‘‘(B) in writing at any time during the 
term of the loan, including by conveyance of 
signed authorization form from the approved 
housing counseling agency of the borrower’s 
choice, which shall be transmitted by such agen-
cy to the mortgagee or servicer. 
‘‘(3) REFERRAL RELATIONSHIP.—A mortgagee 
or servicer may establish a referral relationship with 
a housing counseling agency approved by the Sec-
retary, but such relationship may not be exclusive 
and the mortgagee or servicer may not refuse to re-
spond to qualified written requests and other com-
munications from another housing counseling agency 
approved by the Secretary or any other agent that 
is authorized by the borrower. 
‘‘(j) PROHIBITION ON WAIVER OF RIGHTS.—A mort-
gagee for a covered federally related mortgage loan may 
not— 
‘‘(1) when engaging in loss mitigation activities 
pursuant to subsection (a), require a borrower to 
limit or waive the rights of such borrower to bring 
any claims, defenses, demands, proceedings, actions, 
or causes of action against the mortgagee or servicer 
as a condition of accepting an offer of any loss miti-
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gation activities, including any activities under sub-
section (c); or 
‘‘(2) require the borrower to agree to arbitra-
tion as a condition of receiving loan modification ac-
tivities. 
Any waiver or arbitration provision in a written agreement 
prohibited under this subsection shall be void and unen-
forceable. 
‘‘(k) REPORTING
ON LOSS MITIGATION ACTIVI-
TIES.— 
‘‘(1) IN GENERAL.—Each mortgagee or servicer 
of a covered federally related mortgage loan shall re-
port monthly and comprehensively to the Comp-
troller of the Currency and to the Director of the 
Office of Thrift Supervision on the extent and scope 
of the loss mitigation activities of the mortgagee. 
Each such report shall include data on loss mitiga-
tion activities disaggregated according to the cat-
egories specified in each of the subparagraphs of 
paragraphs (6), (7), and (8) of subsection (c), any 
loss mitigation activities not covered by such cat-
egories, the number of loans receiving loss mitiga-
tion that have become performing loans, the number 
of loans receiving loss mitigation that have pro-
ceeded to foreclosure, the total number of fore-
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closures initiated during the reporting period, and 
such other information as the Comptroller or Direc-
tor determines to be relevant. 
‘‘(2) COMPILATION OF AGGREGATE DATA.— 
‘‘(A) COMMENCEMENT.—Beginning with 
data for calendar year 2009, the Comptroller of 
the Currency and the Director of the Office of 
Thrift Supervision shall, in consultation, with 
the Chairman of the Federal Reserve compile 
for each year, for each primary metropolitan 
statistical area, metropolitan statistical area, 
and consolidated metropolitan statistical area 
that is not comprised of designated primary 
metropolitan statistical areas, aggregate data 
by census tract for each mortgagee or servicer 
that is required to disclose data under this sub-
section. 
‘‘(B) SCOPE.—Each such report shall in-
clude loan-level disclosures of outstanding loans 
with information related to— 
‘‘(i) the location of the security prop-
erty; 
‘‘(ii) the loan amount; 
‘‘(iii) the value of such security prop-
erty; 
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‘‘(iv) the age of borrower or mort-
gagee; 
‘‘(v) the date on which such loan was 
originated; 
‘‘(vi) the type of entity owning such 
loan; 
‘‘(vii) the performance status of such 
loan; 
‘‘(viii) the monetary losses incurred by 
the investor in such loan in connection 
with the termination of such loan; 
‘‘(ix) the loss mitigation activities pro-
vided in reference to such loan according 
to the categories specified in each of the 
subparagraphs of paragraphs (6), (7), and 
(8) of subsection (c); 
‘‘(x) the loss mitigation activities pro-
vided in reference to such loan that are not 
covered by such categories; 
‘‘(xi) the magnitude of such modifica-
tion or loss mitigation activities; 
‘‘(xii) the dates of consideration, ap-
proval, or rejection of such loss mitigation 
activities; 
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‘‘(xiii) the reasons for such rejection; 
and 
‘‘(xiv) any other relevant information. 
Such reports shall also include information 
identical to that required upon loan origination 
by the Home Mortgage Disclosure Act of 1975. 
