I 

111TH CONGRESS 

1ST SESSION H. R. 47 

To establish an Office of Housing Counseling to carry out and coordinate 

the responsibilities of the Department of Housing and Urban Development regarding counseling on homeownership and rental housing issues, 

to make grants to entities for providing such counseling, to launch 

a national housing counseling advertising campaign, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 6, 2009 

Mrs. BIGGERT (for herself, Mr. HINOJOSA, and Mrs. CAPITO) introduced the 

following bill; which was referred to the Committee on Financial Services 

A BILL 

To establish an Office of Housing Counseling to carry out 

and coordinate the responsibilities of the Department 

of Housing and Urban Development regarding counseling 

on homeownership and rental housing issues, to make 

grants to entities for providing such counseling, to launch 

a national housing counseling advertising campaign, and 

for other purposes. 

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


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Expand and Preserve 

3 Home Ownership Through Counseling Act’’. 

4 SEC. 2. ESTABLISHMENT OF OFFICE OF HOUSING COUN5 SELING. 

6 Section 4 of the Department of Housing and Urban 

7 Development Act (42 U.S.C. 3533) is amended by adding 

8 at the end the following new subsection: 

9 ‘‘(g) OFFICE OF HOUSING COUNSELING.— 

10 ‘‘(1) ESTABLISHMENT.—There is established, 

11 in the Office of the Secretary, the Office of Housing 

12 Counseling. 

13 ‘‘(2) DIRECTOR.—There is established the posi14 tion of Director of Housing Counseling. The Direc15 tor shall be the head of the Office of Housing Coun16 seling and shall be appointed by the Secretary. Such 

17 position shall be a career-reserved position in the 

18 Senior Executive Service. 

19 ‘‘(3) FUNCTIONS.— 

20 ‘‘(A) IN GENERAL.—The Director shall 

21 have ultimate responsibility within the Depart22 ment, except for the Secretary, for all activities 

23 and matters relating to homeownership coun24 seling and rental housing counseling, includ25 ing— 


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1 ‘‘(i) research, grant administration, 

2 public outreach, and policy development re3 lating to such counseling; and 

4 ‘‘(ii) establishment, coordination, and 

5 administration of all regulations, require6 ments, standards, and performance meas7 ures under programs and laws adminis8 tered by the Department that relate to 

9 housing counseling, homeownership coun10 seling (including maintenance of homes), 

11 mortgage-related counseling (including 

12 home equity conversion mortgages and 

13 credit protection options to avoid fore14 closure), and rental housing counseling, in15 cluding the requirements, standards, and 

16 performance measures relating to housing 

17 counseling. 

18 ‘‘(B) SPECIFIC FUNCTIONS.—The Director 

19 shall carry out the functions assigned to the Di20 rector and the Office under this section and any 

21 other provisions of law. Such functions shall in22 clude establishing rules necessary for— 

23 ‘‘(i) the counseling procedures under 

24 section 106(g)(1) of the Housing and 


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1 Urban Development Act of 1968 (12 

2 U.S.C. 1701x(h)(1)); 

3 ‘‘(ii) carrying out all other functions 

4 of the Secretary under section 106(g) of 

5 the Housing and Urban Development Act 

6 of 1968, including the establishment, oper7 ation, and publication of the availability of 

8 the toll-free telephone number under para9 graph (2) of such section; 

10 ‘‘(iii) carrying out section 5 of the 

11 Real Estate Settlement Procedures Act of 

12 1974 (12 U.S.C. 2604) for home buying 

13 information booklets prepared pursuant to 

14 such section; 

15 ‘‘(iv) carrying out the certification 

16 program under section 106(e) of the Hous17 ing and Urban Development Act of 1968 

18 (12 U.S.C. 1701x(e)); 

19 ‘‘(v) carrying out the assistance pro20 gram under section 106(a)(4) of the Hous21 ing and Urban Development Act of 1968, 

22 including criteria for selection of applica23 tions to receive assistance; 

