[Congressional Record (Bound Edition), Volume 155 (2009), Part 9]
[House]
[Pages 11964-11990]
[From the U.S. Government Publishing Office, www.gpo.gov]




             MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

  The SPEAKER pro tempore. Pursuant to House Resolution 406 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the State of the Union for the further consideration of the bill, 
H.R. 1728.

                              {time}  1200


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the State of the Union for the further consideration of 
the bill (H.R. 1728) to amend the Truth in lending Act to reform 
consumer mortgage practices and provide accountability for such 
practices, to provide certain minimum standards for consumer mortgage 
loans, and for other purposes, with Mr. Ross in the chair.
  The Clerk read the title of the bill.
  The CHAIR. When the Committee of the Whole rose on Wednesday, May 6, 
2009, all time for general debate, pursuant to House Resolution 400, 
had expired.
  Pursuant to House Resolution 406, no further general debate is in 
order. The amendment in the nature of a substitute printed in the bill 
shall be considered as an original bill for the purpose of amendment 
under the 5-minute rule and shall be considered read.
  The text of the committee amendment is as follows:

                               H.R. 1728

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Mortgage 
     Reform and Anti-Predatory Lending Act''.
       (b) Table of Contents.--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.
Sec. 106. RESPA and TILA disclosure improvement.

               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.
Sec. 219. State Attorney General enforcement authority.
Sec. 220. Tenant protection.

                     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. Regulations.
Sec. 305. 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.
Sec. 409. Home inspection counseling.

                      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.

[[Page 11965]]

Sec. 504. Truth in Lending Act amendments.
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.
Sec. 606. Real Estate Settlement Procedures Act of 1974 amendment 
              relating to certain appraisal fees.

  TITLE VII--SENSE OF CONGRESS REGARDING THE IMPORTANCE OF GOVERNMENT 
                      SPONSORED ENTERPRISES REFORM

Sec. 701. Sense of Congress regarding the importance of Government-
              sponsored enterprises reform to enhance the protection, 
              limitation, and regulation of the terms of residential 
              mortgage credit.

        TITLE I--RESIDENTIAL MORTGAGE LOAN ORIGINATION STANDARDS

     SEC. 101. DEFINITIONS.

       Section 103 of the Truth in Lending Act (15 U.S.C. 1602) is 
     amended by adding at the end the following new subsection:
       ``(cc) Definitions Relating to Mortgage Origination and 
     Residential Mortgage Loans.--
       ``(1) Commission.--Unless otherwise specified, the term 
     `Commission' means the Federal Trade Commission.
       ``(2) Federal banking agencies.--The term `Federal banking 
     agencies' 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.
       ``(3) Mortgage originator.--The term `mortgage 
     originator'--
       ``(A) means any person who, for direct or indirect 
     compensation or gain, or in the expectation of direct or 
     indirect compensation or gain--
       ``(i) takes a residential mortgage loan application;
       ``(ii) assists a consumer in obtaining or applying to 
     obtain a residential mortgage loan; or
       ``(iii) offers or negotiates terms of a residential 
     mortgage loan;
       ``(B) 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);
       ``(C) does not include any person who is (i) 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, or (ii) an employee of a 
     retailer of manufactured homes who is not described in clause 
     (i) or (iii) of subparagraph (A);
       ``(D) does not include a person or entity that only 
     performs real estate brokerage activities and is licensed or 
     registered in accordance with applicable State law, unless 
     such person or entity is compensated for performing such 
     brokerage activities by a lender, a mortgage broker, or other 
     mortgage originator or by any agent of such lender, mortgage 
     broker, or other mortgage originator; and
       ``(E) does not include, with respect to a residential 
     mortgage loan, a person, estate, or trust that provides 
     mortgage financing for the sale of 1 property in any 36-month 
     period, provided that such loan--
       ``(i) is fully amortizing;
       ``(ii) is with respect to a sale for which the seller 
     determines in good faith and documents that the buyer has a 
     reasonable ability to repay the loan;
       ``(iii) has a fixed rate or an adjustable rate that is 
     adjustable after 5 or more years, subject to reasonable 
     annual and lifetime limitations on interest rate increases; 
     and
       ``(iv) meets any other criteria the Federal banking 
     agencies may prescribe.
       ``(4) Nationwide mortgage licensing system and registry.--
     The term `Nationwide Mortgage Licensing System and Registry' 
     has the same meaning as in the Secure and Fair Enforcement 
     for Mortgage Licensing Act of 2008.
       ``(5) Other definitions relating to mortgage originator.--
     For purposes of this subsection, a person `assists a consumer 
     in obtaining or applying to obtain a residential mortgage 
     loan' 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.
       ``(6) Residential mortgage loan.--The term `residential 
     mortgage loan' 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 or, for purposes of sections 129B and 129C and 
     section 128(a) (16), (17), and (18), 128(a)(f) and 128(b)(4) 
     and any regulations promulgated thereunder, an extension of 
     credit relating to a plan described in section 101(53D) of 
     title 11, United States Code.
       ``(7) Secretary.--The term `Secretary', when used in 
     connection with any transaction or person involved with a 
     residential mortgage loan, means the Secretary of Housing and 
     Urban Development.
       ``(8) Securitization vehicle.--The term `securitization 
     vehicle' means a trust, corporation, partnership, limited 
     liability entity, special purpose entity, or other structure 
     that--
       ``(A) 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
       ``(B) holds such loans.
       ``(9) Securitizer.--The term `securitizer' 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.
       ``(10) Servicer.--The term `servicer' has the same meaning 
     as in section 6(i)(2) of the Real Estate Settlement 
     Procedures Act of 1974.''.

     SEC. 102. RESIDENTIAL MORTGAGE LOAN ORIGINATION.

       (a) In General.--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:

     ``Sec. 129B. Residential mortgage loan origination

       ``(a) Finding and Purpose.--
       ``(1) Finding.--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, 
     while ensuring that responsible, affordable mortgage credit 
     remains available to consumers.
       ``(2) Purpose.--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.
       ``(b) Duty of Care.--
       ``(1) Standard.--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--
       ``(A) 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;
       ``(B) 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;
       ``(C) make full, complete, and timely disclosure to each 
     such consumer of--
       ``(i) the comparative costs and benefits of each 
     residential mortgage loan product offered, discussed, or 
     referred to by the originator;
       ``(ii) 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
       ``(iii) any relevant conflicts of interest between the 
     originator and the consumer;
       ``(D) 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
       ``(E) include on all loan documents any unique identifier 
     of the mortgage originator provided by the Nationwide 
     Mortgage Licensing System and Registry.
       ``(2) Clarification of extent of duty to present range of 
     products and appropriate products.--
       ``(A) No duty to offer products for which originator is not 
     authorized to take an application.--Paragraph (1)(B) shall 
     not be construed as requiring--
       ``(i) 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
       ``(ii) a creditor to offer products that the creditor does 
     not offer to the general public.
       ``(B) Appropriate loan product.--For purposes of paragraph 
     (1)(B), a residential mortgage loan shall be presumed to be 
     appropriate for a consumer if--
       ``(i) 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 129C; and
       ``(ii) the loan does not have predatory characteristics or 
     effects (such as equity stripping and excessive fees and 
     abusive terms) as determined

[[Page 11966]]

     in accordance with regulations prescribed under paragraph 
     (4).
       ``(3) Rules of construction.--No provision of this 
     subsection shall be construed as--
       ``(A) 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
       ``(B) 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.
       ``(4) Regulations.--
       ``(A) In general.--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--
       ``(i) further define the duty established under paragraph 
     (1);
       ``(ii) implement the requirements of this subsection;
       ``(iii) establish the time period within which any 
     disclosure required under paragraph (1) shall be made to the 
     consumer; and
       ``(iv) establish such other requirements for any mortgage 
     originator as such regulatory agencies may determine to be 
     appropriate to meet the purposes of this subsection.
       ``(B) Complementary and nonduplicative disclosures.--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--
       ``(i) are practicable; and
       ``(ii) do not reduce the value of any such disclosure to 
     recipients of such disclosures.
       ``(5) Compliance procedures required.--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.''.
       (b) Clerical Amendment.--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:

``129A. Fiduciary duty of servicers of pooled residential mortgages.
``129B. Residential mortgage loan origination.''.

     SEC. 103. PROHIBITION ON STEERING INCENTIVES.

       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:
       ``(c) Prohibition on Steering Incentives.--
       ``(1) In general.--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).
       ``(2) Regulations.--The Federal banking agencies, in 
     consultation with the Secretary and the Commission, shall 
     jointly prescribe regulations to prohibit--
       ``(A) mortgage originators from steering any consumer to a 
     residential mortgage loan that--
       ``(i) the consumer lacks a reasonable ability to repay (in 
     accordance with regulations prescribed under section 
     129C(a));
       ``(ii) 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 129C(b)); or
       ``(iii) has predatory characteristics or effects (such as 
     equity stripping, excessive fees, or abusive terms);
       ``(B) 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 
     129C(c)(3)) to a residential mortgage loan that is not a 
     qualified mortgage;
       ``(C) abusive or unfair lending practices that promote 
     disparities among consumers of equal credit worthiness but of 
     different race, ethnicity, gender, or age; and
       ``(D) mortgage originators from assessing excessive points 
     and fees (as such term is described under section 103(aa)(4) 
     of the Truth in Lending Act (15 U.S.C. 1602(aa)(4))) to a 
     consumer for the origination of a residential mortgage loan 
     based on such consumer's decision to finance all or part of 
     the payment through the rate for such points and fees.
       ``(3) Rules of construction.--No provision of this 
     subsection shall be construed as--
       ``(A) permitting yield spread premiums or other similar 
     incentive compensation;
       ``(B) affecting the mechanism for providing the total 
     amount of direct and indirect compensation permitted to a 
     mortgage originator;
       ``(C) limiting or affecting the amount of compensation 
     received by a creditor upon the sale of a consummated loan to 
     a subsequent purchaser;
       ``(D) restricting a consumer's ability to finance, 
     including through rate or principal, any origination fees or 
     costs permitted under this subsection, or the mortgage 
     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 129B(b)(1)(C)(i) and 
     do not vary based on the terms of the loan (other than the 
     amount of the principal) or the consumer's decision about 
     whether to finance such fees or costs; or
       ``(E) prohibiting incentive payments to a mortgage 
     originator based on the number of residential mortgage loans 
     originated within a specified period of time.''.

     SEC. 104. LIABILITY.

       Section 129B of the Truth in Lending Act is amended by 
     inserting after subsection (c) (as added by section 103) the 
     following new subsection:
       ``(d) Liability for Violations.--
       ``(1) In general.--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 `mortgage originator' for `creditor' 
     each place such term appears in each such subsection.
       ``(2) Maximum.--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 the greater of 
     actual damages or 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.''.

     SEC. 105. REGULATIONS.

       (a) Discretionary Regulatory Authority.--Section 129B of 
     the Truth in Lending Act is amended by inserting after 
     subsection (d) (as added by section 104) the following new 
     subsection:
       ``(e) Discretionary Regulatory Authority.--
       ``(1) In general.--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.
       ``(2) Application.--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.
       ``(f) Section 129B and any regulations promulgated 
     thereunder do not apply to an extension of credit relating to 
     a plan described in section 101(53D) of title 11, United 
     States Code.''.
       (b) Effective Date.--The regulations required or authorized 
     to be prescribed under this title or the amendments made by 
     this title--
       (1) 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
       (2) shall take effect not later than 18 months after the 
     date of the enactment of this Act.
       (c) Truth in Lending Final Rule.--Notwithstanding any other 
     provision of this Act, the regulations adopted by the Board 
     concerning Truth in Lending, 73 Fed. Reg. 44522 (July 30, 
     2008), shall take effect as decided by the Board with such 
     exceptions or revisions as the Board determines necessary.
       (d) Technical and Conforming Amendments.--Section 129(l)(2) 
     of the Truth in Lending Act (15 U.S.C. 1639(l)(2)) is amended 
     by inserting ``referred to in section 103(aa)'' after 
     ``loans'' each place such term appears.

     SEC. 106. RESPA AND TILA DISCLOSURE IMPROVEMENT.

       (a) Compatible Disclosures.--The Secretary of Housing and 
     Urban Development and the Board of Governors of the Federal 
     Reserve shall, not later than the expiration of the 6-month 
     period beginning upon the date of the enactment of this Act, 
     jointly issue for public comment proposed regulations 
     providing for compatible disclosures for borrowers to receive 
     at the time of mortgage application and at the time of 
     closing.
       (b) Requirements.--Such disclosures shall--
       (1) provide clear and concise information to borrowers on 
     the terms and costs of residential mortgage transactions and 
     mortgage transactions covered by the Truth in Lending Act (12 
     U.S.C. 1601 et seq.) and the Real Estate Settlement 
     Procedures Act of 1974 (12 U.S.C. 2601 et seq.);
       (2) satisfy the requirements of section 128 of the Truth in 
     Lending Act (12 U.S.C. 1638) and section 4 and 5 of the Real 
     Estate Settlement Procedures Act of 1974; and
       (3) comprise early disclosures under the Truth in Lending 
     Act and the good faith estimate disclosures under the Real 
     Estate Settlement Procedures Act of 1974 and final Truth in 
     Lending Act disclosures and the uniform settlement statement 
     disclosures under Real Estate Settlement Procedures Act of 
     1974 and provide for standardization to the greatest extent 
     possible among such disclosures from mortgage origination 
     through the mortgage settlement.
       (4) shall include, with respect to a residential home 
     mortgage loan, a written statement of--
       (A) the principal amount of the loan;
       (B) the term of the loan;
       (C) whether the loan has a fixed rate of interest or an 
     adjustable rate of interest;
       (D) the annual percentage rate of interest under the loan 
     as of the time of the disclosure;
       (E) if the rate of interest under the loan can adjust after 
     the disclosure, for each such possible adjustment--

[[Page 11967]]

       (i) when such adjustment will or may occur; and
       (ii) the maximum annual percentage rate of interest to 
     which it can be adjusted;
       (F) the total monthly payment under the loan (including 
     loan principal and interest, property taxes, and insurance) 
     at the time of the disclosure;
       (G) the maximum total estimated monthly maximum payment 
     pursuant to each such possible adjustment;
       (H) the total settlement charges in connection with the 
     loan and the amount of any downpayment and cash required at 
     settlement; and
       (I) whether or not the loan has a prepayment penalty or 
     balloon payment and the terms, timing, and amount of any such 
     penalty or payment.
       (c) Suspension of 2008 RESPA Rule.--
       (1) Requirement.--The Secretary of Housing and Urban 
     Development shall, during the period beginning on the date of 
     the enactment of this Act and ending upon issuance of 
     proposed regulations pursuant to subsection (a), suspend 
     implementation of any provisions of the final rule referred 
     to in paragraph (2) that would establish and implement a new 
     standardized good faith estimate and a new standardized 
     uniform settlement statement. Any such provisions shall be 
     replaced by the regulations issued pursuant to subsections 
     (a) and (b).
       (2) 2008 rule.--The final rule referred to in this 
     paragraph is the rule of the Department of Housing and Urban 
     Development published on November 17, 2008, on pages 68204-
     68288 of Volume 73 of the Federal Register (Docket No. FR-
     5180-F-03; relating to ``Real Estate Settlement Procedures 
     Act (RESPA): Rule to Simplify and Improve the Process of 
     Obtaining Mortgages and Reduce Consumer Settlement Costs'').
       (d) Implementation.--The regulations required under 
     subsection (a) shall take effect, and shall provide an 
     implementation date for the new disclosures required under 
     such regulations, not later than the expiration of the 12-
     month period beginning upon the date of the enactment of this 
     Act.
       (e) Failure To Issue Compatible Disclosures.--If the 
     Secretary of Housing and Urban Development and the Board of 
     Governors of the Federal Reserve System cannot agree on 
     compatible disclosures pursuant to subsections (a) and (b), 
     the Secretary and the Board shall submit a report to the 
     Congress, after the 6-month period referred to in subsection 
     (a), explaining the reasons for such disagreement. After the 
     15-day period beginning upon submission of such report, the 
     Secretary and the Board may separately issue for public 
     comment regulations providing for disclosures under the Real 
     Estate Settlement Procedures Act of 1974 and the Truth in 
     Lending Act, respectively. Any final disclosures as a result 
     of such regulations issued by the Secretary and the Board 
     shall take effect on the same date, and not later than the 
     expiration of the 12-month period beginning on the date of 
     the enactment of this Act. If either the Secretary or the 
     Board fails to act during such 12-month period, either such 
     agency may act independently and implement final regulations.

               TITLE II--MINIMUM STANDARDS FOR MORTGAGES

     SEC. 201. ABILITY TO REPAY.

       (a) In General.--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:

     ``Sec. 129C. Minimum standards for residential mortgage loans

       ``(a) Ability To Repay.--
       ``(1) In general.--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.
       ``(2) Multiple loans.--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.
       ``(3) Basis for determination.--A determination under this 
     subsection of a consumer's ability to repay a residential 
     mortgage loan shall include 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.
       ``(4) Nonstandard loans.--
       ``(A) Variable rate loans that defer repayment of any 
     principal or interest.--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.
       ``(B) Interest-only loans.--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 shall use the payment 
     amount required to amortize the loan by its final maturity.
       ``(C) Calculation for negative amortization.--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.
       ``(D) Calculation process.--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--
       ``(i) the loan proceeds are fully disbursed on the date of 
     the consummation of the loan;
       ``(ii) 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
       ``(iii) 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.
       ``(5) Fully-indexed rate defined.--For purposes of this 
     subsection, the term `fully indexed rate' 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.''.
       (b) Clerical Amendment.--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:

``129C. Minimum standards for residential mortgage loans.''.

     SEC. 202. NET TANGIBLE BENEFIT FOR REFINANCING OF RESIDENTIAL 
                   MORTGAGE LOANS.

       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:
       ``(b) Net Tangible Benefit for Refinancing of Residential 
     Mortgage Loans.--
       ``(1) In general.--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.
       ``(2) Certain loans providing no net tangible benefit.--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.
       ``(3) Net tangible benefit.--The Federal banking agencies 
     shall jointly prescribe regulations defining the term `net 
     tangible benefit' for purposes of this subsection.''.

     SEC. 203. SAFE HARBOR AND REBUTTABLE PRESUMPTION.

       Section 129C of the Truth in Lending Act is amended by 
     inserting after subsection (b) (as added by section 202) the 
     following new subsection:
       ``(c) Presumption of Ability To Repay and Net Tangible 
     Benefit.--
       ``(1) In general.--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.
       ``(2) Definitions.--For purposes of this subsection, the 
     following definitions shall apply:
       ``(A) Qualified mortgage.--The term `qualified mortgage' 
     means any residential mortgage loan--
       ``(i) that does not allow a consumer to defer repayment of 
     principal or interest, or is not otherwise deemed a `non-
     traditional mortgage' under guidance, advisories, or 
     regulations prescribed by the Federal Banking Agencies;
       ``(ii) that does not provide for a repayment schedule that 
     results in negative amortization at any time;
       ``(iii) for which the terms are fully amortizing and which 
     does not result in a balloon payment, where a `balloon 
     payment' is a scheduled payment that is more than twice as 
     large as the average of earlier scheduled payments;
       ``(iv) which has 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--

       ``(I) by 1.5 or more percentage points, in the case of a 
     first lien residential mortgage loan having a original 
     principal obligation amount that does not exceed the amount 
     of the maximum limitation on the original principal 
     obligation of mortgage in effect for a residence of the 
     applicable size, as of the date of such interest rate set, 
     pursuant to the sixth sentence of section 305(a)(2) the 
     Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1454(a)(2)); and
       ``(II) by 2.5 or more percentage points, in the case of a 
     first lien residential mortgage loan having a original 
     principal obligation amount

[[Page 11968]]

     that exceeds the amount of the maximum limitation on the 
     original principal obligation of mortgage in effect for a 
     residence of the applicable size, as of the date of such 
     interest rate set, pursuant to the sixth sentence of section 
     305(a)(2) the Federal Home Loan Mortgage Corporation Act (12 
     U.S.C. 1454(a)(2));

       ``(v) for which the income and financial resources relied 
     upon to qualify the obligors on the loan are verified and 
     documented;
       ``(vi) in the case of a fixed rate loan, for which the 
     underwriting process is based on a payment schedule that 
     fully amortizes the loan over the loan term and takes into 
     account all applicable taxes, insurance, and assessments;
       ``(vii) in the case of an adjustable rate loan, for which 
     the underwriting is based on the maximum rate permitted under 
     the loan during the first seven years, and a payment schedule 
     that fully amortizes the loan over the loan term and takes 
     into account all applicable taxes, insurance, and 
     assessments;
       ``(viii) 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 such rules shall also take into consideration the 
     consumer's income available to pay regular expenses after 
     payment of all installment and revolving debt;
       ``(ix) for which the total points and fees payable in 
     connection with the loan do not exceed 2 percent of the total 
     loan amount, where `points and fees' means points and fees as 
     defined by Section 103(aa)(4) of the Truth in Lending Act (15 
     U.S.C. 1602(aa)(4)); and
       ``(x) for which the term of the loan does not exceed 30 
     years, except as such term may be extended under paragraph 
     (4).
       ``(B) Average prime offer rate.--The term `average prime 
     offer rate' 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.
       ``(3) Publication of average prime offer rate.--The Board--
       ``(A) shall publish, and update at least weekly, average 
     prime offer rates; and
       ``(B) may publish multiple rates based on varying types of 
     mortgage transactions.
       ``(4) Regulations.--
       ``(A) In general.--The Federal banking agencies shall 
     jointly prescribe regulations to carry out the purposes of 
     this subsection.
       ``(B) Revision of safe harbor criteria.--
       ``(i) In general.--The Federal banking agencies may jointly 
     prescribe regulations that revise, add to, or subtract from 
     the criteria that define a qualified mortgage upon a finding 
     that such regulations are necessary and appropriate to 
     effectuate the purposes of this section and section 129B, to 
     prevent circumvention or evasion thereof, or to facilitate 
     compliance with such sections.
       ``(ii) Loan definition.--The following agencies shall 
     prescribe rules defining the types of loans they insure, 
     guarantee or administer, as the case may be, that are 
     Qualified Mortgages for purposes of subsection (c)(1)(A) upon 
     a finding that such rules are consistent with the purposes of 
     this section and section 129B, to prevent circumvention or 
     evasion thereof, or to facilitate compliance with such 
     sections--

       ``(I) The Department of Housing and Urban Development, with 
     regard to mortgages insured under title II of the National 
     Housing Act (12 U.S.C. 1707 et seq.);
       ``(II) The Secretary of Veterans Affairs, with regard to a 
     loan made or guaranteed by the Secretary of Veterans Affairs;
       ``(III) The Secretary of Agriculture, with regard loans 
     guaranteed by the Secretary of Agriculture pursuant to 42 
     U.S.C. 1472(h);
       ``(IV) The Federal Housing Finance Agency, with regard to 
     loans meeting the conforming loan standards of the Federal 
     National Mortgage Corporation or the Federal Home Loan 
     Mortgage Corporation; and
       ``(V) The Rural Housing Service, with regard to loans 
     insured by the Rural Housing Service.''.

