Protecting America's Homeowners Act of 2008 - Amends the Internal Revenue Code to extend through January 1, 2011, the temporary exclusion from gross income of the discharge of an indebtedness for a qualified principal residence.
Declares invalid, throughout a specified moratorium period, the terms of any home mortgage loan that requires a consumer to pay a prepayment penalty for paying all or part of the outstanding principal before its contractual due date.
Directs the Neighborhood Reinvestment Corporation (NRC) to continue to award to counseling intermediaries and State Housing Finance Agencies certain funds previously designated for mortgage foreclosure mitigation activities in states and areas with high rates of mortgage foreclosures or defaults.
Appropriates additional funds for FY2008 for: (1) NRC foreclosure mitigation activities; and (2) state and local governmental redevelopment of abandoned and foreclosed homes.
Sets forth across-the-board 0.25 percent rescissions in non-defense, non-homeland-security discretionary spending for FY2009.
Amends the Truth In Lending Act to require additional creditor disclosures concerning mortgage loans.
Requires the annual percentage rate (APR) applicable to credit secured by an interest in real property to include settlement costs.
Amends the Federal National Mortgage Association Charter Act and the Federal Home Loan Mortgage Association Charter Act to provide that securities issued by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Association (Freddie Mac) are not exempt from registration requirements under the Securities Act of 1933 (thus requiring registration of such securities).
Sets a limit upon aggregate annual registration fees paid by specified entities that do not include a registered investment company.
Establishes in the Securities and Exchange Commission (SEC) a Financial Counseling and Foreclosure Prevention Fund to provide assistance to the NRC to make grants to certain federally approved counseling intermediaries for mortgage foreclosure mitigation assistance to states and areas with high rates of defaults and foreclosures.
[Congressional Bills 110th Congress]
[From the U.S. Government Printing Office]
[S. 2791 Introduced in Senate (IS)]
110th CONGRESS
2d Session
S. 2791
To address the foreclosure crisis and to revitalize neighborhoods, and
for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 1 (legislative day, March 13), 2008
Mr. Voinovich introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To address the foreclosure crisis and to revitalize neighborhoods, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protecting America's Homeowners Act
of 2008''.
SEC. 2. DISCHARGE OF INDEBTEDNESS ON PRINCIPAL RESIDENCE EXCLUDED FROM
GROSS INCOME EXTENSION.
Subparagraph (E) of section 108(a)(1) of the Internal Revenue Code
of 1986 is amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
SEC. 3. TEMPORARY MORATORIUM OF PREPAYMENT PENALTIES FOR ALL MORTGAGE
PRODUCTS.
(a) In General.--Notwithstanding any other provision of law,
beginning on the date of enactment of this Act and ending on December
31, 2009, the terms of any home mortgage loan that require that a
consumer must pay a prepayment penalty for paying all or part of the
outstanding principal on such loan before the date on which the
principal is due under the terms of the loan agreement shall not be
valid.
(b) Definitions.--In this section, the following definitions shall
apply:
(1) Consumer; credit.--The terms ``consumer'' and
``credit'' have the same meaning as in section 103 of the Truth
in Lending Act (15 U.S.C. 1602).
(2) Home mortgage loan.--The term ``home mortgage loan''
means any consumer credit transaction in which a security
interest, including any such interest arising by operation of
law, is or will be retained or acquired in any real property
located within the United States which is or, upon the
completion of the transaction, will be used as the principle
residence of the consumer.
SEC. 4. ASSISTANCE FOR MORTGAGE FORECLOSURE COUNSELING.
(a) Expeditious Distribution of Funds Already Provided.--Upon
certification by the Neighborhood Reinvestment Corporation under
paragraph (4) under the second undesignated paragraph (beginning with
the phrase ``For an additional amount'') under the heading
``Neighborhood Reinvestment Corporation--Payment to the Neighborhood
Reinvestment Corporation'' of Public Law 110-161 that Housing and Urban
Development or Neighborhood Reinvestment Corporation-approved
counseling intermediaries and State Housing Finance Agencies have the
need for additional portions of the $180,000,000 provided therein for
mortgage foreclosure mitigation activities in States and areas with
high rates of mortgage foreclosures, defaults, or related activities
beyond the initial awards, and the expertise to use such funds
effectively, the Neighborhood Reinvestment Corporation shall
expeditiously continue to award such funds as need and expertise is
shown.
