Promoting Access to Credit for Homebuyers Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 6794 To promote access to mortgage credit during the COVID–19 pandemic by preventing restrictions on providing Federal backing for single-family mortgage loans in forbearance, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 8, 2020 Mr. VARGAS (for himself and Ms. WATERS) introduced the following bill; which was referred to the Committee on Financial Services A BILL To promote access to mortgage credit during the COVID– 19 pandemic by preventing restrictions on providing Fed- eral backing for single-family mortgage loans in forbear- ance, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Promoting Access to 4 Credit for Homebuyers Act of 2020’’. 5 SEC. 2. FANNIE MAE AND FREDDIE MAC. 6 (a) PURCHASE REQUIREMENTS.—During the period 7 that begins 5 days after the date of the enactment of this 8 VerDate Sep 11 2014 18:47 May 21, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6794.IH H6794 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6794 IH Act and ends 60 days after the covered period with respect 1 to the mortgage, notwithstanding any other provision of 2 law, an enterprise may not refuse to purchase any single- 3 family mortgage originated on or after February 1, 2020, 4 that otherwise would have been eligible for purchase by 5 such enterprise, solely due to the fact that the borrower 6 has, for the borrower’s previous mortgage or on the mort- 7 gage being purchased— 8 (1) entered into forbearance as a result of a fi- 9 nancial hardship due, directly or indirectly, to the 10 COVID-19 emergency; 11 (2) requested forbearance as a result of a finan- 12 cial hardship due, directly or indirectly, to the 13 COVID-19 emergency; or 14 (3) inquired as to options related to forbearance 15 as a result of a financial hardship due, directly or 16 indirectly, to the COVID-19 emergency. 17 (b) PROHIBITION ON RESTRICTIONS.—With respect 18 to purchase of single-family mortgages described in sub- 19 section (a) and specified in any of paragraphs (1) through 20 (3) of such subsection, an enterprise may not— 21 (1) establish additional restrictions that are not 22 applicable to similarly situated mortgages under 23 which the borrower is not in forbearance; 24 VerDate Sep 11 2014 22:57 Jun 03, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6794.IH H6794 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6794 IH (2) charge a higher guarantee fee (within the 1 meaning provided such term in section 1327 of the 2 Housing and Community Development Act of 1992 3 (12 U.S.C. 4547)), or loan level pricing adjustment, 4 or otherwise alter pricing for such mortgages, rel- 5 ative to similarly situated mortgages under which 6 the borrower is not in forbearance; 7 (3) apply repurchase requirements to such 8 mortgages that are more restrictive than repurchase 9 requirements applicable to similarly situated mort- 10 gages under which the borrower is not in forbear- 11 ance; or 12 (4) require lender indemnification of such mort- 13 gages, solely due to the fact that the borrower is in 14 forbearance. 15 (c) FRAUD DETECTION.—This section may not be 16 construed to prevent an enterprise from conducting over- 17 sight and review of single-family mortgages purchased 18 when a borrower is in forbearance on the borrower’s pre- 19 vious mortgage, or on the mortgage being purchased, for 20 purposes of detecting fraud. An enterprise shall report any 21 fraud detected to the Director. 22 (d) ENTERPRISE CAPITAL.—During the period that 23 begins 5 days after the date of the enactment of this Act 24 and ends 60 days after the covered period with respect 25 VerDate Sep 11 2014 18:47 May 21, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6794.IH H6794 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6794 IH to a mortgage, notwithstanding any other provision of law, 1 a forbearance on such mortgage shall not be considered 2 to be a delinquency under such mortgage for purposes of 3 calculating capital of an enterprise for any purpose under 4 title XIII of the Housing and Community Development 5 Act of 1992 (12 U.S.C. 4501 et seq.). 6 (e) RULES OF CONSTRUCTION.— 7 (1) PURCHASE PARAMETERS.—This section 8 may not be construed to require an enterprise to 9 purchase single-family mortgages that do not meet 10 existing or amended purchase parameters, other 11 than parameters related to borrower forbearance, es- 12 tablished by such enterprise. 13 (2) EMPLOYMENT; INCOME.—This section may 14 not be construed to prevent an enterprise from es- 15 tablishing additional requirements to ensure that a 16 borrower has not lost their job or income prior to a 17 mortgage closing. 18 (f) IMPLEMENTATION.—The Director may issue any 19 guidance, orders, and regulations necessary to carry out 20 this section. 21 SEC. 3. FHA. 22 (a) PROHIBITION ON RESTRICTIONS.