I 
110TH CONGRESS 
2D SESSION 
H. R. 5857 
To establish licensing and registration requirements for residential mortgage 
originators, improve mortgage disclosures, create an Office of Housing 
Counseling, to provide incentives to facilitate loan modifications, reform 
the regulation of the Government Sponsored Enterprises, modernize the 
Federal Housing Administration, improve home ownership for veterans, 
reform appraisal activities, and combat mortgage fraud, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
APRIL 22, 2008 
Mr. BACHUS (for himself, Mrs. BIGGERT, Mrs. CAPITO, Mr. BOEHNER, Mr. 
BLUNT, Mr. PUTNAM, Ms. GRANGER, Mr. MCCOTTER, Ms. PRYCE of 
Ohio, Mr. ROSKAM, Mr. SHAYS, Mr. NEUGEBAUER, Mr. LATOURETTE, 
Mr. JONES of North Carolina, Mr. CASTLE, Ms. GINNY BROWN-WAITE 
of Florida, Mr. HELLER of Nevada, Mr. SESSIONS, Mr. LUCAS, Mr. 
DAVIS of Kentucky, Mr. BONNER, Mr. ROGERS of Alabama, Mr. 
LATHAM, Mr. TURNER, Mr. CHABOT, Mr. MARIO DIAZ-BALART of Flor-
ida, Mr. ROGERS of Michigan, Mr. GALLEGLY, Mr. KIRK, Mr. TERRY, 
Mr. MANZULLO, Mr. BOOZMAN, and Mr. CARTER) introduced the fol-
lowing bill; which was referred to the Committee on Financial Services, 
and in addition to the Committees on Armed Services, Veterans’ Affairs, 
and the Judiciary, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned 
A BILL 
To establish licensing and registration requirements for resi-
dential mortgage originators, improve mortgage disclo-
sures, create an Office of Housing Counseling, to provide 
incentives to facilitate loan modifications, reform the reg-
ulation of the Government Sponsored Enterprises, mod-
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ernize the Federal Housing Administration, improve 
home ownership for veterans, reform appraisal activities, 
and combat mortgage fraud, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Homeownership Pro-
tection and Housing Market Stabilization Act of 2008’’. 
SEC. 2. TABLE OF CONTENTS. 
The table of contents for this Act is as follows: 
Sec. 1. Short title. 
Sec. 2. Table of contents. 
TITLE I—LICENSING SYSTEM FOR RESIDENTIAL MORTGAGE 
LOAN ORIGINATORS 
Sec. 101. Purposes and methods for establishing a mortgage licensing system 
and registry. 
Sec. 102. Definitions. 
Sec. 103. License or registration required. 
Sec. 104. State license and registration application and issuance. 
Sec. 105. Standards for State license renewal. 
Sec. 106. System of registration administration by Federal banking agencies. 
Sec. 107. Secretary of Housing and Urban Development backup authority to 
establish a loan originator licensing system. 
Sec. 108. Backup authority to establish a nationwide mortgage licensing and 
registry system. 
Sec. 109. Fees. 
Sec. 110. Background checks of loan originators. 
Sec. 111. Confidentiality of information. 
Sec. 112. Liability provisions. 
Sec. 113. Enforcement under HUD backup licensing system. 
TITLE II—RESIDENTIAL MORTGAGE LOAN DISCLOSURES 
Sec. 201. Required disclosures. 
Sec. 202. Disclosures required in monthly statements for residential mortgage 
loans. 
TITLE III—OFFICE OF HOUSING COUNSELING 
Sec. 301. Short title. 
Sec. 302. Establishment of Office of Housing Counseling. 
Sec. 303. Counseling procedures. 
Sec. 304. Grants for housing counseling assistance. 
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Sec. 305. Requirements to use HUD-certified counselors under HUD programs. 
Sec. 306. Study of defaults and foreclosures. 
Sec. 307. Definitions for counseling-related programs. 
Sec. 308. Updating and simplification of mortgage information booklet. 
TITLE IV—INCENTIVES FOR BEST PRACTICES AND MORTGAGE 
LOAN MODIFICATION 
Sec. 401. CRA credit for certain lender practices. 
Sec. 402. Safe harbor for qualified loan modifications or workout plans for cer-
tain residential mortgage loans. 
TITLE V—FHA MODERNIZATION 
Sec. 501. Short title. 
Sec. 502. Findings and purposes. 
Sec. 503. Maximum principal loan obligation. 
Sec. 504. Extension of mortgage term. 
Sec. 505. Mortgage insurance premiums. 
Sec. 506. Rehabilitation loans. 
Sec. 507. Discretionary action. 
Sec. 508. Insurance of condominiums. 
Sec. 509. Mutual Mortgage Insurance Fund. 
Sec. 510. Hawaiian home lands and Indian reservations. 
Sec. 511. Conforming and technical amendments. 
Sec. 512. Home equity conversion mortgages. 
Sec. 513. Conforming loan limit in disaster areas. 
Sec. 514. Participation of mortgage brokers and correspondent lenders. 
Sec. 515. Sense of Congress regarding technology for financial systems. 
Sec. 516. Savings provision. 
Sec. 517. Implementation. 
TITLE VI—HOMEOWNERSHIP FOR VETERANS 
Sec. 601. Temporary increase in maximum loan guaranty amount for housing 
loans guaranteed by Secretary of Veterans Affairs. 
Sec. 602. Counseling on mortgage foreclosures for members of the Armed 
Forces returning from service abroad. 
Sec. 603. Enhancement of protections for servicemembers relating to mortgages 
and mortgage foreclosures. 
TITLE VII—MORTGAGE ESCROW ACCOUNTS 
Sec. 701. Escrow and impound accounts relating to certain consumer credit 
transactions. 
Sec. 702. Disclosure notice required for consumers who waive escrow services. 
TITLE VIII—MORTGAGE FRAUD 
Sec. 801. Authorization of appropriations for mortgage fraud prevention, inves-
tigation, and prosecution. 
TITLE IX—APPRAISAL ACTIVITIES 
Sec. 901. Property appraisal requirements. 
Sec. 902. Amendments relating to appraisal subcommittee of FIEC, appraiser 
independence, and approved appraiser education. 
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Sec. 903. Study required on improvements in appraisal process and compliance 
programs. 
TITLE X—FEDERAL HOUSING FINANCE REFORM 
Sec. 1001. Short title. 
Sec. 1002. Definitions. 
Subtitle A—Reform of Regulation of Enterprises and Federal Home Loan 
Banks 
CHAPTER 1—IMPROVEMENT OF SAFETY AND SOUNDNESS 
Sec. 1011. Establishment of the Federal Housing Finance Agency. 
Sec. 1012. Duties and authorities of Director. 
Sec. 1013. Federal Housing Enterprise Board. 
Sec. 1014. Authority to require reports by regulated entities. 
Sec. 1015. Disclosure of income and charitable contributions by enterprises. 
Sec. 1016. Assessments. 
Sec. 1017. Examiners and accountants. 
Sec. 1018. Prohibition and withholding of executive compensation. 
Sec. 1019. Reviews of regulated entities. 
Sec. 1020. Regulations and orders. 
Sec. 1021. Non-waiver of privileges. 
Sec. 1022. Risk-Based capital requirements. 
Sec. 1023. Minimum and critical capital levels. 
Sec. 1024. Review of and authority over enterprise assets and liabilities. 
Sec. 1025. Corporate governance of enterprises. 
Sec. 1026. Required registration under Securities Exchange Act of 1934. 
Sec. 1027. Liaison with Financial Institutions Examination Council. 
Sec. 1028. Guarantee fee study. 
Sec. 1029. Conforming amendments. 
CHAPTER 2—IMPROVEMENT OF MISSION SUPERVISION 
Sec. 1031. Transfer of product approval and housing goal oversight. 
Sec. 1032. Review of enterprise products. 
Sec. 1033. Conforming loan limits. 
Sec. 1034. Annual housing report regarding regulated entities. 
Sec. 1035. Annual reports by regulated entities on affordable housing stock. 
Sec. 1036. Mortgagor identification requirements for mortgages of regulated 
entities. 
Sec. 1037. Revision of housing goals. 
Sec. 1038. Duty to serve underserved markets. 
Sec. 1039. Monitoring and enforcing compliance with housing goals. 
Sec. 1040. Consistency with mission. 
Sec. 1041. Enforcement. 
Sec. 1042. Conforming amendments. 
CHAPTER 3—PROMPT CORRECTIVE ACTION 
Sec. 1045. Capital classifications. 
Sec. 1046. Supervisory actions applicable to undercapitalized regulated entities. 
Sec. 1047. Supervisory actions applicable to significantly undercapitalized regu-
lated entities. 
Sec. 1048. Authority over critically undercapitalized regulated entities. 
Sec. 1049. Conforming amendments. 
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CHAPTER 4—ENFORCEMENT ACTIONS 
Sec. 1051. Cease-and-desist proceedings. 
Sec. 1052. Temporary cease-and-desist proceedings. 
Sec. 1053. Prejudgment attachment. 
Sec. 1054. Enforcement and jurisdiction. 
Sec. 1055. Civil money penalties. 
Sec. 1056. Removal and prohibition authority. 
Sec. 1057. Criminal penalty. 
Sec. 1058. Subpoena authority. 
Sec. 1059. Conforming amendments. 
CHAPTER 5—GENERAL PROVISIONS 
Sec. 1061. Boards of enterprises. 
Sec. 1062. Report on portfolio operations, safety and soundness, and mission 
of enterprises. 
Sec. 1063. Conforming and technical amendments. 
Sec. 1064. Study of alternative secondary market systems. 
Sec. 1065. Effective date. 
Subtitle B—Federal Home Loan Banks 
Sec. 1071. Definitions. 
Sec. 1072. Directors. 
Sec. 1073. Federal Housing Finance Agency oversight of Federal Home Loan 
Banks. 
Sec. 1074. Joint activities of Banks. 
Sec. 1075. Sharing of information between Federal Home Loan Banks. 
Sec. 1076. Reorganization of Banks and voluntary merger. 
Sec. 1077. Securities and Exchange Commission disclosure. 
Sec. 1078. Community financial institution members. 
Sec. 1079. Technical and conforming amendments. 
Sec. 1080. Study of affordable housing program use for long-term care facili-
ties. 
Sec. 1081. Effective date. 
Subtitle C—Transfer of Functions, Personnel, and Property of Office of Fed-
eral Housing Enterprise Oversight, Federal Housing Finance Board, and 
Department of Housing and Urban Development 
CHAPTER 1—OFFICE OF FEDERAL HOUSING ENTERPRISE OVERSIGHT 
Sec. 1085. Abolishment of OFHEO. 
Sec. 1086. Continuation and coordination of certain regulations. 
Sec. 1087. Transfer and rights of employees of OFHEO. 
Sec. 1088. Transfer of property and facilities. 
CHAPTER 2—FEDERAL HOUSING FINANCE BOARD 
Sec. 1091. Abolishment of the Federal Housing Finance Board. 
Sec. 1092. Continuation and coordination of certain regulations. 
Sec. 1093. Transfer and rights of employees of the Federal Housing Finance 
Board. 
Sec. 1094. Transfer of property and facilities. 
CHAPTER 3—DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT 
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Sec. 1095. Termination of enterprise-related functions. 
Sec. 1096. Continuation and coordination of certain regulations. 
Sec. 1097. Transfer and rights of employees of Department of Housing and 
Urban Development. 
Sec. 1098. Transfer of appropriations, property, and facilities. 
TITLE 
I—LICENSING 
SYSTEM 
FOR 
RESIDENTIAL 
MORT-
GAGE LOAN ORIGINATORS 
SEC. 101. PURPOSES AND METHODS FOR ESTABLISHING A 
MORTGAGE LICENSING SYSTEM AND REG-
ISTRY. 
In order to increase uniformity, reduce regulatory 
burden, enhance consumer protection, and reduce fraud, 
the States, through the Conference of State Bank Super-
visors and the American Association of Residential Mort-
gage Regulators, are hereby encouraged to establish a Na-
tionwide Mortgage Licensing System and Registry for the 
residential mortgage industry that accomplishes all of the 
following objectives: 
(1) Provides uniform license applications and 
reporting requirements for State-licensed loan origi-
nators. 
(2) Provides a comprehensive licensing and su-
pervisory database. 
(3) Aggregates and improves the flow of infor-
mation to and between regulators. 
(4) Provides increased accountability and track-
ing of loan originators. 
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(5) Streamlines the licensing process and re-
duces the regulatory burden. 
(6) Enhances consumer protections and sup-
ports anti-fraud measures. 
(7) Provides consumers with easily accessible 
information regarding the employment history of, 
and publicly adjudicated disciplinary and enforce-
ment actions against, loan originators. 
SEC. 102. DEFINITIONS. 
For purposes of this title, the following definitions 
shall apply: 
(1) FEDERAL BANKING AGENCIES.—The term 
‘‘Federal banking agencies’’ means the Board of 
Governors of the Federal Reserve System, the 
Comptroller of the Currency, the Director of the Of-
fice of Thrift Supervision, the National Credit Union 
Administration, and the Federal Deposit Insurance 
Corporation. 
(2) DEPOSITORY INSTITUTION.—The term ‘‘de-
pository institution’’ has the same meaning as in 
section 3 of the Federal Deposit Insurance Act and 
includes any credit union. 
(3) LOAN ORIGINATOR.— 
(A) IN GENERAL.—The term ‘‘loan origi-
nator’’— 
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(i) means an individual who— 
(I) takes a residential mortgage 
loan application; 
(II) assists a consumer in obtain-
ing or applying to obtain a residential 
mortgage loan; or 
(III) offers or negotiates terms of 
a residential mortgage loan, for direct 
or indirect compensation or gain, or in 
the expectation of direct or indirect 
compensation or gain; 
(ii) includes any individual who rep-
resents to the public, through advertising 
or other means of communicating or pro-
viding information (including the use of 
business 
cards, 
stationery, 
brochures, 
signs, rate lists, or other promotional 
items), that such individual can or will pro-
vide or perform any of the activities de-
scribed in clause (i); 
(iii) does not include any individual 
who is not otherwise described in clause (i) 
or (ii) and who performs purely adminis-
trative or clerical tasks on behalf of a per-
son who is described in any such clause; 
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(iv) does not include a person or enti-
ty that only performs real estate brokerage 
activities and is licensed or registered in 
accordance with applicable State law, un-
less the person or entity is compensated by 
a lender, a mortgage broker, or other loan 
originator or by any agent of such lender, 
mortgage broker, or other loan originator. 
(B) OTHER
DEFINITIONS
RELATING
TO 
LOAN ORIGINATOR.—For purposes of this sub-
section, an individual ‘‘assists a consumer in 
obtaining or applying to obtain a residential 
mortgage loan’’ by, among other things, advis-
ing on loan terms (including rates, fees, other 
costs), preparing loan packages, or collecting in-
formation on behalf of the consumer with re-
gard to a residential mortgage loan. 
(C) 
ADMINISTRATIVE
OR
CLERICAL 
TASKS.—The term ‘‘administrative or clerical 
tasks’’ means the receipt, collection, and dis-
tribution of information common for the proc-
essing or underwriting of a loan in the mort-
gage industry and communication with a con-
sumer to obtain information necessary for the 
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processing or underwriting of a residential 
mortgage loan. 
(D) REAL ESTATE BROKERAGE ACTIVITY 
DEFINED.—The term ‘‘real estate brokerage ac-
tivity’’ means any activity that involves offering 
or providing real estate brokerage services to 
the public, including— 
(i) acting as a real estate agent or 
real estate broker for a buyer, seller, les-
sor, or lessee of real property; 
(ii) listing or advertising real property 
for sale, purchase, lease, rental, or ex-
change; 
(iii) providing advice in connection 
with sale, purchase, lease, rental, or ex-
change of real property; 
(iv) bringing together parties inter-
ested in the sale, purchase, lease, rental, or 
exchange of real property; 
(v) negotiating, on behalf of any 
party, any portion of a contract relating to 
the sale, purchase, lease, rental, or ex-
change of real property (other than in con-
nection with providing financing with re-
spect to any such transaction); 
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(vi) engaging in any activity for which 
a person engaged in the activity is required 
to be registered or licensed as a real estate 
agent or real estate broker under any ap-
plicable law; and 
(vii) offering to engage in any activity, 
or act in any capacity, described in clause 
(i), (ii), (iii), (iv), (v), or (vi). 
(4) LOAN PROCESSOR OR UNDERWRITER.— 
(A) IN GENERAL.—The term ‘‘loan proc-
essor or underwriter’’ means an individual who 
performs clerical or support duties at the direc-
tion of and subject to the supervision and in-
struction of— 
(i) a State-licensed loan originator; or 
(ii) a registered loan originator. 
(B) CLERICAL OR SUPPORT DUTIES.—For 
purposes of subparagraph (A), the term ‘‘cler-
ical or support duties’’ may include— 
(i) the receipt, collection, distribution, 
and analysis of information common for 
the processing or underwriting of a resi-
dential mortgage loan; and 
(ii) communicating with a consumer 
to obtain the information necessary for the 
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processing or underwriting of a loan, to the 
extent that such communication does not 
include offering or negotiating loan rates 
or terms, or counseling consumers about 
residential mortgage loan rates or terms. 
