fha single-family assignment program reform

fha single-family assignment program reform Sec. 407. (a) Foreclosure Avoidance.— Except as provided in subsection (e), the last sentence of section 204(a) of the National Housing Act (12 U.S.C. 1710(a)) is amended by inserting before the period the following: “: And provided further, That the Secretary may pay insurance benefits to the mortgagee to recompense the mortgagee for its actions to provide an alternative to the foreclosure of a mortgage that is in default, which actions may include special foreclosure, loan modification, and deeds in lieu of foreclosure, all upon terms and conditions as the mortgagee shall determine in the mortgagee’s sole discretion, within guidelines provided by the Secretary, but which may not include assignment of a mortgage to the Secretary: And provided further, That for purposes of the preceding proviso, no action authorized by the Secretary and no action taken, nor any failure to act, by the Secretary or the mortgagee shall be subject to judicial review.”. (b) Authority To Assist Mortgagors in Default.— Except as provided in subsection (e), section 230 of the National Housing Act (12 U.S.C. 1715u) is amended to read as follows: “authority to assist mortgagors in default “Sec. 230. (a) Payment of Partial Claim.— The Secretary may establish a program for payment of a partial claim to a mortgagee that agrees to apply the claim amount to payment of a mortgage on a 1- to 4-family residence that is in default. Any such payment under such program to the mortgagee shall be made in the sole discretion of the Secretary and on terms and conditions acceptable to the Secretary, except that— “(1) the amount of the payment shall be in an amount determined by the Secretary, not to exceed an amount equivalent to 12 of the monthly mortgage payments and any costs related to the default that are approved by the Secretary; and “(2) the mortgagor shall agree to repay the amount of the insurance claim to the Secretary upon terms and conditions acceptable to the Secretary. The Secretary may pay the mortgagee, from the appropriate insurance fund, in connection with any activities that the mortgagee 110 STAT. 46is required to undertake concerning repayment by the mortgagor of the amount owed to the Secretary. “(b) Assignment.— “(1) Program authority.— The Secretary may establish a program for assignment to the Secretary, upon request of the mortgagee, of a mortgage on a 1- to 4-family residence insured under this Act. “(2) Program requirements.— The Secretary may accept assignment of a mortgage under a program under this subsection only if— “(A) the mortgage was in default; “(B) the mortgagee has modified the mortgage to cure the default and provide for mortgage payments within the reasonable ability of the mortgagor to pay, at interest rates not exceeding current market interest rates; and “(C) the Secretary arranges for servicing of the assigned mortgage by a mortgagee (which may include the assigning mortgagee) through procedures that the Secretary has determined to be in the best interests of the appropriate insurance fund. “(3) Payment of insurance benefits.— Upon accepting assignment of a mortgage under a program established under this subsection, the Secretary may pay insurance benefits to the mortgagee from the appropriate insurance fund, in an amount that the Secretary determines to be appropriate, not to exceed the amount necessary to compensate the mortgagee for the assignment and any losses and expenses resulting from the mortgage modification. “(c) Prohibition of judicial review.— No decision by the Secretary to exercise or forego exercising any authority under this section shall be subject to judicial review. “(d) Savings Provision.— Any mortgage for which the mortgagor has applied to the Secretary, before the date of enactment of the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1996, for assignment pursuant to subsection (b) of this section as in effect before such date of enactment shall continue to be governed by the provisions of this section, as in effect immediately before such date of enactment. “(e) Applicability of Other Laws.— No provision of this Act, or any other law, shall be construed to require the Secretary to provide an alternative to foreclosure for mortgagees with mortgages on 1- to 4-family residences insured by the Secretary under this Act, or to accept assignments of such mortgages.”. (c) Applicability of Amendments.— Except as provided in subsection (e), the amendments made by subsections (a) and (b) shall apply only with respect to mortgages insured under the National Housing Act that are originated before October 1, 1995. (d) Regulations.— Not later than 60 days after the date of enactment of this Act, the Secretary of Housing and Urban Development shall issue interim regulations to implement this section and the amendments made by this section. (e) Effectiveness and Applicability.— If this Act is enacted after the date of enactment of the Balanced Budget Act of 1995— (1) subsections (a), (b), (c), and (d) of this section shall not take effect; and 110 STAT. 47 (2) section 2052(c) of the Balanced Budget Act of 1995 is amended by striking “that are originated on or after October 1, 1995” and inserting in lieu thereof “that are originated before, during, and after fiscal year 1996.”. This Act may be cited as “The Balanced Budget Downpayment Act, I”.