Promoting Access to Credit for Homebuyers Act of 2020

II 116TH CONGRESS 2D SESSION S. 4260 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 SENATE OF THE UNITED STATES JULY 22, 2020 Mr. MENENDEZ introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 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. DEFINITIONS. 6 In this Act: 7 VerDate Sep 11 2014 03:00 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4260.IS S4260 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 4260 IS (1) COVERED PERIOD.—The term ‘‘covered pe- 1 riod’’ means, with respect to a Federally backed 2 mortgage loan, the period of time during which the 3 borrower under the loan may request forbearance on 4 the loan under section 4022(b) of the CARES Act 5 (15 U.S.C. 9056(b)). 6 (2) COVID–19 EMERGENCY.—The term 7 ‘‘COVID–19 emergency’’ has the meaning given the 8 term in section 4022 of the CARES Act (15 U.S.C. 9 9056). 10 (3) DIRECTOR.—The term ‘‘Director’’ means 11 the Director of the Federal Housing Finance Agen- 12 cy. 13 (4) ENTERPRISE.—The term ‘‘enterprise’’ has 14 the meaning given the term in section 1303 of the 15 Housing and Community Development Act of 1992 16 (12 U.S.C. 4502). 17 (5) FEDERALLY BACKED MORTGAGE LOAN.— 18 The term ‘‘Federally backed mortgage loan’’ has the 19 meaning given the term in section 4022 of the 20 CARES Act (15 U.S.C. 9056). 21 SEC. 3. FANNIE MAE AND FREDDIE MAC. 22 (a) PURCHASE REQUIREMENTS.—During the period 23 beginning on the date that is 5 days after the date of en- 24 actment of this Act and ending on the date that is 60 25 VerDate Sep 11 2014 03:00 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4260.IS S4260 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 4260 IS days after the end of the covered period with respect to 1 the mortgage, notwithstanding any other provision of law, 2 an enterprise may not refuse to purchase any single-family 3 mortgage originated on or after February 1, 2020, that 4 otherwise would have been eligible for purchase by such 5 enterprise, solely due to the fact that the borrower has, 6 for the borrower’s previous mortgage or on the mortgage 7 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 03:00 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4260.IS S4260 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 4260 IS (2) charge a higher guarantee fee (within the 1 meaning provided the 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 those mortgages, rel- 5 ative to similarly situated mortgages under which 6 the borrower is not in forbearance; 7 (3) apply repurchase requirements to those 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 those 13 mortgages, solely due to the fact that the borrower 14 is in forbearance. 15 (c) FRAUD DETECTION.— 16 (1) IN GENERAL.—Nothing in this section may 17 be construed to prevent an enterprise from con- 18 ducting oversight and review of single-family mort- 19 gages purchased when a borrower is in forbearance 20 on the borrower’s previous mortgage, or on the 21 mortgage being purchased, for purposes of detecting 22 fraud. 23 VerDate Sep 11 2014 03:00 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4260.IS S4260 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 4260 IS (2) REQUIREMENT TO REPORT.—An enterprise 1 shall report any fraud detected as described in para- 2 graph (1) to the Director. 3 (d) ENTERPRISE CAPITAL.—During the period be- 4 ginning on the date that is 5 days after the date of enact- 5 ment of this Act and ending on the date that is 60 days 6 after the end of the covered period with respect to the 7 mortgage, notwithstanding any other provision of law, a 8 forbearance on the mortgage shall not be considered to 9 be a delinquency under the mortgage for purposes of cal- 10 culating capital of an enterprise for any purpose under 11 title XIII of the Housing and Community Development 12 Act of 1992 (12 U.S.C. 4501 et seq.). 13 (e) RULES OF CONSTRUCTION.— 14 (1) PURCHASE PARAMETERS.—Nothing in this 15 section may be construed to require an enterprise to 16 purchase single-family mortgages that do not meet 17 existing or amended purchase parameters, other 18 than parameters related to borrower forbearance, es- 19 tablished by the enterprise. 20 (2) EMPLOYMENT; INCOME.