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[House Report 111-365]
[From the U.S. Government Publishing Office]

111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    111-365

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

 
  PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 4173) TO PROVIDE FOR 
  FINANCIAL REGULATORY REFORM, TO PROTECT CONSUMERS AND INVESTORS, TO 
  ENHANCE FEDERAL UNDERSTANDING OF INSURANCE ISSUES, TO REGULATE THE 
      OVER-THE-COUNTER DERIVATIVES MARKETS, AND FOR OTHER PURPOSES

                                _______
                                

  December 8, 2009.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

  Mr. Perlmutter, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 956]

    The Committee on Rules, having had under consideration 
House Resolution 956, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of H.R. 4173, the 
``Wall Street Reform and Consumer Protection Act of 2009.'' The 
resolution provides three hours of general debate with two 
hours to be equally divided and controlled by the chair and 
ranking minority member of the Committee on Financial Services, 
30 minutes to be equally divided and controlled by the chair 
and ranking minority member of the Committee on Agriculture, 
and 30 minutes to be equally divided and controlled by the 
chair and ranking minority member of the Committee on Energy 
and Commerce. The resolution waives all points of order against 
consideration of the bill except those arising under clause 9 
and 10 of rule XXI.
    The resolution provides that the amendment printed in this 
report shall be considered as adopted in the House and in the 
Committee of the Whole. The resolution provides that the 
Committee of the Whole shall rise without motion after general 
debate and that no further consideration of the bill shall 
occur except pursuant to a subsequent order of the House. The 
resolution also provides that the Chair of the Committee of the 
Whole may entertain a motion that the Committee rise only if 
offered by the Chair of the Committee on Financial Services or 
his designee.

                         EXPLANATION OF WAIVERS

    Although the rule waives all points of order against 
consideration of the bill (except for clauses 9 and 10 of rule 
XXI), the Committee is not aware of any points of order. The 
waiver is prophylactic.

            SUMMARY OF AMENDMENT TO BE CONSIDERED AS ADOPTED

    The amendment addresses jurisdictional concerns among the 
committees of jurisdiction affected by H.R. 4173. The amendment 
also contains a revised version of H.R. 1728, the Mortgage 
Reform and Anti-Predatory Lending Act of 2009, which was passed 
by the House on May 7, 2009 by a vote of 300-114, updated to 
conform with the pending legislation. The amendment includes 
reverse mortgages in the definition of a ``qualified mortgage'' 
subject to provisions of the Truth in Lending Act (TILA). The 
amendment also makes the bill paygo compliant.

           TEXT OF THE AMENDMENT TO BE CONSIDERED AS ADOPTED

  Page 13, line 16, strike ``and''.
  Page 13, line 18, strike the period and insert ``; and'' and 
after such line insert the following:
                  (C) that is not a Farm Credit System 
                institution chartered under and subject to the 
                provisions of the Farm Credit Act of 1971, as 
                amended (12 U.S.C. 2001 et seq.).

  Page 18, line 4, insert ``any retail foreign exchange 
dealer,'' after ``adviser,''.
  Page 18, beginning on line 12, strike ``organization'' and 
insert ``organization, designated contract market, or swap 
execution facility''.
  Page 28, line 9, after ``report to'' insert the following: 
``the Committee on Ways and Means, the Committee on 
Agriculture, and''.
  Page 28, line 10, strike ``Representatives,'' and insert 
``Representatives and the Committee on Finance, the Committee 
on Agriculture, and''.
  Page 29, line 13, insert before ``Committee'' the following: 
``Committee on Ways and Means, the Committee on Agriculture, 
and the''.
  Page 29, line 14, insert before ``Committee'' the following: 
``Committee on Finance, the Committee on Agriculture, and 
the''.
  Page 29, line 23, after ``to the'' insert the following: 
``Committee on Ways and Means, the Committee on Agriculture, 
and the''.
  Page 29, line 25, after ``and the'' insert the following: 
``Committee on Finance, the Committee on Agriculture, and 
the''.
  Page 30, line 5, after ``to the'' insert the following: 
``Committee on Ways and Means, the Committee on Agriculture, 
and the''.
  Page 30, line 7, after ``and the'' insert the following: 
``Committee on Finance, the Committee on Agriculture, and 
the''.
  Page 104, beginning on line 6, strike ``, unless the 
President'' and all that follows through page 110, line 7, and 
insert a period.
  Page 277, line 22, strike the period and insert ``; and'' and 
after such line insert the following:
                  (C) that is not a Farm Credit System 
                institution chartered under and subject to the 
                provisions of the Farm Credit Act of 1971, as 
                amended (12 U.S.C. 2001 et seq.).

  Page 383, strike line 21 and all that follows through page 
384, line 2, and insert the following:

          (9) Exempt tax status.--
                  (A) Exemption from federal income tax.--
                Subsection (l) of section 501 of the Internal 
                Revenue Code of 1986 is amended by adding at 
                the end the following new paragraph:
          ``(4) Any bridge financial company organized under 
        section 1609(h) of the Financial Stability Improvement 
        Act of 2009.''.
                  (B) Exemption from certain other taxes.--
                Notwithstanding any other provision of Federal 
                or State law, a bridge financial company, its 
                franchise, property, and income shall be exempt 
                from all taxation now or hereafter imposed by 
                any territory, dependency, or possession of the 
                United States, or by any State, county, 
                municipality, or local taxing authority.

  Page 416, beginning on line 16, strike ``shall be introduced 
in the House'' and all that follows through ``minority leader 
of the Senate'' and insert ``shall be introduced in the House 
by the majority leader of the House and in the Senate by the 
majority leader of the Senate''.

  Page 417, line 21, insert ``for the majority leader'' after 
``resolution,''.

  Page 437, line 25, strike ``Congress'' and insert ``House of 
Representatives and the Senate''.

  Page 440, beginning on line 25, strike ``and minority leader 
of the House''.

  Page 441, beginning on line 2, strike ``and minority leader 
of the Senate''.

  Page 441, line 20, strike ``each committee'' and insert ``all 
committees''.

  Page 441, line 21, strike ``reports'' and insert ``have 
reported''.

  Page 441, line 22, strike ``has been'' and insert ``have 
been''.

  Page 442, line 1, insert ``for the majority leader'' after 
``resolution,''.

  Page 443, beginning line 12, strike ``resolution'' and insert 
``resolution in the Senate''.

  Page 443, line 14, insert ``in the Senate'' after 
``introduction''.

  Page 446, line 14, insert ``on adoption'' after ``fails''.

  Page 448, line 9, strike ``use of authority relevant to''.

  Page 665, strike lines 19 and 20 and insert the following:

          (2) Agency.--The term ``Agency'' means--
                  (A) before the Agency conversion date, the 
                Consumer Financial Protection Agency; and
                  (B) on and after the Agency conversion date, 
                the commission established under section 4103.

  Page 668, strike lines 22 and 23 and insert the following:

          (15) Director.--The term ``Director'' means--
                  (A) before the Agency conversion date, the 
                Director of the Agency; and
                  (B) on and after the Agency conversion date, 
                the commission established under section 4103.

  Page 676, strike line 23 and all that follows through page 
677, line 3, and insert the following:

                                          (aa) the activity is 
                                        financial in nature or 
                                        is otherwise a 
                                        permissible activity 
                                        for a bank or bank 
                                        holding company, 
                                        including a financial 
                                        holding company, under 
                                        any provision of 
                                        Federal law or 
                                        regulation applicable 
                                        to a bank or bank 
                                        holding company, 
                                        including a financial 
                                        holding company;

  Page 678, beginning on line 8, strike ``Business of insurance 
exception''and insert ``Exceptions''.

  Page 678, line 10, insert before the period the following: `` 
or the provision of electronic data transmission, routing, 
intermediate or transient storage, or connections to a system 
or network, where the person providing such services does not 
select or modify the content of the electronic data, is not the 
sender or the intended recipient of the data, and such person 
transmits, routes, stores, or provides connections for 
electronic data, including financial data, in a manner that 
such data is undifferentiated from other types of data that 
such person transmits, routes, stores, or provides 
connections''.

  Page 680, line 24, strike ``or''.

  Page 680, line 24, strike ``to the extent'' and insert ``, 
retail foreign exchange dealer, or swap execution facility to 
the extent''.

  Page 687, after line 9, insert the following new paragraph:

          (38) Agency conversion date.--The term ``Agency 
        conversion date'' means the date that is two years 
        after the designated transfer date.

  Page 687, after line 18, insert the following new subsection 
(and redesignate succeeding subsections accordingly):

  (b) Agency Structure.--
          (1) Initial structure.--The Agency shall be led by a 
        Director or Acting Director, established pursuant to 
        section 4102, until the day before the Agency 
        conversion date.
          (2) Subsequent structure.--On and after the Agency 
        conversion date, the Agency shall consist of the 
        commission established under section 4103.

  Page 688, line 9, insert before the period the following: 
``and shall exercise any authorities granted under this title 
and all other laws within the Director's jurisdiction''.

  Page 688, strike lines 11 through 14 and insert the following 
(and redesignate succeeding paragraphs accordingly):

          (1) Nomination.--Within 60 days after the date of 
        enactment of this title, the President shall nominate 
        the Director, from among individuals who--
                  (A) are citizens of the United States; and
                  (B) have strong competencies and experiences 
                related to consumer financial protection.
          (2) Appointment subject to confirmation.--The 
        Director nominated under paragraph (1) shall be 
        appointed by and with the advice and consent of the 
        Senate
          (3) Acting director before senate confirmation.--The 
        individual nominated pursuant to paragraph (1) shall 
        serve as Acting Director with full authorities granted 
        to the Director under this title until the Director is 
        confirmed by the Senate.

  Page 688, line 16, strike ``of 5 years'' and insert ``that 
ends on the Agency conversion date''.

  Page 688, line 24, strike ``paragraph (1)'' and insert 
``paragraph (2)''.

  Page 689, beginning on line 4, strike ``In the event of a 
vacancy in the position of Director or during the absence or 
disability of the Director'' and insert ``In the event of 
vacancy or during the absence of the Director (who has been 
confirmed by the Senate pursuant to paragraph (2))''.

  Page 690, before line 1, insert the following new section 
(and redesignate succeeding sections accordingly):

SEC. 4103. ESTABLISHMENT AND COMPOSITION OF THE COMMISSION.

  (a) Establishment of the Commission.--
          (1) In general.--On the Agency conversion date, there 
        shall be established a commission (hereinafter in this 
        section referred to as the ``Commission'') that shall 
        by operation of law succeed to all of the authorities 
        of the Director of the Agency granted under this title 
        and any other law.
          (2) Authority to prescribe regulations.--The 
        Commission may prescribe such regulations and issue 
        such orders in accordance with this title as the 
        Commission may determine to be necessary for carrying 
        out this title and all other laws within the 
        Commission's jurisdiction and shall exercise any 
        authorities granted under this title and all other laws 
        within the Commission's jurisdiction.
  (b) Composition of the Commission.--
          (1) In general.--The Commission shall be composed of 
        5 members who shall be appointed by the President, by 
        and with the advice and consent of the Senate, from 
        among individuals who--
                  (A) are citizens of the United States; and
                  (B) have strong competencies and experiences 
                related to consumer financial protection.
          (2) Initial appointments.--
                  (A) In general.--The initial members of the 
                Commission, other than the initial Chair, may 
                be appointed by the President, by and with the 
                advice and consent of the Senate, prior to the 
                Agency conversion date, but may not serve in 
                their positions until such date.
                  (B) Staggering.--Except as provided under 
                subsection (d)(1), the members of the 
                Commission shall serve staggered terms, which 
                initially shall be established by the President 
                for terms of 1, 2, 4, and 5 years, 
                respectively.
          (3) Terms.--
                  (A) In general.--Except as provided in 
                subsection (d)(1), each member of the 
                Commission, including the Chair, shall serve 
                for a term of 5 years.
                  (B) Removal for cause.--The President may 
                remove any member of the Commission only for 
                inefficiency, neglect of duty, or malfeasance 
                in office.
                  (C) Vacancies.--Any member of the Commission 
                appointed to fill a vacancy occurring before 
                the expiration of the term to which that 
                member's predecessor was appointed (including 
                the Chair) shall be appointed only for the 
                remainder of the term.
                  (D) Continuation of service.--Each member of 
                the Commission may continue to serve after the 
                expiration of the term of office to which that 
                member was appointed until a successor has been 
                appointed by the President and confirmed by the 
                Senate, except that a member may not continue 
                to serve more than 1 year after the date on 
                which that member's term would otherwise 
                expire.
                  (E) Other employment prohibited.--No member 
                of the Commission shall engage in any other 
                business, vocation, or employment.
  (c) Affiliation.--With respect to members appointed pursuant 
to subsection (b), not more than 3 shall be members of any one 
political party.
  (d) Chair of the Commission.--
          (1) Appointment.--
                  (A) Initial chair.--The first Chair of the 
                Commission shall be the Director or Acting 
                Director serving on the day before the Agency 
                conversion date, and such individual shall 
                serve in the position of Chair for a period of 
                3 years.
                  (B) Subsequent chairs.--Subsequent chairs 
                shall be appointed by the President from among 
                the members of the Commission to serve as the 
                Chair.
          (2) Authority.--The Chair shall be the principal 
        executive officer of the Agency, and shall exercise all 
        of the executive and administrative functions of the 
        Agency, including with respect to--
                  (A) the appointment and supervision of 
                personnel employed under the Agency (other than 
                personnel employed regularly and full time in 
                the immediate offices of members of the 
                Commission other than the Chair);
                  (B) the distribution of business among 
                personnel appointed and supervised by the Chair 
                and among administrative units of the Agency; 
                and
                  (C) the use and expenditure of funds.
          (3) Limitation.--In carrying out any of the Chair's 
        functions under the provisions of this subsection the 
        Chair shall be governed by general policies of the 
        Commission and by such regulatory decisions, findings, 
        and determinations as the Commission may by law be 
        authorized to make.
          (4) Requests or estimates related to 
        appropriations.--Requests or estimates for regular, 
        supplemental, or deficiency appropriations on behalf of 
        the Commission may not be submitted by the Chair 
        without the prior approval of the commission.
  (e) No Impairment by Reason of Vacancies.--No vacancy in the 
members of the Commission shall impair the right of the 
remaining members of the Commission to exercise all the powers 
of the Commission. Three members of the Commission shall 
constitute a quorum for the transaction of business, except 
that if there are only 3 members serving on the Commission 
because of vacancies in the Commission, 2 members of the 
Commission shall constitute a quorum for the transaction of 
business. If there are only 2 members serving on the Commission 
because of vacancies in the Commission, 2 members shall 
constitute a quorum for the 6-month period beginning on the 
date of the vacancy which caused the number of Commission 
members to decline to 2.
  (f) Seal.--The Commission shall have an official seal.
  (g) Compensation.--
          (1) Chair.--The Chair shall receive compensation at 
        the rate prescribed for level I of the Executive 
        Schedule under section 5313 of title 5, United States 
        Code.
          (2) Other members of the commission.--The 4 other 
        members of the Commission shall each receive 
        compensation at the rate prescribed for level II of the 
        Executive Schedule under section 5314 of title 5, 
        United States Code.
  (h) Initial Quorum Established.--During any time period prior 
to the confirmation of at least two members of the Commission 
under subsection (b)(2), one member of the Commission shall 
constitute a quorum for the transaction of business. Following 
the confirmation of at least 2 additional commissioners, the 
quorum requirements of subsection (e) shall apply.
  (i) Definitions.--Notwithstanding section 4002, for purposes 
of this section:
          (1) Agency.--The term ``Agency'' means the Consumer 
        Financial Protection Agency.
          (2) Director.--The term ``Director'' means the 
        Director of the Agency.

  Page 700, line 18, insert before ``other Federal'' the 
following: ``the Federal Trade Commission,''.

  Page 723, after line 19, insert the following:

                  (D) Offsetting collections.--Fees assessed 
                under this paragraph--
                          (i) shall not be collected for any 
                        fiscal year except to the extent 
                        provided in advance in appropriation 
                        Acts; and
                          (ii) shall be deposited and credited 
                        as offsetting collections to the 
                        account providing appropriations to the 
                        Agency.

  Page 730, strike lines 11 through page 731, line 3, and 
insert the following:

          (3) Use of funds.--
                  (A) Depository institution fund.--Funds 
                obtained by, transferred to, or credited to the 
                Consumer Financial Protection Agency Depository 
                Institution Fund shall be immediately available 
                to the Agency, and remain available until 
                expended, to pay the expenses of the Agency in 
                carrying out the duties and responsibilities of 
                the Director and the Agency, including the 
                payment of compensation of the Director and 
                officers and employees of the Agency.
                  (B) Nondepository institution fund.--Funds 
                obtained by, transferred to, or credited to the 
                Consumer Financial Protection Agency 
                Nondepository Institution Fund shall be 
                available to the Agency to the extent provided 
                in advance in appropriation Acts, and may 
                remain available until expended, to pay the 
                expenses of the Agency in carrying out the 
                duties and responsibilities of the Director and 
                the Agency, including the payment of 
                compensation of the Director and officers and 
                employees of the Agency.

  Page 747, after line 21, insert the following:

  (i) Preservation of Farm Credit Administration Authority.--No 
provision of this title shall be construed as modifying, 
limiting, or otherwise affecting the authority of the Farm 
Credit Administration.

  Page 712, line 19, after ``Treasury'' insert ``the Federal 
Trade Commission,''.

  Page 714, beginning on line 13, strike ``its central database 
on complaints''.

  Page 716, line 6, after ``Services'' insert ``and the House 
Committee on Energy and Commerce''.

  Page 716, after line 11, insert the following new section 
(and redesignate succeeding sections accordingly):

SEC. 4110. GAO SMALL BUSINESS STUDIES.

  (a) Studies Required.--Not later than the end of the 3-year 
period beginning on the designated transfer date, and also 3 
years thereafter, the Comptroller General of the United States 
shall carry out a study to examine the effects that regulations 
issued by the Agency have on small businesses.
  (b) Report.--At the conclusion of each study required under 
subsection (a), the Comptroller General of the United States 
shall issue a report to the Congress containing the finding and 
determinations made by the Comptroller General in carrying out 
such study.

  Page 724, strike line 2 and insert the following: 
``$200,000,000 for each of fiscal years 2010, 2011, 2012, 2013, 
and 2014.''.

  Page 743, strike line 14 and all that follows through page 
745, line 14, and insert the following:

          (1) The agency to have primary enforcement 
        authority.--To the extent that a Federal law authorizes 
        the Agency and another Federal agency to enforce a 
        provision of a law, the Agency shall have primary 
        enforcement authority to enforce the provision of that 
        Federal law with respect to any person in accordance 
        with this subsection.
          (2) Coordination with the federal trade commission.--
                  (A) Notice.--If the Federal Trade Commission 
                is authorized to enforce any Federal law 
                described in paragraph (1), or a regulation 
                prescribed under any such Federal law, either 
                the Agency or the Federal Trade Commission 
                shall serve written notice to the other of any 
                enforcement action prior to initiating such an 
                enforcement action, except that if the agency 
                or commission filing the action determines that 
                prior notice is not feasible, that agency or 
                commission may provide notice immediately upon 
                initiating such enforcement action.
                  (B) Intervention by either entity.--Upon 
                receiving any notice under subparagraph (A) 
                with respect to an enforcement action, the 
                Agency or Federal Trade Commission may 
                intervene in such enforcement action, and upon 
                intervening--
                          (i) be heard on all matters arising 
                        in such enforcement action; and
                          (ii) file petitions for appeal in 
                        such enforcement action.
                  (C) Pendency of action.--Whenever a civil 
                action has been instituted by or on behalf of 
                the Agency or the Federal Trade Commission for 
                any violation of any Federal law described in 
                paragraph (1), or a regulation prescribed under 
                any such Federal law, the other entity may not, 
                during the pendency of that action, institute a 
                civil action under such law or regulation 
                against any defendant named in the complaint in 
                such pending action for any violation alleged 
                in the complaint.
                  (D) Agreements between entities.--
                          (i) Negotiations authorized.--The 
                        Agency and the Federal Trade Commission 
                        may negotiate an agreement to establish 
                        procedures to ensure that the 
                        enforcement actions of the 2 agencies 
                        are appropriately coordinated.
                          (ii) Scope of negotiated agreement.--
                        The terms of any agreement negotiated 
                        pursuant to clause (i) may modify or 
                        supersede the provisions of 
                        subparagraphs (A), (B), and (C).

  Page 761, after line 13, insert the following new paragraph 
(and redesignated the succeeding paragraphs accordingly):

          (2) No exclusion for certain private education 
        loans.--Paragraph (1) shall not apply to any private 
        education loan (as defined in section 140(a) of the 
        Truth in Lending Act) provided by a private educational 
        lender (as defined in such section), including a 
        covered educational institution (as defined in such 
        section).

  Page 766, strike line 17 and all that follows through page 
768, line 3, and insert the following (and redesignate 
succeeding subsections accordingly):

  (f) Exclusion for Persons Regulated by the Farm Credit 
Administration.--No provision of this title shall be 
constructed as altering, amending, or affecting the authority 
of the Farm Credit Administration to adopt rules, institute 
enforcement proceedings, or take any other action with respect 
to a person regulated by the Farm Credit Administration. The 
Director and Agency shall have no authority to exercise any 
power to enforce this title, compel registration, or to order 
assessments with respect to a person regulated by the Farm 
Credit Administration. For purposes of this subsection, the 
term ``person regulated by the Farm Credit Administration'' 
means any Farm Credit System Institution.
  (g) Employee Benefit and Compensation Plans and Certain Other 
Arrangements Under the Internal Revenue Code of 1986.--
          (1) Authority retained by other agencies.--No 
        provision of this title shall be construed as altering, 
        amending, or affecting the authority of the Secretary 
        of the Treasury, the Secretary of Labor, or the 
        Commissioner of Internal Revenue to adopt regulations, 
        initiate enforcement proceedings, or take any actions 
        with respect to any specified plan or arrangement.
          (2) Activities not constituting financial 
        activities.--For the purposes of this title, a person 
        shall not be treated as having engaged in a financial 
        activity, as defined in section 4002(19), solely 
        because such person is a specified plan or arrangement 
        or is engaged in the activity of establishing or 
        maintaining, for the benefit of employees of such 
        person (or for members of an employee organization), 
        any specified plan or arrangement.
          (3) Regulatory coordination.--In the case of 
        regulations promulgated under this title that address 
        any financial activity specifically pertaining to the 
        administration and maintenance of a specified plan or 
        arrangement, the Director shall coordinate with the 
        Secretary of Labor and the Secretary of Treasury, as 
        appropriate.
          (4) Specified plan or arrangement.--For purposes of 
        this subsection, the term ``specified plan or 
        arrangement'' means any plan, account, or arrangement 
        described in section 220, 223, 401(a), 403(a), 403(b), 
        408, 408A, 529, or 530 of the Internal Revenue Code of 
        1986, or any employee benefit or compensation plan or 
        arrangement, including a plan that is subject to title 
        I of the Employee Retirement Income Security Act of 
        1974.

  Page 785, after line 6, insert the following new paragraph 
(and redesignate succeeding paragraphs accordingly):

          (4) Consultation with the federal trade commission.--
        In developing and implementing report requirements 
        under this subsection, the Agency shall consult with 
        the Federal Trade Commission, where appropriate.

  Page 800, line 2, insert after the period the following: 
``Nothing in this section shall be construed as limiting or 
superseding the protection provided to any provider or user 
qualifying for protection under section 230(c)(1) of the 
Communications Act of 1934 (47 U.S.C. 230(c)(1))''.

  Page 895, line 22, insert after the period the following: 
``This transfer shall not be subject to the provisions of 
section 3503 of title 5, United States Code''.

  Page 895, strike line 23 and all that follows through page 
896, line 15, and insert the following:

                  (B) Federal trade commission authority.--The 
                Agency shall have all powers and duties that 
                were vested in the Federal Trade Commission 
                that were contained within the enumerated 
                statutes, except as provided in section 
                4202(e), on the day before the designated 
                transfer date.

  Page 898, strike line 23 and all that follows through page 
901, line 3, and insert the following:

SEC. 4604. DESIGNATED TRANSFER DATE.

  The designated transfer date shall be 180 days after the date 
of enactment of this title.

  Page 903, strike lines 5 through 7 and insert the following:

  (c) Federal Trade Commission.--Section 4601(a)(5) shall

  Page 903, strike lines 17 through 25.

  Page 934, beginning on line 19, strike ``is confirmed by the 
Senate''.

  Page 1019, line 20, insert before the period the following: 
``Nothing in this section shall be construed as limiting or 
superseding the protection provided to any provider or user 
qualifying for protection under section 230(c)(1) of the 
Communications Act of 1934 (47 U.S.C. 230(c)(1)''.

  Page 1020, line 4-5, strike ``(without regard to any 
reference in such section to sections 556 and 557 of such 
title)''.

  Page 1020, after line 13, insert the following (and 
redesignate the succeeding paragraph accordingly):

          (4) in subsection (c) (as redesignated), by inserting 
        ``prescribed'' after ``rule''.

  Page 1020, after line 14, insert the following (and 
redesignate succeeding subparagraphs accordingly):

                  (A) in paragraph (1)(A) by striking 
                ``promulgated'' and inserting ``prescribed'';

  Page 1020, after line 20, insert the following:

  (d) Section 16(a)(2) of the Federal Trade Commission Act (15 
U.S.C. 56(a)(2)) is amended--
          (1) in subparagraph (D), by striking ``; or'' and 
        inserting a semicolon; and
          (2) by inserting after subparagraph (E) the 
        following:
                  ``(F) to obtain a civil penalty authorized 
                under any provision of law enforced by the 
                Commission.''.
  (e) Section 5(l) of the Federal Trade Commission Act (15 
U.S.C. 45(l)) is amended in the first sentence by inserting 
``the Commission or'' after ``brought by''.

  Strike section 7511.

  Page 123, after line 2, insert the following new section:

SEC. 1118. ANTITRUST SAVINGS CLAUSE.

  Nothing in this subtitle shall be construed to modify, 
impair, or supercede the operation of any of the antitrust 
laws. For purposes of the preceding sentence, the term 
``antitrust laws'' has the meaning given such term in 
subsection (a) of the first section of the Clayton Act, except 
that such term includes section 5 of the Federal Trade 
Commission Act to the extent that such section relates to 
unfair methods of competition.

  Page 253, line 23, strike ``8(c)(5)'' and insert ``8(c)''.

  Page 253, line 24, strike ``1828(c)(5)'' and insert 
``1828(c)''.

  Page 254, line 1, insert after ``(1)'' the following: ``in 
paragraph (5),''.

  Page 254, line 2, strike ``; and'' and insert a semicolon.

  Page 254, line 3, insert after ``(2)'' the following: ``in 
paragraph (5),''.

  Page 254, line 9, strike the period and insert ``; and''.

  Page 254, after line 9, insert the following new paragraph:

          (3) in paragraph (7)(B), by inserting ``subparagraphs 
        (A) and (B) of'' before ``paragraph''.

