1.Short title; table of
contents
(a)This Act may be cited
as the Mortgage Reform and
Anti-Predatory Lending Act
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Title I—Residential Mortgage Loan Origination
Standards
Sec. 101. Definitions.
Sec. 102. Residential mortgage loan origination.
Sec. 103. Prohibition on steering incentives.
Sec. 104. Liability.
Sec. 105. Regulations.
Title II—Minimum Standards For Mortgages
Sec. 201. Ability to repay.
Sec. 202. Net tangible benefit for refinancing of residential
mortgage loans.
Sec. 203. Safe harbor and
rebuttable presumption.
Sec. 204. Liability.
Sec. 205. Defense to foreclosure.
Sec. 206. Additional standards and requirements.
Sec. 207. Rule of construction.
Sec. 208. Effect on State laws.
Sec. 209. Regulations.
Sec. 210. Amendments to civil liability provisions.
Sec. 211. Lender rights in the context of borrower
deception.
Sec. 212. Six-month notice required before reset of hybrid
adjustable rate mortgages.
Sec. 213. Credit risk retention.
Sec. 214. Required disclosures.
Sec. 215. Disclosures required in monthly statements for
residential mortgage loans.
Sec. 216. Legal assistance for foreclosure-related
issues.
Sec. 217. Effective date.
Sec. 218. Report by the GAO.
Title III—High-Cost Mortgages
Sec. 301. Definitions relating to high-cost
mortgages.
Sec. 302. Amendments to existing requirements for certain
mortgages.
Sec. 303. Additional requirements for certain
mortgages.
Sec. 304. Amendment to provision governing correction of
errors.
Sec. 305. Regulations.
Sec. 306. Effective date.
Title IV—Office of Housing Counseling
Sec. 401. Short title.
Sec. 402. Establishment of Office of Housing
Counseling.
Sec. 403. Counseling procedures.
Sec. 404. Grants for housing counseling assistance.
Sec. 405. Requirements to use HUD-certified counselors under
HUD programs.
Sec. 406. Study of defaults and foreclosures.
Sec. 407. Definitions for counseling-related
programs.
Sec. 408. Updating and simplification of mortgage information
booklet.
Title V—Mortgage Servicing
Sec. 501. Escrow and impound accounts relating to certain
consumer credit transactions.
Sec. 502. Disclosure notice required for consumers who waive
escrow services.
Sec. 503. Real Estate Settlement Procedures Act of 1974
amendments.
Sec. 504. Mortgage servicing studies required.
Sec. 505. Escrows included in repayment analysis.
Title VI—Appraisal Activities
Sec. 601. Property appraisal requirements.
Sec. 602. Unfair and deceptive practices and acts relating to
certain consumer credit transactions.
Sec. 603. Amendments relating to appraisal subcommittee of
FIEC, appraiser independence, and approved appraiser education.
Sec. 604. Study required on improvements in appraisal process
and compliance programs.
Sec. 605. Equal Credit Opportunity Act amendment.
<enum>I</enum><header>Residential
Mortgage Loan Origination Standards</header>
<section id="HAEDF9D0781CF4C3CA1EFE7E27B4246C0" section-type="subsequent-section"><enum>101.</enum><header>Definitions</header><text display-inline="no-display-inline">Section 103 of the Truth in Lending Act (15
U.S.C. 1602) is amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="HE537E80288794095006C21A84E618200" style="USC">
<subsection id="HD38F7BCBE36841BE9324C2B3C9C5DFEE"><enum>(cc)</enum><header>Definitions
relating to mortgage origination and residential mortgage loans</header>
<paragraph id="H04F1343A848A4181BEA5F748B5EBB702"><enum>(1)</enum><header>Commission</header><text>Unless
otherwise specified, the term <quote>Commission</quote> means the Federal Trade
Commission.</text>
</paragraph><paragraph display-inline="no-display-inline" id="HC5E01A2F0A8A4D6EB1137BA56EBAA39D"><enum>(2)</enum><header>Federal banking
agencies</header><text display-inline="yes-display-inline">The term
<term>Federal banking agencies</term> means the Board of Governors of the
Federal Reserve System, the Comptroller of the Currency, the Director of the
Office of Thrift Supervision, the Federal Deposit Insurance Corporation, and
the National Credit Union Administration Board.</text>
</paragraph><paragraph commented="no" id="HEE45FE0369D44ACF84514FBD7E4743CA"><enum>(3)</enum><header>Mortgage
originator</header><text>The term <quote>mortgage originator</quote>—</text>
<subparagraph commented="no" id="H55050E6592FB441081D2B794C3033884"><enum>(A)</enum><text display-inline="yes-display-inline">means any person who—</text>
<clause commented="no" id="HAF78CCD9C4AF4FB99E9D453DD4B369A0"><enum>(i)</enum><text>takes a
residential mortgage loan application;</text>
</clause><clause commented="no" id="H46718B914E394CDEB5F5AE7CE2ADAD85"><enum>(ii)</enum><text>assists a
consumer in obtaining or applying to obtain a residential mortgage loan;
or</text>
</clause><clause commented="no" id="HD05A5F2A849A44E88F9267D7C4FABC31"><enum>(iii)</enum><text display-inline="yes-display-inline">offers or negotiates terms of a residential
mortgage loan, for direct or indirect compensation or gain, or in the
expectation of direct or indirect compensation or gain;</text>
</clause></subparagraph><subparagraph commented="no" id="HCB707C4F789C4671B9595C9DD5BE87EC"><enum>(B)</enum><text display-inline="yes-display-inline">includes any person who represents to the
public, through advertising or other means of communicating or providing
information (including the use of business cards, stationery, brochures, signs,
rate lists, or other promotional items), that such person can or will provide
any of the services or perform any of the activities described in subparagraph
(A); and</text>
</subparagraph><subparagraph commented="no" id="HCC488EA88C10400AB762DDD8066898B"><enum>(C)</enum><text display-inline="yes-display-inline">does not include any person who is not
otherwise described in subparagraph (A) or (B) and who performs purely
administrative or clerical tasks on behalf of a person who is described in any
such subparagraph.</text>
</subparagraph></paragraph><paragraph commented="no" id="H426AF3A3845244C0991EA29E29F0099"><enum>(4)</enum><header>Nationwide
Mortgage Licensing System and Registry</header><text display-inline="yes-display-inline">The term <quote>Nationwide Mortgage
Licensing System and Registry</quote> has the same meaning as in the Secure and
Fair Enforcement for Mortgage Licensing Act of 2008.</text>
</paragraph><paragraph commented="no" id="HB5A513A4CE654148B43BE463A93B6BCB"><enum>(5)</enum><header>Other
definitions relating to mortgage originator</header><text display-inline="yes-display-inline">For purposes of this subsection, a person
<quote>assists a consumer in obtaining or applying to obtain a residential
mortgage loan</quote> by, among other things, advising on residential mortgage
loan terms (including rates, fees, and other costs), preparing residential
mortgage loan packages, or collecting information on behalf of the consumer
with regard to a residential mortgage loan.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H77E00493303E41E1913FB0001BDDC7B"><enum>(6)</enum><header>Residential
mortgage loan</header><text display-inline="yes-display-inline">The term
<term>residential mortgage loan</term> means any consumer credit transaction
that is secured by a mortgage, deed of trust, or other equivalent consensual
security interest on a dwelling or on residential real property that includes a
dwelling, other than a consumer credit transaction under an open end credit
plan or a reverse mortgage.</text>
</paragraph><paragraph id="H84633975C33F4210B54D0016B497009D"><enum>(7)</enum><header>Secretary</header><text>The
term <quote>Secretary</quote>, when used in connection with any transaction or
person involved with a residential mortgage loan, means the Secretary of
Housing and Urban Development.</text>
</paragraph><paragraph id="H20DCDD2F7F5E4457AA5D377DD9A5B0CB"><enum>(8)</enum><header>Securitization
vehicle</header><text display-inline="yes-display-inline">The term
<quote>securitization vehicle</quote> means a trust, corporation, partnership,
limited liability entity, special purpose entity, or other structure
that—</text>
<subparagraph id="HAE8A99537D3244EF83D648C5F86511A2"><enum>(A)</enum><text>is the issuer, or
is created by the issuer, of mortgage pass-through certificates, participation
certificates, mortgage-backed securities, or other similar securities backed by
a pool of assets that includes residential mortgage loans; and</text>
</subparagraph><subparagraph id="H9F5EC8A321D04139972F5161E4007966"><enum>(B)</enum><text>holds such
loans.</text>
</subparagraph></paragraph><paragraph commented="no" id="HA41E5F9E2F4F4C1DA1FFA6689CDF15ED"><enum>(9)</enum><header>Securitizer</header><text display-inline="yes-display-inline">The term <quote>securitizer</quote> means
the person that transfers, conveys, or assigns, or causes the transfer,
conveyance, or assignment of, residential mortgage loans, including through a
special purpose vehicle, to any securitization vehicle, excluding any trustee
that holds such loans solely for the benefit of the securitization
vehicle.</text>
</paragraph><paragraph id="H0451B5A7E50B424BA96119D0986FD9FF"><enum>(10)</enum><header>Servicer</header><text display-inline="yes-display-inline">The term <term>servicer</term> has the same
meaning as in section 6(i)(2) of the Real Estate Settlement Procedures Act of
1974.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HE3A9ECACBEF34A8F807CE10001DC5109" section-type="subsequent-section"><enum>102.</enum><header>Residential mortgage
loan origination</header>
<subsection id="H835CAECEFDFF475DB3D3916148141C00"><enum>(a)</enum><header>In
general</header><text>Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et
seq.) is amended by inserting after section 129A the following new
section:</text>
<quoted-block display-inline="no-display-inline" id="H8845D1C864254FF58F887243B984E49" style="USC">
<section id="H247E896705FB44248981645C6FAD2809"><enum>129B.</enum><header>Residential
mortgage loan origination</header>
<subsection id="H6F529360E4F049B28137F3B4E847C71"><enum>(a)</enum><header>Finding and
purpose</header>
<paragraph id="HD0F75013305B4B77BDD117C7E5BD4D41"><enum>(1)</enum><header>Finding</header><text>The
Congress finds that economic stabilization would be enhanced by the protection,
limitation, and regulation of the terms of residential mortgage credit and the
practices related to such credit.</text>
</paragraph><paragraph id="H9A5914B2DDF4405BAEAB05443FA1A6F9"><enum>(2)</enum><header>Purpose</header><text>It
is the purpose of this section and section 129C to assure that consumers are
offered and receive residential mortgage loans on terms that reasonably reflect
their ability to repay the loans and that are understandable and not unfair,
deceptive or abusive.</text>
</paragraph></subsection><subsection id="HD3FB4045DBA04FB4AFC1725845F58640"><enum>(b)</enum><header>Duty of
care</header>
<paragraph id="HED8E4FB324064E03BEC33B66ECCFA366"><enum>(1)</enum><header>Standard</header><text display-inline="yes-display-inline">Subject to regulations prescribed under
this subsection, each mortgage originator shall, in addition to the duties
imposed by otherwise applicable provisions of State or Federal law—</text>
<subparagraph id="H840DD74D5F8A4E2FA402F2A45934A747"><enum>(A)</enum><text display-inline="yes-display-inline">be qualified and, when required, registered
and licensed as a mortgage originator in accordance with applicable State or
Federal law, including the Secure and Fair Enforcement for Mortgage Licensing
Act of 2008;</text>
</subparagraph><subparagraph id="HD08699F4033D43E19B52AB1B51E508F8"><enum>(B)</enum><text display-inline="yes-display-inline">with respect to each consumer seeking or
inquiring about a residential mortgage loan, diligently work to present the
consumer with a range of residential mortgage loan products for which the
consumer likely qualifies and which are appropriate to the consumer’s existing
circumstances, based on information known by, or obtained in good faith by, the
originator;</text>
</subparagraph><subparagraph id="H29A8BF3F745542CE8EBD07BB5FD6E3C"><enum>(C)</enum><text>make full,
complete, and timely disclosure to each such consumer of—</text>
<clause id="H55FD4706C6EB42359BFF8BB2288804FF"><enum>(i)</enum><text display-inline="yes-display-inline">the comparative costs and benefits of each
residential mortgage loan product offered, discussed, or referred to by the
originator;</text>
</clause><clause id="H24E0EB507A8549E6AD66EBB3BC6FB102"><enum>(ii)</enum><text>the nature of the
originator’s relationship to the consumer (including the cost of the services
to be provided by the originator and a statement that the mortgage originator
is or is not acting as an agent for the consumer, as the case may be);
and</text>
</clause><clause id="HD3238E90D9B04A91AEDEB4A25112381"><enum>(iii)</enum><text>any relevant
conflicts of interest;</text>
</clause></subparagraph><subparagraph id="HBAF5ECA4CA254EB2BF4960167891BA81"><enum>(D)</enum><text display-inline="yes-display-inline">certify to the creditor, with respect to
any transaction involving a residential mortgage loan, that the mortgage
originator has fulfilled all requirements applicable to the originator under
this section with respect to the transaction; and</text>
</subparagraph><subparagraph id="HC05775E192B94DF8BA7B244970FA585B"><enum>(E)</enum><text display-inline="yes-display-inline">include the unique identifier of the
originator provided by the Nationwide Mortgage Licensing System and Registry on
all loan documents.</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H67973B78C38F4A90869700353EE3312C"><enum>(2)</enum><header>Clarification of
extent of duty to present range of products and appropriate products</header>
<subparagraph id="HD81AC6C677FD41E69C5567036B76CA2F"><enum>(A)</enum><header>No duty to offer
products for which originator is not authorized to take an
application</header><text>Paragraph (1)(B) shall not be construed as
requiring—</text>
<clause id="H221161DEC94246B68B8223F640BDB892"><enum>(i)</enum><text>a
mortgage originator to present to any consumer any specific residential
mortgage loan product that is offered by a creditor which does not accept
consumer referrals from, or consumer applications submitted by or through, such
originator; or</text>
</clause><clause id="H8ADF2174F37C49649767F68E3DAEFC22"><enum>(ii)</enum><text>a
creditor to offer products that the creditor does not offer to the general
public.</text>
</clause></subparagraph><subparagraph id="H4B42650141644FA2B78BF4634817662E"><enum>(B)</enum><header>Appropriate loan
product</header><text display-inline="yes-display-inline">For purposes of
paragraph (1)(B), a residential mortgage loan shall be presumed to be
appropriate for a consumer if—</text>
<clause id="HCA2DD01FE14649CD8E95FABDA155D32"><enum>(i)</enum><text display-inline="yes-display-inline">the mortgage originator determines in good
faith, based on then existing information and without undergoing a full
underwriting process, that the consumer has a reasonable ability to repay and,
in the case of a refinancing of an existing residential mortgage loan, receives
a net tangible benefit, as determined in accordance with regulations prescribed
under subsections (a) and (b) of section 129B; and</text>
</clause><clause id="H7A7C0496FFC34BD1810000B3E4976E6F"><enum>(ii)</enum><text display-inline="yes-display-inline">the loan does not have predatory
characteristics or effects (such as equity stripping and excessive fees and
abusive terms) as determined in accordance with regulations prescribed under
paragraph (4).</text>
</clause></subparagraph></paragraph><paragraph id="HE9730708202A4FA095AABF2753BBC691"><enum>(3)</enum><header>Rules of
construction</header><text display-inline="yes-display-inline">No provision of
this subsection shall be construed as—</text>
<subparagraph id="HE1363CADE12D415FA9B19ED271870024"><enum>(A)</enum><text>creating an agency
or fiduciary relationship between a mortgage originator and a consumer if the
originator does not hold himself or herself out as such an agent or fiduciary;
or</text>
</subparagraph><subparagraph id="HD08A4A7C3FDE49B69FB4248C2F801EB9"><enum>(B)</enum><text>restricting a
mortgage originator from holding himself or herself out as an agent or
fiduciary of a consumer subject to any additional duty, requirement, or
limitation applicable to agents or fiduciaries under any Federal or State
law.</text>
</subparagraph></paragraph><paragraph id="H82F1E58A512D47B6825DBC1BB2E85612"><enum>(4)</enum><header>Regulations</header>
<subparagraph id="H3E57A10DEF6B48CCA71C1FA5CF007B3E"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Federal banking
agencies, in consultation with the Secretary, the Chairman of the State Liaison
Committee to the Financial Institutions Examination Council, and the
Commission, shall jointly prescribe regulations to—</text>
<clause id="H4805BBC537064CFBB5CD0FA050031C7"><enum>(i)</enum><text>further define the
duty established under paragraph (1);</text>
</clause><clause id="HBB16707D757A4899AD6B796F52BB4C95"><enum>(ii)</enum><text>implement the
requirements of this subsection;</text>
</clause><clause id="H4E02FE23748C40C6B29297F18E17E1A"><enum>(iii)</enum><text>establish the
time period within which any disclosure required under paragraph (1) shall be
made to the consumer; and</text>
</clause><clause id="HF34C8316B5B245B4BC7EFA008FAED858"><enum>(iv)</enum><text>establish such
other requirements for any mortgage originator as such regulatory agencies may
determine to be appropriate to meet the purposes of this subsection.</text>
</clause></subparagraph><subparagraph id="HFB16610994D64B3FACC4966439ACD15"><enum>(B)</enum><header>Complementary and
nonduplicative disclosures</header><text display-inline="yes-display-inline">The agencies referred to in subparagraph
(A) shall endeavor to make the required disclosures to consumers under this
subsection complementary and nonduplicative with other disclosures for mortgage
consumers to the extent such efforts—</text>
<clause id="H201BE6A777EC479294771F312CFA172D"><enum>(i)</enum><text>are practicable;
and</text>
</clause><clause id="HFA28E5AC9ED141DC884236D19BD6C936"><enum>(ii)</enum><text>do not reduce the
value of any such disclosure to recipients of such disclosures.</text>
</clause></subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H549841423AA6430BA113EEEE00B90700"><enum>(5)</enum><header>Compliance
procedures required</header><text display-inline="yes-display-inline">The
Federal banking agencies shall prescribe regulations requiring depository
institutions to establish and maintain procedures reasonably designed to assure
and monitor the compliance of such depository institutions, the subsidiaries of
such institutions, and the employees of such institutions or subsidiaries with
the requirements of this section and the registration procedures established
under section 1507 of the Secure and Fair Enforcement for Mortgage Licensing
Act of
2008.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H993697643B6949D6A5082F16890194AB"><enum>(b)</enum><header>Clerical
amendment</header><text>The table of sections for chapter 2 of the Truth in
Lending Act is amended by inserting after the item relating to section 129 the
following new items:</text>
<quoted-block display-inline="no-display-inline" id="H2340E101387B473BBBEE79363DA417AD" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">129A. Fiduciary duty of servicers of
pooled residential mortgages.</toc-entry>
<toc-entry level="section">129B. Residential mortgage loan
origination.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="H732FAF9B4D0748BD823ED8F1FF8CA59D"><enum>103.</enum><header>Prohibition on
steering incentives</header><text display-inline="no-display-inline">Section
129B of the Truth in Lending Act (as added by section 102(a)) is amended by
inserting after subsection (b) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H403E049471F04C6A8667D18B67E5FFF4" style="USC">
<subsection id="H4CD56AE890254C0680FF2FA6B2DF6DA3"><enum>(c)</enum><header>Prohibition on
steering incentives</header>
<paragraph commented="no" id="H5A3E579E9B934386B9E177B017E8F71F"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">For any mortgage
loan, the total amount of direct and indirect compensation from all sources
permitted to a mortgage originator may not vary based on the terms of the loan
(other than the amount of the principal).</text>
</paragraph><paragraph commented="no" id="H93D05B0818774A608106B927565FE723"><enum>(2)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Federal banking agencies, in
consultation with the Secretary and the Commission, shall jointly prescribe
regulations to prohibit—</text>
<subparagraph commented="no" id="H541DE574516C4449AA21BA0028E10119"><enum>(A)</enum><text>mortgage
originators from steering any consumer to a residential mortgage loan
that—</text>
<clause commented="no" id="HA7097F57C6C0461AAEFFEE4B5637101"><enum>(i)</enum><text display-inline="yes-display-inline">the consumer lacks a reasonable ability to
repay (in accordance with regulations prescribed under section 129B(a));</text>
</clause><clause commented="no" id="H4390C12E47D343368E052F3100ACC683"><enum>(ii)</enum><text display-inline="yes-display-inline">in the case of a refinancing of a
residential mortgage loan, does not provide the consumer with a net tangible
benefit (in accordance with regulations prescribed under section 129B(b));
or</text>
</clause><clause commented="no" id="HB9756BA532EE425BB900FFD31E89507B"><enum>(iii)</enum><text>has predatory
characteristics or effects (such as equity stripping, excessive fees, or
abusive terms);</text>
</clause></subparagraph><subparagraph commented="no" id="HC196FC87AD364CCEB68466506265034E"><enum>(B)</enum><text display-inline="yes-display-inline">mortgage originators from steering any
consumer from a residential mortgage loan for which the consumer is qualified
that is a qualified mortgage (as defined in section 129B(c)(3)) to a
residential mortgage loan that is not a qualified mortgage; and</text>
</subparagraph><subparagraph commented="no" id="H11AB73D210924A1FA6AC59D0DA505ED"><enum>(C)</enum><text display-inline="yes-display-inline">abusive or unfair lending practices that
promote disparities among consumers of equal credit worthiness but of different
race, ethnicity, gender, or age.</text>
</subparagraph></paragraph><paragraph commented="no" id="HAE470B8E228445A4A0FB006C2F14ACB6"><enum>(3)</enum><header>Rules of
construction</header><text>No provision of this subsection shall be construed
as—</text>
<subparagraph commented="no" id="H2279566D5EFF4DB7B200B02D16B908A8"><enum>(A)</enum><text display-inline="yes-display-inline">affecting the mechanism for providing the
total amount of direct and indirect compensation permitted to a mortgage
originator;</text>
</subparagraph><subparagraph id="HD9983A7758FD4D43AE81C772924500A1"><enum>(B)</enum><text>limiting or
affecting the ability of a mortgage originator to sell residential mortgage
loans to subsequent purchasers;</text>
</subparagraph><subparagraph commented="no" id="H9FA21D8E082D48709E397E079753D9AD"><enum>(C)</enum><text display-inline="yes-display-inline">restricting a consumer’s ability to
finance, including through rate or principal, any origination fees or costs
permitted under this subsection, or the originator’s ability to receive such
fees or costs (including compensation) from any person, so long as such fees or
costs were fully and clearly disclosed to the consumer earlier in the
application process as required by 129A(a)(1)(C)(ii) and do not vary based on
the terms of the loan or the consumer’s decision about whether to finance such
fees or costs; or</text>
</subparagraph><subparagraph commented="no" id="H58131AFC1A394F47B0F942C35E70D2CC"><enum>(D)</enum><text>prohibiting
incentive payments to a mortgage originator based on the number of residential
mortgage loans originated within a specified period of
time.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H3614B18500534D37A3F10421D7E13BB"><enum>104.</enum><header>Liability</header><text display-inline="no-display-inline">Section 129B of the Truth in Lending Act is
amended by inserting after subsection (c) (as added by section 103) the
following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H69CD0FCA1B26437B9B63D686EABCEB1E" style="OLC">
<subsection id="HF74B4490A0BE4051B4CEECC926212847"><enum>(d)</enum><header>Liability for
violations</header>
<paragraph id="H607822EDFBF24BC992992FB2091CFA8"><enum>(1)</enum><header>In
general</header><text>For purposes of providing a cause of action for any
failure by a mortgage originator to comply with any requirement imposed under
this section and any regulation prescribed under this section, subsections (a)
and (b) of section 130 shall be applied with respect to any such failure by
substituting <term>mortgage originator</term> for <term>creditor</term> each
place such term appears in each such subsection.</text>
</paragraph><paragraph id="H3DFBE502AE294DAA8D00DC46FC0027D0"><enum>(2)</enum><header>Maximum</header><text display-inline="yes-display-inline">The maximum amount of any liability of a
mortgage originator under paragraph (1) to a consumer for any violation of this
section shall not exceed <inline-comment display="yes">the greater of actual
damages or</inline-comment> an amount equal to 3 times the total amount of
direct and indirect compensation or gain accruing to the mortgage originator in
connection with the residential mortgage loan involved in the violation, plus
the costs to the consumer of the action, including a reasonable attorney’s
fee.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H19674094EFD9403FA6E962173D9F0A8"><enum>105.</enum><header>Regulations</header>
<subsection id="H8820EBF68ACE4C14B4A2D0ADAEAD40EE"><enum>(a)</enum><header>Discretionary
regulatory authority</header><text display-inline="yes-display-inline">Section
129B of the Truth in Lending Act is amended by inserting after subsection (c)
(as added by section 104) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HEBBC3DC5004944D793CE6BD83423056F" style="OLC">
<subsection id="HD28DC8251BB847749CF7601072AA1C9"><enum>(e)</enum><header>Discretionary
regulatory authority</header>
<paragraph id="HA132F63CA7DF489C96E494A22799F517"><enum>(1)</enum><header>In
general</header><text>The Federal banking agencies shall, by regulations issued
jointly, prohibit or condition terms, acts or practices relating to residential
mortgage loans that the agencies find to be abusive, unfair, deceptive,
predatory, inconsistent with reasonable underwriting standards, necessary or
proper to effectuate the purposes of this section and section 129C, to prevent
circumvention or evasion thereof, or to facilitate compliance with such
sections, or are not in the interest of the borrower.</text>
</paragraph><paragraph id="HE7E9D5A9728B42EBA200412EDDD1912"><enum>(2)</enum><header>Application</header><text>The
regulations prescribed under paragraph (1) shall be applicable to all
residential mortgage loans and shall be applied in the same manner as
regulations prescribed under section
105.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H532BD53D53B64BAB846FDCB60570C309"><enum>(b)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The regulations required
or authorized to be prescribed under this title or the amendments made by this
title—</text>
<paragraph id="H8579D4D9D53F4758ABDDFCF5EDD62818"><enum>(1)</enum><text>shall be
prescribed in final form before the end of the 12-month period beginning on the
date of the enactment of this Act; and</text>
</paragraph><paragraph id="HACEB9F7A4CE54D38977FF37CA5F295A5"><enum>(2)</enum><text>shall take effect
not later than 18 months after the date of the enactment of this Act.</text>
</paragraph></subsection><subsection display-inline="no-display-inline" id="HEB8DD7E943C045A0A761A832B4C2B93E"><enum>(c)</enum><header>Technical and
conforming amendments</header><text>Section 129(l)(2) of the Truth in Lending
Act (15 U.S.C. 1639(l)(2)) is amended by inserting <quote>referred to in
section 103(aa)</quote> after <quote>loans</quote> each place such term
appears.</text>
</subsection></section><enum>II</enum><header>Minimum Standards
For Mortgages</header>
<section id="HB43C7876345B4C029470DCF6B3AEA985"><enum>201.</enum><header>Ability to
repay</header>
<subsection id="HCE3EDF7EEEB94584941553973677A812"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Chapter 2 of the
Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting after
section 129B (as added by section 102(a)) the following new section:</text>
<quoted-block display-inline="no-display-inline" id="HF55D22A99331467BAB09B2E7FBD642CB" style="USC">
<section id="H62C102B0A8C74D6FAD00017499D48CF"><enum>129C.</enum><header>Minimum
