In the Senate of the United States,

November 13, 1997.

Resolved, That the bill from the House of Representatives (H.R. 607) entitled ‘‘An Act to amend the Real Estate

Settlement Procedures Act of 1974 to require notice of cancellation rights with respect to private mortgage insurance

which is required as a condition of entering into certain federally related mortgage loans and to provide for cancellation

of such insurance, and for other purposes.’’, do pass with the

following

AMENDMENTS:

Strike out all after the enacting clause and insert:

1 SECTION 1. TABLE OF CONTENTS.

2 The table of contents for this Act is as follows:

Sec. 1. Table of contents.

TITLE I—SENIOR CITIZEN HOME EQUITY PROTECTION

Sec. 101. Short title.

Subtitle A—Senior Citizen Home Equity Protection

Sec. 111. Disclosure requirements; prohibition of funding of unnecessary or excessive costs.

Sec. 112. Implementation.
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Subtitle B—Temporary Extension of Public Housing and Section 8 Rental

Assistance Provisions

Sec. 121. Public housing ceiling rents and income adjustments and preferences for

assisted housing.

Sec. 122. Public housing demolition and disposition.

Sec. 123. Public housing funding flexibility and mixed-finance developments.

Sec. 124. Minimum rents.

Sec. 125. Provisions relating to section 8 rental assistance program.

Subtitle C—Reauthorization of Federally Assisted Multifamily Rental Housing

Provisions

Sec. 131. Multifamily housing finance pilot programs.

Sec. 132. Hud disposition of multifamily housing.

Sec. 133. Multifamily mortgage auctions.

Sec. 134. Clarification of owner’s right to prepay.

Subtitle D—Reauthorization of Rural Housing Programs

Sec. 141. Housing in underserved areas program.

Sec. 142. Housing and related facilities for elderly persons and families and other

low-income persons and families.

Sec. 143. Loan guarantees for multifamily rental housing in rural areas.

Subtitle E—Reauthorization of National Flood Insurance Program

Sec. 151. Program expiration.

Sec. 152. Borrowing authority.

Sec. 153. Emergency implementation of program.

Sec. 154. Authorization of appropriations for studies.

Subtitle F—Native American Housing Assistance

Sec. 161. Subsidy layering certification.

Sec. 162. Inclusion of homebuyer selection policies and criteria.

Sec. 163. Repayment of grant amounts for violation of affordable housing requirement.

Sec. 164. United States Housing Act of 1937.

Sec. 165. Miscellaneous.

TITLE II—HOMEOWNERS PROTECTION ACT

Sec. 201. Short title.

Sec. 202. Definitions.

Sec. 203. Termination of private mortgage insurance.

Sec. 204. Disclosure requirements.

Sec. 205. Notification upon cancellation or termination.

Sec. 206. Disclosure requirements for lender paid mortgage insurance.

Sec. 207. Fees for disclosures.

Sec. 208. Civil liability.

Sec. 209. Effect on other laws and agreements.

Sec. 210. Enforcement.

Sec. 211. Construction.

Sec. 212. Effective date.
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TITLE III—ABOLISHMENT OF THE THRIFT DEPOSITOR

PROTECTION OVERSIGHT BOARD

Sec. 301. Abolishment.

1 TITLE I—SENIOR CITIZEN HOME

2 EQUITY PROTECTION

3 SEC. 101. SHORT TITLE.

4 This title may be cited as the ‘‘Senior Citizen Home

5 Equity Protection Act’’.

6 Subtitle A—Senior Citizen Home

7 Equity Protection

8 SEC. 111. DISCLOSURE REQUIREMENTS; PROHIBITION OF

9 FUNDING OF UNNECESSARY OR EXCESSIVE

10 COSTS.

11 Section 255(d) of the National Housing Act (12 U.S.C.

12 1715z–20(d)) is amended—

13 (1) in paragraph (2)—

14 (A) in subparagraph (B), by striking ‘‘and’’

15 at the end;

16 (B) by redesignating subparagraph (C) as

17 subparagraph (D); and

18 (C) by inserting after subparagraph (B) the

19 following:

20 ‘‘(C) has received full disclosure of all costs

21 to the mortgagor for obtaining the mortgage, in22 cluding any costs of estate planning, financial

23 advice, or other related services; and’’;
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1 (2) in paragraph (9)(F), by striking ‘‘and’’;

2 (3) in paragraph (10), by striking the period at

3 the end and inserting ‘‘; and’’; and

4 (4) by adding at the end the following:

5 ‘‘(11) have been made with such restrictions as

6 the Secretary determines to be appropriate to ensure

7 that the mortgagor does not fund any unnecessary or

8 excessive costs for obtaining the mortgage, including

9 any costs of estate planning, financial advice, or

10 other related services.’’.

11 SEC. 112. IMPLEMENTATION.

12 (a) NOTICE.—The Secretary of Housing and Urban

13 Development shall, by interim notice, implement the

14 amendments made by section 111 in an expeditious man15 ner, as determined by the Secretary. Such notice shall not

16 be effective after the date of the effectiveness of the final reg17 ulations issued under subsection (b).

18 (b) REGULATIONS.—The Secretary shall, not later

19 than the expiration of the 90-day period beginning on the

20 date of enactment of this Act, issue final regulations to im21 plement the amendments made by section 111. Such regula22 tions shall be issued only after notice and opportunity for

23 public comment pursuant to the provisions of section 553

24 of title 5, United States Code (notwithstanding subsections

25 (a)(2) and (b)(3)(B) of that section).
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1 Subtitle B—Temporary Extension of

2 Public Housing and Section 8

3 Rental Assistance Provisions

4 SEC. 121. PUBLIC HOUSING CEILING RENTS AND INCOME

5 ADJUSTMENTS AND PREFERENCES FOR AS6 SISTED HOUSING.

7 Section 402(f) of The Balanced Budget Downpayment

8 Act, I (42 U.S.C. 1437aa note) is amended by striking ‘‘and

9 1997’’ and inserting ‘‘, 1997, and 1998’’.

10 SEC. 122. PUBLIC HOUSING DEMOLITION AND DISPOSI11 TION.

12 Section 1002(d) of the Emergency Supplemental Ap13 propriations for Additional Disaster Assistance, for Anti14 terrorism Initiatives, for Assistance in the Recovery from

15 the Tragedy that Occurred at Oklahoma City, and Rescis16 sions Act, 1995 (42 U.S.C. 1437c note) is amended by strik17 ing ‘‘September 30, 1997’’ and inserting ‘‘September 30,

18 1998’’.

19 SEC. 123. PUBLIC HOUSING FUNDING FLEXIBILITY AND

20 MIXED-FINANCE DEVELOPMENTS.

21 (a) EXTENSION OF AUTHORITY.—Section 201(a)(2) of

22 the Departments of Veterans Affairs and Housing and

23 Urban Development, and Independent Agencies Appropria24 tions Act, 1996 (42 U.S.C. 1437l note) is amended to read

25 as follows:
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1 ‘‘(2) APPLICABILITY.—Section 14(q) of the Unit2 ed States Housing Act of 1937 shall be effective only

3 with respect to assistance provided from funds made

4 available for fiscal year 1998 or any preceding fiscal

5 year, except that the authority in the first sentence of

6 section 14(q)(1) of that Act to use up to 10 percent

7 of the allocation of certain funds for any operating

8 subsidy purpose shall not apply to amounts made

9 available for fiscal year 1998.’’.

10 (b) MIXED FINANCE.—Section 14(q)(1) of the United

11 States Housing Act of 1937 (42 U.S.C. 1437l(q)(1)) is

12 amended by inserting after the first sentence the following:

13 ‘‘Such assistance may involve the drawdown of funds on

14 a schedule commensurate with construction draws for de15 posit into an interest earning escrow account to serve as

16 collateral or credit enhancement for bonds issued by a pub17 lic agency for the construction or rehabilitation of the devel18 opment.’’.