‘‘(C) DATA TABLES.—The Comptroller and 
the Director shall also produce tables indicating 
for each primary metropolitan statistical area, 
metropolitan statistical area, and consolidated 
metropolitan statistical area that is not com-
prised of designated primary metropolitan sta-
tistical areas, aggregate loss mitigation patterns 
for various categories of census tracts grouped 
according to location, age of housing stock, in-
come level, and racial and ethnic characteris-
tics. 
‘‘(D) AVAILABILITY TO PUBLIC.—The data 
and tables required pursuant to this paragraph 
shall be made available to the public not later 
than 6 months after such data is reported pur-
suant to subparagraph (A). 
‘‘(l) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
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‘‘(1) ADJUSTABLE RATE MORTGAGE.—The term 
‘adjustable rate mortgage’ means, with respect to a 
federally related mortgage loan, that the loan terms 
provide for the rate of interest charged under the 
loan to reset or adjust at least once during the term 
of the loan. 
‘‘(2) COVERED
FEDERALLY
RELATED
MORT-
GAGE
LOAN.—The term ‘covered federally related 
mortgage loan’ means a federally related mortgage 
loan described in subsection (a). 
‘‘(3) 
MORTGAGEE.—The 
term 
‘mortgagee’ 
means, with respect to a federally related mortgage 
loan, the original lender under the loan and any af-
filiates, agents, subsidiaries, successors, or assignees 
of such lender, and any subsequent purchaser, trust-
ee, or transferee of the loan or credit instrument 
issued by such lender. 
‘‘(4) SERVICER.—The term ‘servicer’ has the 
meaning given such term in section 6(i). 
‘‘(m) REPORT TO CONGRESS.—Not later than the ex-
piration of the 12-month period beginning upon the date 
of the enactment of the Foreclosure Prevention and Sound 
Mortgage Servicing Act of 2009, and of each consecutive 
12-month period thereafter, the Comptroller of the Cur-
rency and the Director of the Office of Thrift Supervision 
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shall provide a report to the Congress on the extent of 
compliance by mortgagees and servicers with the require-
ments of this section and paragraphs (4) through (7) of 
section 6(e).’’. 
(b) DUTY OF LOAN SERVICER TO RESPOND TO BOR-
ROWER INQUIRIES.—Section 6(e)(1)A) of the Real Estate 
Settlement 
Procedures 
Act 
of 
1974 
(12 
U.S.C. 
2605(e)(1)(A)) is amended by striking ‘‘borrower)’’ and 
inserting ‘‘(borrower, including a housing counseling agen-
cy approved by the Secretary)’’. 
(c) COMPREHENSIVE DISCLOSURE AND FAIR PROC-
ESSING
OF QUALIFIED WRITTEN REQUESTS.—Section 
6(e) of the Real Estate Settlement Procedures Act of 1974 
(12 U.S.C. 2605(e)) is amended by adding at the end the 
following new paragraphs: 
‘‘(4) PROVISION OF INFORMATION REGARDING 
MORTGAGE.—The servicer of a covered federally re-
lated mortgage loan (as such term is defined in sec-
tion 6A(l)) shall have available at all times the fol-
lowing information, which shall be provided to the 
borrower or borrower’s agent in response to a quali-
fied written request by the borrower submitted in ac-
cordance with the deadlines set forth in paragraph 
(1)(A): 
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‘‘(A) Whether the account relating to such 
loan is current, or if not, the date the account 
went into default. 
‘‘(B) The current balance due on the loan, 
including the amount of principal due, an 
itemization of all fees due, an explanation of the 
escrow balance, and whether there are any es-
crow deficiencies or shortages. 
‘‘(C) A full payment history that shows, in 
a clear and easily understandable manner, all of 
the activity on the loan since the origination of 
the loan, including the escrow account, and the 
application of payments made under the loan. 
‘‘(D) The initial terms of the loan. 
‘‘(E) A copy of the original note and secu-
rity instrument. 
‘‘(F) Identification of the owner of the 
mortgage note and any investors in the note. 
‘‘(G) Any documents that limit, explain, or 
modify the loss mitigation activities offered by 
the servicer. 
‘‘(H) Any other information requested by 
the borrower that is reasonably related to loss 
mitigation activities. 