     SEC. 204. LIABILITY.

       Section 129C of the Truth in Lending Act is amended by 
     inserting after subsection (c) (as added by section 203) the 
     following new subsection:
       ``(d) Liability for Violations.--
       ``(1) In general.--
       ``(A) Rescission.--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 (9), 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.
       ``(B) Cure.--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.
       ``(2) Limited assignee and securitizer liability.--
     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:
       ``(A) Rescission of the loan.
       ``(B) 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.
       ``(3) Assignee and securitizer exemption.--No assignee or 
     securitizer of a residential mortgage loan that has exercised 
     reasonable due diligence in complying with the requirements 
     of subsections (a) and (b) 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).
       ``(4) Absent parties.--
       ``(A) Absent creditor.--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, conservator, 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.
       ``(B) Absent creditor and assignee.--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, conservators, or liquidating agents 
     appointed, the consumer may maintain the civil action 
     referred to in subparagraph (A) against the securitizer.
       ``(5) Cure defined.--For purposes of this subsection, the 
     term `cure' 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 satisfy the requirements of subsections 
     (a) and (b) and the payment of such additional costs as the 
     obligor may have incurred in connection with obtaining a cure 
     of the loan, including a reasonable attorney's fee.
       ``(6) Disagreement over cure.--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--
       ``(A) the creditor, assignee, or securitizer may provide 
     the cure; and
       ``(B) the consumer may challenge the adequacy of the cure 
     during the 6-month period beginning when the cure is 
     provided.
     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).
       ``(7) Inability to provide or obtain rescission.--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.
       ``(8) No class actions against assignee or securitizer 
     under paragraph (2).--Only individual actions may be brought 
     against an assignee or securitizer of a residential mortgage 
     loan for a violation of subsection (a) or (b).
       ``(9) Statute of limitations.--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--
       ``(A) 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
       ``(B) 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--
       ``(i) the end of the 1-year period beginning on the date of 
     such reset, adjustment, or conversion; or
       ``(ii) the end of the 6-year period beginning on the date 
     the loan is consummated.
       ``(10) Pools and investors in pools excluded.--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 `assignee' and `securitizer', 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.
       ``(e) Obligation of Securitizers, and Preservation of 
     Borrower Remedies.--
       ``(1) Obligation to retain access.--Any securitizer of a 
     residential mortgage loan sold or

[[Page 11969]]

     to be sold as part of a securitization vehicle shall, in any 
     document or contract providing for the transfer, conveyance, 
     or the establishment of such securitization vehicle, reserve 
     the right and preserve the ability--
       ``(A) to identify and obtain access to any such loan;
       ``(B) to acquire any such loan in the event of a violation 
     of subsections (a) or (b) of this section; and
       ``(C) to provide to the consumer any and all remedies 
     provided for under this title for any violation of this 
     title.
       ``(2) Additional damages.--Any creditor, assignee, or 
     securitizer of a residential mortgage loan that is subject to 
     a remedy under subsection (d) and has failed to comply with 
     paragraph (1) shall be subject to additional exemplary or 
     punitive damages not to exceed the original principal balance 
     of such loan.
       ``(3) Contact information notice.--The servicer with 
     respect to a residential mortgage loan shall provide a 
     written notice to a consumer identifying the name and contact 
     information 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. 
     Such notice shall be provided--
       ``(A) upon request of the consumer;
       ``(B) whenever there is a change in ownership of a 
     residential mortgage loan; or
       ``(C) on a regular basis, not less than annually.
       ``(f) Rules To Establish Process.--The Board shall 
     promulgate rules to govern the rescission process established 
     for violations of subsections (a) and (b) of this section. 
     Such rules shall provide that notice given to a servicer or 
     holder is sufficient notice regardless of the identity of the 
     party or the parties liable under this title.''.

     SEC. 205. DEFENSE TO FORECLOSURE.

       Section 129C of the Truth in Lending Act is amended by 
     inserting after subsection (f) (as added by section 204) the 
     following new subsections:
       ``(g) Defense to Foreclosure.--Notwithstanding any other 
     provision of law--
       ``(1) when the holder of a residential mortgage loan or 
     anyone acting for such holder initiates a judicial or 
     nonjudicial foreclosure--
       ``(A) 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
       ``(B) if the foreclosure proceeding begins after the end of 
     the period during which a consumer may bring an action for 
     rescission under subsection (d) 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
       ``(2) 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.''.

     SEC. 206. ADDITIONAL STANDARDS AND REQUIREMENTS.

       (a) In General.--Section 129C of the Truth in Lending Act 
     is amended by inserting after subsection (g) (as added by 
     section 205) the following new subsections:
       ``(h) Prohibition on Certain Prepayment Penalties.--
       ``(1) Prohibited on certain loans.--A residential mortgage 
     loan that is not a `qualified mortgage' 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. For purposes of this subsection, a `qualified 
     mortgage' may not include a residential mortgage loan that 
     has an adjustable rate.
       ``(2) Phased-out penalties on qualified mortgages.--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:
       ``(A) 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.
       ``(B) 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.
       ``(C) 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.
       ``(D) 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.
       ``(3) Prohibited after initial period on loans with a 
     reset.--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.
       ``(4) Option for no prepayment penalty required.--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.
       ``(i) Single Premium Credit Insurance Prohibited.--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--
       ``(1) 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
       ``(2) this subsection shall not apply to credit 
     unemployment insurance for which the unemployment insurance 
     premiums are reasonable, 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.
       ``(j) Arbitration.--
       ``(1) In general.--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.
       ``(2) Post-controversy agreements.--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.
       ``(3) No waiver of statutory cause of action.--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.
       ``(k) Mortgages With Negative Amortization.--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--
       ``(1) the creditor provides the consumer with a statement 
     that--
       ``(A) the pending transaction will or may, as the case may 
     be, result in negative amortization;
       ``(B) describes negative amortization in such manner as the 
     Federal banking agencies shall prescribe;
       ``(C) negative amortization increases the outstanding 
     principal balance of the account; and
       ``(D) negative amortization reduces the consumer's equity 
     in the dwelling or real property; and
       ``(2) 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.''.
       (b) Conforming Amendment Relating to Enforcement.--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:
       ``(7) 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.''.

     SEC. 207. RULE OF CONSTRUCTION.

       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.

     SEC. 208. EFFECT ON STATE LAWS.

       (a) In General.--Except as provided in subsection (b), 
     section 129C(d) of the Truth in Lending Act (as added by 
     section 204) shall supersede any State law to the extent that 
     it provides additional remedies against any assignee,

[[Page 11970]]

     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 
     section 129C of such Act, and the remedies described in 
     section 129C(d) shall constitute the sole remedies against 
     any assignee, securitizer, or securitization vehicle for such 
     violations.
       (b) Rules of Construction.--No provision of this section 
     shall be construed as limiting--
       (1) the application of any State law, or the availability 
     of remedies under such law, against a creditor for a 
     particular residential mortgage loan regardless of whether 
     such creditor also acts as an assignee, securitizer, or 
     securitization vehicle for such loan;
       (2) the application of any State law, or the availability 
     of remedies under such law, against an assignee, securitizer, 
     or securitization vehicle under State law, other than a 
     provision of such 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 
     section 129C of such Act;
       (3)(A) the application of any State law, or the 
     availability of remedies under such law, against an assignee, 
     securitizer or securitization vehicle for its participation 
     in or direction of the credit or underwriting decisions of a 
     creditor relating to the making of a residential mortgage 
     loan; or
       (B) the ability of a consumer to assert any rights against 
     or obtain any remedies from an assignee, securitizer or 
     securitization vehicle with respect to a residential mortgage 
     loan as a defense to foreclosure under section 129C(g); or
       (4) the availability of any equitable remedies, including 
     injunctive relief, under State law.

     SEC. 209. REGULATIONS.

       Regulations required or authorized to be prescribed under 
     this title or the amendments made by this title--
       (1) 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
       (2) shall take effect not later than 18 months after the 
     date of the enactment of this Act.

     SEC. 210. AMENDMENTS TO CIVIL LIABILITY PROVISIONS.

       (a) Increase in Amount of Civil Money Penalties for Certain 
     Violations.--Section 130(a)(2) of the Truth in Lending Act 
     (15 U.S.C. 1640(a)(2)) is amended--
       (1) by striking ``$100'' and inserting ``$200'';
       (2) by striking ``$1,000'' and inserting ``$2,000''; and
       (3) by striking ``$500,000'' and inserting ``$1,000,000''.
       (b) Statute of Limitations Extended for Section 129 
     Violations.--Section 130(e) of the Truth in Lending Act (15 
     U.S.C. 1640(e)) is amended--
       (1) in the first sentence, by striking ``Any action'' and 
     inserting ``Except as provided in the subsequent sentence, 
     any action''; and
       (2) by inserting after the first sentence the following new 
     sentence: ``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.''.

     SEC. 211. LENDER RIGHTS IN THE CONTEXT OF BORROWER DECEPTION.

       Section 130 of the Truth in Lending Act is amended by 
     adding at the end the following new subsection:
       ``(k) Exemption From Liability and Rescission in Case of 
     Borrower Fraud or Deception.--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.''.

     SEC. 212. SIX-MONTH NOTICE REQUIRED BEFORE RESET OF HYBRID 
                   ADJUSTABLE RATE MORTGAGES.

       (a) In General.--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:

     ``Sec. 128A. Reset of hybrid adjustable rate mortgages

       ``(a) Hybrid Adjustable Rate Mortgages Defined.--For 
     purposes of this section, the term `hybrid adjustable rate 
     mortgage' 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.
       ``(b) Notice of Reset and Alternatives.--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 or, in the case of such an adjustment 
     or resetting that occurs within the first 6 months after 
     consummation of such loan, at consummation, 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:
       ``(1) Any index or formula used in making adjustments to or 
     resetting the interest rate and a source of information about 
     the index or formula.
       ``(2) 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.
       ``(3) 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.
       ``(4) 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--
       ``(A) refinancing;
       ``(B) renegotiation of loan terms;
       ``(C) payment forbearances; and
       ``(D) pre-foreclosure sales.
       ``(5) 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).
       ``(6) The address, telephone number, and Internet address 
     for the State housing finance authority (as so defined) for 
     the State in which the consumer resides.''.
       (b) Clerical Amendment.--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:

``128A. Reset of hybrid adjustable rate mortgages.''.

     SEC. 213. CREDIT RISK RETENTION.

       Section 129C of the Truth in Lending Act is amended by 
     inserting after subsection (k) (as added by section 206) the 
     following new subsection:
       ``(l) Credit Risk Retention.--
       ``(1) In general.--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 129C(c)(2)(A)), 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.
       ``(2) Standards for regulations.--Regulations prescribed 
     under paragraph (1) shall--
       ``(A) apply only to residential mortgage loans that are not 
     qualified mortgages (as so defined);
       ``(B) 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;
       ``(C) require creditors to retain at least 5 percent of the 
     credit risk on any non-qualified mortgage that is 
     transferred, sold or conveyed; and
       ``(D) specify the permissible forms of the required risk 
     retention (for example, first loss position or pro rata 
     vertical slice) and the minimum duration of the required risk 
     retention.
       ``(3) Exceptions and adjustments.--
       ``(A) In general.--The Federal banking agencies shall have 
     authority to provide exceptions or adjustments to the 
     requirements of this subsection, including exceptions or 
     adjustments relating to the 5 percent risk retention 
     threshold and the hedging prohibition.
       ``(B) Applicable standards.--Any exceptions or adjustments 
     granted by the Federal banking agencies shall--
       ``(i) be consistent with the purpose of this subsection to 
     help ensure high quality underwriting standards for mortgage 
     lenders; and
       ``(ii) facilitate appropriate risk management practices by 
     mortgage lenders, improve access of consumers to mortgage 
     credit on reasonable terms, or otherwise serve the public 
     interest.
       ``(4) Alternative risk retention for securitization 
     sponsors.--The Federal banking agencies shall have discretion 
     to apply the risk retention requirements of this subsection 
     to securitizers of non-qualified mortgages in addition to or 
     in place of creditors that make non-qualified mortgages if 
     the agencies determine that applying the requirements to 
     securitization sponsors rather than originators would--
       ``(A) be consistent with the purpose of this subsection to 
     help ensure high quality underwriting standards for mortgage 
     lenders; and
       ``(B) facilitate appropriate risk management practices by 
     mortgage lenders, or improve access of consumers to mortgage 
     credit on reasonable terms.
       ``(m) Section 129C and any regulations promulgated 
     thereunder do not apply to an extension of credit relating to 
     a plan described in section 101(53D) of title 11, United 
     States Code.''.

     SEC. 214. REQUIRED DISCLOSURES.

       (a) Additional Information.--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:
       ``(16) 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--
       ``(A) 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
       ``(B) 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.

[[Page 11971]]

       ``(17) 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.
       ``(18) 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.''.
       (b) Timing.--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:
       ``(4) Residential mortgage loan disclosures.--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--
       ``(A) the time required under the first sentence of 
     paragraph (1); or
       ``(B) the end of the 3-business-day period beginning on the 
     date the application for the loan from a consumer is received 
     by the creditor.''.

     SEC. 215. DISCLOSURES REQUIRED IN MONTHLY STATEMENTS FOR 
                   RESIDENTIAL MORTGAGE LOANS.

       Section 128 of the Truth in Lending Act (15 U.S.C. 1638) is 
     amended by adding at the end the following new subsection:
       ``(f) Periodic Statements for Residential Mortgage Loans.--
       ``(1) In general.--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:
       ``(A) The amount of the principal obligation under the 
     mortgage.
       ``(B) The current interest rate in effect for the loan.
       ``(C) The date on which the interest rate may next reset or 
     adjust.
       ``(D) The amount of any prepayment fee to be charged, if 
     any.
       ``(E) A description of any late payment fees.
       ``(F) A telephone number and electronic mail address that 
     may be used by the obligor to obtain information regarding 
     the mortgage.
       ``(G) Such other information as the Board may prescribe in 
     regulations.
       ``(2) Development and use of standard form.--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.''.

     SEC. 216. LEGAL ASSISTANCE FOR FORECLOSURE-RELATED ISSUES.

       (a) Establishment.--The Secretary of Housing and Urban 
     Development (hereafter in this section referred to as the 
     ``Secretary'' 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.
       (b) Competitive Allocation.--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. For purposes of this subsection ``State and local 
     legal organizations'' are those State and local organizations 
     whose primary business or mission is to provide legal 
     assistance.
       (c) Priority to Certain Areas.--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.
       (d) Legal Assistance.--
       (1) In general.--Any State or local legal organization that 
     receives financial assistance pursuant to this section may 
     use such amounts only to assist--
       (A) homeowners of owner-occupied homes with mortgages in 
     default, in danger of default, or subject to or at risk of 
     foreclosure; and
       (B) tenants at risk of or subject to eviction as a result 
     of foreclosure of the property in which such tenant resides.
       (2) Commence use within 90 days.--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.
       (3) Prohibition on class actions.--No funds provided to a 
     State or local legal organization under this section may be 
     used to support any class action litigation.
       (4) Limitation on legal assistance.--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.
       (5) Effective date.--Notwithstanding section 217, this 
     subsection shall take effect on the date of the enactment of 
     this Act.
       (e) Limitation on Distribution of Assistance.--
       (1) In general.--None of the amounts made available under 
     this section shall be distributed to--
       (A) any organization which has been indicted for a 
     violation under Federal law relating to an election for 
     Federal office; or
       (B) any organization which employs applicable individuals.
       (2) Definition of applicable individual.--In this 
     subparagraph, the term ``applicable individual'' means an 
     individual who--
       (A) is--
       (i) employed by the organization in a permanent or 
     temporary capacity;
       (ii) contracted or retained by the organization; or
       (iii) acting on behalf of, or with the express or apparent 
     authority of, the organization; and
       (B) has been indicted for a violation under Federal law 
     relating to an election for Federal office.
       (f) Authorization of Appropriations.--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.

     SEC. 217. EFFECTIVE DATE.

       The amendments made by this title shall apply to 
     transactions consummated on or after the effective date of 
     the regulations specified in section 209.

     SEC. 218. REPORT BY THE GAO.

       (a) Report Required.--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--
       (1) on the mortgage market for mortgages that are not 
     within the safe harbor provided in the amendments made by 
     this title;
       (2) on the ability of prospective homebuyers to obtain 
     financing;
       (3) 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;
       (4) on minorities' ability to access affordable credit 
     compared with other prospective borrowers;
       (5) on home sales and construction;
       (6) of extending the rescission right, if any, on 
     adjustable rate loans and its impact on litigation;
       (7) of State foreclosure laws and, if any, an investor's 
     ability to transfer a property after foreclosure;
       (8) of expanding the existing provisions of the Home 
     Ownership and Equity Protection Act of 1994;
       (9) of prohibiting prepayment penalties on high-cost 
     mortgages; and
       (10) of establishing counseling services under the 
     Department of Housing and Urban Development and offered 
     through the Office of Housing Counseling.
       (b) Report.--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).
       (c) Examination Related to Certain Credit Risk Retention 
     Provisions.--The report required by subsection (b) shall also 
     include an analysis by the Comptroller General of the effect 
     on the capital reserves and funding of lenders of credit risk 
     retention provisions for non-qualified mortgages.

     SEC. 219. STATE ATTORNEY GENERAL ENFORCEMENT AUTHORITY.

       Section 130(e) of the Truth in Lending Act (15 U.S.C. 
     1640(e)) is amended by striking ``section 129 may also'' and 
     inserting ``section 129, 129B, or 129C of this Act, section 
     219 of the Mortgage Reform and Anti-Predatory Lending Act, or 
     any amendment made by section 219 of the Mortgage Reform and 
     Anti-Predatory Lending Act may also''.

     SEC. 220. TENANT PROTECTION.

       (a) Tenant Protection Generally.--
       (1) In general.--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, the immediate successor in interest in such property 
     pursuant to the foreclosure shall assume such interest 
     subject to--
       (A) 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 date of foreclosure, 
     to occupy the premises until the end of the remaining term of 
     the lease; and
       (B) 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.
       (2) Exception for subsequent owner-occupant.--
     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--
       (A) such purchaser may terminate a lease relating to such 
     unit on the effective date of a notice to vacate; and
       (B) 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.
       (3) Bona fide lease or tenancy.--For purposes of this 
     subsection, a lease or tenancy shall be considered bona fide 
     only if--

[[Page 11972]]

       (A) the mortgagor under the contract is not the tenant;
       (B) the lease or tenancy was the result of an arms-length 
     transaction; and
       (C) the lease or tenancy requires the receipt of rent that 
     is not substantially less than fair market rent for the 
     property or the unit's rent is reduced or subsidized due to a 
     Federal, State, or local subsidy.
       (4) Rule of construction.--Except for the specific 
     provisions of this subsection, no provision of this 
     subsection shall be construed as affecting the requirements 
     for termination of any Federal- or State-subsidized tenancy. 
     The provisions of this subsection shall not be construed to 
     limit any State or local law that provides longer time 
     periods or other additional protections for tenants.
       (b) Corresponding Provision Relating to Effect of 
     Foreclosures on Section 8 Tenancies.--Paragraph (7) of 
     section 8(o) of the United States Housing Act of 1937 (42 
     U.S.C. 1437f(o)(7)) is amended--
       (1) in subparagraph (C), by inserting before the semicolon 
     at the end the following: ``, and in the case of an owner who 
     is an immediate successor in interest pursuant to 
     foreclosure--
       ``(i) during the initial term of the tenant's lease, having 
     the property vacant prior to sale shall not constitute good 
     cause; and
       ``(ii) in subsequent lease terms of the tenant's lease, who 
     will occupy the unit as a primary residence, who sells the 
     property to a purchaser who will occupy a unit of the 
     property as a primary residence, or if the unit is 
     unmarketable while occupied, such owner may terminate a lease 
     relating to such unit for good cause on the effective date of 
     the notice to vacate, where such notice is provided by the 
     owner to the tenant in such unit at least 90 days before the 
     effective date of such notice;''.
       (2) in subparagraph (E), by striking ``and'' at the end;
       (3) by redesignating subparagraph (F) as subparagraph (G); 
     and
       (4) by inserting after subparagraph (E) the following:
       ``(F) 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--
       ``(i) 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
       ``(ii) for the family's reasonable moving costs, including 
     security deposit costs;

     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.''.
       (c) Effective Date.--Notwithstanding section 217, this 
     section and the amendments made by this section shall take 
     effect on the date of the enactment of this Act.

