I 
109TH CONGRESS 
1ST SESSION H. R. 1295
To protect consumers against unfair and deceptive practices in connection 
with higher cost mortgage transactions, to strengthen the civil remedies 
available to consumers under existing law, to provide for certain uniform 
lending standards, to improve housing counseling, to better mortgage 
servicing, to enhance appraisal standards and oversight, to establish 
licensing and minimum standards for mortgage brokers, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 15, 2005
Mr. NEY (for himself, Mr. KANJORSKI, Mr. GARY G. MILLER of California, 
Mr. MEEKS of New York, Mr. GILLMOR, Mr. CROWLEY, Mr. FEENEY, 
Mr. CLAY, Mr. SHERMAN, Mr. SCOTT of Georgia, Ms. HOOLEY, and Mr. 
TIBERI) introduced the following bill; which was referred to the Com-
mittee on Financial Services 
A BILL 
To protect consumers against unfair and deceptive practices 
in connection with higher cost mortgage transactions, 
to strengthen the civil remedies available to consumers 
under existing law, to provide for certain uniform lending 
standards, to improve housing counseling, to better mort-
gage servicing, to enhance appraisal standards and over-
sight, to establish licensing and minimum standards for 
mortgage brokers, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Responsible Lending 
Act’’. 
SEC. 2. TABLE OF CONTENTS.
Sec. 1. Short title. 
Sec. 2. Table of contents. 
TITLE I—HIGHER-COST MORTGAGES 
Sec. 101. Short title. 
Sec. 102. Definitions relating to higher-cost mortgages. 
Sec. 103. Amendments to requirements for higher-cost mortgages. 
Sec. 104. Amendments relating to dispute and error resolution. 
Sec. 105. Amendments to damages, rescission and liability provisions. 
Sec. 106. Coordination with State law. 
Sec. 107. Clarification of State enforcement authority. 
Sec. 108. Prepayment penalties and late charges. 
Sec. 109. Regulations. 
Sec. 110. Effective dates. 
TITLE II—HOUSING COUNSELING 
Subtitle A—Consumer counseling 
Sec. 201. Consumer counseling requirements. 
Subtitle B—Expanded housing counseling opportunities 
Sec. 211. Short title. 
Sec. 212. Establishment of Office of Housing Counseling. 
Sec. 213. Counseling procedures. 
Sec. 214. Grants for housing counseling assistance. 
Sec. 215. Requirements to use HUD-certified counselors under HUD programs. 
Sec. 216. Study of defaults and foreclosures. 
Sec. 217. Definitions for counseling-related programs. 
Sec. 218. Updating and simplification of mortgage information booklet. 
Sec. 219. Option for notice of foreclosure prevention counseling availability. 
TITLE III—MORTGAGE SERVICING 
Sec. 301. Escrow and impound accounts relating to certain consumer credit 
transactions. 
Sec. 302. Disclosure notice required for consumers who opt out of escrow serv-
ices. 
Sec. 303. Mortgage servicing clarification. 
Sec. 304. Real Estate Settlement Procedures Act of 1974 amendments. 
Sec. 305. Mortgage servicing studies required. 
TITLE IV—APPRAISAL ACTIVITIES 
Sec. 401. Property appraisal requirements.
Sec. 402. Amendments relating to appraisal subcommittee of FIEC, appraiser 
independence, and approved appraiser education. 
Sec. 403.
Study required on improvements in appraisal process and compli-
ance programs. 
TITLE V—REQUIREMENTS FOR MORTGAGE BROKERS 
Subtitle A—Licensing and minimum standards 
Sec. 501. State regulation of mortgage brokers. 
Sec. 502. Federal mortgage broker requirements. 
Sec. 503. Definitions. 
Subtitle B—Database of licensed mortgage brokers 
Sec. 511. Establishment. 
Sec. 512. Database. 
Sec. 513. Fees. 
Sec. 514. Confidentiality of information. 
Sec. 515. Liability provisions.
TITLE I—HIGHER-COST 
MORTGAGES 
SEC. 101. SHORT TITLE. 
This title may be cited as the ‘‘Mortgage Lending Im-
provements and Uniform National Standards Act’’. 
SEC. 102. DEFINITIONS RELATING TO HIGHER-COST MORT-
GAGES. 
(a) HIGHER-COST MORTGAGE DEFINED.—Section 
103(aa) of the Truth in Lending Act (15 U.S.C. 
1602(aa)(1)) is amended—
(1) by striking all that precedes paragraph (2) 
and inserting the following: 
‘‘(aa) HIGHER-COST MORTGAGE DEFINED.—
‘‘(1) IN
GENERAL.—The terms ‘higher-cost 
mortgage’ and ‘mortgage referred to in this sub-
section’ mean a consumer credit transaction that is
secured by the consumer’s principal dwelling, other 
than a reverse mortgage transaction, if any of the 
following apply with respect to such consumer credit 
transaction: 
‘‘(A) The transaction is secured by a first 
mortgage on the consumer’s principal dwelling 
and the annual percentage rate on the credit, at 
consummation of the transaction, will exceed by 
more than 8 percentage points the yield on 
Treasury securities having comparable periods 
of maturity on the 15th day of the month im-
mediately preceding the month in which the ap-
plication for the extension of credit is received 
by the creditor. 
‘‘(B) The transaction is secured by a jun-
ior or subordinate mortgage on the consumer’s 
principal dwelling and the annual percentage 
rate on the credit, at consummation of the 
transaction, will exceed by more than 10 per-
centage points the yield on Treasury securities 
having comparable periods of maturity on the 
15th day of the month immediately preceding 
the month in which the application for the ex-
tension of credit is received by the creditor.
‘‘(C) The total loan amount exceeds 
$40,000 and total points and fees payable on 
the transaction will exceed 5 percent of the 
total loan amount. 
‘‘(D) The total loan amount is $40,000 or 
less and total points and fees payable on the 
transaction will exceed 6 percent of the total 
loan amount.’’; and 
(2) in paragraph (2)(B)(i), by striking ‘‘that’’ 
and inserting ‘‘than’’. 
(b) POINTS AND FEES DEFINED.—Section 103(aa) 
of the Truth in Lending Act (15 U.S.C. 1602(aa)) is 
amended—
(1) by striking paragraph (3); 
(2) by striking paragraph (4) and inserting the 
following new paragraph: 
‘‘(3) POINTS AND FEES DEFINED.—
‘‘(A) IN GENERAL.—For purposes of sub-
paragraphs (C) and (D) of paragraph (1), the 
term ‘points and fees’ includes—
‘‘(i) all items included in the finance 
charge, except interest or the time-price 
differential;