IIB 
111TH CONGRESS 
1ST SESSION H. R. 1728 
IN THE SENATE OF THE UNITED STATES 
MAY 12, 2009 
Received; read twice and referred to the Committee on Banking, Housing, and 
Urban Affairs 
AN ACT 
To amend the Truth in Lending Act to reform consumer 
mortgage practices and provide accountability for such 
practices, to provide certain minimum standards for con-
sumer mortgage loans, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Mortgage Reform and Anti-Predatory Lending Act’’. 
(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 
STANDARDS 
Sec. 101. Definitions. 
Sec. 102. Residential mortgage loan origination. 
Sec. 103. Prohibition on steering incentives. 
Sec. 104. Liability. 
Sec. 105. Regulations. 
Sec. 106. RESPA and TILA disclosure improvement. 
Sec. 107. Study of shared appreciation mortgages. 
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. Credit risk retention. 
Sec. 214. Required disclosures. 
Sec. 215. Disclosures required in monthly statements for residential mortgage 
loans. 
Sec. 216. Legal assistance for foreclosure-related issues. 
Sec. 217. Effective date. 
Sec. 218. Report by the GAO. 
Sec. 219. State Attorney General enforcement authority. 
Sec. 220. Tenant protection. 
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. Regulations. 
Sec. 305. Effective date. 
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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. Default and foreclosure database. 
Sec. 408. Definitions for counseling-related programs. 
Sec. 409. Accountability and transparency for grant recipients. 
Sec. 410. Updating and simplification of mortgage information booklet. 
Sec. 411. Home inspection counseling. 
Sec. 412. Warnings to homeowners of foreclosure rescue scams. 
TITLE V—MORTGAGE SERVICING 
Sec. 501. Escrow and impound accounts relating to certain consumer credit 
transactions. 
Sec. 502. Disclosure notice required for consumers who waive escrow services. 
Sec. 503. Real Estate Settlement Procedures Act of 1974 amendments. 
Sec. 504. Truth in Lending Act amendments. 
Sec. 505. Escrows included in repayment analysis. 
TITLE VI—APPRAISAL ACTIVITIES 
Sec. 601. Property appraisal requirements. 
Sec. 602. Unfair and deceptive practices and acts relating to certain consumer 
credit transactions. 
Sec. 603. Amendments relating to Appraisal Subcommittee of FIEC, Appraiser 
Independence Monitoring, Approved Appraiser Education, Ap-
praisal Management Companies, Appraiser Complaint Hotline, 
Automated Valuation Models, and Broker Price Opinions. 
Sec. 604. Study required on improvements in appraisal process and compliance 
programs. 
Sec. 605. Equal Credit Opportunity Act amendment. 
Sec. 606. Real Estate Settlement Procedures Act of 1974 amendment relating 
to certain appraisal fees. 
TITLE VII—SENSE OF CONGRESS REGARDING THE IMPORTANCE 
OF GOVERNMENT SPONSORED ENTERPRISES REFORM 
Sec. 701. Sense of Congress regarding the importance of Government-spon-
sored enterprises reform to enhance the protection, limitation, 
and regulation of the terms of residential mortgage credit. 
TITLE VIII—REPORTS 
Sec. 801. GAO study report on government efforts to combat mortgage fore-
closure rescue scams and loan modification fraud. 
TITLE IX—MULTIFAMILY MORTGAGE RESOLUTION 
Sec. 901. Multifamily mortgage resolution program. 
TITLE X—STUDY OF EFFECT OF DRYWALL PRESENCE ON 
FORECLOSURES 
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Sec. 1001. Study of effect of drywall presence on foreclosures. 
TITLE XI—FANNIE MAE GUIDELINES FOR PURCHASE OF 
CONDOMINIUM AND COOPERATIVE HOUSING MORTGAGES 
Sec. 1101. Guidelines for purchase of condominium and cooperative housing 
mortgages. 
TITLE 
I—RESIDENTIAL 
MORT-
GAGE 
LOAN 
ORIGINATION 
STANDARDS 
SEC. 101. 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. All rule writing by the ‘Federal 
banking agencies’ as designated by the Mortgage 
Reform and Anti-Predatory Lending Act will be co-
ordinated through the Financial Institutions Exam-
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ination Council in consultation with the Chairman of 
the State Liaison Committee. 
