I 

108TH CONGRESS 

1ST SESSION H. R. 3322

To amend the Truth in Lending Act, the Revised Statutes of the United 

States, the Home Mortgage Disclosure Act of 1975, and the amendments 

made by the Home Ownership and Equity Protection Act of 1994 to 

protect consumers from predatory lending practices, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 16, 2003

Ms. SCHAKOWSKY (for herself, Ms. WATERS, Mr. SANDERS, Ms. CARSON of 

Indiana, Mr. MCGOVERN, Mr. DEFAZIO, Mr. GUTIERREZ, Ms. SLAUGHTER, Ms. LEE, Ms. NORTON, Mr. PAYNE, Mr. OWENS, Mr. WAXMAN, Mr. 

PALLONE, Ms. WOOLSEY, Mrs. JONES of Ohio, Ms. BORDALLO, Mr. 

GRIJALVA, Mr. GEORGE MILLER of California, Mr. KUCINICH, Mr. RUSH, 

Ms. KAPTUR, Ms. JACKSON-LEE of Texas, Mr. BELL, Mr. GREEN of 

Texas, Mr. HONDA, Mr. BRADY of Pennsylvania, and Mrs. 

CHRISTENSEN) introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL

To amend the Truth in Lending Act, the Revised Statutes 

of the United States, the Home Mortgage Disclosure 

Act of 1975, and the amendments made by the Home 

Ownership and Equity Protection Act of 1994 to protect 

consumers from predatory lending practices, and for 

other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Save Our Homes Act’’. 

3 SEC. 2. HOME MORTGAGE DISCLOSURE ACT AMENDMENTS. 

4 (a) STATUTORY REPORTING REQUIREMENTS.—

5 (1) IN GENERAL.—Section 304(b) of the Home 

6 Mortgage Disclosure Act of 1975 (12 U.S.C. 

7 2803(b)) is amended—

8 (A) in paragraph (3), by striking ‘‘and’’ 

9 after the semicolon; 

10 (B) in paragraph (4), by striking the pe11 riod at the end and inserting ‘‘; and’’; and 

12 (C) by inserting after paragraph (4) the 

13 following new paragraph: 

14 ‘‘(5) the annual percentage rate of mortgage 

15 loans and other loans secured by residential real 

16 property originated by the institution, and the total 

17 amount of fees and points imposed in connection 

18 with the origination of such loans, grouped accord19 ing to census tract, income level, racial characteris20 tics, age, and gender.’’. 

21 (2) CONFORMING AMENDMENTS.—The Home 

22 Mortgage Disclosure Act of 1975 (12 U.S.C. 2801 

23 et seq.) is amended—

24 (A) in section 304(i), by striking ‘‘sub25 section (b)(4)’’ and inserting ‘‘paragraphs (4) 

26 and (5) of subsection (b)’’. 
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1 (B) in section 308, by striking ‘‘subsection 

2 (b)(4)’’ and inserting ‘‘paragraphs (4) and (5) 

3 of subsection (b)’’.

4 (b) PROHIBITION ON REGULATORY EXEMPTIONS

5 FROM REPORTING REQUIREMENTS.—Section 304 of the 

6 Home Mortgage Disclosure Act of 1975 (12 U.S.C. 2803) 

7 is amended by adding at the end the following new sub8 section: 

9 ‘‘(n) PROHIBITION ON REGULATORY EXEMPTIONS

10 FROM REPORTING REQUIREMENTS.—Subject to sub11 section (i)—

12 ‘‘(1) no provision of this title may be construed 

13 as authorizing the Board, the Secretary, or any 

14 other Federal agency to exempt any depository insti15 tution from the requirements of this title; and 

16 ‘‘(2) any exemption from the requirements of 

17 this title provided in any regulation, such as the ex18 emption provided in Appendix A to part 203 of the 

19 Code of Federal Regulations for lending institutions 

20 described in section 303(2)(B) whose total dollar 

21 amount of purchase loans originated in any year did 

22 not exceed 10 percent of the total dollar amount of 

23 all loan originations by such institution in such year, 

24 shall cease to be effective as of the date of the enact25 ment of the Save Our Homes Act.’’. 
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1 SEC. 3. TRUTH IN LENDING ACT AMENDMENTS. 

