H. R. 4173—801 
and Urban Development Act of 1968 (12 U.S.C. 1701x(a)(4)), 
a recommendation 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 avail-
able. 
‘‘(9) An explanation of the nature and purpose of escrow 
accounts when used in connection with loans secured by resi-
dential real estate and the requirements 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 to provide nec-
essary services incidental to a real estate settlement. 
‘‘(11) An explanation of a consumer’s responsibilities, liabil-
ities, and obligations in a mortgage transaction. 
‘‘(12) An explanation of the nature and purpose of real 
estate appraisals, including the difference between 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 consid-
eration differences in real estate settlement procedures that may 
exist among the several States and territories of the United States 
and among separate political subdivisions within the same State 
and territory.’’; 
(3) in subsection (c), by inserting at the end the following 
new sentence: ‘‘Each lender shall also include with the booklet 
a reasonably complete or updated list of homeownership coun-
selors who are certified pursuant to section 106(e) of the 
Housing and Urban Development Act 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 period at the 
end of the first sentence the following: ‘‘The lender shall provide 
the booklet in the version that is most appropriate for the 
person receiving it.’’. 
SEC. 1451. HOME INSPECTION COUNSELING. 
(a) PUBLIC OUTREACH.— 
(1) IN
GENERAL.—The Secretary of Housing and Urban 
Development (in this section referred to as the ‘‘Secretary’’) 
shall take such actions as may be necessary to inform potential 
homebuyers of the availability and importance of obtaining 
an independent home inspection. Such actions shall include— 
(A) publication of the HUD/FHA form HUD 92564– 
CN entitled ‘‘For Your Protection: Get a Home Inspection’’, 
in both English and Spanish languages; 
(B) publication of the HUD/FHA booklet entitled ‘‘For 
Your Protection: Get a Home Inspection’’, in both English 
and Spanish languages; 
(C) development and publication of a HUD booklet 
entitled ‘‘For Your Protection—Get a Home Inspection’’ that 
does not reference FHA-insured homes, in both English 
and Spanish languages; and 
(D) publication of the HUD document entitled ‘‘Ten 
Important Questions To Ask Your Home Inspector’’, in 
both English and Spanish languages.
H. R. 4173—802 
(2) AVAILABILITY.—The Secretary shall make the materials 
specified in paragraph (1) available for electronic access and, 
where appropriate, inform potential homebuyers of such avail-
ability through home purchase counseling public service 
announcements and toll-free telephone hotlines of the Depart-
ment of Housing and Urban Development. The Secretary shall 
give special emphasis to reaching first-time and low-income 
homebuyers with these materials and efforts. 
(3) UPDATING.—The Secretary may periodically update and 
revise such materials, as the Secretary determines to be appro-
priate. 
(b) REQUIREMENT FOR FHA-APPROVED LENDERS.—Each mort-
gagee approved for participation in the mortgage insurance pro-
grams under title II of the National Housing Act shall provide 
prospective homebuyers, at first contact, whether upon pre-quali-
fication, pre-approval, or initial application, the materials specified 
in subparagraphs (A), (B), and (D) of subsection (a)(1). 
(c) REQUIREMENTS
FOR HUD-APPROVED COUNSELING AGEN-
CIES.—Each counseling agency certified pursuant by the Secretary 
to provide housing counseling services shall provide each of their 
clients, as part of the home purchase counseling process, the mate-
rials specified in subparagraphs (C) and (D) of subsection (a)(1). 
(d) TRAINING.—Training provided the Department of Housing 
and Urban Development for housing counseling agencies, whether 
such training is provided directly by the Department or otherwise, 
shall include— 
(1) providing information on counseling potential home-
buyers of the availability and importance of getting an inde-
pendent home inspection; 
(2) providing information about the home inspection 
process, including the reasons for specific inspections such as 
radon and lead-based paint testing; 
(3) providing information about advising potential home-
buyers on how to locate and select a qualified home inspector; 
and 
(4) review of home inspection public outreach materials 
of the Department. 
SEC. 1452. WARNINGS TO HOMEOWNERS OF FORECLOSURE RESCUE 
SCAMS. 
(a) ASSISTANCE TO NRC.—Notwithstanding any other provision 
of law, of any amounts made available for any fiscal year pursuant 
to section 106(a)(4)(F) of the Housing and Urban Development 
Act of 1968 (12 U.S.C. 1701x(a)(4)(F)) (as added by section 1444), 
10 percent shall be used only for assistance to the Neighborhood 
Reinvestment Corporation for activities, in consultation with 
servicers of residential mortgage loans, to provide notice to bor-
rowers under such loans who are delinquent with respect to pay-
ments due under such loans that makes such borrowers aware 
of the dangers of fraudulent activities associated with foreclosure. 
(b) NOTICE.—The Neighborhood Reinvestment Corporation, in 
consultation with servicers of residential mortgage loans, shall use 
the amounts provided pursuant to subsection (a) to carry out activi-
ties to inform borrowers under residential mortgage loans— 
(1) that the foreclosure process is complex and can be 
confusing;
H. R. 4173—803 
(2) that the borrower may be approached during the fore-
closure process by persons regarding saving their home and 
they should use caution in any such dealings; 
(3) that there are Federal Government and nonprofit agen-
cies that may provide information about the foreclosure process, 
including the Department of Housing and Urban Development; 
(4) that they should contact their lender immediately, con-
tact the Department of Housing and Urban Development to 
find a housing counseling agency certified by the Department 
to assist in avoiding foreclosure, or visit the Department’s 
website regarding tips for avoiding foreclosure; and 
(5) of the telephone number of the loan servicer or suc-
cessor, the telephone number of the Department of Housing 
and Urban Development housing counseling line, and the Uni-
form Resource Locators (URLs) for the Department of Housing 
and Urban Development Web sites for housing counseling and 
for tips for avoiding foreclosure. 
