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[House Report 110-441]
[From the U.S. Government Publishing Office]

110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    110-441

======================================================================

 
         MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT OF 2007

                                _______
                                

November 9, 2007.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Frank of Massachusetts, from the Committee on Financial Services, 
                        submitted the following

                              R E P O R T

                             together with

                    ADDITIONAL AND DISSENTING VIEWS

                        [To accompany H.R. 3915]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 3915) to amend the Truth in Lending Act to 
reform consumer mortgage practices and provide accountability 
for such practices, to establish licensing and registration 
requirements for residential mortgage originators, to provide 
certain minimum standards for consumer mortgage loans, and for 
other purposes, having considered the same, report favorably 
thereon with an amendment and recommend that the bill as 
amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................    35
Background and Need for Legislation..............................    36
Hearings.........................................................    38
Committee Consideration..........................................    42
Committee Votes..................................................    42
Committee Oversight Findings.....................................    49
Performance Goals and Objectives.................................    49
New Budget Authority, Entitlement Authority, and Tax Expenditures    50
Committee Cost Estimate..........................................    50
Congressional Budget Office Estimate.............................    50
Federal Mandates Statement.......................................    55
Advisory Committee Statement.....................................    55
Constitutional Authority Statement...............................    56
Applicability to Legislative Branch..............................    56
Earmark Identification...........................................    56
Section-by-Section Analysis of the Legislation...................    56
Changes in Existing Law Made by the Bill, as Reported............    58

Additional and Dissenting Views or._For purposes of this subsection, an individual ``assists a consumer in obtaining or applying to obtain a residential mortgage loan'' by, among other things, advising on loan terms (including rates, fees, other costs), preparing loan packages, or collecting information on behalf of the consumer with regard to a residential mortgage loan.

(C) Administrative or clerical tasks._The term ``administrative or clerical tasks'' means the receipt, collection, and distribution of information common for the processing or underwriting of a loan in the mortgage industry and communication with a consumer to obtain information necessary for the processing or underwriting of a residential mortgage loan.
(D) Real estate brokerage activity defined._The term ``real estate brokerage activity'' means any activity that involves offering or providing real estate brokerage services to the public, including_
(i) acting as a real estate agent or real estate broker for a buyer, seller, lessor, or lessee of real property;
(ii) listing or advertising real property for sale, purchase, lease, rental, or exchange;
(iii) providing advice in connection with sale, purchase, lease, rental, or exchange of real property;
(iv) bring to obtain a residential mortgage loan'' by, among other things, advising on loan terms (including rates, fees, other costs), preparing loan packages, or collecting information on behalf of the consumer with regard to a residential mortgage loan.
other loan originator.
(B) Other definitions relating to loan originator._For purposes of this subsection, an individual ``assists a consumer in obtaining or applying to obtain a residential mortgage loan'' by, among other things, advising on loan terms (including rates, fees, other costs), preparing loan packages, or collecting information on behalf of the consumer with regard to a residential mortgage loan.

                               Amendment

    The amendment is as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``Mortgage Reform and 
Anti-Predatory Lending Act of 2007''.
  (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

 Subtitle A--Licensing System for Residential Mortgage Loan Originators

Sec. 101. Purposes and methods for establishing a mortgage licensing 
system and registry.
Sec. 102. Definitions.
Sec. 103. License or registration required.
Sec. 104. State license and registration application and issuance.
Sec. 105. Standards for State license renewal.
Sec. 106. System of registration administration by Federal banking 
agencies.
Sec. 107. Secretary of Housing and Urban Development backup authority 
to establish a loan originator licensing system.
Sec. 108. Backup authority to establish a nationwide mortgage licensing 
and registry system.
Sec. 109. Fees.
Sec. 110. Background checks of loan originators.
Sec. 111. Confidentiality of information.
Sec. 112. Liability provisions.
Sec. 113. Enforcement under HUD backup licensing system.

      Subtitle B--Residential Mortgage Loan Origination Standards

Sec. 121. Definitions.
Sec. 122. Residential mortgage loan origination.
Sec. 123. Anti-steering.
Sec. 124. Liability.
Sec. 125. Regulations.

               TITLE II--MINIMUM STANDARDS FOR MORTGAGES

Sec. 201. Ability to repay.
Sec. 202. Net tangible benefit for refinancing of residential mortgage 
loans.
Sec. 203. Safe harbor and rebuttable presumption.
Sec. 204. Liability.
Sec. 205. Defense to foreclosure.
Sec. 206. Additional standards and requirements.
Sec. 207. Rule of construction.
Sec. 208. Effect on State laws.
Sec. 209. Regulations.
Sec. 210. Amendments to civil liability provisions.
Sec. 211. Required disclosures.
Sec. 212. Authorization of appropriations.
Sec. 213. Effective date.

                     TITLE III--HIGH-COST MORTGAGES

Sec. 301. Definitions relating to high-cost mortgages.
Sec. 302. Amendments to existing requirements for certain mortgages.
Sec. 303. Additional requirements for certain mortgages.
Sec. 304. Amendment to provision governing correction of errors.
Sec. 305. Regulations.
Sec. 306. Effective date.

                 TITLE IV--OFFICE OF HOUSING COUNSELING

Sec. 401. Short title.
Sec. 402. Establishment of Office of Housing Counseling.
Sec. 403. Counseling procedures.
Sec. 404. Grants for housing counseling assistance.
Sec. 405. Requirements to use HUD-certified counselors under HUD 
programs.
Sec. 406. Study of defaults and foreclosures.
Sec. 407. Definitions for counseling-related programs.
Sec. 408. Updating and simplification of mortgage information booklet.

 TITLE V--MORTGAGE DISCLOSURES UNDER REAL ESTATE SETTLEMENT PROCEDURES 
                              ACT OF 1974

Sec. 501. Universal mortgage disclosure in good faith estimate of 
settlement services costs.

             TITLE I--RESIDENTIAL MORTGAGE LOAN ORIGINATION

 Subtitle A--Licensing System for Residential Mortgage Loan Originators

SEC. 101. PURPOSES AND METHODS FOR ESTABLISHING A MORTGAGE LICENSING 
                    SYSTEM AND REGISTRY.

  In order to increase uniformity, reduce regulatory burden, enhance 
consumer protection, and reduce fraud, the States, through the 
Conference of State Bank Supervisors and the American Association of 
Residential Mortgage Regulators, are hereby encouraged to establish a 
Nationwide Mortgage Licensing System and Registry for the residential 
mortgage industry that accomplishes all of the following objectives:
          (1) Provides uniform license applications and reporting 
        requirements for State-licensed loan originators.
          (2) Provides a comprehensive licensing and supervisory 
        database.
          (3) Aggregates and improves the flow of information to and 
        between regulators.
          (4) Provides increased accountability and tracking of loan 
        originators.
          (5) Streamlines the licensing process and reduces the 
        regulatory burden.
          (6) Enhances consumer protections and supports anti-fraud 
        measures.
          (7) Provides consumers with easily accessible information 
        regarding the employment history of, and publicly adjudicated 
        disciplinary and enforcement actions against, loan originators.

SEC. 102. DEFINITIONS.

  For purposes of this subtitle, the following definitions shall apply:
          (1) 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 National Credit Union 
        Administration, and the Federal Deposit Insurance Corporation.
          (2) Depository institution.--The term ``depository 
        institution'' has the same meaning as in section 3 of the 
        Federal Deposit Insurance Act and includes any credit union.
          (3) Loan originator.--
                  (A) In general.--The term ``loan originator''--
                          (i) means an individual who--
                                  (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, for direct 
                                or indirect compensation or gain, or in 
                                the expectation of direct or indirect 
                                compensation or gain;
                          (ii) includes any individual 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 individual 
                        can or will provide or perform any of the 
                        activities described in clause (i);
                          (iii) does not include any individual who 
                        performs purely administrative or clerical 
                        tasks and is not otherwise described in this 
                        subparagraph; and
                          (iv) 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 the person or 
                        entity is compensated by a lender, a mortgage 
                        broker, or other loan originator or by any 
                        agent of such lender, mortgage broker, or other 
                        loan originator.
                  (B) Other definitions relating to loan originator.--
                For purposes of this subsection, an individual 
                ``assists a consumer in obtaining or applying to obtain 
                a residential mortgage loan'' by, among other things, 
                advising on loan terms (including rates, fees, other 
                costs), preparing loan packages, or collecting 
                information on behalf of the consumer with regard to a 
                residential mortgage loan.
                  (C) Administrative or clerical tasks.--The term 
                ``administrative or clerical tasks'' means the receipt, 
                collection, and distribution of information common for 
                the processing or underwriting of a loan in the 
                mortgage industry and communication with a consumer to 
                obtain information necessary for the processing or 
                underwriting of a residential mortgage loan.
                  (D) Real estate brokerage activity defined.--The term 
                ``real estate brokerage activity'' means any activity 
                that involves offering or providing real estate 
                brokerage services to the public, including--
                          (i) acting as a real estate agent or real 
                        estate broker for a buyer, seller, lessor, or 
                        lessee of real property;
                          (ii) listing or advertising real property for 
                        sale, purchase, lease, rental, or exchange;
                          (iii) providing advice in connection with 
                        sale, purchase, lease, rental, or exchange of 
                        real property;
                          (iv) bringing together parties interested in 
                        the sale, purchase, lease, rental, or exchange 
                        of real property;
                          (v) negotiating, on behalf of any party, any 
                        portion of a contract relating to the sale, 
                        purchase, lease, rental, or exchange of real 
                        property (other than in connection with 
                        providing financing with respect to any such 
                        transaction);
                          (vi) engaging in any activity for which a 
                        person engaged in the activity is required to 
                        be registered or licensed as a real estate 
                        agent or real estate broker under any 
                        applicable law; and
                          (vii) offering to engage in any activity, or 
                        act in any capacity, described in clause (i), 
                        (ii), (iii), (iv), (v), or (vi).
          (4) Loan processor or underwriter.--
                  (A) In general.--The term ``loan processor or 
                underwriter'' means an individual who performs clerical 
                or support duties at the direction of and subject to 
                the supervision and instruction of--
                          (i) a State-licensed loan originator; or
                          (ii) a registered loan originator.
                  (B) Clerical or support duties.--For purposes of 
                subparagraph (A), the term ``clerical or support 
                duties'' may include--
                          (i) the receipt, collection, distribution, 
                        and analysis of information common for the 
                        processing or underwriting of a residential 
                        mortgage loan; and
                          (ii) communicating with a consumer to obtain 
                        the information necessary for the processing or 
                        underwriting of a loan, to the extent that such 
                        communication does not include offering or 
                        negotiating loan rates or terms, or counseling 
                        consumers about residential mortgage loan rates 
                        or terms.
          (5) Nationwide mortgage licensing system and registry.--The 
        term ``Nationwide Mortgage Licensing System and Registry'' 
        means a mortgage licensing system developed and maintained by 
        the Conference of State Bank Supervisors and the American 
        Association of Residential Mortgage Regulators for the State 
        licensing and registration of State-licensed loan originators 
        and the registration of registered loan originators or any 
        system established by the Secretary under section 108.
          (6) Registered loan originator.--The term ``registered loan 
        originator'' means any individual who--
                  (A) meets the definition of loan originator and is an 
                employee of a depository institution or a subsidiary of 
                a depository institution; and
                  (B) is registered with, and maintains a unique 
                identifier through, the Nationwide Mortgage Licensing 
                System and Registry.
          (7) Residential mortgage loan.--The term ``residential 
        mortgage loan'' means any loan primarily for personal, family, 
        or household use that is secured by a mortgage, deed of trust, 
        or other equivalent consensual security interest on a dwelling 
        (as defined in section 103(v) of the Truth in Lending Act) or 
        residential real estate upon which is constructed or intended 
        to be constructed a dwelling (as so defined).
          (8) Secretary.--The term ``Secretary'' means the Secretary of 
        Housing and Urban Development.
          (9) State-licensed loan originator.--The term ``State-
        licensed loan originator'' means any individual who--
                  (A) is a loan originator;
                  (B) is not an employee of a depository institution or 
                any subsidiary of a depository institution; and
                  (C) is licensed by a State or by the Secretary under 
                section 107 and registered as a loan originator with, 
                and maintains a unique identifier through, the 
                Nationwide Mortgage Licensing System and Registry.
          (10) Unique identifier.--The term ``unique identifier'' means 
        a number or other identifier that--
                  (A) permanently identifies a loan originator; and
                  (B) is assigned by protocols established by the 
                Nationwide Mortgage Licensing System and Registry and 
                the Federal banking agencies to facilitate electronic 
                tracking of loan originators and uniform identification 
                of, and public access to, the employment history of and 
                the publicly adjudicated disciplinary and enforcement 
                actions against loan originators.

SEC. 103. LICENSE OR REGISTRATION REQUIRED.

  (a) In General.--An individual may not engage in the business of a 
loan originator without first--
          (1) obtaining and maintaining--
                  (A) a registration as a registered loan originator; 
                or
                  (B) a license and registration as a State-licensed 
                loan originator; and
          (2) obtaining a unique identifier.
  (b) Loan Processors and Underwriters.--
          (1) Supervised loan processors and underwriters.--A loan 
        processor or underwriter who does not represent 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 individual can or will perform any of the 
        activities of a loan originator shall not be required to be a 
        State-licensed loan originator or a registered loan originator.
          (2) Independent contractors.--A loan processor or underwriter 
        may not work as an independent contractor unless such processor 
        or underwriter is a State-licensed loan originator or a 
        registered loan originator.

SEC. 104. STATE LICENSE AND REGISTRATION APPLICATION AND ISSUANCE.

  (a) Background Checks.--In connection with an application to any 
State for licensing and registration as a State-licensed loan 
originator, the applicant shall, at a minimum, furnish to the 
Nationwide Mortgage Licensing System and Registry information 
concerning the applicant's identity, including--
          (1) fingerprints for submission to the Federal Bureau of 
        Investigation, and any governmental agency or entity authorized 
        to receive such information for a State and national criminal 
        history background check; and
          (2) personal history and experience, including authorization 
        for the System to obtain--
                  (A) an independent credit report obtained from a 
                consumer reporting agency described in section 603(p) 
                of the Fair Credit Reporting Act; and
                  (B) information related to any administrative, civil 
                or criminal findings by any governmental jurisdiction.
  (b) Issuance of License.--The minimum standards for licensing and 
registration as a State-licensed loan originator shall include the 
following:
          (1) The applicant has not had a loan originator or similar 
        license revoked in any governmental jurisdiction during the 5-
        year period immediately preceding the filing of the present 
        application.
          (2) The applicant has not been convicted, pled guilty or nolo 
        contendere in a domestic, foreign, or military court of a 
        felony during the 7-year period immediately preceding the 
        filing of the present application.
          (3) The applicant has demonstrated financial responsibility, 
        character, and general fitness such as to command the 
        confidence of the community and to warrant a determination that 
        the loan originator will operate honestly, fairly, and 
        efficiently within the purposes of this subtitle.
          (4) The applicant has completed the pre-licensing education 
        requirement described in subsection (c).
          (5) The applicant has passed a written test that meets the 
        test requirement described in subsection (d).
  (c) Pre-Licensing Education of Loan Originators.--
          (1) Minimum educational requirements.--In order to meet the 
        pre-licensing education requirement referred to in subsection 
        (b)(4), a person shall complete at least 20 hours of education 
        approved in accordance with paragraph (2), which shall include 
        at least 3 hours of Federal law and regulations and 3 hours of 
        ethics.
          (2) Approved educational courses.--For purposes of paragraph 
        (1), pre-licensing education courses shall be reviewed, 
        approved and published by the Nationwide Mortgage Licensing 
        System and Registry.
  (d) Testing of Loan Originators.--
          (1) In general.--In order to meet the written test 
        requirement referred to in subsection (b)(5), an individual 
        shall pass, in accordance with the standards established under 
        this subsection, a qualified written test developed and 
        administered by the Nationwide Mortgage Licensing System and 
        Registry.
          (2) Qualified test.--A written test shall not be treated as a 
        qualified written test for purposes of paragraph (1) unless--
                  (A) the test consists of a minimum of 100 questions; 
                and
                  (B) the test adequately measures the applicant's 
                knowledge and comprehension in appropriate subject 
                areas, including--
                          (i) ethics;
                          (ii) Federal law and regulation pertaining to 
                        mortgage origination; and
                          (iii) State law and regulation pertaining to 
                        mortgage origination.
          (3) Minimum competence.--
                  (A) Passing score.--An individual shall not be 
                considered to have passed a qualified written test 
                unless the individual achieves a test score of not less 
                than 75 percent correct answers to questions.
                  (B) Initial retests.--An individual may retake a test 
                3 consecutive times with each consecutive taking 
                occurring in less than 14 days after the preceding 
                test.
                  (C) Subsequent retests.--After 3 consecutive tests, 
                an individual shall wait at least 14 days before taking 
                the test again.
                  (D) Retest after lapse of license.--A State-licensed 
                loan originator who fails to maintain a valid license 
                for a period of 5 years or longer shall retake the 
                test, not taking into account any time during which 
                such individual is a registered loan originator.

SEC. 105. STANDARDS FOR STATE LICENSE RENEWAL.

  (a) In General.--The minimum standards for license renewal for State-
licensed loan originators shall include the following:
          (1) The loan originator continues to meet the minimum 
        standards for license issuance.
          (2) The loan originator has satisfied the annual continuing 
        education requirements described in subsection (b).
  (b) Continuing Education for State-Licensed Loan Originators.--
          (1) In general.--In order to meet the annual continuing 
        education requirements referred to in subsection (a)(2), a 
        State-licensed loan originator shall complete at least 8 hours 
        of education approved in accordance with paragraph (2), which 
        shall include at least 3 hours of Federal law and regulations 
        and 2 hours of ethics.
          (2) Approved educational courses.--For purposes of paragraph 
        (1), continuing education courses shall be reviewed, approved, 
        and published by the Nationwide Mortgage Licensing System and 
        Registry.
          (3) Calculation of continuing education credits.--A State-
        licensed loan originator--
                  (A) may only receive credit for a continuing 
                education course in the year in which the course is 
                taken; and
                  (B) may not take the same approved course in the same 
                or successive years to meet the annual requirements for 
                continuing education.
          (4) Instructor credit.--A State-licensed loan originator who 
        is approved as an instructor of an approved continuing 
        education course may receive credit for the originator's own 
        annual continuing education requirement at the rate of 2 hours 
        credit for every 1 hour taught.

SEC. 106. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL BANKING 
                    AGENCIES.

  (a) Development.--
          (1) In general.--The Federal banking agencies shall jointly 
        develop and maintain a system for registering employees of 
        depository institutions or subsidiaries of depository 
        institutions as registered loan originators with the Nationwide 
        Mortgage Licensing System and Registry. The system shall be 
        implemented before the end of the 1-year period beginning on 
        the date of the enactment of this Act.
          (2) Registration requirements.--In connection with the 
        registration of any loan originator who is an employee of a 
        depository institution or a subsidiary of a depository 
        institution with the Nationwide Mortgage Licensing System and 
        Registry, the appropriate Federal banking agency shall, at a 
        minimum, furnish or cause to be furnished to the Nationwide 
        Mortgage Licensing System and Registry information concerning 
        the employees's identity, including--
                  (A) fingerprints for submission to the Federal Bureau 
                of Investigation, and any governmental agency or entity 
                authorized to receive such information for a State and 
                national criminal history background check; and
                  (B) personal history and experience, including--
                          (i) an independent credit report obtained 
                        from a consumer reporting agency described in 
                        section 603(p) of the Fair Credit Reporting 
                        Act; and
                          (ii) information related to any 
                        administrative, civil or criminal findings by 
                        any governmental jurisdiction.
  (b) Unique Identifier.--The Federal banking agencies, through the 
Financial Institutions Examination Council, shall coordinate with the 
Nationwide Mortgage Licensing System and Registry to establish 
protocols for assigning a unique identifier to each registered loan 
originator that will facilitate electronic tracking and uniform 
identification of, and public access to, the employment history of and 
publicly adjudicated disciplinary and enforcement actions against loan 
originators.
  (c) Consideration of Factors and Procedures.--In establishing the 
registration procedures under subsection (a) and the protocols for 
assigning a unique identifier to a registered loan originator, the 
Federal banking agencies shall make such de minimis exceptions as may 
be appropriate to paragraphs (1)(A) and (2) of section 103(a), shall 
make reasonable efforts to utilize existing information to minimize the 
burden of registering loan originators, and shall consider methods for 
automating the process to the greatest extent practicable consistent 
with the purposes of this subtitle.

SEC. 107. SECRETARY OF HOUSING AND URBAN DEVELOPMENT BACKUP AUTHORITY 
                    TO ESTABLISH A LOAN ORIGINATOR LICENSING SYSTEM.

  (a) Back up Licensing System.--If, by the end of the 1-year period, 
or the 2-year period in the case of a State whose legislature meets 
only biennially, beginning on the date of the enactment of this Act or 
at any time thereafter, the Secretary determines that a State does not 
have in place by law or regulation a system for licensing and 
registering loan originators that meets the requirements of sections 
104 and 105 and subsection (d) or does not participate in the 
Nationwide Mortgage Licensing System and Registry, the Secretary shall 
provide for the establishment and maintenance of a system for the 
licensing and registration by the Secretary of loan originators 
operating in such State as State-licensed loan originators.
  (b) Licensing and Registration Requirements.--The system established 
by the Secretary under subsection (a) for any State shall meet the 
requirements of sections 104 and 105 for State-licensed loan 
originators.
  (c) Unique Identifier.--The Secretary shall coordinate with the 
Nationwide Mortgage Licensing System and Registry to establish 
protocols for assigning a unique identifier to each loan originator 
licensed by the Secretary as a State-licensed loan originator that will 
facilitate electronic tracking and uniform identification of, and 
public access to, the employment history of and the publicly 
adjudicated disciplinary and enforcement actions against loan 
originators.
  (d) State Licensing Law Requirements.--For purposes of this section, 
the law in effect in a State meets the requirements of this subsection 
if the Secretary determines the law satisfies the following minimum 
requirements:
          (1) A State loan originator supervisory authority is 
        maintained to provide effective supervision and enforcement of 
        such law, including the suspension, termination, or nonrenewal 
        of a license for a violation of State or Federal law.
          (2) The State loan originator supervisory authority ensures 
        that all State-licensed loan originators operating in the State 
        are registered with Nationwide Mortgage Licensing System and 
        Registry.
          (3) The State loan originator supervisory authority is 
        required to regularly report violations of such law, as well as 
        enforcement actions and other relevant information, to the 
        Nationwide Mortgage Licensing System and Registry.
  (e) Temporary Extension of Period.--The Secretary may extend, by not 
more than 6 months, the 1-year or 2-year period, as the case may be, 
referred to in subsection (a) for the licensing of loan originators in 
any State under a State licensing law that meets the requirements of 
sections 104 and 105 and subsection (d) if the Secretary determines 
that such State is making a good faith effort to establish a State 
licensing law that meets such requirements, license mortgage 
originators under such law, and register such originators with the 
Nationwide Mortgage Licensing System and Registry.
  (f) Limitation on HUD-Licensed Loan Originators.--Any loan originator 
who is licensed by the Secretary under a system established under this 
section for any State may not use such license to originate loans in 
any other State.

SEC. 108. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE MORTGAGE LICENSING 
                    AND REGISTRY SYSTEM.

  If at any time the Secretary determines that the Nationwide Mortgage 
Licensing System and Registry is failing to meet the requirements and 
purposes of this subtitle for a comprehensive licensing, supervisory, 
and tracking system for loan originators, the Secretary shall establish 
and maintain such a system to carry out the purposes of this subtitle 
and the effective registration and regulation of loan originators.

SEC. 109. FEES.

  The Federal banking agencies, the Secretary, and the Nationwide 
Mortgage Licensing System and Registry may charge reasonable fees to 
cover the costs of maintaining and providing access to information from 
the Nationwide Mortgage Licensing System and Registry to the extent 
such fees are not charged to consumers for access such system and 
registry.

SEC. 110. BACKGROUND CHECKS OF LOAN ORIGINATORS.

  (a) Access to Records.--Notwithstanding any other provision of law, 
in providing identification and processing functions, the Attorney 
General shall provide access to all criminal history information to the 
appropriate State officials responsible for regulating State-licensed 
loan originators to the extent criminal history background checks are 
required under the laws of the State for the licensing of such loan 
originators.
  (b) Agent.--For the purposes of this section and in order to reduce 
the points of contact which the Federal Bureau of Investigation may 
have to maintain for purposes of subsection (a), the Conference of 
State Bank Supervisors or a wholly owned subsidiary may be used as a 
channeling agent of the States for requesting and distributing 
information between the Department of Justice and the appropriate State 
agencies.

SEC. 111. CONFIDENTIALITY OF INFORMATION.

  (a) System Confidentiality.--Except as otherwise provided in this 
section, any requirement under Federal or State law regarding the 
privacy or confidentiality of any information or material provided to 
the Nationwide Mortgage Licensing System and Registry or a system 
established by the Secretary under section 108, and any privilege 
arising under Federal or State law (including the rules of any Federal 
or State court) with respect to such information or material, shall 
continue to apply to such information or material after the information 
or material has been disclosed to the system. Such information and 
material may be shared with all State and Federal regulatory officials 
with mortgage industry oversight authority without the loss of 
privilege or the loss of confidentiality protections provided by 
Federal and State laws.
  (b) Nonapplicability of Certain Requirements.--Information or 
material that is subject to a privilege or confidentiality under 
subsection (a) shall not be subject to--
          (1) disclosure under any Federal or State law governing the 
        disclosure to the public of information held by an officer or 
        an agency of the Federal Government or the respective State; or
          (2) subpoena or discovery, or admission into evidence, in any 
        private civil action or administrative process, unless with 
        respect to any privilege held by the Nationwide Mortgage 
        Licensing System and Registry or the Secretary with respect to 
        such information or material, the person to whom such 
        information or material pertains waives, in whole or in part, 
        in the discretion of such person, that privilege.
  (c) Coordination With Other Law.--Any State law, including any State 
open record law, relating to the disclosure of confidential supervisory 
information or any information or material described in subsection (a) 
that is inconsistent with subsection (a) shall be superseded by the 
requirements of such provision to the extent State law provides less 
confidentiality or a weaker privilege.
  (d) Public Access to Information.--This section shall not apply with 
respect to the information or material relating to the employment 
history of, and publicly adjudicated disciplinary and enforcement 
actions against, loan originators that is included in Nationwide 
Mortgage Licensing System and Registry for access by the public.

SEC. 112. LIABILITY PROVISIONS.

  The Secretary, any State official or agency, any Federal banking 
agency, or any organization serving as the administrator of the 
Nationwide Mortgage Licensing System and Registry or a system 
established by the Secretary under section 108, or any officer or 
employee of any such entity, shall not be subject to any civil action 
or proceeding for monetary damages by reason of the good-faith action 
or omission of any officer or employee of any such entity, while acting 
within the scope of office or employment, relating to the collection, 
furnishing, or dissemination of information concerning persons who are 
loan originators or are applying for licensing or registration as loan 
originators.

SEC. 113. ENFORCEMENT UNDER HUD BACKUP LICENSING SYSTEM.