19 SEC. 124. MINIMUM RENTS.

20 Section 402(a) of The Balanced Budget Downpayment

21 Act, I (Public Law 104–99; 110 Stat. 40) is amended in

22 the matter preceding paragraph (1) by striking ‘‘fiscal year

23 1997’’ and inserting ‘‘fiscal years 1997 and 1998’’.
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1 SEC. 125. PROVISIONS RELATING TO SECTION 8 RENTAL AS2 SISTANCE PROGRAM.

3 Section 203(d) of the Departments of Veterans Affairs

4 and Housing and Urban Development, and Independent

5 Agencies Appropriations Act, 1996 (as contained in section

6 101(e) of the Omnibus Consolidated Rescissions and Appro7 priations Act of 1996 (Public Law 104–134)) (42 U.S.C.

8 1437f note) is amended by striking ‘‘and 1997’’ and insert9 ing ‘‘, 1997, and 1998’’.

10 Subtitle C—Reauthorization of Fed11 erally Assisted Multifamily Rent12 al Housing Provisions

13 SEC. 131. MULTIFAMILY HOUSING FINANCE PILOT PRO14 GRAMS.

15 Section 542 of the Housing and Community Develop16 ment Act of 1992 (12 U.S.C. 1707 note) is amended—

17 (1) in subsection (b)(5), by inserting before the

18 period at the end of the first sentence the following:

19 ‘‘, and not more than an additional 15,000 units dur20 ing fiscal year 1998’’; and

21 (2) in the first sentence of subsection (c)(4)—

22 (A) by striking ‘‘and’’ and inserting a

23 comma; and

24 (B) by inserting before the period at the end

25 the following: ‘‘, and not more than an addi26 tional 15,000 units during fiscal year 1998’’.
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1 SEC. 132. HUD DISPOSITION OF MULTIFAMILY HOUSING.

2 Section 204 of the Departments of Veterans Affairs and

3 Housing and Urban Development, and Independent Agen4 cies Appropriations Act, 1997 (12 U.S.C. 1715z–11a) is

5 amended by inserting after ‘‘owned by the Secretary’’ the

6 following: ‘‘, including the provision of grants and loans

7 from the General Insurance Fund for the necessary costs

8 of rehabilitation or demolition,’’.

9 SEC. 133. MULTIFAMILY MORTGAGE AUCTIONS.

10 Section 221(g)(4)(C) of the National Housing Act (12

11 U.S.C. 1715l(g)(4)(C)) is amended—

12 (1) in the first sentence of clause (viii), by strik13 ing ‘‘September 30, 1996’’ and inserting ‘‘December

14 31, 2000’’; and

15 (2) by adding at the end the following:

16 ‘‘(ix) The authority of the Secretary to conduct

17 multifamily auctions under this subparagraph shall

18 be effective for any fiscal year only to the extent and

19 in such amounts as are approved in appropriations

20 Acts for the costs of loan guarantees (as defined in

21 section 502 of the Congressional Budget Act of 1974),

22 including the cost of modifying loans.’’.

23 SEC. 134. CLARIFICATION OF OWNER’S RIGHT TO PREPAY.

24 (a) PREPAYMENT RIGHT.—Notwithstanding section

25 211 of the Housing and Community Development Act of

26 1987 or section 221 of the Housing and Community Devel-
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1 opment Act of 1987 (as in effect pursuant to section 604(c)

2 of the Cranston-Gonzalez National Affordable Housing Act),

3 subject to subsection (b), with respect to any project that

4 is eligible low-income housing (as that term is defined in

5 section 229 of the Housing and Community Development

6 Act of 1987)—

7 (1) the owner of the project may prepay, and the

8 mortgagee may accept prepayment of, the mortgage

9 on the project, and

10 (2) the owner may request voluntary termination

11 of a mortgage insurance contract with respect to such

12 project and the contract may be terminated notwith13 standing any requirements under sections 229 and

14 250 of the National Housing Act.

15 (b) CONDITIONS.—Any prepayment of a mortgage or

16 termination of an insurance contract authorized under sub17 section (a) may be made—

18 (1) only to the extent that such prepayment or

19 termination is consistent with the terms and condi20 tions of the mortgage on or mortgage insurance con21 tract for the project; and

22 (2) only if owner of the project involved agrees

23 not to increase the rent charges for any dwelling unit

24 in the project during the 60-day period beginning

25 upon such prepayment or termination.
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1 (c) APPLICABILITY.—This section shall apply only

2 during the period beginning on October 1, 1997, and ending

3 at the end of September 30, 1998.

4 Subtitle D—Reauthorization of

5 Rural Housing Programs

6 SEC. 141. HOUSING IN UNDERSERVED AREAS PROGRAM.

7 The first sentence of section 509(f)(4)(A) of the Hous8 ing Act of 1949 (42 U.S.C. 1479(f)(4)(A)) is amended by

9 striking ‘‘fiscal year 1997’’ and inserting ‘‘fiscal years

10 1997, 1998, and 1999’’.

11 SEC. 142. HOUSING AND RELATED FACILITIES FOR ELDER12 LY PERSONS AND FAMILIES AND OTHER LOW13 INCOME PERSONS AND FAMILIES.

14 (a) AUTHORITY TO MAKE LOANS.—Section 515(b)(4)

15 of the Housing Act of 1949 (42 U.S.C. 1485(b)(4)) is

16 amended by striking ‘‘September 30, 1997’’ and inserting

17 ‘‘September 30, 1999’’.

18 (b) SET-ASIDE FOR NONPROFIT ENTITIES.—The first

19 sentence of section 515(w)(1) of the Housing Act of 1949

20 (42 U.S.C. 1485(w)(1)) is amended by striking ‘‘fiscal year

21 1997’’ and inserting ‘‘fiscal years 1997, 1998, and 1999’’.

22 SEC. 143. LOAN GUARANTEES FOR MULTIFAMILY RENTAL

23 HOUSING IN RURAL AREAS.

24 Section 538 of the Housing Act of 1949 (42 U.S.C.

25 1490p–2) is amended—
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1 (1) in subsection (q), by striking paragraph (2)

2 and inserting the following:

3 ‘‘(2) ANNUAL LIMITATION ON AMOUNT OF LOAN

4 GUARANTEE.—In each fiscal year, the Secretary may

5 enter into commitments to guarantee loans under this

6 section only to the extent that the costs of the guaran7 tees entered into in such fiscal year do not exceed such

8 amount as may be provided in appropriation Acts for

9 such fiscal year.’’;

10 (2) by striking subsection (t) and inserting the

11 following:

12 ‘‘(t) AUTHORIZATION OF APPROPRIATIONS.—There are

13 authorized to be appropriated for each of fiscal years 1998

14 and 1999 for costs (as such term is defined in section 502

15 of the Congressional Budget Act of 1974) of loan guarantees

16 made under this section such sums as may be necessary for

17 such fiscal year.’’; and

18 (3) in subsection (u), by striking ‘‘1996’’ and in19 serting ‘‘1999’’.

20 Subtitle E—Reauthorization of

21 National Flood Insurance Program

22 SEC. 151. PROGRAM EXPIRATION.

23 Section 1319 of the National Flood Insurance Act of

24 1968 (42 U.S.C. 4026) is amended by striking ‘‘September

25 30, 1997’’ and inserting ‘‘September 30, 1999’’.
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1 SEC. 152. BORROWING AUTHORITY.

2 Section 1309(a)(2) of the National Flood Insurance

3 Act of 1968 (42 U.S.C. 4016(a)(2)) is amended by striking

4 ‘‘September 30, 1997’’ and inserting ‘‘September 30, 1999’’.

5 SEC. 153. EMERGENCY IMPLEMENTATION OF PROGRAM.

6 Section 1336(a) of the National Flood Insurance Act

7 of 1968 (42 U.S.C. 4056(a)) is amended by striking ‘‘Sep8 tember 30, 1996’’ and inserting ‘‘September 30, 1999’’.