  Page 274, strike lines 3 through 6 and insert the following:

SEC. 1601. SHORT TITLE; PURPOSE.

  (a) Short Title.--This subtitle may be cited as the 
``Dissolution Authority for Large, Interconnected Financial 
Companies Act of 2009''.
  (b) Purpose.--The purpose of this subtitle is to protect the 
financial system of the United States in times of severe crisis 
by providing for the orderly resolution of large, 
interconnected financial companies whose failure could create, 
or increase, the risk of significant liquidity, credit, or 
other financial problems spreading among financial institutions 
or markets and thereby threaten the stability of the overall 
financial system of the United States. There shall be a strong 
presumption that resolution under the bankruptcy laws will 
remain the primary method of resolving financial companies, and 
the authorities contained in this subtitle will only be used in 
the most exigent circumstances.

  Page 282, line 15, after ``Urban Affairs'' insert ``and the 
Committee on the Judiciary''.

  Page 282, line 16, after ``Financial Services'' insert ``and 
the Committee on the Judiciary''.

  Page 290, line 20, strike ``The Corporation's'' and insert 
the following:

  (a) Termination and Exclusion of Bankruptcy.--The 
Corporation's

  Page 290, line 21, strike ``title'' and insert ``subtitle''.

  Page 291, after line 4, insert the following new subsections:

  (b) Conversion to Bankruptcy.--
          (1) Conversion.--The Corporation may at any time, 
        with the approval of the Secretary and after consulting 
        with the Council, convert the receivership of a covered 
        financial company to a proceeding under chapter 7 or 11 
        of title 11, United States Code, by filing a petition 
        against the covered financial company under section 
        303(m) of such title. The Corporation may serve as the 
        trustee for the covered financial company in 
        bankruptcy.
          (2) Bridge financial company.--The Corporation's 
        exercise of authority under paragraph (1) shall not 
        affect any powers or duties of the Corporation with 
        regard to any bridge financial company established 
        under section 1609(h).
  (c) Reporting to the Congress.--
          (1) In general.--
                  (A) Initial report.--Upon the appointment of 
                the Corporation as receiver under section 
                1604(a), the Corporation shall issue a report 
                on the issue described under paragraph (3)(A).
                  (B) Continuing reports.--At the end of each 
                180-day period after the appointment of the 
                Corporation as receiver under section 1604(a), 
                and continuing while the Corporation is acting 
                as receiver, the Corporation shall issue a 
                report on the issues described under 
                subparagraphs (A) through (C) of paragraph (3).
          (2) Committees to receive reports.--Reports issued 
        under this subsection shall be issued to the Committee 
        on Banking, Housing, and Urban Affairs and the 
        Committee on the Judiciary of the Senate and the 
        Committee on Financial Services and the Committee on 
        the Judiciary of the House of Representatives.
          (3) Reporting issues.--
                  (A) Why the receivership should continue 
                instead of converting the receivership into a 
                proceeding under chapter 7 or 11 of title 11, 
                United States Code.
                  (B) The extent to which unsecured creditors 
                are likely to receive at least as much as they 
                would receive if the receivership of the 
                covered financial company was converted to a 
                case under chapter 7 of title 11, United States 
                Code.
                  (C) An explanation of each instance where the 
                Corporation as receiver of a covered financial 
                company waived the requirement of 12 C.F.R. 
                Part 366 with respect to conflicts of interest 
                by any person in the private sector who was 
                retained to provide services to the Corporation 
                in connection with such receivership.

  Page 291, line 6, after ``may'' insert the following: ``, 
after following the notice and comment rulemaking requirements 
under the Administrative Procedure Act,''.

  Page 295, beginning on line 11, strike ``If a filing'' and 
all that follows through the end of the subclause and insert 
the following: ``If notification under section 7A of the 
Clayton Act is required with respect to such transaction, then 
the required waiting period shall end on the 15th day after the 
date on which the Attorney General and the Federal Trade 
Commission receive such notification, unless the waiting period 
is terminated earlier under subsection (b)(2) of such section, 
or is extended pursuant to subsection (e)(2) of such 
section.''.

   Page 296, beginning on line 4, strike ``1 or more of the 
covered financial companies'' and insert ``the covered 
financial company''.

  Page 296, line 6, strike ``approvals and filings'' and insert 
``approval and prior notification''.

  Page 296, line 8, strike ``transactions'' and insert 
``transaction''.

  Page 296, line 10, insert the following after the period: 
``The preceding sentence shall not otherwise modify, impair, or 
supercede the operation of any of the antitrust laws (as 
defined in subsection (a) of the first section of the Clayton 
Act, except that such term includes section 5 of the Federal 
Trade Commission Act to the extent that such section 5 relates 
to unfair methods of competition).''.

  Page 299, after line 14, insert the following new 
subparagraph:

                  (M) Appointment of consumer privacy 
                advisor.--
                          (i) Appointment.--Upon the 
                        appointment of the Corporation as 
                        receiver under section 1604(a), the 
                        Corporation shall appoint a Consumer 
                        Privacy Advisor.
                          (ii) Duties.--The Consumer Privacy 
                        Advisor appointed under clause (i) 
                        shall advise the Corporation with 
                        respect to--
                                  (I) the covered financial 
                                company's consumer privacy 
                                policies;
                                  (II) the potential losses or 
                                gains of privacy to consumers 
                                upon any sale, lease, or other 
                                transfer of material assets of 
                                the covered financial company;
                                  (III) the potential costs or 
                                benefits to consumers upon any 
                                sale, lease, or other transfer 
                                of material assets of the 
                                covered financial company; and
                                  (IV) the potential 
                                alternatives that would 
                                mitigate potential privacy 
                                loses or potential costs to 
                                consumers.

  Page 301, line 2, after ``shall'' insert the following: ``, 
after following the notice and comment rulemaking requirements 
under the Administrative Procedure Act,''.

  Page 324, after line 12, insert the following new 
subparagraphs (and redesignated succeeding subparagraphs 
accordingly):

                  (C) Wages, salaries, or commissions, 
                including vacation, severance, and sick leave 
                pay earned by an individual (other than 
                management responsible for the failed condition 
                of the covered financial company who have been 
                removed), subject to the limitations for such 
                payments contained in title 11, United States 
                Code, including the amount (11 U.S.C. 
                507(a)(4)) and restrictions on severance 
                payments to insiders (11 U.S.C. 503(c)).
                  (D) Contributions to employee benefit plans, 
                subject to the limitations in title 11, United 
                States Code (11 U.S.C. 507(a)(5)).

  Page 324, line 15, strike ``(D)'' and insert ``(F)''.

  Page 324, line 19, strike ``(E)'' and insert ``(G)''.

  Page 327, after line 8, insert the following new paragraph:

          (5) Rulemaking.--The Corporation shall, after 
        following the notice and comment rulemaking 
        requirements under the Administrative Procedure Act, 
        prescribe rules to carry out this section.

  Page 369, after line 3, insert the following new paragraph:

          (16) Authority regarding collective bargaining 
        agreements.--The Corporation as receiver for any 
        covered financial company shall not disaffirm or 
        repudiate any collective bargaining agreement to which 
        the covered financial company is a party unless the 
        Corporation determines that repudiation is necessary 
        for the orderly resolution of the covered financial 
        company after taking into consideration the cost to 
        taxpayers and the financial stability of the United 
        States.

  Page 384, beginning on line 18, strike ``If a filing'' and 
all that follows through the end of the subparagraph and insert 
the following: ``If notification under section 7A of the 
Clayton Act is required with respect to such transaction, then 
the required waiting period shall end on the 15th day after the 
date on which the Attorney General and the Federal Trade 
Commission receive such notification, unless the waiting period 
is terminated earlier under subsection (b)(2) of such section, 
or is extended pursuant to subsection (e)(2) of such 
section.''.

  Page 385, line 9, strike ``approvals and filings'' and insert 
``approval and prior notification''.

  Page 385, line 12, insert after the period the following: 
``The preceding sentence shall not otherwise modify, impair, or 
supercede the operation of any of the antitrust laws (as 
defined in subsection (a) of the first section of the Clayton 
Act, except that such term includes section 5 of the Federal 
Trade Commission Act to the extent that such section 5 relates 
to unfair methods of competition).''.

  Page 424, after line 21, insert the following new subsection:

  (u) Study of Payment of Consumer Claims.--Not later than 6 
months following the dissolution of a covered financial company 
under section 1603(b), the Comptroller General of the United 
States shall carry out a study, and report on such study to the 
Committee on Banking, Housing, and Urban Affairs and the 
Committee on the Judiciary of the Senate and the Committee on 
Financial Services and the Committee on the Judiciary of the 
House of Representatives, regarding the satisfaction of claims 
arising from violations of the provisions of the Truth in 
Lending Act, if any, in instances where any assets were 
transferred from such covered financial company.

  Page 432, line 7, strike ``Section'' and insert the 
following:

          (1) Section

  Page 432, after line 12, insert the following new paragraphs:

          (2) Section 303 of title 11, United States Code, is 
        amended--
                  (A) in subsection (h)--
                          (i) by striking ``or'' at the end of 
                        paragraph (1);
                          (ii) by striking the period at the 
                        end of paragraph (2) and inserting ``; 
                        or''; and
                          (iii) by adding at the end the 
                        following new paragraph:
          ``(3) an involuntary case is filed against a covered 
        financial company, as defined in section 1602(5) of the 
        Dissolution Authority for Large, Interconnected 
        Financial Companies Act of 2009, by the Federal Deposit 
        Insurance Corporation under section 1607 of that 
        Act.''; and
                  (B) by adding at the end the following new 
                subsection:
  ``(m) Notwithstanding subsections (a) and (b) of this section 
and section 109(b)(2), an involuntary case may be commenced by 
the Federal Deposit Insurance Corporation against a covered 
financial company (as defined in section 1602(5) of the 
Dissolution Authority for Large, Interconnected Financial 
Companies Act of 2009). Such involuntary case may be commenced 
by the Federal Deposit Insurance Corporation in accordance with 
section 1607 of that Act.''.
          (3) Title 11, United States Code, is amended by 
        inserting after section 303 the following new section:

``SEC. 304. CASES INVOLVING FDIC DISSOLUTION AUTHORITY.

  ``(a) Appointment.--In any case commenced by the Federal 
Deposit Insurance Corporation under section 303(m), on the 
request of the Federal Deposit Insurance Corporation, such 
Corporation shall be appointed to serve as trustee in such 
case, notwithstanding any other provision of this title.
  ``(b) Qualification.--Sections 321, 322, 324, and 326 shall 
not apply with respect to the appointment or service of such 
Corporation as trustee in any case so commenced.''.

  Page 436, after line 11, insert the following new section:

SEC. 1615. STUDY ON THE EFFECT OF SAFE HARBOR PROVISIONS IN INSOLVENCY 
                    CASES.

  (a) Study.--The Comptroller General of the United States 
shall conduct a study of the safe harbor provisions under 
Federal law for derivatives, swaps, and securities transactions 
addressing--
          (1) how the safe harbor provisions have been applied 
        in insolvency cases;
          (2) how such provisions impact the rights of parties 
        in interest in insolvency cases;
          (3) whether these provisions impede or interfere with 
        allowing a debtor a reasonable period of time to pursue 
        rehabilitation and reorganization; and
          (4) whether these provisions had an adverse impact on 
        the financial marketplace.
  (b) Report to the Congress.--Not later than 180 days after 
the date of the enactment of this title, the Comptroller 
General shall submit to the President pro tempore of the Senate 
and the Speaker of the House of Representatives a report on the 
results of the study conducted under subsection (a), together 
with any recommendations for legislation to address any adverse 
impacts presented by the Federal safe harbor provisions.

  Page 643, strike line 23, and all that follows through page 
644, line 7.

  Page 768, beginning on line 4, strike ``, Tax Preparers, and 
Attorneys'' and insert ``and Tax Preparers''.

  Page 769, line 5, insert ``or'' after the semicolon.

  Page 769, beginning on line 8, strike ``; or'' and insert a 
period.

  Page 769, strike line 10 and all that follows through page 
770, line 4 (and redesignate succeeding paragraphs 
accordingly).

  Page 770, line 15, strike ``or (1)(C)''.

  Page 770, line 20, strike ``, (1)(B) or (1)(C)'' and insert 
``or (1)(B)''.

  Page 776, after line 19, insert the following new subsection:

  (l) Exclusion for Practice of Law.--
          (1) In general.--Except as provided under paragraph 
        (2), nothing in this title shall apply with respect to 
        an activity engaged in by an attorney, or engaged in 
        under the direction of an attorney, as part of the 
        practice of law under the laws of a State in which the 
        attorney is licensed to practice law.
          (2) Rule of construction.--
                  (A) In general.--Paragraph (1) shall not be 
                construed to limit the exercise by the Director 
                and the Agency of any rulemaking, supervisory, 
                enforcement, or other authority, including 
                authority to order assessments, regarding any 
                activity that is a financial activity described 
                in any subparagraph of section 4002(19) and is 
                not engaged in as--
                          (i) part of the practice of law; or
                          (ii) incidental to the practice of 
                        law, to the extent that such activity 
                        is provided exclusively within the 
                        scope of the attorney-client 
                        relationship and is not otherwise 
                        provided by or under the direction of 
                        the attorney to any consumer who is not 
                        receiving legal advice or services from 
                        the attorney in connection with such 
                        activity.
                  (B) Construction.--Paragraph (1) shall not be 
                construed to limit the authority of the 
                Director and the Agency with respect to any 
                activity to the extent that such activity is 
                otherwise subject to any of the enumerated 
                consumer laws or the authorities transferred 
                under subtitles F or H.
          (3) Exception.--Notwithstanding paragraph (1), an 
        individual who provides legal advice or services 
        related to preventing a foreclosure shall be subject to 
        this title unless such individual provides foreclosure 
        prevention services in connection with--
                  (A) the preparation and filing of a 
                bankruptcy petition; or
                  (B) court proceedings to avoid a foreclosure.

  Page 844, strike lines 18 through 20 and redesignate 
succeeding paragraphs accordingly.

  Page 846, beginning on line 25, strike ``the district court 
of the United States for any district in which such person is 
found, resides, or transacts business'' and insert ``an 
appropriate United States district court may''.

  Page 847, line 5, strike ``shall have jurisdiction to''.

  Page 847, strike lines 9 through 11.

  Page 851, strike lines 1 through 10.

  Page 854, beginning on line 7, strike ``Any Agency 
investigator'' and insert ``The examination of any person 
pursuant to a demand for oral testimony served under this 
subsection shall be taken before an officer authorized to 
administer oaths and affirmations by the laws of the United 
States or of the place where the examination is held. The 
officer''.

  Page 854, beginning on line 12, strike ``investigator'' and 
insert ``officer''.

  Page 854, beginning on line 19, strike ``Agency 
investigator'' and insert ``officer''.

  Page 858, line 12, after ``it,'' insert ``the officer or''.

  Page 858, line 19, strike ``Agency investigator'' and insert 
``officer''.

  Page 858, line 23, insert ``the officer or'' before ``the 
Agency''.

  Page 880, line 11, strike ``may'' and insert ``shall''.

  Page 1118, beginning on line 20, strike ``and shall be 
subject'' and all that follows through line 21 and insert a 
period.

  Page 1144, strike line 16 and all that follows through the 
item after line 18, page 1145, and insert the following:

SEC. 7214. EXPANDED ACCESS TO GRAND JURY INFORMATION.

  Subsection (b) of section 3322 of title 18, United States 
Code, is amended--
          (1) in paragraph (1), by striking ``matters occurring 
        before a grand jury'' and inserting ``grand jury 
        information obtained'';
          (2) by redesignating paragraph (2) as paragraph (3);
          (3) in paragraph (3) (as so redesignated), by 
        inserting ``or (2)'' after ``(1)''; and
          (4) by inserting after paragraph (1), the following 
        new paragraph:
          ``(2) Upon motion of an attorney for the government, 
        a court may direct disclosure of grand jury information 
        obtained during an investigation of a securities law 
        violation to identified personnel of the Securities and 
        Exchange Commission--
                  ``(A) for use in relation to any matter 
                within the jurisdiction of the Commission; or
                  ``(B) to assist an attorney for the 
                government to whom matters have been disclosed 
                under subsection (a).''.
  At the end of the bill, insert the following new title:

       TITLE VII--MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

SEC. 9000. SHORT TITLE; DESIGNATION AS ENUMERATED CONSUMER LAW.

  (a) Short Title.--This title may be cited as the ``Mortgage 
Reform and Anti-Predatory Lending Act''.
  (b) Designation as Enumerated Consumer Law Under the Purview 
of the Consumer Financial Protection Agency.--Subtitles A, B, 
C, and E and sections 9501, 9502, and 9506, and the amendments 
made by such subtitles and sections, shall be enumerated 
consumer laws, as defined in section 4002(16), and come under 
the purview of the Consumer Financial Protection Agency for 
purposes of title IV, including the transfer of functions and 
personnel under subtitle F of title IV and the savings 
provisions of such subtitle.

      Subtitle A--Residential Mortgage Loan Origination Standards

SEC. 9001. 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. All 
        rule writing by the `Federal banking agencies' as 
        designated by the Mortgage Reform and Anti-Predatory 
        Lending Act will be coordinated through the Financial 
        Institutions Examination Council in consultation with 
        the Chairman of the State Liaison Committee.
          ``(3) Mortgage originator.--The term `mortgage 
        originator'--
                  ``(A) means any person who, for direct or 
                indirect compensation or gain, or in the 
                expectation of direct or indirect compensation 
                or gain--
                          ``(i) takes a residential mortgage 
                        loan application;
                          ``(ii) assists a consumer in 
                        obtaining or applying to obtain a 
                        residential mortgage loan; or
                          ``(iii) offers or negotiates terms of 
                        a residential mortgage loan;
                  ``(B) includes any person who represents to 
                the public, through advertising or other means 
                of communicating or providing information 
                (including the use of business cards, 
                stationery, brochures, signs, rate lists, or 
                other promotional items), that such person can 
                or will provide any of the services or perform 
                any of the activities described in subparagraph 
                (A);
                  ``(C) does not include any person who is (i) 
                not otherwise described in subparagraph (A) or 
                (B) and who performs purely administrative or 
                clerical tasks on behalf of a person who is 
                described in any such subparagraph, or (ii) an 
                employee of a retailer of manufactured homes 
                who is not described in clause (i) or (iii) of 
                subparagraph (A) and who does not advise a 
                consumer on loan terms (including rates, fees, 
                and other costs);
                  ``(D) does not include a person or entity 
                that only performs real estate brokerage 
                activities and is licensed or registered in 
                accordance with applicable State law, unless 
                such person or entity is compensated for 
                performing such brokerage activities by a 
                lender, a mortgage broker, or other mortgage 
                originator or by any agent of such lender, 
                mortgage broker, or other mortgage originator;
                  ``(E) does not include, with respect to a 
                residential mortgage loan, a person, estate, or 
                trust that provides mortgage financing for the 
                sale of 1 property in any 36-month period, 
                provided that such loan--
                          ``(i) is fully amortizing;
                          ``(ii) is with respect to a sale for 
                        which the seller determines in good 
                        faith and documents that the buyer has 
                        a reasonable ability to repay the loan;
                          ``(iii) has a fixed rate or an 
                        adjustable rate that is adjustable 
                        after 5 or more years, subject to 
                        reasonable annual and lifetime 
                        limitations on interest rate increases; 
                        and
                          ``(iv) meets any other criteria the 
                        Federal banking agencies may prescribe; 
                        and
                  ``(F) does not include a servicer or servicer 
                employees, agents and contractors, including 
                but not limited to those who offer or negotiate 
                terms of a residential mortgage loan for 
                purposes of renegotiating, modifying, replacing 
                and subordinating principal of existing 
                mortgages where borrowers are behind in their 
                payments, in default or have a reasonable 
                likelihood of being in default or falling 
                behind.
          ``(4) Nationwide mortgage licensing system and 
        registry.--The term `Nationwide Mortgage Licensing 
        System and Registry' has the same meaning as in the 
        Secure and Fair Enforcement for Mortgage Licensing Act 
        of 2008.
          ``(5) Other definitions relating to mortgage 
        originator.--For purposes of this subsection, a person 
        `assists a consumer in obtaining or applying to obtain 
        a residential mortgage loan' by, among other things, 
        advising on residential mortgage loan terms (including 
        rates, fees, and other costs), preparing residential 
        mortgage loan packages, or collecting information on 
        behalf of the consumer with regard to a residential 
        mortgage loan.
          ``(6) Residential mortgage loan.--The term 
        `residential mortgage loan' means any consumer credit 
        transaction that is secured by a mortgage, deed of 
        trust, or other equivalent consensual security interest 
        on a dwelling or on residential real property that 
        includes a dwelling, other than a consumer credit 
        transaction under an open end credit plan or, for 
        purposes of sections 129B and 129C and section 128(a) 
        (16), (17), and (18), and 128(f) and any regulations 
        promulgated thereunder, an extension of credit relating 
        to a plan described in section 101(53D) of title 11, 
        United States Code.
          ``(7) Secretary.--The term `Secretary', when used in 
        connection with any transaction or person involved with 
        a residential mortgage loan, means the Secretary of 
        Housing and Urban Development.
          ``(8) Securitization vehicle.--The term 
        `securitization vehicle' means a trust, corporation, 
        partnership, limited liability entity, special purpose 
        entity, or other structure that--
                  ``(A) is the issuer, or is created by the 
                issuer, of mortgage pass-through certificates, 
                participation certificates, mortgage-backed 
                securities, or other similar securities backed 
                by a pool of assets that includes residential 
                mortgage loans; and
                  ``(B) holds such loans.
          ``(9) Securitizer.--The term `securitizer' means the 
        person that transfers, conveys, or assigns, or causes 
        the transfer, conveyance, or assignment of, residential 
        mortgage loans, including through a special purpose 
        vehicle, to any securitization vehicle, excluding any 
        trustee that holds such loans solely for the benefit of 
        the securitization vehicle.
          ``(10) Servicer.--The term `servicer' has the same 
        meaning as in section 6(i)(2) of the Real Estate 
        Settlement Procedures Act of 1974.''.

SEC. 9002. RESIDENTIAL MORTGAGE LOAN ORIGINATION.

  (a) In General.--Chapter 2 of the Truth in Lending Act (15 
U.S.C. 1631 et seq.) is amended by inserting after section 129A 
the following new section:

``Sec. 129B. Residential mortgage loan origination

  ``(a) Finding and Purpose.--
          ``(1) Finding.--The Congress finds that economic 
        stabilization would be enhanced by the protection, 
        limitation, and regulation of the terms of residential 
        mortgage credit and the practices related to such 
        credit, while ensuring that responsible, affordable 
        mortgage credit remains available to consumers.
          ``(2) Purpose.--It is the purpose of this section and 
        section 129C to assure that consumers are offered and 
        receive residential mortgage loans on terms that 
        reasonably reflect their ability to repay the loans and 
        that are understandable and not unfair, deceptive or 
        abusive.
  ``(b) Duty of Care.--
          ``(1) Standard.--Subject to regulations prescribed 
        under this subsection, each mortgage originator shall, 
        in addition to the duties imposed by otherwise 
        applicable provisions of State or Federal law--
                  ``(A) be qualified and, when required, 
                registered and licensed as a mortgage 
                originator in accordance with applicable State 
                or Federal law, including the Secure and Fair 
                Enforcement for Mortgage Licensing Act of 2008;
                  ``(B) with respect to each consumer seeking 
                or inquiring about a residential mortgage loan, 
                diligently work to present the consumer with a 
                range of residential mortgage loan products for 
                which the consumer likely qualifies and which 
                are appropriate to the consumer's existing 
                circumstances, based on information known by, 
                or obtained in good faith by, the originator;
                  ``(C) make full, complete, and timely 
                disclosure to each such consumer in writing, 
                the receipt and understanding of which shall be 
                acknowledged by the signature of the mortgage 
                originator and the consumer, of--
                          ``(i) the comparative costs and 
                        benefits of each residential mortgage 
                        loan product offered, discussed, or 
                        referred to by the originator (and such 
                        comparative costs and benefits for each 
                        such product shall be presented side by 
                        side and the disclosures for each such 
                        product shall have equal prominence);
                          ``(ii) the nature of the originator's 
                        relationship to the consumer (including 
                        the cost of the services to be provided 
                        by the originator and a statement that 
                        the mortgage originator is or is not 
                        acting as an agent for the consumer, as 
                        the case may be); and
                          ``(iii) any relevant conflicts of 
                        interest between the originator and the 
                        consumer;
                  ``(D) certify to the creditor, with respect 
                to any transaction involving a residential 
                mortgage loan, that the mortgage originator has 
                fulfilled all requirements applicable to the 
                originator under this section with respect to 
                the transaction; and
                  ``(E) include on all loan documents any 
                unique identifier of the mortgage originator 
                provided by the Nationwide Mortgage Licensing 
                System and Registry.
          ``(2) Clarification of extent of duty to present 
        range of products and appropriate products.--
                  ``(A) No duty to offer products for which 
                originator is not authorized to take an 
                application.--Paragraph (1)(B) shall not be 
                construed as requiring--
                          ``(i) a mortgage originator to 
                        present to any consumer any specific 
                        residential mortgage loan product that 
                        is offered by a creditor which does not 
                        accept consumer referrals from, or 
                        consumer applications submitted by or 
                        through, such originator; or
                          ``(ii) a creditor to offer products 
                        that the creditor does not offer to the 
                        general public.
                  ``(B) Appropriate loan product.--For purposes 
                of paragraph (1)(B), a residential mortgage 
                loan shall be presumed to be appropriate for a 
                consumer if--
                          ``(i) the mortgage originator 
                        determines in good faith, based on then 
                        existing information and without 
                        undergoing a full underwriting process, 
                        that the consumer has a reasonable 
                        ability to repay and, in the case of a 
                        refinancing of an existing residential 
                        mortgage loan, receives a net tangible 
                        benefit, as determined in accordance 
                        with regulations prescribed under 
                        subsections (a) and (b) of section 
                        129C; and
                          ``(ii) the loan does not have 
                        predatory characteristics or effects 
                        (such as equity stripping and excessive 
                        fees and abusive terms) as determined 
                        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 1507 of the Secure and Fair 
        Enforcement for Mortgage Licensing Act of 2008.''.
  (b) Clerical Amendment.--The table of sections for chapter 2 
of the Truth in Lending Act is amended by inserting after the 
item relating to section 129 the following new items:

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

SEC. 9003. PROHIBITION ON STEERING INCENTIVES.

