Vote Smart's Synopsis:

Vote to adopt an amendment to S Amdt 3739 to S 3217 that requires the federal government to either terminate the conservatorship for the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac") within 24 or 30 months if the entities are deemed financially viable, or otherwise appoint the Federal Housing Finance Agency as receiver, establishing additional regulations on such entities.

Highlights:

• Requires the Director of the Federal Housing Finance Agency to determine if Fannie Mae and Freddie Mac are financially viable 24 months after the date of enactment (Sec. 1313).

• Requires the Director, upon determining that Fannie Mae or Freddie Mac are financially viable after 24 months, to take "all actions necessary" to terminate the conservatorship for such enterprise (Sec. 1313).

• Requires the Director, upon determining that Fannie Mae or Freddie Mac are not financially viable after 24 months, to appoint the Federal Housing Finance Agency as receiver and carry out such receivership (Sec. 1313).

• Authorizes the Director to postpone the aforementioned 24 month deadline to 30 months if the Director determines that financial markets would be adversely affected without the extension (Sec. 1313).

• Requires the receipts and disbursements, including administrative expenses, of Fannie Mae and Freddie Mac be counted as new budget authority, outlays, receipts, deficit, or surplus for the purposes of the following (Sec. 1341):
• Budget of the U.S. Government, as submitted by the President;
• Congressional budget;
• Statutory Pay-As-You-Go Act of 2010; and
• Balanced Budget and Emergency Deficit Control Act of 1985.

• Requires the face value of obligations issued by Fannie Mae and Freddie Mac be treated as issued by the U.S. Government, thereby subjecting both entities to the public debt limit (Sec. 1343).

• Requires the public debt limit be increased by the face value of obligations issued by Fannie Mae and Freddie Mac on April 15, 2010, and requires such increase be repealed once Fannie Mae and Freddie Mac no longer have an agreement with the Secretary of the Treasury for the purchase of obligations and securities (Sec. 1343).

• Prohibits Fannie Mae and Freddie Mac from purchasing any mortgage asset, unless the mortgagor has paid not less than the following (Sec. 1314):
• For mortgages purchased during the 12 month period following the 24 or 30 month period in which the Director must determine if the Fannie Mae and Freddie Mac are financially viable, 5 percent of the appraised value of the property;
• For mortgages purchased during the 12 month period following the aforementioned 12 month period, 7.5 percent of the appraised value of the property; and
• For mortgages purchased during the 12 month period following the aforementioned 12 month period, 10 percent of the appraised value of the property.

• Prohibits Fannie Mae and Freddie Mac from purchasing any mortgage asset for a property having a principle obligation that exceeds the median home price, for property of the same size, for the area in which such property is subject to the mortgage is located (Sec. 1314).

• Establishes the Office of Special Inspector General for the Conservatorship of Regulated Entities within the General Accountability Office, and establishes the position of Special Inspector General, appointed by the President and confirmed by the Senate, to oversee the Office (Sec. 1321).

• Requires the Special Inspector General to conduct, supervise, and coordinate audits and investigations of the purchase, management, and sale of assets by Fannie Mae and Freddie Mac, including by collecting and summarizing the following (Sec. 1321):
• Description of the categories of mortgage assets purchased or otherwise procured, and an explanation of the reasons why the Director of the Federal Housing Finance Agency deemed it necessary to purchase each mortgage asset;
• Listing of each institution from which mortgage assets were purchased;
• Current estimate of the total amount of mortgage assets purchased since the date of appointment of the Federal Housing Finance Agency as conservator and the profit and loss of each mortgage asset;
• Description of the categories of mortgage loans modified by Fannie Mae and Freddie Mac, and an explanation of the reasons why the Director deemed it necessary to modify such mortgage loans;
• Explanation of the risk analysis procedures in place within Fannie Mae and Freddie Mac with respect to the modification process;
• Explanation of the effect of continuing the affordable housing goals of Fannie Mae and Freddie Mac;
• Impact on any funding requested and accepted as part of the Amended and Restated Senior Preferred Stock Purchased Agreement;
• Assessment of whether the budgetary treatment of the assets and liabilities of Fannie Mae and Freddie Mac is correct;
• Explanation of the trouble assets owned by the regulated entities and acquited prior to the conservatorship; and
• Description of any changes to the structure of Fannie Mae and Freddie Mac made by the Director and an explanation of how the changes will better enable Fannie Mae and Freddie Mac to be successful during and post conservatorship.

Full Bill Text

Full Bill Text