(5) NATIONWIDE
MORTGAGE
LICENSING
SYS-
TEM AND REGISTRY.—The term ‘‘Nationwide Mort-
gage Licensing System and Registry’’ means a mort-
gage licensing system developed and maintained by 
the Conference of State Bank Supervisors and the 
American Association of Residential Mortgage Regu-
lators for the State licensing and registration of 
State-licensed loan originators and the registration 
of registered loan originators or any system estab-
lished by the Secretary under section 108. 
(6) REGISTERED LOAN ORIGINATOR.—The term 
‘‘registered loan originator’’ means any individual 
who— 
(A) meets the definition of loan originator 
and is an employee of a depository institution 
or a subsidiary of a depository institution; and 
(B) is registered with, and maintains a 
unique identifier through, the Nationwide Mort-
gage Licensing System and Registry. 
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(7) RESIDENTIAL MORTGAGE LOAN.—The term 
‘‘residential mortgage loan’’ means any loan pri-
marily for personal, family, or household use that is 
secured by a mortgage, deed of trust, or other equiv-
alent consensual security interest on a dwelling (as 
defined in section 103(v) of the Truth in Lending 
Act) or residential real estate upon which is con-
structed or intended to be constructed a dwelling (as 
so defined). 
(8) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development. 
(9) STATE-LICENSED LOAN ORIGINATOR.—The 
term ‘‘State-licensed loan originator’’ means any in-
dividual who— 
(A) is a loan originator; 
(B) is not an employee of a depository in-
stitution or any subsidiary of a depository insti-
tution; and 
(C) is licensed by a State or by the Sec-
retary under section 107 and registered as a 
loan originator with, and maintains a unique 
identifier through, the Nationwide Mortgage Li-
censing System and Registry. 
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(10) UNIQUE IDENTIFIER.—The term ‘‘unique 
identifier’’ means a number or other identifier 
that— 
(A) permanently identifies a loan origi-
nator; and 
(B) is assigned by protocols established by 
the Nationwide Mortgage Licensing System and 
Registry and the Federal banking agencies to 
facilitate electronic tracking of loan originators 
and uniform identification of, and public access 
to, the employment history of and the publicly 
adjudicated disciplinary and enforcement ac-
tions against loan originators. 
SEC. 103. LICENSE OR REGISTRATION REQUIRED. 
(a) IN GENERAL.—An individual may not engage in 
the business of a loan originator without first— 
(1) obtaining and maintaining— 
(A) a registration as a registered loan 
originator; or 
(B) a license and registration as a State- 
licensed loan originator; and 
(2) obtaining a unique identifier. 
(b) LOAN PROCESSORS AND UNDERWRITERS.— 
(1) SUPERVISED LOAN PROCESSORS AND UN-
DERWRITERS.—A loan processor or underwriter who 
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does not represent to the public, through advertising 
or other means of communicating or providing infor-
mation (including the use of business cards, sta-
tionery, brochures, signs, rate lists, or other pro-
motional items), that such individual can or will per-
form any of the activities of a loan originator shall 
not be required to be a State-licensed loan originator 
or a registered loan originator. 
(2) INDEPENDENT
CONTRACTORS.—A loan 
processor or underwriter may not work as an inde-
pendent contractor unless such processor or under-
writer is a State-licensed loan originator or a reg-
istered loan originator. 
SEC. 104. STATE LICENSE AND REGISTRATION APPLICA-
TION AND ISSUANCE. 
(a) BACKGROUND CHECKS.—In connection with an 
application to any State for licensing and registration as 
a State-licensed loan originator, the applicant shall, at a 
minimum, furnish to the Nationwide Mortgage Licensing 
System and Registry information concerning the appli-
cant’s identity, including— 
(1) fingerprints for submission to the Federal 
Bureau of Investigation, and any governmental 
agency or entity authorized to receive such informa-
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tion for a State and national criminal history back-
ground check; and 
(2) personal history and experience, including 
authorization for the System to obtain— 
(A) an independent credit report obtained 
from a consumer reporting agency described in 
section 603(p) of the Fair Credit Reporting 
Act; and 
(B) information related to any administra-
tive, civil or criminal findings by any govern-
mental jurisdiction. 
(b) ISSUANCE OF LICENSE.—The minimum stand-
ards for licensing and registration as a State-licensed loan 
originator shall include the following: 
(1) The applicant has not had a loan originator 
or similar license revoked in any governmental juris-
diction during the 5-year period immediately pre-
ceding the filing of the present application. 
(2) The applicant has not been convicted, pled 
guilty or nolo contendere in a domestic, foreign, or 
military court of a felony during the 7-year period 
immediately preceding the filing of the present appli-
cation. 
(3) The applicant has demonstrated financial 
responsibility, character, and general fitness such as 
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to command the confidence of the community and to 
warrant a determination that the loan originator will 
operate honestly, fairly, and efficiently within the 
purposes of this title. 
(4) The applicant has completed the pre-licens-
ing education requirement described in subsection 
(c). 
(5) The applicant has passed a written test that 
meets the test requirement described in subsection 
(d). 
(c) PRE-LICENSING EDUCATION OF LOAN ORIGINA-
TORS.— 
(1) MINIMUM EDUCATIONAL REQUIREMENTS.— 
In order to meet the pre-licensing education require-
ment referred to in subsection (b)(4), a person shall 
complete at least 20 hours of education approved in 
accordance with paragraph (2), which shall include 
at least 3 hours of Federal law and regulations and 
3 hours of ethics which shall include instruction on 
fraud, consumer protection and fair lending issues. 
(2) APPROVED
EDUCATIONAL
COURSES.—For 
purposes of paragraph (1), pre-licensing education 
courses shall be reviewed, and published by the Na-
tionwide Mortgage Licensing System and Registry. 
(3) LIMITATION AND STANDARDS.— 
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(A) LIMITATION.—To maintain the inde-
pendence of the approval process, the Nation-
wide Mortgage Licensing System and Registry 
shall not directly or indirectly offer pre-licen-
sure educational courses for loan originators. 
(B) STANDARDS.—In approving courses 
under this section, the Nationwide Mortgage Li-
censing System and Registry shall apply rea-
sonable standards in the review and approval of 
courses. 
(d) TESTING OF LOAN ORIGINATORS.— 
(1) IN GENERAL.—In order to meet the written 
test requirement referred to in subsection (b)(5), an 
individual shall pass, in accordance with the stand-
ards established under this subsection, a qualified 
written test developed by the Nationwide Mortgage 
Licensing System and Registry and administered by 
an approved test provider. 
(2) QUALIFIED TEST.—A written test shall not 
be treated as a qualified written test for purposes of 
paragraph (1) unless— 
(A) the test consists of a minimum of 100 
questions; and 
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(B) the test adequately measures the appli-
cant’s knowledge and comprehension in appro-
priate subject areas, including— 
(i) ethics; 
(ii) Federal law and regulation per-
taining to mortgage origination; 
(iii) State law and regulation per-
taining to mortgage origination; and 
(iv) Federal and State law and regula-
tion, including instruction on fraud, con-
sumer protection, and fair lending issues. 
(3) MINIMUM COMPETENCE.— 
(A) PASSING SCORE.—An individual shall 
not be considered to have passed a qualified 
written test unless the individual achieves a test 
score of not less than 75 percent correct an-
swers to questions. 
(B) INITIAL RETESTS.—An individual may 
retake a test 3 consecutive times with each con-
secutive taking occurring in less than 14 days 
after the preceding test. 
(C) SUBSEQUENT RETESTS.—After 3 con-
secutive tests, an individual shall wait at least 
14 days before taking the test again. 
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(D) RETEST AFTER LAPSE OF LICENSE.— 
A State-licensed loan originator who fails to 
maintain a valid license for a period of 5 years 
or longer shall retake the test, not taking into 
account any time during which such individual 
is a registered loan originator. 
SEC. 105. STANDARDS FOR STATE LICENSE RENEWAL. 
(a) IN GENERAL.—The minimum standards for li-
cense renewal for State-licensed loan originators shall in-
clude the following: 
(1) The loan originator continues to meet the 
minimum standards for license issuance. 
(2) The loan originator has satisfied the annual 
continuing education requirements described in sub-
section (b). 
(b) CONTINUING EDUCATION FOR STATE-LICENSED 
LOAN ORIGINATORS.— 
(1) IN GENERAL.—In order to meet the annual 
continuing education requirements referred to in 
subsection (a)(2), a State-licensed loan originator 
shall complete at least 8 hours of education ap-
proved in accordance with paragraph (2), which 
shall include at least 3 hours of Federal law and 
regulations and 2 hours of ethics, including edu-
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cation on fraud, consumer protection, and fair lend-
ing issues. 
(2) APPROVED
EDUCATIONAL
COURSES.—For 
purposes of paragraph (1), continuing education 
courses shall be reviewed, and published by the Na-
tionwide Mortgage Licensing System and Registry. 
(3) CALCULATION OF CONTINUING EDUCATION 
CREDITS.—A State-licensed loan originator— 
(A) may only receive credit for a con-
tinuing education course in the year in which 
the course is taken; and 
(B) may not take the same approved 
course in the same or successive years to meet 
the annual requirements for continuing edu-
cation. 
(4) INSTRUCTOR
CREDIT.—A State-licensed 
loan originator who is approved as an instructor of 
an approved continuing education course may receive 
credit for the originator’s own annual continuing 
education requirement at the rate of 2 hours credit 
for every 1 hour taught. 
(5) LIMITATION AND STANDARDS.— 
(A) LIMITATION.—To maintain the inde-
pendence of the approval process, the Nation-
wide Mortgage Licensing System and Registry 
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shall not directly or indirectly offer any con-
tinuing education courses for loan originators. 
(B) STANDARDS.—In approving courses 
under this section, the Nationwide Mortgage Li-
censing System and Registry shall apply rea-
sonable standards in the review and approval of 
courses. 
SEC. 106. SYSTEM OF REGISTRATION ADMINISTRATION BY 
FEDERAL BANKING AGENCIES. 
(a) DEVELOPMENT.— 
(1) IN GENERAL.—The Federal banking agen-
cies shall jointly develop and maintain a system for 
registering employees of depository institutions or 
subsidiaries of depository institutions as registered 
loan originators with the Nationwide Mortgage Li-
censing System and Registry. The system shall be 
implemented before the end of the 1-year period be-
ginning on the date of the enactment of this Act. 
(2) REGISTRATION
REQUIREMENTS.—In con-
nection with the registration of any loan originator 
who is an employee of a depository institution or a 
subsidiary of a depository institution with the Na-
tionwide Mortgage Licensing System and Registry, 
the appropriate Federal banking agency shall, at a 
minimum, furnish or cause to be furnished to the 
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Nationwide Mortgage Licensing System and Reg-
istry information concerning the employees’s iden-
tity, including— 
(A) fingerprints for submission to the Fed-
eral Bureau of Investigation, and any govern-
mental agency or entity authorized to receive 
such information for a State and national 
criminal history background check; and 
(B) personal history and experience, in-
cluding authorization for the Nationwide Mort-
gage Licensing System and Registry to obtain 
information related to any administrative, civil 
or criminal findings by any governmental juris-
diction. 
(b) COORDINATION.— 
(1) UNIQUE IDENTIFIER.—The Federal bank-
ing agencies, through the Financial Institutions Ex-
amination Council, shall coordinate with the Nation-
wide Mortgage Licensing System and Registry to es-
tablish protocols for assigning a unique identifier to 
each registered loan originator that will facilitate 
electronic tracking and uniform identification of, and 
public access to, the employment history of and pub-
licly adjudicated disciplinary and enforcement ac-
tions against loan originators. 
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(2) NATIONWIDE
MORTGAGE
LICENSING
SYS-
TEM AND REGISTRY DEVELOPMENT.—To facilitate 
the transfer of information required by subsection 
(a)(2), the Nationwide Mortgage Licensing System 
and Registry shall coordinate with the Federal bank-
ing agencies, through the Financial Institutions Ex-
amination Council, concerning the development and 
operation, by such System and Registry, of the reg-
istration functionality and data requirements for 
loan originators. 
(c) CONSIDERATION
OF
FACTORS
AND
PROCE-
DURES.—In establishing the registration procedures under 
subsection (a) and the protocols for assigning a unique 
identifier to a registered loan originator, the Federal bank-
ing agencies shall make such de minimis exceptions as 
may be appropriate to paragraphs (1)(A) and (2) of sec-
tion 103(a), shall make reasonable efforts to utilize exist-
ing information to minimize the burden of registering loan 
originators, and shall consider methods for automating the 
process to the greatest extent practicable consistent with 
the purposes of this title. 
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SEC. 107. SECRETARY OF HOUSING AND URBAN DEVELOP-
MENT BACKUP AUTHORITY TO ESTABLISH A 
LOAN ORIGINATOR LICENSING SYSTEM. 
(a) BACK UP LICENSING SYSTEM.—If, by the end of 
the 1-year period, or the 2-year period in the case of a 
State whose legislature meets only biennially, beginning 
on the date of the enactment of this Act or at any time 
thereafter, the Secretary determines that a State does not 
have in place by law or regulation a system for licensing 
and registering loan originators that meets the require-
ments of sections 104 and 105 and subsection (d) or does 
not participate in the Nationwide Mortgage Licensing Sys-
tem and Registry, the Secretary shall provide for the es-
tablishment and maintenance of a system for the licensing 
and registration by the Secretary of loan originators oper-
ating in such State as State-licensed loan originators. 
(b) LICENSING
AND
REGISTRATION
REQUIRE-
MENTS.—The system established by the Secretary under 
subsection (a) for any State shall meet the requirements 
of sections 104 and 105 for State-licensed loan origina-
tors. 
(c) UNIQUE IDENTIFIER.—The Secretary shall co-
ordinate with the Nationwide Mortgage Licensing System 
and Registry to establish protocols for assigning a unique 
identifier to each loan originator licensed by the Secretary 
as a State-licensed loan originator that will facilitate elec-
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tronic tracking and uniform identification of, and public 
access to, the employment history of and the publicly adju-
dicated disciplinary and enforcement actions against loan 
originators. 
(d) STATE LICENSING LAW REQUIREMENTS.—For 
purposes of this section, the law in effect in a State meets 
the requirements of this subsection if the Secretary deter-
mines the law satisfies the following minimum require-
ments: 
(1) A State loan originator supervisory author-
ity is maintained to provide effective supervision and 
enforcement of such law, including the suspension, 
termination, or nonrenewal of a license for a viola-
tion of State or Federal law. 
(2) The State loan originator supervisory au-
thority ensures that all State-licensed loan origina-
tors operating in the State are registered with Na-
tionwide Mortgage Licensing System and Registry. 
(3) The State loan originator supervisory au-
thority is required to regularly report violations of 
such law, as well as enforcement actions and other 
relevant information, to the Nationwide Mortgage 
Licensing System and Registry. 
(e) TEMPORARY EXTENSION OF PERIOD.—The Sec-
retary may extend, by not more than 6 months, the 1- 
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year or 2-year period, as the case may be, referred to in 
subsection (a) for the licensing of loan originators in any 
State under a State licensing law that meets the require-
ments of sections 104 and 105 and subsection (d) if the 
Secretary determines that such State is making a good 
faith effort to establish a State licensing law that meets 
such requirements, license mortgage originators under 
such law, and register such originators with the Nation-
wide Mortgage Licensing System and Registry. 
(f) LIMITATION ON HUD-LICENSED LOAN ORIGINA-
TORS.—Any loan originator who is licensed by the Sec-
retary under a system established under this section for 
any State may not use such license to originate loans in 
any other State. 
SEC. 108. BACKUP AUTHORITY TO ESTABLISH A NATION-
WIDE MORTGAGE LICENSING AND REGISTRY 
SYSTEM. 
If at any time the Secretary determines that the Na-
tionwide Mortgage Licensing System and Registry is fail-
ing to meet the requirements and purposes of this title 
for a comprehensive licensing, supervisory, and tracking 
system for loan originators, the Secretary shall establish 
and maintain such a system to carry out the purposes of 
this title and the effective registration and regulation of 
loan originators. 
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SEC. 109. FEES. 
The Federal banking agencies, the Secretary, and the 
Nationwide Mortgage Licensing System and Registry may 
charge reasonable fees to cover the costs of maintaining 
and providing access to information from the Nationwide 
Mortgage Licensing System and Registry to the extent 
such fees are not charged to consumers for access such 
system and registry. 
SEC. 110. BACKGROUND CHECKS OF LOAN ORIGINATORS. 
(a) ACCESS
TO RECORDS.—Notwithstanding any 
other provision of law, in providing identification and 
processing functions, the Attorney General shall provide 
access to all criminal history information to the appro-
priate State officials responsible for regulating State-li-
censed loan originators to the extent criminal history 
background checks are required under the laws of the 
State for the licensing of such loan originators. 
(b) AGENT.—For the purposes of this section and in 
order to reduce the points of contact which the Federal 
Bureau of Investigation may have to maintain for pur-
poses of subsection (a), the Conference of State Bank Su-
pervisors or a wholly owned subsidiary may be used as 
a channeling agent of the States for requesting and dis-
tributing information between the Department of Justice 
and the appropriate State agencies. 
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SEC. 111. CONFIDENTIALITY OF INFORMATION. 
