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 129B 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 or a 
qualified safe harbor mortgage. 
‘‘(2) REBUTTABLE
PRESUMPTION.—Any pre-
sumption established under paragraph (1) with re-
spect to any residential mortgage loan shall be re-
buttable only— 
‘‘(A) against the creditor of such loan; and 
‘‘(B) if such loan is a qualified safe harbor 
mortgage.
‘‘(3) DEFINITIONS.—For purposes of this sec-
tion the following definitions shall apply: 
‘‘(A) MOST RECENT CONVENTIONAL MORT-
GAGE RATE.—The term ‘most recent conven-
tional mortgage rate’ means the contract inter-
est rate on commitments for fixed-rate first 
mortgages most recently published in the Fed-
eral Reserve Statistical Release on selected in-
terest rates (daily or weekly), and commonly re-
ferred to as the H.15 release (or any successor 
publication), in the week preceding a date of de-
termination for purposes of applying this sub-
section. 
‘‘(B) QUALIFIED
MORTGAGE.—The term 
‘qualified mortgage’ means— 
‘‘(i) any residential mortgage loan 
that constitutes a first lien on the dwelling 
or real property securing the loan and ei-
ther— 
‘‘(I) has an annual percentage 
rate that does not equal or exceed the 
yield on securities issued by the Sec-
retary of the Treasury under chapter 
31 of title 31, United States Code, 
that bear comparable periods of matu-
rity by more than 3 percentage points; 
or 
‘‘(II) has an annual percentage 
rate that does not equal or exceed the 
most recent conventional mortgage 
rate, or such other annual percentage 
rate as may be established by regula-
tion under paragraph (6), by more 
than 175 basis points; 
‘‘(ii) any residential mortgage loan 
that is not the first lien on the dwelling or 
real property securing the loan and ei-
ther— 
‘‘(I) has an annual percentage 
rate that does not equal or exceed the 
yield on securities issued by the Sec-
retary of the Treasury under chapter 
31 of title 31, United States Code, 
that bear comparable periods of matu-
rity by more than 5 percentage points; 
or 
‘‘(II) has an annual percentage 
rate that does not equal or exceed the 
most recent conventional mortgage 
rate, or such other annual percentage
rate as may be established by regula-
tion under paragraph (6), by more 
than 375 basis points; 
‘‘(iii) a loan made or guaranteed by 
the Secretary of Veterans Affairs; and 
‘‘(iv) a mortgage insured under title 
II of the National Housing Act (12 U.S.C. 
1707 et seq.). 
‘‘(C) QUALIFIED
SAFE
HARBOR
MORT-
GAGE.—The term ‘qualified safe harbor mort-
gage’ means any residential mortgage loan— 
‘‘(i) for which the income and finan-
cial resources of the consumer are verified 
and documented; 
‘‘(ii) for which the residential mort-
gage loan underwriting process is based on 
the fully-indexed rate, and takes into ac-
count all applicable taxes, insurance, and 
assessments; 
‘‘(iii) which does not provide for a re-
payment schedule that results in negative 
amortization at any time; 
‘‘(iv) meets such other requirements 
as may be established by regulation; and
‘‘(v) for which any of the following 
factors apply with respect to such loan: 
‘‘(I) 
The 
periodic 
payment 
amount for principal and interest are 
fixed for a minimum of 5 years under 
the terms of the loan. 
‘‘(II) In the case of a variable 
rate loan, the annual percentage rate 
varies based on a margin that is less 
than 3 percent over a single generally 
accepted interest rate index that is 
the basis for determining the rate of 
interest for the mortgage. 
‘‘(III) The loan does not cause 
the consumer’s total monthly debts, 
including amounts under the loan, to 
exceed a percentage established by 
regulation of his or her monthly gross 
income or such other maximum per-
centage of such income as may be pre-
scribed by regulation under paragraph 
(6). 
‘‘(4) DETERMINATION
OF
COMPARISON
TO 
TREASURY SECURITIES.—
‘‘(A) IN
GENERAL.—Without regard to 
whether a residential mortgage loan is subject 
to or reportable under the Home Mortgage Dis-
closure Act of 1975 and subject to subpara-
graph (B), the difference between the annual 
percentage rate of such loan and the yield on 
securities issued by the Secretary of the Treas-
ury under chapter 31 of title 31, United States 
Code, having comparable periods of maturity 
shall be determined using the same procedures 
and methods of calculation applicable to loans 
that are subject to the reporting requirements 
under the Home Mortgage Disclosure Act of 
1975. 
‘‘(B) 
DATE
OF
DETERMINATION
OF 
YIELD.—The yield on the securities referred to 
in subparagraph (A) shall be determined, for 
purposes of such subparagraph and paragraph 
(3) with respect to any residential mortgage 
loan, as of the 15th day of the month preceding 
the month in which a completed application is 
submitted for such loan. 
‘‘(5) 
APR 
IN
CASE
OF
INTRODUCTORY 
OFFER.—For purposes of making a determination of 
whether a residential mortgage loan that provides
for a fixed interest rate for an introductory period 
and then resets or adjusts to a variable rate is a 
qualified mortgage, the determination of the annual 
percentage rate, as determined in accordance with 
regulations prescribed by the Board under section 
107, shall be based on the greater of the introduc-
tory rate and the fully indexed rate of interest. 