                     TITLE III--HIGH-COST MORTGAGES

     SEC. 301. DEFINITIONS RELATING TO HIGH-COST MORTGAGES.

       (a) High-Cost Mortgage Defined.--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:
       ``(aa) High-Cost Mortgage.--
       ``(1) Definition.--
       ``(A) In general.--The term `high-cost mortgage', 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--
       ``(i) in the case of a credit transaction secured--

       ``(I) by a first mortgage on the consumer's principal 
     dwelling, the annual percentage rate at consummation of the 
     transaction will exceed by more than 6.5 percentage points 
     (8.5 percentage points, if the dwelling is personal property 
     and the transaction is for less than $50,000) the average 
     prime offer rate, as defined in section 129C(c)(2)(B), for a 
     comparable transaction; or
       ``(II) 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 8.5 
     percentage points the average prime offer rate, as defined in 
     section 129C(c)(2)(B), for a comparable transaction;

       ``(ii) the total points and fees payable in connection with 
     the transaction exceed--

       ``(I) in the case of a transaction for $20,000 or more, 5 
     percent of the total transaction amount; or
       ``(II) 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 such other dollar amount as the Board shall 
     prescribe by regulation); or

       ``(iii) 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.
       ``(B) Introductory rates taken into account.--For purposes 
     of subparagraph (A)(i), the annual percentage rate of 
     interest shall be determined based on the following interest 
     rate:
       ``(i) 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.
       ``(ii) 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.
       ``(iii) 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.''.
       (b) Adjustment of Percentage Points.--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:
       ``(B) An increase or decrease under subparagraph (A)--
       ``(i) 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
       ``(ii) 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.''.
       (c) Points and Fees Defined.--
       (1) In general.--Section 103(aa)(4) of the Truth in Lending 
     Act (15 U.S.C. 1602(aa)(4)) is amended--
       (A) by striking subparagraph (B) and inserting the 
     following:
       ``(B) 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;'';
       (B) in subparagraph (C)(ii), by inserting ``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'' before the semicolon at the end;
       (C) in subparagraph (C)(iii), by striking ``; and'' and 
     inserting ``, except as provided for in clause (ii);'';
       (D) by redesignating subparagraph (D) as subparagraph (G); 
     and
       (E) by inserting after subparagraph (C) the following new 
     subparagraphs:
       ``(D) 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;
       ``(E) 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;
       ``(F) 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''.
       (2) Calculation of points and fees for open-end consumer 
     credit plans.--Section 103(aa) of the Truth in Lending Act 
     (15 U.S.C. 1602(aa)) is amended--
       (A) by redesignating paragraph (5) as paragraph (6); and
       (B) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) Calculation of points and fees for open-end consumer 
     credit plans.--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.''.
       (d) Bona Fide Discount Loan Discount Points and Prepayment 
     Penalties.--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:
       ``(dd) Bona Fide Discount Points and Prepayment 
     Penalties.--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:

[[Page 11973]]

       ``(1) Exclusion of bona fide discount points.--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):
       ``(A) 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 (i) 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, or (ii) if secured by a personal 
     property loan, the average rate on a loan in connection with 
     which insurance is provided under title I of the National 
     Housing Act (12 U.S.C. 1702 et seq.).
       ``(B) 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 (i) 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, or (ii) if secured by a 
     personal property loan, the average rate on a loan in 
     connection with which insurance is provided under title I of 
     the National Housing Act (12 U.S.C. 1702 et seq.).
       ``(2) Definition.--For purposes of paragraph (1), the term 
     `bona fide discount points' 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.
       ``(3) Exception for interest rate reductions inconsistent 
     with industry norms.--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.''.

     SEC. 302. AMENDMENTS TO EXISTING REQUIREMENTS FOR CERTAIN 
                   MORTGAGES.

       (a) Prepayment Penalty Provisions.--Section 129(c)(2) of 
     the Truth in Lending Act (15 U.S.C. 1639(c)(2)) is hereby 
     repealed.
       (b) No Balloon Payments.--Section 129(e) of the Truth in 
     Lending Act (15 U.S.C. 1639(e)) is amended to read as 
     follows:
       ``(e) No Balloon Payments.--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.''.

     SEC. 303. ADDITIONAL REQUIREMENTS FOR CERTAIN MORTGAGES.

       (a) Additional Requirements for Certain Mortgages.--Section 
     129 of the Truth in Lending Act (15 U.S.C. 1639) is amended--
       (1) by redesignating subsections (j), (k) and (l) as 
     subsections (n), (o) and (p) respectively; and
       (2) by inserting after subsection (i) the following new 
     subsections:
       ``(j) Recommended Default.--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.
       ``(k) Late Fees.--
       ``(1) In general.--No creditor may impose a late payment 
     charge or fee in connection with a high-cost mortgage--
       ``(A) in an amount in excess of 4 percent of the amount of 
     the payment past due;
       ``(B) unless the loan documents specifically authorize the 
     charge or fee;
       ``(C) 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
       ``(D) more than once with respect to a single late payment.
       ``(2) Coordination with subsequent late fees.--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.
       ``(3) Failure to make installment payment.--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.
       ``(l) Acceleration of Debt.--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.
       ``(m) Restriction on Financing Points and Fees.--No 
     creditor may directly or indirectly finance, in connection 
     with any high-cost mortgage, any of the following:
       ``(1) 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.
       ``(2) Any points or fees.''.
       (b) Prohibitions on Evasions.--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:
       ``(q) Prohibitions on Evasions, Structuring of 
     Transactions, and Reciprocal Arrangements.--A creditor may 
     not take any action in connection with a high-cost mortgage--
       ``(1) 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
       ``(2) to divide any loan transaction into separate parts 
     for the purpose and with the intent of evading provisions of 
     this title.''.
       (c) Modification or Deferral Fees.--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:
       ``(r) Modification and Deferral Fees Prohibited.--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.''.
       (d) Payoff Statement.--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:
       ``(s) Payoff Statement.--
       ``(1) Fees.--
       ``(A) In general.--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.
       ``(B) Transaction fee.--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.
       ``(C) Fee disclosure.--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).
       ``(D) Multiple requests.--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.
       ``(2) Prompt delivery.--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.
       ``(3) Services considered assignee.--For the purposes of 
     this subsection, a servicer shall be considered an assignee 
     under the Truth in Lending Act.''.
       (e) Pre-Loan Counseling Required.--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:
       ``(t) Pre-Loan Counseling.--
       ``(1) In general.--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.
       ``(2) Disclosures required prior to counseling.--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.
       ``(3) Regulations.--The Board may prescribe such 
     regulations as the Board determines to be appropriate to 
     carry out the requirements of paragraph (1).''.
       (f) Flipping Prohibited.--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:

[[Page 11974]]

       ``(u) Flipping.--
       ``(1) In general.--No creditor may knowingly or 
     intentionally engage in the unfair act or practice of 
     flipping in connection with a high-cost mortgage.
       ``(2) Flipping defined.--For purposes of this subsection, 
     the term `flipping' 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 129C(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.
       ``(v) Corrections and Unintentional Violations.--A creditor 
     or assignee in a high cost loan who, when acting in good 
     faith, fails to comply with any requirement under this 
     section will not be deemed to have violated such requirement 
     if the creditor or assignee establishes that either--
       ``(1) 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--
       ``(A) make the loan satisfy the requirements of this 
     chapter; or
       ``(B) 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
       ``(2) 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--
       ``(A) make the loan satisfy the requirements of this 
     chapter; or
       ``(B) 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.''.

     SEC. 304. REGULATIONS.

       (a) In General.--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.
       (b) Consumer Mortgage Education.--
       (1) Regulations.--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.
       (2) Coordination with state law.--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.

     SEC. 305. EFFECTIVE DATE.

       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)) for which an application is received by the 
     creditor after the end of such period.

                 TITLE IV--OFFICE OF HOUSING COUNSELING

     SEC. 401. SHORT TITLE.

       This title may be cited as the ``Expand and Preserve Home 
     Ownership Through Counseling Act''.

     SEC. 402. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING.

       Section 4 of the Department of Housing and Urban 
     Development Act (42 U.S.C. 3533) is amended by adding at the 
     end the following new subsection:
       ``(g) Office of Housing Counseling.--
       ``(1) Establishment.--There is established, in the 
     Department, the Office of Housing Counseling.
       ``(2) Director.--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, and shall report to, the Secretary. Such 
     position shall be a career-reserved position in the Senior 
     Executive Service.
       ``(3) Functions.--
       ``(A) In general.--The Director shall have primary 
     responsibility within the Department for all activities and 
     matters relating to homeownership counseling and rental 
     housing counseling, including--
       ``(i) research, grant administration, public outreach, and 
     policy development relating to such counseling; and
       ``(ii) 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.
       ``(B) Specific functions.--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--
       ``(i) the counseling procedures under section 106(g)(1) of 
     the Housing and Urban Development Act of 1968 (12 U.S.C. 
     1701x(h)(1));
       ``(ii) carrying out all other functions of the Secretary 
     under section 106(g) of the Housing and Urban Development Act 
     of 1968, including the establishment, operation, and 
     publication of the availability of the toll-free telephone 
     number under paragraph (2) of such section;
       ``(iii) contributing to the preparation and distribution of 
     home buying information booklets pursuant to section 5 of the 
     Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 
     2604);
       ``(iv) carrying out the certification program under section 
     106(e) of the Housing and Urban Development Act of 1968 (12 
     U.S.C. 1701x(e));
       ``(v) carrying out the assistance program under section 
     106(a)(4) of the Housing and Urban Development Act of 1968, 
     including criteria for selection of applications to receive 
     assistance;
       ``(vi) 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;
       ``(vii) providing for operation of the advisory committee 
     established under paragraph (4) of this subsection;
       ``(viii) collaborating with community-based organizations 
     with expertise in the field of housing counseling; and
       ``(ix) providing for the building of capacity to provide 
     housing counseling services in areas that lack sufficient 
     services.
       ``(4) Advisory committee.--
       ``(A) In general.--The Secretary shall appoint an advisory 
     committee to provide advice regarding the carrying out of the 
     functions of the Director.
       ``(B) Members.--Such advisory committee shall consist of 
     not more than 12 individuals, and the membership of the 
     committee shall equally represent the mortgage and real 
     estate industry, including consumers and housing counseling 
     agencies certified by the Secretary.
       ``(C) Terms.--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.
       ``(D) Terms of initial appointees.--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.
       ``(E) Prohibition of pay; travel expenses.--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.
       ``(F) Advisory role only.--The advisory committee shall 
     have no role in reviewing or awarding housing counseling 
     grants.
       ``(5) Scope of homeownership counseling.--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.''.

     SEC. 403. COUNSELING PROCEDURES.

       (a) In General.--Section 106 of the Housing and Urban 
     Development Act of 1968 (12 U.S.C. 1701x) is amended by 
     adding at the end the following new subsection:
       ``(g) Procedures and Activities.--
       ``(1) Counseling procedures.--
       ``(A) In general.--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.
       ``(B) Homeownership counseling.--For purposes of this 
     subsection and as used in the provisions referred to in this 
     subparagraph, the term `homeownership counseling' 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--
       ``(i) section 105(a)(20) of the Housing and Community 
     Development Act of 1974 (42 U.S.C. 5305(a)(20));
       ``(ii) in the United States Housing Act of 1937--

       ``(I) section 9(e) (42 U.S.C. 1437g(e));
       ``(II) section 8(y)(1)(D) (42 U.S.C. 1437f(y)(1)(D));
       ``(III) section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D));
       ``(IV) section 23(c)(4) (42 U.S.C. 1437u(c)(4));
       ``(V) section 32(e)(4) (42 U.S.C. 1437z-4(e)(4));
       ``(VI) section 33(d)(2)(B) (42 U.S.C. 1437z-5(d)(2)(B));

[[Page 11975]]

       ``(VII) sections 302(b)(6) and 303(b)(7) (42 U.S.C. 
     1437aaa-1(b)(6), 1437aaa-2(b)(7)); and
       ``(VIII) section 304(c)(4) (42 U.S.C. 1437aaa-3(c)(4));

       ``(iii) section 302(a)(4) of the American Homeownership and 
     Economic Opportunity Act of 2000 (42 U.S.C. 1437f note);
       ``(iv) sections 233(b)(2) and 258(b) of the Cranston-
     Gonzalez National Affordable Housing Act (42 U.S.C. 
     12773(b)(2), 12808(b));
       ``(v) this section and section 101(e) of the Housing and 
     Urban Development Act of 1968 (12 U.S.C. 1701x, 1701w(e));
       ``(vi) 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));
       ``(vii) sections 422(b)(6), 423(b)(7), 424(c)(4), 
     442(b)(6), and 443(b)(6) of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 12872(b)(6), 12873(b)(7), 
     12874(c)(4), 12892(b)(6), and 12893(b)(6));
       ``(viii) section 491(b)(1)(F)(iii) of the McKinney-Vento 
     Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii));
       ``(ix) 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));
       ``(x) in the National Housing Act--

       ``(I) 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);
       ``(II) subsections (a) and (c)(3) of section 237 (12 U.S.C. 
     1715z-2); and
       ``(III) subsections (d)(2)(B) and (m)(1) of section 255 (12 
     U.S.C. 1715z-20);

       ``(xi) section 502(h)(4)(B) of the Housing Act of 1949 (42 
     U.S.C. 1472(h)(4)(B)); and
       ``(xii) section 508 of the Housing and Urban Development 
     Act of 1970 (12 U.S.C. 1701z-7).
       ``(C) Rental housing counseling.--For purposes of this 
     subsection, the term `rental housing counseling' 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--
       ``(i) section 105(a)(20) of the Housing and Community 
     Development Act of 1974 (42 U.S.C. 5305(a)(20));
       ``(ii) in the United States Housing Act of 1937--

       ``(I) section 9(e) (42 U.S.C. 1437g(e));
       ``(II) section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D));
       ``(III) section 23(c)(4) (42 U.S.C. 1437u(c)(4));
       ``(IV) section 32(e)(4) (42 U.S.C. 1437z-4(e)(4));
       ``(V) section 33(d)(2)(B) (42 U.S.C. 1437z-5(d)(2)(B)); and
       ``(VI) section 302(b)(6) (42 U.S.C. 1437aaa-1(b)(6));

       ``(iii) section 233(b)(2) of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 12773(b)(2));
       ``(iv) section 106 of the Housing and Urban Development Act 
     of 1968 (12 U.S.C. 1701x);
       ``(v) section 422(b)(6) of the Cranston-Gonzalez National 
     Affordable Housing Act (42 U.S.C. 12872(b)(6));
       ``(vi) section 491(b)(1)(F)(iii) of the McKinney-Vento 
     Homeless Assistance Act (42 U.S.C. 11408(b)(1)(F)(iii));
       ``(vii) 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
       ``(viii) the rental assistance program under section 8 of 
     the United States Housing Act of 1937 (42 U.S.C. 1437f).
       ``(2) Standards for materials.--The Secretary, in 
     consultation 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).
       ``(3) Mortgage software systems.--
       ``(A) Certification.--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--
       ``(i) the consumer's financial situation and the cost of 
     maintaining a home, including insurance, taxes, and 
     utilities;
       ``(ii) the amount of time the consumer expects to remain in 
     the home or expected time to maturity of the loan; and
       ``(iii) 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.

     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.
       ``(B) Use and initial availability.--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).
       ``(C) Availability.--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.
       ``(D) Budget compliance.--This paragraph shall be effective 
     only to the extent that amounts to carry out this paragraph 
     are made available in advance in appropriations Acts.
       ``(4) National public service multimedia campaigns to 
     promote housing counseling.--
       ``(A) In general.--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, minorities, 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.
       ``(B) Contact information.--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.
       ``(C) Authorization of appropriations.--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.
       ``(D) Foreclosure rescue education programs.--
       ``(i) In general.--Ten percent of any funds appropriated 
     pursuant to the authorization under subparagraph (C) shall be 
     used by the Director of Housing Counseling to conduct an 
     education program in areas that have a high density of 
     foreclosure. Such program shall involve direct mailings to 
     persons living in such areas describing--

       ``(I) tips on avoiding foreclosure rescue scams;
       ``(II) tips on avoiding predatory lending mortgage 
     agreements;
       ``(III) tips on avoiding for-profit foreclosure counseling 
     services; and
       ``(IV) local counseling resources that are approved by the 
     Department of Housing and Urban Development.

       ``(ii) Program emphasis.--In conducting the education 
     program described under clause (i), the Director of Housing 
     Counseling shall also place an emphasis on serving 
     communities that have a high percentage of retirement 
     communities or a high percentage of low-income minority 
     communities.
       ``(iii) Terms defined.--For purposes of this subparagraph:

       ``(I) High density of foreclosures.--An area has a `high 
     density of foreclosures' if such area is one of the 
     metropolitan statistical areas (as that term is defined by 
     the Director of the Office of Management and Budget) with the 
     highest home foreclosure rates.
       ``(II) High percentage of retirement communities.--An area 
     has a `high percentage of retirement communities' if such 
     area is one of the metropolitan statistical areas (as that 
     term is defined by the Director of the Office of Management 
     and Budget) with the highest percentage of residents aged 65 
     or older.
       ``(III) High percentage of low-income minority 
     communities.--An area has a `high percentage of low-income 
     minority communities' if such area contains a higher-than-
     normal percentage of residents who are both minorities and 
     low-income, as defined by the Director of Housing Counseling.

       ``(5) Education programs.--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, minorities, and other potentially 
     vulnerable consumers), regarding home mortgages, mortgage 
     refinancing, home equity loans, and home repair loans.''.
       (b) Conforming Amendments to Grant Program for 
     Homeownership Counseling Organizations.--Section 
     106(c)(5)(A)(ii) of the Housing and Urban Development Act of 
     1968 (12 U.S.C. 1701x(c)(5)(A)(ii)) is amended--
       (1) in subclause (III), by striking ``and'' at the end;
       (2) in subclause (IV) by striking the period at the end and 
     inserting ``; and''; and
       (3) by inserting after subclause (IV) the following new 
     subclause:

       ``(V) notify the housing or mortgage applicant of the 
     availability of mortgage software systems provided pursuant 
     to subsection (g)(3).''.

[[Page 11976]]



     SEC. 404. GRANTS FOR HOUSING COUNSELING ASSISTANCE.

       Section 106(a) of the Housing and Urban Development Act of 
     1968 (12 U.S.C. 1701x(a)(3)) is amended by adding at the end 
     the following new paragraph:
       ``(4) Homeownership and Rental Counseling Assistance.--
       ``(A) In general.--The Secretary shall make financial 
     assistance available under this paragraph to HUD-approved 
     housing counseling agencies and State housing finance 
     agencies.
       ``(B) Qualified entities.--The Secretary shall establish 
     standards and guidelines for eligibility of organizations 
     (including governmental and nonprofit organizations) to 
     receive assistance under this paragraph, in accordance with 
     subparagraph (D).
       ``(C) Distribution.--Assistance made available under this 
     paragraph shall be distributed in a manner that encourages 
     efficient and successful counseling programs.
       ``(D) Limitation on distribution of assistance.--
       ``(i) In general.--None of the assistance made available 
     under this paragraph shall be distributed to--
       ``(I) any organization which has been indicted for a 
     violation under Federal law relating to an election for 
     Federal office; or
       ``(II) any organization which employs applicable 
     individuals.
       ``(ii) Definition of applicable individual.--In this 
     subparagraph, the term `applicable individual' means an 
     individual who--
       ``(I) is--

       ``(aa) employed by the organization in a permanent or 
     temporary capacity;
       ``(bb) contracted or retained by the organization; or
       ``(cc) acting on behalf of, or with the express or apparent 
     authority of, the organization; and

       ``(II) has been indicted for a violation under Federal law 
     relating to an election for Federal office.
       ``(E) Grantmaking process.--In making assistance available 
     under this paragraph, the Secretary shall consider 
     appropriate ways of streamlining and improving the processes 
     for grant application, review, approval, and award.
       ``(F) Authorization of appropriations.--There are 
     authorized to be appropriated $45,000,000 for each of fiscal 
     years 2009 through 2012 for--
       ``(i) the operations of the Office of Housing Counseling of 
     the Department of Housing and Urban Development;
       ``(ii) the responsibilities of the Director of Housing 
     Counseling under paragraphs (2) through (5) of subsection 
     (g); and
       ``(iii) assistance pursuant to this paragraph for entities 
     providing homeownership and rental counseling.''.

