1.Short
title; table of contents
(a)This Act may be cited
as the Home Ownership Preservation and
Protection Act of 2007
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title; table of
contents.
Sec. 2. Definitions.
Sec. 3. Effective date and regulations.
TITLE I—High-cost mortgages
Sec. 101. Definitions relating to high-cost
mortgages.
Sec. 102. Additional protections for HOEPA loans.
TITLE II—Protections applicable to subprime and certain other
loans
Sec. 201. Truth in Lending Act amendments.
TITLE III—Protections for all home loan borrowers
Sec. 301. Mortgage protections.
TITLE IV—Good faith and fair dealing in appraisals
Sec. 401. Duties of appraisers.
TITLE V—Good faith and fair dealing in home loan
servicing
Sec. 501. Duties of lenders and loan servicers.
Sec. 502. Real estate settlement procedures.
Sec. 503. Effective
date.
TITLE VI—Foreclosure prevention counseling
Sec. 601. Foreclosure prevention counseling.
TITLE VII—Remedies and enforcement
Sec. 701. Material disclosures and violations.
Sec. 702. Right of rescission.
Sec. 703. Civil liability.
Sec. 704. Liability for monetary damages.
Sec. 705. Remedy in lieu of rescission for certain
violations.
Sec. 706. Prohibition on mandatory arbitration.
Sec. 707. Lender liability.
TITLE VIII—Other banking agency authority
Sec. 801. Inclusion of all banking agencies in the regulatory
authority under the Federal Trade Commission Act with respect to depository
institutions.
TITLE IX—Miscellaneous
Sec. 901. Authorizations.
2.Section 103 of the Truth in Lending Act (15
U.S.C. 1602) is amended by adding at the end the following:
(cc)Definitions
relating to home mortgage loans
(1)The term home mortgage loan means a consumer
credit transaction secured by a home, used or intended to be used as a
principal dwelling, regardless of whether it is real or personal property, or
whether the loan is used to purchase the home.
(2)The term mortgage broker means a person who,
for compensation or in anticipation of compensation, arranges or negotiates or
attempts to arrange or negotiate home mortgage loans or commitments for such
loans, refers applicants or prospective applicants to creditors, or selects or
offers to select creditors to whom requests for credit may be made.
(3)The term mortgage originator means any
creditor or other person, including a mortgage broker, who, for compensation or
in anticipation of compensation, engages either directly or indirectly in the
acceptance of applications for home mortgage loans, solicitation of home
mortgage loans on behalf of consumers, negotiation of terms or conditions of
home mortgage loans on behalf of consumers or lenders, or negotiation of sales
of existing home mortgage loans to institutional or noninstitutional lenders.
It also includes any employee or agent of such person.
(4)Nontraditional
mortgage loanThe term nontraditional mortgage loan
means a home mortgage loan that allows a consumer to defer payment of principal
or interest.
(5)
(A)The term subprime mortgage loan means a home
mortgage loan in which the annual percentage rate exceeds the greater of the
thresholds determined under subparagraph (B) or (C), as applicable.
(B)Treasury
securities rate spreadA home mortgage loan is a subprime
mortgage loan if the difference between the annual percentage rate for the loan
and the yield on United States Treasury securities having comparable periods of
maturity is equal to or greater than—
(i)3
percentage points, if the loan is secured by a first lien mortgage or deed of
trust; or
(ii)5 percentage
points, if the loan is secured by a subordinate lien mortgage or deed of
trust.
(C)Conventional
mortgage rate spreadA home mortgage loan is a subprime mortgage
loan if the difference between the annual percentage rate for the loan and the
annual yield on conventional mortgages, as published by the Board of Governors
of the Federal Reserve System in statistical release H.15 (or any successor
publication thereto) is either equal to or greater than—
(i)1.75 percentage
points, if the loan is secured by a first lien mortgage or deed of trust;
or
(ii)3.75 percentage
points, if the loan is secured by a subordinate lien mortgage or deed of
trust.
(D)For purposes of subparagraph (B), the difference
between the annual percentage rate of a home mortgage loan and the yield on
United States Treasury securities having comparable periods of maturity shall
be determined using the same procedures and calculation methods applicable to
loans that are subject to the reporting requirements of the Federal Home
Mortgage Disclosure Act, whether or not such loan is subject to or reportable
under the provisions of that
Act.
.
3.Effective date
and regulations
(a)This Act and the amendments made by this Act shall become
effective 6 months after the date of enactment of this Act, and shall apply to
all transactions consummated on or after that effective date, except as
otherwise specifically provided herein.
(b)Not later than 6 months after the date of enactment of
this Act, the Board of Governors of the Federal Reserve System shall issue in
final form such regulations as are necessary to carry out this Act and the
amendments made by this Act.
<enum>I</enum><header>High-cost
mortgages</header>
<section id="IDd08d828d561448c8a591d5ddf0e4fb72"><enum>101.</enum><header>Definitions
relating to high-cost mortgages</header>
<subsection id="ID24f950b055924a328ccd7c8239f1955d"><enum>(a)</enum><header>High-cost
mortgage defined</header><text>Section 103(aa) of the Truth in Lending Act (15
U.S.C. 1602(aa)) is amended by striking all that precedes paragraph (2) and
inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="idC5217B5E7D4845A484E1E9E694816612" style="OLC">
<subsection id="ID4316321d29324b40aac20fad272ee78e"><enum>(aa)</enum><header>High-cost
mortgage</header>
<paragraph id="ID624a3138c4ae4a1b9271c2706dc20a8d"><enum>(1)</enum><header>Definition</header>
<subparagraph id="ID48ad0071443a4f15ad517245a87e0e61"><enum>(A)</enum><header>In
general</header><text>The term <term>high-cost mortgage</term>, and a mortgage
referred to in this subsection, mean a consumer credit transaction that is
secured by the principal dwelling of a consumer, other than a reverse mortgage
transaction, if—</text>
<clause id="IDe0b0bcdf41ce454d99b325b0d93c093e"><enum>(i)</enum><text>in the case of a
loan secured—</text>
<subclause id="IDb82198facbc54d82a03875b5497b202c"><enum>(I)</enum><text>by a first
mortgage on such dwelling, the annual percentage rate at consummation of the
transaction will exceed by more than 8 percentage points the yield on United
States Treasury securities having comparable periods of maturity on the 15th
day of the month immediately preceding the month in which the application for
the extension of credit is received by the creditor; or</text>
</subclause><subclause id="ID08221fa7fe6641a08376a75734b1363f"><enum>(II)</enum><text>by a subordinate
or junior mortgage on such dwelling, the annual percentage rate at consummation
of the transaction will exceed by more than 10 percentage points the yield on
United States Treasury securities having comparable periods of maturity on the
15th day of the month immediately preceding the month in which the application
for the extension of credit is received by the creditor; or</text>
</subclause></clause><clause id="IDc55b1a03dbb44d9a840be969fbfc9e23"><enum>(ii)</enum><text>the total points
and fees payable in connection with the loan exceed—</text>
<subclause id="ID425977cb20114cc080e0651d2534bc86"><enum>(I)</enum><text>in the case of a
loan for $20,000 or more, 5 percent of the total loan amount; or</text>
</subclause><subclause id="ID6c026332ca1f40f08ba33d0fc5243ffb"><enum>(II)</enum><text>in the case of a
loan for less than $20,000, the lesser of 8 percent of the total loan amount or
$1,000.</text>
</subclause></clause></subparagraph><subparagraph id="ID47cb0af540cb43a3b90d457126bd9a91"><enum>(B)</enum><header>Introductory
rates taken into account</header><text>For purposes of subparagraph (A)(i), the
annual percentage rate shall be determined as—</text>
<clause id="IDb0b19d8867874a8cbdc6db111572b1bf"><enum>(i)</enum><text>in the case of a
fixed-rate loan in which the rate of interest will not vary during the term of
the loan, the interest rate in effect on the date of consummation of the
transaction;</text>
</clause><clause id="ID2fc3424a72924d4b8e0ffb530f05e3da"><enum>(ii)</enum><text>in the case of a
loan in which the rate of interest varies solely in accordance with an index,
the interest rate determined by adding the index rate in effect on the date of
consummation of the transaction to the maximum margin permitted at any time by
the terms of the loan agreement; and</text>
</clause><clause commented="no" id="ID8109e0ecea77478a9bf1535bb70ca116"><enum>(iii)</enum><text>in the case of
any other loan in which the rate may vary at any time during the term of the
loan for any reason, the interest charged on the loan at the maximum rate that
may be charged during the term of the
loan.</text>
</clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="IDb211c107521b4897aa743cf45223f91a"><enum>(b)</enum><header>Adjustment of
percentage points</header><text>Section 103(aa)(2) of the Truth in Lending Act
(15 U.S.C. 1602(aa)(2)) is amended by striking subparagraph (B) and inserting
the following:</text>
<quoted-block display-inline="no-display-inline" id="idB0718A6FD62C407697CC18FEC4E1034F" style="OLC">
<subparagraph id="ID03ef2acaa91b4925a55eed5867d24d37" indent="up2"><enum>(B)</enum><text>An increase or decrease under
subparagraph (A)—</text>
<clause id="ID0a6c8702b7f346b08c8cbe829b5394ee"><enum>(i)</enum><text>may not result in the number of
percentage points referred to in paragraph (1)(A)(i)(I) being less than 6
percentage points or greater than 10 percentage points; and</text>
</clause><clause id="ID8ae064a5e5fc47b28556f6aa2965693d"><enum>(ii)</enum><text>may not result in the number of
percentage points referred to in paragraph (1)(A)(i)(II) being less than 8
percentage points or greater than 12 percentage
points.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID9d016fd08bad4b76bbb40c8093d7ca7a"><enum>(c)</enum><header>Points and fees
defined</header>
<paragraph id="ID640746022a11488688bb4a9d0980622d"><enum>(1)</enum><header>In
general</header><text>Section 103(aa)(4) of the Truth in Lending Act (15 U.S.C.
1602(aa)(4)) is amended—</text>
<subparagraph id="idB52DA39142764358BB9CD5D3476BFF62"><enum>(A)</enum><text>by striking
<quote>(1)(B)</quote> and inserting <quote>(1)(A)(ii)</quote>;</text>
</subparagraph><subparagraph id="ID589f1d3ca9e64f04b04e595192ba4e2b"><enum>(B)</enum><text>by striking
subparagraph (B) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="id515A998629B944C39B5BB1C5B6C5F88E" style="OLC">
<subparagraph id="IDf0d767b82c1444e3bc5444b4daaa6170" indent="up1"><enum>(B)</enum><text>all compensation paid directly or
indirectly by a consumer or creditor to a mortgage broker or from any source,
including a mortgage broker that originates a loan in the name of the broker in
a table funded
transaction;</text>
</subparagraph><after-quoted-block>;</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="IDc0c81da3f7cc4bed9fa2da3f9d0eebe0"><enum>(C)</enum><text>in subparagraph
(C)(iii), by striking <quote>and</quote> at the end;</text>
</subparagraph><subparagraph id="IDff82e3f59676459cbb70d2884edbb13c"><enum>(D)</enum><text>by redesignating
subparagraph (D) as subparagraph (G); and</text>
</subparagraph><subparagraph id="ID27123448398b41328b25c882c0f6e410"><enum>(E)</enum><text>by inserting
after subparagraph (C) the following:</text>
<quoted-block display-inline="no-display-inline" id="id15A5D608157F4AA49DE2B2763CB5017F" style="OLC">
<subparagraph id="IDfeef2b008ab14e9391225d98dd710a39" indent="up1"><enum>(D)</enum><text>premiums or other charges payable at
or before consummation of the loan for any credit life, credit disability,
credit unemployment, or credit property insurance, or any other accident,
loss-of-income, life, or health insurance, or any payments directly or
indirectly for any debt cancellation or suspension agreement or contract,
except that insurance premiums or debt cancellation or suspension fees
calculated and paid in full on a monthly basis shall not be considered financed
by the creditor;</text>
</subparagraph><subparagraph id="ID1110fff03a9149348b15c8e957f871a2" indent="up1"><enum>(E)</enum><text>the maximum prepayment fees and
penalties which may be charged or collected under the terms of the loan
documents;</text>
</subparagraph><subparagraph id="ID68c2e9eb008449d2ae0835191c769bdc" indent="up1"><enum>(F)</enum><text>all prepayment fees or penalties that
are incurred by the customer, if the loan refinances a previous loan made or
currently held by the same creditor or an affiliate of the creditor;
and</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="IDf4e1f1d0b916453e9109cbba7f19d535"><enum>(2)</enum><header>Calculation of
points and fees for open-end loans</header><text>Section 103(aa) of the Truth
in Lending Act (15 U.S.C. 1602(aa)) is amended—</text>
<subparagraph id="ID7d3be2da9bdb4e60a76d949175c2d732"><enum>(A)</enum><text>by redesignating
paragraph (5) as paragraph (7); and</text>
</subparagraph><subparagraph id="ID8843b2870ef04482bdcfbc900440acbc"><enum>(B)</enum><text>by inserting
after paragraph (4) the following:</text>
<quoted-block display-inline="no-display-inline" id="id088EA783FEA44891A510A7F6DC958F6D" style="OLC">
<paragraph id="ID0caef5e9d37a4634a8192de4f2845a83"><enum>(5)</enum><header>Calculation of
points and fees for open-end loans</header><text>In the case of a loan under an
open-end credit plan, points and fees shall be calculated, for purposes of this
section and section 129, by adding the total points and fees known at or before
closing, including the maximum prepayment penalties which may be charged or
collected under the terms of the loan documents, plus the minimum additional
fees that the consumer would be required to pay to draw down an amount equal to
the total credit
line.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="IDfa03d8b4bafb448eacf954338cc26511"><enum>(d)</enum><header>High-cost
mortgage lender</header><text>Section 103(f) of the Truth in Lending Act (15
U.S.C. 1602(f)) is amended by striking the last sentence and inserting the
following: <quote>Any person who originates or brokers 2 or more mortgages
referred to in subsection (aa) in any 12-month period, any person who
originates 1 or more such mortgages through a mortgage broker in any 12-month
period or in connection with a table funded transaction involving such a
mortgage, and any person to whom the obligation is initially assigned at or
after settlement, shall be considered to be a creditor for purposes of this
title.</quote>.</text>
</subsection><subsection id="ID1bd020b82aa3490ca31fda797edba180"><enum>(e)</enum><header>Bona fide
discount loan discount points and prepayment penalties</header><text>Section
103(aa) of the Truth in Lending Act (15 U.S.C. 1602(aa)) is amended by
inserting after paragraph (5), as added by this Act, the following:</text>
<quoted-block display-inline="no-display-inline" id="id26194792B62A4FA7BE264F601826BEED" style="OLC">
<paragraph id="ID071e053d0efc4d91b7551d3af5bb56b3"><enum>(6)</enum><header>Bona fide
discount points</header>
<subparagraph id="id64FB91623947499CB7348A3F137E4EB0"><enum>(A)</enum><header>In
general</header><text>For the purpose of determining the amount of points and
fees under this subsection—</text>
<clause id="IDaf1dd74745ef45059ad1cc27d73dd7bf"><enum>(i)</enum><text>not more than 2
bona fide discount points payable by the consumer in connection with the
mortgage shall be excluded, but only if the interest rate from which the
interest rate on the mortgage will be discounted does not exceed by more than 1
percentage point the required net yield for a 90-day standard mandatory
delivery commitment for a reasonably comparable loan from either the Federal
National Mortgage Association or the Federal Home Loan Mortgage Corporation,
whichever is greater; and</text>
</clause><clause id="IDf7daced841f142d0991a7f9be7267bf8"><enum>(ii)</enum><text>unless 2 bona
fide discount points have been excluded under subparagraph (A), not more than 1
bona fide discount point payable by the consumer in connection with the
mortgage shall be excluded, but only if the interest rate from which the
interest rate on the mortgage will be discounted does not exceed by more than 2
percentage points the required net yield for a 90-day standard mandatory
delivery commitment for a reasonably comparable loan from either the Federal
National Mortgage Association or the Federal Home Loan Mortgage Corporation,
whichever is greater.</text>
</clause></subparagraph><subparagraph id="ID620b86091c364ccebd014010121da185"><enum>(B)</enum><header>Definition</header><text>For
purposes of subparagraph (A), the term <term>bona fide discount points</term>
means loan discount points which are knowingly paid by the consumer for the
purpose of reducing, and which in fact result in a bona fide reduction of, the
interest rate or time-price differential applicable to the mortgage.</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="ID78bd0664bf5448bcb8db085c84ca33c5"><enum>(C)</enum><header>Exception for
interest rate reductions inconsistent with industry
norms</header><text>Subparagraph (A) shall not apply to discount points used to
purchase an interest rate reduction, unless the amount of the interest rate
reduction purchased is reasonably consistent with established industry norms
and practices for secondary mortgage market
transactions.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="ID37d25ae7cb6f4ae3b08183f11f4eefa1"><enum>102.</enum><header>Additional
protections for HOEPA loans</header>
<subsection id="IDbda550e99c8c4a9a8cb045797a8c45a0"><enum>(a)</enum><header>No prepayment
penalties</header><text>Section 129(c) of the Truth in Lending Act (15 U.S.C.