standards for residential mortgage loans</header>
<subsection id="HF994423F52E04F1B9E52EDCDF26E1421"><enum>(a)</enum><header>Ability To
repay</header>
<paragraph id="H4C40509D6E6640D791AEB126C900B647"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">In accordance with
regulations prescribed jointly by the Federal banking agencies, in consultation
with the Commission, no creditor may make a residential mortgage loan unless
the creditor makes a reasonable and good faith determination based on verified
and documented information that, at the time the loan is consummated, the
consumer has a reasonable ability to repay the loan, according to its terms,
and all applicable taxes, insurance, and assessments.</text>
</paragraph><paragraph id="H717C15E8A28E4E789EC29FDB381F00C6"><enum>(2)</enum><header>Multiple
loans</header><text display-inline="yes-display-inline">If the creditor knows,
or has reason to know, that 1 or more residential mortgage loans secured by the
same dwelling will be made to the same consumer, the creditor shall make a
reasonable and good faith determination, based on verified and documented
information, that the consumer has a reasonable ability to repay the combined
payments of all loans on the same dwelling according to the terms of those
loans and all applicable taxes, insurance, and assessments.</text>
</paragraph><paragraph id="H69D9D26E80864D2A9787E3A6F386965E"><enum>(3)</enum><header>Basis for
determination</header><text>A determination under this subsection of a
consumer’s ability to repay a residential mortgage loan shall be based on
consideration of the consumer’s credit history, current income, expected income
the consumer is reasonably assured of receiving, current obligations,
debt-to-income ratio, employment status, and other financial resources other
than the consumer’s equity in the dwelling or real property that secures
repayment of the loan.</text>
</paragraph><paragraph id="H245238C0319D496DB838ABA69CEA1FFD"><enum>(4)</enum><header>Nonstandard
loans</header>
<subparagraph id="H292F51B187854BF0B36F419D571154B3"><enum>(A)</enum><header>Variable rate
loans that defer repayment of any principal or interest</header><text display-inline="yes-display-inline">For purposes of determining, under this
subsection, a consumer’s ability to repay a variable rate residential mortgage
loan that allows or requires the consumer to defer the repayment of any
principal or interest, the creditor shall use a fully amortizing repayment
schedule.</text>
</subparagraph><subparagraph id="H31B725267D0A43A3A74D0199360063A2"><enum>(B)</enum><header>Interest-only
loans</header><text display-inline="yes-display-inline">For purposes of
determining, under this subsection, a consumer’s ability to repay a residential
mortgage loan that permits or requires the payment of interest only, the
creditor use the payment amount required to amortize the loan by its final
maturity.</text>
</subparagraph><subparagraph id="HFF5402368E904968816DB040D75B5300"><enum>(C)</enum><header>Calculation for
negative amortization</header><text display-inline="yes-display-inline">In
making any determination under this subsection, a creditor shall also take into
consideration any balance increase that may accrue from any negative
amortization provision.</text>
</subparagraph><subparagraph id="H385E2DA3E32241E1AD651B72F7BA8258"><enum>(D)</enum><header>Calculation
process</header><text display-inline="yes-display-inline">For purposes of
making any determination under this subsection, a creditor shall calculate the
monthly payment amount for principal and interest on any residential mortgage
loan by assuming—</text>
<clause id="HACD55F49374E4A2A8B1F00027884AE1B"><enum>(i)</enum><text>the loan proceeds
are fully disbursed on the date of the consummation of the loan;</text>
</clause><clause display-inline="no-display-inline" id="HE848115F784F48169407E32B3F81935F"><enum>(ii)</enum><text>the loan is to be
repaid in substantially equal monthly amortizing payments for principal and
interest over the entire term of the loan with no balloon payment, unless the
loan contract requires more rapid repayment (including balloon payment), in
which case the contract’s repayment schedule shall be used in this calculation;
and</text>
</clause><clause id="H789C3764F3CA4FA0A95D122EB53FA500"><enum>(iii)</enum><text>the interest
rate over the entire term of the loan is a fixed rate equal to the fully
indexed rate at the time of the loan closing, without considering the
introductory rate.</text>
</clause></subparagraph></paragraph><paragraph commented="no" id="H9F205FF08EDB4B6BB1F5A93B4FE9FAE6"><enum>(5)</enum><header>Fully-indexed
rate defined</header><text display-inline="yes-display-inline">For purposes of
this subsection, the term <term>fully indexed rate</term> means the index rate
prevailing on a residential mortgage loan at the time the loan is made plus the
margin that will apply after the expiration of any introductory interest
rates.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H9418CD67AE8F4C8E9B001C1B001EAD1"><enum>(b)</enum><header>Clerical
amendment</header><text>The table of sections for chapter 2 of the Truth in
Lending Act is amended by inserting after the item relating to section 129B (as
added by section 102(b)) the following new item:</text>
<quoted-block display-inline="no-display-inline" id="HE232A85AE0354CE0B4EB827E35BF5BC4" style="USC">
<toc regeneration="no-regeneration">
<toc-entry level="section">129C. Minimum standards for residential
mortgage
loans.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="HB87B072783844941AC68FB8D27005842"><enum>202.</enum><header>Net tangible
benefit for refinancing of residential mortgage loans</header><text display-inline="no-display-inline">Section 129C of the Truth in Lending Act (as
added by section 201(a)) is amended by inserting after subsection (a) the
following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H5F2E0D1BB8B04BFBB950A25B00E67081" style="OLC">
<subsection id="H1A6868179079495C92C23619EBBFE517"><enum>(b)</enum><header>Net tangible
benefit for refinancing of residential mortgage loans</header>
<paragraph id="HADF1E19A3C2240EBAD6100207D03BC25"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">In accordance with
regulations prescribed under paragraph (3), no creditor may extend credit in
connection with any residential mortgage loan that involves a refinancing of a
prior existing residential mortgage loan unless the creditor reasonably and in
good faith determines, at the time the loan is consummated and on the basis of
information known by or obtained in good faith by the creditor, that the
refinanced loan will provide a net tangible benefit to the consumer.</text>
</paragraph><paragraph id="H22B6397EEEA64335B2C1C6B4803545AF"><enum>(2)</enum><header>Certain loans
providing no net tangible benefit</header><text display-inline="yes-display-inline">A residential mortgage loan that involves a
refinancing of a prior existing residential mortgage loan shall not be
considered to provide a net tangible benefit to the consumer if the costs of
the refinanced loan, including points, fees and other charges, exceed the
amount of any newly advanced principal without any corresponding changes in the
terms of the refinanced loan that are advantageous to the consumer.</text>
</paragraph><paragraph commented="no" id="HE0554440B72D4CBD874108B3263D2832"><enum>(3)</enum><header>Net tangible
benefit</header><text display-inline="yes-display-inline">The Federal banking
agencies shall jointly prescribe regulations defining the term <term>net
tangible benefit</term> for purposes of this
subsection.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H3BD1B8CBB548421588DD00A7084DC4A"><enum>203.</enum><header>Safe harbor and
rebuttable presumption</header><text display-inline="no-display-inline">Section
129C of the Truth in Lending Act is amended by inserting after subsection (b)
(as added by section 202) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H07021718D3584807823F05831DCCBE9" style="OLC">
<subsection id="H1ADF0FE6E61449F3B3906C8BA1E8D645"><enum>(c)</enum><header>Presumption of
ability To repay and net tangible benefit</header>
<paragraph id="H110A9FD62D8D4ACFBDA54D2EB2AC4BC0"><enum>(1)</enum><header>In
general</header><text>Any creditor with respect to any residential mortgage
loan, and any assignee or securitizer of such loan, may presume that the loan
has met the requirements of subsections (a) and (b), if the loan is a qualified
mortgage</text>
</paragraph><paragraph id="H71FA72B2ABCE4BBC867F132016C8E95E"><enum>(2)</enum><header>Definitions</header><text>For
purposes of this subsection, the following definitions shall apply:</text>
<subparagraph id="HA9ECDEBE79C04CB19C920916C200C523"><enum>(A)</enum><header>Qualified
mortgage</header><text display-inline="yes-display-inline">The term
<quote>qualified mortgage</quote> means any residential mortgage loan—</text>
<clause id="H5E24F21FCA274B5CB34B4458008D5EFE"><enum>(i)</enum><text display-inline="yes-display-inline">with an annual percentage rate that does
not exceed the average prime offer rate for a comparable transaction, as of the
date the interest rate is set—</text>
<subclause id="HD91D5FFDFCA540799EA7425769A6F163"><enum>(I)</enum><text>by 1.5 or more
percentage points for a first lien residential mortgage loan; and</text>
</subclause><subclause id="HC435F4FB234448FE99008D223216FDD9"><enum>(II)</enum><text>by 3.5 or more
percentage points for a subordinate lien residential mortgage loan;</text>
</subclause></clause><clause id="H9BC59D0BB7514ACFBC077E96D857692B"><enum>(ii)</enum><text>for which the
income and financial resources of the consumer are verified and
documented;</text>
</clause><clause id="H0052F8A97049460AAD0924ACF851B200"><enum>(iii)</enum><text>for which the
residential mortgage loan underwriting process is based on the fully-indexed
rate, and takes into account all applicable taxes, insurance, and
assessments;</text>
</clause><clause id="H093791D446EA4FA2B86DFC87A774D03"><enum>(iv)</enum><text>that does not
cause the consumer’s total monthly debts, including amounts under the loan, to
exceed a percentage established by regulation of the consumer’s monthly gross
income or such other maximum percentage of such income as may be prescribed by
regulation under paragraph (4); and</text>
</clause><clause id="H80B6F227305D4CAD957D64BCBE098478"><enum>(v)</enum><text display-inline="yes-display-inline">for which the term of the loan is fixed for
a period of not less than or more than 30 years.</text>
</clause></subparagraph><subparagraph id="H4A4D0182F09D40DAA7A4FECF35EA9EE"><enum>(B)</enum><header>Average prime
offer rate</header><text display-inline="yes-display-inline">The term
<quote>average prime offer rate</quote> means an annual percentage rate that is
derived from average interest rates, points, and other loan pricing terms
currently offered to consumers by a representative sample of creditors for
mortgage transactions that have low risk pricing characteristics.</text>
</subparagraph></paragraph><paragraph id="H77278F5D14B9410293407238DEC00010"><enum>(3)</enum><header>Publication of
average prime offer rate</header><text>The Board—</text>
<subparagraph id="H8ED734DEC09B4211BC37F7D76DCA2D0"><enum>(A)</enum><text display-inline="yes-display-inline">shall publish, and update at least weekly,
average prime offer rates; and</text>
</subparagraph><subparagraph id="H0DF9390315C141EBB0EC5DD1E12EE1FE"><enum>(B)</enum><text display-inline="yes-display-inline">may publish multiple rates based on varying
types of mortgage transactions.</text>
</subparagraph></paragraph><paragraph id="HBE67AC3137E044A79DDF6F4725B4F6A5"><enum>(4)</enum><header>Regulations</header>
<subparagraph id="HD28F14DC160A4D1B90D3020120666551"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Federal banking
agencies shall jointly prescribe regulations to carry out the purposes of this
subsection.</text>
</subparagraph><subparagraph id="H46EF1FFF65FE439287E919AA6A32D76"><enum>(B)</enum><header>Revision of safe
harbor criteria</header><text>The Federal banking agencies may jointly
prescribe regulations that revise, add to, or subtract from the criteria that
define a qualified mortgage to the extent necessary and appropriate to
effectuate the purposes of this subsection, to prevent circumvention or evasion
of this subsection, or to facilitate compliance with this
subsection.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section display-inline="no-display-inline" id="HB472FD4865064FD299509386C2F7F100"><enum>204.</enum><header>Liability</header><text display-inline="no-display-inline">Section 129C of the Truth in Lending Act is
amended by inserting after subsection (c) (as added by section 203) the
following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H0388F89ECF2B45D69175553B76FCE700" style="OLC">
<subsection commented="no" id="H3A15840891BC424BBAD504A7F9F5998"><enum>(d)</enum><header>Liability for
violations</header>
<paragraph id="H3EEADC15B901496FB069C338D49CBBB3"><enum>(1)</enum><header>In
general</header>
<subparagraph id="H23F55F889A1442C4A6C586D31886BFE7"><enum>(A)</enum><header>Rescission</header><text display-inline="yes-display-inline">In addition to any other liability under
this title for a violation by a creditor of subsection (a) or (b) (for example
under section 130) and subject to the statute of limitations in paragraph (7),
a civil action may be maintained against a creditor for a violation of
subsection (a) or (b) with respect to a residential mortgage loan for the
rescission of the loan, and such additional costs as the obligor may have
incurred as a result of the violation and in connection with obtaining a
rescission of the loan, including a reasonable attorney’s fee.</text>
</subparagraph><subparagraph id="HA9032891E12548BA809399C82FF105B0"><enum>(B)</enum><header>Cure</header><text display-inline="yes-display-inline">A creditor shall not be liable for
rescission under subparagraph (A) with respect to a residential mortgage loan
if, no later than 90 days after the receipt of notification from the consumer
that the loan violates subsection (a) or (b), the creditor provides a
cure.</text>
</subparagraph></paragraph><paragraph commented="no" id="HA3C708170FA5476D86FCB062B169E1FF"><enum>(2)</enum><header>Limited assignee
and securitizer liability</header><text display-inline="yes-display-inline">Notwithstanding sections 125(e) and 131 and
except as provided in paragraph (3), a civil action which may be maintained
against a creditor with respect to a residential mortgage loan for a violation
of subsection (a) or (b) may be maintained against any assignee or securitizer
of such residential mortgage loan, who has acted in good faith, for the
following liabilities only:</text>
<subparagraph commented="no" id="HB0C13A5FC9104A96891B7550CA4A5BB"><enum>(A)</enum><text display-inline="yes-display-inline">Rescission of the loan.</text>
</subparagraph><subparagraph commented="no" id="HCCF7432CC2314060AE0522428C9BAADE"><enum>(B)</enum><text display-inline="yes-display-inline">Such additional costs as the obligor may
have incurred as a result of the violation and in connection with obtaining a
rescission of the loan, including a reasonable attorney’s fee.</text>
</subparagraph></paragraph><paragraph commented="no" id="HBB31FD6014C64DE69BBC14D17DCEF573"><enum>(3)</enum><header>Assignee and
securitizer exemption</header><text display-inline="yes-display-inline">No
assignee or securitizer of a residential mortgage loan shall be liable under
paragraph (2) with respect to such loan if, no later than 90 days after the
receipt of notification from the consumer that the loan violates subsection (a)
or (b), the assignee or securitizer provides a cure so that the loan satisfies
the requirements of subsections (a) and (b).</text>
</paragraph><paragraph id="H1026FB594C804A859D3E28ABDFFB861"><enum>(4)</enum><header>Absent
parties</header>
<subparagraph id="H7328CD04CFF04C57A967CFA77C7BA04F"><enum>(A)</enum><header>Absent
creditor</header><text display-inline="yes-display-inline">Notwithstanding the
exemption provided in paragraph (3), if the creditor with respect to a
residential mortgage loan made in violation of subsection (a) or (b) has ceased
to exist as a matter of law or has filed for bankruptcy protection under title
11, United States Code, or has had a receiver or liquidating agent appointed, a
consumer may maintain a civil action against an assignee to cure the
residential mortgage loan, plus the costs and reasonable attorney’s fees
incurred in obtaining such remedy.</text>
</subparagraph><subparagraph id="H34A9EF3204E148039900A4B6F590C180"><enum>(B)</enum><header>Absent creditor
and assignee</header><text>Notwithstanding the exemption provided in paragraph
(3), if the creditor with respect to a residential mortgage loan made in
violation of subsection (a) or (b) and each assignee of such loan have ceased
to exist as a matter of law or have filed for bankruptcy protection under title
11, United States Code, or have had receivers or liquidating agents appointed,
the consumer may maintain the civil action referred to in subparagraph (A)
against the securitizer.</text>
</subparagraph></paragraph><paragraph id="HA904CFBE20C440CCB92654E73F00BA27"><enum>(5)</enum><header>Cure
defined</header><text display-inline="yes-display-inline">For purposes of this
subsection, the term <quote>cure</quote> means, with respect to a residential
mortgage loan that violates subsection (a) or (b), the modification or
refinancing, at no cost to the consumer, of the loan to provide terms that
would have satisfied the requirements of subsections (a) and (b) if the loan
had contained such terms as of the origination of the loan and the payment of
such additional costs as the obligor may have incurred as a result of the
violation and in connection with obtaining a cure of the loan, including a
reasonable attorney’s fee.</text>
</paragraph><paragraph id="HD79B2AA92EB64420812D963D8CFCD772"><enum>(6)</enum><header>Disagreement
over cure</header><text display-inline="yes-display-inline">If any creditor,
assignee, or securitizer and a consumer fail to reach agreement on a cure with
respect to a residential mortgage loan that violates subsection (a) or (b), or
the consumer fails to accept a cure proffered by a creditor, assignee, or
securitizer—</text>
<subparagraph id="HCD848D0049B242568DCC27CC3DDB5B00"><enum>(A)</enum><text>the creditor,
assignee, or securitizer may provide the cure; and</text>
</subparagraph><subparagraph id="H9582D1C6B489446698DBB896AE6B1D9E"><enum>(B)</enum><text>the consumer may
challenge the adequacy of the cure during the 6-month period beginning when the
cure is provided.</text>
</subparagraph><continuation-text continuation-text-level="paragraph">If the
consumer’s challenge, under this paragraph, of a cure is successful, the
creditor, assignee, or securitizer shall be liable to the consumer for
rescission of the loan and such additional costs under paragraph (2).</continuation-text></paragraph><paragraph id="H75ABF6B93FE04B13BD7DC6D4AE9DDC98"><enum>(7)</enum><header>Inability to
provide or obtain rescission</header><text display-inline="yes-display-inline">If a creditor, assignee, or securitizer
cannot provide, or a consumer cannot obtain, rescission under paragraph (1) or
(2), the liability of such creditor, assignee, or securitizer shall be met by
providing the financial equivalent of a rescission, together with such
additional costs as the obligor may have incurred as a result of the violation
and in connection with obtaining a rescission of the loan, including a
reasonable attorney’s fee.</text>
</paragraph><paragraph id="HA51F455A793541AF8D46B28DE02D85F6"><enum>(8)</enum><header>No class actions
against assignee or securitizer under paragraph
<enum-in-header>(2)</enum-in-header></header><text>Only individual actions may
be brought against an assignee or securitizer of a residential mortgage loan
for a violation of subsection (a) or (b).</text>
</paragraph><paragraph commented="no" id="HFA1057842C814EC388E962F902B42055"><enum>(9)</enum><header>Statute of
limitations</header><text display-inline="yes-display-inline">The liability of
a creditor, assignee, or securitizer under this subsection shall apply in any
original action against a creditor under paragraph (1) or an assignee or
securitizer under paragraph (2) which is brought before—</text>
<subparagraph id="HDB44DBC797874BC089FD17D64357ED3"><enum>(A)</enum><text>in the case of any
residential mortgage loan other than a loan to which subparagraph (B) applies,
the end of the 3-year period beginning on the date the loan is consummated;
or</text>
</subparagraph><subparagraph commented="no" id="H8BB9FD5507D74FB0A8E9D83C8B4DA4"><enum>(B)</enum><text display-inline="yes-display-inline">in the case of a residential mortgage loan
that provides for a fixed interest rate for an introductory period and then
resets or adjusts to a variable rate or that provides for a nonamortizing
payment schedule and then converts to an amortizing payment schedule, the
earlier of—</text>
<clause display-inline="no-display-inline" id="H66B2149A051E436FBF9F6DAC5125983C"><enum>(i)</enum><text>the end of the
1-year period beginning on the date of such reset, adjustment, or conversion;
or</text>
</clause><clause id="HEAC19B28F762488000C6CE024BB4FF6D"><enum>(ii)</enum><text display-inline="yes-display-inline">the end of the 6-year period beginning on
the date the loan is consummated.</text>
</clause></subparagraph></paragraph><paragraph commented="no" id="H1C2FC487D35D4E7D9732E0DEF25C4E7"><enum>(10)</enum><header>Pools and
investors in pools excluded</header><text display-inline="yes-display-inline">In the case of residential mortgage loans
acquired or aggregated for the purpose of including such loans in a pool of
assets held for the purpose of issuing or selling instruments representing
interests in such pools including through a securitization vehicle, the terms
<quote>assignee</quote> and <quote>securitizer</quote>, as used in this
section, do not include the securitization vehicle, the pools of such loans or
any original or subsequent purchaser of any interest in the securitization
vehicle or any instrument representing a direct or indirect interest in such
pool.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section display-inline="no-display-inline" id="H700617D98151483BBCAE6E7EE5AC41F2" section-type="subsequent-section"><enum>205.</enum><header>Defense to
foreclosure</header><text display-inline="no-display-inline">Section 129C of
the Truth in Lending Act is amended by inserting after subsection (d) (as added
by section 204) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H2448BD7FCC39471D911958502BEE3675" style="OLC">
<subsection id="H311FF94558D440C89E687978B8B921D"><enum>(e)</enum><header>Defense to
foreclosure</header><text display-inline="yes-display-inline">Notwithstanding
any other provision of law—</text>
<paragraph id="H561E9BB5D2AF4719BBC605000027CDC1"><enum>(1)</enum><text>when the holder of
a residential mortgage loan or anyone acting for such holder initiates a
judicial or nonjudicial foreclosure—</text>
<subparagraph id="H4456C156AE8F4912B4D15000E7E3DE57"><enum>(A)</enum><text display-inline="yes-display-inline">a consumer who has the right to rescind
under this section with respect to such loan against the creditor or any
assignee or securitizer may assert such right as a defense to foreclosure or
counterclaim to such foreclosure against the holder, or</text>
</subparagraph><subparagraph id="H412D923D0DBA4E30810307D5D854E9E6"><enum>(B)</enum><text display-inline="yes-display-inline">if the foreclosure proceeding begins after
the end of the period during which a consumer may bring an action for
rescission under subsection (c) and the consumer would have had a valid basis
for such an action if it had been brought before the end of such period, the
consumer may seek actual damages incurred by reason of the violation which gave
rise to the right of rescission, together with costs of the action, including a
reasonable attorney’s fee against the creditor or any assignee or securitizer;
and</text>
</subparagraph></paragraph><paragraph id="H7D1F62214C7346FFA13DBEAA7D887F43"><enum>(2)</enum><text display-inline="yes-display-inline">such holder or anyone acting for such
holder or any other applicable third party may sell, transfer, convey, or
assign a residential mortgage loan to a creditor, any assignee, or any
securitizer, or their designees, to effect a rescission or
cure.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HA3A71C4039044E2FA8E2AC00B0BB5C84"><enum>206.</enum><header>Additional
standards and requirements</header>
<subsection id="HE880EDBBF4BB493E8F615B64F1C435A1"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 129C of the
Truth in Lending Act is amended by inserting after subsection (e) (as added by
section 205) the following new subsections:</text>
<quoted-block display-inline="no-display-inline" id="H9AD9A1EE6FB742C1A362C4CD0F4F2EF" style="OLC">
<subsection id="H27C40B69B0E143349B67C6031D6EA2A3"><enum>(f)</enum><header>Prohibition on
certain prepayment penalties</header>
<paragraph id="HEF176B4F6FC54EC596B9D96FE6C6A32F"><enum>(1)</enum><header>Prohibited on
certain loans</header><text display-inline="yes-display-inline">A residential
mortgage loan that is not a <quote>qualified mortgage</quote> may not contain
terms under which a consumer must pay a prepayment penalty for paying all or
part of the principal after the loan is consummated.</text>
</paragraph><paragraph id="HBCA5FD17693E43F59200C6758D7D2384"><enum>(2)</enum><header>Phased-out
penalties on qualified mortgages</header><text>A qualified mortgage (as defined
in subsection (c)) may not contain terms under which a consumer must pay a
prepayment penalty for paying all or part of the principal after the loan is
consummated in excess of the following limitations:</text>
<subparagraph id="H3F131AA9809F4A0A8D320848A2498294"><enum>(A)</enum><text>During the 1-year
period beginning on the date the loan is consummated, the prepayment penalty
shall not exceed an amount equal to 3 percent of the outstanding balance on the
loan.</text>
</subparagraph><subparagraph id="H436B7F05BE024FF0BFD7DBB42D25290"><enum>(B)</enum><text display-inline="yes-display-inline">During the 1-year period beginning after
the period described in subparagraph (A), the prepayment penalty shall not
exceed an amount equal to 2 percent of the outstanding balance on the
loan.</text>
</subparagraph><subparagraph id="H3B0D0E5F9A4746A292C6005478B867E8"><enum>(C)</enum><text display-inline="yes-display-inline">During the 1-year period beginning after
the 1-year period described in subparagraph (B), the prepayment penalty shall
not exceed an amount equal to 1 percent of the outstanding balance on the
loan.</text>
</subparagraph><subparagraph id="H292B5AF891AB4D7BB01725E8F05F0008"><enum>(D)</enum><text display-inline="yes-display-inline">After the end of the 3-year period
beginning on the date the loan is consummated, no prepayment penalty may be
imposed on a qualified mortgage.</text>
</subparagraph></paragraph><paragraph commented="no" id="HEAE9D5A80BC74C2C96BF617B6B598561"><enum>(3)</enum><header>Prohibited after
initial period on loans with a reset</header><text display-inline="yes-display-inline">A qualified mortgage with a fixed interest
rate for an introductory period that adjusts or resets after such period may
not contain terms under which a consumer must pay a prepayment penalty for
paying all or part of the principal after the beginning of the 3-month period
ending on the date of the adjustment or reset.</text>
</paragraph><paragraph id="H65DFB9104F2245368B0292C2E05BC71D"><enum>(4)</enum><header>Option for no
prepayment penalty required</header><text>A creditor may not offer a consumer a
residential mortgage loan product that has a prepayment penalty for paying all
or part of the principal after the loan is consummated as a term of the loan
without offering the consumer a residential mortgage loan product that does not
have a prepayment penalty as a term of the loan.</text>
</paragraph></subsection><subsection id="H056DFFAEC1B045C0B00043ACF23422AA"><enum>(g)</enum><header>Single premium
credit insurance prohibited</header><text display-inline="yes-display-inline">No creditor may finance, directly or
indirectly, in connection with any residential mortgage loan or with any
extension of credit under an open end consumer credit plan secured by the
principal dwelling of the consumer (other than a reverse mortgage), 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—</text>
<paragraph id="H98D943E7CB1345A0B4DBE31FB0B5C9F6"><enum>(1)</enum><text>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; and</text>
