 
(A) in subsection (b)— 
(i) in the first sentence— 
(I) by striking ‘‘The Board’’ and inserting ‘‘The 
Office of Finance, as agent for the Banks,’’; and 
(II) by striking ‘‘the Board’’ and inserting ‘‘such 
Office’’; and 
(ii) in the second and fourth sentences, by striking 
‘‘the Board’’ each place such term appears and inserting 
‘‘the Office of Finance’’; 
(B) in subsection (c)— 
(i) by striking ‘‘the Board’’ the first place such 
term appears and inserting ‘‘the Office of Finance, 
as agent for the Banks,’’; and 
(ii) by striking ‘‘the Board’’ the second place such 
term appears and inserting ‘‘such Office’’; and 
(C) in subsection (f)— 
(i) by striking the 2 commas after ‘‘permit’’ and 
inserting ‘‘or’’; and 
(ii) by striking the comma after ‘‘require’’; 
(4) in section 6 (12 U.S.C. 1426)— 
(A) in subsection (b)(1), in the matter preceding 
subparagraph (A), by striking ‘‘Finance Board approval’’ 
and inserting ‘‘approval by the Director’’; and 
(B) in each of subsections (c)(4)(B) and (d)(2), by 
striking ‘‘Finance Board regulations’’ each place that term 
appears and inserting ‘‘regulations of the Director’’; 
(5) in section 10(b) (12 U.S.C. 1430(b))— 
(A) in the subsection heading, by striking ‘‘FORMAL 
BOARD
RESOLUTION’’ 
and 
inserting 
‘‘APPROVAL
OF 
DIRECTOR’’; and 
(B) by striking ‘‘by formal resolution’’; 
(6) in section 21(b)(5) (12 U.S.C. 1441(b)(5)), by striking 
‘‘Chairperson of the Federal Housing Finance Board’’ and 
inserting ‘‘Director’’; 
(7) in section 15 (12 U.S.C. 1435), by inserting ‘‘or the 
Director’’ after ‘‘the Board’’; 
(8) by striking ‘‘the Board’’ each place that term appears 
and inserting ‘‘the Director’’; 
(9) by striking ‘‘The Board’’ each place that term appears 
and inserting ‘‘The Director’’; 
(10) by striking ‘‘the Finance Board’’ each place that term 
appears and inserting ‘‘the Director’’; 
(11) by striking ‘‘The Finance Board’’ each place that term 
appears and inserting ‘‘The Director’’; and 
(12) by striking ‘‘Federal Housing Finance Board’’ each 
place that term appears and inserting ‘‘Director’’. 
SEC. 1205. HOUSING GOALS. 
The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) 
is amended by inserting after section 10b the following new section: 
‘‘SEC. 10C. HOUSING GOALS. 
‘‘(a) IN GENERAL.—The Director shall establish housing goals 
with respect to the purchase of mortgages, if any, by the Federal
H. R. 3221—134 
Home Loan Banks. Such goals shall be consistent with the goals 
established under sections 1331 through 1334 of the Federal 
Housing Enterprises Financial Safety and Soundness Act of 1992. 
‘‘(b) CONSIDERATIONS.—In establishing the goals required by 
subsection (a), the Director shall consider the unique mission and 
ownership structure of the Federal Home Loan Banks. 
‘‘(c) TRANSITION PERIOD.—To facilitate an orderly transition, 
the Director shall establish interim target goals for purposes of 
this section for each of the 2 calendar years following the date 
of enactment of this section. 
‘‘(d) MONITORING AND ENFORCEMENT OF GOALS.—The require-
ments of section 1336 of the Federal Housing Enterprises Safety 
and Soundness Act of 1992, shall apply to this section, in the 
same manner and to the same extent as that section applies to 
the Federal housing enterprises. 
‘‘(e) ANNUAL REPORT.—The Director shall annually report to 
Congress on the performance of the Banks in meeting the goals 
established under this section.’’. 
SEC. 1206. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS. 
Section 4(a)(1) of the Federal Home Loan Bank Act (12 U.S.C. 
1424(a)(1)) is amended— 
(1) by inserting after ‘‘savings bank,’’ the following: 
‘‘community development financial institution,’’; and 
(2) in subparagraph (B), by inserting after ‘‘United States,’’ 
the following: ‘‘or, in the case of a community development 
financial institution, is certified as a community development 
financial institution under the Community Development 
Banking and Financial Institutions Act of 1994.’’. 
SEC. 1207. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN 
BANKS. 
The Federal Home Loan Bank Act is amended by inserting 
after section 20 (12 U.S.C. 1440) the following new section: 
‘‘SEC. 20A. SHARING OF INFORMATION AMONG FEDERAL HOME LOAN 
BANKS. 
‘‘(a) INFORMATION ON FINANCIAL CONDITION.—In order to enable 
each Federal Home Loan Bank to evaluate the financial condition 
of one or more of the other Federal Home Loan Banks individually 
and the Federal Home Loan Bank System (including any risks 
associated with the issuance or repayment of consolidated Federal 
Home Loan Bank bonds and debentures or other borrowings and 
the joint and several liabilities of the Banks incurred due to such 
borrowings), as well as to comply with any of its obligations under 
the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.), the 
Director shall make available to the Banks such reports, records, 
or other information as may be available, relating to the condition 
of any Federal Home Loan Bank. 
‘‘(b) SHARING OF INFORMATION.— 
‘‘(1) IN GENERAL.—The Director shall promulgate regula-
tions to facilitate the sharing of information made available 
under subsection (a) directly among the Federal Home Loan 
Banks. 
‘‘(2) LIMITATION.—Notwithstanding paragraph (1), a Fed-
eral Home Loan Bank responding to a request from another 
Bank or from the Director for information pursuant to this 
section may request that the Director determine that such
H. R. 3221—135 
information is proprietary and that the public interest requires 
that such information not be shared. 
‘‘(c) LIMITATION.—Nothing in this section shall affect the obliga-
tions of any Federal Home Loan Bank under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.) or the regulations 
issued by the Securities and Exchange Commission thereunder. 
‘‘(d) NO WAIVER
OF PRIVILEGE.—The Director shall not be 
deemed to have waived any privilege applicable to any information 
concerning a Federal Home Loan Bank by transferring, or permit-
ting the transfer of, that information to any other Federal Home 
Loan Bank for the purposes set out in subsection (a).’’. 
SEC. 1208. EXCLUSION FROM CERTAIN REQUIREMENTS. 
(a) IN GENERAL.—The Federal Home Loan Banks shall be 
exempt from compliance with— 
(1) sections 13(e), 14(a), and 14(c) of the Securities 
Exchange Act of 1934, and related Commission regulations; 
(2) section 15 of the Securities Exchange Act of 1934, 
and related Commission regulations, with respect to trans-
actions in the capital stock of a Federal Home Loan Bank; 
(3) section 17A of the Securities Exchange Act of 1934, 
and related Commission regulations, with respect to the 
transfer of the securities of a Federal Home Loan Bank; and 
(4) the Trust Indenture Act of 1939. 
(b) MEMBER EXEMPTION.—The members of the Federal Home 
Loan Bank System shall be exempt from compliance with sections 
13(d), 13(f), 13(g), 14(d), and 16 of the Securities Exchange Act 
of 1934, and related Commission regulations, with respect to owner-
ship of or transactions in the capital stock of the Federal Home 
Loan Banks by such members. 
(c) EXEMPTED AND GOVERNMENT SECURITIES.— 
(1) CAPITAL STOCK.—The capital stock issued by each of 
the Federal Home Loan Banks under section 6 of the Federal 
Home Loan Bank Act are— 
(A) exempted securities, within the meaning of section 
3(a)(2) of the Securities Act of 1933; and 
(B) exempted securities, within the meaning of section 
3(a)(12)(A) of the Securities Exchange Act of 1934, except 
to the extent provided in section 38 of that Act. 
(2) OTHER OBLIGATIONS.—The debentures, bonds, and other 
obligations issued under section 11 of the Federal Home Loan 
Bank Act (12 U.S.C. 1431) are— 
(A) exempted securities, within the meaning of section 
3(a)(2) of the Securities Act of 1933; 
(B) government securities, within the meaning of sec-
tion 3(a)(42) of the Securities Exchange Act of 1934; and 
(C) government securities, within the meaning of sec-
tion 2(a)(16) of the Investment Company Act of 1940. 
(3) BROKERS AND DEALERS.—A person (other than a Federal 
Home Loan Bank effecting transactions for members of the 
Federal Home Loan Bank System) that effects transactions 
in the capital stock or other obligations of a Federal Home 
Loan Bank, for the account of others or for that person’s own 
account, as applicable, is a broker or dealer, as those terms 
are defined in paragraphs (4) and (5), respectively, of section 
3(a) of the Securities Exchange Act of 1934, but is excluded 
from the definition of—
H. R. 3221—136 
(A) the term ‘‘government securities broker’’ under sec-
tion 3(a)(43) of the Securities Exchange Act of 1934; and 
(B) the term ‘‘government securities dealer’’ under sec-
tion 3(a)(44) of the Securities Exchange Act of 1934. 
(d) EXEMPTION FROM REPORTING REQUIREMENTS.—The Federal 
Home Loan Banks shall be exempt from periodic reporting require-
ments under the securities laws pertaining to the disclosure of— 
(1) related party transactions that occur in the ordinary 
course of the business of the Banks with members; and 
(2) the unregistered sales of equity securities. 
(e) TENDER OFFERS.—Commission rules relating to tender offers 
shall not apply in connection with transactions in the capital stock 
of the Federal Home Loan Banks. 
(f) REGULATIONS.— 
(1) IN GENERAL.—The Commission shall promulgate such 
rules and regulations as may be necessary or appropriate in 
the public interest or in furtherance of this section and the 
exemptions provided in this section. 
(2) CONSIDERATIONS.—In issuing regulations under this sec-
tion, the Commission shall consider the distinctive characteris-
tics of the Federal Home Loan Banks when evaluating— 
(A) the accounting treatment with respect to the pay-
ment to the Resolution Funding Corporation; 
(B) the role of the combined financial statements of 
the Federal Home Loan Banks; 
(C) the accounting classification of redeemable capital 
stock; and 
(D) the accounting treatment related to the joint and 
several nature of the obligations of the Banks. 
(g) DEFINITIONS.—As used in this section— 
(1) the terms ‘‘Bank’’, ‘‘Federal Home Loan Bank’’, 
‘‘member’’, and ‘‘Federal Home Loan Bank System’’ have the 
same meanings as in section 2 of the Federal Home Loan 
Bank Act (12 U.S.C. 1422); 
(2) the term ‘‘Commission’’ means the Securities and 
Exchange Commission; and 
(3) the term ‘‘securities laws’’ has the same meaning as 
in section 3(a)(47) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)(47)). 
SEC. 1209. VOLUNTARY MERGERS. 
Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 
1446) is amended— 
(1) by striking ‘‘Whenever’’ and inserting ‘‘(a) IN GEN-
ERAL.—Whenever’’; and 
(2) by adding at the end the following: 
‘‘(b) VOLUNTARY MERGERS AUTHORIZED.— 
‘‘(1) IN
GENERAL.—Any Federal Home Loan Bank may, 
with the approval of the Director and of the boards of directors 
of the Banks involved, merge with another Bank. 
‘‘(2) REGULATIONS REQUIRED.—The Director shall promul-
gate regulations establishing the conditions and procedures 
for the consideration and approval of any voluntary merger 
described in paragraph (1), including the procedures for Bank 
member approval.’’.
H. R. 3221—137 
SEC. 1210. AUTHORITY TO REDUCE DISTRICTS. 
Section 3 of the Federal Home Loan Bank Act (12 U.S.C. 
1423) is amended— 
(1) by striking ‘‘As soon’’ and inserting ‘‘(a) IN GENERAL.— 
As soon’’; and 
(2) by adding at the end the following: 
‘‘(b) AUTHORITY TO REDUCE DISTRICTS.—Notwithstanding sub-
section (a), the number of districts may be reduced to a number 
less than 8— 
‘‘(1) pursuant to a voluntary merger between Banks, as 
approved pursuant to section 26(b); or 
‘‘(2) pursuant to a decision by the Director to liquidate 
a Bank pursuant to section 1367 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992.’’. 