  Section 129B of the Truth in Lending Act (as added by section 
102(a)) is amended by inserting after subsection (b) the 
following new subsection:
  ``(c) Prohibition on Steering Incentives.--
          ``(1) In general.--For any mortgage loan, the total 
        amount of direct and indirect compensation from all 
        sources permitted to a mortgage originator may not vary 
        based on the terms of the loan (other than the amount 
        of the principal).
          ``(2) Restructuring of financing origination fee.--
                  ``(A) In general.--For any mortgage loan, a 
                mortgage originator may not arrange for a 
                consumer to finance through rate any 
                origination fee or cost except bona fide third 
                party settlement charges not retained by the 
                creditor or mortgage originator.
                  ``(B) Exception.--Notwithstanding paragraph 
                subparagraph (A), a mortgage originator may 
                arrange for a consumer to finance through rate 
                an origination fee or cost if--
                          ``(i) the mortgage originator does 
                        not receive any other compensation from 
                        the consumer except the compensation 
                        that is financed through rate; and
                          ``(ii) the mortgage is a qualified 
                        mortgage.
          ``(3) Regulations.--The Federal banking agencies, in 
        consultation with the Secretary and the Commission, 
        shall jointly prescribe regulations to prohibit--
                  ``(A) mortgage originators from steering any 
                consumer to a residential mortgage loan that--
                          ``(i) the consumer lacks a reasonable 
                        ability to repay (in accordance with 
                        regulations prescribed under section 
                        129C(a));
                          ``(ii) in the case of a refinancing 
                        of a residential mortgage loan, does 
                        not provide the consumer with a net 
                        tangible benefit (in accordance with 
                        regulations prescribed under section 
                        129C(b)); or
                          ``(iii) has predatory characteristics 
                        or effects (such as equity stripping, 
                        excessive fees, or abusive terms);
                  ``(B) mortgage originators from steering any 
                consumer from a residential mortgage loan for 
                which the consumer is qualified that is a 
                qualified mortgage (as defined in section 
                129C(c)(3)) to a residential mortgage loan that 
                is not a qualified mortgage;
                  ``(C) abusive or unfair lending practices 
                that promote disparities among consumers of 
                equal credit worthiness but of different race, 
                ethnicity, gender, or age;
                  ``(D) mortgage originators from assessing 
                excessive points and fees (as such term is 
                described under section 103(aa)(4) of the Truth 
                in Lending Act (15 U.S.C. 1602(aa)(4))) to a 
                consumer for the origination of a residential 
                mortgage loan based on such consumer's decision 
                to finance all or part of the payment through 
                the rate for such points and fees; and
                  ``(E) mortgage originators from--
                          ``(i) mischaracterizing the credit 
                        history of a consumer or the 
                        residential mortgage loans available to 
                        a consumer;
                          ``(ii) mischaracterizing or suborning 
                        the mischaracterization of the 
                        appraised value of the property 
                        securing the extension of credit; or
                          ``(iii) if unable to suggest, offer, 
                        or recommend to a consumer a loan that 
                        is not more expensive than a loan for 
                        which the consumer qualifies, 
                        discouraging a consumer from seeking a 
                        home mortgage loan secured by a 
                        consumer's principal dwelling from 
                        another mortgage originator.
          ``(4) Rules of construction.--No provision of this 
        subsection shall be construed as--
                  ``(A) permitting yield spread premiums or 
                other similar incentive compensation;
                  ``(B) affecting the mechanism for providing 
                the total amount of direct and indirect 
                compensation permitted to a mortgage 
                originator;
                  ``(C) limiting or affecting the amount of 
                compensation received by a creditor upon the 
                sale of a consummated loan to a subsequent 
                purchaser;
                  ``(D) restricting a consumer's ability to 
                finance, including through principal, any 
                origination fees or costs permitted under this 
                subsection, or the mortgage originator's 
                ability to receive such fees or costs 
                (including compensation) from any person, so 
                long as such fees or costs were fully and 
                clearly disclosed to the consumer earlier in 
                the application process as required by 
                129B(b)(1)(C)(i) and do not vary based on the 
                terms of the loan (other than the amount of the 
                principal) or the consumer's decision about 
                whether to finance such fees or costs; or
                  ``(E) prohibiting incentive payments to a 
                mortgage originator based on the number of 
                residential mortgage loans originated within a 
                specified period of time.''.

SEC. 9004. LIABILITY.

  Section 129B of the Truth in Lending Act is amended by 
inserting after subsection (c) (as added by section 103) the 
following new subsection:
  ``(d) Liability for Violations.--
          ``(1) In general.--For purposes of providing a cause 
        of action for any failure by a mortgage originator to 
        comply with any requirement imposed under this section 
        and any regulation prescribed under this section, 
        subsections (a) and (b) of section 130 shall be applied 
        with respect to any such failure by substituting 
        `mortgage originator' for `creditor' each place such 
        term appears in each such subsection.
          ``(2) Maximum.--The maximum amount of any liability 
        of a mortgage originator under paragraph (1) to a 
        consumer for any violation of this section shall not 
        exceed the greater of actual damages or an amount equal 
        to 3 times the total amount of direct and indirect 
        compensation or gain accruing to the mortgage 
        originator in connection with the residential mortgage 
        loan involved in the violation, plus the costs to the 
        consumer of the action, including a reasonable 
        attorney's fee.''.

SEC. 9005. REGULATIONS.

  (a) Discretionary Regulatory Authority.--Section 129B of the 
Truth in Lending Act is amended by inserting after subsection 
(d) (as added by section 104) the following new subsection:
  ``(e) Discretionary Regulatory Authority.--
          ``(1) In general.--The Federal banking agencies 
        shall, by regulations issued jointly, prohibit or 
        condition terms, acts or practices relating to 
        residential mortgage loans that the agencies find to be 
        abusive, unfair, deceptive, predatory, inconsistent 
        with reasonable underwriting standards, necessary or 
        proper to ensure that responsible, affordable mortgage 
        credit remains available to consumers in a manner 
        consistent with the purposes of this section and 
        section 129B, necessary or proper to effectuate the 
        purposes of this section and section 129C, to prevent 
        circumvention or evasion thereof, or to facilitate 
        compliance with such sections, or are not in the 
        interest of the borrower.
          ``(2) Application.--The regulations prescribed under 
        paragraph (1) shall be applicable to all residential 
        mortgage loans and shall be applied in the same manner 
        as regulations prescribed under section 105.
  ``(f) Section 129B and any regulations promulgated thereunder 
do not apply to an extension of credit relating to a plan 
described in section 101(53D) of title 11, United States 
Code.''.
  (b) Effective Date.--The regulations required or authorized 
to be prescribed under this subtitle or the amendments made by 
this subtitle--
          (1) shall be prescribed in final form before the end 
        of the 12-month period beginning on the date of the 
        enactment of this Act; and
          (2) shall take effect not later than 18 months after 
        the date of the enactment of this Act.
  (c) Technical and Conforming Amendments.--Section 129(l)(2) 
of the Truth in Lending Act (15 U.S.C. 1639(l)(2)) is amended 
by inserting ``referred to in section 103(aa)'' after ``loans'' 
each place such term appears.

SEC. 9006. STUDY OF SHARED APPRECIATION MORTGAGES.

  (a) Study.--The Secretary of Housing and Urban Development, 
in consultation with the Secretary of the Treasury and other 
relevant agencies, shall conduct a comprehensive study to 
determine prudent statutory and regulatory requirements 
sufficient to provide for the widespread use of shared 
appreciation mortgages to strengthen local housing markets, 
provide new opportunities for affordable homeownership, and 
enable homeowners at-risk of foreclosure to refinance or modify 
their mortgages.
  (b) Report.--Not later than the expiration of the 6-month 
period beginning on the date of the enactment of this Act, the 
Secretary of Housing and Urban Development shall submit a 
report to the Congress on the results of the study, which shall 
include recommendations for the regulatory and legislative 
requirements referred to in subsection (a).

              Subtitle B--Minimum Standards for Mortgages

SEC. 9101. ABILITY TO REPAY.

  (a) In General.--Chapter 2 of the Truth in Lending Act (15 
U.S.C. 1631 et seq.) is amended by inserting after section 129B 
(as added by section 102(a)) the following new section:

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

  ``(a) Ability To Repay.--
          ``(1) In general.--In accordance with regulations 
        prescribed jointly by the Federal banking agencies, in 
        consultation with the Commission, no creditor may make 
        a residential mortgage loan unless the creditor makes a 
        reasonable and good faith determination based on 
        verified and documented information that, at the time 
        the loan is consummated, the consumer has a reasonable 
        ability to repay the loan, according to its terms, and 
        all applicable taxes, insurance, and assessments.
          ``(2) Multiple loans.--If the creditor knows, or has 
        reason to know, that 1 or more residential mortgage 
        loans secured by the same dwelling will be made to the 
        same consumer, the creditor shall make a reasonable and 
        good faith determination, based on verified and 
        documented information, that the consumer has a 
        reasonable ability to repay the combined payments of 
        all loans on the same dwelling according to the terms 
        of those loans and all applicable taxes, insurance, and 
        assessments.
          ``(3) Basis for determination.--A determination under 
        this subsection of a consumer's ability to repay a 
        residential mortgage loan shall include consideration 
        of the consumer's credit history, current income, 
        expected income the consumer is reasonably assured of 
        receiving, current obligations, debt-to-income ratio, 
        employment status, and other financial resources other 
        than the consumer's equity in the dwelling or real 
        property that secures repayment of the loan.
          ``(4) Income verification.--In order to safeguard 
        against fraudulent reporting, any consideration of a 
        consumer's income history in making a determination 
        under this subsection shall include the verification of 
        such income by the use of--
                  ``(A) Internal Revenue Service transcripts of 
                tax returns provided by a third party; or
                  ``(B) such other similar method that quickly 
                and effectively verifies income documentation 
                by a third party as the Federal banking 
                agencies may jointly prescribe.
          ``(5) Nonstandard loans.--
                  ``(A) Variable rate loans that defer 
                repayment of any principal or interest.--For 
                purposes of determining, under this subsection, 
                a consumer's ability to repay a variable rate 
                residential mortgage loan that allows or 
                requires the consumer to defer the repayment of 
                any principal or interest, the creditor shall 
                use a fully amortizing repayment schedule.
                  ``(B) Interest-only loans.--For purposes of 
                determining, under this subsection, a 
                consumer's ability to repay a residential 
                mortgage loan that permits or requires the 
                payment of interest only, the creditor shall 
                use the payment amount required to amortize the 
                loan by its final maturity.
                  ``(C) Calculation for negative 
                amortization.--In making any determination 
                under this subsection, a creditor shall also 
                take into consideration any balance increase 
                that may accrue from any negative amortization 
                provision.
                  ``(D) Calculation process.--For purposes of 
                making any determination under this subsection, 
                a creditor shall calculate the monthly payment 
                amount for principal and interest on any 
                residential mortgage loan by assuming--
                          ``(i) the loan proceeds are fully 
                        disbursed on the date of the 
                        consummation of the loan;
                          ``(ii) the loan is to be repaid in 
                        substantially equal monthly amortizing 
                        payments for principal and interest 
                        over the entire term of the loan with 
                        no balloon payment, unless the loan 
                        contract requires more rapid repayment 
                        (including balloon payment), in which 
                        case the calculation shall be made (I) 
                        in accordance with regulations 
                        prescribed by the Federal banking 
                        agencies, with respect to any loan 
                        which has an annual percentage rate 
                        that does not exceed the average prime 
                        offer rate for a comparable 
                        transaction, as of the date the 
                        interest rate is set, by 1.5 or more 
                        percentage points for a first lien 
                        residential mortgage loan; and by 3.5 
                        or more percentage points for a 
                        subordinate lien residential mortgage 
                        loan; or (II) using the contract's 
                        repayment schedule, with respect to a 
                        loan which has an annual percentage 
                        rate, as of the date the interest rate 
                        is set, that is at least 1.5 percentage 
                        points above the average prime offer 
                        rate for a first lien residential 
                        mortgage loan; and 3.5 percentage 
                        points above the average prime offer 
                        rate for a subordinate lien residential 
                        mortgage loan; 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.
                  ``(E) Refinance of hybrid loans with current 
                lender.--In considering any application for 
                refinancing an existing hybrid loan by the 
                creditor into a standard loan to be made by the 
                same creditor in any case in which the sole 
                net-tangible benefit to the mortgagor would be 
                a reduction in monthly payment and the 
                mortgagor has not been delinquent on any 
                payment on the existing hybrid loan, the 
                creditor may--
                          ``(i) consider the mortgagor's good 
                        standing on the existing mortgage;
                          ``(ii) consider if the extension of 
                        new credit would prevent a likely 
                        default should the original mortgage 
                        reset and give such concerns a higher 
                        priority as an acceptable underwriting 
                        practice; and
                          ``(iii) offer rate discounts and 
                        other favorable terms to such mortgagor 
                        that would be available to new 
                        customers with high credit ratings 
                        based on such underwriting practice.
          ``(6) 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.
          ``(7) Reverse mortgages.--This subsection shall not 
        apply with respect to any reverse mortgage''.
  (b) Clerical Amendment.--The table of sections for chapter 2 
of the Truth in Lending Act is amended by inserting after the 
item relating to section 129B (as added by section 102(b)) the 
following new item:

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

SEC. 9102. NET TANGIBLE BENEFIT FOR REFINANCING OF RESIDENTIAL MORTGAGE 
                    LOANS.

  Section 129C of the Truth in Lending Act (as added by section 
9101(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. 9103. SAFE HARBOR AND REBUTTABLE PRESUMPTION.

  Section 129C of the Truth in Lending Act is amended by 
inserting after subsection (b) (as added by section 9102) the 
following new subsection:
  ``(c) Presumption of Ability To Repay and Net Tangible 
Benefit.--
          ``(1) In general.--Any creditor with respect to any 
        residential mortgage loan, and any assignee or 
        securitizer of such loan, may presume that the loan has 
        met the requirements of subsections (a) and (b), if the 
        loan is a qualified mortgage.
          ``(2) Definitions.--For purposes of this subsection, 
        the following definitions shall apply:
                  ``(A) Qualified mortgage.--The term 
                `qualified mortgage' means any residential 
                mortgage loan--
                          ``(i) that does not allow a consumer 
                        to defer repayment of principal or 
                        interest, or is not otherwise deemed a 
                        `non-traditional mortgage' under 
                        guidance, advisories, or regulations 
                        prescribed by the Federal Banking 
                        Agencies;
                          ``(ii) that does not provide for a 
                        repayment schedule that results in 
                        negative amortization at any time;
                          ``(iii) for which the terms are fully 
                        amortizing and which does not result in 
                        a balloon payment, where a `balloon 
                        payment' is a scheduled payment that is 
                        more than twice as large as the average 
                        of earlier scheduled payments;
                          ``(iv) which has an annual percentage 
                        rate that does not exceed the average 
                        prime offer rate for a comparable 
                        transaction, as of the date the 
                        interest rate is set--
                                  ``(I) by 1.5 or more 
                                percentage points, in the case 
                                of a first lien residential 
                                mortgage loan having a original 
                                principal obligation amount 
                                that is equal to or less than 
                                the amount of the maximum 
                                limitation on the original 
                                principal obligation of 
                                mortgage in effect for a 
                                residence of the applicable 
                                size, as of the date of such 
                                interest rate set, pursuant to 
                                the sixth sentence of section 
                                305(a)(2) the Federal Home Loan 
                                Mortgage Corporation Act (12 
                                U.S.C. 1454(a)(2));
                                  ``(II) by 2.5 or more 
                                percentage points, in the case 
                                of a first lien residential 
                                mortgage loan having a original 
                                principal obligation amount 
                                that is more than the amount of 
                                the maximum limitation on the 
                                original principal obligation 
                                of mortgage in effect for a 
                                residence of the applicable 
                                size, as of the date of such 
                                interest rate set, pursuant to 
                                the sixth sentence of section 
                                305(a)(2) the Federal Home Loan 
                                Mortgage Corporation Act (12 
                                U.S.C. 1454(a)(2)); and
                                  ``(III) by 3.5 or more 
                                percentage points, in the case 
                                of a subordinate lien 
                                residential mortgage loan;
                          ``(v) for which the income and 
                        financial resources relied upon to 
                        qualify the obligors on the loan are 
                        verified and documented;
                          ``(vi) in the case of a fixed rate 
                        loan, for which the underwriting 
                        process is based on a payment schedule 
                        that fully amortizes the loan over the 
                        loan term and takes into account all 
                        applicable taxes, insurance, and 
                        assessments;
                          ``(vii) in the case of an adjustable 
                        rate loan, for which the underwriting 
                        is based on the maximum rate permitted 
                        under the loan during the first seven 
                        years, and a payment schedule that 
                        fully amortizes the loan over the loan 
                        term and takes into account all 
                        applicable taxes, insurance, and 
                        assessments;
                          ``(viii) that does not cause the 
                        consumer's total monthly debts, 
                        including amounts under the loan, to 
                        exceed a percentage established by 
                        regulation of the consumer's monthly 
                        gross income or such other maximum 
                        percentage of such income as may be 
                        prescribed by regulation under 
                        paragraph (4), and such rules shall 
                        also take into consideration the 
                        consumer's income available to pay 
                        regular expenses after payment of all 
                        installment and revolving debt;
                          ``(ix) for which the total points and 
                        fees payable in connection with the 
                        loan do not exceed 2 percent of the 
                        total loan amount, where `points and 
                        fees' means points and fees as defined 
                        by Section 103(aa)(4) of the Truth in 
                        Lending Act (15 U.S.C. 1602(aa)(4)); 
                        and
                          ``(x) for which the term of the loan 
                        does not exceed 30 years, except as 
                        such term may be extended under 
                        paragraph (4).
                  ``(B) Average prime offer rate.--The term 
                `average prime offer rate' means an annual 
                percentage rate that is derived from average 
                interest rates, points, and other loan pricing 
                terms currently offered to consumers by a 
                representative sample of creditors for mortgage 
                transactions that have low risk pricing 
                characteristics.
                  ``(C) Reverse mortgages.--For purposes of 
                this subsection, the term `qualified mortgage' 
                includes any reverse mortgage that complies 
                with the condition established in subparagraph 
                (A)(iv).
          ``(3) Publication of average prime offer rate and apr 
        thresholds.--The Board--
                  ``(A) shall publish, and update at least 
                weekly, average prime offer rates;
                  ``(B) may publish multiple rates based on 
                varying types of mortgage transactions; and
                  ``(C) shall adjust the thresholds of 1.50 
                percentage points in paragraph (2)(A)(iv)(I), 
                2.50 percentage points in paragraph 
                (2)(A)(iv)(II), and 3.50 percentage points in 
                paragraph (2)(A)(v)(III), as necessary to 
                reflect significant changes in market 
                conditions and to effectuate the purposes of 
                the Mortgage Reform and Anti-Predatory Lending 
                Act.
          ``(4) Regulations.--
                  ``(A) In general.--The Federal banking 
                agencies shall jointly prescribe regulations to 
                carry out the purposes of this subsection.
                  ``(B) Revision of safe harbor criteria.--
                          ``(i) In general.--The Federal 
                        banking agencies may jointly prescribe 
                        regulations that revise, add to, or 
                        subtract from the criteria that define 
                        a qualified mortgage upon a finding 
                        that such regulations are necessary or 
                        proper to ensure that responsible, 
                        affordable mortgage credit remains 
                        available to consumers in a manner 
                        consistent with the purposes of this 
                        section, necessary and appropriate to 
                        effectuate the purposes of this section 
                        and section 129B, to prevent 
                        circumvention or evasion thereof, or to 
                        facilitate compliance with such 
                        sections.
                          ``(ii) Loan definition.--The 
                        following agencies shall, in 
                        consultation with the Federal banking 
                        agencies, prescribe rules defining the 
                        types of loans they insure, guarantee 
                        or administer, as the case may be, that 
                        are Qualified Mortgages for purposes of 
                        subsection (c)(1)(A) upon a finding 
                        that such rules are consistent with the 
                        purposes of this section and section 
                        129B, to prevent circumvention or 
                        evasion thereof, or to facilitate 
                        compliance with such sections--
                                  ``(I) The Department of 
                                Housing and Urban Development, 
                                with regard to mortgages 
                                insured under title II of the 
                                National Housing Act (12 U.S.C. 
                                1707 et seq.);
                                  ``(II) The Secretary of 
                                Veterans Affairs, with regard 
                                to a loan made or guaranteed by 
                                the Secretary of Veterans 
                                Affairs;
                                  ``(III) The Secretary of 
                                Agriculture, with regard loans 
                                guaranteed by the Secretary of 
                                Agriculture pursuant to 42 
                                U.S.C. 1472(h);
                                  ``(IV) The Federal Housing 
                                Finance Agency, with regard to 
                                loans meeting the conforming 
                                loan standards of the Federal 
                                National Mortgage Corporation 
                                or the Federal Home Loan 
                                Mortgage Corporation; and
                                  ``(V) The Rural Housing 
                                Service, with regard to loans 
                                insured by the Rural Housing 
                                Service.''.

SEC. 9104. LIABILITY.

  Section 129C of the Truth in Lending Act is amended by 
inserting after subsection (c) (as added by section 9103) the 
following new subsection:
  ``(d) Liability for Violations.--
          ``(1) In general.--
                  ``(A) Rescission.--In addition to any other 
                liability under this title for a violation by a 
                creditor of subsection (a) or (b) (for example 
                under section 130) and subject to the statute 
                of limitations in paragraph (9), a civil action 
                may be maintained against a creditor for a 
                violation of subsection (a) or (b) with respect 
                to a residential mortgage loan for the 
                rescission of the loan, and such additional 
                costs as the obligor may have incurred as a 
                result of the violation and in connection with 
                obtaining a rescission of the loan, including a 
                reasonable attorney's fee.
                  ``(B) Cure.--A creditor shall not be liable 
                for rescission under subparagraph (A) with 
                respect to a residential mortgage loan if, no 
                later than 90 days after the receipt of 
                notification from the consumer that the loan 
                violates subsection (a) or (b), the creditor, 
                acting in good faith, a cure.
          ``(2) Limited assignee and securitizer liability.--
        Notwithstanding sections 125(e) and 131 and except as 
        provided in paragraph (3), a civil action which may be 
        maintained against a creditor with respect to a 
        residential mortgage loan for a violation of subsection 
        (a) or (b) may be maintained against any assignee or 
        securitizer of such residential mortgage loan, who has 
        acted in good faith, for the following liabilities 
        only:
                  ``(A) Rescission of the loan.
                  ``(B) Such additional costs as the obligor 
                may have incurred as a result of the violation 
                and in connection with obtaining a rescission 
                of the loan, including a reasonable attorney's 
                fee.
          ``(3) Assignee and securitizer exemption.--No 
        assignee or securitizer of a residential mortgage loan 
        that has exercised reasonable due diligence in 
        complying with the requirements of subsections (a) and 
        (b), consistent with reasonable due diligence practices 
        prescribed by the Federal banking agencies, shall be 
        liable under paragraph (2) with respect to such loan 
        if, no later than 90 days after the receipt of 
        notification from the consumer that the loan violates 
        subsection (a) or (b), the assignee or securitizer 
        provides a cure so that the loan satisfies the 
        requirements of subsections (a) and (b).
          ``(4) Absent parties.--
                  ``(A) Absent creditor.--Notwithstanding the 
                exemption provided in paragraph (3), if the 
                creditor with respect to a residential mortgage 
                loan made in violation of subsection (a) or (b) 
                has ceased to exist as a matter of law or has 
                filed for bankruptcy protection under title 11, 
                United States Code, or has had a receiver, 
                conservator, or liquidating agent appointed, a 
                consumer may maintain a civil action against an 
                assignee to cure the residential mortgage loan, 
                plus the costs and reasonable attorney's fees 
                incurred in obtaining such remedy.
                  ``(B) Absent creditor and assignee.--
                Notwithstanding the exemption provided in 
                paragraph (3), if the creditor with respect to 
                a residential mortgage loan made in violation 
                of subsection (a) or (b) and each assignee of 
                such loan have ceased to exist as a matter of 
                law or have filed for bankruptcy protection 
                under title 11, United States Code, or have had 
                receivers, conservators, or liquidating agents 
                appointed, the consumer may maintain the civil 
                action referred to in subparagraph (A) against 
                the securitizer.
          ``(5) Cure defined.--For purposes of this subsection, 
        the term `cure' means, with respect to a residential 
        mortgage loan that violates subsection (a) or (b), the 
        modification or refinancing, at no cost to the 
        consumer, of the loan to provide terms that satisfy the 
        requirements of subsections (a) and (b) and the payment 
        of such additional costs as the obligor may have 
        incurred in connection with obtaining a cure of the 
        loan, including a reasonable attorney's fee.
          ``(6) Disagreement over cure.--If any creditor, 
        assignee, or securitizer and a consumer fail to reach 
        agreement on a cure with respect to a residential 
        mortgage loan that violates subsection (a) or (b), or 
        the consumer fails to accept a cure proffered by a 
        creditor, assignee, or securitizer--
                  ``(A) the creditor, assignee, or securitizer 
                may provide the cure; and
                  ``(B) the consumer may challenge the adequacy 
                of the cure during the 6-month period beginning 
                when the cure is provided.
        If the consumer's challenge, under this paragraph, of a 
        cure is successful, the creditor, assignee, or 
        securitizer shall be liable to the consumer for 
        rescission of the loan and such additional costs under 
        paragraph (2).
          ``(7) Inability to provide or obtain rescission.--If 
        a creditor, assignee, or securitizer cannot provide, or 
        a consumer cannot obtain, rescission under paragraph 
        (1) or (2), the liability of such creditor, assignee, 
        or securitizer shall be met by providing the financial 
        equivalent of a rescission, together with such 
        additional costs as the obligor may have incurred as a 
        result of the violation and in connection with 
        obtaining a rescission of the loan, including a 
        reasonable attorney's fee.
          ``(8) No class actions against assignee or 
        securitizer under paragraph (2).--Only individual 
        actions may be brought against an assignee or 
        securitizer of a residential mortgage loan for a 
        violation of subsection (a) or (b).
          ``(9) Statute of limitations.--The liability of a 
        creditor, assignee, or securitizer under this 
        subsection shall apply in any original action against a 
        creditor under paragraph (1) or an assignee or 
        securitizer under paragraph (2) which is brought 
        before--
                  ``(A) in the case of any residential mortgage 
                loan other than a loan to which subparagraph 
                (B) applies, the end of the 3-year period 
                beginning on the date the loan is consummated; 
                or
                  ``(B) in the case of a residential mortgage 
                loan that provides for a fixed interest rate 
                for an introductory period and then resets or 
                adjusts to a variable rate or that provides for 
                a nonamortizing payment schedule and then 
                converts to an amortizing payment schedule, the 
                earlier of--
                          ``(i) the end of the 1-year period 
                        beginning on the date of such reset, 
                        adjustment, or conversion; or
                          ``(ii) the end of the 6-year period 
                        beginning on the date the loan is 
                        consummated.
          ``(10) Trustees, 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, any trustee that holds such loans solely for 
        the benefit of the securitization vehicle, the pools of 
        such loans or any original or subsequent purchaser of 
        any interest in the securitization vehicle or any 
        instrument representing a direct or indirect interest 
        in such pool.
  ``(e) Obligation of Securitizers, and Preservation of 
Borrower Remedies.--
          ``(1) Obligation to retain access.--Any securitizer 
        of a residential mortgage loan sold or to be sold as 
        part of a securitization vehicle shall, in any document 
        or contract providing for the transfer, conveyance, or 
        the establishment of such securitization vehicle, 
        reserve the right and preserve the ability--
                  ``(A) to identify and obtain access to any 
                such loan;
                  ``(B) to acquire any such loan in the event 
                of a violation of subsection (a) or (b) of this 
                section; and
                  ``(C) to provide to the consumer any and all 
                remedies provided for under this title for any 
                violation of this title.
          ``(2) Additional damages.--Any creditor, assignee, or 
        securitizer of a residential mortgage loan that is 
        subject to a remedy under subsection (d) and has failed 
        to comply with paragraph (1) shall be subject to 
        additional exemplary or punitive damages not to exceed 
        the original principal balance of such loan.
          ``(3) Contact information notice.--The servicer with 
        respect to a residential mortgage loan shall provide a 
        written notice to a consumer identifying the name and 
        contact information of the creditor or any assignee or 
        securitizer who should be contacted by the consumer for 
        any reason concerning the consumer's rights with 
        respect to the loan. Such notice shall be provided--
                  ``(A) upon request of the consumer;
                  ``(B) whenever there is a change in ownership 
                of a residential mortgage loan; or
                  ``(C) on a regular basis, not less than 
                annually.
  ``(f) Rules To Establish Process.--The Board shall promulgate 
rules to govern the rescission process established for 
violations of subsections (a) and (b) of this section. Such 
rules shall provide that notice given to a servicer or holder 
is sufficient notice regardless of the identity of the party or 
the parties liable under this title.''.