</paragraph><paragraph id="HA570F53B6E474D188652CEC9CDE7B71"><enum>(2)</enum><text display-inline="yes-display-inline">this subsection shall not apply to credit
unemployment insurance for which the unemployment insurance premiums are
reasonable and at no additional cost to the consumer, the creditor receives no
direct or indirect compensation in connection with the unemployment insurance
premiums, and the unemployment insurance premiums are paid pursuant to another
insurance contract and not paid to an affiliate of the creditor.</text>
</paragraph></subsection><subsection display-inline="no-display-inline" id="H4509746C6EFC40528B47C5893D1EC257"><enum>(h)</enum><header>Arbitration</header>
<paragraph id="H3F60D335D8F74885A1B78D532063B35E"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">No residential
mortgage loan and no extension of credit under an open end consumer credit plan
secured by the principal dwelling of the consumer, other than a reverse
mortgage, may include terms which require arbitration or any other nonjudicial
procedure as the method for resolving any controversy or settling any claims
arising out of the transaction.</text>
</paragraph><paragraph id="H72DA2EB4353A497A865DCF561FDAB2C0"><enum>(2)</enum><header>Post-controversy
agreements</header><text>Subject to paragraph (3), paragraph (1) shall not be
construed as limiting the right of the consumer and the creditor, any assignee,
or any securitizer to agree to arbitration or any other nonjudicial procedure
as the method for resolving any controversy at any time after a dispute or
claim under the transaction arises.</text>
</paragraph><paragraph id="HA12E3A0468EC40B085DB0160E5EFADF4"><enum>(3)</enum><header>No waiver of
statutory cause of action</header><text display-inline="yes-display-inline">No
provision of any residential mortgage loan or of any extension of credit under
an open end consumer credit plan secured by the principal dwelling of the
consumer (other than a reverse mortgage), and no other agreement between the
consumer and the creditor relating to the residential mortgage loan or
extension of credit referred to in paragraph (1), shall be applied or
interpreted so as to bar a consumer from bringing an action in an appropriate
district court of the United States, or any other court of competent
jurisdiction, pursuant to section 130 or any other provision of law, for
damages or other relief in connection with any alleged violation of this
section, any other provision of this title, or any other Federal law.</text>
</paragraph></subsection><subsection id="H4EB337E118F4415A9924D0EE5FA2AFDA"><enum>(i)</enum><header>Duty of
securitizer To retain access to loans</header><text>Any securitizer shall
reserve the right and preserve an ability, in any document or contract
establishing any pool of assets that includes any residential mortgage
loan—</text>
<paragraph id="H5F7A96C5862047E2BBCB7D926F3EE889"><enum>(1)</enum><text>to identify and
obtain access to any such loan in the pool; and</text>
</paragraph><paragraph id="HEA7EFAD7B7A148958DA76ECB959B4125"><enum>(2)</enum><text>to provide for and
obtain a remedy under this title for the obligor under any such loan.</text>
</paragraph></subsection><subsection id="H37E588FABF1540D1B7BAF5C28B7824B"><enum>(j)</enum><header>Mortgages with
negative amortization</header><text>No creditor may extend credit to a borrower
in connection with a consumer credit transaction under an open or closed end
consumer credit plan secured by a dwelling or residential real property that
includes a dwelling, other than a reverse mortgage, that provides or permits a
payment plan that may, at any time over the term of the extension of credit,
result in negative amortization unless, before such transaction is
consummated—</text>
<paragraph id="H341AFE3D70AA4B27997315E6AACEB5CA"><enum>(1)</enum><text>the creditor
provides the consumer with a statement that—</text>
<subparagraph id="H99B6002B18804A0D8BC27BDB637F4832"><enum>(A)</enum><text>the pending
transaction will or may, as the case may be, result in negative
amortization;</text>
</subparagraph><subparagraph id="HD442D772161249D5A1C6595E3CA671DE"><enum>(B)</enum><text>describes negative
amortization in such manner as the Federal banking agencies shall
prescribe;</text>
</subparagraph><subparagraph id="HC50970A140584921B7BBA67C4DF2F1DC"><enum>(C)</enum><text display-inline="yes-display-inline">negative amortization increases the
outstanding principal balance of the account; and</text>
</subparagraph><subparagraph id="HB4359FDA96B84A9B98D163BF1383A1D"><enum>(D)</enum><text display-inline="yes-display-inline">negative amortization reduces the
consumer’s equity in the dwelling or real property; and</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H1D3778949E054B0A9D47B7DA4304DFE7"><enum>(2)</enum><text display-inline="yes-display-inline">in the case of a first-time borrower with
respect to a residential mortgage loan that is not a qualified mortgage, the
first-time borrower provides the creditor with sufficient documentation to
demonstrate that the consumer received homeownership counseling from
organizations or counselors certified by the Secretary of Housing and Urban
Development as competent to provide such counseling.</text>
</paragraph></subsection><subsection display-inline="no-display-inline" id="HED3855B2DF4E45B184EB00359BE83237"><enum>(k)</enum><header>Annual contact
information</header><text display-inline="yes-display-inline">At least once
annually and whenever there is a change in ownership of a residential mortgage
loan, the servicer with respect to a residential mortgage loan shall provide a
written notice to the consumer identifying the name of the creditor or any
assignee or securitizer who should be contacted by the consumer for any reason
concerning the consumer’s rights with respect to the loan.</text>
</subsection><subsection commented="no" id="H8712CD48B8B7499DA235BF764890AA1C"><enum>(l)</enum><header>Tenant
protection</header>
<paragraph id="H59CB358EA4F84414B3A2EC8D314CA9DB"><enum>(1)</enum><header>In
general</header><text>In the case of any foreclosure on any dwelling or
residential real property, after the date of the enactment of the Mortgage
Reform and Anti-Predatory Lending Act, any immediate successor in interest in
such property pursuant to the foreclosure shall assume such interest subject
to—</text>
<subparagraph commented="no" id="HA5CB253FAD40481E9701D0C5B7A5097D"><enum>(A)</enum><text display-inline="yes-display-inline">except as provided in paragraph (2), the
rights of any bona fide tenant, as of the date of foreclosure 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; and</text>
</subparagraph><subparagraph id="H2F465873E2A24F0DAC48D578BD7BE64E"><enum>(B)</enum><text display-inline="yes-display-inline">the rights of any bona fide tenant, as of
the date of foreclosure, without a lease or with a lease terminable at will
under State law, subject to the provision by the immediate successor in
interest and the receipt by the tenant in the unit, of a notice to vacate at
least 90 days before the effective date of such notice.</text>
</subparagraph></paragraph><paragraph commented="no" id="HE1F5A08558C945B2AC9DAA02B8ED1186"><enum>(2)</enum><header>Exception for
subsequent owner-occupant</header><text display-inline="yes-display-inline">Notwithstanding paragraph (1), if the
immediate successor in interest of any dwelling or residential real property
that is otherwise subject to paragraph (1) is a purchaser who will occupy a
unit of the dwelling or residential real property as a primary residence, or
such successor in interest sells the dwelling or residential real property to a
purchaser who will occupy a unit of the dwelling or residential real property,
as a primary residence—</text>
<subparagraph id="H822736EFF2D34F34A276730323A6A3FF"><enum>(A)</enum><text>such purchaser may
terminate a lease relating to such unit on the effective date of a notice to
vacate; and</text>
</subparagraph><subparagraph id="H23F18982A411457FBA9DE79C76751B73"><enum>(B)</enum><text display-inline="yes-display-inline">such notice to vacate shall be provided by
the purchaser to the tenant in such unit at least 90 days before the effective
date of such notice.</text>
</subparagraph></paragraph><paragraph display-inline="no-display-inline" id="H41F6153EDC28474EAAF3C96B1EAE6E9C"><enum>(3)</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="HADB504648C454595BEAE13A56200A902"><enum>(A)</enum><text display-inline="yes-display-inline">the mortgagor under the contract is not the
tenant;</text>
</subparagraph><subparagraph id="HE5C46C7E8C934B8EBB395EFB3BEFD0D8"><enum>(B)</enum><text>the lease or
tenancy was the result of an arms-length transaction; or</text>
</subparagraph><subparagraph id="H2278B8BA2A2C4A60B11429E4C9EE907F"><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><paragraph commented="no" id="H39EB3A19DA664B8A002BF04C6B9DE5B7"><enum>(4)</enum><header>Rule of
construction</header><text display-inline="yes-display-inline">No provision of
this subsection shall be construed as affecting the requirements—</text>
<subparagraph commented="no" id="H92D96CD124564EB39B9033A2E9AE08A5"><enum>(A)</enum><text>for termination of
any Federal- or State-subsidized tenancy; or</text>
</subparagraph><subparagraph commented="no" id="HE2AB2FA1FAF34198A6BAE2C8C33EB603"><enum>(B)</enum><text>of any State or
local law that provides longer time periods or other additional protections for
tenants.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" id="H9983397ADB474B41A2B42145FDB21B54"><enum>(b)</enum><header>Corresponding
provision relating to effect of foreclosures on section 8
tenancies</header><text>Paragraph (7) of section 8(o) of the United States
Housing Act of 1937 (42 U.S.C. 1437f(o)(7)) is amended—</text>
<paragraph commented="no" id="H181F841BE77D4DF8B8953BB875D4FD93"><enum>(1)</enum><text display-inline="yes-display-inline">in subparagraph (C), by inserting before
the semicolon at the end the following:</text>
<quoted-block display-inline="yes-display-inline" id="HE68857F0ED89403AB070DDB050E15360" style="OLC">
<text>, and
in the case of an owner who is an immediate successor in interest pursuant to
foreclosure—</text><clause commented="no" id="HB2D1E8C372DF435FB900739941C35136"><enum>(i)</enum><text display-inline="yes-display-inline">during the initial term of the tenant’s
lease having the property vacant prior to sale shall not constitute good cause;
and</text>
</clause><clause commented="no" id="H99B7BAB511C04415AB62F612D64E78C8"><enum>(ii)</enum><text>in subsequent
lease terms, having the property vacant prior to sale may constitute good cause
if the property is unmarketable while occupied, or if such owner will occupy
the unit as a primary
residence</text>
</clause><after-quoted-block>;</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="HC5CECFD483C94FB6AFA54F9CE59596B"><enum>(2)</enum><text>in subparagraph
(E), by striking <quote>and</quote> at the end;</text>
</paragraph><paragraph commented="no" id="H33F234D30D944207921D55C600FABDD"><enum>(3)</enum><text>by redesignating
subparagraph (F) as subparagraph (G); and</text>
</paragraph><paragraph commented="no" id="H0C3DEB484F4C4F7AB2E56DEF94D324BF"><enum>(4)</enum><text>by inserting after
subparagraph (E) the following:</text>
<quoted-block display-inline="no-display-inline" id="HC3AF353B02544BE1A7A5AD3D008B7F76" style="OLC">
<subparagraph commented="no" id="HE2A12E7951DC44B6A5DECB0079AFDB1E"><enum>(F)</enum><text display-inline="yes-display-inline">shall provide that in the case of any
foreclosure on any residential real property in which a recipient of assistance
under this subsection resides, the immediate successor in interest in such
property pursuant to the foreclosure shall assume such interest subject to the
lease between the prior owner and the tenant and to the housing assistance
payments contract between the prior owner and the public housing agency for the
occupied unit; if a public housing agency is unable to make payments under the
contract to the immediate successor in interest after foreclosure, due to
action or inaction by the successor in interest, including the rejection of
payments or the failure of the successor to maintain the unit in compliance
with paragraph (8) or an inability to identify the successor, the agency may
use funds that would have been used to pay the rental amount on behalf of the
family—</text>
<clause commented="no" id="HF9431EEB30FA412000E93B5C8B8200B9"><enum>(i)</enum><text>to pay for
utilities that are the responsibility of the owner under the lease or
applicable law, after taking reasonable steps to notify the owner that it
intends to make payments to a utility provider in lieu of payments to the
owner, except prior notification shall not be required in any case in which the
unit will be or has been rendered uninhabitable due to the termination or
threat of termination of service, in which case the public housing agency shall
notify the owner within a reasonable time after making such payment; or</text>
</clause><clause commented="no" id="H7FF1818B97D84A57BF48C800663D4000"><enum>(ii)</enum><text>for the family’s
reasonable moving costs, including security deposit costs;</text>
</clause><continuation-text commented="no" continuation-text-level="subparagraph">except that this subparagraph and
the provisions related to foreclosure in subparagraph (C) shall not affect any
State or local law that provides longer time periods or other additional
protections for
tenants.</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H01D6BAD3AF074E72B6D904FDC02C643F"><enum>(c)</enum><header>Conforming
amendment relating to enforcement</header><text>Section 108(a) of the Truth in
Lending Act (15 U.S.C. 1607(a)) is amended by inserting after paragraph (6) the
following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H123682DEE65F4FCB8C71D415DF918F83" style="OLC">
<paragraph id="H7E91C3A1EE8E445C991BEB71186198F3"><enum>(7)</enum><text display-inline="yes-display-inline">sections 21B and 21C of the Securities
Exchange Act of 1934, in the case of a broker or dealer, other than a
depository institution, by the Securities and Exchange
Commission.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section display-inline="no-display-inline" id="HB2EF098277EE4B169B9F09EEE7689631" section-type="subsequent-section"><enum>207.</enum><header>Rule of
construction</header><text display-inline="no-display-inline">Except as
otherwise expressly provided in section 129B or 129C of the Truth in Lending
Act (as added by this Act), no provision of such section 129B or 129C shall be
construed as superseding, repealing, or affecting any duty, right, obligation,
privilege, or remedy of any person under any other provision of the Truth in
Lending Act or any other provision of Federal or State law.</text>
</section><section commented="no" id="H853E01352BE242FDABCD49BD65487DD9"><enum>208.</enum><header>Effect on State
laws</header>
<subsection commented="no" id="H35B9BC02D45745B79588A6CFC48110E8"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 129C(d) of
the Truth in Lending Act (as added by section 204) shall supersede any State
law or application thereof that provides additional remedies against any
assignee, securitizer, or securitization vehicle, and the remedies described in
such section shall constitute the sole remedies against any assignee,
securitizer, or securitization vehicle, for a violation of subsection (a) or
(b) of section 129C of such Act or any other State law the terms of which
address the specific subject matter of subsection (a) (determination of ability
to repay) or (b) (requirement of a net tangible benefit) of such section
129C.</text>
</subsection><subsection id="H6B40540AA101418BBE51B5F5EE968CE"><enum>(b)</enum><header>Rules of
construction</header><text display-inline="yes-display-inline">No provision of
this section shall be construed as limiting—</text>
<paragraph id="H3A49C8E70838426F8DA05584F8BC6B06"><enum>(1)</enum><text display-inline="yes-display-inline">the application of any State law against a
creditor for a particular residential mortgage loan regardless of whether such
creditor also acts as assignee, securitizer, or securitization vehicle for such
mortgage; or</text>
</paragraph><paragraph id="H932B7CBF9E5B4D1A83D506F2AFF3798"><enum>(2)</enum><text display-inline="yes-display-inline">availability of remedies based upon fraud,
misrepresentation, deceptive acts or practices, false advertising, or civil
rights laws—</text>
<subparagraph id="HCBCA80DF364D43FD90EAC524985D64E3"><enum>(A)</enum><text display-inline="yes-display-inline">against any assignee, securitizer, or
securitization vehicle for its own conduct relating to the making of a
residential mortgage loan to a consumer; or</text>
</subparagraph><subparagraph id="HE5EB1FB46A12404D897C98E87F4506E9"><enum>(B)</enum><text>against any
assignee, securitizer, or securitization vehicle in the sale or purchase of
residential mortgage loans or securities.</text>
</subparagraph></paragraph></subsection><subsection commented="no" id="H9B936B721C7549EEA1A7AD42EE77C45F"><enum>(c)</enum><header>Definition</header><text display-inline="yes-display-inline">For purposes of subsection (b)(2), acts or
practices are deceptive if—</text>
<paragraph commented="no" id="HE58482752A00472BA0A2F8E7CB6C663"><enum>(1)</enum><text>there is a
representation, omission, or practice that misleads or is likely to mislead a
consumer;</text>
</paragraph><paragraph commented="no" id="HEBCF54B2E9154DA084435DFE64ED8D62"><enum>(2)</enum><text>from the
consumer’s perspective, the interpretation of the representation, omission, or
practice is reasonable under the circumstances; and</text>
</paragraph><paragraph commented="no" id="H01CD3BCB8EAE4FE0A62D8B4F88DD118C"><enum>(3)</enum><text>the
representation, omission or practice is material so that it is likely to affect
the consumer’s conduct or decision with regard to a product or service.</text>
</paragraph></subsection></section><section display-inline="no-display-inline" id="HF232C23F2A87421A86B07700E02BFE51" section-type="subsequent-section"><enum>209.</enum><header>Regulations</header><text display-inline="no-display-inline">Regulations required or authorized to be
prescribed under this title or the amendments made by this title—</text>
<paragraph id="H3CADC926055C474B96B06D6EBF5204D"><enum>(1)</enum><text>shall be prescribed
in final form before the end of the 12-month period beginning on the date of
the enactment of this Act; and</text>
</paragraph><paragraph id="HC847E7D8C32F4711AA24D64DEA008825"><enum>(2)</enum><text display-inline="yes-display-inline">shall take effect not later than 18 months
after the date of the enactment of this Act.</text>
</paragraph></section><section commented="no" id="HD303D3959A124FCCADDCA7F633EBF42F"><enum>210.</enum><header>Amendments to
civil liability provisions</header>
<subsection commented="no" id="HBCC8630AD3084804A9CAAF6702197CEB"><enum>(a)</enum><header>Increase in
amount of civil money penalties for certain violations</header><text>Section
130(a)(2) of the Truth in Lending Act (15 U.S.C. 1640(a)(2)) is amended—</text>
<paragraph id="HC060C1CF626E41E4BBB4F9F57BF79626"><enum>(1)</enum><text>by striking
<quote>$100</quote> and inserting <quote>$200</quote>;</text>
</paragraph><paragraph id="HBC8BD5A5F87842929D83F1BA603701C9"><enum>(2)</enum><text>by striking
<quote>$1,000</quote> and inserting <quote>$2,000</quote>;</text>
</paragraph><paragraph id="H9758DFFF35D941A3BE4FD37056AD59D3"><enum>(3)</enum><text>by striking
<quote>$200</quote> and inserting <quote>$400</quote>;</text>
</paragraph><paragraph id="H7A94F02065A948089FF8101097F35891"><enum>(4)</enum><text>by striking
<quote>$2,000</quote> and inserting <quote>$4,000</quote>; and</text>
</paragraph><paragraph id="H95115C5C596447849242C78381E870B5"><enum>(5)</enum><text>by striking
<quote>$500,000</quote> and inserting <quote>$1,000,000</quote>.</text>
</paragraph></subsection><subsection commented="no" id="H53E115290C6148BEA5C5647BE0E01CD0"><enum>(b)</enum><header>Statute of
limitations extended for section 129 violations</header><text>Section 130(e) of
the Truth in Lending Act (15 U.S.C. 1640(e)) is amended—</text>
<paragraph commented="no" id="HA599E1E3F2414AC8A63C5E61008FD006"><enum>(1)</enum><text>in the first
sentence, by striking <quote>Any action</quote> and inserting <quote>Except as
provided in the subsequent sentence, any action</quote>; and</text>
</paragraph><paragraph commented="no" id="HAF9B7BE740BD46BA856630D8EA57B6B8"><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 may be brought in any
United States district court, or in any other court of competent jurisdiction,
before the end of the 3-year period beginning on the date of the occurrence of
the violation.</quote>.</text>
</paragraph></subsection></section><section id="H44D33801ADEC431F988E907568C7B850"><enum>211.</enum><header>Lender rights
in the context of borrower deception</header><text display-inline="no-display-inline">Section 130 of the Truth in Lending Act is
amended by adding at the end the following new subsection:</text>
<quoted-block id="HB8F657DF27154E709E9333A0FD28BCB" style="OLC">
<subsection id="H0C358AA23EC84E8FB7660205C5625517"><enum>(j)</enum><header>Exemption from
liability and rescission in case of borrower fraud or deception</header><text display-inline="yes-display-inline">In addition to any other remedy available
by law or contract, no creditor, assignee, or securitizer shall be liable to an
obligor under this section, nor shall it be subject to the right of rescission
of any obligor under 129B, if such obligor, or co-obligor, knowingly, or
willfully and with actual knowledge furnished material information known to be
false for the purpose of obtaining such residential mortgage
loan.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HAA02835C81794028A75892E217B25DAA"><enum>212.</enum><header>Six-month
notice required before reset of hybrid adjustable rate mortgages</header>
<subsection id="HBBE3D9D66558465EA73EF574DB9BB8A3"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Chapter 2 of the
Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting after
section 128 the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H4A5BCDDC76E34D9CBCFDD2D77C28BDF5" style="USC">
<section id="H0B67336EF1BA4812BD1DB452167200DF"><enum>128A.</enum><header>Reset of
hybrid adjustable rate mortgages</header>
<subsection id="H7AADD175EE4F4BE28EA7CB94F167AEDE"><enum>(a)</enum><header>Hybrid
adjustable rate mortgages defined</header><text display-inline="yes-display-inline">For purposes of this section, the term
<quote>hybrid adjustable rate mortgage</quote> means a consumer credit
transaction secured by the consumer's principal residence with a fixed interest
rate for an introductory period that adjusts or resets to a variable interest
rate after such period.</text>
</subsection><subsection id="H6558F84286824369A4835F2E1079B127"><enum>(b)</enum><header>Notice of Reset
and alternatives</header><text display-inline="yes-display-inline">During the
1-month period that ends 6 months before the date on which the interest rate in
effect during the introductory period of a hybrid adjustable rate mortgage
adjusts or resets to a variable interest rate, the creditor or servicer of such
loan shall provide a written notice, separate and distinct from all other
correspondence to the consumer, that includes the following:</text>
<paragraph id="H893060B7678C4E8695C170DB4C3E5C6E"><enum>(1)</enum><text display-inline="yes-display-inline">Any index or formula used in making
adjustments to or resetting the interest rate and a source of information about
the index or formula.</text>
</paragraph><paragraph id="H71FBD62F5CBD4955A8AD8700F8BECFA9"><enum>(2)</enum><text display-inline="yes-display-inline">An explanation of how the new interest rate
and payment would be determined, including an explanation of how the index was
adjusted, such as by the addition of a margin.</text>
</paragraph><paragraph id="HD942127EA00846D9BB32775288975515"><enum>(3)</enum><text display-inline="yes-display-inline">A good faith estimate, based on accepted
industry standards, of the creditor or servicer of the amount of the monthly
payment that will apply after the date of the adjustment or reset, and the
assumptions on which this estimate is based.</text>
</paragraph><paragraph id="H70A926D30F83409B9DECF00097AA1B9B"><enum>(4)</enum><text display-inline="yes-display-inline">A list of alternatives consumers may pursue
before the date of adjustment or reset, and descriptions of the actions
consumers must take to pursue these alternatives, including—</text>
<subparagraph id="HAEB2F032FF2740DB95F87F84A920E648"><enum>(A)</enum><text>refinancing;</text>
</subparagraph><subparagraph id="HA547EE5714334BBFA3DB1D528F6179BE"><enum>(B)</enum><text>renegotiation of
loan terms;</text>
</subparagraph><subparagraph id="HD984436B8790417493AAFF54FBA00D9"><enum>(C)</enum><text>payment
forbearances; and</text>
</subparagraph><subparagraph id="HD533B15C396444BABA59482E9EBB1777"><enum>(D)</enum><text>pre-foreclosure
sales.</text>
</subparagraph></paragraph><paragraph id="H6D7C2F27A589499D9CD52710C248FE80"><enum>(5)</enum><text display-inline="yes-display-inline">The names, addresses, telephone numbers,
and Internet addresses of counseling agencies or programs reasonably available
to the consumer that have been certified or approved and made publicly
available by the Secretary of Housing and Urban Development or a State housing
finance authority (as defined in section 1301 of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989).</text>
</paragraph><paragraph id="H76274C72F87D465EBD499FD278C83559"><enum>(6)</enum><text display-inline="yes-display-inline">The address, telephone number, and Internet
address for the State housing finance authority (as so defined) for the State
in which the consumer
resides.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HB7FE6987DC694F63B1FC00027331C138"><enum>(b)</enum><header>Clerical
amendment</header><text>The table of sections for chapter 2 of the Truth in
Lending Act is amended by inserting after the item relating to section 128 the
following new item:</text>
<quoted-block display-inline="no-display-inline" id="H021A3274E6E947D2B160A951E8DCEF2" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">128A. Reset of hybrid adjustable rate
mortgages.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="HEEB2DAECE1314C77AFAF3343DA2EA859"><enum>213.</enum><header>Credit risk
retention</header><text display-inline="no-display-inline">Section 129C of the
Truth in Lending Act is amended by inserting after subsection (l) (as added by
section 206) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H776FD579C92B47C7898BA3AEF55E006E" style="OLC">
<subsection id="HDDF3B7246C004DB18BBFF0B6F4C1F9CA"><enum>(m)</enum><header>Credit risk
retention</header>
<paragraph id="HB0EDE0C96B054FE59D2CDB371299BF49"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The Federal banking
agencies shall prescribe regulations jointly to require any creditor that makes
a residential mortgage loan that is not a qualified mortgage (as defined in
section 129B(c)), to retain an economic interest in a material portion of the
credit risk for any such loan that the creditor transfers, sells or conveys to
a third party.</text>
</paragraph><paragraph id="H42AC1E26086844D0848E00A1F9FFD64"><enum>(2)</enum><header>Standards for
regulations</header><text>Regulations prescribed under paragraph (1)
shall—</text>
<subparagraph id="HF59566F454A44B7BAC1B08CBC4731FA8"><enum>(A)</enum><text display-inline="yes-display-inline">apply only to residential mortgage loans
that are not qualified mortgages (as so defined);</text>
</subparagraph><subparagraph id="H5B61848EC7F84E5690C51418869B2BDD"><enum>(B)</enum><text display-inline="yes-display-inline">prohibit creditors from directly or
indirectly hedging or otherwise transferring the credit risk creditors are
required to retain under the regulations with respect to any residential
mortgage loan; and</text>
</subparagraph><subparagraph id="HD563E5AE0E104DA2BD5F42A58100CE7E"><enum>(C)</enum><text display-inline="yes-display-inline">require creditors to retain at least 5
percent of the credit risk on any non-qualified mortgage that is transferred,
sold or
conveyed.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section commented="no" id="H01DB03803E264FA7B9E8AA722B996C33" section-type="subsequent-section"><enum>214.</enum><header>Required
disclosures</header>
<subsection commented="no" id="H6516104BEFF64349B7D265BBB9A9A25F"><enum>(a)</enum><header>Additional
information</header><text>Section 128(a) of Truth in Lending Act (15 U.S.C.