(b) Additional Funding.--There are appropriated out of any money in
the Treasury not otherwise appropriated for the fiscal year 2008, for
an additional amount for the ``Neighborhood Reinvestment Corporation--
Payment to the Neighborhood Reinvestment Corporation'' $200,000,000, to
remain available until expended, for foreclosure mitigation activities
under the terms and conditions contained in the second undesignated
paragraph (beginning with the phrase ``For an additional amount'')
under the heading ``Neighborhood Reinvestment Corporation--Payment to
the Neighborhood Reinvestment Corporation'' of Public Law 110-161.
SEC. 5. ASSISTANCE FOR THE REDEVELOPMENT OF ABANDONED AND FORECLOSED
HOMES.
(a) Direct Appropriations.--There are appropriated out of any money
in the Treasury not otherwise appropriated for the fiscal year 2008,
$1,000,000,000, to remain available until expended, for assistance to
States and units of general local government (as such terms are defined
in section 102 of the Housing and Community Development Act of 1974 (42
U.S.C. 5302)) for the redevelopment of abandoned and foreclosed homes.
(b) Allocation of Appropriated Amounts.--
(1) In general.--The amounts appropriated or otherwise made
available to States and units of general local government under
this section shall be allocated based on a funding formula
established by the Secretary of Housing and Urban Development.
(2) Formula to be devised swiftly.--The funding formula
required under paragraph (1) shall be established not later
than 60 days after the date of enactment of this Act.
(3) Criteria.--The funding formula required under paragraph
(1) shall ensure that any amounts appropriated or otherwise
made available under this section are allocated to States and
units of general local government with the greatest need, as
such need is determined in the discretion of the Secretary of
Housing and Urban Development based on the following factors:
(A) The number and percentage of home foreclosures
in each State or unit of general local government.
(B) The number and percentage of abandoned homes in
each State or unit of general local government.
(4) Distribution.--Amounts appropriated or otherwise made
available to States and units of general local government under
this section shall be distributed according to the funding
formula required under paragraph (1) not later than 30 days
after the establishment of such formula.
(c) Use of Funds.--
(1) In general.--Any State or unit of general local
government that receives amounts pursuant to this section
shall, not later than 18 months after the receipt of such
amounts, use such amounts to redevelop abandoned and foreclosed
homes.
(2) Priority.--Any State or unit of general local
government that receives amounts pursuant to this section shall
in distributing such amounts give priority emphasis and
consideration to those metropolitan areas, metropolitan cities,
urban areas, rural areas, low- and moderate-income areas, and
other areas with the greatest need, including those with the
greatest percentage of abandoned and foreclosed homes.
(3) Eligible uses.--
(A) In general.--Amounts made available under this
section may be used to--
(i) make grants, loans, and other financing
mechanisms to community development financial
institutions (as such term is defined under
section 103(5) of the Community Development
Banking and Financial Institutions Act of 1994
(12 U.S.C. 4702(5))), national intermediaries,
and nonprofit housing or community development
organizations and others to purchase and
rehabilitate homes that have been abandoned or
foreclosed upon, in order to sell, rent, or
redevelop such homes;
(ii) establish financing mechanisms for
redevelopment of foreclosed upon homes,
including such mechanisms as soft-seconds, loan
loss reserves, and shared-equity loans for low-
and moderate-income homebuyers;
(iii) purchase and rehabilitate homes that
have been abandoned or foreclosed upon, in
order to sell, rent, or redevelop such homes;
(iv) establish land banks for homes that
have been foreclosed upon; and
(v) demolish blighted structures.
(B) Limitation.--Any funds used under this section
for the purchase of an abandoned or foreclosed upon
home shall be at a discount from cost equal to or less
than the current market appraised value of the home,
taking into account its current condition, and such
discount appraisal shall ensure that purchasers are
paying below-market value for the homes as part of a
broader neighborhood stabilization strategy.
(d) Rule of Construction.--Amounts appropriated or otherwise made
available to States and units of general local government under this
section shall be treated as though such funds were community
development block grant funds under title I of the Housing and
Community Development Act of 1974.