     SEC. 405. REQUIREMENTS TO USE HUD-CERTIFIED COUNSELORS UNDER 
                   HUD PROGRAMS.

       Section 106(e) of the Housing and Urban Development Act of 
     1968 (12 U.S.C. 1701x(e)) is amended--
       (1) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) Requirement for assistance.--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.'';
       (2) in paragraph (2)--
       (A) by inserting ``and for certifying organizations'' 
     before the period at the end of the first sentence; and
       (B) in the second sentence by striking ``for 
     certification'' and inserting ``, for certification of an 
     organization, that each individual through which the 
     organization provides counseling shall demonstrate, and, for 
     certification of an individual,'';
       (3) in paragraph (3), by inserting ``organizations and'' 
     before ``individuals'';
       (4) by redesignating paragraph (3) as paragraph (5); and
       (5) by inserting after paragraph (2) the following new 
     paragraphs:
       ``(3) Requirement under hud programs.--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.
       ``(4) Outreach.--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).''.

     SEC. 406. STUDY OF DEFAULTS AND FORECLOSURES.

       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.

     SEC. 407. DEFINITIONS FOR COUNSELING-RELATED PROGRAMS.

       Section 106 of the Housing and Urban Development Act 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:
       ``(h) Definitions.--For purposes of this section:
       ``(1) Nonprofit organization.--The term `nonprofit 
     organization' has the meaning given such term in section 
     104(5) of the Cranston-Gonzalez National Affordable Housing 
     Act (42 U.S.C. 12704(5)), except that subparagraph (D) of 
     such section shall not apply for purposes of this section.
       ``(2) State.--The term `State' 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.
       ``(3) Unit of general local government.--The term `unit of 
     general local government' means any city, county, parish, 
     town, township, borough, village, or other general purpose 
     political subdivision of a State.
       ``(4) HUD-approved counseling agency.--The term `HUD-
     approved counseling agency' means a private or public 
     nonprofit organization that is--
       ``(A) exempt from taxation under section 501(c) of the 
     Internal Revenue Code of 1986; and
       ``(B) certified by the Secretary to provide housing 
     counseling services.
       ``(5) State housing finance agency.--The term `State 
     housing finance agency' means any public body, agency, or 
     instrumentality specifically created under State statute that 
     is authorised to finance activities designed to provide 
     housing and related facilities throughout an entire State 
     through land acquisition, construction, or rehabilitation.''.

     SEC. 408. UPDATING AND SIMPLIFICATION OF MORTGAGE INFORMATION 
                   BOOKLET.

       Section 5 of the Real Estate Settlement Procedures Act of 
     1974 (12 U.S.C. 2604) is amended--
       (1) in the section heading, by striking ``special'' and 
     inserting ``home buying'';
       (2) by striking subsections (a) and (b) and inserting the 
     following new subsections:
       ``(a) Preparation and Distribution.--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 Housing and Urban Development Act 
     of 1968 (12 U.S.C. 1701x(e)) for use in complying with the 
     requirement under subsection (c) of this section.
       ``(b) Contents.--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:
       ``(1) 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--
       ``(A) balloon payments;
       ``(B) prepayment penalties; and
       ``(C) the trade-off between closing costs and the interest 
     rate over the life of the loan.
       ``(2) An explanation and sample of the uniform settlement 
     statement required by section 4.
       ``(3) 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.
       ``(4) 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.
       ``(5) An explanation of the right of rescission as to 
     certain transactions provided by sections 125 and 129 of the 
     Truth in Lending Act.
       ``(6) A brief explanation of the nature of a variable rate 
     mortgage and a reference to the booklet entitled `Consumer 
     Handbook on Adjustable Rate Mortgages', 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.
       ``(7) A brief explanation of the nature of a home equity 
     line of credit and a reference to the

[[Page 11977]]

     pamphlet required to be provided under section 127A of the 
     Truth in Lending Act.
       ``(8) Information about homeownership counseling services 
     made available pursuant to section 106(a)(4) of the Housing 
     and Urban Development Act 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.
       ``(9) 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.
       ``(10) 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.
       ``(11) An explanation of a consumer's responsibilities, 
     liabilities, and obligations in a mortgage transaction.
       ``(12) An explanation of the nature and purpose of real 
     estate appraisals, including the difference between an 
     appraisal and a home inspection.
       ``(13) 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.

     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.'';
       (3) in subsection (c), by inserting at the end the 
     following new sentence: ``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 Housing and Urban Development Act of 
     1968 (12 U.S.C. 1701x(e)) and located in the area of the 
     lender.''; and
       (4) in subsection (d), by inserting after the period at the 
     end of the first sentence the following: ``The lender shall 
     provide the HUD-issued booklet in the version that is most 
     appropriate for the person receiving it.''.

     SEC. 409. HOME INSPECTION COUNSELING.

       (a) Public Outreach.--
       (1) In general.--The Secretary of Housing and Urban 
     Development (in this section referred to as the 
     ``Secretary'') shall take such actions as may be necessary to 
     inform potential homebuyers of the availability and 
     importance of obtaining an independent home inspection. Such 
     actions shall include--
       (A) publication of the HUD/FHA form HUD 92564-CN entitled 
     ``For Your Protection: Get a Home Inspection'', in both 
     English and Spanish languages;
       (B) publication of the HUD/FHA booklet entitled ``For Your 
     Protection: Get a Home Inspection'', in both English and 
     Spanish languages;
       (C) development and publication of a HUD booklet entitled 
     ``For Your Protection--Get a Home Inspection'' that does not 
     reference FHA-insured homes, in both English and Spanish 
     languages; and
       (D) publication of the HUD document entitled ``Ten 
     Important Questions To Ask Your Home Inspector'', in both 
     English and Spanish languages.
       (2) Availability.--The Secretary shall make the materials 
     specified in paragraph (1) available for electronic access 
     and, where appropriate, inform potential homebuyers of such 
     availability through home purchase counseling public service 
     announcements and toll-free telephone hotlines of the 
     Department of Housing and Urban Development. The Secretary 
     shall give special emphasis to reaching first-time and low-
     income homebuyers with these materials and efforts.
       (3) Updating.--The Secretary may periodically update and 
     revise such materials, as the Secretary determines to be 
     appropriate.
       (b) Requirement for FHA-Approved Lenders.--Each mortgagee 
     approved for participation in the mortgage insurance programs 
     under title II of the National Housing Act shall provide 
     prospective homebuyers, at first contact, whether upon pre-
     qualification, pre-approval, or initial application, the 
     materials specified in subparagraphs (A), (B), and (D) of 
     subsection (a)(1).
       (c) Requirements for HUD-Approved Counseling Agencies.--
     Each counseling agency certified pursuant by the Secretary to 
     provide housing counseling services shall provide each of 
     their clients, as part of the home purchase counseling 
     process, the materials specified in subparagraphs (C) and (D) 
     of subsection (a)(1).
       (d) Training.--Training provided the Department of Housing 
     and Urban Development for housing counseling agencies, 
     whether such training is provided directly by the Department 
     or otherwise, shall include--
       (1) providing information on counseling potential 
     homebuyers of the availability and importance of getting an 
     independent home inspection;
       (2) providing information about the home inspection 
     process, including the reasons for specific inspections such 
     as radon and lead-based paint testing;
       (3) providing information about advising potential 
     homebuyers on how to locate and select a qualified home 
     inspector; and
       (4) review of home inspection public outreach materials of 
     the Department.

                      TITLE V--MORTGAGE SERVICING

     SEC. 501. ESCROW AND IMPOUND ACCOUNTS RELATING TO CERTAIN 
                   CONSUMER CREDIT TRANSACTIONS.

       (a) In General.--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:

     ``SEC. 129D. ESCROW OR IMPOUND ACCOUNTS RELATING TO CERTAIN 
                   CONSUMER CREDIT TRANSACTIONS.

       ``(a) In General.--Except as provided in subsection (b), 
     (c), or (d), 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, before 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.
       ``(b) When Required.--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--
       ``(1) any such impound, trust, or other type of escrow or 
     impound account for such purposes is required by Federal or 
     State law;
       ``(2) a loan is made, guaranteed, or insured by a State or 
     Federal governmental lending or insuring agency;
       ``(3) 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 date the interest rate 
     is set, will exceed the average prime offer rate for a 
     comparable transaction by 1.5 percentage points or more; or
       ``(4) so required pursuant to regulation.
       ``(c) Duration of Mandatory Escrow or Impound Account.--An 
     escrow or impound account established pursuant to subsection 
     (b), shall remain in existence for a minimum period of 5 
     years, beginning with the date of the consummation of the 
     loan, 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.
       ``(d) Limited Exemptions for Loans Secured by Shares in a 
     Cooperative and for Certain Condominium Units.--Escrow 
     accounts need not be established for loans secured by shares 
     in a cooperative. Insurance premiums need not be included in 
     escrow accounts for loans secured by condominium units, where 
     the condominium association has an obligation to the 
     condominium unit owners to maintain a master policy insuring 
     condominium units.
       ``(e) Clarification on Escrow Accounts for Loans Not 
     Meeting Statutory Test.--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--
       ``(1) on terms mutually agreeable to the parties to the 
     loan;
       ``(2) at the discretion of the lender or servicer, as 
     provided by the contract between the lender or servicer and 
     the borrower; or
     ``(3) 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.
       ``(f) Administration of Mandatory Escrow or Impound 
     Accounts.--
       ``(1) In general.--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.
       ``(2) Administration.--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--
       ``(A) the Real Estate Settlement Procedures Act of 1974 and 
     regulations prescribed under such Act;
       ``(B) the Flood Disaster Protection Act of 1973 and 
     regulations prescribed under such Act; and
       ``(C) the law of the State, if applicable, where the real 
     property securing the consumer credit transaction is located.
       ``(3) Applicability of payment of interest.--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.
       ``(4) Penalty coordination with respa.--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.

[[Page 11978]]

       ``(g) Disclosures Relating to Mandatory Escrow or Impound 
     Account.--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:
       ``(1) The fact that an escrow or impound account will be 
     established at consummation of the transaction.
       ``(2) The amount required at closing to initially fund the 
     escrow or impound account.
       ``(3) 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.
       ``(4) 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.
       ``(5) 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.
       ``(6) Such other information as the Federal banking 
     agencies jointly determine necessary for the protection of 
     the consumer.
       ``(h) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Flood insurance.--The term `flood insurance' means 
     flood insurance coverage provided under the national flood 
     insurance program pursuant to the National Flood Insurance 
     Act of 1968.
       ``(2) Hazard insurance.--The term `hazard insurance' shall 
     have the same meaning as provided for `hazard insurance', 
     `casualty insurance', `homeowner's insurance', or other 
     similar term under the law of the State where the real 
     property securing the consumer credit transaction is 
     located.''.
       (b) Implementation.--
       (1) Regulations.--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 ``Federal banking agencies'') 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.
       (2) Effective date.--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.
       (c) Clerical Amendment.--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:

``129D. Escrow or impound accounts relating to certain consumer credit 
              transactions.''.

     SEC. 502. DISCLOSURE NOTICE REQUIRED FOR CONSUMERS WHO WAIVE 
                   ESCROW SERVICES.

       (a) In General.--Section 129D of the Truth in Lending Act 
     (as added by section 501) is amended by adding at the end the 
     following new subsection:
       ``(i) Disclosure Notice Required for Consumers Who Waive 
     Escrow Services.--
       ``(1) In general.--If--
       ``(A) 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
       ``(B) a consumer chooses, and provides written notice to 
     the creditor or servicer of such choice, 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,

     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.
       ``(2) Disclosure requirements.--Any disclosure provided to 
     a consumer under paragraph (1) shall include the following:
       ``(A) 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.
       ``(B) 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.
       ``(C) 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.
       ``(D) Such other information as the Federal banking 
     agencies jointly determine necessary for the protection of 
     the consumer.''.
       (b) Implementation.--
       (1) Regulations.--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.
       (2) Effective date.--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.

     SEC. 503. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 
                   AMENDMENTS.

       (a) Servicer Prohibitions.--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:
       ``(k) Servicer Prohibitions.--
       ``(1) In general.--A servicer of a federally related 
     mortgage shall not--
       ``(A) 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;
       ``(B) charge fees for responding to valid qualified written 
     requests (as defined in regulations which the Secretary shall 
     prescribe) under this section;
       ``(C) 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;
       ``(D) 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
       ``(E) 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.
       ``(2) Force-placed insurance defined.--For purposes of this 
     subsection and subsections (l) and (m), the term `force-
     placed insurance' 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.
       ``(l) Requirements for Force-Placed Insurance.--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.
       ``(1) Written notices to borrower.--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--
       ``(A) the servicer has sent, by first-class mail, a written 
     notice to the borrower containing--
       ``(i) a reminder of the borrower's obligation to maintain 
     hazard insurance on the property securing the federally 
     related mortgage;
       ``(ii) a statement that the servicer does not have evidence 
     of insurance coverage of such property;
       ``(iii) a clear and conspicuous statement of the procedures 
     by which the borrower may demonstrate that the borrower 
     already has insurance coverage; and
       ``(iv) 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;
       ``(B) 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
       ``(C) 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.
       ``(2) Sufficiency of demonstration.--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.
       ``(3) Termination of force-placed insurance.--Within 15 
     days of the receipt by a servicer of confirmation of a 
     borrower's existing insurance coverage, the servicer shall--
       ``(A) terminate the force-placed insurance; and
       ``(B) 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.

[[Page 11979]]

       ``(4) Clarification with respect to flood disaster 
     protection act.--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.
       ``(m) Limitations on Force-Placed Insurance Charges.--All 
     charges for force-placed insurance premiums shall be bona 
     fide and reasonable in amount.''.
       (b) Increase in Penalty Amounts.--Section 6(f) of the Real 
     Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(f)) 
     is amended--
       (1) in paragraphs (1)(B) and (2)(B), by striking ``$1,000'' 
     each place such term appears and inserting ``$2,000''; and
       (2) in paragraph (2)(B)(i), by striking ``$500,000'' and 
     inserting ``$1,000,000''.
       (c) Decrease in Response Times.--Section 6(e) of the Real 
     Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(e)) 
     is amended--
       (1) in paragraph (1)(A), by striking ``20 days'' and 
     inserting ``5 days'';
       (2) in paragraph (2), by striking ``60 days'' and inserting 
     ``30 days''; and
       (3) by adding at the end the following new paragraph:
       ``(4) Limited extension of response time.--The 30-day 
     period described in paragraph (2) may be extended for not 
     more than 15 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.''.
       (d) Prompt Refund of Escrow Accounts Upon Payoff.--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: ``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.''.

     SEC. 504. TRUTH IN LENDING ACT AMENDMENTS.

       (a) Requirements for Prompt Crediting of Home Loan 
     Payments.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
     1631 et seq.) is amended by inserting after section 129E (as 
     added by section 602) the following new section (and by 
     amending the table of contents accordingly):

     ``SEC. 129F. REQUIREMENTS FOR PROMPT CREDITING OF HOME LOAN 
                   PAYMENTS.

       ``(a) In General.--In connection with a consumer credit 
     transaction secured by a consumer's principal dwelling, no 
     servicer shall fail to credit a payment to the consumer's 
     loan account as of the date of receipt, except when a delay 
     in crediting does not result in any charge to the consumer or 
     in the reporting of negative information to a consumer 
     reporting agency, except as required in subsection (b).
       ``(b) Exception.--If a servicer specifies in writing 
     requirements for the consumer to follow in making payments, 
     but accepts a payment that does not conform to the 
     requirements, the servicer shall credit the payment as of 5 
     days after receipt.''.
       (b) Requests for Payoff Amounts.--Chapter 2 of such Act is 
     further amended by inserting after section 129F (as added by 
     subsection (a)) the following new section (and by amending 
     the table of contents accordingly):

     ``SEC. 129G. REQUESTS FOR PAYOFF AMOUNTS OF HOME LOAN.

       ``A creditor or servicer of a home loan shall send an 
     accurate payoff balance within a reasonable time, but in no 
     case more than 7 business days, after the receipt of a 
     written request for such balance from or on behalf of the 
     borrower.''.

     SEC. 505. ESCROWS INCLUDED IN REPAYMENT ANALYSIS.

       (a) In General.--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:
       ``(5) Repayment analysis required to include escrow 
     payments.--
       ``(A) In general.--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.
       ``(B) Assessment value.--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.''.

                     TITLE VI--APPRAISAL ACTIVITIES

     SEC. 601. PROPERTY APPRAISAL REQUIREMENTS.

       Section 129 of the Truth in Lending Act (15 U.S.C. 1639) is 
     amended by inserting after subsection (v) (as added by 
     section 303(f)) the following new subsection:
       ``(w) Property Appraisal Requirements.--
       ``(1) In general.--A creditor may not extend credit in the 
     form of a subprime mortgage to any consumer without first 
     obtaining a written appraisal of the property to be mortgaged 
     prepared in accordance with the requirements of this 
     subsection.
       ``(2) Appraisal requirements.--
       ``(A) Physical property visit.--An appraisal of property to 
     be secured by a subprime mortgage 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.
       ``(B) Second appraisal under certain circumstances.--
       ``(i) In general.--If the purpose of a subprime mortgage 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.
       ``(ii) No cost to applicant.--The cost of any second 
     appraisal required under clause (i) may not be charged to the 
     applicant.
       ``(C) Qualified appraiser defined.--For purposes of this 
     subsection, the term `qualified appraiser' means a person 
     who--
       ``(i) is, at a minimum, certified or licensed by the State 
     in which the property to be appraised is located; and
       ``(ii) 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.
       ``(3) Free copy of appraisal.--A creditor shall provide 1 
     copy of each appraisal conducted in accordance with this 
     subsection in connection with a subprime mortgage to the 
     applicant without charge, and at least 3 days prior to the 
     transaction closing date.
       ``(4) Consumer notification.--At the time of the initial 
     mortgage application, the applicant 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 
     applicant may choose to have a separate appraisal conducted 
     at their own expense.
       ``(5) Violations.--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 applicant or borrower for 
     the sum of $2,000.
       ``(6) Subprime mortgage defined.--For purposes of this 
     subsection, the term `subprime mortgage' means a residential 
     mortgage loan with an annual percentage rate that exceeds the 
     average prime offer rate for a comparable transaction, as of 
     the date the interest rate is set--
       ``(A) by 1.5 or more percentage points for a first lien 
     residential mortgage loan; and
       ``(B) by 3.5 or more percentage points for a subordinate 
     lien residential mortgage loan.''.

     SEC. 602. UNFAIR AND DECEPTIVE PRACTICES AND ACTS RELATING TO 
                   CERTAIN CONSUMER CREDIT TRANSACTIONS.

       (a) In General.--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:

     ``SEC. 129E. UNFAIR AND DECEPTIVE PRACTICES AND ACTS RELATING 
                   TO CERTAIN CONSUMER CREDIT TRANSACTIONS.

       ``(a) In General.--It shall be unlawful, in extending 
     credit or 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.
       ``(b) Appraisal Independence.--For purposes of subsection 
     (a), unfair and deceptive practices shall include--
       ``(1) 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;
       ``(2) mischaracterizing, or suborning any 
     mischaracterization of, the appraised value of the property 
     securing the extension of the credit;
       ``(3) seeking to influence an appraiser or otherwise to 
     encourage a targeted value in order to facilitate the making 
     or pricing of the transaction; and
       ``(4) withholding or threatening to withhold timely payment 
     for an appraisal report or for appraisal services rendered.
       ``(c) Exceptions.--The requirements of subsection (b) shall 
     not be construed as prohibiting a mortgage lender, mortgage 
     broker, mortgage

[[Page 11980]]

     banker, real estate broker, appraisal management company, 
     employee of an appraisal management company, consumer, 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:
       ``(1) Consider additional, appropriate property 
     information, including the consideration of additional 
     comparable properties to make or support an appraisal.
       ``(2) Provide further detail, substantiation, or 
     explanation for the appraiser's value conclusion.
       ``(3) Correct errors in the appraisal report.
       ``(d) Prohibitions on Conflicts of Interest.--No certified 
     or licensed appraiser conducting, and no appraisal management 
     company procuring or facilitating, an appraisal in connection 
     with a consumer credit transaction secured by the principal 
     dwelling of a consumer may have a direct or indirect 
     interest, financial or otherwise, in the property or 
     transaction involving the appraisal.
       ``(e) Mandatory Reporting.--Any mortgage lender, mortgage 
     broker, mortgage banker, real estate broker, appraisal 
     management company, employee of an appraisal management 
     company, or any other person involved in a real estate 
     transaction involving an appraisal in connection with a 
     consumer credit transaction secured by the principal dwelling 
     of a consumer who has a reasonable basis to believe an 
     appraiser is failing to comply with the Uniform Standards of 
     Professional Appraisal Practice, 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.
       ``(f) No Extension of Credit.--In connection with a 
     consumer credit transaction secured by a consumer's principal 
     dwelling, a creditor who knows, at or before loan 
     consummation, of a violation of the appraisal independence 
     standards established in subsections (b) or (d) shall not 
     extend credit based on such appraisal unless the creditor 
     documents that the creditor has acted with reasonable 
     diligence to determine that the appraisal does not materially 
     misstate or misrepresent the value of such dwelling.
       ``(g) Rulemaking Proceedings.--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--
       ``(1) shall, for purposes of this section, jointly 
     prescribe regulations no later than 180 days after the date 
     of the enactment of this section, and where such regulations 
     have an effective date of no later than 1 year after the date 
     of the enactment of this section, 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
       ``(2) 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), (c), (d), (e), and (f).
       ``(h) Penalties.--
       ``(1) First violation.--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.
       ``(2) Subsequent violations.--In the case of any person on 
     whom a civil penalty has been imposed under paragraph (1), 
     paragraph (1) shall be applied by substituting `$20,000' for 
     `$10,000' with respect to all subsequent violations.
       ``(3) Assessment.--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.''.
       (b) Clerical Amendment.--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:

``129E. 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.