‘‘(3) 
MORTGAGE
ORIGINATOR.—The 
term 
‘mortgage originator’— 
‘‘(A) means any person who, for direct or 
indirect compensation or gain, or in the expec-
tation of direct or indirect compensation or 
gain— 
‘‘(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; 
‘‘(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); 
‘‘(C) does not include any person who is (i) 
not otherwise described in subparagraph (A) or 
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and documents that the buyer has a rea-
sonable ability to repay the loan; 
‘‘(iii) has a fixed rate or an adjustable 
rate that is adjustable after 5 or more 
years, subject to reasonable annual and 
lifetime limitations on interest rate in-
creases; and 
‘‘(iv) meets any other criteria the 
Federal banking agencies may prescribe; 
and 
‘‘(F) does not include a servicer or servicer 
employees, agents and contractors, including 
but not limited to those who offer or negotiate 
terms of a residential mortgage loan for pur-
poses of renegotiating, modifying, replacing and 
subordinating principal of existing mortgages 
where borrowers are behind in their payments, 
in default or have a reasonable likelihood of 
being in default or falling behind. 
‘‘(4) NATIONWIDE MORTGAGE LICENSING SYS-
TEM AND REGISTRY.—The term ‘Nationwide Mort-
gage Licensing System and Registry’ has the same 
meaning as in the Secure and Fair Enforcement for 
Mortgage Licensing Act of 2008. 
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‘‘(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 or, for purposes of sec-
tions 129B and 129C and section 128(a) (16), (17), 
and (18), and 128(f) and any regulations promul-
gated thereunder, an extension of credit relating to 
a plan described in section 101(53D) of title 11, 
United States Code. 
‘‘(7) SECRETARY.—The term ‘Secretary’, when 
used in connection with any transaction or person 
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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, 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. 
‘‘(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.’’. 
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SEC. 102. 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 129A the following new section: 
‘‘§ 129B. Residential mortgage loan origination 
‘‘(a) FINDING AND PURPOSE.— 
‘‘(1) FINDING.—The Congress finds that eco-
nomic stabilization would be enhanced by the protec-
tion, limitation, and regulation of the terms of resi-
dential mortgage credit and the practices related to 
such credit, while ensuring that responsible, afford-
able mortgage credit remains available to consumers. 
‘‘(2) PURPOSE.—It is the purpose of this sec-
tion and section 129C to assure that consumers are 
offered and receive residential mortgage loans on 
terms that reasonably reflect their ability to repay 
the loans and that are understandable and not un-
fair, deceptive or abusive. 
‘‘(b) 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 
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accordance with applicable State or Federal 
law, including the Secure and Fair Enforcement 
for Mortgage Licensing Act of 2008; 
‘‘(B) with respect to each consumer seek-
ing or inquiring about a residential mortgage 
loan, diligently work to present the consumer 
with a range of residential mortgage loan prod-
ucts for which the consumer likely qualifies and 
which are appropriate to the consumer’s exist-
ing circumstances, based on information known 
by, or obtained in good faith by, the originator; 
‘‘(C) make full, complete, and timely dis-
closure to each such consumer in writing, the 
receipt and understanding of which shall be ac-
knowledged by the signature of the mortgage 
originator and the consumer, of— 
‘‘(i) the comparative costs and bene-
fits of each residential mortgage loan prod-
uct offered, discussed, or referred to by the 
originator (and such comparative costs and 
benefits for each such product shall be pre-
sented side by side and the disclosures for 
each such product shall have equal promi-
nence); 
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‘‘(ii) the nature of the originator’s re-
lationship to the consumer (including the 
cost of the services to be provided by the 
originator and a statement that the mort-
gage originator is or is not acting as an 
agent for the consumer, as the case may 
be); and 
‘‘(iii) any relevant conflicts of interest 
between the originator and the consumer; 
‘‘(D) certify to the creditor, with respect to 
any transaction involving a residential mortgage 
loan, that the mortgage originator has fulfilled 
all requirements applicable to the originator 
under this section with respect to the trans-
action; and 
‘‘(E) include on all loan documents any 
unique identifier of the mortgage originator 
provided by the Nationwide Mortgage Licensing 
System and Registry. 
