‘‘(17) In the case of a residential mortgage loan 
for which an escrow or impound account will be es-
tablished for the payment of all applicable taxes, in-
surance, and assessments, the following statement: 
‘Your payments will be increased to cover taxes and 
insurance. In the first year, you will pay an addi-
tional $ll [insert the amount of the monthly pay-
ment to the account] every month to cover the costs 
of taxes and insurance.’. 
‘‘(18) In the case of a variable rate residential 
mortgage loan for which an escrow or impound ac-
count will be established for the payment of all ap-
plicable taxes, insurance, and assessments— 
‘‘(A) the amount of initial monthly pay-
ment due under the loan for the payment of 
principal and interest, and the amount of such 
initial monthly payment including the monthly 
payment deposited in the account for the pay-
ment of all applicable taxes, insurance, and as-
sessments; and 
‘‘(B) the amount of the fully indexed 
monthly payment due under the loan for the 
payment of principal and interest, and the 
amount of such fully indexed monthly payment 
including the monthly payment deposited in the
account for the payment of all applicable taxes, 
insurance, and assessments. 
‘‘(19) In the case of a residential mortgage 
loan, the aggregate amount of settlement charges for 
all settlement services provided in connection with 
the loan, the amount of charges that are included in 
the loan and the amount of such charges the bor-
rower must pay at closing, the approximate amount 
of the wholesale rate of funds in connection with the 
loan, and the aggregate amount of other fees or re-
quired payments in connection with the loan. 
‘‘(20) In the case of a residential mortgage 
loan, the aggregate amount of fees paid to the mort-
gage originator in connection with the loan, the 
amount of such fees paid directly by the consumer, 
and any additional amount received by the originator 
from the creditor based on the interest rate of the 
loan.’’. 
(b) TIMING.—Section 128(b) of the Truth in Lending 
Act (15 U.S.C. 1638(b)) is amended by adding at the end 
the following new paragraph: 
‘‘(4) RESIDENTIAL
MORTGAGE
LOAN
DISCLO-
SURES.—In the case of a residential mortgage loan, 
the information required to be disclosed under sub-
section (a) with respect to such loan shall be dis-
closed before the earlier of— 
‘‘(A) the time required under the first sen-
tence of paragraph (1); or 
‘‘(B) the end of the 3-day period beginning 
on the date the application for the loan from a 
consumer is received by the creditor.’’. 
(c) ENHANCED MORTGAGE LOAN DISCLOSURES.— 
Section 128(b)(2) of the Truth in Lending Act (15 U.S.C. 
1638(b)(2)) is amended— 
(1) by striking ‘‘(2) In the’’ and inserting the 
following: 
‘‘(2) MORTGAGE DISCLOSURES.— 
‘‘(A) IN GENERAL.—In the’’; 
(2) by striking ‘‘a residential mortgage trans-
action, as defined in section 103(w)’’ and inserting 
‘‘any extension of credit that is secured by the dwell-
ing of a consumer’’; 
(3) by striking ‘‘shall be made in accordance’’ 
and all that follows through ‘‘extended, or’’; 
(4) by striking ‘‘If the’’ and all that follows 
through the end of the paragraph and inserting the 
following new subparagraphs: 
‘‘(B) STATEMENT AND TIMING OF DISCLO-
SURES.—In the case of an extension of credit
that is secured by the dwelling of a consumer, 
in addition to the other disclosures required by 
subsection (a), the disclosures provided under 
this paragraph shall state in conspicuous type 
size and format, the following: ‘You are not re-
quired to complete this agreement merely be-
cause you have received these disclosures or 
signed a loan application.’. 
‘‘(i) state in conspicuous type size and 
format, the following: ‘You are not re-
quired to complete this agreement merely 
because you have received these disclosures 
or signed a loan application.’; and 
‘‘(ii) be furnished to the borrower not 
later than 7 business days before the date 
of consummation of the transaction, sub-
ject to subparagraph (D). 
‘‘(C) 
VARIABLE
RATES
OR
PAYMENT 
SCHEDULES.—In the case of an extension of 
credit that is secured by the dwelling of a con-
sumer, under which the annual rate of interest 
is variable, or with respect to which the regular 
payments may otherwise be variable, in addition 
to the other disclosures required by subsection 
(a), the disclosures provided under this para-
graph shall label the payment schedule as fol-
lows: ‘Payment Schedule: Payments Will Vary 
Based on Interest Rate Changes.’. 
‘‘(D) UPDATING
APR.—In any case in 
which the disclosure statement provided 7 busi-
ness days before the date of consummation of 
the transaction contains an annual percentage 
rate of interest that is no longer accurate, as 
determined under section 107(c), the creditor 
shall furnish an additional, corrected statement 
to the borrower, not later than 3 business days 
before the date of consummation of the trans-
action.’’. 
SEC. 214. DISCLOSURES REQUIRED IN MONTHLY STATE-
MENTS 
FOR 
RESIDENTIAL 
MORTGAGE 
LOANS. 
Section 128 of the Truth in Lending Act (15 U.S.C. 
1638) is amended by adding at the end the following new 
subsection: 
‘‘(e) PERIODIC
STATEMENTS
FOR
RESIDENTIAL 
MORTGAGE LOANS.— 
‘‘(1) IN GENERAL.—The creditor, assignee, or 
servicer with respect to any residential mortgage 
loan shall transmit to the obligor, for each billing 
cycle, a statement setting forth each of the following
items, to the extent applicable, in a conspicuous and 
prominent manner: 
‘‘(A) The amount of the principal obliga-
tion under the mortgage. 
‘‘(B) The current interest rate in effect for 
the loan. 
‘‘(C) The date on which the interest rate 
may next reset or adjust. 
‘‘(D) The amount of any prepayment fee 
to be charged, if any. 
‘‘(E) A description of any late payment 
fees. 
‘‘(F) A telephone number and electronic 
mail address that may be used by the obligor to 
obtain information regarding the mortgage. 
‘‘(G) Such other information as the Board 
may prescribe in regulations. 
‘‘(2) DEVELOPMENT AND USE OF STANDARD 
FORM.—The Federal banking agencies shall jointly 
develop and prescribe a standard form for the disclo-
sure required under this subsection, taking into ac-
count that the statements required may be trans-
mitted in writing or electronically.’’.
‘‘(i) in the case of a credit transaction 
secured— 
‘‘(I) by a first mortgage on the 
consumer’s principal dwelling, the an-
nual percentage rate at consummation 
of the transaction will exceed by more 
than 8 percentage (10 percentage 
points, if the dwelling is personal 
property and the transaction is for 
less than $50,000) points the yield on 
Treasury securities having comparable 
periods of maturity on the 15th day of 
the month immediately preceding the 
month in which the application for the 
extension of credit is received by the 
creditor; or 
‘‘(II) by a subordinate or junior 
mortgage on the consumer’s principal 
dwelling, the annual percentage rate 
at consummation of the transaction 
will exceed by more than 10 percent-
age points the yield on Treasury secu-
rities having comparable periods of 
maturity on the 15th day of the 
month 
immediately 
preceding 
the
month in which the application for the 
extension of credit is received by the 
creditor; 
‘‘(ii) the total points and fees payable 
in connection with the transaction ex-
ceed— 
‘‘(I) in the case of a transaction 
for $20,000 or more, 5 percent of the 
total transaction amount; or 
‘‘(II) in the case of a transaction 
for less than $20,000, the lesser of 8 
percent 
of 
the 
total 
transaction 
amount or $1,000; or 
‘‘(iii) the credit transaction documents 
permit the creditor to charge or collect pre-
payment fees or penalties more than 36 
months after the transaction closing or 
such fees or penalties exceed, in the aggre-
gate, more than 2 percent of the amount 
prepaid. 
‘‘(B) INTRODUCTORY RATES TAKEN INTO 
ACCOUNT.—For 
purposes 
of 
subparagraph 
(A)(i), the annual percentage rate of interest 
shall be determined based on the following in-
terest rate:
‘‘(i) In the case of a fixed-rate trans-
action in which the annual percentage rate 
will not vary during the term of the loan, 
the interest rate in effect on the date of 
consummation of the transaction. 
‘‘(ii) In the case of a transaction in 
which the rate of interest varies solely in 
accordance with an index, the interest rate 
determined by adding the index rate in ef-
fect on the date of consummation of the 
transaction to the maximum margin per-
mitted at any time during the transaction 
agreement. 
‘‘(iii) In the case of any other trans-
action in which the rate may vary at any 
time during the term of the loan for any 
reason, the interest charged on the trans-
action at the maximum rate that may be 
charged during the term of the trans-
action.’’. 
(b) ADJUSTMENT OF PERCENTAGE POINTS.—Section 
103(aa)(2) of the Truth in Lending Act (15 U.S.C. 
1602(aa)(2)) is amended by striking subparagraph (B) 
and inserting the following new subparagraph:
‘‘(B) An increase or decrease under sub-
paragraph (A)— 
‘‘(i) may not result in the number of 
percentage points referred to in paragraph 
(1)(A)(i)(I) being less than 6 percentage 
points or greater than 10 percentage 
points; and 
‘‘(ii) may not result in the number of 
percentage points referred to in paragraph 
(1)(A)(i)(II) being less than 8 percentage 
points or greater than 12 percentage 
points.’’. 
(c) POINTS AND FEES DEFINED.— 
(1) IN
GENERAL.—Section 103(aa)(4) of the 
Truth in Lending Act (15 U.S.C. 1602(aa)(4)) is 
amended— 
(A) by striking subparagraph (B) and in-
serting the following: 
‘‘(B) all compensation paid directly or indi-
rectly by a consumer or creditor to a mortgage 
broker from any source, including a mortgage 
originator that originates a loan in the name of 
the originator in a table-funded transaction;’’; 
(B) in subparagraph (C)(ii), by inserting 
‘‘except where applied to the charges set forth
in section 106(e)(1) where a creditor may re-
ceive indirect compensation solely as a result of 
obtaining distributions of profits from an affili-
ated entity based on its ownership interest in 
compliance with section 8(c)(4) of the Real Es-
tate Settlement Procedures Act of 1974’’ before 
the semicolon at the end; 
(C) in subparagraph (C)(iii), by striking ‘‘; 
and’’ and inserting ‘‘, except as provided for in 
clause (ii);’’; 
(D) by redesignating subparagraph (D) as 
subparagraph (G); and 
(E) by inserting after subparagraph (C) 
the following new subparagraphs: 
‘‘(D) premiums or other charges payable at 
or before closing for any credit life, credit dis-
ability, credit unemployment, or credit property 
insurance, or any other accident, loss-of-income, 
life or health insurance, or any payments di-
rectly or indirectly for any debt cancellation or 
suspension agreement or contract, except that 
insurance premiums or debt cancellation or sus-
pension fees calculated and paid in full on a 
monthly basis shall not be considered financed 
by the creditor;
100 
‘‘(E) except as provided in subsection (cc), 
the maximum prepayment fees and penalties 
which may be charged or collected under the 
terms of the credit transaction; 
‘‘(F) all prepayment fees or penalties that 
are incurred by the consumer if the loan refi-
nances a previous loan made or currently held 
by the same creditor or an affiliate of the cred-
itor; and’’. 
(2) CALCULATION OF POINTS AND FEES FOR 
OPEN-END
CONSUMER
CREDIT
PLANS.—Section 
103(aa) of the Truth in Lending Act (15 U.S.C. 
1602(aa)) is amended— 
(A) by redesignating paragraph (5) as 
paragraph (6); and 
(B) by inserting after paragraph (4) the 
following new paragraph: 
‘‘(5) CALCULATION OF POINTS AND FEES FOR 
OPEN-END CONSUMER CREDIT PLANS.—In the case 
of open-end consumer credit plans, points and fees 
shall be calculated, for purposes of this section and 
section 129, by adding the total points and fees 
known at or before closing, including the maximum 
prepayment penalties which may be charged or col-
lected under the terms of the credit transaction, plus
101 
the minimum additional fees the consumer would be 
required to pay to draw down an amount equal to 
the total credit line.’’. 
(d) HIGH
COST
MORTGAGE
LENDER.—Section 
103(f) of the Truth in Lending Act (15 U.S.C. 1602(f)) 
is amended by striking the last sentence and inserting the 
following new sentence: ‘‘Any person who originates or 
brokers 2 or more mortgages referred to in subsection (aa) 
in any 12-month period, any person who originates 1 or 
more such mortgages through a mortgage broker in any 
12 month period, or, in connection with a table funding 
transaction of such a mortgage, any person to whom the 
obligation is initially assigned at or after settlement shall 
be considered to be a creditor for purposes of this title.’’. 
