Fannie Mae-No Politics (FNMA)

[Dollars1]

Here's all the GSE info in one spot. Sorry my other posts got chopped up. :)

20 TITLE VII—TAXPAYER PROTEC-
21 TIONS AND MARKET ACCESS
22 FOR MORTGAGE FINANCE

23 SEC. 701. DEFINITIONS.
24 In this title, the following definitions shall apply:
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1 (1) AGENCY.—The term ‘‘Agency’’ means the
2 Federal Housing Finance Agency.
3 (2) BACK-END RISK SHARING.—The term
4 ‘‘back-end risk sharing’’ means any risk-sharing
5 transaction that allows the enterprises to share sin-
6 gle-family mortgage credit risk that is already on the
7 existing balance sheets of the enterprises with the
8 private sector.
9 (3) COMMON SECURITIZATION SOLUTIONS.—
10 The term ‘‘Common Securitization Solutions’’ means
11 Common Securitization Solutions, LLC.
12 (4) ENTERPRISE.—The term ‘‘enterprise’’ has
13 the meaning given that term in section 1303 of the
14 Federal Housing Enterprises Financial Safety and
15 Soundness Act of 1992 (12 U.S.C. 4502).
16 (5) FIRST LOSS POSITION; FRONT-END RISK
17 SHARING; RISK-SHARING TRANSACTION.—The terms
18 ‘‘first loss position’’, ‘‘front-end risk sharing’’, and
19 ‘‘risk-sharing transaction’’ have the meanings given
20 those terms in section 1328(a) of the Federal Hous-
21 ing Enterprises Financial Safety and Soundness Act
22 of 1992, as added by section 706(b)(1).
23 (6) GUARANTEE FEE.—The term ‘‘guarantee
24 fee’’ has the meaning given that term in section
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1 1327(a) of the Housing and Community Develop-
2 ment Act of 1992 (12 U.S.C. 4547(a)).
3 (7) PLATFORM.—The term ‘‘Platform’’ means
4 the securitization platform and a model contractual
5 and disclosure framework, first described by the
6 paper issued by the Federal Housing Finance Agen-
7 cy on October 4, 2012 entitled ‘‘Building a New In-
8 frastructure for the Secondary Mortgage Market’’,
9 and updated in subsequent documents released by
10 the Federal Housing Finance Agency, including an-
11 nual strategic plans for the conservatorship of the
12 enterprises and annual conservatorship scorecards.
13 (8) PLATFORM DIRECTORS.—The term ‘‘Plat-
14 form Directors’’ means the Securitization Platform
15 Board of Directors established under section
16 705(c)(1).
17 (9) SECOND LOSS POSITION.—The term ‘‘sec-
18 ond loss position’’ means, with respect to a risk-
19 sharing transaction, the fully-funded position to
20 which any credit losses on such a covered security
21 resulting from the nonperformance of underlying
22 mortgage loans will accrue and be absorbed after a
23 first loss position, to the full extent of a holder’s in-
24 terest in such position.
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(10) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of the Treasury.
(11) SENIOR PREFERRED STOCK PURCHASE AGREEMENT.—The term ‘‘Senior Preferred Stock Purchase Agreement’’ means—
(A) the Amended and Restated Senior Pre- ferred Stock Purchase Agreement, dated Sep- tember 26, 2008, as such Agreement has been amended on May 6, 2009, December 24, 2009, and August 17, 2012, respectively, and as such Agreement may be further amended and re- stated, entered into between the Department of the Treasury and each enterprise, as applicable; and
(B) any provision of any certificate in con- nection with such Agreement creating or desig- nating the terms, powers, preferences, privi- leges, limitations, or any other conditions of the Variable Liquidation Preference Senior Pre- ferred Stock of an enterprise issued or sold pur- suant to such Agreement.
SEC. 702. PROHIBITING THE USE OF GUARANTEE FEES AS AN OFFSET.
(a) IN GENERAL.—In the Senate and the House of Representatives, for purposes of determining budgetary
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1 impacts to evaluate points of order under the Congres-
2 sional Budget Act of 1974, any previous budget resolution,
3 and any subsequent budget resolution, provisions con-
4 tained in any bill, resolution, amendment, motion, or con-
5 ference report that increases, or extends the increase of,
6 any guarantee fee of an enterprise shall not be scored with
7 respect to the level of budget authority, outlays, or reve-
8 nues contained in such legislation.
9 (b) EXCEPTION.—The prohibition in subsection (a)
10 shall not apply to any legislation that—
11 (1) includes a specific instruction to the Sec-
12 retary on the sale, transfer, relinquishment, liquida-
13 tion, divestiture, or other disposition of senior pre-
14 ferred stock acquired pursuant to the Senior Pre-
15 ferred Stock Purchase Agreement; and
16 (2) provides for an increase, or extension of an
17 increase, of any guarantee fee of an enterprise to be
18 used for the purpose of financing reforms to the sec-
19 ondary mortgage market.