(a) SYSTEM CONFIDENTIALITY.—Except as other-
wise provided in this section, any requirement under Fed-
eral or State law regarding the privacy or confidentiality 
of any information or material provided to the Nationwide 
Mortgage Licensing System and Registry or a system es-
tablished by the Secretary under section 108, and any 
privilege arising under Federal or State law (including the 
rules of any Federal or State court) with respect to such 
information or material, shall continue to apply to such 
information or material after the information or material 
has been disclosed to the system. Such information and 
material may be shared with all State and Federal regu-
latory officials with mortgage industry oversight authority 
without the loss of privilege or the loss of confidentiality 
protections provided by Federal and State laws. 
(b) NONAPPLICABILITY
OF
CERTAIN
REQUIRE-
MENTS.—Information or material that is subject to a 
privilege or confidentiality under subsection (a) shall not 
be subject to— 
(1) disclosure under any Federal or State law 
governing the disclosure to the public of information 
held by an officer or an agency of the Federal Gov-
ernment or the respective State; or 
(2) subpoena or discovery, or admission into 
evidence, in any private civil action or administrative 
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process, unless with respect to any privilege held by 
the Nationwide Mortgage Licensing System and 
Registry or the Secretary with respect to such infor-
mation or material, the person to whom such infor-
mation or material pertains waives, in whole or in 
part, in the discretion of such person, that privilege. 
(c) COORDINATION WITH OTHER LAW.—Any State 
law, including any State open record law, relating to the 
disclosure of confidential supervisory information or any 
information or material described in subsection (a) that 
is inconsistent with subsection (a) shall be superseded by 
the requirements of such provision to the extent State law 
provides less confidentiality or a weaker privilege. 
(d) PUBLIC ACCESS TO INFORMATION.—This section 
shall not apply with respect to the information or material 
relating to the employment history of, and publicly adju-
dicated disciplinary and enforcement actions against, loan 
originators that is included in Nationwide Mortgage Li-
censing System and Registry for access by the public. 
SEC. 112. LIABILITY PROVISIONS. 
The Secretary, any State official or agency, any Fed-
eral banking agency, or any organization serving as the 
administrator of the Nationwide Mortgage Licensing Sys-
tem and Registry or a system established by the Secretary 
under section 108, or any officer or employee of any such 
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entity, shall not be subject to any civil action or proceeding 
for monetary damages by reason of the good-faith action 
or omission of any officer or employee of any such entity, 
while acting within the scope of office or employment, re-
lating to the collection, furnishing, or dissemination of in-
formation concerning persons who are loan originators or 
are applying for licensing or registration as loan origina-
tors. 
SEC. 113. ENFORCEMENT UNDER HUD BACKUP LICENSING 
SYSTEM. 
(a) SUMMONS AUTHORITY.—The Secretary may— 
(1) examine any books, papers, records, or 
other data of any loan originator operating in any 
State which is subject to a licensing system estab-
lished by the Secretary under section 107; and 
(2) summon any loan originator referred to in 
paragraph (1) or any person having possession, cus-
tody, or care of the reports and records relating to 
such loan originator, to appear before the Secretary 
or any delegate of the Secretary at a time and place 
named in the summons and to produce such books, 
papers, records, or other data, and to give testi-
mony, under oath, as may be relevant or material to 
an investigation of such loan originator for compli-
ance with the requirements of this title. 
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(b) EXAMINATION AUTHORITY.— 
(1) IN GENERAL.—If the Secretary establishes 
a licensing system under section 107 for any State, 
the Secretary shall appoint examiners for the pur-
poses of administering such section. 
(2) POWER TO EXAMINE.—Any examiner ap-
pointed under paragraph (1) shall have power, on 
behalf of the Secretary, to make any examination of 
any loan originator operating in any State which is 
subject to a licensing system established by the Sec-
retary under section 107 whenever the Secretary de-
termines an examination of any loan originator is 
necessary to determine the compliance by the origi-
nator with this title. 
(3) REPORT OF EXAMINATION.—Each examiner 
appointed under paragraph (1) shall make a full and 
detailed report of examination of any loan originator 
examined to the Secretary. 
(4) ADMINISTRATION OF OATHS AND AFFIRMA-
TIONS; EVIDENCE.—In connection with examinations 
of loan originators operating in any State which is 
subject to a licensing system established by the Sec-
retary under section 107, or with other types of in-
vestigations to determine compliance with applicable 
law and regulations, the Secretary and examiners 
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appointed by the Secretary may administer oaths 
and affirmations and examine and take and preserve 
testimony under oath as to any matter in respect to 
the affairs of any such loan originator. 
(5) ASSESSMENTS.—The cost of conducting any 
examination of any loan originator operating in any 
State which is subject to a licensing system estab-
lished by the Secretary under section 107 shall be 
assessed by the Secretary against the loan originator 
to meet the Secretary’s expenses in carrying out 
such examination. 
(c) CEASE AND DESIST PROCEEDING.— 
(1) AUTHORITY OF SECRETARY.—If the Sec-
retary finds, after notice and opportunity for hear-
ing, that any person is violating, has violated, or is 
about to violate any provision of this title, or any 
regulation thereunder, with respect to a State which 
is subject to a licensing system established by the 
Secretary under section 107, the Secretary may pub-
lish such findings and enter an order requiring such 
person, and any other person that is, was, or would 
be a cause of the violation, due to an act or omission 
the person knew or should have known would con-
tribute to such violation, to cease and desist from 
committing or causing such violation and any future 
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violation of the same provision, rule, or regulation. 
Such order may, in addition to requiring a person to 
cease and desist from committing or causing a viola-
tion, require such person to comply, or to take steps 
to effect compliance, with such provision or regula-
tion, upon such terms and conditions and within 
such time as the Secretary may specify in such 
order. Any such order may, as the Secretary deems 
appropriate, require future compliance or steps to 
effect future compliance, either permanently or for 
such period of time as the Secretary may specify, 
with such provision or regulation with respect to any 
loan originator. 
(2) HEARING.—The notice instituting pro-
ceedings pursuant to paragraph (1) shall fix a hear-
ing date not earlier than 30 days nor later than 60 
days after service of the notice unless an earlier or 
a later date is set by the Secretary with the consent 
of any respondent so served. 
(3) TEMPORARY
ORDER.—Whenever the Sec-
retary determines that the alleged violation or 
threatened violation specified in the notice insti-
tuting proceedings pursuant to paragraph (1), or the 
continuation thereof, is likely to result in significant 
dissipation or conversion of assets, significant harm 
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to consumers, or substantial harm to the public in-
terest prior to the completion of the proceedings, the 
Secretary may enter a temporary order requiring the 
respondent to cease and desist from the violation or 
threatened violation and to take such action to pre-
vent the violation or threatened violation and to pre-
vent dissipation or conversion of assets, significant 
harm to consumers, or substantial harm to the pub-
lic interest as the Secretary deems appropriate pend-
ing completion of such proceedings. Such an order 
shall be entered only after notice and opportunity for 
a hearing, unless the Secretary determines that no-
tice and hearing prior to entry would be impracti-
cable or contrary to the public interest. A temporary 
order shall become effective upon service upon the 
respondent and, unless set aside, limited, or sus-
pended by the Secretary or a court of competent ju-
risdiction, shall remain effective and enforceable 
pending the completion of the proceedings. 
(4) REVIEW OF TEMPORARY ORDERS.— 
(A) REVIEW BY SECRETARY.—At any time 
after the respondent has been served with a 
temporary cease-and-desist order pursuant to 
paragraph (3), the respondent may apply to the 
Secretary to have the order set aside, limited, 
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the court shall have jurisdiction to enter such 
an order. A respondent served with a temporary 
cease-and-desist order entered without a prior 
hearing before the Secretary may not apply to 
the court except after hearing and decision by 
the Secretary on the respondent’s application 
under subparagraph (A). 
(C) NO AUTOMATIC STAY OF TEMPORARY 
ORDER.—The commencement of proceedings 
under subparagraph (B) shall not, unless spe-
cifically ordered by the court, operate as a stay 
of the Secretary’s order. 
(5) AUTHORITY OF THE SECRETARY TO PRO-
HIBIT PERSONS FROM SERVING AS LOAN ORIGINA-
TORS.—In any cease-and-desist proceeding under 
paragraph (1), the Secretary may issue an order to 
prohibit, conditionally or unconditionally, and per-
manently or for such period of time as the Secretary 
shall determine, any person who has violated this 
title or regulations thereunder, from acting as a loan 
originator if the conduct of that person dem-
onstrates unfitness to serve as a loan originator. 
(d) AUTHORITY
OF
THE SECRETARY TO ASSESS 
MONEY PENALTIES.— 
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(1) IN GENERAL.—The Secretary may impose a 
civil penalty on a loan originator operating in any 
State which is subject to licensing system established 
by the Secretary under section 107 if the Secretary 
finds, on the record after notice and opportunity for 
hearing, that such loan originator has violated or 
failed to comply with any requirement of this title or 
any regulation prescribed by the Secretary under 
this title or order issued under subsection (c). 
(2) MAXIMUM
AMOUNT
OF
PENALTY.—The 
maximum amount of penalty for each act or omis-
sion described in paragraph (1) shall be $5,000 for 
each day the violation continues. 
TITLE II—RESIDENTIAL 
MORTGAGE LOAN DISCLOSURES 
SEC. 201. REQUIRED DISCLOSURES. 
(a) ADDITIONAL INFORMATION.—Section 128(a) of 
Truth in Lending Act (15 U.S.C. 1638(a)) is amended 
by adding at the end the following new paragraphs: 
‘‘(16) In the case of an extension of credit that 
is secured by the dwelling of a consumer, under 
which the annual rate of interest is variable, or with 
respect to which the regular payments may other-
wise be variable, in addition to the other disclosures 
required under this subsection, the disclosures pro-
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vided under this subsection shall state the maximum 
amount of the regular required payments on the 
loan, based on the maximum interest rate allowed, 
introduced with the following language in con-
spicuous type size and format: ‘Your payment can 
go as high as $ll’, the blank to be filled in with 
the maximum possible payment amount. 
‘‘(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-
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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.’’. 
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(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’’; 
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(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). 
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‘‘(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.’’. 
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SEC. 202. 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. 
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‘‘(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.’’. 
TITLE III—OFFICE OF HOUSING 
COUNSELING 
SEC. 301. SHORT TITLE. 
This title may be cited as the ‘‘Expand and Preserve 
Home Ownership Through Counseling Act’’. 
SEC. 302. 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. 
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‘‘(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 
‘‘(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 
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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 
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 
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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 
Expand and Preserve Home Ownership 
Through Counseling Act; 
‘‘(vii) providing for operation of the 
advisory committee established under para-
graph (4) of this subsection; 
‘‘(viii) collaborating with community- 
based organizations with expertise in the 
field of housing counseling; and 
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‘‘(ix) providing for the building of ca-
pacity to provide housing counseling serv-
ices in areas that lack sufficient services. 
‘‘(4) ADVISORY COMMITTEE.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
appoint an advisory committee to provide advice 
regarding the carrying out of the functions of 
the Director. 
‘‘(B) MEMBERS.—Such advisory committee 
shall consist of not more than 12 individuals, 
and the membership of the committee shall 
equally represent all aspects of the mortgage 
and real estate industry, including consumers. 
‘‘(C) TERMS.—Except as provided in sub-
paragraph (D), each member of the advisory 
committee shall be appointed for a term of 3 
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. 
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‘‘(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 
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. 303. COUNSELING PROCEDURES. 
(a) IN GENERAL.—Section 106 of the Housing and 
Urban Development Act of 1968 (12 U.S.C. 1701x) is 
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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, 
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— 
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‘‘(i) section 105(a)(20) of the Housing 
and Community Development Act of 1974 
(42 U.S.C. 5305(a)(20)); 
‘‘(ii) in the United States Housing 
Act of 1937— 
‘‘(I) section 9(e) (42 U.S.C. 
1437g(e)); 
‘‘(II) 
section 
8(y)(1)(D) 
(42 
U.S.C. 1437f(y)(1)(D)); 
‘‘(III) section 18(a)(4)(D) (42 
U.S.C. 1437p(a)(4)(D)); 
‘‘(IV) section 23(c)(4) (42 U.S.C. 
1437u(c)(4)); 
‘‘(V) section 32(e)(4) (42 U.S.C. 
1437z–4(e)(4)); 
‘‘(VI) section 33(d)(2)(B) (42 
U.S.C. 1437z–5(d)(2)(B)); 
‘‘(VII) sections 302(b)(6) and 
303(b)(7) 
(42 
U.S.C. 
1437aaa– 
1(b)(6), 1437aaa–2(b)(7)); and 
‘‘(VIII) section 304(c)(4) (42 
U.S.C. 1437aaa–3(c)(4)); 
‘‘(iii) section 302(a)(4) of the Amer-
ican Homeownership and Economic Oppor-
tunity Act of 2000 (42 U.S.C. 1437f note); 
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‘‘(iv) sections 233(b)(2) and 258(b) of 
the Cranston-Gonzalez National Affordable 
Housing Act (42 U.S.C. 12773(b)(2), 
12808(b)); 
‘‘(v) this section and section 101(e) of 
the Housing and Urban Development Act 
of 1968 (12 U.S.C. 1701x, 1701w(e)); 
‘‘(vi) section 220(d)(2)(G) of the Low- 
Income Housing Preservation and Resident 
Homeownership Act of 1990 (12 U.S.C. 
4110(d)(2)(G)); 
‘‘(vii) sections 422(b)(6), 423(b)(7), 
424(c)(4), 442(b)(6), and 443(b)(6) of the 
Cranston-Gonzalez 
National 
Affordable 
Housing Act (42 U.S.C. 12872(b)(6), 
12873(b)(7), 
12874(c)(4), 
12892(b)(6), 
and 12893(b)(6)); 
‘‘(viii) section 491(b)(1)(F)(iii) of the 
McKinney-Vento Homeless Assistance Act 
(42 U.S.C. 11408(b)(1)(F)(iii)); 
‘‘(ix) 
sections 
202(3) 
and 
810(b)(2)(A) of the Native American 
Housing and Self-Determination Act of 
1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); 
‘‘(x) in the National Housing Act— 
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‘‘(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). 
‘‘(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 
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related to such topics that is provided pursuant 
to— 
‘‘(i) section 105(a)(20) of the Housing 
and Community Development Act of 1974 
(42 U.S.C. 5305(a)(20)); 
‘‘(ii) in the United States Housing 
Act of 1937— 
‘‘(I) section 9(e) (42 U.S.C. 
1437g(e)); 
‘‘(II) section 18(a)(4)(D) (42 
U.S.C. 1437p(a)(4)(D)); 
‘‘(III) 
section 
23(c)(4) 
(42 
U.S.C. 1437u(c)(4)); 
‘‘(IV) section 32(e)(4) (42 U.S.C. 
1437z–4(e)(4)); 
‘‘(V) section 33(d)(2)(B) (42 
U.S.C. 1437z–5(d)(2)(B)); and 
‘‘(VI) 
section 
302(b)(6) 
(42 
U.S.C. 1437aaa–1(b)(6)); 
‘‘(iii) section 233(b)(2) of the 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); 
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‘‘(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-
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 
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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 
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 
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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-
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-
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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 
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. 
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‘‘(C) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There are authorized to be appro-
priated to the Secretary, not to exceed 
$3,000,000 for fiscal years 2009, 2010, and 
2011 for the development, implementation, and 
conducting 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 
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— 
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(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. 304. 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.— 
‘‘(A) IN GENERAL.—The Secretary shall make 
financial assistance available under this paragraph 
to States, units of general local governments, and 
nonprofit organizations providing homeownership or 
rental counseling (as such terms are defined in sub-
section (g)(1)). 
‘‘(B) QUALIFIED
ENTITIES.—The Secretary 
shall establish standards and guidelines for eligibility 
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of organizations (including governmental and non-
profit organizations) to receive assistance under this 
paragraph. 
‘‘(C) DISTRIBUTION.—Assistance made avail-
able under this paragraph shall be distributed in a 
manner that encourages efficient and successful 
counseling programs. 
‘‘(D) AUTHORIZATION OF APPROPRIATIONS.— 
There 
are 
authorized 
to 
be 
appropriated 
$45,000,000 for each of fiscal years 2009 through 
2012 for— 
‘‘(i) the operations of the Office of Hous-
ing Counseling of the Department of Housing 
and Urban Development; 
‘‘(ii) the responsibilities of the Secretary 
under paragraphs (2) through (5) of subsection 
(g); and 
‘‘(iii) assistance pursuant to this para-
graph for entities providing homeownership and 
rental counseling.’’. 
SEC. 305. REQUIREMENTS TO USE HUD-CERTIFIED COUN-
SELORS UNDER HUD PROGRAMS. 