‘‘(2) CLARIFICATION OF EXTENT OF DUTY TO 
PRESENT RANGE OF PRODUCTS AND APPROPRIATE 
PRODUCTS.— 
‘‘(A) NO DUTY TO OFFER PRODUCTS FOR 
WHICH
ORIGINATOR
IS
NOT
AUTHORIZED
TO 
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TAKE
AN
APPLICATION.—Paragraph (1)(B) 
shall not be construed as requiring— 
‘‘(i) a mortgage originator to present 
to any consumer any specific residential 
mortgage loan product that is offered by a 
creditor which does not accept consumer 
referrals from, or consumer applications 
submitted by or through, such originator; 
or 
‘‘(ii) a creditor to offer products that 
the creditor does not offer to the general 
public. 
‘‘(B) APPROPRIATE LOAN PRODUCT.—For 
purposes of paragraph (1)(B), a residential 
mortgage loan shall be presumed to be appro-
priate for a consumer if— 
‘‘(i) the mortgage originator deter-
mines in good faith, based on then existing 
information and without undergoing a full 
underwriting process, that the consumer 
has a reasonable ability to repay and, in 
the case of a refinancing of an existing res-
idential mortgage loan, receives a net tan-
gible benefit, as determined in accordance 
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with regulations prescribed under sub-
sections (a) and (b) of section 129C; and 
‘‘(ii) the loan does not have predatory 
characteristics or effects (such as equity 
stripping and excessive fees and abusive 
terms) as determined in accordance with 
regulations prescribed under paragraph 
(4). 
‘‘(3) RULES OF CONSTRUCTION.—No provision 
of this subsection shall be construed as— 
‘‘(A) creating an agency or fiduciary rela-
tionship between a mortgage originator and a 
consumer if the originator does not hold himself 
or herself out as such an agent or fiduciary; or 
‘‘(B) restricting a mortgage originator 
from holding himself or herself out as an agent 
or fiduciary of a consumer subject to any addi-
tional duty, requirement, or limitation applica-
ble to agents or fiduciaries under any Federal 
or State law. 
‘‘(4) REGULATIONS.— 
‘‘(A) IN GENERAL.—The Federal banking 
agencies, in consultation with the Secretary, 
and the Commission, shall jointly prescribe reg-
ulations to— 
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‘‘(i) further define the duty estab-
lished under paragraph (1); 
‘‘(ii) implement the requirements of 
this subsection; 
‘‘(iii) establish the time period within 
which any disclosure required under para-
graph (1) shall be made to the consumer; 
and 
‘‘(iv) establish such other require-
ments for any mortgage originator as such 
regulatory agencies may determine to be 
appropriate to meet the purposes of this 
subsection. 
‘‘(B) COMPLEMENTARY AND NONDUPLICA-
TIVE DISCLOSURES.—The agencies referred to 
in subparagraph (A) shall endeavor to make the 
required disclosures to consumers under this 
subsection complementary and nonduplicative 
with other disclosures for mortgage consumers 
to the extent such efforts— 
‘‘(i) are practicable; and 
‘‘(ii) do not reduce the value of any 
such disclosure to recipients of such disclo-
sures. 
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‘‘(5) COMPLIANCE PROCEDURES REQUIRED.— 
The Federal banking agencies shall prescribe regula-
tions requiring depository institutions to establish 
and maintain procedures reasonably designed to as-
sure and monitor the compliance of such depository 
institutions, the subsidiaries of such institutions, 
and the employees of such institutions or subsidi-
aries with the requirements of this section and the 
registration procedures established under section 
1507 of the Secure and Fair Enforcement for Mort-
gage Licensing Act of 2008.’’. 
(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 items: 
‘‘129A. Fiduciary duty of servicers of pooled residential mortgages. 
‘‘129B. Residential mortgage loan origination.’’. 
SEC. 103. PROHIBITION ON STEERING INCENTIVES. 
Section 129B of the Truth in Lending Act (as added 
by section 102(a)) is amended by inserting after sub-
section (b) the following new subsection: 
‘‘(c) PROHIBITION ON STEERING INCENTIVES.— 
‘‘(1) IN GENERAL.—For any mortgage loan, the 
total amount of direct and indirect compensation 
from all sources permitted to a mortgage originator 
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may not vary based on the terms of the loan (other 
than the amount of the principal). 
