I 
110TH CONGRESS 
1ST SESSION H. R. 3012 
To amend the Truth in Lending Act to provide for the establishment of 
fair mortgage practices, generally, and for subprime mortgages in par-
ticular, to provide for a national system for licensing or registering 
residential mortgage loan originators, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 12, 2007 
Mr. BACHUS (for himself, Mr. GILLMOR, Ms. PRYCE of Ohio, Mr. GARY G. 
MILLER of California, and Mr. LATOURETTE) introduced the following 
bill; which was referred to the Committee on Financial Services, and in 
addition to the Committee on the Judiciary, for a period to be subse-
quently determined by the Speaker, in each case for consideration of such 
provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Truth in Lending Act to provide for the 
establishment of fair mortgage practices, generally, and 
for subprime mortgages in particular, to provide for a 
national system for licensing or registering residential 
mortgage loan originators, 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; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Fair Mortgage Practices Act of 2007’’. 
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(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Definition. 
TITLE I—LICENSING SYSTEM OF RESIDENTIAL MORTGAGE LOAN 
ORIGINATORS 
Sec. 101. Purposes and methods for establishing a mortgage licensing system. 
Sec. 102. Definitions. 
Sec. 103. License or registration required. 
Sec. 104. License and registration application and issuance. 
Sec. 105. Standards for license renewal. 
Sec. 106. System of registration administration by Federal banking agencies. 
Sec. 107. Secretary of housing and urban development backup authority to es-
tablish a loan originator licensing system. 
Sec. 108. System for State-licensed loan originators. 
Sec. 109. Fees. 
Sec. 110. Mortgage professional background checks. 
Sec. 111. Confidentiality of information. 
Sec. 112. Liability provisions. 
TITLE II—SIMPLIFIED DISCLOSURES 
Sec. 201. Basic mortgage facts. 
TITLE III—HOUSING COUNSELING 
Subtitle A—Consumer Counseling 
Sec. 301. Consumer counseling requirements. 
Subtitle B—Expanded Housing Counseling Opportunities 
Sec. 311. Short title. 
Sec. 312. Establishment of Office of Housing Counseling. 
Sec. 313. Counseling procedures. 
Sec. 314. Grants for housing counseling assistance. 
Sec. 315. Requirements to use HUD-certified counselors under HUD programs. 
Sec. 316. Study of defaults and foreclosures. 
Sec. 317. Definitions for counseling-related programs. 
Sec. 318. Updating and simplification of mortgage information booklet. 
TITLE IV—PROHIBITION ON ABUSIVE PRACTICES 
Subtitle A—Mortgage Servicing 
Sec. 401. Escrow and impound accounts relating to certain consumer credit 
transactions. 
Sec. 402. Disclosure notice required for consumers who opt out of escrow serv-
ices. 
Subtitle B—Nontraditional Mortgage Provisions 
Sec. 411. Prepayment penalties. 
Sec. 412. Ability to repay. 
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TITLE V—MORTGAGE FRAUD 
Sec. 501. Authorization of appropriations for mortgage fraud prevention, inves-
tigation, and prosecution. 
TITLE VI—APPRAISAL ACTIVITIES 
Sec. 601. Property appraisal requirements. 
Sec. 602. Amendments relating to appraisal subcommittee of FIEC, appraiser 
independence, and approved appraiser education. 
Sec. 603. Study required on improvements in appraisal process and compliance 
programs. 
TITLE VII—INCENTIVES FOR BEST PRACTICES 
Sec. 701. CRA credit for certain lender practices. 
SEC. 2. DEFINITION. 
(a) DEFINITION OF SUBPRIME MORTGAGE.—Section 
103 of the Truth in Lending Act (15 U.S.C. 1602) is 
amended by adding at the end the following new sub-
section: 
‘‘(cc) SUBPRIME MORTGAGE.—The term ‘subprime 
mortgage’ means any consumer credit transaction secured 
by the principal dwelling of the consumer that bears or 
otherwise meets the terms and characteristics for such a 
transaction that the Board has defined as a subprime 
mortgage.’’. 
(b) REGULATIONS.—The Board shall prescribe regu-
lations defining a subprime mortgage for purposes of the 
amendment made by subsection (a) before the end of the 
90-day period beginning on the date of the enactment of 
this Act. 
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TITLE I—LICENSING SYSTEM OF 
RESIDENTIAL 
MORTGAGE 
LOAN ORIGINATORS 
SEC. 101. PURPOSES AND METHODS FOR ESTABLISHING A 
MORTGAGE LICENSING SYSTEM. 
In order to increase uniformity, reduce regulatory 
burden, enhance consumer protection, and reduce fraud, 
the States, through the Conference of State Bank Super-
visors and the American Association of Residential Mort-
gage Regulators, are hereby encouraged to establish a Na-
tionwide Mortgage Licensing System and registry for the 
residential mortgage industry that accomplishes all of the 
following objectives: 
(1) Provides uniform mortgage applications and 
reporting requirements for State-licensed loan origi-
nators. 