2 (a) APPLYING HIGH-COST LOAN PROTECTIONS TO

3 HOME PURCHASE LOANS AND LOWERING THE THRESH4 OLD FOR HIGH-COST LOANS.—Section 103(aa) of the 

5 Truth in Lending Act (15 U.S.C. 1602(aa)(1)) is amended 

6 by striking all that precedes paragraph (2) and inserting 

7 the following: 

8 ‘‘(aa) HIGH-COST MORTGAGE DEFINED.—

9 ‘‘(1) IN GENERAL.—The term ‘high-cost mort10 gage’, and a mortgage referred to in this subsection, 

11 means a consumer credit transaction that is secured 

12 by the consumer’s principal dwelling, other than a 

13 reverse mortgage transaction, if any of the following 

14 apply with respect to such consumer credit trans15 action: 

16 ‘‘(A) The annual percentage rate at con17 summation of the transaction exceeds by 5 or 

18 more percentage points the yield on United 

19 States Treasury securities having comparable 

20 periods of maturity (as made available by the 

21 Board) as of the week immediately preceding 

22 the week in which the interest rate for the loan 

23 is established. 

24 ‘‘(B) The mortgage is a variable-rate loan 

25 in which the annual percentage rate can reason-
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1 ably be expected to increase beyond the thresh2 old established in subparagraph (A).

3 ‘‘(C) Potential or scheduled increases in 

4 the annual percentage rate of the home loan are 

5 controlled by the creditor and not directly tied 

6 to changes in a publicly available rate not con7 trolled by the creditor. 

8 ‘‘(D) The total points and fees payable on 

9 the transaction will exceed the greater of 3 per10 cent of the total loan amount or $1,000.’’. 

11 (b) DEFINITION OF ‘‘POINTS AND FEES’’.—Para12 graph (4) of section 103(aa) of the Truth in Lending Act 

13 (15 U.S.C. 1602(aa)) is amended to read as follows: 

14 ‘‘(4) DEFINITION OF POINTS AND FEES.—

15 ‘‘(A) IN GENERAL.—For purposes of para16 graph (1)(D) and section 129(q), the term 

17 ‘points and fees’ shall include—

18 ‘‘(i) all items included in the finance 

19 charge, except interest or the time-price 

20 differential; 

21 ‘‘(ii) all compensation paid directly or 

22 indirectly to a mortgage broker, including 

23 a broker that originates a loan in its own 

24 name in a table-funded transaction;
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1 ‘‘(iii) each of the charges listed in sec2 tion 106(e) (except an escrow for future 

3 payment of taxes and insurance); 

4 ‘‘(iv) the cost of all premiums fi5 nanced by the lender, directly or indirectly, 

6 for any credit life, credit disability, credit 

7 unemployment or credit property insur8 ance, or any other life or health insurance, 

9 or any payments financed by the lender, 

10 directly or indirectly, for any debt cancella11 tion or suspension agreement or contract, 

12 except that, for purposes of this subpara13 graph, insurance premiums or debt can14 cellation or suspension fees calculated and 

15 paid on a monthly basis shall not be con16 sidered financed by the lender; 

17 ‘‘(v) any prepayment penalties to be 

18 charged on the loan, including the existing 

19 loan; and 

20 ‘‘(vi) such other charges as the Board 

21 determines to be appropriate. 

22 ‘‘(B) ITEMS EXCLUDED.—For purposes of 

23 paragraph (1)(D) and section 129(q), the term 

24 ‘points and fees’ shall not include the following: 
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1 ‘‘(i) Taxes, filing fees, recording and 

2 other charges and fees paid or to be paid 

3 to public officials for determining the exist4 ence of or for perfecting, releasing, or sat5 isfying a security interest. 

6 ‘‘(ii) Fees paid to a person other than 

7 a creditor or an affiliate of the creditor or 

8 to the mortgage broker or an affiliate of 

9 the mortgage broker for any of the fol10 lowing: 

11 ‘‘(I) Fees for flood certification. 

12 ‘‘(II) Fees for pest infestation 

13 and flood determinations. 

14 ‘‘(III) Appraisal fees. 

15 ‘‘(IV) Fees for inspections per16 formed prior to closing. 