24 ‘‘(vi) carrying out any functions re25 garding abusive, deceptive, or unscrupulous 


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1 lending practices relating to residential 

2 mortgage loans that the Secretary con3 siders appropriate, which shall include con4 ducting the study under section 6 of the 

5 Expand and Preserve Home Ownership 

6 Through Counseling Act; 

7 ‘‘(vii) providing for operation of the 

8 advisory committee established under para9 graph (4) of this subsection; 

10 ‘‘(viii) collaborating with community11 based organizations with expertise in the 

12 field of housing counseling; and 

13 ‘‘(ix) providing for the building of ca14 pacity to provide housing counseling serv15 ices in areas that lack sufficient services. 

16 ‘‘(4) ADVISORY COMMITTEE.— 

17 ‘‘(A) IN GENERAL.—The Secretary shall 

18 appoint an advisory committee to provide advice 

19 regarding the carrying out of the functions of 

20 the Director. 

21 ‘‘(B) MEMBERS.—Such advisory committee 

22 shall consist of not more than 12 individuals, 

23 and the membership of the committee shall 

24 equally represent all aspects of the mortgage 

25 and real estate industry, including consumers. 


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1 ‘‘(C) TERMS.—Except as provided in sub2 paragraph (D), each member of the advisory 

3 committee shall be appointed for a term of 3 

4 years. Members may be reappointed at the dis5 cretion of the Secretary. 

6 ‘‘(D) TERMS OF INITIAL APPOINTEES.—As 

7 designated by the Secretary at the time of ap8 pointment, of the members first appointed to 

9 the advisory committee, 4 shall be appointed for 

10 a term of 1 year and 4 shall be appointed for 

11 a term of 2 years. 

12 ‘‘(E) PROHIBITION OF PAY; TRAVEL EX13 PENSES.—Members of the advisory committee 

14 shall serve without pay, but shall receive travel 

15 expenses, including per diem in lieu of subsist16 ence, in accordance with applicable provisions 

17 under subchapter I of chapter 57 of title 5, 

18 United States Code. 

19 ‘‘(F) ADVISORY ROLE ONLY.—The advi20 sory committee shall have no role in reviewing 

21 or awarding housing counseling grants. 

22 ‘‘(5) SCOPE OF HOMEOWNERSHIP COUN23 SELING.—In carrying out the responsibilities of the 

24 Director, the Director shall ensure that homeowner25 ship counseling provided by, in connection with, or 


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1 pursuant to any function, activity, or program of the 

2 Department addresses the entire process of home3 ownership, including the decision to purchase a 

4 home, the selection and purchase of a home, issues 

5 arising during or affecting the period of ownership 

6 of a home (including refinancing, default and fore7 closure, and other financial decisions), and the sale 

8 or other disposition of a home.’’. 

9 SEC. 3. COUNSELING PROCEDURES. 

10 (a) IN GENERAL.—Section 106 of the Housing and 

11 Urban Development Act of 1968 (12 U.S.C. 1701x) is 

12 amended by adding at the end the following new sub13 section: 

14 ‘‘(g) PROCEDURES AND ACTIVITIES.— 

15 ‘‘(1) COUNSELING PROCEDURES.— 

16 ‘‘(A) IN GENERAL.—The Secretary shall 

17 establish, coordinate, and monitor the adminis18 tration by the Department of Housing and 

19 Urban Development of the counseling proce20 dures for homeownership counseling and rental 

21 housing counseling provided in connection with 

22 any program of the Department, including all 

23 requirements, standards, and performance 

24 measures that relate to homeownership and 

25 rental housing counseling. 


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1 ‘‘(B) HOMEOWNERSHIP COUNSELING.— 

2 For purposes of this subsection and as used in 

3 the provisions referred to in this subparagraph, 

4 the term ‘homeownership counseling’ means 

5 counseling related to homeownership and resi6 dential mortgage loans. Such term includes 

7 counseling related to homeownership and resi8 dential mortgage loans that is provided pursu9 ant to— 

10 ‘‘(i) section 105(a)(20) of the Housing 

11 and Community Development Act of 1974 

12 (42 U.S.C. 5305(a)(20)); 

13 ‘‘(ii) in the United States Housing 

14 Act of 1937— 

15 ‘‘(I) section 9(e) (42 U.S.C. 

