110 HR 3012 IH: Expanding Housing Opportunities Through Education and Counseling Act
U.S. House of Representatives
2007-07-12
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.Short title; table of contents
(a)This Act may be cited as the Fair Mortgage Practices Act of 2007
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definition.
Title I—Licensing System of Residential Mortgage Loan Originators
Sec. 101. Purposes and methods for establishing a mortgage licensing system.
Sec. 102. Definitions.
Sec. 103. License or registration required.
Sec. 104. License and registration application and issuance.
Sec. 105. Standards for license renewal.
Sec. 106. System of registration administration by Federal banking agencies.
Sec. 107. Secretary of housing and urban development backup authority to establish a loan originator licensing system.
Sec. 108. System for State-licensed loan originators.
Sec. 109. Fees.
Sec. 110. Mortgage professional background checks.
Sec. 111. Confidentiality of information.
Sec. 112. Liability provisions.
Title II—Simplified Disclosures
Sec. 201. Basic mortgage facts.
Title III—Housing Counseling
Subtitle A—Consumer counseling
Sec. 301. Consumer counseling requirements.
Subtitle B—Expanded housing counseling opportunities
Sec. 311. Short title.
Sec. 312. Establishment of Office of Housing Counseling.
Sec. 313. Counseling procedures.
Sec. 314. Grants for housing counseling assistance.
Sec. 315. Requirements to use HUD-certified counselors under HUD programs.
Sec. 316. Study of defaults and foreclosures.
Sec. 317. Definitions for counseling-related programs.
Sec. 318. Updating and simplification of mortgage information booklet.
Title IV—Prohibition on Abusive Practices
Subtitle A—Mortgage servicing
Sec. 401. Escrow and impound accounts relating to certain consumer credit transactions.
Sec. 402. Disclosure notice required for consumers who opt out of escrow services.
Subtitle B—Nontraditional mortgage provisions
Sec. 411. Prepayment penalties.
Sec. 412. Ability to repay.
Title V—Mortgage Fraud
Sec. 501. Authorization of appropriations for mortgage fraud prevention, investigation, and prosecution.
Title VI—Appraisal Activities
Sec. 601. Property appraisal requirements.
Sec. 602. Amendments relating to appraisal subcommittee of FIEC, appraiser independence, and approved appraiser education.
Sec. 603. Study required on improvements in appraisal process and compliance programs.
Title VII—Incentives for best practices
Sec. 701. CRA credit for certain lender practices.
2.
(a)Definition of subprime mortgageSection 103 of the Truth in Lending Act (15 U.S.C. 1602) is amended by adding at the end the following new subsection:
(cc)The term subprime mortgage means any consumer credit transaction secured by the principal dwelling of the consumer that bears or otherwise meets the terms and characteristics for such a transaction that the Board has defined as a subprime mortgage. .
(b)The Board shall prescribe regulations defining a subprime mortgage for purposes of the amendment made by subsection (a) before the end of the 90-day period beginning on the date of the enactment of this Act.
<enum>I</enum><header>Licensing System of Residential Mortgage Loan Originators</header>
<section id="HDC7A20807B2D4266930216C8170019B6"><enum>101.</enum><header>Purposes and methods for establishing a mortgage licensing system</header><text display-inline="no-display-inline">In order to increase uniformity, reduce regulatory burden, enhance consumer protection, and reduce fraud, the States, through the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, are hereby encouraged to establish a Nationwide Mortgage Licensing System and registry for the residential mortgage industry that accomplishes all of the following objectives:</text>
<paragraph id="H8F6AB9C3E4064325B283C7FE4604A1BA"><enum>(1)</enum><text>Provides uniform mortgage applications and reporting requirements for State-licensed loan originators.</text> </paragraph>
<paragraph id="HBFF320976D0B4E9BADE881DAEA571CD"><enum>(2)</enum><text>Provides a comprehensive licensing and supervisory database.</text> </paragraph>
<paragraph id="HCE93AE66F3A84E59BA217D67F90059C"><enum>(3)</enum><text>Aggregates and improves the flow of information to and between regulators.</text> </paragraph>
<paragraph id="H80A0B833FBFD497F81BE407D003658D"><enum>(4)</enum><text>Provides increased licensee accountability and tracking.</text> </paragraph>
<paragraph id="H35226BB4EBA9405B96203F20006981FB"><enum>(5)</enum><text>Streamlines the licensing process and reduces the regulatory burden.</text> </paragraph>
<paragraph id="H7585A5E5B4294346A0E5D6605CA7BF95"><enum>(6)</enum><text>Enhances consumer protections and supports anti-fraud measures.</text> </paragraph></section>
<section id="H0B7420296E744B480016181D024923D6"><enum>102.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this title, the following definitions shall apply:</text>
<paragraph id="HEE24AF37BDD1465FB966E5130792A6FC"><enum>(1)</enum><header>Federal banking agencies</header><text>The term <term>Federal banking agencies</term> means the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the National Credit Union Administration, and the Federal Deposit Insurance Corporation.</text> </paragraph>
<paragraph id="HF2F6C280C1B14C2BA4C6D2A6C9753D18"><enum>(2)</enum><header>Loan originator</header>
<subparagraph id="H02C319CD9D964875B62F172DF89E00C5"><enum>(A)</enum><header>In general</header><text>The term <term>loan originator</term>—</text>
<clause id="HC4F11D32149D4D479E31DC7933A87959"><enum>(i)</enum><text>means an individual who—</text>
<subclause id="HCF3D0D0C81494367922C1463773BA758"><enum>(I)</enum><text>takes a residential mortgage loan application;</text> </subclause>
<subclause id="HB5F2A5E8BBF14B328FF374D6FAD84759"><enum>(II)</enum><text>assists a consumer in obtaining or applying to obtain a residential mortgage loan; or</text> </subclause>
<subclause id="HE7AE1133D42945C79E3B13E5FF21C407"><enum>(III)</enum><text>offers or negotiates terms of a mortgage loan, for direct or indirect compensation or gain, or in the expectation of direct or indirect compensation or gain;</text> </subclause></clause>
<clause id="H5F8F4340F6324D47B54585E84F8AF21"><enum>(ii)</enum><text display-inline="yes-display-inline">includes any individual who represents to the public, through advertising or other means of communicating or providing information (including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items), that such individual can or will provide or perform any of the activities described in clause (i); and</text> </clause>
<clause id="H07F263D2F187456EB10376E8A2DF742"><enum>(iii)</enum><text display-inline="yes-display-inline">does not include any individual who performs purely administrative or clerical tasks and is not otherwise described in this subparagraph.</text> </clause></subparagraph>
<subparagraph id="H8461D018825F4F7BA490355DF650246E"><enum>(B)</enum><header>Other definitions relating to loan originator</header><text display-inline="yes-display-inline">For purposes of this paragraph, a person <quote>assists a consumer in obtaining or applying to obtain a residential mortgage loan</quote> by, among other things, counseling on loan terms (rates, fees, other costs), preparing loan packages, or collecting enough information on behalf of the consumer to anticipate a credit decision.</text> </subparagraph></paragraph>
<paragraph id="H4E626F61854F44AA8DA1D25E71528900"><enum>(3)</enum><header>Administrative or clerical tasks</header><text>The term <term>administrative or clerical tasks</term> means the receipt, collection, and distribution of information common for the processing or underwriting of a loan in the mortgage industry and communication with a consumer to obtain information necessary for the processing or underwriting of a loan.</text> </paragraph>
<paragraph id="H48138AA586624B3FB51EA4017BD20000"><enum>(4)</enum><header>Loan processor or underwriter</header>
<subparagraph id="HA76F6CF365BC4791B1C2C306274EA7A7"><enum>(A)</enum><header>In general</header><text>The term <term>loan processor or underwriter</term> means an individual who performs clerical or support duties at the direction of and subject to the supervision and instruction of a licensed mortgage broker, lender, insured depository institution, or wholly-owned subsidiary of an insured depository institution.</text> </subparagraph>
<subparagraph id="H47347D7705FE44B5BE4DDDCC75A2883B"><enum>(B)</enum><header>Clerical or support duties</header><text display-inline="yes-display-inline">For purposes of subparagraph (A), the term <term>clerical or support duties</term> may include—</text>
<clause id="H0A1C9A6EDD2C40F1AE8185C82F05B219"><enum>(i)</enum><text>the receipt, collection, distribution, and analysis of information common for the processing or underwriting of a loan; and</text> </clause>
<clause id="HAD4C5577213F49E89DD11EFC3689756F"><enum>(ii)</enum><text>communicating with a borrower to obtain the information necessary for the processing or underwriting of a loan, to the extent that such communication does not include offering or negotiating loan rates or terms, or counseling borrowers about loan rates or terms.</text> </clause></subparagraph></paragraph>
<paragraph id="H881A953D526F48428889131F72CF807"><enum>(5)</enum><header>Mortgage broker or mortgage lender</header><text>The term <term>mortgage broker or mortgage lender</term> means any person who for compensation or gain, or in the expectation of compensation or gain—</text>
<subparagraph id="HA8C0D822C75C4812A50834DB039CF866"><enum>(A)</enum><text>makes a residential mortgage loan or assists a person in obtaining or applying to obtain a residential mortgage loan; or</text> </subparagraph>
<subparagraph id="H8A9450C8CD414D3BB568214F531CF205"><enum>(B)</enum><text display-inline="yes-display-inline">represents to the public, through advertising or other means of communicating or providing information (including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items), that such individual can or will make a residential mortgage loan or assist a consumer in obtaining or applying to obtain a residential mortgage loan.</text> </subparagraph></paragraph>
<paragraph id="H9E7B06077B744B20AFA858935CC9924E"><enum>(6)</enum><header>Nationwide Mortgage Licensing System</header><text>The term <term>Nationwide Mortgage Licensing System</term> means a mortgage licensing system developed and maintained by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators for the State licensing of State-licensed loan originators.</text> </paragraph>
<paragraph id="H19B6F6163E184267A96147FF09A9187C"><enum>(7)</enum><header>Registered loan originator</header><text>The term <term>registered loan originator</term> means any individual who—</text>
<subparagraph id="H5437DE16729F4E86964FE1FCDD3184F2"><enum>(A)</enum><text>meets the definition of loan originator and is an employee of an insured depository institution or a wholly-owned operating subsidiary of an insured depository institution; and</text> </subparagraph>
<subparagraph id="H45649FF4B858415500071FC8F0A3E9E"><enum>(B)</enum><text>is registered and maintains a unique identifier through the Nationwide Mortgage Licensing System or system.</text> </subparagraph></paragraph>
<paragraph id="HC643ED923F2E424B95EEBBECB0FA36AE"><enum>(8)</enum><header>Residential mortgage loan</header><text>The term <term>residential mortgage loan</term> means any loan primarily for personal, family, or household use that is secured by a mortgage or deed of trust on residential real estate upon which is constructed or intended to be constructed a single family dwelling of 4 or fewer units.</text> </paragraph>
<paragraph id="H78972F351176413ABC19CDF46C396D72"><enum>(9)</enum><header>Residential real estate</header><text display-inline="yes-display-inline">The term <term>residential real estate</term> means real property upon which is constructed or intended to be constructed, a 1- to 4-family residence, except that such term does not include any dwelling on leased or rented land or space unless the mortgage broker treats such property as residential real estate.</text> </paragraph>
<paragraph id="H0759F85A4CA44325A2728CA6182B9FA5"><enum>(10)</enum><header>State-licensed loan originator</header><text>The term <term>State-licensed loan originator</term> means any individual who—</text>
<subparagraph id="H324D8E987F9B4EB0AF5914F1002FDEFA"><enum>(A)</enum><text>is a loan originator;</text> </subparagraph>
<subparagraph id="HBE0BCC63B8CB4483ABAFF2F000B89C77"><enum>(B)</enum><text>is not an employee of an insured depository institution or any wholly-owned operating subsidiary of an insured depository institution; and</text> </subparagraph>
<subparagraph id="HD334AEE462E2414B95B27E1B90FC38F2"><enum>(C)</enum><text>is licensed as a loan originator through the Nationwide Mortgage Licensing System.</text> </subparagraph></paragraph>
<paragraph id="HBE4EFDE0510641B9AFE656FE00A2F2E"><enum>(11)</enum><header>Unique identifier</header><text>The term <term>unique identifier</term> means a number established as permanent identification of a loan originator.</text> </paragraph></section>
<section id="HCA41C51656EF449EB5FA00BA2CA434C5"><enum>103.</enum><header>License or registration required</header>
<subsection id="H755C85385BCF4D6C8E3CA548AF00F2B0"><enum>(a)</enum><header>In general</header><text>A person may not engage in the business of a loan originator without first obtaining and maintaining a registration as a registered loan originator or a license as a State-licensed loan originator.</text> </subsection>
<subsection id="HB1000A006DF140F98FA96CED51009914"><enum>(b)</enum><header>Loan processors and underwriters</header>
<paragraph id="H3D7B36AB74F24A75B88FE8922B9E8933"><enum>(1)</enum><header>Supervised loan processors and underwriters</header><text display-inline="yes-display-inline">A loan processor or underwriter who does not represent to the public, through advertising or other means of communicating or providing information (including the use of business cards, stationery, brochures, signs, rate lists, or other promotional items), that such individual can or will provide or perform any of the activities of a mortgage broker, mortgage provider, or loan originator shall not be required to have a loan originator license.</text> </paragraph>
<paragraph id="H3A1195AC4A06498F96F9B67F7EE02672"><enum>(2)</enum><header>Independents</header><text>A loan processor or underwriter may not work as an independent contractor unless licensed or registered as a mortgage broker.</text> </paragraph></subsection></section>
