Source: http://law2.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715z-23&num=0&edition=prelim
Timestamp: 2019-04-23 02:52:10+00:00

Document:
There is established in the Federal Housing Administration a HOPE for Homeowners Program.
(7) to provide servicers of delinquent mortgages with additional methods and approaches to avoid foreclosure.
(B) prescribe such regulations and provide such guidance as may be necessary or appropriate to implement such requirements and standards.
In carrying out any of the program requirements or standards established under paragraph (1), the Secretary may issue such interim guidance and mortgagee letters as the Secretary determines necessary or appropriate.
The Board shall advise the Secretary regarding the establishment and implementation of the HOPE for Homeowners Program.
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).
The mortgagor shall provide a certification to the Secretary that the mortgagor has not intentionally defaulted on the existing mortgage or mortgages or any other substantial debt within the last 5 years and has not knowingly, or willfully and with actual knowledge, furnished material information known to be false for the purpose of obtaining the eligible mortgage to be insured and has not been convicted under Federal or State law for fraud during the 10-year period ending upon the insurance of the mortgage under this section.
The mortgagor shall agree in writing that the mortgagor shall be liable to repay to the Secretary any direct financial benefit achieved from the reduction of indebtedness on the existing mortgage or mortgages on the residence refinanced under this section derived from misrepresentations made by the mortgagor in the certifications and documentation required under this paragraph, subject to the discretion of the Secretary.
As of the date of application for a commitment to insure or insurance under this section, the mortgagor shall have had, or thereafter is likely to have, due to the terms of the mortgage being reset, 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 Secretary determines appropriate).
(B) not exceed 90 percent of the appraised value of the property to which such mortgage relates (or such higher percentage as the Secretary determines, in the discretion of the Secretary).
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.
All holders of outstanding mortgage liens on the property to which the eligible mortgage relates shall agree to accept the proceeds of the insured loan and any payments made under this paragraph, 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 as may be necessary and appropriate to facilitate coordination and agreement between the holders of the existing senior mortgage and any existing subordinate mortgages, taking into consideration the subordinate lien status of such subordinate mortgages. Such actions may include making payments, which shall be accepted as payment in full of all indebtedness under the eligible mortgage, to any holder of an existing subordinate mortgage, in lieu of any future appreciation payments authorized under subparagraph (B).
The Secretary may establish standards 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).
(IV) such other factors as the Secretary determines to be appropriate.
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.
(B) have a maturity of not less than 30 years from the date of the beginning of amortization of such refinanced eligible mortgage.
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 1454(a)(2) of this title for a property of the applicable size.
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 Secretary determines to be necessary to ensure the maintenance of property standards.
(E) comply with the requirements of subsection (g) of this section (relating to appraisal independence).
In complying with the FHA underwriting requirements under the HOPE for Homeowners Program under this section, the mortgagee shall document and verify the income of the mortgagor or non-filing status in accordance with procedures and standards that the Secretary shall establish (provided that such procedures and standards are consistent with section 1709(b) of this title to the maximum extent possible) which may include requiring the mortgagee to procure 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.
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.
The duty of the mortgagee to ensure that the mortgagor is in compliance with the prohibition under subparagraph (A) shall be satisfied if the mortgagee makes a good faith effort to determine that the mortgagor has not been convicted under Federal or State law for fraud during the period described in subparagraph (A).
The mortgagor shall provide documentation satisfactory in the determination of the Secretary 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 residence is the only residence in which the mortgagor has any present ownership interest, except that the Secretary may provide exceptions to such latter requirement (relating to present ownership interest) for any mortgagor who has inherited a property.
The mortgagor shall not have a net worth, as of the date the mortgagor first applies for a mortgage to be insured under the Program under this section, that exceeds $1,000,000.
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.
(v) and any other factors that the Board considers relevant.
(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.
Not later than the expiration of the 60-day period beginning on July 30, 2008, 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).
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.
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 1735f–14(a) of this title.
The Secretary shall, by rule or order, establish standards and policies to require the underwriter of the insured loan to provide such representations and warranties as the Secretary considers necessary or appropriate to enforce compliance with all underwriting and appraisal standards of the HOPE for Homeowners Program.