—During the 23 period that begins 5 days after the date of the enactment 24 of this Act and ends 60 days after the covered period with 25 VerDate Sep 11 2014 18:47 May 21, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6794.IH H6794 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6794 IH respect to the mortgage, notwithstanding any other provi- 1 sion of law, the Secretary of Housing and Urban Develop- 2 ment may not deny the provision of mortgage insurance 3 for a single-family mortgage originated on or after Feb- 4 ruary 1, 2020, may not implement additional premiums 5 or otherwise alter pricing for such a mortgage, may not 6 require mortgagee indemnification, and may not establish 7 additional restrictions on such a mortgagor, solely due to 8 the fact that the borrower has— 9 (1) entered into forbearance as a result of a fi- 10 nancial hardship due, directly or indirectly, to the 11 COVID-19 emergency; 12 (2) requested forbearance as a result of a finan- 13 cial hardship due, directly or indirectly, to the 14 COVID-19 emergency; or 15 (3) inquired as to options related to forbearance 16 as a result of a financial hardship due, directly or 17 indirectly, to the COVID-19 emergency. 18 (b) RULES OF CONSTRUCTION.— 19 (1) INSURANCE.—This section may not be con- 20 strued to require the Secretary of Housing and 21 Urban Development to provide insurance on single- 22 family mortgages that do not meet existing or 23 amended insurance parameters, other than param- 24 VerDate Sep 11 2014 18:47 May 21, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6794.IH H6794 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 6794 IH eters related to borrower forbearance, established by 1 the Secretary. 2 (2) EMPLOYMENT; INCOME.—This section may 3 not be construed to prevent the Secretary of Hous- 4 ing and Urban Development from establishing addi- 5 tional requirements regarding insurance on single- 6 family mortgages to ensure that a borrower has not 7 lost their job or income prior to a mortgage closing. 8 SEC. 4. REPORTING REQUIREMENTS. 9 (a) FHFA ACTIONS.—During the COVID-19 emer- 10 gency, the Director may not increase guarantee fees, loan 11 level pricing adjustments, or any other fees or implement 12 any restrictions on access to credit unless the Director 13 provides 48-hour advance notice of such increase or re- 14 strictions to the Committee on Financial Services of the 15 House of Representatives and the Committee on Banking, 16 Housing, and Urban Affairs of the Senate together with 17 a detailed report of the policy rationale for the decision, 18 including any and all data considered in making such deci- 19 sion. 20 (b) QUARTERLY REPORTS BY ENTERPRISES AND 21 FHA.— 22 (1) REQUIREMENT.—Each enterprise and the 23 Secretary of Housing and Urban Development, with 24 respect to the FHA mortgage insurance programs, 25 VerDate Sep 11 2014 23:14 Jun 03, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6794.IH H6794 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 6794 IH shall provide reports to the Congress, and make 1 such reports publicly available, not less frequently 2 than quarterly regarding the impact of COVID-19 3 pandemic on the such enterprises’ and program’s 4 ability to meet their charter requirements, civil 5 rights responsibilities, mandates under the CARES 6 Act (Public Law 116–136), and other laws enacted 7 in response to the COVID-19 pandemic, and other 8 requirements under law. The first such report shall 9 be submitted not later than the expiration of the 3- 10 month period beginning upon the date of the enact- 11 ment of this Act and the requirement under this 12 paragraph to submit such reports shall terminate 13 upon the expiration of the 2-year period beginning 14 upon the termination of the COVID-19 emergency. 15 (2) CONTENT.—Each report required under 16 paragraph (1) shall include the following information 17 for the most recent quarter for which data is avail- 18 able: 19 (A) ENTERPRISES.—For each report re- 20 quired by an enterprise: 21 (i) The number of single-family and 22 multi-family residential mortgage loans 23 purchased by the enterprise and the un- 24 VerDate Sep 11 2014 18:47 May 21, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6794.IH H6794 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 6794 IH paid principal balance of such mortgage 1 loans purchased, disaggregated by— 2 (I) mortgage loans made to low- 3 and moderate-income borrowers; 4 (II) mortgage loans made for 5 properties in low- and moderate-in- 6 come census tracts; and 7 (III) mortgage loans made for 8 properties in central cities, rural 9 areas, and underserved areas. 