(e) BONA FIDE DISCOUNT LOAN DISCOUNT POINTS 
AND
PREPAYMENT
PENALTIES.—Section 103 of the 
Truth in Lending Act (15 U.S.C. 1602) is amended by 
inserting after subsection (cc) (as added by section 121) 
the following new subsection: 
‘‘(dd) BONA FIDE DISCOUNT POINTS AND PREPAY-
MENT PENALTIES.—For the purposes of determining the 
amount of points and fees for purposes of subsection (aa), 
either the amounts described in paragraph (1) or (4) of 
the following paragraphs, but not both, may be excluded:
102 
‘‘(1) EXCLUSION
OF
BONA
FIDE
DISCOUNT 
POINTS.—The discount points described in 1 of the 
following subparagraphs shall be excluded from de-
termining the amounts of points and fees with re-
spect to a high-cost mortgage for purposes of sub-
section (aa): 
‘‘(A) Up to and including 2 bona fide dis-
count points payable by the consumer in con-
nection with the mortgage, but only if the inter-
est rate from which the mortgage’s interest rate 
will be discounted does not exceed by more than 
1 percentage point the required net yield for a 
90-day standard mandatory delivery commit-
ment for a reasonably comparable loan from ei-
ther the Federal National Mortgage Association 
or the Federal Home Loan Mortgage Corpora-
tion, whichever is greater. 
‘‘(B) Unless 2 bona fide discount points 
have been excluded under subparagraph (A), up 
to and including 1 bona fide discount point pay-
able by the consumer in connection with the 
mortgage, but only if the interest rate from 
which the mortgage’s interest rate will be dis-
counted does not exceed by more than 2 per-
centage points the required net yield for a 90-
103 
day standard mandatory delivery commitment 
for a reasonably comparable loan from either 
the Federal National Mortgage Association or 
the Federal Home Loan Mortgage Corporation, 
whichever is greater. 
‘‘(2) DEFINITION.—For purposes of paragraph 
(1), the term ‘bona fide discount points’ means loan 
discount points which are knowingly paid by the con-
sumer for the purpose of reducing, and which in fact 
result in a bona fide reduction of, the interest rate 
or time-price differential applicable to the mortgage. 
‘‘(3) EXCEPTION FOR INTEREST RATE REDUC-
TIONS
INCONSISTENT
WITH
INDUSTRY
NORMS.— 
Paragraph (1) shall not apply to discount points 
used to purchase an interest rate reduction unless 
the amount of the interest rate reduction purchased 
is reasonably consistent with established industry 
norms and practices for secondary mortgage market 
transactions. 
‘‘(4) ALLOWANCE OF CONVENTIONAL PREPAY-
MENT PENALTY.—Subsection (aa)(1)(4)(E) shall not 
apply so as to include a prepayment penalty or fee 
that is authorized by law other than this title and 
may be imposed pursuant to the terms of a high-cost
104 
mortgage (or other consumer credit transaction se-
cured by the consumer’s principal dwelling) if— 
‘‘(A) the annual percentage rate applicable 
with respect to such mortgage or transaction 
(as determined for purposes of subsection 
(aa)(1)(A)(i))— 
‘‘(i) in the case of a first mortgage on 
the consumer’s principal dwelling, does not 
exceed by more than 2 percentage points 
the yield on Treasury securities having 
comparable periods of maturity on the 
15th day of the month immediately pre-
ceding the month in which the application 
for the extension of credit is received by 
the creditor; or 
‘‘(ii) in the case of a subordinate or 
junior mortgage on the consumer’s prin-
cipal dwelling, does not exceed by more 
than 4 percentage points the yield on such 
Treasury securities; and 
‘‘(B) the total amount of any prepayment 
fees or penalties permitted under the terms of 
the high-cost mortgage or transaction does not 
exceed 2 percent of the amount prepaid.’’.
108 
SEC. 303. ADDITIONAL REQUIREMENTS FOR CERTAIN 
MORTGAGES. 
(a) ADDITIONAL
REQUIREMENTS
FOR
CERTAIN 
MORTGAGES.—Section 129 of the Truth in Lending Act 
(15 U.S.C. 1639) is amended— 
(1) by redesignating subsections (j), (k) and (l) 
as subsections (n), (o) and (p) respectively; and 
(2) by inserting after subsection (i) the fol-
lowing new subsections: 
‘‘(j) RECOMMENDED DEFAULT.—No creditor shall 
recommend or encourage default on an existing loan or 
other debt prior to and in connection with the closing or 
planned closing of a high-cost mortgage that refinances 
all or any portion of such existing loan or debt. 
‘‘(k) LATE FEES.— 
‘‘(1) IN GENERAL.—No creditor may impose a 
late payment charge or fee in connection with a 
high-cost mortgage— 
‘‘(A) in an amount in excess of 4 percent 
of the amount of the payment past due; 
‘‘(B) unless the loan documents specifically 
authorize the charge or fee; 
‘‘(C) before the end of the 15-day period 
beginning on the date the payment is due, or in 
the case of a loan on which interest on each in-
stallment is paid in advance, before the end of
109 
the 30-day period beginning on the date the 
payment is due; or 
‘‘(D) more than once with respect to a sin-
gle late payment. 
‘‘(2) COORDINATION WITH SUBSEQUENT LATE 
FEES.—If a payment is otherwise a full payment for 
the applicable period and is paid on its due date or 
within an applicable grace period, and the only delin-
quency or insufficiency of payment is attributable to 
any late fee or delinquency charge assessed on any 
earlier payment, no late fee or delinquency charge 
may be imposed on such payment. 
‘‘(3) FAILURE
TO
MAKE
INSTALLMENT
PAY-
MENT.—If, in the case of a loan agreement the 
terms of which provide that any payment shall first 
be applied to any past due principal balance, the 
consumer fails to make an installment payment and 
the consumer subsequently resumes making install-
ment payments but has not paid all past due install-
ments, the creditor may impose a separate late pay-
ment charge or fee for any principal due (without 
deduction due to late fees or related fees) until the 
default is cured. 
‘‘(l) ACCELERATION OF DEBT.—No high-cost mort-
gage may contain a provision which permits the creditor,
110 
in its sole discretion, to accelerate the indebtedness. This 
provision shall not apply when repayment of the loan has 
been accelerated by default, pursuant to a due-on-sale pro-
vision, or pursuant to a material violation of some other 
provision of the loan documents unrelated to the payment 
schedule. 
‘‘(m) RESTRICTION
ON FINANCING POINTS
AND 
FEES.—No creditor may directly or indirectly finance, in 
connection with any high-cost mortgage, any of the fol-
lowing: 
‘‘(1) Any prepayment fee or penalty payable by 
the consumer in a refinancing transaction if the 
creditor or an affiliate of the creditor is the 
noteholder of the note being refinanced. 
‘‘(2) Any points or fees.’’. 
(b) PROHIBITIONS ON EVASIONS.—Section 129 of 
the Truth in Lending Act (15 U.S.C. 1639) is amended 
by inserting after subsection (p) (as so redesignated by 
subsection (a)(1)) the following new subsection: 
‘‘(q) PROHIBITIONS ON EVASIONS, STRUCTURING OF 
TRANSACTIONS, AND RECIPROCAL ARRANGEMENTS.—A 
creditor may not take any action in connection with a 
high-cost mortgage— 
‘‘(1) to structure a loan transaction as an open- 
end credit plan or another form of loan for the pur-
111 
pose and with the intent of evading the provisions of 
this title; or 
‘‘(2) to divide any loan transaction into sepa-
rate parts for the purpose and with the intent of 
evading provisions of this title.’’. 
(c) MODIFICATION
OR DEFERRAL FEES.—Section 
129 of the Truth in Lending Act (15 U.S.C. 1639) is 
amended by inserting after subsection (q) (as added by 
subsection (b) of this section) the following new sub-
section: 
‘‘(r) MODIFICATION AND DEFERRAL FEES PROHIB-
ITED.—A creditor may not charge a consumer any fee to 
modify, renew, extend, or amend a high-cost mortgage, or 
to defer any payment due under the terms of such mort-
gage, unless the modification, renewal, extension or 
amendment results in a lower annual percentage rate on 
the mortgage for the consumer and then only if the 
amount of the fee is comparable to fees imposed for simi-
lar transactions in connection with consumer credit trans-
actions that are secured by a consumer’s principal dwell-
ing and are not high-cost mortgages.’’. 
(d) PAYOFF STATEMENT.—Section 129 of the Truth 
in Lending Act (15 U.S.C. 1639) is amended by inserting 
after subsection (r) (as added by subsection (c) of this 
section) the following new subsection:
112 
‘‘(s) PAYOFF STATEMENT.— 
‘‘(1) FEES.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), no creditor or servicer may 
charge a fee for informing or transmitting to 
any person the balance due to pay off the out-
standing balance on a high-cost mortgage. 
‘‘(B) TRANSACTION FEE.—When payoff in-
formation referred to in subparagraph (A) is 
provided by facsimile transmission or by a cou-
rier service, a creditor or servicer may charge a 
processing fee to cover the cost of such trans-
mission or service in an amount not to exceed 
an amount that is comparable to fees imposed 
for similar services provided in connection with 
consumer credit transactions that are secured 
by the consumer’s principal dwelling and are 
not high-cost mortgages. 
‘‘(C) FEE DISCLOSURE.—Prior to charging 
a transaction fee as provided in subparagraph 
(B), a creditor or servicer shall disclose that 
payoff balances are available for free pursuant 
to subparagraph (A). 
‘‘(D) MULTIPLE REQUESTS.—If a creditor 
or servicer has provided payoff information re-
113 
ferred to in subparagraph (A) without charge, 
other than the transaction fee allowed by sub-
paragraph (B), on 4 occasions during a cal-
endar year, the creditor or servicer may there-
after charge a reasonable fee for providing such 
information during the remainder of the cal-
endar year. 
‘‘(2) PROMPT DELIVERY.—Payoff balances shall 
be provided within 5 business days after receiving a 
request by a consumer or a person authorized by the 
consumer to obtain such information.’’. 
(e) PRE-LOAN COUNSELING REQUIRED.—Section 
129 of the Truth in Lending Act (15 U.S.C. 1639) is 
amended by inserting after subsection (s) (as added by 
subsection (d) of this section) the following new sub-
section: 
‘‘(t) PRE-LOAN COUNSELING.— 
‘‘(1) IN GENERAL.—A creditor may not extend 
credit to a consumer under a high-cost mortgage 
without first receiving certification from a counselor 
that is approved by the Secretary of Housing and 
Urban Development, or at the discretion of the Sec-
retary, a state housing finance authority, that the 
consumer has received counseling on the advisability 
of the mortgage. Such counselor shall not be em-
114 
ployed by the creditor or an affiliate of the creditor 
or be affiliated with the creditor. 
‘‘(2) DISCLOSURES REQUIRED PRIOR TO COUN-
SELING.—No counselor may certify that a consumer 
has received counseling on the advisability of the 
high-cost mortgage unless the counselor can verify 
that the consumer has received each statement re-
quired (in connection with such loan) by this section 
or the Real Estate Settlement Procedures Act of 
1974 with respect to the transaction. 
‘‘(3) REGULATIONS.—The Secretary of Housing 
and Urban Development may prescribe such regula-
tions as the Secretary determines to be appropriate 
to carry out the requirements of paragraph (1).’’. 
(f) FLIPPING PROHIBITED.—Section 129 of the 
Truth in Lending Act (15 U.S.C. 1639) is amended by 
inserting after subsection (t) (as added by subsection (e)) 
the following new subsection: 
‘‘(u) FLIPPING.— 
‘‘(1) IN GENERAL.—No creditor may knowingly 
or intentionally engage in the unfair act or practice 
of flipping in connection with a high-cost mortgage. 
‘‘(2) FLIPPING DEFINED.—For purposes of this 
subsection, the term ‘flipping’ means the making of 
a loan or extension of credit in the form a high-cost
115 
mortgage to a consumer which refinances an existing 
mortgage when the new loan or extension of credit 
does not have reasonable, net tangible benefit (as de-
termined in accordance with regulations prescribed 
under section 129B(b)) to the consumer considering 
all of the circumstances, including the terms of both 
the new and the refinanced loans or credit, the cost 
of the new loan or credit, and the consumer’s cir-
cumstances.’’. 
SEC. 304. AMENDMENT TO PROVISION GOVERNING COR-
RECTION OF ERRORS. 
