HR 1728 RFS 
resenting interests in such pools including through a 
securitization vehicle, the terms ‘assignee’ and 
‘securitizer’, as used in this section, do not include 
the securitization vehicle, any trustee that holds 
such loans solely for the benefit of the securitization 
vehicle, the pools of such loans or any original or 
subsequent purchaser of any interest in the 
securitization vehicle or any instrument representing 
a direct or indirect interest in such pool. 
‘‘(e) OBLIGATION OF SECURITIZERS, AND PRESERVA-
TION OF BORROWER REMEDIES.— 
‘‘(1) OBLIGATION
TO
RETAIN
ACCESS.—Any 
securitizer of a residential mortgage loan sold or to 
be sold as part of a securitization vehicle shall, in 
any document or contract providing for the transfer, 
conveyance, 
or 
the 
establishment 
of 
such 
securitization vehicle, reserve the right and preserve 
the ability— 
‘‘(A) to identify and obtain access to any 
such loan; 
‘‘(B) to acquire any such loan in the event 
of a violation of subsection (a) or (b) of this 
section; and 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00050
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
‘‘(C) to provide to the consumer any and 
all remedies provided for under this title for 
any violation of this title. 
‘‘(2) ADDITIONAL DAMAGES.—Any creditor, as-
signee, or securitizer of a residential mortgage loan 
that is subject to a remedy under subsection (d) and 
has failed to comply with paragraph (1) shall be 
subject to additional exemplary or punitive damages 
not to exceed the original principal balance of such 
loan. 
‘‘(3) CONTACT
INFORMATION
NOTICE.—The 
servicer with respect to a residential mortgage loan 
shall provide a written notice to a consumer identi-
fying the name and contact information of the cred-
itor or any assignee or securitizer who should be 
contacted by the consumer for any reason con-
cerning the consumer’s rights with respect to the 
loan. Such notice shall be provided— 
‘‘(A) upon request of the consumer; 
‘‘(B) whenever there is a change in owner-
ship of a residential mortgage loan; or 
‘‘(C) on a regular basis, not less than an-
nually. 
‘‘(f) RULES TO ESTABLISH PROCESS.—The Board 
shall promulgate rules to govern the rescission process es-
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00051
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
tablished for violations of subsections (a) and (b) of this 
section. Such rules shall provide that notice given to a 
servicer or holder is sufficient notice regardless of the 
identity of the party or the parties liable under this title.’’. 
SEC. 205. DEFENSE TO FORECLOSURE. 
Section 129C of the Truth in Lending Act is amend-
ed by inserting after subsection (f) (as added by section 
204) the following new subsections: 
‘‘(g) DEFENSE TO FORECLOSURE.—Notwithstanding 
any other provision of law— 
‘‘(1) when the holder of a residential mortgage 
loan or anyone acting for such holder initiates a ju-
dicial or nonjudicial foreclosure— 
‘‘(A) a consumer who has the right to re-
scind under this section with respect to such 
loan against the creditor or any assignee or 
securitizer may assert such right as a defense 
to foreclosure or counterclaim to such fore-
closure against the holder, or 
‘‘(B) if the foreclosure proceeding begins 
after the end of the period during which a con-
sumer may bring an action for rescission under 
subsection (d) and the consumer would have 
had a valid basis for such an action if it had 
been brought before the end of such period, the 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00052
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
consumer may seek actual damages incurred by 
reason of the violation which gave rise to the 
right of rescission, together with costs of the 
action, including a reasonable attorney’s fee 
against the creditor or any assignee or 
securitizer; and 
‘‘(2) such holder or anyone acting for such 
holder or any other applicable third party may sell, 
transfer, convey, or assign a residential mortgage 
loan to a creditor, any assignee, or any securitizer, 
or their designees, subject to the rights of the con-
sumer described in this subsection, to effect a rescis-
sion or cure.’’. 
SEC. 206. ADDITIONAL STANDARDS AND REQUIREMENTS. 
(a) IN GENERAL.—Section 129C of the Truth in 
Lending Act is amended by inserting after subsection (g) 
(as added by section 205) the following new subsections: 
‘‘(h) PROHIBITION ON CERTAIN PREPAYMENT PEN-
ALTIES.— 
‘‘(1) PROHIBITED ON CERTAIN LOANS.—A resi-
dential mortgage loan that is not a ‘qualified mort-
gage’ may not contain terms under which a con-
sumer must pay a prepayment penalty for paying all 
or part of the principal after the loan is con-
summated. For purposes of this subsection, a ‘quali-
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00053
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
fied mortgage’ may not include a residential mort-
gage loan that has an adjustable rate. 