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‘‘(5) PROHIBITION OF ‘WRONG DOOR’ ACTIONS 
FOR QUALIFIED WRITTEN REQUESTS.—All written 
communications from the mortgagee or servicer of a 
federally related mortgage loan to the borrower shall 
include the address for receipt and handling of 
qualified written requests. Any qualified written re-
quest received by the mortgagee or servicer shall be 
valid notwithstanding receipt at any address other 
than that designated by the mortgagee or servicer 
for receipt and handling of such requests. 
‘‘(6) PROHIBITION OF FEE FOR RESPONSE TO 
QUALIFIED WRITTEN REQUESTS.—A mortgagee or 
servicer for a federally related mortgage loan may 
not impose any fee for, or on account of, the prepa-
ration and submission by such mortgagee or servicer 
of any response or statement required by this sub-
section. 
‘‘(7) PROHIBITION OF FORECLOSURE PENDING 
DISCLOSURE.—In the case of a covered federally re-
lated mortgage loan (as such term is defined in sec-
tion 6A(l)), no foreclosure proceeding may be initi-
ated or continued against the borrower or the prin-
cipal residence of the borrower during any period in 
which a qualified written request under this sub-
section is pending and the mortgagee or servicer has 
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not complied with the requirements of this sub-
section regarding the request.’’. 
(d) DAMAGES AND COSTS.—Section 6(f) of the Real 
Estate Settlement Procedures Act of 1974 (12 U.S.C. 
2605(f)) is amended— 
(1) in the matter preceding paragraph (1), by 
inserting ‘‘or of section 6A’’ after ‘‘this section’’; 
(2) in paragraphs (1)(B) and (2)(B)— 
(A) by striking ‘‘a pattern or practice’’ 
each place such term appears; and 
(B) by striking ‘‘$1,000’’ each place such 
term appears and inserting ‘‘$2,000 for each 
violation’’; and 
(3) 
in 
paragraph 
(2)(B)(i), 
by 
striking 
‘‘$500,000’’ and inserting ‘‘$1,000,000’’. 
(e) CONFORMING AMENDMENT.—Section 17 of the 
Real Estate Settlement Procedures Act of 1974 (12 
U.S.C. 2615) is amended by striking ‘‘Nothing’’ and in-
serting ‘‘Except as provided in sections 6(e)(7) and 6A, 
nothing’’. 
SEC. 3. DUTIES OF LENDERS AND LOAN SERVICERS. 
The Truth in Lending Act is amended by inserting 
after section 129A (15 U.S.C. 1639a) the following new 
section: 
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‘‘SEC. 129B. DUTIES OF LENDERS AND LOAN SERVICERS. 
‘‘(a) STANDARD OF CARE.— 
‘‘(1) AGENCY RELATIONSHIP.—In the case of 
any home loan serviced by a loan servicer on behalf 
of a lender, the loan servicer shall be deemed an 
agent of that lender, and shall be subject to all re-
quirements of agents otherwise applicable under 
Federal or State law. 
‘‘(2) FAIR
DEALING.—Each lender and loan 
servicer shall, in addition to the duties imposed by 
otherwise applicable provisions of Federal or State 
law, with respect to each home mortgage loan, in-
cluding any home mortgage loan in default or in 
which the homeowner has filed for bankruptcy— 
‘‘(A) act with reasonable skill, care, dili-
gence, and in accordance with the highest 
standards; and 
‘‘(B) act in good faith and with fair deal-
ing in any transaction, practice, or course of 
business associated with the home mortgage 
loan. 
‘‘(3) TRAINING AND COMPETENCY.—Each lend-
er and loan servicer shall institute training, proce-
dures, and standards to ensure that borrowers are 
treated fairly and competently. 
‘‘(b) RULES FOR ASSESSMENT OF FEE.— 
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‘‘(1) IN
GENERAL.—No home mortgage loan 
contract may require, nor may any lender or loan 
servicer assess or receive, any fees or charges other 
than interest, late fees as specifically authorized in 
this section, or fees assessed for nonsufficient funds, 
and 
charges 
allowed 
pursuant 
to 
subsection 
(h)(1)(B), until the home mortgage loan is the sub-
ject of a foreclosure proceeding and the debt on such 
loan has been accelerated. 
