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(A) by striking ‘‘section 129’’ the first 
place such terms appears and inserting ‘‘sub-
section (f) and sections 129 and 129A’’; and 
(B) by inserting ‘‘, or 129A’’ after ‘‘section 
129’’ each place such term appears after the 
first place; and 
(4) in subsection (d), by striking ‘‘sections 125, 
130, and 166’’ and inserting ‘‘subsection (f) and 
sections 125, 130, and 166’’. 
SEC. 107. CLARIFICATION OF STATE ENFORCEMENT AU-
THORITY. 
Subsection (e) of section 130 of Truth in Lending 
Act (15 U.S.C. 1640(e)) (as amended by section 105(d) 
of this Act) is amended— 
(1) by striking ‘‘(e) Except as provided in the 
subsequent sentence, any action’’ and inserting ‘‘(e) 
JURISDICTION; STATUTE OF LIMITATIONS.— 
‘‘(1) IN GENERAL.—Except as provided in the 
subsequent sentence, any action’’; and 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) CLARIFICATION
OF
PRIMARY
ENFORCE-
MENT AUTHORITY WITH RESPECT TO STATE-CHAR-
TERED OR LICENSED ENTITIES.—In addition to the 
authority provided under subsection (1), no provision
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of this title shall be construed as limiting the au-
thority of any State to enforce the provisions of this 
title, as the primary enforcement authority, with re-
gard to any person licensed or chartered by such 
State.’’. 
SEC. 108. REQUIREMENTS FOR HOME LOANS. 
(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. Requirements for home loans 
‘‘(a) RESTRICTIONS ON PREPAYMENT PENALTIES.— 
Except as otherwise provided by this title, any home loan 
may contain— 
‘‘(1) a provision for the imposition of a prepay-
ment penalty for the prepayment of the credit trans-
action, only if— 
‘‘(A) the penalty cannot be imposed if the 
debt is accelerated solely as a result of default 
or any other breach of the loan documents; 
‘‘(B) the penalty does not apply after the 
end of the 36-month period beginning on the 
date the transaction is consummated, or in the 
case of an adjustable rate mortgage (ARM) 
where the first rate adjustment date is earlier
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than the end of such 36-month period, after the 
adjustment date; 
‘‘(C) the consumer is offered a choice of 
another similar loan without a prepayment pen-
alty and is advised of the lower rate or other fi-
nancial benefit the consumer will receive, and 
the consequences the consumer might encoun-
ter, for accepting a loan with the prepayment 
penalty; and 
‘‘(D) the penalty does not exceed an 
amount equal to the 21⁄2 percent of the original 
principal amount of the loan. 
‘‘(b) SINGLE PREMIUM CREDIT INSURANCE PROHIB-
ITED.— 
‘‘(1) IN GENERAL.—No creditor may finance, 
directly or indirectly, in connection with any home 
loan, any credit life, credit disability, credit unem-
ployment or credit property insurance, or any other 
credit insurance, or any payments directly or indi-
rectly for any debt cancellation or suspension agree-
ment or contract, except that insurance premiums or 
debt cancellation or suspension fees calculated and 
paid in full on a monthly basis shall not be consid-
ered financed by the creditor.
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‘‘(2) CREDIT INSURANCE DEFINED.—For pur-
poses of this subsection, the term ‘credit insurance’ 
means a policy of insurance that insures, guarantees 
or indemnifies the creditor, as the primary bene-
ficiary, for the repayment of the outstanding balance 
of the loan against death, illness, accident, disability, 
loss of property, or unemployment of the consumer. 
‘‘(c) LATE FEES PROHIBITED.— 
‘‘(1) IN GENERAL.—Except as otherwise pro-
vided by this title, any home loan may contain a pro-
vision for the imposition of unanticipated late pay-
ment, only if the late-payment fee— 
‘‘(A) is not in excess of 5 percent of the 
amount of the scheduled payment past due; 
‘‘(B) may only be assessed on a payment 
past due for 15 days or more; and 
‘‘(C) may not be charged more than once 
with respect to a single late payment.’’. 
‘‘(2) LIMITATIONS.—If a payment is otherwise 
a full payment for the applicable period and is paid 
on its due date or within an applicable grace period, 
and the only delinquency or insufficiency of payment 
is attributable to any late fee or delinquency charge 
assessed on any earlier payment, no late fee or delin-
quency charge may be imposed on such payment.