SEC. 9105. DEFENSE TO FORECLOSURE.

  Section 129C of the Truth in Lending Act is amended by 
inserting after subsection (f) (as added by section 9104) the 
following new subsections:
  ``(g) Defense to Foreclosure.--Notwithstanding any other 
provision of law--
          ``(1) when the holder of a residential mortgage loan 
        or anyone acting for such holder initiates a judicial 
        or nonjudicial foreclosure--
                  ``(A) a consumer who has the right to rescind 
                under this section with respect to such loan 
                against the creditor or any assignee or 
                securitizer may assert such right as a defense 
                to foreclosure or counterclaim to such 
                foreclosure against the holder, or
                  ``(B) if the foreclosure proceeding begins 
                after the end of the period during which a 
                consumer may bring an action for rescission 
                under subsection (d) and the consumer would 
                have had a valid basis for such an action if it 
                had been brought before the end of such period, 
                the consumer may seek actual damages incurred 
                by reason of the violation which gave rise to 
                the right of rescission, together with costs of 
                the action, including a reasonable attorney's 
                fee against the creditor or any assignee or 
                securitizer; and
          ``(2) such holder or anyone acting for such holder or 
        any other applicable third party may sell, transfer, 
        convey, or assign a residential mortgage loan to a 
        creditor, any assignee, or any securitizer, or their 
        designees, subject to the rights of the consumer 
        described in this subsection, to effect a rescission or 
        cure.''.

SEC. 9106. ADDITIONAL STANDARDS AND REQUIREMENTS.

  (a) In General.--Section 129C of the Truth in Lending Act is 
amended by inserting after subsection (g) (as added by section 
9105) the following new subsections:
  ``(h) Prohibition on Certain Prepayment Penalties.--
          ``(1) Prohibited on certain loans.--A residential 
        mortgage loan that is not a `qualified mortgage' may 
        not contain terms under which a consumer must pay a 
        prepayment penalty for paying all or part of the 
        principal after the loan is consummated. For purposes 
        of this subsection, a `qualified mortgage' may not 
        include a residential mortgage loan that has an 
        adjustable rate.
          ``(2) Phased-out penalties on qualified mortgages.--A 
        qualified mortgage (as defined in subsection (c)) may 
        not contain terms under which a consumer must pay a 
        prepayment penalty for paying all or part of the 
        principal after the loan is consummated in excess of 
        the following limitations:
                  ``(A) During the 1-year period beginning on 
                the date the loan is consummated, the 
                prepayment penalty shall not exceed an amount 
                equal to 3 percent of the outstanding balance 
                on the loan.
                  ``(B) During the 1-year period beginning 
                after the period described in subparagraph (A), 
                the prepayment penalty shall not exceed an 
                amount equal to 2 percent of the outstanding 
                balance on the loan.
                  ``(C) During the 1-year period beginning 
                after the 1-year period described in 
                subparagraph (B), the prepayment penalty shall 
                not exceed an amount equal to 1 percent of the 
                outstanding balance on the loan.
                  ``(D) After the end of the 3-year period 
                beginning on the date the loan is consummated, 
                no prepayment penalty may be imposed on a 
                qualified mortgage.
          ``(3) Option for no prepayment penalty required.--A 
        creditor may not offer a consumer a residential 
        mortgage loan product that has a prepayment penalty for 
        paying all or part of the principal after the loan is 
        consummated as a term of the loan without offering the 
        consumer a residential mortgage loan product that does 
        not have a prepayment penalty as a term of the loan.
  ``(i) Single Premium Credit Insurance Prohibited.--No 
creditor may finance, directly or indirectly, in connection 
with any residential mortgage loan or with any extension of 
credit under an open end consumer credit plan secured by the 
principal dwelling of the consumer (other than a reverse 
mortgage), any credit life, credit disability, credit 
unemployment or credit property insurance, or any other 
accident, loss-of-income, life or health insurance, or any 
payments directly or indirectly for any debt cancellation or 
suspension agreement or contract, except that--
          ``(1) insurance premiums or debt cancellation or 
        suspension fees calculated and paid in full on a 
        monthly basis shall not be considered financed by the 
        creditor; and
          ``(2) this subsection shall not apply to credit 
        unemployment insurance for which the unemployment 
        insurance premiums are reasonable, the creditor 
        receives no direct or indirect compensation in 
        connection with the unemployment insurance premiums, 
        and the unemployment insurance premiums are paid 
        pursuant to another insurance contract and not paid to 
        an affiliate of the creditor.
  ``(j) Arbitration.--
          ``(1) In general.--No residential mortgage loan and 
        no extension of credit under an open end consumer 
        credit plan secured by the principal dwelling of the 
        consumer, other than a reverse mortgage, may include 
        terms which require arbitration or any other 
        nonjudicial procedure as the method for resolving any 
        controversy or settling any claims arising out of the 
        transaction.
          ``(2) Post-controversy agreements.--Subject to 
        paragraph (3), paragraph (1) shall not be construed as 
        limiting the right of the consumer and the creditor, 
        any assignee, or any securitizer to agree to 
        arbitration or any other nonjudicial procedure as the 
        method for resolving any controversy at any time after 
        a dispute or claim under the transaction arises.
          ``(3) No waiver of statutory cause of action.--No 
        provision of any residential mortgage loan or of any 
        extension of credit under an open end consumer credit 
        plan secured by the principal dwelling of the consumer 
        (other than a reverse mortgage), and no other agreement 
        between the consumer and the creditor relating to the 
        residential mortgage loan or extension of credit 
        referred to in paragraph (1), shall be applied or 
        interpreted so as to bar a consumer from bringing an 
        action in an appropriate district court of the United 
        States, or any other court of competent jurisdiction, 
        pursuant to section 130 or any other provision of law, 
        for damages or other relief in connection with any 
        alleged violation of this section, any other provision 
        of this title, or any other Federal law.
  ``(k) Mortgages With Negative Amortization.--No creditor may 
extend credit to a borrower in connection with a consumer 
credit transaction under an open or closed end consumer credit 
plan secured by a dwelling or residential real property that 
includes a dwelling, other than a reverse mortgage, that 
provides or permits a payment plan that may, at any time over 
the term of the extension of credit, result in negative 
amortization unless, before such transaction is consummated--
          ``(1) the creditor provides the consumer with a 
        statement that--
                  ``(A) the pending transaction will or may, as 
                the case may be, result in negative 
                amortization;
                  ``(B) describes negative amortization in such 
                manner as the Federal banking agencies shall 
                prescribe;
                  ``(C) negative amortization increases the 
                outstanding principal balance of the account; 
                and
                  ``(D) negative amortization reduces the 
                consumer's equity in the dwelling or real 
                property; and
          ``(2) in the case of a first-time borrower with 
        respect to a residential mortgage loan that is not a 
        qualified mortgage, the first-time borrower provides 
        the creditor with sufficient documentation to 
        demonstrate that the consumer received homeownership 
        counseling from organizations or counselors certified 
        by the Secretary of Housing and Urban Development as 
        competent to provide such counseling.''.
  (b) Conforming Amendment Relating to Enforcement.--Section 
108(a) of the Truth in Lending Act (15 U.S.C. 1607(a)) is 
amended by inserting after paragraph (6) the following new 
paragraph:
          ``(7) sections 21B and 21C of the Securities Exchange 
        Act of 1934, in the case of a broker or dealer, other 
        than a depository institution, by the Securities and 
        Exchange Commission.''.
  (c) Protection Against Loss of Anti-Deficiency Protection.--
Section 129C of the Truth in Lending Act is amended by 
inserting after subsection (k) (as added by subsection (a) of 
this section) the following new subsection (and designated 
succeeding subsections accordingly):
  ``(l) Protection Against Loss of Anti-Deficiency 
Protection.--
          ``(1) Definition.--For purposes of this subsection, 
        the term `anti-deficiency law' means the law of any 
        State which provides that, in the event of foreclosure 
        on the residential property of a consumer securing a 
        mortgage, the consumer is not liable, in accordance 
        with the terms and limitations of such State law, for 
        any deficiency between the sale price obtained on such 
        property through foreclosure and the outstanding 
        balance of the mortgage.
          ``(2) Notice at time of consummation.--In the case of 
        any residential mortgage loan that is, or upon 
        consummation will be, subject to protection under an 
        anti-deficiency law, the creditor or mortgage 
        originator shall provide a written notice to the 
        consumer describing the protection provided by the 
        anti-deficiency law and the significance for the 
        consumer of the loss of such protection before such 
        loan is consummated.
          ``(3) Notice before refinancing that would cause loss 
        of protection.--In the case of any residential mortgage 
        loan that is subject to protection under an anti-
        deficiency law, if a creditor or mortgage originator 
        provides an application to a consumer, or receives an 
        application from a consumer, for any type of 
        refinancing for such loan that would cause the loan to 
        lose the protection of such anti-deficiency law, the 
        creditor or mortgage originator shall provide a written 
        notice to the consumer describing the protection 
        provided by the anti-deficiency law and the 
        significance for the consumer of the loss of such 
        protection before any agreement for any such 
        refinancing is consummated.''.
  (d) Policy Regarding Acceptance of Partial Payment.--Section 
129C of the Truth in Lending Act is amended by inserting after 
subsection (l) (as added by subsection (c)) the following new 
subsection:
  ``(m) Policy Regarding Acceptance of Partial Payment.--In the 
case of any residential mortgage loan, a creditor shall 
disclose prior to settlement or, in the case of a person 
becoming a creditor with respect to an existing residential 
mortgage loan, at the time such person becomes a creditor--
          ``(1) the creditor's policy regarding the acceptance 
        of partial payments; and
          ``(2) if partial payments are accepted, how such 
        payments will be applied to such mortgage and if such 
        payments will be placed in escrow.''.

SEC. 9107. RULE OF CONSTRUCTION.

  Except as otherwise expressly provided in section 129B or 
129C of the Truth in Lending Act (as added by this subtitle), 
no provision of such section 129B or 129C shall be construed as 
superseding, repealing, or affecting any duty, right, 
obligation, privilege, or remedy of any person under any other 
provision of the Truth in Lending Act or any other provision of 
Federal or State law.

SEC. 9108. EFFECT ON STATE LAWS.

  (a) In General.--Except as provided in subsection (b), 
section 129C(d) of the Truth in Lending Act (as added by 
section 9104) shall supersede any State law to the extent that 
it provides additional remedies against any assignee, 
securitizer, or securitization vehicle for a violation of 
subsection (a) or (b) of section 129C of such Act or any other 
State law the terms of which address the specific subject 
matter of subsection (a) (determination of ability to repay) or 
(b) (requirement of a net tangible benefit) of section 129C of 
such Act, and the remedies described in section 129C(d) shall 
constitute the sole remedies against any assignee, securitizer, 
or securitization vehicle for such violations.
  (b) Rules of Construction.--No provision of this section 
shall be construed as limiting--
          (1) the application of any State law, or the 
        availability of remedies under such law, against a 
        creditor for a particular residential mortgage loan 
        regardless of whether such creditor also acts as an 
        assignee, securitizer, or securitization vehicle for 
        such loan;
          (2) the application of any State law, or the 
        availability of remedies under such law, against an 
        assignee, securitizer, or securitization vehicle under 
        State law, other than a provision of such law the terms 
        of which address the specific subject matter of 
        subsection (a) (determination of ability to repay) or 
        (b) (requirement of a net tangible benefit) of section 
        129C of such Act;
          (3)(A) the application of any State law, or the 
        availability of remedies under such law, against an 
        assignee, securitizer or securitization vehicle for its 
        participation in or direction of the credit or 
        underwriting decisions of a creditor relating to the 
        making of a residential mortgage loan; or
          (B) the ability of a consumer to assert any rights 
        against or obtain any remedies from an assignee, 
        securitizer or securitization vehicle with respect to a 
        residential mortgage loan as a defense to foreclosure 
        under section 129C(g);
          (4) the availability of any equitable remedies, 
        including injunctive relief, under State law; or
          (5) notwithstanding paragraph (2), the availability 
        of any remedies under State law against any assignee, 
        securitizer or securitization vehicle that--
                  (A) are in addition to those remedies 
                provided for in section 129C; and
                  (B) were in effect on the date of enactment 
                of this Act.

SEC. 9109. REGULATIONS.

  Regulations required or authorized to be prescribed under 
this subtitle or the amendments made by this subtitle--
          (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. 9110. AMENDMENTS TO CIVIL LIABILITY PROVISIONS.

  (a) Increase in Amount of Civil Money Penalties for Certain 
Violations.--Section 130(a)(2) of the Truth in Lending Act (15 
U.S.C. 1640(a)(2)) is amended--
          (1) by striking ``$100'' and inserting ``$200'';
          (2) by striking ``$1,000'' and inserting ``$2,000''; 
        and
          (3) by striking ``$500,000'' and inserting 
        ``$1,000,000''.
  (b) Statute of Limitations Extended for Section 129 
Violations.--Section 130(e) of the Truth in Lending Act (15 
U.S.C. 1640(e)) is amended--
          (1) in the first sentence, by striking ``Any action'' 
        and inserting ``Except as provided in the subsequent 
        sentence, any action''; and
          (2) by inserting after the first sentence the 
        following new sentence: ``Any action under this section 
        with respect to any violation of section 129 may be 
        brought in any United States district court, or in any 
        other court of competent jurisdiction, before the end 
        of the 3-year period beginning on the date of the 
        occurrence of the violation.''.

SEC. 9111. LENDER RIGHTS IN THE CONTEXT OF BORROWER DECEPTION.

  Section 130 of the Truth in Lending Act is amended by adding 
at the end the following new subsection:
  ``(k) Exemption From Liability and Rescission in Case of 
Borrower Fraud or Deception.--In addition to any other remedy 
available by law or contract, no creditor, assignee, or 
securitizer shall be liable to an obligor under this section, 
nor shall it be subject to the right of rescission of any 
obligor under 129B, if such obligor, or co-obligor, knowingly, 
or willfully and with actual knowledge furnished material 
information known to be false for the purpose of obtaining such 
residential mortgage loan.''.

SEC. 9112. SIX-MONTH NOTICE REQUIRED BEFORE RESET OF HYBRID ADJUSTABLE 
                    RATE MORTGAGES.

  (a) In General.--Chapter 2 of the Truth in Lending Act (15 
U.S.C. 1631 et seq.) is amended by inserting after section 128 
the following new section:

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

  ``(a) Hybrid Adjustable Rate Mortgages Defined.--For purposes 
of this section, the term `hybrid adjustable rate mortgage' 
means a consumer credit transaction secured by the consumer's 
principal residence with a fixed interest rate for an 
introductory period that adjusts or resets to a variable 
interest rate after such period.
  ``(b) Notice of Reset and Alternatives.--During the 1-month 
period that ends 6 months before the date on which the interest 
rate in effect during the introductory period of a hybrid 
adjustable rate mortgage adjusts or resets to a variable 
interest rate or, in the case of such an adjustment or 
resetting that occurs within the first 6 months after 
consummation of such loan, at consummation, the creditor or 
servicer of such loan shall provide a written notice, separate 
and distinct from all other correspondence to the consumer, 
that includes the following:
          ``(1) Any index or formula used in making adjustments 
        to or resetting the interest rate and a source of 
        information about the index or formula.
          ``(2) An explanation of how the new interest rate and 
        payment would be determined, including an explanation 
        of how the index was adjusted, such as by the addition 
        of a margin.
          ``(3) A good faith estimate, based on accepted 
        industry standards, of the creditor or servicer of the 
        amount of the monthly payment that will apply after the 
        date of the adjustment or reset, and the assumptions on 
        which this estimate is based.
          ``(4) A list of alternatives consumers may pursue 
        before the date of adjustment or reset, and 
        descriptions of the actions consumers must take to 
        pursue these alternatives, including--
                  ``(A) refinancing;
                  ``(B) renegotiation of loan terms;
                  ``(C) payment forbearances; and
                  ``(D) pre-foreclosure sales.
          ``(5) The names, addresses, telephone numbers, and 
        Internet addresses of counseling agencies or programs 
        reasonably available to the consumer that have been 
        certified or approved and made publicly available by 
        the Secretary of Housing and Urban Development or a 
        State housing finance authority (as defined in section 
        1301 of the Financial Institutions Reform, Recovery, 
        and Enforcement Act of 1989).
          ``(6) The address, telephone number, and Internet 
        address for the State housing finance authority (as so 
        defined) for the State in which the consumer 
        resides.''.
  (b) Clerical Amendment.--The table of sections for chapter 2 
of the Truth in Lending Act is amended by inserting after the 
item relating to section 128 the following new item:

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

SEC. 9113. REQUIRED DISCLOSURES.

  Section 128(a) of Truth in Lending Act (15 U.S.C. 1638(a)) is 
amended by adding at the end the following new paragraphs:
          ``(16) In the case of a variable rate residential 
        mortgage loan for which an escrow or impound account 
        will be established for the payment of all applicable 
        taxes, insurance, and assessments--
                  ``(A) the amount of initial monthly payment 
                due under the loan for the payment of principal 
                and interest, and the amount of such initial 
                monthly payment including the monthly payment 
                deposited in the account for the payment of all 
                applicable taxes, insurance, and assessments; 
                and
                  ``(B) the amount of the fully indexed monthly 
                payment due under the loan for the payment of 
                principal and interest, and the amount of such 
                fully indexed monthly payment including the 
                monthly payment deposited in the account for 
                the payment of all applicable taxes, insurance, 
                and assessments.
          ``(17) In the case of a residential mortgage loan, 
        the aggregate amount of settlement charges for all 
        settlement services provided in connection with the 
        loan, the amount of charges that are included in the 
        loan and the amount of such charges the borrower must 
        pay at closing, the approximate amount of the wholesale 
        rate of funds in connection with the loan, and the 
        aggregate amount of other fees or required payments in 
        connection with the loan.
          ``(18) In the case of a residential mortgage loan, 
        the aggregate amount of fees paid to the mortgage 
        originator in connection with the loan, the amount of 
        such fees paid directly by the consumer, and any 
        additional amount received by the originator from the 
        creditor.
          ``(19) In the case of a residential mortgage loan, 
        the total amount of interest that the consumer will pay 
        over the life of the loan as a percentage of the 
        principal of the loan. Such amount shall be computed 
        assuming the consumer makes each monthly payment in 
        full and on-time, and does not make any over-
        payments.''.

SEC. 9114. DISCLOSURES REQUIRED IN MONTHLY STATEMENTS FOR RESIDENTIAL 
                    MORTGAGE LOANS.

  Section 128 of the Truth in Lending Act (15 U.S.C. 1638) is 
amended by adding at the end the following new subsection:
  ``(f) Periodic Statements for Residential Mortgage Loans.--
          ``(1) In general.--The creditor, assignee, or 
        servicer with respect to any residential mortgage loan 
        shall transmit to the obligor, for each billing cycle, 
        a statement setting forth each of the following items, 
        to the extent applicable, in a conspicuous and 
        prominent manner:
                  ``(A) The amount of the principal obligation 
                under the mortgage.
                  ``(B) The current interest rate in effect for 
                the loan.
                  ``(C) The date on which the interest rate may 
                next reset or adjust.
                  ``(D) The amount of any prepayment fee to be 
                charged, if any.
                  ``(E) A description of any late payment fees.
                  ``(F) A telephone number and electronic mail 
                address that may be used by the obligor to 
                obtain information regarding the mortgage.
                  ``(G) The names, addresses, telephone 
                numbers, and Internet addresses of counseling 
                agencies or programs reasonably available to 
                the consumer that have been certified or 
                approved and made publicly available by the 
                Secretary of Housing and Urban Development or a 
                State housing finance authority (as defined in 
                section 1301 of the Financial Institutions 
                Reform, Recovery, and Enforcement Act of 1989).
                  ``(H) Such other information as the Board may 
                prescribe in regulations.
          ``(2) Development and use of standard form.--The 
        Federal banking agencies shall jointly develop and 
        prescribe a standard form for the disclosure required 
        under this subsection, taking into account that the 
        statements required may be transmitted in writing or 
        electronically.''.

SEC. 9115. LEGAL ASSISTANCE FOR FORECLOSURE-RELATED ISSUES.

  (a) Establishment.--The Secretary of Housing and Urban 
Development (hereafter in this section referred to as the 
``Secretary'' shall establish a program for making grants for 
providing a full range of foreclosure legal assistance to low- 
and moderate-income homeowners and tenants related to home 
ownership preservation, home foreclosure prevention, and 
tenancy associated with home foreclosure.
  (b) Competitive Allocation.--The Secretary shall allocate 
amounts made available for grants under this section to State 
and local legal organizations on the basis of a competitive 
process. For purposes of this subsection ``State and local 
legal organizations'' are those State and local organizations 
whose primary business or mission is to provide legal 
assistance.
  (c) Priority to Certain Areas.--In allocating amounts in 
accordance with subsection (b), the Secretary shall give 
priority consideration to State and local legal organizations 
that are operating in the 100 metropolitan statistical areas 
(as that term is defined by the Director of the Office of 
Management and Budget) with the highest home foreclosure rates.
  (d) Legal Assistance.--
          (1) In general.--Any State or local legal 
        organization that receives financial assistance 
        pursuant to this section may use such amounts only to 
        assist--
                  (A) homeowners of owner-occupied homes with 
                mortgages in default, in danger of default, or 
                subject to or at risk of foreclosure; and
                  (B) tenants at risk of or subject to eviction 
                as a result of foreclosure of the property in 
                which such tenant resides.
          (2) Commence use within 90 days.--Any State or local 
        legal organization that receives financial assistance 
        pursuant to this section shall begin using any 
        financial assistance received under this section within 
        90 days after receipt of the assistance.
          (3) Prohibition on class actions.--No funds provided 
        to a State or local legal organization under this 
        section may be used to support any class action 
        litigation.
          (4) Limitation on legal assistance.--Legal assistance 
        funded with amounts provided under this section shall 
        be limited to mortgage-related default, eviction, or 
        foreclosure proceedings, without regard to whether such 
        foreclosure is judicial or nonjudicial.
          (5) Effective date.--Notwithstanding section 9116, 
        this subsection shall take effect on the date of the 
        enactment of this Act.
  (e) Limitation on Distribution of Assistance.--
          (1) In general.--None of the amounts made available 
        under this section shall be distributed to--
                  (A) any organization which has been convicted 
                for a violation under Federal law relating to 
                an election for Federal office; or
                  (B) any organization which employs applicable 
                individuals.
          (2) Definition of applicable individuals.--In this 
        subsection, the term ``applicable individual'' means an 
        individual who--
                  (A) is--
                          (i) employed by the organization in a 
                        permanent or temporary capacity;
                          (ii) contracted or retained by the 
                        organization; or
                          (iii) acting on behalf of, or with 
                        the express or apparent authority of, 
                        the organization; and
                  (B) has been convicted for a violation under 
                Federal law relating to an election for Federal 
                office.
  (f) Authorization of Appropriations.--There are authorized to 
be appropriated to the Secretary $35,000,000 for each of fiscal 
years 2009 through 2012 for grants under this section.

SEC. 9116. EFFECTIVE DATE.

  The amendments made by this subtitle shall apply to 
transactions consummated on or after the effective date of the 
regulations specified in section 9109.

SEC. 9117. REPORT BY THE GAO.

  (a) Report Required.--The Comptroller General shall conduct a 
study to determine the effects the enactment of this Act will 
have on the availability and affordability of credit for 
consumers, small businesses, homebuyers, and mortgage lending, 
including the effect--
          (1) on the mortgage market for mortgages that are not 
        within the safe harbor provided in the amendments made 
        by this subtitle;
          (2) on the ability of prospective homebuyers to 
        obtain financing;
          (3) on the ability of homeowners facing resets or 
        adjustments to refinance--for example, do they have 
        fewer refinancing options due to the unavailability of 
        certain loan products that were available before the 
        enactment of this Act;
          (4) on minorities' ability to access affordable 
        credit compared with other prospective borrowers;
          (5) on home sales and construction;
          (6) of extending the rescission right, if any, on 
        adjustable rate loans and its impact on litigation;
          (7) of State foreclosure laws and, if any, an 
        investor's ability to transfer a property after 
        foreclosure;
          (8) of expanding the existing provisions of the Home 
        Ownership and Equity Protection Act of 1994;
          (9) of prohibiting prepayment penalties on high-cost 
        mortgages; and
          (10) of establishing counseling services under the 
        Department of Housing and Urban Development and offered 
        through the Office of Housing Counseling.
  (b) Report.--Before the end of the 1-year period beginning on 
the date of the enactment of this Act, the Comptroller General 
shall submit a report to the Congress containing the findings 
and conclusions of the Comptroller General with respect to the 
study conducted pursuant to subsection (a).
  (c) Examination Related to Certain Credit Risk Retention 
Provisions.--The report required by subsection (b) shall also 
include an analysis by the Comptroller General of the effect on 
the capital reserves and funding of lenders of credit risk 
retention provisions for non-qualified mortgages, including an 
analysis of the exceptions and adjustments authorized in 
section 129C(l)(3)(A) of the Truth in Lending Act and a 
recommendation on whether a uniform standard is needed.
  (d) Analysis of Credit Risk Retention Provisions.--The report 
required by subsection (b) shall also include--
          (1) an analysis by the Comptroller General of whether 
        the credit risk retention provisions have significantly 
        reduced risks to the larger credit market of the 
        repackaging and selling of securitized loans on a 
        secondary market; and
          (2) recommendations to the Congress on adjustments 
        that should be made, or additional measures that should 
        be undertaken.

