SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Expand and Preserve 
Home Ownership Through Counseling Act’’. 
SEC. 2. ESTABLISHMENT OF OFFICE OF HOUSING COUN-
SELING. 
Section 4 of the Department of Housing and Urban 
Development Act (42 U.S.C. 3533) is amended by adding 
at the end the following new subsection: 
‘‘(g) OFFICE OF HOUSING COUNSELING.— 
‘‘(1) ESTABLISHMENT.—There is established, 
in the Office of the Secretary, the Office of Housing 
Counseling. 
‘‘(2) DIRECTOR.—There is established the posi-
tion of Director of Housing Counseling. The Direc-
tor shall be the head of the Office of Housing Coun-
seling and shall be appointed by the Secretary. Such 
position shall be a career-reserved position in the 
Senior Executive Service. 
‘‘(3) FUNCTIONS.— 
‘‘(A) IN
GENERAL.—The Director shall 
have ultimate responsibility within the Depart-
ment, except for the Secretary, for all activities 
and matters relating to homeownership coun-
seling and rental housing counseling, includ-
ing— 
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‘‘(i) research, grant administration, 
public outreach, and policy development re-
lating to such counseling; and 
‘‘(ii) establishment, coordination, and 
administration of all regulations, require-
ments, standards, and performance meas-
ures under programs and laws adminis-
tered by the Department that relate to 
housing counseling, homeownership coun-
seling (including maintenance of homes), 
mortgage-related 
counseling 
(including 
home equity conversion mortgages and 
credit protection options to avoid fore-
closure), and rental housing counseling, in-
cluding the requirements, standards, and 
performance measures relating to housing 
counseling. 
‘‘(B) SPECIFIC FUNCTIONS.—The Director 
shall carry out the functions assigned to the Di-
rector and the Office under this section and any 
other provisions of law. Such functions shall in-
clude establishing rules necessary for— 
‘‘(i) the counseling procedures under 
section 106(g)(1) of the Housing and 
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Urban Development Act of 1968 (12 
U.S.C. 1701x(h)(1)); 
‘‘(ii) carrying out all other functions 
of the Secretary under section 106(g) of 
the Housing and Urban Development Act 
of 1968, including the establishment, oper-
ation, and publication of the availability of 
the toll-free telephone number under para-
graph (2) of such section; 
‘‘(iii) carrying out section 5 of the 
Real Estate Settlement Procedures Act of 
1974 (12 U.S.C. 2604) for home buying 
information booklets prepared pursuant to 
such section; 
‘‘(iv) carrying out the certification 
program under section 106(e) of the Hous-
ing and Urban Development Act of 1968 
(12 U.S.C. 1701x(e)); 
‘‘(v) carrying out the assistance pro-
gram under section 106(a)(4) of the Hous-
ing and Urban Development Act of 1968, 
including criteria for selection of applica-
tions to receive assistance; 
‘‘(vi) carrying out any functions re-
garding abusive, deceptive, or unscrupulous 
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lending practices relating to residential 
mortgage loans that the Secretary con-
siders appropriate, which shall include con-
ducting the study under section 6 of the 
Expand and Preserve Home Ownership 
Through Counseling Act; 
‘‘(vii) providing for operation of the 
advisory committee established under para-
graph (4) of this subsection; 
‘‘(viii) collaborating with community- 
based organizations with expertise in the 
field of housing counseling; and 
‘‘(ix) providing for the building of ca-
pacity to provide housing counseling serv-
ices in areas that lack sufficient services. 
‘‘(4) ADVISORY COMMITTEE.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
appoint an advisory committee to provide advice 
regarding the carrying out of the functions of 
the Director. 
‘‘(B) MEMBERS.—Such advisory committee 
shall consist of not more than 12 individuals, 
and the membership of the committee shall 
equally represent all aspects of the mortgage 
and real estate industry, including consumers. 
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‘‘(C) TERMS.—Except as provided in sub-
paragraph (D), each member of the advisory 
committee shall be appointed for a term of 3 
years. Members may be reappointed at the dis-
cretion of the Secretary. 