The Secretary shall not pay 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 mortgage.
The Secretary 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 performance for a reasonable period of time prior to being insured under the program.
(B) in addition to the premium required under paragraph (1), an annual premium in an amount not more than 1.5 percent of the amount of the remaining insured principal balance of the mortgage.
(B) the purposes of the HOPE for Homeowners Program described in subsection (b).
(2) procedures to ensure that interest rates on such mortgages shall be commensurate with market rate interest rates on such types of loans.
(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 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 Secretary shall be entitled to 50 percent of such equity and the mortgagor shall be entitled to 50 percent of such equity.
For each eligible mortgage insured under this section, the Secretary may, upon any sale or disposition of the property to which the mortgage relates, be entitled to up to 50 percent of appreciation, up to the appraised value of the home at the time when the mortgage being refinanced under this section was originally made. The Secretary may share any amounts received under this paragraph with or assign the rights of any amounts due to the Secretary to the holder of the existing senior mortgage on the eligible mortgage, the holder of any existing subordinate mortgage on the eligible mortgage, or both.
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 Secretary for carrying out the mortgage insurance obligations under this section.
The HOPE Fund shall be administered and managed by the Secretary, who shall establish reasonable and prudent criteria for the management and operation of any amounts in the HOPE Fund.
The aggregate original principal obligation of all mortgages insured under this section may not exceed $300,000,000,000.
(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 1 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 Secretary considers appropriate.
The Secretary shall carry out outreach efforts to ensure that homeowners, lenders, and the general public are aware of the opportunities for assistance available under this section.
(3) increase personnel of the Department as necessary to process or monitor the processing of mortgages insured under this section.
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.
To carry out the purposes of section 1721 of this title, 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.
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.
The term "approved financial institution or mortgagee" means a financial institution or mortgagee approved by the Secretary under section 1709 of this title as responsible and able to service mortgages responsibly.
The term "Board" means the Advisory Board for 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 designees.
(B) originated on or before January 1, 2008.
The term "existing senior mortgage" means, with respect to a mortgage insured under this section, the existing mortgage that has superior priority.
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.
The term "HOPE for Homeowners Program" means the program established under this section.
The term "Secretary" means the Secretary of Housing and Urban Development, except where specifically provided otherwise.
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.
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.
The Board may prescribe, amend, and repeal such bylaws as may be necessary for carrying out the functions of the Board.
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.
The Board shall procure the services of experts and consultants as the Board considers appropriate.
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.
Except as otherwise provided for in this section or by action of the Secretary, the provisions and requirements of section 1709(b) of this title shall apply with respect to the insurance of any eligible mortgage under this section. The Secretary shall conform documents, forms, and procedures for mortgages insured under this section to those in place for mortgages insured under section 1709(b) of this title to the maximum extent possible consistent with the requirements of this section.
(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 and payments pursuant to subsection (e)(4)(A).
Funds received pursuant to section 4568(b) of this title shall be used to reimburse the Secretary of the Treasury for amounts borrowed under paragraph (1).
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 Secretary under section 4567(e) of this title, remaining amounts in such fund to be used to reduce the 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.
(2) originator of each new loan insured under the HOPE for Homeowners Program.
The Secretary, with the concurrence of the Board, shall, if feasible, establish a structure and organize procedures for an auction to refinance eligible mortgages on a wholesale or bulk basis.
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989, referred to in subsec. (e)(8)(B), is Pub. L. 101–73, Aug. 9, 1989, 103 Stat. 183 . Title XI of the Act is classified principally to chapter 34A (§3331 et seq.) of this title. For complete classification of this Act to the Code, see Short Title of 1989 Amendment note set out under section 1811 of this title and Tables.
Section 1708(e) of this title, referred to in subsec. (e)(8)(D), was redesignated section 1708(f) and then 1708(g) of this title by Pub. L. 110–289, div. B, title I, §2116(1)(B), July 30, 2008, 122 Stat. 2832 , and Pub. L. 111–22, div. A, title II, §203(b)(1), May 20, 2009, 123 Stat. 1643 .