  (a) Summons Authority.--The Secretary may--
          (1) examine any books, papers, records, or other data of any 
        loan originator operating in any State which is subject to a 
        licensing system established by the Secretary under section 
        107; and
          (2) summon any loan originator referred to in paragraph (1) 
        or any person having possession, custody, or care of the 
        reports and records relating to such loan originator, to appear 
        before the Secretary or any delegate of the Secretary at a time 
        and place named in the summons and to produce such books, 
        papers, records, or other data, and to give testimony, under 
        oath, as may be relevant or material to an investigation of 
        such loan originator for compliance with the requirements of 
        this subtitle.
  (b) Examination Authority.--
          (1) In general.--If the Secretary establishes a licensing 
        system under section 107 for any State, the Secretary shall 
        appoint examiners for the purposes of administering such 
        section.
          (2) Power to examine.--Any examiner appointed under paragraph 
        (1) shall have power, on behalf of the Secretary, to make any 
        examination of any loan originator operating in any State which 
        is subject to a licensing system established by the Secretary 
        under section 107 whenever the Secretary determines an 
        examination of any loan originator is necessary to determine 
        the compliance by the originator with this subtitle.
          (3) Report of examination.--Each examiner appointed under 
        paragraph (1) shall make a full and detailed report of 
        examination of any loan originator examined to the Secretary.
          (4) Administration of oaths and affirmations; evidence.--In 
        connection with examinations of loan originators operating in 
        any State which is subject to a licensing system established by 
        the Secretary under section 107, or with other types of 
        investigations to determine compliance with applicable law and 
        regulations, the Secretary and examiners appointed by the 
        Secretary may administer oaths and affirmations and examine and 
        take and preserve testimony under oath as to any matter in 
        respect to the affairs of any such loan originator.
          (5) Assessments.--The cost of conducting any examination of 
        any loan originator operating in any State which is subject to 
        a licensing system established by the Secretary under section 
        107 shall be assessed by the Secretary against the loan 
        originator to meet the Secretary's expenses in carrying out 
        such examination.
  (c) Cease and Desist Proceeding.--
          (1) Authority of secretary.--If the Secretary finds, after 
        notice and opportunity for hearing, that any person is 
        violating, has violated, or is about to violate any provision 
        of this subtitle, or any regulation thereunder, with respect to 
        a State which is subject to a licensing system established by 
        the Secretary under section 107, the Secretary may publish such 
        findings and enter an order requiring such person, and any 
        other person that is, was, or would be a cause of the 
        violation, due to an act or omission the person knew or should 
        have known would contribute to such violation, to cease and 
        desist from committing or causing such violation and any future 
        violation of the same provision, rule, or regulation. Such 
        order may, in addition to requiring a person to cease and 
        desist from committing or causing a violation, require such 
        person to comply, or to take steps to effect compliance, with 
        such provision or regulation, upon such terms and conditions 
        and within such time as the Secretary may specify in such 
        order. Any such order may, as the Secretary deems appropriate, 
        require future compliance or steps to effect future compliance, 
        either permanently or for such period of time as the Secretary 
        may specify, with such provision or regulation with respect to 
        any loan originator.
          (2) Hearing.--The notice instituting proceedings pursuant to 
        paragraph (1) shall fix a hearing date not earlier than 30 days 
        nor later than 60 days after service of the notice unless an 
        earlier or a later date is set by the Secretary with the 
        consent of any respondent so served.
          (3) Temporary order.--Whenever the Secretary determines that 
        the alleged violation or threatened violation specified in the 
        notice instituting proceedings pursuant to paragraph (1), or 
        the continuation thereof, is likely to result in significant 
        dissipation or conversion of assets, significant harm to 
        consumers, or substantial harm to the public interest prior to 
        the completion of the proceedings, the Secretary may enter a 
        temporary order requiring the respondent to cease and desist 
        from the violation or threatened violation and to take such 
        action to prevent the violation or threatened violation and to 
        prevent dissipation or conversion of assets, significant harm 
        to consumers, or substantial harm to the public interest as the 
        Secretary deems appropriate pending completion of such 
        proceedings. Such an order shall be entered only after notice 
        and opportunity for a hearing, unless the Secretary determines 
        that notice and hearing prior to entry would be impracticable 
        or contrary to the public interest. A temporary order shall 
        become effective upon service upon the respondent and, unless 
        set aside, limited, or suspended by the Secretary or a court of 
        competent jurisdiction, shall remain effective and enforceable 
        pending the completion of the proceedings.
          (4) Review of temporary orders.--
                  (A) Review by secretary.--At any time after the 
                respondent has been served with a temporary cease-and-
                desist order pursuant to paragraph (3), the respondent 
                may apply to the Secretary to have the order set aside, 
                limited, or suspended. If the respondent has been 
                served with a temporary cease-and-desist order entered 
                without a prior hearing before the Secretary, the 
                respondent may, within 10 days after the date on which 
                the order was served, request a hearing on such 
                application and the Secretary shall hold a hearing and 
                render a decision on such application at the earliest 
                possible time.
                  (B) Judicial review.--Within--
                          (i) 10 days after the date the respondent was 
                        served with a temporary cease-and-desist order 
                        entered with a prior hearing before the 
                        Secretary; or
                          (ii) 10 days after the Secretary renders a 
                        decision on an application and hearing under 
                        paragraph (1), with respect to any temporary 
                        cease-and-desist order entered without a prior 
                        hearing before the Secretary,
                the respondent may apply to the United States district 
                court for the district in which the respondent resides 
                or has its principal place of business, or for the 
                District of Columbia, for an order setting aside, 
                limiting, or suspending the effectiveness or 
                enforcement of the order, and the court shall have 
                jurisdiction to enter such an order. A respondent 
                served with a temporary cease-and-desist order entered 
                without a prior hearing before the Secretary may not 
                apply to the court except after hearing and decision by 
                the Secretary on the respondent's application under 
                subparagraph (A).
                  (C) No automatic stay of temporary order.--The 
                commencement of proceedings under subparagraph (B) 
                shall not, unless specifically ordered by the court, 
                operate as a stay of the Secretary's order.
          (5) Authority of the secretary to prohibit persons from 
        serving as loan originators.--In any cease-and-desist 
        proceeding under paragraph (1), the Secretary may issue an 
        order to prohibit, conditionally or unconditionally, and 
        permanently or for such period of time as the Secretary shall 
        determine, any person who has violated this subtitle or 
        regulations thereunder, from acting as a loan originator if the 
        conduct of that person demonstrates unfitness to serve as a 
        loan originator.
  (d) Authority of the Secretary to Assess Money Penalties.--
          (1) In general.--The Secretary may impose a civil penalty on 
        a loan originator operating in any State which is subject to 
        licensing system established by the Secretary under section 107 
        if the Secretary finds, on the record after notice and 
        opportunity for hearing, that such loan originator has violated 
        or failed to comply with any requirement of this subtitle or 
        any regulation prescribed by the Secretary under this subtitle 
        or order issued under subsection (c).
          (2) Maximum amount of penalty.--The maximum amount of penalty 
        for each act or omission described in paragraph (1) shall be 
        $5,000 for each day the violation continues.

      Subtitle B--Residential Mortgage Loan Origination Standards

SEC. 121. 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--
                          ``(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, for direct or 
                        indirect compensation or gain, or in the 
                        expectation of direct or indirect compensation 
                        or gain;
                  ``(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); and
                  ``(C) does not include any person who is not 
                otherwise described in subparagraph (A) or (B) and who 
                performs purely administrative or clerical tasks on 
                behalf of a person who is described in any such 
                subparagraph.
          ``(4) Nationwide mortgage licensing system and registry.--The 
        term `Nationwide Mortgage Licensing System and Registry' has 
        the same meaning as in section 102(5) of the Mortgage Reform 
        and Anti-Predatory Lending Act of 2007.
          ``(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.
          ``(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, or special purpose entity 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.''.

SEC. 122. 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 129 the following 
new section:

``Sec. 129A. Residential mortgage loan origination

  ``(a) 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, registered, and, when required, 
                licensed as a mortgage originator in accordance with 
                applicable State or Federal law including subtitle A of 
                title I of the Mortgage Reform and Anti-Predatory 
                Lending Act of 2007;
                  ``(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;
                  ``(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 the unique identifier of the originator 
                provided by the Nationwide Mortgage Licensing System 
                and Registry on all loan documents.
          ``(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 receives a net tangible 
                        benefit (as determined in accordance with 
                        regulations prescribed under section 129B(a)); 
                        and
                          ``(ii) the loan does not have predatory 
                        characteristics or effects (such as equity 
                        stripping and excessive fees and abusive terms) 
                        as determined in accordance with regulations 
                        prescribed under paragraph (4).
          ``(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 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 106 of the Mortgage Reform and Anti-
        Predatory Lending Act of 2007.''.
  (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 item:

``129A. Residential mortgage loan origination.''.

SEC. 123. ANTI-STEERING.

  Section 129A of the Truth in Lending Act (as added by section 122(a)) 
is amended by inserting after subsection (a) the following new 
subsection:
  ``(b) Prohibition on Steering Incentives.--
          ``(1) In general.--No mortgage originator may receive from 
        any person, and no person may pay to any mortgage originator, 
        directly or indirectly, any incentive compensation (including 
        yield spread premium) that is based on, or varies with, the 
        terms (other than the amount of principal) of any loan that is 
        not a qualified mortgage (as defined in section 129B(c)(3)).
          ``(2) Anti-steering 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;
                          ``(ii) does not provide the consumer with a 
                        net tangible benefit; 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 129B(c)(3)) to a residential mortgage loan 
                that is not a qualified mortgage; and
                  ``(C) abusive or unfair lending practices that 
                promote disparities among consumers of equal credit 
                worthiness but of different race, ethnicity, gender, or 
                age.
          ``(3) Rules of construction.--No provision of this subsection 
        shall be construed as--
                  ``(A) limiting or affecting the ability of a mortgage 
                originator to sell residential mortgage loans to 
                subsequent purchasers;
                  ``(B) restricting a consumer's ability to finance 
                origination fees to the extent that such fees were 
                fully disclosed to the consumer earlier in the 
                application process and do not vary based on the terms 
                of the loan or the consumer's decision about whether to 
                finance such fees; or
                  ``(C) prohibiting incentive payments to a mortgage 
                originator based on the number of residential mortgage 
                loans originated within a specified period of time.''.

SEC. 124. LIABILITY.

  Section 129A of the Truth in Lending Act is amended by inserting 
after subsection (b) (as added by section 123) the following new 
subsection:
  ``(c) 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 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. 125. REGULATIONS.

  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

               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 129A (as added by 
section 122(a)) the following new section:

``Sec. 129B. 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 be based on consideration of the consumer's 
        credit history, current income, expected income the consumer is 
        reasonably assured of receiving, current obligations, debt-to-
        income ratio, employment status, and other financial resources 
        other than the consumer's equity in the dwelling or real 
        property that secures repayment of the loan.
          ``(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 take into 
                consideration 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 take into consideration 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 129A (as added by section 122(b)) the following new item:

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

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

  Section 129B 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 129B 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 
        or a qualified safe harbor mortgage.
          ``(2) Rebuttable presumption.--Any presumption established 
        under paragraph (1) with respect to any residential mortgage 
        loan shall be rebuttable only--
                  ``(A) against the creditor of such loan; and
                  ``(B) if such loan is a qualified safe harbor 
                mortgage.
          ``(3) Definitions.--For purposes of this section the 
        following definitions shall apply:
                  ``(A) Most recent conventional mortgage rate.--The 
                term `most recent conventional mortgage rate' means the 
                contract interest rate on commitments for fixed-rate 
                first mortgages most recently published in the Federal 
                Reserve Statistical Release on selected interest rates 
                (daily or weekly), and commonly referred to as the H.15 
                release (or any successor publication), in the week 
                preceding a date of determination for purposes of 
                applying this subsection.
                  ``(B) Qualified mortgage.--The term `qualified 
                mortgage' means--
                          ``(i) any residential mortgage loan that 
                        constitutes a first lien on the dwelling or 
                        real property securing the loan and either--
                                  ``(I) has an annual percentage rate 
                                that does not equal or exceed the yield 
                                on securities issued by the Secretary 
                                of the Treasury under chapter 31 of 
                                title 31, United States Code, that bear 
                                comparable periods of maturity by more 
                                than 3 percentage points; or
                                  ``(II) has an annual percentage rate 
                                that does not equal or exceed the most 
                                recent conventional mortgage rate, or 
                                such other annual percentage rate as 
                                may be established by regulation under 
                                paragraph (6), by more than 175 basis 
                                points;
                          ``(ii) any residential mortgage loan that is 
                        not the first lien on the dwelling or real 
                        property securing the loan and either--
                                  ``(I) has an annual percentage rate 
                                that does not equal or exceed the yield 
                                on securities issued by the Secretary 
                                of the Treasury under chapter 31 of 
                                title 31, United States Code, that bear 
                                comparable periods of maturity by more 
                                than 5 percentage points; or
                                  ``(II) has an annual percentage rate 
                                that does not equal or exceed the most 
                                recent conventional mortgage rate, or 
                                such other annual percentage rate as 
                                may be established by regulation under 
                                paragraph (6), by more than 375 basis 
                                points; and
                          ``(iii) a loan made or guaranteed by the 
                        Secretary of Veterans Affairs.
                  ``(C) Qualified safe harbor mortgage.--The term 
                `qualified safe harbor mortgage' means any residential 
                mortgage loan--
                          ``(i) for which the income and financial 
                        resources of the consumer are verified and 
                        documented;
                          ``(ii) for which the residential mortgage 
                        loan underwriting process is based on the 
                        fully-indexed rate, and takes into account all 
                        applicable taxes, insurance, and assessments;
                          ``(iii) which does not provide for a 
                        repayment schedule that results in negative 
                        amortization at any time;
                          ``(iv) meets such other requirements as may 
                        be established by regulation; and
                          ``(v) for which any of the following factors 
                        apply with respect to such loan:
                                  ``(I) The periodic payment amount for 
                                principal and interest are fixed for a 
                                minimum of 5 years under the terms of 
                                the loan.
                                  ``(II) In the case of a variable rate 
                                loan, the annual percentage rate varies 
                                based on a margin that is less than 3 
                                percent over a single generally 
                                accepted interest rate index that is 
                                the basis for determining the rate of 
                                interest for the mortgage.
                                  ``(III) The loan does not cause the 
                                consumer's total monthly debts, 
                                including amounts under the loan, to 
                                exceed a percentage established by 
                                regulation of his or her monthly gross 
                                income or such other maximum percentage 
                                of such income as may be prescribed by 
                                regulation under paragraph (6).
          ``(4) Determination of comparison to treasury securities.--
                  ``(A) In general.--Without regard to whether a 
                residential mortgage loan is subject to or reportable 
                under the Home Mortgage Disclosure Act of 1975 and 
                subject to subparagraph (B), the difference between the 
                annual percentage rate of such loan and the yield on 
                securities issued by the Secretary of the Treasury 
                under chapter 31 of title 31, United States Code, 
                having comparable periods of maturity shall be 
                determined using the same procedures and methods of 
                calculation applicable to loans that are subject to the 
                reporting requirements under the Home Mortgage 
                Disclosure Act of 1975.
                  ``(B) Date of determination of yield.--The yield on 
                the securities referred to in subparagraph (A) shall be 
                determined, for purposes of such subparagraph and 
                paragraph (3) with respect to any residential mortgage 
                loan, as of the 15th day of the month preceding the 
                month in which a completed application is submitted for 
                such loan.
          ``(5) APR in case of introductory offer.--For purposes of 
        making a determination of whether a residential mortgage loan 
        that provides for a fixed interest rate for an introductory 
        period and then resets or adjusts to a variable rate is a 
        qualified mortgage, the determination of the annual percentage 
        rate, as determined in accordance with regulations prescribed 
        by the Board under section 107, shall be based on the greater 
        of the introductory rate and the fully indexed rate of 
        interest.
          ``(6) 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.--The Federal 
                banking agencies may jointly prescribe regulations that 
                revise, add to, or subtract from the criteria that 
                define a qualified mortgage and a qualified safe harbor 
                mortgage to the extent necessary and appropriate to 
                effectuate the purposes of this subsection, to prevent 
                circumvention or evasion of this subsection, or to 
                facilitate compliance with this subsection.
          ``(7) Rule of construction.--No provision of this subsection 
        may be construed as implying that a residential mortgage loan 
        may be presumed to violate subsection (a) or (b) if such loan 
        is not a qualified mortgage or a qualified safe harbor 
        mortgage.''.

SEC. 204. LIABILITY.

  Section 129B 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 
                (7), a civil action may be maintained against a 
                creditor for a violation of subsection (a) or (b) with 
                respect to a residential mortgage loan for the 
                rescission of the loan, and such additional costs as 
                the obligor may have incurred as a result of the 
                violation and in connection with obtaining a rescission 
                of the loan, including a reasonable attorney's fee.
                  ``(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 shall be liable 
        under paragraph (2) with respect to such loan if--
                  ``(A) 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); or
                  ``(B) each of the following conditions are met:
                          ``(i) The assignee or securitizer--
                                  ``(I) has a policy against buying 
                                residential mortgage loans other than 
                                qualified mortgages or qualified safe 
                                harbor mortgages (as defined in 
                                subsection (c));
                                  ``(II) the policy is intended to 
                                verify seller or assignor compliance 
                                with the representations and warranties 
                                required under clause (ii); and
                                  ``(III) in accordance with 
                                regulations which the Federal banking 
                                agencies and the Securities and 
                                Exchange Commission shall jointly 
                                prescribe, exercises reasonable due 
                                diligence to adhere to such policy in 
                                purchasing residential mortgage loans, 
                                including through adequate, thorough, 
                                and consistently applied sampling 
                                procedures.
                          ``(ii) The contract under which such assignee 
                        or securitizer acquired the residential 
                        mortgage loan from a seller or assignor of the 
                        loan contains representations and warranties 
                        that the seller or assignor--
                                  ``(I) is not selling or assigning any 
                                residential mortgage loan which is not 
                                a qualified mortgage or a qualified 
                                safe harbor mortgage; or
                                  ``(II) is a beneficiary of a 
                                representation and warranty from a 
                                previous seller or assignor to that 
                                effect,
                        and the assignee or securitizer in good faith 
                        takes reasonable steps to obtain the benefit of 
                        such representation or warranty.
          ``(4) 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 would have satisfied the requirements of subsection 
        (a) and (b) if the loan had contained such terms as of the 
        origination of the loan.
          ``(5) 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).
          ``(6) Inability to provide rescission.--If a creditor, 
        assignee, or securitizer cannot provide 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.
          ``(7) 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).
          ``(8) 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.
          ``(9) 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.''.

SEC. 205. DEFENSE TO FORECLOSURE.

  Section 129B of the Truth in Lending Act is amended by inserting 
after subsection (d) (as added by section 204) the following new 
subsection:
  ``(e) 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), 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 129B of the Truth in Lending Act is amended 
by inserting after subsection (e) (as added by section 205) the 
following new subsections:
  ``(f) Prohibition on Certain Prepayment Penalties.--
          ``(1) Prohibited on certain loans.--A residential mortgage 
        loan that is not 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.
          ``(2) 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.
  ``(g) 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 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.
  ``(h) 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.
  ``(i) Duty of Securitizer to Retain Access to Loans.--Any securitizer 
shall reserve the right and preserve an ability, in any document or 
contract establishing any pool of assets that includes any residential 
mortgage loan--
          ``(1) to identify and obtain access to any such loan in the 
        pool; and
          ``(2) to provide for and obtain a remedy under this title for 
        the obligor under any such loan.
  ``(j) Effect of Foreclosure on Preexisting Lease.--
          ``(1) In general.--In the case of any foreclosure on any 
        dwelling or residential real property securing an extension of 
        credit made under a contract entered into after the date of the 
        enactment of the Mortgage Reform and Anti-Predatory Lending Act 
        of 2007, any successor in interest in such property pursuant to 
        the foreclosure shall assume such interest subject to--
                  ``(A) any bona fide lease made to a bona fide tenant 
                entered into before the notice of foreclosure; and
                  ``(B) the rights of any bona fide tenant without a 
                lease or with a lease terminable at will under State 
                law and the provision, by the successor in interest, of 
                a notice to vacate to the tenant at least 90 days 
                before the effective date of the notice.
          ``(2) Bona fide lease or tenancy.--For purposes of this 
        section, a lease or tenancy shall be considered bona fide only 
        if--
                  ``(A) the lease or tenancy was the result of an arms-
                length transaction; or
                  ``(B) the lease or tenancy requires the tenant to pay 
                rent that is not substantially less than fair market 
                rent for the property.
  ``(k) Mortgages With Negative Amortization.--No creditor may extend 
credit to a first-time 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) the consumer 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.
  ``(l) Annual Contact Information.--At least once annually and 
whenever there is a change in ownership of a residential mortgage loan, 
the servicer with respect to a residential mortgage loan shall provide 
a written notice to the consumer identifying the name of the creditor 
or any assignee or securitizer who should be contacted by the consumer 
for any reason concerning the consumer's rights with respect to the 
loan.''.
  (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 129A or 129B of the 
Truth in Lending Act (as added by this Act), no provision of such 
section 129A or 129B 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.--Section 129B(d) of the Truth in Lending Act (as 
added by section 204) shall supersede any State law that provides 
additional remedies against any assignee, securitizer, or 
securitization vehicle, and the remedies described in such section 
shall constitute the sole remedies against any assignee, securitizer, 
or securitization vehicle, for a violation of subsection (a) or (b) of 
section 129B of such Act (relating to ability to repay or net tangible 
benefit) or any other State law arising out of or relating to the 
specific subject matter of subsection (a) or (b) of such section 129B.
  (b) Rule of Construction.--No provision of this section shall be 
construed as limiting the application of any State law against a 
creditor. Nor shall any provision of this section be construed as 
limiting the application of any State law against any assignee, 
securitizer, or securitization vehicle that does not arise out of or 
relate to, or provide additional remedies in connection with, the 
specific subject matter of subsection (a) or (b) of section 129B of the 
Truth in Lending Act.

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''
          (3) by striking ``$200'' and inserting ``$400'';
          (4) by striking ``$2,000'' and inserting ``$4,000''; and
          (5) 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. 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 an extension of credit that is secured 
        by the dwelling of a consumer, under which the annual rate of 
        interest is variable, or with respect to which the regular 
        payments may otherwise be variable, in addition to the other 
        disclosures required under this subsection, the disclosures 
        provided under this subsection shall state the maximum amount 
        of the regular required payments on the loan, based on the 
        maximum interest rate allowed, introduced with the following 
        language in conspicuous type size and format: `Your payment can 
        go as high as $__', the blank to be filled in with the maximum 
        possible payment amount.
          ``(17) In the case of a residential mortgage loan for which 
        an escrow or impound account will be established for the 
        payment of all applicable taxes, insurance, and assessments, 
        the following statement: `Your payments will be increased to 
        cover taxes and insurance. In the first year, you will pay an 
        additional $__ [insert the amount of the monthly payment to the 
        account] every month to cover the costs of taxes and 
        insurance.'.
          ``(18) 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.
          ``(19) 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.
          ``(20) In the case of a residential mortgage loan, the 
        aggregate amount of fees paid to the mortgage originator in 
        connection with the loan, the amount of such fees paid directly 
        by the consumer, and any additional amount received by the 
        originator from the creditor based on the interest rate of the 
        loan.''.
  (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-day period beginning on the 
                date the application for the loan from a consumer is 
                received by the creditor.''.
  (c) Enhanced Mortgage Loan Disclosures.--Section 128(b)(2) of the 
Truth in Lending Act (15 U.S.C. 1638(b)(2)) is amended--
          (1) by striking ``(2) In the'' and inserting the following:
          ``(2) Mortgage disclosures.--
                  ``(A) In general.--In the'';
          (2) by striking ``a residential mortgage transaction, as 
        defined in section 103(w)'' and inserting ``any extension of 
        credit that is secured by the dwelling of a consumer'';
          (3) by striking ``shall be made in accordance'' and all that 
        follows through ``extended, or'';
          (4) by striking ``If the'' and all that follows through the 
        end of the paragraph and inserting the following new 
        subparagraphs:
                  ``(B) Statement and timing of disclosures.--In the 
                case of an extension of credit that is secured by the 
                dwelling of a consumer, in addition to the other 
                disclosures required by subsection (a), the disclosures 
                provided under this paragraph shall state in 
                conspicuous type size and format, the following: `You 
                are not required to complete this agreement merely 
                because you have received these disclosures or signed a 
                loan application.'.
                          ``(i) state in conspicuous type size and 
                        format, the following: `You are not required to 
                        complete this agreement merely because you have 
                        received these disclosures or signed a loan 
                        application.'; and
                          ``(ii) be furnished to the borrower not later 
                        than 7 business days before the date of 
                        consummation of the transaction, subject to 
                        subparagraph (D).
                  ``(C) Variable rates or payment schedules.--In the 
                case of an extension of credit that is secured by the 
                dwelling of a consumer, under which the annual rate of 
                interest is variable, or with respect to which the 
                regular payments may otherwise be variable, in addition 
                to the other disclosures required by subsection (a), 
                the disclosures provided under this paragraph shall 
                label the payment schedule as follows: `Payment 
                Schedule: Payments Will Vary Based on Interest Rate 
                Changes.'.
                  ``(D) Updating apr.--In any case in which the 
                disclosure statement provided 7 business days before 
                the date of consummation of the transaction contains an 
                annual percentage rate of interest that is no longer 
                accurate, as determined under section 107(c), the 
                creditor shall furnish an additional, corrected 
                statement to the borrower, not later than 3 business 
                days before the date of consummation of the 
                transaction.''.

SEC. 212. AUTHORIZATION OF APPROPRIATIONS.

  For fiscal years 2008, 2009, 2010, 2011, and 2012, there are 
authorized to be appropriated to the Attorney General a total of--
          (1) $31,250,000 to support the employment of 30 additional 
        agents of the Federal Bureau of Investigation and 2 additional 
        dedicated prosecutors at the Department of Justice to 
        coordinate prosecution of mortgage fraud efforts with the 
        offices of the United States Attorneys; and
          (2) $750,000 to support the operations of interagency task 
        forces of the Federal Bureau of Investigation in the areas with 
        the 15 highest concentrations of mortgage fraud.

SEC. 213. 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.

                     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 8 percentage points the yield on 
                                Treasury securities having comparable 
                                periods of maturity on the 15th day of 
                                the month immediately preceding the 
                                month in which the application for the 
                                extension of credit is received by the 
                                creditor; or
                                  ``(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 10 percentage 
                                points the yield on Treasury securities 
                                having comparable periods of maturity 
                                on the 15th day of the month 
                                immediately preceding the month in 
                                which the application for the extension 
                                of credit is received by the creditor;
                          ``(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 (8 
                                percent if the dwelling is personal 
                                property) 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
                          ``(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) High Cost Mortgage Lender.--Section 103(f) of the Truth in 
Lending Act (15 U.S.C. 1602(f)) is amended by striking the last 
sentence and inserting the following new sentence: ``Any person who 
originates or brokers 2 or more mortgages referred to in subsection 
(aa) in any 12-month period, any person who originates 1 or more such 
mortgages through a mortgage broker in any 12 month period, or, in 
connection with a table funding transaction of such a mortgage, any 
person to whom the obligation is initially assigned at or after 
settlement shall be considered to be a creditor for purposes of this 
title.''.
  (e) 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 121) 
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 paragraphs (1) or (4) 
of the following paragraphs, but not both, may be excluded:
          ``(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 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.
                  ``(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 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.
          ``(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.
          ``(4) Allowance of conventional prepayment penalty.--
        Subsection (aa)(1)(4)(E) shall not apply so as to include a 
        prepayment penalty or fee that is authorized by law other than 
        this title and may be imposed pursuant to the terms of a high-
        cost mortgage (or other consumer credit transaction secured by 
        the consumer's principal dwelling) if--
                  ``(A) the annual percentage rate applicable with 
                respect to such mortgage or transaction (as determined 
                for purposes of subsection (aa)(1)(A)(i))--
                          ``(i) in the case of a first mortgage on the 
                        consumer's principal dwelling, does not exceed 
                        by more than 2 percentage points the yield on 
                        Treasury securities having comparable periods 
                        of maturity on the 15th day of the month 
                        immediately preceding the month in which the 
                        application for the extension of credit is 
                        received by the creditor; or
                          ``(ii) in the case of a subordinate or junior 
                        mortgage on the consumer's principal dwelling, 
                        does not exceed by more than 4 percentage 
                        points the yield on such Treasury securities; 
                        and
                  ``(B) the total amount of any prepayment fees or 
                penalties permitted under the terms of the high-cost 
                mortgage or transaction does not exceed 2 percent of 
                the amount prepaid.''.