16 1437g(e)); 

17 ‘‘(II) section 8(y)(1)(D) (42 

18 U.S.C. 1437f(y)(1)(D)); 

19 ‘‘(III) section 18(a)(4)(D) (42 

20 U.S.C. 1437p(a)(4)(D)); 

21 ‘‘(IV) section 23(c)(4) (42 U.S.C. 

22 1437u(c)(4)); 

23 ‘‘(V) section 32(e)(4) (42 U.S.C. 

24 1437z–4(e)(4)); 


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1 ‘‘(VI) section 33(d)(2)(B) (42 

2 U.S.C. 1437z–5(d)(2)(B)); 

3 ‘‘(VII) sections 302(b)(6) and 

4 303(b)(7) (42 U.S.C. 1437aaa– 

5 1(b)(6), 1437aaa–2(b)(7)); and 

6 ‘‘(VIII) section 304(c)(4) (42 

7 U.S.C. 1437aaa–3(c)(4)); 

8 ‘‘(iii) section 302(a)(4) of the Amer9 ican Homeownership and Economic Oppor10 tunity Act of 2000 (42 U.S.C. 1437f note); 

11 ‘‘(iv) sections 233(b)(2) and 258(b) of 

12 the Cranston-Gonzalez National Affordable 

13 Housing Act (42 U.S.C. 12773(b)(2), 

14 12808(b)); 

15 ‘‘(v) this section and section 101(e) of 

16 the Housing and Urban Development Act 

17 of 1968 (12 U.S.C. 1701x, 1701w(e)); 

18 ‘‘(vi) section 220(d)(2)(G) of the Low19 Income Housing Preservation and Resident 

20 Homeownership Act of 1990 (12 U.S.C. 

21 4110(d)(2)(G)); 

22 ‘‘(vii) sections 422(b)(6), 423(b)(7), 

23 424(c)(4), 442(b)(6), and 443(b)(6) of the 

24 Cranston-Gonzalez National Affordable 

25 Housing Act (42 U.S.C. 12872(b)(6), 


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1 12873(b)(7), 12874(c)(4), 12892(b)(6), 

2 and 12893(b)(6)); 

3 ‘‘(viii) section 491(b)(1)(F)(iii) of the 

4 McKinney-Vento Homeless Assistance Act 

5 (42 U.S.C. 11408(b)(1)(F)(iii)); 

6 ‘‘(ix) sections 202(3) and 

7 810(b)(2)(A) of the Native American 

8 Housing and Self-Determination Act of 

9 1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); 

10 ‘‘(x) in the National Housing Act— 

11 ‘‘(I) in section 203 (12 U.S.C. 

12 1709), the penultimate undesignated 

13 paragraph of paragraph (2) of sub14 section (b), subsection (c)(2)(A), and 

15 subsection (r)(4); 

16 ‘‘(II) subsections (a) and (c)(3) 

17 of section 237 (12 U.S.C. 1715z–2); 

18 and 

19 ‘‘(III) subsections (d)(2)(B) and 

20 (m)(1) of section 255 (12 U.S.C. 

21 1715z–20); 

22 ‘‘(xi) section 502(h)(4)(B) of the 

23 Housing Act of 1949 (42 U.S.C. 

24 1472(h)(4)(B)); and 


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1 ‘‘(xii) section 508 of the Housing and 

2 Urban Development Act of 1970 (12 

3 U.S.C. 1701z–7). 

4 ‘‘(C) RENTAL HOUSING COUNSELING.— 

5 For purposes of this subsection, the term ‘rent6 al housing counseling’ means counseling related 

7 to rental of residential property, which may in8 clude counseling regarding future homeowner9 ship opportunities and providing referrals for 

10 renters and prospective renters to entities pro11 viding counseling and shall include counseling 

12 related to such topics that is provided pursuant 

13 to— 

14 ‘‘(i) section 105(a)(20) of the Housing 

15 and Community Development Act of 1974 

16 (42 U.S.C. 5305(a)(20)); 

17 ‘‘(ii) in the United States Housing 

18 Act of 1937— 

19 ‘‘(I) section 9(e) (42 U.S.C. 