1639(c)) is amended—</text>
<paragraph id="idFA269750AB974F3DADCBF61BA9862F77"><enum>(1)</enum><text>by striking
paragraph (2); and</text>
</paragraph><paragraph id="idE1AA6D80ABA847CBAABF754824C09A8B"><enum>(2)</enum><text>in paragraph
(1)—</text>
<subparagraph id="id1BA557FE66154F8A9EB39F5792648039"><enum>(A)</enum><text>by striking
<quote>(1) <header-in-text level="paragraph" style="OLC">In
general</header-in-text>.—</quote>; and</text>
</subparagraph><subparagraph id="id5D5A13D91DDD4D45AC0FCF5FE451CE9D"><enum>(B)</enum><text>by redesignating
subparagraphs (A) and (B) as paragraphs (1) and (2), respectively, and moving
the margins 2 ems to the left.</text>
</subparagraph></paragraph></subsection><subsection id="ID72656cf1f45d4b7b9dcda85999b84dc5"><enum>(b)</enum><header>No balloon
payments</header><text>Section 129(e) of the Truth in Lending Act (15 U.S.C.
1639(e)) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id7C85C4E0F9284E0F98F651123CD0EA72" style="OLC">
<subsection id="ID52c17f625cf448049002c198899c700a"><enum>(e)</enum><header>No balloon
payments</header><text>No high-cost mortgage may contain a scheduled payment
that is more than twice as large as the average of any earlier required
scheduled payments, except that this subsection shall not apply when the
payment schedule is adjusted to the seasonal or irregular income of the
consumer.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="ID753814af6df8441580e01ff1247125d3"><enum>(c)</enum><header>Other
Prohibitions on high-cost mortgages</header><text>Section 129 of the Truth in
Lending Act (15 U.S.C. 1639) is amended by adding at the end the
following:</text>
<quoted-block display-inline="no-display-inline" id="id0772F68C4FE2413D9EA46BF9ACE8C34B" style="OLC">
<subsection id="ID016055952bd44eb39c31fac7297b4e45"><enum>(m)</enum><header>No yield spread
premiums</header><text>No person may provide, and no mortgage originator may
receive, directly or indirectly, any compensation for originating a home
mortgage loan that is more costly than that for which the consumer qualifies,
or that is based on, or varies with, the terms of any home mortgage
loan.</text>
</subsection><subsection id="ID8719b45740014f24a82a38f3a4f5d9bb"><enum>(n)</enum><header>Acceleration of
debt</header><text>No high-cost mortgage may contain a provision which permits
the creditor, in its sole discretion, to accelerate the indebtedness, other
than in any case in which repayment of the loan has been accelerated by
default, pursuant to a due-on-sale provision, or for a breach of a material
provision of the loan documents unrelated to the payment schedule.</text>
</subsection><subsection id="ID82d8f862a2a040e6b6eb323b492f54e4"><enum>(o)</enum><header>Restriction on
financing points and fees</header><text>No creditor may, directly or
indirectly, finance, in connection with any high-cost mortgage—</text>
<paragraph id="ID57dbc3b4c1cb4c81b819a1b9c3acb9cb"><enum>(1)</enum><text>any prepayment
fee or penalty payable by the consumer in a refinancing transaction, if the
creditor or an affiliate of the creditor is the noteholder of the note being
refinanced; or</text>
</paragraph><paragraph id="IDd22ae029e6834fe7a9c5a36585f9bbfc"><enum>(2)</enum><text>any points or
fees as defined in section 103(aa)(4).</text>
</paragraph></subsection><subsection id="ID0703591cbc4049c8b5410e0eac224090"><enum>(p)</enum><header>Prohibition on
evasions, structuring of transactions, and reciprocal
arrangements</header><text>A creditor may not take any action in connection
with a high-cost mortgage—</text>
<paragraph id="ID951ece35c80a4af19aa913ccb8b57fe3"><enum>(1)</enum><text>to structure a
loan transaction as an open-end credit plan or another form of loan for the
purpose and with the intent of evading the provisions of this title; or</text>
</paragraph><paragraph id="ID4484f8b70d694236a2a85aa930315cf2"><enum>(2)</enum><text>to divide any
loan transaction into separate parts for the purpose and with the intent of
evading the provisions of this title.</text>
</paragraph></subsection><subsection id="ID8ae16f8fdc50487c952a1f9fe31af63c"><enum>(q)</enum><header>Modification
and deferral fees prohibited</header><text>A creditor may not charge a consumer
any fee to modify, renew, extend, or amend a high-cost mortgage, or to defer
any payment due under the terms of such mortgage, unless the modification,
renewal, extension, or amendment results in a lower annual percentage rate on
the mortgage for the consumer, and then only if the fee is bona fide and
reasonable.</text>
</subsection><subsection id="idEE7A6774B0234D02A762B0E96F3E612F"><enum>(r)</enum><header>Net tangible
benefit</header><text>In accordance with regulations prescribed by the Board,
no originator may make, provide, or arrange a high-cost mortgage loan that
involves a refinancing of a prior existing home mortgage loan, unless the new
loan will provide a net tangible benefit to the
consumer.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><enum>II</enum><header>Protections
applicable to subprime and certain other loans</header>
<section id="ID6e4ecba0be094540a9da6ca33343da6e"><enum>201.</enum><header>Truth in
Lending Act amendments</header><text display-inline="no-display-inline">The
Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by inserting after
section 129 the following new section:</text>
<quoted-block display-inline="no-display-inline" id="id622C610DCAE9403083D673FC8D525517" style="OLC">
<section id="idA68528B2D96D4769AD72B0C35B2F08C7"><enum>129A.</enum><header>Protections
for subprime and nontraditional home loans</header>
<subsection id="IDdacc0a5b1c664913894dfbb2af910043"><enum>(a)</enum><header>Assessment of
ability To pay</header>
<paragraph id="IDb1df83451f024359adddb69370261b68"><enum>(1)</enum><header>In
general</header>
<subparagraph id="idC32E2E7D48EB465EAFA4C34D02673CA7"><enum>(A)</enum><header>In
general</header><text>Before entering into or otherwise facilitating a subprime
or nontraditional mortgage loan, each mortgage originator shall verify the
reasonable ability of the borrower to pay the principal and interest on the
loan and any real estate taxes and homeowner insurance fees and
premiums.</text>
</subparagraph><subparagraph id="idFBB47FE9B2CF48028AB2783548783AC3"><enum>(B)</enum><header>Considerations</header><text>A
determination under subparagraph (A) shall include consideration of—</text>
<clause id="ID5f4dd96b300442e795fbabb862285ef0"><enum>(i)</enum><text>the income of the
borrower;</text>
</clause><clause id="ID90f8cc0de5724fe28f2f876f50c15ebc"><enum>(ii)</enum><text>the credit
history of the borrower;</text>
</clause><clause id="ID150b53c58f1942debfdd9a418cd5e17e"><enum>(iii)</enum><text>the current
obligations and employment status of the borrower;</text>
</clause><clause id="IDcf8635ec09e64af1ba275ec3d880a4cd"><enum>(iv)</enum><text>the
debt-to-income ratio of the monthly gross income of the borrower, inclusive of
all scheduled or otherwise significant debt payments and total monthly housing
payments, including taxes, property and private mortgage insurance, any
required homeowner or condominium fees, and any subordinate mortgages,
including those that will be made contemporaneously to the same
borrower;</text>
</clause><clause id="IDa04ea40401744b7ba3053b9cb0efe089"><enum>(v)</enum><text>the residual
income of the borrower; and</text>
</clause><clause id="ID426c8bcc53e14d709e63d56ba310eb99"><enum>(vi)</enum><text>other available
financial resources, other than the equity of the borrower in the principal
dwelling that secures or would secure the loan.</text>
</clause></subparagraph></paragraph><paragraph id="ID7f5f05884b6a44cf8877f3ebd00d2141"><enum>(2)</enum><header>Variable
mortgage rates</header><text>In the case of a subprime or nontraditional
mortgage loan, with respect to which the applicable rate of interest may vary,
for purposes of paragraph (1), the ability to pay shall be determined based on
the monthly payment that could be due from the borrower, using as
assumptions—</text>
<subparagraph id="IDc060eabd456940bfaaa6c01a7a47d3b5"><enum>(A)</enum><text>the fully indexed
interest rate;</text>
</subparagraph><subparagraph id="ID1ae1f85c65494cb589d45e3574277793"><enum>(B)</enum><text>a repayment
schedule which achieves full amortization over the life of the loan, assuming
no default by the borrower;</text>
</subparagraph><subparagraph id="ID46b8027830f74edab05d9fd3c01bbe3b"><enum>(C)</enum><text>for products that
permit negative amortization, the initial loan amount plus any balance increase
that may accrue from the negative amortization provision;</text>
</subparagraph><subparagraph id="ID75db636121194ae5a3c7789412e90f4e"><enum>(D)</enum><text>that the loan is
to be repaid in substantially equal monthly amortizing payments for principal
and interest over that period of time which would be permitted after the
consumer has made lower payments, as permitted under the terms of the loan, and
which includes any additions to principal that will result from such permitted
lower payments, with no balloon payment, unless the loan contract requires a
more rapid repayment schedule to be used in the calculation; and</text>
</subparagraph><subparagraph id="IDbbc23c2b7a314b389d102445adfd6e21"><enum>(E)</enum><text>the reasonably
foreseeable capacity of the borrower to make payments, assuming market changes
as to the contract index rate over the period of the loan, using, to make such
assessment, a credible market rate determined according to regulations issued
by the Board, which regulations shall require reasonable market expectations to
be a factor.</text>
</subparagraph></paragraph><paragraph id="ID76ac5edd5dbc43b9bcb1428425817b55"><enum>(3)</enum><header>Rebuttable
presumption</header>
<subparagraph id="id03AAC1BC9AF742EFB5573CC4DFAD80AF"><enum>(A)</enum><header>In
general</header><text>For purposes of this subsection there is a rebuttable
presumption that a mortgage was made without regard to repayment ability if, at
the time at which the loan was consummated, the total monthly debts of the
borrower, including total monthly housing payments, taxes, property, and
private mortgage insurance, any required homeowner or condominium fees, and any
subordinate mortgages, including those that will be made contemporaneously to
the same borrower, exceed 45 percent of the monthly gross income of the
borrower.</text>
</subparagraph><subparagraph id="id66E6FA25239E45E192CBFDB3083E4DBB"><enum>(B)</enum><header>Rebuttal</header><text>To
rebut the presumption of inability to repay under subparagraph (A) the creditor
shall, at minimum, determine and consider the residual income of the borrower
after payment of current expenses and proposed home loan payments, except that
no presumption of ability to make the scheduled payments to repay the
obligation shall arise solely from the fact that, at the time at which the loan
is consummated, the total monthly debts of the borrower (including amounts owed
under the loan) does not exceed 45 percent of the monthly gross income of the
borrower.</text>
</subparagraph></paragraph></subsection><subsection id="ID7dd862fb462c4effb239dfa30b8ed6b8"><enum>(b)</enum><header>Requirement of
tax and insurance escrows</header><text>No subprime or nontraditional mortgage
loan may be arranged, approved, or made without requiring escrow of tax and
insurance installments calculated in accordance with the requirements of
section 10 of the Real Estate Settlement Procedures Act of 1974, and
regulations promulgated pursuant thereto, and mortgage insurance premiums, if
any.</text>
</subsection><subsection id="IDc5f7f70dc9624b678befb7c459fc0194"><enum>(c)</enum><header>Prohibition on
prepayment penalties</header><text>No subprime or nontraditional mortgage loan
may contain a provision that requires a consumer to pay a penalty for paying
all or part of the principal before the date on which it is due.</text>
</subsection><subsection id="ID0575d2d7391542b4beb56a17ea83fe28"><enum>(d)</enum><header>Prohibition on
yield-spread premiums</header><text>No person may provide, and no mortgage
originator may receive, directly or indirectly, any compensation for
originating a subprime or nontraditional mortgage loan that is more costly than
that for which the consumer qualifies, or that is based on, or varies with, the
terms (other than the amount of loan principal) of any home mortgage
loan.</text>
</subsection><subsection id="id481FD0D4779744C8ADE34DC2E2581D4D"><enum>(e)</enum><header>Net tangible
benefit</header>
<paragraph id="id96B8C9A07FF044BD939FA8E7F5F5EAC3"><enum>(1)</enum><header>In
general</header><text>In accordance with regulations prescribed by the Board,
no originator may make, provide, or arrange a subprime or nontraditional
mortgage loan that involves a refinancing of a prior existing home mortgage
loan, unless the new loan will provide a net tangible benefit to the
consumer.</text>
</paragraph><paragraph id="idE46B116A3A64443DA4645A42086F6CA4"><enum>(2)</enum><header>Certain loans
providing no net tangible benefit</header><text>For purposes of paragraph (1),
a mortgage loan that involves refinancing of a prior existing mortgage loan
shall not be considered to provide a net tangible benefit to the borrower if
the costs of the refinanced loan, including points, fees, and other charges,
exceed the amount of any newly advanced principal, less the points, fees, and
other charges, without any corresponding changes in the terms of the refinanced
loan that are advantageous to the
borrower.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><enum>III</enum><header>Protections for
all home loan borrowers</header>
<section id="idB6E16319ECC642ADB7F165C93BA1077C"><enum>301.</enum><header>Mortgage
protections</header><text display-inline="no-display-inline">The Truth in
