text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Homeownership Vesting Plan Act of 
  2009''.
  
  SEC. 2. HOMEOWNERSHIP VESTING PLAN.
  
      Title II of the National Housing Act (12 U.S.C. 1707 et seq.) is 
  amended--
              (1) by redesignating section 257, as added by section 
          2124(a) of the Housing and Economic Relief Act of 2008 (12 
          U.S.C. 1715z-24), as section 258; and
              (2) by adding after section 258, as so redesignated, the 
          following new section:
  
  ``SEC. 259. HOMEOWNERSHIP VESTING PLAN.
  
      ``(a) Authority.--The Secretary shall, subject only to the absence 
  of requests for insurance under this section and the availability of 
  amounts pursuant to subsection (i)--
              ``(1) make commitments to insure and insure any mortgage 
          covering a 1- to 4-family residence that is made for the 
          purpose of paying or prepaying outstanding obligations under an 
          existing mortgage or mortgages on the residence if the mortgage 
          being insured under this section meets the requirements of this 
          section; and
              ``(2) in connection with the insurance of such mortgages--
                      ``(A) make payments under subsection (c) to 
                  servicers of eligible mortgages refinanced by such 
                  insured mortgages;
                      ``(B) make payments under (b)(4) for the 
                  extinguishment of subordinate liens on the properties 
                  subject to eligible mortgages refinance by such insured 
                  mortgages; and
                      ``(C) make loans under subsection (d) to mortgagors 
                  under such insured mortgages.
      ``(b) Eligible Mortgages.--To be eligible for insurance under this 
  section, a mortgage shall comply with all of the following 
  requirements:
              ``(1) Owner-occupied sole residence.--The residence 
          securing the mortgage insured under this section shall be 
          occupied by the mortgagor as the principal residence of the 
          mortgagor and the mortgagor shall provide a certification to 
          the originator of the insured mortgage that such residence 
          securing the mortgage is the only residence in which the 
          mortgagor has any present ownership interest.
              ``(2) Principal obligation amount.--The principal 
          obligation amount of the mortgage to be insured under this 
          section shall be equal to 97.5 percent of the current appraised 
          value of the residence securing the mortgage.
              ``(3) Required waiver of prepayment penalties and fees.--
          All penalties for prepayment or refinancing of the existing 
          senior mortgage, and all fees and penalties related to default 
          or delinquency on the existing senior mortgage, shall be waived 
          or forgiven.
              ``(4) Extinguishment of subordinate liens.--
                      ``(A) Required agreement.--All holders of existing 
                  mortgages on the property to which the eligible 
                  mortgage relates shall agree to accept the proceeds of 
                  the insured loan, and any payment pursuant to 
                  subparagraph (B), as payment in full of all 
                  indebtedness under the existing mortgage, and all 
                  encumbrances related to such existing mortgage shall be 
                  removed. The Secretary may take such actions, in 
                  accordance with the standards established pursuant to 
                  subparagraph (B), as may be necessary and appropriate 
                  to facilitate coordination and agreement between the 
                  holders of the existing senior mortgage and any 
                  existing subordinate mortgages, taking into 
                  consideration the subordinate lien status of such 
                  subordinate mortgages.
                      ``(B) Payment.--The Secretary shall provide for the 
                  payment to the holder of any existing subordinate 
                  mortgage of an amount equal to 5 cents for each dollar 
                  of the outstanding principal balance of, and accrued 
                  interest on, the outstanding mortgage.
              ``(5) Interest rate and term of mortgage.--The mortgage to 
          be insured under this section shall--
                      ``(A) bear interest at a single rate that is fixed 
                  for the entire term of the mortgage; and
                      ``(B) have a maturity of 30 years from the date of 
                  the beginning of amortization of such mortgage.
              ``(6) Underwriting standards.--The mortgage insured under 
          this section shall comply with the underwriting standards 
          applicable under the FHA Secure Program (established by 