Section 106(e) of the Housing and Urban Develop-
ment Act of 1968 (12 U.S.C. 1701x(e)) is amended— 
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(1) by striking paragraph (1) and inserting the 
following new paragraph: 
‘‘(1) REQUIREMENT FOR ASSISTANCE.—An or-
ganization may not receive assistance for counseling 
activities under subsection (a)(1)(iii), (a)(2), (a)(4), 
(c), or (d) of this section, or under section 101(e), 
unless the organization, or the individuals through 
which the organization provides such counseling, has 
been certified by the Secretary under this subsection 
as competent to provide such counseling.’’; 
(2) in paragraph (2)— 
(A) by inserting ‘‘and for certifying organi-
zations’’ before the period at the end of the 
first sentence; and 
(B) in the second sentence by striking ‘‘for 
certification’’ and inserting ‘‘, for certification 
of an organization, that each individual through 
which the organization provides counseling shall 
demonstrate, and, for certification of an indi-
vidual,’’; 
(3) in paragraph (3), by inserting ‘‘organiza-
tions and’’ before ‘‘individuals’’; 
(4) by redesignating paragraph (3) as para-
graph (5); and 
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(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).’’. 
SEC. 306. 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 
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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. 307. 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-
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 
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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. 308. 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 
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-
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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— 
‘‘(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. 
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‘‘(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 
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 
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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. 
‘‘(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. 
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‘‘(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 
and Urban Development Act of 1968 (12 U.S.C. 
1701x(e)) and located in the area of the lender.’’; 
and 
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(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 
IV—INCENTIVES 
FOR 
BEST PRACTICES AND MORT-
GAGE LOAN MODIFICATION 
SEC. 401. CRA CREDIT FOR CERTAIN LENDER PRACTICES. 
Section 804 of the Community Reinvestment Act of 
1977 (12 U.S.C. 2903) is amended by adding at the end 
the following new subsection: 
‘‘(d) EFFORTS
ON BEHALF
OF SUBPRIME BOR-
ROWERS.—In assessing and taking into account, under 
subsection (a), the record of a regulated financial institu-
tion, the appropriate Federal financial supervisory agency 
may consider as a factor, in accordance with such guide-
lines as the agency may issue, any of the following pro-
grams undertaken by the institution: 
‘‘(1) A program to provide or support the provi-
sion of home ownership or credit counseling to low- 
and moderate-income consumer borrowers through 
programs reasonably available to the consumer that 
have been certified or approved by the Secretary of 
Housing and Urban Development for such purpose. 
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‘‘(2) A program to provide or support the provi-
sion of foreclosure-prevention counseling and other 
prevention efforts to low- and moderate-income con-
sumer borrowers through programs reasonably avail-
able to the consumer that have been certified or ap-
proved by the Secretary of Housing and Urban De-
velopment for such purpose. 
‘‘(3) A program to transition low- and mod-
erate-income consumer borrowers from higher-cost 
mortgage loans to lower-cost mortgage loans.’’. 
SEC. 402. SAFE HARBOR FOR QUALIFIED LOAN MODIFICA-
TIONS OR WORKOUT PLANS FOR CERTAIN 
RESIDENTIAL MORTGAGE LOANS. 
(a) STANDARD FOR LOAN MODIFICATIONS OR WORK-
OUT PLANS.—Absent specific contractual provisions to the 
contrary— 
(1) the duty to maximize, or to not adversely 
affect, the recovery of total proceeds from pooled 
residential mortgage loans is owed by a servicer of 
such pooled loans to the securitization vehicle for the 
benefit of all investors and holders of beneficial in-
terests in the pooled loans, in the aggregate, and not 
to any individual party or group of parties; and 
(2) a servicer of pooled residential mortgage 
loans shall be deemed to be acting on behalf of the 
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securitization vehicle in the best interest of all inves-
tors and holders of beneficial interests in the pooled 
loans, in the aggregate, if for a loan that is in pay-
ment default under the loan agreement or for which 
payment default is imminent or reasonably foresee-
able, the loan servicer makes reasonable and docu-
mented efforts to implement a modification or work-
out plan or, if such efforts are unsuccessful or such 
plan would be infeasible, engages in other loss miti-
gation, including accepting a short payment or par-
tial discharge of principal, or agreeing to a short 
sale of the property, to the extent that the servicer 
reasonably believes the modification or workout plan 
or other mitigation actions will maximize the net 
present value to be realized on the loan over that 
which would be realized through foreclosure. 
(b) SAFE HARBOR.—Absent specific contractual pro-
visions to the contrary, a servicer of a residential mortgage 
loan that acts in a manner consistent with the duty set 
forth in subsection (a), shall not be liable for entering into 
a qualified loan modification or workout plan, to— 
(1) any person, based on that person’s owner-
ship of a residential mortgage loan or any interest 
in a pool of residential mortgage loans or in securi-
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ties that distribute payments out of the principal, in-
terest and other payments in loans on the pool; 
(2) any person who is obligated to make pay-
ments determined in reference to any loan or any in-
terest referred to in paragraph (1); or 
(3) any person that insures any loan or any in-
terest referred to in paragraph (1) under any law or 
regulation of the United States or any law or regula-
tion of any State or political subdivision of any 
State. 
(c) RULE OF CONSTRUCTION.—No provision of this 
section shall be construed as limiting the ability of a 
servicer to enter into loan modifications or workout plans 
other than qualified loan modification or workout plans. 
(d) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
(1) QUALIFIED LOAN MODIFICATION OR WORK-
OUT PLAN.—The term ‘‘qualified loan modification 
or workout plan’’ means a modification or plan 
that— 
(A) is scheduled to remain in place until 
the borrower sells or refinances the property, or 
for at least 5 years from the date of adoption 
of the plan, whichever is sooner; 
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(B) does not provide for a repayment 
schedule that results in negative amortization 
at any time; and 
(C) does not require the borrower to pay 
additional points and fees. 
(2) RESIDENTIAL MORTGAGE LOAN DEFINED.— 
The term ‘‘residential mortgage loan’’ means a loan 
that is secured by a lien on an owner-occupied resi-
dential dwelling. 
(3) 
SECURITIZATION
VEHICLE.—The 
term 
‘‘securitization vehicle’’ means a trust, corporation, 
partnership, limited liability entity, special purpose 
entity, or other structure that— 
(A) is the issuer, or is created by the 
issuer, of mortgage pass-through certificates, 
participation certificates, mortgage-backed secu-
rities, or other similar securities backed by a 
pool of assets that includes residential mortgage 
loans; and 
(B) holds such loans. 
(e) EFFECTIVE PERIOD.—This section shall apply 
only with respect to qualified loan modification or workout 
plans initiated prior to January 1, 2011. 
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TITLE V—FHA MODERNIZATION 
SEC. 501. SHORT TITLE. 
This title may be cited as the ‘‘Expanding American 
Homeownership Act of 2008’’. 
SEC. 502. FINDINGS AND PURPOSES. 
(a) FINDINGS.—The Congress finds that— 
(1) one of the primary missions of the Federal 
Housing Administration (FHA) single family mort-
gage insurance program is to reach borrowers who 
are underserved, or not served, by the existing con-
ventional mortgage marketplace; 
(2) the FHA program has a long history of in-
novation, which includes pioneering the 30-year self- 
amortizing mortgage and a safe-to-seniors reverse 
mortgage product, both of which were once thought 
too risky to private lenders; 
(3) the FHA single family mortgage insurance 
program traditionally has been a major provider of 
mortgage insurance for home purchases; 
(4) the FHA mortgage insurance premium 
structure, as well as FHA’s product offerings, 
should be revised to reflect FHA’s enhanced ability 
to determine risk at the loan level and to allow FHA 
to better respond to changes in the mortgage mar-
ket; 
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(5) during past recessions, including the oil- 
patch downturns in the mid-1980s, FHA remained 
a viable credit enhancer and was therefore instru-
mental in preventing a more catastrophic collapse in 
housing markets and a greater loss of homeowner 
equity; and 
(6) as housing price appreciation slows and in-
terest rates rise, many homeowners and prospective 
homebuyers will need the less-expensive, safer fi-
nancing alternative that FHA mortgage insurance 
provides. 
(b) PURPOSES.—The purposes of this title are— 
(1) to provide flexibility to FHA to allow for 
the insurance of housing loans for low- and mod-
erate-income homebuyers during all economic cycles 
in the mortgage market; 
(2) to modernize the FHA single family mort-
gage insurance program by making it more reflective 
of enhancements to loan-level risk assessments and 
changes to the mortgage market; and 
(3) to adjust the loan limits for the single fam-
ily mortgage insurance program to reflect rising 
house prices and the increased costs associated with 
new construction. 
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SEC. 503. MAXIMUM PRINCIPAL LOAN OBLIGATION. 
Paragraph (2) of section 203(b) of the National 
Housing Act (12 U.S.C. 1709(b)(2)) is amended— 
(1) by striking subparagraphs (A) and (B) and 
inserting the following new subparagraphs: 
‘‘(A) not to exceed the lesser of— 
‘‘(i) in the case of a 1-family resi-
dence, the median 1-family house price in 
the area, as determined by the Secretary; 
and in the case of a 2-, 3-, or 4-family res-
idence, the percentage of such median 
price that bears the same ratio to such me-
dian price as the dollar amount limitation 
in effect under section 305(a)(2) of the 
Federal Home Loan Mortgage Corporation 
Act (12 U.S.C. 1454(a)(2)) for a 2-, 3-, or 
4-family residence, respectively, bears to 
the dollar amount limitation in effect 
under such section for a 1-family resi-
dence; or 
‘‘(ii) 132 percent of the dollar amount 
limitation in effect for 2007 under such 
section 305(a)(2) for a residence of the ap-
plicable size (without regard to any author-
ity to increase such limitations with re-
spect to properties located in Alaska, 
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Guam, Hawaii, or the Virgin Islands), ex-
cept that each such maximum dollar 
amount shall be adjusted effective January 
1 of each year beginning with 2009, by 
adding to or subtracting from each such 
amount (as it may have been previously 
adjusted) a percentage thereof equal to the 
percentage increase or decrease, during the 
most recently completed 12-month or 4- 
quarter period ending before the time of 
determining such annual adjustment, in an 
housing price index developed or selected 
by the Secretary for purposes of adjust-
ments under this clause; 
except that the dollar amount limitation in ef-
fect for any area under this subparagraph may 
not be less than the greater of (I) the dollar 
amount limitation in effect under this section 
for the area on October 21, 1998, or (II) 65 
percent of the dollar limitation determined 
under such section 305(a)(2) for a residence of 
the applicable size; and 
‘‘(B) not to exceed the appraised value of 
the property, plus any initial service charges, 
appraisal, inspection and other fees in connec-
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tion with the mortgage as approved by the Sec-
retary.’’; 
(2) in the matter after and below subparagraph 
(B), by striking the second sentence (relating to a 
definition of ‘‘average closing cost’’) and all that fol-
lows through ‘‘title 38, United States Code’’; and 
(3) by striking the last undesignated paragraph 
(relating to counseling with respect to the respon-
sibilities and financial management involved in 
homeownership). 
SEC. 504. EXTENSION OF MORTGAGE TERM. 
Paragraph (3) of section 203(b) of the National 
Housing Act (12 U.S.C. 1709(b)(3)) is amended— 
(1) by striking ‘‘thirty-five years’’ and inserting 
‘‘forty years’’; and 
(2) by striking ‘‘(or thirty years if such mort-
gage is not approved for insurance prior to construc-
tion)’’. 
SEC. 505. MORTGAGE INSURANCE PREMIUMS. 
Section 203(c) of the National Housing Act (12 
U.S.C. 1709(c)) is amended— 
(1) in paragraph (2), in the matter preceding 
subparagraph (A), by striking ‘‘Notwithstanding’’ 
and inserting ‘‘Except as provided in paragraph (3) 
and notwithstanding’’; and 
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(2) by adding at the end the following new 
paragraph: 
‘‘(3) FLEXIBLE RISK-BASED PREMIUMS.— 
‘‘(A) IN GENERAL.—For any mortgage insured 
by the Secretary under this title that is secured by 
a 1- to 4-family dwelling and for which the loan ap-
plication is received by the mortgagee on or after 
October 1, 2008, the Secretary may establish a 
mortgage insurance premium structure involving a 
single premium payment collected prior to the insur-
ance of the mortgage or annual payments (which 
may be collected on a periodic basis), or both, sub-
ject to the limitations in subparagraphs (B) and (C). 
The rate of premium for such a mortgage may vary 
during the mortgage term as long as the basis for 
determining the variable rate is established before 
the execution of the mortgage. The Secretary may 
change a premium structure established under this 
subparagraph but only to the extent that such 
change is not applied to any mortgage already exe-
cuted. 
‘‘(B) 
MAXIMUM
UP-FRONT
PREMIUM 
AMOUNTS.—For any mortgage insured under a pre-
mium structure established pursuant to this para-
graph, the amount of any single premium payment 
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authorized by subparagraph (A), if established and 
collected prior to the insurance of the mortgage, 
may not exceed the following amount: 
‘‘(i) Except as provided in clauses (ii) and 
(iii), 3.0 percent of the amount of the original 
insured principal obligation of the mortgage. 
‘‘(ii) If the mortgagor has a credit score 
equivalent to a FICO score of 560 or more, 
2.25 percent of the original insured principal 
obligation of the mortgage. 
‘‘(iii) If the annual premium payment is 
equal to the maximum amount allowable under 
clause (i) of subparagraph (C), 1.5 percent of 
the amount of the original insured principal ob-
ligation of the mortgage. 
‘‘(C) MAXIMUM ANNUAL PREMIUM AMOUNTS.— 
For any mortgage insured under a premium struc-
ture established pursuant to this paragraph, the 
amount of any annual premium payment collected 
may not exceed the following amount: 
‘‘(i) Except as provided in clauses (ii) and 
(iii), 2.0 percent of the remaining insured prin-
cipal obligation of the mortgage. 
‘‘(ii) If the mortgagor is a mortgagor de-
scribed in clause (ii) of subparagraph (B), 0.55 
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percent of the remaining insured principal obli-
gation of the mortgage. 
‘‘(iii) If the single premium payment col-
lected at the time of insurance is equal to max-
imum amount allowable under clause (i) of sub-
paragraph (B), 1.0 percent of the remaining in-
sured principal obligation of the mortgage. 
‘‘(D) PAYMENT
INCENTIVE.—Notwithstanding 
subparagraph (C), for any mortgage insured under 
a premium structure established pursuant to this 
paragraph and for which the annual premium pay-
ment exceeds the amount set forth in subparagraph 
(C)(ii), if during the 5-year period beginning upon 
the time of insurance all mortgage insurance pre-
miums for such mortgage have been paid on a timely 
basis, upon the expiration of such period the Sec-
retary shall reduce the amount of the annual pre-
mium payments due thereafter under such mortgage 
to an amount equal to the amount set forth in sub-
paragraph (C)(ii). 
‘‘(E) ESTABLISHMENT
AND
ALTERATION
OF 
PREMIUM STRUCTURE.—A premium structure shall 
be established or changed under subparagraph (A) 
only by providing notice to mortgagees and to the 
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Congress, at least 30 days before the premium 
structure is established or changed. 
‘‘(F) CONSIDERATIONS FOR PREMIUM STRUC-
TURE.—When establishing a premium structure 
under subparagraph (A) or when changing such a 
premium structure, the Secretary shall consider the 
following: 
‘‘(i) The effect of the proposed premium 
structure on the Secretary’s ability to meet the 
operational goals of the Mutual Mortgage In-
surance Fund as provided in section 202(a). 
‘‘(ii) Underwriting variables. 
‘‘(iii) The extent to which new pricing 
under the proposed premium structure has po-
tential for acceptance in the private market. 
‘‘(iv) The administrative capability of the 
Secretary to administer the proposed premium 
structure. 
‘‘(v) The effect of the proposed premium 
structure on the Secretary’s ability to maintain 
the availability of mortgage credit and provide 
stability to mortgage markets.’’. 
SEC. 506. REHABILITATION LOANS. 
Subsection (k) of section 203 of the National Hous-
ing Act (12 U.S.C. 1709(k)) is amended— 
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unpaid purchase price of a fee interest in, or long- 
term leasehold interest in, a one-family unit in a 
multifamily project, including a project in which the 
dwelling units are attached, semi-detached, or de-
tached, and an undivided interest in the common 
areas and facilities which serve the project’’. 
SEC. 509. MUTUAL MORTGAGE INSURANCE FUND. 
(a) IN GENERAL.—Subsection (a) of section 202 of 
the National Housing Act (12 U.S.C. 1708(a)) is amended 
to read as follows: 
‘‘(a) MUTUAL MORTGAGE INSURANCE FUND.— 
‘‘(1) ESTABLISHMENT.—Subject to the provi-
sions of the Federal Credit Reform Act of 1990, 
there is hereby created a Mutual Mortgage Insur-
ance Fund (in this title referred to as the ‘Fund’), 
which shall be used by the Secretary to carry out the 
provisions of this title with respect to mortgages in-
sured under section 203. The Secretary may enter 
into commitments to guarantee, and may guarantee, 
such insured mortgages. 
‘‘(2) LIMIT ON LOAN GUARANTEES.—The au-
thority of the Secretary to enter into commitments 
to guarantee such insured mortgages shall be effec-
tive for any fiscal year only to the extent that the 
aggregate original principal loan amount under such 
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mortgages, any part of which is guaranteed, does 
not exceed the amount specified in appropriations 
Acts for such fiscal year. 
‘‘(3) FIDUCIARY
RESPONSIBILITY.—The Sec-
retary has a responsibility to ensure that the Mutual 
Mortgage Insurance Fund remains financially sound. 