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 amended--
          (1) by striking ``and'' after the semicolon at the end of 
        subparagraph (C);
          (2) by redesignating subparagraph (D) as subparagraph (E); 
        and
          (3) by inserting after subparagraph (C) the following new 
        subparagraph:
                  ``(D) the amount of the principal obligation of the 
                mortgage exceeds the maximum principal obligation 
                limitation (for the applicable size residence) under 
                section 203(b)(2) of the National Housing Act for the 
                area in which the residence subject to the mortgage is 
                located; and''.
  (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.''.
  (c) No Lending Without Due Regard to Ability To Repay.--Section 
129(h) of the Truth in Lending Act (15 U.S.C. 1639(h)) is amended--
          (1) by striking ``Payment Ability of Consumer.--A creditor 
        shall not'' and inserting ``Payment Ability of Consumer.--
          ``(1) Pattern or practice.--
                  ``(A) In general.--A creditor shall not'';
          (2) by inserting after subparagraph (A) (as so designated by 
        paragraph (1) of this subsection) the following new 
        subparagraph:
                  ``(B) Presumption of violation.--There shall be a 
                presumption that a creditor has violated this 
                subsection if the creditor engages in a pattern or 
                practice of making high-cost mortgages without 
                verifying or documenting the repayment ability of 
                consumers with respect to such mortgages.''; and
          (3) by adding at the end the following new paragraph:
          ``(2) Prohibition on extending credit without regard to 
        payment ability of consumer.--
                  ``(A) In general.--A creditor may not extend credit 
                to a consumer under a high-cost mortgage unless a 
                reasonable creditor would believe at the time the 
                mortgage is closed that the consumer or consumers that 
                are residing or will reside in the residence subject to 
                the mortgage will be able to make the scheduled 
                payments associated with the mortgage, based upon a 
                consideration of current and expected income, current 
                obligations, employment status, and other financial 
                resources, other than equity in the residence.
                  ``(B) Presumption of ability.--For purposes of this 
                subsection, there shall be a rebuttable presumption 
                that a consumer is able to make the scheduled payments 
                to repay the obligation if, at the time the high-cost 
                mortgage is consummated, the consumer's total monthly 
                debts, including amounts under the mortgage, do not 
                exceed 50 percent of his or her monthly gross income as 
                verified by tax returns, payroll receipts, or other 
                third-party income verification.''.

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.''.
  (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 Secretary of Housing and Urban 
        Development may prescribe such regulations as the Secretary 
        determines to be appropriate to carry out the requirements of 
        paragraph (1).''.
  (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:
  ``(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, tangible net benefit 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.
          ``(3) Tangible net benefit.--The Board may prescribe 
        regulations, in the discretion of the Board, defining the term 
        `tangible net benefit' for purposes of this subsection.''.

SEC. 304. AMENDMENT TO PROVISION GOVERNING CORRECTION OF ERRORS.

  Section 130(b) of the Truth in Lending Act (15 U.S.C. 1640(b)) is 
amended to read as follows:
  ``(b) Correction of Errors.--A creditor has no liability under this 
section or section 108 or 112 for any failure to comply with any 
requirement imposed under this chapter or chapter 5, if--
          ``(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. 305. 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. 306. EFFECTIVE DATE.

  The amendments made by this title shall take effect on the date of 
the enactment of this Act and shall apply to mortgages referred to in 
section 103(aa) of the Truth in Lending Act (15 U.S.C. 1602(aa) 
consummated on or after that date.

                 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 Office of 
        the Secretary, 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 
        the Secretary. Such position shall be a career-reserved 
        position in the Senior Executive Service.
          ``(3) Functions.--
                  ``(A) In general.--The Director shall have ultimate 
                responsibility within the Department, except for the 
                Secretary, for all activities and matters relating to 
                homeownership counseling and rental housing counseling, 
                including--
                          ``(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) carrying out section 5 of the Real 
                        Estate Settlement Procedures Act of 1974 (12 
                        U.S.C. 2604) for home buying information 
                        booklets prepared pursuant to such section;
                          ``(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 all aspects of 
                the mortgage and real estate industry, including 
                consumers.
                  ``(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));
                                  ``(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 conjunction 
        with the advisory committee established under subsection (g)(4) 
        of the Department of Housing and Urban Development Act, shall 
        establish standards for materials and forms to be used, as 
        appropriate, by organizations providing homeownership 
        counseling services, including any recipients of assistance 
        pursuant to subsection (a)(4).
          ``(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;
                          ``(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.
          ``(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, 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 web site 
                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 2008, 2009, and 
                2010, for the develop, implement, and conduct of 
                national public service multimedia campaigns under this 
                paragraph.
          ``(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, 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).''.

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 States, units of 
        general local governments, and nonprofit organizations 
        providing homeownership or rental counseling (as such terms are 
        defined in subsection (g)(1)).
          ``(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.
          ``(C) Distribution.--Assistance made available under this 
        paragraph shall be distributed in a manner that encourages 
        efficient and successful counseling programs.
          ``(D) Authorization of appropriations.--There are authorized 
        to be appropriated $45,000,000 for each of fiscal years 2008 
        through 2011 for--
                  ``(i) the operations of the Office of Housing 
                Counseling of the Department of Housing and Urban 
                Development;
                  ``(ii) the responsibilities of the Secretary 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.''.

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 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.''.

 TITLE V--MORTGAGE DISCLOSURES UNDER REAL ESTATE SETTLEMENT PROCEDURES 
                              ACT OF 1974

SEC. 501. UNIVERSAL MORTGAGE DISCLOSURE IN GOOD FAITH ESTIMATE OF 
                    SETTLEMENT SERVICES COSTS.

  (a) In General.--Section 5 of the Real Estate Settlement Procedures 
Act of 1974 (12 U.S.C. 2604) is amended--
          (1) in subsection (c), by adding after the period at the end 
        the following: ``Each such good faith estimate shall include 
        the disclosure required under subsection (f) in the form 
        prescribed by the Secretary pursuant to such subsection, except 
        that if the Secretary at any time issues any regulations 
        requiring the use of a standard or uniform form or statement in 
        providing the good faith estimate required under this 
        subsection and prescribing such standard or uniform form or 
        statement, such disclosure shall not be required after the 
        effective date of such regulations.''; and
          (2) by adding at the end the following new subsection:
  ``(f) Universal Mortgage Disclosure Requirement for Good Faith 
Estimates.--
          ``(1) Disclosure.--The disclosure required under this 
        subsection is a written statement regarding the federally 
        related mortgage loan for which the good faith estimate under 
        subsection (c) is made, that consists of the following 
        statements, appropriately and in good faith completed by the 
        lender in accordance with the terms of the federally related 
        mortgage loan involved in the settlement:
                  ``(A) `Your Loan Amount will be' and `$____', each 
                statement appearing in a separate column of the 
                disclosure.
                  ``(B) `Your Loan is', `A Fixed Rate Loan', and `An 
                Adjustable Rate Loan', each statement appearing in a 
                separate column and each of the last two such 
                statements preceded by a checkbox.
                  ``(C) `Your Loan Term is', `___ years', and `___ 
                years', each statement appearing in a separate column, 
                and the second such statement shall appear in the same 
                column as the statement required by subparagraph (B) 
                regarding fixed rate loans and the third such statement 
                shall appear in the same column as the statement 
                required by subparagraph (B) regarding adjustable rate 
                loans;
                  ``(D) `Your Estimated Interest Rate (APR) is', 
                `___%', and `___% initially, then it will adjust. In 
                ___ months, Your rate may adjust to a maximum of ___%', 
                each statement appearing in a separate column, the 
                second such statement shall appear in the same column 
                as the statement required by subparagraph (B) regarding 
                fixed rate loans and the third such statement shall 
                appear in the same column as the statement required by 
                subparagraph (B) regarding adjustable rate loans, and 
                the blanks relating to estimated interest rate shall be 
                completed by the lender using an annual percentage rate 
                determined in accordance with the Truth in Lending Act.
                  ``(E) `Your Total Estimated Monthly Payment 
                (Including loan Principal and Interest, and property 
                Taxes (based on current rates) and Insurance (PITI)) 
                is', `$____ which represents ___% of Your estimated 
                monthly income', and `$____ which represents ___% of 
                Your estimated monthly income. When Your interest rate 
                initially adjusts, Your maximum monthly payment may be 
                as high as $____ which represents ___% of Your 
                estimated monthly income', each statement appearing in 
                a separate column, and the second such statement shall 
                appear in the same column as the statement required by 
                subparagraph (B) regarding fixed rate loans and the 
                third such statement shall appear in the same column as 
                the statement required by subparagraph (B) regarding 
                adjustable rate loans.
                  ``(F) `Your Rate Lock Period is' and `___ days. After 
                You lock into Your interest rate, You must go to 
                settlement within this number of days to be guaranteed 
                this interest rate.', each statement appearing in a 
                separate column.
                  ``(G) `Does Your loan have a prepayment penalty?', 
                `YES, Your maximum prepayment penalty is $____', and 
                `NO', the first such statement and the last two such 
                statements appearing in a separate column, and each of 
                the last two such statements preceded by a checkbox.
                  ``(H) `Does Your loan have a balloon payment?', `YES, 
                Your balloon payment of $____ is due in ___ months', 
                and `NO', the first such statement and the last two 
                such statements appearing in a separate column, and 
                each of the last two such statements preceded by a 
                checkbox.
                  ``(I) `Your Total Estimated Settlement Charges Will 
                be $____ (a)' and `Your Total Estimated Down Payment 
                will be $____ (b)', each statement appearing in a 
                separate column.
                  ``(J) `Your Total Estimated Cash Needed at Closing 
                Will Be' and `$____ (a+b)', each statement appearing in 
                a separate column.
                  ``(K) `This represents a simple summary of Your Good 
                Faith Estimate (GFE). To understand the terms of Your 
                loan, You must see disclosure forms and the Truth in 
                Lending Act.', such statement appearing directly below 
                the entirety of the remainder of the disclosure.
          ``(2) Standard form.--
                  ``(A) Development and use.--The Secretary, in 
                consultation with the Secretary of Veterans Affairs, 
                the Federal Deposit Insurance Corporation, and the 
                Director of the Office of Thrift Supervision, shall 
                develop and prescribe a standard form for the 
                disclosure required under this subsection, which shall 
                be used without variation in all transactions in the 
                United States that involve federally related mortgage 
                loans.
                  ``(B) Appearance.--The standard form developed 
                pursuant to this paragraph shall--
                          ``(i) set forth each statement required under 
                        a separate subparagraph under paragraph (1) on 
                        a separate row of the disclosure;
                          ``(ii) be set forth in 8-point type;
                          ``(iii) be not more than 6 inches in width or 
                        3.5 inches in height;
                          ``(iv) include such boldface type and shading 
                        as the Secretary considers appropriate;
                          ``(v) include such parenthetical statements 
                        directing the borrower to the terms of the loan 
                        (such as `see terms') as the Secretary 
                        considers appropriate, in such places as the 
                        Secretary considers appropriate; and
                          ``(vi) be located in the upper one-third of 
                        the first page of the good faith estimate 
                        required under subsection (c) in a manner that 
                        allows the identity, address, phone number, and 
                        other relevant information of the lender, the 
                        identity, address, phone number, and other 
                        relevant information of the borrower, and the 
                        address of the property for which the federally 
                        related mortgage loan is to be made, to be 
                        located above the standard form.''.
  (b) Regulations.--The Secretary of Housing and Urban Development 
shall issue regulations prescribing the standard form and the use of 
such form, as required by the amendment made by subsection (a), not 
later than the expiration of the 180-day period beginning upon the date 
of the enactment of this Act, and such regulations shall take effect 
upon issuance.

                          Purpose and Summary

    H.R. 3915, the Mortgage Reform and Anti-Predatory Lending 
Act of 2007, is intended to reform mortgage lending practices 
to avert a recurrence of the current situation of rising 
defaults and foreclosures, especially in the subprime market.
    H.R. 3915, as reported, establishes a Federal duty of care 
for mortgage originators; prohibits steering consumers to 
mortgages with predatory characteristics and steering consumers 
who qualify for prime mortgages to subprime mortgages; 
establishes a licensing and registration regime for loan 
originators; sets minimum standards for mortgages requiring 
that consumers must have a reasonable ability to repay at the 
time the mortgage is consummated and that the mortgage must 
provide a net tangible benefit to the consumer; attaches 
limited liability to those who securitize mortgages that 
violate the minimum standards; expands and enhances consumer 
protections for ``high-cost loans'' under the Home Ownership 
and Equity Protection Act; requires additional disclosures to 
consumers; establishes an Office of Housing Counseling within 
the Department of Housing and Urban Development; and includes 
protections for renters of foreclosed properties.

                  Background and Need for Legislation

    Many American families are facing or are at risk of 
foreclosure. The Mortgage Bankers Association (MBA) estimates 
that more than 286,000 mortgage loans entered the foreclosure 
process in the second quarter of 2007, a record high.
    The increase in foreclosures and delinquencies can be 
traced in part to the proliferation of subprime mortgages, 
especially in refinancing. Subprime mortgages generally refer 
to loans that differ materially from ``prime'' loans (e.g., 
they may have higher interest rates, additional fees, or 
prepayment penalties). Some of these loans are made to 
consumers who pose higher credit risk that disqualifies them 
from prime loans. They may have weakened credit histories that 
include delinquencies, charge-offs, judgments, and 
bankruptcies. Other subprime consumers may qualify for prime 
loans, but do not receive them for various reasons ranging from 
the benign (such as an inability to produce full income 
documentation) to predatory practices (such as loan 
``steering'').
    Subprime lenders include banks, bank affiliates, and non-
bank mortgage companies. According to MBA, 52 percent of 
subprime mortgages are made by mortgage brokers and lenders 
with no Federal supervision; 25 percent are made by finance 
companies that are affiliates of bank holding companies and 
indirectly regulated by the Federal Reserve Board; and 23 
percent are made by institutions directly regulated by Federal 
financial regulators such as banks, thrifts, and credit unions.
    Attention has been drawn recently to hybrid adjustable-rate 
mortgages (ARM), for which the interest rate on the note is 
fixed at a low introductory (or ``teaser'') rate for a period 
of time before adjusting upward. The term ``hybrid'' refers to 
the blend of fixed-rate and adjustable-rate characteristics 
found in such ARMs. Like other adjustable-rate products, hybrid 
ARMs transfer some interest rate risk from the lender to the 
consumer, thus allowing the lender to offer a lower initial 
rate.
    Hybrid ARMs are referred to by their initial fixed period 
and adjustment periods, for example 3/1 for an ARM with a 3-
year fixed period and subsequent 1-year rate adjustment 
periods. Two products that have drawn particular attention are 
2/28s and 3/27s. For these loans, the rate resets every six 
months after the initial teaser rate period for the remaining 
28 or 27 years of the loan at a margin over a particular 
designated short-term interest rate, such as the London 
Interbank Offered Rate (LIBOR). Interest-only, no-principal 
balloon loans often result in even steeper increases as a 
result of deferred unpaid principal.
    Many of these loans also have prepayment penalties that may 
extend beyond the low initial payment period. When these loans 
reset, consumers may face penalties for refinancing or have a 
very short time in which to refinance. Prepayment penalties 
can, however, sometimes provide consumers with lower interest 
rates because they provide a more stable revenue stream and 
thus increase the value of the loan on the secondary market.
    The number of hybrid ARMs and other subprime loans--and 
their share of the mortgage market--has significantly increased 
in the past few years. According to press reports, in 1998, the 
percentage of hybrids relative to 30-year fixed rate mortgages 
was less than 2 percent. By 2004, this percentage had risen to 
27.5 percent. The most recent National Delinquency Survey by 
MBA shows the number of subprime loans increasing ten percent 
in the last year alone. In some areas, they make up a quarter 
to half the market (e.g., 40 percent of mortgages in Salinas, 
California; 26 percent in Naples, Florida; at least 51 percent 
of mortgages in West Virginia; and 26 percent in Wyoming). 
Origination volumes of subprime mortgages grew from $100 
billion in 2001 to $800 billion in 2005.
    In some transactions brokers receive ``yield spread 
premiums''--up-front payments for persuading consumers to agree 
to a higher rate than the lender requires. Even if the consumer 
later defaults, servicing fees and costs provide a stream of 
income to the servicer, who can be the original lender or an 
entity that has acquired the servicing rights.
    Many observers comment that the growth of mortgage 
securitization and the market in mortgage-backed securities--
investment instruments backed by pools of loans purchased by 
investment firms--increased the number of lenders and propelled 
the sale of subprime products. Investors' demand for high-yield 
mortgage bonds in turn may have driven brokers and lenders to 
push borrowers to high-risk loans, loosening underwriting 
standards.
    According to the FDIC, between January and September of 
2007, $150 billion in ARMs reset. With an estimated 2 million 
residential loans (1.3 million subprime ARMs) due to reset 
between now and the end of 2008, many observers expect the 
foreclosure problem to worsen.An October 2007 Joint Economic 
Committee (JEC) report estimates that between 2007 and 2009, 2 million 
homes with subprime mortgages will be lost to foreclosure.
    Foreclosures not only harm homeowners, who can lose their 
homes and the equity in them and suffer from tarnished credit 
records, but also can have negative effects on the broader 
community and the economy. Foreclosures can trigger domino 
effects that result in housing abandonment and declining 
property values in surrounding neighborhoods. In 2005, the 
Woodstock Institute found that each foreclosure in a 
neighborhood lowers the property value of surrounding homes by 
0.9 percent to 1.136 percent on average. The JEC study 
estimates that more than $32 billion in housing wealth will be 
indirectly destroyed and that State and local governments will 
lose more than $917 million in property tax revenue due to 
increased foreclosures. Recent Home Mortgage Disclosure Act 
data and academic studies by the Center for Responsible Lending 
and the National Community Reinvestment Coalition suggest that 
a disproportionate amount of higher priced subprime lending is 
concentrated in the minority population and in minority 
neighborhoods.
    Many observers cite a widespread apprehension over exposure 
to subprime mortgage-backed bonds as the root cause for the 
tightening of the credit markets this past summer. Concerns 
initially surfaced when lenders to two leveraged hedge funds 
demanded additional security as collateral against the hedge 
funds' subprime-backed investments. The subsequent closure of 
these hedge funds put pressure on other market participants to 
reprice similar securities. The general threat of such 
repricing of subprime mortgage risk subsequently led to the 
present conditions largely for one reason: No credit provider, 
bond dealer, or investor knows the extent to which other 
parties are exposed to subprime residential mortgage-backed 
securities.
    Congress has enacted a number of consumer protection laws 
in the financial sector over the last few decades. These 
statutes include the Truth in Lending Act (TILA), the Fair 
Credit Reporting Act (FCRA), the Fair Debt Collection Practices 
Act (FDCPA), and the Equal Credit Opportunity Act (ECOA). Most 
of these statutes have sought to address particular consumer 
problems in particular sub-sectors. TILA, for example, requires 
that consumers receive critical disclosures in a uniform manner 
before entering into credit transactions. In response to 
reports of predatory lending practices in home equity lending 
in the early 1990s, Congress enacted the Home Ownership and 
Equity Protection Act (HOEPA) in 1994, which covers home equity 
loans but not purchase-money mortgages. Loans classified as 
``high-cost home loans'' under HOEPA because of their high 
annual percentage rates (APRs) or points and fees trigger 
certain prohibitions or disclosures or both. Under HOEPA, the 
Federal Reserve Board has the authority to prevent ``unfair and 
deceptive'' lending by writing regulations governing all 
lenders, State and Federal.
    Many States have enacted statutes modeled after HOEPA. 
Currently, at least thirty States, the District of Columbia, 
and roughly a dozen municipalities have enacted either 
comprehensive statutes or other limited statutory protections 
aimed at predatory lending practices, some addressing a 
specific practice, some generally tracking HOEPA, and others 
going far beyond it.

                                Hearings

    During the 110th Congress, the Committee on Financial 
Services and its subcommittees held several hearings to examine 
the need for legislation and policy alternatives, culminating 
in the Committee markup on November 6, 2007.
    The Subcommittee on Financial Institutions and Consumer 
Credit held a hearing on March 27, 2007, entitled ``Subprime 
and Predatory Mortgage Lending: New Regulatory Guidance, 
Current Market Conditions and Effects on Regulated Financial 
Institutions.'' The following witnesses testified: Panel One: 
The Honorable Sheila Bair, Chairman, Federal Deposit Insurance 
Corporation; The Honorable John Reich, Director, Office of 
Thrift Supervision; The Honorable JoAnn Johnson, Chairman, 
National Credit Union Administration; Mr. E. Wayne Rushton, 
Senior Deputy Comptroller, Office of the Comptroller of the 
Currency; Ms. Sandra F. Braunstein, Director, Division of 
Consumer and Community Affairs, Federal Reserve Board; and Mr. 
Steve Antonakes, Commissioner of Banks, Massachusetts Division 
of Banks, on behalf of Conference of State Banking Supervisors; 
Panel Two: Mr. Michael Calhoun, President, Center for 
Responsible Lending; Mr. John Taylor, President and CEO, 
National Community Reinvestment Coalition; Mr. Allen Fishbein, 
Director of Housing and Credit Policy, Consumer Federation of 
America; Mr. John Robbins, Chairman, Mortgage Bankers 
Association; Mr. Harry H. Dinham, CMC, President, National 
Association of Mortgage Brokers; and Mr. Alex J. Pollock, 
Resident Fellow, American Enterprise Institute.
    The Subcommittee on Housing and Community Opportunity held 
a hearing on April 17, 2007, entitled ``Possible Responses to 
Rising Mortgage Foreclosures.'' The following witnesses 
testified: Panel One: The Honorable Marcy Kaptur; The Honorable 
Michael R. Turner; Panel Two: The Honorable Sheila Bair, 
Chairman, Federal Deposit Insurance Corporation; The Honorable 
Brian Montgomery, Assistant Secretary for Housing, Department 
of Housing and Urban Development; Mr. Daniel Mudd, President 
and CEO, Fannie Mae; and Mr. Richard F. Syron, Chairman and 
CEO, Freddie Mac; Panel Three: Mr. David Berenbaum, Executive 
Vice President, National Community Reinvestment Coalition; Ms. 
Janis Bowdler, Senior Policy Analyst, National Council of La 
Raza; The Honorable John H. Dalton, President, Housing Policy 
Council, The Financial Services Roundtable; Mr. George Miller, 
Executive Director, American Securitization Forum, also 
representing the Securities Industry and Financial Markets 
Association; Mr. Douglas A. Garver, Executive Director, Ohio 
Housing Finance Agency; and Mr. Kenneth D. Wade, CEO, 
NeighborWorks America.
    The Subcommittee on Financial Institutions and Consumer 
Credit held a hearing on May 8, 2007, entitled ``The Role of 
the Secondary Market in Subprime Lending.'' The following 
witnesses testified: Ms. Cara Heiden, Division President, Wells 
Fargo Home Mortgage; Mr. Warren Kornfeld, Managing Director, 
Moody's Investors Service; Mr. Howard Mulligan, Attorney at 
Law, McDermott, Will and Emery; Mr. Donald C. Lampe, Womble 
Carlyle Sandridge & Rice, PLLC; Mr. Michael Calhoun, President 
and Chief Operating Officer, Center for Responsible Lending; 
Mr. Larry B. Litton, Jr., President and CEO, Litton Loan 
Servicing; and Ms. Judy Kennedy, Executive Director, National 
Association of Affordable Housing Lenders.
    The Committee on Financial Services held a hearing on June 
13, 2007, entitled ``Improving Federal Consumer Protection in 
Financial Services.'' The following witnesses testified: The 
Honorable Randall S. Kroszner, Governor, Federal Reserve Board; 
The Honorable John C. Dugan, Comptroller of the Currency, 
Office of the Comptroller of the Currency; The Honorable Sheila 
C. Bair, Chairman, Federal Deposit Insurance Corporation; The 
Honorable Deborah Platt Majoras, Chairman, Federal Trade 
Commission; Mr. Scott M. Polakoff, Deputy Director and Chief 
Operating Officer, Office of Thrift Supervision; The Honorable 
Tom Miller, Attorney General, State of Iowa; andMr. Steven L. 
Antonakes, Commissioner of Banks, Commonwealth of Massachusetts, on 
behalf of the Conference of State Bank Supervisors.
    The Subcommittee on Oversight and Investigations held a 
hearing on July 25, 2007, entitled ``Rooting Out Discrimination 
in Mortgage Lending: Using HMDA as a Tool for Fair Lending 
Enforcement.'' The following witnesses testified: Panel One: 
Mr. John Taylor, President and CEO, National Community 
Reinvestment Coalition; Ms. Ginny Hamilton, Executive Director, 
Fair Housing Center of Greater Boston; Mr. Hilary O. Shelton, 
Director, Washington Bureau, National Association for the 
Advancement of Colored People; Mr. Saul Solorzano, Executive 
Director, Central American Resource Center; Mr. Michael LaCour-
Little, Professor of Finance, California State University--
Fullerton; Mr. Bill Himpler, Executive Vice President, American 
Financial Services Association; Panel Two: Ms. Sandra F. 
Braunstein, Director, Division of Consumer and Community 
Affairs, Board of Governors of the Federal Reserve Board; Ms. 
Sandra L. Thompson, Director, Division of Supervision and 
Consumer Protection, Federal Deposit Insurance Corporation; Ms. 
Montrice Yakimov, Managing Director, Compliance and Consumer 
Protection, Office of Thrift Supervision; Mr. David M. Marquis, 
Director, Office of Examination and Insurance, National Credit 
Union Administration; Mr. Calvin R. Hagins, Director for 
Compliance Policy, Office of the Comptroller of the Currency; 
Ms. Grace Chung Becker, Deputy Assistant Attorney General, 
Civil Rights Division, U.S. Department of Justice; Ms. Kim 
Kendrick, Assistant Secretary, Office of Fair Housing and Equal 
Opportunity, U.S. Department of Housing and Urban Development; 
and Ms. Lydia B. Parnes, Director, Bureau of Consumer 
Protection, Federal Trade Commission.
    The Committee on Financial Services held a hearing on July 
25, 2007, entitled ``Improving Federal Consumer Protection in 
Financial Services--Consumer and Industry Perspectives.'' The 
following witnesses testified: Mr. Travis Plunkett, Legislative 
Director, Consumer Federation of America; Mr. Raul Gonzalez, 
Legislative Director, National Council of La Raza; Mr. George 
Gaberlavage, Director, Policy Research & Development, Consumer 
and State Affairs, Public Policy Institute, AARP; Mr. Arthur 
Johnson, Vice President, American Bankers Association, Chairman 
and Chief Executive Officer of United Bank of Michigan; and Mr. 
Jim Sivon, Partner, Barnett, Sivon & Natter PC.
    The Committee on Financial Services held a field hearing on 
August 9, 2007, in Minneapolis, Minnesota, entitled ``The 
Effect of Predatory Lending and the Foreclosure Crisis on Twin 
Cities' Communities and Neighborhoods.'' The following 
witnesses testified: Panel One: The Honorable R. T. Rybak, 
Mayor, Minneapolis, Minnesota; The Honorable Chris Coleman, 
Mayor, St. Paul, Minnesota; The Honorable Lori Swanson, 
Attorney General, State of Minnesota; Mr. Richard M. Todd, 
Minneapolis Federal Reserve Chair Vice President, Federal 
Reserve Bank of Minneapolis; Panel Two: Ms. Sharon Glover, 
Golden Valley, Minnesota; Mr. Dante Rivera, St. Paul, 
Minnesota; Panel Three: Ms. Dorothy Bridges, President, 
Franklin Avenue Bank, Minneapolis, Minnesota; Mr. Paul 
Satriano, ACORN National Treasurer, MN ACORN State Board 
Director, St. Paul, Minnesota; Ms. Patricia Hanson, President, 
Community Development and Specialized Lending, Wells Fargo, 
Minneapolis, Minnesota; Ms. Sheri Pugh Sullivan, Executive 
Director, Northside Residents Resource Council, Minneapolis, 
Minnesota; Mr. Tim Marx, Commissioner, Minnesota Housing 
Finance Agency, St. Paul, Minnesota; and Ms. Julie Gugin, 
Executive Director, Minnesota Home Ownership Center.
    The Committee on Financial Services held a hearing on 
September 5, 2007, entitled ``Recent Events in the Credit and 
Mortgage Markets and Possible Implications for U.S. Consumers 
and the Global Economy.'' The following witnesses testified: 
The Honorable Robert K. Steel, Under Secretary of Domestic 
Finance, Department of the Treasury; The Honorable John C. 
Dugan, Comptroller of the Currency; Mr. Erik R. Sirri, Director 
of the Division of Market Regulation, Securities and Exchange 
Commission; and The Honorable Sheila Bair, Chair, Federal 
Deposit Insurance Corporation.
    The Committee on Financial Services held a hearing on 
September 20, 2007, entitled ``Legislative and Regulatory 
Options for Minimizing and Mitigating Mortgage Foreclosures.'' 
The following witnesses testified: Panel One: The Honorable 
Henry M. Paulson, Jr., Secretary of the Treasury, United States 
Department of the Treasury; The Honorable Alphonso Jackson, 
Secretary of Housing and Urban Development, United States 
Department of Housing and Urban Development; The Honorable Ben 
S. Bernanke, Chairman, Board of Governors of the Federal 
Reserve System; Panel Two: Mr. Daniel H. Mudd, President and 
Chief Executive Officer, Fannie Mae; Dr. Richard F. Syron, 
Chairman and Chief Executive Officer, Freddie Mac; Ms. Judith 
Liben, Massachusetts Law Reform Institute; Mr. John M. Robbins, 
Chairman, Mortgage Bankers Association; Mr. Harry H. Dinham, 
CMC, Past-President, National Association of Mortgage Brokers 
(NAMB), The Dinham Companies; Mr. Bruce Marks, Chief Executive 
Officer, Neighborhood Assistance Corporation of America; and 
Mr. Alex J. Pollock, Resident Fellow, American Enterprise 
Institute.
    The Committee on Financial Services held a field hearing on 
October 15, 2007, in Roxbury Crossing, Massachusetts, entitled 
``Mortgage Lending Disparities.'' The following witnesses 
testified: Panel One: The Honorable Deval Patrick, Governor of 
the Commonwealth of Massachusetts; The Honorable Thomas M. 
Menino, Mayor of the City of Boston; and The Honorable Martha 
Coakley, Attorney General of the Commonwealth of Massachusetts; 
Panel Two: Mr. Chuck Turner, Councilor, City of Boston; Mr. Sam 
Yoon, At-Large City Councilor, City of Boston; Panel Three: Mr. 
Jim Campen, Executive Director, Americans for Fairness in 
Lending; Ms. Ginny Hamilton, Executive Director, Fair Housing 
Center of Greater Boston; Ms. Acia Adams-Heath, President, 
Massachusetts Affordable Housing Alliance; Mr. Leonard Alkins, 
President Emeritus, NAACP Boston Branch; Mr. Thomas B. Kennedy, 
Senior Vice President, Sovereign Bank; and Ms. Lynn Browne, 
Executive Vice President and Senior Economist, Federal Reserve 
Bank of Boston.
    The Committee on Financial Services held a hearing on 
October 24, 2007, entitled ``Legislative Proposals on Reforming 
Mortgage Practices.'' The following witnesses testified: Panel 
One: The Honorable Martin J. Gruenberg, Vice Chairman, Federal 
Deposit Insurance Corporation; The Honorable John C. Dugan, 
Comptroller, Office of the Comptroller of the Currency; The 
Honorable John M. Reich, Director, Office of Thrift 
Supervision; The Honorable JoAnn Johnson, Chairman, National 
Credit Union Administration; The Honorable Randall S. Kroszner, 
Governor, Board of Governors of the Federal Reserve System; The 
Honorable Steven L. Antonakes, Commissioner, Massachusetts 
Division of Banks; Panel Two: Mr. Michael D. Calhoun, President 
and Chief Operating Officer, Center for Responsible Lending; 
Ms. Janis Bowdler, Senior Housing Policy Analyst, National 
Council of La Raza; Mr. Hilary Shelton, Director, NAACP 
Washington Bureau; Mr. John Taylor, President and Chief 
Executive Officer, National Community Reinvestment Coalition; 
Mr. John Hope Bryant, Founder, Chairman and Chief Executive 
Officer, Operation HOPE, Inc.; Panel Three: Mr. Bradley E. 
Rock, Chairman, President and Chief Executive Officer, Bank of 
Smithtown, on behalf of the AmericanBankers Association and 
America's Community Bankers; Mr. Kurt Pfotenhauer, Senior Vice 
President for Government Affairs and Public Policy, Mortgage Bankers 
Association; Mr. Marc Lackritz, President and Chief Executive Officer, 
Securities Industry and Financial Markets Association; Mr. Marc S. 
Savitt, President, The Mortgage Center, President-Elect, National 
Association of Mortgage Brokers; and Mr. Donald C. Lampe, Womble 
Carlyle Sandridge & Rice, PLLC.
    The Committee on Financial Service held a hearing on 
November 2, 2007, entitled ``Progress in Administration and 
Other Efforts to Coordinate and Enhance Mortgage Foreclosure 
Prevention.'' The following witnesses testified: Panel One: The 
Honorable Robert K. Steel, Under Secretary for Domestic 
Finance, U.S. Department of the Treasury; and The Honorable 
Brian D. Montgomery, Assistant Secretary for Housing--Federal 
Housing Commissioner, U.S. Department of Housing and Urban 
Development; Panel Two: The Honorable Tom Miller, Attorney 
General, State of Iowa; Mr. Kenneth Wade, Chief Executive 
Officer, NeighborWorks America; Mr. Bruce Marks, Chief 
Executive Officer, Neighborhood Assistance Corporation of 
America; Mr. Bill Longbrake, Anthony T. Cluff Senior Policy 
Advisor, The Financial Services Roundtable; and Mr. Sandor 
Samuels, Executive Managing Director, Countrywide Financial 
Corporation.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
November 6, 2007, and ordered H.R. 3915, the Mortgage Reform 
and Anti-Predatory Lending Act of 2007, as amended, reported 
with a favorable recommendation by a record vote of 45 yeas and 
19 nays.

