12 U.S.C. § 4601 — Review of underwriting guidelines

in plain englishAI-generated · not legal advice

(a) Each enterprise must study its underwriting guidelines. The study must examine (1) how much the guidelines prevent or discourage buying or securitizing mortgages for mixed-use, urban-center, and mostly minority neighborhoods and for low- and moderate-income families; (2) private mortgage insurers’ standards and how much they discourage the enterprises from buying or securitizing those mortgages; and (3) the effects of standards that (A) require a down payment of 5 percent or less, (B) allow cash on hand for the down payment, and (C) approve a borrower with past delinquencies who shows a satisfactory credit history for at least the 12 months ending on the application date. (b) Within one year after October 28, 1992, each enterprise must report the study to the Secretary and the named House and Senate committees.

(a) Each enterprise must study its underwriting guidelines. The study must examine (1) how much the guidelines prevent or discourage buying or securitizing mortgages for mixed-use, urban-center, and mostly minority neighborhoods and for low- and moderate-income families; (2) private mortgage insurers’ standards and how much they discourage the enterprises from buying or securitizing those mortgages; and (3) the effects of standards that (A) require a down payment of 5 percent or less, (B) allow cash on hand for the down payment, and (C) approve a borrower with past delinquencies who shows a satisfactory credit history for at least the 12 months ending on the application date.

(b) Within one year after October 28, 1992, each enterprise must report the study to the Secretary and the named House and Senate committees. The report must include recommendations for better meeting low- and moderate-income families’ housing needs.

the actual law source: uscode.house.gov ↗public domain

(a) Study

Each of the enterprises shall conduct a study to review the underwriting guidelines of the enterprise. The studies shall examine—

(1)

the extent to which the underwriting guidelines prevent or inhibit the purchase or securitization of mortgages for housing located in mixed-use, urban center, and predominantly minority neighborhoods and for housing for low- and moderate-income families;

(2)

the standards employed by private mortgage insurers and the extent to which such standards inhibit the purchase and securitization by the enterprises of mortgages described in paragraph (1); and

(3)

the implications of implementing underwriting standards that—

(A)

establish a downpayment requirement for mortgagors of 5 percent or less;

(B)

allow the use of cash on hand as a source for downpayments; and

(C)

approve borrowers who have a credit history of delinquencies if the borrower can demonstrate a satisfactory credit history for at least the 12-month period ending on the date of the application for the mortgage.

(b) Report

Not later than the expiration of the 1-year period beginning on October 28, 1992, each enterprise shall submit to the Secretary, the Committee on Banking, Finance and Urban Affairs of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate a report regarding the study conducted by the enterprise under subsection (a). Each report shall include any recommendations of the enterprise for better meeting the housing needs of low- and moderate-income families.

Source credit: (Pub. L. 102–550, title XIII, § 1354, Oct. 28, 1992, 106 Stat. 3970.)

history & why it existsrecord from the source credit

1992Enacted · Pub. L. 102-550 · 106 Stat. 3970

A history note hasn’t been published yet. The record shows enactment by Pub. L. 102-550 on 1992-10-28.