House Report 112-26 - EMERGENCY MORTGAGE RELIEF PROGRAM TERMINATION ACT

[House Report 112-26]
[From the U.S. Government Publishing Office]

112th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 112-26

======================================================================

EMERGENCY MORTGAGE RELIEF PROGRAM TERMINATION ACT

_______

March 7, 2011.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Bachus, from the Committee on Financial Services,
submitted the following

R E P O R T

together with

DISSENTING VIEWS

[To accompany H.R. 836]

The Committee on Financial Services, to whom was referred
the bill (H.R. 836) to rescind the unobligated funding for the
Emergency Mortgage Relief Program and to terminate the program,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Emergency Mortgage Relief Program
Termination Act''.

SEC. 2. RESCISSION OF FUNDING FOR EMERGENCY MORTGAGE RELIEF PROGRAM.

Effective on the date of the enactment of this Act, there are
rescinded and permanently canceled all unobligated balances remaining
available as of such date of enactment of the amounts made available by
section 1496(a) of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Public Law 111-203; 124 Stat. 2207; 12 U.S.C. 2706
note).

SEC. 3. TERMINATION OF EMERGENCY MORTGAGE RELIEF PROGRAM.

(a) Repeal.--Title I of the Emergency Housing Act of 1975 (12 U.S.C.
2701 et seq.), as amended by section 1496(b) of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, is hereby repealed.
(b) Treatment of Remaining Funds.--Notwithstanding the repeal under
subsection (a) of this section, any amounts made available under the
provision specified in section 2 of this Act and obligated before the
date of the enactment of this Act shall continue to be governed by the
provisions of law specified in subsection (a) of this section, as in
effect immediately before such repeal.
(c) Termination.--Upon the completion of outlays to liquidate all
amounts referred to in subsection (b) of this section and the
completion of all activities with respect to such amounts under the
provisions of law specified in subsection (a) of this section, the
Secretary of Housing and Urban Development shall terminate the
Emergency Mortgage Relief Program authorized under the provisions
specified in subsection (a).
(d) Study of Use of Program by Members of the Armed Forces, Veterans,
and Gold Star Recipients.--
(1) Study.--The Secretary of Housing and Urban Development
shall conduct a study to determine the extent of usage of the
Emergency Mortgage Relief Program authorized under the
provisions specified in subsection (a) by, and the impact of
such program on, covered homeowners.
(2) Report.--Not later than the expiration of the 90-day
period beginning on the date of the enactment of this Act, the
Secretary shall submit to the Congress a report setting forth
the results of the study under paragraph (1) and identifying
best practices, with respect to covered homeowners, that could
be applied to the Emergency Mortgage Relief Program.
(3) Covered homeowner.--For purposes of this subsection, the
term ``covered homeowner'' means a homeowner who is--
(A) a member of the Armed Forces of the United States
on active duty or the spouse or parent of such a
member;
(B) a veteran, as such term is defined in section 101
of title 38, United States Code; or
(C) eligible to receive a Gold Star lapel pin under
section 1126 of title 10, United States Code, as a
widow, parent, or next of kin of a member of the Armed
Forces person who died in a manner described in
subsection (a) of such section.

Purpose and Summary

H.R. 836 would rescind all unobligated balances made
available for the Emergency Mortgage Relief Program under
section 1496(a) of the Dodd-Frank Wall Street Reform and
Consumer Protection Act, which was signed into law on July 21,
2010, and terminate the program. The bill also calls for a
study by the Department of Housing and Urban Development (HUD)
to identify best practices for how existing mortgage assistance
programs can be applied to veterans, active duty military
personnel, and their relatives.

Background and Need for Legislation

H.R. 836 was introduced by Congressman Jeb Hensarling and
Chairman Bachus to terminate the Emergency Mortgage Relief
Program and rescind any unobligated balances remaining under
the program. The Emergency Mortgage Relief Program was created
under Section 1496 of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (P.L. 111-203). The Dodd-Frank Act
established a $1 billion Emergency Homeowner Relief Fund, to be
used to fund the Emergency Mortgage Relief Program, which
provides loans or credit advances to borrowers who cannot pay
their mortgages because of unemployment or reduction in income.
Administered by HUD, emergency mortgage relief payments may be
provided for up to twelve months and extended once for up to
twelve additional months.
Although as of February 2011, no funds have been furnished
to homeowners under the program, questions remain about the
cost, effectiveness, and benefits of the program. Under the
Administration's own projections for the program in its Fiscal
Year 2012 Budget submission, the program's weighted average
subsidy rate is 97.92, meaning that nearly 98 cents of every
dollar loaned under the program is not expected to be repaid.
Also, several concerns have been raised about the effectiveness
of the program based on the underwriting of loans to homeowners
who, by definition, lack the ability to pay because they are
unemployed. Further concerns have been raised about the benefit
to participants of a program that increases the debt of
borrowers already struggling to meet their current obligations.
Given the country's current fiscal situation, a program whose
benefits are speculative at best but where substantial taxpayer
losses are certain does not warrant funding.

Hearing

The Subcommittee on Insurance, Housing, and Community
Opportunity held a hearing on March 2, 2011 entitled
``Legislative Proposals to End Taxpayer Funding for Ineffective
Foreclosure Mitigation Programs.'' The following witnesses
testified:
The Honorable Neil M. Barofsky, Special
Inspector General for the Troubled Asset Relief Program
The Honorable David Stevens, Assistant
Secretary for Housing and Commissioner of the Federal
Housing Administration, Department of Housing and Urban
Development
The Honorable Mercedes M. Marquez, Assistant
Secretary, Community Planning and Development,
Department of Housing and Urban Development
Matthew J. Scire, Director, Financial
Markets and Community Investment, U.S. Government
Accountability Office
Katie Jones, Analyst in Housing Policy,
Congressional Research Service, Library of Congress

Committee Consideration

The Committee on Financial Services met in open session on
March 3, 2011 and ordered H.R. 836, the Emergency Mortgage
Relief Program Termination Act, as amended, favorably reported
to the House by a record vote of 33 yeas and 22 nays (Record
vote no. FC-8).

