[Congressional Record Volume 143, Number 157 (Sunday, November 9, 1997)]
[Senate]
[Pages S12392-S12395]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 THE HOMEOWNERS PROTECTION ACT OF 1997

                                 ______
                                 

               D'AMATO (AND SARBANES) AMENDMENT NO. 1623

  Mr. SESSIONS (for Mr. D'Amato, for himself and Mr. Sarbanes) proposed 
an amendment to the bill (S. 318) to amend the Truth in Lending Act to 
require automatic cancellation and notice of cancellation rights with 
respect to private mortgage insurance which is required by a creditor 
as a condition for entering into a residential mortgage transaction, 
and for other purposes; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Homeowners 
     Protection Act of 1997''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Termination of private mortgage insurance.
Sec. 4. Disclosure requirements.
Sec. 5. Notification upon cancellation or termination.
Sec. 6. Disclosure requirements for lender paid mortgage insurance.
Sec. 7. Fees for disclosures.
Sec. 8. Civil liability.
Sec. 9. Effect on other laws and agreements.
Sec. 10. Enforcement.
Sec. 11. Construction.
Sec. 12. Effective date.
Sec. 13. Abolishment of the Thrift Depositor Protection Oversight 
              Board.

     SEC. 2. DEFINITIONS.

       In this Act, the following definitions shall apply:
       (1) Adjustable rate mortgage.--The term ``adjustable rate 
     mortgage'' means a residential mortgage that has an interest 
     rate that is subject to change.
       (2) Cancellation date.--The term ``cancellation date'' 
     means--
       (A) with respect to a fixed rate mortgage, at the option of 
     the mortgagor, the date on which the principal balance of the 
     mortgage--
       (i) based solely on the initial amortization schedule for 
     that mortgage, and irrespective of the outstanding balance 
     for that mortgage on that date, is first scheduled to reach 
     80 percent of the original value of the property securing the 
     loan; or
       (ii) based solely on actual payments, reaches 80 percent of 
     the original value of the property securing the loan; and
       (B) with respect to an adjustable rate mortgage, at the 
     option of the mortgagor, the date on which the principal 
     balance of the mortgage--
       (i) based solely on amortization schedules for that 
     mortgage, and irrespective of the outstanding balance for 
     that mortgage on that date, is first scheduled to reach 80 
     percent of the original value of the property securing the 
     loan; or
       (ii) based solely on actual payments, first reaches 80 
     percent of the original value of the property securing the 
     loan.
       (3) Fixed rate mortgage.--The term ``fixed rate mortgage'' 
     means a residential mortgage that has an interest rate that 
     is not subject to change.
       (4) Good payment history.--The term ``good payment 
     history'' means, with respect to a mortgagor, that the 
     mortgagor has not--
       (A) made a mortgage payment that was 60 days or longer past 
     due during the 12-month period beginning 24 months before the 
     date on which the mortgage reaches the cancellation date; or
       (B) made a mortgage payment that was 30 days or longer past 
     due during the 12-month period preceding the date on which 
     the mortgage reaches the cancellation date.
       (5) Initial amortization schedule.--The term ``initial 
     amortization schedule'' means a schedule established at the 
     time at which a residential mortgage transaction is 
     consummated with respect to a fixed rate mortgage, showing--