Section 130(b) of the Truth in Lending Act (15 
U.S.C. 1640(b)) is amended to read as follows: 
‘‘(b) CORRECTION OF ERRORS.—A creditor has no li-
ability under this section or section 108 or 112 for any 
failure to comply with any requirement imposed under this 
chapter or chapter 5, if— 
‘‘(1) within 30 days of the loan closing and 
prior to the institution of any action, the consumer 
is notified of or discovers the violation, appropriate 
restitution is made, and whatever adjustments are 
necessary are made to the loan to either, at the 
choice of the consumer— 
‘‘(A) make the loan satisfy the require-
ments of this chapter; or
116 
‘‘(B) in the case of a high-cost mortgage, 
change the terms of the loan in a manner bene-
ficial to the consumer so that the loan will no 
longer be a high-cost mortgage; or 
‘‘(2) within 60 days of the creditor’s discovery 
or receipt of notification of an unintentional viola-
tion or bona fide error as described in subsection (c) 
and prior to the institution of any action, the con-
sumer is notified of the compliance failure, appro-
priate restitution is made, and whatever adjustments 
are necessary are made to the loan to either, at the 
choice of the consumer— 
‘‘(A) make the loan satisfy the require-
ments of this chapter; or 
‘‘(B) in the case of a high-cost mortgage, 
change the terms of the loan in a manner bene-
ficial so that the loan will no longer be a high- 
cost mortgage.’’. 
SEC. 305. REGULATIONS. 
(a) IN GENERAL.—The Board of Governors of the 
Federal Reserve System shall publish regulations imple-
menting this title and the amendments made by this title 
in final form before the end of the 6-month period begin-
ning on the date of the enactment of this Act. 
(b) CONSUMER MORTGAGE EDUCATION.—
117 
(1) REGULATIONS.—The Board of Governors of 
the Federal Reserve System may prescribe regula-
tions requiring or encouraging creditors to provide 
consumer mortgage education to prospective cus-
tomers or direct such customers to qualified con-
sumer mortgage education or counseling programs 
in the vicinity of the residence of the consumer. 
(2) COORDINATION WITH STATE LAW.—No re-
quirement established by the Board of Governors of 
the Federal Reserve System pursuant to paragraph 
(1) shall be construed as affecting or superseding 
any requirement under the law of any State with re-
spect to consumer mortgage counseling or education. 
SEC. 306. EFFECTIVE DATE. 
The amendments made by this title shall take effect 
at the end of the 6-month period beginning on the date 
of the enactment of this Act and shall apply to mortgages 
referred to in section 103(aa) of the Truth in Lending 
Act (15 U.S.C. 1602(aa)) consummated after the end of 
such period. 
TITLE IV—OFFICE OF HOUSING 
COUNSELING 
SEC. 401. SHORT TITLE. 
This title may be cited as the ‘‘Expand and Preserve 
Home Ownership Through Counseling Act’’.
118 
SEC. 402. ESTABLISHMENT OF OFFICE OF HOUSING COUN-
SELING. 
Section 4 of the Department of Housing and Urban 
Development Act (42 U.S.C. 3533) is amended by adding 
at the end the following new subsection: 
‘‘(g) OFFICE OF HOUSING COUNSELING.— 
‘‘(1) ESTABLISHMENT.—There is established, 
in the Office of the Secretary, the Office of Housing 
Counseling. 
‘‘(2) DIRECTOR.—There is established the posi-
tion of Director of Housing Counseling. The Direc-
tor shall be the head of the Office of Housing Coun-
seling and shall be appointed by the Secretary. Such 
position shall be a career-reserved position in the 
Senior Executive Service. 
‘‘(3) FUNCTIONS.— 
‘‘(A) IN
GENERAL.—The Director shall 
have ultimate responsibility within the Depart-
ment, except for the Secretary, for all activities 
and matters relating to homeownership coun-
seling and rental housing counseling, includ-
ing— 
‘‘(i) research, grant administration, 
public outreach, and policy development re-
lating to such counseling; and
119 
‘‘(ii) establishment, coordination, and 
administration of all regulations, require-
ments, standards, and performance meas-
ures under programs and laws adminis-
tered by the Department that relate to 
housing counseling, homeownership coun-
seling (including maintenance of homes), 
mortgage-related 
counseling 
(including 
home equity conversion mortgages and 
credit protection options to avoid fore-
closure), and rental housing counseling, in-
cluding the requirements, standards, and 
performance measures relating to housing 
counseling. 
‘‘(B) SPECIFIC FUNCTIONS.—The Director 
shall carry out the functions assigned to the Di-
rector and the Office under this section and any 
other provisions of law. Such functions shall in-
clude establishing rules necessary for— 
‘‘(i) the counseling procedures under 
section 106(g)(1) of the Housing and 
Urban Development Act of 1968 (12 
U.S.C. 1701x(h)(1)); 
‘‘(ii) carrying out all other functions 
of the Secretary under section 106(g) of
120 
the Housing and Urban Development Act 
of 1968, including the establishment, oper-
ation, and publication of the availability of 
the toll-free telephone number under para-
graph (2) of such section; 
‘‘(iii) carrying out section 5 of the 
Real Estate Settlement Procedures Act of 
1974 (12 U.S.C. 2604) for home buying 
information booklets prepared pursuant to 
such section; 
‘‘(iv) carrying out the certification 
program under section 106(e) of the Hous-
ing and Urban Development Act of 1968 
(12 U.S.C. 1701x(e)); 
‘‘(v) carrying out the assistance pro-
gram under section 106(a)(4) of the Hous-
ing and Urban Development Act of 1968, 
including criteria for selection of applica-
tions to receive assistance; 
‘‘(vi) carrying out any functions re-
garding abusive, deceptive, or unscrupulous 
lending practices relating to residential 
mortgage loans that the Secretary con-
siders appropriate, which shall include con-
ducting the study under section 6 of the
122 
years. Members may be reappointed at the dis-
cretion of the Secretary. 
‘‘(D) TERMS OF INITIAL APPOINTEES.—As 
designated by the Secretary at the time of ap-
pointment, of the members first appointed to 
the advisory committee, 4 shall be appointed for 
a term of 1 year and 4 shall be appointed for 
a term of 2 years. 
‘‘(E) PROHIBITION OF PAY; TRAVEL EX-
PENSES.—Members of the advisory committee 
shall serve without pay, but shall receive travel 
expenses, including per diem in lieu of subsist-
ence, in accordance with applicable provisions 
under subchapter I of chapter 57 of title 5, 
United States Code. 
‘‘(F) ADVISORY
ROLE
ONLY.—The advi-
sory committee shall have no role in reviewing 
or awarding housing counseling grants. 
‘‘(5) 
SCOPE
OF
HOMEOWNERSHIP
COUN-
SELING.—In carrying out the responsibilities of the 
Director, the Director shall ensure that homeowner-
ship counseling provided by, in connection with, or 
pursuant to any function, activity, or program of the 
Department addresses the entire process of home-
ownership, including the decision to purchase a
123 
home, the selection and purchase of a home, issues 
arising during or affecting the period of ownership 
of a home (including refinancing, default and fore-
closure, and other financial decisions), and the sale 
or other disposition of a home.’’. 
SEC. 403. COUNSELING PROCEDURES. 
(a) IN GENERAL.—Section 106 of the Housing and 
Urban Development Act of 1968 (12 U.S.C. 1701x) is 
amended by adding at the end the following new sub-
section: 
‘‘(g) PROCEDURES AND ACTIVITIES.— 
‘‘(1) COUNSELING PROCEDURES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish, coordinate, and monitor the adminis-
tration by the Department of Housing and 
Urban Development of the counseling proce-
dures for homeownership counseling and rental 
housing counseling provided in connection with 
any program of the Department, including all 
requirements, 
standards, 
and 
performance 
measures that relate to homeownership and 
rental housing counseling. 
‘‘(B) HOMEOWNERSHIP
COUNSELING.— 
For purposes of this subsection and as used in 
the provisions referred to in this subparagraph,
124 
the term ‘homeownership counseling’ means 
counseling related to homeownership and resi-
dential mortgage loans. Such term includes 
counseling related to homeownership and resi-
dential mortgage loans that is provided pursu-
ant to— 
‘‘(i) section 105(a)(20) of the Housing 
and Community Development Act of 1974 
(42 U.S.C. 5305(a)(20)); 
‘‘(ii) in the United States Housing 
Act of 1937— 
‘‘(I) section 9(e) (42 U.S.C. 
1437g(e)); 
‘‘(II) 
section 
8(y)(1)(D) 
(42 
U.S.C. 1437f(y)(1)(D)); 
‘‘(III) section 18(a)(4)(D) (42 
U.S.C. 1437p(a)(4)(D)); 
‘‘(IV) section 23(c)(4) (42 U.S.C. 
1437u(c)(4)); 
‘‘(V) section 32(e)(4) (42 U.S.C. 
1437z–4(e)(4)); 
‘‘(VI) section 33(d)(2)(B) (42 
U.S.C. 1437z–5(d)(2)(B));
125 
‘‘(VII) sections 302(b)(6) and 
303(b)(7) 
(42 
U.S.C. 
1437aaa– 
1(b)(6), 1437aaa–2(b)(7)); and 
‘‘(VIII) section 304(c)(4) (42 
U.S.C. 1437aaa–3(c)(4)); 
‘‘(iii) section 302(a)(4) of the Amer-
ican Homeownership and Economic Oppor-
tunity Act of 2000 (42 U.S.C. 1437f note); 
‘‘(iv) sections 233(b)(2) and 258(b) of 
the Cranston-Gonzalez National Affordable 
Housing Act (42 U.S.C. 12773(b)(2), 
12808(b)); 
‘‘(v) this section and section 101(e) of 
the Housing and Urban Development Act 
of 1968 (12 U.S.C. 1701x, 1701w(e)); 
‘‘(vi) section 220(d)(2)(G) of the Low- 
Income Housing Preservation and Resident 
Homeownership Act of 1990 (12 U.S.C. 
4110(d)(2)(G)); 
‘‘(vii) sections 422(b)(6), 423(b)(7), 
424(c)(4), 442(b)(6), and 443(b)(6) of the 
Cranston-Gonzalez 
National 
Affordable 
Housing Act (42 U.S.C. 12872(b)(6), 
12873(b)(7), 
12874(c)(4), 
12892(b)(6), 
and 12893(b)(6));
126 
‘‘(viii) section 491(b)(1)(F)(iii) of the 
McKinney-Vento Homeless Assistance Act 
(42 U.S.C. 11408(b)(1)(F)(iii)); 
‘‘(ix) 
sections 
202(3) 
and 
810(b)(2)(A) of the Native American 
Housing and Self-Determination Act of 
1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); 
‘‘(x) in the National Housing Act— 
‘‘(I) in section 203 (12 U.S.C. 
1709), the penultimate undesignated 
paragraph of paragraph (2) of sub-
section (b), subsection (c)(2)(A), and 
subsection (r)(4); 
‘‘(II) subsections (a) and (c)(3) 
of section 237 (12 U.S.C. 1715z–2); 
and 
‘‘(III) subsections (d)(2)(B) and 
(m)(1) of section 255 (12 U.S.C. 
1715z–20); 
‘‘(xi) section 502(h)(4)(B) of the 
Housing 
Act 
of 
1949 
(42 
U.S.C. 
1472(h)(4)(B)); and 
‘‘(xii) section 508 of the Housing and 
Urban Development Act of 1970 (12 
U.S.C. 1701z–7).
127 
‘‘(C) RENTAL
HOUSING
COUNSELING.— 
For purposes of this subsection, the term ‘rent-
al housing counseling’ means counseling related 
to rental of residential property, which may in-
clude counseling regarding future homeowner-
ship opportunities and providing referrals for 
renters and prospective renters to entities pro-
viding counseling and shall include counseling 
related to such topics that is provided pursuant 
to— 
‘‘(i) section 105(a)(20) of the Housing 
and Community Development Act of 1974 
(42 U.S.C. 5305(a)(20)); 
‘‘(ii) in the United States Housing 
Act of 1937— 
‘‘(I) section 9(e) (42 U.S.C. 
1437g(e)); 
‘‘(II) section 18(a)(4)(D) (42 
U.S.C. 1437p(a)(4)(D)); 
‘‘(III) 
section 
23(c)(4) 
(42 
U.S.C. 1437u(c)(4)); 
‘‘(IV) section 32(e)(4) (42 U.S.C. 
