Sec. 1115. Stabilizing the HECM program
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11 15 . Section 255 of the National Housing Act ( 12 U.S.C. 1715z–20 ) is amended— in subsection (d)(8)— by inserting property maintenance, before insurance ; and by inserting , including matters that set forth terms and provisions for establishing escrow accounts, performing financial assessments, or limiting the amount of any payment made available under the mortgage before the semicolon; and by inserting the establishment of escrow accounts or set-asides, the limiting of amounts of any payment made available under the mortgage, after payment of taxes ; by striking may and inserting shall ; and by inserting , including matters that set forth the terms and provisions for performing financial assessments before the semicolon; in subsection (h)— in paragraph (1), by striking ; and and inserting a semicolon; in paragraph (2), by striking the period and inserting ; and ; and by adding at the end the following new paragraph: by notice or mortgagee letter, establish any additional or alternative requirements that the Secretary, in his or her discretion, determines necessary to more effectively carry out the purposes of the program authorized under this section, and any such notice or mortgagee letter shall take effect upon issuance and expire not later than 24 months after the date of issuance of the notice or mortgagee letter. . in subsection (h)(3), as added by the Reverse Mortgage Stabilization Act of 2013 ( Public Law 113–29 ), by striking any additional or alternative requirements and inserting requirements pertaining to escrow accounts or set-asides, financial assessments, or limiting the amount of any payment made available under the mortgage, as authorized under subsection (d)(8), ; and by adding at the end the following:
In carrying out the program authorized under this section, the Secretary shall require the establishment of an escrow account or set-aside in any instance where the Secretary determines, after a financial assessment of the mortgagor has been completed, that such an account or set-aside would mitigate the risk of loss to the mortgagee, the mortgagor, the program, or the Mutual Mortgage Insurance Fund. .
(b)The authority of the Secretary of Housing and Urban Development to issue any notice or mortgagee letter pursuant to section 255(h)(3) of the National Housing Act, as added by the Reverse Mortgage Stabilization Act of 2013 ( Public Law 113–29 ) shall expire not later than 24 months after the date of enactment of this Act. b c ) In carrying out the authority provided to the Secretary of Housing and Urban Development under section 255(h)(3) of the National Housing Act, as added by subsection
(a)as added by the Reverse Mortgage Stabilization Act of 2013 (Public Law 113–29) , the Secretary shall— not later than 90 days after the issuance of the notice or mortgagee letter pursuant to such section, issue a notice of proposed rulemaking addressing the same additional or alternative requirements that are the subject of the notice or mortgagee letter; and not later than 24 months after the issuance of the notice of proposed rulemaking required under subparagraph (A)— issue a final rule addressing the same additional or alternative requirements that are the subject of the notice or mortgagee letter; or withdraw the notice or mortgagee letter. If the Secretary of Housing and Urban Development fails to issue a final rule by the end of the period described under paragraph (1)(B)— the provisions of the notice or mortgagee letter at issue shall become null and void; the Secretary— shall not have authority to reissue such notice or mortgagee letter; and may only address the requirements that are the subject of the notice or mortgagee letter at issue through the promulgation of a regulation pursuant to the rulemaking requirements of title 5, United States Code; and the Secretary and the Director of the Office of Management and Budget shall appear before the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives to provide testimony explaining the failure to comply with the requirements of this subsection. Not later than 1 year after the date of enactment of this Act, the Secretary of Housing and Urban Development shall issue a notice of proposed rulemaking that— eliminates the use, issuance, or establishment of any standard fixed-rate full draw product offered under the home equity conversion mortgage program authorized by section 255 of the National Housing Act ( 12 U.S.C. 1715z-20 ); and requires any other fixed-rate full draw product offered under the home equity conversion mortgage program authorized by section 255 of the National Housing Act not subject to elimination under paragraph
(1)to be based on a financial assessment of the mortgagor. The Secretary of Housing and Urban Development, on a quarterly basis, shall report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives on the status and financial condition of each distinct product offered under the home equity conversion mortgage program authorized by section 255 of the National Housing Act, including the HECM Standard Adjustable, HECM Saver Fixed, and HECM Saver Adjustable products. The report required under paragraph
(1)shall set forth, for each product the— default rates under the product; rate of foreclosure on loans insured pursuant to each product; and severity and extent of losses incurred on loans insured pursuant to each product. Upon review of the information collected pursuant to this subsection, if the Secretary of Housing and Urban Development determines that any individual product has a default rate measurably higher than the default rates occurring in any other product or is experiencing losses measurably higher than losses incurred in any other product, the Secretary shall further study the product and include in the next quarterly report due under paragraph (1)— information identifying and enumerating the causes of such higher default rates and severity of losses; and a detailed description of the actions to be taken by the Secretary to correct such inefficiencies.
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- 12 USC 1715z–20
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