                            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. A 
motion by Mr. Frank to report the bill, as amended, to the 
House with a favorable recommendation was agreed to by a record 
vote of 45 yeas and 19 nays (Record vote FC-80). The names of 
Members voting for and against follow:

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative       Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank.......................        X  ........  ........  Mr. Bachus.........        X   ........  ........
Mr. Kanjorski...................        X  ........  ........  Mr. Baker..........  ........  ........  ........
Ms. Waters......................        X  ........  ........  Ms. Pryce (OH).....  ........  ........  ........
Mrs. Maloney....................        X  ........  ........  Mr. Castle.........        X   ........  ........
Mr. Gutierrez...................        X  ........  ........  Mr. King (NY)......        X   ........  ........
Ms. Velazquez...................        X  ........  ........  Mr. Royce..........  ........        X   ........
Mr. Watt........................        X  ........  ........  Mr. Lucas..........  ........        X   ........
Mr. Ackerman....................        X  ........  ........  Mr. Paul...........  ........  ........  ........
Ms. Carson......................  .......  ........  ........  Mr. LaTourette.....        X   ........  ........
Mr. Sherman.....................        X  ........  ........  Mr. Manzullo.......  ........        X   ........
Mr. Meeks.......................        X  ........  ........  Mr. Jones..........        X   ........  ........
Mr. Moore (KS)..................        X  ........  ........  Mrs. Biggert.......  ........  ........  ........
Mr. Capuano.....................        X  ........  ........  Mr. Shays..........        X   ........  ........
Mr. Hinojosa....................        X  ........  ........  Mr. Miller (CA)....        X   ........  ........
Mr. Clay........................        X  ........  ........  Mrs. Capito........        X   ........  ........
Mrs. McCarthy...................        X  ........  ........  Mr. Feeney.........  ........        X   ........
Mr. Baca........................        X  ........  ........  Mr. Hensarling.....  ........        X   ........
Mr. Lynch.......................        X  ........  ........  Mr. Garrett (NJ)...  ........        X   ........
Mr. Miller (NC).................        X  ........  ........  Ms. Brown-Waite....        X   ........  ........
Mr. Scott.......................        X  ........  ........  Mr. Barrett (SC)...  ........        X   ........
Mr. Green.......................        X  ........  ........  Mr. Gerlach........  ........  ........  ........
Mr. Cleaver.....................        X  ........  ........  Mr. Pearce.........  ........        X   ........
Ms. Bean........................        X  ........  ........  Mr. Neugebauer.....  ........        X   ........
Ms. Moore (WI)..................        X  ........  ........  Mr. Price (GA).....  ........        X   ........
Mr. Davis (TN)..................        X  ........  ........  Mr. Davis (KY).....  ........        X   ........
Mr. Sires.......................        X  ........  ........  Mr. McHenry........  ........        X   ........
Mr. Hodes.......................        X  ........  ........  Mr. Campbell.......  ........        X   ........
Mr. Ellison.....................        X  ........  ........  Mr. Putnam.........  ........        X   ........
Mr. Klein.......................        X  ........  ........  Mrs. Bachmann......  ........        X   ........
Mr. Mahoney (FL)................        X  ........  ........  Mr. Roskam.........  ........        X   ........
Mr. Wilson......................        X  ........  ........  Mr. Marchant.......  ........        X   ........
Mr. Perlmutter..................        X  ........  ........  Mr. McCotter.......  ........        X   ........
Mr. Murphy......................        X  ........  ........  Mr. McCarthy.......  ........        X   ........
Mr. Donnelly....................        X  ........  ........
Mr. Wexler......................        X  ........  ........
Mr. Marshall....................        X  ........  ........
Mr. Boren.......................        X  ........
----------------------------------------------------------------------------------------------------------------

    The following amendments were disposed of by record votes. 
The names of Members voting for and against follow:
    An amendment to the amendment in the nature of a substitute 
by Mr. Pearce, No. 1e, striking section 123 (Anti-steering), 
was not agreed to by a record vote of 22 yeas and 38 nays 
(Record vote FC-72):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative       Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank.......................  .......        X   ........  Mr. Bachus.........  ........        X   ........
Mr. Kanjorski...................  .......        X   ........  Mr. Baker..........  ........  ........  ........
Ms. Waters......................  .......        X   ........  Ms. Pryce (OH).....  ........  ........  ........
Mrs. Maloney....................  .......        X   ........  Mr. Castle.........  ........  ........  ........
Mr. Gutierrez...................  .......        X   ........  Mr. King (NY)......  ........        X   ........
Ms. Velazquez...................  .......        X   ........  Mr. Royce..........        X   ........  ........
Mr. Watt........................  .......        X   ........  Mr. Lucas..........        X   ........  ........
Mr. Ackerman....................  .......        X   ........  Mr. Paul...........  ........  ........  ........
Ms. Carson......................  .......  ........  ........  Mr. LaTourette.....  ........        X   ........
Mr. Sherman.....................  .......        X   ........  Mr. Manzullo.......        X   ........  ........
Mr. Meeks.......................  .......        X   ........  Mr. Jones..........  ........        X   ........
Mr. Moore (KS)..................  .......        X   ........  Mrs. Biggert.......  ........        X   ........
Mr. Capuano.....................  .......        X   ........  Mr. Shays..........        X   ........  ........
Mr. Hinojosa....................  .......  ........  ........  Mr. Miller (CA)....        X   ........  ........
Mr. Clay........................  .......        X   ........  Mrs. Capito........  ........        X   ........
Mrs. McCarthy...................  .......        X   ........  Mr. Feeney.........        X   ........  ........
Mr. Baca........................  .......        X   ........  Mr. Hensarling.....        X   ........  ........
Mr. Lynch.......................  .......  ........  ........  Mr. Garrett (NJ)...        X   ........  ........
Mr. Miller (NC).................  .......        X   ........  Ms. Brown-Waite            X   ........  ........
                                                                (FL).
Mr. Scott.......................  .......        X   ........  Mr. Barrett (SC)...        X   ........  ........
Mr. Green.......................  .......        X   ........  Mr. Gerlach........  ........  ........  ........
Mr. Cleaver.....................  .......        X   ........  Mr. Pearce.........        X   ........  ........
Ms. Bean........................  .......  ........  ........  Mr. Neugebauer.....        X   ........  ........
Ms. Moore (WI)..................  .......        X   ........  Mr. Price (GA).....        X   ........  ........
Mr. Davis (TN)..................  .......        X   ........  Mr. Davis (KY).....        X   ........  ........
Mr. Sires.......................  .......        X   ........  Mr. McHenry........        X   ........  ........
Mr. Hodes.......................  .......  ........  ........  Mr. Campbell.......        X   ........  ........
Mr. Ellison.....................  .......        X   ........  Mr. Putnam.........        X   ........  ........
Mr. Klein.......................  .......        X   ........  Mrs. Bachmann......        X   ........  ........
Mr. Mahoney (FL)................  .......        X   ........  Mr. Roskam.........        X   ........  ........
Mr. Wilson......................  .......        X   ........  Mr. Marchant.......        X   ........  ........
Mr. Perlmutter..................  .......        X   ........  Mr. McCotter.......        X   ........  ........
Mr. Murphy......................  .......        X   ........  Mr. McCarthy.......        X   ........  ........
Mr. Donnelly....................  .......        X   ........
Mr. Wexler......................  .......        X   ........
Mr. Marshall....................  .......        X   ........
Mr. Boren.......................  .......        X
----------------------------------------------------------------------------------------------------------------

    An amendment to the amendment in the nature of a substitute 
by Mr. McHenry, No. 1m, striking title III (High-Cost 
Mortgages), was not agreed to by a record vote of 25 yeas and 
36 nays (Record vote FC-73):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative       Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank.......................  .......        X   ........  Mr. Bachus.........        X   ........  ........
Mr. Kanjorski...................  .......        X   ........  Mr. Baker..........  ........  ........  ........
Ms. Waters......................  .......        X   ........  Ms. Pryce (OH).....  ........  ........  ........
Mrs. Maloney....................  .......        X   ........  Mr. Castle.........  ........  ........  ........
Mr. Gutierrez...................  .......        X   ........  Mr. King (NY)......        X   ........  ........
Ms. Velazquez...................  .......        X   ........  Mr. Royce..........        X   ........  ........
Mr. Watt........................  .......        X   ........  Mr. Lucas..........        X   ........  ........
Mr. Ackerman....................  .......        X   ........  Mr. Paul...........  ........  ........  ........
Ms. Carson......................  .......  ........  ........  Mr. LaTourette.....  ........        X   ........
Mr. Sherman.....................  .......        X   ........  Mr. Manzullo.......        X   ........  ........
Mr. Meeks.......................  .......        X   ........  Mr. Jones..........        X   ........  ........
Mr. Moore (KS)..................  .......        X   ........  Mrs. Biggert.......  ........  ........  ........
Mr. Capuano.....................  .......        X   ........  Mr. Shays..........  ........        X   ........
Mr. Hinojosa....................  .......        X   ........  Mr. Miller (CA)....        X   ........  ........
Mr. Clay........................  .......        X   ........  Mrs. Capito........        X   ........  ........
Mrs. McCarthy...................  .......        X   ........  Mr. Feeney.........        X   ........  ........
Mr. Baca........................  .......        X   ........  Mr. Hensarling.....        X   ........  ........
Mr. Lynch.......................  .......  ........  ........  Mr. Garrett (NJ)...        X   ........  ........
Mr. Miller (NC).................  .......        X   ........  Ms. Brown-Waite            X   ........  ........
                                                                (FL).
Mr. Scott.......................  .......        X   ........  Mr. Barrett (SC)...        X   ........  ........
Mr. Green.......................  .......        X   ........  Mr. Gerlach........  ........  ........  ........
Mr. Cleaver.....................  .......        X   ........  Mr. Pearce.........        X   ........  ........
Ms. Bean........................  .......  ........  ........  Mr. Neugebauer.....        X   ........  ........
Ms. Moore (WI)..................  .......        X   ........  Mr. Price (GA).....        X   ........  ........
Mr. Davis (TN)..................  .......        X   ........  Mr. Davis (KY).....        X   ........  ........
Mr. Sires.......................  .......        X   ........  Mr. McHenry........        X   ........  ........
Mr. Hodes.......................  .......        X   ........  Mr. Campbell.......        X   ........  ........
Mr. Ellison.....................  .......        X   ........  Mr. Putnam.........        X   ........  ........
Mr. Klein.......................  .......        X   ........  Mrs. Bachmann......        X   ........  ........
Mr. Mahoney (FL)................  .......        X   ........  Mr. Roskam.........        X   ........  ........
Mr. Wilson......................  .......        X   ........  Mr. Marchant.......        X   ........  ........
Mr. Perlmutter..................  .......        X   ........  Mr. McCotter.......        X   ........  ........
Mr. Murphy......................  .......        X   ........  Mr. McCarthy.......        X   ........  ........
Mr. Donnelly....................  .......        X   ........
Mr. Wexler......................  .......        X   ........
Mr. Marshall....................  .......        X   ........
Mr. Boren.......................  .......        X   ........
----------------------------------------------------------------------------------------------------------------

    An amendment to the amendment in the nature of a substitute 
by Mr. Garrett, No. 1n, striking rebuttable presumption, was 
not agreed to by a record vote of 26 yeas and 37 nays (Record 
vote FC-74):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative       Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank.......................  .......        X   ........  Mr. Bachus.........        X   ........  ........
Mr. Kanjorski...................  .......        X   ........  Mr. Baker..........  ........  ........  ........
Ms. Waters......................  .......        X   ........  Ms. Pryce (OH).....  ........  ........  ........
Mrs. Maloney....................  .......        X   ........  Mr. Castle.........  ........  ........  ........
Mr. Gutierrez...................  .......        X   ........  Mr. King (NY)......        X   ........  ........
Ms. Velazquez...................  .......        X   ........  Mr. Royce..........        X   ........  ........
Mr. Watt........................  .......        X   ........  Mr. Lucas..........        X   ........  ........
Mr. Ackerman....................  .......        X   ........  Mr. Paul...........  ........  ........  ........
Ms. Carson......................  .......  ........  ........  Mr. LaTourette.....  ........        X   ........
Mr. Sherman.....................  .......        X   ........  Mr. Manzullo.......        X   ........  ........
Mr. Meeks.......................  .......        X   ........  Mr. Jones..........        X   ........  ........
Mr. Moore (KS)..................  .......        X   ........  Mrs. Biggert.......  ........  ........  ........
Mr. Capuano.....................  .......        X   ........  Mr. Shays..........        X   ........  ........
Mr. Hinojosa....................  .......        X   ........  Mr. Miller (CA)....        X   ........  ........
Mr. Clay........................  .......        X   ........  Mrs. Capito........        X   ........  ........
Mrs. McCarthy...................  .......        X   ........  Mr. Feeney.........        X   ........  ........
Mr. Baca........................  .......        X   ........  Mr. Hensarling.....        X   ........  ........
Mr. Lynch.......................  .......        X   ........  Mr. Garrett (NJ)...        X   ........  ........
Mr. Miller (NC).................  .......        X   ........  Ms. Brown-Waite            X   ........  ........
                                                                (FL).
Mr. Scott.......................  .......        X   ........  Mr. Barrett (SC)...        X   ........  ........
Mr. Green.......................  .......        X   ........  Mr. Gerlach........  ........  ........  ........
Mr. Cleaver.....................  .......        X   ........  Mr. Pearce.........        X   ........  ........
Ms. Bean........................  .......        X   ........  Mr. Neugebauer.....        X   ........  ........
Ms. Moore (WI)..................  .......        X   ........  Mr. Price (GA).....        X   ........  ........
Mr. Davis (TN)..................  .......        X   ........  Mr. Davis (KY).....        X   ........  ........
Mr. Sires.......................  .......        X   ........  Mr. McHenry........        X   ........  ........
Mr. Hodes.......................  .......        X   ........  Mr. Campbell.......        X   ........  ........
Mr. Ellison.....................  .......        X   ........  Mr. Putnam.........        X   ........  ........
Mr. Klein.......................  .......        X   ........  Mrs. Bachmann......        X   ........  ........
Mr. Mahoney (FL)................  .......        X   ........  Mr. Roskam.........        X   ........  ........
Mr. Wilson......................  .......        X   ........  Mr. Marchant.......        X   ........  ........
Mr. Perlmutter..................  .......        X   ........  Mr. McCotter.......        X   ........  ........
Mr. Murphy......................  .......        X   ........  Mr. McCarthy.......        X   ........  ........
Mr. Donnelly....................  .......        X   ........
Mr. Wexler......................  .......        X   ........
Mr. Marshall....................  .......        X   ........
Mr. Boren.......................  .......        X   ........
----------------------------------------------------------------------------------------------------------------

    An amendment to the amendment in the nature of a substitute 
by Mr. Price (GA), No. 1o, excepting certain qualified loans, 
was not agreed to by a record vote of 19 yeas and 44 nays 
(Record vote FC-75):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative       Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank.......................  .......        X   ........  Mr. Bachus.........  ........  ........  ........
Mr. Kanjorski...................  .......        X   ........  Mr. Baker..........  ........  ........  ........
Ms. Waters......................  .......        X   ........  Ms. Pryce (OH).....  ........  ........  ........
Mrs. Maloney....................  .......        X   ........  Mr. Castle.........  ........        X   ........
Mr. Gutierrez...................  .......        X   ........  Mr. King (NY)......  ........        X   ........
Ms. Velazquez...................  .......        X   ........  Mr. Royce..........        X   ........  ........
Mr. Watt........................  .......        X   ........  Mr. Lucas..........        X   ........  ........
Mr. Ackerman....................  .......        X   ........  Mr. Paul...........  ........  ........  ........
Ms. Carson......................  .......  ........  ........  Mr. LaTourette.....  ........        X   ........
Mr. Sherman.....................  .......        X   ........  Mr. Manzullo.......        X   ........  ........
Mr. Meeks.......................  .......        X   ........  Mr. Jones..........  ........        X   ........
Mr. Moore (KS)..................  .......        X   ........  Mrs. Biggert.......  ........  ........  ........
Mr. Capuano.....................  .......        X   ........  Mr. Shays..........  ........        X   ........
Mr. Hinojosa....................  .......        X   ........  Mr. Miller (CA)....  ........        X   ........
Mr. Clay........................  .......        X   ........  Mrs. Capito........  ........        X   ........
Mrs. McCarthy...................  .......        X   ........  Mr. Feeney.........        X   ........  ........
Mr. Baca........................  .......        X   ........  Mr. Hensarling.....        X   ........  ........
Mr. Lynch.......................  .......        X   ........  Mr. Garrett (NJ)...        X   ........  ........
Mr. Miller (NC).................  .......        X   ........  Ms. Brown-Waite            X   ........  ........
                                                                (FL).
Mr. Scott.......................  .......        X   ........  Mr. Barrett (SC)...        X   ........  ........
Mr. Green.......................  .......        X   ........  Mr. Gerlach........  ........  ........  ........
Mr. Cleaver.....................  .......        X   ........  Mr. Pearce.........        X   ........  ........
Ms. Bean........................  .......        X   ........  Mr. Neugebauer.....        X   ........  ........
Ms. Moore (WI)..................  .......        X   ........  Mr. Price (GA).....        X   ........  ........
Mr. Davis (TN)..................  .......        X   ........  Mr. Davis (KY).....        X   ........  ........
Mr. Sires.......................  .......        X   ........  Mr. McHenry........        X   ........  ........
Mr. Hodes.......................  .......        X   ........  Mr. Campbell.......  ........        X   ........
Mr. Ellison.....................  .......        X   ........  Mr. Putnam.........        X   ........  ........
Mr. Klein.......................  .......        X   ........  Mrs. Bachmann......        X   ........  ........
Mr. Mahoney (FL)................  .......        X   ........  Mr. Roskam.........        X   ........  ........
Mr. Wilson......................  .......        X   ........  Mr. Marchant.......        X   ........  ........
Mr. Perlmutter..................  .......        X   ........  Mr. McCotter.......        X   ........  ........
Mr. Murphy......................  .......        X   ........  Mr. McCarthy.......        X   ........  ........
Mr. Donnelly....................  .......        X   ........
Mr. Wexler......................  .......        X   ........
Mr. Marshall....................  .......        X   ........
Mr. Boren.......................  .......        X   ........
----------------------------------------------------------------------------------------------------------------

    An amendment to the amendment in the nature of a substitute 
by Mr. Campbell, No. 1p, striking section 204 (Liability), was 
not agreed to by a record vote of 22 yeas and 42 nays (Record 
vote FC-76):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative       Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank.......................  .......        X   ........  Mr. Bachus.........  ........        X   ........
Mr. Kanjorski...................  .......        X   ........  Mr. Baker..........  ........  ........  ........
Ms. Waters......................  .......        X   ........  Ms. Pryce (OH).....  ........  ........  ........
Mrs. Maloney....................  .......        X   ........  Mr. Castle.........  ........        X   ........
Mr. Gutierrez...................  .......        X   ........  Mr. King (NY)......  ........        X   ........
Ms. Velazquez...................  .......        X   ........  Mr. Royce..........        X   ........  ........
Mr. Watt........................  .......        X   ........  Mr. Lucas..........        X   ........  ........
Mr. Ackerman....................  .......        X   ........  Mr. Paul...........  ........  ........  ........
Ms. Carson......................  .......  ........  ........  Mr. LaTourette.....  ........        X   ........
Mr. Sherman.....................  .......        X   ........  Mr. Manzullo.......        X   ........  ........
Mr. Meeks.......................  .......        X   ........  Mr. Jones..........  ........        X   ........
Mr. Moore (KS)..................  .......        X   ........  Mrs. Biggert.......  ........  ........  ........
Mr. Capuano.....................  .......        X   ........  Mr. Shays..........        X   ........  ........
Mr. Hinojosa....................  .......        X   ........  Mr. Miller (CA)....        X   ........  ........
Mr. Clay........................  .......        X   ........  Mrs. Capito........  ........        X   ........
Mrs. McCarthy...................  .......        X   ........  Mr. Feeney.........        X   ........  ........
Mr. Baca........................  .......        X   ........  Mr. Hensarling.....        X   ........  ........
Mr. Lynch.......................  .......        X   ........  Mr. Garrett (NJ)...        X   ........  ........
Mr. Miller (NC).................  .......        X   ........  Ms. Brown-Waite            X   ........  ........
                                                                (FL).
Mr. Scott.......................  .......        X   ........  Mr. Barrett (SC)...        X   ........  ........
Mr. Green.......................  .......        X   ........  Mr. Gerlach........  ........  ........  ........
Mr. Cleaver.....................  .......        X   ........  Mr. Pearce.........        X   ........  ........
Ms. Bean........................  .......        X   ........  Mr. Neugebauer.....        X   ........  ........
Ms. Moore (WI)..................  .......        X   ........  Mr. Price (GA).....        X   ........  ........
Mr. Davis (TN)..................  .......        X   ........  Mr. Davis (KY).....        X   ........  ........
Mr. Sires.......................  .......        X   ........  Mr. McHenry........        X   ........  ........
Mr. Hodes.......................  .......        X   ........  Mr. Campbell.......        X   ........  ........
Mr. Ellison.....................  .......        X   ........  Mr. Putnam.........        X   ........  ........
Mr. Klein.......................  .......        X   ........  Mrs. Bachmann......        X   ........  ........
Mr. Mahoney (FL)................  .......        X   ........  Mr. Roskam.........        X   ........  ........
Mr. Wilson......................  .......        X   ........  Mr. Marchant.......        X   ........  ........
Mr. Perlmutter..................  .......        X   ........  Mr. McCotter.......        X   ........  ........
Mr. Murphy......................  .......        X   ........  Mr. McCarthy.......        X   ........  ........
Mr. Donnelly....................  .......        X   ........
Mr. Wexler......................  .......        X   ........
Mr. Marshall....................  .......        X   ........
Mr. Boren.......................  .......        X   ........
----------------------------------------------------------------------------------------------------------------