‘‘(2) FEE LIMITATIONS.—Any permissible fee or 
charge described under paragraph (1) shall be— 
‘‘(A) reasonable; 
‘‘(B) for services actually rendered; and 
‘‘(C) specifically authorized by the terms of 
the home mortgage loan contract and State law. 
‘‘(3) ASSESSMENT AND DISCLOSURE.— 
‘‘(A) IN GENERAL.—Any permissible fee or 
charge described under paragraph (1) shall 
be— 
‘‘(i) assessed not later than 30 days 
after the date on which the fee was ac-
crued; and 
‘‘(ii) explained clearly and conspicu-
ously in the next monthly accounting state-
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ment provided to the borrower designated 
in the home mortgage loan contract. 
‘‘(B) FAILURE TO COMPLY.—Failure by a 
lender or loan servicer to comply with the re-
quirements set forth under subparagraph (A) 
shall result in the waiver of the fee. 
‘‘(4) REQUIRED STATEMENTS.—Each month a 
lender or loan servicer shall provide to each borrower 
designated in a home mortgage loan contract en-
tered into by such lender or loan servicer a periodic 
statement that clearly and in plain English ex-
plains— 
‘‘(A) the application of the prior month’s 
payment by the borrower, including the alloca-
tion of the payment to interest, principal, es-
crow, and fees; 
‘‘(B) the status of the escrow account held 
on behalf of the borrower, including the pay-
ments into and from the escrow account; and 
‘‘(C) the assessment of fees accruing in the 
previous month, including the reason that such 
fee accrued and the date such fee accrued. 
‘‘(c) MAXIMUM ALLOWABLE LATE FEES CHARGED 
AFTER LOAN CLOSING.— 
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‘‘(1) IN GENERAL.—No lender or loan servicer 
may impose a charge or fee for late payment of any 
amount due on a home mortgage loan— 
‘‘(A) unless the home mortgage loan con-
tract specifically authorizes the charge or fee; 
‘‘(B) in an amount in excess of 5 percent 
of the amount of the payment past due; 
‘‘(C) before the end of the 15-day period 
after the date the payment is due, or in the 
case of a home mortgage loan on which interest 
on each installment is paid in advance, before 
the end of the 30-day period after the date the 
payment is due; or 
‘‘(D) more than once with respect to a sin-
gle late payment. 
‘‘(2) RULE OF CONSTRUCTION.—For purposes 
of this subsection, payments on any amount due on 
a home mortgage loan shall be applied first to cur-
rent installments, then to delinquent payments, and 
then to delinquency charges. 
‘‘(3) COORDINATION WITH SUBSEQUENT LATE 
FEES.—If a home loan mortgage payment is other-
wise a full payment for the applicable period and is 
paid on its due date or within an applicable grace 
period, and the only delinquency or insufficiency of 
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payment is attributable to a late fee or delinquency 
charge assessed on an earlier payment, no late fee 
or delinquency charge may be imposed on such pay-
ment. 
‘‘(d) PAYOFF STATEMENTS.— 
‘‘(1) PROHIBITION ON FEES.— 
‘‘(A) IN
GENERAL.—No lender or loan 
servicer (or any third party acting on behalf of 
such lender or loan servicer) may charge a fee 
for transmitting to any borrower the amount 
due to pay off the outstanding balance on the 
home mortgage loan of such borrower. 
‘‘(B) EXCEPTION.—After a lender or loan 
servicer (or any third party acting on behalf of 
such lender or loan servicer) has provided the 
information described in subparagraph (A) 
without charge on 4 occasions during a cal-
endar year, the lender or loan servicer (or any 
third party acting on behalf of such lender or 
loan servicer) may thereafter charge a reason-
able fee for providing such information during 
the remainder of the calendar year. 
‘‘(2) TIMING.—The information described in 
subparagraph (A) shall be provided to the borrower 
within a reasonable period of time but in any event 
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not more than 5 business days after the receipt of 
the request by the lender or loan servicer. 
‘‘(e) CIVIL LIABILITY.— 
‘‘(1) IN GENERAL.—Any lender or loan servicer 
who fails to comply with any requirement of this sec-
tion with respect to a borrower designated in a home 
mortgage loan contract, is liable to such borrower in 
an amount equal to the sum of— 
‘‘(A) any actual damages sustained by 
such borrower as a result of the failure; 
‘‘(B) an amount not less than $5,000; or 
‘‘(C) in the case of any successful action to 
enforce the foregoing liability the costs of the 
action, together with a reasonable attorney’s fee 
as determined by the court. 