9 SEC. 154. AUTHORIZATION OF APPROPRIATIONS FOR STUD10 IES.

11 Subsection (c) of section 1376 of the National Flood

12 Insurance Act of 1968 (42 U.S.C. 4127(c)) is amended to

13 read as follows:

14 ‘‘(c) For studies under this title, there are authorized

15 to be appropriated such sums as may be necessary for each

16 of fiscal years 1998 and 1999, which shall remain available

17 until expended.’’.

18 Subtitle F—Native American

19 Housing Assistance

20 SEC. 161. SUBSIDY LAYERING CERTIFICATION.

21 Section 206 of the Native American Housing Assist22 ance and Self-Determination Act of 1996 (25 U.S.C. 4136)

23 is amended—

24 (1) by striking ‘‘certification by the Secretary’’

25 and inserting ‘‘certification by a recipient to the Sec26 retary’’; and
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1 (2) by striking ‘‘any housing project’’ and insert2 ing ‘‘the housing project involved’’.

3 SEC. 162. INCLUSION OF HOMEBUYER SELECTION POLICIES

4 AND CRITERIA.

5 Section 207(b) of the Native American Housing Assist6 ance and Self-Determination Act of 1996 (25 U.S.C.

7 4137(b)) is amended—

8 (1) by striking ‘‘TENANT SELECTION.—’’ and in9 serting ‘‘TENANT AND HOMEBUYER

10 SELECTION.—’’;

11 (2) in the matter preceding paragraph (1), by

12 inserting ‘‘and homebuyer’’ after ‘‘tenant’’; and

13 (3) in paragraph (3)(A), by inserting ‘‘and

14 homebuyers’’ after ‘‘tenants’’.

15 SEC. 163. REPAYMENT OF GRANT AMOUNTS FOR VIOLATION

16 OF AFFORDABLE HOUSING REQUIREMENT.

17 Section 209 of the Native American Housing Assist18 ance and Self-Determination Act of 1996 (25 U.S.C. 4139)

19 is amended by striking ‘‘section 205(2)’’ and inserting ‘‘sec20 tion 205(a)(2)’’.

21 SEC. 164. UNITED STATES HOUSING ACT OF 1937.

22 (a) IN GENERAL.—Section 501(b) of the Native Amer23 ican Housing Assistance and Self-Determination Act of

24 1996 (110 Stat. 4042) is amended—

25 (1) by striking paragraph (4); and
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1 (2) by redesignating paragraphs (5) through (11)

2 as paragraphs (4) through (10), respectively.

3 (b) UNITED STATES HOUSING ACT OF 1937.—Section

4 7 of the United States Housing Act of 1937 (42 U.S.C.

5 1437e) is amended by striking subsection (h).

6 SEC. 165. MISCELLANEOUS.

7 (a) DEFINITION OF INDIAN AREAS.—Section 4(10) of

8 the Native American Housing Assistance and Self-Deter9 mination Act of 1996 (25 U.S.C. 4103(10)) is amended to

10 read as follows:

11 ‘‘(10) INDIAN AREA.—The term ‘Indian area’

12 means the area within which an Indian tribe or a

13 tribally designated housing entity, as authorized by 1

14 or more Indian tribes, provides assistance under this

15 Act for affordable housing.’’.

16 (b) CROSS-REFERENCE.—Section 4(12)(C)(i)(II) of

17 the Native American Housing Assistance and Self-Deter18 mination Act of 1996 (25 U.S.C. 4103(12)(C)(i)(II)) is

19 amended by striking ‘‘section 107’’ and inserting ‘‘section

20 705’’.

21 (c) CLARIFICATION OF CERTAIN EXEMPTIONS.—Sec22 tion 101(c) of the Native American Housing Assistance and

23 Self-Determination Act of 1996 (25 U.S.C. 4111(c)) is

24 amended by adding at the end the following: ‘‘This sub-
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1 section applies only to rental dwelling units (other than

2 lease-purchase dwelling units) developed under—

3 ‘‘(1) the United States Housing Act of 1937 (42

4 U.S.C. 1437 et seq.); or

5 ‘‘(2) this Act.’’.

6 (d) APPLICABILITY.—Section 101(d)(1) of the Native

7 American Housing Assistance and Self-Determination Act

8 of 1996 (25 U.S.C. 4111(d)(1)) is amended by inserting be9 fore the semicolon at the end the following: ‘‘, except that

10 this paragraph only applies to rental dwelling units (other

11 than lease-purchase dwelling units) developed under the

12 United States Housing Act of 1937 (42 U.S.C. 1437 et seq.)

13 or under this Act’’.

14 (e) SUBMISSION OF INDIAN HOUSING PLAN.—Section

15 102(a) of the Native American Housing Assistance and

16 Self-Determination Act of 1996 (25 U.S.C. 4112(a)) is

17 amended—

18 (1) in paragraph (1), by inserting ‘‘(A)’’ after

19 ‘‘(1)’’;

20 (2) in paragraph (1)(A), as so designated by

21 paragraph (1) of this subsection, by adding ‘‘or’’ at

22 the end;

23 (3) by striking ‘‘(2)’’ and inserting ‘‘(B)’’; and

24 (4) by striking ‘‘(3)’’ and inserting ‘‘(2)’’.
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1 (f) CLARIFICATION.—Section 103(c)(3) of the Native

2 American Housing Assistance and Self-Determination Act

3 of 1996 (25 U.S.C. 4113(c)(3)) is amended by inserting

4 ‘‘not’’ before ‘‘prohibited’’.

5 (g) APPLICABILITY OF PROVISIONS OF CIVIL

6 RIGHTS.—Section 201(b)(5) of the Native American Hous7 ing Assistance and Self-Determination Act of 1996 (25

8 U.S.C. 4131(b)(5)) is amended—

9 (1) by striking ‘‘Indian tribes’’ and inserting

10 ‘‘federally recognized tribes and the tribally des11 ignated housing entities of those tribes’’; and

12 (2) by striking ‘‘under this subsection’’ and in13 serting ‘‘under this Act’’.

14 (h) ELIGIBILITY.—Section 205(a)(1) of the Native

15 American Housing Assistance and Self-Determination Act

16 of 1996 (25 U.S.C. 4135(a)(1)) is amended—

17 (1) in subparagraph (A), by striking ‘‘and’’ at

18 the end; and

19 (2) by striking subparagraph (B) and inserting

20 the following:

21 ‘‘(B) in the case of a contract to purchase

22 existing housing, is made available for purchase

23 only by a family that is a low-income family at

24 the time of purchase;
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1 ‘‘(C) in the case of a lease-purchase agree2 ment for existing housing or for housing to be

3 constructed, is made available for lease-purchase

4 only by a family that is a low-income family at

5 the time the agreement is entered into; and

6 ‘‘(D) in the case of a contract to purchase

7 housing to be constructed, is made available for

8 purchase only by a family that is a low-income

9 family at the time the contract is entered into;

10 and’’.

11 (i) TENANT SELECTION.—Section 207(b)(3)(B) of the

12 Native American Housing Assistance and Self-Determina13 tion Act of 1996 (25 U.S.C. 4137(b)(3)(B)) is amended by

14 striking ‘‘of any rejected applicant of the grounds for any

15 rejection’’ and inserting ‘‘to any rejected applicant of that

16 rejection and the grounds for that rejection’’.

17 (j) AVAILABILITY OF RECORDS.—Section 208 of the

18 Native American Housing Assistance and Self-Determina19 tion Act of 1996 (25 U.S.C. 4138) is amended—

20 (1) in subsection (a), by striking ‘‘paragraph

21 (2)’’ and inserting ‘‘subsection (b)’’; and

22 (2) in subsection (b), by striking ‘‘paragraph

23 (1)’’ and inserting ‘‘subsection (a)’’.

24 (k) IHP REQUIREMENT.—Section 184(b)(2) of the

25 Housing and Community Development Act of 1992 (12
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1 U.S.C. 1715z–13a(b)(2)) is amended by striking ‘‘that is

2 under the jurisdiction of an Indian tribe’’ and all that fol3 lows before the period at the end.