<section id="H66CB726C98FC4F0F80179E42DAFC5142"><enum>104.</enum><header>License and registration application and issuance</header>
<subsection id="H94CCA72B083A452FB57FE91200F3A5D1"><enum>(a)</enum><header>Background checks</header><text>As a part of or in connection with an application for any loan originator license or registration, the applicant shall, at a minimum, furnish to the Nationwide Mortgage Licensing System or appropriate regulatory agency, information concerning the applicant’s identity, including—</text>
<paragraph id="HE206CEDB07594C128CFA6E38C48CBF3"><enum>(1)</enum><text>fingerprints for submission to the Federal Bureau of Investigation, and any governmental agency or entity authorized to receive such information for a State and national criminal history background check; and</text> </paragraph>
<paragraph id="H21832D58EAAE43008953ACB4402DA0B7"><enum>(2)</enum><text>personal history and experience, including authorization for the System or regulator agency to obtain—</text>
<subparagraph id="H5050976ABA484C93005D00A3EAD35BF4"><enum>(A)</enum><text>an independent credit report obtained from a consumer reporting agency described in section 603(p) of the Fair Credit Reporting Act; and</text> </subparagraph>
<subparagraph id="HAF382583FFDC4D7FBEE6FFEB8B065700"><enum>(B)</enum><text>information related to any administrative, civil or criminal findings by any governmental jurisdiction.</text> </subparagraph></paragraph></subsection>
<subsection id="HD4FAE6AD64D0465586F003CE6D69B81"><enum>(b)</enum><header>Issuance of license</header><text>The minimum standards for license issuance shall include the following:</text>
<paragraph id="H5296860C04F64E928F9CE21B6B06473E"><enum>(1)</enum><text>The applicant has not had a loan originator or similar license revoked in any governmental jurisdiction during the 5-year period immediately preceding the filing of the present application.</text> </paragraph>
<paragraph id="HE842A2BB07A64CE7A528F1FEF0F5CE98"><enum>(2)</enum><text display-inline="yes-display-inline">The applicant has not been convicted, pled guilty or nolo contendere in a domestic, foreign, or military court of a felony during the 7-year period immediately preceding the filing of the present application.</text> </paragraph>
<paragraph id="H249002F23A774A6F86115280C549FFE8"><enum>(3)</enum><text>The applicant has demonstrated financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that the loan originator will operate honestly, fairly, and efficiently within the purposes of this title.</text> </paragraph>
<paragraph id="HCDA436782AAC4FE8865824A06D6040E3"><enum>(4)</enum><text>The applicant has completed pre-licensing education.</text> </paragraph>
<paragraph id="HEB1AE99ECAE54A6F9041ACDD8D43072"><enum>(5)</enum><text>The applicant has passed a written test.</text> </paragraph></subsection>
<subsection id="H654D8E40B1A04ADB9302C81510E784FD"><enum>(c)</enum><header>Pre-licensing education of loan originators</header>
<paragraph id="H39E9808B5FB34B9DBF3906CD451DD1BF"><enum>(1)</enum><header>In general</header><text>Before applying for a license, every loan originator shall complete an education requirement.</text> </paragraph>
<paragraph id="H8688A47A727545FB9055002C164E6943"><enum>(2)</enum><header>Approved educational courses</header><text>Satisfactory pre-licensing education courses shall be reviewed, approved and published by the Nationwide Mortgage Licensing System or the Secretary of Housing and Urban Development in consultation with the Nationwide Mortgage Licensing System.</text> </paragraph>
<paragraph id="HEE7CEC82A4F2432B8D59E9416C715780"><enum>(3)</enum><header>Minimum educational requirements</header><text>The pre-licensing education requirement shall be at least 20 hours of approved education, which shall include at least 3 hours of Federal law and regulations and 3 hours of ethics.</text> </paragraph></subsection>
<subsection id="HEFF38805349F492885158222CC030908"><enum>(d)</enum><header>Testing of loan originators</header>
<paragraph id="HFF18220CA2634252B7B8B92DA42F214C"><enum>(1)</enum><header>In general</header><text>No individual may be licensed as a loan originator unless the individual has passed a qualified written test developed and administered by the Nationwide Mortgage Licensing System or the Secretary of Housing and Urban Development in consultation with the Nationwide Mortgage Licensing System.</text> </paragraph>
<paragraph id="H431CD18B68D14762A6841C811BD8115E"><enum>(2)</enum><header>Qualified test</header><text>A written test shall not be treated as a qualified written test for purposes of paragraph (1) unless—</text>
<subparagraph id="HC0386403E6AE40E097133688DBB2F1E4"><enum>(A)</enum><text>the test consists of a minimum of 100 questions; and</text> </subparagraph>
<subparagraph id="HF45A47F521404666B5264C003008D200"><enum>(B)</enum><text>the test adequately measures the applicant’s knowledge and comprehension in appropriate subject areas, including—</text>
<clause id="H98385C5A69B04DAB8D171DA841754CF2"><enum>(i)</enum><text>ethics;</text> </clause>
<clause id="H034453265D2A46F283D00CE360521E7"><enum>(ii)</enum><text>Federal law and regulation pertaining to mortgage origination; and</text> </clause>
<clause id="HC3E6A470AC1D4B37BFF840818519F147"><enum>(iii)</enum><text>State law and regulation pertaining to mortgage origination.</text> </clause></subparagraph></paragraph>
<paragraph id="HA41DD6A891B34AE49C390406BA5FA72"><enum>(3)</enum><header>Minimum competence</header>
<subparagraph id="HE6C32E5A821B45BBA132F756BA45D35"><enum>(A)</enum><header>Passing score</header><text>A passing test score of 75 percent correct answers to questions shall be required before accepting and processing a license application.</text> </subparagraph>
<subparagraph id="H9E981B217EC44749915744D907063344"><enum>(B)</enum><header>Initial retests</header><text>A loan originator may retake a test 3 consecutive times with each consecutive taking occurring in less than 14 days after the preceding test.</text> </subparagraph>
<subparagraph id="H11E008B69745422EBAF415EA82A69BCC"><enum>(C)</enum><header>Subsequent retests</header><text>After 3 consecutive tests, a loan originator shall wait at least 14 days before taking the test again.</text> </subparagraph>
<subparagraph id="HBCCAED61A33B4A94940727CFBFD8D02C"><enum>(D)</enum><header>Retest after lapse of license</header><text>A loan originator who fails to maintain a valid license for a period of 5 years or longer shall retake the test.</text> </subparagraph></paragraph></subsection></section>
<section id="HC1FCB1F4AEAE43B8AFFAA2CEC9AC3AE"><enum>105.</enum><header>Standards for license renewal</header>
<subsection id="H8EF49EEFAE104552AF16C019C3EF806"><enum>(a)</enum><header>In general</header><text>The minimum standards for license renewal shall include the following:</text>
<paragraph id="HDE7E2CF0898D402B8BA05B929F7EB1BD"><enum>(1)</enum><text>The loan originator continues to meet the minimum standards for license issuance.</text> </paragraph>
<paragraph id="H203A14620C784A1483AB1EB902206306"><enum>(2)</enum><text>The loan originator has satisfied the annual continuing education requirements set forth below.</text> </paragraph></subsection>
<subsection id="H982A7CB31C98495C8B84FBE915D0421"><enum>(b)</enum><header>Continuing education for state-licensed loan originators</header>
<paragraph id="H25EDD894416040B18001C76223E759D8"><enum>(1)</enum><header>In general</header><text>Every loan originator shall complete an annual continuing education requirement in order to renew their loan originator license or registration each year. Satisfactory continuing education courses shall be reviewed, approved and published by the Nationwide Mortgage Licensing System or the Secretary of Housing and Urban Development. The annual continuing education requirement shall be at least 8 hours of approved continuing education each year. Beginning with the loan originator’s first year and repeated each year thereafter the annual continuing education requirement shall include at least 3 hours of Federal law and regulations. Beginning with the loan originator’s first year and repeated each third year thereafter, the annual continuing education requirement shall include at least 2 hours of ethics.</text> </paragraph></subsection>
<subsection id="H5DF7BABD8DDB478FAE49F0B07B377184"><enum>(c)</enum><header>Application</header><text>Calculation of continuing education credits. Continuing education credits apply only to the year in which they are taken. A loan originator may not take the same approved course in the same or successive years to meet the annual requirements for continuing education. A loan originator, approved as an instructor of an approved continuing education course may receive credit for the annual education requirement at the rate of 2 hours credit for every 1 hour taught.</text> </subsection></section>
<section id="HDAA1C28B3750425CB96C319E3C87473C"><enum>106.</enum><header>System of registration administration by Federal banking agencies</header>
<subsection id="H1F0D3857AC7942C8BE47CDBE493046F6"><enum>(a)</enum><header>Development</header><text>The Federal banking agencies shall have sole responsibility for developing and maintaining a system of registration for registered loan originators.</text> </subsection>
<subsection id="HF605DD27A58F46B9BC008213744D0800"><enum>(b)</enum><header>Unique identifier</header><text>The Federal banking agencies, through the Financial Institutions Examination Council, shall coordinate with the Nationwide Mortgage Licensing System to establish a unique identifier for all Loan Originators.</text> </subsection>
<subsection id="HA8A9181B7378482CBF361718507CD800"><enum>(c)</enum><header>Linkage with state-licenced loan originators</header><text display-inline="yes-display-inline">To facilitate tracking and identification of, and public access to publicly-adjudicated disciplinary and enforcement actions against, loan originators alternating between registration and licensing, the unique identifier used to register loan originators shall link electronically with the unique identifier used to license State-licensed loan originators.</text> </subsection>
<subsection id="H0B348B48F25546FD85E641DC66FE8E0"><enum>(d)</enum><header>Administration</header><text>The Federal banking agencies may enter into a contract with the Nationwide Mortgage Licensing System to administer the registration of registered loan originators.</text> </subsection></section>
<section id="H6EC8EE4D42504B59B3EF39F6EF6417A"><enum>107.</enum><header>Secretary of housing and urban development backup authority to establish a loan originator licensing system</header>
<subsection id="HF95FA75970A64C648280E41986EA275"><enum>(a)</enum><header>In general</header><text>The provisions of this section and section 408 shall take effect for States that do not meet the minimum standards set forth in this title for State-licensed loan originators, if and only if, by the end of a 3-year period beginning on the date of the enactment of this Act the State does not have in place by law or regulation the minimum requirements for licensing State-licensed loan originators that meet the specifications of this title and does not participate in the Nationwide Mortgage Licensing System.</text> </subsection>
<subsection id="HF28D502FDD1C4874BCDD55091C4D5E5B"><enum>(b)</enum><header>Back up licensing system</header><text>The Secretary of Housing and Urban Development (hereafter in this title referred to as the <quote>Secretary</quote>) shall provide for the establishment and maintenance of a system of licensed loan originators.</text> </subsection>
<subsection id="H6DDC9EDD3402463FB16DFE758C2BD93"><enum>(c)</enum><header>Administration</header>
<paragraph id="H9D376BF3E8074BFD88EA4FC5DDA37F6"><enum>(1)</enum><header>In general</header><text>The Secretary shall either maintain and administer the system established under this title or enter into a contract with the Nationwide Mortgage Licensing System to administer the system.</text> </paragraph>
<paragraph id="HF3A64C3E0F114091AB14506E9B2BC848"><enum>(2)</enum><header>Consultation</header><text>The Secretary shall consult with the American Association of Residential Mortgage Regulators, the Conference of State Bank Supervisors, and other appropriate organizations in determining the information to be maintained in the System.</text> </paragraph></subsection></section>
<section id="HD1E62076B3834ABBA48872876587B300"><enum>108.</enum><header>System for State-licensed loan originators</header>
<subsection id="H7966310C2E474B11A5B8FC03D797076B"><enum>(a)</enum><header>In general</header><text>In order to facilitate the requirements of section 407, the Secretary shall develop and maintain a system for State-licensed mortgage originators.</text> </subsection>
<subsection id="H7F140869B8814FB68369FDF7F06077A4"><enum>(b)</enum><header>Requirements for system</header><text>The system established under subsection (a) shall, at a minimum, meet the following requirements:</text>
<paragraph id="H9EC39D588A5142A8AA39044E435CBEFA"><enum>(1)</enum><header>Unique identifier</header><text>The system shall include a unique identifier listing each State-licensed loan originator as follows:</text>
<subparagraph id="HA82291C1225343958D1E59E4BDE8ACB1"><enum>(A)</enum><text>The Federal banking agencies, through the Financial Institutions Examination Council, shall coordinate with the Nationwide Mortgage Licensing System to establish a unique identifier for all loan originators.</text> </subparagraph>
<subparagraph id="H813D37A35C944C35AEF3BB756D103960"><enum>(B)</enum><text>To facilitate tracking and identification of loan originators alternating between registration and licensing, the unique identifier used to register loan originators shall link electronically with the unique identifier used to license State-licensed loan originators.</text> </subparagraph></paragraph>
<paragraph id="H9A14B1D8D4DB4ACEBF724BE272895E4B"><enum>(2)</enum><header>Availability of adverse information about originators</header><text>The system shall make available to the public information regarding publicly-adjudicated disciplinary and enforcement actions taken against each State-licensed loan originator.</text> </paragraph>