‘‘(4) 
ANNUAL
INDEPENDENT
ACTUARIAL 
STUDY.—The Secretary shall provide for an inde-
pendent actuarial study of the Fund to be conducted 
annually, which shall analyze the financial position 
of the Fund. The Secretary shall submit a report 
annually to the Congress describing the results of 
such study and assessing the financial status of the 
Fund. The report shall recommend adjustments to 
underwriting standards, program participation, or 
premiums, if necessary, to ensure that the Fund re-
mains financially sound. 
‘‘(5) QUARTERLY REPORTS.—During each fiscal 
year, the Secretary shall submit a report to the Con-
gress for each quarter, which shall specify for mort-
gages that are obligations of the Fund— 
‘‘(A) the cumulative volume of loan guar-
antee commitments that have been made during 
such fiscal year through the end of the quarter 
for which the report is submitted; 
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‘‘(B) the types of loans insured, cat-
egorized by risk; 
‘‘(C) any significant changes between ac-
tual and projected claim and prepayment activ-
ity; 
‘‘(D) projected versus actual loss rates; 
and 
‘‘(E) updated projections of the annual 
subsidy rates to ensure that increases in risk to 
the Fund are identified and mitigated by ad-
justments to underwriting standards, program 
participation, or premiums, and the financial 
soundness of the Fund is maintained. 
The first quarterly report under this paragraph shall 
be submitted on the last day of the first quarter of 
fiscal year 2009, or upon the expiration of the 90- 
day period beginning on the date of the enactment 
of the Expanding American Homeownership Act of 
2008, whichever is later. 
‘‘(6) ADJUSTMENT OF PREMIUMS.—If, pursu-
ant to the independent actuarial study of the Fund 
required under paragraph (4), the Secretary deter-
mines that the Fund is not meeting the operational 
goals established under paragraph (7) or there is a 
substantial probability that the Fund will not main-
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tain its established target subsidy rate, the Secretary 
may either make programmatic adjustments under 
section 203 as necessary to reduce the risk to the 
Fund, or make appropriate premium adjustments. 
‘‘(7) OPERATIONAL
GOALS.—The operational 
goals for the Fund are— 
‘‘(A) to charge borrowers under loans that 
are obligations of the Fund an appropriate pre-
mium for the risk that such loans pose to the 
Fund; 
‘‘(B) to minimize the default risk to the 
Fund and to homeowners; 
‘‘(C) to curtail the impact of adverse selec-
tion on the Fund; and 
‘‘(D) to meet the housing needs of the bor-
rowers that the single family mortgage insur-
ance program under this title is designed to 
serve.’’. 
(b) OBLIGATIONS OF FUND.—The National Housing 
Act is amended as follows: 
(1) 
HOMEOWNERSHIP
VOUCHER
PROGRAM 
MORTGAGES.—In 
section 
203(v) 
(12 
U.S.C. 
1709(v))— 
(A) by striking ‘‘Notwithstanding section 
202 of this title, the’’ and inserting ‘‘The’’; and 
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(B) by striking ‘‘General Insurance Fund’’ 
the first place such term appears and all that 
follows and inserting ‘‘Mutual Mortgage Insur-
ance Fund.’’. 
(2) HOME EQUITY CONVERSION MORTGAGES.— 
Section 255(i)(2)(A) of the National Housing Act 
(12 U.S.C. 1715z–20(i)(2)(A)) is amended by strik-
ing ‘‘General Insurance Fund’’ and inserting ‘‘Mu-
tual Mortgage Insurance Fund’’. 
(c) CONFORMING
AMENDMENTS.—The National 
Housing Act is amended— 
(1) in section 205 (12 U.S.C. 1711), by striking 
subsections (g) and (h); and 
(2) in section 519(e) (12 U.S.C. 1735c(e)), by 
striking ‘‘203(b)’’ and all that follows through 
‘‘203(i)’’ and inserting ‘‘203, except as determined 
by the Secretary’’. 
SEC. 510. HAWAIIAN HOME LANDS AND INDIAN RESERVA-
TIONS. 
(a) HAWAIIAN HOME LANDS.—Section 247(c) of the 
National Housing Act (12 U.S.C. 1715z–12) is amend-
ed— 
(1) by striking ‘‘General Insurance Fund estab-
lished in section 519’’ and inserting ‘‘Mutual Mort-
gage Insurance Fund’’; and 
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(2) in the second sentence, by striking ‘‘(1) all 
references’’ and all that follows through ‘‘and (2)’’. 
(b) INDIAN RESERVATIONS.—Section 248(f) of the 
National Housing Act (12 U.S.C. 1715z–13) is amend-
ed— 
(1) by striking ‘‘General Insurance Fund’’ the 
first place it appears through ‘‘519’’ and inserting 
‘‘Mutual Mortgage Insurance Fund’’; and 
(2) in the second sentence, by striking ‘‘(1) all 
references’’ and all that follows through ‘‘and (2)’’. 
SEC. 511. CONFORMING AND TECHNICAL AMENDMENTS. 
(a) REPEALS.—The following provisions of the Na-
tional Housing Act are repealed: 
(1) Subsection (i) of section 203 (12 U.S.C. 
1709(i)). 
(2) Subsection (o) of section 203 (12 U.S.C. 
1709(o)). 
(3) Subsection (p) of section 203 (12 U.S.C. 
1709(p)). 
(4) Subsection (q) of section 203 (12 U.S.C. 
1709(q)). 
(5) Section 222 (12 U.S.C. 1715m). 
(6) Section 237 (12 U.S.C. 1715z–2). 
(7) Section 245 (12 U.S.C. 1715z–10). 
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(b) DEFINITION OF AREA.—Section 203(u)(2)(A) of 
the National Housing Act (12 U.S.C. 1709(u)(2)(A)) is 
amended by striking ‘‘shall’’ and all that follows and in-
serting ‘‘means a metropolitan statistical area as estab-
lished by the Office of Management and Budget;’’. 
(c) DEFINITION OF STATE.—Section 201(d) of the 
National Housing Act (12 U.S.C. 1707(d)) is amended by 
striking ‘‘the Trust Territory of the Pacific Islands’’ and 
inserting ‘‘the Commonwealth of the Northern Mariana 
Islands’’. 
SEC. 512. HOME EQUITY CONVERSION MORTGAGES. 
(a) IN GENERAL.—Section 255 of the National 
Housing Act (12 U.S.C. 1715z–20) is amended— 
(1) in subsection (g)— 
(A) by striking the first sentence; and 
(B) by striking ‘‘established under section 
203(b)(2)’’ and all that follows through ‘‘lo-
cated’’ and inserting ‘‘limitation established 
under section 305(a)(2) of the Federal Home 
Loan Mortgage Corporation Act for a 1-family 
residence’’; 
(2) in subsection (i)(1)(C), by striking ‘‘limita-
tions’’ and inserting ‘‘limitation’’; and 
(3) by adding at the end the following new sub-
section: 
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‘‘(n) AUTHORITY TO INSURE HOME PURCHASE 
MORTGAGE.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision in this section, the Secretary may insure, 
upon application by a mortgagee, a home equity con-
version mortgage upon such terms and conditions as 
the Secretary may prescribe, when the primary pur-
pose of the home equity conversion mortgage is to 
enable an elderly mortgagor to purchase a 1- to 4- 
family dwelling in which the mortgagor will occupy 
or occupies one of the units. 
‘‘(2) LIMITATION ON PRINCIPAL OBLIGATION.— 
A home equity conversion mortgage insured pursu-
ant to paragraph (1) shall involve a principal obliga-
tion that does not exceed the dollar amount limita-
tion determined under section 305(a)(2) of the Fed-
eral Home Loan Mortgage Corporation Act for a 
residence of the applicable size.’’. 
(b) MORTGAGES
FOR COOPERATIVES.—Subsection 
(b) of section 255 of the National Housing Act (12 U.S.C. 
1715z–20(b)) is amended— 
(1) in paragraph (4)— 
(A) by inserting ‘‘a first or subordinate 
mortgage or lien’’ before ‘‘on all stock’’; 
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(B) by inserting ‘‘unit’’ after ‘‘dwelling’’; 
and 
(C) by inserting ‘‘a first mortgage or first 
lien’’ before ‘‘on a leasehold’’; and 
(2) in paragraph (5), by inserting ‘‘a first or 
subordinate lien on’’ before ‘‘all stock’’. 
(c) STUDY REGARDING MORTGAGE INSURANCE PRE-
MIUMS.—The Secretary of Housing and Urban Develop-
ment shall conduct a study regarding mortgage insurance 
premiums charged under the program under section 255 
of the National Housing Act (12 U.S.C. 1715z–20) for 
insurance of home equity conversion mortgages to analyze 
and determine— 
(1) the effects of reducing the amounts of such 
premiums from the amounts charged as of the date 
of the enactment of this Act on— 
(A) costs to mortgagors; and 
(B) the financial soundness of the pro-
gram; and 
(2) the feasibility and effectiveness of exempt-
ing, from all the requirements under the program re-
garding payment of mortgage insurance premiums 
(including both up-front or annual mortgage insur-
ance premiums under section 203(c)(2) of such Act), 
any mortgage insured under the program under 
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which part or all of the amount of future payments 
made to the homeowner are used for costs of a long- 
term care insurance contract covering the mortgagor 
or members of the household residing in the mort-
gaged property. 
SEC. 513. CONFORMING LOAN LIMIT IN DISASTER AREAS. 
Section 203(h) of the National Housing Act (12 
U.S.C. 1709) is amended— 
(1) by inserting after ‘‘property’’ the following: 
‘‘plus any initial service charges, appraisal, inspec-
tion and other fees in connection with the mortgage 
as approved by the Secretary,’’; 
(2) by striking the second sentence (as added 
by chapter 7 of the Emergency Supplemental Appro-
priations Act of 1994 (Public Law 103–211; 108 
Stat. 12)); and 
(3) by adding at the end the following new sen-
tence: ‘‘In any case in which the single family resi-
dence to be insured under this subsection is within 
a jurisdiction in which the President has declared a 
major disaster to have occurred, the Secretary is au-
thorized, for a temporary period not to exceed 36 
months from the date of such Presidential declara-
tion, to enter into agreements to insure a mortgage 
which involves a principal obligation of up to 100 
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percent of the dollar limitation determined under 
section 305(a)(2) of the Federal Home Loan Mort-
gage Corporation Act for a single family residence, 
and not in excess of 100 percent of the appraised 
value of the property plus any initial service charges, 
appraisal, inspection and other fees in connection 
with the mortgage as approved by the Secretary.’’. 
SEC. 514. PARTICIPATION OF MORTGAGE BROKERS AND 
CORRESPONDENT LENDERS. 
(a) DEFINITIONS.— 
(1) IN GENERAL.—Section 201 of the National 
Housing Act (12 U.S.C. 1707) is amended— 
(A) by striking ‘‘As used in section 203 of 
this title—’’ and inserting ‘‘As used in this title 
and for purposes of participation in insurance 
programs under this title, except as specifically 
provided otherwise, the following definitions 
shall apply:’’; 
(B) by striking subsection (b) and insert-
ing the following: 
‘‘(2) The term ‘mortgagee’ means any of the 
following entities, and its successors and assigns, to 
the extent such entity is approved by the Secretary: 
‘‘(A) A lender or correspondent lender, 
who— 
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‘‘(i) makes, underwrites, and services 
mortgages; 
‘‘(ii) submits to the Secretary such fi-
nancial audits performed in accordance 
with the standards for financial audits of 
the Government Auditing Standards issued 
by the Comptroller of the United States; 
‘‘(iii) meet the minimum net worth re-
quirement that the Secretary shall estab-
lish; and 
‘‘(iv) complies with such other re-
quirements as the Secretary may establish. 
‘‘(B) A correspondent lender who— 
‘‘(i) closes a mortgage in its name but 
does not underwrite or service the mort-
gage; 
‘‘(ii) posts a surety bond, in lieu of 
any requirement to provide audited finan-
cial statements or meet a minimum net 
worth requirement, in— 
‘‘(I) a form satisfactory to the 
Secretary; and 
‘‘(II) an amount of $75,000, as 
such amount is adjusted annually by 
the Secretary (as determined under 
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regulations of the Secretary) by the 
change for such year in the Consumer 
Price Index for All Urban Consumers 
published monthly by the Bureau of 
Labor Statistics of the Department of 
Labor; and 
‘‘(iii) complies with such other re-
quirements as the Secretary may establish. 
‘‘(C) A mortgage broker who— 
‘‘(i) closes the mortgage in the name 
of the lender and does not make, under-
write, or service the mortgage; 
‘‘(ii) is licensed, under the laws of the 
State in which the property that is subject 
to the mortgage is located, to act as a 
mortgage broker in such State; 
‘‘(iii) posts a surety bond in accord-
ance with the requirements of subpara-
graph (B)(ii); and 
‘‘(iv) complies with such other re-
quirements as the Secretary may establish. 
‘‘(3) The term ‘mortgagor’ includes the original 
borrower under a mortgage and the successors and 
assigns of the original borrower.’’; 
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100 
(C) in subsection (a), by redesignating 
clauses (1) and (2) as clauses (A) and (B) re-
spectively; and 
(D) by redesignating subsections (a), (c), 
(d), (e), and (f) as paragraphs (1), (4), (5), (6), 
and (7), respectively, and realigning such para-
graphs two ems from the left margin. 
(2) MORTGAGEE REVIEW.—Section 202(c)(7) of 
the National Housing Act (12 U.S.C. 1708(c)(7)) is 
amended— 
(A) in subparagraph (A), by inserting ‘‘, as 
defined in section 201,’’ after ‘‘mortgagee’’; 
(B) by striking subparagraph (B); and 
(C) by redesignating subparagraphs (C) 
and (D) as subparagraphs (B) and (C), respec-
tively. 
(3) MULTIFAMILY
RENTAL
HOUSING
INSUR-
ANCE.—Section 207(a)(2) of the National Housing 
Act (12 U.S.C. 1713(a)(2)) is amended by striking 
‘‘means the original lender under a mortgage, and 
its successors and assigns, and’’ and inserting ‘‘has 
the meaning given such term in section 201, except 
that such term also’’. 
(4) WAR HOUSING INSURANCE.—Section 601(b) 
of the National Housing Act (12 U.S.C. 1736(b)) is 
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101 
amended by striking ‘‘includes the original lender 
under a mortgage, and his successors and assigns 
approved by the Secretary’’ and inserting ‘‘has the 
meaning given such term in section 201’’. 
(5) ARMED SERVICES HOUSING MORTGAGE IN-
SURANCE.—Section 801(b) of the National Housing 
Act (12 U.S.C. 1748(b)) is amended by striking ‘‘in-
cludes the original lender under a mortgage, and his 
successors and assigns approved by the Secretary’’ 
and inserting ‘‘has the meaning given such term in 
section 201’’. 
(6) GROUP
PRACTICE
FACILITIES
MORTGAGE 
INSURANCE.—Section 1106(8) of the National 
Housing Act (12 U.S.C. 1749aaa–5(8)) is amended 
by striking ‘‘means the original lender under a mort-
gage, and his or its successors and assigns, and’’ 
and inserting ‘‘has the meaning given such term in 
section 201, except that such term also’’. 
(b) ELIGIBILITY FOR INSURANCE.— 
(1) TITLE i.—Paragraph (1) of section 8(b) of 
the National Housing Act (12 U.S.C. 1706c(b)(1)) 
is amended— 
(A) by striking ‘‘, and be held by,’’; and 
(B) by striking ‘‘as responsible and able to 
service the mortgage properly’’. 
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102 
(2) SINGLE
FAMILY
HOUSING
MORTGAGE
IN-
SURANCE.—Paragraph (1) of section 203(b) of the 
National Housing Act (12 U.S.C. 1709(b)(1)) is 
amended— 
(A) by striking ‘‘, and be held by,’’; and 
(B) by striking ‘‘as responsible and able to 
service the mortgage properly’’. 
(3) SECTION 221 MORTGAGE
INSURANCE.— 
Paragraph (1) of section 221(d) of the National 
Housing Act (12 U.S.C. 1715l(d)(1)) is amended— 
(A) by striking ‘‘ and be held by’’; and 
(B) by striking ‘‘as responsible and able to 
service the mortgage properly’’. 
(4) HOME EQUITY CONVERSION MORTGAGE IN-
SURANCE.—Paragraph (1) of section 255(d) of the 
National Housing Act (12 U.S.C. 1715z–20(d)(1)) 
is amended by striking ‘‘as responsible and able to 
service the mortgage properly’’. 
(5) WAR
HOUSING
MORTGAGE
INSURANCE.— 
Paragraph (1) of section 603(b) of the National 
Housing Act (12 U.S.C. 1738(b)(1)) is amended— 
(A) by striking ‘‘, and be held by,’’; and 
(B) by striking ‘‘as responsible and able to 
service the mortgage properly’’. 
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103 
(6) WAR HOUSING MORTGAGE INSURANCE FOR 
LARGE-SCALE HOUSING PROJECTS.—Paragraph (1) 
of section 611(b) of the National Housing Act (12 
U.S.C. 1746(b)(1)) is amended— 
(A) by striking ‘‘ and be held by’’; and 
(B) by striking ‘‘as responsible and able to 
service the mortgage properly’’. 