‘‘(D) TERMS OF INITIAL APPOINTEES.—As 
designated by the Secretary at the time of ap-
pointment, of the members first appointed to 
the advisory committee, 4 shall be appointed for 
a term of 1 year and 4 shall be appointed for 
a term of 2 years. 
‘‘(E) PROHIBITION OF PAY; TRAVEL EX-
PENSES.—Members of the advisory committee 
shall serve without pay, but shall receive travel 
expenses, including per diem in lieu of subsist-
ence, in accordance with applicable provisions 
under subchapter I of chapter 57 of title 5, 
United States Code. 
‘‘(F) ADVISORY
ROLE
ONLY.—The advi-
sory committee shall have no role in reviewing 
or awarding housing counseling grants. 
‘‘(5) 
SCOPE
OF
HOMEOWNERSHIP
COUN-
SELING.—In carrying out the responsibilities of the 
Director, the Director shall ensure that homeowner-
ship counseling provided by, in connection with, or 
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pursuant to any function, activity, or program of the 
Department addresses the entire process of home-
ownership, including the decision to purchase a 
home, the selection and purchase of a home, issues 
arising during or affecting the period of ownership 
of a home (including refinancing, default and fore-
closure, and other financial decisions), and the sale 
or other disposition of a home.’’. 
SEC. 3. COUNSELING PROCEDURES. 
(a) IN GENERAL.—Section 106 of the Housing and 
Urban Development Act of 1968 (12 U.S.C. 1701x) is 
amended by adding at the end the following new sub-
section: 
‘‘(g) PROCEDURES AND ACTIVITIES.— 
‘‘(1) COUNSELING PROCEDURES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish, coordinate, and monitor the adminis-
tration by the Department of Housing and 
Urban Development of the counseling proce-
dures for homeownership counseling and rental 
housing counseling provided in connection with 
any program of the Department, including all 
requirements, 
standards, 
and 
performance 
measures that relate to homeownership and 
rental housing counseling. 
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‘‘(xii) section 508 of the Housing and 
Urban Development Act of 1970 (12 
U.S.C. 1701z–7). 
‘‘(C) RENTAL
HOUSING
COUNSELING.— 
For purposes of this subsection, the term ‘rent-
al housing counseling’ means counseling related 
to rental of residential property, which may in-
clude counseling regarding future homeowner-
ship opportunities and providing referrals for 
renters and prospective renters to entities pro-
viding counseling and shall include counseling 
related to such topics that is provided pursuant 
to— 
‘‘(i) section 105(a)(20) of the Housing 
and Community Development Act of 1974 
(42 U.S.C. 5305(a)(20)); 
‘‘(ii) in the United States Housing 
Act of 1937— 
‘‘(I) section 9(e) (42 U.S.C. 
1437g(e)); 
‘‘(II) section 18(a)(4)(D) (42 
U.S.C. 1437p(a)(4)(D)); 
‘‘(III) 
section 
23(c)(4) 
(42 
U.S.C. 1437u(c)(4)); 
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‘‘(IV) section 32(e)(4) (42 U.S.C. 
1437z–4(e)(4)); 
‘‘(V) section 33(d)(2)(B) (42 
U.S.C. 1437z–5(d)(2)(B)); and 
‘‘(VI) 
section 
302(b)(6) 
(42 
U.S.C. 1437aaa–1(b)(6)); 
‘‘(iii) section 233(b)(2) of the Cran-
ston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12773(b)(2)); 
‘‘(iv) section 106 of the Housing and 
Urban Development Act of 1968 (12 
U.S.C. 1701x); 
‘‘(v) section 422(b)(6) of the Cran-
ston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12872(b)(6)); 
‘‘(vi) section 491(b)(1)(F)(iii) of the 
McKinney-Vento Homeless Assistance Act 
(42 U.S.C. 11408(b)(1)(F)(iii)); 
‘‘(vii) 
sections 
202(3) 
and 
810(b)(2)(A) of the Native American 
Housing and Self-Determination Act of 
1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); 
and 
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‘‘(viii) the rental assistance program 
under section 8 of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437f). 