Committee Votes

Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. A
motion by Chairman Bachus to report the bill, as amended, to
the House with a favorable recommendation was agreed to by a
record vote of 33 yeas and 22 nays (Record vote no. FC-8). The
names of Members voting for and against follow:

RECORD VOTE NO. FC-8
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus..................... X ........ ......... Mr. Frank (MA)... ........ X .........
Mr. Hensarling................. X ........ ......... Ms. Waters....... ........ X .........
Mr. King (NY).................. X ........ ......... Mrs. Maloney..... ........ X .........
Mr. Royce...................... X ........ ......... Mr. Gutierrez.... ........ ........ .........
Mr. Lucas...................... X ........ ......... Ms. Velazquez.... ........ X .........
Mr. Paul....................... X ........ ......... Mr. Watt......... ........ X .........
Mr. Manzullo................... X ........ ......... Mr. Ackerman..... ........ X .........
Mr. Jones...................... X ........ ......... Mr. Sherman...... ........ X .........
Mrs. Biggert................... X ........ ......... Mr. Meeks........ ........ ........ .........
Mr. Gary G. Miller (CA)........ ........ ........ ......... Mr. Capuano...... ........ X .........
Mrs. Capito.................... X ........ ......... Mr. Hinojosa..... ........ ........ .........
Mr. Garrett.................... X ........ ......... Mr. Clay......... ........ X .........
Mr. Neugebauer................. X ........ ......... Mrs. McCarthy ........ X .........
(NY).
Mr. McHenry.................... X ........ ......... Mr. Baca......... ........ ........ .........
Mr. Campbell................... X ........ ......... Mr. Lynch........ ........ X .........
Mrs. Bachmann.................. X ........ ......... Mr. Miller (NC).. ........ X .........
Mr. Marchant................... X ........ ......... Mr. David Scott ........ X .........
(GA).
Mr. McCotter................... X ........ ......... Mr. Al Green (TX) ........ X .........
Mr. McCarthy (CA).............. X ........ ......... Mr. Cleaver...... ........ X .........
Mr. Pearce..................... X ........ ......... Ms. Moore........ ........ X .........
Mr. Posey...................... X ........ ......... Mr. Ellison...... ........ X .........
Mr. Fitzpatrick................ X ........ ......... Mr. Perlmutter... ........ X .........
Mr. Westmoreland............... X ........ ......... Mr. Donnelly..... ........ ........ .........
Mr. Luetkemeyer................ X ........ ......... Mr. Carson....... ........ X .........
Mr. Huizenga................... X ........ ......... Mr. Himes........ ........ X .........
Mr. Duffy...................... X ........ ......... Mr. Peters....... ........ X .........
Ms. Hayworth................... X ........ ......... Mr. Carney....... ........ X .........
Mr. Renacci.................... X ........ .........
Mr. Hurt....................... X ........ .........
Mr. Dold....................... X ........ .........
Mr. Schweikert................. X ........ .........
Mr. Grimm...................... X ........ .........
Mr. Canseco.................... X ........ .........
Mr. Stivers.................... X ........ .........
----------------------------------------------------------------------------------------------------------------

During consideration of H.R. 836, the following amendments
were considered:
1. An amendment offered by Mr. Grimm, no. 1a,
requiring HUD to study the usage of the Emergency
Mortgage Relief Program on members of the armed forces,
veterans, and gold star recipients, to the amendment
offered by Mr. Green, no. 1, requiring HUD, in
consultation with other agencies, to determine an
amount from the unobligated balances to provide
assistance to members of the armed forces, veterans,
and gold star recipients, was agreed to by a record
vote of 33 yeas and 22 nays (Record vote no. 7).

RECORD VOTE NO. FC-7
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus..................... X ........ ......... Mr. Frank (MA)... ........ X .........
Mr. Hensarling................. X ........ ......... Ms. Waters....... ........ X .........
Mr. King (NY).................. X ........ ......... Mrs. Maloney..... ........ X .........
Mr. Royce...................... X ........ ......... Mr. Gutierrez.... ........ ........ .........
Mr. Lucas...................... X ........ ......... Ms. Velazquez.... ........ X .........
Mr. Paul....................... X ........ ......... Mr. Watt......... ........ X .........
Mr. Manzullo................... X ........ ......... Mr. Ackerman..... ........ X .........
Mr. Jones...................... X ........ ......... Mr. Sherman...... ........ X .........
Mrs. Biggert................... X ........ ......... Mr. Meeks........ ........ ........ .........
Mr. Gary G. Miller (CA)........ ........ ........ ......... Mr. Capuano...... ........ X .........
Mrs. Capito.................... X ........ ......... Mr. Hinojosa..... ........ ........ .........
Mr. Garrett.................... X ........ ......... Mr. Clay......... ........ X .........
Mr. Neugebauer................. X ........ ......... Mrs. McCarthy ........ X .........
(NY).
Mr. McHenry.................... X ........ ......... Mr. Baca......... ........ ........ .........
Mr. Campbell................... X ........ ......... Mr. Lynch........ ........ X .........
Mrs. Bachmann.................. X ........ ......... Mr. Miller (NC).. ........ X .........
Mr. Marchant................... X ........ ......... Mr. David Scott ........ X .........
(GA).
Mr. McCotter................... X ........ ......... Mr. Al Green (TX) ........ X .........
Mr. McCarthy (CA).............. X ........ ......... Mr. Cleaver...... ........ X .........
Mr. Pearce..................... X ........ ......... Ms. Moore........ ........ X .........
Mr. Posey...................... X ........ ......... Mr. Ellison...... ........ X .........
Mr. Fitzpatrick................ X ........ ......... Mr. Perlmutter... ........ X .........
Mr. Westmoreland............... X ........ ......... Mr. Donnelly..... ........ ........ .........
Mr. Luetkemeyer................ X ........ ......... Mr. Carson....... ........ X .........
Mr. Huizenga................... X ........ ......... Mr. Himes........ ........ X .........
Mr. Duffy...................... X ........ ......... Mr. Peters....... ........ X .........
Ms. Hayworth................... X ........ ......... Mr. Carney....... ........ X .........
Mr. Renacci.................... X ........ .........
Mr. Hurt....................... X ........ .........
Mr. Dold....................... X ........ .........
Mr. Schweikert................. X ........ .........
Mr. Grimm...................... X ........ .........
Mr. Canseco.................... X ........ .........
Mr. Stivers.................... X ........ .........
----------------------------------------------------------------------------------------------------------------