‘‘(6) 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.—The Federal banking agencies may 
jointly prescribe regulations that revise, add to, 
or subtract from the criteria that define a quali-
fied mortgage and a qualified safe harbor mort-
gage to the extent necessary and appropriate to 
effectuate the purposes of this subsection, to 
prevent circumvention or evasion of this sub-
section, or to facilitate compliance with this 
subsection. 
‘‘(7) RULE OF CONSTRUCTION.—No provision 
of this subsection may be construed as implying that 
a residential mortgage loan may be presumed to vio-
late subsection (a) or (b) if such loan is not a quali-
fied mortgage or a qualified safe harbor mortgage.’’. 
SEC. 204. LIABILITY. 
Section 129B 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 (7), 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 provides 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 shall be liable under paragraph (2) 
with respect to such loan if— 
‘‘(A) no later than 90 days after the re-
ceipt 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); or 
‘‘(B) each of the following conditions are 
met: 
‘‘(i) The assignee or securitizer— 
‘‘(I) has a policy against buying 
residential mortgage loans other than 
qualified mortgages or qualified safe 
harbor mortgages (as defined in sub-
section (c)); 
‘‘(II) the policy is intended to 
verify seller or assignor compliance 
with the representations and warran-
ties required under clause (ii); and 
‘‘(III) in accordance with regula-
tions which the Federal banking agen-
cies and the Securities and Exchange 
Commission shall jointly prescribe, ex-
ercises reasonable due diligence to ad-
here to such policy in purchasing resi-
dential 
mortgage 
loans, 
including 
through adequate, thorough, and con-
sistently applied sampling procedures. 
‘‘(ii) The contract under which such 
assignee or securitizer acquired the resi-
dential mortgage loan from a seller or as-
signor of the loan contains representations 
and warranties that the seller or as-
signor— 
‘‘(I) is not selling or assigning 
any residential mortgage loan which is 
not a qualified mortgage or a qualified 
safe harbor mortgage; or 
‘‘(II) is a beneficiary of a rep-
resentation and warranty from a pre-
vious seller or assignor to that effect, 
and the assignee or securitizer in good 
faith takes reasonable steps to obtain the 
benefit of such representation or warranty. 
‘‘(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 or liquidating agent appointed, a con-
sumer may maintain a civil action against an 
assignee to cure, but not rescind, 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 
or liquidating agents appointed, the consumer 
may maintain the civil action referred to in sub-
paragraph (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 
would have satisfied the requirements of subsections 
(a) and (b) if the loan had contained such terms as 
of the origination of the loan and the payment of 
such additional costs as the obligor may have in-
curred as a result of the violation and in connection
with obtaining a cure of the loan, including a rea-
sonable 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) POOLS
AND
INVESTORS
IN
POOLS
EX-
CLUDED.—In the case of residential mortgage 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 representing inter-
ests in such pools including through a securitization 
vehicle, the terms ‘assignee’ and ‘securitizer’, as 
used in this section, do not include 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.’’. 
SEC. 205. DEFENSE TO FORECLOSURE. 
Section 129B of the Truth in Lending Act is amend-
ed by inserting after subsection (d) (as added by section 
204) the following new subsection:
‘‘(e) 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, to effect a rescission or cure.’’. 
SEC. 206. ADDITIONAL STANDARDS AND REQUIREMENTS. 
(a) IN GENERAL.—Section 129B of the Truth in 
Lending Act is amended by inserting after subsection (e) 
(as added by section 205) the following new subsections: 
‘‘(f) PROHIBITION ON CERTAIN PREPAYMENT PEN-
ALTIES.— 
‘‘(1) PROHIBITED ON CERTAIN LOANS.—A resi-
dential mortgage loan that is not a qualified mort-
gage (as defined in subsection (c)) may not contain 
terms under which a consumer must pay a prepay-
ment penalty for paying all or part of the principal 
after the loan is consummated. 
‘‘(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) PROHIBITED AFTER INITIAL PERIOD ON 
LOANS WITH A RESET.—A qualified mortgage with 
a fixed interest rate for an introductory period that 
adjusts or resets after such period may not contain 
terms under which a consumer must pay a prepay-
ment penalty for paying all or part of the principal 
after the beginning of the 3-month period ending on 
the date of the adjustment or reset.
‘‘(4) 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. 
‘‘(g) 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 and at no 
additional cost to the consumer, the creditor receives 
no direct or indirect compensation in connection 
with the unemployment insurance premiums, and 
the unemployment insurance premiums are paid pur-
suant to another insurance contract and not paid to 
an affiliate of the creditor. 
‘‘(h) 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. 
‘‘(i) DUTY OF SECURITIZER TO RETAIN ACCESS TO 
LOANS.—Any securitizer shall reserve the right and pre-
serve an ability, in any document or contract establishing 
any pool of assets that includes any residential mortgage 
loan— 
‘‘(1) to identify and obtain access to any such 
loan in the pool; and 
‘‘(2) to provide for and obtain a remedy under 
this title for the obligor under any such loan.
