An act to amend the Securities Exchange Act of 1934 with respect to the treatment of mortgage backed securities, to increase the authority of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, and for other purposes.
Public Law 98-440 · S. 2040 · 98th Congress · began in the Senate
Signed by Ronald Reagan (R) on Oct 3, 1984 · Housing and Community Development
Sponsor: Sen. Jake Garn (R-UT)
Cosponsors: None
Passage votes
- HouseVoice vote
- SenateUnanimous consent
Data notes
The final version of the law, as each chamber passed it. A chamber that passed it by voice vote or unanimous consent has no count. “Method not stated” means the record does not say how the chamber voted. Where the record has a member-by-member vote, the “Who voted for it” section shows who voted yea.
Summary
The Congressional Research Service’s plain-language summary of what the law does.
Secondary Mortgage Market Enhancement Act of 1983 - Title I: Securities Laws Amendments - Defines "mortgage related security" for purposes of the Securities Exchange Act of 1934.
Exempts from certain requirements and restrictions of such Act a bona fide agreement for delayed delivery (forward trading) of a mortgage related security against full payment upon delivery within 180 days (or any shorter time prescribed by the Federal Reserve Board). Declares, with respect to margin requirements, that, subject to Federal Reserve Board rules and regulations, no member of a national securities exchange, dealer, or broker shall be deemed to have extended, maintained, or otherwise arranged credit for the purchase of a security by reason of such an agreement. Declares, with respect to restrictions on borrowing and lending by members, dealers, or brokers, that, subject to Federal Reserve Board rules and regulations, no person shall be deemed to have borrowed within the ordinary course of business by reason of such an agreement.
Amends the Home Owner's Loan Act of 1933 and the Federal Credit Union Act to allow federally-chartered financial institutions, including credit unions, to invest in mortgage-related securities subject only to limitations that the appropriate regulating board might impose.
Preempts State blue sky and legal investment laws and regulations so that investment grade mortgage-related securities may be purchased by State-chartered and regulated financial institutions, insurance companies, pension funds, trustees, or other regulated entities. Permits a State to reassert limitations on investments in mortgage securities within seven years of enactment of these provisions if it finds such regulation necessary.
Title II: Secondary Mortgage Market Programs - Amends the Federal National Mortgage Association Charter Act and the Federal Home Loan Mortgage Corporation Act to require the limitation on the maximum principal obligation of a conventional mortgage, in which the FNMA or the Federal Home Loan Mortgage Corporation (FHLMC) may purchase a participating interest, to be calculated with respect to the total principal obligation of the mortgage.
Authorizes the FHLMC to purchase manufactured home loans, whether secured by personal, real, or mixed property.
Authorizes such corporations: (1) until October 1, 1987, to purchase mortgages secured by a subordinate lien against a one- to four-family dwelling; and (2) until October 1, 1985, to purchase mortgages on properties comprising five or more family dwelling units. Specifies limitations on the maximum principal obligation of the mortgages.
Permits the FHLMC to purchase mortgages insured by State agencies.
Removes existing loan-to-value limits on multifamily mortgage purchases.
Raises the limit on FNMA and FHLMC multifamily conventional mortgage purchases.
Expands the FNMA Board of Directors from 15 to 18 members.
Requires an annual Department of Housing and Urban Development (HUD) report regarding FNMA's activities.
Establishes a 45-day (with a 15-day extension) HUD approval period for FNMA requests.
Provides that the FHLMC may not guarantee mortgage-backed securities or mortgage-related securities backed by mortgages not purchased by the FHLMC.
Sets forth standards for FHLMC for issuing preferred stock.
Requires the Secretary of Housing and Urban Development to do a study on mortgage prepayment penalties and the impact on the secondary market.
Terminates the Secretary's general authority to approve issuance of all FNMA obligations on September 30, 1985.
Restricts the Secretary's approval of FNMA obligations to issuances of stock and of obligations convertible into stock.
Committees
The committees the bill was sent to, and what each did with it.
- Energy and Commerce Committee · House · referred toSubcommittee: Telecommunications and Finance Subcommittee
Banking, Housing, and Urban Affairs Committee · Senate · hearings by (full committee), markup by, reported original measure
Data notes
A committee links to its page only where it exists in the current Congress; older and renamed committees are named without a link.
Timeline
From introduction to signing, newest first: the committees, the floor and the president. 17 actions.
- Oct 3, 1984Became lawBecame law · Became Public Law No: 98-440.
- Became lawBecame law · Signed by President.
- Oct 1, 1984PresidentPresident · Presented to President.
- Sep 26, 1984Resolving differencesResolving differences · Senate agreed to the House amendments by Unanimous Consent.
- Sep 11, 1984FloorFloor · Passed House (Amended) by Voice Vote.
- Mar 1, 1984CommitteeCommittee · Referred to Housing and Insurance Subcommittee of the House Financial Services Committee
- Feb 28, 1984CommitteeCommittee · Referred to Telecommunications and Finance Subcommittee of the House Energy and Commerce Committee
- Feb 21, 1984CommitteeCommittee · Referred to House Financial Services Committee
- CommitteeCommittee · Referred to House Energy and Commerce Committee
- Feb 9, 1984FloorFloor · Passed Senate with an amendment by Voice Vote.
- FloorFloor · Senate vitiated previous passage.
- Nov 17, 1983FloorFloor · By unanimous consent the Secretary of the Senate was authorized to request the return of the official papers on S.2040 from the House.
- FloorFloor · Passed Senate without amendment by Voice Vote.
- Nov 2, 1983CommitteeCommittee · Reported original measure by Senate Banking, Housing, and Urban Affairs Committee
- IntroducedIntroduced · Introduced in the Senate
- Oct 6, 1983CommitteeCommittee · Markup by Senate Banking, Housing, and Urban Affairs Committee
- Sep 22, 1983CommitteeCommittee · Hearings by Senate Banking, Housing, and Urban Affairs Committee
Data notes
Shows the introduction, each committee and subcommittee step the source dates (referral, hearings, markup, report, discharge), and the floor, conference, presidential and became-law steps. Calendar placements, messages between the chambers, amendments and committee report numbers are not shown for laws before the 108th Congress. Two entries the source lists twice are shown once.
Official record
The bill’s full text and every action, including introduction and committee steps, are on Congress.gov. Data through Oct 7, 2026.