2. An amendment offered by Mr. Frank, no. 2,
requiring all but $300 million of unobligated balances
to be rescinded, was not agreed to by a record vote of
22 yeas and 33 nays (Record vote no. 6).

RECORD VOTE NO. FC-6
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus..................... ........ X ......... Mr. Frank (MA)... X ........ .........
Mr. Hensarling................. ........ X ......... Ms. Waters....... X ........ .........
Mr. King (NY).................. ........ X ......... Mrs. Maloney..... X ........ .........
Mr. Royce...................... ........ X ......... Mr. Gutierrez.... ........ ........ .........
Mr. Lucas...................... ........ X ......... Ms. Velazquez.... X ........ .........
Mr. Paul....................... ........ X ......... Mr. Watt......... X ........ .........
Mr. Manzullo................... ........ X ......... Mr. Ackerman..... X ........ .........
Mr. Jones...................... ........ X ......... Mr. Sherman...... X ........ .........
Mrs. Biggert................... ........ X ......... Mr. Meeks........ ........ ........ .........
Mr. Gary G. Miller (CA)........ ........ ........ ......... Mr. Capuano...... X ........ .........
Mrs. Capito.................... ........ X ......... Mr. Hinojosa..... ........ ........ .........
Mr. Garrett.................... ........ X ......... Mr. Clay......... X ........ .........
Mr. Neugebauer................. ........ X ......... Mrs. McCarthy X ........ .........
(NY).
Mr. McHenry.................... ........ X ......... Mr. Baca......... ........ ........ .........
Mr. Campbell................... ........ X ......... Mr. Lynch........ X ........ .........
Mrs. Bachmann.................. ........ X ......... Mr. Miller (NC).. X ........ .........
Mr. Marchant................... ........ X ......... Mr. David Scott X ........ .........
(GA).
Mr. McCotter................... ........ X ......... Mr. Al Green (TX) X ........ .........
Mr. McCarthy (CA).............. ........ X ......... Mr. Cleaver...... X ........ .........
Mr. Pearce..................... ........ X ......... Ms. Moore........ X ........ .........
Mr. Posey...................... ........ X ......... Mr. Ellison...... X ........ .........
Mr. Fitzpatrick................ ........ X ......... Mr. Perlmutter... X ........ .........
Mr. Westmoreland............... ........ X ......... Mr. Donnelly..... ........ ........ .........
Mr. Luetkemeyer................ ........ X ......... Mr. Carson....... X ........ .........
Mr. Huizenga................... ........ X ......... Mr. Himes........ X ........ .........
Mr. Duffy...................... ........ X ......... Mr. Peters....... X ........ .........
Ms. Hayworth................... ........ X ......... Mr. Carney....... X ........ .........
Mr. Renacci.................... ........ X .........
Mr. Hurt....................... ........ X .........
Mr. Dold....................... ........ X .........
Mr. Schweikert................. ........ X .........
Mr. Grimm...................... ........ X .........
Mr. Canseco.................... ........ X .........
Mr. Stivers.................... ........ X .........
----------------------------------------------------------------------------------------------------------------

3. A motion to move the previous question on the
Frank amendment offered by Chairman Bachus was agreed
to by a record vote of 33 yeas and 18 nays (Record vote
no. 5).