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‘‘(d) STEERING PROHIBITED.— 
‘‘(1) CREDITORS.— 
‘‘(A) IN GENERAL.—A creditor who origi-
nates a home loan shall not knowingly or inten-
tionally steer or direct a consumer to accept a 
home loan with a risk grade less favorable than 
the risk grade that the consumer would qualify 
for based on the then-current underwriting 
guidelines of the creditor or its affiliates, con-
sidering the information known to that creditor, 
including, but not limited to, the consumer’s 
stated objectives and other information provided 
by the consumer. 
‘‘(B) EXCEPTION.—A creditor does not 
violate this section by offering the consumer a 
home loan for which the price (including the 
rate) or the risk grade is based on the par-
ticular origination channel used by the con-
sumer (e.g., internet, retail, broker, or cor-
respondent), even if the consumer might get a 
lower price or a lower risk grade had the con-
sumer used a different origination channel of 
that creditor. 
‘‘(C) DEFINITION.—For purposes of this 
section, the term ‘risk grade’ means the credi-
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tor’s determination of the risk involved in mak-
ing the home loan, considering both the credit 
risk related to the consumer and the risk re-
lated to the specific loan product. 
‘‘(D) RESCISSION OR REFORMATION.— 
‘‘(i) IN GENERAL.—A creditor found 
by a preponderance of the evidence to have 
violated subparagraph (A) shall, if the 
creditor is the holder of the obligation, at 
the consumer’s option— 
‘‘(I) rescind the loan in accord-
ance with the procedures contained in 
section 125(b) and 125(f); or 
‘‘(II) rewrite the loan into a loan 
at the risk grade and pricing that the 
consumer would have originally re-
ceived but for the violation. 
‘‘(ii) RESTITUTION.—In addition to 
the action required under clause (i)(II) 
with respect to a creditor, or in the case of 
a creditor who is not the holder of the obli-
gation and has been found by a preponder-
ance of the evidence to have violated sub-
paragraph (A), such creditor shall make 
appropriate restitution to the consumer of
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all fees, interest, or other charges paid by 
the consumer above those that would have 
been paid had the loan not been originated 
at the less favorable risk grade. 
‘‘(2) BROKERS.— 
‘‘(A) IN GENERAL.—A broker who is not a 
creditor shall not knowingly or intentionally 
steer or direct a consumer to accept a home 
loan offered by a creditor with a risk grade that 
is less favorable than the risk grade that the 
consumer would qualify for on a home loan of-
fered by the creditors or their affiliates with 
whom the broker regularly does business and 
for which the consumer would qualify for based 
on the then-current underwriting guidelines of 
such creditors or their affiliates. 
‘‘(B) CREDITOR
LIABILITY.—A creditor 
shall have no liability under subparagraph (2) 
unless the creditor had actual knowledge of the 
broker’s violation. 
‘‘(C) PENALTY.—A broker who knowingly 
or intentionally violates this section shall be lia-
ble to the consumer for an amount equal to the 
sum of $5,000 and the consumer’s actual finan-
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cial damages and reasonable attorney’s fees and 
court costs. 
‘‘(e) CREDIT REPORTING REQUIREMENTS.— 
‘‘(1) IN GENERAL.—Each creditor who enters 
into a home loan, and each successor, assignee or 
servicer to such creditor with respect to such loan 
shall report monthly the complete payment history, 
favorable and unfavorable, of the obligor with re-
spect to such transaction to a consumer reporting 
agency that compiles and maintains files on con-
sumers on a nationwide basis, while such transaction 
is in effect. 
‘‘(2) EXCEPTION
FOR
SHORT-TERM
HOLD-
ERS.—Paragraph (1) shall not apply to any person 
who holds a home loan for less than 90 days. 
‘‘(3) 
EXCEPTION
FOR
CERTAIN
CIR-
CUMSTANCES.—Paragraph (1) shall not apply in 
connection with a loan forbearance or workout of a 
loan in default or settlement of a dispute or con-
sumer complaint. 
‘‘(4) REGULATIONS.—The Board may, by regu-
lation or order, exempt from or defer reporting by 
other entities not listed in paragraph (2), and ex-
empt or defer reporting under other circumstances 
not listed in paragraph (3).’’.
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(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. Requirements for Home Loans.’’. 
SEC. 109. AMENDMENTS TO DISCLOSURE GUIDELINES. 
Section 105 of the Truth in Lending Act (15 U.S.C. 