<paragraph id="H36D48946859144B681D7492BC697A071"><enum>(3)</enum><header>Regulatory information</header><text>The system shall make available to the Secretary and to each public agency or official in a State responsible for regulating State-licensed loan originators such information regarding State-licensed loan originators as the Secretary, by regulation, considers appropriate for the Secretary and such agencies and officials to carry out their functions regarding regulation of State-licensed loan originators, including information regarding employment histories and criminal backgrounds.</text> </paragraph>
<paragraph id="HFF9822BEC3A94FD783AF689301C26034"><enum>(4)</enum><header>Availability of other information to consumers</header><text display-inline="yes-display-inline">The system shall make available to persons employing or using the services of State-licensed loan originators such information regarding State-licensed loan originators as the Secretary, by regulation, considers appropriate.</text> </paragraph>
<paragraph id="HF7DEB65B267D447DA0B9AF429F3DEDE9"><enum>(5)</enum><header>Recordkeeping</header><text display-inline="yes-display-inline">The system shall provide for the maintenance of such other information as the Secretary considers appropriate.</text> </paragraph></subsection>
<subsection id="H5B94C06BBE3C465B80341200C03EF0D"><enum>(c)</enum><header>Name of system</header><text>In the event the Secretary contracts with the Nationwide Mortgage Licensing System to administer the licensing of State-licensed loan originators, the system referenced in this subsection shall be known by the name Nationwide Mortgage Licensing System.</text> </subsection></section>
<section id="HC3038A96A5794186BCADA2AA41E516A7"><enum>109.</enum><header>Fees</header><text display-inline="no-display-inline">The Federal banking agencies, the Secretary of Housing and Urban Development, and the Nationwide Mortgage Licensing System may charge reasonable fees to cover the costs of maintaining and providing access to information from the system to the extent such fees are not charged to the general public.</text> </section>
<section id="HE8B11AD9F70F4A1E983F9DFD74842ED3"><enum>110.</enum><header>Mortgage professional background checks</header>
<subsection id="HAC5EAA17D2A647179D7D1325781564DC"><enum>(a)</enum><header>Access to records</header><text display-inline="yes-display-inline">Notwithstanding any other provision of the law, in providing identification and processing functions, the Attorney General shall provide access to all criminal history information to the appropriate State officials responsible for regulating mortgage professionals if required under the laws of the State.</text> </subsection>
<subsection id="H3C18B59107BC4D9290825E091765B532"><enum>(b)</enum><header>Agent</header><text display-inline="yes-display-inline">For the purposes of this section and in order to reduce the points of contact with which the Federal Bureau of Investigation may have to maintain for purposes of subsection (a), the Conference of State Bank Supervisors or a wholly owned subsidiary may be used as a channeling agent of the States for requesting and distributing information between the Department of Justice and the appropriate State agencies.</text> </subsection></section>
<section id="H0D8DCC239E534DFCB59523266EFCC54"><enum>111.</enum><header>Confidentiality of information</header>
<subsection id="H42878010C4374271B8091300FFD9E0BC"><enum>(a)</enum><header>System Confidentiality</header><text>Except as otherwise provided in this section, any requirement under Federal or State law regarding the privacy or confidentiality of any information or material in the possession of the Secretary or any other organization serving as the administrator of the system proposed in this title, and any privilege arising under Federal or State law (including the rules of any Federal or State court) with respect to such information or material, shall continue to apply to such information or material after the information or material has been disclosed to the system. Information in the system may be shared with all State and Federal regulatory officials with mortgage industry oversight authority without the loss of privilege or the loss of confidentiality protections provided by the Federal and State laws of the States that have ownership of that information.</text> </subsection>
<subsection id="H3D374BA5FE7C4C51B6BEAF2D5F80AE7"><enum>(b)</enum><header>Nonapplicability of certain requirements</header><text>Information or material that is subject to a privilege or confidentiality under subsection (a) shall not be subject to—</text>
<paragraph id="HE1E0AE40887147EEB2C78FC68F316F14"><enum>(1)</enum><text>disclosure under any Federal or State law governing the disclosure to the public of information held by an officer or an agency of the Federal Government or the respective State; or</text> </paragraph>
<paragraph id="H11413CD4E055432EA41F67A87886C01D"><enum>(2)</enum><text>subpoena or discovery, or admission into evidence, in any private civil action or administrative process, unless with respect to any privilege held by the Secretary with respect to such information or material, the participant waives, in whole or in part, in the discretion of the participant, such privilege.</text> </paragraph></subsection>
<subsection id="H34AB487A2FB14F4700E9A5980947908C"><enum>(c)</enum><header>Preemption of state law</header><text>Any State law, including any State open record law, relating to the disclosure of confidential supervisory information or any information or material described in subsection (a) that is inconsistent with subsection (a) shall be superseded by the requirements of such provision to the extent State law provides less confidentiality or a weaker privilege.</text> </subsection></section>
<section id="HE1C940F48F844AE7AFEB00517DDC841"><enum>112.</enum><header>Liability provisions</header><text display-inline="no-display-inline">The Secretary of Housing and Urban Development or any State official or agency, or organization serving as the administrator of the system proposed in this title, or employee thereof, shall not be subject to any civil action or proceeding for monetary damages by reason of the good-faith action or omission of any officer or employee, while acting within the scope of office or employment, relating to collecting, furnishing, or disseminating of information concerning persons who are mortgage professionals or are applying for licensing or registration as mortgage professionals or licensed loan officers or mortgage branches or mortgage companies, whether directly or through the system established under this title.</text> </section>
<enum>II</enum><header>Simplified Disclosures</header>
<section id="HF43A3520929E43A1BAC82D7B631F3247"><enum>201.</enum><header>Basic mortgage facts</header>
<subsection id="HB78B93910FE64E21935FC77F67EDFA4"><enum>(a)</enum><header>In general</header><text>Chapter 2 of the Truth in Lending Act (<external-xref legal-doc="usc" parsable-cite="usc/15/1631">15 U.S.C. 1631 et seq.</external-xref>) is amended by inserting after section 127A the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H7F51B62D2935492C87F027009274ACAB" style="USC">
<section id="H549FD7D5FFF34DDB92DAE4CF04121FCF"><enum>127B.</enum><header>Disclosure requirements required for all consumer credit plans secured by the consumer’s principal dwelling.</header>
<subsection id="H9B06DC385020430DB9E86BACAB34E8F7"><enum>(a)</enum><header>Simplified disclosure of basic mortgage facts required</header><text display-inline="yes-display-inline">No consumer credit transaction secured by the principal dwelling of the consumer (hereafter in this section referred to as the <quote>mortgage</quote>) may be consummated unless—</text>
<paragraph id="HE94FEBC52A754B6F94917F79AFA4700"><enum>(1)</enum><text display-inline="yes-display-inline">the mortgagee under the mortgage has provided to the consumer the written disclosures required under subsection (b) at least 3 days before the date of the settlement and execution of the mortgage; and</text> </paragraph>
<paragraph id="HC53E72FAAE52446AB97DFC2271B4F55"><enum>(2)</enum><text>the consumer has signed the disclosure under subsection (b)(1) and returned such disclosure to the mortgagee.</text> </paragraph></subsection>
<subsection id="H2F576212178249A189D18F7641E58D35"><enum>(b)</enum><header>Contents</header><text>With respect to a mortgage, the written disclosures required under this subsection are as follows:</text>
<paragraph id="HB24983020D8C476B8962A3CD70710011"><enum>(1)</enum><header>Statement of mortgage facts</header><text>A single page, written disclosure regarding the mortgage with the heading <quote>Your Basic Mortgage Facts</quote> that sets forth, in accordance with such requirements as the Board shall, by regulation, establish—</text>
<subparagraph id="H2EDC6B3132FB4F558703D4D3E39B7EBC"><enum>(A)</enum><text>the amount of the principal obligation under the mortgage;</text> </subparagraph>
<subparagraph id="H97A749ADC3FB4B46AA3CA200E5CFD4BC"><enum>(B)</enum><text>the loan-to-value ratio for the mortgage;</text> </subparagraph>
<subparagraph id="H30FB298B15BE4508A11E13CF68061B9B"><enum>(C)</enum><text>the final maturity date for the mortgage;</text> </subparagraph>
<subparagraph id="H8D989537B2A84FCCBFF110F75C13CEDA"><enum>(D)</enum><text>the amount and due date for any balloon payment under the mortgage;</text> </subparagraph>
<subparagraph id="H6064C68448CE48D7B15E8934301E5BB8"><enum>(E)</enum><text>the amount of any prepayment fee to be charged if the mortgage is paid in full before the final maturity date for the mortgage;</text> </subparagraph>
<subparagraph id="H8CF125C8EF5B4E49B2476F7F6F0417E3"><enum>(F)</enum><text>the initial interest rate under the mortgage expressed as an annual percentage rate, and the amount of the monthly payment due under such rate;</text> </subparagraph>
<subparagraph id="H29922AC730B34639887DCD7C88BAAFD9"><enum>(G)</enum><text>the duration during which such initial interest rate will be charged;</text> </subparagraph>
<subparagraph id="H366178D6199044C79C8CD836B46FB13F"><enum>(H)</enum><text display-inline="yes-display-inline">the fully indexed rate of interest under the mortgage expressed as an annual percentage rate and the amount of the monthly payment due under such rate;</text> </subparagraph>
<subparagraph id="H4A7E6A6907134570B2803F68D2B9A7D5"><enum>(I)</enum><text display-inline="yes-display-inline">the maximum possible rate of interest under the mortgage expressed as an annual percentage rate and the amount of the monthly payment due under such rate;</text> </subparagraph>
<subparagraph id="H2F9FB2908B474C74BECF868B34B27208"><enum>(J)</enum><text>the monthly household income of the mortgagor upon which the mortgage is based;</text> </subparagraph>
<subparagraph id="H72CFA28DC16A41EF9FF1D080E5CB27F1"><enum>(K)</enum><text>the amount of initial monthly payment due under the mortgage, and the amount of such initial monthly payment plus monthly amounts due for taxes and insurance on the property subject to the mortgage, both expressed as a percentage of the monthly household income of the mortgagor;</text> </subparagraph>
<subparagraph id="H1D762F5C451F4135898489EDAC4E3457"><enum>(L)</enum><text>the amount of the fully indexed monthly payment due under the mortgage, and the amount of such fully indexed monthly payment plus monthly amounts due for taxes and insurance on the property subject to the mortgage, both expressed as a percentage of the monthly household income of the mortgagor;</text> </subparagraph>
<subparagraph id="H150260704C634418B590973467D2B235"><enum>(M)</enum><text>the amount of any points to be paid by the mortgagor under the mortgage and the aggregate amount of any other closing costs in connection with the mortgage;</text> </subparagraph>
<subparagraph id="HF4EF57224BF1461C868D7B3B9E3B631B"><enum>(N)</enum><text>the amount of any late payment fees and a brief description of the consequences of making any payment late or defaulting on the mortgage, including foreclosure;</text> </subparagraph>
<subparagraph id="HA0C4FD59655A46FC88739F7BD611C3F0"><enum>(O)</enum><text>a name, telephone number, and electronic mail address that may be used by the mortgagor to obtain information regarding the mortgage;</text> </subparagraph>
<subparagraph id="HC310BD657ACA40B8B1F7EDBBDB88AEB9"><enum>(P)</enum><text>an authorized signature of the originator of the mortgage;</text> </subparagraph>
<subparagraph id="H3C4F3C37848B4448AA00FB54EEB800E"><enum>(Q)</enum><text>a blank space for the signature of the borrower; and</text> </subparagraph>
<subparagraph id="H433D847A705646498F99809442AC93AC"><enum>(R)</enum><text>immediately above such blank space, a conspicuous statement in bold typeface, in all capital letters, in a font at least equal in size to the largest font otherwise used in the disclosure, as follows: <quote>DO NOT SIGN THIS IF YOU DON’T UNDERSTAND IT!</quote>.</text> </subparagraph></paragraph>
<paragraph id="HCFA03184FA45499BAB363461F7BDD88"><enum>(2)</enum><header>Statement of definitions and explanations</header><text display-inline="yes-display-inline">A 2-page written disclosure that sets forth, in accordance with such requirements as the Board shall, by regulation in accordance with section 105, establish, basic easy-to-understand definitions or explanations, for purposes of residential mortgages, for all of the following terms: appraised value, types of loans, initial interest rate, fully indexed rate of interest, maximum possible rate of interest, monthly household income, monthly mortgage payment including taxes and insurance, fully indexed housing expense ratio, prepayment fee, balloon payment, payment option loan, points, closing costs, and default and foreclosure.</text> </paragraph></subsection>
<subsection id="H3EBEB73AE9274DA4AE2301305F5E5300"><enum>(c)</enum><header>Preemption</header><text>The provisions of this section relating to the disclosure of basic mortgage facts to a consumer in connection with any mortgage shall supersede the provisions of the law of any State relating to the disclosure of such facts.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HE556915C025240A6AE6986E6207CFB00"><enum>(b)</enum><header>Clerical amendment</header><text>The table of sections for chapter 2 of the Truth in Lending Act is amended by inserting after the item relating to section 127A the following new item:</text>