‘‘(2) PHASED-OUT
PENALTIES
ON
QUALIFIED 
MORTGAGES.—A qualified mortgage (as defined in 
subsection (c)) may not contain terms under which 
a consumer must pay a prepayment penalty for pay-
ing all or part of the principal after the loan is con-
summated in excess of the following limitations: 
‘‘(A) During the 1-year period beginning 
on the date the loan is consummated, the pre-
payment penalty shall not exceed an amount 
equal to 3 percent of the outstanding balance 
on the loan. 
‘‘(B) During the 1-year period beginning 
after the period described in subparagraph (A), 
the prepayment penalty shall not exceed an 
amount equal to 2 percent of the outstanding 
balance on the loan. 
‘‘(C) During the 1-year period beginning 
after the 1-year period described in subpara-
graph (B), the prepayment penalty shall not ex-
ceed an amount equal to 1 percent of the out-
standing balance on the loan. 
‘‘(D) After the end of the 3-year period be-
ginning on the date the loan is consummated, 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00054
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
no prepayment penalty may be imposed on a 
qualified mortgage. 
‘‘(3) OPTION FOR NO PREPAYMENT PENALTY 
REQUIRED.—A creditor may not offer a consumer a 
residential mortgage loan product that has a prepay-
ment penalty for paying all or part of the principal 
after the loan is consummated as a term of the loan 
without offering the consumer a residential mort-
gage loan product that does not have a prepayment 
penalty as a term of the loan. 
‘‘(i) SINGLE PREMIUM CREDIT INSURANCE PROHIB-
ITED.—No creditor may finance, directly or indirectly, in 
connection with any residential mortgage loan or with any 
extension of credit under an open end consumer credit 
plan secured by the principal dwelling of the consumer 
(other than a reverse mortgage), any credit life, credit dis-
ability, credit unemployment or credit property insurance, 
or any other accident, loss-of-income, life or health insur-
ance, or any payments directly or indirectly for any debt 
cancellation or suspension agreement or contract, except 
that— 
‘‘(1) insurance premiums or debt cancellation or 
suspension fees calculated and paid in full on a 
monthly basis shall not be considered financed by 
the creditor; and 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00055
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
‘‘(2) this subsection shall not apply to credit 
unemployment insurance for which the unemploy-
ment insurance premiums are reasonable, the cred-
itor receives no direct or indirect compensation in 
connection with the unemployment insurance pre-
miums, and the unemployment insurance premiums 
are paid pursuant to another insurance contract and 
not paid to an affiliate of the creditor. 
‘‘(j) ARBITRATION.— 
‘‘(1) IN
GENERAL.—No residential mortgage 
loan and no extension of credit under an open end 
consumer credit plan secured by the principal dwell-
ing of the consumer, other than a reverse mortgage, 
may include terms which require arbitration or any 
other nonjudicial procedure as the method for resolv-
ing any controversy or settling any claims arising 
out of the transaction. 
‘‘(2) POST-CONTROVERSY AGREEMENTS.—Sub-
ject to paragraph (3), paragraph (1) shall not be 
construed as limiting the right of the consumer and 
the creditor, any assignee, or any securitizer to 
agree to arbitration or any other nonjudicial proce-
dure as the method for resolving any controversy at 
any time after a dispute or claim under the trans-
action arises. 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00056
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
‘‘(3) NO WAIVER OF STATUTORY CAUSE OF AC-
TION.—No provision of any residential mortgage 
loan or of any extension of credit under an open end 
consumer credit plan secured by the principal dwell-
ing of the consumer (other than a reverse mort-
gage), and no other agreement between the con-
sumer and the creditor relating to the residential 
mortgage loan or extension of credit referred to in 
paragraph (1), shall be applied or interpreted so as 
to bar a consumer from bringing an action in an ap-
propriate district court of the United States, or any 
other court of competent jurisdiction, pursuant to 
section 130 or any other provision of law, for dam-
ages or other relief in connection with any alleged 
violation of this section, any other provision of this 
title, or any other Federal law. 