       (A) the amount of principal and interest that is due at 
     regular intervals to retire the principal balance and accrued 
     interest over the amortization period of the loan; and
       (B) the unpaid principal balance of the loan after each 
     scheduled payment is made.
       (6) Mortgage insurance.--The term ``mortgage insurance'' 
     means insurance, including any mortgage guaranty insurance, 
     against the nonpayment of, or default on, an individual 
     mortgage or loan involved in a residential mortgage 
     transaction.
       (7) Mortgage insurer.--The term ``mortgage insurer'' means 
     a provider of private mortgage insurance, as described in 
     this Act, that is authorized to transact such business in the 
     State in which the provider is transacting such business.
       (8) Mortgagee.--The term ``mortgagee'' means the holder of 
     a residential mortgage at the time at which that mortgage 
     transaction is consummated.
       (9) Mortgagor.--The term ``mortgagor'' means the original 
     borrower under a residential mortgage or his or her 
     successors or assignees.
       (10) Original value.--The term ``original value'', with 
     respect to a residential mortgage, means the lesser of the 
     sales price of the property securing the mortgage, as 
     reflected in the contract, or the appraised value at the time 
     at which the subject residential mortgage transaction was 
     consummated.
       (11) Private mortgage insurance.--The term ``private 
     mortgage insurance'' means mortgage insurance other than 
     mortgage insurance made available under the National Housing 
     Act, title 38 of the United States Code, or title V of the 
     Housing Act of 1949.
       (12) Residential mortgage.--The term ``residential 
     mortgage'' means a mortgage, loan, or other evidence of a 
     security interest created with respect to a single-family 
     dwelling that is the primary residence of the mortgagor.
       (13) Residential mortgage transaction.--The term 
     ``residential mortgage transaction'' means a transaction 
     consummated on or after the date that is 1 year after the 
     date of enactment of this Act, in which a mortgage, deed of 
     trust, purchase money security interest arising under an 
     installment sales contract, or equivalent consensual security 
     interest is created or retained against a single-family 
     dwelling that is the primary residence of the mortgagor to 
     finance the acquisition, initial construction, or refinancing 
     of that dwelling.
       (14) Servicer.--The term ``servicer'' has the same meaning 
     as in section 6(i)(2) of the Real Estate Settlement 
     Procedures Act of 1974, with respect to a residential 
     mortgage.
       (15) Single-family dwelling.--The term ``single-family 
     dwelling'' means a residence consisting of 1 family dwelling 
     unit.
       (16) Termination date.--The term ``termination date'' 
     means--
       (A) with respect to a fixed rate mortgage, the date on 
     which the principal balance of the mortgage, based solely on 
     the initial amortization schedule for that mortgage, and 
     irrespective of the outstanding balance for that mortgage on 
     that date, is first scheduled to reach 78 percent of the 
     original value of the property securing the loan; and
       (B) with respect to an adjustable rate mortgage, the date 
     on which the principal balance of the mortgage, based solely 
     on amortization schedules for that mortgage, and irrespective 
     of the outstanding balance for that mortgage on that date, is 
     first scheduled to reach 78 percent of the original value of 
     the property securing the loan.