‘‘(2) RESTRUCTURING OF FINANCING ORIGINA-
TION FEE.— 
‘‘(A) IN
GENERAL.—For any mortgage 
loan, a mortgage originator may not arrange 
for a consumer to finance through rate any 
origination fee or cost except bona fide third 
party settlement charges not retained by the 
creditor or mortgage originator. 
‘‘(B) EXCEPTION.—Notwithstanding para-
graph subparagraph (A), a mortgage originator 
may arrange for a consumer to finance through 
rate an origination fee or cost if— 
‘‘(i) the mortgage originator does not 
receive any other compensation from the 
consumer except the compensation that is 
financed through rate; and 
‘‘(ii) the mortgage is a qualified mort-
gage. 
‘‘(3) REGULATIONS.—The Federal banking 
agencies, in consultation with the Secretary and the 
Commission, shall jointly prescribe regulations to 
prohibit— 
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‘‘(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 129C(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 129C(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 
129C(c)(3)) to a residential mortgage loan that 
is not a qualified mortgage; 
‘‘(C) abusive or unfair lending practices 
that promote disparities among consumers of 
equal credit worthiness but of different race, 
ethnicity, gender, or age; 
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‘‘(D) mortgage originators from assessing 
excessive points and fees (as such term is de-
scribed under section 103(aa)(4) of the Truth 
in Lending Act (15 U.S.C. 1602(aa)(4))) to a 
consumer for the origination of a residential 
mortgage loan based on such consumer’s deci-
sion to finance all or part of the payment 
through the rate for such points and fees; and 
‘‘(E) mortgage originators from— 
‘‘(i) mischaracterizing the credit his-
tory of a consumer or the residential mort-
gage loans available to a consumer; 
‘‘(ii) mischaracterizing or suborning 
the mischaracterization of the appraised 
value of the property securing the exten-
sion of credit; or 
‘‘(iii) if unable to suggest, offer, or 
recommend to a consumer a loan that is 
not more expensive than a loan for which 
the consumer qualifies, discouraging a con-
sumer from seeking a home mortgage loan 
secured by a consumer’s principal dwelling 
from another mortgage originator. 
‘‘(4) RULES OF CONSTRUCTION.—No provision 
of this subsection shall be construed as— 
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‘‘(A) permitting yield spread premiums or 
other similar incentive compensation; 
‘‘(B) affecting the mechanism for pro-
viding the total amount of direct and indirect 
compensation permitted to a mortgage origi-
nator; 
‘‘(C) limiting or affecting the amount of 
compensation received by a creditor upon the 
sale of a consummated loan to a subsequent 
purchaser; 
‘‘(D) restricting a consumer’s ability to fi-
nance, including through principal, any origina-
tion fees or costs permitted under this sub-
section, or the mortgage originator’s ability to 
receive such fees or costs (including compensa-
tion) from any person, so long as such fees or 
costs were fully and clearly disclosed to the con-
sumer earlier in the application process as re-
quired by 129B(b)(1)(C)(i) and do not vary 
based on the terms of the loan (other than the 
amount of the principal) or the consumer’s de-
cision about whether to finance such fees or 
costs; or 
‘‘(E) prohibiting incentive payments to a 
mortgage originator based on the number of 
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residential mortgage loans originated within a 
specified period of time.’’. 
SEC. 104. LIABILITY. 
Section 129B of the Truth in Lending Act is amend-
ed by inserting after subsection (c) (as added by section 
103) the following new subsection: 
‘‘(d) 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 the greater of actual damages or an 
amount equal to 3 times the total amount of direct 
and indirect compensation or gain accruing to the 
mortgage originator in connection with the residen-
tial mortgage loan involved in the violation, plus the 
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costs to the consumer of the action, including a rea-
sonable attorney’s fee.’’. 
SEC. 105. REGULATIONS. 
(a) DISCRETIONARY REGULATORY AUTHORITY.— 
Section 129B of the Truth in Lending Act is amended 
by inserting after subsection (d) (as added by section 104) 
the following new subsection: 
‘‘(e) DISCRETIONARY REGULATORY AUTHORITY.— 
‘‘(1) IN GENERAL.—The Federal banking agen-
cies shall, by regulations issued jointly, prohibit or 
condition terms, acts or practices relating to residen-
tial mortgage loans that the agencies find to be abu-
sive, unfair, deceptive, predatory, inconsistent with 
reasonable underwriting standards, necessary or 
proper to ensure that responsible, affordable mort-
gage credit remains available to consumers in a 
manner consistent with the purposes of this section 
and section 129B, necessary or proper to effectuate 
the purposes of this section and section 129C, to 
prevent circumvention or evasion thereof, or to facili-
tate compliance with such sections, or are not in the 
interest of the borrower. 