‘‘(k) MORTGAGES
WITH
NEGATIVE
AMORTIZA-
TION.—No creditor may extend credit to a borrower in 
connection with a consumer credit transaction under an 
open or closed end consumer credit plan secured by a 
dwelling or residential real property that includes a dwell-
ing, other than a reverse mortgage, that provides or per-
mits a payment plan that may, at any time over the term 
of the extension of credit, result in negative amortization 
unless, before such transaction is consummated— 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00057
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
‘‘(1) the creditor provides the consumer with a 
statement that— 
‘‘(A) the pending transaction will or may, 
as the case may be, result in negative amortiza-
tion; 
‘‘(B) describes negative amortization in 
such manner as the Federal banking agencies 
shall prescribe; 
‘‘(C) negative amortization increases the 
outstanding principal balance of the account; 
and 
‘‘(D) negative amortization reduces the 
consumer’s equity in the dwelling or real prop-
erty; and 
‘‘(2) in the case of a first-time borrower with 
respect to a residential mortgage loan that is not a 
qualified mortgage, the first-time borrower provides 
the creditor with sufficient documentation to dem-
onstrate that the consumer received homeownership 
counseling from organizations or counselors certified 
by the Secretary of Housing and Urban Develop-
ment as competent to provide such counseling.’’. 
(b) CONFORMING AMENDMENT RELATING TO EN-
FORCEMENT.—Section 108(a) of the Truth in Lending 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00058
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
Act (15 U.S.C. 1607(a)) is amended by inserting after 
paragraph (6) the following new paragraph: 
‘‘(7) sections 21B and 21C of the Securities 
Exchange Act of 1934, in the case of a broker or 
dealer, other than a depository institution, by the 
Securities and Exchange Commission.’’. 
(c) PROTECTION AGAINST LOSS
OF ANTI-DEFI-
CIENCY PROTECTION.—Section 129C of the Truth in 
Lending Act is amended by inserting after subsection (k) 
(as added by subsection (a) of this section) the following 
new subsection (and designated succeeding subsections ac-
cordingly): 
‘‘(l) PROTECTION AGAINST LOSS
OF ANTI-DEFI-
CIENCY PROTECTION.— 
‘‘(1) DEFINITION.—For purposes of this sub-
section, the term ‘anti-deficiency law’ means the law 
of any State which provides that, in the event of 
foreclosure on the residential property of a consumer 
securing a mortgage, the consumer is not liable, in 
accordance with the terms and limitations of such 
State law, for any deficiency between the sale price 
obtained on such property through foreclosure and 
the outstanding balance of the mortgage. 
‘‘(2) NOTICE AT TIME OF CONSUMMATION.—In 
the case of any residential mortgage loan that is, or 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00059
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
upon consummation will be, subject to protection 
under an anti-deficiency law, the creditor or mort-
gage originator shall provide a written notice to the 
consumer describing the protection provided by the 
anti-deficiency law and the significance for the con-
sumer of the loss of such protection before such loan 
is consummated. 
‘‘(3) NOTICE
BEFORE
REFINANCING
THAT 
WOULD CAUSE LOSS OF PROTECTION.—In the case 
of any residential mortgage loan that is subject to 
protection under an anti-deficiency law, if a creditor 
or mortgage originator provides an application to a 
consumer, or receives an application from a con-
sumer, for any type of refinancing for such loan that 
would cause the loan to lose the protection of such 
anti-deficiency law, the creditor or mortgage origi-
nator shall provide a written notice to the consumer 
describing the protection provided by the anti-defi-
ciency law and the significance for the consumer of 
the loss of such protection before any agreement for 
any such refinancing is consummated.’’. 
(d) POLICY REGARDING ACCEPTANCE OF PARTIAL 
PAYMENT.—Section 129C of the Truth in Lending Act 
is amended by inserting after subsection (l) the following 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00060
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
new subsection (and redesignating subsequent subsections 
of such section accordingly): 
‘‘(m) POLICY REGARDING ACCEPTANCE OF PARTIAL 
PAYMENT.—In the case of any residential mortgage loan, 
a creditor shall disclose prior to settlement or, in the case 
of a person becoming a creditor with respect to an existing 
residential mortgage loan, at the time such person be-
comes a creditor— 
‘‘(1) the creditor’s policy regarding the accept-
ance of partial payments; and 
‘‘(2) if partial payments are accepted, how such 
payments will be applied to such mortgage and if 
such payments will be placed in escrow.’’. 
SEC. 207. RULE OF CONSTRUCTION. 