RECORD VOTE NO. FC-5
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus..................... X ........ ......... Mr. Frank (MA)... ........ X .........
Mr. Hensarling................. X ........ ......... Ms. Waters....... ........ X .........
Mr. King (NY).................. X ........ ......... Mrs. Maloney..... ........ X .........
Mr. Royce...................... X ........ ......... Mr. Gutierrez.... ........ ........ .........
Mr. Lucas...................... X ........ ......... Ms. Velazquez.... ........ X .........
Mr. Paul....................... X ........ ......... Mr. Watt......... ........ X .........
Mr. Manzullo................... X ........ ......... Mr. Ackerman..... ........ X .........
Mr. Jones...................... X ........ ......... Mr. Sherman...... ........ X .........
Mrs. Biggert................... X ........ ......... Mr. Meeks........ ........ ........ .........
Mr. Gary G. Miller (CA)........ ........ ........ ......... Mr. Capuano...... ........ X .........
Mrs. Capito.................... X ........ ......... Mr. Hinojosa..... ........ ........ .........
Mr. Garrett.................... X ........ ......... Mr. Clay......... ........ X .........
Mr. Neugebauer................. X ........ ......... Mrs. McCarthy ........ ........ .........
(NY).
Mr. McHenry.................... X ........ ......... Mr. Baca......... ........ ........ .........
Mr. Campbell................... X ........ ......... Mr. Lynch........ ........ X .........
Mrs. Bachmann.................. X ........ ......... Mr. Miller (NC).. ........ X .........
Mr. Marchant................... X ........ ......... Mr. David Scott ........ X .........
(GA).
Mr. McCotter................... X ........ ......... Mr. Al Green (TX) ........ X .........
Mr. McCarthy (CA).............. X ........ ......... Mr. Cleaver...... ........ ........ .........
Mr. Pearce..................... X ........ ......... Ms. Moore........ ........ X .........
Mr. Posey...................... X ........ ......... Mr. Ellison...... ........ ........ .........
Mr. Fitzpatrick................ X ........ ......... Mr. Perlmutter... ........ X .........
Mr. Westmoreland............... X ........ ......... Mr. Donnelly..... ........ ........ .........
Mr. Luetkemeyer................ X ........ ......... Mr. Carson....... ........ X .........
Mr. Huizenga................... X ........ ......... Mr. Himes........ ........ ........ .........
Mr. Duffy...................... X ........ ......... Mr. Peters....... ........ X .........
Ms. Hayworth................... X ........ ......... Mr. Carney....... ........ X .........
Mr. Renacci.................... X ........ .........
Mr. Hurt....................... X ........ .........
Mr. Dold....................... X ........ .........
Mr. Schweikert................. X ........ .........
Mr. Grimm...................... X ........ .........
Mr. Canseco.................... X ........ .........
Mr. Stivers.................... X ........ .........
----------------------------------------------------------------------------------------------------------------

The following amendment was also considered by the
Committee:
An amendment offered by Mr. Green, no. 1 as amended by an
amendment offered by Mr. Grimm, no. 1a (Record vote no. 7),
requiring HUD to study the usage of the Emergency Mortgage
Relief Program on members of the armed forces, veterans, and
gold star recipients was agreed to by voice vote.

Committee Oversight Findings

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has held a hearing and
made findings that are reflected in this report.

Performance Goals and Objectives

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:
The purposes of H.R.836 are to terminate the Emergency
Mortgage Relief Program and rescind any unobligated balances
remaining under the program because its cost, its
effectiveness, and the benefits to its participants are
uncertain. Given the country's current fiscal situation, a
program whose benefits are speculative but where substantial
taxpayer losses are certain does not warrant funding.

New Budget Authority, Entitlement Authority, and Tax Expenditures

In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.

Committee Cost Estimate

The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.

Congressional Budget Office Estimates

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
March 7, 2011.
Hon. Spencer Bachus,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 836, the Emergency
Mortgage Relief Program Termination Act of 2011.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Chad Chirico.
Sincerely,
Douglas W. Elmendorf.
Enclosure.

H.R. 836--Emergency Mortgage Relief Program Termination Act of 2011

Summary: H.R. 836 would terminate the Department of Housing
and Urban Development's (HUD's) Emergency Mortgage Relief
Program (EHLP). Additionally, the bill would rescind funds that
remain available for the program as of the date of enactment.
CBO estimates that enacting the legislation would decrease
federal budget deficits by $840 million over the 2011-2012
period. Pay-as-you-go procedures apply because the legislation
would affect direct spending.
The bill contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 836 is shown in the following table.
The effects of this legislation fall within budget function 370
(commerce and housing credit).

--------------------------------------------------------------------------------------------------------------------------------------------------------
By fiscal year in millions of dollars--
------------------------------------------------------------------------------------------------------
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011-2016 2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
CHANGES IN DIRECT SPENDING

Estimated Budget Authority....................... -390 -450 0 0 0 0 0 0 0 0 0 -840 -840
Estimated Outlays................................ -390 -450 0 0 0 0 0 0 0 0 0 -840 -840
--------------------------------------------------------------------------------------------------------------------------------------------------------

Basis of estimate: The EHLP, authorized by the Dodd-Frank
Wall Street Reform and Consumer Protection Act, provides up to
$50,000 in subsidized loans to homeowners who are at least
three months delinquent on their mortgages because of the
temporary loss of employment and income. EHLP will pay all
arrearages that a homeowner has incurred and, for up to 24
months, the amount needed to lower the homeowner's contribution
to the mortgage payment to 31 percent of gross monthly income.
HUD also will allow program funds to be administered by a state
that has an existing program that provides substantially
similar assistance to homeowners.
HUD has indicated that the program will assist homeowners
in Puerto Rico and the 32 states that are not participating in
the Department of Treasury's Hardest Hit Fund program; however,
HUD has not yet awarded any EHLP funds to those states and
territory. CBO estimates that terminating the EHLP will reduce
outlays by $840 million over the 2011-2012 period.
For this estimate, CBO assumes that the legislation will be
enacted by June 2011. If the bill is enacted later in 2011, the
expected savings would be reduced as HUD is likely to make EHLP
awards under current law over the course of the next several
months.
Pay-as-you-go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays that are subject to those
pay-as-you-go procedures are shown in the following table.
(Enacting H.R. 836 would have no impact on federal revenues.)