SEC. 1211. COMMUNITY FINANCIAL INSTITUTION MEMBERS. 
(a) TOTAL ASSET REQUIREMENT.—Paragraph (10) of section 2 
of the Federal Home Loan Bank Act (12 U.S.C. 1422(10)), as so 
redesignated by section 201(3) of this Act, is amended by striking 
‘‘$500,000,000’’ each place such term appears and inserting 
‘‘$1,000,000,000’’. 
(b) USE OF ADVANCES FOR COMMUNITY DEVELOPMENT ACTIVI-
TIES.—Section 10(a) of the Federal Home Loan Bank Act (12 U.S.C. 
1430(a)) is amended— 
(1) in paragraph (2)(B)— 
(A) by striking ‘‘and’’; and 
(B) by inserting ‘‘, and community development activi-
ties’’ before the period at the end; 
(2) in paragraph (3)(E), by inserting ‘‘or community develop-
ment activities’’ after ‘‘agriculture,’’; and 
(3) in paragraph (6)— 
(A) by striking ‘‘and’’; and 
(B) by inserting ‘‘, and ‘community development activi-
ties’ ’’ before ‘‘shall’’. 
SEC. 1212. PUBLIC USE DATABASE; REPORTS TO CONGRESS. 
Section 10 of the Federal Home Loan Bank Act (12 U.S.C. 
1430) is amended— 
(1) in subsection (j)(12)— 
(A) by striking subparagraph (C) and inserting the 
following: 
‘‘(C) REPORTS.—The Director shall annually report to 
the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services 
of the House of Representatives on the collateral pledged 
to the Banks, including an analysis of collateral by type 
and by Bank district.’’; and 
(B) by adding at the end the following: 
‘‘(D) SUBMISSION
TO
CONGRESS.—The Director shall 
submit the reports under subparagraphs (A) and (C) to 
the Committee on Banking, Housing, and Urban Affairs 
of the Senate and the Committee on Financial Services 
of the House of Representatives, not later than 180 days 
after the date of enactment of the Federal Housing Finance 
Regulatory Reform Act of 2008.’’; and 
(2) by adding at the end the following: 
‘‘(k) PUBLIC USE DATABASE.—
H. R. 3221—138 
‘‘(1) DATA.—Each Federal Home Loan Bank shall provide 
to the Director, in a form determined by the Director, census 
tract level data relating to mortgages purchased, if any, 
including— 
‘‘(A) data consistent with that reported under section 
1323 of the Federal Housing Enterprises Financial Safety 
and Soundness Act of 1992; 
‘‘(B) data elements required to be reported under the 
Home Mortgage Disclosure Act of 1975; and 
‘‘(C) any other data elements that the Director con-
siders appropriate. 
‘‘(2) PUBLIC USE DATABASE.— 
‘‘(A) IN GENERAL.—The Director shall make available 
to the public, in a form that is useful to the public 
(including forms accessible electronically), and to the extent 
practicable, the data provided to the Director under para-
graph (1). 
‘‘(B) PROPRIETARY
INFORMATION.—Not withstanding 
subparagraph (A), the Director may not provide public 
access to, or disclose to the public, any information required 
to be submitted under this subsection that the Director 
determines is proprietary or that would provide personally 
identifiable information and that is not otherwise publicly 
accessible through other forms, unless the Director deter-
mines that it is in the public interest to provide such 
information.’’. 
SEC. 1213. SEMIANNUAL REPORTS. 
Section 21B of the Federal Home Loan Bank Act is amended 
in subsection (f)(2)(C), by adding at the end the following: 
‘‘(v) SEMIANNUAL
REPORTS.—The Director shall 
report semiannually to the Committee on Banking, 
Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Rep-
resentatives on the projected date for the completion 
of contributions required by this section.’’. 
SEC. 1214. LIQUIDATION OR REORGANIZATION OF A FEDERAL HOME 
LOAN BANK. 
Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 
1446) is amended by adding at the end the following: ‘‘At least 
30 days prior to liquidating or reorganizing any Bank under this 
section, the Director shall notify the Bank of its determination 
and the facts and circumstances upon which such determination 
is based. The Bank may contest that determination in a hearing 
before the Director, in which all issues shall be determined on 
the record pursuant to section 554 of title 5, United States Code.’’. 
SEC. 1215. STUDY AND REPORT TO CONGRESS ON SECURITIZATION 
OF ACQUIRED MEMBER ASSETS. 
(a) STUDY.—The Director shall conduct a study on securitization 
of home mortgage loans purchased or to be purchased from member 
financial institutions under the Acquired Member Assets programs. 
In conducting the study, the Director shall establish a process 
for the formal submission of comments. 
(b) ELEMENTS.—The study shall encompass— 
(1) the benefits and risks associated with securitization 
of Acquired Member Assets;
H. R. 3221—139 
(2) the potential impact of securitization upon liquidity 
in the mortgage and broader credit markets; 
(3) the ability of the Federal Home Loan Bank or Banks 
in question to manage the risks associated with such a program; 
(4) the impact of such a program on the existing activities 
of the Banks, including their mortgage portfolios and advances; 
and 
(5) the joint and several liability of the Banks and the 
cooperative structure of the Federal Home Loan Bank System. 
(c) CONSULTATIONS.—In conducting the study under this sec-
tion, the Director shall consult with the Federal Home Loan Banks, 
the Banks’ fiscal agent, representatives of the mortgage lending 
industry, practitioners in the structured finance field, and other 
experts as needed. 
(d) REPORT.—Not later than 1 year after the date of enactment 
of this Act, the Director shall submit a report to Congress on 
the results of the study conducted under subsection (a), including 
policy recommendations based on the analysis of the Director of 
the feasibility of mortgage-backed securities issuance by a Federal 
Home Loan Bank or Banks and the risks and benefits associated 
with such program or programs. 
(e) DEFINITIONS.—As used in this section, the terms ‘‘member’’, 
‘‘Bank’’, and ‘‘Federal Home Loan Bank’’ have the same meanings 
as in section 2 of the Federal Home Loan Bank Act (12 U.S.C. 
1422). 
SEC. 1216. TECHNICAL AND CONFORMING AMENDMENTS. 
(a) RIGHT TO FINANCIAL PRIVACY ACT OF 1978.—Section 1113(o) 
of the Right to Financial Privacy Act of 1978 (12 U.S.C. 3413(o)) 
is amended— 
(1) by striking ‘‘Federal Housing Finance Board’’ and 
inserting ‘‘Federal Housing Finance Agency’’; and 
(2) by striking ‘‘Federal Housing Finance Board’s’’ and 
inserting ‘‘Federal Housing Finance Agency’s’’. 
(b) RIEGLE
COMMUNITY
DEVELOPMENT
AND
REGULATORY 
IMPROVEMENT ACT OF 1994.—Section 117(e) of the Riegle Commu-
nity Development and Regulatory Improvement Act of 1994 (12 
U.S.C. 4716(e)) is amended by striking ‘‘Federal Housing Finance 
Board’’ and inserting ‘‘Federal Housing Finance Agency’’. 
(c) TITLE 18, UNITED STATES CODE.—Title 18, United States 
Code, is amended by striking ‘‘Federal Housing Finance Board’’ 
each place such term appears in each of sections 212, 657, 1006, 
and 1014, and inserting ‘‘Federal Housing Finance Agency’’. 
(d) MAHRA ACT OF 1997.—Section 517(b)(4) of the Multifamily 
Assisted Housing Reform and Affordability Act of 1997 (42 U.S.C. 
1437f note) is amended by striking ‘‘Federal Housing Finance 
Board’’ and inserting ‘‘Federal Housing Finance Agency’’. 
(e) TITLE 44, UNITED STATES CODE.—Section 3502(5) of title 
44, United States Code, is amended by striking ‘‘Federal Housing 
Finance Board’’ and inserting ‘‘Federal Housing Finance Agency’’. 
(f) ACCESS TO LOCAL TV ACT OF 2000.—Section 1004(d)(2)(D)(iii) 
of the Launching Our Communities’ Access to Local Television 
Act of 2000 (47 U.S.C. 1103(d)(2)(D)(iii)) is amended by striking 
‘‘Office of Federal Housing Enterprise Oversight, the Federal 
Housing Finance Board’’ and inserting ‘‘Federal Housing Finance 
Agency’’.
H. R. 3221—143 
SEC. 1303. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO. 
(a) TRANSFER.—Each employee of the Office of Federal Housing 
Enterprise Oversight shall be transferred to the Agency for employ-
ment, not later than the effective date of the abolishment under 
section 1301(a), and such transfer shall be deemed a transfer of 
function for purposes of section 3503 of title 5, United States 
Code. 
(b) GUARANTEED POSITIONS.— 
(1) IN GENERAL.—Each employee transferred under sub-
section (a) shall be guaranteed a position with the same status, 
tenure, grade, and pay as that held on the day immediately 
preceding the transfer. 
(2) NO
INVOLUNTARY
SEPARATION
OR
REDUCTION.—An 
employee transferred under subsection (a) holding a permanent 
position on the day immediately preceding the transfer may 
not be involuntarily separated or reduced in grade or compensa-
tion during the 12-month period beginning on the date of 
transfer, except for cause, or, in the case of a temporary 
employee, separated in accordance with the terms of the 
appointment of the employee. 
(c) APPOINTMENT AUTHORITY FOR EXCEPTED AND SENIOR EXECU-
TIVE SERVICE EMPLOYEES.— 
(1) IN GENERAL.—In the case of an employee occupying 
a position in the excepted service or the Senior Executive 
Service, any appointment authority established under law or 
by regulations of the Office of Personnel Management for filling 
such position shall be transferred, subject to paragraph (2). 
(2) DECLINE OF TRANSFER.—The Director may decline a 
transfer of authority under paragraph (1) to the extent that 
such authority relates to— 
(A) a position excepted from the competitive service 
because of its confidential, policymaking, policy-deter-
mining, or policy-advocating character; or 
(B) a noncareer position in the Senior Executive Service 
(within the meaning of section 3132(a)(7) of title 5, United 
States Code). 
(d) REORGANIZATION.—If the Director determines, after the end 
of the 1-year period beginning on the effective date of the abolish-
ment under section 1301(a), that a reorganization of the combined 
workforce is required, that reorganization shall be deemed a major 
reorganization for purposes of affording affected employee retire-
ment under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United 
States Code. 
(e) EMPLOYEE BENEFIT PROGRAMS.— 
(1) IN GENERAL.—Any employee of the Office of Federal 
Housing Enterprise Oversight accepting employment with the 
Agency as a result of a transfer under subsection (a) may 
retain, for 12 months after the date on which such transfer 
occurs, membership in any employee benefit program of the 
Agency or the Office of Federal Housing Enterprise Oversight 
of the Department of Housing and Urban Development, as 
applicable, including insurance, to which such employee belongs 
on the date of the abolishment under section 1301(a), if— 
(A) the employee does not elect to give up the benefit 
or membership in the program; and 
(B) the benefit or program is continued by the Director 
of the Federal Housing Finance Agency.
H. R. 3221—144 
(2) COST DIFFERENTIAL.— 
(A) IN GENERAL.—The difference in the costs between 
the benefits which would have been provided by the Office 
of Federal Housing Enterprise Oversight and those pro-
vided by this section shall be paid by the Director. 
(B) HEALTH INSURANCE.—If any employee elects to give 
up membership in a health insurance program or the health 
insurance program is not continued by the Director, the 
employee shall be permitted to select an alternate Federal 
health insurance program not later than 30 days after 
the date of such election or notice, without regard to any 
other regularly scheduled open season. 
SEC. 1304. TRANSFER OF PROPERTY AND FACILITIES. 
Upon the effective date of its abolishment under section 1301(a), 
all property of the Office of Federal Housing Enterprise Oversight 
shall transfer to the Agency. 
Subtitle B—Federal Housing Finance 
Board 
SEC. 1311. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD. 
(a) IN GENERAL.—Effective at the end of the 1-year period 
beginning on the date of enactment of this Act, the Federal Housing 
Finance Board (in this subtitle referred to as the ‘‘Board’’) is abol-
ished. 