(2) Provides a comprehensive licensing and su-
pervisory database. 
(3) Aggregates and improves the flow of infor-
mation to and between regulators. 
(4) Provides increased licensee accountability 
and tracking. 
(5) Streamlines the licensing process and re-
duces the regulatory burden. 
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(6) Enhances consumer protections and sup-
ports anti-fraud measures. 
SEC. 102. DEFINITIONS. 
For purposes of this title, the following definitions 
shall apply: 
(1) FEDERAL BANKING AGENCIES.—The term 
‘‘Federal banking agencies’’ means the Board of 
Governors of the Federal Reserve System, the 
Comptroller of the Currency, the Director of the Of-
fice of Thrift Supervision, the National Credit Union 
Administration, and the Federal Deposit Insurance 
Corporation. 
(2) LOAN ORIGINATOR.— 
(A) IN GENERAL.—The term ‘‘loan origi-
nator’’— 
(i) means an individual who— 
(I) takes a residential mortgage 
loan application; 
(II) assists a consumer in obtain-
ing or applying to obtain a residential 
mortgage loan; or 
(III) offers or negotiates terms of 
a mortgage loan, for direct or indirect 
compensation or gain, or in the expec-
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tation of direct or indirect compensa-
tion or gain; 
(ii) includes any individual who rep-
resents to the public, through advertising 
or other means of communicating or pro-
viding information (including the use of 
business 
cards, 
stationery, 
brochures, 
signs, rate lists, or other promotional 
items), that such individual can or will pro-
vide or perform any of the activities de-
scribed in clause (i); and 
(iii) does not include any individual 
who performs purely administrative or cler-
ical tasks and is not otherwise described in 
this subparagraph. 
(B) OTHER
DEFINITIONS
RELATING
TO 
LOAN ORIGINATOR.—For purposes of this para-
graph, a person ‘‘assists a consumer in obtain-
ing or applying to obtain a residential mortgage 
loan’’ by, among other things, counseling on 
loan terms (rates, fees, other costs), preparing 
loan packages, or collecting enough information 
on behalf of the consumer to anticipate a credit 
decision. 
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(3) ADMINISTRATIVE
OR
CLERICAL
TASKS.— 
The term ‘‘administrative or clerical tasks’’ means 
the receipt, collection, and distribution of informa-
tion common for the processing or underwriting of 
a loan in the mortgage industry and communication 
with a consumer to obtain information necessary for 
the processing or underwriting of a loan. 
(4) LOAN PROCESSOR OR UNDERWRITER.— 
(A) IN GENERAL.—The term ‘‘loan proc-
essor or underwriter’’ means an individual who 
performs clerical or support duties at the direc-
tion of and subject to the supervision and in-
struction of a licensed mortgage broker, lender, 
insured depository institution, or wholly-owned 
subsidiary of an insured depository institution. 
(B) CLERICAL OR SUPPORT DUTIES.—For 
purposes of subparagraph (A), the term ‘‘cler-
ical or support duties’’ may include— 
(i) the receipt, collection, distribution, 
and analysis of information common for 
the processing or underwriting of a loan; 
and 
(ii) communicating with a borrower to 
obtain the information necessary for the 
processing or underwriting of a loan, to the 
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extent that such communication does not 
include offering or negotiating loan rates 
or terms, or counseling borrowers about 
loan rates or terms. 
(5) MORTGAGE BROKER OR MORTGAGE LEND-
ER.—The term ‘‘mortgage broker or mortgage lend-
er’’ means any person who for compensation or gain, 
or in the expectation of compensation or gain— 
(A) makes a residential mortgage loan or 
assists a person in obtaining or applying to ob-
tain a residential mortgage loan; or 
(B) represents to the public, through ad-
vertising or other means of communicating or 
providing information (including the use of 
business cards, stationery, brochures, signs, 
rate lists, or other promotional items), that 
such individual can or will make a residential 
mortgage loan or assist a consumer in obtaining 
or applying to obtain a residential mortgage 
loan. 
(6) NATIONWIDE
MORTGAGE
LICENSING
SYS-
TEM.—The term ‘‘Nationwide Mortgage Licensing 
System’’ means a mortgage licensing system devel-
oped and maintained by the Conference of State 
Bank Supervisors and the American Association of 
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Residential Mortgage Regulators for the State li-
censing of State-licensed loan originators. 
(7) REGISTERED LOAN ORIGINATOR.—The term 
‘‘registered loan originator’’ means any individual 
who— 
(A) meets the definition of loan originator 
and is an employee of an insured depository in-
stitution or a wholly-owned operating subsidiary 
of an insured depository institution; and 
(B) is registered and maintains a unique 
identifier through the Nationwide Mortgage Li-
censing System or system. 
(8) RESIDENTIAL MORTGAGE LOAN.—The term 
‘‘residential mortgage loan’’ means any loan pri-
marily for personal, family, or household use that is 
secured by a mortgage or deed of trust on residen-
tial real estate upon which is constructed or in-
tended to be constructed a single family dwelling of 
4 or fewer units. 