1604) is amended by striking paragraph (a) and inserting 
the following new paragraph: 
‘‘(a) The Board shall prescribe regulations to carry 
out the purposes of this title. These regulations may con-
tain such classifications, differentiations, or other provi-
sions, and may provide for such adjustments and excep-
tions for any class of transactions, as in the judgment of 
the Board are necessary or proper to effectuate the pur-
poses of this title, to prevent circumvention or evasion 
thereof, or to facilitate compliance therewith.’’. 
SEC. 110. REGULATIONS. 
Notwithstanding any provision of the Truth in Lend-
ing Act, the Board of Governors of the Federal Reserve 
System shall— 
(1) prescribe such regulations implementing 
this title and the amendments made by this title as 
the Board may determine to be appropriate; and 
(2) publish such regulations in final form in the 
Federal Register before the end of the 6-month pe-
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riod beginning on the date of the enactment of this 
Act. 
SEC. 111. EFFECTIVE DATES. 
(a) IN GENERAL.—This title, and the amendments 
made by this title, shall take effect at the end of the 6- 
month period beginning on the date of the enactment of 
this Act. 
(b) PENDING APPLICATIONS.—This title, and the 
amendments made by this title, shall not apply with re-
spect to applications for consumer credit transactions re-
ceived prior to the effective date of this Act. 
TITLE II—HOUSING 
COUNSELING 
Subtitle A—Consumer Counseling 
SEC. 201. CONSUMER COUNSELING REQUIREMENTS. 
Section 129 of the Truth in Lending Act (15 U.S.C. 
1639) is amended byinserting after subsection (x) (as 
added by section 103(r) of this Act) the following: 
‘‘(y) CONSUMER COUNSELING REQUIREMENTS.— 
‘‘(1) IN GENERAL.—A creditor may not extend 
any credit in the form of a high-cost home loan 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—
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‘‘(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 
high-cost home loan; 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-
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 subsection 
(a) or (c) of section 108 with jurisdiction over 
the creditor as qualified to provide counseling 
on— 
‘‘(i) the advisability of a high-cost 
home loan transaction; and 
‘‘(ii) the appropriateness of a high- 
cost home loan 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
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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.’’. 
Subtitle B—Expanded Housing 
Counseling Opportunities 
SEC. 211. SHORT TITLE. 
This subtitle may be cited as the ‘‘Expanding Hous-
ing Opportunities Through Education and Counseling 
Act’’. 
SEC. 212. 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.
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‘‘(3) FUNCTIONS.— 
‘‘(A) IN
GENERAL.—The Director shall 
have ultimate responsibility within the Depart-
ment, except for the Secretary, for all activities 
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.)
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‘‘(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— 
‘‘(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));
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‘‘(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; 
‘‘(vi) carrying out any functions re-
garding abusive, deceptive, or unscrupulous 
lending practices relating to residential 
mortgage loans that the Secretary con-
siders appropriate, which shall include con-
ducting the study under section 216 of the 
Expanding 
Housing 
Opportunities 
Through Education and Counseling Act; 
‘‘(vii) providing for operation of the 
advisory committee established under para-
graph (4) of this subsection; and 
‘‘(viii) 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.
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‘‘(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 
three years. Members may be reappointed at 
the discretion 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, four shall be appointed 
for a term of one year and four shall be ap-
pointed for a term of two 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.
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‘‘(F) ADVISORY
ROLE
ONLY.—The advi-
sory committee shall have no role in reviewing 
or awarding housing counseling grants. 
‘‘(5) 
SCOPE
OF
HOMEOWNERSHIP
COUN-
SELING.—In carrying out the responsibilities of the 
Director, the Director shall ensure that homeowner-
ship counseling provided by, in connection with, or 
pursuant to any function, activity, or program of the 
Department addresses the entire process of home-
ownership, including the decision to purchase a 
home, the selection and purchase of a home, issues 
arising during or affecting the period of ownership 
of a home (including refinancing, default and fore-
closure, and other financial decisions), and the sale 
or other disposition of a home.’’. 
SEC 213. 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-
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tration by the Department of Housing and 
Urban Development of the counseling proce-
dures for homeownership counseling and rental 
housing counseling provided in connection with 
any program of the Department, including all 
requirements, 
standards, 
and 
performance 
measures that relate to homeownership and 
rental housing counseling. 
‘‘(B) HOMEOWNERSHIP
COUNSELING.— 
For purposes of this subsection and as used in 
the provisions referred to in this subparagraph, 
the term ‘homeownership counseling’ means 
counseling related to homeownership and resi-
dential mortgage loans. Such term includes 
counseling related to homeownership and resi-
dential mortgage loans that is provided pursu-
ant to— 
‘‘(i) section 105(a)(20) of the Housing 
and Community Development Act of 1974 
(42 U.S.C. 5305(a)(20)); 
‘‘(ii) in the United States Housing 
Act of 1937— 
‘‘(I) section 9(e) (42 U.S.C. 