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 836, THE EMERGENCY MORTGAGE RELIEF PROGRAM TERMINATION ACT, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON
FINANCIAL SERVICES ON MARCH 3, 2011
[By fiscal year, in millions of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2011-2016 2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
NET DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact................... -390 -450 0 0 0 0 0 0 0 0 0 -840 -840
--------------------------------------------------------------------------------------------------------------------------------------------------------

Intergovernmental and private-sector impact: The bill
contains no intergovernmental or private-sector mandates as
defined in UMRA and would impose no costs on state, local, or
tribal governments.
Estimate prepared by: Federal Costs: Chad Chirico; Impact
on State, Local, and Tribal Governments: Lisa Ramirez-Branum;
Impact on the Private Sector: Paige Piper-Bach.
Estimate approved by: Peter H. Fontaine, Assistant Director
for Budget Analysis.

Federal Mandates Statement

The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.

Advisory Committee Statement

No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.

Applicability to Legislative Branch

The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.

Earmark Identification

H.R. 836 does not contain any congressional earmarks,
limited tax benefits, or limited tariffs benefits as defined in
clause 9 of rule XXI.

Section-by-Section Analysis of the Legislation

Section 1. Short title

This section establishes the short title of the bill, the
`Emergency Mortgage Relief Program Termination Act.'

Section 2. Rescission of funding for emergency mortgage relief program

This section rescinds and permanently cancels all
unobligated balances remaining available to the Emergency
Mortgage Relief Program under Section 1496(a), Dodd-Frank Wall
Street Reform and Consumer Protection Act as of such date of
enactment.

Section 3. Termination of Emergency Mortgage Relief Program

This section repeals the Emergency Mortgage Relief Program.
Subsection (b) of this section also provides that any amounts
obligated for the Emergency Mortgage Relief Program before the
date of enactment shall continue to be governed by the
provisions of the Emergency Mortgage Relief Program that were
in effect immediately before the program's repeal.
Further, subsection (d) of this section directs the
Secretary of Housing and Urban Development to conduct a study
to determine the extent of usage of the Emergency Mortgage
Relief Program by ``covered homeowners.'' Covered homeowners
are defined as individuals who are active duty members of the
U.S. armed forces and their spouses or parents, veterans of the
U.S. armed forces, and individuals eligible to receive a Gold
Star lapel button under 10 U.S.C. 1126 as the widow, parent, or
next of kin of a fallen member of the U.S. armed forces. The
Secretary of Housing and Urban Development is then required to
submit a report to Congress including the results of that study
and identifying any best practices that could be applied to the
Emergency Mortgage Relief Program for covered homeowners within
90 days of enactment of this Act.
Finally, this section requires the Secretary of Housing and
Urban Development to terminate the Emergency Mortgage Relief
Program upon the outlay of the funds necessary to complete the
tasks referred to in subsections (b) and (d) of this section.

Changes in Existing Law Made by the Bill, as Reported

In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets):

EMERGENCY HOUSING ACT OF 1975

* * * * * * *
[TITLE I--EMERGENCY MORTGAGE RELIEF

[SHORT TITLE

[Sec. 101. This title may be cited as the ``Emergency
Homeowners' Relief Act.''

[FINDINGS AND PURPOSE

[Sec. 102. (a) The Congress finds that--
[(1) the Nation is in a severe recession and that the
sharp downturn in economic activity has driven large
numbers of workers into unemployment and has reduced
the incomes of many others;
[(2) as a result of these adverse economic conditions
the capacity of many homeowners to continue to make
mortgage payments has deteriorated and may further
deteriorate in the months ahead, leading to the
possibility of widespread mortgage foreclosures and
distress sales of homes; and
[(3) many of these homeowners could retain their
homes with temporary financial assistance until
economic conditions improve.
[(b) It is the purpose of this title to provide a standby
authority which will prevent widespread mortgage foreclosures
and distress sales of homes resulting from the temporary loss
of employment and income through a program of emergency loans
and advances and emergency mortgage relief payments to
homeowners to defray mortgage expenses.

[MORTGAGES ELIGIBLE FOR ASSISTANCE

[Sec. 103. No assistance shall be extended with respect to
any mortgage under this title unless--
[(1) the holder of the mortgage has indicated to the
mortgagor its intention to foreclose;
[(2) the mortgagor and holder of the mortgage have
certified that circumstances make it probable that
there will be a foreclosure and that the mortgagor is
in need of emergency mortgage relief as authorized by
this title;
[(3) payments under the mortgage have been delinquent
for at least three months;
[(4) the mortgagor has incurred a substantial
reduction in income as a result of involuntary
unemployment or underemployment due to adverse economic
conditions and is financially unable to make full
mortgage payments;
[(5) there is a reasonable prospect that the
mortgagor will be able to make the adjustments
necessary for a full resumption of mortgage payments;
and
[(6) the mortgaged property is the principal
residence of the mortgagor.