[[Page S12393]]

     SEC. 3. TERMINATION OF PRIVATE MORTGAGE INSURANCE.

       (a) Borrower Cancellation.--A requirement for private 
     mortgage insurance in connection with a residential mortgage 
     transaction shall be canceled on the cancellation date, if 
     the mortgagor--
       (1) submits a request in writing to the servicer that 
     cancellation be initiated;
       (2) has a good payment history with respect to the 
     residential mortgage; and
       (3) has satisfied any requirement of the holder of the 
     mortgage (as of the date of a request under paragraph (1)) 
     for--
       (A) evidence (of a type established in advance and made 
     known to the mortgagor by the servicer promptly upon receipt 
     of a request under paragraph (1)) that the value of the 
     property securing the mortgage has not declined below the 
     original value of the property; and
       (B) certification that the equity of the mortgagor in the 
     residence securing the mortgage is unencumbered by a 
     subordinate lien.
       (b) Automatic Termination.--A requirement for private 
     mortgage insurance in connection with a residential mortgage 
     transaction shall terminate with respect to payments for that 
     mortgage insurance made by the mortgagor--
       (1) on the termination date if, on that date, the mortgagor 
     is current on the payments required by the terms of the 
     residential mortgage transaction; or
       (2) on the date after the termination date on which the 
     mortgagor becomes current on the payments required by the 
     terms of the residential mortgage transaction.
       (c) Final Termination.--If a requirement for private 
     mortgage insurance is not otherwise canceled or terminated in 
     accordance with subsection (a) or (b), in no case may such a 
     requirement be imposed beyond the first day of the month 
     immediately following the date that is the midpoint of the 
     amortization period of the loan if the mortgagor is current 
     on the payments required by the terms of the mortgage.
       (d) No Further Payments.--No payments or premiums may be 
     required from the mortgagor in connection with a private 
     mortgage insurance requirement terminated or canceled under 
     this section--
       (1) in the case of cancellation under subsection (a), more 
     than 30 days after the later of--
       (A) the date on which a request under subsection (a)(1) is 
     received; or
       (B) the date on which the mortgagor satisfies any evidence 
     and certification requirements under subsection (a)(3);
       (2) in the case of termination under subsection (b), more 
     than 30 days after the termination date or the date referred 
     to in subsection (b)(2), as applicable; and
       (3) in the case of termination under subsection (c), more 
     than 30 days after the final termination date established 
     under that subsection.
       (e) Return of Unearned Premiums.--
       (1) In general.--Not later than 45 days after the 
     termination or cancellation of a private mortgage insurance 
     requirement under this section, all unearned premiums for 
     private mortgage insurance shall be returned to the mortgagor 
     by the servicer.
       (2) Transfer of funds to servicer.--Not later than 30 days 
     after notification by the servicer of termination or 
     cancellation of private mortgage insurance under this Act 
     with respect to a mortgagor, a mortgage insurer that is in 
     possession of any unearned premiums of that mortgagor shall 
     transfer to the servicer of the subject mortgage an amount 
     equal to the amount of the unearned premiums for repayment in 
     accordance with paragraph (1).
       (f) Exceptions for High Risk Loans.--
       (1) In general.--The termination and cancellation 
     provisions in subsections (a) and (b) do not apply to any 
     residential mortgage or mortgage transaction that, at the 
     time at which the residential mortgage transaction is 
     consummated, has high risks associated with the extension of 
     the loan--
       (A) as determined in accordance with guidelines published 
     by the Federal National Mortgage Association and the Federal 
     Home Loan Mortgage Corporation, in the case of a mortgage 
     loan with an original principal balance that does not exceed 
     the applicable annual conforming loan limit for the secondary 
     market established pursuant to section 305(a)(2) of the 
     Federal Home Loan Mortgage Corporation Act, so as to require 
     the imposition or continuation of a private mortgage 
     insurance requirement beyond the terms specified in 
     subsection (a) or (b) of section 3; or
       (B) as determined by the mortgagee in the case of any other 
     mortgage, except that termination shall occur--
       (i) with respect to a fixed rate mortgage, on the date on 
     which the principal balance of the mortgage, based solely on 
     the initial amortization schedule for that mortgage, and 
     irrespective of the outstanding balance for that mortgage on 
     that date, is first scheduled to reach 77 percent of the 
     original value of the property securing the loan; and
       (ii) with respect to an adjustable rate mortgage, on the 
     date on which the principal balance of the mortgage, based 
     solely on amortization schedules for that mortgage, and 
     irrespective of the outstanding balance for that mortgage on 
     that date, is first scheduled to reach 77 percent of the 
     original value of the property securing the loan.
       (2) Termination at midpoint.--A private mortgage insurance 
     requirement in connection with a residential mortgage or 
     mortgage transaction described in paragraph (1) shall 
     terminate in accordance with subsection (c).
       (3) Rule of construction.--Nothing in this subsection may 
     be construed to require a mortgage or mortgage transaction 
     described in paragraph (1)(A) to be purchased by the Federal 
     National Mortgage Association or the Federal Home Loan 
     Mortgage Corporation.

     SEC. 4. DISCLOSURE REQUIREMENTS.

