Detailed Instructions: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Problem:SECTION 1. SHORT TITLE.

This Act may be cited as the ''Honest FHA Originator Act of 2009''.

SEC. 2. REQUIREMENTS FOR FHA-APPROVED MORTGAGEES.

(a) Mortgagee Review Board.--Paragraph (2) of section 202(c) of the
National Housing Act (12 U.S.C. 1708(c)) is amended--
(1) in subparagraph (E), by inserting ''and'' after the
semicolon;
(2) in subparagraph (F), by striking ''; and'' and
inserting a period; and
(3) by striking subparagraph (G).
(b) Limitations on Participation and Mortgagee Approval and Use of
Name.--Section 202 of the National Housing Act (12 U.S.C. 1708) is
amended--
(1) by redesignating subsections (d), (e), and (f) as
subsections (e), (f), and (g), respectively;
(2) by inserting after subsection (c) the following new
subsection:
''(d) Limitations on Participation in Origination and Mortgagee
Approval.--
''(1) Requirement.--Any person or entity that is not
approved by the Secretary to serve as a mortgagee, as such term
is defined in subsection (c)(7), shall not participate in the
origination of an FHA-insured loan except as authorized by the
Secretary.
''(2) Eligibility for approval.--In order to be eligible
for approval by the Secretary, an applicant mortgagee shall not
be, and shall not have any officer, partner, director,
principal, or employee of the applicant mortgagee who is--
''(A) currently suspended, debarred, under a
limited denial of participation (LDP), or otherwise
restricted under part 24 or 25 of title 24 of the Code
of Federal Regulations, or any successor regulations to
such parts, or under similar provisions of any other
Federal agency;
''(B) under indictment for, or has been convicted
of, an offense that reflects adversely upon the
applicant's integrity, competence or fitness to meet
the responsibilities of an approved mortgagee;
''(C) subject to unresolved findings contained in a
Department of Housing and Urban Development or other
governmental audit, investigation, or review;
''(D) engaged in business practices that do not
conform to generally accepted practices of prudent
mortgagees or that demonstrate irresponsibility;
''(E) convicted of, or who has pled guilty or nolo
contendre to, a felony related to participation in the
real estate or mortgage loan industry--
''(i) during the 7-year period preceding
the date of the application for licensing and
registration; or
''(ii) 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;
''(F) in violation of provisions of the S.A.F.E.
Mortgage Licensing Act of 2008 (12 U.S.C. 5101 et seq.)
or any applicable provision of State law; or
''(G) in violation of any other requirement as
established by the Secretary.''; and
(3) by adding at the end the following new subsection:
''(h) Use of Name.--The Secretary shall, by regulation, require
each mortgagee approved by the Secretary for participation in the FHA
mortgage insurance programs of the Secretary--
''(1) to use the business name of the mortgagee that is
registered with the Secretary in connection with such approval
in all advertisements and promotional materials, as such terms
are defined by the Secretary, relating to the business of such
mortgagee in such mortgage insurance programs; and
''(2) to maintain copies of all such advertisements and
promotional materials, in such form and for such period as the
Secretary requires.''.
(c) Change of Status.--The National Housing Act is amended by
striking section 532 (12 U.S.C. 1735f-10) and inserting the following
new section:

''SEC. 532. CHANGE OF MORTGAGEE STATUS.

''(a) Notification.--Upon the occurrence of any action described in
subsection (b), an approved mortgagee shall immediately submit to the
Secretary, in writing, notification of such occurrence.
''(b) Actions.--The actions described in this subsection are as
follows:
''(1) The debarment, suspension of a Limited Denial of
Participation (LDP), or application of other sanctions, fines,
or penalties applied to the mortgagee or to any officer,
partner, director, principal, manager, supervisor, loan
processor, loan underwriter, or loan originator of the
mortgagee pursuant to applicable provisions of State or Federal
law.
''(2) The revocation of a State-issued mortgage loan
originator license issued pursuant to the S.A.F.E. Mortgage
Licensing Act of 2008 (12 U.S.C. 5101 et seq.) or any other
similar declaration of ineligibility pursuant to State law.''.
(d) Civil Money Penalties.--Section 536 of the National Housing Act
(12 U.S.C. 1735f-14) is amended--
(1) in subsection (b)--
(A) in paragraph (1)--
(i) in the matter preceding subparagraph
(A), by inserting ''or any of its owners,
officers, or directors'' after ''mortgagee or
lender'';
(ii) in subparagraph (H), by striking
''title I'' and all that follows through ''Act
of 1989)'' and inserting ''title I or II''; and
(iii) by inserting after subparagraph (J)
the following:
''(K) Violation of section 202(d) of this Act (12
U.S.C. 1708(d)).''; and
(B) in paragraph (2)--
(i) in subparagraph (B), by striking ''or''
at the end;
(ii) in subparagraph (C), by striking the
period at the end and inserting ''; or''; and
(iii) by adding at the end the following
new subparagraph:
''(D) causing or participating in any of the
violations set forth in paragraph (1) of this
subsection.''; and
(2) in subsection (g), by striking ''The term'' and all
that follows through the end of the sentence and inserting
''For purposes of this section, a person acts knowingly when a
person has actual knowledge of acts or should have known of the
acts.''.
(e) Expanded Review of FHA Mortgagee Applicants and Newly Approved
Mortgagees.--Not later than the expiration of the 3-month period
beginning upon the date of the enactment of this Act, the Secretary of
Housing and Urban Development shall--
(1) expand the existing process for reviewing new
applicants for approval for participation in the mortgage
insurance programs of the Secretary for mortgages on 1- to 4-
family residences for the purpose of identifying applicants who
represent a high risk to the Mutual Mortgage Insurance Fund;
and
(2) implement procedures that, for mortgagees approved
during the 12-month period ending upon such date of enactment--
(A) expand the number of mortgages originated by
such mortgagees that are reviewed for compliance with
applicable laws, regulations, and policies; and
(B) include a process for random reviews of such
mortgagees and a process for reviews that is based on
volume of mortgages originated by such mortgagees.
Solution:
Honest FHA Originator Act of 2009 - Amends the National Housing Act to remove the Director of the Enforcement Center from the Mortgagee Review Board of the Federal Housing Administration (FHA) of the Department of Housing and Urban Development (HUD).

Declares that any person or entity that is not approved by the HUD Secretary is prohibited from serving as a mortgagee and from participating in the origination of an FHA-insured loan.

Sets forth mortgagee eligibility criteria.

Directs the Secretary to require each mortgagee approved for participation in the FHA mortgage insurance programs to: (1) use the business name of the mortgagee that is registered with the Secretary in all advertisements and promotional materials relating to the business of such mortgagee in the mortgage insurance programs; and (2) maintain copies of such advertisements and promotional materials.

Requires an approved mortgagee to submit immediate written notification of the following actions: (1) the debarment, suspension of a Limited Denial of Participation (LDP), or application of other sanctions, fines, or penalties applied to the mortgagee or to any officer, partner, director, principal, manager, supervisor, loan processor, loan underwriter, or loan originator of the mortgagee pursuant to applicable state or federal law; or (2) the revocation of a state-issued mortgage loan originator license or any other similar declaration of ineligibility pursuant to state law.

Instructs the Secretary to expand the review of FHA mortgagee applicants and newly approved mortgagees.