20 SEC. 703. LIMITATIONS ON SALE OF PREFERRED STOCK.
21 Notwithstanding any other provision of law or any
22 provision of the Senior Preferred Stock Purchase Agree-
23 ment, the Secretary may not sell, transfer, relinquish, liq-
24 uidate, divest, or otherwise dispose of any outstanding
25 shares of senior preferred stock acquired pursuant to the
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Senior Preferred Stock Purchase Agreement, until such time as Congress has passed and the President has signed into law legislation that includes a specific instruction to the Secretary regarding the sale, transfer, relinquishment, liquidation, divestiture, or other disposition of the senior preferred stock so acquired.
SEC. 704. SECONDARY MARKET ADVISORY COMMITTEE.
Not later than 90 days after the date of enactment of this Act, the Agency shall establish the Secondary Mar- ket Advisory Committee, which shall—
(1) provide advice to the Agency on decisions relating to the development of market infrastructure, including the Platform and Common Securitization Solutions; and
(2) include private market participants rep- resenting multiple aspects of the mortgage market, including mortgage lenders, poolers of mortgage- backed securities, and investors of mortgage-backed securities.
SEC. 705. SECURITIZATION PLATFORM.
(a) SENSE OF CONGRESS.—It is the sense of Con- gress that—
(1) at the direction of the Agency, the enter- prises have established a joint venture called Com- mon Securitization Solutions intended to facilitate
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1 the issuance of mortgage-backed securities through
2 the Platform;
3 (2) at the direction of the Agency, the develop-
4 ment of the Platform is currently geared toward the
5 issuance of mortgage-backed securities by the enter-
6 prises;
7 (3) as soon as practicable, the capacity and
8 functionality of the Platform should be expanded to
9 facilitate the issuance of mortgage-backed securities
10 by issuers other than the enterprises;
11 (4) the property of the enterprises, including in-
12 tellectual property, technology, systems, and infra-
13 structure (including technology, systems, and infra-
14 structure developed by the enterprises for the Plat-
15 form), as well as any other legacy systems, infra-
16 structure, processes, and the Platform itself are val-
17 uable assets of the enterprises; and
18 (5) the enterprises should receive appropriate
19 compensation for the transfer of any assets.
20 (b) REPORTS TO CONGRESS.—
21 (1) ANNUAL REPORT ON DEVELOPMENT OF
22 THE PLATFORM.—Not later than 1 year after the
23 date of enactment of this Act, and every year there-
24 after, the Agency shall submit to Congress a report
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1 on the status of the development of the Platform,
2 which shall include—
3 (A) the projected timelines for—
4 (i) completing development of the
5 Platform to support the securitization
6 needs of the enterprises; and
7 (ii) completing development of the
8 Platform to support the securitization
9 needs of issuers other than the enterprises;
10 and
11 (B) the projected budget for the develop-
12 ment of the Platform.
13 (2) REPORT ON TRANSITION OF THE PLAT-
14 FORM.—Not later than 3 years after the date of en-
15 actment of this Act, the Agency shall develop a plan,
16 and submit to the Committee on Banking, Housing
17 and Urban Affairs of the Senate and the Committee
18 on Financial Services of the House of Representa-
19 tives a report on such plan, to transition the Plat-
20 form from a joint venture owned by the enterprises
21 into a private, nonprofit entity that best facilitates
22 a deep, liquid, and resilient secondary mortgage
23 market for mortgage-backed securities.
24 (c) PLATFORM BOARD OF DIRECTORS.—
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1 (1) ESTABLISHMENT.—Not later than 6
2 months after the date of enactment of this Act, the
3 Agency shall establish a Securitization Platform
4 Board of Directors to advise on the development of
5 the Platform and the transition of the Platform.
6 (2) COMPOSITION AFTER 1 YEAR.—Not later
7 than 1 year after the date of enactment of this Act,
8 as determined by the Agency, the Board of Directors
9 of the Platform shall be comprised of 7 directors, 3
10 of whom—
11 (A) shall have demonstrated knowledge of,
12 or experience in, financial management, finan-
13 cial services, risk management, information
14 technology, or housing finance; and
15 (B) are not simultaneously employed by an
16 enterprise or serve as a director of an enter-
17 prise.
