Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Mortgage Reform and Anti-Predatory Lending Act of 
2007’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—RESIDENTIAL MORTGAGE LOAN ORIGINATION 
Subtitle A—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. 
Subtitle B—Residential Mortgage Loan Origination Standards 
Sec. 121. Definitions. 
Sec. 122. Residential mortgage loan origination. 
Sec. 123. Prohibition on steering incentives. 
Sec. 124. Liability. 
Sec. 125. Regulations. 
TITLE II—MINIMUM STANDARDS FOR MORTGAGES 
Sec. 201. Ability to repay. 
Sec. 202. Net tangible benefit for refinancing of residential mortgage loans. 
Sec. 203. Safe harbor and rebuttable presumption. 
Sec. 204. Liability. 
Sec. 205. Defense to foreclosure. 
Sec. 206. Additional standards and requirements.
Sec. 207. Rule of construction. 
Sec. 208. Effect on State laws. 
Sec. 209. Regulations. 
Sec. 210. Amendments to civil liability provisions. 
Sec. 211. Lender rights in the context of borrower deception. 
Sec. 212. Six-month notice required before reset of hybrid adjustable rate mort-
gages. 
Sec. 213. Required disclosures. 
Sec. 214. Disclosures required in monthly statements for residential mortgage 
loans. 
Sec. 215. Authorization of appropriations. 
Sec. 216. Effective date. 
Sec. 217. Report by the GAO. 
TITLE III—HIGH-COST MORTGAGES 
Sec. 301. Definitions relating to high-cost mortgages. 
Sec. 302. Amendments to existing requirements for certain mortgages. 
Sec. 303. Additional requirements for certain mortgages. 
Sec. 304. Amendment to provision governing correction of errors. 
Sec. 305. Regulations. 
Sec. 306. Effective date. 
TITLE IV—OFFICE OF HOUSING COUNSELING 
Sec. 401. Short title. 
Sec. 402. Establishment of Office of Housing Counseling. 
Sec. 403. Counseling procedures. 
Sec. 404. Grants for housing counseling assistance. 
Sec. 405. Requirements to use HUD-certified counselors under HUD programs. 
Sec. 406. Study of defaults and foreclosures. 
Sec. 407. Definitions for counseling-related programs. 
Sec. 408. Updating and simplification of mortgage information booklet. 
TITLE V—MORTGAGE DISCLOSURES UNDER REAL ESTATE 
SETTLEMENT PROCEDURES ACT OF 1974 
Sec. 501. Universal mortgage disclosure in good faith estimate of settlement 
services costs. 
TITLE VI—MORTGAGE SERVICING 
Sec. 601. Escrow and impound accounts relating to certain consumer credit 
transactions. 
Sec. 602. Disclosure notice required for consumers who waive escrow services. 
Sec. 603. Real Estate Settlement Procedures Act of 1974 amendments. 
Sec. 604. Mortgage servicing studies required. 
Sec. 605. Escrows included in repayment analysis. 
TITLE VII—APPRAISAL ACTIVITIES 
Sec. 701. Property appraisal requirements. 
Sec. 702. Unfair and deceptive practices and acts relating to certain consumer 
credit transactions. 
Sec. 703. Appraisal subcommittee of FIEC, appraiser independence, and ap-
proved appraiser education.
Sec. 704. Study required on improvements in appraisal process and compliance 
programs. 
Sec. 705. Consumer appraisal disclosure. 
TITLE I—RESIDENTIAL 
MORTGAGE LOAN ORIGINATION 
Subtitle A—Licensing System for 
Residential 
Mortgage 
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. 
(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 subtitle, 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’’— 
(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. 
(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 
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); 
(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 
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. 
(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. 
(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 
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-
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 
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 subtitle. 
(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.— 
(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 
(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. 
(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-
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 
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 
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. 
(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 subtitle.
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-
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-
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 subtitle 
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 subtitle and the effective registration and regulation 
of loan originators.
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.
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 subtitle.
(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 subtitle. 
(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
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 subtitle, 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
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
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,
or suspended. If the respondent has been served 
with a temporary cease-and-desist order entered 
without a prior hearing before the Secretary, 
the respondent may, within 10 days after the 
date on which the order was served, request a 
hearing on such application and the Secretary 
shall hold a hearing and render a decision on 
such application at the earliest possible time. 
(B) JUDICIAL REVIEW.—Within— 
(i) 10 days after the date the respond-
ent was served with a temporary cease- 
and-desist order entered with a prior hear-
ing before the Secretary; or 
(ii) 10 days after the Secretary ren-
ders a decision on an application and hear-
ing under paragraph (1), with respect to 
any temporary cease-and-desist order en-
tered without a prior hearing before the 
Secretary, 
the respondent may apply to the United States 
district court for the district in which the re-
spondent resides or has its principal place of 
business, or for the District of Columbia, for an 
order setting aside, limiting, or suspending the 
effectiveness or enforcement of the order, and
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 
subtitle 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.—
(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 sub-
title or any regulation prescribed by the Secretary 
under this subtitle 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. 
