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.
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
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-
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
(B) and who performs purely administrative or 
clerical tasks on behalf of a person who is de-
scribed in any such subparagraph, or (ii) an 
employee of a retailer of manufactured homes 
who is not described in clause (i) or (iii) of sub-
paragraph (A) and who does not advise a con-
sumer on loan terms (including rates, fees, and 
other costs); 
‘‘(D) does not include a person or entity 
that only performs real estate brokerage activi-
ties and is licensed or registered in accordance 
with applicable State law, unless such person or 
entity is compensated for performing such bro-
kerage activities by a lender, a mortgage 
broker, or other mortgage originator or by any 
agent of such lender, mortgage broker, or other 
mortgage originator; 
‘‘(E) does not include, with respect to a 
residential mortgage loan, a person, estate, or 
trust that provides mortgage financing for the 
sale of 1 property in any 36-month period, pro-
vided that such loan— 
‘‘(i) is fully amortizing; 
‘‘(ii) is with respect to a sale for 
which the seller determines in good faith
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.
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
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);
‘‘(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
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
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—
‘‘(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.
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—
‘‘(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;
‘‘(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—
‘‘(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
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
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
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.
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
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;
(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-
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
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-
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
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
in the dwelling or real property that secures repay-
ment of the loan. 
‘‘(4) INCOME VERIFICATION.—In order to safe-
guard against fraudulent reporting, any consider-
ation of a consumer’s income history in making a 
determination under this subsection shall include the 
verification of such income by the use of— 
‘‘(A) Internal Revenue Service transcripts 
of tax returns provided by a third party; or 
‘‘(B) such other similar method that quick-
ly and effectively verifies income documentation 
by a third party as the Federal banking agen-
cies may jointly prescribe. 
‘‘(5) NONSTANDARD LOANS.— 
‘‘(A) VARIABLE RATE LOANS THAT DEFER 
REPAYMENT
OF
ANY
PRINCIPAL
OR
INTER-
EST.—For purposes of determining, under this 
subsection, a consumer’s ability to repay a vari-
able rate residential mortgage loan that allows 
or requires the consumer to defer the repay-
ment of any principal or interest, the creditor 
shall use a fully amortizing repayment schedule. 
‘‘(B) INTEREST-ONLY
LOANS.—For pur-
poses of determining, under this subsection, a 
consumer’s ability to repay a residential mort-
gage loan that permits or requires the payment 
of interest only, the creditor shall use the pay-
ment amount required to amortize the loan by 
its final maturity. 
‘‘(C) CALCULATION FOR NEGATIVE AMOR-
TIZATION.—In making any determination under 
this subsection, a creditor shall also take into 
consideration any balance increase that may ac-
crue from any negative amortization provision. 
‘‘(D) CALCULATION
PROCESS.—For pur-
poses of making any determination under this 
subsection, a creditor shall calculate the month-
ly payment amount for principal and interest on 
any residential mortgage loan by assuming— 
‘‘(i) the loan proceeds are fully dis-
bursed on the date of the consummation of 
the loan; 
‘‘(ii) the loan is to be repaid in sub-
stantially equal monthly amortizing pay-
ments for principal and interest over the 
entire term of the loan with no balloon 
payment, unless the loan contract requires 
more rapid repayment (including balloon 
payment), in which case the calculation 
shall be made (I) in accordance with regu-
lations prescribed by the Federal banking 
agencies, with respect to any loan which 
has an annual percentage rate that does 
not exceed the average prime offer rate for 
a comparable transaction, as of the date 
the interest rate is set, by 1.5 or more per-
centage points for a first lien residential 
mortgage loan; and by 3.5 or more per-
centage points for a subordinate lien resi-
dential mortgage loan; or (II) using the 
contract’s repayment schedule, with re-
spect to a loan which has an annual per-
centage rate, as of the date the interest 
rate is set, that is at least 1.5 percentage 
points above the average prime offer rate 
for a first lien residential mortgage loan; 
and 3.5 percentage points above the aver-
age prime offer rate for a subordinate lien 
residential mortgage loan; and 
‘‘(iii) the interest rate over the entire 
term of the loan is a fixed rate equal to the 
fully indexed rate at the time of the loan 
closing, without considering the introduc-
tory rate.
‘‘(E) REFINANCE OF HYBRID LOANS WITH 
CURRENT LENDER.—In considering any appli-
cation for refinancing an existing hybrid loan 
by the creditor into a standard loan to be made 
by the same creditor in any case in which the 
sole net-tangible benefit to the mortgagor would 
be a reduction in monthly payment and the 
mortgagor has not been delinquent on any pay-
ment on the existing hybrid loan, the creditor 
may— 
‘‘(i) consider the mortgagor’s good 
standing on the existing mortgage; 
‘‘(ii) consider if the extension of new 
credit would prevent a likely default should 
the original mortgage reset and give such 
concerns a higher priority as an acceptable 
underwriting practice; and 
‘‘(iii) offer rate discounts and other 
favorable terms to such mortgagor that 
would be available to new customers with 
high credit ratings based on such under-
writing practice. 
‘‘(6) FULLY-INDEXED
RATE
DEFINED.—For 
purposes of this subsection, the term ‘fully indexed 
rate’ means the index rate prevailing on a residential
mortgage loan at the time the loan is made plus the 
margin that will apply after the expiration of any in-
troductory interest rates.’’. 
(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 129B (as 
added by section 102(b)) the following new item: 
‘‘129C. Minimum standards for residential mortgage loans.’’. 
SEC. 202. NET TANGIBLE BENEFIT FOR REFINANCING OF 
RESIDENTIAL MORTGAGE LOANS. 
Section 129C of the Truth in Lending Act (as added 
by section 201(a)) is amended by inserting after sub-
section (a) the following new subsection: 
‘‘(b) NET TANGIBLE BENEFIT FOR REFINANCING OF 
RESIDENTIAL MORTGAGE LOANS.— 
‘‘(1) IN GENERAL.—In accordance with regula-
tions prescribed under paragraph (3), no creditor 
may extend credit in connection with any residential 
mortgage loan that involves a refinancing of a prior 
existing residential mortgage loan unless the creditor 
reasonably and in good faith determines, at the time 
the loan is consummated and on the basis of infor-
mation known by or obtained in good faith by the 
creditor, that the refinanced loan will provide a net 
tangible benefit to the consumer.
‘‘(2) CERTAIN LOANS PROVIDING NO NET TAN-
GIBLE BENEFIT.—A residential mortgage loan that 
involves a refinancing of a prior existing residential 
mortgage loan shall not be considered to provide a 
net tangible benefit to the consumer if the costs of 
the refinanced loan, including points, fees and other 
charges, exceed the amount of any newly advanced 
principal without any corresponding changes in the 
terms of the refinanced loan that are advantageous 
to the consumer. 
‘‘(3) NET
TANGIBLE
BENEFIT.—The Federal 
banking agencies shall jointly prescribe regulations 
defining the term ‘net tangible benefit’ for purposes 
of this subsection.’’. 
SEC. 203. SAFE HARBOR AND REBUTTABLE PRESUMPTION. 
Section 129C of the Truth in Lending Act is amend-
ed by inserting after subsection (b) (as added by section 
202) the following new subsection: 
‘‘(c) PRESUMPTION OF ABILITY TO REPAY AND NET 
TANGIBLE BENEFIT.— 
‘‘(1) IN GENERAL.—Any creditor with respect 
to any residential mortgage loan, and any assignee 
or securitizer of such loan, may presume that the 
loan has met the requirements of subsections (a) 
and (b), if the loan is a qualified mortgage.
‘‘(2) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply: 
‘‘(A) QUALIFIED
MORTGAGE.—The term 
‘qualified mortgage’ means any residential 
mortgage loan— 
‘‘(i) that does not allow a consumer to 
defer repayment of principal or interest, or 
is not otherwise deemed a ‘non-traditional 
mortgage’ under guidance, advisories, or 
regulations prescribed by the Federal 
Banking Agencies; 
‘‘(ii) that does not provide for a re-
payment schedule that results in negative 
amortization at any time; 
‘‘(iii) for which the terms are fully 
amortizing and which does not result in a 
balloon payment, where a ‘balloon pay-
ment’ is a scheduled payment that is more 
than twice as large as the average of ear-
lier scheduled payments; 
‘‘(iv) which has an annual percentage 
rate that does not exceed the average 
prime offer rate for a comparable trans-
action, as of the date the interest rate is 
set—
‘‘(I) by 1.5 or more percentage 
points, in the case of a first lien resi-
dential mortgage loan having a origi-
nal principal obligation amount that is 
equal to or less than the amount of 
the maximum limitation on the origi-
nal principal obligation of mortgage in 
effect for a residence of the applicable 
size, as of the date of such interest 
rate set, pursuant to the sixth sen-
tence of section 305(a)(2) the Federal 
Home Loan Mortgage Corporation 
Act (12 U.S.C. 1454(a)(2)); 
‘‘(II) by 2.5 or more percentage 
points, in the case of a first lien resi-
dential mortgage loan having a origi-
nal principal obligation amount that is 
more than the amount of the max-
imum limitation on the original prin-
cipal obligation of mortgage in effect 
for a residence of the applicable size, 
as of the date of such interest rate 
set, pursuant to the sixth sentence of 
section 305(a)(2) the Federal Home
Loan Mortgage Corporation Act (12 
U.S.C. 1454(a)(2)); and 
‘‘(III) by 3.5 or more percentage 
points, in the case of a subordinate 
lien residential mortgage loan; 
‘‘(v) for which the income and finan-
cial resources relied upon to qualify the ob-
ligors on the loan are verified and docu-
mented; 
‘‘(vi) in the case of a fixed rate loan, 
for which the underwriting process is based 
on a payment schedule that fully amortizes 
the loan over the loan term and takes into 
account all applicable taxes, insurance, and 
assessments; 
‘‘(vii) in the case of an adjustable rate 
loan, for which the underwriting is based 
on the maximum rate permitted under the 
loan during the first seven years, and a 
payment schedule that fully amortizes the 
loan over the loan term and takes into ac-
count all applicable taxes, insurance, and 
assessments; 
‘‘(viii) that does not cause the con-
sumer’s total monthly debts, including
amounts under the loan, to exceed a per-
centage established by regulation of the 
consumer’s monthly gross income or such 
other maximum percentage of such income 
as may be prescribed by regulation under 
paragraph (4), and such rules shall also 
take into consideration the consumer’s in-
come available to pay regular expenses 
after payment of all installment and revolv-
ing debt; 
‘‘(ix) for which the total points and 
fees payable in connection with the loan do 
not exceed 2 percent of the total loan 
amount, where ‘points and fees’ means 
points and fees as defined by Section 
103(aa)(4) of the Truth in Lending Act 
(15 U.S.C. 1602(aa)(4)); and 
‘‘(x) for which the term of the loan 
does not exceed 30 years, except as such 
term may be extended under paragraph 
(4). 
‘‘(B) AVERAGE PRIME OFFER RATE.—The 
term ‘average prime offer rate’ means an an-
nual percentage rate that is derived from aver-
age interest rates, points, and other loan pric-
ing terms currently offered to consumers by a 
representative sample of creditors for mortgage 
transactions that have low risk pricing charac-
teristics. 
‘‘(3) PUBLICATION OF AVERAGE PRIME OFFER 
RATE AND APR THRESHOLDS.—The Board— 
‘‘(A) shall publish, and update at least 
weekly, average prime offer rates; 
‘‘(B) may publish multiple rates based on 
varying types of mortgage transactions; and 
‘‘(C) shall adjust the thresholds of 1.50 
percentage points in paragraph (2)(A)(iv)(I), 
2.50 
percentage 
points 
in 
paragraph 
(2)(A)(iv)(II), and 3.50 percentage points in 
paragraph (2)(A)(v)(III), as necessary to reflect 
significant changes in market conditions and to 
effectuate the purposes of the Mortgage Reform 
and Anti-Predatory Lending Act. 