       (a) Disclosures for New Mortgages at Time of Transaction.--
       (1) Disclosures for non-exempted transactions.--In any case 
     in which private mortgage insurance is required in connection 
     with a residential mortgage or mortgage transaction (other 
     than a mortgage or mortgage transaction described in section 
     3(f)(1)), at the time at which the transaction is 
     consummated, the mortgagee shall provide to the mortgagor--
       (A) if the transaction relates to a fixed rate mortgage--
       (i) a written initial amortization schedule; and
       (ii) written notice--

       (I) that the mortgagor may cancel the requirement in 
     accordance with section 3(a) of this Act indicating the date 
     on which the mortgagor may request cancellation, based solely 
     on the initial amortization schedule;
       (II) that the mortgagor may request cancellation in 
     accordance with section 3(a) of this Act earlier than 
     provided for in the initial amortization schedule, based on 
     actual payments;
       (III) that the requirement for private mortgage insurance 
     will automatically terminate on the termination date in 
     accordance with section 3(b) of this Act, and what that 
     termination date is with respect to that mortgage; and
       (IV) that there are exemptions to the right to cancellation 
     and automatic termination of a requirement for private 
     mortgage insurance in accordance with section 3(f) of this 
     Act, and whether such an exemption applies at that time to 
     that transaction; and

       (B) if the transaction relates to an adjustable rate 
     mortgage, a written notice that--
       (i) the mortgagor may cancel the requirement in accordance 
     with section 3(a) of this Act on the cancellation date, and 
     that the servicer will notify the mortgagor when the 
     cancellation date is reached;
       (ii) the requirement for private mortgage insurance will 
     automatically terminate on the termination date, and that on 
     the termination date, the mortgagor will be notified of the 
     termination or that the requirement will be terminated as 
     soon as the mortgagor is current on loan payments; and
       (iii) there are exemptions to the right of cancellation and 
     automatic termination of a requirement for private mortgage 
     insurance in accordance with section 3(f) of this Act, and 
     whether such an exemption applies at that time to that 
     transaction.
       (2) Disclosures for excepted transactions.--In the case of 
     a mortgage or mortgage transaction described in section 
     3(f)(1), at the time at which the transaction is consummated, 
     the mortgagee shall provide written notice to the mortgagor 
     that in no case may private mortgage insurance be required 
     beyond the date that is the midpoint of the amortization 
     period of the loan, if the mortgagor is current on payments 
     required by the terms of the residential mortgage.
       (3) Annual disclosures.--If private mortgage insurance is 
     required in connection with a residential mortgage 
     transaction, the servicer shall disclose to the mortgagor in 
     each such transaction in an annual written statement--
       (A) the rights of the mortgagor under this Act to 
     cancellation or termination of the private mortgage insurance 
     requirement; and
       (B) an address and telephone number that the mortgagor may 
     use to contact the servicer to determine whether the 
     mortgagor may cancel the private mortgage insurance.
       (4) Applicability.--Paragraphs (1) through (3) shall apply 
     with respect to each residential mortgage transaction 
     consummated on or after the date that is 1 year after the 
     date of enactment of this Act.
       (b) Disclosures for Existing Mortgages.--If private 
     mortgage insurance was required in connection with a 
     residential mortgage entered into at any time before the 
     effective date of this Act, the servicer shall disclose to 
     the mortgagor in each such transaction in an annual written 
     statement--
       (1) that the private mortgage insurance may, under certain 
     circumstances, be canceled by the mortgagor (with the consent 
     of the mortgagee or in accordance with applicable State law); 
     and
       (2) an address and telephone number that the mortgagor may 
     use to contact the servicer to determine whether the 
     mortgagor may cancel the private mortgage insurance.
       (c) Inclusion in Other Annual Notices.--The information and 
     disclosures required under subsection (b) and paragraphs 
     (1)(B) and (3) of subsection (a) may be provided on the 
     annual disclosure relating to the escrow account made as 
     required under the Real Estate Settlement Procedures Act of 
     1974, or as part of the annual disclosure of interest 
     payments made pursuant to Internal Revenue Service 
     regulations, and on a form promulgated by the Internal 
     Revenue Service for that purpose.
       (d) Standardized Forms.--The mortgagee or servicer may use 
     standardized forms for the provision of disclosures required 
     under this section.

[[Page S12394]]

     SEC. 5. NOTIFICATION UPON CANCELLATION OR TERMINATION.