‘‘(2) JURISDICTION.—Any action by a borrower 
for a failure to comply with the requirements of this 
section may be brought in any United States district 
court, or in any other court of competent jurisdic-
tion, not later than 3 years from the date of the oc-
currence of such violation. This subsection does not 
bar a person from asserting a violation of this sec-
tion in an action by a lender or loan servicer to col-
lect the debt owed on a home mortgage loan, or fore-
close upon the home securing a home mortgage loan, 
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or to stop a foreclosure upon that home, which was 
brought more than 3 years after the date of the oc-
currence of the violation as a matter of defense by 
recoupment or set-off in such action. An action 
under this section does not create an independent 
basis for removal of an action to a United States 
district court. 
‘‘(3) STATE
ATTORNEY
GENERAL
ENFORCE-
MENT.—An action to enforce a violation of this sec-
tion may also be brought by the appropriate State 
attorney general in any appropriate United States 
district court, or any other court of competent juris-
diction, not later than 3 years after the date on 
which the violation occurs. An action under this sec-
tion does not create an independent basis for re-
moval of an action to a United States district court. 
‘‘(f) DEFINITIONS.—In this section, the following 
definitions shall apply: 
‘‘(1) LENDER.—The term ‘lender’ has the same 
meaning as in section 3500.2 of title 24, Code of 
Federal Regulations, as in effect on the date of en-
actment of this section. 
‘‘(2) LOAN SERVICER.—The term ‘loan servicer’ 
has the same meaning as the term ‘servicer’ in sec-
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tion 6(i)(2) of the Real Estate Settlement Proce-
dures Act of 1974 (12 U.S.C. 2605(i)(2)).’’. 
SEC. 4. NOTICE OF TRANSFER OF LOAN SERVICING. 
Paragraph (3) of section 6(b) of the Real Estate Set-
tlement Procedures Act of 1974 (12 U.S.C. 2605(b)(3)) 
is amended by adding at the end the following new sub-
paragraph: 
‘‘(H) A statement explaining— 
‘‘(i) whether the account of the bor-
rower is current, or if the account is not 
current, an explanation of the reason and 
date the account went into default; 
‘‘(ii) the current balance due on the 
loan, including the principal due, an expla-
nation of the escrow balance, and whether 
there are any escrow deficiencies or short-
ages; and 
‘‘(iii) a full payment history of the 
borrower which shows in a clear and easily 
understandable manner, all of the activity 
on the home mortgage loan since the origi-
nation of the loan or the prior transfer of 
servicing, including the escrow account, 
and the application of payments.’’. 
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SEC. 5. SERVICER COMPENSATION. 
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 Development and the 
Federal banking regulatory agencies shall, by regulation, 
establish and implement procedures and standards de-
signed to ensure that the means and manner of compensa-
tion of servicers of federally related mortgage loans is con-
sistent with the purposes of this Act and the amendments 
made by this Act, and to the extent possible, does not pro-
vide incentives for foreclosure of such mortgages or dis-
incentives to engaging in reasonable loss mitigation activi-
ties for such mortgages. 
SEC. 6. UNENFORCEABILITY OF POOLING AND SERVICING 
AGREEMENTS PROHIBITING MODIFICATION. 
Any provision of any investment contract entered into 
after the date of the enactment of this Act between a 
servicer of pooled residential mortgages and an investor 
that is inconsistent with this Act or the amendments made 
by this Act shall be considered to be contrary to public 
policy and void and enforceable. 
SEC. 7. PILOT PROGRAM FOR COMMUNITY BANKS. 
The Secretary of the Treasury and the Secretary of 
Housing and Urban Development shall jointly carry out 
a pilot program to encourage the Federal National Mort-
gage Association, the Federal Home Loan Mortgage Cor-
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poration, and the Federal Home Loan Banks to enter into 
contracts for insured community development financial in-
stitutions (as such term is defined in section 103 of the 
Community Development Banking and Financial Institu-
tions Act of 1994 (12 U.S.C. 4702)), including minority- 
owned such institutions, to provide mortgage servicing 
with respect to mortgages owned or securitized by such 
Government-sponsored enterprises. 
Æ 
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