‘‘(2) APPLICATION.—The regulations prescribed 
under paragraph (1) shall be applicable to all resi-
dential mortgage loans and shall be applied in the 
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same manner as regulations prescribed under section 
105. 
‘‘(f) Section 129B and any regulations promulgated 
thereunder do not apply to an extension of credit relating 
to a plan described in section 101(53D) of title 11, United 
States Code.’’. 
(b) EFFECTIVE DATE.—The regulations required or 
authorized to be prescribed under this title or the amend-
ments 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. 
(c) TRUTH
IN LENDING FINAL RULE.—Notwith-
standing any other provision of this Act, the regulations 
adopted by the Board concerning Truth in Lending, 73 
Fed. Reg. 44522 (July 30, 2008), shall take effect as de-
cided by the Board with such exceptions or revisions as 
the Board determines necessary. 
(d) TECHNICAL AND CONFORMING AMENDMENTS.— 
Section 129(l)(2) of the Truth in Lending Act (15 U.S.C. 
1639(l)(2)) is amended by inserting ‘‘referred to in section 
103(aa)’’ after ‘‘loans’’ each place such term appears. 
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SEC. 106. RESPA AND TILA DISCLOSURE IMPROVEMENT. 
(a) COMPATIBLE DISCLOSURES.—The Secretary of 
Housing and Urban Development and the Board of Gov-
ernors of the Federal Reserve shall, not later than the ex-
piration of the 6-month period beginning upon the date 
of the enactment of this Act, jointly issue for public com-
ment proposed regulations providing for compatible disclo-
sures for borrowers to receive at the time of mortgage ap-
plication and at the time of closing. 
(b) REQUIREMENTS.—Such disclosures shall— 
(1) provide clear and concise information to 
borrowers on the terms and costs of residential 
mortgage transactions and mortgage transactions 
covered by the Truth in Lending Act (12 U.S.C. 
1601 et seq.) and the Real Estate Settlement Proce-
dures Act of 1974 (12 U.S.C. 2601 et seq.); 
(2) satisfy the requirements of section 128 of 
the Truth in Lending Act (12 U.S.C. 1638) and sec-
tion 4 and 5 of the Real Estate Settlement Proce-
dures Act of 1974; and 
(3) comprise early disclosures under the Truth 
in Lending Act and the good faith estimate disclo-
sures under the Real Estate Settlement Procedures 
Act of 1974 and final Truth in Lending Act disclo-
sures and the uniform settlement statement disclo-
sures under Real Estate Settlement Procedures Act 
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of 1974 and provide for standardization to the 
greatest extent possible among such disclosures from 
mortgage origination through the mortgage settle-
ment. 
(4) shall include, with respect to a residential 
home mortgage loan, a written statement of— 
(A) the principal amount of the loan; 
(B) the term of the loan; 
(C) whether the loan has a fixed rate of in-
terest or an adjustable rate of interest; 
(D) the annual percentage rate of interest 
under the loan as of the time of the disclosure; 
(E) if the rate of interest under the loan 
can adjust after the disclosure, for each such 
possible adjustment— 
(i) when such adjustment will or may 
occur; and 
(ii) the maximum annual percentage 
rate of interest to which it can be adjusted; 
(F) the total monthly payment under the 
loan (including loan principal and interest, 
property taxes, and insurance) at the time of 
the disclosure; 
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(G) the maximum total estimated monthly 
maximum payment pursuant to each such pos-
sible adjustment; 
(H) the total settlement charges in connec-
tion with the loan and the amount of any down-
payment and cash required at settlement; and 
(I) whether or not the loan has a prepay-
ment penalty or balloon payment and the terms, 
timing, and amount of any such penalty or pay-
ment. 