(b) DISPOSITION OF AFFAIRS.—During the 1-year period begin-
ning on the date of enactment of this Act, the Board, solely for 
the purpose of winding up the affairs of the Board— 
(1) shall manage the employees of the Board and provide 
for the payment of the compensation and benefits of any such 
employee which accrue before the effective date of the transfer 
of such employee under section 1313; and 
(2) may take any other action necessary for the purpose 
of winding up the affairs of the Board. 
(c) STATUS
OF EMPLOYEES BEFORE TRANSFER.—The amend-
ments made by titles I and II and the abolishment of the Board 
under subsection (a) may not be construed to affect the status 
of any employee of the Board as an employee of an agency of 
the United States for purposes of any other provision of law before 
the effective date of the transfer of any such employee under section 
1313. 
(d) USE OF PROPERTY AND SERVICES.— 
(1) PROPERTY.—The Director may use the property of the 
Board to perform functions which have been transferred to 
the Director, for such time as is reasonable to facilitate the 
orderly transfer of functions transferred under any other provi-
sion of this Act or any amendment made by this Act to any 
other provision of law. 
(2) AGENCY SERVICES.—Any agency, department, or other 
instrumentality of the United States, and any successor to 
any such agency, department, or instrumentality, which was 
providing supporting services to the Board before the expiration 
of the 1-year period under subsection (a) in connection with 
functions that are transferred to the Director shall—
H. R. 3221—145 
(A) continue to provide such services, on a reimbursable 
basis, until the transfer of such functions is complete; and 
(B) consult with any such agency to coordinate and 
facilitate a prompt and reasonable transition. 
(e) CONTINUATION OF SERVICES.—The Director may use the 
services of employees and other personnel of the Board, on a 
reimbursable basis, to perform functions which have been trans-
ferred to the Director for such time as is reasonable to facilitate 
the orderly transfer of functions pursuant to any other provision 
of this Act or any amendment made by this Act to any other 
provision of law. 
(f) SAVINGS PROVISIONS.— 
(1) EXISTING
RIGHTS, 
DUTIES, 
AND
OBLIGATIONS
NOT 
AFFECTED.—Subsection (a) shall not affect the validity of any 
right, duty, or obligation of the United States, a member of 
the Board, or any other person, which— 
(A) arises under the Federal Home Loan Bank Act, 
or any other provision of law applicable with respect to 
the Board; and 
(B) existed on the day before the effective date of 
the abolishment under subsection (a). 
(2) CONTINUATION OF SUITS.—No action or other proceeding 
commenced by or against the Board in connection with functions 
that are transferred under this Act to the Director shall abate 
by reason of the enactment of this Act, except that the Director 
shall be substituted for the Board or any member thereof as 
a party to any such action or proceeding. 
SEC. 1312. CONTINUATION AND COORDINATION OF CERTAIN ACTIONS. 
(a) IN GENERAL.—All regulations, orders, determinations, and 
resolutions described under subsection (b) shall remain in effect 
according to the terms of such regulations, orders, determinations, 
and resolutions, and shall be enforceable by or against the Director 
until modified, terminated, set aside, or superseded in accordance 
with applicable law by the Director, any court of competent jurisdic-
tion, or operation of law. 
(b) APPLICABILITY.—A regulation, order, determination, or reso-
lution is described under this subsection if it— 
(1) was issued, made, prescribed, or allowed to become 
effective by— 
(A) the Board; or 
(B) a court of competent jurisdiction, and relates to 
functions transferred by this Act; and 
(2) is in effect on the effective date of the abolishment 
under section 1311(a). 
SEC. 1313. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL 
HOUSING FINANCE BOARD. 
(a) TRANSFER.—Each employee of the Board shall be transferred 
to the Agency for employment, not later than the effective date 
of the abolishment under section 1311(a), and such transfer shall 
be deemed a transfer of function for purposes of section 3503 
of title 5, United States Code. 
(b) GUARANTEED POSITIONS.— 
(1) IN GENERAL.—Each employee transferred under sub-
section (a) shall be guaranteed a position with the same status, 
tenure, grade, and pay as that held on the day immediately 
preceding the transfer.
H. R. 3221—146 
(2) NO
INVOLUNTARY
SEPARATION
OR
REDUCTION.—An 
employee holding a permanent position on the day immediately 
preceding the transfer may not be involuntarily separated or 
reduced in grade or compensation during the 12-month period 
beginning on the date of transfer, except for cause, or, if the 
employee is a temporary employee, separated in accordance 
with the terms of the appointment of the employee. 
(c) APPOINTMENT AUTHORITY FOR EXCEPTED EMPLOYEES.— 
(1) IN GENERAL.—In the case of an employee occupying 
a position in the excepted service, any appointment authority 
established under law or by regulations of the Office of Per-
sonnel Management for filling such position shall be trans-
ferred, subject to paragraph (2). 
(2) DECLINE OF TRANSFER.—The Director may decline a 
transfer of authority under paragraph (1), to the extent that 
such authority relates to a position excepted from the competi-
tive service because of its confidential, policymaking, policy- 
determining, or policy-advocating character. 
(d) REORGANIZATION.—If the Director determines, after the end 
of the 1-year period beginning on the effective date of the abolish-
ment under section 1311(a), that a reorganization of the combined 
workforce is required, that reorganization shall be deemed a major 
reorganization for purposes of affording affected employee retire-
ment under section 8336(d)(2) or 8414(b)(1)(B) of title 5, United 
States Code. 
(e) EMPLOYEE BENEFIT PROGRAMS.— 
(1) IN
GENERAL.—Any employee of the Board accepting 
employment with the Agency as a result of a transfer under 
subsection (a) may retain, for 12 months after the date on 
which such transfer occurs, membership in any employee ben-
efit program of the Agency or the Board, as applicable, including 
insurance, to which such employee belongs on the effective 
date of the abolishment under section 1311(a) if— 
(A) the employee does not elect to give up the benefit 
or membership in the program; and 
(B) the benefit or program is continued by the Director. 
(2) COST DIFFERENTIAL.— 
(A) IN GENERAL.—The difference in the costs between 
the benefits which would have been provided by the Board 
and those provided by this section shall be paid by the 
Director. 
(B) HEALTH INSURANCE.—If any employee elects to give 
up membership in a health insurance program or the health 
insurance program is not continued by the Director, the 
employee shall be permitted to select an alternate Federal 
health insurance program not later than 30 days after 
the date of such election or notice, without regard to any 
other regularly scheduled open season. 
SEC. 1314. TRANSFER OF PROPERTY AND FACILITIES. 
Upon the effective date of the abolishment under section 
1311(a), all property of the Board shall transfer to the Agency.
H. R. 3221—147 
TITLE IV—HOPE FOR HOMEOWNERS 
SEC. 1401. SHORT TITLE. 
This title may be cited as the ‘‘HOPE for Homeowners Act 
of 2008’’. 
SEC. 1402. ESTABLISHMENT OF HOPE FOR HOMEOWNERS PROGRAM. 
(a) ESTABLISHMENT.—Title II of the National Housing Act (12 
U.S.C. 1707 et seq.) is amended by adding at the end the following: 
‘‘SEC. 257. HOPE FOR HOMEOWNERS PROGRAM. 
‘‘(a) ESTABLISHMENT.—There is established in the Federal 
Housing Administration a HOPE for Homeowners Program. 
‘‘(b) PURPOSE.—The purpose of the HOPE for Homeowners Pro-
gram is— 
‘‘(1) to create an FHA program, participation in which 
is voluntary on the part of homeowners and existing loan 
holders to insure refinanced loans for distressed borrowers to 
support long-term, sustainable homeownership; 
‘‘(2) to allow homeowners to avoid foreclosure by reducing 
the principle balance outstanding, and interest rate charged, 
on their mortgages; 
‘‘(3) to help stabilize and provide confidence in mortgage 
markets by bringing transparency to the value of assets based 
on mortgage assets; 
‘‘(4) to target mortgage assistance under this section to 
homeowners for their principal residence; 
‘‘(5) to enhance the administrative capacity of the FHA 
to carry out its expanded role under the HOPE for Homeowners 
Program; 
‘‘(6) to ensure the HOPE for Homeowners Program remains 
in effect only for as long as is necessary to provide stability 
to the housing market; and 
‘‘(7) to provide servicers of delinquent mortgages with addi-
tional methods and approaches to avoid foreclosure. 
‘‘(c) ESTABLISHMENT
AND
IMPLEMENTATION
OF
PROGRAM 
REQUIREMENTS.— 
‘‘(1) DUTIES
OF
THE
BOARD.—In order to carry out the 
purposes of the HOPE for Homeowners Program, the Board 
shall— 
‘‘(A) establish requirements and standards for the pro-
gram; and 
‘‘(B) prescribe such regulations and provide such guid-
ance as may be necessary or appropriate to implement 
such requirements and standards. 
‘‘(2) DUTIES OF THE SECRETARY.—In carrying out any of 
the program requirements or standards established under para-
graph (1), the Secretary may issue such interim guidance and 
mortgagee letters as the Secretary determines necessary or 
appropriate. 
‘‘(d) INSURANCE OF MORTGAGES.—The Secretary is authorized 
upon application of a mortgagee to make commitments to insure 
or to insure any eligible mortgage that has been refinanced in 
a manner meeting the requirements under subsection (e). 
‘‘(e) REQUIREMENTS OF INSURED MORTGAGES.—To be eligible 
for insurance under this section, a refinanced eligible mortgage 
shall comply with all of the following requirements:
H. R. 3221—148 
‘‘(1) LACK OF CAPACITY TO PAY EXISTING MORTGAGE.— 
‘‘(A) BORROWER CERTIFICATION.— 
‘‘(i) IN GENERAL.—The mortgagor shall provide cer-
tification to the Secretary that the mortgagor has not 
intentionally defaulted on the mortgage or any other 
debt, and has not knowingly, or willfully and with 
actual knowledge, furnished material information 
known to be false for the purpose of obtaining any 
eligible mortgage. 
‘‘(ii) PENALTIES.— 
‘‘(I) FALSE STATEMENT.—Any certification filed 
pursuant to clause (i) shall contain an acknowledg-
ment that any willful false statement made in 
such certification is punishable under section 1001, 
of title 18, United States Code, by fine or imprison-
ment of not more than 5 years, or both. 
‘‘(II) LIABILITY
FOR
REPAYMENT.—The mort-
gagor shall agree in writing that the mortgagor 
shall be liable to repay to the Federal Housing 
Administration 
any 
direct 
financial 
benefit 
achieved from the reduction of indebtedness on 
the existing mortgage or mortgages on the resi-
dence refinanced under this section derived from 
misrepresentations made in the certifications and 
documentation required under this subparagraph, 
subject to the discretion of the Secretary. 
‘‘(B) CURRENT BORROWER DEBT-TO-INCOME RATIO.—As 
of March 1, 2008, the mortgagor shall have had a ratio 
of mortgage debt to income, taking into consideration all 
existing mortgages of that mortgagor at such time, greater 
than 31 percent (or such higher amount as the Board 
determines appropriate). 
‘‘(2) DETERMINATION OF PRINCIPAL OBLIGATION AMOUNT.— 
The principal obligation amount of the refinanced eligible mort-
gage to be insured shall— 
‘‘(A) be determined by the reasonable ability of the 
mortgagor to make his or her mortgage payments, as such 
ability is determined by the Secretary pursuant to section 
203(b)(4) or by any other underwriting standards estab-
lished by the Board; and 
‘‘(B) not exceed 90 percent of the appraised value of 
the property to which such mortgage relates. 
‘‘(3) REQUIRED
WAIVER
OF
PREPAYMENT
PENALTIES
AND 
FEES.—All penalties for prepayment or refinancing of the 
eligible mortgage, and all fees and penalties related to default 
or delinquency on the eligible mortgage, shall be waived or 
forgiven. 
‘‘(4) EXTINGUISHMENT OF SUBORDINATE LIENS.— 
‘‘(A) REQUIRED AGREEMENT.—All holders of outstanding 
mortgage liens on the property to which the eligible mort-
gage relates shall agree to accept the proceeds of the 
insured loan as payment in full of all indebtedness under 
the eligible mortgage, and all encumbrances related to 
such eligible mortgage shall be removed. The Secretary 
may take such actions, subject to standards established 
by the Board under subparagraph (B), as may be necessary 
and appropriate to facilitate coordination and agreement
H. R. 3221—149 
between the holders of the existing senior mortgage and 
any existing subordinate mortgages, taking into consider-
ation the subordinate lien status of such subordinate mort-
gages. 