       (a) In General.--Not later than 30 days after the date of 
     cancellation or termination of a private mortgage insurance 
     requirement in accordance with this Act, the servicer shall 
     notify the mortgagor in writing--
       (1) that the private mortgage insurance has terminated and 
     that the mortgagor no longer has private mortgage insurance; 
     and
       (2) that no further premiums, payments, or other fees shall 
     be due or payable by the mortgagor in connection with the 
     private mortgage insurance.
       (b) Notice of Grounds.--
       (1) In general.--If a servicer determines that a mortgage 
     did not meet the requirements for termination or cancellation 
     of private mortgage insurance under subsection (a) or (b) of 
     section 3, the servicer shall provide written notice to the 
     mortgagor of the grounds relied on to make the determination 
     (including the results of any appraisal used to make the 
     determination).
       (2) Timing.--Notice required by paragraph (1) shall be 
     provided--
       (A) with respect to cancellation of private mortgage 
     insurance under section 3(a), not later than 30 days after 
     the later of--
       (i) the date on which a request is received under section 
     3(a)(1); or
       (ii) the date on which the mortgagor satisfies any evidence 
     and certification requirements under section 3(a)(3); and
       (B) with respect to termination of private mortgage 
     insurance under section 3(b), not later than 30 days after 
     the scheduled termination date.

     SEC. 6. DISCLOSURE REQUIREMENTS FOR LENDER PAID MORTGAGE 
                   INSURANCE.

       (a) Definitions.--For purposes of this section--
       (1) the term ``borrower paid mortgage insurance'' means 
     private mortgage insurance that is required in connection 
     with a residential mortgage transaction, payments for which 
     are made by the borrower;
       (2) the term ``lender paid mortgage insurance'' means 
     private mortgage insurance that is required in connection 
     with a residential mortgage transaction, payments for which 
     are made by a person other than the borrower; and
       (3) the term ``loan commitment'' means a prospective 
     mortgagee's written confirmation of its approval, including 
     any applicable closing conditions, of the application of a 
     prospective mortgagor for a residential mortgage loan.
       (b) Exclusion.--Sections 3 through 5 do not apply in the 
     case of lender paid mortgage insurance.
       (c) Notices to Mortgagor.--In the case of lender paid 
     mortgage insurance that is required in connection with a 
     residential mortgage or a residential mortgage transaction--
       (1) not later than the date on which a loan commitment is 
     made for the residential mortgage transaction, the 
     prospective mortgagee shall provide to the prospective 
     mortgagor a written notice--
       (A) that lender paid mortgage insurance differs from 
     borrower paid mortgage insurance, in that lender paid 
     mortgage insurance may not be canceled by the mortgagor, 
     while borrower paid mortgage insurance could be cancelable by 
     the mortgagor in accordance with section 3(a) of this Act, 
     and could automatically terminate on the termination date in 
     accordance with section 3(b) of this Act;
       (B) that lender paid mortgage insurance--
       (i) usually results in a residential mortgage having a 
     higher interest rate than it would in the case of borrower 
     paid mortgage insurance; and
       (ii) terminates only when the residential mortgage is 
     refinanced, paid off, or otherwise terminated; and
       (C) that lender paid mortgage insurance and borrower paid 
     mortgage insurance both have benefits and disadvantages, 
     including a generic analysis of the differing costs and 
     benefits of a residential mortgage in the case lender paid 
     mortgage insurance versus borrower paid mortgage insurance 
     over a 10-year period, assuming prevailing interest and 
     property appreciation rates;
       (D) that lender paid mortgage insurance may be tax-
     deductible for purposes of Federal income taxes, if the 
     mortgagor itemizes expenses for that purpose; and
       (2) not later than 30 days after the termination date that 
     would apply in the case of borrower paid mortgage insurance, 
     the servicer shall provide to the mortgagor a written notice 
     indicating that the mortgagor may wish to review financing 
     options that could eliminate the requirement for private 
     mortgage insurance in connection with the residential 
     mortgage.
       (d) Standard Forms.--The servicer of a residential mortgage 
     may develop and use a standardized form or forms for the 
     provision of notices to the mortgagor, as required under 
     subsection (c).

     SEC. 7. FEES FOR DISCLOSURES.