17 ‘‘(V) Credit reports. 

18 ‘‘(VI) Surveys. 

19 ‘‘(VII) Attorneys’ fees (if the bor20 rower has the right to select the attor21 ney from an approved list or other22 wise). 

23 ‘‘(VIII) Notary fees. 

24 ‘‘(IX) Title insurance premiums. 
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1 ‘‘(X) Fire insurance and flood in2 surance premiums, to the extent that 

3 the conditions in section 226.4(d)(2) 

4 of title 12 of the Code of Federal Reg5 ulations, as in effect on the date of 

6 the enactment of the Save Our Homes 

7 Act, are met.’’.

8 (c) COVERAGE OF HIGH-COST MORTGAGE BRO9 KERS.—

10 (1) IN GENERAL.—Section 103(f) of the Truth 

11 in Lending Act (15 U.S.C. 1602(f)) is amended—

12 (A) by striking ‘‘(f) The term’’ and insert13 ing ‘‘(f) CREDITOR.—

14 ‘‘(1) IN GENERAL.—The term’’; 

15 (B) by striking the last sentence of para16 graph (1) (as so redesignated by subparagraph 

17 (A) of this paragraph); and 

18 (C) by adding at the end the following new 

19 paragraph: 

20 ‘‘(2) OTHER PERSONS INCLUDED.—Any of the 

21 following persons shall be treated as a creditor for 

22 purposes of this title: 

23 ‘‘(A) Any person who originates 2 or more 

24 high-cost mortgages in any 12-month period. 
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1 ‘‘(B) Any person who originates 1 or more 

2 high-cost mortgages through a mortgage broker 

3 in any 12-month period. 

4 ‘‘(C) Any person who acted as a mortgage 

5 broker between originators and consumers on 

6 more than 5 high-cost mortgages in any 12-

7 month period. 

8 ‘‘(D) Any person who is an affiliate (as de9 fined in section 129(k)) of a creditor, or a per10 son treated under this paragraph as a creditor, 

11 with respect to high-cost mortgages.’’. 

12 (2) LIABILITY OF CREDITOR FOR VIOLATIONS

13 BY MORTGAGE BROKER.—Section 130 of the Truth 

14 in Lending Act (15 U.S.C. 1640) is amended by 

15 adding at the end the following new subsection: 

16 ‘‘(j) LIABILITY OF CREDITOR FOR VIOLATIONS BY

17 MORTGAGE BROKER.—In the case of any credit extended 

18 to a consumer by a creditor through a mortgage broker, 

19 the creditor shall be liable under this section to the con20 sumer for any violation of any requirement of this title, 

21 or regulations prescribed under this title, by the mortgage 

22 broker in connection with such extension of credit.’’. 

23 (d) PROHIBITED PRACTICES FOR HIGH-COST HOME

24 LOANS.—Section 129 of the Truth in Lending Act (15 

25 U.S.C. 1639) is amended—
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1 (1) in subsection (e), by striking ‘‘of less than 

2 five years’’; 

3 (2) by striking subsections (c), (f), and (h); 

4 (3) by redesignating subsections (d), (e), (g), 

5 and (i) as subsections (c), (d), (e), and (f), respec6 tively; and 

7 (4) by inserting after subsection (f) (as so re8 designated by paragraph (3) of this subsection) the 

9 following new subsections: 

10 ‘‘(g) NO CALL PROVISION.—

11 ‘‘(1) IN GENERAL.—A high-cost mortgage may 

12 not include terms under which the indebtedness may 

13 be accelerated by the creditor, in the creditor’s sole 

14 discretion. 

15 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

16 apply when repayment of the loan has been acceler17 ated by default or made pursuant to a due-on-sale 

18 provision or some other provision of the loan docu19 ments unrelated to the payment schedule.

20 ‘‘(h) NO MODIFICATION OR DEFERRAL FEES.—A 

21 creditor shall not charge a borrower any fees or other 

22 charges to modify, renew, extend, or amend a high-cost 

23 mortgage or to defer any payment due under any such 

24 mortgage.
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1 ‘‘(i) NO LENDING WITHOUT HOME-OWNERSHIP

2 COUNSELING.—A creditor shall not enter into a high-cost 

3 mortgage without having received certification from a 

4 housing counseling agency (which is certified by the De5 partment of Housing and Urban Development) that the 

6 borrower has received counseling on the advisability of the 

7 loan transaction and the appropriateness of the loan for 

8 the borrower. 