1437g(e));
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‘‘(II) 
section 
8(y)(1)(D) 
(42 
U.S.C. 1437f(y)(1)(D)); 
‘‘(III) section 18(a)(4)(D) (42 
U.S.C. 1437p(a)(4)(D)); 
‘‘(IV) section 23(c)(4) (42 U.S.C. 
1437u(c)(4)); 
‘‘(V) section 32(e)(4) (42 U.S.C. 
1437z–4(e)(4)); 
‘‘(VI) section 33(d)(2)(B) (42 
U.S.C. 1437z–5(d)(2)(B)); 
‘‘(VII) sections 302(b)(6) and 
303(b)(7) 
(42 
U.S.C. 
1437aaa– 
1(b)(6), 1437aaa–2(b)(7)); and 
‘‘(VIII) section 304(c)(4) (42 
U.S.C. 1437aaa–3(c)(4)); 
‘‘(iii) section 302(a)(4) of the Amer-
ican Homeownership and Economic Oppor-
tunity Act of 2000 (42 U.S.C. 1437f note); 
‘‘(iv) sections 233(b)(2) and 258(b) of 
the Cranston-Gonzalez National Affordable 
Housing Act (42 U.S.C. 12773(b)(2), 
12808(b)); 
‘‘(v) this section and section 101(e) of 
the Housing and Urban Development Act 
of 1968 (12 U.S.C. 1701x, 1701 w(e));
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‘‘(vi) section 220(d)(2)(G) of the Low- 
Income Housing Preservation and Resident 
Homeownership Act of 1990 (12 U.S.C. 
4110(d)(2)(G)); 
‘‘(vii) sections 422(b)(6), 423(b)(7), 
424(c)(4), 442(b)(6), and 443(b)(6) of the 
Cranston-Gonzalez 
National 
Affordable 
Housing Act (42 U.S.C. 12872(b)(6), 
12873(b)(7), 
12874(c)(4), 
12892(b)(6), 
and 12893(b)(6)); 
‘‘(viii) section 491(b)(1)(F)(iii) of the 
McKinney-Vento Homeless Assistance Act 
(42 U.S.C. 11408(b)(1)(F)(iii)); 
‘‘(ix) 
sections 
202(3) 
and 
810(b)(2)(A) of the Native American 
Housing and Self-Determination Act of 
1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); 
‘‘(x) in the National Housing Act— 
‘‘(I) in section 203 (12 U.S.C. 
1709), the penultimate undesignated 
paragraph of paragraph (2) of sub-
section (b), subsection (c)(2)(A), and 
subsection (r)(4);
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‘‘(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-
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));
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‘‘(ii) in the United States Housing 
Act of 1937— 
‘‘(I) section 9(e) (42 U.S.C. 
1437g(e)); 
‘‘(II) section 18(a)(4)(D) (42 
U.S.C. 1437p(a)(4)(D)); 
‘‘(III) 
section 
23(c)(4) 
(42 
U.S.C. 1437u(c)(4)); 
‘‘(IV) section 32(e)(4) (42 U.S.C. 
1437z–4(e)(4)); 
‘‘(V) section 33(d)(2)(B) (42 
U.S.C. 1437z–5(d)(2)(B)); and 
‘‘(VI) 
section 
302(b)(6) 
(42 
U.S.C. 1437aaa–1(b)(6)); 
‘‘(iii) section 233(b)(2) of the Cran-
ston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12773(b)(2)); 
‘‘(iv) section 106 of the Housing and 
Urban Development Act of 1968 (12 
U.S.C. 1701x); 
‘‘(v) section 422(b)(6) of the Cran-
ston-Gonzalez National Affordable Housing 
Act (42 U.S.C. 12872(b)(6));
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‘‘(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) TOLL-FREE
TELEPHONE
NUMBER
AND 
WEB SITE.—The Secretary shall provide for the es-
tablishment, operation, and publication of a toll-free 
telephone number and a World Wide Web site 
through which persons interested in homeownership 
or rental housing counseling services may locate and 
obtain names and contact information of persons 
and organizations certified under section 106(e) of 
the Housing and Urban Development Act of 1968 to 
provide such services. 
‘‘(3) 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-
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propriate, by organizations providing homeownership 
counseling services, including any recipients of as-
sistance pursuant to subsection (a)(4). 