‘‘(4) REGULATIONS.— 
‘‘(A) IN GENERAL.—The Federal banking 
agencies shall jointly prescribe regulations to 
carry out the purposes of this subsection. 
‘‘(B) REVISION
OF
SAFE
HARBOR
CRI-
TERIA.—
‘‘(i) IN GENERAL.—The Federal bank-
ing agencies may jointly prescribe regula-
tions that revise, add to, or subtract from 
the criteria that define a qualified mort-
gage upon a finding that such regulations 
are necessary or proper to ensure that re-
sponsible, affordable mortgage credit re-
mains available to consumers in a manner 
consistent with the purposes of this sec-
tion, necessary and appropriate to effec-
tuate the purposes of this section and sec-
tion 129B, to prevent circumvention or 
evasion thereof, or to facilitate compliance 
with such sections. 
‘‘(ii) LOAN
DEFINITION.—The fol-
lowing agencies shall, in consultation with 
the Federal banking agencies, prescribe 
rules defining the types of loans they in-
sure, guarantee or administer, as the case 
may be, that are Qualified Mortgages for 
purposes of subsection (c)(1)(A) upon a 
finding that such rules are consistent with 
the purposes of this section and section 
129B, to prevent circumvention or evasion
thereof, or to facilitate compliance with 
such sections— 
‘‘(I) The Department of Housing 
and Urban Development, with regard 
to mortgages insured under title II of 
the National Housing Act (12 U.S.C. 
1707 et seq.); 
‘‘(II) The Secretary of Veterans 
Affairs, with regard to a loan made or 
guaranteed by the Secretary of Vet-
erans Affairs; 
‘‘(III) The Secretary of Agri-
culture, with regard loans guaranteed 
by the Secretary of Agriculture pursu-
ant to 42 U.S.C. 1472(h); 
‘‘(IV) The Federal Housing Fi-
nance Agency, with regard to loans 
meeting the conforming loan stand-
ards of the Federal National Mort-
gage Corporation or the Federal 
Home Loan Mortgage Corporation; 
and 
‘‘(V) The Rural Housing Service, 
with regard to loans insured by the 
Rural Housing Service.’’.
SEC. 204. LIABILITY. 
Section 129C of the Truth in Lending Act is amend-
ed by inserting after subsection (c) (as added by section 
203) the following new subsection: 
‘‘(d) LIABILITY FOR VIOLATIONS.— 
‘‘(1) IN GENERAL.— 
‘‘(A) RESCISSION.—In addition to any 
other liability under this title for a violation by 
a creditor of subsection (a) or (b) (for example 
under section 130) and subject to the statute of 
limitations in paragraph (9), a civil action may 
be maintained against a creditor for a violation 
of subsection (a) or (b) with respect to a resi-
dential mortgage loan for the rescission of the 
loan, and such additional costs as the obligor 
may have incurred as a result of the violation 
and in connection with obtaining a rescission of 
the loan, including a reasonable attorney’s fee. 
‘‘(B) CURE.—A creditor shall not be liable 
for rescission under subparagraph (A) with re-
spect to a residential mortgage loan if, no later 
than 90 days after the receipt of notification 
from the consumer that the loan violates sub-
section (a) or (b), the creditor, acting in good 
faith, a cure.
‘‘(2) LIMITED ASSIGNEE AND SECURITIZER LI-
ABILITY.—Notwithstanding sections 125(e) and 131 
and except as provided in paragraph (3), a civil ac-
tion which may be maintained against a creditor 
with respect to a residential mortgage loan for a vio-
lation of subsection (a) or (b) may be maintained 
against any assignee or securitizer of such residen-
tial mortgage loan, who has acted in good faith, for 
the following liabilities only: 
‘‘(A) Rescission of the loan. 
‘‘(B) Such additional costs as the obligor 
may have incurred as a result of the violation 
and in connection with obtaining a rescission of 
the loan, including a reasonable attorney’s fee. 
‘‘(3) ASSIGNEE
AND
SECURITIZER
EXEMP-
TION.—No assignee or securitizer of a residential 
mortgage loan that has exercised reasonable due dili-
gence in complying with the requirements of sub-
sections (a) and (b), consistent with reasonable due 
diligence practices prescribed by the Federal banking 
agencies, shall be liable under paragraph (2) with re-
spect to such loan if, no later than 90 days after the 
receipt of notification from the consumer that the 
loan violates subsection (a) or (b), the assignee or
securitizer provides a cure so that the loan satisfies 
the requirements of subsections (a) and (b). 
‘‘(4) ABSENT PARTIES.— 
‘‘(A) 
ABSENT
CREDITOR.—Notwith-
standing the exemption provided in paragraph 
(3), if the creditor with respect to a residential 
mortgage loan made in violation of subsection 
(a) or (b) has ceased to exist as a matter of law 
or has filed for bankruptcy protection under 
title 11, United States Code, or has had a re-
ceiver, conservator, or liquidating agent ap-
pointed, a consumer may maintain a civil action 
against an assignee to cure the residential 
mortgage loan, plus the costs and reasonable 
attorney’s fees incurred in obtaining such rem-
edy. 
‘‘(B) ABSENT CREDITOR AND ASSIGNEE.— 
Notwithstanding the exemption provided in 
paragraph (3), if the creditor with respect to a 
residential mortgage loan made in violation of 
subsection (a) or (b) and each assignee of such 
loan have ceased to exist as a matter of law or 
have filed for bankruptcy protection under title 
11, United States Code, or have had receivers, 
conservators, or liquidating agents appointed,
the consumer may maintain the civil action re-
ferred to in subparagraph (A) against the 
securitizer. 
‘‘(5) CURE
DEFINED.—For purposes of this 
subsection, the term ‘cure’ means, with respect to a 
residential mortgage loan that violates subsection (a) 
or (b), the modification or refinancing, at no cost to 
the consumer, of the loan to provide terms that sat-
isfy the requirements of subsections (a) and (b) and 
the payment of such additional costs as the obligor 
may have incurred in connection with obtaining a 
cure of the loan, including a reasonable attorney’s 
fee. 
‘‘(6) DISAGREEMENT OVER CURE.—If any cred-
itor, assignee, or securitizer and a consumer fail to 
reach agreement on a cure with respect to a residen-
tial mortgage loan that violates subsection (a) or (b), 
or the consumer fails to accept a cure proffered by 
a creditor, assignee, or securitizer— 
‘‘(A) the creditor, assignee, or securitizer 
may provide the cure; and 
‘‘(B) the consumer may challenge the ade-
quacy of the cure during the 6-month period be-
ginning when the cure is provided.
If the consumer’s challenge, under this paragraph, 
of a cure is successful, the creditor, assignee, or 
securitizer shall be liable to the consumer for rescis-
sion of the loan and such additional costs under 
paragraph (2). 
‘‘(7) INABILITY TO PROVIDE OR OBTAIN RE-
SCISSION.—If a creditor, assignee, or securitizer 
cannot provide, or a consumer cannot obtain, rescis-
sion under paragraph (1) or (2), the liability of such 
creditor, assignee, or securitizer shall be met by pro-
viding the financial equivalent of a rescission, to-
gether with such additional costs as the obligor may 
have incurred as a result of the violation and in con-
nection with obtaining a rescission of the loan, in-
cluding a reasonable attorney’s fee. 
‘‘(8) NO CLASS ACTIONS AGAINST ASSIGNEE OR 
SECURITIZER
UNDER
PARAGRAPH (2).—Only indi-
vidual actions may be brought against an assignee 
or securitizer of a residential mortgage loan for a 
violation of subsection (a) or (b). 
‘‘(9) STATUTE OF LIMITATIONS.—The liability 
of a creditor, assignee, or securitizer under this sub-
section shall apply in any original action against a 
creditor under paragraph (1) or an assignee or
securitizer under paragraph (2) which is brought be-
fore— 
‘‘(A) in the case of any residential mort-
gage loan other than a loan to which subpara-
graph (B) applies, the end of the 3-year period 
beginning on the date the loan is consummated; 
or 
‘‘(B) in the case of a residential mortgage 
loan that provides for a fixed interest rate for 
an introductory period and then resets or ad-
justs to a variable rate or that provides for a 
nonamortizing payment schedule and then con-
verts to an amortizing payment schedule, the 
earlier of— 
‘‘(i) the end of the 1-year period be-
ginning on the date of such reset, adjust-
ment, or conversion; or 
‘‘(ii) the end of the 6-year period be-
ginning on the date the loan is con-
summated. 
‘‘(10) TRUSTEES, POOLS, AND INVESTORS IN 
POOLS EXCLUDED.—In the case of residential mort-
gage loans acquired or aggregated for the purpose of 
including such loans in a pool of assets held for the 
purpose of issuing or selling instruments rep-
resenting interests in such pools including through a 
securitization vehicle, the terms ‘assignee’ and 
‘securitizer’, as used in this section, do not include 
the securitization vehicle, any trustee that holds 
such loans solely for the benefit of the securitization 
vehicle, the pools of such loans or any original or 
subsequent purchaser of any interest in the 
securitization vehicle or any instrument representing 
a direct or indirect interest in such pool. 
‘‘(e) OBLIGATION OF SECURITIZERS, AND PRESERVA-
TION OF BORROWER REMEDIES.— 
‘‘(1) OBLIGATION
TO
RETAIN
ACCESS.—Any 
securitizer of a residential mortgage loan sold or to 
be sold as part of a securitization vehicle shall, in 
any document or contract providing for the transfer, 
conveyance, 
or 
the 
establishment 
of 
such 
securitization vehicle, reserve the right and preserve 
the ability— 
‘‘(A) to identify and obtain access to any 
such loan; 
‘‘(B) to acquire any such loan in the event 
of a violation of subsection (a) or (b) of this 
section; and
‘‘(C) to provide to the consumer any and 
all remedies provided for under this title for 
any violation of this title. 
‘‘(2) ADDITIONAL DAMAGES.—Any creditor, as-
signee, or securitizer of a residential mortgage loan 
that is subject to a remedy under subsection (d) and 
has failed to comply with paragraph (1) shall be 
subject to additional exemplary or punitive damages 
not to exceed the original principal balance of such 
loan. 
‘‘(3) CONTACT
INFORMATION
NOTICE.—The 
servicer with respect to a residential mortgage loan 
shall provide a written notice to a consumer identi-
fying the name and contact information of the cred-
itor or any assignee or securitizer who should be 
contacted by the consumer for any reason con-
cerning the consumer’s rights with respect to the 
loan. Such notice shall be provided— 
‘‘(A) upon request of the consumer; 
‘‘(B) whenever there is a change in owner-
ship of a residential mortgage loan; or 
‘‘(C) on a regular basis, not less than an-
nually. 
‘‘(f) RULES TO ESTABLISH PROCESS.—The Board 
shall promulgate rules to govern the rescission process es-
tablished for violations of subsections (a) and (b) of this 
section. Such rules shall provide that notice given to a 
servicer or holder is sufficient notice regardless of the 
identity of the party or the parties liable under this title.’’. 
SEC. 205. DEFENSE TO FORECLOSURE. 
