Sec. 6. Improving underwriting standards
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Not later than 180 days after the date of enactment of this Act, the Secretary of Housing and Urban Development shall, by mortgagee letter or rule, evaluate and revise as necessary the underwriting standards for mortgages eligible to be insured under title II of the National Housing Act (12 U.S.C. 1707 et seq.), which shall— be based on empirically derived, demonstrably and statistically sound models; and include criteria, the evaluation of which has historically resulted in comparatively low rates of delinquency and default during adverse economic conditions. The underwriting standards under subsection
(a)shall include an evaluation of— the current or reasonably expected income and financial resources of a borrower; the employment status of a borrower, if income used under paragraph
(1)is employment income; the monthly payment of a borrower under the terms of a mortgage; the monthly payment for any other loan held by the borrower; the monthly payment for any obligations related to the mortgage; any other debt obligations of a borrower, including alimony and child support; the monthly debt-to-income ratio or residual income of a borrower; the credit history of a borrower; and any other risk factor or criteria, as determined appropriate by the Secretary.
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Sec. 6
Improving underwriting standards
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