(9) RESIDENTIAL
REAL
ESTATE.—The term 
‘‘residential real estate’’ means real property upon 
which is constructed or intended to be constructed, 
a 1- to 4-family residence, except that such term 
does not include any dwelling on leased or rented 
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land or space unless the mortgage broker treats such 
property as residential real estate. 
(10) STATE-LICENSED
LOAN
ORIGINATOR.— 
The term ‘‘State-licensed loan originator’’ means 
any individual who— 
(A) is a loan originator; 
(B) is not an employee of an insured de-
pository institution or any wholly-owned oper-
ating subsidiary of an insured depository insti-
tution; and 
(C) is licensed as a loan originator through 
the Nationwide Mortgage Licensing System. 
(11) UNIQUE IDENTIFIER.—The term ‘‘unique 
identifier’’ means a number established as perma-
nent identification of a loan originator. 
SEC. 103. LICENSE OR REGISTRATION REQUIRED. 
(a) IN GENERAL.—A person may not engage in the 
business of a loan originator without first obtaining and 
maintaining a registration as a registered loan originator 
or a license as a State-licensed loan originator. 
(b) LOAN PROCESSORS AND UNDERWRITERS.— 
(1) SUPERVISED LOAN PROCESSORS AND UN-
DERWRITERS.—A loan processor or underwriter who 
does not represent to the public, through advertising 
or other means of communicating or providing infor-
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mation (including the use of business cards, sta-
tionery, brochures, signs, rate lists, or other pro-
motional items), that such individual can or will pro-
vide or perform any of the activities of a mortgage 
broker, mortgage provider, or loan originator shall 
not be required to have a loan originator license. 
(2) INDEPENDENTS.—A loan processor or un-
derwriter may not work as an independent con-
tractor unless licensed or registered as a mortgage 
broker. 
SEC. 104. LICENSE AND REGISTRATION APPLICATION AND 
ISSUANCE. 
(a) BACKGROUND CHECKS.—As a part of or in con-
nection with an application for any loan originator license 
or registration, the applicant shall, at a minimum, furnish 
to the Nationwide Mortgage Licensing System or appro-
priate regulatory agency, information concerning the ap-
plicant’s identity, including— 
(1) fingerprints for submission to the Federal 
Bureau of Investigation, and any governmental 
agency or entity authorized to receive such informa-
tion for a State and national criminal history back-
ground check; and 
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(2) personal history and experience, including 
authorization for the System or regulator agency to 
obtain— 
(A) an independent credit report obtained 
from a consumer reporting agency described in 
section 603(p) of the Fair Credit Reporting 
Act; and 
(B) information related to any administra-
tive, civil or criminal findings by any govern-
mental jurisdiction. 
(b) ISSUANCE OF LICENSE.—The minimum stand-
ards for license issuance shall include the following: 
(1) The applicant has not had a loan originator 
or similar license revoked in any governmental juris-
diction during the 5-year period immediately pre-
ceding the filing of the present application. 
(2) The applicant has not been convicted, pled 
guilty or nolo contendere in a domestic, foreign, or 
military court of a felony during the 7-year period 
immediately preceding the filing of the present appli-
cation. 
(3) The applicant has demonstrated financial 
responsibility, character, and general fitness such as 
to command the confidence of the community and to 
warrant a determination that the loan originator will 
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operate honestly, fairly, and efficiently within the 
purposes of this title. 
(4) The applicant has completed pre-licensing 
education. 
(5) The applicant has passed a written test. 
(c) PRE-LICENSING EDUCATION OF LOAN ORIGINA-
TORS.— 
(1) IN
GENERAL.—Before applying for a li-
cense, every loan originator shall complete an edu-
cation requirement. 
(2) APPROVED EDUCATIONAL COURSES.—Satis-
factory pre-licensing education courses shall be re-
viewed, approved and published by the Nationwide 
Mortgage Licensing System or the Secretary of 
Housing and Urban Development in consultation 
with the Nationwide Mortgage Licensing System. 
(3) MINIMUM EDUCATIONAL REQUIREMENTS.— 
The pre-licensing education requirement shall be at 
least 20 hours of approved education, which shall in-
clude at least 3 hours of Federal law and regulations 
and 3 hours of ethics. 
(d) TESTING OF LOAN ORIGINATORS.— 
(1) IN
GENERAL.—No individual may be li-
censed as a loan originator unless the individual has 
passed a qualified written test developed and admin-
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istered by the Nationwide Mortgage Licensing Sys-
tem or the Secretary of Housing and Urban Devel-
opment in consultation with the Nationwide Mort-
gage Licensing System. 
(2) QUALIFIED TEST.—A written test shall not 
be treated as a qualified written test for purposes of 
paragraph (1) unless— 
(A) the test consists of a minimum of 100 
questions; and 
(B) the test adequately measures the appli-
cant’s knowledge and comprehension in appro-
priate subject areas, including— 
(i) ethics; 
(ii) Federal law and regulation per-
taining to mortgage origination; and 
(iii) State law and regulation per-
taining to mortgage origination. 