[LIMITS OF ASSISTANCE

[Sec. 104. (a) Assistance under this title with respect to a
mortgage which meets the requirements of section 103 may be
provided in the form of emergency mortgage relief loans and
advances of credit insured pursuant to section 105 or in the
form of emergency mortgage relief payments made by the
Secretary pursuant to section 106.
[(b) Assistance under this title on behalf of a homeowner may
be made available in an amount up to the amount of the
principal, interest, taxes, ground rents, hazard insurance, and
mortgage insurance premiums due under the homeowner's mortgage,
but such assistance shall not exceed the lesser of $250 per
month or the amount determined to be reasonably necessary to
supplement such amount as the homeowner is capable of
contributing toward such mortgage payment.
[(c) Monthly payments may be provided under this title either
with the proceeds of an insured loan or advance of credit or
with emergency mortgage relief payments for up to twelve
months, and, in accordance with criteria prescribed by the
Secretary, such monthly payments may be extended once for up to
twelve additional months. A mortgagor receiving the benefit of
mortgage relief assistance pursuant to this title shall be
required, in accordance, with criteria prescribed by the
Secretary, to report any increase in income which will permit a
reduction or termination of such assistance during this period.
[(d) Emergency loans or advances of credit made and insured
under section 105, and emergency mortgage relief payments made
under section 106, shall be repayable by the homeowner upon
such terms and conditions as the Secretary shall prescribe,
except that interest on a loan or advance of credit insured
under section 105 or emergency mortgage relief payments made
under section 106 shall not be charged at a rate which exceeds
the maximum interest rate applicable with respect to mortgages
insured pursuant to section 203(b) of the National Housing Act.
[(e) The Secretary may provide for the deferral of the
commencement of the repayment of a loan or advance insured
under section 105 or emergency mortgage relief payments made
under section 106 until one year following the date of the last
disbursement of the proceeds of the loan or advance or payments
or for such longer period as the Secretary determines would
further the purpose of this title. The Secretary shall by
regulation require such security for the repayment of insured
loans or advances of credit or emergency mortgage relief
payments as he deems appropriate and may require that such
repayment be secured by a lien on the mortgaged property.

[EMERGENCY MORTGAGE RELIEF LOANS AND ADVANCES

[Sec. 105. (a) The Secretary is authorized, upon such terms
and conditions as the Secretary may prescribe, to insure banks,
trust companies, finance companies, mortgage companies, savings
and loan associations, insurance companies, credit unions, and
such other financial institutions, which the Secretary finds to
be qualified by experience and facilities and approves as
eligible for insurance, against losses which they may sustain
as a result of emergency loans or advances of credit made in
accordance with the provisons of section 104 and this section
with respect to mortgages eligible for assistance under this
title.
[(b) The Secretary is authorized to fix a premium charge or
charges for the insurance granted under this section, but in
the case of any loan or advance credit, such charge or charges
shall not exceed an amount equivalent to one-half of 1 per
centum per annum of the principal obligation of such loan or
advance of credit outstanding at any time.
[(c) The Secretary is authorized and empowered to waive
compliance with any rule or regulation prescribed by the
Secretary for the purposes of this section if, in the
Secretary's judgment, the enforcement of such rule or
regulation would impose an injustice upon an insured lending
institution which has substantially complied with such
regulations in good faith. Any payment for loss made to an
insured financial institution under this section shall be final
and incontestable after two years from the date the claim was
certified for payment by the Secretary, in the absence of fraud
or misrepresentation on the part of such institution unless a
demand for repurchase of the obligation shall have been made on
behalf of the United States prior to the expiration of such
two-year period. The Secretary is authorized to transfer to any
financial institution approved for insurance under this title
any insurance in connection with any loan which may be sold to
it by another insured financial institution.
[(d) The aggregate amount of loans and advances insured under
this section and emergency mortgage relief payments made under
section 106 shall not exceed $3,000,000,000.
[(e) The Secretary shall establish underwriting guidelines or
procedures to allocate amounts made available for loans and
advances insured under this section and for emergency relief
payments made under section 106 based on the likelihood that a
mortgagor will be able to resume mortgage payments, pursuant to
the requirement under section 103(5).

[EMERGENCY MORTGAGE RELIEF PAYMENTS

[Sec. 106. (a) In the case of any mortgagee which would
otherwise be eligible to participate in the program authorized
under section 105 but does not qualify for an advance or
advances as authorized by section 113 of this title or under
section 10, 10b, or 11 of the Federal Home Loan Bank Act or
otherwise elects not to participate in the program authorized
under section 105, the Secretary is authorized to make
repayable emergency mortgage relief payments directly to such
mortgagee on behalf of homeowners whose mortgages are held by
such financial institution and who are delinquent in their
mortgage payments.
[(b) Emergency mortgage relief payments shall be made under
this section only with respect to a mortgage which meets the
requirements of section 103 and only on such terms and
conditions as the Secretary may prescribe, subject to the
provisions of section 104.
[(c) The Secretary may make such delegations and accept such
certifications with respect to the processing of mortgage
relief payments provided under this section as he deems
appropriate to facilitate the prompt and efficient
implementation of the assistance authorized under this section.

[EMERGENCY HOMEOWNERS' RELIEF FUND

[Sec. 107. To carry out the purposes of this title, the
Secretary is authorized to establish in the Treasury of the
United States an Emergency Homeowners' Relief Fund (hereinafter
in this title referred to as the ``fund'') which shall be
available to the Secretary without fiscal year limitation--
[(1) for making payments in connection with defaulted
loans or advances of credit insured under section 105
of this title;
[(2) for making emergency mortgage relief payments
under section 106 of this title;
[(3) to pay such administrative expenses (or portion
of such expenses) of carrying out the provisions of
this title as the Secretary may deem necessary.