(e) Waiver Authority.--In administering any amounts appropriated or
otherwise made available under this section, the Secretary of Housing
and Urban Development may waive, or specify alternative requirements
for, any provision of any statute or regulation that the Secretary
administers in connection with the obligation by the Secretary or the
use by the recipient of such funds (except for requirements related to
fair housing, nondiscrimination, labor standards, and the environment),
in order to expedite or facilitate the use of such funds.
(f) Periodic Audits.--In consultation with the Secretary of Housing
and Urban Development, the Comptroller General of the United States
shall conduct periodic audits to ensure that funds appropriated, made
available, or otherwise distributed under this title are being used in
a manner consistent with the criteria provided in this title.
(g) Across-the-Board Rescissions in Non-Defense, Non-Homeland-
Security Discretionary Spending for Fiscal Year 2009.--
(1) Across-the-board rescissions.--There is hereby
rescinded an amount equal to 0.25 percent of--
(A) the budget authority provided (or obligation
limitation imposed) for fiscal year 2009 for any non-
defense, non-homeland-security discretionary account in
any fiscal year 2009 appropriation Act;
(B) the budget authority provided in any advance
appropriation for fiscal year 2009 for any non-defense,
non-homeland-security discretionary account in any
prior fiscal year appropriation Act; and
(C) the contract authority provided in fiscal year
2009 for any program that is subject to a limitation
contained in any fiscal year 2009 appropriation Act for
any non-defense, non-homeland-security discretionary
account.
(2) Non-defense, non-homeland-security discretionary
account.--For purposes of paragraph (1), the term ``non-
defense, non-homeland security discretionary account'' means
any discretionary account, other than--
(A) any account included in a Department of Defense
Appropriations Act;
(B) any account included in a Department of
Homeland Security Appropriations Act;
(C) any account of the Department of Defense
included in a Military Quality of Life and Veterans
Affairs Appropriations Act; or
(D) any account for Department of Energy defense
activities included in an Energy and Water Development
Appropriations Act.
(3) Proportionate application.--Any rescission made by
paragraph (1) shall be applied proportionately--
(A) to each discretionary account and each item of
budget authority described in such paragraph; and
(B) within each such account and item, to each
program, project, and activity (with programs,
projects, and activities as delineated in the
appropriation Act or accompanying reports for the
relevant fiscal year covering such account or item, or
for accounts and items not included in appropriation
Acts, as delineated in the most recently submitted
President's budget).
(4) Subsequent appropriation laws.--In the case of any
fiscal year 2009 appropriation Act enacted after the enactment
of this subsection, any rescission required by paragraph (1)
shall take effect immediately after the enactment of such Act.
SEC. 6. ENHANCED MORTGAGE LOAN DISCLOSURES.
(a) In General.--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. ENHANCED MORTGAGE LOAN DISCLOSURES.
``(a) Definitions.--As used in this section, the term `home
mortgage loan' means any consumer credit transaction in which a
security interest is or will be retained or acquired in any real
property located in the United States which is or, upon completion of
the transaction, will be used as the principle residence of the
consumer.
``(b) Disclosures for Mortgage Loans.--
``(1) In general.--Subject to the rules of the Board, with
respect to a home mortgage loan, the creditor shall disclose to
the consumer, in addition to any other disclosures required
under this title, a good faith estimate of--
``(A) the amount of the loan;
``(B) the term of the loan;
``(C) the annual percentage rate of interest for
the loan if such rate is fixed;
``(D) the annual percentage rate of interest for
the loan if such rate is variable, provided that for
such a variable rate the creditor also discloses--
``(i) the initial interest rate;
``(ii) the duration of the initial interest
rate;
``(iii) the date on which the interest rate
will be adjusted or reset;
``(iv) the fully indexed rate (expressed as
an estimate of the interest rate after it is
adjusted or reset); and
``(v) an estimate of the maximum possible
applicable annual percentage rate of interest,
including language expressing that if there is
no maximum rate, the applicable State usury
rate shall be disclosed;
``(E) any prepayment fees or penalties that may be
imposed with respect to the loan, including--
``(i) the amount of such fee or penalty;
and
``(ii) a brief description, in plain
English, of the circumstances or events which
would trigger the imposition of the prepayment
fee or penalty;
``(F) any balloon payment that may be required with
respect to the loan, including--
``(i) the date on which the balloon payment
is due, and the estimated amount of the balloon
payment; and
``(ii) a brief statement, in plain English,
that a balloon payment mortgage does not fully
pay off the loan, that a large balloon payment
of the remaining principal will be required at
the end of the loan term, and that many
borrowers must secure another loan to make the
balloon payment;
``(G) whether or not the creditor automatically
provides for the escrow of taxes and insurance; and
``(H) the total settlement costs, including if the
consumer shall be required to maintain private mortgage
insurance or take out a subordinate lien mortgage or
deed of trust (also referred to as a `piggyback loan')
on the real property securing the loan to cover the
cost of acquiring the property.