18 (3) COMPOSITION AFTER 18 MONTHS.—Not
19 later than 18 months after the date of enactment of
20 this Act, as determined by the Agency, the Board of
21 Directors of the Platform shall be comprised of 9 di-
22 rectors, 4 of whom—
23 (A) shall have demonstrated knowledge of,
24 or experience in, financial management, finan-
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1 cial services, risk management, information
2 technology, or housing finance; and
3 (B) are not simultaneously employed by an
4 enterprise or serve as a director of an enter-
5 prise.
6 (d) AUTHORIZED AND PROHIBITED ACTIVITIES.—
7 (1) AUTHORIZED ACTIVITIES.—
8 (A) IN GENERAL.—Not later than 2 years
9 after the date of enactment of this Act, Com-
10 mon Securitization Solutions, in consultation
11 with the Platform Directors, shall—
12 (i) develop standards for—
13 (I) an entity other than an enter-
14 prise to become an approved issuer of
15 securities issued through the Plat-
16 form;
17 (II) loans that may serve as col-
18 lateral for securities issued through
19 the Platform; and
20 (III) originating, servicing, pool-
21 ing, dispute resolution, disclosure, and
22 securitizing residential mortgage loans
23 that collateralize securities issued
24 through the Platform by issuers other
25 than the enterprises; and
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(ii) operate and maintain the Plat- form and establish fees for use of the Plat- form.
(B) ISSUING SECURITIES BY APPROVED
ISSUERS.—Not later than 3 years after the date of enactment of this Act—
(i) the Platform shall facilitate the issuance of securities by any approved issuer other than an enterprise; and
(ii) issuances of securities facilitated through the Platform shall not be limited to those made by the enterprises. PROHIBITED ACTIVITIES.—The Platform
(A) guarantee any mortgage loans or mort- gage-backed securities;
(B) assume or hold mortgage loan credit risk;
(C) purchase any mortgage loans for cash on a single loan basis for the purpose of securitization;
(D) own or hold any mortgage loans or mortgage-backed securities for investment pur- poses;
may
(2) not—
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(E) make or be a party to any representa- tion and warranty agreement on any mortgage loans; or
(F) take lender representation and war- ranty risk.
(e) FUNDING BY THE FHFA AND TRANSFER OF PROPERTY.—
(1) TRANSFER OF FUNDS FROM THE ENTER- PRISES.—At a time established by the Agency, the Agency shall transfer to the Platform such funds from the enterprises as the Agency, in consultation with the Platform Directors, determines may be rea- sonably necessary for the Platform to begin carrying out the activities and operations of the Platform.
(2) TRANSFER OF PROPERTY.—
(A) IN GENERAL.—The Agency, in con-
sultation with the enterprises, shall direct the enterprises to transfer or sell to the Platform any property, including intellectual property, technology, systems, and infrastructure (includ- ing technology, systems, and infrastructure de- veloped by the enterprises for the Platform), as well as any other legacy systems, infrastructure, and processes that may be necessary for the
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1 Platform to carry out the functions and oper-
2 ations of the Platform.
3 (B) CONTRACTUAL AND OTHER LEGAL OB-
4 LIGATIONS.—As may be necessary for the
5 Agency and the enterprises to comply with
6 legal, contractual, or other obligations, the
7 Agency shall have the authority to require that
8 any transfer authorized under subparagraph
9 (A) occurs as an exchange for value, including
10 through the provision of appropriate compensa-
11 tion to the enterprises or other entities respon-
12 sible for creating, or contracting with, the Plat-
13 form.
14 (f) TRANSITION OF THE SECURITIZATION PLAT-
15 FORM.—
16 (1) IN GENERAL.—Not later than 5 years after
17 the date of enactment of this Act, the Agency shall
18 oversee the transition of ownership of the Platform
19 from the enterprises to a private nonprofit entity in
20 accordance with the plan developed under subsection
21 (b)(2).
22 (2) REPAYMENT OF COST.—Not later than 10
23 years after the date of the transition described in
24 paragraph (1), the total cost of the Platform at the
25 time of the transition, as determined jointly by the
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Agency and the Secretary, shall be repaid to the en- terprises.
(g) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to prohibit the Agency or the Plat- form from first developing a common securitization plat- form for use only by the enterprises, if all of the provisions in this Act relating to the development of the Platform are complied with in a timely manner.
SEC. 706. MANDATORY RISK SHARING.
(a) SENSE OF CONGRESS.—It is the sense of Con- gress that—
(1) at the direction of the Agency, the enter- prises have executed a series of transactions in which the enterprises share risk with the private sec- tor;
(2) in the risk-sharing transactions to date, the enterprises have shared risk on pools of loans that either the enterprises already guarantee or do not yet guarantee;
(3) the risk that the enterprises have shared has been either any loss suffered on the loans in the transaction or any loss in excess of some minimal level on loans in the transaction;
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1 (4) to date, the vast majority of risk-sharing
2 transactions have involved either back-end risk shar-
3 ing or the transfer of the second loss position; and
4 (5) the Agency should direct the enterprises
5 to—
6 (A) engage in more front-end risk sharing
7 in which the first loss position is transferred;
8 and
9 (B) retain data that can help inform pol-
10 icymakers and the public about the impact to
11 consumers, the market, and the enterprises
12 from such transactions.