1638(a)) is amended by adding at the end the following new paragraphs:</text>
<quoted-block display-inline="no-display-inline" id="H1B9C581B4F514E399FDBBB17DCE71ED" style="OLC">
<paragraph commented="no" id="H159864F2EAC14BDB8B9BA83F22469012"><enum>(16)</enum><text display-inline="yes-display-inline">In the case of a variable rate residential
mortgage loan for which an escrow or impound account will be established for
the payment of all applicable taxes, insurance, and assessments—</text>
<subparagraph commented="no" id="H486963ADE3564050B685DD67CAB05E07"><enum>(A)</enum><text display-inline="yes-display-inline">the amount of initial monthly payment due
under the loan for the payment of principal and interest, and the amount of
such initial monthly payment including the monthly payment deposited in the
account for the payment of all applicable taxes, insurance, and assessments;
and</text>
</subparagraph><subparagraph commented="no" id="HDF9A42B96FA444658E952BB26127CB1C"><enum>(B)</enum><text display-inline="yes-display-inline">the amount of the fully indexed monthly
payment due under the loan for the payment of principal and interest, and the
amount of such fully indexed monthly payment including the monthly payment
deposited in the account for the payment of all applicable taxes, insurance,
and assessments.</text>
</subparagraph></paragraph><paragraph commented="no" id="H916AA175E6CC4FAD8834EF913CFE00EF"><enum>(17)</enum><text display-inline="yes-display-inline">In the case of a residential mortgage loan,
the aggregate amount of settlement charges for all settlement services provided
in connection with the loan, the amount of charges that are included in the
loan and the amount of such charges the borrower must pay at closing, the
approximate amount of the wholesale rate of funds in connection with the loan,
and the aggregate amount of other fees or required payments in connection with
the loan.</text>
</paragraph><paragraph commented="no" id="H3ED66E23BEF84E46887B80BBEEB64B48"><enum>(18)</enum><text display-inline="yes-display-inline">In the case of a residential mortgage loan,
the aggregate amount of fees paid to the mortgage originator in connection with
the loan, the amount of such fees paid directly by the consumer, and any
additional amount received by the originator from the creditor based on the
interest rate of the
loan.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" id="H8FD9B0C51A94490C8BF100E844BF006C"><enum>(b)</enum><header>Timing</header><text>Section
128(b) of the Truth in Lending Act (15 U.S.C. 1638(b)) is amended by adding at
the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H10FE8CC4CA5949A189B4BCF42C08BEA" style="OLC">
<paragraph commented="no" id="HF9C8E23B1A3742C2A8594BC8A66F69A5"><enum>(4)</enum><header>Residential
mortgage loan disclosures</header><text display-inline="yes-display-inline">In
the case of a residential mortgage loan, the information required to be
disclosed under subsection (a) with respect to such loan shall be disclosed
before the earlier of—</text>
<subparagraph commented="no" id="HDD052A400FB74A15ABC3C23D94F2FEC2"><enum>(A)</enum><text>the time required
under the first sentence of paragraph (1); or</text>
</subparagraph><subparagraph commented="no" id="HC9351F53BF264EBD9BF9CE41BC4BC07"><enum>(B)</enum><text>the end of the
3-day period beginning on the date the application for the loan from a consumer
is received by the
creditor.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="H4C4956608DB642CE9D82695297179BDE"><enum>215.</enum><header>Disclosures
required in monthly statements for residential mortgage loans</header><text display-inline="no-display-inline">Section 128 of the Truth in Lending Act (15
U.S.C. 1638) is amended by adding at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="H5A97FEDD75FE4F42AA358E7EE1C5424E" style="OLC">
<subsection id="H65B8FA086C1C4FB3817FF645ECCA0000"><enum>(f)</enum><header>Periodic
statements for residential mortgage loans</header>
<paragraph id="H1219297937534858A0FE91A95C1278"><enum>(1)</enum><header>In
general</header><text>The creditor, assignee, or servicer with respect to any
residential mortgage loan shall transmit to the obligor, for each billing
cycle, a statement setting forth each of the following items, to the extent
applicable, in a conspicuous and prominent manner:</text>
<subparagraph id="H5249128598C142CD9487AE4F3EDF23"><enum>(A)</enum><text display-inline="yes-display-inline">The amount of the principal obligation
under the mortgage.</text>
</subparagraph><subparagraph id="H7BC3DD96DBBE47EE98B495965484CE23"><enum>(B)</enum><text>The current
interest rate in effect for the loan.</text>
</subparagraph><subparagraph id="H3484E38685BC41C58099DF827EA9B8B4"><enum>(C)</enum><text>The date on which
the interest rate may next reset or adjust.</text>
</subparagraph><subparagraph id="HEE1B66D924774BAFB722C759488311B6"><enum>(D)</enum><text>The amount of any
prepayment fee to be charged, if any.</text>
</subparagraph><subparagraph id="H8362062DA7F64382A25ED1E519D051EC"><enum>(E)</enum><text>A description of
any late payment fees.</text>
</subparagraph><subparagraph id="H8FF63F3996964B74A9CDA34C94CC18A4"><enum>(F)</enum><text>A telephone number
and electronic mail address that may be used by the obligor to obtain
information regarding the mortgage.</text>
</subparagraph><subparagraph id="H8697CC8778254FADB739D8D434DCCE04"><enum>(G)</enum><text>Such other
information as the Board may prescribe in regulations.</text>
</subparagraph></paragraph><paragraph id="H6C13A7EA38F84667B97995597DABD477"><enum>(2)</enum><header>Development and
use of standard form</header><text display-inline="yes-display-inline">The
Federal banking agencies shall jointly develop and prescribe a standard form
for the disclosure required under this subsection, taking into account that the
statements required may be transmitted in writing or
electronically.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H9F9D922685674D20BC001285E0F4818D"><enum>216.</enum><header>Legal
assistance for foreclosure-related issues</header>
<subsection id="HF0A25906BE114C898E1BC2D8B4E9F41F"><enum>(a)</enum><header>Establishment</header><text display-inline="yes-display-inline">The Secretary of Housing and Urban
Development (hereafter in this section referred to as the
<quote>Secretary</quote> shall establish a program for making grants for
providing a full range of foreclosure legal assistance to low- and
moderate-income homeowners and tenants related to home ownership preservation,
home foreclosure prevention, and tenancy associated with home
foreclosure.</text>
</subsection><subsection id="H0460CA194D404405A2B06B9E89D8FC2"><enum>(b)</enum><header>Competitive
allocation</header><text display-inline="yes-display-inline">The Secretary
shall allocate amounts made available for grants under this section to State
and local legal organizations on the basis of a competitive process.</text>
</subsection><subsection id="HC369E8938ED546A6BED3D47BA801AC00"><enum>(c)</enum><header>Priority to
certain areas</header><text>In allocating amounts in accordance with subsection
(b), the Secretary shall give priority consideration to State and local legal
organizations that are operating in the 100 metropolitan statistical areas (as
that term is defined by the Director of the Office of Management and Budget)
with the highest home foreclosure rates.</text>
</subsection><subsection id="H5BFB709BA6C644608FD40000DF13655F"><enum>(d)</enum><header>Legal
assistance</header>
<paragraph id="H8EF05D94FA344F1EB9A82DAC6FCCD800"><enum>(1)</enum><header>In
general</header><text>Any State or local legal organization that receives
financial assistance pursuant to this section may use such amounts only to
assist—</text>
<subparagraph id="HC5E75FD6F7654F660047AEFF775CB739"><enum>(A)</enum><text>homeowners of
owner-occupied homes with mortgages in default, in danger of default, or
subject to or at risk of foreclosure; and</text>
</subparagraph><subparagraph id="HEC9D3F01D2624A3A9771BACAF51140AA"><enum>(B)</enum><text>tenants at risk of
or subject to eviction as a result of foreclosure of the property in which such
tenant resides.</text>
</subparagraph></paragraph><paragraph id="HE300FDDF39DD410D834691A474F1F413"><enum>(2)</enum><header>Commence use
within 90 days</header><text display-inline="yes-display-inline">Any State or
local legal organization that receives financial assistance pursuant to this
section shall begin using any financial assistance received under this section
within 90 days after receipt of the assistance.</text>
</paragraph><paragraph id="HD23AB74B2F70487480FC4C5302185605"><enum>(3)</enum><header>Prohibition on
class actions</header><text>No funds provided to a State or local legal
organization under this section may be used to support any class action
litigation.</text>
</paragraph><paragraph id="HC744CBA17D294579B51EC984A0A4145C"><enum>(4)</enum><header>Limitation on
legal assistance</header><text>Legal assistance funded with amounts provided
under this section shall be limited to mortgage-related default, eviction, or
foreclosure proceedings, without regard to whether such foreclosure is judicial
or nonjudicial.</text>
</paragraph></subsection><subsection id="H60B212F6F5CF4E7399A27F607940BB97"><enum>(e)</enum><header>Authorization of
appropriations</header><text display-inline="yes-display-inline">There are
authorized to be appropriated to the Secretary $35,000,000 for each of fiscal
years 2009 through 2012 for grants under this section.</text>
</subsection></section><section id="H15779746F84B4DBAB3DEE03E3B27462"><enum>217.</enum><header>Effective
date</header><text display-inline="no-display-inline">The amendments made by
this title shall apply to transactions consummated on or after the effective
date of the regulations specified in section 209.</text>
</section><section id="H83B79A88A44E46C198B300746F60D668"><enum>218.</enum><header>Report by the
GAO</header>
<subsection id="HAB84C2B34B1644EA9182F6AD9B5B0000"><enum>(a)</enum><header>Report
required</header><text display-inline="yes-display-inline">The Comptroller
General shall conduct a study to determine the effects the enactment of this
Act will have on the availability and affordability of credit for homebuyers
and mortgage lending, including the effect—</text>
<paragraph id="H1E225DCD7CB647CB9FE12BBA3917DCD2"><enum>(1)</enum><text display-inline="yes-display-inline">on the mortgage market for mortgages that
are not within the safe harbor provided in the amendments made by this
title;</text>
</paragraph><paragraph id="HD18B45B3040C473188B7D88408BAF14B"><enum>(2)</enum><text>on the ability of
prospective homebuyers to obtain financing;</text>
</paragraph><paragraph id="HF545535E3ADB422295D1676E18FF8D71"><enum>(3)</enum><text>on the ability of
homeowners facing resets or adjustments to refinance—for example, do they have
fewer refinancing options due to the unavailability of certain loan products
that were available before the enactment of this Act;</text>
</paragraph><paragraph id="H324F37070DE14D098F2288152576C252"><enum>(4)</enum><text>on minorities’
ability to access affordable credit compared with other prospective
borrowers;</text>
</paragraph><paragraph id="HDD9E2C3AF6F448A6888BBD16C4B5FB6"><enum>(5)</enum><text>on
home sales and construction;</text>
</paragraph><paragraph id="H5DE0B3C249EF4C45891EE1D1D8E2B5FA"><enum>(6)</enum><text>of extending the
rescission right, if any, on adjustable rate loans and its impact on
litigation;</text>
</paragraph><paragraph id="HB3E9DBD1423F4910BF9495C082E0A6E6"><enum>(7)</enum><text>of State
foreclosure laws and, if any, an investor’s ability to transfer a property
after foreclosure;</text>
</paragraph><paragraph id="H5ED1A710C9AD4606BE24D43409600075"><enum>(8)</enum><text>of expanding the
existing provisions of the Home Ownership and Equity Protection Act of
1994;</text>
</paragraph><paragraph id="H76884E52308E4B1C8131B2367E8D90B1"><enum>(9)</enum><text>of prohibiting
prepayment penalties on high-cost mortgages; and</text>
</paragraph><paragraph id="HCF0C3065EC454941B0B33719A32609AA"><enum>(10)</enum><text display-inline="yes-display-inline">of establishing counseling services under
the Department of Housing and Urban Development and offered through the Office
of Housing Counseling.</text>
</paragraph></subsection><subsection id="HB2196663D86045CD97D7CCFB2464A53E"><enum>(b)</enum><header>Report</header><text>Before
the end of the 1-year period beginning on the date of the enactment of this
Act, the Comptroller General shall submit a report to the Congress containing
the findings and conclusions of the Comptroller General with respect to the
study conducted pursuant to subsection (a).</text>
</subsection></section><enum>III</enum><header>High-Cost
Mortgages</header>
<section id="H6197211012D34B269D52B8404B1CB4E3"><enum>301.</enum><header>Definitions
relating to high-cost mortgages</header>
<subsection id="H5B200637D12C49FBA9AEDCE651762FED"><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 id="H6D0F11A30B324FD4AECA57A3C3107F56">
<subsection id="HFAA046EB9DF8467DBBDEC906C6A5072B"><enum>(aa)</enum><header>High-cost
mortgage</header>
<paragraph id="H483CBEDBA58345E0AC6FE193A8269427"><enum>(1)</enum><header>Definition</header>
<subparagraph id="H76D70E357E644DBE9F4F45EAE5756914"><enum>(A)</enum><header>In
general</header><text>The term <term>high-cost mortgage</term>, and a mortgage
referred to in this subsection, means a consumer credit transaction that is
secured by the consumer's principal dwelling, other than a reverse mortgage
transaction, if—</text>
<clause id="H67050AD2ED2542EF8C8FE658C826CD45"><enum>(i)</enum><text>in
the case of a credit transaction secured—</text>
<subclause id="H6EE08B38EFD94488B27EA85DFF94CB00"><enum>(I)</enum><text display-inline="yes-display-inline">by a first mortgage on the consumer's
principal dwelling, the annual percentage rate at consummation of the
transaction will exceed by more than 8 percentage (10 percentage points, if the
dwelling is personal property and the transaction is for less than $50,000)
points the yield on 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="H0A0F5F1154C9471E82D913CD569799C5"><enum>(II)</enum><text>by a subordinate
or junior mortgage on the consumer's principal dwelling, the annual percentage
rate at consummation of the transaction will exceed by more than 10 percentage
points the yield on 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;</text>
</subclause></clause><clause id="H050C092E96984132B97B2605F3004766"><enum>(ii)</enum><text>the total points
and fees payable in connection with the transaction exceed—</text>
<subclause id="H474CF30A117C44D700EAF9007797E9BD"><enum>(I)</enum><text display-inline="yes-display-inline">in the case of a transaction for $20,000 or
more, 5 percent of the total transaction amount; or</text>
</subclause><subclause id="H10AD833A5D054B1799D7A1D165C100F8"><enum>(II)</enum><text>in the case of a
transaction for less than $20,000, the lesser of 8 percent of the total
transaction amount or $1,000; or</text>
</subclause></clause><clause id="HB064616DABC64EA0BD35F4E72F96E2ED"><enum>(iii)</enum><text display-inline="yes-display-inline">the credit transaction documents permit the
creditor to charge or collect prepayment fees or penalties more than 36 months
after the transaction closing or such fees or penalties exceed, in the
aggregate, more than 2 percent of the amount prepaid.</text>
</clause></subparagraph><subparagraph id="HC255BD13D47844D38EE1E61D7E542ED"><enum>(B)</enum><header>Introductory
rates taken into account</header><text>For purposes of subparagraph (A)(i), the
annual percentage rate of interest shall be determined based on the following
interest rate:</text>
<clause id="H58281E244CA24B6A9805E6A560401C43"><enum>(i)</enum><text>In
the case of a fixed-rate transaction in which the annual percentage rate 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="HCF1A566A2330414EA0CF5353E960BE65"><enum>(ii)</enum><text display-inline="yes-display-inline">In the case of a transaction 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 during the
transaction agreement.</text>
</clause><clause id="HA2199E74C46D4B6E836E6F7BEC99BCD"><enum>(iii)</enum><text display-inline="yes-display-inline">In the case of any other transaction in
which the rate may vary at any time during the term of the loan for any reason,
the interest charged on the transaction at the maximum rate that may be charged
during the term of the
transaction.</text>
</clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H9E81B2885A544953989042717B03F407"><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 new subparagraph:</text>
<quoted-block id="HD6937A80C67747D4AAEBB6594D3EE36F">
<subparagraph id="HBB8ADBF03AA24A32B2A1AB35A48E4CC2"><enum>(B)</enum><text>An increase or
decrease under subparagraph (A)—</text>
<clause id="H857E56DDE68C4F518EB251C9F743BC7"><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="HC6382E6510B242B38620FF5449EAEF27"><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="H4047AF4D7E8741EF8300A9EC43D2D2EE"><enum>(c)</enum><header>Points and fees
defined</header>
<paragraph id="H07AADC1BC0284331B9C000BEABC18900"><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="HF6F88BC45D1E46F8AF5FB7B9EACF113"><enum>(A)</enum><text>by striking
subparagraph (B) and inserting the following:</text>
<quoted-block id="HB6903AE5BBA346F592C91EF172E2EE40">
<subparagraph id="HDBD2FEC17F0E4D4E8CB1B78DE8270991"><enum>(B)</enum><text display-inline="yes-display-inline">all compensation paid directly or
indirectly by a consumer or creditor to a mortgage broker from any source,
including a mortgage originator that originates a loan in the name of the
originator in a table-funded
transaction;</text>
</subparagraph><after-quoted-block>;</after-quoted-block></quoted-block>
</subparagraph><subparagraph id="H3C186AB85AA54FEB859B029418BB1346"><enum>(B)</enum><text display-inline="yes-display-inline">in subparagraph (C)(ii), by inserting
<quote>except where applied to the charges set forth in section 106(e)(1) where
a creditor may receive indirect compensation solely as a result of obtaining
distributions of profits from an affiliated entity based on its ownership
interest in compliance with section 8(c)(4) of the Real Estate Settlement
Procedures Act of 1974</quote> before the semicolon at the end;</text>
</subparagraph><subparagraph id="H337038C2B8274588915DBDD228AC37DB"><enum>(C)</enum><text>in subparagraph
(C)(iii), by striking <quote>; and</quote> and inserting <quote>, except as
provided for in clause (ii);</quote>;</text>
</subparagraph><subparagraph id="HFA64EA9DEA2748BABEF970DD7806CFB9"><enum>(D)</enum><text>by redesignating
subparagraph (D) as subparagraph (G); and</text>
</subparagraph><subparagraph id="HD60A339030CD4B0FAB4E59A248164F26"><enum>(E)</enum><text>by inserting after
subparagraph (C) the following new subparagraphs:</text>
<quoted-block id="H543D26EBCFB748EC8737E8B6D19DCB87">
<subparagraph id="H0F4C445885AA430DB837F608454F6126"><enum>(D)</enum><text>premiums or other
charges payable at or before closing 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="H14FBFFF21C0D4D35832F4CBEAACE1434"><enum>(E)</enum><text>except as provided
in subsection (cc), the maximum prepayment fees and penalties which may be
charged or collected under the terms of the credit transaction;</text>
</subparagraph><subparagraph id="H87FC7143D3A04CFABE007DB87C8EFC00"><enum>(F)</enum><text>all prepayment
fees or penalties that are incurred by the consumer 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="H5D46324727E042A28FF417DE285FB650"><enum>(2)</enum><header>Calculation of
points and fees for open-end consumer credit plans</header><text>Section
103(aa) of the Truth in Lending Act (15 U.S.C. 1602(aa)) is amended—</text>
<subparagraph id="H2F8DA72C22C248CF92D77098D9B4F333"><enum>(A)</enum><text>by redesignating
paragraph (5) as paragraph (6); and</text>
</subparagraph><subparagraph id="HB4B5A8ECADF644E9B6F54E3F3B717012"><enum>(B)</enum><text>by inserting after
paragraph (4) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HB5E66182E3634FD794AE787CBE4BC1AA" style="OLC">
<paragraph id="HFDDE29928AEE4943A5E0321C41BAF141"><enum>(5)</enum><header>Calculation of
points and fees for open-end consumer credit plans</header><text display-inline="yes-display-inline">In
the case of open-end consumer credit plans, 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 credit
transaction, plus the minimum additional fees 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="H074482BF0C7D473AB584BFA7309284FC"><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 new sentence: <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 funding transaction of such a mortgage,
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="H92A97027A65946FE9D49FD93B556864F"><enum>(e)</enum><header>Bona fide
discount loan discount points and prepayment penalties</header><text>Section
103 of the Truth in Lending Act (15 U.S.C. 1602) is amended by inserting after
subsection (cc) (as added by section 101) the following new subsection:</text>
<quoted-block id="H565485DA8AC449E19122597B43D5EFB5">
<subsection id="H2B6306D6C8F34C27A957F9909347BDE2"><enum>(dd)</enum><header>Bona fide
discount points and prepayment penalties</header><text>For the purposes of
determining the amount of points and fees for purposes of subsection (aa),
either the amounts described in paragraph (1) or (4) of the following
paragraphs, but not both, may be excluded:</text>
<paragraph id="H5D79325D6B87421FAB16D032F6527F89"><enum>(1)</enum><header>Exclusion of
bona fide discount points</header><text>The discount points described in 1 of
the following subparagraphs shall be excluded from determining the amounts of
points and fees with respect to a high-cost mortgage for purposes of subsection
(aa):</text>
<subparagraph id="H0B6B940CD272489EB517E7ABE503F400"><enum>(A)</enum><text>Up to and
including 2 bona fide discount points payable by the consumer in connection
with the mortgage, but only if the interest rate from which the mortgage's
interest rate 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.</text>
</subparagraph><subparagraph id="H1E819F699AFB47EB94575778C6A21665"><enum>(B)</enum><text>Unless 2 bona fide
discount points have been excluded under subparagraph (A), up to and including
1 bona fide discount point payable by the consumer in connection with the
mortgage, but only if the interest rate from which the mortgage's interest rate
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>
</subparagraph></paragraph><paragraph id="HF27797E0906649EAB03CE5828530D584"><enum>(2)</enum><header>Definition</header><text>For
purposes of paragraph (1), 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>
</paragraph><paragraph id="HEC130FCCA3164F58AABFB97CB0B05474"><enum>(3)</enum><header>Exception for
interest rate reductions inconsistent with industry
norms</header><text>Paragraph (1) 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>
</paragraph><paragraph commented="no" id="H0688665FB71940FBBA5630D56762E9C"><enum>(4)</enum><header>Allowance of
conventional prepayment penalty</header><text>Subsection (aa)(1)(4)(E) shall
not apply so as to include a prepayment penalty or fee that is authorized by
law other than this title and may be imposed pursuant to the terms of a
high-cost mortgage (or other consumer credit transaction secured by the
consumer's principal dwelling) if—</text>
<subparagraph commented="no" id="HE5AF6530EB424FB5AC3065EC8193447B"><enum>(A)</enum><text>the annual
percentage rate applicable with respect to such mortgage or transaction (as
determined for purposes of subsection (aa)(1)(A)(i))—</text>
<clause commented="no" id="H09D5A5791AE443019343BA002444A38D"><enum>(i)</enum><text>in the case of a
first mortgage on the consumer's principal dwelling, does not exceed by more
than 2 percentage points the yield on 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>
</clause><clause commented="no" id="H51B0ECD3D82142F594B854DB9B8DCD81"><enum>(ii)</enum><text>in the case of a
subordinate or junior mortgage on the consumer's principal dwelling, does not
exceed by more than 4 percentage points the yield on such Treasury securities;
and</text>
</clause></subparagraph><subparagraph commented="no" id="H7B64FC7D5A65480D99514C80C971BA94"><enum>(B)</enum><text>the total amount
of any prepayment fees or penalties permitted under the terms of the high-cost
mortgage or transaction does not exceed 2 percent of the amount
prepaid.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section display-inline="no-display-inline" id="H36B5F814C92C461C97F800D962658371" section-type="subsequent-section"><enum>302.</enum><header>Amendments to
existing requirements for certain mortgages</header>
<subsection commented="no" id="H0765942E9CE64539B9E99298F4746D6D"><enum>(a)</enum><header>Prepayment
penalty provisions</header><text>Section 129(c)(2) of the Truth in Lending Act
(15 U.S.C. 1639(c)(2)) is amended—</text>
<paragraph commented="no" id="H91958C8C0D0844F79B5C365BCEA835C"><enum>(1)</enum><text>by striking
<quote>and</quote> after the semicolon at the end of subparagraph (C);</text>
</paragraph><paragraph commented="no" id="HE0C4273B59D243FA83E5F74800710097"><enum>(2)</enum><text>by redesignating
subparagraph (D) as subparagraph (E); and</text>
</paragraph><paragraph commented="no" id="H923507D6E3654914B3BECBA8DD088772"><enum>(3)</enum><text>by inserting after
subparagraph (C) the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H2D011FB9779849D7BBB9662115132067" style="OLC">
<subparagraph commented="no" id="HCE168CB509254D04B182716C21E692B7"><enum>(D)</enum><text>the amount of the
principal obligation of the mortgage exceeds the maximum principal obligation
limitation (for the applicable size residence) under section 203(b)(2) of the
National Housing Act for the area in which the residence subject to the
mortgage is located;
and</text>
</subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H683079AAD2CA4E0CBB237F989210F08E"><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 id="H4260B56AB8C04A21B6876200A5006F7C">
<subsection id="H9AD4598645E847179C265CDE170004B8"><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 earlier scheduled payments.
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 commented="no" id="HBFD9E73D5CA94F53B0EF3495EEB15847"><enum>(c)</enum><header>No lending
without due regard to ability To repay</header><text>Section 129(h) of the
Truth in Lending Act (15 U.S.C. 1639(h)) is amended—</text>
<paragraph commented="no" id="H10034D9A8FAA4B40B57CDCC0CE4FF05C"><enum>(1)</enum><text>by striking
<quote><header-in-text level="subsection">Payment Ability of
Consumer</header-in-text>.—A creditor shall not</quote> and
inserting</text>
<quoted-block display-inline="yes-display-inline" id="H7FB10A47E244477EB6D98697921BA205" style="OLC">
<text><header-in-text level="subsection" style="OLC">Payment Ability of
Consumer.—</header-in-text></text><paragraph commented="no" id="H99A5006D919B41C6B8FAD5303CA4887C"><enum>(1)</enum><header>Pattern or
practice</header>
<subparagraph commented="no" id="H4780FCE14F8141C400CA8443CDF87057"><enum>(A)</enum><header>In
general</header><text>A creditor shall
not</text>
</subparagraph></paragraph><after-quoted-block>;</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="HC9B40CE6431C4F328CE7612F732E6F91"><enum>(2)</enum><text>by inserting after
subparagraph (A) (as so designated by paragraph (1) of this subsection) the
following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="HE050800B37F540F583F130ADECE6EBFC" style="OLC">
<subparagraph commented="no" id="H4B679804E025415CB328749033E1D044"><enum>(B)</enum><header>Presumption of
violation</header><text>There shall be a presumption that a creditor has
violated this subsection if the creditor engages in a pattern or practice of
making high-cost mortgages without verifying or documenting the repayment
ability of consumers with respect to such
mortgages.</text>
</subparagraph><after-quoted-block>;
and</after-quoted-block></quoted-block>
</paragraph><paragraph commented="no" id="HAF02D9BA01194B59A762E2C13B51E300"><enum>(3)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block id="H8AFD720DC55C407FAB46A92B4E78B6E">
<paragraph commented="no" id="H642893CBF8F64BAFAF6CB360CDEF4060"><enum>(2)</enum><header>Prohibition on
extending credit without regard to payment ability of consumer</header>
<subparagraph commented="no" id="H6A2128D7081F472F90C0C5AB6F768ECD"><enum>(A)</enum><header>In
general</header><text>A creditor may not extend credit to a consumer under a
high-cost mortgage unless a reasonable creditor would believe at the time the
mortgage is closed that the consumer or consumers that are residing or will
reside in the residence subject to the mortgage will be able to make the
scheduled payments associated with the mortgage, based upon a consideration of
current and expected income, current obligations, employment status, and other
financial resources, other than equity in the residence.</text>
</subparagraph><subparagraph commented="no" id="H391B5F8E772A46A1977E2E86B8D389C5"><enum>(B)</enum><header>Presumption of
ability</header><text>For purposes of this subsection, there shall be a
rebuttable presumption that a consumer is able to make the scheduled payments
to repay the obligation if, at the time the high-cost mortgage is consummated,
the consumer's total monthly debts, including amounts under the mortgage, do
not exceed 50 percent of his or her monthly gross income as verified by tax
returns, payroll receipts, or other third-party income
verification.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection></section><section commented="no" id="HFCABEAE61544411C8519F9A338A874DB"><enum>303.</enum><header>Additional
requirements for certain mortgages</header>
<subsection commented="no" id="HEE89D7E01C2E48399F549392FDF400B7"><enum>(a)</enum><header>Additional
Requirements for Certain Mortgages</header><text>Section 129 of the Truth in
Lending Act (15 U.S.C. 1639) is amended—</text>
<paragraph commented="no" id="H28151741120F4DAC8336DBEEFC7BF100"><enum>(1)</enum><text>by redesignating
subsections (j), (k) and (l) as subsections (n), (o) and (p) respectively;
and</text>
</paragraph><paragraph commented="no" id="H560448CE3209460E8567ABEF640441F"><enum>(2)</enum><text>by inserting after
subsection (i) the following new subsections:</text>
<quoted-block id="H51B10C1DE91C463D005C788CD3082FCA">
<subsection commented="no" id="HE8454D5652534DD9915EBF39002C7DD3"><enum>(j)</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 high-cost mortgage that refinances all or any portion of
such existing loan or debt.</text>
</subsection><subsection commented="no" id="HC64732A18BCE47D8A682BA932E00E9F0"><enum>(k)</enum><header>Late
fees</header>
<paragraph commented="no" id="H329A0CB04B2E49A3ACF533F39337AC89"><enum>(1)</enum><header>In
general</header><text>No creditor may impose a late payment charge or fee in
connection with a high-cost mortgage—</text>
<subparagraph commented="no" id="HAB23CC46165849818553E4572F309643"><enum>(A)</enum><text>in an amount in
excess of 4 percent of the amount of the payment past due;</text>
</subparagraph><subparagraph commented="no" id="HFB78F46B0C02491600C17593A6C6F338"><enum>(B)</enum><text>unless the loan
documents specifically authorize the charge or fee;</text>
</subparagraph><subparagraph commented="no" id="H69076A52DDFB41A7BE7E2D72993DB1F5"><enum>(C)</enum><text>before the end of
the 15-day period beginning on the date the payment is due, or in the case of a
loan on which interest on each installment is paid in advance, before the end
of the 30-day period beginning on the date the payment is due; or</text>
</subparagraph><subparagraph commented="no" id="H6067DFF40E844D0C90840870B3D1E51E"><enum>(D)</enum><text>more than once
with respect to a single late payment.</text>
</subparagraph></paragraph><paragraph commented="no" id="HBDF3889D0E434E5DA3012CC5D953BFF3"><enum>(2)</enum><header>Coordination
with subsequent late fees</header><text>If a 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 any late fee or delinquency charge assessed on any earlier
payment, no late fee or delinquency charge may be imposed on such
payment.</text>
</paragraph><paragraph commented="no" id="H3143809A9B6F43C2A4875BE26D590900"><enum>(3)</enum><header>Failure to make
installment payment</header><text>If, in the case of a loan agreement the terms
of which provide that any payment shall first be applied to any past due
principal balance, the consumer fails to make an installment payment and the
consumer subsequently resumes making installment payments but has not paid all
past due installments, the creditor may impose a separate late payment charge
or fee for any principal due (without deduction due to late fees or related
fees) until the default is cured.</text>
</paragraph></subsection><subsection commented="no" id="H9AE65A9FC0374FFB8539E6345C5F2427"><enum>(l)</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. This
provision shall not apply when repayment of the loan has been accelerated by
default, pursuant to a due-on-sale provision, or pursuant to a material
violation of some other provision of the loan documents unrelated to the
payment schedule.</text>
</subsection><subsection commented="no" id="HB6201EFFD5B64AA29B5323758567448E"><enum>(m)</enum><header>Restriction on
financing points and fees</header><text>No creditor may directly or indirectly
finance, in connection with any high-cost mortgage, any of the
following:</text>
<paragraph commented="no" id="H620D8D549EC24406956720E79E12B00"><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.</text>
</paragraph><paragraph commented="no" id="HCCDDFB88BECD4D40AA38A07F5628F0CA"><enum>(2)</enum><text>Any points or
fees.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection commented="no" id="H75C262F2D62F4D049FBC9F1DF4D42964"><enum>(b)</enum><header>Prohibitions on
evasions</header><text>Section 129 of the Truth in Lending Act (15 U.S.C. 1639)
is amended by inserting after subsection (p) (as so redesignated by subsection
(a)(1)) the following new subsection:</text>
<quoted-block id="HBA3C2FFDF617454C81F2BD00A3AEE768">
<subsection commented="no" id="H79FA3D1F5A4C4184A90021913DFCFEB0"><enum>(q)</enum><header>Prohibitions 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 commented="no" id="HCE905225DC1F4121944BA732B6E7EF18"><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 commented="no" id="HFEABA62FD566455890504B450585EAC"><enum>(2)</enum><text>to divide any loan
transaction into separate parts for the purpose and with the intent of evading
provisions of this
title.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" id="H4E8175B5CD3E4CB500644E08B58EAFA"><enum>(c)</enum><header>Modification or
Deferral Fees</header><text>Section 129 of the Truth in Lending Act (15 U.S.C.
1639) is amended by inserting after subsection (q) (as added by subsection (b)
of this section) the following new subsection:</text>
<quoted-block id="HDEC89B8052574658BE3D5052EEC55807">
<subsection commented="no" id="H724D18A60208415C8D1906DF138BFE4"><enum>(r)</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 amount of the fee is comparable
to fees imposed for similar transactions in connection with consumer credit
transactions that are secured by a consumer's principal dwelling and are not
high-cost
mortgages.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" id="H66B29F4599B24AD2B151CF7BD3EB6726"><enum>(d)</enum><header>Payoff
statement</header><text>Section 129 of the Truth in Lending Act (15 U.S.C.