—Nothing in this 21 section may be construed to prevent an enterprise 22 from establishing additional requirements to ensure 23 that a borrower has not lost their job or income 24 prior to a mortgage closing. 25 VerDate Sep 11 2014 03:00 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4260.IS S4260 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 4260 IS (f) IMPLEMENTATION.—The Director may issue any 1 guidance, orders, and regulations necessary to carry out 2 this section. 3 SEC. 4. FHA. 4 (a) PROHIBITION ON RESTRICTIONS.—During the 5 period beginning on the date that is 5 days after the date 6 of enactment of this Act and ending on the date that is 7 60 days after the end of the covered period with respect 8 to the mortgage, notwithstanding any other provision of 9 law, the Secretary of Housing and Urban Development 10 may not deny the provision of mortgage insurance for a 11 single-family mortgage originated on or after February 1, 12 2020, may not implement additional premiums or other- 13 wise alter pricing for such a mortgage, may not require 14 mortgagee indemnification, and may not establish addi- 15 tional restrictions on such a mortgagor, solely due to the 16 fact that the borrower has— 17 (1) entered into forbearance as a result of a fi- 18 nancial hardship due, directly or indirectly, to the 19 COVID–19 emergency; 20 (2) requested forbearance as a result of a finan- 21 cial hardship due, directly or indirectly, to the 22 COVID–19 emergency; or 23 VerDate Sep 11 2014 03:00 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4260.IS S4260 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 4260 IS (3) inquired as to options related to forbearance 1 as a result of a financial hardship due, directly or 2 indirectly, to the COVID–19 emergency. 3 (b) RULES OF CONSTRUCTION.— 4 (1) INSURANCE.—Nothing in this section may 5 be construed to require the Secretary of Housing 6 and Urban Development to provide insurance on sin- 7 gle-family mortgages that do not meet existing or 8 amended insurance parameters, other than param- 9 eters related to borrower forbearance, established by 10 the Secretary of Housing and Urban Development. 11 (2) EMPLOYMENT; INCOME.—Nothing in this 12 section may be construed to prevent the Secretary of 13 Housing and Urban Development from establishing 14 additional requirements regarding insurance on sin- 15 gle-family mortgages to ensure that a borrower has 16 not lost their job or income prior to a mortgage clos- 17 ing. 18 SEC. 5. REPORTING REQUIREMENTS. 19 (a) FHFA ACTIONS.—During the COVID–19 emer- 20 gency, the Director may not increase guarantee fees, loan 21 level pricing adjustments, or any other fees or implement 22 any restrictions on access to credit unless the Director 23 provides 48-hour advance notice of such increase or re- 24 strictions to the Committee on Banking, Housing, and 25 VerDate Sep 11 2014 03:00 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4260.IS S4260 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 4260 IS Urban Affairs of the Senate and the Committee on Finan- 1 cial Services of the House of Representatives together with 2 a detailed report of the policy rationale for the decision, 3 including any and all data considered in making such deci- 4 sion. 5 (b) QUARTERLY REPORTS BY ENTERPRISES AND 6 FHA.— 7 (1) REQUIREMENT.—Each enterprise and the 8 Secretary of Housing and Urban Development, with 9 respect to the mortgage insurance programs of the 10 Federal Housing Administration, shall provide re- 11 ports to the Congress, and make such reports pub- 12 licly available, not less frequently than quarterly re- 13 garding the impact of COVID–19 pandemic on the 14 such enterprises’ and program’s ability to meet their 15 charter requirements, civil rights responsibilities, 16 mandates under the CARES Act (Public Law 116– 17 136), and other laws enacted in response to the 18 COVID–19 pandemic, and other requirements under 19 law. 20 (2) DEADLINES.—The first report required 21 under paragraph (1) shall be submitted not later 22 than 3 months after the date of enactment of this 23 Act and the requirement under paragraph (1) to 24 submit those reports shall terminate on the date 25 VerDate Sep 11 2014 03:00 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4260.IS S4260 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 4260 IS that is 2 years after the date on which the COVID– 1 19 emergency terminates. 