4 (l) AUTHORIZATION OF APPROPRIATIONS.—Section

5 184(i)(5)(C) of the Housing and Community Development

6 Act of 1992 (12 U.S.C. 1715z–13a(i)(5)(C)) is amended by

7 striking ‘‘note’’ and inserting ‘‘not’’.

8 (m) ENVIRONMENTAL REVIEW UNDER THE INDIAN

9 HOUSING LOAN GUARANTEE PROGRAM.—Section 184 of the

10 Housing and Community Development Act of 1992 (12

11 U.S.C. 1715z–13a) is amended—

12 (1) by redesignating subsection (k) as subsection

13 (l); and

14 (2) by inserting after subsection (j) the following:

15 ‘‘(k) ENVIRONMENTAL REVIEW.—For purposes of envi16 ronmental, review, decisionmaking, and action under the

17 National Environmental Policy Act of 1969 (42 U.S.C.

18 4321 et seq.) and any other law that furthers the purposes

19 of that Act, a loan guarantee under this section shall—

20 ‘‘(1) be treated as a grant under the Native

21 American Housing Assistance and Self-Determination

22 Act of 1996 (25 U.S.C. 4101 et seq.); and

23 ‘‘(2) be subject to the regulations promulgated by

24 the Secretary to carry out section 105 of the Native
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1 American Housing Assistance and Self-Determination

2 Act of 1996 (25 U.S.C. 4115).’’.

3 (n) PUBLIC AVAILABILITY OF INFORMATION.—

4 (1) IN GENERAL.—Title IV of the Native Amer5 ican Housing Assistance and Self-Determination Act

6 of 1996 (25 U.S.C. 4161 et seq.) is amended by add7 ing at the end the following:

8 ‘‘SEC. 408. PUBLIC AVAILABILITY OF INFORMATION.

9 ‘‘Each recipient shall make any housing plan, policy,

10 or annual report prepared by the recipient available to the

11 general public.’’.

12 (2) TABLE OF CONTENTS.—Section 1(b) of the

13 Native American Housing Assistance and Self-Deter14 mination Act of 1996 (25 U.S.C. 4101 note) is

15 amended in the table of contents by inserting after the

16 item relating to section 407 the following:

‘‘Sec. 408. Public availability of information.’’.

17 (o) NON-FEDERAL FUNDS.—Section 520(l)(5)(B) of

18 the Cranston-Gonzalez National Affordable Housing Act (42

19 U.S.C. 11903a(l)(5)(B)) is amended by striking ‘‘and In20 dian housing authorities’’ and inserting ‘‘and units of gen21 eral local government’’.

22 (p) INELIGIBILITY OF INDIAN TRIBES.—Section 460 of

23 the Cranston-Gonzalez National Affordable Housing Act (42

24 U.S.C. 12899h–1) is amended by striking ‘‘fiscal year

25 1997’’ and inserting ‘‘fiscal year 1998’’.
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1 (q) INDIAN HOUSING EARLY CHILDHOOD DEVELOP2 MENT PROGRAM.—

3 (1) REPEAL.—Section 518 of the Cranston-Gon4 zalez National Affordable Housing Act (12 U.S.C.

5 1701z–11 note) is repealed.

6 (2) TECHNICAL CORRECTION.—

7 (A) IN GENERAL.—Section 501(d)(1) of the

8 Native American Housing Assistance and Self9 Determination Act of 1996 (110 Stat. 4042), and

10 the amendment made by that section, is repealed.

11 (B) APPLICABILITY.—Section 519 of Cran12 ston-Gonzalez National Affordable Housing Act

13 (42 U.S.C. 1437a–1) shall be applied and ad14 ministered as if section 501(d)(1) of the Native

15 American Housing Assistance and Self-Deter16 mination Act of 1996 (104 Stat. 4042) had not

17 been enacted.

18 (3) EFFECTIVE DATE.—This subsection and the

19 amendments made by this subsection shall be con20 strued to have taken effect on October 26, 1996.

21 (r) TRIBAL ELIGIBILITY UNDER THE DRUG ELIMI22 NATION PROGRAM.—The Public and Assisted Housing

23 Elimination Act of 1990 (42 U.S.C. 11901 et seq.) is

24 amended—
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1 (1) in section 5123, by inserting ‘‘Indian tribes,’’

2 after ‘‘tribally designated housing entities,’’;

3 (2) in section 5124(a)(7), by inserting ‘‘, Indian

4 tribe,’’ after ‘‘agency’’;

5 (3) in section 5125(a), by inserting ‘‘Indian

6 tribe,’’ after ‘‘entity,’’; and

7 (4) in section 5126, by adding at the end the fol8 lowing:

9 ‘‘(6) INDIAN TRIBE.—The term ‘Indian tribe’ has

10 the meaning given that term in section 4 of the Na11 tive American Housing Assistance and Self-Deter12 mination Act of 1996 (25 U.S.C. 4103).’’.

13 (s) REFERENCE IN THE PUBLIC AND ASSISTED HOUS14 ING DRUG ELIMINATION ACT OF 1990.—Section

15 5126(4)(D) of the Public and Assisted Housing Drug Elimi16 nation Act of 1990 (42 U.S.C. 11905(4)(D)) is amended

17 by inserting ‘‘of 1996’’ before the period.

18 TITLE II—HOMEOWNERS

19 PROTECTION ACT

20 SEC. 201. SHORT TITLE.

21 This title may be cited as the ‘‘Homeowners Protection

22 Act of 1997’’.

23 SEC. 202. DEFINITIONS.

24 In this title, the following definitions shall apply:
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1 (1) ADJUSTABLE RATE MORTGAGE.—The term

2 ‘‘adjustable rate mortgage’’ means a residential mort3 gage that has an interest rate that is subject to

4 change.

5 (2) CANCELLATION DATE.—The term ‘‘cancella6 tion date’’ means—

7 (A) with respect to a fixed rate mortgage, at

8 the option of the mortgagor, the date on which

9 the principal balance of the mortgage—

10 (i) based solely on the initial amortiza11 tion schedule for that mortgage, and irre12 spective of the outstanding balance for that

13 mortgage on that date, is first scheduled to

14 reach 80 percent of the original value of the

15 property securing the loan; or

16 (ii) based solely on actual payments,

17 reaches 80 percent of the original value of

18 the property securing the loan; and

19 (B) with respect to an adjustable rate mort20 gage, at the option of the mortgagor, the date on

21 which the principal balance of the mortgage—

22 (i) based solely on amortization sched23 ules for that mortgage, and irrespective of

24 the outstanding balance for that mortgage

25 on that date, is first scheduled to reach 80
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1 percent of the original value of the property

2 securing the loan; or

3 (ii) based solely on actual payments,

4 first reaches 80 percent of the original value

5 of the property securing the loan.

6 (3) FIXED RATE MORTGAGE.—The term ‘‘fixed

7 rate mortgage’’ means a residential mortgage that has

8 an interest rate that is not subject to change.

9 (4) GOOD PAYMENT HISTORY.—The term ‘‘good

10 payment history’’ means, with respect to a mortgagor,

11 that the mortgagor has not—

12 (A) made a mortgage payment that was 60

13 days or longer past due during the 12-month pe14 riod beginning 24 months before the date on

15 which the mortgage reaches the cancellation date;

16 or

17 (B) made a mortgage payment that was 30

18 days or longer past due during the 12-month pe19 riod preceding the date on which the mortgage

20 reaches the cancellation date.

21 (5) INITIAL AMORTIZATION SCHEDULE.—The

22 term ‘‘initial amortization schedule’’ means a sched23 ule established at the time at which a residential

24 mortgage transaction is consummated with respect to

25 a fixed rate mortgage, showing—
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1 (A) the amount of principal and interest

2 that is due at regular intervals to retire the

3 principal balance and accrued interest over the

4 amortization period of the loan; and

5 (B) the unpaid principal balance of the

6 loan after each scheduled payment is made.