(3) MINIMUM COMPETENCE.— 
(A) PASSING SCORE.—A passing test score 
of 75 percent correct answers to questions shall 
be required before accepting and processing a 
license application. 
(B) INITIAL RETESTS.—A loan originator 
may retake a test 3 consecutive times with each 
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consecutive taking occurring in less than 14 
days after the preceding test. 
(C) SUBSEQUENT RETESTS.—After 3 con-
secutive tests, a loan originator shall wait at 
least 14 days before taking the test again. 
(D) RETEST AFTER LAPSE OF LICENSE.— 
A loan originator who fails to maintain a valid 
license for a period of 5 years or longer shall 
retake the test. 
SEC. 105. STANDARDS FOR LICENSE RENEWAL. 
(a) IN GENERAL.—The minimum standards for li-
cense renewal shall include the following: 
(1) The loan originator continues to meet the 
minimum standards for license issuance. 
(2) The loan originator has satisfied the annual 
continuing education requirements set forth below. 
(b) CONTINUING EDUCATION FOR STATE-LICENSED 
LOAN ORIGINATORS.— 
(1) IN GENERAL.—Every loan originator shall 
complete an annual continuing education require-
ment in order to renew their loan originator license 
or registration each year. Satisfactory continuing 
education courses shall be reviewed, approved and 
published by the Nationwide Mortgage Licensing 
System or the Secretary of Housing and Urban De-
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velopment. The annual continuing education require-
ment shall be at least 8 hours of approved con-
tinuing education each year. Beginning with the loan 
originator’s first year and repeated each year there-
after the annual continuing education requirement 
shall include at least 3 hours of Federal law and 
regulations. Beginning with the loan originator’s 
first year and repeated each third year thereafter, 
the annual continuing education requirement shall 
include at least 2 hours of ethics. 
(c) APPLICATION.—Calculation of continuing edu-
cation credits. Continuing education credits apply only to 
the year in which they are taken. A loan originator may 
not take the same approved course in the same or succes-
sive years to meet the annual requirements for continuing 
education. A loan originator, approved as an instructor of 
an approved continuing education course may receive cred-
it for the annual education requirement at the rate of 2 
hours credit for every 1 hour taught. 
SEC. 106. SYSTEM OF REGISTRATION ADMINISTRATION BY 
FEDERAL BANKING AGENCIES. 
(a) DEVELOPMENT.—The Federal banking agencies 
shall have sole responsibility for developing and maintain-
ing a system of registration for registered loan originators. 
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(b) UNIQUE
IDENTIFIER.—The Federal banking 
agencies, through the Financial Institutions Examination 
Council, shall coordinate with the Nationwide Mortgage 
Licensing System to establish a unique identifier for all 
Loan Originators. 
(c) LINKAGE WITH STATE-LICENCED LOAN ORIGI-
NATORS.—To facilitate tracking and identification of, and 
public access to publicly-adjudicated disciplinary and en-
forcement actions against, loan originators alternating be-
tween registration and licensing, the unique identifier used 
to register loan originators shall link electronically with 
the unique identifier used to license State-licensed loan 
originators. 
(d) ADMINISTRATION.—The Federal banking agen-
cies may enter into a contract with the Nationwide Mort-
gage Licensing System to administer the registration of 
registered loan originators. 
SEC. 107. SECRETARY OF HOUSING AND URBAN DEVELOP-
MENT BACKUP AUTHORITY TO ESTABLISH A 
LOAN ORIGINATOR LICENSING SYSTEM. 
(a) IN GENERAL.—The provisions of this section and 
section 408 shall take effect for States that do not meet 
the minimum standards set forth in this title for State- 
licensed loan originators, if and only if, by the end of a 
3-year period beginning on the date of the enactment of 
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this Act the State does not have in place by law or regula-
tion the minimum requirements for licensing State-li-
censed loan originators that meet the specifications of this 
title and does not participate in the Nationwide Mortgage 
Licensing System. 
(b) BACK UP LICENSING SYSTEM.—The Secretary of 
Housing and Urban Development (hereafter in this title 
referred to as the ‘‘Secretary’’) shall provide for the estab-
lishment and maintenance of a system of licensed loan 
originators. 
(c) ADMINISTRATION.— 
(1) IN GENERAL.—The Secretary shall either 
maintain and administer the system established 
under this title or enter into a contract with the Na-
tionwide Mortgage Licensing System to administer 
the system. 
(2) CONSULTATION.—The Secretary shall con-
sult with the American Association of Residential 
Mortgage Regulators, the Conference of State Bank 
Supervisors, and other appropriate organizations in 
determining the information to be maintained in the 
System. 
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SEC. 108. SYSTEM FOR STATE-LICENSED LOAN ORIGINA-
TORS. 