Lending Act (15 U.S.C. 1601 et seq.) is amended by inserting after section
129A, as added by this Act, the following new section:</text>
<quoted-block display-inline="no-display-inline" id="id31D330093A1041A9BDB1C4E89001767E" style="OLC">
<section id="IDd46f0e498a4b4caaa9d4417e9a270a78"><enum>129B.</enum><header>Protections
for all home loans</header>
<subsection id="IDaa03e558fe254c20b4dc4c9e583a3aa1"><enum>(a)</enum><header>Duties of all
mortgage originators</header><text>Each mortgage originator shall, with respect
to each home mortgage loan and, in addition to requirements under other
applicable provisions of Federal or State law—</text>
<paragraph id="ID419f13678aef4c49a5093d76e4a01ee3"><enum>(1)</enum><text>safeguard and
account for any money handled for the borrower;</text>
</paragraph><paragraph id="ID84e16073c04c458fac9a04fcc7585afd"><enum>(2)</enum><text>follow reasonable
and lawful instructions from the borrower;</text>
</paragraph><paragraph id="IDeaad70592d624c61a1d1cee57dd9d178"><enum>(3)</enum><text>act with
reasonable skill, care, and diligence;</text>
</paragraph><paragraph id="ID281dfb89191b4d88b8a54e5f3158060f"><enum>(4)</enum><text>act in good faith
and with fair dealing in any transaction, practice, or course of business in
connection with the originating of any home mortgage loan; and</text>
</paragraph><paragraph id="ID31990505cf8947b0a1408c03a644c775"><enum>(5)</enum><text>make reasonable
efforts to secure a home mortgage loan that is appropriately advantageous to
the borrower, considering all of the circumstances, including the product type,
rates, charges, and repayment terms of the loan.</text>
</paragraph></subsection><subsection id="ID19ec7f11c7724873948ffe09de8a09b4"><enum>(b)</enum><header>Duties of
mortgage brokers</header><text>Each mortgage broker shall with respect to each
home mortgage loan be deemed to have a fiduciary relationship with the
borrower, and, in addition to duties imposed by other applicable provisions of
Federal or State law, shall—</text>
<paragraph id="IDc52fb2a93c254a55be37a8830edb5fb6"><enum>(1)</enum><text>act in the best
interest of the borrower and in the utmost good faith toward the borrower, and
refrain from compromising the rights or interests of the borrower in favor of
the rights or interests of another, including a right or interest of the
mortgage broker; and</text>
</paragraph><paragraph id="ID2b08a334bc704eb6b55e89f8832f9c34"><enum>(2)</enum><text>clearly disclose
to the borrower, not later than 3 days after receipt of the loan application,
all material information that might reasonably affect the rights, interests, or
ability of the borrower to receive the borrower's intended benefit from the
home mortgage loan, including total compensation that the broker would receive
from any of the loan options that the broker presents to the borrower.</text>
</paragraph></subsection><subsection id="ID61e1d883e4b14b75ade26ae614524d0d"><enum>(c)</enum><header>Prohibition on
steering</header>
<paragraph id="ID31627afef0954704a7371d2fa975aa4c"><enum>(1)</enum><header>In
general</header><text>In connection with a home mortgage loan, a mortgage
originator may not steer, counsel, or direct a consumer to a loan with rates,
charges, principal amount, or prepayment terms that are more costly than that
for which the consumer qualifies.</text>
</paragraph><paragraph id="ID99c11b48b4374ab9b256eb8e2e1a1c57"><enum>(2)</enum><header>Duties to
consumers</header><text>If unable to suggest, offer, or recommend to a consumer
a home mortgage loan that is not more expensive than that for which the
consumer qualifies, a mortgage originator shall disclose to the
consumer—</text>
<subparagraph id="IDe2c4f4db1a4145779caf7747feffd435"><enum>(A)</enum><text>that the creditor
does not offer a home mortgage loan that is not more expensive than that for
which the consumer qualifies, but that other creditors may offer such a loan;
and</text>
</subparagraph><subparagraph id="IDb8b87a72ebc9462c95246fc421c40108"><enum>(B)</enum><text>the reasons that
the products and services offered by the mortgage originator are not available
to or reasonably advantageous for the consumer.</text>
</subparagraph></paragraph><paragraph id="ID86744c38db944283a71f0bf97c2b21b4"><enum>(3)</enum><header>Prohibited
conduct</header><text>In connection with a home mortgage loan, a mortgage
originator may not—</text>
<subparagraph id="ID727ec870e743467aae3e7e45026f2a6d"><enum>(A)</enum><text>mischaracterize
the credit history of a consumer or the home loans available to a
consumer;</text>
</subparagraph><subparagraph id="ID7e3044f624e34da8b072d7c191a7f9ea"><enum>(B)</enum><text>mischaracterize
or suborn mischaracterization of the appraised value of the property securing
the extension of credit; and</text>
</subparagraph><subparagraph id="IDe6c328bc1ffa40c6abf81c4172f90e5f"><enum>(C)</enum><text>if unable to
suggest, offer, or recommend to a consumer a loan that is not more expensive
than that for which the consumer qualifies, discourage a consumer from seeking
a home mortgage loan from another creditor or with another mortgage
originator.</text>
</subparagraph></paragraph></subsection><subsection id="ID50ef471d7020427180921655595ca28a"><enum>(d)</enum><header>Required
documentation</header>
<paragraph id="ID37eb46d7fed24f71aeaa5f2fb40f7cf8"><enum>(1)</enum><header>In
general</header><text>With respect to any home mortgage loan, a mortgage
originator shall base its determination of the ability of a consumer to pay
on—</text>
<subparagraph id="ID518c173e167547a6b7b0116201310bd0"><enum>(A)</enum><text>documentation of
all sources of income verified by tax returns, payroll receipts, bank records,
or the best and most appropriate form of documentation available, subject to
such requirements and exceptions as determined appropriate by the Board;
and</text>
</subparagraph><subparagraph id="ID04d65ee6b6254218bf13149e32d4dadb"><enum>(B)</enum><text>the
debt-to-income ratio and the residual income of the consumer after payment of
current expenses and proposed home loan payments.</text>
</subparagraph></paragraph><paragraph id="ID9509437a96a74956b1d27d9ffbe38140"><enum>(2)</enum><header>Limitation</header><text>A
statement provided by a consumer of the income and financial resources of the
consumer, without other documentation referred to in paragraph (1), is not
sufficient verification for purposes of assessing the ability of the consumer
to pay.</text>
</paragraph></subsection><subsection id="IDdd7c239b0aa04b52ae40343501d7ab7c"><enum>(e)</enum><header>Limitations on
yield-spread premiums</header>
<paragraph id="ID080b595989784662b3021c68e777c004"><enum>(1)</enum><header>In
general</header><text>Except as provided in paragraph (2), no person may
provide, and no mortgage originator may receive, directly or indirectly, any
compensation for originating a home mortgage loan that is more costly than that
for which the consumer qualifies, or that is based on, or varies with, the
terms of any home mortgage loan (other than the amount of loan
principal).</text>
</paragraph><paragraph id="IDe9c85e0cc86c458a9873d75bcf240bb9"><enum>(2)</enum><header>Limited
exception for no-cost loans</header><text>Notwithstanding paragraph (1), in a
home mortgage loan, other than a high-cost mortgage loan, a subprime mortgage
loan, or a nontraditional mortgage loan, a mortgage broker may receive
compensation in the form of an increased rate, but only if—</text>
<subparagraph id="ID033343f1f7a545ed8b477e4535e24f26"><enum>(A)</enum><text>the mortgage
broker receives no other compensation, however denominated, directly or
indirectly, from the consumer, creditor, or other mortgage originator;</text>
</subparagraph><subparagraph commented="no" id="ID0c15b2f5b38640d69f68e6d45cb09990"><enum>(B)</enum><text>the loan does not
include discount points, origination points, or rate reduction points, however
denominated, or any payment reduction fee, however denominated;</text>
</subparagraph><subparagraph id="ID875c72cf5e1c4733842add2598c5661e"><enum>(C)</enum><text>the loan does not
include a prepayment penalty; and</text>
</subparagraph><subparagraph id="id631D6532817D48EEB8A454CDC1D26F33"><enum>(D)</enum><text>there are no
other closing costs associated with the loan, except for fees to government
officials or amounts to fund escrow accounts for taxes and insurance.</text>
</subparagraph></paragraph></subsection><subsection id="ID6d6211e16c59402faf505251f196bcaf"><enum>(f)</enum><header>Recommended
default</header><text>No creditor shall recommend or encourage default on an
existing loan or other debt prior to and in connection with the closing or
planned closing of a mortgage loan that refinances all or any portion of such
existing loan or debt.</text>
</subsection><subsection id="H44EE331AD5C14721B7AB48E1F6504C2F"><enum>(g)</enum><header>Effect of
foreclosure on preexisting lease</header>
<paragraph id="H3B1366D40BDE4BF39BC0DA46D2E5E113"><enum>(1)</enum><header>In
general</header><text>Notwithstanding any other provision of law, in the case
of any foreclosure with respect to a home mortgage loan entered into after the
date of enactment of this Act, any successor in interest in such property
pursuant to the foreclosure shall assume such interest subject to—</text>
<subparagraph id="H2CF61C0302594CD6971EAD53FC4B68FF"><enum>(A)</enum><text display-inline="yes-display-inline">the provision, by the successor in
interest, of a notice to vacate to any bona fide tenant at least 90 days before
the effective date of the notice to vacate; and</text>
</subparagraph><subparagraph id="H5174DDFC819A48E29D77968486D37BC8"><enum>(B)</enum><text display-inline="yes-display-inline">the rights of any bona fide tenant, as of
the date of such notice of foreclosure—</text>
<clause id="HF2E2600A263C43AD004C90F125664D8E"><enum>(i)</enum><text display-inline="yes-display-inline">under any bona fide lease entered into
before the notice of foreclosure to occupy the premises until the end of the
remaining term of the lease; or</text>
</clause><clause id="HC12DB47162324FF8AC0026C198F63021"><enum>(ii)</enum><text display-inline="yes-display-inline">without a lease or with a lease terminable
at will under State law, subject to the receipt by the tenant of the 90-day
notice under subparagraph (A).</text>
</clause></subparagraph></paragraph><paragraph id="H8A29E84328B84560A9EA66F75707A0A5"><enum>(2)</enum><header>Bona fide lease
or tenancy</header><text display-inline="yes-display-inline">For purposes of
this section, a lease or tenancy shall be considered bona fide only if—</text>
<subparagraph id="H7A03C4B89730475FB0BDA9455C199F00"><enum>(A)</enum><text display-inline="yes-display-inline">the mortgagor under the contract is not the
tenant;</text>
</subparagraph><subparagraph id="H4C9C26B895BD47AAB1348E8BE2F1888F"><enum>(B)</enum><text>the lease or
tenancy was the result of an arms-length transaction; or</text>
</subparagraph><subparagraph id="H6B6FC7389B0B49BA92359982DBDF81D2"><enum>(C)</enum><text>the lease or
tenancy requires the receipt of rent that is not substantially less than fair
market rent for the
property.</text>
</subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><enum>IV</enum><header>Good faith and
fair dealing in appraisals</header>
<section id="id2E0B28D7910F42E2B8145FA13F1FC08E"><enum>401.</enum><header>Duties of
appraisers</header><text display-inline="no-display-inline">The Truth in
Lending Act (15 U.S.C. 1601 et seq.) is amended by inserting after section
129B, as added by this Act, the following new section:</text>
<quoted-block display-inline="no-display-inline" id="id62A4C821BBC24662BE8179FF125D997B" style="OLC">
<section id="idBB05BD8A52A449CE836CBF494A10DB31"><enum>129C.</enum><header>Duties of
appraisers</header>
<subsection id="idD9BCCAE92A7D49598639C34BEACB2A2D"><enum>(a)</enum><header>Definitions</header><text>In
this section, the following definitions shall apply:</text>
<paragraph id="IDa06288f8fd43435bbb38808a03c0770d"><enum>(1)</enum><header>Appraiser</header><text>The
term <quote>appraiser</quote> means a person who—</text>
<subparagraph id="IDf3229152535e4c6289d07f601b5000f2"><enum>(A)</enum><text>is certified or
licensed by the State in which the property to be appraised is located;
and</text>
</subparagraph><subparagraph id="ID6744badc25cc4e89b85b979e73220b59"><enum>(B)</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>
</subparagraph></paragraph><paragraph id="id9DDDADC07D8F4888AC70C1B950DCE7CA"><enum>(2)</enum><header>Qualifying
bond</header><text>The term <quote>qualifying bond</quote> means a bond equal
to not less than 1 percent of the aggregate value of all homes appraised by an
appraiser of real property in connection with a home mortgage loan in the
calendar year preceding the date of the transaction, with respect to
which—</text>
<subparagraph id="id11D5B8CC3C864AB393E6A5B4A73C97C8"><enum>(A)</enum><text>the bond shall
inure first to the benefit of the homeowners who have claims against the
appraiser under this title or any other applicable provision of law, and second
to the benefit of originating creditors that complied with their duty of good
faith and fair dealing in accordance with this title; and</text>
</subparagraph><subparagraph id="id9FFAEE795EC742DB8EBB26ED39AA91A2"><enum>(B)</enum><text>any assignee or
subsequent transferee or trustee shall be a beneficiary of the bond, only if
the originating creditor qualified for such treatment.</text>
</subparagraph></paragraph></subsection><subsection id="id4C0A965C2C174555887B7F046E6152EE"><enum>(b)</enum><header>Standard of
care</header><text>Each appraiser shall, in addition to the duties imposed by
otherwise applicable provisions of Federal or State law, with respect to each
home mortgage loan in which the appraiser is involved—</text>