       No fee or other cost may be imposed on any mortgagor with 
     respect to the provision of any notice or information to the 
     mortgagor pursuant to this Act.

     SEC. 8. CIVIL LIABILITY.

       (a) In General.--Any servicer, mortgagee, or mortgage 
     insurer that violates a provision of this Act shall be liable 
     to each mortgagor to whom the violation relates for--
       (1) in the case of an action by an individual, or a class 
     action in which the liable party is not subject to section 
     10, any actual damages sustained by the mortgagor as a result 
     of the violation, including interest (at a rate determined by 
     the court) on the amount of actual damages, accruing from the 
     date on which the violation commences;
       (2) in the case of--
       (A) an action by an individual, such statutory damages as 
     the court may allow, not to exceed $2,000; and
       (B) in the case of a class action--
       (i) in which the liable party is subject to section 10, 
     such amount as the court may allow, except that the total 
     recovery under this subparagraph in any class action or 
     series of class actions arising out of the same violation by 
     the same liable party shall not exceed the lesser of $500,000 
     or 1 percent of the net worth of the liable party, as 
     determined by the court; and
       (ii) in which the liable party is not subject to section 
     10, such amount as the court may allow, not to exceed $1000 
     as to each member of the class, except that the total 
     recovery under this subparagraph in any class action or 
     series of class actions arising out of the same violation by 
     the same liable party shall not exceed the lesser of $500,000 
     or 1 percent of the gross revenues of the liable party, as 
     determined by the court;
       (3) costs of the action; and
       (4) reasonable attorney fees, as determined by the court.
       (b) Timing of actions.--No action may be brought by a 
     mortgagor under subsection (a) later than 2 years after the 
     date of the discovery of the violation that is the subject of 
     the action.
       (c) Limitations on Liability.--
       (1) In general.--With respect to a residential mortgage 
     transaction, the failure of a servicer to comply with the 
     requirements of this Act due to the failure of a mortgage 
     insurer or a mortgagee to comply with the requirements of 
     this Act, shall not be construed to be a violation of this 
     Act by the servicer.
       (2) Rule of construction.--Nothing in paragraph (1) shall 
     be construed to impose any additional requirement or 
     liability on a mortgage insurer, a mortgagee, or a holder of 
     a residential mortgage.

     SEC. 9. EFFECT ON OTHER LAWS AND AGREEMENTS.

       (a) Effect on State Law.--
       (1) In general.--With respect to any residential mortgage 
     or residential mortgage transaction consummated after the 
     effective date of this Act, and except as provided in 
     paragraph (2), the provisions of this Act shall supersede any 
     provisions of the law of any State relating to requirements 
     for obtaining or maintaining private mortgage insurance in 
     connection with residential mortgage transactions, 
     cancellation or automatic termination of such private 
     mortgage insurance, any disclosure of information addressed 
     by this Act, and any other matter specifically addressed by 
     this Act.
       (2) Continued application of certain provisions.--This Act 
     does not supersede any provision of the law of a State in 
     effect on or before September 1, 1989, pertaining to the 
     termination of private mortgage insurance or other mortgage 
     guaranty insurance, to the extent that such law requires 
     termination of such insurance at an earlier date or when a 
     lower mortgage loan principal balance is achieved than as 
     provided in this Act.
       (b) Effect on Other Agreements.--The provisions of this Act 
     shall supersede any conflicting provision contained in any 
     agreement relating to the servicing of a residential mortgage 
     loan entered into by the Federal National Mortgage 
     Association, the Federal Home Loan Mortgage Corporation, or 
     any private investor or note holder (or any successors 
     thereto).

     SEC. 10. ENFORCEMENT.