(a) IN GENERAL.—In order to facilitate the require-
ments of section 407, the Secretary shall develop and 
maintain a system for State-licensed mortgage originators. 
(b) REQUIREMENTS FOR SYSTEM.—The system es-
tablished under subsection (a) shall, at a minimum, meet 
the following requirements: 
(1) UNIQUE IDENTIFIER.—The system shall in-
clude a unique identifier listing each State-licensed 
loan originator as follows: 
(A) The Federal banking agencies, through 
the Financial Institutions Examination Council, 
shall coordinate with the Nationwide Mortgage 
Licensing System to establish a unique identi-
fier for all loan originators. 
(B) To facilitate tracking and identifica-
tion of loan originators alternating between reg-
istration and licensing, the unique identifier 
used to register loan originators shall link elec-
tronically with the unique identifier used to li-
cense State-licensed loan originators. 
(2) AVAILABILITY OF ADVERSE INFORMATION 
ABOUT ORIGINATORS.—The system shall make avail-
able to the public information regarding publicly-ad-
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judicated disciplinary and enforcement actions taken 
against each State-licensed loan originator. 
(3) REGULATORY INFORMATION.—The system 
shall make available to the Secretary and to each 
public agency or official in a State responsible for 
regulating State-licensed loan originators such infor-
mation regarding State-licensed loan originators as 
the Secretary, by regulation, considers appropriate 
for the Secretary and such agencies and officials to 
carry out their functions regarding regulation of 
State-licensed loan originators, including information 
regarding employment histories and criminal back-
grounds. 
(4) AVAILABILITY OF OTHER INFORMATION TO 
CONSUMERS.—The system shall make available to 
persons employing or using the services of State-li-
censed loan originators such information regarding 
State-licensed loan originators as the Secretary, by 
regulation, considers appropriate. 
(5) RECORDKEEPING.—The system shall pro-
vide for the maintenance of such other information 
as the Secretary considers appropriate. 
(c) NAME OF SYSTEM.—In the event the Secretary 
contracts with the Nationwide Mortgage Licensing System 
to administer the licensing of State-licensed loan origina-
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tors, the system referenced in this subsection shall be 
known by the name Nationwide Mortgage Licensing Sys-
tem. 
SEC. 109. FEES. 
The Federal banking agencies, the Secretary of 
Housing and Urban Development, and the Nationwide 
Mortgage Licensing System may charge reasonable fees 
to cover the costs of maintaining and providing access to 
information from the system to the extent such fees are 
not charged to the general public. 
SEC. 
110. 
MORTGAGE 
PROFESSIONAL 
BACKGROUND 
CHECKS. 
(a) ACCESS
TO RECORDS.—Notwithstanding any 
other provision of the law, in providing identification and 
processing functions, the Attorney General shall provide 
access to all criminal history information to the appro-
priate State officials responsible for regulating mortgage 
professionals if required under the laws of the State. 
(b) AGENT.—For the purposes of this section and in 
order to reduce the points of contact with which the Fed-
eral Bureau of Investigation may have to maintain for 
purposes of subsection (a), the Conference of State Bank 
Supervisors or a wholly owned subsidiary may be used as 
a channeling agent of the States for requesting and dis-
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tributing information between the Department of Justice 
and the appropriate State agencies. 
SEC. 111. CONFIDENTIALITY OF INFORMATION. 
(a) SYSTEM CONFIDENTIALITY.—Except as other-
wise provided in this section, any requirement under Fed-
eral or State law regarding the privacy or confidentiality 
of any information or material in the possession of the 
Secretary or any other organization serving as the admin-
istrator of the system proposed in this title, and any privi-
lege arising under Federal or State law (including the 
rules of any Federal or State court) with respect to such 
information or material, shall continue to apply to such 
information or material after the information or material 
has been disclosed to the system. Information in the sys-
tem may be shared with all State and Federal regulatory 
officials with mortgage industry oversight authority with-
out the loss of privilege or the loss of confidentiality pro-
tections provided by the Federal and State laws of the 
States that have ownership of that information. 
(b) NONAPPLICABILITY
OF
CERTAIN
REQUIRE-
MENTS.—Information or material that is subject to a 
privilege or confidentiality under subsection (a) shall not 
be subject to— 
(1) disclosure under any Federal or State law 
governing the disclosure to the public of information 
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held by an officer or an agency of the Federal Gov-
ernment or the respective State; or 
(2) subpoena or discovery, or admission into 
evidence, in any private civil action or administrative 
process, unless with respect to any privilege held by 
the Secretary with respect to such information or 
material, the participant waives, in whole or in part, 
in the discretion of the participant, such privilege. 
(c) PREEMPTION OF STATE LAW.—Any State law, 
including any State open record law, relating to the disclo-
sure of confidential supervisory information or any infor-
mation or material described in subsection (a) that is in-
consistent with subsection (a) shall be superseded by the 
requirements of such provision to the extent State law pro-
vides less confidentiality or a weaker privilege. 