9 ‘‘(j) NO MANDATORY ARBITRATION CLAUSE.—A 

10 high-cost mortgage may not include terms under which a

11 mandatory arbitration clause limits in any way the right 

12 of the borrower to seek relief through the judicial process. 

13 ‘‘(k) NO PREPAYMENT PENALTY.—

14 ‘‘(1) LIMITATION ON TERMS.—A high-cost 

15 mortgage may not contain terms under which a con16 sumer must pay a prepayment penalty for paying all 

17 or part of the principal before the date on which the 

18 principal is due. 

19 ‘‘(2) CONSTRUCTION.—For purposes of this 

20 subsection, any method of computing a refund of un21 earned scheduled interest is a prepayment penalty if 

22 it is less favorable to the consumer than the actu23 arial method (as that term is defined in section 

24 933(d)(1) of the Housing and Community Develop25 ment Act of 1992). 
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1 ‘‘(l) NO NEGATIVE AMORTIZATION.—A high-cost 

2 mortgage may not include terms under which the out3 standing principal balance will increase at any time over 

4 the course of the loan because the regular periodic pay5 ments do not cover the full amount of interest due. 

6 ‘‘(m) PROHIBITION ON EXTENDING CREDIT WITH7 OUT REGARD TO PAYMENT ABILITY OF CUSTOMER.—

8 ‘‘(1) IN GENERAL.—No creditor may make a 

9 high-cost mortgage, unless the creditor reasonably 

10 believes at the time the loan is consummated that 1 

11 or more of the obligors, when considered individually 

12 or collectively, will be able to make the scheduled 

13 payments to repay the obligation based upon a con14 sideration of their current and expected income, cur15 rent obligations, employment status, and other fi16 nancial resources (other than the borrower’s equity 

17 in the dwelling which secures repayment of the 

18 loan). 

19 ‘‘(2) OBLIGOR DEFINED.—For purposes of 

20 paragraph (1), the term ‘obligor’ means each bor21 rower, coborrower, cosigner, or guarantor obligated 

22 to repay a loan. 

23 ‘‘(n) PROHIBITION ON FLIPPING OF HOME LOANS.—
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1 ‘‘(1) IN GENERAL.—No creditor may knowingly 

2 or intentionally engage in the practice of flipping a 

3 high-cost mortgage. 

4 ‘‘(2) FLIPPING DEFINED.—For purposes of 

5 paragraph (1), the term ‘flipping’ means the act of 

6 making of a new high-cost mortgage to a borrower 

7 to refinance an existing home loan when the new 

8 loan does not have a reasonable, tangible net benefit 

9 to the borrower considering all of the circumstances, 

10 including the terms of both the new and refinanced 

11 loans, the cost of the new loan, and the borrower’s 

12 circumstances. 

13 ‘‘(o) NO ENCOURAGEMENT OF DEFAULT.—No cred14 itor may recommend or encourage default on an existing 

15 loan or other debt prior to and in connection with the clos16 ing or planned closing of a high-cost mortgage that refi17 nances all or any portion of such existing loan or debt. 

18 ‘‘(p) NO FINANCING OF CREDIT INSURANCE OR

19 DEBT CANCELLATION CONTRACT.—

20 ‘‘(1) IN GENERAL.—No creditor may finance, 

21 directly or indirectly, any credit life, credit disability, 

22 or credit unemployment insurance, or any other life 

23 or health insurance premiums, including any debt 

24 cancellation contract, through a high-cost mortgage. 
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1 ‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1) 

2 shall not be construed as affecting the right of a 

3 creditor to require the collection of hazard and mort4 gage insurance premium payments into an escrow 

5 account in conjunction with the servicing of a high6 cost mortgage to the extent the calculation and serv7 icing of insurance premiums are conducted and re8 ported independently of the high-cost mortgage. 

