[House Report 115-528]
[From the U.S. Government Publishing Office]


115th Congress     }                                 {         Report
                        HOUSE OF REPRESENTATIVES
 2d Session        }                                 {         115-528
======================================================================



 
                 HOUSING OPPORTUNITIES MADE EASIER ACT

                                _______
                                

January 29, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 2255]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 2255) to clarify that nonprofit organizations 
may accept donated mortgage appraisals, and for other purposes, 
having considered the same, report favorably thereon without 
amendment and recommend that the bill do pass.

                          Purpose and Summary

    Introduced by Representative Trott, H.R. 2255, the 
``Housing Opportunities Made Easier Act'' amends the Truth in 
Lending Act (TILA) to deem mortgage appraisal services donated 
by a fee appraiser to an organization that is eligible to 
receive tax-deductible charitable contributions to be customary 
and reasonable.

                  Background and Need for Legislation

    Title XIV of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd Frank Act)(P.L. 111-203), also known as 
the Mortgage Reform and Anti-Predatory Lending Act, made a 
number of changes to the regulation of property appraisals. The 
Dodd-Frank Act set new federal standards for the independence 
of appraisers, mandated independence for appraisers, and 
created rules for customary and reasonable fees.
    Section 1472(i) of the Dodd-Frank Act directed the Bureau 
of Consumer Financial Protection (CFPB) to establish reasonable 
and customary fees for fee appraisers, professionals who 
furnish appraisal services for a fee. The definition of fee 
appraiser excludes employees of banks and appraisal management 
companies. Under this provision, fee appraisers are to receive 
payment that is ``customary and reasonable'' for appraisal 
services performed in the market area of the property being 
appraised. As the prudential financial regulators seek to 
formulate these fees, Title XIV of Dodd-Frank requires them to 
consider objective third-party information, such as government 
agency fee schedules, academic studies, and independent private 
sector surveys. As the prudential regulators collect the 
necessary information to formulate customary and reasonable 
fees, Section 1472(i) also directs relevant federal agencies\1\ 
to exclude fees that are connected to assignments ordered by 
appraisal management companies. The CFPB promulgated rules to 
implement the statute, which went into effect in 2014.\2\
---------------------------------------------------------------------------
    \1\Term ``agencies'' collectively refers to the Office of 
Comptroller of the Currency (OCC), the Federal Reserve Board, the 
Federal Deposit Insurance Corporation (FDIC), the National Credit Union 
Association (NCUA), the Consumer Financial Protection Bureau (CFPB), 
and the Federal Housing Finance Agency (FHFA).
    \2\https://www.federalregister.gov/documents/2013/01/31/2013-01384/
disclosure-and-delivery-requirements-for-copies-of-appraisals-and-
other-written-valuations-under-the 
---------------------------------------------------------------------------
    However, the CFPB's use of the terms ``customary'' and 
``reasonable'' in its rule created an issue for non-profit 
housing organizations, such as Habitat for Humanity, who enlist 
individuals and groups in local communities all over the world 
to help build or improve dwellings for low-income and 
impoverished families. In many cases these organizations 
require volunteer labor and monetary donations to complete 
projects, help build homes and obtain affordable mortgages. In 
2017 alone Habitat for Humanity assisted more than 30 thousand 
low-income Americans construct or rehabilitate their dwellings. 
This figure could have been substantially higher if 
organizations such as Habitat for Humanity were permitted to 
receive appraisals at no cost.\3\
---------------------------------------------------------------------------
    \3\https://www.habitat.org/sites/default/files/annual-report-
FY2017-web.pdf.
---------------------------------------------------------------------------
    As a result, the CFPB's definition for the cost of 
appraisals has hindered certain non-profit housing 
organizations' ability to provide cost effective residences for 
the needy because the CFPB could interpret appraisal donations 
as a violation of the law. With appraisal costs reaching up to 
more than $1000 each, Habitat for Humanity has said that the 
``provisions in [the Dodd-Frank Act], including appraisal 
independence regulations, created unintended consequences for 
Habitat for Humanity and other nonprofit organizations 
providing responsible homeownership opportunities to families 
without access to bank mortgages.''