SEC. 9118. STATE ATTORNEY GENERAL ENFORCEMENT AUTHORITY.

  Section 130(e) of the Truth in Lending Act (15 U.S.C. 
1640(e)) is amended by striking ``section 129 may also'' and 
inserting ``section 129, 129B, or 129C of this Act may also''.

                    Subtitle C--High-Cost Mortgages

SEC. 9201. DEFINITIONS RELATING TO HIGH-COST MORTGAGES.

  (a) High-Cost Mortgage Defined.--Section 103(aa) of the Truth 
in Lending Act (15 U.S.C. 1602(aa)) is amended by striking all 
that precedes paragraph (2) and inserting the following:
  ``(aa) High-Cost Mortgage.--
          ``(1) Definition.--
                  ``(A) In general.--The term `high-cost 
                mortgage', and a mortgage referred to in this 
                subsection, means a consumer credit transaction 
                that is secured by the consumer's principal 
                dwelling, other than a reverse mortgage 
                transaction, if--
                          ``(i) in the case of a credit 
                        transaction secured--
                                  ``(I) by a first mortgage on 
                                the consumer's principal 
                                dwelling, the annual percentage 
                                rate at consummation of the 
                                transaction will exceed by more 
                                than 6.5 percentage points (8.5 
                                percentage points, if the 
                                dwelling is personal property 
                                and the transaction is for less 
                                than $50,000) the average prime 
                                offer rate, as defined in 
                                section 129C(c)(2)(B), for a 
                                comparable transaction; or
                                  ``(II) by a subordinate or 
                                junior mortgage on the 
                                consumer's principal dwelling, 
                                the annual percentage rate at 
                                consummation of the transaction 
                                will exceed by more than 8.5 
                                percentage points the average 
                                prime offer rate, as defined in 
                                section 129C(c)(2)(B), for a 
                                comparable transaction;
                          ``(ii) the total points and fees 
                        payable in connection with the 
                        transaction exceed--
                                  ``(I) in the case of a 
                                transaction for $20,000 or 
                                more, 5 percent of the total 
                                transaction amount; or
                                  ``(II) in the case of a 
                                transaction for less than 
                                $20,000, the lesser of 8 
                                percent of the total 
                                transaction amount or $1,000 
                                (or such other dollar amount as 
                                the Board shall prescribe by 
                                regulation); or
                          ``(iii) the credit transaction 
                        documents permit the creditor to charge 
                        or collect prepayment fees or penalties 
                        more than 36 months after the 
                        transaction closing or such fees or 
                        penalties exceed, in the aggregate, 
                        more than 2 percent of the amount 
                        prepaid.
                  ``(B) Introductory rates taken into 
                account.--For purposes of subparagraph (A)(i), 
                the annual percentage rate of interest shall be 
                determined based on the following interest 
                rate:
                          ``(i) In the case of a fixed-rate 
                        transaction in which the annual 
                        percentage rate will not vary during 
                        the term of the loan, the interest rate 
                        in effect on the date of consummation 
                        of the transaction.
                          ``(ii) In the case of a transaction 
                        in which the rate of interest varies 
                        solely in accordance with an index, the 
                        interest rate determined by adding the 
                        index rate in effect on the date of 
                        consummation of the transaction to the 
                        maximum margin permitted at any time 
                        during the transaction agreement.
                          ``(iii) In the case of any other 
                        transaction in which the rate may vary 
                        at any time during the term of the loan 
                        for any reason, the interest charged on 
                        the transaction at the maximum rate 
                        that may be charged during the term of 
                        the transaction.''.
  (b) Adjustment of Percentage Points.--Section 103(aa)(2) of 
the Truth in Lending Act (15 U.S.C. 1602(aa)(2)) is amended by 
striking subparagraph (B) and inserting the following new 
subparagraph:
                  ``(B) An increase or decrease under 
                subparagraph (A)--
                          ``(i) may not result in the number of 
                        percentage points referred to in 
                        paragraph (1)(A)(i)(I) being less than 
                        6 percentage points or greater than 10 
                        percentage points; and
                          ``(ii) may not result in the number 
                        of percentage points referred to in 
                        paragraph (1)(A)(i)(II) being less than 
                        8 percentage points or greater than 12 
                        percentage points.''.
  (c) Points and Fees Defined.--
          (1) In general.--Section 103(aa)(4) of the Truth in 
        Lending Act (15 U.S.C. 1602(aa)(4)) is amended--
                  (A) by striking subparagraph (B) and 
                inserting the following:
                  ``(B) all compensation paid directly or 
                indirectly by a consumer or creditor to a 
                mortgage originator from any source, including 
                a mortgage originator that originates a loan in 
                the name of the creditor in a table-funded 
                transaction;'';
                  (B) in subparagraph (C)(ii), by inserting 
                ``except where applied to the charges set forth 
                in section 106(e)(1) where a creditor may 
                receive indirect compensation solely as a 
                result of obtaining distributions of profits 
                from an affiliated entity based on its 
                ownership interest in compliance with section 
                8(c)(4) of the Real Estate Settlement 
                Procedures Act of 1974'' before the semicolon 
                at the end;
                  (C) in subparagraph (C)(iii), by striking ``; 
                and'' and inserting ``, except as provided for 
                in clause (ii);'';
                  (D) by redesignating subparagraph (D) as 
                subparagraph (G); and
                  (E) by inserting after subparagraph (C) the 
                following new subparagraphs:
                  ``(D) premiums or other charges payable at or 
                before closing for any credit life, credit 
                disability, credit unemployment, or credit 
                property insurance, or any other accident, 
                loss-of-income, life or health insurance, or 
                any payments directly or indirectly for any 
                debt cancellation or suspension agreement or 
                contract, except that insurance premiums or 
                debt cancellation or suspension fees calculated 
                and paid in full on a monthly basis shall not 
                be considered financed by the creditor;
                  ``(E) except as provided in subsection (cc), 
                the maximum prepayment fees and penalties which 
                may be charged or collected under the terms of 
                the credit transaction;
                  ``(F) all prepayment fees or penalties that 
                are incurred by the consumer if the loan 
                refinances a previous loan made or currently 
                held by the same creditor or an affiliate of 
                the creditor; and''.
          (2) Calculation of points and fees for open-end 
        consumer credit plans.--Section 103(aa) of the Truth in 
        Lending Act (15 U.S.C. 1602(aa)) is amended--
                  (A) by redesignating paragraph (5) as 
                paragraph (6); and
                  (B) by inserting after paragraph (4) the 
                following new paragraph:
          ``(5) Calculation of points and fees for open-end 
        consumer credit plans.--In the case of open-end 
        consumer credit plans, points and fees shall be 
        calculated, for purposes of this section and section 
        129, by adding the total points and fees known at or 
        before closing, including the maximum prepayment 
        penalties which may be charged or collected under the 
        terms of the credit transaction, plus the minimum 
        additional fees the consumer would be required to pay 
        to draw down an amount equal to the total credit 
        line.''.
  (d) Bona Fide Discount Loan Discount Points.--Section 103 of 
the Truth in Lending Act (15 U.S.C. 1602) is amended by 
inserting after subsection (cc) (as added by section 101) the 
following new subsection:
  ``(dd) Bona Fide Discount Points and Prepayment Penalties.--
For the purposes of determining the amount of points and fees 
for purposes of subsection (aa), either the amounts described 
in paragraph (1) or (2) of the following paragraphs, but not 
both, shall be excluded:
          ``(1) Up to and including 2 bona fide discount points 
        payable by the consumer in connection with the 
        mortgage, but only if the interest rate from which the 
        mortgage's interest rate will be discounted does not 
        exceed by more than 1 percentage point--
                  ``(A) the required net yield for a 90-day 
                standard mandatory delivery commitment for a 
                reasonably comparable loan from either the 
                Federal National Mortgage Association or the 
                Federal Home Loan Mortgage Corporation, 
                whichever is greater; or
                  ``(B) if secured by a personal property loan, 
                the average rate on a loan in connection with 
                which insurance is provided under title I of 
                the National Housing Act (12 U.S.C. 1702 et 
                seq.).
          ``(2) Unless 2 bona fide discount points have been 
        excluded under paragraph (1), up to and including 1 
        bona fide discount point payable by the consumer in 
        connection with the mortgage, but only if the interest 
        rate from which the mortgage's interest rate will be 
        discounted does not exceed by more than 2 percentage 
        points--
                  ``(A) the required net yield for a 90-day 
                standard mandatory delivery commitment for a 
                reasonably comparable loan from either the 
                Federal National Mortgage Association or the 
                Federal Home Loan Mortgage Corporation, 
                whichever is greater; or
                  ``(B) if secured by a personal property loan, 
                the average rate on a loan in connection with 
                which insurance is provided under title I of 
                the National Housing Act (12 U.S.C. 1702 et 
                seq.).
          ``(3) 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.
          ``(4) Paragraphs (1) and (2) shall not apply to 
        discount points used to purchase an interest rate 
        reduction unless the amount of the interest rate 
        reduction purchased is reasonably consistent with 
        established industry norms and practices for secondary 
        mortgage market transactions.''.

SEC. 9202. AMENDMENTS TO EXISTING REQUIREMENTS FOR CERTAIN MORTGAGES.

  (a) Prepayment Penalty Provisions.--Section 129(c)(2) of the 
Truth in Lending Act (15 U.S.C. 1639(c)(2)) is hereby repealed.
  (b) No Balloon Payments.--Section 129(e) of the Truth in 
Lending Act (15 U.S.C. 1639(e)) is amended to read as follows:
  ``(e) No Balloon Payments.--No high-cost mortgage may contain 
a scheduled payment that is more than twice as large as the 
average of earlier scheduled payments. This subsection shall 
not apply when the payment schedule is adjusted to the seasonal 
or irregular income of the consumer or in the case of a balance 
due under the customary terms of a reverse mortgage.''.

SEC. 9203. 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 to accelerate 
the indebtedness, except when repayment of the loan has been 
accelerated by default in payment, or pursuant to a due-on-sale 
provision, or pursuant to a material violation of some other 
provision of the loan document unrelated to 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.--
          ``(1) Creditors.--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.
          ``(2) Third parties.--A third-party may not charge a 
        consumer any fee to--
                  ``(A) modify, renew, extend, or amend a high-
                cost mortgage, or defer any payment due under 
                the terms of such mortgage;
                  ``(B) negotiate with a creditor on behalf of 
                a consumer, the modification, renewal, 
                extension, or amendment of a high-cost 
                mortgage; or
                  ``(C) negotiate with a creditor on behalf of 
                a consumer, the deferral of any payment due 
                under the terms of such mortgage,
        unless the modification renewal, extension or amendment 
        results in a significantly lower annual percentage rate 
        on the mortgage, or a significant reduction in the 
        amount of the outstanding principal on the mortgage, 
        for the consumer and then only if the amount of the fee 
        is comparable to fees imposed for similar transactions 
        in connection with consumer credit transactions that 
        are secured by a consumer's principal dwelling and are 
        not high-cost mortgages.
          ``(3) Enforcement.--Section 130 shall be applied for 
        purposes of paragraph (2) by--
                  ``(A) substituting `third party' for 
                `creditor'each place such term appears; and
                  ``(B) substituting `any fee charged by a 
                third party' for `finance charge' each place 
                such term appears.''.
  (d) Payoff Statement.--Section 129 of the Truth in Lending 
Act (15 U.S.C. 1639) is amended by inserting after subsection 
(r) (as added by subsection (c) of this section) the following 
new subsection:
  ``(s) Payoff Statement.--
          ``(1) Fees.--
                  ``(A) In general.--Except as provided in 
                subparagraph (B), no creditor or servicer may 
                charge a fee for informing or transmitting to 
                any person the balance due to pay off the 
                outstanding balance on a high-cost mortgage.
                  ``(B) Transaction fee.--When payoff 
                information referred to in subparagraph (A) is 
                provided by facsimile transmission or by a 
                courier service, a creditor or servicer may 
                charge a processing fee to cover the cost of 
                such transmission or service in an amount not 
                to exceed an amount that is comparable to fees 
                imposed for similar services provided in 
                connection with consumer credit transactions 
                that are secured by the consumer's principal 
                dwelling and are not high-cost mortgages.
                  ``(C) Fee disclosure.--Prior to charging a 
                transaction fee as provided in subparagraph 
                (B), a creditor or servicer shall disclose that 
                payoff balances are available for free pursuant 
                to subparagraph (A).
                  ``(D) Multiple requests.--If a creditor or 
                servicer has provided payoff information 
                referred to in subparagraph (A) without charge, 
                other than the transaction fee allowed by 
                subparagraph (B), on 4 occasions during a 
                calendar year, the creditor or servicer may 
                thereafter charge a reasonable fee for 
                providing such information during the remainder 
                of the calendar year.
          ``(2) Prompt delivery.--Payoff balances shall be 
        provided within 5 business days after receiving a 
        request by a consumer or a person authorized by the 
        consumer to obtain such information.
          ``(3) Services considered assignee.--For the purposes 
        of this subsection, a servicer shall be considered an 
        assignee under the Truth in Lending Act.''.
  (e) Pre-Loan Counseling Required.--Section 129 of the Truth 
in Lending Act (15 U.S.C. 1639) is amended by inserting after 
subsection (s) (as added by subsection (d) of this section) the 
following new subsection:
  ``(t) Pre-Loan Counseling.--
          ``(1) In general.--A creditor may not extend credit 
        to a consumer under a high-cost mortgage without first 
        receiving certification from a counselor that is 
        approved by the Secretary of Housing and Urban 
        Development, or at the discretion of the Secretary, a 
        State housing finance authority, that the consumer has 
        received counseling on the advisability of the 
        mortgage. Such counselor shall not be employed by the 
        creditor or an affiliate of the creditor or be 
        affiliated with the creditor.
          ``(2) Disclosures required prior to counseling.--No 
        counselor may certify that a consumer has received 
        counseling on the advisability of the high-cost 
        mortgage unless the counselor can verify that the 
        consumer has received each statement required (in 
        connection with such loan) by this section or the Real 
        Estate Settlement Procedures Act of 1974 with respect 
        to the transaction.
          ``(3) Regulations.--The Board may prescribe such 
        regulations as the Board determines to be appropriate 
        to carry out the requirements of paragraph (1).''.
  (f) Flipping Prohibited.--Section 129 of the Truth in Lending 
Act (15 U.S.C. 1639) is amended by inserting after subsection 
(t) (as added by subsection (e)) the following new subsection:
  ``(u) Flipping.--
          ``(1) In general.--No creditor may knowingly or 
        intentionally engage in the unfair act or practice of 
        flipping in connection with a high-cost mortgage.
          ``(2) Flipping defined.--For purposes of this 
        subsection, the term `flipping' means the making of a 
        loan or extension of credit in the form a high-cost 
        mortgage to a consumer which refinances an existing 
        mortgage when the new loan or extension of credit does 
        not have reasonable, net tangible benefit (as 
        determined in accordance with regulations prescribed 
        under section 129C(b)) to the consumer considering all 
        of the circumstances, including the terms of both the 
        new and the refinanced loans or credit, the cost of the 
        new loan or credit, and the consumer's circumstances.
  ``(v) Corrections and Unintentional Violations.--A creditor 
or assignee in a high cost loan who, when acting in good faith, 
fails to comply with any requirement under this section will 
not be deemed to have violated such requirement if the creditor 
or assignee establishes that either--
          ``(1) within 30 days of the loan closing and prior to 
        the institution of any action, the consumer is notified 
        of or discovers the violation, appropriate restitution 
        is made, and whatever adjustments are necessary are 
        made to the loan to either, at the choice of the 
        consumer--
                  ``(A) make the loan satisfy the requirements 
                of this chapter; or
                  ``(B) in the case of a high-cost mortgage, 
                change the terms of the loan in a manner 
                beneficial to the consumer so that the loan 
                will no longer be a high-cost mortgage; or
          ``(2) within 60 days of the creditor's discovery or 
        receipt of notification of an unintentional violation 
        or bona fide error as described in subsection (c) and 
        prior to the institution of any action, the consumer is 
        notified of the compliance failure, appropriate 
        restitution is made, and whatever adjustments are 
        necessary are made to the loan to either, at the choice 
        of the consumer--
                  ``(A) make the loan satisfy the requirements 
                of this chapter; or
                  ``(B) in the case of a high-cost mortgage, 
                change the terms of the loan in a manner 
                beneficial so that the loan will no longer be a 
                high-cost mortgage.''.

SEC. 9204. REGULATIONS.

  (a) In General.--The Board of Governors of the Federal 
Reserve System shall publish regulations implementing this 
subtitle and the amendments made by this subtitle 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. 9205. EFFECTIVE DATE.

  The amendments made by this subtitle shall take effect at the 
end of the 6-month period beginning on the date of the 
enactment of this Act and shall apply to mortgages referred to 
in section 103(aa) of the Truth in Lending Act (15 U.S.C. 
1602(aa)) for which an application is received by the creditor 
after the end of such period.

                Subtitle D--Office of Housing Counseling

SEC. 9301. SHORT TITLE.

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

SEC. 9302. ESTABLISHMENT OF OFFICE OF HOUSING COUNSELING.

  Section 4 of the Department of Housing and Urban Development 
Act (42 U.S.C. 3533) is amended by adding at the end the 
following new subsection:
  ``(g) Office of Housing Counseling.--
          ``(1) Establishment.--There is established, in the 
        Department, the Office of Housing Counseling.
          ``(2) Director.--There is established the position of 
        Director of Housing Counseling. The Director shall be 
        the head of the Office of Housing Counseling and shall 
        be appointed by, and shall report to, the Secretary. 
        Such position shall be a career-reserved position in 
        the Senior Executive Service.
          ``(3) Functions.--
                  ``(A) In general.--The Director shall have 
                primary responsibility within the Department 
                for all activities and matters relating to 
                homeownership counseling and rental housing 
                counseling, including--
                          ``(i) research, grant administration, 
                        public outreach, and policy development 
                        relating to such counseling; and
                          ``(ii) establishment, coordination, 
                        and administration of all regulations, 
                        requirements, standards, and 
                        performance measures under programs and 
                        laws administered by the Department 
                        that relate to housing counseling, 
                        homeownership counseling (including 
                        maintenance of homes), mortgage-related 
                        counseling (including home equity 
                        conversion mortgages and credit 
                        protection options to avoid 
                        foreclosure), and rental housing 
                        counseling, including the requirements, 
                        standards, and performance measures 
                        relating to housing counseling.
                  ``(B) Specific functions.--The Director shall 
                carry out the functions assigned to the 
                Director and the Office under this section and 
                any other provisions of law. Such functions 
                shall include establishing rules necessary 
                for--
                          ``(i) the counseling procedures under 
                        section 106(g)(1) of the Housing and 
                        Urban Development Act of 1968 (12 
                        U.S.C. 1701x(h)(1));
                          ``(ii) carrying out all other 
                        functions of the Secretary under 
                        section 106(g) of the Housing and Urban 
                        Development Act of 1968, including the 
                        establishment, operation, and 
                        publication of the availability of the 
                        toll-free telephone number under 
                        paragraph (2) of such section;
                          ``(iii) contributing to the 
                        preparation and distribution of home 
                        buying information booklets pursuant to 
                        section 5 of the Real Estate Settlement 
                        Procedures Act of 1974 (12 U.S.C. 
                        2604);
                          ``(iv) carrying out the certification 
                        program under section 106(e) of the 
                        Housing and Urban Development Act of 
                        1968 (12 U.S.C. 1701x(e));
                          ``(v) carrying out the assistance 
                        program under section 106(a)(4) of the 
                        Housing and Urban Development Act of 
                        1968, including criteria for selection 
                        of applications to receive assistance;
                          ``(vi) carrying out any functions 
                        regarding abusive, deceptive, or 
                        unscrupulous lending practices relating 
                        to residential mortgage loans that the 
                        Secretary considers appropriate, which 
                        shall include conducting the study 
                        under section 6 of the Expand and 
                        Preserve Home Ownership Through 
                        Counseling Act;
                          ``(vii) providing for operation of 
                        the advisory committee established 
                        under paragraph (4) of this subsection;
                          ``(viii) collaborating with 
                        community-based organizations with 
                        expertise in the field of housing 
                        counseling; and
                          ``(ix) providing for the building of 
                        capacity to provide housing counseling 
                        services in areas that lack sufficient 
                        services, including underdeveloped 
                        areas that lack basic water and sewer 
                        systems, electricity services, and 
                        safe, sanitary housing.
          ``(4) Advisory committee.--
                  ``(A) In general.--The Secretary shall 
                appoint an advisory committee to provide advice 
                regarding the carrying out of the functions of 
                the Director.
                  ``(B) Members.--Such advisory committee shall 
                consist of not more than 12 individuals, and 
                the membership of the committee shall equally 
                represent the mortgage and real estate 
                industry, including consumers and housing 
                counseling agencies certified by the Secretary.
                  ``(C) Terms.--Except as provided in 
                subparagraph (D), each member of the advisory 
                committee shall be appointed for a term of 3 
                years. Members may be reappointed at the 
                discretion of the Secretary.
                  ``(D) Terms of initial appointees.--As 
                designated by the Secretary at the time of 
                appointment, of the members first appointed to 
                the advisory committee, 4 shall be appointed 
                for a term of 1 year and 4 shall be appointed 
                for a term of 2 years.
                  ``(E) Prohibition of pay; travel expenses.--
                Members of the advisory committee shall serve 
                without pay, but shall receive travel expenses, 
                including per diem in lieu of subsistence, in 
                accordance with applicable provisions under 
                subchapter I of chapter 57 of title 5, United 
                States Code.
                  ``(F) Advisory role only.--The advisory 
                committee shall have no role in reviewing or 
                awarding housing counseling grants.
          ``(5) Scope of homeownership counseling.--In carrying 
        out the responsibilities of the Director, the Director 
        shall ensure that homeownership counseling provided by, 
        in connection with, or pursuant to any function, 
        activity, or program of the Department addresses the 
        entire process of homeownership, including the decision 
        to purchase a home, the selection and purchase of a 
        home, issues arising during or affecting the period of 
        ownership of a home (including refinancing, default and 
        foreclosure, and other financial decisions), and the 
        sale or other disposition of a home.''.

SEC. 9303. 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));
                          ``(xii) section 508 of the Housing 
                        and Urban Development Act of 1970 (12 
                        U.S.C. 1701z-7); and
                          ``(xiii) section 106 of the Energy 
                        Policy Act of 1992 (42 U.S.C. 12712 
                        note).
                  ``(C) Rental housing counseling.--For 
                purposes of this subsection, the term `rental 
                housing counseling' means counseling related to 
                rental of residential property, which may 
                include counseling regarding future 
                homeownership opportunities and providing 
                referrals for renters and prospective renters 
                to entities providing counseling and shall 
                include counseling related to such topics that 
                is provided pursuant to--
                          ``(i) section 105(a)(20) of the 
                        Housing and Community Development Act 
                        of 1974 (42 U.S.C. 5305(a)(20));
                          ``(ii) in the United States Housing 
                        Act of 1937--
                                  ``(I) section 9(e) (42 U.S.C. 
                                1437g(e));
                                  ``(II) section 18(a)(4)(D) 
                                (42 U.S.C. 1437p(a)(4)(D));
                                  ``(III) section 23(c)(4) (42 
                                U.S.C. 1437u(c)(4));
                                  ``(IV) section 32(e)(4) (42 
                                U.S.C. 1437z-4(e)(4));
                                  ``(V) section 33(d)(2)(B) (42 
                                U.S.C. 1437z-5(d)(2)(B)); and
                                  ``(VI) section 302(b)(6) (42 
                                U.S.C. 1437aaa-1(b)(6));
                          ``(iii) section 233(b)(2) of the 
                        Cranston-Gonzalez National Affordable 
                        Housing Act (42 U.S.C. 12773(b)(2));
                          ``(iv) section 106 of the Housing and 
                        Urban Development Act of 1968 (12 
                        U.S.C. 1701x);
                          ``(v) section 422(b)(6) of the 
                        Cranston-Gonzalez National Affordable 
                        Housing Act (42 U.S.C. 12872(b)(6));
                          ``(vi) section 491(b)(1)(F)(iii) of 
                        the McKinney-Vento Homeless Assistance 
                        Act (42 U.S.C. 11408(b)(1)(F)(iii));
                          ``(vii) sections 202(3) and 
                        810(b)(2)(A) of the Native American 
                        Housing and Self-Determination Act of 
                        1996 (25 U.S.C. 4132(3), 
                        4229(b)(2)(A)); and
                          ``(viii) the rental assistance 
                        program under section 8 of the United 
                        States Housing Act of 1937 (42 U.S.C. 
                        1437f).
          ``(2) Standards for materials.--The Secretary, in 
        consultation with the advisory committee established 
        under subsection (g)(4) of the Department of Housing 
        and Urban Development Act, shall establish standards 
        for materials and forms to be used, as appropriate, by 
        organizations providing homeownership counseling 
        services, including any recipients of assistance 
        pursuant to subsection (a)(4).
          ``(3) Mortgage software systems.--
                  ``(A) Certification.--The Secretary shall 
                provide for the certification of various 
                computer software programs for consumers to use 
                in evaluating different residential mortgage 
                loan proposals. The Secretary shall require, 
                for such certification, that the mortgage 
                software systems take into account--
                          ``(i) the consumer's financial 
                        situation and the cost of maintaining a 
                        home, including insurance, taxes, and 
                        utilities;
                          ``(ii) the amount of time the 
                        consumer expects to remain in the home 
                        or expected time to maturity of the 
                        loan; and
                          ``(iii) such other factors as the 
                        Secretary considers appropriate to 
                        assist the consumer in evaluating 
                        whether to pay points, to lock in an 
                        interest rate, to select an adjustable 
                        or fixed rate loan, to select a 
                        conventional or government-insured or 
                        guaranteed loan and to make other 
                        choices during the loan application 
                        process.
                If the Secretary determines that available 
                existing software is inadequate to assist 
                consumers during the residential mortgage loan 
                application process, the Secretary shall 
                arrange for the development by private sector 
                software companies of new mortgage software 
                systems that meet the Secretary's 
                specifications.
                  ``(B) Use and initial availability.--Such 
                certified computer software programs shall be 
                used to supplement, not replace, housing 
                counseling. The Secretary shall provide that 
                such programs are initially used only in 
                connection with the assistance of housing 
                counselors certified pursuant to subsection 
                (e).
                  ``(C) Availability.--After a period of 
                initial availability under subparagraph (B) as 
                the Secretary considers appropriate, the 
                Secretary shall take reasonable steps to make 
                mortgage software systems certified pursuant to 
                this paragraph widely available through the 
                Internet and at public locations, including 
                public libraries, senior-citizen centers, 
                public housing sites, offices of public housing 
                agencies that administer rental housing 
                assistance vouchers, and housing counseling 
                centers.
                  ``(D) Budget compliance.--This paragraph 
                shall be effective only to the extent that 
                amounts to carry out this paragraph are made 
                available in advance in appropriations Acts.
          ``(4) National public service multimedia campaigns to 
        promote housing counseling.--
                  ``(A) In general.--The Director of Housing 
                Counseling shall develop, implement, and 
                conduct national public service multimedia 
                campaigns designed to make persons facing 
                mortgage foreclosure, persons considering a 
                subprime mortgage loan to purchase a home, 
                elderly persons, persons who face language 
                barriers, low-income persons, minorities, and 
                other potentially vulnerable consumers aware 
                that it is advisable, before seeking or 
                maintaining a residential mortgage loan, to 
                obtain homeownership counseling from an 
                unbiased and reliable sources and that such 
                homeownership counseling is available, 
                including through programs sponsored by the 
                Secretary of Housing and Urban Development.
                  ``(B) Contact information.--Each segment of 
                the multimedia campaign under subparagraph (A) 
                shall publicize the toll-free telephone number 
                and website of the Department of Housing and 
                Urban Development through which persons seeking 
                housing counseling can locate a housing 
                counseling agency in their State that is 
                certified by the Secretary of Housing and Urban 
                Development and can provide advice on buying a 
                home, renting, defaults, foreclosures, credit 
                issues, and reverse mortgages.
                  ``(C) Authorization of appropriations.--There 
                are authorized to be appropriated to the 
                Secretary, not to exceed $3,000,000 for fiscal 
                years 2009, 2010, and 2011, for the 
                development, implementation, and conduct of 
                national public service multimedia campaigns 
                under this paragraph.
                  ``(D) Foreclosure rescue education 
                programs.--
                          ``(i) In general.--Ten percent of any 
                        funds appropriated pursuant to the 
                        authorization under subparagraph (C) 
                        shall be used by the Director of 
                        Housing Counseling to conduct an 
                        education program in areas that have a 
                        high density of foreclosure. Such 
                        program shall involve direct mailings 
                        to persons living in such areas 
                        describing--
                                  ``(I) tips on avoiding 
                                foreclosure rescue scams;
                                  ``(II) tips on avoiding 
                                predatory lending mortgage 
                                agreements;
                                  ``(III) tips on avoiding for-
                                profit foreclosure counseling 
                                services; and
                                  ``(IV) local counseling 
                                resources that are approved by 
                                the Department of Housing and 
                                Urban Development.
                          ``(ii) Program emphasis.--In 
                        conducting the education program 
                        described under clause (i), the 
                        Director of Housing Counseling shall 
                        also place an emphasis on serving 
                        communities that have a high percentage 
                        of retirement communities or a high 
                        percentage of low-income minority 
                        communities.
                          ``(iii) Terms defined.--For purposes 
                        of this subparagraph:
                                  ``(I) High density of 
                                foreclosures.--An area has a 
                                `high density of foreclosures' 
                                if such area is one of the 
                                metropolitan statistical areas 
                                (as that term is defined by the 
                                Director of the Office of 
                                Management and Budget) with the 
                                highest home foreclosure rates.
                                  ``(II) High percentage of 
                                retirement communities.--An 
                                area has a `high percentage of 
                                retirement communities' if such 
                                area is one of the metropolitan 
                                statistical areas (as that term 
                                is defined by the Director of 
                                the Office of Management and 
                                Budget) with the highest 
                                percentage of residents aged 65 
                                or older.
                                  ``(III) High percentage of 
                                low-income minority 
                                communities.--An area has a 
                                `high percentage of low-income 
                                minority communities' if such 
                                area contains a higher-than-
                                normal percentage of residents 
                                who are both minorities and 
                                low-income, as defined by the 
                                Director of Housing Counseling.
          ``(5) Education programs.--The Secretary shall 
        provide advice and technical assistance to States, 
        units of general local government, and nonprofit 
        organizations regarding the establishment and operation 
        of, including assistance with the development of 
        content and materials for, educational programs to 
        inform and educate consumers, particularly those most 
        vulnerable with respect to residential mortgage loans 
        (such as elderly persons, persons facing language 
        barriers, low-income persons, minorities, and other 
        potentially vulnerable consumers), regarding home 
        mortgages, mortgage refinancing, home equity loans, 
        home repair loans, and where appropriate by region, any 
        requirements and costs associated with obtaining flood 
        or other disaster-specific insurance coverage.''.
  (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. 9304. GRANTS FOR HOUSING COUNSELING ASSISTANCE.