       (a) Consumer Protection Mission.--
       (1) Purposes.--Section 1101 of the Financial Institutions 
     Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
     3331) is amended by inserting ``and to provide the Appraisal 
     Subcommittee with a consumer protection mandate'' before the 
     period at the end.
       (2) Functions of appraisal subcommittee.--Section 1103(a) 
     of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989 (12 U.S.C. 3332(a)) is amended--
       (A) by striking ``and'' at the end of paragraph (3);
       (B) by striking the period at the end of paragraph (4) and 
     inserting ``;''; and
       (C) by adding at the end the following new paragraph:
       ``(5) monitor the efforts of, and requirements established 
     by, States and the Federal financial institutions regulatory 
     agencies to protect consumers from improper appraisal 
     practices and the predations of unlicensed appraisers in 
     consumer credit transactions that are secured by a consumer's 
     principal dwelling; and''.
       (3) Threshold levels.--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: ``, and that such threshold level provides 
     reasonable protection for consumers who purchase 1-4 unit 
     single-family residences. In determining whether a threshold 
     level provides reasonable protection for consumers, each 
     Federal financial institutions regulatory agency shall 
     consult with consumer groups and convene a public hearing''.
       (b) Annual Report of Appraisal Subcommittee.--
       (1) In general.--Section 1103(a) of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 3332(a)) is amended at the end by inserting the 
     following new paragraph:
       ``(6) transmit an annual report to the Congress not later 
     than January 31 of each year that describes the manner in 
     which each function assigned to the Appraisal Subcommittee 
     has been carried out during the preceding year. 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 and actions taken to achieve compliance.''.
       (c) Open Meetings.--Section 1104(b) of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 3333(b)) is amended by inserting ``in public 
     session after notice in the Federal Register'' after ``shall 
     meet''.
       (d) Regulations.--Section 1106 of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 3335) is amended--
       (1) by inserting ``prescribe regulations after notice and 
     opportunity for comment,'' after ``hold hearings''; and
       (2) at the end by inserting ``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, lenders, 
     consumer advocates, and government agencies, and hold 
     meetings as necessary to support the development of 
     regulations.''.
       (e) Field Appraisals and Appraisal Reviews.--Section 1113 
     of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989 (12 U.S.C. 3342) is amended--
       (1) by striking ``In determining'' and inserting ``(a) In 
     General.--In determining'';
       (2) in subsection (a) (as designated by paragraph (1)), by 
     inserting before the period the following: ``, where a 
     complex 1-to-4 unit single family residential appraisal means 
     an appraisal for which the property to be appraised, the form 
     of ownership, the property characteristics, or the market 
     conditions are atypical''; and
       (3) by adding at the end the following new subsection:
       ``(b) Appraisals and Appraisal Reviews.--All appraisals 
     performed at a property within a State shall be prepared by 
     appraisers licensed or certified in the State where the 
     property is located. All appraisal reviews, including 
     appraisal reviews by a lender, appraisal management company, 
     or other third party organization, shall be performed by an 
     appraiser who is duly licensed or certified by a State 
     appraisal board.''.
       (f) Appraisal Management Services.--
       (1) Supervision of third party providers of appraisal 
     management services.--Section 1103(a) of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 3332(a)) (as previously amended by this section) 
     is further amended--
       (A) by amending paragraph (1) to read as follows:
       ``(1) monitor the requirements established by States--
       ``(A) for the certification and licensing of individuals 
     who are qualified to perform appraisals in connection with 
     federally related transactions, including a code of 
     professional responsibility; and
       ``(B) for the registration and supervision of the 
     operations and activities of an appraisal management 
     company;''; and
       (B) by adding at the end the following new paragraph:
       ``(7) maintain a national registry of appraisal management 
     companies that either are registered with and subject to 
     supervision of a State appraiser certifying and licensing 
     agency or are operating subsidiaries of a Federally regulated 
     financial institution.''.
       (2) Appraisal management company minimum qualifications.--
     Title XI of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989 (12 U.S.C. 3331 et seq.) is amended 
     by adding at the end the following new section (and amending 
     the table of contents accordingly):

     ``SEC. 1124. APPRAISAL MANAGEMENT COMPANY MINIMUM 
                   QUALIFICATIONS.

       ``(a) In General.--The Appraiser Qualifications Board of 
     the Appraisal Foundation shall establish minimum 
     qualifications to be applied by a State in the registration 
     of appraisal management companies. Such qualifications shall 
     include a requirement that such companies--

[[Page 11981]]

       ``(1) register with and be subject to supervision by a 
     State appraiser certifying and licensing agency in each State 
     in which such company operates;
       ``(2) verify that only licensed or certified appraisers are 
     used for federally related transactions;
       ``(3) require that appraisals coordinated by an appraisal 
     management company comply with the Uniform Standards of 
     Professional Appraisal Practice; and
       ``(4) require that appraisals are conducted independently 
     and free from inappropriate influence and coercion pursuant 
     to the appraisal independence standards established under 
     section 129E of the Truth in Lending Act.
       ``(b) Exception for Federally Regulated Financial 
     Institutions.--The requirements of subsection (a) shall not 
     apply to an appraisal management company that is a subsidiary 
     owned and controlled by a financial institution and regulated 
     by a federal financial institution regulatory agency. In such 
     case, the appropriate federal financial institutions 
     regulatory agency shall, at a minimum, develop regulations 
     affecting the operations of the appraisal management company 
     to--
       ``(1) verify that only licensed or certified appraisers are 
     used for federally related transactions;
       ``(2) require that appraisals coordinated by an institution 
     or subsidiary providing appraisal management services comply 
     with the Uniform Standards of Professional Appraisal 
     Practice; and
       ``(3) require that appraisals are conducted independently 
     and free from inappropriate influence and coercion pursuant 
     to the appraisal independence standards established under 
     section 129E of the Truth in Lending Act.
       ``(c) Registration Limitations.--An appraisal management 
     company shall not be registered by a State if such company, 
     in whole or in part, directly or indirectly, is owned by any 
     person who has had an appraiser license or certificate 
     refused, denied, cancelled, surrendered in lieu of 
     revocation, or revoked in any State. Additionally, each 
     person that owns more than 10 percent of an appraisal 
     management company shall be of good moral character, as 
     determined by the State appraiser certifying and licensing 
     agency, and shall submit to a background investigation 
     carried out by the State appraiser certifying and licensing 
     agency.
       ``(d) Regulations.--The Appraisal Subcommittee shall 
     promulgate regulations to implement the minimum 
     qualifications developed by the Appraiser Qualifications 
     Board under this section, as such qualifications relate to 
     the State appraiser certifying and licensing agencies. The 
     Appraisal Subcommittee shall also promulgate regulations for 
     the reporting of the activities of appraisal management 
     companies in determining the payment of the annual registry 
     fee.
       ``(e) Effective Date.--
       ``(1) In general.--No appraisal management company may 
     perform services related to a federally related transaction 
     in a State after the date that is 36 months after the date of 
     the enactment of this section unless such company is 
     registered with such State or subject to oversight by a 
     federal financial institutions regulatory agency.
       ``(2) Extension of effective date.--Subject to the approval 
     of the Council, the Appraisal Subcommittee may extend by an 
     additional 12 months the requirements for the registration 
     and supervision of appraisal management companies if it makes 
     a written finding that a State has made substantial progress 
     in establishing a State appraisal management company 
     registration and supervision system that appears to conform 
     with the provisions of this title.''.
       (3) State appraiser certifying and licensing agency 
     authority.--Section 1117 of the Financial Institutions 
     Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
     3346) is amended by adding at the end the following: ``The 
     duties of such agency may additionally include the 
     registration and supervision of appraisal management 
     companies.''.
       (4) Appraisal management company definition.--Section 1121 
     of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989 (12 U.S.C. 3350) is amended by adding 
     at the end the following:
       ``(11) Appraisal management company.--The term `appraisal 
     management company' means, in connection with valuing 
     properties collateralizing mortgage loans or mortgages 
     incorporated into a securitization, any external third party 
     authorized either by a creditor of a consumer credit 
     transaction secured by a consumer's principal dwelling or by 
     an underwriter of or other principal in the secondary 
     mortgage markets, that oversees a network or panel of more 
     than 10 certified or licensed appraisers in a State or 25 or 
     more nationally within a given year--
       ``(A) to recruit, select, and retain appraisers;
       ``(B) to contract with licensed and certified appraisers to 
     perform appraisal assignments;
       ``(C) to manage the process of having an appraisal 
     performed, including providing administrative duties such as 
     receiving appraisal orders and appraisal reports, submitting 
     completed appraisal reports to creditors and underwriters, 
     collecting fees from creditors and underwriters for services 
     provided, and reimbursing appraisers for services performed; 
     or
       ``(D) to review and verify the work of appraisers.''.
       (g) State Agency Reporting Requirement.--Section 1109(a) of 
     the Financial Institutions Reform, Recovery, and Enforcement 
     Act of 1989 (12 U.S.C. 3338(a)) is amended--
       (1) by striking ``and'' after the semicolon in paragraph 
     (1);
       (2) by redesignating paragraph (2) as paragraph (4); and
       (3) by inserting after paragraph (1) the following new 
     paragraphs:
       ``(2) 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;
       ``(3) transmit reports on a timely basis of supervisory 
     activities involving appraisal management companies or other 
     third-party providers of appraisals and appraisal management 
     services, including investigations initiated and disciplinary 
     actions taken; and''.
       (h) Registry Fees Modified.--
       (1) In general.--Section 1109(a) of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 3338(a)) is amended--
       (A) by amending paragraph (4) (as modified by section 
     603(g) of this Act) to read as follows:
       ``(4) collect--
       ``(A) from such individuals who perform or seek to perform 
     appraisals in federally related transactions, an annual 
     registry fee of not more than $40, such fees to be 
     transmitted by the State agencies to the Council on an annual 
     basis; and
       ``(B) from an appraisal management company that either has 
     registered with a State appraiser certifying and licensing 
     agency in accordance with this title or operates as a 
     subsidiary of a federally regulated financial institution, an 
     annual registry fee of--
       ``(i) in the case of such a company that has been in 
     existence for more than a year, $25 multiplied by the number 
     of appraisers working for or contracting with such company in 
     such State during the previous year, but where such $25 
     amount may be adjusted, up to a maximum of $50, at the 
     discretion of the Appraisal Subcommittee, if necessary to 
     carry out the Subcommittee's functions under this title; and
       ``(ii) in the case of such a company that has not been in 
     existence for more than a year, $25 multiplied by an 
     appropriate number to be determined by the Appraisal 
     Subcommittee, and where such number will be used for 
     determining the fee of all such companies that were not in 
     existence for more than a year, but where such $25 amount may 
     be adjusted, up to a maximum of $50, at the discretion of the 
     Appraisal Subcommittee, if necessary to carry out the 
     Subcommittee's functions under this title.''; and
       (B) by amending the matter following paragraph (4), as 
     redesignated, to read as follows:

     ``Subject to the approval of the Council, the Appraisal 
     Subcommittee may adjust the dollar amount of registry fees 
     under paragraph (4)(A), up to a maximum of $80 per annum, as 
     necessary to carry out its functions under this title. 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. In establishing the 
     amount of the annual registry fee for an appraisal management 
     company, the Appraisal Subcommittee shall have the discretion 
     to impose a minimum annual registry fee for an appraisal 
     management company to protect against the under reporting of 
     the number of appraisers working for or contracted by the 
     appraisal management company.''.
       (2) Incremental revenues.--Incremental revenues collected 
     pursuant to the increases required by this subsection shall 
     be placed in a separate account at the United States 
     Treasury, entitled the ``Appraisal Subcommittee Account''.
       (i) Grants and Reports.--Section 1109(b) of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 3348(b)) is amended--
       (1) by striking ``and'' after the semicolon in paragraph 
     (3);
       (2) by striking the period at the end of paragraph (4) and 
     inserting a semicolon;
       (3) by adding at the end the following new paragraphs:
       ``(5) to make grants to State appraiser certifying and 
     licensing agencies to support the efforts of such agencies to 
     comply with this title, including--
       ``(A) the complaint process, complaint investigations, and 
     appraiser enforcement activities of such agencies; and
       ``(B) the submission of data on State licensed and 
     certified appraisers and appraisal management companies to 
     the National appraisal registry, including information 
     affirming that the appraiser or appraisal management company 
     meets the required qualification criteria and formal and 
     informal disciplinary actions; and
       ``(6) to report to all State appraiser certifying and 
     licensing agencies when a license or certification is 
     surrendered, revoked, or suspended.''.

     Obligations authorized under this subsection may not exceed 
     75 percent of the fiscal year total of incremental increase 
     in fees collected and deposited in the ``Appraisal 
     Subcommittee Account'' pursuant to subsection (h).
       (j) Criteria.--Section 1116 of the Financial Institutions 
     Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 
     3345) is amended--
       (1) in subsection (c), by inserting ``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'' before the period at 
     the end; and

[[Page 11982]]

       (2) by striking subsection (e) and inserting the following 
     new subsection:
       ``(e) Minimum Qualification Requirements.--Any requirements 
     established for individuals in the position of `Trainee 
     Appraiser' and `Supervisory Appraiser' 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.''.
       (k) Monitoring of State Appraiser Certifying and Licensing 
     Agencies.--Section 1118 of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (12 U.S.C. 3347) is 
     amended--
       (1) by amending subsection (a) to read as follows:
       ``(a) In General.--The Appraisal Subcommittee shall monitor 
     each State appraiser certifying and licensing agency for the 
     purposes of determining whether such agency--
       ``(1) has policies, practices, funding, staffing, and 
     procedures that are consistent with this title;
       ``(2) processes complaints and completes investigations in 
     a reasonable time period;
       ``(3) appropriately disciplines sanctioned appraisers and 
     appraisal management companies;
       ``(4) maintains an effective regulatory program; and
       ``(5) reports complaints and disciplinary actions on a 
     timely basis to the national registries on appraisers and 
     appraisal management companies maintained by the Appraisal 
     Subcommittee.

     The Appraisal Subcommittee shall have the authority to remove 
     a State licensed or certified appraiser or a registered 
     appraisal management company from a national registry on an 
     interim basis pending State agency action on licensing, 
     certification, registration, and disciplinary proceedings. 
     The Appraisal Subcommittee and all agencies, 
     instrumentalities, and Federally recognized entities under 
     this title shall not recognize appraiser certifications and 
     licenses from States whose appraisal policies, practices, 
     funding, staffing, or procedures are found to be inconsistent 
     with this title. The Appraisal Subcommittee shall have the 
     authority to impose sanctions, as described in this section, 
     against a State agency that fails to have an effective 
     appraiser regulatory program. In determining whether such a 
     program is effective, the Appraisal Subcommittee shall 
     include an analyses of the licensing and certification of 
     appraisers, the registration of appraisal management 
     companies, the issuance of temporary licenses and 
     certifications for appraisers, the receiving and tracking of 
     submitted complaints against appraisers and appraisal 
     management companies, the investigation of complaints, and 
     enforcement actions against appraisers and appraisal 
     management companies. The Appraisal Subcommittee shall have 
     the authority to impose interim actions and suspensions 
     against a State agency as an alternative to, or in advance 
     of, the derecognition of a State agency.''.
       (2) in subsection (b)(2), by inserting after ``authority'' 
     the following: ``or sufficient funding''.
       (l) Reciprocity.--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:
       ``(b) Reciprocity.--A State appraiser certifying or 
     licensing agency shall issue a reciprocal certification or 
     license for an individual from another State when--
       ``(1) the appraiser licensing and certification program of 
     such other State is in compliance with the provisions of this 
     title; and
       ``(2) 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.''.
       (m) Consideration of Professional Appraisal Designations.--
     Section 1122(d) of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351(d)) is 
     amended by striking ``shall not exclude'' and all that 
     follows through the end of the subsection and inserting the 
     following: ``may include education achieved, experience, 
     sample appraisals, and references from prior clients. 
     Membership in a nationally recognized professional appraisal 
     organization may be a criteria considered, though lack of 
     membership therein shall not be the sole bar against 
     consideration for an assignment under these criteria.''.
       (n) Appraiser Independence.--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:
       ``(g) Appraiser Independence Monitoring.--The Appraisal 
     Subcommittee shall monitor each State appraiser certifying 
     and licensing agency for the purpose of determining whether 
     such agency's policies, practices, and procedures are 
     consistent with the purposes of maintaining appraiser 
     independence and whether such State has adopted and maintains 
     effective laws, regulations, and policies aimed at 
     maintaining appraiser independence.''.
       (o) Appraiser Education.--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:
       ``(h) Approved Education.--The Appraisal Subcommittee shall 
     encourage the States to accept courses approved by the 
     Appraiser Qualification Board's Course Approval Program.''.
       (p) Appraisal Complaint Hotline.--Section 1122 of the 
     Financial Institutions Reform, Recovery, and Enforcement Act 
     of 1989 (12 U.S.C. 3351), as amended by this section, is 
     further amended by adding at the end the following new 
     subsection:
       ``(i) Appraisal Complaint National Hotline.--If, 1 year 
     after the date of the enactment of this subsection, the 
     Appraisal Subcommittee determines that no national hotline 
     exists to receive complaints of non-compliance with appraisal 
     independence standards and Uniform Standards of Professional 
     Appraisal Practice, including complaints from appraisers, 
     individuals, or other entities concerning the improper 
     influencing or attempted improper influencing of appraisers 
     or the appraisal process, the Appraisal Subcommittee shall 
     establish and operate such a national hotline, which shall 
     include a toll-free telephone number and an email address. If 
     the Appraisal Subcommittee operates such a national hotline, 
     the Appraisal Subcommittee shall refer complaints for further 
     action to appropriate governmental bodies, including a State 
     appraiser certifying and licensing agency, a financial 
     institution regulator, or other appropriate legal 
     authorities. For complaints referred to State appraiser 
     certifying and licensing agencies or to Federal regulators, 
     the Appraisal Subcommittee shall have the authority to follow 
     up such complaint referrals in order to determine the status 
     of the resolution of the complaint.''.
       (q) Automated Valuation Models.--Title XI of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 3331 et seq.), as amended by this section, is 
     further amended by adding at the end the following new 
     section (and amending the table of contents accordingly):

     ``SEC. 1125. AUTOMATED VALUATION MODELS USED TO VALUE CERTAIN 
                   MORTGAGES.

       ``(a) In General.--Automated valuation models shall adhere 
     to quality control standards designed to--
       ``(1) ensure a high level of confidence in the estimates 
     produced by automated valuation models;
       ``(2) protect against the manipulation of data;
       ``(3) seek to avoid conflicts of interest; and
       ``(4) require random sample testing and reviews, where such 
     testing and reviews are performed by an appraiser who is 
     licensed or certified in the State where the testing and 
     reviews take place.
       ``(b) Adoption of Regulations.--The Appraisal Subcommittee 
     and its member agencies shall promulgate regulations to 
     implement the quality control standards required under this 
     section.
       ``(c) Enforcement.--Compliance with regulations issued 
     under this subsection shall be enforced by--
       ``(1) with respect to a financial institution, or 
     subsidiary owned and controlled by a financial institution 
     and regulated by a federal financial institution or 
     regulatory agency, the federal financial institution 
     regulatory agency that acts as the primary federal supervisor 
     of such financial institution or subsidiary; and
       ``(2) with respect to other persons, the Appraisal 
     Subcommittee.
       ``(d) Automated Valuation Model Defined.--For purposes of 
     this section, the term `automated valuation model' means any 
     computerized model used by mortgage originators and secondary 
     market issuers to determine the collateral worth of a 
     mortgage secured by a consumer's principal dwelling.''.
       (r) Broker Price Opinions.--Title XI of the Financial 
     Institutions Reform, Recovery, and Enforcement Act of 1989 
     (12 U.S.C. 3331 et seq.), as amended by this section, is 
     further amended by adding at the end the following new 
     section (and amending the table of contents accordingly):

     ``SEC. 1126. BROKER PRICE OPINIONS.