                                Hearings

    The Committee on Financial Services held a hearing 
examining matters relating to H.R. 2255 on April 26, 2017 and 
April 28, 2017.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
January 17, 2018 and January 18, 2018 and ordered H.R. 2255 to 
be reported favorably by a recorded vote of 55 yeas to 0 nays 
(Record vote no. FC-139), a quorum being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole recorded vote was on a motion by Chairman Hensarling to 
report the bill favorably to the House without amendment. The 
motion was agreed to by a recorded vote of 55 yeas to 0 nays 
(Record vote no. FC-139), a quorum being present.




[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]





                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 2255 
will allow mortgage appraisal services donated by a fee 
appraiser to an organization that is eligible to receive tax-
deductible charitable contributions to be deemed customary and 
reasonable.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, January 26, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2255, the HOME 
Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Stephen 
Rabent.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 2255--HOME Act

    Under current law, mortgage lenders are required to 
compensate property appraisers at a customary and reasonable 
rate for performing appraisal services. H.R. 2255 would deem 
appraisal services donated to an organization that is eligible 
to receive tax-deductible charitable contributions to be 
customary and reasonable for purposes of that requirement.
    Using information from the Consumer Financial Protection 
Bureau (CFPB), CBO estimates that enacting H.R. 2255 would cost 
$1 million over the 2018-2020 period for several agencies to 
prepare an interagency rule amending their regulations to 
reflect the new appraisal requirements.
    Costs incurred by the Federal Deposit Insurance 
Corporation, the National Credit Union Administration, the 
Office of the Comptroller of the Currency, and the Federal 
Housing Finance Agency are recorded in the budget as increases 
in direct spending. Those agencies are authorized to collect 
premiums and fees from the financial institutions they regulate 
to fully cover such administrative expenses. The CFPB is 
permanently authorized to spend amounts transferred from the 
Federal Reserve. Because that activity is not subject to 
appropriation, the CFPB's expenditures are recorded in the 
budget as direct spending. In total, CBO estimates that 
enacting H.R. 2255 would increase net direct spending by less 
than $500,000 over the 2018-2020 period.
    Costs to the Federal Reserve System reduce remittances to 
the Treasury, which are recorded in the budget as revenues. CBO 
estimates that enacting H.R. 2255 would decrease such revenues 
by less than $500,000 over the 2018-2020 period.
    The net effect on the deficit would be insignificant. 
Because enacting H.R. 2255 would affect direct spending and 
revenues, pay-as-you-go procedures apply.
    CBO estimates that enacting H.R. 2255 would not 
significantly increase net direct spending or on-budget 
deficits in any of the four consecutive 10-year periods 
beginning in 2028.
    H.R. 2255 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Stephen Rabent. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed 
rulemakings: The Committee estimates that the bill requires no 
directed rulemakings within the meaning of such section.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section cites H.R. 2255 as the ``Housing Opportunities 
Made Easier Act'' or the ``HOME Act''.

Section 2. Exemption from Truth in Lending Act

    This section amends the Truth in Lending Act (TILA) to 
allow mortgage appraisal services donated by fee appraisers to 
an organization that is eligible to receive tax-deductible 
charitable contributions as defined by Section 170(c)(2) of the 
Internal Revenue Code of 1986, be deemed customary and 
reasonable.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                SECTION 129E OF THE TRUTH IN LENDING ACT



           *       *       *       *       *       *       *
Sec. 129E. Appraisal independence requirements