9 ‘‘(q) RESTRICTION ON FINANCING POINTS AND

10 FEES.—

11 ‘‘(1) LIMIT ON AMOUNT OF POINTS AND FEES

12 THAT MAY BE FINANCED.—No creditor may, in con13 nection with the formation or consummation of a 

14 high-cost mortgage, finance, directly or indirectly, 

15 any portion of the points, fees, or other charges pay16 able to the creditor or any third party in an amount 

17 in excess of the greater of 3 percent of the total loan 

18 amount or $600. 

19 ‘‘(2) PROHIBITION ON FINANCING CERTAIN

20 POINTS, FEES, OR CHARGES.—No creditor may, in 

21 connection with the formation or consummation of a 

22 high-cost mortgage, finance, directly or indirectly, 

23 any of the following fees or other charges payable to 

24 the creditor or any third party: 
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1 ‘‘(A) Any prepayment fee or penalty re2 quired to be paid by the consumer in connection 

3 with a loan or other extension of credit which 

4 is being refinanced by such mortgage if the 

5 creditor, with respect to such mortgage, or any 

6 affiliate of the creditor, is the creditor with re7 spect to the loan or other extension of credit 

8 being refinanced. 

9 ‘‘(B) Any points, fees, or other charges re10 quired to be paid by the consumer in connection 

11 with such mortgage if—

12 ‘‘(i) the mortgage is being entered 

13 into in order to refinance an existing high14 cost mortgage of the consumer; and 

15 ‘‘(ii) if the creditor, with respect to 

16 such new mortgage, or any affiliate of the 

17 creditor, is the creditor with respect to the 

18 existing high-cost mortgage which is being 

19 refinanced. 

20 ‘‘(r) NO LENDING WITHOUT APPRAISAL.—A creditor 

21 shall not extend credit in connection with a high-cost 

22 mortgage without first having obtained and made available 

23 to the prospective borrower a real estate appraisal on the 

24 property securing the proposed mortgage that—
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1 ‘‘(1) fully complies with the Uniform Standards 

2 of Professional Appraisal Practice prescribed by the 

3 Appraisal Standards Board of the Appraisal Foun4 dation, in accordance with section 1110(1) of the Fi5 nancial Institutions Reform, Recovery, and Enforce6 ment Act of 1989; and 

7 ‘‘(2) is performed by a qualified State certified 

8 or licensed appraiser on the roster maintained by the 

9 Appraisal Subcommittee under section 1109(a)(1) of 

10 such Act. 

11 ‘‘(s) NO BLANK ITEMS.—A high-cost mortgage docu12 ment in which blanks are left to be filled in after the con13 tract is signed shall not be enforceable under Federal law 

14 or the law of any State. 

15 ‘‘(t) PAYMENT SCHEDULE REQUIREMENT.—

16 ‘‘(1) IN GENERAL.—No high-cost mortgage may 

17 contain a scheduled payment that is more than twice 

18 as large as the average of preceding scheduled pay19 ments. 

20 ‘‘(2) APPLICATION FOR SEASONALLY ADJUSTED

21 SCHEDULE PAYMENTS.—In the case of a payment 

22 schedule for a high-cost mortgage that is adjusted to 

23 account for the seasonal or irregular income of the 

24 consumer, the total installments in any year shall 
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1 not exceed the amount of 1 year’s worth of pay2 ments on the loan. 

3 ‘‘(3) EXCEPTION FOR BRIDGE LOANS.—

4 ‘‘(A) IN GENERAL.—This paragraph shall 

5 not apply to a bridge loan. 

6 ‘‘(B) BRIDGE LOAN DEFINED.—For pur7 poses of this paragraph, the term ‘bridge loan’ 

8 means a loan with a maturity of less than 18 

9 months that only requires payments of interest 

10 until the time when the entire unpaid balance 

11 is due and payable. 

12 ‘‘(u) SAME LANGUAGE REQUIREMENT.—If the dis13 cussions between a creditor and a borrower or potential 

14 borrower with respect to a high-cost mortgage are con15 ducted primarily in a language other than English, the 

16 creditor shall, before closing, provide an additional copy 

17 of all information required to be disclosed to the borrower 

18 under this title translated into the language in which the 

19 discussions were conducted. 