20 1437g(e)); 

21 ‘‘(II) section 18(a)(4)(D) (42 

22 U.S.C. 1437p(a)(4)(D)); 

23 ‘‘(III) section 23(c)(4) (42 

24 U.S.C. 1437u(c)(4)); 


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1 ‘‘(IV) section 32(e)(4) (42 U.S.C. 

2 1437z–4(e)(4)); 

3 ‘‘(V) section 33(d)(2)(B) (42 

4 U.S.C. 1437z–5(d)(2)(B)); and 

5 ‘‘(VI) section 302(b)(6) (42 

6 U.S.C. 1437aaa–1(b)(6)); 

7 ‘‘(iii) section 233(b)(2) of the Cran8 ston-Gonzalez National Affordable Housing 

9 Act (42 U.S.C. 12773(b)(2)); 

10 ‘‘(iv) section 106 of the Housing and 

11 Urban Development Act of 1968 (12 

12 U.S.C. 1701x); 

13 ‘‘(v) section 422(b)(6) of the Cran14 ston-Gonzalez National Affordable Housing 

15 Act (42 U.S.C. 12872(b)(6)); 

16 ‘‘(vi) section 491(b)(1)(F)(iii) of the 

17 McKinney-Vento Homeless Assistance Act 

18 (42 U.S.C. 11408(b)(1)(F)(iii)); 

19 ‘‘(vii) sections 202(3) and 

20 810(b)(2)(A) of the Native American 

21 Housing and Self-Determination Act of 

22 1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); 

23 and 


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1 ‘‘(viii) the rental assistance program 

2 under section 8 of the United States Hous3 ing Act of 1937 (42 U.S.C. 1437f). 

4 ‘‘(2) STANDARDS FOR MATERIALS.—The Sec5 retary, in conjunction with the advisory committee 

6 established under section 4(g)(4) of the Department 

7 of Housing and Urban Development Act (42 U.S.C. 

8 3533(g)(4), shall establish standards for materials 

9 and forms to be used, as appropriate, by organiza10 tions providing homeownership counseling services, 

11 including any recipients of assistance pursuant to 

12 subsection (a)(4). 

13 ‘‘(3) MORTGAGE SOFTWARE SYSTEMS.— 

14 ‘‘(A) CERTIFICATION.—The Secretary shall 

15 provide for the certification of various computer 

16 software programs for consumers to use in eval17 uating different residential mortgage loan pro18 posals. The Secretary shall require, for such 

19 certification, that the mortgage software sys20 tems take into account— 

21 ‘‘(i) the consumer’s financial situation 

22 and the cost of maintaining a home, in23 cluding insurance, taxes, and utilities; 


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1 ‘‘(ii) the amount of time the consumer 

2 expects to remain in the home or expected 

3 time to maturity of the loan; 

4 ‘‘(iii) such other factors as the Sec5 retary considers appropriate to assist the 

6 consumer in evaluating whether to pay 

7 points, to lock in an interest rate, to select 

8 an adjustable or fixed rate loan, to select 

9 a conventional or government-insured or 

10 guaranteed loan and to make other choices 

11 during the loan application process. 

12 If the Secretary determines that available exist13 ing software is inadequate to assist consumers 

14 during the residential mortgage loan application 

15 process, the Secretary shall arrange for the de16 velopment by private sector software companies 

17 of new mortgage software systems that meet 

18 the Secretary’s specifications. 

19 ‘‘(B) USE AND INITIAL AVAILABILITY.— 

20 Such certified computer software programs 

21 shall be used to supplement, not replace, hous22 ing counseling. The Secretary shall provide that 

23 such programs are initially used only in connec24 tion with the assistance of housing counselors 

25 certified pursuant to subsection (e). 