‘‘(2) STANDARDS FOR MATERIALS.—The Sec-
retary, in conjunction with the advisory committee 
established under section 4(g)(4) of the Department 
of Housing and Urban Development Act (42 U.S.C. 
3533(g)(4), shall establish standards for materials 
and forms to be used, as appropriate, by organiza-
tions providing homeownership counseling services, 
including any recipients of assistance pursuant to 
subsection (a)(4). 
‘‘(3) MORTGAGE SOFTWARE SYSTEMS.— 
‘‘(A) CERTIFICATION.—The Secretary shall 
provide for the certification of various computer 
software programs for consumers to use in eval-
uating different residential mortgage loan pro-
posals. The Secretary shall require, for such 
certification, that the mortgage software sys-
tems take into account— 
‘‘(i) the consumer’s financial situation 
and the cost of maintaining a home, in-
cluding insurance, taxes, and utilities; 
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‘‘(ii) the amount of time the consumer 
expects to remain in the home or expected 
time to maturity of the loan; 
‘‘(iii) such other factors as the Sec-
retary considers appropriate to assist the 
consumer in evaluating whether to pay 
points, to lock in an interest rate, to select 
an adjustable or fixed rate loan, to select 
a conventional or government-insured or 
guaranteed loan and to make other choices 
during the loan application process. 
If the Secretary determines that available exist-
ing software is inadequate to assist consumers 
during the residential mortgage loan application 
process, the Secretary shall arrange for the de-
velopment by private sector software companies 
of new mortgage software systems that meet 
the Secretary’s specifications. 
‘‘(B) USE
AND
INITIAL
AVAILABILITY.— 
Such certified computer software programs 
shall be used to supplement, not replace, hous-
ing counseling. The Secretary shall provide that 
such programs are initially used only in connec-
tion with the assistance of housing counselors 
certified pursuant to subsection (e). 
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‘‘(C) AVAILABILITY.—After a period of ini-
tial availability under subparagraph (B) as the 
Secretary considers appropriate, the Secretary 
shall take reasonable steps to make mortgage 
software systems certified pursuant to this 
paragraph widely available through the Internet 
and at public locations, including public librar-
ies, senior-citizen centers, public housing sites, 
offices of public housing agencies that admin-
ister rental housing assistance vouchers, and 
housing counseling centers. 
‘‘(4) NATIONAL PUBLIC SERVICE MULTIMEDIA 
CAMPAIGNS TO PROMOTE HOUSING COUNSELING.— 
‘‘(A) IN GENERAL.—The Director of Hous-
ing Counseling shall develop, implement, and 
conduct national public service multimedia cam-
paigns designed to make persons facing mort-
gage 
foreclosure, 
persons 
considering 
a 
subprime mortgage loan to purchase a home, el-
derly persons, persons who face language bar-
riers, low-income persons, and other potentially 
vulnerable consumers aware that it is advisable, 
before seeking or maintaining a residential 
mortgage loan, to obtain homeownership coun-
seling from an unbiased and reliable sources 
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and that such homeownership counseling is 
available, including through programs spon-
sored by the Secretary of Housing and Urban 
Development. 
‘‘(B) CONTACT INFORMATION.—Each seg-
ment of the multimedia campaign under sub-
paragraph (A) shall publicize the toll-free tele-
phone number and web site of the Department 
of Housing and Urban Development through 
which persons seeking housing counseling can 
locate a housing counseling agency in their 
State that is certified by the Secretary of Hous-
ing and Urban Development and can provide 
advice on buying a home, renting, defaults, 
foreclosures, credit issues, and reverse mort-
gages. 
‘‘(C) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There are authorized to be appro-
priated to the Secretary, not to exceed 
$3,000,000 for fiscal years 2009, 2010, and 
2011, for the development, implementation, and 
conducting of national public service multimedia 
campaigns under this paragraph. 