<paragraph id="id4825ABC88CE64337BBAA3B7B6BE3D2A0"><enum>(1)</enum><text>act with
reasonable skill, care, diligence, and in accordance with the highest
standards; and</text>
</paragraph><paragraph id="id885003395DD9437BB3158D52A7388871"><enum>(2)</enum><text>act in good faith
and with fair dealing in any transaction, practice, or course of business
associated with the transaction.</text>
</paragraph></subsection><subsection id="IDb33ebfdec82e4d4195f9ddfa0a1e0aff"><enum>(c)</enum><header>Duties of
appraisers</header>
<paragraph id="id59104755D2BC401AB3B6C0370710FCA2"><enum>(1)</enum><header>Objective
appraisals</header><text>All appraisals carried out by an appraiser shall be
accurate and reasonable. An appraiser shall have no direct or indirect interest
in the property to be appraised, the real estate transaction prompting such
appraisal, or the home loan involved in such transaction.</text>
</paragraph><paragraph id="IDff021eb53a1f4c8f8ec08b6b0493bc2a"><enum>(2)</enum><header>Bond
requirement</header><text>No appraiser may charge, seek, or receive
compensation for an appraisal unless the appraisal is covered by a qualifying
bond.</text>
</paragraph><paragraph id="ID4b0db21f4699430dbf9bbfdea2ccff10"><enum>(3)</enum><header>No target
values</header><text>No lender or loan servicer may, with respect to a home
mortgage loan, in any way—</text>
<subparagraph id="id388631E89BBC45AEB905E407101F6135"><enum>(A)</enum><text>seek to influence
an appraiser or otherwise to encourage a targeted value in order to facilitate
the making or pricing of the home mortgage loan; or</text>
</subparagraph><subparagraph id="id16960483321A452D83222556118633BC"><enum>(B)</enum><text>select an
appraiser on the basis of an expectation that such appraiser would provide a
targeted value in order to facilitate the making or pricing of the home
mortgage loan.</text>
</subparagraph></paragraph><paragraph id="id35705E07D16442DE94C6DEED5F96176C"><enum>(4)</enum><header>Prohibition on
certain disclosures</header><text>Neither the appraisal order nor any other
communication in any form by an appraiser may include the requested loan amount
or any estimate of value for the property to serve as collateral, either
express or implied.</text>
</paragraph></subsection><subsection id="id474109FAEE344106B71669E4D845C4DB"><enum>(d)</enum><header>Appraisal
report</header><text>In any case in which an appraisal is performed in
connection with a home mortgage loan, the lender or loan servicer shall provide
a copy of the appraisal report to an applicant for a home mortgage loan,
whether credit is granted, denied, or the application was withdrawn. The first
copy of this report shall be provided to the applicant without charge.</text>
</subsection><subsection id="ID42a51dc237b740a6a5d8c30108c9c305"><enum>(e)</enum><header>Remedies</header><text>In
addition to other remedies, in any action for a violation of this section, the
following shall apply:</text>
<paragraph id="idED7A3DC993C142049453B63285A2CCDD"><enum>(1)</enum><header>Required
modification</header><text>If a retrospective appraisal determines that the
appraisal upon which the home loan was based exceeded the true market value by
10 percent or more, the holder of the loan shall modify the loan and recast the
loan ab initio to a loan amount that is at the same loan-to-value which the
original loan purported to be. All payments made prior to the recasting of such
loan shall be applied to the reduced loan amount.</text>
</paragraph><paragraph id="ID71cc1bfe364443b89be8c74fd5343ab9"><enum>(2)</enum><header>Agency ability
to modify true value tolerance level</header><text>If a consumer has a right of
action or a defense against the holder of the home loan when the appraisal upon
which the home loan was based exceeds the true market value of the home by 10
percent or more, the regulatory agency which oversees appraisers in the
jurisdiction in which the collateral is located has the authority to issue
rules which permit the 10 percent tolerance level established in this paragraph
to deviate by no more than 2 percent where local conditions warrant.</text>
</paragraph><paragraph id="IDeda6e15e993142758a32294df0caf533"><enum>(3)</enum><header>Collection from
appraiser's qualifying bond</header><text>A consumer awarded remedies pursuant
to this section shall have the right to collect such remedies from the
appraiser’s qualifying bond.</text>
</paragraph></subsection><subsection id="id8D722C5EEBCB4E4E9FDFEBB57E7E666B"><enum>(f)</enum><header>Civil
liability</header>
<paragraph id="id66916D5775B4465B9FDF8B84840866B5"><enum>(1)</enum><header>In
general</header><text>Any appraiser who fails to comply with any requirement of
this section with respect to a borrower designated in a home mortgage loan
contract, is liable to such borrower in an amount equal to the sum of—</text>
<subparagraph id="id77E22F8BA7DA4051A1D6B58E4AC622E1"><enum>(A)</enum><text>any actual
damages sustained by such borrower as a result of the failure;</text>
</subparagraph><subparagraph id="id296CD00B211C4F0E8996BE2C9BA3AEC7"><enum>(B)</enum><text>an amount not
less than $5,000; or</text>
</subparagraph><subparagraph id="idA6450EC4B7FB4400B5C044DE1DC67F3B"><enum>(C)</enum><text>in the case of
any successful action to enforce the foregoing liability, the costs of the
action, together with a reasonable attorney’s fee as determined by the
court.</text>
</subparagraph></paragraph><paragraph id="idA03F32C1A327475DA80B53A646323BA2"><enum>(2)</enum><header>Jurisdiction</header><text>Any
action by a borrower for a failure to comply with the requirements of this
section may be brought in any United States district court, or in any other
court of competent jurisdiction, not later than 3 years from the date of the
occurrence of such violation. This subsection does not bar a person from
asserting a violation of this section in an action to collect the debt owed on
a home mortgage loan, or foreclose upon the home securing a home mortgage loan,
or to stop a foreclosure upon that home, which was brought more than 3 years
after the date of the occurrence of the violation as a matter of defense by
recoupment or set-off in such action. An action under this section does not
create an independent basis for removal of an action to a United States
district court.</text>
</paragraph><paragraph id="id60A72DA1AC6A498B9E52E57D052EE852"><enum>(3)</enum><header>State attorney
general enforcement</header><text>An action to enforce a violation of this
section may also be brought by the appropriate State attorney general in any
appropriate United States district court, or any other court of competent
jurisdiction, not later than 3 years after the date on which the violation
occurs. An action under this section does not create an independent basis for
removal of an action to a United States district
court.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><enum>V</enum><header>Good
faith and fair dealing in home loan servicing</header>
<section id="idA299D4E81EEE435EA293C29B8FF2975E"><enum>501.</enum><header>Duties of
lenders and loan servicers</header><text display-inline="no-display-inline">The
Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended by inserting after
section 129C, as added by this Act, the following new section:</text>
<quoted-block display-inline="no-display-inline" id="idE1BC5F14C25A4C41BABCD8EAC6C22597" style="OLC">
<section id="idE8B3690379CE4852809CA566431D9672"><enum>129D.</enum><header>Duties of
lenders and loan servicers</header>
<subsection id="id8E2FDE3CB0CE4949901AA9F38C97088F"><enum>(a)</enum><header>Standard of
care</header>
<paragraph id="id0028170F3BE44F5DBFDBEF78184E9512"><enum>(1)</enum><header>Agency
relationship</header><text>In the case of any home loan serviced by a loan
servicer on behalf of a lender, the loan servicer shall be deemed an agent of
that lender, and shall be subject to all requirements of agents otherwise
applicable under Federal or State law.</text>
</paragraph><paragraph id="id967CCB6E7D9A400E9F79E4D25E35F623"><enum>(2)</enum><header>Fair
dealing</header><text>Each lender and loan servicer shall, in addition to the
duties imposed by otherwise applicable provisions of Federal or State law, with
respect to each home mortgage loan, including any home mortgage loan in default
or in which the homeowner has filed for bankruptcy—</text>
<subparagraph id="idF946FD66DB5B4A1F9E0C66C70F624764"><enum>(A)</enum><text>act with
reasonable skill, care, diligence, and in accordance with the highest
standards; and</text>
</subparagraph><subparagraph id="id290026635B2849549D64D6FAF432D99B"><enum>(B)</enum><text>act in good faith
and with fair dealing in any transaction, practice, or course of business
associated with the home mortgage loan.</text>
</subparagraph></paragraph></subsection><subsection id="ID418a6df8b8c44a0786d6ffa9604d47c1"><enum>(b)</enum><header>Rules for
assessment of fee</header>
<paragraph id="id721EE47E23E84C7EA2395CD2089DAD34"><enum>(1)</enum><header>In
general</header><text>No home mortgage loan contract may require, nor may any
lender or loan servicer assess or receive, any fees or charges other than
interest, late fees as specifically authorized in this section, or fees
assessed for nonsufficient funds, and charges allowed pursuant to subsection
(i)(1)(B), until the home mortgage loan is the subject of a foreclosure
proceeding and the debt on such loan has been accelerated.</text>
</paragraph><paragraph id="ID783e2f18ede6428dbc47afe890b153a1"><enum>(2)</enum><header>Fee
limitations</header><text>Any permissible fee or charge described under
paragraph (1) shall be—</text>
<subparagraph id="id576808E42AC34AB5822731C36428F8B0"><enum>(A)</enum><text>reasonable;</text>
</subparagraph><subparagraph id="id2E6F9D7FCD0B416796112EEC02391B8E"><enum>(B)</enum><text>for services
actually rendered; and</text>
</subparagraph><subparagraph id="id4E41263AB04642D7BD6FEDE8CA1FB61C"><enum>(C)</enum><text>specifically
authorized by the terms of the home mortgage loan contract and State
law.</text>
</subparagraph></paragraph><paragraph id="ID8d710de61184459e818d9b56ba52932f"><enum>(3)</enum><header>Assessment and
disclosure</header>
<subparagraph id="idAF00F5EF4F6A4625BF89BF8D9171021F"><enum>(A)</enum><header>In
general</header><text>Any permissible fee or charge described under paragraph
(1) shall be—</text>
<clause id="IDdc6f3f53b92a489081c4d5cfd5dafe48"><enum>(i)</enum><text>assessed not
later than 30 days after the date on which the fee was accrued; and</text>
</clause><clause id="ID158ba22b45ac430da01c85c47785b57d"><enum>(ii)</enum><text>explained
clearly and conspicuously in the next monthly accounting statement provided to
the borrower designated in the home mortgage loan contract.</text>
</clause></subparagraph><subparagraph id="id0860A6AE4FD1469AB88D9685C738333C"><enum>(B)</enum><header>Failure to
comply</header><text>Failure by a lender or loan servicer to comply with the
requirements set forth under subparagraph (A) shall result in the waiver of the
fee.</text>
</subparagraph></paragraph><paragraph id="IDc7e19c5b64974340a3f0b1a65bb2a8ea"><enum>(4)</enum><header>Required
statements</header><text>Each month a lender or loan servicer shall provide to
each borrower designated in a home mortgage loan contract entered into by such
lender or loan servicer a periodic statement that clearly and in plain english
explains—</text>
<subparagraph id="IDa2c6b42f12f1428a8bae071c7fcea079"><enum>(A)</enum><text>the application
of the prior month’s payment by the borrower, including the allocation of the
payment to interest, principal, escrow, and fees;</text>
</subparagraph><subparagraph id="IDd862eaa273524eafafe7cd3001e5644a"><enum>(B)</enum><text>the status of the
escrow account held on behalf of the borrower, including the payments into and
from the escrow account; and</text>
</subparagraph><subparagraph id="IDccd50b66ae9b47fead1bdb042c350127"><enum>(C)</enum><text>the assessment of
fees accruing in the previous month, including the reason that such fee accrued
and the date such fee accrued.</text>
</subparagraph></paragraph></subsection><subsection id="IDe7e1333171ab46599ecb909b71d4ca24"><enum>(c)</enum><header>Maximum
allowable late fees charged after loan closing</header>
<paragraph id="ID440aba3c0abf49baa39105666d5dcd22"><enum>(1)</enum><header>In
general</header><text>No lender or loan servicer may impose a charge or fee for
late payment of any amount due on a home mortgage loan—</text>
<subparagraph id="ID9e207fbb72ec4daa85c095dc9ee439df"><enum>(A)</enum><text>unless the home
mortgage loan contract specifically authorizes the charge or fee;</text>
</subparagraph><subparagraph id="IDf35f854e78194c3dacf1c2aec13cab59"><enum>(B)</enum><text>in an amount in
excess of 5 percent of the amount of the payment past due;</text>
</subparagraph><subparagraph id="IDdf4a9dc3da044f1485dc97968fae2426"><enum>(C)</enum><text>before the end of
the 15-day period after the date the payment is due, or in the case of a home
mortgage loan on which interest on each installment is paid in advance, before
the end of the 30-day period after the date the payment is due; or</text>
</subparagraph><subparagraph id="ID93df563e8a204c36b661b7f744071acc"><enum>(D)</enum><text>more than once
with respect to a single late payment.</text>
</subparagraph></paragraph><paragraph id="idDE7D75294F874FB2B26D9BA9D8A4457E"><enum>(2)</enum><header>Rule of
construction</header><text>For purposes of this subsection, payments on any
amount due on a home mortgage loan shall be applied first to current
installments, then to delinquent payments, and then to delinquency
charges.</text>
</paragraph><paragraph id="IDa24c8cb6c1194387bb328251c80e6d78"><enum>(3)</enum><header>Coordination
with subsequent late fees</header><text>If a home loan mortgage payment is