‘‘(B) SHARED APPRECIATION.— 
‘‘(i) IN GENERAL.—The Board shall establish stand-
ards and policies that will allow for the payment to 
the holder of any existing subordinate mortgage of 
a portion of any future appreciation in the property 
secured by such eligible mortgage that is owed to the 
Secretary pursuant to subsection (k). 
‘‘(ii) FACTORS.—In establishing the standards and 
policies required under clause (i), the Board shall take 
into consideration— 
‘‘(I) the status of any subordinate mortgage; 
‘‘(II) the outstanding principal balance of and 
accrued interest on the existing senior mortgage 
and any outstanding subordinate mortgages; 
‘‘(III) the extent to which the current appraised 
value of the property securing a subordinate mort-
gage is less than the outstanding principal balance 
and accrued interest on any other liens that are 
senior to such subordinate mortgage; and 
‘‘(IV) such other factors as the Board deter-
mines to be appropriate. 
‘‘(C) VOLUNTARY PROGRAM.—This paragraph may not 
be construed to require any holder of any existing mortgage 
to participate in the program under this section generally, 
or with respect to any particular loan. 
‘‘(5) TERM OF MORTGAGE.—The refinanced eligible mortgage 
to be insured shall— 
‘‘(A) bear interest at a single rate that is fixed for 
the entire term of the mortgage; and 
‘‘(B) have a maturity of not less than 30 years from 
the date of the beginning of amortization of such refinanced 
eligible mortgage. 
‘‘(6) MAXIMUM
LOAN
AMOUNT.—The principal obligation 
amount of the eligible mortgage to be insured shall not exceed 
132 percent of the dollar amount limitation in effect for 2007 
under section 305(a)(2) of the Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1454(a)(2)) for a property of the 
applicable size. 
‘‘(7) PROHIBITION ON SECOND LIENS.—A mortgagor may not 
grant a new second lien on the mortgaged property during 
the first 5 years of the term of the mortgage insured under 
this section, except as the Board determines to be necessary 
to ensure the maintenance of property standards; and provided 
that such new outstanding liens (A) do not reduce the value 
of the Government’s equity in the borrower’s home; and (B) 
when combined with the mortgagor’s existing mortgage indebt-
edness, do not exceed 95 percent of the home’s appraised value 
at the time of the new second lien. 
‘‘(8) APPRAISALS.—Any appraisal conducted in connection 
with a mortgage insured under this section shall— 
‘‘(A) be based on the current value of the property;
H. R. 3221—150 
‘‘(B) be conducted in accordance with title XI of the 
Financial Institutions Reform, Recovery, and Enforcement 
Act of 1989 (12 U.S.C. 3331 et seq.); 
‘‘(C) be completed by an appraiser who meets the com-
petency requirements of the Uniform Standards of Profes-
sional Appraisal Practice; 
‘‘(D) be wholly consistent with the appraisal standards, 
practices, and procedures under section 202(e) of this Act 
that apply to all loans insured under this Act; and 
‘‘(E) comply with the requirements of subsection (g) 
of this section (relating to appraisal independence). 
‘‘(9) DOCUMENTATION
AND
VERIFICATION
OF
INCOME.—In 
complying with the FHA underwriting requirements under the 
HOPE for Homeowners Program under this section, the mort-
gagee shall document and verify the income of the mortgagor 
or non-filing status by procuring (A) an income tax return 
transcript of the income tax returns of the mortgagor, or(B) 
a copy of the income tax returns from the Internal Revenue 
Service, for the two most recent years for which the filing 
deadline for such years has passed and by any other method, 
in accordance with procedures and standards that the Board 
shall establish. 
‘‘(10) MORTGAGE
FRAUD.—The mortgagor shall not have 
been convicted under Federal or State law for fraud during 
the 10-year period ending upon the insurance of the mortgage 
under this section. 
‘‘(11) PRIMARY RESIDENCE.—The mortgagor shall provide 
documentation satisfactory in the determination of the Sec-
retary to prove that the residence covered by the mortgage 
to be insured under this section is occupied by the mortgagor 
as the primary residence of the mortgagor, and that such resi-
dence is the only residence in which the mortgagor has any 
present ownership interest. 
‘‘(f) STUDY OF AUCTION OR BULK REFINANCE PROGRAM.— 
‘‘(1) STUDY.—The Board shall conduct a study of the need 
for and efficacy of an auction or bulk refinancing mechanism 
to facilitate refinancing of existing residential mortgages that 
are at risk for foreclosure into mortgages insured under this 
section. The study shall identify and examine various options 
for mechanisms under which lenders and servicers of such 
mortgages may make bids for forward commitments for such 
insurance in an expedited manner. 
‘‘(2) CONTENT.— 
‘‘(A) ANALYSIS.—The study required under paragraph 
(1) shall analyze— 
‘‘(i) the feasibility of establishing a mechanism that 
would facilitate the more rapid refinancing of bor-
rowers at risk of foreclosure into performing mortgages 
insured under this section; 
‘‘(ii) whether such a mechanism would provide an 
effective and efficient mechanism to reduce foreclosures 
on qualified existing mortgages; 
‘‘(iii) whether the use of an auction or bulk 
refinance program is necessary to stabilize the housing 
market and reduce the impact of turmoil in that 
market on the economy of the United States;
H. R. 3221—151 
‘‘(iv) whether there are other mechanisms or 
authority that would be useful to reduce foreclosure; 
and 
‘‘(v) and any other factors that the Board considers 
relevant. 
‘‘(B) DETERMINATIONS.—To the extent that the Board 
finds that a facility of the type described in subparagraph 
(A) is feasible and useful, the study shall— 
‘‘(i) 
determine 
and 
identify 
any 
additional 
authority or resources needed to establish and operate 
such a mechanism; 
‘‘(ii) determine whether there is a need for addi-
tional authority with respect to the loan underwriting 
criteria established in this section or with respect to 
eligibility of participating borrowers, lenders, or 
holders of liens; 
‘‘(iii) determine whether such underwriting criteria 
should be established on the basis of individual loans, 
in the aggregate, or otherwise to facilitate the goal 
of refinancing borrowers at risk of foreclosure into 
viable loans insured under this section. 
‘‘(3) REPORT.—Not later than the expiration of the 60- 
day period beginning on the date of the enactment of this 
section, the Board shall submit a report regarding the results 
of the study conducted under this subsection to the Committee 
on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs of 
the Senate. The report shall include a detailed description 
of the analysis required under paragraph (2)(A) and of the 
determinations made pursuant to paragraph (2)(B), and shall 
include any other findings and recommendations of the Board 
pursuant to the study, including identifying various options 
for mechanisms described in paragraph (1). 
‘‘(g) APPRAISAL INDEPENDENCE.— 
‘‘(1) PROHIBITIONS ON INTERESTED PARTIES IN A REAL ESTATE 
TRANSACTION.—No mortgage lender, mortgage broker, mortgage 
banker, real estate broker, appraisal management company, 
employee of an appraisal management company, nor any other 
person with an interest in a real estate transaction involving 
an appraisal in connection with a mortgage insured under 
this section shall improperly influence, or attempt to improperly 
influence, through coercion, extortion, collusion, compensation, 
instruction, inducement, intimidation, nonpayment for services 
rendered, or bribery, the development, reporting, result, or 
review of a real estate appraisal sought in connection with 
the mortgage. 
‘‘(2) CIVIL
MONETARY
PENALTIES.—The Secretary may 
impose a civil money penalty for any knowing and material 
violation of paragraph (1) under the same terms and conditions 
as are authorized in section 536(a) of this Act. 
‘‘(h) STANDARDS TO PROTECT AGAINST ADVERSE SELECTION.— 
‘‘(1) IN GENERAL.—The Board shall, by rule or order, estab-
lish standards and policies to require the underwriter of the 
insured loan to provide such representations and warranties 
as the Board considers necessary or appropriate to enforce 
compliance with all underwriting and appraisal standards of 
the HOPE for Homeowners Program.
H. R. 3221—152 
‘‘(2) EXCLUSION FOR VIOLATIONS.—The Board shall prohibit 
the Secretary from paying insurance benefits to a mortgagee 
who violates the representations and warranties, as established 
under paragraph (1), or in any case in which a mortgagor 
fails to make the first payment on a refinanced eligible mort-
gage. 
‘‘(3) OTHER
AUTHORITY.—The Board may establish such 
other standards or policies as necessary to protect against 
adverse selection, including requiring loans identified by the 
Secretary as higher risk loans to demonstrate payment perform-
ance for a reasonable period of time prior to being insured 
under the program. 
‘‘(i) PREMIUMS.—For each refinanced eligible mortgage insured 
under this section, the Secretary shall establish and collect— 
‘‘(1) at the time of insurance, a single premium payment 
in an amount equal to 3 percent of the amount of the original 
insured principal obligation of the refinanced eligible mortgage, 
which shall be paid from the proceeds of the mortgage being 
insured under this section, through the reduction of the amount 
of indebtedness that existed on the eligible mortgage prior 
to refinancing; and 
‘‘(2) in addition to the premium required under paragraph 
(1), an annual premium in an amount equal to 1.5 percent 
of the amount of the remaining insured principal balance of 
the mortgage. 
‘‘(j) ORIGINATION FEES AND INTEREST RATE.—The Board shall 
establish— 
‘‘(1) a reasonable limitation on origination fees for 
refinanced eligible mortgages insured under this section; and 
‘‘(2) procedures to ensure that interest rates on such mort-
gages shall be commensurate with market rate interest rates 
on such types of loans. 
‘‘(k) EQUITY AND APPRECIATION.— 
‘‘(1) FIVE-YEAR PHASE-IN FOR EQUITY AS A RESULT OF SALE 
OR REFINANCING.—For each eligible mortgage insured under 
this section, the Secretary and the mortgagor of such mortgage 
shall, upon any sale or disposition of the property to which 
such mortgage relates, or upon the subsequent refinancing 
of such mortgage, be entitled to the following with respect 
to any equity created as a direct result of such sale or refi-
nancing: 
‘‘(A) If such sale or refinancing occurs during the period 
that begins on the date that such mortgage is insured 
and ends 1 year after such date of insurance, the Secretary 
shall be entitled to 100 percent of such equity. 
‘‘(B) If such sale or refinancing occurs during the period 
that begins 1 year after such date of insurance and ends 
2 years after such date of insurance, the Secretary shall 
be entitled to 90 percent of such equity and the mortgagor 
shall be entitled to 10 percent of such equity. 
‘‘(C) If such sale or refinancing occurs during the period 
that begins 2 years after such date of insurance and ends 
3 years after such date of insurance, the Secretary shall 
be entitled to 80 percent of such equity and the mortgagor 
shall be entitled to 20 percent of such equity. 
‘‘(D) If such sale or refinancing occurs during the period 
that begins 3 years after such date of insurance and ends
H. R. 3221—153 
4 years after such date of insurance, the Secretary shall 
be entitled to 70 percent of such equity and the mortgagor 
shall be entitled to 30 percent of such equity. 
‘‘(E) If such sale or refinancing occurs during the period 
that begins 4 years after such date of insurance and ends 
5 years after such date of insurance, the Secretary shall 
be entitled to 60 percent of such equity and the mortgagor 
shall be entitled to 40 percent of such equity. 
‘‘(F) If such sale or refinancing occurs during any period 
that begins 5 years after such date of insurance, the Sec-
retary shall be entitled to 50 percent of such equity and 
the mortgagor shall be entitled to 50 percent of such equity. 
‘‘(2) APPRECIATION IN VALUE.—For each eligible mortgage 
insured under this section, the Secretary and the mortgagor 
of such mortgage shall, upon any sale or disposition of the 
property to which such mortgage relates, each be entitled to 
50 percent of any appreciation in value of the appraised value 
of such property that has occurred since the date that such 
mortgage was insured under this section. 
‘‘(l) ESTABLISHMENT OF HOPE FUND.— 
‘‘(1) IN
GENERAL.—There is established in the Federal 
Housing Administration a revolving fund to be known as the 
Home Ownership Preservation Entity Fund, which shall be 
used by the Board for carrying out the mortgage insurance 
obligations under this section. 