Except as otherwise expressly provided in section 
129B or 129C of the Truth in Lending Act (as added by 
this Act), no provision of such section 129B or 129C shall 
be construed as superseding, repealing, or affecting any 
duty, right, obligation, privilege, or remedy of any person 
under any other provision of the Truth in Lending Act 
or any other provision of Federal or State law. 
SEC. 208. EFFECT ON STATE LAWS. 
(a) IN GENERAL.—Except as provided in subsection 
(b), section 129C(d) of the Truth in Lending Act (as 
added by section 204) shall supersede any State law to 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00061
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
(b) (requirement of a net tangible benefit) of section 
129C of such Act; 
(3)(A) the application of any State law, or the 
availability of remedies under such law, against an 
assignee, securitizer or securitization vehicle for its 
participation in or direction of the credit or under-
writing decisions of a creditor relating to the making 
of a residential mortgage loan; or 
(B) the ability of a consumer to assert any 
rights against or obtain any remedies from an as-
signee, securitizer or securitization vehicle with re-
spect to a residential mortgage loan as a defense to 
foreclosure under section 129C(g); 
(4) the availability of any equitable remedies, 
including injunctive relief, under State law; or 
(5) notwithstanding paragraph (2), the avail-
ability of any remedies under State law against any 
assignee, securitizer or securitization vehicle that— 
(A) are in addition to those remedies pro-
vided for in section 129C; and 
(B) were in effect on the date of enactment 
of this Act. 
SEC. 209. REGULATIONS. 
Regulations required or authorized to be prescribed 
under this title or the amendments made by this title— 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00063
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
(1) shall be prescribed in final form before the 
end of the 12-month period beginning on the date of 
the enactment of this Act; and 
(2) shall take effect not later than 18 months 
after the date of the enactment of this Act. 
SEC. 210. AMENDMENTS TO CIVIL LIABILITY PROVISIONS. 
(a) INCREASE IN AMOUNT OF CIVIL MONEY PEN-
ALTIES FOR CERTAIN VIOLATIONS.—Section 130(a)(2) of 
the Truth in Lending Act (15 U.S.C. 1640(a)(2)) is 
amended— 
(1) by striking ‘‘$100’’ and inserting ‘‘$200’’; 
(2) 
by 
striking 
‘‘$1,000’’ 
and 
inserting 
‘‘$2,000’’; and 
(3) by striking ‘‘$500,000’’ and inserting 
‘‘$1,000,000’’. 
(b) STATUTE OF LIMITATIONS EXTENDED FOR SEC-
TION 129 VIOLATIONS.—Section 130(e) of the Truth in 
Lending Act (15 U.S.C. 1640(e)) is amended— 
(1) in the first sentence, by striking ‘‘Any ac-
tion’’ and inserting ‘‘Except as provided in the sub-
sequent sentence, any action’’; and 
(2) by inserting after the first sentence the fol-
lowing new sentence: ‘‘Any action under this section 
with respect to any violation of section 129 may be 
brought in any United States district court, or in 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00064
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
any other court of competent jurisdiction, before the 
end of the 3-year period beginning on the date of the 
occurrence of the violation.’’. 
SEC. 211. LENDER RIGHTS IN THE CONTEXT OF BORROWER 
DECEPTION. 
Section 130 of the Truth in Lending Act is amended 
by adding at the end the following new subsection: 
‘‘(k) EXEMPTION FROM LIABILITY AND RESCISSION 
IN CASE OF BORROWER FRAUD OR DECEPTION.—In ad-
dition to any other remedy available by law or contract, 
no creditor, assignee, or securitizer shall be liable to an 
obligor under this section, nor shall it be subject to the 
right of rescission of any obligor under 129B, if such obli-
gor, or co-obligor, knowingly, or willfully and with actual 
knowledge furnished material information known to be 
false for the purpose of obtaining such residential mort-
gage loan.’’. 
SEC. 212. SIX-MONTH NOTICE REQUIRED BEFORE RESET OF 
HYBRID ADJUSTABLE RATE MORTGAGES. 
(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 128 the following new section: 
‘‘§ 128A. Reset of hybrid adjustable rate mortgages 
‘‘(a) HYBRID ADJUSTABLE RATE MORTGAGES DE-
FINED.—For purposes of this section, the term ‘hybrid ad-
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00065
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
justable rate mortgage’ means a consumer credit trans-
action secured by the consumer’s principal residence with 
a fixed interest rate for an introductory period that ad-
justs or resets to a variable interest rate after such period. 