  Section 106(a) of the Housing and Urban Development Act of 
1968 (12 U.S.C. 1701x(a)(3)) is amended by adding at the end 
the following new paragraph:
  ``(4) Homeownership and Rental Counseling Assistance.--
          ``(A) In general.--The Secretary shall make financial 
        assistance available under this paragraph to HUD-
        approved housing counseling agencies and State housing 
        finance agencies.
          ``(B) Qualified entities.--The Secretary shall 
        establish standards and guidelines for eligibility of 
        organizations (including governmental and nonprofit 
        organizations) to receive assistance under this 
        paragraph, in accordance with subparagraph (D).
          ``(C) Distribution.--Assistance made available under 
        this paragraph shall be distributed in a manner that 
        encourages efficient and successful counseling programs 
        and that ensures adequate distribution of amounts for 
        rural areas having traditionally low levels of access 
        to such counseling services, including areas with 
        insufficient access to the Internet. In distributing 
        such assistance, the Secretary may give priority 
        consideration to entities serving areas with the 
        highest home foreclosure rates.
          ``(D) Limitation on distribution of assistance.--
                  ``(i) In general.--None of the amounts made 
                available under this paragraph shall be 
                distributed to--
                          ``(I) any organization which has been 
                        convicted for a violation under Federal 
                        law relating to an election for Federal 
                        office; or
                          ``(II) any organization which employs 
                        applicable individuals.
                  ``(ii) Definition of applicable 
                individuals.--In this subparagraph, the term 
                `applicable individual' means an individual 
                who--
                          ``(I) is--
                                  ``(aa) employed by the 
                                organization in a permanent or 
                                temporary capacity;
                                  ``(bb) contracted or retained 
                                by the organization; or
                                  ``(cc) acting on behalf of, 
                                or with the express or apparent 
                                authority of, the organization; 
                                and
                          ``(II) has been convicted for a 
                        violation under Federal law relating to 
                        an election for Federal office.
          ``(E) Grantmaking process.--In making assistance 
        available under this paragraph, the Secretary shall 
        consider appropriate ways of streamlining and improving 
        the processes for grant application, review, approval, 
        and award.
          ``(F) Authorization of appropriations.--There are 
        authorized to be appropriated $45,000,000 for each of 
        fiscal years 2009 through 2012 for--
                  ``(i) the operations of the Office of Housing 
                Counseling of the Department of Housing and 
                Urban Development;
                  ``(ii) the responsibilities of the Director 
                of Housing Counseling under paragraphs (2) 
                through (5) of subsection (g); and
                  ``(iii) assistance pursuant to this paragraph 
                for entities providing homeownership and rental 
                counseling.''.

SEC. 9305. 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. 9306. 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, and the role of computer registries 
of mortgages, including those used for trading mortgage loans. 
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. 9307. DEFAULT AND FORECLOSURE DATABASE.

  (a) Establishment.--The Secretary of Housing and Urban 
Development, in consultation with the Federal agencies 
responsible for regulation of banking and financial 
institutions involved in residential mortgage lending and 
servicing, shall establish and maintain a database of 
information on foreclosures and defaults on mortgage loans for 
one- to four-unit residential properties and shall make such 
information publicly available.
  (b) Census Tract Data.--Information in the database shall be 
collected, aggregated, and made available on a census tract 
basis.
  (c) Requirements.--Information collected and made available 
through the database shall include--
          (1) the number and percentage of such mortgage loans 
        that are delinquent by more than 30 days;
          (2) the number and percentage of such mortgage loans 
        that are delinquent by more than 90 days;
          (3) the number and percentage of such properties that 
        are real estate-owned;
          (4) number and percentage of such mortgage loans that 
        are in the foreclosure process;
          (5) the number and percentage of such mortgage loans 
        that have an outstanding principal obligation amount 
        that is greater than the value of the property for 
        which the loan was made; and
          (6) such other information as the Secretary considers 
        appropriate.

SEC. 9308. 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 subtitle, is further amended by adding at the end the 
following new subsection:
  ``(h) Definitions.--For purposes of this section:
          ``(1) Nonprofit organization.--The term `nonprofit 
        organization' has the meaning given such term in 
        section 104(5) of the Cranston-Gonzalez National 
        Affordable Housing Act (42 U.S.C. 12704(5)), except 
        that subparagraph (D) of such section shall not apply 
        for purposes of this section.
          ``(2) State.--The term `State' means each of the 
        several States, the Commonwealth of Puerto Rico, the 
        District of Columbia, the Commonwealth of the Northern 
        Mariana Islands, Guam, the Virgin Islands, American 
        Samoa, the Trust Territories of the Pacific, or any 
        other possession of the United States.
          ``(3) Unit of general local government.--The term 
        `unit of general local government' means any city, 
        county, parish, town, township, borough, village, or 
        other general purpose political subdivision of a State.
          ``(4) HUD-approved counseling agency.--The term `HUD-
        approved counseling agency' means a private or public 
        nonprofit organization that is--
                  ``(A) exempt from taxation under section 
                501(c) of the Internal Revenue Code of 1986; 
                and
                  ``(B) certified by the Secretary to provide 
                housing counseling services.
          ``(5) State housing finance agency.--The term `State 
        housing finance agency' means any public body, agency, 
        or instrumentality specifically created under State 
        statute that is authorised to finance activities 
        designed to provide housing and related facilities 
        throughout an entire State through land acquisition, 
        construction, or rehabilitation.''.

SEC. 9309. ACCOUNTABILITY AND TRANSPARENCY FOR GRANT RECIPIENTS.

  Section 106 of the Housing and Urban Development Act of 1968 
(12 U.S.C. 1701x), as amended by the preceding provisions of 
this subtitle, is further amended by adding at the end the 
following:
  ``(i) Accountability for Recipients of Covered Assistance.--
          ``(1) Tracking of funds.--The Secretary shall--
                  ``(A) develop and maintain a system to ensure 
                that any organization or entity that receives 
                any covered assistance uses all amounts of 
                covered assistance in accordance with this 
                section or section 9115 of the Mortgage Reform 
                and Anti-Predatory Lending Act, as applicable, 
                the regulations issued under this section or 
                such section 9115, as applicable, and any 
                requirements or conditions under which such 
                amounts were provided; and
                  ``(B) require any organization or entity, as 
                a condition of receipt of any covered 
                assistance, to agree to comply with such 
                requirements regarding covered assistance as 
                the Secretary shall establish, which shall 
                include--
                          ``(i) appropriate periodic financial 
                        and grant activity reporting, record 
                        retention, and audit requirements for 
                        the duration of the covered assistance 
                        to the organization or entity to ensure 
                        compliance with the limitations and 
                        requirements of this section or section 
                        9115 of the Mortgage Reform and Anti-
                        Predatory Lending Act, as applicable, 
                        the regulations under this section or 
                        such section 9115, as applicable, and 
                        any requirements or conditions under 
                        which such amounts were provided; and
                          ``(ii) any other requirements that 
                        the Secretary determines are necessary 
                        to ensure appropriate administration 
                        and compliance.
          ``(2) Misuse of funds.--If any organization or entity 
        that receives any covered assistance is determined by 
        the Secretary to have used any covered assistance in a 
        manner that is materially in violation of this section 
        or section 9115 of the Mortgage Reform and Anti-
        Predatory Lending Act, as applicable, the regulations 
        issued under this section or such section 9115, as 
        applicable, or any requirements or conditions under 
        which such assistance was provided--
                  ``(A) the Secretary shall require that, 
                within 12 months after the determination of 
                such misuse, the organization or entity shall 
                reimburse the Secretary for such misused 
                amounts and return to the Secretary any such 
                amounts that remain unused or uncommitted for 
                use; and
                  ``(B) such organization or entity shall be 
                ineligible, at any time after such 
                determination, to apply for or receive any 
                further covered assistance.
        The remedies under this paragraph are in addition to 
        any other remedies that may be available under law.
          ``(3) Covered assistance.--For purposes of this 
        subsection, the term `covered assistance' means any 
        grant or other financial assistance provided under--
                  ``(A) this section; or
                  ``(B) section 9115 of the Mortgage Reform and 
                Anti-Predatory Lending Act.''.

SEC. 9310. 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 Director of the 
Consumer Financial Protection Agency (hereafter in this section 
referred to as the `Director') 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 Director shall 
prepare the booklet in various languages and cultural styles, 
as the Director determines to be appropriate, so that the 
booklet is understandable and accessible to homebuyers of 
different ethnic and cultural backgrounds. The Director shall 
distribute such booklets to all lenders that make federally 
related mortgage loans. The Director 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 Director shall prescribe and, in addition to such 
other information as the Director 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;
                  ``(C) the advantages of prepayment; and
                  ``(D) 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 Director, or to any suitable 
        substitute of such booklet that the Director 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.''.

SEC. 9311. HOME INSPECTION COUNSELING.

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

SEC. 9312. WARNINGS TO HOMEOWNERS OF FORECLOSURE RESCUE SCAMS.

  (a) Assistance to NRC.--Notwithstanding any other provision 
of law, of any amounts made available for any fiscal year 
pursuant to section 106(a)(4)(F) of the Housing and Urban 
Development Act of 1968 (12 U.S.C. 1701x(a)(4)(F)) (as added by 
section 9304 of this title), 10 percent shall be used only for 
assistance to the Neighborhood Reinvestment Corporation for 
activities, in consultation with servicers of residential 
mortgage loans, to provide notice to borrowers under such loans 
who are delinquent with respect to payments due under such 
loans that makes such borrowers aware of the dangers of 
fraudulent activities associated with foreclosure.
  (b) Notice.--The Neighborhood Reinvestment Corporation, in 
consultation with servicers of residential mortgage loans, 
shall use the amounts provided pursuant to subsection (a) to 
carry out activities to inform borrowers under residential 
mortgage loans--
          (1) that the foreclosure process is complex and can 
        be confusing;
          (2) that the borrower may be approached during the 
        foreclosure process by persons regarding saving their 
        home and they should use caution in any such dealings;
          (3) that there are Federal Government and nonprofit 
        agencies that may provide information about the 
        foreclosure process, including the Department of 
        Housing and Urban Development;
          (4) that they should contact their lender 
        immediately, contact the Department of Housing and 
        Urban Development to find a housing counseling agency 
        certified by the Department to assist in avoiding 
        foreclosure, or visit the Department's website 
        regarding tips for avoiding foreclosure; and
          (5) of the telephone number of the loan servicer or 
        successor, the telephone number of the Department of 
        Housing and Urban Development housing counseling line, 
        and the Uniform Resource Locators (URLs) for the 
        Department of Housing and Urban Development websites 
        for housing counseling and for tips for avoiding 
        foreclosure.

                     Subtitle E--Mortgage Servicing

SEC. 9401. ESCROW AND IMPOUND ACCOUNTS RELATING TO CERTAIN CONSUMER 
                    CREDIT TRANSACTIONS.

  (a) In General.--Chapter 2 of the Truth in Lending Act (15 
U.S.C. 1631 et seq.) is amended by inserting after section 129C 
(as added by section 9101) the following new section:

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

  ``(a) In General.--Except as provided in subsection (b), (c), 
or (d), a creditor, in connection with the formation or 
consummation of a consumer credit transaction secured by a 
first lien on the principal dwelling of the consumer, other 
than a consumer credit transaction under an open end credit 
plan or a reverse mortgage, shall establish, before the 
consummation of such transaction, an escrow or impound account 
for the payment of taxes and hazard insurance, and, if 
applicable, flood insurance, mortgage insurance, ground rents, 
and any other required periodic payments or premiums with 
respect to the property or the loan terms, as provided in, and 
in accordance with, this section.
  ``(b) When Required.--No impound, trust, or other type of 
account for the payment of property taxes, insurance premiums, 
or other purposes relating to the property may be required as a 
condition of a real property sale contract or a loan secured by 
a first deed of trust or mortgage on the principal dwelling of 
the consumer, other than a consumer credit transaction under an 
open end credit plan or a reverse mortgage, except when--
          ``(1) any such impound, trust, or other type of 
        escrow or impound account for such purposes is required 
        by Federal or State law;
          ``(2) a loan is made, guaranteed, or insured by a 
        State or Federal governmental lending or insuring 
        agency;
          ``(3) the transaction is secured by a first mortgage 
        or lien on the consumer's principal dwelling having an 
        original principal obligation amount that--
                  ``(A) does not exceed the amount of the 
                maximum limitation on the original principal 
                obligation of mortgage in effect for a 
                residence of the applicable size, as of the 
                date such interest rate set, pursuant to the 
                sixth sentence of section 305(a)(2) the Federal 
                Home Loan Mortgage Corporation Act (12 U.S.C. 
                1454(a)(2)), and the annual percentage rate 
                will exceed the average prime offer rate for a 
                comparable transaction by 1.5 or more 
                percentage points; or
                  ``(B) exceeds the amount of the maximum 
                limitation on the original principal obligation 
                of mortgage in effect for a residence of the 
                applicable size, as of the date such interest 
                rate set, pursuant to the sixth sentence of 
                section 305(a)(2) the Federal Home Loan 
                Mortgage Corporation Act (12 U.S.C. 
                1454(a)(2)), and the annual percentage rate 
                will exceed the average prime offer rate for a 
                comparable transaction by 2.5 or more 
                percentage points; or
          ``(4) so required pursuant to regulation.
  ``(c) Duration of Mandatory Escrow or Impound Account.--An 
escrow or impound account established pursuant to subsection 
(b), shall remain in existence for a minimum period of 5 years, 
beginning with the date of the consummation of the loan, and 
until such borrower has sufficient equity in the dwelling 
securing the consumer credit transaction so as to no longer be 
required to maintain private mortgage insurance, or such other 
period as may be provided in regulations to address situations 
such as borrower delinquency, unless the underlying mortgage 
establishing the account is terminated.
  ``(d) Limited Exemptions for Loans Secured by Shares in a 
Cooperative and for Certain Condominium Units.--Escrow accounts 
need not be established for loans secured by shares in a 
cooperative. Insurance premiums need not be included in escrow 
accounts for loans secured by condominium units, where the 
condominium association has an obligation to the condominium 
unit owners to maintain a master policy insuring condominium 
units.
  ``(e) Clarification on Escrow Accounts for Loans Not Meeting 
Statutory Test.--For mortgages not covered by the requirements 
of subsection (b), no provision of this section shall be 
construed as precluding the establishment of an impound, trust, 
or other type of account for the payment of property taxes, 
insurance premiums, or other purposes relating to the 
property--
          ``(1) on terms mutually agreeable to the parties to 
        the loan;
          ``(2) at the discretion of the lender or servicer, as 
        provided by the contract between the lender or servicer 
        and the borrower; or
          ``(3) pursuant to the requirements for the escrowing 
        of flood insurance payments for regulated lending 
        institutions in section 102(d) of the Flood Disaster 
        Protection Act of 1973.
  ``(f) Administration of Mandatory Escrow or Impound 
Accounts.--
          ``(1) In general.--Except as may otherwise be 
        provided for in this title or in regulations prescribed 
        by the Board, escrow or impound accounts established 
        pursuant to subsection (b) shall be established in a 
        federally insured depository institution.
          ``(2) Administration.--Except as provided in this 
        section or regulations prescribed under this section, 
        an escrow or impound account subject to this section 
        shall be administered in accordance with--
                  ``(A) the Real Estate Settlement Procedures 
                Act of 1974 and regulations prescribed under 
                such Act;
                  ``(B) the Flood Disaster Protection Act of 
                1973 and regulations prescribed under such Act; 
                and
                  ``(C) the law of the State, if applicable, 
                where the real property securing the consumer 
                credit transaction is located.
          ``(3) Applicability of payment of interest.--If 
        prescribed by applicable State or Federal law, each 
        creditor shall pay interest to the consumer on the 
        amount held in any impound, trust, or escrow account 
        that is subject to this section in the manner as 
        prescribed by that applicable State or Federal law.
          ``(4) Penalty coordination with respa.--Any action or 
        omission on the part of any person which constitutes a 
        violation of the Real Estate Settlement Procedures Act 
        of 1974 or any regulation prescribed under such Act for 
        which the person has paid any fine, civil money 
        penalty, or other damages shall not give rise to any 
        additional fine, civil money penalty, or other damages 
        under this section, unless the action or omission also 
        constitutes a direct violation of this section.
  ``(g) Disclosures Relating to Mandatory Escrow or Impound 
Account.--In the case of any impound, trust, or escrow account 
that is subject to this section, the creditor shall disclose by 
written notice to the consumer at least 3 business days before 
the consummation of the consumer credit transaction giving rise 
to such account or in accordance with timeframes established in 
prescribed regulations the following information:
          ``(1) The fact that an escrow or impound account will 
        be established at consummation of the transaction.
          ``(2) The amount required at closing to initially 
        fund the escrow or impound account.
          ``(3) The amount, in the initial year after the 
        consummation of the transaction, of the estimated taxes 
        and hazard insurance, including flood insurance, if 
        applicable, and any other required periodic payments or 
        premiums that reflects, as appropriate, either the 
        taxable assessed value of the real property securing 
        the transaction, including the value of any 
        improvements on the property or to be constructed on 
        the property (whether or not such construction will be 
        financed from the proceeds of the transaction) or the 
        replacement costs of the property.
          ``(4) The estimated monthly amount payable to be 
        escrowed for taxes, hazard insurance (including flood 
        insurance, if applicable) and any other required 
        periodic payments or premiums.
          ``(5) The fact that, if the consumer chooses to 
        terminate the account at the appropriate time in the 
        future, the consumer will become responsible for the 
        payment of all taxes, hazard insurance, and flood 
        insurance, if applicable, as well as any other required 
        periodic payments or premiums on the property unless a 
        new escrow or impound account is established.
          ``(6) Such other information as the Federal banking 
        agencies jointly determine necessary for the protection 
        of the consumer.
  ``(h) Definitions.--For purposes of this section, the 
following definitions shall apply:
          ``(1) Flood insurance.--The term `flood insurance' 
        means flood insurance coverage provided under the 
        national flood insurance program pursuant to the 
        National Flood Insurance Act of 1968.
          ``(2) Hazard insurance.--The term `hazard insurance' 
        shall have the same meaning as provided for `hazard 
        insurance', `casualty insurance', `homeowner's 
        insurance', or other similar term under the law of the 
        State where the real property securing the consumer 
        credit transaction is located.''.
  (b) Implementation.--
          (1) Regulations.--The Board of Governors of the 
        Federal Reserve System, the Comptroller of the 
        Currency, the Director of the Office of Thrift 
        Supervision, the Federal Deposit Insurance Corporation, 
        the National Credit Union Administration Board, 
        (hereafter in this title referred to as the ``Federal 
        banking agencies'') and the Federal Trade Commission 
        shall prescribe, in final form, such regulations as 
        determined to be necessary to implement the amendments 
        made by subsection (a) before the end of the 180-day 
        period beginning on the date of the enactment of this 
        Act.
          (2) Effective date.--The amendments made by 
        subsection (a) shall only apply to covered mortgage 
        loans consummated after the end of the 1-year period 
        beginning on the date of the publication of final 
        regulations in the Federal Register.
  (c) Clerical Amendment.--The table of sections for chapter 2 
of the Truth in Lending Act is amended by inserting after the 
item relating to section 129C (as added by section 9101) the 
following new item:

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

SEC. 9402. DISCLOSURE NOTICE REQUIRED FOR CONSUMERS WHO WAIVE ESCROW 
                    SERVICES.

  (a) In General.--Section 129D of the Truth in Lending Act (as 
added by section 9401) is amended by adding at the end the 
following new subsection:
  ``(i) Disclosure Notice Required for Consumers Who Waive 
Escrow Services.--
          ``(1) In general.--If--
                  ``(A) an impound, trust, or other type of 
                account for the payment of property taxes, 
                insurance premiums, or other purposes relating 
                to real property securing a consumer credit 
                transaction is not established in connection 
                with the transaction; or
                  ``(B) a consumer chooses, and provides 
                written notice to the creditor or servicer of 
                such choice, at any time after such an account 
                is established in connection with any such 
                transaction and in accordance with any statute, 
                regulation, or contractual agreement, to close 
                such account,
        the creditor or servicer shall provide a timely and 
        clearly written disclosure to the consumer that advises 
        the consumer of the responsibilities of the consumer 
        and implications for the consumer in the absence of any 
        such account.
          ``(2) Disclosure requirements.--Any disclosure 
        provided to a consumer under paragraph (1) shall 
        include the following:
                  ``(A) Information concerning any applicable 
                fees or costs associated with either the non-
                establishment of any such account at the time 
                of the transaction, or any subsequent closure 
                of any such account.
                  ``(B) A clear and prominent notice that the 
                consumer is responsible for personally and 
                directly paying the non-escrowed items, in 
                addition to paying the mortgage loan payment, 
                in the absence of any such account, and the 
                fact that the costs for taxes, insurance, and 
                related fees can be substantial.
                  ``(C) A clear explanation of the consequences 
                of any failure to pay non-escrowed items, 
                including the possible requirement for the 
                forced placement of insurance by the creditor 
                or servicer and the potentially higher cost 
                (including any potential commission payments to 
                the servicer) or reduced coverage for the 
                consumer in the event of any such creditor-
                placed insurance.
                  ``(D) Such other information as the Federal 
                banking agencies jointly determine necessary 
                for the protection of the consumer.''.
  (b) Implementation.--
          (1) Regulations.--The Federal banking agencies and 
        the Federal Trade Commission shall prescribe, in final 
        form, such regulations as such agencies determine to be 
        necessary to implement the amendments made by 
        subsection (a) before the end of the 180-day period 
        beginning on the date of the enactment of this Act.
          (2) Effective date.--The amendments made by 
        subsection (a) shall only apply in accordance with the 
        regulations established in paragraph (1) and beginning 
        on the date occurring 180-days after the date of the 
        publication of final regulations in the Federal 
        Register.

SEC. 9403. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 AMENDMENTS.