<quoted-block display-inline="no-display-inline" id="HA863EE8F8C9B48398B59E9FDA04516FD" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">127B. Disclosure requirements required for all consumer credit plans secured by the consumer’s principal dwelling.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<enum>III</enum><header>Housing Counseling</header>
<subtitle id="H8465B335BD55447E957C7D2CD007AF80"><enum>A</enum><header>Consumer counseling</header>
<section id="H5FC4E8E89ADA4F53BDFDF2EEFDC14CD9"><enum>301.</enum><header>Consumer counseling requirements</header>
<subsection id="H72577D20C12B4C8BBBF7ECAEDE9672BE"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Chapter 2 of the Truth in Lending Act (<external-xref legal-doc="usc" parsable-cite="usc/15/1631">15 U.S.C. 1631 et seq.</external-xref>) is amended by inserting after section 129 the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H3F5212D092DE47D2AAE726EF9B00F447" style="USC">
<section id="H8FA2EB5DE1764D3FA8DBB305731F403"><enum>129A.</enum><header>Provisions applicable to nontraditional mortgages</header>
<subsection id="H9D3E0C4F7DAA4F46A782DD524000216B"><enum>(a)</enum><header>Consumer counseling requirements</header>
<paragraph id="HF9F2AFA8348848C384C273F0497EBFE3"><enum>(1)</enum><header>In general</header><text>A creditor may not extend any credit in the form of a subprime mortgage to any consumer unless the creditor has provided to the consumer, at such time before the consummation of the mortgage and in such manner as the Board shall provide by regulation—</text>
<subparagraph id="H86D7149DC03D4302A030667026B749EA"><enum>(A)</enum><text>a separate written statement recommending that the consumer take advantage of available home ownership or credit counseling services before agreeing to the terms of any subprime mortgage; and</text> </subparagraph>
<subparagraph id="H174C8694B0AC440DB5D47255F5D21C65"><enum>(B)</enum><text>a written statement containing the names, addresses and telephone numbers of counseling agencies or programs reasonably available to the consumer that have been certified or approved and made publicly available by the Secretary of Housing and Urban Development, a State housing finance authority (as defined in section 1301 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989), or the agency referred to in subsection (a) or (c) of section 108 with jurisdiction over the creditor as qualified to provide counseling on—</text>
<clause id="H5D6918FAFDDB466EBCF510E52E69C5D2"><enum>(i)</enum><text>the advisability of a subprime mortgage transaction; and</text> </clause>
<clause id="H9AC523F212E24A5FA15D73D6D297F007"><enum>(ii)</enum><text>the appropriateness of a subprime mortgage for the consumer.</text> </clause></subparagraph></paragraph>
<paragraph id="H74306FF07159428E8600CF9B69A1605C"><enum>(2)</enum><header>Complete and updated lists required</header><text>A creditor shall be deemed to be in compliance with the requirements of this subsection if the creditor provides the consumer with a reasonably complete or updated list of counseling agencies required by section 5(a) of the Real Estate Settlement Procedures Act of 1974.</text> </paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection display-inline="no-display-inline" id="HB52F45D03C574E3685F225E325FD89C9"><enum>(b)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The table of sections for chapter 2 of the Truth in Lending Act is amended by inserting after the item relating to section 129 the following new item:</text>
<quoted-block display-inline="no-display-inline" id="HE7C4E094D1704EC0B363D5EC74707C3F" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">129A. Provisions applicable to nontraditional mortgages.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section></subtitle>
<subtitle id="HCF882EA4CECA45CDA735D6A0452905E2"><enum>B</enum><header>Expanded housing counseling opportunities</header>
<section display-inline="no-display-inline" id="H620AF76812524C1B8EEE025B02B8991B" section-type="subsequent-section"><enum>311.</enum><header>Short title</header><text display-inline="no-display-inline">This subtitle may be cited as the <quote><short-title>Expanding Housing Opportunities Through Education and Counseling Act</short-title></quote>.</text> </section>
<section id="HBA0247E6F42C4028B245F3AEE0083FE"><enum>312.</enum><header>Establishment of Office of Housing Counseling</header><text display-inline="no-display-inline">Section 4 of the Department of <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/3533">42 U.S.C. 3533</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Housing" id="HBFEFDAFE31934E5B95158905F083B2B9">
<subsection id="HFD4FD9FF20044A609186A373DD553D36"><enum>(g)</enum><header>Office of Housing Counseling</header>
<paragraph id="H2209C345A2574F36B9812F4743138933"><enum>(1)</enum><header>Establishment</header><text>There is established, in the Office of the Secretary, the Office of Housing Counseling.</text> </paragraph>
<paragraph id="HDD1C609B73424CF6845CBC60E1FBC3D8"><enum>(2)</enum><header>Director</header><text>There is established the position of Director of Housing Counseling. The Director shall be the head of the Office of Housing Counseling and shall be appointed by the Secretary. Such position shall be a career-reserved position in the Senior Executive Service.</text> </paragraph>
<paragraph id="H4BBE68D70EA64136005879CBFAF1957B"><enum>(3)</enum><header>Functions</header>
<subparagraph id="H090F68B7EA964FDA81DF4F59ADAB8575"><enum>(A)</enum><header>In general</header><text>The Director shall have ultimate responsibility within the Department, except for the Secretary, for all activities and matters relating to homeownership counseling and rental housing counseling, including—</text>
<clause id="H9FCD45EE87B441008822448C5FADC56D"><enum>(i)</enum><text>research, grant administration, public outreach, and policy development relating to such counseling; and</text> </clause>
<clause id="H83E9063E4D2A4D31B901DD7D74F2C5E"><enum>(ii)</enum><text>establishment, coordination, and administration of all regulations, requirements, standards, and performance measures under programs and laws administered by the Department that relate to housing counseling, homeownership counseling (including maintenance of homes), mortgage-related counseling (including home equity conversion mortgages and credit protection options to avoid foreclosure), and rental housing counseling, including the requirements, standards, and performance measures relating to housing counseling.</text> </clause></subparagraph>
<subparagraph id="H24D11863B300438EADAC93BD4B7A598"><enum>(B)</enum><header>Specific functions</header><text display-inline="yes-display-inline">The Director shall carry out the functions assigned to the Director and the Office under this section and any other provisions of law. Such functions shall include establishing rules necessary for—</text>
<clause id="H78BCBE2CBD334D1FA0C4F15829AC7E41"><enum>(i)</enum><text>the counseling procedures under section 106(h)(1) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701x">12 U.S.C. 1701x(h)(1)</external-xref>);</text> </clause>
<clause id="H5878D59B487D4653A4F8FCFF7E88B2C9"><enum>(ii)</enum><text>carrying out all other functions of the Secretary under section 106(h) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968, including the establishment, operation, and publication of the availability of the toll-free telephone number under paragraph (2) of such section;</text> </clause>
<clause id="H61313B20548644AF877CD2BD53E964E7"><enum>(iii)</enum><text>carrying out section 5 of the Real Estate Settlement Procedures Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/12/2604">12 U.S.C. 2604</external-xref>) for home buying information booklets prepared pursuant to such section;</text> </clause>
<clause id="H2FE1EFF0B2F543C581C8D4FEE6B7A5FE"><enum>(iv)</enum><text>carrying out the certification program under section 106(e) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701x">12 U.S.C. 1701x(e)</external-xref>);</text> </clause>
<clause id="H14915BFC062744DA8DEA4B09DA8EE47B"><enum>(v)</enum><text>carrying out the assistance program under section 106(a)(4) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968, including criteria for selection of applications to receive assistance;</text> </clause>
<clause id="H87B89446CFFE4422917F4C80D9B12704"><enum>(vi)</enum><text>providing for operation of the advisory committee established under paragraph (4) of this subsection; and</text> </clause>
<clause id="H38637FD8546F498CB98E553FA9BBA521"><enum>(vii)</enum><text>collaborating with community-based organizations with expertise in the field of housing counseling.</text> </clause></subparagraph></paragraph>
<paragraph id="H967E2389104046039EDACF6DEB266097"><enum>(4)</enum><header>Advisory Committee</header>
<subparagraph id="H04B4B0B5D1DF4F34B9BF11E7D3CEBEC"><enum>(A)</enum><header>In general</header><text>The Secretary shall appoint an advisory committee to provide advice and oversight regarding the carrying out of the functions of the Director.</text> </subparagraph>
<subparagraph id="H1F1077A8392342B0B39BA4CCFD68F600"><enum>(B)</enum><header>Members</header><text>Such advisory committee shall consist of not more than 12 individuals, and the membership of the committee shall equally represent all aspects of the mortgage and real estate industry, including consumers.</text> </subparagraph>
<subparagraph id="H10283A15A7DD42B49D465500AED1F244"><enum>(C)</enum><header>Terms</header><text>Except as provided in subparagraph (D), each member of the advisory committee shall be appointed for a term of 3 years. Members may be reappointed at the discretion of the Secretary.</text> </subparagraph>
<subparagraph id="HC9713EFEFE58446992AE92DFE8436D9D"><enum>(D)</enum><header>Terms of initial appointees</header><text>As designated by the Secretary at the time of appointment, of the members first appointed to the advisory committee, 4 shall be appointed for a term of 1 year and 4 shall be appointed for a term of 2 years.</text> </subparagraph>
<subparagraph id="H7667501AADEC4E75B5F9B8D81DD74684"><enum>(E)</enum><header>Prohibition of pay; travel expenses</header><text>Members of the advisory committee shall serve without pay, but shall receive travel expenses, including per diem in lieu of subsistence, in accordance with applicable provisions under subchapter I of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/5/57">chapter 57</external-xref> of title 5, United States Code.</text> </subparagraph>
<subparagraph id="H14ECBB4E38ED434BA4D0B3EF6882E26E"><enum>(F)</enum><header>Advisory role only</header><text>The advisory committee shall have no role in reviewing or awarding housing counseling grants.</text> </subparagraph></paragraph>
<paragraph id="HA6C77AD6E5B24A869BD1E74306EE2A0"><enum>(5)</enum><header>Scope of homeownership counseling</header><text>In carrying out the responsibilities of the Director, the Director shall ensure that homeownership counseling provided by, in connection with, or pursuant to any function, activity, or program of the Department addresses the entire process of homeownership, including the decision to purchase a home, the selection and purchase of a home, issues arising during or affecting the period of ownership of a home (including refinancing, default and foreclosure, and other financial decisions), and the sale or other disposition of a home.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HC7E74F9B0D47425DAAA3DDA61B304DE"><enum>313.</enum><header>Counseling procedures</header>
<subsection id="HC920277A70B44694B6425DAC4DBEE61E"><enum>(a)</enum><header>In general</header><text>Section 106 of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701x">12 U.S.C. 1701x</external-xref>), as amended by the preceding provisions of this title, is further amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Housing" id="H5881F85DD3B047628F2E5229E045FF82">
<subsection id="HC1DDDB1D65384E7F90FFB876F3E5D64B"><enum>(h)</enum><header>Procedures and activities</header>
<paragraph id="H92FEAAE63AE54404BF7142E26739C8B9"><enum>(1)</enum><header>Counseling procedures</header>
<subparagraph id="H67A010C0A39A4F71B31F75BF691D4E40"><enum>(A)</enum><header>In general</header><text>The Secretary shall establish, coordinate, and monitor the administration by the Department of Housing and Urban Development of the counseling procedures for homeownership counseling and rental housing counseling provided in connection with any program of the Department, including all requirements, standards, and performance measures that relate to homeownership and rental housing counseling.</text> </subparagraph>
<subparagraph id="HB1DE6F980A674FB300ECD81DBB5FF37D"><enum>(B)</enum><header>Homeownership counseling</header><text>For purposes of this subsection and as used in the provisions referred to in this subparagraph, the term <term>homeownership counseling</term> means counseling related to homeownership and residential mortgage loans. Such term includes counseling related to homeownership and residential mortgage loans that is provided pursuant to—</text>
<clause id="H29854D3ECF7046569B6995ECE7BE74AD"><enum>(i)</enum><text>section 105(a)(20) of the <act-name parsable-cite="HCDA">Housing and Community Development Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/5305">42 U.S.C. 5305(a)(20)</external-xref>);</text> </clause>
<clause id="HA0CFC9C43C574AB5B747073E0582CB90"><enum>(ii)</enum><text>in the <act-name parsable-cite="USHA">United States Housing Act of 1937</act-name>—</text>
<subclause id="HFDEA7025F909489C93EDB501002F71F5"><enum>(I)</enum><text>section 9(e) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437g">42 U.S.C. 1437g(e)</external-xref>);</text> </subclause>
<subclause id="HFEF6133BCA5F47238728FDFC94B6D0CB"><enum>(II)</enum><text>section 8(y)(1)(D) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437f">42 U.S.C. 1437f(y)(1)(D)</external-xref>);</text> </subclause>
<subclause id="HC3E7D6ECE25846269CDDC577BBB8D437"><enum>(III)</enum><text>section 18(a)(4)(D) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437p">42 U.S.C. 1437p(a)(4)(D)</external-xref>);</text> </subclause>
<subclause id="H024943C718BA4B33B74B82F9CA704A4"><enum>(IV)</enum><text>section 23(c)(4) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437u">42 U.S.C. 1437u(c)(4)</external-xref>);</text> </subclause>
<subclause id="HA64B8AA580784DBE96DCC54DC0184C8B"><enum>(V)</enum><text>section 32(e)(4) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437z-4">42 U.S.C. 1437z–4(e)(4)</external-xref>);</text> </subclause>