1437z–4(e)(4)); 
‘‘(V) section 33(d)(2)(B) (42 
U.S.C. 1437z–5(d)(2)(B)); and
128 
‘‘(VI) 
section 
302(b)(6) 
(42 
U.S.C. 1437aaa–1(b)(6)); 
‘‘(iii) section 233(b)(2) of the Cran-
ston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12773(b)(2)); 
‘‘(iv) section 106 of the Housing and 
Urban Development Act of 1968 (12 
U.S.C. 1701x); 
‘‘(v) section 422(b)(6) of the Cran-
ston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12872(b)(6)); 
‘‘(vi) section 491(b)(1)(F)(iii) of the 
McKinney-Vento Homeless Assistance Act 
(42 U.S.C. 11408(b)(1)(F)(iii)); 
‘‘(vii) 
sections 
202(3) 
and 
810(b)(2)(A) of the Native American 
Housing and Self-Determination Act of 
1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); 
and 
‘‘(viii) the rental assistance program 
under section 8 of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437f). 
‘‘(2) STANDARDS FOR MATERIALS.—The Sec-
retary, in conjunction with the advisory committee 
established under subsection (g)(4) of the Depart-
129 
ment of Housing and Urban Development Act, shall 
establish standards for materials and forms to be 
used, as appropriate, by organizations providing 
homeownership counseling services, including any re-
cipients of assistance pursuant to subsection (a)(4). 
‘‘(3) MORTGAGE SOFTWARE SYSTEMS.— 
‘‘(A) CERTIFICATION.—The Secretary shall 
provide for the certification of various computer 
software programs for consumers to use in eval-
uating different residential mortgage loan pro-
posals. The Secretary shall require, for such 
certification, that the mortgage software sys-
tems take into account— 
‘‘(i) the consumer’s financial situation 
and the cost of maintaining a home, in-
cluding insurance, taxes, and utilities; 
‘‘(ii) the amount of time the consumer 
expects to remain in the home or expected 
time to maturity of the loan; 
‘‘(iii) such other factors as the Sec-
retary considers appropriate to assist the 
consumer in evaluating whether to pay 
points, to lock in an interest rate, to select 
an adjustable or fixed rate loan, to select 
a conventional or government-insured or
130 
guaranteed loan and to make other choices 
during the loan application process. 
If the Secretary determines that available exist-
ing software is inadequate to assist consumers 
during the residential mortgage loan application 
process, the Secretary shall arrange for the de-
velopment by private sector software companies 
of new mortgage software systems that meet 
the Secretary’s specifications. 
‘‘(B) USE
AND
INITIAL
AVAILABILITY.— 
Such certified computer software programs 
shall be used to supplement, not replace, hous-
ing counseling. The Secretary shall provide that 
such programs are initially used only in connec-
tion with the assistance of housing counselors 
certified pursuant to subsection (e). 
‘‘(C) AVAILABILITY.—After a period of ini-
tial availability under subparagraph (B) as the 
Secretary considers appropriate, the Secretary 
shall take reasonable steps to make mortgage 
software systems certified pursuant to this 
paragraph widely available through the Internet 
and at public locations, including public librar-
ies, senior-citizen centers, public housing sites, 
offices of public housing agencies that admin-
131 
ister rental housing assistance vouchers, and 
housing counseling centers. 
‘‘(4) NATIONAL PUBLIC SERVICE MULTIMEDIA 
CAMPAIGNS TO PROMOTE HOUSING COUNSELING.— 
‘‘(A) IN GENERAL.—The Director of Hous-
ing Counseling shall develop, implement, and 
conduct national public service multimedia cam-
paigns designed to make persons facing mort-
gage 
foreclosure, 
persons 
considering 
a 
subprime mortgage loan to purchase a home, el-
derly persons, persons who face language bar-
riers, low-income persons, and other potentially 
vulnerable consumers aware that it is advisable, 
before seeking or maintaining a residential 
mortgage loan, to obtain homeownership coun-
seling from an unbiased and reliable sources 
and that such homeownership counseling is 
available, including through programs spon-
sored by the Secretary of Housing and Urban 
Development. 
‘‘(B) CONTACT INFORMATION.—Each seg-
ment of the multimedia campaign under sub-
paragraph (A) shall publicize the toll-free tele-
phone number and web site of the Department 
of Housing and Urban Development through
132 
which persons seeking housing counseling can 
locate a housing counseling agency in their 
State that is certified by the Secretary of Hous-
ing and Urban Development and can provide 
advice on buying a home, renting, defaults, 
foreclosures, credit issues, and reverse mort-
gages. 
‘‘(C) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There are authorized to be appro-
priated to the Secretary, not to exceed 
$3,000,000 for fiscal years 2008, 2009, and 
2010, for the develop, implement, and conduct 
of national public service multimedia campaigns 
under this paragraph. 
‘‘(5) EDUCATION
PROGRAMS.—The Secretary 
shall provide advice and technical assistance to 
States, units of general local government, and non-
profit organizations regarding the establishment and 
operation of, including assistance with the develop-
ment of content and materials for, educational pro-
grams to inform and educate consumers, particularly 
those most vulnerable with respect to residential 
mortgage loans (such as elderly persons, persons 
facing language barriers, low-income persons, and 
other potentially vulnerable consumers), regarding
133 
home mortgages, mortgage refinancing, home equity 
loans, and home repair loans.’’. 
(b) CONFORMING AMENDMENTS
TO GRANT PRO-
GRAM
FOR HOMEOWNERSHIP COUNSELING ORGANIZA-
TIONS.—Section 106(c)(5)(A)(ii) of the Housing and 
Urban 
Development 
Act 
of 
1968 
(12 
U.S.C. 
1701x(c)(5)(A)(ii)) is amended— 
(1) in subclause (III), by striking ‘‘and’’ at the 
end; 
(2) in subclause (IV) by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by inserting after subclause (IV) the fol-
lowing new subclause: 
‘‘(V) notify the housing or mort-
gage applicant of the availability of 
mortgage software systems provided 
pursuant to subsection (g)(3).’’. 
SEC. 404. GRANTS FOR HOUSING COUNSELING ASSIST-
ANCE. 
Section 106(a) of the Housing and Urban Develop-
ment Act of 1968 (12 U.S.C. 1701x(a)(3)) is amended 
by adding at the end the following new paragraph: 
‘‘(4) HOMEOWNERSHIP AND RENTAL COUNSELING 
ASSISTANCE.—
136 
demonstrate, and, for certification of an indi-
vidual,’’; 
(3) in paragraph (3), by inserting ‘‘organiza-
tions and’’ before ‘‘individuals’’; 
(4) by redesignating paragraph (3) as para-
graph (5); and 
(5) by inserting after paragraph (2) the fol-
lowing new paragraphs: 
‘‘(3) REQUIREMENT UNDER HUD PROGRAMS.— 
Any homeownership counseling or rental housing 
counseling (as such terms are defined in subsection 
(g)(1)) required under, or provided in connection 
with, any program administered by the Department 
of Housing and Urban Development shall be pro-
vided only by organizations or counselors certified by 
the Secretary under this subsection as competent to 
provide such counseling. 
‘‘(4) OUTREACH.—The Secretary shall take 
such actions as the Secretary considers appropriate 
to ensure that individuals and organizations pro-
viding homeownership or rental housing counseling 
are aware of the certification requirements and 
standards of this subsection and of the training and 
certification programs under subsection (f).’’.
137 
SEC. 406. STUDY OF DEFAULTS AND FORECLOSURES. 
The Secretary of Housing and Urban Development 
shall conduct an extensive study of the root causes of de-
fault and foreclosure of home loans, using as much empir-
ical data as are available. The study shall also examine 
the role of escrow accounts in helping prime and nonprime 
borrowers to avoid defaults and foreclosures. Not later 
than 12 months after the date of the enactment of this 
Act, the Secretary shall submit to the Congress a prelimi-
nary report regarding the study. Not later than 24 months 
after such date of enactment, the Secretary shall submit 
a final report regarding the results of the study, which 
shall include any recommended legislation relating to the 
study, and recommendations for best practices and for a 
process to identify populations that need counseling the 
most. 
SEC. 407. DEFINITIONS FOR COUNSELING-RELATED PRO-
GRAMS. 
Section 106 of the Housing and Urban Development 
Act of 1968 (12 U.S.C. 1701x), as amended by the pre-
ceding provisions of this title, is further amended by add-
ing at the end the following new subsection: 
‘‘(h) DEFINITIONS.—For purposes of this section: 
‘‘(1) NONPROFIT
ORGANIZATION.—The term 
‘nonprofit organization’ has the meaning given such 
term in section 104(5) of the Cranston-Gonzalez Na-
138 
tional 
Affordable 
Housing 
Act 
(42 
U.S.C. 
12704(5)), except that subparagraph (D) of such 
section shall not apply for purposes of this section. 
‘‘(2) STATE.—The term ‘State’ means each of 
the several States, the Commonwealth of Puerto 
Rico, the District of Columbia, the Commonwealth 
of the Northern Mariana Islands, Guam, the Virgin 
Islands, American Samoa, the Trust Territories of 
the Pacific, or any other possession of the United 
States. 
‘‘(3) UNIT
OF
GENERAL
LOCAL
GOVERN-
MENT.—The term ‘unit of general local government’ 
means any city, county, parish, town, township, bor-
ough, village, or other general purpose political sub-
division of a State.’’. 
SEC. 408. UPDATING AND SIMPLIFICATION OF MORTGAGE 
INFORMATION BOOKLET. 
Section 5 of the Real Estate Settlement Procedures 
Act of 1974 (12 U.S.C. 2604) is amended— 
(1) in the section heading, by striking ‘‘SPE-
CIAL’’ and inserting ‘‘HOME BUYING’’; 
(2) by striking subsections (a) and (b) and in-
serting the following new subsections: 
‘‘(a) PREPARATION AND DISTRIBUTION.—The Sec-
retary shall prepare, at least once every 5 years, a booklet
139 
to help consumers applying for federally related mortgage 
loans to understand the nature and costs of real estate 
settlement services. The Secretary shall prepare the book-
let in various languages and cultural styles, as the Sec-
retary determines to be appropriate, so that the booklet 
is understandable and accessible to homebuyers of dif-
ferent ethnic and cultural backgrounds. The Secretary 
shall distribute such booklets to all lenders that make fed-
erally related mortgage loans. The Secretary shall also dis-
tribute to such lenders lists, organized by location, of 
homeownership counselors certified under section 106(e) 
of the Housing and Urban Development Act of 1968 (12 
U.S.C. 1701x(e)) for use in complying with the require-
ment under subsection (c) of this section. 
‘‘(b) CONTENTS.—Each booklet shall be in such form 
and detail as the Secretary shall prescribe and, in addition 
to such other information as the Secretary may provide, 
shall include in plain and understandable language the fol-
lowing information: 
‘‘(1) A description and explanation of the na-
ture and purpose of the costs incident to a real es-
tate settlement or a federally related mortgage loan. 
The description and explanation shall provide gen-
eral information about the mortgage process as well 
as specific information concerning, at a minimum—
140 
‘‘(A) balloon payments; 
‘‘(B) prepayment penalties; and 
‘‘(C) the trade-off between closing costs 
and the interest rate over the life of the loan. 
‘‘(2) An explanation and sample of the uniform 
settlement statement required by section 4. 
‘‘(3) A list and explanation of lending practices, 
including those prohibited by the Truth in Lending 
Act or other applicable Federal law, and of other un-
fair practices and unreasonable or unnecessary 
charges to be avoided by the prospective buyer with 
respect to a real estate settlement. 
‘‘(4) A list and explanation of questions a con-
sumer obtaining a federally related mortgage loan 
should ask regarding the loan, including whether the 
consumer will have the ability to repay the loan, 
whether the consumer sufficiently shopped for the 
loan, whether the loan terms include prepayment 
penalties or balloon payments, and whether the loan 
will benefit the borrower. 
‘‘(5) An explanation of the right of rescission as 
to certain transactions provided by sections 125 and 
129 of the Truth in Lending Act. 
‘‘(6) A brief explanation of the nature of a vari-
able rate mortgage and a reference to the booklet
141 
entitled ‘Consumer Handbook on Adjustable Rate 
Mortgages’, published by the Board of Governors of 
the Federal Reserve System pursuant to section 
226.19(b)(1) of title 12, Code of Federal Regula-
tions, or to any suitable substitute of such booklet 
that such Board of Governors may subsequently 
adopt pursuant to such section. 
‘‘(7) A brief explanation of the nature of a 
home equity line of credit and a reference to the 
pamphlet required to be provided under section 
127A of the Truth in Lending Act. 
‘‘(8) Information about homeownership coun-
seling services made available pursuant to section 
106(a)(4) of the Housing and Urban Development 
Act of 1968 (12 U.S.C. 1701x(a)(4)), a rec-
ommendation that the consumer use such services, 
and notification that a list of certified providers of 
homeownership counseling in the area, and their 
contact information, is available. 
