Responsible Homeowners Act of 2009 - Requires the Secretary of Housing and Urban Development (HUD), the Assistant Secretary for Housing--Federal Housing Commissioner of HUD, and the Director of the Federal Housing Finance Agency (FHFA) to give increased priority to efforts and activities to detect, identify, reduce, and report fraud in residential mortgage lending.
Amends the Internal Revenue Code to grant: (1) individual taxpayers a $5,000 tax credit through June 30, 2010, for refinancing a mortgage on a principal residence located in the United States; (2) mortgage lenders an exclusion from gross income for their share of appreciation from a principal residence subject to a mortgage modification; (3) an exclusion from gross income for income resulting from a discharge of indebtedness under a mortgage modification; (4) a tax credit for up to $15,000 of the purchase price of a principal residence purchased before July 1, 2010, on which the taxpayer makes not less than a 5% downpayment; and (5) an exclusion from gross income of gain on the sale of single-family residential rental property held by a taxpayer for two years or more and rented as a single dwelling unit on a regular basis.
Grants civil immunity and legal protections to mortgage servicers who enter into loan modifications, mortgage workouts, or other loss mitigation plans.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1903 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 1903
To provide incentives for the residential housing market.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 2, 2009
Mr. Cantor (for himself, Mr. Lee of New York, Mr. Dreier, Mrs. Biggert,
Mr. Brady of Texas, Mr. McCarthy of California, Mr. Cassidy, Mr.
Campbell, Mrs. Bono Mack, Mr. Paulsen, and Mr. Boustany) introduced the
following bill; which was referred to the Committee on Ways and Means,
and in addition to the Committees on Financial Services and the
Judiciary, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To provide incentives for the residential housing market.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Responsible
Homeowners Act of 2009''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Stopping mortgage fraud.
Sec. 3. Tax credit for mortgage refinancing.
Sec. 4. Tax incentives for voluntary mortgage modifications.
Sec. 5. Servicer safe harbor for mortgage loan modifications.
Sec. 6. Credit for certain home purchases.
Sec. 7. Certain gains on single-family residential rental property
excluded from gross income.
SEC. 2. STOPPING MORTGAGE FRAUD.
(a) Priority of Efforts.--The Secretary of Housing and Urban
Development, the Assistant Secretary for Housing--Federal Housing
Commissioner of the Department of Housing and Urban Development, and
the Director of the Federal Housing Finance Agency, shall give
increased priority to efforts and activities to detect, identify,
reduce, and report fraud in residential mortgage lending, including in
the marketing, offering, origination, underwriting, servicing, and
refinancing of residential mortgages, and in all other aspects of
residential mortgage lending. Such efforts and activities shall include
increasing the number of personnel assigned specifically to mortgage
fraud detection.
(b) Authorization of Appropriations.--For fiscal years 2009, 2010,
2011, 2012, and 2013, there are authorized to be appropriated to the
Attorney General a total of--
(1) $31,250,000 to support the employment of 30 additional
agents of the Federal Bureau of Investigation and 2 additional
dedicated prosecutors at the Department of Justice to
coordinate prosecution of mortgage fraud efforts with the
offices of the United States Attorneys; and
(2) $750,000 to support the operations of interagency task
forces of the Federal Bureau of Investigation in the areas with
the 15 highest concentrations of mortgage fraud.
SEC. 3. TAX CREDIT FOR MORTGAGE REFINANCING.
(a) Allowance of Credit.--Subpart A of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by inserting
after section 25D the following new section:
``SEC. 25E. CREDIT FOR MORTGAGE REFINANCING.
``(a) Allowance of Credit.--In the case of an individual who
completes a refinancing of a qualified residential mortgage during the
taxable year, there shall be allowed as a credit against the tax
imposed by this subtitle for such taxable year an amount equal to
$5,000.
``(b) Definitions.--For purposes of this section--
``(1) Qualified residential mortgage.--The term `qualified
residential mortgage' means indebtedness which is secured by
the taxpayer's principal residence (within the meaning of
section 121). Such term shall not include any indebtedness
which is secured by a residence which is located outside the
United States.