    An amendment to the amendment in the nature of a substitute 
by Mr. Garrett, No. 1r, regarding delayed effective date, was 
not agreed to by a record vote of 20 yeas and 44 nays (Record 
vote FC-77):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative       Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank.......................  .......        X   ........  Mr. Bachus.........  ........        X   ........
Mr. Kanjorski...................  .......        X   ........  Mr. Baker..........  ........  ........  ........
Ms. Waters......................  .......        X   ........  Ms. Pryce (OH).....  ........  ........  ........
Mrs. Maloney....................  .......        X   ........  Mr. Castle.........  ........        X   ........
Mr. Gutierrez...................  .......        X   ........  Mr. King (NY)......  ........        X   ........
Ms. Velazquez...................  .......        X   ........  Mr. Royce..........        X   ........  ........
Mr. Watt........................  .......        X   ........  Mr. Lucas..........        X   ........  ........
Mr. Ackerman....................  .......        X   ........  Mr. Paul...........  ........  ........  ........
Ms. Carson......................  .......  ........  ........  Mr. LaTourette.....  ........        X   ........
Mr. Sherman.....................  .......        X   ........  Mr. Manzullo.......        X   ........  ........
Mr. Meeks.......................  .......        X   ........  Mr. Jones..........  ........        X   ........
Mr. Moore (KS)..................  .......        X   ........  Mrs. Biggert.......  ........  ........  ........
Mr. Capuano.....................  .......        X   ........  Mr. Shays..........  ........        X   ........
Mr. Hinojosa....................  .......        X   ........  Mr. Miller (CA)....        X   ........  ........
Mr. Clay........................  .......        X   ........  Mrs. Capito........  ........        X   ........
Mrs. McCarthy...................  .......        X   ........  Mr. Feeney.........        X   ........  ........
Mr. Baca........................  .......        X   ........  Mr. Hensarling.....        X   ........  ........
Mr. Lynch.......................  .......        X   ........  Mr. Garrett (NJ)...        X   ........  ........
Mr. Miller (NC).................  .......        X   ........  Ms. Brown-Waite      ........        X   ........
                                                                (FL).
Mr. Scott.......................  .......        X   ........  Mr. Barrett (SC)...        X   ........  ........
Mr. Green.......................  .......        X   ........  Mr. Gerlach........  ........  ........  ........
Mr. Cleaver.....................  .......        X   ........  Mr. Pearce.........        X   ........  ........
Ms. Bean........................  .......        X   ........  Mr. Neugebauer.....        X   ........  ........
Ms. Moore (WI)..................  .......        X   ........  Mr. Price (GA).....        X   ........  ........
Mr. Davis (TN)..................  .......        X   ........  Mr. Davis (KY).....        X   ........  ........
Mr. Sires.......................  .......        X   ........  Mr. McHenry........        X   ........  ........
Mr. Hodes.......................  .......        X   ........  Mr. Campbell.......        X   ........  ........
Mr. Ellison.....................  .......        X   ........  Mr. Putnam.........        X   ........  ........
Mr. Klein.......................  .......        X   ........  Mrs.Bachmann.......        X   ........  ........
Mr. Mahoney (FL)................  .......        X   ........  Mr. Roskam.........        X   ........  ........
Mr. Wilson......................  .......        X   ........  Mr. Marchant.......        X   ........  ........
Mr. Perlmutter..................  .......        X   ........  Mr. McCotter.......        X   ........  ........
Mr. Murphy......................  .......        X   ........  Mr. McCarthy.......        X   ........  ........
Mr. Donnelly....................  .......        X   ........
Mr. Wexler......................  .......        X   ........
Mr. Marshall....................  .......        X   ........
Mr. Boren.......................  .......        X   ........
----------------------------------------------------------------------------------------------------------------

    An amendment to the amendment in the nature of a substitute 
by Mr. Hensarling, No. 1s, regarding a termination provision, 
was not agreed to by a record vote of 21 yeas and 43 nays 
(Record vote FC-78):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative       Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank.......................  .......        X   ........  Mr. Bachus.........  ........        X   ........
Mr. Kanjorski...................  .......        X   ........  Mr. Baker..........  ........  ........  ........
Ms. Waters......................  .......        X   ........  Ms. Pryce (OH).....  ........  ........  ........
Mrs. Maloney....................  .......        X   ........  Mr. Castle.........  ........        X   ........
Mr. Gutierrez...................  .......        X   ........  Mr. King (NY)......  ........        X   ........
Ms. Velazquez...................  .......        X   ........  Mr. Royce..........        X   ........  ........
Mr. Watt........................  .......        X   ........  Mr. Lucas..........        X   ........  ........
Mr. Ackerman....................  .......        X   ........  Mr. Paul...........  ........  ........  ........
Ms. Carson......................  .......  ........  ........  Mr. LaTourette.....  ........        X   ........
Mr. Sherman.....................  .......        X   ........  Mr. Manzullo.......        X   ........  ........
Mr. Meeks.......................  .......        X   ........  Mr. Jones..........  ........        X   ........
Mr. Moore (KS)..................  .......        X   ........  Mrs. Biggert.......  ........  ........  ........
Mr. Capuano.....................  .......        X   ........  Mr. Shays..........  ........        X   ........
Mr. Hinojosa....................  .......        X   ........  Mr. Miller (CA)....        X   ........  ........
Mr. Clay........................  .......        X   ........  Mrs. Capito........  ........        X   ........
Mrs. McCarthy...................  .......        X   ........  Mr. Feeney.........        X   ........  ........
Mr. Baca........................  .......        X   ........  Mr. Hensarling.....        X   ........  ........
Mr. Lynch.......................  .......        X   ........  Mr. Garrett (NJ)...        X   ........  ........
Mr. Miller (NC).................  .......        X   ........  Ms. Brown-Waite            X   ........  ........
                                                                (FL).
Mr. Scott.......................  .......        X   ........  Mr. Barrett (SC)...        X   ........  ........
Mr. Green.......................  .......        X   ........  Mr. Gerlach........  ........  ........  ........
Mr. Cleaver.....................  .......        X   ........  Mr. Pearce.........        X   ........  ........
Ms. Bean........................  .......        X   ........  Mr. Neugebauer.....        X   ........  ........
Ms. Moore (WI)..................  .......        X   ........  Mr. Price (GA).....        X   ........  ........
Mr. Davis (TN)..................  .......        X   ........  Mr. Davis (KY).....        X   ........  ........
Mr. Sires.......................  .......        X   ........  Mr. McHenry........        X   ........  ........
Mr. Hodes.......................  .......        X   ........  Mr. Campbell.......        X   ........  ........
Mr. Ellison.....................  .......        X   ........  Mr. Putnam.........        X   ........  ........
Mr. Klein.......................  .......        X   ........  Mrs.Bachmann.......        X   ........  ........
Mr. Mahoney (FL)................  .......        X   ........  Mr. Roskam.........        X   ........  ........
Mr. Wilson......................  .......        X   ........  Mr. Marchant.......        X   ........  ........
Mr. Perlmutter..................  .......        X   ........  Mr. McCotter.......        X   ........  ........
Mr. Murphy......................  .......        X   ........  Mr. McCarthy.......        X   ........  ........
Mr. Donnelly....................  .......        X   ........
Mr. Wexler......................  .......        X   ........
Mr. Marshall....................  .......        X   ........
Mr. Boren.......................  .......        X   ........
----------------------------------------------------------------------------------------------------------------

    An amendment to the amendment in the nature of a substitute 
by Mr. McHenry, No. 1u, delaying effective date pending 
certification, was not agreed to by a record vote of 20 yeas 
and 44 nays (Record vote FC-79):

----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative       Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Frank.......................  .......        X   ........  Mr. Bachus.........  ........        X   ........
Mr. Kanjorski...................  .......        X   ........  Mr. Baker..........  ........  ........  ........
Ms. Waters......................  .......        X   ........  Ms. Pryce (OH).....  ........  ........  ........
Mrs. Maloney....................  .......        X   ........  Mr. Castle.........  ........        X   ........
Mr. Gutierrez...................  .......        X   ........  Mr. King (NY)......  ........        X   ........
Ms. Velazquez...................  .......        X   ........  Mr. Royce..........        X   ........  ........
Mr. Watt........................  .......        X   ........  Mr. Lucas..........        X   ........  ........
Mr. Ackerman....................  .......        X   ........  Mr. Paul...........  ........  ........  ........
Ms. Carson......................  .......  ........  ........  Mr. LaTourette.....  ........        X   ........
Mr. Sherman.....................  .......        X   ........  Mr. Manzullo.......        X   ........  ........
Mr. Meeks.......................  .......        X   ........  Mr. Jones..........  ........        X   ........
Mr. Moore (KS)..................  .......        X   ........  Mrs. Biggert.......  ........  ........  ........
Mr. Capuano.....................  .......        X   ........  Mr. Shays..........  ........        X   ........
Mr. Hinojosa....................  .......        X   ........  Mr. Miller (CA)....        X   ........  ........
Mr. Clay........................  .......        X   ........  Mrs. Capito........  ........        X   ........
Mrs. McCarthy...................  .......        X   ........  Mr. Feeney.........        X   ........  ........
Mr. Baca........................  .......        X   ........  Mr. Hensarling.....        X   ........  ........
Mr. Lynch.......................  .......        X   ........  Mr. Garrett (NJ)...        X   ........  ........
Mr. Miller (NC).................  .......        X   ........  Ms. Brown-Waite      ........        X   ........
                                                                (FL).
Mr. Scott.......................  .......        X   ........  Mr. Barrett (SC)...        X   ........  ........
Mr. Green.......................  .......        X   ........  Mr. Gerlach........  ........  ........  ........
Mr. Cleaver.....................  .......        X   ........  Mr. Pearce.........        X   ........  ........
Ms. Bean........................  .......        X   ........  Mr. Neugebauer.....        X   ........  ........
Ms. Moore (WI)..................  .......        X   ........  Mr. Price (GA).....        X   ........  ........
Mr. Davis (TN)..................  .......        X   ........  Mr. Davis (KY).....        X   ........  ........
Mr. Sires.......................  .......        X   ........  Mr. McHenry........        X   ........  ........
Mr. Hodes.......................  .......        X   ........  Mr. Campbell.......        X   ........  ........
Mr. Ellison.....................  .......        X   ........  Mr. Putnam.........        X   ........  ........
Mr. Klein.......................  .......        X   ........  Mrs. Bachmann......        X   ........  ........
Mr. Mahoney (FL)................  .......        X   ........  Mr. Roskam.........        X   ........  ........
Mr. Wilson......................  .......        X   ........  Mr. Marchant.......        X   ........  ........
Mr. Perlmutter..................  .......        X   ........  Mr. McCotter.......        X   ........  ........
Mr. Murphy......................  .......        X   ........  Mr. McCarthy.......        X   ........  ........
Mr. Donnelly....................  .......        X   ........
Mr. Wexler......................  .......        X   ........
Mr. Marshall....................  .......        X   ........
Mr. Boren.......................  .......        X   ........
----------------------------------------------------------------------------------------------------------------

    The following other amendments were also considered by the 
Committee:
    An amendment in the nature of a substitute by Mr. Frank 
(and Mr. Bachus, Mr. Miller (NC), Mr. Watt, Mrs. Biggert and 
Mrs. Capito), No. 1, manager's amendment, as amended, was 
agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Baker, No. 1a, regarding effect on state laws, was not 
agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Capuano, No. 1b, regarding notice to tenants, was not 
agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mrs. Biggert (and Mr. LaTourette and Mr. Castle), No. 1c, 
authorizing appropriations for mortgage fraud enforcement, was 
agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Clay, No. 1d, regarding HOEPA points and fees, was 
agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Green (and Mr. McHenry and Mr. Neugebauer), No. 1f, 
requiring disclosures, as amended by the amendment by Mr. Baca 
regarding enhanced mortgage loan disclosures, No. 1f(a), was 
agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Ms. Brown-Waite (and Mr. Garrett), No. 1g, regarding 
Veterans Affairs' loans, was agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Watt (and Mr. Miller (NC)), No. 1h, establishing an 
effective date, was agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Marchant, No. 1i, excepting single-family units, was not 
agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Sherman, No. 1j, exempting certain individuals and 
entities, was agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Miller (CA), No. 1k, regarding incentive compensation, 
was offered and withdrawn.
    An amendment to the amendment in the nature of a substitute 
by Mr. Miller (CA), No. 1l, dealing with high-cost mortgages, 
was offered and withdrawn.
    An amendment to the amendment in the nature of a substitute 
by Mr. Feeney, No. 1q, striking rescission provisions, was not 
agreed to by a voice vote.
    An amendment to the amendment in the nature of a substitute 
by Mr. Castle, No. 1t, regarding safe harbor, was offered and 
withdrawn.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held hearings and 
made findings that are reflected in 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 establishes the 
following performance related goals and objectives for this 
legislation:
    H.R. 3915, the Mortgage Reform and Anti-Predatory Lending 
Act of 2007, is intended to reform mortgage lending practices 
to avert a recurrence of the current situation of rising 
defaults and foreclosures, especially in the subprime market. 
As reported, H.R. 3915 establishes a Federal duty of care for 
mortgage originators; prohibits steering any consumer to a 
predatory mortgage and prime consumers to subprime mortgages; 
establishes a licensing and registration regime for loan 
originators, including brokers and bank loan officers; sets 
minimum standards for mortgages requiring that consumers must 
have a reasonable ability to repay and that mortgages must 
provide a net tangible benefit; attaches limited liability to 
those who securitize mortgage loans that violate the minimum 
standards; expands and enhances consumer protections for 
``high-cost loans'' under the Home Ownership and Equity 
Protection Act; requires additional disclosures to consumers; 
establishes within the Department of Housing and Urban 
Development an Office of Housing Counseling; and includes 
protections for renters of foreclosed properties.

   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 of the Director of the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act.

                        Committee Cost Estimate

    The Committee adopts as its own 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 Estimate

    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:

                                                  November 9, 2007.
Hon. Barney Frank,
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. 3915, the Mortgage 
Reform and Anti-Predatory Lending Act of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Susanne S. 
Mehlman and Kathleen Gramp (for federal costs), Mark Booth (for 
federal revenues), Elizabeth Cove (for the state and local 
impact), and Paige Piper/Bach (for the private-sector impact).
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.

H.R. 3915--Mortgage Reform and Anti-Predatory Lending Act of 2007

    Summary: H.R. 3915 would make numerous changes to federal 
laws that regulate mortgage practices with the aim of combating 
predatory lending practices and providing certain protections 
to borrowers and investors. Those changes include subjecting 
all mortgage originators to licensing and registration 
requirements, establishing minimum standards for creditors, and 
establishing various consumer protections, such as prohibiting 
excessive fees for certain types of mortgages.
    This legislation also would authorize the appropriation of 
$221 million over the 2008-2012 period for the Department of 
Housing and Urban Development (HUD) to support efforts to 
promote homeownership counseling and for the Department of 
Justice (DOJ) to support efforts to combat mortgage fraud. 
Furthermore, CBO estimates that $115 million would be required 
over the 2008-2012 period for HUD to establish an Office of 
Housing Counseling and support the development of regulations 
and provide monitoring and oversight of the Nationwide Mortgage 
Licensing System and Registry (NMLSR). CBO estimates that 
implementing H.R. 3915 would cost $316 million over the 2008-
2012 period, subject to the appropriation of the necessary 
amounts.
    H.R. 3915 would require loan originators to participate in 
a Nationwide Mortgage Licensing System and Registry that would 
be administered by nonfederal entities or HUD in coordination 
with the federal banking regulatory agencies. H.R. 3915 would 
set the standards for this system, require HUD to determine if 
state licensing procedures have met such standards, and 
authorize the registry administrators to assess fees (revenues) 
to cover the costs of maintaining and providing access to 
information from the NMLSR. In CBO's view, the cash flows of 
the NMLSR related to its regulatory and assessment authorities 
should appear in the federal budget because they would stem 
from an exercise of the sovereign power of the federal 
government. We expect that it would take about three months for 
those cash flows to begin. Under this legislation, CBO 
estimates that over the 2008-2012 period, direct spending would 
total $65 million and revenues would total $72 million. Over 
the 2008-2017 period, we estimate that direct spending would 
total $120 million and revenue collections would total $137 
million. Any costs incurred by federal banking regulators to 
issue regulations and coordinate with the NMLSR would affect 
net direct spending and revenues, but CBO estimates that the 
net impacts would be insignificant.
    H.R. 3915 contains several intergovernmental mandates as 
defined in the Unfunded Mandates Reform Act (UMRA). CBO 
estimates that the costs to state, local, and tribal 
governments of complying with the mandates would not exceed the 
annual threshold for intergovernmental mandates established in 
UMRA ($66 million in 2007, adjusted annually for inflation).
    H.R. 3915 would impose several private-sector mandates as 
defined in UMRA on the mortgage finance industry, by creating a 
licensing and registration system for mortgage loan 
originators, setting new mortgage origination standards, and 
establishing requirements for high-cost mortgages. The 
incremental costs to comply with those mandates are uncertain, 
and CBO cannot determine whether the aggregate direct cost of 
those mandates would exceed the annual threshold established in 
UMRA ($131 million in 2007, adjusted annually for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 3915 is shown in the following table. 
The costs of this legislation fall within budget functions 370 
(commerce and housing credit) and 750 (administration of 
justice).
    Basis of Estimate: For this estimate, CBO assumes that the 
bill will be enacted by the end of calendar year 2007. We also 
assume that the cash flows of the NMLSR would appear on the 
federal budget because of the governmental nature of its 
activities and the degree of governmental control over the 
registry system.

                                TABLE 1.--ESTIMATED BUDGETARY IMPACT OF H.R. 3915
----------------------------------------------------------------------------------------------------------------
                                                              By fiscal year, in millions of dollars--
                                                   -------------------------------------------------------------
                                                     2008    2009    2010    2011    2012   2008-2012  2008-2017
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorization Level.....................      74      76      75      75      30       330       n.a.
Estimated Outlays.................................      25      70      76      75      70       316       n.a.
 
                                               CHANGES IN REVENUES
 
Estimated Revenues................................      15      15      14      14      14        72        137
 
                                           CHANGES IN DIRECT SPENDING
 
Estimated Budget Authority........................      15      15      12      12      11        65        120
Estimated Outlays.................................      15      15      12      12      11        65       120
----------------------------------------------------------------------------------------------------------------
Note: n.a. = not applicable.

Spending subject to appropriation

    CBO estimates that implementing H.R. 3915 would cost $316 
million over the 2008-2012 period, subject to appropriation of 
the necessary amounts. Table 2 details the components of this 
estimated discretionary spending.
    Funding for the Department of Justice. Section 211 would 
authorize the appropriation of $32 million over the 2008-2012 
period for DOJ to support efforts to combat mortgage fraud. 
Most of this funding would be used to hire additional agents of 
the Federal Bureau of Investigation (FBI) and additional 
prosecutors with the offices ofthe United States Attorneys. 
Assuming that appropriations would be spread evenly over fiscal 
years 2008 through 2012, CBO estimates that enacting those 
provisions would cost $30 million over that period.
    Public Service Campaign, Grants for Housing Counseling, and 
Administrative Support for the Office of Counseling. This 
legislation would establish the Office of Housing Counseling 
within HUD to support various activities relating to 
homeownership and rental housing counseling. Section 403 would 
authorize the appropriation of $3 million over the 2008-2010 
period to support a national campaign to publicize the 
existence of counseling services for home buyers, homeowners, 
and renters. In addition, section 404 would authorize the 
appropriation of $45 million annually over the 2008-2011 period 
to provide grants to states, local governments, and nonprofit 
organizations to support counseling services. In total, CBO 
estimates that implementing those provisions would cost $176 
million over the 2008-2012 period.
    Furthermore, based on information from HUD, funds for 
additional personnel, contractors, and information technology 
would be required to run the Office of Housing Counseling. CBO 
estimates that support would cost $73 million over the 2008-
2012 period.
    Other Administrative Support. Based on information from 
HUD, CBO estimates that it would cost $37 million over the 
2008-2012 period to support the development of various 
regulations, mostly related to mortgage standards required 
under this legislation and the oversight and monitoring of the 
NMLSR.

Nationwide registry for licensing

    Background. Since 2004, the Conference of State Bank 
Supervisors (CSBS) and the American Association of Residential 
Mortgage Regulators (AARMR) have been developing a nationwide 
licensing system for the residential mortgage industry. The 
system, which is set to begin operations on January 2, 2008, 
will increase and centralize information about loan originators 
and will be avi1able to the public. As of October 2008, 
agencies in 37 states have signed statements of intent to 
participate in the nationwide system. Both the CSBS and AARMR 
anticipate that the remaining 13 states and the District of 
Columbia and Puerto Rico will eventually commit to 
participating in the system.
    Assuming participation by all the states and that the 
states meet the minimum standards established under H.R. 3915, 
CBO does not expect HUD to develop separate systems, though HUD 
would conduct some monitoring and oversight of the system.
    Enacting this legislation would impose a new requirement on 
loan originators to register with a nationwide registry and 
would authorize the assessment of fees for the cost of that 
registration. Although private entities are currently 
developing and maintaining a registry, participation in that 
system is voluntary. Under H.R. 3915, participation by loan 
originators is mandatory (i.e., a loan originator must register 
to be state-licensed), and HUD would have the authority to 
enforce that requirement. Thus, CBO expects that the NMLSR 
would be acting as an agent of the federal government; 
consequently, the cash flows associated with the NMLSR's 
regulatory and assessment authorities should be recorded in the 
federal budget.

     TABLE 2.--ESTIMATED EFFECTS OF H.R. 3915 ON SPENDING SUBJECT TO
                              APPROPRIATION
------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2008    2009    2010    2011    2012
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 
Funding for the Department of
 Justice:
    Authorization Level.........       7       7       6       6       6
    Estimated Outlays...........       4       7       7       6       6
Public Service Campaign:
    Authorization Level.........       3       0       0       0       0
    Estimated Outlays...........       1       2       0       0       0
Housing Counseling Grants:
    Authorization Level.........      45      45      45      45       0
    Estimated Outlays...........       5      38      45      45      40
Administrative Support for the
 Office of Counseling:
    Estimated Authorization           13      16      16      16      16
     Level......................
    Estimated Outlays...........      10      15      16      16      16
Other Administrative Support:
    Estimated Authorization            6       8       8       8       8
     Level......................
    Estimated Outlays...........       5       8       8       8       8
    Total Changes:
        Estimated Authorization       74      76      75      75      30
         Level..................
        Estimated Outlays.......      25      70      76      75     70
------------------------------------------------------------------------
a. H.R. 3915 also would require HUD to appoint an advisory committee to
  support the mission of the Office of Counseling. Members of the
  committee would not be paid, but would be reimbursed for any travel
  expenses. CBO estimates that such travel expenses would cost less than
  $500,000 annually.

    NMLSR Assessments. The bill would increase federal revenues 
by authorizing the NMLSR to collect assessments from loan 
originators (i.e., individual loan officers, branches of 
lending institutions, and lending companies). Based on 
information from the CSBS, CBO estimates that those individuals 
and entities would likely be charged an initial fee and an 
annual fee. Moreover, fees could be reduced over time as 
expenses decrease and more loan originators register with the 
system.
    Based on fee schedules for similar activities and assuming 
that more than 300,000 entities and individuals would register 
with the NMLSR over the next five years, CBO estimates that 
about $72 million in fees would be collected by the NMLSR over 
the 2008-2012 period. Over the 2008-2017 period, we estimate 
that about $137 million in fees would be collected.
    Funds collected through such assessments would be spent 
without further appropriation, and thus, the expenditures would 
be classified as direct spending. CBO estimates that the NMLSR 
would spend about $65 million over the 2008-2012 period and 
$120 million over the 2008-2017 period to develop and maintain 
the registry system. While CBO estimates a lag between the 
recording of federal revenues and spending, we estimate that 
over the long run, the net cash flows associated with the NMLSR 
would be insignificant.
    Penalties. Under this legislation, certain civil penalties 
(which are recorded as revenues) currently applicable under the 
Truth in Lending Act would be increased and new civil penalties 
would be created for violations under this bill. CBO estimates 
that any increase in revenues resulting from those civil 
penalties would not be significant.
    Spending by Federal Bank Regulators. H.R. 3915 also would 
direct federal bank regulators to issue new regulations and to 
work jointly with the NMLSR to register individuals associated 
with depository institutions who originate loans. According to 
agency officials, implementing this bill would have no 
significant effect on their workload or budgets. In addition, 
any additional direct spending by the Office of the Comptroller 
of the Currency, the Office of Thrift Supervision, and the 
National Credit Union Administration would be offset by income 
from annual fees covering their administrative expenses. 
Similarly, the FDIC would recover any added costs when it 
adjusts the insurance premiums paid by insured depository 
institutions. Budgetary effects of spending by the Federal 
Reserve are recorded as changes in revenues, but current law 
requires the Federal Reserve to recover direct and indirect 
costs incurred in providing such services. Thus, CBO estimates 
that the activities of the agencies that regulate banks would 
have no significant net effect on direct spending or revenues. 
Budgetary effects on the Federal Reserve are recorded as 
changes in revenues.
    Impact on State, local, and tribal governments: H.R. 3915 
contains intergovernmental mandates as defined in UMRA because 
it would impose new requirements on state regulators and would 
preempt state laws. Specifically, the bill would require states 
to ensure that mortgage originators who apply for state 
licenses or renewals meet minimum standards. According to 
industry sources and state banking and real estate agencies, in 
order to comply with those requirements, states would need to 
license employees of some financial institutions that are not 
currently required to be licensed under state law, perform 
ongoing administrative tasks related to the new mortgage 
licensing system, and train employees in federal mortgage law 
and the licensing system. The bill also would preempt state 
laws that allow individuals to seek compensation from entities 
that issue certain securities. CBO estimates that the cost to 
state and local governments of that preemption and the new 
requirements would average less than $500,000 annually per 
state; therefore, the total costs would not exceed the 
threshold established in UMRA ($66 million in 2007, adjusted 
annually for inflation). The bill would benefit state and local 
governments by authorizing grants to provide homeownership and 
rental counseling.
    Impact on the private sector: H.R. 3915 would impose 
several private-sector mandates as defined in UMRA on the 
mortgage finance industry, by creating a licensing and 
registration system for mortgage loan originators, setting new 
mortgage origination standards, and establishing requirements 
for high-cost mortgages. The incremental costs to comply those 
mandates are uncertain for several reasons. Many industry 
participants already comply with some of the bill's 
requirements. In addition, the cost of some of the requirements 
would depend on federal regulations to be issued under the 
bill. CBO does not have sufficient information about current 
business practices or how the standards in the bill would 
affect industry income. Consequently, CBO cannot determine 
whether the aggregate direct cost of those mandates would 
exceed the annual threshold established in UMRA ($131 million 
in 2007, adjusted annually for inflation).
    Estimate prepared by: Federal Spending: Susanne S. Mehlman 
and Kathleen Gramp; Federal Revenues: Mark Booth; Impact on 
State, Local, and Tribal Governments: Elizabeth Cove; Impact on 
the Private Sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                      Advisory Committee Statement

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

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds that the 
Constitutional Authority of Congress to enact this legislation 
is provided by Article 1, section 8, clause 1 (relating to the 
general welfare of the United States) and clause 3 (relating to 
the power to regulate interstate commerce).

                  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 section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 3915 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

             Section-by-Section Analysis of the Legislation

Section 1. Short Title; Table of Contents

    This section establishes the short title of the bill as the 
``Mortgage Reform and Anti-Predatory Lending Act of 2007'' (the 
Act).

             TITLE I--RESIDENTIAL MORTGAGE LOAN ORIGINATION

 Subtitle A--Licensing System for Residential Mortgage Loan Originators

Section 101. Purposes and methods for establishing a mortgage licensing 
        system and registry

    This section sets forth objectives for a Nationwide 
Mortgage Licensing System and Registry (NMLSR) for the 
residential mortgage industry to be established by the States 
through the Conference of State Bank Supervisors and the 
American Association of Residential Mortgage Regulators.

Section 102. Definitions

    This section establishes definitions for various terms for 
this subtitle, including: ``loan originator,'' ``loan processor 
or underwriter,'' ``nationwide mortgage licensing system and 
registry,'' ``registered loan originator,'' ``residential 
mortgage loan,'' ``State-licensed loan originator,'' and 
``unique identifier.''

Section 103. License or registration required

    This section provides that an individual may not engage in 
the business of a loan originator without obtaining and 
maintaining registration as a registered loan originator or a 
license and registration as a State-licensed loan originator, 
and obtaining a unique identifier, and makes clarifications 
regarding administrative and clerical workers, as well as loan 
processors and underwriters.

Section 104. State license and registration application and issuance

    This section provides that the applicant to any State for 
licensing and registration as a State-licensed loan originator 
has the obligation to furnish certain information to the NMLSR, 
including fingerprints and personal history and experience. 
Minimum standards for license issuance include no revocation of 
loan originator license in the past 5 years, no felony 
conviction in the past 7 years, demonstration of financial 
responsibility, completing pre-licensing education reviewed, 
approved, and published by the NMLSR (at least 20 hours), and 
passing a written test developed and administered by the NMLSR 
(at least 75% correct answers out of minimum 100 questions).

