[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3725 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3725

 To amend the Real Estate Settlement Procedures Act of 1974 to require 
the submission to each borrower under a federally related mortgage loan 
     of a one-page description of the essential terms of the loan.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 2, 2007

  Mr. Al Green of Texas (for himself and Mr. McHenry) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
 To amend the Real Estate Settlement Procedures Act of 1974 to require 
the submission to each borrower under a federally related mortgage loan 
     of a one-page description of the essential terms of the loan.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Mortgage Disclosure Simplification 
Act of 2007''.

SEC. 2. REQUIRED DISCLOSURES REGARDING LOAN TERMS.

    The Real Estate Settlement Procedures Act of 1974 is amended by 
inserting after section 4 (12 U.S.C. 2603) the following new section:

``SEC. 4A. REQUIRED DISCLOSURES REGARDING LOAN TERMS.

    ``(a) Development.--The Secretary, in consultation with appropriate 
Federal lending regulation agencies, shall develop and prescribe 
standard written forms under subsection (c) for statement of the 
essential terms of a federally related mortgage loan.
    ``(b) Requirement To Use.-- The Secretary shall require that--
            ``(1) the forms developed pursuant to subsection (a) be 
        used in all transactions in the United States that involve 
        federally related mortgage loans; and
            ``(2) that in any such a transaction--
                    ``(A) the form under subsection (c)(1) shall be 
                appropriately and accurately completed by the lender or 
                mortgage broker, or both; and
                    ``(B) the completed form under subsection (c)(1) 
                shall be provided to the borrower, together with the 
                form under subsection (c)(2), not later than three days 
                after the application for the federally related 
                mortgage loan is made.
    ``(c) Contents.--With respect to a federally related mortgage loan, 
the standard written forms required under this subsection are as 
follows:
            ``(1) Statement of loan terms.--A single page, written 
        disclosure regarding the federally related mortgage loan that, 
        when completed by the lender or mortgage broker, or both, sets 
        forth, in accordance with such requirements as the Secretary 
        shall by regulation establish--
                    ``(A) a best possible estimate of--
                            ``(i) the total loan amount under the 
                        federally related mortgage loan;
                            ``(ii) the loan-to-value ratio for the 
                        loan;
                            ``(iii) the final maturity date for the 
                        loan;
                            ``(iv) the amount and due date for any 
                        balloon payment under the loan;
                            ``(v) the amount of any prepayment fee to 
                        be charged if the loan is paid in full before 
                        the final maturity date for the loan;
                            ``(vi) the initial interest rate under the 
                        loan expressed as an annual percentage rate, 
                        and the amount of the monthly payment due under 
                        such rate;
                            ``(vii) the duration during which such 
                        initial interest rate will be charged;
                            ``(viii) the fully indexed rate of interest 
                        under the loan expressed as an annual 
                        percentage rate and the amount of the monthly 
                        payment due under such rate;
                            ``(ix) the maximum possible rate of 
                        interest under the loan expressed as an annual 
                        percentage rate and the amount of the monthly 
                        payment due under such rate;
                            ``(x) the monthly household income of the 
                        borrower upon which the loan is based;
                            ``(xi) the amount of initial monthly 
                        payment due under the loan, and the amount of 
                        such initial monthly payment plus monthly 
                        amounts due for taxes and insurance on the 
                        property for which the loan is made, both 
                        expressed as a percentage of the monthly 
                        household income of the borrower;
                            ``(xii) the amount of the fully indexed 
                        monthly payment due under the loan, and the 
                        amount of such fully indexed monthly payment 
                        plus monthly amounts due for taxes and 
                        insurance on the property for which the loan is 
                        made, both expressed as a percentage of the 
                        monthly household income of the borrower;
                            ``(xiii) the aggregate amount of settlement 
                        charges for all settlement services provided in 
                        connection with the loan, the amount of such 
                        charges that are included in the loan amount 
                        and the amount of such charges the borrower 
                        must pay at closing, the aggregate amount of 
                        lender's fees connection with the loan, and the 
                        aggregate amount of other fees or required 
                        payments in connection with the loan; and
                            ``(xiv) the aggregate amount of fees paid 
                        to the mortgage broker in connection with the 
                        loan, the amount of such fees paid directly by 
                        the borrower, and any additional amount 
                        received by the broker from the lender based on 
                        the interest rate of the loan (commonly 
                        referred to as a yield spread premium);
                    ``(B) a name, telephone number, and electronic mail 
                address that may be used by the borrower to obtain 
                information regarding the loan; and
                    ``(C) a prominent statement that the amounts to be 
                provided by the lender or mortgage broker, or both, 
                under the federally related mortgage loan shall be 
                subject to final underwriting of the loan.
            ``(2) Statement of definitions and explanations.--A two-
        page written disclosure that sets forth, in accordance with 
        such requirements as the Secretary shall, by regulation, 
        establish, basic easy-to-understand definitions or 
        explanations, of terms relating to residential mortgage loans, 
        including each 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 loan payment including taxes and insurance, 
        fully indexed housing expense ratio, prepayment fee, balloon 
        payment, payment option loan, points, closing costs, settlement 
        services, settlement charges, lender's fees, and mortgage 
        broker.
    ``(d) Savings Clause.--Notwithstanding disclosure pursuant to 
subsection (c)(1)(A) of best possible estimates of the information 
required under such subsection with respect to a federally related 
mortgage loan, the amounts to be provided by the lender or mortgage 
broker, or both, under the loan shall be subject to final underwriting 
of the loan.''.
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