12 2 STA T . 2 80 1 PUBLIC LA W 110 – 28 9—J UL Y3 0 , 2008 ‘ ‘ (1)LACKOF CA P AC ITY TO PAY EX I S TI NGM O R TGAGE .— ‘‘( A ) B ORRO W ER CERTIFICATION.— ‘‘( i ) I N GENERA L .— Themortga gor s ha l l p ro v i d e c er - ti f icatio n to the S ecretar y that the mortgagor has not intentionally defa u lted on the mortgage or any other de b t , and has not k no w ingly, or willfully and with actual knowledge, furnished material information known to be false for the purpose of obtaining any eligible mortgage. ‘‘(ii) P ENALTIES.— ‘‘(I) F ALSE STATEMENT.—Any certification filed pursuant to clause (i) shall contain an acknowledg- ment that any willful false statement made in such certification is punishable under section 1 0 01, of title 1 8 , U nited States C ode, by fine or imprison- ment of not more than 5 years, or both. ‘‘(II) LIA B ILITY FOR REPAYMENT.—The mort- gagor shall agree in writing that the mortgagor shall be liable to repay to the Federal H ousing Administration any direct financial benefit achieved from the reduction of indebtedness on the e x isting mortgage or mortgages on the resi- dence refinanced under this section derived from misrepresentations made in the certifications and documentation re q uired under this subparagraph, sub j ect to the discretion of the Secretary. ‘‘(B) C U RRENT BORROWER D EBT-TO-INCOME RATIO.—As of M arch 1, 2 008, the mortgagor shall have had a ratio of mortgage debt to income, taking into consideration all existing mortgages of that mortgagor at such time, greater than 3 1 percent (or such higher amount as the Board determines appropriate). ‘‘(2) D ETERMINATION OF PRINCIPAL OBLIGATION AMOUNT.— The principal obligation amount of the refinanced eligible mort- gage to be insured shall— ‘‘(A) be determined by the reasonable ability of the mortgagor to make his or her mortgage payments, as such ability is determined by the Secretary pursuant to section 203(b)( 4 ) or by any other underwriting standards estab- lished by the Board
and ‘‘(B) not exceed 9 0 percent of the appraised value of the property to which such mortgage relates. ‘‘(3) R E Q UIRED WAI V ER OF PREPAYMENT PENALTIES AND FEES.—All penalties for prepayment or refinancing of the eligible mortgage, and all fees and penalties related to default or delinquency on the eligible mortgage, shall be waived or forgiven. ‘‘(4) E XTINGUIS H MENT OF SUBORDINATE LIENS.— ‘‘(A) REQUIRED AGREEMENT.—All holders of outstanding mortgage liens on the property to which the eligible mort- gage relates shall agree to accept the proceeds of the insured loan as payment in full of all indebtedness under the eligible mortgage, and all encumbrances related to such eligible mortgage shall be removed. The Secretary may take such actions, subject to standards established by the Board under subparagraph (B), as may be necessary and appropriate to facilitate coordination and agreement Records.
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