‘‘(2) MANAGEMENT OF FUND.—The HOPE Fund shall be 
administered and managed by the Secretary, who shall estab-
lish reasonable and prudent criteria for the management and 
operation of any amounts in the HOPE Fund. 
‘‘(m) LIMITATION ON AGGREGATE INSURANCE AUTHORITY.—The 
aggregate original principal obligation of all mortgages insured 
under this section may not exceed $300,000,000,000. 
‘‘(n) REPORTS BY THE BOARD.—The Board shall submit monthly 
reports to the Congress identifying the progress of the HOPE for 
Homeowners Program, which shall contain the following informa-
tion for each month: 
‘‘(1) The number of new mortgages insured under this 
section, including the location of the properties subject to such 
mortgages by census tract. 
‘‘(2) The aggregate principal obligation of new mortgages 
insured under this section. 
‘‘(3) The average amount by which the principle balance 
outstanding on mortgages insured this section was reduced. 
‘‘(4) The amount of premiums collected for insurance of 
mortgages under this section. 
‘‘(5) The claim and loss rates for mortgages insured under 
this section. 
‘‘(6) Any other information that the Board considers appro-
priate. 
‘‘(o) REQUIRED OUTREACH EFFORTS.—The Secretary shall carry 
out outreach efforts to ensure that homeowners, lenders, and the 
general public are aware of the opportunities for assistance avail-
able under this section. 
‘‘(p) ENHANCEMENT OF FHA CAPACITY.—Under the direction 
of the Board, the Secretary shall take such actions as may be 
necessary to—
H. R. 3221—154 
‘‘(1) contract for the establishment of underwriting criteria, 
automated underwriting systems, pricing standards, and other 
factors relating to eligibility for mortgages insured under this 
section; 
‘‘(2) contract for independent quality reviews of under-
writing, including appraisal reviews and fraud detection, of 
mortgages insured under this section or pools of such mort-
gages; and 
‘‘(3) increase personnel of the Department as necessary 
to process or monitor the processing of mortgages insured under 
this section. 
‘‘(q) GNMA COMMITMENT AUTHORITY.— 
‘‘(1) GUARANTEES.—The Secretary shall take such actions 
as may be necessary to ensure that securities based on and 
backed by a trust or pool composed of mortgages insured under 
this section are available to be guaranteed by the Government 
National Mortgage Association as to the timely payment of 
principal and interest. 
‘‘(2) GUARANTEE AUTHORITY.—To carry out the purposes 
of section 306 of the National Housing Act (12 U.S.C. 1721), 
the Government National Mortgage Association may enter into 
new commitments to issue guarantees of securities based on 
or backed by mortgages insured under this section, not 
exceeding $300,000,000,000. The amount of authority provided 
under the preceding sentence to enter into new commitments 
to issue guarantees is in addition to any amount of authority 
to make new commitments to issue guarantees that is provided 
to the Association under any other provision of law. 
‘‘(r) SUNSET.—The Secretary may not enter into any new 
commitment to insure any refinanced eligible mortgage, or newly 
insure any refinanced eligible mortgage pursuant to this section 
before October 1, 2008 or after September 30, 2011. 
‘‘(s) DEFINITIONS.—For purposes of this section, the following 
definitions shall apply: 
‘‘(1) APPROVED FINANCIAL INSTITUTION OR MORTGAGEE.— 
The term ‘approved financial institution or mortgagee’ means 
a financial institution or mortgagee approved by the Secretary 
under section 203 as responsible and able to service mortgages 
responsibly. 
‘‘(2) BOARD.—The term ‘Board’ means the Board of Direc-
tors of the HOPE for Homeowners Program. The Board shall 
be composed of the Secretary, the Secretary of the Treasury, 
the Chairperson of the Board of Governors of the Federal 
Reserve System, and the Chairperson of the Board of Directors 
of the Federal Deposit Insurance Corporation, or their des-
ignees. 
‘‘(3) ELIGIBLE
MORTGAGE.—The term ‘eligible mortgage’ 
means a mortgage— 
‘‘(A) the mortgagor of which— 
‘‘(i) occupies such property as his or her principal 
residence; and 
‘‘(ii) cannot, subject to subsection (e)(1)(B) and such 
other standards established by the Board, afford his 
or her mortgage payments; and 
‘‘(B) originated on or before January 1, 2008.
H. R. 3221—155 
‘‘(4) EXISTING SENIOR MORTGAGE.—The term ‘existing senior 
mortgage’ means, with respect to a mortgage insured under 
this section, the existing mortgage that has superior priority. 
‘‘(5) EXISTING SUBORDINATE MORTGAGE.—The term ‘existing 
subordinate mortgage’ means, with respect to a mortgage 
insured under this section, an existing mortgage that has 
subordinate priority to the existing senior mortgage. 
‘‘(6) HOPE FOR HOMEOWNERS PROGRAM.—The term ‘HOPE 
for Homeowners Program’ means the program established 
under this section. 
‘‘(7) SECRETARY.—The term ‘Secretary’ means the Secretary 
of Housing and Urban Development, except where specifically 
provided otherwise. 
‘‘(t) REQUIREMENTS RELATED TO THE BOARD.— 
‘‘(1) COMPENSATION, ACTUAL, NECESSARY, AND TRANSPOR-
TATION EXPENSES.— 
‘‘(A) FEDERAL EMPLOYEES.—A member of the Board 
who is an officer or employee of the Federal Government 
shall serve without additional pay (or benefits in the nature 
of compensation) for service as a member of the Board. 
‘‘(B) TRAVEL EXPENSES.—Members of the Board shall 
be entitled to receive travel expenses, including per diem 
in lieu of subsistence, equivalent to those set forth in 
subchapter I of chapter 57 of title 5, United States Code. 
‘‘(2) BYLAWS.—The Board may prescribe, amend, and repeal 
such bylaws as may be necessary for carrying out the functions 
of the Board. 
‘‘(3) QUORUM.—A majority of the Board shall constitute 
a quorum. 
‘‘(4) STAFF; EXPERTS AND CONSULTANTS.— 
‘‘(A) 
DETAIL
OF
GOVERNMENT
EMPLOYEES.—Upon 
request of the Board, any Federal Government employee 
may be detailed to the Board without reimbursement, and 
such detail shall be without interruption or loss of civil 
service status or privilege. 
‘‘(B) EXPERTS AND CONSULTANTS.—The Board shall pro-
cure the services of experts and consultants as the Board 
considers appropriate. 
‘‘(u) RULE OF CONSTRUCTION RELATED TO VOLUNTARY NATURE 
OF THE PROGRAM.—This section shall not be construed to require 
that any approved financial institution or mortgagee participate 
in any activity authorized under this section, including any activity 
related to the refinancing of an eligible mortgage. 
‘‘(v) RULE OF CONSTRUCTION RELATED TO INSURANCE OF MORT-
GAGES.—Except as otherwise provided for in this section or by 
action of the Board, the provisions and requirements of section 
203(b) shall apply with respect to the insurance of any eligible 
mortgage under this section. 
‘‘(w) HOPE BONDS.— 
‘‘(1) ISSUANCE
AND
REPAYMENT
OF
BONDS.—Notwith-
standing section 504(b) of the Federal Credit Reform Act of 
1990 (2 U.S.C. 661d(b)), the Secretary of the Treasury shall— 
‘‘(A) subject to such terms and conditions as the Sec-
retary of the Treasury deems necessary, issue Federal 
credit instruments, to be known as ‘HOPE Bonds’, that 
are callable at the discretion of the Secretary of the
H. R. 3221—156 
Treasury and do not, in the aggregate, exceed the amount 
specified in subsection (m); 
‘‘(B) provide the subsidy amounts necessary for loan 
guarantees under the HOPE for Homeowners Program, 
not to exceed the amount specified in subsection (m), in 
accordance with the provisions of the Federal Credit Reform 
Act of 1990 (2 U.S.C. 661 et seq.), except as provided 
in this paragraph; and 
‘‘(C) use the proceeds from HOPE Bonds only to pay 
for the net costs to the Federal Government of the HOPE 
for Homeowners Program, including administrative costs. 
‘‘(2) REIMBURSEMENTS
TO
TREASURY.—Funds received 
pursuant to section 1338(b) of the Federal Housing Enterprises 
Regulatory Reform Act of 1992 shall be used to reimburse 
the Secretary of the Treasury for amounts borrowed under 
paragraph (1). 
‘‘(3) USE OF RESERVE FUND.—If the net cost to the Federal 
Government for the HOPE for Homeowners Program exceeds 
the amount of funds received under paragraph (2), remaining 
debts of the HOPE for Homeowners Program shall be paid 
from amounts deposited into the fund established by the Sec-
retary under section 1337(e) of the Federal Housing Enterprises 
Financial Safety and Soundness Act of 1992, remaining 
amounts in such fund to be used to reduce the National debt. 
‘‘(4) REDUCTION
OF
NATIONAL
DEBT.—Amounts collected 
under the HOPE for Homeowners Program in accordance with 
subsections (i) and (k) in excess of the net cost to the Federal 
Government for such Program shall be used to reduce the 
National debt.’’. 
SEC. 1403. FIDUCIARY DUTY OF SERVICERS OF POOLED RESIDENTIAL 
MORTGAGE LOANS. 
The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended 
by inserting after section 129 the following new section: 
‘‘SEC. 129A. FIDUCIARY DUTY OF SERVICERS OF POOLED RESIDENTIAL 
MORTGAGES. 
‘‘(a) IN GENERAL.—Except as may be established in any invest-
ment contract between a servicer of pooled residential mortgages 
and an investor, a servicer of pooled residential mortgages— 
‘‘(1) owes any duty to maximize the net present value 
of the pooled mortgages in an investment to all investors and 
parties having a direct or indirect interest in such investment, 
not to any individual party or group of parties; and 
‘‘(2) shall be deemed to act in the best interests of all 
such investors and parties if the servicer agrees to or imple-
ments a modification or workout plan, including any modifica-
tion or refinancing undertaken pursuant to the HOPE for 
Homeowners Act of 2008, for a residential mortgage or a class 
of residential mortgages that constitute a part or all of the 
pooled mortgages in such investment, provided that any mort-
gage so modified meets the following criteria: 
‘‘(A) Default on the payment of such mortgage has 
occurred or is reasonably foreseeable. 
‘‘(B) The property securing such mortgage is occupied 
by the mortgagor of such mortgage. 
‘‘(C) The anticipated recovery on the principal out-
standing obligation of the mortgage under the modification
H. R. 3221—157 
or workout plan exceeds, on a net present value basis, 
the anticipated recovery on the principal outstanding 
obligation of the mortgage through foreclosure. 
‘‘(b) DEFINITION.—As used in this section, the term ‘servicer’ 
means the person responsible for servicing of a loan (including 
the person who makes or holds a loan if such person also services 
the loan).’’. 
SEC. 1404. REVISED STANDARDS FOR FHA APPRAISERS. 
Section 202(e) of the National Housing Act (12 U.S.C. 1708(e)) 
is amended by adding at the end the following: 
‘‘(5) ADDITIONAL APPRAISER STANDARDS.—Beginning on the 
date of enactment of the Federal Housing Finance Regulatory 
Reform Act of 2008, any appraiser chosen or approved to con-
duct appraisals for mortgages under this title shall— 
‘‘(A) be certified— 
‘‘(i) by the State in which the property to be 
appraised is located; or 
‘‘(ii) by a nationally recognized professional 
appraisal organization; and 
‘‘(B) have demonstrated verifiable education in the 
appraisal requirements established by the Federal Housing 
Administration under this subsection.’’. 
TITLE V—S.A.F.E. MORTGAGE 
LICENSING ACT 
SEC. 1501. SHORT TITLE. 
This title may be cited as the ‘‘Secure and Fair Enforcement 
for Mortgage Licensing Act of 2008’’ or ‘‘S.A.F.E. Mortgage Licensing 
Act of 2008’’. 
SEC. 1502. PURPOSES AND METHODS FOR ESTABLISHING A MORTGAGE 
LICENSING SYSTEM AND REGISTRY. 
In order to increase uniformity, reduce regulatory burden, 
enhance consumer protection, and reduce fraud, the States, through 
the Conference of State Bank Supervisors and the American 
Association of Residential Mortgage Regulators, are hereby encour-
aged to establish a Nationwide Mortgage Licensing System and 
Registry for the residential mortgage industry that accomplishes 
all of the following objectives: 
(1) Provides uniform license applications and reporting 
requirements for State-licensed loan originators. 