  (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 act or practice that violates appraisal independence as 
described in or pursuant to regulations prescribed under this 
section.
  (b) Appraisal Independence.--For purposes of subsection (a), 
acts or practices that violate appraisal independence 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, 
        appraisal management company, firm, or other entity 
        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 when the appraisal report or services 
        are provided for in accordance with the contract 
        between the parties.
  (c) Exceptions.--The requirements of subsection (b) shall not 
be construed as prohibiting a mortgage lender, mortgage broker, 
mortgage banker, real estate broker, appraisal management 
company, employee of an appraisal management company, consumer, 
or any other person with an interest in a real estate 
transaction from asking an appraiser to undertake 1 or more of 
the following:
          (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) Rules and Interpretive Guidelines.--
          (1) In general.--Except as provided under paragraph 
        (2), the Board, the Comptroller of the Currency, the 
        Federal Deposit Insurance Corporation, the National 
        Credit Union Administration Board, the Federal Housing 
        Finance Agency, and the Bureau may jointly issue rules, 
        interpretive guidelines, and general statements of 
        policy with respect to acts or practices that violate 
        appraisal independence 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), (f), (h), and (i).
          (2) Interim final regulations.--The Board shall, for 
        purposes of this section, prescribe interim final 
        regulations no later than 90 days after the date of 
        enactment of this section defining with specificity 
        acts or practices that violate appraisal independence 
        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. Rules prescribed by the 
        Board under this paragraph shall be deemed to be rules 
        prescribed by the agencies jointly under paragraph (1).
  (h) Appraisal Report Portability.--Consistent with the 
requirements of this section, the Board, the Comptroller of the 
Currency, the Federal Deposit Insurance Corporation, the 
National Credit Union Administration Board, the Federal Housing 
Finance Agency, and the Bureau may jointly issue regulations 
that address the issue of appraisal report portability, 
including regulations that ensure the portability of the 
appraisal report between lenders for a consumer credit 
transaction secured by a 1-4 unit single family residence that 
is the principal dwelling of the consumer, or mortgage 
brokerage services for such a transaction.
  (i) Customary and Reasonable Fee.--
          (1) In general.--Lenders and their agents shall 
        compensate fee appraisers at a rate that is customary 
        and reasonable for appraisal services performed in the 
        market area of the property being appraised. Evidence 
        for such fees may be established by objective third-
        party information, such as government agency fee 
        schedules, academic studies, and independent private 
        sector surveys. Fee studies shall exclude assignments 
        ordered by known appraisal management companies.
          (2) Fee appraiser definition.--For purposes of this 
        section, the term ``fee appraiser'' means a person who 
        is not an employee of the mortgage loan originator or 
        appraisal management company engaging the appraiser and 
        is--
                  (A) a State licensed or certified appraiser 
                who receives a fee for performing an appraisal 
                and certifies that the appraisal has been 
                prepared in accordance with the Uniform 
                Standards of Professional Appraisal Practice; 
                or
                  (B) a company not subject to the requirements 
                of section 1124 of the Financial Institutions 
                Reform, Recovery, and Enforcement Act of 1989 
                (12 U.S.C. 3331 et seq.) that utilizes the 
                services of State licensed or certified 
                appraisers and receives a fee for performing 
                appraisals in accordance with the Uniform 
                Standards of Professional Appraisal Practice.
          (3) Exception for complex assignments.--In the case 
        of an appraisal involving a complex assignment, the 
        customary and reasonable fee may reflect the increased 
        time, difficulty, and scope of the work required for 
        such an appraisal and include an amount over and above 
        the customary and reasonable fee for non-complex 
        assignments.
          (4) Rule of construction related to appraisal 
        donations.--For purposes of paragraph (1), if a fee 
        appraiser voluntarily donates appraisal services to an 
        organization described in section 170(c)(2) of the 
        Internal Revenue Code of 1986, such voluntary donation 
        shall be deemed customary and reasonable.
  (j) Sunset.--Effective on the date the interim final 
regulations are promulgated pursuant to subsection (g), the 
Home Valuation Code of Conduct announced by the Federal Housing 
Finance Agency on December 23, 2008, shall have no force or 
effect.
  (k) 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.

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