Section 105. Standards for State license renewal

    This section provides minimum standards for license renewal 
include the State-licensed loan originator continuing to meet 
the minimum standards for license issuance and satisfying 
continuing education requirements.

Section 106. System of registration administration by Federal banking 
        agencies

    This section provides that, within one year of the Act's 
enactment, the Federal banking agencies will jointly develop 
and maintain a system for registering the employees of banks 
and their subsidiaries as registered loan originators with the 
NMLSR, and will furnish or cause to be furnished to the NMLSR 
certain information including fingerprints and personal history 
and experience. Under this regime, the Federal banking 
agencies, at their discretion, may either develop a system to 
collect registration information from depository institutions 
and their subsidiary loan originators and furnish that 
information to the NMLSR, or the Federal banking agencies may 
arrange for the employee of the depository institution or its 
subsidiary to supply that information directly to the NMLSR. 
The Federal banking agencies, through the Federal Financial 
Institutions Examination Council, will coordinate with the 
NMLSR to establish a unique identifier for all registered loan 
originators.

Section 107. Secretary of Housing and Urban Development backup 
        authority to establish a loan originator licensing system

    This section provides that if a State does not have in 
place a system that meets the minimum standards set forth in 
this section for State-licensed loan originators, or does not 
participate in the NMLSR, within 1 year of enactment (2 years 
for those States with legislatures that meet biennially) or any 
time thereafter, the Secretary of Housing and Urban Development 
(Secretary) will establish a backup licensing system and 
maintain and administer a system of licensing and registering 
loan originators operating in such a State as State-licensed 
loan originators. The Secretary may grant an extension up to 6 
months to those States making a good faith effort to meet the 
minimum standards. A loan originator licensed by the Secretary 
can only use the license to originate loans in the State for 
which it was granted.

Section 108. Backup authority to establish a nationwide mortgage 
        licensing and registry system

    This section directs the Secretary to develop and maintain 
a system for registration and regulation of loan originators if 
it determines the NMLSR is failing to meet the requirements of 
the Act.

Section 109. Fees

    This section provides that the Federal banking agencies, 
the Secretary, and the NMLSR may charge reasonable fees to 
cover costs for maintaining and providing access to the NMLSR, 
to the extent such fees are not charged to the consumers for 
accessing the information.

Section 110. Background checks of loan originators

    This section provides that the Attorney General will 
provide access to all criminal history information to States 
for regulating State-licensed loan originators to the extent 
criminal background checks are required under State law for 
licensing loan originators. The Conference of State Bank 
Supervisors or a wholly owned subsidiary may be used as 
channeling agent of States for requesting and distributing 
information between the Department of Justice and the State 
agencies.

Section 111. Confidentiality of information

    This section provides that, except as otherwise provided, 
requirements under Federal or State privacy or confidentiality 
laws, and any privilege arising under Federal or State law, 
will continue to apply after information has been disclosed to 
the NMLSR or the Department of Housing and Urban Development 
(HUD) system. Such information may be shared with all State and 
Federal regulatory officials with mortgage industry oversight 
authority without loss of privilege or loss of confidentiality 
protections provided by such laws.

Section 112. Liability provisions

    This section provides that the Secretary or any State 
official or agency or organization serving as the administrator 
of the NMLSR or the HUD system, or any officer or employee 
thereof, will not be subject to any civil action for monetary 
damages for good-faith action or omission while acting within 
the scope of office or employment.

Section 113. HUD enforcement

    This section provides that if the Secretary establishes a 
backup licensing system pursuant to section 107, then the 
Secretary will have regulatory authority over the licensees of 
such backup licensing system (e.g., summons authority, 
examination authority, and other enforcement authority 
including the ability to issue cease-and-desist orders and to 
assess civil money penalties).

      Subtitle B--Residential Mortgage Loan Origination Standards

Section 121. Definitions

    This section establishes definitions for various terms, 
including: ``Federal banking agencies,'' ``mortgage 
originator,'' ``qualified nationwide registration regime,'' 
``qualifying state licensing law,'' ``residential mortgage 
loan,'' ``securitization vehicle,'' and ``securitizer.''

Section 122. Residential mortgage loan origination

    This section provides that all mortgage originators 
(including mortgage brokers and depository institutions that 
originate mortgages) will be subject to a Federal duty of care 
that requires (1) licensing and registration under State or 
Federal law (including subtitle A of title I of this Act), (2) 
diligently working to present the consumer with a range of 
residential mortgage loan products for which the consumer 
likely qualifies and are appropriate to the consumer's existing 
circumstances (i.e., consumer has reasonable ability to repay 
and receives net tangible benefit, and loan does not have 
predatory characteristics), (3) making full, complete, and 
timely disclosures to consumers, (4) certifying to creditors 
compliance with mortgage origination requirements under this 
section, and (5) including in all loan documents the unique 
identifier of the mortgage originator. Mortgage originators are 
not required, however, to present residential mortgage loan 
products of creditors that do not accept consumer referrals or 
applications from the mortgage originator, and creditors are 
not required to offer products that the creditor does not offer 
to the general public. The Act expressly does not create an 
agency or fiduciary relationship, but mortgage originators are 
free to become an agent or a fiduciary if they so desire. The 
Federal banking agencies, in consultation with the Secretary 
and the Federal Trade Commission (Commission), will jointly 
prescribe regulations to further define the Federal duty of 
care. The Federal banking agencies will prescribe regulations 
requiring depository institutions to establish procedures for 
monitoring compliance with the requirements of this section and 
the registration procedures of section 106 of the Act.

Section 123. Anti-steering

    This section provides that no mortgage originator can 
receive, and no person can pay, any incentive compensation 
(including yield spread premium) that is based on or varies 
with the terms of such loans (other than amount of principal) 
for loans that are not qualified mortgages (i.e., not prime 
loans). The Federal banking agencies, in consultation with the 
Secretary and the Commission, will jointly prescribe 
regulations to prohibit (1) mortgage originators from steering 
any consumer to a residential mortgage loan that the consumer 
lacks a reasonable ability to repay, that does not provide net 
tangible benefit, or that has predatory characteristics, (2) 
mortgage originators from steering any consumer from a 
qualified mortgage (prime loan) to a loan that is not a 
qualified mortgage, and (3) abusive or unfair lending practices 
that promote disparities among consumers of equal credit 
worthiness but of different race, ethnicity, gender, or age. 
However, nothing in the Act should be construed as limiting the 
ability of a mortgage originator to sell residential mortgage 
loans to subsequent purchasers, restricting a consumer's 
ability to finance origination fees if they were disclosed to 
the consumer and do not vary with the consumer's decision to 
finance such fees, or prohibiting incentive payments to a 
mortgage originator based on the number of loans originated.

Section 124. Liability

    This section provides that a cause of action will exist 
under section 130(a) and 130(b) of the Truth in Lending Act 
(TILA) for a mortgage originator's failure to comply with this 
section. The maximum liability of a mortgage originator for 
violation of this section will not exceed three times the total 
amount of mortgage originator fees, plus the consumer's costs 
including reasonable attorney's fees.

Section 125. Regulations

    This section provides that regulations under this title 
will be promulgated within 12 months of the enactment of the 
Act and take effect no later than 18 months after the enactment 
of the Act.

               TITLE II--MINIMUM STANDARDS FOR MORTGAGES

Section 201. Ability to Repay

    This section provides that 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 (including all applicable taxes, insurance, and 
assessments). The Federal banking agencies, in consultation 
with the Commission, will jointly prescribe regulations 
regarding this provision. A determination of reasonable ability 
to repay will be based on 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 real property securing the 
loan.

Section 202. Net Tangible Benefit for Refinancing of Residential 
        Mortgage Loans

    This section provides that no creditor may extend credit 
for refinancing 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. The refinanced loan will not 
be considered to provide net tangible benefit if the costs of 
the loan, including points, fees, and other charges, exceed the 
amount of newly advanced principal without any corresponding 
changes in the terms of the refinanced loan that are 
advantageous tothe consumer. The Federal banking agencies will 
jointly prescribe regulations further defining the term ``net tangible 
benefit.''

Section 203. Safe harbor and rebuttable presumption

    This section provides that a presumption can be made that 
the minimum standards (reasonable ability to repay and net 
tangible benefit) are met for ``qualified mortgages'' and 
``qualified safe harbor mortgages.'' Qualified mortgages are 
presumed to meet the minimum standards and this presumption may 
not be rebutted. For qualified safe harbor loans, the 
presumption may be rebutted only against creditors. Qualified 
mortgages are loans with annual percentage rates (APRs) that 
are not equal to or greater than 3 percent over comparable 
securities issued by the Secretary of Treasury (Treasuries) or 
175 basis points over the Federal Reserve Board's H.15 rate for 
first lien loans, and 5 percent over comparable Treasuries or 
375 basis points over the Federal Reserve Board's H.15 rate for 
non-first lien loans, or loans made or guaranteed by the 
Secretary of Veterans Affairs. Qualified safe harbor mortgages 
are loans with (1) documented consumer income, (2) underwriting 
process based on fully indexed rate (and taking into account 
taxes, insurance, and assessments), (3) no negative 
amortization, (4) other requirements that may be established by 
regulation, and (5) one of the following: (i) fixed payment for 
at least five years, (ii) for variable-rate loans, the APR 
varies based on a margin that is less than 3 percent over a 
single interest rate index, or (iii) the loan does not cause 
the consumer's total monthly debts, including amounts under the 
loan, to exceed a percentage (to be established by regulation) 
of monthly gross income.
    The Federal banking agencies may jointly prescribe 
regulations to revise, add to, or subtract from these safe 
harbor provisions to the extent necessary and appropriate to 
effectuate the purposes of this subsection, to prevent 
circumvention or evasion of this subsection, or to facilitate 
compliance with this subsection.

Section 204. Liability

    This section provides that a consumer has a cause of action 
against a creditor for rescission of the loan and the 
consumer's costs for a loan that violates the minimum standards 
for reasonable ability to repay or net tangible benefits as set 
forth by regulation. A creditor will not be liable for such 
rescission if the creditor provides a cure to make the loan 
conform to the minimum standards within 90 days of receiving 
notice from the consumer. In addition, for a loan that violates 
the minimum standards, a consumer has an individual cause of 
action against any assignee or securitizer for rescission of 
the loan and the consumer's costs. An assignee or securitizer 
will not be liable for a loan that violates the minimum 
standards if the assignee or securitizer: (1) provides a cure 
to make the loan conform to the minimum standards within 90 
days of receiving notice from the consumer, or (2) (a) has a 
policy against buying mortgage loans that are not qualified 
mortgages or qualified safe harbor mortgages and, in accordance 
with regulations that the Federal banking agencies and 
Securities and Exchange Commission will jointly prescribe, 
exercises reasonable due diligence to adhere to such policy, 
including through sampling, and (b) has obtained 
representations and warranties from the seller or assignor of 
the loan regarding not selling or assigning loans that violate 
the minimum standards and takes reasonable steps to obtain the 
benefit of such representations or warranties. If any creditor, 
assignee or securitizer and a consumer fail to agree on a cure, 
or if the consumer fails to accept a cure, the creditor, 
assignee, or securitizer may provide the cure and the consumer 
may challenge the adequacy of the cure within six months of the 
cure. If a creditor, assignee, or securitizer cannot provide 
rescission, they can provide the financial equivalent. 
Liability of a creditor, assignee, or securitizer will apply 
for three years after consummation of the loan or, for a 
variable rate loan or a negative amortization loan, the earlier 
of one year after the loan resets or six years after 
consummation of the loan. Liability will not apply to pools of 
loans, including the securitization vehicle, or investors in 
pools of loans. It is not intended that liability will apply to 
trustees or titleholders who in their capacity hold loans 
solely for the benefit of the securitization vehicle.

Section 205. Defense to foreclosure

    This section provides that, when the holder (including the 
securitization vehicle) of a residential mortgage loan or 
anyone acting on such holder's behalf initiates a judicial or 
non-judicial foreclosure, (1) a consumer who has a rescission 
right under this section may assert such right as a defense to 
foreclosure or counterclaim to foreclosure against the holder 
to forestall such foreclosure, or (2) if the foreclosure 
proceeding begins after the rescission right expires, the 
consumer may seek actual damages plus costs against the 
creditor or any assignee or securitizer. Such holder, anyone 
acting on behalf of such holder, or any other applicable third 
party may sell or assign a residential mortgage loan to a 
creditor, any assignee, or any securitizer, or their designee, 
to effect a rescission or a cure.

Section 206. Additional standards and requirements

    This section prohibits prepayment penalties on loans that 
are not qualified mortgages as defined in section 203 of the 
Act and requires that all remaining prepayment penalties expire 
three months before a loan resets.
    This section also provides that, in case of foreclosure, 
any successor in interest will take over the property subject 
to any bona fide lease made to bona fide tenant entered into 
before the notice of foreclosure. Bona fide tenants without a 
lease will receive at least a 90-day notice before being 
required to vacate. A lease or tenancy is bona fide if it is 
the result of arms-length transaction or if the rent is not 
substantially less than fair market rent.
    Single-premium credit insurance and mandatory arbitration 
on mortgage loans are prohibited. Securitizers must reserve the 
right in any document or contract establishing pools of loans 
to obtain access to such loans and to provide for and obtain a 
remedy under this title. A servicer of a residential mortgage 
loan must provide annual notice (or whenever there is change in 
ownership of the loan) to the consumer of the identity of the 
creditor or assignee who should be contacted concerning the 
consumer's rights with respect to the loan. Negative 
amortization loans to a first-time borrower are prohibited 
unless the creditor makes certain disclosures to the consumer 
and the consumer has received homeownership counseling from a 
HUD-certified organization or counselor.

Section 207. Rule of construction

    This section provides that, except as otherwise expressly 
provided, no provisions of the new TILA sections 129A and 129B 
added by the Act will be construed as superseding, repealing, 
or affecting any duty, right, obligation, privilege, or remedy 
of any person under any other provision of TILA or any other 
provision of Federal or State law.

Section 208. Effect on State laws

    This section provides that the provisions of section 204 of 
the Act will supersede any State law that provides additional 
remedies against any assignee, securitizer, or securitization 
vehicle, and the remedies in section 204 of the Act will 
constitute the sole remedies against any assignee, securitizer, 
or securitization vehicle for a violation of section 201 or 202 
of the Act or any other State law arising out of or relating to 
the specific subject matter of section 201 and 202 of the Act. 
No provision of this section will be construed as limiting the 
application of any State law against a creditor. Nor will any 
provision of this section be construed as limiting the 
application of any State law against any assignee, securitizer, 
or securitization vehicle that does not arise out of or relate 
to, or provide additional remedies in connection with, the 
specific subject matter of section 201 or 202 of the Act.

Section 209. Regulations

    This section provides that regulations under this title 
will be promulgated within 12 months of the enactment of the 
Act, and take effect no later than 18 months after the 
enactment of the Act.

Section 210. Amendments to civil liability provisions

    This section doubles the amount of certain statutory civil 
liability penalties currently applicable under TILA and extends 
the statute of limitations from one year to three years.

Section 211. Required disclosures

    This section provides additional required disclosures under 
TILA. A creditor must disclose the maximum amount of regular 
payment a consumer has to make on a variable rate or otherwise 
variable payment mortgage. For a residential mortgage loan with 
an escrow or impound account for the payment of taxes, 
insurance, and assessments, a creditor must disclose that 
mortgage payments will be increased to cover taxes and 
insurance and the monthly dollar amount a consumer will pay to 
cover taxes and insurance in the first year of the mortgage. 
For a variable rate residential mortgage with an escrow or 
impound account, a creditor is required to disclose (1) the 
amount of initial monthly payment for principal and interest; 
(2) the amount of initial monthly payment including the amount 
deposited in an escrow or impound to pay for taxes, insurance, 
and assessments; (3) the amount of the fully indexed monthly 
payment for principal and interest; and (4) the amount of fully 
indexed monthly payment deposited in an escrow or impound to 
pay for taxes, insurance, and assessments. A creditor must also 
disclose the aggregate amount of settlement charges, the amount 
of charges included in a mortgage, the amount of charges a 
consumer must pay at closing, the approximate amount of the 
wholesale rate of funds, the aggregate amount of other fees or 
required payments, the aggregate amount of fees paid to a 
mortgage originator, the amount of fees paid directly by a 
consumer, and any additional amounts received by a mortgage 
originator from a creditor based on the interest rate of the 
loan. Required disclosures must be made at the earlier of the 
extension of credit or three days before the closing.
    A creditor must provide a consumer who applies for variable 
rate or variable payment mortgage with a warning that payments 
will vary based on interest rate changes. A creditor is also 
required to disclose that a consumer is not required to 
consummate a mortgage transaction merely because a consumer 
received disclosures or signed a loan application.

Section 212. Authorization of appropriations

    This section provides that for fiscal years 2008, 2009, 
2010, 2011, and 2012, there are authorized to be appropriated 
to the Attorney General a total of (1) $31,250,000 to support 
the employment of 30 additional FBI agents 2 additional 
dedicated prosecutors at the Department of Justice to 
coordinate prosecution of mortgage fraud efforts with the 
offices of the United States Attorneys, and (2) $750,000 to 
support the operations of interagency task forces of the FBI in 
the areas with the 15 highest concentration of mortgage fraud.

Section 213. Effective date

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

                     TITLE III--HIGH-COST MORTGAGES

Section 301. Definitions relating to high-cost mortgages

    This section expands the scope of the Home Ownership and 
Equity Protection Act (HOEPA) to also cover purchase money 
loans and open-end loans. The section also codifies the 
existing Federal Reserve standard for the APR trigger which is 
set at 8 percent above comparable Treasuries for first 
mortgages and Treasuries plus 10 percent for subordinate 
mortgages. The points and fees trigger (total points and fees 
payable in connection with the loan transaction) is lowered 
from 8 percent to 5 percent for most loans. The points and fees 
trigger stays at 8 percent for loans secured by a dwelling that 
is personal property. A third trigger is established for loans 
with prepayment penalties that exceed 2 percent or 36 months 
duration. The definition of points and fees is expanded to 
include all compensation paid directly or indirectly by a 
consumer or creditor to a mortgage broker from any source 
(including table-funded transactions), certain insurance 
premiums, prepayment penalty charges under the loan, and 
prepayment penalties actually charged in a refinance by the 
original creditor or the original creditor's affiliate. Certain 
bona fide discount points and prepayment penalties (up to two 
points for near-market interest rate loans) are excluded from 
the determination of the amount of points and fees that trigger 
HOEPA protections.

Section 302. Amendments to existing requirements for certain mortgages

    This section prohibits prepayment penalties on HOEPA loans 
with principal amounts below the Federal Housing Administration 
loan limit for a given geographical area. Balloon payments on 
high-cost mortgages are prohibited unless the payment schedule 
is adjusted to the seasonal or irregular income of the 
consumer. Additional high-cost mortgage ``ability to repay'' 
protections are provided. A creditor may not extend credit to a 
consumer under a high-cost mortgage unless a reasonable 
creditor would believe at the time the mortgage is closed that 
the consumer will be able to make the scheduled payments 
associated with the mortgage, based on a consideration of 
current and expected income, current obligations, employment 
status, and other financial resources other than equity in the 
residence. There will be a rebuttable presumption of ability to 
repay if, at the time the high-cost mortgage is consummated, 
the consumer's total monthly debts, including amounts under the 
mortgage, do not exceed 50 percent of monthlygross income as 
verified by tax returns, payroll receipts, or other third-party income 
verification.

Section 303. Additional Requirements for Certain Mortgages

    This section prohibits creditors from (1) encouraging that 
borrowers default on an existing loan when refinancing such 
existing loan with a high-cost mortgage, (2) charging multiple 
late fees for a high-cost mortgage on the same delinquent 
payment and caps any given late fee at 4 percent, (3) 
unilaterally accelerating a high-cost mortgage, (4) directly or 
indirectly financing points and fees for high-cost mortgages 
(the restriction applies to prepayment penalties if the 
creditor or an affiliate is the noteholder of the note being 
refinanced), (5) structuring a high-cost mortgage to evade 
HOEPA protections, (6) modifying or deferring fees unless they 
can be proven beneficial to the consumer, (7) providing a high-
cost mortgage to a consumer unless the creditor has received a 
certification that the consumer received pre-loan counseling 
from a HUD-approved entity, and (8) knowingly or intentionally 
engaging in flipping in connection with a high-cost mortgage. 
Creditors and servicers are required to disclose and provide 
free access to payoff amounts.
    It is intended that the counseling certification by a HUD-
approved entity will indicate that the consumer received 
counseling, and thus received a written document (i.e., 
certificate) stating the consumer received counseling. This 
certificate and certification are intended as evidence that the 
borrower has received counseling and not that the HUD-approved 
entity has made a determination on the suitability or 
affordability of the loan.

Section 304. Amendment to Provision Governing Correction of Errors

    This section permits creditors to correct non-bona fide 
errors within 30 days of the loan closing and prior to the 
institution of any action. Creditors are permitted to correct 
bona fide errors within 60 days of the creditors' discovery or 
receipt of notification and prior to the institution of any 
action. A creditor may correct an error by making the loan 
satisfy the applicable requirements of TILA (including 
requirements of the Act) or, in the case of a high-cost 
mortgage, changing the terms of the loan so the loan is no 
longer a high-cost mortgage.

Section 305. Regulations

    This section requires the Federal Reserve Board to 
implement regulations under this title within six months of 
enactment of the Act.

Section 306. Effective date

    The amendments made by this title will be effective upon 
enactment and will apply to high-cost mortgages consummated on 
or after that date.

                 TITLE IV--OFFICE OF HOUSING COUNSELING

Section 401. Short title

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

Section 402. Establishment of Office of Housing Counseling

    This section establishes the Office of Housing Counseling 
under the Office of the Secretary, headed by a Director of 
Housing Counseling (Director) appointed by the Secretary. The 
Director will be responsible for all homeownership and rental 
housing counseling programs for HUD, and will establish, 
coordinate and administer all regulations, requirements, 
standards, and performance measures under the programs that 
relate to housing counseling, homeownership counseling, 
mortgage-related counseling, and rental housing counseling. The 
Director shall establish rules for (1) counseling procedures, 
(2) carrying out all other related functions, including 
establishing a toll-free number, (3) information booklets, (4) 
carrying out the certification of counseling service providers, 
(5) providing assistance in the provision of counseling 
services, (6) carrying out functions the Secretary deems 
appropriate with regard to unscrupulous lending practices in 
the home mortgage business, (7) support the advisory committee 
created under this act, (8) collaborate with community-based 
organizations, and (9) provide for building capacity to provide 
housing counseling services in areas that lack sufficient 
services. The Secretary shall appoint an advisory committee 
composed of no more than 12 individuals representing all 
aspects of the mortgage and real estate industry, including 
consumers. Advisory committee members appointed by the 
Secretary will serve 3-year terms, except that initially, four 
will be appointed for 1-year terms and four will be appointed 
for 2-year terms. The Secretary may reappoint members at his 
discretion. Members will not be paid, but may receive travel 
expenses. The advisory committee has no role in reviewing or 
awarding housing counseling grants. Counseling services will 
cover the entire process of homeownership, including 
refinancing and foreclosure.

Section 403. Counseling procedures

    This section directs the Secretary to establish, 
coordinate, and monitor all HUD counseling procedures, 
including requirements, standards, and performance measures 
that relate to homeownership and rental housing. 
``Homeownership counseling'' is defined as counseling related 
to homeownership and residential mortgage loans. ``Rental 
housing counseling'' is defined as counseling related to rental 
of residential property, which may include counseling regarding 
future homeownership opportunities and providing referral for 
renters and prospective renters to entities providing 
counseling. The Secretary shall establish standards for 
materials and forms used by counseling service providers, and 
provide for the certification of various computer software 
programs for consumers to use in evaluating different 
residential mortgage loan proposals. The mortgage software 
system shall take into account (1) the consumer's financial 
situation and the cost of maintaining a home, including 
insurance, taxes, and utilities, (2) the amount of time the 
consumer expects to remain in the home or expected time to 
maturity of the loan, and (3) any other factors to assist the 
consumer in making choices during the loan application process. 
The certified software programs shall be used to supplement, 
not replace, housing counseling, and the software programs 
initially will be used only in connection with the assistance 
of certified housing counselors. The Secretary shall develop, 
implement, and conduct national public service multimedia 
campaigns to make potentially vulnerable consumers aware of the 
existence of homeownership counseling. Appropriations not to 
exceed $3 million are authorized for national public service 
multimedia campaigns for fiscal years 2008, 2009, and 2010. The 
Secretary shall provide advice and technical assistance to 
States, units of local government, and non-profit organizations 
regarding provisions of counseling services.

Section 404. Grants for housing counseling assistance

    This section directs the Secretary to make financial 
assistance available for homeownership or rental counseling to 
States, units of local government, and non-profit 
organizations. The Secretary shall establish standards and 
guidelines for assistance eligibility. Appropriations of $45 
million are authorized for each of fiscal years 2008 through 
2011 for the operations of the Office of Housing Counseling; 
homeownership and rental counseling assistance grants; and the 
establishment of materials and forms standards, computer 
software certification, and the national public service 
multimedia campaigns created in section 403 of the Act.

Section 405. Requirements to use HUD-certified counselors under HUD 
        programs

    This section requires any homeownership counseling or 
rental housing counseling administered by HUD to be provided 
solely by organizations or counselors certified by the 
Secretary.

Section 406. Study of defaults and foreclosures

    This section directs the Secretary to submit to Congress 
not later than 12 months after the enactment of the Act a 
preliminary report on the root causes of default and 
foreclosure of home loans and the role of escrow accounts in 
helping prime and nonprime borrowers to avoid defaults and 
foreclosures. No later than 24 months after the enactment of 
the Act, the Secretary will submit a final report regarding the 
results of the study, which will 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.

Section 407. Definitions for counseling-related programs

    This section provides definitions of ``nonprofit 
organization,'' ``State,'' and ``unit of general local 
government.''

Section 408. Updating and simplification of mortgage information 
        booklet

    This section directs the Secretary to prepare a booklet at 
least once every 5 years to help consumers applying for 
Federally related mortgage loans to understand the nature and 
costs of real estate settlement services. The Secretary must 
include specific topics in the information booklet in plain and 
understandable language, including explanation of (1) costs 
incident to real estate settlement or Federally related 
mortgage loan (including at a minimum balloon payments, 
prepayment penalties, and trade-off between closing costs and 
the interest rate over the life of the loan); (2) the uniform 
settlement statement; (3) unfair lending practices and 
unreasonable or unnecessary charges to be avoided by the 
prospective buyer with respect to a real estate settlement; (4) 
questions that the consumer should ask about a loan; (5) the 
right of rescission; (6) variable rate mortgages; (7) home 
equity line of credit; (8) the availability and the value of 
homeownership counseling services; (9) escrow accounts; (10) 
available choices for providers of incidental services; (11) 
the buyer's responsibilities, liabilities, and obligations; 
(12) appraisals; and (13) HUD brochure regarding loan fraud.

 TITLE V--MORTGAGE DISCLOSURES UNDER REAL ESTATE SETTLEMENT PROCEDURES 
                              ACT OF 1974

Section 501. Universal mortgage disclosure in good faith estimate of 
        settlement services costs

    This section provides additional disclosures in a good 
faith estimate (GFE) under the Real Estate Settlement 
Procedures Act. A GFE must include the loan amount, whether the 
loan is a fixed- or variable rate loan, the estimated interest 
rate, the total estimated monthly payment, the rate lock 
period, any prepayment penalty, any balloon payment, the total 
estimated settlement charge, and the total estimated cash 
needed at closing.
    The Secretary, in consultation with the Secretary of 
Veterans Affairs, the Federal Deposit Insurance Corporation, 
and the Director of the Office of Thrift Supervision, shall 
develop and prescribe a standard form for GFE disclosures be 
used in all transactions in the United States that involve 
Federally related mortgage loans.

         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, existing law in which no change is 
proposed is shown in roman):

                          TRUTH IN LENDING ACT

                TITLE I--CONSUMER CREDIT COST DISCLOSURE

Sec. 101. Short title

  This title may be cited as the Truth in Lending Act.