  (a) Servicer Prohibitions.--Section 6 of the Real Estate 
Settlement Procedures Act of 1974 (12 U.S.C. 2605) is amended 
by adding at the end the following new subsections:
  ``(k) Servicer Prohibitions.--
          ``(1) In general.--A servicer of a federally related 
        mortgage shall not--
                  ``(A) obtain force-placed hazard insurance 
                unless there is a reasonable basis to believe 
                the borrower has failed to comply with the loan 
                contract's requirements to maintain property 
                insurance;
                  ``(B) charge fees for responding to valid 
                qualified written requests (as defined in 
                regulations which the Secretary shall 
                prescribe) under this section;
                  ``(C) fail to take timely action to respond 
                to a borrower's requests to correct errors 
                relating to allocation of payments, final 
                balances for purposes of paying off the loan, 
                or avoiding foreclosure, or other standard 
                servicer's duties;
                  ``(D) fail to respond within 10 business days 
                to a request from a borrower to provide the 
                identity, address, and other relevant contact 
                information about the owner assignee of the 
                loan; or
                  ``(E) fail to comply with any other 
                obligation found by the Secretary, by 
                regulation, to be appropriate to carry out the 
                consumer protection purposes of this Act.
          ``(2) Force-placed insurance defined.--For purposes 
        of this subsection and subsections (l) and (m), the 
        term `force-placed insurance' means hazard insurance 
        coverage obtained by a servicer of a federally related 
        mortgage when the borrower has failed to maintain or 
        renew hazard insurance on such property as required of 
        the borrower under the terms of the mortgage.
  ``(l) Requirements for Force-Placed Insurance.--A servicer of 
a federally related mortgage shall not be construed as having a 
reasonable basis for obtaining force-placed insurance unless 
the requirements of this subsection have been met.
          ``(1) Written notices to borrower.--A servicer may 
        not impose any charge on any borrower for force-placed 
        insurance with respect to any property securing a 
        federally related mortgage unless--
                  ``(A) the servicer has sent, by first-class 
                mail, a written notice to the borrower 
                containing--
                          ``(i) a reminder of the borrower's 
                        obligation to maintain hazard insurance 
                        on the property securing the federally 
                        related mortgage;
                          ``(ii) a statement that the servicer 
                        does not have evidence of insurance 
                        coverage of such property;
                          ``(iii) a clear and conspicuous 
                        statement of the procedures by which 
                        the borrower may demonstrate that the 
                        borrower already has insurance 
                        coverage; and
                          ``(iv) a statement that the servicer 
                        may obtain such coverage at the 
                        borrower's expense if the borrower does 
                        not provide such demonstration of the 
                        borrower's existing coverage in a 
                        timely manner;
                  ``(B) the servicer has sent, by first-class 
                mail, a second written notice, at least 30 days 
                after the mailing of the notice under 
                subparagraph (A) that contains all the 
                information described in each clause of such 
                subparagraph; and
                  ``(C) the servicer has not received from the 
                borrower any demonstration of hazard insurance 
                coverage for the property securing the mortgage 
                by the end of the 15-day period beginning on 
                the date the notice under subparagraph (B) was 
                sent by the servicer.
          ``(2) Sufficiency of demonstration.--A servicer of a 
        federally related mortgage shall accept any reasonable 
        form of written confirmation from a borrower of 
        existing insurance coverage, which shall include the 
        existing insurance policy number along with the 
        identity of, and contact information for, the insurance 
        company or agent.
          ``(3) Termination of force-placed insurance.--Within 
        15 days of the receipt by a servicer of confirmation of 
        a borrower's existing insurance coverage, the servicer 
        shall--
                  ``(A) terminate the force-placed insurance; 
                and
                  ``(B) refund to the consumer all force-placed 
                insurance premiums paid by the borrower during 
                any period during which the borrower's 
                insurance coverage and the force-placed 
                insurance coverage were each in effect, and any 
                related fees charged to the consumer's account 
                with respect to the force-placed insurance 
                during such period.
          ``(4) Clarification with respect to flood disaster 
        protection act.--No provision of this section shall be 
        construed as prohibiting a servicer from providing 
        simultaneous or concurrent notice of a lack of flood 
        insurance pursuant to section 102(e) of the Flood 
        Disaster Protection Act of 1973.
  ``(m) Limitations on Force-Placed Insurance Charges.--All 
charges for force-placed insurance premiums shall be bona fide 
and reasonable in amount.''.
  (b) Increase in Penalty Amounts.--Section 6(f) of the Real 
Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(f)) is 
amended--
          (1) in paragraphs (1)(B) and (2)(B), by striking 
        ``$1,000'' each place such term appears and inserting 
        ``$2,000''; and
          (2) in paragraph (2)(B)(i), by striking ``$500,000'' 
        and inserting ``$1,000,000''.
  (c) Decrease in Response Times.--Section 6(e) of the Real 
Estate Settlement Procedures Act of 1974 (12 U.S.C. 2605(e)) is 
amended--
          (1) in paragraph (1)(A), by striking ``20 days'' and 
        inserting ``5 days'';
          (2) in paragraph (2), by striking ``60 days'' and 
        inserting ``30 days''; and
          (3) by adding at the end the following new paragraph:
          ``(4) Limited extension of response time.--The 30-day 
        period described in paragraph (2) may be extended for 
        not more than 15 days if, before the end of such 30-day 
        period, the servicer notifies the borrower of the 
        extension and the reasons for the delay in 
        responding.''.
  (d) Prompt Refund of Escrow Accounts Upon Payoff.--Section 
6(g) of the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2605(g)) is amended by adding at the end the following 
new sentence: ``Any balance in any such account that is within 
the servicer's control at the time the loan is paid off shall 
be promptly returned to the borrower within 20 business days or 
credited to a similar account for a new mortgage loan to the 
borrower with the same lender.''.

SEC. 9404. TRUTH IN LENDING ACT AMENDMENTS.

  (a) Requirements for Prompt Crediting of Home Loan 
Payments.--Chapter 2 of the Truth in Lending Act (15 U.S.C. 
1631 et seq.) is amended by inserting after section 129E (as 
added by section 9502) the following new section (and by 
amending the table of contents accordingly):

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

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

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

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

SEC. 9405. ESCROWS INCLUDED IN REPAYMENT ANALYSIS.

  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) Repayment analysis required to include escrow 
        payments.--
                  ``(A) In general.--In the case of any 
                consumer credit transaction secured by a first 
                mortgage or lien on the principal dwelling of 
                the consumer, other than a consumer credit 
                transaction under an open end credit plan or a 
                reverse mortgage, for which an impound, trust, 
                or other type of account has been or will be 
                established in connection with the transaction 
                for the payment of property taxes, hazard and 
                flood (if any) insurance premiums, or other 
                periodic payments or premiums with respect to 
                the property, the information required to be 
                provided under subsection (a) with respect to 
                the number, amount, and due dates or period of 
                payments scheduled to repay the total of 
                payments shall take into account the amount of 
                any monthly payment to such account for each 
                such repayment in accordance with section 
                10(a)(2) of the Real Estate Settlement 
                Procedures Act of 1974.
                  ``(B) Assessment value.--The amount taken 
                into account under subparagraph (A) for the 
                payment of property taxes, hazard and flood (if 
                any) insurance premiums, or other periodic 
                payments or premiums with respect to the 
                property shall reflect the taxable assessed 
                value of the real property securing the 
                transaction after the consummation of the 
                transaction, including the value of any 
                improvements on the property or to be 
                constructed on the property (whether or not 
                such construction will be financed from the 
                proceeds of the transaction), if known, and the 
                replacement costs of the property for hazard 
                insurance, in the initial year after the 
                transaction.''.

                    Subtitle F--Appraisal Activities

SEC. 9501. PROPERTY APPRAISAL REQUIREMENTS.

  Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et 
seq.) is amended by inserting after 129G (as added by section 
9404(b)) the following new section:

``SEC. 129H PROPERTY APPRAISAL REQUIREMENTS.

  ``(a) In General.--A creditor may not extend credit in the 
form of a subprime mortgage to any consumer without first 
obtaining a written appraisal of the property to be mortgaged 
prepared in accordance with the requirements of this section.
  ``(b) Appraisal Requirements.--
          ``(1) Physical property visit.--An appraisal of 
        property to be secured by a subprime mortgage does not 
        meet the requirement of this section unless it is 
        performed by a qualified appraiser who conducts a 
        physical property visit of the interior of the 
        mortgaged property.
          ``(2) Second appraisal under certain circumstances.--
                  ``(A) In general.--If the purpose of a 
                subprime mortgage is to finance the purchase or 
                acquisition of the mortgaged property from a 
                person within 180 days of the purchase or 
                acquisition of such property by that person at 
                a price that was lower than the current sale 
                price of the property, the creditor shall 
                obtain a second appraisal from a different 
                qualified appraiser. The second appraisal shall 
                include an analysis of the difference in sale 
                prices, changes in market conditions, and any 
                improvements made to the property between the 
                date of the previous sale and the current sale.
                  ``(B) No cost to applicant.--The cost of any 
                second appraisal required under subparagraph 
                (A) may not be charged to the applicant.
          ``(3) Qualified appraiser defined.--For purposes of 
        this section, the term `qualified appraiser' means a 
        person who--
                  ``(A) is, at a minimum, certified or licensed 
                by the State in which the property to be 
                appraised is located; and
                  ``(B) performs each appraisal in conformity 
                with the Uniform Standards of Professional 
                Appraisal Practice and title XI of the 
                Financial Institutions Reform, Recovery, and 
                Enforcement Act of 1989, and the regulations 
                prescribed under such title, as in effect on 
                the date of the appraisal.
  ``(c) Free Copy of Appraisal.--A creditor shall provide 1 
copy of each appraisal conducted in accordance with this 
section in connection with a subprime mortgage to the applicant 
without charge, and at least 3 days prior to the transaction 
closing date.
  ``(d) Consumer Notification.--At the time of the initial 
mortgage application, the applicant shall be provided with a 
statement by the creditor that any appraisal prepared for the 
mortgage is for the sole use of the creditor, and that the 
applicant may choose to have a separate appraisal conducted at 
their own expense.
  ``(e) Violations.--In addition to any other liability to any 
person under this title, a creditor found to have willfully 
failed to obtain an appraisal as required in this section shall 
be liable to the applicant or borrower for the sum of $2,000.
  ``(f) Subprime Mortgage Defined.--For purposes of this 
section, the term `subprime mortgage' means a residential 
mortgage loan secured by a principal dwelling with an annual 
percentage rate that exceeds the average prime offer rate for a 
comparable transaction, as of the date the interest rate is 
set--
          ``(1) by 1.5 or more percentage points, in the case 
        of a first lien residential mortgage loan having an 
        original principal obligation amount that does not 
        exceed the amount of the maximum limitation on the 
        original principal obligation of mortgage in effect for 
        a residence of the applicable size, as of the date of 
        such interest rate set, pursuant to the sixth sentence 
        of section 305(a)(2) the Federal Home Loan Mortgage 
        Corporation Act (12 U.S.C. 1454(a)(2));
          ``(2) by 2.5 or more percentage points, in the case 
        of a first lien residential mortgage loan having an 
        original principal obligation amount that exceeds the 
        amount of the maximum limitation on the original 
        principal obligation of mortgage in effect for a 
        residence of the applicable size, as of the date of 
        such interest rate set, pursuant to the sixth sentence 
        of section 305(a)(2) the Federal Home Loan Mortgage 
        Corporation Act (12 U.S.C. 1454(a)(2)); and
          ``(3) by 3.5 or more percentage points for a 
        subordinate lien residential mortgage loan.''.

SEC. 9502. UNFAIR AND DECEPTIVE PRACTICES AND ACTS RELATING TO CERTAIN 
                    CONSUMER CREDIT TRANSACTIONS.

  (a) In General.--Chapter 2 of the Truth in Lending Act (15 
U.S.C. 1631 et seq.) is amended by inserting after section 129D 
(as added by section 9401(a)) the following new section:

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

  ``(a) In General.--It shall be unlawful, in extending credit 
or in providing any services for a consumer credit transaction 
secured by the principal dwelling of the consumer, to engage in 
any unfair or deceptive act or practice as described in or 
pursuant to regulations prescribed under this section.
  ``(b) Appraisal Independence.--For purposes of subsection 
(a), unfair and deceptive practices shall include--
          ``(1) any appraisal of a property offered as security 
        for repayment of the consumer credit transaction that 
        is conducted in connection with such transaction in 
        which a person with an interest in the underlying 
        transaction compensates, coerces, extorts, colludes, 
        instructs, induces, bribes, or intimidates a person 
        conducting or involved in an appraisal, or attempts, to 
        compensate, coerce, extort, collude, instruct, induce, 
        bribe, or intimidate such a person, for the purpose of 
        causing the appraised value assigned, under the 
        appraisal, to the property to be based on any factor 
        other than the independent judgment of the appraiser;
          ``(2) mischaracterizing, or suborning any 
        mischaracterization of, the appraised value of the 
        property securing the extension of the credit;
          ``(3) seeking to influence an appraiser or otherwise 
        to encourage a targeted value in order to facilitate 
        the making or pricing of the transaction; and
          ``(4) withholding or threatening to withhold timely 
        payment for an appraisal report or for appraisal 
        services rendered.
  ``(c) Exceptions.--The requirements of subsection (b) shall 
not be construed as prohibiting a mortgage lender, mortgage 
broker, mortgage banker, real estate broker, appraisal 
management company, employee of an appraisal management 
company, consumer, or any other person with an interest in a 
real estate transaction from asking an appraiser to provide 1 
or more of the following services:
          ``(1) Consider additional, appropriate property 
        information, including the consideration of additional 
        comparable properties to make or support an appraisal.
          ``(2) Provide further detail, substantiation, or 
        explanation for the appraiser's value conclusion.
          ``(3) Correct errors in the appraisal report.
  ``(d) Prohibitions on Conflicts of Interest.--No certified or 
licensed appraiser conducting, and no appraisal management 
company procuring or facilitating, an appraisal in connection 
with a consumer credit transaction secured by the principal 
dwelling of a consumer may have a direct or indirect interest, 
financial or otherwise, in the property or transaction 
involving the appraisal.
  ``(e) Mandatory Reporting.--Any mortgage lender, mortgage 
broker, mortgage banker, real estate broker, appraisal 
management company, employee of an appraisal management 
company, or any other person involved in a real estate 
transaction involving an appraisal in connection with a 
consumer credit transaction secured by the principal dwelling 
of a consumer who has a reasonable basis to believe an 
appraiser is failing to comply with the Uniform Standards of 
Professional Appraisal Practice, is violating applicable laws, 
or is otherwise engaging in unethical or unprofessional 
conduct, shall refer the matter to the applicable State 
appraiser certifying and licensing agency.
  ``(f) No Extension of Credit.--In connection with a consumer 
credit transaction secured by a consumer's principal dwelling, 
a creditor who knows, at or before loan consummation, of a 
violation of the appraisal independence standards established 
in subsections (b) or (d) shall not extend credit based on such 
appraisal unless the creditor documents that the creditor has 
acted with reasonable diligence to determine that the appraisal 
does not materially misstate or misrepresent the value of such 
dwelling.
  ``(g) Rulemaking Proceedings.--The Board, the Comptroller of 
the Currency, the Director of the Office of Thrift Supervision, 
the Federal Deposit Insurance Corporation, the National Credit 
Union Administration Board, and the Federal Trade Commission--
          ``(1) shall, for purposes of this section, jointly 
        prescribe regulations no later than 180 days after the 
        date of the enactment of this section, and where such 
        regulations have an effective date of no later than 1 
        year after the date of the enactment of this section, 
        defining with specificity acts or practices which are 
        unfair or deceptive in the provision of mortgage 
        lending services for a consumer credit transaction 
        secured by the principal dwelling of the consumer or 
        mortgage brokerage services for such a transaction and 
        defining any terms in this section or such regulations; 
        and
          ``(2) may jointly issue interpretive guidelines and 
        general statements of policy with respect to unfair or 
        deceptive acts or practices in the provision of 
        mortgage lending services for a consumer credit 
        transaction secured by the principal dwelling of the 
        consumer and mortgage brokerage services for such a 
        transaction, within the meaning of subsections (a), 
        (b), (c), (d), (e), and (f).
  ``(h) Penalties.--
          ``(1) First violation.--In addition to the 
        enforcement provisions referred to in section 130, each 
        person who violates this section shall forfeit and pay 
        a civil penalty of not more than $10,000 for each day 
        any such violation continues.
          ``(2) Subsequent violations.--In the case of any 
        person on whom a civil penalty has been imposed under 
        paragraph (1), paragraph (1) shall be applied by 
        substituting `$20,000' for `$10,000' with respect to 
        all subsequent violations.
          ``(3) Assessment.--The agency referred to in 
        subsection (a) or (c) of section 108 with respect to 
        any person described in paragraph (1) shall assess any 
        penalty under this subsection to which such person is 
        subject.''.
  (b) Clerical Amendment.--The table of sections for chapter 2 
of the Truth in Lending Act is amended by inserting after the 
item relating to section 129D (as added by section 9401(c)) the 
following new item:

``129E. Unfair and deceptive practices and acts relating to certain 
          consumer credit transactions.''.

SEC. 9503. AMENDMENTS RELATING TO APPRAISAL SUBCOMMITTEE OF FIEC, 
                    APPRAISER INDEPENDENCE MONITORING, APPROVED 
                    APPRAISER EDUCATION, APPRAISAL MANAGEMENT 
                    COMPANIES, APPRAISER COMPLAINT HOTLINE, AUTOMATED 
                    VALUATION MODELS, AND BROKER PRICE OPINIONS.

  (a) Consumer Protection Mission.--
          (1) Purposes.--Section 1101 of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989 (12 U.S.C. 3331) is amended by inserting ``and to 
        provide the Appraisal Subcommittee with a consumer 
        protection mandate'' before the period at the end.
          (2) Functions of appraisal subcommittee.--Section 
        1103(a) of the Financial Institutions Reform, Recovery, 
        and Enforcement Act of 1989 (12 U.S.C. 3332(a)) is 
        amended--
                  (A) by striking ``and'' at the end of 
                paragraph (3); and
                  (B) by amending paragraph (4) to read as 
                follows:
          ``(4) monitor the efforts of, and requirements 
        established by, States and the Federal financial 
        institutions regulatory agencies to protect consumers 
        from improper appraisal practices and the predations of 
        unlicensed appraisers in consumer credit transactions 
        that are secured by a consumer's principal dwelling; 
        and''.
          (3) Threshold levels.--Section 1112(b) of the 
        Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 (12 U.S.C. 3341(b)) is amended 
        by inserting before the period the following: ``, and 
        that such threshold level provides reasonable 
        protection for consumers who purchase 1-4 unit single-
        family residences. In determining whether a threshold 
        level provides reasonable protection for consumers, 
        each Federal financial institutions regulatory agency 
        shall consult with consumer groups and convene a public 
        hearing''.
  (b) Annual Report of Appraisal Subcommittee.--Section 1103(a) 
of the Financial Institutions Reform, Recovery, and Enforcement 
Act of 1989 (12 U.S.C. 3332(a)) is amended at the end by 
inserting the following new paragraph:
          ``(5) transmit an annual report to the Congress not 
        later than January 31 of each year that describes the 
        manner in which each function assigned to the Appraisal 
        Subcommittee has been carried out during the preceding 
        year. The report shall also detail the activities of 
        the Appraisal Subcommittee, including the results of 
        all audits of State appraiser regulatory agencies, and 
        provide an accounting of disapproved actions and 
        warnings taken in the previous year, including a 
        description of the conditions causing the disapproval 
        and actions taken to achieve compliance.''.
  (c) Open Meetings.--Section 1104(b) of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3333(b)) is amended by inserting ``in public session 
after notice in the Federal Register'' after ``shall meet''.
  (d) Regulations.--Section 1106 of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3335) 
is amended--
          (1) by inserting ``prescribe regulations after notice 
        and opportunity for comment,'' after ``hold hearings''; 
        and
          (2) at the end by inserting ``Any regulations 
        prescribed by the Appraisal Subcommittee shall (unless 
        otherwise provided in this title) be limited to the 
        following functions: temporary practice, national 
        registry, information sharing, and enforcement. For 
        purposes of prescribing regulations, the Appraisal 
        Subcommittee shall establish an advisory committee of 
        industry participants, including appraisers, lenders, 
        consumer advocates, and government agencies, and hold 
        meetings as necessary to support the development of 
        regulations.''.
  (e) Appraisals and Appraisal Reviews.--Section 1113 of the 
Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 (12 U.S.C. 3342) is amended--
          (1) by striking ``In determining'' and inserting 
        ``(a) In General.--In determining'';
          (2) in subsection (a) (as designated by paragraph 
        (1)), by inserting before the period the following: ``, 
        where a complex 1-to-4 unit single family residential 
        appraisal means an appraisal for which the property to 
        be appraised, the form of ownership, the property 
        characteristics, or the market conditions are 
        atypical''; and
          (3) by adding at the end the following new 
        subsection:
  ``(b) Appraisals and Appraisal Reviews.--All appraisals 
performed at a property within a State shall be prepared by 
appraisers licensed or certified in the State where the 
property is located. All appraisal reviews, including appraisal 
reviews by a lender, appraisal management company, or other 
third party organization, shall be performed by an appraiser 
who is duly licensed or certified by a State appraisal 
board.''.
  (f) Appraisal Management Services.--
          (1) Supervision of third party providers of appraisal 
        management services.--Section 1103(a) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989 (12 U.S.C. 3332(a)) (as previously amended by this 
        section) is further amended--
                  (A) by amending paragraph (1) to read as 
                follows:
          ``(1) monitor the requirements established by 
        States--
                  ``(A) for the certification and licensing of 
                individuals who are qualified to perform 
                appraisals in connection with federally related 
                transactions, including a code of professional 
                responsibility; and
                  ``(B) for the registration and supervision of 
                the operations and activities of an appraisal 
                management company;''; and
                  (B) by adding at the end the following new 
                paragraph:
          ``(7) maintain a national registry of appraisal 
        management companies that either are registered with 
        and subject to supervision of a State appraiser 
        certifying and licensing agency or are operating 
        subsidiaries of a Federally regulated financial 
        institution.''.
          (2) Appraisal management company minimum 
        qualifications.--Title XI of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3331 et seq.) is amended by adding at the end 
        the following new section (and amending the table of 
        contents accordingly):