20 ‘‘(v) ATTEMPTED EVASION OF COVERAGE.—The pro21 visions of this section shall apply to any person who in 

22 bad faith attempts to avoid its application by—

23 ‘‘(1) structuring a loan transaction as an open 

24 end credit plan for the purpose and with the intent 

25 of evading the provisions of this section when the 
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1 loan would have been a high-cost mortgage if the 

2 loan had been structured as a closed-end loan;

3 ‘‘(2) dividing any loan transaction into separate 

4 parts for the purpose and with the intent of evading 

5 the provisions of this section; or 

6 ‘‘(3) engaging in any other such subterfuge for 

7 the purpose of evading the provisions of this section. 

8 ‘‘(w) CORRECTIONS AND UNINTENTIONAL VIOLA9 TIONS.—

10 ‘‘(1) IN GENERAL.—A creditor with respect to 

11 a high-cost mortgage who, when acting in good 

12 faith, fails to comply with this section, shall not be 

13 deemed to have violated this section if the creditor 

14 establishes that either—

15 ‘‘(A) within 30 days of the loan closing 

16 and prior to the institution of any action under 

17 this section, the borrower is notified of the com18 pliance failure, appropriate restitution is made, 

19 and whatever adjustments are necessary are 

20 made to the loan to either, at the choice of the 

21 borrower—

22 ‘‘(i) make the high-cost home loan 

23 satisfy the requirements of this section; or 

24 ‘‘(ii) change the terms of the loan in 

25 a manner beneficial to the borrower so that 
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1 the loan will no longer be considered a 

2 high-cost mortgage subject to the provi3 sions of this section; or 

4 ‘‘(B) the compliance failure was not inten5 tional and resulted from a bona fide error not6 withstanding the maintenance of procedures 

7 reasonably adapted to avoid such errors, and 

8 within 45 days after the discovery of the com9 pliance failure and prior to the institution of 

10 any action under this section or the receipt of 

11 written notice of the compliance failure, the 

12 borrower is notified of the compliance failure, 

13 appropriate restitution is made, and whatever 

14 adjustments are necessary are made to the loan 

15 to either, at the choice of the borrower—

16 ‘‘(i) make the high-cost home loan 

17 satisfy the requirements of this section; or 

18 ‘‘(ii) change the terms of the loan in 

19 a manner beneficial to the borrower so that 

20 the loan will no longer be considered a 

21 high-cost home loan subject to the provi22 sions of this section. 

23 ‘‘(2) BONA FIDE ERROR.—For purposes of 

24 paragraph (1), examples of a bona fide error include 

25 clerical, calculation, computer malfunction and pro-
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1 gramming, and printing errors. An error of legal 

2 judgment with respect to a person’s obligations 

3 under this section is not a bona fide error.’’. 

4 (e) CONFIRMATION OF COMPLETION OF HOME IM5 PROVEMENTS REQUIRED.—Section 129(i) of the Truth in 

6 Lending Act (15 U.S.C. 1639(i)) is amended in the matter 

7 preceding paragraph (1), by striking ‘‘, other than—’’ and 

8 inserting ‘‘unless the creditor has received a certification 

9 of completion or other evidence that the home improve10 ments covered under the contract have been completed 

11 and then only—’’. 

12 SEC. 4. REQUIREMENTS FOR ALL CONFORMING HOME 

13 LOANS. 

14 (a) IN GENERAL.—Chapter 2 of the Truth in Lend15 ing Act (15 U.S.C. 1601 et seq.) is amended by inserting 

16 after section 129 the following new section: 

17 ‘‘SEC. 129A. REQUIREMENTS FOR ALL CONFORMING HOME 

18 LOANS. 

19 ‘‘(a) DEFINITION OF CONFORMING HOME LOAN.—

20 For the purpose of this section, the term ‘conforming 

21 home loan’ means a loan, other than an extension of credit 

22 under an open end credit plan or a reverse mortgage 

23 transaction, where—

24 ‘‘(1) the principal amount of the loan does not 

25 exceed the conforming loan size limit for a single-
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1 family dwelling as established from time to time by 

2 the Federal National Mortgage Association; 

3 ‘‘(2) the borrower is an individual or are indi4 viduals; 

5 ‘‘(3) the debt is incurred by the borrower pri6 marily for personal, family, or household purposes; 

7 and 

8 ‘‘(4) the loan is secured by a mortgage or deed 

9 of trust on real estate upon which there is located 

10 or there is to be located a structure or structures de11 signed principally for occupancy of from 1 to 4 fami12 lies which is or will be occupied by the borrower as 

13 the borrower’s principal dwelling. 