‘‘(b) NOTICE OF RESET AND ALTERNATIVES.—Dur-
ing the 1-month period that ends 6 months before the date 
on which the interest rate in effect during the introductory 
period of a hybrid adjustable rate mortgage adjusts or 
resets to a variable interest rate or, in the case of such 
an adjustment or resetting that occurs within the first 6 
months after consummation of such loan, at consumma-
tion, the creditor or servicer of such loan shall provide a 
written notice, separate and distinct from all other cor-
respondence to the consumer, that includes the following: 
‘‘(1) Any index or formula used in making ad-
justments to or resetting the interest rate and a 
source of information about the index or formula. 
‘‘(2) An explanation of how the new interest 
rate and payment would be determined, including an 
explanation of how the index was adjusted, such as 
by the addition of a margin. 
‘‘(3) A good faith estimate, based on accepted 
industry standards, of the creditor or servicer of the 
amount of the monthly payment that will apply after 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00066
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
the date of the adjustment or reset, and the assump-
tions on which this estimate is based. 
‘‘(4) A list of alternatives consumers may pur-
sue before the date of adjustment or reset, and de-
scriptions of the actions consumers must take to 
pursue these alternatives, including— 
‘‘(A) refinancing; 
‘‘(B) renegotiation of loan terms; 
‘‘(C) payment forbearances; and 
‘‘(D) pre-foreclosure sales. 
‘‘(5) The names, addresses, telephone numbers, 
and Internet addresses of counseling agencies or 
programs reasonably available to the consumer that 
have been certified or approved and made publicly 
available by the Secretary of Housing and Urban 
Development or a State housing finance authority 
(as defined in section 1301 of the Financial Institu-
tions Reform, Recovery, and Enforcement Act of 
1989). 
‘‘(6) The address, telephone number, and Inter-
net address for the State housing finance authority 
(as so defined) for the State in which the consumer 
resides.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 2 of the Truth in Lending Act is amended 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00067
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
by inserting after the item relating to section 128 the fol-
lowing new item: 
‘‘128A. Reset of hybrid adjustable rate mortgages.’’. 
SEC. 213. CREDIT RISK RETENTION. 
Section 129C of the Truth in Lending Act is amend-
ed by inserting after subsection (k) (as added by section 
206) the following new subsection: 
‘‘(l) CREDIT RISK RETENTION.— 
‘‘(1) IN GENERAL.—The Federal banking agen-
cies shall prescribe regulations jointly to require any 
creditor that makes a residential mortgage loan that 
is not a qualified mortgage (as defined under section 
129C(c)(2)(A)), to retain an economic interest in a 
material portion of the credit risk for any such loan 
that the creditor transfers, sells or conveys to a 
third party. 
‘‘(2) STANDARDS FOR REGULATIONS.—Regula-
tions prescribed under paragraph (1) shall— 
‘‘(A) apply only to residential mortgage 
loans that are not qualified mortgages (as so 
defined); 
‘‘(B) prohibit a creditor from directly or 
indirectly hedging or otherwise transferring the 
credit risk such creditor is required to retain 
under the regulations with respect to any resi-
dential mortgage loan; 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00068
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
‘‘(C) require a creditor to retain at least 5 
percent of the credit risk on any non-qualified 
mortgage that is transferred, sold or conveyed 
by such creditor; and 
‘‘(D) specify the permissible forms of the 
required risk retention (for example, first loss 
position or pro rata vertical slice) and the min-
imum duration of the required risk retention. 
‘‘(3) EXCEPTIONS AND ADJUSTMENTS.— 
‘‘(A) IN GENERAL.—The Federal banking 
agencies shall have authority to jointly provide 
exceptions or adjustments to the requirements 
of this subsection, including exceptions or ad-
justments relating to the 5 percent risk reten-
tion threshold and the hedging prohibition. 
‘‘(B) APPLICABLE
STANDARDS.—Any ex-
ceptions or adjustments granted by the Federal 
banking agencies shall— 
‘‘(i) be consistent with the purpose of 
this subsection to help ensure high quality 
underwriting standards for creditors that 
make residential mortgage loans that are 
not qualified mortgages; and 
‘‘(ii) facilitate appropriate risk man-
agement practices by such creditors, im-
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00069
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
prove access of consumers to mortgage 
credit on reasonable terms, or otherwise 
serve the public interest. 