otherwise a full payment for the applicable period and is paid on its due date
or within an applicable grace period, and the only delinquency or insufficiency
of payment is attributable to a late fee or delinquency charge assessed on an
earlier payment, no late fee or delinquency charge may be imposed on such
payment.</text>
</paragraph></subsection><subsection id="ID114c1374d3574871a855c5cc303bdb42"><enum>(d)</enum><header>Prompt
crediting of payments required</header><text>Each home loan mortgage payment
amount received by a lender or a loan servicer shall be accepted and credited
on the date received. Such payments shall be credited to interest and principal
due on the home mortgage loan before crediting the payment to taxes, insurance,
or fees.</text>
</subsection><subsection id="ID44acef87bf9b4243ab0e102b24365487"><enum>(e)</enum><header>Collateral
protection insurance</header>
<paragraph id="id162DAB79F55A43319776DCDE9B76EBC8"><enum>(1)</enum><header>In
general</header><text>A lender or loan servicer may not charge any borrower
designated in a home mortgage loan contract for collateral protection
insurance, unless—</text>
<subparagraph id="ID79cb6958a45a416595103936f05f00d5"><enum>(A)</enum><text>the home mortgage
loan contract requires the borrower to maintain insurance on the collateral and
clearly delineates—</text>
<clause id="ID1bf734cd2ff349f4981026fcc92fae0d"><enum>(i)</enum><text>the terms and
conditions for imposition of and payment of the collateral;</text>
</clause><clause id="ID5af3232a637c4990b8177cbf095521bd"><enum>(ii)</enum><text>that such
insurance may not protect the interests of the borrower and may be
substantially more expensive than insurance that the borrower could purchase
independently; and</text>
</clause><clause id="IDeb9b22913a044620bfb60700394e0a09"><enum>(iii)</enum><text>that the
borrower will be charged for the cost of the insurance;</text>
</clause></subparagraph><subparagraph id="ID79974cdf546f4f9f91a526065f2b9596"><enum>(B)</enum><text>the lender or
loan servicer makes every effort to avoid the necessity of requiring collateral
protection insurance, including at least written notice and telephone
communications with the borrower and the insurance agent of record regarding
the—</text>
<clause id="idC56931130C66486AA88337783FDD4E54"><enum>(i)</enum><text>obligation of the
borrower to maintain property insurance; and</text>
</clause><clause id="idBA6B8EAFA552480DB8E4A016D6004074"><enum>(ii)</enum><text>additional cost
to the borrower on a monthly basis if collateral protection insurance is
required;</text>
</clause></subparagraph><subparagraph id="IDc9884e938cb4453eb06f832df95f51e5"><enum>(C)</enum><text>clear notice is
received by the borrower at least 15 days in advance of the charge for
collateral protection insurance, including—</text>
<clause id="IDb54abc1075ec4cac8e106c3268919619"><enum>(i)</enum><text>notice that
the—</text>
<subclause id="id760110BFFBA240E9BA7007B22586BE44"><enum>(I)</enum><text>placement of the
insurance is imminent;</text>
</subclause><subclause id="ID0b43c26fbc504a1d89515be6deb9742a"><enum>(II)</enum><text>costs of the
insurance will be paid by the borrower; and</text>
</subclause><subclause id="id20C7B79D36534DB58CB6EC6336F367E4"><enum>(III)</enum><text>the insurance
will not protect the borrower from loss;</text>
</subclause></clause><clause id="ID3ee42b74c17e42428fff5dad73ba2dc5"><enum>(ii)</enum><text>notice of the
amount of the new monthly payment; and</text>
</clause><clause id="ID4e11fed2ca424dcab8ecd524be4ab345"><enum>(iii)</enum><text>instructions on
the steps that the borrower may take to avoid such charge; and</text>
</clause></subparagraph><subparagraph id="id6497E62213854BC9AA47D58E9CA608C0"><enum>(D)</enum><text>charges for such
insurance are bona fide and reasonable.</text>
</subparagraph></paragraph><paragraph id="ID19f0dd6b2cee42a7845ff24bce309294"><enum>(2)</enum><header>Prohibition</header><text>In
no event is collateral protection insurance permitted when a lender or loan
servicer is collecting fees in escrow from the borrower for the payment of
property taxes and insurance, unless the borrower has had his or her insurance
cancelled for some reason other than non-payment of the premium.</text>
</paragraph><paragraph id="ID645f53795abe4ad2982e513b17c6be5b"><enum>(3)</enum><header>Notice of
charge</header><text>After a charge for the purchase of collateral protection
insurance has been issued by a lender or loan servicer, notice of the new
monthly payment requirements shall be delivered to the borrower at least 15
days prior to the first increased payment—</text>
<subparagraph id="id1D11EF73C504452CBAE17B03F126A44C"><enum>(A)</enum><text>explaining the
imposition of the new charges for such insurance; and</text>
</subparagraph><subparagraph id="id67B2446ECE124227B9F90AAE10BB495C"><enum>(B)</enum><text>providing
information on what the borrower can do to obviate the need for such
insurance.</text>
</subparagraph></paragraph></subsection><subsection id="ID46ac80757bad43bf9ba4b6766aa66587"><enum>(f)</enum><header>Obligations of
lender or loan servicer To handle escrow funds</header><text>A lender or loan
servicer shall make all payments from the escrow account held for the borrower
designated in a home mortgage loan contract for insurance, taxes, and other
charges with respect to the property secured by such contract in a timely
manner to ensure that no late penalties are assessed and that no other negative
consequences result, regardless of whether the loan is delinquent,
unless—</text>
<paragraph id="ID3adb4643e0424fc484331d4c30977a66"><enum>(1)</enum><text>there are not
sufficient funds in the account of such borrower to cover the payments;
and</text>
</paragraph><paragraph id="ID47238e56403246f3b342ad11a8b863f1"><enum>(2)</enum><text>the lender or
loan servicer has a reasonable basis to believe that recovery of the funds will
not be possible.</text>
</paragraph></subsection><subsection id="IDa9065b4b92b44358888c08131b47b633"><enum>(g)</enum><header>Information
exchange and dispute requirements</header>
<paragraph id="id333F1B607CC043A7AD39D9E375F21F40"><enum>(1)</enum><header>Mandatory
response to borrowers' requests</header>
<subparagraph id="idE110479754CD40AC8C1881E5A8486409"><enum>(A)</enum><header>In
general</header><text>A lender or loan servicer shall respond to any request
for information about a home mortgage loan or for resolution of any dispute
involving a home mortgage loan submitted by a borrower designated in a home
mortgage loan contract entered into by such lender or loan servicer.</text>
</subparagraph><subparagraph id="idCEBB3ED0D9F04B7BA3191D144B9F1FBF"><enum>(B)</enum><header>Timing or
response</header><text>A response required under subparagraph shall
occur—</text>
<clause id="idCC938B5D67D84F5287E840225294AFB0"><enum>(i)</enum><text>without cost to
the requesting borrower; and</text>
</clause><clause id="idC38595DA55864AC19F0EB5B82E219EB4"><enum>(ii)</enum><text>not later than
10 days after the receipt of such request.</text>
</clause></subparagraph><subparagraph id="idF1BF57D2876E4782861A6FCAB8179B4B"><enum>(C)</enum><header>Scope of
obligation</header><text>The scope of the response requirement set forth in
subparagraph (A), includes—</text>
<clause id="ID392830d0f3bf408ea6961b946f2e8a57"><enum>(i)</enum><text>providing—</text>
<subclause id="ID48e471bba8d74f17964ccf83b1cbb566"><enum>(I)</enum><text>the status of the
borrowers account, including whether the account is current, or if not, the
date the account went into default;</text>
</subclause><subclause id="ID0a3af0ff9f124611896a1888b4a1182b"><enum>(II)</enum><text>the current
balance due on the home mortgage loan of the borrower, including the principal
due, an explanation of the escrow balance, and whether there are any escrow
deficiencies or shortages;</text>
</subclause><subclause id="ID39f9b2ecc8764c00a496c22294e12154"><enum>(III)</enum><text>a full payment
history of the borrower, which shows in a clear and easily understandable
manner all of the activity on the home mortgage loan of the borrower since the
origination of the loan, including the escrow account and the application of
payments; and</text>
</subclause><subclause id="ID7e156d4c1ef1499c9aab7162afdfe028"><enum>(IV)</enum><text>a copy of the
original note and security instrument;</text>
</subclause></clause><clause id="IDbaf9ae3709234118bf2d745a193f7634"><enum>(ii)</enum><text>correcting
errors relating to the allocation of payments made by the borrower, final
balances for purposes of paying off the loan or avoiding foreclosure, and other
lender or loan servicer obligations;</text>
</clause><clause id="ID1296b5eb8eba4f6999d1279e419dcc9d"><enum>(iii)</enum><text>providing the
identity, address, and other relevant information about the owner or assignee
of the home mortgage loan; and</text>
</clause><clause id="IDb1742b911a9b4b97b92d06d25e359af3"><enum>(iv)</enum><text>providing a
telephone number on each regular account statement that gives the borrower
access to a live person with the information and authority to answer questions
and resolve issues.</text>
</clause></subparagraph></paragraph><paragraph id="ID6cda6c91f921479783f7a06b0477fe33"><enum>(2)</enum><header>No sharing of
information</header><text>During the 90-day period beginning on the date of the
receipt of a request from a borrower under paragraph (1), a lender or loan
servicer may not provide information to any reporting agency regarding any
overdue payment, or other default on the home mortgage loan, by such borrower
to any consumer reporting agency (as such term is defined in section 603(f) of
the Fair Credit Reporting Act).</text>
</paragraph><paragraph id="ID673e240e87fa419799ec9bf01ee767f8"><enum>(3)</enum><header>Maintenance of
records</header><text>A lender or loan servicer shall maintain written and
electronic records of the handling of any oral request made by a borrower under
this subsection.</text>
</paragraph></subsection><subsection id="ID9bd5a5d436844bfa931bcad441f95787"><enum>(h)</enum><header>Mandatory loss
mitigation</header>
<paragraph id="id1F1E94D8646144A69F111C475F99D422"><enum>(1)</enum><header>In
general</header><text>A lender or loan servicer shall not initiate a
foreclosure of a home mortgage loan unless that lender or loan servicer has
made a good faith review of the financial situation of the borrower designated
in such home mortgage loan contract and has offered, whenever feasible, a
repayment plan, forbearance, loan modification, or other option to assist the
borrower in bringing his or her delinquent account into arrears. In the event
that such options are not feasible, the lender or loan servicer shall refer the
borrower to a housing counseling agency approved by the Secretary of Housing
and Urban Development under section 106(d) of the Housing and Urban Development
Act of 1968 (12 U.S.C. 1701x(d)).</text>
</paragraph><paragraph id="id8A2BF314819C406AB831F3DC1F70371D"><enum>(2)</enum><header>Reports on loss
mitigation activities</header>
<subparagraph id="idFD9B555F53C2498D81323B07D2CCFEB3"><enum>(A)</enum><header>In
general</header><text>Each servicer shall report to the Board once every 3
months on the extent and results of its loss mitigation activities.</text>
</subparagraph><subparagraph id="id2F15B88D740142EF91E58518BC33A12A"><enum>(B)</enum><header>Form and
content</header><text>The Board shall prescribe, by regulation, the form and
content of the reports required by this paragraph which shall include—</text>
<clause id="id7E91BF864D1242D7823F8510F4F14DD5"><enum>(i)</enum><text>categories of
measures that result in modifications of loan provisions, including payment
schedules, loan principle, and loan interest;</text>
</clause><clause id="id73AFF7DA477246D1B43C3A7C840EB066"><enum>(ii)</enum><text>forebearance
agreements;</text>
</clause><clause id="id0BCDCC0D6F3E49DD89A1DE99EAFE0379"><enum>(iii)</enum><text>acceptance of a
reduced amount in satisfaction of the loan;</text>
</clause><clause id="id615EC732CF164B5AAEEADB32A026504B"><enum>(iv)</enum><text>assumption of
the loan;</text>
</clause><clause id="id1DD10EED28384B9583D01BE23A8A7482"><enum>(v)</enum><text>pre-foreclosure
sales; and</text>
</clause><clause id="idEA8542358D1E4ECFBB3CCDFAC32899F0"><enum>(vi)</enum><text>deeds in lieu of
foreclosure, and foreclosures.</text>
</clause></subparagraph><subparagraph id="idA17EAA38098F4E4BAACDCBEA36DB2DD2"><enum>(C)</enum><header>Basis</header><text>Data
required by this paragraph shall be reported on a servicer and lender
basis.</text>
</subparagraph><subparagraph id="idC5233EF43F8A4233B0D949ECB740BEC2"><enum>(D)</enum><header>Public
availability</header><text>The Board shall make data received under this
paragraph publicly available, and shall annually report to Congress on servicer
loss mitigation activities.</text>
</subparagraph></paragraph><paragraph id="ID2b4d9ae82e604c4aae536cd6b48228ba"><enum>(3)</enum><header>Failure to
comply</header><text>Failure by a lender or loan servicer to comply with the
requirements under paragraph (1) shall constitute a defense to any
foreclosure.</text>
</paragraph></subsection><subsection id="IDc6f354b7816341a085ddd657d1daa387"><enum>(i)</enum><header>Payoff
statements</header>
<paragraph id="ID29f9261aeed74ede81a89359d6097f09"><enum>(1)</enum><header>Prohibition on
fees</header>
<subparagraph id="IDacea73b2bcc844dda172754acebf81c0"><enum>(A)</enum><header>In
general</header><text>No lender or loan servicer (or any third party acting on
behalf of such lender or loan servicer) may charge a fee for transmitting to
any borrower the amount due to pay off the outstanding balance on the home
mortgage loan of such borrower.</text>
</subparagraph><subparagraph id="ID53a32e6d15ec4c7784efd09193cb2726"><enum>(B)</enum><header>Exception</header><text>After