SEC. 112. LIABILITY PROVISIONS. 
The Secretary of Housing and Urban Development 
or any State official or agency, or organization serving as 
the administrator of the system proposed in this title, or 
employee thereof, shall not be subject to any civil action 
or proceeding for monetary damages by reason of the 
good-faith action or omission of any officer or employee, 
while acting within the scope of office or employment, re-
lating to collecting, furnishing, or disseminating of infor-
mation concerning persons who are mortgage professionals 
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or are applying for licensing or registration as mortgage 
professionals or licensed loan officers or mortgage 
branches or mortgage companies, whether directly or 
through the system established under this title. 
TITLE II—SIMPLIFIED 
DISCLOSURES 
SEC. 201. BASIC MORTGAGE FACTS. 
(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 127A the following new section: 
‘‘§ 127B. Disclosure requirements required for all 
consumer credit plans secured by the 
consumer’s principal dwelling. 
‘‘(a) SIMPLIFIED DISCLOSURE OF BASIC MORTGAGE 
FACTS REQUIRED.—No consumer credit transaction se-
cured by the principal dwelling of the consumer (hereafter 
in this section referred to as the ‘mortgage’) may be con-
summated unless— 
‘‘(1) the mortgagee under the mortgage has 
provided to the consumer the written disclosures re-
quired under subsection (b) at least 3 days before 
the date of the settlement and execution of the mort-
gage; and 
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‘‘(2) the consumer has signed the disclosure 
under subsection (b)(1) and returned such disclosure 
to the mortgagee. 
‘‘(b) CONTENTS.—With respect to a mortgage, the 
written disclosures required under this subsection are as 
follows: 
‘‘(1) STATEMENT
OF
MORTGAGE
FACTS.—A 
single page, written disclosure regarding the mort-
gage with the heading ‘Your Basic Mortgage Facts’ 
that sets forth, in accordance with such require-
ments as the Board shall, by regulation, establish— 
‘‘(A) the amount of the principal obligation 
under the mortgage; 
‘‘(B) the loan-to-value ratio for the mort-
gage; 
‘‘(C) the final maturity date for the mort-
gage; 
‘‘(D) the amount and due date for any bal-
loon payment under the mortgage; 
‘‘(E) the amount of any prepayment fee to 
be charged if the mortgage is paid in full before 
the final maturity date for the mortgage; 
‘‘(F) the initial interest rate under the 
mortgage expressed as an annual percentage 
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rate, and the amount of the monthly payment 
due under such rate; 
‘‘(G) the duration during which such initial 
interest rate will be charged; 
‘‘(H) the fully indexed rate of interest 
under the mortgage expressed as an annual 
percentage rate and the amount of the monthly 
payment due under such rate; 
‘‘(I) the maximum possible rate of interest 
under the mortgage expressed as an annual 
percentage rate and the amount of the monthly 
payment due under such rate; 
‘‘(J) the monthly household income of the 
mortgagor upon which the mortgage is based; 
‘‘(K) the amount of initial monthly pay-
ment due under the mortgage, and the amount 
of such initial monthly payment plus monthly 
amounts due for taxes and insurance on the 
property subject to the mortgage, both ex-
pressed as a percentage of the monthly house-
hold income of the mortgagor; 
‘‘(L) the amount of the fully indexed 
monthly payment due under the mortgage, and 
the amount of such fully indexed monthly pay-
ment plus monthly amounts due for taxes and 
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sroberts on PROD1PC70 with BILLS
insurance on the property subject to the mort-
gage, both expressed as a percentage of the 
monthly household income of the mortgagor; 
‘‘(M) the amount of any points to be paid 
by the mortgagor under the mortgage and the 
aggregate amount of any other closing costs in 
connection with the mortgage; 
‘‘(N) the amount of any late payment fees 
and a brief description of the consequences of 
making any payment late or defaulting on the 
mortgage, including foreclosure; 
‘‘(O) a name, telephone number, and elec-
tronic mail address that may be used by the 
mortgagor to obtain information regarding the 
mortgage; 
‘‘(P) an authorized signature of the origi-
nator of the mortgage; 
‘‘(Q) a blank space for the signature of the 
borrower; and 
‘‘(R) immediately above such blank space, 
a conspicuous statement in bold typeface, in all 
capital letters, in a font at least equal in size 
to the largest font otherwise used in the disclo-
sure, as follows: ‘DO NOT SIGN THIS IF 
YOU DON’T UNDERSTAND IT!’. 
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‘‘(2) STATEMENT OF DEFINITIONS AND EXPLA-
NATIONS.—A 2-page written disclosure that sets 
forth, in accordance with such requirements as the 
Board shall, by regulation in accordance with section 
105, establish, basic easy-to-understand definitions 
or explanations, for purposes of residential mort-
gages, for all of the following terms: appraised value, 
types of loans, initial interest rate, fully indexed rate 
of interest, maximum possible rate of interest, 
monthly household income, monthly mortgage pay-
ment including taxes and insurance, fully indexed 
housing expense ratio, prepayment fee, balloon pay-
ment, payment option loan, points, closing costs, and 
default and foreclosure. 