(2) Provides a comprehensive licensing and supervisory 
database. 
(3) Aggregates and improves the flow of information to 
and between regulators. 
(4) Provides increased accountability and tracking of loan 
originators. 
(5) Streamlines the licensing process and reduces the regu-
latory burden. 
(6) Enhances consumer protections and supports anti-fraud 
measures. 
(7) Provides consumers with easily accessible information, 
offered at no charge, utilizing electronic media, including the 
Internet, regarding the employment history of, and publicly
H. R. 3221—158 
adjudicated disciplinary and enforcement actions against, loan 
originators. 
(8) Establishes a means by which residential mortgage 
loan originators would, to the greatest extent possible, be 
required to act in the best interests of the consumer. 
(9) Facilitates responsible behavior in the subprime mort-
gage market place and provides comprehensive training and 
examination requirements related to subprime mortgage 
lending. 
(10) Facilitates the collection and disbursement of consumer 
complaints on behalf of State and Federal mortgage regulators. 
SEC. 1503. DEFINITIONS. 
For purposes of this title, the following definitions shall apply: 
(1) FEDERAL
BANKING
AGENCIES.—The term ‘‘Federal 
banking agencies’’ means the Board of Governors of the Federal 
Reserve System, the Comptroller of the Currency, the Director 
of the Office of Thrift Supervision, the National Credit Union 
Administration, and the Federal Deposit Insurance Corpora-
tion. 
(2) DEPOSITORY INSTITUTION.—The term ‘‘depository institu-
tion’’ has the same meaning as in section 3 of the Federal 
Deposit Insurance Act, and includes any credit union. 
(3) LOAN ORIGINATOR.— 
(A) IN GENERAL.—The term ‘‘loan originator’’— 
(i) means an individual who— 
(I) takes a residential mortgage loan applica-
tion; and 
(II) offers or negotiates terms of a residential 
mortgage loan for compensation or gain; 
(ii) does not include any individual who is not 
otherwise described in clause (i) and who performs 
purely administrative or clerical tasks on behalf of 
a person who is described in any such clause; 
(iii) does not include a person or entity that only 
performs real estate brokerage activities and is licensed 
or registered in accordance with applicable State law, 
unless the person or entity is compensated by a lender, 
a mortgage broker, or other loan originator or by any 
agent of such lender, mortgage broker, or other loan 
originator; and 
(iv) does not include a person or entity solely 
involved in extensions of credit relating to timeshare 
plans, as that term is defined in section 101(53D) 
of title 11, United States Code. 
(B) OTHER
DEFINITIONS
RELATING
TO
LOAN
ORIGI-
NATOR.—For purposes of this subsection, an individual 
‘‘assists a consumer in obtaining or applying to obtain 
a residential mortgage loan’’ by, among other things, 
advising on loan terms (including rates, fees, other costs), 
preparing loan packages, or collecting information on behalf 
of the consumer with regard to a residential mortgage 
loan. 
(C) ADMINISTRATIVE
OR
CLERICAL
TASKS.—The term 
‘‘administrative or clerical tasks’’ means the receipt, collec-
tion, and distribution of information common for the proc-
essing or underwriting of a loan in the mortgage industry
H. R. 3221—159 
and communication with a consumer to obtain information 
necessary for the processing or underwriting of a residential 
mortgage loan. 
(D) REAL ESTATE BROKERAGE ACTIVITY DEFINED.—The 
term ‘‘real estate brokerage activity’’ means any activity 
that involves offering or providing real estate brokerage 
services to the public, including— 
(i) acting as a real estate agent or real estate 
broker for a buyer, seller, lessor, or lessee of real 
property; 
(ii) bringing together parties interested in the sale, 
purchase, lease, rental, or exchange of real property; 
(iii) negotiating, on behalf of any party, any portion 
of a contract relating to the sale, purchase, lease, 
rental, or exchange of real property (other than in 
connection with providing financing with respect to 
any such transaction); 
(iv) engaging in any activity for which a person 
engaged in the activity is required to be registered 
or licensed as a real estate agent or real estate broker 
under any applicable law; and 
(v) offering to engage in any activity, or act in 
any capacity, described in clause (i), (ii), (iii), or (iv). 
(4) LOAN PROCESSOR OR UNDERWRITER.— 
(A) IN GENERAL.—The term ‘‘loan processor or under-
writer’’ means an individual who performs clerical or sup-
port duties at the direction of and subject to the supervision 
and instruction of— 
(i) a State-licensed loan originator; or 
(ii) a registered loan originator. 
(B) CLERICAL
OR
SUPPORT
DUTIES.—For purposes of 
subparagraph (A), the term ‘‘clerical or support duties’’ 
may include— 
(i) the receipt, collection, distribution, and analysis 
of information common for the processing or under-
writing of a residential mortgage loan; and 
(ii) communicating with a consumer to obtain the 
information necessary for the processing or under-
writing of a loan, to the extent that such communica-
tion does not include offering or negotiating loan rates 
or terms, or counseling consumers about residential 
mortgage loan rates or terms. 
(5) NATIONWIDE MORTGAGE LICENSING SYSTEM AND REG-
ISTRY.—The term ‘‘Nationwide Mortgage Licensing System and 
Registry’’ means a mortgage licensing system developed and 
maintained by the Conference of State Bank Supervisors and 
the American Association of Residential Mortgage Regulators 
for the State licensing and registration of State-licensed loan 
originators and the registration of registered loan originators 
or any system established by the Secretary under section 1509. 
(6) NONTRADITIONAL MORTGAGE PRODUCT.—The term ‘‘non-
traditional mortgage product’’ means any mortgage product 
other than a 30-year fixed rate mortgage. 
(7) REGISTERED LOAN ORIGINATOR.—The term ‘‘registered 
loan originator’’ means any individual who— 
(A) meets the definition of loan originator and is an 
employee of—
H. R. 3221—160 
(i) a depository institution; 
(ii) a subsidiary that is— 
(I) owned and controlled by a depository 
institution; and 
(II) regulated by a Federal banking agency; 
or 
(iii) an institution regulated by the Farm Credit 
Administration; and 
(B) is registered with, and maintains a unique identi-
fier through, the Nationwide Mortgage Licensing System 
and Registry. 
(8) RESIDENTIAL MORTGAGE LOAN.—The term ‘‘residential 
mortgage loan’’ means any loan primarily for personal, family, 
or household use that is secured by a mortgage, deed of trust, 
or other equivalent consensual security interest on a dwelling 
(as defined in section 103(v) of the Truth in Lending Act) 
or residential real estate upon which is constructed or intended 
to be constructed a dwelling (as so defined). 
(9) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 
of Housing and Urban Development. 
(10) STATE.—The term ‘‘State’’ means any State of the 
United States, the District of Columbia, any territory of the 
United States, Puerto Rico, Guam, American Samoa, the Trust 
Territory of the Pacific Islands, the Virgin Islands, and the 
Northern Mariana Islands. 
(11) STATE-LICENSED LOAN ORIGINATOR.—The term ‘‘State- 
licensed loan originator’’ means any individual who— 
(A) is a loan originator; 
(B) is not an employee of— 
(i) a depository institution; 
(ii) a subsidiary that is— 
(I) owned and controlled by a depository 
institution; and 
(II) regulated by a Federal banking agency; 
or 
(iii) an institution regulated by the Farm Credit 
Administration; and 
(C) is licensed by a State or by the Secretary under 
section 1508 and registered as a loan originator with, and 
maintains a unique identifier through, the Nationwide 
Mortgage Licensing System and Registry. 
(12) UNIQUE IDENTIFIER.— 
(A) IN GENERAL.—The term ‘‘unique identifier’’ means 
a number or other identifier that— 
(i) permanently identifies a loan originator; 
(ii) is assigned by protocols established by the 
Nationwide Mortgage Licensing System and Registry 
and the Federal banking agencies to facilitate elec-
tronic tracking of loan originators and uniform identi-
fication of, and public access to, the employment his-
tory of and the publicly adjudicated disciplinary and 
enforcement actions against loan originators; and 
(iii) shall not be used for purposes other than 
those set forth under this title. 
(B) RESPONSIBILITY OF STATES.—To the greatest extent 
possible and to accomplish the purpose of this title, States
H. R. 3221—161 
shall use unique identifiers in lieu of social security num-
bers. 
SEC. 1504. LICENSE OR REGISTRATION REQUIRED. 
(a) IN GENERAL.—Subject to the existence of a licensing or 
registration regime, as the case may be, an individual may not 
engage in the business of a loan originator without first— 
(1) obtaining, and maintaining annually— 
(A) a registration as a registered loan originator; or 
(B) a license and registration as a State-licensed loan 
originator; and 
(2) obtaining a unique identifier. 
(b) LOAN PROCESSORS AND UNDERWRITERS.— 
(1) SUPERVISED LOAN PROCESSORS AND UNDERWRITERS.— 
A loan processor or underwriter who does not represent to 
the public, through advertising or other means of commu-
nicating or providing information (including the use of business 
cards, stationery, brochures, signs, rate lists, or other pro-
motional items), that such individual can or will perform any 
of the activities of a loan originator shall not be required 
to be a State-licensed loan originator. 
(2) INDEPENDENT
CONTRACTORS.—An independent con-
tractor may not engage in residential mortgage loan origination 
activities as a loan processor or underwriter unless such inde-
pendent contractor is a State-licensed loan originator. 
SEC. 1505. STATE LICENSE AND REGISTRATION APPLICATION AND 
ISSUANCE. 
(a) BACKGROUND CHECKS.—In connection with an application 
to any State for licensing and registration as a State-licensed loan 
originator, the applicant shall, at a minimum, furnish to the Nation-
wide Mortgage Licensing System and Registry information con-
cerning the applicant’s identity, including— 
(1) fingerprints for submission to the Federal Bureau of 
Investigation, and any governmental agency or entity author-
ized to receive such information for a State and national 
criminal history background check; and 
(2) personal history and experience, including authorization 
for the System to obtain— 
(A) an independent credit report obtained from a con-
sumer reporting agency described in section 603(p) of the 
Fair Credit Reporting Act; and 
(B) information related to any administrative, civil or 
criminal findings by any governmental jurisdiction. 
(b) ISSUANCE
OF
LICENSE.—The minimum standards for 
licensing and registration as a State-licensed loan originator shall 
include the following: 
(1) The applicant has never had a loan originator license 
revoked in any governmental jurisdiction. 
(2) The applicant has not been convicted of, or pled guilty 
or nolo contendere to, a felony in a domestic, foreign, or military 
court— 
(A) during the 7-year period preceding the date of 
the application for licensing and registration; or 
(B) at any time preceding such date of application, 
if such felony involved an act of fraud, dishonesty, or a 
breach of trust, or money laundering.
H. R. 3221—162 
(3) The applicant has demonstrated financial responsibility, 
character, and general fitness such as to command the con-
fidence of the community and to warrant a determination that 
the loan originator will operate honestly, fairly, and efficiently 
within the purposes of this title. 
(4) The applicant has completed the pre-licensing education 
requirement described in subsection (c). 
(5) The applicant has passed a written test that meets 
the test requirement described in subsection (d). 
(6) The applicant has met either a net worth or surety 
bond requirement, or paid into a State fund, as required by 
the State pursuant to section 1508(d)(6). 
(c) PRE-LICENSING EDUCATION OF LOAN ORIGINATORS.— 
(1) MINIMUM
EDUCATIONAL
REQUIREMENTS.—In order to 
meet the pre-licensing education requirement referred to in 
subsection (b)(4), a person shall complete at least 20 hours 
of education approved in accordance with paragraph (2), which 
shall include at least— 
(A) 3 hours of Federal law and regulations; 
(B) 3 hours of ethics, which shall include instruction 
on fraud, consumer protection, and fair lending issues; 
and 
(C) 2 hours of training related to lending standards 
for the nontraditional mortgage product marketplace. 
(2) APPROVED
EDUCATIONAL
COURSES.—For purposes of 
paragraph (1), pre-licensing education courses shall be 
reviewed, and approved by the Nationwide Mortgage Licensing 
System and Registry. 