7 (6) MORTGAGE INSURANCE.—The term ‘‘mort8 gage insurance’’ means insurance, including any

9 mortgage guaranty insurance, against the nonpay10 ment of, or default on, an individual mortgage or

11 loan involved in a residential mortgage transaction.

12 (7) MORTGAGE INSURER.—The term ‘‘mortgage

13 insurer’’ means a provider of private mortgage insur14 ance, as described in this title, that is authorized to

15 transact such business in the State in which the pro16 vider is transacting such business.

17 (8) MORTGAGEE.—The term ‘‘mortgagee’’ means

18 the holder of a residential mortgage at the time at

19 which that mortgage transaction is consummated.

20 (9) MORTGAGOR.—The term ‘‘mortgagor’’ means

21 the original borrower under a residential mortgage or

22 his or her successors or assignees.

23 (10) ORIGINAL VALUE.—The term ‘‘original

24 value’’, with respect to a residential mortgage, means

25 the lesser of the sales price of the property securing
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1 the mortgage, as reflected in the contract, or the ap2 praised value at the time at which the subject residen3 tial mortgage transaction was consummated.

4 (11) PRIVATE MORTGAGE INSURANCE.—The term

5 ‘‘private mortgage insurance’’ means mortgage insur6 ance other than mortgage insurance made available

7 under the National Housing Act, title 38 of the Unit8 ed States Code, or title V of the Housing Act of 1949.

9 (12) RESIDENTIAL MORTGAGE.—The term ‘‘resi10 dential mortgage’’ means a mortgage, loan, or other

11 evidence of a security interest created with respect to

12 a single-family dwelling that is the primary residence

13 of the mortgagor.

14 (13) RESIDENTIAL MORTGAGE TRANSACTION.—

15 The term ‘‘residential mortgage transaction’’ means a

16 transaction consummated on or after the date that is

17 1 year after the date of enactment of this Act, in

18 which a mortgage, deed of trust, purchase money secu19 rity interest arising under an installment sales con20 tract, or equivalent consensual security interest is cre21 ated or retained against a single-family dwelling that

22 is the primary residence of the mortgagor to finance

23 the acquisition, initial construction, or refinancing of

24 that dwelling.
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1 (14) SERVICER.—The term ‘‘servicer’’ has the

2 same meaning as in section 6(i)(2) of the Real Estate

3 Settlement Procedures Act of 1974, with respect to a

4 residential mortgage.

5 (15) SINGLE-FAMILY DWELLING.—The term ‘‘sin6 gle-family dwelling’’ means a residence consisting of

7 1 family dwelling unit.

8 (16) TERMINATION DATE.—The term ‘‘termi9 nation date’’ means—

10 (A) with respect to a fixed rate mortgage,

11 the date on which the principal balance of the

12 mortgage, based solely on the initial amortiza13 tion schedule for that mortgage, and irrespective

14 of the outstanding balance for that mortgage on

15 that date, is first scheduled to reach 78 percent

16 of the original value of the property securing the

17 loan; and

18 (B) with respect to an adjustable rate mort19 gage, the date on which the principal balance of

20 the mortgage, based solely on amortization sched21 ules for that mortgage, and irrespective of the

22 outstanding balance for that mortgage on that

23 date, is first scheduled to reach 78 percent of the

24 original value of the property securing the loan.
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1 SEC. 203. TERMINATION OF PRIVATE MORTGAGE INSUR2 ANCE.

3 (a) BORROWER CANCELLATION.—A requirement for

4 private mortgage insurance in connection with a residential

5 mortgage transaction shall be canceled on the cancellation

6 date, if the mortgagor—

7 (1) submits a request in writing to the servicer

8 that cancellation be initiated;

9 (2) has a good payment history with respect to

10 the residential mortgage; and

11 (3) has satisfied any requirement of the holder of

12 the mortgage (as of the date of a request under para13 graph (1)) for—

14 (A) evidence (of a type established in ad15 vance and made known to the mortgagor by the

16 servicer promptly upon receipt of a request

17 under paragraph (1)) that the value of the prop18 erty securing the mortgage has not declined

19 below the original value of the property; and

20 (B) certification that the equity of the mort21 gagor in the residence securing the mortgage is

22 unencumbered by a subordinate lien.

23 (b) AUTOMATIC TERMINATION.—A requirement for

24 private mortgage insurance in connection with a residential

25 mortgage transaction shall terminate with respect to pay-
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1 ments for that mortgage insurance made by the mortga2 gor—

3 (1) on the termination date if, on that date, the

4 mortgagor is current on the payments required by the

5 terms of the residential mortgage transaction; or

6 (2) on the date after the termination date on

7 which the mortgagor becomes current on the payments

8 required by the terms of the residential mortgage

9 transaction.

10 (c) FINAL TERMINATION.—If a requirement for private

11 mortgage insurance is not otherwise canceled or terminated

12 in accordance with subsection (a) or (b), in no case may

13 such a requirement be imposed beyond the first day of the

14 month immediately following the date that is the midpoint

15 of the amortization period of the loan if the mortgagor is

16 current on the payments required by the terms of the mort17 gage.

18 (d) NO FURTHER PAYMENTS.—No payments or pre19 miums may be required from the mortgagor in connection

20 with a private mortgage insurance requirement terminated

21 or canceled under this section—

22 (1) in the case of cancellation under subsection

23 (a), more than 30 days after the later of—

24 (A) the date on which a request under sub25 section (a)(1) is received; or
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1 (B) the date on which the mortgagor satis2 fies any evidence and certification requirements

3 under subsection (a)(3);

4 (2) in the case of termination under subsection

5 (b), more than 30 days after the termination date or

6 the date referred to in subsection (b)(2), as applicable;

7 and

8 (3) in the case of termination under subsection

9 (c), more than 30 days after the final termination

10 date established under that subsection.

11 (e) RETURN OF UNEARNED PREMIUMS.—

12 (1) IN GENERAL.—Not later than 45 days after

13 the termination or cancellation of a private mortgage

14 insurance requirement under this section, all un15 earned premiums for private mortgage insurance

16 shall be returned to the mortgagor by the servicer.

17 (2) TRANSFER OF FUNDS TO SERVICER.—Not

18 later than 30 days after notification by the servicer

19 of termination or cancellation of private mortgage in20 surance under this title with respect to a mortgagor,

21 a mortgage insurer that is in possession of any un22 earned premiums of that mortgagor shall transfer to

23 the servicer of the subject mortgage an amount equal

24 to the amount of the unearned premiums for repay25 ment in accordance with paragraph (1).
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1 (f) EXCEPTIONS FOR HIGH RISK LOANS.—

2 (1) IN GENERAL.—The termination and can3 cellation provisions in subsections (a) and (b) do not

4 apply to any residential mortgage or mortgage trans5 action that, at the time at which the residential mort6 gage transaction is consummated, has high risks asso7 ciated with the extension of the loan—

8 (A) as determined in accordance with

9 guidelines established by the Federal National

10 Mortgage Association or the Federal Home Loan

11 Mortgage Corporation, in the case of a mortgage

12 loan with an original principal balance that

13 does not exceed the applicable annual conforming

14 loan limit for the secondary market established

15 pursuant to section 305(a)(2) of the Federal

16 Home Loan Mortgage Corporation Act, so as to

17 require the imposition or continuation of a pri18 vate mortgage insurance requirement beyond the

19 terms specified in subsection (a) or (b) of this

20 section; or

21 (B) as determined by the mortgagee in the

22 case of any other mortgage, except that termi23 nation shall occur—

24 (i) with respect to a fixed rate mort25 gage, on the date on which the principal
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1 balance of the mortgage, based solely on the

2 initial amortization schedule for that mort3 gage, and irrespective of the outstanding

4 balance for that mortgage on that date, is

5 first scheduled to reach 77 percent of the

6 original value of the property securing the

7 loan; and

8 (ii) with respect to an adjustable rate

9 mortgage, on the date on which the prin10 cipal balance of the mortgage, based solely

11 on amortization schedules for that mort12 gage, and irrespective of the outstanding

13 balance for that mortgage on that date, is

14 first scheduled to reach 77 percent of the

15 original value of the property securing the

16 loan.