‘‘(5) EDUCATION
PROGRAMS.—The Secretary 
shall provide advice and technical assistance to 
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States, units of general local government, and non-
profit organizations regarding the establishment and 
operation of, including assistance with the develop-
ment of content and materials for, educational pro-
grams to inform and educate consumers, particularly 
those most vulnerable with respect to residential 
mortgage loans (such as elderly persons, persons 
facing language barriers, low-income persons, and 
other potentially vulnerable consumers), regarding 
home mortgages, mortgage refinancing, home equity 
loans, and home repair loans.’’. 
(b) CONFORMING AMENDMENTS
TO GRANT PRO-
GRAM
FOR HOMEOWNERSHIP COUNSELING ORGANIZA-
TIONS.—Section 106(c)(5)(A)(ii) of the Housing and 
Urban 
Development 
Act 
of 
1968 
(12 
U.S.C. 
1701x(c)(5)(A)(ii)) is amended— 
(1) in subclause (III), by striking ‘‘and’’ at the 
end; 
(2) in subclause (IV) by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by inserting after subclause (IV) the fol-
lowing new subclause: 
‘‘(V) notify the housing or mort-
gage applicant of the availability of 
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mortgage software systems provided 
pursuant to subsection (g)(3).’’. 
SEC. 4. GRANTS FOR HOUSING COUNSELING ASSISTANCE. 
Section 106(a) of the Housing and Urban Develop-
ment Act of 1968 (12 U.S.C. 1701x(a)(3)) is amended 
by adding at the end the following new paragraph: 
‘‘(4) HOMEOWNERSHIP AND RENTAL COUNSELING 
ASSISTANCE.— 
‘‘(A) IN GENERAL.—The Secretary shall make 
financial assistance available under this paragraph 
to States, units of general local governments, and 
nonprofit organizations providing homeownership or 
rental counseling (as such terms are defined in sub-
section (g)(1)). 
‘‘(B) QUALIFIED
ENTITIES.—The Secretary 
shall establish standards and guidelines for eligibility 
of organizations (including governmental and non-
profit organizations) to receive assistance under this 
paragraph. 
‘‘(C) DISTRIBUTION.—Assistance made avail-
able under this paragraph shall be distributed in a 
manner that encourages efficient and successful 
counseling programs. 
‘‘(D) AUTHORIZATION OF APPROPRIATIONS.— 
There 
are 
authorized 
to 
be 
appropriated 
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$45,000,000 for each of fiscal years 2009 through 
2012 for— 
‘‘(i) the operations of the Office of Hous-
ing Counseling of the Department of Housing 
and Urban Development; 
‘‘(ii) the responsibilities of the Secretary 
under paragraphs (2) through (5) of subsection 
(g); and 
‘‘(iii) assistance pursuant to this para-
graph for entities providing homeownership and 
rental counseling.’’. 
SEC. 5. REQUIREMENTS TO USE HUD-CERTIFIED COUN-
SELORS UNDER HUD PROGRAMS. 
Section 106(e) of the Housing and Urban Develop-
ment Act of 1968 (12 U.S.C. 1701x(e)) is amended— 
(1) by striking paragraph (1) and inserting the 
following new paragraph: 
‘‘(1) REQUIREMENT FOR ASSISTANCE.—An or-
ganization may not receive assistance for counseling 
activities under subsection (a)(1)(iii), (a)(2), (a)(4), 
(c), or (d) of this section, or under section 101(e), 
unless the organization, or the individuals through 
which the organization provides such counseling, has 
been certified by the Secretary under this subsection 
as competent to provide such counseling.’’; 
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(2) in paragraph (2)— 
(A) by inserting ‘‘and for certifying organi-
zations’’ before the period at the end of the 
first sentence; and 
(B) in the second sentence by striking ‘‘for 
certification’’ and inserting ‘‘, for certification 
of an organization, that each individual through 
which the organization provides counseling shall 
demonstrate, and, for certification of an indi-
vidual,’’; 
(3) in paragraph (3), by inserting ‘‘organiza-
tions and’’ before ‘‘individuals’’; 
(4) by redesignating paragraph (3) as para-
graph (5); and 
(5) by inserting after paragraph (2) the fol-
lowing new paragraphs: 
‘‘(3) REQUIREMENT UNDER HUD PROGRAMS.— 
Any homeownership counseling or rental housing 
counseling (as such terms are defined in subsection 
(g)(1)) required under, or provided in connection 
with, any program administered by the Department 
of Housing and Urban Development shall be pro-
vided only by organizations or counselors certified by 
the Secretary under this subsection as competent to 
provide such counseling. 