a lender or loan servicer (or any third party acting on behalf of such lender
or loan servicer) has provided the information described in subparagraph (A)
without charge on 4 occasions during a calendar year, the lender or loan
servicer (or any third party acting on behalf of such lender or loan servicer)
may thereafter charge a reasonable fee for providing such information during
the remainder of the calendar year.</text>
</subparagraph></paragraph><paragraph id="ID38a56a0c727b4d0d87dfd99742e86231"><enum>(2)</enum><header>Timing</header><text>The
information described in subparagraph (A) shall be provided to the borrower
within a reasonable period of time but in any event not more than 5 business
days after the receipt of the request by the lender or loan servicer.</text>
</paragraph></subsection><subsection id="id8C7F2FDD750D43EF9C1CCE2258178932"><enum>(j)</enum><header>Civil
liability</header>
<paragraph id="idB8018DA5E47B458583A5AB38F03059AF"><enum>(1)</enum><header>In
general</header><text>Any lender or loan servicer who fails to comply with any
requirement of this section with respect to a borrower designated in a home
mortgage loan contract, is liable to such borrower in an amount equal to the
sum of—</text>
<subparagraph id="ID47a82d32fd604d0d8d24c364ff49a951"><enum>(A)</enum><text>any actual
damages sustained by such borrower as a result of the failure;</text>
</subparagraph><subparagraph id="ID2ef08f799ee040e9a29066e4845bbd8f"><enum>(B)</enum><text>an amount not
less than $5,000; or</text>
</subparagraph><subparagraph id="IDbee0c255001e49b09832645587c09af8"><enum>(C)</enum><text>in the case of
any successful action to enforce the foregoing liability the costs of the
action, together with a reasonable attorney’s fee as determined by the
court.</text>
</subparagraph></paragraph><paragraph id="idBA48CA8FA5B24EF38F865596FA31D982"><enum>(2)</enum><header>Jurisdiction</header><text>Any
action by a borrower for a failure to comply with the requirements of this
section may be brought in any United States district court, or in any other
court of competent jurisdiction, not later than 3 years from the date of the
occurrence of such violation. This subsection does not bar a person from
asserting a violation of this section in an action by a lender or loan servicer
to collect the debt owed on a home mortgage loan, or foreclose upon the home
securing a home mortgage loan, or to stop a foreclosure upon that home, which
was brought more than 3 years after the date of the occurrence of the violation
as a matter of defense by recoupment or set-off in such action. An action under
this section does not create an independent basis for removal of an action to a
United States district court.</text>
</paragraph><paragraph id="idC840E341F4414C26866CCB61237DCE1F"><enum>(3)</enum><header>State attorney
general enforcement</header><text>An action to enforce a violation of this
section may also be brought by the appropriate State attorney general in any
appropriate United States district court, or any other court of competent
jurisdiction, not later than 3 years after the date on which the violation
occurs. An action under this section does not create an independent basis for
removal of an action to a United States district court.</text>
</paragraph></subsection><subsection id="id3E654AC08DC04A7B99E19C3D72E393F1"><enum>(k)</enum><header>Definitions</header><text>In
this section, the following definitions shall apply:</text>
<paragraph id="id09F36FCDD348435C96DD2B4F094330CC"><enum>(1)</enum><header>Lender</header><text>The
term <term>lender</term> has the same meaning as in section 3500.2 of title 24,
Code of Federal Regulations, as in effect on the date of enactment of this
section.</text>
</paragraph><paragraph id="id7354A6F3F54F45AEB0375A381C21B489"><enum>(2)</enum><header>Loan
servicer</header><text>The term <term>loan servicer</term> has the same meaning
as the term <term>servicer</term> in section 6(i)(2) of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C.
2605(i)(2)).</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="idA67BDECD68A74B27A87DF21A929C9289"><enum>502.</enum><header>Real estate
settlement procedures</header><text display-inline="no-display-inline">Section
6(b)(3) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C.
2605(b)(3)) is amended by adding at the end the following new
subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="id664841FC849942198ABDC3CB40761B68" style="OLC">
<subparagraph id="idD5BD2017BD5B4024AA9027755A42242D"><enum>(H)</enum><text>A statement
explaining—</text>
<clause id="IDfae8ec9cd60d42a990ed7f707237d792"><enum>(i)</enum><text>whether the
account of the borrower is current, or if the account is not current, an
explanation of the reason and date the account went into default;</text>
</clause><clause id="ID0f373ba519854a368dd588988acd331d"><enum>(ii)</enum><text>the current
balance due on the loan, including the principal due, an explanation of the
escrow balance, and whether there are any escrow deficiencies or shortages;
and</text>
</clause><clause commented="no" display-inline="no-display-inline" id="ID4eaaa38a762c40a6811549295419ec9e"><enum>(iii)</enum><text>a full payment
history of the borrower which shows in a clear and easily understandable
manner, all of the activity on the home mortgage loan since the origination of
the loan or the prior transfer of servicing, including the escrow account, and
the application of
payments.</text>
</clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="idB9C55D7348EA48E5BABBB52D728810FB"><enum>503.</enum><header>Effective
date</header><text display-inline="no-display-inline">This title and the
amendments made by this title shall become effective 90 days after the date of
enactment of this Act, and shall apply to loan servicers and loan servicing
activities on and after that effective date.</text>
</section><enum>VI</enum><header>Foreclosure prevention
counseling</header>
<section id="idE260C00F87774BCBA63EF68A0BE92654"><enum>601.</enum><header>Foreclosure
prevention counseling</header><text display-inline="no-display-inline">Section
106(d)(6) of the Housing and Urban Development Act of 1968 (12 U.S.C.
1701x(d)(6)) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id91C880C0E357424B95A2D03E624AB96B" style="OLC">
<paragraph id="id4FCC3C93F4ED4C4F8EE2E3A36CBFC4D0"><enum>(6)</enum><header>Foreclosure
prevention counseling</header>
<subparagraph id="id4D5944BBE1CE40B29D6F7B69F158AE4A"><enum>(A)</enum><header>Notification at
time of settlement of availability of counseling upon delinquency</header>
<clause id="id2E20FC846E9B4C149C604B0BF0E4F914"><enum>(i)</enum><header>In
general</header><text>At the time of settlement of any real estate transaction
involving a qualified mortgage, and together with the final signed loan
documents, a lender or loan servicer shall provide to each eligible homeowner a
plain language statement in conspicuous 16-point type or larger which shall
include the following:</text>
<subclause id="id4BBB066401CE444BB212FF93CEE2ADB7"><enum>(I)</enum><header>Counseling
statement</header><text>A counseling statement that reads as follows:</text>
</subclause><continuation-text continuation-text-level="clause">‘If you are
more than 30 days late on your mortgage payments, your lender or loan servicer
shall notify you of housing counseling agencies approved by the Secretary of
Housing and Urban Development that may be able to assist you. Before you miss
another mortgage payment, you are strongly encouraged to contact your lender or
loan servicer or 1 of these agencies for assistance. If you are more than 60
days late on your mortgage payments, your lender or loan servicer shall send
you a second notification containing this information. In addition, if you are
more than 60 days late on your mortgage payment, your lender or loan servicer
shall notify an approved housing counseling agency so that such agency can
contact you regarding any assistance it may be able to provide.</continuation-text><continuation-text continuation-text-level="clause">‘You can also
choose a housing counseling agency from the list provided with this statement
to assist you. By calling 1 of these approved housing counseling agencies and
signing an authorization form, your agency of choice will notify your lender or
loan servicer of your decision.’.</continuation-text><subclause id="idD5DAE72725B1428CBA5160C0C8A1639A"><enum>(II)</enum><header>Counseling
agency listing</header><text>A listing of at least 5 national, State and local
housing counseling agencies approved by the Secretary. It is the responsibility
of the lender or loan servicer to ensure that—</text>
<item id="ID5c2d1969ccb945288c9a5796183059f3"><enum>(aa)</enum><text>if
fewer than 5 approved housing counseling agencies serve the area where the
eligible homeowner is located, all available housing counseling agencies in
that area shall be listed; and</text>
</item><item id="IDeaba1cc4fe4e44299b5d0e467195641a"><enum>(bb)</enum><text>the list shall
include options of housing counseling agencies that provide in-person
counseling, as well as telephone counseling.</text>
</item></subclause></clause><clause id="id444EC7F70953439E9D2AF13EDF07ED96"><enum>(ii)</enum><header>Notice</header><text>Any
notice required to be sent pursuant to this subparagraph shall be sent by first
class mail to the last known address of the eligible homeowner and if
different, to the residence which is the subject of the mortgage. The notice
shall also be sent by registered or certified mail.</text>
</clause></subparagraph><subparagraph id="id514399F287744F37BCB84C3D1EC0C028"><enum>(B)</enum><header>Notification of
availability of counseling upon delinquency after 60 days</header>
<clause id="id209470E194974E76A88FB78B937E5079"><enum>(i)</enum><header>In
general</header><text>Before a lender or loan servicer accelerates the maturity
of a mortgage obligation, commences legal action, including mortgage
foreclosure to recover under the obligation, or takes possession of a security
of the mortgage debtor for the mortgage obligation, the lender or loan servicer
is required to give notice to an eligible homeowner in conspicuous 16-point
type or larger which shall include the following:</text>
<subclause id="idAF54986AB452423482A54D1150ABE6B8"><enum>(I)</enum><header>Housing
counseling information in notice foreclosure statement</header><text>A
foreclosure notice that includes the following statement (blank lines to be
filled in by the lender or loan servicer, as appropriate):</text>
</subclause><continuation-text continuation-text-level="clause">‘This is an
official notice that the mortgage on your home is in default, and the lender
intends to foreclose in ___ days. The name, address, and phone number of
housing counseling agencies approved by the Secretary of Housing and Urban
Development serving your county are listed at the end of this notice.</continuation-text><continuation-text continuation-text-level="clause">‘In addition,
your lender or loan servicer shall notify such an approved housing counseling
agency of your default so that such agency can contact you regarding any
assistance it may be able to provide. You have the right to request that your
lender or loan servicer not share your information with a housing counseling
agency.</continuation-text><continuation-text continuation-text-level="clause">‘You can also
choose an approved housing counseling agency from the list provided with this
notice to assist you. By calling one of these approved housing counseling
agencies and signing an authorization form, your agency of choice will notify
your lender or loan servicer of your decision.’.</continuation-text><subclause id="id81CA41F28AB04394AFE40A63ECF4C72C"><enum>(II)</enum><header>Counseling
agency listing</header><text>A listing of at least 5 State and local housing
counseling agencies approved by the Secretary. It is the responsibility of the
lender or loan servicer to ensure that—</text>
<item id="id0141A4BE3A22405DAE8140D5754A66FC"><enum>(aa)</enum><text>if
fewer than 5 approved housing counseling agencies serve the area where the
eligible homeowner is located, all available housing counseling agencies in
that area shall be listed; and</text>
</item><item id="id10014A734DDA42EA8020383C1E9AF86F"><enum>(bb)</enum><text>the list shall
include options of housing counseling agencies that provide in-person
counseling, as well as telephone counseling.</text>
</item></subclause></clause><clause commented="no" display-inline="no-display-inline" id="idAE1D24510BC640F8AA6DA9E635569574"><enum>(ii)</enum><header>Notice</header><text>Any
notice required to be sent pursuant to this subparagraph shall be sent by first
class mail to the last known address of the eligible homeowner and if
different, to the residence which is the subject of the mortgage. The notice
shall also be sent by registered or certified mail</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idE754BFD3CEE64B9583DFCDB4B7CEA5D0"><enum>(iii)</enum><header>Timing</header><text>Any
notice required to be sent pursuant to this subparagraph shall be sent at such
time as the eligible homeowner is at least 60 days contractually delinquent in
his or her mortgage payments or is in violation of other provisions of the
mortgage.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="idCECD592859F24121BE0753C8021ACADD"><enum>(iv)</enum><header>Inclusion in
all foreclosure mailings</header><text>The foreclosure notice and counseling
agency listing required under subclauses (I) and (II) of clause (i) shall be
included with all foreclosure mailings sent to an eligible homeowner.</text>
</clause></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idB7A4733793304013B4C8EDAD8124015D"><enum>(C)</enum><header>No foreclosure