          mortgagee letter 2007-11, issued September 5, 2007), as such 
          Program is in effect as of February 1, 2009.
              ``(7) Priority of lien for non-vested loan principal.--The 
          mortgage to be insured under this section shall provide that 
          the Secretary's lien pursuant to subsection (d)(4) on the 
          residence that is subject to the mortgage shall have superior 
          priority to the lien under the insured mortgage.
              ``(8) Requirements for existing senior mortgage being 
          refinanced.--
                      ``(A) Origination date.--The existing senior 
                  mortgage shall have been originated during the period 
                  beginning on January 1, 2003, and ending upon December 
                  31, 2007.
                      ``(B) Principal obligation.--The existing senior 
                  mortgage shall have had an original principal 
                  obligation in an amount that did not exceed the maximum 
                  dollar amount limitation in effect on February 1, 2009, 
                  under section 203(b)(2) of the National Housing Act (12 
                  U.S.C. 1709(b)(2)) for a residence of the applicable 
                  size for the area in which the residence is located.
                      ``(C) Debt-to-income ratio upon origination.--As of 
                  the time of the origination of the existing senior 
                  mortgage, the mortgagor shall have had a ratio of 
                  mortgage debt to income, taking into consideration all 
                  existing mortgages of that mortgagor at such time, 
                  exceeding 30 percent.
                      ``(D) Loan-to-value ratio.--The existing senior 
                  mortgage shall, upon origination, have involved a 
                  principal obligation (including such initial service 
                  charges, appraisal, inspection, and other fees as the 
                  Secretary shall approve) in an amount not exceeding 90 
                  percent of the appraised value of the property at such 
                  time.
      ``(c) Payment to Servicer of Existing Mortgage.--For each mortgage 
  insured under this section, the Secretary shall make a payment in the 
  amount of $1,000 to the servicer of the existing senior mortgage 
  refinanced by such insured mortgage.
      ``(d) Nonamortizing No-Interest Loan.--
              ``(1) In general.--In connection with each mortgage insured 
          under this section, the Secretary shall make a loan under this 
          subsection to the mortgagor, the proceeds of which shall be 
          paid by the Secretary directly to the holder of the existing 
          senior mortgage being refinanced by the mortgage insured under 
          this section. Such loan shall be in an amount equal to the 
          difference between--
                      ``(A) the amount of the outstanding principal 
                  obligation under the existing senior mortgage 
                  refinanced by such insured mortgage as of the time of 
                  the origination of such insured mortgage; and
                      ``(B) the amount of the original principal 
                  obligation of the insured mortgage.
              ``(2) Terms.--A loan under this section--
                      ``(A) shall not bear interest; and
                      ``(B) shall not require the borrower to make 
                  payments of principal, except as provided in paragraph 
                  (3).
              ``(3) Repayment.--A loan under this section shall require 
          repayment of principal only if the borrower defaults with 
          respect to the borrower's obligations under the insured 
          mortgage in connection with which such loan is made during the 
          5-year period that begins on the date that such mortgage is 
          insured, as follows:
                      ``(A) Year 1.--If any such default occurs during 
                  the period that begins on the date that such mortgage 
                  is insured and ends 1 year after such date of 
                  insurance, the Secretary shall be entitled to repayment 
                  of 100 percent of the principal amount of the loan.
                      ``(B) Year 2.--If any such default occurs during 
                  the period that begins 1 year after such date of 
                  insurance and ends 2 years after such date of 
                  insurance, the Secretary shall be entitled to 80 
                  percent of such principal amount.
                      ``(C) Year 3.--If any such default occurs during 
                  the period that begins 2 years after such date of 
                  insurance and ends 3 years after such date of 
                  insurance, the Secretary shall be entitled to 60 