[AUTHORITY OF THE SECRETARY

[Sec. 108. (a) The Secretary is authorized to make such rules
and regulations as may be necessary to carry out the provisions
of this title.
[(b) Notwithstanding any other provision of law relating to
the acquisition, handling, improvement, or disposal of real or
other property by the United States, the Secretary shall have
power, for the protection of the interest of the fund
authorized under this title, to pay out of such fund all
expenses or charges in connection with the acquisition,
handling, improvement, or disposal of any property, real or
personal, acquired by the Secretary as a result of recoveries
under security, subrogation, or other rights.
[(c) In the performance of, with respect to, the functions,
powers, and duties vested in the Secretary by this title, the
Secretary shall--
[(1) have the power, notwithstanding any other
provision of law, whether before or after default, to
provide by contract or otherwise for the extinguishment
upon default of any redemption, equitable, legal, or
other right, title in any mortgage, deed, trust, or
other instrument held by or held on behalf of the
Secretary under the provisions of this title; and
[(2) have the power to foreclose on any property or
commence any action to protect or enforce any right
conferred upon the Secretary by law, contract, or other
agreement, and bid for and purchase at any foreclosure
or other sale any property in connection with which
assistance has been provided pursuant to this title. In
the event of any such acquisition, the Secretary may,
notwithstanding any other provision of law relating to
the acquisition, handling, or disposal of real property
by the United States, complete, remodel and convert,
dispose of, lease, and otherwise deal with, such
property. Notwithstanding any other provision of law,
the Secretary also shall have power to pursue to final
collection by way of compromise or otherwise all claims
acquired by him in connection with any security,
subrogation, or other rights obtained by him in
administering this title.
[(d) Coverage of Existing Programs.--The Secretary shall
allow funds to be administered by a State that has an existing
program that is determined by the Secretary to provide
substantially similar assistance to homeowners. After such
determination is made such State shall not be required to
modify such program to comply with the provisions of this
title.

[EXPIRATION DATE

[Sec. 109. No loans or advance of credit shall be insured and
no emergency mortgage relief payments made under this title
after September 30, 2011, except if such loan or advance or
such payments are made with respect to a mortgagor receiving
the benefit of a loan or advance insured, or emergency mortgage
relief payments made, under this title on such date.

[NOTIFICATION

[Sec. 110. Each Federal supervisory agency with respect to
financial institutions subject to its jurisdiction, and the
Secretary, with respect to other approved mortgagees, shall (1)
prior to October 1, 1977, take appropriate action, not
inconsistent with laws relating to the safety or soundness of
such institutions or mortgagee, as the case may be, to waive or
relax limitations pertaining to the operations of such
institutions or mortgagees with respect to mortgage
delinquencies in order to cause or encourage forebearance in
residential mortgage loan foreclosures, and (2) until one year
from the date of enactment of this title, request each such
institution or mortgagee to notify that Federal supervisory
agency, the Secretary, and the mortgagor, at least thirty days
prior to instituting foreclosure proceedings in connection with
any mortgage loan. As used in this title the term ``Federal
supervisory agency'' means the Board of Governors of the
Federal Reserve System, the Board of Directors of the Federal
Deposit Insurance Corporation, the Comptroller of the Currency,
the Federal Home Loan Bank Board, the Federal Savings and Loan
Insurance Corporation, and the National Credit Union
Administration.

[REPORTS

[Sec. 111. Within sixty days after enactment of this title
and within each sixty-day period thereafter prior to October 1,
1977, the Secretary shall make a report to the Congress on (1)
the current rate of deliquencies and foreclosures in the
housing market areas of the country which should be of
immediate concern if the purposes of this title is to be
achieved; (2) the extent of, and prospect for continuance of,
voluntary forebearance by mortgagees in such housing market
areas; (3) actions being taken by governmental agencies to
encourage forebearance by mortgages in such housing market
areas; (4) actions taken and actions likely to be taken with
respect to making assistance under this title available to
alleviate hardships resulting from any serious rates of
delinquencies and foreclosures; and (5) the current default
status and projected default trends with respect to mortgages
covering multifamily properties with special attention to
mortgages insured under the various provisions of the National
Housing Act and with recommendations on how such defaults and
prospective defaults may be cured or avoided in a manner which,
while giving weight to the financial interests of the United
States, takes into full consideration the urgent needs of the
many low- and moderate-income families that currently occupy
such multifamily properties.

[NONAPPLICABILITY OF OTHER LAWS

[Sec. 112. Notwithstanding any provision of law which limits
the nature, amount, term, form, or rate of interest, or the
nature, amount, or form of security of loans or advances of
credit, loans, or advances of credit may be made in accordance
with the provisions of this title without regard to such
provision of law.

[FEDERAL DEPOSIT INSURANCE CORPORATION ADVANCES

[Sec. 113. Notwithstanding any other provision of law, the
Federal Deposit Insurance Corporation is authorized, upon such
terms and conditions as the Corporation may prescribe, to make
such advances to any insured bank as the Corporation determines
may be necessary or appropriate to facilitate participation by
such bank in the program authorized by this title. For the
purpose of obtaining such funds as it determines are necessary
for such advances, the Corporation may borrow from the Treasury
as authorized in section 14 of the Federal Deposit Insurance
Act (12 U.S.C. 1824; 64 Stat. 890), and the Secretary of the
Treasury is authorized and directed to make loans to the
Corporation for such purpose in the same manner as loans may be
made for insurance purposes under such section, subject to the
maximum limitation on outstanding aggregate loans there
provided.]