``(2) Range for estimate.--The disclosure required under
paragraph (1)(H) of the good faith estimate of the total
settlement costs of a home mortgage loan shall indicate whether
such estimated costs are or are not guaranteed to come within
10 percent of the actual final settlement costs related to the
loan, subject to approval of such terms by the consumer and the
appraisal of the real property securing the loan.
``(c) Timing of Disclosures.--The disclosures required by this
section shall be provided to the consumer at the time of approval of
the home mortgage loan, but in no case later than 7 days before the
date on which the home mortgage loan is consummated.
``(d) Format.--The disclosures required by this section shall be
presented to the consumer--
``(1) in plain English;
``(2) to the extent possible, as a 1-page, single document;
and
``(3) when provided in conjunction with or at the same time
as other required written disclosures, as the first of such
documents.
``(e) Tolerances for Accuracy.--The provisions of section 106(f),
relating to tolerances for accuracy, and any rules of the Board issued
under that subsection, shall apply to disclosures required under this
section.''.
(b) Amendment to Real Estate Settlement Procedures.--Section 4 of
the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2603) is
amended by adding at the end the following:
``(c) Truth in Lending Act Disclosures.--The form required under
section 129A of the Truth in Lending Act shall be provided to the
borrower at the time of settlement by the person conducting the
settlement, in addition to any other disclosures required by this Act.
In no case may a federally related mortgage loan be consummated if such
form has not been provided to the borrower, both at the time of the
approval of the loan, in accordance with that section 129A, and at
settlement.''.
SEC. 7. CALCULATION OF FINANCE CHARGE AND APR.
(a) Calculation of Finance Charge.--Section 106 of the Truth in
Lending Act (15 U.S.C. 1605) is amended--
(1) in subsection (a), by adding at the end of the last
sentence the following:
``(F) Settlement costs.'';
(2) by striking subsection (e); and
(3) by redesignating subsection (f) as subsection (e).
(b) Calculation of APR.--Section 107 of the Truth in Lending Act
(15 U.S.C. 1606) is amending by adding at the end the following:
``(f) Extensions of Credit Secured by an Interest in Real
Property.--In the case of any extension of credit secured by an
interest in real property, the annual percentage rate applicable to
such extension of credit shall include any settlement costs applicable
in the determination of the finance charge in connection with such
extension of credit.''.
SEC. 8. REGISTRATION OF GSES UNDER SECURITIES LAWS.
(a) Fannie Mae.--
(1) Mortgage-backed securities.--Section 304(d) of the
Federal National Mortgage Association Charter Act (12 U.S.C.
1719(d)) is amended by striking the fourth sentence and
inserting the following: ``Securities issued by the corporation
under this subsection shall not be exempt securities for
purposes of the Securities Act of 1933.''.
(2) Subordinate obligations.--Section 304(e) of the Federal
National Mortgage Association Charter Act (12 U.S.C. 1719(e))
is amended by striking the fourth sentence and inserting the
following: ``Obligations issued by the corporation under this
subsection shall not be exempt securities for purposes of the
Securities Act of 1933.''.
(3) Securities.--Section 311 of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1723c) is amended--
(A) in the section heading, by striking
``association'';
(B) by inserting ``(a) In General.--'' after ``sec.
311.'';
(C) in the second sentence, by inserting ``by the
Association'' after ``issued''; and
(D) by adding at the end the following:
``(b) Treatment of Corporation Securities.--
``(1) In general.--Any stock, obligations, securities,
participations, or other instruments issued or guaranteed by
the corporation pursuant to this title shall not be exempt
securities for purposes of the Securities Act of 1933.
``(2) Exemption for approved sellers.--Notwithstanding any
other provision of this title or the Securities Act of 1933,
transactions involving the initial disposition by an approved
seller of pooled certificates that are acquired by that seller
from the corporation upon the initial issuance of the pooled
certificates shall be deemed to be transactions by a person
other than an issuer, underwriter, or dealer for purposes of
the Securities Act of 1933.