17 (2) TERMINATION AT MIDPOINT.—A private

18 mortgage insurance requirement in connection with a

19 residential mortgage or mortgage transaction de20 scribed in paragraph (1) shall terminate in accord21 ance with subsection (c).

22 (3) RULE OF CONSTRUCTION.—Nothing in this

23 subsection may be construed to require a mortgage or

24 mortgage transaction described in paragraph (1)(A)

25 to be purchased by the Federal National Mortgage As-
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1 sociation or the Federal Home Loan Mortgage Cor2 poration.

3 SEC. 204. DISCLOSURE REQUIREMENTS.

4 (a) DISCLOSURES FOR NEW MORTGAGES AT TIME OF

5 TRANSACTION.—

6 (1) DISCLOSURES FOR NON-EXEMPTED TRANS7 ACTIONS.—In any case in which private mortgage in8 surance is required in connection with a residential

9 mortgage or mortgage transaction (other than a mort10 gage or mortgage transaction described in section

11 203(f)(1)), at the time at which the transaction is

12 consummated, the mortgagee shall provide to the

13 mortgagor—

14 (A) if the transaction relates to a fixed rate

15 mortgage—

16 (i) a written initial amortization

17 schedule; and

18 (ii) written notice—

19 (I) that the mortgagor may cancel

20 the requirement in accordance with

21 section 203(a) of this Act indicating

22 the date on which the mortgagor may

23 request cancellation, based solely on the

24 initial amortization schedule;
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1 (II) that the mortgagor may re2 quest cancellation in accordance with

3 section 203(a) of this Act earlier than

4 provided for in the initial amortiza5 tion schedule, based on actual pay6 ments;

7 (III) that the requirement for pri8 vate mortgage insurance will auto9 matically terminate on the termination

10 date in accordance with section 203(b)

11 of this Act, and what that termination

12 date is with respect to that mortgage;

13 and

14 (IV) that there are exemptions to

15 the right to cancellation and automatic

16 termination of a requirement for pri17 vate mortgage insurance in accordance

18 with section 203(f) of this Act, and

19 whether such an exemption applies at

20 that time to that transaction; and

21 (B) if the transaction relates to an adjust22 able rate mortgage, a written notice that—

23 (i) the mortgagor may cancel the re24 quirement in accordance with section

25 203(a) of this Act on the cancellation date,
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1 and that the servicer will notify the mortga2 gor when the cancellation date is reached;

3 (ii) the requirement for private mort4 gage insurance will automatically terminate

5 on the termination date, and that on the

6 termination date, the mortgagor will be no7 tified of the termination or that the require8 ment will be terminated as soon as the

9 mortgagor is current on loan payments; and

10 (iii) there are exemptions to the right

11 of cancellation and automatic termination

12 of a requirement for private mortgage in13 surance in accordance with section 203(f) of

14 this Act, and whether such an exemption

15 applies at that time to that transaction.

16 (2) DISCLOSURES FOR EXCEPTED TRANS17 ACTIONS.—In the case of a mortgage or mortgage

18 transaction described in section 203(f)(1), at the time

19 at which the transaction is consummated, the mortga20 gee shall provide written notice to the mortgagor that

21 in no case may private mortgage insurance be re22 quired beyond the date that is the midpoint of the

23 amortization period of the loan, if the mortgagor is

24 current on payments required by the terms of the resi25 dential mortgage.
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1 (3) ANNUAL DISCLOSURES.—If private mortgage

2 insurance is required in connection with a residential

3 mortgage transaction, the servicer shall disclose to the

4 mortgagor in each such transaction in an annual

5 written statement—

6 (A) the rights of the mortgagor under this

7 title to cancellation or termination of the private

8 mortgage insurance requirement; and

9 (B) an address and telephone number that

10 the mortgagor may use to contact the servicer to

11 determine whether the mortgagor may cancel the

12 private mortgage insurance.

13 (4) APPLICABILITY.—Paragraphs (1) through (3)

14 shall apply with respect to each residential mortgage

15 transaction consummated on or after the date that is

16 1 year after the date of enactment of this Act.

17 (b) DISCLOSURES FOR EXISTING MORTGAGES.—If

18 private mortgage insurance was required in connection

19 with a residential mortgage entered into at any time before

20 the effective date of this title, the servicer shall disclose to

21 the mortgagor in each such transaction in an annual writ22 ten statement—

23 (1) that the private mortgage insurance may,

24 under certain circumstances, be canceled by the mort-
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1 gagor (with the consent of the mortgagee or in accord2 ance with applicable State law); and

3 (2) an address and telephone number that the

4 mortgagor may use to contact the servicer to deter5 mine whether the mortgagor may cancel the private

6 mortgage insurance.

7 (c) INCLUSION IN OTHER ANNUAL NOTICES.—The in8 formation and disclosures required under subsection (b) and

9 paragraphs (1)(B) and (3) of subsection (a) may be pro10 vided on the annual disclosure relating to the escrow ac11 count made as required under the Real Estate Settlement

12 Procedures Act of 1974, or as part of the annual disclosure

13 of interest payments made pursuant to Internal Revenue

14 Service regulations, and on a form promulgated by the In15 ternal Revenue Service for that purpose.

16 (d) STANDARDIZED FORMS.—The mortgagee or

17 servicer may use standardized forms for the provision of

18 disclosures required under this section.

19 SEC. 205. NOTIFICATION UPON CANCELLATION OR TERMI20 NATION.

21 (a) IN GENERAL.—Not later than 30 days after the

22 date of cancellation or termination of a private mortgage

23 insurance requirement in accordance with this title, the

24 servicer shall notify the mortgagor in writing—
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1 (1) that the private mortgage insurance has ter2 minated and that the mortgagor no longer has private

3 mortgage insurance; and

4 (2) that no further premiums, payments, or other

5 fees shall be due or payable by the mortgagor in con6 nection with the private mortgage insurance.

7 (b) NOTICE OF GROUNDS.—

8 (1) IN GENERAL.—If a servicer determines that

9 a mortgage did not meet the requirements for termi10 nation or cancellation of private mortgage insurance

11 under subsection (a) or (b) of section 203, the servicer

12 shall provide written notice to the mortgagor of the

13 grounds relied on to make the determination (includ14 ing the results of any appraisal used to make the de15 termination).

16 (2) TIMING.—Notice required by paragraph (1)

17 shall be provided—

18 (A) with respect to cancellation of private

19 mortgage insurance under section 203(a), not

20 later than 30 days after the later of—

21 (i) the date on which a request is re22 ceived under section 203(a)(1); or

23 (ii) the date on which the mortgagor

24 satisfies any evidence and certification re25 quirements under section 203(a)(3); and
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1 (B) with respect to termination of private

2 mortgage insurance under section 203(b), not

3 later than 30 days after the scheduled termi4 nation date.

5 SEC. 206. DISCLOSURE REQUIREMENTS FOR LENDER PAID

6 MORTGAGE INSURANCE.

7 (a) DEFINITIONS.—For purposes of this section—

8 (1) the term ‘‘borrower paid mortgage insur9 ance’’ means private mortgage insurance that is re10 quired in connection with a residential mortgage

11 transaction, payments for which are made by the bor12 rower;

13 (2) the term ‘‘lender paid mortgage insurance’’

14 means private mortgage insurance that is required in

15 connection with a residential mortgage transaction,

16 payments for which are made by a person other than

17 the borrower; and

18 (3) the term ‘‘loan commitment’’ means a pro19 spective mortgagee’s written confirmation of its ap20 proval, including any applicable closing conditions,

21 of the application of a prospective mortgagor for a

22 residential mortgage loan.

