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Code · BILL · 113th Congress · H.R. 2767 (Introduced in House) — To protect American taxpayers and homeowners by creating a sustainable housing finance system for the 21st century. · Sec. 233

Sec. 233. Risk-sharing

723 words·~3 min read·/bill/113/hr/2767/ih/section-233

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Not later than the expiration of the 2-year period beginning on the date of the enactment of this Act, the FHA shall develop and implement a model and standards for entering into risk-sharing agreements with respect to mortgages insured by the FHA, under which the FHA shall insure a portion of the amount of the mortgage and persons or entities determined under the guidelines established pursuant to subsection
(b)to be qualified to participate in such an agreement shall insure the remainder (or another) portion of the amount of the eligible mortgage. The model and standards established under this section shall include guidelines for the qualification of persons or entities to participate in risk-sharing and other credit enhancement activities with the FHA. In establishing such guidelines, the FHA shall review the guidelines established by the Director for qualification of persons or entities to participate in risk-sharing and other credit enhancement activities with the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation. The FHA shall determine whether such guidelines for such enterprises are sufficient for purposes of the FHA, including whether such guidelines meet the requirements under paragraph (3), and— if the FHA determines that such guidelines are so sufficient, the FHA shall adopt such guidelines for purposes of this section, to the extent appropriate, with any changes necessary to account for differences between the mortgages insured under this title and the National Housing Act and the business under such provisions and the business of such enterprises; or if the FHA determines that such guidelines are not so sufficient, the FHA shall adopt such guidelines for purposes of this section, to the extent appropriate and with changes referred to in subparagraph (A), together with additional criteria sufficient to address any such insufficiency. Such guidelines shall ensure that— persons or entities participating in risk-sharing and other credit enhancement activities pursuant to this section have sufficient capital, credit worthiness, and liquidity, and are otherwise capable of fulfilling their obligations to the FHA; such persons or entities and their principals or officers are not engaged in a business the goals of which would conflict with the purposes of the FHA or the National Housing Act; and product or service delivery will be conducted in a manner that is efficient and effective, and that will comply with the requirement under section 211(d). After the expiration of the 2-year period referred to in subsection (a), the FHA shall ensure that, in each fiscal year, not less than 10 percent of any new business in mortgages on 1- to 4-family residential property is insured pursuant to a risk-sharing agreement with respect to such mortgage that complies with the standards established pursuant to subsection (a). In any fiscal year, the FHA may not comply with paragraph
(1)by entering into risk-sharing agreements with respect only to one or a limited number of types or categories of mortgages, or mortgages having only particular, or a particular range of, original principal obligation amounts, but shall enter into risk-sharing agreements for all types and amounts of mortgages insured by the FHA, to the extent required under paragraph (1). For purposes of this subsection, with respect to a fiscal year, the term new business means the aggregate dollar amount of the principal obligations of mortgages for which a commitment to insure is made pursuant to the National Housing Act or this title, as applicable, during such fiscal year. Upon the expiration of each of the 3- and 5-year periods beginning on the date of the enactment of this Act, the FHA shall submit a report to the Congress on the findings and results of risk-sharing activities under this section. Such reports shall describe the model and standards for entering into risk-sharing agreements, analyze appropriate dollar amount limits for the original principal obligations of mortgages that should be subject to a risk-sharing requirement, identify the effects of such risk-sharing activities on the Mutual Mortgage Insurance Fund, and make recommendations regarding expanding the risk-sharing requirement under subsection (c). This section shall take effect on the date of the enactment of this Act. During the transition period under section 281, any reference in this section to the FHA shall be construed to refer to the Secretary to the extent the Secretary has not delegated authority under this section to the FHA pursuant to section 282(1).
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