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1 ‘‘(C) AVAILABILITY.—After a period of ini2 tial availability under subparagraph (B) as the 

3 Secretary considers appropriate, the Secretary 

4 shall take reasonable steps to make mortgage 

5 software systems certified pursuant to this 

6 paragraph widely available through the Internet 

7 and at public locations, including public librar8 ies, senior-citizen centers, public housing sites, 

9 offices of public housing agencies that admin10 ister rental housing assistance vouchers, and 

11 housing counseling centers. 

12 ‘‘(4) NATIONAL PUBLIC SERVICE MULTIMEDIA

13 CAMPAIGNS TO PROMOTE HOUSING COUNSELING.— 

14 ‘‘(A) IN GENERAL.—The Director of Hous15 ing Counseling shall develop, implement, and 

16 conduct national public service multimedia cam17 paigns designed to make persons facing mort18 gage foreclosure, persons considering a 

19 subprime mortgage loan to purchase a home, el20 derly persons, persons who face language bar21 riers, low-income persons, and other potentially 

22 vulnerable consumers aware that it is advisable, 

23 before seeking or maintaining a residential 

24 mortgage loan, to obtain homeownership coun25 seling from an unbiased and reliable sources 


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1 and that such homeownership counseling is 

2 available, including through programs spon3 sored by the Secretary of Housing and Urban 

4 Development. 

5 ‘‘(B) CONTACT INFORMATION.—Each seg6 ment of the multimedia campaign under sub7 paragraph (A) shall publicize the toll-free tele8 phone number and web site of the Department 

9 of Housing and Urban Development through 

10 which persons seeking housing counseling can 

11 locate a housing counseling agency in their 

12 State that is certified by the Secretary of Hous13 ing and Urban Development and can provide 

14 advice on buying a home, renting, defaults, 

15 foreclosures, credit issues, and reverse mort16 gages. 

17 ‘‘(C) AUTHORIZATION OF APPROPRIA18 TIONS.—There are authorized to be appro19 priated to the Secretary, not to exceed 

20 $3,000,000 for fiscal years 2009, 2010, and 

21 2011, for the development, implementation, and 

22 conducting of national public service multimedia 

23 campaigns under this paragraph. 

24 ‘‘(5) EDUCATION PROGRAMS.—The Secretary 

25 shall provide advice and technical assistance to 


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1 States, units of general local government, and non2 profit organizations regarding the establishment and 

3 operation of, including assistance with the develop4 ment of content and materials for, educational pro5 grams to inform and educate consumers, particularly 

6 those most vulnerable with respect to residential 

7 mortgage loans (such as elderly persons, persons 

8 facing language barriers, low-income persons, and 

9 other potentially vulnerable consumers), regarding 

10 home mortgages, mortgage refinancing, home equity 

11 loans, and home repair loans.’’. 

12 (b) CONFORMING AMENDMENTS TO GRANT PRO13 GRAM FOR HOMEOWNERSHIP COUNSELING ORGANIZA14 TIONS.—Section 106(c)(5)(A)(ii) of the Housing and 

15 Urban Development Act of 1968 (12 U.S.C. 

16 1701x(c)(5)(A)(ii)) is amended— 

17 (1) in subclause (III), by striking ‘‘and’’ at the 

18 end; 

19 (2) in subclause (IV) by striking the period at 

20 the end and inserting ‘‘; and’’; and 

21 (3) by inserting after subclause (IV) the fol22 lowing new subclause: 

23 ‘‘(V) notify the housing or mort24 gage applicant of the availability of 


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1 mortgage software systems provided 

2 pursuant to subsection (g)(3).’’. 