                  percent of such principal amount.
                      ``(D) Year 4.--If any such default occurs during 
                  the period that begins 3 years after such date of 
                  insurance and ends 4 years after such date of 
                  insurance, the Secretary shall be entitled to 40 
                  percent of such principal amount.
                      ``(E) Year 5.--If any such default occurs during 
                  the period that begins 4 years after such date of 
                  insurance and ends 5 years after such date of 
                  insurance, the Secretary shall be entitled to 20 
                  percent of such principal amount.
                      ``(F) After year 5.--If any such default occurs 
                  after the expiration of the 5-year period that begins 
                  on such date of insurance, the Secretary shall not be 
                  entitled to repayment of any portion of such principal 
                  amount.
              ``(4) Lien.--Repayment of the portion of the principal 
          amount of a loan made under this subsection that is required 
          under paragraph (3) shall be secured by a lien on the residence 
          that is subject to the mortgage insured under this section in 
          connection with which such loan was made, that is held by the 
          Secretary, and which shall have priority over all other liens 
          on such residence.
      ``(e) Premiums.--Notwithstanding any other provision of this Act:
              ``(1) In general.--For each eligible mortgage insured under 
          this section, the Secretary shall establish and collect an 
          annual premium in an amount equal to not less than 0.55 percent 
          of the amount of the remaining insured principal balance of the 
          mortgage and not more than 0.75 percent of such remaining 
          insured principal balance, as determined according to a 
          schedule established by the Secretary that assigns such annual 
          premiums based upon the credit risk of the mortgage.
              ``(2) Reduction or termination during mortgage term.--
          Notwithstanding paragraph (1), the Secretary may provide that 
          the annual premiums charged for eligible mortgages insured 
          under this section are reduced over the term of the mortgage or 
          that the collection of such premiums is discontinued at some 
          time during the term of the mortgage, in a manner that is 
          consistent with policies for such reduction or discontinuation 
          of annual premiums charged for mortgages in accordance with 
          section 203(c).
      ``(f) Sunset.--The Secretary may not enter into any new commitment 
  to insure any refinanced eligible mortgage, or newly insure any 
  refinanced eligible mortgage, pursuant to this section after the 
  expiration of the 3-year period beginning upon the date of the 
  enactment of this Act.
      ``(g) Definitions.--For purposes of this section, the following 
  definitions shall apply:
              ``(1) Eligible mortgage.--The term `eligible mortgage' 
          means a mortgage that meets the requirement under subsection 
          (b) for insurance under this section.
              ``(2) Existing mortgage.--The term `existing mortgage' 
          means, with respect to a mortgage insured or to be insured 
          under this section, a mortgage on the same residence that is to 
          be subject to such mortgage insured under this section that is 
          to be extinguished pursuant to such insured mortgage.
              ``(3) Existing senior mortgage.--The term `existing senior 
          mortgage' means, with respect to a mortgage insured or to be 
          insured under this section, the existing mortgage that has 
          superior priority.
              ``(4) Existing subordinate mortgage.--The term `existing 
          subordinate mortgage' means, with respect to a mortgage insured 
          or to be insured under this section, an existing mortgage that 
          has subordinate priority to the existing senior mortgage.
      ``(h) Authorization of Appropriations.--There is authorized to be 
  appropriated for fiscal years 2009 through 2012--
              ``(1) $2,000,000,000 for payments under subsection (c) to 
          servicers of eligible mortgages refinanced by such insured 
          mortgages;
              ``(2) $1,500,000,000 for payments under (b)(4) for the 
          extinguishment of subordinate liens on the properties subject 
          to eligible mortgages refinanced by such insured mortgages; and
              ``(3) $90,000,000,000 for the costs (as such term is 
          defined in section 502 of the Federal Credit Reform Act of 1974 
          (2 U.S.C. 661a)) of loans under subsection (d) to mortgagors 
          under such insured mortgages.''.
  