if application for foreclosure prevention services</header><text>A lender or
loan servicer shall not initiate or continue a foreclosure—</text>
<clause id="ID62888a90c9c140c5abeea4b702123698"><enum>(i)</enum><text>upon receipt of a
written confirmation that an eligible homeowner has engaged a housing
counseling agency approved by the Secretary for the purposes of receiving
foreclosure prevention services and assistance; and</text>
</clause><clause id="ID3ae6e60eb4064936aa31aee6b81e2f9d"><enum>(ii)</enum><text>for the 45-day
period beginning on the date of receipt of such written confirmation.</text>
</clause></subparagraph><subparagraph id="id8A335CFC3C08472187DD38555E9EAC1F"><enum>(D)</enum><header>Duties</header>
<clause id="id9368714DDE034526963ABCE16285DFD8"><enum>(i)</enum><header>Duty of lender
or servicer to forward information</header>
<subclause id="idD18E1009FC4E42A8B649D3D8128416D9"><enum>(I)</enum><header>In
general</header><text>Each lender or loan servicer shall forward the contact
information of each eligible homeowner who has borrowed amounts from such
lender or loan servicer for a qualified mortgage to a housing counseling agency
approved by the Secretary in the event the mortgage payment of that homeowner
is or becomes more than 60 days late so that the housing counseling agency can
attempt to reach the homeowner.</text>
</subclause><subclause id="ID9dafda7d3bb84d0c82556011cc27e951"><enum>(II)</enum><header>Pre-existing
relationship</header><text>In the case that an eligible homeowner has a
pre-existing relationship with a housing counseling agency approved by the
Secretary, or a preference for one agency over another, the homeowner may
indicate as such—</text>
<item id="IDce7de18e0c45496e978e606ed2d6c551"><enum>(aa)</enum><text>at
the time of settlement of the real estate transaction involving a qualified
mortgage issued to that homeowner;</text>
</item><item id="ID62f6857579044a02893c4dc9552f810e"><enum>(bb)</enum><text>by
providing written correspondence to the lender or loan servicer for such
qualified mortgage stating which housing counseling agency the homeowner would
like to work with in case the homeowner should become delinquent in his or her
mortgage payments; or</text>
</item><item id="IDd1c74f34dd8c4cdab8560ae603741795"><enum>(cc)</enum><text>by
signing an authorization form at the office of such housing counseling agency
of choice, which form shall then be sent to the lender or loan servicer.</text>
</item></subclause><subclause id="ID0568cc8d0df84f69a0678ab7040f22a4"><enum>(III)</enum><header>Rules of
construction</header><text>In order to carry out the provisions of this
paragraph, lenders and loan servicers may form relationships with housing
counseling agencies approved by the Secretary to provide services to eligible
homeowners. Notwithstanding the previous sentence, exclusive relationships
between any such parties are strictly prohibited.</text>
</subclause></clause><clause id="idE4A55E5AA23C4E4FA3A4556266A990F8"><enum>(ii)</enum><header>Agency
representation of homeowner</header><text>When a housing counseling agency
provides a lender or loan servicer with a signed authorization form to
represent an eligible homeowner, the lender or servicer shall respond to
requests from that agency for information within 3 days, and to any workout
proposals of that agency within 7 days. A lender or loan servicer may not
refuse to work with a housing counselor from a housing counseling agency
approved by the Secretary, if a signed authorization form an eligible homeowner
has been received by that lender or loan servicer (faxed, scanned, and other
electronically reproduced authorizations of such authorization form shall also
be acceptable).</text>
</clause><clause id="idE0175ABA9C734F5AA75F2D7998B402B8"><enum>(iii)</enum><header>Required
disclosures to homeowner</header><text>Each eligible homeowner shall be
informed at the time of settlement of the real estate transaction involving a
qualified mortgage issued to that homeowner that under this paragraph a housing
counseling agency may provide easier access to assistance in case the homeowner
becomes delinquent on his or her mortgage payments and that no information that
would make it possible to identify the homeowner will be given to any other
entity for any reason without the prior approval of the homeowner.</text>
</clause><clause id="id1728D23B19D344CD8DF0CD35C3F633B2"><enum>(iv)</enum><header>Required
resolutions</header><text>A lender or loan servicer shall be required to
consider all loss mitigation resolutions for each case of foreclosure initiated
by the lender or loan servicer, including the modification of a qualified
mortgage to a more permanent, affordable interest rate.</text>
</clause><clause id="idB763E90BC2634D6885D4572601D4EA70"><enum>(v)</enum><header>Required
disclosures to housing counseling agencies</header><text>A lender or loan
servicer shall disclose to any housing counseling agency approved by the
Secretary and authorized to represent an eligible homeowner the name of the
originator of the loans as stated in the Pooling and Servicing Agreement, and
the name of the pool Trustee.</text>
</clause></subparagraph><subparagraph id="id9DFF71A3C732412DADE5BA4CC3E8CF10"><enum>(E)</enum><header>Reimbursements
for housing counseling services</header>
<clause id="idB9ABC7C1409B4F6C8D468059908A6D0A"><enum>(i)</enum><header>In
general</header><text>A lender or loan servicer of a qualified mortgage made to
an eligible homeowner shall reimburse the housing counseling agency that is
authorized to represent the homeowner upon the rendering of services by such
agency to the homeowner under this paragraph.</text>
</clause><clause id="IDbbafcaa0cb0a46c59e37348636a6c86b"><enum>(ii)</enum><header>Reimbursement</header><text>A
lender or loan servicer shall seek reimbursement for the payment of housing
counseling services as described under clause (i) from the Trust, if any,
designated in the lender or servicer’s Pooling and Servicing Agreement.</text>
</clause></subparagraph><subparagraph id="idB3DE9E502E074B2582BD2B2C956BBEE1"><enum>(F)</enum><header>Availability of
waiver</header>
<clause id="id87DA8E21D75348CF9AD0F68AD67614F4"><enum>(i)</enum><header>In
general</header><text>An eligible homeowner may choose not to receive
information regarding State and local housing counseling agencies approved by
the Secretary, or to have their information shared with State and local housing
counseling agencies, or both, at any time after default. An eligible homeowner
may also submit a signed letter to their lender or loan servicer at any time
after default to waive their right to receive information regarding State and
local housing counseling agencies.</text>
</clause><clause commented="no" display-inline="no-display-inline" id="id5C838086B5AB4D22AAEAEED8C475C44A"><enum>(ii)</enum><header>Limitation on
waiver</header><text>The waiver described under clause (i) shall only apply to
the receipt of information regarding housing counseling agencies located in the
area where the homeowner is located or the sharing of the homeowner’s personal
information with such agencies. The waiver described under clause (i) shall not
apply to the right of the homeowner to seek foreclosure prevention counseling,
nor does it relieve the lender or loan servicer of the requirement to notify
the homeowner of the availability of counseling as described in this
section.</text>
</clause></subparagraph><subparagraph id="id2A9BC3B075494CEFA59EF7439D1D14CC"><enum>(G)</enum><header>Definitions</header><text>In
this paragraph, the following definitions shall apply:</text>
<clause id="id638D7CF7CDA94973AA53D1866FE5EE79"><enum>(i)</enum><header>Lender</header><text>The
term <quote>lender</quote> has the same meaning as in section 3500.2 of title
24, Code of Federal Regulations.</text>
</clause><clause id="id52BE8099A46445738D768E39E27416E7"><enum>(ii)</enum><header>Loan
servicer</header><text>The term <quote>loan servicer</quote> has the same
meaning as the term <quote>servicer</quote> as that term is defined in section
6(i)(2) of the Real Estate Settlement Procedures Act (12 U.S.C.
2605(i)(2)).</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><enum>VII</enum><header>Remedies and
enforcement</header>
<section id="id10028442544A4FC99010553E9CCCB49F"><enum>701.</enum><header>Material
disclosures and violations</header>
<subsection id="ID5c84330427004cae9fb204b1878d451f"><enum>(a)</enum><header>Material
disclosures</header><text>Section 103(u) of the Truth in Lending Act (15 U.S.C.
1602(u)) is amended by—</text>
<paragraph commented="no" id="IDa3b17854255d4bf2a792706aed9861d4"><enum>(1)</enum><text>striking
<quote>material disclosures</quote> and inserting <quote>material disclosures
or violations</quote>; and</text>
</paragraph><paragraph id="IDbf4ededd552143f2b4a6b3d31df6e6de"><enum>(2)</enum><text>striking
<quote>and the disclosures required by section 129(a)</quote> and inserting
<quote>and the provisions of sections 129, 129A, and 129B.</quote>.</text>
</paragraph></subsection><subsection id="ID14ed259832cf454db699ff774a3b67fd"><enum>(b)</enum><header>Consequences of
failure To comply</header><text>Section 129(j) of the Truth in Lending Act (15
U.S.C. 1639(j)) is amended by striking <quote>contains a provision prohibited
by</quote> and inserting <quote>violates a provision of</quote>.</text>
</subsection></section><section id="ID63a1a11e97b1419d9d11fe3aad7315b8"><enum>702.</enum><header>Right of
rescission</header>
<subsection id="IDebca557379204563985a8352419f4a46"><enum>(a)</enum><header>Time limit for
exercise of right</header><text>Section 125(f) of the Truth in Lending Act (15
U.S.C. 1635(f)) is amended by striking <quote>An obligor’s right of rescission
shall expire three years after the date of consummation</quote> and inserting
<quote>An obligor’s right of rescission shall extend to 6 years from the date
of consummation</quote>.</text>
</subsection><subsection id="IDd57f83dab0804e4dacd279107a2e27f4"><enum>(b)</enum><header>Assertion of
right</header><text>Section 130(e) of the Truth in Lending Act (15 U.S.C.
1640(e)) is amended by inserting after the second sentence the following new
sentence: <quote>This subsection shall not bar a person from asserting a right
to rescission under section 125 in an action to collect the debt or as a
defense to a judicial foreclosure or to stop a nonjudicial foreclosure after
the expiration of the time period set forth in section 125(f), but not exceed
10 years from the date of the consummation of the transaction.</quote>.</text>
</subsection></section><section id="idC5FF1365129C4D5D88D919016D44BB90"><enum>703.</enum><header>Civil
liability</header>
<subsection id="id9C427A90580A4224A7CDA4CE092160BB"><enum>(a)</enum><header>In
general</header><text>Section 130 of the Truth in Lending Act (15 U.S.C. 1640)
is amended by—</text>
<paragraph id="id8E6E6BAFCF264777BAAF966652466A5A"><enum>(1)</enum><text>striking
<quote>creditor</quote> and inserting <quote>creditor or mortgage
broker</quote> in each place that term appears;</text>
</paragraph><paragraph id="id8F901D8198DC4C1FAE81F81B4790B006"><enum>(2)</enum><text>striking
<quote><header-in-text level="subsection" style="OLC">creditor</header-in-text></quote> and inserting
<quote><header-in-text level="subsection" style="OLC">creditor or mortgage
broker</header-in-text></quote> in each place that term appears; and</text>
</paragraph><paragraph id="id0D8452D6DB854362AE7D1A0380CE2554"><enum>(3)</enum><text>striking
<quote>creditor's</quote> and inserting <quote>creditor's or mortgage
broker's</quote> in each place that term appears.</text>
</paragraph></subsection><subsection id="IDa1444ccf3de04479ab7ee1f2900924ff"><enum>(b)</enum><header>Statute of
limitations extended for section 129, 129A, or 129B
Violations</header><text>Section 130(e) of the Truth in Lending Act (15 U.S.C.
1640(e)), as amended by section 702(b), is further amended—</text>
<paragraph id="ID3fb7c9632e334e08aca59c109a300f3b"><enum>(1)</enum><text>in the first
sentence, by striking <quote>Any action</quote> and inserting <quote>Except as
otherwise provided in this subsection, any action</quote>;</text>
</paragraph><paragraph id="IDa463dda53ecc4b8ea437ec27d4202db7"><enum>(2)</enum><text>by inserting
after the first sentence the following new sentence: <quote>Any action under
this section with respect to any violation of section 129, 129A, or 129B may be
brought in any United States district court, or in any other court of competent
jurisdiction, within 3 years from the date of the occurrence of the
violation.</quote>; and</text>
</paragraph><paragraph id="ID586efa1e5cea4cca9c1ec8888a9acdd7"><enum>(3)</enum><text>in the fifth
sentence (as so redesignated) by striking <quote>violation of section
129</quote> and inserting <quote>violation of section 129, 129A, or
129B</quote>.</text>
</paragraph></subsection><subsection id="id2BA52D77E51B48D0A24D7ED6DC13E66D"><enum>(c)</enum><header>Enforcement by
State attorneys general</header><text>An action to enforce a violation of
section 129, 129A, or 129B of the Truth in Lending Act, as amended and added by
this Act, may also be brought by the appropriate State attorney general in any
appropriate United States district court, or any other court of competent
jurisdiction, not later than 3 years after the date on which the violation
occurs. An action under this subsection does not create an independent basis
for removal of an action to a United States district court.</text>
</subsection><subsection id="ID12b7023975b34628b5640e5ad1f48452"><enum>(d)</enum><header>Other changes
to civil liability</header>
<paragraph id="IDbd91346c1f2a40dd9fa9afc2d08148de"><enum>(1)</enum><header>Amount of
award</header><text>Section 130(a)(2) of the Truth in Lending Act (15 U.S.C.