‘‘(9) An explanation of the nature and purpose 
of escrow accounts when used in connection with 
loans secured by residential real estate and the re-
quirements under section 10 of this Act regarding 
such accounts.
142 
‘‘(10) An explanation of the choices available to 
buyers of residential real estate in selecting persons 
to provide necessary services incidental to a real es-
tate settlement. 
‘‘(11) An explanation of a consumer’s respon-
sibilities, liabilities, and obligations in a mortgage 
transaction. 
‘‘(12) An explanation of the nature and purpose 
of real estate appraisals, including the difference be-
tween an appraisal and a home inspection. 
‘‘(13) Notice that the Office of Housing of the 
Department of Housing and Urban Development has 
made publicly available a brochure regarding loan 
fraud and a World Wide Web address and toll-free 
telephone number for obtaining the brochure. 
The booklet prepared pursuant to this section shall take 
into consideration differences in real estate settlement pro-
cedures that may exist among the several States and terri-
tories of the United States and among separate political 
subdivisions within the same State and territory.’’; 
(3) in subsection (c), by inserting at the end 
the following new sentence: ‘‘Each lender shall also 
include with the booklet a reasonably complete or 
updated list of homeownership counselors who are 
certified pursuant to section 106(e) of the Housing
143 
and Urban Development Act of 1968 (12 U.S.C. 
1701x(e)) and located in the area of the lender.’’; 
and 
(4) in subsection (d), by inserting after the pe-
riod at the end of the first sentence the following: 
‘‘The lender shall provide the HUD-issued booklet in 
the version that is most appropriate for the person 
receiving it.’’. 
TITLE 
V—MORTGAGE 
DISCLO-
SURES UNDER REAL ESTATE 
SETTLEMENT 
PROCEDURES 
ACT OF 1974 
SEC. 501. UNIVERSAL MORTGAGE DISCLOSURE IN GOOD 
FAITH ESTIMATE OF SETTLEMENT SERVICES 
COSTS. 
(a) IN GENERAL.—Section 5 of the Real Estate Set-
tlement Procedures Act of 1974 (12 U.S.C. 2604) is 
amended— 
(1) in subsection (c), by adding after the period 
at the end the following: ‘‘Each such good faith esti-
mate shall include the disclosure required under sub-
section (f) in the form prescribed by the Secretary 
pursuant to such subsection, except that if the Sec-
retary at any time issues any regulations requiring 
the use of a standard or uniform form or statement
144 
in providing the good faith estimate required under 
this subsection and prescribing such standard or 
uniform form or statement, such disclosure shall not 
be required after the effective date of such regula-
tions.’’; and 
(2) by adding at the end the following new sub-
section: 
‘‘(f) UNIVERSAL MORTGAGE DISCLOSURE REQUIRE-
MENT FOR GOOD FAITH ESTIMATES.— 
‘‘(1) DISCLOSURE.—The disclosure required 
under this subsection is a written statement regard-
ing the federally related mortgage loan for which the 
good faith estimate under subsection (c) is made, 
that consists of the following statements, appro-
priately and in good faith completed by the lender 
in accordance with the terms of the federally related 
mortgage loan involved in the settlement: 
‘‘(A) ‘Your Loan Amount will be’ and 
‘$llll’, each statement appearing in a 
separate column of the disclosure. 
‘‘(B) ‘Your Loan is’, ‘A Fixed Rate Loan’, 
and ‘An Adjustable Rate Loan ’, each state-
ment appearing in a separate column and each 
of the last two such statements preceded by a 
checkbox.
145 
‘‘(C) ‘Your Loan Term is’, ‘lll years’, 
and ‘lll years’, each statement appearing 
in a separate column, and the second such 
statement shall appear in the same column as 
the statement required by subparagraph (B) re-
garding fixed rate loans and the third such 
statement shall appear in the same column as 
the statement required by subparagraph (B) re-
garding adjustable rate loans; 
‘‘(D) ‘Your Estimated Interest Rate (APR) 
is’, ‘lll%’, and ‘lll% initially, then it 
will adjust. In lll months, Your rate may 
adjust to a maximum of lll%’, each state-
ment appearing in a separate column, the sec-
ond such statement shall appear in the same 
column as the statement required by subpara-
graph (B) regarding fixed rate loans and the 
third such statement shall appear in the same 
column as the statement required by subpara-
graph (B) regarding adjustable rate loans, and 
the blanks relating to estimated interest rate 
shall be completed by the lender using an an-
nual percentage rate determined in accordance 
with the Truth in Lending Act.
146 
‘‘(E) ‘Your Total Estimated Monthly Pay-
ment (Including loan Principal and Interest, 
and property Taxes (based on current rates) 
and Insurance (PITI)) is’, ‘$llll which 
represents lll% of Your estimated monthly 
income’, and ‘$llll which represents 
lll% of Your estimated monthly income. 
When Your interest rate initially adjusts, Your 
maximum monthly payment may be as high as 
$llll which represents lll% of Your 
estimated monthly income’, each statement ap-
pearing in a separate column, and the second 
such statement shall appear in the same column 
as the statement required by subparagraph (B) 
regarding fixed rate loans and the third such 
statement shall appear in the same column as 
the statement required by subparagraph (B) re-
garding adjustable rate loans. 
‘‘(F) ‘Your Rate Lock Period is’ and 
‘lll days. After You lock into Your inter-
est rate, You must go to settlement within this 
number of days to be guaranteed this interest 
rate.’, each statement appearing in a separate 
column.
147 
‘‘(G) ‘Does Your loan have a prepayment 
penalty?’, ‘YES, Your maximum prepayment 
penalty is $llll’, and ‘NO’, the first such 
statement and the last two such statements ap-
pearing in a separate column, and each of the 
last two such statements preceded by a 
checkbox. 
‘‘(H) ‘Does Your loan have a balloon pay-
ment?’, 
‘YES, 
Your 
balloon 
payment 
of 
$llll is due in lll months’, and ‘NO’, 
the first such statement and the last two such 
statements appearing in a separate column, and 
each of the last two such statements preceded 
by a checkbox. 
‘‘(I) ‘Your Total Estimated Settlement 
Charges Will be $llll (a)’ and ‘Your 
Total Estimated Down Payment will be 
$llll (b)’, each statement appearing in a 
separate column. 
‘‘(J) ‘Your Total Estimated Cash Needed 
at Closing Will Be’ and ‘$llll (a+b)’, 
each statement appearing in a separate column. 
‘‘(K) ‘This represents a simple summary of 
Your Good Faith Estimate (GFE). To under-
stand the terms of Your loan, You must see dis-
148 
closure forms and the Truth in Lending Act.’, 
such statement appearing directly below the en-
tirety of the remainder of the disclosure. 
‘‘(2) STANDARD FORM.— 
‘‘(A) DEVELOPMENT AND USE.—The Sec-
retary, in consultation with the Secretary of 
Veterans Affairs, the Federal Deposit Insurance 
Corporation, and the Director of the Office of 
Thrift Supervision, shall develop and prescribe 
a standard form for the disclosure required 
under this subsection, which shall be used with-
out variation in all transactions in the United 
States that involve federally related mortgage 
loans. 
‘‘(B) APPEARANCE.—The standard form 
developed pursuant to this paragraph shall— 
‘‘(i) set forth each statement required 
under a separate subparagraph under 
paragraph (1) on a separate row of the 
disclosure; 
‘‘(ii) be set forth in 8-point type; 
‘‘(iii) be not more than 6 inches in 
width or 3.5 inches in height;
149 
‘‘(iv) include such boldface type and 
shading as the Secretary considers appro-
priate; 
‘‘(v) include such parenthetical state-
ments directing the borrower to the terms 
of the loan (such as ‘see terms’) as the 
Secretary considers appropriate, in such 
places as the Secretary considers appro-
priate; and 
‘‘(vi) be located in the upper one-third 
of the first page of the good faith estimate 
required under subsection (c) in a manner 
that allows the identity, address, phone 
number, and other relevant information of 
the lender, the identity, address, phone 
number, and other relevant information of 
the borrower, and the address of the prop-
erty for which the federally related mort-
gage loan is to be made, to be located 
above the standard form.’’. 
(b) REGULATIONS.—The Secretary of Housing and 
Urban Development shall issue regulations prescribing the 
standard form and the use of such form, as required by 
the amendment made by subsection (a), not later than the 
expiration of the 180-day period beginning upon the date
150 
of the enactment of this Act, and such regulations shall 
take effect upon issuance. 
TITLE VI—MORTGAGE 
SERVICING 
SEC. 601. ESCROW AND IMPOUND ACCOUNTS RELATING TO 
CERTAIN 
CONSUMER 
CREDIT 
TRANS-
ACTIONS. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by inserting 
after section 129B (as added by section 201) the following 
new section: 
‘‘SEC. 129C. ESCROW OR IMPOUND ACCOUNTS RELATING 
TO 
CERTAIN 
CONSUMER 
CREDIT 
TRANS-
ACTIONS. 
‘‘(a) IN GENERAL.—Except as provided in subsection 
(b) or (c), a creditor, in connection with the formation or 
consummation of a consumer credit transaction secured 
by a first lien on the principal dwelling of the consumer, 
other than a consumer credit transaction under an open 
end credit plan or a reverse mortgage, shall establish, at 
the time of the consummation of such transaction, an es-
crow or impound account for the payment of taxes and 
hazard insurance, and, if applicable, flood insurance, 
mortgage insurance, ground rents, and any other required 
periodic payments or premiums with respect to the prop-
151 
erty or the loan terms, as provided in, and in accordance 
with, this section. 
‘‘(b) WHEN REQUIRED.—No impound, trust, or other 
type of account for the payment of property taxes, insur-
ance premiums, or other purposes relating to the property 
may be required as a condition of a real property sale con-
tract or a loan secured by a first deed of trust or mortgage 
on the principal dwelling of the consumer, other than a 
consumer credit transaction under an open end credit plan 
or a reverse mortgage, except when— 
‘‘(1) any such impound, trust, or other type of 
escrow or impound account for such purposes is re-
quired by Federal or State law; 
‘‘(2) a loan is made, guaranteed, or insured by 
a State or Federal governmental lending or insuring 
agency; 
‘‘(3) the consumer’s debt-to-income ratio at the 
time the home mortgage is established taking into 
account income from all sources including the con-
sumer’s employment exceeds 50 percent; 
‘‘(4) the transaction is secured by a first mort-
gage or lien on the consumer’s principal dwelling 
and the annual percentage rate on the credit, at the 
time of consummation of the transaction, will exceed 
by more than 3.0 percentage points the yield on
152 
Treasury securities having comparable periods of 
maturity on the 15th day of the month immediately 
preceding the month in which the application of the 
extension of credit is received by the creditor; 
‘‘(5) a consumer obtains a mortgage referred to 
in section 103(aa); 
‘‘(6) the original principal amount of such loan 
at the time of consummation of the transaction is— 
‘‘(A) 90 percent or more of the sale price, 
if the property involved is purchased with the 
proceeds of the loan; or 
‘‘(B) 90 percent or more of the appraised 
value of the property securing the loan; 
‘‘(7) the combined principal amount of all loans 
secured by the real property exceeds 95 percent of 
the appraised value of the property securing the 
loans at the time of consummation of the last mort-
gage transaction; 
‘‘(8) the consumer was the subject of a pro-
ceeding under title 11, United States Code, at any 
time during the 7-year period preceding the date of 
the transaction (as determined on the basis of the 
date of entry of the order for relief or the date of 
adjudication, as the case may be, with respect to 
such proceeding and included in a consumer report
153 
on the consumer under the Fair Credit Reporting 
Act) ; or 
‘‘(9) so required by the Board pursuant to reg-
ulation. 
‘‘(c) DURATION OF MANDATORY ESCROW OR IM-
POUND ACCOUNT.—An escrow or impound account estab-
lished pursuant to subsection (b), shall remain in existence 
for a minimum period of 5 years and until such borrower 
has sufficient equity in the dwelling securing the consumer 
credit transaction so as to no longer be required to main-
tain private mortgage insurance, or such other period as 
may be provided in regulations to address situations such 
as borrower delinquency, unless the underlying mortgage 
establishing the account is terminated. 
‘‘(d) CLARIFICATION
ON ESCROW ACCOUNTS
FOR 
LOANS NOT MEETING STATUTORY TEST.—For mort-
gages not covered by the requirements of subsection (b), 
no provision of this section shall be construed as pre-
cluding the establishment of an impound, trust, or other 
type of account for the payment of property taxes, insur-
ance premiums, or other purposes relating to the prop-
erty— 
‘‘(1) on terms mutually agreeable to the parties 
to the loan;
154 
‘‘(2) at the discretion of the lender or servicer, 
as provided by the contract between the lender or 
servicer and the borrower; or 
‘‘(3) pursuant to the requirements for the 
escrowing of flood insurance payments for regulated 
lending institutions in section 102(d) of the Flood 
Disaster Protection Act of 1973. 