14 ‘‘(b) APPRAISER INDEPENDENCE.—

15 ‘‘(1) IN GENERAL.—No creditor or mortgage 

16 broker may, directly or indirectly, coerce, intimidate, 

17 or withhold compensation from an appraiser for the 

18 purpose of influencing the independent judgment of 

19 the appraiser with respect to the value of real estate 

20 that is to be covered by a conforming home loan or 

21 is being offered as security according to an applica22 tion for a conforming home loan. 

23 ‘‘(2) CRIMINAL PENALTY.—Any creditor or 

24 mortgage broker who knowingly violates paragraph
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1 (1) shall be fined under title 18, United States Code, 

2 imprisoned for not more than 5 years, or both. 

3 ‘‘(3) CIVIL MONEY PENALTY.—

4 ‘‘(A) IN GENERAL.—In the case of any 

5 person who knowingly violates paragraph (1), 

6 the agency responsible under section 108 for 

7 enforcing the requirements of this title with re8 spect to such person may impose a civil money 

9 penalty on the person for each such violation. 

10 ‘‘(B) NEGLIGENCE.—In the case of any 

11 person who negligently violates paragraph (1), 

12 the agency responsible under section 108 for 

13 enforcing the requirements of this title with re14 spect to such person may impose a civil money 

15 penalty on the person for each such violation. 

16 ‘‘(C) TIME LIMITATIONS.—

17 ‘‘(i) ASSESSMENTS.—An agency re18 ferred to in subparagraph (A) or (B) may 

19 assess a civil penalty under such subsection 

20 at any time before the end of the 6-year 

21 period beginning on the date of the viola22 tion with respect to which the penalty is 

23 assessed. 

24 ‘‘(ii) CIVIL ACTIONS.—An agency re25 ferred to in subparagraph (A) or (B) may 
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1 commence a civil action to recover a civil 

2 penalty assessed under such subparagraph 

3 at any time before the end of the 2-year 

4 period beginning on the later of—

5 ‘‘(I) the date the penalty was as6 sessed; or 

7 ‘‘(II) the date any judgment be8 comes final in any criminal action 

9 under paragraph (2) in connection 

10 with the same violation with respect 

11 to which the penalty is assessed. 

12 ‘‘(D) CRIMINAL PENALTY NOT EXCLUSIVE

13 OF CIVIL PENALTY.—A civil money penalty may 

14 be imposed under this paragraph with respect 

15 to any violation of paragraph (1) notwith16 standing the fact that a criminal penalty is im17 posed with respect to the same violation. 

18 ‘‘(c) NONCOMPLIANT LOANS PROHIBITED FROM

19 MORTGAGE-BACKED SECURITY POOLS.—

20 ‘‘(1) ISSUANCE OF SECURITIES FROM TAINTED

21 POOLS PROHIBITED.—No person may issue a secu22 rity representing an interest in or an obligation 

23 backed by a pool of mortgages, deeds of trust, or 

24 other security interests created in connection with 

25 consumer credit transactions secured by principal 
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1 dwellings of consumers if such person knows or has 

2 reason to believe that any high-cost mortgage or 

3 conforming home loan included in such pool violates 

4 any provision of this section or section 129. 

5 ‘‘(2) INCLUSION IN POOLS.—No creditor or 

6 other person may knowingly include any high-cost 

7 mortgage or conforming home loan that violates any 

8 provision of this section or section 129 in any pool 

9 described in paragraph (1).’’. 

10 (b) TECHNICAL AND CONFORMING AMENDMENTS.—

11 (1) The first sentence of section 130(a) of the 

12 Truth in Lending Act (15 U.S.C. 1640(a)) is 

13 amended, in the portion of such section that pre14 cedes paragraph (1), by inserting ‘‘, and to the ex15 tent subject to any requirement of this title, any 

16 mortgage broker (including any person acting as a 

17 mortgage broker),’’ after ‘‘any creditor’’. 