The Federal Credit Reform Act of 1990, referred to in subsec. (w)(1)(B), is title V of Pub. L. 93–344, as added by Pub. L. 101–508, title XIII, §13201(a), Nov. 5, 1990, 104 Stat. 1388–609 , which is classified generally to subchapter III (§661 et seq.) of chapter 17A of Title 2, The Congress. For complete classification of this Act to the Code, see Short Title note set out under section 621 of Title 2 and Tables.
Section 4568(b) of this title, referred to in subsec. (w)(2), was in the original "section 1338(b) of the Federal Housing Enterprises Regulatory Reform Act of 1992", and was translated as meaning section 1338(b) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, which is classified to section 4568(b) of this title, to reflect the probable intent of Congress.
Pub. L. 111–22, §202(a)(2), which directed amendment of subsecs. (e), (h)(1), (h)(3), (j), (l), (n), (s)(3), and (v) by substituting "Secretary" for "Board" each place such term appeared, was not executed to subsec. (e)(4)(A), (9), or the heading for subsec. (n), to reflect the probable intent of Congress and the amendments by Pub. L. 111–22, §202(a)(3)(B)(i), (D)(ii), (7). See 2009 Amendment notes below.
Another section 257 of act June 27, 1934, was renumbered section 258 and is classified to section 1715z–24 of this title.
2009-Subsec. (c)(1). Pub. L. 111–22, §202(a)(1)(A), (B), substituted "Secretary" for "the Board" in heading and "Secretary, after consultation with the Board," for "Board" in introductory provisions.
Subsec. (c)(1)(A). Pub. L. 111–22, §202(a)(1)(C), inserted "consistent with section 1709(b) of this title to the maximum extent possible" before semicolon.
Subsec. (c)(3). Pub. L. 111–22, §202(a)(1)(D), added par. (3).
Subsec. (e)(1). Pub. L. 111–22, §202(a)(3)(A), added par. (1) and struck out former par. (1) which related to lack of capacity to pay existing mortgage.
Subsec. (e)(2). Pub. L. 111–22, §202(a)(2), substituted "established by the Secretary" for "established by the Board" in subpar. (A) and "Secretary" for "Board" in two places in subpar. (B).
Subsec. (e)(4)(A). Pub. L. 111–22, §202(a)(3)(B)(i), struck out ", subject to standards established by the Board under subparagraph (B)," after "may take such actions". See Codification note above.
Subsec. (e)(4)(B)(i). Pub. L. 111–22, §202(a)(3)(B)(ii), substituted "may" for "shall".
Pub. L. 111–22, §202(a)(2), substituted "The Secretary" for "The Board".
Subsec. (e)(4)(B)(ii). Pub. L. 111–22, §202(a)(2), substituted "Secretary" for "Board" in introductory provisions and in subcl. (IV).
Subsec. (e)(7). Pub. L. 111–22, §202(a)(3)(C), struck out "; 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 indebtedness, do not exceed 95 percent of the home's appraised value at the time of the new second lien" after "property standards".
Pub. L. 111–22, §202(a)(2), substituted "Secretary" for "Board".
Subsec. (e)(9). Pub. L. 111–22, §202(a)(3)(D), substituted "in accordance with procedures and standards that the Secretary shall establish (provided that such procedures and standards are consistent with section 1709(b) of this title to the maximum extent possible) which may include requiring the mortgagee to procure" for "by procuring (A) an income tax return transcript of the income tax returns of the mortgagor, or (B)" and struck out "and by any other method, in accordance with procedures and standards that the Board shall establish" before period at end. See Codification note above.
Subsec. (e)(10). Pub. L. 111–22, §202(a)(3)(E), designated existing provisions as subpar. (A), inserted subpar. (A) heading, and added subpar. (B).
Subsec. (e)(11). Pub. L. 111–22, §202(a)(3)(F), inserted ", except that the Secretary may provide exceptions to such latter requirement (relating to present ownership interest) for any mortgagor who has inherited a property" before period at end.