‘‘(e) ADMINISTRATION OF MANDATORY ESCROW OR 
IMPOUND ACCOUNTS.— 
‘‘(1) IN GENERAL.—Except as may otherwise 
be provided for in this title or in regulations pre-
scribed by the Board, escrow or impound accounts 
established pursuant to subsection (b) shall be estab-
lished in a federally insured depository institution. 
‘‘(2) ADMINISTRATION.—Except as provided in 
this section or regulations prescribed under this sec-
tion, an escrow or impound account subject to this 
section shall be administered in accordance with— 
‘‘(A) the Real Estate Settlement Proce-
dures Act of 1974 and regulations prescribed 
under such Act; 
‘‘(B) the Flood Disaster Protection Act of 
1973 and regulations prescribed under such 
Act; and
155 
‘‘(C) the law of the State, if applicable, 
where the real property securing the consumer 
credit transaction is located. 
‘‘(3) APPLICABILITY OF PAYMENT OF INTER-
EST.—If prescribed by applicable State or Federal 
law, each creditor shall pay interest to the consumer 
on the amount held in any impound, trust, or escrow 
account that is subject to this section in the manner 
as prescribed by that applicable State or Federal 
law. 
‘‘(4) PENALTY COORDINATION WITH RESPA.— 
Any action or omission on the part of any person 
which constitutes a violation of the Real Estate Set-
tlement Procedures Act of 1974 or any regulation 
prescribed under such Act for which the person has 
paid any fine, civil money penalty, or other damages 
shall not give rise to any additional fine, civil money 
penalty, or other damages under this section, unless 
the action or omission also constitutes a direct viola-
tion of this section. 
‘‘(f) DISCLOSURES RELATING TO MANDATORY ES-
CROW OR IMPOUND ACCOUNT.—In the case of any im-
pound, trust, or escrow account that is subject to this sec-
tion, the creditor shall disclose by written notice to the 
consumer at least 3 business days before the consumma-
156 
tion of the consumer credit transaction giving rise to such 
account or in accordance with timeframes established in 
prescribed regulations the following information: 
‘‘(1) The fact that an escrow or impound ac-
count will be established at consummation of the 
transaction. 
‘‘(2) The amount required at closing to initially 
fund the escrow or impound account. 
‘‘(3) The amount, in the initial year after the 
consummation of the transaction, of the estimated 
taxes and hazard insurance, including flood insur-
ance, if applicable, and any other required periodic 
payments or premiums that reflects, as appropriate, 
either the taxable assessed value of the real property 
securing the transaction, including the value of any 
improvements on the property or to be constructed 
on the property (whether or not such construction 
will be financed from the proceeds of the trans-
action) or the replacement costs of the property. 
‘‘(4) The estimated monthly amount payable to 
be escrowed for taxes, hazard insurance (including 
flood insurance, if applicable) and any other re-
quired periodic payments or premiums. 
‘‘(5) The fact that, if the consumer chooses to 
terminate the account at the appropriate time in the
157 
future, the consumer will become responsible for the 
payment of all taxes, hazard insurance, and flood in-
surance, if applicable, as well as any other required 
periodic payments or premiums on the property un-
less a new escrow or impound account is established. 
‘‘(g) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
‘‘(1) FLOOD INSURANCE.—The term ‘flood in-
surance’ means flood insurance coverage provided 
under the national flood insurance program pursu-
ant to the National Flood Insurance Act of 1968. 
‘‘(2) HAZARD INSURANCE.—The term ‘hazard 
insurance’ shall have the same meaning as provided 
for ‘hazard insurance’, ‘casualty insurance’, ‘home-
owner’s insurance’, or other similar term under the 
law of the State where the real property securing the 
consumer credit transaction is located.’’. 
(b) IMPLEMENTATION.— 
(1) REGULATIONS.—The Board of Governors of 
the Federal Reserve System, the Comptroller of the 
Currency, the Director of the Office of Thrift Super-
vision, the Federal Deposit Insurance Corporation, 
the National Credit Union Administration Board, 
(hereafter in this Act referred to as the ‘‘Federal 
banking agencies’’) and the Federal Trade Commis-
158 
sion shall prescribe, in final form, such regulations 
as determined to be necessary to implement the 
amendments made by subsection (a) before the end 
of the 180-day period beginning on the date of the 
enactment of this Act. 
(2) EFFECTIVE DATE.—The amendments made 
by subsection (a) shall only apply to covered mort-
gage loans consummated after the end of the 1-year 
period beginning on the date of the publication of 
final regulations in the Federal Register. 
(c) CLERICAL AMENDMENT.—The table of sections 
for chapter 2 of the Truth in Lending Act is amended 
by inserting after the item relating to section 129B (as 
added by section 201) the following new item: 
‘‘129C. Escrow or impound accounts relating to certain consumer credit trans-
actions.’’. 
SEC. 602. DISCLOSURE NOTICE REQUIRED FOR CON-
SUMERS WHO WAIVE ESCROW SERVICES. 
(a) IN GENERAL.—Section 129C of the Truth in 
Lending Act (as added by section 601) is amended by add-
ing at the end the following new subsection: 
‘‘(h) DISCLOSURE NOTICE REQUIRED
FOR CON-
SUMERS WHO WAIVE ESCROW SERVICES.— 
‘‘(1) IN GENERAL.—If— 
‘‘(A) an impound, trust, or other type of 
account for the payment of property taxes, in-
159 
surance premiums, or other purposes relating to 
real property securing a consumer credit trans-
action is not established in connection with the 
transaction; or 
‘‘(B) a consumer chooses, at any time after 
such an account is established in connection 
with any such transaction and in accordance 
with any statute, regulation, or contractual 
agreement, to close such account, 
the creditor or servicer shall provide a timely and 
clearly written disclosure to the consumer that ad-
vises the consumer of the responsibilities of the con-
sumer and implications for the consumer in the ab-
sence of any such account. 
‘‘(2) DISCLOSURE
REQUIREMENTS.—Any dis-
closure provided to a consumer under paragraph (1) 
shall include the following: 
‘‘(A) Information concerning any applica-
ble fees or costs associated with either the non- 
establishment of any such account at the time 
of the transaction, or any subsequent closure of 
any such account. 
‘‘(B) A clear and prominent notice that the 
consumer is responsible for personally and di-
rectly paying the non-escrowed items, in addi-
160 
tion to paying the mortgage loan payment, in 
the absence of any such account, and the fact 
that the costs for taxes, insurance, and related 
fees can be substantial. 
‘‘(C) A clear explanation of the con-
sequences of any failure to pay non-escrowed 
items, including the possible requirement for 
the forced placement of insurance by the cred-
itor or servicer and the potentially higher cost 
(including any potential commission payments 
to the servicer) or reduced coverage for the con-
sumer in the event of any such creditor-placed 
insurance.’’. 
(b) IMPLEMENTATION.— 
(1) REGULATIONS.—The Federal banking agen-
cies and the Federal Trade Commission shall pre-
scribe, in final form, such regulations as such agen-
cies determine to be necessary to implement the 
amendments made by subsection (a) before the end 
of the 180-day period beginning on the date of the 
enactment of this Act. 
(2) EFFECTIVE DATE.—The amendments made 
by subsection (a) shall only apply in accordance with 
the regulations established in paragraph (1) and be-
ginning on the date occurring 180-days after the
161 
date of the publication of final regulations in the 
Federal Register. 
SEC. 603. REAL ESTATE SETTLEMENT PROCEDURES ACT OF 
1974 AMENDMENTS. 
(a) SERVICER PROHIBITIONS.—Section 6 of the Real 
Estate Settlement Procedures Act of 1974 (12 U.S.C. 
2605) is amended by adding at the end the following new 
subsections: 
‘‘(k) SERVICER PROHIBITIONS.— 
‘‘(1) IN GENERAL.—A servicer of a federally re-
lated mortgage shall not— 
‘‘(A) obtain force-placed hazard insurance 
unless there is a reasonable basis to believe the 
borrower has failed to comply with the loan 
contract’s requirements to maintain property 
insurance; 
‘‘(B) charge fees for responding to valid 
qualified written requests (as defined in regula-
tions which the Secretary shall prescribe) under 
this section; 
‘‘(C) fail to take timely action to respond 
to a borrower’s requests to correct errors relat-
ing to allocation of payments, final balances for 
purposes of paying off the loan, or avoiding 
foreclosure, or other standard servicer’s duties;
162 
‘‘(D) fail to respond within 10 business 
days to a request from a borrower to provide 
the identity, address, and other relevant contact 
information about the owner assignee of the 
loan; or 
‘‘(E) fail to comply with any other obliga-
tion found by the Secretary, by regulation, to 
be appropriate to carry out the consumer pro-
tection purposes of this Act. 
‘‘(2) FORCE-PLACED
INSURANCE
DEFINED.— 
For purposes of this subsection and subsections (l) 
and (m), the term ‘force-placed insurance’ means 
hazard insurance coverage obtained by a servicer of 
a federally related mortgage when the borrower has 
failed to maintain or renew hazard insurance on 
such property as required of the borrower under the 
terms of the mortgage. 
‘‘(l) REQUIREMENTS
FOR FORCE-PLACED INSUR-
ANCE.—A servicer of a federally related mortgage shall 
not be construed as having a reasonable basis for obtain-
ing force-placed insurance unless the requirements of this 
subsection have been met. 
‘‘(1) WRITTEN
NOTICES
TO
BORROWER.—A 
servicer may not impose any charge on any borrower
163 
for force-placed insurance with respect to any prop-
erty securing a federally related mortgage unless— 
‘‘(A) the servicer has sent, by first-class 
mail, a written notice to the borrower con-
taining— 
‘‘(i) a reminder of the borrower’s obli-
gation to maintain hazard insurance on the 
property securing the federally related 
mortgage; 
‘‘(ii) a statement that the servicer 
does not have evidence of insurance cov-
erage of such property; 
‘‘(iii) a clear and conspicuous state-
ment of the procedures by which the bor-
rower may demonstrate that the borrower 
already has insurance coverage; and 
‘‘(iv) a statement that the servicer 
may obtain such coverage at the borrower’s 
expense if the borrower does not provide 
such demonstration of the borrower’s exist-
ing coverage in a timely manner; 
‘‘(B) the servicer has sent, by first-class 
mail, a second written notice, at least 30 days 
after the mailing of the notice under subpara-
graph (A) that contains all the information de-
164 
scribed in each clauses of such subparagraph; 
and 
‘‘(C) the servicer has not received from the 
borrower any demonstration of hazard insur-
ance coverage for the property securing the 
mortgage by the end of the 15-day period be-
ginning on the date the notice under subpara-
graph (B) was sent by the servicer. 
‘‘(2) SUFFICIENCY
OF
DEMONSTRATION.—A 
servicer of a federally related mortgage shall accept 
any reasonable form of written confirmation from a 
borrower of existing insurance coverage, which shall 
include the existing insurance policy number along 
with the identity of, and contact information for, the 
insurance company or agent. 
‘‘(3) TERMINATION OF FORCE-PLACED INSUR-
ANCE.—Within 15 days of the receipt by a servicer 
of confirmation of a borrower’s existing insurance 
coverage, the servicer shall— 
‘‘(A) terminate the force-placed insurance; 
and 
‘‘(B) refund to the consumer all force- 
placed insurance premiums paid by the bor-
rower during any period during which the bor-
rower’s insurance coverage and the force-placed
165 
insurance coverage were each in effect, and any 
related fees charged to the consumer’s account 
with respect to the force-placed insurance dur-
ing such period. 
‘‘(4) CLARIFICATION WITH RESPECT TO FLOOD 
DISASTER PROTECTION ACT.—No provision of this 
section shall be construed as prohibiting a servicer 
from providing simultaneous or concurrent notice of 
a lack of flood insurance pursuant to section 102(e) 
of the Flood Disaster Protection Act of 1973. 
‘‘(m) LIMITATIONS ON FORCE-PLACED INSURANCE 
CHARGES.—All charges for force-placed insurance pre-
miums shall be bona fide and reasonable in amount. 
‘‘(n) PROMPT
CREDITING
OF
PAYMENTS
RE-
QUIRED.— 
‘‘(1) IN GENERAL.—All amounts received by a 
lender or a servicer on a home loan at the address 
where the borrower has been instructed to make 
payments shall be accepted and credited, or treated 
as credited, on the business day received, to the ex-
tent that the borrower has made the full contractual 
payment and has provided sufficient information to 
credit the account. 