  SEC. 3. SERVICER SAFE HARBOR.
  
      (a) Safe Harbor.--
              (1) Loan modifications and workout plans.--Notwithstanding 
          any other provision of law, and notwithstanding any investment 
          contract between a servicer and a securitization vehicle or 
          investor, a servicer that acts consistent with the duty set 
          forth in section 129A(a) of Truth in Lending Act (15 U.S.C. 
          1639a) shall not be liable for entering into a loan 
          modification or workout plan with respect to any such mortgage 
          that meets all of the criteria set forth in paragraph (2)(B) 
          to--
                      (A) any person, based on that person's ownership of 
                  a residential mortgage loan or any interest in a pool 
                  of residential mortgage loans or in securities that 
                  distribute payments out of the principal, interest and 
                  other payments in loans on the pool;
                      (B) any person who is obligated pursuant to a 
                  derivatives instrument to make payments determined in 
                  reference to any loan or any interest referred to in 
                  subparagraph (A); or
                      (C) any person that insures any loan or any 
                  interest referred to in subparagraph (A) under any law 
                  or regulation of the United States or any law or 
                  regulation of any State or political subdivision of any 
                  State.
              (2) Ability to modify mortgages.--
                      (A) Ability.--Notwithstanding any other provision 
                  of law, and notwithstanding any investment contract 
                  between a servicer and a securitization vehicle or 
                  investor, a servicer--
                              (i) shall not be limited in the ability to 
                          modify mortgages, the number of mortgages that 
                          can be modified, the frequency of loan 
                          modifications, or the range of permissible 
                          modifications; and
                              (ii) shall not be obligated to repurchase 
                          loans from or otherwise make payments to the 
                          securitization vehicle on account of a 
                          modification, workout, or other loss mitigation 
                          plan for a residential mortgage or a class of 
                          residential mortgages that constitute a part or 
                          all of the mortgages in the securitization 
                          vehicle,
                  if any mortgage so modified meets all of the criteria 
                  set forth in subparagraph (B).
                      (B) Criteria.--The criteria under this subparagraph 
                  with respect to a mortgage are as follows:
                              (i) Default on the payment of such mortgage 
                          has occurred or is reasonably foreseeable.
                              (ii) The property securing such mortgage is 
                          occupied by the mortgagor of such mortgage.
                              (iii) The servicer reasonably and in good 
                          faith believes that the anticipated recovery on 
                          the principal outstanding obligation of the 
                          mortgage under the particular modification or 
                          workout plan or other loss mitigation action 
                          will exceed, on a net present value basis, the 
                          anticipated recovery on the principal 
                          outstanding obligation of the mortgage to be 
                          realized through foreclosure.
              (3) Applicability.--This subsection shall apply only with 
          respect to modifications, workouts, and other loss mitigation 
          plans initiated before January 1, 2012.
      (b) Reporting.--Each servicer that engages in loan modifications or 
  workout plans subject to the safe harbor in subsection (a) shall report 
  to the Secretary on a regular basis regarding the extent, scope and 
  results of the servicer's modification activities. The Secretary shall 
  prescribe regulations specifying the form, content, and timing of such 
  reports.
      (c) Definition of Securitization Vehicles.--For purposes of this 
  section, the term ``securitization vehicle'' means a trust, 
  corporation, partnership, limited liability entity, special purpose 
  entity, or other structure that--
              (1) is the issuer, or is created by the issuer, of mortgage 
          pass-through certificates, participation certificates, 
          mortgage-backed securities, or other similar securities backed 
          by a pool of assets that includes residential mortgage loans; 
          and
              (2) holds such mortgages.
target: Home Ownership Vesting Plan Act of 2009 - Amends the National Housing Act to direct the Secretary of Housing and Urban Development (HUD) to: (1) insure any mortgage covering a one- to four-family principal and sole residence that is made for the purpose of paying or prepaying outstanding obligations (refinancing) under an existing mortgage or mortgages meeting specified requirements; (2) pay $1,000 to the servicer of the existing senior mortgage refinanced by each mortgage insured under this Act; and (3) make a nonamortizing no-interest loan to the mortgagor, the proceeds of which shall be paid by the Secretary directly to the holder of the existing senior mortgage being refinanced.
  
  Sets forth a schedule for repayment of principal only if the borrower defaults.
  
  
  
  Shields a servicer from liability for entering into a loan modification or workout plan with respect to any such mortgage if the servicer acts consistent with the fiduciary duty of servicers of pooled residential mortgages under the Truth in Lending Act.
feat_title: To reduce foreclosures of residential mortgages.