(3) LIMITATION AND STANDARDS.— 
(A) LIMITATION.—To maintain the independence of the 
approval process, the Nationwide Mortgage Licensing 
System and Registry shall not directly or indirectly offer 
pre-licensure educational courses for loan originators. 
(B) STANDARDS.—In approving courses under this sec-
tion, the Nationwide Mortgage Licensing System and Reg-
istry shall apply reasonable standards in the review and 
approval of courses. 
(d) TESTING OF LOAN ORIGINATORS.— 
(1) IN GENERAL.—In order to meet the written test require-
ment referred to in subsection (b)(5), an individual shall pass, 
in accordance with the standards established under this sub-
section, a qualified written test developed by the Nationwide 
Mortgage Licensing System and Registry and administered by 
an approved test provider. 
(2) QUALIFIED TEST.—A written test shall not be treated 
as a qualified written test for purposes of paragraph (1) unless 
the test adequately measures the applicant’s knowledge and 
comprehension in appropriate subject areas, including— 
(A) ethics; 
(B) Federal law and regulation pertaining to mortgage 
origination; 
(C) State law and regulation pertaining to mortgage 
origination; 
(D) Federal and State law and regulation, including 
instruction on fraud, consumer protection, the nontradi-
tional mortgage marketplace, and fair lending issues. 
(3) MINIMUM COMPETENCE.—
H. R. 3221—163 
(A) PASSING SCORE.—An individual shall not be consid-
ered to have passed a qualified written test unless the 
individual achieves a test score of not less than 75 percent 
correct answers to questions. 
(B) INITIAL RETESTS.—An individual may retake a test 
3 consecutive times with each consecutive taking occurring 
at least 30 days after the preceding test. 
(C) SUBSEQUENT RETESTS.—After failing 3 consecutive 
tests, an individual shall wait at least 6 months before 
taking the test again. 
(D) RETEST AFTER LAPSE OF LICENSE.—A State-licensed 
loan originator who fails to maintain a valid license for 
a period of 5 years or longer shall retake the test, not 
taking into account any time during which such individual 
is a registered loan originator. 
(e) MORTGAGE CALL REPORTS.—Each mortgage licensee shall 
submit to the Nationwide Mortgage Licensing System and Registry 
reports of condition, which shall be in such form and shall contain 
such information as the Nationwide Mortgage Licensing System 
and Registry may require. 
SEC. 1506. STANDARDS FOR STATE LICENSE RENEWAL. 
(a) IN GENERAL.—The minimum standards for license renewal 
for State-licensed loan originators shall include the following: 
(1) The loan originator continues to meet the minimum 
standards for license issuance. 
(2) The loan originator has satisfied the annual continuing 
education requirements described in subsection (b). 
(b) CONTINUING EDUCATION FOR STATE-LICENSED LOAN ORIGI-
NATORS.— 
(1) IN GENERAL.—In order to meet the annual continuing 
education requirements referred to in subsection (a)(2), a State- 
licensed loan originator shall complete at least 8 hours of 
education approved in accordance with paragraph (2), which 
shall include at least— 
(A) 3 hours of Federal law and regulations; 
(B) 2 hours of ethics, which shall include instruction 
on fraud, consumer protection, and fair lending issues; 
and 
(C) 2 hours of training related to lending standards 
for the nontraditional mortgage product marketplace. 
(2) APPROVED
EDUCATIONAL
COURSES.—For purposes of 
paragraph (1), continuing education courses shall be reviewed, 
and approved by the Nationwide Mortgage Licensing System 
and Registry. 
(3) CALCULATION OF CONTINUING EDUCATION CREDITS.—A 
State-licensed loan originator— 
(A) may only receive credit for a continuing education 
course in the year in which the course is taken; and 
(B) may not take the same approved course in the 
same or successive years to meet the annual requirements 
for continuing education. 
(4) INSTRUCTOR CREDIT.—A State-licensed loan originator 
who is approved as an instructor of an approved continuing 
education course may receive credit for the originator’s own 
annual continuing education requirement at the rate of 2 hours 
credit for every 1 hour taught.
H. R. 3221—164 
(5) LIMITATION AND STANDARDS.— 
(A) LIMITATION.—To maintain the independence of the 
approval process, the Nationwide Mortgage Licensing 
System and Registry shall not directly or indirectly offer 
any continuing education courses for loan originators. 
(B) STANDARDS.—In approving courses under this sec-
tion, the Nationwide Mortgage Licensing System and Reg-
istry shall apply reasonable standards in the review and 
approval of courses. 
SEC. 1507. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL 
AGENCIES. 
(a) DEVELOPMENT.— 
(1) IN
GENERAL.—The Federal banking agencies shall 
jointly, through the Federal Financial Institutions Examination 
Council, and together with the Farm Credit Administration, 
develop and maintain a system for registering employees of 
a depository institution, employees of a subsidiary that is owned 
and controlled by a depository institution and regulated by 
a Federal banking agency, or employees of an institution regu-
lated by the Farm Credit Administration, as registered loan 
originators with the Nationwide Mortgage Licensing System 
and Registry. The system shall be implemented before the 
end of the 1-year period beginning on the date of enactment 
of this title. 
(2) REGISTRATION REQUIREMENTS.—In connection with the 
registration of any loan originator under this subsection, the 
appropriate Federal banking agency and the Farm Credit 
Administration shall, at a minimum, furnish or cause to be 
furnished to the Nationwide Mortgage Licensing System and 
Registry information concerning the employees’s identity, 
including— 
(A) fingerprints for submission to the Federal Bureau 
of Investigation, and any governmental agency or entity 
authorized to receive such information for a State and 
national criminal history background check; and 
(B) 
personal 
history 
and 
experience, 
including 
authorization for the Nationwide Mortgage Licensing 
System and Registry to obtain information related to any 
administrative, civil or criminal findings by any govern-
mental jurisdiction. 
(b) COORDINATION.— 
(1) UNIQUE
IDENTIFIER.—The Federal banking agencies, 
through the Financial Institutions Examination Council, and 
the Farm Credit Administration shall coordinate with the 
Nationwide Mortgage Licensing System and Registry to estab-
lish protocols for assigning a unique identifier to each registered 
loan originator that will facilitate electronic tracking and uni-
form identification of, and public access to, the employment 
history of and publicly adjudicated disciplinary and enforcement 
actions against loan originators. 
(2) NATIONWIDE MORTGAGE LICENSING SYSTEM AND REG-
ISTRY DEVELOPMENT.—To facilitate the transfer of information 
required by subsection (a)(2), the Nationwide Mortgage 
Licensing System and Registry shall coordinate with the Fed-
eral banking agencies, through the Financial Institutions
H. R. 3221—165 
Examination Council, and the Farm Credit Administration con-
cerning the development and operation, by such System and 
Registry, of the registration functionality and data require-
ments for loan originators. 
(c) CONSIDERATION OF FACTORS AND PROCEDURES.—In estab-
lishing the registration procedures under subsection (a) and the 
protocols for assigning a unique identifier to a registered loan 
originator, the Federal banking agencies shall make such de 
minimis exceptions as may be appropriate to paragraphs (1)(A) 
and (2) of section 1504(a), shall make reasonable efforts to utilize 
existing information to minimize the burden of registering loan 
originators, and shall consider methods for automating the process 
to the greatest extent practicable consistent with the purposes 
of this title. 
SEC. 1508. SECRETARY OF HOUSING AND URBAN DEVELOPMENT 
BACKUP AUTHORITY TO ESTABLISH A LOAN ORIGINATOR 
LICENSING SYSTEM. 
(a) BACKUP LICENSING SYSTEM.—If, by the end of the 1-year 
period, or the 2-year period in the case of a State whose legislature 
meets only biennially, beginning on the date of the enactment 
of this title or at any time thereafter, the Secretary determines 
that a State does not have in place by law or regulation a system 
for licensing and registering loan originators that meets the require-
ments of sections 1505 and 1506 and subsection (d) of this section, 
or does not participate in the Nationwide Mortgage Licensing 
System and Registry, the Secretary shall provide for the establish-
ment and maintenance of a system for the licensing and registration 
by the Secretary of loan originators operating in such State as 
State-licensed loan originators. 
(b) LICENSING AND REGISTRATION REQUIREMENTS.—The system 
established by the Secretary under subsection (a) for any State 
shall meet the requirements of sections 1505 and 1506 for State- 
licensed loan originators. 
(c) UNIQUE IDENTIFIER.—The Secretary shall coordinate with 
the Nationwide Mortgage Licensing System and Registry to estab-
lish protocols for assigning a unique identifier to each loan origi-
nator licensed by the Secretary as a State-licensed loan originator 
that will facilitate electronic tracking and uniform identification 
of, and public access to, the employment history of and the publicly 
adjudicated disciplinary and enforcement actions against loan origi-
nators. 
(d) STATE LICENSING LAW REQUIREMENTS.—For purposes of 
this section, the law in effect in a State meets the requirements 
of this subsection if the Secretary determines the law satisfies 
the following minimum requirements: 
(1) A State loan originator supervisory authority is main-
tained to provide effective supervision and enforcement of such 
law, including the suspension, termination, or nonrenewal of 
a license for a violation of State or Federal law. 
(2) The State loan originator supervisory authority ensures 
that all State-licensed loan originators operating in the State 
are registered with Nationwide Mortgage Licensing System 
and Registry. 
(3) The State loan originator supervisory authority is 
required to regularly report violations of such law, as well
H. R. 3221—166 
as enforcement actions and other relevant information, to the 
Nationwide Mortgage Licensing System and Registry. 
(4) The State loan originator supervisory authority has 
a process in place for challenging information contained in 
the Nationwide Mortgage Licensing System and Registry. 
(5) The State loan originator supervisory authority has 
established a mechanism to assess civil money penalties for 
individuals acting as mortgage originators in their State with-
out a valid license or registration. 
(6) The State loan originator supervisory authority has 
established minimum net worth or surety bonding requirements 
that reflect the dollar amount of loans originated by a residen-
tial mortgage loan originator, or has established a recovery 
fund paid into by the loan originators. 
(e) TEMPORARY EXTENSION
OF PERIOD.—The Secretary may 
extend, by not more than 24 months, the 1-year or 2-year period, 
as the case may be, referred to in subsection (a) for the licensing 
of loan originators in any State under a State licensing law that 
meets the requirements of sections 1505 and 1506 and subsection 
(d) if the Secretary determines that such State is making a good 
faith effort to establish a State licensing law that meets such 
requirements, license mortgage originators under such law, and 
register such originators with the Nationwide Mortgage Licensing 
System and Registry. 
SEC. 1509. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE MORT-
GAGE LICENSING AND REGISTRY SYSTEM. 
If at any time the Secretary determines that the Nationwide 
Mortgage Licensing System and Registry is failing to meet the 
requirements and purposes of this title for a comprehensive 
licensing, supervisory, and tracking system for loan originators, 
the Secretary shall establish and maintain such a system to carry 
out the purposes of this title and the effective registration and 
regulation of loan originators. 
SEC. 1510. FEES. 
The Federal banking agencies, the Farm Credit Administration, 
the Secretary, and the Nationwide Mortgage Licensing System and 
Registry may charge reasonable fees to cover the costs of 
maintaining and providing access to information from the Nation-
wide Mortgage Licensing System and Registry, to the extent that 
such fees are not charged to consumers for access to such system 
and registry. 
SEC. 1511. BACKGROUND CHECKS OF LOAN ORIGINATORS. 
(a) ACCESS TO RECORDS.—Notwithstanding any other provision 
of law, in providing identification and processing functions, the 
Attorney General shall provide access to all criminal history 
information to the appropriate State officials responsible for regu-
lating State-licensed loan originators to the extent criminal history 
background checks are required under the laws of the State for 
the licensing of such loan originators. 
(b) AGENT.—For the purposes of this section and in order to 
reduce the points of contact which the Federal Bureau of Investiga-
tion may have to maintain for purposes of subsection (a), the 
Conference of State Bank Supervisors or a wholly owned subsidiary 
may be used as a channeling agent of the States for requesting
H. R. 3221—167 
and distributing information between the Department of Justice 
and the appropriate State agencies. 
SEC. 1512. CONFIDENTIALITY OF INFORMATION. 