Section 129C of the Truth in Lending Act is amend-
ed by inserting after subsection (f) (as added by section 
204) the following new subsections: 
‘‘(g) DEFENSE TO FORECLOSURE.—Notwithstanding 
any other provision of law— 
‘‘(1) when the holder of a residential mortgage 
loan or anyone acting for such holder initiates a ju-
dicial or nonjudicial foreclosure— 
‘‘(A) a consumer who has the right to re-
scind under this section with respect to such 
loan against the creditor or any assignee or 
securitizer may assert such right as a defense 
to foreclosure or counterclaim to such fore-
closure against the holder, or 
‘‘(B) if the foreclosure proceeding begins 
after the end of the period during which a con-
sumer may bring an action for rescission under 
subsection (d) and the consumer would have 
had a valid basis for such an action if it had 
been brought before the end of such period, the
consumer may seek actual damages incurred by 
reason of the violation which gave rise to the 
right of rescission, together with costs of the 
action, including a reasonable attorney’s fee 
against the creditor or any assignee or 
securitizer; and 
‘‘(2) such holder or anyone acting for such 
holder or any other applicable third party may sell, 
transfer, convey, or assign a residential mortgage 
loan to a creditor, any assignee, or any securitizer, 
or their designees, subject to the rights of the con-
sumer described in this subsection, to effect a rescis-
sion or cure.’’. 
SEC. 206. ADDITIONAL STANDARDS AND REQUIREMENTS. 
(a) IN GENERAL.—Section 129C of the Truth in 
Lending Act is amended by inserting after subsection (g) 
(as added by section 205) the following new subsections: 
‘‘(h) PROHIBITION ON CERTAIN PREPAYMENT PEN-
ALTIES.— 
‘‘(1) PROHIBITED ON CERTAIN LOANS.—A resi-
dential mortgage loan that is not a ‘qualified mort-
gage’ may not contain terms under which a con-
sumer must pay a prepayment penalty for paying all 
or part of the principal after the loan is con-
summated. For purposes of this subsection, a ‘quali-
fied mortgage’ may not include a residential mort-
gage loan that has an adjustable rate. 
‘‘(2) PHASED-OUT
PENALTIES
ON
QUALIFIED 
MORTGAGES.—A qualified mortgage (as defined in 
subsection (c)) may not contain terms under which 
a consumer must pay a prepayment penalty for pay-
ing all or part of the principal after the loan is con-
summated in excess of the following limitations: 
‘‘(A) During the 1-year period beginning 
on the date the loan is consummated, the pre-
payment penalty shall not exceed an amount 
equal to 3 percent of the outstanding balance 
on the loan. 
‘‘(B) During the 1-year period beginning 
after the period described in subparagraph (A), 
the prepayment penalty shall not exceed an 
amount equal to 2 percent of the outstanding 
balance on the loan. 
‘‘(C) During the 1-year period beginning 
after the 1-year period described in subpara-
graph (B), the prepayment penalty shall not ex-
ceed an amount equal to 1 percent of the out-
standing balance on the loan. 
‘‘(D) After the end of the 3-year period be-
ginning on the date the loan is consummated,
no prepayment penalty may be imposed on a 
qualified mortgage. 
‘‘(3) OPTION FOR NO PREPAYMENT PENALTY 
REQUIRED.—A creditor may not offer a consumer a 
residential mortgage loan product that has a prepay-
ment penalty for paying all or part of the principal 
after the loan is consummated as a term of the loan 
without offering the consumer a residential mort-
gage loan product that does not have a prepayment 
penalty as a term of the loan. 
‘‘(i) SINGLE PREMIUM CREDIT INSURANCE PROHIB-
ITED.—No creditor may finance, directly or indirectly, in 
connection with any residential mortgage loan or with any 
extension of credit under an open end consumer credit 
plan secured by the principal dwelling of the consumer 
(other than a reverse mortgage), any credit life, credit dis-
ability, credit unemployment or credit property insurance, 
or any other accident, loss-of-income, life or health insur-
ance, or any payments directly or indirectly for any debt 
cancellation or suspension agreement or contract, except 
that— 
‘‘(1) insurance premiums or debt cancellation or 
suspension fees calculated and paid in full on a 
monthly basis shall not be considered financed by 
the creditor; and
‘‘(2) this subsection shall not apply to credit 
unemployment insurance for which the unemploy-
ment insurance premiums are reasonable, the cred-
itor receives no direct or indirect compensation in 
connection with the unemployment insurance pre-
miums, and the unemployment insurance premiums 
are paid pursuant to another insurance contract and 
not paid to an affiliate of the creditor. 
‘‘(j) ARBITRATION.— 
‘‘(1) IN
GENERAL.—No residential mortgage 
loan and no extension of credit under an open end 
consumer credit plan secured by the principal dwell-
ing of the consumer, other than a reverse mortgage, 
may include terms which require arbitration or any 
other nonjudicial procedure as the method for resolv-
ing any controversy or settling any claims arising 
out of the transaction. 
‘‘(2) POST-CONTROVERSY AGREEMENTS.—Sub-
ject to paragraph (3), paragraph (1) shall not be 
construed as limiting the right of the consumer and 
the creditor, any assignee, or any securitizer to 
agree to arbitration or any other nonjudicial proce-
dure as the method for resolving any controversy at 
any time after a dispute or claim under the trans-
action arises.
‘‘(3) NO WAIVER OF STATUTORY CAUSE OF AC-
TION.—No provision of any residential mortgage 
loan or of any extension of credit under an open end 
consumer credit plan secured by the principal dwell-
ing of the consumer (other than a reverse mort-
gage), and no other agreement between the con-
sumer and the creditor relating to the residential 
mortgage loan or extension of credit referred to in 
paragraph (1), shall be applied or interpreted so as 
to bar a consumer from bringing an action in an ap-
propriate district court of the United States, or any 
other court of competent jurisdiction, pursuant to 
section 130 or any other provision of law, for dam-
ages or other relief in connection with any alleged 
violation of this section, any other provision of this 
title, or any other Federal law. 
‘‘(k) MORTGAGES
WITH
NEGATIVE
AMORTIZA-
TION.—No creditor may extend credit to a borrower in 
connection with a consumer credit transaction under an 
open or closed end consumer credit plan secured by a 
dwelling or residential real property that includes a dwell-
ing, other than a reverse mortgage, that provides or per-
mits a payment plan that may, at any time over the term 
of the extension of credit, result in negative amortization 
unless, before such transaction is consummated—
‘‘(1) the creditor provides the consumer with a 
statement that— 
‘‘(A) the pending transaction will or may, 
as the case may be, result in negative amortiza-
tion; 
‘‘(B) describes negative amortization in 
such manner as the Federal banking agencies 
shall prescribe; 
‘‘(C) negative amortization increases the 
outstanding principal balance of the account; 
and 
‘‘(D) negative amortization reduces the 
consumer’s equity in the dwelling or real prop-
erty; and 
‘‘(2) in the case of a first-time borrower with 
respect to a residential mortgage loan that is not a 
qualified mortgage, the first-time borrower provides 
the creditor with sufficient documentation to dem-
onstrate that the consumer received homeownership 
counseling from organizations or counselors certified 
by the Secretary of Housing and Urban Develop-
ment as competent to provide such counseling.’’. 
(b) CONFORMING AMENDMENT RELATING TO EN-
FORCEMENT.—Section 108(a) of the Truth in Lending
Act (15 U.S.C. 1607(a)) is amended by inserting after 
paragraph (6) the following new paragraph: 
‘‘(7) sections 21B and 21C of the Securities 
Exchange Act of 1934, in the case of a broker or 
dealer, other than a depository institution, by the 
Securities and Exchange Commission.’’. 
(c) PROTECTION AGAINST LOSS
OF ANTI-DEFI-
CIENCY PROTECTION.—Section 129C of the Truth in 
Lending Act is amended by inserting after subsection (k) 
(as added by subsection (a) of this section) the following 
new subsection (and designated succeeding subsections ac-
cordingly): 
‘‘(l) PROTECTION AGAINST LOSS
OF ANTI-DEFI-
CIENCY PROTECTION.— 
‘‘(1) DEFINITION.—For purposes of this sub-
section, the term ‘anti-deficiency law’ means the law 
of any State which provides that, in the event of 
foreclosure on the residential property of a consumer 
securing a mortgage, the consumer is not liable, in 
accordance with the terms and limitations of such 
State law, for any deficiency between the sale price 
obtained on such property through foreclosure and 
the outstanding balance of the mortgage. 
‘‘(2) NOTICE AT TIME OF CONSUMMATION.—In 
the case of any residential mortgage loan that is, or
new subsection (and redesignating subsequent subsections 
of such section accordingly): 
‘‘(m) POLICY REGARDING ACCEPTANCE OF PARTIAL 
PAYMENT.—In the case of any residential mortgage loan, 
a creditor shall disclose prior to settlement or, in the case 
of a person becoming a creditor with respect to an existing 
residential mortgage loan, at the time such person be-
comes a creditor— 
‘‘(1) the creditor’s policy regarding the accept-
ance of partial payments; and 
‘‘(2) if partial payments are accepted, how such 
payments will be applied to such mortgage and if 
such payments will be placed in escrow.’’. 
SEC. 207. RULE OF CONSTRUCTION. 
Except as otherwise expressly provided in section 
129B or 129C of the Truth in Lending Act (as added by 
this Act), no provision of such section 129B or 129C shall 
be construed as superseding, repealing, or affecting any 
duty, right, obligation, privilege, or remedy of any person 
under any other provision of the Truth in Lending Act 
or any other provision of Federal or State law. 
SEC. 208. EFFECT ON STATE LAWS. 
(a) IN GENERAL.—Except as provided in subsection 
(b), section 129C(d) of the Truth in Lending Act (as 
added by section 204) shall supersede any State law to
the extent that it provides additional remedies against any 
assignee, securitizer, or securitization vehicle for a viola-
tion of subsection (a) or (b) of section 129C of such Act 
or any other State law the terms of which address the 
specific subject matter of subsection (a) (determination of 
ability to repay) or (b) (requirement of a net tangible ben-
efit) of section 129C of such Act, and the remedies de-
scribed in section 129C(d) shall constitute the sole rem-
edies against any assignee, securitizer, or securitization 
vehicle for such violations. 
(b) RULES OF CONSTRUCTION.—No provision of this 
section shall be construed as limiting— 
(1) the application of any State law, or the 
availability of remedies under such law, against a 
creditor for a particular residential mortgage loan 
regardless of whether such creditor also acts as an 
assignee, securitizer, or securitization vehicle for 
such loan; 
(2) the application of any State law, or the 
availability of remedies under such law, against an 
assignee, securitizer, or securitization vehicle under 
State law, other than a provision of such law the 
terms of which address the specific subject matter of 
subsection (a) (determination of ability to repay) or
(b) (requirement of a net tangible benefit) of section 
129C of such Act; 
(3)(A) the application of any State law, or the 
availability of remedies under such law, against an 
assignee, securitizer or securitization vehicle for its 
participation in or direction of the credit or under-
writing decisions of a creditor relating to the making 
of a residential mortgage loan; or 
(B) the ability of a consumer to assert any 
rights against or obtain any remedies from an as-
signee, securitizer or securitization vehicle with re-
spect to a residential mortgage loan as a defense to 
foreclosure under section 129C(g); 
(4) the availability of any equitable remedies, 
including injunctive relief, under State law; or 
(5) notwithstanding paragraph (2), the avail-
ability of any remedies under State law against any 
assignee, securitizer or securitization vehicle that— 
(A) are in addition to those remedies pro-
vided for in section 129C; and 
(B) were in effect on the date of enactment 
of this Act. 
SEC. 209. REGULATIONS. 
Regulations required or authorized to be prescribed 
under this title or the amendments made by this title—
(1) shall be prescribed in final form before the 
end of the 12-month period beginning on the date of 
the enactment of this Act; and 
(2) shall take effect not later than 18 months 
after the date of the enactment of this Act. 
SEC. 210. AMENDMENTS TO CIVIL LIABILITY PROVISIONS. 