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‘‘(4) OUTREACH.—The Secretary shall take 
such actions as the Secretary considers appropriate 
to ensure that individuals and organizations pro-
viding homeownership or rental housing counseling 
are aware of the certification requirements and 
standards of this subsection and of the training and 
certification programs under subsection (f).’’. 
SEC. 6. STUDY OF DEFAULTS AND FORECLOSURES. 
The Secretary of Housing and Urban Development 
shall conduct an extensive study of the root causes of de-
fault and foreclosure of home loans, using as much empir-
ical data as are available. The study shall also examine 
the role of escrow accounts in helping prime and nonprime 
borrowers to avoid defaults and foreclosures. Not later 
than 12 months after the date of the enactment of this 
Act, the Secretary shall submit to the Congress a prelimi-
nary report regarding the study. Not later than 24 months 
after such date of enactment, the Secretary shall submit 
a final report regarding the results of the study, which 
shall include any recommended legislation relating to the 
study, and recommendations for best practices and for a 
process to identify populations that need counseling the 
most. 
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SEC. 7. DEFINITIONS FOR COUNSELING-RELATED PRO-
GRAMS. 
Section 106 of the Housing and Urban Development 
Act of 1968 (12 U.S.C. 1701x), as amended by the pre-
ceding provisions of this Act, is further amended by add-
ing at the end the following new subsection: 
‘‘(h) DEFINITIONS.—For purposes of this section: 
‘‘(1) NONPROFIT
ORGANIZATION.—The term 
‘nonprofit organization’ has the meaning given such 
term in section 104(5) of the Cranston-Gonzalez Na-
tional 
Affordable 
Housing 
Act 
(42 
U.S.C. 
12704(5)), except that subparagraph (D) of such 
section shall not apply for purposes of this section. 
‘‘(2) STATE.—The term ‘State’ means each of 
the several States, the Commonwealth of Puerto 
Rico, the District of Columbia, the Commonwealth 
of the Northern Mariana Islands, Guam, the Virgin 
Islands, American Samoa, the Trust Territories of 
the Pacific, or any other possession of the United 
States. 
‘‘(3) UNIT
OF
GENERAL
LOCAL
GOVERN-
MENT.—The term ‘unit of general local government’ 
means any city, county, parish, town, township, bor-
ough, village, or other general purpose political sub-
division of a State.’’. 
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SEC. 8. UPDATING AND SIMPLIFICATION OF MORTGAGE IN-
FORMATION BOOKLET. 
Section 5 of the Real Estate Settlement Procedures 
Act of 1974 (12 U.S.C. 2604) is amended— 
(1) in the section heading, by striking ‘‘SPE-
CIAL’’ and inserting ‘‘HOME BUYING’’; 
(2) by striking subsections (a) and (b) and in-
serting the following new subsections: 
‘‘(a) PREPARATION AND DISTRIBUTION.—The Sec-
retary shall prepare, at least once every 5 years, a booklet 
to help consumers applying for federally related mortgage 
loans to understand the nature and costs of real estate 
settlement services. The Secretary shall prepare the book-
let in various languages and cultural styles, as the Sec-
retary determines to be appropriate, so that the booklet 
is understandable and accessible to homebuyers of dif-
ferent ethnic and cultural backgrounds. The Secretary 
shall distribute such booklets to all lenders that make fed-
erally related mortgage loans. The Secretary shall also dis-
tribute to such lenders lists, organized by location, of 
homeownership counselors certified under section 106(e) 
of the Housing and Urban Development Act of 1968 (12 
U.S.C. 1701x(e)) for use in complying with the require-
ment under subsection (c) of this section. 