       (a) In General.--Compliance with the requirements imposed 
     under this Act shall be enforced under--
       (1) section 8 of the Federal Deposit Insurance Act--
       (A) by the appropriate Federal banking agency (as defined 
     in section 3(q) of the Federal Deposit Insurance Act) in the 
     case of insured depository institutions (as defined in 
     section 3(c)(2) of such Act);
       (B) by the Federal Deposit Insurance Corporation in the 
     case of depository institutions described in clause (i), 
     (ii), or (iii) of section 19(b)(1)(A) of the Federal Reserve 
     Act that are not insured depository institutions (as defined 
     in section 3(c)(2) of the Federal Deposit Insurance Act); and
       (C) by the Director of the Office of Thrift Supervision in 
     the case of depository institutions described in clause (v) 
     and or (vi) of section 19(b)(1)(A) of the Federal Reserve Act 
     that are not insured depository institutions (as defined in 
     section 3(c)(2) of the Federal Deposit Insurance Act);
       (2) the Federal Credit Union Act, by the National Credit 
     Union Administration Board in the case of depository 
     institutions described in clause (iv) of section 19(b)(1)(A) 
     of the Federal Reserve Act; and
       (3) part C of title V of the Farm Credit Act of 1971 (12 
     U.S.C. 2261 et seq.), by the Farm Credit Administration in 
     the case of an institution that is a member of the Farm 
     Credit System.
       (b) Additional Enforcement Powers.--
       (1) Violation of this act treated as violation of other 
     acts.--For purposes of the exercise by any agency referred to 
     in subsection (a) of such agency's powers under any Act 
     referred to in such subsection, a violation of a requirement 
     imposed under this Act shall be deemed to be a violation of a 
     requirement imposed under that Act.
       (2) Enforcement authority under other acts.--In addition to 
     the powers of any agency referred to in subsection (a) under 
     any provision of law specifically referred to in

[[Page S12395]]

     such subsection, each such agency may exercise, for purposes 
     of enforcing compliance with any requirement imposed under 
     this Act, any other authority conferred on such agency by 
     law.
       (c) Enforcement and Reimbursement.--In carrying out its 
     enforcement activities under this section, each agency 
     referred to in subsection (a) shall--
       (1) notify the mortgagee or servicer of any failure of the 
     mortgagee or servicer to comply with 1 or more provisions of 
     this Act;
       (2) with respect to each such failure to comply, require 
     the mortgagee or servicer, as applicable, to correct the 
     account of the mortgagor to reflect the date on which the 
     mortgage insurance should have been canceled or terminated 
     under this Act; and
       (3) require the mortgagee or servicer, as applicable, to 
     reimburse the mortgagor in an amount equal to the total 
     unearned premiums paid by the mortgagor after the date on 
     which the obligation to pay those premiums ceased under this 
     Act.

     SEC. 11. CONSTRUCTION.

       Nothing in this Act shall be construed to impose any 
     requirement for private mortgage insurance in connection with 
     a residential mortgage transaction.

     SEC. 12. EFFECTIVE DATE.

       This Act, other than section 13, shall become effective 1 
     year after the date of enactment of this Act.

     SEC. 13. ABOLISHMENT OF THE THRIFT DEPOSITOR PROTECTION 
                   OVERSIGHT BOARD.