(7) GROUP PRACTICE FACILITY MORTGAGE IN-
SURANCE.—Section 1101(b)(2) of the National 
Housing Act (12 U.S.C. 1749aaa(b)(2)) is amend-
ed— 
(A) by striking ‘‘ and held by’’; and 
(B) by striking ‘‘as responsible and able to 
service the mortgage properly’’. 
(8) NATIONAL
DEFENSE
HOUSING
INSUR-
ANCE.—Paragraph (1) of section 903(b) of the Na-
tional Housing Act (12 U.S.C. 1750b(b)(1)) is 
amended— 
(A) by striking ‘‘, and be held by,’’; and 
(B) by striking ‘‘as responsible and able to 
service the mortgage properly’’. 
SEC. 515. SENSE OF CONGRESS REGARDING TECHNOLOGY 
FOR FINANCIAL SYSTEMS. 
(a) CONGRESSIONAL FINDINGS.—The Congress finds 
the following: 
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104 
(1) The Government Accountability Office has 
cited the FHA single family housing mortgage insur-
ance program as a ‘‘high-risk’’ program, with a pri-
mary reason being non-integrated and out-dated fi-
nancial management systems. 
(2) The ‘‘Audit of the Federal Housing Admin-
istration’s Financial Statements for Fiscal Years 
2004 and 2003’’, conducted by the Inspector Gen-
eral of the Department of Housing and Urban De-
velopment reported as a material weakness that 
‘‘HUD/FHA’s automated data processing [ADP] 
system environment must be enhanced to more effec-
tively support FHA’s business and budget proc-
esses’’. 
(3) Existing technology systems for the FHA 
program have not been updated to meet the latest 
standards of the Mortgage Industry Standards 
Maintenance Organization and have numerous defi-
ciencies that lenders have outlined. 
(4) Improvements to technology used in the 
FHA program will— 
(A) allow the FHA program to improve the 
management of the FHA portfolio, garner 
greater efficiencies in its operations, and lower 
costs across the program; 
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105 
(B) result in efficiencies and lower costs 
for lenders participating in the program, allow-
ing them to better use the FHA products in ex-
tending homeownership opportunities to higher 
credit risk or lower-income families, in a sound 
manner. 
(5) The Mutual Mortgage Insurance Fund op-
erates without cost to the taxpayers and generates 
revenues for the Federal Government. 
(b) SENSE OF CONGRESS.—It is the sense of the 
Congress that— 
(1) the Secretary of Housing and Urban Devel-
opment should use a portion of the funds received 
from premiums paid for FHA single family housing 
mortgage insurance that are in excess of the 
amounts paid out in claims to substantially increase 
the funding for technology used in such FHA pro-
gram; 
(2) the goal of this investment should be to 
bring the technology used in such FHA program to 
the level and sophistication of the technology used in 
the conventional mortgage lending market, or to ex-
ceed such level; and 
(3) the Secretary of Housing and Urban Devel-
opment should report to the Congress not later than 
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106 
180 days after the date of the enactment of this Act 
regarding the progress the Department is making 
toward such goal and if progress is not sufficient, 
the resources needed to make greater progress. 
SEC. 516. SAVINGS PROVISION. 
Any mortgage insured under title II of the National 
Housing Act before the date of enactment of this Act shall 
continue to be governed by the laws, regulations, orders, 
and terms and conditions to which it was subject on the 
day before the date of the enactment of this Act. 
SEC. 517. IMPLEMENTATION. 
The Secretary of Housing and Urban Development 
shall by notice establish any additional requirements that 
may be necessary to immediately carry out the provisions 
of this title. The notice shall take effect upon issuance. 
TITLE VI—HOMEOWNERSHIP 
FOR VETERANS 
SEC. 601. TEMPORARY INCREASE IN MAXIMUM LOAN GUAR-
ANTY AMOUNT FOR HOUSING LOANS GUAR-
ANTEED BY SECRETARY OF VETERANS AF-
FAIRS. 
Section 201(a) of the Economic Stimulus Act of 2008 
(Public Law 110–185; 122 Stat. 613) is amended by add-
ing at the end the following new paragraph: 
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‘‘(3) VA GUARANTEED HOUSING LOANS.—Not-
withstanding 
subparagraph 
(C) 
of 
section 
3703(a)(1) of title 38, United States Code, for pur-
poses of any loan described in that section for which 
the mortgagee issues a loan commitment during the 
period beginning on February 13, 2008, and ending 
at the end of December 31, 2008, the term ‘max-
imum guaranty amount’ means the dollar amount 
that is equal to 25 percent of the amount deter-
mined under paragraph (2) of this subsection for a 
residence of the applicable size located in the area 
in which the residence for which the loan is made is 
located.’’. 
SEC. 602. COUNSELING ON MORTGAGE FORECLOSURES 
FOR MEMBERS OF THE ARMED FORCES RE-
TURNING FROM SERVICE ABROAD. 
(a) IN GENERAL.—The Secretary of Defense shall 
develop and implement a program to advise members of 
the Armed Forces (including members of the National 
Guard and Reserve) who are returning from service on 
active duty abroad (including service in Operation Iraqi 
Freedom and Operation Enduring Freedom) on actions to 
be taken by such members to prevent or forestall mortgage 
foreclosures. 
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(b) ELEMENTS.—The program required by sub-
section (a) shall include the following: 
(1) Credit counseling. 
(2) Home mortgage counseling. 
(3) Such other counseling and information as 
the Secretary considers appropriate for purposes of 
the program. 
(c) TIMING OF PROVISION OF COUNSELING.—Coun-
seling and other information under the program required 
by subsection (a) shall be provided to a member of the 
Armed Forces covered by the program as soon as prac-
ticable after the return of the member from service as de-
scribed in subsection (a). 
SEC. 
603. 
ENHANCEMENT 
OF 
PROTECTIONS 
FOR 
SERVICEMEMBERS 
RELATING 
TO 
MORT-
GAGES AND MORTGAGE FORECLOSURES. 
(a) EXTENSION
OF
PERIOD
OF
PROTECTIONS 
AGAINST MORTGAGE FORECLOSURES.— 
(1) EXTENSION OF PROTECTION PERIOD.—Sub-
section (c) of section 303 of the Servicemembers 
Civil Relief Act (50 U.S.C. App. 533) is amended by 
striking ‘‘90 days’’ and inserting ‘‘9 months’’. 
(2) EXTENSION OF STAY OF PROCEEDINGS PE-
RIOD.—Subsection (b) of such section is amended by 
striking ‘‘90 days’’ and inserting ‘‘9 months’’. 
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109 
(b) TREATMENT OF MORTGAGES AS OBLIGATIONS 
SUBJECT TO INTEREST RATE LIMITATION.—Section 207 
of the Servicemembers Civil Relief Act (50 U.S.C. App. 
527) is amended— 
(1) in subsection (a)(1), by striking ‘‘in excess 
of 6 percent’’ and all that follows and inserting ‘‘in 
excess of 6 percent— 
‘‘(A) during the period of military service 
and one year thereafter, in the case of an obli-
gation or liability consisting of a mortgage, 
trust deed, or other security in the nature of a 
mortgage; or 
‘‘(B) during the period of military service, 
in the case of any other obligation or liability.’’; 
and 
(2) by striking subsection (d) and inserting the 
following new subsection: 
‘‘(d) DEFINITIONS.—In this section: 
‘‘(1) INTEREST.—The term ‘interest’ includes 
service charges, renewal charges, fees, or any other 
charges (except bona fide insurance) with respect to 
an obligation or liability. 
‘‘(2) OBLIGATION
OR
LIABILITY.—The term 
‘obligation or liability’ includes an obligation or li-
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ability consisting of a mortgage, trust deed, or other 
security in the nature of a mortgage.’’. 
(c) EFFECTIVE DATE; SUNSET.— 
(1) EFFECTIVE DATE.—The amendment made 
by subsection (a) shall take effect on the date of the 
enactment of this Act. 
(2) SUNSET.—The amendments made by sub-
section (a) shall expire on December 31, 2010. Ef-
fective January 1, 2011, the provisions of sub-
sections (b) and (c) of section 303 of the 
Servicemembers Civil Relief Act, as in effect on the 
day before the date of the enactment of this Act, are 
hereby revived. 
TITLE VII—MORTGAGE ESCROW 
ACCOUNTS 
SEC. 701. 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 129 the following new section: 
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111 
‘‘SEC. 129A. 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-
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— 
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‘‘(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 
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— 
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113 
‘‘(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 
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 
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114 
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; 
‘‘(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.— 
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‘‘(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 
‘‘(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. 
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‘‘(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-
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 
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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 
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 
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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-
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 
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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 129 the fol-
lowing new item: 
‘‘129A. Escrow or impound accounts relating to certain consumer credit trans-
actions.’’. 
SEC. 702. DISCLOSURE NOTICE REQUIRED FOR CON-
SUMERS WHO WAIVE ESCROW SERVICES. 
(a) IN GENERAL.—Section 129A of the Truth in 
Lending Act (as added by section 701) 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-
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 
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120 
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-
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 
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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 
date of the publication of final regulations in the 
Federal Register. 
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122 
TITLE VIII—MORTGAGE FRAUD 
SEC. 
801. 
AUTHORIZATION 
OF 
APPROPRIATIONS 
FOR 
MORTGAGE FRAUD PREVENTION, INVESTIGA-
TION, AND PROSECUTION. 
For fiscal years 2009, 2010, 2011, 2012, and 2013, 
there are authorized to be appropriated to the Attorney 
General a total of $20,000,000, in addition to other 
amounts authorized to be appropriated to the Attorney 
General for any such fiscal year, for the purpose of en-
hancing the efforts of the Department of Justice and the 
Federal Bureau of Investigation to prevent, investigate, 
and prosecute mortgage fraud. 
TITLE IX—APPRAISAL 
ACTIVITIES 
SEC. 901. PROPERTY APPRAISAL REQUIREMENTS. 
(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 129A (as added by section 701(a)) the fol-
lowing new section: 
‘‘SEC. 129B PROVISIONS APPLICABLE TO NONTRADITIONAL 
MORTGAGES. 
‘‘(a) PROPERTY APPRAISAL REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A creditor may not extend 
credit in the form of a subprime mortgage to any 
consumer without first obtaining a written appraisal 
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123 
of the property to be mortgaged prepared in accord-
ance with the requirements of this subsection. 
‘‘(2) APPRAISAL REQUIREMENTS.— 
‘‘(A) 
PHYSICAL
INSPECTION.—An 
ap-
praisal of property to be secured by a subprime 
mortgage does not meet the requirement of this 
subsection unless it is performed by a qualified 
appraiser who conducts a physical inspection of 
the mortgaged property. 
‘‘(B) SECOND APPRAISAL UNDER CERTAIN 
CIRCUMSTANCES.— 
‘‘(i) IN GENERAL.—If the purpose of 
the subprime mortgage is to finance the 
purchase or acquisition of the mortgaged 
property from a person within 180 days of 
the purchase or acquisition of such prop-
erty by that person at a price that was 
lower than the current sale price of the 
property, the creditor shall obtain a second 
appraisal from a second qualified appraiser 
that supports the current sale price of the 
property. 
‘‘(ii) NO COST TO CONSUMER.—The 
cost of any second appraisal required 
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under clause (i) may not be charged to the 
consumer. 
‘‘(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 property to be appraised 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 
higher-cost mortgage to the consumer without 
charge. 
‘‘(4) 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 
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as required in this subsection shall be liable to the 
consumer for the sum of $2,000.’’. 
(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 129A (as 
added by section 701(c)) the following new item: 
‘‘129B. Provisions applicable to nontraditional mortgages.’’. 
SEC. 902. AMENDMENTS RELATING TO APPRAISAL SUB-
COMMITTEE OF FIEC, APPRAISER INDEPEND-
ENCE, 
AND 
APPROVED 
APPRAISER 
EDU-
CATION. 
(a) 
ANNUAL
REPORT
OF
APPRAISAL
SUB-
COMMITTEE.—Section 1103(a)(4) of Financial Institu-
tions Reform, Recovery, and Enforcement Act of 1989 (12 
U.S.C. 3332(a)(4)) is amended by inserting ‘‘in detail the 
activities of the Appraisal Subcommittee and’’ after 
‘‘which describes’’. 
(b) OPEN MEETINGS.—Section 1104(b) of the Fi-
nancial Institutions Reform, Recovery, and Enforcement 
Act of 1989 (12 U.S.C. 3333(b)) is amended by inserting 
‘‘in public session after notice to the general public’’ after 
‘‘shall meet’’. 
(c) REGULATIONS.—Section 1106 of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 
1989 (12 U.S.C. 3335) is amended by inserting ‘‘prescribe 
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126 
regulations after notice and opportunity for comment,’’ 
after ‘‘hold hearings’’. 
(d) CRITERIA.—Section 1116 of the Financial Insti-
tutions Reform, Recovery, and Enforcement Act of 1989 
(12 U.S.C. 3345) is amended— 
(1) in subsection (c), by inserting ‘‘whose cri-
teria for the licensing of a real estate appraiser cur-
rently meet or exceed the minimum criteria issued 
by the Appraiser Qualifications Board of The Ap-
praiser Foundation for the licensing of real estate 
appraisers’’ before the period at the end; and 
(2) by striking subsection (e). 
(e) TEMPORARY PRACTICE.—Section 1122(a)(1) of 
the Financial Institutions Reform, Recovery, and Enforce-
ment Act of 1989 (12 U.S.C. 3351(a)(1)) is amended— 
(1) by striking subparagraph (A); 
(2) by redesignating subparagraphs (B) and 
(C) as subparagraphs (A) and (B), respectively; and 
(3) by moving the left margin of such subpara-
graphs 2 ems to the right. 
(f) RECIPROCITY.—Subsection (b) of section 1122 of 
the Financial Institutions Reform, Recovery, and Enforce-
ment Act of 1989 (12 U.S.C. 3351(b)) is amended to read 
as follows: 
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127 
‘‘(b) RECIPROCITY.—A State appraiser certifying or 
licensing agency shall issue a reciprocal certification or li-
cense for an individual from another State when— 
‘‘(1) the appraiser licensing and certification 
program of such other State is in compliance with 
the provisions of this title; and 
‘‘(2) the appraiser holds a valid certification 
from a State whose requirements for certification or 
licensing meet the requirements for certification and 
licensing as established by the Appraiser Qualifica-
tions Board of The Appraisal Foundation.’’. 
(g) CONSIDERATION OF PROFESSIONAL APPRAISAL 
DESIGNATIONS.—Section 1122(d) of the Financial Insti-
tutions Reform, Recovery, and Enforcement Act of 1989 
(12 U.S.C. 3351(d)) is amended by adding at the end the 
following new sentence: ‘‘Consideration may be given for 
professional appraisal designations conferred by spon-
soring organizations of The Appraisal Foundation as an 
indication of proficiency in addition to the criteria estab-
lished by certification or licensing.’’. 
(h) APPRAISER INDEPENDENCE.—Section 1122 of 
the Financial Institutions Reform, Recovery, and Enforce-
ment Act of 1989 (12 U.S.C. 3351) is amended by adding 
at the end the following new subsection: 
‘‘(g) APPRAISER INDEPENDENCE.— 
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128 
‘‘(1) IN GENERAL.—No mortgage lender, mort-
gage broker or mortgage banker, real estate broker, 
nor any other person with an interest in a real es-
tate transaction involving an appraisal shall improp-
erly influence or attempt to improperly influence, 
through coercion, extortion, or bribery, the develop-
ment, reporting, result, or review of a real estate ap-
praisal sought in connection with a mortgage loan. 
‘‘(2) EXCEPTIONS.—The requirements of para-
graph (1) shall not be construed as prohibiting a 
mortgage lender, mortgage broker, mortgage banker, 
real estate broker, or any other person with an inter-
est in a real estate transaction from asking an ap-
praiser to provide 1 or more of the following serv-
ices: 
‘‘(A) 
Consider 
additional, 
appropriate 
property information. 
‘‘(B) Provide further detail, substantiation, 
or explanation for the appraiser’s value conclu-
sion. 
‘‘(C) Correct errors in the appraisal re-
port.’’. 
(i) APPRAISER EDUCATION.—Section 1122 of the Fi-
nancial Institutions Reform, Recovery, and Enforcement 
Act of 1989 (12 U.S.C. 3351) is amended by inserting 
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129 
after subsection (g) (as added by subsection (h) of this 
section) the following new subsection: 
‘‘(h) APPROVED EDUCATION.—A State certifying or 
licensing agency shall accept courses and seminars ap-
proved by the Appraiser Qualification Board’s Course Ap-
proval Program.’’. 
SEC. 903. 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 Financial Institutions Reform, 
Recovery, and Enforcement Act of 1989. 
(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 
legislative action, at the Federal or State level, as the 
Comptroller General may determine to be appropriate. 
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130 
TITLE X—FEDERAL HOUSING 
FINANCE REFORM 
SEC. 1001. SHORT TITLE. 
This title may be cited as the ‘‘Federal Housing Fi-
nance Reform Act of 2008’’. 
SEC. 1002. DEFINITIONS. 
