Sec. 6. Transfer of mortgage servicing duties
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Title II of the National Housing Act ( 12 U.S.C. 1707 et seq. ) is amended by adding at the end the following new section: For any mortgage or pool of mortgages insured under this title and in accordance with rules promulgated by the Secretary, the Secretary may require the servicer of any such mortgage or pool of mortgages to enter into a subservicing arrangement with any independent specialty servicer approved by the Secretary. The rules required under paragraph
(1)shall— set forth with clarity the performance conditions of a servicer that would warrant or necessitate the use of the authority granted to the Secretary under this section; require that the performance condition warranting or necessitating the use of such authority be of such type or character so as to materially and adversely affect the Secretary's ability to recover any amounts owed to the Secretary; for purposes of subparagraph (B), define the term materially and adversely affect ; require that any servicer whose servicing duties are subject to this section be provided a reasonable amount of time, provided that such time does not present a risk to the Mutual Mortgage Insurance Fund, to rebut, address, or correct any determination of the Secretary regarding a performance condition described under subparagraph (A); only permit the Secretary to carry out the authority granted under this section upon expiration of the time-period allowed under subparagraph (D); limit the scope of any such authority to mortgages that share similar underwriting, borrower, and performance characteristics; ensure that the scope of any such authority is not applied broadly and without further limitation; and notwithstanding subparagraphs
(B)through (G), provide that a servicer may be subject to more extensive programmatic discipline or correction measures, as determined by the Secretary, if, during any 5-year period— the servicing duties that are the subject of the current use of the Secretary's authority under this section marks the third instance of the use of such authority with respect to the same servicer; and with respect to the prior two separate and individual instances of the use of such authority, the same servicer failed to cure any identified performance conditions or implement corrective measures as determined by the Secretary pursuant to subparagraph (D). . The amendment made by this section shall only apply to mortgages insured under title II of the National Housing Act ( 12 U.S.C. 1707 et seq. ) that were originated on or after the date of enactment of this Act.
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Sec. 6
Transfer of mortgage servicing duties
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