‘‘(2) SCHEDULED METHOD.—If a servicer uses 
the scheduled method of accounting, any regularly
166 
scheduled payment made prior to the scheduled due 
date shall be credited no later than the due date. 
‘‘(3) NOTICE OF NONCREDIT.—If any payment 
is received by a lender or a servicer on a home loan 
and not credited, or treated as credited, the bor-
rower shall be notified within 10 business days by 
mail at the borrower’s last known address of the dis-
position of the payment, the reason the payment was 
not credited, or treated as credited to the account, 
and any actions necessary by the borrower to make 
the loan current.’’. 
(b) INCREASE IN PENALTY AMOUNTS.—Section 6(f) 
of the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2605(f)) is amended— 
(1) in paragraphs (1)(B) and (2)(B), by strik-
ing ‘‘$1,000’’ each place such term appears and in-
serting ‘‘$2,000’’; and 
(2) 
in 
paragraph 
(2)(B)(i), 
by 
striking 
‘‘$500,000’’ and inserting ‘‘$1,000,000’’. 
(c) DECREASE IN RESPONSE TIMES.—Section 6(e) of 
the Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2605(e)) is amended— 
(1) in paragraph (1)(A), by striking ‘‘20 days’’ 
and inserting ‘‘10 days’’;
168 
control at the time the loan is paid off shall be promptly 
returned to the borrower within 20 business days or cred-
ited to a similar account for a new mortgage loan to the 
borrower with the same lender.’’. 
SEC. 604. MORTGAGE SERVICING STUDIES REQUIRED. 
(a) MORTGAGE SERVICING PRACTICES.— 
(1) STUDY.—The Secretary of Housing and 
Urban Development, in consultation with the Fed-
eral banking agencies, and the Federal Trade Com-
mission, shall conduct a comprehensive study on 
mortgage servicing practices and their potential for 
fraud and abuse. 
(2) ISSUES TO BE INCLUDED.—In addition to 
other issues the Secretary of Housing and Urban 
Development, the Federal banking agencies, and the 
Federal Trade Commission may determine to be ap-
propriate and possibly pertinent to the study con-
ducted under paragraph (1), the study shall include 
the following issues: 
(A) A survey of the industry in order to 
examine the issue of the timely or effective 
posting of payments by servicers. 
(B) The employment of daily interest when 
payments are made after a due date.
169 
(C) The charging of late fees on the entire 
outstanding principal. 
(D) The charging of interest on servicing 
fees. 
(E) The utilization of collection practices 
that failed to comply with the Fair Debt Collec-
tion Practices Act. 
(F) The charging of prepayment penalties 
when not authorized by either the note or law. 
(G) The employment of unconscionable for-
bearance agreements. 
(H) Foreclosure abuses. 
(3) REPORT.—Before the end of the 12-month 
period beginning on the date of the enactment of 
this Act, the Secretary of Housing and Urban Devel-
opment shall submit a report on the study conducted 
under this subsection to the Committee on Financial 
Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs 
of the Senate. 
(b) MORTGAGE SERVICING IMPROVEMENTS.— 
(1) STUDY.—The Secretary of Housing and 
Urban Development, in consultation with the Fed-
eral banking agencies, and the Federal Trade Com-
mission, shall conduct a comprehensive study on
170 
means to improve the best practices of the mortgage 
servicing industry, and Federal and State laws gov-
erning such industry. 
(2) REPORT.—Before the end of the 18-month 
period beginning on the date of the enactment of 
this Act, the Secretary of Housing and Urban Devel-
opment shall submit a report on the study conducted 
under this subsection to the Committee on Financial 
Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs 
of the Senate, together with such recommendations 
for administrative or legislative action as the Sec-
retary, in consultation with the Board and the Com-
mission, may determine to be appropriate. 
SEC. 605. ESCROWS INCLUDED IN REPAYMENT ANALYSIS. 
(a) IN GENERAL.—Section 128(b) of the Truth in 
Lending Act (15 U.S.C. 1638(b)) is amended by adding 
at the end the following new paragraph: 
‘‘(4) REPAYMENT ANALYSIS REQUIRED TO IN-
CLUDE ESCROW PAYMENTS.— 
‘‘(A) IN
GENERAL.—In the case of any 
consumer credit transaction secured by a first 
mortgage or lien on the principal dwelling of 
the consumer, other than a consumer credit 
transaction under an open end credit plan or a
171 
reverse mortgage, for which an impound, trust, 
or other type of account has been or will be es-
tablished in connection with the transaction for 
the payment of property taxes, hazard and flood 
(if any) insurance premiums, or other periodic 
payments or premiums with respect to the 
property, the information required to be pro-
vided under subsection (a) with respect to the 
number, amount, and due dates or period of 
payments scheduled to repay the total of pay-
ments shall take into account the amount of 
any monthly payment to such account for each 
such repayment in accordance with section 
10(a)(2) of the Real Estate Settlement Proce-
dures Act of 1974. 
‘‘(B) ASSESSMENT
VALUE.—The amount 
taken into account under subparagraph (A) for 
the payment of property taxes, hazard and flood 
(if any) insurance premiums, or other periodic 
payments or premiums with respect to the 
property shall reflect the taxable assessed value 
of the real property securing the transaction 
after the consummation of the transaction, in-
cluding the value of any improvements on the 
property or to be constructed on the property
172 
(whether or not such construction will be fi-
nanced from the proceeds of the transaction), if 
known, and the replacement costs of the prop-
erty for hazard insurance, in the initial year 
after the transaction.’’. 
TITLE VII—APPRAISAL 
ACTIVITIES 
SEC. 701. PROPERTY APPRAISAL REQUIREMENTS. 
Section 129 of the Truth in Lending Act (15 U.S.C. 
1639) is amended by inserting after subsection (u) (as 
added by section 303(f)) the following new subsection: 
‘‘(v) PROPERTY APPRAISAL REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A creditor may not extend 
credit in the form of a mortgage referred to in sec-
tion 103(aa) to any consumer without first obtaining 
a written appraisal of the property to be mortgaged 
prepared in accordance with the requirements of this 
subsection. 
‘‘(2) APPRAISAL REQUIREMENTS.— 
‘‘(A) PHYSICAL PROPERTY VISIT.—An ap-
praisal of property to be secured by a mortgage 
referred to in section 103(aa) does not meet the 
requirement of this subsection unless it is per-
formed by a qualified appraiser who conducts a
173 
physical property visit of the interior of the 
mortgaged property. 
‘‘(B) SECOND APPRAISAL UNDER CERTAIN 
CIRCUMSTANCES.— 
‘‘(i) IN GENERAL.—If the purpose of 
a mortgage referred to in section 103(aa) 
is to finance the purchase or acquisition of 
the mortgaged property from a person 
within 180 days of the purchase or acquisi-
tion of such property by that person at a 
price that was lower than the current sale 
price of the property, the creditor shall ob-
tain a second appraisal from a different 
qualified appraiser. The second appraisal 
shall include an analysis of the difference 
in sale prices, changes in market condi-
tions, and any improvements made to the 
property between the date of the previous 
sale and the current sale. 
‘‘(ii) NO COST TO CONSUMER.—The 
cost of any second appraisal required 
under clause (i) may not be charged to the 
consumer.
174 
‘‘(C) QUALIFIED
APPRAISER
DEFINED.— 
For purposes of this subsection, the term 
‘qualified appraiser’ means a person who— 
‘‘(i) is certified or licensed by the 
State in which the property to be ap-
praised is located; and 
‘‘(ii) performs each appraisal in con-
formity with the Uniform Standards of 
Professional Appraisal Practice and title 
XI of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989, 
and the regulations prescribed under such 
title, as in effect on the date of the ap-
praisal. 
‘‘(3) FREE
COPY
OF
APPRAISAL.—A creditor 
shall provide 1 copy of each appraisal conducted in 
accordance with this subsection in connection with a 
mortgage referred to in section 103(aa) to the con-
sumer without charge, and at least 3 days prior to 
the transaction closing date. 
‘‘(4) CONSUMER NOTIFICATION.—At the time 
of the initial mortgage application, the consumer 
shall be provided with a statement by the creditor 
that any appraisal prepared for the mortgage is for 
the sole use of the creditor, and that the consumer
175 
may choose to have a separate appraisal conducted 
at their own expense. 
‘‘(5) VIOLATIONS.—In addition to any other li-
ability to any person under this title, a creditor 
found to have willfully failed to obtain an appraisal 
as required in this subsection shall be liable to the 
consumer for the sum of $2,000.’’. 
SEC. 702. UNFAIR AND DECEPTIVE PRACTICES AND ACTS 
RELATING TO CERTAIN CONSUMER CREDIT 
TRANSACTIONS. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by inserting 
after section 129C (as added by section 601) the following 
new section: 
‘‘SEC. 129D. UNFAIR AND DECEPTIVE PRACTICES AND ACTS 
RELATING TO CERTAIN CONSUMER CREDIT 
TRANSACTIONS. 
‘‘(a) IN GENERAL.—It shall be unlawful, in providing 
any services for a consumer credit transaction secured by 
the principal dwelling of the consumer, to engage in any 
unfair or deceptive act or practice as described in or pur-
suant to regulations prescribed under this section. 
‘‘(b) APPRAISAL INDEPENDENCE.—For purposes of 
subsection (a), unfair and deceptive practices shall in-
clude—
176 
‘‘(1) any appraisal of a property offered as se-
curity for repayment of the consumer credit trans-
action that is conducted in connection with such 
transaction in which a person with an interest in the 
underlying transaction compensates, coerces, extorts, 
colludes, instructs, induces, bribes, or intimidates a 
person conducting or involved in an appraisal, or at-
tempts, to compensate, coerce, extort, collude, in-
struct, induce, bribe, or intimidate such a person, 
for the purpose of causing the appraised value as-
signed, under the appraisal, to the property to be 
based on any factor other than the independent 
judgment of the appraiser; 
‘‘(2) 
mischaracterizing, 
or 
suborning 
any 
mischaracterization of, the appraised value of the 
property securing the extension of the credit; 
‘‘(3) seeking to influence an appraiser or other-
wise to encourage a targeted value in order to facili-
tate the making or pricing of the transaction; and 
‘‘(4) failing to timely compensate an appraiser 
for a completed appraisal regardless of whether the 
transaction closes. 
‘‘(c) EXCEPTIONS.—The requirements of subsection 
(b) shall not be construed as prohibiting a mortgage lend-
er, mortgage broker, mortgage banker, real estate broker,
177 
appraisal management company, employee of an appraisal 
management company, or any other person with an inter-
est in a real estate transaction from asking an appraiser 
to provide 1 or more of the following services: 
‘‘(1) Consider additional, appropriate property 
information, including the consideration of addi-
tional comparable properties to make or support an 
appraisal. 
‘‘(2) Provide further detail, substantiation, or 
explanation for the appraiser’s value conclusion. 
‘‘(3) Correct errors in the appraisal report. 
‘‘(d) RULEMAKING PROCEEDINGS.—The Board, the 
Comptroller of the Currency, the Director of the Office 
of Thrift Supervision, the Federal Deposit Insurance Cor-
poration, the National Credit Union Administration 
Board, and the Federal Trade Commission— 
‘‘(1) shall, for purposes of this section, jointly 
prescribe regulations defining with specificity acts or 
practices which are unfair or deceptive in the provi-
sion of mortgage lending services for a consumer 
credit transaction secured by the principal dwelling 
of the consumer or mortgage brokerage services for 
such a transaction and defining any terms in this 
section or such regulations; and
178 
‘‘(2) may jointly issue interpretive guidelines 
and general statements of policy with respect to un-
fair or deceptive acts or practices in the provision of 
mortgage lending services for a consumer credit 
transaction secured by the principal dwelling of the 
consumer and mortgage brokerage services for such 
a transaction, within the meaning of subsections (a), 
(b), and (c). 
‘‘(e) PENALTIES.— 
‘‘(1) FIRST VIOLATION.—In addition to the en-
forcement provisions referred to in section 130, each 
person who violates this section shall forfeit and pay 
a civil penalty of not more than $10,000 for each 
day any such violation continues. 
‘‘(2) SUBSEQUENT VIOLATIONS.—In the case of 
any person on whom a civil penalty has been im-
posed under paragraph (1), paragraph (1) shall be 
applied by substituting ‘$20,000’ for ‘$10,000’ with 
respect to all subsequent violations. 
