The full text of S. 1217, the Housing Finance Reform and Taxpayer Protection Act of 2013, can be found here.
The Congressional Research Service summary of this legislation can be found below, and online here.
SUMMARY AS OF:
Housing Finance Reform and Taxpayer Protection Act of 2013 – Establishes the Federal Mortgage Insurance Corporation (FMIC) as an independent agency of the federal government to: (1) develop standard form credit risk-sharing mechanisms, products, structures, contracts, or other security agreements that require private market holders of a covered security insured under this Act to assume the first loss position with respect to losses incurred on such securities; (2) provide insurance on any covered security for which any private market holders have assumed the first loss position with respect to losses; (3) establish a Mortgage Insurance Fund; and (4) oversee and supervise the common securitization platform developed by a business entity announced by the Federal Housing Finance Agency (FHFA) and established by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) (government sponsored enterprises [GSEs]).
Authorizes the FMIC to provide insurance to any covered security regardless of whether it has satisfied credit-risk sharing requirements if unusual and exigent circumstances have created, or threatened to create, an anomalous lack of mortgage credit availability within the housing markets that could materially and severely disrupt the functioning of the housing finance system.
Amends the Securities Act of 1933 and the Securities Exchange Act of 1934 to exempt covered securities insured by FMIC from Securities and Exchange Commission (SEC) regulation in general and from credit risk retention requirements in particular.
Directs the FMIC to develop, adopt, and publish standards for its approval of: (1) private mortgage insurers to provide private mortgage insurance on eligible mortgages; (2) servicers to administer eligible mortgages; (3) issuers to issue covered securities, including the Federal Home Loan Bank System; and (4) bond guarantors to guarantee the timely payment of principal and interest on FMIC-insured securities collateralized by eligible mortgages.
Directs the FMIC to establish an FMIC Mutual Securitization Company to: (1) develop, securitize, sell, and otherwise meet the issuing needs of credit unions, community and mid-size banks, and non-depository mortgage originators with respect to covered securities; and (2) purchase from its member participants for cash, on a single loan basis, eligible mortgage loans to securitize in a covered security.
Directs the FMIC to: (1) require that approved issuers grant to private market investors seeking to take the first loss position in a covered security access to all documents relating to eligible mortgage loans collateralizing that covered security; and (2) establish the timing, frequency, and manner in which such access and disclosures are made.
Prescribes requirements for: (1) investor immunity, (2) uniform securitization agreements, (3) a uniform mortgage database, and (4) electronic registration of eligible mortgages.
Establishes within the FMIC an Office of Underwriting, an Office of Securitization, and an Office of Federal Home Loan Bank Supervision.
Transfers to the FMIC all the powers, personnel, and property and facilities of the FHFA, which is hereby abolished.
Directs the FMIC to charge an insurance fee according to a specified formula.
Amends the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to revise requirements for allocations from the Housing Trust Fund for homeownership and rental programs.
Requires the Secretary of Housing and Urban Development (HUD) and the Secretary of the Treasury, respectively, to ensure that grant amounts allocated to covered grantees, allocated by them to eligible recipients, or allocated by recipients to individuals are used for the benefit of only lawful permanent residents and citizens of the United States in carrying out the activities of the Housing Trust Fund and the Capital Magnet Fund. Prohibits the use of such grant amounts for specified political activities.
Repeals GSE charters and prescribes requirements for the wind down of Fannie Mae and Freddie Mac.
Transfers, without cost, to the FMIC all functions, activities, infrastructure, property, platforms, or any other object or service of a GSE relating to the maintenance and operation of a GSE’s multifamily guarantee business.
Requires a General Accounting Office (GAO) report on full privatization of the secondary mortgage market.