‘‘(c) PREEMPTION.—The provisions of this section re-
lating to the disclosure of basic mortgage facts to a con-
sumer in connection with any mortgage shall supersede 
the provisions of the law of any State relating to the dis-
closure of such facts.’’. 
(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 127A the 
following new item: 
‘‘127B. Disclosure requirements required for all consumer credit plans secured 
by the consumer’s principal dwelling.’’. 
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TITLE III—HOUSING 
COUNSELING 
Subtitle A—Consumer Counseling 
SEC. 301. CONSUMER COUNSELING REQUIREMENTS. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lend-
ing Act (15 U.S.C. 1631 et seq.) is amended by inserting 
after section 129 the following new section: 
‘‘§ 129A. 
Provisions 
applicable 
to 
nontraditional 
mortgages 
‘‘(a) CONSUMER COUNSELING REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A creditor may not extend 
any credit in the form of a subprime mortgage to 
any consumer unless the creditor has provided to the 
consumer, at such time before the consummation of 
the mortgage and in such manner as the Board shall 
provide by regulation— 
‘‘(A) a separate written statement recom-
mending that the consumer take advantage of 
available home ownership or credit counseling 
services before agreeing to the terms of any 
subprime mortgage; and 
‘‘(B) a written statement containing the 
names, addresses and telephone numbers of 
counseling agencies or programs reasonably 
available to the consumer that have been cer-
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tified or approved and made publicly available 
by the Secretary of Housing and Urban Devel-
opment, a State housing finance authority (as 
defined in section 1301 of the Financial Institu-
tions Reform, Recovery, and Enforcement Act 
of 1989), or the agency referred to in sub-
section (a) or (c) of section 108 with jurisdic-
tion over the creditor as qualified to provide 
counseling on— 
‘‘(i) the advisability of a subprime 
mortgage transaction; and 
‘‘(ii) 
the 
appropriateness 
of 
a 
subprime mortgage for the consumer. 
‘‘(2) COMPLETE
AND
UPDATED
LISTS
RE-
QUIRED.—A creditor shall be deemed to be in com-
pliance with the requirements of this subsection if 
the creditor provides the consumer with a reasonably 
complete or updated list of counseling agencies re-
quired by section 5(a) of the Real Estate Settlement 
Procedures Act of 1974.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for chapter 2 of the Truth in Lending Act is amended 
by inserting after the item relating to section 129 the fol-
lowing new item: 
‘‘129A. Provisions applicable to nontraditional mortgages.’’. 
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Subtitle B—Expanded Housing 
Counseling Opportunities 
SEC. 311. SHORT TITLE. 
This subtitle may be cited as the ‘‘Expanding Hous-
ing Opportunities Through Education and Counseling 
Act’’. 
SEC. 312. ESTABLISHMENT OF OFFICE OF HOUSING COUN-
SELING. 
Section 4 of the Department of Housing and Urban 
Development Act (42 U.S.C. 3533) is amended by adding 
at the end the following new subsection: 
‘‘(g) OFFICE OF HOUSING COUNSELING.— 
‘‘(1) ESTABLISHMENT.—There is established, 
in the Office of the Secretary, the Office of Housing 
Counseling. 
‘‘(2) DIRECTOR.—There is established the posi-
tion of Director of Housing Counseling. The Direc-
tor shall be the head of the Office of Housing Coun-
seling and shall be appointed by the Secretary. Such 
position shall be a career-reserved position in the 
Senior Executive Service. 
‘‘(3) FUNCTIONS.— 
‘‘(A) IN
GENERAL.—The Director shall 
have ultimate responsibility within the Depart-
ment, except for the Secretary, for all activities 
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sroberts on PROD1PC70 with BILLS
and matters relating to homeownership coun-
seling and rental housing counseling, includ-
ing— 
‘‘(i) research, grant administration, 
public outreach, and policy development re-
lating to such counseling; and 
‘‘(ii) establishment, coordination, and 
administration of all regulations, require-
ments, standards, and performance meas-
ures under programs and laws adminis-
tered by the Department that relate to 
housing counseling, homeownership coun-
seling (including maintenance of homes), 
mortgage-related 
counseling 
(including 
home equity conversion mortgages and 
credit protection options to avoid fore-
closure), and rental housing counseling, in-
cluding the requirements, standards, and 
performance measures relating to housing 
counseling. 
