To authorize depository institutions, depository institution holding companies, Fannie Mae, and Freddie Mac to lease foreclosed property held by such entities for up to 5 years, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Neighborhood Preservation Act of 
2011''.

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) Depository institutions and affiliates of depository 
        institutions currently may control and lease foreclosed 
        property for a limited period of time often subject to safety 
        and soundness considerations, under various Federal laws and 
        the law of some States.
            (2) Authorizing such institutions, the GSEs, and affiliates 
        to enter into a long-term lease with the occupant of the 
        property or any other person would reduce the number of 
        residential properties entering into the housing inventory, 
        which in turn would help to stabilize home values and restore 
        confidence in the housing markets.
            (3) Allowing depository institutions, the GSEs, and 
        affiliates of such institutions to lease foreclosed property 
        will allow the institution or affiliate to dispose of such 
        property into a presumably more stable market at the end of the 
        lease term which would reduce the loss the institution or 
        affiliate may otherwise be required to recognize upon 
        disposition of the property.
            (4) Providing a means for foreclosed property to remain 
        occupied during the housing downturn will preserve the property 
        itself as well as the aesthetic and economic values of 
        neighboring homes and even whole neighborhoods.

SEC. 3. BANK LEASING OF FORECLOSED PROPERTIES.

    (a) In General.--Section 18 of the Federal Deposit Insurance Act 
(12 U.S.C. 1828) is amended by adding at the end the following new 
subsection:
    ``(y) Leasing of Foreclosed Property.--
            ``(1) Leasing authorized.--Notwithstanding any provision of 
        Federal or State law restricting the time during which a 
        depository institution, or any affiliate of a depository 
        institution, may hold or lease property, or any provision of 
        Federal or State law prohibiting a depository institution, or 
        any affiliate of a depository institution, from leasing 
        property and subject to this subsection and regulations 
        prescribed under this subsection, any depository institution, 
        and any affiliate of a depository institution, may lease to any 
        individual, including a lease with an option to purchase, for 
        not to exceed 5 years an interest in residential property 
        which--
                    ``(A) was or is security for an extension of credit 
                by such depository institution or affiliate; and
                    ``(B) came under the ownership or control of the 
                depository institution or affiliate through 
                foreclosure, or a deed in lieu of foreclosure, on the 
                extension of credit.
            ``(2) Safety and soundness regulations.--The Federal 
        banking agencies shall jointly prescribe regulations which--
                    ``(A) establish criteria and minimum requirements 
                for the leasing activity of any depository institution 
                or affiliate of a depository institution, including 
                minimum capital requirements, that the agency 
                determines to be appropriate for the preservation of 
                the safety and soundness of the institution or 
                affiliate;
                    ``(B) establish requirements or exceptions that the 
                agency determines are appropriate under this subsection 
                for any such institution or affiliate for any other 
                purpose; and
                    ``(C) provide for appropriate actions under section 
                38 with respect to any such lease if necessary to 
                protect the capital or safety and soundness of the 
                institution or affiliate or any other necessary 
                enforcement action.
            ``(3) Length of lease.--If any provision of any Federal or 
        State law, including the Bank Holding Company Act of 1956, 
        governing the permissible activities of depository institutions 
        or affiliates of depository institutions permits a depository 
        institution or any such affiliate to hold property as described 
        in paragraph (1) for a period longer than 5 years, any lease 
        under paragraph (1) may be extended to the extent permitted by 
        such provision of law.
            ``(4) Sunset.--This section shall apply only with respect 
        to leases entered into during the 3-year period beginning on 
        the date of the enactment of the Neighborhood Preservation 
        Act.''.
    (b) Intent of the Congress.--It is the intent of the Congress 
that--
            (1) no permanent change in policy on leasing foreclosed 
        property is being established with respect to depository 
        institutions and depository institution holding companies; and
            (2) subsection (y) of section 18 of the Federal Deposit 
        Insurance Act should not apply to leases entered into after the 
        sunset date contained in such subsection.

SEC. 4. GOVERNMENT SPONSORED ENTERPRISE LEASING OF FORECLOSED 
              PROPERTIES.

    (a) In General.--For the purpose of mitigating losses to the 
taxpayer and stabilizing home prices, an enterprise may market for 
rental any real estate owned properties and assets of such enterprises 
and enter into lease agreements with lessees as the Federal Housing 
Finance Agency determines appropriate, prior to the sale of such 
properties and assets, except that any such lease agreement shall be no 
greater than 5 years. Authority to enter into leasing agreements 
pursuant to this subsection shall terminate 3 years after the date of 
the enactment of this Act.
    (b) Enterprise Defined.--The term ``enterprise'' means--
            (1) the Federal National Mortgage Association; and
            (2) the Federal Home Loan Mortgage Corporation.

Summary: Neighborhood Preservation Act of 2011 - Amends the Federal Deposit Insurance Act to authorize any depository institution (or affiliate) to lease, including lease with an option to purchase, to any individual for up to five years an interest in residential property which: (1) was or is security for an extension of credit by such depository institution (or affiliate), and (2) came under the institution's or affiliate's ownership or control through foreclosure (or a deed in lieu of foreclosure) on the extension of credit.

Directs the federal banking agencies to jointly prescribe specified safety and soundness regulations, including minimum capital requirements for such institutions or affiliates.

Permits extension of such a lease beyond five years if any federal or state law, including the Bank Holding Company Act of 1956, so permits.

Applies this Act only to leases entered into during the three-year period beginning on the date of the enactment of this Act.

Declares it is the intent of Congress that: (1) no permanent change in policy on leasing foreclosed property is being established with respect to depository institutions and depository institution holding companies, and (2) bank leasing of foreclosed property authorized under this Act should not apply to leases entered into after such three-year period.

Authorizes a government-sponsored enterprise (the Federal National Mortgage Association [Fannie Mae] or the Federal Home Loan Mortgage Corporation [Freddie Mac]) to market for rental, before sale, any of its real estate owned properties and assets as the Federal Housing Finance Agency (FHFA) determines appropriate. Restricts lease agreements to five years.