‘‘(3) ASSESSMENT.—The agency referred to in 
subsection (a) or (c) of section 108 with respect to 
any person described in paragraph (1) shall assess 
any penalty under this subsection to which such per-
son is subject.’’.
179 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 2 of the Truth in Lending Act is amended 
by inserting after the item relating to section 129C (as 
added by section 601) the following new item: 
‘‘129D. Unfair and deceptive practices and acts relating to certain consumer 
credit transactions.’’. 
SEC. 703. APPRAISAL SUBCOMMITTEE OF FIEC, APPRAISER 
INDEPENDENCE, AND APPROVED APPRAISER 
EDUCATION. 
(a) CONSUMER PROTECTION MISSION.— 
(1) PURPOSE.—A purpose for the establishment 
and operation of the Appraisal Subcommittee of the 
Financial Institutions Examination Council (here-
after in this section referred to as the ‘‘Appraisal 
Subcommittee’’) shall be to establish a consumer 
protection mandate. 
(2) 
FUNCTIONS
OF
APPRAISAL
SUB-
COMMITTEE.—It shall be a function of the Appraisal 
Subcommittee to protect the consumer from im-
proper appraisal practices and the predations of un-
licensed appraisers. 
(3) THRESHOLD
LEVELS.—In establishing a 
threshold level under section 1112(b) of the Finan-
cial Institutions Reform, Recovery, and Enforcement 
Act of 1989 (12 U.S.C. 3341(b)), each agency shall 
determine in writing that the threshold level provides
180 
reasonable protection for consumers who purchase 1- 
4 unit single-family residences. 
(b) 
ANNUAL
REPORT
OF
APPRAISAL
SUB-
COMMITTEE.—The annual report of the Appraisal Sub-
committee under section 1103(a)(4) of Financial Institu-
tions Reform, Recovery, and Enforcement Act of 1989 
shall detail the activities of the Appraisal Subcommittee, 
including the results of all audits of State appraiser regu-
latory agencies, and provide an accounting of disapproved 
actions and warnings taken in the previous year, including 
a description of the conditions causing the disapproval. 
(c) OPEN MEETINGS.—All meetings of the Appraisal 
Subcommittee shall be held in public session after notice 
in the Federal Register. 
(d) REGULATIONS.—The Appraisal Subcommittee 
may prescribe regulations after notice and opportunity for 
comment. Any regulations prescribed by the Appraisal 
Subcommittee shall (unless otherwise provided in this sec-
tion or title XI of the Financial Institutions Reform, Re-
covery, and Enforcement Act of 1989) be limited to the 
following functions: temporary practice, national registry, 
information sharing, and enforcement. For purposes of 
prescribing regulations, the Appraisal Subcommittee shall 
establish an advisory committee of industry participants,
181 
including appraisers, lenders, consumer advocates, and 
government agencies, and hold regular meetings. 
(e) FIELD APPRAISALS AND APPRAISAL REVIEWS.— 
All field appraisals performed at a property within a State 
shall be prepared by appraisers licensed in the State where 
the property is located. All Uniform Standards of Profes-
sional Appraisal Practice-compliant appraisal reviews shall 
be performed by an appraiser who is duly licensed by a 
State appraisal board. 
(f) STATE AGENCY REPORTING REQUIREMENT.— 
Each State with an appraiser certifying and licensing 
agency whose certifications and licenses comply with title 
XI of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 shall transmit reports on sanc-
tions, disciplinary actions, license and certification revoca-
tions, and license and certification suspensions on a timely 
basis to the national registry of the Appraisal Sub-
committee. 
(g) REGISTRY FEES MODIFIED.— 
(1) IN GENERAL.—The annual registry fees for 
persons performing appraisals in federally related 
transactions shall be increased from $25 to $40. The 
maximum amount up to which the Appraisal Sub-
committee may adjust any registry fees shall be in-
creased from $50 to $80 per annum. The Appraisal
182 
Subcommittee shall consider at least once every 5 
years whether to adjust the dollar amount of the 
registry fees to account for inflation. In imple-
menting any change in registry fees, the Appraisal 
Subcommittee shall provide flexibility to the States 
for multi-year certifications and licenses already in 
place, as well as a transition period to implement the 
changes in registry fees. 
(2) 
INCREMENTAL
REVENUES.—Incremental 
revenues collected pursuant to the increases required 
by this section shall be placed in a separate account 
at the United States Treasury, entitled the Ap-
praisal Subcommittee Account. 
(h) GRANTS AND REPORTS.— 
(1) IN GENERAL.—Amounts appropriated for or 
collected by the Appraisal Subcommittee after the 
date of the enactment of this Act shall, in addition 
to other uses authorized, be used— 
(A) to make grants to State appraiser reg-
ulatory agencies to help defray those costs re-
lating to enforcement activities; and 
(B) to report to all State appraiser certi-
fying and licensing agencies when a license or 
certification is surrendered, revoked, or sus-
pended.
183 
(2) LIMITATION ON OBLIGATIONS.—Obligations 
authorized under this section may not exceed 75 per-
cent of the fiscal year total of incremental increase 
in fees collected and deposited in the Appraisal Sub-
committee Account pursuant to section 703(g) of 
this Act. 
(i) CRITERIA.— 
(1) DEFINITION.—For purposes of this section 
and title XI of the Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989 (notwith-
standing section 1116(c) of such title), the term 
‘‘State licensed appraiser’’ means an individual who 
has satisfied the requirements for State licensing in 
a State or territory whose criteria for the licensing 
of a real estate appraiser currently meet or exceed 
the minimum criteria issued by the Appraisal Quali-
fications Board of The Appraisal Foundation for the 
licensing of real estate appraisers. 
(2) 
MINIMUM
QUALIFICATION
REQUIRE-
MENTS.—Any requirements established for individ-
uals in the position of ‘‘Trainee Appraiser’’ and ‘‘Su-
pervisory Appraiser’’ shall meet or exceed the min-
imum qualification requirements of the Appraiser 
Qualifications Board of The Appraisal Foundation.
184 
The Appraisal Subcommittee shall have the author-
ity to enforce these requirements. 
(j) MONITORING OF STATE APPRAISER CERTIFYING 
AND
LICENSING
AGENCIES.—The 
Appraisal 
Sub-
committee shall monitor State appraiser certifying and 
licencing agencies for the purpose of determining whether 
a State agency’s funding and staffing are consistent with 
the requirements of title XI of the Financial Institutions 
Reform, Recovery, and Enforcement Act of 1989, whether 
a State agency processes complaints and completes exams 
in a reasonable time period, and whether a State agency 
reports claims and disciplinary actions on a timely basis 
to the national registry maintained by the Appraisal Sub-
committee. The Appraisal Subcommittee shall have the 
authority to impose interim sanctions and suspensions. 
(k) RECIPROCITY.—A State appraiser certifying or li-
censing agency shall issue a reciprocal certification or li-
cense for an individual from another State when— 
(1) the appraiser licensing and certification pro-
gram of such other State is in compliance with the 
provisions of this title; and 
(2) the appraiser holds a valid certification 
from a State whose requirements for certification or 
licensing meet or exceed the licensure standards es-
185 
tablished by the State where an individual seeks ap-
praisal licensure. 
(l) CONSIDERATION OF PROFESSIONAL APPRAISAL 
DESIGNATIONS.—No provision of section 1122(d) of the 
Financial Institutions Reform, Recovery, and Enforce-
ment Act of 1989 shall be construed as prohibiting consid-
eration of designations conferred by recognized national 
professional appraisal organizations, such as sponsoring 
organizations of The Appraisal Foundation. 
(m) APPRAISER INDEPENDENCE.— 
(1) PROHIBITIONS ON INTERESTED PARTIES IN 
A REAL ESTATE TRANSACTION.—No mortgage lend-
er, mortgage broker, mortgage banker, real estate 
broker, appraisal management company, employee of 
an appraisal management company, nor any other 
person with an interest in a real estate transaction 
involving an appraisal shall improperly influence, or 
attempt to improperly influence, through coercion, 
extortion, collusion, compensation, instruction, in-
ducement, intimidation, non-payment for services 
rendered, or bribery, the development, reporting, re-
sult, or review of a real estate appraisal sought in 
connection with a mortgage loan. 
(2) EXCEPTIONS.—The requirements of para-
graph (1) shall not be construed as prohibiting a
186 
mortgage lender, mortgage broker, mortgage banker, 
real estate broker, appraisal management company, 
employee of an appraisal management company, or 
any other person with an interest in a real estate 
transaction from asking an appraiser to provide 1 or 
more of the following services: 
(A) Consider additional, appropriate prop-
erty information, including the consideration of 
additional comparable properties to make or 
support an appraisal. 
(B) Provide further detail, substantiation, 
or explanation for the appraiser’s value conclu-
sion. 
(C) Correct errors in the appraisal report. 
(3) PROHIBITIONS ON CONFLICTS OF INTER-
EST.—No certified or licensed appraiser conducting 
an appraisal may have a direct or indirect interest, 
financial or otherwise, in the property or transaction 
involving the appraisal. 
(4) MANDATORY
REPORTING.—Any mortgage 
lender, mortgage broker, mortgage banker, real es-
tate broker, appraisal management company, em-
ployee of an appraisal management company, or any 
other person with an interest in a real estate trans-
action involving an appraisal who has a reasonable
187 
basis to believe an appraiser is violating applicable 
laws, or is otherwise engaging in unethical conduct, 
shall refer the matter to the applicable State ap-
praiser certifying and licensing agency. 
(5) REGULATIONS.—The Federal financial in-
stitutions regulatory agencies (as defined in section 
1003(1) of the Federal Financial Institutions Exam-
ination Council Act of 1978) shall prescribe such 
regulations as may be necessary to carry out the 
provisions of this subsection. 
(6) PENALTIES.—Any person who violates any 
provision of this subsection shall be subject to civil 
penalties under section 8(i)(2) of the Federal De-
posit Insurance Act or section 206(k)(2) of the Fed-
eral Credit Union Act, as appropriate. 
(7) PROCEEDING.—A proceeding with respect 
to a violation of this subsection shall be an adminis-
trative proceeding which may be conducted by a 
Federal financial institutions regulatory agency in 
accordance with the procedures set forth in sub-
chapter II of chapter 5 of title 5, United States 
Code. 
(n) APPROVED EDUCATION.—The Appraisal Sub-
committee shall encourage the States to accept courses ap-
188 
proved by the Appraiser Qualification Board’s Course Ap-
proval Program. 
SEC. 704. STUDY REQUIRED ON IMPROVEMENTS IN AP-
PRAISAL PROCESS AND COMPLIANCE PRO-
GRAMS. 
(a) STUDY.—The Comptroller General shall conduct 
a comprehensive study on possible improvements in the 
appraisal process generally, and specifically on the consist-
ency in and the effectiveness of, and possible improve-
ments in, State compliance efforts and programs in ac-
cordance with title XI of the Financial Institutions Re-
form, Recovery, and Enforcement Act of 1989. In addi-
tion, this study shall examine the existing de minimis loan 
levels established by Federal regulators for compliance 
under title XI and whether there is a need to revise them 
to reflect the addition of consumer protection to the pur-
poses and functions of the Appraisal Subcommittee. 
(b) REPORT.—Before the end of the 18-month period 
beginning on the date of the enactment of this Act, the 
Comptroller General shall submit a report on the study 
under subsection (a) to the Committee on Financial Serv-
ices of the House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the Senate, 
together with such recommendations for administrative or
189 
legislative action, at the Federal or State level, as the 
Comptroller General may determine to be appropriate. 
SEC. 705. CONSUMER APPRAISAL DISCLOSURE. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by inserting 
after section 129D (as added by section 702) the following 
new section: 
‘‘SEC. 129E. CONSUMER APPRAISAL DISCLOSURE. 
‘‘In any case in which an appraisal is performed in 
connection with an extension of credit secured by an inter-
est in real property, the creditor or other mortgage origi-
nator shall make available to the applicant for the exten-
sion of credit a copy of all appraisal valuation reports upon 
completion but no later than 3 business days prior to the 
transaction closing date.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 2 of the Truth in Lending Act is amended 
by inserting after the item relating to section 129D (as 
added by section 702) the following new item: 
‘‘129E. Consumer appraisal disclosure.’’. 
Passed the House of Representatives November 15, 
2007. 
Attest: 
Clerk.
110TH CONGRESS 
1ST SESSION 
H. R. 3915 
AN ACT 
To amend the Truth in Lending Act to reform con-
sumer mortgage practices and provide account-
ability for such practices, to establish licensing 
and registration requirements for residential 
mortgage originators, to provide certain min-
imum standards for consumer mortgage loans, 
and for other purposes.