1639) is amended by inserting after subsection (r) (as added by subsection (c)
of this section) the following new subsection:</text>
<quoted-block id="HFB271565B07D45B987064799D000A5C2">
<subsection commented="no" id="H87DB5640DC91474AA1507C06EE83DB08"><enum>(s)</enum><header>Payoff
statement</header>
<paragraph commented="no" id="H0618EF6AD6E544F89DB3127F2D7691B3"><enum>(1)</enum><header>Fees</header>
<subparagraph commented="no" id="H180EFB7F49C74F07ABCA276DF1510B"><enum>(A)</enum><header>In
general</header><text>Except as provided in subparagraph (B), no creditor or
servicer may charge a fee for informing or transmitting to any person the
balance due to pay off the outstanding balance on a high-cost mortgage.</text>
</subparagraph><subparagraph commented="no" id="HFA45D2B2E46F488D00ABDAB9FF4FCBDC"><enum>(B)</enum><header>Transaction
fee</header><text>When payoff information referred to in subparagraph (A) is
provided by facsimile transmission or by a courier service, a creditor or
servicer may charge a processing fee to cover the cost of such transmission or
service in an amount not to exceed an amount that is comparable to fees imposed
for similar services provided in connection with consumer credit transactions
that are secured by the consumer's principal dwelling and are not high-cost
mortgages.</text>
</subparagraph><subparagraph commented="no" id="HA5584FEFA1AF423BBFD7877E8B2D2B34"><enum>(C)</enum><header>Fee
disclosure</header><text>Prior to charging a transaction fee as provided in
subparagraph (B), a creditor or servicer shall disclose that payoff balances
are available for free pursuant to subparagraph (A).</text>
</subparagraph><subparagraph commented="no" id="H5483E21B67264A71AB666420CBD494C"><enum>(D)</enum><header>Multiple
requests</header><text>If a creditor or servicer has provided payoff
information referred to in subparagraph (A) without charge, other than the
transaction fee allowed by subparagraph (B), on 4 occasions during a calendar
year, the creditor or servicer may thereafter charge a reasonable fee for
providing such information during the remainder of the calendar year.</text>
</subparagraph></paragraph><paragraph commented="no" id="H58ACD09965C84FBB98FE7E08A2E7FB0"><enum>(2)</enum><header>Prompt
delivery</header><text>Payoff balances shall be provided within 5 business days
after receiving a request by a consumer or a person authorized by the consumer
to obtain such
information.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" id="H05D7BF0588E34CA9B998283C81F27F3B"><enum>(e)</enum><header>Pre-Loan
Counseling Required</header><text>Section 129 of the Truth in Lending Act (15
U.S.C. 1639) is amended by inserting after subsection (s) (as added by
subsection (d) of this section) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HFF6A5CA500644A39A97C4DD4D2B570CA" style="OLC">
<subsection commented="no" id="H8254FD9D9AC543B9B5A9F41CF30038E8"><enum>(t)</enum><header>Pre-Loan
Counseling</header>
<paragraph commented="no" id="H61B36278C57041B792FB43D6B0A7A689"><enum>(1)</enum><header>In
general</header><text>A creditor may not extend credit to a consumer under a
high-cost mortgage without first receiving certification from a counselor that
is approved by the Secretary of Housing and Urban Development, or at the
discretion of the Secretary, a State housing finance authority, that the
consumer has received counseling on the advisability of the mortgage. Such
counselor shall not be employed by the creditor or an affiliate of the creditor
or be affiliated with the creditor.</text>
</paragraph><paragraph commented="no" id="H0C8F72FA71BC4F819B84FD9CE63DADB0"><enum>(2)</enum><header>Disclosures
required prior to counseling</header><text>No counselor may certify that a
consumer has received counseling on the advisability of the high-cost mortgage
unless the counselor can verify that the consumer has received each statement
required (in connection with such loan) by this section or the Real Estate
Settlement Procedures Act of 1974 with respect to the transaction.</text>
</paragraph><paragraph commented="no" id="HB19EFC9CCA8A4D5EADF05827C98F398F"><enum>(3)</enum><header>Regulations</header><text>The
Secretary of Housing and Urban Development may prescribe such regulations as
the Secretary determines to be appropriate to carry out the requirements of
paragraph
(1).</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HCAC0E466D7F840308E6B008050F73537"><enum>(f)</enum><header>Flipping
prohibited</header><text display-inline="yes-display-inline">Section 129 of the
Truth in Lending Act (15 U.S.C. 1639) is amended by inserting after subsection
(t) (as added by subsection (e)) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H24954B84276148D4A9772D3BAA544EF2" style="OLC">
<subsection id="H74CCDD9ED7914ABAA91B3B4D45CEA694"><enum>(u)</enum><header>Flipping</header>
<paragraph id="H77AF3198802046748874C9D474B37666"><enum>(1)</enum><header>In
general</header><text>No creditor may knowingly or intentionally engage in the
unfair act or practice of flipping in connection with a high-cost
mortgage.</text>
</paragraph><paragraph id="HF986944DA00C499883ECF17014C54982"><enum>(2)</enum><header>Flipping
defined</header><text display-inline="yes-display-inline">For purposes of this
subsection, the term <term>flipping</term> means the making of a loan or
extension of credit in the form a high-cost mortgage to a consumer which
refinances an existing mortgage when the new loan or extension of credit does
not have reasonable, net tangible benefit (as determined in accordance with
regulations prescribed under section 129B(b)) to the consumer considering all
of the circumstances, including the terms of both the new and the refinanced
loans or credit, the cost of the new loan or credit, and the consumer's
circumstances.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section commented="no" display-inline="no-display-inline" id="H770E224738B94DCCA636EC60B1C46107" section-type="subsequent-section"><enum>304.</enum><header>Amendment to
provision governing correction of errors</header><text display-inline="no-display-inline">Section 130(b) of the Truth in Lending Act
(15 U.S.C. 1640(b)) is amended to read as follows:</text>
<quoted-block id="H0F1C01253631436CB555B095BD422FF2">
<subsection commented="no" id="H780A294CF2534E55A98724FD01B5531"><enum>(b)</enum><header>Correction of
errors</header><text>A creditor has no liability under this section or section
108 or 112 for any failure to comply with any requirement imposed under this
chapter or chapter 5, if—</text>
<paragraph commented="no" id="H1A01546D1FCA439395AA57C19555A2E7"><enum>(1)</enum><text>within 30 days of
the loan closing and prior to the institution of any action, the consumer is
notified of or discovers the violation, appropriate restitution is made, and
whatever adjustments are necessary are made to the loan to either, at the
choice of the consumer—</text>
<subparagraph commented="no" id="H0FC400A9CD9C4BFC9402AC6E85504386"><enum>(A)</enum><text>make the loan
satisfy the requirements of this chapter; or</text>
</subparagraph><subparagraph commented="no" id="H21369B3C06894A9C883E117513726EB3"><enum>(B)</enum><text>in the case of a
high-cost mortgage, change the terms of the loan in a manner beneficial to the
consumer so that the loan will no longer be a high-cost mortgage; or</text>
</subparagraph></paragraph><paragraph commented="no" id="H3A0D3129DD5949248BF302CAE2C57E0"><enum>(2)</enum><text>within 60 days of
the creditor's discovery or receipt of notification of an unintentional
violation or bona fide error as described in subsection (c) and prior to the
institution of any action, the consumer is notified of the compliance failure,
appropriate restitution is made, and whatever adjustments are necessary are
made to the loan to either, at the choice of the consumer—</text>
<subparagraph commented="no" id="HD588AC3E30844C28BB33BB6F72B4D02"><enum>(A)</enum><text>make the loan
satisfy the requirements of this chapter; or</text>
</subparagraph><subparagraph commented="no" id="HE25EB3A387AE4F6BA7628970CCBD27A2"><enum>(B)</enum><text>in the case of a
high-cost mortgage, change the terms of the loan in a manner beneficial so that
the loan will no longer be a high-cost
mortgage.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HB25405BD9A7B4F3CA4E8943EB5A0FD84"><enum>305.</enum><header>Regulations</header>
<subsection id="H3A301A24A4804E6C97BE006E096780F8"><enum>(a)</enum><header>In
General</header><text>The Board of Governors of the Federal Reserve System
shall publish regulations implementing this title and the amendments made by
this title in final form before the end of the 6-month period beginning on the
date of the enactment of this Act.</text>
</subsection><subsection id="HB4BA3BAFEE344131A0A35063C5B78E98"><enum>(b)</enum><header>Consumer
Mortgage Education</header>
<paragraph id="H0EA18970493D41A991E6B287394EE435"><enum>(1)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Board of Governors of the Federal
Reserve System may prescribe regulations requiring or encouraging creditors to
provide consumer mortgage education to prospective customers or direct such
customers to qualified consumer mortgage education or counseling programs in
the vicinity of the residence of the consumer.</text>
</paragraph><paragraph id="HF209EF397A9F432EBFFA44BBBCFB84CB"><enum>(2)</enum><header>Coordination
with state law</header><text>No requirement established by the Board of
Governors of the Federal Reserve System pursuant to paragraph (1) shall be
construed as affecting or superseding any requirement under the law of any
State with respect to consumer mortgage counseling or education.</text>
</paragraph></subsection></section><section id="HF7A85DBC7B41427F81B3FAFC9695C53E"><enum>306.</enum><header>Effective
date</header><text display-inline="no-display-inline">The amendments made by
this title shall take effect at the end of the 6-month period beginning on the
date of the enactment of this Act and shall apply to mortgages referred to in
section 103(aa) of the Truth in Lending Act (15 U.S.C. 1602(aa)) consummated
after the end of such period.</text>
</section><enum>IV</enum><header>Office of Housing
Counseling</header>
<section id="H408ED752CC134F779BC5CAA0261DB54"><enum>401.</enum><header>Short
title</header><text display-inline="no-display-inline">This title may be cited
as the <quote><short-title>Expand and Preserve Home Ownership Through
Counseling Act</short-title></quote>.</text>
</section><section id="HE931B5C739514B2E93EA9CBB0918CF29"><enum>402.</enum><header>Establishment
of Office of Housing Counseling</header><text display-inline="no-display-inline">Section 4 of the Department of
<act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> (42
U.S.C. 3533) is amended by adding at the end the following new
subsection:</text>
<quoted-block act-name="Housing" id="H07A690AD61444F6BA1FAA6A5FEAD25B3">
<subsection id="HFFE93CB8F2DD48B7BAD607F0DCDCD45"><enum>(g)</enum><header>Office of Housing
Counseling</header>
<paragraph id="H26EAA0E9C1614C758EACC9EB18CA30A7"><enum>(1)</enum><header>Establishment</header><text>There
is established, in the Office of the Secretary, the Office of Housing
Counseling.</text>
</paragraph><paragraph id="H6D4E8AAC124747F88B4132A300B44322"><enum>(2)</enum><header>Director</header><text>There
is established the position of Director of Housing Counseling. The Director
shall be the head of the Office of Housing Counseling and shall be appointed by
the Secretary. Such position shall be a career-reserved position in the Senior
Executive Service.</text>
</paragraph><paragraph id="H8FD9D7E912AF4C80B0463FC88328D117"><enum>(3)</enum><header>Functions</header>
<subparagraph id="HC2FCFC738ED241118CE7723290F1A600"><enum>(A)</enum><header>In
general</header><text>The Director shall have ultimate responsibility within
the Department, except for the Secretary, for all activities and matters
relating to homeownership counseling and rental housing counseling,
including—</text>
<clause id="H9779F6AFCEE748CDBAC0FE813CE5A64E"><enum>(i)</enum><text>research, grant
administration, public outreach, and policy development relating to such
counseling; and</text>
</clause><clause id="H86B769667B514FC683CF219FFE24AB41"><enum>(ii)</enum><text>establishment,
coordination, and administration of all regulations, requirements, standards,
and performance measures under programs and laws administered by the Department
that relate to housing counseling, homeownership counseling (including
maintenance of homes), mortgage-related counseling (including home equity
conversion mortgages and credit protection options to avoid foreclosure), and
rental housing counseling, including the requirements, standards, and
performance measures relating to housing counseling.</text>
</clause></subparagraph><subparagraph id="H6FA1F3CE00F049AAA73B0068D69CED1C"><enum>(B)</enum><header>Specific
functions</header><text display-inline="yes-display-inline">The Director shall
carry out the functions assigned to the Director and the Office under this
section and any other provisions of law. Such functions shall include
establishing rules necessary for—</text>
<clause id="HBC4D6BFBE7634D01B6D5D8C00F3FF87"><enum>(i)</enum><text>the
counseling procedures under section 106(g)(1) of the
<act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of
1968 (12 U.S.C. 1701x(h)(1));</text>
</clause><clause id="HC0B89BF5F2B54ACB975DF9D9B39425C"><enum>(ii)</enum><text>carrying out all
other functions of the Secretary under section 106(g) of the
<act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of
1968, including the establishment, operation, and publication of the
availability of the toll-free telephone number under paragraph (2) of such
section;</text>
</clause><clause id="HDBF7C5FE365D4D339550988CCF923DC"><enum>(iii)</enum><text>carrying out
section 5 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2604)
for home buying information booklets prepared pursuant to such section;</text>
</clause><clause id="H7DDB6BA1CE054558B59D9BCAA7EBD982"><enum>(iv)</enum><text>carrying out the
certification program under section 106(e) of the
<act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of
1968 (12 U.S.C. 1701x(e));</text>
</clause><clause id="H1F2CCF8F87D04077815D7EFBDC008141"><enum>(v)</enum><text>carrying out the
assistance program under section 106(a)(4) of the
<act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of
1968, including criteria for selection of applications to receive
assistance;</text>
</clause><clause id="H237B256EA9E74355A7F7351F7777D4F4"><enum>(vi)</enum><text>carrying out any
functions regarding abusive, deceptive, or unscrupulous lending practices
relating to residential mortgage loans that the Secretary considers
appropriate, which shall include conducting the study under section 6 of the
Expand and Preserve Home Ownership Through Counseling Act;</text>
</clause><clause id="HBBA687D653EB49F680C8AE87D372038C"><enum>(vii)</enum><text>providing for
operation of the advisory committee established under paragraph (4) of this
subsection;</text>
</clause><clause id="H7A7C422DA40641CABE2CED59EEB0BCE0"><enum>(viii)</enum><text>collaborating
with community-based organizations with expertise in the field of housing
counseling; and</text>
</clause><clause id="H890D863ECE254D1882B020AE77DDD400"><enum>(ix)</enum><text>providing for the
building of capacity to provide housing counseling services in areas that lack
sufficient services.</text>
</clause></subparagraph></paragraph><paragraph id="H1C6604CFDA754BADA2F273B32BA103FA"><enum>(4)</enum><header>Advisory
Committee</header>
<subparagraph id="H306E663A33E74B2D9DA700CBA47453BE"><enum>(A)</enum><header>In
general</header><text>The Secretary shall appoint an advisory committee to
provide advice regarding the carrying out of the functions of the
Director.</text>
</subparagraph><subparagraph id="HB6B09D7C76B740069B001C7E7FC6B3A1"><enum>(B)</enum><header>Members</header><text>Such
advisory committee shall consist of not more than 12 individuals, and the
membership of the committee shall equally represent all aspects of the mortgage
and real estate industry, including consumers.</text>
</subparagraph><subparagraph id="HE589159D2D4B495FADEE74BBE8F634F"><enum>(C)</enum><header>Terms</header><text>Except
as provided in subparagraph (D), each member of the advisory committee shall be
appointed for a term of 3 years. Members may be reappointed at the discretion
of the Secretary.</text>
</subparagraph><subparagraph id="H4E3E635E07EE48D6B4F5E4497B13B88F"><enum>(D)</enum><header>Terms of initial
appointees</header><text>As designated by the Secretary at the time of
appointment, of the members first appointed to the advisory committee, 4 shall
be appointed for a term of 1 year and 4 shall be appointed for a term of 2
years.</text>
</subparagraph><subparagraph id="H43DDAA2040C142F0A518851C0085F858"><enum>(E)</enum><header>Prohibition of
pay; travel expenses</header><text>Members of the advisory committee shall
serve without pay, but shall receive travel expenses, including per diem in
lieu of subsistence, in accordance with applicable provisions under subchapter
I of chapter 57 of title 5, United States Code.</text>
</subparagraph><subparagraph id="H8B74276FC3CE4339A75EBAA99DE80600"><enum>(F)</enum><header>Advisory role
only</header><text>The advisory committee shall have no role in reviewing or
awarding housing counseling grants.</text>
</subparagraph></paragraph><paragraph id="HEBB71466EFE245E19EB4234EBEFD534E"><enum>(5)</enum><header>Scope of
homeownership counseling</header><text>In carrying out the responsibilities of
the Director, the Director shall ensure that homeownership counseling provided
by, in connection with, or pursuant to any function, activity, or program of
the Department addresses the entire process of homeownership, including the
decision to purchase a home, the selection and purchase of a home, issues
arising during or affecting the period of ownership of a home (including
refinancing, default and foreclosure, and other financial decisions), and the
sale or other disposition of a
home.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HCA30A630B14C4D4B005F0000CFEF1037"><enum>403.</enum><header>Counseling
procedures</header>
<subsection id="HE25BBDE6C6864A4D80B1DC2C2674EB01"><enum>(a)</enum><header>In
general</header><text>Section 106 of the <act-name parsable-cite="HUDA">Housing
and Urban Development Act</act-name> of 1968 (12 U.S.C. 1701x) is amended by
adding at the end the following new subsection:</text>
<quoted-block act-name="Housing" id="H0709D73FC1774F5DAA8E385E7E001E00">
<subsection id="HBE485AC9FBB34839B429795F68853F67"><enum>(g)</enum><header>Procedures and
activities</header>
<paragraph id="H353057F0DE25478D9EAD4245EC9C8D25"><enum>(1)</enum><header>Counseling
procedures</header>
<subparagraph id="H4DD647EE9291410084C2A7F9007B7D89"><enum>(A)</enum><header>In
general</header><text>The Secretary shall establish, coordinate, and monitor
the administration by the Department of Housing and Urban Development of the
counseling procedures for homeownership counseling and rental housing
counseling provided in connection with any program of the Department, including
all requirements, standards, and performance measures that relate to
homeownership and rental housing counseling.</text>
</subparagraph><subparagraph id="HCB943E8FCFB74E429442BABA0009A1F"><enum>(B)</enum><header>Homeownership
counseling</header><text>For purposes of this subsection and as used in the
provisions referred to in this subparagraph, the term <term>homeownership
counseling</term> means counseling related to homeownership and residential
mortgage loans. Such term includes counseling related to homeownership and
residential mortgage loans that is provided pursuant to—</text>
<clause id="H78200C80F4A945AD971E632F46F083CA"><enum>(i)</enum><text>section 105(a)(20)
of the <act-name parsable-cite="HCDA">Housing and Community Development Act of
1974</act-name> (42 U.S.C. 5305(a)(20));</text>
</clause><clause id="HDF7CD344ECF94DA0B5902CFC11EDCCBD"><enum>(ii)</enum><text>in the
<act-name parsable-cite="USHA">United States Housing Act of
1937</act-name>—</text>
<subclause id="HD9428165C0EE43EB8E0477DAD13D49B8"><enum>(I)</enum><text>section 9(e) (42
U.S.C. 1437g(e));</text>
</subclause><subclause id="H267A650C5B424ACDAFBB8F2694002876"><enum>(II)</enum><text>section
8(y)(1)(D) (42 U.S.C. 1437f(y)(1)(D));</text>
</subclause><subclause id="HD77BAEAF6AAD491D8BC6F5AA19E75984"><enum>(III)</enum><text>section
18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D));</text>
</subclause><subclause id="H030A843D2F1C45B0890093A940987276"><enum>(IV)</enum><text>section 23(c)(4)
(42 U.S.C. 1437u(c)(4));</text>
</subclause><subclause id="H249135606D7844A88E117041B800D8F8"><enum>(V)</enum><text>section 32(e)(4)
(42 U.S.C. 1437z–4(e)(4));</text>
</subclause><subclause id="HD3713EE2277640118E735878692825EC"><enum>(VI)</enum><text>section
33(d)(2)(B) (42 U.S.C. 1437z–5(d)(2)(B));</text>
</subclause><subclause id="H04D02E459D4B4959A5ADDCD1EE47F844"><enum>(VII)</enum><text>sections
302(b)(6) and 303(b)(7) (42 U.S.C. 1437aaa–1(b)(6), 1437aaa–2(b)(7));
and</text>
</subclause><subclause id="HB7E5C05582E54769BC29F75496578407"><enum>(VIII)</enum><text>section
304(c)(4) (42 U.S.C. 1437aaa–3(c)(4));</text>
</subclause></clause><clause id="H992F3CBCCE7B4855843324373B78BA44"><enum>(iii)</enum><text>section
302(a)(4) of the American Homeownership and Economic Opportunity Act of 2000
(42 U.S.C. 1437f note);</text>
</clause><clause id="HAB4EBFF089884C3600868C439C86C946"><enum>(iv)</enum><text>sections
233(b)(2) and 258(b) of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez
National Affordable Housing Act</act-name> (42 U.S.C. 12773(b)(2),
12808(b));</text>
</clause><clause id="H1F3C84486162495B82F71B71F9B5314"><enum>(v)</enum><text>this section and
section 101(e) of the <act-name parsable-cite="HUDA">Housing and Urban
Development Act</act-name> of 1968 (12 U.S.C. 1701x, 1701w(e));</text>
</clause><clause id="H9FBF4F9924544176AB40EAA714B8C038"><enum>(vi)</enum><text>section
220(d)(2)(G) of the Low-Income Housing Preservation and Resident Homeownership
Act of 1990 (12 U.S.C. 4110(d)(2)(G));</text>
</clause><clause id="H734C075CCD324013BF00B9719DC2F38B"><enum>(vii)</enum><text>sections
422(b)(6), 423(b)(7), 424(c)(4), 442(b)(6), and 443(b)(6) of the
<act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable Housing
Act</act-name> (42 U.S.C. 12872(b)(6), 12873(b)(7), 12874(c)(4), 12892(b)(6),
and 12893(b)(6));</text>
</clause><clause id="H7FC7B253F0BA4ED9B8006DEE2D50965B"><enum>(viii)</enum><text>section
491(b)(1)(F)(iii) of the McKinney-Vento Homeless Assistance Act (42 U.S.C.
11408(b)(1)(F)(iii));</text>
</clause><clause id="H274E2DC05B7742798FAEE35967D78C88"><enum>(ix)</enum><text>sections 202(3)
and 810(b)(2)(A) of the Native American Housing and Self-Determination Act of
1996 (25 U.S.C. 4132(3), 4229(b)(2)(A));</text>
</clause><clause id="H9A506DE531D143508490A64E00428D10"><enum>(x)</enum><text>in
the <act-name parsable-cite="NHA">National Housing Act</act-name>—</text>
<subclause id="HDB62CD0ED3594232AA920034AE657B2E"><enum>(I)</enum><text>in section 203 (12
U.S.C. 1709), the penultimate undesignated paragraph of paragraph (2) of
subsection (b), subsection (c)(2)(A), and subsection (r)(4);</text>
</subclause><subclause id="H172362791C1C4662A243DAC8DA710096"><enum>(II)</enum><text>subsections (a)
and (c)(3) of section 237 (12 U.S.C. 1715z–2); and</text>
</subclause><subclause id="H2F74AC79A2DF44E695E07DA84B1CA59"><enum>(III)</enum><text>subsections
(d)(2)(B) and (m)(1) of section 255 (12 U.S.C. 1715z–20);</text>
</subclause></clause><clause id="HE98D840C08F14DBB807500AD75C5EE9E"><enum>(xi)</enum><text>section
502(h)(4)(B) of the <act-name parsable-cite="HA49">Housing Act of
1949</act-name> (42 U.S.C. 1472(h)(4)(B)); and</text>
</clause><clause id="H126321CB7FE24F2EBBEAA9CE6C52828B"><enum>(xii)</enum><text>section 508 of
the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name>
of 1970 (12 U.S.C. 1701z–7).</text>
</clause></subparagraph><subparagraph id="HCAEFD0043338453AA93BCBDD87D08429"><enum>(C)</enum><header>Rental housing
counseling</header><text>For purposes of this subsection, the term <term>rental
housing counseling</term> means counseling related to rental of residential
property, which may include counseling regarding future homeownership
opportunities and providing referrals for renters and prospective renters to
entities providing counseling and shall include counseling related to such
topics that is provided pursuant to—</text>
<clause id="HD7563D7450984A61006F62428744D7A3"><enum>(i)</enum><text>section 105(a)(20)
of the <act-name parsable-cite="HCDA">Housing and Community Development Act of
1974</act-name> (42 U.S.C. 5305(a)(20));</text>
</clause><clause id="HC1F3719A78014C248BE480BCB14B8562"><enum>(ii)</enum><text>in the
<act-name parsable-cite="USHA">United States Housing Act of
1937</act-name>—</text>
<subclause id="H72BD53B619EA458682151D874FBF48FE"><enum>(I)</enum><text>section 9(e) (42
U.S.C. 1437g(e));</text>
</subclause><subclause id="H3C1D463BD54D40D9BA0600DC643E9D2"><enum>(II)</enum><text>section
18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D));</text>
</subclause><subclause id="H32CC77F53A8446C79298F638A0E50BA"><enum>(III)</enum><text>section 23(c)(4)
(42 U.S.C. 1437u(c)(4));</text>
</subclause><subclause id="H708EF166F939450182145400ECBF8872"><enum>(IV)</enum><text>section 32(e)(4)
(42 U.S.C. 1437z–4(e)(4));</text>
</subclause><subclause id="H5D1F814ABE0143F49EB3F0D752D2BB08"><enum>(V)</enum><text>section
33(d)(2)(B) (42 U.S.C. 1437z–5(d)(2)(B)); and</text>
</subclause><subclause id="H2FF03620D724458AA644BFD6C754F05"><enum>(VI)</enum><text>section 302(b)(6)
(42 U.S.C. 1437aaa–1(b)(6));</text>
</subclause></clause><clause id="HAD6C9906A3CD4CB3843668C1C6B3C1D"><enum>(iii)</enum><text>section 233(b)(2)
of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable
Housing Act</act-name> (42 U.S.C. 12773(b)(2));</text>
</clause><clause id="H6A3ACC8977284E969B8CF1D1B0554021"><enum>(iv)</enum><text>section 106 of
the <act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name>
of 1968 (12 U.S.C. 1701x);</text>
</clause><clause id="HBF93D242861546968DC334C64883001F"><enum>(v)</enum><text>section 422(b)(6)
of the <act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable
Housing Act</act-name> (42 U.S.C. 12872(b)(6));</text>
</clause><clause id="H0807F7A6E0A64464BA99E93600F136FA"><enum>(vi)</enum><text>section
491(b)(1)(F)(iii) of the McKinney-Vento Homeless Assistance Act (42 U.S.C.