       ``(a) General Prohibition.--Broker price opinions may not 
     be used as the sole basis to determine the value of a piece 
     of property for the purpose of a loan origination of a 
     residential mortgage loan secured by such piece of property.
       ``(b) Exceptions.--Subsection (a) shall not apply to--
       ``(1) those transaction as may be designated by the federal 
     financial institutions regulatory agencies or the Federal 
     Housing Finance Agency; or
       ``(2) real estate brokers who produce broker price opinions 
     or competitive market analyses solely for the purposes of the 
     real estate listing process.
       ``(c) Broker Price Opinion Defined.--For purposes of this 
     section, the term `broker price opinion' means an estimate, 
     done in lieu of a written appraisal, prepared by a real 
     estate broker, agent, or sales person that details the 
     probable selling price of a particular piece of real estate 
     property and provides a varying level of detail about the 
     property's condition, market, and neighborhood, and 
     information on comparable sales, but does not include an 
     automated valuation model, as defined in section 1125(c).''.
       (s) Amendments to Appraisal Subcommittee.--Section 1011 of 
     the Federal Financial Institutions Examination Council Act of 
     1978 (12 U.S.C. 3310) is amended--
       (1) in the first sentence, by adding before the period the 
     following: ``and the Federal Housing Finance Agency''; and
       (2) by inserting at the end the following: ``At all times 
     at least one member of the Appraisal

[[Page 11983]]

     Subcommittee shall have demonstrated knowledge and competence 
     through licensure, certification, or professional designation 
     within the appraisal profession.''.
       (t) Technical Corrections.--
       (1) 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 ``council,'' and inserting 
     ``Council,''.
       (2) Section 1121(6) of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(6)) is 
     amended by striking ``Corporations,'' and inserting 
     ``Corporation,''.
       (3) Section 1121(8) of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(8)) is 
     amended by striking ``council'' and inserting ``Council''.
       (4) Section 1122 of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (12 U.S.C. 3351) is 
     amended--
       (A) in subsection (a)(1) by moving the left margin of 
     subparagraphs (A), (B), and (C) 2 ems to the right; and
       (B) in subsection (c)--
       (i) by striking ``Federal Financial Institutions 
     Examination Council'' and inserting ``Financial Institutions 
     Examination Council''; and
       (ii) by striking ``the council's functions'' and inserting 
     ``the Council's functions''.

     SEC. 604. STUDY REQUIRED ON IMPROVEMENTS IN APPRAISAL PROCESS 
                   AND COMPLIANCE PROGRAMS.

       (a) Study.--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 exemptions to the use of certified 
     appraisers issued by Federal financial institutions 
     regulatory agencies. The study shall also review the 
     threshold level 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. The 
     study shall additionally examine the quality of different 
     types of mortgage collateral valuations produced by broker 
     price opinions, automated valuation models, licensed 
     appraisals, and certified appraisals, among others, and the 
     quality of appraisals provided through different distribution 
     channels, including appraisal management companies, 
     independent appraisal operations within a mortgage 
     originator, and fee-for-service appraisals. The study shall 
     also include an analysis and statistical breakdown of 
     enforcement actions taken during the last 10 years against 
     different types of appraisers, including certified, licensed, 
     supervisory, and trainee appraisers. Furthermore, the study 
     shall examine the benefits and costs, as well as the 
     advantages and disadvantages, of establishing a national 
     repository to collect data related to real estate property 
     collateral valuations performed in the United States.
       (b) Report.--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.

     SEC. 605. EQUAL CREDIT OPPORTUNITY ACT AMENDMENT.

       Subsection (e) of section 701 of the Equal Credit 
     Opportunity Act ( U.S.C. 1691) is amended to read as follows:
       ``(e) Copies Furnished to Applicants.--
       ``(1) In general.--Each creditor shall furnish to an 
     applicant a copy of any and all written appraisals and 
     valuations developed in connection with the applicant's 
     application for a loan that is secured or would have been 
     secured by a first lien on a dwelling promptly upon 
     completion, but in no case later than 3 days prior to the 
     closing of the loan, whether the creditor grants or denies 
     the applicant's request for credit or the application is 
     incomplete or withdrawn.
       ``(2) Waiver.--The applicant may waive the 3 day 
     requirement provided for in paragraph (1), except where 
     otherwise required in law.
       ``(3) Reimbursement.--The applicant may be required to pay 
     a reasonable fee to reimburse the creditor for the cost of 
     the appraisal, except where otherwise required in law.
       ``(4) Free copy.--Notwithstanding paragraph (3), the 
     creditor shall provide a copy of each written appraisal or 
     valuation at no additional cost to the applicant.
       ``(5) Notification to applicants.--At the time of 
     application, the creditor shall notify an applicant in 
     writing of the right to receive a copy of each written 
     appraisal and valuation under this subsection.
       ``(6) Regulations.--The Board shall prescribe regulations 
     to implement this subsection within 1 year of the date of the 
     enactment of this subsection.
       ``(7) Valuation defined.--For purposes of this subsection, 
     the term `valuation' shall include any estimate of the value 
     of a dwelling developed in connection with a creditor's 
     decision to provide credit, including those values developed 
     pursuant to a policy of a government sponsored enterprise or 
     by an automated valuation model, a broker price opinion, or 
     other methodology or mechanism.''.

     SEC. 606. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 
                   AMENDMENT RELATING TO CERTAIN APPRAISAL FEES.

       Section 4 of the Real Estate Settlement Procedures Act of 
     1974 is amended by adding at the end the following new 
     subsection:
       ``(c) The standard form described in subsection (a) shall 
     include, in the case of an appraisal coordinated by an 
     appraisal management company (as such term is defined in 
     section 1121(11) of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(11))), 
     a clear disclosure of--
       ``(1) the fee paid directly to the appraiser by such 
     company; and
       ``(2) the administration fee charged by such company.''.

  TITLE VII--SENSE OF CONGRESS REGARDING THE IMPORTANCE OF GOVERNMENT 
                      SPONSORED ENTERPRISES REFORM

     SEC. 701. SENSE OF CONGRESS REGARDING THE IMPORTANCE OF 
                   GOVERNMENT-SPONSORED ENTERPRISES REFORM TO 
                   ENHANCE THE PROTECTION, LIMITATION, AND 
                   REGULATION OF THE TERMS OF RESIDENTIAL MORTGAGE 
                   CREDIT.

       (a) Findings.--The Congress finds as follows:
       (1) The Government-sponsored enterprises, Federal National 
     Mortgage Association (Fannie Mae) and the Federal Home Loan 
     Mortgage Corporation (Freddie Mac), were chartered by 
     Congress to ensure a reliable and affordable supply of 
     mortgage funding, but enjoy a dual legal status as privately 
     owned corporations with Government mandated affordable 
     housing goals.
       (2) In 1996, the Department of Housing and Urban 
     Development required that 42 percent of Fannie Mae's and 
     Freddie Mac's mortgage financing should go to borrowers with 
     income levels below the median for a given area.
       (3) In 2004, the Department of Housing and Urban 
     Development revised those goals, increasing them to 56 
     percent of their overall mortgage purchases by 2008, and 
     additionally mandated that 12 percent of all mortgage 
     purchases by Fannie Mae and Freddie Mac be ``special 
     affordable'' loans made to borrowers with incomes less than 
     60 percent of an area's median income, a target that 
     ultimately increased to 28 percent for 2008.
       (4) To help fulfill those mandated affordable housing 
     goals, in 1995 the Department of Housing and Urban 
     Development authorized Fannie Mae and Freddie Mac to purchase 
     subprime securities that included loans made to low-income 
     borrowers.
       (5) After this authorization to purchase subprime 
     securities, subprime and near-prime loans increased from 9 
     percent of securitized mortgages in 2001 to 40 percent in 
     2006, while the market share of conventional mortgages 
     dropped from 78.8 percent in 2003 to 50.1 percent by 2007 
     with a corresponding increase in subprime and Alt-A loans 
     from 10.1 percent to 32.7 percent over the same period.
       (6) In 2004 alone, Fannie Mae and Freddie Mac purchased 
     $175,000,000,000 in subprime mortgage securities, which 
     accounted for 44 percent of the market that year, and from 
     2005 through 2007, Fannie Mae and Freddie Mac purchased 
     approximately $1,000,000,000,000 in subprime and Alt-A loans, 
     while Fannie Mae's acquisitions of mortgages with less than 
     10 percent down payments almost tripled.
       (7) According to data from the Federal Housing Finance 
     Agency (FHFA) for the fourth quarter of 2008, Fannie Mae and 
     Freddie Mac own or guarantee 75 percent of all newly 
     originated mortgages, and Fannie Mae and Freddie Mac 
     currently own 13.3 percent of outstanding mortgage debt in 
     the United States and have issued mortgage-backed securities 
     for 31.0 percent of the residential debt market, a combined 
     total of 44.3 percent of outstanding mortgage debt in the 
     United States.
       (8) On September 7, 2008, the FHFA placed Fannie Mae and 
     Freddie Mac into conservatorship, with the Treasury 
     Department subsequently agreeing to purchase at least 
     $200,000,000,000 of preferred stock from each enterprise in 
     exchange for warrants for the purchase of 79.9 percent of 
     each enterprise's common stock.
       (9) The conservatorship for Fannie Mae and Freddie Mac has 
     potentially exposed taxpayers to upwards of 
     $5,300,000,000,000 worth of risk.
       (10) The hybrid public-private status of Fannie Mae and 
     Freddie Mac is untenable and must be resolved 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.
       (b) Sense of the Congress.--It is the sense of the Congress 
     that efforts to enhance by the protection, limitation, and 
     regulation of the terms of residential mortgage credit and 
     the practices related to such credit would be incomplete 
     without enactment of meaningful structural reforms of Fannie 
     Mae and Freddie Mac.

  The CHAIR. No amendment to the committee amendment is in order except 
those printed in House Report 111-98. Each amendment may be offered 
only in the order printed in the report, by a Member designated in the 
report, shall be considered read, shall be debatable for the time 
specified in the report, equally divided and controlled by the 
proponent and an opponent of the amendment, shall not be subject to 
amendment, and shall not be subject to a demand for division of the 
question.

[[Page 11984]]



                              {time}  1200


         Amendment No. 1 Offered by Mr. Frank of Massachusetts

  The CHAIR. It is now in order to consider amendment No. 1 printed in 
House Report 111-98.
  Mr. FRANK of Massachusetts. I offer amendment No. 1.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Frank of Massachusetts:
       In section 103(cc)(2) of the Truth in Lending Act (as added 
     by section 101 of the bill), insert at the end the following: 
     ``All rule writing by the `Federal banking agencies' as 
     designated by the Mortgage Reform and Anti-Predatory Lending 
     Act will be coordinated through the Financial Institutions 
     Examination Council in consultation with the Chairman of the 
     State Liaison Committee.''.
       In section 103(cc)(3)(C) of the Truth in Lending Act (as 
     added by section 101 of the bill), insert before the 
     semicolon the following: ``and who does not advise a consumer 
     on loan terms (including rates, fees, and other costs)''.
       In section 103(cc)(3) of the Truth in Lending Act (as added 
     by section 101 of the bill)--
       (1) in subparagraph (D), strike the final ``and'';
       (2) in subparagraph (E), strike the period at the end and 
     insert ``; and''; and
       (3) add at the end the following:
       ``(F) does not include a servicer or servicer employees, 
     agents and contractors, including but not limited to those 
     who offer or negotiate terms of a residential mortgage loan 
     for purposes of renegotiating, modifying, replacing and 
     subordinating principal of existing mortgages where borrowers 
     are behind in their payments, in default or have a reasonable 
     likelihood of being in default or falling behind.''.
       In section 103(cc)(6) of the Truth in Lending Act (as added 
     by section 101 of the bill), strike ``128(a)(f) and 
     128(b)(4)'' and insert ``and 128(f)''.
       In section 129B(b)(4)(A) of the Truth in Lending Act (as 
     added by section 102 of the bill), strike ``, the Chairman of 
     the State Liaison Committee to the Financial Institutions 
     Examination Council,''.
       In section 129B(c) of the Truth in Lending Act (as added by 
     section 103 of the bill), insert after paragraph (1) the 
     following (and redesignate succeeding paragraphs 
     accordingly):
       ``(2) Restructuring of financing origination fee.--
       ``(A) In general.--For any mortgage loan, a mortgage 
     originator may not arrange for a consumer to finance through 
     rate any origination fee or cost except bona fide third party 
     settlement charges not retained by the creditor or mortgage 
     originator.
       ``(B) Exception.--Notwithstanding paragraph subparagraph 
     (A), a mortgage originator may arrange for a consumer to 
     finance through rate an origination fee or cost if--
       ``(i) the mortgage originator does not receive any other 
     compensation from the consumer except the compensation that 
     is financed through rate; and
       ``(ii) the mortgage is a qualified mortgage.''.
       In section 129B(c)(2) of the Truth in Lending Act (as added 
     by section 103 of the bill)--
       (1) in subparagraph (C), strike the final ``and'';
       (2) in subparagraph (D), strike the period and insert ``; 
     and''; and
       (3) add at the end the following new subparagraph:
       ``(E) mortgage originators from--
       ``(i) mischaracterizing the credit history of a consumer or 
     the residential mortgage loans available to a consumer;
       ``(ii) mischaracterizing or suborning the 
     mischaracterization of the appraised value of the property 
     securing the extension of credit; or
       ``(iii) if unable to suggest, offer, or recommend to a 
     consumer a loan that is not more expensive than a loan for 
     which the consumer qualifies, discouraging a consumer from 
     seeking a home mortgage loan secured by a consumer's 
     principal dwelling from another mortgage originator.''.
       In section 129B(c)(3)(D) of the Truth in Lending Act (as 
     added by section 103 of the bill), strike ``rate or''.
       In section 129B(e)(1) of the Truth in Lending Act (as added 
     by section 105 of the bill), insert after ``standards'' the 
     following: ``necessary or proper to ensure that responsible, 
     affordable mortgage credit remains available to consumers in 
     a manner consistent with the purposes of this section and 
     section 129B,''.
       Section 106 is amended by inserting after subsection (e) 
     the following new subsection:
       (f) Standardized Disclosure Forms.--
       (1) In general.--Any regulations proposed or issued 
     pursuant to the requirements of this section shall include 
     model disclosure forms.
       (2) Option for mandatory use.--In issuing proposed 
     regulations under subsection (a), the Secretary of Housing 
     and Urban Development and the Board of Governors of the 
     Federal Reserve System shall include regulations for the 
     mandatory use of standardized disclosure forms if they 
     jointly determine that it would substantially benefit the 
     consumer.
       At the end of title I, add the following new section:

     SEC. 107. STUDY OF SHARED APPRECIATION MORTGAGES.

       (a) Study.--The Secretary of Housing and Urban Development, 
     in consultation with the Secretary of the Treasury and other 
     relevant agencies, shall conduct a comprehensive study to 
     determine prudent statutory and regulatory requirements 
     sufficient to provide for the widespread use of shared 
     appreciation mortgages to strengthen local housing markets, 
     provide new opportunities for affordable homeownership, and 
     enable homeowners at-risk of foreclosure to refinance or 
     modify their mortgages.
       (b) Report.--Not later than the expiration of the 6-month 
     period beginning on the date of the enactment of this Act, 
     the Secretary of Housing and Urban Development shall submit a 
     report to the Congress on the results of the study, which 
     shall include recommendations for the regulatory and 
     legislative requirements referred to in subsection (a).
       In paragraph (4) of section 129C(a) of the Truth in Lending 
     Act (as added by section 201(a) of the bill), insert after 
     subparagraph (D) the following new subparagraph:
       ``(E) Refinance of hybrid loans with current lender.--In 
     considering any application for refinancing an existing 
     hybrid loan by the creditor into a standard loan to be made 
     by the same creditor in any case in which the sole net-
     tangible benefit to the mortgagor would be a reduction in 
     monthly payment and the mortgagor has not been delinquent on 
     any payment on the existing hybrid loan, the creditor may--
       ``(i) consider the mortgagor's good standing on the 
     existing mortgage;
       ``(ii) consider if the extension of new credit would 
     prevent a likely default should the original mortgage reset 
     and give such concerns a higher priority as an acceptable 
     underwriting practice; and
       ``(iii) offer rate discounts and other favorable terms to 
     such mortgagor that would be available to new customers with 
     high credit ratings based on such underwriting practice.''.
       In section 129C(a)(4)(D)(ii) of the Truth in Lending Act 
     (as added by section 201 of the bill), strike ``the 
     contract's repayment schedule shall be used in this 
     calculation'' and insert the following: ``the calculation 
     shall be made (I) in accordance with regulations prescribed 
     by the Federal banking agencies, with respect to any loan 
     which has 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, by 1.5 or more percentage 
     points for a first lien residential mortgage loan; and by 3.5 
     or more percentage points for a subordinate lien residential 
     mortgage loan; or (II) using the contract's repayment 
     schedule, with respect to a loan which has an annual 
     percentage rate, as of the date the interest rate is set, 
     that is at least 1.5 percentage points above the average 
     prime offer rate for a first lien residential mortgage loan; 
     and 3.5 percentage points above the average prime offer rate 
     for a subordinate lien residential mortgage loan''.
       In section 129C(c)(2)(A)(iv)(I) of the Truth in Lending Act 
     (as added by section 203 of the bill)--
       (1) strike ``does not exceed'' and insert ``is equal to or 
     less than''; and
       (2) strike the final ``and''.
       In section 129C(c)(2)(A)(iv)(II) of the Truth in Lending 
     Act (as added by section 203 of the bill)--
       (1) strike ``exceeds'' and insert ``is more than''; and
       (2) strike the semicolon on the end and insert ``; and''.
       In section 129C(c)(2)(A)(iv) of the Truth in Lending Act 
     (as added by section 203 of the bill), add at the end the 
     following:

       ``(III) by 3.5 or more percentage points, in the case of a 
     subordinate lien residential mortgage loan;''.

       In section 129C(c) of the Truth in Lending Act (as added by 
     section 203 of the bill), in the header of paragraph (3), 
     after ``rate'' insert the following: ``and APR thresholds''.
       In section 129C(c)(3) of the Truth in Lending Act (as added 
     by section 203 of the bill)--
       (1) in subparagraph (A), strike the final ``and'';
       (2) in subparagraph (B), strike the period and insert ``; 
     and''; and
       (3) add at the end the following:
       ``(C) shall adjust the thresholds of 1.50 percentage points 
     in paragraph (2)(A)(iv)(I), 2.50 percentage points in 
     paragraph (2)(A)(iv)(II), and 3.50 percentage points in 
     paragraph (2)(A)(v)(III), as necessary to reflect significant 
     changes in market conditions and to effectuate the purposes 
     of the Mortgage Reform and Anti-Predatory Lending Act.''.
       In section 129C(c)(4)(B)(i) of the Truth in Lending Act (as 
     added by section 203 of the bill), after ``are'' insert the 
     following: ``necessary or proper to ensure that responsible, 
     affordable mortgage credit remains available to consumers in 
     a manner consistent with the purposes of this section,''.
       In section 129C(c)(4)(B)(ii) of the Truth in Lending Act 
     (as added by section 203 of the bill), after ``shall'' insert 
     the following: ``, in