Subtitle B—Residential Mortgage 
Loan Origination Standards 
SEC. 121. DEFINITIONS. 
Section 103 of the Truth in Lending Act (15 U.S.C. 
1602) is amended by adding at the end the following new 
subsection: 
‘‘(cc) DEFINITIONS RELATING TO MORTGAGE ORIGI-
NATION AND RESIDENTIAL MORTGAGE LOANS.— 
‘‘(1) COMMISSION.—Unless otherwise specified, 
the term ‘Commission’ means the Federal Trade 
Commission.
‘‘(2) FEDERAL BANKING AGENCIES.—The term 
‘Federal banking agencies’ means the Board of Gov-
ernors of the Federal Reserve System, the Comp-
troller of the Currency, the Director of the Office of 
Thrift Supervision, the Federal Deposit Insurance 
Corporation, and the National Credit Union Admin-
istration Board. 
‘‘(3) 
MORTGAGE
ORIGINATOR.—The 
term 
‘mortgage originator’— 
‘‘(A) means any person who— 
‘‘(i) takes a residential mortgage loan 
application; 
‘‘(ii) assists a consumer in obtaining 
or applying to obtain a residential mort-
gage loan; or 
‘‘(iii) offers or negotiates terms of a 
residential mortgage loan, for direct or in-
direct compensation or gain, or in the ex-
pectation of direct or indirect compensa-
tion or gain; 
‘‘(B) includes any person who represents 
to the public, through advertising or other 
means of communicating or providing informa-
tion (including the use of business cards, sta-
tionery, brochures, signs, rate lists, or other
promotional items), that such person can or will 
provide any of the services or perform any of 
the activities described in subparagraph (A); 
and 
‘‘(C) does not include any person who is 
not otherwise described in subparagraph (A) or 
(B) and who performs purely administrative or 
clerical tasks on behalf of a person who is de-
scribed in any such subparagraph. 
‘‘(4) NATIONWIDE MORTGAGE LICENSING SYS-
TEM AND REGISTRY.—The term ‘Nationwide Mort-
gage Licensing System and Registry’ has the same 
meaning as in section 102(5) of the Mortgage Re-
form and Anti-Predatory Lending Act of 2007. 
‘‘(5) OTHER DEFINITIONS RELATING TO MORT-
GAGE
ORIGINATOR.—For purposes of this sub-
section, a person ‘assists a consumer in obtaining or 
applying to obtain a residential mortgage loan’ by, 
among other things, advising on residential mort-
gage loan terms (including rates, fees, and other 
costs), preparing residential mortgage loan packages, 
or collecting information on behalf of the consumer 
with regard to a residential mortgage loan. 
‘‘(6) RESIDENTIAL
MORTGAGE
LOAN.—The 
term ‘residential mortgage loan’ means any con-
sumer credit transaction that is secured by a mort-
gage, deed of trust, or other equivalent consensual 
security interest on a dwelling or on residential real 
property that includes a dwelling, other than a con-
sumer credit transaction under an open end credit 
plan or a reverse mortgage. 
‘‘(7) SECRETARY.—The term ‘Secretary’, when 
used in connection with any transaction or person 
involved with a residential mortgage loan, means the 
Secretary of Housing and Urban Development. 
‘‘(8) SECURITIZATION
VEHICLE.—The term 
‘securitization vehicle’ means a trust, corporation, 
partnership, limited liability entity, or special pur-
pose entity 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. 
‘‘(9) SECURITIZER.—The term ‘securitizer’ 
means the person that transfers, conveys, or assigns, 
or causes the transfer, conveyance, or assignment of, 
residential mortgage loans, including through a spe-
cial purpose vehicle, to any securitization vehicle, ex-
cluding any trustee that holds such loans solely for 
the benefit of the securitization vehicle. 
‘‘(10) SERVICER.—The term ‘servicer’ has the 
same meaning as in section 6(i)(2) of the Real Es-
tate Settlement Procedures Act of 1974.’’. 
SEC. 122. RESIDENTIAL MORTGAGE LOAN ORIGINATION. 
(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: 
‘‘§ 129A. Residential mortgage loan origination 
‘‘(a) DUTY OF CARE.— 
‘‘(1) STANDARD.—Subject to regulations pre-
scribed under this subsection, each mortgage origi-
nator shall, in addition to the duties imposed by oth-
erwise applicable provisions of State or Federal 
law— 
‘‘(A) be qualified and, when required, reg-
istered and licensed as a mortgage originator in 
accordance with applicable State or Federal law 
including subtitle A of title I of the Mortgage 
Reform and Anti-Predatory Lending Act of 
2007; 
‘‘(B) with respect to each consumer seek-
ing or inquiring about a residential mortgage
(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 129 the fol-
lowing new item: 
‘‘129A. Residential mortgage loan origination.’’. 