11408(b)(1)(F)(iii));</text>
</clause><clause id="H71AC0BBEC46B4574AEA647888E3100B6"><enum>(vii)</enum><text>sections 202(3)
and 810(b)(2)(A) of the Native American Housing and Self-Determination Act of
1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); and</text>
</clause><clause id="H1B4D878B660348E1B64FCD60A3B2F100"><enum>(viii)</enum><text>the rental
assistance program under section 8 of the <act-name parsable-cite="USHA">United
States Housing Act of 1937</act-name> (42 U.S.C. 1437f).</text>
</clause></subparagraph></paragraph><paragraph id="H60FCB0133F3D4A088F181199EDE365F5"><enum>(2)</enum><header>Standards for
materials</header><text display-inline="yes-display-inline">The Secretary, in
conjunction with the advisory committee established under subsection (g)(4) of
the Department of Housing and Urban Development Act, shall establish standards
for materials and forms to be used, as appropriate, by organizations providing
homeownership counseling services, including any recipients of assistance
pursuant to subsection (a)(4).</text>
</paragraph><paragraph id="HB796DAD04B4341ACB832E49EBE04C308"><enum>(3)</enum><header>Mortgage
software systems</header>
<subparagraph id="H0A485542F2334BEAB7A8604CB522BA99"><enum>(A)</enum><header>Certification</header><text>The
Secretary shall provide for the certification of various computer software
programs for consumers to use in evaluating different residential mortgage loan
proposals. The Secretary shall require, for such certification, that the
mortgage software systems take into account—</text>
<clause id="H7D72601F2F2F41878B9E00FF777B6BED"><enum>(i)</enum><text>the consumer’s
financial situation and the cost of maintaining a home, including insurance,
taxes, and utilities;</text>
</clause><clause id="HC11ADE6744C54170999123FB018DBFCC"><enum>(ii)</enum><text>the amount of
time the consumer expects to remain in the home or expected time to maturity of
the loan;</text>
</clause><clause id="H957C43F96C4D4DB8B6CFF2E95333779B"><enum>(iii)</enum><text>such other
factors as the Secretary considers appropriate to assist the consumer in
evaluating whether to pay points, to lock in an interest rate, to select an
adjustable or fixed rate loan, to select a conventional or government-insured
or guaranteed loan and to make other choices during the loan application
process.</text>
</clause><continuation-text continuation-text-level="subparagraph">If the
Secretary determines that available existing software is inadequate to assist
consumers during the residential mortgage loan application process, the
Secretary shall arrange for the development by private sector software
companies of new mortgage software systems that meet the Secretary’s
specifications.</continuation-text></subparagraph><subparagraph id="H96B25BAA166C4156A3CAD879AC90F326"><enum>(B)</enum><header>Use and initial
availability</header><text>Such certified computer software programs shall be
used to supplement, not replace, housing counseling. The Secretary shall
provide that such programs are initially used only in connection with the
assistance of housing counselors certified pursuant to subsection (e).</text>
</subparagraph><subparagraph id="HA2F620E60B174BDAA52EDF15A049ED2F"><enum>(C)</enum><header>Availability</header><text>After
a period of initial availability under subparagraph (B) as the Secretary
considers appropriate, the Secretary shall take reasonable steps to make
mortgage software systems certified pursuant to this paragraph widely available
through the Internet and at public locations, including public libraries,
senior-citizen centers, public housing sites, offices of public housing
agencies that administer rental housing assistance vouchers, and housing
counseling centers.</text>
</subparagraph></paragraph><paragraph id="HC0D0F04236894FA99645DF026F2C1DD"><enum>(4)</enum><header>National public
service multimedia campaigns to promote housing counseling</header>
<subparagraph id="H10822C1489CF4786839FF598724F2D2B"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Director of
Housing Counseling shall develop, implement, and conduct national public
service multimedia campaigns designed to make persons facing mortgage
foreclosure, persons considering a subprime mortgage loan to purchase a home,
elderly persons, persons who face language barriers, low-income persons, and
other potentially vulnerable consumers aware that it is advisable, before
seeking or maintaining a residential mortgage loan, to obtain homeownership
counseling from an unbiased and reliable sources and that such homeownership
counseling is available, including through programs sponsored by the Secretary
of Housing and Urban Development.</text>
</subparagraph><subparagraph id="H9DE4D8BFD1C24415969FFB9760DAB61D"><enum>(B)</enum><header>Contact
information</header><text display-inline="yes-display-inline">Each segment of
the multimedia campaign under subparagraph (A) shall publicize the toll-free
telephone number and website of the Department of Housing and Urban Development
through which persons seeking housing counseling can locate a housing
counseling agency in their State that is certified by the Secretary of Housing
and Urban Development and can provide advice on buying a home, renting,
defaults, foreclosures, credit issues, and reverse mortgages.</text>
</subparagraph><subparagraph id="HE4726AA43FCA4981A4F4003D7E8DDCBB"><enum>(C)</enum><header>Authorization of
appropriations</header><text display-inline="yes-display-inline">There are
authorized to be appropriated to the Secretary, not to exceed $3,000,000 for
fiscal years 2009, 2010, and 2011, for the development, implementation, and
conduct of national public service multimedia campaigns under this
paragraph.</text>
</subparagraph></paragraph><paragraph id="H87437F7FC93145B3B613A8309854AC00"><enum>(5)</enum><header>Education
programs</header><text>The Secretary shall provide advice and technical
assistance to States, units of general local government, and nonprofit
organizations regarding the establishment and operation of, including
assistance with the development of content and materials for, educational
programs to inform and educate consumers, particularly those most vulnerable
with respect to residential mortgage loans (such as elderly persons, persons
facing language barriers, low-income persons, and other potentially vulnerable
consumers), regarding home mortgages, mortgage refinancing, home equity loans,
and home repair
loans.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HE697A629DF1D4BB6A3186D5740DE5ED3"><enum>(b)</enum><header>Conforming
amendments to grant program for homeownership counseling
organizations</header><text>Section 106(c)(5)(A)(ii) of the
<act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of
1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is amended—</text>
<paragraph id="H892A91897745402E8C22A6A100FE78F"><enum>(1)</enum><text>in
subclause (III), by striking <quote>and</quote> at the end;</text>
</paragraph><paragraph id="HD20BC0B29252407F00ECC8C7E2458B51"><enum>(2)</enum><text>in subclause (IV)
by striking the period at the end and inserting <quote>; and</quote>;
and</text>
</paragraph><paragraph id="HE4551E27DA1B40CBA1AFE786E2F6967C"><enum>(3)</enum><text>by inserting after
subclause (IV) the following new subclause:</text>
<quoted-block id="H857A942BAC5F4C2B82DB0092A567EA02">
<subclause id="HB6F1241B5FA542789C03C0EB2E00DC7D"><enum>(V)</enum><text>notify the housing
or mortgage applicant of the availability of mortgage software systems provided
pursuant to subsection
(g)(3).</text>
</subclause><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection></section><section id="HF7AABEFB5ACD4A49BBD3365C002C5334"><enum>404.</enum><header>Grants for
housing counseling assistance</header><text display-inline="no-display-inline">Section 106(a) of the
<act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of
1968 (12 U.S.C. 1701x(a)(3)) is amended by adding at the end the following new
paragraph:</text>
<quoted-block act-name="Housing" id="H8A29050916C24DD99244DBCA57DE9319">
<paragraph id="H192B1B0C572A4F0AB0694D38D149ED31" indent="up1"><enum>(4)</enum><header>Homeownership and rental counseling
assistance</header>
<subparagraph id="HCD4BB868C86C4379AA4614B8EA712183"><enum>(A)</enum><header>In general</header><text>The
Secretary shall make financial assistance available under this paragraph to
States, units of general local governments, and nonprofit organizations
providing homeownership or rental counseling (as such terms are defined in
subsection (g)(1)).</text>
</subparagraph><subparagraph id="H3D8F3C0EA37840A4958BB6F25FC5C73E"><enum>(B)</enum><header>Qualified entities</header><text>The
Secretary shall establish standards and guidelines for eligibility of
organizations (including governmental and nonprofit organizations) to receive
assistance under this paragraph.</text>
</subparagraph><subparagraph id="HA82B075AED704ECABE6ED2140010C513"><enum>(C)</enum><header>Distribution</header><text>Assistance
made available under this paragraph shall be distributed in a manner that
encourages efficient and successful counseling programs.</text>
</subparagraph><subparagraph id="H2CC99E534F8941D5A1FD69F785741702"><enum>(D)</enum><header>Authorization of
appropriations</header><text>There are authorized to be appropriated
$45,000,000 for each of fiscal years 2009 through 2012 for—</text>
<clause id="HF0A800142B8C47ACAF9924A5908FC568"><enum>(i)</enum><text>the operations of the Office of
Housing Counseling of the Department of Housing and Urban Development;</text>
</clause><clause id="HE39D6D90FAF440DD9876DD025B9B2B67"><enum>(ii)</enum><text>the responsibilities of the
Secretary under paragraphs (2) through (5) of subsection (g); and</text>
</clause><clause id="HF98EA307C5CD473BB9C3FBE3D799BAE4"><enum>(iii)</enum><text>assistance pursuant to this
paragraph for entities providing homeownership and rental
counseling.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HC85CC25DA4554E8C80F094CA5F6F3784"><enum>405.</enum><header>Requirements to
use HUD-certified counselors under HUD programs</header><text display-inline="no-display-inline">Section 106(e) of the
<act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of
1968 (12 U.S.C. 1701x(e)) is amended—</text>
<paragraph id="HCF867FC0EE0E470884BD0152CD00729E"><enum>(1)</enum><text>by striking
paragraph (1) and inserting the following new paragraph:</text>
<quoted-block id="H1BAA5AB12DE5469DAD034C94CBE83D7C">
<paragraph id="HFDEF751C9AD0401C80DC16374D3925EE"><enum>(1)</enum><header>Requirement for
assistance</header><text>An organization may not receive assistance for
counseling activities under subsection (a)(1)(iii), (a)(2), (a)(4), (c), or (d)
of this section, or under section 101(e), unless the organization, or the
individuals through which the organization provides such counseling, has been
certified by the Secretary under this subsection as competent to provide such
counseling.</text>
</paragraph><after-quoted-block>;</after-quoted-block></quoted-block>
</paragraph><paragraph id="HD63777A0DDC94998812FC6A218CE2124"><enum>(2)</enum><text>in paragraph
(2)—</text>
<subparagraph id="H3DC990EA655947A99065B9006395F93"><enum>(A)</enum><text>by inserting
<quote>and for certifying organizations</quote> before the period at the end of
the first sentence; and</text>
</subparagraph><subparagraph id="H9FACC15DD2474DF283D030CA8E19F7BE"><enum>(B)</enum><text>in the second
sentence by striking <quote>for certification</quote> and inserting <quote>,
for certification of an organization, that each individual through which the
organization provides counseling shall demonstrate, and, for certification of
an individual,</quote>;</text>
</subparagraph></paragraph><paragraph id="H3D9CB96DD23B4585AAC07F013820EEBC"><enum>(3)</enum><text>in paragraph (3),
by inserting <quote>organizations and</quote> before
<quote>individuals</quote>;</text>
</paragraph><paragraph id="H9F8C3E29406843978E839B3C9D03EC1C"><enum>(4)</enum><text>by redesignating
paragraph (3) as paragraph (5); and</text>
</paragraph><paragraph id="HDEE41BF3630D4A2ABBF73DD47DDE3F94"><enum>(5)</enum><text>by inserting after
paragraph (2) the following new paragraphs:</text>
<quoted-block id="HB453B2B7E4804561A813F754C4E2ADBE">
<paragraph id="H89D7FE8E9B1B4E82B5C36C6007921F8"><enum>(3)</enum><header>Requirement under
hud programs</header><text>Any homeownership counseling or rental housing
counseling (as such terms are defined in subsection (g)(1)) required under, or
provided in connection with, any program administered by the Department of
Housing and Urban Development shall be provided only by organizations or
counselors certified by the Secretary under this subsection as competent to
provide such counseling.</text>
</paragraph><paragraph id="HCA1BDC00F420441A8054AE99708FF451"><enum>(4)</enum><header>Outreach</header><text>The
Secretary shall take such actions as the Secretary considers appropriate to
ensure that individuals and organizations providing homeownership or rental
housing counseling are aware of the certification requirements and standards of
this subsection and of the training and certification programs under subsection
(f).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></section><section commented="no" id="H74DC74B91C9E42AC96F9C09921B5DB43"><enum>406.</enum><header>Study of
defaults and foreclosures</header><text display-inline="no-display-inline">The
Secretary of Housing and Urban Development shall conduct an extensive study of
the root causes of default and foreclosure of home loans, using as much
empirical data as are available. The study shall also examine the role of
escrow accounts in helping prime and nonprime borrowers to avoid defaults and
foreclosures. Not later than 12 months after the date of the enactment of this
Act, the Secretary shall submit to the Congress a preliminary report regarding
the study. Not later than 24 months after such date of enactment, the Secretary
shall submit a final report regarding the results of the study, which shall
include any recommended legislation relating to the study, and recommendations
for best practices and for a process to identify populations that need
counseling the most.</text>
</section><section id="H37BDFE4538834F42B738CF1296D182C7"><enum>407.</enum><header>Definitions for
counseling-related programs</header><text display-inline="no-display-inline">Section 106 of the
<act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of
1968 (12 U.S.C. 1701x), as amended by the preceding provisions of this title,
is further amended by adding at the end the following new subsection:</text>
<quoted-block act-name="Housing" id="H5B61FA1EF2914256858C2F7E76ABF62F">
<subsection id="H52293D43BE74462FB950937D6ECC1A"><enum>(h)</enum><header>Definitions</header><text>For
purposes of this section:</text>
<paragraph id="HD3B33C4CC0884BA7969DFEB6206F69D2"><enum>(1)</enum><header>Nonprofit
organization</header><text>The term <term>nonprofit organization</term> has the
meaning given such term in section 104(5) of the
<act-name parsable-cite="CGNHA">Cranston-Gonzalez National Affordable Housing
Act</act-name> (42 U.S.C. 12704(5)), except that subparagraph (D) of such
section shall not apply for purposes of this section.</text>
</paragraph><paragraph id="H0D4ABD5ED8E4412A8FD8FB200327D49C"><enum>(2)</enum><header>State</header><text>The
term <term>State</term> means each of the several States, the Commonwealth of
Puerto Rico, the District of Columbia, the Commonwealth of the Northern Mariana
Islands, Guam, the Virgin Islands, American Samoa, the Trust Territories of the
Pacific, or any other possession of the United States.</text>
</paragraph><paragraph id="HC3A2087E8F0F4493AB82002400C868E6"><enum>(3)</enum><header>Unit of general
local government</header><text>The term <term>unit of general local
government</term> means any city, county, parish, town, township, borough,
village, or other general purpose political subdivision of a
State.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HCC1CF91BA23E458DA6C96B12466C2D73"><enum>408.</enum><header>Updating and
simplification of mortgage information booklet</header><text display-inline="no-display-inline">Section 5 of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2604) is amended—</text>
<paragraph id="HEFC6CC5CD2FB4E12BFBFD95397A481B"><enum>(1)</enum><text>in
the section heading, by striking <quote><header-in-text level="section" style="traditional">special</header-in-text></quote> and inserting
<quote><header-in-text level="section" style="traditional">home
buying</header-in-text></quote>;</text>
</paragraph><paragraph id="HFD085943C3794615B51105C6B6698E44"><enum>(2)</enum><text>by striking
subsections (a) and (b) and inserting the following new subsections:</text>
<quoted-block id="H81F7A68CE9994662B44FECC370ED7329">
<subsection id="H8157CE77D65C448A889730B859849503"><enum>(a)</enum><header>Preparation and
distribution</header><text>The Secretary shall prepare, at least once every 5
years, a booklet to help consumers applying for federally related mortgage
loans to understand the nature and costs of real estate settlement services.
The Secretary shall prepare the booklet in various languages and cultural
styles, as the Secretary determines to be appropriate, so that the booklet is
understandable and accessible to homebuyers of different ethnic and cultural
backgrounds. The Secretary shall distribute such booklets to all lenders that
make federally related mortgage loans. The Secretary shall also distribute to
such lenders lists, organized by location, of homeownership counselors
certified under section 106(e) of the <act-name parsable-cite="HUDA">Housing
and Urban Development Act</act-name> of 1968 (12 U.S.C. 1701x(e)) for use in
complying with the requirement under subsection (c) of this section.</text>
</subsection><subsection id="H3D76B2BAC6864D90AB11B9B3CC1D4D84"><enum>(b)</enum><header>Contents</header><text>Each
booklet shall be in such form and detail as the Secretary shall prescribe and,
in addition to such other information as the Secretary may provide, shall
include in plain and understandable language the following information:</text>
<paragraph id="H9E5C2B18585E4CD38D146F8BCD7FDFAD"><enum>(1)</enum><text>A description and
explanation of the nature and purpose of the costs incident to a real estate
settlement or a federally related mortgage loan. The description and
explanation shall provide general information about the mortgage process as
well as specific information concerning, at a minimum—</text>
<subparagraph id="HC98A30716C00473FAFE617E9412C6FF"><enum>(A)</enum><text>balloon
payments;</text>
</subparagraph><subparagraph id="HDC4AC20D33E94F66BFF355FE0D0623F"><enum>(B)</enum><text>prepayment
penalties; and</text>
</subparagraph><subparagraph id="HBEDDE71100E247AC802067FC37548E6C"><enum>(C)</enum><text>the trade-off
between closing costs and the interest rate over the life of the loan.</text>
</subparagraph></paragraph><paragraph id="H363E07A8B51A4491AB23FB78BDB83074"><enum>(2)</enum><text>An explanation and
sample of the uniform settlement statement required by section 4.</text>
</paragraph><paragraph id="H6CB6B8E6C3A444318DA361A3426DE79D"><enum>(3)</enum><text>A list and
explanation of lending practices, including those prohibited by the Truth in
Lending Act or other applicable Federal law, and of other unfair practices and
unreasonable or unnecessary charges to be avoided by the prospective buyer with
respect to a real estate settlement.</text>
</paragraph><paragraph id="H9EA941AE462545F6868FA447E40027B0"><enum>(4)</enum><text>A list and
explanation of questions a consumer obtaining a federally related mortgage loan
should ask regarding the loan, including whether the consumer will have the
ability to repay the loan, whether the consumer sufficiently shopped for the
loan, whether the loan terms include prepayment penalties or balloon payments,
and whether the loan will benefit the borrower.</text>
</paragraph><paragraph id="HE4BE6AC8FF5A49E800427C4ED7AEC1CB"><enum>(5)</enum><text>An explanation of
the right of rescission as to certain transactions provided by sections 125 and
129 of the Truth in Lending Act.</text>
</paragraph><paragraph id="H39CF67FA6EF240A2BADAA9082BD7C019"><enum>(6)</enum><text>A brief
explanation of the nature of a variable rate mortgage and a reference to the
booklet entitled <quote>Consumer Handbook on Adjustable Rate Mortgages</quote>,
published by the Board of Governors of the Federal Reserve System pursuant to
section 226.19(b)(1) of title 12, Code of Federal Regulations, or to any
suitable substitute of such booklet that such Board of Governors may
subsequently adopt pursuant to such section.</text>
</paragraph><paragraph id="H98D50CDDD64E4FBC818FFDE508D2E900"><enum>(7)</enum><text>A brief
explanation of the nature of a home equity line of credit and a reference to
the pamphlet required to be provided under section 127A of the Truth in Lending
Act.</text>
</paragraph><paragraph id="HDE7C70DBE5D341EB8153A8A502819E20"><enum>(8)</enum><text>Information about
homeownership counseling services made available pursuant to section 106(a)(4)
of the <act-name parsable-cite="HUDA">Housing and Urban Development
Act</act-name> of 1968 (12 U.S.C. 1701x(a)(4)), a recommendation that the
consumer use such services, and notification that a list of certified providers
of homeownership counseling in the area, and their contact information, is
available.</text>
</paragraph><paragraph id="HAECDC05DB87C4D86A4A7E568F1DBD6C"><enum>(9)</enum><text>An explanation of
the nature and purpose of escrow accounts when used in connection with loans
secured by residential real estate and the requirements under section 10 of
this Act regarding such accounts.</text>
</paragraph><paragraph id="H1D6077C367C84DC488EF1F922677671F"><enum>(10)</enum><text>An explanation of
the choices available to buyers of residential real estate in selecting persons
to provide necessary services incidental to a real estate settlement.</text>
</paragraph><paragraph id="H403C6CA9F36941DFB6943574E27FF943"><enum>(11)</enum><text>An explanation of
a consumer’s responsibilities, liabilities, and obligations in a mortgage
transaction.</text>
</paragraph><paragraph id="H5A5EF766E0504C788CB8CA8DA4C73FB"><enum>(12)</enum><text>An explanation of
the nature and purpose of real estate appraisals, including the difference
between an appraisal and a home inspection.</text>
</paragraph><paragraph id="H41F2E81EB34F40BD97154ED1B1E1DA93"><enum>(13)</enum><text>Notice that the
Office of Housing of the Department of Housing and Urban Development has made
publicly available a brochure regarding loan fraud and a World Wide Web address
and toll-free telephone number for obtaining the brochure.</text>
</paragraph><continuation-text continuation-text-level="subsection">The
booklet prepared pursuant to this section shall take into consideration
differences in real estate settlement procedures that may exist among the
several States and territories of the United States and among separate
political subdivisions within the same State and
territory.</continuation-text></subsection><after-quoted-block>;</after-quoted-block></quoted-block>
</paragraph><paragraph id="HE39436A408B841ECA812281E95277C64"><enum>(3)</enum><text>in subsection (c),
by inserting at the end the following new sentence: <quote>Each lender shall
also include with the booklet a reasonably complete or updated list of
homeownership counselors who are certified pursuant to section 106(e) of the
<act-name parsable-cite="HUDA">Housing and Urban Development Act</act-name> of
1968 (12 U.S.C. 1701x(e)) and located in the area of the lender.</quote>;
and</text>
</paragraph><paragraph id="H4A1AA92162FC4916BF66E6C0C1FCA2AC"><enum>(4)</enum><text>in subsection (d),
by inserting after the period at the end of the first sentence the following:
<quote>The lender shall provide the HUD-issued booklet in the version that is
most appropriate for the person receiving it.</quote>.</text>
</paragraph></section><enum>V</enum><header>Mortgage
Servicing</header>
<section display-inline="no-display-inline" id="HFCD689C6B49946A681EFACD79061B148" section-type="subsequent-section"><enum>501.</enum><header>Escrow and impound
accounts relating to certain consumer credit transactions</header>
<subsection id="H60FC59259D39404C82A48EBE3BE8F96D"><enum>(a)</enum><header>In
general</header><text>Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et
seq.) is amended by inserting after section 129C (as added by section 201) the
following new section:</text>
<quoted-block display-inline="no-display-inline" id="HBD28FCAE0B494C419432665294B7CA31" style="OLC">
<section id="HAD327521276444EB9B5E5405337DE3D"><enum>129D.</enum><header>Escrow or
impound accounts relating to certain consumer credit transactions</header>
<subsection id="H6B6A99C1401C485DB92D92189B791EAE"><enum>(a)</enum><header>In
general</header><text>Except as provided in subsection (b) or (c), a creditor,
in connection with the formation or consummation of a consumer credit
transaction secured by a first lien on the principal dwelling of the consumer,
other than a consumer credit transaction under an open end credit plan or a
reverse mortgage, shall establish, at the time of the consummation of such
transaction, an escrow or impound account for the payment of taxes and hazard
insurance, and, if applicable, flood insurance, mortgage insurance, ground
rents, and any other required periodic payments or premiums with respect to the
property or the loan terms, as provided in, and in accordance with, this
section.</text>
</subsection><subsection id="H9A2CCF763508436C86A33DF722AC789F"><enum>(b)</enum><header>When
required</header><text>No impound, trust, or other type of account for the
payment of property taxes, insurance premiums, or other purposes relating to
the property may be required as a condition of a real property sale contract or
a loan secured by a first deed of trust or mortgage on the principal dwelling
of the consumer, other than a consumer credit transaction under an open end
credit plan or a reverse mortgage, except when—</text>
<paragraph id="H94A0CA6730CB4B4BB35B567DDD3BFEF6"><enum>(1)</enum><text>any such impound,
trust, or other type of escrow or impound account for such purposes is required
by Federal or State law;</text>
</paragraph><paragraph id="H63B1756D19A44EE58FA3394FBECEB08E"><enum>(2)</enum><text>a loan is made,
guaranteed, or insured by a State or Federal governmental lending or insuring
agency;</text>
</paragraph><paragraph id="H3B4ED66E3BC147D9AA4D4B23C6598452"><enum>(3)</enum><text>the consumer’s
debt-to-income ratio at the time the home mortgage is established taking into
account income from all sources including the consumer’s employment exceeds 50
percent;</text>
</paragraph><paragraph id="H96FA138C8F8E439CA6B67269904CC96F"><enum>(4)</enum><text>the transaction is
secured by a first mortgage or lien on the consumer’s principal dwelling and
the annual percentage rate on the credit, at the time of consummation of the
transaction, will exceed by more than 3.0 percentage points the yield on
Treasury securities having comparable periods of maturity on the 15th day of
the month immediately preceding the month in which the application of the
extension of credit is received by the creditor;</text>
</paragraph><paragraph id="HD5CA04C3B91D4153B826A9F3CBE075BB"><enum>(5)</enum><text>a consumer obtains
a mortgage referred to in section 103(aa);</text>
</paragraph><paragraph id="H11C9B8AB710D4331A1C3E85508A32776"><enum>(6)</enum><text>the original
principal amount of such loan at the time of consummation of the transaction
is—</text>
<subparagraph id="HF4F066BB6C3C44458F9E5B2CE4FD00CA"><enum>(A)</enum><text>90 percent or more
of the sale price, if the property involved is purchased with the proceeds of
the loan; or</text>
</subparagraph><subparagraph id="H1E808A5552A444AFA0BE828DC58B5D63"><enum>(B)</enum><text>90 percent or more
of the appraised value of the property securing the loan;</text>
</subparagraph></paragraph><paragraph id="H6016118B340A40D384EA2DB2FA012711"><enum>(7)</enum><text>the combined
principal amount of all loans secured by the real property exceeds 95 percent
of the appraised value of the property securing the loans at the time of
consummation of the last mortgage transaction;</text>
</paragraph><paragraph id="H841276AB08054807926807A4EBDDF778"><enum>(8)</enum><text display-inline="yes-display-inline">the consumer was the subject of a
proceeding under title 11, United States Code, at any time during the 7-year
period preceding the date of the transaction (as determined on the basis of the
date of entry of the order for relief or the date of adjudication, as the case
may be, with respect to such proceeding and included in a consumer report on
the consumer under the Fair Credit Reporting Act); or</text>
</paragraph><paragraph id="HCC7EB65FA4544E4CA44CADA37BA21D18"><enum>(9)</enum><text>so required by the