(a) INCREASE IN AMOUNT OF CIVIL MONEY PEN-
ALTIES FOR CERTAIN VIOLATIONS.—Section 130(a)(2) of 
the Truth in Lending Act (15 U.S.C. 1640(a)(2)) is 
amended— 
(1) by striking ‘‘$100’’ and inserting ‘‘$200’’; 
(2) 
by 
striking 
‘‘$1,000’’ 
and 
inserting 
‘‘$2,000’’; and 
(3) by striking ‘‘$500,000’’ and inserting 
‘‘$1,000,000’’. 
(b) STATUTE OF LIMITATIONS EXTENDED FOR SEC-
TION 129 VIOLATIONS.—Section 130(e) of the Truth in 
Lending Act (15 U.S.C. 1640(e)) is amended— 
(1) in the first sentence, by striking ‘‘Any ac-
tion’’ and inserting ‘‘Except as provided in the sub-
sequent sentence, any action’’; and 
(2) by inserting after the first sentence the fol-
lowing new sentence: ‘‘Any action under this section 
with respect to any violation of section 129 may be 
brought in any United States district court, or in
any other court of competent jurisdiction, before the 
end of the 3-year period beginning on the date of the 
occurrence of the violation.’’. 
SEC. 211. LENDER RIGHTS IN THE CONTEXT OF BORROWER 
DECEPTION. 
Section 130 of the Truth in Lending Act is amended 
by adding at the end the following new subsection: 
‘‘(k) EXEMPTION FROM LIABILITY AND RESCISSION 
IN CASE OF BORROWER FRAUD OR DECEPTION.—In ad-
dition to any other remedy available by law or contract, 
no creditor, assignee, or securitizer shall be liable to an 
obligor under this section, nor shall it be subject to the 
right of rescission of any obligor under 129B, if such obli-
gor, or co-obligor, knowingly, or willfully and with actual 
knowledge furnished material information known to be 
false for the purpose of obtaining such residential mort-
gage loan.’’. 
SEC. 212. SIX-MONTH NOTICE REQUIRED BEFORE RESET OF 
HYBRID ADJUSTABLE RATE MORTGAGES. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by inserting 
after section 128 the following new section: 
‘‘§ 128A. Reset of hybrid adjustable rate mortgages 
‘‘(a) HYBRID ADJUSTABLE RATE MORTGAGES DE-
FINED.—For purposes of this section, the term ‘hybrid ad-
justable rate mortgage’ means a consumer credit trans-
action secured by the consumer’s principal residence with 
a fixed interest rate for an introductory period that ad-
justs or resets to a variable interest rate after such period. 
‘‘(b) NOTICE OF RESET AND ALTERNATIVES.—Dur-
ing the 1-month period that ends 6 months before the date 
on which the interest rate in effect during the introductory 
period of a hybrid adjustable rate mortgage adjusts or 
resets to a variable interest rate or, in the case of such 
an adjustment or resetting that occurs within the first 6 
months after consummation of such loan, at consumma-
tion, the creditor or servicer of such loan shall provide a 
written notice, separate and distinct from all other cor-
respondence to the consumer, that includes the following: 
‘‘(1) Any index or formula used in making ad-
justments to or resetting the interest rate and a 
source of information about the index or formula. 
‘‘(2) An explanation of how the new interest 
rate and payment would be determined, including an 
explanation of how the index was adjusted, such as 
by the addition of a margin. 
‘‘(3) A good faith estimate, based on accepted 
industry standards, of the creditor or servicer of the 
amount of the monthly payment that will apply after
the date of the adjustment or reset, and the assump-
tions on which this estimate is based. 
‘‘(4) A list of alternatives consumers may pur-
sue before the date of adjustment or reset, and de-
scriptions of the actions consumers must take to 
pursue these alternatives, including— 
‘‘(A) refinancing; 
‘‘(B) renegotiation of loan terms; 
‘‘(C) payment forbearances; and 
‘‘(D) pre-foreclosure sales. 
‘‘(5) The names, addresses, telephone numbers, 
and Internet addresses of counseling agencies or 
programs reasonably available to the consumer that 
have been certified or approved and made publicly 
available by the Secretary of Housing and Urban 
Development or a State housing finance authority 
(as defined in section 1301 of the Financial Institu-
tions Reform, Recovery, and Enforcement Act of 
1989). 
‘‘(6) The address, telephone number, and Inter-
net address for the State housing finance authority 
(as so defined) for the State in which the consumer 
resides.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 2 of the Truth in Lending Act is amended
by inserting after the item relating to section 128 the fol-
lowing new item: 
‘‘128A. Reset of hybrid adjustable rate mortgages.’’. 
SEC. 213. CREDIT RISK RETENTION. 
Section 129C of the Truth in Lending Act is amend-
ed by inserting after subsection (k) (as added by section 
206) the following new subsection: 
‘‘(l) CREDIT RISK RETENTION.— 
‘‘(1) IN GENERAL.—The Federal banking agen-
cies shall prescribe regulations jointly to require any 
creditor that makes a residential mortgage loan that 
is not a qualified mortgage (as defined under section 
129C(c)(2)(A)), to retain an economic interest in a 
material portion of the credit risk for any such loan 
that the creditor transfers, sells or conveys to a 
third party. 
‘‘(2) STANDARDS FOR REGULATIONS.—Regula-
tions prescribed under paragraph (1) shall— 
‘‘(A) apply only to residential mortgage 
loans that are not qualified mortgages (as so 
defined); 
‘‘(B) prohibit a creditor from directly or 
indirectly hedging or otherwise transferring the 
credit risk such creditor is required to retain 
under the regulations with respect to any resi-
dential mortgage loan;
‘‘(C) require a creditor to retain at least 5 
percent of the credit risk on any non-qualified 
mortgage that is transferred, sold or conveyed 
by such creditor; and 
‘‘(D) specify the permissible forms of the 
required risk retention (for example, first loss 
position or pro rata vertical slice) and the min-
imum duration of the required risk retention. 
‘‘(3) EXCEPTIONS AND ADJUSTMENTS.— 
‘‘(A) IN GENERAL.—The Federal banking 
agencies shall have authority to jointly provide 
exceptions or adjustments to the requirements 
of this subsection, including exceptions or ad-
justments relating to the 5 percent risk reten-
tion threshold and the hedging prohibition. 
‘‘(B) APPLICABLE
STANDARDS.—Any ex-
ceptions or adjustments granted by the Federal 
banking agencies shall— 
‘‘(i) be consistent with the purpose of 
this subsection to help ensure high quality 
underwriting standards for creditors that 
make residential mortgage loans that are 
not qualified mortgages; and 
‘‘(ii) facilitate appropriate risk man-
agement practices by such creditors, im-
prove access of consumers to mortgage 
credit on reasonable terms, or otherwise 
serve the public interest. 
‘‘(4) ALTERNATIVE
RISK
RETENTION
FOR 
SECURITIZERS.—The Federal banking agencies may 
jointly, in their discretion, apply the risk retention 
requirements of this subsection to securitizers of res-
idential mortgages (or particular types of residential 
mortgages) that are not qualified mortgages in addi-
tion to or in substitution for any or all of the re-
quirements that apply to creditors that make such 
mortgages if the agencies jointly determine that ap-
plying the requirements to such securitizers would— 
‘‘(A) be consistent with the purpose of this 
subsection to help ensure high quality under-
writing standards for creditors of residential 
mortgage loans that are not qualified mort-
gages; and 
‘‘(B) facilitate appropriate risk manage-
ment practices by such creditors, improve ac-
cess of consumers to mortgage credit on reason-
able terms, or otherwise serve the public inter-
est. 
‘‘(m) Section 129C and any regulations promulgated 
thereunder do not apply to an extension of credit relating
to a plan described in section 101(53D) of title 11, United 
States Code.’’. 
SEC. 214. REQUIRED DISCLOSURES. 
Section 128(a) of Truth in Lending Act (15 U.S.C. 
1638(a)) is amended by adding at the end the following 
new paragraphs: 
‘‘(16) In the case of a variable rate residential 
mortgage loan for which an escrow or impound ac-
count will be established for the payment of all ap-
plicable taxes, insurance, and assessments— 
‘‘(A) the amount of initial monthly pay-
ment due under the loan for the payment of 
principal and interest, and the amount of such 
initial monthly payment including the monthly 
payment deposited in the account for the pay-
ment of all applicable taxes, insurance, and as-
sessments; and 
‘‘(B) the amount of the fully indexed 
monthly payment due under the loan for the 
payment of principal and interest, and the 
amount of such fully indexed monthly payment 
including the monthly payment deposited in the 
account for the payment of all applicable taxes, 
insurance, and assessments.
‘‘(17) In the case of a residential mortgage 
loan, the aggregate amount of settlement charges for 
all settlement services provided in connection with 
the loan, the amount of charges that are included in 
the loan and the amount of such charges the bor-
rower must pay at closing, the approximate amount 
of the wholesale rate of funds in connection with the 
loan, and the aggregate amount of other fees or re-
quired payments in connection with the loan. 
‘‘(18) In the case of a residential mortgage 
loan, the aggregate amount of fees paid to the mort-
gage originator in connection with the loan, the 
amount of such fees paid directly by the consumer, 
and any additional amount received by the originator 
from the creditor. 
‘‘(19) In the case of a residential mortgage 
loan, the total amount of interest that the consumer 
will pay over the life of the loan as a percentage of 
the principal of the loan. Such amount shall be com-
puted assuming the consumer makes each monthly 
payment in full and on-time, and does not make any 
over-payments.’’.
SEC. 215. DISCLOSURES REQUIRED IN MONTHLY STATE-
MENTS 
FOR 
RESIDENTIAL 
MORTGAGE 
LOANS. 
Section 128 of the Truth in Lending Act (15 U.S.C. 
1638) is amended by adding at the end the following new 
subsection: 
‘‘(f) PERIODIC
STATEMENTS
FOR
RESIDENTIAL 
MORTGAGE LOANS.— 
‘‘(1) IN GENERAL.—The creditor, assignee, or 
servicer with respect to any residential mortgage 
loan shall transmit to the obligor, for each billing 
cycle, a statement setting forth each of the following 
items, to the extent applicable, in a conspicuous and 
prominent manner: 
‘‘(A) The amount of the principal obliga-
tion under the mortgage. 
‘‘(B) The current interest rate in effect for 
the loan. 
‘‘(C) The date on which the interest rate 
may next reset or adjust. 
‘‘(D) The amount of any prepayment fee 
to be charged, if any. 
‘‘(E) A description of any late payment 
fees.
‘‘(F) A telephone number and electronic 
mail address that may be used by the obligor to 
obtain information regarding the mortgage. 
‘‘(G) The names, addresses, telephone 
numbers, and Internet addresses of counseling 
agencies or programs reasonably available to 
the consumer that have been certified or ap-
proved and made publicly available by the Sec-
retary of Housing and Urban Development or a 
State housing finance authority (as defined in 
section 1301 of the Financial Institutions Re-
form, Recovery, and Enforcement Act of 1989). 
‘‘(H) Such other information as the Board 
may prescribe in regulations. 
‘‘(2) DEVELOPMENT AND USE OF STANDARD 
FORM.—The Federal banking agencies shall jointly 
develop and prescribe a standard form for the disclo-
sure required under this subsection, taking into ac-
count that the statements required may be trans-
mitted in writing or electronically.’’. 
SEC. 216. LEGAL ASSISTANCE FOR FORECLOSURE-RELATED 
ISSUES. 
(a) ESTABLISHMENT.—The Secretary of Housing 
and Urban Development (hereafter in this section referred 
to as the ‘‘Secretary’’ shall establish a program for making
grants for providing a full range of foreclosure legal assist-
ance to low- and moderate-income homeowners and ten-
ants related to home ownership preservation, home fore-
closure prevention, and tenancy associated with home fore-
closure. 