23 (b) EXCLUSION.—Sections 203 through 205 do not

24 apply in the case of lender paid mortgage insurance.
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1 (c) NOTICES TO MORTGAGOR.—In the case of lender

2 paid mortgage insurance that is required in connection

3 with a residential mortgage or a residential mortgage trans4 action—

5 (1) not later than the date on which a loan com6 mitment is made for the residential mortgage trans7 action, the prospective mortgagee shall provide to the

8 prospective mortgagor a written notice—

9 (A) that lender paid mortgage insurance

10 differs from borrower paid mortgage insurance,

11 in that lender paid mortgage insurance may not

12 be canceled by the mortgagor, while borrower

13 paid mortgage insurance could be cancelable by

14 the mortgagor in accordance with section 203(a)

15 of this Act, and could automatically terminate

16 on the termination date in accordance with sec17 tion 203(b) of this Act;

18 (B) that lender paid mortgage insurance—

19 (i) usually results in a residential

20 mortgage having a higher interest rate than

21 it would in the case of borrower paid mort22 gage insurance; and

23 (ii) terminates only when the residen24 tial mortgage is refinanced, paid off, or oth25 erwise terminated;
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1 (C) that lender paid mortgage insurance

2 and borrower paid mortgage insurance both have

3 benefits and disadvantages, including a generic

4 analysis of the differing costs and benefits of a

5 residential mortgage in the case lender paid

6 mortgage insurance versus borrower paid mort7 gage insurance over a 10-year period, assuming

8 prevailing interest and property appreciation

9 rates; and

10 (D) that lender paid mortgage insurance

11 may be tax-deductible for purposes of Federal in12 come taxes, if the mortgagor itemizes expenses for

13 that purpose; and

14 (2) not later than 30 days after the termination

15 date that would apply in the case of borrower paid

16 mortgage insurance, the servicer shall provide to the

17 mortgagor a written notice indicating that the mort18 gagor may wish to review financing options that

19 could eliminate the requirement for private mortgage

20 insurance in connection with the residential mort21 gage.

22 (d) STANDARD FORMS.—The servicer of a residential

23 mortgage may develop and use a standardized form or

24 forms for the provision of notices to the mortgagor, as re25 quired under subsection (c).
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1 SEC. 207. FEES FOR DISCLOSURES.

2 No fee or other cost may be imposed on any mortgagor

3 with respect to the provision of any notice or information

4 to the mortgagor pursuant to this title.

5 SEC. 208. CIVIL LIABILITY.

6 (a) IN GENERAL.—Any servicer, mortgagee, or mort7 gage insurer that violates a provision of this title shall be

8 liable to each mortgagor to whom the violation relates for—

9 (1) in the case of an action by an individual, or

10 a class action in which the liable party is not subject

11 to section 210, any actual damages sustained by the

12 mortgagor as a result of the violation, including in13 terest (at a rate determined by the court) on the

14 amount of actual damages, accruing from the date on

15 which the violation commences;

16 (2) in the case of—

17 (A) an action by an individual, such statu18 tory damages as the court may allow, not to ex19 ceed $2,000; and

20 (B) in the case of a class action—

21 (i) in which the liable party is subject

22 to section 210, such amount as the court

23 may allow, except that the total recovery

24 under this subparagraph in any class ac25 tion or series of class actions arising out of

26 the same violation by the same liable party
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1 shall not exceed the lesser of $500,000 or 1

2 percent of the net worth of the liable party,

3 as determined by the court; and

4 (ii) in which the liable party is not

5 subject to section 210, such amount as the

6 court may allow, not to exceed $1000 as to

7 each member of the class, except that the

8 total recovery under this subparagraph in

9 any class action or series of class actions

10 arising out of the same violation by the

11 same liable party shall not exceed the lesser

12 of $500,000 or 1 percent of the gross reve13 nues of the liable party, as determined by

14 the court;

15 (3) costs of the action; and

16 (4) reasonable attorney fees, as determined by the

17 court.

18 (b) TIMING OF ACTIONS.—No action may be brought

19 by a mortgagor under subsection (a) later than 2 years after

20 the date of the discovery of the violation that is the subject

21 of the action.

22 (c) LIMITATIONS ON LIABILITY.—

23 (1) IN GENERAL.—With respect to a residential

24 mortgage transaction, the failure of a servicer to com25 ply with the requirements of this title due to the fail-
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1 ure of a mortgage insurer or a mortgagee to comply

2 with the requirements of this title, shall not be con3 strued to be a violation of this title by the servicer.

4 (2) RULE OF CONSTRUCTION.—Nothing in para5 graph (1) shall be construed to impose any additional

6 requirement or liability on a mortgage insurer, a

7 mortgagee, or a holder of a residential mortgage.

8 SEC. 209. EFFECT ON OTHER LAWS AND AGREEMENTS.

9 (a) EFFECT ON STATE LAW.—

10 (1) IN GENERAL.—With respect to any residen11 tial mortgage or residential mortgage transaction con12 summated after the effective date of this title, and ex13 cept as provided in paragraph (2), the provisions of

14 this title shall supersede any provisions of the law of

15 any State relating to requirements for obtaining or

16 maintaining private mortgage insurance in connec17 tion with residential mortgage transactions, cancella18 tion or automatic termination of such private mort19 gage insurance, any disclosure of information ad20 dressed by this title, and any other matter specifically

21 addressed by this title.

22 (2) CONTINUED APPLICATION OF CERTAIN PROVI23 SIONS.—This title does not supersede any provision of

24 the law of a State in effect on or before September 1,

25 1989, pertaining to the termination of private mort-
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1 gage insurance or other mortgage guaranty insurance,

2 to the extent that such law requires termination of

3 such insurance at an earlier date or when a lower

4 mortgage loan principal balance is achieved than as

5 provided in this title.

6 (b) EFFECT ON OTHER AGREEMENTS.—The provisions

7 of this title shall supersede any conflicting provision con8 tained in any agreement relating to the servicing of a resi9 dential mortgage loan entered into by the Federal National

10 Mortgage Association, the Federal Home Loan Mortgage

11 Corporation, or any private investor or note holder (or any

12 successors thereto).

13 SEC. 210. ENFORCEMENT.

14 (a) IN GENERAL.—Compliance with the requirements

15 imposed under this title shall be enforced under—

16 (1) section 8 of the Federal Deposit Insurance

17 Act—

18 (A) by the appropriate Federal banking

19 agency (as defined in section 3(q) of the Federal

20 Deposit Insurance Act) in the case of insured de21 pository institutions (as defined in section

22 3(c)(2) of that Act);

23 (B) by the Federal Deposit Insurance Cor24 poration in the case of depository institutions

25 described in clause (i), (ii), or (iii) of section
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1 19(b)(1)(A) of the Federal Reserve Act that are

2 not insured depository institutions (as defined in

3 section 3(c)(2) of the Federal Deposit Insurance

4 Act); and

5 (C) by the Director of the Office of Thrift

6 Supervision in the case of depository institutions

7 described in clause (v) and or (vi) of section

8 19(b)(1)(A) of the Federal Reserve Act that are

9 not insured depository institutions (as defined in

10 section 3(c)(2) of the Federal Deposit Insurance

11 Act);

12 (2) the Federal Credit Union Act, by the Na13 tional Credit Union Administration Board in the

14 case of depository institutions described in clause (iv)

15 of section 19(b)(1)(A) of the Federal Reserve Act; and

16 (3) part C of title V of the Farm Credit Act of

17 1971 (12 U.S.C. 2261 et seq.), by the Farm Credit

18 Administration in the case of an institution that is

19 a member of the Farm Credit System.

20 (b) ADDITIONAL ENFORCEMENT POWERS.—

21 (1) VIOLATION OF THIS TITLE TREATED AS VIO22 LATION OF OTHER ACTS.—For purposes of the exercise

23 by any agency referred to in subsection (a) of such

24 agency’s powers under any Act referred to in such

25 subsection, a violation of a requirement imposed
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1 under this title shall be deemed to be a violation of

2 a requirement imposed under that Act.