‘‘(4) MORTGAGE SOFTWARE SYSTEMS.— 
‘‘(A) CERTIFICATION.—The Secretary shall 
provide for the certification of various computer 
software programs for consumers to use in eval-
uating different residential mortgage loan pro-
posals. The Secretary shall require, for such 
certification, that the mortgage software sys-
tems take into account— 
‘‘(i) the consumer’s financial situation 
and the cost of maintaining a home, in-
cluding insurance, taxes, and utilities; 
‘‘(ii) the amount of time the consumer 
expects to remain in the home or expected 
time to maturity of the loan; 
‘‘(iii) such other factors as the Sec-
retary considers appropriate to assist the 
consumer in evaluating whether to pay 
points, to lock in an interest rate, to select 
an adjustable or fixed rate loan, to select 
a conventional or government-insured or 
guaranteed loan and to make other choices 
during the loan application process.
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If the Secretary determines that available exist-
ing software is inadequate to assist consumers 
during the residential mortgage loan application 
process, the Secretary shall arrange for the de-
velopment by private sector software companies 
of new mortgage software systems that met the 
Secretary’s specifications. 
‘‘(B) USE
AND
INITIAL
AVAILABILITY.— 
Such certified computer software programs 
shall be used to supplement, not replace, hous-
ing counseling. The Secretary shall provide that 
such programs are initially used only in connec-
tion with the assistance of housing counselors 
certified pursuant to subsection (e). 
‘‘(C) AVAILABILITY.—After a period of ini-
tial availability under subparagraph (B) as the 
Secretary considers appropriate, the Secretary 
shall take reasonable steps to make mortgage 
software systems certified pursuant to this 
paragraph widely available through the Internet 
and at public locations, including public librar-
ies, senior-citizen centers, public housing sites, 
offices of public housing agencies that admin-
ister rental housing assistance vouchers, and 
housing counseling centers.
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‘‘(5) 
OUTREACH
TO
VULNERABLE
POPU-
LATIONS.—The Secretary shall develop a multimedia 
outreach program designed to make elderly persons, 
persons who face language barriers, low-income per-
sons, and other potentially vulnerable consumers 
aware that it is advisable, before seeking a residen-
tial mortgage loan, to obtain homeownership coun-
seling from an unbiased and reliable source and that 
such homeownership counseling is available, includ-
ing through programs of the Department of Housing 
and Urban Development. 
‘‘(6) EDUCATION
PROGRAMS.—The Secretary 
shall provide advice and technical assistance to 
States, units of general local government, and non-
profit organizations regarding the establishment and 
operation of, including assistance with the develop-
ment of content and materials for, educational pro-
grams to inform and educate consumers, particularly 
those most vulnerable with respect to residential 
mortgage loans (such as elderly persons, persons 
facing language barriers, low-income persons, and 
other potentially vulnerable consumers), regarding 
home mortgages, mortgage refinancing, home equity 
loans, and home repair loans.’’.
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(b) CONFORMING AMENDMENTS
TO GRANT PRO-
GRAM
FOR HOMEOWNERSHIP COUNSELING ORGANIZA-
TIONS.—Section 106(c)(5)(A)(ii) of the Housing and 
Urban 
Development 
Act 
of 
1968 
(12 
U.S.C. 
1701x(c)(5)(A)(ii)) is amended— 
(1) in subclause (II), by striking ‘‘and’’ at the 
end; 
(2) in subclause (III) by striking the period at 
the end and inserting ‘‘; and’’; and 
(3) by inserting after subclause (III) the fol-
lowing new subclause: 
‘‘(IV) notify the housing or mort-
gage applicant of the availability of 
mortgage software systems provided 
pursuant to subsection (h)(4).’’. 
SEC. 214. GRANTS FOR HOUSING COUNSELING ASSIST-
ANCE. 
Section 106(a) of the Housing and Urban Develop-
ment Act of 1968 (12 U.S.C. 1701x(a)(3)) is amended 
by adding at the end the following new paragraph: 
‘‘(4) HOMEOWNERSHIP
AND RENTAL COUN-
SELING ASSISTANCE.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
make financial assistance available under this 
paragraph to States, units of general local gov-
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ernments, and nonprofit organizations providing 
homeownership or rental counseling (as such 
terms are defined in subsection (h)(1)). 
‘‘(B) QUALIFIED ENTITIES.—The Secretary 
shall establish standards and guidelines for eli-
gibility of organizations (including govern-
mental and nonprofit organizations) to receive 
assistance under this paragraph. 
