HOME EQUITY CONVERSION MORTGAGES.

SEC. 2122. HOME EQUITY CONVERSION MORTGAGES.(a) In General.—Section 255 of the National Housing Act (12 U.S.C. 1715z–20) is amended—(1) in subsection (b)(2), insert “ ‘real estate,’ ” after “ ‘mortgagor’,”;(2) by amending subsection (d)(1) to read as follows:“(1) have been originated by a mortgagee approved by the Secretary;”;(3) by amending subsection (d)(2)(B) to read as follows:“(B) has received adequate counseling, as provided in subsection (f), by an independent third party that is not, either directly or indirectly, associated with or compensated by a party involved in—“(i) originating or servicing the mortgage;“(ii) funding the loan underlying the mortgage; or“(iii) the sale of annuities, investments, long-term care insurance, or any other type of financial or insurance product;”;(4) in subsection (f)—(A) by striking “(f) Information Services for Mortgagors.—” and inserting “(f) Counseling Services and Information for Mortgagors.—”; and(B) by amending the matter preceding paragraph (1) to read as follows: “The Secretary shall provide or cause to be provided adequate counseling for the mortgagor, as described in subsection (d)(2)(B). Such counseling shall be provided by counselors that meet qualification standards and follow uniform counseling protocols. The qualification standards and counseling protocols shall be established by the Secretary within 12 months of the date of enactment of the Building American Homeownership Act of 2008. The protocols shall require a qualified counselor to discuss with each mortgagor information which shall include—”(5) in subsection (g), by striking “established under section 203(b)(2)” and all that follows through “located” and inserting “limitation established under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act for a 1-family residence”;(6) by striking subsection (l);(7) by redesignating subsection (m) as subsection (l);(8) by amending subsection (l), as so redesignated, to read as follows:“(l) Funding for Counseling.—The Secretary may use a portion of the mortgage insurance premiums collected under the program under this section to adequately fund the counseling and disclosure activities required under subsection (f), including counseling for those homeowners who elect not to take out a home equity conversion mortgage, provided that the use of such funds is based upon accepted actuarial principles.”; and(9) by adding at the end the following new subsection:“(m) Authority To Insure Home Purchase Mortgage.—“(1) In general.—Notwithstanding any other provision of this section, the Secretary may insure, upon application by a mortgagee, a home equity conversion mortgage upon such terms and conditions as the Secretary may prescribe, when the home equity conversion mortgage will be used to purchase 122 STAT. 2837 a 1- to 4-family dwelling unit, one unit of which the mortgagor will occupy as a primary residence, and to provide for any future payments to the mortgagor, based on available equity, as authorized under subsection (d)(9).“(2) Limitation on principal obligation.—A home equity conversion mortgage insured pursuant to paragraph (1) shall involve a principal obligation that does not exceed the dollar amount limitation determined under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act for a 1-family residence.“(n) Requirements on Mortgage Originators.—“(1) In general.—The mortgagee and any other party that participates in the origination of a mortgage to be insured under this section shall—“(A) not participate in, be associated with, or employ any party that participates in or is associated with any other financial or insurance activity; or“(B) demonstrate to the Secretary that the mortgagee or other party maintains, or will maintain, firewalls and other safeguards designed to ensure that—“(i) individuals participating in the origination of the mortgage shall have no involvement with, or incentive to provide the mortgagor with, any other financial or insurance product; and“(ii) the mortgagor shall not be required, directly or indirectly, as a condition of obtaining a mortgage under this section, to purchase any other financial or insurance product.“(2) Approval of other parties.—All parties that participate in the origination of a mortgage to be insured under this section shall be approved by the Secretary.“(o) Prohibition Against Requirements To Purchase Additional Products.—The mortgagor or any other party shall not be required by the mortgagee or any other party to purchase an insurance, annuity, or other similar product as a requirement or condition of eligibility for insurance under subsection (c), except for title insurance, hazard, flood, or other peril insurance, or other such products that are customary and normal under subsection (c), as determined by the Secretary.“(p) Study to Determine Consumer Protections and Underwriting Standards.—The Secretary shall conduct a study to examine and determine appropriate consumer protections and underwriting standards to ensure that the purchase of products referred to in subsection (o) is appropriate for the consumer. In conducting such study, the Secretary shall consult with consumer advocates (including recognized experts in consumer protection), industry representatives, representatives of counseling organizations, and other interested parties.”.(b) Mortgages for Cooperatives.—Subsection (b) of section 255 of the National Housing Act (12 U.S.C. 1715z–20(b)) is amended—(1) in paragraph (4)—(A) by inserting “a first or subordinate mortgage or lien” before “on all stock”;(B) by inserting “unit” after “dwelling”; and(C) by inserting “a first mortgage or first lien” before “on a leasehold”; and122 STAT. 2838(2) in paragraph (5), by inserting “a first or subordinate lien on” before “all stock”.(c) Limitation on Origination Fees.—Section 255 of the National Housing Act (12 U.S.C. 1715z–20), as amended by the preceding provisions of this section, is further amended by adding at the end the following new subsection:“(r) Limitation on Origination Fees.—The Secretary shall establish limits on the origination fee that may be charged to a mortgagor under a mortgage insured under this section, which limitations shall—“(1) be equal to 2.0 percent of the maximum claim amount of the mortgage, up to a maximum claim amount of $200,000 plus 1 percent of any portion of the maximum claim amount that is greater than $200,000, unless adjusted thereafter on the basis of an analysis of—“(A) the costs to mortgagors; and“(B) the impact on the reverse mortgage market;“(2) be subject to a minimum allowable amount;“(3) provide that the origination fee may be fully financed with the mortgage;“(4) include any fees paid to correspondent mortgagees approved by the Secretary;“(5) have the same effective date as subsection (m)(2) regarding the limitation on principal obligation; and“(6) be subject to a maximum origination fee of $6,000, except that such maximum limit shall be adjusted in accordance with the annual percentage increase in the Consumer Price Index of the Bureau of Labor Statistics of the Department of Labor in increments of $500 only when the percentage increase in such index, when applied to the maximum origination fee, produces dollar increases that exceed $500.”.(d) Study Regarding Program Costs and Credit Availability.—(1) In general.—The Comptroller General of the United States shall conduct a study regarding the costs and availability of credit under the home equity conversion mortgages for elderly homeowners program under section 255 of the National Housing Act (12 U.S.C. 1715z–20) (in this subsection referred to as the “program”).(2) Purpose.—The purpose of the study required under paragraph (1) is to help Congress analyze and determine the effects of limiting the amounts of the costs or fees under the program from the amounts charged under the program as of the date of the enactment of this title.(3) Content of report.—The study required under paragraph (1) should focus on—(A) the cost to mortgagors of participating in the program;(B) the financial soundness of the program;(C) the availability of credit under the program; and(D) the costs to elderly homeowners participating in the program, including—(i) mortgage insurance premiums charged under the program;(ii) up-front fees charged under the program; and(iii) margin rates charged under the program.122 STAT. 2839(4) Timing of report.—Not later than 12 months after the date of the enactment of this title, the Comptroller General shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives setting forth the results and conclusions of the study required under paragraph (1).