‘‘(4) ALTERNATIVE
RISK
RETENTION
FOR 
SECURITIZERS.—The Federal banking agencies may 
jointly, in their discretion, apply the risk retention 
requirements of this subsection to securitizers of res-
idential mortgages (or particular types of residential 
mortgages) that are not qualified mortgages in addi-
tion to or in substitution for any or all of the re-
quirements that apply to creditors that make such 
mortgages if the agencies jointly determine that ap-
plying the requirements to such securitizers would— 
‘‘(A) be consistent with the purpose of this 
subsection to help ensure high quality under-
writing standards for creditors of residential 
mortgage loans that are not qualified mort-
gages; and 
‘‘(B) facilitate appropriate risk manage-
ment practices by such creditors, improve ac-
cess of consumers to mortgage credit on reason-
able terms, or otherwise serve the public inter-
est. 
‘‘(m) Section 129C and any regulations promulgated 
thereunder do not apply to an extension of credit relating 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00070
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
to a plan described in section 101(53D) of title 11, United 
States Code.’’. 
SEC. 214. REQUIRED DISCLOSURES. 
Section 128(a) of Truth in Lending Act (15 U.S.C. 
1638(a)) is amended by adding at the end the following 
new paragraphs: 
‘‘(16) In the case of a variable rate residential 
mortgage loan for which an escrow or impound ac-
count will be established for the payment of all ap-
plicable taxes, insurance, and assessments— 
‘‘(A) the amount of initial monthly pay-
ment due under the loan for the payment of 
principal and interest, and the amount of such 
initial monthly payment including the monthly 
payment deposited in the account for the pay-
ment of all applicable taxes, insurance, and as-
sessments; and 
‘‘(B) the amount of the fully indexed 
monthly payment due under the loan for the 
payment of principal and interest, and the 
amount of such fully indexed monthly payment 
including the monthly payment deposited in the 
account for the payment of all applicable taxes, 
insurance, and assessments. 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00071
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
‘‘(17) In the case of a residential mortgage 
loan, the aggregate amount of settlement charges for 
all settlement services provided in connection with 
the loan, the amount of charges that are included in 
the loan and the amount of such charges the 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. 
‘‘(18) 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. 
‘‘(19) In the case of a residential mortgage 
loan, the total amount of interest that the consumer 
will pay over the life of the loan as a percentage of 
the principal of the loan. Such amount shall be com-
puted assuming the consumer makes each monthly 
payment in full and on-time, and does not make any 
over-payments.’’. 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00072
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
SEC. 215. 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: 
‘‘(f) PERIODIC
STATEMENTS
FOR
RESIDENTIAL 
MORTGAGE LOANS.— 
‘‘(1) IN GENERAL.—The creditor, assignee, or 
servicer with respect to any residential mortgage 
loan shall transmit to the obligor, for each billing 
cycle, a statement setting forth each of the following 
items, to the extent applicable, in a conspicuous and 
prominent manner: 
‘‘(A) The amount of the principal 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. 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00073
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS
HR 1728 RFS 
‘‘(F) A telephone number and electronic 
mail address that may be used by the obligor to 
obtain information regarding the mortgage. 
‘‘(G) The names, addresses, telephone 
numbers, and Internet addresses of counseling 
agencies or programs reasonably available to 
the consumer that have been certified or ap-
proved and made publicly available by the Sec-
retary of Housing and Urban Development or a 
State housing finance authority (as defined in 
section 1301 of the Financial Institutions Re-
form, Recovery, and Enforcement Act of 1989). 
‘‘(H) Such other information as the Board 
may prescribe in regulations. 
‘‘(2) DEVELOPMENT AND USE OF STANDARD 
FORM.—The Federal banking agencies shall jointly 
develop and prescribe a standard form for the disclo-
sure required under this subsection, taking into ac-
count that the statements required may be trans-
mitted in writing or electronically.’’. 
SEC. 216. LEGAL ASSISTANCE FOR FORECLOSURE-RELATED 
ISSUES. 
(a) ESTABLISHMENT.—The Secretary of Housing 
and Urban Development (hereafter in this section referred 
to as the ‘‘Secretary’’ shall establish a program for making 
VerDate Nov 24 2008 
23:52 May 12, 2009
Jkt 079200
PO 00000
Frm 00074
Fmt 6652
Sfmt 6201
E:\BILLS\H1728.RFS
H1728
wwoods2 on PRODPC68 with BILLS