<subclause id="H635386E68E73426A002692AB2254A13F"><enum>(VI)</enum><text>section 33(d)(2)(B) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437z-5">42 U.S.C. 1437z–5(d)(2)(B)</external-xref>);</text> </subclause>
<subclause id="H4F207D2798194E9DAC6C06D97DF0FC95"><enum>(VII)</enum><text>sections 302(b)(6) and 303(b)(7) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437aaa-1">42 U.S.C. 1437aaa–1(b)(6)</external-xref>, 1437aaa–2(b)(7)); and</text> </subclause>
<subclause id="HE312332EEBF7463380A7B0E7094088CE"><enum>(VIII)</enum><text>section 304(c)(4) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437aaa-3">42 U.S.C. 1437aaa–3(c)(4)</external-xref>);</text> </subclause></clause>
<clause id="H7838B3569B5B4F528CA240F26E33002C"><enum>(iii)</enum><text>section 302(a)(4) of the American Homeownership and Economic Opportunity Act of 2000 (<external-xref legal-doc="usc" parsable-cite="usc/42/1437f">42 U.S.C. 1437f</external-xref> note);</text> </clause>
<clause id="H8438E6D2098B47AD9C3397A8A828A7D9"><enum>(iv)</enum><text>sections 233(b)(2) and 258(b) of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable Housing Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/12773">42 U.S.C. 12773(b)(2)</external-xref>, 12808(b));</text> </clause>
<clause id="HD22588C902AD445A9977BB24972C00D1"><enum>(v)</enum><text>this section and section 101(e) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701x">12 U.S.C. 1701x</external-xref>, 1701w(e));</text> </clause>
<clause id="HC5F08DB27AA34C04A711846672C87039"><enum>(vi)</enum><text>section 220(d)(2)(G) of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (<external-xref legal-doc="usc" parsable-cite="usc/12/4110">12 U.S.C. 4110(d)(2)(G)</external-xref>);</text> </clause>
<clause id="HC8A287B474AA4C99B9A9A2DA43BF3500"><enum>(vii)</enum><text>sections 422(b)(6), 423(b)(7), 424(c)(4), 442(b)(6), and 443(b)(6) of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable Housing Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/12872">42 U.S.C. 12872(b)(6)</external-xref>, 12873(b)(7), 12874(c)(4), 12892(b)(6), and 12893(b)(6));</text> </clause>
<clause id="H817E901278ED47279146D3B544A597FF"><enum>(viii)</enum><text>section 491(b)(1)(F)(iii) of the McKinney-Vento Homeless Assistance Act (<external-xref legal-doc="usc" parsable-cite="usc/42/11408">42 U.S.C. 11408(b)(1)(F)(iii)</external-xref>);</text> </clause>
<clause id="H24DD69B30A8249B79F95A4E8CBDD5F48"><enum>(ix)</enum><text>sections 202(3) and 810(b)(2)(A) of the Native American Housing and Self-Determination Act of 1996 (<external-xref legal-doc="usc" parsable-cite="usc/25/4132">25 U.S.C. 4132(3)</external-xref>, 4229(b)(2)(A));</text> </clause>
<clause id="HF08F67AC7DC041E295058DFBED5CE76"><enum>(x)</enum><text>in the <act-name parsable-cite="NHA">National Housing Act</act-name>—</text>
<subclause id="H4AF7E57C1E21467A9804E136B647A8C"><enum>(I)</enum><text>in section 203 (<external-xref legal-doc="usc" parsable-cite="usc/12/1709">12 U.S.C. 1709</external-xref>), the penultimate undesignated paragraph of paragraph (2) of subsection (b), subsection (c)(2)(A), and subsection (r)(4);</text> </subclause>
<subclause id="HB57956530CE143C88BE2C36CC2FDE773"><enum>(II)</enum><text>subsections (a) and (c)(3) of section 237 (<external-xref legal-doc="usc" parsable-cite="usc/12/1715z-2">12 U.S.C. 1715z–2</external-xref>); and</text> </subclause>
<subclause id="H9CF92230B64548BD917D8E7F2D869BDC"><enum>(III)</enum><text>subsections (d)(2)(B) and (m)(1) of section 255 (<external-xref legal-doc="usc" parsable-cite="usc/12/1715z-20">12 U.S.C. 1715z–20</external-xref>);</text> </subclause></clause>
<clause id="H87A236D18EBB413BB0DB96AF67825E57"><enum>(xi)</enum><text>section 502(h)(4)(B) of the <act-name parsable-cite="HA49">Housing Act of 1949</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/1472">42 U.S.C. 1472(h)(4)(B)</external-xref>); and</text> </clause>
<clause id="H7BE28514FE15488E9315C327000558C8"><enum>(xii)</enum><text>section 508 of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1970 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701z-7">12 U.S.C. 1701z–7</external-xref>).</text> </clause></subparagraph>
<subparagraph id="HEE36FE4BFE1347B1B4B2657384D4C601"><enum>(C)</enum><header>Rental Housing counseling</header><text>For purposes of this subsection, the term <term>rental housing counseling</term> means counseling related to rental of residential property, which may include counseling regarding future homeownership opportunities and providing referrals for renters and prospective renters to entities providing counseling and shall include counseling related to such topics that is provided pursuant to—</text>
<clause id="HDD192E6F39FE4617A4D8BEC328E60485"><enum>(i)</enum><text>section 105(a)(20) of the <act-name parsable-cite="HCDA">Housing and Community Development Act of 1974</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/5305">42 U.S.C. 5305(a)(20)</external-xref>);</text> </clause>
<clause id="HD9E6200EFFF54013AE1FEC9232830017"><enum>(ii)</enum><text>in the <act-name parsable-cite="USHA">United States Housing Act of 1937</act-name>—</text>
<subclause id="H237AD219413E40CB900346F79C00A6ED"><enum>(I)</enum><text>section 9(e) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437g">42 U.S.C. 1437g(e)</external-xref>);</text> </subclause>
<subclause id="HE2441FF0A05E4EC49CB3E9ED0597159C"><enum>(II)</enum><text>section 18(a)(4)(D) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437p">42 U.S.C. 1437p(a)(4)(D)</external-xref>);</text> </subclause>
<subclause id="H3C9E38214DA64939B78E38D9A9658E1"><enum>(III)</enum><text>section 23(c)(4) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437u">42 U.S.C. 1437u(c)(4)</external-xref>);</text> </subclause>
<subclause id="H2A6E9F8E9D204902BF4D0547F600E159"><enum>(IV)</enum><text>section 32(e)(4) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437z-4">42 U.S.C. 1437z–4(e)(4)</external-xref>);</text> </subclause>
<subclause id="H71AE53C94209426991CC85E512BF009C"><enum>(V)</enum><text>section 33(d)(2)(B) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437z-5">42 U.S.C. 1437z–5(d)(2)(B)</external-xref>); and</text> </subclause>
<subclause id="HC02CCB8DC5FD401799BADB76D435185F"><enum>(VI)</enum><text>section 302(b)(6) (<external-xref legal-doc="usc" parsable-cite="usc/42/1437aaa-1">42 U.S.C. 1437aaa–1(b)(6)</external-xref>);</text> </subclause></clause>
<clause id="H9BB65B722099454F83E7501F4881AE42"><enum>(iii)</enum><text>section 233(b)(2) of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable Housing Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/12773">42 U.S.C. 12773(b)(2)</external-xref>);</text> </clause>
<clause id="HE50BCC1E5AF144A596D789BC7F3C255B"><enum>(iv)</enum><text>section 106 of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701x">12 U.S.C. 1701x</external-xref>);</text> </clause>
<clause id="H71E4A9A5672A4437B72C114532B8A373"><enum>(v)</enum><text>section 422(b)(6) of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable Housing Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/12872">42 U.S.C. 12872(b)(6)</external-xref>);</text> </clause>
<clause id="H6C5326E3184A4EA28D60A81F8E3108CB"><enum>(vi)</enum><text>section 491(b)(1)(F)(iii) of the McKinney-Vento Homeless Assistance Act (<external-xref legal-doc="usc" parsable-cite="usc/42/11408">42 U.S.C. 11408(b)(1)(F)(iii)</external-xref>);</text> </clause>
<clause id="H78E0C3061FAD409C900200A3C5A8E2FC"><enum>(vii)</enum><text>sections 202(3) and 810(b)(2)(A) of the Native American Housing and Self-Determination Act of 1996 (<external-xref legal-doc="usc" parsable-cite="usc/25/4132">25 U.S.C. 4132(3)</external-xref>, 4229(b)(2)(A)); and</text> </clause>
<clause id="H14290998269149548D4427EF692539B"><enum>(viii)</enum><text>the rental assistance program under section 8 of the <act-name parsable-cite="USHA">United States Housing Act of 1937</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/1437f">42 U.S.C. 1437f</external-xref>).</text> </clause></subparagraph></paragraph>
<paragraph id="HCCE7DEA8DEC044F08FCF00C2FBABB515"><enum>(2)</enum><header>Standards for materials</header><text>The Secretary, in conjunction with the advisory committee established under subsection (g)(4), shall establish standards for materials and forms to be used, as appropriate, by organizations providing homeownership counseling services, including any recipients of assistance pursuant to subsection (a)(4).</text> </paragraph>
<paragraph id="HD5B67604372D4458BF794F301359B6B2"><enum>(3)</enum><header>Mortgage software systems</header>
<subparagraph id="H09DA0E3CA9274DF0979140A9D19DB6C5"><enum>(A)</enum><header>Certification</header><text>The Secretary shall provide for the certification of various computer software programs for consumers to use in evaluating different residential mortgage loan proposals. The Secretary shall require, for such certification, that the mortgage software systems take into account—</text>
<clause id="H04971ECF9EC347DB8666C3B2DE52EF05"><enum>(i)</enum><text>the consumer’s financial situation and the cost of maintaining a home, including insurance, taxes, and utilities;</text> </clause>
<clause id="HE45D3F4AACA14408A98D939423882450"><enum>(ii)</enum><text>the amount of time the consumer expects to remain in the home or expected time to maturity of the loan;</text> </clause>
<clause id="HB2C1815DFB3945E58CF76C76EFD60016"><enum>(iii)</enum><text>such other factors as the Secretary considers appropriate to assist the consumer in evaluating whether to pay points, to lock in an interest rate, to select an adjustable or fixed rate loan, to select a conventional or government-insured or guaranteed loan and to make other choices during the loan application process.</text> </clause><continuation-text continuation-text-level="subparagraph">If the Secretary determines that available existing software is inadequate to assist consumers during the residential mortgage loan application process, the Secretary shall arrange for the development by private sector software companies of new mortgage software systems that meet the Secretary’s specifications.</continuation-text></subparagraph>
<subparagraph id="H37CEACEFA1874A69A356E9554E5B11AF"><enum>(B)</enum><header>Use and initial availability</header><text>Such certified computer software programs shall be used to supplement, not replace, housing counseling. The Secretary shall provide that such programs are initially used only in connection with the assistance of housing counselors certified pursuant to subsection (e).</text> </subparagraph>
<subparagraph id="HF6A8D1EA08FC44F1B7FEA41FD0051C5"><enum>(C)</enum><header>Availability</header><text>After a period of initial availability under subparagraph (B) as the Secretary considers appropriate, the Secretary shall take reasonable steps to make mortgage software systems certified pursuant to this paragraph widely available through the Internet and at public locations, including public libraries, senior-citizen centers, public housing sites, offices of public housing agencies that administer rental housing assistance vouchers, and housing counseling centers.</text> </subparagraph></paragraph>
<paragraph id="HF2E1DEC7989C48CCA952C993B55E00D"><enum>(4)</enum><header>National public service multimedia campaigns to promote housing counseling</header>
<subparagraph id="H5F0FD5AA23814E5885829783ACB567D0"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The Director of Housing Counseling shall develop, implement, and conduct national public service multimedia campaigns designed to make persons facing mortgage foreclosure, persons considering a subprime mortgage loan to purchase a home, elderly persons, persons who face language barriers, low-income persons, and other potentially vulnerable consumers aware that it is advisable, before seeking or maintaining a residential mortgage loan, to obtain homeownership counseling from an unbiased and reliable sources and that such homeownership counseling is available, including through programs sponsored by the Secretary of Housing and Urban Development.</text> </subparagraph>
<subparagraph id="H6ADF4649ED8B44CB9974F19E7B68B617"><enum>(B)</enum><header>Contact information</header><text display-inline="yes-display-inline">Each segment of the multimedia campaign under subparagraph (A) shall publicize the toll-free telephone number and web site of the Department of Housing and Urban Development through which persons seeking housing counseling can locate a housing counseling agency in their State that is certified by the Secretary of Housing and Urban Development and can provide advice on buying a home, renting, defaults, foreclosures, credit issues, and reverse mortgages.</text> </subparagraph>
<subparagraph id="HEDC31F542A75433ABFC484EB487628C1"><enum>(C)</enum><header>Authorization of appropriations</header><text display-inline="yes-display-inline">There are authorized to be appropriated to the Secretary, not to exceed $3,000,000 for fiscal years 2008, 2009, and 2010, for the develop, implement, and conduct of national public service multimedia campaigns under this paragraph.</text> </subparagraph></paragraph>
<paragraph id="H9D74BE10D7E24D069C66958B7442A918"><enum>(5)</enum><header>Education programs</header><text>The Secretary shall provide advice and technical assistance to States, units of general local government, and nonprofit organizations regarding the establishment and operation of, including assistance with the development of content and materials for, educational programs to inform and educate consumers, particularly those most vulnerable with respect to residential mortgage loans (such as elderly persons, persons facing language barriers, low-income persons, and other potentially vulnerable consumers), regarding home mortgages, mortgage refinancing, home equity loans, and home repair loans.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HA1B3ECBC075041BC9C1B10005F67E37D"><enum>(b)</enum><header>Conforming amendments to grant program for homeownership counseling organizations</header><text>Section 106(c)(5)(A)(ii) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701x">12 U.S.C. 1701x(c)(5)(A)(ii)</external-xref>) is amended—</text>
<paragraph id="H780D41D34DF9487AADF807B7AEE8DD9E"><enum>(1)</enum><text>in subclause (II), by striking <quote>and</quote> at the end;</text> </paragraph>
<paragraph id="H88CA876F301E4D208CF13F15A0FC3576"><enum>(2)</enum><text>in subclause (III) by striking the period at the end and inserting <quote>; and</quote>; and</text> </paragraph>