[[Page 11985]]

     consultation with the Federal banking agencies,''.
       In section 129C(d)(1)(B) of the Truth in Lending Act (as 
     added by section 204 of the bill), strike ``creditor 
     provides'' and insert ``creditor, acting in good faith,''.
       In section 129C(d)(3) of the Truth in Lending Act (as added 
     by section 204 of the bill), strike ``and (b) shall'' and 
     insert ``and (b), consistent with reasonable due diligence 
     practices prescribed by the Federal banking agencies, 
     shall''.
       In section 129C(d)(10) of the Truth in Lending Act (as 
     added by section 204 of the bill)--
       (1) in the header, strike ``Pools and'' and insert 
     ``Trustees, pools, and''; and
       (2) insert before ``the pools of such loans'' the 
     following: ``any trustee that holds such loans solely for the 
     benefit of the securitization vehicle,''.
       In section 129C(g)(2) of the Truth in Lending Act (as added 
     by section 205 of the bill), after ``designees,'' insert the 
     following: ``subject to the rights of the consumer described 
     in this subsection,''.
       In section 129C(h) of the Truth in Lending Act (as added by 
     section 206 of the bill), strike paragraph (3) (and 
     redesignate succeeding paragraphs accordingly).
       In section 206, insert at the end the following new 
     subsections:
       (c) Protection Against Loss of Anti-Deficiency 
     Protection.--Section 129C of the Truth in Lending Act is 
     amended by inserting after subsection (k) (as added by 
     subsection (a) of this section) the following new subsection 
     (and designated succeeding subsections accordingly):
       ``(l) Protection Against Loss of Anti-Deficiency 
     Protection.--
       ``(1) Definition.--For purposes of this subsection, the 
     term `anti-deficiency law' means the law of any State which 
     provides that, in the event of foreclosure on the residential 
     property of a consumer securing a mortgage, the consumer is 
     not liable, in accordance with the terms and limitations of 
     such State law, for any deficiency between the sale price 
     obtained on such property through foreclosure and the 
     outstanding balance of the mortgage.
       ``(2) Notice at time of consummation.--In the case of any 
     residential mortgage loan that is, or upon consummation will 
     be, subject to protection under an anti-deficiency law, the 
     creditor or mortgage originator shall provide a written 
     notice to the consumer describing the protection provided by 
     the anti-deficiency law and the significance for the consumer 
     of the loss of such protection before such loan is 
     consummated.
       ``(3) Notice before refinancing that would cause loss of 
     protection.--In the case of any residential mortgage loan 
     that is subject to protection under an anti-deficiency law, 
     if a creditor or mortgage originator provides an application 
     to a consumer, or receives an application from a consumer, 
     for any type of refinancing for such loan that would cause 
     the loan to lose the protection of such anti-deficiency law, 
     the creditor or mortgage originator shall provide a written 
     notice to the consumer describing the protection provided by 
     the anti-deficiency law and the significance for the consumer 
     of the loss of such protection before any agreement for any 
     such refinancing is consummated.''.
       (d) Policy Regarding Acceptance of Partial Payment.--
     Section 129C of the Truth in Lending Act is amended by 
     inserting after subsection (l) the following new subsection 
     (and redesignating subsequent subsections of such section 
     accordingly):
       ``(m) Policy Regarding Acceptance of Partial Payment.--In 
     the case of any residential mortgage loan, a creditor shall 
     disclose prior to settlement or, in the case of a person 
     becoming a creditor with respect to an existing residential 
     mortgage loan, at the time such person becomes a creditor--
       ``(1) the creditor's policy regarding the acceptance of 
     partial payments; and
       ``(2) if partial payments are accepted, how such payments 
     will be applied to such mortgage and if such payments will be 
     placed in escrow;''.
       In section 208(b)--
       (1) in paragraph (3)(B), strike the final ``or'';
       (2) in paragraph (4), strike the period on the end and 
     insert ``; or''; and
       (3) add at the end the following new paragraph:
       (5) notwithstanding paragraph (2), the availability of any 
     remedies under State law against any assignee, securitizer or 
     securitization vehicle that--
       (A) are in addition to those remedies provided for in 
     section 129C; and
       (B) were in effect on the date of enactment of this Act.
       In section 129C(l)(1) of the Truth in Lending Act (as added 
     by section 213 of the bill), strike ``in section'' and insert 
     ``under section''.
       In section 129C(l)(2)(B) of the Truth in Lending Act (as 
     added by section 213 of the bill)--
       (1) strike ``prohibit creditors'' and insert ``prohibit a 
     creditor''; and
       (2) strike ``creditors are required'' and insert ``such 
     creditor is required''.
       In section 129C(l)(2)(C) of the Truth in Lending Act (as 
     added by section 213 of the bill)--
       (1) strike ``require creditors'' and insert ``require a 
     creditor''; and
       (2) insert before the semicolon the following: ``by such 
     creditor''.
       In section 129C(l)(3)(A) of the Truth in Lending Act (as 
     added by section 213 of the bill), after ``authority to'' 
     insert the following: ``jointly''.
       In section 129C(l)(3)(B)(i) of the Truth in Lending Act (as 
     added by section 213 of the bill), strike ``mortgage 
     lenders'' and insert ``creditors that make residential 
     mortgage loans that are not qualified mortgages''.
       In section 129C(l)(3)(B)(ii) of the Truth in Lending Act 
     (as added by section 213 of the bill), strike ``mortgage 
     lenders'' and insert ``such creditors''.
       In section 129C(l)(4) of the Truth in Lending Act (as added 
     by section 213 of the bill)--
       (1) in the heading, strike ``securitization sponsors'' and 
     insert ``securitizers'';
       (2) strike ``agencies shall have discretion to'' and insert 
     ``agencies may jointly, in their discretion,'';
       (3) strike ``non-qualified mortgages in addition to or in 
     place of creditors that make non-qualified mortgages if the 
     agencies determine that applying the requirements to 
     securitization sponsors rather than originators'' and insert 
     ``residential mortgages (or particular types of residential 
     mortgages) that are not qualified mortgages in addition to or 
     in substitution for any or all of the requirements that apply 
     to creditors that make such mortgages if the agencies jointly 
     determine that applying the requirements to such 
     securitizers'';
       (4) in subparagraph (A), strike ``mortgage lenders'' and 
     insert ``creditors of residential mortgage loans that are not 
     qualified mortgages''; and
       (5) in subparagraph (B)--
       (A) strike ``mortgage lenders, or'' and insert ``such 
     creditors,''; and
       (B) before the period, insert ``, or otherwise serve the 
     public interest''.
       After section 128(a)(18) of the Truth in Lending Act (as 
     added by section 214(a) of the bill) add the following:
       ``(19) In the case of a residential mortgage loan, the 
     total amount of interest that the consumer will pay over the 
     life of the loan as a percentage of the principal of the 
     loan. Such amount shall be computed assuming the consumer 
     makes each monthly payment in full and on-time, and does not 
     make any over-payments.''.
       Strike section 214(b).
       In subsection (f)(1) of section 128 of the Truth in Lending 
     Act (as added by section 215 of the bill), insert after 
     subparagraph (F) the following new subparagraph (and 
     redesignate the subsequent subparagraph accordingly):
       ``(G) 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).''.
       In subsection (c) of section 218, insert ``, including an 
     analysis of the exceptions and adjustments authorized in 
     section 129C(l)(3)(A) of the Truth in Lending Act and a 
     recommendation on whether a uniform standard is needed'' 
     before the period at the end.
       At the end of section 218, insert the following new 
     subsection:
       (d) Analysis of Credit Risk Retention Provisions.--The 
     report required by subsection (b) shall also include--
       (1) an analysis by the Comptroller General of whether the 
     credit risk retention provisions have significantly reduced 
     risks to the larger credit market of the repackaging and 
     selling of securitized loans on a secondary market; and
       (2) recommendations to the Congress on adjustments that 
     should be made, or additional measures that should be 
     undertaken.
       In section 130(e) of the Truth in Lending Act (as amended 
     by section 219 of the bill), strike ``section 219'' and 
     insert ``section 220''.
       In section 220 of the bill, insert after subsection (b) the 
     following new subsection (and redesignate succeeding 
     subsections accordingly):
       (c) Landlord Notice to Tenants.--Notwithstanding the law of 
     any State or the terms of any consumer residential lease, 
     each person who owns a dwelling or residential real 
     property--
       (1) which is leased to a bona fide tenant (including a 
     tenancy terminable at will), or which the landlord offers to 
     lease to a prospective tenant; and
       (2) which, pursuant to the terms of a valid loan to such 
     person which is secured by such dwelling or property, is or 
     becomes subject to foreclosure or with respect to which the 
     person is in default,

     shall promptly notify any such tenant or prospective tenant 
     of the circumstances prevailing with respect to such property 
     and the effect of any such default or foreclosure. The 
     requirements of this subsection shall have no effect on any 
     State or local law that provides additional notice or other 
     additional protections for tenants.
       In section 103(aa)(4)(B) of the Truth in Lending Act (as 
     amended by section 301(c) of the bill)--
       (1) strike ``broker'' and insert ``originator''; and

[[Page 11986]]

       (2) strike ``the originator'' and insert ``the creditor''.
       In section 103(dd) of the Truth in Lending Act (as added by 
     section 301(d) of the bill)--
       (1) in the header, strike ``and prepayment penalties'';
       (2) in the matter preceding paragraph (1)--
       (A) strike ``(4)'' and insert ``(2)''; and
       (B) strike ``may'' and insert ``shall'';
       (3) redesignate paragraphs (2) and (3) as paragraphs (3) 
     and (4), respectively;
       (4) in paragraph (4), as redesignated by paragraph (3), 
     strike ``paragraph (1)'' and insert ``paragraphs (1) and 
     (2)''; and
       (5) strike paragraph (1) and insert the following:
       ``(1) 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--
       ``(A) 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; or
       ``(B) if secured by a personal property loan, the average 
     rate on a loan in connection with which insurance is provided 
     under title I of the National Housing Act (12 U.S.C. 1702 et 
     seq.).
       ``(2) Unless 2 bona fide discount points have been excluded 
     under paragraph (1), 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--
       ``(A) 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; or
       ``(B) if secured by a personal property loan, the average 
     rate on a loan in connection with which insurance is provided 
     under title I of the National Housing Act (12 U.S.C. 1702 et 
     seq.).''.
       In subsection (r) of section 129 of the Truth in Lending 
     Act, as added by section 303(c) of the bill, strike 
     ``Deferral Fees Prohibited.--A creditor'' and insert 
     ``Deferral Fees Prohibited.--

       ``(1) Creditors.--A creditor''.
       At the end of paragraph (1) of subsection (r) of section 
     129 of the Truth in Lending Act, (as so designated by the 
     preceding amendment) insert the following new paragraphs:
       ``(2) Third parties.-- A third-party may not charge a 
     consumer any fee to--
       ``(A) modify, renew, extend, or amend a high-cost mortgage, 
     or defer any payment due under the terms of such mortgage;
       ``(B) negotiate with a creditor on behalf of a consumer, 
     the modification, renewal, extension, or amendment of a high-
     cost mortgage; or
       ``(C) negotiate with a creditor on behalf of a consumer, 
     the deferral of any payment due under the terms of such 
     mortgage,

     unless the modification renewal, extension or amendment 
     results in a significantly lower annual percentage rate on 
     the mortgage, or a significant reduction in the amount of the 
     outstanding principal 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.
       ``(3) Enforcement.--Section 130 shall be applied for 
     purposes of paragraph (2) by--
       ``(A) substituting `third party' for `creditor'each place 
     such term appears; and
       ``(B) substituting `any fee charged by a third party' for 
     `finance charge' each place such term appears.''.
       In subsection (g)(3)(B)(ix) of section 4 of the Department 
     of Housing and Urban Development Act (as added by section 
     402) insert ``, including underdeveloped areas that lack 
     basic water and sewer systems, electricity services, and 
     safe, sanitary housing'' before the period at the end.
       In the matter proposed to be inserted by the amendment made 
     by section 403(a) of the bill, in subsection (g)(1)(B)(xi), 
     strike ``and'' after the semicolon.
       In the matter proposed to be inserted by the amendment made 
     by section 403(a) of the bill, in subsection (g)(1)(B)(xii), 
     strike the period at the end and insert ``; and''.
       In the matter proposed to be inserted by the amendment made 
     by section 403(a) of the bill, after clause (xii) of 
     subsection (g)(1)(B) add the following:
       ``(xiii) section 106 of the Energy Policy Act of 1992 (42 
     U.S.C. 12712 note).''.
       In the matter proposed to be inserted by the amendment made 
     by section 403(a) of the bill, in subsection (g)(5), strike 
     ``and home repair loans'' and insert the following: ``home 
     repair loans, and where appropriate by region, any 
     requirements and costs associated with obtaining flood or 
     other disaster-specific insurance coverage''.
       In subparagraph (C) of paragraph (4) of the matter proposed 
     to be inserted by the amendment made by section 404 of the 
     bill, before the period at the end insert the following: 
     ``and that ensures adequate distribution of amounts for rural 
     areas having traditionally low levels of access to such 
     counseling services, including areas with insufficient access 
     to the Internet''.
       In section 406, insert ``, and the role of computer 
     registries of mortgages, including those used for trading 
     mortgage loans'' before the period at the end of the 2nd 
     sentence.
       After section 406, insert the following new section (and 
     redesignate succeeding sections in title IV accordingly):

     SEC. 407. DEFAULT AND FORECLOSURE DATABASE.

       (a) Establishment.--The Secretary of Housing and Urban 
     Development, in consultation with the Federal agencies 
     responsible for regulation of banking and financial 
     institutions involved in residential mortgage lending and 
     servicing, shall establish and maintain a database of 
     information on foreclosures and defaults on mortgage loans 
     for one- to four-unit residential properties and shall make 
     such information publicly available.
       (b) Census Tract Data.--Information in the database shall 
     be collected, aggregated, and made available on a census 
     tract basis.
       (c) Requirements.--Information collected and made available 
     through the database shall include--
       (1) the number and percentage of such mortgage loans that 
     are delinquent by more than 30 days;
       (2) the number and percentage of such mortgage loans that 
     are delinquent by more than 90 days;
       (3) the number and percentage of such properties that are 
     real estate-owned;
       (4) number and percentage of such mortgage loans that are 
     in the foreclosure process;
       (5) the number and percentage of such mortgage loans that 
     have an outstanding principal obligation amount that is 
     greater than the value of the property for which the loan was 
     made; and
       (6) such other information as the Secretary considers 
     appropriate.
       In section 6(l)(1)(B) of the Real Estate Settlement 
     Procedures Act of 1974 (as added by section 503 of the bill), 
     strike ``clauses'' and insert ``clause''.
       In section 129D(b) of the Truth in Lending Act (as added by 
     section 501 of the bill), amend paragraph (3) to read as 
     follows:
       ``(3) the transaction is secured by a first mortgage or 
     lien on the consumer's principal dwelling having an original 
     principal obligation amount that--
       ``(A) does not exceed the amount of the maximum limitation 
     on the original principal obligation of mortgage in effect 
     for a residence of the applicable size, as of the date such 
     interest rate set, pursuant to the sixth sentence of section 
     305(a)(2) the Federal Home Loan Mortgage Corporation Act (12 
     U.S.C. 1454(a)(2)), and the annual percentage rate will 
     exceed the average prime offer rate for a comparable 
     transaction by 1.5 or more percentage points; or
       ``(B) exceeds the amount of the maximum limitation on the 
     original principal obligation of mortgage in effect for a 
     residence of the applicable size, as of the date such 
     interest rate set, pursuant to the sixth sentence of section 
     305(a)(2) the Federal Home Loan Mortgage Corporation Act (12 
     U.S.C. 1454(a)(2)), and the annual percentage rate will 
     exceed the average prime offer rate for a comparable 
     transaction by 2.5 or more percentage points; or''.
       Redesignate section 128(b)(5) of the Truth in Lending Act 
     (as added by section 505 of the bill) as section 128(b)(4) of 
     the Truth in Lending Act.
       Section 601 is amended to read as follows:

     SEC. 601. PROPERTY APPRAISAL REQUIREMENTS.

       Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et 
     seq.) is amended by inserting after 129G (as added by section 
     504) the following new section:

     ``SEC. 129H PROPERTY APPRAISAL REQUIREMENTS.

       ``(a) In General.--A creditor may not extend credit in the 
     form of a subprime mortgage to any consumer without first 
     obtaining a written appraisal of the property to be mortgaged 
     prepared in accordance with the requirements of this section.
       ``(b) Appraisal Requirements.--
       ``(1) Physical property visit.--An appraisal of property to 
     be secured by a subprime mortgage does not meet the 
     requirement of this section unless it is performed by a 
     qualified appraiser who conducts a physical property visit of 
     the interior of the mortgaged property.
       ``(2) Second appraisal under certain circumstances.--
       ``(A) In general.--If the purpose of a subprime mortgage 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.

[[Page 11987]]

       ``(B) No cost to applicant.--The cost of any second 
     appraisal required under subparagraph (A) may not be charged 
     to the applicant.
       ``(3) Qualified appraiser defined.--For purposes of this 
     section, the term `qualified appraiser' means a person who--
       ``(A) is, at a minimum, certified or licensed by the State 
     in which the property to be appraised is located; and
       ``(B) 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.
       ``(c) Free Copy of Appraisal.--A creditor shall provide 1 
     copy of each appraisal conducted in accordance with this 
     section in connection with a subprime mortgage to the 
     applicant without charge, and at least 3 days prior to the 
     transaction closing date.
       ``(d) Consumer Notification.--At the time of the initial 
     mortgage application, the applicant 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 
     applicant may choose to have a separate appraisal conducted 
     at their own expense.
       ``(e) Violations.--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 
     section shall be liable to the applicant or borrower for the 
     sum of $2,000.
       ``(f) Subprime Mortgage Defined.--For purposes of this 
     section, the term `subprime mortgage' means a residential 
     mortgage loan secured by a principal dwelling with an annual 
     percentage rate that exceeds the average prime offer rate for 
     a comparable transaction, as of the date the interest rate is 
     set--
       ``(1) by 1.5 or more percentage points, in the case of a 
     first lien residential mortgage loan having an original 
     principal obligation amount that does not exceed the amount 
     of the maximum limitation on the original principal 
     obligation of mortgage in effect for a residence of the 
     applicable size, as of the date of such interest rate set, 
     pursuant to the sixth sentence of section 305(a)(2) the 
     Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1454(a)(2));
       ``(2) by 2.5 or more percentage points, in the case of a 
     first lien residential mortgage loan having an original 
     principal obligation amount that exceeds the amount of the 
     maximum limitation on the original principal obligation of 
     mortgage in effect for a residence of the applicable size, as 
     of the date of such interest rate set, pursuant to the sixth 
     sentence of section 305(a)(2) the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1454(a)(2)); and
       ``(3) by 3.5 or more percentage points for a subordinate 
     lien residential mortgage loan''.
       In section 603, amend the header to read as follows: 
     ``Amendments relating to Appraisal Subcommittee of FIEC, 
     Appraiser Independence Monitoring, Approved Appraiser 
     Education, Appraisal Management Companies, Appraiser 
     Complaint Hotline, Automated Valuation Models, and Broker 
     Price Opinions''.
       Strike section 603(a)(2)(B) (and redesignate succeeding 
     subparagraphs accordingly).
       In section 1103(a) of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (as amended by sections 
     603(a) and 603(b) of the bill)--
       (1) in paragraph (5), strike ``; and'' and insert a period; 
     and
       (2) strike paragraph (4) and redesignate paragraph (6) as 
     paragraph (4).
       In the header of section 603(e), strike ``Field''.
       In section 1121 of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (as added by section 
     603(e)(4) of the bill), strike ``10 certified'' and insert 
     ``15 certified''.
       In section 1125(b) of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (as added by section 
     603(q) of the bill), after ``member agencies'' insert the 
     following: ``, in consultation with the Appraisal Standards 
     Board of the Appraisal Foundation and other interested 
     parties,''.
       In section 1125(c)(1) of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (as added by section 
     603(q) of the bill), strike ``institution or regulatory'' and 
     insert ``institution regulatory''.
       In section 1126 of the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989 (as added by section 
     603(r) of the bill), strike subsections (a), (b), and (c), 
     and insert the following:
       ``(a) General Prohibition.--In conjunction with the 
     purchase of a consumer's principal dwelling, broker price 
     opinions may not be used as the primary basis to determine 
     the value of a piece of property for the purpose of a loan 
     origination of a residential mortgage loan secured by such 
     piece of property.
       ``(b) Broker Price Opinion Defined.--For purposes of this 
     section, the term `broker price opinion' means an estimate 
     prepared by a real estate broker, agent, or sales person that 
     details the probable selling price of a particular piece of 
     real estate property and provides a varying level of detail 
     about the property's condition, market, and neighborhood, and 
     information on comparable sales, but does not include an 
     automated valuation model, as defined in section 1125(c).''.
       In section 604, add at the end the following:
       (c) Additional Study Required.--The Comptroller General 
     shall conduct an additional study to determine the effects 
     that the changes to the seller-guide appraisal requirements 
     of Fannie Mae and Freddie Mac contained in the Home Valuation 
     Code of Conduct have on small business, like mortgage brokers 
     and independent appraisers, and consumers, including the 
     effect on the--
       (1) quality and costs of appraisals;
       (2) length of time for obtaining appraisals;
       (3) impact on consumer protection, especially regarding 
     maintaining appraisal independence, abating appraisal 
     inflation, and mitigating acts of appraisal fraud;
       (4) structure of the appraisal industry, especially 
     regarding appraisal management companies, fee-for-service 
     appraisers, and the regulation of appraisal management 
     companies by the states; and
       (5) impact on mortgage brokers and other small business 
     professionals in the financial services industry.
       (d) Additional Report.--Before the end of the 6-month 
     period beginning on the date of the enactment of this Act, 
     the Comptroller General shall submit an additional report to 
     the Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate containing the findings and 
     conclusions of the Comptroller General with respect to the 
     study conducted pursuant to subsection (c). Such additional 
     report shall take into consideration the Small Business 
     Administration's views on how small businesses are affected 
     by the Home Valuation Code of Conduct.
       Insert after title VII the following new title (and conform 
     the table of contents accordingly):

                          TITLE VIII--REPORTS

     SEC. 801. GAO STUDY REPORT ON GOVERNMENT EFFORTS TO COMBAT 
                   MORTGAGE FORECLOSURE RESCUE SCAMS AND LOAN 
                   MODIFICATION FRAUD.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study of the current inter-agency efforts of 
     the Secretary of the Treasury, the Secretary of Housing and 
     Urban Development, the Attorney General, and the Federal 
     Trade Commission to crackdown on mortgage foreclosure rescue 
     scams and loan modification fraud in order to advise the 
     Congress to the risks and vulnerabilities of emerging schemes 
     in the loan modification arena.
       (b) Report.--
       (1) In general.--The Comptroller General shall submit a 
     report to the Congress on the study conducted under 
     subsection (a) containing such recommendations for 
     legislative and administrative actions as the Comptroller 
     General may determine to be appropriate in addition to the 
     recommendations required under paragraph (2).
       (2) Specific topics.--The report made under paragraph (1) 
     shall include--
       (A) an evaluation of the effectiveness of the inter-agency 
     task force current efforts to combat mortgage foreclosure 
     rescue scams and loan modification fraud scams;
       (B) specific recommendations on agency or legislative 
     action that are essential to properly protect homeowners from 
     mortgage foreclosure rescue scams and loan modification fraud 
     scams; and
       (C) the adequacy of financial resources that the Federal 
     Government is allocating to--
       (i) crackdown on loan modification and foreclosure rescue 
     scams; and
       (ii) the education of homeowners about fraudulent scams 
     relating to loan modification and foreclosure rescues.
       Insert after title VIII the following new title (and 
     conform the table of contents accordingly):

               TITLE IX--MULTIFAMILY MORTGAGE RESOLUTION

     SEC. 901. MULTIFAMILY MORTGAGE RESOLUTION PROGRAM.

