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Title 12, Banks and BankingRelease 119-110

§4601 Review of Underwriting Guidelines

Title 12 › CHAPTER 46 — GOVERNMENT SPONSORED ENTERPRISES › SUBCHAPTER I — SUPERVISION AND REGULATION OF ENTERPRISES › Part C — Miscellaneous Provisions › § 4601

Last updated Sep 22, 2026|Official source

Summary

Each enterprise must study its underwriting rules. The study must check whether those rules stop mortgages for mixed-use, urban-center, or mostly minority neighborhoods, and for low- and moderate-income families, from being bought or securitized. It must also look at private mortgage insurers' standards and consider three changes: downpayments of 5% or less, using cash-on-hand for downpayments, and approving borrowers with past delinquencies if they show a satisfactory 12-month credit record. Each enterprise must send a report on the study, with any recommendations to better serve low- and moderate-income families, to the Secretary, the House Committee on Banking, Finance and Urban Affairs, and the Senate Committee on Banking, Housing, and Urban Affairs by October 28, 1993.

Full Legal Text

Title 12, §4601

Banks and Banking, Source: USLM XML via OLRC

(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.

Legislative History

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Change of Name

Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Committee on Banking and Financial Services of House of Representatives by section 1(a) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Congress. Committee on Banking and Financial Services of House of Representatives abolished and replaced by Committee on Financial Services of House of Representatives, and jurisdiction over matters relating to securities and exchanges and insurance generally transferred from Committee on Energy and Commerce of House of Representatives by House Resolution No. 5, One Hundred Seventh Congress, Jan. 3, 2001.

Reference

Citations & Metadata

Citation

12 U.S.C. § 4601

Title 12, Banks and Banking

Last Updated

Sep 22, 2026

Release point: 119-110