110 HR 3535 IH: Homebuyer's Protection Act of 2007 U.S. House of Representatives 2007-09-14 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.

I 110th CONGRESS 1st Session H. R. 3535 IN THE HOUSE OF REPRESENTATIVES September 14, 2007 Mr. Hodes (for himself and Ms. Moore of Wisconsin) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Truth in Lending Act to require escrow accounts for the payment of property taxes and insurance for all subprime loans, and to expand the coverage of the appraisal requirements under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, and for other purposes.

1.

Short title

This Act may be cited as the Homebuyer's Protection Act of 2007.

2.

Escrow accounts required for subprime loans

(a)

In general

Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting after section 129 the following new section:

129A.

Escrow or impound accounts relating to certain consumer credit transactions

(a)

In general

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. (b)

Duration of escrow or impound account

An escrow or impound account established pursuant to this section, shall remain in existence for as long as the subprime mortgage is outstanding. (c)

Administration of escrow or impound accounts

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. (d)

Disclosures relating to escrow or impound account

(1)

In general

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: (A)The fact that an escrow or impound account will be established at consummation of the transaction. (B)The amount required at closing to initially fund the escrow or impound account. (C)The amount in the initial year of the estimated taxes and hazard insurance premiums. (D)The estimated monthly amount payable for taxes and hazard insurance. (2)

Regulations

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 Homebuyer's Protection Act of 2007. (e)

Hazard insurance defined

For purposes of this section, the term hazard insurance shall have the same meaning as provided under the law of the State where the real property securing the consumer credit transaction is located.

. (b)

Clerical amendment

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: 129A. Escrow or impound accounts relating to certain consumer credit transactions. .

3.

Scope of appraisal requirements

(a)

In general

Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3331 et seq.) is amended by striking federally related transaction and federally related transactions each place each such term appears and inserting real estate related financial transaction or real estate related financial transactions, as the case may be. (b)

Technical and conforming amendments

(1)The heading of section 1120 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3349) is amended by striking federally related transactions and inserting real estate related financial transactions. (2)Section 1121 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350) is amended— (A)by striking paragraph (4); and (B)in paragraph (5), by striking any transaction involving and inserting any consumer transaction involving.