1640(a)(2)) is amended—</text>
<subparagraph id="id8D14E5CFE5BE4CBC963E5DD51729B80D"><enum>(A)</enum><text>in subparagraph
(A)(iii), by—</text>
<clause id="id71654ECE7D4D4B7E9D18CEF5DC3205A2"><enum>(i)</enum><text>striking
<quote>$200</quote> and inserting <quote>$500</quote>;</text>
</clause><clause id="idB9DC13AC3E99468EA2EEEE1E2D41351E"><enum>(ii)</enum><text>striking
<quote>$2,000</quote> and inserting <quote>$5,000</quote>; and</text>
</clause><clause id="id491A8E66B58E4DB68277E3B678EED36D"><enum>(iii)</enum><text>adding before
the semicolon at the end the following: <quote>, such amount to adjusted
annually based on the consumer price index, to maintain current value.</quote>;
and</text>
</clause></subparagraph><subparagraph id="id735AD3EA42B44E3582CE69B7CA1CD457"><enum>(B)</enum><text>in subparagraph
(B), by striking <quote>500,000</quote> and inserting
<quote>$5,000,000</quote>.</text>
</subparagraph></paragraph><paragraph id="ID8af9f888bc144831921a3ffd3328f0b6"><enum>(2)</enum><header>Failure to
comply with section 129A</header><text>Section 130(a)(4) of the Truth in
Lending Act (15 U.S.C. 1640(a)(4)) is amended by inserting <quote>or
129A</quote> after <quote>129</quote>.</text>
</paragraph></subsection></section><section id="id0110EB8047AD4217A98214463A5D5AD2"><enum>704.</enum><header>Liability for
monetary damages</header><text display-inline="no-display-inline">Section 131
of the Truth in Lending Act (15 U.S.C. 1641) is amended by—</text>
<paragraph id="id5CD924EAFB014D09A3E3A9522B0BF4B6"><enum>(1)</enum><text>by redesignating
subsection (f) as subsection (g); and</text>
</paragraph><paragraph id="id925C08B350B144788837E028FC8EBAF1"><enum>(2)</enum><text display-inline="yes-display-inline">by inserting after subsection (e) the
following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="idD3CC6FF4DAFE4E8ABAA56E04D5DBFDE1" style="OLC">
<subsection id="IDe281e815c80346679cb9b7a70527c2c0"><enum>(f)</enum><header>Liability of
assignees for monetary damages for violations of sections 129A and
129B</header>
<paragraph id="ID4b1effc7e560447aa4cb606dde86b450"><enum>(1)</enum><header>Subprime or
nontraditional loans</header>
<subparagraph id="ID2cb37a9ad792451daf18d01da19cdd62"><enum>(A)</enum><header>Individual
actions</header><text>Notwithstanding subsections (a) and (e), any person who
purchases, holds, or is otherwise assigned a mortgage or similar security
interest in connection with a subprime or nontraditional home mortgage loan,
other than a loan described under section 103(aa), shall be liable in an
individual action for remedies available under section 130 for violations of
sections 129A and 129B that the consumer could assert against the creditor or
mortgage originator originating that mortgage.</text>
</subparagraph><subparagraph id="IDa804a9f8c37542dca1f4ee9eee78066e"><enum>(B)</enum><header>Class
actions</header><text>Notwithstanding subsections (a) and (e), any person who
purchases, holds, or is otherwise assigned a mortgage or similar security
interest in connection with a subprime or nontraditional home mortgage loan,
other than a loan described under section 103(aa), shall be liable in a class
action for remedies available under section 130 for violations of section 129A
that the consumer could assert against the creditor or mortgage originator
originating that mortgage, unless such person demonstrates, by a preponderance
of the evidence, that a reasonable person exercising ordinary and independent
due diligence could not determine that the home mortgage loan was not in
compliance with the requirements of section 129A.</text>
</subparagraph></paragraph><paragraph id="ID6af281f5bc714f2ba840680de8d08194"><enum>(2)</enum><header>Other
loans</header><text>Notwithstanding subsections (a) and (e), any person who
purchases, holds, or is otherwise assigned a mortgage or similar security
interest in connection with home mortgage loan other than a loan described
under section 103(aa), a subprime, or a nontraditional loan, shall be liable
only in an individual action for remedies available under section 130 for
violations of section 129B that the consumer could assert against the creditor
or mortgage originator originating that mortgage, provided that such liability
is limited to the amount of all remaining indebtedness and the total amount
paid in connection with the transaction plus amounts required to recover costs,
including reasonable attorneys'
fees.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></section><section id="idC20D99976A214E409F5291C2ECF42D85"><enum>705.</enum><header>Remedy in lieu
of rescission for certain violations</header><text display-inline="no-display-inline">Section 131 of the Truth in Lending Act (15
U.S.C. 1641) is further amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="id1F79AD25118F49C98EB5A01D987BD4AD" style="OLC">
<subsection id="ID727d838bc1774204a91b51324aaaf1d8"><enum>(h)</enum><header>Remedy in lieu
of rescission for certain violations</header><text>At the election of a
consumer entitled to rescind for violations of sections 129, 129A, or 129B, any
person (including a creditor) who holds, purchases, or is otherwise assigned a
mortgage or similar security interest in connection with home mortgage
loan—</text>
<paragraph id="id96CA3BF2C5A046F189D8A2DB6E06C143"><enum>(1)</enum><text>may be required
to make such adjustments to the balance of the obligation as are required under
section 125; and</text>
</paragraph><paragraph id="id801E2859EB3F4FF28951964419270BFC"><enum>(2)</enum><text>shall modify or
refinance the loan, at no cost to the consumer, the resulting balance of which
shall provide terms that would have satisfied the requirements of sections 129,
129A, or 129B at the origination of the loan and to pay costs and reasonable
attorneys
fees.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="idD536581C510B44E19F42EBD6230BD9CE"><enum>706.</enum><header>Prohibition on
mandatory arbitration</header><text display-inline="no-display-inline">Section
131 of the Truth in Lending Act (15 U.S.C. 1641) is further amended by adding
at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id64304A8D75014BE28BA0111D36683455" style="OLC">
<subsection id="idE27996469BBA438AB9DEFEC7ED5F3C78"><enum>(i)</enum><header>Rule of
construction</header><text display-inline="yes-display-inline">No provision in
a home mortgage loan shall be construed to bar a consumer from access to any
judicial procedure, forum, or remedy through any court of competent
jurisdiction under any provision of Federal or State
law.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="id4BC6F7FFD7794C10A17C5E08F2A50CFF"><enum>707.</enum><header>Lender
liability</header><text display-inline="no-display-inline">Section 130 of the
Truth in Lending Act (15 U.S.C. 1640) is amended by adding at the end the
following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="id5A10A9ED0D3946E284AD41658C21F57E" style="OLC">
<subsection id="idE3887E98369B43828FE80745285DF249"><enum>(i)</enum><header>Lender
liability</header>
<paragraph id="ID10e61ac8ab7c4c18a34f479d43bc13cf"><enum>(1)</enum><header>Transitive
liability for subprime loan</header><text>In any case in which a mortgage
broker sells or delivers a high-cost mortgage, a subprime mortgage, or a
nontraditional mortgage, a creditor shall be liable for the acts, omissions,
and representations made by the mortgage broker in connection with such home
mortgage loan.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="ID07924d02a2ee4c488ffafe48281ade8d"><enum>(2)</enum><header>Transitive
liability for other loans</header><text>In the case of any other home mortgage
loan not described under paragraph (1) in which a mortgage broker has received
a yield spread premium or other compensation from a creditor, the creditor
shall be liable for the acts, omissions, and representations made by the
mortgage broker in connection with such home mortgage
loan.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><enum>VIII</enum><header>Other banking
agency authority</header>
<section id="id799B6B5079674267BA0FDB5BC575122E"><enum>801.</enum><header>Inclusion of
all banking agencies in the regulatory authority under the Federal Trade
Commission Act with respect to depository institutions</header>
<subsection id="id730229DB719A4723A65615A652AF6DAE"><enum>(a)</enum><header>In
general</header><text>Section 18(f) of the Federal Trade Commission Act (15
U.S.C. 57a(f)(1)) is amended—</text>
<paragraph id="id0BBD7A33AD734115B6C519B6A4918CB3"><enum>(1)</enum><text>in paragraph
(1)—</text>
<subparagraph id="idB87ACEA5AF91486E965073EE404C81CD"><enum>(A)</enum><text>in the first
sentenced—</text>
<clause id="id8FAAED2D8CE04DEBA4493D04D1EC0489"><enum>(i)</enum><text>by
striking <quote>banks or savings and loan institutions described in paragraph
(3), each agency specified in paragraph (2) or (3) of this subsection shall
establish</quote> and inserting <quote>depository institutions and Federal
credit unions, the Federal banking agencies and the National Credit Union
Administration Board shall each establish</quote>; and</text>
</clause><clause id="idFD5E3F69036B418991B3216FC1D06CDA"><enum>(ii)</enum><text>by
striking <quote>banks or savings and loan institutions described in paragraph
(3), subject to its jurisdiction</quote> and inserting <quote>depository
institutions or Federal credit unions subject to the jurisdiction of such
agency or Board</quote>;</text>
</clause></subparagraph><subparagraph id="id16EB783B3FE6457BB20332762E01AB7E"><enum>(B)</enum><text>in the second
sentence, by striking <quote>The Board of Governors of the Federal Reserve
System (with respect to banks) and the Federal Home Loan Bank Board (with
respect to savings and loan institutions described in paragraph (3))</quote>
and inserting <quote>Each Federal banking agency (with respect to the
depository institutions each such agency supervises)</quote>;</text>
</subparagraph><subparagraph id="id12D0ED24BF624B3D9565BBABD751FC3C"><enum>(C)</enum><text>in the third
sentence—</text>
<clause id="idAFD65BA38B0E45F398A001E27BD610AA"><enum>(i)</enum><text>by
striking <quote>each such Board</quote> and inserting <quote>each such banking
agency and the National Credit Union Administration Board</quote>;</text>
</clause><clause id="idC62476848604473A98DBB63EC09B65DF"><enum>(ii)</enum><text display-inline="yes-display-inline">by striking <quote>banks or savings and
loan institutions described in paragraph (3)</quote> each place such term
appears and inserting <quote>depository institutions subject to the
jurisdiction of such agency</quote>;</text>
</clause><clause id="id8485F94E1821498789705C13AF168C4E"><enum>(iii)</enum><text>by striking
<quote>(A) any such Board</quote> and inserting <quote>(A) any such Federal
banking agency or the National Credit Union Administration Board</quote>;
and</text>
</clause><clause id="idD34ACC60532346368E06C7C31EB538E2"><enum>(iv)</enum><text>by
striking <quote>with respect to banks, savings and loan institutions</quote>
and inserting <quote>with respect to depository institutions</quote>;
and</text>
</clause></subparagraph><subparagraph id="idD3E5EAFD22D743AB847758EB0556FD2F"><enum>(D)</enum><text>by adding at the
end the following: <quote>For purposes of this subsection, the terms
<term>Federal banking agency</term> and <term>depository institution</term>
have the same meaning as in section 3 of the Federal Deposit Insurance
Act.</quote>;</text>
</subparagraph></paragraph><paragraph id="H2E0485C806EC425184E7CDD288472C08"><enum>(2)</enum><text>in paragraph (3),
by inserting <quote>by the Director of the Office of Thrift Supervision</quote>
before the period at the end;</text>
</paragraph><paragraph id="H4BA542DF8ADC41AEBA3D7F9F99ECB5C6"><enum>(3)</enum><text display-inline="yes-display-inline">in paragraph (4), by inserting <quote>by
the National Credit Union Administration</quote> before the period at the end;
and</text>
</paragraph><paragraph id="id1AEF190AD26A403481DE73712B7E3AB8"><enum>(4)</enum><text>by amending
paragraph (5) to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="id79F3AB801DD44B1687CC0B5B4FC1A44D" style="OLC">
<paragraph id="idF097B44D84714C31991C5C3AE5ED6A99" indent="up1"><enum>(5)</enum><text>For the purpose of the exercise by
the Federal banking agencies described in paragraphs (2) and (3) and the
National Credit Union Administration Board described in paragraph (4) of its
powers under any Act referred to in those paragraphs, a violation of any
regulation prescribed under this subsection shall be considered a violation of
a requirement imposed under that Act. In addition to its powers under any
provision of law specifically referred to in paragraphs (2) through (4), each
of the agencies or the Board referred to in those paragraphs may exercise, for
the purpose of enforcing compliance with any regulation prescribed under this
subsection, any other authority conferred on it by
law.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="id6AFC8C931B404A3291E7672E4CFCC7E1"><enum>(b)</enum><header>Preemption</header><text>Such
section 18(f) is further amended by striking paragraph (6) and inserting the
following:</text>
<quoted-block display-inline="no-display-inline" id="id0F182D33BA4F4775A308BFE352AEEF21" style="OLC">
<paragraph id="IDa773b2435ab245b3b7c0a9e3f2e66036" indent="up1"><enum>(6)</enum><text>Notwithstanding anything in this
subsection or any other provision of law, including the National Bank Act (12
U.S.C. 38 et seq.) and the Home Owners' Loan Act (12 U.S.C. 1461 et seq.),
regulations promulgated under this subsection shall be considered supplemental
to State laws governing unfair and deceptive acts and practices and may not be
construed to preempt any provision of State law that provides equal or greater
protections.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="id9A70AACFE73C4D6A8BD769CE7C72B399"><enum>(c)</enum><header>Technical
amendment</header><text>Such section 18(f) is further amended in paragraph
(2)(C), by inserting <quote>than</quote> after <quote>(other</quote>.</text>
</subsection></section><enum>IX</enum><header>Miscellaneous</header>
<section id="idB20DF4E12A2C4E6CB36BF72323DCAF43"><enum>901.</enum><header>Authorizations</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 of the
United States, a total of—</text>
<paragraph id="H4DD4666D760D4615A6EEEE2870678B1"><enum>(1)</enum><text>$31,250,000 to
support the employment of 30 additional agents of the Federal Bureau of
Investigation and 2 additional dedicated prosecutors at the Department of
Justice to coordinate prosecution of mortgage fraud efforts with the offices of
the United States Attorneys; and</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="HF0D616B6EA1242148C524785FD45F3E0"><enum>(2)</enum><text display-inline="yes-display-inline">$750,000 to support the operations of
interagency task forces of the Federal Bureau of Investigation in the areas
with the 15 highest concentrations of mortgage fraud.</text>
</paragraph></section>