<paragraph id="H19A614F796264E8E8BBEB6D413D0ABB4"><enum>(3)</enum><text>by inserting after subclause (III) the following new subclause:</text>
<quoted-block id="HE0B0DB346438403D92E7F6A263882EFE">
<subclause id="H5BE0ECA2E0C1448C8CFFFFEBA2C98789"><enum>(IV)</enum><text>notify the housing or mortgage applicant of the availability of mortgage software systems provided pursuant to subsection (h)(4).</text> </subclause><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection></section>
<section id="H6229DF66580A4008A7AD1DDEC1D916DB"><enum>314.</enum><header>Grants for housing counseling assistance</header><text display-inline="no-display-inline">Section 106(a) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701x">12 U.S.C. 1701x(a)(3)</external-xref>) is amended by adding at the end the following new paragraph:</text>
<quoted-block act-name="Housing" id="H859973A248EA4E798BCF01D705BEB06B">
<paragraph id="H13B6532DC5284277A32028F629D58666" indent="up1"><enum>(4)</enum><header>Homeownership and rental counseling assistance</header>
<subparagraph id="H8DA9555512E94F9A82C54EC1AD1EB973"><enum>(A)</enum><header>In general</header><text>The Secretary shall make financial assistance available under this paragraph to States, units of general local governments, and nonprofit organizations providing homeownership or rental counseling (as such terms are defined in subsection (h)(1)).</text> </subparagraph>
<subparagraph id="H52DB9F4AD10249A5A5689C99C668E1C0"><enum>(B)</enum><header>Qualified entities</header><text>The Secretary shall establish standards and guidelines for eligibility of organizations (including governmental and nonprofit organizations) to receive assistance under this paragraph.</text> </subparagraph>
<subparagraph id="HA542B06ECC344046979D001D1C9596E3"><enum>(C)</enum><header>Distribution</header><text>Assistance made available under this paragraph shall be distributed in a manner that encourages efficient and successful counseling programs.</text> </subparagraph>
<subparagraph id="HE24A75EE9DAE48DBB5567933A6EB5354"><enum>(D)</enum><header>Authorization of appropriations</header><text>There are authorized to be appropriated $100,000,000 for each of fiscal years 2008 through 2011 for—</text>
<clause id="H9E3BA42920E84F63833C1FE248ED5E00"><enum>(i)</enum><text>the operations of the Office of Housing Counseling of the Department of Housing and Urban Development;</text> </clause>
<clause id="H14010D6B246F474CAFE6BC8969B53D37"><enum>(ii)</enum><text>the responsibilities of the Secretary under paragraphs (2) through (6) of subsection (h); and</text> </clause>
<clause id="HD5C4E606E3F54C6EA79F40CD1478B93F"><enum>(iii)</enum><text>assistance pursuant to this paragraph for entities providing homeownership and rental counseling.</text> </clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HD306602E83634BF6A042BE49402209FF"><enum>315.</enum><header>Requirements to use HUD-certified counselors under HUD programs</header><text display-inline="no-display-inline">Section 106(e) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701x">12 U.S.C. 1701x(e)</external-xref>) is amended—</text>
<paragraph id="H0E1C2567C22F4D8490803586B5EDD1D"><enum>(1)</enum><text>by striking paragraph (1) and inserting the following new paragraph:</text>
<quoted-block id="H567C8F193E05448685D8C1A012ECEBB3">
<paragraph id="HBA0B0944848A48B59FE1D6AEDE2981B5"><enum>(1)</enum><header>Requirement for assistance</header><text>An organization may not receive assistance for counseling activities under subsection (a)(1)(iii), (a)(2), (a)(4), (c), or (d) of this section, or under section 101(e), unless the organization, or the individuals through which the organization provides such counseling, has been certified by the Secretary under this subsection as competent to provide such counseling.</text> </paragraph><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H8934189C51FA4CFBB826971FDA13A5AA"><enum>(2)</enum><text>in paragraph (2)—</text>
<subparagraph id="HC71ECA5979AE4184B3516251F16E1808"><enum>(A)</enum><text>by inserting <quote>and for certifying organizations</quote> before the period at the end of the first sentence; and</text> </subparagraph>
<subparagraph id="H9F214A2012C44ABE80C5D5DEDAB3D868"><enum>(B)</enum><text>in the second sentence by striking <quote>for certification</quote> and inserting <quote>, for certification of an organization, that each individual through which the organization provides counseling shall demonstrate, and, for certification of an individual,</quote>;</text> </subparagraph></paragraph>
<paragraph id="HD1D588AE69D04DA98237CF3D95E6E51C"><enum>(3)</enum><text>in paragraph (3), by inserting <quote>organizations and</quote> before <quote>individuals</quote>;</text> </paragraph>
<paragraph id="HB4124E7BCDD447448664C58D23B5D5B"><enum>(4)</enum><text>by redesignating paragraph (3) as paragraph (5); and</text> </paragraph>
<paragraph id="HE79D5AE0C84D420F8930FC059BC0F707"><enum>(5)</enum><text>by inserting after paragraph (2) the following new paragraphs:</text>
<quoted-block id="H3DE6CA37FAAA468DA9884099131F2CA">
<paragraph id="HC7456DF833EE48C5B32425A485FAB921"><enum>(3)</enum><header>Requirement under hud programs</header><text>Any homeownership counseling or rental housing counseling (as such terms are defined in subsection (h)(1)) required under, or provided in connection with, any program administered by the Department of Housing and Urban Development shall be provided only by organizations or counselors certified by the Secretary under this subsection as competent to provide such counseling.</text> </paragraph>
<paragraph id="HA2B721DFCE504BC684D2EEC489962B8"><enum>(4)</enum><header>Outreach</header><text>The Secretary shall take such actions as the Secretary considers appropriate to ensure that individuals and organizations providing homeownership or rental housing counseling are aware of the certification requirements and standards of this subsection and of the training and certification programs under subsection (f).</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section>
<section id="HA74A041799AE4E088815B6100A6A87D"><enum>316.</enum><header>Study of defaults and foreclosures</header><text display-inline="no-display-inline">The Secretary of Housing and Urban Development shall conduct an extensive study of the root causes of default and foreclosure of home loans, using as much empirical data as are available. The study shall also examine the role of escrow accounts in helping prime and nonprime borrowers to avoid defaults and foreclosures. Not later than 12 months after the date of the enactment of this Act, the Secretary shall submit to the Congress a preliminary report regarding the study. Not later than 24 months after such date of enactment, the Secretary shall submit a final report regarding the results of the study, which shall include any recommended legislation relating to the study, and recommendations for best practices and for a process to identify populations that need counseling the most.</text> </section>
<section id="H90F09AD69B7240119512C6DEF05D11B1"><enum>317.</enum><header>Definitions for counseling-related programs</header><text display-inline="no-display-inline">Section 106 of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701x">12 U.S.C. 1701x</external-xref>), as amended by the preceding provisions of this title, is further amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Housing" id="H63FEA91440024EC9B6A02CE28260D2A5">
<subsection id="H1E14707794F94B669B00043900495B86"><enum>(i)</enum><header>Definitions</header><text>For purposes of this section:</text>
<paragraph id="H5ED2ED769256496C8DCF7BDFE6472827"><enum>(1)</enum><header>Nonprofit organization</header><text>The term <term>nonprofit organization</term> has the meaning given such term in section 104(5) of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable Housing Act</act-name> (<external-xref legal-doc="usc" parsable-cite="usc/42/12704">42 U.S.C. 12704(5)</external-xref>), except that subparagraph (D) of such section shall not apply for purposes of this section.</text> </paragraph>
<paragraph id="HD41C9E574CDF440A8E8DFCBC31E00E2"><enum>(2)</enum><header>State</header><text>The term <term>State</term> means each of the several States, the Commonwealth of Puerto Rico, the District of Columbia, the Commonwealth of the Northern Mariana Islands, Guam, the Virgin Islands, American Samoa, the Trust Territories of the Pacific, or any other possession of the United States.</text> </paragraph>
<paragraph id="H544EFFF569054C309D8F2285AAD7CC09"><enum>(3)</enum><header>Unit of general local government</header><text>The term <term>unit of general local government</term> means any city, county, parish, town, township, borough, village, or other general purpose political subdivision of a State.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HB0E98EB8015C4C0A9EBBA52C8FE715B"><enum>318.</enum><header>Updating and simplification of mortgage information booklet</header><text display-inline="no-display-inline">Section 5 of the Real Estate Settlement Procedures Act of 1974 (<external-xref legal-doc="usc" parsable-cite="usc/12/2604">12 U.S.C. 2604</external-xref>) is amended—</text>
<paragraph id="H6CF35194D9EB4214AD553C050068B018"><enum>(1)</enum><text>in the section heading, by striking <quote><header-in-text level="section" style="traditional">special</header-in-text></quote> and inserting <quote><header-in-text level="section" style="traditional">home buying</header-in-text></quote>;</text> </paragraph>
<paragraph id="H93A70FA87BE940A783C4AD1552515273"><enum>(2)</enum><text>by striking subsections (a) and (b) and inserting the following new subsections:</text>
<quoted-block id="HC6732B6687AF4007AF5603FFEAE72D79">
<subsection id="H216E5EAE3DE5498B925422838D1E9C00"><enum>(a)</enum><header>Preparation and distribution</header><text>The Secretary shall prepare, at least once every 5 years, a booklet to help consumers applying for federally related mortgage loans to understand the nature and costs of real estate settlement services. The Secretary shall prepare the booklet in various languages and cultural styles, as the Secretary determines to be appropriate, so that the booklet is understandable and accessible to homebuyers of different ethnic and cultural backgrounds. The Secretary shall distribute such booklets to all lenders that make federally related mortgage loans. The Secretary shall also distribute to such lenders lists, organized by location, of homeownership counselors certified under section 106(e) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701x">12 U.S.C. 1701x(e)</external-xref>) for use in complying with the requirement under subsection (c) of this section.</text> </subsection>
<subsection id="H035BB2743C7B4652B67557E9FB6BADA5"><enum>(b)</enum><header>Contents</header><text>Each booklet shall be in such form and detail as the Secretary shall prescribe and, in addition to such other information as the Secretary may provide, shall include in plain and understandable language the following information:</text>
<paragraph id="HA7FB83E155CF4D1EB92866C185C234B9"><enum>(1)</enum><text>A description and explanation of the nature and purpose of the costs incident to a real estate settlement or a federally related mortgage loan. The description and explanation shall provide general information about the mortgage process as well as specific information concerning, at a minimum—</text>
<subparagraph id="H70918E61A2774A5684CE1B802F6BB247"><enum>(A)</enum><text>balloon payments;</text> </subparagraph>
<subparagraph id="HD91178128D8D4E14B631E36FA607A7BD"><enum>(B)</enum><text>prepayment penalties; and</text> </subparagraph>
<subparagraph id="H2C2D0FBDA9FD43EDA7875B6E9F394975"><enum>(C)</enum><text>the trade-off between closing costs and the interest rate over the life of the loan.</text> </subparagraph></paragraph>
<paragraph id="H31E17F12A2FA44E4911EF5F300F56862"><enum>(2)</enum><text>An explanation and sample of the uniform settlement statement required by section 4.</text> </paragraph>
<paragraph id="H3609F29E985149EDA1065C42586DB6AE"><enum>(3)</enum><text>A list and explanation of lending practices, including those prohibited by the Truth in Lending Act or other applicable Federal law, and of other unfair practices and unreasonable or unnecessary charges to be avoided by the prospective buyer with respect to a real estate settlement.</text> </paragraph>
<paragraph id="H7DC1BF265C3E42D297BE1681AA9F2311"><enum>(4)</enum><text>A list and explanation of questions a consumer obtaining a federally related mortgage loan should ask regarding the loan, including whether the consumer will have the ability to repay the loan, whether the consumer sufficiently shopped for the loan, whether the loan terms include prepayment penalties or balloon payments, and whether the loan will benefit the borrower.</text> </paragraph>
<paragraph id="H4112349DC64342D7B8A0F16971D33BF4"><enum>(5)</enum><text>An explanation of the right of rescission as to certain transactions provided by sections 125 and 129 of the Truth in Lending Act.</text> </paragraph>
<paragraph id="H62CA7DE20A994FFBA5DA71F0B3FEDF5B"><enum>(6)</enum><text>A brief explanation of the nature of a variable rate mortgage and a reference to the booklet entitled <quote>Consumer Handbook on Adjustable Rate Mortgages</quote>, published by the Board of Governors of the Federal Reserve System pursuant to <external-xref legal-doc="regulation" parsable-cite="cfr/12/226.19">section 226.19(b)(1)</external-xref> of title 12, Code of Federal Regulations, or to any suitable substitute of such booklet that such Board of Governors may subsequently adopt pursuant to such section.</text> </paragraph>
<paragraph id="H941736A3BC8B46089088D75FC5B130CB"><enum>(7)</enum><text>A brief explanation of the nature of a home equity line of credit and a reference to the pamphlet required to be provided under section 127A of the Truth in Lending Act.</text> </paragraph>
<paragraph id="HE226AC5E332E4826922011333F32FAA"><enum>(8)</enum><text>Information about homeownership counseling services made available pursuant to section 106(a)(4) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701x">12 U.S.C. 1701x(a)(4)</external-xref>), a recommendation that the consumer use such services, and notification that a list of certified providers of homeownership counseling in the area, and their contact information, is available.</text> </paragraph>