3 (2) ENFORCEMENT AUTHORITY UNDER OTHER

4 ACTS.—In addition to the powers of any agency re5 ferred to in subsection (a) under any provision of law

6 specifically referred to in such subsection, each such

7 agency may exercise, for purposes of enforcing compli8 ance with any requirement imposed under this title,

9 any other authority conferred on such agency by law.

10 (c) ENFORCEMENT AND REIMBURSEMENT.—In carry11 ing out its enforcement activities under this section, each

12 agency referred to in subsection (a) shall—

13 (1) notify the mortgagee or servicer of any fail14 ure of the mortgagee or servicer to comply with 1 or

15 more provisions of this title;

16 (2) with respect to each such failure to comply,

17 require the mortgagee or servicer, as applicable, to

18 correct the account of the mortgagor to reflect the date

19 on which the mortgage insurance should have been

20 canceled or terminated under this title; and

21 (3) require the mortgagee or servicer, as applica22 ble, to reimburse the mortgagor in an amount equal

23 to the total unearned premiums paid by the mortga24 gor after the date on which the obligation to pay those

25 premiums ceased under this title.
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1 SEC. 211. CONSTRUCTION.

2 Nothing in this title shall be construed to impose any

3 requirement for private mortgage insurance in connection

4 with a residential mortgage transaction.

5 SEC. 212. EFFECTIVE DATE.

6 This title shall become effective 1 year after the date

7 of enactment of this Act.

8 TITLE III—ABOLISHMENT OF

9 THE THRIFT DEPOSITOR PRO10 TECTION OVERSIGHT BOARD

11 SEC. 301. ABOLISHMENT.

12 (a) IN GENERAL.—Effective at the end of the 3-month

13 period beginning on the date of enactment of this Act, the

14 Thrift Depositor Protection Oversight Board established

15 under section 21A of the Federal Home Loan Bank Act

16 (hereafter in this section referred to as the ‘‘Oversight

17 Board’’) is hereby abolished.

18 (b) DISPOSITION OF AFFAIRS.—

19 (1) POWER OF CHAIRPERSON.—Effective on the

20 date of enactment of this Act, the Chairperson of the

21 Oversight Board (or the designee of the Chairperson)

22 may exercise on behalf of the Oversight Board any

23 power of the Oversight Board necessary to settle and

24 conclude the affairs of the Oversight Board.

25 (2) AVAILABILITY OF FUNDS.—Funds available

26 to the Oversight Board shall be available to the Chair-
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1 person of the Oversight Board to pay expenses in2 curred in carrying out paragraph (1).

3 (c) SAVINGS PROVISION.—

4 (1) EXISTING RIGHTS, DUTIES, AND OBLIGA5 TIONS NOT AFFECTED.—No provision of this section

6 shall be construed as affecting the validity of any

7 right, duty, or obligation of the United States, the

8 Oversight Board, the Resolution Trust Corporation,

9 or any other person that—

10 (A) arises under or pursuant to the Federal

11 Home Loan Bank Act, or any other provision of

12 law applicable with respect to the Oversight

13 Board; and

14 (B) existed on the day before the abolish15 ment of the Oversight Board in accordance with

16 subsection (a).

17 (2) CONTINUATION OF SUITS.—No action or

18 other proceeding commenced by or against the Over19 sight Board with respect to any function of the Over20 sight Board shall abate by reason of the enactment of

21 this section.

22 (3) LIABILITIES.—

23 (A) IN GENERAL.—All liabilities arising out

24 of the operation of the Oversight Board during

25 the period beginning on August 9, 1989, and the
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HR 607 EAS

1 date that is 3 months after the date of enactment

2 of this Act shall remain the direct liabilities of

3 the United States.

4 (B) NO SUBSTITUTION.—The Secretary of

5 the Treasury shall not be substituted for the

6 Oversight Board as a party to any action or

7 proceeding referred to in subparagraph (A).

8 (4) CONTINUATIONS OF ORDERS, RESOLUTIONS,

9 DETERMINATIONS, AND REGULATIONS PERTAINING TO

10 THE RESOLUTION FUNDING CORPORATION.—

11 (A) IN GENERAL.—All orders, resolutions,

12 determinations, and regulations regarding the

13 Resolution Funding Corporation shall continue

14 in effect according to the terms of such orders,

15 resolutions, determinations, and regulations

16 until modified, terminated, set aside, or super17 seded in accordance with applicable law if such

18 orders, resolutions, determinations, or regula19 tions—

20 (i) have been issued, made, and pre21 scribed, or allowed to become effective by the

22 Oversight Board, or by a court of competent

23 jurisdiction, in the performance of functions

24 transferred by this section; and
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HR 607 EAS

1 (ii) are in effect at the end of the 3-

2 month period beginning on the date of en3 actment of this section.

4 (B) ENFORCEABILITY OF ORDERS, RESOLU5 TIONS, DETERMINATIONS, AND REGULATIONS BE6 FORE TRANSFER.—Before the effective date of the

7 transfer of the authority and duties of the Reso8 lution Funding Corporation to the Secretary of

9 the Treasury under subsection (d), all orders,

10 resolutions, determinations, and regulations per11 taining to the Resolution Funding Corporation

12 shall be enforceable by and against the United

13 States.

14 (C) ENFORCEABILITY OF ORDERS, RESOLU15 TIONS, DETERMINATIONS, AND REGULATIONS

16 AFTER TRANSFER.—On and after the effective

17 date of the transfer of the authority and duties

18 of the Resolution Funding Corporation to the

19 Secretary of the Treasury under subsection (d),

20 all orders, resolutions, determinations, and regu21 lations pertaining to the Resolution Funding

22 Corporation shall be enforceable by and against

23 the Secretary of the Treasury.

24 (d) TRANSFER OF THRIFT DEPOSITOR PROTECTION

25 OVERSIGHT BOARD AUTHORITY AND DUTIES OF RESOLU-
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1 TION FUNDING CORPORATION TO SECRETARY OF THE

2 TREASURY.—Effective at the end of the 3-month period be3 ginning on the date of enactment of this Act, the authority

4 and duties of the Oversight Board under sections

5 21A(a)(6)(I) and 21B of the Federal Home Loan Bank Act

6 are transferred to the Secretary of the Treasury (or the des7 ignee of the Secretary).

8 (e) MEMBERSHIP OF THE AFFORDABLE HOUSING AD9 VISORY BOARD.—Effective on the date of enactment of this

10 Act, section 14(b)(2) of the Resolution Trust Corporation

11 Completion Act (12 U.S.C. 1831q note) is amended—

12 (1) by striking subparagraph (C); and

13 (2) by redesignating subparagraphs (D) and (E)

14 as subparagraphs (C) and (D), respectively.

15 (f) TIME OF MEETINGS OF THE AFFORDABLE HOUS16 ING ADVISORY BOARD.—

17 (1) IN GENERAL.—Section 14(b)(6)(A) of the

18 Resolution Trust Corporation Completion Act (12

19 U.S.C. 1831q note) is amended—

20 (A) by striking ‘‘4 times a year, or more

21 frequently if requested by the Thrift Depositor

22 Protection Oversight Board or’’ and inserting ‘‘2

23 times a year or at the request of’’; and

24 (B) by striking the second sentence.
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1 (2) CLERICAL AMENDMENT.—Section 14(b)(6)(A)

2 of the Resolution Trust Corporation Completion Act

3 (12 U.S.C. 1831q note) is amended, in the subpara4 graph heading, by striking ‘‘AND LOCATION’’.

Amend the title so as to read: ‘‘An Act to amend the

National Housing Act to prevent the funding of unnecessary or excessive costs for obtaining a home equity conversion mortgage, to require automatic cancellation and

notice of cancellation rights with respect to private mortgage insurance required as a condition for entering into

a residential mortgage transaction, to abolish the Thrift

Depositor Protection Oversight Board, and for other purposes.’’.

Attest:

Secretary.
105TH CONGRESS

1ST SESSION H. R. 607

AMENDMENTS