13 (b) MANDATORY RISK SHARING.—
14 (1) IN GENERAL.—Subpart A of part 2 of sub-
15 title A of the Federal Housing Enterprises Financial
16 Safety and Soundness Act of 1992 (12 U.S.C. 4541
17 et seq.) is amended by adding at the end the fol-
18 lowing:
19 ‘‘SEC. 1328. MANDATORY RISK-SHARING TRANSACTIONS.
20 ‘‘(a) DEFINITIONS.—In this section, the following
21 definitions shall apply:
22 ‘‘(1) FIRST LOSS POSITION.—The term ‘first
23 loss position’ means, with respect to a risk-sharing
24 transaction, the fully-funded position to which any
25 credit loss on such covered security resulting from
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the nonperformance of underlying mortgage loans will accrue and be absorbed, to the full extent of the holder’s interest in such position.
‘‘(2) FRONT-END RISK SHARING.—The term ‘front-end risk sharing’ means any risk-sharing transaction that allows the enterprises to share sin- gle-family mortgage credit risk with the private sec- tor on mortgage loans prior to receiving a guarantee.
‘‘(3) RISK-SHARING TRANSACTION.—The term ‘risk-sharing transaction’ means any transaction that provides an additional avenue for sharing enter- prise mortgage credit risk with the private market. ‘‘(b) RISK-SHARING TRANSACTIONS.—The Director
shall require each enterprise to develop and undertake transactions in which the first loss position is transferred involving the guarantee by the enterprises of securities and obligations based on or backed by mortgages on resi- dential real properties designed principally for occupancy of from 1 to 4 families, as provided in subsection (c).
‘‘(c) REQUIRED PERCENTAGE OF BUSINESS.—
‘‘(1) FIRST LOSS AND FRONT END.—Except as provided in paragraph (2), the Director shall require
that—
‘‘(A) the total amount of the first loss po- sition transferred by each enterprise in a cal-
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1 endar year shall be not less than 150 percent
2 of the total amount of the first loss position
3 transferred by the enterprise during the pre-
4 ceding calendar year; and
5 ‘‘(B) not less than half of the total amount
6 of the first loss position transferred under sub-
7 paragraph (A) is transferred through front-end
8 risk sharing.
9 ‘‘(2) EXCEPTION.—The requirement under
10 paragraph (1) may be delayed for not more than 1
11 year if the Director and the Secretary of the Treas-
12 ury—
13 ‘‘(A) determine that such an increase in
14 the amount of the first loss position transferred
15 by the enterprise in a calendar year, or an in-
16 crease in the amount that would need to be
17 shared through a front end transaction, would
18 adversely impact the housing market; and
19 ‘‘(B) submit to Congress a report describ-
20 ing the justification for the determination made
21 in subparagraph (A).’’.
22 (2) ANNUAL REPORTING REQUIREMENT.—Not
23 later than 1 year after the date of enactment of this
24 Act, and every year thereafter, the Agency shall sub-
25 mit to Congress a report, which shall include—
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1 (A) for the 12-month period preceding the
2 date on which the report is submitted, an as-
3 sessment of the market responses to the credit
4 risk-transfer activities of each of the enter-
5 prises, in aggregate, and by credit risk-transfer
6 mechanism, including—
7 (i) impacts on borrower costs, yield
8 spreads, and the economics of the oper-
9 ations of the enterprises; and
10 (ii) the type and characteristics of the
11 underlying collateral and borrowers whose
12 loans are involved in credit risk-transfer
13 transactions; and
14 (B) a 5-year plan, which shall include, for
15 each of the 5 years following the year in which
16 the report is issued—
17 (i) the projected percentage of the un-
18 paid principal balance of each enterprise
19 covered under the credit risk-transfer pro-
20 gram;
21 (ii) the projected percentage of new
22 business for each enterprise subject to
23 transactions in which the first loss position
24 is transferred, including the types of deal
25 structures;
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(iii) the projected depth of front-end risk sharing per type of transaction for each enterprise; and
(iv) a description of the steps that the Agency intends to take to broaden the eli- gible investor base for credit risk-transfer programs.

http://www.banking.senate.gov/public/index.cfm?FuseAction=Issues.View&Issue_id=d86ae09c-b158-a803-253f-443c303a8deb