Board pursuant to regulation.</text>
</paragraph></subsection><subsection id="HFB35FEB917964759BD82647D11C9BA4E"><enum>(c)</enum><header>Duration of
mandatory escrow or impound account</header><text>An escrow or impound account
established pursuant to subsection (b), shall remain in existence for a minimum
period of 5 years and until such borrower has sufficient equity in the dwelling
securing the consumer credit transaction so as to no longer be required to
maintain private mortgage insurance, or such other period as may be provided in
regulations to address situations such as borrower delinquency, unless the
underlying mortgage establishing the account is terminated.</text>
</subsection><subsection id="HF7D652CD7F884C479BA15871CA9B401"><enum>(d)</enum><header>Clarification on
escrow accounts for loans not meeting statutory test</header><text>For
mortgages not covered by the requirements of subsection (b), no provision of
this section shall be construed as precluding the establishment of an impound,
trust, or other type of account for the payment of property taxes, insurance
premiums, or other purposes relating to the property—</text>
<paragraph id="HB3C40E7D661E4B7FBA3DC229C5BF4100"><enum>(1)</enum><text>on terms mutually
agreeable to the parties to the loan;</text>
</paragraph><paragraph id="HE940BC9C4D354BBFA0A7B2569473B1BC"><enum>(2)</enum><text>at the discretion
of the lender or servicer, as provided by the contract between the lender or
servicer and the borrower; or</text>
</paragraph><paragraph id="H72032C107F7D421E9CC34874B37D74E1"><enum>(3)</enum><text display-inline="yes-display-inline">pursuant to the requirements for the
escrowing of flood insurance payments for regulated lending institutions in
section 102(d) of the Flood Disaster Protection Act of 1973.</text>
</paragraph></subsection><subsection id="H9B12B40C39C04D20A8194861F7000088"><enum>(e)</enum><header>Administration
of mandatory escrow or impound accounts</header><text></text>
<paragraph id="HDEE39C3B9BAA4A708B9D992900962033"><enum>(1)</enum><header>In
general</header><text>Except as may otherwise be provided for in this title or
in regulations prescribed by the Board, escrow or impound accounts established
pursuant to subsection (b) shall be established in a federally insured
depository institution.</text>
</paragraph><paragraph id="HE3D279D828624F1EA741C348EC7635B"><enum>(2)</enum><header>Administration</header><text>Except
as provided in this section or regulations prescribed under this section, an
escrow or impound account subject to this section shall be administered in
accordance with—</text>
<subparagraph id="H0F5CF5BC59C94B6A8C6270E4DDB8B84"><enum>(A)</enum><text>the Real Estate
Settlement Procedures Act of 1974 and regulations prescribed under such
Act;</text>
</subparagraph><subparagraph id="H9237FE24A819492300DCA7FBFBEB8BB2"><enum>(B)</enum><text>the Flood Disaster
Protection Act of 1973 and regulations prescribed under such Act; and</text>
</subparagraph><subparagraph id="HFD1635C3CBFA47E292CEF21D4BF4CD99"><enum>(C)</enum><text>the law of the
State, if applicable, where the real property securing the consumer credit
transaction is located.</text>
</subparagraph></paragraph><paragraph id="HFF992E7B973640FDBE9D7C9493822625"><enum>(3)</enum><header>Applicability of
payment of interest</header><text>If prescribed by applicable State or Federal
law, each creditor shall pay interest to the consumer on the amount held in any
impound, trust, or escrow account that is subject to this section in the manner
as prescribed by that applicable State or Federal law.</text>
</paragraph><paragraph id="H6CCA8356FC56421584BB008177614100"><enum>(4)</enum><header>Penalty
coordination with RESPA</header><text display-inline="yes-display-inline">Any
action or omission on the part of any person which constitutes a violation of
the Real Estate Settlement Procedures Act of 1974 or any regulation prescribed
under such Act for which the person has paid any fine, civil money penalty, or
other damages shall not give rise to any additional fine, civil money penalty,
or other damages under this section, unless the action or omission also
constitutes a direct violation of this section.</text>
</paragraph></subsection><subsection id="HAD074FF636E14237956FE4EF6B586C5F"><enum>(f)</enum><header>Disclosures
relating to mandatory escrow or impound account</header><text>In the case of
any impound, trust, or escrow account that is subject to this section, the
creditor shall disclose by written notice to the consumer at least 3 business
days before the consummation of the consumer credit transaction giving rise to
such account or in accordance with timeframes established in prescribed
regulations the following information:</text>
<paragraph id="HFF3DBAF992CC459D856E89D800807CA3"><enum>(1)</enum><text>The fact that an
escrow or impound account will be established at consummation of the
transaction.</text>
</paragraph><paragraph id="HEA6CC8D97EBB470F00E6F9648F92B521"><enum>(2)</enum><text>The amount
required at closing to initially fund the escrow or impound account.</text>
</paragraph><paragraph id="HC865AB9EF81A4B679698E300F501D25F"><enum>(3)</enum><text>The amount, in the
initial year after the consummation of the transaction, of the estimated taxes
and hazard insurance, including flood insurance, if applicable, and any other
required periodic payments or premiums that reflects, as appropriate, either
the taxable assessed value of the real property securing the transaction,
including the value of any improvements on the property or to be constructed on
the property (whether or not such construction will be financed from the
proceeds of the transaction) or the replacement costs of the property.</text>
</paragraph><paragraph id="H772526A7912A42FF9BDCFFC6656CB22C"><enum>(4)</enum><text>The estimated
monthly amount payable to be escrowed for taxes, hazard insurance (including
flood insurance, if applicable) and any other required periodic payments or
premiums.</text>
</paragraph><paragraph id="HCAF5599807AD4DB5BD39077222EA3EF5"><enum>(5)</enum><text>The fact that, if
the consumer chooses to terminate the account at the appropriate time in the
future, the consumer will become responsible for the payment of all taxes,
hazard insurance, and flood insurance, if applicable, as well as any other
required periodic payments or premiums on the property unless a new escrow or
impound account is established.</text>
</paragraph></subsection><subsection id="HB8317D92FB0743F8B58780C624D615A1"><enum>(g)</enum><header>Definitions</header><text>For
purposes of this section, the following definitions shall apply:</text>
<paragraph id="H9227CCF01F2D41AD88B4D7FA7573393F"><enum>(1)</enum><header>Flood
insurance</header><text>The term <quote>flood insurance</quote> means flood
insurance coverage provided under the national flood insurance program pursuant
to the National Flood Insurance Act of 1968.</text>
</paragraph><paragraph id="H3FFDBB24B33849269C4D8D1854B54FDD"><enum>(2)</enum><header>Hazard
insurance</header><text>The term <quote>hazard insurance</quote> shall have the
same meaning as provided for <quote>hazard insurance</quote>, <quote>casualty
insurance</quote>, <quote>homeowner’s insurance</quote>, or other similar term
under the law of the State where the real property securing the consumer credit
transaction is
located.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HBF5ADF1A012B4FE5B112F92E2E35AE7D"><enum>(b)</enum><header>Implementation</header>
<paragraph id="H0E7EED2581524EB09B0559C653866563"><enum>(1)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Board of Governors of the Federal
Reserve System, the Comptroller of the Currency, the Director of the Office of
Thrift Supervision, the Federal Deposit Insurance Corporation, the National
Credit Union Administration Board, (hereafter in this Act referred to as the
<quote>Federal banking agencies</quote>) and the Federal Trade Commission shall
prescribe, in final form, such regulations as determined to be necessary to
implement the amendments made by subsection (a) before the end of the 180-day
period beginning on the date of the enactment of this Act.</text>
</paragraph><paragraph id="H2229AA94559A498D83CFB861305499DA"><enum>(2)</enum><header>Effective
date</header><text>The amendments made by subsection (a) shall only apply to
covered mortgage loans consummated after the end of the 1-year period beginning
on the date of the publication of final regulations in the Federal
Register.</text>
</paragraph></subsection><subsection id="H49039F89560444C9817D513EE351C250"><enum>(c)</enum><header>Clerical
Amendment</header><text display-inline="yes-display-inline">The table of
sections for chapter 2 of the Truth in Lending Act is amended by inserting
after the item relating to section 129C (as added by section 201) the following
new item:</text>
<quoted-block display-inline="no-display-inline" id="H8C6ED678601E4E879DCAF2E364DC98AD" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">129D. Escrow or impound accounts relating
to certain consumer credit
transactions.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="H8D7245486FDC4B2C8F07D008D56D12F"><enum>502.</enum><header>Disclosure
notice required for consumers who waive escrow services</header>
<subsection id="H7A3DCBB5080F4E6CBA5DFBE89E001EB1"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 129D of the
Truth in Lending Act (as added by section 501) is amended by adding at the end
the following new subsection:</text>
<quoted-block id="HF5E48F6F7B334247AAE9C5B14200EA59" style="OLC">
<subsection id="H674715C37A7D47B9ACFEA17D92CB235C"><enum>(h)</enum><header>Disclosure
notice required for consumers who waive escrow services</header><text></text>
<paragraph id="H9EC6D2206A0D4867B8CF7E81F3A9AC1B"><enum>(1)</enum><header>In
general</header><text>If—</text>
<subparagraph id="H7154BB8CD67C453CA7B323E53BFAEA"><enum>(A)</enum><text>an impound, trust,
or other type of account for the payment of property taxes, insurance premiums,
or other purposes relating to real property securing a consumer credit
transaction is not established in connection with the transaction; or</text>
</subparagraph><subparagraph id="HD48EF4156FCF494596E6926B388DB38B"><enum>(B)</enum><text>a consumer
chooses, at any time after such an account is established in connection with
any such transaction and in accordance with any statute, regulation, or
contractual agreement, to close such account,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">the
creditor or servicer shall provide a timely and clearly written disclosure to
the consumer that advises the consumer of the responsibilities of the consumer
and implications for the consumer in the absence of any such account.</continuation-text></paragraph><paragraph id="H2CE04ADD44D8413788F44C6E6E35578B"><enum>(2)</enum><header>Disclosure
requirements</header><text>Any disclosure provided to a consumer under
paragraph (1) shall include the following:</text>
<subparagraph id="H13A2CA5F286C45178D7647302EE56CF8"><enum>(A)</enum><text>Information
concerning any applicable fees or costs associated with either the
non-establishment of any such account at the time of the transaction, or any
subsequent closure of any such account.</text>
</subparagraph><subparagraph id="H201FFC0D2B3E420B87D090A4100AD5C"><enum>(B)</enum><text>A clear and
prominent notice that the consumer is responsible for personally and directly
paying the non-escrowed items, in addition to paying the mortgage loan payment,
in the absence of any such account, and the fact that the costs for taxes,
insurance, and related fees can be substantial.</text>
</subparagraph><subparagraph id="H605C6D9DDDD84B1291E23C1E00780555"><enum>(C)</enum><text>A clear
explanation of the consequences of any failure to pay non-escrowed items,
including the possible requirement for the forced placement of insurance by the
creditor or servicer and the potentially higher cost (including any potential
commission payments to the servicer) or reduced coverage for the consumer in
the event of any such creditor-placed
insurance.</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H8835058030244597B70028AC9864C5F4"><enum>(b)</enum><header>Implementation</header>
<paragraph id="H8C1C0A42AD6C4921A2583D5B48B5CA78"><enum>(1)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Federal banking agencies and the
Federal Trade Commission shall prescribe, in final form, such regulations as
such agencies determine to be necessary to implement the amendments made by
subsection (a) before the end of the 180-day period beginning on the date of
the enactment of this Act.</text>
</paragraph><paragraph id="H892EBC8E7B654A4CA06095D726B6D92"><enum>(2)</enum><header>Effective
date</header><text>The amendments made by subsection (a) shall only apply in
accordance with the regulations established in paragraph (1) and beginning on
the date occurring 180-days after the date of the publication of final
regulations in the Federal Register.</text>
</paragraph></subsection></section><section id="H504584EDDB8E420BA139AA1FA3AFB5B4"><enum>503.</enum><header>Real Estate
Settlement Procedures Act of 1974 amendments</header>
<subsection id="H616CC58297E545BC8EA1CABFCBEEB50"><enum>(a)</enum><header>Servicer
prohibitions</header><text>Section 6 of the Real Estate Settlement Procedures
Act of 1974 (12 U.S.C. 2605) is amended by adding at the end the following new
subsections:</text>
<quoted-block id="H17BB7C5653444349B811689C94EDCF4" style="OLC">
<subsection id="H01DF0018C5C344E38142AFE071F2DC42"><enum>(k)</enum><header>Servicer
prohibitions</header>
<paragraph id="HB0B4CC65F6CA43A1B4D5BF9504DCA59"><enum>(1)</enum><header>In
general</header><text>A servicer of a federally related mortgage shall
not—</text>
<subparagraph id="H007F63A48C134D959B5F89E3FE6FC12"><enum>(A)</enum><text>obtain force-placed
hazard insurance unless there is a reasonable basis to believe the borrower has
failed to comply with the loan contract’s requirements to maintain property
insurance;</text>
</subparagraph><subparagraph id="H1BE100BE11DA4F2084765C45E0CBE9B2"><enum>(B)</enum><text>charge fees for
responding to valid qualified written requests (as defined in regulations which
the Secretary shall prescribe) under this section;</text>
</subparagraph><subparagraph id="H640DA8E54CF04D2792DDC4FB6122293D"><enum>(C)</enum><text>fail to take
timely action to respond to a borrower’s requests to correct errors relating to
allocation of payments, final balances for purposes of paying off the loan, or
avoiding foreclosure, or other standard servicer’s duties;</text>
</subparagraph><subparagraph id="HC5DF9F7032BE45BF94763FF7E64E1239"><enum>(D)</enum><text>fail to respond
within 10 business days to a request from a borrower to provide the identity,
address, and other relevant contact information about the owner assignee of the
loan; or</text>
</subparagraph><subparagraph id="HEF146DB53C6B4DF9812F092821B63968"><enum>(E)</enum><text>fail to comply
with any other obligation found by the Secretary, by regulation, to be
appropriate to carry out the consumer protection purposes of this Act.</text>
</subparagraph></paragraph><paragraph id="HF47A649CF9D84A9085A6E2005E91557B"><enum>(2)</enum><header>Force-placed
insurance defined</header><text>For purposes of this subsection and subsections
(l) and (m), the term <quote>force-placed insurance</quote> means hazard
insurance coverage obtained by a servicer of a federally related mortgage when
the borrower has failed to maintain or renew hazard insurance on such property
as required of the borrower under the terms of the mortgage.</text>
</paragraph></subsection><subsection id="HB302232CC99540A9B83774A6D0C4079"><enum>(l)</enum><header>Requirements for
force-placed insurance</header><text>A servicer of a federally related mortgage
shall not be construed as having a reasonable basis for obtaining force-placed
insurance unless the requirements of this subsection have been met.</text>
<paragraph id="H1043E069D19246119404E388C600FA86"><enum>(1)</enum><header>Written notices
to borrower</header><text>A servicer may not impose any charge on any borrower
for force-placed insurance with respect to any property securing a federally
related mortgage unless—</text>
<subparagraph id="H764388C1F8DC4960ACB9B10073052B81"><enum>(A)</enum><text display-inline="yes-display-inline">the servicer has sent, by first-class mail,
a written notice to the borrower containing—</text>
<clause id="H3E8954C527F045D883E7E005A02F5E34"><enum>(i)</enum><text>a
reminder of the borrower’s obligation to maintain hazard insurance on the
property securing the federally related mortgage;</text>
</clause><clause id="H0AF20B6C06F546F1A8CA81EDEB7D009B"><enum>(ii)</enum><text>a
statement that the servicer does not have evidence of insurance coverage of
such property;</text>
</clause><clause id="HDC765CBDB2174E1388A32BE30159D196"><enum>(iii)</enum><text>a clear and
conspicuous statement of the procedures by which the borrower may demonstrate
that the borrower already has insurance coverage; and</text>
</clause><clause commented="no" id="H0E0F22726AA040D9AC02F39249A5C111"><enum>(iv)</enum><text display-inline="yes-display-inline">a statement that the servicer may obtain
such coverage at the borrower’s expense if the borrower does not provide such
demonstration of the borrower’s existing coverage in a timely manner;</text>
</clause></subparagraph><subparagraph id="H73DE01EE64A44842B1FDDFBD1C46789C"><enum>(B)</enum><text display-inline="yes-display-inline">the servicer has sent, by first-class mail,
a second written notice, at least 30 days after the mailing of the notice under
subparagraph (A) that contains all the information described in each clauses of
such subparagraph; and</text>
</subparagraph><subparagraph id="H34B6896C982149BE002478ABDBB541E6"><enum>(C)</enum><text>the servicer has
not received from the borrower any demonstration of hazard insurance coverage
for the property securing the mortgage by the end of the 15-day period
beginning on the date the notice under subparagraph (B) was sent by the
servicer.</text>
</subparagraph></paragraph><paragraph id="H20E229F6408E4BCA852E7872C496C6A7"><enum>(2)</enum><header>Sufficiency of
demonstration</header><text display-inline="yes-display-inline">A servicer of a
federally related mortgage shall accept any reasonable form of written
confirmation from a borrower of existing insurance coverage, which shall
include the existing insurance policy number along with the identity of, and
contact information for, the insurance company or agent.</text>
</paragraph><paragraph id="HC358D882EE164AD890F0F78851478F27"><enum>(3)</enum><header>Termination of
force-placed insurance</header><text display-inline="yes-display-inline">Within
15 days of the receipt by a servicer of confirmation of a borrower’s existing
insurance coverage, the servicer shall—</text>
<subparagraph commented="no" id="H37889AAF9F5D492BA341C80025B75443"><enum>(A)</enum><text>terminate the
force-placed insurance; and</text>
</subparagraph><subparagraph id="HCD34B74E6A414CB28B01447BAEA3742"><enum>(B)</enum><text>refund to the
consumer all force-placed insurance premiums paid by the borrower during any
period during which the borrower’s insurance coverage and the force-placed
insurance coverage were each in effect, and any related fees charged to the
consumer’s account with respect to the force-placed insurance during such
period.</text>
</subparagraph></paragraph><paragraph id="H51049ACBA3144CE19F246C58ADB97E9"><enum>(4)</enum><header>Clarification
with respect to Flood Disaster Protection Act</header><text display-inline="yes-display-inline">No provision of this section shall be
construed as prohibiting a servicer from providing simultaneous or concurrent
notice of a lack of flood insurance pursuant to section 102(e) of the Flood
Disaster Protection Act of 1973.</text>
</paragraph></subsection><subsection id="HEF9C73D1EE634670A28830D922D26655"><enum>(m)</enum><header>Limitations on
force-placed insurance charges</header><text>All charges for force-placed
insurance premiums shall be bona fide and reasonable in amount.</text>
</subsection><subsection id="H92D7AA79232443F28561925881151762"><enum>(n)</enum><header>Prompt crediting
of payments required</header>
<paragraph id="H6D96400F71D941FEA5A70086B2CE978F"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">All amounts received
by a lender or a servicer on a home loan at the address where the borrower has
been instructed to make payments shall be accepted and credited, or treated as
credited, on the business day received, to the extent that the borrower has
made the full contractual payment and has provided sufficient information to
credit the account.</text>
</paragraph><paragraph id="H17E9E913526C4575A2DE7E3E00C0E92C"><enum>(2)</enum><header>Scheduled
method</header><text display-inline="yes-display-inline">If a servicer uses the
scheduled method of accounting, any regularly scheduled payment made prior to
the scheduled due date shall be credited no later than the due date.</text>
</paragraph><paragraph id="HF444FB50B65F4EA1811B402B6B7C2B09"><enum>(3)</enum><header>Notice of
noncredit</header><text display-inline="yes-display-inline">If any payment is
received by a lender or a servicer on a home loan and not credited, or treated
as credited, the borrower shall be notified within 10 business days by mail at
the borrower’s last known address of the disposition of the payment, the reason
the payment was not credited, or treated as credited to the account, and any
actions necessary by the borrower to make the loan
current.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HC2C2C7B958B942A9BA00593299A290EE"><enum>(b)</enum><header>Increase in
penalty amounts</header><text>Section 6(f) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2605(f)) is amended—</text>
<paragraph id="H789155D48B384E47996493BC43E511A5"><enum>(1)</enum><text>in paragraphs
(1)(B) and (2)(B), by striking <quote>$1,000</quote> each place such term
appears and inserting <quote>$2,000</quote>; and</text>
</paragraph><paragraph id="H8BEC44E3D73147E58F7E752F7B837054"><enum>(2)</enum><text>in paragraph
(2)(B)(i), by striking <quote>$500,000</quote> and inserting
<quote>$1,000,000</quote>.</text>
</paragraph></subsection><subsection id="H07083A979F3E45A2993365ED4EDB007B"><enum>(c)</enum><header>Decrease in
response times</header><text>Section 6(e) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2605(e)) is amended—</text>
<paragraph id="HFA4607B26FEF435B91611D261C74EA38"><enum>(1)</enum><text>in paragraph
(1)(A), by striking <quote>20 days</quote> and inserting <quote>10
days</quote>;</text>
</paragraph><paragraph id="H9DAB2E7416E045F0BBB83E6C5F46C803"><enum>(2)</enum><text>in paragraph (2),
by striking <quote>60 days</quote> and inserting <quote>30 days</quote>;
and</text>
</paragraph><paragraph id="H28546D4153A441F397A55EF39B9EFF3"><enum>(3)</enum><text>by
adding at the end the following new paragraph:</text>
<quoted-block id="H42E59BC071854E04BA38C309DAA5AE39" style="OLC">
<paragraph id="H086B6D07F50A4E9A9E44ECEC94BBD8E1"><enum>(4)</enum><header>Limited
extension of response time</header><text>The 30-day period described in
paragraph (2) may be extended for not more than 30 days if, before the end of
such 30-day period, the servicer notifies the borrower of the extension and the
reasons for the delay in
responding.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H96B65A3496C840178869C3F2CEBECC89"><enum>(d)</enum><header>Requests for
payoff amounts</header><text>Section 6(e) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2605(e)) is amended by inserting after
paragraph (4) (as added by subsection (c) of this section) the following new
paragraph:</text>
<quoted-block id="H2C4ACA074F984DF998BB3CBBF70084FD" style="OLC">
<paragraph id="HDA31B8343C074384A48FC577CD991E62"><enum>(5)</enum><header>Requests for
payoff amounts</header><text>A creditor or servicer shall send a payoff balance
within 7 business days of the receipt of a written request for such balance
from or on behalf of the
borrower.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H03D28A3F07D847FB9440C6C493DC8B6"><enum>(e)</enum><header>Prompt refund of
escrow accounts upon payoff</header><text>Section 6(g) of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C. 2605(g)) is amended by adding at
the end the following new sentence: <quote>Any balance in any such account that
is within the servicer’s control at the time the loan is paid off shall be
promptly returned to the borrower within 20 business days or credited to a
similar account for a new mortgage loan to the borrower with the same
lender.</quote>.</text>
</subsection></section><section id="HF0E1C32176E741868C0579B83E2E397C"><enum>504.</enum><header>Mortgage
servicing studies required</header>
<subsection id="H1A8949DEF47846CC826E90CE00F605CB"><enum>(a)</enum><header>Mortgage
servicing practices</header><text></text>
<paragraph id="H8DE7CA9AF3BF4FB780F54CDF704E7100"><enum>(1)</enum><header>Study</header><text>The
Secretary of Housing and Urban Development, in consultation with the Federal
banking agencies, and the Federal Trade Commission, shall conduct a
comprehensive study on mortgage servicing practices and their potential for
fraud and abuse.</text>
</paragraph><paragraph id="HE0AD6CBC0D42414000752D2DBC820096"><enum>(2)</enum><header>Issues to be
included</header><text display-inline="yes-display-inline">In addition to other
issues the Secretary of Housing and Urban Development, the Federal banking
agencies, and the Federal Trade Commission may determine to be appropriate and
possibly pertinent to the study conducted under paragraph (1), the study shall
include the following issues:</text>
<subparagraph id="H301AC9A54FC4440C83173ED76FC309E9"><enum>(A)</enum><text>A survey of the
industry in order to examine the issue of the timely or effective posting of
payments by servicers.</text>
</subparagraph><subparagraph id="HDD3BE674FB05450EBB9E7D47A18B06A5"><enum>(B)</enum><text>The employment of
daily interest when payments are made after a due date.</text>
</subparagraph><subparagraph id="H7432756F4A124C3F992115A919A7F2B"><enum>(C)</enum><text>The charging of
late fees on the entire outstanding principal.</text>
</subparagraph><subparagraph id="H402ECA654DC54CF5BA6B00091732FA7B"><enum>(D)</enum><text>The charging of
interest on servicing fees.</text>
</subparagraph><subparagraph id="H75A1835EA38C46FFB28BA5B6DB41F118"><enum>(E)</enum><text>The utilization of
collection practices that failed to comply with the Fair Debt Collection
Practices Act.</text>
</subparagraph><subparagraph id="H5184F0990C7148400014714E74C600AB"><enum>(F)</enum><text>The charging of
prepayment penalties when not authorized by either the note or law.</text>
</subparagraph><subparagraph id="HC7D28DC5054145BFBBADB6BD00713206"><enum>(G)</enum><text>The employment of
unconscionable forbearance agreements.</text>
</subparagraph><subparagraph id="H0E954B02A7614BB7A6BA206600CD4082"><enum>(H)</enum><text>Foreclosure
abuses.</text>
</subparagraph></paragraph><paragraph id="H04559BD3D5134AF0A9533CAB54FE7679"><enum>(3)</enum><header>Report</header><text>Before
the end of the 12-month period beginning on the date of the enactment of this
Act, the Secretary of Housing and Urban Development shall submit a report on
the study conducted under this subsection to the Committee on Financial
Services of the House of Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate.</text>
</paragraph></subsection><subsection id="H43673DE7CFA54B358EC261BCFDBC6745"><enum>(b)</enum><header>Mortgage
servicing improvements</header><text></text>
<paragraph id="HD9CA7607CA0B40C1BFFC26EBFEE6F0B2"><enum>(1)</enum><header>Study</header><text>The
Secretary of Housing and Urban Development, in consultation with the Federal
banking agencies, and the Federal Trade Commission, shall conduct a
comprehensive study on means to improve the best practices of the mortgage
servicing industry, and Federal and State laws governing such industry.</text>
</paragraph><paragraph id="H736679D44D1B4E1EA1004EC4CA54E300"><enum>(2)</enum><header>Report</header><text>Before
the end of the 18-month period beginning on the date of the enactment of this
Act, the Secretary of Housing and Urban Development shall submit a report on
the study conducted under this subsection to the Committee on Financial
Services of the House of Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate, together with such recommendations for
administrative or legislative action as the Secretary, in consultation with the
Board and the Commission, may determine to be appropriate.</text>
</paragraph></subsection></section><section id="H9AB6801CDCCD4128A9F5693845DDBBE9"><enum>505.</enum><header>Escrows
included in repayment analysis</header>
<subsection id="H5EB12DA49FB941DFA8DB36A150BBE914"><enum>(a)</enum><header>In
general</header><text>Section 128(b) of the Truth in Lending Act (15 U.S.C.