‘‘(B) SPECIFIC FUNCTIONS.—The Director 
shall carry out the functions assigned to the Di-
rector and the Office under this section and any 
other provisions of law. Such functions shall in-
clude establishing rules necessary for— 
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‘‘(i) the counseling procedures under 
section 106(h)(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(h) of 
the Housing and Urban Development Act 
of 1968, including the establishment, oper-
ation, and publication of the availability of 
the toll-free telephone number under para-
graph (2) of such section; 
‘‘(iii) carrying out section 5 of the 
Real Estate Settlement Procedures Act of 
1974 (12 U.S.C. 2604) for home buying 
information booklets prepared pursuant to 
such section; 
‘‘(iv) carrying out the certification 
program under section 106(e) of the Hous-
ing and Urban Development Act of 1968 
(12 U.S.C. 1701x(e)); 
‘‘(v) carrying out the assistance pro-
gram under section 106(a)(4) of the Hous-
ing and Urban Development Act of 1968, 
including criteria for selection of applica-
tions to receive assistance; 
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‘‘(vi) providing for operation of the 
advisory committee established under para-
graph (4) of this subsection; and 
‘‘(vii) collaborating with community- 
based organizations with expertise in the 
field of housing counseling. 
‘‘(4) ADVISORY COMMITTEE.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
appoint an advisory committee to provide advice 
and oversight regarding the carrying out of the 
functions of the Director. 
‘‘(B) MEMBERS.—Such advisory committee 
shall consist of not more than 12 individuals, 
and the membership of the committee shall 
equally represent all aspects of the mortgage 
and real estate industry, including consumers. 
‘‘(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 
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a term of 1 year and 4 shall be appointed for 
a term of 2 years. 
‘‘(E) PROHIBITION OF PAY; TRAVEL EX-
PENSES.—Members of the advisory committee 
shall serve without pay, but shall receive travel 
expenses, including per diem in lieu of subsist-
ence, in accordance with applicable provisions 
under subchapter I of chapter 57 of title 5, 
United States Code. 
‘‘(F) ADVISORY
ROLE
ONLY.—The advi-
sory committee shall have no role in reviewing 
or awarding housing counseling grants. 
‘‘(5) 
SCOPE
OF
HOMEOWNERSHIP
COUN-
SELING.—In carrying out the responsibilities of the 
Director, the Director shall ensure that homeowner-
ship counseling provided by, in connection with, or 
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.’’. 
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SEC. 313. COUNSELING PROCEDURES. 
(a) IN GENERAL.—Section 106 of the Housing and 
Urban Development Act of 1968 (12 U.S.C. 1701x), as 
amended by the preceding provisions of this title, is fur-
ther amended by adding at the end the following new sub-
section: 
‘‘(h) PROCEDURES AND ACTIVITIES.— 
‘‘(1) COUNSELING PROCEDURES.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
establish, coordinate, and monitor the adminis-
tration by the Department of Housing and 
Urban Development of the counseling proce-
dures for homeownership counseling and rental 
housing counseling provided in connection with 
any program of the Department, including all 
requirements, 
standards, 
and 
performance 
measures that relate to homeownership and 
rental housing counseling. 
‘‘(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-
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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— 
‘‘(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)); 
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‘‘(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)); 
‘‘(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 
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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-
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)); and 
‘‘(xii) section 508 of the Housing and 
Urban Development Act of 1970 (12 
U.S.C. 1701z–7). 
‘‘(C) RENTAL
HOUSING
COUNSELING.— 
For purposes of this subsection, the term ‘rent-
al housing counseling’ means counseling related 
to rental of residential property, which may in-
clude counseling regarding future homeowner-
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ship opportunities and providing referrals for 
renters and prospective renters to entities pro-
viding counseling and shall include counseling 
related to such topics that is provided pursuant 
to— 
‘‘(i) section 105(a)(20) of the Housing 
and Community Development Act of 1974 
(42 U.S.C. 5305(a)(20)); 
‘‘(ii) in the United States Housing 
Act of 1937— 
‘‘(I) section 9(e) (42 U.S.C. 
1437g(e)); 
‘‘(II) section 18(a)(4)(D) (42 
U.S.C. 1437p(a)(4)(D)); 
‘‘(III) 
section 
23(c)(4) 
(42 
U.S.C. 1437u(c)(4)); 
‘‘(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)); 
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‘‘(iv) section 106 of the Housing and 
Urban Development Act of 1968 (12 
U.S.C. 1701x); 
‘‘(v) section 422(b)(6) of the Cran-
ston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12872(b)(6)); 
‘‘(vi) section 491(b)(1)(F)(iii) of the 
McKinney-Vento Homeless Assistance Act 
(42 U.S.C. 11408(b)(1)(F)(iii)); 
‘‘(vii) 
sections 
202(3) 
and 
810(b)(2)(A) of the Native American 
Housing and Self-Determination Act of 
1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); 
and 
‘‘(viii) the rental assistance program 
under section 8 of the United States Hous-
ing Act of 1937 (42 U.S.C. 1437f). 
‘‘(2) STANDARDS FOR MATERIALS.—The Sec-
retary, in conjunction with the advisory committee 
established under subsection (g)(4), shall establish 
standards for materials and forms to be used, as ap-
propriate, by organizations providing homeownership 
counseling services, including any recipients of as-
sistance pursuant to subsection (a)(4). 
‘‘(3) MORTGAGE SOFTWARE SYSTEMS.— 
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