* * * * * * *

DISSENTING VIEWS

H.R. 836, the ``Emergency Mortgage Relief Program
Termination Act'' is one of four bills being advanced by the
Majority as a coordinated assault on federal programs designed
to address the nationwide housing and foreclosure crisis. This
bill would rescind $1 billion which will soon be allocated to
states, for use as bridge loans to unemployed homeowners to
cover mortgage payments until these homeowners can find a job,
in order to avoid a foreclosure and give these borrowers a
chance to keep their homes.
This program is one of a number of complementary federal
programs that address different problems posed by our current
housing programs. The other programs that the Majority is
shutting down are the HAMP loan modification program, an FHA
refinance program that is used in conjunction with principal
mortgage reductions, and grants to local communities for
purchase and rehabilitation of foreclosed and abandoned homes,
to address blight and deterioration of neighborhoods
experiencing a high foreclosure rate. At the hearing on these
four bills, not a single witness--including the GAO and
SIGTARP, who were witnesses called by the Majority--supported
shutting down any of these four programs at this time.
A major factor in the housing crisis was private sector
lenders originating loans to borrowers that could not afford
them, with such loans often combined with predatory loan
features, such as exploding mortgage rate reset terms. As the
housing crisis hit and homeowners started to default on loans,
these same private sector lenders announced that they would
address problems through proprietary loan modifications. In
practice, there is a general consensus that these initial
efforts were woefully inadequate to address the default and
foreclosure crisis, particularly since a majority of these
modifications actually increased the payments borrowers were
required to make. Therefore, in early 2009, the Obama
Administration started to roll out the first of a number of
initiatives, using general authority under the TARP
legislation, to facilitate loan modifications and refinancings
of borrowers in or at risk of default, and in danger of
foreclosure.
Now, two years later, as some of these initiatives are
showing real results and others are just beginning to take off,
House Republicans want to shut these efforts down. They claim
that these federal programs have not helped enough homeowners.
But, their answer to the criticism that not enough homeowners
have been helped by these programs . . . is to stop them from
helping anyone else in the future. Their answer is to eliminate
federal assistance that helps keep people in their homes and to
eliminate the nationwide loan modification standards that go
with them. Their answer is to turn over resolution of the
foreclosure crisis to the very entities that created the bad
loans in the first place and failed to achieve meaningful loan
modifications in the period before these government programs
were put in place. The result would lead inevitably to a
worsening of the foreclosure crisis, dampened home prices, and
economic instability.
This bill would rescind and permanently cancel all
unobligated balances pursuant to the $1 billion in loans to
unemployed homeowners that was authorized and funded in last
year's Dodd-Frank financial reform bill. The bill would also
repeal the underlying authorization for such loans. The effect
would be to kill the program before any funds are made
available to unemployed homeowners.
A reasonable projection is that the program will help from
30,000 to 50,000 distressed homeowners. Under the program, $1
billion is to be made available by HUD for loans to homeowners
who are delinquent on their loans as a result of unemployment
or medical condition. The purpose is to provide assistance with
mortgage payments until the homeowner can find a job or is
otherwise able to resume mortgage payments. The program fills
an important gap, because HAMP and other private loan
modification programs are designed to address a structural
mismatch between a borrower's income and mortgage payments,
while this program is designed to address what is hoped to be a
temporary loss of income.
The program provides a zero interest bridge loan during the
period when the borrower can't make payments. the amount of the
loan is designed to reduce monthly payments to an affordable
31% of a borrower's current income. When a borrower is able
resume payments on the mortgage, the borrower must begin
repayment of the bridge loan. The program is being implemented
through a provision which creates incentives for timely payment
on the loan, in the form of a reduction of 20% of the loan
balance each year that the borrower is current on that loan.
Grants will be distributed by formula to 32 states. These
are the states that have not separately received funding under
$7.6 billion in cumulative TARP funds that Treasury has made
available over the last year under its ``Hardest Hit Fund'' to
the 18 states that have been hardest hit by the housing and
foreclosure crisis. The $1 billion will thus fill a gap by
providing assistance to those states who did not receive
Hardest Hit Funds, and therefore recission of these funds would
create a significant imbalance in the allocation of such
assistance nationwide.
While the Emergency Mortgage Relief and Hardest Hit
programs are not identical, they are substantially similar. The
major difference is that Emergency Mortgage Relief is limited
only to bridge loans to homeowners who are unemployed or have a
medical problem creating payment programs, while the Hardest
Hit program is used for this purpose, but also allows other
flexible uses of funds at the option of the state, such as for
principal reduction payments.
The Emergency Mortgage Relief program is very similar to a
program that has been administered for many years by the State
of Pennsylvania, the ``Homeowners Emergency Mortgage Assistance
Program,'' also known as entitled HEMAP. Since its inception in
1983, 45,316 homeowners in Pennsylvania have been assisted, at
an average loan amount of $11,000 per borrower. Like the
federal program being proposed to be abolished by this bill,
the HEMAP program provides loans to homeowners having mortgage
payment problems because of unemployment, with the goal having
the borrower resume payments when they are able to do so. 85%
of HEMAP recipients have been able to keep their home as a
result of such assistance.
Proponents of shutting down the program have argued that
the program will have a low cost recovery rate and therefore a
high subsidy rate. It is true that repayment terms are somewhat
more flexible than under either the Pennsylvania HEMAP program
or some of the state Hardest Hit Fund programs--principally
because of the incentive that HUD is offering under the program
of forgiving principal over time on these loans based on a
homeowner making on-time mortgage payments. However, this
feature is designed to increase both the sustainability of
homeowners being able to make the underlying mortgage payments
and the behavioral incentive for a borrower to make such on-
time payments.
Shutting down this program prematurely would eliminate an
important tool for 32 states to help unemployed homeowners keep
their home long enough to find another job and ultimately
resume mortgage payments and hang on to their home. There is no
comparable private sector option for these unemployed
borrowers. Enactment of this bill will therefore increase
foreclosures and put more strain on our nations' housing
markets.

Gregory W. Meeks.
Emanuel Cleaver.
Gwen Moore.
Stephen F. Lynch.
Ruben Hinojosa.
Nydia M. Velazquez.
Barney Frank.
Carolyn B. Maloney.
Luis V. Gutierrez.
Michael E. Capuano.
Keith Ellison.
Maxine Waters.