1638(b)) is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H78F3E86FA47E43508288D3FC54D11EF" style="OLC">
<paragraph id="HEC4EAAD19B2741C7A671F2250C3D999"><enum>(4)</enum><header>Repayment
analysis required to include escrow payments</header>
<subparagraph id="HD1D28D114E9E4157A73CF3564F1FE8C2"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">In the case of any
consumer credit transaction secured by a first mortgage or lien on the
principal dwelling of the consumer, other than a consumer credit transaction
under an open end credit plan or a reverse mortgage, for which an impound,
trust, or other type of account has been or will be established in connection
with the transaction for the payment of property taxes, hazard and flood (if
any) insurance premiums, or other periodic payments or premiums with respect to
the property, the information required to be provided under subsection (a) with
respect to the number, amount, and due dates or period of payments scheduled to
repay the total of payments shall take into account the amount of any monthly
payment to such account for each such repayment in accordance with section
10(a)(2) of the Real Estate Settlement Procedures Act of 1974.</text>
</subparagraph><subparagraph display-inline="no-display-inline" id="H5A717000B39A4531B68147B51C7158D"><enum>(B)</enum><header>Assessment
value</header><text display-inline="yes-display-inline">The amount taken into
account under subparagraph (A) for the payment of property taxes, hazard and
flood (if any) insurance premiums, or other periodic payments or premiums with
respect to the property shall reflect the taxable assessed value of the real
property securing the transaction after the consummation of the transaction,
including the value of any improvements on the property or to be constructed on
the property (whether or not such construction will be financed from the
proceeds of the transaction), if known, and the replacement costs of the
property for hazard insurance, in the initial year after the
transaction.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><enum>VI</enum><header>Appraisal
Activities</header>
<section id="H180C9601378845F1A705F3F9FB548C3"><enum>601.</enum><header>Property
appraisal requirements</header><text display-inline="no-display-inline">Section
129 of the Truth in Lending Act (15 U.S.C. 1639) is amended by inserting after
subsection (u) (as added by section 303(f)) the following new
subsection:</text>
<quoted-block id="H3375EFAF26BE49B494621BE7FDAD807D" style="OLC">
<subsection id="HA8C83C999D5541F1AF841FB3186B9237"><enum>(v)</enum><header>Property
appraisal requirements</header><text></text>
<paragraph id="H0D65794FE3D941EFA4A0D552404C78DB"><enum>(1)</enum><header>In
general</header><text>A creditor may not extend credit in the form of a
mortgage referred to in section 103(aa) to any consumer without first obtaining
a written appraisal of the property to be mortgaged prepared in accordance with
the requirements of this subsection.</text>
</paragraph><paragraph id="H17982AD0D5CD408F897C0099914B6418"><enum>(2)</enum><header>Appraisal
requirements</header><text></text>
<subparagraph id="HE1AA6EA862F64798B78CC467EAE6C0B2"><enum>(A)</enum><header>Physical
property visit</header><text display-inline="yes-display-inline">An appraisal
of property to be secured by a mortgage referred to in section 103(aa) does not
meet the requirement of this subsection unless it is performed by a qualified
appraiser who conducts a physical property visit of the interior of the
mortgaged property.</text>
</subparagraph><subparagraph id="H14D8A891B7FC42208BA9A6C3963FF5C"><enum>(B)</enum><header>Second appraisal
under certain circumstances</header><text></text>
<clause id="H6EAE01F4280B4154959C588D1CAF5C77"><enum>(i)</enum><header>In
general</header><text display-inline="yes-display-inline">If the purpose of a
mortgage referred to in section 103(aa) is to finance the purchase or
acquisition of the mortgaged property from a person within 180 days of the
purchase or acquisition of such property by that person at a price that was
lower than the current sale price of the property, the creditor shall obtain a
second appraisal from a different qualified appraiser. The second appraisal
shall include an analysis of the difference in sale prices, changes in market
conditions, and any improvements made to the property between the date of the
previous sale and the current sale.</text>
</clause><clause id="H9A274BF578A04344B075997B6B154F27"><enum>(ii)</enum><header>No cost to
consumer</header><text>The cost of any second appraisal required under clause
(i) may not be charged to the consumer.</text>
</clause></subparagraph><subparagraph id="HF823AF73252249D881700829050057C"><enum>(C)</enum><header>Qualified
appraiser defined</header><text>For purposes of this subsection, the term
<quote>qualified appraiser</quote> means a person who—</text>
<clause id="HC17C280C03B0417AA736F9AF707B7F1D"><enum>(i)</enum><text>is
certified or licensed by the State in which the property to be appraised is
located; and</text>
</clause><clause id="HB381D2EF2DF5483FA5E4E4603C01D519"><enum>(ii)</enum><text>performs each
appraisal in conformity with the Uniform Standards of Professional Appraisal
Practice and title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, and the regulations prescribed under such title, as in
effect on the date of the appraisal.</text>
</clause></subparagraph></paragraph><paragraph id="H31E449A8CAAE49F2959CCE0152EEF946"><enum>(3)</enum><header>Free copy of
appraisal</header><text>A creditor shall provide 1 copy of each appraisal
conducted in accordance with this subsection in connection with a mortgage
referred to in section 103(aa) to the consumer without charge, and at least 3
days prior to the transaction closing date.</text>
</paragraph><paragraph id="HD082C647E158461FB1B65AD5C261070"><enum>(4)</enum><header>Consumer
notification</header><text>At the time of the initial mortgage application, the
consumer shall be provided with a statement by the creditor that any appraisal
prepared for the mortgage is for the sole use of the creditor, and that the
consumer may choose to have a separate appraisal conducted at their own
expense.</text>
</paragraph><paragraph id="HC389EBAEFE794328A16FA8B100527E87"><enum>(5)</enum><header>Violations</header><text>In
addition to any other liability to any person under this title, a creditor
found to have willfully failed to obtain an appraisal as required in this
subsection shall be liable to the consumer for the sum of
$2,000.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HD0E276C6D51E4834A9F308558529679"><enum>602.</enum><header>Unfair and
deceptive practices and acts relating to certain consumer credit
transactions</header>
<subsection id="H4CEE119178E64D22BB4CD6A74746084E"><enum>(a)</enum><header>In
general</header><text>Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et
seq.) is amended by inserting after section 129D (as added by section 501(a))
the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H7375E6713B924E8BB822A493DD561C2" style="OLC">
<section id="H45FC24BE5BC149FB8711D7938EF2A524"><enum>129E.</enum><header>Unfair and
deceptive practices and acts relating to certain consumer credit
transactions</header>
<subsection id="H918504C96361434C8DB616C7CED334FA"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">It shall be unlawful,
in providing any services for a consumer credit transaction secured by the
principal dwelling of the consumer, to engage in any unfair or deceptive act or
practice as described in or pursuant to regulations prescribed under this
section.</text>
</subsection><subsection id="H96312DDDB0914DF286872C4E290873C1"><enum>(b)</enum><header>Appraisal
independence</header><text>For purposes of subsection (a), unfair and deceptive
practices shall include—</text>
<paragraph id="HC5E5CE6481C14F81AA97E2EE94AE1DDD"><enum>(1)</enum><text>any appraisal of a
property offered as security for repayment of the consumer credit transaction
that is conducted in connection with such transaction in which a person with an
interest in the underlying transaction compensates, coerces, extorts, colludes,
instructs, induces, bribes, or intimidates a person conducting or involved in
an appraisal, or attempts, to compensate, coerce, extort, collude, instruct,
induce, bribe, or intimidate such a person, for the purpose of causing the
appraised value assigned, under the appraisal, to the property to be based on
any factor other than the independent judgment of the appraiser;</text>
</paragraph><paragraph id="H95F4896F727D4E04B900BC8FF091E44B"><enum>(2)</enum><text display-inline="yes-display-inline">mischaracterizing, or suborning any
mischaracterization of, the appraised value of the property securing the
extension of the credit;</text>
</paragraph><paragraph id="H00121A3898ED4D22A832D4C1AF006913"><enum>(3)</enum><text display-inline="yes-display-inline">seeking to influence an appraiser or
otherwise to encourage a targeted value in order to facilitate the making or
pricing of the transaction; and</text>
</paragraph><paragraph id="H99233652B9214274A53E4314102DFFB"><enum>(4)</enum><text>failing to timely
compensate an appraiser for a completed appraisal regardless of whether the
transaction closes.</text>
</paragraph></subsection><subsection id="H5D8869DCC9AE48F389A28BF1D5DFF0A4"><enum>(c)</enum><header>Exceptions</header><text>The
requirements of subsection (b) shall not be construed as prohibiting a mortgage
lender, mortgage broker, mortgage banker, real estate broker, appraisal
management company, employee of an appraisal management company, or any other
person with an interest in a real estate transaction from asking an appraiser
to provide 1 or more of the following services:</text>
<paragraph id="H4E8271F0917F4DFDBFD5EDD2E936E6CB"><enum>(1)</enum><text>Consider
additional, appropriate property information, including the consideration of
additional comparable properties to make or support an appraisal.</text>
</paragraph><paragraph id="H0C56BCF0D4D14053AC06DC6013CCAE33"><enum>(2)</enum><text>Provide further
detail, substantiation, or explanation for the appraiser’s value
conclusion.</text>
</paragraph><paragraph id="H493281392843409288BC4F00F9FED3DD"><enum>(3)</enum><text>Correct errors in
the appraisal report.</text>
</paragraph></subsection><subsection id="HA3B7FF5EF4A54C1BB05F9C063046EB00"><enum>(d)</enum><header>Rulemaking
proceedings</header><text display-inline="yes-display-inline">The Board, the
Comptroller of the Currency, the Director of the Office of Thrift Supervision,
the Federal Deposit Insurance Corporation, the National Credit Union
Administration Board, and the Federal Trade Commission—</text>
<paragraph id="H3144BCA88CB544A8B8083081F5EA3962"><enum>(1)</enum><text display-inline="yes-display-inline">shall, for purposes of this section,
jointly prescribe regulations defining with specificity acts or practices which
are unfair or deceptive in the provision of mortgage lending services for a
consumer credit transaction secured by the principal dwelling of the consumer
or mortgage brokerage services for such a transaction and defining any terms in
this section or such regulations; and</text>
</paragraph><paragraph id="HCFB2CFAF826C419AAAECD10C0522E46"><enum>(2)</enum><text display-inline="yes-display-inline">may jointly issue interpretive guidelines
and general statements of policy with respect to unfair or deceptive acts or
practices in the provision of mortgage lending services for a consumer credit
transaction secured by the principal dwelling of the consumer and mortgage
brokerage services for such a transaction, within the meaning of subsections
(a), (b), and (c).</text>
</paragraph></subsection><subsection id="H0F8EF436A48C43AABE1DAA5935B6A883"><enum>(e)</enum><header>Penalties</header><text></text>
<paragraph id="H388043703B5C4135BBA0F54E2CE2CC8"><enum>(1)</enum><header>First
violation</header><text>In addition to the enforcement provisions referred to
in section 130, each person who violates this section shall forfeit and pay a
civil penalty of not more than $10,000 for each day any such violation
continues.</text>
</paragraph><paragraph id="HA3D8A85A0D7843028C18E75F323B9003"><enum>(2)</enum><header>Subsequent
violations</header><text>In the case of any person on whom a civil penalty has
been imposed under paragraph (1), paragraph (1) shall be applied by
substituting <quote>$20,000</quote> for <quote>$10,000</quote> with respect to
all subsequent violations.</text>
</paragraph><paragraph id="H3E6CA948C47B48F4992E007613428549"><enum>(3)</enum><header>Assessment</header><text>The
agency referred to in subsection (a) or (c) of section 108 with respect to any
person described in paragraph (1) shall assess any penalty under this
subsection to which such person is
subject.</text>
</paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H0AE6F4F997224EA1B8F87D89E981A570"><enum>(b)</enum><header>Clerical
Amendment</header><text>The table of sections for chapter 2 of the Truth in
Lending Act is amended by inserting after the item relating to section 129D (as
added by section 501(c)) the following new item:</text>
<quoted-block display-inline="no-display-inline" id="H938AE4546AE84B60B38D84001DB3D6E9" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">129E. Unfair and deceptive practices and
acts relating to certain consumer credit
transactions.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section display-inline="no-display-inline" id="HD2006DAE09284B04BE5097EDA554B57E" section-type="subsequent-section"><enum>603.</enum><header>Amendments relating
to appraisal subcommittee of FIEC, appraiser independence, and approved
appraiser education</header>
<subsection id="H66FDE54AC3AC4E16913348214962A151"><enum>(a)</enum><header>Consumer
protection mission</header>
<paragraph id="HAD1151EAABE7416587B67F291D834E21"><enum>(1)</enum><header>Purposes</header><text>Section
1101 of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 3331) is amended by inserting <quote>and to provide the
Appraisal Subcommittee with a consumer protection mandate</quote> before the
period at the end.</text>
</paragraph><paragraph id="HBE0439B3D4B9486ABACC9E453DB5D5EF"><enum>(2)</enum><header>Functions of
appraisal subcommittee</header><text>Section 1103(a) of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3332(a))
is amended—</text>
<subparagraph id="HA319BB5FF1B34BF3A996BA31E3D4109C"><enum>(A)</enum><text>by striking
<quote>and</quote> at the end of paragraph (3);</text>
</subparagraph><subparagraph id="HC37EC7FA391E41F2AAB392A143E6E62C"><enum>(B)</enum><text>by striking the
period at the end of paragraph (4) and inserting <quote>; and</quote>;
and</text>
</subparagraph><subparagraph id="HC3DF5023C0094ADF903C2B0209F63653"><enum>(C)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H8ECC38FDFCE146AA854361202C0000B0" style="OLC">
<paragraph id="H6C5776B297464850B8993344CE625B71"><enum>(5)</enum><text>protect the
consumer from improper appraisal practices and the predations of unlicensed
appraisers.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H7C1CC9133A074EC088BE656CD045AC1F"><enum>(3)</enum><header>Threshold
levels</header><text>Section 1112(b) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3341(b)) is amended by
inserting before the period the following: <quote>, and that such threshold
level provides reasonable protection for consumers who purchase 1–4 unit
single-family residences</quote>.</text>
</paragraph></subsection><subsection id="H42E0DB7625D148CCB33BA634E3F91429"><enum>(b)</enum><header>Annual report of
appraisal subcommittee</header><text>Section 1103(a)(4) of Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3332(a)(4)) is amended at the end by inserting: <quote>The report shall also
detail the activities of the Appraisal Subcommittee, including the results of
all audits of State appraiser regulatory agencies, and provide an accounting of
disapproved actions and warnings taken in the previous year, including a
description of the conditions causing the disapproval.</quote>.</text>
</subsection><subsection id="HE95EFB967C3948698EE8578538E5C779"><enum>(c)</enum><header>Open
meetings</header><text>Section 1104(b) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3333(b)) is amended by
inserting <quote>in public session after notice in the Federal Register</quote>
after <quote>shall meet</quote>.</text>
</subsection><subsection id="HE6C0C4986B58498DBFC831FE7978FF58"><enum>(d)</enum><header>Regulations</header><text>Section
1106 of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 3335) is amended—</text>
<paragraph id="H0F6460D5C33C4B3DBC466DBAC291EDA9"><enum>(1)</enum><text>by inserting
<quote>prescribe regulations after notice and opportunity for comment,</quote>
after <quote>hold hearings</quote>; and</text>
</paragraph><paragraph id="H1FA5AC80D93E4F65BDA61F9000097F1"><enum>(2)</enum><text>at
the end by inserting <quote>Any regulations prescribed by the Appraisal
Subcommittee shall (unless otherwise provided in this title) be limited to the
following functions: temporary practice, national registry, information
sharing, and enforcement. For purposes of prescribing regulations, the
Appraisal Subcommittee shall establish an advisory committee of industry
participants, including appraisers and government agencies, and hold regular
meetings.</quote>.</text>
</paragraph></subsection><subsection display-inline="no-display-inline" id="HFD511AF136D14F07A971E4BC99F5B3B0"><enum>(e)</enum><header>Field appraisals
and appraisal reviews</header><text display-inline="yes-display-inline">Section
1113 of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 3342) is amended—</text>
<paragraph id="H23435C0916F34029A099FB81990AF17"><enum>(1)</enum><text>by
striking <quote>In determining</quote> and inserting <quote><header-in-text level="subsection" style="OLC"><enum-in-header>(a)</enum-in-header> In
general</header-in-text>.—In determining</quote>; and</text>
</paragraph><paragraph id="H4550D176DF484C938759CE1E07733CD2"><enum>(2)</enum><text>by adding at the
end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H251E810044AF4162A000B747EAD24220" style="OLC">
<subsection id="H06028F697075447C855CF9AA4449E2AC"><enum>(b)</enum><header>Field appraisals
and appraisal reviews</header><text display-inline="yes-display-inline">All
field appraisals performed at a property within a State shall be prepared by
appraisers licensed in the State where the property is located. All Uniform
Standards of Professional Appraisal Practice-compliant appraisal reviews shall
be performed by an appraiser who is duly licensed by a State appraisal
board.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HD82D83559E6E4EDEBF753325C1F906CF"><enum>(f)</enum><header>State agency
reporting requirement</header><text>Section 1109(a) of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338(a))
is amended—</text>
<paragraph id="H488AD5AFEF694B02AF32F36CC960506B"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>and</quote> after the
semicolon in paragraph (1);</text>
</paragraph><paragraph id="H133F98F07FE346D4BFD1AD1D6EABCEAF"><enum>(2)</enum><text display-inline="yes-display-inline">by redesignating paragraph (2) as paragraph
(3); and</text>
</paragraph><paragraph id="HE1EAE31C06BF49F4912DF1D985AF4169"><enum>(3)</enum><text display-inline="yes-display-inline">by inserting after paragraph (1) the
following new paragraph:</text>
<quoted-block id="HE7B95D3AE36D4910BABB06E331BA08E0" style="OLC">
<paragraph id="H3A8CF16C4A064E77A748466632FF5314"><enum>(2)</enum><text>transmit reports
on sanctions, disciplinary actions, license and certification revocations, and
license and certification suspensions on a timely basis to the national
registry of the Appraisal Subcommittee;
and</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HFB5B7CF6ED934E2995C51F498D5E38B4"><enum>(g)</enum><header>Registry fees
modified</header><text>Section 1109(a)(3) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3338(a)(3)) (as modified by
section 203(e) of this Act) is amended by—</text>
<paragraph id="H9E09682261374ADDB8CDACB8D2D54D25"><enum>(1)</enum><text>striking
<quote>$25</quote> and inserting <quote>$40</quote>;</text>
</paragraph><paragraph id="HC4A7FF096883464D8477D497AD87FCA3"><enum>(2)</enum><text>striking
<quote>$50</quote> and inserting <quote>$80</quote>; and</text>
</paragraph><paragraph id="H854BD425DE4343DFA0BFDB88892383E9"><enum>(3)</enum><text>inserting after
the period at the end the following new sentences: <quote>The Appraisal
Subcommittee shall consider at least once every 5 years whether to adjust the
dollar amount of the registry fees to account for inflation. In implementing
any change in registry fees, the Appraisal Subcommittee shall provide
flexibility to the States for multi-year certifications and licenses already in
place, as well as a transition period to implement the changes in registry
fees.</quote></text>
</paragraph></subsection><subsection id="H157E20E6AEEC4A0EB6C5D33D6B88C49C"><enum>(h)</enum><header>Grants and
reports</header><text>Section 1109(b) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3348(b)) is amended—</text>
<paragraph id="H0EEF75A189794A36BEFBF6E38CAB8D72"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>and</quote> after the
semicolon in paragraph (3);</text>
</paragraph><paragraph id="HAE962DA5B73847D39FEEE4F1B48CCBE4"><enum>(2)</enum><text>by striking the
period at the end of paragraph (4) and inserting a semicolon; and</text>
</paragraph><paragraph id="H2C18D87261794A98A100BF26B77057EC"><enum>(3)</enum><text>by adding at the
end the following new paragraphs:</text>
<quoted-block id="H2E0E58C7176242939952CDAE87FEF6F0" style="OLC">
<paragraph id="HA97C65B06F854EEDA2B590B26B8CBB87"><enum>(5)</enum><text>make grants to
State appraiser regulatory agencies to help defray those costs relating to
enforcement activities; and</text>
</paragraph><paragraph id="HFD6C308C017C404F84B08EC700A6DD64"><enum>(6)</enum><text>to report to all
State appraiser certifying and licensing agencies when a license or
certification is surrendered, revoked, or
suspended.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H328FBEA72D554345AA4F6FCF221253BD"><enum>(i)</enum><header>Criteria</header><text>Section
1116 of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 3345) is amended—</text>
<paragraph id="H91B74312268A4B3591D101A548774EA9"><enum>(1)</enum><text>in subsection (c),
by inserting <quote>whose criteria for the licensing of a real estate appraiser
currently meet or exceed the minimum criteria issued by the Appraisal
Qualifications Board of The Appraisal Foundation for the licensing of real
estate appraisers</quote> before the period at the end; and</text>
</paragraph><paragraph id="H286EBA5711CA4CEAAABBA3E933D5159F"><enum>(2)</enum><text display-inline="yes-display-inline">by striking subsection (e) and inserting
the following new subsection:</text>
<quoted-block id="H965E30C769294D10A682BAF2D3299976" style="OLC">
<subsection id="HE7DEA0E1D5D54E5E8F817D191190993C"><enum>(e)</enum><header>Minimum
qualification requirements</header><text>Any requirements established for
individuals in the position of <quote>Trainee Appraiser</quote> and
<quote>Supervisory Appraiser</quote> shall meet or exceed the minimum
qualification requirements of the Appraiser Qualifications Board of The
Appraisal Foundation. The Appraisal Subcommittee shall have the authority to
enforce these requirements.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="H458DAE1CC8BF4248B6388D6E04D7A03B"><enum>(j)</enum><header>Monitoring of
state appraiser certifying and licensing agencies</header><text>Section 1118(a)
of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3347(a)) is amended—</text>
<paragraph id="H272B5847B1984B74A345481C4F2DF5FD"><enum>(1)</enum><text>by inserting
<quote>funding, staffing,</quote> after <quote>practices,</quote> each place
such term appears;</text>
</paragraph><paragraph id="HF20C479C1F8244DCB7526D3808E5D06F"><enum>(2)</enum><text>by inserting
before the period at the end of the first sentence the following: <quote>,
whether a State agency processes complaints and completes exams in a reasonable
time period, and whether a State agency reports claims and disciplinary actions
on a timely basis to the national registry maintained by the Appraisal
Subcommittee</quote>; and</text>
</paragraph><paragraph id="H6ACA44911D7E4C02B556E13848E6B183"><enum>(3)</enum><text>by inserting at
the end the following new sentence: <quote>The Appraisal Subcommittee shall
have the authority to impose interim sanctions and suspensions.</quote>.</text>
</paragraph></subsection><subsection id="H3389B772AB594972A93C2800992674F7"><enum>(k)</enum><header>Reciprocity</header><text>Subsection
(b) of section 1122 of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 3351(b)) is amended to read as follows:</text>
<quoted-block id="H0EBC8D33ED42424282F86263CDC4CB02" style="OLC">
<subsection id="H5CCCBA40CD7F4F848699AFF7C1DF2A8"><enum>(b)</enum><header>Reciprocity</header><text>A
State appraiser certifying or licensing agency shall issue a reciprocal
certification or license for an individual from another State when—</text>
<paragraph id="HD29D080DF24543B5A87049BA1D961F21"><enum>(1)</enum><text>the appraiser
licensing and certification program of such other State is in compliance with
the provisions of this title; and</text>
</paragraph><paragraph id="HF5CF0BDA83584FFBA2FB60B6D68C64EE"><enum>(2)</enum><text>the appraiser
holds a valid certification from a State whose requirements for certification
or licensing meet or exceed the licensure standards established by the State
where an individual seeks appraisal licensure.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HDD8505301ED4454182B266C8BE8F4D25"><enum>(l)</enum><header>Consideration of
professional appraisal designations</header><text>Section 1122(d) of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
3351(d)) is amended by adding at the end the following new sentence: <quote>No
provision of this subsection shall be construed as prohibiting consideration of
designations conferred by recognized national professional appraisal
organizations, such as sponsoring organizations of The Appraisal
Foundation.</quote>.</text>
</subsection><subsection id="HB8033F44EA314D10BB744D0721AFCE05"><enum>(m)</enum><header>Appraiser
independence</header><text>Section 1122 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is amended by adding at
the end the following new subsection:</text>
<quoted-block id="HD527CEE82C3E459C8500DDBB7965E677" style="OLC">
<subsection id="HF7690D255CF84D46855FCBBB85AE4948"><enum>(g)</enum><header>Appraiser
independence</header><text></text>
<paragraph id="HCC0C4EA5E7524200A39BA2D101272C00"><enum>(1)</enum><header>Prohibitions on
interested parties in a real estate transaction</header><text display-inline="yes-display-inline">No mortgage lender, mortgage broker,
mortgage banker, real estate broker, appraisal management company, employee of
an appraisal management company, or any other person with an interest in a real
estate transaction involving an appraisal shall improperly influence, or
attempt to improperly influence, through coercion, extortion, collusion,
compensation, instruction, inducement, intimidation, non-payment for services
rendered, or bribery, the development, reporting, result, or review of a real
estate appraisal sought in connection with a mortgage loan.</text>
</paragraph><paragraph id="H2751A8940F2B4E60B83F6306F424BDE1"><enum>(2)</enum><header>Exceptions</header><text display-inline="yes-display-inline">The requirements of paragraph (1) shall not
be construed as prohibiting a mortgage lender, mortgage broker, mortgage
banker, real estate broker, appraisal management company, employee of an
appraisal management company, or any other person with an interest in a real
estate transaction from asking an appraiser to provide 1 or more of the
following services:</text>
<subparagraph id="H424697362EB94DBC921476CF60F22070"><enum>(A)</enum><text>Consider
additional, appropriate property information, including the consideration of
additional comparable properties to make or support an appraisal.</text>
</subparagraph><subparagraph id="H099901F553F645E696E1BEAD166ED1AB"><enum>(B)</enum><text>Provide further
detail, substantiation, or explanation for the appraiser’s value conclusion.</text>
</subparagraph><subparagraph id="HDB9671D08CA74D4FB53FE6CF7E725FDA"><enum>(C)</enum><text>Correct errors in
the appraisal report.</text>
</subparagraph></paragraph><paragraph id="HEEF61DA1404F46F4953F587D9841F8C7"><enum>(3)</enum><header>Prohibitions on
conflicts of interest</header><text>No certified or licensed appraiser
conducting an appraisal may have a direct or indirect interest, financial or
otherwise, in the property or transaction involving the appraisal.</text>
</paragraph><paragraph id="H3F1CDD1B12E14FFC81EAD67522C2FE69"><enum>(4)</enum><header>Mandatory
reporting</header><text display-inline="yes-display-inline">Any mortgage
lender, mortgage broker, mortgage banker, real estate broker, appraisal
management company, employee of an appraisal management company, or any other
person with an interest in a real estate transaction involving an appraisal who
has a reasonable basis to believe an appraiser is violating applicable laws, or
is otherwise engaging in unethical or unprofessional conduct, shall refer the
matter to the applicable State appraiser certifying and licensing
agency.</text>
</paragraph><paragraph id="HF1DE2D5703EA4F649F781326C11C675B"><enum>(5)</enum><header>Regulations</header><text>The
Federal financial institutions regulatory agencies (as defined in section
1003(1) of the Federal Financial Institutions Examination Council Act of 1978)
shall prescribe such regulations as may be necessary to carry out the
provisions of this subsection.</text>
</paragraph><paragraph id="H5C0A7D2445C643139C9C5062E40622D0"><enum>(6)</enum><header>Penalties</header><text>Any
person who violates any provision of this section shall be subject to civil
penalties under section 8(i)(2) of the Federal Deposit Insurance Act or section
206(k)(2) of the Federal Credit Union Act, as appropriate.</text>
</paragraph><paragraph id="H16A316B508754279AB74533CC79E1B71"><enum>(7)</enum><header>Proceeding</header><text>A
proceeding with respect to a violation of this section shall be an
administrative proceeding which may be conducted by a Federal financial
institutions regulatory agency in accordance with the procedures set forth in
subchapter II of chapter 5 of title 5, United States
Code.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H9F5EF9487A0142D5B4124F00F0676C42"><enum>(n)</enum><header>Appraiser
education</header><text>Section 1122 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is amended by inserting
after subsection (g) (as added by subsection (l) of this section) the following
new subsection:</text>
<quoted-block id="H9FDD7175AE9B48CDAC9336353795686B" style="OLC">
<subsection id="HAAC6AA737125472C84362F4832E7B11D"><enum>(h)</enum><header>Approved
education</header><text>The Appraisal Subcommittee shall encourage the States
to accept courses approved by the Appraiser Qualification Board’s Course
Approval
Program.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H60EED5EECF9C4C2C9400BDAC2D97887F"><enum>(o)</enum><header>Technical
corrections</header><text></text>
<paragraph id="H13323D8D21C2486A92DFF3D2BFEBC0"><enum>(1)</enum><text>Section 1119(a)(2)
of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3348(a)(2)) is amended by striking <quote>council,</quote> and inserting
<quote>Council,</quote>.</text>
</paragraph><paragraph id="H79A276A0CAA1428EA079935B69F335B3"><enum>(2)</enum><text>Section 1121(6) of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3350(6)) is amended by striking <quote>Corporations,</quote> and
inserting <quote>Corporation,</quote>.</text>
</paragraph><paragraph id="HA25EC41B39AC411AB37F3BFCFF9E8750"><enum>(3)</enum><text>Section 1121(8) of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3350(8)) is amended by striking <quote>council</quote> and inserting
<quote>Council</quote>.</text>
</paragraph><paragraph id="HC355F557F4AF40B4972D1EC197870094"><enum>(4)</enum><text>Section 1122 of
the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 3351) is amended—</text>
<subparagraph id="HC5EEE4B36574466886372C1DFCA03DD6"><enum>(A)</enum><text>in subsection
(a)(1) by moving the left margin of subparagraphs (A), (B), and (C) 2 ems to
the right; and</text>
</subparagraph><subparagraph id="HCDA09AAC6EF4428FBFE44DDF45EA9545"><enum>(B)</enum><text>in subsection (c)—</text>
<clause id="HC55034B88FB54784810505A2E573468C"><enum>(i)</enum><text>by
striking <quote>Federal Financial Institutions Examination Council</quote> and
inserting <quote>Financial Institutions Examination Council</quote>; and</text>
</clause><clause id="H90A20EC0AB9F4A0DA000B3EABFC6E757"><enum>(ii)</enum><text>by
striking <quote>the council’s functions</quote> and inserting <quote>the
Council’s functions</quote>.</text>
</clause></subparagraph></paragraph></subsection></section><section id="HFB1EF7DFAEC14FCC81B805168EBBC63"><enum>604.</enum><header>Study required
on improvements in appraisal process and compliance programs</header>
<subsection id="HEA45C336893F43FB9238F73532D19049"><enum>(a)</enum><header>Study</header><text>The
Comptroller General shall conduct a comprehensive study on possible
improvements in the appraisal process generally, and specifically on the
consistency in and the effectiveness of, and possible improvements in, State
compliance efforts and programs in accordance with title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989. In addition, this
study shall examine the existing de minimis loan levels established by Federal
regulators for compliance under title XI and whether there is a need to revise
them to reflect the addition of consumer protection to the purposes and
functions of the Appraisal Subcommittee.</text>
</subsection><subsection id="HC9146A422FA54030B8C2E55FE4F2813C"><enum>(b)</enum><header>Report</header><text>Before
the end of the 18-month period beginning on the date of the enactment of this
Act, the Comptroller General shall submit a report on the study under
subsection (a) to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and Urban Affairs of the
Senate, together with such recommendations for administrative or legislative
action, at the Federal or State level, as the Comptroller General may determine
to be appropriate.</text>
</subsection></section><section commented="no" id="H2BE790CF2C99471CA678525B003FB9DE"><enum>605.</enum><header>Equal Credit
Opportunity Act amendment</header><text display-inline="no-display-inline">Subsection (e) of section 701 of the Equal
Credit Opportunity Act ( U.S.C. 1691) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H7680A57F30D446E69482935D08D4D6A9" style="OLC">
<subsection commented="no" id="H40A581E060C2415BB0BEC9F3E192850"><enum>(e)</enum><header>Copies furnished
to applicants</header>
<paragraph commented="no" id="H62D4D347EB19495CA625EE2014100054"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">Each creditor shall
furnish to an applicant, a copy of all appraisal reports and valuations
developed in connection with the applicant’s application for a loan that is or
would have been secured by a lien on residential real property.</text>
</paragraph><paragraph commented="no" id="H0426FD4033CD47B995725FC5CA7F152E"><enum>(2)</enum><header>Procedures.</header><text>Appraisal
reports shall be furnished under this subsection upon written request by the
applicant, made within a reasonable period of time of the application and
before any closing on the loan.</text>
</paragraph><paragraph commented="no" id="HDC16504F09724003999B00A8F88E729"><enum>(3)</enum><header>Reimbursement</header><text>The
creditor may require an applicant to pay a reasonable fee for the provision of
copies of appraisal reports under this subsection.</text>
</paragraph><paragraph commented="no" id="H6D8B0CF11E94440D9900A4A807DDCE2D"><enum>(4)</enum><header>Notification to
consumers</header><text>The creditor shall notify (pursuant to regulations
prescribed by the Board) an applicant in writing of the right to receive a copy
of each appraisal report, under this
subsection.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section>