Section 1303 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4502) is amended— 
(1) in paragraph (7), by striking ‘‘an enter-
prise’’ and inserting ‘‘a regulated entity’’; 
(2) by striking ‘‘the enterprise’’ each place such 
term appears (except in paragraphs (4) and (18)) 
and inserting ‘‘the regulated entity’’; 
(3) in paragraph (5), by striking ‘‘Office of 
Federal Housing Enterprise Oversight of the De-
partment of Housing and Urban Development’’ and 
inserting ‘‘Federal Housing Finance Agency’’; 
(4) in each of paragraphs (8), (9), (10), and 
(19), by striking ‘‘Secretary’’ each place that term 
appears and inserting ‘‘Director’’; 
(5) in paragraph (13), by inserting ‘‘, with re-
spect to an enterprise,’’ after ‘‘means’’; 
(6) by redesignating paragraphs (16) through 
(19) as paragraphs (20) through (23), respectively; 
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131 
(7) by striking paragraphs (14) and (15) and 
inserting the following new paragraphs: 
‘‘(18) REGULATED ENTITY.—The term ‘regu-
lated entity’ means— 
‘‘(A) the Federal National Mortgage Asso-
ciation and any affiliate thereof; 
‘‘(B) the Federal Home Loan Mortgage 
Corporation and any affiliate thereof; and 
‘‘(C) each Federal home loan bank. 
‘‘(19) 
REGULATED
ENTITY-AFFILIATED 
PARTY.—The term ‘regulated entity-affiliated party’ 
means— 
‘‘(A) any director, officer, employee, or 
agent for, a regulated entity, or controlling 
shareholder of an enterprise; 
‘‘(B) any shareholder, affiliate, consultant, 
or joint venture partner of a regulated entity, 
and any other person, as determined by the Di-
rector (by regulation or on a case-by-case basis) 
that participates in the conduct of the affairs of 
a regulated entity, except that a shareholder of 
a regulated entity shall not be considered to 
have participated in the affairs of that regu-
lated entity solely by reason of being a member 
or customer of the regulated entity; 
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132 
‘‘(C) any independent contractor for a reg-
ulated entity (including any attorney, appraiser, 
or accountant), if— 
‘‘(i) the independent contractor know-
ingly or recklessly participates in— 
‘‘(I) any violation of any law or 
regulation; 
‘‘(II) any breach of fiduciary 
duty; or 
‘‘(III) any unsafe or unsound 
practice; and 
‘‘(ii) such violation, breach, or prac-
tice caused, or is likely to cause, more than 
a minimal financial loss to, or a significant 
adverse effect on, the regulated entity; and 
‘‘(D) any not-for-profit corporation that re-
ceives its principal funding, on an ongoing 
basis, from any regulated entity.’’; 
(8) by redesignating paragraphs (8) through 
(13) as paragraphs (12) through (17), respectively; 
(9) by inserting after paragraph (7) the fol-
lowing new paragraph: 
‘‘(11) FEDERAL HOME LOAN BANK.—The term 
‘Federal home loan bank’ means a bank established 
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133 
under the authority of the Federal Home Loan 
Bank Act.’’; 
(10) by redesignating paragraphs (2) through 
(7) as paragraphs (5) through (10), respectively; 
and 
(11) by inserting after paragraph (1) the fol-
lowing new paragraphs: 
‘‘(2) AGENCY.—The term ‘Agency’ means the 
Federal Housing Finance Agency. 
‘‘(3) AUTHORIZING STATUTES.—The term ‘au-
thorizing statutes’ means— 
‘‘(A) the Federal National Mortgage Asso-
ciation Charter Act; 
‘‘(B) the Federal Home Loan Mortgage 
Corporation Act; and 
‘‘(C) the Federal Home Loan Bank Act. 
‘‘(4) BOARD.—The term ‘Board’ means the 
Federal Housing Enterprise Board established under 
section 1313B.’’. 
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134 
Subtitle A—Reform of Regulation 
of 
Enterprises 
and 
Federal 
Home Loan Banks 
CHAPTER 1—IMPROVEMENT OF SAFETY 
AND SOUNDNESS 
SEC. 1011. ESTABLISHMENT OF THE FEDERAL HOUSING FI-
NANCE AGENCY. 
(a) IN GENERAL.—The Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4501 et seq.) is amend-
ed by striking sections 1311 and 1312 and inserting the 
following: 
‘‘SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING 
FINANCE AGENCY. 
‘‘(a) ESTABLISHMENT.—There is established the 
Federal Housing Finance Agency, which shall be an inde-
pendent agency of the Federal Government. 
‘‘(b) GENERAL SUPERVISORY AND REGULATORY AU-
THORITY.— 
‘‘(1) IN GENERAL.—Each regulated entity shall, 
to the extent provided in this title, be subject to the 
supervision and regulation of the Agency. 
‘‘(2) AUTHORITY OVER FANNIE MAE, FREDDIE 
MAC, AND FEDERAL HOME LOAN BANKS.—The Di-
rector of the Federal Housing Finance Agency shall 
have general supervisory and regulatory authority 
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135 
over each regulated entity and shall exercise such 
general regulatory and supervisory authority, includ-
ing such duties and authorities set forth under sec-
tion 1313 of this Act, to ensure that the purposes 
of this Act, the authorizing statutes, and any other 
applicable law are carried out. The Director shall 
have the same supervisory and regulatory authority 
over any joint office of the Federal home loan banks, 
including the Office of Finance of the Federal Home 
Loan Banks, as the Director has over the individual 
Federal home loan banks. 
‘‘(c) SAVINGS PROVISION.—The authority of the Di-
rector to take actions under subtitles B and C shall not 
in any way limit the general supervisory and regulatory 
authority granted to the Director. 
‘‘SEC. 1312. DIRECTOR. 
‘‘(a) ESTABLISHMENT OF POSITION.—There is estab-
lished the position of the Director of the Federal Housing 
Finance Agency, who shall be the head of the Agency. 
‘‘(b) APPOINTMENT; TERM.— 
‘‘(1) APPOINTMENT.—The Director shall be ap-
pointed by the President, by and with the advice and 
consent of the Senate, from among individuals who 
are citizens of the United States, have a dem-
onstrated understanding of financial management or 
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136 
oversight, and have a demonstrated understanding 
of capital markets, including the mortgage securities 
markets and housing finance. 
‘‘(2) TERM AND REMOVAL.—The Director shall 
be appointed for a term of 5 years and may be re-
moved by the President only for cause. 
‘‘(3) VACANCY.—A vacancy in the position of 
Director that occurs before the expiration of the 
term for which a Director was appointed shall be 
filled in the manner established under paragraph 
(1), and the Director appointed to fill such vacancy 
shall be appointed only for the remainder of such 
term. 
‘‘(4) SERVICE AFTER END OF TERM.—An indi-
vidual may serve as the Director after the expiration 
of the term for which appointed until a successor 
has been appointed. 
‘‘(5) 
TRANSITIONAL
PROVISION.—Notwith-
standing paragraphs (1) and (2), the Director of the 
Office of Federal Housing Enterprise Oversight of 
the Department of Housing and Urban Development 
shall serve as the Director until a successor has been 
appointed under paragraph (1). 
‘‘(c) DEPUTY DIRECTOR OF THE DIVISION OF EN-
TERPRISE REGULATION.— 
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137 
‘‘(1) IN GENERAL.—The Agency shall have a 
Deputy Director of the Division of Enterprise Regu-
lation, who shall be appointed by the Director from 
among individuals who are citizens of the United 
States, and have a demonstrated understanding of 
financial management or oversight and of mortgage 
securities markets and housing finance. 
‘‘(2) FUNCTIONS.—The Deputy Director of the 
Division of Enterprise Regulation shall have such 
functions, powers, and duties with respect to the 
oversight of the enterprises as the Director shall pre-
scribe. 
‘‘(d) DEPUTY DIRECTOR OF THE DIVISION OF FED-
ERAL HOME LOAN BANK REGULATION.— 
‘‘(1) IN GENERAL.—The Agency shall have a 
Deputy Director of the Division of Federal Home 
Loan Bank Regulation, who shall be appointed by 
the Director from among individuals who are citi-
zens of the United States, have a demonstrated un-
derstanding of financial management or oversight 
and of the Federal Home Loan Bank System and 
housing finance. 
‘‘(2) FUNCTIONS.—The Deputy Director of the 
Division of Federal Home Loan Bank Regulation 
shall have such functions, powers, and duties with 
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138 
respect to the oversight of the Federal home loan 
banks as the Director shall prescribe. 
‘‘(e) DEPUTY DIRECTOR FOR HOUSING.— 
‘‘(1) IN GENERAL.—The Agency shall have a 
Deputy Director for Housing, who shall be ap-
pointed by the Director from among individuals who 
are citizens of the United States, and have a dem-
onstrated understanding of the housing markets and 
housing finance and of community and economic de-
velopment. 
‘‘(2) FUNCTIONS.—The Deputy Director for 
Housing shall have such functions, powers, and du-
ties with respect to the oversight of the housing mis-
sion and goals of the enterprises, and with respect 
to oversight of the housing finance and community 
and economic development mission of the Federal 
home loan banks, as the Director shall prescribe. 
‘‘(f) LIMITATIONS.—The Director and each of the 
Deputy Directors may not— 
‘‘(1) have any direct or indirect financial inter-
est in any regulated entity or regulated entity-affili-
ated party; 
‘‘(2) hold any office, position, or employment in 
any regulated entity or regulated entity-affiliated 
party; or 
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139 
‘‘(3) have served as an executive officer or di-
rector of any regulated entity, or regulated entity-af-
filiated party, at any time during the 3-year period 
ending on the date of appointment of such individual 
as Director or Deputy Director. 
‘‘(g) OMBUDSMAN.—The Director shall establish the 
position of the Ombudsman in the Agency. The Director 
shall provide that the Ombudsman will consider com-
plaints and appeals from any regulated entity and any per-
son that has a business relationship with a regulated enti-
ty and shall specify the duties and authority of the Om-
budsman.’’. 
(b) APPOINTMENT OF DIRECTOR.—Notwithstanding 
any other provision of law or of this title, the President 
may, any time after the date of the enactment of this Act, 
appoint an individual to serve as the Director of the Fed-
eral Housing Finance Agency, as such office is established 
by the amendment made by subsection (a). This sub-
section shall take effect on the date of the enactment of 
this Act. 
SEC. 1012. DUTIES AND AUTHORITIES OF DIRECTOR. 
(a) IN GENERAL.—The Housing and Community De-
velopment Act of 1992 (12 U.S.C. 4513) is amended by 
striking section 1313 and inserting the following new sec-
tions: 
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140 
‘‘SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR. 
‘‘(a) DUTIES.— 
‘‘(1) PRINCIPAL DUTIES.—The principal duties 
of the Director shall be— 
‘‘(A) to oversee the operations of each reg-
ulated entity and any joint office of the Federal 
Home Loan Banks; and 
‘‘(B) to ensure that— 
‘‘(i) each regulated entity operates in 
a safe and sound manner, including main-
tenance of adequate capital and internal 
controls; 
‘‘(ii) the operations and activities of 
each regulated entity foster liquid, effi-
cient, competitive, and resilient national 
housing finance markets that minimize the 
cost of housing finance (including activities 
relating to mortgages on housing for low- 
and moderate-income families involving a 
reasonable economic return that may be 
less than the return earned on other activi-
ties); 
‘‘(iii) each regulated entity complies 
with this title and the rules, regulations, 
guidelines, and orders issued under this 
title and the authorizing statutes; and 
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141 
‘‘(iv) each regulated entity carries out 
its statutory mission only through activi-
ties that are consistent with this title and 
the authorizing statutes. 
‘‘(2) SCOPE OF AUTHORITY.—The authority of 
the Director shall include the authority— 
‘‘(A) to review and, if warranted based on 
the principal duties described in paragraph (1), 
reject any acquisition or transfer of a control-
ling interest in an enterprise; and 
‘‘(B) to exercise such incidental powers as 
may be necessary or appropriate to fulfill the 
duties and responsibilities of the Director in the 
supervision and regulation of each regulated en-
tity. 
‘‘(b) DELEGATION
OF AUTHORITY.—The Director 
may delegate to officers or employees of the Agency, in-
cluding each of the Deputy Directors, any of the functions, 
powers, or duties of the Director, as the Director considers 
appropriate. 
‘‘(c) LITIGATION AUTHORITY.— 
‘‘(1) IN GENERAL.—In enforcing any provision 
of this title, any regulation or order prescribed under 
this title, or any other provision of law, rule, regula-
tion, or order, or in any other action, suit, or pro-
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142 
ceeding to which the Director is a party or in which 
the Director is interested, and in the administration 
of conservatorships and receiverships, the Director 
may act in the Director’s own name and through the 
Director’s own attorneys, or request that the Attor-
ney General of the United States act on behalf of 
the Director. 
‘‘(2) CONSULTATION
WITH
ATTORNEY
GEN-
ERAL.—The Director shall provide notice to, and 
consult with, the Attorney General of the United 
States before taking an action under paragraph (1) 
of this subsection or under section 1344(a), 1345(d), 
1348(c), 1372(e), 1375(a), 1376(d), or 1379D(c), 
except that, if the Director determines that any 
delay caused by such prior notice and consultation 
may adversely affect the safety and soundness re-
sponsibilities of the Director under this title, the Di-
rector shall notify the Attorney General as soon as 
reasonably possible after taking such action. 
‘‘(3) SUBJECT TO SUIT.—Except as otherwise 
provided by law, the Director shall be subject to suit 
(other than suits on claims for money damages) by 
a regulated entity or director or officer thereof with 
respect to any matter under this title or any other 
applicable provision of law, rule, order, or regulation 
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143 
under this title, in the United States district court 
for the judicial district in which the regulated entity 
has its principal place of business, or in the United 
States District Court for the District of Columbia, 
and the Director may be served with process in the 
manner prescribed by the Federal Rules of Civil 
Procedure. 
‘‘SEC. 1313A. PRUDENTIAL MANAGEMENT AND OPERATIONS 
STANDARDS. 
‘‘(a) STANDARDS.—The Director shall establish 
standards, by regulation, guideline, or order, for each reg-
ulated entity relating to— 
‘‘(1) adequacy of internal controls and informa-
tion systems, including information security and pri-
vacy policies and practices, taking into account the 
nature and scale of business operations; 
‘‘(2) independence and adequacy of internal 
audit systems; 
‘‘(3) management of credit and counterparty 
risk, including systems to identify concentrations of 
credit risk and prudential limits to restrict exposure 
of the regulated entity to a single counterparty or 
groups of related counterparties; 
‘‘(4) management of interest rate risk exposure; 
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144 
‘‘(5) management of market risk, including 
standards that provide for systems that accurately 
measure, monitor, and control market risks and, as 
warranted, that establish limitations on market risk; 
‘‘(6) adequacy and maintenance of liquidity and 
reserves; 
‘‘(7) management of any asset and investment 
portfolio; 
‘‘(8) investments and acquisitions by a regu-
lated entity, to ensure that they are consistent with 
the purposes of this Act and the authorizing stat-
utes; 
‘‘(9) maintenance of adequate records, in ac-
cordance with consistent accounting policies and 
practices that enable the Director to evaluate the fi-
nancial condition of the regulated entity; 
‘‘(10) issuance of subordinated debt by that 
particular regulated entity, as the Director considers 
necessary; 
‘‘(11) overall risk management processes, in-
cluding adequacy of oversight by senior management 
and the board of directors and of processes and poli-
cies to identify, measure, monitor, and control mate-
rial risks, including reputational risks, and for ade-
quate, well-tested business resumption plans for all 
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145 
major systems with remote site facilities to protect 
against disruptive events; and 
‘‘(12) such other operational and management 
standards as the Director determines to be appro-
priate. 
‘‘(b) FAILURE TO MEET STANDARDS.— 
‘‘(1) PLAN REQUIREMENT.— 
‘‘(A) IN GENERAL.—If the Director deter-
mines that a regulated entity fails to meet any 
standard established under subsection (a)— 
‘‘(i) if such standard is established by 
regulation, the Director shall require the 
regulated entity to submit an acceptable 
plan to the Director within the time al-
lowed under subparagraph (C); and 
‘‘(ii) if such standard is established by 
guideline, the Director may require the 
regulated entity to submit a plan described 
in clause (i). 
‘‘(B) 
CONTENTS.—Any 
plan 
required 
under subparagraph (A) shall specify the ac-
tions that the regulated entity will take to cor-
rect the deficiency. If the regulated entity is 
undercapitalized, the plan may be a part of the 
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146 
capital restoration plan for the regulated entity 
under section 1369C. 
‘‘(C) DEADLINES
FOR
SUBMISSION
AND 
REVIEW.—The Director shall by regulation es-
tablish deadlines that— 
‘‘(i) provide the regulated entities with 
reasonable time to submit plans required 
under subparagraph (A), and generally re-
quire a regulated entity to submit a plan 
not later than 30 days after the Director 
determines that the entity fails to meet 
any standard established under subsection 
(a); and 
‘‘(ii) require the Director to act on 
plans expeditiously, and generally not later 
than 30 days after the plan is submitted. 
‘‘(2) REQUIRED ORDER UPON FAILURE TO SUB-
MIT OR IMPLEMENT PLAN.—If a regulated entity 
fails to submit an acceptable plan within the time al-
lowed under paragraph (1)(C), or fails in any mate-
rial respect to implement a plan accepted by the Di-
rector, the following shall apply: 
‘‘(A) REQUIRED
CORRECTION
OF
DEFI-
CIENCY.—The Director shall, by order, require 
the regulated entity to correct the deficiency. 