(c) SUSPENSION OF 2008 RESPA RULE.— 
(1) REQUIREMENT.—The Secretary of Housing 
and Urban Development shall, during the period be-
ginning on the date of the enactment of this Act and 
ending upon issuance of proposed regulations pursu-
ant to subsection (a), suspend implementation of 
any provisions of the final rule referred to in para-
graph (2) that would establish and implement a new 
standardized good faith estimate and a new stand-
ardized uniform settlement statement. Any such pro-
visions shall be replaced by the regulations issued 
pursuant to subsections (a) and (b). 
(2) 2008 RULE.—The final rule referred to in 
this paragraph is the rule of the Department of 
Housing and Urban Development published on No-
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vember 17, 2008, on pages 68204–68288 of Volume 
73 of the Federal Register (Docket No. FR–5180– 
F–03; relating to ‘‘Real Estate Settlement Proce-
dures Act (RESPA): Rule to Simplify and Improve 
the Process of Obtaining Mortgages and Reduce 
Consumer Settlement Costs’’). 
(d) IMPLEMENTATION.—The regulations required 
under subsection (a) shall take effect, and shall provide 
an implementation date for the new disclosures required 
under such regulations, not later than the expiration of 
the 12-month period beginning upon the date of the enact-
ment of this Act. 
(e) FAILURE
TO
ISSUE
COMPATIBLE
DISCLO-
SURES.—If the Secretary of Housing and Urban Develop-
ment and the Board of Governors of the Federal Reserve 
System cannot agree on compatible disclosures pursuant 
to subsections (a) and (b), the Secretary and the Board 
shall submit a report to the Congress, after the 6-month 
period referred to in subsection (a), explaining the reasons 
for such disagreement. After the 15-day period beginning 
upon submission of such report, the Secretary and the 
Board may separately issue for public comment regula-
tions providing for disclosures under the Real Estate Set-
tlement Procedures Act of 1974 and the Truth in Lending 
Act, respectively. Any final disclosures as a result of such 
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regulations issued by the Secretary and the Board shall 
take effect on the same date, and not later than the expi-
ration of the 12-month period beginning on the date of 
the enactment of this Act. If either the Secretary or the 
Board fails to act during such 12-month period, either 
such agency may act independently and implement final 
regulations. 
(f) STANDARDIZED DISCLOSURE FORMS.— 
(1) IN GENERAL.—Any regulations proposed or 
issued pursuant to the requirements of this section 
shall include model disclosure forms. 
(2) OPTION FOR MANDATORY USE.—In issuing 
proposed regulations under subsection (a), the Sec-
retary of Housing and Urban Development and the 
Board of Governors of the Federal Reserve System 
shall include regulations for the mandatory use of 
standardized disclosure forms if they jointly deter-
mine that it would substantially benefit the con-
sumer. 
SEC. 107. STUDY OF SHARED APPRECIATION MORTGAGES. 
(a) STUDY.—The Secretary of Housing and Urban 
Development, in consultation with the Secretary of the 
Treasury and other relevant agencies, shall conduct a com-
prehensive study to determine prudent statutory and regu-
latory requirements sufficient to provide for the wide-
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spread use of shared appreciation mortgages to strengthen 
local housing markets, provide new opportunities for af-
fordable homeownership, and enable homeowners at-risk 
of foreclosure to refinance or modify their mortgages. 
(b) REPORT.—Not later than the expiration of the 
6-month period beginning on the date of the enactment 
of this Act, the Secretary of Housing and Urban Develop-
ment shall submit a report to the Congress on the results 
of the study, which shall include recommendations for the 
regulatory and legislative requirements referred to in sub-
section (a). 
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 129B (as added by section 102(a)) the fol-
lowing new section: 
‘‘§ 129C. 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 
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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 
made to the same consumer, the creditor shall make 
a reasonable and good faith determination, based on 
verified and documented information, that the con-
sumer has a reasonable ability to repay the com-
bined payments of all loans on the same dwelling ac-
cording to the terms of those loans and all applicable 
taxes, insurance, and assessments. 
‘‘(3) BASIS
FOR
DETERMINATION.—A deter-
mination under this subsection of a consumer’s abil-
ity to repay a residential mortgage loan shall include 
consideration of the consumer’s credit history, cur-
rent income, expected income the consumer is rea-
sonably assured of receiving, current obligations, 
debt-to-income ratio, employment status, and other 
financial resources other than the consumer’s equity 
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