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

  ``(a) In General.--The Appraiser Qualifications Board of the 
Appraisal Foundation shall establish minimum qualifications to 
be applied by a State in the registration of appraisal 
management companies. Such qualifications shall include a 
requirement that such companies--
          ``(1) register with and be subject to supervision by 
        a State appraiser certifying and licensing agency in 
        each State in which such company operates;
          ``(2) verify that only licensed or certified 
        appraisers are used for federally related transactions;
          ``(3) require that appraisals coordinated by an 
        appraisal management company comply with the Uniform 
        Standards of Professional Appraisal Practice; and
          ``(4) require that appraisals are conducted 
        independently and free from inappropriate influence and 
        coercion pursuant to the appraisal independence 
        standards established under section 129E of the Truth 
        in Lending Act.
  ``(b) Exception for Federally Regulated Financial 
Institutions.--The requirements of subsection (a) shall not 
apply to an appraisal management company that is a subsidiary 
owned and controlled by a financial institution and regulated 
by a federal financial institution regulatory agency. In such 
case, the appropriate federal financial institutions regulatory 
agency shall, at a minimum, develop regulations affecting the 
operations of the appraisal management company to--
          ``(1) verify that only licensed or certified 
        appraisers are used for federally related transactions;
          ``(2) require that appraisals coordinated by an 
        institution or subsidiary providing appraisal 
        management services comply with the Uniform Standards 
        of Professional Appraisal Practice; and
          ``(3) require that appraisals are conducted 
        independently and free from inappropriate influence and 
        coercion pursuant to the appraisal independence 
        standards established under section 129E of the Truth 
        in Lending Act.
  ``(c) Registration Limitations.--An appraisal management 
company shall not be registered by a State if such company, in 
whole or in part, directly or indirectly, is owned by any 
person who has had an appraiser license or certificate refused, 
denied, cancelled, surrendered in lieu of revocation, or 
revoked in any State. Additionally, each person that owns more 
than 10 percent of an appraisal management company shall be of 
good moral character, as determined by the State appraiser 
certifying and licensing agency, and shall submit to a 
background investigation carried out by the State appraiser 
certifying and licensing agency.
  ``(d) Regulations.--The Appraisal Subcommittee shall 
promulgate regulations to implement the minimum qualifications 
developed by the Appraiser Qualifications Board under this 
section, as such qualifications relate to the State appraiser 
certifying and licensing agencies. The Appraisal Subcommittee 
shall also promulgate regulations for the reporting of the 
activities of appraisal management companies in determining the 
payment of the annual registry fee.
  ``(e) Effective Date.--
          ``(1) In general.--No appraisal management company 
        may perform services related to a federally related 
        transaction in a State after the date that is 36 months 
        after the date of the enactment of this section unless 
        such company is registered with such State or subject 
        to oversight by a federal financial institutions 
        regulatory agency.
          ``(2) Extension of effective date.--Subject to the 
        approval of the Council, the Appraisal Subcommittee may 
        extend by an additional 12 months the requirements for 
        the registration and supervision of appraisal 
        management companies if it makes a written finding that 
        a State has made substantial progress in establishing a 
        State appraisal management company registration and 
        supervision system that appears to conform with the 
        provisions of this title.''.
          (3) State appraiser certifying and licensing agency 
        authority.--Section 1117 of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3346) is amended by adding at the end the 
        following: ``The duties of such agency may additionally 
        include the registration and supervision of appraisal 
        management companies.''.
          (4) Appraisal management company definition.--Section 
        1121 of the Financial Institutions Reform, Recovery, 
        and Enforcement Act of 1989 (12 U.S.C. 3350) is amended 
        by adding at the end the following:
          ``(11) Appraisal management company.--The term 
        `appraisal management company' means, in connection 
        with valuing properties collateralizing mortgage loans 
        or mortgages incorporated into a securitization, any 
        external third party authorized either by a creditor of 
        a consumer credit transaction secured by a consumer's 
        principal dwelling or by an underwriter of or other 
        principal in the secondary mortgage markets, that 
        oversees a network or panel of more than 15 certified 
        or licensed appraisers in a State or 25 or more 
        nationally within a given year--
                  ``(A) to recruit, select, and retain 
                appraisers;
                  ``(B) to contract with licensed and certified 
                appraisers to perform appraisal assignments;
                  ``(C) to manage the process of having an 
                appraisal performed, including providing 
                administrative duties such as receiving 
                appraisal orders and appraisal reports, 
                submitting completed appraisal reports to 
                creditors and underwriters, collecting fees 
                from creditors and underwriters for services 
                provided, and reimbursing appraisers for 
                services performed; or
                  ``(D) to review and verify the work of 
                appraisers.''.
  (g) State Agency Reporting Requirement.--Section 1109(a) of 
the Financial Institutions Reform, Recovery, and Enforcement 
Act of 1989 (12 U.S.C. 3338(a)) is amended--
          (1) by striking ``and'' after the semicolon in 
        paragraph (1);
          (2) by redesignating paragraph (2) as paragraph (4); 
        and
          (3) by inserting after paragraph (1) the following 
        new paragraphs:
          ``(2) transmit reports on sanctions, disciplinary 
        actions, license and certification revocations, and 
        license and certification suspensions on a timely basis 
        to the national registry of the Appraisal Subcommittee;
          ``(3) transmit reports on a timely basis of 
        supervisory activities involving appraisal management 
        companies or other third-party providers of appraisals 
        and appraisal management services, including 
        investigations initiated and disciplinary actions 
        taken; and''.
  (h) Registry Fees Modified.--
          (1) In general.--Section 1109(a) of the Financial 
        Institutions Reform, Recovery, and Enforcement Act of 
        1989 (12 U.S.C. 3338(a)) is amended--
                  (A) by amending paragraph (4) (as modified by 
                section 9503(g)) to read as follows:
          ``(4) collect--
                  ``(A) from such individuals who perform or 
                seek to perform appraisals in federally related 
                transactions, an annual registry fee of not 
                more than $40, such fees to be transmitted by 
                the State agencies to the Council on an annual 
                basis; and
                  ``(B) from an appraisal management company 
                that either has registered with a State 
                appraiser certifying and licensing agency in 
                accordance with this title or operates as a 
                subsidiary of a federally regulated financial 
                institution, an annual registry fee of--
                          ``(i) in the case of such a company 
                        that has been in existence for more 
                        than a year, $25 multiplied by the 
                        number of appraisers working for or 
                        contracting with such company in such 
                        State during the previous year, but 
                        where such $25 amount may be adjusted, 
                        up to a maximum of $50, at the 
                        discretion of the Appraisal 
                        Subcommittee, if necessary to carry out 
                        the Subcommittee's functions under this 
                        title; and
                          ``(ii) in the case of such a company 
                        that has not been in existence for more 
                        than a year, $25 multiplied by an 
                        appropriate number to be determined by 
                        the Appraisal Subcommittee, and where 
                        such number will be used for 
                        determining the fee of all such 
                        companies that were not in existence 
                        for more than a year, but where such 
                        $25 amount may be adjusted, up to a 
                        maximum of $50, at the discretion of 
                        the Appraisal Subcommittee, if 
                        necessary to carry out the 
                        Subcommittee's functions under this 
                        title.''; and
                  (B) by amending the matter following 
                paragraph (4), as redesignated, to read as 
                follows:
``Subject to the approval of the Council, the Appraisal 
Subcommittee may adjust the dollar amount of registry fees 
under paragraph (4)(A), up to a maximum of $80 per annum, as 
necessary to carry out its functions under this title. The 
Appraisal Subcommittee shall consider at least once every 5 
years whether to adjust the dollar amount of the registry fees 
to account for inflation. In implementing any change in 
registry fees, the Appraisal Subcommittee shall provide 
flexibility to the States for multi-year certifications and 
licenses already in place, as well as a transition period to 
implement the changes in registry fees. In establishing the 
amount of the annual registry fee for an appraisal management 
company, the Appraisal Subcommittee shall have the discretion 
to impose a minimum annual registry fee for an appraisal 
management company to protect against the under reporting of 
the number of appraisers working for or contracted by the 
appraisal management company.''.
          (2) Incremental revenues.--Incremental revenues 
        collected pursuant to the increases required by this 
        subsection shall be placed in a separate account at the 
        United States Treasury, entitled the ``Appraisal 
        Subcommittee Account''.
  (i) Grants and Reports.--Section 1109(b) of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3348(b)) is amended--
          (1) by striking ``and'' after the semicolon in 
        paragraph (3);
          (2) by striking the period at the end of paragraph 
        (4) and inserting a semicolon;
          (3) by adding at the end the following new 
        paragraphs:
          ``(5) to make grants to State appraiser certifying 
        and licensing agencies to support the efforts of such 
        agencies to comply with this title, including--
                  ``(A) the complaint process, complaint 
                investigations, and appraiser enforcement 
                activities of such agencies; and
                  ``(B) the submission of data on State 
                licensed and certified appraisers and appraisal 
                management companies to the National appraisal 
                registry, including information affirming that 
                the appraiser or appraisal management company 
                meets the required qualification criteria and 
                formal and informal disciplinary actions; and
          ``(6) to report to all State appraiser certifying and 
        licensing agencies when a license or certification is 
        surrendered, revoked, or suspended.''.
Obligations authorized under this subsection may not exceed 75 
percent of the fiscal year total of incremental increase in 
fees collected and deposited in the ``Appraisal Subcommittee 
Account'' pursuant to subsection (h).
  (j) Criteria.--Section 1116 of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 3345) 
is amended--
          (1) in subsection (c), by inserting ``whose criteria 
        for the licensing of a real estate appraiser currently 
        meet or exceed the minimum criteria issued by the 
        Appraisal Qualifications Board of The Appraisal 
        Foundation for the licensing of real estate 
        appraisers'' before the period at the end; and
          (2) by striking subsection (e) and inserting the 
        following new subsection:
  ``(e) Minimum Qualification Requirements.--Any requirements 
established for individuals in the position of `Trainee 
Appraiser' and `Supervisory Appraiser' shall meet or exceed the 
minimum qualification requirements of the Appraiser 
Qualifications Board of The Appraisal Foundation. The Appraisal 
Subcommittee shall have the authority to enforce these 
requirements.''.
  (k) Monitoring of State Appraiser Certifying and Licensing 
Agencies.--Section 1118 of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3347) is 
amended--
          (1) by amending subsection (a) to read as follows:
  ``(a) In General.--The Appraisal Subcommittee shall monitor 
each State appraiser certifying and licensing agency for the 
purposes of determining whether such agency--
          ``(1) has policies, practices, funding, staffing, and 
        procedures that are consistent with this title;
          ``(2) processes complaints and completes 
        investigations in a reasonable time period;
          ``(3) appropriately disciplines sanctioned appraisers 
        and appraisal management companies;
          ``(4) maintains an effective regulatory program; and
          ``(5) reports complaints and disciplinary actions on 
        a timely basis to the national registries on appraisers 
        and appraisal management companies maintained by the 
        Appraisal Subcommittee.
The Appraisal Subcommittee shall have the authority to remove a 
State licensed or certified appraiser or a registered appraisal 
management company from a national registry on an interim basis 
pending State agency action on licensing, certification, 
registration, and disciplinary proceedings. The Appraisal 
Subcommittee and all agencies, instrumentalities, and Federally 
recognized entities under this title shall not recognize 
appraiser certifications and licenses from States whose 
appraisal policies, practices, funding, staffing, or procedures 
are found to be inconsistent with this title. The Appraisal 
Subcommittee shall have the authority to impose sanctions, as 
described in this section, against a State agency that fails to 
have an effective appraiser regulatory program. In determining 
whether such a program is effective, the Appraisal Subcommittee 
shall include an analyses of the licensing and certification of 
appraisers, the registration of appraisal management companies, 
the issuance of temporary licenses and certifications for 
appraisers, the receiving and tracking of submitted complaints 
against appraisers and appraisal management companies, the 
investigation of complaints, and enforcement actions against 
appraisers and appraisal management companies. The Appraisal 
Subcommittee shall have the authority to impose interim actions 
and suspensions against a State agency as an alternative to, or 
in advance of, the derecognition of a State agency.''.
          (2) in subsection (b)(2), by inserting after 
        ``authority'' the following: ``or sufficient funding''.
  (l) Reciprocity.--Subsection (b) of section 1122 of the 
Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 (12 U.S.C. 3351(b)) is amended to read as follows:
  ``(b) Reciprocity.--A State appraiser certifying or licensing 
agency shall issue a reciprocal certification or license for an 
individual from another State when--
          ``(1) the appraiser licensing and certification 
        program of such other State is in compliance with the 
        provisions of this title; and
          ``(2) the appraiser holds a valid certification from 
        a State whose requirements for certification or 
        licensing meet or exceed the licensure standards 
        established by the State where an individual seeks 
        appraisal licensure.''.
  (m) Consideration of Professional Appraisal Designations.--
Section 1122(d) of the Financial Institutions Reform, Recovery, 
and Enforcement Act of 1989 (12 U.S.C. 3351(d)) is amended by 
striking ``shall not exclude'' and all that follows through the 
end of the subsection and inserting the following: ``may 
include education achieved, experience, sample appraisals, and 
references from prior clients. Membership in a nationally 
recognized professional appraisal organization may be a 
criteria considered, though lack of membership therein shall 
not be the sole bar against consideration for an assignment 
under these criteria.''.
  (n) Appraiser Independence.--Section 1122 of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3351) is amended by adding at the end the following new 
subsection:
  ``(g) Appraiser Independence Monitoring.--The Appraisal 
Subcommittee shall monitor each State appraiser certifying and 
licensing agency for the purpose of determining whether such 
agency's policies, practices, and procedures are consistent 
with the purposes of maintaining appraiser independence and 
whether such State has adopted and maintains effective laws, 
regulations, and policies aimed at maintaining appraiser 
independence.''.
  (o) Appraiser Education.--Section 1122 of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3351) is amended by inserting after subsection (g) (as 
added by subsection (l) of this section) the following new 
subsection:
  ``(h) Approved Education.--The Appraisal Subcommittee shall 
encourage the States to accept courses approved by the 
Appraiser Qualification Board's Course Approval Program.''.
  (p) Appraisal Complaint Hotline.--Section 1122 of the 
Financial Institutions Reform, Recovery, and Enforcement Act of 
1989 (12 U.S.C. 3351), as amended by this section, is further 
amended by adding at the end the following new subsection:
  ``(i) Appraisal Complaint National Hotline.--If, 1 year after 
the date of the enactment of this subsection, the Appraisal 
Subcommittee determines that no national hotline exists to 
receive complaints of non-compliance with appraisal 
independence standards and Uniform Standards of Professional 
Appraisal Practice, including complaints from appraisers, 
individuals, or other entities concerning the improper 
influencing or attempted improper influencing of appraisers or 
the appraisal process, the Appraisal Subcommittee shall 
establish and operate such a national hotline, which shall 
include a toll-free telephone number and an email address. If 
the Appraisal Subcommittee operates such a national hotline, 
the Appraisal Subcommittee shall refer complaints for further 
action to appropriate governmental bodies, including a State 
appraiser certifying and licensing agency, a financial 
institution regulator, or other appropriate legal authorities. 
For complaints referred to State appraiser certifying and 
licensing agencies or to Federal regulators, the Appraisal 
Subcommittee shall have the authority to follow up such 
complaint referrals in order to determine the status of the 
resolution of the complaint.''.
  (q) Automated Valuation Models.--Title XI of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3331 et seq.), as amended by this section, is further 
amended by adding at the end the following new section (and 
amending the table of contents accordingly):

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

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

``SEC. 1126. BROKER PRICE OPINIONS.

  ``(a) General Prohibition.--In conjunction with the purchase 
of a consumer's principal dwelling, broker price opinions may 
not be used as the primary basis to determine the value of a 
piece of property for the purpose of a loan origination of a 
residential mortgage loan secured by such piece of property.
  ``(b) Broker Price Opinion Defined.--For purposes of this 
section, the term `broker price opinion' means an estimate 
prepared by a real estate broker, agent, or sales person that 
details the probable selling price of a particular piece of 
real estate property and provides a varying level of detail 
about the property's condition, market, and neighborhood, and 
information on comparable sales, but does not include an 
automated valuation model, as defined in section 1125(c).''.
  (s) Amendments to Appraisal Subcommittee.--Section 1011 of 
the Federal Financial Institutions Examination Council Act of 
1978 (12 U.S.C. 3310) is amended--
          (1) in the first sentence, by adding before the 
        period the following: ``and the Federal Housing Finance 
        Agency''; and
          (2) by inserting at the end the following: ``At all 
        times at least one member of the Appraisal Subcommittee 
        shall have demonstrated knowledge and competence 
        through licensure, certification, or professional 
        designation within the appraisal profession.''.
  (t) Technical Corrections.--
          (1) Section 1119(a)(2) of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3348(a)(2)) is amended by striking ``council,'' 
        and inserting ``Council,''.
          (2) Section 1121(6) of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3350(6)) is amended by striking 
        ``Corporations,'' and inserting ``Corporation,''.
          (3) Section 1121(8) of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3350(8)) is amended by striking ``council'' and 
        inserting ``Council''.
          (4) Section 1122 of the Financial Institutions 
        Reform, Recovery, and Enforcement Act of 1989 (12 
        U.S.C. 3351) is amended--
                  (A) in subsection (a)(1) by moving the left 
                margin of subparagraphs (A), (B), and (C) 2 ems 
                to the right; and
                  (B) in subsection (c)--
                          (i) by striking ``Federal Financial 
                        Institutions Examination Council'' and 
                        inserting ``Financial Institutions 
                        Examination Council''; and
                          (ii) by striking ``the council's 
                        functions'' and inserting ``the 
                        Council's functions''.

SEC. 9504. STUDY REQUIRED ON IMPROVEMENTS IN APPRAISAL PROCESS AND 
                    COMPLIANCE PROGRAMS.

  (a) Study.--The Comptroller General shall conduct a 
comprehensive study on possible improvements in the appraisal 
process generally, and specifically on the consistency in and 
the effectiveness of, and possible improvements in, State 
compliance efforts and programs in accordance with title XI of 
the Financial Institutions Reform, Recovery, and Enforcement 
Act of 1989. In addition, this study shall examine the existing 
exemptions to the use of certified appraisers issued by Federal 
financial institutions regulatory agencies. The study shall 
also review the threshold level established by Federal 
regulators for compliance under title XI and whether there is a 
need to revise them to reflect the addition of consumer 
protection to the purposes and functions of the Appraisal 
Subcommittee. The study shall additionally examine the quality 
of different types of mortgage collateral valuations produced 
by broker price opinions, automated valuation models, licensed 
appraisals, and certified appraisals, among others, and the 
quality of appraisals provided through different distribution 
channels, including appraisal management companies, independent 
appraisal operations within a mortgage originator, and fee-for-
service appraisals. The study shall also include an analysis 
and statistical breakdown of enforcement actions taken during 
the last 10 years against different types of appraisers, 
including certified, licensed, supervisory, and trainee 
appraisers. Furthermore, the study shall examine the benefits 
and costs, as well as the advantages and disadvantages, of 
establishing a national repository to collect data related to 
real estate property collateral valuations performed in the 
United States.
  (b) Report.--Before the end of the 18-month period beginning 
on the date of the enactment of this Act, the Comptroller 
General shall submit a report on the study under subsection (a) 
to the Committee on Financial Services of the House of 
Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate, together with such recommendations 
for administrative or legislative action, at the Federal or 
State level, as the Comptroller General may determine to be 
appropriate.
  (c) Additional Study Required.--The Comptroller General shall 
conduct an additional study to determine the effects that the 
changes to the seller-guide appraisal requirements of Fannie 
Mae and Freddie Mac contained in the Home Valuation Code of 
Conduct have on small business, like mortgage brokers and 
independent appraisers, and consumers, including the effect on 
the--
          (1) quality and costs of appraisals;
          (2) length of time for obtaining appraisals;
          (3) impact on consumer protection, especially 
        regarding maintaining appraisal independence, abating 
        appraisal inflation, and mitigating acts of appraisal 
        fraud;
          (4) structure of the appraisal industry, especially 
        regarding appraisal management companies, fee-for-
        service appraisers, and the regulation of appraisal 
        management companies by the states; and
          (5) impact on mortgage brokers and other small 
        business professionals in the financial services 
        industry.
  (d) Additional Report.--Before the end of the 6-month period 
beginning on the date of the enactment of this Act, the 
Comptroller General shall submit an additional report to the 
Committee on Financial Services of the House of Representatives 
and the Committee on Banking, Housing, and Urban Affairs of the 
Senate containing the findings and conclusions of the 
Comptroller General with respect to the study conducted 
pursuant to subsection (c). Such additional report shall take 
into consideration the Small Business Administration's views on 
how small businesses are affected by the Home Valuation Code of 
Conduct.

SEC. 9505. EQUAL CREDIT OPPORTUNITY ACT AMENDMENT.

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

SEC. 9506. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974 AMENDMENT 
                    RELATING TO CERTAIN APPRAISAL FEES.

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

 Subtitle G--Sense of Congress Regarding the Importance of Government 
                      Sponsored Enterprises Reform

SEC. 9601. SENSE OF CONGRESS REGARDING THE IMPORTANCE OF GOVERNMENT-
                    SPONSORED ENTERPRISES REFORM TO ENHANCE THE 
                    PROTECTION, LIMITATION, AND REGULATION OF THE TERMS 
                    OF RESIDENTIAL MORTGAGE CREDIT.

  (a) Findings.--The Congress finds as follows:
          (1) The Government-sponsored enterprises, Federal 
        National Mortgage Association (Fannie Mae) and the 
        Federal Home Loan Mortgage Corporation (Freddie Mac), 
        were chartered by Congress to ensure a reliable and 
        affordable supply of mortgage funding, but enjoy a dual 
        legal status as privately owned corporations with 
        Government mandated affordable housing goals.
          (2) In 1996, the Department of Housing and Urban 
        Development required that 42 percent of Fannie Mae's 
        and Freddie Mac's mortgage financing should go to 
        borrowers with income levels below the median for a 
        given area.
          (3) In 2004, the Department of Housing and Urban 
        Development revised those goals, increasing them to 56 
        percent of their overall mortgage purchases by 2008, 
        and additionally mandated that 12 percent of all 
        mortgage purchases by Fannie Mae and Freddie Mac be 
        ``special affordable'' loans made to borrowers with 
        incomes less than 60 percent of an area's median 
        income, a target that ultimately increased to 28 
        percent for 2008.
          (4) To help fulfill those mandated affordable housing 
        goals, in 1995 the Department of Housing and Urban 
        Development authorized Fannie Mae and Freddie Mac to 
        purchase subprime securities that included loans made 
        to low-income borrowers.
          (5) After this authorization to purchase subprime 
        securities, subprime and near-prime loans increased 
        from 9 percent of securitized mortgages in 2001 to 40 
        percent in 2006, while the market share of conventional 
        mortgages dropped from 78.8 percent in 2003 to 50.1 
        percent by 2007 with a corresponding increase in 
        subprime and Alt-A loans from 10.1 percent to 32.7 
        percent over the same period.
          (6) In 2004 alone, Fannie Mae and Freddie Mac 
        purchased $175,000,000,000 in subprime mortgage 
        securities, which accounted for 44 percent of the 
        market that year, and from 2005 through 2007, Fannie 
        Mae and Freddie Mac purchased approximately 
        $1,000,000,000,000 in subprime and Alt-A loans, while 
        Fannie Mae's acquisitions of mortgages with less than 
        10 percent down payments almost tripled.
          (7) According to data from the Federal Housing 
        Finance Agency (FHFA) for the fourth quarter of 2008, 
        Fannie Mae and Freddie Mac own or guarantee 75 percent 
        of all newly originated mortgages, and Fannie Mae and 
        Freddie Mac currently own 13.3 percent of outstanding 
        mortgage debt in the United States and have issued 
        mortgage-backed securities for 31.0 percent of the 
        residential debt market, a combined total of 44.3 
        percent of outstanding mortgage debt in the United 
        States.
          (8) On September 7, 2008, the FHFA placed Fannie Mae 
        and Freddie Mac into conservatorship, with the Treasury 
        Department subsequently agreeing to purchase at least 
        $200,000,000,000 of preferred stock from each 
        enterprise in exchange for warrants for the purchase of 
        79.9 percent of each enterprise's common stock.
          (9) The conservatorship for Fannie Mae and Freddie 
        Mac has potentially exposed taxpayers to upwards of 
        $5,300,000,000,000 worth of risk.
          (10) The hybrid public-private status of Fannie Mae 
        and Freddie Mac is untenable and must be resolved to 
        assure that consumers are offered and receive 
        residential mortgage loans on terms that reasonably 
        reflect their ability to repay the loans and that are 
        understandable and not unfair, deceptive, or abusive.
  (b) Sense of the Congress.--It is the sense of the Congress 
that efforts to enhance by the protection, limitation, and 
regulation of the terms of residential mortgage credit and the 
practices related to such credit would be incomplete without 
enactment of meaningful structural reforms of Fannie Mae and 
Freddie Mac.

                          Subtitle H--Reports

SEC. 9701. GAO STUDY REPORT ON GOVERNMENT EFFORTS TO COMBAT MORTGAGE 
                    FORECLOSURE RESCUE SCAMS AND LOAN MODIFICATION 
                    FRAUD.

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

              Subtitle I--Multifamily Mortgage Resolution

SEC. 9801. MULTIFAMILY MORTGAGE RESOLUTION PROGRAM.

  (a) Establishment.--The Secretary of Housing and Urban 
Development shall develop a program under this subsection to 
ensure the protection of current and future tenants and at-risk 
multifamily properties, where feasible, based on criteria that 
may include--
          (1) creating sustainable financing of such 
        properties, that may take into consideration such 
        factors as--
                  (A) the rental income generated by such 
                properties; and
                  (B) the preservation of adequate operating 
                reserves;
          (2) maintaining the level of Federal, State, and city 
        subsidies in effect as of the date of the enactment of 
        this Act;
          (3) providing funds for rehabilitation; and
          (4) facilitating the transfer of such properties, 
        when appropriate and with the agreement of owners, to 
        responsible new owners and ensuring affordability of 
        such properties.
  (b) Coordination.--The Secretary of Housing and Urban 
Development may, in carrying out the program developed under 
this section, coordinate with the Secretary of the Treasury, 
the Federal Deposit Insurance Corporation, the Board of 
Governors of the Federal Reserve System, the Federal Housing 
Finance Agency, and any other Federal Government agency that 
the Secretary considers appropriate..
  (c) Definition.--For purposes of this section, the term 
``multifamily properties'' means a residential structure that 
consists of 5 or more dwelling units.

    Subtitle J--Study of Effect of Drywall Presence on Foreclosures

SEC. 9901. STUDY OF EFFECT OF DRYWALL PRESENCE ON FORECLOSURES.

  (a) Study.--The Secretary of Housing and Urban Development, 
in consultation with the Secretary of the Treasury, shall 
conduct a study of the effect on residential mortgage loan 
foreclosures of--
          (1) the presence in residential structures subject to 
        such mortgage loans of drywall that was imported from 
        China during the period beginning with 2004 and ending 
        at the end of 2007; and
          (2) the availability of property insurance for 
        residential structures in which such drywall is 
        present.
  (b) Report.--Not later than the expiration of the 120-day 
period beginning on the date of the enactment of this Act, the 
Secretary of Housing and Urban Development shall submit to the 
Congress a report on the study conducted under subsection (a) 
containing its findings, conclusions, and recommendations.

  Insert at the end of the table of contents the following:

        TITLE VII--MORTGAGE REFORM AND ANTI-PREDATORY LENDING ACT

Sec. 9000. Short title; designation as enumerated consumer law.

       Subtitle A--Residential Mortgage Loan Origination Standards

Sec. 9001. Definitions.
Sec. 9002. Residential mortgage loan origination.
Sec. 9003. Prohibition on steering incentives.
Sec. 9004. Liability.
Sec. 9005. Regulations.
Sec. 9006. Study of shared appreciation mortgages.

               Subtitle B--Minimum Standards for Mortgages

Sec. 9101. Ability to repay.
Sec. 9102. Net tangible benefit for refinancing of residential mortgage 
          loans.
Sec. 9103. Safe harbor and rebuttable presumption.
Sec. 9104. Liability.
Sec. 9105. Defense to foreclosure.
Sec. 9106. Additional standards and requirements.
Sec. 9107. Rule of construction.
Sec. 9108. Effect on State laws.
Sec. 9109. Regulations.
Sec. 9110. Amendments to civil liability provisions.
Sec. 9111. Lender rights in the context of borrower deception.
Sec. 9112. Six-month notice required before reset of hybrid adjustable 
          rate mortgages.
Sec. 9113. Required disclosures.
Sec. 9114. Disclosures required in monthly statements for residential 
          mortgage loans.
Sec. 9115. Legal assistance for foreclosure-related issues.
Sec. 9116. Effective date.
Sec. 9117. Report by the GAO.
Sec. 9118. State Attorney General enforcement authority.

                     Subtitle C--High-Cost Mortgages

Sec. 9201. Definitions relating to high-cost mortgages.
Sec. 9202. Amendments to existing requirements for certain mortgages.
Sec. 9203. Additional requirements for certain mortgages.
Sec. 9204. Regulations.
Sec. 9205. Effective date.

                Subtitle D--Office of Housing Counseling

Sec. 9301. Short title.
Sec. 9302. Establishment of Office of Housing Counseling.
Sec. 9303. Counseling procedures.
Sec. 9304. Grants for housing counseling assistance.
Sec. 9305. Requirements to use HUD-certified counselors under HUD 
          programs.
Sec. 9306. Study of defaults and foreclosures.
Sec. 9307. Default and foreclosure database.
Sec. 9308. Definitions for counseling-related programs.
Sec. 9309. Accountability and transparency for grant recipients.
Sec. 9310. Updating and simplification of mortgage information booklet.
Sec. 9311. Home inspection counseling.
Sec. 9312. Warnings to homeowners of foreclosure rescue scams.

                     Subtitle E--Mortgage Servicing

Sec. 9401. Escrow and impound accounts relating to certain consumer 
          credit transactions.
Sec. 9402. Disclosure notice required for consumers who waive escrow 
          services.
Sec. 9403. Real Estate Settlement Procedures Act of 1974 amendments.
Sec. 9404. Truth in Lending Act amendments.
Sec. 9405. Escrows included in repayment analysis.

                    Subtitle F--Appraisal Activities

Sec. 9501. Property appraisal requirements.
Sec. 9502. Unfair and deceptive practices and acts relating to certain 
          consumer credit transactions.
Sec. 9503. Amendments relating to Appraisal Subcommittee of FIEC, 
          Appraiser Independence Monitoring, Approved Appraiser 
          Education, Appraisal Management Companies, Appraiser Complaint 
          Hotline, Automated Valuation Models, and Broker Price 
          Opinions.
Sec. 9504. Study required on improvements in appraisal process and 
          compliance programs.
Sec. 9505. Equal Credit Opportunity Act amendment.
Sec. 9506. Real Estate Settlement Procedures Act of 1974 amendment 
          relating to certain appraisal fees.

  Subtitle G--Sense of Congress Regarding the Importance of Government 
                      Sponsored Enterprises Reform

Sec. 9601. Sense of Congress regarding the importance of Government-
          sponsored enterprises reform to enhance the protection, 
          limitation, and regulation of the terms of residential 
          mortgage credit.

                           Subtitle H--Reports

Sec. 9701. GAO study report on government efforts to combat mortgage 
          foreclosure rescue scams and loan modification fraud.

               Subtitle I--Multifamily Mortgage Resolution

Sec. 9801. Multifamily mortgage resolution program.

     Subtitle J--Study of Effect of Drywall Presence on Foreclosures

Sec. 9901. Study of effect of drywall presence on foreclosures.
    Add at the end of title I the following new section:

SEC. _. REDUCING TARP FUNDS TO OFFSET COSTS.

    Section 115(a)(3) of the Emergency Economic Stabilization 
Act of 2008 (12 U.S.C. 5225(a)(3)) is amended by striking 
``$700,000,000,000, as such amount is reduced by 
$1,259,000,000,, as such amount is reduced by $1,244,000,000, 
outstanding at any one time'' and inserting ``$700,000,000,000, 
as such amount is reduced by $22,059,000,000, outstanding at 
any one time''.

                                  
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