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147 
‘‘(B) OTHER
AUTHORITY.—The Director 
may, by order, take one or more of the fol-
lowing actions until the deficiency is corrected: 
‘‘(i) Prohibit the regulated entity from 
permitting its average total assets (as such 
term is defined in section 1316(b)) during 
any calendar quarter to exceed its average 
total assets during the preceding calendar 
quarter, or restrict the rate at which the 
average total assets of the entity may in-
crease from one calendar quarter to an-
other. 
‘‘(ii) Require the regulated entity— 
‘‘(I) in the case of an enterprise, 
to increase its ratio of core capital to 
assets. 
‘‘(II) in the case of a Federal 
home loan bank, to increase its ratio 
of total capital (as such term is de-
fined in section 6(a)(5) of the Federal 
Home Loan Bank Act (12 U.S.C. 
1426(a)(5))) to assets. 
‘‘(iii) Require the regulated entity to 
take any other action that the Director de-
termines will better carry out the purposes 
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148 
of this section than any of the actions de-
scribed in this subparagraph. 
‘‘(3) MANDATORY
RESTRICTIONS.—In com-
plying with paragraph (2), the Director shall take 
one or more of the actions described in clauses (i) 
through (iii) of paragraph (2)(B) if— 
‘‘(A) the Director determines that the reg-
ulated entity fails to meet any standard pre-
scribed under subsection (a); 
‘‘(B) the regulated entity has not corrected 
the deficiency; and 
‘‘(C) during the 18-month period before 
the date on which the regulated entity first 
failed to meet the standard, the entity under-
went extraordinary growth, as defined by the 
Director. 
‘‘(c) OTHER ENFORCEMENT AUTHORITY NOT AF-
FECTED.—The authority of the Director under this sec-
tion is in addition to any other authority of the Director.’’. 
(b) INDEPENDENCE IN CONGRESSIONAL TESTIMONY 
AND RECOMMENDATIONS.—Section 111 of Public Law 
93–495 (12 U.S.C. 250) is amended by striking ‘‘the Fed-
eral Housing Finance Board’’ and inserting ‘‘the Director 
of the Federal Housing Finance Agency’’. 
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149 
SEC. 1013. FEDERAL HOUSING ENTERPRISE BOARD. 
(a) IN GENERAL.—Title XIII of the Housing and 
Community Development Act of 1992 (12 U.S.C. 4501 et 
seq.) is amended by inserting after section 1313A, as 
added by section 1002 of this title, the following new sec-
tion: 
‘‘SEC. 1313B. FEDERAL HOUSING ENTERPRISE BOARD. 
‘‘(a) IN GENERAL.—There is established the Federal 
Housing Enterprise Board, which shall advise the Director 
with respect to overall strategies and policies in carrying 
out the duties of the Director under this title. 
‘‘(b) LIMITATIONS.—The Board may not exercise any 
executive authority, and the Director may not delegate to 
the Board any of the functions, powers, or duties of the 
Director. 
‘‘(c) COMPOSITION.—The Board shall be comprised 
of 3 members, of whom— 
‘‘(1) one member shall be the Secretary of the 
Treasury; 
‘‘(2) one member shall be the Secretary of 
Housing and Urban Development; and 
‘‘(3) one member shall be the Director, who 
shall serve as the Chairperson of the Board. 
‘‘(d) MEETINGS.— 
‘‘(1) IN GENERAL.—The Board shall meet upon 
notice by the Director, but in no event shall the 
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Board meet less frequently than once every 3 
months. 
‘‘(2) SPECIAL MEETINGS.—Either the Secretary 
of the Treasury or the Secretary of Housing and 
Urban Development may, upon giving written notice 
to the Director, require a special meeting of the 
Board. 
‘‘(e) TESTIMONY.—On an annual basis, the Board 
shall testify before Congress regarding— 
‘‘(1) the safety and soundness of the regulated 
entities; 
‘‘(2) any material deficiencies in the conduct of 
the operations of the regulated entities; 
‘‘(3) the overall operational status of the regu-
lated entities; 
‘‘(4) an evaluation of the performance of the 
regulated entities in carrying out their respective 
missions; 
‘‘(5) operations, resources, and performance of 
the Agency; and 
‘‘(6) such other matters relating to the Agency 
and its fulfillment of its mission, as the Board deter-
mines appropriate.’’. 
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151 
(b) ANNUAL REPORT OF THE DIRECTOR.—Section 
1319B(a) of the Housing and Community Development 
Act of 1992 (12 U.S.C. 4521(a)) is amended— 
(1) in paragraph (3), by striking ‘‘and’’ at the 
end; and 
(2) by striking paragraph (4) and inserting the 
following new paragraphs: 
‘‘(4) an assessment of the Board or any of its 
members with respect to— 
‘‘(A) the safety and soundness of the regu-
lated entities; 
‘‘(B) any material deficiencies in the con-
duct of the operations of the regulated entities; 
‘‘(C) the overall operational status of the 
regulated entities; and 
‘‘(D) an evaluation of the performance of 
the regulated entities in carrying out their mis-
sions; 
‘‘(5) operations, resources, and performance of 
the Agency; 
‘‘(6) a description of the demographic makeup 
of the workforce of the Agency; and 
‘‘(7) such other matters relating to the Agency 
and its fulfillment of its mission.’’. 
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152 
SEC. 1014. AUTHORITY TO REQUIRE REPORTS BY REGU-
LATED ENTITIES. 
Section 1314 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4514) is amended— 
(1) in the section heading, by striking ‘‘ENTER-
PRISES’’ and inserting ‘‘REGULATED ENTITIES’’; 
(2) in subsection (a)— 
(A) in the subsection heading, by striking 
‘‘SPECIAL REPORTS AND REPORTS OF FINAN-
CIAL
CONDITION’’ and inserting ‘‘REGULAR 
AND SPECIAL REPORTS’’; 
(B) in paragraph (1)— 
(i) in the paragraph heading, by strik-
ing ‘‘FINANCIAL CONDITION’’ and inserting 
‘‘REGULAR REPORTS’’; and 
(ii) by striking ‘‘reports of financial 
condition and operations’’ and inserting 
‘‘regular reports on the condition (includ-
ing financial condition), management, ac-
tivities, or operations of the regulated enti-
ty, as the Director considers appropriate’’; 
and 
(C) in paragraph (2), after ‘‘submit special 
reports’’ insert ‘‘on any of the topics specified 
in paragraph (1) or such other topics’’; and 
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153 
(3) by adding at the end the following new sub-
section: 
‘‘(c) REPORTS OF FRAUDULENT FINANCIAL TRANS-
ACTIONS.— 
‘‘(1) REQUIREMENT TO REPORT.—The Director 
shall require a regulated entity to submit to the Di-
rector a timely report upon discovery by the regu-
lated entity that it has purchased or sold a fraudu-
lent loan or financial instrument or suspects a pos-
sible fraud relating to a purchase or sale of any loan 
or financial instrument. The Director shall require 
the regulated entities to establish and maintain pro-
cedures designed to discover any such transactions. 
‘‘(2) PROTECTION
FROM
LIABILITY
FOR
RE-
PORTS.— 
‘‘(A) IN GENERAL.—If a regulated entity 
makes a report pursuant to paragraph (1), or 
a regulated entity-affiliated party makes, or re-
quires another to make, such a report, and such 
report is made in a good faith effort to comply 
with the requirements of paragraph (1), such 
regulated entity or regulated entity-affiliated 
party shall not be liable to any person under 
any law or regulation of the United States, any 
constitution, law, or regulation of any State or 
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154 
political subdivision of any State, or under any 
contract or other legally enforceable agreement 
(including any arbitration agreement), for such 
report or for any failure to provide notice of 
such report to the person who is the subject of 
such report or any other person identified in 
the report. 
‘‘(B) RULE OF CONSTRUCTION.—Subpara-
graph (A) shall not be construed as creating— 
‘‘(i) any inference that the term ‘per-
son’, as used in such subparagraph, may 
be construed more broadly than its ordi-
nary usage so as to include any govern-
ment or agency of government; or 
‘‘(ii) any immunity against, or other-
wise affecting, any civil or criminal action 
brought by any government or agency of 
government to enforce any constitution, 
law, or regulation of such government or 
agency.’’. 
SEC. 1015. DISCLOSURE OF INCOME AND CHARITABLE CON-
TRIBUTIONS BY ENTERPRISES. 
Section 1314 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4514), as amended by 
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155 
the preceding provisions of this title, is further amended 
by adding at the end the following new subsections: 
‘‘(d) DISCLOSURE OF CHARITABLE CONTRIBUTIONS 
BY ENTERPRISES.— 
‘‘(1) REQUIRED
DISCLOSURE.—The Director 
shall, by regulation, require each enterprise to sub-
mit a report annually, in a format designated by the 
Director, containing the following information: 
‘‘(A) TOTAL VALUE.—The total value of 
contributions made by the enterprise to non-
profit organizations during its previous fiscal 
year. 
‘‘(B) SUBSTANTIAL
CONTRIBUTIONS.—If 
the value of contributions made by the enter-
prise to any nonprofit organization during its 
previous fiscal year exceeds the designated 
amount, the name of that organization and the 
value of contributions. 
‘‘(C) SUBSTANTIAL CONTRIBUTIONS TO IN-
SIDER-AFFILIATED
CHARITIES.—Identification 
of each contribution whose value exceeds the 
designated amount that were made by the en-
terprise during the enterprise’s previous fiscal 
year to any nonprofit organization of which a 
director, officer, or controlling person of the en-
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156 
terprise, or a spouse thereof, was a director or 
trustee, the name of such nonprofit organiza-
tion, and the value of the contribution. 
‘‘(2) DEFINITIONS.—For purposes of this sub-
section— 
‘‘(A) the term ‘designated amount’ means 
such amount as may be designated by the Di-
rector by regulation, consistent with the public 
interest and the protection of investors for pur-
poses of this subsection; and 
‘‘(B) the Director may, by such regulations 
as the Director deems necessary or appropriate 
in the public interest, define the terms officer 
and controlling person. 
‘‘(3) PUBLIC
AVAILABILITY.—The Director 
shall make the information submitted pursuant to 
this subsection publicly available. 
‘‘(e) DISCLOSURE
OF
INCOME.—Each enterprise 
shall include, in each annual report filed under section 13 
of the Securities Exchange Act of 1934 (15 U.S.C. 78m), 
the income reported by the issuer to the Internal Revenue 
Service for the most recent taxable year. Such income 
shall— 
‘‘(1) be presented in a prominent location in 
each such report and in a manner that permits a 
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157 
ready comparison of such income to income other-
wise required to be included in such reports under 
regulations issued under such section; and 
‘‘(2) be submitted to the Securities and Ex-
change Commission in a form and manner suitable 
for entry into the EDGAR system of such Commis-
sion for public availability under such system.’’. 
SEC. 1016. ASSESSMENTS. 
Section 1316 of the Housing and Community Devel-
opment Act of 1992 (12 U.S.C. 4516) is amended— 
(1) by striking subsection (a) and inserting the 
following new subsection: 
‘‘(a) ANNUAL ASSESSMENTS.—The Director shall es-
tablish and collect from the regulated entities annual as-
sessments in an amount not exceeding the amount suffi-
cient to provide for reasonable costs and expenses of the 
Agency, including— 
‘‘(1) the expenses of any examinations under 
section 1317 of this Act and under section 20 of the 
Federal Home Loan Bank Act; 
‘‘(2) the expenses of obtaining any reviews and 
credit assessments under section 1319; 
‘‘(3) such amounts in excess of actual expenses 
for any given year as deemed necessary by the Di-
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158 
rector to maintain a working capital fund in accord-
ance with subsection (e); and 
‘‘(4) the wind up of the affairs of the Office of 
Federal Housing Enterprise Oversight and the Fed-
eral Housing Finance Board under title III of the 
Federal Housing Finance Reform Act of 2008.’’; 
(2) in subsection (b)— 
(A) in the subsection heading, by striking 
‘‘ENTERPRISES’’ and inserting ‘‘REGULATED 
ENTITIES’’; 
(B) by realigning paragraph (2) two ems 
from the left margin, so as to align the left 
margin of such paragraph with the left margins 
of paragraph (1); 
(C) in paragraph (1)— 
(i) by striking ‘‘Each enterprise’’ and 
inserting ‘‘Each regulated entity’’; 
(ii) by striking ‘‘each enterprise’’ and 
inserting ‘‘each regulated entity’’; and 
(iii) by striking ‘‘both enterprises’’ 
and inserting ‘‘all of the regulated enti-
ties’’; and 
(D) in paragraph (3)— 
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159 
(i) in subparagraph (B), by striking 
‘‘subparagraph (A)’’ and inserting ‘‘clause 
(i)’’; 
(ii) by redesignating subparagraphs 
(A), (B), and (C) as clauses (i), (ii) and 
(ii), respectively, and realigning such 
clauses, as so redesignated, so as to be in-
dented 6 ems from the left margin; 
(iii) by striking the matter that pre-
cedes clause (i), as so redesignated, and in-
serting the following: 
‘‘(3) DEFINITION OF TOTAL ASSETS.—For pur-
poses of this section, the term ‘total assets’ means 
as follows: 
‘‘(A) ENTERPRISES.—With respect to an 
enterprise, the sum of—’’; and 
(iv) by adding at the end the following 
new subparagraph: 
‘‘(B) FEDERAL HOME LOAN BANKS.—With 
respect to a Federal home loan bank, the total 
assets of the Bank, as determined by the Direc-
tor in accordance with generally accepted ac-
counting principles.’’; 
(3) by striking subsection (c) and inserting the 
following new subsection: 
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160 
‘‘(c) INCREASED COSTS OF REGULATION.— 
‘‘(1) INCREASE FOR INADEQUATE CAPITALIZA-
TION.—The semiannual payments made pursuant to 
subsection (b) by any regulated entity that is not 
classified (for purposes of subtitle B) as adequately 
capitalized may be increased, as necessary, in the 
discretion of the Director to pay additional esti-
mated costs of regulation of the regulated entity. 
‘‘(2) ADJUSTMENT FOR ENFORCEMENT ACTIVI-
TIES.—The Director may adjust the amounts of any 
semiannual payments for an assessment under sub-
section (a) that are to be paid pursuant to sub-
section (b) by a regulated entity, as necessary in the 
discretion of the Director, to ensure that the costs 
of enforcement activities under this Act for a regu-
lated entity are borne only by such regulated entity. 
‘‘(3) ADDITIONAL
ASSESSMENT
FOR
DEFI-
CIENCIES.—If at any time, as a result of increased 
costs of regulation of a regulated entity that is not 
classified (for purposes of subtitle B) as adequately 
capitalized or as the result of supervisory or enforce-
ment activities under this Act for a regulated entity, 
the amount available from any semiannual payment 
made by such regulated entity pursuant to sub-
section (b) is insufficient to cover the costs of the 
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Agency with respect to such entity, the Director may 
make and collect from such regulated entity an im-
mediate assessment to cover the amount of such de-
ficiency for the semiannual period. If, at the end of 
any semiannual period during which such an assess-
ment is made, any amount remains from such as-
sessment, such remaining amount shall be deducted 
from the assessment for such regulated entity for 
the following semiannual period.’’; 
(4) in subsection (d), by striking ‘‘If’’ and in-
serting ‘‘Except with respect to amounts collected 
pursuant to subsection (a)(3), if’’; and 
(5) by striking subsections (e) through (g) and 
inserting the following new subsections: 
‘‘(e) WORKING CAPITAL FUND.—At the end of each 
year for which an assessment under this section is made, 
the Director shall remit to each regulated entity any 
amount of assessment collected from such regulated entity 
that is attributable to subsection (a)(3) and is in excess 
of the amount the Director deems necessary to maintain 
a working capital fund. 
‘‘(f) TREATMENT OF ASSESSMENTS.— 
‘‘(1) DEPOSIT.—Amounts received by the Di-
rector from assessments under this section may be 
deposited by the Director in the manner provided in 
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162 
section 5234 of the Revised Statutes (12 U.S.C. 
192) for monies deposited by the Comptroller of the 
Currency. 
‘‘(2) NOT GOVERNMENT FUNDS.—The amounts 
received by the Director from any assessment under 
this section shall not be construed to be Government 
or public funds or appropriated money. 
‘‘(3) NO
APPORTIONMENT
OF
FUNDS.—Not-
withstanding any other provision of law, the 
amounts received by the Director from any assess-
ment under this section shall not be subject to ap-
portionment for the purpose of chapter 15 of title 
31, United States Code, or under any other author-
ity. 
‘‘(4) USE OF FUNDS.—The Director may use 
any amounts received by the Director from assess-
ments under this section for compensation of the Di-
rector and other employees of the Agency and for all 
other expenses of the Director and the Agency. 
‘‘(5) 
AVAILABILITY
OF
OVERSIGHT
FUND 
AMOUNTS.—Notwithstanding any other provision of 
law, any amounts remaining in the Federal Housing 
Enterprises Oversight Fund established under this 
section (as in effect before the effective date under 
section 1065 of the Federal Housing Finance Re-
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