2 (3) CONTENT.—Each report required under 3 paragraph (1) shall include the following information 4 for the most recent quarter for which data is avail- 5 able: 6 (A) ENTERPRISES.—For each report re- 7 quired by an enterprise: 8 (i) The number of single-family and 9 multi-family residential mortgage loans 10 purchased by the enterprise and the un- 11 paid principal balance of those mortgage 12 loans purchased, disaggregated by— 13 (I) mortgage loans made to low- 14 and moderate-income borrowers; 15 (II) mortgage loans made for 16 properties in low- and moderate-in- 17 come census tracts; and 18 (III) mortgage loans made for 19 properties in central cities, rural 20 areas, and underserved areas. 21 (ii) In the single-family residential 22 mortgage market— 23 (I) the total number, unpaid 24 principal balance, and length of 25 VerDate Sep 11 2014 03:00 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4260.IS S4260 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 4260 IS forbearances provided to borrowers, 1 including whether or not the forbear- 2 ance was requested by the borrower; 3 (II) a detailed breakdown of the 4 loan modifications offered to bor- 5 rowers and whether the borrowers ac- 6 cepted the offer, including the total 7 number and unpaid principal balance 8 of loan modifications ultimately made 9 to borrowers; 10 (III) a detailed breakdown of the 11 home retention options offered to bor- 12 rowers and whether the borrowers ac- 13 cepted the offer, including the total 14 number and unpaid principal balance 15 of other home retention options ulti- 16 mately made to borrowers; and 17 (IV) the total number of out- 18 comes that included short-sales, deed- 19 in-lieu of foreclosure, and foreclosure 20 sales. 21 (iii) A description of any efforts by 22 the enterprise to provide assistance and 23 support to consumers who are not pro- 24 ficient in English. 25 VerDate Sep 11 2014 03:00 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S4260.IS S4260 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 4260 IS (iv) A description of any other efforts 1 by the enterprise to provide assistance to 2 low- and moderate-income communities, 3 central cities, rural areas, and other under- 4 served areas, such as financial literacy and 5 education or support of fair housing and 6 housing counseling agencies. 7 (v) A description of any other assist- 8 ance provided by the enterprise to con- 9 sumers in response to the COVID–19 pan- 10 demic. 11 (B) FHA.—For each report required with 12 respect to the mortgage insurance programs of 13 the Federal Housing Administration: 14 (i) The number and unpaid principal 15 balance for all residential mortgage loans, 16 disaggregated by type, insured under those 17 programs. 18 (ii) The total number, unpaid prin- 19 cipal balance, and length of forbearances 20 provided to borrowers, including whether 21 or not the forbearance was requested by 22 the borrower. 23 (iii) A detailed breakdown of the loan 24 modifications offered to borrowers and 25 VerDate Sep 11 2014 03:00 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S4260.IS S4260 pbinns on DSKJLVW7X2PROD with BILLS 12 •S 4260 IS whether the borrowers accepted the offer, 1 including the total number and unpaid 2 principal balance of loan modifications ulti- 3 mately made to borrowers. 4 (iv) A detailed breakdown of the home 5 retention options offered to borrowers and 6 whether the borrowers accepted the offer, 7 including the total number and unpaid 8 principal balance of other home retention 9 options ultimately made to borrowers. 10 (v) A description of any efforts under 11 those programs to provide assistance and 12 support to consumers who are not pro- 13 ficient in English. 14 (vi) A description of any other efforts 15 under those programs to provide assistance 16 to low- and moderate-income communities, 17 central cities, rural areas, and other under- 18 served areas, such as financial literacy and 19 education or support of fair housing and 20 housing counseling agencies. 21 (vii) A description of any other assist- 22 ance provided under those programs to 23 consumers in response to the COVID–19 24 pandemic. 25 VerDate Sep 11 2014 03:00 Aug 04, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S4260.IS S4260 pbinns on [Text truncated for display. 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