[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3455 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 3455

 To amend the Real Estate Settlement Procedures Act of 1974 to provide 
for homeowners to recover treble damages from mortgage escrow servicers 
  for failures by such servicers to make timely payments from escrow 
  accounts for homeowners insurance, taxes, or other charges, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 27, 2005

 Mr. Andrews introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To amend the Real Estate Settlement Procedures Act of 1974 to provide 
for homeowners to recover treble damages from mortgage escrow servicers 
  for failures by such servicers to make timely payments from escrow 
  accounts for homeowners insurance, taxes, or other charges, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Homeowners' Escrow Payments 
Assurance Act''.

SEC. 2. TREBLE DAMAGES FOR FAILURE TO MAKE PAYMENTS FROM ESCROW 
              ACCOUNT.

    Section 6(f) of the Real Estate Settlement Procedures Act of 1974 
(12 U.S.C. 2605(f)) is amended--
            (1) in paragraph (1), by striking subparagraph (A) and 
        inserting the following new subparagraph:
                    ``(A)(i) except as provided in clause (ii), any 
                actual damages to the borrower as a result of the 
                failure; or
                    ``(ii) in the case of an action for a failure to 
                comply with the requirements of subsection (g), 3 times 
                any such actual damages; and''; and
            (2) in paragraph (2), by striking subparagraph (A) and 
        inserting the following new subparagraph:
                    ``(A)(i) except as provided in clause (ii), any 
                actual damages to each of the borrowers in the class as 
                a result of the failure; or
                    ``(ii) in the case of an action for a failure to 
                comply with the requirements of subsection (g), 3 times 
                any such actual damages; and''.

SEC. 3. FINE FOR FAILURE TO MAKE PAYMENTS FROM ESCROW ACCOUNT RESULTING 
              IN LAPSE IN INSURANCE COVERAGE.

    Section 6 of the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2605) is amended--
            (1) by redesignating subsections (h) through (j) as 
        subsections (i) through (k), respectively; and
            (2) by inserting after subsection (g) the following new 
        subsection:
    ``(h) Fine for Failure to Make Payments From Escrow Account 
Resulting in Lapse in Insurance Coverage.--
            ``(1) In general.--If the servicer of a federally related 
        mortgage loan collects payments from the borrower for deposit 
        into an escrow account for the purpose of assuring payment of 
        insurance premiums and a failure by the servicer to make timely 
        payments from the escrow account for such insurance premiums 
        results in a lapse in such insurance coverage for any period of 
        time, the Secretary shall assess against the servicer a civil 
        penalty of $1,000 for each full or partial day of such lapse.
            ``(2) Use of amounts.--The amounts collected by the 
        Secretary from fines under this section shall be available to 
        the Secretary, to the extent provided in appropriation Acts, as 
        follows:
                    ``(A) Downpayment assistance.--90 percent of any 
                such amounts shall be available only for the Secretary 
                to carry out a program to provide assistance to low-
                income families (as such term is defined in section 
                3(b) of the United States Housing Act of 1937 (42 
                U.S.C. 1437a(b)) for use as downpayments for the 
                acquisition of principal residences.
                    ``(B) Consumer advocacy assistance.--10 percent of 
                any such amounts shall be available only for the 
                Secretary to provide assistance for nonprofit 
                organizations that engage in legal advocacy activities 
                relating to protection of consumer rights, which shall 
                be selected by the Secretary in consultation with the 
                Attorney General.''.
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