``(2) Refinancing.--The term `refinancing' means a
qualified residential mortgage any portion of the proceeds of
which are used to satisfy the taxpayer's entire obligation
under another qualified residential mortgage.
``(c) Coordination With Home Buyer Credits.--No credit shall be
allowed under this section for any taxable year if the taxpayer is
allowed a credit under section 25F, 36, or 1400C for such taxable year
or any prior taxable year. No credit shall be allowed under sections
25F, 36, or 1400C for any taxable year if the taxpayer is allowed a
credit under this subsection (a) for any prior taxable year.
``(d) Exception for Nonresident Alien Individuals.--No credit shall
be allowed under subsection (a) to any taxpayer if such taxpayer is a
nonresident alien individual.
``(e) Election.--A taxpayer may elect to have subsection (a) not
apply for any taxable year.
``(f) Termination.--This section shall not apply to any refinancing
completed after June 30, 2010.''.
(b) Clerical Amendment.--The table of sections for subpart A of
part IV of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 25D the following new
item:
``Sec. 25E. Credit for mortgage refinancing.''.
(c) Effective Date.--The amendments made by this section shall
apply to refinancings completed after the date of the enactment of this
Act, in taxable years ending after such date.
SEC. 4. TAX INCENTIVES FOR VOLUNTARY MORTGAGE MODIFICATIONS.
(a) Exclusion of Qualified Appreciation Payments.--
(1) In general.--Part III of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 is amended by inserting after
section 139C the following new section:
``SEC. 139D. MORTGAGE MODIFICATION INCOME.
``(a) In General.--In the case of a lender who enters into a
qualified mortgage workout with a borrower, gross income shall not
include any qualified appreciation payment made pursuant to such
workout.
``(b) Qualified Mortgage Workout.--For purposes of this section,
the term `qualified mortgage workout' means legally binding
modifications to a qualified mortgage which provide for each of the
following:
``(1) Monthly payments under the mortgage which do not
exceed 38 percent of the gross monthly income of the borrower.
``(2) Such modifications shall achieve the requirement of
paragraph (1) by means of one or more of the following:
``(A) A reduction in the interest rate of the loan.
``(B) An extension of the term of the loan (but not
greater than 40 years).
``(C) A reduction in the principal amount of the
loan.
``(3) Provides the lender with a right to a payment of a
share of any appreciation in the value of the residence which
secures the loan upon the disposition of the residence by the
borrower.
``(c) Other Definitions and Special Rule.--For purposes of this
section--
``(1) Qualified mortgage.--The term `qualified mortgage'
means indebtedness--
``(A) which is secured by a principal residence
(within the meaning of section 121) which is located in
the United States, and
``(B) which fails to meet the requirement of
subsection (b)(1).
``(2) Qualified appreciation payment.--The term `qualified
appreciation payment' means the payment described in subsection
(b)(4).
``(3) Treatment of refinancings.--A refinancing of a
qualified mortgage shall be treated in the same manner as a
modification to such mortgage.
``(d) Termination.--Subsection (a) shall not apply to any qualified
mortgage workout which becomes legally binding after June 30, 2010.''.
(2) Conforming amendment.--The table of sections for part
III of subchapter B of chapter 1 of such Code is amended by
inserting after the item relating to section 139C the following
new item:
``Sec. 139D. Mortgage modification income.''.
(b) Exclusion of Debt Cancelled Pursuant to a Qualified Mortgage
Workout.--
(1) In general.--Paragraph (1) of section 108(a) of such
Code is amended by striking ``or'' at the end of the
subparagraph (D), by striking the period at the end of
subparagraph (E) and inserting ``, or'', and by adding at the
end the following new subparagraph:
``(F) the indebtedness is a qualified mortgage (as
defined in section 139D(c)(1)) and is discharged in
connection with a qualified mortgage workout to which
section 139D(a) applies.''.
(2) Basis reduction.--Subsection (h) of section 108 of such
Code is amended--
(A) by striking ``subsection (a)(1)(E)'' in
paragraph (1) and inserting ``subparagraph (E) or (F)
of subsection (a)(1)'', and
(B) by striking ``Qualified'' in the heading of
such subsection.