10 (ii) In the single-family residential 11 mortgage market— 12 (I) the total number, unpaid 13 principal balance, and length of 14 forbearances provided to borrowers, 15 including whether or not the forbear- 16 ance was requested by the borrower; 17 (II) a detailed breakdown of the 18 loan modifications offered to bor- 19 rowers and whether the borrowers ac- 20 cepted the offer including the total 21 number and unpaid principal balance 22 of loan modifications ultimately made 23 to borrowers; 24 VerDate Sep 11 2014 18:47 May 21, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6794.IH H6794 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 6794 IH (III) a detailed breakdown of the 1 home retention options offered to bor- 2 rowers and whether the borrowers ac- 3 cepted the offer including the total 4 number and unpaid principal balance 5 of other home retention options ulti- 6 mately made to borrowers; and 7 (IV) the total number of out- 8 comes that included short-sales, deed- 9 in-lieu of foreclosure, and foreclosure 10 sales. 11 (iii) A description of any efforts by 12 the enterprise to provide assistance and 13 support to consumers who are not pro- 14 ficient in English. 15 (iv) A description of any other efforts 16 by the enterprise to provide assistance to 17 low- and moderate-income communities, 18 central cities, rural areas, and other under- 19 served areas, such as financial literacy and 20 education or support of fair housing and 21 housing counseling agencies. 22 (v) A description of any other assist- 23 ance provided by the enterprise to con- 24 VerDate Sep 11 2014 18:47 May 21, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H6794.IH H6794 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 6794 IH sumers in response to the COVID-19 pan- 1 demic. 2 (B) FHA.—For each report required with 3 respect to the FHA mortgage insurance pro- 4 grams: 5 (i) The number and unpaid principal 6 balance for all residential mortgage loans, 7 disaggregated by type, insured under such 8 programs. 9 (ii) The total number, unpaid prin- 10 cipal balance, and length of forbearances 11 provided to borrowers, including whether 12 or not the forbearance was requested by 13 the borrower. 14 (iii) A detailed breakdown of the loan 15 modifications offered to borrowers and 16 whether the borrowers accepted the offer 17 including the total number and unpaid 18 principal balance of loan modifications ulti- 19 mately made to borrowers. 20 (iv) A detailed breakdown of the home 21 retention options offered to borrowers and 22 whether the borrowers accepted the offer 23 including the total number and unpaid 24 VerDate Sep 11 2014 18:47 May 21, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H6794.IH H6794 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 6794 IH principal balance of other home retention 1 options ultimately made to borrowers. 2 (v) A description of any efforts under 3 such programs to provide assistance and 4 support to consumers who are not pro- 5 ficient in English. 6 (vi) A description of any other efforts 7 under such programs to provide assistance 8 to low- and moderate-income communities, 9 central cities, rural areas, and other under- 10 served areas, such as financial literacy and 11 education or support of fair housing and 12 housing counseling agencies. 13 (vii) A description of any other assist- 14 ance provided under such programs to con- 15 sumers in response to the COVID-19 pan- 16 demic. 17 (C) PROVISIONS TO BE INCLUDED IN ALL 18 REPORTS.—Each report required under para- 19 graph (1) shall include, to the degree reason- 20 ably possible, the following information: 21 (i) An analysis of all loan level data 22 required by subparagraphs (A) and (B) 23 disaggregated by race, national origin, gen- 24 der, disability status, whether or not the 25 VerDate Sep 11 2014 18:47 May 21, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H6794.IH H6794 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 6794 IH borrower seeking or obtaining assistance 1 speaks English as a second language, the 2 preferred language of the borrower, debt- 3 to-income level of the borrower, loan-to- 4 value ratio of the loan, and credit score of 5 the borrower. 6 (ii) A geographical analysis at the 7 census tract level, but if information is not 8 available at the census tract level for any 9 of the items required by subparagraphs 10 (A) and (B), the geographical analysis 11 shall be provided at the zip code level for 12 the item for which a census tract analysis 13 was not possible. 14 (iii) A description of any policy 15 changes made by the enterprise or Sec- 16 retary of Housing and Urban Develop- 17 ment, as appropriate, in response to the 18 COVID-19 pandemic and analysis of ac- 19 tions taken to ensure that such policy 20 changes were in compliance with all rel- 21 evant civil rights responsibilities, including 22 the Fair Housing Act, including the Af- 23 firmatively Furthering Fair Housing provi- 24 sion, the Equal Credit Opportunity Act, 25 [Text truncated for display. 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