18 (2) Section 130(b) of the Truth in Lending Act 

19 (15 U.S.C. 1640(b)) is amended—

20 (A) by striking ‘‘creditor or assignee’’ the 

21 first place such term appears and inserting 

22 ‘‘creditor, assignee, or, to the extent subject to 

23 any requirement of this title, any mortgage 

24 broker (including any person acting as a mort25 gage broker),’’; 
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1 (B) by striking ‘‘creditor’s or assignee’s 

2 own procedures’’ and inserting ‘‘creditor’s, as3 signee’s, or mortgage broker’s own procedure’’; 

4 and

5 (C) by striking ‘‘the creditor or assignee 

6 notifies’’ and inserting ‘‘creditor, assignee, or 

7 mortgage broker notifies’’. 

8 (3) Section 130(c) of the Truth in Lending Act 

9 (15 U.S.C. 1640(c)) is amended—

10 (A) by striking ‘‘creditor or assignee’’ the 

11 first place such term appears and inserting 

12 ‘‘creditor, assignee, or, to the extent subject to 

13 any requirement of this title, any mortgage 

14 broker (including any person acting as a mort15 gage broker),’’; and 

16 (B) by striking ‘‘if the creditor or assignee 

17 shows’’ and inserting ‘‘if the creditor, assignee, 

18 or mortgage broker shows’’. 

19 (4) The third sentence of section 130(e) of the 

20 Truth in Lending Act (15 U.S.C. 1640(e)) is 

21 amended by inserting ‘‘or 129A’’ after ‘‘section 

22 129’’. 

23 (c) CLERICAL AMENDMENT.—The table of sections 

24 for chapter 2 of the Truth in Lending Act (15 U.S.C. 
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1 1601 et seq.) is amended by inserting after the item relat2 ing to section 129 the following new item:

‘‘129A. Requirements for all conforming home loans.’’.

3 SEC. 5. ALTERNATIVE MAXIMUM AMOUNT OF CIVIL LIABIL4 ITY FOR VIOLATIONS INVOLVING HIGH-COST 

5 MORTGAGES AND CONFORMING LOANS. 

6 (a) ALTERNATIVE MAXIMUM AMOUNT OF CIVIL LI7 ABILITY.—Section 129 of the Truth in Lending Act (15 

8 U.S.C. 1639) is amended by inserting after subsection (w) 

9 (as added by section 3(d) of this Act) the following new 

10 subsection: 

11 ‘‘(x) ALTERNATIVE MAXIMUM AMOUNT OF CIVIL LI12 ABILITY.—Notwithstanding any maximum amount limita13 tion contained in section 130, any creditor, and to the ex14 tent subject to any requirement of this title, any mortgage 

15 broker (including any person acting as a mortgage 

16 broker), who fails to comply with section 129, in connec17 tion with any high-cost mortgage, or with section 129A, 

18 in connection with any conforming loan, shall be liable 

19 for—

20 ‘‘(1) in the case of an individual action, the 

21 greater of—

22 ‘‘(A) the amount determined under section 

23 130; or 

24 ‘‘(B) the sum of the amount of the prin25 cipal and the total amount of all finance 
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1 charges and fees paid by the consumer with re2 spect to such mortgage or loan; and 

3 ‘‘(2) in the case of a class action, the greater 

4 of—

5 ‘‘(A) the amount determined under section 

6 130; or 

7 ‘‘(B) as to each member of the class in any 

8 class action or series of class actions arising out 

9 of the same failure to comply by the same cred10 itor, the sum of the amount of the principal and 

11 the total amount of all finance charges and fees 

12 paid by the consumer with respect to such 

13 mortgage or loan.’’.

14 SEC. 6. EFFECTIVE DATE. 

15 (a) IN GENERAL.—Except as provided in subsection 

16 (b), this Act and the amendments made by this Act shall 

17 take effect at the end of the 90-day period beginning on 

18 the date of the enactment of this Act. 

19 (b) HMDA REQUIREMENTS.—Notwithstanding sub20 section (a), the amendments made by section 2 shall take 

21 effect on January 1 of the first calendar year beginning 

22 after the date of the enactment of this Act.

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