(3) Coordination of exclusions.--Paragraph (2) of section
108(a) of such Code is amended--
(A) by striking ``and (E)'' in subparagraph (A) and
inserting ``(E), and (F)'', and
(B) by adding at the end the following new
subparagraph:
``(D) Mortgage workout exclusion takes precedence
unless elected otherwise.--Subparagraphs (B) and (E)
shall not apply to a discharge to which paragraph
(1)(F) applies unless the taxpayer elects to have
paragraph (1)(F) not apply.''.
(c) Effective Date.--The amendments made by this section shall
apply to qualified mortgage workouts (within the meaning of section
139D of the Internal Revenue Code of 1986, as added by this section)
which become legally binding after the date of the enactment of this
Act.
SEC. 5. SERVICER SAFE HARBOR FOR MORTGAGE LOAN MODIFICATIONS.
(a) Safe Harbor.--
(1) Loan modifications and workout plans.--Notwithstanding
any other provision of law, and notwithstanding any investment
contract between a servicer and a securitization vehicle or
investor, a servicer that acts consistent with the duty set
forth in section 129A(a) of Truth in Lending Act (15 U.S.C.
1639a) shall not be liable for entering into a loan
modification, workout, or other loss mitigation plan,
including, but not limited to, disposition, including any
modification or refinancing undertaken pursuant to standard
loan modification, sale, or disposition guidelines issued by
the Secretary of the Treasury or his designee under the
Emergency Economic Stabilization Act of 2008, with respect to
any such mortgage that meets all of the criteria set forth in
paragraph (2)(B) to--
(A) any person, based on that person's ownership of
a residential mortgage loan or any interest in a pool
of residential mortgage loans or in securities that
distribute payments out of the principal, interest and
other payments in loans on the pool;
(B) any person who is obligated pursuant to a
derivatives instrument to make payments determined in
reference to any loan or any interest referred to in
subparagraph (A); or
(C) any person that insures any loan or any
interest referred to in subparagraph (A) under any law
or regulation of the United States or any law or
regulation of any State or political subdivision of any
State.
(2) Ability to modify mortgages.--
(A) Ability.--Notwithstanding any other provision
of law, and notwithstanding any investment contract
between a servicer and a securitization vehicle or
investor, a servicer--
(i) shall not be limited in the ability to
modify mortgages, the number of mortgages that
can be modified, the frequency of loan
modifications, or the range of permissible
modifications; and
(ii) shall not be obligated to repurchase
loans from or otherwise make payments to the
securitization vehicle on account of a
modification, workout, or other loss mitigation
plan for a residential mortgage or a class of
residential mortgages that constitute a part or
all of the mortgages in the securitization
vehicle,
if any mortgage so modified meets all of the criteria
set forth in subparagraph (B).
(B) Criteria.--The criteria under this subparagraph
with respect to a mortgage are as follows:
(i) Default on the payment of such mortgage
has occurred or is reasonably foreseeable.
(ii) The property securing such mortgage is
occupied by the mortgagor of such mortgage.
(iii) The servicer reasonably and in good
faith believes that the anticipated recovery on
the principal outstanding obligation of the
mortgage under the particular modification or
workout plan or other loss mitigation action
will exceed, on a net present value basis, the
anticipated recovery on the principal
outstanding obligation of the mortgage to be
realized through foreclosure.
(3) Applicability.--This subsection shall apply only with
respect to modifications, workouts, and other loss mitigation
plans initiated before January 1, 2012.
(b) Reporting.--Each servicer that engages in loan modifications or
workout plans subject to the safe harbor in subsection (a) shall report
to the Secretary on a regular basis regarding the extent, scope and
results of the servicer's modification activities. The Secretary shall
prescribe regulations specifying the form, content, and timing of such
reports.
(c) Legal Costs.--If an unsuccessful action is brought against a
servicer by any person described in subparagraph (A), (B), or (C) of
subsection (a)(1), such person shall bear any actual legal costs of the
servicer, including reasonable attorney fees and expert witness fees,
incurred in good faith in such action, as determined by the court.