(b) COMPETITIVE ALLOCATION.—The Secretary shall 
allocate amounts made available for grants under this sec-
tion to State and local legal organizations on the basis 
of a competitive process. For purposes of this subsection 
‘‘State and local legal organizations’’ are those State and 
local organizations whose primary business or mission is 
to provide legal assistance. 
(c) PRIORITY
TO CERTAIN AREAS.—In allocating 
amounts in accordance with subsection (b), the Secretary 
shall give priority consideration to State and local legal 
organizations that are operating in the 100 metropolitan 
statistical areas (as that term is defined by the Director 
of the Office of Management and Budget) with the highest 
home foreclosure rates. 
(d) LEGAL ASSISTANCE.— 
(1) IN GENERAL.—Any State or local legal or-
ganization that receives financial assistance pursu-
ant to this section may use such amounts only to as-
sist—
(A) homeowners of owner-occupied homes 
with mortgages in default, in danger of default, 
or subject to or at risk of foreclosure; and 
(B) tenants at risk of or subject to eviction 
as a result of foreclosure of the property in 
which such tenant resides. 
(2) COMMENCE
USE
WITHIN
DAYS.—Any 
State or local legal organization that receives finan-
cial assistance pursuant to this section shall begin 
using any financial assistance received under this 
section within 90 days after receipt of the assist-
ance. 
(3) PROHIBITION
ON
CLASS
ACTIONS.—No 
funds provided to a State or local legal organization 
under this section may be used to support any class 
action litigation. 
(4) LIMITATION ON LEGAL ASSISTANCE.—Legal 
assistance funded with amounts provided under this 
section shall be limited to mortgage-related default, 
eviction, or foreclosure proceedings, without regard 
to whether such foreclosure is judicial or nonjudicial. 
(5) EFFECTIVE
DATE.—Notwithstanding sec-
tion 217, this subsection shall take effect on the 
date of the enactment of this Act.
(e) LIMITATION
ON
DISTRIBUTION
OF
ASSIST-
ANCE.— 
(1) IN GENERAL.—None of the amounts made 
available under this section shall be distributed to— 
(A) any organization which has been con-
victed for a violation under Federal law relating 
to an election for Federal office; or 
(B) any organization which employs appli-
cable individuals. 
(2) DEFINITION
OF
APPLICABLE
INDIVID-
UALS.—In this subsection, the term ‘‘applicable indi-
vidual’’ means an individual who— 
(A) is— 
(i) employed by the organization in a 
permanent or temporary capacity; 
(ii) contracted or retained by the or-
ganization; or 
(iii) acting on behalf of, or with the 
express or apparent authority of, the orga-
nization; and 
(B) has been convicted for a violation 
under Federal law relating to an election for 
Federal office. 
(f) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary
$35,000,000 for each of fiscal years 2009 through 2012 
for grants under this section. 
SEC. 217. EFFECTIVE DATE. 
The amendments made by this title shall apply to 
transactions consummated on or after the effective date 
of the regulations specified in section 209. 
SEC. 218. REPORT BY THE GAO. 
(a) REPORT REQUIRED.—The Comptroller General 
shall conduct a study to determine the effects the enact-
ment of this Act will have on the availability and afford-
ability of credit for consumers, small businesses, home-
buyers, and mortgage lending, including the effect— 
(1) on the mortgage market for mortgages that 
are not within the safe harbor provided in the 
amendments made by this title; 
(2) on the ability of prospective homebuyers to 
obtain financing; 
(3) on the ability of homeowners facing resets 
or adjustments to refinance—for example, do they 
have fewer refinancing options due to the unavail-
ability of certain loan products that were available 
before the enactment of this Act; 
(4) on minorities’ ability to access affordable 
credit compared with other prospective borrowers; 
(5) on home sales and construction;
(6) of extending the rescission right, if any, on 
adjustable rate loans and its impact on litigation; 
(7) of State foreclosure laws and, if any, an in-
vestor’s ability to transfer a property after fore-
closure; 
(8) of expanding the existing provisions of the 
Home Ownership and Equity Protection Act of 
1994; 
(9) of prohibiting prepayment penalties on 
high-cost mortgages; and 
(10) of establishing counseling services under 
the Department of Housing and Urban Development 
and offered through the Office of Housing Coun-
seling. 
(b) REPORT.—Before the end of the 1-year period be-
ginning on the date of the enactment of this Act, the 
Comptroller General shall submit a report to the Congress 
containing the findings and conclusions of the Comptroller 
General with respect to the study conducted pursuant to 
subsection (a). 
(c) EXAMINATION RELATED TO CERTAIN CREDIT 
RISK RETENTION PROVISIONS.—The report required by 
subsection (b) shall also include an analysis by the Comp-
troller General of the effect on the capital reserves and 
funding of lenders of credit risk retention provisions for
non-qualified mortgages, including an analysis of the ex-
ceptions 
and 
adjustments 
authorized 
in 
section 
129C(l)(3)(A) of the Truth in Lending Act and a rec-
ommendation on whether a uniform standard is needed. 
(d) ANALYSIS OF CREDIT RISK RETENTION PROVI-
SIONS.—The report required by subsection (b) shall also 
include— 
(1) an analysis by the Comptroller General of 
whether the credit risk retention provisions have sig-
nificantly reduced risks to the larger credit market 
of the repackaging and selling of securitized loans on 
a secondary market; and 
(2) recommendations to the Congress on adjust-
ments that should be made, or additional measures 
that should be undertaken. 
SEC. 219. STATE ATTORNEY GENERAL ENFORCEMENT AU-
THORITY. 
Section 130(e) of the Truth in Lending Act (15 
U.S.C. 1640(e)) is amended by striking ‘‘section 129 may 
also’’ and inserting ‘‘section 129, 129B, or 129C of this 
Act, section 220 of the Mortgage Reform and Anti-Preda-
tory Lending Act, or any amendment made by section 220 
of the Mortgage Reform and Anti-Predatory Lending Act 
may also’’.
SEC. 220. TENANT PROTECTION. 
(a) TENANT PROTECTION GENERALLY.— 
(1) IN
GENERAL.—In the case of any fore-
closure on any dwelling or residential real property, 
after the date of the enactment of the Mortgage Re-
form and Anti-Predatory Lending Act, the imme-
diate successor in interest in such property pursuant 
to the foreclosure shall assume such interest subject 
to— 
(A) except as provided in paragraph (2), 
the rights of any bona fide tenant, as of the 
date of foreclosure under any bona fide lease 
entered into before the date of foreclosure, to 
occupy the premises until the end of the re-
maining term of the lease; and 
(B) the rights of any bona fide tenant, as 
of the date of foreclosure, without a lease or 
with a lease terminable at will under State law, 
subject to the provision by the immediate suc-
cessor in interest and the receipt by the tenant 
in the unit, of a notice to vacate at least 90 
days before the effective date of such notice. 
(2) EXCEPTION FOR SUBSEQUENT OWNER-OC-
CUPANT.—Notwithstanding paragraph (1), if the im-
mediate successor in interest of any dwelling or resi-
dential real property that is otherwise subject to
paragraph (1) is a purchaser who will occupy a unit 
of the dwelling or residential real property as a pri-
mary residence, or such successor in interest sells 
the dwelling or residential real property to a pur-
chaser who will occupy a unit of the dwelling or resi-
dential real property, as a primary residence— 
(A) such purchaser may terminate a lease 
relating to such unit on the effective date of a 
notice to vacate; and 
(B)(i) such notice to vacate shall be pro-
vided by the purchaser to the tenant in such 
unit at least 90 days before the effective date 
of such notice; and (ii) with respect to a single- 
family residence for which the borrower rented 
the unit in violation of the mortgage contract, 
such notice to vacate shall be provided by the 
purchaser to the tenant in such unit at least 30 
days before the effective date of such notice, 
and shall include a copy of the mortgage con-
tract prohibiting the rental of the unit. 
(3) BONA FIDE LEASE OR TENANCY.—For pur-
poses of this subsection, a lease or tenancy shall be 
considered bona fide only if— 
(A) the mortgagor under the contract is 
not the tenant;
(B) the lease or tenancy was the result of 
an arms-length transaction; and 
(C) the lease or tenancy requires the re-
ceipt of rent that is not substantially less than 
fair market rent for the property or the unit’s 
rent is reduced or subsidized due to a Federal, 
State, or local subsidy. 
(4) RULE OF CONSTRUCTION.—Except for the 
specific provisions of this subsection, no provision of 
this subsection shall be construed as affecting the 
requirements for termination of any Federal- or 
State-subsidized tenancy. The provisions of this sub-
section shall not be construed to limit any State or 
local law that provides longer time periods or other 
additional protections for tenants. 
(b) CORRESPONDING PROVISION RELATING TO EF-
FECT OF FORECLOSURES ON SECTION 8 TENANCIES.— 
Paragraph (7) of section 8(o) of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437f(o)(7)) is amended— 
(1) in subparagraph (C), by inserting before the 
semicolon at the end the following: ‘‘, and in the 
case of an owner who is an immediate successor in 
interest pursuant to foreclosure— 
‘‘(i) during the initial term of the ten-
ant’s lease, having the property vacant
prior to sale shall not constitute good 
cause; and 
‘‘(ii) in subsequent lease terms of the 
tenant’s lease, who will occupy the unit as 
a primary residence, who sells the property 
to a purchaser who will occupy a unit of 
the property as a primary residence, or if 
the unit is unmarketable while occupied, 
such owner may terminate a lease relating 
to such unit for good cause on the effective 
date of the notice to vacate, where such 
notice is provided by the owner to the ten-
ant in such unit at least 90 days before the 
effective date of such notice;’’. 
(2) in subparagraph (E), by striking ‘‘and’’ at 
the end; 
(3) by redesignating subparagraph (F) as sub-
paragraph (G); and 
(4) by inserting after subparagraph (E) the fol-
lowing: 
‘‘(F) shall provide that in the case of any 
foreclosure on any residential real property in 
which a recipient of assistance under this sub-
section resides, the immediate successor in in-
terest in such property pursuant to the fore-
closure shall assume such interest subject to the 
lease between the prior owner and the tenant 
and to the housing assistance payments con-
tract between the prior owner and the public 
housing agency for the occupied unit; if a public 
housing agency is unable to make payments 
under the contract to the immediate successor 
in interest after foreclosure, due to action or in-
action by the successor in interest, including 
the rejection of payments or the failure of the 
successor to maintain the unit in compliance 
with paragraph (8) or an inability to identify 
the successor, the agency may use funds that 
would have been used to pay the rental amount 
on behalf of the family— 
‘‘(i) to pay for utilities that are the 
responsibility of the owner under the lease 
or applicable law, after taking reasonable 
steps to notify the owner that it intends to 
make payments to a utility provider in lieu 
of payments to the owner, except prior no-
tification shall not be required in any case 
in which the unit will be or has been ren-
dered uninhabitable due to the termination 
or threat of termination of service, in
which case the public housing agency shall 
notify the owner within a reasonable time 
after making such payment; or 
‘‘(ii) for the family’s reasonable mov-
ing costs, including security deposit costs; 
except that this subparagraph and the provi-
sions related to foreclosure in subparagraph (C) 
shall not affect any State or local law that pro-
vides longer time periods or other additional 
protections for tenants.’’. 
(c) LANDLORD NOTICE
TO TENANTS.—Notwith-
standing the law of any State or the terms of any con-
sumer residential lease, each person who owns a dwelling 
or residential real property— 
(1) which is leased to a bona fide tenant (in-
cluding a tenancy terminable at will), or which the 
landlord offers to lease to a prospective tenant; and 
(2) which, pursuant to the terms of a valid loan 
to such person which is secured by such dwelling or 
property, is or becomes subject to foreclosure or with 
respect to which the person is in default, 
shall promptly notify any such tenant or prospective ten-
ant of the circumstances prevailing with respect to such 
property and the effect of any such default or foreclosure. 