‘‘(C) DISTRIBUTION.—Assistance made avail-
able under this paragraph shall be distributed a 
manner that encourages efficient and successful 
counseling programs. 
‘‘(D) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—There are authorized to be appro-
priated $75,000,000 for each of fiscal years 
2006 through 2009 for— 
‘‘(i) the operations of the Office of 
Housing Counseling of the Department of 
Housing and Urban Development; 
‘‘(ii) the responsibilities of the Secretary 
under paragraphs (2) through (6) of sub-
section (h); and 
‘‘(iii) assistance pursuant to this para-
graph for entities providing homeownership 
and rental counseling.’’.
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SEC. 215. REQUIREMENTS TO USE HUD-CERTIFIED COUN-
SELORS UNDER HUD PROGRAMS. 
Section 106(e) of the Housing and Urban Development 
Act of 1968 (12 U.S.C. 1701x(e)) is amended— 
(1) by striking paragraph (1) and inserting the 
following new paragraph: 
‘‘(1) REQUIREMENT FOR ASSISTANCE.—An orga-
nization may not receive assistance for counseling 
activities under subsection (a)(1)(iii), (a)(2), (a)(4), 
(c), or (d) of this section, or under section 101(e), 
unless the organization, or the individuals through 
which the organization provides such counseling, has 
been certified by the Secretary under this subsection 
as competent to provide such counseling.’’; 
(2) in paragraph (2)— 
(A) by inserting ‘‘and for certifying or-
ganizations’’ before the period at the end 
of the first sentence; and 
(B) in the second sentence by striking 
‘‘for certification’’ and inserting ‘‘, for cer-
tification of an organization, that each in-
dividual through which the organization 
provides counseling shall demonstrate, and, 
for certification of an individual.’’; 
(3) in paragraph (3), by inserting ‘‘organizations 
and’’ before ‘‘individuals’’;
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(4) by redesignating paragraph (3) as paragraph 
(5); and 
(5) by inserting after paragraph (2) the following 
new paragraphs: 
‘‘(3) REQUIREMENT
UNDER
HUD
PROGRAMS.— 
Any homeownership counseling or rental housing 
counseling (as such terms are defined in subsection 
(h)(1)) required under, or provided in connection 
with, any program administered by the Department 
of Housing and Urban Development shall be pro-
vided only by organizations or counselors certified by 
the Secretary under this subsection as competent to 
provide such counseling. 
‘‘(4) OUTREACH.—The Secretary shall take such 
actions as the Secretary considers appropriate to en-
sure that individuals and organizations providing 
homeownership or rental housing counseling are 
aware of the certification requirements and stand-
ards of this subsection and of the training and cer-
tification programs under subsection (f).’’. 
SEC. 216. STUDY OF DEFAULTS AND FORECLOSURES. 
The Secretary of Housing and Urban Development shall 
conduct an extensive study of the primary causes of de-
fault and foreclosure of home loans, using as much empir-
ical data as are available. The study shall also examine
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the role of escrow accounts in helping prime and nonprime 
borrowers to avoid defaults and foreclosures. Not later 
than 12 months after the date of the enactment of this 
Act, the Secretary shall submit to the Congress a prelimi-
nary report regarding the study. Not later than 24 months 
after such date of enactment, the Secretary shall submit 
a final report regarding the results of the study, which 
shall include any recommended legislation relating to the 
study, and recommendations for best practices and for a 
process to identify populations that need counseling the 
most. 
SEC. 217. DEFINITIONS FOR COUNSELING-RELATED PRO-
GRAMS. 
Section 106 of the Housing and Urban Development 
Act of 1968 (12 U.S.C.1701x), as amended by the pre-
ceding provisions of this title, is further amended by add-
ing at the end the following new subsection: 
‘‘(i) DEFINITIONS.—For purposes of this section: 
‘‘(1) 
NONPROFIT
ORGANIZATION.—The 
term 
‘‘nonprofit organization’’ has the meaning given 
such term in section 104(5) of the Cranston-Gon-
zalez National Affordable Housing Act (42 U.S.C. 
12704(5)), except that subparagraph (D) of such 
section shall not apply for purposes of this section.
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‘‘(2) STATE.—The term ‘State’ means each of the 
several States, the Commonwealth of Puerto Rico, 
the District of Columbia, the Commonwealth of the 
Northern Mariana Islands, Guam, the Virgin Is-
lands, American Samoa, the Trust Territories of the 
Pacific, or any other possession of the United 
States. 