       (a) Establishment.--Subject to subsection (e), the 
     Secretary of the Treasury, in consultation with the Secretary 
     of Housing and Urban Development, shall develop a program to 
     stabilize multifamily properties which are delinquent, at 
     risk of default or disinvestment, or in foreclosure.
       (b) Focus of Program.--The program developed under this 
     section shall be used to ensure the protection of current and 
     future tenants of at risk multifamily properties, where 
     feasible, by--
       (1) creating sustainable financing of such properties that 
     is based on--
       (A) the current rental income generated by such properties; 
     and
       (B) the preservation of adequate operating reserves;
       (2) maintaining the level of Federal, State, and city 
     subsidies in effect as of the date of enactment of this Act; 
     and
       (3) facilitating the transfer, when necessary, of such 
     properties to responsible new owners.
       (c) Coordination.--The Secretary of the Treasury shall in 
     carrying out the program developed under this section 
     coordinate with the Secretary of Housing and Urban 
     Development, the Federal Deposit Insurance Corporation, the 
     Board of Governors of the Federal Reserve System, the Federal 
     Housing Finance Agency, and any other Federal Government 
     agency that the Secretary considers appropriate.

[[Page 11988]]

       (d) Definition.--For purposes of this section, the term 
     ``multifamily properties'' means a residential structure that 
     consists of 5 or more dwelling units.
       (e) Authority.--This section shall not limit the ability of 
     the Secretary of the Treasury to use any existing authority 
     to carry out the program under this section.

  The CHAIR. Pursuant to House Resolution 406, the gentleman from 
Massachusetts (Mr. Frank) and a Member opposed each will control 15 
minutes.
  The Chair recognizes the gentleman from Massachusetts.
  Mr. FRANK of Massachusetts. Mr. Chairman, this is a somewhat bigger 
than usual manager's amendment because, frankly, we are responding to 
the interest of the Members in trying to leave. I prevailed on some 
Members who had amendments to put them in the manager's amendment. They 
are not 100 percent agreed to, I think, in every case, but none of them 
are major changes. There are some major changes that we will be dealing 
with separately. So my intention during the time that I have will be to 
yield to those Members who very graciously have agreed to have their 
amendments put in the manager's amendment.
  Mr. Chairman, I will begin by yielding 1\1/2\ minutes to the 
gentleman from Maryland (Mr. Sarbanes).
  Mr. SARBANES. Mr. Chairman, I rise in support of H.R. 1728, the 
Mortgage Reform and Anti-Predatory Lending Act.
  I want to express my thanks to Chairman Frank for incorporating into 
the manager's amendment a proposal we developed to fight back against a 
new class of predators which is emerging right now. These are third-
party consultants that see the chance to make fast money promising to 
help people on their loan modifications.
  I want to emphasize that not all counseling services by third parties 
are bad and not all middlemen are bad, but there is a group that is 
always ready to take advantage of people. They're like sharks that are 
circling, and in Maryland we've seen the Department of Licensing Labor 
and Regulation has 70 open cases right now looking into fraudulent 
mortgage modifications.
  What has been incorporated in the manager's amendment that we put 
forward would prohibit third parties from charging fees to consumers 
for providing or negotiating on a consumer's behalf a modification to a 
high-cost mortgage unless these actions result in a benefit to the 
consumer through a significant reduction in principal or a 
significantly lower annual percentage rate on the mortgage. This will 
protect a lot of people, and I thank Chairman Frank for including this 
in the manager's amendment.
  Mr. NEUGEBAUER. Mr. Chairman, I rise to claim time in opposition to 
the amendment.
  The CHAIR. The gentleman is recognized for 15 minutes.
  Mr. NEUGEBAUER. Mr. Chairman, I yield myself such time as I may 
consume.
  There are some provisions in this amendment that I support and there 
are some that I don't.
  One of the parts of it that I do support is the amendment does call 
for a GAO study to analyze the effectiveness of the risk-retention 
provisions of this bill and make recommendations to Congress. My only 
regret is I wish we could have done a study before we implement this 
particular piece of legislation.
  As you know, section 213 of the bill requires creditors to retain an 
economic interest in at least 5 percent of the credit risk of each loan 
that is not a qualified mortgage that the creditor transfers, sells, or 
conveys to a third party.
  I think a lot of people feel that this skin in the game may be a good 
provision. I think the question that arises is what will be the impact 
on small lenders and small community banks across the country? One of 
the things that we want to make sure is that the bill is not really 
clear about the mechanism or the mechanics of how this provision would 
be implemented, and we're going to have to have regulatory 
clarification on that. I wish that, again, we could have had a study in 
advance of that so that we could then make sure that, as we are 
implementing this bill, that the regulators have some direction of how 
to go to make sure we implement this provision without causing major 
disruption in the mortgage process. Again, I wish we could have done 
that before.
  There are concerns that I have about the manager's amendment as well, 
Mr. Chairman. First of all, rather than clarifying provisions related 
to broker compensation, yield-spread premiums, and ensuring all types 
of mortgage creditors are covered by equal antisteering provisions, 
this amendment adds further inequity and confusion.
  Congressman Miller offered an amendment during the Financial Services 
Committee markup that would have preserved the careful balance of 
banning steering while preserving a consumer's ability to finance the 
closing costs and origination fees associated with their loan.
  In committee, Chairman Frank said he felt that he and Mr. Miller had 
agreed in principle about only banning incentivized compensation and 
not direct compensation. Mr. Miller withdrew his amendment, given the 
agreement by the chairman to work with him on details of the language. 
The manager's amendment does not reflect that agreement, and the Rules 
Committee did not make in order an amendment submitted by Mr. Miller. 
Really instead of clarifying the ability of consumers to finance 
closing costs and origination fees through rate or principal, the 
manager's amendment removes that option to finance through the rate 
completely.
  Additionally, the manager's amendment says all origination fees must 
be collected either up front or all fees shall be in the rate. This 
means consumers, again, will no longer have the option of paying some 
closing costs up front and some through the rate.
  Consumers should be able to finance closing costs and origination 
fees as they deem appropriate for their individual circumstances. 
Clarifications were expected to ensure the preservation of this option, 
but the only clarification made was that the bill will now only 
prohibit this option in the manager's amendment.
  What does that mean? Well, that means when an individual goes to 
their mortgage lender or to their local community bank, in the past 
they have had an option to say, you know, I would need to put a certain 
amount of my closing costs in the loan and maybe that would be 
reflected in the rate. Maybe part of it would be reflected in the 
principal balance. But now we're going to take away the option for the 
banker to offer that to the individuals. And I think that's what our 
opposition has been to this bill from the very beginning, that while we 
are trying to prevent predatory lending, and everybody is against 
predatory lending, at the same time we've started down a road where we 
are going to limit the available products to individuals. We're going 
to raise the cost of these mortgages to individuals, and, more 
importantly, we're going to cause mass confusion in the marketplace.
  There are some very punitive things in this bill that if someone is 
``steering,'' that could result in a lawsuit. And steering could be, 
well, I think this mortgage, if I offered you this one, it would be 
beneficial to you but I also think if I offered you this mortgage. But 
I think it's going to deter a lot of mortgage bankers and community 
bankers from offering two different options to individuals because 
they're going to be afraid that somehow they are steering.
  I have some other concerns which I will express further into the 
debate here.
  At this time, Mr. Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I yield myself such time as 
I may consume.
  The gentleman from Texas is correct. I did tell my friend Mr. Miller 
from California we will work on it. It slipped. But I have spoken to 
him. The gentleman presented things very accurately. As I talked to Mr. 
Miller, I think what we have to do, and we will do this before this 
bill becomes law, is spell out exactly what's allowed. I think we have 
conceptual agreement

[[Page 11989]]

on what should be banned and what should be allowed. Sometimes people 
want to leave too much implicit. I'm a great believer that redundancy 
is better than ambiguity. So I have given the gentleman from California 
my commitment that before this bill becomes law, if it does, we will 
spell out what is permitted, much of what the gentleman said.

  Mr. Chairman, I submit the following correspondence:

         Congress of the United States, House of Representatives, 
           Committee on the Judiciary,
                                      Washington, DC, May 7, 2009.
     Hon. Barney Frank,
     Chairman, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairman Frank: This is to advise you that, as a 
     result of your having consulted with us on provisions in H.R. 
     1728, the ``Mortgage Reform and Anti-Predatory Lending Act,'' 
     that fall within the rule X jurisdiction of the Committee on 
     the Judiciary, we are able to agree to discharging our 
     committee from further consideration of the bill in order 
     that it may proceed without delay to the House floor for 
     consideration.
       The Judiciary Committee takes this action with the 
     understanding that by foregoing further consideration of H.R. 
     1728 at this time, we do not waive any jurisdiction over 
     subject matter contained in this or similar legislation. We 
     appreciate your continued willingness to consider further 
     clarifications and refinements to the provisions in our 
     jurisdiction as the legislation moves forward. Finally, we 
     reserve the right to seek appointment of an appropriate 
     number of conferees to any House-Senate conference involving 
     this important legislation, and request your support if such 
     a request is made.
       I would appreciate your including this letter in the 
     Congressional Record during consideration of the bill on the 
     House floor. Thank you for your attention to this request, 
     and for the cooperative relationship between our two 
     committees.
           Sincerely,
                                                John Conyers, Jr.,
                                                         Chairman.
                                  ____
                                  
                                         House of Representatives,


                              Committee on Financial Services,

                                      Washington, DC, May 6, 2009.
     Hon. John Conyers, Chairman, Committee on the Judiciary, 
       House of Representatives, Washington, DC.
       Dear Chairman Conyers: Thank you for your letter concerning 
     H.R. 1728, the ``Mortgage Reform and Anti-Predatory Lending 
     Act.'' This bill will be considered by the House shortly.
       I want to confirm our mutual understanding with respect to 
     the consideration of this bill. I acknowledge that portions 
     of the bill as reported fall within the jurisdiction of the 
     Committee on the Judiciary and I appreciate your cooperation 
     in moving the bill to the House floor expeditiously. I 
     further agree that your decision to not to proceed with a 
     markup on this bill will not prejudice the Committee on the 
     Judiciary with respect to its prerogatives on this or similar 
     legislation. I would support your request for conferees on 
     those provisions within your jurisdiction in the event of a 
     House-Senate conference.
       I will include a copy of this letter and your response in 
     the Congressional Record. Thank you again for your 
     assistance.
                                                     Barney Frank,
                                                         Chairman.

  With that, Mr. Chairman, I will now yield 1\1/2\ minutes to a very 
diligent member of the committee who has an amendment in the manager's 
amendment, the gentleman from Minnesota (Mr. Ellison).
  Mr. ELLISON. Let me thank the Chair for his shepherding this 
critically important piece of legislation to the floor and getting us 
to this point.
  Mr. Chairman, I am very grateful that the Chair and all the members 
of the committee were able to include in the manager's amendment what I 
believe is almost the very heart of the problem here, and that is that 
people who qualified for certain kinds of loans were steered to loans 
that made certain other folks more wealthy and other people who were 
out to seek loans had their credit ratings mischaracterized. Sometimes 
people had appraisals that were false and not true, and then, of 
course, people who were eligible for certain loans were literally 
discouraged from shopping around to get a better loan.
  This type of steering is not ambiguous; it's not middle-of-the-road 
stuff. It is just wrong. And I am glad that the manager's amendment is 
going to direct the Secretary to promulgate rules that will put certain 
no-nos into the bill that would prevent steering.
  I think if we had not had the level of steering that we had, we would 
not have the number of exotic subprime loans that we had, predatory 
loans. And if we didn't have that, we very likely would not be at the 
depth of trouble that we're in right now.
  So I'm very happy that this is included in the manager's amendment, 
that we will have some clear don'ts that we will ask rules to be 
promulgated on, prohibiting mischaracterizing of appraisals, 
prohibiting discouraging shopping around, prohibiting 
mischaracterization of credit scores and others.
  Mr. NEUGEBAUER. Mr. Chairman, I appreciate the chairman's sensitivity 
to this because I think it is a very important issue that we need to 
resolve in this legislation before it becomes law.
  Mr. FRANK of Massachusetts. Will the gentleman yield?
  Mr. NEUGEBAUER. I yield to the gentleman.
  Mr. FRANK of Massachusetts. It's my fault it wasn't done. I guarantee 
to you it will be done before the bill, and I appreciate the 
indulgence. And I have apologized to Mr. Miller.
  Mr. NEUGEBAUER. Thank you.
  Mr. Chairman, at this time it's my privilege to yield 2 minutes to 
the gentlewoman from West Virginia (Mrs. Capito).
  Mrs. CAPITO. I would like to thank the gentleman for yielding to me.
  I would like to talk about the bill in general, Mr. Chairman. This 
legislation was just introduced on March 23, and less than a month 
later, which included our 2-week District Work Period, we had one 
hearing and then it was followed by a 2-week markup, and we're hearing 
now where things are still needing to be clarified, which I think goes 
to my first point. I think it's important for my colleagues to realize 
that this legislation has the potential to forever change the mortgage 
market, and I have concerns that, while changes are indeed needed, 
maybe we may be moving too briskly on broad legislation that could have 
some serious unintended consequences.
  The credit risk-retention provision, the skin-in-the-game provision, 
while it's supported in concept by most, it's still being worked out. 
There is no consensus on whom the scope of this provision would 
encompass or what the effect would be on the liquidity in the market. 
According to the Mortgage Bankers Association, a record number of 
borrowers are delinquent, the housing market is still very fragile, and 
what is needed is a sense of certainty that we can accept a floor in 
the market. We don't need constant tinkering and changing so that that 
stability is not there.
  A glaring omission in this legislation, also, is it does nothing to 
address the future of the GSEs Fannie and Freddie. These two entities 
provide the lion's share of liquidity in the mortgage market, and any 
mortgage reform legislation should include provisions defining the 
future role of GSEs in the market.
  I supported this legislation last week in the Financial Services 
Committee and I will support it again today, but I do have real 
concerns about some of the provisions that are still left in limbo. I 
don't believe, and I don't think anybody does, we should be cutting off 
dollars to homebuyers and homeowners while trying to prevent a problem 
from happening again.
  Mr. FRANK of Massachusetts. Mr. Chairman, I now yield 1\1/2\ minutes 
to one of the Members of the House who has been most concerned with 
stopping this abuse, the gentlewoman from Maryland (Ms. Edwards).
  Ms. EDWARDS of Maryland. Mr. Chairman, I rise today in support of 
Chairman Frank's manager's amendment, and I want to thank the chairman, 
with whom I worked diligently to modify the preemption language in 
section 208 in a way that would allow the preservation of State laws 
that provide for ``additional remedies against any assignee, 
securitizer, or securitization vehicle,'' which is the case in my home 
State of Maryland.
  My home State of Maryland has been very aggressive at addressing the 
foreclosure crisis to protect consumers from fraud and predatory 
lenders. Maryland was one of the first States to enact an ability to 
repay mortgage law and has worked closely with the Department of 
Justice in these efforts on behalf of consumers.

[[Page 11990]]



                              {time}  1215

  This important amendment would respect States like Maryland that 
already have stringent laws to address some of these issues.
  I would like to thank Chairman Frank and particularly Mr. Miller and 
Mr. Watt for their years of work on behalf of consumers.
  I urge all of my colleagues to support Chairman Frank's manager's 
amendment and the underlying bill. Many of these mortgage products 
should never have been on the market in the first place, and now we 
will get it right on behalf of consumers.
  Mr. NEUGEBAUER. I want to speak to the gentlewoman's provision in 
this bill, and one of the concerns I have, I mean, there is a lot of 
people that want to debate States' rights versus Federal rights. One of 
the concerns I have about the provision in the manager's amendment is 
that it says yes. It says, yes, there is Federal jurisdiction and, yes, 
there is State jurisdiction.
  What I am concerned about is that could cause some potential 
conflicts, and that States would think they had jurisdiction, the 
Federal Government would think they have jurisdiction, and that States 
might get the opinion that they might have jurisdiction on some of the 
other provisions in this bill.
  And so one of the things that I think we need to make sure of, as we 
move forward on this legislation, is we have, maybe, clearer lines on 
this preemption statute to make sure that everybody understands what 
the rules of engagement are, as this particular piece of legislation is 
being implemented.
  So one of the other pieces of opposition that we have to this is that 
we need a clear, I think a clearer preemption wording in this bill to 
make sure that we understand what the States' jurisdiction is over this 
bill and what the Federal jurisdiction is over this bill.
  I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, first I would say to my 
friend from Texas that we wanted some protection to States that don't 
have the option of seceding. States that could secede don't need this 
protection. But those that plan to stay in the Union, we thought we 
would try to recognize it to try to protect them.
  I yield 1\1/2\ minutes to the gentleman from Rhode Island (Mr. 
Langevin).
  Mr. LANGEVIN. I thank the gentleman for yielding.
  Mr. Chairman, I rise in strong support of H.R. 1718, the Mortgage 
Reform and Anti-Predatory Lending Act and the manager's amendment 
that's before us today, which I know will bring greater transparency to 
lending practices nationwide.
  Unconventional mortgages have left countless Americans facing 
foreclosure, and this is especially true in my home state of Rhode 
Island, with one of the highest foreclosure rates in the country.
  With this bill, we will combat unscrupulous lending practices and 
bring transparency to the process by requiring mortgage originators to 
be licensed and mandating full disclosure of loan terms. Perhaps, most 
importantly, mortgage originators would certify that consumers have a 
reasonable ability to pay back the loans that they were applying for 
and that they are not predatory in nature.
  We have seen too many lenders steer consumers into loans that they 
cannot afford. We cannot allow that practice to continue or to ever 
happen again. I am also pleased that this measure includes protections 
to renters of foreclosed property.
  H.R. 1728 will address persistent problems in the housing market, 
bring financial stability to families and ensure that the appropriate 
measures are in place to prevent this kind of mortgage foreclosure 
crisis from ever happening again in the future.
  I want to thank and commend the gentleman from Massachusetts, 
Chairman Frank, for his outstanding leadership on this important 
measure. I urge support of this bill and the manager's amendment before 
us today.
  Mr. NEUGEBAUER. Mr. Chairman, another provision in this that has 
caused concern is the tenant provisions.
  This amendment would require property owners to promptly notify any 
tenants or potential tenants upon becoming subject to foreclosure or 
defaulting on their mortgage loan. This language requires the owner to 
provide information on the circumstances with respect to the property 
and the effect of the default or foreclosure.
  Notice to tenants is important. However, in multifamily projects such 
as apartments, a receiver is typically put in place to manage the 
property so that residents can remain in their apartments with no 
disruption. Mandating a notice to residents, if not done correctly, 
could cause alarm and maybe not even needed alarm.
  I have a letter from the National Apartment Association where they 
have concerns about this very issue, that if you have got an apartment 
complex, the owner may be temporarily in default. You give notice to 
the tenants that you are temporarily in default. The tenants get 
scared, they start looking for other places to live, and, basically, 
creating vacancies, and, in fact, maybe making the default permanent by 
the fact that there will not be sufficient revenues to make the 
payments. So I have very large concerns about that.
  Additionally, the amendment allows HUD to step in to troubled 
properties, transfer a multiproperty project, if delinquent, at the 
risk of fault or disinvestment or foreclosure.
  This is a fairly major expansion of HUD's authority and could be 
considered to be a property taking. Property of this type may not be in 
foreclosure as yet, yet the provision would force properties into 
foreclosure or over into government control, again, a major expansion, 
quite honestly, a move away from what the original intent of this 
legislation was.
  The original intent of this legislation was to prevent predatory 
lending. And now we are prescribing how tenants are going to be 
treated, whether we are going to force property owners to make 
disclosures about their financial condition, a major diversion from 
what I think is the intent of this legislation, and, again, one of the 
reasons that I do not support this amendment.
  Mr. Chairman, I reserve the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, I reserve the balance of my 
time.
  Mr. NEUGEBAUER. Mr. Chairman, I, again, rise in opposition to this 
amendment. One of the purposes of this legislation, again, we said, was 
to prevent predatory lending. But, unfortunately, the consequences of 
this legislation are going to be to increase the cost of mortgage 
financing for consumers.
  It's going to raise the monthly payments for many consumers over what 
their choices would have originally been. It's going to limit the 
choices that are available to them. It's going to force lenders to 
provide maybe only one choice. It's also, I think, going to continue to 
cause a major disruption in the mortgage system.
  As one of the speakers originally said, the market is very fragile 
right now, and some of the provisions in this amendment, I think, 
contribute to that.
  With that, I encourage Members to vote against this.
  I yield back the balance of my time.
  Mr. FRANK of Massachusetts. Mr. Chairman, how much time do I have 
remaining?
  The CHAIR. The gentleman from Massachusetts has 8 minutes remaining.
  Mr. FRANK of Massachusetts. I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Massachusetts (Mr. Frank).
  The amendment was agreed to.
  The CHAIR. The Committee will rise informally.
  The Speaker pro tempore (Mr. Perlmutter) assumed the Chair.

                          ____________________