‘‘(j) EFFECT
OF FORECLOSURE
ON PREEXISTING 
LEASE.— 
‘‘(1) IN GENERAL.—In the case of any fore-
closure on any dwelling or residential real property 
securing an extension of credit made under a con-
tract entered into after the date of the enactment of 
the Mortgage Reform and Anti-Predatory Lending 
Act of 2007, any successor in interest in such prop-
erty pursuant to the foreclosure shall assume such 
interest subject to— 
‘‘(A) the provision, by the successor in in-
terest, of a notice to vacate to any bona fide 
tenant at least 90 days before the effective date 
of the notice to vacate; and 
‘‘(B) the rights of any bona fide tenant, as 
of the date of such notice of foreclosure— 
‘‘(i) under any bona fide lease entered 
into before the notice of foreclosure to oc-
cupy the premises until the end of the re-
maining term of the lease or the end of the 
6-month period beginning on the date of 
the notice of foreclosure, whichever occurs 
first, subject to the receipt by the tenant 
of the 90-day notice under subparagraph 
(A); or
‘‘(ii) without a lease or with a lease 
terminable at will under State law, subject 
to the receipt by the tenant of the 90-day 
notice under subparagraph (A). 
‘‘(2) BONA
FIDE
LEASE
OR
TENANCY.—For 
purposes of this section, 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; or 
‘‘(C) the lease or tenancy requires the re-
ceipt of rent that is not substantially less than 
fair market rent for the property. 
‘‘(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. 
‘‘(l) ANNUAL CONTACT INFORMATION.—At least 
once annually and whenever there is a change in owner-
ship of a residential mortgage loan, the servicer with re-
spect to a residential mortgage loan shall provide a written 
notice to the consumer identifying the name of the creditor
or any assignee or securitizer who should be contacted by 
the consumer for any reason concerning the consumer’s 
rights with respect to the loan.’’. 
(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.’’. 
SEC. 207. RULE OF CONSTRUCTION. 
Except as otherwise expressly provided in section 
129A or 129B of the Truth in Lending Act (as added by 
this Act), no provision of such section 129A or 129B 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.—Section 129B(d) of the Truth in 
Lending Act (as added by section 204) shall supersede any 
State law or application thereof that provides additional 
remedies 
against 
any 
assignee, 
securitizer, 
or 
securitization vehicle, and the remedies described in such
section shall constitute the sole remedies against any as-
signee, securitizer, or securitization vehicle, for a violation 
of subsection (a) or (b) of section 129B 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 benefit) 
of such section 129B. 
(b) RULES OF CONSTRUCTION.—No provision of this 
section shall be construed as limiting— 
(1) the application of any State law against a 
creditor; 
(2) the availability of remedies based upon 
fraud, misrepresentation, deception, false adver-
tising, or civil rights laws— 
(A) against any assignee, securitizer, or 
securitization vehicle for its own conduct relat-
ing to the making of a residential mortgage 
loan to a consumer; or 
(B) against any assignee, securitizer, or 
securitization vehicle in the sale or purchase of 
residential mortgage loans or securities; or 
(3) the application of any other State law 
against any assignee, securitizer, or securitization 
vehicle except as specifically provided in subsection 
(a) of this section.
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’’; 
(3) by striking ‘‘$200’’ and inserting ‘‘$400’’; 
(4) 
by 
striking 
‘‘$2,000’’ 
and 
inserting 
‘‘$4,000’’; and 
(5) 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: 
‘‘(j) 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, the creditor or servicer 
of such loan shall provide a written notice, separate and 
distinct from all other correspondence 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. REQUIRED DISCLOSURES. 
(a) ADDITIONAL INFORMATION.—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 an extension of credit that 
is secured by the dwelling of a consumer, under 
which the annual rate of interest is variable, or with 
respect to which the regular payments may other-
wise be variable, in addition to the other disclosures 
required under this subsection, the disclosures pro-
vided under this subsection shall state the maximum 
amount of the regular required payments on the 
loan, based on the maximum interest rate allowed, 
introduced with the following language in con-
spicuous type size and format: ‘Your payment can 
go as high as $ll’, the blank to be filled in with 
the maximum possible payment amount.
SEC. 215. AUTHORIZATION OF APPROPRIATIONS. 
For fiscal years 2008, 2009, 2010, 2011, and 2012, 
there are authorized to be appropriated to the Attorney 
General a total of— 
(1) $31,250,000 to support the employment of 
30 additional agents of the Federal Bureau of Inves-
tigation and 2 additional dedicated prosecutors at 
the Department of Justice to coordinate prosecution 
of mortgage fraud efforts with the offices of the 
United States Attorneys; and 
(2) $750,000 to support the operations of inter-
agency task forces of the Federal Bureau of Inves-
tigation in the areas with the 15 highest concentra-
tions of mortgage fraud. 
SEC. 216. 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. 217. 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 homebuyers and mortgage lending, in-
cluding the effect—