The requirements of this subsection shall have no effect
on any State or local law that provides additional notice 
or other additional protections for tenants. 
(d) EFFECTIVE
DATE.—Notwithstanding section 
217, this section and the amendments made by this sec-
tion shall take effect on the date of the enactment of this 
Act. 
TITLE III—HIGH-COST 
MORTGAGES 
SEC. 301. DEFINITIONS RELATING TO HIGH-COST MORT-
GAGES. 
(a) 
HIGH-COST
MORTGAGE
DEFINED.—Section 
103(aa) of the Truth in Lending Act (15 U.S.C. 
1602(aa)) is amended by striking all that precedes para-
graph (2) and inserting the following: 
‘‘(aa) HIGH-COST MORTGAGE.— 
‘‘(1) DEFINITION.— 
‘‘(A) IN
GENERAL.—The term ‘high-cost 
mortgage’, and a mortgage referred to in this 
subsection, means a consumer credit trans-
action that is secured by the consumer’s prin-
cipal dwelling, other than a reverse mortgage 
transaction, if— 
‘‘(i) in the case of a credit transaction 
secured—
‘‘(I) by a first mortgage on the 
consumer’s principal dwelling, the an-
nual percentage rate at consummation 
of the transaction will exceed by more 
than 6.5 percentage points (8.5 per-
centage points, if the dwelling is per-
sonal property and the transaction is 
for less than $50,000) the average 
prime offer rate, as defined in section 
129C(c)(2)(B), 
for 
a 
comparable 
transaction; or 
‘‘(II) by a subordinate or junior 
mortgage on the consumer’s principal 
dwelling, the annual percentage rate 
at consummation of the transaction 
will exceed by more than 8.5 percent-
age points the average prime offer 
rate, 
as 
defined 
in 
section 
129C(c)(2)(B), 
for 
a 
comparable 
transaction; 
‘‘(ii) the total points and fees payable 
in connection with the transaction ex-
ceed—
‘‘(I) in the case of a transaction 
for $20,000 or more, 5 percent of the 
total transaction amount; or 
‘‘(II) in the case of a transaction 
for less than $20,000, the lesser of 8 
percent 
of 
the 
total 
transaction 
amount or $1,000 (or such other dol-
lar amount as the Board shall pre-
scribe by regulation); or 
‘‘(iii) the credit transaction documents 
permit the creditor to charge or collect pre-
payment fees or penalties more than 36 
months after the transaction closing or 
such fees or penalties exceed, in the aggre-
gate, more than 2 percent of the amount 
prepaid. 
‘‘(B) INTRODUCTORY RATES TAKEN INTO 
ACCOUNT.—For 
purposes 
of 
subparagraph 
(A)(i), the annual percentage rate of interest 
shall be determined based on the following in-
terest rate: 
‘‘(i) In the case of a fixed-rate trans-
action in which the annual percentage rate 
will not vary during the term of the loan,
the interest rate in effect on the date of 
consummation of the transaction. 
‘‘(ii) In the case of a transaction in 
which the rate of interest varies solely in 
accordance with an index, the interest rate 
determined by adding the index rate in ef-
fect on the date of consummation of the 
transaction to the maximum margin per-
mitted at any time during the transaction 
agreement. 
‘‘(iii) In the case of any other trans-
action in which the rate may vary at any 
time during the term of the loan for any 
reason, the interest charged on the trans-
action at the maximum rate that may be 
charged during the term of the trans-
action.’’. 
(b) ADJUSTMENT OF PERCENTAGE POINTS.—Section 
103(aa)(2) of the Truth in Lending Act (15 U.S.C. 
1602(aa)(2)) is amended by striking subparagraph (B) 
and inserting the following new subparagraph: 
‘‘(B) An increase or decrease under sub-
paragraph (A)— 
‘‘(i) may not result in the number of 
percentage points referred to in paragraph
(1)(A)(i)(I) being less than 6 percentage 
points or greater than 10 percentage 
points; and 
‘‘(ii) may not result in the number of 
percentage points referred to in paragraph 
(1)(A)(i)(II) being less than 8 percentage 
points or greater than 12 percentage 
points.’’. 
(c) POINTS AND FEES DEFINED.— 
(1) IN
GENERAL.—Section 103(aa)(4) of the 
Truth in Lending Act (15 U.S.C. 1602(aa)(4)) is 
amended— 
(A) by striking subparagraph (B) and in-
serting the following: 
‘‘(B) all compensation paid directly or indi-
rectly by a consumer or creditor to a mortgage 
originator from any source, including a mort-
gage originator that originates a loan in the 
name of the creditor in a table-funded trans-
action;’’; 
(B) in subparagraph (C)(ii), by inserting 
‘‘except where applied to the charges set forth 
in section 106(e)(1) where a creditor may re-
ceive indirect compensation solely as a result of 
obtaining distributions of profits from an affili-
ated entity based on its ownership interest in 
compliance with section 8(c)(4) of the Real Es-
tate Settlement Procedures Act of 1974’’ before 
the semicolon at the end; 
(C) in subparagraph (C)(iii), by striking ‘‘; 
and’’ and inserting ‘‘, except as provided for in 
clause (ii);’’; 
(D) by redesignating subparagraph (D) as 
subparagraph (G); and 
(E) by inserting after subparagraph (C) 
the following new subparagraphs: 
‘‘(D) premiums or other charges payable at 
or before closing for any credit life, credit dis-
ability, credit unemployment, or credit property 
insurance, or any other accident, loss-of-income, 
life or health insurance, or any payments di-
rectly or indirectly for any debt cancellation or 
suspension agreement or contract, except that 
insurance premiums or debt cancellation or sus-
pension fees calculated and paid in full on a 
monthly basis shall not be considered financed 
by the creditor; 
‘‘(E) except as provided in subsection (cc), 
the maximum prepayment fees and penalties
which may be charged or collected under the 
terms of the credit transaction; 
‘‘(F) all prepayment fees or penalties that 
are incurred by the consumer if the loan refi-
nances a previous loan made or currently held 
by the same creditor or an affiliate of the cred-
itor; and’’. 
(2) CALCULATION OF POINTS AND FEES FOR 
OPEN-END
CONSUMER
CREDIT
PLANS.—Section 
103(aa) of the Truth in Lending Act (15 U.S.C. 
1602(aa)) is amended— 
(A) by redesignating paragraph (5) as 
paragraph (6); and 
(B) by inserting after paragraph (4) the 
following new paragraph: 
‘‘(5) CALCULATION OF POINTS AND FEES FOR 
OPEN-END CONSUMER CREDIT PLANS.—In the case 
of open-end consumer credit plans, points and fees 
shall be calculated, for purposes of this section and 
section 129, by adding the total points and fees 
known at or before closing, including the maximum 
prepayment penalties which may be charged or col-
lected under the terms of the credit transaction, plus 
the minimum additional fees the consumer would be
required to pay to draw down an amount equal to 
the total credit line.’’. 
(d) BONA
FIDE
DISCOUNT
LOAN
DISCOUNT 
POINTS.—Section 103 of the Truth in Lending Act (15 
U.S.C. 1602) is amended by inserting after subsection (cc) 
(as added by section 101) the following new subsection: 
‘‘(dd) BONA FIDE DISCOUNT POINTS AND PREPAY-
MENT PENALTIES.—For the purposes of determining the 
amount of points and fees for purposes of subsection (aa), 
either the amounts described in paragraph (1) or (2) of 
the following paragraphs, but not both, shall be excluded: 
‘‘(1) Up to and including 2 bona fide discount 
points payable by the consumer in connection with 
the mortgage, but only if the interest rate from 
which the mortgage’s interest rate will be discounted 
does not exceed by more than 1 percentage point— 
‘‘(A) the required net yield for a 90-day 
standard mandatory delivery commitment for a 
reasonably comparable loan from either the 
Federal National Mortgage Association or the 
Federal Home Loan Mortgage Corporation, 
whichever is greater; or 
‘‘(B) if secured by a personal property 
loan, the average rate on a loan in connection 
with which insurance is provided under title I
of the National Housing Act (12 U.S.C. 1702 
et seq.). 
‘‘(2) Unless 2 bona fide discount points have 
been excluded under paragraph (1), up to and in-
cluding 1 bona fide discount point payable by the 
consumer in connection with the mortgage, but only 
if the interest rate from which the mortgage’s inter-
est rate will be discounted does not exceed by more 
than 2 percentage points— 
‘‘(A) the required net yield for a 90-day 
standard mandatory delivery commitment for a 
reasonably comparable loan from either the 
Federal National Mortgage Association or the 
Federal Home Loan Mortgage Corporation, 
whichever is greater; or 
‘‘(B) if secured by a personal property 
loan, the average rate on a loan in connection 
with which insurance is provided under title I 
of the National Housing Act (12 U.S.C. 1702 
et seq.). 
‘‘(3) For purposes of paragraph (1), the term 
‘bona fide discount points’ means loan discount 
points which are knowingly paid by the consumer for 
the purpose of reducing, and which in fact result in
a bona fide reduction of, the interest rate or time- 
price differential applicable to the mortgage. 
‘‘(4) Paragraphs (1) and (2) shall not apply to 
discount points used to purchase an interest rate re-
duction unless the amount of the interest rate reduc-
tion purchased is reasonably consistent with estab-
lished industry norms and practices for secondary 
mortgage market transactions.’’. 
SEC. 302. AMENDMENTS TO EXISTING REQUIREMENTS FOR 
CERTAIN MORTGAGES. 
(a) PREPAYMENT PENALTY PROVISIONS.—Section 
129(c)(2) of the Truth in Lending Act (15 U.S.C. 
1639(c)(2)) is hereby repealed. 
(b) NO BALLOON PAYMENTS.—Section 129(e) of the 
Truth in Lending Act (15 U.S.C. 1639(e)) is amended to 
read as follows: 
‘‘(e) NO BALLOON PAYMENTS.—No high-cost mort-
gage may contain a scheduled payment that is more than 
twice as large as the average of earlier scheduled pay-
ments. This subsection shall not apply when the payment 
schedule is adjusted to the seasonal or irregular income 
of the consumer.’’.
SEC. 303. ADDITIONAL REQUIREMENTS FOR CERTAIN 
MORTGAGES. 
(a) ADDITIONAL
REQUIREMENTS
FOR
CERTAIN 
MORTGAGES.—Section 129 of the Truth in Lending Act 
(15 U.S.C. 1639) is amended— 
(1) by redesignating subsections (j), (k) and (l) 
as subsections (n), (o) and (p) respectively; and 
(2) by inserting after subsection (i) the fol-
lowing new subsections: 
‘‘(j) RECOMMENDED DEFAULT.—No creditor shall 
recommend or encourage default on an existing loan or 
other debt prior to and in connection with the closing or 
planned closing of a high-cost mortgage that refinances 
all or any portion of such existing loan or debt. 
‘‘(k) LATE FEES.— 
‘‘(1) IN GENERAL.—No creditor may impose a 
late payment charge or fee in connection with a 
high-cost mortgage— 
‘‘(A) in an amount in excess of 4 percent 
of the amount of the payment past due; 
‘‘(B) unless the loan documents specifically 
authorize the charge or fee; 
‘‘(C) before the end of the 15-day period 
beginning on the date the payment is due, or in 
the case of a loan on which interest on each in-
stallment is paid in advance, before the end of
the 30-day period beginning on the date the 
payment is due; or 
‘‘(D) more than once with respect to a sin-
gle late payment. 
