[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2296 Introduced in Senate (IS)]







110th CONGRESS
  1st Session
                                S. 2296

To provide for improved disclosures by all mortgage lenders at the loan 
         approval and settlement stages of all mortgage loans.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            November 1, 2007

  Mr. Schumer introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To provide for improved disclosures by all mortgage lenders at the loan 
         approval and settlement stages of all mortgage loans.

    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 Enhancement Act 
of 2007''.

SEC. 2. AMENDMENTS TO THE TRUTH IN LENDING ACT.

    The Truth In Lending Act (15 U.S.C. 1601 et seq.) is amended by 
inserting after section 129 the following new section:

``SEC. 129A. ENHANCED MORTGAGE DISCLOSURES.

    ``(a) Definitions.--As used in this section, the term `mortgage 
loan' means any consumer credit transaction in which a security 
interest is or will be retained or acquired in any real property 
located in the United States which is or, upon completion of the 
transaction, will be used as the dwelling of the consumer.
    ``(b) Disclosures for Mortgage Loans.--Subject to the rules of the 
Board, with respect to a mortgage loan, the creditor shall disclose to 
the consumer, in addition to any other disclosures required under this 
title--
            ``(1) the amount of the loan;
            ``(2) the percentage of the loan, as compared to the 
        appraised value of the property;
            ``(3) the term of the loan;
            ``(4) the monthly income of the borrower, as relied upon in 
        making the loan;
            ``(5) if the annual percentage rate of interest is fixed--
                    ``(A) the applicable annual percentage rate of 
                interest for the loan;
                    ``(B) the amount of the monthly payment on the 
                loan;
                    ``(C) an estimate of the monthly payment, plus 
                taxes and insurance; and
                    ``(D) the percentage of the stated monthly income 
                of the borrower represented by the monthly payment, 
                plus taxes and insurance;
            ``(6) if the annual percentage rate of interest is 
        variable--
                    ``(A) the initial interest rate;
                    ``(B) the duration of the initial interest rate;
                    ``(C) an estimate of the monthly payment amount 
                associated with the initial interest rate;
                    ``(D) an estimate of the monthly payment associated 
                with the initial interest rate, plus taxes and 
                insurance;
                    ``(E) the percentage of the stated monthly income 
                of the borrower represented by the estimated monthly 
                payment associated with the initial interest rate, plus 
                taxes and insurance;
                    ``(F) the date on which the interest rate will be 
                adjusted or reset;
                    ``(G) the fully indexed rate (expressed as an 
                estimate of the interest rate after it is adjusted or 
                reset);
                    ``(H) an estimate of the monthly payment amount 
                associated with the fully indexed interest rate;
                    ``(I) the percentage of the stated monthly income 
                of the borrower represented by the estimated monthly 
                payment associated with the fully indexed interest 
                rate;
                    ``(J) an estimate of the monthly payment associated 
                with the fully indexed rate, plus taxes and insurance; 
                and
                    ``(K) an estimate of the maximum possible 
                applicable annual percentage rate of interest, 
                including language expressing that if there is no 
                maximum rate, the applicable State usury rate shall be 
                disclosed;
            ``(7) if the loan represents a subordinate lien (also 
        referred to as a `piggyback loan') on the real property 
        securing the loan, a brief statement that the loan is 
        subordinate to an existing primary lien, and that the amount of 
        the loan and estimated monthly payments described in the 
        disclosure are in addition to any amounts arising from existing 
        loan obligations;
            ``(8) in any case in which a prepayment fee or penalty may 
        be imposed with respect to the loan--
                    ``(A) the amount of such fee or penalty; and
                    ``(B) a brief description, in plain English, of the 
                circumstances or events which would trigger the 
                imposition of the prepayment fee or penalty;
            ``(9) in any case in which a balloon payment may be 
        required with respect to the loan--
                    ``(A) the date on which the balloon payment is due, 
                and the estimated amount of the balloon payment; and
                    ``(B) a brief statement, in plain English, that a 
                balloon payment mortgage does not fully pay off the 
                loan, that a large balloon payment of the remaining 
                principal will be required at the end of the loan term, 
                and that many borrowers must secure another loan to 
                make the balloon payment;
            ``(10) if the borrower has a `payment option' loan--
                    ``(A) a disclosure that the loan is a payment 
                option loan; and
                    ``(B) a brief statement, in plain English, that a 
                payment option loan has negative amortization, which 
                can result in the loan balance becoming higher than the 
                original amount of the loan, even if the borrower makes 
                all payments on time;
            ``(11) total points to be paid at closing, with an 
        explanation that points are a fee that the borrower pays to the 
        lender, expressed as a percentage of the total loan; and
            ``(12) the total actual closing costs, including points, if 
        known, and if not known, the total estimated closing costs, 
        including points.
    ``(c) Timing of Disclosures.--The disclosures required by this 
section shall be provided to the consumer at the time of approval of 
the mortgage loan, but in no case later than 7 days before the date on 
which the mortgage loan is consummated.
    ``(d) Format.--Disclosures required by this section shall be 
presented to the consumer in the form and manner which the Board shall 
prescribe by regulation--
            ``(1) in a simple, clearly legible, and uniform tabular 
        format, in accordance with subsection (e);
            ``(2) to the extent possible, as a one-page, single 
        document;
            ``(3) when provided in conjunction with or at the same time 
        as other required written disclosures, as the first of such 
        documents; and
            ``(4) in an easily readable font size.
    ``(e) Tabular Format.--
            ``(1) In general.--In the regulations prescribed under 
        subsection (d)(1), the Board shall require that the disclosure 
        of such information shall be in the form of a table, which--
                    ``(A) contains clear and concise headings for each 
                item of such information; and
                    ``(B) provides a clear and concise form for stating 
                each item of information required to be disclosed under 
                each such heading.
            ``(2) Board discretion in prescribing order and wording of 
        table.--In prescribing the form of the table under paragraph 
        (1), the Board may--
                    ``(A) list the items required to be included in the 
                table in a different order than the order in which such 
                items are set forth in subsection (b); and
                    ``(B) employ terminology which is different from 
                the terminology employed in subsection (b), if such 
                terminology conveys substantially the same meaning.
    ``(f) Rules for Reduction of Time Limit of Disclosure Requirements 
to 24 Hours.--The Board shall, by rule, provide for procedures to 
reduce the time limit described in subsection (c) to 24 hours prior to 
the consummation of the mortgage, to the extent that the Board 
determines necessary and appropriate, except that such rules shall 
provide for a time limit reduction only at the request of the borrower, 
and only in those limited circumstances in which the borrower needs to 
consummate the mortgage transaction in a more expedited manner than 
would otherwise be permitted under this section.
    ``(g) Tolerances for Accuracy.--The provisions of section 106(f), 
relating to tolerances for accuracy, and any rules of the Board issued 
under that subsection, shall apply to disclosures required under this 
section.''.

SEC. 3. AMENDMENT TO REAL ESTATE SETTLEMENT PROCEDURES.

    Section 4 of the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2603) is amended by adding at the end the following:
    ``(c) Truth in Lending Act Disclosures.--The form required under 
section 129A of the Truth in Lending Act shall be provided to the 
borrower at the time of settlement by the person conducting the 
settlement, in addition to any other disclosures required by this Act. 
In no case may a federally related mortgage loan be consummated if such 
form has not been provided to the borrower, both at the time of the 
approval of the loan, in accordance with that section 129A, and at 
settlement.''.
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