Sec. 8. Establishment of Deputy Assistant Secretary and Chief Risk Officer of FHA
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Subsection
(b)of section 4 of the Department of Housing and Urban Development Act (42 U.S.C. 3533(b)) is amended— by striking There shall be and inserting the following: There shall be ; and by adding at the end the following: There shall be in the Department, within the Federal Housing Administration, a Deputy Assistant Secretary and Chief Risk Officer, who shall be appointed by the Secretary and shall be responsible to the Federal Housing Commissioner for all matters relating to managing and mitigating risk to the mortgage insurance funds of the Department and ensuring the performance of mortgages insured by the Department to protect borrowers and taxpayers. The Deputy Assistant Secretary and Chief Risk Officer established under subparagraph
(A)shall have— comprehensive risk management and regulatory knowledge in key risks, including credit, interest rate, and operational risk; a sound understanding of the tools and methodologies used to measure and quantify risk, including the use of statistical models; and a broad understanding and knowledge of mortgage industry best practices for risk management. Not later than 1 year after the date of enactment of the FHA Solvency Act of 2013 , and annually thereafter, the Deputy Assistant Secretary and Chief Risk Officer (or, if not yet appointed, the Commissioner of the Federal Housing Administration) shall prepare a report on the underwriting standards for mortgages insured under title II of the National Housing Act ( 12 U.S.C. 1707 et seq. ), which shall be submitted by the Secretary to— the Committee on Banking, Housing, and Urban Affairs of the Senate; and the Committee on Financial Services of the House of Representatives. The report required under clause
(i)shall include— for all mortgages insured under title II of the National Housing Act that were made not less than 6 months and not more than 36 months before the date of the report, an identification of the default risk characteristics as such characteristics existed at the time of origination of the mortgage based on risk factors that are commonly used in evaluating mortgage default risk, including— the current or reasonably expected income and financial resources of a borrower; the employment status of a borrower, if income used under item
(aa)is employment income; the monthly mortgage 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, as determined appropriate by the Secretary; in tabular format, the number of mortgages insured under title II of the National Housing Act that are in default and the rate of default for— each for the characteristics described in subclause (I); any multi-way combination of the characteristics in subclause
(I)as determined appropriate by the Secretary; and any additional multi-way combination of the characteristics in subclause
(I)as may be requested by the Chair or Ranking Member of the Committee on Banking, Housing, and Urban Affairs of the Senate or the Chair or Ranking Member of the Committee on Financial Services of the House of Representatives, provided that the Deputy Assistant Secretary and Chief Risk Officer (or, if not yet appointed, the Commissioner of the Federal Housing Administration) shall be provided an additional 30 days from the date of receipt of such request to satisfy such request; an analysis of mortgages insured under title II of the National Housing Act that were made not less than 6 months and not more than 36 months before the date of the report and are in the lowest quartile and decile of loan performance, which shall include— a description of the characteristics described in subclause
(I)for mortgages in the lowest quartile and decile of loan performance; and a comparison of the characteristics described in subclause
(I)between mortgages in the lowest quartile and decile of loan performance and all other mortgages insured under title II of the National Housing Act; recommendations by the Deputy Assistant Secretary and Chief Risk Officer for revisions to the underwriting standards of the Secretary for mortgages eligible to be insured under title II of the National Housing Act based on the findings of the report, and a response to those recommendations from the Secretary; and a quantitative analysis of the effects of any revisions to the underwriting standards made by the Secretary in response to the findings of a prior report, and any recommendations of the Deputy Assistant Secretary and Chief Risk Officer in response to those revisions. . Section 202(a)(4) of the National Housing Act (12 U.S.C. 1708(a)(4)) is amended by inserting after the first sentence the following: The independent actuary commissioned to carry out the annual independent actuarial study required under this paragraph shall submit such study to the Deputy Assistant Secretary and Chief Risk Officer. .
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Sec. 8
Establishment of Deputy Assistant Secretary and Chief Risk Officer of FHA
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