           *       *       *       *       *       *       *

Sec. 103. Definitions and rules of construction

  (a) * * *

           *       *       *       *       *       *       *

  (f) The term ``creditor'' refers only to a person who both 
(1) regularly extends, whether in connection with loans, sales 
of property or services, or otherwise, consumer credit which is 
payable by agreement in more than four installments or for 
which the payment of a finance charge is or may be required, 
and (2) is the person to whom the debt arising from the 
consumer credit transaction is initially payable on the face of 
the evidence of indebtedness or, if there is no such evidence 
of indebtedness, by agreement. Notwithstanding the preceding 
sentence, in the case of an open-end credit plan involving a 
credit card, the card issuer and any person who honors the 
credit card and offers a discount which is a finance charge are 
creditors. For the purpose of the requirements imposed under 
chapter 4 and sections 127(a)(5), 127(a)(6), 127(a)(7), 
127(b)(1), 127(b)(2), 127(b)(3), 127(b)(8), and 127(b)(10) of 
chapter 2 of this title, the term ``creditor'' shall also 
include card issuers whether or not the amount due is payable 
by agreement in more than four installments or the payment of a 
finance charge is or may be required, and the Board shall, by 
regulation, apply these requirements to such card issuers, to 
the extent appropriate, even though the requirements are by 
their terms applicable only to creditors offering open-end 
credit plans. [Any person who originates 2 or more mortgages 
referred to in subsection (aa) in any 12-month period or any 
person who originates 1 or more such mortgages through a 
mortgage broker shall be considered to be a creditor for 
purposes of this title.] Any person who originates or brokers 2 
or more mortgages referred to in subsection (aa) in any 12-
month period, any person who originates 1 or more such 
mortgages through a mortgage broker in any 12 month period, or, 
in connection with a table funding transaction of such a 
mortgage, any person to whom the obligation is initially 
assigned at or after settlement shall be considered to be a 
creditor for purposes of this title.

           *       *       *       *       *       *       *

  [(aa)(1) A mortgage referred to in this subsection means a 
consumer credit transaction that is secured by the consumer's 
principal dwelling, other than a residential mortgage 
transaction, a reverse mortgage transaction, or a transaction 
under an open end credit plan, if--
          [(A) the annual percentage rate at consummation of 
        the transaction will exceed by more than 10 percentage 
        points the yield on Treasury securities having 
        comparable periods of maturity on the fifteenth day of 
        the month immediately preceding the month in which the 
        application for the extension of credit is received by 
        the creditor; or
          [(B) the total points and fees payable by the 
        consumer at or before closing will exceed the greater 
        of--
                  [(i) 8 percent of the total loan amount; or
                  [(ii) $400.]
  (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 8 percentage points the 
                                yield on Treasury securities 
                                having comparable periods of 
                                maturity on the 15th day of the 
                                month immediately preceding the 
                                month in which the application 
                                for the extension of credit is 
                                received by the creditor; or
                                  (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 10 
                                percentage points the yield on 
                                Treasury securities having 
                                comparable periods of maturity 
                                on the 15th day of the month 
                                immediately preceding the month 
                                in which the application for 
                                the extension of credit is 
                                received by the creditor;
                          (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 (8 percent if 
                                the dwelling is personal 
                                property) 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
                          (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.
  (2)(A) * * *
  [(B) An increase or decrease under subparagraph (A) may not 
result in the number of percentage points referred to in 
subparagraph (A) being--
          [(i) less that 8 percentage points; or
          [(ii) greater than 12 percentage points.]
                  (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.

           *       *       *       *       *       *       *

  (4) For purposes of paragraph (1)(B), points and fees shall 
include--
          (A) all items included in the finance charge, except 
        interest or the time-price differential;
          [(B) all compensation paid to mortgage brokers;]
                  (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;
          (C) each of the charges listed in section 106(e) 
        (except an escrow for future payment of taxes), 
        unless--
                  (i) the charge is reasonable;
                  (ii) the creditor receives no direct or 
                indirect compensation 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; and
                  (iii) the charge is paid to a third party 
                unaffiliated with the creditor[; and], except 
                as provided for in clause (ii);
                  (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
          [(D)] (G) such other charges as the Board determines 
        to be appropriate.
          (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.
          [(5)] (6) This subsection shall not be construed to 
        limit the rate of interest or the finance charge that a 
        person may charge a consumer for any extension of 
        credit.

           *       *       *       *       *       *       *

  (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--
                          (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, for direct 
                        or indirect compensation or gain, or in 
                        the expectation of direct or indirect 
                        compensation or gain;
                  (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); and
                  (C) does not include any person who is not 
                otherwise described in subparagraph (A) or (B) 
                and who performs purely administrative or 
                clerical tasks on behalf of a person who is 
                described in any such subparagraph.
          (4) Nationwide mortgage licensing system and 
        registry.--The term ``Nationwide Mortgage Licensing 
        System and Registry'' has the same meaning as in 
        section 102(5) of the Mortgage Reform and Anti-
        Predatory Lending Act of 2007.
          (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.
          (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, or special 
        purpose entity 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.
  (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 
paragraphs (1) or (4) of the following paragraphs, but not 
both, may be excluded:
          (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 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.
                  (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 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.
          (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.
          (4) Allowance of conventional prepayment penalty.--
        Subsection (aa)(1)(4)(E) shall not apply so as to 
        include a prepayment penalty or fee that is authorized 
        by law other than this title and may be imposed 
        pursuant to the terms of a high-cost mortgage (or other 
        consumer credit transaction secured by the consumer's 
        principal dwelling) if--
                  (A) the annual percentage rate applicable 
                with respect to such mortgage or transaction 
                (as determined for purposes of subsection 
                (aa)(1)(A)(i))--
                          (i) in the case of a first mortgage 
                        on the consumer's principal dwelling, 
                        does not exceed by more than 2 
                        percentage points the yield on Treasury 
                        securities having comparable periods of 
                        maturity on the 15th day of the month 
                        immediately preceding the month in 
                        which the application for the extension 
                        of credit is received by the creditor; 
                        or
                          (ii) in the case of a subordinate or 
                        junior mortgage on the consumer's 
                        principal dwelling, does not exceed by 
                        more than 4 percentage points the yield 
                        on such Treasury securities; and
                  (B) the total amount of any prepayment fees 
                or penalties permitted under the terms of the 
                high-cost mortgage or transaction does not 
                exceed 2 percent of the amount prepaid.

Sec. 108. Administrative enforcement

  (a) Compliance with the requirements imposed under this title 
shall be enforced under
          (1) * * *

           *       *       *       *       *       *       *

          (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.

           *       *       *       *       *       *       *

                     CHAPTER 2--CREDIT TRANSACTIONS

Sec.
121. General requirement of disclosure.
     * * * * * * *
129A.Residential mortgage loan origination.
129B.Minimum standards for residential mortgage loans.

           *       *       *       *       *       *       *

Sec. 128. Consumer credit not under open end credit plans

  (a) For each consumer credit transaction other than under an 
open end credit plan, the creditor shall disclose each of the 
following items, to the extent applicable:
          (1) * * *

           *       *       *       *       *       *       *

          (16) In the case of an extension of credit that is 
        secured by the dwelling of a consumer, under which the 
        annual rate of interest is variable, or with respect to 
        which the regular payments may otherwise be variable, 
        in addition to the other disclosures required under 
        this subsection, the disclosures provided under this 
        subsection shall state the maximum amount of the 
        regular required payments on the loan, based on the 
        maximum interest rate allowed, introduced with the 
        following language in conspicuous type size and format: 
        ``Your payment can go as high as $__'', the blank to be 
        filled in with the maximum possible payment amount.
          (17) In the case of a residential mortgage loan for 
        which an escrow or impound account will be established 
        for the payment of all applicable taxes, insurance, and 
        assessments, the following statement: ``Your payments 
        will be increased to cover taxes and insurance. In the 
        first year, you will pay an additional $__ [insert the 
        amount of the monthly payment to the account] every 
        month to cover the costs of taxes and insurance.''.
          (18) 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.
          (19) 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.
          (20) In the case of a residential mortgage loan, the 
        aggregate amount of fees paid to the mortgage 
        originator in connection with the loan, the amount of 
        such fees paid directly by the consumer, and any 
        additional amount received by the originator from the 
        creditor based on the interest rate of the loan.
  (b)(1) * * *
  [(2) In the]
          (2) Mortgage disclosures.--
                  (A) In general.--In the case of [a 
                residential mortgage transaction, as defined in 
                section 103(w)] any extension of credit that is 
                secured by the dwelling of a consumer, which is 
                also subject to the Real Estate Settlement 
                Procedures Act, good faith estimates of the 
                disclosures required under subsection (a) 
                [shall be made in accordance with regulations 
                of the Board under section 121(c) before the 
                credit is extended, or] shall be delivered or 
                placed in the mail not later than three 
                business days after the creditor receives the 
                consumer's written application, whichever is 
                earlier. [If the disclosure statement furnished 
                within three days of the written application 
                contains an annual percentage rate which is 
                subsequently rendered inaccurate within the 
                meaning of section 107(c), the creditor shall 
                furnish another statement at the time of 
                settlement or consummation.]
                  (B) Statement and timing of disclosures.--In 
                the case of an extension of credit that is 
                secured by the dwelling of a consumer, in 
                addition to the other disclosures required by 
                subsection (a), the disclosures provided under 
                this paragraph shall state in conspicuous type 
                size and format, the following: ``You are not 
                required to complete this agreement merely 
                because you have received these disclosures or 
                signed a loan application.''.
                          (i) state in conspicuous type size 
                        and format, the following: ``You are 
                        not required to complete this agreement 
                        merely because you have received these 
                        disclosures or signed a loan 
                        application.''; and
                          (ii) be furnished to the borrower not 
                        later than 7 business days before the 
                        date of consummation of the 
                        transaction, subject to subparagraph 
                        (D).
                  (C) Variable rates or payment schedules.--In 
                the case of an extension of credit that is 
                secured by the dwelling of a consumer, under 
                which the annual rate of interest is variable, 
                or with respect to which the regular payments 
                may otherwise be variable, in addition to the 
                other disclosures required by subsection (a), 
                the disclosures provided under this paragraph 
                shall label the payment schedule as follows: 
                ``Payment Schedule: Payments Will Vary Based on 
                Interest Rate Changes.''.
                  (D) Updating apr.--In any case in which the 
                disclosure statement provided 7 business days 
                before the date of consummation of the 
                transaction contains an annual percentage rate 
                of interest that is no longer accurate, as 
                determined under section 107(c), the creditor 
                shall furnish an additional, corrected 
                statement to the borrower, not later than 3 
                business days before the date of consummation 
                of the transaction.

           *       *       *       *       *       *       *

          (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-day period beginning on 
                the date the application for the loan from a 
                consumer is received by the creditor.

           *       *       *       *       *       *       *

SEC. 129. REQUIREMENTS FOR CERTAIN MORTGAGES.

  (a) * * *

           *       *       *       *       *       *       *

  (c) No Prepayment Penalty.--
          (1) * * *
          (2) Exception.--Notwithstanding paragraph (1), a 
        mortgage referred to in section 103(aa) may contain a 
        prepayment penalty (including terms calculating a 
        refund by a method that is not prohibited under section 
        933(b) of the Housing and Community Development Act of 
        1992 for the transaction in question) if--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) the penalty does not apply after the end 
                of the 5-year period beginning on the date on 
                which the mortgage is consummated; [and]
                  (D) the amount of the principal obligation of 
                the mortgage exceeds the maximum principal 
                obligation limitation (for the applicable size 
                residence) under section 203(b)(2) of the 
                National Housing Act for the area in which the 
                residence subject to the mortgage is located; 
                and
                  [(D)] (E) the penalty is not prohibited under 
                other applicable law.

           *       *       *       *       *       *       *

  [(e) No Balloon Payments.--A mortgage referred to in section 
103(aa) having a term of less than 5 years may not include 
terms under which the aggregate amount of the regular periodic 
payments would not fully amortize the outstanding principal 
balance.]
  (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.

           *       *       *       *       *       *       *

  (h) Prohibition on Extending Credit Without Regard to 
[Payment Ability of Consumer.--A creditor shall not] Payment 
Ability of Consumer.--
          (1) Pattern or practice.--
                  (A) In general.--A creditor shall not engage 
                in a pattern or practice of extending credit to 
                consumers under mortgages referred to in 
                section 103(aa) based on the consumers' 
                collateral without regard to the consumers' 
                repayment ability, including the consumers' 
                current and expected income, current 
                obligations, and employment.
                  (B) Presumption of violation.--There shall be 
                a presumption that a creditor has violated this 
                subsection if the creditor engages in a pattern 
                or practice of making high-cost mortgages 
                without verifying or documenting the repayment 
                ability of consumers with respect to such 
                mortgages.
          (2) Prohibition on extending credit without regard to 
        payment ability of consumer.--
                  (A) In general.--A creditor may not extend 
                credit to a consumer under a high-cost mortgage 
                unless a reasonable creditor would believe at 
                the time the mortgage is closed that the 
                consumer or consumers that are residing or will 
                reside in the residence subject to the mortgage 
                will be able to make the scheduled payments 
                associated with the mortgage, based upon a 
                consideration of current and expected income, 
                current obligations, employment status, and 
                other financial resources, other than equity in 
                the residence.
                  (B) Presumption of ability.--For purposes of 
                this subsection, there shall be a rebuttable 
                presumption that a consumer is able to make the 
                scheduled payments to repay the obligation if, 
                at the time the high-cost mortgage is 
                consummated, the consumer's total monthly 
                debts, including amounts under the mortgage, do 
                not exceed 50 percent of his or her monthly 
                gross income as verified by tax returns, 
                payroll receipts, or other third-party income 
                verification.

           *       *       *       *       *       *       *

  (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.
  [(j)] (n) Consequence of Failure To Comply.--Any mortgage 
that contains a provision prohibited by this section shall be 
deemed a failure to deliver the material disclosures required 
under this title, for the purpose of section 125.
  [(k)] (o) Definition.--For purposes of this section, the term 
``affiliate'' has the same meaning as in section 2(k) of the 
Bank Holding Company Act of 1956.
  [(l)] (p) Discretionary Regulatory Authority of Board.--
          (1) * * *

           *       *       *       *       *       *       *

  (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.
  (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.
  (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.
  (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 Secretary of Housing and Urban 
        Development may prescribe such regulations as the 
        Secretary determines to be appropriate to carry out the 
        requirements of paragraph (1).
  (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, tangible net benefit 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.
          (3) Tangible net benefit.--The Board may prescribe 
        regulations, in the discretion of the Board, defining 
        the term ``tangible net benefit'' for purposes of this 
        subsection.

           *       *       *       *       *       *       *

Sec. 129A. Residential mortgage loan origination

  (a) 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, registered, and, when 
                required, licensed as a mortgage originator in 
                accordance with applicable State or Federal law 
                including subtitle A of title I of the Mortgage 
                Reform and Anti-Predatory Lending Act of 2007;
                  (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;
                  (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 the unique identifier of the 
                originator provided by the Nationwide Mortgage 
                Licensing System and Registry on all loan 
                documents.
          (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 receives a net 
                        tangible benefit (as determined in 
                        accordance with regulations prescribed 
                        under section 129B(a)); and
                          (ii) the loan does not have predatory 
                        characteristics or effects (such as 
                        equity stripping and excessive fees and 
                        abusive terms) as determined in 
                        accordance with regulations prescribed 
                        under paragraph (4).
          (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 
                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 106 of the Mortgage Reform 
        and Anti-Predatory Lending Act of 2007.
  (b) Prohibition on Steering Incentives.--
          (1) In general.--No mortgage originator may receive 
        from any person, and no person may pay to any mortgage 
        originator, directly or indirectly, any incentive 
        compensation (including yield spread premium) that is 
        based on, or varies with, the terms (other than the 
        amount of principal) of any loan that is not a 
        qualified mortgage (as defined in section 129B(c)(3)).
          (2) Anti-steering 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;
                          (ii) does not provide the consumer 
                        with a net tangible benefit; 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 
                129B(c)(3)) to a residential mortgage loan that 
                is not a qualified mortgage; and
                  (C) abusive or unfair lending practices that 
                promote disparities among consumers of equal 
                credit worthiness but of different race, 
                ethnicity, gender, or age.
          (3) Rules of construction.--No provision of this 
        subsection shall be construed as--
                  (A) limiting or affecting the ability of a 
                mortgage originator to sell residential 
                mortgage loans to subsequent purchasers;
                  (B) restricting a consumer's ability to 
                finance origination fees to the extent that 
                such fees were fully disclosed to the consumer 
                earlier in the application process and do not 
                vary based on the terms of the loan or the 
                consumer's decision about whether to finance 
                such fees; or
                  (C) prohibiting incentive payments to a 
                mortgage originator based on the number of 
                residential mortgage loans originated within a 
                specified period of time.
  (c) 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 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. 129B. 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 be based on 
        consideration of the consumer's credit history, current 
        income, expected income the consumer is reasonably 
        assured of receiving, current obligations, debt-to-
        income ratio, employment status, and other financial 
        resources other than the consumer's equity in the 
        dwelling or real property that secures repayment of the 
        loan.
          (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 
                take into consideration 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 
                take into consideration 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) 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.
  (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 or a qualified safe harbor 
        mortgage.
          (2) Rebuttable presumption.--Any presumption 
        established under paragraph (1) with respect to any 
        residential mortgage loan shall be rebuttable only--
                  (A) against the creditor of such loan; and
                  (B) if such loan is a qualified safe harbor 
                mortgage.
          (3) Definitions.--For purposes of this section the 
        following definitions shall apply:
                  (A) Most recent conventional mortgage rate.--
                The term ``most recent conventional mortgage 
                rate'' means the contract interest rate on 
                commitments for fixed-rate first mortgages most 
                recently published in the Federal Reserve 
                Statistical Release on selected interest rates 
                (daily or weekly), and commonly referred to as 
                the H.15 release (or any successor 
                publication), in the week preceding a date of 
                determination for purposes of applying this 
                subsection.
                  (B) Qualified mortgage.--The term ``qualified 
                mortgage'' means--
                          (i) any residential mortgage loan 
                        that constitutes a first lien on the 
                        dwelling or real property securing the 
                        loan and either--
                                  (I) has an annual percentage 
                                rate that does not equal or 
                                exceed the yield on securities 
                                issued by the Secretary of the 
                                Treasury under chapter 31 of 
                                title 31, United States Code, 
                                that bear comparable periods of 
                                maturity by more than 3 
                                percentage points; or
                                  (II) has an annual percentage 
                                rate that does not equal or 
                                exceed the most recent 
                                conventional mortgage rate, or 
                                such other annual percentage 
                                rate as may be established by 
                                regulation under paragraph (6), 
                                by more than 175 basis points;
                          (ii) any residential mortgage loan 
                        that is not the first lien on the 
                        dwelling or real property securing the 
                        loan and either--
                                  (I) has an annual percentage 
                                rate that does not equal or 
                                exceed the yield on securities 
                                issued by the Secretary of the 
                                Treasury under chapter 31 of 
                                title 31, United States Code, 
                                that bear comparable periods of 
                                maturity by more than 5 
                                percentage points; or
                                  (II) has an annual percentage 
                                rate that does not equal or 
                                exceed the most recent 
                                conventional mortgage rate, or 
                                such other annual percentage 
                                rate as may be established by 
                                regulation under paragraph (6), 
                                by more than 375 basis points; 
                                and
                          (iii) a loan made or guaranteed by 
                        the Secretary of Veterans Affairs.
                  (C) Qualified safe harbor mortgage.--The term 
                ``qualified safe harbor mortgage'' means any 
                residential mortgage loan--
                          (i) for which the income and 
                        financial resources of the consumer are 
                        verified and documented;
                          (ii) for which the residential 
                        mortgage loan underwriting process is 
                        based on the fully-indexed rate, and 
                        takes into account all applicable 
                        taxes, insurance, and assessments;
                          (iii) which does not provide for a 
                        repayment schedule that results in 
                        negative amortization at any time;
                          (iv) meets such other requirements as 
                        may be established by regulation; and
                          (v) for which any of the following 
                        factors apply with respect to such 
                        loan:
                                  (I) The periodic payment 
                                amount for principal and 
                                interest are fixed for a 
                                minimum of 5 years under the 
                                terms of the loan.
                                  (II) In the case of a 
                                variable rate loan, the annual 
                                percentage rate varies based on 
                                a margin that is less than 3 
                                percent over a single generally 
                                accepted interest rate index 
                                that is the basis for 
                                determining the rate of 
                                interest for the mortgage.
                                  (III) The loan does not cause 
                                the consumer's total monthly 
                                debts, including amounts under 
                                the loan, to exceed a 
                                percentage established by 
                                regulation of his or her 
                                monthly gross income or such 
                                other maximum percentage of 
                                such income as may be 
                                prescribed by regulation under 
                                paragraph (6).
          (4) Determination of comparison to treasury 
        securities.--
                  (A) In general.--Without regard to whether a 
                residential mortgage loan is subject to or 
                reportable under the Home Mortgage Disclosure 
                Act of 1975 and subject to subparagraph (B), 
                the difference between the annual percentage 
                rate of such loan and the yield on securities 
                issued by the Secretary of the Treasury under 
                chapter 31 of title 31, United States Code, 
                having comparable periods of maturity shall be 
                determined using the same procedures and 
                methods of calculation applicable to loans that 
                are subject to the reporting requirements under 
                the Home Mortgage Disclosure Act of 1975.
                  (B) Date of determination of yield.--The 
                yield on the securities referred to in 
                subparagraph (A) shall be determined, for 
                purposes of such subparagraph and paragraph (3) 
                with respect to any residential mortgage loan, 
                as of the 15th day of the month preceding the 
                month in which a completed application is 
                submitted for such loan.
          (5) APR in case of introductory offer.--For purposes 
        of making a determination of whether a residential 
        mortgage loan that provides for a fixed interest rate 
        for an introductory period and then resets or adjusts 
        to a variable rate is a qualified mortgage, the 
        determination of the annual percentage rate, as 
        determined in accordance with regulations prescribed by 
        the Board under section 107, shall be based on the 
        greater of the introductory rate and the fully indexed 
        rate of interest.
          (6) 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.--The 
                Federal banking agencies may jointly prescribe 
                regulations that revise, add to, or subtract 
                from the criteria that define a qualified 
                mortgage and a qualified safe harbor mortgage 
                to the extent necessary and appropriate to 
                effectuate the purposes of this subsection, to 
                prevent circumvention or evasion of this 
                subsection, or to facilitate compliance with 
                this subsection.
          (7) Rule of construction.--No provision of this 
        subsection may be construed as implying that a 
        residential mortgage loan may be presumed to violate 
        subsection (a) or (b) if such loan is not a qualified 
        mortgage or a qualified safe harbor mortgage.
  (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 (7), a civil action 
                may be maintained against a creditor for a 
                violation of subsection (a) or (b) with respect 
                to a residential mortgage loan for the 
                rescission of the loan, and such additional 
                costs as the obligor may have incurred as a 
                result of the violation and in connection with 
                obtaining a rescission of the loan, including a 
                reasonable attorney's fee.
                  (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 shall be 
        liable under paragraph (2) with respect to such loan 
        if--
                  (A) 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); or
                  (B) each of the following conditions are met:
                          (i) The assignee or securitizer--
                                  (I) has a policy against 
                                buying residential mortgage 
                                loans other than qualified 
                                mortgages or qualified safe 
                                harbor mortgages (as defined in 
                                subsection (c));
                                  (II) the policy is intended 
                                to verify seller or assignor 
                                compliance with the 
                                representations and warranties 
                                required under clause (ii); and
                                  (III) in accordance with 
                                regulations which the Federal 
                                banking agencies and the 
                                Securities and Exchange 
                                Commission shall jointly 
                                prescribe, exercises reasonable 
                                due diligence to adhere to such 
                                policy in purchasing 
                                residential mortgage loans, 
                                including through adequate, 
                                thorough, and consistently 
                                applied sampling procedures.
                  (ii) The contract under which such assignee 
                or securitizer acquired the residential 
                mortgage loan from a seller or assignor of the 
                loan contains representations and warranties 
                that the seller or assignor--
                                  (I) is not selling or 
                                assigning any residential 
                                mortgage loan which is not a 
                                qualified mortgage or a 
                                qualified safe harbor mortgage; 
                                or
                                  (II) is a beneficiary of a 
                                representation and warranty 
                                from a previous seller or 
                                assignor to that effect,
                        and the assignee or securitizer in good 
                        faith takes reasonable steps to obtain 
                        the benefit of such representation or 
                        warranty.
          (4) 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 would have 
        satisfied the requirements of subsection (a) and (b) if 
        the loan had contained such terms as of the origination 
        of the loan.
          (5) 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).
          (6) Inability to provide rescission.--If a creditor, 
        assignee, or securitizer cannot provide 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.
          (7) 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).
          (8) 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.
          (9) 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) 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), 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.
  (f) Prohibition on Certain Prepayment Penalties.--
          (1) Prohibited on certain loans.--A residential 
        mortgage loan that is not 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.
          (2) 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.
  (g) 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 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.
  (h) 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.
  (i) Duty of Securitizer to Retain Access to Loans.--Any 
securitizer shall reserve the right and preserve an ability, in 
any document or contract establishing any pool of assets that 
includes any residential mortgage loan--
          (1) to identify and obtain access to any such loan in 
        the pool; and
          (2) to provide for and obtain a remedy under this 
        title for the obligor under any such loan.
  (j) Effect of Foreclosure on Preexisting Lease.--
          (1) In general.--In the case of any foreclosure on 
        any dwelling or residential real property securing an 
        extension of credit made under a contract entered into 
        after the date of the enactment of the Mortgage Reform 
        and Anti-Predatory Lending Act of 2007, any successor 
        in interest in such property pursuant to the 
        foreclosure shall assume such interest subject to--
                  (A) any bona fide lease made to a bona fide 
                tenant entered into before the notice of 
                foreclosure; and
                  (B) the rights of any bona fide tenant 
                without a lease or with a lease terminable at 
                will under State law and the provision, by the 
                successor in interest, of a notice to vacate to 
                the tenant at least 90 days before the 
                effective date of the notice.
          (2) Bona fide lease or tenancy.--For purposes of this 
        section, a lease or tenancy shall be considered bona 
        fide only if--
                  (A) the lease or tenancy was the result of an 
                arms-length transaction; or
                  (B) the lease or tenancy requires the tenant 
                to pay rent that is not substantially less than 
                fair market rent for the property.
  (k) Mortgages with Negative Amortization.--No creditor may 
extend credit to a first-time 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) the consumer 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.
  (l) Annual Contact Information.--At least once annually and 
whenever there is a change in ownership of a residential 
mortgage loan, the servicer with respect to a residential 
mortgage loan shall provide a written notice to the consumer 
identifying the name of the creditor or any assignee or 
securitizer who should be contacted by the consumer for any 
reason concerning the consumer's rights with respect to the 
loan.

Sec. 130. Civil liability

  (a) Except as otherwise provided in this section, any 
creditor who fails to comply with any requirement imposed under 
this chapter, including any requirement under section 125, or 
chapter 4 or 5 of this title with respect to any person is 
liable to such person in an amount equal to the sum of--
          (1) * * *
          (2)(A)(i) in the case of an individual action twice 
        the amount of any finance charge in connection with the 
        transaction, (ii) in the case of an individual action 
        relating to a consumer lease under chapter 5 of this 
        title, 25 per centum of the total amount of monthly 
        payments under the lease, except that the liability 
        under this subparagraph shall not be less than [$100] 
        $200 nor greater than [$1,000] $2,000, or (iii) in the 
        case of an individual action relating to a credit 
        transaction not under an open end credit plan that is 
        secured by real property or a dwelling, not less than 
        [$200] $400 or greater than [$2,000] $4,000; or
          (B) in the case of a class action, such amount as the 
        court may allow, except that as to each member of the 
        class no minimum recovery shall be applicable, and the 
        total recovery under this subparagraph in any class 
        action or series of class actions arising out of the 
        same failure to comply by the same creditor shall not 
        be more than the lesser of [$500,000] $1,000,000 or 1 
        per centum of the net worth of the creditor;

           *       *       *       *       *       *       *

  [(b) A creditor or assignee has no liability under this 
section or section 108 or section 112 for any failure to comply 
with any requirement imposed under this chapter or chapter 5, 
if within sixty days after discovering an error, whether 
pursuant to a final written examination report or notice issued 
under section 108(e)(1) or through the creditor's or assignee's 
own procedures, and prior to the institution of an action under 
this section or the receipt of written notice of the error from 
the obligor, the creditor or assignee notifies the person 
concerned of the error and makes whatever adjustments in the 
appropriate account are necessary to assure that the person 
will not be required to pay an amount in excess of the charge 
actually disclosed, or the dollar equivalent of the annual 
percentage rate actually disclosed, whichever is lower.]
  (b) Correction of Errors.--A creditor has no liability under 
this section or section 108 or 112 for any failure to comply 
with any requirement imposed under this chapter or chapter 5, 
if--
          (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.