Subtitle E—Mortgage Servicing 
SEC. 1461. ESCROW AND IMPOUND ACCOUNTS RELATING TO CERTAIN 
CONSUMER CREDIT TRANSACTIONS. 
(a) IN GENERAL.—Chapter 2 of the Truth in Lending Act (15 
U.S.C. 1631 et seq.) is amended by inserting after section 129C 
(as added by section 1411) the following new section: 
‘‘§ 129D. Escrow or impound accounts relating to certain con-
sumer credit transactions 
‘‘(a) IN GENERAL.—Except as provided in subsection (b), (c), 
(d), or (e), a creditor, in connection with the consummation of 
a consumer credit transaction secured by a first lien on the principal 
dwelling of the consumer, other than a consumer credit transaction 
under an open end credit plan or a reverse mortgage, shall establish, 
before the consummation of such transaction, an escrow or impound 
account for the payment of taxes and hazard insurance, and, if 
applicable, flood insurance, mortgage insurance, ground rents, and 
any other required periodic payments or premiums with respect 
to the property or the loan terms, as provided in, and in accordance 
with, this section. 
‘‘(b) WHEN REQUIRED.—No impound, trust, or other type of 
account for the payment of property taxes, insurance premiums, 
or other purposes relating to the property may be required as 
a condition of a real property sale contract or a loan secured 
by a first deed of trust or mortgage on the principal dwelling 
of the consumer, other than a consumer credit transaction under 
an open end credit plan or a reverse mortgage, except when— 
‘‘(1) any such impound, trust, or other type of escrow or 
impound account for such purposes is required by Federal 
or State law; 
‘‘(2) a loan is made, guaranteed, or insured by a State 
or Federal governmental lending or insuring agency; 
‘‘(3) the transaction is secured by a first mortgage or lien 
on the consumer’s principal dwelling having an original prin-
cipal obligation amount that— 
‘‘(A) does not exceed the amount of the maximum 
limitation on the original principal obligation of mortgage
H. R. 4173—804 
in effect for a residence of the applicable size, as of the 
date such interest rate set, pursuant to the sixth sentence 
of section 305(a)(2) the Federal Home Loan Mortgage Cor-
poration Act (12 U.S.C. 1454(a)(2)), and the annual percent-
age rate will exceed the average prime offer rate as defined 
in section 129C by 1.5 or more percentage points; or 
‘‘(B) exceeds the amount of the maximum limitation 
on the original principal obligation of mortgage in effect 
for a residence of the applicable size, as of the date such 
interest rate set, pursuant to the sixth sentence of section 
305(a)(2) the Federal Home Loan Mortgage Corporation 
Act (12 U.S.C. 1454(a)(2)), and the annual percentage rate 
will exceed the average prime offer rate as defined in 
section 129C by 2.5 or more percentage points; or 
‘‘(4) so required pursuant to regulation. 
‘‘(c) EXEMPTIONS.—The Board may, by regulation, exempt from 
the requirements of subsection (a) a creditor that— 
‘‘(1) operates predominantly in rural or underserved areas; 
‘‘(2) together with all affiliates, has total annual mortgage 
loan originations that do not exceed a limit set by the Board; 
‘‘(3) retains its mortgage loan originations in portfolio; and 
‘‘(4) meets any asset size threshold and any other criteria 
the Board may establish, consistent with the purposes of this 
subtitle. 
‘‘(d) 
DURATION
OF
MANDATORY
ESCROW
OR
IMPOUND 
ACCOUNT.—An escrow or impound account established pursuant 
to subsection (b) shall remain in existence for a minimum period 
of 5 years, beginning with the date of the consummation of the 
loan, unless and until— 
‘‘(1) such borrower has sufficient equity in the dwelling 
securing the consumer credit transaction so as to no longer 
be required to maintain private mortgage insurance; 
‘‘(2) such borrower is delinquent; 
‘‘(3) such borrower otherwise has not complied with the 
legal obligation, as established by rule; or 
‘‘(4) the underlying mortgage establishing the account is 
terminated. 
‘‘(e) LIMITED EXEMPTIONS FOR LOANS SECURED BY SHARES IN 
A COOPERATIVE
OR
IN WHICH
AN ASSOCIATION MUST MAINTAIN 
A MASTER INSURANCE POLICY.—Escrow accounts need not be estab-
lished for loans secured by shares in a cooperative. Insurance pre-
miums need not be included in escrow accounts for loans secured 
by dwellings or units, where the borrower must join an association 
as a condition of ownership, and that association has an obligation 
to the dwelling or unit owners to maintain a master policy insuring 
the dwellings or units. 
‘‘(f) CLARIFICATION
ON ESCROW ACCOUNTS
FOR LOANS NOT 
MEETING STATUTORY TEST.—For mortgages not covered by the 
requirements of subsection (b), no provision of this section shall 
be construed as precluding the establishment of an impound, trust, 
or other type of account for the payment of property taxes, insurance 
premiums, or other purposes relating to the property— 
‘‘(1) on terms mutually agreeable to the parties to the 
loan; 
‘‘(2) at the discretion of the lender or servicer, as provided 
by the contract between the lender or servicer and the borrower; 
or