3 SEC. 4. GRANTS FOR HOUSING COUNSELING ASSISTANCE. 

4 Section 106(a) of the Housing and Urban Develop5 ment Act of 1968 (12 U.S.C. 1701x(a)(3)) is amended 

6 by adding at the end the following new paragraph: 

7 ‘‘(4) HOMEOWNERSHIP AND RENTAL COUNSELING

8 ASSISTANCE.— 

9 ‘‘(A) IN GENERAL.—The Secretary shall make 

10 financial assistance available under this paragraph 

11 to States, units of general local governments, and 

12 nonprofit organizations providing homeownership or 

13 rental counseling (as such terms are defined in sub14 section (g)(1)). 

15 ‘‘(B) QUALIFIED ENTITIES.—The Secretary 

16 shall establish standards and guidelines for eligibility 

17 of organizations (including governmental and non18 profit organizations) to receive assistance under this 

19 paragraph. 

20 ‘‘(C) DISTRIBUTION.—Assistance made avail21 able under this paragraph shall be distributed in a 

22 manner that encourages efficient and successful 

23 counseling programs. 

24 ‘‘(D) AUTHORIZATION OF APPROPRIATIONS.— 

25 There are authorized to be appropriated 


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1 $45,000,000 for each of fiscal years 2009 through 

2 2012 for— 

3 ‘‘(i) the operations of the Office of Hous4 ing Counseling of the Department of Housing 

5 and Urban Development; 

6 ‘‘(ii) the responsibilities of the Secretary 

7 under paragraphs (2) through (5) of subsection 

8 (g); and 

9 ‘‘(iii) assistance pursuant to this para10 graph for entities providing homeownership and 

11 rental counseling.’’. 

12 SEC. 5. REQUIREMENTS TO USE HUD-CERTIFIED COUN13 SELORS UNDER HUD PROGRAMS. 

14 Section 106(e) of the Housing and Urban Develop15 ment Act of 1968 (12 U.S.C. 1701x(e)) is amended— 

16 (1) by striking paragraph (1) and inserting the 

17 following new paragraph: 

18 ‘‘(1) REQUIREMENT FOR ASSISTANCE.—An or19 ganization may not receive assistance for counseling 

20 activities under subsection (a)(1)(iii), (a)(2), (a)(4), 

21 (c), or (d) of this section, or under section 101(e), 

22 unless the organization, or the individuals through 

23 which the organization provides such counseling, has 

24 been certified by the Secretary under this subsection 

25 as competent to provide such counseling.’’; 


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1 (2) in paragraph (2)— 

2 (A) by inserting ‘‘and for certifying organi3 zations’’ before the period at the end of the 

4 first sentence; and 

5 (B) in the second sentence by striking ‘‘for 

6 certification’’ and inserting ‘‘, for certification 

7 of an organization, that each individual through 

8 which the organization provides counseling shall 

9 demonstrate, and, for certification of an indi10 vidual,’’; 

11 (3) in paragraph (3), by inserting ‘‘organiza12 tions and’’ before ‘‘individuals’’; 

13 (4) by redesignating paragraph (3) as para14 graph (5); and 

15 (5) by inserting after paragraph (2) the fol16 lowing new paragraphs: 

17 ‘‘(3) REQUIREMENT UNDER HUD PROGRAMS.— 

18 Any homeownership counseling or rental housing 

19 counseling (as such terms are defined in subsection 

20 (g)(1)) required under, or provided in connection 

21 with, any program administered by the Department 

22 of Housing and Urban Development shall be pro23 vided only by organizations or counselors certified by 

24 the Secretary under this subsection as competent to 

25 provide such counseling. 


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1 ‘‘(4) OUTREACH.—The Secretary shall take 

2 such actions as the Secretary considers appropriate 

3 to ensure that individuals and organizations pro4 viding homeownership or rental housing counseling 

5 are aware of the certification requirements and 

6 standards of this subsection and of the training and 

7 certification programs under subsection (f).’’. 