           *       *       *       *       *       *       *

  (e) [Any action] Except as provided in the subsequent 
sentence, any action under this section may be brought in any 
United States district court, or in any other court of 
competent juridisdiction, within one year from the date of the 
occurrence of the violation. 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. This 
subsection does not bar a person from asserting a violation of 
this title in an action to collect the debt which was brought 
more than one year from the date of the occurrence of the 
violation as a matter of defense by recoupment or set-off in 
such action, except as otherwise provided by State law. An 
action to enforce a violation of section 129 may also be 
brought by the appropriate State attorney general in any 
appropriate United States district court, or any other court of 
competent jurisdiction, not later than 3 years after the date 
on which the violation occurs. The State attorney general shall 
provide prior written notice of any such civil action to the 
Federal agency responsible for enforcement under section 108 
and shall provide the agency with a copy of the complaint. If 
prior notice is not feasible, the State attorney general shall 
provide notice to such agency immediately upon instituting the 
action. The Federal agency may--
          (1) intervene in the action;
          (2) upon intervening--
                  (A) remove the action to the appropriate 
                United States district court, if it was not 
                originally brought there; and
                  (B) be heard on all matters arising in the 
                action; and
          (3) file a petition for appeal.

           *       *       *       *       *       *       *

                              ----------                              

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ACT

           *       *       *       *       *       *       *

             UNDER SECRETARY AND OTHER OFFICERS AND OFFICES

  Sec. 4. (a) * * *

           *       *       *       *       *       *       *

  (g) Office of Housing Counseling.--
          (1) Establishment.--There is established, in the 
        Office of the Secretary, 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 the Secretary. Such position shall be a 
        career-reserved position in the Senior Executive 
        Service.
          (3) Functions.--
                  (A) In general.--The Director shall have 
                ultimate responsibility within the Department, 
                except for the Secretary, for all activities 
                and matters relating to homeownership 
                counseling and rental housing counseling, 
                including--
                          (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) carrying out section 5 of the 
                        Real Estate Settlement Procedures Act 
                        of 1974 (12 U.S.C. 2604) for home 
                        buying information booklets prepared 
                        pursuant to such section;
                          (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 all aspects of the mortgage and real 
                estate industry, including consumers.
                  (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.

           *       *       *       *       *       *       *

                              ----------                              

HOUSING AND URBAN DEVELOPMENT ACT OF 1968

           *       *       *       *       *       *       *

 TECHNICAL ASSISTANCE, COUNSELING TO TENANTS AND HOMEOWNERS, AND LOANS 
            TO SPONSORS OF LOW- AND MODERATE-INCOME HOUSING

  Sec. 106. (a)(1) * * *

           *       *       *       *       *       *       *

  (4) Homeownership and rental counseling assistance.--
          (A) In general.--The Secretary shall make financial 
        assistance available under this paragraph to States, 
        units of general local governments, and nonprofit 
        organizations providing homeownership or rental 
        counseling (as such terms are defined in subsection 
        (g)(1)).
          (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.
          (C) Distribution.--Assistance made available under 
        this paragraph shall be distributed in a manner that 
        encourages efficient and successful counseling 
        programs.
          (D) Authorization of appropriations.--There are 
        authorized to be appropriated $45,000,000 for each of 
        fiscal years 2008 through 2011 for--
                  (i) the operations of the Office of Housing 
                Counseling of the Department of Housing and 
                Urban Development;
                  (ii) the responsibilities of the Secretary 
                under paragraphs (2) through (5) of subsection 
                (g); and
                  (iii) assistance pursuant to this paragraph 
                for entities providing homeownership and rental 
                counseling.

           *       *       *       *       *       *       *

  (c) Grants for Homeownership Counseling Organizations.--
          (1) * * *

           *       *       *       *       *       *       *

          (5) Notification of availability of homeownership 
        counseling.--
                  (A) Notification of availability of 
                homeownership counseling.--
                          (i) * * *
                          (ii) Content.--Notification under 
                        this subparagraph shall--
                                  (I) * * *

           *       *       *       *       *       *       *

                                  (III) notify the homeowner or 
                                mortgage applicant of the 
                                availability of homeownership 
                                counseling provided by 
                                nonprofit organizations 
                                approved by the Secretary and 
                                experienced in the provision of 
                                homeownership counseling, or 
                                provide the toll-free telephone 
                                number described in 
                                subparagraph (D)(i); [and]
                                  (IV) notify the homeowner by 
                                a statement or notice, written 
                                in plain English by the 
                                Secretary of Housing and Urban 
                                Development, in consultation 
                                with the Secretary of Defense 
                                and the Secretary of the 
                                Treasury, explaining the 
                                mortgage and foreclosure rights 
                                of servicemembers, and the 
                                dependents of such 
                                servicemembers, under the 
                                Servicemembers Civil Relief Act 
                                (50 U.S.C. App. 501 et seq.), 
                                including the toll-free 
                                military one source number to 
                                call if servicemembers, or the 
                                dependents of such 
                                servicemembers, require further 
                                assistance[.]; and
                                  (V) notify the housing or 
                                mortgage applicant of the 
                                availability of mortgage 
                                software systems provided 
                                pursuant to subsection (g)(3).

           *       *       *       *       *       *       *

  (e) Certification.--
          [(1) Requirement for assistance.--An organization may 
        not receive assistance for counseling activities under 
        subsection (a)(1)(iii), (a)(2), (c), or (d), unless the 
        organization provides such counseling, to the extent 
        practicable, by individuals who have been certified by 
        the Secretary under this subsection as competent to 
        provide such counseling.]
          (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) Standards and examination.--The Secretary shall, 
        by regulation, establish standards and procedures for 
        testing and certifying counselors and for certifying 
        organizations. Such standards and procedures shall 
        require [for certification], for certification of an 
        organization, that each individual through which the 
        organization provides counseling shall demonstrate, 
        and, for certification of an individual, that the 
        individual shall demonstrate, by written examination 
        (as provided under subsection (f)(4)), competence to 
        provide counseling in each of the following areas:
                  (A) * * *

           *       *       *       *       *       *       *

          (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).
          [(3)] (5) Encouragement.--The Secretary shall 
        encourage organizations engaged in providing 
        homeownership and rental counseling that do not receive 
        assistance under this section to employ organizations 
        and individuals to provide such counseling who are 
        certified under this subsection or meet the 
        certification standards established under this 
        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));
                                  (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 
        conjunction with the advisory committee established 
        under subsection (g)(4) of the Department of Housing 
        and Urban Development Act, shall establish standards 
        for materials and forms to be used, as appropriate, by 
        organizations providing homeownership counseling 
        services, including any recipients of assistance 
        pursuant to subsection (a)(4).
          (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;
                          (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.
          (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, 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 web site 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 2008, 2009, and 2010, for the develop, 
                implement, and conduct of national public 
                service multimedia campaigns under this 
                paragraph.
          (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, and other potentially vulnerable 
        consumers), regarding home mortgages, mortgage 
        refinancing, home equity loans, and home repair loans.
  (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.

           *       *       *       *       *       *       *

                              ----------                              

REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974

           *       *       *       *       *       *       *

               [SPECIAL] HOME BUYING INFORMATION BOOKLETS

  Sec. 5. [(a) The Secretary shall prepare and distribute 
booklets to help persons borrowing money to finance the 
purchase of residential real estate better to understand the 
nature and costs of real estate settlement services. The 
Secretary shall distribute such booklets to all lenders which 
make federally related mortgage loans.
  [(b) 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 
clear and concise language--
          [(1) a description and explanation of the nature and 
        purpose of each cost incident to a real estate 
        settlement;
          [(2) an explanation and sample of the standard real 
        estate settlement form developed and prescribed under 
        section 4;
          [(3) a description and explanation of the nature and 
        purpose of escrow accounts when used in connection with 
        loans secured by residential real estate;
          [(4) an explanation of the choices available to 
        buyers of residential real estate in selecting persons 
        to provide necessary services incident to a real estate 
        settlement; and
          [(5) an explanation of the unfair practices and 
        unreasonable or unnecessary charges to be avoided by 
        the prospective buyer with respect to a real estate 
        settlement.
Such booklets shall take into consideration differences in real 
estate settlement procedures which may exist among the several 
States and territories of the United States and among separate 
political subdivisions within the same State and territory.]
  (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 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.
  (c) Each lender shall include with the booklet a good faith 
estimate of the amount or range of charges for specific 
settlement services the borrower is likely to incur in 
connection with the settlement as prescribed by the Secretary. 
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. Each such good faith estimate shall include 
the disclosure required under subsection (f) in the form 
prescribed by the Secretary pursuant to such subsection, except 
that if the Secretary at any time issues any regulations 
requiring the use of a standard or uniform form or statement in 
providing the good faith estimate required under this 
subsection and prescribing such standard or uniform form or 
statement, such disclosure shall not be required after the 
effective date of such regulations.
  (d) Each lender referred to in subsection (a) shall provide 
the booklet described in such subsection to each person from 
whom it receives or for whom it prepares a written application 
to borrow money to finance the purchase of residential real 
estate. The lender shall provide the HUD-issued booklet in the 
version that is most appropriate for the person receiving it. 
Such booklet shall be provided by delivering it or placing it 
in the mail not later than 3 business days after the lender 
receives the application, but no booklet need be provided if 
the lender denies the application for credit before the end of 
the 3-day period.

           *       *       *       *       *       *       *

  (f) Universal Mortgage Disclosure Requirement for Good Faith 
Estimates.--
          (1) Disclosure.--The disclosure required under this 
        subsection is a written statement regarding the 
        federally related mortgage loan for which the good 
        faith estimate under subsection (c) is made, that 
        consists of the following statements, appropriately and 
        in good faith completed by the lender in accordance 
        with the terms of the federally related mortgage loan 
        involved in the settlement:
                  (A) ``Your Loan Amount will be'' and 
                ``$____'', each statement appearing in a 
                separate column of the disclosure.
                  (B) ``Your Loan is'', ``A Fixed Rate Loan'', 
                and ``An Adjustable Rate Loan '', each 
                statement appearing in a separate column and 
                each of the last two such statements preceded 
                by a checkbox.
                  (C) ``Your Loan Term is'', ``___ years'', and 
                ``___ years'', each statement appearing in a 
                separate column, and the second such statement 
                shall appear in the same column as the 
                statement required by subparagraph (B) 
                regarding fixed rate loans and the third such 
                statement shall appear in the same column as 
                the statement required by subparagraph (B) 
                regarding adjustable rate loans;
                  (D) ``Your Estimated Interest Rate (APR) 
                is'', ``___%'', and ``___% initially, then it 
                will adjust. In ___ months, Your rate may 
                adjust to a maximum of ___%'', each statement 
                appearing in a separate column, the second such 
                statement shall appear in the same column as 
                the statement required by subparagraph (B) 
                regarding fixed rate loans and the third such 
                statement shall appear in the same column as 
                the statement required by subparagraph (B) 
                regarding adjustable rate loans, and the blanks 
                relating to estimated interest rate shall be 
                completed by the lender using an annual 
                percentage rate determined in accordance with 
                the Truth in Lending Act.
                  (E) ``Your Total Estimated Monthly Payment 
                (Including loan Principal and Interest, and 
                property Taxes (based on current rates) and 
                Insurance (PITI)) is'', ``$___ which represents 
                ___% of Your estimated monthly income'', and 
                ``$___ which represents ___% of Your estimated 
                monthly income. When Your interest rate 
                initially adjusts, Your maximum monthly payment 
                may be as high as $___ which represents ___% of 
                Your estimated monthly income'', each statement 
                appearing in a separate column, and the second 
                such statement shall appear in the same column 
                as the statement required by subparagraph (B) 
                regarding fixed rate loans and the third such 
                statement shall appear in the same column as 
                the statement required by subparagraph (B) 
                regarding adjustable rate loans.
                  (F) ``Your Rate Lock Period is'' and ``___ 
                days. After You lock into Your interest rate, 
                You must go to settlement within this number of 
                days to be guaranteed this interest rate.'', 
                each statement appearing in a separate column.
                  (G) ``Does Your loan have a prepayment 
                penalty?'', ``YES, Your maximum prepayment 
                penalty is $___'', and ``NO'', the first such 
                statement and the last two such statements 
                appearing in a separate column, and each of the 
                last two such statements preceded by a 
                checkbox.
                  (H) ``Does Your loan have a balloon 
                payment?'', ``YES, Your balloon payment of $___ 
                is due in ___ months'', and ``NO'', the first 
                such statement and the last two such statements 
                appearing in a separate column, and each of the 
                last two such statements preceded by a 
                checkbox.
                  (I) ``Your Total Estimated Settlement Charges 
                Will be $___ (a)'' and ``Your Total Estimated 
                Down Payment will be $___ (b)'', each statement 
                appearing in a separate column.
                  (J) ``Your Total Estimated Cash Needed at 
                Closing Will Be'' and ``$___ (a+b)'', each 
                statement appearing in a separate column.
                  (K) ``This represents a simple summary of 
                Your Good Faith Estimate (GFE). To understand 
                the terms of Your loan, You must see disclosure 
                forms and the Truth in Lending Act.'', such 
                statement appearing directly below the entirety 
                of the remainder of the disclosure.
          (2) Standard form.--
                  (A) Development and use.--The Secretary, in 
                consultation with the Secretary of Veterans 
                Affairs, the Federal Deposit Insurance 
                Corporation, and the Director of the Office of 
                Thrift Supervision, shall develop and prescribe 
                a standard form for the disclosure required 
                under this subsection, which shall be used 
                without variation in all transactions in the 
                United States that involve federally related 
                mortgage loans.
                  (B) Appearance.--The standard form developed 
                pursuant to this paragraph shall--
                          (i) set forth each statement required 
                        under a separate subparagraph under 
                        paragraph (1) on a separate row of the 
                        disclosure;
                          (ii) be set forth in 8-point type;
                          (iii) be not more than 6 inches in 
                        width or 3.5 inches in height;
                          (iv) include such boldface type and 
                        shading as the Secretary considers 
                        appropriate;
                          (v) include such parenthetical 
                        statements directing the borrower to 
                        the terms of the loan (such as ``see 
                        terms'') as the Secretary considers 
                        appropriate, in such places as the 
                        Secretary considers appropriate; and
                          (vi) be located in the upper one-
                        third of the first page of the good 
                        faith estimate required under 
                        subsection (c) in a manner that allows 
                        the identity, address, phone number, 
                        and other relevant information of the 
                        lender, the identity, address, phone 
                        number, and other relevant information 
                        of the borrower, and the address of the 
                        property for which the federally 
                        related mortgage loan is to be made, to 
                        be located above the standard form.

           *       *       *       *       *       *       *

                            ADDITIONAL VIEWS

    The undersigned Members of Committee on Financial Services 
Committee acknowledge the significant work that the Chairman, 
the Ranking Member, and other Members and staff have done to 
address some of H.R. 3951's most problematic provisions.
    However, we continue to have very serious concerns about 
the bill, even as revised, and believe that it will hurt rather 
than help the consumers for which it is intended to provide 
relief. Never before have we adopted such far-reaching 
government restrictions and limitations on loan terms and 
products and underwriting decisions in the private market, that 
affect the ability of thousands of this country's borrowers to 
obtain a mortgage loan to finance or refinance their home. 
While the bill's breadth will affect the mortgage markets 
serving all segments of our society, its negative impact on the 
availability and affordability of credit to those borrowers, 
including minority borrowers, with blemished credit histories, 
will be most dire.
    American consumers must be treated fairly when obtaining 
mortgage loans and the mortgage crisis clearly revealed 
organizational weaknesses in the mortgage finance system. These 
should be addressed by fostering greater understanding by 
borrowers of loan choices, by improving the regulation of and 
public knowledge of loan originators, and by ensuring that 
those persons involved in offering and making loans have a 
stake in the performance of the loans. But consumers are better 
off if lenders retain the freedom to offer and consumers have 
the freedom to choose from the widest range of financial 
products and options. We are committed to improving the 
mortgage process to empower consumers to make sound choices 
among these competing options. H.R. 3915, however, will 
drastically limit options for consumers, precisely at a time 
when the markets are already tightening, by imposing stringent 
restrictions, many of which are subjective, on loans that may 
be made, and creating severe liability for any lender that 
makes a loan that might be viewed as outside of those 
restrictions.
    Among our major specific concerns with H.R. 3915 are the 
following:
    Highly Subjective Duties and Standards. The bill creates 
federal duties for loan originators that are highly subjective, 
and thus difficult to define for purposes of compliance and 
potential liability. We remain concerned that any federal duty 
requiring a loan originator to identify loan products that are 
``appropriate'' for the consumer, including those having a 
``net tangible benefit,'' necessitate a determination whether 
the loan is suitable for the borrower. This type of standard 
can always be second-guessed, and should be determined by the 
borrower, after disclosure of the loan terms, not by the 
originator who is not the agent of the borrower. Even with 
regulations providing further clarity on terms such as loans 
with ``predatory characteristics (such as equity stripping, 
excessive fees, and abusive terms),'' the bill will 
understandably make lenders and assignees highly skittish about 
making or buying loans other than traditional loans to the most 
qualified customers. The accommodation of subprime borrowers 
through flexible underwriting will be sharply curtailed, to the 
detriment of many borrowers who, experience has shown, can and 
do repay their loans.
    It has been noted that some states, such as North Carolina, 
have a ``net tangible benefit'' test in their high cost loan 
law and it has been suggested that this has not resulted in a 
reduction in loans. While there are conflicting studies 
regarding the impact on credit availability of the North 
Carolina law, the reason there have been few challenges under 
that law's net tangible benefit test is because of the 
unavailability of attorney's fees in actions brought by 
borrowers who choose not to accept the lender's previous offer 
to cure. H.R. 3915 does not have such a provision which would 
disallow attorney's fees in a borrower action. The full impact 
of other states' laws has yet to be felt. In any event, 
creating a federal ``net tangible benefit'' that applies across 
the country will undoubtedly cause a much higher focus on this 
subjective test, resulting in significant claims. Lenders 
consequently, will be more restrictive in their offerings.
    Rebuttable Presumption. The bill creates a presumption that 
qualified safe harbor loans (those that meet a number of 
restrictions) will have a ``reasonable ability to repay'' and a 
``net tangible benefit,'' but that presumption is rebuttable. 
As a result, there are no safe harbors to ensure lenders in 
advance of making a loan that the loan is compliant and thus 
insulated from challenge. Because of the subjective standards 
mentioned above, lenders will be very hesitant to make loans 
subject to this presumption because they will be unable to 
dispose of even unmeritorious litigation through a motion to 
dismiss, and thus will incur significant additional costs and 
exposure.
    Excessive Potential Liability. The bill creates excessive 
potential liability for creditors for compliance with the 
bill's numerous requirements. In addition to a potential 
liability of three times the total amount ``of direct and 
indirect compensation or gain accruing'' in connection with the 
violation, which arguably includes all interest and fees, the 
bill creates an extended rescission right for up to 6 years for 
certain adjustable rate loans, and potentially allows class 
action rescission claims against creditors for vague and 
subjective standards.
    Other Restrictions on Loan Terms. The bill contains various 
provisions that prohibit or severely restrict loan terms that 
consumers today use to their benefit, including:
           arbitration, which is often fast, fair and 
        affordable relief to consumers, who choose not to go to 
        court; and
           yield spread premiums, on higher cost loans, 
        which has been a valuable mechanism for borrowers to 
        finance upfront broker compensation rather than pay it 
        at closing.
    While these mechanisms clearly must be fully disclosed and 
chosen by a consumer, outlawing them simply restricts the 
potential pricing package that consumers may choose.
    Intrusion into Internal Company Compensation Structures. 
The bill's prohibition on all types of ``incentive 
compensation'' is overbroad, pushing government regulation into 
companies' internal operations and incentives. We are not aware 
that the federal government has attempted previously to 
regulate that intrusively in American business,whether in the 
financial industry or in any other industry. This unprecedented 
incursion into the internal operations and incentives of companies is a 
major departure from U.S. law, both as traditionally applied to lenders 
and as currently applied to every other industry. Lenders use incentive 
compensation for numerous legitimate purposes, including aligning 
employees' incentives with their company's incentives, ensuring that 
the company can obtain specific products when necessary to meet the 
terms of required loan sale commitments, when the company wants to 
readjust its portfolio to meet new strategic or risk objectives, and 
other purposes.
    Interference with State Foreclosure Laws. The bill preempts 
state foreclosure laws that permit a foreclosing creditor to 
evict a renter in possession. This will greatly disrupt an 
investor's ability to transfer a property after foreclosure. 
Investors will demand higher rates, especially on higher risk 
loans, to compensate for their increased losses in the case of 
a foreclosure.
    Expansion of HOEPA. Title III's lowering of the HOEPA 
thresholds, and including many additional items in the ``points 
and fees'' calculation, would result in far too many loans 
falling under HOEPA restrictions. Very few lenders have any 
appetite for making HOEPA loans, so in effect this would result 
in the establishment of a low usury ceiling--and one that would 
unintentionally cause many loans to be unsaleable. (For 
example, by adding prepayment penalties on pre-existing loans 
in refinancings to the ``points and fees'' calculation, lenders 
may be unable to refinance a loan subject to a prepayment 
penalty without the loan becoming an unsaleable HOEPA loan).
    The combination of the bill's expansion of HOEPA, the 
subjective standards applicable to the loan origination and 
underwriting process, and the vastly increased liability will 
greatly reduce mortgage lending, other than to those borrowers 
with pristine credit records and substantial downpayments. That 
appears to be the general expectation of every industry 
participant with whom we have spoken. The Federal Reserve Board 
issued a credit scoring study in August that indicated that 
members of certain minority groups have, on average, 
substantially below-average credit scores. If that study is an 
accurate reflection of the credit scores of the overall 
population, we are very concerned that the reduction of lending 
that we foresee as a result of the bill will have particularly 
negative effects on minority applicants and communities. It 
would be a true shame if this bill, meant to protect American 
consumers, were to have the effect of making mortgage credit 
unavailable to many deserving borrowers who want a piece of the 
American dream.
    We are confident that consumers can receive appropriate 
protections without unduly restricting credit or creating 
enormous liability for the mortgage lending industry. For the 
foregoing reasons, however, we believe H.R. 3915 must be 
significantly changed to achieve that objective.

                                   Tom Feeney.
                                   Peter J. Roskam.
                                   Adam H. Putnam.
                                   Geoff Davis.
                                   Stevan Pearce.
                                   Michele Bachmann.
                                   Thomas Price.
                                   Patrick T. McHenry.
                                   Scott Garrett.
                                   John Campbell.
                                   Kenny Marchant.
                                   Randy Neugebauer.

                            DISSENTING VIEWS

    H.R. 3915 is a bill that, in an attempt to improve 
conditions in the housing market, will end up making it more 
difficult and more expensive for hard-working Americans to 
obtain a mortgage. I am afraid that if this bill is adopted 
into law, its effects would be as severe in the housing market 
as Sarbanes-Oxley was in the financial industry. Like Sarbanes-
Oxley, this is a rushed response to a financial crisis.
    I object to the scapegoating of mortgage brokers and 
lenders that typifies the current legislative response to the 
subprime housing crisis. The root of this crisis, as with other 
financial and economic crises, results from the federal 
government intervention into monetary policy and the housing 
market, not the actions of market participants. Yet, Congress 
has failed to identify the causes of the crisis, and instead 
aims to solve the crisis with more intervention.
    The introduction of mandatory fingerprinting and background 
checks for loan originators is a grave misstep and sets a 
dangerous precedent. Mandatory background checks and 
fingerprinting are not a panacea, will not eliminate mortgage 
fraud, and are an affront to a free and open labor market. 
Furthermore, by introducing a national mortgage licensing 
system and registry, Congress would restrict the number of 
people able to work in the mortgage industry. According to the 
laws of economics, when the supply of mortgage providers 
decreases, the cost of retaining those services will increase.
    H.R. 3915 also makes restrictions on the types of mortgages 
which can be offered, utilizing language which is vague enough 
that its definition will likely be finally determined in time-
consuming federal court cases. By restricting the number of 
people licensed to work in the mortgage industry and the types 
of mortgages that can be offered, the availability of mortgages 
would decrease and the cost would increase. H.R. 3915, which 
has as its purported aim the protection of American homebuyers, 
would have the perverse effect of keeping more Americans from 
being able to purchase homes.
    The collapse of the housing market has served as a catalyst 
for much of the recent turbulence in the financial markets, and 
it appears as though the worst is yet to come. For years the 
federal government has made it one of its prime aims to 
encourage homeownership among people who otherwise would not be 
able to afford homes. Various federal mortgage programs through 
the FHA, Fannie Mae, and Freddie Mac have distorted the normal 
workings of the housing market.
    The implicit government backing of Fannie Mae and Freddie 
Mac provides investors an incentive to provide funds to Fannie 
and Freddie that otherwise would have been put to use in other, 
more productive sectors of the economy. This flood of investor 
capital helped to fuel the housing bubble, which as it implodes 
is causing concern among both homeowners and investors.
    Previous legislation passed by this committee made it 
possible for people who could not afford down payments on 
houses to receive assistance from the federal government, or 
even to pay no down payment at all, courtesy of the taxpayers. 
The requirement of a down payment has always helped to 
ascertain the ability of a buyer to pay off a mortgage. It 
requires the buyer to show hard work and thrift, the ability to 
delay present consumption in order to make a larger acquisition 
in the future.
    When this requirement is minimized or eliminated, you 
introduce a new class of homebuyers, people who are unable to 
budget and save for the purchase of a home, or who should wait 
for a few years until they have saved enough to purchase a 
home. Federal policies have encouraged investors, lenders, and 
brokers to cater to these people, so it is no surprise that 
market actors came up with ever more sophisticated means of 
bringing these people into the real estate market. The implicit 
backing of Fannie Mae and Freddie Mac attracted unsavory 
characters, much as any other federal gravy train. This does 
not reflect badly on the market, but rather on the government 
policies which incentivize such behavior. Ironically, today 
Congress is attacking brokers for providing mortgages to people 
who arguably could not afford them, when these brokers were 
merely following the lead of Congress.
    Finally, legislative solutions to the housing crisis fail 
to take into account that fact that the Federal Reserve's loose 
monetary policy and lowering of interest rates were a major 
spur to the housing boom. Low interest rates influence marginal 
buyers, those who are sitting on the fence, and encourage them 
to take on a mortgage that they otherwise would not. Even when 
interest rates are raised, no one expects them to stay high for 
long, as there is always pressure from politicians and 
investors to keep rates low, as no one wants the cheap credit 
to end.
    Thinking that interest rates will cycle from low to higher, 
back to low, lenders begin to offer adjustable rate mortgages 
and other sophisticated mechanisms that may trap many unsavvy 
buyers. Buyers hope for low interest rates, lenders hope for 
higher rates, and many homebuyers, lenders, and investors have 
been harmed as a result of their attempts to foresee the Fed's 
cyclical policy. Some people might frown on these types of 
mortgages as excessively risky or even predatory. Risk, 
however, is endemic to every action in the marketplace, and no 
amount of legislation will change that fact.
    In conclusion, it is time for the federal government to get 
out of legislating and regulating the housing and mortgage 
industry. Through interventionist federal legislation we laid 
the groundwork for the housing bubble, and any attempts at 
reform that fail to address the causes of our current problem 
will only exacerbate the problem. H.R. 3915 is no exception, 
and will only serve to add additional unnecessary complexity to 
an already over-regulated industry.
                                                          Ron Paul.

                                  
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