H.R. 3206 — Protecting America's Property Rights Act

This section adds to the prudential management standards that the Federal Housing Finance Agency (FHFA) Director must establish for Fannie Mae and Freddie Mac (the Enterprises)—government-sponsored enterprises that purchase mortgages to provide market liquidity—a new standard (12) requiring management of risks from liens, encumbrances, title defects, or unenforceable liens on mortgaged property using third-party products regulated by state insurance authorities (as defined in 15 U.S.C. 6809(11)) or state regulators (as defined in 12 U.S.C. 5481(22)). (1) It requires the Director, when establishing minimum capital levels under 12 U.S.C. 4612, to impose an additional capital requirement of 1.00% of the unpaid principal balance for any Enterprise-purchased mortgage that does not meet the new standard. (Thus, Enterprises face a financial incentive to use compliant title protection products.) (2) It directs the Director to issue regulations and guidance within 180 days of enactment to ensure compliance, including verification that products are appropriately regulated. (3) It defines "Enterprises" (as in 12 U.S.C. 4502(10)) and "Director" (as in 12 U.S.C. 4502(9)).