<paragraph id="H63E3D89895F94B488F7F23DACD38B427"><enum>(9)</enum><text>An explanation of the nature and purpose of escrow accounts when used in connection with loans secured by residential real estate and the requirements under section 10 of this Act regarding such accounts.</text> </paragraph>
<paragraph id="H77571EBED55E4075B9F6E9DBA76E8CB7"><enum>(10)</enum><text>An explanation of the choices available to buyers of residential real estate in selecting persons to provide necessary services incidental to a real estate settlement.</text> </paragraph>
<paragraph id="H65B657A1A59D4F5A9EFFAC942DA8F48"><enum>(11)</enum><text>An explanation of a consumer’s responsibilities, liabilities, and obligations in a mortgage transaction.</text> </paragraph>
<paragraph id="H38632C9DD1E94C74A71FD44FD4E357E"><enum>(12)</enum><text>An explanation of the nature and purpose of real estate appraisals, including the difference between an appraisal and a home inspection.</text> </paragraph>
<paragraph id="H9DA4B20CE27241DFB09C4B39FCBC0CF"><enum>(13)</enum><text>Notice that the Office of Housing of the Department of Housing and Urban Development has made publicly available a brochure regarding loan fraud and a World Wide Web address and toll-free telephone number for obtaining the brochure.</text> </paragraph><continuation-text continuation-text-level="subsection">The booklet prepared pursuant to this section shall take into consideration differences in real estate settlement procedures that may exist among the several States and territories of the United States and among separate political subdivisions within the same State and territory.</continuation-text></subsection><after-quoted-block>;</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H73F860B219224121A227DEF62B1EB9E"><enum>(3)</enum><text>in subsection (c), by striking the last sentence and inserting the following new sentence: <quote>Each lender shall also include with the booklet a reasonably complete or updated list of homeownership counselors who are certified pursuant to section 106(e) of the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of 1968 (<external-xref legal-doc="usc" parsable-cite="usc/12/1701x">12 U.S.C. 1701x(e)</external-xref>) and located in the area of the lender.</quote>; and</text> </paragraph>
<paragraph id="H41B9110B9FD04E078396D8F53447A4DD"><enum>(4)</enum><text>in subsection (d), by inserting after the period at the end of the first sentence the following: <quote>The lender shall provide the HUD-issued booklet in the version that is most appropriate for the person receiving it.</quote>.</text> </paragraph></section></subtitle>
<enum>IV</enum><header>Prohibition on Abusive Practices</header>
<subtitle id="HB95D641D4116473E9486B17269BA1973"><enum>A</enum><header>Mortgage servicing</header>
<section id="HE5B3B16C77274FB0A1B1A9B00092CEFF"><enum>401.</enum><header>Escrow and impound accounts relating to certain consumer credit transactions</header>
<subsection id="H493D76C9A9144ADD8B5892A59185F200"><enum>(a)</enum><header>In general</header><text>Chapter 2 of the Truth in Lending Act (<external-xref legal-doc="usc" parsable-cite="usc/15/1631">15 U.S.C. 1631 et seq.</external-xref>) is amended by inserting after section 129A (as added by section 301(a) of this Act) the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H9E74237FCADD4A88A0CEC6DAD942A3C8" style="OLC">
<section id="HF97175EFEA93493EAF014CFB0867F61B"><enum>129B.</enum><header>Escrow or impound accounts relating to certain consumer credit transactions</header>
<subsection id="H07A693E5CF13499EAA55D56C51B3FFE2"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">A creditor, in connection with the formation or consummation of a subprime mortgage, shall establish, at the time of the consummation of such mortgage, an escrow or impound account for the payment of taxes and hazard insurance as provided in, and in accordance with, this section, unless such an account already exists.</text> </subsection>
<subsection id="HC759562DEAEF415AABCDE7F659C47300"><enum>(b)</enum><header>Duration of escrow or impound account</header><text display-inline="yes-display-inline">An escrow or impound account established pursuant to this section, shall remain in existence for a minimum period of 5 years, unless the underlying mortgage is terminated.</text> </subsection>
<subsection id="H630443EACC6D4C74AD5F3F69C37E3100"><enum>(c)</enum><header>Administration of escrow or impound accounts</header><text display-inline="yes-display-inline">Except as may otherwise be provided for in this title or in regulations prescribed by the Board, escrow or impound accounts established pursuant to this section shall be established in an insured depository institution.</text> </subsection>
<subsection id="H36EE60A398FE422AABF9A55D3DC928FE"><enum>(d)</enum><header>Disclosures relating to escrow or impound account</header>
<paragraph id="HBF47280750794A29A599913FE200E44F"><enum>(1)</enum><header>In general</header><text>In the case of any impound, trust, or escrow account that is subject to this section, the creditor shall disclose by written notice to the consumer within 3 business days before the consummation of the consumer credit transaction giving rise to such account the following information:</text>
<subparagraph id="H7F1E6DF1604F47BA846995FF56A12049"><enum>(A)</enum><text display-inline="yes-display-inline">The fact that an escrow or impound account will be established at consummation of the transaction.</text> </subparagraph>
<subparagraph id="HE5324C622C4C42748E941016EF6231F6"><enum>(B)</enum><text>The amount required at closing to initially fund the escrow or impound account.</text> </subparagraph>
<subparagraph id="HA2E51702165B46908FFD5F52E038E8DA"><enum>(C)</enum><text>The amount in the initial year of the estimated taxes and hazard insurance premiums.</text> </subparagraph>
<subparagraph id="H9C0C945BEE9C4294BAF2998035F6003B"><enum>(D)</enum><text>The estimated monthly amount payable for taxes and hazard insurance.</text> </subparagraph>
<subparagraph id="HB356E4CCDE584194B6E202CAFF01A94F"><enum>(E)</enum><text>The fact that if the consumer chooses to terminate the account after 5 years, the consumer will become responsible for the payment of all taxes and hazard insurance on the property unless a new escrow or impound account is established.</text> </subparagraph></paragraph>
<paragraph id="H648A38A22607447A919EE7F9C3443171"><enum>(2)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Board shall prescribe by regulation the contents of the notice required in paragraph (1) no later than 90 days after the date of the enactment of the Fair Mortgage Practices Act of 2007.</text> </paragraph></subsection>
<subsection id="HB0D21BBA2EDC45CDA2105D8FBFBB461C"><enum>(e)</enum><header>Hazard insurance defined</header><text display-inline="yes-display-inline">For purposes of this section, the term <term>hazard insurance</term> shall have the same meaning as provided under the law of the State where the real property securing the consumer credit transaction is located.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H718F2C1C838141569C83AC23EDBC6185"><enum>(b)</enum><header>Clerical amendment</header><text>The table of sections for chapter 2 of the Truth in Lending Act is amended by inserting after the item relating to section 129A (as added by section 301(a) of this Act) the following new item:</text>
<quoted-block display-inline="no-display-inline" id="H8D5E6B94E28243C6B45556BC54006857" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">129B. Escrow or impound accounts relating to certain consumer credit transactions.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H900AFE1646C949A8A8893B313D9978FF"><enum>402.</enum><header>Disclosure notice required for consumers who opt out of escrow services</header><text display-inline="no-display-inline">Section 129B of the Truth in Lending Act (as added by section 401(a) of this title) is amended by adding at the end the following new subsections:</text>
<quoted-block display-inline="no-display-inline" id="H85DE24C6E19B474DB31D213C6888274B" style="OLC">
<subsection id="H3789A2C7F1284717BA21C439DA8A770"><enum>(g)</enum><header>Disclosure notice required for consumers who opt out of escrow services</header>
<paragraph id="HAA74233279294FF4A36768CC16DC0018"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">If an impound, trust, or other type of account for the payment of property taxes, insurance premiums, or other purposes relating to property securing a consumer credit transaction is not established in connection with any consumer credit transaction secured by the principal dwelling of the consumer, or if a consumer chooses, at any time after such an account is established in connection with any such transaction, to close such account, the creditor shall provide a timely and clearly written disclosure to the consumer that advises the consumer of the responsibilities of the consumer and implications for the consumer in the absence of any such account, including—</text>
<subparagraph id="H89CDC615C3A6480185C6947972D2F835"><enum>(A)</enum><text display-inline="yes-display-inline">information concerning any applicable fees associated with either the nonestablishment of any such account at the time of the transaction, or any subsequent closure of any such account;</text> </subparagraph>
<subparagraph id="H32B7377BE77749B189DE03A2003910C2"><enum>(B)</enum><text display-inline="yes-display-inline">clear and prominent notice that the consumer is responsible for personally and directly paying the non-escrowed items, in addition to paying the mortgage loan payment, in the absence of any such account; and</text> </subparagraph>
<subparagraph id="HAF8D6A26724B4A4099DDD425BEC09F7B"><enum>(C)</enum><text display-inline="yes-display-inline">a clear explanation of the consequences of any failure to pay non-escrowed items, including the possible requirement for direct placement of insurance by the creditor and the potentially higher cost (including any potential commission payments to the servicer) or reduced coverage for the consumer in the event of any such creditor-placed insurance.</text> </subparagraph></paragraph>
<paragraph id="HC9622F86F307455A8F912720ABB79BB6"><enum>(2)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Board shall prescribe such regulations as are necessary to implement the requirements of this subsection in final form before the end of the 12-month period beginning on the date of the enactment of the Fair Mortgage Practices Act of 2007.</text> </paragraph></subsection>
<subsection id="H8BB4C4AFB5564969A0929851F664F11B"><enum>(h)</enum><header>Preemption</header><text display-inline="yes-display-inline">The provisions of this section requiring disclosures relating to impound, trust, or escrow accounts, including disclosures under subsection (g) to a consumer shall supersede the provisions of the law of any State relating to such disclosures.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section></subtitle>
<subtitle id="H3B9FD9DFA5274FF7BD1C83CC00007D55"><enum>B</enum><header>Nontraditional mortgage provisions</header>
<section id="H1CBC1B66CF7B48D5881652BE9180F4DA"><enum>411.</enum><header>Prepayment penalties</header><text display-inline="no-display-inline">Section 129A of the Truth in Lending Act (as added by section 301(a)) is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H3590A983E46246E1B4C38F569ED9B9E" style="OLC">
<subsection id="H8EA81C0E5394405DB044A1427258772B"><enum>(b)</enum><header>Limitation on prepayment penalties for hybrid ARMs</header>
<paragraph id="H492ED0D995184A5C95A76D3FBCA184DB"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In the case of a consumer credit transaction secured by the consumer’s principal residence with a fixed interest rate for an introductory period that resets to a variable interest rate after such period, the transaction may not contain terms under which a consumer must pay a prepayment penalty for paying all or part of the principal before the date on which the principal is due at any time after the beginning of the 120-day period ending on the date of the reset to a variable interest rate.</text> </paragraph>
<paragraph id="H9B418C0D157640F7BF425CF753A7E7DC"><enum>(2)</enum><header>Preemption</header><text display-inline="yes-display-inline">The provisions of this section relating to prepayment penalties with respect to any consumer credit transaction secured by the consumer’s principal residence with a fixed interest rate for an introductory period that resets to a variable interest rate after such period shall supersede the provisions of the law of any State relating to prepayment penalties with respect to any such transaction.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="H514E47ADA3B340E0BD021E4FD3D7061E"><enum>412.</enum><header>Ability to repay</header><text display-inline="no-display-inline">Section 129A of the Truth in Lending Act is amended by inserting after subsection (b) (as added by section 411 of this subtitle) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H86A07904DE3B4962BFCB4E55421CEF8" style="OLC">
<subsection id="H175A6A8AFECB4A38AA3057A0B87036A9"><enum>(c)</enum><header>Ability To repay</header><text>The Board, in consultation with other Federal banking agencies (as defined in section 3 of the Federal Deposit Insurance Act), shall prescribe regulations in accordance with section 105, or issue guidance, that encourages any creditor with respect to a consumer credit transaction secured by the consumer’s principal residence to evaluate the consumer’s ability to repay the transaction under the terms of the transaction.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section></subtitle>
<enum>V</enum><header>Mortgage Fraud</header>
<section id="HE3BC25E276EA48948F035F002754FDC1"><enum>501.</enum><header>Authorization of appropriations for mortgage fraud prevention, investigation, and prosecution</header><text display-inline="no-display-inline">For fiscal years 2008, 2009, 2010, 2011, and 2012, there are authorized to be appropriated to the Attorney General a total of $20,000,000, in addition to other amounts authorized to be appropriated to the Attorney General for any such fiscal year, for the purpose of enhancing the efforts of the Department of Justice and the Federal Bureau of Investigation to prevent, investigate, and prosecute mortgage fraud.</text> </section>
<enum>VI</enum><header>Appraisal Activities</header>