(a) SYSTEM CONFIDENTIALITY.—Except as otherwise provided 
in this section, any requirement under Federal or State law 
regarding the privacy or confidentiality of any information or mate-
rial provided to the Nationwide Mortgage Licensing System and 
Registry or a system established by the Secretary under section 
1509, and any privilege arising under Federal or State law 
(including the rules of any Federal or State court) with respect 
to such information or material, shall continue to apply to such 
information or material after the information or material has been 
disclosed to the system. Such information and material may be 
shared with all State and Federal regulatory officials with mortgage 
industry oversight authority without the loss of privilege or the 
loss of confidentiality protections provided by Federal and State 
laws. 
(b) NONAPPLICABILITY OF CERTAIN REQUIREMENTS.—Informa-
tion or material that is subject to a privilege or confidentiality 
under subsection (a) shall not be subject to— 
(1) disclosure under any Federal or State law governing 
the disclosure to the public of information held by an officer 
or an agency of the Federal Government or the respective 
State; or 
(2) subpoena or discovery, or admission into evidence, in 
any private civil action or administrative process, unless with 
respect to any privilege held by the Nationwide Mortgage 
Licensing System and Registry or the Secretary with respect 
to such information or material, the person to whom such 
information or material pertains waives, in whole or in part, 
in the discretion of such person, that privilege. 
(c) COORDINATION WITH OTHER LAW.—Any State law, including 
any State open record law, relating to the disclosure of confidential 
supervisory information or any information or material described 
in subsection (a) that is inconsistent with subsection (a) shall be 
superseded by the requirements of such provision to the extent 
State law provides less confidentiality or a weaker privilege. 
(d) PUBLIC ACCESS TO INFORMATION.—This section shall not 
apply with respect to the information or material relating to the 
employment history of, and publicly adjudicated disciplinary and 
enforcement actions against, loan originators that is included in 
Nationwide Mortgage Licensing System and Registry for access 
by the public. 
SEC. 1513. LIABILITY PROVISIONS. 
The Secretary, any State official or agency, any Federal banking 
agency, or any organization serving as the administrator of the 
Nationwide Mortgage Licensing System and Registry or a system 
established by the Secretary under section 1509, or any officer 
or employee of any such entity, shall not be subject to any civil 
action or proceeding for monetary damages by reason of the good 
faith action or omission of any officer or employee of any such 
entity, while acting within the scope of office or employment, 
relating to the collection, furnishing, or dissemination of information 
concerning persons who are loan originators or are applying for 
licensing or registration as loan originators.
H. R. 3221—177 
SEC. 1605. SENSE OF THE SENATE. 
It is the sense of the Senate that in implementing or carrying 
out any provision of this Act, or any amendment made by this 
Act, the Senate supports a policy of noninterference regarding local 
government requirements that the holder of a foreclosed property 
maintain that property. 
DIVISION B—FORECLOSURE 
PREVENTION 
SEC. 2001. SHORT TITLE. 
This division may be cited as the ‘‘Foreclosure Prevention Act 
of 2008’’. 
SEC. 2002. EMERGENCY DESIGNATION. 
For purposes of Senate enforcement, all provisions of this divi-
sion are designated as emergency requirements and necessary to 
meet emergency needs pursuant to section 204 of S. Con. Res. 
21 (110th Congress), the concurrent resolution on the budget for 
fiscal year 2008. 
TITLE I—FHA MODERNIZATION ACT OF 
2008 
SEC. 2101. SHORT TITLE. 
This title may be cited as the ‘‘FHA Modernization Act of 
2008’’. 
Subtitle A—Building American 
Homeownership 
SEC. 2111. SHORT TITLE. 
This subtitle may be cited as the ‘‘Building American 
Homeownership Act of 2008’’. 
SEC. 2112. MAXIMUM PRINCIPAL LOAN OBLIGATION. 
(a) IN GENERAL.—Paragraph (2) of section 203(b) of the National 
Housing Act (12 U.S.C. 1709(b)(2)) is amended— 
(1) by striking subparagraphs (A) and (B) and inserting 
the following: 
‘‘(A) not to exceed the lesser of— 
‘‘(i) in the case of a 1-family residence, 115 percent 
of the median 1-family house price in the area, as 
determined by the Secretary; and in the case of a 
2-, 3-, or 4-family residence, the percentage of such 
median price that bears the same ratio to such median 
price as the dollar amount limitation determined under 
the sixth sentence of section 305(a)(2) of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 
1454(a)(2)) for a 2-, 3-, or 4-family residence, respec-
tively, bears to the dollar amount limitation deter-
mined under such section for a 1-family residence; 
or
H. R. 3221—249 
(e)(6)(D)(i)), any independent contractor if, at the time such 
contractor enters into a management agreement or other 
similar service contract with the taxable REIT subsidiary 
to operate such qualified lodging facility or qualified health 
care property, such contractor (or any related person) is 
actively engaged in the trade or business of operating quali-
fied lodging facilities or qualified health care properties, 
respectively, for any person who is not a related person 
with respect to the real estate investment trust or the 
taxable REIT subsidiary. 
‘‘(B) SPECIAL RULES.—Solely for purposes of this para-
graph and paragraph (8)(B), a person shall not fail to 
be treated as an independent contractor with respect to 
any qualified lodging facility or qualified health care prop-
erty (as so defined) by reason of the following: 
‘‘(i) The taxable REIT subsidiary bears the 
expenses for the operation of such qualified lodging 
facility or qualified health care property pursuant to 
the management agreement or other similar service 
contract. 
‘‘(ii) The taxable REIT subsidiary receives the reve-
nues from the operation of such qualified lodging 
facility or qualified health care property, net of 
expenses for such operation and fees payable to the 
operator pursuant to such agreement or contract. 
‘‘(iii) The real estate investment trust receives 
income from such person with respect to another prop-
erty that is attributable to a lease of such other prop-
erty to such person that was in effect as of the later 
of— 
‘‘(I) January 1, 1999, or 
‘‘(II) the earliest date that any taxable REIT 
subsidiary of such trust entered into a manage-
ment agreement or other similar service contract 
with such person with respect to such qualified 
lodging facility or qualified health care property.’’. 
(c) TAXABLE REIT SUBSIDIARIES.—The last sentence of section 
856(l)(3) is amended— 
(1) by inserting ‘‘or a health care facility’’ after ‘‘a lodging 
facility’’, and 
(2) by inserting ‘‘or health care facility’’ after ‘‘such lodging 
facility’’. 
Subtitle E—Effective Dates 
SEC. 3071. EFFECTIVE DATES. 
(a) IN GENERAL.—Except as otherwise provided in this section, 
the amendments made by this title shall apply to taxable years 
beginning after the date of the enactment of this Act. 
(b) REIT INCOME TESTS.— 
(1) The amendments made by section 3031(a) and (c) shall 
apply to gains and items of income recognized after the date 
of the enactment of this Act. 
(2) The amendment made by section 3031(b) shall apply 
to transactions entered into after the date of the enactment 
of this Act.
H. R. 3221—250 
(c) CONFORMING FOREIGN CURRENCY REVISIONS.— 
(1) The amendment made by section 3033(a) shall apply 
to gains recognized after the date of the enactment of this 
Act. 
(2) The amendment made by section 3033(b) shall apply 
to gains and deductions recognized after the date of the enact-
ment of this Act. 
(d) DEALER SALES.—The amendments made by subtitle C shall 
apply to sales made after the date of the enactment of this Act. 
TITLE III—REVENUE PROVISIONS 
Subtitle A—General Provisions 
SEC. 3081. ELECTION TO ACCELERATE THE AMT AND RESEARCH 
CREDITS IN LIEU OF BONUS DEPRECIATION. 
(a) IN GENERAL.—Section 168(k) is amended by adding at the 
end the following new paragraph: 
‘‘(4) ELECTION
TO
ACCELERATE
THE
AMT
AND
RESEARCH 
CREDITS IN LIEU OF BONUS DEPRECIATION.— 
‘‘(A) IN GENERAL.—If a corporation elects to have this 
paragraph apply for the first taxable year of the taxpayer 
ending after March 31, 2008, in the case of such taxable 
year and each subsequent taxable year— 
‘‘(i) paragraph (1) shall not apply to any eligible 
qualified property placed in service by the taxpayer, 
‘‘(ii) the applicable depreciation method used under 
this section with respect to such property shall be 
the straight line method, and 
‘‘(iii) each of the limitations described in subpara-
graph (B) for any such taxable year shall be increased 
by the bonus depreciation amount which is— 
‘‘(I) determined for such taxable year under 
subparagraph (C), and 
‘‘(II) 
allocated 
to 
such 
limitation 
under 
subparagraph (E). 
‘‘(B) LIMITATIONS TO BE INCREASED.—The limitations 
described in this subparagraph are— 
‘‘(i) the limitation imposed by section 38(c), and 
‘‘(ii) the limitation imposed by section 53(c). 
‘‘(C) BONUS DEPRECIATION AMOUNT.—For purposes of 
this paragraph— 
‘‘(i) IN GENERAL.—The bonus depreciation amount 
for any taxable year is an amount equal to 20 percent 
of the excess (if any) of— 
‘‘(I) the aggregate amount of depreciation 
which would be allowed under this section for 
eligible qualified property placed in service by the 
taxpayer during such taxable year if paragraph 
(1) applied to all such property, over 
‘‘(II) the aggregate amount of depreciation 
which would be allowed under this section for 
eligible qualified property placed in service by the 
taxpayer during such taxable year if paragraph 
(1) did not apply to any such property.
H. R. 3221—251 
The aggregate amounts determined under subclauses 
(I) and (II) shall be determined without regard to any 
election made under subsection (b)(2)(C), (b)(3)(D), or 
(g)(7) and without regard to subparagraph (A)(ii). 
‘‘(ii) MAXIMUM AMOUNT.—The bonus depreciation 
amount for any taxable year shall not exceed the max-
imum increase amount under clause (iii), reduced (but 
not below zero) by the sum of the bonus depreciation 
amounts for all preceding taxable years. 
‘‘(iii) MAXIMUM INCREASE AMOUNT.—For purposes 
of clause (ii), the term ‘maximum increase amount’ 
means, with respect to any corporation, the lesser of— 
‘‘(I) $30,000,000, or 
‘‘(II) 6 percent of the sum of the business credit 
increase amount, and the AMT credit increase 
amount, determined with respect to such corpora-
tion under subparagraph (E). 
‘‘(iv) AGGREGATION RULE.—All corporations which 
are treated as a single employer under section 52(a) 
shall be treated— 
‘‘(I) as 1 taxpayer for purposes of this para-
graph, and 
‘‘(II) as having elected the application of this 
paragraph if any such corporation so elects. 
‘‘(D) ELIGIBLE QUALIFIED PROPERTY.—For purposes of 
this paragraph, the term ‘eligible qualified property’ means 
qualified property under paragraph (2), except that in 
applying paragraph (2) for purposes of this paragraph— 
‘‘(i) ‘March 31, 2008’ shall be substituted for 
‘December 31, 2007’ each place it appears in subpara-
graph (A) and clauses (i) and (ii) of subparagraph 
(E) thereof, and 
‘‘(ii) only adjusted basis attributable to manufac-
ture, construction, or production after March 31, 2008, 
and before January 1, 2009, shall be taken into account 
under subparagraph (B)(ii) thereof. 
‘‘(E) ALLOCATION OF BONUS DEPRECIATION AMOUNTS.— 
‘‘(i) IN GENERAL.—Subject to clauses (ii) and (iii), 
the taxpayer shall, at such time and in such manner 
as the Secretary may prescribe, specify the portion 
(if any) of the bonus depreciation amount for the tax-
able year which is to be allocated to each of the limita-
tions described in subparagraph (B) for such taxable 
year. 
‘‘(ii) LIMITATION ON ALLOCATIONS.—The portion of 
the bonus depreciation amount which may be allocated 
under clause (i) to the limitations described in subpara-
graph (B) for any taxable year shall not exceed— 
‘‘(I) in the case of the limitation described in 
subparagraph (B)(i), the excess of the business 
credit increase amount over the bonus depreciation 
amount allocated to such limitation for all pre-
ceding taxable years, and 
‘‘(II) in the case of the limitation described 
in subparagraph (B)(ii), the excess of the AMT 
credit increase amount over the bonus depreciation