‘‘(3) UNIT OF GENERAL LOCAL GOVERNMENT.— 
The term ‘unit of general local government’ means 
any city, county, parish, town, township, borough, 
village, or other general purpose political subdivision 
of a State.’’. 
SEC. 218. UPDATING AND SIMPLIFICATION OF MORTGAGE 
INFORMATION BOOKLET. 
Section 5 of the Real Estate Settlement Procedures Act 
of 1974 (12 U.S.C. 2604) is amended— 
(1) in the section heading, by striking ‘‘SPE-
CIAL’’ and inserting ‘‘HOME BUYING’’; 
(2) by striking subsections (a) and (b) and insert-
ing the following new subsections: 
‘‘(a) PREPARATION
AND DISTRIBUTION.—The Sec-
retary shall prepare, at least once every 5 years, a booklet 
to help consumers applying for federally related mortgage 
loans to understand the nature and costs of real estate 
settlement services. The Secretary shall prepare the book-
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let in various languages and cultural styles, as the Sec-
retary determines to be appropriate, so that the booklet 
is understandable and accessible to homebuyers of dif-
ferent ethnic and cultural backgrounds. The Secretary 
shall distribute such booklets to all lenders that make fed-
erally related mortgage loans. The Secretary shall also dis-
tribute to such lenders lists, organized by location, of 
homeownership counselors certified under section 106(e) 
of the Housing and Urban Development Act of 1968 (12 
U.S.C. 1701x(e)) for use in complying with the require-
ment under subsection (c) of this section. 
‘‘(b) CONTENTS.—Each booklet shall be in such form 
and detail as the Secretary shall prescribe and, in addition 
to such other information as the Secretary may provide, 
shall include in plain and understandable language the fol-
lowing information: 
‘‘(1) A description and explanation of the na-
ture and purpose of the costs incident to a real es-
tate settlement or a federally related mortgage loan. 
The description and explanation shall provide gen-
eral information about the mortgage process as well 
as specific information concerning, at a minimum— 
‘‘(A) balloon payments; 
‘‘(B) prepayment penalties; and
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‘‘(C) the trade-off between closing costs 
and the interest rate over the life of the loan. 
‘‘(2) An explanation and sample of the uniform 
settlement statement required by section 4. 
‘‘(3) A list and explanation of lending practices, 
including those prohibited by the Truth in Lending 
Act or other applicable Federal law, and of other un-
fair practices and unreasonable or unnecessary 
charges to be avoided by the prospective buyer with 
respect to a real estate settlement. 
‘‘(4) A list and explanation of questions a con-
sumer obtaining a federally related mortgage loan 
should ask regarding the loan, including whether the 
consumer will have the ability to repay the loan, 
whether the consumer sufficiently shopped for the 
loan, whether the loan terms include prepayment 
penalties or balloon payments, and whether the loan 
will benefit the borrower. 
‘‘(5) An explanation of the right of rescission as 
to certain transactions provided by sections 125 and 
129 of the Truth in Lending Act. 
‘‘(6) A brief explanation of the nature of a vari-
able rate mortgage and a reference to the booklet 
entitled ‘Consumer Handbook on Adjustable Rate 
Mortgages’, published by the Board of Governors of
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the Federal Reserve System pursuant to section 
226.19(b)(1) of title 12, Code of Federal Regula-
tions, or to any suitable substitute of such booklet 
that such Board of Governors may subsequently 
adopt pursuant to such section. 
‘‘(7) A brief explanation of the nature of a 
home equity line of credit and a reference to the 
pamphlet required to be provided under section 
127A of the Truth in Lending Act. 
‘‘(8) Information about homeownership coun-
seling services made available pursuant to section 
106(a)(4) of the Housing and Urban Development 
Act of 1968 (12 U.S.C. 1701x(a)(4)), a rec-
ommendation that the consumer use such services, 
and notification that a list of certified providers of 
homeownership counseling in the area, and their 
contact information, is available. 
‘‘(9) An explanation of the nature and purpose 
of escrow accounts when used in connection with 
loans secured by residential real estate and the re-
quirements under section 10 of this Act regarding 
such accounts. 
‘‘(10) An explanation of the choices available to 
buyers of residential real estate in selecting persons
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to provide necessary services incidental to a real es-
tate settlement. 
‘‘(11) An explanation of a consumer’s respon-
sibilities, liabilities, and obligations in a mortgage 
transaction. 