``(3) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Approved seller.--The term `approved seller'
means an institution approved by the corporation to
sell mortgage loans to the corporation in exchange for
pooled certificates.
``(B) Pooled certificates.--The term `pooled
certificates' means single class mortgage-backed
securities guaranteed by the corporation that have been
issued by the corporation directly to the approved
seller in exchange for the mortgage loans underlying
such mortgage-backed securities.
``(4) Mortgage related securities.--A single class
mortgage-backed security guaranteed by the corporation that has
been issued by the corporation directly to the approved seller
in exchange for the mortgage loans underlying such mortgage-
backed securities or directly by the corporation for cash shall
be deemed to be a mortgage related security, as defined in
section 3(a) of the Securities Exchange Act of 1934.''.
(b) Freddie Mac.--Section 306(g) of the Federal Home Loan Mortgage
Corporation Act (12 U.S.C. 1455(g)) is amended to read as follows:
``(g) Treatment of Securities.--
``(1) In general.--Any securities issued or guaranteed by
the Corporation shall not be exempt securities for purposes of
the Securities Act of 1933.
``(2) Exemption for approved sellers.--Notwithstanding any
other provision of this title or the Securities Act of 1933,
transactions involving the initial disposition by an approved
seller of pooled certificates that are acquired by that seller
from the Corporation upon the initial issuance of the pooled
certificates shall be deemed to be transactions by a person
other than an issuer, underwriter, or dealer for purposes of
the Securities Act of 1933.
``(3) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Approved seller.--The term `approved seller'
means an institution approved by the Corporation to
sell mortgage loans to the Corporation in exchange for
pooled certificates.
``(B) Pooled certificates.--The term `pooled
certificates' means single class mortgage-backed
securities guaranteed by the Corporation that have been
issued by the Corporation directly to the approved
seller in exchange for the mortgage loans underlying
such mortgage-backed securities.''.
(c) Limitation on Fees.--Section 6(b)(2) of the Securities Act of
1933 (15 U.S.C. 77f(b)(2)) is amended by adding at the end the
following: ``Notwithstanding any other provision of this title, no
applicant, or group of affiliated applicants that does not include any
investment company registered under the Investment Company Act of 1940,
filing a registration statement subject to a fee shall be required in
any fiscal year with respect to all registration statements filed by
such applicant in such fiscal year to pay an aggregate amount in fees
to the Commission pursuant to this subsection in an amount that exceeds
5 percent of the target offsetting collection amount for such fiscal
year. Fees paid in connection with registration statements relating to
business combinations shall not be included in calculating the total
fees paid by any such applicant.''.
(d) No Effect on Other Law.--Nothing in this section or the
amendments made by this section shall be construed to affect any
exemption from the provisions of the Trust Indenture Act of 1939
provided to the Federal National Mortgage Association or the Federal
Home Loan Mortgage Corporation.
(e) Regulations.--The Securities and Exchange Commission may issue
such regulations as may be necessary or appropriate to carry out this
section and the amendments made by this section.
(f) Establishment of Financial Counseling and Foreclosure
Prevention Fund.--
(1) Establishment.--There is established in the Securities
and Exchange Commission a Financial Counseling and Foreclosure
Prevention Fund (in this subsection referred to as the
``Fund''), which shall be used by the Commission to provide
assistance to the Neighborhood Reinvestment Corporation to make
grants to counseling intermediaries approved by the Department
of Housing and Urban Development or the Neighborhood
Reinvestment Corporation to provide mortgage foreclosure
mitigation assistance primarily to States and areas with high
rates of defaults and foreclosures, as authorized by the
Neighborhood Reinvestment Corporation Act (42 U.S.C. 8101-
8107).
(2) Deposits.--The Fund established under subsection (a)
shall consist of any registration fees paid by the Federal
National Mortgage Association or the Federal Home Loan Mortgage
Corporation to the Securities and Exchange Commission pursuant
to section 6 of the Securities Act of 1933 (15 U.S.C. 77f).
(3) Management of fund.--The Fund shall be administered and
managed by the Securities and Exchange Commission, which shall
establish reasonable and prudent criteria for the management
and operation of any amounts in the Fund.
<all>
Introduced in Senate
Read twice and referred to the Committee on Finance.
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