(d) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(2) Securitization vehicle.--The term ``securitization
vehicle'' means a trust, corporation, partnership, limited
liability entity, special purpose entity, or other structure
that--
(A) is the issuer, or is created by the issuer, of
mortgage pass-through certificates, participation
certificates, mortgage-backed securities, or other
similar securities backed by a pool of assets that
includes residential mortgage loans; and
(B) holds such mortgages.
SEC. 6. CREDIT FOR CERTAIN HOME PURCHASES.
(a) Allowance of Credit.--Subpart A of part IV of subchapter A of
chapter 1 of the Internal Revenue Code of 1986, as amended by this Act,
is amended by inserting after section 25E the following new section:
``SEC. 25F. CREDIT FOR CERTAIN HOME PURCHASES.
``(a) Allowance of Credit.--In the case of an individual who makes
an eligible purchase during the taxable year, there shall be allowed as
a credit against the tax imposed by this subtitle for such taxable year
an amount equal to so much of the purchase price of the residence as
does not exceed $15,000.
``(b) Downpayment Requirement.--No credit shall be allowed under
subsection (a) to any taxpayer with respect to the purchase of any
residence unless such taxpayer makes a downpayment of not less 5
percent of the purchase price of such residence.
``(c) Definitions.--For purposes of this section--
``(1) Eligible purchase.--The term `eligible purchase'
means the purchase of a residence for the taxpayer if--
``(A) such residence is located in the United
States,
``(B) the construction of such residence began
before 2009, and
``(C) such purchase is made by the taxpayer before
July 1, 2010.
``(2) Other definitions.--The terms `purchase' and
`purchase price' have the respective meanings given such terms
by section 26(c).
``(d) Exceptions.--No credit shall be allowed under subsection (a)
to any taxpayer for any taxable year with respect to the purchase of a
residence if--
``(1) credit under section 36 (relating to first-time
homebuyer credit) or 1400C (relating to first-time homebuyer in
the District of Columbia) is allowed to the taxpayer (or the
taxpayer's spouse) for such taxable year or any prior taxable
year,
``(2) the residence is financed by the proceeds of a
qualified mortgage issue the interest on which is exempt from
tax under section 103,
``(3) the taxpayer is a nonresident alien individual, or
``(4) the taxpayer disposes of such residence (or such
residence ceases to be a residence of the taxpayer (or, if
married, the taxpayer's spouse)) before the close of such
taxable year.
``(e) Limitation Based on Amount of Tax.--In the case of a taxable
year to which section 26(a)(2) does not apply, the credit allowed under
subsection (a) for any taxable year shall not exceed the excess of--
``(1) the sum of the regular tax liability (as defined in
section 26(b)) plus the tax imposed by section 55, over
``(2) the sum of the credits allowable under this subpart
(other than this section and section 25D) for the taxable year.
``(f) Carryforwards of Unused Credit.--
``(1) Rule for years in which all personal credits allowed
against regular and alternative minimum tax.--In the case of a
taxable year to which section 26(a)(2) applies, if the credit
allowable under subsection (a) for any taxable year exceeds the
limitation imposed by section 26(a)(2) for such taxable year
reduced by the sum of the credits allowable under this subpart
(other than this section and sections 25D and 1400C), such
excess shall be carried to the succeeding taxable year and
added to the credit allowable under subsection (a) for such
taxable year.
``(2) Rule for other years.--In the case of a taxable year
to which section 26(a)(2) does not apply, if the credit
allowable under subsection (a) for any taxable year exceeds the
limitation imposed by subsection (e) for such taxable year,
such excess shall be carried to the succeeding taxable year and
added to the credit allowable under subsection (a) for such
taxable year.
``(3) Limitation.--No credit may be carried forward under
this subsection to any taxable year following the third taxable
year after the taxable year in which the credit arose. For
purposes of the preceding sentence, credits shall be treated as
used on a first-in first-out basis.
``(g) Other Rules To Apply.--
``(1) Related persons.--Rules similar to the rules of
section 26(c)(5) shall apply for purposes of this section.
``(2) Married individuals filing separate returns, etc.--
Rules similar to the rules of subparagraphs (B) and (C) of
section 26(b)(1) shall apply for purposes of this section.