‘‘(12) An explanation of the nature and purpose 
of real estate appraisals, including the difference be-
tween an appraisal and a home inspection. 
‘‘(13) Notice that the Office of Housing of the 
Department of Housing and Urban Development has 
made publicly available a brochure regarding loan 
fraud and a World Wide Web address and toll-free 
telephone number for obtaining the brochure. 
The booklet prepared pursuant to this section shall take 
into consideration differences in real estate settlement pro-
cedures that may exist among the several States and terri-
tories of the United States and among separate political 
subdivisions within the same State and territory.’’; 
(3) in subsection (c), by striking the last sen-
tence and inserting the following new sentence: 
‘‘Each lender shall also include with the booklet a 
reasonably complete or updated list of homeowner-
ship counselors who are certified pursuant to section 
106(e) of the Housing and Urban Development Act
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of 1968 (12 U.S.C. 1701x(e)) and located in the 
area of the lender.’’; and 
(4) in subsection (d), by inserting after the pe-
riod at the end of the first sentence the following: 
‘‘The lender shall provide the HUD-issued booklet in 
the version that is most appropriate for the person 
receiving it.’’. 
SEC. 219. OPTION FOR NOTICE OF FORECLOSURE PREVEN-
TION COUNSELING AVAILABILITY. 
Section 4 of the Real Estate Settlement Procedures 
Act of 1974 (12 U.S.C. 2603) is amended by adding at 
the end the following new subsection: 
‘‘(c) OPTION FOR NOTICE OF FORECLOSURE PRE-
VENTION COUNSELING AVAILABILITY.— 
‘‘(1) OPTION.—In connection with any federally 
related mortgage loan, the mortgagee shall provide 
the borrower, at the time of the execution of the 
mortgage, an optional written agreement that, if 
signed by the borrower, allows, but does not require, 
the mortgagee to provide the notice described in 
paragraph (2) to a homeownership counseling entity 
that has agreed to provide the notice and counseling 
required under paragraph (3) and is approved by the 
Secretary.
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‘‘(2) NOTICE
TO
COUNSELING
AGENCY.—The 
notice described in this paragraph, with respect to 
any federally related mortgage loan, is notice, pro-
vided at the earliest time practicable after the bor-
rower becomes 60 days delinquent with respect to 
any payment due under the mortgage, that the bor-
rower is so delinquent and of how to contact the bor-
rower. Such notice may only be provided once with 
respect to each delinquency period for a mortgage. 
‘‘(3) NOTICE
TO
MORTGAGOR.—Upon notice 
from a mortgagee that a borrower is 60 days delin-
quent with respect to payments due under the mort-
gage, the homeownership counseling entity shall at 
the earliest time practicable notify the borrower of 
such delinquency, that the entity makes available 
foreclosure prevention counseling that may assist the 
mortgagor in resolving the delinquency, and of how 
to contact the entity to arrange for such counseling. 
‘‘(4) ABILITY TO CURE.—Failure to provide the 
optional written agreement required under para-
graph (1) may be collected by sending such agree-
ment to the borrower not later than the earliest time 
practicable after the mortgagor first becomes 60 
days delinquent with respect to payments due under 
the mortgage. Mortgage insurance, if any, provided
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in connection with such federally related mortgage 
loan may not be terminated and penalties for such 
failure may not be prospectively or retroactively im-
posed if such failure is corrected in accordance with 
this paragraph. 
‘‘(5) LIMITATION
ON
LIABILITY
OF
MORT-
GAGEE.—A mortgagee shall not incur any liability or 
penalties for any failure of a homeownership coun-
seling entity to provide notice under paragraph (3). 
‘‘(6) NO
PRIVATE
RIGHT
OF
ACTION.—This 
subsection shall not create any private right of ac-
tion on behalf of the borrower. 
‘‘(7) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply: 
‘‘(A) DELINQUENCY
PERIOD.—The term 
‘‘delinquency period’’ means, with respect to a 
mortgage, a period that begins upon the bor-
rower becoming delinquent with respect to pay-
ments due under the mortgage and ends upon 
the first subsequent occurrence of such pay-
ments under the mortgage becoming current or 
the property subject to the mortgage being fore-
closed or otherwise disposed of. 
‘‘(B) HOMEOWNERSHIP COUNSELING ENTI-
TY.—The term ‘homeownership counseling enti-
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ty’ means any State, unit of general local gov-
ernment, or nonprofit organization that pro-
vides homeownership counseling (as defined in 
section 106(h)(1)(B) of the Housing and Urban 
Development Act of 1968).’’. 
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