‘‘(2) COORDINATION WITH SUBSEQUENT LATE 
FEES.—If a payment is otherwise a full payment for 
the applicable period and is paid on its due date or 
within an applicable grace period, and the only delin-
quency or insufficiency of payment is attributable to 
any late fee or delinquency charge assessed on any 
earlier payment, no late fee or delinquency charge 
may be imposed on such payment. 
‘‘(3) FAILURE
TO
MAKE
INSTALLMENT
PAY-
MENT.—If, in the case of a loan agreement the 
terms of which provide that any payment shall first 
be applied to any past due principal balance, the 
consumer fails to make an installment payment and 
the consumer subsequently resumes making install-
ment payments but has not paid all past due install-
ments, the creditor may impose a separate late pay-
ment charge or fee for any principal due (without 
deduction due to late fees or related fees) until the 
default is cured. 
‘‘(l) ACCELERATION OF DEBT.—No high-cost mort-
gage may contain a provision which permits the creditor
to accelerate the indebtedness, except when repayment of 
the loan has been accelerated by default in payment, or 
pursuant to a due-on-sale provision, or pursuant to a ma-
terial violation of some other provision of the loan docu-
ment unrelated to payment schedule. 
‘‘(m) RESTRICTION
ON FINANCING POINTS
AND 
FEES.—No creditor may directly or indirectly finance, in 
connection with any high-cost mortgage, any of the fol-
lowing: 
‘‘(1) Any prepayment fee or penalty payable by 
the consumer in a refinancing transaction if the 
creditor or an affiliate of the creditor is the 
noteholder of the note being refinanced. 
‘‘(2) Any points or fees.’’. 
(b) PROHIBITIONS ON EVASIONS.—Section 129 of 
the Truth in Lending Act (15 U.S.C. 1639) is amended 
by inserting after subsection (p) (as so redesignated by 
subsection (a)(1)) the following new subsection: 
‘‘(q) PROHIBITIONS ON EVASIONS, STRUCTURING OF 
TRANSACTIONS, AND RECIPROCAL ARRANGEMENTS.—A 
creditor may not take any action in connection with a 
high-cost mortgage— 
‘‘(1) to structure a loan transaction as an open- 
end credit plan or another form of loan for the pur-
100 
pose and with the intent of evading the provisions of 
this title; or 
‘‘(2) to divide any loan transaction into sepa-
rate parts for the purpose and with the intent of 
evading provisions of this title.’’. 
(c) MODIFICATION
OR DEFERRAL FEES.—Section 
129 of the Truth in Lending Act (15 U.S.C. 1639) is 
amended by inserting after subsection (q) (as added by 
subsection (b) of this section) the following new sub-
section: 
‘‘(r) MODIFICATION AND DEFERRAL FEES PROHIB-
ITED.— 
‘‘(1) CREDITORS.—A creditor may not charge a 
consumer any fee to modify, renew, extend, or 
amend a high-cost mortgage, or to defer any pay-
ment due under the terms of such mortgage, unless 
the modification, renewal, extension or amendment 
results in a lower annual percentage rate on the 
mortgage for the consumer and then only if the 
amount of the fee is comparable to fees imposed for 
similar transactions in connection with consumer 
credit transactions that are secured by a consumer’s 
principal dwelling and are not high-cost mortgages. 
‘‘(2) THIRD PARTIES.—A third-party may not 
charge a consumer any fee to—
101 
‘‘(A) modify, renew, extend, or amend a 
high-cost mortgage, or defer any payment due 
under the terms of such mortgage; 
‘‘(B) negotiate with a creditor on behalf of 
a consumer, the modification, renewal, exten-
sion, or amendment of a high-cost mortgage; or 
‘‘(C) negotiate with a creditor on behalf of 
a consumer, the deferral of any payment due 
under the terms of such mortgage, 
unless the modification renewal, extension or amend-
ment results in a significantly lower annual percent-
age rate on the mortgage, or a significant reduction 
in the amount of the outstanding principal on the 
mortgage, for the consumer and then only if the 
amount of the fee is comparable to fees imposed for 
similar transactions in connection with consumer 
credit transactions that are secured by a consumer’s 
principal dwelling and are not high-cost mortgages. 
‘‘(3) ENFORCEMENT.—Section 130 shall be ap-
plied for purposes of paragraph (2) by— 
‘‘(A) 
substituting 
‘third 
party’ 
for 
‘creditor’each place such term appears; and 
‘‘(B) substituting ‘any fee charged by a 
third party’ for ‘finance charge’ each place such 
term appears.’’.
103 
payoff balances are available for free pursuant 
to subparagraph (A). 
‘‘(D) MULTIPLE REQUESTS.—If a creditor 
or servicer has provided payoff information re-
ferred to in subparagraph (A) without charge, 
other than the transaction fee allowed by sub-
paragraph (B), on 4 occasions during a cal-
endar year, the creditor or servicer may there-
after charge a reasonable fee for providing such 
information during the remainder of the cal-
endar year. 
‘‘(2) PROMPT DELIVERY.—Payoff balances shall 
be provided within 5 business days after receiving a 
request by a consumer or a person authorized by the 
consumer to obtain such information. 
‘‘(3) SERVICES
CONSIDERED
ASSIGNEE.—For 
the purposes of this subsection, a servicer shall be 
considered an assignee under the Truth in Lending 
Act.’’. 
(e) PRE-LOAN COUNSELING REQUIRED.—Section 
129 of the Truth in Lending Act (15 U.S.C. 1639) is 
amended by inserting after subsection (s) (as added by 
subsection (d) of this section) the following new sub-
section: 
‘‘(t) PRE-LOAN COUNSELING.—
104 
‘‘(1) IN GENERAL.—A creditor may not extend 
credit to a consumer under a high-cost mortgage 
without first receiving certification from a counselor 
that is approved by the Secretary of Housing and 
Urban Development, or at the discretion of the Sec-
retary, a State housing finance authority, that the 
consumer has received counseling on the advisability 
of the mortgage. Such counselor shall not be em-
ployed by the creditor or an affiliate of the creditor 
or be affiliated with the creditor. 
‘‘(2) DISCLOSURES REQUIRED PRIOR TO COUN-
SELING.—No counselor may certify that a consumer 
has received counseling on the advisability of the 
high-cost mortgage unless the counselor can verify 
that the consumer has received each statement re-
quired (in connection with such loan) by this section 
or the Real Estate Settlement Procedures Act of 
1974 with respect to the transaction. 
‘‘(3) REGULATIONS.—The Board may prescribe 
such regulations as the Board determines to be ap-
propriate to carry out the requirements of paragraph 
(1).’’. 
(f) FLIPPING PROHIBITED.—Section 129 of the 
Truth in Lending Act (15 U.S.C. 1639) is amended by
105 
inserting after subsection (t) (as added by subsection (e)) 
the following new subsection: 
‘‘(u) FLIPPING.— 
‘‘(1) IN GENERAL.—No creditor may knowingly 
or intentionally engage in the unfair act or practice 
of flipping in connection with a high-cost mortgage. 
‘‘(2) FLIPPING DEFINED.—For purposes of this 
subsection, the term ‘flipping’ means the making of 
a loan or extension of credit in the form a high-cost 
mortgage to a consumer which refinances an existing 
mortgage when the new loan or extension of credit 
does not have reasonable, net tangible benefit (as de-
termined in accordance with regulations prescribed 
under section 129C(b)) to the consumer considering 
all of the circumstances, including the terms of both 
the new and the refinanced loans or credit, the cost 
of the new loan or credit, and the consumer’s cir-
cumstances. 
‘‘(v) CORRECTIONS
AND UNINTENTIONAL VIOLA-
TIONS.—A creditor or assignee in a high cost loan who, 
when acting in good faith, fails to comply with any re-
quirement under this section will not be deemed to have 
violated such requirement if the creditor or assignee estab-
lishes that either—
106 
‘‘(1) within 30 days of the loan closing and 
prior to the institution of any action, the consumer 
is notified of or discovers the violation, appropriate 
restitution is made, and whatever adjustments are 
necessary are made to the loan to either, at the 
choice of the consumer— 
‘‘(A) make the loan satisfy the require-
ments of this chapter; or 
‘‘(B) in the case of a high-cost mortgage, 
change the terms of the loan in a manner bene-
ficial to the consumer so that the loan will no 
longer be a high-cost mortgage; or 
‘‘(2) within 60 days of the creditor’s discovery 
or receipt of notification of an unintentional viola-
tion or bona fide error as described in subsection (c) 
and prior to the institution of any action, the con-
sumer is notified of the compliance failure, appro-
priate restitution is made, and whatever adjustments 
are necessary are made to the loan to either, at the 
choice of the consumer— 
‘‘(A) make the loan satisfy the require-
ments of this chapter; or 
‘‘(B) in the case of a high-cost mortgage, 
change the terms of the loan in a manner bene-
107 
ficial so that the loan will no longer be a high- 
cost mortgage.’’. 
SEC. 304. REGULATIONS. 
(a) IN GENERAL.—The Board of Governors of the 
Federal Reserve System shall publish regulations imple-
menting this title and the amendments made by this title 
in final form before the end of the 6-month period begin-
ning on the date of the enactment of this Act. 
(b) CONSUMER MORTGAGE EDUCATION.— 
(1) REGULATIONS.—The Board of Governors of 
the Federal Reserve System may prescribe regula-
tions requiring or encouraging creditors to provide 
consumer mortgage education to prospective cus-
tomers or direct such customers to qualified con-
sumer mortgage education or counseling programs 
in the vicinity of the residence of the consumer. 
(2) COORDINATION WITH STATE LAW.—No re-
quirement established by the Board of Governors of 
the Federal Reserve System pursuant to paragraph 
(1) shall be construed as affecting or superseding 
any requirement under the law of any State with re-
spect to consumer mortgage counseling or education. 
SEC. 305. EFFECTIVE DATE. 
The amendments made by this title shall take effect 
at the end of the 6-month period beginning on the date
108 
of the enactment of this Act and shall apply to mortgages 
referred to in section 103(aa) of the Truth in Lending 
Act (15 U.S.C. 1602(aa)) for which an application is re-
ceived by the creditor after the end of such period. 
TITLE IV—OFFICE OF HOUSING 
COUNSELING 
SEC. 401. SHORT TITLE. 
This title may be cited as the ‘‘Expand and Preserve 
Home Ownership Through Counseling Act’’. 
SEC. 402. 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 Department, the Office of Housing Coun-
seling. 
‘‘(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, and shall report to, 
the Secretary. Such position shall be a career-re-
served position in the Senior Executive Service. 
‘‘(3) FUNCTIONS.—
110 
other provisions of law. Such functions shall in-
clude establishing rules necessary for— 
‘‘(i) the counseling procedures under 
section 106(g)(1) of the Housing and 
Urban Development Act of 1968 (12 
U.S.C. 1701x(h)(1)); 
‘‘(ii) carrying out all other functions 
of the Secretary under section 106(g) of 
the Housing and Urban Development Act 
of 1968, including the establishment, oper-
ation, and publication of the availability of 
the toll-free telephone number under para-
graph (2) of such section; 
‘‘(iii) contributing to the preparation 
and distribution of home buying informa-
tion booklets pursuant to section 5 of the 
Real Estate Settlement Procedures Act of 
1974 (12 U.S.C. 2604); 
‘‘(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,
111 
including criteria for selection of applica-
tions to receive assistance; 
‘‘(vi) carrying out any functions re-
garding abusive, deceptive, or unscrupulous 
lending practices relating to residential 
mortgage loans that the Secretary con-
siders appropriate, which shall include con-
ducting the study under section 6 of the 
Expand and Preserve Home Ownership 
Through Counseling Act; 
‘‘(vii) providing for operation of the 
advisory committee established under para-
graph (4) of this subsection; 
‘‘(viii) collaborating with community- 
based organizations with expertise in the 
field of housing counseling; and 
‘‘(ix) providing for the building of ca-
pacity to provide housing counseling serv-
ices in areas that lack sufficient services, 
including underdeveloped areas that lack 
basic water and sewer systems, electricity 
services, and safe, sanitary housing. 