‘‘(b) CONTENTS.—Each booklet shall be in such form 
and detail as the Secretary shall prescribe and, in addition 
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to such other information as the Secretary may provide, 
shall include in plain and understandable language the fol-
lowing information: 
‘‘(1) A description and explanation of the na-
ture and purpose of the costs incident to a real es-
tate settlement or a federally related mortgage loan. 
The description and explanation shall provide gen-
eral information about the mortgage process as well 
as specific information concerning, at a minimum— 
‘‘(A) balloon payments; 
‘‘(B) prepayment penalties; and 
‘‘(C) the trade-off between closing costs 
and the interest rate over the life of the loan. 
‘‘(2) An explanation and sample of the uniform 
settlement statement required by section 4. 
‘‘(3) A list and explanation of lending practices, 
including those prohibited by the Truth in Lending 
Act or other applicable Federal law, and of other un-
fair practices and unreasonable or unnecessary 
charges to be avoided by the prospective buyer with 
respect to a real estate settlement. 
‘‘(4) A list and explanation of questions a con-
sumer obtaining a federally related mortgage loan 
should ask regarding the loan, including whether the 
consumer will have the ability to repay the loan, 
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whether the consumer sufficiently shopped for the 
loan, whether the loan terms include prepayment 
penalties or balloon payments, and whether the loan 
will benefit the borrower. 
‘‘(5) An explanation of the right of rescission as 
to certain transactions provided by sections 125 and 
129 of the Truth in Lending Act. 
‘‘(6) A brief explanation of the nature of a vari-
able rate mortgage and a reference to the booklet 
entitled ‘Consumer Handbook on Adjustable Rate 
Mortgages’, published by the Board of Governors of 
the Federal Reserve System pursuant to section 
226.19(b)(1) of title 12, Code of Federal Regula-
tions, or to any suitable substitute of such booklet 
that such Board of Governors may subsequently 
adopt pursuant to such section. 
‘‘(7) A brief explanation of the nature of a 
home equity line of credit and a reference to the 
pamphlet required to be provided under section 
127A of the Truth in Lending Act. 
‘‘(8) Information about homeownership coun-
seling services made available pursuant to section 
106(a)(4) of the Housing and Urban Development 
Act of 1968 (12 U.S.C. 1701x(a)(4)), a rec-
ommendation that the consumer use such services, 
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and notification that a list of certified providers of 
homeownership counseling in the area, and their 
contact information, is available. 
‘‘(9) An explanation of the nature and purpose 
of escrow accounts when used in connection with 
loans secured by residential real estate and the re-
quirements under section 10 of this Act regarding 
such accounts. 
‘‘(10) An explanation of the choices available to 
buyers of residential real estate in selecting persons 
to provide necessary services incidental to a real es-
tate settlement. 
‘‘(11) An explanation of a consumer’s respon-
sibilities, liabilities, and obligations in a mortgage 
transaction. 
‘‘(12) An explanation of the nature and purpose 
of real estate appraisals, including the difference be-
tween an appraisal and a home inspection. 
‘‘(13) Notice that the Office of Housing of the 
Department of Housing and Urban Development has 
made publicly available a brochure regarding loan 
fraud and a World Wide Web address and toll-free 
telephone number for obtaining the brochure. 
The booklet prepared pursuant to this section shall take 
into consideration differences in real estate settlement pro-
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cedures that may exist among the several States and terri-
tories of the United States and among separate political 
subdivisions within the same State and territory.’’; 
(3) in subsection (c), by inserting at the end 
the following new sentence: ‘‘Each lender shall also 
include with the booklet a reasonably complete or 
updated list of homeownership counselors who are 
certified pursuant to section 106(e) of the Housing 
and Urban Development Act of 1968 (12 U.S.C. 
1701x(e)) and located in the area of the lender.’’; 
and 
(4) in subsection (d), by inserting after the pe-
riod at the end of the first sentence the following: 
‘‘The lender shall provide the HUD-issued booklet in 
the version that is most appropriate for the person 
receiving it.’’. 
Æ 
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