8 SEC. 6. STUDY OF DEFAULTS AND FORECLOSURES. 

9 The Secretary of Housing and Urban Development 

10 shall conduct an extensive study of the root causes of de11 fault and foreclosure of home loans, using as much empir12 ical data as are available. The study shall also examine 

13 the role of escrow accounts in helping prime and nonprime 

14 borrowers to avoid defaults and foreclosures. Not later 

15 than 12 months after the date of the enactment of this 

16 Act, the Secretary shall submit to the Congress a prelimi17 nary report regarding the study. Not later than 24 months 

18 after such date of enactment, the Secretary shall submit 

19 a final report regarding the results of the study, which 

20 shall include any recommended legislation relating to the 

21 study, and recommendations for best practices and for a 

22 process to identify populations that need counseling the 

23 most. 


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1 SEC. 7. DEFINITIONS FOR COUNSELING-RELATED PRO2 GRAMS. 

3 Section 106 of the Housing and Urban Development 

4 Act of 1968 (12 U.S.C. 1701x), as amended by the pre5 ceding provisions of this Act, is further amended by add6 ing at the end the following new subsection: 

7 ‘‘(h) DEFINITIONS.—For purposes of this section: 

8 ‘‘(1) NONPROFIT ORGANIZATION.—The term 

9 ‘nonprofit organization’ has the meaning given such 

10 term in section 104(5) of the Cranston-Gonzalez Na11 tional Affordable Housing Act (42 U.S.C. 

12 12704(5)), except that subparagraph (D) of such 

13 section shall not apply for purposes of this section. 

14 ‘‘(2) STATE.—The term ‘State’ means each of 

15 the several States, the Commonwealth of Puerto 

16 Rico, the District of Columbia, the Commonwealth 

17 of the Northern Mariana Islands, Guam, the Virgin 

18 Islands, American Samoa, the Trust Territories of 

19 the Pacific, or any other possession of the United 

20 States. 

21 ‘‘(3) UNIT OF GENERAL LOCAL GOVERN22 MENT.—The term ‘unit of general local government’ 

23 means any city, county, parish, town, township, bor24 ough, village, or other general purpose political sub25 division of a State.’’. 


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1 SEC. 8. UPDATING AND SIMPLIFICATION OF MORTGAGE IN2 FORMATION BOOKLET. 

3 Section 5 of the Real Estate Settlement Procedures 

4 Act of 1974 (12 U.S.C. 2604) is amended— 

5 (1) in the section heading, by striking ‘‘SPE6 CIAL’’ and inserting ‘‘HOME BUYING’’; 

7 (2) by striking subsections (a) and (b) and in8 serting the following new subsections: 

9 ‘‘(a) PREPARATION AND DISTRIBUTION.—The Sec10 retary shall prepare, at least once every 5 years, a booklet 

11 to help consumers applying for federally related mortgage 

12 loans to understand the nature and costs of real estate 

13 settlement services. The Secretary shall prepare the book14 let in various languages and cultural styles, as the Sec15 retary determines to be appropriate, so that the booklet 

16 is understandable and accessible to homebuyers of dif17 ferent ethnic and cultural backgrounds. The Secretary 

18 shall distribute such booklets to all lenders that make fed19 erally related mortgage loans. The Secretary shall also dis20 tribute to such lenders lists, organized by location, of 

21 homeownership counselors certified under section 106(e) 

22 of the Housing and Urban Development Act of 1968 (12 

23 U.S.C. 1701x(e)) for use in complying with the require24 ment under subsection (c) of this section. 

25 ‘‘(b) CONTENTS.—Each booklet shall be in such form 

26 and detail as the Secretary shall prescribe and, in addition 


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1 to such other information as the Secretary may provide, 

2 shall include in plain and understandable language the fol3 lowing information: 

4 ‘‘(1) A description and explanation of the na5 ture and purpose of the costs incident to a real es6 tate settlement or a federally related mortgage loan. 

7 The description and explanation shall provide gen8 eral information about the mortgage process as well 

9 as specific information concerning, at a minimum— 

10 ‘‘(A) balloon payments; 

11 ‘‘(B) prepayment penalties; and 

12 ‘‘(C) the trade-off between closing costs 

13 and the interest rate over the life of the loan. 