‘‘(4) ADVISORY COMMITTEE.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
appoint an advisory committee to provide advice
112 
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 the mortgage and real estate 
industry, including consumers and housing 
counseling agencies certified by the Secretary. 
‘‘(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
113 
under subchapter I of chapter 57 of title 5, 
United States Code. 
‘‘(F) ADVISORY
ROLE
ONLY.—The advi-
sory committee shall have no role in reviewing 
or awarding housing counseling grants. 
‘‘(5) 
SCOPE
OF
HOMEOWNERSHIP
COUN-
SELING.—In carrying out the responsibilities of the 
Director, the Director shall ensure that homeowner-
ship counseling provided by, in connection with, or 
pursuant to any function, activity, or program of the 
Department addresses the entire process of home-
ownership, including the decision to purchase a 
home, the selection and purchase of a home, issues 
arising during or affecting the period of ownership 
of a home (including refinancing, default and fore-
closure, and other financial decisions), and the sale 
or other disposition of a home.’’. 
SEC. 403. 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.—
114 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish, coordinate, and monitor the adminis-
tration by the Department of Housing and 
Urban Development of the counseling proce-
dures for homeownership counseling and rental 
housing counseling provided in connection with 
any program of the Department, including all 
requirements, 
standards, 
and 
performance 
measures that relate to homeownership and 
rental housing counseling. 
‘‘(B) HOMEOWNERSHIP
COUNSELING.— 
For purposes of this subsection and as used in 
the provisions referred to in this subparagraph, 
the term ‘homeownership counseling’ means 
counseling related to homeownership and resi-
dential mortgage loans. Such term includes 
counseling related to homeownership and resi-
dential mortgage loans that is provided pursu-
ant to— 
‘‘(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—
115 
‘‘(I) section 9(e) (42 U.S.C. 
1437g(e)); 
‘‘(II) 
section 
8(y)(1)(D) 
(42 
U.S.C. 1437f(y)(1)(D)); 
‘‘(III) section 18(a)(4)(D) (42 
U.S.C. 1437p(a)(4)(D)); 
‘‘(IV) section 23(c)(4) (42 U.S.C. 
1437u(c)(4)); 
‘‘(V) section 32(e)(4) (42 U.S.C. 
1437z–4(e)(4)); 
‘‘(VI) section 33(d)(2)(B) (42 
U.S.C. 1437z–5(d)(2)(B)); 
‘‘(VII) sections 302(b)(6) and 
303(b)(7) 
(42 
U.S.C. 
1437aaa– 
1(b)(6), 1437aaa–2(b)(7)); and 
‘‘(VIII) section 304(c)(4) (42 
U.S.C. 1437aaa–3(c)(4)); 
‘‘(iii) section 302(a)(4) of the Amer-
ican Homeownership and Economic Oppor-
tunity Act of 2000 (42 U.S.C. 1437f note); 
‘‘(iv) sections 233(b)(2) and 258(b) of 
the Cranston-Gonzalez National Affordable 
Housing Act (42 U.S.C. 12773(b)(2), 
12808(b));
116 
‘‘(v) this section and section 101(e) of 
the Housing and Urban Development Act 
of 1968 (12 U.S.C. 1701x, 1701w(e)); 
‘‘(vi) section 220(d)(2)(G) of the Low- 
Income Housing Preservation and Resident 
Homeownership Act of 1990 (12 U.S.C. 
4110(d)(2)(G)); 
‘‘(vii) sections 422(b)(6), 423(b)(7), 
424(c)(4), 442(b)(6), and 443(b)(6) of the 
Cranston-Gonzalez 
National 
Affordable 
Housing Act (42 U.S.C. 12872(b)(6), 
12873(b)(7), 
12874(c)(4), 
12892(b)(6), 
and 12893(b)(6)); 
‘‘(viii) section 491(b)(1)(F)(iii) of the 
McKinney-Vento Homeless Assistance Act 
(42 U.S.C. 11408(b)(1)(F)(iii)); 
‘‘(ix) 
sections 
202(3) 
and 
810(b)(2)(A) of the Native American 
Housing and Self-Determination Act of 
1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); 
‘‘(x) in the National Housing Act— 
‘‘(I) in section 203 (12 U.S.C. 
1709), the penultimate undesignated 
paragraph of paragraph (2) of sub-
117 
section (b), subsection (c)(2)(A), and 
subsection (r)(4); 
‘‘(II) subsections (a) and (c)(3) 
of section 237 (12 U.S.C. 1715z–2); 
and 
‘‘(III) subsections (d)(2)(B) and 
(m)(1) of section 255 (12 U.S.C. 
1715z–20); 
‘‘(xi) section 502(h)(4)(B) of the 
Housing 
Act 
of 
1949 
(42 
U.S.C. 
1472(h)(4)(B)); 
‘‘(xii) section 508 of the Housing and 
Urban Development Act of 1970 (12 
U.S.C. 1701z–7); and 
‘‘(xiii) section 106 of the Energy Pol-
icy Act of 1992 (42 U.S.C. 12712 note). 
‘‘(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
118 
related to such topics that is provided pursuant 
to— 
‘‘(i) section 105(a)(20) of the Housing 
and Community Development Act of 1974 
(42 U.S.C. 5305(a)(20)); 
‘‘(ii) in the United States Housing 
Act of 1937— 
‘‘(I) section 9(e) (42 U.S.C. 
1437g(e)); 
‘‘(II) section 18(a)(4)(D) (42 
U.S.C. 1437p(a)(4)(D)); 
‘‘(III) 
section 
23(c)(4) 
(42 
U.S.C. 1437u(c)(4)); 
‘‘(IV) section 32(e)(4) (42 U.S.C. 
1437z–4(e)(4)); 
‘‘(V) section 33(d)(2)(B) (42 
U.S.C. 1437z–5(d)(2)(B)); and 
‘‘(VI) 
section 
302(b)(6) 
(42 
U.S.C. 1437aaa–1(b)(6)); 
‘‘(iii) section 233(b)(2) of the Cran-
ston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12773(b)(2)); 
‘‘(iv) section 106 of the Housing and 
Urban Development Act of 1968 (12 
U.S.C. 1701x);
119 
‘‘(v) section 422(b)(6) of the Cran-
ston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12872(b)(6)); 
‘‘(vi) section 491(b)(1)(F)(iii) of the 
McKinney-Vento Homeless Assistance Act 
(42 U.S.C. 11408(b)(1)(F)(iii)); 
‘‘(vii) 
sections 
202(3) 
and 
810(b)(2)(A) of the Native American 
Housing and Self-Determination Act of 
1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); 
and 
‘‘(viii) the rental assistance program 
under section 8 of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437f). 
‘‘(2) STANDARDS FOR MATERIALS.—The Sec-
retary, in consultation with the advisory committee 
established under subsection (g)(4) of the Depart-
ment of Housing and Urban Development Act, shall 
establish standards for materials and forms to be 
used, as appropriate, by organizations providing 
homeownership counseling services, including any re-
cipients of assistance pursuant to subsection (a)(4). 
‘‘(3) MORTGAGE SOFTWARE SYSTEMS.— 
‘‘(A) CERTIFICATION.—The Secretary shall 
provide for the certification of various computer
120 
software programs for consumers to use in eval-
uating different residential mortgage loan pro-
posals. The Secretary shall require, for such 
certification, that the mortgage software sys-
tems take into account— 
‘‘(i) the consumer’s financial situation 
and the cost of maintaining a home, in-
cluding insurance, taxes, and utilities; 
‘‘(ii) the amount of time the consumer 
expects to remain in the home or expected 
time to maturity of the loan; and 
‘‘(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
121 
of new mortgage software systems that meet 
the Secretary’s specifications. 
‘‘(B) USE
AND
INITIAL
AVAILABILITY.— 
Such certified computer software programs 
shall be used to supplement, not replace, hous-
ing counseling. The Secretary shall provide that 
such programs are initially used only in connec-
tion with the assistance of housing counselors 
certified pursuant to subsection (e). 
‘‘(C) AVAILABILITY.—After a period of ini-
tial availability under subparagraph (B) as the 
Secretary considers appropriate, the Secretary 
shall take reasonable steps to make mortgage 
software systems certified pursuant to this 
paragraph widely available through the Internet 
and at public locations, including public librar-
ies, senior-citizen centers, public housing sites, 
offices of public housing agencies that admin-
ister rental housing assistance vouchers, and 
housing counseling centers. 
‘‘(D) BUDGET
COMPLIANCE.—This para-
graph shall be effective only to the extent that 
amounts to carry out this paragraph are made 
available in advance in appropriations Acts.
122 
‘‘(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, minorities, and other 
potentially vulnerable consumers aware that it 
is advisable, before seeking or maintaining a 
residential mortgage loan, to obtain homeowner-
ship counseling from an unbiased and reliable 
sources and that such homeownership coun-
seling is available, including through programs 
sponsored 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 website of the Department 
of Housing and Urban Development through 
which persons seeking housing counseling can 
locate a housing counseling agency in their
123 
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 
conduct of national public service multimedia 
campaigns under this paragraph. 
‘‘(D) FORECLOSURE
RESCUE
EDUCATION 
PROGRAMS.— 
‘‘(i) IN
GENERAL.—Ten percent of 
any funds appropriated pursuant to the 
authorization under subparagraph (C) 
shall be used by the Director of Housing 
Counseling to conduct an education pro-
gram in areas that have a high density of 
foreclosure. Such program shall involve di-
rect mailings to persons living in such 
areas describing— 
‘‘(I) tips on avoiding foreclosure 
rescue scams;
124 
‘‘(II) tips on avoiding predatory 
lending mortgage agreements; 
‘‘(III) tips on avoiding for-profit 
foreclosure counseling services; and 
‘‘(IV) local counseling resources 
that are approved by the Department 
of Housing and Urban Development. 
‘‘(ii) PROGRAM
EMPHASIS.—In con-
ducting the education program described 
under clause (i), the Director of Housing 
Counseling shall also place an emphasis on 
serving communities that have a high per-
centage of retirement communities or a 
high percentage of low-income minority 
communities. 
‘‘(iii) TERMS
DEFINED.—For pur-
poses of this subparagraph: 
‘‘(I) HIGH
DENSITY
OF
FORE-
CLOSURES.—An area has a ‘high den-
sity of foreclosures’ if such area is one 
of the metropolitan statistical areas 
(as that term is defined by the Direc-
tor of the Office of Management and 
Budget) with the highest home fore-
closure rates.
125 
‘‘(II) HIGH PERCENTAGE OF RE-
TIREMENT
COMMUNITIES.—An area 
has a ‘high percentage of retirement 
communities’ if such area is one of 
the metropolitan statistical areas (as 
that term is defined by the Director of 
the Office of Management and Budg-
et) with the highest percentage of 
residents aged 65 or older. 
‘‘(III) HIGH
PERCENTAGE
OF 
LOW-INCOME
MINORITY
COMMU-
NITIES.—An area has a ‘high percent-
age of low-income minority commu-
nities’ if such area contains a higher- 
than-normal percentage of residents 
who are both minorities and low-in-
come, as defined by the Director of 
Housing Counseling. 
‘‘(5) EDUCATION
PROGRAMS.—The Secretary 
shall provide advice and technical assistance to 
States, units of general local government, and non-
profit organizations regarding the establishment and 
operation of, including assistance with the develop-
ment of content and materials for, educational pro-
grams to inform and educate consumers, particularly