``(3) Reporting.--Rules similar to the rules of section
26(e) shall apply for purposes of this section.
``(h) Recapture of Credit.--Rules similar to the rules of section
26(f) shall apply for purposes of this section, except that--
``(1) paragraph (1) thereof shall be applied by
substituting `33\1/3\ percent' for `6\2/3\ percent', and
``(2) paragraph (7) thereof shall be applied by
substituting `3 years' for `15 years'.''.
(b) Conforming Amendments.--
(1)(A) Section 23(b)(4)(B) of such Code is amended by
striking ``section 25D'' inserting ``sections 25D and 25F''.
(B) Section 24(b)(3)(B) of such Code is amended by
inserting ``25F,'' after ``25D,''.
(C) Section 25(e)(1)(C)(ii) of such Code is amended by
inserting ``25F,'' after ``25D,''.
(D) Section 25B(g)(2) of such Code is amended by inserting
``25F,'' after ``25D,''.
(E) Section 26(a)(1) of such Code is amended by inserting
``25F,'' after ``25D,''.
(F) Section 30(c)(2)(B)(ii) of such Code is amended by
inserting ``25F,'' after ``25D,''.
(G) Section 30B(g)(2)(B)(ii) of such Code is amended by
inserting ``25F,'' after ``25D,''.
(H) Section 30D(c)(2)(B)(ii) of such Code is amended by
striking ``and 25D'' and inserting ``, 25D, and 25F''.
(I) Section 904(i) of such Code is amended by inserting
``25F,'' after ``25B,''.
(2) Paragraph (1) of section 23(c) of such Code is amended
by inserting ``, 25F,'' after ``25D,''.
(3) The table of sections for subpart A of part IV of
subchapter A of chapter 1 of such Code, as amended by this Act,
is amended by inserting after the item relating to section 25E
the following new item:
``Sec. 25F. Credit for certain home purchases.''.
(c) Effective Date.--The amendments made by this section shall
apply to residences purchased after the date of the enactment of this
Act, in taxable years ending after such date.
SEC. 7. CERTAIN GAINS ON SINGLE-FAMILY RESIDENTIAL RENTAL PROPERTY
EXCLUDED FROM GROSS INCOME.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986, as amended by this Act, is amended by
inserting after section 139D the following new section:
``SEC. 139E. CERTAIN GAINS ON SINGLE-FAMILY RESIDENTIAL RENTAL
PROPERTY.
``(a) In General.--Gross income shall not include any gain from the
sale or exchange of a qualified single-family residential rental
property.
``(b) Limitation.--The amount of gain excluded from gross income
under subsection (a) with respect to any sale or exchange shall not
exceed $250,000.
``(c) Qualified Single-Family Residential Rental Property.--For
purposes of this section--
``(1) In general.--The term `qualified property' means any
real property located in the United States which--
``(A) was acquired by the taxpayer by purchase (as
defined in section 179(d)(2)) during the period
beginning on the date of the enactment of this section
and ending on June 30, 2010,
``(B) was held by the taxpayer for 2 years or more,
and
``(C) was rented as a single dwelling unit on a
regular basis during 2 of the taxable years in the 5
taxable year period ending with the taxable year in
which the property was sold or exchanged.
``(2) Regular basis.--For purposes of paragraph (1)(C),
property shall not be treated as rented on a regular basis
during any taxable year unless--
``(A) such property is rented on the basis of
months or longer periods, and
``(B) such property is rented for not less than 6
months of such year.
``(d) Exception for Nonresident Alien Individuals.--No credit shall
be allowed under subsection (a) to any taxpayer if such taxpayer is a
nonresident alien individual.''.
(b) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 of such Code, as amended by this Act, is
amended by inserting after the item relating to section 139D the
following new item:
``Sec. 139E. Certain gains on single-family residential rental
property.''.
(c) Effective Date.--The amendments made by this section shall
apply to property acquired after the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to House Ways and Means
Referred to the Committee on Ways and Means, and in addition to the Committees on Financial Services, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to House Financial Services
Referred to House Judiciary
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