Subsec. (e)(12). Pub. L. 111–22, §202(a)(3)(G), added par. (12).
Subsec. (h)(1). Pub. L. 111–22, §202(a)(2), substituted "Secretary" for "Board" in two places.
Subsec. (h)(2). Pub. L. 111–22, §202(a)(4), substituted "The Secretary shall not pay" for "The Board shall prohibit the Secretary from paying".
Subsec. (h)(3). Pub. L. 111–22, §202(a)(2), substituted "The Secretary" for "The Board".
Subsec. (i). Pub. L. 111–22, §202(a)(5), designated existing provisions as par. (1) and inserted heading, redesignated former pars. (1) and (2) as subpars. (A) and (B) of par. (1), respectively, and adjusted margins, substituted "not more than 3 percent" for "equal to 3 percent" in par. (1)(A) and "not more than 1.5 percent" for "equal to 1.5 percent" in par. (1)(B), and added par. (2).
Subsec. (j). Pub. L. 111–22, §202(a)(2), substituted "Secretary" for "Board" in introductory provisions.
Subsec. (k). Pub. L. 111–22, §202(a)(6)(A), substituted "Exit fee" for "Equity and appreciation" in heading.
Subsec. (k)(1). Pub. L. 111–22, §202(a)(6)(B), substituted "the mortgage being insured under this section" for "such sale or refinancing" in introductory provisions.
Subsec. (k)(2). Pub. L. 111–22, §202(a)(6)(C), substituted "may, upon any sale or disposition of the property to which the mortgage relates, be entitled to up to 50 percent of appreciation, up to the appraised value of the home at the time when the mortgage being refinanced under this section was originally made. The Secretary may share any amounts received under this paragraph with or assign the rights of any amounts due to the Secretary to the holder of the existing senior mortgage on the eligible mortgage, the holder of any existing subordinate mortgage on the eligible mortgage, or both." for "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."
Subsec. (l)(1). Pub. L. 111–22, §202(a)(2), substituted "Secretary" for "Board".
Subsec. (n). Pub. L. 111–22, §202(a)(2), (7), substituted "Secretary" for "the Board" in heading and "Secretary" for "Board" in introductory provisions and in par. (6). See Codification note above.
Subsec. (p). Pub. L. 111–22, §202(a)(8), substituted "The" for "Under the direction of the Board, the" in introductory provisions.
Subsec. (s)(2). Pub. L. 111–22, §202(a)(9)(A), substituted "Advisory Board for" for "Board of Directors of".
Subsec. (s)(3)(A)(ii). Pub. L. 111–22, §202(a)(9)(B), substituted "such" for "subsection (e)(1)(B) and such other".
Subsec. (v). Pub. L. 111–22, §202(a)(2), (10), substituted "action of the Secretary" for "action of the Board" and inserted at end "The Secretary shall conform documents, forms, and procedures for mortgages insured under this section to those in place for mortgages insured under section 1709(b) of this title to the maximum extent possible consistent with the requirements of this section."
Subsecs. (x), (y). Pub. L. 111–22, §202(a)(11), added subsecs. (x) and (y).
2008-Subsec. (e)(1)(B). Pub. L. 110–343, §124(1)(A), inserted ", or thereafter is likely to have, due to the terms of the mortgage being reset," before "a ratio".
Subsec. (e)(2)(B). Pub. L. 110–343, §124(1)(B), inserted "(or such higher percentage as the Board determines, in the discretion of the Board)" before period at end.
Subsec. (e)(4)(A). Pub. L. 110–343, §124(1)(C), inserted "and any payments made under this paragraph," after "insured loan" and inserted "Such actions may include making payments, which shall be accepted as payment in full of all indebtedness under the eligible mortgage, to any holder of an existing subordinate mortgage, in lieu of any future appreciation payments authorized under subparagraph (B)." at end.
Subsec. (w)(1)(C). Pub. L. 110–343, §124(2), inserted "and payments pursuant to subsection (e)(4)(A)" before period at end.
1 So in original. Probably should be "principal".

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