II 111th CONGRESS 1st Session S. 912 IN THE SENATE OF THE UNITED STATES April 28, 2009 Mr. Merkley introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To prohibit yield spread premiums, and for other purposes.

1.

Short title

This Act may be cited as the Transparency for Homeowners Act of 2009.

2.

Prohibition on yield spread premiums

(a)

In general

No person shall provide, and no mortgage originator shall receive, directly or indirectly, any compensation that is based on, or varies with, the terms of any home mortgage loan (other than the amount of the loan). (b)

Definitions

For purposes of this Act— (1)the term home mortgage loan means a loan secured by a mortgage or lien on residential property; (2)the term mortgage originator means any creditor or other person, including a mortgage broker or bank lender, who, for compensation or in anticipation of compensation, engages either directly or indirectly in the— (A)acceptance of applications for home mortgage loans; (B)solicitation of home mortgage loans on behalf of borrowers; (C)negotiation of terms or conditions of home mortgage loans on behalf of borrowers or lenders; or (D)negotiation of sales of existing home mortgage loans to institutional or noninstitutional lenders; and (3)the term residential property means a 1–4 family, owner-occupied residence, including a 1-family unit in a condominium project, a membership interest and occupancy agreement in a cooperative housing project, and a manufactured home and the lot on which the home is situated.