<section id="HC97D61F7FD1A4761B6586D7046D8CA72"><enum>601.</enum><header>Property appraisal requirements</header><text display-inline="no-display-inline">Section 129A of the Truth in Lending Act is amended by inserting after subsection (c) (as added by section 412 of this Act) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H770CE49BA4B247BBB5F9744CDDF61683" style="OLC">
<subsection id="HA4E257DF4EDE4E6EA1B3B006AC0306"><enum>(d)</enum><header>Property appraisal requirements</header>
<paragraph id="H2E4BE19637BF42BAA812C39480F405D7"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A creditor may not extend credit in the form of a subprime mortgage to any consumer without first obtaining a written appraisal of the property to be mortgaged prepared in accordance with the requirements of this subsection.</text> </paragraph>
<paragraph id="HC32D151F83B14EDE87B5CF7DA008204"><enum>(2)</enum><header>Appraisal requirements</header>
<subparagraph id="H5CBB6AAFEF98497B9F942400444100C4"><enum>(A)</enum><header>Physical inspection</header><text>An appraisal of property to be secured by a subprime mortgage does not meet the requirement of this subsection unless it is performed by a qualified appraiser who conducts a physical inspection of the mortgaged property.</text> </subparagraph>
<subparagraph id="H6EDBE5D2B0D34231BE478C9DE653FC3D"><enum>(B)</enum><header>Second appraisal under certain circumstances</header>
<clause id="H284EDE5FE73643C5BBE9DEDC9704BF9B"><enum>(i)</enum><header>In general</header><text>If the purpose of the subprime mortgage is to finance the purchase or acquisition of the mortgaged property from a person within 180 days of the purchase or acquisition of such property by that person at a price that was lower than the current sale price of the property, the creditor shall obtain a second appraisal from a second qualified appraiser that supports the current sale price of the property.</text> </clause>
<clause id="H4EE97B20AA0E4402B6EB02E6A5C41F02"><enum>(ii)</enum><header>No cost to consumer</header><text>The cost of any second appraisal required under clause (i) may not be charged to the consumer.</text> </clause></subparagraph>
<subparagraph id="H8EF13C27354C4704B26DEA2C09F0616B"><enum>(C)</enum><header>Qualified appraiser defined</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <term>qualified appraiser</term> means a person who—</text>
<clause id="H5FA7191621844F2EBF6D61C5F4CB5EE1"><enum>(i)</enum><text>is certified or licensed by the State in which property to be appraised is located; and</text> </clause>
<clause id="HD9AE3F77506744B2B419C3FBCFB299B9"><enum>(ii)</enum><text>performs each appraisal in conformity with the Uniform Standards of Professional Appraisal Practice and Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, and the regulations prescribed under such title, as in effect on the date of the appraisal.</text> </clause></subparagraph></paragraph>
<paragraph id="HFCB131717B90437592E572FA451173E2"><enum>(3)</enum><header>Free copy of appraisal</header><text display-inline="yes-display-inline">A creditor shall provide 1 copy of each appraisal conducted in accordance with this subsection in connection with a higher-cost mortgage to the consumer without charge.</text> </paragraph>
<paragraph id="HE95BA698BAD04C598D1BB8FA8D4E3326"><enum>(4)</enum><header>Violations</header><text display-inline="yes-display-inline">In addition to any other liability to any person under this title, a creditor found to have willfully failed to obtain an appraisal as required in this subsection shall be liable to the consumer for the sum of $2,000.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>
<section id="HC7829B9DC74D473E8185EAB05BE02E3B"><enum>602.</enum><header>Amendments relating to appraisal subcommittee of FIEC, appraiser independence, and approved appraiser education</header>
<subsection id="HEEAB206AA5714830B182B6E816F85C34"><enum>(a)</enum><header>Annual report of appraisal subcommittee</header><text>Section 1103(a)(4) of Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (<external-xref legal-doc="usc" parsable-cite="usc/12/3332">12 U.S.C. 3332(a)(4)</external-xref>) is amended by inserting <quote>in detail the activities of the Appraisal Subcommittee and</quote> after <quote>which describes</quote>.</text> </subsection>
<subsection id="H295208A12D8B46FD873E3B80EC01E758"><enum>(b)</enum><header>Open meetings</header><text display-inline="yes-display-inline">Section 1104(b) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (<external-xref legal-doc="usc" parsable-cite="usc/12/3333">12 U.S.C. 3333(b)</external-xref>) is amended by inserting <quote>in public session after notice to the general public</quote> after <quote>shall meet</quote>.</text> </subsection>
<subsection id="H01B64CB1266848508223FED4838CA9B0"><enum>(c)</enum><header>Regulations</header><text>Section 1106 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (<external-xref legal-doc="usc" parsable-cite="usc/12/3335">12 U.S.C. 3335</external-xref>) is amended by inserting <quote>prescribe regulations after notice and opportunity for comment,</quote> after <quote>hold hearings</quote>.</text> </subsection>
<subsection id="HDB15508749A6461DA5BECED41F21DC5"><enum>(d)</enum><header>Criteria</header><text>Section 1116 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (<external-xref legal-doc="usc" parsable-cite="usc/12/3345">12 U.S.C. 3345</external-xref>) is amended—</text>
<paragraph id="HB9B264017AA84B8F9319DAC735127669"><enum>(1)</enum><text>in subsection (c), by inserting <quote>whose criteria for the licensing of a real estate appraiser currently meet or exceed the minimum criteria issued by the Appraiser Qualifications Board of The Appraiser Foundation for the licensing of real estate appraisers</quote> before the period at the end; and</text> </paragraph>
<paragraph id="HAE89CB16676C4F298228395D48BEC056"><enum>(2)</enum><text>by striking subsection (e).</text> </paragraph></subsection>
<subsection id="H38EF62EC700A43BBB34286CA30A8B463"><enum>(e)</enum><header>Temporary practice</header><text>Section 1122(a)(1) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (<external-xref legal-doc="usc" parsable-cite="usc/12/3351">12 U.S.C. 3351(a)(1)</external-xref>) is amended—</text>
<paragraph id="H5C090355A76A498B89AF85A2153ED8BE"><enum>(1)</enum><text>by striking subparagraph (A);</text> </paragraph>
<paragraph id="H72BE69A7BDA7466BB29796FDFCC98436"><enum>(2)</enum><text>by redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively; and</text> </paragraph>
<paragraph id="H3E9905FC97A64BFF98C508887B3581B9"><enum>(3)</enum><text>by moving the left margin of such subparagraphs 2 ems to the right.</text> </paragraph></subsection>
<subsection id="H13F1834BC5A9422AA5F64DA91C480049"><enum>(f)</enum><header>Reciprocity</header><text>Subsection (b) of section 1122 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (<external-xref legal-doc="usc" parsable-cite="usc/12/3351">12 U.S.C. 3351(b)</external-xref>) is amended to read as follows:</text>
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<subsection id="HD16DF33EBDF94F55BB5778C02B8E3964"><enum>(b)</enum><header>Reciprocity</header><text display-inline="yes-display-inline">A State appraiser certifying or licensing agency shall issue a reciprocal certification or license for an individual from another State when—</text>
<paragraph id="H1821BB06D48C48C5A418FD64FAB443FB"><enum>(1)</enum><text>the appraiser licensing and certification program of such other State is in compliance with the provisions of this title; and</text> </paragraph>
<paragraph id="H9D39FF8CD1244F5E86F4ABB7BAB59F00"><enum>(2)</enum><text>the appraiser holds a valid certification from a State whose requirements for certification or licensing meet the requirements for certification and licensing as established by the Appraiser Qualifications Board of The Appraisal Foundation.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HD000C4A7DA174E63AC7152918129AE2E"><enum>(g)</enum><header>Consideration of professional appraisal designations</header><text>Section 1122(d) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (<external-xref legal-doc="usc" parsable-cite="usc/12/3351">12 U.S.C. 3351(d)</external-xref>) is amended by adding at the end the following new sentence: <quote>Consideration may be given for professional appraisal designations conferred by sponsoring organizations of The Appraisal Foundation as an indication of proficiency in addition to the criteria established by certification or licensing.</quote>.</text> </subsection>
<subsection id="HA8D9DB0BE06F40D6B9E9AD9896AD42E8"><enum>(h)</enum><header>Appraiser independence</header><text>Section 1122 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (<external-xref legal-doc="usc" parsable-cite="usc/12/3351">12 U.S.C. 3351</external-xref>) is amended by adding at the end the following new subsection:</text>
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<subsection id="H1F5401388D934A0184EF5331814C3C95"><enum>(g)</enum><header>Appraiser independence</header>
<paragraph id="H0D183EB0796F4AF98DE5E0F464295C8"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">No mortgage lender, mortgage broker or mortgage banker, real estate broker, nor any other person with an interest in a real estate transaction involving an appraisal shall improperly influence or attempt to improperly influence, through coercion, extortion, or bribery, the development, reporting, result, or review of a real estate appraisal sought in connection with a mortgage loan.</text> </paragraph>
<paragraph id="H209CF81FD9874386B2D1FFB541342426"><enum>(2)</enum><header>Exceptions</header><text>The requirements of paragraph (1) shall not be construed as prohibiting a mortgage lender, mortgage broker, mortgage banker, real estate broker, or any other person with an interest in a real estate transaction from asking an appraiser to provide 1 or more of the following services:</text>
<subparagraph id="H02101C2D3F194EB1BB003DF5D14634B1"><enum>(A)</enum><text>Consider additional, appropriate property information.</text> </subparagraph>
<subparagraph id="H10E7E326F42F42009EA82D678FB83388"><enum>(B)</enum><text>Provide further detail, substantiation, or explanation for the appraiser’s value conclusion.</text> </subparagraph>
<subparagraph id="HCF3D70DE0C054A38AD5732258670BDC7"><enum>(C)</enum><text>Correct errors in the appraisal report.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H007B60B2AC154554A4696500AF03C7F1"><enum>(i)</enum><header>Appraiser education</header><text>Section 1122 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (<external-xref legal-doc="usc" parsable-cite="usc/12/3351">12 U.S.C. 3351</external-xref>) is amended by inserting after subsection (g) (as added by subsection (h) of this section) the following new subsection:</text>
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<subsection id="H2AD0A10161B1416F941331CD22E8A7CD"><enum>(h)</enum><header>Approved education</header><text display-inline="yes-display-inline">A State certifying or licensing agency shall accept courses and seminars approved by the Appraiser Qualification Board’s Course Approval Program.</text> </subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subsection></section>
<section id="H8F8B7E2D9A4A43218B5B01001139B242"><enum>603.</enum><header>Study required on improvements in appraisal process and compliance programs</header>
<subsection id="HD5779C49DA324B9A91FD848CE0B7FF60"><enum>(a)</enum><header>Study</header><text>The Comptroller General shall conduct a comprehensive study on possible improvements in the appraisal process generally, and specifically on the consistency in and the effectiveness of, and possible improvements in, State compliance efforts and programs in accordance with title XI of Financial Institutions Reform, Recovery, and Enforcement Act of 1989.</text> </subsection>
<subsection id="H460F76884DC84A0EAFE01B2DD390E16D"><enum>(b)</enum><header>Report</header><text display-inline="yes-display-inline">Before the end of the 18-month period beginning on the date of the enactment of this Act, the Comptroller General shall submit a report on the study under subsection (a) to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate, together with such recommendations for administrative or legislative action, at the Federal or State level, as the Comptroller General may determine to be appropriate.</text> </subsection></section>
<enum>VII</enum><header>Incentives for best practices</header>
<section id="HF61D0492156A4ACD88CB533CA3C6B906"><enum>701.</enum><header>CRA credit for certain lender practices</header><text display-inline="no-display-inline">Section 804 of the Community Reinvestment Act of 1977 (<external-xref legal-doc="usc" parsable-cite="usc/12/2903">12 U.S.C. 2903</external-xref>) is amended by adding at the end the following new subsection:</text>
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<subsection id="H3BB35F87773441E9B466A2B1027E66F9"><enum>(d)</enum><header>Efforts on behalf of subprime borrowers</header><text>In assessing and taking into account, under subsection (a), the record of a regulated financial institution, the appropriate Federal financial supervisory agency may consider as a factor, in accordance with such guidelines as the agency may issue, any of the following programs undertaken by the institution:</text>
<paragraph id="HB0DD59727CA74BFCA88EF05488958531"><enum>(1)</enum><text display-inline="yes-display-inline">A program to provide or support the provision of home ownership or credit counseling to low- and moderate-income consumer borrowers through programs reasonably available to the consumer that have been certified or approved by the Secretary of Housing and Urban Development for such purpose.</text> </paragraph>
<paragraph id="H3A8D738B62DC4DBB87A6C7BFE007EDD"><enum>(2)</enum><text display-inline="yes-display-inline">A program to provide or support the provision of foreclosure-prevention counseling and other prevention efforts to low- and moderate-income consumer borrowers through programs reasonably available to the consumer that have been certified or approved by the Secretary of Housing and Urban Development for such purpose.</text> </paragraph>
<paragraph id="HE553859EB58840A2A0EE838BC789C4D"><enum>(3)</enum><text display-inline="yes-display-inline">A program to transition low- and moderate-income consumer borrowers from higher-cost mortgage loans to lower-cost mortgage loans.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section>