       (a) In General.--Effective at the end of the 3-month period 
     beginning on the date of enactment of this Act, the Thrift 
     Depositor Protection Oversight Board established under 
     section 21A of the Federal Home Loan Bank Act (hereafter in 
     this section referred to as the ``Oversight Board'') is 
     hereby abolished.
       (b) Disposition of Affairs.--
       (1) Power of chairperson.--Effective on the date of 
     enactment of this Act, the Chairperson of the Oversight Board 
     (or the designee of the Chairperson) may exercise on behalf 
     of the Oversight Board any power of the Oversight Board 
     necessary to settle and conclude the affairs of the Oversight 
     Board.
       (2) Availability of funds.--Funds available to the 
     Oversight Board shall be available to the Chairperson of the 
     Oversight Board to pay expenses incurred in carrying out 
     paragraph (1).
       (c) Savings Provision.--
       (1) Existing rights, duties, and obligations not 
     affected.--No provision of this section shall be construed as 
     affecting the validity of any right, duty, or obligation of 
     the United States, the Oversight Board, the Resolution Trust 
     Corporation, or any other person that--
       (A) arises under or pursuant to the Federal Home Loan Bank 
     Act, or any other provision of law applicable with respect to 
     the Oversight Board; and
       (B) existed on the day before the abolishment of the 
     Oversight Board in accordance with subsection (a).
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Oversight Board with respect to 
     any function of the Oversight Board shall abate by reason of 
     the enactment of this section.
       (3) Liabilities.--
       (A) In general.--All liabilities arising out of the 
     operation of the Oversight Board during the period beginning 
     on August 9, 1989, and the date that is 3 months after the 
     date of enactment of this Act shall remain the direct 
     liabilities of the United States.
       (B) No substitution.--The Secretary of the Treasury shall 
     not be substituted for the Oversight Board as a party to any 
     action or proceeding referred to in subparagraph (A).
       (4) Continuations of orders, resolutions, determinations, 
     and regulations pertaining to the resolution funding 
     corporation.--
       (A) In general.--All orders, resolutions, determinations, 
     and regulations regarding the Resolution Funding Corporation 
     shall continue in effect according to the terms of such 
     orders, resolutions, determinations, and regulations until 
     modified, terminated, set aside, or superseded in accordance 
     with applicable law if such orders, resolutions, 
     determinations, or regulations--
       (i) have been issued, made, and prescribed, or allowed to 
     become effective by the Oversight Board, or by a court of 
     competent jurisdiction, in the performance of functions 
     transferred by this section; and
       (ii) are in effect at the end of the 3-month period 
     beginning on the date of enactment of this section.
       (B) Enforceability of orders, resolutions, determinations, 
     and regulations before transfer.--Before the effective date 
     of the transfer of the authority and duties of the Resolution 
     Funding Corporation to the Secretary of the Treasury under 
     subsection (d), all orders, resolutions, determinations, and 
     regulations pertaining to the Resolution Funding Corporation 
     shall be enforceable by and against the United States.
       (C) Enforceability of orders, resolutions, determinations, 
     and regulations after transfer.--On and after the effective 
     date of the transfer of the authority and duties of the 
     Resolution Funding Corporation to the Secretary of the 
     Treasury under subsection (d), all orders, resolutions, 
     determinations, and regulations pertaining to the Resolution 
     Funding Corporation shall be enforceable by and against the 
     Secretary of the Treasury.
       (d) Transfer of Thrift Depositor Protection Oversight Board 
     Authority and Duties of Resolution Funding Corporation to 
     Secretary of the Treasury.--Effective at the end of the 3-
     month period beginning on the date of enactment of this Act, 
     the authority and duties of the Oversight Board under 
     sections 21A(a)(6)(I) and 21B of the Federal Home Loan Bank 
     Act are transferred to the Secretary of the Treasury (or the 
     designee of the Secretary).
       (e) Membership of the Affordable Housing Advisory Board.--
     Effective on the date of enactment of this Act, section 
     14(b)(2) of the Resolution Trust Corporation Completion Act 
     (12 U.S.C. 1831q note) is amended--
       (1) by striking subparagraph (C); and
       (2) by redesignating subparagraphs (D) and (E) as 
     subparagraphs (C) and (D), respectively.
       (f) Time of Meetings of the Affordable Housing Advisory 
     Board.--
       (1) In general.--Section 14(b)(6)(A) of the Resolution 
     Trust Corporation Completion Act (12 U.S.C. 1831q note) is 
     amended--
       (A) by striking ``4 times a year, or more frequently if 
     requested by the Thrift Depositor Protection Oversight Board 
     or'' and inserting ``2 times a year or at the request of''; 
     and
       (B) by striking the second sentence.
       (2) Clerical amendment.--Section 14(b)(6)(A) of the 
     Resolution Trust Corporation Completion Act (12 U.S.C. 1831q 
     note) is amended, in the subparagraph heading, by striking 
     ``and location''.
       Amend the title so as to read: ``A bill to require 
     automatic cancellation and notice of cancellation rights with 
     respect to private mortgage insurance which is required as a 
     condition for entering into a residential mortgage 
     transaction, to abolish the Thrift Depositor Protection 
     Oversight Board, and for other purposes.''.

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