14 ‘‘(2) An explanation and sample of the uniform 

15 settlement statement required by section 4. 

16 ‘‘(3) A list and explanation of lending practices, 

17 including those prohibited by the Truth in Lending 

18 Act or other applicable Federal law, and of other un19 fair practices and unreasonable or unnecessary 

20 charges to be avoided by the prospective buyer with 

21 respect to a real estate settlement. 

22 ‘‘(4) A list and explanation of questions a con23 sumer obtaining a federally related mortgage loan 

24 should ask regarding the loan, including whether the 

25 consumer will have the ability to repay the loan, 


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1 whether the consumer sufficiently shopped for the 

2 loan, whether the loan terms include prepayment 

3 penalties or balloon payments, and whether the loan 

4 will benefit the borrower. 

5 ‘‘(5) An explanation of the right of rescission as 

6 to certain transactions provided by sections 125 and 

7 129 of the Truth in Lending Act. 

8 ‘‘(6) A brief explanation of the nature of a vari9 able rate mortgage and a reference to the booklet 

10 entitled ‘Consumer Handbook on Adjustable Rate 

11 Mortgages’, published by the Board of Governors of 

12 the Federal Reserve System pursuant to section 

13 226.19(b)(1) of title 12, Code of Federal Regula14 tions, or to any suitable substitute of such booklet 

15 that such Board of Governors may subsequently 

16 adopt pursuant to such section. 

17 ‘‘(7) A brief explanation of the nature of a 

18 home equity line of credit and a reference to the 

19 pamphlet required to be provided under section 

20 127A of the Truth in Lending Act. 

21 ‘‘(8) Information about homeownership coun22 seling services made available pursuant to section 

23 106(a)(4) of the Housing and Urban Development 

24 Act of 1968 (12 U.S.C. 1701x(a)(4)), a rec25 ommendation that the consumer use such services, 


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•HR 47 IH

1 and notification that a list of certified providers of 

2 homeownership counseling in the area, and their 

3 contact information, is available. 

4 ‘‘(9) An explanation of the nature and purpose 

5 of escrow accounts when used in connection with 

6 loans secured by residential real estate and the re7 quirements under section 10 of this Act regarding 

8 such accounts. 

9 ‘‘(10) An explanation of the choices available to 

10 buyers of residential real estate in selecting persons 

11 to provide necessary services incidental to a real es12 tate settlement. 

13 ‘‘(11) An explanation of a consumer’s respon14 sibilities, liabilities, and obligations in a mortgage 

15 transaction. 

16 ‘‘(12) An explanation of the nature and purpose 

17 of real estate appraisals, including the difference be18 tween an appraisal and a home inspection. 

19 ‘‘(13) Notice that the Office of Housing of the 

20 Department of Housing and Urban Development has 

21 made publicly available a brochure regarding loan 

22 fraud and a World Wide Web address and toll-free 

23 telephone number for obtaining the brochure. 

24 The booklet prepared pursuant to this section shall take 

25 into consideration differences in real estate settlement proVerDate Nov 24 2008 04:58 Jan 08, 2009 Jkt 079200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\H47.IH H47

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27 

•HR 47 IH

1 cedures that may exist among the several States and terri2 tories of the United States and among separate political 

3 subdivisions within the same State and territory.’’; 

4 (3) in subsection (c), by inserting at the end 

5 the following new sentence: ‘‘Each lender shall also 

6 include with the booklet a reasonably complete or 

7 updated list of homeownership counselors who are 

8 certified pursuant to section 106(e) of the Housing 

9 and Urban Development Act of 1968 (12 U.S.C. 

10 1701x(e)) and located in the area of the lender.’’; 

11 and 

12 (4) in subsection (d), by inserting after the pe13 riod at the end of the first sentence the following: 

14 ‘‘The lender shall provide the HUD-issued booklet in 

15 the version that is most appropriate for the person 

16 receiving it.’’. 

Æ 


wwoods2 on PRODPC68 with BILLS