SEC. 123. PROHIBITION ON STEERING INCENTIVES. 
Section 129A of the Truth in Lending Act (as added 
by section 122(a)) is amended by inserting after sub-
section (a) the following new subsection: 
‘‘(b) PROHIBITION ON STEERING INCENTIVES.— 
‘‘(1) AMOUNT OF ORIGINATOR COMPENSATION 
CANNOT
VARY
BASED
ON
TERMS.—No mortgage 
originator may receive from any person, and no per-
son may pay to any mortgage originator, directly or 
indirectly, any incentive compensation, including 
yield spread premium or any equivalent compensa-
tion or gain, that is based on, or varies with, the 
terms (other than the amount of principal) of any 
loan that is not a qualified mortgage (as defined in 
section 129B(c)(3)). 
‘‘(2) REGULATIONS.—The Federal banking 
agencies, in consultation with the Secretary and the 
Commission, shall jointly prescribe regulations to 
prohibit—
‘‘(A) mortgage originators from steering 
any consumer to a residential mortgage loan 
that— 
‘‘(i) the consumer lacks a reasonable 
ability to repay (in accordance with regula-
tions prescribed under section 129B(a)); 
‘‘(ii) in the case of a refinancing of a 
residential mortgage loan, does not provide 
the consumer with a net tangible benefit 
(in accordance with regulations prescribed 
under section 129B(b)); or 
‘‘(iii) has predatory characteristics or 
effects (such as equity stripping, excessive 
fees, or abusive terms); 
‘‘(B) mortgage originators from steering 
any consumer from a residential mortgage loan 
for which the consumer is qualified that is a 
qualified mortgage (as defined in section 
129B(c)(3)) to a residential mortgage loan that 
is not a qualified mortgage; and 
‘‘(C) abusive or unfair lending practices 
that promote disparities among consumers of 
equal credit worthiness but of different race, 
ethnicity, gender, or age.
‘‘(3) RULES OF CONSTRUCTION.—No provision 
of this subsection shall be construed as— 
‘‘(A) limiting or affecting the ability of a 
mortgage originator to sell residential mortgage 
loans to subsequent purchasers; 
‘‘(B) restricting a consumer’s ability to fi-
nance, including through rate or principal, any 
origination fees or costs permitted under this 
subsection, or the originator’s ability to receive 
such fees or costs (including compensation) 
from any person, so long as such fees or costs 
were fully and clearly disclosed to the consumer 
earlier in the application process as required by 
129A(a)(1)(C)(ii) and do not vary based on the 
terms of the loan or the consumer’s decision 
about whether to finance such fees or costs; or 
‘‘(C) prohibiting incentive payments to a 
mortgage originator based on the number of 
residential mortgage loans originated within a 
specified period of time.’’. 
SEC. 124. LIABILITY. 
Section 129A of the Truth in Lending Act is amend-
ed by inserting after subsection (b) (as added by section 
123) the following new subsection: 
‘‘(c) LIABILITY FOR VIOLATIONS.—
‘‘(1) IN GENERAL.—For purposes of providing 
a cause of action for any failure by a mortgage origi-
nator to comply with any requirement imposed 
under this section and any regulation prescribed 
under this section, subsections (a) and (b) of section 
130 shall be applied with respect to any such failure 
by substituting ‘mortgage originator’ for ‘creditor’ 
each place such term appears in each such sub-
section. 
‘‘(2) MAXIMUM.—The maximum amount of any 
liability of a mortgage originator under paragraph 
(1) to a consumer for any violation of this section 
shall not exceed an amount equal to 3 times the 
total amount of direct and indirect compensation or 
gain accruing to the mortgage originator in connec-
tion with the residential mortgage loan involved in 
the violation, plus the costs to the consumer of the 
action, including a reasonable attorney’s fee.’’. 
SEC. 125. REGULATIONS. 
The regulations required or authorized to be pre-
scribed under this title or the amendments made by this 
title— 
(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. 
TITLE II—MINIMUM STANDARDS 
FOR MORTGAGES 
SEC. 201. ABILITY TO REPAY. 
(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 122(a)) the fol-
lowing new section: 
‘‘§ 129B. Minimum standards for residential mortgage 
loans 
‘‘(a) ABILITY TO REPAY.— 
‘‘(1) IN GENERAL.—In accordance with regula-
tions prescribed jointly by the Federal banking agen-
cies, in consultation with the Commission, no cred-
itor may make a residential mortgage loan unless 
the creditor makes a reasonable and good faith de-
termination based on verified and documented infor-
mation that, at the time the loan is consummated, 
the consumer has a reasonable ability to repay the 
loan, according to its terms, and all applicable taxes, 
insurance, and assessments. 
‘‘(2) MULTIPLE LOANS.—If the creditor knows, 
or has reason to know, that 1 or more residential 
mortgage loans secured by the same dwelling will be